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10 Must Reads for the CRE Industry Today (April 11, 2017)

New York and Texas experienced the highest levels of spending on commercial real estate development in the nation in 2016, according to the Dallas Morning News. Vornado’s Steven Roth indicated that he would be willing to sell Vornado’s stake in New York’s 666 Fifth Avenue, reports Reuters. These are among today’s must reads from around the commercial real estate industry.

 

  1. New York, Texas Top Nation in Commercial Property Development “For the second year in a row, Texas was behind only to New York in total commercial real estate spending in 2016. Commercial property construction expenditures topped $18.5 billion in the Lone Star State last year. And development supported 310,994 Texas jobs, according to the new report by the NAIOP Research Foundation, a commercial real estate study organization. Nationwide the commercial development and construction industry contributed $861 billion to the U.S. gross domestic product last year.” (Dallas Morning News)
  2. Partial Owner of Kushner’s New York Flagship Property Willing to Sell “Efforts to breathe new life into an ageing Manhattan office building that is the flagship property of the family of President Donald Trump's son-in-law has gained a green light after a partial owner of the building indicated a willingness to sell. Steven Roth, chairman and chief executive of Vornado Realty Trust, said in a letter to its shareholders that there had been ‘much press’ recently about 666 Fifth Avenue, a 60-year-old building that Vornado owns with the Kushner family.” (Reuters)
  3. Here’s What Could Be Coming to More Than 7 Acres in Midtown “Although a great deal of the specifics are still yet to be determined, this morning I was able to get a peek of what could be coming to more than 7 acres of property at the southeast corner of Woodward and Mack avenues in Detroit's Midtown. As a refresher, it's that site, owned by father and son developers George and Adam Nyman, where Target Corp. has been a rumored possible tenant. George Nyman, sitting at a long table in a conference room in his downtown Birmingham office on West Brown Street, confirmed a meeting with the Minnesota-based retail giant.” (Crain’s Detroit Business)
  4. What in the World Is Causing the Retail Meltdown of 2017? “A deep recession might explain an extinction-level event for large retailers. But GDP has been growing for eight straight years, gas prices are low, unemployment is under 5 percent, and the last 18 months have been quietly excellent years for wage growth, particularly for middle- and lower-income Americans. So, what the heck is going on? The reality is that overall retail spending continues to grow steadily, if a little meagerly. But several trends—including the rise of e-commerce, the over-supply of malls, and the surprising effects of a restaurant renaissance—have conspired to change the face of American shopping.” (The Atlantic)
  5. Here’s How Much You Have to Earn to Live Comfortably in the 25 Biggest U.S. Cities “City life is expensive. If you're considering settling down in San Francisco, for example, you'll have to earn six figures to live comfortably. That's according to a 2017 GOBankingRates report, which determined just how much you need to earn each year to get by with a minimum of stress in the biggest U.S. cities. The site looked at the cost of living for a single person in each city, factoring in the median rent for a one-bedroom apartment, groceries, utilities, transportation and health care.” (CNBC)
  6. “Your Only Opportunity to Get Rich in America”: Inside LA’s Deceptively Simple $50M EB-5 Scam “It’s a paint-by-numbers approach to defrauding real estate investors. Federal agencies raided the homes and office of a California attorney and her father Wednesday, amid an investigation into whether the two perpetrated a multi-million-dollar fraud scheme. Victoria and Tat Chan allegedly took money from roughly 100 Chinese investors through the EB-5 visa program — but never actually invested it on their behalf. Instead, the Chans allegedly used the funds to buy luxury homes for themselves throughout Southern California.” (The Real Deal)
  7. Freddie Mac: More Renters Financial Confident, Plan to Stay Put “The latest renter survey from Freddie Mac is packed with good news for the apartment industry. A growing number of renters are optimistic about their financial situation and expect to stay where they are even if their rents increase, the research findings, released Monday, show. Also of note, a declining number of renters say they're working toward homeownership, expect to buy a home, or plan to move within the next few years.” (Multifamily Executive)
  8. More Competition, Challenges for Direct Lending, Private Debt Market in 2017 “Institutional investors have been raising their allocations to direct lending and private debt opportunities in the past few years as they eye favorable risk-adjusted return profiles and diversification possibilities. For 2017, Preqin reports, 57% of the investors the research firm surveyed are looking to raise their exposure to private debt opportunities. This interest has led to deals this year, such as Aflac’s signing on NXT Capital to manage $500 million in private debt opportunities. Meanwhile, the North Dakota State Investment Board is looking to deploy $200 million in direct-lending opportunities through Cerberus Capital Management.” (Chief Investment Officer)
  9. Chicago Grocery-Anchored Center Commands $107M “Federal Realty Investment Trust has acquired Riverpoint Center, a 211,000-square-foot grocery-anchored shopping center in Chicago for $107 million cash from an affiliate of Centrum Partners. Located at 1800 W. Fullerton Ave. in Chicago’s Lincoln Park neighborhood, Riverpoint Center is situated 3.5 miles northwest of downtown Chicago. Riverpoint Center is currently 97 percent occupied and is anchored by Jewel-Osco, Marshalls and Old Navy. The property boasts demographics that enhance Federal Realty’s already sector-leading position, with 545,759 people and average household incomes of $104,696 within a 3-mile radius.” (Commercial Property Executive)
  10. Department Store Retailer Enters New Market “Von Maur has opened its first location in Wisconsin. The family-owned company opened a 150,000-sq.-ft. store at The Corners of Brookfield in Brookfield, Wisconsin. Von Maur has been expanding with its eye on a national footprint. After expanding beyond its Midwestern footprint in 2011 with the opening of its first location in Georgia, Von Maur has since grown in additional new states including New York, Alabama and Oklahoma.” (Chain Store Age)
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