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10 Must Reads for the CRE Industry Today (July 6, 2017)

Federal Reserve officials haven’t agreed on whether to start unwinding the Fed’s balance sheet in September or December, reports The New York Times. Goldman Sachs has raised a $1 billion real estate investment fund, according to Forbes. These are among today’s must reads from around the commercial real estate industry.

  1. Fed Officials Split Over Timing on Reducing Debt Holdings “The Fed has said it wants to launch the balance sheet plan this year, but officials are divided between starting in September and waiting until December. The minutes of the June meeting said several officials wanted to start ‘within a couple of months,’ while others favored waiting. The Fed published the meeting account Wednesday after a standard three-week delay.” (The New York Times)
  2. Goldman Raised $1B for a Real Estate Fund, Putting 2007 Fail Behind It “It was the biggest blot on the copybook of the investment bank that came out of the credit crunch in better shape than any other. But Goldman Sachs has transformed its real estate business and is back raising huge amounts of capital to put to work in the sector. Documents filed with the Securities and Exchange Commission show that the investment bank has raised $1B for a new real estate fund, Broad Street Real Estate Credit Partners III.” (Forbes)
  3. Fed’s Powell Says Current U.S. Housing Finance System ‘Unsustainable’ “The US housing finance system continues to put taxpayers at risk in a market dominated by government-backed agencies, Federal Reserve Governor Jerome Powell said on Thursday, calling for further reform of an ‘unsustainable’ situation. A decade after doubts about the creditworthiness of mortgage-backed securities helped trigger the worst financial crisis since the Great Depression, systemic risk in housing remains given the concentration of mortgages in the duopoly of Fannie Mae and Freddie Mac, he said.” (Reuters)
  4. Cabela’s-Bass Pro Merger Gets FTC Blessing “The Federal Trade Commission on Monday notified Cabela’s that its proposed merger with rival Bass Pro Shops can proceed, according to a filing with the Securities and Exchange Commission. The deal must yet garner approval from Cabela’s shareholders, which the outdoor retailer is seeking at a special meeting scheduled for July 11. The similarities of the two retailers makes the merger at once rational and a target of careful scrutiny from regulators, Scott Wagner, an antitrust expert and partner in law firm Bilzin Sumberg’s litigation group, told Retail Dive last year.” (Retail Dive)
  5. Online Clothing Retailer Eloquii Ready to Open Brick-and-Mortar Stores “The unlikely journey of Columbus-based online retailer Eloquii is about to get even more unlikely. The plus-size fashion brand will go from ‘clicks to bricks’ by opening a store in September at Easton Town Center in a space once occupied by its former parent, the now-bankrupt the Limited. ‘If you would have asked us about four years ago if this would happen, we would have said you were crazy,’ said Julie Carnavale, chief merchandising officer.” (Columbus Dispatch)
  6. Natixis Issues First Green CMBS Rake Tranch Backed by 85 Broad Street “Natixis has issued the first “green” commercial mortgage-backed securitization rake tranche backed by 85 Broad Street. The issuance was oversubscribed after being met with strong demand from both U.S. and overseas investors, according to an announcement by the lender today. The $72 million green-specific tranche (the ’85 Broad Street Loan-Specific Certificates’), issued in collaboration with Ivanhoé Cambridge and Callahan Capital Properties, is part of the Credit Suisse-sponsored CSAIL 2017-C8 CMBS deal. The issuance refinances part of the $358.6 million fixed-rate, first mortgage loan that Natixis provided to Ivanhoé Cambridge.” (Commercial Observer)
  7. Group Uses New Tool to Press Ban on Tall Towers in East Midtown “The rebellion against super tall skyscrapers rising in New York City has found a new weapon: grass-root do-it-yourself zoning rules. The push, by opponents of a new 800-foot tall condo tower under construction on East 58th near the East River, has gained surprising bureaucratic traction during the past few months, despite potential opposition from City Hall.” (Wall Street Journal, subscription required)
  8. Kroger Sues German Grocery Chain Lidl Just Two Weeks After it Lands in the U.S. “Kroger is suing the German grocery chain Lidl over trademark infringement. In the lawsuit, Kroger claims that Lidl's private-label brand called ‘Preferred Selection’ too closely resembles Kroger's own house brand, ‘Private Selection.’ The close resemblance of the names will cause confusion for customers and allow Lidl to ‘compete unfairly’ with Kroger, because customers could assume that the two brands are associated with one another, the lawsuit states.” (Business Insider
  9. Harrison Street Opportunistic Fund Raises $1.1 Billion “Harrison Street Real Estate Capital LLC recently closed Harrison Street Real Estate Partners VI LP with a bang. Fund VI, Harrison Street’s sixth U.S. opportunistic real estate fund, surpassed its $850 million target by a long shot, reeling in a total of $950 million in equity commitments and raising an additional $205 million of equity capital in co-investment vehicles, for a total raise of approximately $1.15 billion. A lot can happen in a year; Fund VI launched in late July 2016. Like the real estate investment management firm’s previous five closed-end opportunistic funds, Fund VI focuses on investing in the education, health care and storage sectors.” (Commercial Property Executive)
  10. How Much is Nashville’s Greer Stadium Property Worth? Proposed Deal Under Scrutiny “A proposed lease deal to redevelop Nashville's Greer Stadium property is facing scrutiny from a top Metro Council critic of Mayor Megan Barry's administration who says the city's financial return wouldn't come close to matching the market value of Greer's 20-plus acres. But the mayor's office is firing back, saying the intent has never been to sell the city-owned land to the highest bidder, but rather to find the most appropriate uses for the neighborhood.” (The Tennessean)
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