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10 Must Reads for the CRE Industry Today (December 14, 2018)

The Minneapolis City Council voted to eliminate single-family zoning, reports The New York Times. The Wall Street Journal looks at the five retailers that are likely to do well this holiday season. These are among today’s must reads from around the commercial real estate industry.

  1. Minneapolis, Tackling Housing Crisis and Inequity, Votes to End Single-Family Zoning “In a bold move to address its affordable-housing crisis and confront a history of racist housing practices, Minneapolis has decided to eliminate single-family zoning, a classification that has long perpetuated segregation. The Minneapolis City Council voted last Friday to get rid of the category and instead allow residential structures with up to three dwelling units — like duplexes and triplexes — in every neighborhood. Minneapolis is believed to be the first major city in the United States to approve such a change citywide.” (The New York Times)
  2. Las Vegas Housing Weakness Signals the Slowdown Is Spreading “The national housing slowdown is spreading to markets like Las Vegas and Phoenix, where prices still haven’t reclaimed their pre-crisis peaks. After home values rose sharply this year, the market has shifted in recent weeks. Prices fell slightly in November while the inventory of unsold homes in the Las Vegas region has roughly doubled compared with a year earlier, according to the Greater Las Vegas Association of Realtors. Existing home sales slowed nearly 12% in November compared with a year earlier.” (Wall Street Journal, subscription required)
  3. WeWork’s Newest Challenger—A Billion-Dollar High-Rise for Tech Startups—and Facebook “Standing amid the debris of renovation—steel bars and exposed concrete beams, step ladders and workers’ lunch pails—Matthew Harrigan paints the scene. On the wide-open second floor, startup staff and big company tech workers will eat at long benches. They’ll take a break on the terrace, where Grand Central Terminal frames the view. And in the offices upstairs, they’ll get down to work, creating the country’s next great tech successes.” (Forbes)
  4. Look to These Five Retailers to Bring Holiday Cheer “Investors have every reason to expect that this holiday season will be even better for retailers than the last one. Low unemployment, rising wages and strong consumer confidence provide prime conditions for spending. The calendar is ideal, too, with Thanksgiving coming early and Christmas coming late. Finally, with many chains no longer in business, the remaining retailers have more business to pick up. Toys ‘R’ Us, Sports Authority, RadioShack, The Bon-Ton, Payless Shoes, H.H. Gregg, The Limited, Gymboree, and Gander Mountain have all disappeared from the retail landscape.” (Wall Street Journal, subscription required)
  5. Divorce, Macklowe Style: How an $82M Stake in NYC Properties Will Be Halved “Harry and Linda Macklowe’s 57-year marriage — and their bitter 14-week divorce trial — can be boiled down to this: one of New York’s most storied developers may keep a property empire in which his stake has been valued at $82 million, but he must pay his ex-wife $41 million for the privilege. In a 64-page decision on Thursday, Judge Laura Drager closed the book on one of real estate’s ugliest divorces, which shone a light on little-known aspects of real estate development.” (The Real Deal)
  6. Shoppers Return to Liquidating Sears Stores, Boosting Same-Store Sales “Customers who abandoned Sears Holdings in favor of shopping online and other discount retailers have returned for its liquidation sales. For the first time in years, the 125-year-old retailer, which filed for bankruptcy in October, saw quarterly same-store sales grow, according to company filings. The gain was attributed to a jump in customers lured by liquidation sales at closing stores. Sears closed 28 Kmart locations and 73 domestic Sears stores during the quarter that ended Nov. 3.” (CNBC)
  7. The Architecture of Parking Garages, from Ghastly to Glorious “Not all big garages are alike, thank goodness. While most have little to offer except parking spaces, some cloak the essentials in architectural trappings. With the right budget and approach, infrastructure can even be fun. There’s a particularly good example in downtown Berkeley, and you can find my review here. The achievement with that city’s Center Street Garage is all the more impressive when you take stock of garages elsewhere. Here are a dozen other examples from near and far — and from clumsy to compelling, with concrete always in the mix.” (San Francisco Chronicle)
  8. Real Estate Math—How to Tell if an Investment Property Is a Good Buy “The question on every new investor's mind is simple: how do you know if an investment property will be profitable? Lucily, there are two easy formulas you can use to determine if an investment property is a good buy, financially. We've laid them out below. Read them over and take them to heart so that you have them at your disposal when you're ready to make a move.” (Forbes)
  9. Boston Trophy Tower Commands $455M “Skanska has sold 121 Seaport, its newly opened trophy office asset in Boston. The buyer, a joint venture between American Realty Advisors and Norges Bank Real Estate Management, paid $455 million for the fully leased, 400,000-square-foot office portion of the asset, according to Suffolk County records. The sale, one of Boston’s largest transactions this year, did not include the asset’s retail component. The tower’s approximately 50,000 square feet of retail on the first two floors sold to WS Development in March for $23 million.” (Commercial Property Executive)
  10. WeWork Branching Out to Facility Management for Enterprise Clients “Coworking giant WeWork continues to push the growth of its service targeting big corporate clients and plans to offer facilities management for it, Commercial Observer has learned. To spearhead the effort, WeWork has hired Maureen Ehrenberg, the former president of global integrated facilities management at JLL, to become its first global head of facilities management services, the company said. ‘The opportunity to build facilities management for the future, it’s just so incredible,’ Ehrenberg said. ‘It was just one of those opportunities that don’t come along often and I just could not resist.’” (Commercial Observer)
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