📢Good morning,

Carlyle Group’s internal labor gauge points to just +17,000 U.S. jobs in September—far below the ~+54,000 expected from government data—while real-time GDP ran ~2.7% (annualized) and energy prices fell 3.8%. Core services inflation (ex-housing) still ran ~3.3%, suggesting easing demand but sticky service prices. With Treasury yields hovering near cycle highs and official releases frozen by the 7-day shutdown, markets are leaning on private data—and inching toward a Fed hold scenario.

📊 Quick Dive

Private equity titans are courting wealthy individuals—from stadium banners to the U.S. Open—but Sixth Street’s Joshua Easterly warns the retail push looks late-cycle. BREIT’s prior withdrawal gates showed liquidity mismatches when redemptions surged; many non-traded vehicles now underwrite ~2% NAV/month outflow limits. With 5%+ risk-free yields, retail capital is more demanding, lifting return hurdles 50–100 bps and pressuring acquisitions popular with NAV REITs (multifamily/logistics). For GPs, transparency, cash buffers, and secondary liquidity matter more than ever. Read Full Signal →

Ares lifted fundraising, targeting billions more for digital infrastructure, yet co-president Kipp deVeer warns some capacity will prove marginal as supply ramps. Strategy: stick to 15+-year pre-leased hyperscale deals in power-constrained markets; assume slower lease-ups in secondary locales and 2%–3% escalators. Prime core facilities may still trade ~5–6% caps; secondary assets could widen +50–100 bps if glut fears rise. Lenders are tightening draw tests and favoring milestone-based funding on spec projects. Read Full Signal →

Ken Griffin says the Brickell HQ will cost about $2.5B vs. an initial $1B, implying $1,900+/SF for ~1.3M SF—a Manhattan-like replacement cost. Construction inflation, labor tightness, and design upgrades are forcing 15–20% contingencies and lower leverage (50–60% LTC). Break-even rents could need $120–$130/SF gross, likely curbing new office supply and boosting the relative value of top-tier existing assets—if tenants can stomach the rents. Read Full Signal →

Q3 leasing hit 10.6 MSF (+20% QoQ), taking YTD to 31.7 MSF, the strongest first three quarters since 2002. Availability fell 100 bps QoQ to 16.2% as flight-to-quality pushed Midtown Class A asking to ~$86–94/SF, while Class B lags. Underwrite faster 12–18 mo. stabilizations in trophy assets, but keep concessions elevated (~8–10 months free; $100–$120/SF TI) through 2026. Exit caps: bake +50 bps over market to cushion rate uncertainty. Read Full Signal →

National effective rents slipped −0.3% in Q3, the first summer decline since 2009, as ~105,500 units delivered and occupancy eased to 95.4%. Sunbelt rents are negative YoY (Austin, Denver ~−8%; Phoenix, San Antonio ~−5%), while Midwest/Northeast posted modest gains (+2.4% / +1.9%). Underwrite 0% to negative rent growth where supply is peaking, 93–95% stabilized occupancy, and 4–5% expense growth, with exit caps +25–50 bps over today. Read Full Signal →

Roughly $575M across ~30 properties hit October auctions (down from $710M in Sept), with ~60%+ tied to apartments financed on 2021–22 floating debt. Harris County (Houston) accounts for $270M and 11 properties. Expect lenders to mix extensions, note sales, and select foreclosures; buyers with fresh equity and ops chops can reset bases, but must underwrite 1.30x+ DSCR and rate caps/reserves. [Read Full Signal → link]Rite Aid Shutters Final 89 Stores in National Wind-Down. Rite Aid closed its last 89 stores in October, finalizing a nationwide retreat after bankruptcy filings in 2023 (Bisnow). In total, 520+ stores have been closed over two years, with most leases in strip centers or standalone formats. The closures are hitting suburban retail corridors and triggering fresh leasing challenges for REIT landlords. Read Full Signal →

The macro is finally doing what operators have been underwriting for: cooler hiring and mixed inflation are nudging the Fed toward a pause without outright recession—for now. That’s a green light to defend near-term cash flow while quietly positioning for cheaper debt in 2026: extend maturities, fix where you can, and re-open shelved refis on quality assets.

In the trenches, play offense selectively. NYC trophy office has real momentum—lean into it. Sunbelt multifamily requires humility: prioritize renewals, keep occupancy high, and let rent growth come back after peak supply washes through. For AI data centers, only fund pre-leased/power-secure deals; treat speculative MW like ground-up office in 2023. And if you’re buying in Texas distress, assume today’s rates, not tomorrow’s—capital structure, not real estate, is what you’re fixing.