Real estate funding seen to drop in 2024; SL Green selling NY office for $632.5M

S&P Global Market Intelligence offers our top picks of real estate news stories published throughout the week.

Most real estate professionals in the US expect interest rates to stay high and funding for commercial properties to remain tougher to find over the next 12 months, according to a survey conducted by real estate intelligence provider Altus Group Ltd.

Of those surveyed, 41% expect interest rates to increase further while 35% said rates will remain stable. In terms of availability of capital, 44% of the respondents expect a decrease while 36% said it will remain stable.

"While there was a modest improvement in expectations for capital availability over the prior quarter, the current survey still reflects constrained expectations for capital availability from both equity and debt sources," Altus said in a fourth-quarter sentiment and industry condition report.

The firm surveyed 197 real estate professionals, representing at least 51 different firms, from Oct. 13 to Nov. 1. The respondents ranked industrial and multifamily to be the best-performing property types over the next 12 months, while office was projected to be the worst.

CHART OF THE WEEK: US REIT share repurchases soar in Q3

⮞ Share repurchase activity by US real estate investment trusts in the three months to Sept. 30 soared 83.6% quarter over quarter to nearly $1.02 billion.

⮞ Self-storage REIT National Storage Affiliates Trust repurchased the most common stock, buying back $213.2 million of shares.

⮞ Hotel REITs bought back the most shares of any property sectors, repurchasing an aggregate $229.5 million of common stock.

Hotel giants expand luxury portfolio

– Marriott International Inc. will open 24 luxury hotels and resorts in 2024. Overall, the company plans to expand its luxury offerings via a global development pipeline of more than 200 properties.

– Hyatt Hotels Corp. disclosed a development pipeline of more than 35 luxury hotels and resorts globally through 2025. These properties include brands such as Park Hyatt, Grand Hyatt, Miraval, Alila, Andaz, Thompson Hotels, and The Unbound Collection by Hyatt brands, as well as Inclusive Collection brands Zoëtry Wellness & Spa Resorts and Dreams Resorts & Spas.

Property lane

– SL Green Realty Corp. and its partners agreed to sell the fee ownership interest in 625 Madison Ave. in Manhattan for a gross sale price of $632.5 million, or $1,123 per square foot. Related Cos. is the buyer, The Real Deal reported, citing an unnamed source. The office building spans 563,000 square feet across 17 stories at 58th and 59th Street. The landlord will use the net proceeds from the sale to repay corporate debt.

– Macerich Co.'s joint venture that owns Tysons Corner Center closed a $710 million commercial mortgage-backed securities loan to refinance the Northern Virginia property. The loan replaces an existing $666 million debt scheduled to mature Jan. 1, 2024. The 1.8 million-square-foot property is anchored by Nordstrom, Bloomingdale's and Macy's.

– Manulife Investment Management (US) LLC partnered with Scannell Properties and StepStone Group Real Estate LP for a $1.2 billion recapitalization of a portfolio of class A industrial assets across the US. The 35 properties are newly constructed and span 10.4 million square feet across 17 markets.

See key people moves in North America real estate.

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US home prices continue upward trajectory in September