10 Must Reads for the CRE Industry (May 22, 2019)

HUD Secretary Ben Carson doesn’t seem to know the meaning of the term REO, reports MarketWatch. Detroit approves a $1.6 billion Fiat Chrysler plant, according to the Associated Press. These are among today’s must reads from around the commercial real estate industry.

  1. A Tale of Two Yield Curves “Investors and Federal Reserve officials watch the gaps between shorter- and longer-term interest rates to gauge the health of the U.S. economy. Right now, the two groups are seeing different things. That is because they use different measures. Fed economists tend to study the difference between the yield on the three-month Treasury bill and the yield on the benchmark 10-year Treasury note. The three-month yield this year has periodically exceeded the 10-year yield, a phenomenon known as an inverted yield curve that has preceded every recession since 1975.” (Wall Street Journal, subscription required)
  2. Fannie, Freddie Shareholder Payout Is Part of the Reform Discussion, Regulator Says in Surprise Move “Shares of Fannie Mae and Freddie Mac surged Monday after their chief regulator emphasized that the two mortgage enterprises would be allowed to hold their capital instead of sweeping it to the Treasury Department. But Mark Calabria, who has helmed the Federal Housing Finance Agency since April, went a step further. In a public appearance in New York, Calabria affirmed that his agency and the Treasury Department have been discussing ways to allow Fannie and Freddie to raise additional capital.” (MarketWatch)
  3. Avoid These Top 7 Real Estate Investing Mistakes “Real estate investing can be a difficult field to navigate, especially if you don’t know where to get started. Property investment isn’t as simple as buying a house, filling it with tenants and raking in the cash for your retirement fund. After flipping over 450 homes and 2,000 apartment units, I’ve had my fair share of real estate investment challenges, and for first-timers, there are plenty of pitfalls that can make you lose money fast.” (Forbes)
  4. Detroit OKs Land Deals, Jobs Plan for Fiat Chrysler Plant “Fiat Chrysler can move forward with plans to build a new, $1.6 billion assembly plant in Detroit and invest $900 million to retool and modernize another. Land deals and community benefits agreements tied to the project were approved Tuesday by the Detroit City Council. A Fiat Chrysler representative told state officials in Lansing that construction can begin immediately, with vehicles expected to roll off the assembly line by late next year. The automaker also will retool and modernize its Jefferson North Assembly Plant, which will be adjacent to the new facility.” (Associated Press)
  5. Unfamiliar with Foreclosure Term, HUD Chief Ben Carson Thinks Congresswoman’s Question Is About Oreos “Housing and Urban Development Secretary Ben Carson appeared confused about a term related to foreclosure during a Tuesday hearing, asking a congresswoman if she was questioning him about Oreo cookies. Rep. Katie Porter, a California Democrat, asked Carson during a House Financial Services Committee hearing if he was familiar with the term ‘REO.’ Carson replied, ‘An Oreo?’ No, said Porter. ‘Not an Oreo. An R-E-O.’ After Carson incorrectly said that the ‘O’ stood for ‘organization,’ Porter explained the acronym stands for real estate owned.” (MarketWatch)
  6. Space Rockets Spark Property Boom on Florida Coast “Jeff Bezos and Elon Musk are racing to send people into outer space and eventually to the moon and Mars. They are already improving the fortunes of a coastal Florida city that is home to their budding space ambitions. Cocoa Beach, which sits south of Cape Canaveral on the Atlantic coast, was hit hard by the 2009 recession and the subsequent end to the National Aeronautics and Space Administration’s space shuttle program. The economic downturn and space program’s demise led to large-scale layoffs and a reduction in tourism.” (Wall Street Journal, subscription required)
  7. CBRE Eyes 3 World Trade Center for its Coworking Brand “CBRE, the world's largest commercial brokerage and real estate services company, is searching for space to house its newly launched coworking brand, Hana, and has recently entertained talks to open its first city location in the at 3 World Trade Center. CBRE announced late last year that it was entering the booming coworking sector to compete with a long list of fast-growing operators, including WeWork, Knotel and Regus.” (Crain’s New York Business)
  8. $3.5B Fordham Landing Project Going Up Near Harlem River “Another industrial wasteland along the Harlem River waterfront in the Bronx is on its way to a face-lift. The $3.5 billion mixed-use Fordham Landing project is planned to rise between the Harlem River and the Major Deegan Expressway. Developer Dynamic Star, founded by Gary Segal and Brad Zackson, is discussing the 5 million square feet of plans with the Department of City Planning and still needs to go through regular uniform land use approvals.” (New York Post)
  9. Overtown Redo? Beckham Paying $9M for Old Site, Wants Stadium Permits There, Mayor Says “Could David Beckham reverse course again and revive plans for a soccer stadium in Overtown? Beckham’s lead local partner, MasTec chairman Jorge Mas, told county officials on Monday that the soccer group planned to pay $9 million to close on three acres of Miami-Dade land in the Overtown neighborhood and ask Miami for permits to build a stadium there. Overtown was the Beckham pick for a Miami Major League Soccer stadium until early 2018 when the partners switched to a larger proposal on Miami’s Melreese golf course. That 73-acre site still requires city approval of a multi-decade lease.” (Miami Herald)
  10. Houston Investor Snaps Up Farmers Branch Business Park “A 12-building business park in Farmers Branch has sold to a Houston-based property firm. The WestWood Business Park on Crown Drive west of Stemmons Freeway was purchased by Finial Group. The office and industrial campus has almost 228,000 square feet of space and is located southwest of the intersection of LBJ Freeway and Interstate 35E.” (Dallas Morning News)
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