10 Must Reads for the CRE Industry Today (January 8, 2016)

10 Must Reads for the CRE Industry Today (January 8, 2016)


  1. Macy’s Real Estate Plans Welcomed by Analysts after Disappointing Holiday Sales “Macy’s Inc. shares rose Thursday in a down market, after the company said it would cut costs by about $400 million and close 36 stores in early spring 2016, news that helped offset a steep decline in same-store sales in November and December and lowered fourth-quarter guidance. The 36 stores, along with four others that were closed in the final three quarters of 2015, account for about $375 million in annual sales.” (MarketWatch)
  2. Rising Interest Rates and Commercial Real Estate: A Primer “There has been much talk recently about what the Federal Reserve’s first interest rate hike since 2006 means for the U.S. economy as a whole. Here we take a look at the impact of rate hikes (current and future) on commercial real estate, examining first the prospective disadvantages and then the potential benefits. Figuring this out isn’t straightforward, as interest rate changes have multiple impacts on commercial real estate (CRE).” (Forbes)
  3. Windstream Spinoff CS&L Makes First REIT Strike, Acquiring PEG Bandwidth for $409M “Communications Sales & Leasing (CS&L) is acquiring competitive fiber provider PEG Bandwidth for $409 million, marking its first publicly announced deal as a real estate investment trust (REIT) company. The deal includes $315 million of cash, issuance of 1 million shares of the company's common stock, and the issuance of 87,500 shares of the Company's 3 percent Series A Convertible Preferred Stock.” (Fierce Telecom)
  4. George Soros: It’s Like the 2008 Financial Crisis All Over Again “Markets are approaching a meltdown similar to the global financial crisis in 2008, George Soros, one of the world's most successful investors, said. Soros on Thursday said China had ‘a major adjustment problem,’ according to a Bloomberg News report. Whether you agree that markets are on the cusp of a 2008-like collapse depends on how dangerous you think China's "adjustment problem" — essentially a problem of high debt and low domestic demand – really is.” (Business Insider)
  5. Why Saks Fifth Avenue Owner is Buying Gilt “HBC currently operates 90 Saks Off Fifth stores, with plans to open as many 25 new locations per year for the foreseeable future, putting the chain at the heart of its growth strategy. And while Saks Off Fifth already does sell online, Gilt Groupe will help it ramp up its online business much more quickly: HBC said the deal should add $500 million to its 2016 fiscal year sales and about $40 million in adjusted profit the following year.” (Fortune)
  6. Kite Realty CEO Sees REITs Focusing on Redevelopment “Asked whether REIT development pipelines will expand in 2016, Kite said he expects to see more redevelopment rather than ground-up development. ‘Most of the REITs have pretty strong portfolios, but they are looking to improve them,’ he said. Kite Realty, for example, has about $120 million of identified redevelopment projects that it is looking to start in the next 18 months. Kite pointed out that ground-up development is a little more difficult.” (REIT.com)
  7. Javits Getting $1B Expansion Amid Big Infrastructure Push “A day after he announced a lofty goal to essentially rebuild Pennsylvania Station, Gov. Andrew Cuomo has put forth an ambitious plan to expand the Jacob K. Javits Convention Center by more than half its current size. The Javits Center, which is controlled by the state-run Empire State Development Corporation, will foot the bill for the expansion, which Mr. Cuomo estimated will cost $1 billion.” (Commercial Observer)
  8. What’s the Deal? Did Stuy Town Break a World Price Record or Not? “In October, when news broke of the sale of Stuyvesant Town-Peter Cooper Village to the Blackstone Group and Ivanhoe Cambridge, most news outlets reported a sales price of $5.3 billion. This meant the deal had just fallen short of the most expensive single asset sale in history: the record $5.4 billion Tishman Speyer paid for Stuy Town in 2006. But recently, and quietly, news outlets like the New York Post and the New York Times have adjusted the price up to $5.46 billion.” (The Real Deal)
  9. Mandarin Oriental Looks to Finalize $140M Boston Hotel Buy “Mandarin Oriental International Limited reports it hopes to secure court approval sometime in the first quarter of this year for its $140-million acquisition of the Mandarin Oriental Boston hotel. The international hotel group has managed the 148-room hotel located at 776 Boylston St. since its opening in 2008.” (GlobeSt.)
  10. J.C. Penney Creamed Macy’s During the Holidays “While Macy’s pinned 80% of the blame for its poor numbers on an unseasonably warm winter, Penney faced the same conditions. That suggests that Penney’s efforts to fix its business are paying off and that it is winning back market share it lost to Macy’s, Kohl’s  KSS 1.08% , and many other retailers after a disastrous attempt four years ago to get fancier with a new product mix, pricing strategy, and look cost the company $6 billion in annual sales.” (Fortune)
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