The Bisnow Weekender: We Know What Dad Wants For Father's Day

Thanks for reading the Bisnow Weekender, my personally curated roundup of the most impactful news, notable quotes, binge-worthy show recommendations and other colorful highlights from the Bisnow world of commercial real estate and beyond. 

So, what does Dad want for Father’s Day? 

An interest rate adjustment, of course — the same thing your mom didn’t get for Mother’s Day. 

But you’ve already heard enough from me on interest rates. 

Instead, I just want to say I hope you all have a great weekend. This edition of the Weekender is dedicated to my dad, Big Mark aka Da Bayou Bull, down in New Orleans. You’ve always been stronger than garlic in my eyes.

OK, let’s jump in …

— Mark F. Bonner, Bisnow Editor-in-Chief

Voices From The CRE Battlefield

Joy Subdivision pic.twitter.com/cpv3pCm2t5

— IntellectualDorkWeb (@Intel_Dork) June 6, 2024

One of my favorite parts about working in RE is the mindless takes that things will pick back up in 6 months that I’ve been hearing regularly for 18 months now

— Drew (@meaty_bones) January 31, 2024

The Best Of Bisnow News: June 10-14

Federal Reserve Holds Rates Steady, Signals One Cut In 2024 As CRE Grows Increasingly Impatient — Chicago Reporter Ryan Wangman

The result was widely anticipated by economists, especially given recent inflation data. The most recent consumer price index showed that prices ticked up 3.3% on an annualized basis in May, but the slowdown in inflation sputtered in the first three months of 2024. Those results stymied investors' hopes that the Fed could assertively cut rates.

But it still came as a blow to commercial real estate players, who have been banging the table for the Fed to reduce rates and ease tensions in a tough financing environment. 

“The question for real estate is how much longer can investors hold out?” said Derek Tang, an economist at LH Meyer. 

“If you're going through it for, let's say, a couple of years, then maybe people are able to delay things a little bit. Maybe they have a little cushion they can depend on, they can move other things around in their portfolios. But if this is going to be a longer-term trend, then we're going to need some permanent solutions.”

***

Entry-Level CRE Job Openings Drop, Setting Up Talent Squeeze — National Reporter Patrick Sisson

Entry-level jobs in commercial real estate have declined steadily over the last two years, piling on the challenges faced by young adults interested in CRE careers and threatening their ability to gain the skills and experience needed to advance to senior and leadership roles. 

Data from real estate job site SelectLeaders suggests a significant decline in opportunities. As of May, listings of positions requesting zero to four years of experience are down 26% year-over-year. Between May 2022 and 2023, there was a 35% decline. 

In addition to a weak commercial real estate market, these jobs are among the first to be outsourced to artificial intelligence or overseas workers, and their absence can leave lasting impacts on the career paths of would-be CRE pros. 

“We’re in this glass-half-empty version of the Goldilocks story, where the uncertainty has been spread out for just long enough that people are happy to just not make decisions,” said Andy Hunt, director of the real estate program at Marquette University in Milwaukee. “And that trickles down to the entry-level hiring more than almost anything.”

***

Foreign Investment In U.S. CRE Tumbles To Lowest Point Since 2011 — New York Reporter Ciara Long

Foreign investors spent $14B on U.S. commercial properties in the first three months of the year, according to MSCI Real Assets data provided to Bisnow, down from $27.7B in the first quarter of 2023. The last time international investors spent that little money on U.S. CRE was Q3 2011.

The nosedive in foreign investment mirrors the moribund investment market overall, as owners have demonstrated a continued reluctance to sell while valuations are low and borrowing costs are high.  

“If I'm a current owner and I'm thinking about selling and I think to myself, ‘Well, rates might be a bit lower in the future, I might be able to get a better deal in the near future,’” Jim Costello, chief economist at MSCI Real Assets, said in an interview. “So unless somebody forces me to, I'm not going to sell.” 

Some of the pullback has been from investors in the Asia-Pacific region, with some expressing more interest in investing in U.S. debt funds than directly buying property, Costello said. 

More Big News From The Week …

— WeWork Taps Cushman & Wakefield Exec As New CEO As It Exits Bankruptcy

— Nuveen Names William Huffman New CEO

— CrowdStreet Names New CEO As Platform's Deal Volume Dwindles

— 'Somebody Lit A Fire': Interest Rate Stability Reignites Industrial Deal Flow

— Fitch: Office Loan Delinquencies Will Surpass Global Financial Crisis Levels

— What’s Inside The $2.7B Plan To Protect Miami Real Estate From Catastrophic Floods

My Slightly On/Off-Topic Media Diet

Scott Rechler: There's Been A Day Of Reckoning For Commercial Real Estate (Bloomberg Podcasts): “There's been a day of reckoning coming and it's somewhat been delayed. Last year as the Federal Reserve got a little bit more dovish in their tone, people thought maybe interest rates were coming down. But I think the industry is now going through its five stages of grief and they've gone past the denial and are now at acceptance.”

America Seems Immune To The World Economy’s Problems (The Economist): “Some monetary divergence is the natural consequence of America’s stronger growth. But what is striking about America is how immune its markets appear to be to the threat of political dysfunction and fiscal frailty.”

What Do Students At Elite Colleges Really Want? (NYT): “Many of Harvard’s Generation Z say ‘sellout’ is not an insult. … Despite the popular image of this generation — that of Greta Thunberg and the Parkland activists — as one driven by idealism, Gen Z students at these schools appear to be strikingly corporate-minded.”

Gen Z Plumbers And Construction Workers Are Making #BlueCollar Cool (WSJ): “[Lexis] Czumak-Abreu’s path is one that more young Americans are considering. Skepticism about the cost and value of four-year degrees is growing, and enrollment in vocational programs has risen as young people pursue well-paying jobs that don’t require desks or so much debt, and come with the potential to be your own boss. The number of students enrolled in vocational-focused community colleges rose 16% last year to its highest level since the National Student Clearinghouse began tracking such data in 2018.”

Colorado’s Weed Market Is Coming Down Hard, And It’s Making Other States Nervous (Politico): “What once was a success story has now left a trail of failed businesses and cash-strapped entrepreneurs in its wake. Regulatory burdens, an oversaturated market and increasing competition from nearby states have all landed major blows, leaving other states with newer marijuana markets scrambling to avoid the same mistakes.”

Quit Being A Cynic At Work. It’s Holding You Back (WSJ): “Betrayed once, we practice what Zaki calls ‘pre-disappointment,’ always assuming others will let us down. The mindset feels productive and cunning, like we’ll be able to protect ourselves. But [Jamil Zaki, a Stanford University psychology professor] says it can actually stunt our careers in the long run, and hurt our mental and physical health. ‘By never trusting, cynics never lose,’ he writes. ‘They also never win.’”

Mayor Proclaims ‘Back That Azz Up’ Day In New Orleans (WWL): “According to the proclamation issued by Mayor Cantrell, ‘Back That Azz Up transcended its roots to become a cultural phenomenon, celebrated for its infectious beat and memorable lyrics that continue to resonate with generations.’ Cantrell’s proclamation also says ‘this legendary song has remarkably become the most played wedding song in America, uniting people across the nation in joy and celebration, and exemplifying the unifying power of music.’”

Bisnow Weekend Interview Preview

David Greaney has been swimming against the current lately. His firm, Synergy Investments, has acquired three office buildings in Boston over the last nine months — one of them the largest sale in the city since 2019 — and another mixed-use building. 

Greaney, an Irish immigrant who came to Beantown in the 1990s, launched his company in 2003 and went on a buying spree during the Great Recession. In an interview with Bisnow Boston Reporter Taylor Driscoll, Greaney said he is planning to keep all three office buildings as the same use, rather than following the trendy strategy of converting to apartments, because he believes in the office market.

Bisnow: What gave you the confidence at a time when everyone else is running away from the office sector?

Greaney: Bullish is probably too strong a word, but we certainly have conviction. … We’ve been active because one, we have conviction in the space. We believe in office. Two, we believe in Boston as a market, and three, we really liked the price. Without all three of those components, you wouldn’t see us being the most active buyer in the market, because it’s difficult right now. It’s very difficult to get out and underwrite these deals. Capital formation is difficult, debt specifically is difficult.

The Weekend Interview goes live every Friday evening — head to www.bisnow.com over the weekend to check it out!

Jobs! Jobs! Jobs!

Here are this week’s top jobs over at Bisnow's careers platform, SelectLeaders. Reach out to SelectLeaders Managing Director Ryan Neale to learn more. You can email him at ryan.neale@bisnow.com. 

Managing Director, Asset Management — Lead HASTA’s asset management portfolio and manage a dynamic team of directors, associates and analysts.

Director, Direct Equity Placement — Lead equity for large single assets, programmatic joint ventures and recapitalizations.

Senior Vice President, Multifamily Acquisitions — Lead acquisitions of multifamily apartment properties, focusing on value-added and opportunistic assets primarily in the Greater Los Angeles and San Francisco Bay areas.

Vice President of Finance — Lead the financial management of a $7B loan portfolio in the western United States, UK and Ireland.

Hey, Tim, What Are You Going To Binge This Weekend?

Gahlf! I'll try to settle my wildly inconsistent game into a groove on the links Saturday and at least break 85. Then I'll settle into the couch Sunday afternoon for the home stretch of the U.S. Open and fantasize about becoming a teaching pro on the side. Before some Archer in the evening, I might also try to catch a little of Tiger Woods' Friday round and reminisce about the most impressive feat of endurance I've ever seen on a golf course: forcing an 18-hole playoff, then winning in golf's most notoriously difficult conditions on a fractured tibia and a ruptured ACL.

 — Tim Carroll, Chief Copy Editor

Upcoming Bisnow Events And Webinars

Tuesday, June 18 (Toronto): Data Centre Investment & Expo: Canada

Tuesday, June 18 (Raleigh, North Carolina): Future of Real Estate in Durham

Tuesday, June 18 (Richmond, Virginia): Richmond State of the Market

Tuesday, June 18 (Atlanta): Atlanta State of the Market

Tuesday, June 18 (Austin): Austin Women Leading Real Estate

Tuesday, June 18 (San Diego): San Diego Multifamily Summit

Thursday, June 20 (Digital): Enhance Your ESG Strategy: Essential Frameworks for Maximising Funds and Assets

Thursday, June 20 (San Carlos, California): Bay Area Life Sciences Conference

Thursday, June 20 (Digital): AI in Commercial Real Estate

***

How did I do? You can send all love letters and dissents directly to me at mark.bonner@bisnow.com.