The Brick Breakdown

Hello Brick Brief readers, 

Thank you for your continued support! In recent news, we're seeing a jump in June consumer sentiment, steady apartment occupancy, and continued strength in top-tier offices.

🧠 Sentiment Up, Warnings Loom

Consumer confidence jumped 16% in June as tariff fears eased, but Jamie Dimon warns the U.S. economy may still face trouble ahead. Slowing stimulus, rising credit risk, and ongoing trade tensions could threaten hopes for a soft landing.

🏢 Apartments Hold Steady Amid Shifts

Class A apartment occupancy reached 95.7% in May, its highest since June 2022, as buyers delay purchases and rent top-tier units instead. Yet immigration-driven demand is softening in key markets like South Florida and Dallas, posing risks to long-term absorption.

🏙️ Office Market Finds Its Footing

Top-tier office buildings are stabilizing as sublease space tightens and employers seek quality over quantity. Commute times and evolving workplace needs are now key factors reshaping office design and leasing.

This Week in Real Estate: Key Events & Data

Quick Markets

30Y Mortgage: 6.89% (+4 bps)

10Y Treasury Yield: 4.42% (+7 bps)

WSJ Prime Rate: 7.50%

FTSE NAREIT Index: 768.55 (-1.02%) 

30-day SOFR Average: 4.30%

Market Pulse

Consumer sentiment jumped 16% in June as tariff fears eased, but Jamie Dimon warned the economy may weaken amid fading stimulus and rising credit risks

Consumer sentiment rebounds in June – Index jumps 16% from May as tariff fears ease, but sentiment remains 20% below December post-election levels (UMichSCA)

Dimon warns U.S. economy may weaken – JPMorgan CEO flags slowing stimulus effects, tariff fallout, and private credit risks as headwinds to soft landing (CNBC)

Policy & Industry Shifts

New York bans rent-setting software – State legislature passes first-in-nation law restricting algorithmic pricing tools like RealPage to curb rent collusion (TheRealDeal)

Residential

The housing market remains imbalanced as listings outpace buyers, home equity dips slightly, and built-for-rent demand surges amid affordability pressures

Housing market imbalance grows – April saw 500K more sellers than buyers as listings rose but high prices and rates kept demand subdued (WSJ)

Home equity slips in Q1 but remains strong – Total homeowner equity fell to $34.5T as property values dipped, though equity still accounts for 72% of real estate value (Realtor.com)

BFR demand surges amid affordability crisis – Millennials and mature renters drive demand for built-for-rent homes, seeking space and flexibility as institutional investors chase stable returns (GlobeSt)

Multifamily

Class A apartment occupancy hit 95.7% in May as affordability pressures fuel rental demand, though slowing immigration could soften growth in key markets

Class A occupancy nears top spot – Stabilized Class A apartments reached 95.7% in May, the highest since June 2022, as affordability pressures delay home purchases and boost high-end rental demand (RealPage)

Immigration drove 80% of population growth since 2020 – But a slowdown now threatens apartment demand in South Florida, DFW, LA, and Orange County (CoStar)

Multifamily absorption holds steady – Renter demand is expected to match pre-pandemic levels through 2027, underscoring sector stability (CushmanWakefield)

Office

Top-tier offices are stabilizing as sublease space tightens and leasing rebounds, though long commutes and shifting design needs remain barriers to a full return

Office shows early signs of recovery – Sublease space is tightening as flight-to-quality leasing helps stabilize top-tier buildings (CushmanWakefield)

Commute time now key barrier to office return – Despite a national average of 26.8 minutes, long travel remains the top factor deterring workers from in-person work (GlobeSt)

Office design shifts to group dynamics – NeoCon 2025 highlights new modular, rounded furnishings aimed at social interaction and wellness as office leasing nears pre-COVID levels (CoStar)

Leasing

American Dental Education Association signs 30K-sf lease in D.C. – Dental education group relocates HQ to 95% leased District Center, owned by MetLife and Norges Bank (CommercialObserver)

Industrial

Industrial demand remains soft as tariffs curb trade with China, though long-term trends like reshoring and strong U.S.-Mexico trade offer support

Industrial demand to stay soft – Trade policy shifts weigh on 2025 activity, though e-commerce and reshoring trends support long-term resilience (CushmanWakefield)

Port of LA imports fall 9% YoY in May – Shippers slash China orders amid 145% tariffs, with muted rebound expected despite drop to 30% duties (Reuters)

US-Mexico trade hits $69.7B in April – Mexico remains top U.S. trading partner for 16th straight month despite 4% YoY decline in total volume (FreightWaves)

Leasing

NYC DOT signs 212K-sf industrial lease in Queens – City agency to use HUB LIC site for vehicle storage and offices; MRA and Nuveen own the 343K-sf property (CommercialObserver)

Market Mix

Retail

Retail faces tariff-driven cost pressures, but strong consumer demand and rapid Sunbelt leasing continue to support the sector ahead of back-to-school season

Retail faces tariff headwinds – Rising costs may weaken tenant demand, but low construction and strong consumers limit downside (CushmanWakefield)

Retail space vanishes fast in Sunbelt – Available space leases in under six months on average, with markets like Tampa seeing brisk absorption despite rising store closures (CoStar)

Retail traffic edges up ahead of back-to-school season – Western states lead growth while off-price, thrift, and home goods stores emerge as surprise winners for 2025 (Placer.ai)

Tariffs drive real-time retail price spikes – Harvard-led study links April hikes to sharper costs on imported goods, with some domestic prices rising in response (GlobeSt)

Hospitality

Hotel demand softens in early June – Weekday RevPAR drops 4.6% while weekends hold steady, with TSA data signaling slower summer travel (CoStar)

Financings

Refinancings

Invesco lends $355M to Bridge for 24-asset industrial refi – Loan covers 2.45M sf portfolio across six states, supporting Bridge’s logistics strategy in top U.S. markets (CommercialObserver)

EDEN Living secures $114M refi for Florida BTRs – JLL arranged refinancing for 373-unit West Melbourne and 265-unit Jacksonville communities, both built in 2024 and still in lease-up (MultiHousingNews)

Canyon Partners funds $79M refi in SoCal – Raintree secures loans for 132-unit SaltAire in Torrance and 160-unit Artisan Oaks in Santa Clarita (CommercialObserver)

Atlantic Housing scores $55M refi for mulitfamilies in North Texas – Greystone funds HUD-insured loans for 622 affordable units in Fort Worth and McKinney as federal rental aid faces cuts (TheRealDeal)

M&A

Building & Portfolio M&A

Sekisui House REIT buys D.C.'s City Ridge for $300M – Tokyo-based REIT acquires final 340-unit piece from Roadside and NASH, completing its full ownership of the 1.8M sf mixed-use campus (CommercialObserver)

Kennedy Wilson buys 265-unit Seattle, WA tower for $173M – JV with Kenedix and Hulic acquires The Danforth, with Whole Foods as ground-floor tenant (ConnectCRE)

Chicago suburb office complex hits market – Equus relists 87%-leased Mid America Plaza near Oakbrook Center, last purchased for $78M in 2016, aiming to test demand for stabilized assets (CoStar)

Institutional Fundraising

Vertically integrated real estate firm Eagle Rock targets $500M for new multifamily fund – Firm launches sixth and largest fund with $315M first close focused on value-add deals in the Northeast and Mid-Atlantic (IREI)

Distress Watch

Real Capital Solutions buys Tysons, VA office portfolio for $57M – Two-building, 374K-sf campus acquired via receivership sale; assets 75% leased near The Boro in the D.C. metro (ConnectCRE)

Proptech & Innovation

Proptech sees rebound as PE backs major deals – Investments from Blackstone, Thoma Bravo, and EQT drive optimism in property tech despite tariff and macro uncertainty (GlobeSt)

Marc Andreessen doubles down on Adam Neumann’s Flow – a16z touts Flow’s rental model and brand strength as it expands in Miami and eyes global condo and retail growth (Bisnow & a16z)