10 Must Reads for the CRE Industry Today (August 10, 2106)

10 Must Reads for the CRE Industry Today (August 10, 2106)


  1. ‘Commercial Bank’ is a Misnomer. ‘Real Estate’ Bank is More Apt “In 1955, commercial and industrial loans were 40 percent of total banking loans and real estate loans only 25 percent. The great banking transition set in after 1984. The share of C&I loans kept falling, down to about 20 percent of total loans, while real estate loans rose to about 50 percent, with a bubble-induced peak of 60 percent in 2009. In this remarkable long-term shift, the share of real estate loans doubled, while the share of commercial and industrial loans dropped in half. The lines crossed in 1987, three decades ago and never met again, despite the real estate lending busts of the early 1990s and of 2007-9.” (RStreet)
  2. Silicon Valley Real Estate Shows Almost No Slowdown in Tech “Despite a slowdown in tech startup funding and a hammering of certain public tech stocks earlier this year, Bay Area commercial real estate is as hot as ever. ‘There has been a lot of negative banter about tech slowing,’ said Hudson Pacific Properties CEO Victor Coleman. In fact, quite the opposite is happening, he said. ‘Even as certain private companies reign in on expenses, they continue to view the growth of successful business lines and recruiting as paramount, which impacts their space needs positively,’ Coleman said.” (CNBC)
  3. Real Estate Funds: Who’s on Top? “Real estate investing is one of the primary ways to help clients diversify their portfolios. Clients who have the means and the time to invest directly in real estate may be able to glean benefits such as creating tax deferrals and controlling cash flow. But for most clients who want to add a non-correlated asset to their investment mix without the considerable troubles of investing in property, a real estate fund is the more likely choice. Scroll through to see the top real estate mutual funds ranked by three-year returns. Only funds with at least $100 million in assets are listed.” (Financial Planning)
  4. Global Net Lease Acquisition to Create $3.3B Mega-REIT “Global Net Lease Inc. (GNL) is set to acquire American Realty Capital Global Trust II, the two companies announced upon both of their board of directors unanimous approval. The acquisition will create a global mega-REIT with an enterprise value of approximately $3.3 billion. Upon closing, Global II shareholders will own a 14 percent slice of the resulting company. By acquiring the outstanding common stock of Global II for approximately $247 million, GNL will put together two net lease portfolios with a combined 345 properties with 99 tenants.” (Commercial Property Executive)
  5. These Retailers Have Stores in the World’s Best Cities “When you're out traveling the world, odds are you'll run into one of these retailers. In a new report, JLL real estate studied 240 international brands across what it considers the most attractive 140 cities for retailers. These cities include New York, Tokyo and Jakarta, Indonesia, and account for one-third of consumer spending. The top three brands were born in the USA. But European labels make up the bulk of the list, rounding out the top 10.” (CNBC)
  6. 2016 Farm Real Estate Value and Land Rent “South Dakota’s farm real estate value, a measurement of the value of all land and buildings on farms, decreased from 2015, according to USDA’s National Agricultural Statistics Service. Farm real estate value for 2016 averaged $2,250 per acre. This is down $70 per acre or 3 percent lower than 2015. Cropland value decreased 6 percent from 2015 to $3,520 per acre. Dryland cropland value averaged $3,500 per acre, down $200 from 2015. Pastureland, at $1,020 per acre, increased $40 from 2015.” (Farm Forum)
  7. Lorber Touts Trump’s Economic Policy Following Appointment to Advisory Team “Howard Lorber says presidential candidate Donald Trump’s plan to reduce tax rates for most Americans and simplify the tax code will jumpstart the economy. ‘We all know why we need tax decreases and these will be the biggest tax decreases since the Reagan era. We need it to get the country going again. That’s pretty obvious,’ the Vector Group and Douglas Elliman chair told CNBC Tuesday. Lorber was speaking as one of the appointees to Trump’s economic policy team, which also includes real estate titans such as Vornado Realty Trust’s Steven Roth and Colony Capital founder Tom Barrack.” (The Real Deal)
  8. Moody’s: This Retail Sector is on Fire—Even in Physical Space “The off-price retailer sector will continue to build momentum and outperform the apparel retail segment during the next five years. That’s according to a new report, ‘Off-Price Retailers Continue to Build Momentum on Value Appeal,’ by Moody's Investors Service. Off-price retailers are anticipated to experience apparel revenue growth of 6% - 8%, outperforming the broader apparel segment by a collective 4% in the timeframe.” (Chain Store Age)
  9. Barclays Center Owner Prokhorov to Refinance Arena’s Debt “Mikhail Prokhorov, the Russian-born billionaire owner of the Brooklyn Nets and the Barclays Center, is taking advantage of rock-bottom interest rates in the U.S. municipal bond market to refinance about $480 million of debt issued in 2009. The 17,732-seat arena, which is also home to the National Hockey League’s New York Islanders, will generate operating profits of $46 million before paying debt service in 2016-2017, according to the preliminary offering statement.” (Bloomberg)
  10. Small Town North of Dallas Could Become Hub of Medical Cannabis Industry “A cotton gin that sat empty for decades in this small North Texas town could be filled next year with the first cannabis plants legally grown in the state. The man investing in the old buildings plans to open a greenhouse and processing facility to make cannabis oil as a medical treatment for people with severe epilepsy. A Texas statute enacted in 2015 paves the way for the cultivation of non-psychoactive cannabis for that purpose. It was  the only marijuana-related bill approved in the last legislative session.” (Dallas Morning News)
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