WeWork’s Investment Arm Was Supposed To Be A $3B Giant. Instead It’s Selling Assets And Defaulting On Loans

After a four-year planning process, Oxford Properties and Pappas Enterprises Inc. have formally filed a letter of intent for a major mixed-use development along the Reserved Channel in South Boston. The 1.7M SF, seven-building development would span 8 acres along West First Street and Pappas Way…

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The dynamics of the U.S. apartment market have begun to turn upside down. After struggling to raise rents during a rapid development boom, the nation's largest publicly traded landlords now say they have seen new construction starts come screeching to a halt. 

The combination of rising interest rates and construction costs were already making it more difficult for developers to start new multifamily projects, and then the sudden failures of three regional banks over the last two months further disrupted the debt markets. This led to a significant slowdown in new developments breaking ground during the first four months of this year, several REIT executives said on earnings calls over the last week. 

These executives, whose companies own tens of thousands of apartments across the country, said they actually stand to benefit from this slowdown. The cooling development pipeline will make it easier for existing buildings to raise rents in the coming years, and the inability of smaller regional players to finance projects could put development sites on the market that the better-capitalized real estate income trusts can swoop in and purchase. 

“In terms of starts, I mean, they're dramatically down,” Equity Residential Chief Investment Officer Alexander Brackenridge said during its first-quarter earning call last week. “Already this year, what we were thinking in our markets would be, say, 110,000 starts is now looking like it…

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