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American Healthcare REIT is targeting a $840M IPO, multifamily supply outpaces demand, LA votes to protect tenants from eviction until rent assistance for rent owed during Covid-19 arrives, multifamily CMBS default rates expected to double in 2024, and Chicago Industrial vacancy rises after a record year for new construction and slow leasing activity in the second half of 2023. All eyes on the Fed’s announcement today, China manufacturing activity contracts for the fourth consecutive month, UPS to cut 12,000 jobs, and IBM wants people back in the office

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Capital Markets

Market News

• Fed Likely To Keep Interest Rates Flat Today

  The FOMC’s two-day policy meeting ends on Wednesday with a 2pm ET statement released followed by a press conference held by Fed Chairman Jerome Powell. Investor are pricing in a 40% chance the central bank cuts rates in March. With low unemployment and inflation coming down, but still above the Fed’s 2% target, rate cuts are unlikely to be announced soon

• China’s Manufacturing Activity Contracts In January

  China’s manufacturing purchasing managers’ index came in at 49.2 in January, marking the fourth consecutive month of contraction. A PMI reading below 50 indicates contraction

• UPS To Cut 12,000 Jobs

  Layoffs continue with UPS planning to cut 12,000 jobs in order to cut $1B in costs after lower demand from its retail, manufacturing, and tech consumers. The company is also exploring a sale of its trucking brokerage business. UPS does not expect business conditions improving until the second half of 2024

• IBM Wants Employees Back In The Office

  IBM issued a statement to US managers stating they must be in the office or client location at least three days a week. Badge-in data will be used to track location and shared with HR and managers. With the exception of those who have a medical condition, those who are working remotely will need to relocate near a IBM office by August. Managers that can relocate or secure a remote role will need to separate from IBM

CRE Headlines

• American Healthcare REIT Targeting $840M IPO

  American Healthcare REIT said on Monday it was aiming to raise up to $840M via IPO. The real estate investment trust said it plans to sell 56M shares priced between $12 and $15 per share. The Company expects to grant the underwriters a 30-day option to purchase up to an additional 8,400,000 shares of its common stock to cover overallotments. Proceeds from the offering are intended to repay the nearly $704M on the REIT’s credit facility

• Multifamily Supply Exceeding Demand

  A recent CBRE report shows U.S. multifamily vacancy increased 20bps in Q4 2024 to 5.4%. Absorption throughout the year is expected to return long-term vacancy to 5.0%. Completions for 2023 totaled 416,500 units, the highest since the brokerage firm began tracking construction completions. Average monthly rent fell 1.2% QoQ in Q4, however it was 0.4% higher than year prior

  U.S. Multifamily Supply

  

• L.A. Council Says Tenants Can’t Be Evicted Until Rental Assistance Arrives

  The Los Angeles City Council voted last Friday to prohibit the eviction of tenants whose rental assistance applications have been approved but who have not yet received their funds. The vote comes days before Covid-19 eviction protections end, which would require tenants to pay unpaid rent accumulated between October 1, 2021 through January 31, 2021

• Multifamily CMBS Default Rate Expected To Double in 2024

  Fitch Ratings projects the U.S. multifamily CMBS delinquency to double in 2024 citing new supply, slowing rental growth, and higher opex. This comes in addition to higher interest rates, tighter access to capital, fewer special servicing resolutions, less new issuance and increased loan modification activity which have created a credit crunch across CRE

• Chicago Adds 37M Sq. Ft. Of Industrial In 2023

  Chicago recorded its highest overall industrial completion volume in 2023 with 12.5M sf being added in Q4 and 31.7M being added for the year. Vacancy climbed 40bps to 4.3% due to large speculative deliveries, with no new “big Box” users entering the market in the second half of 2023. Leasing activity totaled 34.9M sf for the year, below the pre-pandemic volume of 40.7M sf signed in 2018

  Chicago Industrial Supply and Demand

  

  Source: JLL

Deals Deals Deals

Sales

• Retail: J. Safra Real Estate to acquire Faneuil Hall Marketplace in Boston, MA, a 400K sf retail and office site, from Ashkenazy Acquisition Corporation 

• Industrial: RIM Logistics acquires acquires a 400K sf recently built industrial facility from Midwest Industrial Funds in suburban Chicago, IL. RIM intends to relocate its HQ to the property

• Multifamily: Targo Capital Partners acquires a six-building, 109-unit multifamily portfolio for $57M in New York, NY’s East Village from Kushner Companies

• Student Housing: Duke University acquires Blue Light Living apartments, an 84-unit student housing asset in Durham, NC, for $43M

• Multifamily: Fairstead acquires a 177-unit Section 8 affordable housing community for $27M in Fort Lauderdale, FL

• Industrial: BKM Capital Partners and TerraCore Capital acquired West 6th Center in Denver, CO for $11M. The JV plans to spend $7M to modernize the 123K sf small-bay industrial building

Debt

• Industrial: Riverbend Management secures a $112M loan to refinance and complete improvements for a 309K sf warehouse in Salt Lake City, UT

• Office: CalSTRS secured a $70M loan from Wells Fargo to refinance 11755 Wilshire Blvd in Los Angeles, CA, a 337K sf office built in 1986

• Retail: Brothers International Holding Corporation secures a 10-year, fixed-rate $21M loan through RGA Reinsurance Company for a 143K sf grocery-anchored retail center located in San Jose, CA

Developments

• Industrial: Jackson-Shaw and Compatriot Capital to develop a seven-building, 165 acre, 1.8M sf business park in Dallas, TX. The developer secured a $69M construction loan originated by Bank OZK and Affinius Capital LLC

• Industrial: CRG delivers a 1M sf spec industrial facility in Dayton, MN

• Industrial: Foundry Commercial breaks ground on IGP 95/Logistics Park, a three-building, 510K sf, industrial development outside Jacksonville, FL Completion is scheduled for Q3

• Multifamily: ECI Group and The Griffin Fund begin construction on a $76M, eight-building, 300-unit multifamily development outside of Atlanta, GA

• Multifamily: GL Homes acquires 120 acres in West Palm Beach County, FL for $29M. The vacant site is expected to be single-family home development

• Multifamily: The Maggiore Companies to build a mixed-use development featuring 50 residential condos outside of Boston, MA

Distress

• Office: A $1.1B CMBS loan backed by SL Green and Vornado’s 280 Park Avenue office in New York, NY was transferred to special servicer, Wells Fargo 

Capital Raising

• Multifamily: Walker & Dunlop Investment Partners has closed its first evergreen debt fund to focus on multifamily bridge financing. The fund has $157M in equity commitments and will support between $450M and $600M in lending capacity. The fund’s core strategy is to originate senior secured bridge mortgage loans with a maximum stabilized LTV of 75%, with a target size between $10M - $100M

• Industrial: CIP Real Estate lands $300M in capital from Almanac Realty Investors to acquire industrial assets along the sunbelt region

Meme Summary

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