Large CRE Deals Surge Back in Q3 2025

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Good morning. After a slow start to the year, large U.S. CRE deals roared back in Q3. Transaction volume and investor activity reached levels not seen since 2022.

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CRE Trivia 🧠

Which U.S. city currently has the most apartments under construction?

(Answer at the bottom of the newsletter)

Market Snapshot

Big Buys

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• Startup stars: Phoenix and Austin lead U.S. cities in startup growth, driven by low costs and strong talent.

• Distress dynamics: The CMBS special servicing rate rose to 10.86% in November 2025, its highest point in 12 years. 

• Digital builds: Walmart is scaling up its partnership with Alquist 3D to build over a dozen commercial properties using 3D printing. 

• Liquidity lift: The New York Fed will buy $40B in Treasury bills starting Dec. 12 to manage reserves and meet seasonal demand, with elevated purchases expected through April. 

• Cut commentary: CRE leaders see the Fed’s latest rate cut as a modest boost, with hopes for improved liquidity, though long-term rates and investor caution still temper expectations.  

• Fund reset: Norges Bank is revamping its real estate strategy with broader sector, geographic, and platform diversification after recent underperformance.

• Rent peak: Manhattan rents hit a record $4,750 in November, up 13% YoY amid rising affordability concerns.

• Affordable upside: Despite capital constraints and low supply, 2026 could be a breakout year for affordable housing investors. 

• Pre-lease push: Student housing pre-leasing for Fall 2026 jumped to 17.3% in November, rebounding from a sluggish October. 

• Fast track: LA has made its affordable housing streamlining ordinance permanent after approving 40,000 units in three years, but only a fraction have started construction. 

• Funded future: Apple-backed housing fund doubles to $100M to speed up Bay Area affordable projects with faster, flexible financing. 

• Fee warning: Following its Greystar settlement, the FTC warned 13 rental software firms to stop obscuring mandatory fees in listings.

• Amazon buildout: Amazon bought two Mesa warehouses totaling 1M+ SF for $71M, expanding its logistics footprint amid a $125B nationwide investment push. 

• Incentive edge: Incentives like tax breaks and infrastructure support now drive industrial site selection as much as location or cost.

• Phoenix footprint: Provident Industrial is launching its first Phoenix project, an $80M, 471K-SF industrial park called Aldea Exchange.

• Power play: NextEra Energy is partnering with Google, Meta, and Exxon on massive data center developments tied to new power generation. 

• Google growth: Google will invest $880M to expand its Midlothian, TX data center, part of a $40B push to scale infrastructure across Texas.

• Luxury eats: Fifteen South Florida restaurants made the top 100 grossing list, with Mila ranked No. 1 amid soaring rents and dining costs in Miami. 

• Brand battles: Retailers are battling high rents and tight space in top urban corridors, turning to experiential stores and bold branding to break through. 

• Streaming space: Netflix opened its second immersive venue in Dallas, transforming a former department store into a 100,000 SF entertainment hub. 

• Retail reach: DLC and DRA Advisors bought a $429M, 2.1M-square-foot retail portfolio across five states, expanding into Phoenix and Oklahoma.

• Office overflow: JPMorgan Chase has subleased another 60,000 SF at 390 Madison Ave., expanding its Manhattan footprint to nearly 500,000 SF next to its new $3B HQ. 

• Campus consolidation: GM plans to downsize to a 400K SF Silicon Valley hub, likely in Sunnyvale, consolidating offices across the Bay Area for efficiency and hybrid work.  

• Fresh start: SLS Properties has reopened a fully renovated, 285K SF Galleria-area office building in Houston, now lease-ready after clearing past legal and financial issues. 

• Defense play: Related Ross is targeting defense tech firms in its push to expand West Palm Beach’s business ecosystem beyond finance. 

• Lab loan: Cabot, Cabot & Forbes landed $79.3M from Kawa Capital to fund The Bolt, a 180,000-SF life sciences project in Woburn, MA.

• Distressed exit: Hotel REIT Ashford Hospitality Trust is exploring a potential sale as it struggles with $2.6B in mostly floating-rate debt. 

• Room gouging: Hotel prices in 2026 World Cup host cities have surged over 300%, with some rooms topping $3,800 per night following the match schedule release. 

• Times transfer: The InterContinental New York Times Square hotel has been sold for $230M to a group including Highgate, Gencom, and Argent Ventures.

📈 CHART OF THE DAY

CRE Trivia (Answer)🧠

For the fourth year in a row, New York City leads the nation in apartment construction, with an estimated 30,023 units underway in 2025, according to RentCafe.