NYCB Suffers Q2 Loss Due to Multifamily Loan Problems

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Good morning. NYCB's multifamily loan portfolio, heavily tied to New York's rent-stabilized sector, is under mounting pressure. Plus, Bismarck, North Dakota, tops a recent WalletHub ranking as the most affordable rental market in the country.

Today’s issue is sponsored by Redwood Living—explore real estate investments in the Midwest BTR market.

🎧️ No Cap Podcast: Josh Sasouness sits down to share his journey about how he and his brother built Dwight Capital from the ground up into one of the top multifamily FHA/HUD lenders in the US.

Market Snapshot

MULTIFAMILY EARNINGS

TOGETHER WITH REDWOOD

Don’t Miss this BTR Equity Deal in the Detroit MSA

Known for its multifamily neighborhoods of single-story, two-bed, two-bath apartments with attached garages, Redwood Living, Inc. has a new equity deal currently accepting investors.

Offering investors a 10% preferred pay rate, 20% in equity, plus long-term income potential, and potential future refinances, Redwood Orchard Brook 3 may be the Midwest BTR deal investors have been looking for.

• Across the pond: Deutsche Bank (DB) expects more pressure in 2H24 due to CRE exposure, particularly to the office sector, and expects provisions for credit losses to top 30 bps.

• Master Real Estate Investing: Reserve your spot in the 8-week online Wharton Online & Wall Street Certificate Program. Build your network, gain practical skills, and learn from top CRE executives. Use code CREDAILY by 8/12 to save $500.

• Unemployment uptick: The national unemployment rate rose to 4.1% in July, renewing recession fears with a 43 on the Sahm indicator. Let’s see what the Fed does now.

• Lending leader: Invesco CRE Finance Trust (INCREF) is taking advantage of the bank lending gap and has surpassed $1.4B in originations, adding 22 loans since May 2023.

• Market squeeze: After years in the limelight, the once white-hot US housing market sees new home sales hit a seven-month low in June amidst rising inventory, high rates, and inflated prices.

• Commercial comeback: The CRE market in Canada is rebounding, with Q2 transactions exceeding $12B, driven by multifamily, industrial, and retail properties.

• Mexican movement: Interest from wealthy Mexicans in Miami condos surges post-election, with concerns about complex taxation and the rule of law escalating.

• Top markets: Bismarck, ND, tops a recent WalletHub ranking as the most affordable rental market in the country, with renters spending just 15% of their income on rent.

• Hand it over: Ballast Investments and Goldman Sachs (GS) gave up 82 buildings in San Francisco after owing nearly $730M, and transferred 1,211 units to RBC Capital.

• Slinging deals: Multifamily apartment deals in NYC surged 108% quarter over quarter to $2.83B, largely driven by maturing loans that positioned sponsors to be saddled with higher interest rates.

• Rent rebound: The LA apartment market saw asking rents rise to $2.22K per month in Q2, up 11.5% since 2Q20, with steady occupancy.

• Workforce makeover: Bridge Investment Group Holdings and Bridge Workforce Funding purchased a 418-unit complex for $101M, planning workforce housing upgrades.

• Apartment innovations: Nonprofit and impact investors raised $135M to buy apartments, aiming to combat record-high US homelessness numbers.

• Bursting pipeline: Denver's industrial availability rate surged to 9.5% in Q2 thanks to 2MSF of new construction, with 42.9% already preleased for 2H24.

• Warehouse workhorse: Jacksonville saw a jump in its industrial market supply, thanks in large part to a 550 KSF Primark facility fully leased and sold by VanTrust to INDUS Realty.

• High-flying financing: Goldman Sachs (GS) and Triangle Equities secured an $85M refinancing loan for NYC's Terminal Logistics Center, a fully leased industrial space.

• Industrial blues: Cleveland's industrial market leasing activity dropped to a decade-low at roughly 880 KSF in Q2, down from 1.6 MSF last year.

• Swipe right: Tinder founder Justin Mateen and his brother acquired the Wilshire Rodeo Plaza for $211 million, marking Beverly Hills' largest property transaction since 2019.

• Brooklyn boom: Empire State Realty Trust (ESRT) expanded its retail presence in Brooklyn with two North 6th Street building acquisitions for $195M.

• Furniture fallout: Conn's HomePlus (CONN) plans to close over 100 of its stores as it faces liquidation after filing for Chapter 11 bankruptcy.

• Financial reinvention: Miami's 830 Brickell, a 57-story tower covering 640 KSF managed by a JV between Cain International and OKO Group, secured a $565M loan to pay off debts.

• Building more homes: San Francisco Mayor Breed proposed a new ordinance to allow housing development in SoMa, where office vacancies are at a record 37%.

• Boutique bonanza: Hyatt (H) is still in advanced talks to acquire Standard International, which would significantly expand its worldwide offering of luxury and resort rooms.

• Top hoteliers: Houston leads the US hotel market in YoY occupancy (+29.6%), ADR (+20.3%), and RevPAR (+56.0%) increases.

📈 CHART OF THE DAY