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13 Must Reads for Real Estate Investors to Kick Off the Week (June 12, 2023)

Lenders on office assets are doing everything they can to avoid taking the keys on properties and working on extension and modification agreements, reports Bisnow. Don Peebles sat down with Commercial Observer to discuss how far Black real estate development has come. These are among the must reads from around the real estate investment world to start the week.

  1. ‘The Writing Is On The Wall’: Office Lenders May Have To Go All-Out Ahead Of Mass Surrenders “Traditional lenders like banks would prefer to extend and modify terms so borrowers can keep holding their properties until refinancing options become available once again. Yet borrowers must decide if those properties are worth the cost of owning them through 2025, when industry predictions say financing and leasing environments will improve.” (Bisnow)
  2. Don Peebles Discusses How Far Black Real Estate Development Has Come “During the organization’s 10th anniversary celebration on June 9, Peebles took time to speak with Commercial Observer, shortly after U.S. House Minority Leader Hakeem Jeffries and New York Gov. Kathy Hochul addressed the group at the Harvard Club in Midtown Manhattan.” (Commercial Observer)
  3. The Massey Knakal mafia “To make a comparison to the NFL, if Massey Knakal were a head coach, it would have a coaching tree to rival Bill Belichick or Bill Walsh. Indeed, the former building sales firm that was purchased by Cushman & Wakefield in 2015, counts no fewer than a dozen spinoffs or investment sales/divisions that are run by 18 MK alumni.” (The Real Deal)
  4. A Puzzle in Arizona’s Boom Towns: How to Keep Growing With Less Water “The upheaval was caused by a new state study that found groundwater supplies in the Phoenix area were about 4 percent short of what is needed for planned growth over the next 100 years. That may feel like a far-off horizon, but it is enough of a change to force the state to rethink its future in the near and long terms.” (The New York Times)
  5. Blackstone’s Perry Says PE Investors Lack Cash for New Funds “Private equity investors are struggling to make new commitments to funds because they’ve found themselves already over-allocated to the asset class and with less available capital on their hands, according to Blackstone Inc.’s Verdun Perry.” (Blackstone)
  6. Hotel Owners Start to Write Off San Francisco as Business Nosedives “Now, a growing number of San Francisco hoteliers are signaling they may be ready to give up. In recent months, the owner of the city’s Huntington Hotel sold the property after facing foreclosure and the Yotel San Francisco hotel sold in a foreclosure auction. Club Quarters San Francisco, which has been in default on its loan since 2020, may also be headed to foreclosure, according to data company Trepp.” (The Wall Street Journal)
  7. A Comprehensive Comparison of Top U.S. Real Estate ETFs “In this article, we will compare the three largest U.S. real estate ETFs by market capitalization: Vanguard Real Estate ETF (VNQ), Schwab US REIT ETF (SCHH), and Real Estate Select Sector SPDR Fund (XLRE). These funds can offer investors the opportunity to invest in a diversified portfolio of real estate assets with lower expenses and greater liquidity than investing in individual properties.” (VettaFi)
  8. 7 PREIT board members required to tender their resignations after lack of shareholder votes “The seven board members are PREIT Chairman and CEO Joseph Coradino, Temple University Interim President JoAnne Epps, George Alburger, Michael DeMarco, Mark Pasquerilla, Charles Pizzi and John Roberts.” (Philadelphia Business Journal)
  9. ‘We deserve more’: hotel workers vote to authorize strike in California “The workers at major US hotel employers, including Hyatt, Hilton, Highgate, Accor, IHG and Marriott, are pushing for a $10-an-hour wage increase, affordable family healthcare, retirement pensions and safe workloads and staffing levels as hotels throughout the industry have used the Covid-19 pandemic to cut staffing levels and increase workloads, such as eliminating daily guest room cleaning.” (The Guardian)
  10. Investors Are Bearish This Year: DLA Piper “For only the third time since DLA Piper has conducted its annual State of the Market Survey, a majority of the commercial real estate executives responding—86 percent—reported a bearish outlook for the year ahead.” (Commercial Property Executive)
  11. The Real-Estate Market Caught in a Tangled Web of Ownership and Debt “The market is Sweden, which has become an emblem of the strains caused when interest rates rise. Major commercial landlord SBB is buckling under a roughly $8 billion debt load, while billions of dollars have been wiped off the market value of its competitors.” (The Wall Street Journal)
  12. Landlords in panic about last-minute Albany bill “The measure seeks to make it easier for tenants to show past rent overcharges amounted to fraud, which would lead to huge payouts for violations committed years ago — even by previous owners.” (The Real Deal)
  13. PGIM, Cantor Fitzgerald CEOs Predict Huge Wave Of Deed-In-Lieu Deals, Foreclosures In Office “Tenants' flight to quality has left 60% of U.S. office inventory in purgatory, Hunt told Bloomberg. Buildings losing value with maturing loans are facing capital markets that aren't just more expensive for borrowing — many lenders simply won't originate new office loans at all.” (Bisnow)
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