Jonathan Luttwak

From the Big J to the Big A. 👇🏼👇🏼👇🏼 The depth of economic collaboration between the state of Georgia and Israel is significant and growing. It’s no secret that Atlanta has experienced meaningful growth the past several years. Here’s some numbers: Impressive Trade Growth: Georgia’s exports to Israel reached over $389 million in 2023, marking an 18% increase from 2022. Since 1996, the total exports to Israel have surpassed $5 billion, ranking Israel as Georgia’s 29th leading trade partner. Some interesting facts: Conexx, formerly the American-Israel Chamber of Commerce Southeast Division, has facilitated transactions worth over $1 billion since its inception, boosting economic ties and creating employment in both regions. Conexx has played a vital role in connecting over 140 Israeli companies with opportunities in the Southeast U.S., facilitating business deals and employment growth, thereby strengthening economic bonds between the regions. In 2021, Georgia exports to Israel totaled $280.2 million. Over 100 Georgia companies have discovered the benefits of doing business in Israel, including BellSouth, Coca-Cola, Home Depot, and Holiday Inn. Now here are some smaller numbers that point to opportunity: Immediately following the October 7th attack on Israel, the State of Georgia bought $10M Israeli bonds as a sign of solidarity and economic resilience. This brought the total Georgia investment in Israel bonds to $25M. Binational Research Success: Georgia has benefited from over $7 million in grants from U.S.-Israel binational foundations for joint research in agriculture, science, and technology. Notable recipients include Emory University, Georgia Tech, and the University of Georgia. #israel #economy

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The serious delinquency rate for office loans reached 7% in April, its highest level since early 2017, according to data from JPMorgan Chase & Co. **NOTE** CMBS is always a bit more dramatic, and not just because they're riskier by nature. It's bc CMBS loans DQ after 30 days late, whereas bank loans DQ after 90 days late (or not at all these days with many borrowers being given forbearance) More on this particular office... WeWork negotiated a 40% decrease in rent as it is now expected to pay just $44 psf for its space in the building as opposed to the $73.26 it was originally paying. OOF! WeWork’s lease was originally intended to end in 2035 but is now expected to end in 2028. "We estimate that the property’s occupancy rate is now at 58% and a 52% decline in gross rental income from the prior year. “… There’s almost a trillion of loans coming due in 2024. That is factually true. But this time last year, there was only a little bit more than $600 billion of loans coming due in 2024. You don’t just make up $400 billion of loans. Why did that increase? Well, lo and behold, a lot of loans that were maturing in 2023 were amended and extended into 2024 and beyond. https://lnkd.in/ggqpHC6m

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Here’s the thing nobody tells you about forming a condominium in Washington State—it’s a freaking pain in the ass. Sure, many zones now allow up to two ADUs (Accessory Dwelling Units), and developers are jumping on the trend of setting them up as separate condos for sale. Some are even combining adjacent properties to maximize the investment. Sounds like a win-win, right? But here’s where it gets tricky, or maybe I’m not aware of a loophole. The Washington Condominium Act is no joke. It’s packed with regulations, legal documents, and warranties you need to understand before you can even break ground. Navigating all that? Overwhelming, to say the least. When I first started digging into it, I felt completely buried under the mountain of information. There were plenty of moments where I thought, “Is this even worth it?” It might be. Hopefully the markets will improve soon. If you’re planning a condo project and feeling lost in the legal maze, let’s connect. I’ve been through it, and I can help you avoid the mistakes I made. I can also refer you to some qualified and experienced lawyers who know the condo laws inside and out.

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Good article discussing the distress in the MF CLO space but, the level of distress is radically understated. I would argue that vintage 21 and 22 CLO's have nearly 100% distress levels. The good news is that we have the tools and inside information necessary to successfully modify debt terms, avoiding foreclosure. https://lnkd.in/gFhuj-4a

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A 525-unit luxury high-rise apartment building across the street from my condo in downtown Los Angeles was sold at half its replacement value for $354,000 per unit, totaling $185 million. This brand-new building, completed in 2018, starkly contrasts with a similar building one block away that sold for $750,000 per unit ten years ago. Today, constructing a similar building would cost between $350 million and $400 million. As someone who isn't a finance expert, I find it difficult to understand why the owner would sell a building that's 94% occupied. Unlike office buildings facing plummeting vacancies, this case seems different. I’ve been told the reasons behind it - higher interest rate at refi, higher insurance premiums and higher labor costs all leading to higher expenses without higher rents/revenue to offset the additional expenses. It's not an isolated incident; many multi-family properties are at risk. I watched the construction from my living room for years, and now, as I type this, I see the building unchanged. A new coffee shop opened, and people are still walking their dogs and going about their lives as if nothing happened. Yet, there has to be a significant impact from "someone" losing millions of dollars. How will this affect all of us? The government claims our economy is better than ever. Depending on the media you follow, it can seem like the best and worst of times simultaneously. Real estate finance and investment experts predict a doomsday scenario. Office development is becoming obsolete, and new housing development has stalled despite a high demand due to the housing crisis. Will this end in a soft landing or a crash and burn? "Someone" has lost or will lose hundreds of billion dollars, so there must be repercussions. Right? More than 60 banks are at risk of failing like First Republic, Silicon Valley Bank, and Signature Bank. I'm with the doomsday camp on this.

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From Panic to Profit, An Appraiser's Story The real estate market has experienced significant market changes over the past few years. It's had a direct impact on many appraisers, their work volume and opportunities. With real estate being cyclical, it's not the first time and won't be the last. There are many ways you can prepare, lean into and embrace any market downturn. We don't have the ability to dictate the direction of the market, but we do have control on our mindset, actions and approach to moving forward, no matter which direction the market is headed. "Working RE" magazine is published to help readers build their businesses, reduce their risk of liability and stay informed on important technology and industry issues. Isaac Peck and Tony Jones interviewed me recently on strategies I've adopted in my career that have helped me overcome challenges, develop new skills and optimize ways for generating new business. Developing clarity on who you can serve best, with your unique skillset is an effective way to attract the right clients and opportunties and create win-win scenarios for your clients and you. Give the article a read and don't hesitate to reach out with any questions! #passion #cre #commercialrealestate #residentialrealestate #appraisers #valuation #appraisal

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“U.S. commercial real estate is headed toward a crisis.” 🍀 Harvard Business Review “A 10% loss on CRE loans would leave more than 100 mostly small and midsize banks, representing nearly $700 billion in assets, undercapitalized.” “A 20% loss would render over 900 banks undercapitalized, including some larger banks.” “Smaller and midsize financial institutions — many of them regional and community banks — are evidently not marking down CRE loan losses …” “Multiple, simultaneous bank failures could be catastrophic for the financial system.” Dana M Peterson chief economist The Conference Board Harvard Business Review (via Nightingale Associates on X) 🍀 “Hundreds of banks hold an outsized amount of CRE loans on their books relative to capital.” “Small banks (assets of $100 million to $1 billion) and midsize banks (assets of $1 billion to $10 billion) have CRE loan values far exceeding risk-based capital levels at 158% and 228%, respectively, according to The Conference Board calculations using FDIC Institutional Financial Reports data.” “This is compared to 142% for large banks (assets of $10 billion to $250 billion) and 56% for the largest banks (assets greater than $250 billion).” “The smallest banks (assets less than $100 million) issue few of such loans.” “However, only the largest banks are reporting increases in nonperforming loans and charge-offs (i.e., losses).” “… the biggest banks face greater regulatory scrutiny and are required to maintain larger capital cushions, prompting swifter realization and write-offs of souring loans.” “Smaller and midsize financial institutions — many of them regional and community banks — are evidently not marking down CRE loan losses …” 🍀 “The clock is ticking for banks delaying recognition of CRE loan losses, and the timing of the financial market fallout — potentially starting later this year — could be during a vulnerable period for the economy.” “It’s unlikely that the Fed, FDIC, and a consortium of the largest banks can rescue hundreds of compromised commercial banks at once.” “The largest and best-capitalized banks might be reluctant to acquire the assets of smaller financial institutions with sizable CRE losses, especially if there are few operational or geographic synergies, while regulators may choose not to step in.” “Pandemic-accelerated troubles in the CRE market may take more than a decade to resolve.” 🍀 But it’s the summer of hope.* Everything will probably be ok. (* h/t to John Gebhardt) 🍀🍀🍀

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Multifamily distress rates nearly doubled in April. 🚨 The multifamily sector faces rising distress rates, nearly doubling to 7.2% in April. Can the industry weather the storm? 🌧️ This trend highlights significant challenges, from refinancing difficulties to falling property values. At Coastline Equity, we’re committed to navigating these turbulent times, offering innovative solutions and unwavering support for our clients and communities. Let’s build a resilient future together. #RealEstate #MultifamilyHousing #EconomicTrends #CoastlineEquity Multifamily Distress Rate Nearly Doubles In April https://buff.ly/3wC3vGp

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Navigating Foreclosures: A Strategic Approach for Aspiring Property Moguls Elevate your investment portfolio by mastering the art of acquiring foreclosed apartments. Are you ready for the challenge? 🏢💡 #MultifamilyInvesting https://bit.ly/3UZnqWi

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Real Estate post NARS settlement with Keith Robinson, Chief Strategic Officer of NextHome, Inc.. We dive into the 2024 real estate market and explore the impact of the National Association of Realtors (NAR) settlement on home sales. Keith shares insights on market trends, challenges, and what the settlement means for buyers, sellers, and real estate professionals. Don't miss this in-depth discussion on what lies ahead for the housing market! https://lnkd.in/emrmVmhD

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Spec suites are gaining traction across U.S. markets like Charlotte, Miami, and Nashville. These spaces offer flexibility and minimal disruption for tenants who need quick operational setup without the lengthy buildout process. With rental premiums of up to 10%, property owners can capitalize on demand while giving tenants a streamlined solution. Explore the latest insights on how spec suites are reshaping the office market here: https://ow.ly/JBPB50TOxf4

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With the election behind us, speculation has already begun on how the Trump presidency might impact real estate. Surprisingly, even before Election Day, Santa Barbara and Montecito had already started seeing increased buyer interest and more homes going into escrow. Buyers now feel they have leverage after nearly five years of a seller’s market. Inventory is growing, and more properties are set to hit the market in the coming months, prompting motivated sellers to lower expectations by adjusting prices or accepting offers — typically above last year’s prices, but not always as high as anticipated. We’re closely monitoring the pace of sales relative to listing inventory. Although sales rates remain mostly flat, more price reductions are occurring. Even so, recent sales continue to close at higher prices than comparable transactions last year. Whether it’s the election, interest rates, or broader economic shifts, changing dynamics are clearly influencing both buyer behavior and seller expectations in Montecito. HERE'S WHAT WE ARE SEEING: Buyers still pay a premium for homes with: • Turn-key, tasteful remodels, exceptional charm, flexible floor plans or stunning views Slower interest in less-appealing homes: • Properties that need significant work are selling more slowly and for lower prices than expected • Buyers do not like uncertainty and the unknowns of construction costs, permitting, and bureaucratic delays hold buyers back Buyers are more comfortable negotiating: • With more choices available, buyers are increasingly confident in making lower offers and asking for seller concessions Seller’s expectations: • Sellers who are adapting and are getting ahead of the curve are being successful • Pricing, presentation and timing are the keys to being successful in today’s market Click the #linkinbio for the full market update. 📸 150 Coronada Circle | Montecito | $3,995,000 Nancy Kogevinas • Berkshire Hathaway HomeServices California Properties • DRE 01209514 • #montecito #santabarbara #montecitorealestate #montecitorealtor #santabarbararealtor #luxurylifestyle #luxuryliving #oceanview

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Blackstone's $295M Apartment Refinance Leads CMBS Surge The financing challenges for commercial real estate borrowers continue to grow, leading to the already increasing stress in the system to continue with even more delinquencies and defaults. S&P Global Ratings projects further declines in property valuations for 2024, particularly in the office sector, which is heavily impacted by hybrid work trends. Stay informed and navigate the complexities of the CMBS market with insights from industry leaders. How do you see the refinancing trends impacting the commercial real estate market? Share your thoughts below! #propertymanagement #realestate #financing Read the full article here...

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🚀Multifamily market watch! 🌆Not all cities are created equal, while places like Kansas City and New York are seeing rents soar, others are stuck in a rent rut. It’s all about picking the right spot in this dynamic landscape. Ready to invest in the hottest markets? 🔥 💡 🔥 📨 Message me if you would like to discuss markets that have great potential.  #industrynews #investing #ria #education #newyork #kansascity

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U.S. GDP Growth Slows Slightly to 2.8% in Third Quarter, Down From 3.0% https://lnkd.in/eGrCYeEp

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$5 Billion Minted in 5 Days: Tether’s Growing Influence and Industry Ripples Tether’s $5 billion #USDT minting spree over five days has crypto buzzing. With a market cap surge to $132 billion and 24-hour trading volumes peaking near $289 billion, Tether remains the bedrock of cryptocurrency liquidity. But is its influence too big to ignore or risky to sustain? 🔍 Key Highlights: 💠 Market Movements Tied to Tether The minting coincided with Bitcoin’s meteoric rise to $80,000, highlighting the correlation between USDT supply and market bullishness. 💠 Wall Street Connections Cantor Fitzgerald, Tether’s key banking partner, not only holds a 5% stake in Tether but is also led by Howard Lutnick, nominated as U.S. Commerce Secretary. His defense of Tether’s stability has stirred debates about potential political influences in crypto policy. 💠 Transparency and Trust Issues While Tether publishes periodic reports, critics argue these lack sufficient detail. Can industry leaders rely on Tether’s claims, or is greater transparency the only path forward? 🛠️ What’s Next for Tether? 1️⃣ Hyper-Productivity in 2025 Tether CEO Paolo Ardoino hints at ambitious plans for next year. Will this growth be accompanied by stronger reserve audits and transparency measures? 2️⃣ Regulatory Pressure Mounts With 75% dominance in the stablecoin market, Tether faces unprecedented scrutiny, particularly as U.S. policymakers push for stricter frameworks. 3️⃣ Market Sentiment Does Tether’s activity truly reflect crypto’s strength or does it risk creating artificial volatility? Tether’s role as a liquidity engine for crypto is undeniable, but with great power comes great responsibility. The industry’s divided opinions on whether Tether is a misunderstood giant or a looming risk make one thing clear: the call for better governance and transparency is louder than ever. 💭 What are your thoughts? Can Tether maintain its dominance under this scrutiny? Is greater transparency achievable without disrupting the market? #Tether #Crypto #Stablecoins #Bitcoin #Liquidity #Transparency #Web3 #CryptoRegulation

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Equity Residential 1Q24 Soundbites - 4/24/24 1. "We're slowing dispositions until we see better visibility into the acquisition side of the market. It did feel like 2-3 weeks ago we were getting there; buyers & sellers were finding common ground at 5 to 5.25. The hotter inflation report threw everything back to where we were a quarter ago." 2. “Two very different pictures: established coastal vs. expansion markets. Ex-Seattle and D.C. in our established markets, we see terrific demand met with little new supply, leading to solid rent growth.” 3. “Across our 4 expansion markets, robust demand is met with overwhelming supply, leading to declining rent levels, high concessions and occupancy pressure.” 4. “Expansion market pressure will accelerate in 2024, especially as the prime leasing season concludes and demand seasonally declines.” 5. "Boston: 97% occupied; very little competitive supply. Little to no concessions. Expect Boston to deliver some of the best full year revenue growth in the portfolio." 6. "NYC: performing well; strong demand and pricing power. 97%+ occupied; very little competitive supply. Moved past the rent fatigue in late 2023." 7. "DC: Outperforming on revenue even after a strong 2023. Solid defense employment driving stable high occupancy and retention. The District has begun lagging suburban assets, due to supply (anticipate pressure to build as year progresses)." 8. "LA: Good demand; not a lot of pricing power due to units coming back to market via eviction process. 96% occupied; eviction processing timeline now 6 months (vs. 9) which should help; but still nearly 2X as long as before." 9. "San Diego / Orange County: Very strong performers. Lack of housing keeps occupancy high. San Diego will see more supply in 2024, while Orange County similar to 2023, with limited pressure at a few Irvine locations." 10. "San Fran: Well occupied; would like to see continued improvements in pricing power. South Bay, East Bay, and Peninsula outperforming downtown; concessions prevelant downtown but issued at lower rates than 4Q23." 11. "Seattle: December strength carried into 2024, leading to improved occupancy and rental rates; supply in 2024 could temper growth. East Side outperforming City of Seattle; Redmond performing very well despite direct pressure from new lease-up." 12. "Concessions at stabilized assets in Atlanta, Dallas, and Denver are running at 30% of apps getting 4 to 6 weeks. In Austin, it's 60% at 6 weeks." 13. In 1Q24, turnover was the lowest ever. 61%+ of our residents renewed." 14. “Residents leaving to buy homes was 7.8%; continuation of all-time lows.” 15. “Well-located, newer properties in expansion markets are trading at high prices and very low volume vs. pre-pandemic levels." 16. “On track to deliver 6 JV developments in 2024; 3 in Dallas, 2 in Denver and 1 in suburban NY; at stabilized yields north of 6%.” #multifamily #housing #commercialrealestate #cre #realestate #capitalmarkets #proptech

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