10 Must Reads for the CRE Industry Today (February 28, 2017)

10 Must Reads for the CRE Industry Today (February 28, 2017)

 

  1. Number of Distresses U.S. Retailers at Highest Level Since Great Recession “The number of U.S. retailers ranked at the most-distressed level of the credit-rating spectrum has more than tripled since the Great Recession of 2008-2009 and is heading toward record levels in the next five years, Moody’s Investors Service said Monday. The rating agency is the latest to weigh in on the state of the sector, and has 19 names in its retail and apparel portfolio, 14% of which are now trading at Caa/Ca. That’s deep into speculative, or ‘junk,’ territory.” (MarketWatch)
  2. Trump’s Goal of 3% Economic Growth is Somewhat Unrealistic, Cramer Says “President Donald Trump's goal of 3 percent economic growth is somewhat unrealistic, CNBC's Jim Cramer said on Tuesday. In an interview with Fox & Friends that aired Tuesday morning, Trump said part of the money for a proposed increase in military spending would come from a revved-up economy. ‘If I can get that up to 3 percent or maybe more, we have a whole different ball game,’ he said. During his election campaign, Trump pledged to deliver 4 percent annual GDP growth.” (CNBC)
  3. Chinese Investors Dominate Asian Overseas Real Estate Investments in 2016—CBRE “Chinese investors accounted for almost half of the $60 billion in investments in overseas real estate last year by Asian investors, up sharply from 28% of the $62.4 billion in 2015, according to an announcement Tuesday by real estate services and investment firm CBRE Group. China’s investments in overseas real estate rose to $28.2 billion in 2016 from $17.6 billion the year before despite recent moves by China’s government to restrict outbound investments as a means of curbing the renminbi’s depreciation in currency markets, a CBRE news release said.” (Pensions & Investments)
  4. Consumer Confidence Hits 114.8 in February, Versus 111 Estimate “Consumers' assessment of current conditions in the U.S. increased in February, according to a monthly survey released on Tuesday. The Consumer Confidence Index hit 114.8 in February, according to data from The Conference Board, the highest since July 2001. Economist expected the Consumer Confidence Index to hit 111 in February, according to a Thomson Reuters consensus estimate. ‘Consumers rated current business and labor market conditions more favorably this month than in January,’ Lynn Franco, director of economic indicators at The Conference Board, said in a statement.” (CNBC)
  5. One of Donald Trump’s Oldest Friends Also Wants to Repeal Dodd-Frank “But Steve Witkoff, a man who has known Trump for over 30 years and who contributed to his campaign last year, says that it's about much more than a fiduciary rule here and a CEO pay ratio there. Witkoff says it's about refusing to accept that the U.S. economy has permanently slowed to a level that any pre-crisis administration would have considered unacceptable. ‘Dodd-Frank has effectively blocked out of the lending market those who need capital the most,’ Witkoff said in an interview with Fortune.” (Fortune)
  6. Unlike Other Retailers, Target Will Not Close 100s of Stores “Target will continue with its store closing plans, which usually includes shutting down 10 to 15 locations a year, but will shutter many fewer than competitors. Target discussed the number of closures at an investor event in New York on Tuesday. The announcement comes after the discount retailer posted fourth-quarter results that missed analysts' expectations earlier today. Target blamed the miss on rapidly changing consumer behavior as it competes with online rivals, such as Amazon and lower-food prices at Walmart and grocery stores.” (The Street)
  7. The Rapid Rise in Home Prices Isn’t Cause for Alarm, Says S&P/Case Shiller “Home prices continued to pick up steam in the last month of 2016, rising at a faster rate than seen in last two and a half years, fueled by low inventory and mortgage rates. On a national basis, single-family home prices increased by 5.8% in December, according to the S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions. That's up from 5.6% the month before.” (Forbes)
  8. Norfolk Investment Firm Sells Baltimore Apartments for $247 Million “An affiliate of Norfolk-based Harbor Group International has sold six apartment buildings in Baltimore for $247 million. The real estate investment firm said Monday that the sale price was nearly $50 million more than what it paid to buy and renovate the apartments in 2011. The company sold the properties, including the 808-unit Crosswinds at Rolling Road, to an affiliate of Pennsylvania-based Morgan Group.” (The Virginia Pilot)
  9. Third Avenue Price Drop Might Finally Curb Rash of Vacancies “There’s finally a price break in asking rents along uptown Third Avenue that might stem the rising tide of retail vacancies. The ‘ask’ for the big, two-level former Talbots store at 1251 Third Ave. at 72nd Street has been slashed from $1.8 million to $1 million a year for nearly 13,000 square feet, including 150 feet of wraparound corner sidewalk frontage, according to the property’s new leasing agent, Douglas Elliman’s Faith Hope Consolo.” (New York Post)
  10. Meridian Nabs $227M Suburban DC Office Campus “No stranger to multitasking, HFF recently played dual roles in the change of ownership of the 764,000-square-foot Tysons Metro Center office complex in Tysons, Va., just outside Washington, D.C.  Acting on behalf of Beacon Capital Partners, HFF sold the four-building, Class A property to Meridian Group for $227 million, and the commercial real estate and capital markets services provider also orchestrated $175 million in acquisition financing for the buyer.” (Commercial Property Executive)
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