Hi All - Happy Saturday. It’s the last day of the month, which means it’s time for the Last Cast Letter.

This edition is going to look a little different because I wanted to test a new format. Unfortunately I think this email may get clipped if you’re using Gmail, because below I’ve included links to every article I thought was interesting over the past month. Plus, I’ve enlisted the help of my analyst — aka ChatGPT — to analyze the headlines and spit out a sentiment analysis for each sector.

Let me know what you think. If it’s something you like, maybe we’ll think about making this a weekly newsletter at some point with the format below. After you’ve had a chance to scroll through, here’s a poll to gauge your interest:

📉 Macro Commentary

While there are some positive headlines, the majority convey concerns, challenges, or uncertainties in the real estate market and the economy at large. Based on these headlines, the overall tone of the reporting can be characterized as mixed with a leaning toward negative.

• Billionaire investor Jeff Greene: We’re in the first inning of the commercial real estate correction (CNBC)

• More Markets Are Favoring Renters (GlobeSt)

• Apartment rents are on the verge of declining due to massive new supply (CNBC)

• Are CRE Prices Too High? It Depends on Your Mindset (GlobeSt)

• California tech transplants unhappy with exodus to Austin, report says (SF Gate)

• EV Boom Remakes Rural Towns in the American South: A town of 400 people scrambles to prepare for 6,000 auto workers as a giant Ford plant rises (WSJ)

• Remote Work, Three Years Later (Goldman Sachs)

• US Non-Life Insurers to Withstand Commercial Real Estate Deterioration (Fitch Ratings)

• Rates Are Up. We’re Just Starting to Feel the Heat. Homeowners. Car buyers. Landlords. Big businesses. Here’s who stands to lose—and in some surprising cases, win—as interest rates stay high in the years ahead. (WSJ)

• Here’s Why Deals Will Increase in Q4 (GlobeSt)

• One-on-One with Kathleen McCarthy: You Can’t Paint Real Estate with a Broad Brush (Blackstone)

• Where the Smart Money Is Investing in CRE (Commercial Property Executive)

• Construction Spending to Rise in H2 2023 (Commercial Property Executive)

• Apartment Rent Growth Continues its Rapid Descent in August (Real Page)

• Rents are falling more slowly in U.S. suburbs than in cities. Here's why. (CBS News)

• What Rising Rates and Surging Insurance Prices Are Doing to Real Estate (Odd Lots)

• Construction Starts Continue to Slip in August (Commercial Property Executive)

• CRE’s outlook remains bleak for the rest of the year (TRD)

• U.S. Consumers are Poised to Cut Back Spending. What Will It Mean for the Economy? (GlobeSt)

• US REIT Outlook ‘Deteriorating’ as CRE Lending Tightens (Commercial Property Executive)

• Five CRE Investment Themes for Turbulent Times (GlobeSt)

• Second Quarter CRE Activity Down 50% Year Over Year (GlobeSt)

• Has 2023 Really Been That Bad for CRE? (GlobeSt)

• The Value of Residential Real Estate Broke a New Record $52 Trillion (Zillow)

🤷 Multifamily

The headlines present a mix of positive, negative, and neutral sentiments. While there are indications of growth, development, and stabilization in some areas of the multifamily market, there are also signs of uncertainty, potential financial instability, and concerns about oversaturation and market peaks. The overall tone is mixed, with both positive and negative elements present in the reporting.

• Ballast Wins Veritas Multifamily Portfolio at Auction (GlobeSt)

• Multifamily rent growth to persist where least expected (CBRE)

• Reid Bennett - Navigating the Multifamily Brokerage and Lending Landscape (Best Ever CRE)

• NYC Unveils Plans for 4,000 New Apartments in Central Brooklyn (CO)

• Luxury Apartment Glut in South Florida Offers Some Price Relief (WSJ)

• 10 Best and Worst Performing Student Housing Markets (GlobeSt)

• Denver Suburbs Hot As Multifamily Development Downtown Has Become 'Death By 1,000 Cuts' (BisNow)

• Manhattan Rental Market ‘Topping Out’ as Prices Hover at Records (BBG)

• New Household Formation Driving Multifamily Demand (GlobeSt)

• Are Too Many Contractors Making the Same Bet on Multifamily Development? (Construct Connect)

• Three-Star Multifamily Space Begins to Stabilize (GlobeSt)

• There is $436B of Multifamily Debt That is Potentially Troubled (GlobeSt)

• It's Still Not Clear If Multifamily Has Hit Bottom (GlobeSt)

• Older Multifamily Buildings Posting Stronger Rent Growth (GlobeSt)

📈 Industrial

While there are headlines that suggest slowdowns and challenges in the industrial real estate and manufacturing sectors, the majority of the headlines indicate positive developments, such as expansions, acquisitions, and successful navigation of market challenges. Based on these headlines, the overall tone of the reporting can be characterized as mixed with a leaning toward positive.

• The Rise Of Alternative Assets In The Industrial Sector (GlobeSt)

• Rexford Adds $46M in Acquisitions in Southern California (CO)

• Top Markets for Industrial Deliveries in H1 2023 (Commercial Property Executive)

• D-FW’s hot industrial building market is starting to cool (Dallas Morning News)

• Manufacturing Rebound Faces Real Estate Roadblocks (CPE)

• Screeching Brakes: Industrial Real Estate Construction Hits The Slow Lane (Benzinga)

• World’s Biggest Warehouse Developer Looks To Expand Beyond Commercial Real Estate (CoStar)

• How Warehouses Are Escaping Real Estate’s Doom Loop, in Charts (WSJ)

• Costco Just Announced a Major U.S. Expansion With 10 New Warehouses In 2023 (Eat This, Not That)

🤷 Single-Family

The headlines present a mix of positive, negative, and neutral sentiments. While there are indications of growth and strategic positioning in the market, there are also signs of challenges like housing scarcity and mixed implications for different stakeholders in the market. Based on these headlines, the overall tone of the reporting can be characterized as mixed.

• Build-to-Rent Units Move Into Master-Planned Communities (MHN)

• Housing market inventory is so scarce that builders will be in the driver’s seat for years to come, says KB Home’s CEO (Fortune)

• Single-Family Rental Firm Taps Former Morgan Stanley Executive as President (WSJ)

• August 2023 Burns Single Family Rental Survey Recap (John Burns Research)

• America’s Biggest Landlords Can’t Find Houses to Buy Either (WSJ)

• The Sneaky Tax Break That Reshaped U.S. Real Estate (CNBC)

• MetLife: Institutional Investors Could Own 40% Of Single Family Rental Homes By 2030 (Moguldum)

• Single-family rent increases cool for the third straight month (CNBC)

📉 Storage

While there is a headline suggesting strong demand for self-storage, most of the headlines indicate challenges, changes in investment dynamics, and regulatory issues in the sector. Based on these headlines, the overall tone of the reporting can be characterized as negative.

• Historic Highs Are Behind for Self Storage (MHN)

• Investors Still Find Self Storage an Attractive Option. But the Math on New Deals Has Changed. (Wealth Management)

• Is There a Limit to Americans' Self-Storage Addiction? Billions of Dollars Say Nope (WSJ)

• Firm That Raised Largest-Ever Self-Storage Investment Fund Fined $20.5M By SEC (BisNow)

• Reality Sets in for the Self Storage Sector (GlobeSt)

📉 Office

The majority of the headlines convey concerns, challenges, or uncertainties in the office space and real estate market, with only a few offering positive or mixed sentiments. Based on these headlines, the overall tone of the reporting can be characterized as negative.

• All That Empty Office Space Belongs to Someone: What happens if the nearly 100 million square feet of workplace real estate stays empty? (NYT)

• Strong August office leasing volume comes with a catch (TRD)

• Architects explain how they're turning office buildings into apartments with high ceilings and more natural light (BI)

• Office Market Panic Is Easing, But a Critical Period Looms (Bloomberg Opinion)

• Upward Trend: The Rise of Vacancy Rates in Skyscrapers (Moody’s Analytics)

• WeWork tells landlords it intends to renegotiate “nearly all” its leases (TRD)

• Emptying office buildings bring back memories of mall failures (The Business Journals)

• Some Encouraging Signs in the Office Sector (GlobeSt)

• Six Metros That Are Financially Feasible for Office Conversions (GlobeSt)

• NYC gets small post-Labor Day office bump as California, Texas slide back (TRD)

• There’s a housing shortage and an office glut. So why are there only 217 U.S. office-to-resi conversion projects in the pipeline? (Fortune)

• San Francisco Office Market Shows Signs of Life (WSJ)

• W.P. Carey Exiting Office With Spinoff, Sales (BisNow)

• Boston’s biggest employers say five-day office weeks are over (TRD)

• Partnership survey finds 58% of Manhattan office workers are in the workplace on an average weekday and the expectation is that this will only grow to 59% on a long-term basis. (Partnership for New York City)

• Office vacancy in San Francisco reaches a record high of 34% (TRD)

🤷 Retail

The overall sentiment of the provided headlines appears to be mixed. There are positive elements, such as investment in upgrades, strategic moves for mergers, and insights into the value and opportunities within the retail sector. However, there are also negative aspects highlighted, including challenges facing downtown areas, significant losses due to shrink and theft, store closures due to theft and violence concerns, and risks associated with particular investments or market shifts. The combination of strategic growth initiatives and identified challenges and risks in the retail sector contribute to an overall mixed sentiment in the reporting.

• JCPenney is spending $1 billion on store and online upgrades in latest bid to revive its business (CNBC)

• The Ground-Floor Window Into What’s Ailing Downtowns (NYT)

• It’s Fall. Time to Sprinkle Pumpkin Pie Spice on Your Retail Property (GlobeSt)

• Kroger, Albertsons To Sell 413 Stores, Eight Warehouses To Pave Way for Merger (CoStar)

• A Mall Owner’s About-Face: Bet on America’s High-End Malls (WSJ)

• Looking for Retail Rent Growth? Follow the People. (CoStar)

• New York Developer Gambles on Las Vegas Shift Toward Strip-Facing Stores (CoStar)

• Shrink and theft losses near $1 billion at Lowe’s — here’s how much they’re costing other retailers (CNBC)

• 5 Reasons Retail is More Valuable Than You Think (CRE Fast Five)

• Discount Grocers Stocking CRE Opportunity (CPE)

• Target To Shut Nine Stores Nationally, Blaming Retail Theft and Violence Concerns (CoStar)

📉 Debt

The overall sentiment of the provided headlines appears to be negative. The headlines collectively convey challenges and risks in the loan and credit sector related to real estate, including increased loan modifications, loan distress, delinquency rates, and impending credit shocks. There are also mentions of a "doom loop" threatening banks, lending restrictions, looming regulations, and a significant pullback in lending. While there are elements of resilience and strategic moves mentioned, the predominant tone reflects concerns and uncertainties in the commercial real estate credit and lending markets, leading to an overall negative sentiment in the reporting.

• Collateralized loan obligation modifications quadruple in second quarter (TRD)

• FDIC Keeping Control of Signature's Rent-Stabilized Loans (TRD) + Marathon Chasing Signature Bank's $33B Loan Portfolio (TRD)

• How Construction Financing Remains Resilient Despite Rate Hikes (CO)

• Real-Estate Doom Loop Threatens America’s Banks (WSJ)

• The Impending Credit Shock In Commercial Real Estate (Blockworks YouTube)

• CMBS Loan Loss Report: Volume of Loan Losses Increases in August 2023 (Trepp)

• CMBS Delinquency Rate Has Jumped 56 Percent Since January (CO)

• Chicago leads in certain commercial property loan distress in August: KBRA (Reuters)

• Blackstone Taps New Credit Boss in Bid for $1 Trillion Goal (BBG)

• Tranche warfare: Lenders tussle for control of distressed real estate (TRD)

• Lending Restrictions, Looming Regulation For Banks Cast 'Long Shadow' On CRE (BisNow)

• Top economist Mohamed El-Erian warns of commercial real-estate pain as 'massive' refinancing looms (Market Insider)

• Distressed CRE loans surge nationwide (TRD)

• 'Record Collapse': New Report Shows Extent Of Regional Bank Pullback In CRE Lending (BisNow)

🤷 Hotel

The overall sentiment of the provided headlines appears to be mixed. There are positive aspects noted, such as an increase in New York hotel occupancy, the installation of Tesla charging stations at Hilton hotels, the unveiling of a new resort in Las Vegas, and the anticipation of a comeback for a hard-hit hotel market. However, there are also negative elements present, including a drop in Airbnbs due to new rental laws, a sudden slump in hotels, weakening hotel performance amidst a debt maturity crisis, and a forecasted slowing in hotel revenue growth. The combination of positive developments and negative challenges leads to an overall mixed sentiment in the reporting.

• Most Airbnbs to Drop with NYC's New Short-Term Rental Law (TRD) + NYC OK'd 10% of short-term rental apps under new laws (TRD)

• N.Y. Hotel Occupancy Soars 10% As Tourists Flock To The City (Bisnow)

• Tesla to install charging stations at 2,000 Hiltons in North America (CNBC)

• Hotels’ Sudden Slump (GlobeSt)

• Extended Stay Hotels Versus Multifamily (GlobeSt)

• Hotel Performance Is Weakening Just As The Industry Hits Its Own Debt Maturity Crisis (BisNow)

• Vegas’ Newest Resort Is a $3.7 Billion Palace, 23 Years in the Making (BBG)

• U.S.’s Hardest-Hit Hotel Market Primed for a Comeback (WSJ)

• Fitch Sees Further Slowing in Hotel Revenue Growth (Fitch Ratings)

📉 Politics

The overall sentiment of the provided headlines appears to be mixed to negative. There are several headlines highlighting legal and regulatory challenges, including a class-action lawsuit, settlement of fraud charges, and a penalty related to whistleblower protections. These convey a sense of conflict and legal risk in the real estate sector. However, there are also headlines about potential policy measures aimed at addressing housing shortages and providing tax incentives for loan modifications and debt workouts, which could be seen as positive or proactive responses to challenges in the real estate market. The combination of legal issues and policy responses leads to an overall mixed but somewhat negative sentiment in the reporting.

• The 10 biggest real estate lobbying spenders (TRD)

• How U.S. Tax Law Impacts Foreign Investors Considering a Sale (Commercial Property Executive)

• Yardi, 18 Real Estate Firms Accused Of Rent Fixing In Class-Action Lawsuit (BisNow)

• Crowdfunding platform YieldStreet settles SEC fraud charges (TRD)

• California lawmakers vote to increase housing in cities falling short of construction goals (LA Times)

• CBRE Agrees To Pay SEC Penalty, Change Procedure To Avoid Violating Whistleblower Protections (CoStar)

• House Bill Would Create Tax Incentive for CRE Loan Modifications and Debt Workouts (CO)

📉 China

The overall sentiment of the provided headlines appears to be negative. The headlines collectively convey a sense of crisis and trouble in China’s property market, with mentions of a credit wreck and governance failings. While there is mention of efforts to save the property market, the overall tone suggests uncertainty and concern regarding the situation in China and potential implications for the U.S. commercial real estate market. This leads to an overall negative sentiment in the reporting.

• China’s Property Market Crisis (WSJ Podcasts)

• Here’s Everything China Is Doing to Save Its Property Market (Bloomberg)

• U.S. Commercial Real Estate Seems Safe From China’s Troubles. That Could Change Fast. (Commercial Observer)

• China’s Credit Wreck Exposes Governance Failings to the World (BBG)

🤷 Other

The provided headlines convey a mixed overall sentiment in the real estate market. Positive elements include significant investments, strategic planning, and growth in various sectors, as evidenced by headlines about direct investments, major projects, and tech giants making substantial investments in real estate. However, there are also negative aspects highlighted, such as depressed demand in senior housing, high borrowing costs impacting brokers, and growing insurance and climate-related risks affecting homeowners and landlords.

• Senior Housing Sector Getting Hit With Depressed Demand, Billions In Loan Maturities (BisNow)

• Citi’s Family Office Clients Are Hunting for Direct Investments (BBG)

• The Next Life Sciences Hot Spot Could Be In Columbus, Ohio (BisNow)

• Office and Apartment Sectors Magnify Cap Rate Disparities (NAREIT)

• Property Brokers Slump With High Borrowing Costs Weighing on Deals (Bloomberg)

• Netflix Billionaire Buys North America’s Largest Ski Resort (Forbes)

• Unearthing Real Estate Trends in Commodity Cities (MSCI)

• How CBRE’s top tech expert thinks AI could change the commercial real estate industry (Dallas Morning News)

• New York City’s Migrants Surge Enlists a Reluctant Commercial Real Estate Industry (CO)

• Uncovering opportunities in stressed commercial real estate (JPM PB)

• World’s Mega-Rich Are Betting on US Renters to Grow Their Billions (BBG)

• Adams rolls out sweeping housing reforms, biggest NYC zoning changes in years (NYP)

• Black Salmon, Allen Morris plan $1B Miami Health District project (TRD)

• The Silicon Valley investors who secretly bought up $800 million in Northern California real estate reveal unexpected plans for 'a city of yesterday' (BI)

• Home insurers cut natural disasters from policies as climate risks grow (WaPo)

• Surging Insurance Costs Have Come for Office Landlords (WSJ)

• Google Adds to Texas Bandwidth With New $600 Million Data Center (CoStar)

• Why Amazon Is Investing $11B In A Small, Rural Virginia County (BisNow)

So, there you have it. That’s what I’ve been reading this month. Send thoughts – good or bad – my way. And, as always, if you’re interested in investing alongside us, please fill out the investor form below.

— Brooks