Monday, November 9, 2026

On Tap Today

Warehouse warming: Industrial real estate is recovering, but uneven demand, falling real rents, and rising construction threaten its momentum.
Gray matter: New co-heads face halved profits and a stalled fundraise after management exodus.
Depreciation deprecation: Bonus depreciation for data center equipment faces Democratic opposition after midterm wins.
Office webinar: Join us Nov. 12 for a look at how owners are repositioning office portfolios heading into 2027. Register

Essential Metrics

Daily Market Snapshot
S&P 500	7,376.86	−311.76 (−4.05%)
FTSE Nareit All Equity REITs	841.29	−18.54 (−2.16%)
10-Year Treasury	4.86%	−4 bp
SOFR	3.92%	−5 bp
Data as of market close November 6, 2026. SOFR reflects the November 5 trade date.

The S&P 500 closed Friday at 7,376.86, down 4.05 percent from Wednesday's close, as Thursday's 4.4 percent plunge on fears of tighter AI regulation under a Democratic Congress was barely dented by Friday's 0.31 percent bounce. The 10-year Treasury yield ended at 4.86 percent, 4 basis points below Wednesday, as Thursday's flight to safety outweighed Friday's jump on a 165,000 October payroll gain that lifted December rate hike odds. The FTSE Nareit All Equity REITs index slid 2.16 percent to 841.29 over the two sessions, with timber and telecommunications REITs down more than 2.5 percent on Friday while data centers and lodging gained. SOFR fell 5 basis points to 3.92 percent on the November 5 trade date, trimming floating-rate carry on bridge and construction loans.

WEBINAR

What if AI could check your property data?

Incomplete or inconsistent property records create risk, but continuously checking an entire portfolio manually isn’t realistic.

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LIVE WEBINAR | NOVEMBER 19

Industrial

Industrial's Demand Caught Up. Now Comes the Hard Part.

After three years of oversupply and rising vacancies, industrial real estate is showing signs of a comeback. Leasing has reached record levels, absorption is finally outpacing new construction, and vacancy is beginning to fall. But the tenants driving this recovery aren't necessarily the ones that fueled the last boom. Manufacturers, defense contractors, and data center suppliers are becoming increasingly important sources of demand, reshaping where industrial space is needed and what kinds of buildings are filling up.

The recovery also looks very different depending on where you look. Large, modern warehouses are outperforming smaller and older properties, while markets like Dallas-Fort Worth and Columbus are absorbing space at remarkable rates. Meanwhile, West Coast markets continue to struggle with declining rents and shifting trade patterns. Even where leasing is strong, new construction threatens to keep vacancy elevated. The national numbers suggest a market finding its footing, but they conceal a growing divide between winners and losers.

Investors are already betting heavily on the turnaround, pushing warehouse sales to record levels despite a less encouraging picture for property income. Asking rents are rising more slowly than inflation, concessions remain generous, and higher borrowing costs are squeezing investment returns. Developers, meanwhile, are ramping up construction in some of the very markets leading the recovery. Industrial real estate may have finally absorbed its last building boom, but the question heading into 2027 is whether the industry has learned enough to avoid another one.

How confident are you in the accuracy of your property data?

Leadership Turnover Tests Blackstone's Real Estate Division After Years of Decline

Blackstone named David Levine and Giovanni Cutaia as co-heads of its real estate division in September, following Nadeem Meghji's departure after less than ten months as sole leader. Meghji, who succeeded Kathleen McCarthy in January, plans to leave by year-end to spend time with family before pursuing new ventures. Jon Gray, Blackstone's president who built the real estate group, attempted to persuade Meghji to stay but failed. The leadership shuffle comes as the division struggles with declining profits and a delayed $30 billion fundraise.

Blackstone's real estate group posted distributable earnings down 10% year-over-year in the most recent quarter, with opportunistic strategies losing 3.2% in three months. Assets under management have dropped $30 billion from peak levels to roughly $309 billion as of September 30. The division's profit now runs at half its 2022 peak, and private equity has overtaken real estate as Blackstone's most profitable business. The flagship BREP IX fund, which began investing in 2019, has generated annualized net returns of just 3%.

Levine and Cutaia inherit nearly $47 billion in dry powder awaiting deployment across a dozen portfolios, with nearly one-third sitting in the flagship global real estate fund. That fund must deploy at least 70% of its $30 billion before Blackstone can raise new capital from investors. Recent bright spots include data center sales in Northern Virginia and AI-driven demand for warehouses and office space, with Anthropic leasing a 25-story San Francisco tower. Other major firms face similar challenges, with KKR and Carlyle posting comparable low-single-digit returns on pandemic-era opportunistic funds.

High interest rates continue to freeze commercial real estate transactions, with sellers unwilling to accept lower valuations and buyers waiting for better entry points. Blackstone is running a secondary process for its Blackstone Property Partners fund to return cash to investors and has cut management fees for some who remain. The new co-heads plan to focus on warehouses, hotels, grocery-anchored retail, and data center funding, but acknowledge capital markets headwinds from rate volatility. Gray maintains confidence in AI infrastructure investments tied to long-term contracts with hyperscalers, though new political headwinds may emerge from Democrats' midterm gains and Senator Elizabeth Warren's expected Senate Banking Committee chairmanship.

Bloomberg

Blackstone Real Estate Seeks Rebound From Shock Exits and Losses

Congressional Democrats Target Equipment Expensing Rules for Data Centers

Democratic lawmakers have introduced multiple bills to eliminate bonus depreciation for data center equipment, a tax provision that allows developers to immediately expense server racks, GPUs, and other capital costs rather than deduct them over the equipment's lifetime. Sen. Mark Warner of Virginia introduced the Data Center Tax Accountability and Disclosure Act in July, which would raise nearly $30 billion over 10 years by barring full expensing for data center owners. Senate Finance Ranking Member Ron Wyden of Oregon proposed going further, blocking data centers from Opportunity Zone incentives and REIT benefits in addition to bonus depreciation. Rep. Chris Pappas of New Hampshire, who won election to the Senate this week, has also introduced legislation targeting the same tax treatment.

Democrats gained control of Congress in the recent midterm elections, though any legislation must still pass President Trump. Tax policy experts at the Tax Foundation and BDO note that while full expensing under Section 168(k) has enjoyed bipartisan support for manufacturers and other industries, the proposals targeting data centers reflect a broader political backlash against the sector. Andrew Lautz of the Tax Foundation said the energy behind these bills is directed specifically at data centers, not at equipment expensing more broadly. The proposals may set the agenda for future tax legislation if Democrats regain the presidency.

Opposition to data centers has grown sharply over the past year, with 47 local ballot measures limiting AI data center development passing in the midterm elections. Permit approval rates for data centers fell to 34% in the third quarter from 54% in 2025, according to Spark. Polling from Heatmap shows 75% of Americans now oppose data centers near their homes, up from 42% in August 2025. Developers face more restrictive zoning, permitting requirements, and demands for community benefits even as over $1 trillion in capital flows into data center construction nationwide.

The Business Journals

A Data-Center-Friendly Tax Credit May Become a Target in 2027

Office Market Trends and Portfolio Strategies webinar

Free Live Webinar · Thursday, Nov. 12

Office Market Trends and Portfolio Strategies Heading Into 2027

1:00 PM ET / 10:00 AM PT

Office markets are still adjusting to shifting tenant demand, new workplace expectations, and changing investment conditions. Join us for a look at the trends shaping the office market heading into 2027 and how owners and asset managers are positioning their portfolios to perform.

✓	Evaluating asset performance and repositioning properties
✓	Adapting leasing strategies to shifting tenant demand
✓	How tenants are actually using office space, and what that means for layouts

Speakers

	Peter Miscovich Executive Managing Director, Global Future of Work Leader, JLL
	Thierry Ondet Managing Director, ROOM
	Todd Burner Chief Product Officer, Kastle Systems
	Franco Faraudo Editor and Co-Founder, Propmodo (Moderator)