- Real Estate Woes Weigh on Brookfield After December Spinoff “Brookfield Corp. undertook a major restructuring last year to try to get a better valuation. Concerns about office real estate are getting in the way.” (Bloomberg)
- U.S. Banks on Alert Over Falling Commercial Real Estate Valuations “Lenders increase provisions for losses on property loans as office values drop.” (Financial Times)
- ‘Frightening Tsunami’: Office Investment Nose-Dives in Q1 to Lowest Point Since 2010 “Investment in office properties across the country fell 68% in the first quarter to $10.7B, the lowest level since 2010 and an indicator of the degree of deep freeze property markets plunged into after their most challenging year in more than a decade. Sales of all property types declined, according to Colliers, citing new MSCI data. But in the face of rising interest rates, shriveled office demand and grave uncertainty about the direction of the economy, office trades fell furthest and fastest, with many owners selling for a loss as valuations dropped through the floor.” (Bisnow)
- Law Firm Head Bought Gorsuch Owned Property “For nearly two years beginning in 2015, Supreme Court Justice Neil Gorsuch sought a buyer for a 40-acre tract of property he co-owned in rural Granby, Colo. Nine days after he was confirmed by the Senate for a lifetime appointment on the Supreme Court, the then-circuit court judge got one: The chief executive of Greenberg Traurig, one of the nation’s biggest law firms with a robust practice before the high court. Gorsuch owned the property with two other individuals.” (Politico)
- ‘There Are No People Here’: S.F.’s $2.2 Billion Transit Center Remains an Empty Cavern “San Francisco's empty $2.2 billion Salesforce transit center is a microcosm of the city's fading downtown, which is having the slowest recovery among U.S. cities.” (San Francisco Chronicle)
- Staff Shortages Now Affecting 24% of Multifamily Owners, Managers, Survey Finds “Several parts of commercial real estate were permanently changed by the effects of the pandemic. Increasingly, it looks like property management is one of them. Almost half of multifamily owners and property managers find it either difficult or very difficult to hire new maintenance staff, while 45% find it either difficult or very difficult to retain workers once hired, a new survey from Parks Associates and GE Appliances found. Just under 25% of respondents reported being understaffed at the time they were surveyed.” (Bisnow)
- Banks aren't the only ones that hold risky commercial-real-estate debt. Pension funds are about to feel the pain, too. “But while banks hold about half of all US commercial-real-estate debt, there are other big holders that are starting to feel the pain, especially over holdings of office properties suffering from the rise of remote or hybrid work schedules. Among them are the large pension funds, REITs, and insurance companies, together accounting for more than $1.2 trillion — or 22% — of the $5.62 trillion in total commercial-real-estate debt outstanding, according to BofA Global Research.” (Insider)
- Large offices in major US cities are the most at risk in commercial real estate “Office buildings in central metropolitan areas have been the hardest hit by losses in occupancy since the pandemic as more employees work from home. By contrast, suburban offices, and medical offices in particular, have been less impacted, especially in smaller American cities, Goldman Sachs Research analyst Caitlin Burrows writes in the team’s report. Newer office properties in central business districts have been the most insulated from occupancy losses, she writes.” (Goldman Sachs)
- Google Said To Have Hit Pause on Largest Real Estate Project “The Silicon Valley company's plans for an 80-acre campus situated around Diridon Station, a major transit hub located on the western edge of downtown San Jose, California, are on hold after completing the first demolition phase, a significant setback for what would have been a decade-long commitment to investing in the city's growth.” (CoStar)
- Manhattan Office Tenants Save Big at Pricey Towers as Concessions Mount “Landlords listed roughly 13.4 million square feet of Manhattan office space at asking rents above $100 per square foot in 2022, the most in a single year since 2016, according to CBRE data. The first quarter of 2023 saw 28 deals with starting rents of $100 per square foot or more, above the five-year quarterly average of 25 deals, though a 12.5 percent slip from the fourth quarter’s total.” (Commercial Observer)
- Will luxe amenities get workers back to the office? Owners say, ‘Yes’ “Every morning, a worker’s swipe into the buildings also creates an entry for the nearly weekly drawings for ducats to owner suites at concerts and football games.” (New York Post)
- Bed Bath & Beyond’s Demise Creates Fresh Opportunities, Retail Landlords Say “Demand for big-box space in open-air shopping centers remains strong despite rising interest rates, and plenty of other retailers are waiting in the wings to fill the spaces vacated by Bed Bath & Beyond, several real-estate executives said. New tenants will in most cases pay higher rents, too, these property owners say.” (The Wall Street Journal)
- How the shopping mall is transforming “COVID-19 and attendant measures such as lockdowns kept shoppers confined to their neighbourhoods. It also accelerated a trend that’s transforming the face of retail: Hybrid working has become a permanent feature of modern-day work, which means people are spending more time at the home office and shopping locally.” (JLL)
- Commercial real estate loans in core Europe face $55 billion funding gap, report says “Around one in five loans backing commercial real estate (CRE) in Britain, France and Germany that fall due between now and 2025 are likely to face refinancing challenges given higher interest rates, real estate management firm AEW said on Tuesday.” (Reuters)
- The ‘Dark Store’ Threat to Property Tax Revenues “Some big-name chain-store operators, including Walmart, Lowe's, Target and the Midwest’s Meijer, have been suing their local governments for lower property taxes on the premise of a controversial legal argument called the ‘dark store' theory. Localities are fighting back, but there's a need for stronger legislation to protect tax revenues.” (Governing)
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