Hello Brick Brief readers, 

Happy Thursday. In recent news, the Fed held rates steady, office gains are limited to Class A buildings, and single-family home landlord Invitation Homes continues to benefit from the US housing shortage. 

📊 Growth Rebounds, Rate Debate Heats Up
The Fed held rates steady for a fifth straight meeting, with two officials dissenting as internal divisions grow over how to manage rising goods prices and a cooling labor market. Q2 GDP rose 3%, reinforcing the case against rate cuts as strong consumer spending and tariff-driven inflation complicate the Fed’s path forward.

🏢 Office Gains Limited to Top-Tier Space
U.S. office vacancy reached a record 18.4% in Q2, with new construction at decade lows and net absorption flat year to date. Leasing demand remains concentrated in high-end Class A buildings, while hybrid work, tech layoffs, and slow return-to-office trends continue to weigh on the broader recovery.

🏠 Affordability Strains Deepen in Housing
Pending home sales slipped 0.8% in June as high mortgage rates, steep prices, and rising taxes and insurance costs discouraged buyers, especially FHA and VA borrowers. While demand falters, Invitation Homes beat Q2 revenue expectations by capitalizing on low supply and high occupancy across its national single-family rental portfolio.

30Y Mortgage: 6.75% (-2 bps) 

10Y Treasury Yield: 4.36% (+3 bps)

WSJ Prime Rate: 7.50%

FTSE NAREIT Index: 766.51 (-1.56%) 

30-day SOFR Average: 4.35%

The Fed held rates steady as strong Q2 GDP and rising tariffs point to inflation risks, reinforcing a wait-and-see stance while slowing investment and mixed labor signals complicate the case for cuts

Fed holds rates steady for a fifth meeting – Two officials dissented, signaling rising internal debate as tariffs cloud inflation outlook and Powell adopts wait-and-see stance into September amid diverging labor and consumer signals (WSJ)

U.S. GDP rebounded 3% in Q2, lifted by trade swings and steady consumer spending – Underlying growth slowed to 1.2% annualized in H1, with tariffs and high borrowing costs weighing on business investment (WSJ)

U.S. reaches trade deal with South Korea for 15% tariffs – Seoul pledges $350B in U.S. investments and ramps up American energy imports to avoid higher duties (Bloomberg)

U.S. hits India with 25% tariff starting August 1 – Tariff targets Indian exports over high trade barriers and Russian energy ties (Bloomberg)

Private sector added 104,000 jobs in July as pay rose 4.4% YoY – Strong services hiring and steady wage growth signal labor market resilience despite prior month’s decline (CNBC)

The Federal Reserve kept rates unchanged at 4.25% to 4.50% and adopted a cautious tone, acknowledging growing risks on both sides of its dual mandate as it watches how tariff-driven inflation and labor market cooling unfold in the coming months.

• Chair Powell emphasized the Fed is in “wait and see” mode, keeping all options open for the September meeting as inflation and employment data evolve
• Tariffs are beginning to push goods prices higher, but the Fed is unsure whether the inflation impact will be a temporary one-time adjustment or something more persistent
• Powell said recent inflation data has been little changed overall, but noted that services inflation is easing while tariffs are lifting prices in select goods categories
• Fed Governor Christopher Waller dissented, calling for a rate cut, and warned that the job market is already weakening beneath the surface despite a 4.1% unemployment rate
• Payroll growth is slowing, wage gains are moderating, and consumer spending has softened, especially among lower-income households and discretionary categories
• The Fed reiterated that policy remains moderately restrictive and that inflation expectations remain well-anchored for now
• Officials reaffirmed their commitment to the dual mandate of maximum employment and stable prices, signaling that both inflation and labor risks are being closely monitored
• Powell said the central bank is well-positioned to adjust policy when needed, but more data from July and August will be critical to determine next steps

Takeaway: The Fed is not ready to cut, but it is increasingly aware of the trade-offs. As the effects of tariffs slowly ripple through the economy and signs of softening appear in the labor market and consumer spending, officials are hoping for clarity in the next two months before making their next move

GSA’s top officials exit amid federal real estate shake-up – Trump administration accelerates downsizing and HQ relocations (Bisnow)

Housing affordability continues to deteriorate as high mortgage rates, rising property costs, and economic uncertainty drive down sales, increase delinquencies, and suppress mortgage demand

Pending home sales fell 0.8% in June, missing expectations for a rise – High prices and mortgage rates kept buyers cautious despite rising inventory, with contract signings down 2.8% YoY (WSJ)

Rising property taxes and insurance costs are driving up mortgage delinquencies – FHA and VA borrowers are hit hardest (GlobeSt)

Mortgage demand hit a post-May low as 30-year rates stalled at 6.83% – Purchase apps fell 6% and refis slipped 1% as economic uncertainty weighed on homebuyers (CNBC)

CoStar sues Zillow for $1B+ – Claims nearly 47,000 copyrighted listing photos were used without permission to boost rentals (Reuters)

U.S. multifamily vacancy hit a record 7.1% in July as new supply outpaced demand – National rents fell 0.8% YoY, with Austin seeing the sharpest declines and San Francisco leading gains (CNBC)

Washington, D.C. housing supply jumped 23% YoY in June – Federal job cuts pushed more listings to market while sales stalled and prices fell sharply (Redfin)

Office market recovery remains uneven as gains are limited to top-tier space, while record-high vacancies, tech layoffs, and hybrid work norms continue to weigh on demand and suppress new development

U.S. office vacancy hit a record 18.4% in Q2 as new deliveries slowed to a 10-year low – Net absorption was flat YTD, with uneven recovery expected and only 31M SF under construction (Colliers)
Asking rents held steady while Manhattan led leasing gains – Class A vacancy climbed to 21.4%, and development remains constrained as demand recovers slowly from post-pandemic lows (Colliers)

Tech-driven layoffs are accelerating as major employers slash headcount and cite AI as a key driver – Ongoing job cuts are deepening the office market slump and shrinking corporate footprints (GlobeSt)

Hybrid work remains the norm at Am Law 200 firms – Most mandate in-office attendance Tuesday through Thursday, while fully remote arrangements have nearly disappeared (GlobeSt)

U.S. office occupancy dipped to 54.7% last week – New York, Chicago, and Austin hit record highs, but most cities saw slight declines as Friday lows averaged 35.1% (KastleSystems)

Amazon-backed X-energy signed a 120K SF HQ lease in Gaithersburg, MD – The nuclear firm will add 525 jobs and open a new 90K SF test facility in Frederick, expanding to support Amazon data center growth (Bisnow)

Crypto security firm Fireblocks signed a 35K SF lease at NYC’s 5 Penn Plaza, owned by Haymes Investment Company – Deal reflects strong Penn District office demand (CommercialObserver)

U.S. manufacturers’ sentiment turned positive in July as regional Fed surveys showed improving activity – Mood shift coincides with accelerating trade talks and easing pessimism (CoStar)

CREFC Sentiment Index jumped 27.8% to 112.3 in Q2 – CRE finance optimism returns as borrower demand surges and economic outlook stabilizes, reversing last quarter’s sharp decline (ConnectCRE)

CAVA and Sweetgreen both saw ~9% YoY visit growth in Q2 2025 – CAVA’s gains reflect a market-density strategy, while Sweetgreen focused on national expansion, with both models driving traffic but pressuring average visits per store (Placer.ai)

The data center and housing shortages continue to drive earnings, with Microsoft surging on strong cloud demand despite infrastructure constraints and Invitation Homes benefiting from tight rental supply and high occupancy

Microsoft shares jumped 8% afterhours after beat Q4 earnings and revenue expectations thanks to strong Azure and cloud services growth. The tech giant continues to see data center infrastructure shortages but expects supply to improve by year-end as AI infrastructure buildout accelerates (CNBC)

REIT Invitation Homes, the largest US landlord of single-family homes, beat Q2 revenue expectations thanks to high occupancy and strong renewals thanks to the persistent national housing shortage (Reuters)

Insight: Invitation Homes is outperforming in the Sunbelt as high mortgage rates and poor affordability push more households to rent, driving strong renewals and occupancy. While for-sale markets like Phoenix and Austin face pricing pressure, Invitation’s infill suburban portfolio benefits from tight rental supply and steady demand near jobs and schools.

Kushner and National Real Estate secure $255M refinancing for Journal Squared III in NJ’s Jersey City – 58-story, 598-unit apartment tower is the final phase of the complex (CoStar)

Domain Companies secures $205M refinancing from AllianceBernstein for newly completed NYC mixed-use project– Loan retires existing debt and supports ongoing lease-up (CommercialObserver)

Hines secures a $130M Fannie Mae refinance for Dallas, TX luxury apartment tower – Loan underscores sustained institutional demand for high-end Uptown apartments (TheRealDeal)

Miami multifamily owners Black Salmon, LD&D, IGEQ, and Bridge secure $56M Fannie Mae refinance – Loan recapitalizes the arts district apartment tower as part of a joint venture (CoStar)

Acadia Realty acquires two NYC retail properties in Williamsburg from Asana Partners for $50M – Deal brings Acadia’s North Sixth retail total to 10 properties as it pursues a scale-driven curation strategy (CommercialObserver)

Longpoint Realty acquires the 302K SF America’s Gateway Park industrial portfolio in Doral, FL for $82.3M – Terreno Realty sold the six-building, 91% leased complex (CommercialObserver)

Apple buys Kilroy Realty’s 663K SF Mathilda Campus in Sunnyvale, CA for $365M – Deal brings leased offices under Apple ownership, part of nearly $1B in recent Bay Area acquisitions (TheRealDeal)

Fairfield Residential bought five Phoenix, AZ-area apartments for $462M—Deal sets new Arizona record for largest multifamily portfolio sale (TheRealDeal)

Pacific Urban bought a 113-unit NYC Williamsburg rental from Rabsky Group for $82.5M – NYC deal positions the property for market rents after 421a tax break expires (TheRealDeal)

Multifamily captured 65% of CRE fundraising and over half of returns in 2024 – Southeast led with 42% of capital raised and 28% of returns (GlobeSt)

Nuveen raises $785M for its C-PACE Lending Fund III – U.S. commercial real estate vehicle targets sustainable property financing and long-dated, steady returns (IREI)

Hackman Capital is negotiating with Goldman Sachs after failing to repay a $1.1B Radford Studio Center loan that matured in June – Hollywood landlords face mounting pressure from falling production and rising vacancies (Bloomberg)

JBG Smith is pivoting from multifamily to office acquisitions – The REIT sold $452M in apartments in Q2 and bought $42M of distressed office (Bisnow)

Insight: JBG Smith is pivoting from multifamily to pursue a value-add strategy in distressed suburban office, selling apartments at strong valuations to buy discounted assets with redevelopment potential. It is targeting markets like Virginia’s Tysons and National Landing, where it can apply its mixed-use expertise to reposition struggling offices and unlock long-term value.