Editors’ Weekly Roundup June 3 – June 7
It isn’t often that a senior member of Blackstone’s real estate team departs the company to launch a new venture. When it does occur, it’s big news, and Connect CRE readers responded accordingly by putting our story on the new venture at the top of the past week’s most-read stories.
Blackstone Veteran’s Inaugural RE Fund Closes at $1.25Bwas the headline, and judging by that initial vehicle’s success, Tyler Henritze brought some of his former employer’s fundraising acumen along with him.Henritze, a 19-year Blackstone veteran who most recently served as director of strategic investments, formed Town Lane in partnership with his sister Parker Morse, who was with private equity firm Sycamore Partners for more than a decade.
The second most-read story for the week ending June 8 was about contracting rather than branching out. Bank of America is exiting more than 550,000 square feet of office space at two Uptown Charlotte properties, Fifth Third Center and Gateway Center, upon lease expirations at these locations.
We reported in B of A Consolidating in Charlottethat the landlord for Fifth Third Center, Cousins Properties, plans a major amenity overhaul of the property after the banking giant exits the space 15 months from now. The bank will house its displaced employees at other locations around Charlotte where it is already a tenant.
Ranking third was another regional story that also drew national interest. This time, though, the focus was once again on expansion. Trader Joe’s, founded in Southern California more than 50 years ago, intends to grow its footprint in the region as part of a national increase in store count.
Trader Joe’s Plans to Add Eight SoCal Locationsmapped out the grocery chain’s itinerary for opening new stores: four in Los Angeles County, two in San Diego County and one each in Orange and Riverside Counties. All eight are listed on the Trader Joe’s website as “coming soon,” although no projected opening dates have been announced.
Making her third appearance as a guest on the Walker Webcast, BlackRock managing director/head of thematic strategy Kate Moore was comparably bullish about the future. As reported in Walker Webcast: BlackRock’s Kate Moore Discusses the Economy, Investments and the Election, Moore and Walker & Dunlop CEO Willy Walker spent part of the hour discussing the accuracy of her predictions during her September 2023 appearance.
Moore’s assessment then was upbeat, and the past nine months have borne it out. Looking at the current situation, she remains optimistic. “You go back to Q1 24, and the commentary on earnings releases and calls is very positive,” she told Walker. “Now the market is very much like, ‘okay, the coast is clear, we’re not going to have a recession, so we’ll see how this whole thing lands as it relates to rates and everything else.’ ” The story was the fourth most-read last week.
This past week’s top five ranking tended to seesaw between bullishness and bearishness, and it concludes on a bearish note. Fitch Ratings reported that CMBS defaults have been on the rise, and we covered the rating agency’s analysis in Office and Retail Drive Overall CMBS Default Rate Higher.
The increase wasn’t seen across the board, though. The three other main property types had a smaller share of overall defaults in 2023 compared to 2022.
Given the headwinds confronting the office sector, prospective tenants are paying closer attention to landlords’ financial stability, Avison Young’s Mark McGranahan told Connect CRE. McGranahan’s insights into debt status serve as the basis for the lead article in the latest edition of Weekender, and you can read it here.