Editors’ Weekly News Roundup August 5 – August 9
Announced with relatively little fanfare, a package of separate but related transactions between Equity Residential (EQR) and Blackstone became last week’s most-read story on Connect CRE when we sent out a breaking news alert on the deal. Blackstone has been a large-scale buyer of apartment properties in the past year or so, but this time, the asset management giant was the seller.
Equity Residential Buying Blackstone Portfolio for Nearly $1Breported that Chicago-based EQR will acquire 11 properties across three markets where it intends to grow its presence: Atlanta, Dallas/Fort Worth and Denver. The $964 million that EQR will pay to various Blackstone entities represents pricing that’s “attractive compared to replacement costs,” said Alan Brackenridge, the REIT’s CIO.
If not for the EQR/Blackstone deal, a story out of the nation’s capital would have been the most-read story for the week ending August 10. Picking up from the Wall Street Journal, we informed Connect CRE readers that Fannie Mae and Freddie Mac are preparing to impose tougher requirements for commercial real estate lenders and brokers.
Among other things, readers learned in Fannie, Freddie Plan Stricter Rules for CRE Lenders and Brokersthatlenders would have to independently verify financial information related to borrowers for apartment complexes and other multifamily properties if the new rules were enacted. Driving this get-tough campaign were instances of alleged fraud based on doctored financials and valuations, according to federal regulators.
Two office-related stories out of California ranked as the third and fourth most-read Connect CRE stories of the past week. Following up on his recent announcement that X and SpaceX would relocate from the Golden State to Texas, Elon Musk set a timetable for X to quit San Francisco.
As reported in X Will Shut Down San Francisco Headquarters Within Weeks, that timetable calls for departure sooner rather than later. X’s predecessor, Twitter, was founded in San Francisco and the company has occupied as much as 800,000 square feet in the city’s Mid-Market district. San Francisco-based X employees will now report to offices elsewhere in the Bay Area.
The scene shifted from Northern California to Southern California for the week’s fourth most-read story. A Downtown Los Angeles office tower at 801 S. Figueroa, also known as the 801 Tower, has sold to a mystery buyer, a sale we reported in DTLA’s 801 Tower Trades Below Replacement Cost.
Eastdil Secured and Asia Pacific Capital represented the seller and buyer, respectively. The story drew readership locally and also nationally, via our biweekly Office newsletter.
Completing the top five was another story out of Washington, DC. In this case, though, the federal government was only reporting the news, not making it. The Federal Reserve’s latest Senior Loan Officer Opinion Survey on Bank Lending Practices found that a sizable percentage of banks had imposed more exclusionary criteria for commercial real estate loans in the second quarter.
Readers of Fed Survey: Banks Tightened CRE Lending Standards in Q2also learned that demand for CRE loans was weaker during the quarter. That lessening of demand applied more to domestic banks than foreign ones, though.
Tighter lending standards are seen as a challenge for owners facing loan maturities, and in some quarters this supports the belief that we’ll soon be seeing a wave of CRE distress. Marcus & Millichap’s John Chang doesn’t share that view, and he explains why in a Weekender story arguing against this scenario.