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10 Must Reads for the CRE Industry Today (December 29, 2016)

10 Must Reads for the CRE Industry Today (December 29, 2016)


  1. Real Estate: Through the Noise, Opportunities Exist “Morningstar's real estate coverage is trading at a 7% discount to our fair value estimates. We view themes in commercial real estate as generally defensive in nature, with lingering concerns about increasing bond yields pressuring property stocks globally by double-digit percentages. However, we continue to focus on underlying performance, which has remained healthy overall, as REITs have been focused on repositioning and strengthening their portfolios, deleveraging, and capital recycling. Construction of new property continues, however, as firms look for higher returns, putting into question levels of new supply as economic uncertainty remains.” (Morningstar)
  2. Top 5 real estate trends for 2017 “The real estate market is constantly evolving and 2017 is shaping up to be another year of change. If you're planning to buy a home in the new year (or you want to sell your existing home), it doesn't hurt to know a thing or two about what's trending in the markets. As we look ahead to the new year, here's what should be on your radar with regard to the housing markets.” (
  3. Last-minute spending surge lifts U.S. holiday shopping season “A jump in consumer spending in the final stretch of December significantly offset a slow start to the U.S. holiday shopping season, and is likely to help many retailers beat sales forecasts, industry research groups said on Tuesday. The December spending boost is in contrast to a muted November, when early holiday promotions and expectations among consumers that deals would always be available took a toll. Spending over the Thanksgiving weekend in November fell 3.5 percent from a year ago despite a strong jump in online sales, according to the National Retail Federation. ‘It was a hot start with Cyber Monday, followed by a lull for the last couple of weeks and then a big-bang finish,’ said Pete Madden, a director at retail consultancy AlixPartners. Sales data released on Tuesday showed the major shift in fortunes in late December.” (Reuters)
  4. Sears announces new round of store closings “Sears Holdings’ store portfolio continues to shrink. The struggling retailer told employees on Tuesday that it will close 30 Sears and Kmart stores in early 2017, reported Business Insider. The latest round of closures will bring the total number of stores that the retailer has closed this fiscal year to more than 200, according to the report, and leave it with fewer than 1,500 locations by early 2017.” (Chain Store Age)
  5. Stryker Co. Invests $130M in New Facility in Michigan “Stryker Co. recently announced the investment of more than $130 million to establish a new facility in Portage, Michigan. The company offers a diverse array of products and services in orthopedics, medical and surgical, neurotechnology and spine that help improve patient and hospital outcomes. The facility will create more than 105 jobs and likely feature a customer experience center, functioning showroom, R&D and bio-skills labs, as well as space for sales, marketing and support functions. As an incentive, the project has been awarded a $1 million Michigan Business Development Program performance-based grant. The city of Portage has offered support to the project in the form of property tax abatement, and the Kalamazoo County Brownfield Redevelopment Authority is offering a Brownfield redevelopment incentive.” (Commercial Property Executive)
  6. Mall developer Rick Caruso and his affiliates have donated $470K to City Hall “Retail impresario Rick Caruso has already made his mark on the Los Angeles landscape with shopping wonderlands like The Grove and The Americana, but now the developer is looking upward. Caruso’s latest project is 333 La Cienega, a 20-story luxury residential tower that would alter the skyline in Beverly Grove (13 of the 145 residential units would be earmarked for tenants earning very low and moderate incomes). The 240-foot tower would soar well above the neighborhood’s height restriction of 45 feet, requiring a zoning change from the city planning department. As the La Cienega tower moves to City Hall for final approval, the Los Angeles Times reports that, over the past five years, Caruso and his family members and employees have contributed about $470,000 to local politicians and their pet projects. Among them, a $125,000 donation to the Mayor’s Fund at the request of Mayor Eric Garcetti, a $200,000 contribution supporting the Measure M campaign, and $100,000 to Councilman Mike Bonin’s Los Angeles Forward project.” (Los Angeles Curbed)
  7. Developers chase a drug rehab center’s prime land in a once-seedy area “Beneath Edgewater’s looming condo towers, an aging drug-rehabilitation center housed in a converted motel — a last relic of this gentrifying neighborhood north of downtown Miami — is preparing to sell out. The Village South substance-abuse treatment program opened in the 1970s, when drugs, crime and the sex trade made Edgewater a place few outsiders dared tread at night, unless they bore hearts heavy with sin. Now high-rises have replaced the crumbling apartments and seedy flop-houses. The streets around the rehab center teem with construction crews. Like alchemists’ gold, Edgewater has transformed into a magnet for foreign investors and local workers seeking sleek urban condos without hefty Brickell rents. Owned now by a national nonprofit, the innovative and well-respected Village knows the cold, hard value of its land at Northeast Fourth Avenue and Northeast 31st Street — and Miami Beach developer Russell Galbut is ready to pounce.” (Miami Herald)
  8. Miami market settling into slowdown in 2017: real estate players “Miami’s real estate market experienced the first wave of a slowdown in condo sales at the start of 2016, with some experts warning it could lead to a recession by the end of the year. Twelve months later, South Florida real estate didn’t implode, but the industry is beginning to feel the pinch of a bear market. As we head into 2017, developers, brokers and investors believe construction financing for new projects will be harder to come by and condo sales will continue at a snail’s pace. The Real Deal spoke to major players in South Florida’s real estate game to weigh in on what to expect from now through next December. In downtown Miami, a saturation of projects marketed to buyers looking for units as investments has created too much inventory, said Dan Kodsi, developer of Paramount Miami Worldcenter and Paramount Bay.” (The Real Deal Miami)
  9. Vornado Pops Up in Metro DC “Vornado Realty Trust plans to spur a sea change in the multifamily market, starting with its new 699-unit The Bartlett luxury apartment community, just outside Washington, D.C., in Arlington, Va. Through its WhyHotel platform, the REIT has transformed a segment of The Bartlett into a pop-up hotel, and D-day for the endeavor is the very timely date of January 13, 2017, according to The Washington Post. ‘Our first 50-unit pilot goes live in the Washington, D.C., metro area in January 2017, just in time for the U.S. Presidential Inauguration,’ Vornado notes on the WhyHotel website. It was in 2013 when Vornado obtained the Arlington County Board’s approval for development of The Bartlett, which stands at 520 12th St. South in the Pentagon City area and holds the distinction of being the largest residential high-rise in Arlington County. And in June 2016, the doors of the $250 million property swung open to tenants for the first time, offering premier living accommodations and more than 40,000 square feet of coveted indoor and outdoor amenity space, as well as a Metro-centric location that places the building within 15 minutes of downtown D.C. But the 22-story, Maurice Walters Architect-designed tower’s debut to an eager population of renters was just part of the plan.” (Commercial Property Executive)
  10. Developers rush in to meet pent-up demand for multifamily units “For Louisville, the boom times are expected to continue into 2017 and beyond. Since 2014, more than $9 billion in capital has been injected into the local economy for new hotels, new office buildings, new distilleries and new housing, among other projects. As the housing market continues to recover from the national foreclosure crisis and the demand for apartments remains strong, there has been a spike in development of subdivisions and multifamily complexes in Jefferson County.” (Insider Louisville)
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