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More data center drama as Elon Musk calls out Stargate AI for not having enough money, KKR merges its infrastructure and real estate groups, office tenants in Atlanta are increasingly buying their own buildings, and SL Green beats FFO estimates in a sign of Manhattan office leasing recovery

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Capital Markets

Headlines

• Office Users Buying vs. Renting in Atlanta

  In Atlanta, office tenants made up 34% of office buyers in 2024, up from 24% a year prior. Tenants have been buying up office assets from 150K to 300K SF at discounts from their previous trades

• KKR Combines Its Infrastructure and Real Estate Businesses

  KKR is looking to capitalize on overlapping opportunities across the infrastructure and real estate sectors as interest in datacenters rises. Of the $157bn, $77bn is made up of infrastructure and $80bn of real estate with infrastructure returning 18% over the last 12 months ending Q3 and real estate returning 3% over the same period

• Musk Calls Out Stargate AI For Not Having Money for Infrastructure

  On Tuesday, Trump announced a $500bn venture between OpenAI, Oravle, and Softbank to invest in AI infrastructure. On Wednesday Musk took to X (formerly twitter) to call out the venture for not having enough money secured. Oracle responded by saying 10 data centers, each 500K SF, are already under construction in Texas

  

• SL Green Realty Beats Analyst FFO Expectations

  On Wednesday the office REIT reported Q4 FFO of $1.81 per share vs. consensus estimates of $1.47 per share. Manhattan occupancy rose 2.4% for the quarter

Deals Deals Deals

Sales

• Retail: Cohen & Steers Income Opportunities REIT Inc. and Phillips Edison & Co. acquired Oak Grove Shoppes, a 142K SF, grocery-anchored shopping center in Orlando, FL from Kitson & Partners

• Multifamily: Bell Partners acquired Cherrywood Village, a 360-unit multifamily community in Parker, CO, from Starwood for $103mm and Luna Bella, a 240-unit multifamily community in Lafayette, CO, from Buchanan Street Partners for $83mm

• Industrial: Ackerman & Co., and Baltisse US Inc., sold a 307K SF industrial project in a suburb of San Antonio, TX. The buyer was undisclosed. The asset was fully leased to two tenants and had been completed in August of 2023

• Office: Paramount Group announced the sale of a 45% interest in 900 Third Ave, a 600K SF Manhattan office building valued at $210mm

• Medical Office: Bain Capital and Evergreen acquire a D.C. medical office building for $46mm from Harrison Street. The asset last traded for $62mm in 2013

• Medical Office: Profere Partners disposed of a 104K SF medical outpatient building in Longmont, CO. The buyer was not disclosed. The asset was 92% occupied and anchored by University of Colorado Medicine

• Medical Office: A JV between Cypress West Partners and TPG Angelo Gordon acquired a 47K SF medical office building in Nashville, TN

Debt

• Data Centers: HMC Capital secures a $130mm acquisition financing from Goldman Sachs for two $248mm data centers acquired last week in Texas and Kansas

• Multifamily: Empire Group secures a $70mm construction loan to develop a 287-unit build-to-rent community in Phoenix, AZ. The non-recourse loan was secured from a debt fund

• Multifamily: Tellus Group secures a $45mm construction loan from First Continental to develop the first phase of $1.5bn master-planned community outside of Dallas, TX

• Multifamily: Nafti Group secures a $40mm construction loan from Nuveen Green Capital to develop a 67-story multifamily tower in Miami, FL

Developments

• Life Sciences: BeiGene delivered its $800mm, 400K SF biologics manufacturing and clinical development center in Hopewell, NJ

• Multifamily: Western Securities is looking to build a 60-acre mixed-use development called outside of Dallas, TX which will include up to 900 multifamily units, a 150-key hotel, and 60K SF of retail

• Multifamily: Flow Life acquired a 16-acre development site in Miami, FL for $71mm to develop up to 2,300 multifamily units

• Senior Housing: Celadon Partners breaks ground on a 105K SF, 147-unit affordable senior housing building in Deerfield, IL

Capital Raising

• Industrial: Brennan Investment Group recapitalized its 1mm SF industrial portfolio of 20 small-bay buildings in Moorestown, NJ

Leasing

• Office: IBM signs a 15-year 362K SF lease at SL Green’s One Madison Avenue in New York, NY. The lease expanded the existing premises by 93K SF

Meme Summary

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