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10 Must Reads for the CRE Industry Today (April 23, 2018)

Sears Holdings CEO Eddie Lampert offered to buy some of the Sears units after the company wasn’t able to find other buyers, the Wall Street Journal reports. The Guardian looks at Sean Hannity’s real estate holdings. These are among today’s must reads from around the commercial real estate industry.

  1. Sears CEO Offers to Buy Kenmore, Other Units “Sears Holdings Corp. Chief Executive Edward Lampert is offering to purchase the Kenmore appliance brand and other Sears units after the struggling company was unable to find other buyers for the assets, breaking apart his retail empire in a bid to save it. Mr. Lampert, through his hedge fund ESL Investments Inc., which currently owns a controlling stake in the retailer, said in a letter to the Sears board that ESL is willing to buy Sears’ home-improvement business and its Parts Direct business.” (Wall Street Journal, subscription required)
  2. U.S. Existing Home Sales Rise for Second Straight Month “U.S. home sales increased strongly in March amid a rebound in activity in the Northeast and Midwest regions, but a dearth of houses on the market and higher prices remain headwinds as the spring selling season kicks off. The National Association of Realtors said on Monday that existing home sales rose 1.1 percent to a seasonally adjusted annual rate of 5.60 million units last month. February's sales pace was unrevised.” (Reuters)
  3. L.A. Toy Mogul Scraps Bid for Canadian Toys ‘R’ Us Stores, Works to Sweeten the Deal “Los Angeles toy mogul Isaac Larian is abandoning efforts to buy the Canadian stores of Toys R Us and instead plans to sweeten his rejected bid for more than 200 U.S. outlets of the bankrupt retailer. The Bratz doll maker told The Times on Sunday that he is satisfied that the 82 Canadian stores could be operated by Fairfax Financial Holdings Ltd. The Toronto investment firm, owned by billionaire Prem Watsa, reached a tentative deal last week with Toys R Us to buy the stores for $237 million.” (Los Angeles Times)
  4. Michael Cohen Case Shines Light on Sean Hannity’s Property Empire “The records link Hannity to a group of shell companies that spent at least $90m on more than 870 homes in seven states over the past decade. The properties range from luxurious mansions to rentals for low-income families. Hannity is the hidden owner behind some of the shell companies and his attorney did not dispute that he owns all of them. Dozens of the properties were bought at a discount in 2013, after banks foreclosed on their previous owners for defaulting on mortgages.” (The Guardian)
  5. Signs of Higher Inflation Are Popping Up Everywhere “Oil prices just hit a 3 1/2-year high and American businesses say they are paying more for other raw materials, pointing to an upsurge in inflation that could hamper U.S. growth if it persists or intensifies. The latest evidence? Businesses surveyed by IHS Markit said the cost of inputs — raw and partly finished materials — rose at the fasted pace in almost four years. Don’t expect much relief any time soon, either.” (MarketWatch)
  6. The Blockchain for Real Estate, Explained “There is a lot being written about blockchains, bitcoin and related technologies, and for many real estate professionals, this is part of a brave, new, confusing world of technology. Like the original internet, the blockchain is a revolution in technology that will touch all people and all businesses. So people are paying attention, but many still don’t understand what the blockchain is. Imagine that you and your best friend Bob are standing on a stage in an auditorium, and there are 1,000 people in the audience.” (Forbes)
  7. Brookfield Plans Retail Reboot on Bleeker Street “The stretch of Manhattan’s Bleecker Street between Bank and Christopher streets is pockmarked with ‘for lease’ signs, a casualty from the collision of the retail industry’s upheaval and skyrocketing rents. But for Brookfield Property Partners LP, this is the land of opportunity. The global real-estate developer and investor closed a deal to acquire four retail properties with seven storefronts on Bleecker Street.” (Wall Street Journal, subscription required)
  8. Liberty Investment Properties Buys Storage Space in Tampa “Liberty Investment Properties Inc., together with private investors, has acquired a 550-unit self-storage facility in Tampa. Extra Space Storage, a self-storage REIT, is the manager and the property is branded under the same name. The facility occupies 1.4 acres at 5045 W Cypress St. in the Westshore Business District, alongside State Route 60, roughly three miles from Tampa International Airport and five miles from the University of Tampa.” (Commercial Property Executive)
  9. Government Wants to Take Blighted Property Neglected after L.A. Riots: Owner Objects “Ever since the 1992 riots, there have been promises but not changes at the corner of Vermont and Manchester avenues. Property owner Eli Sasson has over the years proposed a shopping center, a housing development and an entertainment complex for a vacant lot the size of three football fields in South Los Angeles. But his ideas never manifested into brick and mortar.” (Los Angeles Times)
  10. 3 Retail REITs Buffett Should Buy “When it comes to shopping for stocks we know that Warren Buffett is the quintessential bargain shopper. Much of his estimated $85.8 billion net worth (according to Forbes) was created by identifying sound investments through the application of the margin of safety method. As Buffett learned, the most beneficial time to be a value investor is when the market is falling , and the wider the margin of safety, the lower the risk and the greater potential for gain.” (Forbes)
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