Editors’ Weekly News Roundup, September 4 – September 8

We wholeheartedly agree with the letter signatories that millions of households in this country face a housing affordability crisis, but cannot let disinformation feed false narratives about decades of fact-based evidence of the negative policy consequences of rent regulations.National Multifamily Housing Council

That clattering noise you heard resounding across the commercial real estate industry this past week was the sound of the other shoe dropping, as the FDIC announced it would begin marketing loans from the failed Signature Bank. A breaking news story two days into a shortened week, FDIC Markets $33B of Signature Bank CRE Loans was the most-read story on Connect CRE in the days following Labor Day weekend. 

The announcement from the FDIC had been expected for nearly six months, following Signature Bank’s takeover by New York State regulators in early March and subsequent reports that the FDIC had hired Newmark to sell the loans. Much of Signature’s $33-billion CRE portfolio was concentrated in New York City and comprised mainly of multifamily loans, with $15 billion of the loans securing properties that are rent stabilized or rent controlled. 

On the subject of apartments, the National Multifamily Housing Council last week rebutted a letter signed by 32 economists that purported to demonstrate the benefits of rent control. As reported in our second most-read story, NMHC Rebuts 32 Economists’ Letter on Rent Control Effectiveness, the studies cited by the economists actually concluded that such regulation may do more harm than good in the long run. 

Continuing with the multifamily theme, the post-Labor Day week saw Marcus & Millichap’s Institutional Property Advisors division issue a report on the pace of new construction. We reported on the study in our third most-read story, IPA: New Apartment Construction Volume Dwindles. 

In the top 15 markets for multifamily development, the pace of new starts was down by more than half compared to a year ago. The three major Texas metro areas saw especially pronounced declines, with all markets suffering from high borrowing costs and slowing rent growth. 

The past week in California began and ended with discounted sales of Class A office properties, although only the first of these deals was among Connect CRE’s most-read stories for the week, ranking in fourth place. Swig, SKS Finalize Deal for 350 California in San Francisco reported that the former home of Union Bank sold for $61 million, a price that Swig Company CEO Connor Kidd said was “below replacement cost.”  

A Friday story on JPMorgan Asset Management’s imminent purchase of the Activision Blizzard headquarters in Santa Monica, although less well-read, also demonstrated that office assets are selling, even if the price JPMorgan reportedly will pay came in below what CalSTRS wanted. For what it’s worth, that discounted sale price is more than two-and-half times what 350 California St. went for. 

Completing the past week’s top five stories was a return engagement on the Walker Webcast by Kate Moore, managing director of BlackRock’s Global Allocation investment team. In Walker Webcast: The Current Economic Situation and Outlook with BlackRock’s Kate Moore, readers who missed the Sept. 6 webcast could avail themselves of a recap, which included a then-and-now comparison of Moore’s projections during her previous appearance on the weekly series two-and-a-half years ago. 

Although its danger to the U.S. East Coast wasn’t yet clear as this was written, Hurricane Lee had rapidly intensified to a Category 5 storm and served as another reminder of the extreme weather events seen both domestically and globally throughout this summer. In the latest edition of Weekender, a story on the implications of natural disasters made the point that investors need to start calculating the potential costs of these events as part of their real estate due diligence activities.  

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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).