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10 Must Reads for the CRE Industry Today (April 13, 2018)

Subprime mortgages are coming back as “non-prime” mortgages, CNBC reports. Sears is closing its last store in its hometown of Chicago, according to the Chicago Tribune. These are among today’s must reads from around the commercial real estate industry.

  1. Subprime Mortgage Make a Comeback—with a New Name and Soaring Demand “They were blamed for the biggest financial disaster in a century. Subprime mortgages – home loans to borrowers with sketchy credit who put little to no skin in the game. Following the epic housing crash, they disappeared, due to strong, new regulation, and zero demand from investors who were badly burned. Barely a decade later, they're coming back with a new name — nonprime — and, so far, some new standards.” (CNBC)
  2. Wynn Resorts in Early Talks to Sell Boston-Area Casino Project to MGM “Wynn Resorts Ltd. has been in talks to sell its partially built Boston-area casino project to rival MGM Resorts International, according to people familiar with the matter, as Massachusetts regulators continue their investigation into the company’s handling of sexual-misconduct allegations against founder Steve Wynn.” (Wall Street Journal, subscription required)
  3. Universal Acquires More Property for Expansion “Clearing the way for a new theme park, Universal on Thursday acquired additional acres in Orlando, along with the deed restrictions that once were intended to block such a project. The move came a day after the company settled a long-running legal dispute with a former owner of the property. Deeds filed with Orange County on Thursday morning show the transfer of land from Georgia businessman Stan Thomas to Universal’s subsidiary, SLRC Holdings LLC.” (Orlando Sentinel)
  4. Sears to Close Last Store in Chicago “Sears, based in Chicago for more than a century and now facing mounting troubles, is closing its last store in the city. Employees at the store at Six Corners, on the edge of the Portage Park neighborhood, were told of the closure Thursday morning, spokesman Howard Riefs said in an email. The store, at the intersection of Milwaukee Avenue, Cicero Avenue and Irving Park Road, will close in mid-July after a liquidation sale set to begin April 27. The Sears Auto Center will close in mid-May.” (Chicago Tribune)
  5. L.A.’s New Playa Vista Neighborhood Is Where Silicon Valley Meets Southern California “Playa Vista, a newly built neighborhood on the west side of Los Angeles, lacks much of what locals consider luxury. There are no estates, sweeping views or movie-star enclaves. Yet houses are selling for over $4 million, and rents are eye-watering. That is because Playa Vista is in the final stages of its reinvention, providing office space for the biggest names in tech as well as dense, urban-style living for residents. In the fall, Alphabet Inc.’s Google unit will begin moving employees into a 319,000-square-foot office.” (Wall Street Journal, subscription required)
  6. WeWork Buys naked Hub, Accelerating China’s Co-Working Space Consolidation “Consolidation in China’s co-working industry quickened today as U.S. leader WeWork said it would buy Shanghai-headquartered rival naked Hub for an undisclosed amount. naked Hub, which opened in 2015 and has 10,000 members in 24 locations, is as large in China as WeWork, which has 10,000 members in a dozen locations.  Combined, WeWork expects to have a community of one million in Greater China by the end of 2021, according to a statement today by WeWork founder and CEO Adam Neumann.” (Forbes)
  7. These Top Architects Are Building the Coolest Cities of the Future “The Diller Scofidio + Renfro-designed High Line altered New York, drawing art and commerce to those formerly disused elevated rail tracks. Since then, Charles Renfro and his New York-based firm have tackled some of the splashiest new museums in the world, from LA’s must-visit Broad to the forthcoming Museum of Image and Sound in Rio de Janeiro.” (New York Post)
  8. Chain of Command: Vornado Realty Trust “Vornado Realty Trust, one of New York City’s top commercial landlords, has spent the last few years in shuffle mode. The publicly traded firm recently sold a chunk of office and retail properties around the county and spun off two divisions, including one focused on the D.C. market, to pare down its robust portfolio.” (The Real Deal)
  9. Nostalgia Hasn’t Translated Into Dollars as Toys ‘R’ Us Rescue Effort Raises Only $59,000 “Nostalgia hasn't translated into dollars in a long-shot effort to crowdfund a future for Toys R Us. Neither did efforts to recruit other toy makers. A campaign led by a billionaire toy executive who pledged $200 million with other investors in hopes of saving part of the bankrupt chain has foundered, with only $59,000 more raised in three weeks. Isaac Larian said Thursday he's disappointed but still plans to formally submit a bid this week for more than 300 stores in the U.S. and Canada.” (USA Today)
  10. Zillow Is Expanding from House Listing to House Flipping “Zillow has long been known for its online real estate listings, but now the company plans to expand into the house-flipping business. Zillow will first start buying and selling houses in Phoenix and Las Vegas and will use local real estate agents to represent the company both when purchasing and selling the homes, Zillow announced Thursday. Zillow added that it ‘will make necessary repairs and updates and list the home as quickly as possible.’” (Fortune)
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