Confidence Rebounds in 4Q24 Burns + CRE Daily Fear and Greed Index

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Good morning. The results from the 4Q24 JBREC + CRE Daily Fear and Greed Index are here—confidence is climbing in commercial real estate. Industrial and multifamily are regaining momentum, while office continues to lag.

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• Growing confidence: A new report from Hines reveals that more than 66% of global real estate markets are currently in the “Buy” phase, marking the highest level in eight years.

• Cap rates: CBRE’s 2025 market outlook predicts moderate cap rate compression and a 10% increase in investment sales, led by industrial and multifamily assets.

• Loan report: November’s CMBS delinquency rate rose to 6.40%, driven by a few large loans in the office, multifamily, and lodging sectors, highlighting the outsized influence of high-value defaults on market metrics.

• International interest: Blackstone acquired Tokyo Garden Terrace Kioicho for $2.6B, marking Japan’s largest-ever foreign real estate investment, as part of its growing presence in the region.

• Favorable conditions: Falling interest rates and the narrowing valuation gap between public and private real estate could bolster REIT performance.

• Rebounding: New York City’s luxury housing market is roaring back to life, with November delivering its best month for contracts on properties over $5M in three years.

• Market momentum: These cities, with their strong demographics, job growth, and affordable housing, are set to lead the U.S. housing market in 2025. 

• Dampen the mood: Moody's warns the Fed's expected rate cut may be premature, though multifamily real estate stands to benefit.

• True ownership: Corporate investors control 25% of Atlanta's single-family housing market, raising concerns about affordability and ownership transparency as firms dominate key metro areas.

• Housing boost: Boston launched a $25M Acquisition Fund to preserve affordable housing and prevent displacement, aiming to secure 500 homes and assist over 1,500 residents in five years.

• Warehouse win: Longpoint Partners acquired a 26-property Florida industrial portfolio for $331M, with a 97% occupancy rate across six South Florida markets.

• Major investment: Toyota Kentucky is building a $922M advanced paint facility, reducing emissions and water use while boosting efficiency at its Georgetown manufacturing campus.

• Expansion: BKM Capital Partners and Kayne Anderson recapitalized a $550M, nine-property light industrial portfolio totaling over 2.1M square feet across key Western U.S. markets.

• Retail resilience: New York City’s retail sector is thriving, fueled by a 77% return-to-office rate, growing investment activity, and shifting tenant dynamics, signaling a rebound as interest rates drop.

• Deal of the day: Continental Realty sold the renovated Oakland Plaza in Troy, Mich., for $29M after boosting occupancy from 71% to 97% and attracting new tenants.

• Palm Beach: Owens Realty and Galium Capital sold the fully leased Seacoast Banking Centre in Palm Beach Gardens for $30.3M, reflecting ongoing challenges in South Florida’s office investment market.

• Conversion: Highwoods and Brand Properties secured a $6M tax abatement for a $91M project converting an 18-story Atlanta office building into 289 apartments, with 20% offered at below-market rates.

• Refinancing: The Loren Group secured $57M refinancing for The Loren at Lady Bird Lake in Austin, highlighting the city’s thriving hospitality market with rising occupancy and luxury hotel rates.

📈 CHART OF THE DAY