10 Must Reads for the CRE Industry Today (July 26, 2017)

Data centers and cell towers are the most in-demand commercial assets right now, claims the Wall Street Journal. The New York Times looks at shared workspaces. These are among today’s must reads from around the commercial real estate industry.

  1. America’s Hottest Properties: Data Centers and Cell Towers “E-commerce has been blamed for the struggles of retail real estate, but is proving to be a boon for owners of data centers and cell towers. As more people consume digital content and make purchases online, landlords and owners of data centers and cell towers that house cables and beam data to smartphones are looking to expand faster.” (Wall Street Journal, subscription required)
  2. Shared Workspaces Spread, Mixing Styles and Services “Shared office space is no longer the province of just sole proprietors, start-ups and young professionals. Companies like WeWork have capitalized on the popularity of shared working areas, in which people and companies rent office space by the hour, day or month. Now other types of professionals are also taking advantage of shared spaces, empowered by technology that can make changing offices as easy as carrying a laptop from one room to another.” (The New York Times)
  3. Mall Owners’ Comp Cut Amid Retail Rubble “Turbulence in the retail sector is hitting executives working for the top mall companies where it hurts: in their wallets. Senior management teams at the country’s largest mall owners, including Simon Property Group Inc., GGP Inc. and Macerich, are taking cuts to their compensation as they navigate an industry beset with struggling retailers and increasing competition from online shopping.” (Wall Street Journal, subscription required)
  4. Fed to Stick to Plan for Rate Hike, Balance Sheet Selloff This Year “The Federal Reserve doesn’t want to leave any doubt: The central bank still plans to raise interest rates again this year and start to sell off its vast holdings of Treasurys and mortgage-related bonds. The Fed just plans to take its own sweet time doing so. That’s likely to be the takeaway this week after Chairwoman Janet Yellen and senior Fed officials convene in Washington to chart their course for the rest of 2017. They may tinker with their assessment of inflation after a sharp deceleration recently, but a major course correction is not in the cards.” (MarketWatch)
  5. The ‘NIMBYS’ Are Destroying Housing Opportunity for Entire Generation of Families “Policies that prevent new housing construction force residents to compete aggressively for a limited supply of homes. This has come at a heavy cost in places such as San Francisco County, where average monthly rents for a market-rate, three-bedroom apartment have soared to $4,613 today according to CoStar, a commercial real estate information and marketing provider based in Washington, D.C.” (CNBC)
  6. New York Underwater “When President Donald Trump announced in June that the United States would pull out of the Paris climate accord, New York developer Jonathan Rose sensed that something more than an environmental safety net was at stake. He saw retreating dollar signs. ‘Bottom line is, these are major economic opportunities,’ he said, referring to technologies that promote energy efficiency, such as electric cars and solar energy.” (The Real Deal)
  7. Manhattan Office Sales Gaining Traction in 2017 “According to Yardi Matrix and Property Shark, the Manhattan office market seems to be picking up steam as 2017 advances. The average price per square foot for office buildings trading in the borough is once again on the rise, even though the year's second quarter failed to reach previous Q2 levels in terms of total sales volume. No major office projects came online in the quarter, but various large developments are in the pipeline for Q3 and are likely to draw investor interest over the coming months.” (World Property Journal)
  8. TA Realty Sells $202M Mid-Atlantic Industrial Portfolio “Colony NorthStar has acquired a 2.8-million-square-foot, 20-property industrial portfolio located along the Interstate 95 corridor from TA Realty LLC, for $201 million. The properties in the portfolio are situated within the states of Maryland and Delaware, with the largest percentage being in the Baltimore metro area. ‘This transaction speaks to the effectiveness of our aggregation strategy, having built a premier portfolio of industrial assets in strong trade corridors on the East Coast,’ Tom Landry, TA Realty’s managing partner, said in a prepared release.” (Commercial Property Executive)
  9. This Pricey Piece of Real Estate Comes with a Subway Car “If $3.25 million sounds like a lot of rent for a 5,200-square-foot store — even on hot West 42nd Street across from One Bryant Park and down the block from the Knickerbocker Hotel — know that it comes with a unique amenity: an entire, graffiti-strewn, 1961-vintage New York City subway car. Not that tenants now looking at the vacant former Asics athletics and footwear space are clamoring to keep the car, which was the store’s design centerpiece.” (New York Post)
  10. Retail Has a Market Definition Problem “Retail is the modern-day equivalent of the 1960’s railroad industry. The industry has defined itself in the business of ‘selling stuff.’ You buy low, you sell high, and you deliver the goods as efficiently as possible in between. I’ve heard retailers define themselves this way, and I’ve defined it that way myself. But that is too narrow of a definition, and in fact, the digital transformation of retail is rapidly sucking any differentiation out of ‘selling stuff’ and turning the whole process into a commodity.” (Forbes)
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