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13 Must Reads for CRE Investors Today (Jan. 19, 2023)

Rent-to-own startups are facing headwinds in the current market, reports Commercial Observer. European investors are cutting allocations to real estate according to the latest INREV survey. These are among today’s must reads from around the commercial real estate industry.

  1. Rent-to-Own Startups Confront Rising Demand and Dwindling Asset Values “Spiraling housing prices, surging mortgage rates, and buyers saddled with student debt — the already gloomy homeownership picture for young adults has, somehow, gotten bleaker in the recent downturn.” (Commercial Observer)
  2. It looks like people are actually moving back to San Francisco (really) “Over the last 12 months, San Francisco has seen the second-biggest worker population gain of any area in the United States, according to LinkedIn. The January data, which measures when people update their locations in their profiles, showed that for every 100,000 LinkedIn users, 83 moved to San Francisco in the last 12 months. The workers largely came from Los Angeles, Dallas-Fort Worth, and Washington DC.” (Vox)
  3. ‘It’s a safe bet’ to expect pain in private real-estate funds, says TCW’s Brivanlou “Brivanlou, a lead portfolio manager of TCW’s global REIT products, now expects the performance of public and private funds to converge following last year’s rout, but potentially with less extreme downside for private funds.” (Marketwatch)
  4. European investors cut allocations to real estate -survey “Thirty-seven percent of European investors intend to reduce their exposure, compared with 20% of North American and 5% of Asian Pacific investors, according to an INREV survey of 82 investors with nearly 800 billion euros ($867.84 billion) in assets under management.” (Reuters)
  5. Broker Takes Swing at Combining His Passion for Real Estate, Baseball and Statistics “Marketing what they do and where they’re doing it is essential to their success, especially during economic slowdowns. Knakal created his baseball card at a time when investment sales activity is expected to drop off further because of rising interest rates and tighter access to the capital needed to make real estate transactions work.” (CoStar)
  6. Student-housing sees record-shattering transaction volume at 2022 year-end “Student housing has set an all-time high in transaction volume for 2022 with an annualized total of $18.9 billion, significantly surpassing the previous year-end high of $11.5 billion in 2021.” (RE Journals)
  7. Washington lawmakers want to curb "bonkers" rent hikes “Two proposals introduced Tuesday at the state Capitol both aim to cap rent increases so that landlords in Washington couldn't raise rent by more than the rate of inflation in most cases.” (Axios)
  8. As Signature severs crypto arm, CRE lending to suffer “To offset those declines, Signature said it would need to pare its lending portfolio by $5 billion to $10 billion. The move seeks to keep the bank’s net interest margin, a measure of profitability, healthy.” (The Real Deal)
  9. Will CRE Construction Hold Steady in 2023? “Despite current headwinds, nonresidential construction spending is expected to increase at a moderate rate this year, mostly due to healthy architect and contractor backlogs, according to a new forecast from the American Institute of Architects.” (Commercial Property Executive)
  10. Rents Up, Availabilities Down In Manhattan Retail As Recovery Strengthens “Retail in the city had been in a period of decline before the pandemic arrived. Large swaths of vacancy have been rife in many parts of the city, and even well-capitalized franchises have been affected — retail chains have declined by 14.4% since 2019, according to a December report by the Center for an Urban Future.” (Bisnow)
  11. W South Beach Owners Sue Each Other Over Failed Buyout “Aby Rosen’s RFR sued Tristar (now called Tricap) in New York Supreme Court, one week after David Edelstein’s Tristar sued RFR in Miami-Dade County, each claiming that the other had breached an agreement where Tristar would buy out RFR’s interest in South Florida Mezzanine Investors, a jointly owned entity that indirectly owns the hotel.” (Commercial Observer)
  12. Party City Files for Chapter 11 Bankruptcy With Plans to Cut Debt “The Woodcliff Lake, N.J.-based company filed for chapter 11 on Tuesday with a deal with creditors holding roughly 70% of over $900 million in senior secured first-lien notes. The creditors agreed to support an expedited restructuring and to convert their debt to equity.” (The Wall Street Journal)
  13. Husband charged with murder of Tishman Speyer exec “Prosecutors previously said surveillance footage from Jan. 2 showed Brian Walshe at a Home Depot purchasing $450 of cleaning supplies such as mops, tarps and a bucket. He paid in cash and was wearing a surgical mask and gloves.” (The Real Deal)
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