GSN Roundup: Citi Inks Storage Buy, Hotel Trade Bounces, and Bermuda Recognizes Egan-Jones

Top stories in US CRE News this week:

Asset Backed Alert 01.30.26 
Bermuda Drops Recognition of Egan-Jones  

Insurers that own investment products rated by Egan-Jones, including many structured-finance instruments, are assessing their alternatives now that the rating firm no longer is recognized by the Bermuda Monetary Authority. 

The move prevents insurers from using Egan-Jones ratings to determine solvency capital ratios in the British Overseas Territory, where many are based. That could require such insurers to reserve significantly higher amounts of capital against the assets.  

Under BMA guidelines, insurers must classify fixed-income and certain preferred-stock exposures by the Bermuda Solvency Capital Requirement, calculated by using the lowest rating among those obtained from a so-called core four companies – Moody’s Ratings, S&P, Fitch and A.M. Best – with an option to add other BMA‑recognized agencies, according to insurance consultancy Bridgeway Analytics.  

If optional BMA‑recognized agencies are used, insurers must document their selection, use it consistently over time, obtain senior‑management approval for the selection, and apply to their BSCR calculation the lowest rating provided across all selected agencies and the core four.  

If no rating is available, a designation assigned by the National Association of Insurance Commissioners’ Securities Valuation Office can be used. Otherwise, a BSCR rating of 8, which equates to a rating below triple-C-minus, is assigned. 

In cases where an investment product is rated solely by Egan-Jones, or where Egan-Jones’ rating is not the lowest, insurers may have to reserve more capital against their holdings. 

The decision could result in a windfall for other rating companies still recognized by the BMA. The authority’s latest capital and solvency handbook, published last month, lists Moody’s, S&P, Fitch, Morningstar DBRS, KBRA, A.M. Best, and Japan Credit Rating Agency. Previously, it also had listed Egan-Jones. 

Commercial Mortgage Alert 01.30.26 
Citi Inks Financing for Hefty NY Storage Buy 

Citigroup has originated $615 million of acquisition debt on a big self-storage portfolio in New York. 

The bank closed the financing deal within the past couple of weeks for a partnership led by StorageMart, in conjunction with the venture’s purchase of the 15 properties from Carlyle Group. The floating-rate debt has a term of five years, and Citi likely would hold most or all of it on its balance sheet. Eastdil Secured advised the StorageMart venture on the debt and Carlyle on the sale. 

Sister publication Real Estate Alert reported this week that Columbia, Mo.-based StorageMart and an unidentified sovereign wealth fund had teamed up to buy the properties, totaling 25,855 units, in a transaction carrying a price tag of $1.03 billion. The loan collateral represents the majority, if not the entirety, of the pool. 

Seven of the properties are in Brooklyn, four are in Queens, three are in Manhattan, and one is on Staten Island. 

The 1.3 million sq ft portfolio is around 78% occupied. It consists of 15,389 standard storage units that are 88% occupied, and 10,456 lockers that are 41% leased.  

The portfolio’s economic occupancy, a measure that factors in rent delinquencies and concessions, is just 46%. Marketing materials suggested that improved management, increased leasing and burned-off concessions could see a new owner triple net operating income in four years. 

The average age of the facilities is four years, and in-place rent averages $35.60/sq ft. Lease-up periods typically are longer in the storage sector, though the Carlyle sales campaign emphasized that factors including high population density drive demand for such facilities within 3 miles of the properties. 

StorageMart is expected to rebrand the properties under its Manhattan Mini Storage flag. The company, which has more than 300 sites across the U.S., Canada and the U.K., is controlled by Stan Kroenke, who also owns the Los Angeles Rams football team; Cascade Investments; and Singapore-based GIC; among others. Kroenke is the majority owner. GIC and Cascade bought stakes in the business in 2020. 

Real Estate Alert 02.03.26 
Hotel Trades Bounce Back; Eastdil Tops Table 

Large hotel sales posted surprisingly strong growth in 2025, fueled by a robust second half that lifted the sector out of its Liberation Day-induced slump. 

Last year saw $15.71 billion of hotel trades of $25 million and up, for a 15.0% increase from a four-year low of $13.67 billion in 2024, according to Green Street’s Sales Comps Database. A whopping 68.9% of that activity, or $10.82 billion, took place from July through December, as a market frozen by economic uncertainty surrounding the introduction in April of President Donald Trump’s tariff plans, started to thaw. 

Eastdil Secured again ranked as the sector’s most active brokerage, even as its deal volume slid 16.4% from a year earlier to $3.70 billion. Consequently, the firm’s market share dropped 9.6 percentage points to 34.0%. 

CBRE moved up to second place from fourth as it registered a 138.1% gain, the largest among the major brokerages, to $2.25 billion. Its market share jumped to 20.7% from 9.3%. JLL, meanwhile, moved down a notch to third with $1.79 billion of closings. That represented a 20% increase from 2024, pushing its market share to 16.4% from 14.7%. 

Rounding out the top five were Newmark with $820.5 million, up 33.7% (7.5% market share), and Hunter Advisors at $576.1 million, up 46.4% (5.3% share). Hodges Ward Elliott, which was acquired last month by Franklin Street, dropped out of the top five, to sixth. 

The investment-sales market for hotels endured one battle after another over the last six years that muddled performance projections, depressed values and interrupted trading. At the start of last year, a rebound was on the horizon with a full pipeline of fresh listings and investor interest returning to the sector. 

But the seeming recovery was derailed by Liberation Day, which added a new dash of unease for investors when it came to underwriting risk. The upshot: Large hotel sales were down 20.9% in the first half, compared with the same period in 2024. 

The second half unfolded with a now-or-never storyline. On one side of the table, more property owners and lenders with broken capital stacks, rising expenses and stalled revenue opted to pull the trigger on sales and capitulate on pricing. 

“The market definitely rebounded,” said Louis Stervinou, an Eastdil managing director. “There is more of a sense of equilibrium in pricing … it’s more seller acceptance than anything.” 

He expects the second-half momentum to carry into this year: “There’s an increase of quality assets in and coming to market that coincides with interest-rate declines, and the result will be luxury and upper-upscale [sales] that will significantly move the needle going forward.” 

On the buy-side, seasoned investors including high-yield fund operators and wealthy individuals drew from their experience to take advantage of historic discounts and falling interest rates by beginning to underwrite deals amid the uncertainty. Among them were Blackstone, Brookfield and KSL Capital Partners.  

“That doesn’t mean concerning things aren’t happening, but we have bought, fixed, and sold across a three-decade period … and that gives us perspective and some courage to see through the noise and stay focused on long-term secular trends,” said Mit Shah, chief executive of Noble Investment Group, which he founded in 1993. 

“Even in this K-shaped economy, we are seeing continued resilience in travel patterns,” he added, referring to a recovery pattern in which certain industries fare well while others struggle. 

In the first half, the trend in hotel performance decoupled from gross domestic product growth, rubbing against historical norms, said Dan Peek, president of JLL’s hotel and hospitality team. But the reality is that the economy continues to grow and new supply remains muted. Meanwhile, the potential for federal tax rebates this year could spur better property performance – which all point to the potential for continued increasing sales volume.   

In the year ahead, “we could be surprised at the upside, but at a minimum we will have measured growth,” Peek said. 

Still, brokers and buyers agree that much of what does come to market will consist of listings from owners and lenders that are under pressure due to loan maturities, diminished or flat cashflows, and the need to inject capital into renovations. 

“As a buyer, that’s a good thing,” said Ben Rowe, chief executive and managing partner of KHP Capital Partners. “There were fewer things to pursue over the course of the last year, but the deals we’ve been working on are more interesting and have some aspect of distress that is creating opportunity.” That coupled with improving debt markets “sets up a path for compelling returns,” Rowe said. 

“Our general view is 2025 was more about stabilization and 2026 is about conviction returning to the markets,” added Miles Spencer, a vice chair in Newmark’s lodging capital markets group. “Muted supply, steady growth and increasingly attractive debt markets will reignite transaction volume.” 

To be sure, the market remains in transition. While sales volume has improved, it still is trending well below the 10-year average of $19.53 billion, according to the Sales Comps Database. On a per-room basis, values were down 20% to an average of $273,551, on par with the weighted average in 2020. 

“The market is trying to transition from risk-off to risk-on,” said Bob Webster, co-head of CBRE’s national hotel partners group. “We’ve been in a FOMM market, which is fear of making a mistake,” he said. “We need to transition the market to FOMO – fear of missing out.” 

Last year was largely devoid of sales of marquee assets. The list of completed transactions consisted largely of urban properties, with New York and San Francisco picking up steam, as well as large convention-center hotels, thanks to an uptick in group and conference bookings. 

Unbrokered trades were up 37.3% last year, to $4.84 billion, making up 30.8% of all activity. Brokered trades were up 7.2%, to $10.88 billion. 

Broker rankings are based on property transactions that closed last year and that involved full or partial stakes valued at $25 million or more. When multiple brokers shared a listing, the dollar credit was divided evenly, but each broker was credited with one transaction. Only brokers for sellers were given credit. Portfolio transactions were included if the package price was at least $25 million.