Hello Brick Brief readers, 

Happy Monday! I’m back home, rested up, and ready to lock in this week. Recent news shows consumer inflation expectations jumping in August, Buffett building a $1B stake in homebuilders, and bond issuances funding data center and premium mall expansion.

📉 Inflation Expectations Rise on Tariffs
Consumer sentiment dropped in August as one-year inflation expectations jumped to 4.9% and long-run views rose to 3.9% on tariff concerns. The sharp 0.9% July PPI gain signals businesses are starting to pass costs through, raising (significant) risk that the Fed delays rate cuts in September. 

🏠 Buffett Builds Builder Positions
Berkshire Hathaway expanded its Lennar stake to $800M while also adding exposure to D.R. Horton, signaling confidence in the sector despite record inventory and heavy incentives. Buffett is betting the builders’ scale and balance sheets will carry them through the downturn and position them to gain share once rates fall.

💾 Bonds Fund Data and Premium Malls
Blackstone’s QTS raised $1.65B in bonds to fuel U.S. data center expansion as AI demand strains capacity. Simon Property Group issued $1.5B of notes to refinance debt, which shows that lenders remain willing to support premium malls with strong occupancy and revenues.

30Y Mortgage: 6.56% (+3 bps) 

10Y Treasury Yield: 4.31% (+7 bps)

WSJ Prime Rate: 7.50%

FTSE NAREIT Index: 757.24 (+0.52%) 

30-day SOFR Average: 4.34%

Consumer sentiment fell in August as inflation expectations rose, and while tariffs haven’t yet driven a major price spike, CBRE expects only two Fed cuts in 2025 with yields above 4%.

Inflation expectations jump in August – One-year outlook rose to 4.9% from 3.4% and the five-to-ten-year view climbed to 3.9% from 3.1% on tariff concerns (Bloomberg)

Tariffs haven’t spiked inflation as feared – Effective rates are lower than headline figures because many imports are duty-free or shifted to low-tariff sources, though economists warn future hikes may still raise prices (WSJ)

CBRE projects two Fed cuts in 2025 – The 10-year Treasury yield is expected to stay above 4% (CBRE)

Insight: Markets see only a 17% chance the Fed holds rates in September, odds that may still be too low. Consumer inflation expectations have surged and July’s 0.9% PPI shows that tariffs are propagating through the supply chain. If August inflation data is even uglier, the Fed will likely choose to wait again. The Fed risks untethering long-term consumer inflation expectations if they cut too early.

Warren Buffett’s Berkshire Hathaway has made a major move into national homebuilder Lennar even as they face rising inventory and persistent affordability pressure.

• Berkshire bought more than 7 million Lennar shares in the first half of 2025 for nearly $800 million. This buy adds to a small 2023 stake that hinted at early interest in the cycle.
• The 2023 stake looked more like a cautious probe as affordability tightened, while the latest build-up shows conviction that Lennar can outlast the downturn.
• Lennar’s unsold completed inventory is the highest since 2009. Builders in the Sun Belt and Florida are using mortgage buydowns to keep sales moving as prices soften.
• Incentives reached 13.3% of the final sales price in Q2, the highest since 2009. That shows reliance on buydowns reveals how deep the affordability squeeze is.
• Lennar holds a backlog of 15,538 homes valued at $6.5 billion. Its scale, strong balance sheet, and land-light strategy give it resilience in a slower market.
• Mortgage rates remain above 6% and demand is soft due to affordability challenges. Buffett looks positioned for a recovery once rates ease and affordability improves.
• The larger stake signals confidence from Buffett that Lennar can weather near-term headwinds and capture demand when the market turns.

Takeaway: Buffett tested the waters in 2023 and has now doubled down. He’s betting Lennar’s scale, balance sheet, and backlog will help the homebuilder gain market share and rebound when lower rates unlock demand.

Mortgage rates fell to 6.58% and cut the typical monthly payment to $2,631, offering buyers relief even as affordability pressures drive more multigenerational households.

Mortgage rates fall to 6.58%, the lowest of 2025 – Lower bond yields and rising inventory offer buyers some relief, though affordability challenges persist (WSJ)

Typical U.S. homebuyer payment drops to $2,631, lowest in seven months – Mortgage rates at 10-month low boost purchasing power, with September Fed cut already priced in (Redfin)

Multigenerational households surge in U.S. – Affordability pressures and caregiving needs drive demand for homes with in-law suites and flexible floor plans (WSJ)

Berkshire Hathaway invests $800M in Miami-based Lennar – Warren Buffett’s firm acquires over 7M shares in homebuilder, boosting stock price nearly 2% (TheRealDeal)

U.S. apartment demand hit record highs in Q2 with absorption at 167% of supply, which pushed July rents up 1.7% YoY while permits fell 23% from the pandemic boom.

U.S. apartment rents rise 1.7% YoY in July, biggest jump in 2.5 years – Shrinking supply shifts leverage to landlords, with San Jose and Chicago leading gains while Austin and Jacksonville see declines (Redfin)

U.S. multifamily rent growth slows to 1.1% in July – Midwest and Northeast lead gains while San Francisco tops with 5.3% and Austin sinks with a 4.3% drop (Apartments.com)

U.S. multifamily permits drop 23% since pandemic boom – High borrowing costs and falling rents cool construction, though Sun Belt metros like North Port and Austin remain leaders (Redfin)

Apartment demand hits record highs in 15 U.S. markets – Absorption surged to 167% of supply in Q2 2025, led by Dallas, Atlanta, Phoenix and other Sun Belt metros (GlobeSt)

Los Angeles office recovery lags San Francisco – LA visits are 46.6% below pre-pandemic as out-of-market commuters keep declining and both visits and visitors fall, while SF stabilizes (Placer.ai)

Century City bucks LA’s slowdown – Premium amenities and affluent young professionals sustain stronger attendance and leasing, making it the standout submarket amid LA’s broader struggles (Placer.ai)

Apple, Nvidia and other tech giants ramp up Bay Area office purchases – Owner-user deals surge as firms lock in discounted R&D space to secure long-term control amid AI boom and supply chain risks (Bisnow)

Insight: San Francisco’s rebound is powered by tech tenants returning to top-tier space, while Los Angeles lags outside of Century City, where premium towers and lifestyle amenities still draw steady demand. The split highlights how the flight to quality is most extreme in office, yet the same dynamic is reshaping retail and industrial as capital and tenants cluster in the best assets.

Troon signs 69K-SF office lease at Inisio Kierland II in Phoenix, AZ – Golf hospitality firm relocates HQ to top floor of Vero Capital’s $29M-renovated complex (TheRealDeal)

Net-lease investment volume hits $46.7B for year ending Q2 2025, up 27% – Retail rises 9% YoY while industrial falls 6% and office slips 2% (CBRE)

U.S. hotel occupancy plateaus post-COVID – STR says recovery peaked faster than after Great Recession but weekday business travel remains 4.1% below pre-pandemic levels (CoStar)

U.S. hotel RevPAR falls 1.6% in early August – Top 25 markets drag on results despite San Francisco gains, while global growth stays positive excluding France’s Olympic comp (STR)

Blackstone’s QTS secures $1.65B for U.S. data center expansion – Bonds with 5,7, and 10-year maturities will fund AI-driven growth (Bloomberg)

Simon Property Group issues $1.5B of senior notes – Proceeds will repay $1.1B in upcoming debt maturities as retail occupancy and revenues climb (Bisnow)

Goldman Sachs and TPG provide $353M loan on Fundrise’s 12-building, 3.2M-SF industrial portfolio – Properties span high-growth logistics markets with diverse tenant base (ConnectCRE)

Ares Management provides $250M refinancing for industrial portfolio in TX, OH and FL – AEW Capital secures five-year floating-rate loan on seven Class A warehouse and distribution assets (CommercialObserver)

Bravo Property Trust provides $170M construction loan for Miami, FL condo tower – Financing supports Hazelton Capital’s 40-story Edgewater project (CommercialObserver)

Roers secures $91M construction financing for two multifamily projects in Naples, FL – Kayne Anderson provides $78.5M senior loan and SteepRock Capital adds $12.5M mezz for 309-unit Vintana at Vanderbilt and The Karlyn (TheRealDeal)

GoldenTree lends $85M for Miami Beach, FL condo-hotel – Vlad Doronin and Len Blavatnik advance Aman-branded luxury project (CommercialObserver)

Centennial Bank provides $73M construction loan for Winter Garden, FL multifamily – Unicorp National Developments to build 323-unit resort-style community, Elysian (CommercialObserver)

Beitel Group lands $155M refinancing for 405-unit multifamily complex in Mott Haven, Bronx, NY – Dwight Mortgage Trust provides bridge loan to retire $135M construction debt on 261 & 315 Grand Concourse rentals (TheRealDeal)

Bridge Investment Group provides $130M refinancing for 500 Station Apartments in Aurora, IL – Goel Investments recapitalizes 417-unit complex; loan rolled into $915M CLO (TheRealDeal)

Northmarq provides $109M refinancing for multifamily in Anaheim and Azusa, CA – Advanced Real Estate secures 10-year fixed-rate loans on three suburban apartment communities at 70% LTV (TheRealDeal)

Cain International seeks $550M bond for One Beverly Hills in Los Angeles, CA – City weighs Mello-Roos district for $5B project with Aman resort, condo towers and Beverly Hilton upgrade (TheRealDeal)

J.P. Morgan and Citigroup provide $130M CMBS acquisition loan for Manhattan, NY office – Raghsa Real Estate buys from Vornado for $205M (CommercialObserver)

RXR acquires 590 Madison Ave for $1.08B – Purchase of the 1M sq. ft., 42-story Midtown Manhattan trophy office tower from STRS Ohio marks NYC’s largest non-user office acquisition since 2018 (IREI)

Presidio Bay acquires 17-acre office campus in Menlo Park, CA for $137M – Developer plans mixed-use redevelopment of former U.S. Geological Survey site with housing and commercial space (TheRealDeal)

Naftali Group buys $800M luxury Manhattan apartment building from Winter Organization and Spitzer Enterprises – JPMorgan and GoldenTree provide $675M loan for the acquisition (Bloomberg)

Favo Capital acquires 277-unit apartment tower in Hollywood, FL for $190M – All-stock deal with assumption of liabilities gives seller GCF Development equity stake in 1818 Park property (TheRealDeal)

Nuveen acquires 254-unit multifamily in La Grange, IL for $88M – Investment manager buys village’s only Class A rental property from JVM Realty at $346K per unit (TheRealDeal)

Abacus Capital acquires 259-unit multifamily in Concord, CA for $98M – Buyer picks up Park Central Apartments at discount from Sequoia Equities’ 2018 purchase price (TheRealDeal)

Liberty Mutual and RXR launch $1B U.S. apartment credit venture – Liberty-RXR partnership to target senior loans, construction financing, and preferred equity (Bloomberg)

Office loan distress totals $122B in Q2 2025 – Savills says lender-facilitated sales and foreclosures likely as $76.4B more flagged as potentially distressed (GlobeSt)

Worldwide Plaza’s appraisal plunges $1.4B to $345M – Sponsors SL Green and RXR face heavy CMBS debt as vacancies mount and equity is wiped out (Bisnow)

AURC III forecloses on 324K-SF Waterfront Market and garage in Tacoma, WA for $91M – EB-5 lender consolidates ownership after Point Ruston Phase II defaulted on $66M loan plus fees (TheRealDeal)

Kennedy Wilson faces default on $60M loan tied to Novato, CA office campus – 411K-SF Hamilton Landing falls to 55% occupancy after major tenant exits; property listed for sale (TheRealDeal)