10 Must Reads for the CRE Industry Today (June 24, 2016)

10 Must Reads for the CRE Industry Today (June 24, 2016)

 

  1. REIT investors fight back against CEO pay plansReal estate investment trust shareholders are turning up the heat on executive pay. Shareholders at four REITs, including General Growth Properties, have rejected pay plans in nonbinding votes this year, the Wall Street Journal reported. That’s up from just one plan that was rejected last year ‘The REIT industry as a whole has taken somewhat of a black eye because of a number of bad-acting, smaller companies that have not provided transparency at all,’ said John Roe, directory of advisory at the corporate-governance consultancy ISS Corporate Solutions. GGP’s investor vote came as a bit of a curveball because the company got approvals in the past three years.” (The Real Deal)
  2. REIT Rebound: Where Is Commercial Real Estate Headed? “Video: Steve Brown, American Century senior portfolio manager, discusses the outlook for REITs with Bloomberg's Vonnie Quinn and David Gura on ‘Bloomberg Markets.’” (Bloomberg)
  3. Pair of Chinese Firms Strike Deal to Trade 123 Mission for $255 Million “In another sign of the super-heated market for commercial property in San Francisco, one China-based company has agreed to sell 123 Mission Street to another Chinese investor for $255 million in cash, more than 30% higher than it paid for the 28-story office building in late 2013. The 346,000-square-foot office building in San Francisco’s South Financial District, formerly the Pacific Gas & Electric Building, is a 407-foot-tall structure constructed in 1986. The building is currently 95% occupied with 14 tenants, according to financial documents. The seller is an investment holding company and a wholly-owned subsidiary of Pacific Eagle Real Estate Fund, L.P., the vehicle for investment in U.S. real estate for Great Eagle Holdings Ltd., a Chinese real estate company listed on the Hong Kong Stock Exchange.” (CoStar Group)
  4. How Private Equity Went from Desperate to Dominating in Senior Housing “In the first quarter of 2016, private equity buyers finally got their foot in the door—and then some—after a period of being largely shut out of deals. ‘This was the quarter of private equity,’ CBRE National Senior Housing Executive Vice President Lisa Widmier told Senior Housing News. Private investment in senior housing has doubled since 2015, with private equity buyers involved in about 55% of senior housing transactions in the first quarter of 2016, according to data compiled by Real Capital Analytics and reported in CBRE National Senior Housing’s  “Senior Housing Market Insight” report for the first quarter of 2016. The jump is huge—and meaningful.” (Senior Housing News)
  5. Belay, Arc Capital Form JV to Focus on Millennial Market “Two Los Angeles-based firms—Belay Investment Group LLC and Arc Capital Partners LLC—have launched a joint venture focused on acquiring and repositioning up to $150 million of multifamily and retail properties in California and Texas. Known as ArcWest Partners, the joint venture will target value-add and opportunistic acquisitions in growing urban submarkets with strong millennial demand. The partners are considering numerous opportunities in both states. ‘While we are being extremely selective at this time in the recovery cycle, we are currently pursuing a $350 million pipeline of properties located primarily in Los Angeles and Houston,” ARC Capital Partners Managing Partner Neville Rhone told Commercial Property Executive. Belay’s investment comes from Belay Partnership Ventures II LP, a fund anchored by a $200 million commitment from the California State Teachers’ Retirement System (CalSTRS) and is targeting $500 million in equity.” (Commercial Property Executive)
  6. What’s next for Miami’s Design District? Gucci, an Estefan Kitchen, yoga “Miami’s Design District is set to add Gucci and a high-end Cuban restaurant by Emilio and Gloria Estefan, among other tenants, to its open-air, luxury-shopping hub. ‘Gucci is a big step forward for us in the luxury category,’ said Design District developer Craig Robins, whose partners on the still-under-construction area include L Real Estate, General Growth Partners and Ashkenazy Acquisition. ‘It’s a real tipping point and a statement about our progress.’ Gucci is set to open a flagship, 7,000-square-foot store in 2017. ‘Gucci has always represented great design and contemporary lifestyle,’ Gucci president and CEO Marco Bizzarri said in a statement. ‘We want to be where collectors, style influencers and cultural creatives come together, and in Miami that’s the Design District.’ Other new locations include Alexander Wang, Eres, Warby Parker, Cos, The Smile, Ahana Yoga Studio and Estefan Kitchen.” (The Miami Herald)
  7. Brooklyn industrial complex is being transformed into a major retail hub “Over the past three years, the owners of Industry City have spent $160 million renovating the sprawling former industrial complex in Sunset Park, Brooklyn, into a home for creative manufacturers, startups and artisans. Now a partnership between Jamestown, Belvedere Capital and Angelo Gordon is ushering the 6-million-square-foot waterfront property into its next phase—a retail hub. In recent months, the owners have invested $8 million in constructing a 1,200-foot-long public corridor, lined with retail space, that will run through the center of nine of the complex's 16 buildings. The corridor will span 37th to 33rd streets, between Second and Third avenues. The passageway, dubbed Innovation Alley, is slated to be completed next year. When it is finished, it will feature about 125,000 square feet of of new retail. Rents for the spaces range from $35 to $80 per square foot.” (Crain’s New York)
  8. A Building Boom in Boston “A digital ‘Twitter wall’ flashes trending neighborhood topics inside the lobby of a new high-rise in the theater district. A freshly built luxury building across town lures affluent young professionals with sunset yoga and hip-hop parties on the pool deck. Downtown, one of San Francisco’s best known restaurateurs, Michael Mina, will craft a new entree every month for residents of a sleek condo tower. And homeowners at a glass skyscraper set to open in 2018 will be able to sip cocktails in private ‘sky cabanas’ overlooking a rooftop pool. They may need to look out the cabanas’ glass walls to remember what city they’re in—Boston. Boston—a city with a Puritan back story and an ingrained suspicion of glitz, where a well-preserved Back Bay townhouse has long been the gold standard of top-tier real estate—is embracing the designer high rise. Shiny residential towers are sprouting up across Beantown’s once drab and neglected precincts, emblems of Boston’s boom and its growth as a bigger, more international city.” (The Wall Street Journal)
  9. Tech drives commercial real estate development across Idaho “Perhaps nothing symbolizes Idaho’s growing commercial real estate market as well as the Boise skyline, freshly reshaped with the new City Center Plaza and J.R. Simplot creative center known as Jack’s Urban Meeting Place. These striking new buildings make quite an impression. With City Center tenants like Boise State University and Clearwater Analytics and areas in JUMP named and dedicated for activities like ‘Inspire,’ ‘Share,’ ‘Move’ and ‘Play,’ it’s clear that nothing spurs development like innovation. In fact, these developments matter not just because of what they mean to Downtown Boise, but because they reflect the burgeoning statewide activity in the technology sector.” (Idaho Statesman)
  10. City investigates political events at Trump Tower “Is Donald Trump using Trump Tower for campaign events? That’s what city officials want to know, as they investigate whether the developer turned presidential candidate is inappropriately using the lobby of his Fifth Avenue tower for political use. The latest issue surrounds a 22-foot bench that is supposed be in the lobby of Trump Tower and available to the public. It has been missing for some time and on Thursday, city officials fined Trump $10,000 after representatives for the presidential candidate did not show up at a hearing. The bench was part of a 1970s deal Trump made with the city, in which the developer was permitted to add 210,873 square feet – or about 40 percent more space – to his 58-story Fifth Avenue tower. The default and fine resulted from a ‘scheduling error’ by one of Trump’s lawyers, Trump executive vice president Michael Cohen told the Wall Street Journal.” (The Real Deal)
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