Student Housing Rent Growth Softens in June

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Good morning. Student housing pre-leasing for Fall 2024 shows continued growth but at a slower pace than in previous years. Plus, Arbor Realty Trust is under investigation by the FBI for its lending practices.

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STUDENT HOUSING

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• Rate cut rally: Real estate stocks soared as much as 3.1% Thursday, their biggest gain of 2024, driven by cooling inflation and expectations of Federal Reserve rate cuts in September.

• DOJ probe: Arbor Realty Trust is under investigation by federal prosecutors and the FBI over its lending practices and loan portfolio performance following short-seller allegation.

• Banking squeeze: Fed rate cuts may initially hurt banks by squeezing interest earnings amid rising deposit costs and slow loan growth before potentially boosting lending and earnings.

• Historic sale: Miami's nearly 100-year-old Dade County Courthouse is for sale at $52.3 million, marketed as an adaptive reuse project amid downtown redevelopment efforts.

• Policy changes: Starting Feb. 28, 2025, new multifamily mortgage loans from Fannie Mae and Freddie Mac will require a 30-day notice for rent increases, lease term expiration, and a five-day grace period for late rent.

• Oversupply: Florida’s four biggest metro areas saw significant rent declines, with Jacksonville reporting the largest drop in median asking rent in five years.

• Rent Cap: President Biden's proposal to cap rent increases at 5% has sparked confusion and controversy, leading to speculation about a potential national rent control policy.

• Workforce housing: Ron Simon donates $100M to build housing in Orange County through RSI Dream Communities, partnering with local employers to expedite development.

• Managing expenses: Multifamily property owners are grappling with skyrocketing operational costs, particularly in insurance, utilities, and maintenance, threatening NOI.

• Make it affordable: Atlanta Housing is exploring better collaboration methods with developers to create 10,000 affordable housing units within five years.

• Conversion: Asana Partners and MRP Realty will convert Duke Energy's former HQ in Charlotte into 448 apartments and 55,000 square feet of retail, with a $250 million investment.

• Warehouse sale: Darielle Singerman sold a Boca Raton industrial building for $18.7 million to investor Serge Abecassis, marking a significant return on her 2021 purchase price of $10.5 million.

• Pullman Park: Ryan Companies secured $16.3M to develop a 170,000 sq ft industrial building in Chicago's historic Pullman Park.

• Fully leased: Bixby Land Co. and a global investment manager sold a fully leased, 104,500 sq ft industrial property in San Bernardino to Overton Moore Properties.

• Going small: According to a new Colliers report, U.S. retail growth is mostly being driven by smaller tenants leasing stores in shopping centers.

• Acquisition: Finmarc Management Inc. bought Riverview Plaza, a 185,275 sq ft shopping center in Frederick, Md., from EDENS and JPMorgan Chase & Co. for $30 million.

• Doubling down: Boston Properties proposes increasing its office development at Reston Town Center from 645,000 to 930,000 square feet, aiming to capitalize on high-end office demand.

• Special servicing: Brookfield's $400M loan on LA's Bank of America Plaza has moved to special servicing due to falling occupancy rates, ahead of the loan's September maturity.

• Chicago Casino: Bally’s (BALY) has secured $940M in construction financing for a 34-story hotel tower at its Chicago casino project.

• Trading hands: Hotel property trades surged from $4.3 billion in Q1 to over $5.7 billion in Q2, matching last year's Q2 total, driven by key motivations for buyers and sellers.

• Hiking fees: Oakland increases hotel fees to 2% of room rates to fund Visit Oakland's marketing efforts, aiming to double revenue and boost tourism despite the city's ongoing challenges.

📈 CHART OF THE DAY