Avoid the FOMO: The CRE News You Need to Know—June 23

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

At last week’s fourth FOMC meeting of the year, the Fed stayed on its “wait and see” track, opting once again to hold off on any rate change to see how the economy responds to tariffs. The move was hardly surprising. Last Monday financial markets were pricing in a nearly 100% likelihood that the Fed would leave the benchmark rate unchanged. In the weeks leading up to the meeting, Fed officials expressed reluctance to lower rates out of concerns that tariffs could reignite high inflation, just when it was approaching the Fed’s 2% target. With this latest decision, Powell leaned on recent data highlighting the economy’s resilience noting that the labor market is “in balance and not the source of inflationary pressure,” but that “we expect a meaningful amount of inflation to arrive in the coming months.”

The LightBox Take: As midyear approaches, the Fed is biding its time. Although inflation data has defied fears thus far, showing only muted increases in May, the risks of higher unemployment and inflation are rising given the uncertainty in the timing and scope of tariffs. Economic projections released last week by Fed officials point to growth slowing sharply this year, with unemployment rising and inflation picking back up. Policymakers expect to cut rates twice in the second half and that inflation will rise above 3% in the coming year. A July 9 deadline for a slate of higher tariffs looms for major trading partners with the next Fed meeting just a few weeks later at the end of July. Until trade policy specifics take shape, CRE sentiment will likely remain cautious.

New Jersey’s 2025 gubernatorial race has shined a spotlight on a massive economic lever: NJ Transit’s nearly 1,800 acres of land spread across more than 700 parcels statewide. Both major-party candidates aim to redevelop this portfolio—whether through a state-led housing agenda or local-market leveraging—making the issue a rare point of bipartisan momentum. But New Jersey isn’t unique.

Across the U.S., transit agencies collectively hold billions in underutilized real estate—including parking lots, depots, and station-area parcels—that are prime for redevelopment. McKinsey estimates that U.S. transit agencies could realize a 10–20% boost in non-fare revenue by tapping into joint development opportunities and leasing surplus land for mixed-use, affordable, and transit-oriented development.

Using LightBox Vision, our analysts mapped NJ Transit’s entire portfolio with overlays for zoning, infrastructure access, CRE adjacency, and ownership context—revealing both clear redevelopment potential and hidden complexities like fragmented titles, environmental constraints, or land locked parcels. Case studies, such as Waldwick, show how strategic public-private activation can deliver housing, civic value, and tax revenue, while also preserving landmark structures. With campaign platforms converging on transit land, stakeholders don’t need projections—they need parcel-level preparedness and political clarity to act once the primary passes.

The LightBox Take: Transit agency land is poised to become a catalyst for CRE innovation—not because its mass quantity, but because it represents politically backed, geographically strategic real estate. With hundreds of parcels already mapped and a clear bipartisan signal emerging, New Jersey mirrors broader U.S. trends in transit-oriented development. CRE professionals who understand the parcel-level context—zoning, ownership, site conditions—will be ready to move swiftly once legislative and political frameworks unlock the next wave of development.

In the latest CRE Weekly Digest episode, Holly Neber, newly appointed Chief Resilience Officer at AEI Consultants outlined how the increasing frequency and severity of hazard events is driving consideration of resilience in the built environment. Neber served as Task Group chair on a new ASTM Property Resilience Guide that gives investors, for the first time, a process for screening properties for exposure to natural hazard and climate risks. Neber observed that “investors are already integrating some type of PRA into their due diligence, and also looking at energy benchmarking laws.” Life insurance companies that lend on commercial properties are being “much more proactive about understanding what might be going on with an asset on the physical risk side so they’re incorporating a PRA into the Property Condition Assessment scopes of work.” Asked what she’s seeing with AEI’s clients giving growing market uncertainty, Neber provided some reassurance: “The CRE market is very resilient, and one person’s loss might be another person’s gain. For those of us who serve the transactions industry, we’re seeing a lot of continued activity. It might be different players but I’m seeing people who have been on the sidelines now jumping in.”

The LightBox Take: Best practices are emerging on the climate risk front as investors, insurers and lenders look to better understand risk management and increasingly view climate risk data as a necessary element of a broader risk management workflow. The LightBox CRE Activity Index and Transactions Tracker both support Neber’s observation that momentum is continuing even in the face of growing uncertainty. June’s data will be very telling in terms of whether that momentum continues or begins to lose steam.

U.S. homebuilder sentiment has plunged to a two-and-a-half-year low this week, with the NAHB/Wells Fargo Housing Market Index retreating to 32 from 34 in May—well below the 50 mark that signals broad optimism. The decline stemmed from lower ratings across current sales, future sales expectations, and buyer traffic, particularly in the South, Midwest, and West. High mortgage rates—averaging 6.84%—along with trade policy and economic uncertainty were cited as key headwinds. As a result, 37% of builders announced price cuts, the highest rate since the HMI began tracking this metric in 2022, while 62% offered sales incentives. On the construction front, U.S. housing starts remained modest, with April posting 1.361 million units, roughly flat month-over-month and slightly below last year’s pace. Institutional forecasts, such as from Zelman Associates and the NAHB, anticipate further moderation in residential construction as affordability pressures restrain new project approvals and permit issuance.

The LightBox Take: Builder sentiment and housing starts show a market caught between demand and affordability constraints. The widespread use of incentives and price cuts—now near record highs—demonstrates that refinancing won’t rely on volume alone. CRE investors should focus on localized supply-demand dynamics, land strategy tied to affordability metrics, and how incentives are shaping market balance. As homebuyer activity remains tepid, successful residential development will hinge on precise, data-informed site selection and strategic pricing. In today’s climate, skid-resistant zones—not volume—will attract capital and unlock next-cycle opportunities.

In a market where refinancing has become a proving ground, two large-scale refi deals—one urban mixed-use, the other industrial logistics—signal that capital is still flowing to assets with strong fundamentals and institutional sponsorship.

PSP Investments secured a five-year, $1.03 billion loan from Wells Fargo, Goldman Sachs, and Morgan Stanley to refinance The Wharf, the high-profile D.C. waterfront project it recently acquired for $1.8 billion. The deal reflects lender confidence in mixed-use assets that deliver diversified income across office, multifamily, hotel, and retail—especially in markets with sustained demand and limited new supply.

In parallel, Invesco Real Estate’s private credit arm, INCREF, provided $355 million in refinancing to Bridge Logistics Properties for a 24-asset national industrial portfolio. The financing supports stabilized, last-mile facilities with durable rent rolls and long-term e-commerce demand.

Together, these deals show that while the credit environment remains tight, refinancing capital is available—for borrowers with institutional credibility and assets that perform. Lenders aren’t reaching—but they’re still showing up when the math works.

The LightBox Take: These two refinancing deals illustrate a debt market that’s cautious, but far from closed. Institutional lenders and private credit vehicles are still stepping up to finance high-performing assets in sectors with strong fundamentals and clear income visibility. In today’s environment, refinancing isn’t about risk-taking—it’s about conviction. Deals are getting done, but the bar is higher: asset quality, tenancy, and sector durability all matter more than ever. These transactions show that for sponsors with strong assets and strong relationships, capital is still moving—but with precision.