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Good morning. The D.C. Council passed an emergency measure tightening rental assistance rules as affordable housing providers struggle with $100M in unpaid rent. Plus, Adam Neumann is launching a new coworking project called Workflow.

Today’s issue is brought to you by Agora—your all-in-one real estate investment management platform.

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Market Snapshot

*Data as of 10/02/2024 market close.

Rent Crisis

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• WeWork competitor: Just months after his attempt to reacquire WeWork fell through, Adam Neumann is launching a new coworking project called Workflow.

• Resilient community banks: US community banks, with assets up to $2.2B, are surprisingly resilient despite their CRE exposure, with a 0.95% ROA and 9.60% ROE, outperforming expectations.

• Manhattan metrics: Manhattan condo and co-op sales dipped 3% to 2.8K last quarter, but contract signings actually rose 19% in September.

• Construction slowdown: US construction spending dipped 0.1% in August, driven by a sharp decline in single-family homebuilding, though lower borrowing costs may boost activity.

• Bond boom: US investment-grade bonds posted a 5.8% return in Q3, marking their best quarter in 2024 and approaching their longest winning streak since 2019.

• Energy efficiency: Multifamily developers are faced with higher costs as HUD and USDA mandate stricter energy codes, potentially impacting housing affordability and availability.

• Costco commotion: In South LA, the nation’s first mixed-use complex with a ground-floor Costco (COST) features 800 apartments, including 184 units for low-income households.

• Redemption arc: Tides Equities aims to redeem itself after past mistakes, hoping to secure broader industry trust for future investments and financing.

• Affordable oasis: CRP Affordable Housing bought a gas station site for $10M and is seeking $100M in public financing for a 100-unit affordable complex.

• Proptech puzzles: Amid Rezi's closure, a new lawsuit claims it caused Leagem Partners to default on a $49M loan by mishandling rents.

• Sunbelt expansion: Northwood Investors bought a 1.8 MSF industrial portfolio in several Sunbelt states, with average lease terms of 7 years and rents that are 40% below market.

• Big-box makeover: The Sterling Organization plans to transform a former Fry’s Electronics in Fremont into a manufacturing and tech research hub.

• Growth spree: Triten Real Estate Partners acquired Central Texas Logistics Center, a 485.9 KSF industrial portfolio in San Marcos, marking its entry into Austin.

• Neighborhood revival: Small neighborhood retail is enjoying a resurgence in cities due to zoning reforms, shifting consumer habits, and local incentives.

• Shopping center splurge: Paramount Realty acquired New Jersey's busiest shopping center, Hamilton Marketplace, for $100M, the largest such deal since 2017.

• Retail royalty: Kimco Realty Corp. (KIM) bought Waterford Lakes Town Center in Orlando for $322M, with high lease rates and strong retail demand.

• Boston market: Boston's office leasing hit a 2-year high in 3Q24 with 3.4 MSF in signings, signaling a potential sector recovery.

• Discount deals: Union Bank Plaza, a 40-story LA office tower, was sold for $80M at a discount, for around $114 PSF.

• Deal's demise: The GSA terminated a proposed deal for the new SEC HQ in NoMa after Douglas Development and Midtown Equities were unable to secure financing for the 1.2 MSF complex.

• Holding ground: The US hotel sector is showing surprising resilience amid a broad consumer slowdown, with RevPAR at top metros up 42.8%, while the bottom was down 9.6%.

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📈 CHART OF THE DAY

FACT OF THE DAY

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