CRE Sales Transaction Showing Signs of Recovery

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Good morning. Welcome to the weekend edition of CRE Daily.

• 📰 Feature: CRE transactions start to show some signs of recovery

• ⏪ Catch up: The most-read stories from the week

• 👍️ Reviews: 3 new product reviews coming soon

• 📈 Chart: $20.6B worth of apartments traded across the U.S. in Q1

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Catch up on the most clickworthy stories of the week.

• Hotels > office: Adaptive reuse projects jumped 17.6% last year, converting more outdated buildings to apartments than in 2022.

• Assessments: Big city landlords and office owners are rushing to appeal property taxes due to plunging office values, dropping up to 75% in D.C. and 50% in NYC.

• Follow the money: Blackstone is on track to refinance $12B in commercial mortgage-backed securities (CMBS) this year. $7.5B of those loans tied to industrial properties.

• Market pulse: Starwood CEO Barry Sternlicht offers his insights into multifamily rent growth and his take on how the Fed is doing to stabilize the economy.

• Record high: Manhattan apartment rents hit a new high in April, reaching $4,250 per month. Landlords are busy capitalizing on low vacancies, driving tenants to accept higher rent prices.

• Policy changes: The 421a tax abatement update is nearly finalized. Romain Sinclair outlines key changes and what developers and investors need to know.

• Mounting debt: 1440 Broadway exemplifies the current challenges in office real estate: lower rents, struggling tenants, and rising interest rates.

• Let’s make a deal: Healthcare Realty Trust (HR) and KKR & Co. (KKR) join forces for a $1B partnership focusing on medical outpatient properties.

• Apartment occupancy: Nationwide, rising apartment occupancy rates signal a potential rebound following years of declines. In fact, it’s the first time occupancy has shot up since early 2022.

• Bullish billionaire: A strategic alliance between Eldridge Industries and AECOM Capital brings a $3B investment into distressed properties amid market-wide challenges.

• Widening gap: The disparity between rent growth and wages has created a growing affordability gap for renters across the U.S., with rents outpacing wage growth in 44 of the 50 largest metros.

• Growing distress: Commercial property foreclosures rose a staggering 117% between March 2023 and 2024.

• Misleading: BREIT, Blackstone's private real estate fund with $114B in assets, faces renewed scrutiny over potentially inflated returns and questionable financial stability.

• Signs of relief: Mortgage rates dropped to 7.18%, breaking a streak of four consecutive gains, as purchase-loan applications rose 2%.

• Earnings report: Brookfield (BN) alumnus Brookfield Asset Management reported its first quarterly profit drop since its spin-off in 2022, blaming reduced fees in some key business segments. 

👍 Product Reviews

📈 CHART OF THE DAY