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10 Must Reads for the CRE Industry Today (December 20, 2017)

CNBC predicts holiday spending will be the highest in over a decade in 2017. The Wall Street Journal looks at the new rules for real estate dynasties. These are among today’s must reads from around the commercial real estate industry.

  1. Holiday Spending on Track to be Highest in 12 Years: CNBC Survey “Buoyant American attitudes on the economy look set to show up in plentiful, record-setting holiday spending this season. The CNBC All-America Survey found that average holiday spending intentions will top $900 for the first time in the 12-year history of the poll, eclipsing last year's estimate of $702 by a wide margin. The survey of 800 Americans nationwide, with a margin of error of plus or minus 3.5 percentage points, found a surge in the percentage of Americans planning to spend more than $1,000, to 29 percent from 24 percent.” (CNBC)
  2. A New Playbook for Real Estate Dynasties “Australia’s Lowy family, which built Westfield Corp. into one of the world’s largest shopping center owners, resembles other global real estate dynasties in many ways—but not when it comes to the critical question of maintaining control. ‘Westfield always was dominated by the family, but it was never meant to be one of those dynasties to be handed down,’ said Peter Lowy, Westfield’s co-chief executive in an interview.” (Wall Street Journal, subscription required)
  3. DDR to Spin Off Portfolio of Fifty U.S. and Puerto Rico Assets “The shopping center REIT, DDR Corp. (NYSE: DDR; $8.79; Market Capitalization: $3.2 billion) announced on December 14, 2017, its plans to spin-off a portfolio of 50 assets into an independent publicly traded REIT known as Retail Value Trust (RVT). Valued at $3.0 billion, RVT will encompass 38 continental U.S. assets, and DDR’s entire Puerto Rico portfolio of 12 assets. The spin-off will create two companies with distinct strategies.” (Forbes)
  4. Gary Cohn: We ‘Tried 25 Times’ to Cut Hedge Fund Loophole in Tax Reform Bill, but Failed “White House chief economic advisor Gary Cohn said the administration failed in its attempt to cut a hedge fund tax loophole even though it was a key campaign promise. Axios co-founder Mike Allen asked Cohn what was the one change he would make to the tax reform bill. ‘We would have cut carried interest,’ Cohn said Wednesday. ‘We probably tried 25 times.’” (CNBC)
  5. In America’s Most Middle-Class City, the Malls Are Dying. Here’s Why “The mall is failing in the most middle-class city in America, and it isn’t because its 39,000 residents don’t shop. Shoppers here spend about 30% more than state and national averages, according to the Census Bureau. Sales-tax receipts have grown 20% in the county since 2011, and city officials say there is not one vacancy in Wausau’s downtown shopping district.” (Wall Street Journal, subscription required)
  6. Amid Flat Market, Wells Fargo Eeks Out First Price for 2017 NYC Commercial Lending “The Wells Fargo wagon pulled ahead of its Big Apple competition this year, as the global bank slid into first place among originators of commercial loans in New York City, according to new data from CrediFi. The San Francisco-based institution wrote 49 commercial real estate loans cumulatively worth about $4 billion in New York City in 2017, edging out Morgan Stanley and Deutsche Bank, which held the top spot a year before. Signature Bank and JPMorgan Chase, which each originated nearly 400 commercial financings with much smaller average loan amounts, rounded out the top five.” (Commercial Observer)
  7. 2017 Was the Year of Retail’s Existential Reckoning “The stress had been building on American retailers for some time, but in 2017, it simply became too much to bear. Before the year was half finished, it was on track for more store closures in the US than the great recession in 2008. Richard Hayne, CEO of Urban Outfitters, went so far as to liken the situation to the pop of the housing bubble that started the recession. The research firm Fung Global Retail & Technology predicts there will be more than 9,400 stores shuttered by the time this year is done.” (Quartz)
  8. Judge Gives Macklowe’s Wife 60 Days to Decide on Park Ave. Pad “He may never be rid of her! The estranged wife of billionaire Big Apple developer Harry Macklowe has another 60 days to decide whether she wants to keep one of the former couple’s adjacent Park Avenue pads or give it up, a Manhattan judge ruled Tuesday.” (New York Post)
  9. Three Need-to-Know Secrets of Investing in Real Estate “Particularly for those nearing or in retirement, real estate can be a fantastic way to generate stable cash flow while preserving their nest egg. It’s no secret that interest rates are at historical lows. This makes the normal retirement portfolio, which is usually realigned away from equities and into fixed income, not feasible unless you’re comfortable with seeing your principal balance decline over time or you are willing to significantly change your lifestyle. You shouldn’t have to make that choice when real estate can help you achieve your retirement goals.” (Forbes)
  10. Trump Tower Makes Play for Boutique Companies “The Trump Organization has finally divided an office floor at Trump Tower into pre-built spaces with views and some terraces — and plenty of security. The company being run by the president’s sons Don Trump Jr. and Eric Trump, along with executive Allen Weisselberg, is thus activating a popular leasing tactic that appeals to smaller, boutique companies. Because the Trumps are pre-building the offices with upscale fixtures and finishes, smaller companies can lease and move in without the drama of design along with the weeks or months of waiting for a build-to-suit office.” (New York Post)
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