Cooper Street Capital’s Post

We know there will be office properties taken back by lenders but will be interesting to see how great the impact will be on apartments, hotels, industrial, and other property types. The groups that used floating rates when buying assets in 2020-2022 with limited equity may get caught in the squeeze. Compared to GFC there should be very limited residential land and for sale housing coming into the marketplace. #realestate #lenderowned #distressedassets

KKR (NYSE:KKR) confirmed that it acquired more than 5,200 apartment units across the U.S. for $2.1B in its biggest purchase of apartment buildings ever, according to a media report. The transaction indicates that KKR is confident that the sector will rebound after a building boom weighed on rent growth in the past year. The private equity firm bought the portfolio from Quarterra, the apartment development unit of homebuilder Lennar (NYSE:LEN) in a deal that closed on Tuesday. The Wall Street Journal reported the acquisition earlier in the day. The portfolio consists of 18 multifamily assets located in coastal and Sunbelt markets, including California, Washington, Florida, Texas, Georgia, North Carolina, Colorado, and New Jersey. The increase in supply of multifamily housing has pulled down prices for the properties. Apartment building prices fell more than 20% in May from their July 2022 peak, the WSJ said, citing data from MSCI Real Assets. Similarly, sales of buildings in May dropped 44% from a year earlier. "We believe this is a great moment to invest in real estate, as transaction activity starts to pick up on the heels of two-years of dislocation in commercial real estate markets," said Justin Pattner, partner at KKR (KKR) and head of Real Estate Equity in the Americas.

Bottom line: This is all more evidence apartment supply will drop substantially in the second half of 2025, into 2026 and likely into 2027. And that should give confidence to operators and lenders banking on a market rebound over that time period.

U.S. apartment market sees best 1st quarter for net leasing in more than two decades!! It has been a rough 6 months of leasing for DFW multifamily, but we have felt a significant shift in the past month. Nearly 104,000 apartment units were occupied at the end of March than there were going into January. Sun Belt markets were top of the demand list. Consumer confidence continues to increase with the jobs market, and wage growth has outpaced rent growth for 15 months straight. Hopefully this volatile apartment market is finding its footing. The window is closing to get in at the bottom. Two more LOIs sent out this week on distressed deals. Please reach out if you have equity to place! #multifamily #realestate #privateequity #dallas #passiveincome

🌆🌟 The Panorama Tower in Miami: A True Gem in the Real Estate Market 🏢🌴 ㅤㅤㅤ 🏗️ Greystone Commercial Capital recently refinanced Miami’s tallest building, Panorama Tower, for a whopping $419,590,000 loan. This 85-story masterpiece offers luxurious apartments, office space, retail areas, and a Hyatt Centric Hotel. 🌇🌃 ㅤㅤㅤ 💰 The financing deal includes a Freddie Mac Optigo senior loan and subordinate debt, showcasing GCC’s innovative approach to structured finance. This project signifies a significant milestone in the future trends of real estate development and investment. 📈💼 ㅤㅤㅤ 🏡 Stay tuned for more updates on the real estate market, as we bring you the latest news and trends in the industry. Follow us and be part of the exciting journey ahead! 🚀🔑 ㅤㅤㅤ #RealEstate #Miami #PanoramaTower #LuxuryLiving #InvestmentOpportunity ㅤㅤㅤ

Origin Co-CEO David Scherer predicts a slowdown in new multifamily development in 2024, even as demand increases. Real estate lending is shrinking to historically low levels, threatening a rise in defaults on expiring debt and spurring a sharp decline in new construction starts of apartments and other property types. Apartment starts have fallen dramatically due to higher interest rates, declining rents and oversupply. David believes new construction won’t regain momentum for 12 to 18 months.      Read David’s article at the link in our comments to see his complete list of 10 predictions for the multifamily real estate market in 2024.   #multifamilyrealestate #realestateinvesting #multifamily #ceo #2024predictions

In today's dynamic market, the landscape of commercial real estate is evolving. With over $2.2 trillion in commercial mortgages set to mature by the end of 2027, opportunities are ripe for savvy investors. Distressed properties are in the spotlight, revealing unparalleled investments in multifamily, office, and retail sectors. Learn more: #commercialproperty #realestateinvestor  

Interesting chart & headline that grabbed my attention this morning. "CMBS Apartment Distress Rates up 185% in last 6 Months; Overall Rate Climbs to 8.62% for all CRE" It's important to note, CMBS is a small portion of the pie when it comes to financing apartments. However, it could be indicative of what other debt sources are feeling as well. 👀 The real *stuff* will start to hit the fan if/when collection rates drop. Many properties might be able to handle much higher interest rates with full occupancy. But a ton of them can't handle both much higher interest rates and a 5-7% decline in economic occupancy. It won't be ONE thing that creates problems... it will be a combination.

Buyers and sellers in U.S. commercial real estate are increasingly convinced that the beleaguered market is reaching a bottom. But the big question remains: At what price will beaten-down offices, apartments and other properties actually change hands?

The argument for buying distressed commercial real estate today is that interest rates are about to come down. But if interest rates come down because of a recession, then buying distressed CRE today is not a good idea. If the economy starts to slow down more meaningfully, as the consensus expects, the problems for rental housing, multifamily, and industrial will get a lot worse…