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10 Must Reads for the CRE Industry (December 4, 2018)

Opportunity Fund managers are most focused on multifamily properties in Northeastern U.S., reports MarketWatch. Forbes looks at six skills real estate investors should try mastering. These are among today’s must reads from around the commercial real estate industry.

  1. ‘Opportunity Fund’ Managers Favor Urban Areas, Commercial Real Estate “Commercial real estate in large urban areas will be the big winner from the tax scheme aimed at boosting investment in needy areas, according to an analysis released in November. But who most benefits from commercial real estate deals remains up for debate. Fund managers raising capital through the Opportunity Zone incentive programs are most focused on commercial real estate and multifamily housing, primarily in the Northeastern U.S., the National Council of State Housing Agencies said.” (MarketWatch)
  2. Agent Orange’s Other Legacy—a $12 Billion Cleanup and a Fight Over Who Pays “Half a century ago, the herbicide Agent Orange was manufactured along the banks of the Passaic River. Poison hosed off factory floors drained into the waterway, where it sank to the bottom and became toxic sludge. The estimated cost of cleaning it up and compensating for environmental damage could run as high as $11.8 billion. Who will pay the bill? That’s now a question for a federal bankruptcy court in Delaware. And its answer could determine whether other companies with billions of dollars in environmental liabilities can use the U.S. bankruptcy system to avoid them.” (Wall Street Journal, subscription required)
  3. Why the Headquarters of Iconic Tech Companies Are Now Among America’s Top Tourist Attractions “With many tech companies enjoying worldwide prominence, and with fodders to match, some headquarters have now become architectural wonders in their own right. Even company offices that aren't architecturally gifted have drawn wide interest for not only their high tech products and services but also their employee perks, such as massages, volleyball courts, cafeterias stocked with free gourmet food, dry-cleaning and doctors on site. Both the state-of-the-art buildings and lifestyle are fascinating to outsiders.” (CNBC)
  4. Six Skills Real Estate Investors and Developers Should Focus on Mastering “Developing or investing in the real estate market can be financially rewarding. Yet, finding success in the market requires knowledge about the liabilities inherent with any real estate or property-specific work. There is perhaps no better way to gain the information you need than by speaking with those within your industry, particularly about the pain points and hazards buyers and sellers should strive to anticipate and avoid — and the skills needed to identify where trouble may lie.” (Forbes)
  5. Trade Truce Helps Lift Wynn’s Stock “Some of the hardest-hit stocks of the past two months — Amazon, Apple and Advanced Micro Devices — were rebounding Monday, as investors reacted to news that the United States and China had agreed not to escalate their trade war for now. One of biggest beneficiaries Monday was Wynn Resorts, which was the second best-performing stock in the S&P 500 for the day.” (The New York Times)
  6. Church Revival: The Spirit (or the Economy) Is Moving Religious Real Estate Again “When the housing market surged in 2018, houses of worship got a sales lift too. Church sales hit a four-year high in the Tri-State, with 13 properties changing hands this year for a combined price of $3.4 million. And those numbers could climb higher if three deals under contract close by the year’s end. ‘The pace is definitely picking up,’ said Nat Comisar, executive vice president for Sibcy Cline Realtors.” (WCPO Cincinnati)
  7. A Sample of SF Waterfront Redevelopment Concepts “The Port of San Francisco’s ‘request for interest’ for 14 waterfront structures within the Embarcadero Historic District is an outgrowth of a larger effort to update the port’s Waterfront Land Use Plan. That effort began in 2015 and should move to environmental studies next year. The goal for the requests is to try and begin making plans to revive specific piers, so work could begin soon after an update is approved.” (San Francisco Chronicle)
  8. Clothing Is Back in Fashion for the Holidays. But Not All Retailers Will Benefit from the Trend “One takeaway from this year's Black Friday and Cyber Monday shopping extravaganza is that there will be a lot more sweaters and coats under the tree this year. Shoppers are turning up at stores like Lululemon, Abercrombie & Fitch, Old Navy and Urban Outfitters this holiday season to buy clothing for themselves and for others. It's a stark contrast from the years that followed the Great Recession, when cash-strapped consumers stuck to their budgets and bought only necessities. For many people, for many years, that meant less clothing. But now, the apparel industry seems to be bouncing back.” (CNBC)
  9. Institutional Investors Buying 10 Percent of all iBuyer Homes in U.S. “According to ATTOM Data Solutions, nearly one in 10 U.S. homes sold so far in 2018 by the nation's two leading iBuyers -- Opendoor and Offerpad -- were purchased by institutional investor entities buying at least 10 homes. According to the analysis, a total of 743 homes sold by the two iBuyers -- companies that buy directly from homeowners via all-cash offers -- were purchased by institutional investors so far in 2018, representing 9.6 percent of all sales by those two iBuyers combined.” (World Property Journal)
  10. Kroger to Sell Groceries in Walgreens Stores “Kroger Co. plans to sell groceries in branded sections of Walgreens Boots Alliance Inc. stores, as both retailers look for ways to keep customers loyal to their products. The first ‘Kroger Express’ sections will open by early next year in 13 Walgreens stores near the grocer’s Cincinnati headquarters. The companies said they would add more of the 4,000-square-foot displays of produce, Home Chef meal kits and other products if customers take to them. They will account for roughly a third of an average Walgreens selling space.” (Wall Street Journal, subscription required)
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