Goooood Morning Everyone!

After some brief technical difficulties we are back. Last week the Fed announced the possibility of continued rate hikes amid higher than expected inflation. This week’s labor report and PCE index will provide additional guidance on inflation which will help guide the Fed’s future rate decisions. The CRE sector continues to be impacted as continued rate hikes begin to slow multifamily asset sales and impact the chances of Gen Z / Millennials ever being able to afford a home. To combat affordability, Zillow recently announced a 1% down payment program. CRE loan defaults are becoming increasingly common headlines, as the percent of troubled loans from those maturing over the next three years rises to nearly 33%.

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Capital Markets

Market News

• Yields rose as Fed signaled further interest rate hikes (Yahoo)

• Labor report and Personal Consumption Index will provide further guidance on inflation this week (Yahoo)

• Young professionals continue moving to Florida (CNBC)

• Student loans are back (WSJ)

• Labor unions pushing for higher pay amid strikes and contract renewals (CNBC)

• Immigrants could fill unskilled labor shortage (CNBC)

CRE Headlines

• $1.9tn in CRE loans maturing through 2025, with $626bn potentially troubled (Newark)

• Retailers are reporting a decline in consumer spending and slowing in credit card payments (Bisnow)

• SEC approves rule changes requiring private fund advisors to provide detailed quarterly reporting and avoid preferential treatment regarding redemptions (SEC)

• Apartment sales down 72% Y-o-Y (GlobeSt)

• Gen Z and Millennials are giving up on buying homes (MarketWatch)

• Home owners are opting out of home insurance (WSJ)

• Property owners near ski resorts in Denver sue county over short-term rental ordinances (Bisnow)

• Home-builder ETFs jump after rise in new-home sales (MarketWatch)

• WeWork hires Kirkland & Ellis, Alvarez & Marsal, and Hilco Global for restructuring help (Crains)

• Zillow offers 1% down payment loans (CNN)

Closed Deals

Sales

• Realty Income (NYSE: O) to acquire 22% interest in Bellagio for $300mm from Blackstone and invest an additional $650mm (Reuters)

• Hudson Pacific Properties (NYSE: HPP) sells two L.A. office assets for $72.5mm, resulting in $22mm gain (HPP)

• Real Capital Solutions Acquires Medtronic life sciences campus in Denver for $188mm (CoBizMag)

• Adams & Company buys 12% stake back for $43.5mm from Rockrose Development in Flatiron District (PincusCo)

• Torose Equities, Lndmark Development, and Terranova Corporation acquire office asset in Coral Gables, FL (ProfileMiami)

• Afton Properties buys 248-unit multifamily asset in Inland Empire (Commercial Observer)

Debt

• M&T and IPA Capital Markets arrange $61mm, 10yr, 5.4% fixed rate loan on JRK’s acquisition of $93.5mm multifamily acquisition (Commercial Observer)

• Arbor Realty Trust (NYSE: ABR) provides $46.5mm loan for multifamily asset in Inland Empire (Commercial Observer)

Distress / Capital Raising

• California state court blocks foreclosure sale of unfinished $2bn Oceanwide Plaza development (GlobeSt)

• Washington Property Co. defaults on $35mm loan for D.C. office asset (Bisnow)

• Pre-construction software company raises $4mm in seed round (CommercialObserver)

Leasing

• NRA close to signing new HQ lease for 300k sf in TX (Bisnow)

• OpenAI targeting “large” amount of space in Uber’s HQ building in Mission Bay (Bisnow)

• Relativity cuts office footprint nearly in half, down to 100k sf, in Chicago office building (Crains)

Meme Summary