Editors’ Weekly News Roundup August 19 – August 23
The sound of the other shoe dropping could almost be heard in the background as Connect CRE readers perused the past week’s most-read story. We sent out a breaking news mailing on Wednesday with a story that originated on Connect CRE’s sister website, Connect Money.
U.S. Job Growth Revised Downward by 818,000: BLS reported that the Bureau of Labor Statistics had cut the average monthly employment gains over the past year from 242,000 to 174,000. Although benchmark revisions to the nation’s hiring record occur every year, this one resonated with markets and Federal Reserve watchers looking for any signs that the labor market is cooling quicker than previously indicated, leading to a long-awaited reduction in the federal funds rate. As if on cue, Fed Chair Jerome Powell told attendees at the Jackson Hole Symposium on Friday that “The time has come for policy to adjust.”
Another breaking news piece, this one reported by Connect CRE, was the second most-read story for the week that ended August 24. Wells Fargo and Trimont struck a deal that Trimont said would make it the largest commercial real estate loan servicer in the U.S., with a loan portfolio of $640 billion.
As reported in Wells Fargo Sells Non-Agency CRE Loan Servicing to Trimont, thepending sale is “consistent with Wells Fargo’s strategy of focusing on businesses that are core to our consumer and corporate clients,” said Kara McShane, the bank’s head of commercial real estate. Terms of the sale and the size of the loan portfolio Trimont is acquiring were not disclosed.
The origin of the past week’s third most-read story was a campaign event in Raleigh, NC by Vice President Kamala Harris, now the Democratic nominee for President. There, Harris and running mate Tim Walz introduced a proposal to boost housing production.
Much of the plan found favor with the National Association of Home Builders. However, readers learned in NAHB Applauds Harris Housing Proposal, with Reservationsthat the association had some qualms, particularly the lack of any mention of reducing “onerous” federal regulations that increase construction costs.
On the subject of building, Connect CRE’s fourth most-read story of the past week provided insights into the single-family rental/build-to-rent (SFR/BTR) market, courtesy of experts from one of the most active lenders in the space. Berkadia Managing Director Joel Kirstein and Senior Director Andrew Curtis, who will moderate an upcoming webinar, delved into the sector in a Q&A titled SFR/BTR Rent Growth Expected to Outperform.
The prospect of resilient rent growth was just one of the selling points for SFR/BTR that Kirstein and Curtis discussed. Favorable demographic trends also bode well for the sector’s near-term prospects, one reason that institutional ownership is expected to double.
KKR is among the institutional investors that have made inroads into another commercial real estate sector: industrial. Our fifth most-read story of the past week, KKR Snaps Up National Industrial Portfolio for $377M, detailed the New York-based investment firm’s latest foray into the sector.
The announcement from KKR didn’t disclose the seller or sellers of the six properties the company acquired. What is known is that the acquisition was consistent with previous industrial deals KKR has made. “We think high quality assets in infill locations near diverse demand drivers and accommodative labor forces will be increasingly difficult to reproduce in the coming years,” said KKR’s Ben Brudney.