| | | | | | | | | | Well, there we have it. Donald Trump is heading back to the White House — the first president elected to nonconsecutive terms in more than 100 years. So it’s time to talk about what's next. Short term, CRE execs Bisnow interviewed in the wee hours of the morning said their eyes are on interest rates and tariffs. Some highlighted Trump’s talking points around influencing the Fed to cut rates faster as a positive for the industry, while others worried his push to supercharge the economy could bring inflation back and force the Fed to pull back on rate reductions. We’ll continue to track what a Trump presidency will mean for CRE, and we will keep our eyes on the U.S. House races to see if he gets the muscularity of a united Republican Congress behind him. (So far, it’s looking that way.) | | | | | | | | And there’s one thing in the lead-up everyone appeared to agree on: Like so many Americans, CRE just wanted it all to be over. Beyond the obvious weariness of a bruising campaign, real estate was craving clarity so they could get back to making business decisions. Consider that box checked, and more quickly than anticipated. So, did you or your clients indeed wake up today ready to sign deals now that you know who the next president is? Got analysis for us on a second Trump presidency’s impact on CRE? Our inbox is open: first...@bisnow.com. — Catie Dixon, Mark F. Bonner, Jay Rickey and Kayla Carmicheal 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 Trump trade is back and markets are erupting. The Dow climbed 1,300 points to a record high, the S&P jumped 2%, and the Nasdaq hit an all-time high. Small-cap stocks in the Russell 2000 spiked 4%, buoyed by expectations of pro-growth policies, including tax cuts and deregulation. The U.S. dollar saw its largest rise since 2020, and bitcoin hit a record high of $75K overnight. Fossil fuel, banking and pharma stocks surged. Tesla, closely aligned with Trump’s policies, was up 15% this morning. Meanwhile, the Mexican peso and Chinese yuan fell amid renewed trade concerns. The yield on 10-year Treasuries was up 18 basis points at 4.45%. It shifted on expectations that the new president's policies could stoke inflation, which in turn could mean interest rates are unlikely to drop as quickly as previously anticipated. That could slow the recovery in real estate investment markets, which have been praying for rate cuts for the past two years. The FOMC meeting starts today, and its decision on interest rates will come tomorrow afternoon. The Bank of England is expected to announce an interest rate cut tomorrow. But real estate investors will be carefully watching for guidance about the speed and timing of further cuts. UK government bond yields rose last week following the country's budget, with expectations that more inflation will lead to fewer rate cuts, and UK bond yields climbed again after U.S. 10-year Treasuries climbed on the back of Trump's election. The FTSE 350 Real Estate Index fell about 1.5% on Wednesday, compared with a 0.2% fall in the broader index. There are choppy waters ahead for UK CRE. Manufacturing is still contracting. The S&P U.S. Manufacturing Purchasing Managers Index was revised up to 48.5 for October after a 15-month low of 47.3 in September. Anything below 50 indicates a slowing from the month prior. A reduction in new orders drove the decline, with manufacturers citing election uncertainty as one reason for the slowdown. Employment is also contracting, and suppliers’ delivery times are lengthening, largely because of hurricane disruptions. California rejected Proposition 33, a measure that could have expanded rent control. This third attempt to pass such a measure saw over 62% of voters saying no, Bisnow reported. The defeat, seen as a setback for affordable housing advocates, means local governments will continue to be restricted in their ability to impose rent control on single-family homes and newer apartments. Opponents of the proposition, led by CRE players and major real estate associations, raised nearly $125M to fight it, arguing that expanded rent control would worsen housing affordability by lowering property values and discouraging new developments. Bisnow kept tabs on other CRE-fueled ballot measures around the country … Denver approved a $570M downtown revitalization initiative aimed at boosting economic growth. In Florida, Amendment 3 to legalize recreational marijuana fell short of the needed votes, affecting cannabis stocks this morning as CRE’s dreams of new demand for warehouses and storefronts were dashed. And Houston voters rejected a $4.4B bond, stalling hopes for real estate-backed infrastructure upgrades.
This Morning’s News | | | | Pexels/Kampus Production | | | | | | | | SENIOR HOUSING — Short Seller Accuses Skilled Nursing Facility Operator Worth Almost $7B Of 'Scamming Taxpayers' (Bisnow and Seeking Alpha): Short seller Hindenburg Research has accused senior housing company PACS Group of “systematically scamming” taxpayer-funded healthcare programs and fabricating an “illusion of legitimate growth and profitability” before it went public in April. PACS manages 300 nursing facilities in 16 states. PACS delayed its Q3 earnings release amid the scrutiny and a 30% drop in its stock. Dig into the report's findings and the company’s preliminary Q3 metrics.
MULTIFAMILY — Apartment Vacancy Finally Dips (Bisnow): The national multifamily vacancy rate fell for the first time in two years, down 20 bps to 5.3% in Q3, according to CBRE. The absorption of 153,300 units was one of the highest rates in 40 years. Rent growth was a nearly flat 0.3% YOY. What's contributing to the rise in apartment demand?
INDUSTRIAL — Lineage Takes Loss After Year’s Biggest U.S. IPO (Bloomberg and Lineage): Lineage Inc. released earnings for the first time since its $5.1B IPO, recording a net loss of $543M in Q3 but a 0.5% revenue increase to $1.3B. Lineage’s shares have fallen 7% since its July IPO. Read more here and dig into the earnings report.
OFFICE — Grindr's RTO Policy Under Legal Scrutiny (Bloomberg): The National Labor Relations Board alleges Grindr's return-to-office mandate intentionally hindered unionization, with nearly 80 staff departures following the policy. Here's why the NLRB says Grindr broke the law.
OFFICE — REIT Has Multiple Assets With 'Little To No Equity Value' (Bisnow): Vornado Realty Trust took a $20M net loss in Q3, which execs attributed mostly to a handful of “overleveraged” buildings that don’t contribute to funds from operations. It said it could turn those buildings over to its lenders rather than invest more capital into them. The REIT is one of New York’s largest office landlords and owns 32M SF across NYC, Chicago and San Francisco. Learn more about the state of Vornado.
HOTELS — Sternlicht’s SPAC Hits Brakes On Hotel Merger (ACBJ): Barry Sternlicht's SPAC, Jaws Mustang Acquisition Corp., has suspended its merger plans with Starwood's hotel assets as it faces a possible delisting from the NYSE. Get background about the canceled merger.
DEVELOPMENT — AvalonBay Expands As Development Grows (CO): AvalonBay Communities boosted its development pipeline with $450M in new projects last quarter and expects to launch $1.1B in new developments this year. Learn which markets proved fruitful for the multifamily owner and sift through its earnings report.
FINANCE — Starwood Property Trust Increased Investments In Q3 (Seeking Alpha): Starwood Property originated or acquired $2.1B of assets in Q3, the most since 2022. President Jeffrey DiModica said the firm is well-positioned to increase its investment pace. There's good news and bad news for Starwood.
FINANCE — Howard Hughes Sees Strong Q3 (CO): Howard Hughes Corp. reported better than expected earnings results for Q3, including a 163% rise in land sales revenue. The communities brought in $145M in pre-tax revenue.
HOTELS — What Is Summit Hotel Properties’ Next Move? (CoStar): Improved market conditions may prompt Summit Hotel Properties to capitalize on new opportunities and expand its hotel portfolio across key locations. The REIT has sold 10 hotels over the past 18 months.
| | | | | | | | Pixabay | | | | | | | | RETAIL — Amazon’s Delivery Drones Cleared For Takeoff (Seeking Alpha): Amazon’s MK30 delivery drone, designed to travel farther and quieter than prior models, has received FAA clearance, allowing the tech giant to ramp up its drone delivery services. Phoenix and College Station residents are up first.
SENIOR HOUSING — Ventas Buys 20-Property Portfolio (Multi-Housing News): Ventas has acquired 20 senior housing assets in a $725M deal. The properties include assisted living and memory care facilities across the Sun Belt, Northeast and Midwest. Discover where the assets are located.
PEOPLE — Vista Residential’s New CEO (Vista Residential Partners): Scott Henley is taking the helm as CEO of Vista Residential Partners. Henley was most recently with JLB Partners and is set to lead Vista’s expansion in the multifamily housing market. Here's more about Henley's previous experience.
PEOPLE — Macerich’s New CFO (Macerich): Macerich has appointed Daniel Swanstrom as chief financial officer. Current CFO Scott Kingsmore will remain with the company through December. It’s the second C-Suite departure at Macerich this year. Thomas O’Hern, Macerich’s former CEO, retired in Q1 and was replaced with former Spirit Realty Capital CEO Jackson Hsieh. Learn what role Kingsmore will take on until December 31.
PEOPLE — NHI Chairman Steps Down After 3 Decades (NHI): Andrew Adams, the founder and longtime chairman of National Health Investors, will retire at the end of 2024. He grew NHI into a healthcare real estate powerhouse with more than $3B in investments. Read more here.
SFR — Greykite, Gatehouse Commit To £750M SFR Investment (Bisnow): Greykite European Real Estate Fund I and Gatehouse Investment Management are partnering to invest in purpose-built single-family rentals across the UK. The £750M JV acquired a seed portfolio of 11 sites from Persimmon Homes. It said it could purchase more than £200M by the end of the year and is targeting an eventual 2,500-home portfolio. This comes two weeks after another boost to the UK's SFR market.
DEVELOPMENT — $2.5B Oklahoma Theme Park Hits Snags (Construction Dive): The ambitious American Heartland theme park in Oklahoma, a $2.5B project with a footprint that would rival Disney’s Magic Kingdom, hasn’t seen much progress since breaking ground last year. Contractors have filed liens on the property. Here's where the project stands. *** 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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