Good Morning!

Blackstone hires JLL to manage the sale of its share of Signature Bank CRE loans it recently acquired from the FDIC, BlackRock acquires Global Infrastructure Partners, Office Properties Income Trust cuts its dividend, and LA sees the lowest office sales volume since 2010. This week will be all about news coming from the World Economic Forum’s annual meeting in Davos, Switzerland, 89% of homeowners have an interest rate of 6% or lower, Apple cutting some Siri Employees, and CEOs plan on A.I. increasing worker efficiency

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Capital Markets

Market News

• 89% of U.S. Homeowners With Mortgages Below 6% Interest Rate

  88.5% of homeowners have an interest rate below 6%, below the currently weekly average of 6.66% for new 30-year Mortgages according to Freddie Mac (7.11% without teaser rates, according to Investopedia). The low in-place rates have prompted many to stay put rather than selling their homes. Those who experience life-changing events or bought last year, at ~6% interest rates, have contributed to an uptick in listings. Roughly 79% of homeowners have a rate below 5%

• A.I. Is The Trending Tech For CEOs

  68% of U.S. CEOs surveyed by PwC believe the next 12 months will see A.I. increase the workload employees can handle. The increase in productivity should see a boost to profits according to 44% of CEOs. Overall, Wall Street expects the S&P 500 to grow 11% in 2024 thanks to A.I. tools and lower inflation

• Davos 2024: World Economic Forum

  The World Economic Forum’s annual meeting is taking place this week from the 15th through the 19th in Davos, Switzerland. The meeting hosts government leaders from multiple nations, roughly 800 CEOs, and 1,600 business leaders. Themes this year include the rise of A.I., geopolitical conflict, and the global economic outlook. Look for a live presentation on the Chief Economists Outlook today to kick things off

• Apple Tells 121 Siri Employees To Relocate Or be Cut

  Apple to combine a San Diego Siri team of 121 employees with a team in Austin, TX. Employees were told to relocate by end of January or potentially be let go on April 26. Those who relocate will receive a $7,000 stipend vs. those who are let go will get four weeks severance plus one week per year and six months of health insurance. The sudden relocation request is interpreted by many as an unofficial layoff, since many wont be able to move on such short notice

CRE Headlines

• JLL Tapped To Sell Blackstone’s Signature Bank CRE Loans

  Last month, Blackstone Real Estate Debt Strategies along with Blackstone Real Estate Income Trust formed a joint venture with a subsidiary of Canada Pension Plan Investment Board (CPPIB) and funds affiliated with Rialto Capital to acquire a 20% stake in the $16.8B CRE loan portfolio from Signature Bank. The FDIC retained the remaining 80%. According to FDIC info, nearly 90% of the portfolio has fixed-rate loans with strong in-place DSCR and low in-place coupons. JLL has been hired to oversee Blackstone’s sale of its portion of loans

• Office Properties Income Trust Sees Stock Plunge Following Dividend Cut

  On Thursday, Office Properties Income Trust (NYSE: OPI) cut its dividend from $0.25 per share the previous quarter, to $0.01 per share. The new dividend is expected to raise liquidity by $47M per year. OPI closed at $3.87 per share on Thursday, down 37.5% from $6.20 per share the day prior

• BlackRock Acquires Global Infrastructure Partners

  BlackRock to acquire GIP in a deal valued at $12.5B. The deal was includes $3B in cash and roughly 12M shares in BlackRock common stock. BlackRock believes its focus on large-cap transactions will compliment GIP’s mid-cap deals. GIP’s investment grade debt business will also aid BlackRock in attracting more clients as it already has a largely sub-investment grade debt business. GIP owns CyrusOne with over 50 data centers across the U.S.

• Los Angeles Office Sales Volume Lowest Since 2010

  The office market in Los Angeles saw roughly $2.5B in sales volume in 2023, the lowest since 2010 when volume totaled $1.8B

  Los Angeles Office Sales Volume

  

  Source: Newmark Research, MSCI RCA

Deals Deals Deals

Sales

• Retail: Hennick & Company acquires a retail condo in New York’s Upper East Side for $153M from Gazit Globe. The retail condo last traded for $73M

• Industrial: Walgreens executes a sale-leaseback on its 693K sf warehouse in Southern California’s Inland Empire for $112M. The deal saw Walgreens sign a 15-year lease, with three 10-year options

• Industrial: DRA Advisors and Rising Realty Partners acquire a 531K sf, six-building industrial portfolio in California. The portfolio was 98% leased to 14 tenants

• Industrial: LaSalle Investment Management and Link Logistics acquired two fully leased industrial assets from Bixby Land Co. in Phoenix, AZ

• Industrial: East Capital Partners and ABR Capital Partners acquires a six-building industrial portfolio in Miami, FL for $39M from Cofe Properties. The portfolio was 91% at the time of sale

• Life Sciences: Ventana Medical Systems, Inc. acquires a 113K sf R&D Facility in Oro Valley, AZ for $25M. The asset has been vacant since 2020 and originally cost $90M to build

• Life Sciences: Broward County acquires a 133K sf medical facility for $19M from Allied Health Education in Fort Lauderdale, FL to redevelop into a 177K sf Forensic Science Center. the asset last traded in 2021 for $16M

• Industrial: 3000-3010 E. La Jolla St. in Anaheim, CA sells for $18.5M representing a 4.9% cap rate. The 88K sf industrial asset was leased to Sonfarrel Aerospace which has occupied the asset since 1974. Buyer and seller were undisclosed

Debt

• Office: Paramount Group and Blackstone secure a loan extension on One Market Plaza, a 1.6M sf office asset in San Francisco, CA. The $975M loan went into special servicing as negotiations were underway

• Mixed-Use: GCF Development secures a $134M loan from Deutsche Bank for Hollywood Circle, a 25-story retail center featuring 386 residential units, a 111-room boutique hotel, and 55,500 sf of retail

• Multifamily: Prism Capital Partners secures a seven-year, fixed-rate $54M loan from New York Life Real Estate Investors for its 252-unit multifamily development in Dunellen, NJ

Developments

• Multifamily: RXR plans to build a 300-unit multifamily apartment community in Dallas, TX. The company acquired a 2.25-acre site with a 85K sf charter school which it plans to partially demolish. RXR plans to deliver the asset by end of 2025

• Industrial: The Goodman Group breaks ground on Goodman Commerce Center Cypress, a two-building campus south of Anaheim, CA totaling 390K sf with construction expected to complete in the third quarter of 2024

• Life Sciences: Celera Properties and True North Management Group completed phase I of the 250K sf Andover Technology Park in Andover, MA

Capital Raising

• Industrial: Atlas Holdings LLC, launches a real estate industrial investment platform with the purchase of a 23-property industrial portfolio for $300M. Atlas Properties investors have committed more than $500M of additional equity capital, will support more than $1B of future growth opportunities

Leasing

• Industrial: Sharp Electronics Corp signs a 138K sf lease at Alere Property Group’s 300K sf distribution facility outside Los Angeles, CA

• Office: TikTok to expand its office space to more than 242K sf at Kemper Development Company‘s Lincoln Square North tower in Seattle, WA

Meme Summary

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