Editors’ Weekly News Roundup January 15 – January 19

We believe the current downturn will provide many opportunities to lend to and acquire office debt and invest in buildings at a low basis.Chad Carpenter, CEO, Reven Office REIT

The office sector dominated the headlines in Connect CRE this past week. A story from our Weekender newsletter that also went out in a standalone mailing was the most-read Connect CRE story for the week ending Jan. 20. Reconsidering the State of Office: Separating Reality from Headlines summed up our five-part Weekender series that looked beyond gloom-and-doom reports to put the sector’s challenges into perspective. 

Readers of “Reconsidering the State of Office” saw that the widely propagated “doom loop” theory is a myth, at least for now, that not all office classes and properties are struggling and that the specter of coming debt maturities isn’t the bogeyman it’s often made out to be. 

The current state of office was also the basis of the week’s second most-read story, Hybrid Work Spurs Rethink of Office Space Design. With 90% of global occupiers surveyed by CBRE offering hybrid work schedules to employees, office tenants are leasing less space and reconfiguring their spaces to meet the requirements of onsite employees in the post-pandemic era. 

Although office may be far down the list of investment opportunities for Rockpoint, the Boston-based real estate private equity firm nonetheless has plenty of dry powder to direct toward a variety of commercial real estate sectors. Readers of Rockpoint Raises $5.1B in Latest Funding Round learned how much the firm has raised, what types of investors contributed to the funding and where the capital will be deployed. The story was our third most-read of the past week. 

At week’s end, two CRE finance veterans were in the news for a new venture aimed at … you guessed it, office. Ethan Penner, Chad Carpenter Launch Office Finance REITwas the past week’s fourth most-read story, drawing attention both in California and nationally. 

Using the Reven platform as a springboard, Penner and Carpenter intend to raise $1 billion, through a lead investor and a blind pool IPO, to provide office owners and investors with bespoke financing solutions. It’s a market they believe is rife with opportunity, given that nearly $150 billion of office loans will mature by the end of this year. 

Considering headlines like the one in the fifth most-read story, office owners are likely to welcome the new financing source. Fannie Mae to Exit HQ Lease Five Years Early, another story with both regional and national readership, reported that the GSE will exit its 720,000-square-foot space in Washington, DC’s Midtown Center by May 2029, rather than vacate (or renew) in the fall of 2033, the original expiration date for the 15-year lease Fannie Mae began in 2018. 

For owner Carr Properties, the early departure of Fannie Mae represents quite a space giveback—not to mention a sizable headache—in an uncertain office market. It’s hard to predict what the office market will look like in 2029; in fact, it’s considerably more difficult than it would have been to forecast five years out prior to the pandemic.

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About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 16-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 7-10 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and GlobeSt.com at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications. Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).