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10 Must Reads for the CRE Industry Today (December 12, 2018)

WeWork has opened a new office in San Francisco’s Salesforce Tower, reports the San Francisco Chronicle. Curbed looks at whether increasing urban density is the solution to climate change. These are among today’s must reads from around the commercial real estate industry.

  1. Foreign Investors Spurn U.S. Treasuries as Curve Threatens to Invert “A worrying sign of inversion in the U.S. Treasury bond curve is dulling the appeal of the developed world’s highest-yielding bond market for foreign investors. Overseas investors are reviewing their investments or shunning Treasuries as rates at the short end rise above those at the longer end and make it unprofitable for holders of these bonds to hedge their currency risks.” (Reuters)
  2. Vail Expansion Plan Goes Aggressive and Wipes Out “Vail Resorts Inc., which has been rapidly expanding to become one of the world’s largest owners of mountain resorts, started the new ski season with a crash. The company on Friday posted a bigger-than-expected quarterly loss, sending its share price plunging 17.9% to $223.25 during the trading session. It was the company’s biggest single-day drop since going public in 1997. While Vail usually reports soft numbers during the off-season, investors weren’t prepared for weaker revenue despite healthy sales of season passes for the winter season.” (Wall Street Journal, subscription required)
  3. WeWork Opens SF Office in Salesforce Tower “WeWork has opened offices in San Francisco’s Salesforce Tower — another milestone for a young company that is now the city’s fourth-largest office tenant. The three-story space in the city’s tallest building isn’t just rented out to clients; it will house a major cluster of WeWork employees, and will share headquarters status with New York, where the company was founded in 2010.” (San Francisco Chronicle)
  4. Starwood’s Israeli Bond Price Plummets as Mall Values Erode “Starwood Capital Group’s 2013 purchase of a group U.S. shopping malls has been a struggling investment for years. Now, that portfolio of shopping centers has become a losing bet in Israel, too. A recent Starwood bond offering that trades in Tel Aviv and is backed by seven malls is one of the worst-performing Israeli bonds this year. The bond price has fallen 42% since it was offered in March, rattling some bondholders who have asked if Starwood would consider buying back the bonds, some of these debtholders say.” (Wall Street Journal, subscription required)
  5. Your Shuttered Sears Store Could Soon Be Demolished. Here’s Why “If a Sears store near you has already closed or is in the process of closing, it's likely the owner of that property will opt to demolish it rather than find someone to fill the space. The bankrupt department store chain has already said it will shut 142 stores by year's end. And its future while it's in bankruptcy court proceedings is still uncertain, with a total liquidation being one potential outcome. That would mean more than 500 additional Sears and Kmart stores going dark.” (CNBC)
  6. As Cities Confront Climate Change, Is Density the Answer? “At a time when municipalities consider or enact climate action plans, two of the bigger urbanism stories of the last week—the passage of the Minneapolis 2040 plan, which will upzone the entire city, and a new effort to pass a statewide transit-oriented development proposal in housing-starved California—may, without meaning to, provide glimpses of what that kind of vision may resemble. Both proposals seek, first and foremost, to address equity, especially housing affordability.” (Curbed)
  7. Owners Spiff Up Buildings for New Office Tenants in 2019 “It’s that wonderful time of the year when many office tenants start honing in on future locations. Companies must consider location, as well as the physical look and amenities, all with an eye on attracting and retaining employees. Building owners and brokers are therefore primping their offerings with promises of lightning fast internet, spiffy new lobbies, glistening large windows and elevator cabs rising swiftly to newly landscaped roof decks.” (New York Post)
  8. Amazon Chooses Fort Worth’s Alliance Airport for Regional Air Hub and Hundreds of Jobs “Amazon is building a new regional air hub at Fort Worth’s Alliance Airport, bolstering its shipping business in a move that’s expected to create hundreds of jobs for the region. Amazon announced Tuesday that construction is underway on the facility located on the west side of the airport, with operations expected to begin next year. The new hub will support multiple daily flights, Amazon said.” (Dallas Morning News)
  9. Five Ways a Busy Professional Can Use Leverage to Become a Real Estate Investor “We live in a world of specialization. There are legal, medical, engineering and many other specialists. These experts spend a significant amount of time and intense study to become well-versed in their fields. This sometimes creates a blind spot when it comes to investing for retirement. That blind spot can fool someone into thinking that they will always be able to create income with specialized skills. It can also lead to financial apathy, causing retirement planning to become an afterthought, and left to someone else to manage. This can be a great gamble.” (Forbes)
  10. Amazon Go Food Store Opens in Seattle “Amazon on Wednesday opened a compact version of its cashier-less Amazon Go food stores, broadening its footprint in the bricks-and-mortar world in a move to add shops in places such as office lobbies and hospitals. Located in one of the company’s Seattle offices, the eighth Amazon Go store is near the original and a quarter of the size, at a mere 450 square feet — about the size of a New York City studio apartment.” (New York Post)
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