Blackstone's Gray: CRE presenting buying opportunities | Fed holds interest rates, projects 3 cuts this year | Distressed office sales are still uncommon
March 21, 2024
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Morgan Stanley is among firms introducing nontraded REITs as investors prepare for the Federal Reserve to decrease interest rates, allowing acquisitions of valuable properties at lower prices. Nontraded REITs are expected to turn their attention to industrial properties as investors limit exposure to offices.
Full Story: CoStar Group (3/19) 
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Blackstone President Jon Gray believes that commercial real estate prices are reaching bottom, presenting appealing opportunities for investors to get active in the market. "As investors, sometimes, one of the risks is that you miss it by being overly cautious and I think now is probably a good time before rates come down," Gray says.
Full Story: Bloomberg (3/14) 
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The Federal Reserve left interest rates unchanged at the conclusion of its meeting, but officials indicated they still anticipate three rate cuts this year. However, they also slightly increased inflation forecasts and predicted that there would only be three cuts next year, down from a prior projection of four.
Full Story: The Associated Press (3/20),  NBC News (3/20),  The Hill (3/20),  Reuters (3/21) 
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Office deals involving distressed sellers have been relatively rare so far, accounting for just 3.5% of transactions last year and 2.7% in January, according to MSCI Real Assets. The relatively strong economy could help explain the trend, and multiple investors are pursuing opportunities for distressed real estate lending. Still, CBRE projects that office landlords will have to deal with a $72.7 billion refinancing shortfall through the end of 2025.
Full Story: The Wall Street Journal (3/17) 
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Industry News
Inland Real Estate Acquisitions has finalized a joint venture transaction involving a student housing property in an Opportunity Zone in Tallahassee, Fla. Construction is underway for the 367-unit property, with a fall 2026 opening expected.
Full Story: The DI Wire (3/20) 
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Policy Update
The US Court of Appeals for the 5th Circuit has temporarily put the Securities and Exchange Commission's new climate disclosure rule on hold in response to a challenge from Liberty Energy and Nomad Proppant Services. The SEC had argued that the pause was unnecessary because disclosures will not be required until March 2026.
Full Story: E&E News (3/15),  Reuters (3/15),  The New York Times (3/15) 
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Financial advisers have to prepare to comply with the Labor Department's fiduciary rule, even though it will face court challenges, because even if those challenges are successful, they could take years, says Emily Kile-Maxwell, an attorney at Faegre Drinker Biddle & Reath. "Most likely, we're not going to be able to rely on litigation to vacate the rule before it goes into effect," Kile-Maxwell says, noting that it took two years to stop a 2016 fiduciary rule in court and a year to stop a 2020 version.
Full Story: ThinkAdvisor (free registration) (3/19) 
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RIA Focus
Climate adaptation is an emerging investment theme, according to BlackRock Investment Institute, as companies move to pursue strategies that will help people adjust to changing conditions. Investors had largely overlooked this niche in the past, but rising numbers of fires, storms and droughts have led to a recognition that "we're going to need to much more immediately adapt and build resilience to climate change," said Jay Koh, chair of Global Adaptation and Resilience Investment Group, which produced a report on the topic.
Full Story: Reuters (3/14) 
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In a society where women often feel pressured to tear one another down, our saving grace lies in our willingness to lift one another up.
Madeleine Albright,
diplomat, first woman to serve as US secretary of state

March is Women's History Month
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About IPA
The Institute for Portfolio Alternatives (IPA) provides national leadership for the Portfolio Diversifying Investments (PDI) industry. We bring together the investment managers, broker-dealers, investment advisers and industry service professionals - new and established - who are dedicated to driving transparency and innovation in the marketplace. Through advocacy and industry-leading education, we are committed to ensuring all investors have access to real assets and the opportunity to effectively balance their investment portfolios.

The IPA seeks to raise awareness of PDI products among stakeholders and market participants, including: investment advisers, public policymakers and the investing public. We support increased access to investment strategies with low correlation to the broader markets such as: non-listed real estate investment trusts (REITs), business development companies (BDCs), interval funds, closed-end funds, opportunity zones funds, DSTs/1031 Exchanges, and other private placements.

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