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10 Must Reads for the CRE Industry Today (April 10, 2017)


  1. Trump-Taxes: President Scraps Tax Plan, Timetable Threatened “President Donald Trump has scrapped the tax plan he campaigned on and is going back to the drawing board in a search for Republican consensus behind legislation to overhaul the U.S. tax system. The administration's first attempt to write legislation is in its early stages and the White House has kept much of it under wraps. But it has already sprouted the consideration of a series of unorthodox proposals including a drastic cut to the payroll tax, aimed at appealing to Democrats.” (The Associated Press)
  2. Why American Millennials May Never Get to Live Alone “There’s more evidence that renters are just as likely to be struggling as homeowners. A typical renter in Miami would need to spend nearly 50% of his or her income to rent a one-bedroom apartment, but a typical millennial renter would need to spend 54% of his or her income in that city, according to a recent analysis of rental listings by real estate site Trulia. In Los Angeles, millennials pay nearly 39% of their monthly rent versus 34% for the average renter.” (MarketWatch)
  3. Schafer: Odds Are Long for Retailers That File Chapter 11 Bankruptcy “In February, Moody’s Investors Service said that the number of U.S. retailers with debt rated ­solidly in the junk category had tripled in the previous six years, with $5 billion scheduled to be repaid by these companies through 2021. Some of those scheduled payments aren’t going to be made. If history is any guide, there’s no reason to expect any of these bankrupt ­retailers will ever emerge and enjoy a long run of success as independent ­companies. Try to remember the last time a big retailer did that.” (Star Tribune)
  4. W.P. Carey Vs. Global Net Lease: U.S. REITs Investing in European Real Estate “W.P. Carey and Global Net Lease are two of the very few US REITs with significant exposure to the European real estate market. They allow you to diversify your real estate holdings without having to deal with the higher transaction costs and withholding taxes of foreign REITs. Both REITs trade at very reasonable valuables relative to their peers and yield from 6.4% to 9%.” (Seeking Alpha)
  5. The Fed’s In ‘No Man’s Land,’ Jim Cramer Warns “The Federal Reserve may be cautious to implement a total of three interest rate hikes this year after last week's mixed jobs report, CNBC's Jim Cramer warned Monday. ‘I know there [are] some people saying, listen, it's still game one for a lot rate hikes. I don't know if that's possible if they're data dependent,’ Cramer said on ‘Squawk on the Street.’ ‘They seem to be in the midst of ... they're kind of in a no man's land.’” (CNBC)
  6. Is Lidl Making Unwise Real Estate Choices? “Real estate opportunities, at anything like realistically affordable prices, are theoretically more likely to be discovered in the ‘wide open spaces’ of the U.S. than in long- and much-overcrowded European cities. But the weakness in that argument comes down to this: The ‘wide open spaces’ have little to do with where Americans live or shop. Lidl, being a people-friendly company, wants to be where the people – the shoppers – are.” (FoodDive)
  7. The Most Expensive Cities to Rent a Skyscraper “Knight Frank has published its latest report into the cost of renting office space in 30 story-plus buildings around the world. Hong Kong has the highest skyscraper office rents in the world by a significant margin but, like in many cities, recent growth in rents has been unspectacular - 0.6% in the second half of 2016. New York, the US' financial capital retained its No.2 slot in Knight Frank's survey after 0.6% growth in the second half, the same as Hong Kong. The estate agents said the figure reflected ‘nervousness over political risk.’” (Financial Times)
  8. CNL Lifestyle Liquidates With $830M Final Sale “Three years after tapping investment banking firm Jefferies LLC to assist in exploring strategic alternatives to provide liquidity to stockholders, CNL Lifestyle Properties Inc. has completed the disposition of its last assets. The REIT sold its ski, attraction and entertainment properties in separate transactions with EPR Properties and funds affiliated with Och-Ziff Real Estate for an aggregate $830 million.” (Commercial Property Executive)
  9. Ceruzzi Refinances Land Under Lipstick Building “With interest rates on the rise, Ceruzzi Holdings and its partners refinanced the land underneath Third Avenue’s Lipstick Building with a fixed-rate, $272 million loan. When Ceruzzi purchased the ground underneath the 34-story Midtown tower at 855 Third Avenue in February 2016 for $453 million, it assumed a $267.5 million loan originated a decade ago that had an above-market interest rate at 6.21 percent, the Wall Street Journal reported.” (The Real Deal)
  10. Blackstone Grants Refi for Iconic Florida Office Asset “CBRE recently announced that it has arranged a $100 million refinancing loan for Douglas Entrance, a five-building, Class A office property located in Coral Gables, Fla. The floating rate loan was provided by Blackstone Group and was secured shortly after the completion of a $7 million renovation project. The 462,888-square-foot office campus was built in mid-1980s and is owned by a joint venture between Miami-based Banyan Street Capital and Oaktree Management of Los Angeles.” (Commercial Property Executive)
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