There is a bible in the appraisal industry. All of the nearly 80,000 certified and licensed real estate appraisers in the United States must master these scrolls. 

But the bible keeps changing. 

The Appraisal Foundation has a congressional mandate to regulate appraisers, and it says its practice of updating the Uniform Standards of Professional Appraisal Practice every two years and making appraisers recertify is crucial to keep the industry current. 

However, appraisers complain TAF is abusing its power and that its handling of USPAP is a cash grab. A gulf is widening between the industry and the 13-person body that presides over it.

Sales of USPAP, the mandated courses and certifying instructors to teach those courses made up 92% of the foundation's $4.8M in revenue in 2022, according to its latest tax filing.

“This private entity is benefiting from the public power of rule writing,” National Fair Housing Alliance General Counsel Morgan Williams said in an interview.

Check out Bisnow New York Reporter Sasha Jones’ dive into what the fuss is all about with USPAP and how appraisers are starting to rise up against their governing body.

— Mark F. Bonner, Jay Rickey, Catie Dixon and Kayla Carmicheal

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On Our Radar

• Federal Reserve Chair Jerome Powell: CRE could be stressed for years. “It is a risk that has been with us and will be with us for some time, probably for years,” Powell told U.S. lawmakers Tuesday. However, he added that he believes U.S. banks can handle the risk. Powell resumed his Capitol Hill testimony at 10 a.m. ET today.

• More than 1.7 million people are still without power in Texas. So far, 11 people are dead in Houston, where the heat index will reach 106 degrees today. The remnants of Beryl are driving through the Midwest and toward the Northeast with heavy rain and flash flooding. 

• They’re calling it the “Big Stay.” The Great Resignation is behind us, and after a few years of intense shake-up in the job market, U.S. workers are increasingly looking to stay put for a bit. 

• Digging into the Bisnow archives (2019) … 2019 Was A Damn Fine Year To Be A CRE Broker. “According to the results of a new nationwide survey, 2019 was a very good year to be a real estate broker, with a benign economy and low interest rates allowing brokers to make more money.” The good old days, eh?

This Morning's News

RETAIL — Kroger-Albertsons Say What Stores They’re Ditching (Kroger-Albertsons): Kroger and Albertsons have shared a list of 579 stores and distribution centers slated for divestiture as part of their efforts to meet their merger's regulatory requirements. Here's where those stores are located.

Today’s Deep Dive: How Howard Hughes’ $130M Houston Office Refi Defied The Narrative

Howard Hughes Holdings last month refinanced an office building in the Houston metro area — difficult enough these days, but it said it also got better terms than when it bought the building in 2019.

“I’m going to differ with the narrative a little bit in that this one wasn’t that difficult for us,” Howard Hughes Senior Vice President of Capital Markets Valerie Qualls said. “It wasn’t, because of our leasing efforts on the building.”

The five-year, $130M nonrecourse loan for a 601K SF Class-A office tower in The Woodlands came through a CMBS conduit and was sponsored by Wells Fargo. It has a fixed rate of 7.075%, which is ultimately lower than the floating rate Howard Hughes originally had on the building.

The process did look different this time around, with fewer lenders bidding and a more detailed vetting process.

Bisnow Houston Reporter Maddy McCarty pulled back the veil on how Howard Hughes got this one done. 

Read the full story here.

ECONOMY — Rate Cut Speculation Heats Up (NYT): Investors are increasingly optimistic that the Federal Reserve might initiate rate cuts soon, based on Jerome Powell’s statements this week on Capitol Hill. Get the rest of the details.

OFFICE — Coworking Space Grows (Coworking Cafe): Coworking is still on the up. Inventory expanded by 7% in Q2, with Dallas-Fort Worth, beating out Manhattan for the first time and becoming the second-most populated metro. See where other cities rank by flex spaces.

FINANCE — Regional Banks Under Pressure (Reuters): Fed Chair Jerome Powell said regulators are communicating with smaller banks to ensure they're able to manage commercial real estate risks. Regional bank stocks have lagged the broader market. Get the full scope of the issue.

LEGAL — Developer's $270M SEC Settlement (TRD): The SEC alleges Fleet Financial obtained $228M from 400 EB-5 investors from 2010 to 2017 with misleading claims about financing sources for projects, the development and construction teams involved and the scope of its work. Learn more about the case.

DATA DIVE — CRE Activity Improvement? (LightBox): Investors are "bravely venturing" back into property transactions, according to the LightBox Monthly CRE Activity Index, a barometer of activities that support CRE dealmaking. The index showed its fourth month of modest improvements last month. Take a look into more data.

INVESTMENT — Dry Powder's Geographic Impact (Bloomberg): 64% of the $400B in dry powder for property investments is targeting North America, which is likely to delay recovery in Europe and Asia. Find out why the U.S. affects other continents here.

INDUSTRIAL — Ferdinand Seefried Retires From Industrial Giant He Founded (Bisnow): Forty years and 200M SF of development later, Ferdinand Seefried is turning over the reins of Seefried Industrial Properties. See what’s next for Seefried.

INVESTMENT — Drop in Proptech Funding (Multifamily Dive): VC investments in the proptech industry fell to $4.37B in H1 2024. By comparison, VC funding for proptech topped $13B in H1 2022. More on the turmoil rolling through the proptech sector.

SPORTS — New Tampa Bay Baseball Stadium (Coliseum News): Mortenson has been selected to construct a new, $1.3B MLB baseball stadium for the Tampa Bay Rays, which is set to anchor a multibillion-dollar redevelopment in St. Petersburg’s Gas Plant neighborhood. Inside the new stadium's plans.

PERSONNEL — Leadership Change At W. P. Carey (W.P. Carey): John Park is stepping down as president of W. P. Carey. The role of president at the net lease REIT will be eliminated and the title will be assumed by CEO Jason Fox. Learn more about Fox.

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The First Draft is produced by Director of Newsletters Jay Rickey, Managing Editor Catie Dixon, Editor-in-Chief Mark F. Bonner and Deputy Newsletter Editor Kayla Carmicheal, with an assist from ChatGPT. We’d love your feedback! Email us at firstdraft@bisnow.com. 

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