| | | | | | | | | | How does a 28% jump in U.S. office leasing strike you? That’s what CBRE reported on its quarterly earnings call this morning as it boasted record core earnings and projected double-digit growth in 2025. “There was a pretty profound shift in what was going on in office leasing toward the back half of last year,” CEO Bob Sulentic said on the call. “I don't think we're going to go all the way back to where we were in 2019. But it also appears, based on empirical evidence, that we're going to go further back than we thought we were before.” It wasn’t just office that rebounded. Leasing activity across all property types grew approximately 30% on aggregate in New York, San Francisco, Los Angeles, Chicago, Washington, D.C., and Boston. Dallas, Atlanta and Seattle outperformed those gateway markets. | | | | Property sales also rebounded 35% quarter-over-quarter for CBRE. The world’s largest brokerage clocked $10B in Q4 revenue, bringing it to $35.8B for the year, a 12% YOY increase. Sulentic said the brokerage had its best quarter ever for core earnings and free cash flow and called CBRE undervalued, citing $800M-plus in buybacks since Q3. The firm raised $10B in capital in 2024, with half coming in Q4, and it's expecting to raise a near-record amount this year, Chief Financial Officer Emma Giamartino said. That mirrors the only other major brokerage to report so far. Colliers, which saw revenue rise 11% last year to $4.8B, said it is targeting between $5B and $8B in new money this year as fundraising accelerates. “This is a building year with a new fundraising cycle starting, and we expect fundraising to pick up meaningfully into late 2025 hopefully and certainly in 2026,” Chief Financial Officer Christian Mayer said on its earnings call last week. — Kayla Carmicheal, Catie Dixon, Jay Rickey and Mark F. Bonner 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. CRE News Quiz The New York Stock Exchange is picking up its Chicago branch and moving it to a whole new state. Where is it going? (Answer at the bottom.) On Our Radar Nightingale CEO pleaded guilty to $54M CrowdStreet crowdfunding scheme. In federal court Wednesday, Nightingale Properties CEO Elie Schwartz pleaded guilty to wire fraud after raising nearly $63M from over 800 investors via the CrowdStreet platform. The funds, meant for acquisitions in Atlanta and Miami Beach, were instead spent on luxury items — one such item: a $120K Grönefeld 1941 Remontoire watch — and high-risk stock bets. “Seeking to do nothing more than pad his own bank accounts and buy expensive luxury items, Elie Schwartz betrayed hundreds of investors,” acting U.S. Attorney for the Northern District of Georgia Richard S. Moultrie Jr. said after the hearing. Schwartz faces up to 20 years in prison. Wholesale inflation rises, further complicating the Fed rate path. U.S. producer prices jumped 0.4% in January, exceeding forecasts, with food costs up 1.1% and energy rising 1.7%. Core PPI, excluding food and energy, increased by 0.3%, in line with expectations. Annual wholesale inflation hit 3.5%, fueled by a 44% spike in egg prices and rising commodity costs. The report follows hotter-than-expected consumer inflation, which will more than likely reduce the odds of multiple Fed rate cuts in 2025. “Don't waste time on it. I don't care how many people sign that f***ing petition.” That was JPMorgan CEO Jamie Dimon at a town hall meeting Wednesday rejecting a 950-signature employee petition to reinstate hybrid work. Dimon insists on implementing a five-day in-office policy, citing inefficiency in remote work and mandating 10% productivity gains across departments. Some JPMorgan employees have sought unionization advice from the Communications Workers of America, which recently helped organize a Wells Fargo branch in Albuquerque, a first for a major U.S. bank. Trump is set to announce new tariffs today at 1 p.m. ET. Ballyhooed as “the big one” on his Truth Social platform, the president said he will announce reciprocal tariffs aimed at matching foreign duties on U.S. goods. The announcement would follow recent 10% tariffs on all imports and 25% duties on steel and aluminum. Details remain unclear, but early reports this morning say nothing will go into effect today. Meanwhile, Indian Prime Minister Narendra Modi will meet Trump today at the White House to ease tensions on trade and immigration. Trump has criticized India’s high tariffs and its $46B trade surplus with the U.S.
Today’s Deep Dive: Congress Considers Banishing Most Federal Agency HQs From Nation's Capital | | | | Bisnow/Jon Banister | | | | | | | | A group of bipartisan lawmakers is looking to force federal agencies out of Washington, D.C., with a new bill in Congress. The Strategic Withdrawal of Agencies for Meaningful Placement Act, or SWAMP Act, seeks to decentralize government operations and directs federal agencies to solicit bids from municipalities to relocate around the country. The legislation would also prohibit federal agencies from starting any major office renovations or executing new leases in D.C. and the surrounding counties of Arlington, Fairfax, Loudoun and Prince William, Virginia. Read the full story here. This Morning’s News CAPITAL MARKETS — Brookfield Raises $500M For New Real Estate Fund (Bisnow): The Canadian investment manager has brought in $8.5B for its new real estate opportunity fund since its 2023 inception. Brookfield said it expected to hold a final close in the first half of this year, with an overall target of $15B. BAM has spent $2.3B of the fund so far. Read more here.
HOUSING — Welltower Buys $2.4B In Senior Housing (CO and Seeking Alpha): The REIT invested $2.4B in new assets in Q4 and plans to continue in 2025 with $8.7B of available liquidity to deploy. Read more here and here.
OFFICE — DOGE's Federal Real Estate Cuts Put $12B Of CMBS Debt At Risk (Bisnow): Office properties make up 87% of these loans’ exposure. Barclays said $28B of CMBS loans are tied to properties the government has leased. Read more here.
GOVERNMENT — GSA Layoffs Begin (SRN NEWS): The administration laid off more than 100 people at the agency responsible for overseeing U.S. government properties. Read more here.
RETAIL — Denny’s To Close Up To 90 Locations (Restaurant Dive): The chain expects to shutter 70 to 90 restaurants in 2025 compared to 88 store closures last year. Read more here.
HOUSING — Bowser Pushes Sweeping Reforms To D.C. Housing, Tenant Laws (Bisnow): D.C.’s mayor introduced legislation intended to stabilize the city’s housing system, which is on the verge of collapse. Read more here.
| | | | | | | | Pixabay/Vilkasss | | | | | | | | DATA CENTERS — Natural Gas Power Plant Pipeline Swells To Fuel Data Center Growth (Bisnow): Federal regulators are fast-tracking dozens of new gas power plants, and data center giants are revealing their plans for the same. Read more here.
ESG — EPA Moves To Reclaim Climate Law Grants (Bloomberg): The program distributed about $20B in funds in 2024 to nonprofits, community development organizations, credit unions and housing agencies, and has earmarked an additional $7B for solar. Read more here.
ESG — Trump Holds Power Over 60% Of IRA-Backed Projects (Oil Price): Companies announced plans for more than 550 manufacturing facilities after Inflation Reduction Act awards, but less than half of the 230 facilities that were slated to commence by the end of 2024 beat the deadline. That means 60% of IRA investments are now at the mercy of the Trump administration. Read more here.
| | | | | | | | Wikimedia Commons/Miami-Dade Fire Rescue Department | | | | | | | | HOUSING — Florida Shoot Down 'Bailout' For Owners Of Aging Condos (Bisnow): The state’s message for condo owners hoping for financial relief: Don’t count on it. Condo associations of buildings 30 years or older had to complete a structural integrity assessment and start funding reserves to cover repairs, according to a new law. Read more here.
RETAIL — Bargain Hunt Stores Up For Sale (A&G Real Estate): A&G Real Estate will market and sell 92 retail leases and one distribution center formerly occupied by Bargain Hunt. The discount retailer filed for Chapter 11 on February 3. Read more here.
LEGAL — Developer Sentenced For Real Estate Fraud (DOJ): An executive at Oceanpointe Property Management in Indianapolis engaged in a scheme to obtain money from real estate investors by misrepresenting the poor condition of properties managed and creating fake leases for unoccupied assets, according to the DOJ. Read more here.
REITs — Equinix Revenue Climbs Despite Lower Outlook (Equinix): The REIT reported $8.75B in revenue for 2024, 7% more than in 2023. But its operating income was $1.3B, an 8% year-over-year decrease. Read more here.
HOTELS — Hyatt Falls Short On Earnings, Sets Weak Guidance (Seeking Alpha): Hyatt's profit of $0.42 per share was down from $0.70 last year and $0.37 less than expected. Revenue was down 3.5% to $1.6B, also below expectations. Read more here.
DEVELOPMENT — Broad Street Eyes $2B Expansion (Broad Street): Matt Sobel and Ben Kahan have joined Broad Street Development to help execute the firm's investment strategy as it looks to acquire $2B in assets. Read more here.
| | | | | | | | Pexels/Kindel Media | | | | | | | | EVs — EVPassport, CBRE Team Up On Charging Expansion (EVPassport): CBRE will support the deployment of over 3,600 EV chargers across 600-plus U.S. sites, helping property owners and operators provide charging to residents and tenants. Read more here.
CAPITAL MARKETS — Ares' CRE Arm Cuts Dividends By 40% (Bisnow): Ares’ publicly traded subsidiary cut its dividend from $0.25 to $0.15 per share in Q1, reflecting a $35M annual loss and a nearly $11M loss in Q4. The company is working to resolve its high-risk loans, whose total balances increased 12% quarter-over-quarter. Read more here.
RETAIL — Mall Traffic Sees January Uptick (Chain Store Age): Visits were up 5.5% at indoor malls and 2.9% at open-air shopping centers compared to January 2024. Read more here.
MULTIFAMILY — Exclusive Suburbs Loosen Housing Restrictions (Bloomberg): States have passed at least 90 laws to increase the housing supply since 2023, mostly to ease zoning. Legislatures rarely passed such measures before 2017. Most Americans support these efforts. Read more here.
HOUSING — Supply Reaches Highest Level Since 2020 (Redfin): Inventory is surging, but demand has fallen to its lowest point in four years. Read more here.
LA FIRES — California’s $1B Insurer Bailout Adds To Housing Woes (Bloomberg): A $1B assessment announced this week for California’s state-mandated insurer of last resort is expected to drive up premiums as companies will likely pass some costs to homeowners. The charge is meant to help cover wildfire losses. Read more here. *** So You’ve Come For An Answer Dallas. The new NYSE Texas is just the latest move to build up exchanges in the Lone Star State, creating what has been dubbed Y’all Street. The planned Texas Stock Exchange has filed for SEC approval, and Nasdaq is opening a new regional management division in DFW. Texas has the largest number of NYSE listings, representing $3.7T in market value. Do you think you have a harder CRE news question? Email us. Take your best shot and we may feature you and your question in this space. *** 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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