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Hotel executives describe a “holding pattern”: RevPAR has almost reached pre-Covid levels (~$96 projected 2025, +12% vs 2019), yet margins are compressed and sales volumes remain ~$15 B — barely one-third of normal. Sellers are clinging to 2019 valuations while buyers demand discounts amid 8–10% cap-rate underwriting.
📊 Quick Dive
Operating expenses rising 5–6% annually (labor, utilities, insurance), pressuring EBITDA margins down ~3 ppt from 2019 levels.
International travel to the U.S. remains below pre-Covid volumes (~80% of 2019), weighing on urban and resort hotels.
Transaction market stuck near $15 B in 2025 vs $45 B average pre-pandemic; buyers await rate relief.
Leisure and limited-service segments carry the sector while corporate and group business lags.
Operators expect material thaw only once financing costs ease into 2026.
Read Full Signal
U.S. Industrial Sector Thrives on Manufacturing and Reshoring
Industrial real estate remains CRE’s strongest performer. Vacancy is hovering near 4–5%, and national rent growth of 5–6% outpaces inflation. Manufacturing investments are fueling absorption from Texas to the Midwest — including Embraer’s $70 M, 200k-SF plant in Fort Worth and new AI-component production sites in Fremont, CA. CIP Real Estate just closed an $820 M CMBS refi across 6 states, illustrating lender confidence in core industrial portfolios. Reshoring, EV supply chains, and data-center builds continue to anchor demand even as spec development slows. For operators, power capacity and labor remain the bottlenecks, not tenants. Read Full Signal
Mega Data Center JV Signals AI-Fueled Capital Surge
Meta Platforms and Blue Owl Capital have closed a $27 B financing for the Hyperion AI data-center campus in Louisiana — the largest single-asset CRE deal on record. Blue Owl funds contributed $7 B in cash for an 80% stake and immediate $3 B liquidity to Meta. The campus will deliver 2 GW of AI compute capacity and create ~500 jobs. Institutional investors (Pimco, BlackRock ETFs) joined the JV debt, signaling that data centers are now core infrastructure. Expect copy-cat JVs from other tech majors as $400 B in 2025 AI capex demands massive power and capital footprints. Read Full Signal
Operators should treat 2025 as a capital-discipline year. Across sectors, funding is available but at higher costs. For hotels, stability rests on operating efficiency and rate management until transactions reopen. Industrial and data-center players should secure power agreements and fixed-rate debt before further rate volatility. Expect competition for construction capital to intensify — relationship lending and pre-leasing will determine who builds through the cycle.
Hotel RevPAR to exceed 2019 levels by mid-2026 as rates hold firm and travel normalizes.
Industrial rent growth to average 3–4% through 2026 as reshoring projects ramp and new supply moderates.
At least two more mega AI data-center JVs expected within 12 months in Northern Virginia and Texas.
Private credit and insurance lenders will dominate CRE financing through H1 2026 as banks stay cautious.
Watch energy and labor inputs — they’re the new swing variables in NOI forecasting across asset clas
