Markets Shrug, CRE Activity Steadies – Government Shutdown Risks, Bankruptcy Signals & SF’s Two Office Realities

For the week ending October 3rd, the LightBox team explores a market that seems unfazed by negative news. Despite a federal shutdown freezing key data releases, equity markets marched higher, brushing off Powell’s “irrational exuberance” moment, weak private jobs data, and even two surprise bankruptcies in the auto sector. Manus Clancy, Martha Coacher, and Dianne Crocker ask: are these isolated cracks, or canaries in the coal mine that could spill over into CRE credit markets?

The team also unpacks the September LightBox Activity Index, where environmental due diligence and appraisals held steady, while property listings surged to a new 2025 high, setting the stage for an active Q4. Environmental hot spots included Houston, New York City, Northern New Jersey, and Chicago, with one property type once again leading the way.

On the CRE transaction front, San Francisco exemplifies a “best of times, worst of times” office story. Trophy tower 101 California is testing the market at $1B after a $75M repositioning, while other assets traded at 58–90% discounts from prior values. In Chicago, a 440-acre former steel site is being redeveloped into a quantum tech campus, while in New York, IKEA snapped up Nike’s former SoHo flagship for $213M. The episode closes with signs of the times: Palm Beach micro-units as small as 240 sq. ft. and Amazon’s $5 grocery line, reminders of affordability pressures reshaping living and retail.

It’s a week of contradictions: buoyant deal activity, resilient CRE demand, but growing questions about whether markets are simply shrugging off too much.

00:14 Market Resilience Amidst Uncertainty
04:22 Bankruptcies and Credit Market Concerns
09:07 Impact of Government Shutdown on Markets
15:54 Lightbox Data Dive: Activity Index Insights
23:37 Market Insights and Trends
23:39 San Francisco's Office Market Dynamics
28:42 Chicago's Quantum Campus Development
30:36 IKEA's Strategic Expansion in Manhattan
32:34 Micro Living and Affordable Housing Trends

Have questions for the pod team? Send them to Podcast@LightBoxRE.com. 

www.lightboxre.com

Transcript

The CRE Weekly Digest by LightBox

Episode 66: Markets Shrug, CRE Activity Steadies – Government Shutdown Risks, Bankruptcy Signals & SF’s Two Office Realities

October 3, 2025

Martha Coacher: This is the CRE Weekly Digest by LightBox, a firm transforming the commercial real estate landscape by connecting every step of the CRE process with comprehensive tools and data. I'm Martha Coacher with our experts Manus Clancy and Dianne Crocker for the week ending October 3rd, markets seem to be shrugging off the shutdown showdown for now with federal agencies idled and key data on ice, investors leaned on private data prints and corporate guidance instead of Washington. Risk appetite held up rate cut odds inch higher and deal flow didn't stall. Manus, we seem to have avoided the September curse, but as you wrote in your monthly commentary, investors are still preparing for volatility ahead.

Manus Clancy: Yeah. September normally is the month where equity returns are the weakest. October is the month with the highest volatility. And I think your phrase, the shrugging off of everything that's happening is really apropos. We have shrugged off this government shutdown. We shrugged off a really. Surprisingly weak a DP jobs number this week, which was negative, we were expecting 45,000 new jobs added.

We were negative 32,000. I think that. It defies historical norms to be sure, and everybody right now is risk on, right? We'll talk about this in a few minutes, that there were a couple of corporate bankruptcies that didn't rattle the market. There were reports that AI spending could come in considerably higher than what people were anticipating, weighing on future earnings that didn't move the market.

The S&P 500 and the Nasdaq set several new records over the last 10 days, and for right now, it feels, not that I'm that old, but it feels like what the roaring twenties might have been like. 

Dianne Crocker: The thing that I noticed in the news this week, Manus, and it goes right in line with what you just said, was the media really made a lot out of Powell's comments at a Q&A session.

I believe it was late last week. You know where he talked about equity prices being fairly highly valued, and it seemed like the media really jumped on that and started calling it Powell's irrational exuberance moment, and drawing parallels to when Alan Greenspan in 1996 also spoke about irrational exuberance and to the point you just made.

You know, the market kind of shrugged off. Powell's comment. And I think some people were surprised by that. But you know, I read it and I thought, well that seems like an unfair comparison, that was a very different market. You know, stocks were about to nearly double before the 2000 bust. And when Powell said it, the markets, they shrugged it, to use your term.

They didn't crater. And I think, their position is still a very confident one. Maybe they are getting complacent, maybe the market is getting frothy. But I think. From investors' perspective, especially where the stock market is concerned, as long as corporate earnings continue to grow, then it's easy to shrug off comments like that.

But if that starts to change or we see some cracks starting to form, then I think we start to see more of a market reaction than we've seen thus far. 

Manus Clancy: Well, you're bringing those Greenspan remarks from the mid nineties. People often, especially if they weren't around then, tend to equate him making the remarks.

Then the market's selling off when in fact the markets continue to power higher for several years before they finally hit a wall in about March of 2000. And then we saw a very, very, very painful sell off, especially of tech stocks and internet stocks. You know, we're seeing two different types of people out there.

We have Jerome Powell and Leon Cooperman today. You know, he said he's very concerned about fret evaluations, but we do have a lot of. Well-respected investors, well-respected analysts saying the next stop is 7,000 for the s and p 500 up from 6,700 or so today. So I think there is some concern coming into the market right now, but it's hard to find somebody that is really calling for, you know, the, like the guy on Park Avenue with a cardboard sign and the end is near right, that there's nobody in that camp right now. So, we'll see how it turns out over the next quarter. 

Martha Coacher: Manus, as credit seems to be running hot. Something we've been watching closely, but we have seen some cracks showing at the edges. 

Manus Clancy: I'll run from one crisis to another. We talked about the.com bust a moment ago. I'll take us to the great financial crisis and the great financial crisis.

We were really humming along in 2006 and early 2007, and then out of the blue we saw things like the Indie Mac collapse. You know, the first bank that really started showing the problem with subprime lending. And then we saw. Some funds were operated by Bear Stearns liquidated, and these really came out of nowhere, and for a while, people dismissed them.

They were one-offs for many people, and the markets continued to rally for a couple more months. The question becomes, right now, were the two bankruptcies we saw this week one-offs, or were they canaries in the coal mine? So what we're talking about here is Trior, which is the subprime auto lender. They went belly up this week.

The other is First Brands who is a auto supplier, auto parts supplier, and both of these came out of left field, and you can look at this two ways. On the one hand, the concern lasted for about the length of a 32nd television commercial, right? The markets really didn't react at all, and it was, oh, well that's too bad.

Let's move on and drive the equity markets to new highs. And then there's the other side, which. People were reminding each other that this is just how things started during the great financial crisis, that there were these tiny little cracks, and we dismissed them as one-offs. My gut tells me these are one-offs, that this is not.

Evidence of an exuberant market that we have been lending hand over fist recklessly. I certainly feel that way in the CRE markets. I feel like we've been very disciplined. Has a lack of discipline emerged in the corporate lending market? Perhaps I'm not a, I'm really a tourist there, but I don't get the sense that it has.

I guess time will tell if people have really gone too far in those markets, but I just don't get the sense that this is gonna morph into something bigger. 

Martha Coacher: Manus, let me ask you, what's the potential that that spills over into the commercial real estate market? 

Manus Clancy: Well, there's several ways to answer that. If this is not a one-off, and we see more of these coming through the remainder of the fourth quarter into the first quarter, and we start to say there are credit problems, it's almost inevitable that this wouldn't push spreads wider.

Right. There is a contour, there is a shape to the credit markets where

the relationship between CMBS spreads and CNI spreads or corporate bond spreads, they maintain a certain contour to each other. And so when spreads widen on corporate debt, for example, it's really unusual for that not to morph into a widening of spreads in the CMBS market. So if this becomes something bigger, if two defaults becomes 10, and 10 becomes 50.

It's hard to see the CRE markets become immune from higher risk spreads. The analog here might be 2015, late 2015 and 2016, what we saw was oil prices went from $140 a barrel down to under $30 a barrel. There was this notion, not out of the question, that this was gonna lead to an enormous number of defaults.

Among energy companies, drillers, refiners, people that needed $60 oil to survive spreads, blew through the roof in the corporate credit market. In reflection of this, spreads went wider and wider and wider. And what they did was they dragged CMBS spreads wider. So much so that the CMBS market really froze.

And so to your question, I think it really comes down to. Is this the beginning of something more problematic or not? If it is, the answer is CRE will get roped into some degree. If it's one-offs, then it's business as usual. Love to hear your thoughts on this, Dianne. 

Dianne Crocker: I have some, you know what you just brought to mind, Manus is an analogy that you made several weeks back of a parent carrying a baby up the stairs and a spouse saying, Hey, could you carry this too?

And how about this laundry basket? And just thinking like, how much more can I bear? So I listened to you and I'm wondering, you know, what if there are more bankruptcies? What if there are more defaults? What if these aren't just one-offs? And then you layer on top of that to bring us to the big topic of the week, A prolonged federal shutdown.

You know, where's the breaking point? 

Manus Clancy: It's hard to say. It's pretty typical of the markets to go from one extreme to another that we see and hear no evil, and that these problems are just somebody else's problems until one day they're not. That they reach a critical mass and we move on. And right now they are one-offs.

Everything is a one-off. Right? The impact of tariffs, the impact of. The government shutdown, these two bankruptcies, everything, the weak labor market, all of these things right now are completely discounted, and that's where we stand. But as we know, markets pivot on a dime, and in two weeks, if we see a few more bankruptcies or a bad unemployment number or tariff data, that finally shows inflation starting to tick up.

You know, markets can pivot very, very quickly. 

Martha Coacher: Let's talk about the shutdown for a minute. We've seen this before many times. This is not the first time the government has shut down, and we've seen it as long as 30 some days, but the longer it goes on, obviously the worse it is. But this time around it does feel different.

It seems that both sides are really deeply entrenched. It's hard to see a path 

Dianne Crocker: forward. It does. It's bringing back memories for me because I used to live in Arlington right after college, and I was at a consulting firm where probably 75 to 80% of our business relied on that lifeline of federal.

Contracts. So I remember the tension around shutdowns. In a lot of ways these periods are the same, but I agree with you, Martha. You know, in a lot of ways this one is different and the longer it stays around the worse it gets. We start to see log jams and lending that can build. Light Box has clients who support.

HUD and SBA loan programs that come to a halt during a shutdown. And then even outside of federal lending, you could see borrowing and deal closings start to slow. Underwriting visibility, condemn if we're not getting economic data releases from agencies like the Bureau of Labor Statistics and the Department of Commerce and market confidence, which is already starting to erode a little bit, can also weaken.

So, I was talking this week to Andy, be he's the. One of our environmental consulting friends who's at TTI Environmental in New Jersey, and Martha, this gets to your comment about this time being a lot different than past federal shutdowns. He pointed me to the SBA site, which I had not looked at, and then I looked at HUD's website and anybody who goes to that website will see.

This big red field on the screen with this wording en large font, the radical left in Congress, shut down the government. HUD will use available resources to help Americans in need. And it just, I watched that and I thought, okay, this time is very different because I've never seen that on a federal agency site.

The day after a shutdown took effect. Not to be political, but I, it doesn't speak to an environment of compromise. So my immediate reaction after talking to Andy and seeing that language is that we could be in for a long haul here, given how divisive the political climate is and how much both sides seem to be really digging their heels in.

Manus Clancy: Two thoughts on that. One is really directed at both parties and that is never underestimate. A political party or a politician's ability to paint themselves into a corner, right? That this is not unique to this situation. It's been really true of every shutdown for the last 15 years or so that a.

Each party will over promise to their constituents what they could pull off in a shutdown. That this is the time where they're gonna use that hammer and they're going to extract what they need. And the truth is, you really can't, right? You can never get everything you want, and you're setting up your constituents for disappointment.

So that's thought number one. Thought number two is. What could be unprecedented in this one is the fact that the White House and the administration have been really talking about using this for permanent shutdowns of things that they don't like in the first place, and who knows where that takes us, honestly, that if they said tomorrow, we never really liked the Department of Education.

We were trying to shut it down to begin with. Now we're gonna shut it down and all fill in the blank. 300,000 employees are now permanently furloughed or permanently laid off. What happens then, and what is the reaction? And do people dig in deeper at that point in, in that regard, this feels different than the others we've seen over the last 10 or 15 years.

And once that Pandora's box is open, there's really no telling where it goes from there. What I will put in a quick public service announcement for those that live and die by the first Friday of the month at eight 30 when those job numbers come out. If you don't have that time filled, or I'll be happy to give you tomorrow at some point.

The Light Box monthly activity index, we're gonna talk about that a little bit more later, but. The jobs number A, a very important barometer for the markets. We think the light Monthly Activity Index Barometer is. Really important too. And if you've never seen it before, we hope that you will take in Dianne's work in this regard.

It's a real measure of where the commercial real estate markets are happening in the here and now. 

Dianne Crocker: Thanks, Manus. I wanna add one more thing before we leave the shutdown topic. You know how much I love historical data? So I looked up the average duration of a shutdown since 1976. US federal shutdowns have averaged eight days in duration, but the modern episodes tend to run longer.

So 2013, the shutdown was 16 days, and 2018 to 19 was the longest on record at 35 days. So we'll see how long this lasts. On CNBC today, there was already unannounced $230 million decrease in travel plans. So that's really. Immediate economic impact. And as we said before the longer it goes on, the more we'll see impacts, I think clearly on the DC region that would bear the brunt of any long shutdown.

And we might see impacts in areas like Orlando, like Las Vegas, like Honolulu, that would really suffer from softness in the leisure and hospitality sector. 

Martha Coacher: Let's turn to the LightBox data dive, and we have just compiled our data points for the LightBox Activity Index, which we will be releasing next week, but we've got all three elements that Dianne can walk us through today.

Dianne Crocker: We do, and thanks to Manus teaser. So the activity index is based on three components and here's how they each shook out for September. Environmental due diligence conducted before major deals has been remarkably steady throughout Q3. We haven't seen a lot of movement up or down there, so it's been strong below June levels, but still elevated in September.

So it's really neither stronger nor weaker. Month on month. Environmental due diligence numbers were up 1%. And it was very similar with the lender driven appraisal number. Very, very steady in September, up 1% month on, month up, 3% year over year. So appraisals have been on a really slow, steady climb since way back in January and February and it's been, it.

Extremely encouraging to see that appraisal momentum did not really suffer, especially with the tariff volatility in the spring. So they've been really slow and steady, and I think more rate cuts would only help that component of the index. But I think the real story in September is with the property listings, which had spiked to a 2025 high in June, pulled back a little bit during the summer months.

And in September, the listings volume across LightBox platforms set a new high watermark for the year. So September's listings came in 3% over June's already strong level month over month. September listings were 25% over August, which is very much in line with the uptick that we typically see after August moving into September.

So the question is, is the strength across the three data points enough to bring. The index higher than it was in June, which was the high point of the year. I don't have that final number yet, but it's looking really good, I think, for breaking June's record, even if it's by a hair. So the September index is coming out early next week, and it could be, I think the property listings in particular could be setting up the market for a busy Q4 in terms of deal closings.

Manus Clancy: Couple of thoughts on that. And by the way, thank you, Dianne for. Assembling all this data. There's several people behind the scenes that I know do some real heavy lifting in pulling this together every month, so kudos to them for doing this. Two parentheticals on here. Parenthetical number one is it feels like, at least from the transaction data that we're seeing that.

The market remains quite buoyant that there's a lot of activity. The second half of September saw a nice pickup in the number of transactions we were seeing week after week. So it's nice to see the data itself tethering closely to the look and feel that we're getting from all the press releases and the news items that are reported really hourly across the country in that regard.

The other thought of it, which. I think also the data tethers very closely to the anecdotes is the person that assembles the appraisal data talked about how there was a real breakout this month in the industrial space that that really ticked up month over month, more so than any other property type.

And I feel like that's true too, that we saw a real nice number of nine figure sales usually portfolios, because that's how industrial sells. In the industrial transaction market, it seems like no matter how long this bull market and industrial extends, there's no end in sight. It just is the feel good story that just goes on and on and on.

Dianne Crocker: There's an interesting kind of reset happening in that market, but I think the Onshoring trend is really a boost in that particular segment. So we'll be dialing into that a little bit in the commentary, but I wanted to also mention, in light of the positive data points that we saw in September, there were some concerning reports that came out too.

In terms of the soft data and the confidence and the sentiment one was the conference boards index, which fell 3.6 points to 94.2 from 97.8 in August, and that dropped surprise economists a little bit. The consensus was that it would land around 96. They really pointed to a growing pessimism about business conditions and a weakening assessment of.

Job availability and hand in hand without the University of Michigan's consumer sentiment index also showed softness falling in September to 55.1 from 58.2. So I think, there are definitely some concerns out there, some increase in anxiety, but we'll have to see what happens in the next couple months.

There's certainly a lot to watch in these strange and interesting times. 

Manus Clancy: Well, there's always been that narrative out of Wall Street where bad news is good news, and probably more so now than at other times because every bit of bad news comes with it. The possibility that this will lead to lower interest rates, which will lead to asset inflation.

So every time you see one of these weak data points. I think there's a silver lining on behalf of equity investors who say, this is exactly what we wanted to hear. And you did see treasury yields react accordingly. We were up to our four 20 on the 10 year at one point over the last five or six days. Now we're back to four 10 ish, something like that.

So this bad news does tend to drag interest rates and long-dated bond yields lower. That's what Wall Street wants. They wanna see this renewed asset inflation, so that's probably part of the narrative that is keeping stock prices higher. But then we also had, the good news is good news piece of data about a week ago where PCE came in much cooler than anticipated PCE, of course, the personal Consumer expenditures index is, is said to be the feds primary data point when it measures inflation.

And the number ca that came out late last week was. Quite benign, well below what people were expecting. Another puzzling one where we walked away thinking when and how will this inflation eventually make its way through our system? But to the good people said, well, we'll take it that we expected it to be higher, but it wasn't.

So that's good news. So, an awful lot to take in over the last seven days to be sure. 

Martha Coacher: Turning to our, did you know we've got the top. Five metros for environmental due diligence through the end of Q3. 

Dianne Crocker: I dug out the year to date numbers for the first three quarters of this year, and the five strongest MSAs for environmental due diligence this year versus last year are Houston, New York City, long Island, Northern New Jersey, and Chicago.

So each of those metros has activity that's up 19 to 35% year over year versus the 12% industry benchmark. So it's seven to 23 points hotter. The national pace. So it's assigned capital's leaning into metros like Houston, like the Greater New York City, long Island, Northern New Jersey corridor. Chicago made it in the top five.

And the reason I share that and look so closely at the environmental due diligence data at a metro level is it's a good leading indicator of where investors are looking and where lending is ticking up and where there's more interest. So it certainly seems in 2025 that New York City, Houston and Chicago are definitely strong markets to be in this year. 

Martha Coacher: Let's go through the transactions. We're gonna start in San Francisco with an office trophy tower that's testing the market 

Manus Clancy: San. Is a microcosm right now of everything that is good and bad about the office market. And I know that most people think there's nothing good about the office market right now, but we know, especially people who listen to our podcast every week, that it is really a tale of two markets.

You have. Class A, which in some cases property values are exceeding where they were in terms of price per square foot from a couple of years ago. We've seen that in New York, we've seen it in San Francisco, that places that are brand new, that are amenity rich are really getting premium prices. And then you have the long and awful tale, which is the Class B and the Class C the.

The offices that are either poorly located, geo geographically, or amenity lacking that are in. Terrible shape financially in terms of their value per square foot. So we'll talk through a couple stories. The first one, the positive 1 1 0 1 California Street, their hez is looking to list this property for over a billion dollars.

This is a property that they poured $75 million into in 2023 to reposition, and this is part of the narrative that. For developers that have a great location, that are willing to invest, to upgrade and really make the property a class aaa, if you will, they can attract that premium price. And Heinz here looking to ride the wave of the fact that they poured money into it, that it's a unique asset and that there's a little bit of buzz in San Francisco that this AI.

Trend. The people needing space for AI developers is going to drive a renaissance for the Bay Area. That's the positive story. On the negative side, we have two real disappointing ones here that both came out over the last couple hours. The first 1, 2100 Powell Streets. Emeryville, California that sold for 72.5 million.

That property, 350,000 square feet, the value there, $200 per square foot. We've been saying for quite a while. San Francisco seemed to have settled into that $300 square foot price. Per square foot in that market here. Now a new, quite disappointing benchmark, $207 a square foot. This property sold in 2018 for $171 million, so we're talking about a 58.

Percent downdraft in price. The buyer here, LBA Realty. We also got another one. This one has been talked about for a while, but we hadn't seen the price come in for quite some time. This sale was. Announced in late July. It's four 20 Montgomery Street, and this is an even more awful cop. At the time, the price was not announced.

It just came out a couple hours ago. The asset, 400,000 square feet, selling for just 55. Million dollars. This is $134 a square foot. Wells Fargo had once been a big tenant in this property. They were also the owner of the building. They had pulled up their roots out of this building. They were no longer a tenant there.

They were looking to sell it. The buyer here redco, this property was once worth $350 million. So you're talking about a nearly 90%. Discount to where this property was valued at five or 10 years ago. So really a tale of two cities in the Bay Area. 

Dianne Crocker: The California Street example, man, this is really interesting. Just simply because a few weeks ago we were talking about that one block and the distress comps for office properties there ranged from 345 per square foot all the way down to a haircut at $115 per square foot. And now against that backdrop, the story that you talked about, 1 0 1 California, their ask of $900 per square foot.

Puts it in a different tier and it's all on the same block. Like I wonder if there's any other block in commercial real estate that has such a wide range of office properties. And so we might see price discovery at the top end if it clears anywhere near guidance. And then all of a sudden, San Francisco, which used to be the poster child for office vacancies, has a new benchmark for class A trophy pricing.

So I'm really interested to see how that one plays out. 

Manus Clancy: Dianne can become the modern day dickens. It was the best of times. It was the worst of times. Right? A novel about San Francisco Commercial real estate by Dianne Crocker. 

Martha Coacher: Manus. This next transaction takes us to Chicago and the new quantum campus that they're building.

Manus Clancy: Yes. This is an interesting piece of land in Chicago. I didn't know something like this even existed. 440 acres that. Used to be a US Steel site, which is ripe for development. I think that they are going to do, like you said, some kind of high-end tech site there. This was an interesting transaction.

Blue Owl came in, bought the land for 75 million of 'em, not mistaken, and then immediately sold the leasehold interest to related and CRG. What's the takeaway here? I think the takeaway here is that. Maybe this is repetitive from what I say week after week, that speculative building cash is still available and developers are willing to put shovels in the ground for really anything.

They're willing to do it for conversions, office to resi. They're willing to do it for ground up apartments, data centers, and in this case, something that I probably can't even imagine what they're gonna do in quantum testing program. I think all I could think of is what was a TV show, quantum Leap where the guy would go back and forth between generations, right?

One day he would be in the 1990s and he'd be back in the 1930s. Right, that they show on NBC. I can't even know what quantum testing program is, but there it is. 

Martha Coacher: We lost a good number of listeners in that reference. 

Manus Clancy: Well, they've redone it. There's a reboot of it now that I think is also on NBC. I was a fan of that show in the nineties.

I'm not a big TV watcher, but it was always, it's like MacGyver, right? It was like easy to digest and simple to understand. Just perfect for a guy like me. 

Dianne Crocker: I don't remember that one. I have to look 

Martha Coacher: that up. This next transaction takes us to New York and IKEA has bought Nike's flagship Soho building. 

Dianne Crocker: They did.

This was an interesting one. Martha IKEA bought the full building. It's at 5 29 Broadway and Spring Street in Soho for 213 million. And the retailer plans to use the first and second floors, which is about 25,000 square feet for its second Manhattan IKEA. And the rest will be renovated as offices and be leased out across like stories, a total of about 53,000 square feet.

So it's kind of an interesting play by IKEA. You know, that's obviously a hot multifamily market. In areas where rents are high, renters don't necessarily have a lot of money to spend on furniture. We're about to look at a tariff on upholstered furniture. So now they have a Manhattan IKEA to go to to buy their wood furniture, their futon, and maybe get some cheap food like Swedish meatballs and noodles.

Manus Clancy: I have to say, I'm always blown away by the sheer amount of money that some retailers will be able to or are willing to pay for street level space in Manhattan. I mean, you see it with firms, you know, high-end luxury bag makers, like coach and others. A couple years ago, unique low alo paid over three.

On fifth Avenue in the fifties now, IKEA 213 million, that, that's an awful lot of handbags or apparel or in IKEA's case, furniture to sell, in my opinion. I don't know how you ever get your money back on things like that. It's an extraordinary amount of money to pay in my mind. 

Martha Coacher: And these last two stories are really a sign of the times.

We've got micro moves and some other. Basket of goodies for $5. 

Manus Clancy: I saw this story here. The headline was Palm Beach County Okay's Micro-Unit projects aimed at post-grads. The approval there a four story 38 unit affordable project, which includes 26 micro-units of only 240. Square feet per unit, which I can't even imagine.

It sounds like you couldn't even get an IKEA box into that apartment. Right. You'd have to kind of take the pieces out of the box before you moved into it and assemble it in your building. You know, it sleeping there must feel like sleeping in a submarine. 

Martha Coacher: And coupled with that, Amazon rolled out it's Amazon grocery with a 1000 item private label line with most stables under $5.

So in your little micro apartment, you can get a $5 basket of goodies and live like a downtown pro on an intern's budget. 

Manus Clancy: I still can't get my arms around this. I mean, you're gonna hear Dianne's thought on this, like, we now sell 72 inch TVs, right? Are you gonna put a 72 inch TV in a 250 square foot apartment? I mean, you go blind that way and forget about the IKEA. You'd have to. You have to take the TV apart beforehand to get it into the apartment. The whole thing is just. It's upsetting me 

Dianne Crocker: clearly, but 240 square feet, it brought to mind one time I stayed in the hotel in Boston and the rooms are so small that they call them cabins.

They don't even call them rooms. And the bed was a Murphy bed, so if the bed was set up, you couldn't even walk around it. And that's what I picture with this Palm Beach story. Maybe the $5 baskets, Martha, are they many? Is the food many to kind of fit into these little tiny places? Who knows?

Manus Clancy: You couldn't fit a microwave in though. 

Martha Coacher: And with that, we'll close. Thanks to our production team of Alyssa Lewis and Josh Bruyning. Please join us every week as our LightBox team shares CRE News and Data in context. You can listen on any of your favorite podcast channels and send your comments or questions to podcast@lightboxre.com.

Thank you for listening and have a great week. 

Manus Clancy: Let's go.