| | | | | | | | | | A New York judge ordered a fractional real estate platform, Landa, to turn over 119 rental properties to an independent manager after the company allegedly flouted a court injunction and drained $724K from property accounts. The lawsuit, filed by lenders Viola Credit and L Finance, stems from $35M in loans tied to single-family rentals. Landa CEO Yishai Cohen launched the business in 2019 with no prior real estate experience. The company promised investors fractional ownership of rental properties for as little as $5. Now, financial disclosures reveal it lost $1.8M in the first half of 2024, quadrupling its losses from 2023, with nearly all properties operating at a deficit. Last year, Landa tenants told Bisnow their homes were in shambles — one said the conditions were akin to a “movie where the world just ended.” Dane Moreton, who invested $7000 in 13 Landa properties in 2023, recently told Bisnow he quickly grew skeptical as dividends didn’t match disclosed property performance. Now, he doubts he’ll ever recover his money. | | | | “If [Cohen] has indeed flouted court orders and absconded with investor funds, then he needs to be hunted down and made to pay for his crimes,” Moreton said. Judge Jennifer Schecter warned Landa of contempt if it continued violating orders. “Defendants brazenly have acted as if no restraints whatsoever have been imposed upon them …” attorneys for Viola Credit wrote in a Jan. 21 court filing. Cohen, though not a defendant, will testify in March. He denies the allegations. READ MORE: Startup Focused On 'Democratizing Real Estate' Ordered To Hand Over 119 Properties To Lender — Mark F. Bonner, Jay Rickey, Kayla Carmicheal and Catie Dixon 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 Why did S&P Global Ratings downgrade Office Properties Income Trust’s credit from CC to CCC? (Answer at the bottom.) On Our Radar Markets are bracing for impact as Trump's economic policies collide. Trump’s tax cuts, deregulation and energy expansion have spurred investment, but the whirlwind of tariffs, deportations and federal cuts are starting to take their toll, WSJ reports. The specter of deeper tariffs has rattled markets, with businesses scrambling to adjust supply chains and tariffs cited 172 times on earnings calls this month — up from 32 a year ago. Deportations are disrupting labor markets, with farmers reporting a 75% drop in workers after ICE raids. Despite initial optimism for Trump’s presidency, consumer sentiment and business confidence have dipped. Some firms are pausing investments, though AI, data center and energy sectors remain bullish. Fed Chair Jerome Powell: There is no urgency to lower interest rates. Speaking before the U.S. Senate Banking Committee this morning, he cited a strong economy, solid labor market and inflation that is still above 2%. “We do not need to be in a hurry to adjust our policy stance,” Powell said. The Fed’s benchmark rate remains at 4.25%-4.5%, with markets expecting no cuts until summer. Powell is set to testify on Wednesday before the House Financial Services Committee. U.S. small business optimism holds, but uncertainty is climbing. The NFIB Small Business Optimism Index fell 2.3 points to 102.8 in January, remaining above the 51-year average of 98. The Uncertainty Index jumped 14 points to 100, its third-highest reading ever recorded. Key concerns include hiring struggles, with 35% of owners unable to fill job openings, and inflation, which was cited by 18% as their top challenge. Capital investment plans dropped seven points, and 26% plan price hikes, down from December. First-time homebuyers used to be spring chickens — now they’re pushing 40. According to ResiClub, the median age of first-time U.S. homebuyers has surged from 28 in 1991 to 38 in 2024, reflecting affordability challenges and broader lifestyle shifts. Younger generations are delaying milestones like marriage and homeownership, while higher mortgage rates and rising home prices have strained access. Repeat buyers are also older — 42 in 1991 to 61 in 2024. That’s partly due to aging demographics and baby boomers leveraging home equity to buy with cash, bypassing high interest rates.
Today’s Deep Dive: Banks Return To The CRE Table With More Lending Appetite | | | | Pexels/Andrea De Santis | | | | | | | | Banks are aggressively reentering CRE lending after a two-year slowdown. The Federal Reserve’s latest survey shows minimal tightening of loan conditions, with banks accounting for 43% of nonagency loan closings in Q4 — up 18% from the previous quarter. CBRE’s Lending Momentum Index rose 21% from Q3 and 37% year-over-year, signaling a strong debt market recovery. Despite past volatility, banks are regaining their historical 50% market share in CRE debt. Read the full story here. This Morning’s News OFFICE — Hybrid Work Could Have A Lasting Impact (Chicago Booth Review): While office space demand fell by over 40% between 2019 and 2023 for companies where workers were expected to be in the office one day a week, it actually grew by 1% for companies where employees were expected in the office four or five days per week. Read more here.
DATA CENTERS — OpenAI Scouting 16 States For Stargate Projects (Bisnow): OpenAI is set to receive an additional $40B from SoftBank, elevating the artificial intelligence firm's valuation to $260B. The pair are part of the Stargate JV to develop extensive AI data center infrastructure across the U.S. Sixteen states are under consideration for these data centers, with Texas already having a flagship site under construction in Abilene. Read more here.
| | | | | | | | Wikimedia Commons/TechCrunch | | | | | | | | AI — Musk’s $97.4B OpenAI Takeover Bid Rejected (Bloomberg): OpenAI CEO Sam Altman dismissed Musk’s bid as an attempt to stall the company, reaffirming that OpenAI is "not for sale." Read more here.
M&A — Mergers And Acquisitions Poised For Growth In 2025 (CO): The relationship between a public REIT’s net asset value and its share price is the primary consideration for public-to-private takeovers and mergers. As public pricing gets closer to private NAVs, buyers have an easier time convincing boards on sales and mergers. Read more here.
MULTIFAMILY — ICE Enforcements Land On Apartment Industry’s Doorstep (Bisnow): Recent escalations in Immigration and Customs Enforcement operations have led to more frequent raids in apartment complexes. This has left property owners, managers and industry associations grappling with their legal responsibilities and the complexities of deportation enforcement. Read more here.
CONSTRUCTION — Contractors Confident As Backlog Grows (ABC): The latest Associated Builders and Contractors report said construction is expected to accelerate over the next six months. The backlog rose to 8.4 months in January, back to where it sat a year ago. Read more here.
REPORT — CRE Activity Index Rebounds In January (LightBox): LightBox’s transaction momentum index rose to 81.2, a sharp increase from 56.8 in December and a modest improvement from 80.5 in November. The firm said the reading indicates investor confidence is returning and the market is beginning to stabilize. Read more here.
| | | | | | | | Wikimedia Commons/Moreau1 | | | | | | | | HOTELS — Marriott Beats Estimates Amid Record Room Growth (Bloomberg and Seeking Alpha): Shares in Marriott were trading lower Tuesday morning after guidance for net room growth for the year proved softer than some analysts expected. Read more here and see its 2025 guidance here.
CAPITAL MARKETS — An Unexpected Boom In CRE Lending? (MPA): Commercial and multifamily loan originations are expected to climb 16% to $583B this year. Multifamily lending is projected to reach $361B. Loan originations surged 84% year-over-year in Q4. Read more here.
OPINION — JLL CEO: Real Estate Recovery ‘Fairly Robust’ (CNBC): "Commercial real estate is on an upswing," said Christian Ulbrich, CEO of JLL. "This upswing will likely continue for the next couple years.” Watch here.
OPINION — Skanska CEO: Construction Market ‘Very Stable’ (Construction Dive): The construction giant sees minimal disruption in public-side operations in the U.S. Read more here.
ECONOMY — Fed’s Hammack: Rates to Stay Put Until Inflation Drops Further (Bloomberg): Federal Reserve Bank of Cleveland President Beth Hammack says lingering upside risks to inflation and the potential for last year’s rate cuts to stoke economic activity are reasons to be patient on more interest rate cuts. Read more here.
PEOPLE — Lutnick Keeps $50M Newmark Bonus (Bloomberg): The settlement agreement with Howard Lutnick over a $50M bonus lets him keep the money, according to a court filing. Newmark will be paid back by insurance. Read more here.
HOTELS — Starwood, AJ Capital Open First Field & Stream Lodge (Hotel Investment Today): The outdoor lifestyle brand’s debut property is now accepting reservations. The hospitality platform plans to open properties near parks, beaches and ski towns, but no additional deals have been announced. Read more here.
| | | | | | | | Unsplash/NASA | | | | | | | | DATA CENTERS — Lonestar Is Ready For The Moon (Lonestar): Lonestar Data Holdings said Freedom, its next lunar data center mission, completed final lunar lander testing. Read more here.
MANUFACTURING — Owens Corning To Announce New Shingle Plant Location (Owens Corning): The building materials firm plans to reveal the site of a new Southeastern U.S. facility later this year. The Owens Corning Roofing business operates 17 manufacturing facilities in the U.S. Read more here.
RETAIL — B Malls Are Having A Resurgence (Retail Dive): Buyers are increasingly targeting Class-B malls. But can they withstand the decline of department store anchors? Read more here.
RETAIL — Macy’s Overhauling Brick-And-Mortar Strategy (Retail Dive): Macy’s Interim Chief Stores Officer Barbie Cameron will take on the role permanently. The retailer's plan to close 150 stores is about halfway done. Read more here.
INTERNATIONAL — China’s Property Market Still In Crisis (Bloomberg): Despite government interventions, oversupply and weak demand continue to stall real estate recovery. Read more here. *** So You’ve Come For An Answer The terms of the troubled REIT’s newly announced debt exchange plan raised analysts’ concerns. OPI is offering an exchange of notes on debt maturing between 2026 and 2031, with up to $175M in new notes with a 2030 maturity rate. But investors would receive less than promised. “If completed, we would treat this transaction as tantamount to a default,” S&P wrote. 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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