Toys R Us Mario Tama / Getty Images

10 Must Reads for the CRE Industry Today (September 19, 2017)

Toys ‘R’ Us has filed for Chapter 11 bankruptcy, reports the New York Post. Forbes looks at the possibility of another Fannie and Freddie bailout. These are among today’s must reads from around the commercial real estate industry.

  1. Toys ‘R’ Us Officially Files for Bankruptcy “Toys “R” Us filed for bankruptcy on Monday, becoming the latest victim in a retail industry rocked by online shopping and discount chains. The Chapter 11 filing is among the largest ever by a specialty retailer and casts doubt on the future of the company’s approximately 1,600 stores and 64,000 employees.” (New York Post)
  2. Builder Confidence Slips in September on Worries about Labor, Materials Availability “Builder confidence in the market for newly built single-family homes dropped in September, on worries that the recent hurricanes will make it difficult to find workers and materials. The National Association of Home Builders/Wells Fargo housing market index fell 3 points to 64, and August’s reading was downwardly revised by a point. ‘The recent hurricanes have intensified our members’ concerns about the availability of labor and the cost of building materials,’ said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas, in a statement.” (MarketWatch)
  3. Playing Russian Roulette with the U.S. Housing Finance System “Last month, Mel Watt, director of the Federal Housing Finance Agency (FHFA), announced that the two mortgage giants, Fannie Mae and Freddie Mac, could require a federal bailout of as much as $100 billion in the event of an economic downturn. In fact, a bailout of these two institutions is inevitable as early as next year, if not sooner. The need for an emergency draw on the U.S. Treasury Department to fund these agencies, however, will have nothing to do with the financial health of either Fannie Mae or Freddie Mac.” (Forbes)
  4. Walgreens Again Trims Deal for Rite Aid but Finally Gains Approval “Walgreens Boots Alliance Inc. received regulatory approval for its deal to buy thousands of stores from Rite Aid Corp., but only after the number of stores to be purchased was again trimmed to allay antitrust concerns. Walgreens will now buy 1,932 Rite Aid stores for $4.38 billion, a far cry from the original $9.4 billion deal for about 4,600 stores, struck in 2015.” (Wall Street Journal, subscription required)
  5. Hurricane Irma Claims Filed in Florida Already Reach $2B “Just one week after Hurricane Irma’s rampage through Florida, storm-related insurance claims filed already reach an estimated $2 billion in losses, according to Florida’s Office of Insurance Regulation. A total of 335,347 claims have been filed through Sunday. That figure includes 243,473 claims from homeowners, as well as 19,283 from mobile homeowners. Commercial property owners have filed 9,945 claims. Another 555 claims are related to private flood insurance and 451 claims are tied to business interruption, according to insurance regulators.” (The Real Deal)
  6. First Bitcoin-Only Real Estate Transaction Completed in Texas “In a new and interesting twist, an entire real estate transaction has taken place via Bitcoin. In other words, you can now buy your house with Bitcoin…at least in Texas. The transaction was for the purchase of a newly built custom home, and the full purchase price was transferred to the seller/builder via Bitcoin. The seller then converted the coin into USD.” (CoinTelegraph)
  7. Here’s Why Flagship Stores for Retailers Like Apple and Starbucks Have Become Tourist Attractions “It’s common for people to plan vacations to pay a visit to world sites like the Eiffel Tower, the Tower of London or the Statue of Liberty. Some carve out time to visit an Apple Inc. store. And perhaps more will do so now that they’re ‘town squares.’ Retailers of all kinds are trying to make their bricks-and-mortar locations more appealing to shoppers to drive traffic through the doors. At a time when companies like Inc. have made e-commerce the most convenient way to shop, retailers aim to make the hands-on experience of going to a store worth the trip.” (MarketWatch)
  8. The REIT Trifecta: Cellular, Data and Logistics “Last week I had a chance to catch up with Evan Serton, REIT Portfolio Specialist with Cohen & Steers. He explained the reasons that technology, specifically e-commerce, has been a driving force for the performance for virtually all the REITs that benefit from the technology wave. Serton explained it as somewhat of a three-legged stool in which the Cell Tower REITs, Data Center REITs and Industrial REITs are all participating in a new type of commerce and are all driven by a new kind of demand.” (Forbes)
  9. A Down Payment with a Catch: You Must Be an Airbnb Host “Loftium, a service in Seattle, will provide prospective home buyers with up to $50,000 for a down payment, as long as they are willing to continuously list an extra bedroom on Airbnb for one to three years and share most of the income with Loftium over that time. ‘It’s for the people who don’t have the parents to help, or the high income to save while paying rent,’ said Ms. Zhang, who founded Loftium with Adam Stelle, another entrepreneur, and who has already had about 200 Airbnb guests in her townhouse. ‘They are just stuck trying to save for a decade or more before they give up.’” (The New York Times)
  10. Kohl’s Opens its Doors to Amazon’s ReturnsAmazon is growing its partnership with department store chain Kohl's. Earlier this summer, the two companies announced that Kohl's would begin selling Amazon devices, such as the Echo and Fire tablets, at 10 of its stores. On Tuesday, Kohl's said it will begin accepting returns at certain U.S. locations. The retailer will pack and ship eligible items — back to an Amazon fulfillment center — for free.” (CNBC)
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