- The 11% Yield That Isn’t in Your Mutual Fund “Competitive yields are tough to find in the stock market these days. For investors who aren’t averse to risk, business development companies offer an exception. BDCs typically raise money from public stock investors that they then lend to small, often private, companies. After banks pulled back from lending in the wake of the 2008-09 financial crisis and again in March following the collapse of a handful of midsize lenders, BDCs helped fill the void. They give individual investors the opportunity to tap in to high-yielding private markets that are usually only open to big, sophisticated institutions.” (The Wall Street Journal)
- Yardi, 18 Real Estate Firms Accused of Rent-Fixing in Class Action Lawsuit “Yardi Systems and 18 property management companies were named in a federal class-action lawsuit accusing them of engaging in a scheme to fix apartment rents across the country. Seattle-based law firm Hagens Berman alleged in the suit that Yardi and the property management firms used Yardi’s RENTmaximizer tool to eliminate competition by automating rent increases. The suit alleges that the use of Yardi’s tools created a cartel of organizations that leveraged the tool to raise rents across their properties while keeping vacancies low.” (Bisnow)
- A Mall Owner’s About-Face: Bet on America’s High-End Malls “The European owner of Westfield malls is pulling back from its aggressive plan to sell nearly all its properties and exit from the U.S. market this year, another vote of confidence for the high-end mall business. Unibail-Rodamco-Westfield said last year that it planned to shed most of its American portfolio by the end of 2023. Now, the Paris-based company intends to hold some of its top-performing malls beyond that self-imposed deadline. Chief Executive Jean-Marie Tritant told investors this summer that ‘our strong operational performance gives us flexibility on when we’ll execute’ future sales. Europe’s largest mall operator still plans a ‘radical reduction’ of its American exposure, Tritant said.” (The Wall Street Journal)
- Citi’s Family Office Clients Are Hunting for Direct Investments “Citigroup Inc.’s family office clients are continuing to hunt for direct investments in private markets as they target bargains amid a shifting macroeconomic landscape. More than half of investment firms for the world’s super-rich are looking for opportunistic direct deals based on attractive valuations, Citi found in a survey of 268 family offices representing $565 billion in net worth. Technology, real estate and health care were the most popular sectors for these investments, which involve buying directly into a company or asset rather than investing through a fund or other intermediary.” (Bloomberg)
- Construction Starts Continue to Slip in August “The momentum in the construction sector has continued to dip, according to Dodge Construction Network’s latest report. For August, the Dodge Momentum Index dropped by 6.5 percent to 178, down from July’s revised reading of 190.3. According to the report, the commercial side of the Dodge Momentum Index dipped 1.6 percent, while the institutional sector saw a far steeper decline of 14.8 percent. The month saw a decline with the education, health-care and amusement sectors, leading to the major decline in the overall institutional sector’s momentum. The commercial side’s relatively smaller drop can be attributed to strong hotel planning making up for the weak activity in the office sector.” (Commercial Property Executive)
- Multifamily Rents Poised for Robust Increases Further Ahead “For the past three years the multifamily sector has experienced a construction boom not seen since the 1970s, which has helped lead to the current moderation of rents. However that may be about to change. According to a new report by Greg Willett of Institutional Property Advisors, rents could resume an upward path by spring 2024, with ‘robust’ increases in 2025. A slowdown in early stage multifamily building showed up in 2Q 2023, with starts in key markets falling slightly.” (GlobeSt.com)
- California Lawmakers Vote to Increase Housing in Cities Falling Short of Construction Goals “California lawmakers approved legislation to expand a law allowing developers to quickly build housing in cities falling behind on construction goals.” (Los Angeles Times)
- GPIF’s Search for a New Real Estate Boss is a ‘Top Priority’ “Japan’s Government Pension Investment Fund is actively hiring for a new head of real estate, a role that has been vacant since April this year. The world’s largest pension fund, which has $1.4 trillion in total assets, is looking for a senior investment professional with significant experience in both Japanese and overseas real estate markets, particularly in North America and Europe, according to a LinkedIn post by Yoshitaka Todoroki, managing director at GPIF’s private market investment department and head of private equity and infrastructure.” (PERE News)
- Adam Neumann in Talks to Lease at Former WeWork Building “As WeWork seeks to exit hundreds of leases, the very person who roped the firm into those deals has been looking to pick up space formerly leased to the co-working firm. A court filing reveals that in June, former WeWork wonderboy Adam Neumann was in talks to lease space at 88 University Place in Manhattan. The negotiations appear to have been between Neumann’s family office and the building’s landlord, Arch Companies, for the 11th floor.” (The Real Deal)
- Pandemic Population Boom in Rural Hotspots Sparks Resentment “Rural America is booming, but the population growth that’s boosting local economies is also putting a strain on everything from schools to housing and roads. The influx — which started during the pandemic — has continued even as Covid restrictions have lifted. The latest government data released just last month points to a second year of increases in 2022 after years of declines. The trend is sparking resentment as house prices in the top 10 rural counties that have seen the biggest population increases surging more than 40% over the past three years.” (Bloomberg)
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