Welcome to the CRE Daily
Welcome to the inaugural edition of CRE Daily rebrand and relaunch 🚀
Good morning. Notice something different? We’re excited to debut a fresh new look after migrating our email tech stack to beehiiv. In the interests of transparency, we wanted to peel back the curtain and explain who we are, why we've made the change, and what it means for you. Let's dive in!
Who writes the CRE Daily? Hey👋 my name is Jordan. I’m the editor and publisher of CRE Daily, a rapidly growing digital media company redefining commercial real estate news. Behind the scenes is a small (but mighty) team of seasoned real estate junkies and financial media execs. looking to shake up one of the most important but least understood industries.
Why did the CRE Daily switch over to Beehiiv? The CRE Daily is a rapidly growing daily newsletter with ~80k subscribers (thanks to y'all 🤝). Beehiiv offers us the best platform to produce quality content at a reasonable cost, so the switch was a no-brainer.
What does all of this mean for you? First, we want to thank you for being a part of our journey so far and sharing our newsletter with colleagues and friends. We are stoked to be here and couldn't have done it without our loyal readers. But the news isn’t the only reason we write CRE Daily. We’re here to build a community of the real estate leaders and decision-makers of today and tomorrow who are out to make their mark on the world.
To date, commercial real estate news and transactions have been our bread and butter, but we plan to gradually start adding more sections to the newsletter to expand our content (and value) for our subscribers. Here are a few examples:
Fewer Features, more Snippets: We’re giving readers more of what they want. These short, bite-sized takes on news stories cover a wide variety of trends and transactions curated by the CRE Daily team (a mix of editorial and sponsored).
Newsletter Advertising: We got to pay the bills somehow 🤷♂️. On a serious note, this is an exciting new opportunity for partners. Shoutout to today's launch sponsor, Greysteel. They're a leading middle market focused real estate investment banking firm, serving private and institutional investors. (You can request a copy of our media kit here)
Job Board + Collective: One-stop shop for highly-curated real estate job opportunities. (COMING SOON)
CRE Wire: Self-service press distribution tool for partners to highlight deals, new hires, M&A, etc. in the letter, on social, and to select media outlets. (COMING SOON)
Referral Program: Beehiiv will enable us to launch a referral system. Soon, each of you will have a personalized referral hub with a tiered award system. When you hit certain referral thresholds, you’ll be able to receive exclusive content and earn CRE Daily swag. (COMING SOON)
That’s it for now. More exciting announcements to come. In the meantime, if you have any feedback—good or bad—hit reply and let us know how we can improve.
Let's dive in!
CRE Assesses Impact Of Hurricane Ian
Hurricane Ian, which hit the west coast of Florida with 150mph winds, was one of the worst storms in American history. The real estate assets in Ian’s path (which stretch well beyond Florida) are worth an estimated $1.5 trillion.
Losses mount: Wind and storm-surge losses from Hurricane Ian could reach $47 billion in Florida alone, a figure made larger by inflation and rising interest rates, the property analytics firm CoreLogic said in a new analysis.
Between the lines: “Hurricane Ian will forever change the real estate industry and city infrastructure,” said CoreLogic. “Insurers will go into bankruptcy, homeowners will be forced into delinquency and insurance will become less accessible in regions like Florida.”
Ian is expected to be one of the top 10 costliest storms in the country’s history. Trepp, which tracks the value tied up in CMBS loans, estimates that the total potential debt exposure to properties in the path of Ian could be as high as $52B. It could take longer and cost more to rebuild than for previous storms amid continued supply chain constraints, a chronic labor shortage, and inflation that the Federal Reserve has yet to curtail with higher interest rates.
A Message from Greysteel
Greysteel, a national commercial real estate investment services firm, has listed a three-building portfolio in what's billed as a rare investment opportunity to own three trophy assets in the ultra-core submarket of Bethesda, MD.
The Downtown Bethesda Portfolio consists of two apartment buildings totaling 329 units and one medical office building totaling 55,517 rentable square feet. The properties are being offered individually and as a portfolio.
There’s Now a Peloton in Your Hilton, Just in Case
Hilton Hotels (HLT) and Peloton Interactive (PTON) have partnered up to put Peloton bikes in all 5,400 Hilton-brand hotels across the country because…why the hell not?
Yes, every single one: The partnership extends to all 18 Hilton brands, including Hampton Inn, Embassy Suites, and Doubletree. Each Hilton-branded hotel will have at least one Peloton bike in its fitness center. Hilton Honors members also get a 90-day free trial of the Peloton app.
You might want one at home, too: For Peloton, the partnership is a way to greatly boost brand awareness. According to Peloton, 1.6 million Peloton rides have already been completed by hotel guests this year. Many had their first experience with Peloton at their hotel, too.
Direct to your eyeballs: Before the pandemic, Peloton was flying sky high with its direct-to-consumer model. But after its stock cratered over 95%, the company decided to switch to a mass-market approach. So not only can you use a Peloton at your nearest Hilton, you can also buy Peloton bikes at Dick’s Sporting Goods (DKS).
Int. Buyers Wait For Better Deals as USD Surges
For the first time in a very long time, a dollar is worth more than a euro. For Americans, that’s fantastic. For European real estate investors interested in U.S. properties? Not so much.
Buyers not buying: When the dollar goes up and another currency goes down, the people whose use the other currency don’t want to buy U.S. properties because they end up paying more. It’s not a good deal for them right now, so they’d rather wait until the exchange rate is better.
Sellers definitely selling: On the flip side, foreign real estate investors who already own U.S. properties want to sell and book their gains because they’re getting more USD than they normally would. As an example, one dollar was worth two Brazilian reals in 2013. Now it’s worth 5.41 reals.
How long will this last? It’s hard to say. The current FX imbalance came about as a result of economic volatility caused by the war in Ukraine and the questionable fiscal policies that emerged from Europe in response. But Putin isn’t backing down anytime soon, either.
Asia-to-U.S. Shippers Cancel Sailings as Demand Drops
Not too long ago, just about every U.S. port was backlogged due to the pandemic. But as economic uncertainty weighs down consumer demand, dozens of Trans-Pacific shipments are set to be canceled despite much cheaper shipping rates.
Sharp reversal: During what should have been one of the best seasons for shipping, U.S. ports are filled with empty containers due to rising inflation and global economic turmoil. Trans-Pacific shipping rates have fallen 75% over the last 12 months alone.
By the numbers: In September, Pacific container capacity was down 13%, equivalent to grounding 21 ships that can each move 8,000 containers. And over the next two weeks, 21 out of 40 scheduled Trans-Pacific sailings have been scrapped.
Bunkering down: Shipping companies aren’t the only ones shelving inventory and canceling orders. FedEx (FDX) announced it would cancel flights and park cargo planes due to lower shipping volumes, while Nike (NKE) revealed it’s sitting on 65% more North American inventory than a year ago and would have to slash prices.
Because it’s French, duh: During the pandemic, Cartier noticed that wealthy Americans were still traveling to and buying properties in Europe. They’re betting they’ll eat up European luxury stateside, too.
Affordable living…coming soon: Charlottesville is around 33% done with a massive rezoning effort that will help shape the future of affordable housing in the city.
Are you kidding me? Some experts believe that Florida property values could drop by up to 50% once more buyers weigh the potential risks of regular hurricanes and flooding.
Fannie gets a makeover: Priscilla Almodovar, the CEO of affordable housing developer Enterprise Community Partners, was just tapped to be the new CEO of Fannie Mae (FNMA).
Serious stuff: Governments and companies worldwide looking to issue bonds will have to contend with high-as-hell bond refinancing costs, which really sucks for them.
Deals & Dealmakers
Filmmaker buffet: The 620,000 SF Television Center in Hollywood is getting a $600M redevelopment that will turn it into a creative urban studio campus.
What hurricane? The east coast of Florida fared a lot better after Ian, which may be why Avanath Capital Management snapped up City View, a 266-unit mixed-use property in Orlando, for $62.5M.
If you build it… NY-based Sky Harbour Group has decided to build a 1.1M SF hangar network for business jets. Because they will come, probably.
Proptech M&A: RealPage, a real estate software and data analytics provider, has agreed to acquire Knock CRM, a multifamily CRM solution, for an undisclosed amount.
Trading hands again: A large multifamily property in D.C.’s Adams Morgan neighborhood that has changed hands in several blockbuster deals sells on its own for $65.5M to a Swedish firm.
📈 Chart of the Day
Single-family rents are finally cooling in some of the 99 markets we track and forecast. It’ll be interesting to watch rental markets where institutional ownership is 15% to 20%+ of rentals. Wondering if big operators price rents to ‘meet the market’ faster to maintain occupancy.
— Rick Palacios Jr. (@RickPalaciosJr)
Oct 2, 2022
😎 Meme Drop
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