CrowdStreet

Where do we believe the market is potentially heading? What might an interest rate descent bring? What risks and positive developments may we possibly see? Find our answers to these questions in our H1 2024 CRE Investing Outlook. Blending industry knowledge, research, and the experience of our investment team, this report offers CrowdStreet’s updated outlook and insights for many major CRE property types. Read it today: https://crwd.st/3w7w51I

Join CrowdStreet CIO, Ian Formigle and Nuveen Real Estate, Americas CIO and Head of Funds Management, Shawn Lese, and Global Head of Research, Donald Hall, for a live discussion on May 8th. In this one-hour webinar, the speakers will discuss CrowdStreet and Nuveen’s 2024 commercial real estate (CRE) outlooks, providing an overview of the current CRE landscape and addressing major asset classes and geographies. The speakers will also share their perspectives on the broader macroeconomic environment, exploring what may be emerging in CRE in 2024 and beyond. Don’t miss out on this insightful conversation! Register here: https://crwd.st/3y87ZVm

Earlier this month, CrowdStreet partnered with CohnReznick LLP to host a special investor event in New York City. Darren Powderly, Ian Formigle, and other team members had the opportunity to connect with our NYC-based investors and listen to their feedback. Several industry leaders joined us to share their insights on the current state of the CRE market and offer valuable information about CRE investing. Thank you to Jillian Mariutti from JLL, Nicholas Silvers from Tavros, John F. O'Connor from O’Connor Capital, and Ronald Kaplan, CPA from CohnReznick for contributing to a truly impactful event for our investors. Here are some of the key quotes and takeaways from our industry panel: → Middle-market real estate is experiencing more bank lending activity than larger $100M+ transactions, observed Jillian Mariutti, noting, “I would say the sweet spot is probably in that 40 to 80 million dollar range. We're seeing a lot of liquidity across asset classes in that size.” → CMBS loans have also made a comeback. “CMBS made up 4% of the $60 billion of debt deals JLL did last year. Of the debt business, year-to-date, CMBS makes up 20% of all the debt deals we've closed due to two large SASBs. So we are seeing it come back,” said Jillian. → Price discovery and stabilization are leading to optimism among some sponsors. “There's actually some price discovery happening in multifamily, industrial, retail, and even land. It was really very hard to price things when the Fed Funds Rate went from zero to 5.25%. But now that it's been at 5.25% for almost a year, we're able to price things. We're able to underwrite deals. [As a company], we're in that period where we think everything's going to be okay and now is probably a good time to be starting projects and probably a good time to be buying projects,” said John O’Connor. →  As this cycle reaches its trough, there may be buying opportunities emerging. Nicholas Silvers stated, “This opportunity and this window for investment, compared to others that I have seen in my career, line up with what we saw coming out of the Dot-Com Bust and the Great Financial Crisis. But this cycle is fundamentally different. So, I believe that the number of opportunities may be greater, and as a result, the cap rates at which you can buy and own assets may be better than what we've seen in any of those other cycles over the last 25 years. From my perspective, if you can genuinely understand the asset, understand the risk, and feel comfortable, you may be able to find some well-priced buys right now.” #commercialrealestate #cre #investing #creinvesting

We took a tour of 55 Hope, our marketplace project located in Brooklyn's Williamsburg submarket. Join Ian Formigle, Chief Investment Officer, and Darren Powderly, Co-founder of CrowdStreet, as they provide an update. The tour ends on a beautiful rooftop! This project was introduced to our marketplace in August ‘22 with our sponsor, GAIA Real Estate. According to Costar, 55 Hope is benefiting from New York’s historically low apartment vacancy rate, which averaged just 1.4% through the first half of 23. In speaking with the sponsor, we learned that the property is 98.3% occupied and 100% leased. Driven by a tight market, the project’s combination of a relatively desirable location, modern living spaces, and amenity enhancements has led to substantial rent appreciation - February rents are up 34% since October 22’ with Net Operating Income up 43%, which compares favorably to Williamsburg’s relatively tepid submarket growth rate of 1.8% within the last year. Our takeaway: In densely populated urban locations, renovated multifamily properties located close to transit and quality retail districts have the potential to remain in demand. 55 Hope is one such example. #cre #investing #apartments #multifamily

By Ian Formigle: I’m observing a handful of office assets trade in 2024, with many showing significant discounts to their recent peak valuations and previous sale prices. The market appears to be experiencing an uptick in sales activity from 2023 when office sales plummeted to levels not seen since the pandemic. We're also seeing this reflected in MSCI Real Capital Analytics data. What are some examples of recent office sales at significant discounts? Case in point: The recent sale of a two-building Class A office campus—1000 and 1100 Dexter—in Lake Union, Seattle. According to CoStar, at 66% leased, the project was sold in 2004 for $63.9 million and recently for $47.5 million in 2024, which reset its value to a 26% discount to its price from 20 years ago. The Lake Union area is commonly known for its tech and life science presence, but many sources, including CoStar show a retreat from major players such as Amazon and Meta lately. Even some properties generally considered to be in the most desirable locations in the nation are seeing heavy markdowns. Market Square in Washington, D.C., which CoStar shows sold for a record-breaking $905 per square foot back in 2011, just changed hands from the real estate giant Blackstone in 2024 at roughly half the price of its previous sale—$464 per square foot. While I’ve seen larger discounts on Class B commoditized office buildings, a roughly 49% discount for this project is more notable to me, considering it is a Class A project, located on Pennsylvania Ave NW, nearly equidistant from the White House and Capitol Building, and 83% occupied according to CoStar, by tenants whose business is mostly conducted in person - this stands out as a compelling basis reset to me and therefore an interesting entry point. However, despite the emergence of heavily discounted trades, it would be an oversimplification to imply that the office market is generally a good buy today. I have observed that securing loans for many office projects remains relatively difficult likely due to the perceived risk for the sector, including pre-pandemic leases that continue to expire with no ability to project future demand reliably. Factors such as stabilized occupancy—a project's long-term average occupancy rate— remain subject to debate and add to the challenges of underwriting deals. And the existing data I’m observing is relatively grim, further complicating investment decisions in this sector. CoStar predicts a drop in average occupancy for office projects in the coming years. Bottom Line: Ignorance isn’t bliss in the case of office real estate—more price discovery will likely continue to reduce bid-ask spreads, gradually leading to a new floor for office pricing. To read important disclosures, access our blog on our website here: https://crwd.st/3UbSYcM. Follow us for more stories. #office #officerecovery #officecre #commercialrealestate #cre #investing

Signs may be pointing to large institutional investors looking to deploy hundreds of billions of dry powder in 2024 and 2025, potentially indicating that the current market dislocation may be brief and we are close to reaching the trough for commercial real estate. In this recent article, we share an in-depth look at industry capital flows and explore what we're currently seeing in the market. Key topics include: -Analysis of how various factors influenced capital flows in recent years -Assessment of the current market landscape -Perspectives from large industry leaders on how they’re viewing capital deployment in 2024 Read the full article: https://crwd.st/49SKsFr

Coming to you live from NYC! The Urban Land Institute conference is well underway. The attendees are some of the best in the business, and the small group sessions offer a wealth of knowledge. Ian Formigle and I will share what we learn with you next week. #ulispring #uli #ulinewyork #creinvesting #commercialrealestate #investing #economy

Some commercial real estate leaders are staying optimistic about the hospitality industry in 2024. We recently connected with several hospitality leaders and, in this article, share their insights into the sector and provide: - An analysis of supply and demand dynamics we see shaping hospitality today - A look at the potential increase in hospitality transactions for 2024 - Our thoughts on the sector’s outlook and its implications for deals featured on the CrowdStreet Marketplace Read the full article: https://crwd.st/3PXrmXo #CommercialRealEstate #HospitalityIndustry #HotelIndustry

We love seeing our marketplace projects up close! Hear from our Chief Investment Officer, Ian Formigle, as he walks you through the CrowdStreet Marketplace property, the Hotel Adeline, in Scottsdale, Arizona. He shares a few observations from his stay at the hotel during an off-site visit with some of our executive team members.

Meet Douglas Lyons, Managing Principal of Pearlmark who unveils a foundational philosophy of Pearlmark’s investment strategy that has helped them navigate numerous market cycles. Watch the interview to find out more about this Enterprise sponsor that now supports over 500 CrowdStreet investors and has raised more than $25 million through the CrowdStreet Marketplace. Link: https://crwd.st/3vwq6U6 #SponsorSpotlight #CommercialRealEstate #CrowdStreetMarketplace #CrowdStreet