10 Must Reads for the CRE Industry Today (November 5, 2015)

10 Must Reads for the CRE Industry Today (November 5, 2015)

 

  1. Taxpayers May Be Funding Billionaires’ Biggest Apartment Deals “Who do billionaires turn to when they want to buy apartment complexes? The U.S. taxpayer. Barry Sternlicht’s Starwood Capital Group and Stephen Schwarzman’s Blackstone Group LP are in talks with Freddie Mac to finance two transactions totaling more than $10 billion, according to people with knowledge of the negotiations.” (Bloomberg)
  2. Investing in Real Estate for Retirement Income “Is real estate a good way to generate strong returns for retirement? Absolutely. Having a reasonably steady, and a mostly predictable, income stream is the Holy Grail for retirees. This is why investors love real estate. You’ve heard it time and time again: Cash Is King. It’s most certainly a cliché, but its resonance becomes reality with real estate, particularly with this simple modification: Cash In Hand Is King.” (Next Avenue)
  3. U.S. Citizenship Should Not Be for Sale “The EB-5 regional center program allows foreign nationals to purchase visas and eventually become U.S. citizens. The program will expire in December, and I believe Congress should allow it to end. At its most basic, the EB-5 program allows a foreigner to invest $500,000 in a U.S. business, in return receive a visa that puts them and their direct family on a special path toward citizenship. At the same time, individuals unable to buy their way into the country remain trapped in seemingly endless visa backlogs that often last more than 20 years.” (Roll Call)
  4. Private Equity Funds Sitting on $244 Billion of Cash Earmarked for CRE “In case anyone thought private equity funds might start shying away from ever-pricier commercial real estate, the numbers would say otherwise. CRE private equity funds ended the third quarter with $244 billion of dry powder available for investment, according to the Preqin, a leading source of data and intelligence on the alternative assets industry, including real estate.” (CoStar News)
  5. Target is Closing 13 Money-Losing Stores “Target is closing 13 of its stores because they are proving to be a drain on its financial results despite getting years to prove themselves. The discount retailer, which typically announces store closings at this time year in anticipation of winding them down right after the holiday season, usually pulls the plug on a store if a given location has seen its profits shrink for several years, a Target spokesperson told Fortune by e-mail. The stores include locations in Minnesota and Wisconsin.” (Fortune)
  6. Why Investors in Manhattan’s Fanciest Condos Should Have the S&P 500 Envy “To see how the top of the condo market fared against less glamorous investments, the real estate analysts at CityRealty looked at the average price per square foot across a collection of 100 prominent Manhattan condo buildings. The value of those condos increased 55 percent in the past decade, according to a new report, rising from an average of $1,530 per square foot in the second and third quarters of 2005 to an average of $2,371 in the same period this year” (Bloomberg)
  7. Local Developer Partners With Chinese Firm to Buy $50 Million Downtown Brooklyn Site “A Manhattan-based residential builder has partnered with Vanke, a large Chinese development firm, to buy a downtown Brooklyn site and build a 33-story condo tower. Adam America Real Estate and Vanke, along with Slate Property Group, has closed on the acquisition of the development site at 10 Nevins St. for $47.75 million, according to city property records.” (Crain’s New York Business)
  8. CRE Investors Ponder If Now is Best Time to Exit Houston “Houston remains the major market aberration in the ongoing recovery across the U.S. commercial real estate market. The unexpectedly long duration of lower oil and gas prices has long since curtailed growth in the once market-leading economy, which has made investors in public REITs with exposure to the big Texas energy market nervous. The oil price plunge that hit a year ago has so far spoiled the performance of industrial, multifamily and hotel segments more so than the office and retail segments.” (CoStar News)
  9. S&P Downgrades Fairway “Standard & Poor's Ratings Services has lowered its corporate credit rating on Fairway Group Holdings to 'CCC+' from 'B-', citing “persistent underperformance” and the possibility the company breaches loan covenants in coming months. The outlook is negative, S&P added. According to S&P, a CCC rating indicates businesses that are ‘currently vulnerable and dependent on favorable business, financial and economic conditions to meet financial commitments.’” (Supermarket News)
  10. New York Archdiocese Looks to the Heaven for Fiscal Relief “Worshipers attending the Mass celebrated by Pope Francis at Madison Square Garden received more than a blessing. They also got a handout urging their support for a change to New York City’s policy for transferring valuable air rights. The Archdiocese of New York is in the midst of a very public campaign to have any Midtown East rezoning allow it to sell the development rights over St. Patrick’s Cathedral.” (The Real Deal)
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