Ten-X CRE Pulse – September 5, 2019

  • September 05, 2019

Ten-X CRE Pulse highlights key trends and developments in the week that are changing the real estate market landscape.

New Releases

The Ten-X Strategic Insights team released its August Nowcast last week, which showed commercial real estate pricing remains stuck in the doldrums as the summer heads to a close. For sector and regional details please see the full report.

Trade Wars

News that the United States and China have agreed to hold renewed trade talks in October sent both treasury yields and stocks higher this week, reflecting some market optimism regarding a future détente. Capital markets have been highly sensitive to trade-related headlines for much of 2019 though, and both sides remain skeptical of a deal. Any breakdown or reversal in rhetoric could still roil capital markets once again.

Around the Office

WeWork is slashing its IPO valuation to less than $25 billion, down from an earlier $47 billion valuation during private fundraising, as public skepticism remains high surrounding the company’s financials and some controversial business practices revealed during WeWork’s IPO disclosure.

A co-working rival, CBRE-owned Hana, officially opened its first major location in Dallas last week. More Hana locations are currently planned to open in the United States and UK before the end of 2019.

Cash Considerations

Starwood Capital Group is doubling down on its investment in affordable apartments; the company bought more than 4,000 affordable rental units in Texas and Florida recently. The investment increases Starwood’s portfolio of affordable rentals to nearly 20,700 units at a time when affordable housing is in high demand despite slow inventory growth.

On the Home Front

Millennials are shirking homeownership more than prior generations, largely because they can’t afford the down payment. Heavy student loan debt burdens, delayed marriage ages, and stunted wealth creation due to long-term effects of the Great Recession remain the primary stumbling blocks to Millennials buying homes.

In Long Island’s housing market, would-be home flippers are often selling to each other, rather than to first-time buyers or potential owner-occupiers.

Stay tuned for our next weekly pulse for more information on CRE, tech and economic trends!

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