Happy Friday!

The short week has come to an end, but deals were plenty. Clevelander owner has submit plans to redevelop the iconic Miami hotel on South Beach into a mixed-use development. The senate held a hearing on Thursday to try and find a solution to rising real estate insurance premiums and decreasing coverage amid increasing natural disasters. NYC announced plans to rezone a portion of Brooklyn to allow for up to an additional 4,000 housing units to be created. Amazon has big data center plans in Virginia with $11bn investment, WeWork is renegotiating its leases but plans to stay in most buildings. Surprising acquisition of office asset leased to Activision HQ and GoodRX by JP Morgan in the deals section.

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Capital Markets

Market News

• McKinsey study finds US retail workers’ quit rate is 70% higher than other industries (Bloomberg)

• IRS plans to aggressively pursue 1,600 millionaires and 75 business partnership who owe back taxes. IRS plans to target millionaires owing over $250k and business with $10bn in assets (AP)

• RH, formerly known as “Restoration Hardware”, warns that luxury housing will remain challenging due to high interest rates in letter to shareholders revising sales outlook for 2023. RH adjusted its low end sales outlook from $3.0bn-3.1bn to $3.04bn-3.1bn (Morningstar)

• Goldman Sachs planning another round of job cuts that could result in 1%-5% of employees losing their jobs. The cuts will target investment banking and trading groups (Reuters)

CRE Headlines

• Senate Committee holds hearing with on real estate insurance and explores potential solutions. Insurance industry experts and advocacy groups gave testimonies noting how average annual catastrophe loss doubled to $219bn in 2010-2020, up from $126bn in 1990-1999 (insurancebusinessmag)

• Amazon investing $11bn into Louisa County, VA to develop data-centers (Bisnow)

• NYC revealed plans to rezone a portion Brooklyn’ Atlantic Avenue from light manufacturing to residential and commercial which would add 4,000 homes with 1,150 to 1,500 of those homes being below market rate apartments (TheRealDeal)

• Miami’s iconic Clevelander hotel and bar on South Beach to be replaced with a mixed-use development consisting of 40% affordable housing units and a high-end restaurant (AP)

• Nightingale close to negotiating settlement agreement to return some money to investors (Bisnow)

• Bank exposure to real estate estimated at $3.6tn, or 20% of deposits, with office defaults increasing the value of underlying assets and loans is being written down causing a “doom-loop” scenario (MotleyFool)

• WeWork renegotiating nearly all leases, but planning to stay in majority of buildings and vacate underperforming locations (Bisnow)

• Bridge Industrial met with resistance from Chicago suburb Mayor for plans to redevelop former office campus into logistics hub (TheRealDeal)

Deals Deals Deals

Sales

• Retail: Centennial Real Estate buys 1.1mm sf shopping center, Santa Clarita Westfield Mall, in Santa Clarita, CA for $199mm from Unibail-Rodamco-Westfield (CommercialObserver)

• Office: JP Morgan Asset Management set to buy 220k sf Pen Factory in Santa Monica, CA from CALSTRS for $166mm (Yahoo)

• Office: InLight Capital buys 143k sf suburban office asset in Houston, TX from CWCapital (REJournals)

• Multifamily: Harbor Group International buys 336-unit multifamily asset, The Warner, in Round Rock, TX from Stanmore Partners. The asset was 95% occupied at the time of the sale (REJournals)

• Multifamily: ShainRealty Capital buys 256-unit asset in Mesquite, TX (REBusinessOnline)

• Hotel: MCR buys 138-key Courtyard hotel in North Charleston, SC (Businesswire)

Debt

• Hotel: Yellowstone Real Estate buys $106mm loan secured by the New Yorker Hotel in NYC, from M&T Bank (CommercialObserver)

• Multifamily: Ram Realty secures $81mm construction loan from U.S. Bank for a 353-unit multifamily development in Miami, FL (CommercialObserver)

• Multifamily: The Dinerstein Companies affiliate obtains $59mm acquisition loan for a 298-unit multifamily asset in Raleigh, NC. Mesa West Capital financed the deal with a 5-year nonrecourse loan (CommercialObserver)

Developments

• Data Centers: Amazon investing $11bn into Louisa County, VA to develop data-centers south of regional industry hub (Bisnow)

• Office: CIM Group delaying and pivoting away from plans to develop a $5bn office tower in Atlanta, GA (Bisnow)

• Medical: The Gilbert Foundation, Henry Ford Health, and Shirley Ryan AbilityLab announce JV to develop $439mm inpatient rehab hospital and research facility in Detroit, MI (REBusinessOnline)

• Office: St. John Properties to build 120k sf office building north of Austin, TX. Construction is expected to start in spring 2024 (commercialsearch)

• Industrial: Logistics Property Company completes 36-foot clear, 393k sf, spec-logistics center in suburban Chicago, IL (REJournals)

• Industrial: JV between The Missner Group and Realterm delivers 130k sf spec industrial building in Chicago, IL (REBusinessOnline)

Capital Raising

• ESG/Land: SolaREIT obtains $100mm, with up to $250mm in additional capital, in funding from AB Carval. SolaREIT provides financing solutions for real estate used for solar energy and compensation options for landlords who host solar farms or batter storage projects (SolaREIT)

Leasing

• Office: DEA consolidates D.C. area offices into 175k sf lease in Chantilly, VA after awarding $113mm contract to Unicom Tech Park (Bisnow)

• Office: Silverstein Properties signs 122k sf, 15-year lease with Tower Research Capital at 120 Broadway in NYC (Bisnow)

• Office: Ambient Enterprises, an HVAC design company, signs 17k sf sublease at 498 Seventh Ave in NYC (CommercialObserver)

Meme Summary