← The TreppWire Podcast: A Commercial Real Estate Show
The TreppWire Podcast: A Commercial Real Estate Show
367. Year-End CRE Plot Twists: Fed Dots and Drama, Warner Bros. Sale & Their CRE Footprint, and Office & Multifamily Transactions
00:49:07
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- [00:00]
Lonnie Hendry
Foreign.
- [00:06]
Hayley Keen
Welcome to the TrapWire Podcast, the show where commercial real estate meets data and insights. This is our weekly review for the week ending December 12, 2025. I'm Hayley Keen with Trep, a data modeling and analytics firm for the CMBS Commercial Real Estate and CLO Markets. I'm with Lonnie Hendry, Chief Product Officer, and Steven Bushbaum, Research Director. This week, markets are reacting to the Fed's December decision where policymakers delivered a 25 basis point cut, bringing the target rate down to a range of 3.5 to 3.75%. The vote was split 9 to 3, highlighting the tension inside the Fed between members worried about labor market softness and those concerned that further easing could reignite inflation. With bond markets still volatile, the focus now shifts to the Fed statement and Powell's press conference for clues about how much further they're willing to go in 2026. So on today's show, we'll break down what the Fed's communication could mean for rates, credit spreads and CRE financing conditions. We'll also dig into some of the standout headlines across property sectors and look into Netflix's latest acquisition and what it could mean for Hollywood real estate as strategies continue to evolve. And we'll touch on sector level moves and new data points, helping us track where stress and strength are showing up as the year winds down. So, Stephen, with the cut now delivered and the Fed clearly divided on what comes next, how are you reading the setup for markets this week?
- [01:34]
Steven Bushbaum
Well, I got to say I couldn't be happier with our recording timing this week since the Fed's decision just hit the tape. They did go ahead with that 25 basis point cut, but it came with a lot more drama than we've seen in a while. We actually had three descents, which is the most you've seen since 2019. You had Myron, who wanted a 50 basis point cut, while Austan Goolsbee and Jeffrey Schmid voted to hold the target rate steady. So even though the headline matches what the market was already pricing in, the message underneath is we're really not all on the same page about this easing path yet. So that alone is going to keep volatility at least mildly elevated, potentially moderately so heading into 2026. Now, what's funny is that while this seems like an elevated level of dissent, believe it or not, it was actually wasn't as bad as what some strategists and economists had predicted over the past couple of days. Some folks were actually looking for as many as five dissents now, there's another piece that flew potentially under the radar a little bit here and that's that the Fed explicitly said that reserve balances are back down to, quote, ample levels and that they're going to start buying short term Treasuries as needed to maintain that, that ample reserve level. So this isn't like a full blown QE 2.0 in the pandemic sense, but it is a quiet shift towards a more supportive liquidity backdrop. More reserves in the system should help money markets function smoothly and can be a tailwind for risk assets, at least at the margin, even while they're still trying to finish the job on inflation. But there's still more that we need to cover here in this release. So, Lonnie, do you want to unpack some of what we saw in the December SEP update?
- [03:19]
Lonnie Hendry
Yeah. So it's, you know, I don't think anything today really jumped off the page. As you mentioned, even with the three descents, there was, you know, enough talk track that there might even be more than that. Definitely a little bit of a hawkish, I think overtone. If you look at the scp, you know, that side of the story is pretty much textbook soft landing attempt. You know, growth for 25 and 26 nudged higher, is nudged higher around the high ones to low twos. Unemployment's basically unchanged in the mid fours and both PCE and core PCE a little bit lower than in September, but still above 2% in 2025. So you look at what they're projecting by 27 and 28, they pretty much have inflation back at target. I think you and I could debate, Stephen, whether we think that's realistic or not. And I think at this point, you know, the 2% target I still believe has some question. I mean, there's been a lot of discussion around should the target be 3%. And we've been pretty sticky at that upper end of the 2% range. So we'll see how that plays. And you know, what really matters for markets though is the policy path. Median dots for the funds rate in 25 through 28 are essentially unchanged from September. Longer run dot is still sitting at 3%. So today's cut is really more like a recalibration than what I would suggest is an aggressive easing cycle. If you look at rates, you know, spreads and cre, that says higher for longer, but not as high as we thought maybe a few months ago. As you mentioned, Stephen, this is probably good news for borrowers. You know, relatively speaking compared to where we were at the Peak. But as we've been saying for many months now, this doesn't magically fix the refi math that we're still underwritten or executed on at a 3% handle on the interest rate side. And I think if you look at just the broad lens here, property level, stress and credit, I mean, it seems like they're trying to shore up the short end of the curve here with some of this qe. I know all of us probably have a little bit of nervousness and we start hearing about the Fed buying and what that means. But in this instance, since they're, you know, they've targeted 40 billion, I believe on the short end, they're not trying to manipulate the long end of the curve. I really do think this is intended just to provide additional liquidity. And for those floating rate borrowers that are, you know, pegged to SOFR or something else, you may see some, some, you know, quantifiable relief for them in the short term.
- [05:37]
Steven Bushbaum
Yeah, I'm not an expert on overnight repo facilities or anything like that, but I did see over this past week, we had, I think it was the highest level of utilization of the Fed's overnight borrowing facility since 2021. So consistent with what the Fed released today, there is a little bit more stress, I hate to even say stress, but certainly some liquidity demand, stronger liquidity demand than what we have seen over the past couple of months. So all of this taken together tells me that we're pretty close to neutral right now. And I'll be curious to see, you know, over the next, really call it about a week to digest all of the Fed speak, both the press conference and all of, you know, the press tour for each of the individual Fed members. Because if you look at the dot plot, even though we had two people saying they wanted to hold rates steady, if you look at that dot plot, you had six dots there, you know, which would imply you were having some convincing that got done in the back room before that voting took place. And I think that's going to be really important going into 2020, 26 for whoever ends up being the new Fed chair, is how good are they at consensus, bringing people to the table, and ultimately bringing the consensus forward to markets, and importantly, the confidence in those forward projections that we all rely on, because right now it does feel a little bit like a sea change.
- [07:03]
Lonnie Hendry
Well, we hit on this a little bit earlier in 25 when we talked about Powell being a lame duck. And I mean, I think at this point it's really close. I mean, like, every day we're hearing more and more talk about his replacement. You got a little bit of divergence in what you just described with, you know, the dissents, but in the dot plot, but then just the talk track narrative that we're hearing broadly in the market. It's almost like some people maybe just mailed this in, you know, like on the dot plot. It's like they're ready for the holiday break here. They had to fill it out, they check the box. It doesn't materially align with what they believe or say. So I, you know, we have to put stock in what's put out. I think the commentary from the press conference, you know, is one that I said earlier, takes kind of a hawkish tone to this. But there's going to be a lot to digest. And I think, quite honestly, when you get someone to replace Powell, that's when you really start putting your ear to the ground to kind of see what, what is the consensus then, as you mentioned? Because I, I think at this point there's been enough disruption. I mean, for, I don't know, however long, two plus years, everyone was lockstep with Pal, and you've seen this growing divergence of people, you know, not in lockstep with him. So it'll be interesting as it is, every time we have this discussion of just what does this mean? I think all in all, you know, you were talking about the Fed Watch tool. The last couple of episodes, it's gone up and down, but this was pretty much baked in at this point. I don't think there's anything surprising here. Then maybe the QE part was a little bit surprising for folks that weren't in the know. Outside of that, I don't think this changes anything dramatically. The one thing, you know, when we were talking before we started, you know, the Fed raised the outlook for 26 on growth. So GDP growth, they're estimating at 2.3%, up from 1.8% in September. And if you look at 25 growth, it's projected at 1.7. So, you know, modest slowdown before a pretty strong rebound next year. So we'll see if that comes to fruition.
- [08:54]
Steven Bushbaum
So, one thing just to talk about the market response in real time, I was curious to see what was going to happen with the yield curve, because over the last, really two meetings, what you saw was a bullish response from rates, rates declining. But then as the press conference got going, you saw bonds sell off a little bit or at least give back some of the gains as that press conference progressed and the day wore on. But right now it looks like we're holding on to pretty decent gains. We got a bull steepener here with the ten year dropping, call it about two and a half basis points and the two year is dropped almost five and a half basis. So I'll be curious to see if we continue to hold onto these gains as the day progresses. I'm tempted to say that we will, largely because of the Fed effectively enacting that bond buying or the liquidity support that they mentioned in their announcement. So I think we'll be heading into a really nice year end here with both equities rallying, bonds rallying and sets us up for what we're all expecting to be a pretty strong start to 2026. In fact, just one more bit of data here that I can't help but throw. I've been watching new issue, the new issue pipeline here, just seeing exactly how much we're going to end up with for 2025. And Lonnie, did you see what we have announced here? For effectively the last, last active week in markets, we had five Conduit deals all closing on the same day here. I mean this is wild. You haven't seen this sort of an issuance push in quite a while. I mean, five deals closing the same week, that's, that's an incredibly bullish sign.
- [10:35]
Lonnie Hendry
Yeah, I think that's a super solid sign. And Conduit finally got tired of hearing all this ASB talk and they said, look, we're going to finish out the year with a bang.
- [10:43]
Hayley Keen
Okay guys, I want us to talk about one other big headline that has been making rounds all week. And this is in the world of streaming. So at the start of the week, the big headline was that Netflix was looking to acquire Warner Bros. And people were questioning what this could mean for the streaming landscape. Those in commercial real estate were also considering the commercial real estate implications. But now, just a few days later, the story has shifted again. Paramount has stepped in with its own bid, adding a whole new layer to the consolidation narrative. So talk to us about what the news is saying, what's going on in the streaming world, and then let's tie it all back to real estate. How could this implicate any of the real estate that exists out there across any of these portfolios?
- [11:28]
Steven Bushbaum
So yes, we have had some really fun, really interesting acquisition drama here this week with Netflix's bid for Warner Brothers here being challenged by Paramount. So Netflix offered to purchase Warner Brothers for $72 billion and Paramount now is trying to one up them by offering more money and offering to buy the entire business. As Netflix's bid was only for a portion, namely the. Really the biggest pieces were the streaming service and the real estate assets, namely the studio, soundstage, all of that fun stuff that goes along with production. So in addition to that purchase price, there's also a cash and stock proposal valued at 27.$75 per Warner share, giving this acquisition a total enterprise value of 82.7 billion, including debt that would be assumed as part of the deal. By contrast, Paramount's offer is for $30 per Warner share and worth approximately 108 billion, including the assumed 10 debt. So Paramount's offer is set to expire on January 8th unless it's extended. And I think what we're all wondering here on the real estate side is, okay, what does this mean for our market? So, Lonnie, I think you have some really fun stats and details here on the real estate side you can share.
- [12:51]
Lonnie Hendry
Yeah. So I don't know, Stephen, if you intentionally had a play on words there when you said a transaction drama, acquisition drama, or if this is going to be a comedy or if this is a thriller based on the secondary bid that came in, I guess we'll have to see how that plays out. I think from a CRE perspective, it's pretty obvious they're trying to acquire about 100 million square foot of studio and office space that they can use. There are very large tenants. Netflix today currently leases, I believe, over 5 million square feet of space. So transitioning from tenant to owner is a very good play for them. Obviously the driving force behind this outside of the real estate is the acquisition of the pretty significant or iconic franchises. Harry Potter, Game of Thrones, DC Universe, all of those things come into play. But I think from a CRE perspective, to me this is not too dissimilar from what we've seen with just vertical integration across other large scale players. So I would liken this to Amazon. If you look at Amazon's logistics network, you know, they effectively built their own fulfillment centers. And we've seen that, we've talked about that. 25 years worth of construction in about five years. They did that through build to suit and new construction. Netflix effectively just acquires a portfolio overnight. If you look at Tesla, very similar strategy with their battery plants. They want to control the pipeline. And I think Netflix has the same thing here. You know, if you look at this particular subset of real estate, you know, large scale production hubs could really reshape Supply and demand dynamics. So I think if you're a current owner of a studio property, this has to be great news for you because now it's going to increase the value of your property because others are going to have to try to acquire similar type of assets to also control their, their content creation, etc. Etc. And so I think for you as an owner, that's a great story. And I think if you're someone that's just media adjacent, we've seen this already in several markets where if you provide props or costumes or other things to these large scale streamers, those businesses are going to be primed for an uptick as well. What will be interesting is just to see, you know, how the geographic strategy plays out, because I know in Texas, Steven, you know, we have heavily incentivized the film industry to relocate a lot of their production to Texas. And so there are tax abatements, there's favorable treatment, there's all these. The state actually has a fund set up to help offset some costs to try to bring more production to the state and bring some of that California, you know, Hollywood stuff to Texas. And so, you know, for me, this kind of creates a really cool opportunity where some of those supply demand concepts that we just talked about, as well as incentives, zoning, all of these things that we've been talking about on data centers for the last six months, could potentially start popping up at some level. Not to the same scale, but at some level for some of these media studio type of real estate properties.
- [15:50]
Steven Bushbaum
Yeah. And just to pile on to the diversification, geographic diversification here for the film industry. I mean, you have something similar with Georgia. I don't know, like how many times you actually watch all the way through a TV show or a movie and see that Made in Georgia logo. That'll be particularly interesting, I think, especially if Paramount ends up with the winning bid here. So look at this from a real estate angle. What'll be interesting to see is if Netflix pulls this off, they'd effectively go from being predominantly a tenant to one of the largest owners of real estate overnight. I think the stat we saw was close to 100 million square feet of office, studio and production space. So, I mean, that is a massive pivot in their capital and risk structure. So what'll be interesting if Netflix does win this bid is I'd expect them to be very selective about what they actually keep on the balance sheet. So obviously there's going to be some crown jewels that they'll want to keep control of and keep on the balance sheet that are going to support their competitive moat. But then you think, okay, given how large this portfolio is, there's going to be lots of room for some sale leasebacks or dispositions because they have to rationalize ultimately what they're they're keeping here. That portfolio, whether it's Netflix or Paramount, this needs to be a productive portfolio. And for Netflix, you imagine they're going to want to free up cash given how large this is in the scheme of their business. So that could create some very interesting opportunities for institutional capital that wants long duration income in markets like say Burbank or London. But then if you pivot to what could happen if Paramount wins the bid because they're buying the whole enchilada rather than Netflix, who's just targeting those streaming and studio assets, there really might not be a whole lot of drama short term if Paramount wins the bid. But longer term, I would expect them to maybe press harder for some cost savings and trim the overlap across networks, office footprints and production facilities. But either way, this is sure to make for some very interesting, very exciting dealmaking.
- [17:50]
Lonnie Hendry
Well, you know, New Jersey actually has a billion dollar production campus currently underway. I wanted to see what your thoughts were on this, Stephen, because this obviously this all makes sense from a vertical integration perspective. Owning the entire production pipeline, creation pipeline, distribution pipeline, all of that makes sense. To your point, you're going from a small leased footprint to being a global powerhouse overnight, like all of that makes sense. The part that I have a little bit of question about is in the age of AI, with all of this digital production, it's a pretty dramatic shift to kind of be like going all in on the tangible real asset, real estate part of the business. So, you know, makes me wonder, do they know something we don't or are they maybe, you know, buying this to have some sort of a longer term play as a scaled portfolio of really well located assets if and when the time comes for a transition to digital content creation, because it's kind of the timing to me seems a little bit off relative to where we are with AI, video production, et cetera, et cetera.
- [18:48]
Steven Bushbaum
No, I think that's a really important point and I wish I had better stats or insight onto production cost. Digital production cost, because it used to be, what was the joke like in Game of Thrones? Why didn't we see more of the dragons? Well, I guess they chewed up all of their budget with those three dragon scenes. Right. So, you know, the scales are starting to balance more here, but I imagine it still is extremely Expensive. I'd love if any of our audience has any insights into like the cost, cost per minute of AI generation or just digitization cost in movie production and maybe what some of the forward projections look like as our compute power increases. But at the end of the day, AI is only as smart as what it's been trained on. So at some level we'll still need to have some of that organic real material make its way into the training system. So there's always going to be a need for some of that physical asset. It's just a matter of, or a question of, okay, how much do we need as we continue along this AI transition?
- [19:56]
Lonnie Hendry
Well, it's just cool to see how real estate is such a heavy component across all these different industries. I mean, I mentioned Tesla, I mentioned Amazon and film production. I mean, all of these things still have a core dependency on real estate. So for those of us in the business, it's really cool to see just how dynamic this market is and how impactful it is across all these different industries that some are maybe, you know, tangentially connected while others have no connection at all. But it's, you know, same type of structure, same type of utility for their specific use. It's, it's really cool to see this playing out real time. And I don't think any of us had this on our bingo card coming, you know, end of 2025, that we're going to see 100 billion, $100 billion type of acquisition, you know, take place in something like this here, three weeks before the end of the year.
- [20:40]
Steven Bushbaum
So I'd be remiss, Lonnie, if I didn't mention a major CMBS exposure that's relevant to this deal. There was a 2024 SASB deal that was issued on Warner Brothers headquarters. It's backed by two newly developed Class A LEED certified office buildings totaling just over 810,000 square feet, located in Burbank, California, right in the heart of Burbank's media district. And this property is 100% leased to Warner Brothers. And as of January 2024, the weighted average remaining lease term on this property was 14.4 years. So any of our CMBS investors out there that have exposure to this Warner Brothers 24 HQ deal will be watching this very closely.
- [21:31]
Lonnie Hendry
People might not know, Stephen, that we track these types of kind of one off deals. I mean, I've had multiple calls with prospects and clients that have called in asking if we have parking garage data. And it's like, yeah, we do. We have movie Studio stuff. We have a lot of different data in the vault. So, you know, it's not just your traditional run of the mill property types. It's really great to see. And yeah, this definitely will get a little more attention now that this deal has been announced, although as we mentioned, it's got a lot of regulatory hair on it and there's going to be some discussions happening out, playing the right through the media before this actually gets anywhere close to closing.
- [22:04]
Steven Bushbaum
How Jared Kushner continues to show up on all of these deals.
- [22:09]
Lonnie Hendry
It'S crazy, man.
- [22:11]
Steven Bushbaum
Yeah.
- [22:12]
Hayley Keen
So let's dig further into the world of commercial real estate with some recent deals and data. I want us to start in the office market. We saw a headline in the Commercial observer this week that Sovereign Partners paid 273 million for Manhattan's 2 grand Central Tower.
- [22:31]
Steven Bushbaum
Yes. This acquisition penciled out to a little bit more than $409 per square foot for the 667,000 square foot two grand central office Tower that's in midtown Manhattan. The New York investor acquired the property from Rockwood Capital of San Francisco, which offered it through Estill Secured. The building is encumbered by a $262.6 million mortgage that MetLife provided. Earlier in the year, Rockwood acquired the property at 140 E. 45th St. And 2011 for 401 million. Next up, we have a Crescent affiliate has paid 70.4 million for a Coral Gables, Florida office building. So Crescent Real Estate has bought Ryder Colonnade, a 206,000 square foot office building in Coral Gables, Florida for 70.4 million or $340 per square foot. This news coming to us from the South Florida Business Journal. The Fort Worth, Texas company purchased the 11 story property from AEW Capital Management of Boston, which was represented by CBRE. So CBRE also arranged 67.86 million of financing from FS Credit Originator. Ryder Colonnade at 2333 Ponce de Leon Boulevard was built in 1987 and serves as the headquarters of Rider System, a supply management and logistics company.
- [23:55]
Lonnie Hendry
So Stephen, circling back to your Sovereign Partners transaction. So that price seemed really low to me, $409 a square foot for that Grand Central Tower. We've seen prices in that submarket, you know, is significantly higher than that. So I did a little digging here. You know, if you look back now, this is going back Sometime right in 2008, property was purchased at like 705 million. 2011, Rockwood Capital purchased it for 401 million. And so now the acquisition from Sovereign Partners at 273 is a 32% decline from Rockwood's previous price. So pretty significant reduction in transaction price. It'll be interesting to see if they have a value add or reposition or what the story is here. The 409 is slightly higher than the initial asking price, which means that there was probably some competition at that low price point. But just from a historical perspective, especially for Rockwood, that the 2008 price you can throw out the window from Boston Properties with the Rockwood price at 401, it's a pretty significant haircut on this deal.
- [25:02]
Steven Bushbaum
Yeah, that's some good color on the list versus sale there, which I think kind of supports the notion that we've effectively found where the bottom is in core markets, top tier markets, even when you're trading down to say, like some Class B assets. So the trickle down effect is hopefully starting to really pick up momentum here. It'll be exciting to see what 2026 will bring for us.
- [25:29]
Lonnie Hendry
I think this is the second or third Crescent story we've had in the last few months as well. They've been pretty active over the last several months, so it's good to see they're pretty strong office connoisseurs and so seeing them active in multiple markets now I think is another strong signal for the sector.
- [25:44]
Hayley Keen
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- [26:35]
Steven Bushbaum
Yes, according to SL Green and Connect CRE, SL Green has closed on the acquisition of its joint venture partners combined 39.48% interest in 800 Third Avenue for a total cash consideration of 5.1 million and completed a modification and extension of the property's existing $177 million mortgage. The REIT's ownership stake in the 41 story office tower is now 100%. The mortgage modification extended the maturity date from February 2026 to February 2031, including all available extension options. The interest rate was held at 1.7% over SOFR, which the company fixed at 5.03% from February 2026 through the initial maturity date in February 2029. And we have a quote here from the CIO of SL Green saying these strategic transactions exemplify SL Green's long term outlook on well located Midtown Manhattan assets and demonstrate our ability to execute loan modifications that extend our maturity profile while maintaining accretive terms. We continue to see strong momentum on 3rd Avenue with residential conversions helping reposition the corridor for strong office sector growth.
- [27:55]
Lonnie Hendry
And this is a, this is a nice location, Stephen. I mean this is a 1972 year built building. It's 41 story tower, has really great views of Manhattan and East River. It has strong tenant demand because it's close to that Grand Central Terminal corridor that we've talked about in multiple subway lines. You know, they did note in their press release that the ongoing residential conversions and they specifically cited 750 and 845 Third Avenue, they think are tightening office supply and revitalizing the corridor. So again, you know, so Green is saying without saying that they definitely think the bottom has, has passed for office. And they think some of these other things which we've been thinking, you know, office to residential conversions is some sort of an anecdotal component to the market, are now actually driving some supply factor and demand factors in this midtown marketplace. And so this is a really great story. I think this is a great transaction. It's another solid signal for the New York office market. And it's great to see people seeing the positive impacts of some of these office to resi conversions playing out real time.
- [29:01]
Steven Bushbaum
So I guess to put you on the spot here, Lonnie, are you a buyer of say like SL Green and Vernado going into 2026?
- [29:09]
Lonnie Hendry
Yeah, I actually, I think so. I mean, I think, you know, we've been saying for a while that things generally revert to the mean. And I think as it pertains to return to office, we're, we're starting to see that. I mean, I think 2026, 2027, just on the whole, you're going to see four or five day work weeks in the office, that's a pretty strong signal for office. I do think in markets like New York where there's been a pretty heavy office to residential conversion, some of those supply imbalances are being rectified. And I think just generally these acquisition prices that they're able to get, especially if they can lock in existing financing terms or get extensions like they did here, is Very positive and a good sign for the markets. And you know, they've dealt with the disruption of COVID and you know, I think both SL Green and Vornado had pretty significant exposure to office. For them to get back in tells me that they, they feel pretty strong about the fundamentals driving the value, at least at the basis that they're paying for these assets.
- [30:07]
Steven Bushbaum
Yeah, I just pulled up the dividend yield for SL Green and I like them. I mean, in the low sevens you got to feel pretty good about where that's positioned in the world that we're in today where yield is so incredibly precious. You have, gosh, what is it like 7 or 8 trillion in cash liquidity and money market funds that just begging to be deployed. So yeah, I'll be curious to see where this dividend yield ends up mid and late 26 relative to where it sits today.
- [30:37]
Lonnie Hendry
Well, you know, on last month's Market Pulse, we had our friend Seth Glasser join us from Marcus and Millichet. He's a multifamily broker, you know, and he's detailed, you know, in his own podcast and with some of his, you know, written papers that he's put out. And then on our market post just the challenges that they're facing with rent control. And we've documented this, we've talked about this ad nauseam. But you know, he said there was an overarching theme where people, in spite of those regulations and downward pressure, they still said they want to own real estate in New York. So if I'm just looking at this objectively. Right. Do you have more faith in rent controlled multifamily as an acquisition target or office properties at an attractive basis? Obviously office has been, you know, moved down on the list of priority from a lender, from an acquiring, you know, acquisition perspective over the last several years. But it doesn't face the regulatory headwinds that some other asset classes do. So if you buy into the notion that people just want to own New York real estate, I think the longer, you know, medium, medium to longer term view on office has to be pretty strong when compared to some of these rent controlled multifamily assets that people are chasing, even in spite of the regulation.
- [31:42]
Steven Bushbaum
Agree. I mean, I would much rather have exposure to Esso Green at these levels than say, you know, a mid 4 to low 5% yield that faces some regulatory friction.
- [31:54]
Hayley Keen
All right, let's talk about some sales in multifamily. According to the South Florida Business Journal, a Pembroke Pines, Florida apartment complex sold for 52.5 million?
- [32:08]
Steven Bushbaum
Yes. An investor group led by Bobby T. Castro, the co founder of Bankers Healthcare Group, has bought the 206 unit Ventura Point Apartments in Pembroke Pines, Florida for 52.5 million, or just under 255,000 per unit, according to the South Florida Business Journal. The Fort Lauderdale, Florida group Venture Point bought the property from an affiliate of Dallas apartment investor Lloyd James, which acquired the asset in 2019 for 55.6 million. As part of its purchase, the buyer assumed the property's $38.6 million loan. Ventura Point Apartments were built in 2019 on 9.85 acres at 7850 Pasadena Boulevard, about 12 miles southwest of Fort Lauderdale. Next up, we have Jackson Square has paid 48 million for some Seattle area apartments. Jackson Square paid just over 268,000 per unit, or 48 million for the 179 unit tracks at Dupont Station apartment property in the Seattle suburb of Dupont, Washington. The San Francisco investor acquired the property at 1430 Wilmington Drive from a venture of Security Properties and an affiliate of Reinsurance Group of America, which was represented by CBRE. Security Properties had acquired the asset in 2017 for $32.12 million, while RGA became part of the ownership group in 2021 through a recapitalization that valued the property at $44 million. To facilitate the latest deal, CBRE provided a $33.74 million Fannie Mae loan. Tracks at Dupont Station opened in 2013 and has studio one and two bedroom units in the style of townhomes.
- [33:53]
Lonnie Hendry
Yeah, those are pretty popular there for a while, Stephen, where you saw some construction of studio type multifamily, you know, 179 unit complex is pretty small but pretty nice price tag here at 48 million for Seattle. I think Seattle is one of those interesting markets to watch in 2026. If office comes back at the level we think that it might, Seattle could be really hot again. I mean, up until Covid, I mean Amazon with all of their construction and everything. I mean, I knew of a few folks that sold really dumpy old houses there for a ton of money and moved to Texas. Seattle was on fire and obviously it's, it's not recovered anywhere near where it was at the peak. But if, if return to office actually comes back, you know, Seattle is one of those cities I wouldn't count out in 26 as having a really strong rebound. We've already seen it at some level with some of the return to office mandates, but I think it's primed potentially for a really strong 2026 resurgence.
- [34:46]
Steven Bushbaum
I hope you're right because that, that city is just man, it deserves its day, it deserves its due.
- [34:53]
Lonnie Hendry
Yeah, it's. And it's a great city. I mean, I don't know you, you're a Pike street market. You ever caught the fish? You ever dropped the fish?
- [35:01]
Steven Bushbaum
Nope.
- [35:01]
Lonnie Hendry
It's pretty cool experience. You gotta go check it out.
- [35:04]
Hayley Keen
And on the topic of streaming and TV shows, we saw a cool story in the. That the apartment building from the TV show Friends traded for $33 million.
- [35:18]
Steven Bushbaum
Yes. Jeff Sutton's Wharton Properties sold the six story West Village apartment building at 90 Bedford street famously used for the exterior for the TV show Friends, to an international investor for 32.7 million in an off market deal. Sutton had bought the building in February of 2024 for 18.25 million and extensively renovated most of the 21 fully leased apartments. The property, which has become a pilgrimage site for fans since 1997, includes the ground floor restaurant. Little owl.
- [35:54]
Lonnie Hendry
Does this, does this pass the sniff test to you, Steven? I mean maybe this is just a really good flip, but 18 million in February 24th. This is not a large scale complex. Obviously has some iconic component to it, but no real intrinsic value to the real estate. I wouldn't assume off market international investor paying almost twice the price.
- [36:14]
Steven Bushbaum
I mean you're just talking about buying exposure to New York real estate. Man, this fits the bill. Newly renovated, like obviously you're really hoping that for that delta in price that you know, the capital, the capital that went into that asset really is going to do what it's supposed to do in terms of rent growth and extending the economic life. Do you want to take a guess at when this property was built according to our data?
- [36:41]
Lonnie Hendry
I have no idea.
- [36:43]
Steven Bushbaum
1899.
- [36:45]
Lonnie Hendry
Wow. Yeah, I mean that's, that's pretty cool. Look, I'm hopeful, I'm, I'm hopeful. This is just a great deal. I mean obviously for, for Sutton home run, this is, this is literally the definition of a real estate home run. Hopeful that the, as you mentioned, the invested capital here pays off for the new acquirer at the, the new reset basis of 32.7 million.
- [37:05]
Steven Bushbaum
I mean for, for any of our listeners out there who are, who are fans of the Friends TV show, I think you'll appreciate this joke. I'm hoping that part of the capital that went into this asset was widening the stairways so that you can bring a couch in. Anybody.
- [37:19]
Lonnie Hendry
Aren't there full on businesses or they just like cut your couch in half and move them upstairs and reassemble them in your apartment in New York. Isn't that the deal?
- [37:26]
Hayley Keen
I mean, that's never watched Friends is what I'm learning.
- [37:29]
Steven Bushbaum
That's what Ross had to do.
- [37:31]
Lonnie Hendry
Yeah.
- [37:31]
Hayley Keen
Come on, pivot. Okay, and I'll close us out here with some programming notes. We've had several TREP data releases this week, so if you're not seeing our research and insights, send us a note to podcastrep.com and we'll make sure that you get access to that. One of the reports was our monthly special servicing report. We saw that the special servicing rate ticked up again very slightly in November 2025 and it reached a new 12 year high. If you want to see the details around what happened here and the breakdown by property type, reach out to us and we'll get you access to that report. We also released our TPPI, which is our trip property price index for Q3 2025, and we found that commercial real estate values largely stabilized in the third quarter. They edged higher in small increments, though performance varies by sector and asset quality. So if you want to see the breakdown of some of the findings, including that Office was the standout, lodging is the weakest performer and Multifamily has essentially held flat. Reach out to us and we'll get you access to that. You can also find all of our research on our Trep LinkedIn page. If you're not following us on LinkedIn, please do. We'd love to hear from you if you want to share that you're a listener or reach out to us or just hit that follow button. And we're also very active on X, so you can always find our research insights and quick nuggets of data on there. We are hosting our monthly Market Pulse webinar early this month ahead of the holiday season, so you still have time to sign up. Join us on Wednesday, December 17th at 2pm Eastern. This will be our final Market Pulse webinar of the year and we're really going to be reflecting on the stories that shape 2025 from record breaking distress to record breaking issuance policy shifts and sectors that defied the odds. We'll be almost doing a Spotify wrapped style Market Pulse here, so if you really want a final recap of what happened this year, join us. We can send you the invite link if you send an email to podcastrep.com or you should see the invite in your emails or on LinkedIn. And then a final research paper we put out this week was actually about our Trep Connect service, which is powered by TREP's address resolution service. This report walks through exactly how Trep built its Trap Connect service and the underlying ARS infrastructure to unify fragmented CRE data at scale. So if you're in the industry and you're looking at data every day, you know that it's notoriously fragmented. There's addresses and parcel identifiers that are often misaligned across systems. So what we've spent a lot of time doing at Trep, and we've brought in teams of experts including data scientists, researchers, product specialists. We've gone in and linked all of these parcels, we've normalized addresses, and we've assigned unique TRAP real estate asset identifiers to more than 10 million assets. So if you're interested in seeing kind of the work that we've done, the problem that we were looking to solve, the process, the methodology, and then how you can get access to this data through APIs and other delivery mechanisms, reach out to us. We'll send you the report, but we'd also love to talk to you. If you're managing multiple data sets or if you have 20 tabs, open 20 sheets of Excel, looking at data across vendors, across your own internal data sources, reach out to us. We'd love to just chat with you, hear how you're managing that, and walk you through how some of our solutions may help you. And turning to Shout Outs. JC is an avid listener of the podcast and always enjoys hearing our thoughts on the broader structured finance and CRE markets. They were interested in getting added to our list to see the monthly recurring reports we send out and any of the data. And he said, I appreciate the effort that you all put into the podcast and providing the market with relevant stories and data points. Jaron R sent us some added color on the topic of ground leases. So if you missed it a few weeks ago we did a Ground Lease 101 segment. Steven walked through what a ground lease is, the risks a case study, and Jaron reached out to us and said it's been interesting to see how the industrial sector in Tulsa has really leaned into ground leases, especially around the airport at Tulsa International. The Airport Improvement Trust has been pretty active over the last few years leasing out land to distribution and manufacturing users, and he provided an example that Amazon has built two large warehouses out there. He wanted to know if you guys are seeing the same thing in other parts of the country and if we have any added color here.
- [42:28]
Lonnie Hendry
So yeah, I've seen some of this in Texas where you're seeing these economic development corridors or seeing housing development partnerships or cooperatives or whatever created where ground lease makes a lot of sense. So you know, maybe the county owns the land, they lease it. You know, you have private development command and they do this a lot of times around parking, I mean around airports and most prominent use here in Texas is a lot of the parking around the major airports are on this type of a ground lease structure. So the large parking structures. That way the airport doesn't have to own and maintain the physical infrastructure of the garage or the day to day operation. They just get residual for leasing the land and and they let an operator actually operate. And one of the interesting ones I've seen is actually a dog boarding facility near the airport on leased land. And a lot of times if the land's owned by municipality or county, there's no property tax. So it's kind of a win for everybody.
- [43:24]
Hayley Keen
Joel R. Sent us his Spotify Wrapped. Joel is a longtime listener and he said, I am finally in a 1% category that I would prefer it to be wealth, but listening to the truck podcast via Spotify is almost as good. It just means I'm not able to afford a yacht. So when Lonnie takes his out next, he has to invite me to it, invite me on it. So Lonnie, we might have to tell Joel that you're more of a car guy, not a yacht guy.
- [43:52]
Lonnie Hendry
Yeah, I mean if he wants to come hang out in my enclosed trailer and watch sports while we drag race, like we can do that. I mean, I like yachts. I I'm not in that 1% category financially either to have a yacht, but have a pretty nice enclosed car trailer, a couple race cars, happy to give them a ride in the race car.
- [44:09]
Hayley Keen
And as a reminder, check out your Spotify app, click on the Wrapped and tell us if we are your top podcast. It's been cool to see a lot of you reach out to us and share that. Cole Z. Said he loves our stuff and has learned a lot from the show and was interested to see the delinquency report that we mentioned in our latest episode. If you're a listener and you're ever interested to see something beyond a report that we release publicly. We have a lot of historical data, we have trends, we have insights. So reach out to us and we'd be happy to walk you through some of the information on a call Alex T. Said. He said they're a longtime fan of the podcast and loves the recent coverage on AI. We've gotten mixed reviews on this, some people say enough AI, but to that we say we can't change what's happening in the world. So AI is going to be a talking point and we will still cover how it could potentially impact real estate and the markets. But thank you, Alex. The mention there, he asked a question and said what he wanted to know. Some information about the long term prospects of AI with the potential for large job losses across the board. Are we worried about the impact this could have on multifamily? Some examples like increased bad debt, lack of affordability and how do we think this will affect other sectors and what do we see as potential opportunities to take advantage of these trends? So we could probably do a whole segment on this on another show. But if you guys have any initial thoughts.
- [45:37]
Steven Bushbaum
Yeah, I mean there's obviously the, the big concern that you'll have at least a more near term asymmetric effect with job losses or job transition for AI in some of those blue collar positions. You know, I think in general the way I view this transition is that it'll take place over a longer time frame and the losses or I should say that the winners and hate to say losers, but let's say laggards in this transition will be very much like what we're seeing in the office market where the higher income or the more productive earners, the winners will obviously give a nice boost to certain areas, certain geographies. And the folks that end up having the negative knock on effect of AI, those likely would have been the locations that would continue to see stress anyway, absent the AI innovations. But yes, as you mentioned Hayley, we could probably do a 15, 20 minute deep dive into, you know, specifically where some of these trends might start playing out over the next say five, seven years.
- [46:45]
Hayley Keen
And finally Logan W reached out. They mentioned they have some other data providers out there and are really looking for some more in depth maturity information. He said he loves our weekly podcast and we will get in touch with you and walk you through some of our data and how we can help you.
- [47:03]
Lonnie Hendry
I know we're not a sports show. Stephen doesn't like sports. Just like I don't watch tv. Why? Stephen doesn't really watch sports but, but Philip Rivers just is coming back to the NFL age 44. The dude is literally a grandpa. So that could be an interesting. He actually is a grandpa and he's going to play this weekend. He's been retired for like five years and he's 44 years old. That's the equivalent of like me or Steven going to the NFL right now. I mean, are you kidding me? Obviously he was a really good player, so it's not the equivalent of us, but it's ridiculous.
- [47:35]
Hayley Keen
And I wanted to close here with a call out to our listeners. As a reminder, Trep has a really cool office in Rockefeller center and our clients, people in the industry, our podcast listeners, love to knock on our door and say, hey, can you get me up close access to the Rockefeller Center Christmas tree? We have a terrace that overlooks it. It's really special and for those of us that work in this office, sometimes we take it for granted and forget how cool it is that we get to work right here over the tree. Feeling the Holiday Spirit all the Time so Tripp has our holiday party this week. We're excited to get all the departments together and have some holiday spirit. If you're ever in New York City around the holidays, send us a note. We'd love to welcome you up here. We'll show you around. Come by our offices, you can meet some of our team and if it's not around the holiday time, you still have an open invite. So we're always welcome happy. We're always happy to meet you in person and we'd love to have you by our office. If you're visiting New York or if you work in New York, then it's even better and we can meet up anytime. So with that, we'll close. Thanks to our producer, Carly Sento. Join us next week as we look at what's happened during the week and how it may be impacting you. If you have a question or just a comment, send an email to podcastrep.com and subscribe to the Tripwire podcast with your favorite provider. Thank you for listening and stay well.
- [49:00]
Steven Bushbaum
All right.