Hello Brick Brief readers, 

Happy Friday. Today we’re seeing rate cuts support CRE valuations, buyers gain leverage in housing, and office construction fall to a GFC low.

🏦 Rates Support CRE Valuations
The Fed cut 25 bps and lowered borrowing costs, compressing CRE cap rates by 30–50 bps. Office and retail led the declines while investors prepared to direct capital into offices, data centers, and industrial assets.

🏡 Buyers Gain Leverage in Housing
Pending home sales fell 1% YoY in late September and 16.7% of sellers cut prices in August, the steepest share since 2019. Listings exceeded buyers by 500K, giving buyers leverage to negotiate as we noted earlier this week when the FHFA Index fell 0.1% MoM.

🏢 Office Construction Hits Historic Low
Developers pulled back on new projects as hybrid work normalization and weak demand weigh on confidence. They started just 40.2M SF of office projects nationwide, a level not seen since the financial crisis, with Boston at 5.6M SF and Manhattan at 3.4M SF, leaving future deliveries scarce over the next few years.

30Y Mortgage: 6.36% (-1 bps) 

10Y Treasury Yield: 4.09% (-1 bps) 

WSJ Prime Rate: 7.50%

FTSE NAREIT Index: 773.56 (-0.55%) 

30-day SOFR Average: 4.30%

Planned hiring at its lowest since 2009 confirms labor market cooling, positioning hiring weakness as the central factor for Fed policy decisions

Planned hiring falls to lowest level since 2009 – Employers also announced 54K job cuts in September, though that was down 37% from August, with total layoffs this year reaching 946K, the highest since 2020 (Challenger)

Fed’s Goolsbee says economy remains solid – Chicago Fed analysis points to steady labor market, with rates able to fall further if inflation keeps easing (Bloomberg)

Fed’s Logan urges caution on rate cuts – Dallas Fed president cites tariff-driven inflation risks and warns against easing too quickly despite gradual labor market cooling (Reuters)

16.7% of US home sellers cut prices in August – Listings outpaced buyers by 500K and homes sold at a 3.8% discount to asking, the steepest since 2019 (Redfin)

Pending home sales fall 1% YoY in late September – Rising rates and economic uncertainty weigh on buyers, though starter-home sales rose 4% and buyers hold bargaining power with 500K more sellers than buyers (Redfin)

FICO unveils direct-to-lender pricing model – Credit-scoring shakeup lets mortgage lenders bypass Experian, Equifax, and TransUnion, boosting affordability under Trump’s regulatory push (WSJ)

Insight: Lower credit score costs reduce mortgage origination fees, giving borrowers slightly cheaper upfront expenses while lenders gain flexibility, though the overall affordability impact is modest compared to mortgage rates and house prices.

Southeast dominates U.S. renter mobility – 38% of renters move within two years; Austin #1 at 54% with Charleston leading the surge in frequent movers (RentCafe)

U.S. office construction drops to GFC-era levels – Just 40.2M SF is underway nationwide, led by Boston with 5.6M SF and Manhattan with 3.4M SF of projects started in 2025 (TheRealDeal)

Insight: Developers have pulled back on office construction as hybrid work, AI adoption, and weak demand weigh on long-term confidence. However, the future is impossible to predict, and if something triggers a major demand shift in the coming years, today’s limited pipeline could create a tighter supply-demand balance.

Richemont signs 138K-SF office lease at 645 Fifth Avenue in New York, NY – Cartier parent expanded its North American HQ at Olympic Tower, co-owned by Crown Acquisitions and Oxford Properties (CommercialObserver)

Bilt signs 58K-SF office lease at 837 Washington Street in New York, NY – The housing payment and rewards platform will relocate its HQ to Nuveen’s Meatpacking District building in early 2026 (CommercialObserver)

Keller and Heckman signs 57K-SF office lease at 1100 New York Ave. NW in Washington, DC – The law firm will relocate in 2027 to Pimco and Manulife’s East End property, with Savills and JLL brokering the deal (ConnectCRE)

Workday signs 51K-SF office lease at 1818 Library Street in Reston, VA – The HR and finance platform expanded at BXP’s Reston Town Center by taking space vacated by Meta, tripling its Northern Virginia footprint (CommercialObserver)

California logistics weaken amid elevated tariffs – Large facilities face rising availability near 14% and rent declines while small-bay holds steadier; sublease rents run ~25% below direct, delaying recovery (GlobeSt)

Caterpillar shares hit record highs on AI power boom – Investors bet its Solar Turbines industrial gas turbines will supply electricity for data centers as AI drives massive energy demand (Bloomberg)

U.S. real estate remains the world’s most valuable asset – Global property value totals $393.3T in 2025, with the U.S. leading commercial real estate at 20.7% of global value despite higher rates and market cycles (ConnectCRE)

CRE cap rates compress 30–50 bps – Fed’s 25 bp cut lowers capital costs, with office and retail leading declines and industrial/multifamily moving modestly (CushmanWakefield)

Lower rates may spur more CRE deals – The Fed’s quarter-point cut and signals of further easing are boosting investor optimism, with dry powder likely to target offices, data centers, and industrial assets (IREI)

Greystar provides $126M loan for multifamily portfolio in Austin, TX and Atlanta, GA – Myers Apartment Group and Torchlight Investors refinanced nearly 800 units with JLL arranging the deal (CommercialObserver)

BXP and Delaware North secure $465M refinancing for Hub on Causeway in Boston, MA – Wells Fargo, Bank of America, and Morgan Stanley issued a 5.5-year interest-only mortgage covering the project’s office tower and retail podium (TheRealDeal)

Davidson Kempner secures $216M loan to refinance Westin Grand Central hotel in New York, NY – Bain Capital Special Solutions and Smith Hill Capital provided financing for the 774-key property at 212 East 42nd Street, with proceeds earmarked for upgrades (TheRealDeal)

Brookfield-backed colocation data center operator Centersquare acquires 10 facilities for $1B – Expands to 80 sites across North America and adds nearly 100 MW of capacity (Bisnow)

Data center operator Goodman Group acquires 47-acre site in San Jose, CA for $200M – LBA Realty sold the 350–370 West Trimble Road property, previously slated for mixed-use and data center development, as AI fuels Bay Area demand (TheRealDeal)

Weill Cornell acquires former Sotheby’s HQ in New York, NY for $510M – Sotheby’s sold the 1334 York Avenue property after 45 years of ownership, with the auction house relocating to the Breuer Building on Madison Avenue (CommercialObserver)

CenterCal Properties and DRA Advisors acquire 870K-SF Long Beach Towne Center mall in Long Beach, CA for $145M – Vestar sold the 26-year-old property, with plans for major upgrades to dining, retail, and community spaces (CommercialObserver)

Lincoln Property sells 1.25M-SF industrial center in Phoenix, AZ to Dollar Tree for $147M – The retailer acquired the Class A distribution facility within Lincoln’s Park303 logistics park for regional operations (IREI)

KBS sells multifamily community in Raleigh, NC to Fairfield Residential for $132M – The 286-unit Park Central Apartments includes luxury high-rise apartments with ground-floor retail in the North Hills district (IREI)

Agent optimism holds steady – 48% of agents expect client growth in the next 6–12 months, but 46% report no AI adoption and 52% see brokerages lagging on tech readiness (HousingWire)