Skip navigation
construction worker Getty Images

10 Must Reads for the CRE Industry Today (August 1, 2018)

Young job seekers are staying away from construction jobs, the Wall Street Journal reports. Zillow will start offering property management tools to landlords, according to MarketWatch. These are among today’s must reads from around the commercial real estate industry.

  1. Young People Don’t Want Construction Jobs. That’s a Problem for the Housing Market. “The construction business is having trouble attracting young job seekers. The share of workers in the sector who are 24 years old or younger has declined in 48 states since the last housing boom in 2005, according to an analysis of U.S. Census data by Issi Romem, chief economist at construction data firm BuildZoom. Nationally, the share of young construction workers declined nearly 30% from 2005 through 2016, according to Mr. Romem.” (Wall Street Journal, subscription required)
  2. The New Housing Play: Helping Priced-Out Renters Become Long-Distance Landlords “Leland Char is a 28-year-old product manager for a large San Francisco-based tech company. He loves the Bay Area’s ‘very authentic Asian food and new American cuisine, smart well-educated people, the multiple job opportunities, the friends that I’ve made, and fantastic hiking.’ What Char hates is the house prices, and the fact that even with a dual income, he and his fiancée can scarcely afford to buy a home in their community, let alone have in-laws join them as they put down roots. So he settled on a solution that’s unorthodox, but which suits him: he bought eight houses in Texas.” (MarketWatch)
  3. Rising Risks: More Intense Flash Floods Hit Overdeveloped Real Estate, Destroying Main Street USA “On Memorial Day weekend, a catastrophic flash flood ripped through a town founded four years before the Declaration of Independence was signed. Water crashed through walls, exploded through heavy doors and destroyed businesses up and down the once-kitschy Main Street in Ellicott City, Maryland. It would have been called a 1,000-year flood, had the same destructive deluge not crashed through town just two years earlier.” (CNBC)
  4. Starbucks Imports an Upscale Italian Bakery to Combat a Slowing U.S. Market “Starbucks may be a coffee behemoth, but it’s doubling down on food as part of its efforts keep growing. On Tuesday, the Seattle-based company is opening the first U.S. standalone Princi, an upscale Italian bakery chain that Starbucks backed in 2016 and agreed to license globally. The standalone Princi, which includes an oven for on-site baking and a manual espresso machine, is located in Seattle, making Starbucks’ home market the test case for the company’s upscale retail strategy.” (Fortune)
  5. Zillow Will Offer Property Management Tools to Renters and Landlords “The company, which says its web sites and apps reach 35 million renters every month, will allow rental-seekers to apply for multiple rentals with one application, get access to a credit report provided by Experian, and pay rent online with either a debt or credit card. Landlords and property managers will be able to use Zillow as a one-stop shop for various tasks, instead of using multiple vendors to perform background checks, collect applications, process rent payments, and more.” (MarketWatchThe ‘Backsies’ Billionaire: Texan Builds Second Fortune from Wreckage of Real Estate Empire He’d Sold “John Goff, one of America’s savviest commercial real estate investors, says he “wasn’t smart enough” to have seen the Great Recession coming in 2007. But the billionaire had an inkling. At the time he was chairman of the board of Fort Worth-based Crescent Real Estate, one of the nation’s biggest REITs, with a portfolio of 54 office buildings. “Every asset we had was getting an offer,” Goff recalls. But when he surveyed the landscape, “I didn’t understand the pricing, found nothing to buy,” he says. So in August 2007 he did the only thing that made sense: He sold.” (Forbes)
  6. Why Have Special Servicers Owned Some CMBS Properties for Half a Decade? “Outwardly, commercial mortgage-backed securities (CMBS) markets have shined over the last year, with the rate of loans that are at least 30 days delinquent declining in June below 4 percent for the first time since the financial crisis. The proportion of delinquent loans has fallen in all but one of the last 12 months, down to 3.95 percent from 5.75 percent in June 2017. But while fewer properties are lapsing into missed payments than at any time over the last decade, the picture is less sanguine for investors angling to recover misbegotten debt on assets languishing in foreclosure.” (Commercial Observer)
  7. Google Is Behind the $500 Million Midlothian Data Center Project That Could Bring 40 Jobs “Tech giant Google, through its parent company, Alphabet, has purchased land for a data center in the Ellis County town of Midlothian. The Dallas Morning News reported in June that the Midlothian city council approved a 100 percent personal property tax abatement and 85 percent improvement tax abatement over a ten-year period for the development of a data center in town by a mystery company called Sharka LLC. Major corporations often do business with local entities under pseudonyms until they're ready to go public.” (Dallas Morning News)
  8. What Does the T-Mobile/Spring Merger Mean for Wireless Tower REITs? “In Moody’s view, if the merger is completed, it would temper the organic growth rates of tower REITs and increase lease non-renewals, which would translate to the affected tower sites generating lower revenue, as compared to a scenario in which T-Mobile and Sprint remained independent companies. To streamline costs and achieve synergies, the combined T-Mobile/Sprint plans to decommission 35,000 towers in the 2-3 years following the merger’s close and to add 10,000 new sites for a total of 85,000 towers, down from the 110,000 towers that the two carriers used at the end of 2017.” (Commercial Property Executive)
  9. Private Equity CRE Activity Falls in Q2 “In its earnings call earlier this month Blackstone CEO Stephen Schwarzman confirmed that it is set on raising funds for its next Blackstone Real Estate Partners Fund in the next several months. ‘We expect our fundraising super cycle to bring the firm’s total AUM above the $500 billion milestone, likely in the first half of next year,’ Schwarzman said. As it does, the giant and prolific private equity player will be entering an environment of falling deal flow, if current trends continue.” (
Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.