Hello Brick Brief readers, 

Good morning. Today we’re seeing private equity M&A activity in retail, rising institutional demand for net lease, and a strong Q2 from senior housing REIT Welltower thanks to America’s aging population. 

🍩 Private Equity Doubles Down on Retail
Levine Leichtman Capital bought Shipley Do-Nuts for $400M, targeting scalable food service with 375 locations across 14 states. Meanwhile, Onyx Partners agreed to acquire 119 JCPenney stores for $947M in a de facto triple net sale-leaseback, securing long-term cash flow from master-leased retail sites.

🏬 Net Lease Demand Accelerates
Net lease sales rose 37% YoY to $46.7B as investors chased stable yields amid new tax breaks and policy clarity. Private equity firms like Onyx, Starwood, and BlackRock are fueling the surge by locking in long-duration leases with minimal landlord risk.

🏡 Senior Housing Rides Demographic Wave
Welltower (+27% YTD) beat Q2 estimates and raised its full-year FFO guidance on steady demand for assisted living and senior housing. With 10,000 Americans turning 65 every day, the REIT is well-positioned to benefit from long-term demographic pressure on care-driven housing.

30Y Mortgage: 6.81% 

10Y Treasury Yield: 4.41% 

WSJ Prime Rate: 7.50%

FTSE NAREIT Index: 767.51 (-1.79%) 

30-day SOFR Average: 4.35%

Fed expected to keep rates steady at 4.25%-4.50% this week as officials weigh strong consumer spending against weak housing and construction – Ongoing tariffs and mixed data have sparked internal dissent, with some governors pushing for a cut while most worry inflation could rebound (Reuters)

Trump will set a global baseline tariff of 15–20% for countries without U.S. trade deals – New rate takes effect August 1 (CNBC)

In a recent interview, BlackRock’s Rick Rieder argues that although services are holding up the U.S. economy, the housing sector is under real pressure. He sees a case for rate cuts based on the following:

Insight: If inflation doesn’t pick up by September, the Fed will most likely cut rates.

PE firm Onyx Partners agreed to purchase 119 JCPenney stores for $947M cash, acquiring a national retail portfolio that spans 35 states and spans ~16 million square feet.

• The portfolio consists of 119 properties averaging 133,000 square feet, all triple-net master leased to Penney Intermediate Holdings
• The deal is scheduled to close by September 8 and was arranged through Copper Property CTL Pass Through Trust, created during JCPenney’s 2020 bankruptcy
• Onyx is effectively stepping into a sale-leaseback structure, acquiring the fee simple real estate with long-term leases already in place
• Triple-net leases limit landlord obligations, which provides Onyx with stable cash flow while shifting operating responsibilities to the tenant
• Nearly all locations are operational stores, many situated in high-traffic corridors or mall-adjacent parcels that offer potential long-term redevelopment value
• The trust evaluated multiple bids before selecting Onyx based on price, execution certainty, and access to financing

 • However, if JCPenney were to file for bankruptcy again and decided to liquidate, Onyx would lose its sole tenant across the portfolio, exposing the firm to widespread vacancy risk and uncertain backfill value

Takeaway: Onyx is deploying nearly $1 billion into a stabilized, income-producing retail portfolio through what is effectively a sale-leaseback structure. The strategy combines yield from long-term triple-net leases with future optionality tied to the land and locations that is a hallmark of private equity real estate plays.

Massachusetts pays towns to zone for small, dense homes – New 40Y law targets affordability and missing middle supply (Bisnow)

With individual buyers sidelined by high rates and prices, small investors are stepping in, while overall market activity remains muted due to low affordability and rising uncertainty

US housing market posts weakest spring in 13 years – Buyer uncertainty, record-low affordability, and Trump tariffs stall sales, while prices hold firm as sellers pull listings (Bloomberg)

Investors make up 30% of single-family home buys in 2025 – Small buyers dominate as individuals sit out and builders offer steep discounts (WSJ)

Insight: Small investors can analyze each deal on a case-by-case basis, which allows them to  moving quickly with cash and capitalize on builder discounts in oversupplied markets like Texas and Florida. On the other hand, Amherst and Invitation Homes are slowing down as high rates and return hurdles make it harder to scale new acquisitions profitably. 

Verizon leases 195K SF at Vornado’s Penn 2 tower in Manhattan – Relocates NYC headquarters for 1,000 employees as $750M redevelopment draws top tenants (Bloomberg)

SystImmune signs 87K SF full-building lease at Alexandria’s Canyon Pointe in Bothell, WA – Biotech expands Seattle-area HQ, backfilling space vacated by T-Mobile (CoStar)

Fisher Phillips inks new leases for 36K SF in downtown LA and 13.6K SF in Woodland Hills – Law firm’s moves reflect continued flight to quality in the Los Angeles office market (GlobeSt)

Industrial deal activity is stalling as vacancies rise and buyers grow cautious, but select Northeast markets are seeing renewed construction momentum as developers bet on long-term demand

Japan to invest $550B in a Trump-directed fund boosting U.S. industry – Vehicle backs manufacturing and infrastructure as part of trade deal that cuts auto tariffs (Bisnow)

Warehouse deal volume flat at $22.9B in Q2 as vacancy tops 7% for first time since 2014 – Rising supply, policy uncertainty, and slower leasing stall activity (GlobeSt)

Northeast industrial pipeline rises 6.1% QoQ to 25.9M SF in Q2 – Construction starts and active Philly/PA corridor building surge as deliveries slow, aiding vacancy absorption (CBRE)

Dedeaux Properties secures logistics tenant for new 165K SF Fontana, CA Inland Empire warehouse – 7.4-acre lease valued at $11M as regional industrial leasing slows (TheRealDeal)

NCREIF Property Index up 1.23% in Q2, marking fourth straight positive quarter – Seniors housing leads, while office and hotel returns lag (ConnectCRE)

Insight: Yesterday, I added a CoStar article citing broad Q2 price declines across multifamily, retail, and office sectors, while the NCREIF Property Index shows a positive 1.23% return for Q2. How can this be? The difference lies in methodology: CoStar tracks actual repeat-sale transactions, while NCREIF reflects slower-moving appraisals of core institutional assets. CoStar captures real-time market repricing, while NCREIF measures stabilized income-driven portfolios that may lag real-time estimates

Net lease sales jump 37% YoY to $46.7B as investors chase stable cash flow – BlackRock and Starwood drive $10B in deals, fueled by new tax breaks and policy certainty (Bisnow)

Insight: Recent net-lease transaction activity as well as Starwood’s July 16 acquisition of Fundamental Income for $2.2B from Brookfield demonstrates a concentrated push into net lease. Both Starwood and BlackRock are pivoting into net lease to deploy capital quickly and lock in stable cash flow, as tax incentives and policy clarity make these bond-like assets more attractive in an uncertain macro environment.

Kohl’s Q1 and Q2 visit declines narrow YoY, hinting at possible turnaround – Meme stock buzz grows as sales slide slows but volatility persists (Placer.ai)

CVS Q2 visits rise 2.2% YoY and visits per location jump 5% – Rightsizing and pharmacy-first strategy drive growth despite front-store softness (Placer.ai)

Welltower beat Q2 estimates and raised its annual FFO guidance thanks to steady demand for its assisted living and senior housing properties (Reuters)

Mesa West lends $55M to Seaview Investors for LA metro Burton House Beverly Hills hotel refi – 186-room Marriott reopened in 2024 after $14M renovation (CommercialObserver)

Dwight Capital closes $50M refi for Santa Maria, CA metro Elements Apartments – Vernon Group’s 167-unit complex completed in 2023 earns green certification (CommercialObserver)

Brookfield lands $462.3M refinancing from Cale Street Partners for Manhattan luxury retail condo – Property houses top brands including Bulgari and Chanel (CoStar)

Affinius Capital provides $340M loan to Sky Equity Group’s 603-unit NYC multifamily project – Financing completes construction and stabilizes mixed-use development (ConnectCRE) 

Kennedy Wilson issues $183M loan for 480-unit South San Francisco, CA multifamily – R&V Management developing Alexan Icon near Oyster Point (CommercialObserver)

MacArthur Holdings JV secures $123M for NYC multifamily project on Gowanus Canal – 158-unit development will include 40 affordable apartments and 22K SF of retail (GlobeSt)

Union Pacific Railroad nears $72B stock-and-cash deal to acquire Norfolk Southern for $320 a share– Merger would be the largest in rail history and combine Western and East Coast networks (Bloomberg)

PE firm Levine Leichtman Capital Partners acquires donut chain Shipley Do-Nuts from Peak Rock Capital in $400M deal – Shipley operates 375 locations in 14 states, with future expansion planned (Bloomberg)

PE firm Onyx Partners agreed to buy 119 JCPenney stores for $947M – Portfolio spans 35 states, with properties master leased to Penney Intermediate Holdings (Bisnow)

Tom Steyer’s Galvanize Real Estate buys five Maryland industrial properties from Blackstone’s Link Logistics for $112M – Portfolio totals 683,000 SF and will be upgraded for decarbonization (CommercialObserver)

BGO buys Seattle, WA industrial property for $176M from Panattoni and Crow Holdings – Deal is one of Puget Sound’s largest industrial trades in 2025 (CoStar)

Crow Holdings buys 376-unit Davie, South Florida apartment complex from Clarion Partners for $98M – 33 West spans 14 buildings, reflecting a pickup in regional multifamily sales (TheRealDeal)

Lakeside Group buys 243-unit apartment tower in Oakland, CA for $97.5M – Deal signals stabilization in East Bay multifamily market (CoStar)

Redco will acquire Wells Fargo’s 409K SF San Francisco HQ at 420 Montgomery – Deal tops $54M failed bid from Forge, with Redco planning continued office use as Wells relocates (TheRealDeal)

Generational Housing Partners buys Dallas, TX site for $70M to build affordable apartments – Project aims to address workforce housing shortage (CoStar)

$1B Kalkan Capital multifamily portfolio faces $125M loan default – Over 3,000 Houston apartments set for auction as eight Class-C properties head to foreclosure (Bisnow)