- Amazon HQ2 Is Not Matching the Original Hype. The Economy Is Partly to Blame. “In March, Amazon announced it was delaying a second phase of the project as it cuts costs company-wide. The company says it is still committed to employing 25,000 people and spending $2.5 billion on the site — half the original plan — but it can’t say when that will happen. ‘I think when you’re looking at delivering this much square feet of space over multiple years, there’s a great understanding that there’s always times of flex when you can deliver, and the timeline of projects,’ said Holly Sullivan, Amazon’s vice president for worldwide economic development.” (CNBC)
- Brookfield Dealing with Debt Issues at 8 Shopping Malls “Brookfield is facing financial distress at eight of its shopping mall properties, including a North Jersey mall on the verge of foreclosure. The firm's Woodbridge Center mall in North Jersey is going through the foreclosure process after defaulting on its $225M loan, The Real Deal reported.” (Bisnow)
- Eviction Filings Are 50% Higher Than Pre-Pandemic in Some Cities as Rents Rise “After a lull during the pandemic, eviction filings by landlords have come roaring back, driven by rising rents and a long-running shortage of affordable housing. Most low-income tenants can no longer count on pandemic resources that had kept them housed, and many are finding it hard to recover because they haven’t found steady work or their wages haven’t kept pace with the rising cost of rent, food and other necessities.” (The Associated Press)
- Real Estate Investor Bell Partners Raises $1.3 Billion to Snap Up U.S. Apartments “Bell Partners, a real estate investor and property manager, has raised $1.3 billion for a new fund to buy and upgrade apartments at a time when prices for many commercial properties are falling amid higher borrowing costs. The Value-Add Fund VIII will seek to acquire as much as $3.2 billion in properties in 14 target metro areas, including Atlanta, Austin, Boston, Dallas, Denver, Los Angeles, Orlando, San Francisco and Seattle, according to a statement Tuesday.” (Bloomberg)
- Return to Office Enters the Desperation Phase “For tens of millions of office workers, it’s been three years of scattershot plans for returning to in-person work — summoning people in, not really meaning it, everybody pretty much working wherever they pleased. Now, for the umpteenth time, businesses are ready to get serious. A wave of companies called workers back to the office this spring and summer: Disney said four days a week, Amazon swung with three (prompting a walkout from corporate workers), Meta and Lyft are aiming for September deadlines for many of their employees. Others devised new tactics to ensure their return-to-office policies stuck.” (The New York Times)
- Wall Street Sours on America’s Downtowns “Investors’ dimming view of downtowns isn’t good news for cities’ finances, nor for their residents. It puts under strain some of city governments’ traditional ways of extracting wealth: collecting property taxes on office buildings, taxes on wages earned within city limits, and fares from office workers’ commutes. Residents of some cities are bracing for austerity. Many New York library branches expect to close an additional day each week under cuts proposed as the city faces rising labor costs and budget gaps projected to reach $7 billion in 2027. From New York to Chicago to San Francisco, residents and visitors complain about empty downtown streets and transit stops that have become way stations for the mentally ill and homeless.” (The Wall Street Journal)
- Comptroller Brad Lander Admits He Was Wrong on Hudson Yards “Hudson Yards has for years been a punching bag for progressives. They called it a giveaway to Big Real Estate, a bad risk for taxpayers and a billionaires’ playground. When the pandemic set the project back, they called it karma. So it was surprising, even shocking, when City Comptroller Brad Lander — successor to Bill de Blasio as the city’s top elected progressive — openly admitted the Bloomberg administration was right about Hudson Yards’ public financing scheme. It’s not just working, but working better than anticipated — even after the development was slammed by Covid.” (The Real Deal)
- The Office-to-Industrial Conversion Trend Is Here “By the numbers, it’s understandable: More owners of office buildings that aren’t cutting it in these hybrid times are converting their properties, and industrial is becoming a popular option. In a report earlier this year, brokerage Newmark (NMRK) found that 15.2 million square feet of offices nationwide had been converted to industrial use, a 33.7 percent increase in just two years. And, at the end of 2022, the firm found that the U.S. vacancy average for industrial properties was 3.8 percent, versus 18 percent for office properties.” (Commercial Observer)
- Construction Lawsuits Are Rising as Pressure Rises to Accelerate Projects “Construction contracts are landing in court more often — and at higher dollar figures — than ever before, as runaway costs and pressure to build faster have led to a spike in disputes. The average value of construction disputes in North American courts was $42.8M at the end of 2022, up from $30.1M the prior year, the highest value ever recorded and double the averages between 2016 and 2019, according to a study released by the engineering consulting firm Arcadis.” (Bisnow)
- Trump Real Estate Deal in Oman Underscores Ethics Concerns “Mr. Trump has been selling his name to global real estate developers for more than a decade. But the Oman deal has taken his financial stake in one of the world’s most strategically important and volatile regions to a new level, underscoring how his business and his politics intersect as he runs for president again amid intensifying legal and ethical troubles. Interviews and an examination by The New York Times of hundreds of pages of financial documents associated with the Oman project show that this partnership is unlike any other international deal Mr. Trump and his family have signed.” (The New York Times)
- Jonathan Litt Warns About a Section of Commercial Real Estate Space He Thought Was Bucking the Trend “Activist Investor Jonathan Litt, Land and Buildings Founder and CIO, joins ‘Fast Money’ to discuss his new call on Alexandria R.E., the state of San Francisco’s real estate market, and more.” (CNBC)
- Is Delaware Statutory Trust Right for You? “A DST is generally preferable to a TIC, since there are perceived weaknesses and difficulties in financing a TIC. For instance, a TIC is limited to 35 investors and requires a single member LLC for each TIC investor, which requires lender financing for each of the TIC investor entities. With a DST, on the other hand, there is one loan, and the lender does not need to underwrite each beneficial owner. Furthermore, a TIC action requires a unanimous vote, whereas in a DST there is centralized management as the beneficial owners have no right to vote, which eliminates the concern that a single investor can hold up the process and other matters.” (Commercial Observer)
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