10 Must Reads for the CRE Industry Today (June 9, 2016) Photo by Chris Lake

10 Must Reads for the CRE Industry Today (June 9, 2016)

 

  1. REIT Surprise: How Real Estate Crushed the Stock Pickers “A very boring stock-market event later this summer will provide a surprising answer to a perennial question: Why are most fund managers failures? The event is the creation of a new sector in the stock market. The winners here are real-estate investment trusts, which will become their own category, joining technology, health care, utilities and the like. REITs, which own commercial real estate and generate healthy dividends from the rents, will be split off from financial stocks, where they have held an awkward place alongside banks and insurers since these sectors were created in 1999.” (Wall Street Journal)
  2. The Sam Zell Indicator—Time to Get Out of Real Estate? “Even today, a decade after the fact, the leveraged buyout of Equity Office Properties Trust remains one of the largest of all time: $36 billion for nearly 600 office buildings in New York, Washington D.C. and dozens of the nation’s largest cities. But in late 2006, some wondered if the billionaire who sold the REIT was being a little rash. After all, the real estate boom was in full swing, and the S&P 500 was primed to hit new all-time highs. ;Is he cashing out too early?’ asked a Bloomberg headline when the deal was announced. We all know the answer, of course.” (ValueWalk)
  3. Non-Traded REITs: A Real Estate Investment Whose Time is Up “Investors are ‘about $50 billion worse off’ for putting money into more than 80 non-traded real estate investment trusts, or REITs, estimates Securities Litigation & Consulting Group in Reuters. The consultancy notes that it's difficult to amass data on these private funds, which have taken in about $116 billion from investors over the last 25 years. Their findings help explain why non-traded REITs are losing their luster.” (The Street)
  4. Capital Market Pullback May Take a Bite Out of Dallas-Area Real Estate Boom “The real estate business runs on money. Along with new jobs and population growth, you need a lot of moolah to pay for all that construction and investment — billions and billions of dollars in North Texas. So word of a slowdown in property market funding isn’t what industry members want to hear and could affect the number of construction cranes rising on Dallas’ skyline.” (Dallas Morning News)
  5. Real Estate’s New Land of Plenty “Land investing has always been big business and today, it's starry skies and high hopes for those who tackle it in new ways made possible by better information and business innovation. Those elements certainly haven't removed all risk, but they help investors reap what they sew in ways not possible a generation ago. One new wrinkle comes via investment crowdfunding through the Jumpstart Our Business Startups Act, which went into effect last month. For the very first time, it allows non-accredited investors to back private companies.” (U.S. News & World Report)
  6. These Five Areas of the U.S. Are Adding Jobs Faster Than Anywhere Else “If you live in the suburbs south of Nashville, Tenn., near Brigham Young University in Utah or just across the Washington, D.C. border in Virginia, you are in luck. Employment is rising faster in those areas than anywhere in the United States. A new government report shows that 308 of the nation’s 342 largest counties increased jobs from the fourth quarter of 2014 to the fourth quarter of 2015. Check out the counties with the fastest job growth.” (MarketWatch)
  7. 5 REITs the Smart Money Will Pile Into This Summer “REITs (real estate investment trusts) are finally starting to get the respect they deserve. As a result, a cool $100 billion is gearing up to chase these soon-to-be-hot issues! Since its 2004 inception, the Vanguard REIT Index ETF (VNQ) crushed the broader market – returning 192% including dividends versus just 89% for the S&P 500. The market gods have finally taken note. This September, Standard & Poor’s will give REITs their very own sector for the first time. Which means NOW is the best time to buy them.” (Forbes)
  8. Be Afraid: $56B in Maturing Loans Could Face Refinancing Troubles “News headlines have been dominated by retail giants’ woes since the recession, with Sears, J.C. Penney, Sports Authority, Macy’s and Aeropostale all announcing bankruptcies or store closures that have trickled down in the form of heavy losses for regional malls in secondary and tertiary markets. Of the $200 billion in commercial mortgage-backed security loans set to mature by the end of 2017, approximately 28 percent are backed by retail properties.” (Commercial Observer)
  9. New Life-Science Incubator to Open Next Year “The developer of the Alexandria Center for Life Science, a biotech campus on East 29th Street, is opening an incubator at the property for startups in the medical and pharmaceutical fields. Additionally, the firm said it is raising a seed fund of up to $25 million via its venture capital arm, Alexandria Venture Investments, to support fledgling firms. Alexandria Real Estate Equities is setting aside 15,000 square feet for the incubator, dubbed Alexandria LaunchLabs.” (Crain’s New York Business)
  10. Fairway’s $140M Reorganization Plan Gets Unanimous Thumbs-Up from Lenders “Fairway Group Holdings Corp., the parent company of Fairway Market, announced today that its reorganization plan received a green light from lenders, allowing the grocer to reduce its debt and emerge from bankruptcy with $50 million in cash. The plan was unanimously accepted by 100 percent of voting secured lenders, and sanctioned by Judge Michael E. Wiles of the Southern District of New York bankruptcy court.” (Commercial Observer)
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