Hello and good morningggggg!!!

After recent issues with cybersecurity attacks, the gaming industry is making headlines again as its workers seek to strike under the Culinary Union. A Manhattan office building is being marketed at under $200 psf. Multifamily rental rates are showing signs of slowing down nationally, while still growing in certain metros. Research report shows older multifamily assets have enjoyed larger rental growth than their newer peers in the last 10 years. High interest rates continue to impact deal activity. Rising insurance costs are creating another creating another headache in the real estate world due to lender requirements. Across broader markets oil prices are creating inflation worries, while a government shutdown and strikes could potentially impact broader economic output.

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Capital Markets

Market News

• Goldman issues warning stating stock selloff could intensify as trend-chasing funds are at risk of being forced to unwind equity holdings given current market trends (Bloomberg)

• Oil prices inched closer to $100 per barrel, which stoked inflation fears that pushed the 10-year treasury hit its highest level since 2007 (Yahoo)

• UAW threatens strikes at more plants if no agreement is reached between the union and automakers by 10am ET Friday. Strikes are currently involve only 18,300 workers of the 146,000 members (CNBC)

• Unemployment rates were higher in August than a year earlier in 189 out of 389 metro areas. However, national unemployment in August was 3.9%, largely unchanged from a year prior (BLS)

• Las Vegas hospitality workers voted to authorize a strike on Tuesday. Negotiations between the Culinary Union and the largest gaming companies remain far apart. There is no date set yet for when a strike would begin (TheGuardian)

• Redfin CEO says home sales slowdown will persist for a long time. With high prices and high mortgage rates crushing affordability. Home sales dropped to 4mm a year, down from 6.6mm in 2020 (Yahoo)

• Housing startup offers home listings for sale with assumable mortgages. The startup targets homes with low interest rate government backed mortgages (FHA, VA, USDA) that can be assumed by new buyers with lender approval (Yahoo)

CRE Headlines

• Half empty NYC office building could sell around $167psf. Eastdil Secured is marketing 80 Pine St. (1.2mm sf) for $200mm (Bisnow)

• Increasing costs of insurance and lender requirements for coverage impacting the financial viability of many assets (GlobeSt)

• Analysis shows older multifamily assets achieved higher rent growth over the last 10 years than newer buildings. The trend was attributed to lower average rents and thus more room to grow (CBRE)

  Rent Growth (10-year CAGR) by Decade of Construction

  

• Q2 2023 marked the third consecutive quarter of decreased deal activity. Higher interest rates, and consequently higher cost of capital, is creating a pricing expectations gap between buyers and sellers. This gap in pricing expectations is more pronounced in certain markets and in most prevalent in the office sector (PERE)

• Nationally, apartment rent growth was down. Month-over-month rent was down 0.5% and year-over-year was down 1.2% in September. Despite a decrease nationally, some major metros like Chicago, New York, and Boston reported YoY increases (YieldPro)

Deals Deals Deals

Sales

• Retail/Office: Wells Fargo is buying Hudson Yards retail space from Related and Oxford Properties Group for $550mm. The Bank will seek to convert the 400k sf retail space formerly occupied by Neiman Marcus into office space (NYPost)

• Industrial: BGO Industrial Real Estate Income Trust acquired a 34.2% interest in $948mm midwestern industrial portfolio comprised of 29 separate industrial buildings (PRNewswire)

• Multifamily: Community Preservation Partners acquires two affordable housing communities in Albuquerque, NM for $23mm. Total project cost for the 241-unit acquisition is estimated to be $66mm after renovations (REBusinessOnline)

• Office: Norges Bank buys 45% stake in Boston Properties’ (NYSE: BXP) 343 Madison in New York, NY, a 900k sf office asset (Bisnow)

Debt

• Office: Fulton Street Cos. secured an estimated $300mm construction loan for a 400k sf office development to be built in Chicago, IL’s Fulton Market. A senior portion of the loan is being funded by Bank OZK (Crain’s)

• Industrial: Bank OZK funds a $97mm construction loan for ViaWest Group’s Phoenix West logistics development in Glendale, AZ. The 1.1mm sf development will be made up of seven buildings (CommercialObserver)

• Industrial: Pearlmark Real Estate secured a five-year, fixed-rate, $40mm loan for the acquisition of a two-building, 410k sf industrial portfolio outside of Nashville, TN (REBusinessOnline)

• Office: Brookfield is looking to refinance Citypoint office tower in London, UK. The 705k sf asset last valued at £670mm in March 2023. The asset currently has a £368mm senior loan and £92mm mezz loan secured against it (Bisnow)

Developments

• Industrial: Rockefeller Group buys 35.6-acre site in suburban Denver, CO to develop a three-building, 454k sf industrial park. Confluent Development sold the site after buy the land in 2022 and obtaining all entitlements and approvals (REBusinessOnline)

• Multifamily: Trilogy Investment Group and Pinnacle Partners begin construction on a 68-unit build-to-rent townhouse community in Charlotte, NC (REBusinessOnline)

 Capital Raising

• Diversified: Alpaca VC will launch a new platform Alpaca Real Estate to invest in industrial and residential assets. The fund will seek to generate opportunistic returns with value-add opportunities coming from market repricing due to high interest rates (PERE)

Leasing

• Office: CareFirst BlueCross BlueShield, an insurance provider, renewed (62k sf) and downsized its lease by 140k sf at 840 First St NE in Washington D.C. The office is owned by Office Properties Income Trust (NYSE: OPI) (Bisnow)

• Office: Goulston & Storrs, a law firm, signs a 100k sf lease at One Post Office Square in Boston, MA. The firm is scheduled to move in to the 832k sf building next spring (REBusinessOnline)

• Office: Boot Barn expands HQ space and leases 116k sf (via sublease) in Spectrum Terrace in Irvine, CA (Bisnow)

Meme Summary