Editors’ Weekly News Roundup, October 9 – October 13
What the Federal Reserve chooses to do next was a recurring concern among the most-read stories on Connect CRE for the week ending Oct. 14. Three out of five stories sounded this theme, including the week’s most popular, a report on the quarterly appearance of Peter Linneman on the Walker Webcast.
The hour-long discussion reported in Walker Webcast: Peter Linneman Asks Why the Fed Keeps Raising Rates took place against the backdrop of the Federal Reserve’s pause in raising the federal funds rate while hinting that it isn’t done with increases. Linneman made it clear that not only does he believe no more increases are necessary, but also that the Fed has already enacted too many of them.
Our second most-read story for the week was on a subject that is becoming more prevalent as the months go by and arguably is driven partly by high interest rates: distressed real estate debt. Ten years after acquiring 161 N. Clark St., an office tower in Chicago’s Loop, a group of investors may have to hand it over to the lender of a 2018 mortgage loan. Loop Building Owner Faces $237M Foreclosure Lawsuit,which drew reader attention both in Chicago and nationally, has the details.
The current travails of the office sector were among the factors cited by Lawrence Yun, chief economist at the National Association of Realtors, in his response to the unexpectedly strong employment numbers reported last week. NAR’s Yun Sees CRE “Warning Signs” Amid Strong U.S. Jobs Report also saw Yun calling on the Fed to start lowering interest rates. It was Connect CRE’s third most-read story this past week.
NAR was among the signatories to a letter addressed to Fed Chairman Jerome Powell and the central bank’s board of governors. The association joined the Mortgage Bankers Association and the National Association of Home Builders in calling on the Fed to provide more clarity about its path forward.
Our fourth most-read story of the week, MBA, NAR, NAHB Call for Halt to Fed Rate Hikes also reported that the three industry groups requested a moratorium on Fed sales of its MBS holdings “until and unless the housing finance market has stabilized and mortgage-to-Treasury spreads have normalized.”
Rounding out the top five was a reminder that even in the current uncertain environment, large deals still are getting done. Prologis Buyer in Arizona’s Largest-Ever Business Park Sale reported that the industrial REIT paid $184 million to acquire the newly built Airpark Logistics Center in Goodyear, AZ. The story drew readership in the Phoenix market and across the U.S.
Phoenix is hardly an unknown quantity when it comes to industrial product. However, a story in the latest edition of Weekender makes the case that secondary markets are growing in investor appeal. For one thing, investors are finding that such markets can be less overvalued, which means potentially higher returns on investments.
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