Editors’ Weekly News Roundup July 21 – July 25
Although the hospitality sector has recovered strongly from the pandemic five years ago, it isn’t immune to the lingering effects on travel and operators’ NOI. A case in point is the past week’s most-read Connect CRE story, Downtown Portland Hotel Ownership Returned to Lender.
The lodging property in question is the Hotel Vance, which occupies the first eight floors of the Broadway Tower in Portland, OR. A deed in lieu of foreclosure transferred ownership of the hotel to an entity tied to Dallas-based Canyon Partners. Interestingly, the week ended with still another Portland lodging property experiencing a similar outcome.
The news was more positive in the apartment sector, where the past week’s second most-read story reported a month-over-month surge in construction. Citing data from the federal government, Multifamily Drives June Increase in U.S. Housing Starts reported a 30% monthly increase in apartment starts to an annualized 438,000 units. This overcame a monthly decline in single-family starts to represent a 4.6% increase for residential construction overall.
That being the case, the volume of residential development is down on an annual basis, and the drop-off is more pronounced in the apartment sector. Current single-family production stands at 622,000 units, down 6.6% Y-O-Y, while the under-construction tally of 739,000 apartment units is 18.8% lower than it was in June 2024.
A Weekender story reported another lasting effect of the pandemic: an increasing tendency for office tenants to become their own landlords. Based on reports from the Urban Land Institute and JLL, Office Tenants Eye Ownership of the Properties They Occupy pointed to a first-quarter share of 20% for owner-occupiers in office acquisitions, up from 15% for all of 2024. Prior to the pandemic, the yearly average was 8% of all office sales.
“With this year’s owner-occupier transaction volume already above 2024’s total, user acquisitions are expected to remain a major force in the office market through 2025,” according to Mike McDonald, senior managing director at JLL. The story was the third most-read for the past week.
Ranking fourth was another sale-related story, this one focusing on a large-scale divestiture. Mapletree Sells Sunbelt Portfolio to EQT in Second U.S. Divestiture detailed the sale of a 2.4-million-square-foot industrial portfolio for $241.2 million.
The 10 properties in the transaction are located in high-growth innovation hubs across the Sunbelt states of Georgia, Florida and Texas. In June, Mapletree sold 30 shallow-bay buildings to Faropoint for $328 million.
In fifth place among the top five was one of three stories focused on successful fundraising. Private real estate fund manager ACRE announced the closing of its latest fund in a week that also saw Stockdale Capital Partners and Jonathan Rose Companies achieve similar success.
The headline ACRE Closes Second Credit Fund at $1B made it clear that ACRE saw the biggest haul among the three funds, with the week’s other two announced closings each in the high nine-figure range. The fully subscribedACRE Credit Fund II marks ACRE’s sixth discretionary vehicle.
That being said, a market sentiment survey from Agora found that capital raising continues to be challenging. You can read about the survey’s findings in this Weekender story.