January 16, 2024 MWCRE Market Pulse

• In summer 2023, Wall Street-backed corporate landlord Starwood Capital Group sold 264 homes in Clark County to Dallas-based Invitation Homes for a total of $98 million.
• The sale, consisting of three separate transactions, closed on July 18, with the largest transaction amounting to $57.5 million for 155 homes, followed by $26.3 million for 70 homes and $14.1 million for 39 homes.
• The majority of the sold homes (94) are located in Las Vegas, followed by North Las Vegas with 77 homes. The price range for each home varied from approximately $292,000 to $694,000, with an average price of $371,514.
• This sale is part of a broader $650 million deal between Starwood Capital and Invitation Homes, involving close to 1,900 single-family rental homes in various Sun Belt locations, including Texas, Florida, Phoenix, Las Vegas, and Los Angeles.
• Wall Street-backed entities, including hedge funds and corporate landlords, have been acquiring single-family homes since 2009, potentially leading to a decrease in available houses for purchase, higher rental prices, and fewer affordable homes in regions like the Las Vegas Valley.
• A MetLife Investment Management study shows that investors could own close to 40 percent of all U.S. houses by 2030.

By James Ice

• The Riverdale Road area in Northern Utah has seen significant growth in new businesses in recent years. While there has been a slight slowdown, the corridor continues to experience expansion and change.
• Shake Shack recently opened on Riverdale Road, attracting a considerable number of customers.
• Construction is underway for i.d.k. Barbecue, known for its small-town, All-American barbecue, at 1140 W. Riverdale Road.
• Chuck E. Cheese is set to begin construction in the Riverdale Shopping Center in February.
• Handel’s Homemade Ice Cream was another addition since opening in November.
• Tesla Riverdale Automotive Center (at 4581 South 1500 West) and America First Credit Union (at 4624 South 1500 West) are both under construction.
• Other notable businesses coming soon to the area include Thrive Appliance, Ashley Furniture, Empowered Body Works and Bricks & Minifigs.

By Saundra Fife

• Overall inflation increased by 0.3% in December, driven by higher housing, energy, and food prices.
• Housing costs emerged as a significant driver, contributing to over half of the overall inflation increase.
• Public perception contrasts with positive economic indicators such as steady growth, low unemployment, and wage gains.
• The Federal Reserve Bank of New York recently reported that consumers now expect inflation to come in at just 3% over the next year, the lowest one-year forecast since January 2021.
• Over the past year, consumers have experienced price reductions for some individual items. Furniture and bedding prices are down 4%, for example. Men’s suits and coats are 6% lower, televisions 10%, sporting goods nearly 3%, sausages nearly 4%.
• Financial markets anticipate interest rate cuts, economist Vincent Reinhart, a former top Fed economist, suggests a potential delay in implementing these cuts until September.

By Jerad Giottonini

• Founded in Helsinki in 1950, Amer Sports was acquired in 2019 for $5.2 billion by a group led by China’s Anta Sports.
• Amer Sports operates in technical apparel, outdoor performance, and ball/racket sports and includes Arc’teryx, Saloman, Wilson and Peak Performance to name a few. The company eyes a market opportunity of $522 billion.
• Acknowledging a delayed entry into the DTC space, Wilson’s president, Gordon Devin, stated in early 2022 that the company was “probably late to the game” in planning and pursuing growth opportunities.
• Prioritizing a Direct-to-Consumer (DTC) approach, Amer Sports expands Wilson and Arc’teryx brands with new stores, including notable openings in Minnesota, California, Chicago, and New York City.
• Embracing a brand-direct model, Amer Sports aims for a deeper understanding of target consumers, brand elevation, and customized go-to-market strategies.
• With plans for an IPO, the company has selected Goldman Sachs, Bank of America Securities, J.P. Morgan, and Morgan Stanley as joint book-running managers, targeting an IPO value exceeding $1 billion, as reported by Bloomberg. (Amer Sports files for IPO)

By Daniel Bradford

• CoStar reviewed the 100 largest individual office buildings sales in 2023 for which they had a previous sale price and determined that whether a property made or lost money largely came down to when the property was purchased and the size of the property.
• The 100 properties sold for a collective $827.1 million less than the previous purchase, averaging a $42.63 PSF loss, or 15%.
• The popping of the property bubble post-GFC provided great opportunities for buyers to pick up properties for lower prices, often at substantial discounts. Of the 50 out of 100 properties that sold for gains in 2023, the average month and year of the previous sale was May 2012 and the average gain was $150.44 PSF.
• The 50 properties that suffered losses had an average sale month and year of January 2016, which was when the recovery from the GFC was mature, interest rates were near historic lows and cap rates were beginning to compress. The average loss was $139.12 PSF.
• Additionally, buildings larger than 200,000 SF collectively lost $990.2 million with everything smaller gaining $163.1 million. U.S. office buildings 200,000+ SF are currently 15.8% vacant compared to 9.4% vacancy for buildings less than 200,000 SF.

By Rich Lachowsky