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

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


  1. All Not Right in Sears REIT Plan “Sears Holdings investors are too giddy about the money-losing retailer’s slow-motion breakup. Shares of Edward S. Lampert’s struggling store chain jumped 35 percent by early Friday afternoon on the news that it may create a real estate investment trust for many of its stores and lease them back. The move would raise significant cash, but shareholders, Mr. Lampert included, would finance the deal. And the prospects for the rump retailer remain pretty dim.” (The New York Times)
  2. Paramount Aims for Largest REIT IPO “Paramount Group on Thursday stated a price range for the 131 million shares it plans to offer for sale in what would be its first stock offering as a REIT. At between $16 and $19 per share, according to an SEC filing, the initial public offering could raise as much as $2.5 billion, making it the largest IPO by a REIT to date.” (GlobeSt.com)
  3. Coefficient of Variation: A New Way to Define Investment Risk “When the topic of risk management comes up, executives immediately think about business risk, while investors consider risk-adjusted returns. But few ever contextualize risk management as a tool to efficiently allocate capital. The foundation of risk management – the way in which risk is measured – is a calculation surrounding the spectrum of possible results. After all, an investment’s risk potential is defined by the volatility of the results. We can measure risk in absolute terms (standard deviation) or relative terms (beta). But there’s another way, too. For the sake of this piece, we’re going to discuss risk by using a lesser known metric: the coefficient of variation.” (Property Management Insider)
  4. The Strange Story Of America's Most Fought-Over Office Block “The property business, goes an industry proverb, is ‘a circle of men holding a revolver to each other's heads’. And, all too often, to their own, as Vicky Ward illustrates in her colourful history of America's most fought-over office block: the 50-floor General Motors Building on Fifth Avenue in Manhattan.” (Business Insider)
  5. London Gherkin Skyscraper to Be Purchased by Safra Group “Brazil’s second-wealthiest man is buying London’s Gherkin skyscraper, adding to a procession of cash-rich investors seeking to obtain office properties in the British capital. Joseph Safra, whose empire includes sole ownership of the Sao Paulo-based Banco Safra, agreed to acquire the conical office tower seven months after the previous owners lost control because of mounting debt, according to a statement today. Safra Group, a company he controls, will pay about 726 million pounds ($1.2 billion), a person with knowledge of the deal said.” (Bloomberg)
  6. FHA squeezing loans for condos despite surging demand “Call it the condo conundrum: Demand for condominium units is rising in many urban areas nationwide, according to new real estate industry estimates, yet mortgage financing is getting squeezed for entry-level condo buyers by a key federal agency. List prices for condos in major markets are rising faster than prices for single-family detached homes in the same area. Nationwide, condo sales are steadily taking away market share from traditional homes as suburban boomers downsize and other owners want to live closer to urban workplaces and center city attractions.” (The Los Angeles Times)
  7. Top developer says New York real estate market is a ‘bubble’ about to burst “A prominent real estate bigwig caused a stir Thursday by admitting that the New York City residential property market is a big bubble waiting to pop. ‘If real estate was a publicly traded company and I could short its stock, I would very happily short 57th Street,’ said Ofer Yardeni, CEO at real estate development firm Stonehenge Partners, referring to the stream of high-end towers popping up along 57th St.'s ‘Billionaires' Row.’” (New York Daily News)
  8. Boston College to launch Corcoran academic center for real estate study “Boston College on Thursday will launch the Corcoran Center for Real Estate and Urban Action, an academic center to teach students how to develop mixed-use housing communities and improve city neighborhoods. The center will be part of the Carroll School of Management and focus on developing undergraduate courses on real estate development and finance. It is named after its chief benefactor, Joseph E. Corcoran, founder of the Corcoran Jennison Companies, a Boston-based developer of mixed-income housing communities.” (The Boston Globe)
  9. Here's What The Manhattan Skyline Will Look Like In 2018 “You've probably read quite a bit already about Billionaire's Row, the set of seven sky-high luxury apartment buildings that will take root in midtown Manhattan over the next decade (allegedly without casting a shadow). This is just the (very tall) tip of the iceberg when it comes to the wide number of Manhattan skyscrapers that are in development. It's one thing to read about $130 million apartments—it's another thing to see just what an impact these obelisks will have on the Manhattan skyline.” (Gothamist.com)
  10. Delhaize Selling Bottom Dollar Food Locations to Aldi “Delhaize Group will sell Bottom Dollar Food's 66 store locations and associated lease liabilities to Aldi Inc., thereby exiting the U.S. food retail discount segment. Delhaize attributed the move to the company's strategy, unveiled in March, of focusing on its core operations in the traditional supermarket sector. The deal is expected to close in the first quarter of 2015 subject to customary closing conditions.” (Progressive Grocer)
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