Wells' Real Estate Morning Brief

What happened: Greensboro City Council voted 8-0 Tuesday night (one member recused) to establish a 180-day moratorium on data centers requiring more than 10 MW of electrical power. Council initially considered a 120-day pause but extended it to 180 days after public feedback, per WFMY News 2. The moratorium pauses acceptance, processing, and approval of DC development applications and runs through Feb. 14, 2027. Combined with Alamance County's unanimous 12-month vote Monday night, Piedmont NC saw two adjacent DC restrictions inside 24 hours.

Why it matters: Greensboro's arc - 5-4 rejection July 21, 9-0 procedural reversal Aug 3, 8-0 substantive adoption Aug 18 with a 50% duration extension - is the clearest signal yet that NC Piedmont municipalities are hardening rather than softening their DC posture. The restrictive belt now spans Greensboro (180d), Alamance (12mo), Waxhaw (12mo), Statesville (150d), Charlotte (150d), Yadkin (pending), Surry (24mo). Six weeks ago the map was mostly white; today Piedmont NC is effectively a soft-pause zone for hyperscale DCs through at least Q1 2027. Displaced DC pipeline demand must now find alternative markets or wait out the pauses.

Suggested action: Refresh the Trinity DC-map deck for internal use with Greensboro 180d / Alamance 12mo overlay and revised Feb 2027 expiration schedule. Coordinate with utility/economic-development contacts in SC Upstate (see radar item below on SC Upstate revision) and coastal GA (Douglasville, Coweta) to identify DC-ready sites now scarce in NC Piedmont. Charlotte 150d pause creates an underappreciated window for Trinity to lock power capacity at existing land holdings before Feb 2027 restrictions expire.

What happened: Total housing starts July 1.239M SAAR vs 1.35M consensus (Reuters, Census/HUD release CB26-127). Single-family starts -9.9% to 808K, described by Bloomberg as the slowest single-family pace since 2022. Multi-family (5+ units) 421K, -16.8% MoM. By Census region: Midwest starts -27.6%, South starts -12.6%, West starts -13.8%, Northeast +17.1% (per TD Economics). Permits were the bright spot: total +5.0% to 1.443M, multi-family permits +9.4%.

Why it matters: The South accounts for roughly half of national starts and 60% of Trinity's target-market footprint. A 12.6% drop is a durable signal that the building-materials, cabinets, appliances, HVAC, and flooring supply chains supplying Southeast home construction are demand-constrained heading into Q4. That directly touches distribution and warehousing tenants who supply the residential trades (Ferguson, Builders FirstSource, Beacon Roofing, Fortune Brands, Whirlpool, Masco, Owens Corning, Mohawk). Meanwhile the +9.4% multi-family permits print is a leading indicator that MF supply pressure may re-accelerate in 2027-2028 - relevant for Trinity's secondary multifamily coverage view on Charlotte and Raleigh.

Suggested action: Ask JLL / CBRE research to overlay Charlotte/Raleigh/Atlanta industrial tenant rosters against home-improvement / building-products SIC codes to size Trinity's exposure to the Southern-starts contraction. For any 2026-2027 lease-up projects with prospects in this vertical, discount underwriting velocity by 3-6 months. Conversely, on multifamily, note that permit re-acceleration in July argues for pushing Charlotte MF acquisitions before the next supply wave.

What happened: 10Y opens Wed at 4.70% per TradingEconomics, with CNBC quoting 4.686% as yields "pull back from multi-decade highs ahead of FOMC minutes." Tuesday's intraday high of 4.75% (per TE news wire) marked the highest since January 2025. Today's FOMC minutes release at 2pm ET covers the July 28-29 meeting where the Committee held rates 3.50-3.75% by a 9-3 vote - the three dissenters (Hammack, Kashkari, Logan) preferred a +25bp HIKE, the most dissents since September 2016.

Why it matters: This is a rate-market inflection: the Tue 4.75% peak represents where the market has settled inflation/supply concerns and where any hawkish-hold language in today's minutes could push yields to new 19-month highs. The reverse is also true - if minutes reveal 12-of-12 comfort with the current stance and dovish language on labor softness, the 4.60% level tested Aug 8 becomes achievable. Either outcome resets refi assumptions for Trinity's 2027-2028 maturity ladder. FedWatch has waffled: hike odds jumped from ~50% early July to 68.5% pre-July meeting, back to 50-60% hold after retail sales miss. Powell's Jackson Hole keynote Fri Aug 28 follows minutes.

Suggested action: Position for the minutes: (a) if hawkish, lock any pending SOFR cap purchases before the 4.75% cap strike repricing; (b) if dovish, do not rush - watch curve reaction and pre-Jackson Hole positioning. Either way, stress every 2027 refi at a 5.00% 10Y and lock incremental swap notional at current 4.70% base rather than gambling on a Sept cut narrative that has repeatedly failed to sustain.