Hello Brick Brief readers, 

ave a great Memorial Day weekend 🙂. Today we’re seeing stronger economic growth and jobs, real-time home prices turning negative YoY, and slowing industrial momentum.

📈 Growth Holds Despite Tariffs
U.S. GDP expanded 3.3% in Q2 after an upward revision from 3%, with consumer spending and AI investment offsetting trade volatility. Fed Governor Waller supports a September rate cut, but steady jobless claims at 191K suggest the economy is cooling gradually rather than collapsing.
🏠 Real-Time Home Index Turns Negative
Parcl Labs’ real-time index shows U.S. home prices slipped 0.4% YoY, masking sharp regional divergence as oversupply forces Sun Belt builders into price cuts. By contrast, constrained supply in the Northeast and Midwest is keeping prices elevated, highlighting a housing market bifurcated by region.
🏭 Industrial Momentum Slows
Industrial absorption dropped 11.3M SF in Q2, the first decline since 2010, as tariffs and high rates weighed on demand. Manufacturing site visits also fell 4.2% YoY, with firms leaning on inventories while reassessing supply chains.

30Y Mortgage: 6.50% (-1 bps) 

10Y Treasury Yield: 4.21% (-2 bps)

WSJ Prime Rate: 7.50%

FTSE NAREIT Index: 774.42 (-0.30%) 

30-day SOFR Average: 4.36%

Stronger GDP and steady jobless claims show the economy is cooling but resilient, giving the Fed breathing room to consider cuts while closely watching inflation

U.S. GDP grew 3.3% in Q2 2025 – Upward revision from 3% reflects stronger consumer spending and AI-driven investment, offsetting tariff-related trade swings (WSJ)

Fed Governor Christopher Waller backs a 25 bps cut in September – He expects additional cuts over the next 3–6 months as the labor market weakens and inflation holds near 2% (Reuters)

US jobless claims hold steady at 191K – Layoffs remain muted, matching levels from the same August week in 2024 and 2023, though weak hiring fuels slowdown concerns (WSJ)

 Parcl Labs’ latest Motivated Seller Index update shows the U.S. housing market splitting further, with Southern metros under mounting pressure while the Northeast holds firm.

• Southern sellers are 20–30% more motivated than their Northeast counterparts, with listings sitting longer and posting deeper price cuts. Tampa leads the top 50 metros with 74 days on market and –4.0% cuts, followed closely by Jacksonville, Austin, and Phoenix
• Builders are cracking in the new-construction segment. Parcl reports homes built since 2020 carry the highest seller motivation, with incentives no longer enough to move inventory and outright price cuts now driving transactions
• Austin and other Texas and Florida metros remain the epicenter of new-build distress, where oversupply and sluggish absorption have kept pressure elevated for more than a year
• This aligns with our August 26 Brick Brief on housing affordability, where July’s new-home sales showed that even builder buydowns cannot shield prices forever. Sales fell 8.2% YoY and median prices dropped 5.9%, confirming that downward price discovery is underway as affordability pressures and weaker job growth weigh on buyers
• By contrast, the Northeast and Midwest continue to hold pricing power because supply is constrained. Hartford and Providence are among the least motivated markets, clearing homes quickly with minimal concessions, which has kept prices higher

Takeaway: Regional bifurcation defines today’s housing market. Oversupply in Sun Belt metros like Austin, Tampa, and Phoenix is forcing builders into price cuts, while supply constraints in the Northeast and Midwest are keeping prices elevated. Investors face pressure-driven opportunities in overbuilt southern markets and stability in supply-tight northern metros.

HUD threatened to pull funding from housing authorities – The agency gave 30 days to report tenants’ immigration status, escalating Trump’s crackdown on undocumented residents in public housing (Bisnow)

Falling home prices, higher seller motivation in the South, and mixed pending sales point to a housing market increasingly split by region and sensitive to shifting mortgage rates.

U.S. home prices turned negative YoY (-0.4%) in Parcl’s real-time index – The flat national average masks sharp regional, market, and segment-level divergence (ParclLabs)

Mortgage rates edge down to 6.56% – 30-year loans hit a 10-month low, but buyers and sellers remain sidelined as pending sales drop and listings decline (Bloomberg)

Pending home sales rose 2% MoM  in late August – Mortgage rates fell to a 10-month low of 6.58%, easing monthly payments and pulling some buyers back into the market (Redfin)

Pending home sales fell 0.4% MoM in July – The West rose 3.7% while other regions slipped, leaving the market “stuck” despite improving inventory and cooler prices (Homes.com)

Seller motivation runs 20–30% higher in the South than the Northeast – Tampa leads major metros with homes sitting 74 days on market and cutting prices by 4%, with Austin, Jacksonville, and Phoenix showing similar pressure (ParclLabs)

The U.S. will complete over 500K apartments in 2025 – NYC leads with 30K units while Southern metros like Dallas, Austin, Phoenix, and Miami drive more than half of national deliveries (CommercialObserver)

Office occupancy averaged 52.3% last week, flat WoW – NYC fell 4.5 pts to 46.6%, its lowest since January, while Austin rose to 80.4% and Dallas to 60.3% (KastleSystems)

67% of San Francisco office buildings have sold at discounts over the past two years – Vacancy sits at 35%, the nation’s highest, with average pricing down to $200/SF despite rising AI leasing demand (TheRealDeal)

KPMG leases 70K SF at U.S. Bank Tower in Los Angeles, CA from Silverstein Properties – The firm also signs a 50K SF lease at Plaza at Continental Park in El Segundo, relocating from its Hope Street offices (TheRealDeal)

Industrial demand posted its first decline since 2010 as tariffs and high rates slowed absorption, while manufacturing activity held steady but site visits signaled weaker momentum ahead

Industrial absorption totaled 27M SF in 1H 2025 – Demand fell 11.3M SF in Q2, the first quarterly decline since 2010, as tariffs and high rates slowed activity (ConnectCRE)

Central U.S. manufacturing held steady in August – Kansas City Fed’s index stayed at 1.0, signaling modest expansion, while rising input and output prices highlight inflation pressures ahead of a possible September rate cut (WSJ) 

Manufacturing site visits fell 4.2% YoY in mid-August – After tariffs took effect, activity slowed as firms relied on stockpiled inventory and reassessed supply chains (Placer.ai)

Philip Morris International leases 150K SF at Opus Development’s Sun Empire industrial park in Aurora, CO – The site sits near its $600M manufacturing project opening later this year (CoStar)

Tariffs doubled costs on steel, aluminum, and copper in 2025 – CRE developers face 5–12% higher building expenses, delayed starts, and rising investor uncertainty as projects stall and margins tighten (Trepp)

U.S. hotel RevPAR fell 1.3% in late August – The third straight weekly drop and 10th in 12 weeks, driven by Chicago and Houston comps, with Luxury the only class growing (STR)

Invesco Real Estate provides $390M acquisition loan in Houston, TX – Sixth Street Partners and Madera Residential use the financing to buy six Class A multifamily properties totaling 1,967 units (CommercialObserver)

First Citizens provides $66M construction loan to ZD Jasper Realty for a 175-unit multifamily tower in Woodside, Queens, NY – 14-story project with retail and amenities slated for 2028 completion (CommercialObserver)

Canyon Partners provides $58M refinancing for Arya Apartments in Culver City, CA – The 119-unit luxury complex opened in 2024 with amenities including a rooftop pool, coworking, and retail (CommercialObserver)

Mesirow acquires a fully leased 250K SF office complex in King of Prussia, PA for just under $68M – Seller M&H Properties bought it for $63.5M in 2015 (Bisnow)

Solomon Organization buys Fifteen 98 Naperville in Naperville, IL from FPA Multifamily for $136M – 640-unit complex built in 1984 trades for $212K per unit, financed with a $91M Berkadia loan (TheRealDeal)

Lighthouse Group buys Fusion Encore Hollywood in Los Angeles, CA from New York Life Real Estate Investors for $74M – 218-unit complex trades at $339K per unit, financed with a $52M KeyBank loan (TheRealDeal)

Braemar Hotels & Resorts REIT lines up $115M sale of The Clancy hotel in San Francisco, CA – 410-room Marriott Autograph property trades at $281K per key as REIT pursues full 14-asset portfolio sale (The Real Deal)

Insight: Braemar’s $115M sale of The Clancy in San Francisco comes a day after the REIT announced plans to sell the entire company, which trades at a $151M market cap against its 14-asset luxury portfolio. The Clancy deal at $281K per key shows luxury hotels continue to attract strong bids, consistent with STR data that luxury is the only segment still posting RevPAR growth while the broader hotel industry weakens.

Domain Companies and LMXD buy 76% of a Greenpoint development site in Brooklyn, NY from Park Tower Group for $122M – Plans include three towers with 1,000+ units, 300 affordable, plus 20K SF retail and a park (CommercialObserver)

Hammes Partners closed $445M for its core-plus healthcare real estate platform – Exceeding its $350M target with backing from institutional investors (IREI)

Montana Board of Investments committed $215M to real estate – $115M went to Sterling United Properties Fund I, a closed-end Core retail strategy in the U.S (IREI)

One in three CMBS loans failed to pay off on time through April 2025 – Office and retail drove the bulk of maturities in distress, while industrial and self-storage topped 95% payoff rates (GlobeSt)

CIRE Equity takes control of an office building in Miami, FL from R&B Realty after a $113M loan default – Lender A10 Capital assigned Gateway at Wynwood post-foreclosure, with CIRE assuming a $76.7M CMBS loan (CommercialObserver)

Silver Star Properties REIT defaults on $58M loan tied to three office buildings in Dallas, San Antonio, and Houston, TX – Foreclosure looms as Benefit Street Partners moves to seize assets amid its pivot to self-storage (TheRealDeal)