A very late morning/early afternoon to all!

S&P Global Ratings puts Brookfield on a negative watchlist, indicating it might downgrade the company to junk bond status. StoryBuilt’s portfolio goes to sale. Dallas Industrial market continues to lead with the largest number of projects under construction. Silicon Valley leasing is down but shows signs of picking up in 2024. UAW strikes seem to be making progress. And the IMF and WTO paint a bit of gloomy future for global markets.

Prayers to all impacted by this weekend’s atrocities.

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Capital Markets

Market News

• The International Fund (IMF) has increased it outlook for global inflation and called for central banks to keep monetary policy tight until prices stabilize. The IMF revised its projection for global consumer price increases to 5.8% for the next year (Bloomberg)

• US Treasury Secretary, Janet Yellen, has said there is nothing unusual with how the market has reacted to higher borrowing costs. She mentioned no concerns on the recent sell-off in Treasury bonds. Since March 202030-year bonds are down 53% (Yahoo)

• United Auto Workers claims progress has been made with GM during recent talks. UAW President stated the strike is working but negotiations are still not where they should be (TheGuardian)

• The World Trade Organization cut its projection for global trade to 0.8% for 2023, down from 1.7% in April. The WTO said the slowdown was broad-based (TheGuardian)

• U.S. housing has gotten so expensive that incomes need to jump by 55% to make buying affordable again. Research from CE Mortgage Technology indicates prices would need to drop by 35%, Interest rates drop by 4%, or a 55% increase in income to make homes affordable again (Yahoo)

CRE Headlines

• S&P Global Ratings puts Brookfield on a negative watchlist, indicating it might downgrade the company to junk bond status. The $130bn giant, had previously been downgraded to BBB-, a step above junk status, in July 2021 (GlobeSt)

• StoryBuilt’s 28-property residential portfolio is put on receivership sale by A&G Partners and Onyx Asset Advisors. The $2bn portfolio is available as a whole or partially. The portfolio in various stages of development. The sale comes after the company requested $10mm in rescue capital from investors in August and notified employees of company-wide layoffs (Bisnow, PRNewswire)

• The Dallas-Ft.Worth industrial market showed the strongest construction pipeline in Q3 with approximately 58mm sf. This number was down, after delivering over 12m sf this quarter. Vacancy crept up to 8.0% as new supply hit the market. Net absorption remained positive at 8mm sf, despite a reported slowdown in leasing (Savills)

• Leasing activity was less than 500mm sf in Silicon Valley’s office market in Q3, the lowest since Q1 2021. Approx. 90% of new leases were under 20k sf with the average lease size under 10k sf. JLL research reports a the number of requirements for 100k+ sf of space has tripled since the start of the year and could translate to higher activity in 2024 (JLL)

Deals Deals Deals

Sales

• Multifamily: A fund advised by Goldman Sachs Asset Management acquired a 294-unit apartment complex in Cambridge, MA for $182mm. The seller, The Hanover Company, completed the asset in 2022 (YieldPro)

• Hotel: Kastrati Group, buys the 124-key SLS Hotel in Miami, FL’s Brickell neighborhood for $55mm. The seller was a member of the Quatari royal family (TheRealDeal)

• Industrial: Novae Corp. complete’s a nine-property sale-leaseback to an undisclosed buyer. The utility trailer manufacturer, executed a long-term absolute net lease with annual escalations with an undisclosed large public REIT (REJournals)

• Office: Positive Investments sold a 122k sf Los Angeles, CA office building for $25mm to an owner-user (connectcre)

• Office: Monarch Alternative Capital acquires a 412k sf office asset in Miami, FL. The 28-story building was built in 1985 and was 90% leased at the time (REBusinessOnline)

• Retail: A JV between Midland Atlantic Properties and Next Realty acquired a 160k sf shopping center in Cincinnati, OH. The acquisition was financed by Goldman Sachs. The center is shadow-anchored by Target and Costco (connectcre)

• Retail: Sterling Organization acquired a 103k sf grocery-anchored center in Atlanta, GA. The center is anchored by Kroger and is the 14th property in Sterling’s $267mm equity fund (commercialsearch)

Debt

• Multifamily: Harry Macklowe secured a $300mm inventory loan for the office-to-residential condo project in NYC’s Financial District. The loan is part of a larger $665mm refinance, where 479 of the 566 units remain unsold (connectcre)

• Multifamily: A JV between Harridge Development Group, Silverpeak Real Estate Partners, and Urban Green Investments has upsized a $34mm loan to $115mm for the redevelopment of two assets into a 277-unit and 31k sf retail mixed-use asset in Los Angeles, CA’s Koreatown (MHN)

• Multifamily: A JV between LaTerra Development and Clarion Partners secured a $90mm loan for a 246-unit luxury multifamily. The JV used the loan from PGIM Real Estate to refinance the Los Angeles, CA asset and return equity (MNN)

• Retail: CBL Properties and Horizon Group, secure a $79mm loan to refinance a retail center in Atlanta, GA. The 10-year, fixed-rate loan, replaces a previous set of loans which would have matured in November (REBusinessOnline)

Developments

• Multifamily: Skanska completes a 410-unit, 28-story, multifamily asset in McLean, VA. The asset is part of a larger 6.5mm sf mixed-use development. The Swedish-based firm previously reported investing $221mm in the Fairfax County project (MNN)

• Multifamily: Catalfumo Companies secures a $340mm loan to build a 106-unit Ritz-Carlton in West Palm Beach, FL. The condos are listed between $4-$8mm currently (connectcre)

• Multifamily: Jim Chapman Construction Group breaks ground on a 244-unit built-to-rent townhome project outside of Chattanooga, TN (REBusinessOnline)

• Industrial: Simone Development acquired a 1.4mm sf retail property in NYC’s Bronx with plans to convert the site into a 187k sf logistics center. The company plans to start repositioning the asset immediately (commercialsearch)

Distress

• Retail: Park Place Mall in Tucson, AZ sold for $87mm in a foreclosure auction. Brookfield Corp was the previous owner. Pacific Retail Capital Partners will take over managing and leasing for the asset (connectcre)

Capital Raising

• Multifamily: WNC raised two LIHTC funds totaling $350mm ($220mm & $130mm) in equity. Equity will be used to fund the construction and acquisition of over 2,100 affordable housing units (PRNewswire)

Leasing

• Office: TriPost Capital leases nearly 12k sf of space at 410 Park Ave in NYC. The lease brought Global Holdings Management Group’s 250k sf office building to 92% occupancy (NYPost)

Meme/Poem Summary

Roses are red,

violets are blue,

real estate ain’t dead,

now please sign the subscription agreement boo