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11 Must Reads for Real Estate Investors to Start the Week (June 5, 2023)

CoStar looked at how Simon Property Group is repositioning some of its malls into mixed-use centers. Some U.S. banks are winding down their commercial real estate loan books even if they have to sell at a discount, reports Bloomberg. These are among the must reads from around the real estate investment world to kick off the new week.

  1. Here's One Way Simon Plans to Redevelop Malls Across the Country “Simon, based in Indianapolis, said ground has been broken and work started on a 167-room Residence Inn by Marriott at Northgate Station. Simon, which touted Northgate as the country's first regional shopping center, is in the process of transforming the property into a mixed-use hub that not only includes retail but hospitality buildings and apartments as well as office space.” (CoStar)
  2. US banks prepare for losses in rush for commercial property exit “HSBC USA is in the process of selling off hundreds of millions of dollars of commercial real estate loans, potentially at a discount, as part of an effort to wind down direct lending to US property developers, according to three people familiar with the matter.” (Financial Times)
  3. A Wall Street Titan Scores One of the Best Real Estate Trades Ever “Blackstone reaped billions because it figured out early that scruffy urban warehouses were a gold mine in the internet age.” (Bloomberg)
  4. Airbnb is suing New York City over short-term rental rules. The outcome could disrupt your next vacation in cities across the US. “On Thursday, Airbnb, along with a trio of local hosts, sued New York City, filing two separate lawsuits in Manhattan's state court. The suits claim the restrictions ‘will result in a drastic decrease in the number of listings in New York City and represent a de facto ban on short-term rentals,’ per a press release from the company.” (Insider)
  5. NAV Monitor: US office REITs end May with largest discount to NAV “Office REITs again traded at the largest discount to net asset value (NAV) at 57.7%. Of the 10 REITs on the overall biggest discount list, eight were office REITs.” (S&P Global)
  6. BREIT Redemptions Total $4.4 Billion in May; Says “Semi-liquid Structure” Working as Intended “The company noted that it has repurchased a total of $7.5 billion of common stock since proration began in November, and that a hypothetical investor who continually requested redemption since then would have received approximately 90% of their investment back and that ‘the semi-liquid structure is working as intended’ to prevent a liquidity mismatch and maximize long-term shareholder value.” (The DI Wire)
  7. A New Wave of Real Estate Pain Is Coming After European Rout “Roiled by rising borrowing costs and falling valuations that wiped out $148 billion of shareholder value, European landlords are bracing for a new wave of pain.” (Bloomberg)
  8. Foreign Investors Increasingly Capitalize on U.S. Real Estate Dislocation “Steelwave, which has built its reputation by creating unique, worker-attractive facilities for tech companies, has created a Bermuda-based fund with the goal of attracting sizable sums ($50 million for starters) from foreign investors for virtually risk-off profit making.” (Real Clear Markets)
  9. How David Zwirner Turned a Forgotten Block in LA Into Prime Real Estate “Zach Lasry first got involved with the neighborhood in 2019 and, despite his lack of experience in real estate development, started buying up buildings, intent on making a gallery hub in the City of Angels that would be that unimaginable thing: walkable. If he gets his wish, one day there will even be a hotel.” (Vanity Fair)
  10. Breed's proposed budget slashes funding for San Francisco landlord and tenant support groups “Tenant and landlord advocacy groups were shocked to find that that mayor wants to eliminate a major source of city funding.” (San Francisco Business Times)
  11. Real estate investor Matt Onofrio accused of bank fraud “Onofrio is accused of convincing buyers to purchase properties at inflated prices, while he had already bought them at lower prices. He would then help the buyers secure mortgages based on the higher prices and offer to cover the down payment himself, in exchange for monthly repayments with interest, allowing him to profit from the price difference and put the buyers at risk of financial strain.” (The Real Deal)
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