When WeWork hands back the keys
Since WeWork declared its intention to restructure to avoid bankruptcy last month, much has been made of the sheer size of its office footprint, particularly in Manhattan, where it has the largest concentration of locations. But in terms of what comes next for private real estate investors with exposure to the co-working provider, and how worried they should be, the gravity of the situation can only be assessed from building to building. Indeed, PERE spoke with two landlords that both had leases terminated early by WeWork but experienced very different outcomes: one sued the company for damages before re-leasing all of the space within a year, while the other put the property on the market. A lease with WeWork is “a sword of Damocles,” and even landlords with “bulletproof” leases with the company should be worried, says another manager. Read our analysis for more on the predicament facing some office owners.

Bright lights, big city
It is more lights, camera and action for Blackstone and its content creation real estate partner, Hudson Pacific Properties. Last week, the two firms – along with New York-based real estate investment trust Vornado Realty Trust, the City of New York, and New York City Economic Development Corporation – announced the formation of Manhattan’s first public-private partnership to develop a purpose-built studio campus at Pier 94. Blackstone will own 24.5 percent of Sunset Pier 94 Studios through its institutional core-plus real estate strategy, while Hudson Pacific will own 25.6 percent. Vornado, which contributed its long-term leasehold for Pier 94 to the venture, will hold the remaining 49.9 percent.

Blackstone and Hudson Pacific are also partnering on the development of Sunset Waltham Cross Studios, a film, TV and digital production center in the UK, and Sunset Glenoaks Studios, a studio facility in California, among other projects.

Asia’s private debt opportunity
The commercial real estate private credit market in Asia-Pacific has expanded significantly over the past decade and is “geared for accelerated growth,” according to a research report published by CapitaLand Investment Management. Although commercial banks still account for 70 percent of the region’s commercial real estate loans, total private debt assets under management grew from less than $20 billion in 2010 to more than $80 billion in 2022, the report showed. This expansion is “anticipated to persist, underpinned by the region’s emphasis on real asset developments and the growing requirement for alternative capital sources,” wrote authors Yu Jin Ow, CLI head of research, and Tara Wong, research manager.

In particular, Australia is expected to experience a surge in private credit opportunities, with an A$50 billion ($31.86 billion; €29.65 billion) funding gap projected between 2023 and 2025, according to the report. As the country’s major banks reduce their exposure to the commercial real estate loan market, private credit providers are expected to increase their market share from 10 percent in 2022 to 15 percent in 2025, CLI noted.

Data snapshot