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10 Must Reads for the CRE Industry Today (December 24, 2014)

10 Must Reads for the CRE Industry Today (December 24, 2014)


  1. Real Estate Seen Winning as Builders Lose Among U.S. Surge “Investors who put their money in a fund (VNQ) devoted to real estate investment trusts have racked up gains of 65 percent, while investors in homebuilder stocks still haven’t recovered from the housing crash even after the U.S. economic rebound. The gap will probably endure for years as U.S. job growth spurs demand for office, retail and apartment properties faster than Americans can buy new houses.” (Bloomberg)
  2. Another Big One: Vornado Sells Manhattan’s 1740 Broadway for $605M “Manhattan continues to lead the pack as the town with the biggest big-ticket office transactions in the U.S. as the 600,000-square-foot building at 1740 Broadway fetches $605 million, or roughly $1,000 per square foot. Vornado Realty Trust was the seller. Blackstone Group L.P. is the new owner.” (Commercial Property Executive)
  3. Safeway Real Estate Unit Sold for $830M “Safeway said it has completed the sale of its real estate development assets to Terramar Retail Centers. The assets, owned by Safeway’s wholly owned subsidiary Property Development Centers, sold for approximately $830 million, subject to certain adjustments.” (Supermarket News)
  4. Family Dollar’s Delayed Vote Could Mean another Bid from Dollar General “Dollar General was gaining 0.9% to $69.30 on the news while Dollar Tree was adding 0.7% to $69.57. Family Dollar was up 0.3% to $79.34. The holdup of the sale of Family Dollar comes after proxy adviser Institutional Shareholder Services recommended the company's board delay the deal vote yet again. ISS suggested the delay could ultimately result in a higher offer for the company. At an Ebitda multiple of 11 times, both bidders are already taking on a richly priced asset in Family Dollar.”  (TheStreet)
  5. Pierce-Eislen: M-F Rent Growth Still Strong in 2015 “Rent growth at multi-family properties across the United States in 2015 is expected to increase 4.5 percent for Class A and B+ assets and 5.1 percent for Class B and C assets, with some technology-heavy Western markets seeing spikes as high as 9 percent. The 2015 Rent Forecast & Outlook report for the U.S. multi-family sector prepared by Pierce-Eislen noted that next year’s estimated rent growth is lower than last year’s average of 5.9 percent.” (Commercial Property Executive)
  6. Prices Rise for Properties Catering to Seniors “The income from the properties translates to an initial yield in the low 6% range, according to an estimate by Daniel Bernstein, an analyst with Stifel Nicolaus & Co. Average yields on comparable properties—known as capitalization rates—have fallen from about 6.3% a year ago to about 5.8% today, according to Green Street Advisors, a sign of rising prices.” (The Wall Street Journal)
  7. Starwood’s Sternlicht Returns to Hotel Operations “On a rainy December afternoon, real-estate investor  Barry Sternlicht  was in his element, surveying the gilded interiors of his soon-to-open  Baccarat  hotel in Manhattan while telling staff what they did wrong. Not only does the Baccarat venture mark Mr. Sternlicht’s return to the operations side of the hotel business after nearly a decade in private equity, but he is also on the cusp of making history. Starwood is in advanced discussions to sell the 114-room property for more than $200 million, or about $2 million a room, according to people familiar with the negotiations.” (The Wall Street Journal)
  8. American Apparel Could Be a Potential Acquisition for Macy’s or Target “American Apparel recently received a bid from private equity firm Irving Place Capital to the tune of $1.40 a share, which would value the clothing retailer at about $244 million. However, American Apparel could also be an acquisition target for cash-rich retailers like Target or Macy's. Although the cultures would not fit at first, the executives of either big retailer could provide the discipline necessary for American Apparel to reach its potential as a global brand. Having American Apparel under their wing could help the declining same store sales both retailers have been facing.” (TheStreet)
  9. Aby Rosen Puts 757 Third Ave. on the Block “Rosen has said that his firm transformed the 500,000-square-foot office tower into a “compelling alternative for tenants seeking quality space near Grand Central,” according to Rosen expects to get close to $800 per square foot for the building, which would work out to around $400 million. Eastdil Secured is marketing the property, according to the website.” (The Real Deal)
  10. What Top Miami Developers Predict for Their Market in 2015 “We asked top developers in Miami what they see happening in the real estate market in 2015. Here’s what they had to say: Ronald Krongold, CEO of Gold Krown Financial: ‘I think in 2015, [the market] is going to slow down. A six-month supply is normal. When you start to reach seven, eight, nine month supplies, that’s way too long because there are so many units and they’re so high-priced. The economies where most people are buying from are not doing well.’” (The Real Deal)
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