Top of the morning!

The U.S. awaits the release of PCE data today in an effort to try and predict future rate hikes. The jobs data from yesterday suggests a slowdown in hiring activity. Eurozone inflation came in higher than expected suggesting more rate hikes in the EU and continued high rates for the foreseeable future. The Atlanta Fed president issued a warning noting additional rate hikes could do more harm than good to the U.S. economy. The Fed also stepped up its regulation of banks by issuing various notices in an effort to increase supervision following this year’s banking crisis. Insurance companies are feeling the pain of increased natural disasters and have begun to simply not ensure Florida and California. Home builders are helping buyers afford their new homes by buying down mortgage rates with the proceeds of the sale.

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Capital Markets

Market News

• Eurozone CPI came in at 5.3% in August, economists expected 5.1% (MarketWatch)

• September has historically been a month of negative returns for the S&P 500 (MarketWatch)

• China’s manufacturing activity in August contracted for the fifth straight month (CNBC)

• U.S. job growth slowed to 177,000 jobs in August, down from 371,000 jobs in July, and below the 200,000 jobs forecasted by Economists (CNBC)

• Atlanta Fed President says rates are high enough to bring inflation back down to 2%. Urges caution and risk of tightening too much (Reuters)

• Fed issues private warning to regional banks in an effort to increase supervision following earlier bank failures this year (Bloomberg)

• US temporary-help employment drops for sixth month in a row signaling a potential recession ahead. Data draws skepticism from hiring execs (Bloomberg)

• US borrowers are increasingly securing debt against company assets. Nearly two-thirds of junk bonds issued in 2023 secured by $70bn in assets (FT)

CRE Headlines

• Return to office is still not happening, with global office space used only about 30% of the time in Q2 (REJournals)

• Banks have already factored in an allowance for CRE loan defaults (GlobeSt)

• PE firms, pensions funds, and insurance companies increased their CRE allocation by 76 basis points in the first half of 2023 (GlobeSt)

• UK home sales hit lowest number since 2012 (CNBC)

• Some home insurers have stopped writing new policies in Florida and California due to increasing frequency of natural disasters. Others raising prices and reducing coverage (CNBC)

• Home builders are buying down mortgage rates for their buyers (MSN)

Deals Deals Deals

Sales

• Westcore acquires 3.5mm sf industrial portfolio in California (Yahoo)

• 432 Park Ave Condo in NYC under contract for $92mm (MansionGlobal)

• Apollo Realty Income Solutions buys $56mm Publix-anchored center from Terra in south Florida (TheRealDeal)

• Westcore buys 520k sf industrial park in Forth Worth, TX (REJournals)

• Stonemont Financial Group sells 214k sf industrial asset to owner-operator in Forth Worth, TX (Urbanize)

• Marcus & Millichap arranges sale of grocery-anchored retail center for $15mm in Wisconsin. Asset sold by foreign LLC (ConnectCRE)

Debt

• Greco and Eagle Ridge Partners secure $47mm construction loan, and $22mm in JV equity from Amstar Group, for a 237-unit multifamily development in Eden Prairie, MN (REJournals)

• Onni Group extends $384mm loan with Natixis into 2026, on its 1mm sf office campus in L.A. (GlobeSt)

• California Custom Processing secured a $33.5mm loan through the USDA’s Food Supply Chain Guaranteed Loan Program. The loan was funded by X-Caliber Rural Capital ($29.5mm) and CastleGreen Finance ($4mm) (Commercial Observer)

Developments

• AC Residential Partners and Cartel Properties complete site demolition and begin work on 312-unit, 489k sf mixed-use development in Atlanta (Urbanize)

• Pinyon Group begins development of 468-unit multifamily building in L.A. 66 units are to be set aside for affordable housing (Urbanize)

Leasing

• Architecture firm, Solomon Cordwell Buenz, close to signing lease for 35k sf in downtown Chicago (Crains)

• Chicago software sales company, Logik.io, triples office space in Chicago suburbs (Crains)

Meme Summary

Atlanta Fed President Be like:

Average Home Builder in 2023: