In the News
Citizens has higher reserve levels for problem office loans than similar banks
About $749 million of its general office loans are for properties in the New York City market, representing about 14% of its total office loan book. The New York loans are about evenly split between offices located downtown and in the suburbs. The bank’s second-largest market for general office loans is Washington, D.C., where all properties are in the suburbs. Citizens holds $467 million of general office loans in the Washington market.
Back-to-back hurricanes may have lasting impact on Tampa Bay multifamily market
Hurricane Milton made landfall on October 9 near Sarasota, causing heavy rainfall and flooding across Tampa Bay, particularly in Pinellas and Hillsborough Counties. This followed the devastation from Hurricane Helene, which brought significant storm surges less than two weeks earlier. The multifamily housing sector appears to be the most affected, with numerous properties experiencing flood damage, particularly on first floors. Construction delays are expected, and short-term spikes in leasing may occur as displaced residents seek temporary housing. However, these gains could be temporary, similar to trends observed after Hurricane Ian in 2022.
Multifamily loans rise as office deals fall; Trouble for St. Louis hotel; Departure dings New York office building
1. Multifamily loans are experiencing a surge as office deals decline, highlighted by the Bank of Montreal’s upcoming multiborrower commercial mortgage-backed securities deal, which features over half of its $960 million in multifamily loans. This marks a significant increase from previous years, as multifamily loans typically comprised only 21% of such offerings this year.
2. Meanwhile, the Hyatt Regency St. Louis is facing financial difficulties, with a $93.4 million loan entering special servicing due to declining net cash flow and occupancy rates.
3. Additionally, One Worldwide Plaza in New York has also moved to special servicing following the exit of a major tenant, Cravath, which has lowered occupancy from 90% to 65%. Overall, the office sector is struggling, with a significant drop in office loans and rising vacancy rates exacerbated by corporate relocations.
Florida’s New Flood Disclosure Bill: What Buyers and Sellers Need to Know
As climate change continues to impact coastal regions, Florida is taking steps to protect homeowners and buyers. The Sunshine State’s latest legislative effort, CS/SB 484: Flood Disclosure in the Sale of Real Property, aims to bring more transparency to the real estate market when it comes to flood risks. This new bill could significantly change how properties are bought and sold in Florida, a state known for its beautiful beaches and occasional hurricanes.
For Buyers
This bill is good news for people looking to buy a home in Florida. Here’s what it means for you:
- You’ll get more information about flood risks before you buy a house.
- The seller must tell you if the house has ever had flood damage.
- You’ll know if the house is in a flood zone.
- The seller has to share if they have flood insurance.
This information can help you make a smarter choice when buying a home.
For Sellers
If you’re selling a house in Florida, this bill means you’ll need to do a few new things:
- You must tell buyers about any past flood damage to the house.
- You have to share if the house is in a flood zone.
- You need to let buyers know if you have flood insurance.
- You must give this information to buyers before they sign a contract.
These new rules mean you’ll need to be more open about flood risks when selling your home.
Invitation Homes to pay $48 million settlement for what FTC calls ‘deceptive tactics’
Invitation Homes, the largest U.S. single-family rental landlord, settled a $48 million case with the FTC over allegations of deceptive practices, including hidden fees, unfair eviction policies, and improperly withholding security deposits. The settlement, aimed at refunding harmed renters, requires the company to improve transparency in lease pricing and security deposit handling. The FTC alleged Invitation Homes overcharged renters with undisclosed fees and engaged in unfair eviction practices during the COVID-19 pandemic. Despite the settlement, Invitation Homes maintains it committed no wrongdoing and continues to focus on improving customer experiences. This case highlights growing scrutiny of corporate landlords amid rising housing costs.
Developers aim to build Miami’s first supertall neighborhood — and highest US skyline south of New York
Miami is experiencing a surge in supertall skyscraper development, with seven towers over 984 feet high under construction, marking a historic first for the city. The Waldorf Astoria Hotel and Residences Miami, at 1,049 feet, is the furthest along, driven by an influx of wealth and companies into South Florida. Despite environmental and geographic challenges, such as limestone terrain, high water tables, and FAA height restrictions, developers are eager to capitalize on the booming real estate market. The concentration of supertall projects within a small area could transform Miami’s skyline, rivaling New York and Chicago in height. However, the complexities of building on unstable ground and preparing for storms make these projects particularly costly and difficult.
Invitation Homes spends $216 million on build-to-rent projects in 60 days
Invitation Homes, the largest single-family home landlord in the U.S., reported over $200 million in investment activity in the third quarter of 2024. The company entered agreements to acquire 580 homes in Tampa, Denver, and the Carolinas, most of which were already completed. The acquisitions underscore the company’s strong relationships with homebuilders, as it continues to grow its build-to-rent portfolio, with plans to invest $1 billion in home purchases in 2024. Additionally, Invitation Homes secured a new $3.5 billion credit facility to refinance previous debt at a lower interest rate. Despite potential slowdowns in build-to-rent construction, Invitation Homes sees ongoing demand in its markets, driven by a lack of housing supply.
Publix pays $223 million for seven Florida shopping centers
By Louis Llovio Summary: Publix Super Markets has acquired a seven-property grocery-anchored portfolio for $223.85 million, including the Gladiolus Gateway shopping center in Fort Myers. SVN Saunders Ralston Dantzler brokered $26 million in conservation easements...
Convenience store and gas station owner Parkland to sell Florida portfolio
Parkland, a Canadian fuel supplier and convenience store owner, is selling its Florida business, including 100 retail locations, as part of its strategy to divest non-core assets. This move aligns with the company’s broader goals of organic growth, cost reduction, and supply chain optimization. Despite challenges in the U.S. market, particularly in fuel volume declines and job cuts, Parkland aims to focus on higher-return opportunities and maximize shareholder value. The Florida sale is expected to be completed over the next 12 to 18 months, with no broker yet identified. Parkland’s U.S. retail portfolio will be cut in half following the sale.
Residential Real Estate Industry Sees Benefits Emerging From ‘Organized Chaos’ of New Compensation Rules
By Moira Ritter CoStar News Summary: The residential real estate industry is quickly adapting to new compensation rules, which have disrupted traditional practices. These changes, stemming from a legal settlement, require buyer brokers to have signed agreements...
Federal home loan banks push back against increases to affordable housing grants
By David Holtzman CoStar News Summary: Critics argue that the federal home loan banks are not doing enough to address the housing crisis, despite generating $725 million last year for affordable housing. The 11 banks resist efforts to increase their...
REIT Tells Steward Health To Pay Rent or Leave, Sparking Debate on Hospital Property Use
Steward Health Care System, once the largest for-profit private U.S. hospital network, is embroiled in a legal dispute with its largest landlord, Medical Properties Trust (MPT), over unpaid rent. MPT, which owns nearly all of Steward’s U.S. hospitals, has demanded that Steward either pay rent or vacate the properties, as Steward navigates Chapter 11 bankruptcy. The dispute, which has sparked legislative debate and led to severe maintenance issues at some hospitals, highlights the financial struggles of both entities. Steward seeks to sell its operations, but MPT claims that Steward is unfairly trying to shift real estate value to its own benefit. The conflict has stalled hospital sales and has broader implications for hospital ownership and real estate investment in healthcare.
US House Prices Hit Another All-Time High
U.S. house prices hit a record high in June 2024, marking the fourth consecutive month of increases, with the S&P CoreLogic Case-Shiller Index showing a 5.4% annual rise. Despite the historical peak, the growth in home prices has slowed for the third consecutive month, as seen in both national and metropolitan indices. Economists suggest that while inflation and housing have decelerated, home prices remain significantly above historical norms. The Federal Housing Finance Agency’s data also indicates a slowdown in house price growth, likely influenced by increasing housing inventory and high mortgage rates. The effects of recent interest rate cuts by the Federal Reserve may be reflected in future reports.
Florida Markets Among Top Regions in the Country for Five-Year Multifamily Rent Growth
Florida’s multifamily markets, especially in Palm Beach and Tampa, have seen significant rent growth over the past five years due to rapid population increases, which drove vacancies to historic lows. However, a surge in new apartment construction, particularly in luxury developments, has led to an oversupply, outpacing renter demand. As a result, vacancy rates have risen, and landlords have had to offer significant concessions, such as free rent, to attract tenants, causing rents to decline. This trend is expected to continue as more units come online, keeping pressure on rent growth.
Residential Foreclosure Activity Is Growing the Most in These Five States
Foreclosure activity in the U.S. is rising, with nearly 32,000 housing units facing default notices or repossessions in July 2024, an 18% increase from June and a slight 0.2% year-over-year rise. Delaware had the highest foreclosure rate, with a 7.37% increase, followed by Nevada, Utah, New Jersey, and Illinois.
Hyatt Nears End of $2 Billion Hotel Asset Sale Plan, Plans Brand Acquisitions
By Sean McCracken Hotel News Now Summary: Hyatt Hotels Corp. will remain active in the transactions market after completing a $2 billion hotel sales commitment. CEO Mark Hoplamazian highlighted the focus on strategic partnerships and acquisitions of hotel brands or...
This $5 Billion Project Was Going To Start With Offices. Then the Developer Had Another Idea.
By Tony Wilbert CoStar News Summary: CIM Group adapted its $5 billion development plans for Centennial Yards in downtown Atlanta by shifting focus from office buildings to hospitality, a move deemed essential for success by Brian McGowan, CIM's Centennial Yards Co....
Nation’s Biggest Homebuilder Posts Higher Earnings As Orders Surge
By Paul Owers CoStar News Summary: Lennar, the largest U.S. homebuilder, reported a nearly 20% surge in orders due to a nationwide housing shortage exacerbated by higher interest rates deterring moves. Despite challenges like builder confidence declines, the company's...
Downtown Dallas Parking Garage Designed for a Very Weighty Future
By Candace Carlisle CoStar News Summary: Dallas County's new 12-story parking garage, designed exclusively for electric vehicles and built with future expansion in mind, reflects a forward-thinking approach to urban infrastructure. Costing $66.8 million, it...
Blackstone Alone Could Take CMBS Issuance Higher, Loan Downgraded on Twin Chicago High-Rises, Retail Property Values Fall Furthest Among Distressed Loans
By Mark Heschmeyer CoStar News, June 27, 2024 Summary: Blackstone's activities have the potential to significantly boost the issuance of commercial mortgage-backed securities (CMBS). Meanwhile, a loan for two high-rise buildings in Chicago has been downgraded,...
Disney Locks in 15-Year Expansion Contract With DeSantis-Backed Florida Governing Board
By Joshua S. Andino, CoStar News Summary: Walt Disney Parks and Resorts has reached an agreement with the Central Florida Tourism Oversight Board, allowing it to expand its presence in Orlando over the next 15 years. The deal, supported by Governor Ron DeSantis,...
Minneapolis’ Second-Tallest Tower Handed Back to Lender After Failing To Land a Buyer
Here’s Why Housing Inventory Is Growing in These Areas More Than Others
By Moira Ritter CoStar News Summary: Lawrence Yun of the National Association of Realtors emphasized the urgent need for increased housing supply amid ongoing inventory shortages that have driven up home prices. Recent data indicates a slight increase in home...
Minneapolis’ Second-Tallest Tower Handed Back to Lender After Failing To Land a Buyer
By Katie Burke CoStar News Summary: Shorenstein, a San Francisco development firm, has handed back the Capella Tower, the second-tallest building in Minneapolis, to its lender MetLife after failing to sell the property amid market uncertainty. Despite efforts to sell...
Starwood Limits Redemptions From $10 Billion Property Fund
By Paul Norman CoStar News Summary: Starwood Capital has restricted redemptions from its $10 billion Starwood Real Estate Income Trust (SREIT) to preserve liquidity amid a surge of investor exit requests. Starting in June, redemptions will be limited to 0.33% of net...