Bisnow Week In Review: The Most Consequential Stories In CRE

Bisnow’s week in review offers a quick bullet-by-bullet dive into the most notable ebbs and flows of the global real estate industry from last week — from the most recent legal developments in the Trump fraud case and HSBC's global real estate review to competition between hotels and Airbnb and a potential credit rating change for Brookfield Property Partners.

EDITOR’S NOTE: Parts of this story were generated by AI and have been reviewed by our editorial team for accuracy.

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NATIONAL

PODCAST: CBRE Chief Economist Richard Barkham On Rates, Distress And Recession Outlook

CBRE Global Chief Economist Richard Barkham discussed the commercial real estate outlook for 2024 on this episode of Bisnow Reports. CBRE has postponed its recession prediction, but Barkham said the firm expects slower growth toward year-end, office sector distress and a retail resurgence. He also shared insights on the trajectory of interest rates, suggesting the Fed fund rates might have peaked and could remain stable until possibly Q2. Read more

‘This Will Be Trouble’: Why Office Landlords Will Soon Face Millions In Added Costs

Office landlords are bracing for financial strain due to persistent high interest rates and upcoming loan maturities. With rate swaps and caps expiring, refinancing at higher rates and securing new, pricier swap contracts will be inevitable and will particularly impact landlords in the struggling office sector. Read more  

Appeals Court Temporarily Halts Cancellation Of Trump's Business Licenses As Trial Pushes Ahead

An appellate court has temporarily allowed former President Donald Trump to continue operating his New York businesses. This decision overrules a previous suspension of business licenses ordered by the judge overseeing Trump's civil trial examining claims related to insurance fraud, conspiracy and falsifying documents. Attorney General Letitia James alleges Trump misvalued real estate assets, inflating values for loans and deflating them for tax purposes. The trial continues with several real estate figures listed as witnesses. Read more

‘Wait Until The Check Clears’: What Comes Next In Nightingale's Plan To Pay Back Investors

Investors owed millions from a failed crowdfunding scheme by Nightingale Properties received news of potential repayments. CEO Elie Schwartz might liquidate parts of his real estate portfolio to repay investors over three years. The scandal involves two crowdfunding campaigns for properties in Atlanta and Miami Beach. Liquidating assets in a challenging market could be complex. Read more

Financially Troubled StoryBuilt Looks To Unload $2B Portfolio In Receivership Sale

Austin-based infill housing developer StoryBuilt is listing its 28-property project portfolio for a receivership sale due to financial challenges. The portfolio, valued at roughly $2B, spans Austin, Dallas, Denver and Seattle. StoryBuilt, founded in 2009, focused on dense, contemporary projects in "cool neighborhoods." The company has faced liquidity issues, leading to staff furloughs, reorganization and layoffs. Investors and residents have filed lawsuits against StoryBuilt, with claims related to owed money and construction defects. Read more

UBS Starts Sell-Off From Inherited Credit Suisse Real Estate Fund

UBS is divesting assets from a major real estate fund previously managed by the now-defunct bank Credit Suisse. Assets worth nearly £150M ($180M) are on sale. UBS acquired Credit Suisse in March due to concerns over its liquidity. The combined asset management divisions of the two banks held around $160B of real estate assets. The Credit Suisse Real Estate Fund International, valued at €3.5B, has already sold an asset in Rotterdam and is offloading more in various cities including London and Amsterdam. Read more

'Ransom Payment' No More: Mall Anchors Losing Their Leverage As Owners Ramp Up Redevelopment

Historical reciprocal easement agreements with anchor tenants have long hindered mall owners' redevelopment plans. However, the changing retail landscape is diminishing the power of these REAs, offering landlords more flexibility for property upgrades. Previously, anchor tenants used these agreements to demand payouts. Today, with challenges like e-commerce and reduced foot traffic, many anchors are more open to redevelopments crucial for the mall's long-term success. The shift in the tenant-landlord relationship is leading to more collaboration, with tenants often seeking benefits like parking or outdoor dining spaces in exchange for redevelopment approvals. Read more

In Battle With Airbnb And Vrbo, Hotel Giants Deploy New Tactic: ‘Full Attack’

The U.S. hotel industry and Airbnb are intensifying their competition for market dominance. Major hotel brands are expanding their extended-stay options, while Airbnb is considering year-long leases. Extended-stay projects now make up 32% of the hospitality construction pipeline, and this figure is expected to rise. Traditional hoteliers are adapting to compete with short-term rentals, especially after the pandemic. Airbnb's Brian Chesky acknowledges the need for competitive pricing and improved services to rival hotels. Read more

S&P Mulls Downgrading Brookfield Property Partners To Junk Status, Citing Debt

S&P Global Ratings is considering downgrading Brookfield Property Partners to junk status due to its significant maturing debt, high interest rates and declining property values. Despite Brookfield's substantial liquidity and consistent asset sales, S&P highlighted the company's weak financial risk profile, with high leverage and limited interest coverage. Brookfield, specializing in Class-A offices and malls, has defaulted on loans linked to properties in major U.S. cities. The company's net income in 2022 was $996M, a significant drop from $3.5B in 2021, mainly due to asset value declines. Read more

Solo Renting Soars In Popularity

Solo renting has increased 6.7% from 2016 to 2021. The trend peaked in 2020 due to the pandemic and social distancing, making living alone the most popular arrangement. Various factors, including housing crises and demographic shifts, contribute to this trend, with millennials and baby boomers making up the majority of solo renters. Read more

Office Landlord Stocks Outperformed The Market In Third Quarter

In Q3, office-focused stocks outperformed the S&P 500 for the first time since 2020, despite broader market concerns. Office stocks declined by 2.8%, less than the S&P 500's 3.7% drop. Office REITs performed even better, losing only 1.5% of their value. The resilience of office stocks contrasts with their sharp decline during the pandemic's peak. Deals like SL Green Realty's sale of a stake in 245 Park Ave. in Manhattan boosted investor confidence. Read more

Real Estate Groups Say More Interest Rate Hikes Would Break Housing Industry

Three major trade groups, the National Association of Realtors, the National Association of Home Builders and the Mortgage Bankers Association, have expressed deep concern to the Federal Reserve about further interest rate hikes. They warn that if the Fed continues raising rates or sells off its mortgage portfolio, the housing market could crash, potentially leading to a broader economic downturn. Despite the Federal Reserve holding rates steady recently, there's widespread apprehension about future hikes. The trade groups emphasize that high interest rates and uncertainty are hampering real estate financing, making mortgages a significant barrier to homeownership. Read more

HSBC To Review Its Global Real Estate Footprint With An Eye Toward Cuts

HSBC Holdings is reviewing its global office and retail spaces, spanning approximately 3,000 properties in 62 countries, as part of a cost-cutting initiative. The bank is expected to engage real estate specialists for this review, potentially generating nearly $1B in fees over five years. HSBC plans to relocate its global headquarters from London's Canary Wharf to the City of London by 2027. This decision aligns with HSBC's commitment to hybrid work models and the consequent reduction in office space requirements. Read more

Walgreens Looks To Close Stores, Exit Markets In Bid To Save $1B

Walgreens Boots Alliance, anticipating a new CEO, intends to close 60 clinics and depart from five markets to reduce costs. This move is part of a $1B cost-saving initiative. Interim CEO Ginger Graham announced plans to adjust store hours based on local conditions and prioritize closing unprofitable drugstores. The company also aims to cut capital expenditures by $600M. The exact stores and markets for closure weren't specified during the announcement. Read more

ULI: CRE Insurance Availability, Affordability At 'Crisis Levels'

The commercial real estate industry is grappling with insurance availability and affordability, exacerbated by climate events and escalating costs. Insurance premiums have surged, particularly in markets prone to natural disasters, prompting calls for government intervention and adjustments to lenders' insurance requirements. Read more

Small Nuclear Reactors Planned To Power 2 U.S. Data Centers

Blockchain-focused data center operator Standard Power intends to use small modular nuclear reactors at two U.S. data center campuses. This could be the industry's first deployment of the technology, which is anticipated to address power issues. Standard Power will deploy 24 reactors to produce nearly 2 gigawatts of power for its Ohio and Pennsylvania sites, using reactors built by NuScale Power Corp. These reactors are smaller in size, require less footprint and can be built more quickly and cheaply than traditional nuclear plants. Read more

PGIM Launches RealAssetX, A New Venture Focused On Tech In CRE

PGIM Real Estate has introduced RealAssetX, an R&D entity aiming to advance the real asset industry, encompassing real estate and digital/renewable infrastructure. This venture will collaborate with universities and tech firms to innovate in sustainability and artificial intelligence. Read more

Landlords Claim Target Is Using Crime To Deflect From Its Other Problems

Target recently announced the closure of nine stores, attributing the decision to a surge in shoplifting. However, landlords of the affected properties argue that the retailer's challenges extend beyond crime. While Target CEO Brian Cornell cited a significant rise in retail theft and associated safety incidents, landlords like David Blumenfeld of Blumenfeld Development Group expressed surprise, noting no prior concerns about theft. Some landlords believe Target's challenges relate more to operating large-format stores in urban areas. Theft-related incidents involving violence at Target stores surged by 120% in the early months of this year. Read more

Primark Continues U.S. Expansion With 24 Stores, Plans To Grow To 60

Primark, an international retailer, is expanding its U.S. presence, aiming to operate 60 stores by 2026 as part of its global strategy to run 536 locations. The brand is known for its affordable fashion and home goods and is capitalizing on the retail market's upswing, leasing substantial spaces in malls and standalone stores. Read more

Here’s How Cities Woo Biotech Amid Housing, Regulatory Hurdles

Cities are increasingly vying for biotech investments, utilizing sophisticated and widespread city and state investments. Despite challenges like housing availability and extensive space needs, cities are investing in talent, encouraging life sciences-led multi-use development, and aiming to attract biotech investments. Read more

Investors Waiting To Deploy Billions In Dry Powder, Eying Value-Add, Opportunistic Strategies

Investors in the commercial real estate sector are holding approximately $300B, anticipating market dislocation and foreseeing the upcoming years as optimal for capital deployment. Despite a decline in transaction volumes and economic uncertainties, value-add and opportunistic investments remain attractive, while core and core-plus assets are less favored. Read more

Sun Shines On U.S. Solar Industry With Millions In Investment Coming Down The Pike

The U.S. solar industry is experiencing a surge in investments and developments, with companies like Suniva reopening factories and Perch Energy raising $30M from Nuveen to expedite its community solar developments. The industry is benefiting from both public and private investments, and initiatives are underway to expand clean energy access and develop technology platforms. Read more

Shelter Costs Keep Inflation Elevated At 3.7% In September

The U.S. inflation rate remained at an annualized 3.7% in September, with shelter costs being a major contributor. Despite overall inflation being somewhat mitigated by interest rate hikes, the shelter index, which includes rent and related costs, has remained notably high, albeit slightly lower than earlier in the year. Read more

Peter Linneman On How To Make Sense Of Today’s Economy

Economist Peter Linneman emphasizes a macro view of the U.S. economy, likening detailed analysis to scrutinizing a pointillist painting too closely. Despite various economic pressures and the impact of Federal Reserve rate hikes on about 20% of the economy, Linneman underscores the consistent growth of the U.S. economy and the breadth of the economy that is interest rate agnostic. Read more

Volume Of Distressed Asset Sales On Mute As Owners Battle A New Type Of Crisis

Despite the proliferation of distress across the U.S. and a looming wall of debt, the calculus for building owners regarding holding or selling is multifaceted. Unlike previous downturns, transaction velocity has been slow, with an atmosphere of uncertainty freezing negotiations and a more fundamental distress present in assets, causing hesitancy and complexity in the market. Read more

Biden Administration Chooses 7 Hydrogen Hubs Eligible For $7B In Federal Funding

The Biden administration has designated seven regional hydrogen hubs, which are eligible for up to $7B in federal funding to develop sustainable hydrogen energy sources. These hubs, located in various regions including Appalachia, California and the Gulf Coast, aim to establish networks of producers, users and necessary infrastructure, fostering the development of new hydrogen facilities and supporting businesses. Read more

INTERNATIONAL

Australia's Largest Pension Fund Feeling U.S. Office Market Distress

Australia’s largest pension fund, AustralianSuper, faces challenges with its U.S. office portfolio, particularly in the Washington, D.C., market. The fund's 49% stake in an eight-building portfolio, acquired in partnership with Brookfield Properties in 2015, has diminished in value. One property, a vacant 12-story office tower in downtown D.C., is set to return to lender Starwood Property Trust. Read more 

Lenders Expect 2024 To Be The Year Distressed Sales Start In Earnest

Lenders predict a surge in distressed sales by 2024 due to mounting pressures on borrowers and lenders to address problematic loans. Initial sales will be consensual, arising from loans that can’t be refinanced due to rising interest rates. However, as the situation escalates, conflicts are anticipated. Regulatory pressures are pushing lenders to address these issues. The looming refinancing challenge in 2024 involves approximately £35B of the £177B of outstanding UK property debt. Read more 

September Construction Figures Offer Green Shoots For Housebuilders

Irish housebuilders are displaying increased confidence for the upcoming year, as indicated by the BNP Paribas Real Estate Ireland Construction Activity Index. Despite the index posting below the "no-change" mark in September, it showed an upturn from August. Factors such as softening cost inflation and an 11% new-home price inflation have enhanced the viability of new developments. The Future Expectations Index revealed that 81% of construction firms remain optimistic about their activity levels in the next year. Read more

Lies, Forged Guarantees And Impersonating Investors: New Verdict In On Case Of Ill-Gotten £710M Loan

A high court judge dismissed a claim where Michalis Kallakis, son of fraudster Achilleas Kallakis, sued Allied Irish Bank after his father tricked the bank into lending him £710M. Achilleas Kallakis used fake lease guarantees and impersonation to commit the fraud. The judge found the proceedings dishonest and an abuse of the court's process. Achilleas Kallakis' fraudulent actions resulted in a loss of more than £150M for AIB. Read more

Developer And Retailer Head To Court In Clash Over Clerys Building Lease

The private equity-backed company developing the former Clerys building in Dublin has filed a court case against the retailer set to occupy a significant portion of it. Oces Property Holdings is disputing the termination of a lease by Heatons, which trades as fashion retailer Flannels. The case has been admitted to the high court's fast-track commercial division but adjourned for mediation. Oces seeks compensation for store fit-out and other costs or wants Flannels to occupy its proposed site within the Clerys development. Read more

Chinese Real Estate Goliath Country Garden Teetering On Brink Of Default

Country Garden, China’s largest private property developer, warned of potential default on overseas debt interest payments. With around 3,000 housing projects across China, the company holds $187B in debt, including $17B in dollar-denominated debt. Although no default has occurred yet, missed interest payments totaling approximately $115M in September indicate looming financial challenges. The company has until late October to address these missed payments. Country Garden’s situation mirrors that of China Evergrande Group, which defaulted in 2021. The ongoing debt crisis among Chinese developers could have global economic implications, given the significant role of residential development in China’s GDP growth. Read more

Dublin Vacancy Rates Hit 16% As Completions And Speculative Development Stall

Dublin's office market saw a decline in leasing, with take-up reaching 355K SF in Q3, down from 411K SF in Q2. The overall vacancy rate rose to 15.8% in Q3, up from 15.4% in Q2. Grey space, previously occupied but now vacant, accounts for 30% of total availability. No new office developments were completed in Q3, but several are expected soon. Speculative development has halted, but planning for new office schemes continues. The market's future looks positive, with demand for well-located offices with strong ESG credentials. Read more

ATLANTA

As Leases Keep Shrinking, Atlanta Office Vacancy Breaks Great Recession Record

Atlanta's office market faces a record 23.7% vacancy, with over 30% of office stock available due to new constructions and increased sublease space. The prolonged slowdown in leasing activity, influenced by hybrid work trends, is expected to worsen, with minimal tenant movement anticipated in the coming quarters. Read more

Lender Finds Buyer For Sandy Springs Office Building After Foreclosure

Ameris Bancorp sold a mostly vacant 36K SF office building at 5009 Roswell Road, Sandy Springs, for $6.9M to an unidentified buyer after foreclosing on the property. The sale, brokered by Bull Realty, follows the property's previous purchase in 2019 for $10.5M and reflects a small but significant transaction amidst the beginning of a distress cycle in the market. Read more

BALTIMORE

'I Don't Think We're Seeing Much Leadership': CRE Execs Seek More Help From Baltimore-Area Officials

Commercial real estate developers in Baltimore criticized local officials for insufficient industry support amidst economic challenges, citing development hostility and a lack of understanding and consistency in dealing with market challenges. Read more

BOSTON

Boston Sees Bump In Office Leasing Activity, But Tenant Reductions Keep Vacancy Rising

Boston's office leasing activity rose to 1.1M SF in Q3, marking an end to a nine-month declining trend. The good news is overshadowed by a trend of tenant downsizing, record vacancy and falling rents. Read more

Wynn Gets Approval To Build Concert Hall, Sportsbook Next To Everett Casino

Wynn Resorts gained Everett planning board approval for its 142K SF "East of Broadway" expansion, which will feature sports betting and poker rooms, a nightclub and a 979-seat theater adjacent to its Encore Boston Harbor casino. Read more

$3.3B Mixed-Use Project Planned For Somerville Business Park

Rafi Properties proposed a $3.3B redevelopment of the Somernova business park in Somerville. It envisions a 1.9M SF, five-building campus to cater to "tough tech" tenants, with a mix of commercial, retail, community services and arts spaces, to be developed in four phases. Read more

CHICAGO

Chicago Is Ready For Its DNC Close-Up As Tourism Booms. Crime And Migrant Crisis Could Mar The Picture

Chicago, set to host the 2024 Democratic National Convention, is experiencing a tourism boom with record hotel revenue and occupancy. However, rising crime rates and a growing migrant crisis, amplified by political narratives, pose potential challenges to maintaining the city's positive tourism trajectory and image during the high-profile event. Read more

No Property Tax Hikes In Brandon Johnson's First Budget Proposal

Chicago Mayor Brandon Johnson's $16.6B 2024 budget proposal avoids raising property taxes, opting instead to close a $538M budget gap through eliminating city vacancies, refinancing debt and utilizing tax increment financing district reserves. The strategy also involves leveraging increased revenue projections and enforcing collection, while planning new investments in mental health, homelessness shelters and environmental departments. Read more

'It’s Going To Dismantle Our Industry': Restaurateurs Say New Chicago Wage Rule Will Close Venues, Kill Expansion

Chicago's One Fair Wage ordinance, which phases out subminimum wages for tipped workers by 2028, is met with concern from restaurateurs who anticipate the increased labor costs will hinder expansion, prompt relocations and potentially force closures. The ordinance aims to create more equitable wages but is predicted to disrupt the restaurant industry, with some owners exploring alternatives like automation and service charges to navigate the financial impact. Read more

DENVER

Central Denver Apartment Complex Trades For $111M

The Broadstone Kendrick, a luxury apartment community in Denver's Uptown neighborhood, sold for $111M. Built by Alliance Residential in two phases between 2021 and 2022, the 254-unit complex comprises two mid-rise buildings and over 187K SF of rentable space. Jackson Properties acquired The Kendrick as a long-term investment amidst a backdrop of notable unit absorption and ongoing developments in the Central Denver submarket. Read more

DALLAS-FORT WORTH

Industrial Vacancy In DFW Tops 8% As Construction Pipeline Unloads And Interest Rates Chill Deals

Dallas-Fort Worth's industrial sector is cooling as over 12M SF of new space completed in Q3 and another 58.4M SF is pending, the largest construction pipeline in the nation. With companies pausing due to uncertain interest rates, leasing activity has slowed, exacerbating the area’s rising vacancy issue. Despite the slowdown, several large deals were completed. Net absorption reached 8.5M SF, lagging behind last year's 10.5M SF. Read more

Brokers Demand Closer Look At Landlords' Books

Office tenants are scrutinizing landlords' financials amidst market upheaval, with landlords now more open to sharing financial documents. The shift, dubbed the "flight to capital," sees tenants leaving properties if landlords can't prove financial stability. Brokers are advocating for stronger lease terms and ensuring tenant improvement funds are secure, especially as interest rates rise and office maturities loom, potentially impacting landlords' ability to uphold TI obligations. Read more

New CEO Named For Plano-Based Office Developer Granite Properties

Senior Managing Director Will Hendrickson will succeed founder Michael Dardick as CEO of Granite Properties starting Jan. 1. Dardick will continue as executive chairman. Hendrickson, who has been with Granite since 2003 and led various significant developments, will work alongside other promoted leaders, including Paul Bennett, Bill Brown and Jason Purvis, in various roles to continue delivering quality office spaces. Read more

HOUSTON

Houston Real Estate CEO, Lawyer Named In $15M Fraud, Racketeering Suit

Jetall Capital CEO Ali Choudhri and others face a federal lawsuit alleging involvement in a scam causing over $15M in damages, related to a dispute over a Houston Heights condo building. The suit claims fraudulent activities, racketeering, bribery and theft. The complex litigation involves numerous defendants, multiple jurisdictions and allegations of illicit recordings discussing the scheme. Read more

Houston Office Hits All-Time-High Vacancy Amid Statewide Slump

Houston's office vacancy rate hit a record 26.4% in Q3, with older assets largely contributing to the figure. Despite job growth and the leasing of new construction, a significant drop in leasing activity led to 956K SF of negative absorption. Read more

Opportunity Knocks: Why A Family-Owned Houston Firm Is Snapping Up Old Office And Paying Cash

Houston-based Tenant Managers is strategically purchasing older office properties with cash, aiming to own 1M SF of Houston office space by year-end. Despite the city's record 26.4% office vacancy rate, the firm, which recently acquired two 1980s-era office buildings, sees value-add opportunities in such assets and intends them to be generational investments. Read more

LOS ANGELES

Construction Begins On Tesla's Diner, Drive-In And Charging Station On Santa Monica Boulevard

Tesla is developing a unique project on Santa Monica Boulevard near West Hollywood, replacing a former Shakey's Pizza Parlor. The new establishment will feature a diner, drive-in theater and a charging station for Tesla's electric vehicles. The design resembles a classic diner and will offer charging facilities for 30 cars. Additionally, a drive-in movie theater is included in the project's blueprint. The project has been on Tesla founder Elon Musk's radar since at least 2021. Read more

Gov. Newsom Signs Major Emissions Bill Amid Cost, Compliance Concerns

Gov. Gavin Newsom has signed SB 253, a climate bill impacting numerous businesses in California. The bill mandates companies with over $1B annual revenue operating in California to publicly disclose all greenhouse gas emissions from their operations and supply chains. The California Air Resources Board is tasked with developing these regulations by January 2025. Companies will begin compliance in phases from 2026. While Newsom recognized the bill's significance, he expressed concerns about its implementation deadlines and potential financial burdens on businesses. Read more

Industrial Vacancies Climb In The Inland Empire With New Supply Hitting Market

The Inland Empire, one of the U.S.'s largest industrial markets, is witnessing a rise in industrial vacancies, signaling a market rebalance. Vacancy rates range between 4.6% and 5.2%, a significant increase from rates around 1.5% a year ago. Factors contributing to this shift include a surge in construction deliveries and an increase in sublease space. Leasing activity has decreased by about 25% year-over-year, and construction has slowed due to rising costs and decelerating rent growth. The market is transitioning back to pre-pandemic norms. Read more

Contractors Suing Brookfield For $6M For Work At Downtown LA Buildings

Contractors have lodged 13 complaints against Brookfield in the Los Angeles County Superior Court over mechanic's liens on Downtown LA buildings owned by Brookfield entities. The contractors allege they are owed $6M for services rendered. A significant portion of these claims are associated with the 777 Tower at 777 South Figueroa St. and the EY Plaza at 725 South Figueroa St. Brookfield's Downtown properties have faced challenges, including a default on over $784M in loans earlier this year. Some tenants are also named in the complaints against Brookfield. Read more

MIAMI

Waldorf Astoria Supertall Developer Acquires Wynwood Site

A 1.1-acre assemblage in Wynwood Norte, Miami, traded for $20M, and is expected to be developed into condos. The property, which includes nine apartments and vacant lots, was acquired by a trust led by Ryan Shear of Property Markets Group. The sellers, Wynwyn 29 LLC managed by Alexander Karakhanian of Lndmrk Development, and the buyers are forming a partnership for the condo development. No plans have been filed yet, but the zoning allows for a mixed-use development of up to 12 stories. Read more

Miami's Pandemic-Era Office Boom Is Over, But There's No Sign Of A Bust

Miami's office market has stabilized after a pandemic-era boom, with 588K SF of leasing activity in Q3, maintaining the pace from the first half of the year. However, activity is down 39.8% compared to the first three quarters of 2022 as new-to-market tenants shift from headquarters relocations to establishing smaller corporate outposts. Financial firms continue to establish regional offices in Miami, and while new-to-market leases have decreased, the majority of deals are coming from tenants already in the market who are renewing or extending leases. Read more

Retail Specialist SRS Expands Push Into Industrial With New Miami Office

SRS Real Estate Partners is expanding into the industrial brokerage sector with a new Miami office, led by Wayne Schuchts and including Andrew Lehrer and Michael Palmer. The team will focus on leveraging the firm's retail expertise into the warehouse and distribution space, with plans to enhance capabilities in various Florida locations and make a significant impact in the state. Read more

Miami Developers Pitch 2 New Office Towers Totaling More Than 500K SF

Two new office towers are proposed in Miami’s urban core: a 636-foot-tall office tower near Midtown Miami and a 20-story tower on the edge of the Design District. The Miami Urban Development Review Board will review the plans, which include significant office space, parking and additional amenities like retail space and restaurants, in an upcoming meeting. Read more

NEW YORK CITY

How NYC Developers Are Using 'Wink-Wink' Creativity To Add Housing As Pipeline Shrinks

NYC developers are exploring unconventional methods to add housing amidst a decline in development, utilizing zoning law loopholes and considering areas outside the five boroughs. Strategies include utilizing "wink-wink home offices" and exploring areas outside the city, as developers navigate challenges like expired government subsidies and high construction costs. Read more 

SL Green Declines To Renew Contract Of Longtime President

Andrew Mathias will conclude his 17-year tenure as president of SL Green, a major New York office landlord, as the company opts not to renew his contract expiring at the end of 2023. Mathias will continue to serve on SL Green's board and advise CEO Marc Holliday. Read more

Landlords Claim MTA Lowballed Them In Eminent Domain Seizure For Second Avenue Subway

Harlem property owners have filed claims against the Metropolitan Transportation Authority, alleging underpayment for sites acquired through eminent domain for the Second Avenue subway line extension. The MTA has officially taken ownership of the sites, but the owners' lawsuit could potentially slow development. Read more

New York City Apartment Rents Finally Dip After Months Of Record Highs

NYC residential rents experienced a slight decrease in September, though they remain significantly above pre-pandemic levels. Various boroughs witnessed rent reductions, with Manhattan, Brooklyn and Queens experiencing a 1%, nearly 4% and nearly 9% drop from August, respectively, while still maintaining higher rates than the previous year. Read more

PHILADELPHIA

After PREIT Trustee’s Sudden Death, Disgruntled Shareholders Make Their Move

Following the sudden death of PREIT trustee JoAnne Epps, a group of shareholders is demanding to choose her replacement, threatening legal action. Amidst PREIT's looming debt maturity and financial challenges, the shareholders seek transparency and assertive action to safeguard the company's assets. Read more

Pennsylvania Industrial Rents Stall Out As Leasing Market Finally Normalizes

Pennsylvania's industrial markets, particularly in the Lehigh Valley and Central and Northeast Pennsylvania, have experienced a slowdown. Rent growth dropped to 1.4% in Q3 across the I-81/I-78 region, with vacancy exceeding 5% for the first time since early 2022. Amidst a slowdown in construction deliveries and a dramatic increase in sublease availability, the construction pipeline has dwindled, reflecting a more normalized leasing market after years of robust growth. Read more

A Mixed-Income Housing Proposal Lays Bare Frustrations With The Philly Land Bank Board

The Philadelphia Land Bank board's handling of a proposal to sell 75 city-owned lots in Norris Square to developer Riverwards Group has sparked controversy and frustration among various stakeholders. Amidst community opposition, board attendance issues and procedural delays, the proposal, which involves creating a mix of market-rate and affordable housing, has been deferred. Read more

SAN FRANCISCO

Palo Alto Office Property Trades For Whopping $2K Per SF

A Palo Alto office building has been sold for almost $2K per SF, showcasing the strength of Silicon Valley’s office market amidst reduced activity in areas like downtown San Francisco. The Douglas Living Trust purchased the 30K SF building at 2555 Park Blvd. from Kenson Ventures LLC for $58M, even though the entire building is available for sublease. The high purchase price contrasts starkly with other recent deals in the region and underscores Palo Alto's position leading the market in average direct asking rents. Read more

Falling Prices Make Conversions More Palatable In S.F., But Regulations Still Pose Challenges 

San Francisco's discounted office sales could facilitate more office-to-residential conversions, but developers face regulatory hurdles. While the city's planning rules could ease processes, developers need costs per door to decrease significantly to make conversions viable. Comparisons are drawn to New York City's successful conversions in the 1990s and 2000s, highlighting potential paths forward. Read more

WASHINGTON, D.C.

National Zoo-Adjacent D.C. Apartment Complex Sells For $66M

The Connecticut Plaza Apartments, a four-building complex adjacent to the National Zoo, has been sold to StoneBridge Investments by National Development for $66M. The 1927-built property was renovated in 2020 and is set to undergo further upgrades under the new ownership, which cited the asset's "irreplaceable location" as a key attraction. Read more

Josh Harris-Backed Fitness Chain Opens First Prince George's County Gym In Former Toys R Us

Onelife Fitness opened its first Prince George's County location in a former Toys R Us in Clinton, Maryland, marking the fitness chain's 29th establishment in the DMV area. The 55K SF facility, part of the 221K SF shopping center The Landing at Woodyard, will feature a range of amenities including a saltwater lap pool and a stadium-style spin studio. Onelife Fitness plans three more area openings in the next six months. Read more

Federal Government's Real Estate Head To Depart

Nina Albert, commissioner of the General Services Administration's Public Buildings Service that oversees the federal government’s more than 350M SF real estate, is set to depart after two years. She is succeeded by Elliot Doomes, GSA National Capital Region administrator. Albert's tenure was marked by efforts to reduce the federal office footprint, especially amidst pandemic-induced remote work trends, and she played a pivotal role in various significant federal agency headquarters moves and footprint reductions. Read more

Bowser Taps Nina Albert To Lead D.C.’s Economic Development, Planning

Nina Albert, the departing head of the federal government's real estate portfolio, has been appointed D.C.'s next deputy mayor for planning and economic development. Albert, who previously served as head of real estate for WMATA, will oversee housing and economic development efforts, including major acquisitions, renovations and large-scale development initiatives across the city's portfolio, which includes over 157M SF of land and 35.7M SF of real estate. Read more

Trade Group Signs 2-Floor Lease At 655 New York Ave.

The American Chemistry Council is relocating from Union Station to Mount Vernon Triangle, signing a 93K SF lease across two floors at 655 New York Ave. NW. The move brings 200 employees to the new space in the 762K SF project, which was delivered in 2019 and combines 19 historic building facades with a new 11-story office tower. The ACC’s new location is closer to the White House, symbolizing its advocacy for chemistry’s role at high government levels. Read more

JBG Smith Sells Development Site Near Nationals Park Approved For Over 600 Units

JBG Smith has sold a 76K SF development site near Nationals Park to WC Smith for $29.5M, after obtaining approval for a mixed-use project but failing to secure financing for construction. The site, which was previously home to a 7-Eleven, is approved for over 600 units across two phases. WC Smith intends to proceed with the development, although it has not yet secured development financing. Read more