Editors’ Weekly News Roundup, July 3rd – July 7th

The recent pull-back of regional banks, coupled with the significant increase in short-term interest rates, is resulting in a rare opportunity for commercial real estate lenders.Charlie Rose, global head of credit, Invesco Real Estate

A shorter work week than usual due to the July 4 holiday, the past week nonetheless was filled with news. The week began with a rare weekend Breaking News mailing on Sunday afternoon, reporting that federal agencies were encouraging banks to work with commercial real estate borrowers and had issued updated guidelines for doing so. 

Federal Agencies Issue Policy Statement on CRE Loan Workouts, our most read story of the past week, was based on a little-noticed announcement from the FDIC and other agencies just before the holiday weekend began. But Connect CRE picked up on the announcement and so did our readers, making this one of the most widely read stories we’ve published year to date. 

From a CRE market standpoint, it’s telling that the agencies felt that now was the time to dust off and revise guidelines they’d originally issued 14 years ago, during the global financial crisis. 

As another sign of the times, Invesco Real Estate made news with its latest venture. That venture, a fund focused on bringing private real estate credit to accredited investors, was reported in Invesco Real Estate Launches Perpetual-Life Credit REIT, our second most read story last week. Structured as a non-exchange traded REIT, the fund will originate, acquire and manage a diversified portfolio of loans and debt. 

Connect CRE and other news sources continue to report the challenges facing office landlords. Nonetheless, the past week’s top five was rounded out with three stories that offered some hope for the sector, which has seen its recovery from the pandemic stymied by secular changes in office use.

In our third most read story of the week, Apple Picks Up Vacant Cupertino Offices at Deep Discount, readers saw a deal that could be interpreted in two ways. On the one hand, it points to a weak sales market in which a high-quality—albeit unoccupied—property could be had for one-third less than the seller paid four years ago.  

On the other hand, it begs the question of why Apple would bother acquiring the property if it had no plans to ever occupy it. The deal suggests that even as layoffs continue in the tech sector, the major players are still planning for future expansion. This strategy becomes especially clear when you consider that the office property Apple just acquired is located near its global headquarters campus.  

Apple and other occupiers have their eyes on long-term office utilization. As reported in the past week’s fourth most read story, JLL: Companies Are Redefining the Purpose of the Office, they’re rethinking their priorities. They’re shifting their focus from strict utility to competing for the best talent. 

While occupiers are sorting things out, major office markets such as Manhattan continue to see record availability rates. That didn’t stop two major landlords from refinancing one of their Midtown Manhattan properties. 

Tishman Speyer, Silverstein Secure $330M Refi for Midtown Office Tower was the past week’s fifth most read story. Along with Tishman Speyer and Silverstein Properties, the deal’s other participants were also high-profile names. 

Bank of America and Taconic Capital were the lenders, and the refi was arranged by the high-caliber Newmark team of Dustin Stolly and Jordan Roeschlaub. It couldn’t have hurt that the office tower in question, 11 W. 42nd St., is 99% occupied. 

The Tishman Speyer/Silverstein partnership wasn’t the only office ownership to score a big financing deal last week. Workspace Property Trust said it had modified and extended its approximately $1.3-billion CMBS facility on a 146-property portfolio of suburban office and light industrial/flex properties. As CEO Thomas Rizk put it, “Getting this deal done in what many have described as the most challenging real estate market in decades was no small feat.” 

With headlines continuing to warn of a commercial real estate collapse that will happen, oh, any day now, Moody’s Analytics offered a reality check. No stranger to grim forecasts about CRE, Moody’s nonetheless reported preliminary second-quarter data suggesting that “the worst of fears have yet to ring true.”  You can read about the Moody’s analysis and much more in the latest edition of Weekender. 


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).