Avoid the FOMO: The CRE News You Need to Know—July 7

The Latest Data, News, and Analysis Impacting the Commercial Real Estate Market

The LightBox CRE Activity Index soared to 113.9 in June, its highest level since May 2022 and a strong signal that the market’s transactional engine is shifting into high gear. The 8% monthly increase not only reversed May’s modest pullback but also underscores healthy midyear momentum in CRE despite ongoing uncertainty around tariffs, interest rates, and the broader economy. Unlike lagging indicators tied to closed deals, the Index is built on more than 30,000 monthly data points spanning three functions that precede transactions: property listings, lender-driven appraisals, and environmental due diligence. After a volatile few months, the June uptick is an encouraging sign that the CRE pipeline is gaining momentum, not retreating.

The LightBox Take: Barring an unforeseen market shock, the latest Index portends a healthy CRE transactions climate in the months ahead. Property listings have now been on the rise for six consecutive months, lender appraisal volume rebounded after a sharp May decline, and demand for Phase I environmental site assessments showed a healthy 10% uptick. Together, these are strong indications of active engagement by sellers, buyers, and lenders, a sign that the market is doing more than holding steady; it’s preparing for a busy second half. The 21% year-over-year gain in the Index reinforces this forward-looking strength.

The U.S. economy added 147,000 jobs in June, but nearly half of those were in the government sector, masking what could shape up to be a worrying slowdown in the private sector. Businesses added just 74,000 jobs in June, the weakest growth in eight months and the U.S. unemployment rate declined slightly to 4.1%, down from 4.2% in May. More than half of private industries cut jobs, marking only the third time that’s happened since April 2020. Economic uncertainty tied to high interest rates, tariff volatility, and a crackdown on immigration is driving caution. Companies from Warby Parker to Procter & Gamble and Microsoft are freezing hiring or cutting jobs, opting for tighter teams and AI-fueled efficiencies over workforce expansion.

It’s worth noting that sectors like healthcare, hospitality, and construction saw modest gains, but represent only a minority of total private employment. Most industries—including professional services, manufacturing, and wholesale trade—cut a combined 20,000 jobs. This lopsided growth pattern raises red flags for sustained employment momentum.

The LightBox Take: The June report is evidence that the labor market’s strength is softening heading into the second half of 2025, offering little incentive for the Fed to cut interest rates at its July 29–30 meeting. While government hiring propped up the headline number, weak business job creation and only a slight drop in unemployment to 4.1% signal a cooling, not collapsing, labor market. Fed Chair Jerome Powell emphasized a “meeting-by-meeting” approach, citing a still-strong job market that allows time to assess the impact of tariffs, immigration limits, and policy changes. With inflation still under watch and limited signs of labor distress, we’ve seen that the FOMC members are essentially split on the forecast for the so-called dot plot…the Summary of Economic Projections showed a growing divergence: Eight officials foresaw two cuts this year while seven policymakers predicted there would be none.

Commercial real estate transactions remain strong in 2025, even as sentiment surveys and macroeconomic signals suggest mounting headwinds. According to preliminary data, the LightBox Transactions Tracker highlights a total of 94 major deals that closed in June, including 40 valued more than $100 million and another 54 between $50–$100 million. That marks a 14.6% rebound from May volume and 16% below April’s 2025 high-water mark of 112 deals. Also worth noting is that deals in the $50-$100M category fell 46% in May as debt markets became more cautious in the wake of the April tariff announcement but rallied back by a strong 45% in June.

By asset class, nearly half of June’s nine-digit deals were in the apartment sector, including a $300 million deal in Washington, DC and two separate deals of nearly $200 million in the Seattle market. The largest office deal was a $350 million deal in Sunnyvale, CA and another in Atlanta, the Piedmont office center, closed at $200 million, nearly $180 million below its 2021 prior purchase price. Retail is also showing signs of life with four deals over $100 million and another eight in the $50-100 million range.

The LightBox Take: The growing volume of nine-figure transactions is encouraging as it reflects active engagement from sellers, buyers, and lenders, reinforcing that real deals are still getting done, even in an environment that has grown more disciplined and selective environment after a volatile first half of the year. Despite some monthly fluctuation, June’s volume of 94 deals came in above the 2025 average of 92 and well above February’s low point of 80 transactions.

This week’s July 9 tariff deadline could mark a pivotal moment in global trade dynamics. President Trump’s 90-day suspension of “reciprocal tariffs” is set to expire, potentially triggering new levies ranging from 10% to 70% on imports from countries without finalized trade agreements. While the U.S. has secured deals with the U.K., Vietnam, and China, negotiations with key partners like the EU, Japan, and India remain unresolved. The imposition of these tariffs could disrupt global supply chains, elevate consumer prices, and heighten inflationary pressures. Industries such as manufacturing, agriculture, and retail may face increased costs, potentially leading to reduced profit margins and job cuts. Financial markets have already shown signs of volatility, with investors expressing concerns over the potential economic fallout. Moreover, the tariffs could strain diplomatic relations, as affected countries might retaliate with their own trade barriers, further escalating tensions. The uncertainty surrounding the deadline has prompted businesses to adopt a cautious approach, delaying investments and hiring decisions.

The LightBox Take: While last week’s passage of the federal budget bill removed a major short-term risk for market and averted a government shutdown, the expiration of the 90-day tariff suspension could inject significant volatility into global markets, particularly if steep new levies are imposed on key trade partners like the EU, Japan, and India. With U.S. average tariff rates already up sharply, from 2.4% in 2024 to 18.8% today, another escalation risks further inflaming inflation, squeezing supply chains, and shaking investor confidence. For CRE professionals this will mean higher import costs and slower capital spending, dampening demand in logistics, manufacturing, and retail-linked assets.

Blackstone acquired another $2 billion in commercial real estate loans from Atlantic Union Bankshares, continuing its aggressive push into discounted debt. The loans, backed by apartments and retail properties, are performing but were originally issued before interest rates surged. The portfolio deal closed at a 7% discount, bringing its total acquisitions of distressed commercial property debt to $20 billion over the past two years. This sale comes on the heels of Atlantic Union’s merger with Sandy Spring Bank, whose loan book forms the bulk of the portfolio. The move frees up capital for new lending and signals how bank consolidation may drive further loan sales, especially among smaller lenders hit hard by rate hikes and exposure to commercial real estate. Meanwhile, Blackstone continues to bet on long-term upside in real estate-backed credit, buying at a discount while others retrench.

The LightBox Take: Blackstone’s latest $2B loan purchase underscores a growing trend: distressed or underperforming CRE loan portfolios are quietly hitting the market as banks consolidate, mark down assets, and shift capital. These behind-the-scenes trades offer a window into market recalibration and potential volatility ahead. With pressure on regional banks mounting and policy shifting toward more merger-friendly regulation under the Trump administration, more portfolios like this are expected to hit the market.