Are you a 30-something professional looking to settle down and buy your first home in a friendly, welcoming European city?
Think again.
Rising real estate prices have turned home ownership into an increasingly unachievable dream for many Europeans — an issue compounded by the cost-of-living crisis, which has hit city residents and poorer households especially hard.
“The increase in housing prices is tremendous, and it’s even more severe in cities, especially large cities,” said Lamia Kamal-Chaoui, director of the OECD’s Centre for Entrepreneurship, SMEs, Regions and Cities. “And it’s no longer just impacting the poor, but also the middle class.”
House prices and rents have increase steadily since 2014, even during the COVID-19 pandemic, when — unlike previous economic downturns — the demand for housing surged, as extended lockdowns and the rise in teleworking kept people confined to their homes.
Right as the economy began to recover in 2022, Russia’s invasion of Ukraine brought a fresh array of budget headaches for governments — and a major cost-of-living crisis for households. Not only is housing more expensive, but it’s also increasingly harder to afford quality housing; many Europeans last winter faced mortgage and rent arrears or struggled to keep their houses warm.
According to Eurofound, younger residents are being hit hardest by the real estate crisis. Young Europeans live with their parents longer, are likelier to rent rather than own, and are often discouraged from seeking better jobs in areas with more opportunities because they can’t afford to live there.
This is a “major concern” for cities that “need young people to remain competitive,” said the OECD’s Kamal-Chaoui, who noted that “if [they] are not able to afford an apartment, they will never move to a city, no matter how attractive it is,” she said.
Real estate bubbles are so early 2000s
Despite concerns that rising housing prices might signal a real estate bubble, early signs indicate we are safe (for now).
In response to the cost-of-living crisis, central banks worldwide have hiked interest rates — a move that reversed a decade-long trend of housing price hikes in 2022, according to Swiss bank UBS. Its 2023 edition of the Global Real Estate Bubble Index identified only two of the 25 cities monitored — Zurich and Tokyo — as at risk of a bubble.
This might be a glimmer of hope for the housing market at large, but it’s bad news for prospective homeowners, as interest rate hikes mean steeper mortgages.
What’s more, one of the core issues that makes housing unaffordable — the shortage of suitable dwellings — is still unresolved and might have been exacerbated by the cost-of-living crisis.
“The demand for housing is increasing, but supply does not keep up,” said the OECD’s Kamal-Chaoui.
Responding to the housing shortage by erecting new buildings is difficult, mostly due to regulatory and space constraints that are particularly acute in larger cities, according to the OECD.
Building new homes has also become substantially more expensive in the past decade, particularly since the start of the pandemic. The industry bounced back in 2021, but last year saw another decline in the number of residential buildings approved for construction, even if the numbers are still significantly higher than pre-pandemic levels.
Some cities have tried to address the shortage by turning commercial and office buildings that emptied out during the pandemic into social housing, but that approach isn’t widely available as “not all cities have public social housing — many do not even own any housing stock,” said Kamal-Chaoui.
Municipalities are also struggling to come up with a housing policy that responds to residents’ changing needs, according to Kamal-Chaoui.
She noted that “the quality of life in large cities has declined, and people realize they want to have a nice life” in less hectic neighborhoods located in the suburbs or in medium-sized cities, which have begun experiencing a housing squeeze.
“Things are evolving so fast — what used to work maybe doesn’t anymore” and cities need to reconcile their ambitions with the budgetary constraints brought in by the cost-of-living crisis, according to Kamal-Chaoui, who added that mayors, regardless of their political leanings, are now treating the housing shortage as a priority.
“Some cities have been completely disengaged until recently, but now they are starting to act — they don’t really have a choice,” she said.
Published: Dec. 5, 2023 at 5:24 p.m. ET
Shares of Federal Realty Investment Trust FRT sank 0.13% to $99.77 Tuesday, on what proved to be an all-around rough trading session for the stock market, with the S&P 500 Index SPX falling 0.06% to 4,567.18 and Dow Jones Industrial Average DJIA falling 0.22% to 36,124.56.
The stock’s fall snapped an eight-day winning streak.
Federal Realty…
Shares of Federal Realty Investment Trust
FRT
sank 0.13% to $99.77 Tuesday, on what proved to be an all-around rough trading session for the stock market, with the S&P 500 Index
SPX
falling 0.06% to 4,567.18 and Dow Jones Industrial Average
DJIA
falling 0.22% to 36,124.56.
The stock’s fall snapped an eight-day winning streak.
Federal Realty Investment Trust closed $15.31 short of its 52-week high ($115.08), which the company achieved on February 2nd.
The stock demonstrated a mixed performance when compared to some of its competitors Tuesday, as Realty Income Corp.
O
fell 1.10% to $54.92, Kimco Realty Corp.
KIM
fell 0.05% to $20.54, and Regency Centers Corp.
REG
fell 0.89% to $64.55.
Trading volume (836,671) eclipsed its 50-day average volume of 669,268.
Editor’s Note: This story was auto-generated by Automated Insights, an automation technology provider, using data from Dow Jones and FactSet. See our market data terms of use.
During that time we’ve seen about 20 homes, and put in two offers that didn’t work out for various reasons.
We’ve been approached by someone who is going to sell their home, but is not on the market yet. They want to sell to us directly as a home for sale by the owner. We are OK with that.
However, we are also looking for advice on how to fairly compensate our real-estate agent for the work they have done so far.
What’s the best option for us? Is it wrong to ghost my real-estate agent?
Fortunate
Dear Fortunate,
The clue is in the question. Ghosting does not treat others with respect, and does not give them the explanation they deserve. Tell them the truth. Explain your situation, and have an open and honest conversation. You will feel better for doing so.
It’s great that you found a home, and one that is directly sold to you by the owner. That will save you thousands of dollars in commissions and fees that you don’t need to pay real-estate agents, so that’s a big win.
Typically, when a home is sold, the listing agent and the buying agent each get a 3% commission, both of which are paid for by the seller. The stage is set for the buyer’s agent to no longer automatically receive a 3% commission.
Last month, a Missouri court found the National Association of Realtors and two real-estate brokerages guilty of conspiring to inflate real-estate commissions, a decision that will likely have a deep impact on the U.S. housing market.
Negotiate a fee
Just because you found a house by yourself doesn’t mean you should ghost your real-estate agent. They scoured through listings for you, took you to 20 open houses, and even helped you put in two offers. For that work, you should think of how you would want to compensate them. And you seem to agree.
Have you signed anything that would require you pay them a commission if you find a house? Typically, sellers sign such contracts for a period of around six months.
Obviously, if the seller was using a real-estate agent, it would make no difference: The seller’s real-estate agent would simply have to split their 6% commission with your agent.
Assuming that the seller does not have a real-estate agent, you could negotiate a fee for the services provided by your real-estate agent thus far. Have a number in mind — say 2%, slightly less than the fee they would have gotten — and see if you and your real-estate agent are comfortable with it.
Enlist your real-estate agent’s help
But here’s another route that could be a win-win for the both of you: Consider keeping them until the transaction is finalized, and make that 2% contingent on them providing those services.
After all, real-estate agents do more than just setting up open houses and showing you the property. They can help you with paperwork, purchase agreements, contacts, schedule inspections and appraisals; help you find multiple lenders; and help get you a good mortgage rate. Plus, they may be able to spot any potential red flags that you would’ve overlooked.
“I would recommend formally utilizing their [agent] in the transaction, with a negotiated fee paid by the buyer at closing,” Erin Sykes, chief economist and real-estate wealth adviser and broker at Nest Seekers International, told MarketWatch.
“This gives the buyer protection as the Realtor will have their best interest in mind, doing due diligence, and they gain the benefit of full representation,” she added.
Putting a value on time
The leverage you have is goodwill: They are getting something for their time, but they also have no other option. Many other people would simply ghost their real-estate agent, buy the house and run.
Ultimately, if you decide that you don’t want to pay your real-estate agent for not playing a role in closing on your new home, then that’s your prerogative. You can choose to not pay them a dime.
But remember this: How would you like that if the tables were reversed? Is their time not as valuable as yours? And is this the kind of karma you want buying your new home?
This week’s Big Move question was spotted on Reddit.
By emailing your questions, you agree to having them published anonymously on MarketWatch. By submitting your story to Dow Jones & Company, the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
‘The Big Move’ is a MarketWatch column looking at the ins and outs of real estate, from navigating the search for a new home to applying for a mortgage.
Do you have a question about buying or selling a home? Do you want to know where your next move should be? Email Aarthi Swaminathan at TheBigMove@marketwatch.com.
The Austrian property group that co-owns New York’s iconic Chrysler building has warned of an imminent “restructuring” that has cast a spotlight on several precarious projects — and the wealthy tycoon behind the company.
Rene Benko, one of Austria’s richest people, with a net worth of $6 billion according to Forbes, has grown his Signa group into a real estate giant since founding it in 2000.
But as the sector is hit by higher borrowing costs and surging material prices, a growing number of developers are filing for bankruptcy.
Several Signa projects, including the construction of a landmark high-rise in Germany, have ground to a halt, making investors jittery about their money.
Confirming its troubles, Signa announced last week that Benko was stepping down from its advisory board as the group prepares a “plan for essential restructuring steps” by the end of November.
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“Signa symbolises the real estate boom of recent years, in which cheap money was readily distributed for every project, no matter how daring,” the Austrian daily Die Presse wrote in an editorial this month.
“A perfect environment for Benko, who took out dizzying amounts of loans without shame. Sustainability didn’t play a role,” it said.
Born in 1977 to a middle-class family in Innsbruck, Benko worked with a friend restoring attics as a teenager before dropping out of school and founding Signa.
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Among its first purchases was a department store in Innsbruck, which Benko transformed into a modern shopping centre.
Since then, Benko has added the Chrysler building and the Berlin shopping gallery KaDeWe to the company’s portfolio, while branching out into media and other sectors.
At one point, the company reportedly tried to attract investors with slogans like “It was never so boring to get rich”.
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“When you have success, you become interesting. And if you give the impression that you have remained a man of your words, you build trust and expand your circle of friends,” Benko told Die Presse in 2008.
With offices in Austria, Germany, Italy, Luxembourg and Switzerland, Signa has holdings worth 27 billion euros ($29 billion) and projects worth 25 billion euros in development, according to its website.
But Signa looks to be in trouble.
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Thailand’s Central Group said this month that it had taken control of the historic British department store Selfridges, which Signa used to own.
And Signa-led work on the prestigious Elbtower in the heart of Hamburg — expected to be one of Germany’s tallest buildings — was halted at the end of last month.
Karen Pein, the Hamburg senator in charge of urban development, has threatened to demolish the half-built tower if the group is not able to continue work on schedule.
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The future of another Signa project, the renovation of the Alte Akademie in Munich, a former Jesuit college to be transformed into an office and residential complex, is also uncertain.
Fitch, the credit rating agency, has already downgraded the Signa Development subsidiary after it said it was “facing challenges including with respect to its liquidity position”.
And the online e-commerce unit Signa Sports United has initiated insolvency proceedings for several of its entities and has decided to drop its stock listing on the New York Stock Exchange to reduce costs.
Signa did not respond to AFP requests for comment.
Signa’s undertakings have drawn criticism in the past.
The leading German department store chain Galeria Karstadt Kaufhof, which Signa purchased in 2019, filed for bankruptcy in 2020 amid the coronavirus pandemic, and the chain decided to close 52 stores at the start of the year.
In 2020, Benko testified before an Austrian parliamentary committee probing wide-ranging corruption allegations after the so-called Ibizagate scandal shook the country’s politics.
He was asked about his links to several high-ranking conservative and far-right political figures, though Benko has not been charged in connection with the case.
The scandal erupted in 2019 when a video showed Austria’s former far-right leader offering public contracts to a woman posing as a Russian oligarch’s niece in exchange for campaign help.
In a separate matter, Benko received in 2012 a 12-month suspended jail sentence over an Italian tax case, after a court found him guilty of bribing Croatia’s former prime minister Ivo Sanader with 150,000 euros to intervene with the Italian tax authorities.
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In February 2021 — a year after the Covid-19 pandemic started — UK executives at law firm Baker McKenzie decided it was time for a change.
Covid had shaken up the way its staff worked and less space was needed. It had been at its City headquarters on 100 New Bridge Street for 31 years, but the lease was nearly up.
So Baker McKenzie decided to move to a building called Duo that markets itself as a workspace with “well-being in its soul” .
The law firm has now leased 130,000 square feet of Duo at 280 Bishopsgate, a stone’s throw from Spitalfields Market. The new office is sprawled across seven floors including a roof terrace and is intended to be a “collaborative” space focused on improving its staff’s work-life balance.
READ Is working from home dead for dealmakers? ‘The debate has moved on’
There are no fixed seating charts and nobody has individual offices — not even the firm’s senior partners. Instead, each team has a ‘neighbourhood’: an area in the building where colleagues can work together.
“You would be really hard placed not to find somewhere within the building that suits your individual style,” Jannan Crozier, Baker McKenzie’s global M&A chair, told Financial News.
Before the pandemic, firms including Schroders, Fidelity International and M&G splashed out on glitzy new headquarters built from scratch, prioritising open plan for a more collaborative working style. Then the early days of the pandemic brought a brave new world of work that financial services executives widely celebrated. Post-pandemic, however, many criticised the limitations of working from home, replacing praise with a push back to the office.
Shaking things up
But although working practices are returning to pre-Covid norms, banks, asset managers and law firms in the Square Mile are shaking up their office spaces. Firms and their landlords are increasingly ‘retrofitting’ their historic homes in the City to entice employees back to the office as well as ensure they bolster their green credentials as they face increasing scrutiny.
Even those building their own headquarters are rethinking their office space now. Deutsche Bank reworked its plans for its new City office at 21 Moorfields during the pandemic to include outside space at every level and a ‘wellness’ floor where employees can meditate, exercise and undertake mindfulness, executives told FN previously. There’s also now an “assumed hot-desking model”.
Citigroup’s planned revamp of its 42-storey Canary Wharf headquarters at 25 Canada Square will also help it hit environmental targets as well as cater to its hybrid-working model.
On 23 October, Baker McKenzie’s 1,000 London employees officially moved into its new building. They have a variety of workspaces to choose from, including desks surrounded by foliage and individual ‘pods’. But the firm has focused on environmental concerns at Duo, too. A floating staircase cuts through the middle of the building to encourage staff to stop using lifts to get from one floor to the next. The main linoleum flooring is also made from recycled cacao shells: “We’re walking on chocolate, everybody,” has become a common refrain.
Deloitte reported that this summer brought the highest volume of office refurbishments on record, with 4.4 million square feet of new construction across 50 projects — although Citigroup’s 900,000 square foot refurb accounted for a fifth of the total.
A convenient arrangement
Shaun Dawson, head of insights at property consultancy DeVono, said the green refurbishment trend is a convenient arrangement for the City’s landlords and their tenants. The former have struggled with excess second-hand space in office towers, while the latter have been looking to cut costs and downsize their floor space in the era of hybrid working.
“The benefit is that the landlord gets the building. And the occupier gets the space fitted out and retrofitted to a greater level at a more reasonable cost,” Dawson added. “Not cheap, but at a more reasonable cost than it would be going into a brand new building.”
Green refurbishment is also one of the ways firms are signalling to prospective hires and clients they care about ESG. Retrofitting a building is significantly less carbon intensive than designing a new building from the ground up.
T Rowe Price saved an estimated 20,789 tonnes of carbon dioxide by upgrading a building at Warwick Court near St Paul’s Cathedral, according to a spokesperson. The development project, which completed earlier this year, used natural, low-carbon materials such as timber and extensive recycled materials.
This includes steelwork equivalent to half the weight of the Eiffel Tower, enough concrete to fill 230 shipping containers and enough reused carpet tiles to cover 25 tennis courts.
READ Royal London nabs new HQ in the City
Its new headquarters is also more energy efficient. It has an LED lighting system, the air conditioning uses 25% less energy than it did before and there’s a full‑building standby generator.
Robert Higginbotham, head of global distribution at T Rowe Price, said the Warwick Court office “drives our continued focus on sustainability in a more modern and environmentally efficient building”.
Sustainable recruitment
Top City firms are also waking up to the fact that workers are placing greater emphasis on their employers’ sustainability credentials, with a KPMG survey noting a recent rise in “climate quitting”. The survey also found that one in five adults in the UK would reject a job offer if the company does not align with their ESG values; that number is even higher for Gen Z at one in three.
Chris Turley, a partner in Taylor Wessing’s real‑estate team, told FN the company’s decision to revamp its existing headquarters at 5 New Street Square new Chancery Lane was driven by feedback from both employees and clients.
The project is already under way, with the firm’s 766-strong London workforce vacating the premises on 2 November. The update is expected to take 18 months to complete.
“It would have been far easier for us just to move to a shiny new building and not have any disruption… but our people want it,” he said. “Our clients want it because they’re also measuring indirect impact and want to have suppliers who are very cognisant of the impact on ESG.”
Turley added that Taylor Wessing also made the decision in order to “attract the best talent”.
Some City firms claim that going green is helping them stay above the fray of the return-to-office battle between bosses and staff. Firms including Goldman Sachs, JPMorgan and BlackRock have been ordering employees to be in four or five days a week. But many staff have been resisting this push by either ignoring the mandates or quitting for more flexible jobs.
Baker McKenzie has maintained its pandemic hybrid-working policy. But Crozier said staff are flocking to the office more than they ever have, following the refurbishment. “We have not needed to be hard-handed with a [hybrid-working] policy. There are so many people that are coming in four days a week now — some even five days a week — because they’re finding use of the space.”
Dawson said “the knee-jerk reaction” of firms cutting floorspace during the hybrid-working boom is declining.
“There is a realisation that there are more and more people coming back into the office and coming back at the same time. Therefore the pressure on the office is very much the same as what it was pre-pandemic,” said Dawson, who added that the way offices are designed and maximise space “is the way forward”. “The real estate has to really work for its money now. You’ve got to spend the money to create a space that will be productive.”
To contact the author of this story with feedback or news, email Kristen McGachey
Senior housing is experiencing a moment, and not a typically senior one.
Low inventory and skyrocketing rents are great for property owners, but stalled construction starts and a lack of financing have complicated the underlying fundamentals for an asset class that is growing in importance as America’s senior population rapidly ages. In short, senior housing needs help to meet this moment.
These are the conclusions from a new investor trends report by Cushman & Wakefield (CWK), which surveyed more than 90 industry leaders and compiled 3,000 property valuations on the state of senior housing.
“The senior housing sector, in general, is at a very interesting and somewhat unique stage in this whole cycle that commercial real estate is going through,” said Zach Bowyer, senior managing director at Cushman & Wakefield, and one of the authors of the report. “It’s probably one of the strongest performers from a property management standpoint: occupied units are at an all-time high; rent growth, while slipping compared to multifamily, still continues to strengthen in most markets … but construction financing is impossible, and new starts are at an all-time low.”
Stabilized occupancy for senior housing has trended upward for 10 consecutive quarters, reaching 86 percent in the second quarter of 2023, while annual rent growth reached 5.9 percent in the second quarter of the year, according to Cushman & Wakefield.
Much of the surging rent growth has been driven by supply constraints. Absorption — measured in sales or leasing levels — has outpaced inventory increases for nine straight quarters as the number of senior housing units occupied across the U.S. hit an all-time high in the third quarter of 2023. Construction starts in the sector have hit their lowest point since the 2008 Global Financial Crisis (GFC).
“We’ve been talking about this aging population, this Baby Boomer demographic, it’s literally at the doorstop of these communities, but construction has stopped,” explained Bowyer. “The property market fundamentals will strengthen beyond what the market realizes — we’re probably approaching equilibrium from a supply and demand standpoint, but demand will skyrocket.”
Cushman & Wakefield estimates that to meet the demographic demand required by Baby Boomers in need of senior living and hospice care, supply must rise to 35,000 new units per year, beginning today. Current five-year trailing supply trends indicate deliveries of only 26,000 units per year, and a supply shortage is expected to occur no later than 2027, according to Cushman & Wakefield.
But building more senior housing units is only one piece of the puzzle. The U.S. needs to build enough units so most of the U.S. population can afford the cost of long-term senior living care.
The number of middle-income seniors is expected to double by 2039, and more than half of this segment will lack the finances to pay for extended senior living, according to Cushman & Wakefield.
“Very simple math would suggest that half of the middle-income population is not going to be able to afford basic assisted-living needs to live in these properties,” said Bowyer.
“The lack of liquidity, the lack of construction financing, has magnified the middle-income portion of our population who can’t afford it,” he continued. “You’ll see rents go up and occupancy remain at 95 percent-plus, so there are people who can afford it at that level, but we’ll still be neglecting others.”
On the capital markets front, senior housing investment sales fell to $3.2 billion in the first six months of 2023 — a drop of 51 percent compared to the first six months of 2022 — according to Cushman & Wakefield. The second-quarter transaction volume of $400 million for senior housing marked the lowest single-quarter volume level since the GFC. Much of this can be attributed to rising interest rates and the broad liquidity pullback being experienced across all lending sectors that’s characterized much of the dislocation in 2023.
Moreover, at $111,000, the average price per unit of a senior housing unit is down nearly 54 percent from peak valuation of the first quarter 2022 — making it unlikely that owners will achieve a desired exit price anytime soon and thereby freezing transaction volumes in place.
“Capital markets are still extremely dislocated, but there are $18 billion in senior housing loan maturities maturing in the next 24 months, and we think that it’s really going to force a lot of hands right now,” said Bowyer. “Sellers aren’t selling unless they have to, buyers won’t pay that price — but with loans maturing, it will basically force people to make tough decisions.”
Brian Pascus can be reached at bpascus@commercialobserver.com
Industry veteran is “an extraordinary talent,” exec says
Property-casualty broker NFP has announced the appointment of Tyler James (pictured above) as North American construction property broking leader.
In his new role, James will be responsible for NFP’s construction property lines, including builders’ risk, contractors’ equipment and fixed property coverages. He will report to Adrian Pellen, co-leader of the company’s construction and infrastructure group.
“Tyler is an extraordinary talent, and I am absolutely thrilled that he is joining our construction and infrastructure team,” Pellen said. “Placing builders’ risk insurance across the US and Canada has become increasingly complex due to unprecedented catastrophe events like wildfires, floods and convective storms. Our investment in talented leaders like Tyler, together with our cutting-edge risk control-driven brokerage approach, puts us at the forefront to deliver what clients need.”
“This is an exciting opportunity with a company that’s working to become the preeminent risk control-driven insurance advisor and broker in the construction and infrastructure field,” James said. “I look forward to utlilizing my experience and collaborating with my NFP colleagues to create and deliver innovative P&C solutions and exceptional service to our construction and infrastructure clients.”
NFP also recently announced the appointment of Meg McSherry to lead its P&C business in the Atlantic region. Last month, the broker announced the acquisition of Florida-based Benefits & Company.
Have something to say about this story? Let us know in the comments below.
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Published: Nov. 8, 2023 at 3:16 a.m. ET
By Ian Walker
UK Commercial Property REIT said it is in all-share merger talks with Picton Property Income, while cautioning that there is no certainty a deal will be agreed.
The real-estate investment trust said Wednesday that Picton has until Dec. 6 to either make an offer for the company or walk away under U.K. Takeover Panel rules.
…
By Ian Walker
UK Commercial Property REIT said it is in all-share merger talks with Picton Property Income, while cautioning that there is no certainty a deal will be agreed.
The real-estate investment trust said Wednesday that Picton has until Dec. 6 to either make an offer for the company or walk away under U.K. Takeover Panel rules.
No further information on the talks has been disclosed. Any merged company will be worth around 1.1 billion pounds ($1.35 billion) based on the companies closing share prices on Tuesday.
Separately, Picton confirmed that it was in talks with UK Commercial Property over a merger and said that any combined company would be internally managed.
UK Commercial Property shares at 0810 GMT were down 0.40 pence, or 0.7%, at 55.60 pence; Picton shares were up 1.50 pence, or 2.3%, at 68.0 pence.
Write to Ian Walker at ian.walker@wsj.com
Published: Nov. 2, 2023 at 8:02 a.m. ET
By Rob Curran
Jones Lang LaSalle’s third-quarter net income and revenue fell as a commercial-real-estate slump continued.
The Chicago commercial real-estate developer posted earnings for the quarter ended in September of $59.7 million, or $1.23 a share, down from $140.2 million, or $2.88 a share, a year earlier. Excluding certain items, Jones…
By Rob Curran
Jones Lang LaSalle’s third-quarter net income and revenue fell as a commercial-real-estate slump continued.
The Chicago commercial real-estate developer posted earnings for the quarter ended in September of $59.7 million, or $1.23 a share, down from $140.2 million, or $2.88 a share, a year earlier. Excluding certain items, Jones Lang LaSalle posted adjusted earnings of $2.01 a share, matching the average Wall Street target, as tabulated by FactSet.
Third-quarter revenue fell by 1% to $5.11 billion, compared to the mean analyst estimate of $5.04 billion, as tallied by FactSet.
Commercial real estate developers have struggled in recent quarters because of a toxic combination of stubborn work-from-home trends and rising mortgage rates.
“The industry-wide slowdown in investment sales and leasing transactions continued,” during the third quarter, said Chief Executive Christian Ulbrich, in a statement.
Write to Rob Curran at rob.curran@wsj.com
Home prices in the 20 biggest U.S. metros rose for the sixth month in a row, as the housing market continues to deal with a shortage of homes for sale.
The S&P CoreLogic Case-Shiller 20-city house price index rose 1% in August, as compared with the previous month.
On a year-over-year basis, home prices in the 20 major metro markets in the U.S. were up 2.2% nationally.
A broader measure of home prices, the national index, rose on a month-over-month basis in August by 0.9%, but rose 2.6% over the past year. All numbers are seasonally adjusted.
Key details: Chicago posted the strongest year-over-year home-price gains in the month of August, at 5%. It was the fourth month in a row that the city led the rankings.
New York and Detroit followed, up 4.98% and 4.8% respectively.
The West continued to lag behind the rest of the country: Home prices fell in Las Vegas and Phoenix the most.
| Cities | Change from last year |
| Atlanta | 3.4% |
| Boston | 3.1% |
| Charlotte | 3% |
| Chicago | 5% |
| Cleveland | 3.9% |
| Dallas | -1.7% |
| Denver | -0.6% |
| Detroit | 4.8% |
| Las Vegas | -4.9% |
| Los Angeles | 3.2% |
| Miami | 3.3% |
| Minneapolis | 1.9% |
| New York | 5% |
| Phoenix | -3.9% |
| Portland | -1.5% |
| San Diego | 4.1% |
| San Francisco | -2.5% |
| Seattle | -1.5% |
| Tampa | 0% |
| Washington | 3.4% |
| Composite-20 | 2.2% |
A separate report from the Federal Housing Finance Agency also showed home prices rose in August, up 0.6% from July.
And over the last year, the FHFA index was up 5.6%.
Home prices were the strongest in the Middle Atlantic region, according to the government’s data.
Big picture: With homeowners not keen on selling their homes, the U.S. housing market will continue to face a shortage of homes for sale, and by extension, see home prices rise. Interested buyers continue to converge on limited inventory.
Until supply catches up, barring any major events, we’re not likely to see a big movement in home prices.
What S&P said: “On a year-to-date basis, the National Composite has risen 5.8%, which is well above the median full calendar year increase in more than 35 years of data,” said Craig J. Lazzara, managing director at S&P DJI.
“The year’s increase in mortgage rates has surely suppressed housing demand, but after years of very low rates, it seems to have suppressed supply even more,” he added.
“Unless higher rates or other events lead to general economic weakness, the breadth and strength of this month’s report are consistent with an optimistic view of future results,” Lazzara said.
What are they saying? “Another large gain in house prices in August suggests that the extremely limited supply of existing homes for sale continued to outweigh high mortgage rates,” Thomas Ryan, property economist at Capital Economics, wrote in a note.
“We think monthly gains in house prices will soften over the remainder of the year in response to the rise in mortgage rates to just under 8.0%. But an extreme lack of inventory in the existing homes market means we don’t anticipate any further house price falls,” he added.
Market reaction: Stocks
DJIA
SPX
were up in early trading on Tuesday. The yield on the 10-year Treasury note
BX:TMUBMUSD10Y
fell below 4.9%.