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13 Must Reads for Real Estate Investors Today (May 8, 2023)

The largest commercial real estate brokerage firms reported quarterly losses and forecast more struggles ahead, reports Bisnow. Bain Capital is raising a $4 billion special situations fund that aims to invest in a range of assets, including real estate. These are among the must reads from around the real estate investment world to end the week.

  1. 5 Of 6 Of The Largest CRE Brokerages Posted Losses In Q1 “With steep declines in transaction volumes and leasing and a ballooning sense of economic uncertainty stacked against them, five of six top real estate brokerage firms posted net losses in the first three months of this year. Many firms voiced expectations that the worst is yet to come, anticipating these troubling conditions and their effects on the industry would persist for longer than previously predicted.” (Bisnow)
  2. Banking on uncertainty, tensions are high in real estate “Barry Sternlicht, the Starwood Property Trust chairman, had some choice words for the Federal Reserve’s decision to hike interest rates another 0.25 percent. ‘The government is completely screwed up,” he said on the REIT’s first-quarter earnings call Thursday.’” (The Real Deal)
  3. The Case for U.S. Core Real Estate “For more than 40 years, diversified U.S. core real estate has delivered consistent, competitive income returns, created long-term value appreciation and reduced portfolio risk.” (CBRE Investment Management)
  4. Bain Capital Seeks to Raise $4 Billion for New Global Special Situations Fund “As part of the new strategy, Bain Capital has adopted more flexibility on deploying capital and is investing in a range of asset classes, including equity, distressed assets, loan portfolios, corporate investments, and real estate.” (Reuters)
  5. TPG Is In Talks to Buy Credit, Real Estate Firm Angelo Gordon “TPG Inc. is in talks to acquire investment firm Angelo Gordon, which would be its first major foray into credit investing since separating from Sixth Street three years ago, according to people with knowledge of the matter.” (Bloomberg)
  6. The Regional Bank Selloff Visualized “Each bank experienced a reduction in deposits during the first quarter. As the Fed continued raising interest rates this year, many customers moved their money out of checking accounts and into products such as money-market funds and Treasurys, which are paying greater yields.” (The Wall Street Journal)
  7. CMBS Sputters in 2023 But Experts See Value Across Broader Commercial Real Estate Sector “Deutsche Bank research indicates that CMBS issuance has dropped by 83 percent so far this year to $9 billion. While this accounts for only around 11 percent of the estimated $20.7 trillion commercial property market, CMBS serves as an essential indicator of the financial health of hotels, office buildings, apartment buildings, shopping malls, and other income-producing real estate.” (The Registry)
  8. The Eternal City “Just as the ancient Romans believed they had created an ‘eternal city’ that would last forever, city governments, architects, and planners today strive for the same outcome. What can we add into the development formula of our cities that will create a resilient city that can stand the test of time, the next pandemic, and weather the episodic changes in the marketplace?” (Urban Land Institute)
  9. The dollar’s drop in value and its impact on real estate “To say it differently, a well-capitalised, well-positioned asset in major gateway cities will hold and even see an increase in value because foreign demand is incentivized by the discount arbitrage caused by the low currency exchange rate. However, it’s never clear cut and properties will suffer from the expansion of cap rates and higher cost of capital.” (Private Banker International)
  10. Ex-Banker Amasses $1.9B for Distressed Asset Wagers “Brazil’s company joins a wave of money managers now piling into private markets as investors seek alternative sources of returns in an uncertain economic environment. BlackRock Inc. said last month investors including pension funds, family offices and insurers are set to boost allocations to private equity and private credit this year, despite recession fears and rising interest rates.” (Mergers & Acquisitions)
  11. Once China’s Richest Man, Wang’s Mall Empire Is Now in Trouble “Dalian Wanda Group, owned by billionaire Wang Jianlin, failed to list its mall operator unit for a third time since 2021 after its latest application expired. The company may have to repurchase about 30 billion yuan ($4.3 billion) of equity from pre-IPO investors if a listing doesn’t take place by the end of 2023, according to a letter posted on the website of the China Securities Regulatory Commission.” (Bloomberg)
  12. Farm Sector Real Estate Debt Hits Record High “New data from USDA’s Economic Research Service shows farm sector debt tied to real estate is expected to be at a record high of $375.9 billion in 2023. Farm sector real estate debt has been increasing continuously since 2009 and is expected to reach an amount that is 87.5 percent higher in 2023 compared with 2009 in inflation-adjusted dollars. Real estate debt now far outpaces debt that is not secured by a mortgage.” (Southeast AgNet)
  13. Commercial Real Estate Interview Prep With ChatGPT-4: A Step-By-Step Guide “Preparing for a commercial real estate job interview can be a daunting task, but with the right tools and guidance, you can effectively practice and refine your interview skills. In this blog post, we’ll outline how to use the following comprehensive interview simulation prompt with ChatGPT to help you practice and prepare for your upcoming commercial real estate interview.” (A.CRE)
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