Hello Brick Brief readers, 

Good morning. In recent news, we saw a fresh post-COVID office attendance high in July, rising CRE transactions and secondaries, and unique financing strategies fueling the data center boom.

🏢 Office Recovery Gains Momentum
U.S. office visits hit a post-COVID high in July, with San Francisco leading YoY growth at 21.6% and NYC surpassing pre-pandemic levels. CBRE reports 72% of firms now meet attendance goals, 85% have formal RTO policies, and 67% plan to maintain or expand footprints as hybrid norms stabilize.

📈 CRE Transaction, Lending, and Secondaries Surge
CBRE, JLL, Cushman & Wakefield, Colliers, and Newmark raised 2025 forecasts as leasing and sales activity strengthen, particularly in office and multifamily. U.S. CRE loan closings surged 45% YoY in Q2, while the real estate secondary market hit a record $102B in H1 and is on pace for $210B this year as institutional demand and GP-led deals accelerate.

⚡ Data Center Expansion Meets Grid Concerns
Major financings, including DC Blox’s $1.15B green loan and Centersquare’s $815M bond, are fueling large-scale U.S. data center developments. Yet the sector’s rapid AI-driven growth is straining power systems, with PJM warning electricity costs could climb up to 60% by 2030 without significant new generation and transmission.

30Y Mortgage: 6.58% (+1 bps)

10Y Treasury Yield: 4.29% 

WSJ Prime Rate: 7.50%

FTSE NAREIT Index: 748.60 (-0.56%) 

30-day SOFR Average: 4.34%

Trump extends US-China tariff truce for 90 days – Pause delays tariff hikes to Nov. 10, easing trade tensions while talks continue on rare earths, chip exports, and broader economic issues (Bloomberg)

Goldman Sachs warns Trump tariffs will push inflation higher – Consumers’ share of costs expected to jump from 22% to 67% by year-end, driving core PCE to 3.2% and complicating Fed rate cut plans (Bloomberg)

Insight: Goldman Sachs believes that the cost of tariffs will slowly trickle to consumers over the next few months. Their projections support Powell’s wait-and-see approach on inflation, with upcoming CPI releases set to show how whether price pressures are building.

San Francisco is showing signs of a real office market turnaround, with AI tenants leading the charge and early investor bets beginning to pay off.

• In July 2025, Placer.ai data shows that San Francisco led all major U.S. markets with 21.6% YoY growth in office visits, outpacing every other city and signaling renewed downtown momentum
• Leasing in the first half of 2025 topped 5.6 million sq ft, up 61% YoY, with technology and AI companies driving a growing share of commitments
• Recently, Brex signed for 100K sq ft at 270 Brannan, Zip expanded into 75K sq ft at 680 Folsom, and Tubi leased 31K sq ft in SoMa, reflecting the strength of AI and media demand in core submarkets
• OpenAI is negotiating a lease for up to 300K sq ft in Mission Bay, which would bring its San Francisco footprint close to 1 million sq ft as the area shifts from biotech toward AI hubs
• DivcoWest and Blackstone acquired the 420K sq ft 300 Howard St. tower (SoMa) in April 2025, announcing plans to brand the area as “AI Alley” and redesign the property to cater specifically to high-performance AI tenants
• This April move now looks prescient as AI leasing has accelerated through the summer, with multiple large blocks absorbed and more negotiations underway in Mission Bay and SoMa

Takeaway: San Francisco’s rebound is being led by a concentrated wave of AI and tech leasing that validates investor conviction from earlier in the year. Blackstone and DivcoWest were months ahead in predicting this shift, positioning themselves to capture a tenant base that is now reshaping the city’s office market.

Rising inventory and softer 2025 price forecasts may briefly boost buyer leverage, but institutional SFR expansion in affordable, high-growth metros could tighten supply and support long-term price resilience.

Zillow expects 0.8% home value drop in 2025 – Economist urges qualified buyers to act now as high rates, more inventory, and muted competition create rare negotiating power (Bloomberg)

Buyer’s market stalls – Inventories rise but sales lag as high rates and costs keep buyers sidelined, with prices projected to climb 4.2% by June 2026 (Cotality)

Institutional investors expand in SFR markets – Southeast metros lead activity while smaller cities like Myrtle Beach, Port St. Lucie, and Huntsville gain share on strong in-migration and affordability (GlobeSt)

NYC developers convert shuttered migrant hotels into 1,100+ apartments – Conversions offer faster, cheaper housing supply but face zoning hurdles and limited impact on city’s shortage (WSJ)

U.S. office recovery accelerated in July as stricter RTO mandates and rising Class A demand lifted attendance to post-COVID highs, with most occupiers planning to maintain or grow space despite cost pressures

U.S. office visits hit post-COVID high in July – Nationwide traffic down just 21.8% from 2019 as RTO mandates push NYC above pre-pandemic levels and Miami nearly even (Placer.ai)
San Francisco leads YoY office recovery – Visits up 21.6% on rising rents, improving sentiment, and new business openings, outpacing all major hubs (Placer.ai)
Atlanta and Dallas narrow office gaps below 20% – Denver and Los Angeles lag as hybrid-friendly markets trail stricter RTO cities (Placer.ai)

72% of firms now meet office attendance goals vs. 61% in 2024 – Small companies close the gap between expectations and actual show-up rates (CBRE)

85% of firms have an attendance policy, with 37% taking enforcement action vs. 17% in 2024 – Large employers still see the widest attendance shortfall (CBRE)

CBRE survey finds 67% of U.S. office occupiers plan to maintain or expand footprints – Up from 64% last year as hybrid work norms stabilize (ConnectCRE)

Poll shows no consensus on AI’s impact on office demand – Industry remains split on whether artificial intelligence will expand or reduce office space needs (CoStar)

Prime office costs rise on Class A demand – Miami leads U.S. increases as tenants compete for trophy space despite higher rents and fit-out expenses (GlobeSt)

Piper Sandler leases 140K SF at 1301 Sixth Avenue in NYC – Paramount Group also signs Adler & Stachenfeld to 40K SF at Midtown office tower (CommercialObserver)

Qualys renews 75K SF HQ lease at 919 E. Hillsdale Blvd. in Foster City, CA – Six-year extension keeps cloud security firm in Hudson Pacific Properties-owned building through 2031 (CoStar)

The Farmer’s Dog leases 58K SF at 568 Broadway in NYC’s SoHo – Pet food company takes two floors in five-year deal at historic Prince Building (CommercialObserver)

3PLs dominate top 100 industrial leases in H1 – Logistics firms signed 38 deals totaling 28.9M SF as e-commerce-only leasing plunged 64% YoY and mega lease activity halved from 2024 levels (CBRE)

Top CRE brokerages raise 2025 outlooks as leasing and sales rebound – CBRE, JLL, Cushman & Wakefield, Colliers, and Newmark post strongest earnings in years amid rising office and multifamily demand (CoStar)

Real estate secondary market hits $102B in H1 2025 – Institutional demand, illiquidity, and GP-led deals drive record activity, with volume on pace to reach $210B this year (Bisnow)

Tariffs and rate uncertainty cut CRE buy recommendations to 18% in Q2 – Investors favored holding assets amid policy volatility and high rates (CommercialObserver)

CoStar cuts 2025 US hotel forecast – RevPAR and demand both expected to fall 0.1% as tariffs, weaker job growth, and declining international travel weigh on performance (CoStar)

Data center boom threatens PJM grid affordability – Surging AI-driven demand could lift electricity bills up to 60% by 2030 without rapid new generation and transmission buildout (Bisnow)

Insight: This story connects well with our theme on hyperscalers’ $400B 2025 data center buildout and yesterday’s WSJ piece on Silver Lake’s $400M “power-first” strategy, as grid capacity becomes the new chokepoint for data centers. Institutions are now moving upstream to acquire stakes in power providers, and just last week, Brookfield agreed to purchase of 19.7% of Duke Energy’s Florida utility for $6B, reflecting the race to secure returns from surging AI-driven and electrification-fueled energy demand.

CBRE reports 45% YoY increase in U.S. CRE loan closings in Q2 2025 – Growth driven by alternative lenders and CMBS as banks remain cautious (CommercialObserver)

Centersquare launches $815M asset-backed bond to support data center portfolio – Portfolio value up 41% with $439M in annual recurring revenue (CoStar)

Insight: New financing models are emerging as structured debt strategies align with the data center boom. Centersquare’s $815M asset-backed bond is backed by a 26-property, $6.5B data center portfolio generating $439M in annual recurring revenue, with portfolio value up 41% in recent months as demand surges across key U.S. markets.

DC Blox secures $1.15B green loan for Atlanta, GA data center campus – 120MW Douglas County facility will expand to 300MW, adding to the market’s record data center growth (Bisnow)

InterVest Capital Partners and Builders Capital provide $160M construction loan for Disney’s Cotino in Rancho Mirage, CA – EC Rancho Mirage Holdings secures financing for first phase of 1,900-home master-planned community (CommercialObserver)

Clearline Real Estate secures $89M construction loan for Miami Wynwood, FL apartment project – Bank OZK provides $65.3M senior loan, while PGIM Real Estate lends $24M mezzanine financing for 310-unit development (TheRealDeal)

Freddie Mac and Wells Fargo provide $249M refinancing for Anagram NoMad in NYC – Global Holdings secures five-year, interest-only loan for 392-unit multifamily tower after major renovations (GlobeSt)

TPG Real Estate Credit provides $170M refi for two Portland, OR multifamily towers – Alamo Manhattan and Diamond Realty refinance 572 units in The Olivia and Willamette Tower (CommercialObserver)

Affinius Capital lends $76M to refinance The Monroe apartments in Monrovia, CA – 232-unit property includes 6K SF retail and is nearing completion within Station Square Transit Village (CommercialObserver)

Thorofare Capital provides $50.5M bridge loan to refinance East Cambridge, MA life sciences portfolio – Barings and Greatland Realty Partners secure financing for two newly renovated Class A lab assets (ConnectCRE)

Namdar Realty Group buys retail units at Front & York in Brooklyn, NY for $55M – CIM Group sells ground-floor spaces at 85 Jay Street in Dumbo (CommercialObserver)

CRED iQ reports CMBS distress rate rises to 11.1% in July – Up 32 bps from June as delinquency and special servicing rates both increase (CommercialObserver)

Distressed CMBS mall loans often see extensions – $1.75B in enclosed mall debt modified over past year, mostly with 1–7 year term pushes, as weak debt yields limit refinancing options (Trepp)

Home organization retailer The Container Store hires BRG to address inventory and pricing issues – Months after exiting bankruptcy, the company is assessing its real estate portfolio and burning cash amid weak demand and tariff pressures (Bloomberg)

Bed Bath & Beyond returns as Bed Bath & Beyond Home – Parent The Brand House Collective converts Kirkland’s stores in Nashville pilot, with potential 75-location national rollout (Bisnow)

Nonprofit lender Community Preservation Corp reports rising distress in NYC rent-stabilized portfolio – Foreclosures up eightfold since 2022, delinquencies climb to 8% as rising expenses squeeze affordable housing owners (TheRealDeal)