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

The New York Times looks at what compromises the Trump administration would have to make to get the corporate tax rate down to 15 percent. Kayne Anderson Real Estate Advisors has been quietly building an alternative properties empire, reports Forbes. These are among today’s must reads from around the commercial real estate industry.

  1. What Would It Take for Trump to Get His Corporate Tax Wish? “Some of these tax subsidies are considered untouchable, like the deduction for employee health care costs. But others are expendable. One of the biggest is the interest deduction. Its elimination would raise $700 million over 10 years, the Tax Policy Center estimates. Many economists like the idea of eliminating the deduction because it favors borrowing over other forms of raising capital, like issuing stock. But big borrowers like real estate developers love the deduction, and Mr. Trump hasn’t yet said that he’s prepared to scrap it.” (The New York Times)
  2. New York Apartment Vacancies Projected to Soar “A new report predicts New York City apartment vacancy rates will soar to more than 11% by the end of next year. The scenario, which some local housing analysts rejected, would mean a grim reckoning for landlords. The forecast, by Ten-X Commercial, an online marketplace for real estate, said rents will slide as thousands of apartments in new buildings come on the market.” (Wall Street Journal, subscription required)
  3. A Unique Real Estate Bet Takes Shape at Energy Investing Giant Kayne Anderson “Quietly, the vaunted energy investor is building a new investing niche, this time in real estate. Over the past decade, Kayne Anderson’s real estate private equity investing platform has grown from virtually nothing to $5 billion in assets. The business, Kayne Anderson Real Estate Advisors (KAREA), has built a toehold in markets like senior housing and medical office properties that are beginning to attract the world’s biggest pools of pension and sovereign wealth money, as they hunt for safe yields.” (Forbes)
  4. U.S. Attorney Subpoenas Kushner Cos. Over Investment-for-Visa Program “Kushner Cos., the New York property development business owned by the family of White House senior adviser Jared Kushner, has been subpoenaed by New York federal prosecutors regarding its use of an investment-for-immigration program, according to people familiar with the matter. The subpoena concerns at least one Jersey City, N.J., development financed in part by a federal visa program known as EB-5.” (Wall Street Journal, subscription required)
  5. Aldo to Buy Vince Camuto in a Merger of Shoe Brands “Aldo, the privately held Canadian shoe company, has agreed to acquire the footwear and accessories operations of the Camuto Group, the company founded by the fashion impresario Vince Camuto, who died in 2015. The takeover will give Aldo, which makes its own shoes and sells them in thousands of stores around the world, a bigger footprint at a moment when fashion brands are seeking growth through mergers and acquisitions. Terms of the deal, which was confirmed by the companies, were not made public.” (The New York Times)
  6. CMBS Mortgages Lead Expansion of Commercial Lending in U.S. “According to CBRE, commercial real estate lending in the U.S. continued to grow in Q2 2017, led by a surge in CMBS mortgages. Despite an increase in short-term interest rates by the Federal Reserve in June, capital markets remained favorable in Q2 2017, with rising equity prices, tight spreads and limited volatility. The CBRE Lending Momentum Index, which tracks the pace of U.S. commercial loan closings, shows that loan closings edged higher between March and June, and are 27% above the year-earlier level.” (World Property Journal)
  7. Honey, I Shrunk the Store. And My Profits “While the shrinking of store fleets gets a lot of attention, another dynamic is becoming important. Increasingly, major retailers are down-sizing the average size of their prototypical store. In some cases, this is a solid growth strategy. Traditional format economics often don't allow for situating new locations in areas with very high rents or other challenging real estate circumstances. Target's urban strategy is one good example. In other situations, smaller formats allow for a more targeted offering, as with Sephora's new studio concept.” (Forbes)
  8. CoreLogic Acquired Real Estate Consulting and Tech Firm Clareity “Real estate technology powerhouse CoreLogic has acquired one of the industry’s most well-known technology and consulting firms, Clareity. The deal closed yesterday for an undisclosed sum. CoreLogic, a publicly-traded firm with a market cap of $3.8 billion, offers global property information and analytics, including its public records product Realist and data aggregation and distribution platform Trestle. CoreLogic’s Matrix multiple listing service system serves 600,000-plus MLS subscribers — more than any other MLS vendor nationwide.” (Inman)
  9. Sheldon Silver’s Conviction Was Overturned. What Does It Mean for Albany Corruption? “Two weeks ago, a panel of federal appeals court judges overturned the corruption conviction of former New York State Assembly Speaker Sheldon Silver, who was found guilty of taking more than $4 million in bribes in exchange for doing political favors. After four decades of representing the Lower East Side of Manhattan, the 73-year-old Silver was convicted of honest services fraud, extortion and money laundering on Nov. 30, 2015. He was sentenced to 12 years in federal prison in May 2016.” (Commercial Observer)
  10. Across D.C., a Resurgence of the Small Neighborhood Grocery Store “Good Food Markets is just one of a handful of neighborhood grocery stores that have opened across the District recently, part of what appears to be a resurgence of small-scale groceries catering to neighborhood residents — in stark contrast to the trend of disappearing mom-and-pop stores in small towns across the country. Even as more openings are in the pipeline for large retail chains such as Whole Foods and Wegmans, the smaller neighborhood stores are making their mark.” (Washington Post)
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