10 Must Reads for the CRE Industry Today (November 5, 2014)

10 Must Reads for the CRE Industry Today (November 5, 2014)

  1. Real Estate Firms Die Out Due to Lack of Succession Planning “Every company needs good succession planning, said panelists at the 2014 ULI Fall Meeting, but real estate is one of the worst sectors at practicing it. Succession planning is important for protecting the future of a company for its investors, for its employees, and, with regard to partnership and family-owned firms, for its successor-owners, too.” (Urban Land)
  2. Schorsch Brokerage Tells Advisers Not to Recommend Own Company Stock “Real-estate investor Nicholas Schorsch ’s broker-dealer, Cetera Financial Group, has told its 9,200 financial advisers to restrict their sales to clients of stock in parent company RCS Capital Corp. and in American Realty Capital Properties , both of which are chaired by Mr. Schorsch.  Shares in both companies have plummeted because of accounting irregularities disclosed by American Realty Capital, Mr. Schorsch’s main property-investment vehicle. An email to Cetera’s advisers instructed them not to solicit buy orders from clients for shares in RCS Capital and American Realty Capital as well as for several real-estate investment trusts and other publicly traded entities affiliated with Mr. Schorsch’s empire, including American Realty Capital Healthcare Trust , New York REIT, BDCA Venture Inc. and AR Capital Acquisition Corp. , a special-purpose-acquisition company.” (The Wall Street Journal)
  3. Barrack’s Colony Units to Combine Under Colony Financial “Colony Capital LLC, the investment firm founded by Thomas Barrack Jr. that has $19 billion of assets, agreed to combine management with Colony Financial Inc. (CLNY), a real estate investment trust also started by the billionaire. The agreement calls for the payment of $657.5 million in Colony Financial securities, of which $547.5 million would be paid up front and as much as $110 million would be contingent on fundraising and performance targets, the Santa Monica, California-based company said today in a statement. The arrangement is scheduled for completion in the first half of 2015, with the combined company to be called Colony Capital Inc.” (Bloomberg)
  4. Don't Look for Mid-Term Elections to Aid U.S. Property Market “The Nov. 4 mid-term national elections are not expected to either boost or hurt the state of the current economy and more importantly, the nation's sagging housing industry.  For the most part, it will be business as usual on Wall Street, on Main Street and in the real estate industry. That's the view of a horde of social media pundits, even if the Republican Party dominates the mid-term elections and the Democrats get swamped. The entire House of Representatives and 36 Senate seats are on the ballot.” (World Property Journal)
  5. Two Dozen Retailers Won’t Open on Thanksgiving–And They’re Shaming the Ones That Will “A slew of national retailers are making a point of the fact that they aren't going along with the trend to open—and open earlier and earlier—on Thanksgiving Day. In one of the most noticeable trends thus far in the holiday shopping season, several mall mainstays are engaged in an aggressive game of Thanksgiving store hour one-upmanship.” (Time)
  6. After Collapsing at Home, Quiznos Sees a Big Future Overseas “Quiznos barely made it out the U.S. alive. The toasted sandwich chain, which had once expanded to about 5,000 restaurants at home, had withered to 2,100 this year and filed for bankruptcy protection. Now, after restructuring, Quiznos (QUIZ) hopes its fortunes will be more favorable in new lands. Most Quiznos restaurants are in the U.S. and Canada, where competition for sandwich sales has rarely been more competitive. Lurking in the giant shadow of Subway and its more than 26,400 U.S. locations is also Jimmy John’s, Firehouse Subs, Potbelly (PBPB), and Jersey Mike’s, among other expanding chains. Quiznos executives appear to have decided that their embattled chain would perform better in less crowded territories.” (BloombergBusinessweek)
  7. Net-Lease Risks that Lenders Consider: Interview with Gary Mozer “The net-lease investment space today is a ‘big business,’ said Gary Mozer, principal/managing director of George Smith Partners. The industry has become institutionalized in the past five years, with the entry of REITs and other large players. As a lender, ‘I ask what is the tenant’s credit, and what is the type of lease—a bond, net or gross lease.’ ‘How functional is the building? Is it a generic or specialty building? If a tenant vacates, the rent could fall with a new incoming tenant. These are the types of questions we have to ask.’” (Commercial Property Executive)
  8. Candlebrook Adds Dormitories With $230 Million Purchase “Candlebrook Properties LLC, a closely held company with about 5,000 apartments in the eastern U.S., is diversifying into student housing with the $230 million acquisition of five off-campus properties. Candlebrook joined with Lubert-Adler Partners on the purchase of buildings with about 3,400 beds near colleges in Georgia, Indiana, Kentucky and Virginia. Formerly known as Vantage Properties LLC, Candlebrook began as an investor in New York City apartments in 2005 and later expanded to New Jersey and the Philadelphia area.” (Bloomberg)
  9. Blackstone is the buyer of Vornado’s 1740 Broadway: sources “Private equity giant Blackstone Group is the buyer of Vornado Realty Trust’s 1740 Broadway, The Real Deal has learned. Sources familiar with the $605 million transaction said that Blackstone made the buy through its core-plus real estate fund.” (The Real Deal)
  10. New York investor paying $144 million for Mag Mile building stake “Acadia Realty Trust, the East Coast investor with a ravenous appetite for Chicago retail properties, is poised to pull off its biggest deal here yet, on the Magnificent Mile. The White Plains, New York-based real estate investment trust has agreed to pay $144.3 million for a stake in the retail building at 840 N. Michigan Ave., according to a securities filing and a person familiar with the deal. It would be the most Acadia has paid for a Chicago property since it started aggressively buying buildings in the city's strongest retail areas several years ago.” (Chicago Real Estate Daily)
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