Happy Monday!

Hope your team made it to the playoffs, if not then join me in hoping for a good draft this year… Morgan Stanley files with the SEC its first Nontraded REIT, North Haven Net REIT, commercial real estate owners fight back against the Chicago Transfer Tax which would triple the sales tax on CRE, and Philly office (much like the Eagles) ends Q4 with some struggles. All eyes on CPI and PPI this week, the December jobs report came in hotter than expected, U.S. lawmakers land on a $1.6T spending deal, and the M2 money supply is shrinking triggering new recession fears

Stay tuned for the Debt Survey results. Thank you to all who contributed (It wasn’t many so be thankful)

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Capital Markets

Market News

• December CPI and PPI Report This Week

  The consumer price index (CPI) and producer price index (PPI) for December come out on Thursday and Friday this week. The CPI, a measure of inflation for consumer goods, is expected to rise 0.2% on a monthly basis and 3.2% on an annual basis. Core CPI, excluding food and energy, is expected to be 3.8%. PPI, a measure of inflation for domestic vendors, is expected to come in 0.2% over November and 1.3% on an annual basis

• December Jobs Report Comes In Hotter Than Expected

  The U.S. labor market added 216,000 jobs in December, above the 170,000 expected by economists surveyed by Dow Jones. The unemployment rate remained at 3.7%, defying estimates of a 10-basis-point rise. Meanwhile, average hourly earnings rose 4.1% from a year earlier, higher than the 3.9% forecast

• U.S. Lawmakers Agree On $1.6 Trillion Spending Deal

  The U.S. Congress on Sunday agreed on a $1.59T spending deal, which will have lawmakers launch negotiations over how much various agencies, get to spend in the fiscal year that runs through end of September. Lawmakers have until January 19 deadline for the first set of bills to move through Congress followed by a February 2nd deadline for the remainder of the bills

• Falling M2 Money Supply Cause For Concern

  Rising inflation and a reduction in the M2 money supply have economists concerned of a potential recession. The M2 money supply, (think back to econ 101) is made up of cash, checking and savings accounts, and other deposits readily convertible to cash, such as CDs. The M2 money supply dropped from $21.7T in July 2022 to $20.8T in November 2023. It's the first notable drop in M2 money supply since the Great Depression

CRE Headlines

• Morgan Stanley Launching A Nontraded REIT

  Morgan Stanley filed the SEC, the firm’s first non-traded REIT, North Haven Net REIT. The REIT’s proposed investment strategy will be focused on net-leased real estate in the industrial, life sciences, healthcare, and essential retail sectors. The REIT will be externally managed by MSREF Real Estate Advisor Inc., a subsidiary of Morgan Stanley that operates through Morgan Stanley Real Estate Investing

• Chicago Transfer Tax

  Chicago real estate owners, led by BOMA, are seeking to remove a ballot question for the Mayor’s real estate transfer tax proposal. Owners are claiming legislative log-rolling, lumping various policies into one, as trick to get voters to approve the legislation. The real estate ownership group claims the ballot aims to make it seem as if real estate transfer tax rates will be decreased, when in reality they will disproportionately impact property owners. Proponents for the policy claim revenue raised will be for homeless but have yet to outline exact uses for the taxes

  Proposed Changes To Chicago Real Estate Transfer Tax

  

  Source: City of Chicago 

• Philly Office Still Struggling

  Vacancy remained at around 22% in the Philadelphia office market, while absorption finally went positive in Q4. Office-using companies continued to downsize. The North Penn, Wilmington CBD, and Plymouth Meeting submarkets all ended with a vacancy rate over 30%. Office leasing activity also saw non-traditional tenants help the space with manufacturing accounting for 26% of activity

  Philadelphia Office Supply & Demand

  

• Nightingale CEO Misses First Settlement Payment For CrowdStreet Investors

  The CEO of Nightingale Properties has been unable to complete the sale of a property under contract for $82M which was set to fund installments of the settlement reached with CrowdStreet investors. The CEO has until January 18, thanks to 10-day grace period, to make the first $3M (excluding a 1% late fee) payment before being declared in default

Deals Deals Deals

Sales

• Multifamily: MLG Capital acquired Meadows at River Run, a 374-unit apartment complex in suburban Chicago, IL from Independence Realty Trust for $73M. MLG Capital financed the deal with a $47M Freddie Mac loan

• Industrial: Rexford Industrial announces $70M in acquisition activity. In December it acquired 600-708 E. Vermont Avenue for $57M ($108 psf) with a projected 6.7% yield-on-cost and 11234 Rush Street for $13M ($61 psf) with a projected 6.4% yield-on-cost. Both assets were located in the Los Angeles, CA market

• Industrial: Clarion Partners acquired Tampa Airport Logistics Center, a two-building, 297K sf industrial park in Tampa, FL, for $56M from PCCP LLC

• Medical Office: Horizon Equities acquires Jackson Health Village, a 150K sf medical office building in Jackson, NJ, for $24M

• Multifamily: TruAmerica Multifamily acquires Highlands at Hudson, a 158-unit apartment community, outside of Boston, MA built in 2005

• Industrial: Creation and Crow Holdings Capital sold Northmark Commerce Center, a 234K sf distribution facility located in suburban Fort Worth, TX. The asset was built in 2023 and fully leased to Ryder Integrated Logistics

Debt

• Data Centers: EdgeCore Digital Infrastructure, obtains $1.9B in green financing to further build at its development in Mesa, AZ. MUFG, TD Securities, ING Capital LLC, Scotia Bank and Santander, led the transaction

• Multifamily: Montium secures a $520M financing package for a portfolio of 19 workforce housing properties across DE, NJ, and PA. KeyBank provided a $447.5M Fannie Mae credit facility and Basis Investment Group funded $72.5M in preferred equity

• Multifamily: London Bay Homes secures a $215M from Bank OZK construction loan to build The Ritz-Carlton Residences in Bonita Springs, FL

• Hospitality: Synergy Hospitality Management secures a $65M loan to refinance the conversion of the LaGuardia Plaza Hotel into a DoubleTree by Hilton in Queens, NY. Sabal Investment Holdings, Bsafal, and Argo Real Estate provided funding for the loan

• Hospitality: Driftwood Capital secures a three-year, floating-rate, interest-only, $60M loan to refinance the Hilton Cocoa Beach Oceanfront Hotel, a 295-key resort outside Orlando, FL

• Multifamily: WindMass Capital secures a floating-rate loan through Benefit Street Partners for a 224-unit garden-style apartment community in Dallas, TX

• Multifamily: CW Realty lands a $56M loan from HIG Capital to refinance a 98-unit multifamily asset in Brooklyn, NY

• Multifamily: Diversyfund secures a $9M senior loan and a $1.6M mezzanine loan through SteepRock Capital to refinance a 49-unit multifamily community in Stuart, FL

• Hospitality: Liberty Investment Properties secures a $10M loan through KeyBank for 122-key hotel in Charlotte, NC

• Multifamily: Abranova Real Estate secures an $8M, 18-month, non-recourse, construction loan from Urban Standard Capital for a 37-unit mixed-use development in Durham, NC

Developments

• Industrial: Farpoint Development and Grandview Partners plan to develop Lafayette Logistics Park, a 134-acre industrial project in LaGrange, GA

Meme Summary

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