The CRE Weekly Digest by LightBox

For the week ending August 15, The CRE Weekly Digest team digs into a tale of two markets. Hot wholesale inflation data dampened hopes for a jumbo September rate cut, but investors are still more focused on the prospect of cheaper money than the persistence of higher prices. Manus Clancy warns that U.S. equities are looking dangerously complacent – with historically high P/E ratios, low volatility, and frothy valuations – but sees a steadier hand in commercial real estate. LightBox transaction data shows $160B in 2025 deals to date, with July posting a 10% jump in deals over $50M, and a broad, sober buyer pool keeping valuations grounded. Dianne Crocker spotlights that 54% of office deals are trading at a discount, while multifamily remains the most in-demand listing type. The team also covers steep Pasadena office price cuts, San Francisco hotel distress, and the flow of plentiful (often private equity) capital into even riskier CRE projects. Plus: Disney-branded housing, relocation cash incentives from unexpected cities, and why insurance costs could be CRE’s biggest near-term headwind.00:18 Market Complacency and Inflation Concerns 01:57 Frothy Equities vs. Steady CRE Markets 03:47 CRE Market Activity and Measured Optimism 09:08 LightBox Data Dive: July Transactions 17:46 Noteworthy Transactions and Market Trends 29:19 Upcoming Webinar and Disney “Storyliving” Have questions for the pod team? Send them to Podcast@LightBoxRE.com. www.lightboxre.com

We welcome back Ryan Severino, Managing Director, Chief Economist and Head of Research at BGO, for a sweeping conversation on the macroeconomic forces shaping commercial real estate in the back half of 2025. Fresh off being named one of PERE’s 100 most influential figures in global real estate, Ryan joins the LightBox team to unpack everything from the timing of potential rate cuts and labor market risks to the rise of AI-driven forecasting and why multifamily may be the ultimate outperformer in a high-tariff environment.With his signature contrarian perspective, Ryan explains why he correctly predicted fewer, later rate cuts this year and why he sees more downside risk in the labor market than runaway inflation. He unpacks how trade policy shifts and tariff shocks are distorting Fed strategy, creating "triple whammy" risks for consumers, and slowing – but not halting – CRE recovery. You'll also hear why his firm, BGO is doubling down on AI-powered forecasting, how Gen Z is reshaping retail demand, and why office might finally be turning a corner.From real-time data revisions to trillion-point predictive models, this episode is packed with timely insights on what's working, what’s wobbly, and what lies ahead for CRE. Don’t miss Ryan’s bold predictions and the one indicator he’s watching most closely.01:29 Economic Predictions and Market Analysis03:11 Impact of Recent Job Reports06:08 Fed's Dual Mandate and Rate Cuts17:52 Commercial Real Estate Market Sentiment24:29 Sector-Specific Insights: Multifamily, Office, Industrial, and Retail35:42 The Role of Technology in ForecastingHave questions for the pod team? Send them to Podcast@LightBoxRE.com. www.lightboxre.com

While the Fed held rates steady as expected, the bigger story may be what's underneath:Corporate earnings show tariffs are starting to bite.  Economic data prints are increasingly mixed. And the labor market is still holding out. But for how long? Manus takes a minute to assess the Fed funds rate stalemate. And he provides a thought about why a rate cut might be prudent right now. Dianne sees 2025 shaping up like déjà vu: rate cuts always just out of reach, as the market tiptoes through cooling demand and growing consumer strain.CRE, though, keeps humming. July deal volume jumped. LightBox’s own market sentiment survey shows steady to strong expectations for the second half. Phase I ESA activity rose 13% year over year. Multifamily is leading with major trades in New York City and the South Bronx. Even office is moving, with buyers chasing discounts and pricing finally settling. The team also flags a growing concern that data centers are starting to monopolize power, labor, and capital, which may potentially strain resources for other projects.The episode close reflecting on the loss of Blackstone’s Wesley LePatner. A respected leader and fierce advocate for women in commercial real estate, her passing is a profound loss for the entire CRE finance community. Our condolences to all the victims of the tragedy.00:15 Federal Reserve's Decision and Economic Impacts01:34 Tariffs and Their Economic Consequences04:19 Labor Market Insights11:05 LightBox Midyear CRE Market Sentiment Survey Results20:17 Multifamily and Mixed-Use Transactions26:51 Office Market Trends33:44 Data Centers and Construction Resources38:57 Tragedy in Midtown: Remembering Wesley LePatnerHave questions for the pod team? Send them to Podcast@LightBoxRE.com.www.lightboxre.com

Rebecca Rockey, Deputy Chief Economist and Global Head of Forecasting at Cushman & Wakefield, joins the LightBox team for a focused conversation on the macroeconomic forces shaping commercial real estate in the back half of 2025. With stagflation creeping in, tariffs hitting record highs, and policy uncertainty clouding forecasts, Rebecca breaks down what’s different about this cycle and why the road ahead could be bumpier than many expect. From the surprising resilience in CRE capital markets to growing inflationary pressures in the goods economy, she explains why retail and industrial are especially vulnerable, and how the multifamily and office sectors are navigating this transition. Rebecca shares why construction costs are poised to rise 4.5% due to tariffs, how that could pause new development, and what that means for vacancy and rent trends heading into 2026. She also weighs in on where the Fed might land on rate cuts, what’s really driving office recovery (hint: it’s not just RTO), and why 2027 could shape up to be a banner year for CRE. Packed with data, context, and a dose of Rolling Stones wisdom, this episode is a must-listen for anyone looking to make sense of an uneven economic outlook. 01:04 Stagflation Watch: Are We Already There? 03:35 Policy Shocks & Forecasting in Uncharted Waters 04:42 Resilience in Capital Markets 13:00 Sector Snapshot: Retail, Industrial, Office & Multifamily 21:18 Construction Cost Crunch & Development Slowdown 31:17 The “One Big Beautiful Bill” & What It Means for CRE 34:00 Crystal Ball Closeout: Labor Signals, CRE Resilience & What’s Next Have questions for the pod team? Send them to Podcast@LightBoxRE.com. www.lightboxre.com

This week’s slate of economic data left pundits divided even as investors cheered on rising markets. Retail sales surprised to the upside, inflation was muted, and bank earnings beat forecasts. However, deeper trends raise caution: tariff receipts are surging, homebuilders are cutting prices, and the Trump–Powell standoff briefly rattled equity and bond markets.Manus remains bullish yet uneasy, warning that someone is absorbing billions in monthly tariff costs, and the bill may soon come due. Dianne points to the mixed results of the LightBox sentiment survey and leans on Jamie Dimon’s line this quarter: “forecasting is a waste of time.”The LightBox Appraisal Index rose in Q2 on retail and industrial demand, but cost uncertainty still looms. Industrial sector activity continued with big bets from Brookfield, Prologis, and Blackstone. Office continues to struggle evidenced by a round of transactions with Portland’s “Big Pink” tower selling at an 88% haircut. And outside the CRE market, the team weighs in on reports of Delta's AI-powered ticket pricing. What are your thoughts?We want your take. LightBox is about to close the Midyear 2025 CRE Market Survey and we want to hear from experts like you across valuation, due diligence, lending, investment, and brokerage. We’re exploring your reflections on the first half of 2025 and your outlook for the months ahead. Click here to take the survey > The survey closes EOD Friday, July 18th, and we’ll be sharing the results shortly thereafter.02:51 Tariffs and Inflation Impact09:01 Trump-Powell Tensions12:00 LightBox Lender Appraisal Insights14:59 Big Transactions in Industrial Real Estate18:02 Office Market Challenges20:46 Infrastructure Plays for Data Centers24:01 Retail to Industrial Transformations26:49 The AI Price is Right?Have questions for the pod team? Send them to Podcast@LightBoxRE.com.www.lightboxre.com

David Putro, Head of Analytics for Morningstar Credit, doesn’t sugarcoat it. In this candid conversation with the LightBox team, he offers an unflinching look at where distress is building in commercial real estate and why resolution is moving at a crawl. With a sharp focus on office, multifamily, and malls, David explains why this cycle is unfolding slower than the last, and why some properties may never exit special servicing. From billion-dollar loans stuck in limbo to zombie malls surviving on post-COVID extensions, he lays out the long road ahead for asset resolution.  The picture of growing distress offers a stark counterpoint to the healthy surge in CMBS lending so far in 2025.  So, what gives?David breaks it all down and shares what Morningstar’s “Boots on the Ground” research reveals that spreadsheets miss (think vacancy patterns, tenant quality, and hidden red flags that influence recovery timelines). Don't miss David’s outlook on where distress is headed for the rest of 2025, why office assets remain frozen, and what really keeps credit pros like him up at night (spoiler: it’s not just interest rates).00:55 Market Paradox: CRE Distress and CMBS Issuance02:05 Challenges in Multifamily and Office Sectors03:49 CMBS Purgatory and Loan Resolutions10:59 Mall Distress and Adaptive Reuse20:07 Boots on the Ground: Real Estate Insights27:08 Future Outlook and ConcernHave questions for the pod team? Send them to Podcast@LightBoxRE.com. www.lightboxre.com

It’s halftime in 2025, and The CRE Weekly Digest team is back with a data-driven gut check on a market that’s proving more resilient than expected. Despite tariff shocks, geopolitical tension, and consumer gloom, CRE hasn’t blinked. In fact, capital is flowing, transaction volume is up, and nine-digit retail deals are making a surprise comeback.Manus sees signs of a second half surge, powered by engaged lenders, an expanding buyer pool, and the long-awaited return of Big Tech to the office market. Dianne flags soft spots, namely inflation pressure, GDP drag, and the retail sector’s tariff exposure, but concedes this market doesn’t rattle easily.The team also breaks down the latest CRE Activity Index, big bets from Apple, and whether fireworks should be tariff-exempt in the Big Beautiful Bill. The collective forecast: proceed, but don’t skip due diligence.And in true Digest fashion, they close with song picks that capture the CRE mood: Van Halen, Mumford & Sons, and a dose of Kelly Clarkson.We want your take. LightBox just launched the Midyear 2025 CRE Market Survey to hear from experts like you across valuation, due diligence, lending, investment, and brokerage. We’re exploring your reflections on the first half of 2025 and your outlook for the months ahead. Click here to take the survey >  The survey closes Friday, July 18th, and we’ll be sharing the results shortly thereafter. 01:09 Market Resilience and Key Takeaways05:35 Lightbox CRE Activity Index Analysis10:15 Transaction Trends and Big Deals13:21 Interest Rates and Fed Meetings19:57 Selective Hiring Trends and Labor Market Insights22:04 Optimism and Reservations for the Second Half31:20 Sector Rapid-Fire Forecasts: Office, Multifamily, Industrial, and RetailHave questions for the pod team? Send them to Podcast@LightBoxRE.com.www.lightboxre.com

It’s a milestone week at The CRE Weekly Digest—our one-year anniversary and 52nd episode. From launch day to today, we’ve unpacked the headlines, challenged assumptions, and surfaced the trends that matter most for CRE professionals navigating uncertainty. This episode is no different. Markets are running hot, with stocks brushing all-time highs despite risks from Middle East volatility to tariff headwinds and the Powell–Trump standoff. Is it optimism or selective amnesia? Manus calls it like he sees it, with Dianne and Martha weighing in on rate cut speculation, earnings compression, and investor fatigue.In CRE, conviction is showing up in the form of major bets: a $211M construction loan in Miami’s Edgewater, a Manhattan office-to-resi conversion, and a surge in data center demand, even as zoning friction and energy strain rise. Cincinnati tops rent growth rankings, and Walmart experiments with dark stores and drone delivery.We also give an advance look at the latest LightBox CRE Activity Index and spotlight the metros showing real momentum in environmental due diligence.And finally, a big thank you to our listeners—from NYC to Singapore—for showing up, weighing in, and pushing the conversation forward every week. Here’s to the next 52 episodes.00:52 Geopolitical Tensions and Market Reactions07:03 Interest Rates and Economic Outlook12:29 New York City Mayoral Election and Potential Fallout19:14 The Rise of Data Centers in the AI Era24:57 Gyms are Back and Part of the Amenity Draw27:39 Bold Moves in Multifamily and Office-Resi35:11 Innovations in Retail: Dark Stores and Drone Delivery37:00 Celebrating One Year of Insights with the Pod TeamHave questions for the pod team? Send them to Podcast@LightBoxRE.com. www.lightboxre.com

What does it take to make a property—and a team—resilient in today’s volatile CRE landscape? Holly Neber, Chief Resilience Officer at AEI Consultants, joins the LightBox team to unpack the rising urgency around climate risk, insurance hurdles, and resilience planning. A 30-year environmental veteran and chair of the ASTM task group behind the industry’s first Property Resilience Assessment (PRA) guide, Holly breaks down how stakeholders are turning climate risk into actionable insight—before it derails deals or distorts value. From PRAs and insurance blow-ups to investor ‘walk-aways’ and model fatigue, Holly gives a masterclass in what CRE pros need to know now. She explains why resilience isn’t just physical—it’s cultural—and why the next wave of opportunity will belong to those who can identify risk and adapt. Don’t miss her insight on lender vs. investor expectations, how climate risk is already showing up in property pricing, and the mindset shift she sees among the next generation of consultants. This one’s packed with clarity, candor, and a forward-looking vision CRE needs right now. 01:15 Understanding Property Resilience04:54 Climate Risk and Insurance Challenges05:32 The ASTM Property Resilience Assessment Guide09:37 Investor and Lender Perspectives on Climate Risk14:37 Holly Neber's Journey and Leadership16:13 Impact of Climate Risk on Property Valuation26:50 Managing and Inspiring Teams29:58 The Evolution of Environmental Site AssessmentsHave questions for the pod team? Send them to Podcast@LightBoxRE.com. www.lightboxre.com

Inflation cools, tariff tensions ease, and investors start breathing a little easier, but is CRE catching a tailwind? The team digs into surprisingly positive CPI and PPI reports, unpacking why the market's fears may have overshot reality for now. With the May LightBox CRE Activity Index posting its first monthly decline of the year, the big question is whether this is a blip or the beginning of a new trend. Meanwhile, the conversation shifts to headlines shaking up sentiment: civil unrest in L.A., a federal ruling on eviction bans, and a proposed FEMA shutdown that could upend disaster recovery and reshape pricing in high-risk markets. As construction costs face new labor pressures and the Fed stays in wait-and-see mode, the team weighs what it all means for commercial real estate’s second half. On the ground, not all markets are slowing, Florida still has some upside, with luxury apartments trading hands at a premium and retail/hotel deal volume picking up steam. And in the office sector, a milestone moment: for the first time in 25 years, more space is being demolished or converted than built. The outlook? Cautiously optimistic. Or, as Manus puts it: “We went four for four this week—and that’s reason to feel good.” Also on the radar: socks, three-woods, and why a bagel might just be the best Father's Day gift of all.00:46 Macroeconomic outlook: CPI, PPI, and tariffs 06:16 LA Spotlight: CRE implications 09:35 Eviction bans, rent caps & regulatory risk 13:51 FEMA phase-out: Resilience and rebuilding 16:04 LightBox May CRE Activity Index Dips 22:05 Office conversion trends & market bifurcation 28:00 Multifamily, retail, hotel: The dogs are hunting 30:37 South Florida trophy deals, Father's Day forecasts & more Have questions for the pod team? Send them to Podcast@LightBoxRE.com.www.lightboxre.com