Happy Tues… Wednesday!

Nontraded struggle to raise money in 2023, BREIT sees its redemption requests go down in December, retailers plan new store openings in 2024. and two major grocers/retailers lead the charge in return-to-office with policies going into effect this month. Stocks opened lower to start the year after ending 2023 with a major rally, the national debt hits a record high again, investors eye corporate bonds worried they might miss out on high rates, and Zillow sues a number of listing services

DEBT SURVEY: PropMemo & Real Assetzz are conducting a Debt Survey on recently financed transactions or term sheets. Results will be published this Friday with all data published being anonymous

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Capital Markets

Market News

• Stocks Drop To Start 2024

  After the S&P 500 nearly hit a new record high in December, the market pulls back to start the year. Tech stocks pulled back after Barclay’s downgraded its outlook for Apple stock and crude oil futures were also impacted as concerns over the impact of attacks on cargo ships in the Red Sea on shipping routes rose

• National Debt Hits Record $34tn

  The U.S. federal government’s gross national debt has surpassed $34 trillion. Last June, Washington lawmakers decided to temporarily lift the nation’s debt limit, to prevent default with an agreement that lasts until January 2025. The risk of a higher debt load could put upward pressure on inflation and cause interest rates to remain elevated, and in turn increase the cost of repaying the national debt

• Mortgage Lender RealFi Lays off Employees Without Paying Salaries

  According to inside sources. the residential mortgage lender laid off employees on December 15 due to lack of work and diminishing warehouse line of credit. The employees were told they would receive their final check on Dec. 29, and then on Dec. 28 were told there were no funds left to pay

• Corporate Bond Demand Ramps Up As Investors Brace for Lower Rates

  Corporate bond issuance opened 2024 with roughly $26.5bn in volume. Experts point at January historically being a strong month for corporate borrowing, but this year is likely seeing elevated investor demand as fear over missing out on high borrowing rates, after the Fed signaled a possible peak in December, has many more active than normal

• Zillow Files Antitrust Lawsuit Against Listing Services

  Zillow sues Arizona Regional Multiple Listing Service, the Milwaukee-based Metro Multiple Listing Service and MLS Aligned, a collective owned by six listing services. The suit stems over the blocking of Zillow’s home tour scheduling service, ShowingTime, on the named listing services. The listing services previously allowed realtors to use either Zillow’s ShowingTime or their own showing platform. Zillow’s antitrust suit claims the listing services are attempting monopolize the market for real estate showing management services

CRE Headlines

• BREIT Receives $1.1bn in Redemption Requests in December

  In December 2023, BREIT received $1.1bn in redemption requests, down 41% from November and 80% lower than the January peak. This marked the largest monthly decline since proration began, as well as the lowest month of repurchase requests and the first month repurchase requests fell below the 2% of NAV monthly limit since September 2022

• Nontraded REITs See Sharp Drop in Capital Raising in 2023

  Nontraded REITs raised just $9.8bn in 2023 through November compared with $33.2bn in 2022. From 2019 to 2022, nontraded REITs were fundraising juggernauts on Wall Street thanks to rapidly rising values of commercial real estate and strong investor demand

• Brick and Mortar Retail Expansion Plans

  A report by Northmarq outlines expansion plans by some of the top retailers in the U.S. Within the apparel sector Burlington and Ross Dress for Less lead the charge with both expected to open 500+ and 700+ new locations in the coming years. Discount retailers also have aggressive expansion plans with Dollar General planning to open 85 locations in 2024 and Five Below planning for 550-600 new stores this year

• Major Retailers Lead the RTO Movement in 2024

  Major return to office mandates with January 2024 effective dates include Kroger and Costco. The State of Nebraska, with 168,400 employees is also set to have it employees return. Tech companies and government agencies saw a recent shift in their WFH policies as RTO mandates went into effect in Q3/Q4 of 2023

Deals Deals Deals

Sales

• Multifamily: Advanced Real Estate acquires a 714-unit multifamily asset in Cost Mesa, CA for $234mm from Camden Property Trust. Advanced secured a 10-year, $151mm Freddie Mac loan

• Industrial: Codina Partners sells Beacon Logistics Park in Miami, FL to the The Church of Jesus Christ of Latter-day Saints for $174mm

• Multifamily: Sequoia Equities acquires a 304-unit multifamily community in Hillsboro, OR for $99mm from Security Properties

• Hospitality: Dauntless Capital Partners acquires Crystal City Marriott, a 343-key hotel in Arlington, VA, for $66mm from JBG Smith

• Office: First Mile Properties acquires a 287k sf office asset in Paramus, NJ from DRA Advisors and Onyx for $62mm

• Multifamily: Argyle Real Estate Partners acquires Newbrook Point Hope, a 264-unit multifamily community in Charleston, SC

• Multifamily: Goodegg Investments acquires a 215-unit multifamily community in Orlando, FL

Debt

• Multifamily: Keybank provides $91mm in financing for the rehab of a 204-unit affordable housing asset in suburban Pittsburgh, PA. The financing consists of a $35mm construction loam, an $18mm Fannie Mae Loan, $16mm in LIHTC, and $22mm in tax exempt bonds

• Multifamily: Jacob Schwimmer and JCS Realty secure a $51mm gap mortgage from MF1 Capital for a mixed-use project in the Bronx, NY

• Multifamily: Colliers Mortgage issues a $17mm, 40-year HUD-insured construction to perm financing for a 199-unit affordable housing project in San Antonio, TX

Developments

• Retail: Topgolf breaks ground in Greensboro, NC. The venue is expected to open in late 2024

• Industrial: Foundry Commercial acquires an office asset outside Dallas, TX to convert into a 337k sf, three-building industrial complex

• Industrial: Lovett Industrial and Rosewood Property Co., to develop Addison Innovation Center, a 242k sf, two-building industrial project in Dallas, TX

Distress

• Office: In-Rel Properties acquires 7500 Old Georgetown Road, a 335k sf office asset in Bethesda, MD, for $30mm via short-sale from Stonebridge and Rockwood Capital. Stonebridge and Rockwood bought the asset in 2019 for $133mm

Leasing

• Industrial: Lecangs, a logistics company, signs a 504k sf industrial lease at 3585 Church St. in Whitehall, PA outside Pennsylvania

• Office: King & Spalding, a law firm, sign a 175k sf lease at Vornado’s 1290 Avenue of Americas office in New York, NY

• Office: MN8 Energy, a renewable energy company, signs a 20k sf office lease at Pebb Enterprises and BH Group’s Boca Raton, FL Office Depot Campus

Meme Summary

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