The volume of commercial property sales in July was down 74% from a year earlier, and sales of downtown office buildings hit the lowest level in at least two decades.
Landlord Fees
The five largest single-family-home rental landlords increased their annual fee income per lease by about 40% between 2018 and 2021
Lending Trend
The Mortgage Bankers Association predicts commercial-property lending will have fallen 38% by the end of this year, when compared with 2022.
CRE Dry Powder
A record $205.5 billion of cash is earmarked for investment in U.S. commercial real estate.
HT KSL
Private equity firm KSL said it intends to buy Hersha Hospitality Trust, the owner of 25 U.S. lifestyle and luxury hotels, in an all-cash transaction worth about $1.4 billion. The move would take private Hersha at an approximately 60% premium to the real-estate investment trust’s closing stock price on Friday. Its value was 14 times Hersha’s estimated year-to-date EBITDA of $99 million for 2023.
BX Bellagio Sale
Blackstone is cashing in on the recovery of Las Vegas by selling a 22% stake in the Bellagio in a deal that values the asset at $5.1 billion. Realty Income is paying $300 million for the 22% stake in the landmark casino and resort, which are operated by MGM Resorts International under a long-term lease.
Hotel Fees
More hotels are monetizing the mountain of daily requests for early check-ins and late checkouts with fees for extra hours in the room.
Office Leases
In the second quarter, U.S. businesses signed new leases for an estimated 97.5 million square feet, up from 57.4 million square feet in the second quarter of 2020, the low point of the pandemic. But, the average U.S. office lease size was 3,275 square feet, or 19% less than the average lease size between 2015 and 2019.
Smaller Homes
Since 2018, the average unit size for new housing starts has decreased 10% nationally to 2,420 square feet. Construction starts for new single-family homes declined in 2022, but starts for homes with fewer than three bedrooms increased 9.5% over the same period.
Retail Rents
While retail landlords in some areas, including large cities, have been forced to lower rents since the start of the pandemic, the overall average asking rent for retail space in the U.S. has increased 6.3% since the second quarter of 2020. Asking rents now average more than $23 a square foot, the highest level in at least a decade.