A pleasant Thursday Morning to all!

GSA announces it has identified 23 properties, representing 3.5mm sf, to dispose of. FBI announced it’s moving its HQ to Maryland. The Mortgage Bankers Association reveals lending is down. Rite Aid declares it is trying to exit another 92 leases. Softbank loses additional money on WeWork after having to pay up on its letter of credit. Crude oil, treasury yields, and mortgage rates are all on a downward trend. Social Security faces the need for changes to avoid running out of funds in 2034. And the good news for today is that the actor’s strike finally reached an agreement with studios last night that should see Hollywood up and running again in a few weeks.

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Capital Markets

Market News

• U.S. crude oil prices dropped to lowest level in over 3 months on Wednesday to roughly $75 a barrel (WTI). The decrease comes as US oil production hits a record high of 13.2mm barrels a day and demand from China drops amid a slowing economy. The decline comes despite production cuts from Russia and Saudi Arabia and the uncertainty from war in Israel (Axios)

• Mortgage rates hover roughly 50bps below last month’s high with the 30-year mortgage rate average at 7.93% (Investopedia)

  30-Year Mortgage Rate Average

  

• Falling treasury yields are launching a rebound in the stock and bond market which has some investors worried that the Fed could keep its hawkish stance on higher rates for longer (Reuters)

• The actors strike is over after 118 days. On Wednesday night, the Writers Guild and SAG-AFTRA reached a tentative deal on a new contract that could see Hollywood up and running a matter of weeks (Deadline)

• Average credit card balances top $6k, the highest in 10 years based on a TransUnion report (CNBC)

• Social Security funds are projected to run out in 2034, when 80% of benefits become payable. A new report shows that if changes are not done now, in 2034 the program will face a 20% benefit cut to beneficiaries, a need to increase Social Security taxes by 25%, or a combination of cuts and tax increases (CNBC)

CRE Headlines

• Rite Aid to sell an additional 92 store leases across eight states as part of its bankruptcy restructuring process. A&G Partners will offer the retail leases for private sale. All leases have more than 10 years remaining term and range from 5k to 36k sf in size (RetailDive)

• Report from the Mortgage Bankers’ Association (MBA) says multifamily loan originations in Q3 were down 16% QoQ and down 50% YoY. Originations for all commercial loans were down 7% QoQ and 44% YoY (YieldPro)

  MBA Origination Volume Index by Property Type

  

• FBI will move its HQ to an undeveloped 61-acre site near the Greenbelt Metro station. The GSA noted that the site was picked because of its low cost to taxpayers, and transportation access to FBI employees and visitors. The FBI will be moving out of its existing offices at the The J. Edgar Hoover building after citing structural and space issues in 2005 (MarylandMatters)

• GSA announces it has identified 23 properties, representing 3.5mm sf, to dispose of. The sale of the properties will translate to over $1bn in cost savings over the next 10 years. The properties will need eligible to be transferred, exchanged, or sold to federal, state, or local entity and/or the public (GSA)

• SoftBank was required to wire Goldman and other lenders an additional $1.5bn as part of a letter of credit which brings SoftBank’s total investment in WeWork to over $16bn. The LOC was originated in 2019 after WeWork’s failed IPO revealed its massive lease liabilities and prompted landlords to demand proof they could be paid (Bisnow)

• Former Freddie Mac CEO steps down as executive chairman from Meridian Capital (TheRealDeal)

Deals Deals Deals

Sales

• Retail: Tide Realty Capital acquires a 743k sf shopping center in Baltimore, MD for $48mm from Kite Realty (CommercialObserver)

• Retail: Brandywine Realty Trust sells a shopping center in Philadelphia, PA for $14mm (ShoppingCenterBusiness)

• Retail: MIMCO acquires a 183k sf shopping center, Walzem Plaza, in San Antonio, TX (ShoppingCenterBusienss)

• Hospitality: Tuscan Brands opens a 165-key, Marriott-branded hotel in Tuscan Village, its flagship dining and entertainment district, in Salem, NH north of Boston, MA (REBusinessOnline)

• Multifamily: Sterling Group acquires a 196-unit multifamily asset in Carmel, IN built in 2021 from Birkla Investment Group (MHN)

• Industrial: Coro Realty acquires a 153k sf shipping center in Atlanta, GA from an affiliate of Fletcher Bright Co. The asset was located adjacent to a Kennesaw State University’s sports and entertainment complex (REBusinessOnline)

• Multifamily: Time Equities and Gordian Knot Investments acquire a 44-unit multifamily asset in Seattle, WA from Gibraltar (connectcre)

Debt

• Multifamily: Zidan Management Group secure a $184mm in combined debt for seven separate workforce housing properties across Indiana, Kentucky, and Ohio from Merchants Capital (REBusinessOnline)

• Industrial: A JV between Griffith Properties and Dune Real Estate Partners obtained a $78mm loan to refinance five industrial properties in Boston, MA. The loan was provided by Argentic Real Estate Investment and Hillcrest Finance. The properties were acquired in 2020 for $76mm (CommercialObserver)

• Self Storage: The William Warren Group secures a total of $67mm in financing for two self storage portfolios. The financing consisted of a 10-year, interest-only, non-recourse loan and a five-year, non-recourse loan with two years of interest-only payments (MHN)

Developments

• Multifamily: Related acquires a 1.3-acre multifamily development site in Jersey City, NJ for $58mm form Veris Residential. Related plans to develop approximately 800 units on the site (connectcre)

• Multifamily: Related Group breaks ground on a 319-unit, 56-story residential tower in Miami, FL. The asset is planned for completion in 2025 (TheNextMiami)

• Multifamily: TriBridge Residential opens a 202-unit multifamily community in Waynesville, NC. The asset was financed with $33mm. 2.87% fixed-rate HUD loan originated by Prudential Financial (MHN)

• Multifamily: Dominium set to break ground on a 200-unit affordable housing community in near Tucson, AZ supported by the Section 42 LIHTC program (MHN)

Distress

• Office: $670mm SASB CMBS loan backed by RXR’s Helmsley Building sent to special servicing citing imminent maturity default (CommercialObserver)

• Office: WeWork hands back 217k sf of coworking space at The Jacx in Long Island City in New York to Tishman Speyer. Tishman’s flex workspace brand, Studio by Tishman Speyer, will operate the space (Bisnow)

Capital Raising

• Industrial: Stonelake Capital Partners raises $746mm for its Stonelake Opportunity Partners VII fund which will be focused on logistics investment across 11 Sun Belt markets (PERE)

• Diversified: Teachers’ Retirement System of Louisiana approves a $125mm commitment to KSL Capital Partners Tactical Opportunities Fund II, a fund looking to raise $1bn to invest across various credit and equity strategies (IPERealAssets)

• Industrial: Alterra outdoor storage industrial fund secures $70mm from San Francisco Employees’ Retirement System. Alterra IOS Venture III is expected to close in Q1 of 2024 (IPERealAssets)

Leasing

• Office: Amazon renews 348k sf of leases in a pair of properties owned by JBG Smith in Arlington, VA (CRENews)

Meme Summary

Merch Spotlight