Editors’ Weekly News Roundup, May 1st – May 5th

There are still quality deals to be done and financing to be had, if you have the structured finance experience and relationships to weather a difficult period.Zachary Streit, Founder/Managing Partner, Way Capital

The apartment sector led the past week’s most read stories, both directly and indirectly. Multifamily was indirectly the focus of the week’s top story on a study from Avison Young that sought to quantify potential conversion candidates among older office buildings.  

The story, headlined Avison Young: One-Third of Office Buildings Could See Adaptive Reuse, was more about office stock than a how-to primer on office-to-residential conversion. However, Avison Young’s Sheila Botting made the point that such conversions could contribute to “placemaking and to the revitalization and vibrancy of our neighborhoods – particularly our downtown cores.” 

In second place was a story with positive news for multifamily landlords and investors alike. Multifamily Fundamentals Begin to Stabilize came to Connect CRE readers courtesy of CBRE, which reported that the increase in apartment vacancies during the first quarter was considerably smaller than the sector experienced previously. As a result, negative net absorption—driven in part by newly delivered apartments that haven’t leased yet—was also on the decline. 

Meanwhile in the industrial sector, the week’s third best read story detailed what is believed to be the largest transaction of its kind in the Inland Empire. Kearney Real Estate Company was the seller as its five-building Corona Lakeside Logistics Center sold for $325 million. Headlined Corona Industrial Complex Trades in Inland Empire’s Largest Ground-Lease Transfer, the story resonated with readers in California and nationally. 

Although the Federal Reserve’s latest increase in the federal funds rate was widely expected, that doesn’t mean the commercial real estate industry simply shrugged it off. Last week’s fourth most read story, Fed’s Latest Rate Hike Adds to Strain on Capital Markets, offered reactions from experts in CRE finance and macroeconomics.  

Spoiler alert: the Fed’s move was not welcomed. For a longer-term forecast on the Fed’s monetary policy, including the prospect of a pause in further rate increases, Amy Sorter interviewed finance experts and reported their comments in a story that appeared in the latest Weekender. 

On the subject of news that likely didn’t come as a surprise, the week’s fifth most read story focused on Green Street’s latest Commercial Property Price Index. Green Street Sees Y-O-Y Pricing Drops in All Commercial Property Sectors reported that the analytics and advisory firm charted an average 15% decline across the board over the past year.  

Some sectors fared better than others—in keeping with the ongoing revival of the hotel sector, lodging saw the smallest price declines of any property type—while others fared worse. Office had the dubious distinction of suffering the biggest year-over-year drop in pricing, with apartments not far behind. 

That being the case, Connect CRE readers will be aware that office leases are continuing to get done. The 318,504-square-foot commitment in Houston by LyondellBasell Industries NV was only the largest of several leasing deals we reported over the past week. In Chicago, we reported that EQ Office was planning a 50th-anniversary celebration for Willis Tower, while in Seattle the company has just hired a new director of leasing. Office itself will not be going away, even if the interest in this past week’s top story suggested that some individual office properties will be. 


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).