Apartment rent growth continues to moderate; Hudson, Macerich sell Calif. assets

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

Apartment rent growth is expected to continue to moderate in 2024 on the back of a surge of new supply, The Wall Street Journal reported.

Yardi Matrix forecasts a 1.5% increase in rent, while CBRE expects a 1.2% growth in 2024. The predicted price relief for tenants is driven by a jump in new apartments, which has made rent increases harder for landlords.

In 2023, the bull run for apartment properties waned as higher interest rates drove down the value of all types of commercial property. Investment activity seems unlikely to rebound back to recent highs, given the still-high borrowing costs and belief of potential buyers that buildings are still overvalued, according to the report.

CHART OF THE WEEK: US REIT stocks outperform broader market in Q4'2023

⮞ Share prices for US real estate investment trusts jumped in the fourth quarter of 2023, with the Dow Jones Equity All REIT Index closing the quarter with a 17.9% total return.

⮞ US REITs have outperformed the broader market, as the S&P 500 booked an 11.7% return for the quarter.

⮞ All Dow Jones US Real Estate sector indexes saw positive returns in the last quarter of 2023.

Property transactions

– Hudson Pacific Properties Inc. and Macerich Co. sold their One Westside and Westside Two retail assets in Los Angeles to the Regents of the University of California for $700 million. Hudson Pacific held a 75% interest in the properties, while Macerich owned the rest.

– Phase 3 Real Estate Partners Inc. acquired two laboratory properties in Massachusetts from Alexandria Real Estate Equities Inc. for a combined $306 million, Banker & Tradesman reported. The properties are at 640 Memorial Drive in Cambridge and 100 Beaver St. in Waltham.

– Advanced Real Estate Services Inc. bought an apartment complex in Costa Mesa, Calif., from Camden Property Trust for $234 million, The Real Deal reported. The Camden Martinique Apartments property spans 714 units.

– Blackstone Inc.'s Link Logistics Real Estate LLC acquired a Home Depot-leased warehouse in Perris, Calif., from IDI Logistics LLC for $183.9 million, Commercial Observer reported, citing Vizzda data. The property spans 800,000 square feet.

Financing

– Hines Interests LP and Urban Street Development secured a loan of $220 million for the construction of the first phase of a mixed-use project in Fort Lauderdale, Fla., The Real Deal reported. The FAT Village project will comprise 601 apartments, 180,000 square feet of office space and roughly 70,000 square feet of retail across three buildings.

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