Will CRE Portfolio Deals Return in 2024?

GlobeSt.com spoke with Kidder Mathews real estate experts about finding bulk opportunities; investors must navigate a new capital markets chapter, rising loan maturities, and the uncertainty of an election year.

When a Fortune 500 company puts a massive apartment portfolio consisting of 11,000 communities on the market, people take notice and ask questions.

“Investors can draw conclusions from the Lennar portfolio sale that even the largest operators become adversely affected by the changes in the construction debt market and loans coming due,” says David Evans, Kidder Mathews senior associate in Los Angeles. The massive multifamily sale was described as a tactical, balancing of Lennar’s portfolio.

“With refinancing options requiring a significant amount of capital to be brought to the table, they preferred to take these properties to market versus reaching out to investors for capital for a cash refinance.”

Most of the Southern California Kidder Mathews executives GlobeSt. asked pointed to industrial as the property type more likely to trade when portfolio deal volume returns, followed by multifamily, self-storage, and retail. Industrial portfolios will continue to be sold direct to investment firms such as Prologis and Rexford, Evans notes. Rick Putnam, Kidder Mathews EVP in Orange County, has a different property type in mind though: “Primarily office, which is becoming more of a specialty niche due to ongoing capital requirements.”