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10 Must Reads for the CRE Industry Today (April 29, 2019)

The Wall Street Journal looks at how one bookstore survived the e-commerce age. Forbes lists universal costs of owning rental real estate. These are among today’s must reads from around the commercial real estate industry.

  1. How Will the Fed Fight the Next Recession? It’s Trying to Figure That Out Right Now “With the economic expansion on track to become the longest on record, one of the most important beneath-the-radar policy conversations in Washington will take place in the coming months. Fed officials are undertaking the most extensive rethinking of how they set monetary policy since they set a formal target for inflation seven years ago. The results will help determine how long it can keep the good times going and how effectively it will be able to fight the next downturn.” (The New York Times)
  2. How One Independent Bookstore Succeeds in the Amazon Age “Frank Reiss’s business spent 10 years on the edge of collapse. During the late 1990s and 2000s, his independent bookstore—like so many of its peers—faced intense pressure from Amazon and big-box chains. At his lowest point, Mr. Reiss was a quarter of a million dollars in debt, with wavering hope that he could survive the digital age. Now Atlanta-based A Cappella Books has become a success story. Its sales have doubled from a decade ago and are now closing in on $1 million. Profit margins have risen, too, as have many of its peers.” (Wall Street Journal, subscription required)
  3. Airbnb Backlash: Island Oasis Dreads Becoming Hamptons Hotbed “It takes eight minutes by ferry to cross the Peconic River, the body of water that separates Shelter Island and the South Fork of Long Island, but the distance in temperament between the two areas could not be more pronounced. With osprey circling over the island’s 30 square miles of Long Island pine trees and the wetlands of Mashomack Preserve, and tricycles piling up outside the Tuck Shop ice cream parlor, Shelter Island has the refined but casual feel of an accidental resort town.” (The New York Times)
  4. The Universal Costs of Owning Rental Property “No matter how much we wish otherwise, every investment property is going to have at least some expenses associated with it. At a minimum, taxes, insurance, repairs and maintenance, and possibly water and trash service on multifamily properties, are going to become due and payable over the course of a fiscal year. All are inevitable, and all must be estimated, budgeted for and managed.” (Forbes)
  5. Rockefeller Center Tower to Offer Airbnb Rentals “The owner of a high-rise office building in Rockefeller Center is teaming up with home-rental giant Airbnb Inc. to convert 10 floors into the first modern-day lodging in the landmark 87-year-old complex. RXR Realty and Airbnb said they hope to open the facility at 75 Rockefeller Plaza in about a year. The upscale rooms will be on the higher floors of the 32-story tower, allowing guests to gaze on St. Patrick’s Cathedral and offering a bird’s-eye view of Rockefeller Center’s annual Christmas tree lighting.” (Wall Street Journal, subscription required)
  6. As Payless Wades Through Bankruptcy Again, Creditors Say Hedge Fund May Be to Blame “Some of the chain's lenders and creditors claim the collapse may stem in part from self-inflicted causes. They cite the role of Alden Global Capital, a prominent hedge fund that is Payless’ majority shareholder as well as a major lender. Critics maintain Alden has invested in distressed companies and then in some cases installed unseasoned executives who cut costs and sold assets while failing to take steps needed for successful corporate turnarounds.” (USA Today)
  7. Head of Governors Island Pushed Out as Former Deputy Mayor Looks to Transform Site “The city’s long-held plans to revitalize Governors Island were finally getting underway last summer, and Michael Samuelian, who was appointed in 2016 to oversee the island’s transformation, was excited about the future. ‘This next chapter presents an unparalleled opportunity to activate the island with new educational and research facilities in a destination unlike anywhere else,’ he said in August, when City Hall announced the first steps toward redeveloping swaths of the 172-acre island.” (Politico)
  8. 4 Gorgeous Beach Town Where You Can Comfortably Retire on $40,000 a Year “Beachin’ on a budget. That can be a reality for retirees — that is, if they know where to look. The average over-65 household in America drops $49,000 a year on average on everything from housing to food, according to the Census Bureau. But you don’t have to spend that much, and in fact, can spend far less — and retire to a sunny beach town. (No, really.) MarketWatch looked at beach towns across America, where the overall cost of living was significantly below average, housing was reasonably priced and where there are plenty of things to see and do.” (MarketWatch)
  9. Co-Working Grows in San Diego as Biotech VC Stumbles “San Diego is one of the country’s premier biotech hubs, but a single co-working deal exceeded the city’s total VC investment in life sciences during the first quarter, according to a new report by CBRE. Shared office startup CommonGrounds Workspace landed $100 million in Series A funding in January to fuel its aggressive growth plans, as Southern California’s flexible office sector continues to heat up. By contrast, life science investment in San Diego totaled just $76.2 million in the first quarter, the lowest level in more than four years.” (Commercial Property Executive)
  10. Target Ends Fight for Lower Property Taxes in Cicero, Manlius “Target has dropped legal challenges to lower its property taxes in Cicero and Manlius, potentially saving other taxpayers hundreds of thousands of dollars a year, according to officials in those towns. The retail chain sued the two towns, saying their assessed values should be reduced from about $9 million to about $900,000. In Cicero, for example, that would lower the school, town and county property tax bills from about $327,000 a year to about $33,000.” (Syracuse.com)
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