Happy Monday!

The global hyperscale data center market is expected to grow to ~$197B in 2028, A.I. jobs in D.C. beat SF, tenants with smaller data center requirements see rent growth outpace larger counterparts, and BREIT meets its redemption requests after more than a year of headlines. The February jobs report is set for release this week, BofA sees stocks going higher, Arkhouse ups bid for Macy’s, and telecom network cables suffer damage in the Red Sea

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Capital Markets

Market News

• February Jobs Report To Be Released This Week

  On Friday morning, the jobs report for February will be released with the report expected to show 190,000 nonfarm payroll jobs added last month and unemployment unchanged at 3.7%. The January report shocked the market with 353,000 jobs added, far above predictions

• Bank of America Thinks The Stock Market Can Go Higher

  An equity and quant strategist at BofA has revised their end of the year target for the S&P upward from 5,000 to 5,400. The strategist thinks a pullback is likely but their models predict higher upside remains in the market

• Arkhouse Management Ups The Bid For Macy’s

  Arkhouse Management and Brigade Capital Management have increased their bid for Macy’s from $21/share to $24/share, roughly a 33% premium to Friday’s closing price. The previous proposal was submitted and rejected in December due to concerns over financing and valuation

• Red Sea Telecom Cables Damaged, Internet Broke

  Damage to undersea cables belonging to four major telecom networks in the Red Sea is causing communication disruptions between Asia, Europe, and the Middle East. Internet providers are scrambling to reroute nearly a quarter of all traffic. No info on who was responsible was released

  Red Sea Map

  

  Here’s a map of the Red Sea (I know you were about to google it)

CRE (Data Center) Headlines

• Global Hyperscale Data Center Market Expected to Grow to $197B in 2028

  The global hyperscale data center market was valued at $139B in 2022 and is expected to grow to ~$197B in 2028. Cloud-based computing, and AI related computing have all accelerated demand, while government incentives and 5G networks have accelerated development. North America and APAC lead the in development

  

   

• D.C. Surpasses San Francisco For AI Jobs

  The D.C. MSA surpassed the Bay Area for A.I.-related jobs in December. With tech companies showing variability in their workforce D.C. has had less fluctuations thanks to government contracts and continued federal spending. With a wider base of industries, the D.C. area provides various areas of focus like tech, defense, healthcare, and finance over San Francisco

• Data Center Rental Rates Rise Fastest For Small Requirements

  In the last 6 months of 2023, rental rates rose 5% for sun 250kw requirements. Rental rates saw an 18% discount for requirements over 5MW, compared to sub 250kw. Rising availability is likely to ease rental growth, with precommitments in new facilities coming online being priced lower

  Data Center Rental Rate Growth 

  

• BREIT Fulfills All Redemption Requests In February

  Blackstone Real Estate Income Trust fulfilled 100% of the $961M of repurchase requests in February. The amount was below the 2% of monthly NAV limit and down 82% from January 2023

Deals Deals Deals

Sales

• Hospitality: Ashford Hospitality Trust Inc. under contract to sell the Hilton Boston Back Bay in Boston, MA for $171M. The 390-key hotel recorded net income of $2.3M and EBITDA of $16.7M in 2023. The sale would represent a 10.24x EBITDA Multiple if finalized

• Multifamily: Tahoma Capital Partners acquired Crossroads at City Center, a 208-unit, 13-building, multifamily development in Denver, CO, for $52M from Jackson Square Properties and Friedkin Property Group

Debt

• Multifamily: Thrive Companies secured $166M from Affinius Capital to refinance three multifamily properties in Columbus, OH

• Multifamily: Pelican Builders and Ember Group secure a $111M financing from Northwind Group for The Hawthorne, 17-story, 67-unit condo development in Houston, TX

• Hospitality: Cipriani, Midtown Equities, and Centaur Properties secures a $103M CMBS loan to refinance Casa Cipriani, a 47-key hotel and event space located in Manhattan, NY

• Industrial: Lincoln Equities Group and PCCP secured $83M from New York Life in construction financing for an industrial development in Morris Plains, NJ

• Multifamily: Barrington Brothers has obtained $61M in construction refinancing for the development of a 282-unit multifamily project in Miami, FL. Värde Partners provided the two-year, floating-rate loan

Developments

• Industrial: Hyundai to begin production of EV cars at its $7.5B EV plant located outside of Savannah, GA in Q4 2024

• Multifamily: Camber Property Group to break ground on a $76M 117-unit affordable senior housing development in the Bronx, NY. The development is part of a larger $1B affordable housing development

• Life Sciences: Morales Capital Group unveiled redevelopment plans for Viva Center, a 2.3M sf office and warehouse complex in Houston, TX. The group plans to redevelop the facility to support R&D of liquid-cooled IT equipment for supercomputing

• Industrial: INDUS Realty Trust Inc. and Scannell Properties to break ground on two-phase, four-building, 1M sf industrial development in Savannah, GA

• Hospitality: Hospitality Solutions to begin operations at its 164-key Embassy Suites by Hilton Gatlinburg Resort in Gatlinburg, TN

Distress

• Retail: Avi & Company acquires 5 East 59th St, a 57K sf retail/office site in New York, NY for $27M via foreclosure auction

Leasing

• Office: AT&T signs a full building lease at Menlo Equities’ Stonecroft IV, a 111K sf suburban office building outside D.C.

• Life Sciences: ADA Forsyth Institute signs a 76K sf lease at North River Co., and Leerink Development’s 200K sf 100 Chestnut, outside Boston, MA

Meme Summary

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