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10 Must Reads for the CRE Industry Today (December 21, 2018)

Analysts worry the high amount of investment in self-storage properties may have outpaced demand for self-storage space, reports the Wall Street Journal. Forbes offers a 2019 real estate investment preview. These are among today’s must reads from around the commercial real estate industry.

  1. 10-Year Treasury Yield Holds Near 9-Month Low Even as Stocks Continue Post-Fed Slump “Treasury yields barely budged on Thursday despite another big selloff in stocks a day after the Federal Reserve’s fourth interest-rate increase of 2018. Wednesday’s rate move sparked an immediate rally in U.S. government paper, but investors didn’t continue their rush into the perceived safety of bonds on Thursday. The bond market’s relative stability came even as the S&P 500 and the Dow Jones Industrial Average were both sharply lower Thursday.” (MarketWatch)
  2. Got Junk? Self-Storage Investors Hope So “Storing people’s stuff may have become too profitable a business for its own good in recent years. Analysts and investors are worried that the self-storage industry has attracted so much investment during a years-long bull run that America’s for-rent storage space may be outpacing the volume of the country’s excess belongings. Self-storage stocks have surged since the economy began bouncing back from 2008’s housing collapse.” (Wall Street Journal, subscription required)
  3. Office Workers Are Getting Squeezed “Co-working spaces are no longer just for freelancers with laptops. For large companies, flexible office schemes spell lower real-estate costs. Some 44% of multinationals surveyed by Knight Frank, a global property consultancy, expect flexible or co-working spaces to make up between 5% and one fifth of their office square footage three years from now, up from 27.3% at present. That shift, though, might mean less elbow room, based on what companies told Knight Frank they expect to do with their offices over the next three years.” (Forbes)
  4. Dallas Real Estate Developer Mark Ablon Makes It Official: He’s Running for Mayor “After months of rumors and a paperwork tease that all but confirmed his intentions, Dallas real estate developer Mike Ablon officially announced Wednesday that he will run for mayor. Ablon — a fifth-generation Dallasite — has a short political résumé but helped reinvigorate the Design District and recently spearheaded the effort to break the stagnation surrounding development of the Trinity River park.” (Dallas Morning News)
  5. Rent Prices Are Doing Something Unexpected in Some of the Country’s Most Expensive Cities “In cities like Seattle, the rent has indeed gotten too damn high — so high, in fact, that prices have flattened. Rent prices in Seattle, the home of Amazon’s increased by just 0.3% in October — down from a rate of nearly 4% a year ago, according to a new report released by global real-estate data firm CoreLogic. That represents the slowest pace of rent growth for Seattle since May 2010. ‘While employment growth helps feed rent growth, this relationship doesn’t always hold up, especially for cities with very high rents,’ said Molly Boesel, principal economist at CoreLogic.” (MarketWatch)
  6. 2019 Real Estate Investment Preview “2019 will be much like 2018 – but with a bit more anxiety. The fundamental forces that have driven rents and home prices higher – more demand for housing than supply - will continue unabated. There just hasn’t been enough construction over the last years to keep up with the demand that is increasingly concentrated in big cities (but not all of them). And – good news - in these big cities the demand is mainly for rentals.” (Forbes)
  7. Houston Real Estate Developers Acquire Sharpstown Mall “PlazAmericas, the former Sharpstown shopping center that has struggled to find its footing as regional malls have fallen out of shoppers’ favor, has a new owner that wants to turn around the property while maintaining the diverse culture, particularly Latino, that exists there today. Baker Katz, a Houston commercial real estate firm, has purchased the property from a Philadelphia financial company that acquired mall out of bankruptcy about a decade ago.” (Chron)
  8. RFR Closes $180M Sale of 160 Fifth Ave. Office Condo “Aby Rosen’s RFR Holdings tied a bow on its $180 million sale of the office portion of 160 Fifth Avenue. The sale to nonprofit Simons Foundation closed at a price of $180.75 million, a source close to the transaction told The Real Deal. That works out to nearly $1,480 per square foot. A spokesperson for RFR declined to comment, and a representative for Simons could not be immediately reached.” (The Real Deal)
  9. White Oak Healthcare Buys $700M Loan Portfolio “White Oak Healthcare Finance caps off 2018 with a major addition to its holdings. The healthcare industry lender purchased a $700 million group of skilled nursing and senior housing loans from Capital One Healthcare and its participant banks. White Oak hasn’t publicly shared additional details on the portfolio, nor has Capital One. A spokesperson for Capital One told Commercial Property Executive that the company is not able to provide additional information on the transaction at this time.” (Commercial Property Executive)
  10. Amazon’s 4-Star Stores Are All About Customers’ Data “The apparent randomness of the store’s inventory underscores its reliance on data to curate its selection. Take, for example, the store’s ‘Top-Selling Around Berkeley’ section, which included a jar of CeraVe moisturizing cream, an Amazon Basics six-outlet surge protector (two-pack), the book White Fragility by Robin DiAngelo, and an Oral-B electric toothbrush all together on a small table. Perhaps a cultural anthropologist could derive meaning from such an aggregation, but not me. While this hodgepodge, algorithmic aesthetic can work online, it is disorienting in the real world.” (Slate)
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