Editors’ Weekly News Roundup, October 2 – October 6

Nobody wants to sell at a huge loss.Lea Overby, head of CMBS research, Barclays Capital

A poll of commercial real estate investors by Bloomberg News conveyed an alarming forecast and provided the basis for the most-read story on Connect CRE for the week ending Oct. 7. Survey: Investors Expect Crash in Office Prices reported that commercial property pricing overall is expected to continue declining for at least another nine months, while the office market will rebound after a severe crash. 

In the interim, price-conscious investors are biding their time. According to the survey, they’re not convinced that the market is anywhere near a bottom in terms of pricing. 

That being the case, there was room in this past week’s top five for a large-scale sales transaction that didn’t involve distressed pricing. The seller was KKR, which has made the industrial sector a focal point of its CRE investment strategy.

Ranking second in our top five was KKR Divests $560M-Plus of Industrial Across Eastern and Central U.S. For a little context, this sale of five million square feet is one of several that KKR has conducted over the past couple of years, but the investment firm still has acquired—and retained—substantially more industrial than it has sold. 

Moving from sales to acquisitions, the past week also saw an entity-level deal for a nationally active development firm in multifamily. With readership as a regional breaking news story and in the following morning’s Texas and National newsletters, JPI Taken Over by Sumitomo Forestry followed Sumitomo’s investments of more than $200 million in the Irving, TX-based developer’s projects over the past four years. The story ranked third for readership this past week. 

An all-star lineup of industry leaders took center stage in the past week’s fourth most-read story. Former Goldman Sachs chairman and CEO Lloyd Blankfein had plenty to say in an hour-long webinar moderated by Marcus & Millichap president and CEO Hessam Nadji.  

However, Lloyd Blankfein: “Near the End of Tightening Cycle” made it clear that Blankfein wasn’t the only reason for tuning into the webinar or catching up with it via on-demand replay. Attendees also heard from Jeffrey DeBoer, CEO of the Real Estate Roundtable; Sharon Wilson Geno, president of the National Multifamily Housing Council; and Tom McGee, president and CEO of ICSC. 

Completing the top five was another story focused on distressed assets and originating in Texas. The asset in question wasn’t an office property, but a multifamily development. Unconventional Austin Apartment Repossessed recounted the story of Capital Quarters, a project in Texas’ capital city that came to market with an unusual business model that ended up in failure. There haven’t been as many stories in 2023 about apartment properties going back to their lenders as there have been in the office and retail sectors, but the next few quarters could present a different scenario. 

Returning to the theme of market insights via Marcus & Millichap, the firm’s John Chang, national director, research and advisory services made a presentation on five risks that could derail chances for a soft landing by the U.S. economy. It’s one of four in-depth stories you’ll want to read in the latest edition of Weekender. 

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About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 16-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 7-10 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).