Signals from the Shifting Ground

Real Estate Insights. Success Mindset. One Step at a Time.

Issue #5 | Week of May 5, 2025

🧭 MARKET INSIGHTS

Signals from the Shifting Ground

🏢 San Francisco's $111M Signal: A Market Bottoming or a Mirage? In what some are calling a bellwether moment, a vacant 25-story office tower in downtown San Francisco just sold for $111.3M—a staggering 70% discount from its 2020 valuation. The buyer? DivcoWest and Blackstone. The strategy? Reposition the building to attract AI and tech tenants. The message? Some of the smartest money in the room is starting to nibble again. → Is this a bottom, or just a bounce? Either way, it’s movement—and that matters.

📦 Industrial Boom Cools: Vacancy Hits 7.1% For the first time since 2015, U.S. industrial vacancy rates have climbed above 7%. The rush to build during the e-commerce surge has finally outpaced demand, with over 65M sq. ft. delivered in Q1, but only 35M absorbed. The good news? Developers are pumping the brakes. → This isn’t a collapse. It’s rebalancing. And that creates clarity for long-term thinkers.

💸 Extend & Pretend: CRE Debt Gets a Reprieve CRE loan modifications jumped 86% YoY, with $39.3B in loans restructured. From CMBS to CLOs, lenders are choosing “extend and pretend” over foreclosure. Why? Rising rates, shaky asset values, and a collective hope that lower rates are around the corner. → It’s a pressure release, not a cure. But it buys time for smart repositioning.

💡 THE ALPHA EFFECT

Where Strategy Meets Mindset

When markets wobble, patterns reveal themselves.

This week’s stories each spotlight a different form of recalibration:

• Buyers stepping in—when fear keeps others on the sidelines.
• Builders easing up—because discipline wins when the tide turns.
• Lenders adjusting—because survival trumps stubbornness.

The question isn’t “Will it get better?” It’s “What can I do with the conditions we have?”

Alpha isn't about timing the bottom. It’s about seeing the floor when others are still staring at the ceiling.

🚶 ONE STEP AT A TIME

This week, ask yourself:

Where am I stuck pretending instead of repositioning?

Maybe it's a site you’ve written off… Maybe it’s an assumption that needs updating… Or maybe it’s your story about how this market “should” behave.

Extend if you must—but plan to reposition. This market will reward those who find clarity in the fog.

Here's to building your success, one step at a time— from the ground up. Kris “Dirt Dawg” McGee