Billions in Dry Powder Poised to Hit CRE Market in Late 2025

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Good morning. Private equity giants are sitting on a mountain of unspent cash, and with pressure mounting, late 2025 could see a surge in CRE deal activity, especially in alternative sectors like data centers and healthcare.

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• C-PACE strategy: The long-term (up to 30 years), non-recourse financing tool C-PACE can inject fresh capital into mid-construction deals and projects up to three years post-completion, making it a viable recapitalization option. (sponsored)

• Debt uptick: CMBS issuance hit $59.55B in the first half of 2025, up 35% YoY and the highest in over 15 years.

• Dollar dip: A weaker US dollar is luring foreign CRE investors, but uncertainty and higher hedging costs temper enthusiasm.

• Business boom: North Carolina reclaims its spot as the top state for business in 2025, powered by a strong economy, skilled workforce, and investor-friendly climate.

• NYC appeal: Foreign buyers are returning to NYC real estate in force, especially in luxury, as global uncertainty and softer prices boost appeal.

• Ownership divide: Investors bought 27% of US homes in early 2025, crowding out traditional buyers amid high rates and prices.

• Rate reaction: Mortgage applications spiked 9.4% last week as rates dipped to a three-month low, with both purchase and refinance demand seeing YoY gains.

• Borrowing slowdown: US consumer credit rose just $5.1B in May—half of what was expected—as Americans cut back on credit card use.

• Risk rising: CRE loan delinquencies are rising sharply, especially in multifamily, as lending slows and losses hit decade highs.

• Value markets: Midwest and Arizona cities lead 2025’s best rental markets, offering renters more square footage, lower costs, and strong quality-of-life metrics. 

• Prelease peak: Student housing preleasing hit 79.9% nationally in May 2025, with strong showings at major universities like Cincinnati and Missouri.

• Permit slump: Multifamily housing permits have fallen below both pandemic and pre-pandemic levels in San Francisco and most major US metros.

• StorageMart takeover: StorageMart and Manhattan Mini Storage added 27 former Metro sites across seven states, boosting their managed portfolio by over 2M SF.

• Prime pressure: Amazon asked NYC corporate staff to volunteer in grocery warehouses during Prime Day to ease delivery demand.

• Smart maintenance: MaintainX raised $150M in Series D funding to expand its AI-driven platform for asset management and predictive maintenance.

• Energy overload: PJM, America’s largest power grid, is struggling to meet soaring demand from AI and data centers, pushing electricity bills up 20%.

• Subsidy squeeze: A new Trump executive order threatens hundreds of billions in solar and wind projects by narrowing clean energy tax credit eligibility.

• Traffic dip: Shopping center visits declined slightly in June as spring’s tariff-fueled retail surge cooled.

• Highway takeover: Buc-ee’s is on track to surpass 70 stores by 2027, expanding into eight new states with a wave of massive travel centers.

• EV push: Federal Realty is partnering with Mercedes-Benz to install 500 EV chargers at 50 retail centers nationwide.

• Store exodus: Store closures are up 67% in 2025, led by bankruptcies and shaky consumer sentiment, leaving millions of square feet vacant.

• Retail rebound: Manhattan’s prime retail corridors hit their lowest vacancy levels since 2017, with Soho and Madison Avenue leading the charge.

• Rising rents: Miami office rents hit $62.61 PSF in Q2—up 14.4% YoY—despite a wave of new construction flooding the market.

• Tenant turn: Atlanta office rents rose 3.7% in Q2, but growing concessions signal the market may shift in tenants’ favor by year-end.

• Trophy boost: Dallas’ suburban office market is holding firm thanks to demand for trophy buildings, with top-tier properties commanding premium rents and accounting for the bulk of new construction.

• Value plunge: The Pasadena Office Tower lost nearly 60% of its value over the past decade, as tenant flight to higher-quality buildings drives distress.

• Conversion risk: NYC’s office-to-resi push could stall as a proposed rent freeze threatens the financial viability of affordable housing conversions.

• Luxury pivot: Braemar Hotels is selling the 369-room Marriott Seattle Waterfront for $145M, part of a broader shift to streamline its portfolio toward luxury assets.

• Beach buy: T2 Hospitality made its South Florida debut with a $36.6M purchase of the oceanfront Plunge Beach Resort near Fort Lauderdale.

• Arena scandal: Oak View Group CEO Tim Leiweke was indicted for allegedly rigging the $375M Moody Center bid, triggering $16.5M in penalties.

• Food hall blitz: Tech-backed food hall Wonder opens in DC with 25+ concepts and rapid delivery, eyeing 10 locations by year’s end.

📈 CHART OF THE DAY