Happy Friday Everyone!

Slow deal day today. Fidelity National Financial, one of the national largest title insurance underwriters suffered a cyber attack from a ransomware group in mid-November that has impacted closings during Thanksgiving weekend and after. Austrian-based Signa declares insolvency. CRE job market most likely extending slump into 2024. And the SEC comes after a Phoenix-based CRE investor for misappropriating $35mm in investor funds. In broader markets, unemployment creeps up YoY for most major metros, PCE index grew by in line with estimates, Eurozone inflation grew by less than expected, and 30-year mortgage rates dropped to 3-month low.

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Merch Spotlight

Capital Markets

Market News

• The Personal Consumption Expenditures Index Grew by 3% YoY in October

  The PCE index grew by 3% YoY in October, down from 3.4% in September and in line with expectations. Core PCE, excluding food and energy, grew by 3.5% YoY, down from 3.7% the month prior and also in line with expectations. Core PCE is most watched by the Fed for rate decisions. EY senior economist predicts the Fed’s first rate cut will come in June 2024

• Eurozone Inflation Falls to 2.4%, Below Expectations

  Consumer prices fell at annual rate to 2.4% in November across the 20-country block, down from 2.9% in October. Economists had expected inflation to come in 2.7% for the month

• Unemployment Rates Higher in 223 out of 389 Metro Areas

  Preliminary unemployment rates for October were lower in 137 areas, and unchanged in 29. Major cities saw large increases YoY, but were mixed on a monthly basis

  Preliminary Unemployment Rate Data - Select Major Cities

  

• Mortgage Rates Fall to 3-Month Low

  30-year mortgages fell to 7.52%, with nearly every new mortgage average falling by double-digit basis points on Wednesday

  30-Year Mortgage Average

  

CRE Headlines

• Uncertain CRE Job Market Could Extend to 2024

  Large brokerage firms laid off hundreds in 2023 after dwindling transaction activity reduced revenue. 2024 was expected to be a rebound year for CRE hiring, but now it seems continued uncertainty in the real estate market will limit hiring and result in lower raises

• Signa Declares Insolvency

  The Austrian-based property giant, whose holdings include a 50% stake in NYC’s Chrysler Building, declared insolvency on Wednesday after attempts to secure funding failed. Signa’s holding company in Austria said it would apply to begin insolvency proceedings and start a reorganization of the group. The firm’s debts amounted to roughly 5 billion euros, with proceedings impacting 42 employees and 273 creditors. JPMorgan estimates total liabilities at 13 billion euros

• Title Insurance Company, Fidelity National Financial, Suffered a Cyberattack

  One of the nation’s largest title insurance underwriters suffered a cyberattack. Fidelity is the parent company of various regional title insurance companies which announced the security breach in an SEC filing made public on Tuesday November 21st. The filing was dated as of November 19 with ransomware group ALPHV/BlackCat claiming responsibility for the attack on November 22nd. The breach placed various closings on hold

• SEC Charges Phoenix-Area Real Estate Investment Company and its CEO with $35mm Fraud

  The SEC announced fraud charges against ArciTerra Companies and its CEO Jonathan M. Larmore for misappropriating investor funds since 2017. Allegedly, Larmore misappropriated over $35mm to pay for private jets, yachts, and expensive residences. The SEC also alleges Larmore created an entity which issued a press statement that it intended to acquire 51% of minority ownership shares in WeWork at more than 9x its then trading price causing the price to shoot up 150%. Larmore allegedly purchased 72,000 call options far below the stock price in the days before the press release. However, due to a delay in the press release most of the options expired before Larmore could exercise them

Deals Deals Deals

Sales

• Multifamily: MAA acquires a 323-unit multifamily asset in Phoenix, AZ for $102mm from Toll Brothers. The initial stabilized cap rate is expected to be 5.5% with an additional 100 to 200 basis points in efficiencies once the asset is integrated with the REIT’s platform

• Retail: Pacific Retail Capital Partners acquires The Shops at Palm Desert, a 72-acre shopping center in Palm Desert, CA, from Unibail-Rodamco-Westfield  

Debt

• Industrial: Scannell Properties received funding from Manulife Investment Management to recapitalize a 35-property, 10.4mm sf industrial portfolio valued at $1.2bn. Funds will be used to fund construction, leasing and operations on the assets

• Multifamily: Bank OZK provided a $95mm construction loan for a $200mm, 194-unit luxury residential development, 300 East 50th Steet, between MAG Partners and Safanad in New York, NY

• Office: Madison Capital and Tactonic Capital Advisors provided $40mm in financing for 180 Howard Street, a 211k sf office building in San Francisco, CA

• Retail: Calmwater Capital provided a $23mm acquisition loan for Decatur 215 Plaza, a 127k sf shopping center outside of Las Vegas, NV

• Industrial: Standard Insurance Company provided a $20mm loan to refinance FB Logistics & Storage’s 7-acre Amazon-Leased outdoor storage space in Los Angeles, CA

• Senior Housing: The Salvation Army secured an $11mm financing from the U.S. Department of Housing and Urban Development for a 150-unit affordable senior housing asset in Cincinnati, OH

Developments

• Data Centers: Novva Centers acquires a 7.5-acre campus in San Francisco, CA to develop a $500mm, 28MW facility. Phase I will open in summer of 2026

• Industrial: Panatonni and Crow Holdings break ground on a 783k sf build-to-suit industrial building for Harbor Freight Tools outside of Tacoma, WA. The JV had previously secured a $252mm construction loan for the larger campus site from PCCP

• Multifamily: Greystar Real Estate Partners and Partners Group break ground on a Washington D.C.-area, 301-unit, luxury multifamily development

• Multifamily: Urban Alfandre and Garner Batt complete a 150-unit multifamily community in Salt Lake City, UT

Capital Raising

• Diversified: Blackstone raises $2.6bn for its newest real estate secondaries fund, Strategic Partner Real Estate VIII

• Hospitality:

• Multifamily: Enterprise Community Partners raised an excess of $444mm across Enterprise Housing Partners Funds XLI and XLII from 19 investors. The two LIHTC funds will back 30 properties across 16 states

Leasing

• Industrial: Logistics Property Company lands two full-building leases totaling 846k sf at One Logistics Park outside of Tacoma, WA

• Office: Actors Federal Credit Union signs a 10-year lease a 1560 Broadway in New York, NY

• Office: Soundcloud sings 23k sf sublease at William Kaufman Organization’s 2 Gansevoort St in New York, NY

• Office: Raymond James signs a 20k sf lease at Barker Pacific Group’s 301 N Lake Ave outside Los Angeles, CA

Meme Summary

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