Here's a look at today's Real Estate briefing.

• MBA's survey says financial firm leaders anticipate an unsettled market for the first two quarters of this year. 
• The average number of bids per property deal increased by 16% in November, according to JLL. 
• Houston leads markets with the highest share of criticized loans. 

Thank you.

Sudarshan
p/sudarshan

As per Mortgage Bankers Association's 2024 Commercial Real Estate Finance Outlook Survey, CRE mortgage originators anticipate an unsettled market in the first two quarters of this year.

What the data says: Over 90% of respondents believe the current Market is either somewhat or very unsettled. However, originators feel the market will stabilize as the year progresses. 71% of respondents predict a very settled or somewhat settled market in 2025. The survey respondents identified office properties as the ones most negatively impacted by the current borrowing and lending market, while half (50%) of the respondents shared a positive outlook for the industrial market.

What the expert says: Head of Commercial Real Estate Research at MBA, Jamie Woodwell, said CRE markets are facing a slowdown in activity amid uncertainty, as leaders of CRE finance firms expect several factors to act as a drag rather than a boost to the markets.

Trepp's analysis of the Fed Flow of Funds data placed Houston in the list of metros with the highest share of criticized loans. Trepp estimates $351.8B in multifamily bank loans will mature between 2023 and 2027.

More:

• Among the markets analyzed by Trepp, only three markets registered a decline in the percentage of criticized loans from Q4 2021 to Q2 2023.
  • The other markets posted an increase in criticized loans.
• However, in most markets, the delinquency rate stayed near 0%, with increases and decreases in other markets.
• 38% of multifamily loans in Houston are criticized, a new high after the 36% recorded in Q2 of 2017.
• Matt Anderson, managing director at Trepp, said lenders in Houston are concerned about the fast pace of new construction compared to the slow absorption rate.

Avison Young has entered into an agreement to acquire Madison Marquette's retail property management, marketing, leasing, and specialty leasing services across the U.S. The deal includes over 6.1 million of combined leasing and managed properties.

More:

• The agreement aims to enhance Avison Young's retail platform and market intelligence teams and allow both firms to improve client services and revenue.
• Avison Young's Principal and U.S. President, Harry Klaff, believes the acquisition will help build the firm's expertise within the retail business by providing leadership, along with capabilities in leasing, property management, marketing, advisory, and data and analytics.
• Madison's 35 employees will join Avison Young's markets in Los Angeles, New Jersey, Philadelphia, Indiana, and a few other states and add a new market in Seattle.
• In August 2022, Avison Young acquired Madison Marquette's office and industrial property management, agency leasing, and project management services.

Blackstone promoted Nadeem Meghji as Global Co-Head of Blackstone Real Estate to replace Ken Caplan, who is currently serving in the position. Meghji will work alongside Kathleen McCarthy, who is already serving as the unit's co-head.

More:

• Meghji joined Blackstone in 2008 and has been instrumental in the company's expansion into rental apartments, logistics, and film studios; and was appointed the Head of the real estate unit's Americas division in 2017.
• Further, Blackstone promoted Caplan and Lionel Assant, European Head of Private Equity, to Global Co-Chief Investment Officers (CIOs).
• Gio Cutaia has been named the Global Chief Operating Officer of Real Estate and will continue leading Global Real Estate Asset Management to manage over 12,000 assets in the company's portfolio.
• The new Co-CIOs will oversee and coordinate investing across the firm.

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• Bloomberg reported that the Canadian Imperial Bank of Commerce (CIBC) is exploring the sales of its $316M worth of loans to performing and non-performing U.S. office properties through CBRE.
• According to BNP Paribas, Germany's commercial real estate transaction volume recovered in the fourth quarter of 2023, promising a better 2024 for the country's property sector.
• Data from Savills indicate that commercial investment volume in Scotland plunged by 34% YoY last year to £1.5B (~$1.9B). 
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