Biden's $100M Initiative to Tackle Housing Shortage

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Good morning. The Biden administration launched a $100M initiative to boost housing construction and address the national housing shortage.

Today’s issue is brought to you by PACE Loan Group—a national lender offering owners non-recourse, long-term, fixed-rate C-PACE financing.

🎙️ No Cap Podcast: Tune in Sunday for Episode 5 as we sit down with Michael Mandel, former broker, and CompStak founder, about the impact of data and AI on commercial real estate.

Market Snapshot

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TOGETHER WITH PACE LOAN GROUP

Looking to Recapitalize? Use C-PACE to Breathe Life and Liquidity into Your Project.

Are you struggling to secure sufficient funds for your projects as construction costs escalate and loans approach maturity?

C-PACE financing can retroactively finance mechanical, electrical, plumbing, and other portions of your project over the past 1-3 years, infusing vital liquidity into projects to fund reserves, cover cost overruns, pay down your mortgage lender, and more.

PACE Loan Group’s recent transaction, a Hyatt House hotel and medical rehab annex in West Chester, Ohio, utilized $17.7 million in retroactive C-PACE to recapitalize existing debt. The C-PACE proceeds were used alongside a new bank lender to finance the build out of the property, which had stalled mid-construction.

See how C-PACE could benefit your project today.

• Aging opportunities: At 93, Larry Silverstein eyes Midtown Manhattan's aging office buildings amid falling property values, seeking opportunities for office-to-resi conversions.

• REITs on the rise: In Q2, U.S. REITs raised $16.6B in aggregate—$12.5B in secondary debt and $4.1B in equity—benefiting from improved capital markets.

• Railyard saga continues: Watermark Capital Group faces foreclosure on a $45.3M loan for a failed 28-story, 497-unit project, its third failed attempt at the former railyard.

• Trump's towering vision: The Trump Organization plans to add 1.5K luxury condos and 142 KSF of commercial space at Trump National Doral Miami.

• Real estate revival: Real estate stocks are rebounding, with commercial property possibly near its bottom. Public REITs are up 10–15%, while private markets are down 20%.

• Texas tightens: Housing affordability is slowly but surely decreasing in Texas, as a nonprofit secures an $18.6M loan for a 204-unit affordable property in Fort Worth.

• Rental trends: Some South Florida areas are seeing undeniable rent drops, with 13 of 25 municipalities down, while Sunny Isles Beach leads the slump at -10.2%.

• Multifamily mayhem: A fraudulent $74M Fannie Mae (FNMA) loan led to an $18M loss for JLL (JLL), with 3 investors pleading guilty to wire fraud conspiracy.

• Balancing act: Tampa's multifamily vacancy rate exceeded 10% in 3Q24 for the first time since 2001, reflecting a concerning supply-demand imbalance.

• Industrial resilience: The US industrial real estate market is stabilizing with a 6.1% vacancy rate, as newer tech facilities remain in high demand and major metros see rising supply.

• Building boom: Jacksonville issues a permit for a 547 KSF speculative warehouse at Imeson Park South, a $1M project that’s part of a larger multi-building plan for the site.

• Data center deal: Thor Equities Group purchased a 270-acre manufacturing plant in Atlanta and plans to convert it into a data center.

• Suburb optimism: New York developer Ben Ashkenazy loses his Magnificent Mile property due to default, but remains bullish on Chicago suburbs despite the struggling retail market.

• Urban rebirth: Santa Ana is considering replacing a shopping center with an urban village that would include 3.75K apartments, 350 KSF of retail, a 250-room hotel, and 13 acres of green space.

• Bargain to riches: CRC has sold Centre at Hagerstown, MD, for $36.3M, doubling its initial purchase price, with an exit value of $52.4M.

• Foreclosure frenzy: Blackstone (BX) and Rialto Capital are foreclosing on RFR’s retail properties, defaulting on $22.4M loans for locations across NYC.

• Studio struggles: Hudson Pacific Properties reported a $47M loss in Q2 with gradual office leasing growth, as studio operations remain uncertain.

• Visiting California: In 1H24, California hotel deals dropped 50% to $1.2B, while individual deals only slipped by 1.6%.

📈 CHART OF THE DAY