Good Morning All!

Cipriani is seeking to raise $526mm to expand its global footprint across cities like Tokyo and Dubai. Fannie Mae announces new workforce housing financing program targeted for middle income family housing. Quiet cutting, practice of forcing employees into new/misaligned roles until they quit, is becoming a growing trend. Nightingale CEO to sell off personal assets (Jewelry and watches included) to make investors whole. Los Angeles office continues to have some high vacancy, with recent company layoffs not helping. Home sales projected to be at their lowest since 2008. Rite Aid files for bankruptcy and crude oil prices tick back up.

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Capital Markets

Market News

• Home sales predicted to be at their lowest since 2008, with only 4.1mm existing homes estimated to be sold by year-end (Yahoo)

• Global Hedge funds shorting food, beverage, and tobacco company stocks. The consumer staples sector was the weakest performing group in the S&P 500 for the weak ending in October 13, and was the most net sold U.S. sector (Reuters)

• Quiet cutting is becoming a growing trend in U.S. offices. Rather than layoff employees or fire them, companies are reassigning them to different roles in order to potentially save money on severance packages (CNBC)

• Rite Aid files for Chapter 11 bankruptcy on Sunday. Slowing sales and competition from Amazon and big box stores has impacted Rite Aid and other pharmacy chains. Mounting debt and a legal battle resulting from accusations of filing unlawful opioid prescriptions were larger factors leading to the bankruptcy filing (CNN)

• Seven regional hydrogen hubs are poised to receive $7bn in funding from the Infrastructure Investment and Jobs Act under the Department of Energy’s Regional Clean Hydrogen Hubs Program. The seven hubs are in phase two of negotiations which involves finalizing engineer designs, permitting, labor agreements and other technical decisions (POWER)

• Oil futures rise above $90 a barrel as investors wait and see impact of Israel-Hamas war on the Middle East. The US imposed sanctions on owners of tankers carrying Russian oil priced above the G7’s price cap of $60 a barrel, in an effort to close loopholes on Russian sanctions (Reuters)

• Halloween spending expected to reach $12.2bn in 2023, up from $10.6bn in 2022 (REJournals)

CRE Headlines

• Fannie Mae launches new workforce housing program to finance projects aimed at middle-income renters. The Sponsor-Dedicated Workforce program will be offered to borrowers who allocate 20% of units in multifamily projects to residents earning between 80% to 120% of median income (PRNewswire)

• Nightingale investors to be paid back with CEO’s condo, jewelry, watches, art, and proceeds from asset sales. Court documents revealed the assets which will be used to try and pay back investors for funds misappropriated (Bisnow)

• Foreclosure activity was highest in a small Texas town in September with one out of every 37 units in foreclosure. Dallas and San Antonio also made the top 10 zip codes for ATTOM’s top 10 zip codes with highest foreclosure rates (ATTOM)

  Top 10 Zip Codes with Highest Foreclosure Rates

  

• Office vacancy and availability reached 22.2% and 27.6% in Q3 for Los Angeles, CA with 44% of the market consisting of buildings with below 80% occupancy. Local office employment declined by 3% in August with Herbalife, Roku, Company3, and ImmunityBio all announcing layoffs. Office utilization remained in the upper 40% (Newmark)

Deals Deals Deals

Sales

• Retail: M Development acquires a 30-property, 242k sf retail portfolio from Hoffmann Family of Cos. in Naples, FL for $265mm (TheRealDeal)

• Multifamily: Berkshire Residential Investments acquires a 248-unit multifamily community in Miami, FL from Related Group for $135mm (TheRealDeal)

• Multifamily: Borello Asset Management acquires a 197-unit apartment community in Fort Collins, CO for $65mm from CA Ventures (MHN)

• Multifamily: CIM Group, and an undisclosed partner, acquire Onyx183, a 390-unit apartment community in Austin, TX (BusinessWire)

• Multifamily: JV between Ashcraft Capital and Iviron Capital acquire a 358-unit apartment building in Sarasota, FL (MHN)

Debt

• Industrial: IDS Real Estate secures $84mm, four-year, floating-rate bridge loan from PGIM Real Estate. The loan funded a two building, 432k sf, 100% leased Industrial portfolio in Los Angeles, CA which the borrower acquired for $126mm in July (connectcre)

• Retail: Continuum Analytics buys The Kaleidoscope Center, a 243k sf retail center, from Westport Capital Partners for $34mm. Hanmi Bank provided a $22mm five-year loan with one year of interest-only at 7.5% (CommercialObserver, connectcre)

Developments

• Industrial: Walmart to build a $350mm milk processing plant in Valdosta, GA. The site is expected to be operational in late 2025 (AP)

• Industrial: Sysco, a global foodservice distribution company, to break ground on a 354k sf distribution facility in Mesa, AZ. The $102mm project is expected to be operational by spring 2025 (AZcommerce)

• Mixed-Use: Terra Group begins construction on a 54-unit condominium and 102k sf office development in Miami, FL. Condo prices start at $1.2mm and the project is slated to be completed in Q2 of 2025 (MHN)

• Industrial: Scannell Properties breaks ground on a $30mm warehouse and distribution facility for Corteva Agriscience in Cincinnati, OH. Corteva signed a 10-year lease to fully occupy the 300k sf facility (connectcre)

• Multifamily: AvalonBay Communities purchased 6.8 acres in Durham, NC to build a 930-unit apartment community, with Phase I consisting of 459 units. Beacon Properties Group sold the site (REBusinessOnline)

Capital Raising

• Hospitality: Cipriani seeking to raise $526mm to fund global expansion across Dubai, Singapore, Madrid, Geneva, and Tokyo. The company will seek to expand its celebrity-packed restaurant and club model via Cipriani Hospitality Fund (Bloomberg)

Leasing

• Office: Legal Services Corporation signs a 15.5-year, 37k sf lease at Tishman Speyer’s 1.1mm sf International Square in Washington D.C. (CommercialObserver)

Spooky Meme Summary