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Good morning. For the first time since the Great Recession, the U.S. industrial market posted negative net absorption—signaling a shift in occupier behavior and a recalibration of post-pandemic demand.

Today’s issue is brought to you by Aspen Funds—direct investment in cash-flowing energy assets.

🎙️This week on No Cap: Jack and Alex sit down with MaryAnne Gilmartin to explore the twists, risks, and breakthroughs that took her from Brooklyn beginnings to leading skyline-defining projects in Manhattan.

Market Snapshot

*Data as of 08/15/2025 market close.

MARKET REPORT

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• Cost crunch: A decade of surging multifamily operating expenses is eroding profitability and reshaping underwriting risk nationwide.

• Trophy buy: RXR bought Manhattan’s 1M SF 590 Madison Ave. for $1.08B, the city’s biggest office deal in years. 

• Cool streets: LA is rapidly adding trees and shade structures to beat extreme heat before the 2028 Olympics. 

• Debt stress: CRE CLO distress jumped 88 bps to 11.8% in July as loan maturities grew, with over 65% past due dates. 

• Cautious lending: Despite CRE values falling up to 21% since 2022, lenders are actively financing core properties with conservative 60% LTV ratios. 

• Steady strength: REITs grew NOI 4.8% in Q2 2025 and kept low-leverage, fixed-rate debt despite slight FFO dips.

• Rent standouts: July’s US average rent rose 0.9% to $1,637, with San Francisco and Orange County posting rare West Coast gains. 

• Golden market: REITs are ramping up seniors housing acquisitions at below replacement cost, fueled by rising demand, constrained supply, and strong demographics.

• Stock swap: Favo Capital acquired Hollywood’s 273-unit 1818 Park for $190M in an all-stock deal, adding assets to bolster its private credit business. 

• Neighborhood lift: NYC approved the Jamaica plan to add 12K homes, $300M in upgrades, and new zoning for mixed-use growth. 

• Cautious outlook: AvalonBay trimmed its second-half 2025 forecast amid slower job growth, bad debt, and supply challenges.

•  Industrial refi: Fundrise secured $352.7M from Goldman Sachs and TPG to refinance 12 industrial assets totaling 3.18M SF across the Mid-Atlantic and Sun Belt 

• Seattle expansion: Terreno Realty bought a nine-property, 720K-SF industrial portfolio in Woodinville, WA, for $232.6M, the largest 2025 King County sale. 

• Intel aid: The Trump administration is in talks to buy a stake in Intel to support its delayed Ohio chip hub.

• Retail rebound: US retail posted early 2025 net absorption declines, but investment rose 23% and small-store openings still exceeded closures.

• Capital raise: Simon Property Group will issue $1.5B in notes to refinance $1.1B in debt and support other needs. 

• Tariff rush: Retail sales rose 0.5% in July as shoppers sped up purchases ahead of looming tariffs.

• Tenant retention: With new shopping center construction limited by high costs, Philadelphia-area landlords are expanding and renovating existing properties to boost revenue and retain tenants.

• Menu makeover: Brinker will pilot Chili’s redesigns in Dallas to guide a 10%/yr global remodel starting 2027 and expand into new markets.

• Class B comeback: Upgraded 1980s–1990s DFW towers are winning tenants with high-end amenities, helping narrow the vacancy gap with trophy offices.

• Tech takeover: Major tech firms like Apple and Nvidia are buying discounted Bay Area offices to secure R&D hubs, control costs, and remove prime space from the leasing market. 

• Midtown meltdown: Worldwide Plaza’s value has plunged to $345M, down $1.4B since 2017, due to tenant losses, looming vacancies, and debt troubles. 

• Market strain: US office distress hit $122B in Q2 despite improved leasing, with more lender sales and foreclosures expected.

• Sister stays: Groogrux Hotels launched two contrasting luxury boutiques in New Orleans’ Garden District, drawing locals and visitors, with a third property planned.

📈 CHART OF THE DAY