Editors’ Weekly News Roundup January 22 – January 26
The old maxim that real estate is a regional business remains true to this day, but news of regional interest can also resonate with audiences outside the region. As a case in point, three of the five most-read Connect CRE news stories for the week ending Jan. 27 were local reports that drew national attention.
The two most-read stories, though, were national in scope. The results of the National Multifamily Housing Council’s latest quarterly survey of apartment market conditions were a mixed bag. That good news/bad news dichotomy was reflected in the headline of our top story for the week, NMHC: Debt Financing Outlook Improves as Other Sales Metrics Weaken.
Prevailing conditions in multifamily metrics—declining rent growth and rising vacancies—underpinned the results of NMHC’s survey. Although the Debt Financing index came in at 66—rising for the first time in nine quarters—the Market Tightness (23), Sales Volume (34) and Equity Financing (44) indexes all came in below the breakeven level of 50.
The week’s second most-read story also told a relatively positive story when it comes to commercial real estate debt. The Mortgage Bankers Association, whose annual meeting focused on CRE finance takes place next month in San Diego, predicted that 2024 will be a more active year for lending than 2023 ended up being.
MBA Forecasts 29% Rise in CRE Loan Volume for 2024reported that the association believes we’ll see $576 billion of loans this year, compared to $444 billion in 2023 and a previous estimate of $559 billion for 2024. However, MBA noted that this doesn’t represent a complete recovery to pre-pandemic norms in borrowing and lending.
Readers in both New York City and across the U.S. made a breaking news report headlined RXR, Ares Launch $1B Fund to Buy Distressed Manhattan Officeour third most-read story for the past week. The two companies, which have seeded the fund with a combined $500 million, believe that a prolonged paralysis in an office market frozen by uncertainty about interest rates and the threat of remote working is now lifting. They’re targeting “the upper quartile of that middle, class-A part of the market,” according to RXR CEO Scott Rechler.
Another regional story, Amazon Buys 140 Acres in Prince William for $152M, also drew readership outside of the Washington, DC region to rank fourth. In this case, the intended use isn’t building another fulfillment center for consumer goods, but data storage. The acquisition was made on behalf of Amazon Data Services, the e-commerce giant’s data center arm.
Texas is clearly an enormous CRE market, both for its four largest metro areas and the state overall. It’s a market that draws many outside investors, developers and corporate tenants, which helps explain why a Texas-centric story rounded out the top five.
Retooled Texas-Sized Tax Break Takes Effectwas widely read in the Lone Star State and beyond. It told of the Texas Jobs, Energy, Technology & Innovation Act, which expanded the scope of a widely used and widely criticized school tax abatement program to provide more revenue to schools. Its predecessor, known as Chapter 313, helped secure major projects such as the billion-dollar Tesla gigafactory in Travis County and Samsung’s chipmaking plants in Austin and Taylor.
Looking beyond the confines of daily news coverage, our Weekender mailing has launched a new series. This one focuses on the challenges that confronted the capital markets in 2023 and what to expect in the future. You can find the first in the series here.