Happy Friday!!!

The weekend is once again here. W.P. Carey kicks things off with a spin-off of 59 net leased office properties into a publicly-traded REIT (NYSE: NLOP) and a plan to sell its remain 87 properties by the start of 2024. CMBS extensions are prevalent with a third of all extensions in the 1-12 month range. North American seaport volume is down to pre-pandemic levels as of Q2, with industrial vacancy up slightly along those port markets. The UAW strike could get more intense today if no agreement is reached by noon. And finally, another government shutdown could be around the corner if no spending bill is agreed upon by end of month.

Enjoy your Weekend!

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Capital Markets

Market News

• Its possible we are already in a recession based on one indicator. Historically whenever the spread between the University of Michigan’s Index of Consumer Sentiment (UMICS) and the Conference Board’s Consumer Confidence Index (CCI) has greatly widened and then contracted, a recession has followed. These conditions have been met over the last year (MorningStar)

• The United Auto Workers’ strike could expand if an agreement is not reached by Friday at noon. Prolonged strikes are expected to impact U.S. GDP by 0.40% and have an impact across suppliers in the industry (Reuters)

• U.S. could face another government shutdown if a funding plan is not passed by the end of next week. House Speaker McCarthy has been unable to get far-right republicans on board with a spending bill (AP)

• “Higher for longer” interest rate policy has spooked investors. The S&P sank 1.6% on Thursday after dropping almost 1% the day prior (Yahoo)

• Oil prices prices rose as Saudi Arabia cut previously announced production cuts. The nation said current production could stay these levels until at least December and a are a response of soft global demand, especially from China (Axios)

CRE Headlines

• W.P. Carey (NYSE: WPC) plans to spin-off 59 net leased office properties into a publicly-traded REIT (NYSE: NLOP) and sell the remaining 87 office assets by the beginning of 2024. Going forward WPC’s portfolio will be primarily industrial, retail, and self-storage assets with an 11+ year WALT (WPC)

• CMBS loan extensions have totaled $5.7bn in 2023 YTD. 37% of these loan extensions have had a term extension of 1-12 months, 32% for 12-24 months, 9% for 25-36 months, and 22% for 37+ months (Trepp)

• Seaports in North America are seeing cargo volume return to pre-pandemic levels as volume drops 18.6% year-over-year in Q2 2023. The only port in North America to increase its volume YoY was the Mexican port in Manzanillo due to nearshoring of manufacturing operations by U.S. companies. All industrial markets saw vacancy increase quarter-over-quarter in Q2 (CBRE)

  Q2 2023 Volume Comparisons by Port

  

• Marathon Asset Management is bidding on Signature Bank’s $33bn CRE loan portfolio. CEO Bruce Richards notes the biggest opportunity in the distressed debt space is within commercial real estate (Yahoo)

• GLP announces launch of Ada Infrastructure, a new data center business, with 850 megawatts of bandwidth across Japan, UK, and Brazil (GLP)

Deals Deals Deals

Sales

• Industrial: Investcorp acquires a national 31-property portfolio totaling roughly 1.6mm sf for $216mm (commercialsearch)

• Net-Lease: Essential Income REIT acquired a 15-property net-leased portfolio totaling 232k sf for $84mm (ExchangeRight)

• Multifamily: Greenlight Communities sells a 292-unit apartment community in Phoenix, AZ for $79mm. The asset was completed in 2023 (REBusinessOnline)

• Multifamily: Coney Realty buys 16-property portfolio of rent-stabilized apartments in Manhattan, NY for $47mm from Barberry Rose Management. Barberry paid $84mm for the portfolio in 2016 (Bisnow)

• Office: Menashe Properties buys 230 W Monroe St., a 623k sf office building in downtown Chicago, IL for $43mm (Crain’s)

• Industrial: Fort Capital buys 259k sf class B light industrial portfolio consisting of five properties in Houston, TX (REBusinessOnline)

Debt

• Multifamily: BHI provided The Jay Group a $92mm construction loan for a 18-story residential tower in New York City’s Inwood neighborhood (CommerciaObserver)

• Multifamily: Keybank provided a $72mm financing package to EAH Housing for an affordable housing project in Greenfield, CA (REBusinessOnline)

• Multifamily: The Vernon Group secures $43mm construction loan from Limekiln Real Estate Investment Management to develop a six-building 167-unit apartment community in northwest of Los Angeles, CA (CommercialObserver)

• Multifamily: RRC Group secures $24mm bridge loan from Dwight Mortgage Trust to refinance a recently delivered 120-unit multifamily community in Vancouver, WA (REBusinessOnline)

• Industrial: TD Bank provided a $24mm construction loan to MDH Partners for an industrial development suburban Charlotte, NC. The project will feature two facilities totaling 254k sf with an expected delivery in Q3 2024 (REBusinessOnline)

Developments

• Mixed-Use: Gateway Jax acquires 22 acres in downtown Jacksonville, FL to develop a $2bn mixed-use project. Phase I is expected to cost $500mm and offer over 1,000 multifamily units and 120k sf of retail space (REBusinessOnline)

• Industrial: Dermody Properties acquires a redevelopment at Pleasant Prairie, WI. The three-building center will total 2.4mm sf and will accommodate build-to-suits with rail access (Dermody)

• Office: KDC and Pacific Elm Properties will develop a 500k sf office building in Dallas, TX. The asset is expect to be delivered in 2027 and has already secured BoA as an anchor tenant with a signed lease for 238k sf (REBusinessOnline)

• Multifamily: Chicago City Council approved a 98-unit affordable housing development, Casa Yucatan, in Chicago’s Pilsen neighborhood. The development is being planned by The Resurrection Project (Urbanize)

Capital Raising

• Multifamily: Nuveen secures $250mm commitment from TIAA General Account to seed the Nuveen Real Estate U.S. Impact Housing Fund. The core-plus fund will focus on creating housing opportunities for low-income residents across the U.S. (PRNewswire)

Meme Summary