Happy Friday!

Congrats on making it through the first week of 2024! Manhattan office numbers are out for 2023 with deliveries hitting their highest point in two decades, Paris CRE sales volume hit its lowest since 2009, and another big name real estate investor is being investigated by the SEC. Eurozone inflation jumps in December, VC fundraising drops to its lowest since 2017, online gambling is bad for New Jersey but not for the reasons you might think, and all eyes are on the jobs report this morning as the market hopes to get insight on what the Fed might do to rates

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Capital Markets

Market News

• Eurozone Inflation Jumps to 2.9% in December

  Eurozone inflation jumped to 2.9% in December, up from 2.4% in November, supporting the European Central Bank’s case to keep interest rates high for longer. Inflation came in slightly below expectations of 3.0% thanks to government subsidies and lower energy prices

• All Eyes on Friday’s Jobs Report

  The December jobs will be out this morning, with expectations of a 170,000 increase in nonfarm payrolls and an unemployment rate of 3.8%. Its expected that a number drastically above expectation will influence the Fed to maintain rates higher beyond the projected March rate cut

• Rise in Online Gambling Bad for New Jersey?

  Research, commissioned by the Campaign for Fairer Gambling, found that $2.4bn spent by people gambling online in New Jersey in 2022 decreased the state’s economic activity by about $180mm. The reason for the drop in activity comes from wages paid to employees. If the $2.4bn had been spent on retail or dining its estimated New Jersey employee wages would have been roughly $1bn versus the $110mm the sector actually paid out

• VC Firms Fundraising Drops by 60% in 2023

  U.S. venture capital firms raised $67bn in 2023, down 60% from 2022. The amount was the lowest since 2017 and puts increased pressure on start-ups looking to raise capital

CRE Headlines

• Manhattan Office Construction Deliveries and Vacancy Near Record Highs in 2023

  Construction deliveries hit the their second highest point in over two decades, contributing to negative net absorption and a rise in vacancy. Strong leasing activity in December helped bring a 90bps decline in vacancy in Q4. Leasing activity in 2023 remained below the 17-year average and 11% below 2022

  Manhattan Deliveries, Net Absorption, and Vacancy 

  

  Source: Newmark Research

• CRE Sales Volume In Paris Drops to Lowest Since 2009

  CRE sales volume in Paris, inclusive of industrial, office, and retail, dropped by 56% in 2023 to €6.8bn, the lowest since 2009. Q4 volume dropped by 63% from the year prior to €1.1bn. Similar to the US, rising interest rates have brought the CRE market to a halt. In France several developers are filing for insolvency and banks are increasing their provisions for credit losses

• SEC Charges Florida Real Estate Developer Rishi Kapoor with Perpetuating $93MM Fraud Scheme

  The Securities and Exchange Commission announced it obtained an asset freeze and other emergency relief concerning an alleged $93mm real estate investment fraud perpetrated by Miami-based developer Rishi Kapoor. The SEC also charged Location Ventures LLC, Urbin LLC, and 20 other related entities in connection with the fraud scheme. Kapoor allegedly misappropriated at least $4.3mm of investor funds and improperly commingled approximately $60mm of investor capital

Deals Deals Deals

Sales

• Office: The Regents of the University of California acquired One Westside and Westside Two, two office assets totaling 687k sf in Los Angeles, CA, for $700mm. Hudson Pacific Properties and Macerich sold the assets. UCLA intends to convert the buildings into a research park

• Multifamily: Griffis Residential acquires Platform at Union Station, a 287-unit multifamily tower in Denver, CO, from Holland Partner Group for $126mm

• Multifamily: Aker acquires Pelham Hall Apartments, a 148-unit multifamily community in Boston, MA for $70mm. Fairstead and Atalaya Capital Management acquired the asset in December 2020 for $74mm

• Medical Office: Big Sky Medical acquires a 252k sf, three-buiilding medical center from ViaWest Group for $46mm. Taconic Capital provided a $40mm acquisition loan. The asset last transacted in 2018 for $34mm

• Industrial: Universal Logistics Holdings Inc., a transportation and logistics provider, acquires a 254k sf industrial facility in Cloverdale, VA for $13mm. The company plans to invest $50mm into the expansion

• Industrial: Terreno Realty Corporation sold a 58k sf distribution center in Compton, CA for $16mm. The asset was acquired in 2017 for approx. $9.4mm and generated a 13% unlevered IRR

Debt

• Multifamily: CMC Group secures a $239mm loan from Bank OZK to develop a luxury waterfront development on Grove Isle in Miami, FL

• Hospitality: Synergy Hospitality Management secures a $65mm loan from a JV formed by Sabal Investment Holdings, Bsafal Inc., and Argo Real Estate. The borrower plans to convert the LaGuardia Plaza Hotel in a 353-key DoubleTree by Hilton

• Multifamily: Urban Residential Properties and The Manhattan Building Company secure a $63mm construction loan from White Oak Real Estate Capital for a multifamily conversion in Allentown, PA

• Student Housing: Treo Group secures a $53mm construction loan for a 163-unit, 400bed student housing development near University of Miami in Coral Gables, FL

• Multifamily: KD Sagamore and Ranger Properties secured a $46mm bridge loan from Scale Lending for Arris Grand, a recently completed 113-unit multifamily development in Brooklyn, NY

• Multifamily: Kaplan Cos. secures a $27mm, five-year, fixed-rate loan through Nuveen Real Estate for a 128-unit multifamily asset in Toms River, NJ

Developments

• Student Housing: Landmark Properties acquired a 15-acre site near the University of Colorado Boulder in Boulder, CO. The company plans to build a 303-unit, 936-bed student housing community. Completion is expected in fall 2027

• Multifamily: Black Salmon and LD&D, plan to build a $115mm, 23-story, 253-unit multifamily tower in St. Petersburg, FL. The group acquired a 0.77-acre parcel from Apogee Real Estate Partners for $9mm. Construction is set to start in Q4 2024

• Multifamily: Stream Real Estate, a four-story office building and two levels of parking in Seattle, WA from East West Investment Co. for $7mm. Steam plans to convert the 53k sf office into a residential property

Leasing

• Office: Taylor Team Relocation, a copier shipping firm, signed a 50k sf industrial and office lease at Marsh Business Park West in Dallas, TX

• Office: KPMG signs a 13k sf lease at Armada Hoffler Properties’ 363k sf Armada Hoffler Tower in Virginia Beach., VA

Meme Summary

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