90K Build-to-Rents Are Under Construction Nationwide

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Good morning. Build-to-rent (BTR) housing is rapidly expanding, with 90K units under construction nationwide, mostly concentrated in the US South and West regions.

Today’s issue is brought to you by AirGarage—maximize parking revenue at your property.

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Market Snapshot

IN THE PIPE

TOGETHER WITH AIRGARAGE

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• Explore Neutral’s Strategy: Neutral is rethinking sustainable construction by integrating mass timber, a unique investor model, and an iterative approach to scale sustainable development. (sponsored)

• REIT resilience: Public REITs rose 14% YoY, outpacing private real estate by 17%, driven by strong balance sheets and a flexible response to interest rate changes.

• Activist pressure: Healthcare Realty Trust (HR) faces big changes after activist investor Starboard Value took a 5.9% stake, leading to new board appointments and a CEO search after the merger.

• Zoning clash: Tampa City attorney Andrea Zelman is accused of threatening to suspend zoning reviews after a court ruling challenged the city's authority, raising concerns among developers.

• Shutdown looms: With a 12/20 deadline approaching, Congress remains at an impasse over the budget, risking a government shutdown that could disrupt key economic and CRE functions.

• Legal battle: Red Oak Realty is suing Vanguard Properties for allegedly using confidential info from failed merger talks to "poach" agents, seeking damages and a court injunction.

• Mobile moves: Brookfield (BN) secured $1.6B from selling nearly 80 US mobile home parks, reflecting rising investor demand for affordable manufactured housing.

• Loan secured: Madison Realty Capital and Unity Capital have provided $214M in financing for a $250M oceanfront condo project in Long Branch, NJ.

• Redeveloped mall: Verde Investments received approval to transform the former Fiesta Mall in Mesa into an urban village featuring up to 4K homes and 1.85 MSF of retail and office space.

• Big apartment sale: The Preserve at Melrose, a prominent multifamily property in San Diego, sold as part of a surge in Q4 multifamily deals, surpassing $772M in the area.

• Bigger footprint: Elion Partners bought 4 warehouses in Sunrise, FL, from Blackstone’s(BX) Link Logistics for $206M, with the largest property selling for $102.6M.

• Land grab: Amazon (AMZN) purchased 200 acres in Hesperia, CA, for $161.9M to build a 2.5 MSF warehouse, with construction already underway.

• Full of data: Prologis (PLD) and Skybox Datacenters have sold a converted Illinois warehouse to HMC Capital, now a high-capacity, 32 MW data center.

• Merger blocked: A federal judge has blocked the $24.6B merger between Kroger (KR) and Albertsons (ACI), citing antitrust concerns and market concentration issues.

• Name brand selloff: A portfolio of 120 JCPenney stores, totaling 16 MSF across 34 states, is set to be sold in 2024, with potential sales topping $1.3B.

• Slowing down a bit: Starbucks (SBUX) plans to reduce the number of new store openings in 2025 amid a redesign strategy and broader corporate changes.

• A big deal: Cousins Properties' $521.8M purchase of Austin's Sail Tower, fully leased to Google, marks the city's largest office deal of 2024 amid high vacancy rates and shifting market dynamics.

• From distress to deal: LA County has completed its $200M purchase of the 54-story Gas Company Tower, marking the end of a long, convoluted saga.

• Healthcare pivot: The Kelemen Company is converting a third (115 KSF) of The Atrium office tower into healthcare facilities near John Wayne Airport.

• Leisure rebound: Lodging Analytics Research & Consulting (LARC) expects that softer economics, more foreign arrivals, and a stronger-than-expected US economy will boost hotel performance.

TOGETHER WITH REAP CAPITAL

Reap Capital's Newest Deal!

Big things are happening at Reap Capital! We're thrilled to tease our latest deal—a 3-property multifamily portfolio strategically located in high-growth markets.

• 100% classic units 

• 1980s 

• Low basis 

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• Out of state single individual owner 

Stay tuned for details on how this acquisition enhances our mission of delivering strong, stable returns.

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*Please see the advertising disclosure at the bottom of this newsletter.

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