2024's first bank failure.

Good morning, everyone.

• First Republic Bank’s failure didn’t impact CRE markets as much as investors worried, due to its relatively small size.

• Retail CMBS distress continues to improve with decreasing delinquency rates, not sitting at 5.56%.

• The BTR (Built-to-Rent) sector is booming, and Texas is sitting in first position with 15,600 units underway.

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Multifamily is finally getting more stable, with rents growing by 0.4% YoY and vacancy now sitting at 5.5% on average, up 10 basis points QoQ, according to CBRE.

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As new supply was underway, strong demand (positive absorption) emanating during Q1 is closing the gap, after 2021 being a negative absorption period.

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For the past four quarters (including Q1 2024), New York, Dallas, Austin and Houston are among the most balanced markets with supply almost matching demand.

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During Q1 2024, New York is the only large market boasting negative absorption with 1,400 units, despite delivering 38,000 over the past four quarters, representing 8% of the national total.

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Also, 760,000 units were under construction during Q1 2024, accounting for 4.2% of total existing inventory in the markets tracked by CBRE.

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If you want to know more about what’s happening in the shopping center asset class, the full report by CBRE is available by clicking on the button below.