- U.S. Pension Funds Turn to Riskier Real Estate Bets “U.S. public pension funds are taking on more real estate, and at times some of the riskiest types of property investments, as they try to close their funding gaps. American public plans with more than 20,000 members had an average 7% of their assets in real-estate investments at the end of 2017, according to a Wall Street Journal analysis of Boston College’s Public Plans Data, which contains the most recent numbers available. That is up from 4% in 2006, representing more than $120 billion in additional pension money flowing into real estate.” (Wall Street Journal, subscription required)
- A Tax Break to Hasten Gentrification? Housing Market’s Opportunity Zones May Miss Their Target “In mid-November, a Chicago-based private equity firm with an eye on underserved neighborhoods raised $105 million from 425 investors — in just 17 hours. Around the same time and about a hundred miles away, Milwaukee officials were meeting to discuss what they hope is an influx of money from a fresh wave of investors for badly needed city improvement projects. The two parties’ paths might never have crossed. But now, a productive match is a real possibility thanks to a new tax scheme known as Opportunity Zones.” (MarketWatch)
- Why Real Estate Builds Wealth More Consistently Than Other Asset Classes “If you lived through the recent real estate and economic recessions, the very headline of this article might cause you some emotional pain. Less than ten years ago, the country was swept with an economic crisis the likes of which our generation had never seen. I personally remember driving down the street in California’s Central Valley and seeing “for sale” signs on practically one of every four houses. It felt like the market would never recover. Fast forward a few short years and now massive wealth is being built through real estate-often by average Joe’s.” (Forbes)
- The U.S. Housing Boom Is Coming to an End, Starting in Dallas “A half-hour drive straight north from downtown Dallas sits one of the fastest-growing counties in the country. Cotton fields have been replaced with Toyota’s new North American headquarters, a Dallas Cowboys training facility and a sand-colored shopping strip with a Tesla dealership and a three-story food hall. Yet even with the booming growth, Dallas’s once vibrant housing market is sputtering. In the high-end subdivisions in the suburb of Frisco, builders are cutting prices on new homes by up to $150,000.” (Wall Street Journal, subscription required)
- Amazon Poaches Another Amazon Executive to be its CFO “After a search that's lasted nearly 10 months, Airbnb finally has a CFO. The home-sharing start-up is announcing Monday that Dave Stephenson will join Airbnb as chief financial officer. He spent 17 years at Amazon, most recently as VP and CFO of Amazon's Worldwide Consumer Organization, responsible for all global website sales. His time at Amazon was interrupted by a two-year stint at Big Fish Games from 2011 to 2013, where he held a number of titles, including president and CFO.” (CNBC)
- Manhattan Retail Rents Decline in Most Submarkets in Late 2018 “According to the Real Estate Board of New York's bi-annual Manhattan Retail Report, Manhattan's most popular retail corridors experienced widespread asking rent declines in the fall of 2018. Out of the 17 high-profile corridors, 15 posted year-over-year decreases in ground floor retail average asking rents per square foot (psf). With four more corridors in decline in fall 2018 than in fall 2017, this period registered the highest total number of corridors in decline since the inception of REBNY's Manhattan Retail Report in 2000. This natural correction in retail rents has been well underway over the past three years.” (World Property Journal)
- San Francisco-Based Company Bringing Hotels to Three Historic Loop Buildings “San Francisco-based boutique hospitality chain Sonder has opened a 30-room hotel in the Loop, the first of three hotels it plans within historic buildings downtown. Sonder opened in September in the Plymouth Building at 419 S. Dearborn St., where it leases all of the 12-story building that was completed in 1899, the company said. The hotel chain also has signed deals to open two more downtown hotels by the summer, Chicago general manager Ellen Schulz said. Sonder will open 39 rooms in the Jewelers Building, 19 S. Wabash Ave., and 41 rooms in the Waterman Building, 127 S. State St., she said.” (Chicago Tribune)
- Consumer Confidence Hits 135.7 in November vs. an Estimate of 135.9 “Consumer confidence slipped slightly in November as job and wage prospects dimmed, but still remained near historically strong levels, according to data released on Tuesday. The Conference Board's Consumer Confidence Index slipped to 135.7 this month, slightly more than economists had expected. Economists polled by Refinitiv expected the consumer confidence index to slip to 135.9 in November from 137.9 in October. ‘Consumers' assessment of current conditions increased slightly, with job growth the main driver of improvement.” (CNBC)
- Divaris Expands Retail Leasing Portfolio in VA “Divaris Real Estate Inc. has added five retail properties, totaling 303,694 square feet in Hampton Roads, Va., to its leasing and management portfolio. ‘The properties are located in convenient, well-trafficked corridors,’ Kris Fuller, Divaris Real Estate’s leasing associate, told Commercial Property Executive. ‘In general, we will be targeting retailers, fitness, medical office or financial users that will synergistically round out the co-tenancy.’ With the new assets to lease, Divaris Real Estate now has properties totaling more than 37 million square feet in the Mid-Atlantic and Southeastern U.S.” (Commercial Property Executive)
- WeWork Expanding at 2 Herald Square “WeWork is expanding in the Midtown office building where it is hosting Amazon. The co-working provider signed a 60,000-square-foot lease expansion at 2 Herald Square, the company told The Real Deal. The additional space covers the fifth and sixth floors and is expected to open in 2020. The company currently occupies 124,000 square feet in the 11-story building. The entirety of WeWork’s space in the property is leased to Amazon.” (The Real Deal)
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