Hello Brick Brief readers, 

Thank you for your continued support. Recent data show softer-than-expected PPI inflation ahead of today’s CPI report, a three-year high in mortgage applications as rates fall, and continued data center expansion.

📉 PPI Drop Signals Softer Inflation
The Producer Price Index (PPI) unexpectedly fell 0.1% in August, defying economists' expectations of a 0.3% gain and providing a positive sign for potential rate cuts.The Federal Reserve will be closely watching today’s CPI report for more proof points to on their inflation forecast.

🏡 Mortgage Rates Lift Activity
Mortgage applications reached a three-year high as refinancing and purchase demand surged after 30-year rates dropped to 6.49%, their lowest in nearly a year. Despite recent developments, Zillow continues to project that rates will finish 2025 in the mid-6% range, which would limit the potential for lasting affordability gains.

💻 Data Center Expansion Accelerates
Brookfield launched an AI Infrastructure Fund to build new data centers and gigafactories amidst this year’s $400 billion data center buildout. Recent deals, such as OpenAI's $300 billion cloud deal with Oracle and a record $40 billion annual rate for U.S. data center construction in June, confirm that this buildout is only continuing to accelerate.

30Y Mortgage: 6.29%

10Y Treasury Yield: 4.05% (-4 bps)

WSJ Prime Rate: 7.50%

FTSE NAREIT Index: 772.18 (-0.10%) 

30-day SOFR Average: 4.37%

US producer prices dropped 0.1% in August, defying expectations for a 0.3% increase — First decline in four months as retailers absorbed tariff costs (Bloomberg)

RaceTrac has agreed to acquire sandwich chain Potbelly for $566 million, signaling a strategic push into the fast-casual dining sector as it looks to diversify beyond fuel and packaged goods.

🧱 RaceTrac operates more than 800 RaceTrac and RaceWay locations across 14 states, along with approximately 1,200 Gulf stations. This national footprint gives the company a ready platform to scale an owned dining concept across its fuel and retail network.

🧱 Potbelly, founded in Chicago in 1977, owns over 445 sandwich shops and franchises more than 105 additional locations across the U.S. Its brand recognition, combined with a flexible franchise model, gives RaceTrac an engine for expansion in both existing and new markets.

🧱 The acquisition enables RaceTrac to internalize food offerings across its convenience store portfolio, reducing reliance on third-party vendors and increasing control over product quality, pricing, and customer experience.

🧱 Entering the fast-casual space enhances RaceTrac’s ability to drive traffic, improve margins, and unlock growth channels beyond traditional convenience store sales. It also offers protection against fuel price volatility and shifts in consumer spending.

🧱 Both companies bring deep experience in real estate, site selection, and franchise development. Their combined strengths should accelerate the rollout of co-located stores and allow RaceTrac to embed Potbelly locations into its existing retail infrastructure.

Takeaway: This deal positions RaceTrac to evolve into a vertically integrated operator with a national footprint in both convenience retail and fast-casual dining. By acquiring a well-established brand, RaceTrac gains the ability to drive higher-margin foodservice revenue, expand its customer base, and compete directly with hybrid operators like Wawa and Sheetz. With over 2,000 combined retail and fuel locations, the company now has the scale, distribution, and operating leverage to transform Potbelly into a core pillar of its long-term growth strategy.

US home price growth slowed to 3.5% in 2025 -- Pace is half of last year, with median single-family cost at $389K in August (Homes.com)

Overall mortgage activity hit a three-year high as refinancing and home-purchase demand rose -- Driven by 30-year rates falling to 6.49%, the lowest in 11 months (Bloomberg)

Zillow forecasts mortgage rates to end 2025 in the mid-6% range -- Outlook holds steady even after recent rate declines (Zillow)

Insight: Zillow still expects mortgage rates to end 2025 around 6.5%, anticipating that only modest Fed cuts and persistent inflation will prevent rates from dropping much below current levels.

US multifamily rent growth stalled at 1% in August -- Midwest (2.5%) and Northeast (2.2%) outperformed while the West (-1.3%) and South (0.2%) lagged (Apartments.com)

Office capital markets show early signs of recovery -- CBRE survey finds fewer B and C properties with double-digit cap rates, hinting at easing distress (CBRE)

NBCUniversal mandates 4-day office return in January – Staff must work Monday to Thursday or take severance (Bisnow)

Moore & Van Allen signs 206K SF, 15-year lease in Charlotte, NC – Anchor tenant preleases top nine floors of Riverside’s $725M Queensbridge Collective mixed-use tower (TheRealDeal)

Cushman & Wakefield says tariffs, labor shortages, and sustainability demands are reshaping logistics – Companies are turning to AI, automation, and data-driven site selection to build resilient, efficient supply chains (CushmanWakefield)

CRE deal volume hit a 2025 high in July -- Transactions rose 10% MoM as midcap $50–$100M deals led with 72 closings and multifamily dominated while retail, industrial, office, and land slipped (GlobeSt)

OpenAI signs $300B cloud deal with Oracle – Contract requires 4.5 GW capacity, straining Oracle’s debt load and OpenAI’s finances (WSJ)

US data center construction spending hits record $40B annual rate in June – Bank of America says AI-driven demand lifted outlays 30% YoY after a 50% surge in 2024 (Reuters)

Riverside secures $725M financing for Charlotte, NC mixed-use tower – Apollo provides debt and RXR supplies equity to fund the 43-story Queensbridge Collective project (TheRealDeal)

Reger Holdings secures $105M construction financing for Austin, TX life-science project – $75M note-on-note backs first 223K SF EastVillage lab fully pre-leased to BillionToOne (TheRealDeal)

Ironstate and Panepinto secure $340M refi for Jersey City, NJ mixed-use towers – Truist provides financing for the 938-unit 50 & 70 Columbus with 28K SF retail (TheRealDeal)

AJ Capital secures $304M refi for seven Graduate Hotels in MD, OH, MI, OR, AR, CA, and PA – Aareal Capital and Barings provided the five-year loan for the 1,340-key university-market portfolio (CommercialObserver).

Barings provides $230M refi for SoHo, NY mixed-use buildings – Loan refinances Northwood Investors’ adjacent properties at 520 and 524 Broadway acquired for $325M in 2021 (CommercialObserver)

Northmarq provides $50M Freddie Mac refi for River House Apartments in Santa Ana, CA – Loan covers 240-unit garden-style complex owned by Advanced Real Estate (CommercialObserver)

Convenience store operator RaceTrac buys sandwich chain Potbelly for $566M – Deal values shares at $17.12 each, a 47% premium to the 90-day average (Reuters)

Blackstone buys 352-room East Miami hotel in Brickell, FL for $325M+ from Trinity and Certares – Acquisition adds to Blackstone’s Florida lodging bets including Sunseeker Resort, W Fort Lauderdale, and Hyatt Clearwater Beach (Bloomberg)

Benchmark buys mixed-use building in Manhattan, NY for $66M – 15-story property includes 121 apartments and three ground-floor retail spaces, acquired from Heller Realty (CommercialObserver)

EastGroup Properties lists 261K SF warehouse in Long Beach, CA for $88M – Decades-old industrial asset near Port of Long Beach was renovated four years ago (TheRealDeal)

Manulife and TruAmerica launch $1B affordable housing JV – Anchor Point Residential debuts with 51-property, 6,000-unit portfolio across California, Texas, and Washington (Bisnow)

Insight: Affordability has become the top concern for homebuyers in 2025 as record housing prices and elevated mortgage rates squeeze budgets. Manulife and TruAmerica aim to capitalize on surging demand for affordable rental housing with their joint venture.

Brookfield launches AI Infrastructure Fund – Asset manager secured investors and deals for new strategy to build data centers and gigafactories amid surging global demand (Bloomberg)

Trump Media files for US red-state REIT ETF – Proposed fund would target real estate in Republican-leaning states as part of its America First lineup (Bloomberg)

Bank CRE loan distress fell to 1.52% in Q2 from 1.59% -- First decline since 2022, but levels remain elevated with large maturities and tight refi conditions ahead (GlobeSt)

Diald AI integrates Moody’s verified data on 8M+ US commercial properties -- Partnership adds transaction histories, comps, and AI agent workflows for zoning and underwriting (GlobeSt)

Prologis invests in AI logistics startups – Locus Robotics deploys mobile bots for fulfillment and SVT Robotics provides plug-and-play software to integrate automation in Prologis warehouses (Prologis)