There’s a practical chorus of big investors and experts saying that commercial real estate, excepting maybe office, is getting closer to bottom if not there already. But not everyone. Drew McKnight, Fortress Investment Group co-CEO & managing partner, was far more cautious in a recent CNBC interview. “I think it’s top of the first inning. If you look at the number of defaults today, it’s very, very low,” he said, pointing to a number of reasons. One is extension of maturities by lenders who don’t want impaired assets to sit on their balance sheets. But further, he said that “capital structures are upside down,” and not just in office but also multifamily. “Real estate was the biggest beneficiary of low rates,” he added. “And unless rates can reset and reset quickly, I just don’t see an easy solution.” He pointed to the Resolution Trust Corporation (RTC) and the infamous S&L crisis.
[contact card icon] Fortress Investment Group
Eli Edwards (Managing Director-Acquisitions) 415-284-7526 |[email protected]
[link icon] Other News:
SoftBank Sells Fortress Stake to Abu Dhabi’s Mubadala who will own 70% of the equity in Fortress (5/22/23)
I am thrilled to share that I’ve joined Madera Residential to head up investment strategy. My hope is to help Madera expand its successful multifamily investment platform (11k+ units today) across the South in all asset classes — including new Class A new development and distressed value-add. And I’m also very excited to help build out an attainable housing platform to serve middle-income renters.
Yes, I will continue posting commentaries and articles on LinkedIn and elsewhere. (I’ve been asked that a lot lately… and it’s very flattering!) I’m also launching a rental housing economics newsletter at jayparsons dot com (sign-up link below in the comments, but it’ll be a couple weeks before the first newsletter goes out)…
Madera Residential
Jay Parsons (Head of Investment Strategy) 806-798-0888 |[email protected]
Sentinel, one of the United States’ largest private multifamily real estate owners, began as the investment arm for partners of the Smith Barney investment group. In the 1970s, the company expanded to include pension fund investments. John H. Streicker purchased the business from Smith Barney in 1988 and oversaw its growth to an $11 billion portfolio, primarily focused on multifamily housing. Today, Sentinel Real Estate owns approximately 27,000 apartments, mostly located within the U.S., along with additional properties in Germany, the Netherlands, and Australia. Following Mr. Streicker’s passing in 2022, his son Michael now leads the company….In October of last year, the New York City Rent Guidelines Board adopted new rules that severely limited rent increases. This decision caused the value of properties under the new laws to plummet, especially amidst rising interest rates and inflation. Ultimately, Sentinel decided it needed to offload these struggling properties and is now selling around 1,300 apartments for a reported 40% discount. It seems like Sentinel has lost its appetite for investment in New York, even though the company remains headquartered in the city. In the past few years, Sentinel has focused its investments on Australia, Northern California, and Texas..
Sentinel Real Estate Corporation
Alan Greenberg (First Vice President-Residential) 216-408-2926 |[email protected]
The asset management arm of Goldman Sachs is making a bet that the U.S. commercial real estate market has already hit its low point and will resume investment in the sector moving forward, executives said Wednesday. Goldman Sachs Asset Management will pick up where it left off in “actively investing,” in U.S. commercial real estate, GSAM co-Head of real estate Jim Garman told Reuters at the MIPIM real estate conference in Cannes, France. Many firms are still shying away from the market as prices for office and multifamily properties fall, interest rates remain elevated, office vacancies remain high and new construction slows, with some projects being abandoned altogether. GSAM, however, is optimistic about an industry recovery and is ready to start buying. “The reason is a combination of interest rates coming down, we feel like the market is bottoming out, and because we’re starting to see a floor in prices set by buyers who are in the market,” Garman told Reuters.
Goldman Sachs
Katie Bloom (MD-Acquisitions/Dispositions) 972-368-2682 |[email protected]
Global real estate investment company Kennedy Wilson said Monday real estate debt investment platform more than doubled in size in the past year and has reached $7 billion in originations with a strong pipeline of new opportunities. The milestone comes on the heels of Kennedy Wilson’s acquisition of a $4.1-billion loan portfolio from a regional bank in June 2023 and the subsequent integration of the bank’s lending team.
Since the acquisition of the portfolio, the debt team has closed approximately $500 million of new loans, with $1.3 billion currently expected to close by the second quarter of 2024. The focus has been primarily on multifamily and student housing construction lending opportunities with high-quality sponsors seeking loans in the range of $40 million to $200 million.
Kennedy Wilson
Thomas Whitesell (Head of Debt Investment) 310-887-6400 |[email protected]
Other Harrison Street news:
Kennedy Wilson eyes expanding construction-lending business (11/10/23)
From Vizzda: On 3/19/24 an entity tracing to LV Collective acquired 1020 East Apache Blvd for $15,000,000 from an entity tracing to J Mark and Associates with up to a $130,000,000 construction mortgage in new debt with Kayne Anderson.
LV Collective (fka Lincoln Ventures)
Brendan Morrow (Chief Development Officer) 512-410-0342 |[email protected]
Other LV Collective news:
LV Collective to Build 289-Unit Tempe Rental Community near Rural/Apache (1/25/24)
LV Collective Considering Two UT-Area High-Rises for Student Housing (7/24/23)
LV Collective Going Vertical on 48-Story, 557-unit Austin Tower (3/8/23)
Korman Communities, in partnership with RXR, recently completed its latest project, a 17-floor, 254-unit apartment community that will offer both flexible-stay furnished apartments and luxury apartment rentals. AVE Phoenix Sky will feature 17,000 square feet of amenity space, and 4,350 square feet of retail, mainly for a future restaurant.
Korman Communities
Gabe Marabella (MD-Investments) 484-351-2000 |[email protected]
RXR Realty
David Kelly (SVP-Investments) 212-715-6151 | [email protected]
From Vizzda: On 3/18/24 an entity tracing to Wood Partners acquired the property for $3,450,000 ($16.30 per SF) from an entity tracing to Aldi with an unspecified amount of new debt per Affidavit.
Wood Partners
Todd Taylor (Managing Director) 480-607-0622 | [email protected]
Other Wood Partners news:
Wood Partners luxury apartments, Alta Biltmore ready for occupancy (3/21/24)
Greystar Takes Over Wood Partners’ Property Management Arm (2/2/24)
A high-traffic Scottsdale intersection could be home to a new multifamily development.
Denver-based DPC Cos, which has developed projects in the Valley such as Scottsdale Entrada and the Park at San Tan in Chandler, is proposing a new residential mixed-use development near Scottsdale Road and Shea Boulevard. The project, dubbed Cosanti Commons, is up for consideration at Scottsdale’s development review board March 21 for a minor general plan amendment and rezoning.
DPC Cos., through an entity known as New 7000 East Shea LLC, is proposing to build 240 multifamily units near the northwest corner of Scottsdale Road and Shea Boulevard, one of the busiest intersections in the region. The project, which is being proposed as a four-story building and will be about 380,000 square feet. DPC Cos. is partnering with High Street Residential, a wholly owned subsidiary of Dallas-based Trammell Crow Co., to develop the apartments, which will replace an existing multitenant commercial building located on the 8.5-acre site.
DPC Companies
Justin Leutgen (CIO) 720-528-3349 | [email protected]
Linda Vista Luxury Rentals, an Aerie Development project at 375 E Linda Vista Blvd in Oro Valley, held its Grand Opening on Tuesday in coordination with the Oro Valley Chamber of Commerce. Having just received its COO, MEB management, the leasing and management company, has started leasing units in the ever-growing Oro Valley. The 54-unit community consists of (12) one-bedroom and (42) two-bedroom units.
Aerie Development
Roger Karber (Chairman) 520-977-5456 | [email protected]
From Vizzda: On 3/14/24 an entity tracing to Larry Scaramella acquired Cambria for $51,300,000 from an entity tracing to Bridge Investment Group Partners with $21,000,000 down and a $31,546,000 Freddie Mac loan originating with Berkadia. The loan has a maturity date of April 1, 2029. Seller’s annualized ROI calculates to 7.37%after previously purchasing the property for $35,125,000 on 11/16/2018.
Larry Scaramella
Larry Scaramella 858-456-7180 | [email protected]
From Vizzda: On 3/14/24 an entity tracing to FSO Capital Partners acquired the property for $8,800,000 from an entity tracing to Jonathan Roper, with $2,569,930 down and $6,230,070 in new debt with The Bancorp Bank.
FSO Capital
Jeff Sherman (Principal) 602-694-1127 | [email protected]
Knightvest Capital has purchased Discovery at Shadow Creek Ranch, a 347-unit garden-style community in Pearland, Texas. The previous owner was CBRE Investment Management according to Yardi Matrix data. Public records show Knightvest took out a $35.8 million Freddie Mac acquisition loan from Berkadia. With this acquisition, the firm’s US footprint grew to more than 35,000 units. Nearly 24,900 apartments are clustered in the Southwest, according to Yardi Matrix data. The firm’s metro Houston portfolio totals roughly 9,900 units. Zooming in further, the Dallas-Fort Worth market holds north of 11,000 Knightvest units. The company recently bolstered its presence in the metro with the acquisition of Dorian Apartments, a 398-unit community that it also rebranded and plans to further renovate.
Knightvest Capital
Sean Clancy (SVP Acquisitions) 713-397-0961 | [email protected]
Other Knightvest news:
Knightvest Capital acquires 398-unit Dallas-area asset (1/23/24)
Knightvest Capital launches Capital Fund II (1/9/24)
Knightvest acquires 336-unit Pflugerville Multifamily Community (7/27/23)
Hamilton Zanze has sold BLVD at Medical Center, a 248-unit community in San Antonio. The firm had purchased the value-add asset in 2016 from Clarion Partners, financing the acquisition with an $18 million Fannie Mae loan from Manufacturers and Traders Trust Co., Yardi Matrix data shows.
Hamilton Zanze & Company
Anthony Ly (Director of Dispositions) 415-579-9600 |[email protected]
A grouping of four separate investors have joined forces to acquire a 395-unit apartment complex, that they plan to convert from market-rate units to rents that are determined by the income of the renter. Waterford Property Company, The Vistria Group, and Northern Liberties, in partnership with the Dallas Housing Finance Corporation (DHFC) bought the Domain at Midtown Park Blvd. With this acquisition, the owners will immediately restrict rents for new qualified residents to create stable workforce housing as part of an agreement with DHFC in exchange for 100 percent property tax abatement for 99 years.
Waterford Property Company
Sean Rawson (Head of Acquisitions/Development) 949-529-3530 |[email protected]
Hines and Urban Street Development have broken ground on the Food, Art and Technology Village, a mixed-use master-planned destination in Fort Lauderdale, Fla.’s Flagler Village. A 5.6-acre urban development, FAT Village aims to revitalize the focal point of the art-centric district with new housing, retail, restaurant, office space and entertainment options. The groundbreaking follows the origination of a $220 million construction loan and represents a major milestone in the project…The residential component of FAT Village will include The Gallery at FAT Village at 600 North Andrews Ave., a 16-story, 263-unit, partially affordable tower featuring studio, one- and two-bedroom apartments and controlled access. A second tower, FAT Village West, located at 501 North Andrews Ave., will be a fully affordable 13-story property featuring 249 apartments and a rooftop terrace and pool. The third tower, FAT Village East, situated at 501 North Andrews Ave., will be a 24-story building featuring 355 apartments with private balconies and patios, as well as a swimming pool.
Hines
Chris Anderson (MF/Commercial) 972-716-2909 | [email protected]
Other Hines news:
Hines Exploring Another Dallas Residential Tower (12/12/23)
Plano Greenlights 390-Unit Multifamily/Pickleball Project (10/13/23)
Pappas Properties received approval from the Charlotte City Council to move ahead on Phase III of its mixed-use project on Pearl Park Way. The Charlotte Business Journal reports the okay will allow for a planned multifamily tower to reach a maximum height of 275 feet with 425 units. Ten units have to be rent-restricted. This final phase also includes a 150-room hotel, up to 100,000 square feet of office space and up to 35,000 square feet of retail. Solis Midtown, the project’s most recent phase, delivered last summer. That 329-unit property at 1133 Harding Place, was developed by Terwilliger Pappas. Atrium Health’s Kenilworth Medical Plaza I and II, also the project’s second phase, opened in April 2021 at Kenilworth Avenue and Harding Place. The $228.1 million medical plaza includes more than 250 exam rooms. Phase one included a $28 million headquarters building for Canopy Realtor Association. That 60,000-square-foot building opened in September 2019
Pappas Properties
Tom Walsh (MD-Acquisitions/Dispositions) 704-716-3915 |[email protected]
Alternative real asset investment manager Harrison Street with $56 billion assets under management, has devoted one fund, now at $2 billion and potentially expanding to $4 billion, with one focus on the growing 80-plus age range, according to PERE. And that’s going to mean senior housing. The firm’s Harrison Street Real Estate Partners Fund IX, launched in 2022, had more than $1 billion by September 2023. The target is $3 billion, which would be its largest ever, and there’s a cap of $4 billion. The Chicago-based firm told MarketWatch that instead of focusing on traditional property categories, it concentrates on demographics. In this case, the data says that the next few years will see an explosion of baby boomers in their 80s as new healthcare technology lets people live longer, which means a coming need for a lot more senior housing. The National Investment Center estimates that there will be a need for at least 156,000 more units of senior housing by 2025, 549,000 by 2028, and 806,000 by 2030.
Harrison Street Real Estate Capital
Michael Gordon (CIO NA) 312-920-0500 | [email protected]
Other Harrison Street news:
Harrison Street Plots Growth With Easterly Partnership (3/6/24)
Jacksonville Police & Fire commits $15m to Harrison Street real estate fund (2/7/24)
Harrison Street sells 994-bed, Epoch Clemson, near Clemson University (1/8/24)
Investcorp and two leading sovereign wealth funds have formed a new venture focused on acquiring industrial real estate assets across the U.S. The new venture will build on the success and strategy of the initial venture established in November 2021. Across both ventures, the two SWFs, alongside Investcorp, have committed more than $1 billion of equity over the past two-and-a-half years to acquire industrial real estate.
“The U.S. industrial sector continues to exhibit strong fundamentals, and we continue to see attractive opportunities to expand our investments in the last-mile subset of this asset class,” said Herb Myers, co-head of real estate, United States for Investcorp. He continued, “In particular, e-commerce, the rapid growth of nearshoring trends, and U.S. fiscal policy and government spending continue to drive record demand for last-mile facilities located near large and growing population centers. In addition, the assets we will be targeting for this venture remain largely insulated from the supply issues impacting big-box industrial warehouses.”
Investcorp’s industrial real estate holdings in the U.S. currently total $5.1 billion across 43 million square feet. The new venture will provide Bahrain-based Investcorp with the ability to meaningfully increase its U.S. industrial market presence..
Investcorp
Affan Ahmed (VP-Acquisitions) 646-690-5001 | [email protected]
Other Investcorp news:
Investcorp pays $89.7M ($366,122/unit | $105,529/bed) for 245-unit, 850-bed student housing complex near Kennesaw State (11/13/23)
The Parker Tucson at 947 N Park Avenue, a luxury student housing complex with 130 units / 482 beds in 213,400 square feet living space in an 8-story LEED Silver Certified community. The Parker Tucson sold for $132.5 million ($1.02 million per unit and $621 PSF), setting a new record sale price of over $1 million per unit and $274,896 per bed.
Inland Real Estate Investment Corporation
Matt Tice (SVP, Acquisitions) 972-930-0555 | [email protected]
Other Inland news:
Inland closes JV of student housing QOZ development near Florida State (3/20/24)
Inland buys 190-unit, BTR project, The Bungalows at Westgate for $62M ($326,316/unit)(1/22/24)
Inland Venture Partners expands footprint into Arizona, rounding out second manufactured housing offering (9/28/23)
The joint venture between PeakMade Real Estate and Blue Vista Capital Management has opened the 329-bed second and final phase of Theory Gainesville. The 298-unit, 861-bed student housing community in Gainesville, Fla., serves the University of Florida. The project’s 532-bed first phase came online last August and is more than 95 percent occupied. A total of 80 percent of the entire community is already preleased for the next academic year.
Blue Vista Capital Management
Matthew Schoaf (Principal Acquisitions) 312-324-6076 |[email protected]
Brian Minnehan (SVP, Head of Student Housing Acquisitions) 312-324-6076 |[email protected]
Other Blue Vista news:
PeakMade, Blue Vista Open 674-bed Atlanta student housing community, Theory Interlock (9/26/23)
Blue Vista completes 11 self-storage, industrial and BTR transactions (8/15/23)
Blue Vista Acquires Florida BTR Development (6/7/23)
Inland Real Estate Acquisitions has announced that it negotiated and closed a joint venture for a student housing development in Tallahassee, Fla. Inland Acquisitions, with assistance from The Inland Real Estate Group, LLC, Law Department, completed the transaction on behalf of an Inland affiliate. The site, located in a qualified opportunity zone (QOZ), will be developed into a purpose-built student housing property, named Hub Tallahassee, near the Florida State University campus pursuant to a joint venture between the Inland affiliate and co-developers Core Spaces and Peerless Development. Located at the northeast border of FSU campus, the seven-story property will include 367 units and 1,316 beds in studio through six-bedroom floor plans. Hub Tallahassee also will feature a top-of-market amenity package, including a resort-style rooftop pool deck, fitness center and spa, private study rooms and adjacent parking.
Inland Real Estate Investment Corporation
Matt Tice (SVP, Acquisitions) 972-930-0555 | [email protected]
Other Inland news:
Inland buys 190-unit, BTR project, The Bungalows at Westgate for $62M ($326,316/unit)(1/22/24)
Inland Venture Partners expands footprint into Arizona, rounding out second manufactured housing offering (9/28/23)