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Inflation seems to be cooling off, the CMBS special servicing rate is up, cuts in federal funding could impact low-income housing, and cap rates seem to have hit their highest according to a new survey

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Capital Markets

Headlines

• Low-Income Housing Shortage Expected To Worsen

  With federal budget cuts front and center, the National Low Income Housing Coalition has raised concerns that the 7.1mm home shortage could worsen if federal funding for affordable housing is cut

• CMBS Special Servicing Rate Rises To 10.32% In February

  The overall special servicing rate increased for CMBS increased in February, with $1.8bn CMBS loans entering special servicing. However, the total balance of CMBS loans outstanding decreased by $8.8bn skewing the rate upwards. Office and retail had the highest special servicing rates at 16.19% and 11.26%

• Inflation Comes In Lower In February

  The Producer Price Index, a wholesale inflation gauge, was unchanged from January, and rose 3.2% for the 12 months ended in February according to Bureau of Labor Statistics data released Thursday. A slowdown from January, when prices rose 0.6% monthly and 3.7% annually

• Have Cap Rates Peaked

  A survey conducted by CBRE, showed the vast majority of CRE professionals believe cap rates have hit their highest across asset classes. With the exception of office, less than 5% of professionals believe there will be any further increases. This in contrast to the beginning of 2023 when nearly half of all survey respondents expected cap rate expansions

Deals Deals Deals

Sales

• Multifamily: Steiner NYC acquires the Hub, a 55-story 750-unit residential tower in Downtown Brooklyn, NY. The developer paid $419mm to buy out J.P. Morgan and acquire full ownership

• Multifamily: A&E Real Estate acquired Rivers Bend, a 22-story, 179-unit, apartment building in Manhattan’s Upper East Side from Soloviev Group for $117mm

• Multifamily: The DSF Group disposed of SoMa Apartments, a 347-unit, workforce housing apartment community in Boston, MA. The buyer was not disclosed

• Industrial: Meniscus Group acquired a 103K SF industrial property in Temple, GA from Ackerman & Co

Debt

• Multifamily: J.P. Morgan Asset Management secured a $176mm of credit facility from Brookfield Asset Management financing to complete development of a SFR portfolio of 709 homes across seven single-family rental (SFR) communities in the Atlanta, GA metropolitan area

• Multifamily: NuVerse Advisors LLC secured a $99mm construction loan from BHI and several other lenders for the conversion of The Emmet Building, a historic Manhattan loft office building, into a 65-unit condo building

• Multifamily: TM Real Estate Group secured a $54mm construction loan from Truist Bank to develop Shalimar, a 200+ unit multifamily community in Boynton Beach, FL 

• Multifamily: LIHC Investment Group and L+M Fund Management secured a $53mm FHA Section 223(f) refinancing loan from Rockport Mortgage Corporation for The Montgomery Paulus Hook, a 308-unit mixed-income property in Jersey City, NJ

• Industrial: A JV between Altman Logistics Properties and FRP Development Corp. secured a $16mm construction loan for the development of a 202K SF industrial project in Lakeland, FL

Developments

• Data Centers: BlackChamber Group acquires a 65-acre development site from Pruitt Corp for $190mm in Manassas, VA

• Industrial: PNK Group delivers a 1.2mm SF industrial building in McDonough, GA as part of the PNK Park Southern Gateway campus

• Industrial: Rockefeller Group and Falcon Commercial Development to develop a 557K SF logistics park in Baytown, TX

• Life Sciences: Skanska delivered the George Mason University Life Sciences and Engineering Building, a $85mm, four-story, 132K SF facility outside D.C.

Distress

• Retail: Columbia Pacific Advisors acquired at auction California Market, an 83K SF shopping center in Los Angeles, CA’s Koreatown, for $29mm. Jake Sharp Capital defaulted on the loan with Columbia Pacific Advisors in January

• Office: SL Green and RXR secured a loan modification on the $940mm CMBS loan on One Worldwide Plaza, a 2mm SF office tower in Manhattan, NY, allowing sponsorship to return the loan to its master servicer 

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