New York Community Bancorp Gets $1B Bailout

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Good morning. Troubled New York Community Bancorp (NYCB) secures over $1B from a Mnuchin-led group. Meanwhile, a real estate manager invests $500M to buy single-family rental homes directly from builders due to limited supply from homeowners.

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Market Snapshot

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• Tighten those belts: In his latest takeaways, Powell emphasizes that U.S. CRE challenges are manageable, but expects many sectors to work through issues for several years.

• Diversify your portfolio: Percent is making private credit investing available to everyday accredited investors. Get started today with just $500. (sponsored)

• Urban tax deflation: Urban tax collections pose challenges due to CRE devaluation, impacting 30% of local revenue, with major cities hit hardest.

• Senior surge: Senior housing sees strong absorption, with over 11K units absorbed in 4Q23, a five-quarter high, according to Marcus & Millichap.

• Shifting costs: NYC is considering a bill that would shift rental broker fees to landlords, with support from key unions in the city.

• Handing off billions: DFS Group co-founder Robert Miller's family office, SAIL Advisors Ltd., disperses its investment team, with a $2B portfolio now managed externally.

• Extend and pretend: Chicago's Prudential Plaza owner spent $40M for a two-year loan extension on a $386M CMBS loan.

• Market stability: The Green Street Commercial Property Price Index was steadily going down in February, with a 7% annual decline and a 21% drop from its March 2022 peak.

• Shiny and brand new: Despite transaction declines of 50%, NYC and LA remained the top markets. The Big Apple led portfolio deals totaling $1.6B.

• New Space Race: During the pandemic, people across the country sought out larger living spaces, with the mean distance to employer offices rising from 10 to 27 miles.

• Riding the wave: Texas apartment development has plummeted as builders face high rates, slowing rent growth, and a 75% drop in starts.

• Density wars: Arlington, VA's ‘Missing Middle’ reform faces fresh lawsuits, with similar battles in Alexandria challenging densification.

• Resistance ceiling: High lending standards and costs continue to pressure multifamily, with mixed sentiment among professionals in different market segments.

• Double or nothing: Blackstone (BX) plans to double its India warehouses, aiming for 100MSF and a potential IPO, despite real estate trust struggles.

• Filling up fast: Fort Worth's Fort West Commerce Center is now 70% leased, with Lockheed Martin (LMT) and Big Ass Fans as major tenants.

• Airborne acquisitions: Distribution By Air acquired a 66.59KSF warehouse in Hanover, MD for $13M to consolidate three facilities.

• Urban retail resurgence: Consumer spending and tourism growth in 2023 boosted prime urban retail demand, with foot traffic returning to pre-pandemic levels in half-surveyed corridors.

• Targeting the bullseye: Target (TGT) plans to open 300 traditional large-format stores in the next 10 years, aiming for $15B in annual revenue.

• Foot traffic fever: Rumors of the demise of retail were greatly exaggerated. Investor demand for retail assets in the U.S. is at an all-time high, with a low vacancy rate of 4.6%.

• Remote revolution: Big companies push a return to offices, while small- and mid-sized opt for hybrid or remote work, according to a new report.

• Tech giants shrink: Google (GOOGL) will shrink its office footprint in Seattle, following other tech giants in subleasing space instead of getting rid of it entirely.

• All roads lead to NYC: Gannett (GCI), owner of USA Today, is relocating its national HQ from Virginia to NYC, vacating a 176KSF space to do so.

HOUSING SHORTAGE

📈 CHART OF THE DAY