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What Hochul’s Victory Means for NY Real Estate
Kathy Hochul beats Zeldin to become New York's first elected female governor, but time will tell whether she can make good on her promises to the real estate industry. There’s so little interest in commercial office space that developers are putting halfway-done projects on ice. Meanwhile, a multifamily complex in LA just sold for the highest price any Golden State apartment has fetched in 10 years. Let's dive in!
Walgreens Snatches CityMD (And The East Coast) For $8.9B
Commercial property prices are taking double-digit hits as the Fed continues to battle 40-year high inflation. Insurers are locked in negotiations with reinsurers who want to raise their rates ahead of climate change concerns and increasing natural disasters across the globe. Meanwhile, the second-largest pharmacy store chain in the country makes a major commercial real estate play with an $8.9B acquisition.
CRE Brokers Play Defense Amid Rising Rates and Inflation
The Fed’s nonstop rate hikes are making even the hungriest multifamily buyers queasy, but fixed-rate assumable debt helps some properties look more appetizing. There’s 232M SF of unused office space nationwide available for sublease, but it’s harder than ever to find tenants who care. Meanwhile, CRE firms are cutting jobs in anticipation of an upcoming recession, because of course they would.
Blackstone's Crown Jewel Faces a Test
Three attorneys general file lawsuit seeking to block Albertsons' $4 bln payout. A major player in credit markets is betting $1.8B to grow forests rather than cut them down. Meanwhile, rising interest rates are challenging one of the nation’s biggest REITs, but its executives are doubling down on its holdings.
Simon Says Malls Don’t Suck
One of the largest mall REITs in the country reported higher rents and occupancy rates for the quarter. CRE lenders are keeping cash on the sidelines, watching and waiting as the Fed’s rate hikes continue. Meanwhile, KKR launches a new, European real estate credit business arm, targeting $1–2B in originations next year.
Rocket Mortgage Heads Back to Earth as Rates Rise, Refis Dry Up
The Fed’s nonstop rate hikes are making mortgage rates so unappealing that the biggest mortgage lender in the U.S. is down 52% this year. The second-largest cinema operator in the world catches a huge break after settling a billion-dollar debt with landlords and lenders. Meanwhile, NYC real estate investment sales dropped 30% in Q3, impacting every asset class—except for one, which saw 34% growth.
Public REITs are in the 🚽
U.S. apartment prices record a quarterly decline for the first time since the pandemic, reflecting a broader real estate cooldown nationwide. Abu Dhabi’s nearly $1T sovereign wealth fund plans to increase North American real estate investments next year, and other Gulf funds are following suit. Meanwhile, as publicly traded REIT values decline, private, non-traded REITs keep growing…but for how long?
Blackstone’s Convictions
Kathleen McCarthy shares how she’s positioned her company’s $550B portfolio to meet rising inflation. Senior housing is in demand as more Baby Boomers enter their golden years. An investment group helps close an eight-figure deal for Google’s new digs in the Windy City. Meanwhile, an L.A.-based developer shuts down production on its new project in Austin, Texas until the economy shows signs of strengthening.
CMBS Borrowers Face $52B Hurdle
NYC landlords don’t know what to do about tenants selling weed under the table. Pension funds are pulling back on their commercial real estate binge as interest rates rise. Up to $52B in CMBS loans maturing over the next 2 years could be cutting it close. And despite WeWork’s fall from grace, coworking is still very popular.