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10 Must Reads for the CRE Industry Today (December 20, 2016) Photo: Justin Sullivan/Getty Images

10 Must Reads for the CRE Industry Today (December 20, 2016)

 

  1. Walgreens to Shed at Least 865 Rite Aid Stores to Save Mega-Merger “It looks as though Walgreens Boots Alliance finally has a trick to convince the U.S. government to sign off on its $9 billion acquisition of Rite Aid. The trans-Atlantic drugstore operator said on Tuesday the combined company plans to sell at least 865 Rite Aid stores to small regional drugstore chain Fred’s for $950 million in cash. WBA said that if the FTC demanded a larger divestiture, Fred’s would be compelled to buy additional Rite Aid stores.” (Fortune)
  2. As Rates Continue to Rise, Real Estate ETFs Are Back in Focus “The two funds saw approximately $400 million flow out apiece last week amid rather heavy trading volume in both of these funds, although both have rallied in the past two sessions off of recent lows during the selling. IYR and ICF are both in the black year-to-date in terms of performance but both are substantially behind say the S&P 500 during this time frame, which is up over 10.5% presently, presumably on higher interest rate prospects.” (Nasdaq)
  3. Cramer Says Department Stores Are in Real Trouble and Nordstrom is ‘Cannibalizing Themselves’ “While some segments of retail are alive and well, Jim Cramer can't ignore the pain that department stores like Nordstrom are in. For years, traditional mall-based retailers have struggled desperately to keep up with Amazon, and have made big moves to build out their omnichannel business to compete. Unfortunately, for some retailers, it simply wasn't enough. JPMorgan downgraded Nordstrom to ‘underweight’ on Friday in the wake of recent meetings with the company's management team. Nordstrom was once considered the best in the business, but the stock declined nearly 9 percent after the note was released.” (CNBC)
  4. Trump to Meet with Real Estate Mogul R. Donohue Peebles “President-elect Donald Trump will meet with fellow real estate mogul R. Donahue Peebles Monday at Trump's Mar-a-Lago resort in Palm Beach, Fla. Peebles is the founder and chairman of the Peebles Corporation and is also the chairman of the Congressional Black Caucus Foundation. Like Trump, Peebles made a fortune in real estate before toying with an entry in politics. In 2010, Peebles mulled an eventually abandoned bid in the Washington, D.C. mayoral race.” (The Hill)
  5. Toys ‘R’ Us Joins Rush to New York Wheel “These are busy days around the Staten Island Ferry terminal in St. George. Pedestals have begun to arrive for the near-$600 million, 630-foot-tall New York Wheel, behind its original schedule but now on track to open in 2018. And almost at its foot, the leasing machine of BFC Partners’ Empire Outlets keeps on turning. In the latest deal, Toys ‘R’ Us has signed for a 3,300- square-foot store for the complex that aims for a grand opening in November 2017.” (New York Post)
  6. Selling Trump’s Washington Hotel to End Conflict May Mean Loss “President-elect Donald Trump might face a financial loss should he opt to sell his Washington hotel now, complicating the possibility of a clean break from the property, which has become a flash point for his conflicts of interest around the globe. As president, Trump would be on both sides of the lease for the 263-room Trump International Hotel Washington D.C., which opened in September in a renovated post office building rented from the federal government. For the Trump Organization to recoup its $212 million investment in the makeover, a buyer would have to pay about $806,100 per room.” (Bloomberg)
  7. Deal Preview 2017: The Environment Remains Competitive “Buchanan, who spent seven years as president of McLean Va.–based multifamily firm Kettler, sits in a windowless conference room that his nascent multifamily investment firm Blackfin Real Estate Investors shares with Pace Consulting—a lobbying firm—and speaks in hopeful terms. Blackfin, the firm Buchanan founded with Doug Root (currently, the two men and Root’s black Labrador retriever, Grady, are Blackfin’s only employees), hasn’t bought any apartments yet. But Buchanan says they’re close.” (Multifamily Executive)
  8. A Billionaire-Backed Plan to Use Shipping Containers to House the Homeless “Tiny houses have emerged in the past decade as a promising way to house more homeless people for less money. Now the idea has gained a powerful proponent in the billionaire California real estate developer John Sobrato, who unveiled a proposal this month to build 200 micro-apartments for homeless and low-income renters in Santa Clara. Sobrato, who has spent much of his career building office space for many of Silicon Valley’s technology giants, asked the Santa Clara City Council for exclusive negotiating rights to lease a 2.5-acre plot of city-owned land.” (Bloomberg)
  9. Destination Maternity to be Acquired by French Company “French children’s clothing company Orchestra-Premaman SA has won its battle to acquire Destination Maternity Corp. The deal calls for Orchestra to acquire Destination Maternity for about $7.05 a share, valuing the U.S. retailer at about $100 million according to its share count. The combined company, which will have estimated revenues of approximately $1.1 billion and create a leading global provider of maternity apparel, childrenswear and baby hard goods, will be operated under the Orchestra name. Orchestra will maintain its corporate headquarters in Montpellier, France.” (Chain Store Age)
  10. 5 Big Mortgage Market Predictions for 2017 “With chestnuts roasting by an open fire, Federal Reserve Chair Janet Yellen is nipping at the noses of mortgage industry professionals with one interest rate hike in the bank this year and two or three more likely on the way in 2017. Merge that scenario with a new president in Washington, D.C., and a healthier U.S. economy, and 2017 really does shape up to be a barn-burner for mortgage industry professionals and home financing consumers. What can both parties expect to see happen next year in the mortgage sector? Here are five likely scenarios, delivered by veteran mortgage industry experts.” (The Street)
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