WeWork Fraudster's Empire Sold, Panic In CRE, Fed Expected To Hold Steady

[Bisnow First Draft]

It’s been a bit of a week of panic in CRE.  First, there was the whole DeepSeek AI release that made people question everything they knew about data center demand. Then yesterday, President Donald Trump’s freeze on federal funding, announced only the day before, was set to take effect. Initial guidance from the Office of Management and Budget about what exactly was frozen was very broad — it said the pause was “across-the-board” as the administration reviewed whether programs were “consistent with the president’s policies and requirements” — and chaos reigned yesterday as organizations across U.S. industries raced to find out what exactly the order meant for them.  Much of the concern in CRE revolved around housing.          The Mortgage Bankers Association said it couldn’t tell if the order included single-family and multifamily loan guarantees. Reports started trickling out about people possibly being unable to access rental assistance.  In Maine, the director of Bangor’s housing authority said he was locked out of the agency's bank account. Atlanta Mayor Andre Dickens said the move to freeze funding put some of the city's most vulnerable residents at greater risk.  “More than 18,000 residents who rely on housing vouchers currently do not know how their rent will be paid next month, and workers across various federally funded programs risk losing their pay,” he said.  But the industry got good news from the Department of Housing and Urban Development yesterday evening: Multifamily rental assistance is exempt. In the end, a federal judge stayed the order until Feb. 3, saying it presented “the specter of irreparable harm.” But wait! Amid all this craziness, Trump issued a “fork in the road” order that said federal employees could either agree to come to the office five days a week or could resign. The government is offering buyouts to about 2.3 million federal workers, which comes to eight months of pay if they resign by Feb. 6.  The Office of Personnel Management also said in its email to workers that its offices will “undergo meaningful consolidation and divestitures,” which could mean some workers have to relocate. There are still so many questions around all of this week’s uproars. Whether the data center industry is overbuilding, how government funding will shift under Trump and what that will mean for CRE, and what the government’s office footprint is going to look like are going to be sitting on the minds of the industry for a while. But can we maybe have a day without some existential CRE questions? — Mark F. Bonner, Kayla Carmicheal, Jay Rickey 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 What company did former Morgan Stanley Real Estate Global Chairman Guy Metcalfe just join? (Answer at the bottom.) On Our Radar The Fed is expected to hold rates steady today and focus on the future. The Fed will almost certainly hold rates at 4.25%-4.5%, its first pause since September after 100 bps of cuts over the last three meetings. Economic risks from Trump’s tariffs and lingering inflation fears have raised doubts about further cuts in 2025. More than 90% of analysts still expect at least one cut this year, but real fears are swirling that if inflation persists, the central bank could enact an extended pause — or even reinstitute hikes. After today’s 2 p.m. ET decision, Powell’s remarks should offer clues on the Fed’s next move. Then we’ll see what Trump has to say about it. NYC office demand leads U.S. markets and surpasses prepandemic levels. The city’s office tour activity surged 25.3% YOY, closing the year with a VTS Office Demand Index of 94 after briefly topping 100 in November. Tech and finance drove growth, solidifying NYC as the top U.S. office market. National office demand rose 12.3% in Q4, with the VODI up 39.1% since December 2022. San Francisco led annual growth (32.4%), while Chicago (15.6%) and Seattle (14.7%) saw steady gains from hybrid work adoption. According to VTS, the national VODI is on track to hit prepandemic levels within four years. Trump’s tariff plans are still unclear. Conflicting signals on Trump’s tariff strategy have businesses bracing for impact ahead of the Feb. 1 deadline for 25% tariffs on Canada and Mexico and 10% on China. A new report suggested a gradual rollout starting at 2.5%, but Trump shot it down, insisting the final rate will be “much bigger” and “enough to protect our country.” For CRE, tariffs could be a good thing or something “harder to dissect” depending on what sector you operate in. Commerce secretary nominee Howard Lutnick’s confirmation hearing today at 10 a.m. ET will be a key moment for insight into the administration’s trade agenda.  It is the Lunar New Year, the year of the wood snake. Prosperity to all! Mark’s son learned at school yesterday that it is bad luck to have a messy home on this day, so he cleaned his room last night without having to be nagged. Score one for the Bonner family on this day of wisdom and growth. This Morning’s News MULTIFAMILY — EQT Exeter Pulls Out Of Multifamily Fund (Bisnow): EQT’s real estate arm, which is being rebranded from EQT Exeter to EQT Real Estate, is withdrawing from multifamily, life sciences and office to focus on industrial investment. It said poor fundraising is responsible for the shift. Read more here. INDUSTRIAL — GE Vernova Pours $600M Into U.S. Facilities (GE): GE Vernova says it will invest about $600M in its U.S. factories and facilities in the next two years to help meet surging electricity demands. The new investments are the first part of a larger $9B investment plan announced at the company’s investor update on Dec. 10. Read more here.     Pexels/Muffin Creatives         INDUSTRIAL — CHIPS Act Grants In Trump’s Crosshairs? (Seeking Alpha): CHIPS Act grants to semiconductor companies are in "limbo" but "likely to survive," analysts with Bank of America wrote to investors. "While this story is still unfolding, we note: reports suggest the budget office is saying CHIPS funding hasn’t been paused." Read more here. CONSTRUCTION — Judge Deals Blow To Collective Bargaining On Federal Construction Projects (Bisnow): A federal judge blocked a Biden Executive Order that required contractors to enter into project labor agreements to get federal contracts larger than $35M. The judge said mandating PLAs was anticompetitive, "arbitrary and capricious.” The Associated General Contractors of America had lobbied against the rule. Read more here. RETAIL — Starbucks CEO Targets Store Expansion (WSJ): The coffee giant plans to double its company-owned store footprint, including with smaller-format cafes. Starbucks will close some locations while adding and renovating others, he said. Read more here. RETAIL — Container Store Exits Bankruptcy As Private Retailer (CoStar): The deal to go private slashed about $88M in debt and brings a $40M cash infusion. A&G Realty is reviewing the retailer's real estate portfolio to negotiate modifications with landlords. Read more here. RETAIL — $32M Chunk Of WeWork Fraudster's Retail Empire Sold (Bisnow): The $600M retail portfolio of Jonathan Larmore, who awaits sentencing for a fraud conviction over a fake bid for WeWork, is being auctioned off by the government to pay back victims of another fraud scheme. The SEC accused Larmore and his company, Arciterra, of defrauding investors out of $35M. So far, 14 properties have sold. Read more here. FINANCE — CRE Finance Council Survey Signals Optimism (CRE Finance Council): While higher-for-longer interest rates remain the primary concern, the industry appears to be adapting to this new environment. An overwhelming 95% of respondents expect CRE transaction volume to increase by at least 10% in 2025. Read more here. LIFE SCIENCES — Alexandria Sees Trump Admin Bolstering Biotech (Bisnow): Alexandria Real Estate Equities sold $1.1B of assets in Q4, just missing its $1.2B target as it rejiggers its portfolio to focus on megacampuses. The life sciences specialist leased 5.1M SF last year, a tough one for the sector. Nearly 10% of its inventory is facing lease expirations in 2025. Read more here. HOTELS — IHG To Ramp Up Hotel Development With $250M Construction Lending Program (Bisnow): IHG Hotels & Resorts is partnering with investment platform Avana Cos. on a $250M co-lending construction program, providing loans to owners and developers to convert or build hotels under IHG brands. Read more here.           Kyle Hagerty, Bisnow         PEOPLE — Amazon Taps Whole Foods CEO To Lead Global Grocery (Grocery Gazette): The e-commerce giant promoted Whole Foods chief Jason Buechel to vice president of Worldwide Grocery Stores. Amazon’s physical store sales earned nearly $20B in its most recently completed fiscal year. Read more here. FINANCE —  Commercial Property Delinquencies Tick Up In Q4 (MBA): Mortgage Bankers Association data shows 5.3% of CMBS loan balances were 30 days or more delinquent, up from 4.8% at the end of Q3. Read more here. PEOPLE — Wharf Project Director Joins Fallon (Fallon): The executive behind D.C.’s $3.2B Wharf redevelopment is now leading Fallon Co.’s portfolio of large-scale, mixed-use projects. Last year, Fallon was designated as the master developer of Nashville’s East Bank development, a multibillion-dollar initiative to transform Nashville's waterfront into an urban neighborhood. Read more here. DEVELOPMENT — Cooper Health Breaks Ground On $3B Expansion (Philly Voice): The South Jersey health system is adding three patient towers to Cooper's downtown campus. Read more here. HOTELS — Russell Wilson, Ciara Back SBE’s HQ Hotels Expansion (HQ Hotels): The power couple joins the advisory board for SBE’s new luxury brand, which aims to develop 50 hotels in six years. Read more here. HOUSING — Trump’s Anti-‘Wokeness’ Agenda Could Reshape Housing (Real Estate News): At least 100 HUD programs are under scrutiny, according to one document, threatening initiatives focused on radon remediation, Fair Housing laws and Native American housing support. Read more here. INVESTMENT — Trump Brand No Longer A Liability In Real Estate (Curbed): Once a sales deterrent, properties with the Trump name are seeing renewed interest from buyers. Read more here. LEGAL — Second Real Estate Agent Charged With Wildfire Price Gouging (Fox News): Prosecutors have accused another agent of exploiting displaced victims. The DOJ has sent more than 650 warning letters, with more coming to hotels and landlords who have been accused of price gouging, California Attorney General Rob Bonta said. Read more here. HOUSING — Colorado Military Base To House Migrants (Bloomberg): ICE officials will be able to use Buckley Space Force Base facilities this week. ICE says it has already made more than 4,000 arrests. Read more here. *** So You’ve Come For An Answer Metcalfe is joining KKR as senior adviser for global real estate. He will support KKR’s investments and grow its platform. At Morgan Stanley, Metcalfe was in the investment banking side for 33 years. After leaving, he became a board member at CBRE and Prologis. 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.

www.bisnow.com 123 William St, Suite 1505, New York NY 10038 Singlearticleemail Approval Code: 83475 Unsubscribe | Unsubscribe from All | About | Contact         You are receiving this email because you are either a member of the Bisnow community, have attended a Bisnow event, because you have a legitimate interest in real estate news and events because of your profession, or because of your business associations, memberships or partnerships. The views and opinions expressed in advertisements throughout this publication (digital ads and orange text links) are those of the advertiser and do not necessarily reflect the views and opinions of Bisnow. Some ads may contain affiliate links from which Bisnow may receive a small fee.     © Copyright 2025 Bisnow. All Rights Reserved