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Good morning. Record supply, rising rates, and softening demand are creating a rocky start for the multifamily sector this year.

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Market Snapshot

*Data as of 01/21/2024 market close.

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• Tech Hubs: The US Department of Commerce allocated $210M in grants to six cities under its Tech Hub program, aiming to secure the nation’s place as a global tech leader.

• Sign of trouble: Long-term bond prices are falling, raising concerns about the feasibility of Trump's deficit-driven economic strategy if it makes government borrowing more expensive.

• Time is running out: As the US nears its debt ceiling, Treasury Secretary Janet Yellen announces emergency accounting actions to prevent a default, urging Congress to act swiftly.

• New America: Economic and pop-culture metrics show how the US has evolved since Trump's first term, with changes in GDP, inflation, unemployment, and cultural trends shaping his second act.

• It’s electric: Virginia's growing reliance on out-of-state power, driven by the surge of energy-hungry data centers, is pushing it to the forefront of US electricity imports.

• WeLive: Adam Neumann’s Flow won a court-approved auction for a 16-acre El Portal site with a $70.5M bid, outbidding Melo Group by $400K to secure the mixed-use development property.

• Refi of the day: KKR Group (KKR) provided a $73M refinancing loan for the 216-unit Bell South Bay Apartments in El Segundo, LA, navigating a volatile market with Walker & Dunlop's help.

• Capital commitment: Clear Investment Group acquired the 681-unit Marbury Plaza in Southeast DC and rebranded it as Langston Views, with plans to renovate and rebrand the property.

• Big deal: Palladius Capital Management acquired a $579M portfolio of 9 residential properties, including 2.5K+ units across multifamily and student housing, focusing on high-growth markets.

• Newly converted: As office markets struggle, multifamily investors seize the opportunity to convert them into housing, driven by strong demand, government incentives, and attractive returns.

• Data dynamics: As AI demand surges, the data center sector is on track to add up to 20 bps to US GDP by 2026, fueled by significant investments in infrastructure and energy.

• Better than ever: As South Florida’s industrial boom continues, the region is seeing an uptick in both vacancy rates and rent prices, driven by a surge in new warehouse construction.

• Windy industry: SL Industrial Partners acquired a 925 KSF portfolio of industrial flex properties in the suburbs of Chicago, a significant regional expansion.

• Changing hands: PGIM Real Estate has taken full ownership of Bella Terra, a prominent lifestyle center in Huntington Beach, CA, after DJM Capital Partners exited the property.

• What comes next: Retailers and consumers are bracing for the potential impact of proposed tariffs from President-elect Donald Trump’s second term, which could disrupt the retail landscape.

• Back to basics: A Colorado-based real estate group secured the acquisition of Alamance Crossing, the largest shopping center in Burlington, North Carolina.

• Meeting the demand: GFP Real Estate landed $288M to convert the office building at 222 Broadway into a multifamily complex, as part of New York's growing trend of office-to-resi conversions.

• Midtown moves: Sagehall joined RXR Realty (RXRA) as an equity partner in the 475 KSF office building at 530 Fifth Ave in Midtown Manhattan with a $180M recapitalization plan for the property.

• Silicon is durable: San Francisco's office investment market is showing signs of recovery, with 2024 ending in a deal uptick as the city's office market rebounds from pandemic-era lows.

• Eternal tourism: Blackstone (BX) agreed to purchase the 292-room Kimpton Hotel Eventi in Manhattan for $175M, capitalizing on the city’s rebounding hotel market and limited new hotel supply.

📈 CHART OF THE DAY