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10 Must Reads for the CRE Industry Today (April 3, 2017)

The New York Times looks at how the industrial sector is being impacted by more relaxed marijuana laws. U.S. construction spending reached an 11-year high last month, according to Reuters. These are among today’s must reads from around the commercial real estate industry.


  1. A Real Estate Boom Powered by Pot “At the edge of an industrial park in this suburb south of Boston, past a used-car auction lot and a defunct cheese factory, is an unmarked warehouse bristling with security cameras and bustling with activity. Until recently, the cinder-block structure was home to a wholesale florist, a granite cutter and a screen printer. Today, it is home to just one tenant: a medical marijuana operation called Ermont.” (The New York Times)
  2. Macy’s New CEO Reveals the Biggest Reason Why the Retail Icon Won’t Be Bought Out “Potential buyers—including Hudson's Bay Company—have been sniffing around Herald Square in recent months toying with whether to swoop in and buy struggling Macy's (M)  . But given the iconic retailer's $6.5 billion in debt, about 1.5 times its shareholder's equity, it may be time for such acquirers to get real. ‘Being highly leveraged, or increasing our leverage, would potentially be a problem for us. We deal with the realities of being a public company, and that isn't the distraction for me coming in. I am pretty clear on what we have to do with our strategy and execution. That's where I am staying focused,’ Macy's CEO Jeff Gennette told TheStreet.” (The Street)
  3. U.S. Construction Spending Rises to Near 11-Year High “U.S. construction spending rose to a near 11-year high in February amid robust gains in home building investment. The Commerce Department said on Monday that construction spending increased 0.8 percent to $1.19 trillion. That was the highest level since April 2006 and followed an upwardly revised 0.4 percent drop in January. Economists polled by Reuters had forecast construction spending rebounding 1.1 percent in February after a previously reported 1.0 percent decline the prior month.” (Reuters)
  4. Trump Building Plan: How One Public-Private Deal Hit a Bumpy Road “A decade after Texas and its partners first shook hands, the corporation running the road is in bankruptcy — with more than $430 million still owed to U.S. taxpayers stemming from a loan approved by the U.S. Department of Transportation when Gribbin was general counsel in 2008 — and more than a billion owed to other investors, too. It's the latest in a slew of toll road public-private partnerships that have fallen apart in the wake of the recession 10 years ago, at times leaving taxpayers struggling to recover their investment. The pitfalls could serve as a yellow caution light for lawmakers considering Trump's plan.” (CNBC)
  5. Can Legos Save Plymouth Meeting Mall? “The 33,000-square-foot attraction, which opens to the public Thursday, is typical of the types of businesses that mall owners are using to revive struggling centers. Think food, entertainment, and novel experiences. Michael Taylor, general manager of Legoland Discovery Center, said Philly Mini-land took six months to build. Legoland at Plymouth Meeting is the first one in Pennsylvania, fourth on the East Coast, ninth in the country, and 17th in the world.  A single-day pass will cost $19 per person and an annual pass $54 per person.” (
  6. In Ohio County That Backed Trump, Word of Housing Cuts Stirs Fear “The Pavlics’ ceiling may no longer be cracked, but in the zero-sum game that Mr. Trump’s budget seeks to set up, the nation is showing new fissures. The president’s budget proposal would cut deeply into the Department of Housing and Urban Development, paring rental assistance and eliminating heating and air-conditioning aid, energy-efficiency assistance, and partnerships with local governments like HOME. With the savings, Mr. Trump says, he would beef up military spending and build a wall along the Mexican border.” (The New York Times)
  7. People Are Leaving New York at an Alarming Rate “More people are leaving the New York region than any other major metropolitan area in the country. More than 1 million people moved out of the New York area to other parts of the country since 2010, a rate of 4.4 percent — the highest negative net migration rate among the nation’s large population centers, US Census records show. The number of people leaving the region — which includes parts of New Jersey, Connecticut, the lower Hudson Valley and Long Island — in one year swelled from 187,034 in 2015 to 223,423 in 2016.” (New York Post)
  8. Paydirt: Unmasking the Moneymen Behind New York’s Biggest Real Estate Players “Joe Sitt is a Brooklyn guy who’s very much part of the international jet set: He holds court at MIPIM and has partied in St. Tropez for fleet week, so it makes sense he’d take the savvy that made him a Fifth Avenue baron and extend it to the playgrounds of the European elite. In 2012, he purchased 65 Boulevard de la Croisette, a luxury retail property in the heart of Cannes with tenants such as Burberry and Brioni. Sitt, like almost every other player in New York, never reveals his investors.” (The Real Deal)
  9. Report Upbeat about Retail Industry “A just-released analysis of the U.S. retail sector offers positive news for an industry that has been subject to some gloomy assessments in recent times. Despite the rash of recent Chapter 11 filings and store closings, the U.S. retail sector as a whole remains incredibly strong and shows no signs of slowing down, according to a report by business intelligence firm Creditsafe USA. ‘Our study reveals that while a number of the big retail players have experienced financial hardships, there is a huge portion of the retail sector that are performing very well,’ explained Matthew Debbage, CEO of Creditsafe USA and Asia.” (Chain Store Age)
  10. Lord & Taylor May Build a Skyscraper On Top of its Fifth Avenue Store “Talk about dressing up a dowdy old department store. Lord & Taylor is weighing a plan to build a luxury tower on top of its 103-year-old flagship on Fifth Avenue, The Post has learned — even as it shells out a fortune on remodeling and expanding a half-dozen stores elsewhere. The high-flying project could result in a steel-and-glass skyscraper that houses offices and residential units, while still preserving the original, 11-story department store and its business, according to sources.” (New York Post
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