10 Must Reads for the CRE Industry Today (August 22, 2016)

10 Must Reads for the CRE Industry Today (August 22, 2016)

 

  1. New York nabs global property crown from London on Brexit fears “New York has knocked off London as the world's premier city for foreign investment in commercial real estate due to fears the vote to leave the European Union would diminish the British capital's appeal as a global financial center. Data on cross-border property transactions indicate greater unease among investors prior to the referendum, which voters unexpectedly approved on June 23, than had been captured in the capital markets prior to the vote. Cross-border capital flows into London real estate fell 44 percent in this year's first six months from the same period in 2015, according to data from brokerage Jones Lang LaSalle Inc. Property investors feared Britain's exit from the EU would erode London's role as a premier financial center and reduce the value of their investments, the majority of which are office buildings.” (Reuters)
  2. New Towers, Higher Prices Lift Chicago's Real Estate Market “A 4,000-square-foot condominium in Chicago hit the market this month for $12 million. While the asking price represents one of the highest in the city for a condo, it also underscores how sellers are increasingly testing the upper end of the city’s market amid soaring home prices. The 60th-floor apartment inside the Park Tower on North Michigan Avenue has 12-foot ceilings, a balcony and private elevator access. If it gets its asking price, the sale would tally $3,000 per square foot – a record sum for the city. Chezi Rafaeli of Coldwell Banker is the listing broker.  A steadily strengthening property market, led by an expanding economy and tightening housing inventory, is fueling much of the rise, data shows. It’s also behind a sharp increase in new construction across the city. In the South Loop, at least two new residential projects are underway that would potentially alter the skyline of a city accustomed to skyscrapers.” (Forbes)
  3. Want to Invest in Real Estate? Consider Off-Campus Student Housing “If you’re located close to a college, tapping into the off-campus student housing market could prove extremely fruitful. In December, commercial real estate services company CBRE reported investors were on course to purchase a total of $4.5 billion in student housing in 2015, according to National Real Estate Investor. The ever-replenishing tenant base of students surrounding college campuses is alluring to many landlords, who can enjoy the benefits of students rushing to secure limited housing options. While year-to-year numbers may vary, the number of people enrolling in higher education continues to rise, driving up demand for housing options and ensuring landlords will have a stable base of renters far into the future. The National Center for Education Statistics predicts college enrollment in the U.S. will reach 19.8 million students by 2025, an increase of 14 percent from its 2014 enrollment of 17.3 million.” (U.S. News & World Report)
  4. Report: Trump's Real Estate Holdings Have At Least $650 Million in Debt “It appears that GOP presidential candidate Donald Trump, typically a fan the huge and dissolute, has been minimizing public perception of his debt. A New York Times investigation published on Saturday reveals that U.S.-based real estate companies owned by Trump are at least $650 million in debt. Only half this amount was disclosed in the public F.E.C. filings Trump completed in order to run for president.” (Gawker)
  5. U.S. Hotel Stock Tracking Index Rises 6.1% in July “According to STR, the Baird/STR Hotel Stock Index increased 6.1% in July to close the month at 3,320. Year to date, the index is up 7.3%. ‘As U.S. hotel lodging performance continues its period of slow growth, the stock index reflects those new realies,’ said Amanda Hite, STR's president and CEO. ‘After an overcorrection post-Brexit, we are now in a 'new normal' environment of muted, but still positive RevPAR performance. Most industry participants and observers understand the existing supply and demand situation and are refocusing on ADR growth, which should be a catalyst for profit growth. That said, there are few factors, positive and negative, that are not yet well understood and priced in.’” (World Property Journal)
  6. Real estate valuations likely to cap REIT returns “For years, brokers have been selling high commission, nontraded real estate investment trusts with the promise of high dividend yields of 6% and 7% annually. That eye-popping dividend rate was the key element to advisers' successful marketing of the illiquid REITs; in the eyes of investors, heady returns justified the steep sales commission of 7% paid to the broker. And with interest rates at historic lows since the financial crisis, investors have chased yield and gobbled up alternative investments such as nontraded REITs, which had a record $20 billion in sales in 2013.” (Investment News)
  7. Miami condo developers make push for Chinese buyers “A group of nearly 20 top Chinese real estate brokers are touring luxury condo projects in South Florida this weekend as local developers seek to drum up business in the Far East. The attraction of Miami is clear. ‘Just look at this,’ said Gene Shi, president of international operations for China’s massive Homelink brokerage, as he gestured toward Biscayne Bay, its waters shimmering out the window of the Missioni Baia sales center in Edgewater on Friday. ‘This is something you could never dream of, even for a millionaire in New York City. But this is a typical view for a citizen of Miami.’ Another advantage: Miami offers much lower prices than Manhattan and San Francisco, the traditional U.S. hot spots for Chinese buyers.” (Miami Herald)
  8. New Lease on Life for Former DC Coast Guard HQ “A consortium headed by Western Development Corp. and Akridge has bought the former U.S. Coast Guard headquarters at Buzzard Point in the District of Columbia, the two companies announced late last week. The acquisition is the biggest step to date in redeveloping the site, at 2100 Second St. SW., into Riverpoint, a residential, retail and restaurant development. In addition to Western Development and Akridge, the development group includes Orr Partners, Redbrick LMD LLC and Jefferson Apartment Group. EagleBank and Greenfield Partners provided financing for the project. Riverpoint reportedly will feature 80,000 square feet of restaurant and retail space and more than 450 apartment and condominium units, along with new piers, floating restaurants and a connection to the Anacostia Riverwalk Trail.” (Commercial Property Executive)
  9. Deluxe Bay Area Asset Commands $320M “Apartment Investment and Management Company (Aimco) has acquired Indigo, a new 10-story luxury community in Redwood City, Calif., for $320 million.…Indigo consists of 416 apartment homes featuring high ceilings, hardwood flooring, oversized windows, and contemporary kitchens with designer hardwood cabinetry. Many of the apartments include private patios or balconies. The building also offers 47 penthouse level units with exclusive 10th floor access and upgraded designer finishes.” (MultiHousing News)
  10. Is Newark finally cleaning up its act? “For many New Yorkers, Newark is an exit and a last resort. Travelers ride the train in and fly out. But increasingly, people are coming to Newark and staying put. Currently $2 billion in commercial and residential development is underway in the industrial town and that means big changes. Roughly 1,500 units of housing are under construction and another 4,000 are planned in Newark, according to the New York Times. So is Newark going to become a destination? Is it about to lose its bad reputation? Real estate investors seem to think so.” (The Real Deal)

 

 

 

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