📢Good morning,
The FTC, joined by five states, has sued Zillow and Redfin, alleging the firms struck a $100 million deal in 2025 to stifle competition in the rental listings market. Regulators say the agreement gave Zillow near-duopoly power alongside CoStar’s Apartments.com, driving up costs for landlords and limiting options for renters. Both companies deny wrongdoing and vow to fight the case.
📊 Quick Dive
$100 M alleged payoff: Redfin agreed to exit rentals for up to 9 years
Market at risk: 49 M U.S. renter households potentially impacted
Ad costs: Multifamily owners could see 10–20% higher listing fees
IKEA bets $213M on SoHo flagship transformation
Ingka Group (IKEA) acquired 529 Broadway in Manhattan for $213 M (~$4,000/sf), converting the former Nike store into a two-level urban store with ~28k sf of offices above. The purchase is part of a $2.2 B U.S. expansion. SoHo retail vacancy sits at 11%, below Manhattan’s average, with rents up +7.5% YoY.
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Rick Perry-backed Fermi REIT raises $682M for AI data center campus
Fermi REIT’s IPO raised $682.5 M, valuing the development-stage company at ~$12.5 B. Its goal: a Texas mega-campus delivering up to 11 GW of dedicated power to AI data centers by 2038, starting with 1 GW in 2026. The IPO surged 19% on debut, reflecting strong demand for AI-driven infrastructure.
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FPI settles rent-fixing case, curbs algorithmic pricing tools
California-based FPI Management (165k units) agreed to pay $2.8 M and limit its use of rent-setting software after a tenant class-action alleging collusion. The case is the first settlement in a nationwide probe into algorithmic rent tools like Yardi’s, setting precedent for other multifamily operators.
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Australian pension fund walks from $304M Bellevue office loan
Australia’s #2 pension fund, ART, defaulted on a $304 M CMBS loan tied to the Bravern Office Commons after Microsoft’s lease expired in August, leaving 750k sf vacant. The property’s value plunged 56% from $605 M in 2020 to ~$268 M in 2025, effectively wiping out ~$300 M in equity.
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RXR gathers $3.5B to buy Manhattan towers at 50% discounts
RXR Realty launched the “Gemini Office Venture” with institutional partners including Baupost and Liberty Mutual, amassing $3.5 B to scoop up distressed Manhattan trophy offices. Early buys include 590 Madison Ave and Starrett-Lehigh, reportedly acquired at 40–50% discounts from mid-2010s peaks.
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The Zillow-Redfin lawsuit is a wake-up call: digital distribution costs can no longer be underwritten on autopilot. Multifamily owners need to diversify leasing funnels and stress-test ad costs just as rigorously as debt service. For office, RXR’s $3.5 B play shows capital is finally stepping back in — but only for trophy assets at massive discounts. Meanwhile, Bellevue’s default proves that losing a single anchor tenant can obliterate value overnight.
For operators, the lesson is clear: diversify revenue channels, prepare for regulatory scrutiny, and never assume tenant concentration or platform dependence is safe.
Regulatory risk: Expect more antitrust scrutiny of proptech and rental algorithms through 2026.
Office distress: Defaults will rise as loan maturities collide with high vacancies; more recapitalizations ahead.
Retail revival: SoHo’s improving foot traffic (+6% YoY) suggests prime urban retail may outperform secondary corridors.
AI data center buildout: Watch if Fermi secures anchor tenants by 2026; execution risk is high despite IPO euphoria.
