A report from the Puget Sound Business Journal in Washington. "As the Graystone condominium tower on Seattle's First Hill nears completion, fewer than 10% of the 271 homes have been sold, prompting developer Daniels Real Estate to cut prices and offer buyer incentives. On Tuesday, the Seattle-based company said it's 'taking the lead in the condominium comeback' with the price reduction. A two-bedroom, two-bath condo in the upper third of the 31-story building that was originally listed for just over $1.35 million is now being offered for over $1.185 million. The price for a one-bedroom unit three floors down has been reduced 27% to $465,900. 'Every developer is going to take a loss, so it’s a matter of getting under the market, building momentum, rewarding those who buy today,' said Luis Borrero, vice president of brand at Daniels Real Estate."

"The condo market, like the housing market overall, is sluggish, with April's median sales price downtown off 11.5% year over year, according to the Northwest Multiple Listing Service. Only 40 sales closed last month, 15 fewer than April 2022. The situation is not unique to Seattle. The median sales price in downtown Bellevue last month fell 17% year over year, to $795,000. The Graystone marketing team is promoting the homes at the tower at 800 Columbia St. as the last of their kind for the foreseeable future. A half-dozen in-city condo projects in the pipeline have either been paused or converted to for-rent product. With the price cuts, prices are a third below the replacement value, according to the development team. The homes, including parking, are being delivered at around $1,030 per square foot overall. A similar new build would require at least $500 per square foot more, or about $1,530, to pencil again."

The Colorado Springs Business Journal. "More than 1,600 new apartments became available in Colorado Springs during the first quarter of 2023. That’s a record. Vacancy is up and likely to continue climbing as more and more new apartments buildings come out of the ground. 'That’s almost 12,000 units that have broken ground,' says Scott Rathbun, president of Apartment Appraisers & Consultants. For scale, that will add roughly 20 percent to existing inventory of an estimated total 55,000 apartments built over the last 120 years in Colorado Springs, Rathbun says. 'Colorado Springs is a relatively small market,' he says. 'When you’re adding thousands of units at a time, it can be overbuilt rather quickly.'"

"In the first quarter of this year, when Colorado Springs added 1,600 newly constructed apartments to the city’s inventory, the quarterly absorption rate was four. Essentially, demand grew by four units and supply grew by 1,600 in the quarter. If the 8,100 proposed projects were to go forward along with the 11,900 already under construction, that would add 20,000 units to an existing inventory of roughly 55,000 units. That would be a 40 percent increase in apartment inventory over the next two to four years."

"For perspective, if the almost 12,000 units currently under construction were to be delivered evenly over the next three years, that would be 4,000 new units per year. The most the city has absorbed in a year is roughly 2,000. So, there will be at least double the number of new units the market is likely able to fill even without the additional 8,100 proposed units. 'You’re definitely overbuilding,' Rathbun says."

The Real Deal. "Texas has been here before. In the late 1980s, a bygone Dallas bank called First Republic spiraled into a crisis, its books saddled with non-performing commercial real estate loans. In July 1988, First Republic failed and merged with a lender called NCNB Texas National. But in Texas commercial real estate, the bank didn’t do much lending. 'NCNB, the acronym was ‘No Cash For Nobody,' said Kevin Santaularia, CEO of Dallas-based Bradford Companies. Santaularia learned from the first First Republic collapse — now, as a second plays out on the national stage, lenders are again building their reserves, and commercial real estate is a no-no in credit committees. 'Now it’s a national problem, versus a Texas problem,' Santaularia said."

"While the wall hasn’t collapsed in Texas yet, some cracks are starting to show. In April, Arbor Realty Trust foreclosed on a $229 million multifamily portfolio in Houston. A few companies, Santaularia’s included, have raised nine-figure funds to target distressed commercial real estate in Texas. As loans come due, particularly for certain multifamily properties and office buildings, the vultures are starting to circle. Every day their pack grows."

"In March, Nitya Capital sold almost 500 apartments in San Antonio to Nord Group, in a deal that the broker said was the result of 'a number of challenges,' stemming from rising rates and tighter lending. The properties, largely built in the 1980s, represent the type of value-add multifamily property that has caught some investors with their pants down. Zachary Meyer, director of Texas multifamily sales for Rosewood Realty Group, said Nitya could soon have company. 'Ballpark, in the next three-to-six months, we’re really going to see an uptick in distress: distressed properties and distressed sellers as people’s loans mature and they can’t refi,' Taylor said."

Globest on California. "The largest apartment landlord in San Francisco, Veritas Investments, is facing the loss of more than a third of its multifamily portfolio in the city as its lenders seek to offload $1B in loans that are in default. Eastdil Secured is marketing the unpaid mortgage loans, which are backed by 95 apartment buildings in San Francisco encompassing 2,452 units and 45 ground-floor commercial storefronts, the San Francisco Business Times reported."

From NPR. "An unraveling of the office sector spells trouble not only for banks that are owed an estimated $1.2 trillion in outstanding office loan debt, but also for countless small businesses that depend on white-collar customers as well as cities that benefit from the property taxes tied to office buildings. Nearly 20% of office spaces are currently empty across the United States. It's a milestone that exceeds the vacancy rate during the 2008 global financial crisis, and it's worse in places like San Francisco and downtown Los Angeles, where more than a quarter of offices are sitting empty. 'I'd say the number one implication is going to be defaults and foreclosures,' says Kenneth Rosen, chair of real estate research firm Rosen Consulting Group."

"Dry cleaners, shoeshiners, restaurants and conRight now I'm maybe getting four or five customers a day,' says James Wallace Sears, owner of a shoe repair shop in downtown Los Angeles, adding that his monthly sales are down 85% from before the COVID-19 pandemic. 'I'm here now starting up again to see if it's still going to work, but I don't know.' Stores that have long depended on heavy five-day-a-week foot traffic are struggling to survive.'"

CBC News in Canada. "'Everybody's going to get paid.' Those words have been spoken more than once by Greg Martel, the Victoria mortgage broker, who has been accused of running his business like a Ponzi scheme and who owes over $226 million to hundreds of people who bought investments that — according to documents — may not have actually existed. Last week at a virtual town hall for investors, PwC vice president Neil Bunker delivered sobering news to the 500 people tuning in: not only are Martel's whereabouts uncertain, investigators have yet to locate the missing millions or proof the investments were real."

"Single mother Gayle Morrell said she learned of Martel from a friend whose accredited financial planner recommended investing with him. Morrell said she worked hard for two years to scrape together $25,000 to invest. At first, it all seemed good. She watched her money grow to over $80,000 and had recently requested to withdraw the original deposit so she could build a free-standing roof over the RV she lives in with her son. Now she doubts she'll ever see a penny of her money."

"'It was interesting how [investing] changed the way I thought about finances. I kind of thought I was in some rich boys club ... I like, squeaked in, and this is how people with a lot of money make money,' she said. 'And now that it's all gone, it's like, crap, back to reality.'"

From ABC News. "When Mali Davoodi immigrated from Iran more than a decade ago, she wanted to achieve the 'great Australian dream' of owning her own home. But that dream has turned into a nightmare after one of the country's largest builders Porter Davis collapsed last month. The 44-year-old and her husband are among about 1,700 victims caught up in the insolvency crisis the head of Master Builders Queensland says has been created by 'the worst economic conditions in living memory.' Every time it rains, the distressed couple's unfinished home gets damaged further, because it's not yet watertight."

"Ms Davoodi said the 'state of suspense' she and her husband have been left in had been frustrating. 'I just want to wake up and this nightmare to finish so I can have my life back,' she said. 'The amount of stress and pressure we are under has made this unbelievably hard. This was our first house build, we have been saving for six years and our dream home idea is shattered and the hard-working money we earned has gone.'"