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10 Must Reads for the CRE Industry Today (June 15, 2017)

Qatar Investment Authority, a significant global real estate investor, might be funneling the profits to terrorist organizations, according to Forbes. Google is investing in 300 modular apartment units for its Silicon Valley workforce, reports the Wall Street Journal. These are among today’s must reads from around the commercial real estate industry.

  1. Economists Say Fed Balance Sheet Reduction Could Come as Early as July “Economists have pulled forward their expectations of when the Federal Reserve will begin to wind down their balance sheet in the wake of the Wednesday meeting. Fed Chairwoman Janet Yellen said the process could begin ‘relatively soon.’ Steve Stanley, chief economist at Amherst Pierpont, said the Fed will announce the winding down of their portfolio at the next meeting in July. He said the central bank will use meetings without press conferences to keep the discussion away from the Fed’s interest-rate policy tool.” (MarketWatch)
  2. Ambassador to U.S. Links Qatari Real Estate Investment to Terrorism “Over the past decade Qatar, mainly via the Qatar Investment Authority, has been the ultimate big-game trophy hunter in global real estate. But its massive overseas real estate investment programme is likely to be on hold for now. The country will be concentrating its time and money on ensuring its domestic economy is not affected by the row with its Gulf neighbours over whether a ransom payment of $1B was a front to fund terrorist organisations. And now one of these countries has brought into the open the question of whether places like the U.S. and U.K. should welcome investment from a state it says is funding terrorism and promoting extremism.” (Forbes)
  3. Google Will Buy Modular Homes to Address Housing Crunch “Soaring home prices and apartment rents in Silicon Valley have become a growing headache for technology titans. Google owner Alphabet Inc. is taking a step toward addressing the issue. The Mountain View, Calif., company is finalizing an order to buy 300 apartment units from Factory OS, a modular-home startup, in a building likely to serve as short-term housing for Google employees, according to executives.”  (Wall Street Journal, subscription required)
  4. Five Tips for Starting a Commercial Real Estate Brokerage Firm “I started my first brokerage firm in 2005 after being a successful broker of apartment buildings for eight years. I currently own three real estate companies all related to multifamily properties (two brokerage, one technology). I wish someone had given me some advice and/or tips on the business of brokerage — or that I had been smart enough to ask. Instead, I’ve taken some hard knocks by learning the difference between brokerage and the business of brokerage. I hope the following tips are helpful to you.” (Forbes)
  5. The Shelf Life of John Mackey “I had asked to spend some time interviewing Mackey several weeks before the Jana Partners crisis erupted. The company had surprised the business world last November when it announced that 25-year Whole Foods veteran Walter Robb—who had shared the CEO role with Mackey for six years—would be stepping aside, making Mackey the sole CEO. Mackey, in the co-CEO role, had acted less as a traditional executive and more as a kind of spiritual leader, with Robb handling more of the day-to-day matters. By January, the founding-father-philosopher was running things alone, which made some investors nervous.” (Texas Monthly)
  6. Commercial, Multifamily Mortgage Debt in U.S. Tops $3 Trillion “According to the Mortgage Bankers Association, the total commercial/multifamily debt outstanding in the U.S. rose to $3.01 trillion at the end of the first quarter of 2017, the first time it has broken the $3 trillion mark.  Multifamily mortgage debt outstanding rose to $1.17 trillion, an increase of $23.4 billion, or 2.0 percent, from the fourth of quarter of 2016.” (World Property Journal)
  7. 5 Tips for Real Estate Crowdfunding “Industry insiders say investors can expect annual returns of 8 to 12 percent, but critics warn of high risks as some firms may cut corners in their scramble for market share. One of the industry's big names, RealtyShares, currently offers a number of opportunities with handsome projected returns if all goes as planned, such as 9.5 percent on a Church's Chicken restaurant in Huntsville, Alabama, 11 percent on a single-family home in Jacksonville, Florida, and 14 percent on a home being built in Los Altos Hills, California.” (U.S. News & World Report)
  8. Architect Claims Firm Stole One World Trade Center Design “A Georgia-based architect says the ​prominent architectural firm behind One World Trade Center ripped off a design he created as a graduate student​ ​in 1999. Jeehoon Park sued architectural firm Skidmore, Owings & Merrill in Manhattan federal court ​Wednesday ​for unspecified damages, saying the firm has unfairly taken credit for the lower Manhattan tower​, the tallest in the Western Hemisphere,​ despite its ‘striking similarity’ to a multi-sided glass structure he created while studying at the Illinois Institute of Technology in Chicago.” (New York Post)
  9. Boston Revitalization Project Moves Forward “Construction on the first phase of a $1 billion mixed-use development plan in Union Square in Somerville, Mass., should begin next year now that the city’s Board of Aldermen has approved a rezoning plan for the project. The zoning approval, which took about three years with community input, sets the stage for the strategic, long-term growth of 2.3 million square feet of new mixed-use, transit-oriented development in the Boston suburb that will be part of a $2.3 billion extension of the Massachusetts Bay Transportation Authority’s Green Line light rail system.” (Commercial Property Executive)
  10. Expert Insight Into Meeting Students’ High Expectations “Remember when student housing was just a step up from a run down tenement? I personally remember a ton of painted concrete, lots of stairs and not having air conditioning. I guess it was a motivator to go home for the summer. Today, things are different. Very different. Student housing has evolved into Ritz-Carlton-esque suites with high-end amenities everywhere, from valet trash service to pet walking to cleaning services. It’s redefining how students live and certainly redefining their expectations.” (Multifamily Executive)
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