10 Must Reads for the CRE Industry Today (November 11, 2015)

10 Must Reads for the CRE Industry Today (November 11, 2015)


  1. McDonald’s Decides Against REIT as It Focuses on Cutting Costs “McDonald’s Corp., the world’s largest restaurant chain, has decided not to create a real estate investment trust, a proposal touted by some investors as a way to unlock value from its massive property holdings. The company gave the idea of a REIT ‘serious consideration’ but is focused instead on reducing costs and regaining momentum, Chief Executive Officer Steve Easterbrook told investors at a meeting in New York on Tuesday. The company also is raising its quarterly dividend by 5 percent to 89 cents a share.” (Bloomberg)
  2. Future of Immigrant Visa Problem Has High-End Builders at Odds “The real-estate industry is splintering over a controversial program that has allowed developers of high-end towers to benefit from cheap financing thanks to immigrants seeking green cards. Critics say the program, a key piece of which expires on Dec. 11, has been overtaken by urban developers who are gaining from a provision meant to create jobs in economically ailing areas. In response, some property developers are trying to scale back this practice so as not to risk it ending completely.” (Wall Street Journal)
  3. Real Estate in Bliss While GDP a Miss “Slowing economic news in some quarters may have some nerves fraying, but commercial real estate (CRE) tells a somewhat happier story. Mortgages may be married to financial crisis in the minds of many Americans. However, while obviously linked, they’re not quite joined in holy matrimony… and CRE is in a far more blissful state, judging from where the smart CRE money, both debt and equity, is flowing.” (Forbes)
  4. Two Signs That the Market May Be Near a Top “As if rising geopolitical risks, rising interest rates and weak global growth isn't enough to worry about, there are signs that asset prices, broadly speaking, are getting toppy. Two cases in point … the art and real-estate markets. We are beginning to see evidence of toppiness in both the residential and commercial real estate markets in the hottest areas of the country. Real estate can top out and lead to trouble in other markets, particularly if interest rates begin to rise.” (CNBC)
  5. As Desire for Pricey Apartments Wanes, Developers of 432 Park Ave. Split Full-Floors Condos Into Two “The developers of 432 Park Ave. have split full-floor apartments at the 1,396-foot tall tower in half in a move that may signal a slowdown in sales for $50 million-plus apartments. With several other high-profile condo projects underway, sales at 432 Park Ave. have been closely watched as a bellwether for the super high-end segment of the city’s residential real estate market. There is some concern that there aren't enough buyers who can afford apartments priced in the tens of millions of dollars.” (Crain’s New York Business)
  6. Kroger to Buy Roundy’s “Kroger on Wednesday announced that it would buy Roundy’s Supermarkets for around $800 million in a deal that that will bring the largest U.S. conventional supermarket chain to Wisconsin and Chicago, where it will take over the innovative Mariano's banner. The all-cash deal, approved by the boards of both companies, will be financed with debt. The deal calls for Kroger to acquire all of Roundy’s shares for $3.60 per share, representing a premium of 65% to Roundy’s closing price Tuesday.” (Supermarket News)
  7. Albertsons Cooking Up a Strategy for Growth “A new project has the possibility of positioning Albertsons for greater growth as the company aims to expand by buying back some of the stores it unloaded last year as a result of a deal with Safeway. Albertsons has announced it has completed a $4.8 million renovation of the company's Culinary Kitchens & Technical Center in California. The project, which was in development before the Albertsons-Safeway merger was announced, came to fruition this month in a 33,000-square-foot facility in Dublin, Calif., near the company's Pleasanton corporate campus.” (Chain Store Age)
  8. 4 Things to Know About Real Estate Investments “If you own your home, should you buy real estate securities? It's a reasonable question because for many people, their home is a large portion of their overall wealth. A family with $500,000 in savings, including stocks and bonds, and a home valued at $300,000 would seem to be heavily invested in real estate. But that's probably not the best way to look at things – although your home may act as a store of wealth, history has shown it likely won't do much better than keep up with inflation.” (U.S. News & World Report)
  9. U.S. Commercial, Multifamily Mortgage Originations Up 12% Annually in Q3 “Based on the Mortgage Bankers Association's Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations, third quarter 2015 commercial and multifamily mortgage loan originations were 12 percent higher than during the same period last year and three percent higher than the second quarter of 2015. Increases in originations for retail and office properties led the overall increase in commercial and multifamily lending volumes when compared to the third quarter of 2015.” (World Property Journal)
  10. Macy’s Sales Disappoint, Explores Real Estate Options “Macy's said Wednesday that third-quarter profit and sales slipped and that it is examining real estate options for some of its most prized stores, including its Herald Square flagship in Manhattan. Profit dropped 46% to $118 million during the quarter ended Oct. 31, down from $217 million in the same period a year ago. Sales slipped 5% to $5.9 billion, missing Wall Street expectations of $6.1 billion.” (USA Today)
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