Author: Edward Brawer

This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Tuesday, October 21, 2025. Here’s what we’re covering today: First, the Sunbelt apartment boom hits a speed bump – a flood of new supply is cooling rent growth in Texas hotspots. Next, Florida’s real estate rally is pumping the brakes as construction catches up to demand. And finally, the industrial sector’s red-hot streak is easing nationwide, but key Midwest markets are holding strong.

Texas Multifamily Supply Wave: Let’s start in Texas, where a wave of new apartments is giving renters more bargaining power. Markets like Austin and Dallas–Fort Worth have been inundated with new units, and it’s showing in the numbers. Austin’s rents are down roughly 5% from a year ago after years of rapid rises. In Dallas–Fort Worth, effective rents have dipped about 1% year-over-year – marking the eighth straight quarter of slight declines – and vacancies hover near 12%. Landlords are competing hard: about 37% of rentals nationwide now offer concessions (like a free month of rent), an all-time high, and Texas is a prime example of this tenant-friendly turn. The good news? Demand in North Texas is still solid. In the last quarter, DFW actually leased more apartments than it opened (around 8,300 units absorbed vs 7,100 delivered), a sign that renters are steadily filling new buildings. Developers are also hitting the brakes: Dallas–Fort Worth’s construction pipeline has fallen to its lowest level in a decade (approximately 30,000 units underway, down sharply from recent years). With building finally slowing, the supply-demand gap in Texas may start to narrow. And long-term fundamentals remain strong – Texas continues to lead U.S. population growth (12 of the 15 fastest-growing cities are in Texas). In short, the Texas multifamily market is soft in the short term due to oversupply, but a burgeoning population and slowing construction set the stage for eventual rent recovery. Investors are taking note of the pivot: deals are inching back as prices adjust and cap rates rise into the mid-5% range, reflecting a more balanced outlook ahead.

Florida Market Moderation: Turning to Florida’s markets – after a prolonged rally, we’re seeing a noticeable cooldown in the Sunshine State’s commercial real estate. Multifamily had been on fire in 2021-2022, but now rent growth has essentially leveled off in many Florida metros. In South Florida (Miami–Fort Lauderdale–West Palm), rent gains are barely above zero (roughly +0.4% year-on-year in Q3) and average occupancy has dipped to about 94.5% from its peak – still solid, but off a bit as thousands of new units come online. In fact, South Florida delivered nearly 10,000 apartments over the past year (one of the largest pipelines in the nation, at over 7% of existing inventory). Yet demand has kept pace with supply so far – the region absorbed about 9,000 units in that time – which is why rents are holding flat instead of falling. Central and North Florida are feeling more supply pressure: Orlando’s apartment rents have ticked down around 1% from last year and Jacksonville’s occupancy has slipped to roughly 91% as new complexes open their doors. The cooling is partly due to an influx of inventory and a slight softening in the local economy (for example, Orlando’s tourism-driven rental demand isn’t as torrid as it was). Even so, Florida continues to benefit from in-migration and job growth, which provides a floor under housing demand. Investors remain interested in Florida assets, but they’re becoming more selective. Higher insurance costs and property taxes are squeezing operating budgets, and buyers are pricing in those risks alongside the recent rent plateau. Capitalization rates in many Florida markets have moved up from their record lows, meaning buyers can finally get a bit more yield. Overall, Florida’s boom is tempering into a more sustainable pace: developers are more cautious with new projects, and the market is transitioning from turbocharged growth to a healthier equilibrium. That’s a welcome relief for renters and a signal to investors that the froth is coming out of the market, even as the long-term growth story stays intact.

Midwest Resilience & Industrial Update: Our final story is about stability in the Midwest – and a check-in on the industrial sector. While coastal and Sunbelt markets have been riding a rollercoaster, the Midwest has been quietly steady. In the multifamily arena, many Midwest cities avoided the oversupply trap and are now seeing modest rent gains. Take Chicago, for example: apartment rents there are up about 5–6% year-over-year, one of the highest growth rates in the country at the moment, thanks to limited new construction and the return of urban renters. Cleveland, Cincinnati, Kansas City – these types of markets are also eking out 2–4% annual rent growth and maintaining healthy occupancy in the mid-90s. With fewer new units to compete with, Midwest landlords haven’t had to slash rents or offer outsized concessions the way some Sunbelt owners have.

It’s a similar story of relative resilience on the industrial side. The industrial real estate sector nationally is coming off the boil after a red-hot run. Warehouse vacancy nationwide has crept up to about 7.5% (a high not seen in roughly a decade) as a glut of logistics facilities delivered over the past year. Rent growth for industrial space has flattened in many coastal hubs, and tenants have become a bit more cautious amid economic headwinds. But in the Midwest, fundamentals remain notably strong. Chicago’s industrial market, for instance, never succumbed to overbuilding during the pandemic e-commerce boom, and it’s paying dividends now. Chicago’s industrial vacancy was only about 6.3% in mid-2025 – well below the U.S. average – and leasing activity there has held near pre-pandemic norms. Other Midwestern distribution hubs like Columbus and Indianapolis also report vacancies in the mid-single-digits, as steady demand for regional distribution keeps space occupied. In fact, industry analysts predict the Midwest will maintain the lowest industrial vacancy rate of any region through the end of this year, peaking around just 5% availability before tightening again. Rent growth in Midwestern warehouse markets is expected to outpace most coastal markets as well (the Southeast is the only region forecast to slightly beat the Midwest on industrial rent gains over the next couple of years). Investors are increasingly appreciating this stability: we’re hearing that buyer interest in Midwest industrial properties is on the rise, attracted by solid fundamentals and cap rates that are often 50–100 basis points higher than coastal equivalents. In Chicago, brokers say industrial deal volume is picking up momentum as interest rates show signs of easing – local players describe an “optimistic” mood heading into 2026. Developers, for their part, are being selective with new projects in the Midwest. Construction levels have pulled back about 20–30% from last year’s peak, allowing demand to catch up with supply. The bottom line: the industrial sector’s feverish expansion is cooling off, but the Midwest is emerging as a relative safe haven with balanced growth. As long as consumer spending and supply chains remain stable, these heartland markets are poised to keep performing well even in a slower economy.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael — until next time!

This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Monday, October 20, 2025, here’s what we’re covering today:

• The Fed’s first rate cut lifts real estate sentiment even as economic signals stay mixed.
• The industrial sector stays resilient, with strong demand and limited new supply keeping vacancies low.
• Multifamily faces cooling rents and rising loan stress, but investors see opportunity in apartments.

The Federal Reserve reversed course in September with a quarter-point rate cut – its first in years. That small dose of relief rippled through the commercial real estate world. A deal activity index hit its highest level of the year last month as investors sensed financing conditions might finally improve. Lower borrowing costs are gradually reviving property sales and lending, even though credit is still much tighter than a few years ago.

Yet the economic backdrop is far from booming, and businesses remain cautious amid high costs. The Fed’s latest Beige Book report noted overall growth was flat, though it saw slight upticks in real estate activity across many regions. Industrial demand is steady and apartments are mostly full as rent gains slow, but offices remain a weak spot. High interest rates and construction costs continue to challenge deals everywhere – but with policy finally tilting toward ease, there’s a bit more optimism heading into 2026.

In industrial real estate, demand is picking up again. In the third quarter, U.S. warehouse absorption jumped 30% from the prior quarter to around 45 million square feet, led by major distribution hubs. Even markets that were sluggish earlier in the year turned positive as companies expanded and updated their supply chains.

On the supply side, developers have pulled back. Only about 64 million square feet of new space delivered last quarter – the slowest pace in eight years – keeping the national vacancy rate around 7%. Demand and supply are roughly in balance now, preventing any glut. Warehouse rents are still inching up, roughly 1–2% higher than a year ago. Most markets saw rent growth, though a few coastal areas gave back some of last year’s gains. Big occupiers are favoring new, state-of-the-art warehouses and dropping older facilities. With vacancies low and few projects in the pipeline, industrial properties should continue to perform well.

Finally, the multifamily sector is at a turning point. After years of rapid rent growth, apartment rents have flattened in many cities amid a wave of new supply. Oversupply in some markets and stretched renter budgets mean landlords have less pricing power now. Still, demand is solid: nationwide occupancy is about 92%, and with mortgage rates high, many would-be buyers remain renters – keeping apartments relatively full even as new units come online.

Higher expenses and financing costs are squeezing some apartment owners. Multifamily loan delinquencies are at their highest in a decade, and nearly 10% of apartment loans are showing distress. Yet investors are still pouring capital into the sector, signaling they view rentals as a solid long-term play. They’re betting today’s softness is temporary – that once the construction boom eases and interest rates come down, the rental market will rebalance. In the Sunbelt, where housing is more affordable and populations are growing, demand is holding up better. Coastal cities are feeling more pain, creating potential bargains for well-funded buyers to snap up distressed assets. It’s a balancing act between near-term challenges and long-term opportunity for apartment investors.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael—Until next time!

This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Friday, October 17, 2025. Here’s what we’re covering today:

Fed signals easing — a key Federal Reserve official backs another interest rate cut this month amid a cooling labor market, with debate brewing inside the Fed on how fast to ease. We’ll explain what it means for borrowing costs and the CRE outlook.

Manhattan’s largest office landlord makes a $730 million bet on a Midtown skyscraper — one of the year’s biggest office sales and a signal of renewed confidence in the sector.

And investors are snapping up 60-year-old apartment buildings in huge numbers. We’ll dive into why vintage multifamily properties are suddenly hot and what it says about today’s financing climate.

Fed Hints at Rate Cut as Job Market Weakens

The Federal Reserve appears poised to cut interest rates again in its upcoming meeting later this month. Fed Governor Christopher Waller said yesterday that he favors a quarter-point rate cut at the end of October, pointing to “worrisome” signs of a weakening labor market. This comes after the Fed already cut rates by 0.25% in September — the first cut of 2025 — which brought the benchmark federal funds range down to around 4.0 to 4.25%.

Waller’s view is that with inflation easing toward the 2% target and hiring cooling off, the Fed has room to ease up on borrowing costs to prevent an overly restrictive policy. But not everyone at the Fed agrees. Governor Stephen Miran is pushing for a larger half-point cut, citing new downside risks and arguing that policy is “too tight” right now. Most officials, though, favor another 0.25% trim.

Markets now expect a quarter-point cut at the October 28–29 meeting, which would drop the fed funds rate to roughly 3.75–4.00%. Fed projections show rates could be around 3.5% by year-end if the economy continues to soften. For commercial real estate investors, this potential easing is a welcome signal — it could bring relief on financing costs and cap rates, though much depends on how quickly the Fed moves and what the next round of data shows.

Manhattan Office Rebound with $730M Tower Deal

In New York City, a headline-grabbing office deal is making waves and signaling renewed confidence in the market’s recovery. SL Green Realty, Manhattan’s largest office landlord, has agreed to buy Park Avenue Tower in Midtown for $730 million. The 36-story, 620,000-square-foot building is over 95% leased, and the price tag makes it one of the largest office transactions of 2025.

This deal follows several other major transactions this year, including RXR’s $1.1 billion purchase of 590 Madison Avenue. In fact, about $3.5 billion of Manhattan office properties changed hands in the first half of 2025 — up from $2.3 billion in the same period last year. Buyers are being drawn back by lower prices and improving leasing activity, even though values are still down as much as 40–45% from pre-pandemic peaks.

SL Green’s move — coming at a slight discount to what the seller, Blackstone, paid more than a decade ago — suggests that well-leased, prime-located assets can still command attention and capital. For the broader office sector, particularly in gateway cities, this is a sign that high-quality buildings are finding buyers again, while older, less efficient spaces continue to struggle.

Investors Favor Older Apartment Buildings for Easier Financing

Now to the multifamily market, where a surprising trend is shaping 2025: investors are favoring older apartment buildings — many from the 1960s or earlier — at record levels. Over 60% of multifamily property sales this year have involved buildings more than 60 years old. In dozens of U.S. metros, the typical apartment property changing hands today is far older than the local average inventory.

Why the rush to vintage? It’s all about financing. With capital markets still tight and interest rates elevated, investors are gravitating toward smaller, stabilized assets that are easier to finance. Older apartment buildings tend to trade at lower prices, meaning they require less equity and smaller loans. Just as importantly, these assets often qualify for government-backed loans from Fannie Mae or Freddie Mac, providing lower-cost and more predictable financing.

This accessibility gives investors a clear edge in a market where newer, high-end developments are struggling to secure funding. The combination of lower prices, dependable rent rolls, and favorable loan terms has made 1960s-era properties some of the hottest buys of the year.

The bottom line: in a capital-constrained environment, investors are going where the financing flows — and right now, that means older, stable apartment assets. Until credit conditions loosen or pricing adjusts on newer projects, the “vintage advantage” looks here to stay.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael — until next time!

This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Thursday, October 16, 2025, here’s what we’re covering today: Fed pivots? Jerome Powell signals an end to tightening and even hints at rate cuts on the horizon – a potential game-changer for CRE financing. Manhattan’s office market hits a 19-year high in leasing activity as big-name tenants snap up space at record rents. And apartment investments are bouncing back after a two-year slump, driven by stabilizing supply and new incentives fueling investor optimism.

Let’s dive into these top stories.

Fed Signals a Shift Toward Easing

First up, the Federal Reserve may finally be easing off the brakes. In a speech this week, Fed Chair Jerome Powell suggested the central bank is close to ending its tightening cycle and could even begin cutting interest rates as the labor market cools. He noted that the Fed’s balance sheet runoff might wrap up soon, with reserve levels nearing the “ample” mark they’re aiming for. More importantly for investors, Powell acknowledged the job market is softening, which “rebalances” concerns between inflation and employment, leaving rate cuts on the table. Financial markets cheered the dovish tone, already pricing in two more rate reductions by year-end.

Why does this matter for commercial real estate? Lower interest rates would mean cheaper debt and could revive deal-making. CRE transactions that stalled under high borrowing costs might find new life if the Fed pivots to easing. It’s a hopeful signal for anyone looking to refinance properties or finance new acquisitions. For now, all eyes are on upcoming economic data and the Fed’s next meeting, but the message is clear: the tightening phase is nearly over, and easier money may be on the way.

Manhattan Office Market Roars Back

Our next story stays in New York, where Manhattan’s office sector is mounting a major comeback. New data shows Manhattan saw 23.2 million square feet of office leases signed in the first nine months of 2025 – the highest volume since 2006. To put that in perspective, that’s a level of activity not seen since before the Great Recession. Even more eye-opening, a record 143 leases this year have been at rents over $100 per square foot, signaling fierce competition for premium office space. Financial firms are expanding, tech companies are doubling down on New York, and trophy towers in Midtown and Downtown are filling up fast. Major deals include Deloitte leasing a huge chunk of a Hudson Yards tower under construction, Amazon expanding its footprint with a Fifth Avenue property, and JPMorgan Chase opening its brand-new 60-story Park Avenue headquarters.

This surge in demand has developers dusting off projects – Manhattan now has the busiest office development pipeline since the pandemic began. Vacancy is still elevated around 14.8%, roughly double pre-pandemic levels, but the trend is positive. Landlords are even converting older offices to residential use to chip away at that vacancy. Notably, New York is outpacing other cities: nationwide, office leasing remains about 11% below pre-COVID norms, while NYC has exceeded its 2019 leasing volume and even surpassed pre-2020 office attendance levels. For CRE investors, the Big Apple’s rebound is a welcome surprise, proving that the right market with the right assets can defy the broader office slump.

Multifamily Investors Regain Confidence

Finally, we turn to the multifamily sector, where there’s growing optimism that the worst is over for apartment investors. After two tough years of sliding values, the apartment market is showing renewed strength as supply and demand rebalance. Nationwide, housing construction has pulled back to a more sustainable pace, and rents are rising again in about 70% of U.S. metro areas as excess inventory gets absorbed. By mid-2025, apartment property values actually ticked back up into positive growth territory, ending 29 consecutive months of year-over-year price declines. Values had fallen roughly 19% since 2022, so this pivot to growth is a significant milestone.

What’s driving the rebound? A big factor is the shift in monetary policy. The Fed’s recent interest rate cuts – the first in years – and expectations of further easing are already reviving deal activity. Lower financing costs make it easier for buyers to underwrite deals that didn’t pencil out when rates were high. On top of that, new federal incentives are boosting investor sentiment. Congress brought back 100% bonus depreciation and expanded tax credits for housing, while making Opportunity Zones permanent – moves that fuel after-tax returns and make more deals viable. In short, the government is adding tailwinds just as market fundamentals improve.

There’s also an emerging balance in construction: new apartment completions have dropped to about half the pace of a year ago, closer to normal levels. This cooling of supply, combined with steady renter demand, has given landlords a bit more pricing power lately. Of course, some risks remain – the economy isn’t out of the woods yet, and factors like labor costs or consumer spending could pose challenges. But for now, the multifamily outlook is the brightest it’s been in a while. Industry leaders expect better access to capital and stabilizing property prices over the next year, and many anticipate a healthy pickup in apartment deal volume through 2026. It appears multifamily real estate has turned the corner, offering a cautiously optimistic horizon for investors who hung on through the slump.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael — until next time!

This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Tuesday, October 15, 2025, here’s what we’re covering today: Fed signals more rate cuts as the U.S. economy cools; Manhattan office leasing hits record highs; and warehouse giant Prologis raises its outlook amid a logistics boom.

Our top story: the Federal Reserve is strongly hinting at more interest rate cuts, and soon. Fed Chair Jerome Powell said yesterday that a sharp slowdown in hiring poses a growing risk to the economy. In plain English, that’s a signal the Fed could cut rates again at its meeting later this month. Officials expect two more rate reductions by year-end. Why does this matter for commercial real estate? Well, lower rates would ease financing costs for everything from refinancing loans to new development debt. After a long stretch of high borrowing costs freezing deals, a rate cut could start to thaw activity. However, Powell’s caution also highlights an economy losing some steam. If the job market is cooling, landlords should stay alert: a weaker economy can make tenants more hesitant to lease new space. Bottom line – investors welcome the prospect of cheaper capital, but can’t ignore the reason behind it: a potential slowdown that might tap the brakes on property demand.

Next up, New York City’s office market is staging a surprising comeback. Manhattan just tallied its highest leasing volume in nearly twenty years – over 23 million square feet of new leases through September, a level not seen since 2006. And these aren’t just small renewals: big-name tenants are driving the surge. Deloitte is taking most of a new Hudson Yards skyscraper, Amazon expanded its footprint with a Fifth Avenue deal, and JPMorgan Chase opened a brand-new 60-story Park Avenue headquarters. What’s fueling this revival? Major firms are doubling down on modern, amenity-rich space, and there’s a push to bring workers back in person – at least in New York. In fact, NYC is now the only major market where office attendance has exceeded pre-pandemic levels. Now, before declaring victory for offices, remember Manhattan’s vacancy is still around 15%, roughly double its pre-COVID rate. And in most cities, office demand remains below pre-pandemic levels. But the takeaway for investors is that prime locations and top-tier buildings can bounce back. New York’s rebound suggests high-quality offices in gateway cities have a future, even as many older, less desirable properties remain in trouble.

Our third story highlights ongoing strength in the industrial sector. Warehouse giant Prologis just beat earnings expectations for Q3 and raised its outlook for the year. The company signed a record 62 million square feet of leases last quarter as retailers and logistics firms raced to secure space. Prologis’s CEO – a 40-year industry veteran – says he’s rarely seen such a strong setup for rent and occupancy growth. Even after years of e-commerce expansion, demand for distribution space is still outpacing supply. One factor giving warehouses a boost is importers moving goods early, trying to get inventory in place ahead of possible new tariffs. For industrial real estate investors, these signals are encouraging. High occupancy and rising rents mean distribution centers continue to deliver steady income. And even if the broader economy wobbles, the need to stock goods near consumers isn’t going away. Big picture: industrial remains the standout asset class, powered by structural demand – and the major players are confident enough to raise guidance heading into next year.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael—Until next time!

This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Tuesday, October 14, 2025, here’s what we’re covering today: the Fed braces for a data drought as it eyes a rate cut; a big bet on San Francisco offices signals cautious optimism; and investors snap up industrial, retail and apartment deals, highlighting a flight to quality in CRE.

The Fed Walks a Tightrope: Federal Reserve Chair Jerome Powell is set to speak today in his last remarks before the Fed’s late-October meeting. He faces a mixed economic picture – growth has been surprisingly strong, but a recent government shutdown means key data (like the September jobs report and CPI) got delayed. In fact, the September inflation report won’t come out until October 24, just before the Fed meets. Despite the fog, markets fully expect another quarter-point rate cut at the end of this month, which would nudge the Fed’s benchmark rate just below 4%, with perhaps one more cut in December. Powell has signaled caution: inflation is still running above the 2% target, even as some indicators hint the labor market is softening. It’s a tricky balancing act. Meanwhile, long-term interest rates aren’t giving much relief – a new Reuters poll of bond strategists suggests the 10-year Treasury yield will stay around or above 4% through next year. In other words, even if the Fed eases off the throttle, borrowing costs may remain elevated. For commercial real estate investors, the takeaway is clear: don’t count on cap rates compressing anytime soon. The era of ultra-cheap debt is over for now, so underwriting deals with realistic financing assumptions is more important than ever. Higher-for-longer rates could keep property values under pressure, even as we hope an economic soft landing materializes.

Contrarian Office Play in San Francisco: In the office sector – easily the most stressed corner of CRE – we actually have a notable deal to talk about. Lincoln Property Company and New York Life’s real estate arm just teamed up to acquire two Class A office buildings in San Francisco totaling roughly 495,000 square feet. One is a 23-story tower at 353 Sacramento Street in the Financial District; the other is a five-story creative office at 600 Townsend in the Showplace Square/Design District. These buildings boast upgraded lobbies, modern amenities, and solid tenants (think Wells Fargo and tech firms like PagerDuty). But importantly, they were bought at a steep discount compared to a few years ago. How steep? Well, one of the towers sold for around $62 million after its prior owner had paid nearly $170 million in 2016 – a dramatic drop in value. That building is currently about two-thirds vacant and was facing foreclosure before this deal, which tells you how tough the SF office market has been. So why are Lincoln and New York Life buying now? They’re basically placing a long-term bet on San Francisco’s recovery. The buyers cite encouraging signs – more workers coming back to offices (some companies are enforcing return-to-office), and new demand from AI and tech companies – as reasons for optimism. They plan to invest in these properties, adding amenities like fitness centers and tenant lounges, to make them more appealing and competitive. It’s a classic “buy low” strategy: acquire high-quality buildings at bargain prices and hold them until the market improves. For context, San Francisco’s office vacancy soared during the pandemic and has only recently shown hints of stabilizing. This acquisition signals that big institutional players smell opportunity in the distress. Commentary: It’s a bold move – not for the faint of heart – but if SF’s economy bounces back in the coming years, these investors could reap substantial rewards. That said, the overall office outlook remains very challenging. Just last month, office loan delinquencies nationwide jumped again, topping 8% according to Fitch, largely due to big loans on older buildings going into default. Many downtown towers in cities like SF and NYC are still struggling with high vacancy and falling rents. In short, while a few brave buyers are bargain-hunting, anyone investing in office now needs patience and deep pockets. Most investors are still sitting on the sidelines or demanding rock-bottom prices. We’ll watch whether this San Francisco deal marks the start of a broader trend of value-hunters coming forward – or if it ends up looking like catching a falling knife. For now, it’s an interesting glimmer of life in a beaten-down sector.

Capital Flows to Industrial, Retail, and Apartments:  Despite uncertainty, we’re seeing solid action in the “favored” property types – namely industrial, essential retail, and multifamily – where cash flow is steadier. Let’s run through a few notable deals. First, in industrial, a large distribution facility in Southern California’s Inland Empire has changed hands. JLL just brokered the sale of a 436,000-square-foot warehouse in Fontana, CA. The building is fully leased on a long-term basis to Cencora (formerly AmerisourceBergen), a major pharmaceutical distribution company. They haven’t disclosed the price or buyer, but the seller was a fund managed by Clarion Partners. This is a Class A logistics asset with a credit tenant – basically the kind of property investors can’t get enough of, even in a higher-rate environment. It shows that industrial real estate is still hot. Well-leased warehouses with strong tenants remain in very high demand, and investors are willing to pay aggressive prices for that reliable income stream. We’re hearing similar stories across many markets: despite rising cap rates generally, prime industrial cap rates haven’t blown out too much because there’s a wall of capital seeking logistics assets.

Moving to retail, an interesting deal out of metro Los Angeles underscores the resilience of necessity-based shopping centers. A two-tenant retail center in Santa Clarita (about 30 miles north of LA) just sold for $25 million. It’s an 84,000 square foot property occupied entirely by Dick’s Sporting Goods and Burlington. What’s notable is how it got to 100% occupancy: Dick’s recently extended its lease and even remodeled its store, and Burlington replaced a former JOANN fabric store that had closed during that chain’s bankruptcy. In other words, when one anchor faltered, a new tenant stepped in. The result is a fully stabilized center with two national retailers, which made it a very attractive investment. Hanley Investment Group brokered the sale, representing both the local developer-seller and the buyer. At roughly $25M, the pricing pencils out to about $300 per square foot, which is a healthy value for that market. What’s the takeaway? Even with all the challenges in brick-and-mortar retail, properties anchored by the right kinds of tenants (sporting goods, discount apparel – basically experiential or value-focused retail) are still highly liquid. Investors are targeting shopping centers that have proven internet-resistant tenants and good locations. In this case, having a successful Dick’s and a Burlington (which is expanding its footprint of off-price stores) turned a once-troubled center into a hot commodity. It highlights a broader trend: retail isn’t dead; it’s evolving. Well-located retail real estate with strong occupancy is drawing buyers, while weaker malls or centers without solid anchors are the ones struggling. We’re seeing cap rates for top-tier grocery-anchored or big-box centers holding fairly steady, whereas lesser retail properties have seen values dip. So, retail is now a very bifurcated market – much like office, the gap between winners and losers is huge.

And on the multifamily front, there’s continued investor appetite for apartments, though deals are a bit more subdued than in the boom of a couple years ago. One fresh example: Brixton Capital just acquired a 272-unit garden apartment community called Whisper Creek in Lakewood, Colorado (a suburb of Denver). The complex was built in the early 2000s and comes with the usual amenities – pool, fitness center, business center, etc. The sale price wasn’t announced, but given the vintage and location, we’re likely talking on the order of tens of millions of dollars. What’s interesting is that financing for the purchase was secured through JLL, meaning lenders are still willing to back multifamily acquisitions, especially in growth markets like suburban Denver. It’s no secret that higher interest rates have made underwriting apartment deals tougher – cash flows haven’t grown as fast as borrowing costs, in many cases. In fact, recent data shows rent growth has essentially flattened in a lot of markets as a wave of new supply hits and renters hit affordability limits. But multifamily remains arguably the most attractive asset class in CRE because occupancy is generally strong and the long-term demand story (housing needs, demographic growth) is positive. Investors like Brixton are selectively buying properties that they believe can perform well even if we see an economic cooling. By all accounts, this Lakewood property fits that mold: solid location, stable tenant base, and possibly some value-add upside through upgrades or better management. We’re also seeing institutional capital continue to target multifamily via partnerships and joint ventures, despite a slight pause to gauge the market. It’s worth noting that in Washington, policymakers are paying attention to housing too – just this month the Senate passed a bipartisan bill aiming to boost housing supply by easing zoning restrictions and offering incentives for apartment construction. If that becomes law, it could eventually spur more development, which is something multifamily investors are watching closely.

Big Picture: These deal stories underline a key theme in today’s commercial real estate landscape: money is still flowing, but it’s choosy. There’s a flight to quality and durability. Single-asset sales in industrial, essential retail, and multifamily are holding up well because those properties offer dependable cash flow and meet persistent tenant demand. Logistics warehouses, necessity retail centers, rental housing – these are considered relative safe havens. On the flip side, riskier or more interest-rate-sensitive segments like speculative development, hospitality, or secondary office? Those are seeing far fewer trades unless there’s distress pricing in play. Everyone’s recalibrating to the new cost of capital. Deals are getting done, but only after prices adjust to levels both buyers and sellers find fair in this environment. For investors, the strategy now is to be selective and strategic: focus on high-quality assets and locations, underwrite with conservative assumptions, and be ready to pounce on opportunities where others retrench. The landscape is a bit uneven, but there are bright spots – as we’ve seen, good properties with strong fundamentals can and will find capital, even in a higher-rate world.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael — until next time!

This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Monday, October 13, 2025, here’s what we’re covering today: fresh signals from the Fed as it weighs interest rate cuts, a spike in office loan defaults shaking the market, and Starbucks closing hundreds of stores in a $1 billion overhaul.

Let’s start with the macro picture. Federal Reserve officials are hinting at caution even as rate cuts loom. After the Fed’s first rate reduction in nine months last month, futures traders expect two more quarter-point cuts by year-end. But some at the Fed aren’t so sure. St. Louis Fed President Alberto Musalem said he’s open to an “insurance” rate cut to support the job market, but he warned there’s limited room to ease with inflation still well above the 2% target. Basically, they don’t want to spark higher prices by cutting too fast. The latest survey of economists reflects this tension – they see inflation ending the year around 3%, with only one more Fed cut likely in 2025. Meanwhile, the economy is proving resilient in some areas. Business investment is strong (thanks in part to the AI boom) and GDP growth forecasts have been revised up. But hiring has cooled and a federal government shutdown dragging into its third week is adding a headwind. For commercial real estate investors, all this matters because interest rates drive financing costs and property values. High borrowing costs have already put a damper on dealmaking. Even the once-hot apartment sector is feeling the pinch: national multifamily rents just saw their sharpest September decline since 2009 as a wave of new supply hit the market. On the bright side, industrial real estate is still a relative rock – warehouses remain near full occupancy thanks to e-commerce demand. So the macro backdrop is a mixed bag: the Fed is likely to cut rates somewhat, but not as aggressively as markets hoped, and real estate folks are trying to read the tea leaves for 2026.

Now turning to commercial real estate’s most troubled spot: offices. New data show office investors and lenders are facing growing distress. Delinquencies on office mortgages spiked in September, driven largely by a major New York City loan default. Fitch Ratings reported the office CMBS delinquency rate jumped to just over 8%, the highest in years, after a $180 million loan on a Manhattan office tower went into default when it matured. That Manhattan building – nearly a century old and half-empty – even lost a key tenant when Starbucks closed its store there late last month. And it’s not just New York; the second-biggest office default in September was on a skyscraper in Hartford, Connecticut. Office landlords are getting squeezed by rising debt costs and tenants shrinking their footprints. Overall CMBS delinquency ticked up as a result, a warning sign that credit stress in commercial real estate isn’t over. Yet, there are glimmers of recovery on the horizon for offices. Believe it or not, Manhattan’s office leasing activity is on track for its best year since 2019. Companies are inking new leases for quality spaces, albeit often at discounted rents or with rich incentives. Essentially, the top-tier, well-located buildings are finding takers, while older and less attractive offices struggle to stay afloat. We’re witnessing a bifurcated office market: shiny, amenity-rich towers fill up (slowly) as firms bring workers back, but outdated buildings face an uncertain future. For investors, this means pricing and valuations remain under pressure. We’re seeing big owners adjust – just last month, JPMorgan put a Midtown Manhattan office tower up for sale at roughly half its pre-pandemic price. The takeaway: in the office world, distress and opportunity are walking hand-in-hand. Lenders are bracing for more loan workouts and potential foreclosures, even as optimists point to a modest uptick in demand for the best space.

And in the retail realm, one of the country’s most ubiquitous tenants is pulling back – Starbucks is making a headline-grabbing retreat from some locations. The coffee giant’s new CEO, Brian Niccol, announced a $1 billion restructuring plan that includes shuttering about 1% of Starbucks stores across North America. That works out to roughly 450 stores slated to close, including some high-profile spots like the massive Seattle Reserve Roastery and other underperforming cafes. Starbucks says it’s aiming to refocus on the “coffeehouse experience” and trim locations that aren’t measuring up – whether due to location issues, oversaturation, or maybe those unionization battles in a few cases. The closures will mostly wrap up by the end of this year. For retail landlords, hearing that a big national tenant is closing hundreds of stores is never welcome news. Many of these Starbucks sit in prime shopping centers and urban street corners, so owners will be looking to backfill quickly. The company insists it still has over 18,000 U.S. and Canada locations and isn’t scaling down its overall presence by much – essentially they’re pruning the portfolio. Still, this move underscores the shifting currents in retail real estate. Even major brands are re-evaluating their footprints post-pandemic, responding to changing consumer habits and cost pressures. On the flip side, some retailers are expanding – discount chains and grocery stores, for example, continue to open new units – but it’s clear the industry is in flux. For investors in retail properties, the Starbucks news is a reminder to be selective. Well-capitalized, “experiential” tenants and essential services are safer bets right now than oversaturated coffee shops or purely apparel retailers. If there’s a silver lining, it’s that new local coffee shops or other concepts may step into some of these vacant Starbucks spots, potentially at lower rents. In any case, fewer Starbucks might slightly cool foot traffic in some centers until replacements come in. It’s a shake-up worth watching as we head into the crucial holiday season for retail.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael—Until next time!

This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Thursday, October 10, 2025, here’s what we’re covering today: investors are pouring capital into huge deals in apartments, warehouses and retail centers even as offices struggle; the federal shutdown is starting to sting commercial real estate; and the Fed hints at more interest rate cuts as the economy cools.

Investors Target Big Deals in Resilient Sectors as Office Lags

There’s plenty of capital out there for commercial real estate, but it’s being choosier than ever about where it goes. Newly released data show record-breaking single-asset sales over $100 million in sectors like logistics warehouses, multifamily apartments, and even top-tier retail properties. High-quality, newly built properties in these areas are fetching premium prices as investors chase stable income and solid fundamentals. In fact, large one-off deals in industrial, multifamily, and retail hit record highs in the last quarter, reversing several years of declines. This wave of big-ticket investment comes as many institutional investors have billions in dry powder ready – but they’re deploying it surgically, favoring fewer, larger deals in the strongest sectors.

Meanwhile, the overall sales market is still subdued compared to pre-pandemic times – total U.S. commercial property sales are roughly 20% below 2019 levels. The drag comes mainly from slumping office sales and a pause in portfolio-wide deals. Before the pandemic, office buildings dominated the large-deal market, but not anymore. In the past year, office properties over $100M totaled only about $14 billion, a mere fraction of the $40–50 billion seen annually before 2020. Today multifamily leads the pack for big investments, followed by industrial and select retail assets, while office has fallen to the back of the line. Investors are effectively saying: “We’ll spend big, but only on sure bets.”

What’s the takeaway for investors? This bifurcated market could persist until confidence in struggling sectors returns. On one hand, we have a “flight to quality” – major funds and REITs doubling down on trophy apartments, logistics facilities, and prime retail centers where performance is strong. On the other hand, office and other challenged segments see minimal action as buyers and lenders stay cautious. Industry analysts say once leasing picks up and risk appetite improves down the road, all that sidelined capital could quickly reignite broader deal activity. But for now, top-tier single assets are the name of the game, and bulk portfolio sales or speculative office bets remain on hold.

Federal Shutdown Begins to Sting CRE Markets

The U.S. government shutdown — now over a week old — is starting to bite for commercial real estate, especially in markets tied closely to federal activity. In Washington, D.C., where federal workers and contractors are a huge part of the local economy, businesses near government offices are feeling the pain. Restaurants, coffee shops, and hotels that normally cater to these workers are reporting sharp drops in foot traffic and sales. One D.C. brewpub owner noted that happy hours and events are getting canceled as unpaid employees tighten their belts. It’s not just D.C.; other cities with big federal footprints are seeing similar ripples. In downtown Chicago, for example, shops around federal office buildings have gone quiet, and in Los Angeles, a shopping plaza near a large federal complex has seen noticeably fewer pedestrians.

So far, the broader CRE impact is limited and localized, but the concern is what happens if the shutdown drags on. Analysts warn that a longer shutdown could slow down leasing decisions and new deals, as government-related tenants delay commitments and investors grow uncertain. Sectors like urban retail, restaurants, and hotels are most at risk in affected cities, especially those already on thin margins after the pandemic. Some hospitality firms around D.C. are already fielding group booking cancellations for the fall season, fearing more to come if federal agencies stay closed. And let’s not forget, the shutdown isn’t just hurting local commerce – it’s also stalling economic data releases and federal programs. The Labor Department had to postpone the September jobs report, leaving investors and even the Federal Reserve flying a bit blind. If you’re a commercial real estate investor, that missing data adds another layer of uncertainty when assessing the market. Moreover, programs like federal flood insurance have lapsed during the shutdown, which could delay real estate transactions that require those policies. In short, a brief shutdown might just be a blip, but the longer Washington stays at an impasse, the greater the chance of real estate repercussions – from weaker tenant demand in federal hubs to hesitancy in lending and investment due to a murkier economic outlook.

Fed Signals Easing as Economic Crosswinds Blow

Turning to the macro landscape, interest rates and the economy are top of mind. A key Federal Reserve official is hinting that more rate cuts are on the way. New York Fed President John Williams – one of the Fed’s most influential voices – said in an interview that he expects interest rates will likely move lower by the end of this year. The Fed already trimmed its benchmark rate last month for the first time in this cycle, and Williams suggested further easing may be warranted given some cooling in the labor market. Importantly, he doesn’t see an imminent recession – rather, the goal is to calibrate policy so inflation keeps slowing toward 2% without choking the job market. The Fed’s recent meeting minutes back this up: policymakers noted downside risks to employment have increased, even as inflation (while still above target) has been easing off.

For commercial real estate players, this shift in monetary policy is a double-edged sword. On the one hand, the prospect of lower interest rates is welcome news – it could relieve some pressure on financing costs and help struggling property owners refinance debt that became more expensive in the high-rate environment. Already, we’re seeing banks and borrowers seeking creative solutions: the volume of CRE loan modifications has spiked as lenders extend loan terms or adjust rates to help borrowers hang on until conditions improve. If the Fed follows through with a rate cut at its upcoming meeting, it might bolster market confidence and lower cap rates a bit for prime assets.

On the other hand, why is the Fed considering cuts now? Because the economy is showing signs of cooling. Just yesterday, economists estimated that jobless claims ticked up to around 235,000 last week, a slight rise that could partly be due to contractors impacted by the federal shutdown. While that number is still low by historical standards – we’re not seeing mass layoffs – it suggests the labor market isn’t as red-hot as it was. “No firing, no hiring” is how some economists describe it: companies aren’t shedding workers en masse, but they’re cautious about adding new ones. If this slow patch continues, it could dampen demand for certain types of real estate – think of fewer new hires needing office space or apartments if growth ebbs. Moreover, the ongoing shutdown means key economic indicators (like jobs and inflation reports) are delayed, making the Fed’s job trickier. They’ll have to rely on partial data and forecasts when deciding on rates. Fed officials, including Williams, emphasize they’ll do what it takes to get inflation down to 2% without tanking the economy. For CRE investors, the bottom line is: be prepared for a shifting interest rate environment. We might be transitioning from a period of rising rates to one of stabilization or even modest cuts. That could open a window to lock in lower-cost debt or see improved asset values, but it also means staying alert to economic softening. In other words, cautious optimism – welcome the potential rate relief, but keep an eye on why it’s happening. If the Fed is easing because growth is slowing, real estate strategy may need to factor in a slower economy in the coming quarters.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael — until next time!”

This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Wednesday, October 8, 2025, here’s what we’re covering today: a fire-sale office deal highlighting deep distress; the steepest slide in apartment rents since 2009; and fresh signals from the Fed on interest rates that could shake up real estate.

Office Owners Take an 80% Loss in Atlanta – In the office sector, we have a jaw-dropping deal out of Atlanta underlining just how distressed things have become. Two 18-story towers in the Vinings area sold for just $21.75 million, after trading for about $119.5 million in 2019. In other words, the previous owners walked away with barely 18 cents on the dollar. Why the plunge? The property’s occupancy had fallen to roughly 45%, with a major tenant, Piedmont Healthcare, vacating over 250,000 square feet. The owners couldn’t refinance the maturing loan, leading to a default and a fire-sale price. The buyer, a firm called Insignia, is stepping in with plans to rebrand and lease up the nearly half-empty complex. What’s the takeaway? This is a vivid example of the pain in the office market. Remote work and higher interest rates have slashed demand for older office buildings, especially in suburban submarkets. Lenders are increasingly unwilling to extend or pretend – they’re forcing sales like this when loans come due. For opportunistic investors, it’s a sign that bargains (and big risks) abound. But for existing owners and banks, it’s a warning that office valuations in many places have reset dramatically lower, and the bottom is still a moving target.

Multifamily Rents See Rare Decline – Now onto multifamily, where apartment landlords are feeling a chill. New data shows U.S. apartment rents fell by $6 in September, bringing the national average rent down to about $1,750. That might sound small, but it’s actually the sharpest drop for any September since 2009 – back in the aftermath of the financial crisis. What’s driving it? In short: a flood of new supply and a bit of demand fatigue. Developers have been busy, and over 525,000 new units are in lease-up across the country, the most in recent memory. Renters now have more options, especially in Sun Belt markets. Cities like Austin, Phoenix, and Denver saw some of the biggest rent declines (in the ballpark of 3–4% year-over-year) as all those new projects compete for tenants with concessions and discounts. Meanwhile, high-cost, undersupplied markets are still holding up – New York and Chicago actually managed modest rent growth over the past year. For investors, here’s the context: after years of red-hot rent increases, the apartment sector’s gravity-defying run is leveling off. We’re seeing that record construction is finally catching up to demand, and a softer economy isn’t helping. The good news? Vacancies remain moderate, and with homeownership so unaffordable for many young households, the long-term rental demand is still solid. But the era when multifamily was an automatic winner is over – investors need to be pickier on location and wary of markets with oversupply. Underwriting assumptions for rent growth should be more conservative going forward. In other words, multifamily is still a stalwart, but it’s entering a phase of slower, more uneven growth that separates the strong operators from the rest.

Fed Hints at Easing – But Not Too Fast – Turning to the macro front: all eyes in finance are on the Federal Reserve’s latest signals. Today, the Fed will release minutes from its September meeting – the one where it cut interest rates for the first time in 2025. That quarter-point cut brought the benchmark rate down to around 4.1%, a potential inflection point after a long stretch of tightening. The minutes are expected to show a lively debate inside the Fed. Reportedly, a newly appointed Fed governor pushed for an even larger cut, arguing that inflation (around 2.7% now) is coming to heel and the economy needs more support. But others are wary, noting that while job growth has cooled, the economy isn’t collapsing – the stock market’s been hitting record highs, consumer spending is holding up, and unemployment is only creeping up slowly. Why does this matter for CRE investors? Because the interest rate environment dictates so much of our world – from mortgage costs to cap rates and property values. If the Fed is indeed starting an easing cycle, that’s a hopeful sign that borrowing costs for real estate could gradually come down in coming months, which would be a relief for dealmakers and anyone looking to refinance a loan. However, don’t break out the champagne just yet. The Fed is divided – they want to avoid reigniting inflation, so any rate cuts will likely be gradual. We’re not going back to zero rates, just edging down from restrictive levels. The takeaway: plan for interest rates that stay higher than the past decade’s norm, but possibly a bit lower than today. Savvy investors might start penciling in slightly lower debt costs in 2024 and beyond, but still need to price in some uncertainty. Remain nimble – if the economy wobbles, the Fed could cut more, but if inflation flares up again, they could hit the brakes. It’s a tricky balance, and the Fed’s tightrope walk will keep influencing real estate pricing and investment strategy.

Industrial Stays Hot, and Lenders Back Top-Tier Retail – Finally, let’s end with a look at the bright spots in CRE – industrial and essential retail. While offices struggle, the industrial market continues to power ahead. Case in point: Terreno Realty just sold a New Jersey warehouse for about $144 million, a phenomenal price that reflects how much demand there is for logistics facilities. Terreno had bought that property over a decade ago for only about $22 million and expanded it – now they’ve pocketed a huge profit. And in the Boston area, Blackstone’s Link Logistics arm snapped up a brand-new distribution center for $58.5 million. That facility is not huge – roughly 87,000 square feet – but it’s fully leased to UPS as a last-mile hub. The fact that Blackstone paid top dollar (over $600 per square foot) shows how confident big players are in the industrial sector’s prospects, even at premium valuations. For industrial owners, strong tenant demand from e-commerce and logistics companies is keeping occupancy high and attracting capital even in a high-rate environment. Now, on to retail – not all retail is created equal, but the good stuff is still financeable. We just saw PGIM Real Estate secure a $132 million refinancing for a grocery-anchored shopping center in Pennsylvania. That open-air retail complex, filled with necessity and discount retailers and even a busy movie theater, convinced Wells Fargo to lend fresh funds. This illustrates a broader trend: grocery-anchored centers and value-focused retail are the darlings of the retail real estate world right now. Even as some chain stores close down across the country, centers that offer experiences, essentials or bargains are holding their own. Lenders and investors are showing appetite for these resilient retail assets, whereas malls or struggling big-box chains remain a tougher sell. The broader message for CRE investors is this – capital is still out there for quality assets. Industrial warehouses, necessity-based retail, specialized sectors like data centers – these continue to attract investment and debt even while riskier parts of the market pull back. It’s a “tale of two markets”: one part is weathering the economic cross-currents just fine, and the other is facing some tough adjustments. Knowing which is which has never been more important when allocating your dollars.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael—until next time!