Hello Brick Brief readers, 

Thank you for your continued support! Recent news shows higher-than-expected July core CPI driven by services cost growth, retail openings continuing to outpace closures, and homebuyer leverage strengthening.

I’m traveling for work this week, so editions may be lighter than usual depending on my schedule. Normal publishing will resume next Monday.

📈 Core CPI Surprise Keeps Fed Cautious on Cuts
Core CPI rose 3.1% vs 3.0% expected in July, driven by the fastest services cost growth since January, while goods inflation stayed muted. Fed officials Schmid and Barkin signaled comfort holding rates at 4.25–4.50% for now, citing modest tariff impacts and flexibility to adjust policy if risks shift.

🏬 Retail Openings Outpace Closures as Walmart Gains, Target Slips
Retail openings are outpacing closures in 2025, with steady vacancies and fewer construction starts creating favorable conditions for landlords and investors. Walmart’s stable traffic and strong e-commerce contrast with Target’s declines, as Target battles weaker discretionary demand and a growing brand perception challenge.

🏠 Southern Renters Drive Engagement as Buyers Gain Leverage
Buyer leverage is improving as commissions rebound to pre-settlement levels and inventory expands, boosting sentiment despite affordability headwinds. Renter demand remains strong in the South, with nearly half of the top 30 renter engagement markets located there despite Sun Belt for-sale markets facing price pressure from oversupply, while multifamily demand is set to outpace supply by late 2025 amid falling rents and fewer completions.

30Y Mortgage: 6.58% 

10Y Treasury Yield: 4.30% (+1 bps)

WSJ Prime Rate: 7.50%

FTSE NAREIT Index: 753.17 (+0.61%) 

30-day SOFR Average: 4.34%

Stubbornly high services inflation keeps the Fed cautious, but softer goods prices and a cooling labor market leave the door open for a September rate cut

July CPI holds at 2.7% YoY – Core inflation excluding food and energy rises 3.1% vs 3.0% expected, keeping a September Fed rate cut in play (WSJ)

US core CPI rises 0.3% MoM in July – Services costs climb at fastest pace since January, while muted goods inflation and weaker jobs backdrop keep September Fed rate cut expectations alive (Bloomberg)

US small business optimism rises 1.7 points to 100.3 in July – Higher uncertainty tied to tariffs, inflation, and labor shortages clouds outlook despite improved expansion sentiment (Reuters)

Fed’s Schmid favors holding rates at 4.25%-4.50% – Says tariffs’ muted inflation impact supports keeping policy modestly restrictive while growth, labor market remain solid (Reuters)

Fed’s Barkin says bargain hunting may curb tariff inflation but risk jobs – Sees 4.25%-4.50% rate well placed to adjust as risks shift (Reuters)

Trump urges Goldman Sachs to replace chief economist Jan Hatzius – Disputes tariff forecasts, claiming costs fall on companies and foreign governments, not consumers (WSJ)

Insight: While this political story wouldn’t typically make The Brick Brief – my only objective is to provide unparalleled, unbiased real estate news that keeps readers informed – it ties into yesterday’s note on Goldman Sachs projecting tariff passthrough to consumers rising from 22% to 67% by year-end, which could keep inflation elevated and complicate the Fed’s rate-cut calculus.

Centersquare closed an $815M asset-backed securities (ABS) transaction backed by 26 data centers, giving it fresh capital to expand into one of the fastest-growing segments of real estate.

• The securitization pools the rental income from the data centers and issues bonds against that cash flow, allowing Centersquare to lock in long-term, fixed-rate financing while freeing up equity for growth
• Class A and Class B tranches carry conservative loan-to-value ratios of roughly 59% and 63%, showing lenders view data centers as a stable, income-generating asset class with strong multi-year growth potential
• Collateral totals 1.17M sq ft and 150 MW of critical load across fee-simple and leasehold sites, generating $439M in annual recurring revenue from over 1,000 tenants under a weighted average lease term near four years
• Proceeds strengthen Centersquare’s balance sheet to support portfolio expansion in high-demand, power-secured markets, using debt to scale capacity in line with rising tenant demand and market absorption
• The deal reflects a broader trend of rising data center ABS issuance, with DoubleLine Capital projecting total outstanding volume to double to $50B by 2027 as operators match long-term infrastructure leases with patient capital in anticipation of $400B in hyperscaler spending in 2025

Takeaway: The financing highlights how ABS structures are becoming a favored tool for funding digital infrastructure, signaling deep lender conviction in the stability and scalability of data center cash flows and their assets. With structured capital in place and record hyperscaler demand, Centersquare is well-positioned to expand capacity while market momentum remains strong.

Buyer leverage is improving as commissions rebound and inventory grows, lifting housing sentiment despite ongoing affordability constraints

Buyer’s agent commissions rise to 2.43% in Q2 – Rates return to pre-NAR settlement levels as buyers gain leverage in slower market (Redfin)

Fannie Mae housing sentiment index rebounds 2 points to 71.8 in July – Improved price and mortgage rate outlook offsets weaker buying conditions as growing inventory boosts buyer leverage (Homes.com)

Washington, D.C. tops renter engagement in H1 2025 – RentCafe ranks it #1 nationally, followed by Kansas City and Cincinnati, with Southern cities making up nearly half of the top 30 (RentCafe)

US apartment demand expected to outpace supply by late 2025 – Vacancies projected to decline nationwide, with Houston among markets where absorption will surpass new deliveries (CoStar)

U.S. median multifamily asking rent drops to $1,712 in July – Down 2.5% YoY for 0–2 bedroom units in the 50 largest metros, with completions down 38% amid tariffs and margin pressure (Realtor.com)

CBRE projects lowest industrial net absorption since 2010 – 2025 supply forecast cut 37% to 217M SF, with demand shifting to newer properties as 3PL outsourcing drives move-outs from older facilities (GlobeSt)

U.S. containerized imports hit 2.62M TEUs in July – Volumes rose 18.2% from June and 2.6% YoY, driven by seasonal demand and tariff frontloading, nearing the May 2022 record (FreightWaves)

U.S. import volumes projected to fall 5.6% in 2025 – NRF and Hackett Associates cite tariffs and trade policy uncertainty as key drivers, with June imports down 8.4% YoY (FreightWaves)

Fund managers boost telecom REIT allocations to 17%, overtaking residential at 16% for first time since 2017 – Data centers post largest quarterly rebound, with office and timberlands also gaining (ConnectCRE)

Retail fundamentals remain resilient as openings outpace closures and investment rises, with Walmart outperforming Target in traffic amid shifting consumer demand

U.S. retail openings outpace closures in 2025 – 6,565 announced openings vs. 5,633 closures through midyear, signaling resilience despite -7.5M SF net absorption (JLL)

Retail investment volumes surge 23% YoY to $28.5B – Vacancies steady at 4.3% as construction starts fall 50%, creating strategic opportunities for investors and retailers (JLL)

Walmart same-store visits hold between +0.8% and -1.6% YoY in Q2, while Target sees 2.2% to 9.7% declines – Walmart’s stable traffic and strong e-commerce growth support a positive outlook, as Target contends with weaker discretionary demand despite digital sales gains (Placer.ai)

Northmarq provides $109M Freddie Mac refi for Advanced Real Estate’s 428-unit Anaheim and Azusa, CA portfolio – Includes $50.1M for Summer Crest, $30M for Le Med, and $26.6M for Villa Serrano (CommercialObserver)

Adam Neumann/Flow, Canada Global, and Yakir Gabay’s Yellowstone Trust acquire 14%, 23%, and 23% stakes respectively in Chetrit’s $525M Flow on the River in Miami, FL – 54-story, 632-unit tower nears completion with zoning for 1,300 more units (CommercialObserver)

UDR, MetLife seek $450M–$500M for five-building Manhattan multifamily portfolio – Mostly free-market units positioned to avoid rent freeze impacts from mayoral candidate Zohran Mamdani’s proposal (TheRealDeal)

Bucksbaum Properties and Structured Development list $260M NewCity shopping center in Chicago, IL – 391K sf Lincoln Park retail asset is 76% leased to AMC, Dick’s Sporting Goods, and Mariano’s; apartments from original development excluded from sale (TheRealDeal)

Mershops and Steerpoint Capital acquire Weberstown Mall in Stockton, CA for $50.8M – 800K SF retail center will undergo upgrades while retaining its role as the city’s primary shopping destination (CoStar)

Pension Texas TRS invests $450M in July – $300M goes to Starwood’s distressed real estate fund targeting U.S., Europe, and Asia Pacific (IREI)

Unidentified buyer to acquire two Hilton hotels in San Francisco, CA after $725M loan default – Deal includes 1,921-room Hilton Union Square and 1,024-room Parc 55, previously owned by Park Hotels & Resorts (TheRealDeal)

Kylli faces foreclosure after $350M loan default on 22-story San Francisco office tower – Lenders move to take control as value drops 75% to $153M and occupancy falls to 43% (TheRealDeal)

$177M CMBS loan for Austin, TX office campus sent to special servicing – Accesso Partners’ 911K SF complex sees occupancy drop to 74% from 99% in 2023 (CommercialObserver)

Proptech providers pivot to boost retention – CREx shifts to data integration, WithMe to turnkey amenities, Bryckel AI to ROI and faster onboarding (CommercialObserver)

Tidalwave and Bevri.ai launch agentic AI for mortgage brokers – Platform integrates with Fannie Mae, Freddie Mac, and ICE Mortgage Technology, adding NEXA Mortgage as a client (Inman)