It is Wednesday My Friends!

Fannie Mae predicts a rise in SFR starts and drop in Multifamily development, NYC is overspending on migrant shelters with no bidding process, fundraising for close-ended funds drops, WeWork continues to renegotiate leases. In broader markets Consumer sentiment dropped, Bitcoin is making headlines again with new highs again, retail earning keep rolling in with TJX beating estimates. and more layoffs as Expedia cuts 1,500 jobs

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Capital Markets

Market News

• Decline In Consumer Confidence

  The Consumer Confidence Index fell to 106.7 in February, down from January’s revised 110.9, marking the first decrease in three consecutive months of gains. The decline reflects continued uncertainty in the economy. Write in responses reveal consumers are most worried about inflation, labor market, and the US political environment

• Retail Week: TJX Beats Earnings Estimates

  TJX reported a 13% surge in holiday sales, but issued future guidance that was below Wall Street expectations. TJX’s HomeGoods brand reported a 7% rise in comparable sales, which is surpassed analyst estimates of 4.7%. The home furnishings sales rise was notable given the other retailer’s soft numbers reported. TJX noted it benefitted from shoppers looking for value and quality deals

• Bitcoin Breaks Past $60K

  Bitcoin is near its pandemic high as it broke above $60K in early Wednesday. The coin is up 43% YTD following the spot bitcoin ETF news

• Expedia Cutting 1,500 Jobs Citing Lower Travel Demand

  The job cuts amount to nearly 9% of Expedia’s 17,100 global workforce. They are part of slowing travel demand following a post-pandemic boom and a broader reorganization of the company which includes a new CEO and cost savings of $80M to $100M. The company had recently acquired various booking sites including Hotels.com, VRBO, Orbitz, Hotwire.com, and Travelocity

CRE Headlines

• Fannie Mae Predicts Lower Multi Starts And More SFR

  Fannie Mae’s latest economic forecast shows a slight increase in multifamily starts in 2024 reflecting new data, but overall predicts lower construction as rent growth declines and new construction hits the market. Single family starts are predicted to rise as new data shows a steady stream in permits, with the pullback in construction being less than predicted. The lack of existing inventory is expected to continue to drive construction

  Multi-Family Housing Starts (Thousands)

  

  Single-Family Housing Starts (Thousands)

  

• NYC Overspending On Migrant Shelter Contracts

  A report by the City Comptroller, uncovered overspending by as much as 237% on emergency services that did not go through a competitive bidding process. The report also found large variances in costs and lack of contract reviews. Hourly rates for those managing on-site operations ranged from $68 to $139 per hour. The report found that the city would be better off bringing on full time employees rather than contracting out emergency staff, it also found that poor government planning and oversight have led to wasted resources

• JLL: Global Fundraising and Dry Powder For Close-Ended Funds Drops in 2023

  As part of JLL’s Q4 earnings call, the company reported the state of capital markets. Dry powder in closed-ended funds dropped in 2023 to $405B, below 2021 levels, while fundraising was down to its lowest since 2016. Surprisingly, Q2 2023 fundraising was one of the best quarters recorded with $66B raised second only to Q4 2024 when closed-ended funds raised $95B. The presentation also shows a decline in EBITDA every business segment for the brokerage beside its markets advisory and work dynamics groups which include leasing, property management, advisory, workplace & project management, and portfolio services

  Global Fundraising For Closed-Ended Funds

  

  Dry Powder In Closed-Ended Funds 

  

• WeWork Reaches Deal To Keep More Locations Open

  Landlords at two NYC and one Boston location have agreed to amend their leases with the bankrupt coworking giant. Abner Properties and United American Land reached agreements at 154 W. 14th St. and 408 Broadway in West Village and Tribeca in New York, while MetLife and Norges Bank, owners of One Beacon St. in Boston, also agreed to amendments. The deals struck reduce WeWork’s rent and footprint but in the case of 408 Broadway enter into a revenue sharing agreement

Deals Deals Deals

Sales

• Office: Barings under contract to buy 1370 Avenue of Americas from Principal Real Estate Investors in New York, NY. The 34-story Manhattan office tower is expected to sell between $150M to $160M

• Multifamily: Pantzer Properties Inc. acquires a 235-unit apartment building in Marlborough, MA from Rockpoint Group for $96M

• Multifamily: AIR Communities acquires The Villages at Sunnybrook, a 384-unit apartment community in Raleigh, NC for $87M from The Halle Cos.

• Multifamily: Palos Verdes Investments acquires a 254-unit multifamily asset in Los Angeles, CA for $79M from Walters Management 

• Multifamily: Great Gulf acquired the Poinsettia Club Apartments, a 72-unit property in West Palm Beach, FL, for $29M from the Frisbie Group

• Retail: Phillips Edison & Co. Inc. acquires a 74K sf retail center in Orlando, FL for $26M from Nuveen Real Estate

Debt

• Retail: VP Companies secures a $89M financing package for a retail winery facility in suburban Seattle, WA. Columbia Pacific Advisors provided a $47M senior construction loan and Nuveen Green Capital a $42M C-PACE loan

• Multifamily: Preservation of Affordable Housing Inc. secures $54M in debt and $49M in LIHTC from Merchants Capital for a 240-unit affordable housing asset in Chicago, IL

• Multifamily: Rise: A Real Estate Company secured a $33M mezz loan from Pearlmark for a 308-unit age-restricted community in Jacksonville, FL

• Senior Livings: Mission Senior Living secures a $27M loan from Lument for the construction of a 124-unit, 12-bed, assisted living and memory care facility in Durango, CO

Developments

• Office: JPMorgan to renovate Chase Tower in Chicago, IL. The 60-story office tower is expected to undergo a renovation that will generate $264M in economic activity in the county alone

• Industrial: CRG to develop a 67K sf spec industrial asset in suburban Chicago, IL

Meme Summary

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