Madison Closes $2.04B RE Debt Fund

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Good morning. Madison Realty Capital just closed a $2.04B real estate debt fund (the largest in the US YTD). The fund will focus on opportunistic residential, hotels, industrial, and retail properties in major metro areas.

Today’s issue is brought to you by MHCI Group.

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Market Snapshot

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• Wealth on the rise: US household wealth hit a record high in Q2, rising by $2.76T to $163.8T, spurred mostly by real estate gains and stock gains.

• Bringing it back: San Francisco and Lendlease struck a deal to revive the $1.2B, 47-story Hayes Point tower, which includes 333 condos and 290KSF of office and retail space.

• Adams under fire: Allegations of a bribery scheme test NYC Mayor Eric Adams's leadership as an ongoing federal probe threatens his credibility and real estate goals.

• A case for cuts: Goldman Sachs CEO David Solomon suggests the Federal Reserve might consider a larger 50-basis-point rate cut due to a softening labor market, though a smaller 25-point cut remains more likely.

• Slightly more affordable: Rising wages and stable rents, driven by increased apartment construction, are making rental housing more affordable across the country.

• Rent relief: NYC apartment rents eased in August, with Manhattan's median dropping 3.5%, offering some relief after last year's record highs but still far above pre-pandemic levels.

• Rent reset: NYC rents fell slightly in August, marking a significant shift in landlord fortunes as city residents finally said, “Enough is enough.” Further rent drops are expected after rate cuts.

• Thrifty tenants reign: Only 11% of Dallas-Fort Worth renters care about expensive luxury amenities, while 31% of renters value space and 30% prioritize location.

• Golf meets real estate: PGA star Patrick Cantlay partners with LRE Management to invest in multifamily properties, eyeing real estate as a future career while still competing on the tour.

• Revolving door: STAG Industrial Inc. (STAG), with notable lenders and an active acquisition history, refinanced a $1B senior unsecured revolving credit facility, successfully extending debt maturities.

• Major lease: Lingerfelt signed a lease with Vital Records Control for over 230,000 square feet at Ruffin Mill Distribution Center, bringing the Richmond, VA property to full occupancy.

• Westward leading: NewMark Merrill Hadler Community Partners is now targeting underinvested West Coast communities, with a focus on retail center development.

• Shopping success: A Regency Centers (REG) and Brand Street Properties JV has entered the Providence market, buying 97%-occupied East Greenwich Square for $46.7M.

• Tower revival: The $1B renovation of San Francisco's iconic Transamerica Pyramid faces uncertainty due to a $600M lawsuit involving a key tenant, clouding its reopening.

• Building buzz: Howard Hughes Holdings' (HHH) much-hyped mass-timber office building in Houston, featuring eco-friendly design and innovative tech, is already 80% pre-leased nearly 80%.

• Office reset: Paramount Group (PGRE) plans to sell Market Center in San Francisco after writing off its investment, potentially recouping $224M.

• Labor battle: NYC hotel subcontractors form an advocacy group against the Safe Hotels Act, which would require union labor, risking mass hospitality layoffs and citywide chaos.

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