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10 Must Reads for the CRE Industry (February 1, 2019)

Senator Mike Crapo outlined the plan to reform Fannie Mae and Freddie Mac, MarketWatch reports. David Simon has told analysts there are retailers Simon Property executives are “nervous” about, according to CNBC. These are among today’s must reads from around the commercial real estate industry.

  1. Key Senate Republican Outlines Fannie Mae, Freddie Mac Privatization Plan “Republican Senator Mike Crapo on Friday released an outline for reforming Fannie Mae and Freddie Mac the two mortgage giants that have lingered in government conservatorship since the 2008 financial crisis. Among other steps, it would privatize Fannie and Freddie. The plan from Crapo, chairman of the Senate Banking Committee, comes several weeks after the acting head of Fannie and Freddie's regulator, the FHFA, announced plans to immediately start overhaul efforts without the participation of Congress.” (MarketWatch)
  2. The CEO of the Biggest Mall Owner in the U.S. Says He’s ‘Nervous’ About More Retail Bankruptcies This Year “The biggest mall owner in the U.S. is warning of more store closures and even bankruptcies to rattle the retail industry in 2019. ‘There are some retailers out there that we’re nervous about,’ Simon Property Group CEO David Simon said Friday during a call with analysts after the company reported earnings, though he didn’t name those companies. ‘We are concerned about a few [retail bankruptcies] that should shake out in the first quarter.’” (CNBC)
  3. You Flushed the Toilet. They Made Some Bricks “Other researchers have tried mixing bricks with biosolids and other waste products. Dr. Mohajerani had experimented already with cigarette butts. So turning waste into a building material didn’t seem so far-fetched. Over the course of half a decade, he and a team of researchers collected biosolids from two wastewater treatment plants in Melbourne and mixed them with soil to make hybrid bricks of varying proportions. They fired them for 10 hours, at nearly 2,000 degrees Fahrenheit, and cooled them, then compared them in tests to normal bricks.” (The New York Times)
  4. Construction Spending Ticks Up, Led by Housing “The numbers: Construction spending rose 0.8% to a seasonally adjusted annual rate of $1.3 trillion in November from a revised $1.29 trillion in October, helped by housing, the Commerce Department said Friday. What happened: Economists surveyed by Econoday had forecast a 0.2% increase, but October figures were revised down. Outlays in November were 3.4% higher than a year ago, and for the first 11 months of 2018, were 4.5% higher than the same period in the prior year.” (MarketWatch)
  5. 2019 Predictions: 15 Prime Real Estate Locations Investors Need to Check Out “For those in the real estate market, staying up to date with current trends and market fluctuations is key to keeping a competitive edge. This also includes being aware of cities and regions that are expected to be prime real estate locations in the future — knowledge that is crucial to making sound investment decisions. Within the real estate industry, there are already so many focal areas — such as commercial, residential and hospitality — that it can be difficult to know which locations are up-and-coming in the near future.’ (Forbes)
  6. Worries About a Recession? Consider a Move to These 7 Slump-Proof U.S. Cities “Worried that the relatively rosy economic times may soon be over? You’re not alone. A recent survey from Duke University found that half of U.S. CEOs surveyed expect a recession to kick in by the end of this year, and even more — 82 percent — are sure a slump will hit by the end of 2020. If they’re right, we could all be in for some belt-tightening in the not-so-far-off future. However, there are certain spots around the country where residents feel the bite of economic downturns like the Great Recession less severely.” (CNBC)
  7. Downtown San Jose Development Boom Seen: Real Estate Experts “Downtown San Jose is becoming a magnet to a widening array of tech companies, large and small, that seek urban settings close to transit, according to a panel of commercial real estate experts. Google’s interest in creation of a transit-oriented village near the Diridon train station, along with low costs for land and office spaces and the prospect of expanding rail connections near relatively plentiful housing, were among the factors cited by the experts making the case for downtown.” (Mercury News, subscription required)
  8. Don Jr.’s Mysterious Trump Tower Phone Call Was a Conversation with… Howard Lorber? “There has been much speculation about who Donald Trump Jr. spoke to in a series of calls around the time of the infamous Trump Tower meeting with a Russian lawyer in 2016. This is the meeting in which Don Jr. thought he would get ‘dirt’ on Hillary Clinton’s presidential campaign. Now, new evidence obtained by Senate investigators shows at least one of the calls was a conversation with Howard Lorber, Douglas Elliman chairman and an old Trump family friend, according to reporting from the CNN and ABC News.” (The Real Deal)
  9. Amazon Closes Chicago-Area Fulfillment Centers Due to Extreme Cold “Hoping to beat Chicago’s frigid temperatures by having a space heater or a pair of warm gloves delivered to your door? The cold snap could be over by the time the products arrive, at least if you’re buying on Amazon. Amazon temporarily closed fulfillment centers and delivery stations in areas affected by the freezing temperatures, including Chicago, on Wednesday, citing concerns about the safety of employees and people handling its deliveries. Some Chicago-area facilities had reopened as of Thursday afternoon.” (Chicago Tribune)
  10. CBRE Takes Pulse of Southeastern US CRE “The commercial real estate market in the Southeast U.S. is faring well in the current cycle, according to CBRE’s 2019 Southeast U.S. Outlook. The region isn’t home to a bevy of top-tier markets, but it is home of fundamentals that are creating the perfect storm for success. CBRE surveyed conditions in 18 southeastern cities, including Atlanta, Tampa, Fla., Nashville, Tenn., Raleigh-Durham, N.C., and Charlotte, N.C. The Southeast’s solid labor market and strong drivers—including tourism, technology, manufacturing and logistics—are buoying the region’s commercial real estate sector.” (Commercial Property Executive)
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