S&P Global Market Intelligence offers our top picks of real estate news stories published throughout the week.
Class A office rent in the first half of the year grew 2.4% since 2023 as concessions dropped, according to a report by CBRE.
Concessions provided by landlords began to stabilize in the first half and may be close to peaking, the real estate services company said. Tenant improvement allowances for top-tier assets averaged $98 per square feet in the first half of the year, down 9% since 2023.
"This reduction in concessions is in part due to some landlords’ inability to continue offering generous packages at a time when high interest rates depress building values and limit capital sources," CBRE said.
CBRE tracked 3,900 lease transactions across 12 office markets across the US.
Meanwhile, office rent for class B and C office space fell 1.2%.
CBRE Econometric Advisors expects overall asking rents will decline 1.8% by mid-2025.
CHART OF THE WEEK: More than half of US equity REITs beat FFO-per-share estimates
⮞ Seventy-eight of 116 US equity real investment trusts that were analyzed reported second-quarter funds from operations (FFO) per share above their respective consensus estimates.
⮞ Both datacenter REITs in the analysis reported above-consensus FFO-per-share estimates in the second quarter, while 10 of the 12 hotel REITs have surpassed estimates.
⮞ Twenty-two REITs reported FFO per share in line with consensus estimates, while 16 REITs fell short.
Top property deals
– KKR & Co. Inc. acquired three warehouses from Link Logistics Real Estate LLC for a combined $198 million, the Philadelphia Business Journal reported. The properties include a 650,000-square-foot fulfillment center and a 301,872-square-foot distribution center in New Jersey, along with a 255,336-square-foot warehouse in Philadelphia.
– Morgan Group Holding Co. sold the Pearl Biltmore, a 19-floor luxury apartment community in Phoenix, to Covenant Capital Group LLC for $152 million, Yield Pro reported.
– Tract, a datacenter land-development firm, acquired a 2,100-acre site outside Phoenix for $136 million, the Wall Street Journal reported. The firm plans to develop the site into datacenter complexes.
– Brookfield Properties LLC sold The Edmund, a 353-unit apartment building at 2025 Fulton Place in Reston, Va., to an affiliate of Harbor Group International LLC for $133 million, the Washington Business Journal reported.
– Fashion Nova Inc. acquired its headquarters at 407 North Maple Drive in Beverly Hills, Calif., from Tishman Speyer Properties LP for $118 million, Commercial Observer reported. The fast-fashion brand is set to move into the 175,000-square-foot office property later in 2024.
US hotel performance
US hotel performance was up year over year across all three key metrics during the week ended Aug. 24, STR reported, citing data from CoStar, which provides information and analytics on property markets.
Revenue per available room was $102.30, up 4.5% from the comparable week in 2023. Average daily rate increased 2.7% to $154.80 and occupancy rose by 1.7% to 66.1%.
Among the top 25 markets, Houston reported the biggest year-over-year gain in occupancy, while Chicago logged the highest increase in average daily rate and revenue per available room. Las Vegas and Nashville, Tenn., reported the steepest drop in revenue per available room.
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