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10 Must Reads for the CRE Industry Today (October 31, 2017)

Sources say Jerome H. Powell will be appointed as the next Fed chair, reports The New York Times. Chinese government’s restrictions on overseas investment have made an impact on the global commercial real estate market, according to the Wall Street Journal. These are among today’s must reads from around the commercial real estate industry.

  1. Trump Is Expected to Pick Jerome Powell as Next Fed Chairman “President Trump is expected to nominate Jerome H. Powell as the next chairman of the Federal Reserve, replacing Janet L. Yellen, whose term expires early next year, according to two people familiar with the plans. Mr. Powell, a Fed governor since 2012, is a Republican with deep roots in the party’s establishment and in the financial industry. He has steadily supported Ms. Yellen’s approach to monetary policy and financial regulation, creating an expectation that he would be unlikely to attempt large or sharp changes in the Fed’s course.” (The New York Times)
  2. House Reportedly Considering Phasing In Corporate Tax Rate Reduction “Republicans are considering a gradual lowering of the corporate tax rate in its reform plan, according to a Bloomberg News report. The report sent the Dow Jones industrial average down more than 80 points at one point, according to traders. ‘House tax writers are discussing a gradual phase-in for the corporate tax-rate cut that President Donald Trump and Republican leaders want - a schedule that would have the rate reach 20 percent in 2022,’ the report said, citing a member of the chamber's tax-writing committee.” (CNBC)
  3. Chinese Property Shopping Spree Fades as Beijing Hits the Brakes “China’s controls on capital outflow are putting a chill on some global commercial real-estate markets. Since late 2016, policy makers in Beijing have been tightening restrictions on overseas investments and scrutinizing some of the country’s most ambitious deal makers, voicing concerns that deals in certain sectors were disguises for capital flight into havens.” (The Wall Street Journal, subscription required)
  4. $60 Million Loan Is Sears’ 3rd Time Tapping CEO’s Pockets This Month “Sears Holdings has borrowed millions of dollars from affiliates of its CEO for the third time this month. The struggling Hoffman Estates-based retailer disclosed a $60 million loan in a regulatory filing Monday. Earlier this month, Sears borrowed $100 million from affiliates of Sears CEO Edward Lampert’s hedge fund, ESL Investments. ESL agreed to lend up to $100 million more by Dec. 1 if Sears identified additional collateral to secure the loan.” (Chicago Tribune)
  5. Uber Might Make More Money This Year Selling Real Estate in Oakland Than Actually Selling Rides “Uber looks like it’s on track to make more money selling a building it owns in Oakland, California, than it has selling rides over the last 10 months. In 2015, Uber bought the old Sears building in downtown Oakland with the intention of moving 3,000 of its employees to an expanded headquarters in the smaller, less–filthy-rich city just across the Bay from San Francisco, which the company currently calls home.” (Slate)
  6. Why Are Millennials Moving to These Small Towns? “Big cities and their big employers have always attracted young workers, and that’s still true. But a combination of factors—sky-high home prices chief among them—have sent millennials across the country looking for alternatives. Unlikely places like Ohio and North Dakota have benefited. In six U.S. cities, millennials actually make up more than half of home buyers. Some of these places are so small they aren’t even served by an interstate highway. El Paso is the largest, with a population of 683,080. Here are the top 11 cities that millennials are moving to, according to Ellie Mae.” (MarketWatch)
  7. Waldorf Astoria Set to Finally Begin Massive Renovation “The unsettling silence that has fallen over the Waldorf Astoria will soon be broken — by a bunch of construction noise. The historic Park Avenue hotel, which has been shuttered since March awaiting a massive $2 billion renovation, has finally hired a demolition crew to begin the project next month, The Post has learned. Insiders say Hilton Hotels, which operates the Waldorf and owns the rights to its name, has been sweating bullets lately as Anbang, the Chinese insurance giant that owns the 86-year-old landmark, has stayed stonily silent after boarding up the building in March.” (New York Post)
  8. Commercial, Multifamily Originations in U.S. to Go Flat in 2018 “The Mortgage Bankers Association (MBA) projects commercial and multifamily mortgage originations in the U.S. will increase in 2017, ending the year at $515 billion, up 5 percent from the 2016 volumes. Yet, the MBA also expects volumes to remain at roughly that level in 2018. MBA forecasts mortgage banker originations of just multifamily mortgages at $235 billion in 2017, with total multifamily lending at $271 billion. After strong growth in 2017, multifamily lending is expected to slow slightly in 2018.” (World Property Journal)
  9. There May Be Fewer ‘Last-Minute Shoppers’ This Holiday Season, Survey Finds “It's still October, but Christmas is quickly approaching, and so are retailers' all-important holiday sales. This year, more Americans are expected to begin their holiday shopping in the middle of the season, or Thanksgiving weekend, as opposed to late in the season, or early December, a new survey from NPD Group has found. This marks the first time the research firm has noticed such a drastic shift forward in shoppers' spending timelines during the November and December months.” (CNBC)
  10. ‘I Am Never Moving Again’: Why Americans Are Staying in Their Homes for Longer “But now Americans are staying longer than ever, in large part because of the stagnation in the housing market since the bubble burst. Many Americans lost too much equity in their homes to make it worth moving – and there aren’t enough properties to buy. It's also due to tighter mortgage underwriting standards, and what Moody’s Analytics Chief Economist Mark Zandi calls ‘a broader decline in mobility’ throughout the economy.” (MarketWatch)
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