Hello Brick Brief readers, 

Thank you for your continued support! Today we’re covering CRE liquidity improving, industrial momentum strengthening, and retail fundamentals holding firm.

💰 Capital Markets Gain Momentum
CRE liquidity improved for a fifth straight quarter as investment and lending activity accelerated. Transaction volume rose 16% to $124B, led by a 69% surge in office deals and stronger debt origination that could lift totals near $140B.

🏭 Industrial Strength Returns
Manufacturers and 3PLs reignited demand across logistics and port hubs as industrial absorption doubled to 38.2M sq. ft. in Q3. Developers shifted toward tenant-backed projects, pushing build-to-suit development to 34.5% of the pipeline while speculative starts slowed.

🏬 Retail Resilience Holds Firm
Essential retailers continued expanding despite weaker discretionary spending, keeping availability at 4.9%. Asking rents climbed to $24.92 per sq. ft. as pre-leased projects and retention-focused landlords sustained steady leasing momentum.

30Y Mortgage: 6.17% 

10Y Treasury Yield: 3.95% (-1 bps) 

WSJ Prime Rate: 7.25%

FTSE NAREIT Index: 783.7 (+0.39%) 

30-day SOFR Average: 4.18%

Goldman Sachs says weak U.S. job growth stems from lower immigration, not AI – Monthly labor force gains from immigration fell from 90k to 40k, trimming payroll growth by about 30k in immigrant-heavy sectors, while government hiring and tariff uncertainty added further drag (FT)

U.S. CRE investment volume jumps 16% in Q3 – September’s $42B in sales pushed quarterly transactions to $124B, led by a 69% surge in office deals; JPMorgan expects final totals near $140B as debt and capital markets activity accelerate (Bisnow)

CRE liquidity improves for fifth straight quarter – Madison International Realty’s Liquidity Index rose to 20.6 in Q2 2025 as entry and exit conditions for investors continued to ease across select real estate capital markets (IREI)

Mortgage rates dip amid data blackout – Zillow expects 30-year rates to stay between 6%–7% through 2026 as economic softness and Fed uncertainty persist, giving buyers slightly more leverage but limited affordability relief (Zillow)

Insight: If the Fed is expected to cut rates again in October and at least once in 2026, why does Zillow expect mortgage rates to stay in the 6–7% range even with today’s 6.23% average?

It may be because Zillow believes inflation uncertainty and wider mortgage bond spreads will keep borrowing costs elevated, preventing Fed rate cuts from meaningfully lowering mortgage rates next year. Even if the Fed lowers the policy rate, investors may demand higher yields on mortgage-backed securities to offset inflation risk and tighter financial conditions, keeping mortgage rates from falling in step with the federal funds rate / SOFR. 

Refinance demand surges 81% YoY as mortgage rates fall to 6.37% – MBA data shows refinances up 4% week over week while purchase applications slipped 5% amid high prices and buyer caution (CNBC)

U.S. home sellers made a 49.9% profit on average in Q3 – Margins held near 50% as the median sale price rose to $370K, up 3.4% YoY, while typical seller profits reached $123K despite cooling from 2022 peaks (MortgageOrb)

Home-purchase cancellations hit 15% in September – 53K deals fell through as buyers back out over high costs, inspections, and job fears, with the highest ghosting rates in Tampa, San Antonio, and Orlando (Redfin)

2027 multifamily rent growth forecast trimmed to 2–3% – Yardi cites rising new supply, slower household formation, and steady mortgage rates keeping turnover low (ConnectCRE)

Generational shifts drive rental demand – The average renter age is now 31 versus 38 for first-time homebuyers, extending rental tenures and boosting demand for flexible housing (RealPage)

Only nine major multifamily markets sustained rent growth for five straight years – Virginia Beach, Baltimore, Cincinnati, Columbus, and Kansas City led with consistent annual gains (RealPage)

Austin TX leads nation as top buyer’s market – Sellers outnumber buyers 130% as TX and FL dominate buyer-heavy metros, while just five seller’s markets remain (Redfin)

Stripe expands by 139K SF to 286K SF at 28 Liberty Street in New York, NY – The fintech firm signed a direct lease with Fosun International alongside its existing sublease (CommercialObserver)

Verra Mobility signs 57K-SF sublease at 55 Water Street in New York, NY – The transportation tech firm will establish its Northeast HQ under a 10-year deal subleased from the Health Insurance Plan of Greater New York (CommercialObserver)

Banc of California leases 40K SF at 865 South Figueroa Street in Los Angeles, CA – The bank signed an 11-year deal with Manulife U.S. REIT and secured naming rights for the 35-story downtown tower (CommercialObserver)

Industrial demand is stabilizing as renewed leasing and expansion by manufacturers and 3PLs signal confidence across key logistics and port markets.

Industrial leasing tops expectations in key markets – Modern facilities drove demand with manufacturers and 3PLs leading gains, helping sustain a 5.2% YoY increase in 3PL leasing and renewed capital market activity (CushmanWakefield)

Build-to-suit development rises to 34.5% of pipeline – Speculative construction slowed as developers focused on tenant-backed projects amid higher vacancy and tighter financing (CushmanWakefield)
Port markets rebound after 90-day tariff cut – The temporary U.S.-China deal boosted import volumes and leasing in port-proximate hubs, highlighting how trade policy shifts impact industrial demand (CushmanWakefield)

U.S. industrial leasing hits 146.2M sq. ft. in Q3 – Net absorption doubled to 38.2M sq. ft. and vacancy held at 7.6%, marking the strongest quarter since early 2024 (JLL)

Development pipeline climbs to 246.8M sq. ft. – The first increase in 12 quarters signals renewed confidence despite trade and economic headwinds (JLL)

Retail fundamentals remain resilient as steady absorption, rising rents, and pre-leased construction offset weaker discretionary spending and selective store closures

Retail availability holds at 4.9% in Q3 – Net absorption turned positive at 1.8M sq. ft. as new store openings and expansions outpaced closures (CBRE)
Construction activity rose from 3.9M sq. ft. in Q2 to 5.1M sq. ft. in Q3 – Most completions stemmed from projects launched before rate hikes with strong pre-leasing commitments (CBRE)
Asking rents climbed 0.4% QoQ to $24.92 per sq. ft. – Landlords prioritized retention and occupancy as necessity-based retailers sustained leasing momentum (CBRE)

Early-October retail promos show mixed results – Walmart, Target, and Kohl’s saw lower traffic while Best Buy visits rose 2.2% as e-commerce activity surged with hybrid holiday shopping demand (Placer.ai)

Starbucks slows U.S. expansion as sales weaken – The chain closed hundreds of cafés and canceled new projects amid higher construction costs, sparking tensions with developers (FT)

Apollo says AI power gap won’t be closed in our lifetime – The firm warns data center energy demand is outpacing supply and is investing $60B in energy transition and infrastructure to expand total generation capacity (Bloomberg)

Hilton beat Q3 profit expectations with net income up 22% YoY to $421M but cut its 2025 room revenue growth forecast amid softer U.S. travel demand, as RevPAR fell 1.1% and occupancy dipped 0.5 points despite strong luxury performance (Reuters, CoStar) 

Insight: Hilton is able to reduce the impact of cyclicality in travel and hospitality demand through its asset-light, franchise-heavy model. Because most of its hotels are franchised or managed rather than owned by the parent Hilton company, it generates stable fee income from contracts rather than depending on fluctuating room revenues.

Jamestown, Taconic Partners, and Nuveen secure $199M refinancing for Ridge Hill in Yonkers, NY – Blackstone provided the loan for the 1.2M-SF retail center, which has completed 679K SF of new leasing since 2022 (CommercialObserver)

Slate Property Group and Avenue Realty Capital secure $64M refinancing for The Welz in Brooklyn, NY – Starwood Capital provided the three-year loan for the 162-unit multifamily building that opened in early 2025 and is already 96% leased (CommercialObserver)

Orlando, FL retirement hub The Villages issues $130M muni bond – The 57K-acre community plans 2,800 new homes through a high-yield, property fee–backed deal funding roads, golf courses, and recreation centers (Bloomberg)

National Development acquires Watertown Mall in Watertown, MA for $100M – Alexandria Real Estate sold the 261K-SF property, ending its planned life science conversion (TheRealDeal)

Insight: As I’ve discussed, AI-based drug development and simulations are a new headwind for life science and wet-lab space. Alexandria is reducing its pipeline and exiting projects like the planned Watertown Mall conversion as it likely sees little near-term recovery in lab demand.

Rockwood Capital and Midtown Equities list 1 Broadway office in New York, NY for $180M – The 230K-SF FiDi property is 92% leased to FiServ, which invested $65M in upgrades after the partners bought and renovated the building for $140M in 2018 (TheRealDeal)

Closer Properties acquires five Upper East Side properties in New York for $63M – W Financial sold the portfolio, which Closer will redevelop into a 100K-SF luxury condominium project breaking ground in 2026 (CommercialObserver)

Western Alliance finds no new loan irregularities – Bank reverified $2B in notes over $10M and confirmed liens after First Brands and Cantor fraud cases, saying asset quality remains stable and exposure well-collateralized (Bloomberg)

Juniper Square launches AI CRM for investor relations – The platform is purpose-built for private markets fundraising and replaces outdated legacy systems used by most GPs (IREI)