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Nine Must Reads for CRE Investors Today (March 15, 2023)

The Real Deal looks at what’s happening with real estate customers of Signature Bank. A new report from CBRE indicates that a drop in commercial property values might not last long. These are among today’s must reads from around the commercial real estate industry.

  1. Uncertainty Grip Signature Bank’s Real Estate Customers “Signature Bank’s real estate customers were left with more questions than answers Monday as they tried to figure out how to do business after regulators took over the troubled multifamily lender. Withdrawing deposits, drawing down loans and replacing letters of credit are among the issues borrowers and depositors are facing after the Federal Deposit Insurance Corporation took the bank into receivership Sunday. ‘In the short term there’s going to be a lot of dislocation and fear of the unknown,’ said Cozen O’Connor attorney Ken Fisher, who has a personal bank account with New York-based Signature and represents many of the bank’s real estate borrowers and depositors.” (The Real Deal)
  2. Blackstone, Apollo, KKR Eye SVB Assets “Investment giants Blackstone, KKR and Apollo Global Management are reportedly interested in acquiring loans held by Silicon Valley Bank, which was seized by regulators on Friday, representing the second-largest bank failure in U.S. history. The exact scope of their interest in SVP's loan portfolio isn't clear yet, Bloomberg reports, citing unnamed sources. All together, SVP has $73.6B in loans on its books, including $2.6B of CRE loans. It also owns an investment securities portfolio containing $1.3B in qualified affordable housing projects and $14.4B in agency-issued commercial mortgage-backed securities.” (Bisnow)
  3. Opportunity to Buy Assets at Lower Prices Might Not Last for Long “Both interest rate hikes and cap rate expansion will peak later this year and should decrease in 2024. As a result, today’s opportunity to buy assets for lower prices may not last very long, according to CBRE’s H2 2022 Cap Rate Survey. The survey was conducted in mid-November and December and reflects second-half 2022 deals. More than 250 CBRE real estate professionals participated. Spencer G. Levy, global client strategist & senior economic advisor, CBRE, said in prepared remarks that the rapid rise in interest rates over the past year has had consequences.” (
  4. Sunbelt Traffic Jams Are Frustrating Drivers and Threatening Growth “In most U.S. cities, traffic is less congested than it was in 2019, as fewer people commute to offices, according to mobility data company Inrix. In some Sunbelt cities, such as Miami, Nashville and Las Vegas, where the population has surged in recent years, it has become worse. These cities also attracted more companies and tourists during the pandemic. Local roads, built decades ago for a much smaller population, are struggling to accommodate the new reality.” (The Wall Street Journal)
  5. The Return of the Downtown Office Worker “While more than half of America’s workforce continues to ply their trades at home for at least part of the week, Monday-through-Friday traffic counts in U.S. downtowns in February indicate that their office time is on the rise. A report from Springboard, a provider of shopper traffic counting and artificial intelligence to retailers, found that retail traffic in American cities went up by 30.6% at breakfast time and 19.2% at lunch time compared to February 2022.” (Chain Store Age)
  6. Whole Foods, Other Grocery Stores Are Hot Property “Global real-estate investment manager Hines is paying $112 million for a suburban New York shopping center featuring a Whole Foods, the largest grocery-anchored retail sale in the U.S. since September. The sale of the 262,000-square-foot property in White Plains, N.Y., shows how demand for grocery-store complexes persists, despite rising interest rates and slowing activity for other property types. These outlets have become increasingly attractive as the pandemic winds down and consumers return to shopping in person.” (The Wall Street Journal)
  7. As California’s Student Housing Crisis Deepens, Solutions Face Roadblocks at UC and Elsewhere “Litigation blocking student housing projects, a potential delay in state funding and escalating construction and labor costs are posing formidable challenges to easing what students say is one of their most urgent needs. An estimated 417,000 students lack stable places to sleep, according to surveys conducted across the three systems, amounting to 5% of undergraduates at the University of California, 10% at California State University and 20% at California Community Colleges.” (Los Angeles Times)
  8. Colleges Showcase Mass Timber, in Research and On Display “Mass timber, an engineered wood product that offers durability and sustainability benefits, has become increasingly prominent at colleges across the country, where it is included not only as a concept in the curriculum but also as a material in campus buildings.,Experts say universities are helping to increase awareness of mass timber — layers of wood bonded with glue or nails — by demonstrating its potential as a low-carbon alternative to steel and concrete.” (The New York Times)
  9. Homeowners Who Held On to a 3% Mortgage Are Becoming Accidental Landlords “99% of borrowers have a mortgage rate lower than 6%, according to Goldman Sachs, and some are choosing to rent out their homes instead of selling.” (Fortune)
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