- Construction Spending Eases in April After Robust Start to the Year “Spending on construction sagged in April as a strong start to the year started to falter. Construction outlays ran at a seasonally adjusted annual rate of $1.22 trillion, 1.4% lower than March, the Commerce Department said Thursday. Economists surveyed by MarketWatch had forecast a 0.5% increase in April. Meanwhile, a 0.2% decline in March was revised to a 1.1% monthly gain. Spending so far in 2017 is 5.8% higher than in the same period a year ago.” (MarketWatch)
- Commercial Real Estate Lending Growth Remains Strong Despite Fed Rate Hikes “The Fed’s ongoing interest rate hike process has had a negative impact on the rate of loan growth across U.S. banks over recent months, with fewer individuals and enterprises adding fresh debt at the higher interest rates. While this trend is most visible for the commercial and industrial loan category, commercial real estate lending activity has bucked this trend to grow at a faster rate than any other loan category.” (Forbes)
- Payless Shoe Set to Close Up to 408 More Stores “Payless ShoeSource is looking to make another large round of store closings not even two months after seeking to reorganize under bankruptcy protection. The retailer is asking federal bankruptcy court in St. Louis, Missouri for permission to close 112 stores outright and potentially up to another 296 stores if Payless can't get a break on rent from landlords, according to court papers. If all these stores close, Payless will have shuttered 800 stores, or about 20% of its pre-bankruptcy fleet, including the closings underway.” (Fortune)
- Feds Claim This Midtown Property is a Front for the Iranian Government “One of Manhattan’s hottest properties, 650 Fifth Ave., is secretly controlled by the Iranian government in violation of US sanctions, government lawyers told a Manhattan federal jury Tuesday. ‘The building . . . has for years been used to provide illegal services to the government of Iran,’ Assistant US Attorney Martin Bell said on the first day of the trial. The feds want the jury to give them control of the 36-story tower.” (New York Post)
- Up to 25% of U.S. Shopping Malls May Close in the Next Five Years, Report Says “Between 20% and 25% of the nation’s shopping malls will close in the next five years, according to a new report from Credit Suisse that predicts e-commerce will continue to pull shoppers away from bricks-and-mortar retailers. For many, the Wall Street firm’s finding may come as no surprise. Long-standing retailers are dying off as shoppers’ habits shift online. Credit Suisse expects apparel sales to represent 35% of all e-commerce by 2030, up from 17% today.” (Los Angeles Times)
- Bleecker Street’s Swerve from Luxe Shops to Vacant Stores “During its incarnation as a fashion theme park, Bleecker Street hosted no fewer than six Marc Jacobs boutiques on a four-block stretch, including a women’s store, a men’s store and a Little Marc for high-end children’s clothing. Ralph Lauren operated three stores in this leafy, charming area, and Coach had stores at 370 and 372-374 Bleecker. Joining those brands, at various points, were Comptoir des Cotonniers (345 Bleecker Street), Brooks Brothers Black Fleece (351), MM6 by Maison Margiela (363), Juicy Couture (368), Mulberry (387) and Lulu Guinness (394). Today, every one of those clothing and accessories shops is closed.” (The New York Times)
- Amazon Continues to Bolster Distribution Fleet “Amazon is preparing to expand its fulfillment capabilities in Georgia. The online giant will open a new 850,000-sq.-ft. distribution center in Jefferson, Georgia. The facility will employ 1,000 full-time employees. The fulfillment center will pick, pack and ship large items, including household furniture, sporting equipment and gardening tools, among other merchandise. The facility will be the second in Georgia’s Jackson County, and the fourth in the state.” (Chain Store Age)
- City Slaps Forest City with Lawsuit Over Times Square Ground Lease “The city has filed suit against developer Forest City Ratner over the terms of a ground lease for an entertainment complex the developer operates on West 42nd Street. Forest City and the city are at loggerheads over whether or not, in determining the terms of the lease, the rents being paid by sublease tenants in the space should be taken into account. Forest City says they should, while the city claims the value should be determined by current market conditions rather than old leases.” (The Real Deal)
- Daikin Brings Cool $417M Campus to Houston “Daikin Texas Technology Park in Waller County, about 40 miles from Houston, features a 4.2 million-square-foot building, the largest tilt-wall structure in the world and the second largest manufacturing facility in North America. The 90-year-old Japanese company began construction in March 2015. The plant will support the design, engineering and assembly of a wide variety of heating and cooling products for residential and commercial use that carry the Daikin, Goodman and Amana brand names.” (Commercial Property Executive)
- Stressed Retailers Like J.Crew Are Doing Something Unusual to Manage Debt “A move by preppy retailer J. Crew to manage its more than $2 billion debt burden may be the start of a worrisome trend. Moody’s warned Thursday that secured lenders are being put at risk of losses by stressed retailers that are seeking to transfer assets to subsidiaries that are unrestricted by their credit agreements. Retailers, including J. Crew, Claire’s Stores and Neiman Marcus, have recently moved assets such as intellectual property and stores to unrestricted subsidiaries, so they can raise fresh debt backed by those assets. But they are effectively stripping collateral from their secured lenders and hurting the recovery value of their loans in a bankruptcy scenario.” (MarketWatch)
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