Warehouse Market Finds Its Balance as Construction Cools and Demand Rebounds

• Supply chain reaction: Warehouse market steadies as developers scale back construction and renewed demand restores balance.

• House of Bren: Irvine Company’s billionaire owner Donald Bren just disowned his son in a twelve-word statement amid mounting fraud accusations.

• Midtown makeover: In Midtown Manhattan developers are transforming old office towers into thousands of apartments.

• Multifamily webinar: Centralization is helping apartment owners cut costs, reduce risks, and improve resident experiences. Sign up

Industrial

Warehouse Market Finds Its Balance as Construction Cools and Demand Rebounds

After years of runaway expansion, the U.S. warehouse market is finally catching its breath. Vacancy rates held steady at 7.1% in the third quarter—the first time in three years that availability hasn’t climbed. Tenant demand is quietly picking up again, led by manufacturers, auto suppliers, and logistics firms that are reshaping their networks to get closer to customers.

Developers, once in a frenzy to build, are now exercising restraint. New warehouse completions fell nearly a third from last year, and speculative projects are giving way to custom, tenant-driven facilities. The South remains the nation’s most active region, while coastal hubs like Los Angeles and the Inland Empire continue to feel the drag of trade uncertainty and tariffs.

With rents leveling off and construction pipelines thinning, the industrial sector appears to be settling into a more sustainable rhythm. The market that once defined the pandemic’s e-commerce boom is now defined by discipline, as developers and occupiers alike adjust to a new era of precision in logistics real estate.

Overheard

America’s Wealthiest Developer Publicly Cuts Off His Son Amid Fraud Scandal

The public rupture between Donald Bren and his son David is as dramatic as any in American real estate history. Donald, the 92-year-old chairman of the Irvine Company and the nation’s wealthiest developer, issued a terse twelve-word statement disowning his 33-year-old son amid lawsuits accusing David of defrauding investors through a nonexistent luxury club called The Bunker. The project was marketed as a “Soho House for car lovers,” offering access to a $50 million fleet of supercars, private cigar lounges, and exclusive events, all supposedly backed by the Bren name. Investors say they were swayed by that pedigree and the illusion of access to the billionaire’s world.

Court filings now paint The Bunker as pure fiction. There was no club, no fleet of cars, and no memberships, only flashy decks, staged videos, and a Beverly Hills address that was never secured. Investors claim to have poured millions into the project, some losing life savings. One backer, wracked with guilt after encouraging others to invest, later died by suicide. Meanwhile, David has reportedly defaulted on leases, issued bounced checks, and moved between luxury properties in California and Florida, all while evading criminal prosecution. Judgments against him total more than $2.6 million, and lawsuits continue to mount.

For Donald Bren, the scandal’s proximity to his name was intolerable. Known for his meticulous control and aversion to publicity, the billionaire moved quickly to distance himself, insisting he has “no personal or business relationship” with his son. His response, as severe as it was calculated, underscores his lifelong commitment to protecting his empire’s reputation and perhaps reveals the same emotional detachment that long defined his private life. Bren’s obsession with precision and isolation is legendary: he reportedly drives around Irvine personally inspecting landscaping changes and refuses to share an elevator with anyone at his headquarters.

The episode highlights the growing tension between legacy and image in real estate dynasties. In an industry built on credibility, a surname can be both an asset and a liability. The Bren case underscores how reputation, not just capital, remains the most valuable currency in property and development. It also exposes a cultural shift: in an age of social media spectacle and influencer fundraising, even the most disciplined institutions can find their brands co-opted by proximity.

Midtown Manhattan’s Reinvention Turns Empty Offices Into a New Residential Core

Midtown Manhattan is fast becoming the center of New York’s office-to-residential conversion boom. The most ambitious example is the overhaul of Pfizer’s former headquarters on East 42nd Street, where developers Metro Loft and David Werner Real Estate Investments are transforming the twin towers into roughly 1,600 apartments. With Gensler as the architect, construction crews are stripping the buildings to their steel and concrete cores, adding amenities such as a rooftop pool and fitness center, and replacing tinted glass with energy-efficient windows. About 400 of the apartments will be designated affordable under the city’s 467-m tax incentive, which provides up to 35 years of property-tax stability in exchange for including rent-stabilized units. The Pfizer conversion underscores how weakening office values have created opportunities to reimagine Midtown’s aging towers as housing amid the city’s ongoing affordability crisis.

For decades, office conversions clustered in the Financial District, where Art Deco and Gothic-revival buildings were easier to adapt and incentives encouraged redevelopment after crises like 9/11 and the 2008 downturn. But post-pandemic remote work has hollowed out Midtown’s demand for offices, prompting developers to look north. About half of Manhattan’s 12.4 million square feet of planned or active conversions are now located in Midtown—equivalent to more than four Empire State Buildings of space. Projects underway include SL Green’s transformation of 750 Third Avenue into 600 apartments, Vanbarton Group’s redevelopment of the Archdiocese of New York’s former headquarters, and TF Cornerstone’s conversion of an office tower near Central Park into 350 units. The concentration of projects reflects a broader shift in Manhattan’s real estate geography: the once-business-only district is evolving into a mixed-use neighborhood.

Zoning and financial reforms have accelerated this migration. The city recently loosened age restrictions on eligible buildings, expanded where residential use is allowed, and rezoned Midtown South to permit conversions that could yield 9,500 new homes. The 467-m tax break has also made the economics viable by capping property taxes at roughly 3% of gross income for participating projects. Developers argue that conversions deliver housing faster and cheaper than ground-up construction—Metro Loft’s Robert Berman estimates apartments can be rented within 18 months of acquisition. If all current projects proceed, another 21 million square feet of obsolete office space could be removed from the market, transforming Midtown into a more livable, 24-hour district.

Office-to-Residential Playbook

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Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

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