Fed Holds Steady on Rates, Hints at Possible September Cut

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Good morning. The Federal Reserve has maintained the federal funds rate between 5.25% and 5.50%, hinting at a potential cut in September. Plus, It’s the end of an era for Sam Zell’s Equity Commonwealth.

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• Liquidation: Sam Zell's former firm, Equity Commonwealth, will liquidate its assets and shut down following shareholder pressure and an inability to secure a major acquisition.

• Rate outlook: Jerome Powell signaled a positive outlook on inflation, raising hopes for a September rate cut, despite the FOMC leaving interest rates unchanged.

• Net lease news: Carlyle's net lease business anticipates larger portfolio transactions this year, following a modest $100 million in deals last year due to market challenges.

• Umbrella insurance: As inflation drives up costs, more people are tapping into umbrella insurance for extreme incidents, leading to higher premiums and stricter approval processes.

• Not too shabby: Private equity giant KKR's (KKR) strong Q2 included $32B in new capital raised, $601B in AUM, $4.1B in revenues, and $37B of total deployment.

• Fool me twice: WeWork is expected to file for bankruptcy this month, as it withholds a $6.4 million interest payment and negotiates lease concessions amid financial turmoil.

• Lending fluctuations: HUD's multifamily and healthcare loan guarantees totaled $2.64 billion in Q3, a slight increase from the previous quarter but down 8% year-over-year, with New York City HDC leading in loan activity.

• Creative solutions: Hines acquired land in Loudoun County and Manassas, VA, to address the nearby Washington, D.C. housing shortage, where over 242K units are underused.

• Diving deeper: Decron Properties is set to acquire over 1K Austin apartments at $77.15M for a 334-unit complex, targeting tech worker-heavy Pflugerville.

• Parking to plots: Texas Christian University (TCU) and Endeavor plan to convert surface parking lots into 5-acre tracts for multifamily and retail spaces.

• Brooklyn bonanza: KKR (KKR) and Dalan Management are ready to buy the 327-unit Paxton Tower in Brooklyn for $240M, expanding their residential portfolio.

• Securing financing: Overton Moore Properties has raised $150 million in equity, giving them $300 million in acquisition capital to purchase industrial and logistics properties across California.

• On sale: Artis Real Estate Investment Trust plans to sell nine industrial properties in the greater Phoenix area and Twin Cities region.

• Acquisition: CIP Real Estate has purchased the 143,221-square-foot Tully Business Center in San Jose for $40 million, expanding their portfolio in a key Silicon Valley industrial market.

• Expansion: Storage Units Capital has obtained a $75 million construction loan to develop 4,000 self-storage units across five new locations in Florida.

• Deal of the day: Casey’s General Stores (CASY) will acquire Fikes Wholesale for $1.15B, adding 198 stores and expanding to nearly 2.9K locations, mainly in Sunbelt.

• Merged: Realty Income Corporation has completed its all-stock merger with Spirit Realty Capital, with the combined company's shares now trading under the symbol "O" on the NYSE.

• A sweeter deal: ShopOne Centers will buy a Tamarac shopping center in South Florida for $36.4M, which Site Centers previously purchased for $28M in 2003.

• Market-ready: SJC Ventures and Nuveen Real Estate (JRS) secured a $69.40M loan for Doral Marketplace, an 83.33 KSF shopping center in Florida.

• Wellness office: Tom Brady's family office is leasing space in The Well Bay Harbor Islands, a Miami building known for luxury amenities like vitamin B12 drips and acupuncture.

• Taken the L: South Korean investment groups are facing significant losses on U.S. office debt, selling off positions at steep discounts.

• Beating expectations: Boston Properties (BXP) exceeded analyst expectations with $278.4M in FFO, despite lower leasing activity in its portfolio.

• Trophy triumph: Cousins Properties is optimistic about its Sun Belt office portfolio, citing increased demand and limited new supply, particularly in Atlanta, where they see 88% occupancy.

• Cash flow makeover: Ben Ashkenazy secured an $85 million loan from Citigroup for the Arthouse Hotel on the Upper West Side, refinancing a previous $80 million loan amid ongoing financial challenges and recent property foreclosures.

• Wielding debt wisely: Ashford Hospitality Trust (AHT) aims to pay off its debts by selling 6 US hotels and refinancing a $267.2M mortgage, with $98.2M of financing remaining.

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