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Happy Friday!

New executive order to benefit data centers, interest rates expected to modestly decrease in 2025, construction costs are up (at a more manageable rate), and the Philly and Chicago office markets continue to struggle while seeing bright spots in Q4

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Capital Markets

Headlines

• Biden Signs Exec Order To Lease Federal Sites For Data Centers

  On Tuesday, President Biden signed an order that calls for leasing federal sites owned by Defense and Energy departments to host gigawatt-scale AI data centers and new clean power facilities

• Fed Funds Rate Projected to Drop 75 to 100bps

  The CPI rose by 2.9% year-over-year in December as expected, up from 2.7% in November. Given the strong economic reports markets now expect the Fed to make three 25bps interest rate cuts in 2025

• Construction Material Costs Increased in 2024

  The producer price index (PPI) stated construction materials prices rose 0.2% month-over-month in December. The index of components and materials for construction was up 1.1% year-over-year

• Philly Office Market Sees Positive Net Absorption in Q4

  In Q4, the Philadelphia office market saw positive net absorption of 129K SF. The market had not seen positive absorption since Q3 2022. Approximately 1.5mm SF of were signed during Q4 2024, two new office assets were delivered with one being a build-to-suit and another a spec office asset in Newtown Square

  Philly Office Market Fundamentals

  

  Source: Newmark Research

• Chicago Downtown Office Continues To Struggle

  Downtown office in Chicago has not had positive net absorption since 2019, with 2024 having 1.5mm SF in negative net absorption. Deliveries continue to slow down with Trophy spaces absorbing the majority of new leases

  Chicago CBD Office Market Fundamentals

  

  Source: Newmark Research

Deals Deals Deals

Sales

• Multifamily: A JV between Connor, Clark & Lunn Infrastructure and Bestinver Infra acquired a majority interest in a 1,200-unit student housing community in Richardson, TX from Tikehau Capital North America

• Multifamily: JRK Property Holdings completes the sale of a 752-unit multifamily community in El Paso, TX

• Multifamily: Clear Investment Group acquires a 681-unit multifamily building in D.C. from

• Multifamily: Legal & General, acquired the Arkadia, a 350-unit West Loop apartment building in Chicago, IL

• Multifamily: An affiliate of California-based Turner Impact Capital acquired a 423-unit multifamily community in Chicago, IL

• Retail: Remington Nevada sold a 115K SF grocery-anchored shopping center in Las Vegas, NV for $50mm to an undisclosed buyer. The buyer assumed the existing $33mm, 10-year, 4.51% 60-month interest-only CMBS note with Morgan Stanley

• Industrial: BKM Capital Partners acquired the 130K SF SeaTac Industrial Park in SeaTac, WA, for $29mm

• Industrial: Heitman acquired a 300K SF industrial property in Norfolk, VA

• Industrial: A SoCal alternative fashion company acquired a 270K SF industrial logistics asset in Pomona, CA from CapRock Partners. The buyer plans to use the building as its corporate HQ

• Industrial: Corniche Capital acquires a 190K SF industrial asset from KABR Group for $15mm in Calverton, NY

Debt

• Multifamily: The Domain Companies secured $219mm in financing for a two-building 544-unit mixed-use development in the South Bronx neighborhood in New York. Freddie Mac’s Forward Commitment program provided long-term permanent financing and The Urban Investment Group at Goldman Sachs Alternatives led the Opportunity Zone equity financing

• Senior Housing: A JV between Monarch Alternative Capital LP and REDICO secured a $155mm refi from Marathon Asset Management Commercial Real Estate for a six-building, 817-unit senior housing portfolio across Florida

• Multifamily: Chess Builders secures a $79mm loan from S3 Capital to develop a 138-unit luxury multifamily high-rise in New York’s Midtown

• Multifamily: TDK Cos. secured a $64mm FHA construction loan for a 288-unit multifamily project in Johnson City, TN

• Multifamily: A Georgia-based development company secured a 10-year term with a 35-year amortization, $42mm loan from Fannie Mae for The Glenn, a 270-unit apartment community in Auburn, AL

Developments

• Office: Gilbane and NJ Transit Corp. are planning to develop a 500K SF office tower in Camden, NJ

• Hospitality: Horizon Hospitality is reported to be developing two 12-story, Atlanta, GA hotels near Emory University Midtown Hospital. Its expected the combined hotels will total 400 keys

• Multifamily: McShane delivers a 310-unit garden-community in Tempe, AZ

• Industrial: Alliance Industrial Company purchased 67 acres of land near the Northeast Georgia Inland Port in Gainesville, GA. The company plans to develop two spec industrial buildings totaling 967K SF

Distress

• Retail: Hull Property Group and Racine Mall to acquire Northlake Mall, a 1mm SF mall in Charlotte, NC, for $39mm from Starwood Capital Group. Starwood has been in default since 2017 after acquiring the asset in 2014 for $248mm. Spinoso Real Estate Group, the mall’s receiver, recently entered into a PSA

Capital Raising

• Data Centers: Aligned Data Centers completes capital raise of over $12bn. The capital raise includes $5bn of new primary equity, comprising funds managed by Macquarie Asset Management, and more than $7bn of new debt commitments

• Multifamily: A JV between Harbor Group International, The Garrett Cos. and Telis Group provided $631mm to recap a 11-property 2,192-unit multifamily portfolio spanning across Colorado, Arizona, Indiana, and Minnesota

• Multifamily: NexMetro Communities recapitalized an 849-unit, four-property single-family rental portfolio with $160mm in insurance capital from Blackstone and a preferred equity investment from Artemis Real Estate Partners in a transaction that valued the portfolio at $300mm

Meme Summary

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