The midterms are over, Democrats won control of both chambers of Congress, and markets responded with Dow's biggest one-day gain since April 2025. In Episode 122 of the CRE Weekly Digest, Manus Clancy and Dianne Crocker unpack the election's implications for commercial real estate, and why the tech market's reaction was anything but straightforward.
Data centers are at the center of the debate. Election results could mean more scrutiny, permitting hurdles and slower development, with one estimate suggesting 25% to 35% of next year’s data center build-out could be at risk. The hosts explore what that could mean for AI infrastructure, data center values and the CRE markets benefiting from the boom.
The conversation also turns to the potential Anthropic IPO, which comes at a fascinating moment for AI. As investors question the enormous cost of the AI buildout, a public offering could provide a much clearer look at the economics of the business. Manus explains why stress in the tech credit markets can spill into CRE through higher risk premiums, pointing to CoreWeave’s bonds yielding as much as 16% as a warning sign.
In this week's Data Dive, LightBox 's October data shows the financing side of CRE under pressure. Daily average lender-driven appraisal volume fell 11% month over month, marking a third straight decline, while Phase I environmental assessments moved in the opposite direction, rising 4% after September's 5% dip. The Q3 Transaction Tracker shows continued geographic breadth, with NYC and Miami leading deal volume and a diverse mix of markets rounding out the top 10.
On the deals front, new development continues to get financed, from a $140 million loan for a Fort Lauderdale rental tower to a $230 million office-to-residential conversion at 675 Third Avenue. Meanwhile, Brookfield’s decision to hand back The Beaudry, its roughly $600 million downtown LA tower, illustrates how higher debt costs can turn even recently developed assets into difficult holds.
Plus, a timely Slice of Life on the slowdown in pickleball court construction and why a sport that fueled a boon for mall operators with vacant big-box store space may be entering a more mature phase. Manus and Dianne connect the dots between CRE, capital, politics, and the next phase of the cycle.
00:00 Midterm Election Fallout and the CRE Market
05:29 What the Election Means for Data Centers
11:17 The Anthropic IPO and AI Credit Risk
16:02 LightBox CRE Activity Index: Financing Pressure Builds
18:40 Where CRE Deal Activity Is Concentrated
19:34 New Development Still Moving Forward
23:57 Distress, Retail Deals and Hotel Valuations
32:59 Pickleball, CRE Trends and the Week Ahead
Have questions for the podcast team? Send them to Podcast@LightBoxRE.com.
