← The TreppWire Podcast: A Commercial Real Estate Show
The TreppWire Podcast: A Commercial Real Estate Show
366. 2025 Issuance Tops $120B, Fannie/Freddie Lending Caps, NYC–Cincinnati Office Pricing Gaps, Market Trends & More
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Welcome to the TrapWire Podcast, the show where commercial real estate meets data and insights. This is our Week in Review for the week ending December 5, 2025. I'm Haley Keen with TREP, a data modeling and analytics firm for the CMBS commercial real Estate and CLO markets. I'm with Lonnie Hendry, Chief Product Officer, and Steven Bushbaum, Research Director. This week we're coming off a strong start to the holiday season, with Black Friday showing consumers are still spending at a steady pace, but the real focus now shifts to the macro data. Friday's delayed PCE report is the big number heading into next week's FOMC meeting, and Powell's recent comments, including his reminder that a December cut isn't a done deal and his acknowledgement that the Fed is split, are still shaping the policy conversation with ism, ADP and Jobless claims all hitting this week. Markets are watching to see whether demand and hiring are holding up as we head into the final month of the year. On today's show, we'll also look at a few of the big themes making headlines in CRE. The FHFA just raised the 2026 multifamily caps for Fannie and Freddie to $88 billion each, a more than 20% increase from last year, which signaled strong support for liquidity in the multifamily debt market heading into a period of refinancing pressure. We'll break down why the higher caps matter for the market, especially as older multifamily stock faces rising vacancies and softer rent growth. We'll also touch on a few other stories shaping the market this week, from shifting investor sentiment in commercial real estate to what new supply and demand trends are telling us about property types. So, Steven, with consumers still spending but the Fed sounding less certain about cuts, how are you connecting the macro picture to what you're seeing in commercial real estate and specifically multifamily right now?
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B
I think the way we connect those dots is to say the macro backdrop is still okay, but slower. And that's exactly how CRE and multifamily feel right now. On the one hand, consumers are still spending, the labor market is cooling but not cracking, and if PCE comes in benign, it keeps the door open for one more rate cut in 2025. On the other hand, Powell's been very clear a December cut is not a done deal and the committee is split. That basically reinforces this higher for longer rate regime for a bit longer than what markets were hoping for. But if we look at what traders have been thinking over the past week, they are collectively signaling that they expect the Fed to cut rates by another 25 basis points. The CME FedWatch tool shows the probability of a 25 basis point cut is now priced in at almost 90%, which is significantly better than what we saw a few weeks ago when traders were far more bearish and the chance of a cut was roughly 50%. For commercial real estate, that shows up in two big ways. First is the income side. Demand is holding up, but it's not 2021 with we're flying the banner, it's a great party and we're busting records in multifamily rent growth has cooled, vacancy has driven higher and we're seeing more concessions, especially in markets that had a big supply wave. Other property types are similarly uneven. Industrial is solid but normalizing, retail has been surprisingly resilient in the right locations and non prime office is obviously the weak link. The second piece is capital markets. Financing costs are still elevated, cap rates have to adjust and that's where valuation pressure and refinance risk come in. That's why the FHFA's move to raise the 2026 multi family caps for Fannie and Freddie is so important. At a time when banks are cautious and securitization can be choppy. When we get disruptions in the market, having the agencies with more room to lend is a clear backstop for liquidity in the multifamily space. So I'd sum it up as the macro data say gradual slowdown, not recession. But with policy uncertainty and higher rates still in the mix, CRE and multifamily in particular are going to be much more about careful underwriting and where the capital is actually willing to go.
- [04:28]
C
Steven, you've been talking about this for a while now on just the underwriting side of it, and I think we're starting to get a little bit more clarity here. The data fog is starting to lift at some level. We're expecting some of the Fed data to be reported in this week and it's just challenging in the current environment to kind of make sense of all this. We've said this at some length across the CRE landscape that you've got to dig deeper than the headlines. So let me give you a couple of headlines here. If you look at the consumer side Black Friday spending, this is, according to Adobe analytics, hit a record $11.8 billion online, which was up 9% year over year. So headline sounds great. Like everyone's like wow, this is a really strong photo confidence from consumers. But if you look at the Salesforce data, it actually shows order volumes fell by 1% while average selling prices rose 7%. So if you just do the quick math on this, you have inflation and higher ticket items driving a lot of the growth rather than really any type of sustainable surge in demand. So they're definitely spending more, but they're selective. And the part that I think is really interesting is almost a billion 747 million in Black Friday transactions were linked to Buy Now, Pay later services. So we've talked about that with Klarna and a few others. So if you dig just a little bit below this great headline of 9% year over year growth in online Black Friday sales, it tells a slightly different story.
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B
You know, that's absolutely wild because as you were telling me that Buy Now, Pay Later, I just, all I can think about is like the shopping network and you can get this air fryer for four monthly payments of 2595.
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The same old thing is still driving us as consumers. It's hilarious at some level. And you know that number breakdown that you gave us on the sales volume in dollar terms versus count, that really speaks to what we're feeling right now as a consumer. The impact of tariffs and this persistently high inflation.
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C
Right.
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B
When we look at kind of the overall tariff impact, I'm not going to say it's all tariff driven, all of that 9% increase, but you got to wonder what chunk of that 9% is more or less just straight off the top. Tariff impact on inflation?
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C
Yeah, I mean, I think that's the part that remains to be seen. But you have to imagine a large portion of that is just the inflationary pressure. Now, if you look at some of the other data that's coming out, I mean, Friday we have the PCE report, it's expected that we're going to have about 2.8% headline and 2.9% core, which is pretty sticky considering the Fed's targeting 2%. If they get readings in that range, we'll see what they do. I think that probably leads well to a 25 basis point cut if the number is hotter than I think. You know, Powell's done a great job of setting himself up to do a pause here and kind of like, you know, have the, the committee say it's time to tap the brakes. And then, you know, the labor market, which is the other, you know, highly talked about narrative here, ADP showed 32,000 job decline in November. This is noteworthy because it's the biggest drop since early 2023 and this was driven primarily by small business cuts. That's a pretty large reversal considering October had a 47,000 gain and then jobless claims fell to 216,000, a seven month low which suggests layoffs are still subdued even as hiring slows. So I think if you look at this, you have a cooling labor market without a collapse. So kind of like you framed the non recession but slowing economy and you could just consider this classic late cycle dynamics on the labor market. So I think the next couple weeks, as we kind of head into the, the end of this year, shape up to, to provide some very interesting dynamics. I know we're dig deeper into the Fannie and Freddie stuff. I think just you know, quickly that's a 20 uptick in lending cap for 2025. It's significant. We'll talk about why we think that's significant here in a bit. But you know, just, just headline 20 uplift from 25 to 26 is noteworthy and I like your commentary on some of the multifamily stuff. If you look a little bit deeper at some of the numbers, vacancy for multifamily nationally sits at just over 7% which is a record high. New supply is continuing to outpace demand. So I know for us we've highlighted over the last couple of years we've delivered 1.2, 1.4 million units depending on who you rely on and it's been absorbed reasonably well. But in a lot of markets it's still very, very soft as you mentioned, with concessions and other things being offered to kind of offset some of this new supply. And if you look at rents, they're down another 1% month over month. And if you look at them in sum total, they're down just over 5% from their 2022 peak. So if you go back to, you know, 2022 and 2021, you were seeing double digit rent growth during those years and now you know, you're seeing month over month rent falling and you're seeing rents down 5% plus or minus from their peak. And so you know, are we out of the woods with multifamily or some of these headlines that have started creeping in about some of the distress, are they viable? I'm still very bullish on multi, but I definitely think as we head into 2026 you're probably going to see some of these Sunbelt markets and others that we thought we would see distress in sooner maybe start to pop up a little bit more as the reality of the extensions modifications cash in, you know, all those things play themselves out and the reality of distress actually takes hold.
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B
Yeah, this is, this is a really interesting point for multifamily because we, we've been expecting the slowdown. We've expected some adjustment pain, at least for the higher leveraged properties or the properties that were underwritten with overly optimistic rent growth baked in. But, you know, now I'm starting to wonder, okay, exactly how, how deep will some of this pain go or how wide will it spread? And for me, part of this also gets to the broader question of what's going to happen with inflation over 2026 and how resilient is the consumer, you know, when it comes down. Down to it, when push comes to shove. Let me just toss out one other headline I saw this past week from the Wall Street Journal about basically, Americans have waved the white flag for car prices. They said, all right, enough is enough, like, we can't handle any more price increases. And if we think of what goes into the typical consumer budget, it's housing and your auto expense outside of, you know, metros like New York where most people don't have a car. So, you know, the fact that car prices are having to adjust lower shows unambiguously that consumers are at that budget constraint. We're now at the binding budget constraint for the consumer. And, and with rents declining like they are, I just can't help but wonder, what are we going to see on the owner side for single family? Because remember, like, housing is almost 50% of the inflation index. So if both the rental markets and owner occupant markets are adjusting down, maybe we could possibly break below that 2.5% inflation mark because inflation has stayed incredibly sticky and a lot of folks are kind of crowding around the consensus that 2.5% inflation is more or less the lower bound for what we see today. And so I'm trying to wonder over here, can we break below the 2.5%? And how painful could that be or how concerning would it be if we do break below 2.5% because of what that means on the real estate side?
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C
Yeah, I think the interesting thing that you mentioned was the car stuff, Steven. I mean, if we think about this, I mean, the cost of new vehicles are as much as like, my first house was, and I didn't buy a house that long ago. I mean, it's ridiculous. And what's really perplexing is they're building cars with newer, more efficient technology. I mean, on the assembly side, they should last longer. They should be better vehicles. You're Getting the same exact warranty that you got 10 years ago or 15 years ago. You know, I saw a headline today where President Trump's going to lacks some of the gas mileage restrictions or numbers or whatever to try to make it more affordable for manufacturers to not have to, you know, put as much cost into the building of cars or whatever. But listen, if we went back and we used some AI, how to get an AI mentioned on the pod on our podcast over the last three years and we counted up the number of times we questioned the resiliency of the consumer, we would laugh at ourselves. Yes, as long as there's debt available in the form of credit cards or any other type of debt, Americans are going to spend money full stop.
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B
I think nothing shows that more than the, and I hate to pick on one car, but I'm going to do it the Jeep Grand Wagoneer. And they don't call it a Jeep. They don't put Jeep on there. They're very, very strategic in calling it the grand wagoneer.
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C
They're like 125,000 if you get one that's like loaded. It's really interesting. And unfortunately for people that have bought them, they've had some trouble. Like they've not been very reliable. But it's not, Listen, you want to buy any full size SUV, you're talking 80 to 125,000 bucks. And like, it's just amazing. Just divide that by 84 months or 72 months or however long people finance cars for and add some interest on it. It's remarkable. I drive paid for cars. I don't, I'm not getting into that rat race. We're, we're, that's a, that's a losing, it's a losing battle, man. Costs too much, don't get enough, and the car isn't nearly as nice at month 60 or whenever you pay it off as it is on month one.
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B
I like that. That's a very practical approach. Now, just to turn back to the single family side, I'm curious to get your, your insider's perspective because you're on the front line, right? You have a brokerage, you hear the conversations, you have the data. What are you hearing and seeing for time on market and listing price adjustments? Because from what I've been seeing it, it looks like we've crept up a good bit and price adjustments have finally started rolling through, I think on a lot higher frequency basis.
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C
Yeah. So it's, it's very similar to the office market in some regards where you have the winners and then everything else, like if you have a very nice, that's highly amenitized, that's been well kept, they're still selling in a reasonable amount of time for really good prices. In fact, you could say the, the higher end, better quality properties are driving price growth. For everything else, it's commoditized. So you're like track neighborhoods, you know, non custom builds, non amenitized. It's, it's really tough right now. And the problem for sellers is a lot of these folks are just super leveraged on prices that were inflated. And so they can only do so many price cuts before they're in the red. And you know, that's the part in the residential market where I start to see a little bit of 2008 in the sense that you had a ton of short sales and people kind of forget that part of the market cycle. But you know, where you actually had to get permission from the bank to sell the property at a loss. But the bank was willing to take that because they at least had a buyer in hand. And we're not quite there yet, at least not at the same scale. But if you just run the numbers on some of these deals, there's just no way that the math works. They can't cut the property price anymore unless the bank's willing to take a loss because the current owner has no cash to put into the deal and it's not worth what they paid for it.
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B
Yeah, I wonder if we'll see any sort of chatter on the political side about trying to. Gosh, back to the other week's discussion about making mortgages assumable.
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C
Right.
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B
If there's anything that can be done just to try and loosen the frictions on the single family side and help those that are highly leveraged right in the margin. Or if at the end of the day this is just the age old finance problem of you got to take your medicine.
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C
Yeah, I mean, look, that's. To me that's where you know, not just for residential, but for commercial and everything else. Like we have to get to that point. The market cannot go through the full cycle until losses are realized. Anything outside of that is just market manipulation, government intervention, whatever you want to call it. And unfortunately, all that does is just inflate prices, prolong the inevitable crash. And we would be much better off for it, for just letting the market dynamics play themselves out. Listen, I worked with buyers in 2007 that lost their properties during the crash and it sucked. And for a lot of them, they've been able to rebuild their credit, their finances, and they've been able to acquire another property. I had other people that held on during the downturn bought golf course property in Florida at peak price. One of the markets that first went down was golf course properties in Florida. But he held on to it and he, he fed it for four or five years and eventually sold out and made, made out on the deal. It's just part of the process. And so, you know, I, where I get a little nervous is with, you know, this chatter about the new Fed president is going to be named and some of the motivations to try to get rates to a kind of a predetermined number. You know, the Fannie and Freddie, the FHFA increasing their caps, like that's good, but that provides some artificial backstop at some level to the market. I mean, for multifamily, it's great, but it creates an inequity in the market in the sense that they have a backstop that no other property type has.
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B
Yeah. So speaking of backstops, the FHFA is setting the 2026 caps for Freddie and Fannie individually at 88 billion each. So if my math is correct here, I think that's 176 billion there. Lonnie.
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C
Pretty good mental math there, Stephen.
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B
So the fhfa, or the Federal Housing Finance Agency, has set the Freddie Mac multifamily loan purchase cap for the next year at 88 billion. The institution sets it based on projections for the size of the debt origination market. Now, the FHFA announced the same cap for Fannie Mae in 2026, and this is up from the 2025 cap, which was 73 billion which you mentioned. Lonnie. This was right about a 20% increase on a year over year basis. So to maintain liquidity in the multifamily mortgage market, the FHFA will keep monitoring activity and raise lending caps if needed. However, to avoid market disruption, the agency said it won't lower them even if the market ends up smaller than projected, which, I mean, really makes sense. Right. Let's not add constraint where it's not necessary, but we're certainly willing to bend if we're seeing strong demand. And that's ultimately what it takes to refinance all of this multifamily debt that's coming due not just this year, but I would say collectively probably over the next one to three years, some of those refis might get pulled forward a little bit.
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C
Yeah, I mean, the timing of this is good. I mean, there's a significant amount, you know, plus or minus $90 billion worth of maturing multifamily debt coming due to, you know, there's definitely refinance risks that we've talked about in detail on the podcast. You know, there were a lot of these multifamily deals financed in the sub 5% rate era and so these increased caps definitely matter. It increases lender confidence and gives some borrower optionality and I think it will help stabilize valuations even if the fundamentals continue to soften. So I think for the, the multi family space, this is a really great sign of people thinking that we've kind of turned a corner and there's going to be some distress, as we mentioned, but it's, it's isolated on a relative basis. I mean, multifamily is such a huge subset of the marketplace that even if some of these Sunbelt cities realize some measurable distress on the whole, it's, it's going to be a rounding error. So, you know, I look at this as a positive thing. I do think, as I mentioned a moment ago, it's tough to compete with, with multifamily, with this as a backstop and it's kind of commoditized the sector at some level relative to some of these other property types. You know, so good news for multifamily. 20% uptick is great on the cap. We'll see how the 2026 year actually plays out. I'm pretty bullish even with an acknowledgment that I think we're going to see significantly more distress in 26.
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B
Yeah, I mean, based on what we've seen on the private label CMBS side. So that's issuance. That excludes Fannie and Freddie loan activity. I mean, the private label issuance has surpassed 120 billion now for 2025. 2026 expectations are still pretty strong, at least for the first half of the year. So the fact that we've had such strong origination volumes for 2025 when rates were still coming down, I mean, we're not at, you know, bottom level rates here, makes me wonder just how strong the pull forward effect will be for the multifamily market here. First half of 2026, when maybe market participants start getting around the mindset that maybe where we're at right now over the first half of next year could end up being the trough in rates.
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C
I know we're maybe jumping ahead a little bit. We'll probably do some forecasting and some predictions here in an upcoming episode. Stephen. But just As a, as a teaser, let's just say we end this year at 125 billion. What would it take for next year to be considered a really productive year? I mean, this year, effectively the first year, last year was 108 billion. This is the first year back to back where you've seen this type of significant increase. I think we'd be foolish to think we're going to exceed 120 or 125 billion in 2026. If it comes in at 95 billion or 105 billion, is that a great year for 26, or is that something that we look at and say, I can't believe we had such a pullback in origination.
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B
That's crazy. I can't believe you pick the number, like right out of my brain. I was going to say 95 billion for me is kind of the low end for what I'd call a productive year. If we drop below 90 billion, let's say it looks bad, but there's at least that hint of softness in that number. Gosh, yeah. If we go below 75, that's a catastrophically bad year. I don't see, I don't see us getting that low. But yeah, I think if we're 95 billion plus, we'll all feel pretty good about it. I think around 110, 115 billion feels about right. 130 billion would be a banner year.
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C
Yeah. Yeah. Well, first of all, we've done about 200 plus podcast episodes together, so we ought to be able to kind of like, you know, complete some sentences for each other at this point. And I agree with you. I think realistically we're probably looking at somewhere in that 95 to 105 would be like what I would call a good year band. Anything above 105 is probably, you know, great, considering it's on the heels of what we saw this year. But we might be surprised to the upside. I mean, I. I'm not putting it past 26. I think 26 has the potential, especially if you start seeing some movement in some of these class B offices or we start seeing some of this repricing actually take effect and some losses incurred and basis getting reset. I think you could see a lot of activity that could really bolster 2026. So we, we'll have more on that as we finish up 2025 and start making our predictions for next year.
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B
Buy some sticks and bricks in 26.
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We're still struggling to find that. That catchphrase for 2026.
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C
I did have I had someone message me on LinkedIn again this week? Let me get it pulled up here. So, so for Jeffrey S. He says survive until 25 is now fix on 26. He says deal volume should be up across the board next year. So it's interesting, the last couple of folks that have messaged me have been really optimistic that we're going to see deal volume increase. So it's, it's, you know, relative to our discussion that we just had, I think there's a pretty strong sentiment that we're going to see even increased transaction volume in 2026.
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B
You know, I like that. I always like to try and set the bar at a modest level so we have room to beat it. And based on the recent Wall Street Journal article we saw this past week, the headline was Commercial real estate is getting too cheap to ignore. I think it really broadly supports the consensus that we're getting in messaging. Lonnie?
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C
Yeah, it's, I'm gonna, we need to reach out to our friends at CREFC for the conference and let them know that the term cautiously optimistic has to be outlawed for this year's. We want full on optimism capital O.
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B
There we go. Yeah, we should have somebody that carries around a squirt gun. You say cautiously optimistic, you're. You're going to get water.
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A
One more point on the topic of apartments and multifamily, there was a stat out there this week that I wanted you guys to talk about. We saw this in CNBC that household formation among 18 to 34 year olds has stalled with now more than 32% living with family. This reflects high rents and a tougher job market. What are your thoughts on this and that 32% number?
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C
Yeah, I gotta say that number jumps off the page to me. And listen, I'm not a demographer. I don't know too much about household formation or what this looks like on a historical perspective. But basically one in three people under the age of 34 are living with family. That's pretty significant. And you know, imagine if some of those decided that they, they wanted to move out and rent, I mean, just 10% of the 32%. Some of these markets that have seen really steep declines in rent growth, you might start seeing that absorption number get pushed and rents might swing back in favor of, of landlords. And so that number just seems really high to me. I'd love to hear what you think, Stephen, but I, I would have guessed if I had been asked before this show that you might see something around 8 or 10%. Of people 18 to 34 living with family, 34% or 32% is probably three to four times higher than what I would have estimated it to be at some level.
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B
I guess maybe I'm not too terribly surprised because to get back to the single family market, you have a lot of folks that maybe want to downsize in housing, but it just doesn't make sense given how low their mortgage payment is and how high house prices are right now. So if you're already living in a house that is too big for your family and you have kids that want to contribute, you know, it, it makes sense to me. But wow, a third. One third. That's wild.
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C
Do you think it's just the higher rents and tougher job market or do you think it's something different, like people wanting to be at home or like.
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B
Yeah, I, I, I do, actually. I do like the Atomic Family. Right. We kind of shifted a little bit away from the Atomic family mindset in the 90s, 2000s. So this is a sign that the pendulum is swinging back more toward neutral. I don't know.
- [28:21]
C
I just did some quick searching online. Right. So take this for what it's worth. I haven't verified or validated any of this. I'm shocked. It says in 2014, Pew reported 32.1% in the 18 to 34 age cohort lived with their parents. 2015 census data showed about 33% living at home, making it the most common living arrangement for young adults at the time. In 2020, it peaked at 35%. So the last 10 years, say from 2014 to. Well, this is a, this is a 10 year cohort. From 2014 to 2023, the figure was somewhere between 31 and 32%. So I guess it's pretty much in line, but that just, it just seems so. If that's the case, I would argue it's not because of higher rents in a tougher job market, that it's just, that's just what, that's just what the normal dynamic is.
- [29:14]
B
So what you're telling me, Lonnie, is if I'm going to buy another house, I really need to make sure I'm pricing in the long run for if both kids, or at least one of the two, decides to stay at home.
- [29:25]
C
Yeah, you should probably stretch that budget, Stephen, because you know it's not going to get any cheaper to buy housing and try to get as much as you can for when those kids decide to live at home. Which, look, listen, I got three kiddos. If they want to stay at home. That's cool with me. I'm good.
- [29:38]
A
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- [30:29]
B
A venture of GT Capital and Freestone Capital Management has paid 43.7 million, or roughly 227,000 per unit for the 192 unit Lock Vista Apartments in the Ballard neighborhood of Seattle, according to Multi Housing News. GT Capital of Kenosha and Freestone of Seattle acquired the property from WCO, which bought it in 2004 for 18 million. The property at 3025 Northwest Market street is encumbered by a Fannie Mae loan that was originated in 2018 and matures in 2028. Lock Vista was built in 1949 and has undergone $13 million in renovations between 2018 and 2021. Next up we have Berkshire Residential has bought some Seattle apartments for 55.7 million, which works out to a little over 409,000 per unit for the 136 units. Walton Lofts apartment property in Seattle The Boston investment manager acquired the property at 75 Vine street from Clarion Partners, which bought the property in 2016 for 76 million. The transaction was previously reported, but the buyer and price were not known at that time. To fund its purchase, Brocadia turned to Wells Fargo bank for a $36.4 million loan. The property was previously encumbered by a $38 million loan that Nationwide Life Insurance provided to finance Clarion's purchase. Walton Lofts was built in 2015. It sits along the Elliot Bay waterfront. It has studio one and two bedroom units with between 457 and just over 1100 square feet with monthly rents that start at $1990. Wrapping up our apartment transactions, we have Welltower has purchased an Aventura, Florida assisted living facility for 46.88 million. The property is the 141 units Barclay at Park Square assisted living facility in Aventura, Florida. The purchase price worked out to just over 332,000 per unit. This news coming to us from the South Florida Business Journal. The Toledo, Ohio company purchased the 10 story property from Royal Senior Care of Aventura Barclay at Park Square at 2940 N. 207th St. Was built in 2018 and has a mix of one and two bedroom units offering assisted living and memory care services is part of the Aventura Park Square mixed use development which also has a hotel, retail and restaurant space as well as residential units.
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C
So Stephen, it's interesting if you look at the two Seattle apartment deals, pretty significant variance in price per unit. I mean the first deal that you covered in the Ballard neighborhood of Seattle was just over 227,000 a unit and then the the Berkshire residential over 409,000 per unit. So pretty significant differences driven primarily I would assume by location and just quality of the asset, but pretty significant delta between the two transactions.
- [33:34]
B
Yeah, the senior living assisted living memory care facility, I mean you expect that to have significantly more expensive infrastructure built into that, especially for memory care units. With memory care you have to have controlled access because you worry about the patients being able to wander off and then you have a situation where you're in a silver alert. I think that's what it's called.
- [33:58]
C
Yeah, I think that, I mean I know in Texas whenever there's a senior that is driving and lost, they call it a silver Alert for sure. I would assume it probably translates into the senior housing. If you're an operator and want to educate us a little bit, we'd love to to have you give us some education. Email us@podcastrepicut.com and tell us if there's some nomenclature for that.
- [34:22]
A
And speaking of transactions, let's look at some retail sales in Nebraska. We saw Federal Realty pay $153 million for an Omaha, Nebraska retail center.
- [34:35]
C
Yeah. So shout out to our listeners in Omaha. We haven't had a lot of Omaha stories, so it's great to have something here. Hit the pod notes. So Federal Realty Investment Trust paid 153 million. So it's a pretty sizable deal. $337.75 a square foot for the 453,000 square foot village Point retail property in the city of Omaha, Nebraska, North Bethesda, Maryland. REIT acquired the property at 17305 Davenport street from an affiliate of Red Development out of Phoenix. Village Point was developed in 2004. It's currently 96% leased and I think we know why they paid what they paid now to tenants that include Apple, which is always a huge driver for retail values. Warby Parker, Madewell Coach and Urban Outfitters. Also Shadow, anchored by Scheel Sporting Goods Stores. Federal Realty said the property sits in an area with limited retail competition. In addition, it's in an affluent area with average annual household income in the surrounding area of more than 180,000 per year. We have another retail transaction here. An affiliate of Maven Real Estate bought Atlantic Crossing, 197,000 square foot shopping center in Coral Springs, Florida for 40.5 million or $205 a square foot. That comes to us from the South Florida Business Journal. Coral Gables, Florida company purchased the retail property from Allied District Properties out of Chicago. Buyer financed its purchase in part with a $22.28 million loan from BankUnited out of Miami Lakes, Florida. Atlantic Crossing was built in 1994, sits on just over 18 acres at 750 and 810 North University Drive. Tenant roster for this retail property include anchors Whole Foods and Home Depot, as well as Crunch Fitness. And then rounding out our retail transaction segment, we have a limited liability company led by local investor James Shaw paid 45 million or $553 a square foot for Paradise Valley Marketplace, an 81,000 square foot retail center in Phoenix. This comes to us by way of Phoenix Business Journal. Shaw acquired the property at 10810 N. Tatum Blvd. From Kite Realty Group Trust. And a deal brokered by cbre, Paradise Valley Marketplace has since been brought to full occupancy. Shamrock Food Service Warehouse, a restaurant supply store, agreed to a 32,000 square foot lease to fill up the last available space when Whole Foods Market exited last year. So some really strong retail sales across the country. Stephen?
- [37:14]
B
Yeah, that last one is particularly creative. Yeah, Putting in a restaurant supply store to backfill Whole Foods. I mean, I like it. The fact that Whole Foods was located there to begin with tells you that you've got strong household income and good demographics. So I like that play that that first transaction you read off is absolutely wild. I mean, geez, that is a trophy asset right there. Massive price per square foot, which makes me wonder what the household income is for that poll area. I'm guessing it's, you know, well into.
- [37:47]
A
The, the six figures and over to office. There was an article in the Wall Street Journal this week that Scholastic is selling its New York City headquarters as part of turnaround efforts. Talk about what those efforts are and then what the deal looks like.
- [38:06]
B
Yes, Scholastic has agreed to sell its New York City headquarters as it works to streamline its publishing business and monetize assets. Empire State Realty Trust, which owns the Empire State building, will pay 386 million for the Broadway address. Scholastic also agreed to sell its primary distribution facility in Jefferson City, Missouri to Fortress Investment Group for $95 million. Scholastic said the property sales were part of its strategy to monetize its non operating assets to improve the efficiency of its balance sheet. The company said it would use proceeds from the sales to reduce debt and repurchase shares. The sales come after the publishing company shared major restructuring plans, which included efforts to free up cash by unloading certain pieces of the property, the Wall Street Journal previously reported. Next up, we have Capstone has completed an $80.71 million purchase of a Manhattan office. So this purchase price worked out to $883 per square foot and this purchase is for 28 and 7, a 91,000 square foot office building at 205 W 28th St in Manhattan's Chelsea neighborhood. The New York investment manager bought the 12 story building, which has an alternate address of 322326 7th Ave from its developer, a venture of Corem Property Group and GDS Development Management in a deal arranged by Newmark. The building, which was constructed three years ago, is fully leased and includes ground floor retail space. Capstone funded its purchase in part with a $58.5 million mortgage from S USA Life Insurance of Roanoke, Virginia, according to city records. And then finally rounding out our office transaction segment, we have Cincinnati's First Financial center office properties sold for 59 million. This purchase price worked out to $106 per square foot for the First Financial Center, a 553,000 square foot office building in downtown Cincinnati, according to the Cincinnati Business Courier. The Louisville, Colorado investor acquired the property from Tolus Advisors, which bought it out of receivership in 2020 for 64.2 million. The 31 story property landed in receivership after previous ownership defaulted on a $76 million loan against the building and a $45 million mortgage against the underlying land. Both loans were originated in 2006. First Financial center at 255 E. 5th St. Was built in 1990 and is 91.7% leased by 17 tenants. It includes a seven story parking garage with over 1200 parking spaces as well as 28,000 square feet of retail space.
- [40:57]
C
You know Stephen, it's interesting on that Real Capital Solutions deal did a little digging into that company and they have a really strong track record. Over 40 years they've achieved really good success in investing in what they call entrepreneurial real estate ventures. And I think this would definitely fit that billing. In that Cincinnati, you know, downtown location. They purchased and managed more than 395 assets and totaled approximately 5.1 billion in acquisitions from a value perspective. And they currently have just over 2.4 billion worth of AUM. And I wanted to circle back to the New York office sales story that you talked about. Let's look at some trends on office sales price on average per square foot over maybe the last 10 years or so. I think this is a positive sign for us in terms of where we're at in the market cycle. It looks like prices peaked in 2017 and 18 at $1,074 and 10 $76 per square foot, respectively. And again, this is on publicly available data and an average. Right. So there's going to be some above and some below in 2019. $942 a square foot. We troughed out in 2024 at $552 a square footage. And for the stories that we referenced today, that scholastic deal, $974 a square foot was a really strong sales price. And then the, the Capstone equities at $883 a square foot, still really strong price. So those are only two data points. You know, two data points don't make a market. Obviously these are in good locations. So that might be skewing the number slightly. But I think on the whole, really positive signs. And then just circling back on the, on the downtown Cincinnati office tower, this has been reported as the largest sale, largest office deal in years for that market. So it's just kind of funny, Stephen, as we read through these stories and we, we talk about what we're going to highlight on the podcast every week, just the, the dynamic differences in these markets. I love it. And it's what drives, what drives our listeners to make deals. Like doesn't matter what size you're playing in if you're in Cincinnati. And 59 million is considered a trophy asset and deal. Awesome. If you're in New York and you're doing, you know, 380 million dollar deal, that's considered kind of run at the mill this, at this point in time. So it's just really cool to kind of see real time that we cover all aspects of the market and try to cover as many markets as we.
- [43:33]
B
Can and hopefully we'll see even more activity in 26.
- [43:39]
C
My LinkedIn messages say we will.
- [43:43]
A
So let's close with some programming notes. We released our November 2025 Trep CMBS delinquency report and we saw that the rate decreased 20 basis points. We track the rates across all of the five major property types and have a lot of data in this report. So if you're interested in seeing the latest information, send us an email to podcastrep.com and we will get you a copy. We also have a lot of this data on a historical basis. If you want to see trends over time or you're looking to understand distress rates for your market or your property type of interest, send us a note. We'd be happy to work with you and set you up with our advisory services team and see if there's a custom report or a custom dashboard we can build for you. On Thursday, December 11th at 2pm Eastern, we have another webinar opportunity for all of our listeners to join. We will be hosting a webinar looking into commercial real estate and commercial and industrial performance across banks and construction lending. We will share insights from our quarterly Bank CRE Loan Report and look at trends across the those lending sources, key performance benchmarks and market shifts, and risk indicators to watch in today's lending environment. So if you're involved in managing risk or involved in any type of lending strategy and would like to see some of our data there and hear from our banking and lending experts, send us a note to podcastrep.com and we'd love to have you join. This week we also released our latest data in our Trip Property Price Index. This is looking at quarter three data. We found that commercial real estate values largely stabilized in Q3, though performance varies by sector and asset quality. If you want to see the details within our TPPI or TREP Property Price Index Report, send us a note and we will give you a copy of that as well. Turning to shout outs, Michael B. Shared on LinkedIn information from an article in the CRE Rundown, which is our daily newsletter. If you don't have access to that, send us a note. And this was looking at refinancing and upcoming maturities in 2026. So thank you Michael for sharing. Sheila W. Gave us a shout out on LinkedIn for episodes 360 where we talked about the $4.8 trillion debt universe, bank mergers and more, and 362 looking at CRE earnings and CMBS issuance. So thank you for the shout outs and highlighting those episodes. Trew on LinkedIn also said that his weekly listen of last week was episode 365 of our podcast and he said the Trep team does an excellent job of consistently providing valuable CRE insights. So thank you Trey for all your continued support. Scott W. Reached out and was interested in more specifics behind the loans that drive changes in the delinquency rate, so we will give you those details. Scott and we're happy to share more information with anyone interested. Kate G. Has been liking our commercial real estate spreads research that we've been putting out. For anyone who hasn't seen this, this comes from our weekly spreads information from Trepeye. Grace a. Loved the WeWork episode with CEO John Santora. If you haven't heard that yet, go check it out. And Elliot P. Said, great episode last week. Love the ground leases stuff. I'll shift gears here because a few of these next shout outs come around the theme of Spotify Wrapped and end of year roundups of top podcasts. So for those of you who don't know, if you listen to this show on Spotify or Apple Music, the platforms will round up for you. Some of the trends, who you listen to the most, how many hours you listen, and they include podcasts in there. So it's always cool when this time of year comes around and our listeners come out from all areas of the world and walks of life in commercial real estate and share with us that we've made their wrapped. I think it just came out today, we're recording this on Wednesday, so a few people have already shared theirs, which is really exciting. Dane F Shared that we were featured on his top podcast list on Spotify. Gabriel G shared his Spotify rap with us on LinkedIn and he noted that he listened for 1300 minutes in 2025 and is in the top 5% of listeners. He thanked us for keeping him informed. We heard from our own colleague, which may be cheating, but we really appreciate the support. Trisha. She said we are her top podcast as well. So that's a shout out for Trisha B. And we want to open the floor. If you're listening to this and you think we might have made the cut, share it with us. We'd love to see it. We really appreciate all the engagement and hearing from you. We say this all the time, but podcast listens and downloads just show up as numbers for us. We don't get to see your names until you reach out, so send us a note. We'd love to give you a shout out. Thank you. Learn about what you're doing in the industry and maybe meet you at an upcoming conference or an event. And speaking of that, we have a lot of conferences coming up. The TREP team is gearing up for CREF C Miami. That's the CRE Finance Council Conference in January. So if you'll be at that event, send us a note. We'd love to meet you there. We'll have podcast representation. We'll have product specialists, relationship managers, a lot of people who are excited to meet and connect with you. And with that, we'll close. Thanks to our producer, Mariana Sobrana. Join us next week as we look at what's happened during the week and how it may be impacting you. If you have a question or just a comment, send an email to podcastrep.com and subscribe to the Trepwire Podcast with your favorite provider. Thank you for listening and stay well.
- [49:54]
All right.