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10 Midweek Must Reads for Real Estate Investors (Nov. 22, 2023)

Japan’s government pension fund is investing $1 billion in funds managed by Brookfield and Blackstone, reported Bisnow. Private investors have been increasingly focusing on retail real estate in recent months, according to JLL. These are among today’s must reads from around the commercial real estate industry.

  1. Office Landlords Can’t Get a Loan Anymore “Many banks are trying to reduce their exposure to the struggling office sector, and the easiest way to do that is to not issue any new loans. Insurance companies also lend less, and borrowing from bond markets means accepting much smaller loans at much higher rates, leaving landlords with too little money to pay off their old loans, said Michael Gigliotti, co-head of the New York office at brokerage JLL Capital Markets. ‘It’s very hard to get done,”’ he said. Selling buildings to pay back mortgages is also tough because prices are down and buyers can’t get loans, either.” (The Wall Street Journal)
  2. World’s Largest Pension Fund Backs Brookfield and Blackstone with $1B Debut Real Estate Investment “Japan’s Government Pension Investment Fund is putting $1B into real estate funds managed by Brookfield and Blackstone, the first time it has invested in real estate funds. GPIF has $1.4T (£1.1T) of assets under management and is the world’s largest pension fund, investing on behalf of Japanese employee pension schemes.” (Bisnow)
  3. Houses Too Expensive to Buy Underpin Lofty Rents “Big public companies that rent out single-family homes are beating the rest of the rental market this year, thanks to tenants who are paying large rent increases on the sorts of homes they increasingly can’t afford to buy. Landlords Tricon Residential, Invitation Homes and AMH, which together own about 180,000 rental homes, each posted rent increases greater than 6% for the third quarter over the same period a year prior. That was about twice as much as the average increase for rental homes in September, compared with the same month last year, according to separate indexes from data firm CoreLogic and online-listing company Zillow.” (The Wall Street Journal)
  4. For Many Real Estate Investors, Liquidity Is ‘Outside of Our Control’ “Having capital to redeploy into new opportunities has been a major challenge for all types of institutions, delegates heard at PERE America.” (Pensions & Investments)
  5. How WeWork’s Lease Rejections May Raise Costs for New York City Office Owners “WeWork's lease rejections could have potentially negative tax implications for the landlords of those buildings.” (New York Business Journal)

  6. Why Private Investors Are Shopping for Retail Real Estate “Investment in retail has for most of the past decade been dominated by institutional investors. But in recent months, private investors have been increasingly getting in on the act, with a greater share of investment in retail real estate now in the hands of private capital and family offices, according to JLL data. Private capital’s share of overall investment in retail across EMEA more than doubled between the middle of 2022 and mid-2023 to 15%, according to JLL data. At €1.76 billion (US$1.88 billion), investment by private capital in retail was at its highest for a six-month period since 2019.” (JLL)
  7. WPG Secures $1 Billion in Mortgage Financing “WPG, the owner of 80-plus malls and open-air centers that filed for bankruptcy in 2021, has made a deal that it claims re-establishes it as a top-tier retail real estate operator. The Columbus-based company--formerly known as WP Glimcher, and then Washington Prime Group after it split from Simon Property Group--has announced the closing of a $1 billion securitized mortgage financing. Investment firm Strategic Value Partners involved Goldman Sachs, Citi, and JPMorgan Chase in the deal that is collateralized by 38 open-air centers across 15 states.” (Chain Store Age)
  8. Workforce Housing Exempt from Fannie, Freddie Lending Limits in 2024 “The federal agency overseeing Fannie Mae and Freddie Mac is responding to rapid rent growth in recent years by encouraging the development of workforce housing. The Federal Housing Finance Agency will exempt workforce housing loans in 2024 from the lending limits it imposes on the government-sponsored entities. Fannie and Freddie will be capped at $70B each of multifamily lending next year for all other properties, a combined $10B below 2023 levels.” (Bisnow)
  9. Economic Conditions Ideal for a Sale-Leaseback Strategy “In today’s higher interest rate costs, for the first time in many years, there’s a condition where the financing alternative of sale-leaseback is superior to the borrowing options that a company might have, according to Alan Pontius at Marcus & Millichap. The firm’s senior vice president and national director of industrial, and healthcare divisions, speaking on a company news video, said the borrowing rate for the leaseback, or the cap rate, is many times less than the corporate borrowing rate, or the business borrowing rate.” (
  10. Renters Are Getting More Perks as Increased Construction Adds to Housing Market Supply “More rental listings are offering sweetened deals, as an influx in freshly constructed properties gives prospective tenants more options. Zillow said 30% of rental listings now offer at least one concession, up from 24% a year ago. They include perks like free months of rent or parking. While rent is still going up, the greater prevalence of concessions may be a signal that rent growth is about to level off, Zillow said.” (Insider)
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