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The Bisnow Weekender: How Will Baltimore Ever Recover? Let’s Ask The Mayor

National
National
May 23, 2024 Mark F. Bonner, Editor-in-Chief

Thanks for reading the Bisnow Weekender, my personally curated roundup of the most impactful news, notable quotes, binge-worthy show recommendations and other colorful highlights from the Bisnow world of commercial real estate and beyond. 

It was nearly 60 days ago that tragedy struck Baltimore. 

An errant cargo ship carrying thousands of containers bound for Sri Lanka slammed into the Francis Scott Key Bridge, bringing down the 1,200-foot structure into the Patapsco River. 

The incident killed six construction workers and dumped a fresh challenge on a city that was already trying to claw its way back from the economic fallout wrought by the pandemic.

Though the vessel has now been removed, and the largest channel yet was cleared for 24/7 shipping traffic just this week,  the port remains a shadow of its former self — millions in daily economic activity have yet to return. The city’s cruise line tourism will finally return this weekend, but the city still faces the perception that it is not open for business.

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Unsplash/Denise Bossarte

The new bridge will cost up to $1.9B and take until at least 2028 to open. And while the governor continues to push for federal legislation that would cover the full cost of the bridge, the psychological and political burden of lifting Baltimore out of its economic malaise falls on the shoulders of the youngest mayor ever elected in city history: Brandon Scott.

On Friday, I spoke to the mayor during Bisnow's Building A Stronger Baltimore webinar. In a wide-ranging interview, we discussed how the families of the victims are faring, the perception and reality of where the city stands in its recovery, how the mayor is easing the pain of small businesses, what his pitch is to business leaders to come to his city and his recently released 10-year plan to revitalize downtown Baltimore. 

You can watch the interview here.

— Mark F. Bonner, Bisnow Editor-in-Chief

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Voices From The CRE Battlefield

 

The Best Of Bisnow News: May 20 - May 24

How Real Estate Became Hooked On Interest Rate Cuts — UK Editor Mike Phillips

It almost seems that the modern real estate industry doesn't know how to transact unless interest rates are falling or historically low.

As inflation stayed persistently high and the investment market remained on ice, real estate investment volumes were subdued in the first quarter, the low figures of 2023 bleeding into the start of 2024. 

“Everybody's waiting for [Federal Reserve Chairman Jerome] Powell to relent,” Starwood Property Trust CEO Barry Sternlicht said earlier this month.  

But it hasn't always been this way. And in an industry with assets totalling $34T, some are questioning why its players feel they can’t function unless central bankers are making favorable policy.

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The Music Has Stopped For Once-Booming Real Estate Crowdfunding Platforms — Deputy East Coast Editor Jon Banister and Atlanta Reporter Jarred Schenke 

The once-booming sector is facing its first major downturn since federal laws changed in 2012 to allow developers to solicit small investments online, a move that spurred the creation of platforms like CrowdStreet, Cadre, YieldStreet, RealtyMogul, RealCrowd, Fundrise, Small Change and EquityMultiple.

Crowdfunding syndication jumped from $7B in 2019 to $15B in 2020 and $17B in 2021, according to crowdfunding consultant Adam Gower. The real estate syndication industry, of which online crowdfunding is a part, saw similar growth: Syndicators raised more than $115B from investors between 2020 and 2022, The Wall Street Journal reported last year.

But the number of offerings on these platforms has dropped precipitously. A Bisnow analysis found that among the five largest online commercial real estate crowdfunding platforms, none have more than a handful of current active offerings for investors.

This drop has created a crisis for crowdfunding platforms, said Ian Ippolito, an active crowdfunding investor and the founder of the Real Estate Crowdfunding Review.

“I don’t see how they can stay in business because they make money off fees from listing deals,” Ippolito said. “If they’re not listing deals, they can’t continue on.”

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Nvidia’s Record Earnings Show More Runway For AI Data Center Boom, Shifting Demand — Data Centers Reporter Dan Rabb

Data center operators and tenants are buying more chips than ever, which means the already massive wave of investment in developing new facilities to host this computing power will continue to grow. But Nvidia’s Q1 numbers also reflect an evolution of the AI demand landscape that is driving changes, both in which companies are pursuing new data center capacity and where those data centers will be built. 

“The next industrial revolution has begun,” Nvidia CEO Jensen Huang said on its earnings call Wednesday. “Companies and countries are partnering with Nvidia to shift the trillion-dollar installed base of traditional data centers to accelerated computing and build a new type of data center, AI factories, to produce a new commodity, artificial intelligence.”

More Big News From The Week …

— Local Banks Making Moves To Reduce Risk From CRE Loans

— Is Big Pharma’s Patent Cliff A Launchpad Or Fall-Off For Lab Real Estate?

— Developers Forced To ‘Invent The Wheel’ To Meet Ballooning Data Center Energy Needs

— With UK Election Confirmed For 4 July, Here Is Labour’s New Town Policy Explained

— Hamptons Businesses Abandon Year-Round Dreams

— ‘A Minority Within A Minority’: Chicago's South Asian CRE Community Refuses To Be Overlooked

My Slightly On/Off-Topic Media Diet

The Lesson Of The Great American Boom (FT): “And so we are left to conclude something not about America, but about politics itself. People like me, who find the subject intrinsically interesting, overrate its importance. As long as a few essential functions of state are never compromised — physical security, contract enforcement, tax collection — it matters less than we think whether public life is ‘divisive’ or even foul. An economy can’t withstand too much bad policy. It can’t prosper against over-tight interest rates or underfunded education. But the health of the overall political system can go very wrong, for very long, without anything like the same effect on real-world livelihoods.”

Majority Of Americans Wrongly Believe U.S. Is In Recession – And Most Blame Biden (The Guardian): “So even though economic data, like GDP, implies strength in the economy, there’s a stubborn gap between the reality represented in that data — what economists use to gauge the economy’s health — and the emotional reality that underlies how Americans feel about the economy. In the poll, 55% think the economy is only getting worse. Some have called the phenomenon a ‘vibecession,’ a term first coined by the economics writer Kyla Scanlon to describe the widespread pessimism about the economy that defies statistics that show the economy is actually doing OK.”

The Surprising Reasons Thunderstorms Are More Destructive Than Ever (WaPo): “But a more significant influence on the rising storm damage trend has little to do with the weather: Growth and development patterns mean there are many more homes and businesses in the way of tornadoes, hail and damaging winds than there were decades ago.”

Why Is Mississippi The Way That It Is (Economics Explained): “This is Mississippi, and there's no real delicate way to put this, it's the worst state economy within the USA … Mississippi has a per capita GDP higher than all but 21 countries, roughly in line with Germany, and it would be difficult to say that Germany isn't a productive country. But while this might make the good people of Mississippi feel a little bit better, this headline economic indicator doesn't really translate. Even though the average person in Mississippi is just as productive as the average person in Germany, the majority of people are poorer, leading to the problems that are usually associated with the economy, even if it's doing quite well on paper.”

The 15-Hour Workweek Was Standard For Nearly All Of History. What Happened? (History Unplugged Podcast): “There’s nothing in human DNA that makes the 40-hour workweek a biological necessity. In fact, for much of human history, 15 hours of work a week was the standard, followed by leisure time with family and fellow tribe members, telling stories, painting, dancing, and everything else. Work was a means to an end, and nothing else.”

This Isn’t Your Father’s Marijuana Use (Washington Monthly): “At the nadir of modern marijuana use, in 1992, just 0.9 million Americans reported using marijuana daily or near daily. That number had grown twenty-fold to 17.7 million by the most recent survey in 2022. For the first time, more Americans report using marijuana daily or near daily than they do drinking that often (17.7 million vs. 14.7 million).”

 

Bisnow Weekend Interview Preview

When Melvalean McLemore earned her license to practice architecture in 2016, she was only the 16th Black woman in Texas ever to do so. Late last year, McLemore became the first Black woman president of the American Institute of Architects Houston chapter, an honor she is proud of despite being “a little bit sad to hear that someone is the first of anything in 2023, 2024.” 

In this week’s Weekend Interview, Bisnow Houston Reporter Maddy McCarty sat down with McLemore to chat about how she fell into architecture, the projects she is passionate about and her intention to bring more Black women into the industry, ensuring her own success is less noteworthy going forward. 

Bisnow: How do you feel that working at Moody Nolan, a Black-owned firm, has supported your career path?

McLemore: It was really important to be able to see a variety of experiences and see the quantity of Black women in leadership being able to plug themselves in in different ways at Moody Nolan. When firms have diversity and representation of all kinds of groups, it’s an ultimate value-add for our clients. We can address problems differently. We can support them differently. And it's very meaningful.

The Weekend Interview goes live every Friday evening — head to www.bisnow.com over the weekend to check it out!

Jobs! Jobs! Jobs!

Here are this week’s top jobs over at Bisnow's careers platform, SelectLeaders. Reach out to SelectLeaders Managing Director Ryan Neale to learn more. You can email him at ryan.neale@bisnow.com. 

Executive Director — Provide strategic and thought leadership for ULI LA, guiding its program of work for the future.

Chief Financial Officer — Oversee all aspects of financial operations, with a focus on supporting commercial real estate acquisitions and investment.

Associate Vice President of Investments — Lead real estate investments, financial analysis and underwriting for ground-up rental developments, adaptive reuse and residential alternatives across the Sun Belt and East Coast.

Senior Vice President — Lead strategic planning to maximize the performance and value of a substantial CRE investment portfolio.

Hey, Katharine, What Are You Going To Binge This Weekend?

I just returned from a trip to Europe where I had a joyful reunion with a friend I’ve known for years. More than 15 years had gone by since we’d last seen each other, but it was as if no time had passed. We’ve promised to keep the conversation going for good this time, and to that end, I am working hard to improve my rusty French and consuming a lot of French-language TV series. One I really enjoyed is workplace comedy Call My Agent (or Dix pour cent for the Francophiles), which features a who’s who of celebrities, from Juliette Binoche to Sigourney Weaver, acting as slightly exaggerated versions of themselves. This weekend, I am planning to catch up on the second and third seasons of the excellent Lupin. Omar Sy is pretty much the coolest gentleman thief ever. Other than plugging foreign series on Netflix, I’ll be tending to my overgrown landscaping. Long vacations are amazing for humans. Not so much for grass and trees.

 — Katharine Carlon, Central Editor

Upcoming Bisnow Events And Webinars

Wednesday, May 29 (Frederick, Maryland): Exploring Frederick County

Wednesday, May 29 (Chicago): Chicago Retail, Entertainment, Sports and Tourism

Thursday, May 31 (Coral Gables, Florida): The Future of Coconut Grove and Coral Gables

Thursday, May 31 (King of Prussia, Pennsylvania): The Future of Philadelphia Suburbs

Thursday, May 31 (Seattle): Life Sciences Conference

Thursday,  May 31 (Jersey City, New Jersey): Jersey City Spring Cocktail 

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How did I do? You can send all love letters and dissents directly to me at mark.bonner@bisnow.com. 

Contact Mark F. Bonner at mark.bonner@bisnow.com
Related Topics: Brandon Scott, Mayor Brandon Scott, Bisnow Weekender