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10 Must Reads for the CRE Industry Today (April 9, 2019)

Edward Lampert wants to buy some Sears Hometown and Outlet stores, reports the Wall Street Journal. CNBS looks at 40 cities where housing prices might decline. These are among today’s must reads from around the commercial real estate industry.

  1. Edward Lampert Offers to Buy Remaining Shares of Sears Hometown and Outlet Stores “Edward Lampert is looking to buy the roughly 41% of Sears Hometown and Outlet Stores that he and his hedge-fund ESL Investments don’t currently own. Through an affiliate called Transform Holdco LLC, the former chief executive of Sears Holdings Corp. is offering shareholders of the Sears spinoff, which includes its hardware and appliance stores, $2.25 a share, or about $21 million. The nonbinding offer represents an 18% premium to Sears Hometown’s closing price on Friday. Shares of Sears Hometown rose 10.5% on Monday.” (Wall Street Journal, subscription required)
  2. Climate Change Will Crush Real Estate Values for Investors Who Don’t Prepare, New Report Says “For any investor, measuring opportunity against risk is critical. And for real estate investors in particular, risk is rising exponentially in the age of climate change. To that end, big real estate firms are pouring significant resources into calculating climate risk and its likely effect on property portfolios — everything from increasingly extreme weather to a rise in sea levels. ‘This process will be painful for investors who are caught off guard, but those who are prepared have the potential to outperform,’ a new report from the Urban Land Institute said.” (CNBC)
  3. Here's Why the Feds Will Raise Interest Rates Before the Summer “Today I’m going to make a bold prediction. Before summer begins, you will start hearing calls from the Federal Reserve for interest rate hikes. And Wall Street will also be preparing itself for higher rates. That means the bond market will decline in value — as it automatically does when rates are going up — and the stock market will suddenly have to start being more realistic about where its prices belong.” (New York Post)
  4. These 40 Cities May See Housing Prices Decline, Survey Says “If you're looking for a new home in an urban area, you might be attracted to some more up-and-coming areas. But buyer beware: Some of those areas come with big risks. That is according to a new study from GOBankingRates, which evaluated cities based on multiple criteria: percentage of homes with mortgages in negative equity, foreclosure rates, delinquency rates on mortgage payments, homeowner vacancy rates and rental vacancy rates. The site then ranked 40 cities according to these risks.” (CNBC)
  5. Treasuries Rally After Trump Threatens Tariffs Against EU “Treasury prices rose Tuesday, pulling bond yields lower, as traders grappled with the renewed threat of trade tariffs after the U.S. threatened to slap import levies on the European Union. Traders also geared up for the first debt sale of the week, which may have helped to drive yields higher on Monday. The 10-year Treasury note yield was virtually unchanged at 2.487%. The 2-year note yield was down 0.6 basis point to 2.327%.” (MarketWatch)
  6. Top U.S. Commercial, Multifamily Mortgage Originators of 2018 Revealed “MBA's Annual Origination Volumes study is the only one of its kind to present a comprehensive set of listings of 136 different commercial/multifamily mortgage originators, their 2018 volumes and the different roles they play. The report presents origination volumes in more than 140 categories, including by role, investor group, property type, financing structure type, and by the location of the originating office.” (World Property Journal)
  7. The Lincoln Yards and 78 TIF Battles Just Got Messier “Government transitions are, by definition, messy and confusing, a real-life scrum in which those who want to make a lasting mark before they depart are up against those who are entering office and beginning to launch their agenda. Everyone involved invariably looks out for No. 1. It is not a thing of beauty. But there's ugly, and then there's really ugly.” (Crain’s Chicago Business)
  8. ‘NYC Tech Hub’ to Bring an End to Long-Running Land Use Saga “With a few strokes of a pen, a joint-venture development team and the city’s Economic Development Corp. brought a half-century-running land use saga to a productive end. RAL Development Services and Junius Real Estate Partners last week inked the bottom lines to develop 124 E. 14th St., a site owned by the city since 1968 that was most recently a two-story P.C. Richard store.” (New York Post)
  9. The Evolving Landscape of Healthcare Real Estate “The incentives to evolve, adapt, and compete - trademarks of America's most innovative industries - are all too often missing from the healthcare landscape. Byzantine, third-party payer superstructures (both public and private) dominate the industry. Funding for any given medical service or product is cobbled together from individuals, employers, insurance companies, and taxpayers. It takes an administrative army to calculate the spaghetti-like streams of funds from one place to another.” (Seeking Alpha)
  10. Bain Capital Sells Boston-Area Life Science Asset for $128M “Bain Capital Real Estate has sold a 77,805-square-foot life science property in Cambridge, Mass., for $128 million. The buyer of the fully leased, four-story building at 1030 Massachusetts Ave. was an undisclosed publicly traded REIT. The property had been converted into a Class A, LEED Gold–certified laboratory facility in 2013 and reportedly is the closest privately owned lab/office building to Harvard University and also within walking distance of MIT. Its tenants include Astellas, Mitobridge and Obsidian Therapeutics.” (Commercial Property Executive)
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