| | | | | | | | | | President-elect Donald Trump is filling his Cabinet with China hawks, but it now seems British Prime Minister Keir Starmer is about to test the UK’s “special relationship” with the U.S. Starmer met with Chinese President Xi Jinping at the G20 Summit in Rio de Janeiro today and said a “strong UK-China relationship is important for both of our countries.” Starmer sees better relations with China as a way to kick-start the moribund UK economy on a stronger growth path. That is a big shift from recent UK policy — he’s the first UK PM to meet Xi since Theresa May in 2018. It’s also a major pivot from recent policy orthodoxy in the West, which seems to have settled on the idea that China is a bad actor, both economically and politically. The U.S. has increasingly cracked down on Chinese investment (see new laws limiting Chinese-backed landownership), and a new Trump administration is expected to begin with massive tariffs on Chinese products. | | | | | | | | China hasn’t been a major force in real estate investment terms for a decade now, since the government in Beijing cracked down on overseas investment by Chinese firms to try and reduce the amount of debt in the property system. Recently in both the UK and U.S., Chinese firms have been more likely to be distressed sellers than keen buyers. A détente between the UK and China would have other real estate impacts. China wants to build a huge new £500M embassy in London. Locals hate the idea of it, but the government has now taken over the decision of whether it gets approval. The shift in policy suggests it might be a yes. And the UK, as a small island off the coast of the continent it recently decided to divorce, needs to walk a careful tightrope. China is a growing superpower, but the U.S. still dominates the global economy. The UK can’t afford to alienate either if it is to hit growth targets, which will ultimately dictate how CRE fares over the next decade. — Mike Phillips, Mark F. Bonner, Kayla Carmicheal, Catie Dixon and Jay Rickey Not getting The First Draft in your inbox? Click here to sign up. Got any feedback or want to send us a mailbag letter? Email first...@bisnow.com. On Our Radar The National Retail Federation projects a record 183.4 million shoppers during Thanksgiving weekend. That’s in-store and online, surpassing 2023's 182 million. Top motivations include unbeatable deals (57%), tradition (28%) and starting holiday shopping early (24%). Black Friday remains the most popular shopping day in the U.S., with 72% participation. Cyber Monday attracts 39%. Early shopping trends show 58% of consumers have already started holiday purchases, with 18-to-24-year-old shoppers driving activity. NRF forecasts holiday spending will reach record levels of $979.5B to $989B, growing by 2.5% to 3.5%. Rent inflation will likely persist until 2026. Despite recent housing rent metrics showing declines, a new Cleveland Fed model is showing fewer lease turnovers, causing CPI rent data to lag. Shelter costs, the largest CPI category, accounted for more than half of October's inflation rise, and analysts warn prolonged rent inflation could hinder the central bank’s ability to cut rates effectively. Declining renter mobility is further heightening the issue. The NAHB/Wells Fargo Housing Market Index rose to 46 in November. That reflects modest gains in builder confidence despite ongoing challenges. Current sales conditions hit 49, future sales expectations jumped to 64, and buyer traffic reached 32. About a third of builders are continuing price cuts, and 60% are offering incentives amid high interest rates, affordability issues and rising material costs. Historically, the HMI has mirrored housing market cycles, from a low of 8 during the 2008 financial crisis to a peak of 90 in 2020 during the pandemic-era housing boom. The ECB is split over EU banks’ capital gaps compared to U.S. rivals. An unpublished European Central Bank report reveals that EU banks’ capital requirements would rise by double digits under U.S. regulatory standards. The findings challenge claims by EU banks that their capital levels are already higher than U.S. counterparts, partly due to differences in risk-weighted asset calculations. Meanwhile, Trump's win may weaken U.S. adoption of stricter Basel III rules, intensifying global regulatory disparities. The EU remains committed to implementing Basel, with phased changes set to increase large banks' capital requirements by more than 12%.
Today’s Deep Dive: Why 7 Out Of 10 Industrial Lease Searches Are Coming Up Empty | | | | Pixabay/wal_172619 | | | | | | | | Good luck getting an industrial lease done these days. It seems like activity should be booming — brokers report interest from companies is maintaining the high levels of the last few years. But only 30% of searches are actually resulting in a signed lease, according to a new JLL report. And gone are the heady days when leases just took four months to sign. You’re looking at more like nine months these days — if (digital) pens do hit (digital) paper for a final contract at all. Several factors are at play, and while some are short-lived, like the cost of debt, others are more systemic and could keep industrial demand suppressed going forward. Read the full story here. This Morning’s News RETAIL — WH Smith Targets 500 North American Stores (Chain Store Age): WH Smith is doubling down on its North American expansion, aiming for 500 stores within four years. The London-based book-and-gifts retailer opened 40 stores in North America this year and now has 341 North American locations. Where to next?
RETAIL — Advance Auto Parts Shuttering Hundreds Of Stores (Bisnow): The car parts giant is closing 523 stores, separating from 204 independent locations and shuttering four distribution centers around the U.S. by the middle of next year. It said it will open new stores in other locations and is creating a new standard operating model for its shops. Find out more about the retailer's strategy..
PEOPLE — Federal Realty President To Depart (Federal Realty): Federal Realty Investment Trust President and Chief Operating Officer Jeffrey Berkes is leaving the REIT at the end of the year. Don Wood, Federal's CEO, will reassume the additional position of president. The position of COO will not be backfilled. Read more here.
PEOPLE — Lincoln Property Co. Hires CBRE Executives (CoStar): Lincoln Property Co. appointed former CBRE executives Norman Bertke and Laura Harkin to lead the growth of its corporate advisory business. Lincoln Property’s corporate advisory and solutions team serves as the real estate department for over 50 occupier clients in the United States. Learn more about the new hires.
HOUSING — Invitation Homes Launches $500M JV (Invitation Homes): Invitation Homes has formed a new JV that will deploy $500M to acquire newly constructed homes. Invitation Homes will contribute $50M and manage the properties. Get more details.
| | | | | | | | Courtesy of Location Ventures | | | | | | | | LEGAL — Developer Rishi Kapoor Settles With SEC (Bisnow): Kapoor, the former CEO of developer Location Ventures, has agreed to pay a cash judgment and not serve as an officer for any company that sells securities for the next five years as part of the settlement over an alleged $93M fraud. Read more about the alleged crime against investors.
INDUSTRIAL — EQT Exeter Acquires 4.5M SF (EQT Exeter): EQT Exeter has acquired 33 industrial assets in the Southeast and Midwest. Here are more specs.
REITs — Multifamily REITs’ Brighter Outlook (Nareit): Multifamily REITs posted returns of 26.6% so far this year versus 10.3% for the FTSE Nareit All Equity REITs Index. Dig into the numbers.
PEOPLE — Nashville Real Estate Developer Dies At 73 (The Tennessean): Bill Freeman, a major figure in Nashville’s real estate development and political spheres, has died at 73. He co-founded multifamily firm Freeman Webb Co., which has an 18,000-unit portfolio in the South. Read more here.
DEVELOPMENT — Mystery Real Estate Moves In Miami (WSJ): Ken Griffin controls a 4.2-acre development and office site in Miami's financial district — save for a 22-story condo tower in the middle of it called The Solaris. An unknown buyer or buyers have been acquiring multiple units in The Solaris through a series of LLCs based in Delaware. Uncover what's known.
PEOPLE — How A Real Estate Mogul Becomes Trump’s Middle East Liaison (WSJ): Steven Witkoff, a prominent real estate developer, has taken on a central role in Donald Trump’s Middle East dealings. Witkoff, 67, is described by peers in the real estate world as smart, personable and a talented negotiator. His appointment strengthens the view that Trump views the Middle East crisis as a complicated property negotiation. Get Witkoff's background.
LEGAL — Nate Paul Begins 10-Day Jail Sentence (KXAN-Austin): Texas real estate investor Nate Paul has started serving a 10-day jail sentence after being found in contempt of court. Why Paul was held in contempt.
RETAIL — Kirkland's Readies For Store Expansion (Gordon Brothers): Home décor retailer Kirkland's has retained Gordon Brothers to handle its store growth strategy. The home décor and furnishings retailer has launched a new partnership with the U.S. owner of Bed Bath & Beyond, Overstock, Zulily and other online retail brands. Beyond has invested in Kirkland’s to support the launch of new Bed Bath & Beyond small-format retail stores. Learn more about the growing footprint.
INVESTING — Real Estate Stocks Decline (Seeking Alpha): Stocks in the real estate sector dipped last week as affordability issues in the housing market and stagnation in commercial real estate weigh on investor sentiment. Read more here.
OFFICE — London Deal Takes U.S. Firm’s Spending Past £1.25B In UK (Bisnow): Ares Management is betting big in the UK, with its new purchase of a 60K SF office bringing total spending this year to over £1.25B. The property in London’s West End went for £135M. What else has Ares snapped up in the UK?
| | | | | | | | Unsplash/Clay Banks | | | | | | | | AIRPORTS — José Andrés Aims To Revolutionize Terminal Dining (NYT): Celebrity chef José Andrés is bringing his dining concepts to airports, hoping to elevate the traveler dining experience with high-quality, diverse food options. Airport restaurants generate about $7B in annual revenues. Inside the new restaurants.
CONSTRUCTION — Material Prices Rise Despite Drop In Other Inputs (NAHB): Prices for building materials have increased, even as costs for other construction inputs have declined. Dive into the report.
HOUSING — Midwest Rent Growth Outpaces National Average (CoStar): Tight apartment supply in the Midwest has driven annual rent growth in the region well above the U.S. average. Track Midwestern rents.
RETAIL — Mixed-Use Zoning Is Leaving Street-Level Storefronts Empty. It Doesn’t Have To Be That Way (Bisnow): Multifamily projects in mixed-use buildings are morphing to adapt to remote workers, but the retailers in those spaces are still struggling to find a place — and shoppers. Learn why. *** The First Draft is produced by Director of Newsletters Jay Rickey, Managing Editor Catie Dixon, Editor-in-Chief Mark F. Bonner and Deputy Newsletter Editor Kayla Carmicheal, with an assist from AI. We’d love your feedback! Email us at first...@bisnow.com. | | | | | | | | | | | | | | | | | | | | | |
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