If youâre reading this, we hope you called your mother. Because today is the mother of all Hallmark holidays. Today is the day you honor the woman who cared for and put up with you no matter what (and you know what). Today⦠is Motherâs Day. If you havenât yet called to wish her the best, sheâs probably [waiting by the phone]( as you read these very words. And if you really want to show off your good son/daughter credentials, you should send her a gift. A handbag is always nice. Preferably something with a little pizzazz. May we suggest something from Maison Goyard? We thought of them because the luxury leather goods brand is [on the move]( to a new, 9,000-square-foot New York City outpost at 690 Madison Avenue, as the brokers from Retail By MONA told us. After all, itâs way too late at this point to order something from QVC, even if [they also took a lease]( (for an office, not a store) at 1450 Broadway. Of course, Vornado Realty Trust received the best Motherâs Day gift of all⦠Namely, [a 946,815-square-foot, 11-year renewal]( at 731 Lexington Avenue from their beloved tenant Bloomberg. (Indeed, weâve heard many in real estate say wistfully over the years, âWhy canât they all be like Bloombergâ¦?â) At the very least write something on her Facebook wall. Momâs waiting. Speaking of social media⦠Late last month a number of real estateâs most ardent social media followers gathered at The Peak in Hudson Yards for [the first ever Real Estate X Gala]( â a big party for the influencers and tweeters of commercial real estate. The party was hosted by CRE legend Bob Knakal and an online personality known as âStrip Mall Guy,â but who is in fact Don Tepman, the president and founder of [TownCentre Capital]( and [University Avenue Partners]( (and who, you guessed it, owns strip malls). A plethora of Tepman and Knakal followers showed up. Remarks were given by Relatedâs Jeff Blau, and seen carousing were Adrian Carbone and Chris Bakke from Twitter (whoops â we mean X), the New York Giant and apparent real estate social media fanatic Justin Pugh, Eric Weatherholtz of Atlantaâs Healey Weatherholtz Properties, and Kyle Matthews of [Matthews Real Estate Investment Services](. CO was on the ground to catch it all, so you can watch our recap [here](. But that wasnât the only event CO was live and in-person for; we hosted our eighth annual Spring Finance CRE Forum at the Metropolitan Club of New York, and [the mood wasâ¦. pretty optimistic](! At least from some. âYouâre starting to see the early signs of recovery within the real estate capital markets,â said Tim Johnson of [Blackstone (BX)]( in conversation with CO Executive Editor Cathy Cunningham. âIt feels to me and to us at Blackstone that weâre generally on a path toward recovery.â Others were a little more measured in their outlook. (Hey, we canât all be Blackstone.) âEveryone is trying to survive to buy time and hope that rate cuts come so they can salvage some equity,â said Elliot Markus of [Cerberus Capital Management](. âThe game theory of that isnât it doesnât come. What ends up happening is that sponsors think their equity is sunk cost and they move on, or is there opportunity for people whoâve been patient with the capital? And all of that is TBD.â California dreaming For those who are searching for the marketâs bottom, it certainly seems like prices are getting pretty low in Los Angeles. Oceanwide Plaza, the 1.5 million-square-foot megaproject that has been [de facto abandoned]( for ages and left to the graffiti artists of Southern California, is [getting ready to be marketed]( by Colliers and Hilco Real Estate⦠although an appraisal estimated that the project would need another $865 million of expenditures before it was finished. And [Clarion Partners (CPREX)]( [sold their apartment complex](at 5710 East Crescent Park in Playa Vista, Calif., to [DivcoWest]( for $122 million⦠which is not a whole lot more than they paid for it back in 2018 ($117.5 million), but, hey, itâs not like itâs being given over to its lender or something. (Which [is essentially what happened]( last week with Clarionâs Portrait Building at 701 Eighth Street NW in Washington, D.C.) Sunday reading All of these stories about values and appraisals have made us curious. How is appraisal being managed in a post-COVID landscape? Indeed, there has been [a big adjustment](. âBuildings that were trading at $800 to $1,000 per square foot have traded at $300 to $500 per foot,â said Rod Kritsberg, managing partner at KPG Funds. âThereâs few trades and itâs very limited, but values have dropped precipitously â not just in the office sector, but across the market.â And, while COVID was undoubtedly the match that touched off the current conflagration, the fire was accelerated by something â and that something was clearly interest rates. âThe interest rate hike has diminished values in a way that Iâve never seen in my 20-year career,â said Kritsberg. âNot even during the Global Financial Crisis have I ever seen a loss of overall values on paper like Iâve seen during this interest rate hike.â These shifting values have a lot to do with rent rolls â and, while rents have flattened or fallen, cities havenât looked at it that way from a tax perspective. Landlords are certainly not comfortable paying the kind of tax they were accustomed to when vacancies were low. As they [contest their assessments](, this could mean very bad news for city treasuries nationwide. Something to think about after you call your mother. Happy Motherâs Day! [View in Browser]( | [Advertise]( | [Forward to a Friend](
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This newsletter was published 05/12/2024