Key Insights

Tariff Volatility Disrupts Markets 

The Trump administration temporarily suspended tariffs on Mexico and Canada, providing relief for USMCA-compliant goods, but uncertainty remains, especially for homebuilders. Canadian lumber imports face ongoing supply chain risks, while major retailers like Costco and Kroger brace for tighter margins and potential price pressures

Life Sciences Faces Slowdown 

Boston’s life sciences availability rose to 26.9%, while NYC leasing dropped 60% YoY, reflecting weak demand and oversupply. With new developments outpacing absorption, the life sciences sector faces a prolonged correction as supply outstrips demand

Retailers Restructure Amid Market Shifts 

Walgreens is going private in a $10B deal, while 7-Eleven’s parent plans a US IPO to fend off a takeover bid. The moves reflect changing retail dynamics as companies adjust to shifting consumer behavior and cost pressures

Quick Markets

30Y Mortgage: 6.79% (+7 bps)
10Y Treasury Yield: 4.28%
FTSE NAREIT Index: 786.99 (-2.44%)
30-day SOFR Average: 4.35%

Market Pulse

Tariff uncertainty and surging job cuts may weaken employment and economic data, increasing pressure on the Fed to cut rates sooner

Trump suspends tariffs on Mexico and Canada – Temporary exemptions cover USMCA-compliant goods (CNBC) 

U.S. employers announced 172K job cuts in February – up 245% MoM and the highest February total since 2009, driven by DOGE actions and retail struggles (Challenger Report)

Policy & Industry Shifts

Declining office landlord concessions, along with a 49% YoY rise in Manhattan office leasing, signal growing momentum for a potential office market rebound

Office landlord concessions fell in 2024 – An additional sign of a turnaround for the office market (Bisnow)

Trump admin plans to close dozens of HUD field offices – Over 30 states could lose local mortgage underwriting staff (Bisnow)

Housing & Real Estate Trends

Rising apartment rents and increased single-family construction indicate strengthening housing demand despite high mortgage rates, but ongoing lumber tariffs threaten to constrain homebuilding, potentially driving up costs and worsening affordability

$1.6B residential partnership expansion – Brookfield Residential and North America Sekisui House grow portfolio to $1.6B with investment in five Brookfield master-planned communities (Bisnow)

March apartment rent growth turns positive – End of declining rents in sight (GlobeSt)

Single-family home building rises despite high mortgage rates – Multifamily construction declines in high-density areas (NAHB)

Tariff battles disrupt lumber supply chain for US homebuilders – Canadian wood imports face uncertainty as Trump administration fluctuates on trade policies (Bloomberg)

FHA extends foreclosure, eviction moratorium for LA wildfire victims – HUD Secretary Scott Turner announces extension during visit (HW)

Earnings

Retailers are preparing for inflation and tariff-related cost pressures, which could impact pricing strategies and consumer spending this year

Costco missed Q2 earnings estimates but exceeded revenue expectations. The retailer anticipates tighter grocery margins but aims to limit price hikes for consumers. Despite economic conditions, consumer behavior remains stable, with shoppers continuing to be selective in their purchases (CNBC) 

Kroger beat Q4 earnings expectations and forecast better-than-expected sales. The grocer expects a slight increase in inflation this year but does not anticipate a major impact from tariffs (Bloomberg)

Financings

$133M Office Refi – Deutsche Bank, Urban Standard lend $133M to refinance The Link office in Stamford, Connecticut (CommercialObserver)

$65M Residential Construction Loan – Bravo Property Trust will lend $65M to Myneni Properties to build a 15-story residential tower in Jersey City (CommercialObserver)

M&A

7-Eleven’s IPO defense and Walgreens’ take-private deal reveal rising consolidation pressures, shifting consumer trends, and private equity’s growing role in struggling retail giants 

7-Eleven’s US IPO – Japanese parent plans to spin off 13,000-store US business to block a $47B takeover bid from Canadian rival Couche-Tard (NYT)

Walgreens’ $10B take-private deal – PE firm Sycamore Partners will take the struggling drugstore chain private for $10B, a steep discount from its $90B peak (Bloomberg)

A&E Seeking $200M for Upper West Side Multi-Campus – Douglas Eisenberg's Firm Looking to Sell Holland Complex at Loss After 2018 Purchase for $287M

Penzance buys two Virginia industrial parks for $55M – Properties in Manassas to support Northern Virginia’s data center growth (CommercialObserver)

Onward Investors buys San Francisco Office for $54M – purchases 225K SF building from Lionstone (Bisnow)

Chess Builders buys NYC building for $50M – Upper East Side property is slated for demolition and 99-unit apartment development (CommercialObserver)

Institutional Fundraising

$750M workforce housing fund- Hillpointe closed its fourth fund to develop workforce housing in the Sun Belt (Multihousing)

Distress Watch

$725M San Francisco hotel debt sold – Parc 55 & Hilton Union Square face 40.5% occupancy, down from 90% at loan origination

$505M loan extension – Brookfield Properties secures extension through late 2026 for Natick Mall loan, originally due last November (Bisnow)

Brookfield nears deal for 101 Mission St. – acquiring non-performing $93M loan for San Francisco office tower from ING Group (TheRealDeal)

Market Watch

Rising vacancies and slowing leasing in Boston and NYC’s life sciences markets signal oversupply, with new construction outpacing demand, prolonging the sector’s path to equilibrium despite a rebound in VC funding 

Manhattan office leasing up 53% vs. 5-year avg in February – YTD leasing +49% YoY, availability & sublease rates down (CBRE)

Boston life sciences market hits 26.9% availability, up 10 points YoY – new construction and weak demand signal years to equilibrium (Colliers)

NYC life science market leasing slows 60% in 2024 – rent up 9% YoY and VC funding rebounds to $1.83B (CBRE)