10 Must Reads for the CRE Industry Today (November 23, 2015)

10 Must Reads for the CRE Industry Today (November 23, 2015)

  1. Fed Hike: Moving From ‘When’ to ‘How’ “The market has pretty much gotten the message: barring some unforeseen calamity or significant turn in the economy, the Federal Reserve will raise interest rates at its December meeting. That covers the ‘when.’ The folks at Bank of America/Merrill Lynch have started filling in the ‘how.’ How will the Fed raise rates, and how will the market respond to that? ‘When they increase rates,’ wrote analyst Mark Cabana, ‘we expect the Fed to raise the interest rate on excess reserves (IOER) to 50bp.’” (Wall Street Journal)
  2. John Zuccotti, Brookfield’s Operations Chairman, Dies at 78 “John Zuccotti, a former New York City deputy mayor and chairman of global operations for Brookfield Asset Management Inc. who oversaw landmark Manhattan properties including the World Financial Center, has died. He was 78. He died Nov. 19, according to Ashley Baldev, a spokeswoman at Weil, Gotshal & Manges, where Zuccotti was of counsel in the New York-based law firm’s real-estate department. No other details were provided.” (Bloomberg)
  3. CVC, Canadian Pension Said to Agree $4.7 Billion Petco Deal “CVC Capital Partners and the Canadian Pension Plan Investment Board have agreed to buy Petco Animal Supplies Inc. in a deal worth about $4.7 billion, people with knowledge of the matter said. The two firms beat a joint offer from buyout firms KKR & Co. and Hellman & Friedman, as well as a bid by Apollo Global Management, said the people, who asked not to be identified because the information is private. The deal may be announced as soon as this week, the people said.” (Bloomberg)
  4. View From the Top of the Real Estate Market: Exciting or Scary? “The top of a real estate boom market can be an exciting place, filled with giddy deals and record-setting construction. But somewhere beyond the top lurks the inevitable fall, like the first hill of a roller coaster. That was the underlying tension at the Urban Land Institute Charlotte’s annual real estate market forecast this week. In a plush event room at Myers Park Country Club, a panel of local real estate experts agreed this was one of the best markets in generations.” (wbtv.com)
  5. SEC Charges Atlanta Businessman with Fraud in Nursing Home Scheme “The Securities and Exchange Commission announced fraud charges against Christopher Brogdon, an Atlanta-based businessman accused of misusing $190 million of funds raised in the name of building and renovating senior living facilities. The SEC alleges Brogdon convinced investors that municipal bond and private placement offerings would earn interest from revenues generated by nursing homes, assisted living facilities and retirement communities.” (Wealthmanagement.com)
  6. Hollywood Debate is Trial Run for City Growth Fight “The Palladium project is, in many ways, just what elected leaders at Los Angeles City Hall say they want. Under the proposal two 30-story residential towers, would go up a block from a Hollywood Boulevard subway station. It would add 731 homes in the middle of a housing crunch. And the project would be constructed entirely on parking lots, ensuring that the developer won't need to demolish a single rent-controlled apartment. Nevertheless, the push to approve the Palladium Residences has found a powerful foe in the project's next-door neighbor, the AIDS Healthcare Foundation.” (Los Angeles Times)
  7. What the Death of the Mall Means for Investors “Going to the mall as a destination or hangout is simply no longer necessary. Years ago, young people would go to a mall to see and be seen. That is no longer the case. With smartphones like Apple's iPhone, you can text message (group or individual) and video chat. If you want to watch a movie, you can download it from any one of many streaming services such as Netflix, Apple's iTunes or Ultraviolet. Want some pizza or other food? Then just go to an app and order it for delivery. As for records, well, now we have digital downloads.” (MarketWatch)
  8. Rent Power Loses Mojo as New Deals Come Online “Zillow content producer Jordyn Lee taps into insight from the Zillow October Real Estate Market Reports, spotlighting how national rents grew 4.5% annually, down from 5.3% in September. Due in part to a lack of inventory, finding an affordable place to rent is a struggle for many residents across the country. Rents are still rising quickly, but thanks to new apartment buildings opening, they are growing at a slower pace, even in some of the hottest rental markets.” (Multifamily Executive)
  9. 5 Things Abercrombie & Fitch Suddenly Started Getting Right “Abercrombie & Fitch Co. shares were up more than 20% Friday after the company reported third-quarter earnings that not only exceeded analyst estimates but also showed same-store sales growth at its Hollister brand for the first time since the fourth quarter of 2011. Earlier this year, the company began a revamp that included everything from its fashions to its sexy advertising — and it looks as if the turnaround is starting to bear fruit.” (MarketWatch)
  10. Developer CIM Group Buys Again in Hollywood, Acquiring Sears Store Site “Los Angeles developer CIM Group has purchased a former Sears store site in Hollywood, a 5-acre plot where the previous owner tried to build a large residential and retail project. It’s unclear what CIM’s plans are for the site at Santa Monica Boulevard and Wilton Place. The developer declined to comment, as did the previous owner, Continental Development Group. However, real estate data provider CoStar pegged the sale price at $43.5 million.” (Los Angeles Times)
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