Avoid the FOMO: The CRE News You Need to Know—July 21

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

Last week’s Consumer Price Index (CPI) data showed a 0.3% rise month-over-month, following a modest 0.1% gain in May. Over the past 12 months, CPI climbed to 2.7%, up from 2.4%, marking its highest level since late spring. A growing share of these price pressures is traceable to tariffs as inflation on imported goods like apparel, appliances, and household furnishings has intensified, a sign that businesses are beginning to pass higher input costs to consumers. The Fed’s Beige Book and officials like New York Fed President Williams and Governor Kugler warn that tariff impacts are “only starting to surface” and could add around one percentage point to inflation through late 2025. Meanwhile, retail sales data indicate that spending remains resilient with June sales up 0.6%, suggesting consumers are absorbing moderately rising prices without significantly cutting back, at least not yet. The latest Producer Price Index (PPI) release adds nuance to the inflation picture. While the overall index was flat in June, a rise in goods inflation at the producer level could foreshadow further CPI gains in the coming months.

The LightBox Take: The latest report may be a sign that tariff-driven price pressures are gaining traction. While PPI remains tame, both CPI and PCE are edging higher, suggesting downstream pricing pressures are beginning to materialize more clearly. Future PPI reports will be very telling as a bellwether for how upstream pricing pressures may soon ripple downstream to consumers. Core inflation remains sticky and is not retreating at a pace that would justify imminent Fed rate cuts at the late July meeting, despite mounting pressure on Chairman Powell.

Major U.S. banks reported second-quarter results last week, painting a cautiously optimistic picture of the economic and credit landscape. JPMorgan’s CEO Jamie Dimon struck a more upbeat tone than in Q1, describing the U.S. economy as “resilient” and buoyed by potential tax reform and deregulation. Wells Fargo echoed this sentiment, with CEO Charles Scharf noting strong consumer performance and stabilized CRE valuations, though residential and commercial real estate loan volumes continued to decline. Banks remain wary of the office sector. Wells Fargo’s CRE book shrank 1.1% year-over-year, and JPMorgan’s CRE banking revenue dipped 1%. Most banks are shedding or holding back on office exposure rather than issuing new loans. Commercial real estate losses, especially in the office space, are moderating but still expected to persist within anticipated ranges. A broader trend of CRE loan sales to private credit players, like Atlantic Union’s recent $2B deal with Blackstone, underscores that lenders are in the slow process of de-risking their balance sheets, while selectively increasing loan originations.  

The LightBox Take: The latest earnings from big banks showed that optimism is returning, but with tempered expectations. While banks continue to pull back from riskier segments, like office, they are selectively extending credit and balancing internal risk controls with the need to compete for quality deals in a crowded capital market. The focus of large banks is on sectors perceived as lower risk, like industrial, multifamily, or stabilized mixed-use, leaving more speculative projects to CMBS or private lenders.

June saw a measurable rebound in CRE dealmaking, according to LightBox’s analysis of major transactions, with 49 nine-figure transactions closing, a slight increase from 45 in May. More significantly, June brought a surge in mid-cap deals ($50-$100 million), rising 57% to 58 deals from 37 the month prior. This resurgence reflects a growing investor appetite for deals with clearer pricing and more accessible financing. The June LightBox CRE Activity Index echoed this momentum, climbing to 113.9, its highest level since May 2022, signaling strength in due diligence, listings, and appraisal workflows. On the dealmaking front, multifamily led the pack once again with 18 nine-figure deals and another 15 mid-cap trades. Retail also had a comeback moment, headlined by the $1.57 billion sale of 270 GetGo locations. Overall, investors are focusing on strategic positioning, underwriting discipline, and asset-level clarity in an increasingly uncertain macro environment.

The LightBox Take: June’s activity signals a cautiously optimistic outlook for the second half of 2025. Mid-cap momentum is likely to continue, especially in sectors like multifamily and industrial, where fundamentals remain solid and perceived risk is relatively low. Distress, owner-occupier demand, and redevelopment potential will drive top-end activity, while traditional underwriting remains tight. Despite uncertainty over tariffs, interest rates, and macro volatility, CRE investors are proceeding with caution.

Despite talk of a cooling warehouse sector, three major deals show that institutional capital is still targeting strategic opportunities in strong markets. Brookfield’s $428 million acquisition of 53 light industrial buildings across the Sun Belt (Dallas, Houston, Atlanta, Nashville) underscores this trend. The 3.6M -square-foot portfolio is 96% leased and expands Brookfield’s logistics platform to more than 75 million square feet. Meanwhile in Chicago, Bridge Industrial is flipping Ford City Mall into a more than 900,000-square-foot logistics hub with 92 docks and 1,000 parking spaces. The $150 million redevelopment taps into the mall-to-warehouse adaptive reuse boom, particularly in urban infill locations. With industrial vacancy in Chicago less than 5%, the project reflects a bet on continued last-mile demand and constrained supply. Prologis adds more fuel to the story, launching more than $900 million in Q2 warehouse projects, nearly tripling last year’s pace, 65% of which is pre-leased. CEO Hamid Moghadam called it “the strongest demand of his career.”

The LightBox Take: The latest wave of industrial deals signals a renewed focus on strategic growth for the right assets in the right markets. Adaptive reuse projects like Bridge’s Ford City flip highlight how underperforming retail is being transformed into high-performance logistics. Brookfield’s and Prologis’s aggressive moves show that institutional confidence remains high, especially in supply-constrained, demand-heavy markets.

Last week’s sale of Portland’s iconic “Big Pink” office tower for just $45 million, a dramatic 88% drop from its $372 million price tag in 2015, is a big bet on the future of Portland’s downtown office market. The buyer, Jeff Swickard, an automotive mogul and founder of Vegas-based Swickard Auto Group, paid all cash and pledged to invest $150 million more in renovations. His vision is to transform the 42-story tower, Oregon’s second-tallest building, into a vibrant mixed-use hub with restaurants, wellness spaces, and multi-floor experiences designed to draw people back into downtown. With CBD vacancy hovering around 35%, the new owner is on a mission to draw businesses back to downtown Portland.

The LightBox Take: The reinvention of this Portland landmark could serve as a model for other struggling downtowns like San Francisco, Chicago, and Seattle that are also grappling with high vacancies and post-COVID disruption. As major tenants like banks shift to suburban headquarters, central business districts are challenged to backfill vacant space. With hybrid work reshaping demand, downtowns that lean into lifestyle, community, and mixed-use redevelopment may find a path forward.