Good Morning!

Blackstone to acquire Tricon Residential in deal representing $3.5B in equity value, Starwood launches a data center platform, Related Midwest might be building a new MLB stadium, and the Chicago office market ends 2023 with ~21% vacancy. Big week for data as Q4 GDP numbers are set to come out, $4.9B in student loan forgiveness is announced, Macy’s rejects take private offer, and more company’s make headlines for layoffs

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Capital Markets

Market News

• Market Data This Week

  Fresh data and Q4 earnings will be released this week. Keep a close eye on Thursday and Friday as the market will try to predict the Fed’s next rate cut based on GDP and PCE data

  Monday: Leading Economic Index

  Tuesday: Richmond Manufacturing Index

  Wednesday: MBA Mortgage Applications, S&P Global US Manufacturing PMI

  Thursday: Initial jobless claims, Q4 U.S. GDP

  Friday: Personal income, spending, and consumption

• Current Administration Forgives $4.9B in Student Debt

  74,000 additional borrowers will receive loan forgiveness. $1.7B will be allocated for 29,700 borrowers through administrative adjustments to income-driven repayment (IDR) forgiveness and $3.2B for 43,900 borrowers through Public Service Loan Forgiveness (PSLF). Those who qualify for IDR have been making payments on their loans at least 20 years, but did not get relief through income-driven repayment plans and those who qualify under PSLF are teachers, nurses, firefighters, social workers and public servants with at least 10 years of service

• Macy’s Rejects $5.8B Offer

  On Sunday, Macy’s rejected Arkhouse Management and Brigade Capital Management's $5.8B offer to take the company private, citing concerns over deal financing and valuation. The offer was for $21 per share not already owned by the partnership, which Macy’s thought was attractive or credible enough

• Layoffs Making Headlines

  A few of major companies made headlines over the weekend for their layoff announcements. This comes as tech, finance, retail, and auto manufacturers seek cost-cutting measures amid higher cost of capital, the rise of A.I., and lower sales expectations

  Wayfair: Wayfair announced it would be cutting 1,650 employees, approximately 13% of its global workforce. The action is expected to generate over $280M in cost savings

  Ford: Ford had previously announced slower than expected growth in EV sales, now it has announced roughly 1,400 employees will be impacted as the Rouge Electric Vehicle Center transitions to one shift beginning April 1. Note that this isn’t necessarily a layoff of 1,400 employees

  SolarEdge: SolarEdge Technologies announced it would lay off ~16% of its workforce, around 900 employees, to reduce operating costs. The company recently terminated manufacturing in Mexico, and reduced manufacturing in China. The company trimmed revenue expectation after weak demand for solar inverters

  Paramount: According to Deadline, Paramount is in talks of laying off roughly 800 employees in mid-February. The final number appears to still be up in the air, but has previously been reported to be 1,000 by the WSJ

  Sports Illustrated: A recent announcement by The Arena Group, the company which owns SI, a significant reduction of its workforce of over 100 employees

CRE Headlines

• Blackstone Buying Tricon Residential

  Blackstone and Tricon Residential Inc. announced they have entered into an arrangement agreement under which Blackstone Real Estate Partners X together with Blackstone Real Estate Income Trust, Inc. ("BREIT") will acquire all outstanding common shares of Tricon for $11.25 per Common Share in cash. The price represents a 30% premium to the January 18 price. The deal represent a $3.5B equity value. BREIT intends to keep its ~11% ownership stake post-closing. Tricon has a single-family rental development platform in the U.S. with approximately 2,500 houses under development, as well as numerous land development projects that can support the future development of nearly 21,000 single-family homes. The Company also has a Canadian multifamily development platform that is building approximately 5,500 market-rate and affordable multifamily rental apartments

• Starwood Launches Data Center Platform

  Starwood Capital Group announced the launch of Starwood Digital Ventures, a platform dedicated to its global data center investment strategy, which currently Includes $8B in assets. Starwood Capital also announced that it has entered into a strategic alliance with Worldwide Mission Critical, a company which provides services ranging from design management, bidding and procurement, construction quality control, and integrated testing for data center projects

• White Sox Stadium Relocating to Related Midwest’s Site?

  The White Sox, one of two Chicago MLB teams, have a lease expiration coming up in 2029 at their current stadium, Guaranteed Rate Field, which has brought up news of negotiations for a new stadium at Related Midwest’s 62-acre South Loop development in Chicago known as The 78

  White Sox Stadium Rendering at The 78

  

• Chicago Office Vacancy Rises to 21.2%

  Chicago recorded negative absorption of 368K sf in Q4, and a total of negative 1.3M sf for 2023. Vacancy ended the year at 21.2%, but occupancy during Tuesdays and Wednesday sits at 69.5%, second only to Austin. The market currently has 2.2M sf under construction with 51% pre-leased

  Chicago Supply & Demand

  

  Source: JLL Research

Deals Deals Deals

Sales

• Multifamily: Knightvest Capital acquires a 398-unit apartment community in Plano, Texas

• Retail: Triple BAR Group acquires a three-property, 543K sf shopping center portfolio in Toledo, OH

• Industrial: Alterra IOS, acquired 17 properties in a sale-leaseback with TruGreen, a lawn care company. The deal totaled 350K sf of buildings across 15 markets

• Industrial: Hyde Development and Mortenson Properties acquire a three-building, 593K sf portfolio in Denver, CO for $74M from Invesco with Hartford Financial Services Group financing the purchase with a $44M loan. The asset previously traded for $31M in 2004

• Multifamily: PPR Capital Management acquires a 200-unit multifamily townhome community in Overland Park, KS. The assumed an existing loan on the property, featuring a 3.90% interest rate with three years until maturity

• Retail: Robhana Group and Reliable Properties acquire nine Big Lots locations from Blue Owl Capital for $51M across southern California and Miami, FL

• Office: Net Lease Office Properties announces the sale of four office properties totaling 302K sf across three states for $43M for an implied 8.35% cap rate on in-place rents

• Data Centers: Oracle-leased data center in Hillsboro, OR trades for $32M

• Industrial: Brennan Investment Group acquires a 263K sf industrial facility in Cincinnati, OH from Intelligrated for $15M. Byline Bank provided a $10M bridge loan

Debt

• Multifamily: Related Midwest secures a $500M construction loan for its 72-story, 635-unit multifamily high-rise in Chicago, IL

• Multifamily:

• Multifamily: De Anza Properties secures a $78M Fannie Mae loan for a 494-unit multifamily community in Salt Lake City, UT

• Multifamily: Vaja Group secures a $32M construction loan from Popular Bank for a 81-unit development in the Bronx in New York, NY

• Industrial:

• Office: Westerre secures a $17M senior loan from Builders Capital and a $10M C-PACE loan from Nuveen for a 18-unit residential condo building south of Los Angeles, CA

Developments

• Data Center: Tract planning a 400MW data center in Eagle Mountain, UT

• Multifamily: Kolter Group acquires a 149-acre development site in Palm Beach Gardens, FL for $74M from Landstar Development Group to develop up to 491 homes

• Multifamily: LD&D unveiled plans for its $200M mixed-use project in downtown Tampa, FL. The 28-story multifamily high-rise will offer 360 units, 45K sf of amenities, a 586 parking spaces and 33K sf of retail. Construction is expected to begin this summer

• Industrial: The Sudler Cos. is developing a 251K sf Tesla logistics center in Greenville, SC

• Hospitality: Pacific Hospitality Group to renovate the 194-key Hotel Granduca in northwest Austin, TX

Capital Raising / New Ventures

• Diversified: Ohio Public Employees Retirement System is increasing its target real estate investment allocation to 12%, up from 10% in 2023

• Data Centers: TA Realty launches data center development arm

Leasing

• Office: MSC Group, a cruise company, sign a 130K sf lease in Miami, FL at Swerdlow Group’s Block 55 at Sawyer’s Walk development

• Office: Wells Fargo signs a 44K sf lease a KBS Realty Advisors’ City View, a 221K sf office building in San Antonio, TX

• Office: Duane Morris, a law firm, signs a 10K sf lease at Beatty Development Groups’ Wills Wharf in Baltimore, MD

Meme Summary

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