The Brick Breakdown

Hello Brick Brief readers, 

Today’s news highlights Trump’s softer tone on China and Powell, early signs of a San Francisco rebound, export strain, and rising institutional bets on a real estate bottom.

📉 Powell tension cools, China tariffs in flux

Trump’s softened stance on both Fed Chair Powell and China tariffs has temporarily calmed markets — but rate and trade policy uncertainty remains high. Investors should expect volatility to persist until there’s clarity on inflation, interest rate cuts, and trade de-escalation. 

🌉 San Francisco shows early signs of rebound

The $111M sale of 300 Howard St. to DivcoWest and Blackstone underscores growing investor confidence, with plans to anchor an “AI Alley” as tech leasing leads the rebound in downtown San Francisco. Meanwhile, new long-term leases from the city’s “Vacant to Vibrant” initiative add momentum to a broader San Francisco recovery.

🏭 Industrial market resets as new pressures emerge

Industrial vacancy rose to 7.1% in Q1 and new supply dropped 60% YoY, reflecting a post-boom cooldown just before tariffs took effect. Now, LA and Long Beach ports brace for a 10%+ cargo hit, while Roche and Regeneron’s $56B investment signals growing momentum for U.S. manufacturing in response to trade volatility.

💰 Institutions bet on a possible real estate bottom

Oregon’s $750M allocation assumes the real estate market has reached its bottom, marking a notable shift in institutional strategy. Paired with the first year-over-year Q1 fundraising increase since 2022, it signals that long-term capital is beginning to reenter the market amid falling valuations and policy uncertainty.

This Week in Real Estate: Key Events & Data

Quick Markets

30Y Mortgage: 6.98% (+4 bps)
10Y Treasury Yield: 4.35% (-6 bps)
FTSE NAREIT Index: 747.33 (+1.89%)
30-day SOFR Average: 4.35%

Market Pulse

Trump’s tariff and Fed reversals offered temporary market relief, but rising credit card delinquencies and tighter lending standards signal deepening financial strain beneath the surface 

Trump signals tariff cuts in China deal – Amid market pressure, Trump says duties will drop “substantially” if trade talks succeed, softening stance as Beijing demands U.S. consistency (Bloomberg)

Trump walks back Powell threats -- President says he has “no intention” of firing Fed Chair Jerome Powell, easing market fears and boosting equities (Reuters)

Credit card firms grow cautious -- Rising delinquencies and trade war uncertainty push lenders to tighten credit, raise reserves, and shift focus to affluent borrowers despite steady consumer spending (WSJ)

Policy & Industry Shifts

Federal leasing cuts slowed in March as selective expansions offset broader consolidation, while Colorado’s new law banning hidden apartment fees aims to boost rental transparency

Federal lease cuts slowed in March -- DOGE trimmed just 503K SF vs. 8.5M in February, with annual rent savings down to $11.5M as selective expansions offset broader consolidation (GlobeSt)

FHFA launches fraud tip line -- New director Bill Pulte urges public to report mortgage fraud and says FHFA is exploring options to recall fraudulent loans (MortgageOrb)

Colorado bans ‘junk fees’ for apartments -- New law requires landlords to disclose all rental costs upfront, barring hidden charges for services like trash or pest control starting in 2026 (CoStar)

Residential

Home prices and rents rose across the U.S. in Q1, while Florida’s aging condo market is under pressure as rising costs and new repair rules push owners to sell

Home prices up 5.2% YoY in Q1 -- Fannie Mae sees steady growth continuing, but panel expects moderation to 3.4% in 2025 and 3.3% in 2026 (MortgageOrb)

NYC rents up 5.6% YoY in Q1 – Median hits $3,397 as smaller units lead demand; all boroughs see gains, with tariffs set to raise future construction costs (Realtor.com)

Florida condo selloff grows – Rising costs and repair rules push owners to exit, hitting older buildings hardest (WSJ)

Office

Manhattan Class B offices in demand -- Tight Class A supply and rising return-to-office rates drive leasing surge for premium older buildings, with conversions further shrinking inventory (TheRealDeal)

Industrial

Industrial vacancy rose to 7.1% in Q1 as new supply plummeted and rent growth slowed, while escalating U.S.-China trade tensions threaten coastal logistics hubs and shift momentum toward domestic manufacturing and inventory buildup

U.S. industrial vacancy hits 7.1% in Q1 – Highest since 2015 as new supply drops 60% YoY to 65M SF, while rent growth slows but stays positive at 6% YoY to $10.65/SF average (Colliers)

Trump’s China tariffs threaten SoCal logistics hub – LA and Long Beach ports expect cargo to drop 10%+ by May as $130B in imports face steep duties, impacting firms like Amazon, FedEx, UPS, and Prologis (Bloomberg)

US-China trade freeze hits warehouses -- Imports from China may fall 40%, curbing leasing near key ports like Long Beach as tariff uncertainty chills logistics activity (CoStar)

Drugmakers Roche, Regeneron unveil $56B in U.S. expansions -- New facilities span NY, NC, CA and more as tariff threats prompt onshoring push and large-scale biomanufacturing growth (Bisnow)

Manufacturers pull forward output ahead of tariffs -- March visitation jumps signal inventory build-up amid trade uncertainty, with spikes in Idaho and West Virginia (Placer.ai)

Market Mix

QTS’s $780M Texas expansion underscores sustained AI-driven data center demand, while San Francisco’s “Vacant to Vibrant” program shows early success in stabilizing downtown retail with new long-term tenants

Data Centers

QTS launches $780M Texas expansion -- Blackstone-backed firm to build two Dallas-area data centers and expand Fort Worth campus amid surging AI demand (CoStar)

Retail

San Francisco retail program gains traction -- 'Vacant to Vibrant' leads to four long-term downtown leases, including Koolfi Creamery and local food vendors (CoStar)

Earnings & Real Estate Impact

Capital One’s earnings beat highlights how consumers pulled forward spending in anticipation of new tariffs, temporarily boosting retail activity but raising concerns about future demand softening

Capital One beat Q1 earnings expectations thanks to strong consumer card spending as customers rushed to purchase cars, electronics and appliances ahead of Trump’s proposed tariffs; US retail sales jumped 1.4% YoY in March (Bloomberg)

Financings

Seagis secures $88M refi for Miami-Dade industrial portfolio – State Farm loan backs 787K SF across seven fully leased warehouses, as demand stays strong across logistics and e-commerce sectors (The Real Deal)

Brennan secures $63M refi for Chicago O’Hare industrial park -- Signs point to buyout of prior partner Investcorp as Brennan doubles down amid slowing Chicago-area leasing (TheRealDeal)

Goldman Sachs lends $51M for Miami office refi -- Dadeland Centre I & II, 93% leased suburban towers, secure 10-year loan despite post-COVID preference for Class A assets (CoStar)

M&A

Building & Portfolio M&A

Hospitality investor Driftwood closes $1.2B hotel consolidation deal – 18-property portfolio spans 4,200 rooms across Hilton, Marriott, and Margaritaville brands in high-growth markets like Texas and Florida (CoStar)

Vacant SF office tower sells for $111M -- DivcoWest and Blackstone buy 300 Howard St. at steep discount, aim to anchor “AI Alley” as tech leasing rebounds (CoStar)

Waterton buys 371-unit Seattle tower for $103M -- Chicago investor acquires Skye at Belltown near downtown, expanding multifamily footprint in key West Coast market (CoStar)

Acadia Realty Trust buys 3 Williamsburg, Brooklyn retail buildings for $60M – Fully leased North Sixth Street properties include Lululemon, Abercrombie, and Mejuri (CommercialObserver)

Institutional Fundraising

Institutional capital is reentering the real estate market as Oregon’s $750M allocation and a Q1 fundraising rebound signal growing conviction that valuations have bottomed despite ongoing tariff-driven uncertainty

Oregon State Treasury allocates up to $750M to real estate -- The pension fund's 2025 pacing plan bets on a market bottom, positioning capital amid tariff-driven uncertainty (PERE)

Q1 2025 fundraising shows signs of recovery -- Driven by two Blackstone funds, capital raising saw its first Q1 year-over-year gain since 2022 (PERE)

Distress Watch

RFR loses 285 Madison Ave. in NYC auction — Korean lenders led by Daol Asset Management seize tower via UCC foreclosure after maturity default; valuation halved from $610M to $300M since 2017 (Bisnow)

Westfield defaults on $235M loan in suburban Maryland – URW missed March payment on loan tied to Wheaton Mall near D.C., now in special servicing as firm weighs sale or foreclosure (BizJournals)

Fannie Mae selling $200M in delinquent loans -- GSE offloads over 1,100 nonperforming mortgages amid Pulte-led shakeup and fraud crackdown (CommercialObserver)