The Brick Breakdown

Hello Brick Brief readers, 

In recent news, we’re seeing trade uncertainty raising the trade deficit, a continued collapse in consumer sentiment driven by inflation and tariffs, and mixed corporate earnings as Hilton lowers its travel outlook while Easterly Government Properties shows resilience amid federal lease restructuring.

📦 Trade uncertainty rattles markets and expands deficit
The U.S. trade deficit hit a record $162B in March as companies stockpiled imports ahead of looming tariffs, weighing heavily on Q1 GDP. Trade war uncertainty has intensified, with major firms like GM and JetBlue withdrawing forecasts and warning that shifting policies are disrupting operations and delaying investment.

📉 Consumer sentiment collapses to 13-year low
Consumer confidence plunged in April as inflation, tariffs, and economic uncertainty crushed expectations, marking the worst sentiment reading since 2011. With job openings down and spending slowing, the risk of a demand-led slowdown is growing as households brace for mid-May supply shocks.

🏨 Earnings diverge as tariffs pressure hospitality, benefit government REITs
Hilton beat Q1 expectations but lowered its 2025 revenue forecast as travel softens and consumer spending wanes, with RevPAR growth now projected at just 2%. Meanwhile, Easterly Government Properties raised its full-year outlook, showing that lease terminations tied to DOGE have not impacted its portfolio as severely as feared. The REIT's stable government tenant base continues to provide defensive performance amid broader market and policy volatility.

This Week in Real Estate: Key Events & Data

Quick Markets

30Y Mortgage: 6.81% (-3 bps)
10Y Treasury Yield: 4.16% (-5 bps)
FTSE NAREIT Index: 756.68 (+0.40%)
30-day SOFR Average: 4.35%

Market Pulse

Tariff-driven uncertainty is weighing heavily on the U.S. economy, driving a record trade deficit, collapsing consumer confidence, weaker labor demand, and growing corporate reluctance to issue forecasts

U.S. trade deficit hits record $162B in March – Surge in imports due to stockpiling ahead of tariffs adds to trade drag on Q1 GDP (Reuters)

US consumer confidence drops to 13-year low in April – Expectations plummet amid economic uncertainty, high inflation, and tariffs (ConferenceBoard)

Trade war uncertainty prompts companies like GM, JetBlue, and Volvo to withdraw forecasts – 80% of executives are concerned about tariffs and policy shifts (WSJ)

US job openings fall to 7.19M in March – Indicates weaker labor demand amid tariff uncertainty, with vacancies dropping to lowest level since September (Bloomberg)

Policy & Industry Shifts

Real estate groups are pushing to preserve the carried interest tax break, arguing its repeal could undercut affordable housing investment, while Washington State's new 10% rent cap marks a growing legislative shift toward price controls in high-cost markets

Real estate lobbies to keep carried interest tax break – Advocates warn its loss would harm affordable housing and economic growth (Bloomberg)

Washington State limits rent increases to 10% – Lawmakers approve statewide rent cap to address housing affordability concerns (NYT)

Residential

Home price growth is slowing, but a widening gap between asking and sale prices suggests sellers are overestimating demand, signaling a potential correction as affordability challenges persist

S&P CoreLogic Case-Shiller Index records 3.9% annual gain in February – Housing price growth slows slightly from January, with New York posting the highest annual gain (S&PGlobal)

Typical home seller asks $39K more than buyer is willing to pay – Median asking price of $469,729 is 9% higher than median sale price of $431,057, marking the largest gap since 2020 (Redfin)

Industrial

Falling import volumes and a sharp pullback from Amazon are weakening warehouse demand and triggering mass layoffs, while targeted tariff relief for automakers offers only limited sector support

UPS plans to close 73 facilities and lay off 20,000 workers – Move stems from decreased volumes from Amazon, following a 50% reduction in its parcel business with the e-commerce giant (Bisnow)

Cargo slowdown threatens warehouse demand – U.S. retail inventory shortages expected as shipping volumes from China fall 30%-60%, impacting logistics and employment (GlobeSt)

Trump to ease auto import tariffs – Executive order reduces stacking of tariffs, offering relief to U.S. automakers, with no additional duties on vehicles or parts (FreightWaves)

Market Mix

Domestic migration cooled in 2024 – Idaho, South Carolina, and North Dakota saw strong inflows, while outflows from California, New York, and Illinois slowed (Placer.ai)

CRE lending rebounds to $498B in 2024 – Multifamily sector leads with $326B in loans, driven by demand for refinancing and new capital amidst $957B in mortgage maturities (GlobeSt)

Sales of small businesses take 15% longer to close – Despite tariff concerns and global uncertainty, the median sales price increased 4% YoY to $349K, with manufacturing businesses seeing a 54% price rise (CoStar)

Commanders seal $3.7B stadium deal – $2.7B private investment, $1B public funding for mixed-use development with 65,000-seat stadium and 5K–6K housing units (TheRealDeal)

Earnings & Real Estate Impact

Hospitality and retail earnings reflect growing pressure from tariffs and softening consumer demand, with Hilton and Starbucks tempering future expectations, while Easterly's upward revision highlights resilience in government-leased real estate despite much-feared DOGE-related lease terminations 

Hilton beat Q1 earnings estimates but revised its 2025 revenue growth forecast downward to  2% growth in revenue per available room (RevPAR) as U.S. consumer spending and travel weaken amid economic uncertainty and tariffs (Reuters)

Starbucks missed Q2 earnings expectations and reported 50% drop in net income, despite a 2% rise in revenue to $8.8B, as costs from a turnaround effort led by CEO Brian Niccol mounted. The company is shifting focus from technology investments to increasing labor in its stores to reduce wait times and improve customer experience, while facing challenges from rising coffee bean prices due to tariffs (FT)

Easterly Government Properties raised its full-year profit outlook, citing cost-saving opportunities from Elon Musk’s DOGE, though its shares fell 4.5% due to a 32% year-to-date decline (Bloomberg)

Financings

Loans

Hudson Companies, BRP secure $343M for NYC Bronx housing – La Central adds 420 affordable units, including 63 supportive housing apartments (CommercialObserver)

MG Developer secures $105M construction loan for multifamily project in Miami-Dade – Metro Parc South is a 347-unit transit-oriented development in Hialeah, near Tri-Rail and Metrorail stations (CommercialObserver)

Seagis Property Group secures $96.5M loan for Northern New Jersey industrial portfolio – Six fully leased properties totaling 773K square feet in Meadowlands and Port of Newark/Elizabeth submarkets (REBusinessOnline)

Proptech & Innovation

Luxury brands use data for real estate decisions – Data analytics drive lease flexibility and larger concessions as competition increases (GlobeSt)