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10 Must Reads for the CRE Industry Today (February 21, 2019)

U.S. and China are on the edge of a new trade deal, reports Reuters. The New York Times looks at the rise of WeWork. These are among today’s must reads from around the commercial real estate industry.

  1. U.S., China Sketch Outlines of Deal to End Trade War—Sources “The United States and China have started to outline commitments in principle on the stickiest issues in their trade dispute, marking the most significant progress yet toward ending a seven-month trade war, according to sources familiar with the negotiations. The world’s two largest economies have slapped tit-for-tat tariffs on hundreds of billions of dollars of goods, slowing global economic growth, skewing supply chains and disrupting manufacturing.” (Reuters)
  2. The Rise of the WeWorking Class “Imagine you traind an artificial intelligence on a comprehensive stock-photo set of every boutique-hotel lobby from Palm Springs to Stockholm to Milan, then connected it to a five-story 3-D printer fully furnished with pendant-dome lamps, waxy leaves and old-school hip-hop lyrics. The output would be a WeWork. So much serene, lavish and mechanical attention is allocated to every detail: the neon and the daybeds and the fiddle-leaf figs, the wallpaper and the playlists and the typefaces.” (The New York Times)
  3. Affordable Housing: 11 Ways the Real Estate Industry Can Help “A lack of affordable housing remains a serious issue. Many Americans are being priced out of the cities they work in, and families are struggling to provide shelter for their children. This is not just a personal issue: It’s a social one — and one with long-term impact. To find out some steps that can be taken to tackle the problem, we asked the experts of Forbes RealEstate Council how people in the real estate industry can make a positive impact on the housing market in order to help address the issue of housing affordability.” (Forbes)
  4. New York Property Firm Hit the Jackpot. Then Amazon Pulled Out “There may be nobody who lost more from Inc.’s pull out of Queens than the real-estate investors at Savanna. The New York-based property firm was one of the biggest beneficiaries of Amazon’s decision to locate a new headquarters in Long Island City. The retailer agreed to rent about one million square feet in Savanna’s green glass office tower near the East River. Savanna moved quickly to capitalize. It approached lenders to borrow $750 million against the value of the 53-story tower, which Savanna believed would more than double in worth after landing its famous new tenant, according to people familiar with the matter.” (Wall Street Journal, subscription required)
  5. Fed’s Bullard Says Economy Is Slowing Down, But Doesn’t See Recession “St. Louis Fed President James Bullard said Thursday he thinks the economy is slowing but he's not too worried about the risk of a recession. ‘It does seem the economy is slowing down some - not terribly - but some,’ Bullard said in an interview on CNBC. Bullard said he expects the economy to slow to a 2.25% annual rate this year from 3% in 2018. ‘That's not a terrible outcome,’ he said. Bullard, who is a voting member of the Fed's interest-rate committee this year, said recession probabilities have "ticked up" in economic models, but added ‘I don't really think we're in any trouble.’” (MarketWatch)
  6. New York Official Says Amazon Deal Was Botched from the Start “The city’s top economic development official admitted Thursday that the Amazon deal was botched from the get-go. ‘The rollout didn’t go as smoothly as it could have. I think we all regret that,’ James Patchett, president of the Economic Development Corporation, said at a Crain’s Business forum in Midtown.” (New York Post)
  7. U.S. Existing Home Sales Fall Sharply to Three-Year Low “U.S. home sales fell in January to their lowest level in more than three years and house prices rose only modestly, suggesting a further loss of momentum in the housing market. The National Association of Realtors said on Thursday existing home sales dropped 1.2 percent to a seasonally adjusted annual rate of 4.94 million units last month. That was the lowest level since November 2015 and well below analysts’ expectations of a rate of 5.0 million units. December’s sales pace was revised slightly higher.” (Reuters)
  8. Real Estate Investors Are Missing Out on a Major Source of Passive Income “With the cost of housing rising and people buying fewer homes, it’s important to plan ahead. Real estate investors need to anticipate the next potential market change and start thinking of new potential passive income streams. To date, I’ve asked more than 831 real estate investors, through social media posts and live interviews, certain questions to learn more about their business. What I learned astounded me. A lot of real estate investors struggle with technology. It's not their fault -- they are experts in getting deals, not learning about the latest tech trends.” (Entrepreneur)
  9. Office Boston Report—Winter 2019 “Boston’s diverse economic base and solid fundamentals are pointing toward what seems to be another banner year for the office sector. Rooted in education, life sciences and technology, Boston is drawing in major companies with tax incentives, leading universities and an educated workforce. Furthermore, the metro leads in technological advancement and medical innovation.” (Commercial Property Executive)
  10. New NYCHA’s Monitor Strange Political Bedfellows “Federal officials have picked their monitor to oversee the embattled New York City Housing Authority, the City has learned: a former prosecutor with ties to Governor Andrew Cuomo, former mayor Rudy Giuliani, and controversial activist Lenora Fulani. Bart Schwartz, head of the private investigations firm Guidepost Solutions and a former Assistant U.S. Attorney in New York’s Southern District, has been selected as the NYCHA monitor by the federal government, two sources familiar with the selection told the City.” (New York Magazine)
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