Happy Tuesday to all!

MGM Resorts suffers cybersecurity attack forcing it to shutdown reservation, booking, and key card systems along with its casino floors. New valuation for AON center highlights devastating loss in value office owners are faced with. JPMorgan becomes NYC’s top CRE lender amid a pullback in CRE financing from banks. New report shows CMBS delinquency creeping up. Companies plan a return to office by 2024 (thought we were all back to 5 days a week…). This week markets will look to the ECB’s decision on rates on Thursday for guidance. Jamie Dimon notes that the economy can’t always go up. Americans worry about obtaining financing options and about being laid-off in within the next year.

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Capital Markets

Market News

• Central banks across the world expected to implement “higher-for-longer” interest rate policies. Economists put the odds at a 45% chance the European Central Bank has 10th consecutive increase on Thursday (Yahoo)

• JPMorgan Chase CEO says “huge mistake” to believe to believe economy will continue trending upwards for years. Dimon notes healthy consumer balance sheets and rising wages are supporting economy but quantitative tightening by the Fed, Ukraine-Russia war, and government spending are cause for caution (CNBC)

• Mexico replaces China as top trading partner. Investments from various large companies have pushed Mexico into the biggest supplier of goods to the U.S. (Bloomberg)

• Severe weather in 2023 has cost $57bn in damages year-to-date. Disasters raise concerns over how much money the Federal Emergency Management Agency has left to deal with hurricane season. Biden has asked congress for $16bn to replenish the fund (CNBC)

• U.S. deficit expected to keep bond yields high in order to attract T-bill buyers to help fund government overspending (Yahoo)

• 30-year mortgage rates dropped to 7.63% after spiking to 7.84% last Thursday (Investopedia)

• Americans are worried about access to credit according to new NY Fed survey released Monday. 60% of respondents noted its harder to get loans, credit cards, and mortgages than it was a year ago. The survey also showed mean expectation of losing one’s job in the next year at 13.8%, the highest since April 2021 (CNBC)

CRE Headlines

• MGM Resorts suffers cybersecurity issue which FBI is investigating. The casino and resort operator shutdown its systems which impacted everything from reservation systems to key cards and casino floors. Casino floors were back on Monday night but reservation systems were still down (CNBC)

• 90% of companies plan to implement a return to office by 2024. Industries that are most invested into their real estate (tech, financial services, and retail) are the most adamant about a full return to office (CNBC)

• JPMorgan becomes NYC’s top property lender. Volume of loan issuance has dropped dramatically as values have dropped and owners have resorted to loan extensions. Lenders cautious on foreclosures due to limited resources to manage real estate (TheRealDeal)

• Aon Center (2.8mm square foot office tower in Chicago, IL) valuation drops by nearly 50%. Valuation dropped to $414mm, down from $780mm in 2018. Despite the building being 76% occupied and having $100mm for new deals the rise in interest rates greatly impacted its value (Bisnow)

• Austin lead the nation in workforce migration between February 2020 and February 2023. Tech relocations were the main driving force behind the movement (RNR)

• Dispute over Measure ULA, commonly known as the “Mansion Tax”, now in the hands of the Los Angeles Superior Court as federal judge dismisses the case (WestsideToday)

• CMBS Delinquency rate reached 5.07% in August 2023 with 62% of new delinquent loans being a result of maturity defaults or refi challenges (CommercialObserver)

Deals Deals Deals

Sales

• Multifamily: Gelt Venture Partners acquires 125-unit apartment building in Orange County, CA for $63mm (ConnectCRE)

• Industrial: Rexford Industrial Realty (NYSE: REXR) acquires 3 industrial properties in southern California for $46mm (REXR)

• Multifamily: GID buys 282-unit multifamily community in Fairfax, VA (PRNewswire)

• Multifamily: Weidner buys 253-unit multifamily asset from AEW Capital Management in Minneapolis, MN (REJournals)

• Retail: Haverford Properties Inc buys 215k sf grocery-anchored retail center from Principal Asset Management in Delran, NJ (JLL)

• Retail: CenterSquare buys 106k sf shopping center in Wilmington, NC (REBusinessOnline)

Debt

• Multifamily: Related Group secures $159mm loan from CIBC to develop a 119-unit condo building in Pompano Beach, FL (CommercialObserver)

• Retail: Apollo Global Management provided $90mm financing package for grocery-anchored asset in Brooklyn, NY owned by Aurora Capital Associates, Midtown Equities, and Achs Management (CommercialObserver)

Developments

• Multifamily: Lore Development buys $35mm site in Brickell (Miami, FL) to develop a 500-unit, 442k sf, tower for an estimated $500mm (CommercialObserver)

• Multifamily: McHugh Construction and Stiles Construction top-off 588-unit luxury apartment building in Miami, FL. First move-ins scheduled for next summer (REBusinessOnline)

Leasing

• Industrial: DSV Air & Sea, a logistics firm, signs 115k sf lease in North Houston with Liberty Property Trust (REBusinessOnline)

Meme Summary