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10 Must Reads for the CRE Industry Today (April 21, 2017)

The markets don’t believe an additional two interest rate hikes will happen this year, according to CNBC. Subway said it shuttered 359 locations in 2016, Reuters reports. These are among today’s must reads from around the commercial real estate industry.


  1. The market suddenly doubts the Fed will raise rates twice more this year “A recent string of less-than-stellar economic news has injected some uncertainty into whether the Fed will deliver a steady diet of rate increases ahead. In fact, current trading in the fed funds futures market indicates that the U.S. central bank will not be able to enact the two additional rate hikes that officials have indicated are on the way this year. As of Thursday afternoon, market indications were for a 57.3 percent chance of a quarter-point increase in the benchmark short-term rate in June, while there's just a 41.1 percent probability that it would move again in December. The June probability was less than 50 percent on Wednesday but rose Thursday on the heels of better-than-expected 0.4 percent growth in the leading economic indicators barometer and a stock market rally. Those expectations are counter to the past couple of months, when investors grew more comfortable with the idea that the Fed would be able to lift rates off their crisis-era lows. The first rate hike since mid-2006 happened in December 2015, with the next one not coming again until December 2016. The policymaking Federal Open Market Committee hiked again in March, with officials then pointing to a total of three moves for the year.” (CNBC)
  2. Subway says it shut hundreds of U.S. restaurants last year “U.S. sandwich chain Subway Restaurants said on Thursday it shut 359 restaurants in the United States last year, amid stiff competition in a highly fragmented fast-food industry. Subway, owned by Doctor's Associates Inc, is the world's largest fast-food chain by number of restaurants. It had 26,744 locations operating in the United States at the end of 2016. ‘We will continue to relocate some shops to better locations and look for new sites — both traditional and non-traditional,’ the company said in an e-mailed statement. Subway said its U.S. sales fell 1.7 percent to $11.3 billion last year, while international sales climbed 3.7 percent to $5.8 billion, reflecting a focus on overseas growth. Subway rival McDonald's has also reduced the number of its U.S. locations in recent years, as it seeks to cut costs by franchising out more restaurants.” (Reuters)
  3. Walmart-shadowed center in Orlando up for sale “Sand Lake Corners North, a 151,487-sq.-ft. community center in Orlando, Florida, has been put up for sale. Transwestern is serving as broker for the property at 8115 – 8379 S. John Young Parkway. According to Transwestern, tenants with long-term leases fill more than 90% of the center, which is located in Orlando’s tourist corridor and is surrounded by corporate campuses, including the SouthPark Center that comprises 2.9 million sq. ft. of office space. Built in 1999 and remodeled in 2005, Sand Lake Corners North’s main tenants are Old Time Pottery, PetSmart, and Dollar Tree. It is shadow-anchored by Wal-Mart Supercenter and Lowe’s Home Improvement Store.” (Chain Store Age)
  4. Fate of Trump tax plan not tied to Obamacare repeal, Mnuchin says “The fate of the Trump tax package is not tied to the outcome of the debate in Congress on repealing and replacing Obamacare, Treasury Secretary Steven Mnuchin said on Thursday. “Whether health care gets done or health care doesn’t get done, we’re going to get tax reform done,” Mnuchin said in a moderated discussion at an Institute of International Finance conference. A Trump tax bill will be unveiled “very soon,” he said. The Dow Jones Industrial Average extended gains after Mnuchin’s remarks. The stock market, although up on Thursday, had wavered recently over tax policy uncertainty. “The [tax reform] plan will pay for itself,” with the help of dynamic scoring, the Treasury secretary said.” (MarketWatch)
  5. Goodman Leases First Building of Santa Fe Logistics Campus “Goodman Group has pre-leased 295,267 square feet of infill logistics space to an e-commerce customer at Goodman Logistics Center in Santa Fe Springs, Calif. The company secured a seven-year lease from an online supplier of automotive parts on the first of three logistics facilities currently under construction at the center. The customer is scheduled to take occupancy in the summer of 2017. Two additional logistics facilities are currently available for lease and provide space ranging from 165,000 to 910,098 square feet. These facilities will be completed in the fourth quarter 2017. Over the last 18 months, Goodman has completed 3.3 million square feet of Class A development product in these key logistics markets, with a further 2.6 million square feet currently under construction.” (Commercial Property Executive)
  6. 4-State, 2,515-Unit Portfolio Commands $430M “Blackstone Real Estate Income Trust has acquired a six-property, 2,514-unit multifamily portfolio from The Realty Associates Fund IX, LP for some $430 million. The fund is part of TA Realty’s flagship fund series that focuses on creating diversified real estate portfolios that generate strong cash flow, benefit from intensive asset management and result in long-term value creation. JLL represented TA Realty in transaction negotiations.” (MultiHousing News)
  7. Caterpillar settles on suburban location for move to Chicago area from downstate Illinois  “Equipment giant Caterpillar Inc. will move its headquarters to Deerfield, Ill., choosing the Chicago suburb over the city itself. The maker of construction and mining machinery on Wednesday said Deerfield’s proximity to O’Hare International Airport and a commuter railroad would help Caterpillar executives stay more connected to the world. A spokeswoman also cited the suburb’s proximity to a smaller airport that serves corporate jets. Caterpillar has been based in the central Illinois city of Peoria for decades.” (MarketWatch)
  8. UBS looks to sell the Quin hotel “UBS Realty Investors has put the Quin hotel at 101 West 57th Street on the market, The Real Deal has learned. Sources familiar with the 17-story, 213-key property said it could fetch in excess of $1 million a key, or more than $213 million. UBS acquired the property for $60 million in 2010 from a partnership headed by Equinox founder Danny Errico. The company rebranded and renovated the property, formerly known as the Buckingham Hotel. It had reportedly been home to cultural icons such as the opera singer Giovanni Martinelli and the painter Georgia O’Keefe.” (The Real Deal)
  9. Here are the South Florida neighborhoods where home and condo prices are rising — and falling, too “The overall cost of buying a home in South Florida continues to climb, according to a report released Thursday reflecting sales prices in the first quarter of 2017. But prices vary significantly by neighborhood. In mainland Miami-Dade, the median sales price for all condos and single-family homes rose 12.5 percent over the first quarter in 2016. But in Miami Beach, median prices dropped 5.8 percent over the same time period. Those top line numbers tell only part of the story, according to data from the 1Q 2017 Elliman Report, an analysis of real estate trends prepared by Miller Samuel Real Estate Appraisers and Consultants.” (Miami Herald)
  10. AmerisourceBergen breaks ground on Carrollton campus that'll house 3,000 workers “International health care company AmerisourceBergen is breaking ground Thursday on its new regional headquarters in Carrollton. The 300,000-square-foot building is going up in the Austin Ranch development south of State Highway 121. It will house the AmerisourceBergen Specialty Group. AmerisourceBergen has a large office on Dallas North Tollway in Frisco. The 30-acre Austin Ranch campus will house 3,000 workers when it opens next year. Austin Ranch developer Billingsley Co. is building the complex, which was designed by Gensler.” (Dallas Morning News)
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