10 Must Reads for the CRE Industry Today (April 11, 2016)

10 Must Reads for the CRE Industry Today (April 11, 2016)

 

  1. Sears Taps Bill Gates’s Fortune in Latest Borrowing “Hedge-fund manager Edward Lampert continues to pump money into Sears Holdings Corp., but for its latest financing the retailer also has tapped another billionaire’s fortune. The company on Friday said it raised $500 million in financing backed by mortgages on 13 properties. The backers include affiliates of Mr. Lampert’s hedge fund, ESL Investments Inc., and Cascade Investment LLC, the investment firm that manages most of Microsoft Corp. co-founder Bill Gates’s wealth.” (The Wall Street Journal)
  2. Retail Market Makes Slow Progress in Q1 “CBRE Group’s latest quarterly report released on Friday about the U.S. retail property market, offered a glimmer of better times for the long-beleaguered property type. According to the report, neighborhood, community and strip retail centers all continued their steady recovery in the first quarter of 2016, with nearly half of the 62 markets surveyed by the company reporting tighter availability. The three retail center formats registered an average availability rate of 11.2 percent in the first quarter, down 10 basis points from the fourth quarter. That’s the latest in a steady decline from 11.4 percent a during Q1 2015, and from a peak of 13.3 percent in 2011.” (Commercial Property Executive)
  3. Teen retail's overlooked disadvantage “PacSun has filed Chapter 11. Aeropostale is teetering on the edge. Abercrombie & Fitch and a handful of other teen retailers are on the road to recovery, but sales remain well below the levels of their heyday. Though brands that cater to teenage shoppers have grappled with many of the same issues as the broader industry — rock-bottom prices and the rise of Amazon, to name a few — one analyst argues this group of stores is up against an additional headwind that most other retailers don't have to deal with: a short selling window.” (CNBC)
  4. Commercial, Multifamily Originations Rise to $504B in 2015: MBA “Commercial and multifamily originators closed $504 billion in loans last year, according to the Mortgage Bankers Association. The MBA's Commercial Real Estate/Multifamily Finance Annual Origination Volume Summation for 2015 found that commercial bank portfolios were the leading capital source, responsible for $138.6 billion of the total. Commercial mortgage-backed securities saw the second highest volume, at $99.4 billion, followed by life insurance companies and pension funds.” (National Mortgage News)
  5. Is there a place for micro apartments and micro hotels in a country notorious for macro tastes? “For Robin Dionne, director of outreach for the Arcade in Providence, R.I., expectations for the micro-apartment complex located in a repurposed shopping passage were initially as modest as the 225-square-foot dwellings she began hawking in 2014. ‘We had doubts that anybody would show,’ she said. But it turned out that small (most of the one-bedroom units are about the size of a hotel room) was just what some people had been waiting for. Now she has thousands of people on a waiting list for the tiny apartments. And it’s not just broke students looking for a cheap place to rent. ‘We have everybody from graduate students to people who are winding down toward retirement,’ she said.” (MarketWatch)
  6. Durst, Fetner divided $740M worth of properties in split “Related Cos. chairman Stephen Ross and Tishman Speyer boss Rob Speyer may nearly have come to blows a few weeks ago, but at the very same Real Estate Board of New York meeting, Douglas Durst and Harold Fetner – who’d just finished dividing $740 million in the breakup of their residential development partnership – chatted together amicably, the Wall Street Journal reported. The two developers, heads of the Durst Organization and Fetner Properties respectively, used a creative negotiation framework, and reportedly relatively few lawyers, to divide their co-venture, Durst Fetner Residential.” (The Real Deal)
  7. Real Estate Notebook: Office rents up in Palm Beach, Miami-Dade counties “Palm Beach and Miami-Dade counties ranked in the top 10 nationwide in demand for office space and rent growth during the first quarter, according to a report from Cushman & Wakefield. In the January-through-March period, Miami-Dade County filled 907,000 square feet, behind only the Denver metro area's 909,000 square feet, the data show. Palm Beach County ranked 10th with 518,000 square feet. Broward County filled 506,893 square feet.” (Sun Sentinel)
  8. Gas leak disrupts Porter Ranch housing market “The massive natural gas leak above Porter Ranch that caused thousands of families to flee, complaining of headaches, bloody noses and nausea, appears to have had a secondary effect that residents feared: It disrupted the neighborhood's housing market. Sales from December to February declined 20% from a year earlier, though prices held up after the leak that began Oct. 23, according to data from online brokerage Redfin. In contrast, both sales and prices rose countywide during the same three-month period.” (Los Angeles Times)
  9. Will CenterPoint Become a Real Estate Investment Trust? Should It? “The Houston-based electric utility could muddle along as it does now, with the stock not doing much; or, as an activist investor may want, it could try one or several risky financial maneuvers that could boost the stock price but come with their own set of complicated issues. On December 11, activist investor Paul Singer and his Elliott Management Corp. revealed that it had bought an undisclosed stake in the company, implying that he wanted to effect change. CenterPoint said in February that it was considering a real estate investment trust for its electric utility Houston Electric and "strategic alternatives" for its half interest in natural gas pipeline business Enable Midstream Partners LP (OGE Energy Corp. owns the other half).” (The Street)
  10. How to Avoid Entanglement with Unethical Offshore Companies “The offshore planning community was shocked when the hacking of a Panamanian law firm and the subsequent release of documents resulted in widespread allegations of tax evasion, money laundering, and fraud. Journalists with the International Consortium of Investigative Journalists (ICIJ) obtained the hacked files, which contained some eleven million documents of the Panama-based law firm Mossack Fonseca. The ICIJ enlisted the help of some 107 media organizations around the globe in analyzing and reporting on the documents.” (WealthManagement.com)
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