The Brick Breakdown

Hello Brick Brief readers, 

Today we're seeing weak life sciences leasing but strong senior housing demand, a sharp tariff-driven drop in manufacturing activity, and Marriott expanding with another acquisition.

🏥 Life sciences slow, senior housing accelerates
Alexandria Real Estate Equities lowered its 2025 FFO forecast after weak leasing demand, highlighting continued softness in the life sciences sector. Meanwhile, Welltower raised its 2025 guidance on strong senior housing demand, reflecting demographic tailwinds and recovery momentum in healthcare real estate.

🏭 Manufacturing sector struggles even as investment surges
Texas manufacturing activity fell to its lowest level since 2020 amid tariff-driven supply disruptions and rising inflation concerns. However, firms like IBM and Thermo Fisher are pledging a combined $32B in new U.S. manufacturing and R&D investments over the next few years, betting long-term on domestic production resilience.

🏨 Marriott bets on global expansion with CitizenM deal
Marriott's $355M acquisition of the CitizenM hotel brand expands its footprint with 36 new properties and projects 5% net room growth in 2025. The move signals continued optimism for global hospitality growth despite economic headwinds.

This Week in Real Estate: Key Events & Data

Quick Markets

30Y Mortgage: 6.84%
10Y Treasury Yield: 4.21% (-3 bps)
FTSE NAREIT Index: 753.63 (+0.75%)
30-day SOFR Average: 4.35%

Market Pulse

Texas manufacturing activity has plunged to its weakest level since 2020 as tariffs disrupt supply chains and drive up costs, deepening inflation concerns and signaling broader industrial slowdown risks

Tariff ‘chaos’ drags Texas manufacturing gauge to worst since 2020 – 60% of respondents expect negative impact, with supply line disruptions and higher costs fueling inflation concerns (Bloomberg)

Residential

Homeownership Rate Falls in Q1 2025 – Drops to 65.1%, the Lowest Since 2019, Due to Housing Affordability Challenges and Limited Inventory (Realtor.com)

Industrial

IBM and Thermo Fisher’s multibillion-dollar U.S. investment plans highlight how major firms are ramping domestic manufacturing and R&D to counter tariff pressures and safeguard future growth

IBM pledges $150B to boost U.S. tech growth – $30B allocated for mainframe and quantum computer manufacturing over next five years (CNBC)

Thermo Fisher plans to invest $2B in U.S. manufacturing and R&D over four years – Move counters tariffs and funding cuts (BizJournals)

Market Mix

Retail trends remain mixed as cap rates fall for banks and auto parts stores while rising for convenience stores, while CAVA and Sweetgreen outperform broader fast-casual traffic through suburban growth strategies

Retail

Retail cap rates fall in Q1 2025 – Banks and auto parts stores lead declines, with banks down 15 bps and auto parts stores down 9 bps, while convenience store cap rates rise 7 bps quarter-over-quarter (GlobeSt)

CAVA and Sweetgreen Outperform Fast-Casual – CAVA visits up 19.8% YoY, Sweetgreen sees 11.1% increase, outpacing sector as both chains expand in suburban markets despite broader slowdown (Placer.ai)

Earnings & Real Estate Impact

Life sciences real estate is showing signs of slowdown as Alexandria lowered its 2025 forecast on weak leasing, while strong demand for senior housing drove Welltower to raise its outlook and post robust Q1 growth

Life sciences REIT Alexandria Real Estate Equities lowered its 2025 adjusted FFO forecast due to reduced leasing demand, reporting Q1 FFO of $2.30 per share and a net loss of $11.6M (Reuters)

Welltower raised its 2025 FFO forecast thanks tostrong demand for senior housing, and reported Q1 normalized FFO of $1.20 per share, an 18.8% increase YoY. The healthcare infrastructure REIT posted a net profit of $0.40 per share, up from $0.22 per share a year earlier (Reuters)

Financings

Loans

PMG secures $413M loan for Miami Brickell towers – Largest South Florida financing in 2025, with two-tower development featuring 803 units and various amenities (TheRealDeal)

Refinancings

Acore Capital provides $89.2M loan for multifamily refi in Ashburn, VA – 200-unit build-to-rent development is co-developed by American Real Estate Partners and GreenBarn Investment Group (CommercialObserver)

M&A

Company M&A

Marriott’s $355M acquisition of CitizenM expands its global footprint and supports its 2025 growth strategy, adding 5% net room growth through a younger, lifestyle-focused brand

Marriott buys CitizenM hotel brand for $355M – Acquisition includes franchise agreements for global portfolio of 36 hotels, adding 5% net room growth in 2025 (Bisnow)

Building & Portfolio M&A

Developers of D.C.'s The Wharf sell their stakes in a $1.8B deal – PSP Investments gains majority control of the mixed-use waterfront project (Bisnow)

Ralph Lauren buys NYC SoHo storefront for $132M – Purchase secures its Polo Ralph Lauren store at 109 Prince Street, originally owned by Jean-Pierre Lehmann (CommercialObserver)

Equus Capital Partners acquires apartment community Lansdale, PA for $73.1M – 230-unit Jacobs Woods is set for $5.8M in capital improvements (MultiHousingNews)

Enovum Data Centers purchases 946K-SF Greensboro, NC factory for $53.2M – Unifi sells plant amid layoffs; facility to be converted into data center (ConnectCRE)

Institutional Fundraising

StepStone Real Estate closes its fifth flagship secondaries fund at $3.8B fund – Fund focused on GP-led secondaries and recapitalizations, with total investment capacity exceeding $4.5B (IREI)

Distress Watch

Lenders seize 400 Charlotte, NC office tower for $36M – Oaktree and Trinity default, selling the 32-story building for $36M, about 31% of its original assessed value of $115.3M (TheRealDeal)

Proptech & Innovation

90% of lenders now offer digital mortgage closings – Up from 74% in 2023, showing widespread adoption despite not yet being universal (NationalMortgageNews)