Sunday Summary: Have You Called Your Mother?

Last Thursday was a historical marker: After three years, more than 1.13 million deaths, complete societal disruption, and untold treasure lost, the federal government [declassified COVID-19 as a national emergency](. There was a time when this would have been considered momentous — and yet the news barely registered. Perhaps the anticlimax of Thursday had something to do with two contradictory facts: (a) the emergency was over in everything but name a long time ago, and (b) no matter what the government says, the disruption of our work life stubbornly remains unchanged — especially for real estate. (Even the Federal Reserve is [worried about the sector](.) Every day more data becomes available about the lingering negative effects of the last three years: Half a million affordable [housing units were lost](during COVID, as per Moody’s; retail leasing, which [suffered a body blow]( during the pandemic, is [slowing down]( yet again in leasing; the banking crisis [isn’t ending anytime soon](; and rent and mortgage payments have [contributed most]( to the historic rise in inflation. And, yet, despite all the negatives cited above, the sunnier data persistently peeks its head out of the clouds. While, yes, the cost of housing has risen 8.1 percent, according to the most recent Consumer Price Index report [inflation slowed in April](for the 10th month in a row, and inflation was the slowest it’s been in two years. Even the rate hikes which might have been helping to tame this inflation but have nevertheless badly damaged the real estate sector look like [they’re winding down](. And the wheelers and dealers of the industry remain adamant about getting things over the finish line. Poor retail scene? Tell that to the people of Chelsea who are [getting a new, 23,000-square-foot Lidl]( supermarket. Or tell it to the citizens of Prince Edward County in Northern Virginia, who are expecting a [26,000-square-foot Sprouts Farmers Market](; or the folks in Wynwood being treated to [a new Salty Donut]( location. Bad investment sales market? Uh, [Will Silverman and Gary Phillips](, who are managing directors at Eastdil Secured’s New York office, would like a word. They just did a billion dollars in deals on the Upper East and West sides. Affordable housing decline? Bushwa! Nuveen just plunked down an undisclosed amount (but clearly many hundreds of millions, at least) for a [12,000-unit affordable housing portfolio]( in New York, Maryland, Texas and Massachusetts. Banks tightening up? Tell that to Bank OZK, which[just laid out $334 million]( to recapitalize an Amazon-leased logistics property in the Bronx. (Although we have to tip our hat to non-bank lender Madison Realty Capital, which [originated $585 million]( for the $2 billion Ritz-Carlton Paradise Valley, The Palmeraie, a mixed-use luxury development in Paradise Valley, Arizona.) Heck, even office can still surprise. Mercy College [re-upped for 125,522 square feet]( in the Hutch Metro Center at 1200 Waters Place in the Bronx, where it’s been for two decades. And New York City [is officially incentivizing]( owners of older office buildings south of 59th Street to upgrade them, which can make the properties more competitive. And, of course, there’s always the market for warehouse space. [It continues to do pretty well](, to say the least. In short, there are pockets of the market that are showing promise, and the people who are getting the deals done are the ones exhibiting the requisite hustle. Santa Barbara, here we come! Another example of an asset class with a number of paradoxes and contradictory information is proptech. VC funding for proptech is [way, way down]( (77 percent by CRETI’s estimate), but you wouldn’t know it if you lived in Santa Barbara, Calif. The somewhat sleepy coastal town has seen [a proptech boom]( with companies such as Procore Technologies and Yardi setting up shop. Part of this is due to other (non-prop)tech firms that had long been entrenched in the area such as Raytheon. “There’s always been a tech orientation,” explained Kevin Yardi of the eponymous firm started by his father. “We have a phenomenal university in our backyard, University of California, Santa Barbara, and they have some really amazing programs.” (Not to mention nearby Cal State Channel Islands, Westmont College, and Santa Barbara City College.) Speaking of proptech, too, JLL [just hired]( its first-ever chief technology officer in Yao Morin. She’ll be running a team within the brokerage giant’s proptech division. Happy Mother’s Day In case you forgot, this is your official reminder: Today is Mother’s Day. Take her to lunch. Bring along some flowers. And, if you’re looking for a gift, perhaps a subscription to Commercial Observer? ([Sorry for the crass plug](.) Because all our readers should be aware: On Tuesday we’re dropping our Power 100 list for subscribers and nobody will want to be late to reading it. (Wednesday it goes live to all readers.) Most of our readers are quite familiar with our annual ranking of the high and mighty of commercial real estate. We added quite a bit of new blood to the list, and we shook up our rankings giving less weight to the office owners, so we believe it is an issue no one will want to miss. Now — stop reading this and call your mother. --------------------------------------------------------------- [View in Browser]( | [Advertise]( | [Forward to a Friend]( [Manage your email preferences or unsubscribe]( [Commercial Observer]( © Copyright 2023 [Observer Media]( 1 Whitehall Street, Floor 7, New York, NY 10004 This newsletter was published 05/14/2023