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

Activity in the U.S. industrial real estate sector is expected to ease in 2023 after record construction and net absorption in 2022, according to Colliers International Group Inc.'s U.S. Industrial Report | Q4 2022.

The overall vacancy rate in industrial properties is expected to go up by 120 to 150 basis points, owing to the prospect of slowing demand. Occupancy growth is predicted to be negatively impacted by deteriorating economic conditions. Additionally, new industrial starts are forecast to decline following record development levels over the past year. However, the development pipeline is full and should satisfy occupier demand, the report said.

The final quarter of 2022 saw total inventory of over 17 billion square feet and new supply rising 25.9% year over year to 138.4 million square feet. Net absorption during the quarter was the highest for 2022 at 124.5 million square feet, resulting in a vacancy rate of 3.7%, down 21 basis points from a year ago.

Meanwhile, executives of Prologis Inc., Rexford Industrial Realty Inc. and First Industrial Realty Trust Inc., some of the top U.S. industrial real estate investment trusts, said on their respective fourth-quarter 2022 earnings calls that they continue to see strong demand. All three REITs predict market rents will go up, with Rexford assuming an increase of roughly 15% in 2023.

CHART OF THE WEEK: US REITs raise $4.46B in January capital offerings

⮞ Equity REITs pulled in $4.46 billion from capital market offerings in January, up over 47% from December 2022.

⮞ Debt offerings raised the majority of the capital.

⮞ Prologis had the largest haul during the month, at $1.36 billion, from the sale of two tranches of unsecured notes.

Defaults

* A subsidiary of Brookfield Corp. is defaulting on loans totaling $755 million related to its two office buildings in Los Angeles, Reuters reported, citing a regulatory filing. The properties — 777 Tower and Gas Company Tower — have debts amounting to about $290 million and $465 million, respectively, according to the report.

* Vornado Realty Trust's Fifth Avenue and Times Square joint venture defaulted on a nonrecourse mortgage loan worth $450 million connected to the retail property at 697-703 Fifth Ave. in New York City, the office-focused landlord said in its fourth-quarter 2022 earnings report. Vornado said the joint venture is in negotiations with the lenders to restructure the loan.

Transactions

* Fortress Investment Group LLC paid $598 million for the stake of its joint venture partner Bizzi & Partners Development in their stalled 71-story condominium tower project in Manhattan, N.Y., Commercial Observer reported.

* Rexford Industrial Realty spent $365 million on a warehouse in Fontana, Calif., Commercial Observer reported, citing Vizzda data. The property is occupied by Tireco Inc. and spans 1.1 million square feet.

* Vanbarton Group LLC sold an office building in Manhattan to Hyundai Motor Group for about $275 million, Bloomberg News reported Feb. 15, citing people familiar with the matter. The carmaker will use the eight-story property at 15 Laight St. to house offices and a showroom, according to the report.

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