Good Morninggggg!

Short week with Thanksgiving coming up, so expect lots of deals being pushed to the finish line (hopefully??). Wurldwide LLC set to buy over 1,000 acres of city-owned land from the El Paso to develop a $800mm data center project. Drama continues for NYC real estate developers with an FBI investigation being launched into possible corruption with those with ties to Mayor Adams and having received fire-inspection fast-tracking. Cap rates expand for the net lease sector. Fannie Mae renews its rent payment program aimed at helping tenants build credit. And Signature Bank’s real estate loan portfolio is rumored to have winning buyer for the auctioned portfolio.

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Capital Markets

Market News

• Banks will pay $16.3bn to the FDIC to cover losses from uninsured deposits at Signature and Silicon Valley Bank earlier in the year. Original estimates were thought to be $15.8bn. In addition, the FDIC’s proposal for increased deposit insurance rates crept up to 13.4bps, up from the original 12.5bps proposed, and would encompass 114 banks but exclude any with less $5bn in deposits (BankingDive)

• Airlines expect record-breaking air travel this holiday season. The TSA expects to screen 30mm passengers between November 17 and 28. This Sunday is expected to be the busiest day with nearly 3mm people flying after Thanksgiving (CNBC)

• Chinese regulators are drafting a list of 50 private and state-owned Chinese real estate developers eligible for funding. The government-provided list will provide funding guidance for financial institutions, as the country faces a property crisis that is driving increasing risks of default for its private developers (NASDAQ)

• Far-right libertarian, Javier Milei, wins Argentina’s presidential election. Among his promised policies include the dollarization of the country’s economy, abolishing the central bank, and privatizing the pension system. The new president will inherit a nation that has seen an annual inflation rate of over 140% and with roughly 40% of its citizens living in poverty (CNBC)

• OpenAI, the artificial intelligence company behind ChatGPT, had an interesting weekend as its former CEO Sam Altman was removed from the company following the decision from the Board of Directors citing no confidence in his ability to lead on Friday. Co-founder and president Greg Brockman quit following the board’s decision. Investors were caught off guard and tried to have the former CEO and co-founder reinstated. Ultimately, Sam Altman ended up joining Microsoft, which owns roughly 50% of OpenAI but is not on the board, to lead its new AI team. This all happened before the opening bell on Monday (TechCrunch, Fortune, CNBC)

CRE Headlines

• Blackstone in the lead to win Signature Bank’s $17bn commercial property loans from the FDIC according to Bloomberg. The bidding process has also drawn in large asset managers including Starwood and Brookfield. The Wall Street Journal reported separately that a venture between two nonprofits and Related Fund Management were poised to win the auction for Signature Bank’s loan portfolio backed by New York apartments. The auction process is being lead by Newmark (Reuters)

• Airbnb names former White House Chief of Staff for Joe Biden as its Chief Legal Officer (CNBC)

• Fannie Mae extends its Positive Rent Payment pilot program, for landlords financing via the agency, through 2024. The program pays for the first year of having data collection services for on-time rent payments and reporting it to credit bureaus. The program has helped residents establish and raise their credit score (YieldPro)

• The average single tenant net lease cap rate rose to 5.93% in Q3, up 13bps from Q2 and 55bps from Q3 2022. The only sectors which saw cap rate compression were banks, industrial and convenience store assets. On average, transactions executed had a remaining WALT of over 11 years a 19bps increase (AvisonYoung)

  Net Lease Sector Overview

  

• FBI investigating list of politically connected New York City developers in probe of possible corruption by New York City Mayor. The lawsuit stems from alleged favoritism in fire safety inspections for high-profile developers that were politically connected (Bisnow)

Deals Deals Deals

Sales

• Multifamily: A JV between Passco Companies and Greystone acquired a 303-unit luxury multifamily community in Knoxville, TN for $124mm from developer Southeastern. The purchase was subject to the assumption of a 10-year, $64mm, Freddie Mac loan with a 3.12% fixed-rate and three years of interest-only remaining (KnoxNews, connectcre)

• Multifamily: MG Properties acquires a 324-unit multifamily asset in Tempe, AZ for $100mm from Evergreen Devco. The deal was financed with a $65mm Fannie Mae loan (MHN)

• Retail: DLC Management Corp. and DRA Advisors acquire a four-property, 765k sf shopping center for $100mm from ShopCore Properties across Colorado, New Jersey, Arizona, and Ohio (commercialsearch)

• Retail: Ziff Real Estate Partners acquires a 214k sf shopping center outside of Charleston, SC for $47mm from Site Centers (ShoppingCenterBusiness)

• Retail: RockStep Capital acquires a 367k sf retail center in Manhattan, KS (commercialsearch)

• Multifamily: Crasqui Investments acquires a 296-unit apartment community near Daytona Beach, FL from LIV acquisitions (YieldPro)

• Multifamily: Four Leaf Properties acquires a 132-unit manufactured housing community in North Branch, MI from a private owner. The site is roughly 70 miles north of Detroit (MHN)

Debt

• Multifamily: Related Group and Alta Developers begin work on a 319-unit, 56-story luxury condo tower in Miami, FL after securing a $240mm loan from Cain International (CommercialObserver)

• Multifamily: A JV between The Arker Cos., SBV RE Investments LLC, and Dabar Development Partners secured a $225mm Freddie Mac loan from Merchants Capital to refinance and improve a seven-property property affordable housing portfolio in the Bronx (REBusinessOnline)

• Multifamily: An affiliate of Garden Communities secured a $50mm, 10-year, fixed-rate construction loan from Nationwide for a 177-unit multifamily development in Clark, NJ (CommercialObserver)

• Multifamily: NewPoint Real Estate Capital provided a private family trust with a $18mm Fannie Mae DUS acquisition loan for a 193-unit multifamily asset in Las Vegas, NV. The loan features a seven-year term with four years interest-only followed by a 30-year amortization schedule (REBusinessOnline)

Developments

• Data Centers: Wurldwide LLC seeking to acquire 1k acres for $8.5mm in El Paso, TX for the development of a $800mm data center project (DCD)

• Multifamily: JV between Ivanhoe Cambridge and Shea Properties completes a 518-unit apartment community in San Jose, CA. The construction was financed via a $137mm loan from Wells Fargo (MHN)

• Student Housing: Florida A&M University to develop an $80mm, 700-bed student housing project in Tallahassee, FL (MHN)

• Multifamily: Oak Row Equities and LNDMRK Development to build a 324-unit luxury multifamily asset in Miami, FL. Move-ins are expected to begin in 2026 (REBusinessOnline)

Distress

• Office: Deutsche Bank seeking to sell a 777k sf office asset at 222 Broadway in NYC’s FiDi betwen $150-$200mm. The asset manager acquired the asset for nearly $500mm a decade ago (TheRealDeal)

Leasing

• Industrial: Johnson Health Tech signs a 344k sf lease at Triten Real Estate Parterners’ Pederson Logistics Center outside of Houston, TX (REBusinessOnline)

• Industrial: Lineage Redistribution signs a123k sf lease renewal at TA Realty’s 385k sf warehouse at 6445 Will Rogers Blvd in Fort Worth, TX (REBusinessOnline)

• Office: Neal Gerber & Eisenberg, a Chicago law firm, signs a 90k sf lease at Onni Group’s 225 W Randolph in Chicago, IL (Crain’s)

• Office: Gordon Rees Scully Maksukhani, another Chicago law firm, signs a 30k sf lease at Irvine Company’s One North Wacker in Chicago, IL (connectcre)

Meme Summary

Merch Spotlight