Goooooood Morning!!!

Big developments get approvals and the Fed holds rates steady. The Tampa Bay Rays get green light to develop a new $1.3bn stadium and mixed-use project in St. Petersburg. Boston approves a master plan for Dorchester Bay City, a massive $5bn project which will span the next decade or so. CMBS delinquencies are up across CRE. Return to office is making slow progress and insurance rates in FL continue to rise. All headlines were on the Fed’s interest rate decision with no increases yesterday but expectations of one more rate hike before year end. The auto strike continues, with layoffs at a GM plant. On a brighter note, the writer’s strike might be closer to an end. Fannie Mae expects home sales to be at their lowest since 2011 this year.

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Capital Markets

Market News

• Fed held interest rates on Thursday but still expects one more rate hike by year end. The Fed also revised its GDP growth expectations, up to 2.1% for the year. 2024 GDP growth outlook was revised up to 1.5% from 1.1% (CNBC)

  Fed Funds Target Rate Since 2006

  

• Hollywood studios and Writers Guild of America are close to finalizing deal on Thursday. The strike began in May over wages and compensation disputes related to post-production revisions, which previously went unpaid (CNBC)

• GM and Stellantis layoff over 2,000 workers as a result of walkouts. GM confirmed the layoffs to be at its Fairfax, KS plant (AXIOS)

• Unemployment Rate Since August 2022

  

• Fannie Mae expects US home sales to be the lowest since 2011, with with just 4.8mm sales this year and 4.9mm in 2024. The lender also expects a recession in early 2024 (Yahoo)

CRE Headlines

• Return to office sees post-Labor Day jump. 10 major cities had an average over 50%. Houston led the pack with 61.6% occupancy and New York jumped from 43.8% to 47.9% (MSN)

• Rate of delinquent or special serviced commercial mortgage-backed securities rose to 6.8% in August nationally. Chicago lead the list of major cities with 22.7% (TheRealDeal)

• In effort to plug the financing gap, developers are turning to financing structures involving both debt and equity. New Buzzword Alert: “Dequity”. Expect to hear this term be thrown around to describe a financing structure that involves both debt and equity (Bisnow)

• Chinese office vacancy spiked to 24% across 18 major cities, compared to U.S. vacancy of 20%. Despite China having a higher physical occupancy of 70% thanks to a stronger return-to-office mandate, vacancy remains higher. An oversupply due to prolonged construction is to blame (Bisnow)

• State of Florida-backed insurer could raise insurance premiums by 11.5% for homeowners and 10.2% for commercial policies. If the proposed increase are approved by the Florida Office of Insurance Regulation the increases would take effect before year end (TheRealDeal)

Deals Deals Deals

Sales

• Multifamily: Nuveen acquires 336-unit apartment community in Chicago Suburb for $103mm (TheRealDeal)

• Multifamily: Stockbridge Capital Group buys 368-unit multifamily asset in Doral, FL for $156mm from Trammell Crow and Carlyle (CommercialObserver)

• Office: Princeton International Properties buys 255k sf, 355 Alhambra Circle in Coral Gables, FL from PGIM Real Estate for $90mm. PGIM paid $83.1mm in 215 (TheRealDeal)

• Retail: Orion Real Estate Group acquires a 215k sf retail and office mixed use property for $58mm in Miami, FL. The asset’s major tenants included T.J. Maxx, HomeGoods, Guitar Center, and JoAnn Fabric (ShoppingCenterBusiness)

• Office: Gene Staples acquires 302k sf office asset in Chicago suburb for $30mm (Crain’s)

Debt

• Multifamily: Carmel Properties secures $153mm construction loan for its development project in NYC’s Upper East Side (Crain’s)

• Office: MF1 Capital provided a $69mm debt package to refinance a 113-unit multifamily asset owned by Certes Partners and The Hakimian Organization in NYC’s East Harlem neighborhood (CommercialObserver)

• Industrial: EverWest Real Estate Investors secures $62mm loan for a 428k sf 4-property industrial portfolio acquisition that spans 4 cities. JPMorgan financed the loan drawing from multiple institutional investors (CommercialObserver)

• Multifamily: PGIM Real Estate provides a $25mm refinancing package for a manufactured housing community outside Los Angeles, CA (CommercialObserver)

Developments

• Mixed-Use: The Boston Planning & Devlopment Agency has approved a $5bn master plan for Dorchester Bay City. Accordia Partners led the development team. The project is slated to take 10-15 years to complete and cover 36.2 acres (REBusinessOnline)

• Mixed-Use: The Tampa Bay Rays, a MLB team, have reached an agreement with the City of St. Petersburg to develop a $1.3bn ballpark and mixed use project. The project will proceed on the current 86-acre site (REBusinessOnline)

• Industrial: Terreno plans a $41mm Industrial conversion in Orange County, CA. The company bought a 4.9-acre site with three office buildings which it plans to demolish to make room for a 92k sf distribution center (CommercialObserver)

Distress

• Office: Shorenstien Properties defaults on $350mm CMBC loan tied to NYC office property. The loan was provided by Barclays in 2019. The asset was purchased for $330mm in 2015, with an additional $62mm spent on capital improvements (Bisnow)

• Office: RXR hires JLL to list $240mm non-performing loan for 61 Broadway in NYC. The 787k sf office building was built in 1913. RXR has agreed to return keys to lender if necessary (TheRealDeal)

• Office: Somerset Partners and Meadow Partners hand keys back to lender, Fortress Investment Group, at 300 East 42nd in New York, NY. The 237k sf office asset was bought in 2019 for $122.5mm and refinanced in 2021 with a $110mm senior loan and $27mm mezz piece (TheRealDeal)

Capital Raising

• Tech: qbiq, an Israel-based visual platform for space planning, raised $10mm in seed fund led by JLL Spark Global Ventures (FINSMES)

Leasing

• Office: Penske Media (Rolling Stone and Variety Publisher) signs 12-year, 125k sf office lease at Lumen Campus in Los Angeles, CA (CommercialObserver)

• Industrial: Ascend Elements, an EV Battery Supplier, is relocating its HQ outside Boston, MA. The battery supplier signed a 101k sf lease with King Street (Bisnow)

• Office: RCM&D, an insurance advisory firm, is relocating its HQ to Hunt Valley, MD. The company signed a 25k sf lease at 4 North Park (TheDailyRecord)

Meme Summary