Hello Brick Brief readers, 

Thank you for your continued support! In today’s news, housing rent growth is cooling, August retail spending is shifting under inflation, and falling mortgage rates are improving affordability.

🏡 Rent Growth Slows as Mobility Rises
US rents held at $2,007 in August, up 2.4% YoY as renter affordability improved to 28.9% of income and concessions reached a record 36.7%. Median asking rents for 0–2 BR units fell 2.2% YoY to $1,713 and posted a 25th straight monthly drop, giving tenants greater leverage to relocate or renegotiate leases.

🛍️ Inflation Shifts August Retail Spending
Retail sales climbed 3.5% YoY but real volume gained only 0.4% as inflation and fewer promotions pushed shoppers toward e-commerce, which advanced 8.2%. Apparel sales jumped 7.6% on larger ticket sizes while entertainment traffic plunged 26.9%, showing that consumers are favoring essentials and trimming discretionary outings.

💵 Fed Cut Anticipation Drives Rate Drop
The 30-year fixed mortgage rate fell 12 basis points to 6.13% ahead of today’s Federal Reserve meeting, where a 25-basis-point cut is expected. The decline signals market confidence in easier policy and offers buyers a timely boost in affordability.

30Y Mortgage: 6.13% (-12 bps)

10Y Treasury Yield: 4.03% (-1 bps)

WSJ Prime Rate: 7.50%

FTSE NAREIT Index: 773.26 (-0.57%) 

30-day SOFR Average: 4.37%

Fed expected to cut rates 0.25% – Powell faces political pressure as job growth slows and officials debate pace of future cuts amid Trump challenges and uncertainty over neutral rate (WSJ)

US retail sales rose 0.6% in August – Core sales climbed 0.7% as consumers showed resilience despite rising tariffs and a weakening labor market (Reuters)

US consumers show rising financial strain – Average FICO score slipped 2 points as inflation, high rates, and record student loan delinquencies hit Gen Z hardest (Reuters)

US import prices rose 0.3% in August – Nonfuel imports climbed 0.4%, offsetting a 0.8% drop in fuel prices as natural gas fell 13.2% (WSJ)

US housing shows signs of cooling as permits sink near pandemic lows, new listings hit a record August low, and rents flatten while small-unit prices keep falling, with builder sentiment remaining weak despite holding steady this month

Moody’s economist warns slumping housing permits signal recession – Permits near pandemic lows with a 48% chance of a U.S. recession in 12 months (GlobeSt)

Reuters survey sees US housing weak through 2026 – High 6.5% mortgage rates limit demand with home prices rising only ~2% in 2025 and ~1% in 2026 (Reuters)

US new listings hit record August low – Inventory fell 1.3% from July as sellers pulled back despite total for-sale supply up 15% YoY, keeping the housing market balanced but slowing buyer leverage (Zillow)

PIMCO urges Fed to halt mortgage-backed securities runoff – Reinvesting $18B monthly MBS payments could cut mortgage rates 20–30 bps, easing housing costs more than rate cuts (Reuters)

US rents hold at $2,007 in August – Up 2.4% YoY as renter affordability improves to 28.9% of income and concessions hit a record 36.7% (Zillow)

Rents for 0–2 BR units drop for 25th straight month – Median asking rent $1,713, down 2.2% YoY, with studios, 1BR, and 2BR all lower and renter mobility rising (Realtor.com)

Homebuilder confidence held steady in September – Fed rate-cut expectations lifted near-term sales optimism despite continued negative sentiment (WSJ)

Scotiabank leases 205K SF at 660 Fifth Avenue in Manhattan, NY – Relocates from 250 Vesey Street to Brookfield’s fully leased Midtown tower (CommercialObserver)

ServiceNow leases nearly 200K SF at 10 CityPlace in West Palm Beach, FL – Regional HQ and AI institute to open by 2028 with $1.8B economic impact and 850 projected jobs (Bisnow)

Software platform Outbrain renews 23K SF office lease in Manhattan, NY – Signs 10-year deal for the entire third floor at Kaufman Organization’s 111 West 19th Street with asking rent of $70/SF (CommercialObserver)

GSK to invest $30B in US R&D and supply chain over five years – Plan includes a $1.2B Pennsylvania factory and AI-driven upgrades as pharma tariff threats loom (Reuters)

Eli Lilly to invest $5B in new Virginia plant – Part of a $27B U.S. expansion to boost domestic drug production and hedge against potential pharma tariffs, creating 650 permanent jobs (Reuters)

Insight: Tariffs aimed at reshoring production appear to be working specifically for pharmaceuticals, as drugmakers expand U.S. manufacturing to reduce import reliance

August retail sales rose 3.5% YoY but real volume barely grew as inflation steered shoppers online, apparel spending climbed on higher ticket sizes, and entertainment traffic plunged, highlighting a shift toward practical purchases and away from discretionary outings

Retail sales up 3.5% YoY in August but volume only +0.4% – Inflation and fewer promotions push shoppers online, lifting e-commerce 8.2% and pressuring in-store traffic (Colliers)

Apparel sales surged 7.6% YoY in August – Foot traffic +4.7% as higher ticket sizes and trend-driven inventory drive spending gains (Colliers)

Entertainment foot traffic plunges 26.9% in August – Theaters and music venues keep dwell times high at 132 minutes despite smaller audiences (Colliers)

Darden Restaurants Q2 2025 visits up 2.4% YoY, same-store visits up 1.1% YoY – Yard House leads with +6.2% overall and +4.3% same-store, Olive Garden and LongHorn post moderate gains, Cheddar’s flat (Placer.ai)

Retail design priorities shift to efficiency and accessibility – JLL finds shoppers now rank speed and inclusivity above traditional experiential branding (JLL)

CRE loan spreads steady ahead of Fed decision – Multifamily tightens 2 bps while retail holds at 168, industrial at 151, and office at 207 as lenders stay confident in low-LTV deals (Trepp)

S3 Capital provides $80M construction loan for 131-unit multifamily tower in Midtown Manhattan, NY – Financing supports developer David Halberstam’s 35-story project with market-rate and affordable units (CommercialObserver)

Bank OZK and PGIM provide $114M construction financing for 262-unit multifamily project in Patchogue, NY – Funding includes a $95M senior loan and $19.2M mezzanine debt for Nord Development and Acre (CommercialObserver)

Brookfield nears $1.25B refinancing for Five Manhattan West in Manhattan, NY – Citi, Bank of Montreal, Deutsche Bank, JPMorgan and Société Générale expected to fund a $985M five-year loan with additional CMBS proceeds (Bisnow)

Ashford Hospitality Trust Secures $218M Refi for Renaissance Hotel in Nashville, TN – Two-year interest-only loan with three one-year extension options lowers preferred equity return to 11.14% from 14% (ConnectCRE)

Rithm Capital nears purchase of $1.6B office landlord Paramount Group – The NYC and San Francisco owner holds 13M SF and is under SEC investigation over executive perks and related-party transactions (Bloomberg)

Steve Witkoff sells $120M stake in real estate firm Witkoff Group – The divestment helps avoid conflicts of interest while he serves as Trump administration special envoy (TheRealDeal)

Pontegadea buys Atlas Plaza in Miami, FL for $105M from Tricap; RFR Holding; Commerz Real – Luxury retail center is fully leased to tenants including Rolex (Bloomberg)

BKM Capital Partners and Kayne Anderson acquire $168M, 900K SF industrial portfolio in Phoenix, AZ – 40-building, 89% leased purchase expands BKM’s Arizona holdings to 4.5M SF and includes major capital improvements (TheRealDeal)

Beacon Capital Partners and MetLife seek $400M+ for 40-story office and retail tower at 575 Fifth Avenue in Midtown Manhattan – Property is 87% leased (TheRealDeal)

CMBS special servicing rate down 19 bps to 10.29% in August – Lodging 9.10% (-91 bps) and mixed-use 10.64% (-157 bps) with $2.4B new transfers (Trepp)

CRE CLO distress hits 13.32% in August – Delinquencies rise to 10.65% and special servicing to 8.15% as high rates strain refinancing (CommercialObserver)