Together with

Good morning. The CRE Daily crew is back, refreshed and ready after a long MDW. In today’s issue: Interest rates and economic challenges have caused a sharp decline in multifamily investments. Plus, Starwood has further restricted redemption requests rather than selling off assets.

Today’s issue is brought to you by Opal Capital—invest in the future of hospitality.

Market Snapshot

*Data as of 5/24/2024 market close.

Property report

TOGETHER WITH OPAL CAPITAL

Invest in the Future of Hospitality

Opal Hotels Group, a private real estate investment company with 9 hotels in the Eastern U.S., is excited to offer a unique co-investment opportunity in a 95-room TownePlace Suites by Marriott.

Key Highlights:

• Prime Location: Adjacent to Interstate 40, central to Winston-Salem, High Point, and Greensboro, in a growing industrial hub.

• Modern Amenities: Studio and one-bedroom suites with fully equipped kitchens, fitness center, outdoor pool, patio, and guest laundry.

• High Demand: Positioned in a region with significant long-term stay needs.

• ​Extended Stay Segment: Benefit from daily rate flexibility and lower operating costs for long-term stays.

• Investment Opportunity: Enjoy a 12% preferred return and a 17.70% projected IRR over 5 years, plus significant tax savings from accelerated depreciation.

* Past performance and past distributions to investors may not be indicative of future results. An investment in real estate is speculative and subject to risk and as such there can be neither any assurance as to the final results of any such specific investment nor can there be any assurance that any investment strategy into securities offered by FNRP will achieve specific investment goals. Securities are only available to verified accredited investors who can bear the loss of their investment.

• Withdrawal: Starwood Real Estate Income Trust, facing a cash crunch, has further limited redemption requests instead of selling assets into a discounted market.

• Funding help: CVS is seeking private equity support for expanding Oak Street Health, which it acquired last year for $10.6 billion, to fund new clinics as part of Oak Street’s growth.

• “Home Alone”: The Winnetka house featured in the 1990 holiday classic could be yours for a cool $5.3M. This is the second time it’s been on the market since the movie debuted.

• Losing control: Opal Holdings lost Burnett Plaza in Fort Worth to Pinnacle Bank, which also accuses founder Shaya Prager of concealing ownership to secure an $83 million loan.

• Housing bill: New Arizona legislation allows developers to bypass local zoning to build multifamily homes and backyard granny flats near downtowns under two bipartisan bills.

• Gowanus project: Rabsky Group secured a $286M construction loan from G4 Capital for its 604-unit multifamily building, capitalizing on the industrial neighborhood’s 2021 rezoning.

• Cooling down: Nashville rental rates surged during the pandemic, but the boom is over, and property owners are now struggling to fill vacancies, according to a Redfin analyst.

• Hersch Tower: Joel Friedman placed the tallest tower in Union County into bankruptcy last week, halting a foreclosure auction for the unfinished luxury apartment conversion project.

• Salary gap: A new survey shows groundskeepers and porters at apartment properties have the lowest median base salary of $32,900 and the lowest average bonus of 4.2% in multifamily.

• Ribbon cutting: Dominium is set to open its first South Carolina affordable housing development today, Haven at Congaree Pointe, a 198-unit senior community in Columbia.

• Charlotte: LM Real Estate Partners has acquired a 1.4 MSF Premier Distribution Center for $97 million, marking the largest industrial sale of the year in Charlotte’s industrial market.

• Record expansion: Eli Lilly announced a $5.3B expansion of its Indiana plant to boost production of its weight-loss and diabetes treatments, its largest manufacturing investment to date.

• New construction: Philadelphia is poised to become a leading manufacturing hub, with ongoing and upcoming construction placing it among the top U.S. metros for new activity.

• Redevelopment: The Quay shopping center in Fort Lauderdale will be redeveloped by its new owners, who plan to add 361 residential units and 12,000 SF of retail and restaurant space.

• Consumer shift: Red Lobster’s abrupt Chapter 11 bankruptcy reflects a broader trend of major casual dining chains scaling back amid evolving consumer demands.

• Discount demand: Despite closing stores, Family Dollar maintained steady foot traffic in 2024, highlighting the ongoing demand for value-priced goods, according to PlacerAI.

• Back to work: HSBC opened its new US headquarters at The Spiral in NYC’s Hudson Yards, doubling employee attendance to 80% since February.

• Heavy loss: After seizing an Oak Brook office complex due to a distressed $58 million loan, Heitman has found a way to exit the property, resulting in a $12 million loss on its debt.

• Chicago foreclosure: Ivor Braka’s historic building at 332 South Michigan Avenue, opposite the Art Institute of Chicago, is facing foreclosure by LNR Partners over a $32.5 million loan.

• Relocation: Walmart is asking 1,266 employees from its Dallas technology innovation hub to relocate to other U.S. markets as part of its plan for remote employees to work from primary offices.

• High demand: The Reuben Brothers are planning a $2B oceanfront luxury resort in Puerto Rico called Esencia, featuring hotels by Aman, Mandarin Oriental, and Rosewood, with financing from JPMorgan Chase.

• Allen Hotel: Lenders have foreclosed on a partially complete Staybridge Suites in Allen after its owner defaulted on a $9.2M loan, with the 81K SF property set for auction on June 4 in Collin County.

📈 CHART OF THE DAY