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Loan modifications spiked in 2024, hotel performance ended strong, multifamily sales volume was also up in 2024, senior housing demand is projected to outpace supply, and data center demand is in question following the release of DeepSeek’s AI

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Capital Markets

Headlines

• Securitized Loan Modifications Double in 2024

  According to CRED iQ research, loan modifications across CRE securitized loans spiked to $19bn in 2024, beating out the previous record of $18bn set in 2020

• Multifamily Deal Volume Increases by 22% in 2024

  Multifamily transactions rose to $146bn in 2024, despite a drop in average prices. On average cap rates rose by 10bps in 2024, vs. 70bps in 2023

• U.S. Hotel Performance in December Outperforms Prior Year

  According to CoStar, occupancy in December (53.2%) was up 1.1% in 2024 over 2023, ADR ($156.67) was up 3.3%, and RevPAR ($83.30) was up 4.4%. New York reported the highest occupancy at 87.9%

• Senior Housing Demand Outpaces Supply

  A study by NIC indicates the amount of senior housing units needed to keep up with the demographic entering the 80+ range over the coming years will need to accelerate. A $400bn investment is projected to be needed by 2030

• DeepSeek Raises Data Center Demand Questions

  U.S. power, utility, and natural gas companies stocks sold off on Monday as new AI technology from Chinese start-up DeepSeek cast doubt on a projected surge in U.S. electricity demand and tech spending related to future AI uses. If true, this could impact data center development which is projected to double or triple its share of power consumption by 2028

Deals Deals Deals

Sales

• Infrastructure: Blackstone Energy Transition Partners to acquire Potomac Energy Center, a 774-megawatt natural gas power plant in Loudoun County, VA

• Hospitality: Ashford Hospitality Trust sells the Courtyard Boston Downtown, a 315-key hotel in Boston, MA for $123mm

• Multifamily: The Bascom Group and Oaktree Capital Management acquire The Strand, a a 408-unit multifamily property in West Sacramento, CA, for $126mm. The acquisition loan was financed by Walton Street Capital

• Multifamily: IMT Capital acquired Desert Ridge, a 370-unit multifamily property in Phoenix, AZ, from CWS Capital Partners 

• Multifamily: 3650 Capital and Reap Capital acquired The Calvin, a 167-unit apartment community in Plano, TX

• Multifamily: Great States Development acquires a 116-unit multifamily asset in Minneapolis, MN from Greco

• Multifamily: The Martin Group acquired 1889 Harrison St, a 224-unit community in Oakland, CA, for $61mm from Quarterra Multifamily

• Multifamily: Blue Heron Asset Management sold The Linden Apartments, a multifamily community in Davidson, NC, to Continental Realty for $50mm

Debt

• Multifamily: Blackstone secures a $90mm 5-year financing from U.S. Bancorp to acquire a 217-unit multifamily asset in Downtown Boston, MA. PGIM Real Estate sold the asset for $123mm

• Multifamily: Related Companies secures a $100mm loan from TYKO Capital to refi a 178-unit multifamily tower in New York, NY

Developments

• Office: Citadel hires Related Companies to develop their new Miami, FL HQ

• Office: HITT Contracting broke ground on a new 270K SF HQ building in Falls Church, VA. Completion is expected in early 2027

• Industrial: Trammell Crow Co. and Diamond Realty Investments completed Mid I-5, 1.2mm SF spec development in Kelso, WA

• Multifamily: Flournoy Development Group finishes construction on Ellison Mallard Creek, a 341-unit, mixed-use community in Charlotte, NC

• Retail: A JV between Jofa Capital and BLT Enterprises acquires a 185K SF department store in San Diego, CA. The 9 acre site will be redeveloped

Capital Raising

• Diversified: The Boston Retirement System commits $20mm to two real estate funds. $10mm was committed to a Kayne Anderson fund and another $10mm to a separate fund

• Multifamily: Waterton announced a $16mm preferred equity investment for DAC Developments’ the Residences at Eastbank, a five-story, 258-unit, mid-rise apartment building in Aurora, IL

Meme Summary

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