Property Owners for Elizabeth Warren! – Commercial Observer

Well, it wasn’t exactly the kind of announcement homeowners had been waiting for over the past two years, but after much hesitation over inflation numbers earlier this year, the Fed signaled (once again) that feet won’t fall Already… but rather in September.

It seemed a bit like a Goldilocks move.

SEE ALSO: Arbor Realty Trust beats earnings expectations despite troubled loans, investigation

“We know that tapering too early or too much can reverse the progress we’ve seen on inflation,” Fed Chairman Jerome Powell said. “At the same time, tapering too late or too little can unduly dampen economic activity and employment.”

For those who think only wealthy and influential landowners would condemn such caution, consider this: Progressive icon Senator Elizabeth Warren took on X the day after the newly minted the number of jobs was published showing that the unemployment rate has risen to 4.3 percent, which calls for immediate action.

“US Federal Reserve Chairman Powell made a grave mistake by not cutting interest rates” She wrote“He had been warned repeatedly that waiting too long risked driving the economy into a ditch.

“Employment data is flashing red,” she added.

“Powell should cancel his vacation and cut prices now — not wait six weeks.”

We’re not sure we could think of a landlord, broker, or REIT board member who would phrase it any differently. Well, everyone’s been waking up to strange political bedfellows lately. Let’s call this the latest iteration.

This is the season

We still have about a week of press conferences left, but there were several important press conferences last week.

KKR (KKR) got off to a flying start: the firm has $32 billion raised in the second quarter and closed about $10 billion worth of deals. (They also had a pretty strong start to the third quarter. the company bought 540 Fulton Street in Brooklyn from Jenel Real Estate for $240 million.)

Newmark (NMRK) certainly had a reason to be happy: Revenue rose 8.1 percent annually to $633.4 million. Investment sales rose 18 percent during the quarter, fees rose a whopping 46 percent for mortgage brokerage and debt placement, and another $208.6 million was earned from leasing and brokerage services.

However, not everyone has such pure, good news.

Ares Capital reported $48 million in unrealized losses and said profits fell from $331 million last year to $322 million.

According to a report by Cushman & Wakefield (CWK), the company’s revenue also fell by 5%. second quarter profits call, mainly due to a decline in capital markets business and valuation and services. However, C&W did see a nice 2 percent increase in leasing.

But sometimes it’s about managing expectations. Despite the fact that BXP’s (formerly Boston Properties) revenue fell from $292.8 million to $278.4 million, it was actually Better than expectedwith the company entering into 73 lease agreements for space totaling approximately 1.3 million square feet.

And while Arbor Realty TrustAlthough the company’s earnings cannot be called good (reported revenue of $47.4 million compared to $76.2 million in the same period last year), overcome expectationsespecially since Arbor is embroiled in the FBI scandal investigation about its lending practices and disclosures.

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Paused interest rate and earnings talks could spark a wave of headwinds, but many companies are considering starting to invest serious capital.

Last week, there was news that Blackstone was in the process of creating $2 billion purchase 10.7 million square feet of Retail Opportunity Investment Corporation shopping centers nationwide.

In Florida, the Alger family sells as much as 797 acres land near Homestead to Miami-Dade LLC for $56 million.

Some companies are taking big steps to expand their offices, such as BlackRock, which is taking 50,000 more square feet at 50 Hudson Yards owned by Related Companies.

Soccer GOAT Tom Brady signs lease 8,415 square foot office in the Terra’s The Well office building in South Florida. (Just don’t tell Nikki Glaser (where can he find it.)

And the money is going out the door. Ari Rastegar’s Rastegar Property Company has secured $31.7 million construction loan for a planned development of 1,000 single-family homes, 1,400 apartments, a school, and commercial space in Kyle, Texas.

In addition, Hines managed to get $142 million from Kennedy Lewis to purchase 242 acres of land in Loudoun County, Virginia, with the intention to build 1,000 homes.

Let it be so modest…

Yes, there was some significant activity in the multifamily and SFR sectors. And we’re not particularly surprised.

Housing is in a strange place. On the one hand, rents have started to fall across much of the country. Demand, which had reached such highs during the pandemic, has started to fall.

This year, about 560,000 multifamily units will hit the market. That’s a lot.

But because financial markets have essentially gone into hibernation since the Fed began raising interest rates, little has moved in the past year. The number of units to be delivered It is expected to fall sharply to 350,000 next year and 328,000 in 2026. So within two years, the country’s housing market is likely to go from a surplus to a shortage. For those who can get financing, it could be a good time to start building.

Of course, in New York the problems are a bit different.

Manhattan rents haven’t gone down. In fact increased in June. But the number of vacancies has also increased. In addition, rents can only increase by a certain amount.

“I think prices have definitely reached a tipping point,” said Gary Malin of the Corcoran Group. “And while the rental market is solid, vacancy rates are still higher than they typically are for this time of year. They’re over 2 percent (in Manhattan and Brooklyn), and that’s not because of a lack of demand or desire. It’s because of prices.”

Building in New York City comes with its own set of unique challenges. In addition to higher labor and land costs, the lack of incentives to build affordable housing has really hurt development. In 2022, when the 421a law was still in effect, the city offered about 35,640 multifamily building permits, according to an Avison Young analysis, but last year there were only 12,492 permits released.

It’s enough to make you give up New York and move to New Jersey.

And actually, if you did, you’d see that there are some really interesting things happening in Jersey City.

If you’re looking for something to read on this lazy Sunday afternoon, check the interview with Laurent Morali and Nicole Kushner Meyer of Kushner Companies, who discuss their $1 billion Garden State project. (And, for the record, Meyer is married to Observer Media CEO Joseph Meyer.)

See you next week!