| | | | | | | | | | Deal momentum fell off sharply in May after four months of gains. LightBox’s CRE Activity Index fell 3.5 points last month to 105.5, which the firm attributed primarily to tariff uncertainty. The index measures the flow of commercial property listings, Phase 1 environmental site assessments and appraisal assignments. The decline was led by a 19% fall in lender-driven appraisal volume — it’s down 12% YOY — that LightBox said indicates the capital markets are getting more selective in their risk-taking. The index is still up 22% YOY overall. Listings inched up 1%, showing sellers are still active, though the pace of growth is slowing. Nine-digit deals increased a smidge in May and are still above pre-tariff levels, though LightBox said that might not be sustainable, especially as transactions are taking longer to close. | | | | | | | | “After a fast start to the year, May’s Index confirms that the market is starting to tap the brakes,” LightBox Head of Data Strategy Manus Clancy said. “The investment community isn’t retreating, but it is recalibrating.” The question from here is whether May was a momentary pause or part of a broader decline. Part of the answer may come from the 10-year Treasury. It’s resurging again this morning on the heels of a hotter-than-expected jobs report, though at nearly 4.5%, it’s still short of the highs seen in January or mid-May. Next week’s Federal Reserve decision on interest rates could play a role, though basically no one expects a change. And investors keep telling us they really, seriously want to buy and are sick of waiting for a better market. The brokerages are feeling good about deal flow. Will CRE decide to kick its addiction to interest rates and just get moving again? — Jay Rickey, Catie Dixon, Kayla Carmicheal and Mark F. Bonner Not getting The First Draft in your inbox? Click here to sign up. Got any feedback or a news tip? Email first...@bisnow.com. CRE News Quiz At least six major retailers have gone bankrupt within the last year and a half, putting $9B of CMBS loans at risk. Can you name three of them? (Answer at the bottom.) On Our Radar Elon vs. The Don: Will CRE get torched in the blowup? The Trump-Musk bromance just went up in flames — hurt egos, federal contract threats and tabloid-worthy drama. CRE might get scorched in the fallout. Musk’s federal real estate slash-and-burn tour could stall, while Trump’s vowing revenge by gutting billions in SpaceX, Tesla and Boring Co. deals. If he follows through, the real damage could hit subsidies and tax breaks tied to tech and EV growth — pillars propping up massive CRE developments. What started as a billionaire spat might spiral into a full-blown policy shift with serious consequences for the built world. The Fed’s favorite excuse just showed up. The U.S. added 139,000 jobs in May, topping forecasts, with unemployment steady at 4.2%. Gains came mostly from healthcare and hospitality. Manufacturing lost 8,000 jobs and the federal government shed 22,000. Construction added 4,000 jobs, led by a 11,300 increase in nonresidential roles. Wages rose 0.4% month-over-month and 3.9% YOY. Labor force participation dipped. Meanwhile, Treasury yields jumped — with the 10-year hitting 4.47% this morning. Despite economic crosswinds and Trump’s tariff swings, the Fed is still expected to hold rates, with Goldman Sachs calling the report too strong for cuts. Today’s the day … The premiere of First Draft Live hits at 12:30 p.m. ET. Bisnow Editor-in-Chief Mark F. Bonner will go live with Peachtree Group CEO Greg Friedman to dissect the chaos unfolding in CRE finance — tariffs, frozen liquidity and debt spreads that just won’t quit. It’s volatile, ruthless and not for the faint of heart. Are there still ways to win? Tune in TODAY at 12:30 p.m. ET. You can register here.
Today’s Deep Dive: Private Equity Faces Crunch Year As Global Volatility Creates Perfect Storm | | | | Pexels | | | | | | | | Private equity investors have become a major force in global real estate, but a model that relies on buying, fixing and then selling on a rinse-and-repeat cycle in order to deliver returns and attract new funding has been turned on its head by geopolitical uncertainty. For private equity executives, no deals equals no fees, and not being able to sell makes it hard to raise new money. After some underwhelming postpandemic years, private equity houses that piled in to property over the past 10 years could yet be tempted to shift their focus to major growth opportunities like tech and AI and away from real estate. And even for those that do stay the course, there is a need to realign targets and adjust operating models. Read the full story here. This Morning’s News M&A — Alfred, Property Management Firm RKW Merge With Quarterra (Multifamily Dive): Quarterra is providing about 30,000 units to the venture, which will operate 52,000 residences worth more than $20B. Read more here.
MULTIFAMILY — Trump Proposes $532M In Homeless Program Cuts (Bisnow): Among the proposed changes is the defunding of a HUD program called Continuum of Care. Permanent supportive housing, or affordable housing that includes rental assistance plus access to service providers for residents, is among the services and programs that receive funding through and from the current system. Read more here.
INDUSTRIAL — Blackstone Loans $231M On IOS (Connect CRE): Jadian Capital’s industrial outdoor storage affiliate has secured $231M in financing from Blackstone for a 43-property industrial outdoor storage portfolio in 13 states. Read more here.
INVESTMENT — Trump Renegotiates Subsidies With Chipmakers (Bloomberg): The Trump administration is reworking CHIPS Act grants, according to Commerce Secretary Howard Lutnick. Read more here.
RETAIL — Shoppers Wooed With Lounges, Lawns And Lattes (WSJ): From coffee bars to curated lawns, retailers are reimagining stores as lifestyle hubs to keep customers lingering — and spending. Apparel and beauty retailers saw time spent in stores increase 4% and 2%, respectively, in the first 20 weeks of this year. Read more here.
CONSTRUCTION — Trump Eyes FAU Campus For Presidential Library (Bisnow): FAU has offered Trump a free 100-year lease at its Boca Raton campus. Donors are expected to fund construction. Read more here.
| | | | | | | | Unsplash/Yender Gonzalez | | | | | | | | DATA CENTERS — Amazon Pledges $10B To North Carolina (Bisnow): Amazon’s investment will go toward training and community education to support the tech giant's data center footprint. It will also upgrade facilities and equipment at universities, technical schools and workforce development organizations. Read more here.
AI — Amazon’s 'Humanoid Park' To Test Delivery Robots (Seeking Alpha): Amazon is building a new testing ground for AI-powered humanoid robots. Amazon envisions the robots catching rides in its Rivian delivery vans and springing out to deliver packages. Read more here.
RETAIL — Walmart Scales Drone Delivery To 5 U.S. Metros (Seeking Alpha): The new drone service will launch at 100 stores, allowing some Walmart customers in Atlanta, Charlotte, Houston, Orlando and Tampa to receive orders in minutes. Read more here.
IMMIGRATION — ICE Raids Rattle Construction Sites Nationwide (Construction Dive): ICE arrested 100 undocumented workers at a job site raid in Tallahassee, Florida, several construction workers on a site on the University of San Antonio’s main campus and 15 workers during a construction jobsite raid in New Orleans. Read more here.
RETAIL — Torrid To Close 180 Stores (Seeking Alpha): With nearly 70% of its sales now online, the apparel brand is set to close 60 stores in the first half of this year and an additional 120 stores in the back half of this year. Read more here.
| | | | | | | | Pexels/Cottonbro Studio | | | | | | | | STUDENT HOUSING — Unite Makes £710M Offer For Rival (Bisnow): Unite is the UK’s largest owner of student housing. A deal isn’t guaranteed, Empiric says, but due diligence is underway. Read more here.
FINANCE — Thompson Thrift Scores $549M Refi (Barings): Barings has provided a $548.5M loan to refinance nine multifamily assets developed by Thompson Thrift in 6 states. Read more here.
HOUSING — $1.2M Per Unit? Public Housing Costs Spark Outrage (WaPo): Expensive cities like D.C., Chicago and San Francisco are seeing costs to house the poor exceed $1M per unit, which means less affordable housing gets built at an urgent time of need. Read more here.
DEVELOPMENT — UAE-Backed Plant Would Be First In U.S. Since 1980 (Manufacturing Dive): Emirates Global Aluminum plans to spend $4B developing a production plant in Inola, Oklahoma, the first such plant developed in the U.S. in 45 years. Read more here.
POLITICS — Developer-Turned-Politician Causes Stir In Alabama (AL.com): An Alabama real estate developer running for lieutenant governor is drawing heat — and some laughs — for a statement insisting media call her “Doctor.” Read more here. *** BTW … Most-read story on the website yesterday: Starwood Sues Multifamily Syndicator For $110M In Personal Guarantees Most-clicked story in yesterday’s First Draft: As Musk Exits, DOGE’s Shock And Awe Campaign Against Office Space Grinds On June 6 is National Donut Day. Jay feels like this is something you could celebrate all weekend, maybe with a cannoli donut or bacon maple glaze. For Mark, the cheaper the better always — at a greasy spoon and always spelled do-nuts. So You’ve Come For An Answer Joann, 99 Cents Only, Party City, Rite Aid, Big Lots and Bargain Hunt have all filed for bankruptcy between 2024 and now. The dual bankruptcies of Big Lots and Conn’s led occupancy to plummet within Blue Owl’s portfolio and caused S&P Global to downgrade its credit rating by three classes. *** 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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