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10 Must Reads for the CRE Industry Today (Oct. 26, 2022)

Propmodo looks at why a lawsuit involving a JLL-brokered office lease might be important for all real estate brokerages. Kotaku examines a new landlord video game. These are among today’s must reads from around the commercial real estate industry.

  1. Inflation-Driven Record Rents Mean More People Are Piling In With Roommates “After a long stretch of record-high rents, Americans are renting fewer apartments. Some are choosing to take on roommates, while others are boarding with family or friends. More people are opting to stay longer in their parents homes’ or moving back in, rather than pay the steep rent increases many are experiencing, according to a recent UBS survey. Shonda Austin, a home healthcare worker, and her three children moved into her mother’s house in Flint, Mich., this month after facing a 24% rent increase in Las Vegas.” (The Wall Street Journal)
  2. Apartment Transaction Volume Falls 17% in Q3 as Cap Rates Decline YOY “Apartment deal volume fell 17% year over year to $74.1 billion in the third quarter, according to the most recent Capital Trends report from MSCI Real Assets, a firm that provides tools and services for the global investment community. Without Blackstone’s $13 billion deal to take Austin-based student housing provider American Campus Communities private, sales volume would have slumped even more. The third quarter posted the second-highest volume for entity-level transactions, trailing only the $20.1 billion tallied in the fourth quarter of 2007.” (Multifamily Dive)
  3. Home Buyers’ Focus on Affordability Drives WSJ/ Housing Index “Rising mortgage rates have made most home purchases less affordable and pushed many buyers out of the market. Existing-home sales dropped for eight straight months through September. Homes are sitting on the market longer, and more sellers are cutting prices. Buyers’ focus on affordability benefited Johnson City. The metro area’s median listing price was $379,000 in September, up 27% from a year earlier, according to, while median list-price growth nationwide was 14%.” (The Wall Street Journal)
  4. Inside the JLL Lawsuit That Every Real Estate Brokerage Is Watching “In 2018, an office lease in Washington, D.C. was brokered by JLL. The deal was rather unextraordinary. It was the type of deal that may have garnered a few headlines here and there, ending up in weekly transaction columns, but nothing that would draw any special interest. But, four years later, what happened between JLL, the tenant, and the landlord is at the center of a huge legal battle, one that many major real estate brokerages and professionals are paying close attention to.” (Propmodo)
  5. Facebook’s Manhattan Campus Takes Space “Since Facebook’s blockbuster lease of 730,000 square feet in 2020 at the Farley Building, Manhattan’s old general post office, a lot has changed, starting with the company’s very name. In that time, Facebook founder and leader Mark Zuckerberg decided that it wasn’t enough to have the top social media site, fueling a compulsive need for multiple generations to post happenings in their own lives, and to follow the lives of their friends, relatives and acquaintances. What once seemed a heroic effort almost became too easy.” (Commercial Observer)
  6. Home Prices Fell Even Faster in August, But Still Up Big Year-over-Year “Home prices fell sharply again in August according to the two leading home price indices, both released this morning.  The Federal Housing Finance Agency (FHFA) logged a month-over-month decline of 0.7%--a modest acceleration from the 0.6% decline seen in July.  The S&P Case Shiller 20 city index fell 1.3% in today's report compared to a 0.7% drop last month.” (Mortgage News Daily)
  7. Real Estate Makes Up Larger Share of NYC’s Tax Revenue Even Amid Value Reset “Real estate taxes have steadily become a larger and larger part of New York tax collections over the last eight years as the city faces a fiscal crisis. In the financial year ending 2021, real estate-related taxes made up 54.1% of tax collections, up from an average of 51.9% between 2015 and 2018, according to a new report from the Real Estate Board of New York.” (Bisnow)
  8. Remote Work’s Staying Power a ‘Major Shock’ to S.F. Government “Office usage has remained depressed in San Francisco for so long that city officials are trying to get a grasp on the severity of the problem and formulate a plan for how to manage the shifting landscape of the city's commercial activity going forward. A new report from the city of San Francisco called The Persistence of Pandemic-Era Remote Work lays out familiar data about the return-to-work effort, or lack thereof, and signals a first step by the city to deal with the longer-term implications of the trend.” (Bisnow)
  9. Illegal Cannabis Retailers Popping Up Like Weed “Smoke shops are a classic genre of the New York corner store, shoebox spaces where you can buy a soda, a bag of chips and a bong all in one place. But in just a few months, they’ve become some of retail’s biggest space takers after adding a lucrative new item to the menu: cannabis. While the state sputters toward opening its first legal dispensaries, smoke shops have become some of the most popular — if illegal — tenants in town.” (The Real Deal)
  10. The Tenants, a Landlord Video Game, Is Pure Fantasy “Do you enjoy playing video games as a form of escapism? As a place where you can leave the expected norms and rules of the real world behind and venture off into fantastical lands? If that’s you, then you might want to look into The Tenants. Recently released on PC, The Tenants is a management game where you play as a landlord, with the entire point being that you are constantly working on your buildings and interacting with tenants’ needs. Constructing improvements, fixing things, buying new furniture, and just generally making sure everything is fine and everyone is OK.” (Kotaku)
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