WeWork’s global lease renegotiation plan is facing skepticism from real estate professionals. The company recently held a call with its landlords to discuss the renegotiation process, but details about the call and the number of landlords involved have not been disclosed.
In other news, extreme heat is causing delays in construction projects. According to nPlan, a construction analytics and software firm, physical work in construction takes 36% longer to complete during periods of extreme heat. This analysis is based on data from 750,000 projects from English-speaking countries.
Despite rising interest rates and inflation concerns, construction financing remains resilient. This type of financing seems counterintuitive given the risks associated with construction lending, such as the need to build the project in the first place. However, lower liquidity has not deterred investors from pursuing construction financing.
Eric Adler has been appointed to lead private alternatives at PGIM. Currently serving as president and CEO of PGIM Real Estate and chairman of private equity, Adler will assume his new role on October 1. Cathy Marcus and Raimondo Amabile will take over as co-CEOs of PGIM Real Estate.
Rising rents are impacting American suburbs more than urban cores. According to a report from Apartment List, rents in suburbs have increased by 26% since March 2020, outpacing the gain in urban areas. This trend is observed in 28 out of the 33 metro areas studied.
Arbor Realty Trust specializes in short-term, floating-rate loans known as “bridge” financing, ideal for quick deals. The company also packages these loans into collateralized loan obligations (CLOs) sold to investors.
Emptying office buildings are reminiscent of failing malls. Outdated office buildings are increasingly losing relevance, much like many malls did in the past decade.
Real estate private-equity firm Prime Group has been fined by the SEC for failing to disclose brokerage fees paid by fund investors. The fees, totaling millions of dollars, went to a firm owned by Prime’s CEO.
Over 40,000 eviction notices have been sent out in Los Angeles this year, including upscale apartments. Notices range from $0 to $561,700 and have been issued in various buildings throughout the city.
Diversified Healthcare and Office Properties have called off their contested merger. This leaves Diversified Healthcare with $700 million of debt due by 2024, which it may struggle to refinance.
Foreign investors considering a sale in the US must navigate tax laws. Working with a tax advisor can help investors understand the Foreign Investment in Real Property Tax Act (FIRPTA) and develop strategies to minimize tax implications.
C&S Wholesale Grocers, backed by SoftBank Group Corp., is in talks to purchase stores from Kroger and Albertsons. This move comes as Kroger and Albertsons seek regulatory approval for their $25 billion merger.
Office markets in the Sun Belt are experiencing a slowdown in leasing activity. According to a report by Savills, leasing activity in 11 Sun Belt cities has declined by 13% in the past four quarters compared to the previous year.
Sources:
CoStar – WeWork’s Global Lease Renegotiation Plan Seems ‘Sort of a Stretch,’ Real Estate Pros Say
Bisnow – ‘Adaptation Cost of Anguish’: How Extreme Heat Is Slowing Down Construction
Commercial Observer – How Construction Financing Remains Resilient Despite Rate Hikes
Mingtiandi – PGIM Taps Eric Adler to Lead Private Alternatives Under Single Umbrella
The Wall Street Journal – Rising Rents Are Hitting American Suburbs Hardest
The Real Deal – The Business of Multifamily Lending: Inside Arbor Realty Trust’s Books
The Business Journals – Emptying Office Buildings Bring Back Memories of Mall Failures
Los Angeles Times – Over 40,000 Eviction Notices Have Gone Out in L.A. This Year, Many to Upscale Apartments
Commercial Property Executive – How U.S. Tax Law Impacts Foreign Investors Considering a Sale
Bloomberg – Kroger, Albertsons In Talks to Sell Stores to C&S, SoftBank
Bisnow – Storm Clouds Gathering Over Sun Belt Office Markets As Pace Of Migration Slows.