Good Morning!

Final Newsletter of 2023, thank you to everyone who has been reading! Lets start off 2024 with more deals and good news. REITs have historically outperformed private real estate markets and equities after interest rate hike periods, positioning 2024 for potential outsized returns. Multifamily is projected to have sub 2% rent growth after a wave of supply in 2023 and 2024 hits the market. And a new program aims to help landlords of the rent-controlled housing assets in Signature Bank’s loan portfolio. In broader news, jobless claims rose above estimates last week, 2023 MBA grads struggle with job offers following the consulting and tech sectors imploding, mortgage rates are down below 7% again, and Americans dip into savings to pay for everyday items.

DEBT SURVEY: PropMemo & Real Assetzz are conducting a Debt Survey on recently financed transactions or term sheets. Results will be published next week (2024) with all data published being anonymous

Fill out the form to contribute to the Debt Survey

If you enjoy the newsletter, then help us out by sharing with friends and colleagues. Click the referral link below to share the newsletter, hit milestones, get rewards!

Interested in advertising? Then get in touch with us

Capital Markets

Market News

• US Jobless Claims Rise for Week Ending Dec 23

  New unemployment benefit claims rose by 12,000, for the week ending Dec 23, to 218,000, according to the Labor Department. According to a poll by Reuters, economists expected an increase to 210,000 for the week ended Dec. 23. Continued unemployment claims have been increasing since mid-September, indicating those already out of work may be having difficulties getting a job

• Harvard MBA Job Offers Slow Amid Recruitment Slowdown

  Only 86% of Harvard’s 2023 MBA class seeking employment received an offer. The figure is down from 95% for in 2022, and 96% in 2021. The impact has been felt across other MBA programs, and comes after consulting and tech industries deal with layoffs and delayed employment start dates

• Average 30-Year Mortgage Rate Drops Below 7%

  Interest rates on 30-year mortgage rates fell to their lowest since May on Wednesday.

  30-Year Mortgage Rate Average 

  

• Americans Are Dipping Into Savings to For Everyday Expenses

  A survey by CNBC and Dynata Banking Behaviors found consumers are dipping into savings to pay for everyday items such as car payments and groceries. While inflation has slowed the accumulated increases from the past few years still has many Americans dipping into savings. A smaller number of consumers tapped savings for large purchases, like a home, or for a medical emergency

  Uses for Savings Withdrawals

  

CRE Headlines

• FDIC & CPC Assemble a $550mm Rescue Fund

  The FDIC and Community Preservation Corporation have put together a $500mm rescue fund for owners of rent-controlled buildings in Signature Bank’s loan portfolio. The fund can be tapped for repairs to the 35,000 units

• Multifamily Rent Growth to Decelerate in 2024

  According to a Yardi report, multifamily rents are expected to remain stunted due to slower job growth, increasing supply, and waning affordability in 2024. 510,000 units are projected to be delivered in 2024, the highest number in decades. Occupancy rates slipped to 94.9% as of October 2023, roughly 1.3% lower than the peak in 2022. Given the wealth of new supply for renters, Yardi forecasts 1.5% rent growth in 2024

  U.S. Multifamily Rent Growth

  

• REITs Have Historically Outperformed Private Markets After Fed Tightening Cycles

  REITs have typically experienced total return underperformance during Fed tightening cycles, but have outperformed both private real estate and equities in post-rate hike periods. With the Fed at or near the end of its interest rate hike cycle, this creates a favorable outlook for 2024 REIT performance. With most REITs positioned with strong balance sheets in anticipation of a prolonged high interest rate environment, they are also well positioned to for potential opportunistic real estate acquisitions

  Average Total Returns During and After Fed Tightening Cycles

  

Deals Deals Deals

Sales

• Multifamily: Abacus Capital Group acquired a 400-unit, 37 building, garden-style multifamily asset outside Seattle, WA for $107mm from Sequoia Equities

• Multifamily: Carmel Partners acquires Alta Arlo, a 243-unit mixed-use multifamily building in Seattle, WA. The 350k sf asset was acquired for $97mm from Wood Partners. Berkeley Point Capital provided a $63mm Fannie Mae loan for the acquisition. Wood Partners acquired the site for $17mm in 2019

• Industrial: Oliver Street Capital and Bain Capital Real Estate acquired a 188k sf distribution facility outside of Boston, MA, for $50mm from Marcus Partners

• Hospitality: Apple Hospitality REIT (NYSE: APLE) acquires a 299-key SpringHill Suites by Marriott Las Vegas Convention Center for $75mm. The Las Vegas, NV hotel was acquired for a 10.7x multiple on T12 Hotel EBITDA

• Industrial: Phoenix Investors acquired a 785k sf industrial facility in Memphis, Tenn from Electrolux, which stopped on-site operations in 2022

• Industrial: Clarion Partners LLC acquires a 300k sf industrial building in Jacksonville, FL from CT Realty and Diamond Realty Investments

Debt

• Mixed-Use: Twining Properties and LMXD secure $60mm in financing to build Winchester Green, a 300-unit mixed use asset in New Haven, CT. Keybank provided a $49mm senior loan and New Haven Housing Authority provided a $11mm tax exempt loan

Developments

• Hospitality: Westdale Properties, King Street Capital Management and Cedar Capital Partners are executing a $85mm property improvement plan on Shelbourne South Beach in Miami, FL. The 251-key hotel was acquired for $120mm in 2020

• Multifamily: Crescent Communities to break ground on a 237-unit apartment complex north of Charlotte, NC. The company recently acquired over 15 acres for $6.5mm in Davidson, NC

Meme Summary

Interested in advertising? Then get in touch with us