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10 Must Reads for the CRE Industry (February 4, 2019)

Charlotte Russe has filed for bankruptcy protection, reports MarketWatch. San Francisco Chronicle looks at what the Salesforce Tower is worth. These are among today’s must reads from around the commercial real estate industry.

  1. Pushed by Home-Sharing Hotels Try Some New Tricks “From televisions in every room to smartphone room keys, the hotel industry has evolved to stay at least on pace with travelers, if not a step or two ahead. Now, challenged by the home-sharing economy — Airbnb alone reported over $1 billion in revenue in the third quarter of 2018, its highest to date — new hotels are toying with everything from pricing to privacy.” (The New York Times)
  2. Charlotte Russe Files for Bankruptcy, as it Looks to Close 94 Stores “Charlotte Russe Holdings Corp. filed Monday for bankruptcy, as the women's apparel retailer looks to wind down about 94 stores, while it continues to pursue a sale of its business. The company has received up to $50 million in debtor-in-possession financing, which would help support operations during the bankruptcy process. The company said its Charlotte Russe and Peek Kids stores and websites will remain open, and will provide more details about store closures in the near term.” (MarketWatch)
  3. Meet Adrian and Sonia Cheng, Power Siblings Behind Some of the World’s Most Luxurious HotelsHong Kong locals often argue about which view of the city’s vertigo-inducing skyscrapers, verdant mountain slopes and ship-filled harbor is the most scenic. But if Sonia Cheng has her way, all will agree it’s the perfectly framed, picture-postcard vista from the main entrance of her recently completed Rosewood hotel, opening this month. Occupying 43 floors of a 65-story skyscraper, the Rosewood Hong Kong is just one of the newest projects from Cheng, 38, a Harvard grad and investment banker–turned-hotelier.” (Wall Street Journal, subscription required)
  4. Foxconn Reiterates Commitment to Wisconsin, but the Devil is in the Details, of Which There are Few “On Friday, the idea of expanding the plant’s mandate to include more R&D did not appear to have changed. ‘This campus will serve both as an advanced manufacturing facility as well as a hub of high technology innovation for the region,’ said the Foxconn statement. It did not make any mention of job numbers or what exactly would be manufactured. ‘We look forward to continuing to expand our investment in American talent in Wisconsin and the US,’ said the statement.” (MarketWatch)
  5. Salesforce Tower Mystery: What Is SF’s Tallest Building Worth? “Even a small ownership stake in Salesforce Tower, San Francisco’s tallest building, is worth nine figures. Owner Boston Properties said in a recent corporate filing that it paid $187 million last year to buy out minority partner Hines, which owned 5 percent of the building. A $187 million payment for a 5 percent ownership stake suggests Salesforce Tower is now worth more than $3 billion. But there are a few details to consider.” (San Francisco Chronicle)
  6. The Future of Real Estate: Fintech 50 2019 “Lagging prices of an uncertain housing market will put real estate fintech companies to the test. Many of startups who made this year's list of proptech stars have partnered with big banks and heavy hitters to weather a turbulent market. Former Fannie Mae CEO Tim Mayopoulos was recently named president of Blend, which counts two of the nation's largest mortgage providers, Wells Fargo and U.S. Bank, among its growing number of customers.” (Forbes)
  7. California Craving More Tax Revenue from Recreational Cannabis Sales “California’s high cash expectations from recreational marijuana are going up in smoke as most people are opting to buy their weed on the cheaper, more available and tax-free black market. ‘We projected bringing in $185 million in taxes in (fiscal) 2018,’ state Treasurer Fiona Ma said. ‘We got less than half of that.’ To give the legal market a boost, Ma is joining other lawmakers in supporting AB286 by Democratic Assemblyman Rob Bonta of Oakland to cut the current 15 percent excise tax on pot down to 11 percent. The bill would also suspend the tax of $143 per pound paid by growers for three years.” (San Francisco Chronicle)
  8. New Concerns Ahead for Economy, CRE “The bottom line from Integra Realty Resources’ 2019 Commercial Real Estate Trends Report is basically: don’t expect 2019 to be like 2018. Or, in the report’s own words, Things feel ebullient. The best advice: enjoy it while it lasts. The times, they are a-changing.’ Hugh Kelly, PhD, authored the IRR report, which also advises the commercial real estate market that it’s time to play defense.’” (Commercial Property Executive)
  9. These Were the Top NYC Retail Leases in January “Gyms maintained a strong presence in January’s retail leasing scene, securing two of the top spots. The rest of the list is a bit of a mixed bag, featuring wildcards such as museums and marijuana dispensaries. All together, January’s top 10 retail leasing deals totaled more than December’s in terms of square footage. The 10 biggest retail lease deals signed last month totaled 229,700 square feet, up 80,900 square feet from December’s total of 148,800 square feet.” (The Real Deal)
  10. American Girl Store at Mall of America Closing on March 20 “Destination retailer American Girl said Thursday it will close its store at the Mall of America along with a location in Boston on March 20 as part of a cost-cutting move. Both stores opened in November 2008. The closure will affect 15 full-time and 31 part-time employees at the Mall of America.” (Star Tribune)
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