10 Must Reads for the CRE Industry Today (December 23, 2014)

10 Must Reads for the CRE Industry Today (December 23, 2014)


  1. DBRS to be Sold to Carlyle, Warburg for $500 Million “DBRS Ltd., the world’s fourth-largest credit rating company, has agreed to be acquired by the Carlyle Group (CG) and Warburg Pincus for about $500 million, according to people familiar with the sale. The headquarters of closely held DBRS, which has offices in New York, Chicago and London, will stay in Toronto, and Walter Schroeder, the firm’s founder, will remain an investor, the companies said in a statement today.” (Bloomberg)
  2. EMEA Property Investment Forecasted to Spike 20 Percent in 2015 “Investment volumes in EMEA are forecast to increase 20 percent next year to €247 billion ($300B USD) from an estimated €206 billion ($250B USD) this year.  Demand is already strong but with fund allocations still increasing, occupational markets stirring in many cities and finance markets growing more competitive, markets will be even more liquid in 2015. What is more, short-term concerns such as stock market volatility, fears of deflation and limited economic growth could all point to yet stronger demand for property due to its relative yield and risk profile.” (World Property Journal)
  3. American Apparel Eyes Takeover, Adopts Poison Pill “Struggling American Apparel, which fired controversial chief executive Dov Charney last week, said it was evaluating a proposed takeover and announced the appointment of a new head of the board, sending its shares up in early trade. The clothing retailer and manufacturer said the proposed offer — from a party it did not identify — was pitched at $1.30 to $1.40 per share, which would value the company at $226 million to $243 million.” (New York Post)
  4. Former CAO’s Suit against ARCP Could Shake Up Non-Traded REIT Sector “In this case, of course, the company, after a period of meteoric growth, is beleaguered on other fronts as well, and other events since McAlister’s departure might be seen as bolstering her side of the story. Those other factors add extra gravitas to this affair, and so does the particular circumstances of just how entangled recently departed ARCP executive chairman Nicholas Schorsch is in the whole public non-traded REIT industry, says a long-time REIT consultant and blogger.” (Commercial Property Executive)
  5. $900M Wanda Vista M-U Project Becomes Reality “The Wanda Vista project was first revealed in July 2014, and called for a mixed-use hotel, condominium and retail building at the intersection of East Wacker Drive and N. Field Blvd. in Chicago’s Lakeshore East neighborhood. The Wanda Group plans to invest $900 million in the project, making it the largest-ever real estate investment by a Chinese company in Chicago.” (Commercial Property Executive)
  6. Mortgage Rates to Rise 1.5 Percentage Points During 2015, Amid Looming Fed Rate Hike “Rates on 30-year fixed mortgages are expected to jump to 5.4% during the fourth quarter of 2015, the National Association of Realtors says, amid the expectation of tightening monetary policy next year from the Federal Reserve. They currently stand at just under 4%. TheStreet's Scott Gamm speaks with Lawrence Yun, Chief Economist with the National Association of Realtors, who says he'll be looking for increased construction of new homes as a sign the housing market is fundamentally strong.” (TheStreet)
  7. Pacific Northwest Grocery Chain Buying 11 Stores in O.C. “Eighty-three California grocery stores, including 11 in Orange County and five in the Inland Empire, are getting a new owner. Haggen Food & Pharmacy, a Pacific Northwest retailer, announced its intent Friday to purchase 146 Albertsons and Safeway stores in Washington, Oregon, California, Nevada and Arizona. Terms were not immediately disclosed.” (Orange County Register)
  8. Carried Interest Transfer Valuations “Carried interest transfers raise particularly difficult valuation issues, including: (1) establishing expected returns and discount rates for instruments that rarely “trade” in comparable transactions; (2) properly applying option-pricing frameworks; and (3) distinguishing between the income attributable to a key person and that attributable to the business of the fund.” (Wealthmanagement.com)
  9. Spin Doctors: Real Estate “It seems one of the most prominent trends in the business world is that of consolidation. Over recent decades, we have seen car companies absorb other car manufacturers, tech companies like Facebook have absorbed smaller start-ups like Instagram, and even so-called "boutique" or independent hotel operators like Joie de Vivre, Thompson, and most recently Kimpton Hotels & Restaurants have merged or will soon merge with other corporate entities.” (Seeking Alpha)
  10. Victor Homes Pitching NoMad Tower to EB-5 Investors: Report “Victor Homes is reportedly shopping a 51-story Rafael Viñoly design for a condominium tower at 281 Fifth Avenue to foreign investors. Massing diagrams revealed to potential EB-5 investors show a cantilevered design to rise at the corner of Fifth Avenue and East 30th Street, in the NoMad section of Midtown South, according to New York YIMBY.” (The Real Deal)
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