❄️ The Growth of Cold Storage Warehouses

Good morning,

The growth of cold storage warehouses; Wyndham rejects $7.8B takeover bid from Choice Hotels; and return to office picks up steam. Let’s delve into today’s topics.

📈 Market Update

❄️ The Growth of Cold Storage Warehouses

Related and other major CRE firms are betting big on the growth of cold storage warehouses to meet the changing demands of grocery supply chains. Related is launching a new $1 billion cold storage business called RealCold to build large, temperature-controlled facilities across the U.S. The rise of online grocery shopping and shifting consumer tastes toward more niche, locally-sourced brands is expected to drive demand for more cold storage capacity. Despite high upfront development costs, investors see strong long-term potential in cold storage as a specialized niche, with the sector so far weathering pandemic disruptions better than other real estate sectors.

Orlando Industrial Market Stays Hot:
The Orlando industrial market continues to lead the nation in rent growth, ranking #1 for year-over-year increases in the third quarter of 2023. Strong leasing activity across all sizes, especially the 20K-50K SF range, has kept vacancy low despite abundant new supply. Rent growth is projected to remain among the highest in the country over the next four years, with smaller spaces seeing the fastest rises. Orlando's standout performance underscores the ongoing strength of Florida's industrial markets.

🛎️ Wyndham Rejects $7.8B Takeover Bid from Choice Hotels

Wyndham Hotels & Resorts has rejected an unsolicited $7.8 billion takeover bid from rival Choice Hotels International. Wyndham cited concerns over the stock component of the offer, regulatory risks, and the potential for franchisee churn and high leverage. The attempted deal highlights consolidation pressures in the hospitality sector, but Wyndham feels Choice's proposal undervalues its growth potential and poses too many risks. With antitrust scrutiny high, major hotel chains are finding it difficult to merge.

🏢 Return to Office Picks Up Steam

The share of US households with someone working remotely has fallen sharply from pandemic highs as employers push for office returns. But the trend remains uneven, with remote work still prevalent in major metro areas and some states while fading fast in others. Factors like job type, politics, and migration patterns contribute to varied declines. Still, workers' demand for flexibility exceeds remote job postings. The data indicates a complex patchwork of return-to-office progress, with no single driver behind falling remote work rates across the country.

✍️ Further Reading

• Foreclosed Houston Office Building Draws No Bidders Besides Lender (RD)

• CrowdStreet, Nightingale Settlement Reveals New Details (RD)

• 'Enormous' Amount of Capital on Sidelines Means Now Is Time to Buy Multifamily (GS)

• US Homebuilder Sentiment Declines to Lowest Level in Nine Months (BBG)

• Home Insurance Is So High in This Florida Town, Residents Are Leaving (WSJ)

• Real Estate Brokers Pocketing Up to 6% in Fees Draw Antitrust Scrutiny (BBG)

📊 Chart of The Day