10 Must Reads for the CRE Industry Today (February 17, 2017)

10 Must Reads for the CRE Industry Today (February 17, 2017)

 

  1. This is the least healthy city in America “Your city could be hurting your health. Detroit came in last in a quality of life study of the 150 most populated U.S. cities. The study, by personal finance site WalletHub, had Brownsville, Texas and Memphis, Tenn. just above Detroit Researchers evaluated these cities across 34 key indicators of good health in four categories: health care, food, fitness and green space. In the first category, the researchers looked at issues including premature death rate, family doctors per capita and the quality of the public hospital system, crunching government data from the U.S. Census Bureau and Centers for Disease Control and Prevention. For food, they looked at the number of farmer’s markets, the obesity rate and number of dietitians per capita, among other indicators. In the green space category, the study evaluated parkland acres, hiking trails and bike lanes per capita. San Francisco was deemed the No. 1 healthiest city in the country, ranking the best in food and No. 3 in green spaces, bike lanes, trails and parks. Salt Lake City was No. 2, followed by Scottsdale, Ariz., Seattle and Portland, Ore.” (MarketWatch)
  2. Los Angeles Looks to Ban Major Real-Estate Developments “The second-largest U.S. city is considering a measure that would effectively halt all housing construction, the most extreme example yet of a revolt against development breaking out across the country. A boom in luxury development over the last five years has transformed urban America, bringing young people, restaurants, retailers and jobs back to city centers. But construction activity has tilted toward the high end. Many longtime residents have become resentful of new towers that cast shadows over their neighborhoods of single-family homes and push up rents. Average apartment rents nationwide have surged 26% since 2010, according to MPF Research, due in large part to strong demand after the housing crash. Now some activists are pushing back with actions that threaten to grind housing production in some cities to a crawl.” (The Wall Street Journal, subscription required)
  3. Off-pricer retailer sets 2017 expansion “It’s going to be a busy spring for Stein Mart. The Florida-based chain will open five stores this spring –– the first phase of its 2017 store plan to open a total of 11 new stores. The remainder of the locations will open in the fall.  ‘These new stores fall within our real estate strategy to grow sales by filling existing markets where we are doing well,’ said Hunt Hawkins, CEO of Stein Mart, which operates 290 stores.” (Chain Store Age)
  4. With Earnings on Tap, Is Macy's Nearing a Miracle on 34th Street? “The storied retailer has seen seven-straight quarters of falling sales at its stores open at least a year, while overall sales growth has declined for the better part of two years. Earlier this month, Macy’s was approached by Canadian department-store operator Hudson’s Bay – which already owns Saks Fifth Avenue and Lord & Taylor – about a possible takeover, according to the Wall Street Journal. The paper reported talks between the two companies were preliminary, and could involve other alternatives like an acquisition of Macy’s valuable real estate, including its 34thStreet flagship in New York City -- which reportedly is worth at least $3 billion. Macy’s is already in the process of closing 100 stores and selling the real estate from locations in San Francisco, Portland and Minneapolis. Now may be the best time for the Cincinnati-based retail giant to consider selling off more of its real estate, said Jan Rogers Kniffen, retail-industry veteran and CEO of consulting firm J. Rogers Kniffen Worldwide Enterprises.” (Fox Business)
  5. Boxed in: NYC landlords struggling to deal with residents’ online shopping addiction “Online shopping is designed to make life easier — except for landlords. Call it a game of logistics. Property owners are grappling to adapt to a deluge of tenant packages from the likes of Amazon, Etsy, Blue Apron and Zappos, which have rendered traditional apartment building package rooms desperately inadequate. In some instances, that simply means renovating or expanding package to support a bigger haul. In others, where expansion is not a possibility, it means finding smart ways to quickly turn over packages and avoid backlogs. Both options come at an expense. And, when it comes to new development, real estate companies are getting serious about strategizing their package storage approach very early in the pre-development planning process.” (The Real Deal)
  6. Spotify Signs Massive New Office Lease at 4 World Trade Center “Global real estate consultant JLL is reporting today that their client -- Spotify USA -- has just inked a significant office lease at 4 World Trade Center with building owner Silverstein Properties Inc. The music streaming service will now lease 387,243 square feet of office space at the Class A, 2.3 million-square-foot commercial office building. Spotify was represented by Peter Riguardi, chairman and president of JLL's New York operations; Alexander Chudnoff and Kenneth Siegel, vice chairmen; and Jim Wenk, managing director, all with JLL. The building owner was represented by Mary Ann Tighe, CEO; Stephen Siegel, chairman of global brokerage; Ken Meyerson, vice chairman; Adam Foster, executive vice president; Steve Eynon, Evan Haskell and Robert Hill, senior vice presidents; and David Caperna, senior associate, all with CBRE Inc. Both firms worked closely with Marty Burger, CEO, and Jeremy Moss, executive vice president and director of leasing, with Silverstein Properties…Spotify signed a 15-year lease for 378,243 square feet of office space at 4 World Trade Center, which is located on Greenwich Street between Liberty and Cortlandt streets in Lower Manhattan.” (World Property Journal)
  7. D-FW office construction at peak after 5 years of gains “More than 10 million square feet of office space is under construction in North Texas, the most in the area in almost two decades. After five years of increases, building totals probably will drop off this year and into 2018. Several of the largest office developments in Dallas-Fort Worth are scheduled to be completed this year. Developers and lenders say they're pulling back from starting more speculative buildings.We have certainly been in a six-year positive cycle that is longer than most real estate up cycles,’ said Greg Fuller, chief operating officer with developer Granite Properties.” (Dallas Morning News)
  8. Rockefeller Center owner plans eight-story office building in the Arts District “Well, what do you know? Another big development is headed for the Arts District. This time, it’s an eight-story office building from major real estate investor Tishman Speyer—the same firm that owns such high profile properties as Rockefeller Center in New York. Tishman Speyer purchased the project site just a few months ago in a $24.5 million sale that reinforced the neighborhood’s status as one of the most desirable areas in the city for big ticket real estate investments. Just before the sale closed, Warner Music Group announced plans to move into the refurbished Ford Factory building nearby. The project site, located between Bay Street and Sacramento overlooking the LA River, is, for right now, home to the offices of Hyperloop One. It’s not clear yet how the new plans will affect the tech startup, which is hard at work developing a transportation system that flings passengers through airless tubes at high speeds.” (Los Angeles Curbed)
  9. Will the Pittsfield Building finally get a makeover? “Developers that overhaul historic properties are getting another crack at a Chicago landmark: the Pittsfield Building, a worn Art Deco tower next to Millennium Park that's been tied up in court. The owner of the upper and lower floors, Morgan Reed Group, has hired brokers to sell its space in an auction at the end of the month. Morgan Reed cut a deal to sell the space—floors 1 through 12 and 23 through 40—for $36 million in 2015, but the transaction fell apart and the firm wound up fighting in court with the prospective buyer, a venture led by San Antonio developer Adam David Lynd. Now, after the dismissal of the lawsuit in November, Miami Beach, Fla.-based Morgan Reed aims to find another buyer. The firm has hired Chicago-based Imperial Realty and Ten-X, an auction house in Irvine, Calif., to sell the property.” (Crain’s Chicago Business)
  10. With $32.2B Budget OK’d, LGA AirTrain Is a Go Though Controversy Hangs Over Bus Terminal “Port Authority of New York & New Jersey officials today pushed through its $32.2 billion capital budget, allocating early funds for highly-scrutinized projects including an AirTrain to the new LaGuardia Airport and a replacement Port Authority Bus Terminal in Manhattan. While approval of the 10-year spending plan has been hailed by infrastructure advocates, it has been a tension point between politicians on both sides of the Hudson River. A big source of that bad blood has been the proposed bus terminal and rail links to the area’s airports, which have been heavily debated inside and out of the bi-state agency. Those familiar with the Port Authority believe that while the capital plan gets the ball rolling on a slew of projects, construction of a new bus terminal on Manhattan’s West Side could still be years off.” (Commercial Observer)

 

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