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Good morning. In a major sign of the surging demand for AI infrastructure, lenders have backed a $2B construction loan for a state-of-the-art AI data center in West Jordan, Utah, just outside Salt Lake City.

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Market Snapshot

*Data as of 03/04/2024 market close.

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• Changing how CRE deals get done with AI: Nuvos provides deal management, valuation, and AI solutions so users can manage deals efficiently, model faster, and automate tedious tasks. (sponsored)

• Trump’s tariffs: President Trump's 25% tariffs on Mexico and Canada, effective March 4, raise construction costs and project delays, straining trade relations and CRE supply chains.

• Rule suspended: The Treasury Department halts enforcement of the Corporate Transparency Act's LLC ownership disclosure rule, citing reduced regulatory burden, but shifting focus to foreign companies.

• REITs outperform: The FTSE Nareit All Equity REITs Index posted a 4.2% return in February, driven by strong diversified, telecom, and healthcare performance, outperforming the broader markets.

• Ready to fall: Home prices may drop in oversupplied states like TX and FL, where new construction outpaces demand, while areas with tight inventories, like the Northeast, could see steady prices.

• Pretty penny: Blackstone CEO Steve Schwarzman earned over $1B in 2024, primarily from dividends on his 20% stake, despite a slight dip from his 2022 earnings.

• Federal terminations: The Department of Government Efficiency (DOGE) has canceled about 10% of active federal CRE leases, cutting roughly 9.6M SF and saving $660M.

• Canadian investment: Welltower is investing $3.2B to acquire 38 ultra-luxury senior housing communities in Canada, betting on high-end demand amid a growing supply shortage.

• St. Louis market: St. Louis sees rising demand and easing construction pressure in early 2025, though challenges with insurance and financing costs persist for multifamily investors.

• Affordable housing: A joint venture secured $51.7M in financing for a 92-unit affordable housing project in Far Rockaway, Queens, combining public and private funding sources.

• Deal of the day: BlackRock (BLK) leads a $22.8B deal to acquire majority stakes in two key Panama Canal ports, addressing US national security concerns over Chinese involvement.

• Target in sight: Target (TGT) purchased a newly built distribution center in the fast-growing Denver logistics hub for $231M, expanding its real estate footprint.

• Massive campus: Supermicro (SMCI) plans a 3M SF industrial and tech campus in San Jose to expand liquid cooling production for AI data centers, boosting local employment.

• How the mighty have fallen: Walgreens (WBA) is close to a $10B deal with Sycamore Partners to go private, focusing on its US retail business amid declining market value and restructuring efforts.

• Changing of the guard: Starbucks (SBUX) names Nordstrom's Cathy Smith as CFO to lead its turnaround, focusing on store growth and improving customer experience, with plans to double US locations.

• Atlanta shopping: CTO Realty Growth (CTO) acquired a suburban Atlanta shopping center, anchored by Dick's Sporting Goods (DKS) and Best Buy (BBY), for nearly $80M.

• Rising rents: Small retailers, like Laguna Madre Clothing Co., are closing due to soaring rents, insurance, and inflation, as demand outpaces supply and landlords push for higher rents.

• Leased to be sold: A prominent Raleigh real estate firm is set to sell a 20-story office tower in North Hills, fully leased to a Fortune 500 company.

• Park Ave expansion: Newmark (NMRK) signed a 15-year lease renewal and expansion at SL Green's (SLG) 125 Park Ave, growing its HQ to 184.24K SF in Midtown Manhattan.

• Back to the office: Governor Gavin Newsom mandates California state workers return to the office for at least four days a week starting July 1, sparking tensions with labor unions.

• Bigger bunkhouse: Bunkhouse opens two new hotels in Houston, the Hotel Saint Augustine and Hotel Daphne, marking its first expansion into the market after Hyatt’s (H) acquisition.

📈 CHART OF THE DAY