Editors’ Weekly News Roundup, July 17th – July 21st

As the Federal Reserve nears the end of its tightening cycle, a small but growing share of respondents are finally starting to report a pickup in apartment deal flow.Caitlin Sugrue Walter, VP of Research  National Multifamily Housing Council 

The summer weather varied widely across the U.S. this past week, but the forecast in Connect CRE’s five most-read stories was generally cloudy with a chance of rain—or potential investment opportunities. At the top of the rankings was a Weekender story based on a McKinsey Global analysis, Report: Post-Pandemic Behavior Will Continue to Impact Cities’ CRE.  

McKinsey modeled various scenarios, all of which predicted that office and retail demand in urban core markets will continue to decline through 2030. The study offers suggestions to help improve demand in both sectors, so the gloomy outcome of the scenarios in the McKinsey report isn’t necessarily a foregone conclusion. 

The current outlook is less sunny than usual in the multifamily sector, too, as the National Multifamily Housing Council reported. Its latest Quarterly Survey of Apartment Market Conditions found that the four metrics indexed in the survey—market tightness, sales volume, equity financing and debt financing—all came in below the break-even level of 50.  

Our second most-read story, NMHC Reports Further Decline in Apartment Market Conditions, noted that the debt financing index in particular has now declined for eight consecutive quarters. A gap between buyers’ and sellers’ expectations for pricing was a key factor in the continued decline in sales volume reported by NMHC. 

However, a reluctant seller’s misfortune is a potential buyer’s opportunity, and a story out of Chicago, Distressed 1.4M-SF Loop Office Building Up for Sale, resonated with both local and national readers. In our third most-read story this past week, the former owner of 175 W. Jackson Blvd. was Brookfield, which allegedly defaulted on a $280-million loan.  

The property is now in receivership, and JLL has been selected to market it. Brookfield paid $306 million for the 1.4-million-square-foot office tower five years ago, but the most recent appraisal was for a little more than half that amount. 

Moving from a local focus to a global one, our fourth most-read story detailed the latest in the Walker Webcast series. The guest was Kiril Sokoloff, chairman and founder of 13D Research & Strategy. As recounted in Walker Webcast: Kiril Sokoloff on Economics, Investments and the Current State of the World, Sokoloff and Walker & Dunlop CEO Willy Walker held forth on topics ranging from energy dependence/clean energy to AI, machine learning, defense spending, and contracts. 

Along the way, Sokoloff discussed two global markets he’s invested in: India and Greece. To find out why, click on the link in the preceding paragraph. 

The week began on essentially the same note as it ended. Investor Preference for CRE Drops for Fifth Straight Quarter brought readers the latest findings from SitusAMC, which showed investors displaying a reduced appetite for commercial real estate due to factors such as short-term economic uncertainty and declining values. It was the week’s fifth most-read story. 

Virtually tied with the SitusAMC story, though, was one that ran on Friday about the latest pricing trends from MSCI Real Assets. Commercial Property Prices Fall 10.2% from a Year Ago continued a streak of decline that has persisted for months.  

Perhaps surprisingly, the sector with the greatest year-over-year erosion in pricing was not office, but apartments. “Challenges with the cost of financing deals have weighed on deal activity and property pricing across property sectors,” according to MSCI.


Inside The Story

About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-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 15-20 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).