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Paul Weiss signs the largest office lease of 2023 with 765k sf in Midtown New York. First American Title Company suffers cyberattack delaying closings. Cargo at seaports drops in 2023. D.C. surpasses San Francisco for office distress. And WeWork wins request to keep its tenant list private. In broader news, the stock market bounces back, unemployment remains low, oil prices fall slightly after Angola says it will leave OPEC, and China bans export of rare earth technologies.

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Capital Markets

Market News

• Stocks Surge on Thursday After Drop in Wednesday

  Stocks climbed on Thursday rebounding after Wednesday’s worst sell-off in months. The three major indices rose by 0.9% - 1.2%. Data released on Thursday included a final reading of GDP for the third quarter, which showed the US economy grew 4.9% on annualized basis in the period, below the consensus estimate for 5.2% growth. The latest data on initial jobless claims showed 205,000 people filed for unemployment insurance in the week ending Dec. 16. Economists had estimated 215,000 claims were filed

• Oil Prices Drop as Angola Exits OPEC

  Oil prices fell slightly on Thursday after Angola said it would exit the Organization of the Petroleum Exporting Countries (OPEC), raising doubts about OPEC's efforts to drive prices higher by limiting global supplies. The Saudi-led producer group has been rallying support to increase production cuts and boost oil prices, while the U.S. has been increasing output.

• China Bans Export of Rare Earths Processing Tech

  China, the top processor of rare earths, banned the export of technology to make rare earth magnets on Thursday. This adds to a ban already in place on technology to extract and separate the materials. Rare earths are a group of 17 metals used to make magnets used in electric motors in electric vehicles, wind turbines and electronics

• U.S. Unemployment Claims Rise, Remain Historically Low

  The Labor Department reported Thursday that jobless claims were up by 2,000 to 205,000 the week that ended Dec. 16. 1.87mm Americans were collecting jobless benefits the week that ended Dec. 9, little changed from the week prior. The unemployment rate has come in below 4% for 22 straight months, the longest such streak since the 1960s. Hiring has slowed but remains healthy

CRE Headlines

• First American Title Company Suffers Cybersecurity Attack

  The incident occurred Wednesday afternoon, with First American confirming the incident Thursday morning. The title company’s website notes it has “taken certain systems offline” and is working to resume normal business operations. Many reported closings have had to be delayed as a result of the cybersecurity incident

• U.S. Seaports See A 14% Drop in Cargo Volume YTD

  11 of the top U.S. ports have handled 39mm 20-foot equivalent units (TEUs) through the first 10 months of 2023 and are on track to handle more than 46mm TEUs by the end of the year, 14% less year-over-year than 2022’s total of 54mm TEUs. The drop in volume was attributed to economic uncertainty, inflation, drought forcing ships to avoid the Panama Canal, climbing industrial vacancy rates, and decreased demand. Consumer spending due to the pandemic drove a surge in cargo during 2022, while the volume in 2023 reflects a return to pre-pandemic levels. Record construction deliveries pushed vacancies higher in each of the 11 markets to 4.26% by Q3, lower than national average of 5.02%

  Annual Cargo Volume By Port

  

• D.C. Surpasses San Francisco As Leader in Office Distress

  According to Trepp, 72% of office loans in the D.C. area are at risk of default. D.C.’s office buildings with high vacancy, near term lease expirations or other risk factors is now the highest of any major city in the country, overtaking San Francisco, which had a 71%

• WeWork Keeps Coworking Tenant List Private

  A bankruptcy judge has signed off on the WeWork’s request to keep its tenant list private. WeWork had been fighting a request from the Justice Department to reveal its tenant list. WeWork argued that revealing the list would compromise its tenants and allow competitors to poach its clients

Deals Deals Deals

Sales

• Retail: SITE Centers sells a 209k sf grocery-anchored center in Los Angeles, CA for $53mm

• Multifamily: The John Buck Company sells 3Eleven, a 245-unit high-rise apartment asset in Chicago, IL to Vista Property for $76mm. The deal was financed with a $48mm Freddie Mac loan

• Multifamily: J.P. Morgan Real Estate Income Trust, Inc. acquired the initial tranche of 36 townhomes from a BTR development in Venice, FL. The development will have 126 townhomes upon completion and an approximate price of $45mm. Final completion is expected in August 2024

• Multifamily: SPI Advisory acquires a 266-unit multifamily community in Dallas, TX from Realty Capital Residential and PointOne Holdings

• Hospitality: Slate Property Group acquires the former Hampton Inn hotel in New York, NY’s FiDi for $24mm from HHM Hotels

• Industrial: Frito-Lay sells its former warehouse in Miami, FL to The Easton Group for $17mm. Frito-Lay had recently signed a lease at Bridge Point Doral

• Office: Skanska USA Commercial Development divests from 9000 Wilshire, a 50k sf office in Beverly Hills, CA, for about $71mm

Debt

• Hospitality: Lauderdale Beach Association secures a five-year. floating-rate $185mm loan from MetLife Investment Management to refinance a 650-key Marriott-branded hotel in Fort Lauderdale, FL

• Multifamily: Lujeni Corp., Camino Capital Management and Building Block Realty secure a $115mm loan from MF1 Capital to refinance a 279-unit apartment tower in Miami, FL

• Multifamily: Trident Development secures a $45mm construction loan from Alerus, and a $15mm mezz piece from Centerspace for the development of a 244-unit luxury multifamily asset and parking garage in St. Cloud, MN

• Multifamily: Saxum Real Estate secures a three-year, floating-rate, $56mm construction loan from a U.S. life insurance company. The loan will fund a 187-unit multifamily development in Philadelphia, PA

Developments

• Multifamily: Related and Sterling Equities break ground on the first phase of a 2,500-unit affordable housing project in Queens, NY. Wells Fargo arranged financing for Phase I which consists of a $237mm construction loan and $124mm Low-Income Housing Tax Credit investment. Phase I will feature two buildings totaling 880 units

• Multifamily: Wayfinder Real Estate and Read King Commercial Real Estate break ground on a 348-unit luxury multifamily community outside Houston, TX. Completion is expected in early 2025

• Industrial: A JV between Fidelis Industrial and Transwestern Investment Group acquired 56 acres north of Austin, TX for the development of Berry Creek Business Park, a 521k sf industrial campus

• Office: Arcadia Cold Storage & Logistics delivers its Reno Cold Storage and Logistics Facility, a 250k sf property east of Reno, NV

Leasing

• Industrial: BroadRange Logistics signs a 351k sf lease at MDH Partners’ Ocala Logistics Center in Ocala, FL

• Office: Paul, Weiss, Rifkind, Wharton & Garrison, a law firm, sign a 20-year, 765k sf office lease at Fisher Brother’s 1345 Avenue of Americas in Midtown New York, NY

• Office: MetLife signs an 11-year 400k sf lease extension at Tishman Speyer’s 200 Park Avenue in New York, NY

Meme Summary

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