And just like that, the holidays are upon us. 

It’s supposed to be an excellent shopping season for retailers — the National Retail Federation is projecting record spending across November and December: up to $989B, which would be a 3.5% increase over last year. That’s led by a record 183.4 million people expected to buy something between Thanksgiving Day and Cyber Monday. 

And guess what? That’s still mostly in brick-and-mortar: NRF expects 131.7 million people will shop on Black Friday, 65% of them in stores. 

That includes a return of the doorbusters. Placer.ai reported that Black Friday shopping before 9 a.m. declined for years but has been on the rise since 2020 and is expected to be above the historical average this year, as shoppers are particularly value-conscious right now.

Shopping will be bolstered by improving consumer confidence. New data this morning by The Conference Board showed it is near two-year highs, buoyed by optimism in the labor market and declining recession fears. New PCE and CPI data comes out tomorrow, which will give more insight into how inflation is affecting shoppers. The Conference Board said consumers are still highly concerned about prices.

One highlight across reports: The youths are out buying stuff. NRF said 89% of people aged 18-24 plan to shop over the Thanksgiving weekend, and The Conference Board said gains in consumer confidence were led by a large jump in people under 35 years old.

And with shopping comes the returns. CBRE predicts about $160B of all holiday retail sales will be returned this year, based on a typical 16% return rate and a $1T spending forecast. That’s increasingly handled in stores regardless of where the items were bought — about 50% of online purchases are returned in stores these days. 

Retailers are tweaking their store strategies accordingly, including by choosing locations in neighborhood strip centers that shoppers can easily swing into and by designing stores with dedicated return sections in the middle or back of the store so customers are tempted to browse.

All in all, retailers have a lot to be grateful for. 

The First Draft is taking a break the rest of the week, but we’ll see you on the flip side with some info on how the weekend went. Happy Thanksgiving and happy Black Friday! Be kind to each other.

— Kayla Carmicheal, Jay Rickey, Catie Dixon and Mark F. Bonner

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On Our Radar

• Does CRE face any immediate risks from Trump’s tariff threats? On Monday, Donald Trump said he would institute sweeping tariffs to combat drugs and illegal immigration: 25% on imports from Mexico and Canada and an additional 10% on Chinese goods. Critics warn these measures could disrupt supply chains, hike consumer prices and strain trade, risking retaliatory tariffs and economic fallout. The move challenges the USMCA and raises uncertainty for industries dependent on cross-border commerce — like CRE. Developers told Bisnow they worry about higher construction costs, delays and global price shifts for critical materials like steel, aluminum and glass. 

• Walmart is now the biggest company to roll back DEI initiatives. That includes changing its hiring practices and no longer selling LGBTQ-themed items marketed to children. The retailer joins scores of companies that have backed away from their DEI efforts after feeling heat from activists. CRE prioritized DEI after 2020’s racial reckoning. But even before the presidential election, which saw Trump frequently disavow DEI, legal challenges and political backlash prompted many real estate firms to soften their language, hire risk experts and scale back efforts. Still, according to a new Bisnow investigation, CRE has continued to improve its diversity over the last year.

• The 2024 Atlantic hurricane season inflicted $500B in losses. That’s nearly 2% of the U.S. GDP, according to AccuWeather. Experts attribute the devastation to warm waters and a La Niña pattern, dubbing it a “supercharged hurricane season.” Hurricanes Helene and Milton made landfall just 12 days apart, and while the full scale of the damage is still being compiled, Moody’s said the storms inflicted between $35B and $55B in insured losses. As Bisnow reported earlier this year, “the rise in cost to insure real estate is not going away anytime soon.” 

• New home sales fall to two-year low amid rising mortgage rates. New home sales dropped to an annual rate of 610,000 in October, the lowest since late 2022, down 17.3% from September's 738,000. Analysts had expected 718,000. Higher mortgage rates and prices continue to impact affordability, with the median home price rising to $437,300. Economists predict the housing sector will recover slowly as interest rates gradually decline.

• What's your bold 2025 prediction for real estate? The First Draft team wants to hear from the biggest players in CRE. Give us any and all takes in 150 or fewer words, and they may be published in future editions: firstdraft@bisnow.com. 

• Happy Thanksgiving! Fun fact: Your dinner will cost 5% less this year — $58.08 to be exact, down from $61.17 in 2023. It’s down 9% from 2022. We’re boggled by this number. Are we overpaying for turkey?

Today’s Deep Dive: Banks Sneak Back Into CRE Lending Through Private Equity Firms

Where there's a buck to be made, Wall Street will find a way.

A new regulation, known as Basel III Endgame because everyone needs their superhero moment, requires large financial institutions to hold significantly more capital in their reserves than before to prevent bank failures. The rules are aimed at reducing risk-taking by banks, which includes lending to real estate. 

But instead of being held back, those institutions have turned to private equity to do their lending for them. 

Read the full story here.

This Morning’s News

OFFICE — Office Properties Income Trust Gets Lifeline (Bisnow): The REIT, which said a month ago that it had doubt about its ability to continue as a going concern, reached a deal to refinance $340M in debt and push the maturity date out to 2027. OPI owns 20M SF and in total has $454M in outstanding unsecured debt. Read more here.

OFFICE — Office Conversions Gain Momentum (WSJ): There have been 73 conversion projects completed in the U.S. in 2024, 10 more than 2023, according to CBRE. Another 309 projects are planned or under way, most being office to residential. About 38,000 units are in the works. Read more here.

HOUSING — Cities Streamline Office-To-Resi Processes (Stateline): Municipalities are reducing bureaucratic hurdles to facilitate the conversion of office buildings into residential properties. Read more here.

FINANCE — Tishman Speyer Approaches $3B CMBS Refi (CO): Following its $3.5B refi for Rockefeller Center last month, Tishman Speyer is nearing a $3B CMBS refinancing deal for The Spiral, an office tower in NYC. Read more here.

DATA CENTERS — Equinix To Cut Hundreds Of Jobs (Bisnow): The world’s largest colocation operator is laying off 3% of its global workforce, about 400 employees. Equinix’s Q3 earnings exceeded expectations with a 7% YOY increase in revenue, and the REIT said the layoffs are due to shifting priorities rather than an effort to reduce payroll or staff. Read more here.

OFFICE — CBRE, Brookfield Expand Partnership (RENX): CBRE and Brookfield Properties have extended their office management collaboration into Canada. CBRE’s Investor Portfolio Management business currently oversees Brookfield’s 65M SF U.S. office portfolio. Read more here.

MULTIFAMILY — AvalonBay Projects Asking Rent Reacceleration (Multifamily Dive): AvalonBay Communities anticipates a rebound in asking rents in Q4, particularly in coastal markets. Read more here.

LEGAL — DOJ's NAR Statement Sparks Strong Reactions (Real Estate News): The Department of Justice issued a statement expressing concerns over the National Association of Realtors' proposed settlement, particularly regarding its potential impact on competition among brokers. This unexpected move elicited quick responses from industry stakeholders. Read more here.

MIXED-USE — Hotel Resort To Anchor New $2B Community (WFAA): A massive $2B development underway along the Texas-Oklahoma border has secured a resort hotel as its anchor. The 2,700-acre project at a former state park with 19 miles of Lake Texoma shoreline is set to have multiple hotels, a casino, golf course, waterpark and 2,100 homes. Read more here.

OFFICE — SL Green Acquires 500 Park Avenue (SL Green): SL Green has entered into a contract to purchase 500 Park Ave., an 11-story, 201K SF office building in Manhattan, for $130M. The firm plans to reposition the lobby, increase building amenities and enhance the public plaza as part of its investment strategy. Read more here.

RETAIL — Kohl's Appoints Ashley Buchanan As CEO (WSJ): Kohl's Corp. has named Ashley Buchanan, former CEO of Michaels and a veteran of Walmart, as its new CEO. Buchanan will succeed Tom Kingsbury and be the third Kohl’s CEO in three years. Read more here.

RETAIL — Abercrombie & Fitch Reports Strong Q3 Earnings (CNBC): Abercrombie posted its sixth straight quarter of double-digit sales growth and is expecting holiday season sales growth of up to 7%, ahead of analysts' expectations. Read more here.

RETAIL — Dick’s Sporting Goods Raises Holiday Guidance (CNBC): Dick’s Sporting Goods reported a robust Q3 and increased its full-year guidance, suggesting it's planning for a strong holiday shopping season. Read more here.

RETAIL — Bath & Body Works Forecasts Stronger Year (CNBC): Bath & Body Works expects a smaller annual sales decline than initially forecasted, crediting a strong holiday season. Read more here.

RETAIL — Best Buy Lowers Full-Year Forecast (CNBC): Best Buy adjusted its annual sales expectations downward, citing sluggish consumer demand for electronics. Read more here.

M&A — Blackstone Acquires Stake In $1B Loan Portfolio (Bloomberg): Blackstone has bought into Banco Santander’s infrastructure loan portfolio valued at $1B. The portfolio includes loans financing assets like data centers and transportation. Read more here.

HOTELS — Luxury Hotels Offer Lavish Inauguration Packages (Washingtonia): Hotels are launching extravagant packages for the presidential inauguration, featuring perks like helicopter rides, curated shopping sprees and chef-prepared meals for pets. Some of the offerings are as high as $350K. Read more here.

MULTIFAMILY — Airbnb Brings Subleasing Platform For Renters To UK (Bisnow): Greystar is launching Airbnb-friendly apartments in the UK, allowing renters at three properties to list their units on the platform. Airbnb is looking to partner with other landlords — which get between 10% and 25% of the revenue — and expand through the UK. Read more here.

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The First Draft is produced by Director of Newsletters Jay Rickey, Managing Editor Catie Dixon, Editor-in-Chief Mark F. Bonner and Deputy Newsletter Editor Kayla Carmicheal, with an assist from AI. We’d love your feedback! Email us at firstdraft@bisnow.com.