| | | | | | | | | | There are some early indications that President Donald Trump’s tariffs may not spur manufacturing the way he envisions. In the best-case scenario, it would take years for onshoring to take hold — because, well, factories take years to build. There is momentum to build on, but the eye-watering rate of tariffs may bring it all crashing down. Manufacturing’s share of industrial space demand is up 354% since 2018. The CHIPS Act has already accelerated the pace of expansion, and the early days of the Trump administration saw another wave of new commitments. Carmakers have been a major part of that, with Hyundai, Tesla and Honda all announcing multibillion-dollar manufacturing projects stateside in the last month. | | | | | | | | Macroeconomic consultancy TS Lombard said the new U.S. tariffs will effectively put a 77% tax on manufacturers’ profits and an 18% tax on manufacturing GDP. And newly inflated costs may make it too expensive to keep building, and some companies like International Recycling Group have already called off projects in the last few days. Those that do move forward will be dealing with significantly higher construction costs, which will be passed down to consumers in most cases. “Those are really big numbers to add on to your hard costs,” Andrew McCarthy, the founder of Michigan-based Freshwater Development, told Bisnow. “Now you have to figure out where that goes. If it all comes to us and we have to add that on to our number, that's the difference between deals not penciling or you're raising sale prices.” — Kayla Carmicheal, Jay Rickey, Catie Dixon and Mark F. Bonner Not getting The First Draft in your inbox? Click here to sign up. Got any feedback or want to send us a mailbag letter? Email first...@bisnow.com CRE News Quiz The merger of two large companies last week created the second-largest architecture firm in the U.S. What were the firms? (Answer at the bottom.) On Our Radar U.S. property prices held in Q1, but cracks are starting to show. Green Street’s Commercial Property Price Index rose 0.3% in March, up 4.9% YOY, signaling stability in property values despite mounting market stress. “Real estate values aren’t going up over the near term,” Green Street’s Peter Rothemund said, citing a weak economy offset by falling Treasury yields. Office and self-storage sectors saw the steepest monthly drops (2%), while healthcare led with a 1.3% gain. The index remains 18% below its 2022 peak. Green Street has been consistent in its “not as bright” 2025 outlook since January. Howard Hughes extends talks again after rejecting Ackman’s $900M bid. Howard Hughes Holdings has once again rejected Bill Ackman’s $900M takeover offer but extended its standstill agreement with Pershing Square through April 15. The deal, valuing shares at $90 — a 46% premium — sought to remake the firm into a “modern-day Berkshire Hathaway.” Talks continue without guaranteed outcomes, as investors increasingly favor resilient alternative real estate assets. Meanwhile, Ackman issued a tariff warning: “This is not what we voted for.” Ackman says Trump is “losing the confidence of business leaders around the globe” as sweeping new tariffs hammer markets and raise recession fears. Calling the policy rollout a “self-induced economic nuclear winter,” the billionaire investor warned the U.S. is destroying its credibility as a trading partner. JPMorgan CEO Jamie Dimon followed suit with his own message on Monday: “America First is fine, as long as it doesn’t end up being America alone.” As for CRE? Deep anxiety reigns again. The end of March Madness is nigh. As we head into the NCAA men’s basketball championship game tonight, Sam Berry is in the lead of a very tight race. His money is on Florida. The big game is at 8:50 p.m. ET tonight, so tomorrow we’ll be announcing the winner of $250 of Bisnow event credit, some swag and a trophy.
This Morning’s News DATA CENTERS — DOE's Plan For Data Centers On Federal Land (Bisnow): DOE identified 16 potential sites with existing infrastructure and the possibility for quick permitting for energy sources like nuclear power. The sites are scattered across the country. Read more here.
RETAIL — CMX Cinemas Eyes Closures, Asset Sales (Bloomberg): CMX Cinemas is exploring the closure of locations and potential asset sales. The chain is working with advisers from A&G Real Estate Partners. Read more here.
REITs — Paramount Quietly Paid CEO $4M In Undisclosed Bonuses (WSJ): Paramount paid over $900K for CEO Albert Behler’s personal accounting services and $12,000 for wine from his German vineyard. Behler also spent $77K over the REIT's limit on “club memberships.” The filing shows the CEO’s pay was higher than previously reported. Read more here.
| | | | Pexels/Erik Mclean | | | | | | | | MULTIFAMILY — Starwood Buys $800M Worth Of Master-Planned Communities (TRD): Starwood Capital Group and Starwood Land paid $800M for a portfolio of master-planned communities in Texas owned by Hines. Read more here.
LEGAL — Fannie, BNY Sued Over Inflated Charges On Foreclosed Loans (Bloomberg): Borrowers were improperly charged compound interest instead of simple interest after falling behind on loans, homeowners alleged in court documents. Read more here.
RETAIL — Rite Aid Eyes Second Bankruptcy (WSJ): Rite Aid is weighing a possible repeat bankruptcy and has been exploring a potential sale of some or all of its business. The drugstore chain had more than 2,000 stores when it last filed for bankruptcy in October 2023. Read more here.
RETAIL — Tariff Shock Looms (CoStar): Trump-imposed tariffs are expected to hit U.S. retailers hard, increasing costs on imported goods and squeezing profit margins. Retail real estate demand has been relatively strong, perhaps making it easier for the sector to withstand expected lulls in leasing. Read more here.
RETAIL — Dollar General Shines (Seeking Alpha): Dollar General's share price has risen 35% since Inauguration Day, the strongest performance among all Russell 1,000 stocks, outpacing tech and energy firms. Read more here.
INDUSTRIAL — Warehouse Stocks Slip As Tariffs Threaten Trade Flows (WSJ): Since April 2, Prologis has seen its share price fall about 12%. If fewer goods are shipped, less warehouse space will be needed. Read more here.
| | | | | | | | Bisnow/Jon Banister | | | | | | | | OFFICE — HUD Considers Moving HQ (Bloomberg): The U.S. Department of Housing and Urban Development is exploring relocating its headquarters from its outdated Brutalist building in D.C. Several cities have expressed interest in hosting the agency. Read more here.
PEOPLE — New CEO At Healthcare Realty (WSJ): Peter Scott, former chief financial officer of Healthpeak Properties, has been named president and CEO of Healthcare Realty Trust. Read more here.
OFFICE — Winklevoss Twins' Crypto Firm To Open Miami Office (Bisnow): Gemini signed a 9K SF lease in Miami’s Wynwood area and expects employees to move in by May. The company took up two prebuilt suites in the Sterling Bay-owned building. Read more here.
PEOPLE — Jordan Selig Exits Family Firm (Bloomberg): Jordan Selig has stepped away from Martin Selig Real Estate, the firm founded by her father, amid mounting debt and declining values in Seattle CRE. Once seen as the heir apparent to run her father’s firm, Jordan Selig said she is going off on her own real estate and tech ventures. Read more here.
RETAIL — Guess To Shut Stores (Retail Dive): Fashion retailer Guess is closing 20 underperforming stores in North America. Read more here.
HOUSING — Strong Q1 Apartment Demand Lifts Rents (RealPage): The U.S. absorbed more than 138,000 market-rate apartment units in Q1, the highest Q1 demand on record in the RealPage data set. Read more here.
INVESTMENT — Real Estate Rallied In Q1 (Morningstar): Stocks in the Morningstar U.S. Real Estate Index were up 3.41% in Q1, significantly outperforming the 1.74% decline seen in U.S. equities. Read more here.
TARIFFS — JPMorgan, Goldman Raise U.S. Recession Odds (WSJ and Bloomberg): JPMorgan raised its U.S. recession probability to 60%. Economists at Goldman Sachs raised the probability of a U.S. recession to 45%, lowered GDP growth forecasts to 0.5% and predicted three consecutive 25 bps cuts from the Fed starting in June. Read more here and here.
| | | | | | | | Boston Planning Department | | | | | | | | SPORTS — Boston, NWSL To Proceed With White Stadium Renovation (Bisnow): The $200M stadium redevelopment saw pushback from the community, which argued the project was unlawfully converting public land for private use. A Massachusetts court ruled in favor of the stadium's makeover. Read more here.
M&A — Essex Repositions Portfolio With $345.5M Buy, $366.6M Sell-Off (Seeking Alpha): Essex Property Trust has acquired $345.5M in properties and disposed of $366.6M in assets, reallocating its portfolio with a sharper focus on Northern California. Read more here.
HOUSING — Kushner Lawyer Switches Sides (Pro Publica): Andrew Rabinowitz, once known for helping the Kushner family crack down on low-income tenants, is now working to defend renters in disputes with major landlords. Read more here. *** So You’ve Come For An Answer Stantec and Page. Stantec, which had been the sixth-largest firm, is acquiring Page, creating a global giant with 13,500 U.S. employees. *** The First Draft is produced by Director of Newsletters Jay Rickey, Managing Editor Catie Dixon, Editor-in-Chief Mark F. Bonner and Deputy Newsletter Editor Kayla Carmicheal, with an assist from AI. We’d love your feedback! Email us at first...@bisnow.com. | | | | | | | | | | | | | | | | | | | | | |
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