barnes and noble

10 Must Reads for the CRE Industry Today (July 25, 2017)

Investor Sandell Asset Management Corp. is calling for a sale of Barnes & Noble, reports Reuters. SL Green Realty shareholders rejected CEO Marc Holliday’s $17.3 million compensation package, according to the Wall Street Journal. These are among today’s must reads from around the commercial real estate industry.

  1. Activist Investor Urges Sales of Barnes & Noble “Activist investor Sandell Asset Management Corp on Tuesday urged Barnes & Noble Inc. to sell itself, saying internet and media companies or private equity firms might be interested in buying the U.S. bookstore chain operator. Sandell, which said it had accumulated a ‘meaningful’ stake in Barnes & Noble, said the company could fetch a price of $12 per share or possibly higher in a "go-private" deal. Shares of Barnes & Noble, which had a market value of $514.8 million as of Monday, were up 17.6 percent at $8.35 in premarket trading.” (Reuters)
  2. Office Giant Smacked Down over Giant Pay Package “Shareholders of SL Green Realty Corp. this year for the first time rejected the office-building landlord’s 2016 compensation, saying it was too generous and wasn’t sufficiently aligned with investors’ interests. In a nonbinding say-on-pay vote in June, investors rejected the company’s 2016 compensation, which awarded SL Green chief executive Marc Holliday $17.3 million, the highest amount in the real-estate investment trust industry.” (Wall Street Journal, subscription required)
  3. Debt Ceiling Fears Bubble Up in Treasury Bills “The deadline to raise the federal government’s debt ceiling is approaching fast, and concerns are showing up at the short-end of the yield curve, a line that traces yields across maturities. The 3-month Treasury bill matures around the time when the Treasury is expected to run out of money unless Congress boosts the limit on federal borrowing. The Congressional Budget Office warned that if the U.S. did not hike its debt ceiling in time, it could lead to a defaults on its gold-plated debt.” (MarketWatch)
  4. U.S. Inflation Remains Low, and That’s a Problem “The United States has a problem: not enough inflation. That notion is a bit of a head-scratcher. Most people don’t like inflation. They would prefer that a dollar tomorrow be worth the same as a dollar today. But a recent drop in inflation may be a sign of fresh economic weakness and is perplexing to Federal Reserve officials who are now wrapping up the central bank’s stimulus campaign. The Federal Reserve thinks modest inflation has important economic benefits, and it has aimed since 2012 to keep prices rising at an annual pace of 2 percent.” (The New York Times)
  5. Building a Mortgage Meltdown for the Rental Market “Is the private sector allowed to do anything anymore? For nearly 80 years, Washington has subsidized homeownership — creating massive distortions both in house prices and in what neighborhoods look like. Now the feds will subsidize rental homes as well — expanding government control over even more of the economy. The American home-buying world doesn’t even resemble a free market.” (New York Post)
  6. We’re Reaching the Dangerous Ninth Inning for Commercial Real Estate “The ninth inning of a baseball game is often the point when all of the game’s story lines come to a head. Pitchers gun for strikeouts, batters swing for the fences and teams look to put a few more runs up on the board in the final moments. In the commercial real-estate business, we have a ninth inning as well. But ours is exciting for a different reason: Instead of the last moments of a well-played game, the ninth inning in real estate is defined by a last-minute flurry of activity before an overhyped, overpriced market finally flames out and falls back down to Earth.” (MarketWatch)
  7. U.S. Census Troubles Threaten Future Real Estate Development “Budget uncertainty has always been a fact of life with the census, but watchdogs believe if additional funding is not allocated, it could have a disastrous impact on the count in three years, which will trickle down to negatively impact a myriad of industries dependent on census data — including commercial real estate. Several federal departments, from the State Department to the General Services Administration, are dealing with reduced staffing and proposed budget cuts in Trump’s Fiscal Year 2018 budget. The U.S. Census Bureau is one of the departments in disarray.” (Forbes)
  8. Vornado Secured $500M Loan for 330 Madison Avenue “Vornado Realty Trust has secured a $500 million mortgage for 330 Madison Avenue in Midtown. The seven-year loan matures in August 2024 and has a fixed rate of 3.475 percent. It replaces a $150 million mortgage from German bank Landesbank Baden Wurttemberg. Vornado did not disclose the lenders on the new loan. Part of the proceeds from the financing will be used to repay the existing loan. Vornado, which owns 25 percent of the tower as part of a joint venture, will get an $85 million cut from the financing, according to a company statement.” (Real Estate Weekly)
  9. Inside Kushner Companies’ Murky Relationship with Rent Stabilization “Jared Kushner’s habit of not properly filling out paperwork began years before his tenure at the White House. In exchange for receiving a lucrative tax break on a rental building in Williamsburg, Kushner’s real estate firm was legally required to register the apartments as rent stabilized with a state agency. It did the first year. But the next year, it registered just five apartments. Then it failed to register any of the units.” (The Real Deal)
  10. Stream Realty Partners Sells Retail Center in Pearland, TX “The Center at Pearland Parkway is a multi-phase development completed in 2014. Located at 2650 Pearland Parkway, at the intersection with Farm to Market Road 518 and adjacent to an HEB grocery development, the asset is occupied by national tenants including Ross Dress for Less, T.J. Maxx, Petco and Palais Royal. Retail power center Pearland Parkway II was recently completed and offers additional anchor and in-line space opportunities, with cross access to HEB.” (Commercial Property Executive)
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