US industrial leasing drops in 2023; WeWork to assume 4 new leases

S&P Global Market Intelligence offers our top picks of real estate news stories published throughout the week.

Industrial leasing activity in the US declined 8.8% year over year in 2023 as occupiers and investors stayed on the sidelines amid concerns about the economy, interest rates and consumer spending, CBRE said in a report.

Total leasing stood at 790.3 million square feet in 2023, of which 267 million square feet were lease renewals.

Leasing activity in the last quarter of 2023 jumped 15.4% from the same quarter a year ago, climbing to 182.7 million square feet.

Net absorption dropped to 238.9 million square feet from 526.8 million square feet in 2022.

Industrial space totaling 159 million square feet finished construction in the fourth quarter of 2023, 69% of it vacant. Construction starts stood at 46.3 million square feet, falling for the fifth straight quarter.

CHART OF THE WEEK: US REIT capital activity up in 2023

⮞ US equity real estate investment trusts' capital offerings in 2023 grew 13.5% year over year to a total of $58.27 billion.

⮞ Debt offerings accounted for $44.87 billion of the total, while common equity offerings secured $12.66 billion in capital.

⮞ American Tower Corp. secured the biggest amount of capital in 2023, at $7.01 billion.

Charting a path

– Travel + Leisure is acquiring Accor Vacation Club, the vacation ownership business of global hospitality company Accor SA, for $48.4 million. Accor Vacation Club represents 24 resorts and nearly 30,000 members. The deal is expected to close in the first quarter.

– WeWork Inc. signed lease amendments in four of its locations in the US as part of its restructuring process. Following renegotiations with landlords, the company will assume leases at 71 5th Ave. in New York, owned by Madison Capital; Fenix Development's The Watermark in Tempe, Ariz.; 901 North Glebe Road in Arlington, Va.; and Crawford Hoying-owned 800 North High St. in Columbus, Ohio. The lease assumptions are subject to court approval.

Property transactions

– Dermody Properties LLC sold the 353,600-square-foot LogistiCenter at Highway 92 property in Hayward, Calif., to an affiliate of PGIM Inc. for $103 million, The Mercury News reported, citing county records.

– The 206,926-square-foot The Marketplace at Highland Village shopping center in Highland Village, Texas, has sold. Real estate investment trust SITE Centers Corp. was the owner of the property, according to S&P Global Market Intelligence data.

US hotel performance

Occupancy was down, while average daily rate and revenue per available room of US hotels went up during the week ended Jan. 27, STR reported, citing the latest data from CoStar, which provides information and analytics on the property markets.

Occupancy was 56.2%, a drop of 0.3% compared to the comparable week in 2023. ADR rose 5.1% to $149.76. RevPAR edged up 4.8% to close the week at $84.13.

Among the top 25 markets, Las Vegas logged the largest year-over-year gains in each of the three metrics.

See key people moves in North America real estate.

REIT Replay: US REIT share prices tick down during the week ended Jan. 26