10 Must Reads for the CRE Industry Today (November 6, 2015)

10 Must Reads for the CRE Industry Today (November 6, 2015)

 

  1. Norway’s Wealth Fund Targets Major Cities After Bonds Hit Zero “Relentless monetary easing across the rich world is driving the biggest sovereign wealth fund away from debt markets as it instead targets real estate investments in mega cities. Chief Executive Officer Yngve Slyngstad says the meager returns bonds offer mean the $860 billion wealth fund needs to look elsewhere to meet its 4 percent return target. At the same time, a study published on Friday by the fund shows there’s an argument for tripling its real estate investment to 15 percent of the total portfolio.” (Bloomberg)
  2. Chances of ‘Unexpected Recession’ Rising: Jim Paulsen “With few of the traditional indicators pointing to a recession, this could be just the time investors should start preparing for ... a recession. Under ordinary circumstances, factors such as liquidity, the yield curve, gross domestic product growth, and fiscal and monetary stimulus would be key indicators to suggest the direction in which the economy is heading. However, these are not ordinary times.” (CNBC)
  3. Fannie Mae CEO: Stable Housing Finances Is the Goal, Not Maximizing Profits “In the quarterly report, Fannie warned that while it expects to remain profitable, the magnitude of those profits is likely to be lower in 2015 and the future than it was in 2014, given the shifting business model. That means if a housing market downturn prompts losses, the government policy of taking all profits above a certain net worth threshold could leave Fannie in a position of drawing on taxpayer funds.” (Forbes)
  4. Emerging Real Estate Managers Getting Smaller Slice of Pie “An examination of emerging managers in real estate highlights the difficulty that managers without an established track record face when getting their proverbial foot in the institutional door. Over the longer term, the total capital raised among emerging managers as a percentage of the overall total has steadily declined. It hit its peak in 2011 (at 37%), but so far this year that figure stands at only 16% as of Oct. 20, 2015.” (Pension & Investments)
  5. Walgreens-Rite Aid Deal Could Lead to Elimination of 3,000 Stores “If Walgreens buys smaller rival Rite Aid, the combined company may end up with far fewer stores than it bargained for, according to an analysis by real estate services company Cushman & Wakefield. In his analysis, Garrick Brown, vice president of research at Cushman for the West Region, notes that Walgreens could close or sell 1,000 before the deal closes, and then shutter up to another 2,000 after.” (Fortune)
  6. Apple’s Real Estate Rampage Across Silicon Valley Could Dwarf its Spaceship Campus “The latest news is the capstone to a series of nonstop real estate moves by the tech giant in recent months. While work on Phase I of the Apple Campus II is still slated for completion by the end of 2016, the company has been hiring like mad, with an estimated total of 25,000 employees in Silicon Valley. To keep up with its massive workforce, Apple has been signing deals to lease or buy office space across Silicon Valley.” (Venture Beat)
  7. Bass Pro Shops Explores Bid for Cabela’s: Sources “Privately held outdoors retailer Bass Pro Shops is exploring an offer for Cabela's, the U.S. hunting and fishing store chain targeted by activist investor Elliott Management, people familiar with the matter said. Bass Pro is working with an investment bank on the potential offer, the people said this week. Cabela's has recently begun to explore its options and has also reached out to private equity firms to solicit interest, the people added.” (Reuters)
  8. Red Lobster Real Estate Changes Hands Again “The private-equity group that bought Red Lobster last year and quickly sold its real estate is now buying some of that real estate back. Golden Gate Capital, which bought Red Lobster from Darden Restaurants Inc. for $2.1 billion, and then sold that real estate to VEREIT for $1.5 billion, has now agreed to acquire $204 million of Red Lobster real estate back from the firm.” (Nation’s Restaurant News)
  9. Happel Would “Fully Support” NY REIT Sale “New York REIT president and CEO Michael Happel said he would ‘fully support’ an entity-level sale of the New York City-focused real estate investment trust should such a deal come to pass. In addition to reshuffling its board of directors, New York REIT tapped Eastdil Secured last month to advise on “potential strategic transactions” in wake of mounting shareholder criticism over the company’s stock price performance.” (The Real Deal)
  10. Urban Multifamily Is Where It’s At: Brookfield “Amid demographic shifts and a drop in homeownership, Brookfield Property Partners is the latest real estate giant to double down on urban multifamily properties. ‘We think expanding what we’ve been doing in multifamily to urban areas is a really smart thing to do,’ a company executive said on an earnings call Thursday. Population growth in cities, declining homeownership and comparatively low capital expenditures all make rental housing an attractive investment, the executive added.” (The Real Deal)
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