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We’ve been obsessed with WeWork, CrowdStreet and LuxUrban for the last year. All of these companies have been going through hell for the last few years. They all apparently share the same guidebook on styling their brand names. And then they all announced new CEOs within a few hours of each other yesterday. Is there some CEO shuffle choreography going around we aren’t aware of? Let’s start with WeWork, which came out of bankruptcy yesterday with John Santora, previously Cushman & Wakefield’s global chief operating officer, newly appointed at the helm. David Tolley, who led the firm for just over a year, is out. Then crowdfunding platform CrowdStreet announced its new leader, John Imbriglia, former managing director at alternative investment marketplace iCapital. He takes over in a month from Jack Chandler, who has been interim CEO since Tore Steen stepped down in August amid the Nightingale Properties scandal. Imbriglia will have his work cut out for him, as crowdfunding activity everywhere has dwindled. CrowdStreet has only one active deal on its platform — and one other billed as “coming soon.” And wrapping up the trifecta, LuxUrban ousted its CEO and chief financial officer, Shanoop Kothari. The embattled hotel chain replaced him with Chief Operating Officer Robert Arigo, who joined the company in March. Kothari had been co-CEO with company founder Brian Ferdinand since November. Ferdinand has since resigned from the company and its board entirely. LuxUrban is trying to avoid a death spiral as it faces myriad lawsuits across the U.S. from landlords and vendors demanding millions in missed payments. Its stock is trading at 23 cents a share — down 96% in 2024 alone. — Catie Dixon, Kayla Carmicheal, Mark F. Bonner and Jay Rickey Not getting The First Draft in your inbox? Click here to sign up. Got any feedback for us? Email first...@bisnow.com. |
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On Our Radar
U.S. inflation cooled more than expected in May. The consumer price index increased by 3.3% compared to a year ago, down slightly from April's 3.4% rate. This marks the first time since July 2022 that the CPI didn't rise on a monthly basis. Retail investors loved the CPI report. On the inflation news — and in anticipation of today’s Fed decision — the Dow jumped 300 points and the S&P 500 and Nasdaq hit record highs. Speaking of … WTF? ‘What’s the Fed’ going to do now? Odds are nothing, but surprises aren’t completely out of the question. The interest rate decision will be made at 2 p.m. ET, and Fed Chair Jerome Powell will take the stage then. You can watch it with bated breath here. Oxford Economics revised its global CRE forecast. The advisory firm expects steady economic growth in 2024 will stabilize global real estate yields and values, with pricing recovering next year. Its baseline scenario projects global all-property total returns averaging 4.9% per year over 2024-2025, with downside scenarios like the “full-blown Trump” scenario and Middle East escalation potentially impacting returns. Dave & Buster's is reporting earnings after the markets close. It is expanding internationally, with agreements in place to open 33 locations, including in the Dominican Republic, Australia and India. It has an eye on building a 200-site international business. This Morning’s News Arbor Outperforms (WSJ): Short sellers have been heavily targeting Arbor Realty — “America’s most heavily shorted property stock" — but the expected downturn hasn't unfolded as predicted. See how Arbor has defied the naysayers.
Amazon Boosts Affordable Housing Efforts (Amazon): Amazon has committed an additional $1.4B to its affordable housing fund, aiming to increase housing equity near its major hubs. Dig into where the money is going.
Sonder Plans To Shutter 80 Locations, Gets $10M Capital Infusion (Bisnow): The short-term rental company is closing 80 properties totaling 3,200 units and reducing rent at another 25 sites. Read about the latest hit for Sonder this year.
Bankrupt Steward Health Care Secures Loan To Keep Hospitals Open (Bisnow): Three days before it was set to run out of money, Steward Health Care got a $225M loan from an unnamed investor that will keep its hospitals open. That will get Steward through the end of the month, when an auction is scheduled for its 31 facilities. Learn about the lifeline.
Today’s Deep Dive: Entry-Level CRE Job Openings Drop, Setting Up Talent Squeeze |
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Pexels/Mikhail Nilov
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We’ve all heard the joke. “Entry-level” jobs these days insist you have an advanced degree, 10 years of experience, a positive, can-do attitude and, oh, yeah, you need to come to the office five days a week and stay plugged into email over weekends and holidays. Salary: $30K. But new SelectLeaders/Bisnow data shows it’s no joke in CRE. The truth is, there are very few entry jobs in CRE these days. Listings of positions requesting zero to four years of experience are down 26% year-over-year in May on the SelectLeaders job board. Between May 2022 and 2023, there was a 35% decline. The jobs that do exist are often not appealing to new graduates, chasing even those interested in joining the industry elsewhere. Entry-level jobs are the easiest to outsource to artificial intelligence or an offshore team, but if CRE newbies can’t climb that first rung of the ladder, how will they ever make it to the second? That could spell trouble in the next decade for the midlevel ranks. Read the full story here.
TPG Executive Departs Cushman & Wakefield Board (Seeking Alpha): The last TPG representative on the CushWake board has resigned. TPG and investment manager PAG Asia Capital are looking to sell their combined 26.5 million shares in the brokerage firm. Get the details.
Office Buildings Selling At Massive Discounts (NYT): Buyers are acquiring distressed office buildings at steep discounts — up to 70% in some cases. These bargain hunters are paying all cash, content to wait for interest rates to come down before looking for financing. Read more here.
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AI image generated by Bisnow using Microsoft Copilot
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New Stock Exchange Could Make Texas An Even Stronger Corporate Draw (Bisnow): TXSE, a new stock exchange to be based in Dallas, has the potential to spur more investment and corporate relocation into Texas. Investors have raised $120M to create the exchange and aim to start trading in 2025. Examine the potential impact of “Y’all Street.”
Student Housing Market Slows (Yardi Matrix): Rent performance is split — 41 markets clocked double-digit increases last month but 34 declined. Dive into the latest data.
Continued Decrease In Housing Costs (Charlie Bilello): The shelter component of the Consumer Price Index has consistently declined year-over-year for 14 consecutive months. Read the post on X.
For The First Time In Forever, European Real Estate Made Money (Bisnow): European CRE posted a positive return in Q1 after a year and a half of losses. It isn’t much — 0.4% — but a drop in capital values of 0.8% was offset by a 1.2% increase in income return growth. Get the details from MSCI’s data.
Moody's Downgrades Allied Properties (Bloomberg): Allied Properties, a REIT that turns old downtown industrial and warehouse space into offices, has been downgraded to junk status by Moody’s due to persistent vacancy issues.Find out what the deal is with Allied.
Nuveen's Affordable Housing Initiative (PERE): CalPERS has committed $100M to anchor Nuveen Real Estate's U.S. Affordable Housing Fund, its first investment with the New York-based manager. Read more here.
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Wikimedia Commons
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How To Revitalize Downtowns With Affordable Office Space (WSJ): Calgary's new strategy to rejuvenate its downtown is a government-subsidized conversion program to repurpose cheap, vacant office spaces with no real strings attached, like an affordable housing requirement. Head to Canada for some incentivization ideas.
Economic Sentiment Stabilizes (Axios): The Business Roundtable CEO Economic Outlook Index indicates the U.S. economy is in a mid-year holding pattern, a stabilization phase. Dig through the index.
Innovative Solar Factory On The Horizon (BNN Bloomberg): A startup has ambitious plans to construct a next-generation solar manufacturing facility in the U.S. within two years. Its panels are able to capture the sun's energy more efficiently, but durability is a concern. Learn about a new way to harness the power of the sun.
National Construction Firm Opens First D.C.-Area Office (Bisnow): Suffolk Construction, which already operated in 11 U.S. markets, has entered D.C. It said the strong data center market particularly attracted it to that region. Read about the expansion.
The Rise Of Blue-Collar Gen Z (WSJ): The latest generation is redefining blue-collar work, making trades like plumbing and construction appealing and "cool" through social media and cultural shifts. How do you make construction cool?
Industrial Real Estate Battle Heats Up (CoStar): Blackstone and Prologis are in a bidding war for Terrafina, which owns 300 properties totaling 42.3M SF in Mexico. Get intel on the fight.
Bank Leaders On Office Real Estate Woes (Bloomberg): Bank executives say struggles within the real estate sector are predominantly confined to office spaces, while risks in other parts of the commercial real estate industry remain manageable. See why banks say you shouldn’t worry about them.
AI In Home Renovations? (WSJ): Explore how AI technology is increasingly being used to manage and streamline home renovation projects, reducing stress for homeowners. Read more here. *** 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 ChatGPT. We’d love your feedback! Email us at first...@bisnow.com. Was this email forwarded to you? Get on the distribution list here. Can you do us a favor? Add us to your contacts or safe senders list to ensure you receive The First Draft. Not sure how to do that? Here are some quick instructions. Thanks for making sure we keep our news 100% free to read! |
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