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10 Must Reads for the CRE Industry Today (August 15, 2017)

Investors are buying up securities sold by Fannie Mae and Freddie Mac, reports the Wall Street Journal. Forbes claims an increasing number of real estate investors are planning to sell their properties. These are among today’s must reads from around the commercial real estate industry.

  1. Investors Take On Mortgage Risk from Fannie Mae, Freddie Mac “Investors are snapping up a new type of security sold by Fannie Mae and Freddie Mac, increasingly assuming the risks of mortgage defaults from taxpayers and powering a quiet transformation of the housing giants after almost a decade of government control. Fannie and Freddie have sold roughly $48 billion of the securities since 2013 to a broadening group of buyers including asset managers and insurance companies.” (Wall Street Journal, subscription required)
  2. Amazon to Issue Up to $16 Billion in Debt to Fund Whole Foods Acquisition “ Inc. is planning to issue up to $16 billion in debt to fund its planned acquisition of Whole Foods Market Inc., Moody’s Investors Service said Monday. The ratings agency assigned the deal a Baa1 rating and revised Amazon’s credit outlook to positive from stable. The move ‘reflects our view that despite the increase in debt, the Whole Foods acquisition is an immediate credit positive for the company on a variety of fronts,’ Moody’s Vice President Charlie O’Shea wrote in a note.” (MarketWatch)
  3. Homebuyers Put Less and Less Skin in the Game, Adding to the Market’s Overall Risk “It feels like déjà vu in mortgage land all over again. Homebuyers are increasingly opting to put less money down when purchasing their homes, increasing their risk should the housing market, and specifically home prices, falter yet again. When home prices crashed in the last decade, millions of borrowers fell underwater on their home loans, prompting a foreclosure crisis of epic proportions. It all begs the question, could it happen again?” (CNBC)
  4. Chicago Property Market Heats Up as Food Companies Pile In “In Chicago’s trendy Fulton Market district, a once gritty area known only for Oprah Winfrey’s Harpo Studios, construction crews have started facade work on a new headquarters for McDonald’s Corp., which is returning to the city after more than four decades in the suburbs. McDonald’s, now building at the former Harpo site, isn’t alone in making that move. Conagra Foods Inc., Hickory Farms Inc. and other traditional American heartland companies have shifted major operations to Chicago in recent years as well.” (Wall Street Journal, subscription required)
  5. Investors Are Walking Away from Property “New research from the Residential Landlord Association suggests that a significant number of property investors are set to turn their backs on life as a landlord. Its survey of 3,000 landlords found that almost a quarter (22%) plan to sell at least one of their properties in the next 12 months, with just a paltry 18% considering expanding the size of their portfolio. It follows research from the National Landlords Association, which found landlords are losing confidence in their ability to rely on steady rental yields in order to make their investments work.” (Forbes)
  6. Here Are the Best (And Worst) Places to Retire “As they approach retirement age, older Americans are becoming steadily more pessimistic about their future economic prospects. Where they choose to spend their golden years could make all the difference. A little more than half of working-age households are at risk of being unable to maintain their current standard of living in retirement, according to the National Retirement Risk Index measurement from the Center for Retirement Research at Boston College.” (CNBC)
  7. Public Advocate Letitia James to Reveal Banks Backing Property Owners on ‘Worst Landlords’ List “You’ve met New York City’s worst landlords — now meet their banks. Public Advocate Letitia James will roll out a list of the financial organizations backing the property owners on her office’s “Worst Landlords Watchlist” Tuesday — with 10 banks lending more than $300 million in mortgages for landlords who landed on the list. James’ office reached out to the banks asking them to change the way they loan to landlords flagged by her office — taking it into account when considering a loan along with current violations, hazardous conditions or harassment findings.” (New York Daily News)
  8. CIM Buys Brooklyn Office Building in $171M Deal “CIM Group has agreed to purchase, for a gross sale price of $171.0 million, the 317,600-square-foot vintage Class A office building at 16 Court St. in Brooklyn. SL Green Realty Corp. was the seller. SL Green had acquired the 36-story building in 2007 for $107.5 million through a joint venture with Joseph P. Day Realty—according to information provided by Yardi Matrix—and in 2013 took full ownership.” (Commercial Property Executive)
  9. This Office Wants You to Pay $48 to Work There While You Drink Wine “It’s work, with wine. When you rent a desk at Pourt, a shared workspace with a cafe up front in the East Village neighborhood of New York City (35 Cooper Square), food and drink is included. Workspace rates go for $10 an hour, or a day pass for $48, and the biggest work perk is every dollar you spend can go towards food. Walk-ins are also welcome to buy refreshments separately in the cafe area, but if they want to use the wi-fi longer than 30 minutes, they’ll have to pay the hourly rate.” (Money-ish)
  10. Major Seattle Real Estate firm Cushman & Wakefield Commerce Is Being Sold “Cushman & Wakefield Commerce, one of the larger commercial real estate firms in Seattle and Bellevue, is being acquired by the global Cushman & Wakefield group, with an eye toward expansion. The deal brings together two aligned but separate chains. The local Cushman & Wakefield Commerce brokerages employ about 750 people in markets like Seattle, Las Vegas and Salt Lake City.” (Seattle Times)
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