Goooooood Morning Everybody!!!

MGM Resorts confirms breach by hacking group named “Scattered Spider”. Caesar’s Entertainment revealed they were also the subject of a cybersecurity attack by the same group recently. Multifamily rents continue to rise but so are rent concessions in a sign of recent deliveries impacting the market. Home prices continue to grow, at a slower pace albeit. Outdoor shopping centers tend to attract a more affluent customer research report shows. Two small REITs announce they are exploring strategic alternatives. The Consumer Price Index rose slightly above expectations, driving many to speculate the Fed may be done with rate hikes.

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Capital Markets

Market News

• Consumer prices rose 0.6% month-over-month and 3.7% year-over-year in August. The YoY increase was above the 3.6% expected. The increase was mostly driven by a rise in energy prices (Yahoo)

• United Auto Workers (UAW) are likely to strike after failing to come to an agreement Wednesday night with Ford, GM and Stellantis. UAW is demanding a 40% increase in pay and other concessions, thus far the three automakers have countered with 20% (Ford), 18% (GM) and 17.5% (Stellantis) proposed wage increases (Reuters)

• Senate subpoenas Saudi Public Investment Fund’s U.S. subsidiary for more information on the LIV Golf / PGA Tour merger. Senator Richard Blumenthal said Saudi Arabia’s bid was “part of a web of growing investments in this country”. He accused the nation of exploiting loopholes in investment platforms as a way to exert influence in the U.S. (CNBC)

• Tech CEOs met behind closed doors with U.S. senators on Wednesday to discuss guardrails for A.I. Lawmakers said they were interested in learning more before crafting legislation (CNBC)

• Citigroup CEO plans reorganization which will involve unknown amount of layoffs. The company has already cut thousands of employees since the start of the year (BusinessInsider)

• Some bond fund managers believe the Fed’s rate hikes have peaked and are unlikely to see further increases (Yahoo)

CRE Headlines

• MGM Resorts breached by hacking group named “Scattered Spider”. Caesar’s Entertainment revealed they were also the subject of a cybersecurity attack by the same group recently. The hacking group was successful in extorting the gaming company for an unconfirmed sum (speculated to be $30mm) (Reuters, Casino)

• Median asking rents for multifamily are rising but effective rents are decreasing as landlords offer increasing concessions to attract tenants. Rent growth has cooled as more multifamily projects have been delivered causing the national vacancy to increase from 5.6% in Q2 2022 to 6.3% in Q2 2023 (Redfin)

• Home prices grew by 2.5% nationally from July 2022 to July 2023 (GlobeSt)

• Boston Properties CEO says rents must be at least $200psf / year to justify new office construction. According to Colliers research, only 15 leases rose above the $200psf mark in Manhattan in 2022 (TheRealDeal)

• Report shows YoY monthly visits fell by 4.5% and 8.0% for indoor and outlet malls in August. Open-air lifestyle centers only had a 0.6% decrease in monthly visits. Open-Air centers also outperformed their counterparts by attracting shoppers with higher median household incomes (placer.ai)

• Presidio Property Trust (NASDAQ: SQFT) announces its exploring strategic alternatives including a merger, sale of assets, JV, and/or restructuring. The REIT primarily owns office, industrial, and SFR assets across AZ, TX, WI, IL, and FL (presidiopt)

• Artis REIT retains BMO Capital Markets for a strategic review process. Artis REIT is a Canadian diversified REIT with office, retail, and industrial assets across Canada and the U.S. (artisreit)

Deals Deals Deals

Sales

• Hotels: Magna Hospitality Group buys 1,046-key Hilton in Times Square from McSam Hotel Group for $160mm (Crain’s)

• Industrial: Starwood and Onyx Acquisition IV, LLC buy 10-building, 501k sf, Long Island industrial portfolio in NY for $146mm. The portfolio had been owned by the Elias Family (LIBN)

• Industrial: GLP acquires 203k sf, 43-year old warehouse in Monroe, NJ from Clarion Partners for $54mm (re-nj)

• Office: Synergy Investments acquires a 157k sf office asset in Boston, MA from Clarion Partners for $45mm. Clarion previously purchased the asset for ~$55mm (BostonGlobe)

• Multifamily: Ashcroft acquires 360-unit multifamily asset in Coconut Creek, FL for $70mm (CommercialObserver)

• Industrial: Triten Real Estate completes and sells a 490k sf logistics center in San Antonio, TX to Capstar Real Estate Advisors. Prime Finance provided a $34mm loan (commercialsearch)

• Office: RealCo acquires 101k sf office building from HTZ Investments in Atlanta, GA. The asset was just over 50% leased (commercialsearch)

Debt

• Industrial: Alere Property Group secures $455mm debt package from PGIM Real Estate for an 8-building industrial portfolio across Southern California (CommercialObserver)

• Hotel: Pebblebrook Hotel Trust refinances 369-key Margaritaville Resort in Hollywood, FL. The The $140mm new loan has a 3-year term, two 1-year extension options, and a fixed-rate of 7.0% after executed swaps (PEB)

• Hotel: CIM Group finances $30mm for Newbond Holdings’ acquisition and renovation of a 130-key hotel in Tampa, FL (CommercialObserver)

• Medical Office: Faros Properties refinances medical facility in Stamford, CT with 5-year, fixed, rate, $14.5mm loan. The note was financed by Silicon Valley Bank, now a division of First Citizens Bank (commercialsearch)

Developments

• Industrial: Trina Solar, a Chinese solar products manufacturer, to build a $200mm manufacturing facility outside of Dallas, TX. The building will be 1mm sf and is scheduled for completion in 2024 (REBusinessOnline)

• Industrial: Poettker Construction delivers Phase II of Gateway85 outside of Charlotte, NC. Phase II consisted of a 241k sf, 36-foot clear rear-load warehouse and a 705k sf, 40-foot clear cross-docked warehouse (REBusinessOnline)

• Industrial: The Rockefeller Group acquires former Walmart Supercenter site south of Las Vegas, NV to build two industrial buildings. The first will be a 228k sf, 36-foot clear building and the second a 142k sf, 32-foot clear building (commercialsearch)

• Multifamily: Sterling Bay submits zoning application for 390-unit multifamily asset in Chicago, IL (Urbanize)

Distress

• Office: D.C. foreclosed office building under contract to sell for approx. $70mm to partnership between Madison Marquette and Highland Square Holdings. Hines gave back the keys to the lender, Allianz Real Estate, in September 2022. The original loan was made in 2016 for $135mm (Bisnow)

• Office: Pacific Life Insurance set to foreclose on $70mm loan backed by 588k sf Houston, TX office asset owned by Treeview Real Estate Advisors affiliated LLC (Bisnow)

Capital Raising

• Tech: SITE Technologies, raises $10mm in Series A funding led by Prologis Ventures and including Protagonist and DivcoWest Ventures. The company uses A.I., drones, satellites, and aircraft to gather property data and enhance property condition analyses (PRNewswire)

Leasing

• Industrial: Aero Logistics signs lease 5-year, 81k sf lease at a distribution center in Charleston, SC owned by Dalfen Industrial (REBusinessOnline)

• Industrial: AmeriPac signs 163k sf lease extension in Irving, TX (REBusinessOnline)

• Retail: Spirit Halloween leases 10k sf in former Bed Bath & Beyond space in Chelsea for flagship NYC location (CommercialObserver)  

• Office: Genius Sports signs 12k sf lease at 825 Third Avenue in NYC (CommercialObserver) 

Meme Summary