Hello Brick Brief readers, 

Thank you for your continued support! Today we finally saw an end to the government shutdown although the Fed now faces a tough December rate decision, multifamily REITs see a supply turning point, and AI firms continue to pour billions into new data centers.

⚡ Shutdown Leaves Fed Without Key Data
Lawmakers ended the record 43-day government shutdown although the absence of October CPI and jobs data now complicates the Fed’s December rate debate. Fed officials Collins and Bostic favor holding rates steady, while Reuters economists widely expect a December cut as labor softness strengthens calls for easing.

🏢 Multifamily Nears a Supply Turning Point
Multifamily REITs see a turning point as they work through elevated supply and anticipate deliveries tapering in 2026 and 2027, in line with RealPage’s forecast. Apartment investment surged in Q3 with $43.8B in volume as high-profile single-asset trades dominated; only 1,680 properties changed hands.

💻 AI Firms Accelerate U.S. Data Center Buildouts
Anthropic committed $50B to new gigawatt-scale data center campuses in Texas and New York. Meta announced plans to invest $1B in a Wisconsin facility and fund $200M in grid upgrades to support its AI infrastructure expansion.

30Y Mortgage: 6.29% (-5 bps) 

10Y Treasury Yield: 4.08%

WSJ Prime Rate: 7.25%

FTSE NAREIT Index: 768.63 (-0.89%)

30-day SOFR Average: 4.15%

The 43-day U.S. government shutdown ends after President Trump signs a funding bill – The House passed the measure 222–209 to restart agencies and keep the government funded through Jan. 30 (Bloomberg)

White House says October jobs and CPI reports may never be released – The shutdown halted BLS data collection and leaves Fed officials preparing for the December meeting without key inflation and labor metrics (Bloomberg)

Fed’s Collins pushes to hold rates steady – She argues strong demand and sticky inflation call for keeping policy tight as markets scale back expectations for a December cut (Bloomberg)

Fed’s Bostic favors no further cuts – He says stubborn inflation poses the bigger risk and argues the labor data is too unclear to justify easing (Reuters)

Reuters economists expect a December Fed cut – 80% of forecasters see a 25 bp move to 3.50%–3.75% as labor-market softness strengthens calls for another reduction (Reuters)

CRE dealmaking stayed stuck at pre-Covid levels in Q3 as dollar volume rose just 5% YoY – Moody’s says buyers concentrated on larger, higher-quality assets while hotel transactions fell 30% in September (GlobeSt)

Net-lease investment rose 24% YoY to $48.1B in Q3 across all sectors – Office climbed 29% to $2.6B while industrial fell 19% to $5.6B, highlighting sharp differences in sector demand (CBRE)

NYC developers rush to file 99-unit buildings – A 485-x tax rule that requires $40 hourly wages once a project hits 100 units is pushing developers to cap designs at 99 units as filings surge across the city (Bloomberg)

I question why the city finds it necessary to set a $40 hourly wage floor for projects with more than 100 units, as this raises construction costs at a time when Manhattan is already struggling with a housing affordability crisis driven by low supply.

LA caps rent hikes at 4% for rent-stabilized units – The new limit covers 651,000 apartments, or 74% of the city’s stock, and replaces the prior 3%–8% range as lawmakers push to ease rent burdens (Bisnow)

Homebuying activity started November at its strongest pace since 2022 – Purchase loan applications jumped 6% week over week and 31% YoY even as mortgage rates rebounded from their late-October low (Inman)

Nearly 1 million homeowners now sit underwater on their mortgages in Q3 – ICE reports a 23% YoY jump in foreclosure starts to 103,000 as negative equity clusters in Gulf Coast Florida and Austin (Inman)

Mortgage rates move sideways after the Fed’s October cut – The 30-year fixed sits at 6.19% as markets reassess inflation and labor data (Zillow)

High construction costs (55%) and tariff-driven price increases (39%) slow affordable housing pipelines – TD Bank finds only 29% of developers plan to expand in 2026 despite steady industry optimism (IREI)

Multifamily REITs say the apartment market is nearing a turning point – A shrinking construction pipeline is easing supply pressure even as Sun Belt metros continue to struggle with concessions and slow rent growth (CoStar)

This broadly aligns with RealPage’s forecast as multifamily has faced elevated supply in the last few months while deliveries are set to taper in 2026 and 2027

Apartment investment surged in Q3 with $43.8B in volume up 21% from Q2 – RealPage says only 1,680 properties traded as high-profile single-asset deals dominated and cap rates reached an eight-year high at 5.63% (GlobeSt)

U.S. student housing pre-leasing slows sharply – Only 3.3% of beds were leased for Fall 2026 by October, marking the weakest start to a pre-lease season in more than a decade (RealPage

Toyota opens its $13.9B North Carolina battery plant – The company plans another $10B in U.S. manufacturing over five years as it ramps hybrid production and prepares a future three-row EV (Reuters)

53% of shoppers now prioritize efficiency over experience – JLL says consumers want quick, intuitive store visits, driving retailers to scale back tech and emphasize tactile, sensory design (JLL)

Framebridge, Best Buy, and ALDI gain momentum before the holidays – Framebridge’s custom-framing stores post +108.8% YoY foot-traffic growth, Best Buy steadies visits with stronger online-to-store integration, and ALDI expands its grocery share as value demand accelerates (Placer.ai)

Anthropic commits $50B to US data centers – The AI firm plans sites in Texas and New York with gigawatt-scale power and 800 permanent jobs as it shifts from cloud partners to its own large-scale infrastructure buildout (Bloomberg)

Meta invests $1B in Wisconsin data center – The company will build a 700,000-square-foot facility in Beaver Dam and underwrite $200M in grid upgrades as it front-loads capacity for its AI infrastructure push (Bloomberg)

OpenAI’s compute spend may far exceed prior estimates – New data suggests OpenAI spent nearly $5B on inference in H1 2025 as Azure costs outpace revenue growth, raising questions about the sustainability of general-purpose LLM business models (FT)

Insight: Although this isn’t directly tied to data center investment, I thought this piece was interesting. FT argues that OpenAI may be hiding the true cost of operating its models, specifically the cost of processing user queries in ChatGPT, and that Microsoft benefits because OpenAI pays Azure for that compute while Microsoft also funds OpenAI’s operations. The article explains that this creates a circular setup where Microsoft’s investment helps OpenAI run its models and then returns to Microsoft as Azure revenue, which lets the company report stronger growth. Worrying.

J.P. Morgan provides a $100M acquisition loan for the 205 East 42nd Street office building in New York, NY – David Werner Real Estate Investments and 601W Companies will acquire the 21-story Midtown East property for $165M using the financing (CommercialObserver)

JPMorgan Chase and Santa Clara County provide $82M construction financing for a 99-unit affordable housing project in San Jose, CA – Resources for Community Development plans to use $53.3M from JPMorgan and $28.9M from the county to fund the development (TheRealDeal)

Barings provides an $81M acquisition loan for the 440 South Church office tower in Charlotte, NC – Town Lane and Trinity Capital Advisors will buy the 15-story, 388,657-square-foot Class A building for $75.8M and plan more than $20M in renovations (CommercialObserver)

JPMorgan Chase and Sumitomo Mitsui provide $190M refinancing for the Anagram Columbus Circle luxury apartment tower in New York, NY – Global Holdings secures the loan for the 26-story, 123-unit building at 1 West 60th Street (TheRealDeal)

Morgan Stanley and GSA buy $1B student-housing portfolio – The deal adds eight properties with 6,200 beds near schools like UVA, Penn State, and other major campuses as enrollment growth drives investor demand (Bloomberg)

Blackstone nears a $130M acquisition of the 277-room Four Seasons hotel in San Francisco, CA – The firm plans to bet on a luxury-hospitality rebound as the city’s recovery gains traction (WSJ)

Insight: Luxury hotels have continued to outperform with steady YoY revenue gains (the WSJ wrote about this recently), and San Francisco’s Four Seasons is positioned to capture rising corporate travel, events, and high-end demand tied to the city’s AI boom.

Jackson Square Properties sells 270-unit Cascade Ridge multifamily in Silverdale, WA for $79.5M – An undisclosed buyer picked up the 1992-built garden-style community with value-add upside in a supply-constrained market (ConnectCRE)

American South Capital Partners secures $60M first close for its third affordable housing fund – The JV between SDS Capital and Vintage Realty is targetting $500M to expand mission-driven multifamily investments (IREI)

CMBS special servicing hits 10.84% in October – Mixed-use jumps to 13.40% and office reaches a record 17.30% as nearly $1B of loans move into special servicing (Trepp) 

Lenders take control of the San Francisco Centre mall in San Francisco, CA for $133M – Deutsche Bank, JPMorgan Chase and CMBS stakeholders assume ownership of the 1.2M-sf property after a 95% vacancy collapse and prepare to bring it to market early next year (TheRealDeal)