Key Insights

Recession fears are mounting as Trump's tariffs, federal workforce cuts, and economic uncertainty rattle markets. Short-term consumer pessimism is rising alongside tighter credit conditions, while concerns over commercial real estate exposures add to economic headwinds for banks

Office recovery remains uneven as leasing activity expands beyond New York into secondary markets like Pittsburgh and San Antonio. However, national vacancy remains high at 14%, and lower-tier office properties continue to struggle as demand concentrates in top-tier spaces

Rocket Companies is seeking to become a one-stop-shop for homebuying with its $1.75B acquisition of Redfin. By integrating mortgage lending, listings, and brokerage services under one platform, Rocket aims to streamline the homebuying process and strengthen its position in the housing market

This Week in Real Estate: Key Events & Data

Quick Markets

30Y Mortgage: 6.72% (+2 bps)
10Y Treasury Yield: 4.18% (-10 bps)
FTSE NAREIT Index: 784.62 (-1.04%)
30-day SOFR Average: 4.35%

Market Pulse

Rising recession fears and policy uncertainty are weighing on the economy, while short-term inflation concerns and worsening consumer sentiment, driven by unemployment fears and higher spending expectations, add to economic headwinds

Trump Policy Jitters — Tariffs, federal workforce cuts, and economic uncertainty raise recession risks, rattling markets and chilling investment (WSJ)

Short-term inflation expectations rose slightly, but medium and long-term expectations remained at 3.0% — Consumer pessimism grew as unemployment fears rose and spending expectations jumped to 5.0% (NYFed)

Policy & Industry Shifts

Inclusionary Zoning Trade-Offs – Inclusionary zoning policies create affordable units but may raise market-rate prices and limit overall housing supply (PioneerInstitute)

Residential

The US housing gap reached 3.8M in 2024 — New construction outpaced household growth, but affordability kept 1.6M young households from forming (Realtor)

Office

Office demand is rising in secondary markets, but the 14% national vacancy rate and a growing flight to quality suggest continued struggles for lower-tier properties

Office leasing gains spread beyond New York — Pittsburgh, San Antonio, and other secondary markets see rising demand, though national vacancy remains high at 14% (CoStar)

Office Rent Divide – Class A+/A office rents rose 5.2% since 2023, while Class B/C rents fell 5.7% as demand concentrates in top-tier properties (CBRE)

Market Mix

Record-low data center vacancy is driving supply constraints despite strong construction, while retail faces consolidation pressures as Circle K weighs store sales to facilitate a $47B merger

North American data center vacancy hit a record low 2.6% in 2024 — Despite record construction, limited availability is constraining sector growth as demand outpaces supply (JLL)

Circle K's owner may sell 2,000 US stores — Part of a $47B merger plan with 7-Eleven parent Seven & I to address US antitrust concerns (CoStar)

LA’s medical office market saw strong sales in 2024 — Vacancy fell to 9.1%, but JLL expects limited rent growth in 2025 due to competition from general office landlords (GlobeSt)

Financings

WeWork founder Adam Neumann is back with his real estate startup Flow, securing a $51M loan to acquire a 16-acre Miami site zoned for 2,380 units as he expands his rental housing vision

$51M Miami Land Loan — Adam Neumann’s Flow secured financing from Ladder Capital to acquire a 16-acre development site in El Portal, zoned for 2,380 units (CommercialObserver)

M&A

$1.8B D.C. Megaproject Buyout — PSP Investments is in talks to acquire The Wharf’s majority stake and secure a $1.2B refinancing (Bisnow)

$1.75B Redfin Acquisition – Rocket Companies agreed to acquire the real estate listing site in a $1.75B all-stock deal (Bloomberg)

$150M Florida Hotel Sale – Billionaire Jeff Greene is exploring a $150M sale of the Tideline Palm Beach Ocean Resort and Spa (Bloomberg) 

$68M Illinois Apartment Deal – FPA Multifamily bought Naperville’s 356-unit Huntington Apartments with a $39.8M assumable loan at 3.6% interest (TheRealDeal)

Institutional Fundraising

Affordable Housing Fund – $60B AUM investment manager Pretium is raising its first fund investing in single-family homes that can be leased at affordable rents (Bloomberg)

Distress Watch

$77.9M D.C. office-to-resi conversion foreclosure – Post Brothers faces foreclosure on a 400-unit office-to-resi project in D.C.’s West End, with an April 10 auction set (TheRealDeal)

Office CMBS distress hit a record 19.3% in February — Overall CMBS distress fell to 10.8% as multifamily, retail, and hotel saw mixed trends (CommercialObserver)

CRE Risk to Banks – 59 of the 158 largest U.S. banks have CRE exposures over 300% of equity, as loan restructurings hit $18B in Q4 2024 (FAU)