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10 Must Reads for the CRE Industry Today (December 12, 2017)

Amazon has cut down on hiring in its hometown of Seattle, according to CNBC.

  1. Amazon Has Sharply Curtailed Hiring in Seattle as it Seeks Second Headquarters “Amazon has significantly cut the number of open positions in Seattle, and some employees are talking about a hiring freeze, according to the Seattle Times and two employees who spoke to CNBC. As of last week, Amazon had 3,503 open positions in Seattle, just a fraction of the over 9,000 job openings it had in June and the lowest since 2014, the report said. That would also make the August to November period the slowest hiring four-month period for Amazon in King County, it said.” (CNBC)
  2. Here’s Why the Fed Will Hike Interest Rates on Wednesday “Inflation is well below the Fed’s 2% target and barely stirring. Yet Federal Reserve officials have insisted they intend to raise interest rates on Wednesday. What gives? The answer is that the central bank’s goal with interest-rate policy is to engineer “moderately” tighter financial conditions, said Ethan Harris, global economist at Bank of America Merrill Lynch. The Fed hopes that raising the yield curve will create a modest restraint on growth, allowing the expansion to continue at a steady pace without overheating.” (MarketWatch)
  3. New York Is the Most Expensive City in the World for Business Travel “sing data compiled from Business Travel News’ Corporate Travel Index, Expert Market, a business-to-business office equipment marketer, has concluded that three American cities take the top spots. New York City wins the crown. The typical business traveler spends about $549 per day in New York, compared to $534 in San Francisco and $511 in Boston. Tokyo and Zurich round out the top five. Washington and Chicago are also in the top 10. The biggest cost are hotels. The average one-night stay in the Big Apple costs about $385.” (The Washington Post)
  4. Amazon Collaborates with QTS for First Hybrid IT Cloud and Colocation Solution “Data center REIT QTS Realty Trust recently announced a new type of colocation service, where it pre-packages data center space and direct connectivity to Amazon Web Services. Unlike the typical private connectivity services data center providers offer their clients, QTS has prepared data center infrastructure in multiple locations that’s setup to connect to AWS immediately. All the client has to do is buy the service through the AWS Marketplace and get their hardware to one of the QTS data centers where it’s offered.” (Forbes)
  5. People Are Taking Out Mortgages to Buy Bitcoin, Says Securities Regulator “Bitcoin is in the ‘mania’ phase, with some people even borrowing money to get in on the action, securities regulator Joseph Borg told CNBC on Monday. Bitcoin has been soaring all year, starting out at $1,000 and rocketing above $19,000 on the Coinbase exchange last week. The price on Coinbase, which accounts for a third of bitcoin trading value, is often at a premium over other exchanges. The cryptocurrency was trading at just under $16,700 on Coinbase at 2:21 p.m. New York time Monday.” (CNBC)
  6. Marcus & Millichap Report: Tax Reform’s CRE Impact Likely Limited “Tax reform legislation that is currently in the hands of the U.S. Congress is not quite in its final form yet; however, as is, the proposed changes are not expected to have any notable negative impact on investment in the commercial real estate industry, according to a new tax plan report by real estate investment services firm Marcus & Millichap. On the other hand, there is likely to be some upside.” (Commercial Property Executive)
  7. Charming Charlie Files for Bankruptcy “One week after announcing that it planned to close underperforming stores, the other shoe has dropped at Charming Charlie. The jewelry and accessories retailer on Tuesday announced that it has filed for Chapter 11 bankruptcy protection. The move was not unexpected. The retailer said it has entered into a restructuring support agreement with a majority of its term loan lenders and equity sponsors. It also has secured $20 million in new-money debtor-in-possession (DIP) financing commitments from a majority of its term loan lenders and entered into a $35 million DIP asset-backed loan with current lenders.” (Chain Store Age)
  8. The World’s Tallest Holiday Inn Is Being Shopped Around “The tallest Holiday Inn in the world is up for grabs. Chinese developer Jubao Xie is looking to sell the 50-story, 492-key Holiday Inn Manhattan-Financial District, The Real Deal has learned. There is no official asking price for the hotel, which opened in 2014, but sources said Xie is looking for just north of $300 million for the property. Xie, who is based in China’s Jiangsu Province, developed the hotel at 99 Washington Street with Sam Chang and then bought him out in September 2014, property records show.” (The Real Deal)
  9. Lidl Adjusts Real Estate Strategy “Lidl is shifting its East Coast development plans and is now interested in leasing sites for new stores as opposed to solely purchasing them, a company spokesman said. The initiative — which targets properties that are between 10,000 and 21,000 square feet smaller than its typical store requirements — is designed to ‘accelerate our site acquisition along the East Coast,’ said William Harwood, Lidl’s director of communications.” (Supermarket News)
  10. The Long View: HNA, Anbang and the Myth of Low Leverage “What was once a pantheon of Chinese investors is beginning to more resemble a trauma ward. In April, HNA Group was the belle of the New York ball. Banks were fighting over a chance to finance the Chinese conglomerate’s $2.2 billion acquisition of 245 Park Avenue, according to a source close to the discussions. HNA ended up getting a $1.75 billion mortgage from a consortium led by JPMorgan Chase at a loan-to-value ratio of almost 80 percent. The terms, well above the industry average of 65 to 75 percent, were seen as a vote of confidence in the borrower.” (The Real Deal)
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