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11 Midweek Must Reads for Real Estate Investor (Nov. 8, 2023)

Commercial and multifamily mortgage originations fell 49% year-over-year in the third quarter, reported the Mortgage Bankers Association. New construction is pushing down apartment rents in some cities with large pipelines, according to Bloomberg. These are among today’s must reads from around the commercial real estate industry.

  1. WeWork Is Bankrupt. Where Do We Go from Here? “It finally happened. After years of speculation, handwringing, and infusions of capital, coworking pioneer WeWork has entered bankruptcy, the culmination of one of the biggest destructions of value in real estate history.” (Bisnow)
  2. Commercial Real Estate Lending Plunged 50% Last Quarter as the Market Struggles to Get Out of its ‘Logjam,’ MBA Says “Commercial real estate lending nearly halved last quarter, a sign that uncertainty surrounding market conditions is continuing to hammer activity in the sector, according to the Mortgage Bankers Association. Commercial and multifamily mortgage origination plummeted 49% year-year-year over the third quarter, with new loan origination declining 7% compared to the second quarter of this year, according to data from the MBA.” (The Insider)
  3. Signature Loan Sale Likely to Lower Commercial Property Values “The sale of Signature Bank’s $33 billion in commercial-property loans and other assets is expected to attract bids as much as 40% below face value, offering new evidence of how much property prices have eroded. Regulators closed Signature Bank in March after a run on its deposits, marking the fourth-largest bank failure in U.S. history. Now, the Federal Deposit Insurance Corp. is auctioning off thousands of Signature loans backed by apartment buildings and other commercial properties primarily in the New York region. Bids are due Thursday on what is the biggest and most closely watched commercial-property sale of the year.” (The Wall Street Journal)
  4. Rents Are Falling in Some U.S. Cities, Thanks to New Apartment Construction “Renters in some of the fastest-growing US cities are finally getting some relief after a few years of dizzying increases as developers roll out droves of new apartments. The Boise City, Idaho metro area has seen rents drop 6.2% over the past year after the local supply of apartments increased by about 1,600 units, or 5.3%. That topped the average supply increase among US cities of 2.1%, according to data from rental property software provider RealPage Inc.” (Bloomberg)
  5. New Nonbank Regs and What They Might Mean for CRE Lending “In commercial real estate, financing has been tough as banks pull back from lending. Too many institutions have serious worries about what is happening in CRE. Property values keep dropping, transactions have plummeted with the lack of price discovery, and owners face hurdles in getting loans. Regulators have put a lot of attention on banks given the number of high-profile failures earlier this year. That’s helped put more of a chill on that route of lending.” (
  6. CRE Fears Are Overstated “Economic growth is powered by businesses that need real estate to build, innovate, and sell goods and services. Much of this commercial real estate is financed by banks, and some small portion of that bank-financed space is in office towers in large cities. Despite this fraction-of-a-fraction exposure, recent commentary (here and here, for example) has expressed fears that bank lending to CRE owners is building into a major problem.” (ABA Banking Journal)
  7. New Private Fund Adviser Rules: Prepare for Fee and Expense Reporting “Learn best practices to avoid common mistakes that investment advisors make when allocating fees and expenses to private funds with TaNeka Ray at EisnerAmper Compliance Desk as she interviews Louis Bruno, partner in the Regulatory Compliance Solutions Group, and Jeff Stomski, partner in the Financial Services Group. This video series covers SEC regulatory and compliance insights to help you navigate a changing regulatory landscape.” (EisnerAmper)
  8. Read the Email the CEO of WeWork Sent to U.S.-based Members as the Company Filed for Bankruptcy “On Monday, WeWork CEO David Tolley wrote an email to the company's US-based members, writing that WeWork spaces will continue with their operations and that their membership agreements will not be affected by the filing. He added the bankruptcy protection filing will allow WeWork to continue to restructure its financial position while continuing day-to-day operations. WeWork had no further comment apart from the Monday disclosures.” (The Insider)
  9. Your Next Airbnb Host Could Be a Private Equity Firm “Private-equity giant TPG has started buying single-family homes in Florida vacation markets, where it is renting them out nightly as alternatives to hotels and short-term rentals on websites like Airbnb. Other private-equity firms, publicly traded companies like Invitation Homes and many institutional investors have been active buyers of single-family homes for years, leasing their properties for a year or longer. TPG is the rare large investment firm to buy up homes expressly for the purpose of renting them out daily.” (The Wall Street Journal)
  10. Commercial Real Estate Turnover: Why Pros Leave—and What Comes Next “Waiting for Gotham’s commercial real estate market to turn around has felt a lot like waiting for Godot to arrive. And some brokers are tired of just killing time. From property management to proptech to brokerage, commercial real estate has seen a wave of departures this year — voluntary and otherwise. As employees are laid off or exit on their own, the cuts could cause an industry-wide brain drain and even put some companies out of business. And everyone’s wondering who will be left standing when the smoke clears.” (Commercial Observer)
  11. Most NYC Real Estate Owners Appear to Back Biden in 2024 “One year before the presidential election, many of New York City’s commercial real estate owners are either sticking with the nation’s incumbent chief executive or keeping their options open. To ask them why is to discover a set of property magnates unnerved by an exceptionally difficult economic climate and a world beset by grave crises. You might also find that they care a lot more about local and state politics than national.” (Commercial Observer)
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