Happy Friday To All!

U.S. CRE Distress Spiked To $86B In 2023, Ashford is having a hotel asset sale to pay down its debt, and BREIT fulfills 88% of its repurchase requests in January. January hiring was the second-lowest since January 2009, CRE losses trigger share price drop for a Japanese bank, Deutsche Bank is laying off 3,500 employees, and everyone’s favorite electronic signature platform, Docusign, gets valued at $13B

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Capital Markets

Market News

• January Hiring Was Lowest Since Early 2023

  According to a report Thursday from Challenger, Gray & Christmas, planned layoffs totaled 82,307 in January, 20% less than a year ago, but 136% higher than December. The amount was the second highest since January 2009. Financial sector layoffs totaled 23,238, the worst since September 2018. Tech layoffs totaled 15,806, the highest since May 2023

• U.S. Property Losses Trigger 20% Drop In Share Price For A Japanese Bank

  Aozora Bank Ltd. saw its shares sink by over 20% as it revealed it expects to post a $191M net loss. The loss was related to additional loan loss reserves needed because of its exposure to the office market

• Deutsche Bank To Layoff 3,500 Employees

  As part of a $2.7B cost cutting initiative the German bank announced it would cut 3,500 jobs, primarily non-client-facing roles. The announcement came as the bank released earnings figures showing a decline in profit of 16% for 2023, when compared to 2022

• PE Firms In Talks To Buy DocuSign

  Bain Capital and Hellman & Friedman are seeking to buy the electronic signature platform for an estimated value of $13B. The companies are talks with several major banks to obtain roughly $8B in financing for a buyout.

CRE Headlines

• U.S. CRE Distress Spiked To $86B In 2023

  Distressed U.S. commercial properties grew to $86B at the end of 2023, with office assets making up 41% of the total with retail making up the second largest sector. Potential distress totaled $235B at the end 2023, with multifamily making up roughly $67B, ahead of office which makes up $55B

  Distressed CRE Assets

  

  Source: MSCI Mortgage Debt Intelligence

• Ashford Hospitality Trust Selling 12 Hotels To Pay Down Debt

  The upscale and full-service hotel REIT is looking to sell various assets to help pay down strategic financing which matures in January 2026. The REIT is also trying to refinance various loans tied to 20 separate assets. The list of properties available for sale is as follows:

  • 390-room Hilton Boston Back Bay – Boston, MA

  • 444-room Ritz-Carlton Atlanta – Atlanta, GA

  • 296-room Westin Princeton – Princeton, NJ

  • 351-room Hyatt Savannah – Savannah, GA

  • 193-room One Ocean – Atlantic Beach, FL

  • 350-room Residence Inn Sea World Orlando – Orlando, FL

  • 144-room Residence Inn Salt Lake City – Salt Lake City, UT

  • 168-room Courtyard Overland Park – Overland Park, KS

  • 90-room Courtyard Manchester – Manchester, CT

  • 86-room Hampton Inn Lawrenceville – Lawrenceville, GA

  • 90-room SpringHill Suites Kennesaw – Kennesaw, GA

  • 87-room Fairfield Inn Kennesaw – Kennesaw, GA

• BREIT Fulfills 88% Of Repurchase Requests In January

  Blackstone REIT reported it fulfilled $1.1B of the $1.3B repurchase requests in January. Repurchase requests were down nearly 80% since the January 2023 peak. The nontraded REIT reported it has returned $15.5B in liquidity over the last 15months. The letter also touted BREIT’s outperformance of its non-traded REIT peers by ~600bps in 2023

Deals Deals Deals

Sales

• Industrial: Killian Pacific is rumored to be the buyer of a 113-acre parcel at Columbia Business Center in Vancouver, WA. The site traded for $96M

• Office: HPI Real Estate Services & Investments acquires Barton Oaks Plaza II and III, totaling 237K sf, from Invesco in Austin, TX. The buildings were recently appraised at $83M for tax purposes, but the price was not disclosed

• Office: R2 Companies acquires 150 North Michigan, a 655K sf office tower in Chicago, IL, for $60M from CBRE Investment Management. CBRE IM acquired the asset for $121M in 2017

• Office: Goldenrod Cos. and Reserve Capital Partners acquire Collins Crossing, a 301K sf office asset in Dallas, TX, from Franklin Street Properties

• Industrial: PGIM acquires a 354K sf, two-building logistics center from Dermody Properties

• Office: NYU Langone acquires a 181K sf office asset in West Palm Beach, FL for $33M from Morning Calm Management

• Industrial: Unilev Capital acquires a 142K sf, three-building, industrial portfolio for $18M in Atlanta, GA from Berkeley Partners

Debt

• Multifamily: GN Management secures a $70M loan from Northwind Group to fund the development of a 209-unit, 29-story multifamily asset in Jersey City, NJ

• Industrial:

• Office/Multifamily: A JV between Summit Assets and Winchester Equities secures a $22M loan from Northwind Group for an office-to-residential conversion in Newark, NJ. The five-story office will be converted to a 10-story, 92-unit multifamily asset

Developments

• Multifamily: Tidewater Capital received final approvals to develop two multifamily projects in Oakland, CA. The 289-unit 533 Kirkham and the 381-unit 1431 Franklin are expected to be completed by early 2026

• Industrial: Panattoni Development Company breaks ground on Pellicano Industrial Park in El Paso, TX for 1.8M sf, five-building, build-to-suit project. Completion is expected by October 2024

• Self Storage: DXD Capital delivers a 71K sf, 703-unit self storage facility outside Atlanta, GA. The asset is managed by Public Storage

Distress

• Office: Shopoff Realty facing foreclosure lawsuits, due alleged missed payments, from Slate Asset Management at 224 N. Des Plaines St. and 900 N. Franklin St. in Chicago, IL. Slate is seeking $19M and $20M for the collective 170K sf office pair

Leasing

• Office: PNC Bank signs a lease extension at Metlife Investment Management’s One North Franklin in Chicago, IL

Meme Summary

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