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Good morning. Multifamily construction is cooling off, pulling down U.S. residential building activity as demand shifts and interest rates remain uncertain.

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Market Snapshot

*Data as of 10/30/2024 market close.

MARKET INSIGHTS

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• Treasury tension: Goldman Sachs cautions that a 10-year Treasury yield nearing 4.30% could lead to investor risk aversion, impacting equity returns and possibly stalling interest rate cuts.

• Chicago’s shortfall: Mayor Brandon Johnson proposed a budget that avoids union layoffs and relies on property tax increases and TIF surplus funds to address a nearly $1 billion deficit.

• Slowing growth: The U.S. economy grew at a 2.8% annualized rate in Q3, slightly below expectations, driven by strong consumer spending and government outlays amid ongoing inflation concerns.

• Cooling home prices: The Case-Shiller Index reports a slight August dip in U.S. home prices, though rising mortgage rates may drive prices back.

• Bizarre foreclosure: Lender ACF L5-M is auctioning Shidler Group’s purchase options on nearly 20 hotels rather than the properties themselves, with the sale set for November 6.

• Job creation: Private sector hiring soared in October, with ADP reporting 233,000 new jobs, surpassing forecasts despite hurricanes and labor strikes.

• Goldman refi: Goldman Sachs Alternatives provided a $55.5 million refinancing for Urban East, a 381-unit apartment complex in Austin, as the city’s multifamily market faces declining rents and low occupancy rates.

• Mounting pressure: Elie Schwartz faces mounting legal and financial woes, including halted investor payouts and federal investigations into alleged $50M embezzlement.

• Backing affordable: Brooklyn’s Borough President urges more affordable units, not fewer, in Apex’s 244-unit Park Slope project.

• Bangkok expansion: Equinix plans to invest $500 million over ten years in Bangkok, Thailand, with two new data centers to meet Southeast Asia’s growing digital demands.

• Iowa’s data hub: COPT Defense Properties plans a 1GW data center campus on 365 acres near Des Moines, Iowa, with phased development to support the region's growing tech presence.

• Retail conversion: Easton Group purchased the former Sears at Miami International Mall for $17.1M, planning up to 500 apartments as part of its ongoing investment in South Florida retail properties.

• Gold Coast: Luxury retailer Kith has leased a 17,600-square-foot building on Chicago’s Walton Street, marking a notable expansion as the Gold Coast retail district attracts high-end brands.

• Back to work: BXP CEO Owen Thomas sees office return mandates, led by firms like Amazon, reducing remote work’s impact on office demand, with leasing activity up 25% year-over-year.

• Google cuts back: Alphabet has spent $607M this year to reduce office space as it reallocates resources toward AI, while still investing selectively, including a planned 2026 move into Chicago’s Thompson Center.

📈 CHART OF THE DAY