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Good morning. The General Services Administration abruptly reversed plans to sell nearly 80 million square feet of federal property, highlighting tensions between the Trump administration’s downsizing efforts and real estate market realities.

Today’s issue is brought to you by PACE Loan Group—providing C-PACE loans for conversions, recapitalizations, and renovations.

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Market Snapshot

*Data as of 03/05/2024 market close.

Real Estate Reversal

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Is C-PACE the solution to vacant office buildings?

With many office buildings vacant or non-performing, property owners are looking for a viable financial and operational solution.

C-PACE can be an answer—for conversion to multifamily, recapitalization, or renovation to improve tenant and amenity spaces.

Construction planned or completed in the last three years?

Renovations that lead to conversions or improvements to tenant areas can be financed without recourse for up to 30 years in most states—even for improvements completed in the previous one to three years.

PLG recently provided C-PACE for two office transactions that fit under this umbrella: $15.8 million for an office-to-multifamily conversion in St. Paul, MN, and $24 million for the renovation of the 444 S. Flower office tower in Los Angeles, CA.

Contact us to determine if your asset is a good fit.

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• More CRE investment: Nearly 44% of family offices plan to boost real estate investments, focusing on residential and industrial as the market rebounds from 2023’s contraction.

• Private sector slows: Private employers added only 77K jobs in February, far below expectations. Trade and education sectors declined, while leisure and hospitality saw strong gains.

• Construction deaths surge: In 2023, NYC saw 30 construction worker deaths, the highest in a decade, with fatalities rising for the third straight year, prompting concerns over safety and regulation.

• Who’s on the list? Newly obtained internal emails expose Fannie Mae's growing mortgage fraud concerns, identifying eight real estate players with a collective $700 million in outstanding loans.

• Office to residential: Eric Adams is seeking a developer to convert the 100 Gold Street building into a mixed-income residential project with over 1K apartments, including 25% affordable units.

• Filing foreclosures: Community Stabilization Partners filed six foreclosures on eight NYC rent-stabilized properties, signaling risks to affordable housing amid rising costs and regulatory pressures.

• Refinancing NYU: Apollo Global Management (APO) refinanced NYU’s Lafayette Hall with a $180M loan, as student housing demand remains high in NYC, with vacancies at a 30-month low.

• Eviction moratoriums: New eviction moratoriums, like LA’s post-wildfire measure, raise concerns for landlords and tenants, as rent deferrals could lead to long-term strain and more evictions.

• Housing debate: Kohanoff’s proposal for an 8-story affordable housing building in Pacific Palisades sparks conflict between residents, developers, and advocates amid wildfire recovery efforts.

• Data optimism: Blackstone's (BX) Jon Gray remains bullish on data center infrastructure, highlighting its growing importance in AI and daily life despite challenges from emerging technologies.

• Warehouse bill: California lawmakers propose “clean-up” bills for AB 98, addressing logistics industry concerns about warehouse setbacks and truck routes while maintaining regulatory balance.

• Fund of the day: Brasa Capital closed its third real estate fund, raising $582M, with two-thirds directed to industrial and residential assets, 30% more than the previous fund.

• Kolkata mall: Blackstone (BX) is nearing a $400M deal to acquire South City Mall in Kolkata, marking its entry into the city’s retail market and expanding its Indian portfolio.

• Expanding in Atlanta: CTO Realty Growth (CTO) acquired Ashley Park for $79.8M, expanding its portfolio to 5.2M SF with the potential for strategic lease-up in the Atlanta retail market.

• Adaptive reuse rules: LA developers welcome proposed reforms to adaptive reuse laws, broadening eligible buildings for office-to-housing conversions amid the city's housing crisis.

• Making it there: Universal Music is in talks to lease 300K SF at Vornado’s (VNO) newly upgraded Penn 2 tower in Manhattan, a key step toward Vornado’s 80% leasing goal for 2025.

• Theater sale test: Ladder Capital lists the Dufwin Theater in Oakland for sale after seizing it from Embarcadero Capital, a test for demand in creative office spaces.

• Plano office campus: JBP Properties listed the 180K SF Parkside on Legacy in Plano for $22.5M, testing the market in Dallas' top suburb with an asking price of $125 PSF.

• Selling Chelsea: Han’s Holding Group sold the Hilton Garden Inn in Chelsea for $50M to Raymond Chau, a slight loss after purchasing the property for $53.8M nine years ago.

📈 CHART OF THE DAY