Happy Hump Day!!!

Late start today, but lots of news. Meta pays hefty termination fee on London office lease, and The Art Institute shutters its last remaining campuses. Target announces store closures citing increase in crime, while Rite Aid announces possibly closing down 500 stores. The U.S. waits on some sort of bipartisan deal to prevent a government shutdown and retailers brace for lower consumer spending with the reactivation of student loans. The FTC sues Amazon alleging the retail giant holds a monopoly in online retail. Large scale developments seem to be plentiful as the deal sheet once again has some pretty big announcements.

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Capital Markets

Market News

• Retail stocks were downgraded by Jefferies research. A survey to over 600 US consumers showed 90% were “somewhat concerned” about meeting monthly expenses. Monthly student loan repayments are thought to be a pain point as respondents planned to spend less on apparel, restaurants, and footwear (Yahoo)

• FTC is suing Amazon, alleging the online store is monopolizing online markets for sellers and buyers. According to the FTC the online platform requires sellers to to purchase Amazon’s logistics services in order to get best services (CNN)

• Government shutdown could be avoided as Senate seeks to push a bipartisan temporary measure (known as a continuing resolution) that would keep the government running through Nov. 17. While the continuing resolution could be approved by the Senate this week, its likely to face difficulties in the House (AP)

• A Government shutdown would severely impact air travel as Saturday is the deadline for Congress to pass a resolution and also the the day to reauthorize the FAA. The shutdown risks FAA gridlock which would cause flight delays for travelers and cargo, and longer screening lines (Yahoo)

• Dollar hits 10-month high vs. peers as market takes into consideration “high-for-longer” interest rate policy. U.S. dollar index peaked at 106.32 (Reuters)

• Screenwriter’s Guild reaches deal with studios that allow writers to get bonuses for TV shows and obtains assurances AI won’t replace screenwriters (Bloomberg)

CRE Headlines

• Meta pays $181mm to terminate office lease in London office. Analysts claimed Meta had 18 years remaining on the lease (Independent)

• Target closing 9 stores across the U.S. on Oct. 21 citing “theft and organized retail crime”. The closures are across the following states: CA, OR, NY, and WA (Axios)

• Rite Aid considering closing between 400 and 500 stores as part of bankruptcy proceedings. The company hold roughly $3.3bn in debt and is involved in federal and state lawsuits involving prescription filling practices (Bisnow)

• Retail crime accounted for over $112bn in losses in 2022, up from $94bn in 2021. Retail theft represented 1.6% of sales in 2022, up from 1.4% a year prior. in the 2023 National Retail Security Survey, 67% of respondents reported an increase in violence in 2022 with many reporting additional measures being taken to prevent loss (NRF)

• Chicago’s Magnificent Mile retail corridor reported a 14.1% vacancy in Q2, down from 16.3% in Q2 2022. However the high-end shopping corridor still lagged Chicago’s overall retail market. The overall retail vacancy rate in Chicago for Q2 was 7.4%, down from 8.8% in 2022 (Trepp)

• The Art Institute to close its 8 remaining campuses at the end of September. Management is working with students to find them partner institutions to complete their education (Bisnow)

• Data Center Firm, AirTrunk, looking to IPO on Australian Securities Exchange. Shareholders Macquire Asset Management and PSP sent RFPs to seven Investment Banks asking for equity capital markets to pitch ideas around a capital review (AFR)

• Analysis by Prologis finds that 57% more logistics space is required to support $1bn in retail sales than a decade ago. This is despite automation and data analytics advancements (GlobeSt)

• New York City releases RFP for a developer to lease, redevelop, and operate Kingsbury Armory, a 570k sf building backed by a $200mm investment from Mayor Adams and Governor Hochul (TheCityLife)

Deals Deals Deals

Sales

• Multifamily: Standard Communities buys six affordable housing assets in Los Angeles, CA totaling 407 units for approx. $114mm. Five of the assets were senior housing affordable (YieldPro)

• Office: Lion Investment Group and Massa Investment Group under contract to acquire a 140k sf Miami, FL office building for $82mm from Nightingale Group (TheRealDeal)

• Industrial: California Investor buys 114k sf industrial asset in Plano, TX from Founder Properties. The asset was leased to a single tenant through 2030 (REJournals)

• Retail: Regency Centers buys grocery-anchored center in Chicago, IL for $28mm from Principal Life Insurance. Principal purchased the asset in 2001 for $20mm (connectcre)

• Retail: Site Centers sells 225k sf grocery-anchored center in Boothwyn, PA to undisclosed buyer. Center was anchored by Acme Grocery and Walmart (REBusinessOnline)

• Retail: Vista Property Co. buys 92k sf strip center in Arlington, TX. The asset was 97% leased (DallasNews)

• Student Housing: Core Spaces acquires 233-unit, 641-bed student housing community in Clemson, SC. GEM Realty Capital was an equity partner and KKR provided financing (REBusinessOnline)

Debt

• Retail: Wenzel Investment Group secures $15.2mm loan for Tampa Bay-area grocery-anchored center with a life co. (REBusinessOnline)

Developments

• Industrial: First Solar (NASDAQ: FSLR) begins construction on $1.1bn manufacturing facility outside of Lafayette, LA. The facility 2mm sf is expected to be fully operational by 2026 and add

• Mixed-Use: Black Salmon and The Allen Morris Co. announce plans to develop a $1bn project in Miami, FL’s medical district. The project will include 500k sf of medical office, 150-key hotel, 1k resi units, and retail space (CommercialSearch)

• Mixed-Use: Flaherty & Collins Properties to break ground on a $67mm luxury apartment and retail development outside of South Bend, IN (REJournals)

• SFR: Lennar Homes buys 40-acre site in Miami, FL for the development of 231 homes for $7mm from Lime Grove Realty (TheRealDeal)

• Mixed-Use: Developer buys 137 acres outside of Hartford, CT for $1.2mm to develop apartments and commercial buildings. Sachem Capital Corp. sold the sites to an LLC owned by the developer (HartfordBusinessJournal)

Distress

• Senior Housing: Landmark View defaults on $26mm loan with Axos Bank. The loan is secured by a senior living facility with 77-assited living units and 31-memory care units in Los Angeles, CA (CommercialObserver)

Capital Raising

• Diversified: Harrison Street reaches $2bn in funding for its opportunistic fund, Harrison Street Real Estate Partners Fund IX. The boasts commitments from Oregon State Treasury and CalSTRS. Senior Housing, Healthcare, Life Sciences, Build-to-Rent, Data Centers, and Self-Storage are all key asset classes for the fund (PERE)

Leasing

• Industrial: Power Electronics, a provide of renewable energy solutions, signs 166k sf lease in Airtex Commerce Center in Houston, TX (REBusinessOnline)

• Life Sciences: Ascend Elements, a battery parts supplier, signs 101k sf lease in Devens, MA with King Street Properties (REBusinessOnline)

• Industrial: Advanced Plastic Corp., a custom plastic extrusion company, signs 87k sf lease in suburban Chicago with DRA Advisors (REBusinessOnline)

Meme Summary