Rexford Navigates Industrial Market Slump with Smaller Warehouses

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Good morning. Rexford Realty is outperforming the rest of the SoCal industrial market by specializing in smaller warehouses. Plus, Blackstone Mortgage Trust (BXMT) cut dividends by 24% and announced a $150M share buyback plan as it navigates rising defaults.

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• Dividend drama: Blackstone Mortgage Trust (BXMT) cuts its dividend by 24% to 47 cents per share, forecasting $100M in annual savings but also attracting short sellers.

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• Funding flux: South Florida's VC funding dropped to $361M in Q2, with 71 deals compared to the previous quarter.

• The new guard: J.P. Morgan Asset Management (JPM) appoints Josh Myerberg as managing director for its $89B real estate portfolio.

• Hacker haven: Cybercriminals targeting real estate transactions are becoming more sophisticated, and total fraud losses will top $446M by 2022.

• Falling through: The potential stalking horse bidder for LA’s Oceanwide Plaza missed the bid deadline, but lawyers remain optimistic about future sales.

• Bond boom: US high-grade bond sales hit $92.2B in July, the highest level for the month since 2017, exceeding expectations as companies seize favorable market conditions.

• Multifamily sunset: New multifamily deliveries are expected to cool down, with Southern metros like Houston seeing the largest declines, potentially stabilizing key apartment markets.

• Urban exodus: Nationally, moving to the suburbs is still very popular among younger Americans, especially millennials, who seek larger homes and outdoor spaces.

• Artistic elegance: Dasha Zhukova Niarchos and VeLa Development are collaborating on Ray Nashville apartments, a $211M project with 367 units in Music City.

• Building up: EGC Real Estate Group used AB 1287 to expand an apartment building to seven stories with 224 units in LA's Harvard Heights.

• Multifamily meltdown: Freddie Mac (FMCC) projected limited rent growth of 2.7% and a 6% higher vacancy rate nationwide this year amid high supply.

• Industrial Eden: Hines secured a $120M loan from Affinius Capital after snagging a $100M senior loan from Bank OZK in June for the largest Silicon Valley industrial project, located in San Jose.

• Data expansion: A Blackstone (BX) unit is ready to develop a second Arizona data center in Avondale, buying 206 acres for $246.8M, or around $1.2M per acre.

• Breathing room: LA’s industrial market saw a 14.5-year high vacancy rate of 3.7%, with rents cooling to $1.61 PSF and sublease space up 11.6%.

• Converting warehouses: Asana Partners sold a repurposed warehouse district in West Palm Beach for $19.5 million to Armata Holdings amidst ongoing South Florida retail transactions.

• Doral delights: Nuveen Real Estate (JRS) and SJC Ventures purchased a $32M, 10-acre site in Doral, FL, and are planning an 89 KSF retail project.

• Slimming down: Big Lots (BIG) plans to close around 140 stores nationwide, tripling its initial estimate. Most of the closures (54) will be in California.

• Government growth: Washington, DC's office market, is showing signs of recovery, with government returns leading the way. The city’s Q2 leasing total reached 2.1 MSF.

• Bigger fortress: Fortress Investment Group expanded its office at Weir’s Plaza in Dallas, adding 20 KSF and bringing its total office footprint to 68 KSF.

• Another one bites the dust: A JV surrendered its Silicon Valley office complex after the floating interest rate on $293M in remaining debt spiked to 8.5%.

• Rent gap: Prime office rents exceed Class A rents by an average of 31.4% globally, with North America seeing the highest premium at 62.5%, driven by strong occupier demand for top-tier buildings.

• Loan limbo: Aby Rosen secured a short-term extension to refinance the $222 million CMBS debt on 285 Madison Avenue amid rising interest rates and falling property valuations.

• Sunshine City: Developers in St. Petersburg are planning a high-end condo project with a five-star hotel brand, following trends in Miami and Tampa, to meet the rising demand for upscale residences.

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