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10 Must Reads for the CRE Industry Today (October 29, 2015)

10 Must Reads for the CRE Industry Today (October 29, 2015)


  1. MGM Resorts to Create REIT to Be Named MGM Growth Properties “MGM Resorts International plans to create a real estate investment trust into which it will contribute 10 of its properties. MGM said the REIT, to be named MGM Growth Properties LLC, will assume about $4 billion of debt, which is expected to be refinanced with the proceeds of debt and equity sales, according to a statement on Thursday. The company is being pressed by activist investor Land & Buildings Investment Management LLC to sell assets, reduce spending and put its properties into a REIT.” (Bloomberg)
  2. As Banks Retreat, Private Equity Rushes to Buy Troubled Home Mortgages “Private equity and hedge fund firms have bought more than 100,000 troubled mortgages at a discount from banks and federal housing agencies, emerging as aggressive liquidators for the remains of the mortgage crisis that erupted nearly a decade ago. But the firms are now drawing fire. Housing advocates and lawyers for borrowers contend that the private equity firms and hedge funds are too quick to push homes into foreclosure.” (CNBC)
  3. This City Is World’s Riskiest for Property Bubble: UBS “Will near-history repeat itself? Just eight years after the sub-prime mortgage crisis, banks are warning about the risks from booming real estate markets across the world. On Thursday, UBS said that property in all European cities now exceeds fair valuation, with London the most overvalued market on the continent and the city most at risk in the world for another housing bubble.” (CNBC)
  4. Qatar Joins Brookfield’s $8.6 Billion Manhattan West Project “Brookfield Property Partners LP and Qatar Investment Authority formed a joint venture on Manhattan West, an $8.6 billion mixed-use project under construction on New York’s far west side. Plans for the 7 million-square-foot development call for five buildings, including a 62-story, 844-unit residential tower that’s already in progress. Qatar Investment Authority will acquire a 44 percent stake in the project.” (Bloomberg)
  5. Walgreens Likely to Go on Real Estate Diet if Deal for Rite Aid Wins Approval “The newly announced merger agreement between Walgreens Boots Alliance Inc. and Rite Aid Corp. has the potential to be hugely disruptive to retail real estate across the country, according to industry experts analyzing early details of the proposed deal. The two drug store operators control roughly 200 million square feet of retail space and another 21 million of office and distribution space.” (CoStar News)
  6. Apartment Volume Continues Sliding in September “After a recovery in August, sales of apartment properties fell 11% year over year in September, according to Real Capital Analytics’ (RCA's) most recent market report. ‘This decline comes on the heels of a slowdown since May in the growth in sales volume for the apartment sector,’ RCA said in the report. RCA said the average monthly pace of sales growth in the first quarter of 2015 was 73% year over year.” (Multifamily Executive)
  7. Carlyle Group Buys Sprawling Sunnyvale Mobile-Home Park “A month after buying its first Bay Area mobile-home park, the Carlyle Group is coming back for seconds in a big way. The Washington, D.C.-based private equity juggernaut just snapped up Sunnyvale’s approximately 85-acre Plaza Del Rey in a deal that highlights growing institutional appetite for the once-sleepy, largely mom-and-pop dominated asset class.” (Silicon Valley Business Journal)
  8. Zell or Sternlicht: Who’s Right? “S&P notes that asset values in suburban markets—where most of the EQR portfolio trading to Starwood Capital is located—‘may begin to stall as new supply gets added. Furthermore, if the economy weakens or if employment opportunities dry up, we would expect the suburban markets to be the more susceptible to value decline.’ Yet the ratings agency’s summary of the apartment market’s continuing viability appears to favor the $5.365-billion bet that Sternlicht is making.” (GlobeSt.)
  9. How Albertsons Grew (Timeline and Banner Location Map) “Albertsons has come a long way fairly rapidly. When the original Albertsons chain was broken up and sold in 2006, the organization headed by Bob Miller — with financial backing from Cerberus Capital Management, a New York-based hedge fund, and a consortium of real-estate companies — acquired 661 underperforming stores, while the best-performing locations went to Supervalu.” (Supermarket News)
  10. Paul Singer Buys Stock in Hunting Outfit Cabela’s “Paul Singer has gone hunting for small game. The billionaire hedgie, who runs $27 billion Elliott Management, revealed on Wednesday he has taken an 11 percent stake in Cabela’s, the 77-store retailer of hunting rifles and other outdoor recreational paraphernalia. Shares jumped 17.6 percent, to $39.78, after Elliott suggested in a filing that the $2.32 billion market cap company might be a target for private equity.” (New York Post)
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