Good Morning!

The DFW multifamily market ended 2023 with 7.1% vacancy, single-tenant net leased deal volume shifts toward industrial, and D.C.’s mayor approves a housing plan to spur new development with tax credits. In broader news, car insurance is driving inflation (see what I did there?), the Bears are now looking to stay in downtown Chicago, and mortgage rates drop below 7% causing mortgage applications to rise

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Capital Markets

Headlines

• High Insurance Costs Driving Inflation

  CPI data released on Tuesday revealed that auto insurance rose by 20.6% over the past year, while a separate study found that homeowner’s insurance jumped by 11.3% in 2023. Frequent weather disasters and higher car part costs were factors that drove insurance costs higher

• Bears Reveal Plan For Domed Stadium In Chicago

  Bears revealed plans to invest $2B to build a domed stadium in Chicago. The organization touted it as a way to host additional events and for fans to enjoy the city with additional open spaces being added to the current stadium’s layout. The Bears have a lease on their current stadium through 2033. The news comes after the Bears paid $197M for 326-acre former racetrack with Metra-rail access in Arlington Heights, IL (a suburb of Chicago)

• Mortgages Dip Below 7%, Trigger Spike In Mortgage Applications

  30-year fixed mortgage rates dropped to 6.84% for the week ending March 8, a 18bps drop. The rate was the lowest in nearly a month and trigger an increase in applications for home purchases. The Mortgage Bankers Association index of mortgage applications for home purchases increased 4.7%

• Net Lease Deals See A Shift To Industrial

  According to a Colliers report, 2023 posted the weakest sales volume for single-tenant net-leased deals since 2012. Industrial has become the most popular asset in the sector, as investors shift away from office. Investors are also likely to shift towards retail as institutional and REIT investors adjust their holdings. Cap rates trended higher in Q4 2023 with office and retail rising to 6.6% and 6.4%, while Industrial trended lower towards 6.0%

  STNL Investment By Asset Class

  

• Dallas-Fort Worth Multifamily Sees Vacancy Rise to 7.1% In 2023

  Multifamily conditions in Dallas-Fort Worth slowed down in Q4, with renter demand remained strong, but completions outpacing absorption. Vacancy rose 120bps to 7.1% to end the year following 29,035 units being delivered in 2023. Rents trended lower in Q2 dropping to $1,526 per month, down 0.5% year-over-year

  DFW Development Trend

  

• D.C. Residential Program Launches

  Washington D.C. Mayor Muriel Bowser launched the Housing in Downtown program designed to spur new residential development in downtown D.C. through a 20-year tax abatement. The program was announced after the mayor toured the nearly completed Elle apartments, the first major office-to-residential conversion in DC’s Golden Triangle Business Improvement District. The program is capped at $41M, with $2.5M available to projects from 2024-2026, increasing to a total of $6.8M in 2027, and then to $41M in 2028

Deals Deals Deals

Sales

• Multifamily: FPA Multifamily acquired 888 at Grand Hope Park, a 525-unit multifamily tower in downtown Los Angeles, CA, from CIM Group for $186M. CIM Group first listed the asset for $236M last summer

• Multifamily: RPM Living Investments acquired Aspire Lenox Park, a 400-unit, 10-building, multifamily community, for $85M. The seller was Willow Bridge Property Co. 

• Retail: Publix acquired Key Plaza Shopping Center, a 231K sf retail center in Key West, FL, for $75M. Publix was the anchor tenant at the center

• Multifamily: Orion Real Estate Partners acquires a 96-unit multifamily community in Salt Lake City, UT from Tablerock Capital

• Multifamily: Inland Real Estate acquired Phoenix RV Park & Storage, a 107 RV site and 45 RV storage space park in Salem, WA

• Medical Office: Sendero Capital and TPG Angelo Gordon acquired a 30K sf healthcare facility in Warwick, RI for $8M from NeuroHealth 

Debt

• Office: Pacific Equity Properties has secured a $135M first lien financing for Cross Creek Ranch, a 112K sf retail and office asset in Malibu, CA

• Multifamily: Clipper Capital Group secured a $18M, 10-year, fixed-interest rate loan to refinance Stone Ridge Apartments, 204-unit multifamily asset in Bullhead City, AZ. The loan was interest-only for the first five years with a mid-5% interest rate

• Office: Pacific Equity Properties has secured a $135M first lien financing for Cross Creek Ranch, a 112K sf retail and office asset in Malibu, CA

Developments

• Industrial: Stonemont Financial Group completed South Florida Logistics Center 95, a two-building, 1.3M sf spec distribution center in Fort Pierce, FL

• Multifamily: Southern Land Co. breaks ground on a 337-unit apartment development in downtown Las Vegas, NV

• Multifamily: Venterra Realty breaks ground on Camber Ridge, a 312-unit multifamily community outside of Houston, TX

• Multifamily: Standard Communities is developing a 240-unit affordable housing community in Woodbridge, south of Washington D.C.

• Multifamily: PCCP, LLC and 360 Communities to develop a 141-unit townhome community in Jacksonville, FL

Meme Summary

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