Good morning. As we close out 2024, we want to take a moment to reflect on what an incredible year it’s been — and it’s all thanks to you, our loyal readers.

Here are some numbers from the team:

• We wrote 275 newsletters and 330,000 words

• Readers opened more than 18 million times

• … and clicked over 554,000 links

• The CRE Daily community grew to 92,000 readers

But 2024 wasn’t just about the inbox. This year, we went beyond:

• We launched a website and got nominated for an award

• We started a podcast (No Cap)

• We reviewed over a dozen CRE products and services

• We launched an education platform, it didn’t go as planned

• We acquired a research database

• We built the largest industry calendar of events for CRE

This year, we’ve learned a lot.

But one thing has remained constant: our mission to empower CRE professionals and investors like you with the knowledge and tools to make smarter decisions and stay informed about what matters.

Because of your support, CRE Daily has become the #1 most-read commercial real estate newsletter in the country. This achievement isn’t just ours; it’s yours too.

Thanks for being part of the journey—we're looking forward to a fantastic 2025 and beyond! Have a happy New Year's Eve.

— Jordan, Co-founder / Editor-in-Chief

P.S. If you'd like to continue supporting us, please share this newsletter with your network. It’s the best way to help us grow and reach even more CRE professionals!

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Market Snapshot

*Data as of 12/30/2024 market close.

2024’s Most-Read Newsletters

• Big deals: Blackstone acquired AIR Communities for $10B in its largest multifamily investment. Equity Residential bought 3,500 units from Blackstone for $964M. KKR purchased 5,200 units from Lennar’s Quarterra for $2.1B, while Brookfield added 7,000 apartments for $1.55B.

• Units delivered: Approximately 670,000 new apartment units were completed in 2024, surpassing 2023's record of about 440,000 units—a 50% increase.

• Rent growth: Rents remained relatively flat, ending 2024 essentially unchanged from 2022 levels. Operators prioritize occupancy over price, moderating renewal rent increases.

• Cap rates: Multifamily values likely bottom out, with cap rates settling in the mid-5% range, while Class A assets see narrower spreads compared to challenged Class C/B-.

• Demand: Strong leasing demand and improving affordability keep occupancy and rents stable despite record-high completions and rising expenses.

• Transactions: Through November, $54.6B in industrial sales were recorded, on track to match 2023's $62.8B total. Average sale prices rose by 2.7% to $128/sq. ft., outpacing 2023's 1.5% growth.

• Vacancy stability: Industrial vacancy rates rose by only 10 basis points in Q3, the smallest increase in two years, thanks to strong leasing activity and fewer completions.

• Leasing growth: Year-to-date leasing reached 621.4 million sq. ft., a 5.2% increase over 2022, driven by robust demand from third-party logistics (3PL) providers.

• Net absorption decline: While Q3 net absorption rose to 53.9 million sq. ft., year-to-date absorption of 122.1 million sq. ft. was 38% lower than last year, reflecting a moderation in demand.

• Construction and rents: New starts fell to a post-pandemic low of 36.4 million sq. ft. in Q3, with average asking rents declining 2.4% year-over-year to $11.12 per sq. ft.

• Mass closures: The year saw a substantial increase in store closures, with approximately 7,100 closures by November—a 69% rise from the previous year. Notable retailers like Big Lots, Party City, CVS, Walgreens, Family Dollar, and BuyBuy Baby were among those significantly affected.

• Big deals: Saks Global acquired Neiman Marcus Group for $2.7B, forming a $7B luxury retail giant. Blackstone made NYC's largest retail deal in 3 years, buying Soho buildings for $200M.

• No vacancy: The national retail vacancy rate remained steady at 4.1% throughout the first three quarters of 2024, indicating a tight market with limited available space.

• Hot spot: Open-air shopping centers experienced even lower vacancy rates, reaching 6.2%—the lowest since 2006—reflecting strong demand.

• Vacancy rate: The U.S. office vacancy rate peaked at 19.8% by year-end 2024, up from 18.4% in Q3 2023 and 12.1% at the end of 2019, reflecting the ongoing impact of hybrid work models.

• Leasing activity: Office leasing activity increased by 5% in 2024 compared to 2023 but remained 20% to 25% below pre-pandemic levels, indicating a gradual recovery.

• Construction completions: New office construction completions totaled 36.1 million sq. ft. in 2024, the lowest annual amount since 2014, suggesting a slowdown in new supply.

• Prime Office vacancy: The vacancy rate for prime office space decreased by 20 basis points quarter-over-quarter to 15.5% in Q3 2024, indicating sustained demand for high-quality office environments.

• Supply growth: Hotel room supply is projected to increase by 0.9% in 2024, remaining below the long-term average until after 2026.

• RevPAR: The U.S. hotel industry is expected to achieve a 2% RevPAR growth in 2024, maintaining the same growth rate as in 2023.

• ADR: ADR growth is anticipated to outpace inflation, with a projected increase of 3.1% in 2024, indicating strong pricing power in the industry.

• Occupancy levels: Occupancy rates are expected to stabilize, with projections indicating a slight increase to approximately 63% in 2024.

📈 CHART OF THE DAY