Good Morning!

Lots of big deals today. DrinkPAK, a manufacturer of canned beverages, signs two industrial leases totaling 2.9mm sf at Trammell Crow’s development site in Fort Worth, TX. Yieldstreet announces plans to acquire Cadre. PREIT might file for bankruptcy again. WeWork is seeking to back out of another six leases. RiteAid is looking to close another 31 stores. And office CMBS is going to run into some choppy waters in 2024 as loans mature. On Wednesday bank CEOs will try to convince lawmakers to avoid new banking regulations which could further impact lending activity.

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Merch Spotlight

Capital Markets

Market News

• Swiss Bank Admits to Helping U.S. Clients Hide Over $5.6bn from IRS

  Banque Pictet has admitted to helping U.S. taxpayers hide over $5.6bn from the IRS and has entered into a deferred prosecution agreement with the Justice Department. The bank has agreed to pay $123mm to the U.S. Treasury after it was found U.S. taxpayers with Swiss accounts evaded about $51mm in taxes between 2008 and 2014

• Spotify to Cut 17% of Global Workforce

  The music streaming service unveiled its third round of layoffs for 2023 in a move to slash costs to focus on becoming profitable. A spokesperson confirmed the total employees affected amounts to about 1,500 people. The company CEO cited higher costs of capital due to interest rates hikes as the reason behind layoffs

• Bank CEOs to Warn Lawmakers That New Regulations Will Impact Economy

  CEOs from the U.S.’s eight largest banks will appear before the Senate Banking Committee on Wednesday. The CEOs are expected to warn lawmakers that new regulation on how banks calculate their loss-absorbing capital and fair lending and fee cap rules, will stifle lending, hurting small business and consumers

• Average Personal Loan Rates Spike to Nearly 23%

  Average personal loan rates spiked to 22.91% for the week of December 4th. The lowest average rate, of the surveyed lenders, was 5.99% APR while the highest was 36% APR. The average loan amount and term was $17,170 and 45 months, both dropping from a week prior by $78 and 1 month

  Average Personal Loan Rate

  

CRE Headlines

• WeWork Wins Approval to Reject 67 Leases Seeks Another 6

  WeWork’s Bankruptcy court judge approved its request to reject 67 leases last Wednesday. WeWork is also seeking to reject another six leases at the following locations which are no longer operational:

  • 130 fifth Ave. in New York, NY

  • 880 Third Ave. in New York, NY

  • 245 Livingston St. in New York, NY

  • 35-37 36th St. in New York, NY

  • 75 Arlington St. in Boston, MA

  • 1623 N. Hall St. in Dallas, TX

• PREIT Might Soon Seek Chapter 11 Bankruptcy Protection

  According to information obtained by Bloomberg, PREIT might be filing for Chapter 11 again after filing in November of 2020.

• Yieldstreet to Acquire Cadre

  The alternative investment platform, Yieldstreet, announced it plans to acquire Cadre, an online real estate investment platform. Cadre was once valued at $800mm but reports from earlier in the year stated an acquisition by Yieldstreet could value Cadre at just $100mm. Cadre has raised over $133mm in debt and venture funding

• Rite Aid to Close Another 31 Stores

  As part of its bankruptcy filing, Rite Aid plans to close an additional 31 stores across California (7), Pennsylvania (4), Ohio (3), Virginia (3), Washington (3), Michigan (2), New Jersey (2), Oregon (2), New York (2), Connecticut (1), Maryland (1), and Nevada (1). When it first filed for Bankruptcy, Rite Aid originally said it would close 154 stores, before increasing the number to 178, and now 31 more. Rite Aid is attempting to restructure its debt which sits at $3.3bn

• 76% of Office CMBS at Risk of Not Being Refinanced in 2024

  Moody’s Analytics forecasted $47bn office real estate loans coming due in 2024. Around 765 face risk of being unable to refinance due to lease rollover, special servicing, and inability to meet debt yield and DSCR criteria

Deals Deals Deals

Sales

• Office: SL Green sells 625 Madison Ave, a 563k sf office tower in Midtown Manhattan in New York, NY for $633mm. As part of the sale SL Green and partners will originate a $235mm preferred equity investment in the property. SL Green acquired a leasehold interest in the asset for $230mm in 2004, and acquired the land via auction after foreclosing on the loan earlier this year

• Debt: Hudson Pacific Properties announced the sale of 100% of two tranches and 49% of a third tranche of debt associated with its Hollywood Media Portfolio for $146mm

• Land: Hudson Pacific Properties announced the sale of a 5.3-acre parcel in San Jose, CA for $44mm

• Retail: NewMark Merill Companies acquires a 172k sf retail center outside of Los Angeles, CA for $28mm from Seritage Retail Group

• Multifamily: DMG Capital, together with JDI Realty and The Wolcott Group, acquire a 72-unit multifamily community in suburban Chicago, IL

• Industrial: Opus Development and Principal Asset Management sell two industrial assets in suburban Chicago, IL. A 544k sf logistics asset was sold to a large financial institution and a smaller 105k sf asset was sold The Brimel LLC as part of a 1031 exchange

Debt

• Multifamily: Equity Residential secures a $350mm loan to refinance a five-building, 96% occupied, 1,623-unit multifamily portfolio. The 10-year, fixed-rate Fannie Mae loan was arranged by Regions Bank 

• Multifamily: Tishman Speyer secures a $300mm construction loan from Otera Capital to begin construction of 55 Hudson Street in Jersey City, NJ, a 1,017-unit multifamily high-rise with 75k sf of amenities and 60k sf of retail space

• Student Housing: Prospera Growth Fund secures a $71mm Freddie Mac-backed loan and $27mm in preferred equity from CenterSquare and RCG Longview Company to refinance a 1,044-bed luxury student housing asset near BYU and Utah Valley University in Orem, UT

• Retail: The Livingston Group secures a $38mm bridge loan from Voya Investment Management for Mayfair Shopping Center, a 221k sf retail center on Long Island in New York

• Hospitality: JMA Ventures, LLC secured a $23mm acquisition loan from MetLife Investment Management for a 109-key, Hampton Inn & Suites-branded hotel near Lake Tahoe in California

• Multifamily: JV between Cohen-Esrey Development Group and nonprofit The Place obtain a $23mm financing package for a 50-unit supportive housing development for youth dealing with homelessness in Colorado Springs, CO. Merchants Capital provided $11mm in LIHTC and Merchants Bank provided a $12mm construction loan

Developments

• Life Sciences: Construction tops out for the first building at King Street Properties and Helios Real Estate Partners’ The Landing outside of San Francisco, CA in Burlingame

• Multifamily: The Georgetown Company proposes a 396-unit multifamily high-rise in Chicago, IL

• Student Housing: University of Memphis and The Annex Group to develop a 540-bed student housing community on campus. The property is expect to be completed by fall 2026

Leasing

• Industrial: DrinkPAK signs two industrial leases totaling 2.9m sf in Fort Wroth, TX. The buildings are owned by Crow Holdings Capital, Rob Riner Companies, and Clarion Partners

• Office: MFS Investment Management renews its 330k sf lease in Prudential Center in Boston, MA

• Industrial: A mechanical contracting services provider signs a 291k sf lease at Clear Height Properties’ and MLG Capital’s 1675 Watkins Road in Columbus, OH

• Office: Investment bank, PJT Partners, signs a 270k sf, 15-year renewal and lease expansion at SL Green and Vornado’s 280 Park Avenue in New York, NY

• Industrial: H Global Commerce signs a six-year, 143k sf leaser at TA Realty’s 5401 Jurupa Street in Ontario, CA

• Office: Stonepeak Partners signs a 77k sf, 15-year lease at 245 Park Avenue in New York, NY owned by SL Green

Meme Summary

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