10 Must Reads for the CRE Industry Today (November 19, 2015)

10 Must Reads for the CRE Industry Today (November 19, 2015)


  1. CMBS Market Starts to Get ‘Frothy’ as Valuations Rise “Voya Financial Inc.’s Christine Hurtsellers said she’s staying away from new issues of commercial mortgage-backed securities, echoing concerns from Federal Reserve officials and bond graders about loosening underwriting standards in the market. Soaring commercial real estate valuations have returned in some markets to levels not seen since before the 2008 financial crisis, according to a Moody’s property price index.” (Bloomberg)
  2. Four Trends That Are Reshaping the Commercial Real Estate Industry “As older systems break down, a wave of CRE tech companies that combine domain expertise with modern software expertise are building new tools for the industry. VCs have also taken notice: In the first half of 2015 over $90 million was invested in CRE tech companies. My own company Hightower is one of them. Through building this web-based leasing management platform and expanding to over 400 cities around the world, I’ve learned an incredible amount about the industry, how it’s developing and what it needs.” (Forbes)
  3. Construction Permits Drop 64%. Does That Mean the Building Boom is Over? “Developers are planning dramatically fewer residential units in the city, according to data released Wednesday by the U.S. Census Bureau. In September, real estate firms were granted permits to build a mere 824 housing units—a 64% decline from the same time last year and a 28% slip from August, the data showed. But despite the paltry results for the month, experts are still confident that 2015 will end up being a record year for residential construction.” (Crain’s New York Business)
  4. Renters Aren’t Saving to Buy a House “Looking across the vast spectrum of housing surveys today, most will claim that the majority of renters want to buy a home eventually. That may be, but they're not saving to do that. In fact, saving for a down payment to buy a house ranks fourth on their list of priorities, according to a survey conducted in October by Harris Poll for Freddie Mac, which helps fund loans to homeowners and apartment developers.” (CNBC)
  5. John Hancock Investments Launches Global Real Estate Fund “The goal of the John Hancock Global Real Estate Fund is to provide consistent long-term returns above the FTSE EPRA NAREIT Developed Index over time, within acceptable levels of risk. The Fund normally invests at least 80 percent of its net assets in securities of real estate-related issuers, which may include real estate investment trusts (REITs) and equity securities of real estate companies.” (PropertyFundsWorld)
  6. Staples’ Customers Take Dim View of $6B Office Depot Deal “Staples may need to “Make More Happen” to resolve antitrust concerns about its proposed takeover of closest rival Office Depot. Several of Staples’ big corporate customers have told government regulators in recent days that they aren’t satisfied with the company’s proposed asset sales to win regulatory approval, The Post has learned.” (New York Post)
  7. Wells Fargo Buying Office Condo at 30 Hudson Yards “Wells Fargo is buying commercial condominium space at the 2.6-million-square-foot 30 Hudson Yards office tower being developed by Related Companies and Oxford Properties Group, sources familiar with the deal confirmed. The San Francisco-based banking giant will take roughly half a million square feet divided between two sections of the 80-story tower, one person with knowledge of the deal told Commercial Observer. The purchase price and exact floors were not immediately disclosed.” (Commercial Observer)
  8. Federal Realty CEO Offers Advice to Next Generation of REIT Leaders “Don Wood, president and CEO of Federal Realty Investment Trust joined REIT.com for a CEO Spotlight video interview at REITWorld 2015: NAREIT’s Annual Convention for All Things REIT at the Wynn Las Vegas. Wood received the NAREIT Industry Leadership Award at REITWorld 2015. The award is presented annually to a REIT executive who has made a significant and lasting contribution to the growth and betterment of the industry.” (REIT.com)
  9. This Retailer Needs More Shopping Centers “Amid growing sales and surging profits, specialty retailer Cato is finding its expansion efforts being held back by the availability of suitable shopping centers. Cato operates 1,370 stores focused on value-priced fashion apparel and accessories at everyday low prices under the Cato, Versona and It’s Fashion banners. The formula appeared to resonate with customers in the third quarter ended Oct. 31, with Cato reporting that sales increased 4% to $223.3 million and same-store sales increased 2%.” (Chain Store Age)
  10. Two Giants Decide Against REIT Structure “Two big-name companies, Macy’s Inc. and McDonald’s Corp., recently decided to say ‘no’ to the REIT structure. Macy’s Inc., in its latest quarterly report, announced it would not create a REIT for its stores, while McDonald’s Corp., in its latest investor meeting, announced that it would not spin off its properties into a REIT. The news by both companies was disappointing to some investors, and possibly suggests that some executives considering a REIT structure are taking a longer look than usual.” (Commercial Property Executive)
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