Hello Brick Brief readers, 

Happy Monday. I will be traveling this week, so posts may be irregular over the next week or so.

In recent news, we’re seeing surging oil prices cloud the Fed outlook, real estate industry groups opposing the housing bill’s build-to-rent sale mandate, Oracle and OpenAI scrapping their Stargate AI data center expansion, and real estate manager M&A reaching a multi-year high.

🔥 Inflation Risk Returns

Oil above $100 and a surprise loss of 92,000 jobs in February are complicating the outlook for Fed rate cuts, as rising energy costs risk pushing inflation higher even as the labor market weakens, with unemployment rising to 4.4% and Brent crude jumping above $100 per barrel. Recent Fed rhetoric reflects that uncertainty, as some officials warn persistent inflation or higher energy prices could require tighter policy, while others say the oil shock will likely prove temporary and not materially change the path of inflation.

Other key news today includes:

Oil surges above $100 per barrel as Iran conflict escalates – Brent jumped to ~$111 intraday and is trading above $109 amid fears of major supply disruption (Bloomberg)

The effect of oil above $100 per barrel for more than the short term is not to be underestimated, as higher energy costs filter through transportation, logistics, and production and raise prices across a wide basket of goods and services. Beyond that, rising gasoline prices directly shape consumer inflation expectations, meaning a prolonged Iran conflict could push expected inflation meaningfully higher and ultimately force the Fed to raise rates.

US economy lost 92,000 jobs in February as unemployment rose to 4.4% – Broad declines across construction, manufacturing, and hospitality signal weakening labor market and raise pressure on Fed rate policy (WSJ)

Oil surge pushes Fed rate cut expectations to September – Rising energy prices are raising fears of renewed inflation, as bond traders await February CPI data and reassess the outlook for Treasury yields (Bloomberg)

CPI and PCE inflation readings expected to diverge ahead of Iran conflict – Economists forecast softer February CPI but still-elevated core PCE as surging oil prices threaten to push inflation higher in coming months (Bloomberg)

Fed’s Hammack warns rate hikes possible if inflation stalls – Rising oil prices and persistent inflation pressures could force the Fed to keep rates higher for longer or tighten policy again (Reuters)

Fed’s Collins signals interest rates likely to stay on hold for now – Policymakers want clearer evidence inflation is moving toward the 2% target as geopolitical tensions and higher energy prices add uncertainty (Reuters)

Fed’s Schmid says hiring slowing as firms reassess jobs in AI era – Businesses are pausing recruitment to evaluate future skill needs as aging demographics reshape the labor market (Reuters)

Fed’s Daly says labor market weakening but rate risks remain two sided – Policymakers may hold rates steady as weaker hiring competes with inflation risks from higher oil prices (Reuters)

Fed’s Waller says oil price shock unlikely to drive persistent inflation – Policymakers expect the recent surge in gasoline prices from the Iran conflict to be temporary and not require a shift in monetary policy (Reuters)

AI fears trigger repricing across $2T private credit market – CRE-backed loans tied to assets like data centers and apartments seen as more stable than corporate software lending (Bisnow)

Real estate and infrastructure manager M&A reaches multi-year high in 2025 – 45 transactions completed, up 15% YoY as deal activity rebounded in the second half of the year (IREI)

Washington advances bill requiring cities to allow housing in commercial zones – The legislation targets underused retail sites like strip malls and big-box stores to boost housing supply (Realtor.com)

Mortgage Bankers Association, National Apartment Association, and Real Estate Roundtable oppose build-to-rent sale mandate in housing bill – Industry groups warn requirement to sell BTR homes within seven years could deter development and reduce rental housing supply (Bisnow)

Housing demand rises as mortgage purchase applications climb 10% YoY and pending sales post three straight weeks of growth – Inventory slipped to 686,879 listings while mortgage rates held near 6.14% despite oil price volatility (HousingWire)

U.S. housing inventory rises YoY for 28th straight month but growth slows – Supply recovery has flattened for nine consecutive months as new listings momentum fades (NationalMortgageNews)

Mortgage rates rebound above 6% as oil prices lift inflation expectations – Higher energy costs, strong consumer spending, and resilient labor markets are limiting downward pressure on borrowing costs (Homes.com)

Fix-and-flip investor confidence rebounds as Burns + Kiavi Index rises to 62 in Q4 – Lower mortgage rates, improving capital access and stabilizing home prices are boosting flipper sentiment (NationalMortgageProfessional)

TruAmerica plans ~$2B push into workforce housing acquisitions – Investor targeting older Class B apartments for middle-income renters as high home prices and limited supply boost demand (CoStar)

Blackstone sees warehouse demand accelerating as US reindustrializes – Firm expects reshoring, infrastructure buildout, and AI data center growth to drive stronger industrial real estate demand (CoStar)

Retail CMBS delinquencies fall to 6.2% in February from 7.1% in 2022 – Mall loans remain most distressed, while necessity-based retail centers show the strongest performance (Trepp)

Ollie’s and Five Below sustain YoY traffic growth despite cautious consumer spending – Rising repeat visits and strong value positioning continue to drive demand for treasure-hunt discount retail (Placerai)

Oracle and OpenAI scrap expansion of Stargate AI data center in Abilene, TX – Meta is in talks to lease the planned expansion site from Crusoe as AI infrastructure demand drives multibillion-dollar data center development (Bloomberg)

AI data center boom fuels “man camp” workforce housing in rural markets – Developers are building temporary housing villages with amenities for thousands of construction workers near remote AI data center projects lacking local lodging (Bloomberg)

Atlanta leads U.S. in data center construction with 3,968 MW underway in 2025 – Growth is beginning to slow as power constraints, supply chain pressures and community opposition limit further expansion despite AI demand (TheRealDeal)

Denver developers warn renewable energy transition outpacing grid capacity – Power shortages and coal plant retirements are complicating development timelines as demand rises from housing, manufacturing, and data centers (Bisnow)

US hotel RevPAR falls 0.2% in week ending Feb. 28 – Declines in Las Vegas, New Orleans, and Denver dragged performance despite February remaining the strongest month since January 2023 (CoStar)

Midtier hotel supply expanding as secondary markets outperform top 25 cities – Value-oriented travel demand remains resilient even as new supply pressures occupancy in major urban markets (CoStar)

HUD multifamily and healthcare lending jumps to $15.76B in fiscal 2025 – Healthcare property lending surged 89% to a record $5.96B as investors refinance and reposition senior housing assets (Trepp)

Saks Global to close 15 more department stores amid bankruptcy restructuring – Luxury retailer will shut 12 Saks Fifth Avenue and three Neiman Marcus locations as it cuts losses and focuses on more profitable stores (Reuters)

Proptech venture funding surpasses $1B in February – Investors are shifting toward fewer but larger deals as venture capital becomes more selective (Inman)