17 May, 2024
Rental home construction swells; Blackstone completes $705M resort sale
By Karl Angelo Vidal and Maira Imtiaz
S&P Global Market Intelligence offers our top picks of real estate news stories published throughout the week.
Residential developers are ramping up construction of new rental homes amid expensive home prices and high mortgage rates, The Wall Street Journal reported.
New single-family homes for rent grew 39% year over year to 93,000 in 2023, according to the report, citing estimates from John Burns Research and Consulting. Another 99,000 new homes are set to be constructed in 2024, though the pace is expected to slow in 2025.
Home affordability has been at its lowest level since the 1980s, while mortgage rates remain above 7%, leaving even many affluent Americans to continue renting homes. Homebuilders say a large number of people just prefer renting, according to the report.
CHART OF THE WEEK:
⮞ Seventy-two of the 118 public equity real estate investment trusts in the US analyzed have reported earnings above their respective consensus estimates for per-share funds from operations (FFO) in the first quarter.
⮞ Eighteen of the 23 retail REITs, accounting for 78.3% of the total, have surpassed their consensus FFO-per-share estimates.
⮞ Farmland REIT Farmland Partners Inc. reported adjusted FFO of 6 cents per share, much higher than the 1 cent-per-share estimate.
Top transactions
– Blackstone Inc. completed the sale of the Arizona Biltmore resort in Phoenix for $705 million, the Phoenix Business Journal reported, citing real estate database Vizzda. Henderson Park and Pyramid Global Hospitality acquired the property spanning 28 acres.
– Blackstone sold an industrial portfolio with more than 20 properties throughout New York and New Jersey for $246 million, The Real Deal reported, citing New York City property records. Industrial REIT Terreno Realty Corp. acquired the properties.
US hotel performance
The average daily rate (ADR), revenue per available room (RevPAR) and occupancy of US hotels climbed during the week ended May 11, STR reported, citing data from CoStar, which provides information and analytics on property markets.
ADR was $162.14, up 4.4% from the comparable week in 2023. RevPAR was 6.6% higher at $107.24. Occupancy increased 2.1% to 66.1% during the period.
Among the top 25 markets, San Francisco reported the highest year-over-year increase in all three metrics, including occupancy at 79.3%, ADR at $313.13 and RevPAR at $248.28.
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