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10 Must Reads for the CRE Industry Today (February 22, 2016)

10 Must Reads for the CRE Industry Today (February 22, 2016)


  1. Co-Working Spaces are Going Corporate “WeWork, the shared-office company valued at $15 billion, has cultivated a chic vibe to attract the freelancers and startup workers that helped launch the co-working movement. That means hip interior design and free micro-roasted coffee and craft beer. Now that youthful ambiance is helping attract the olds. General Electric moved 20 workers from its new energy business, Current, into a WeWork space near Boston's South Station this month as GE readies its new Boston headquarters.” (Bloomberg)
  2. Don’t Buy Stocks Just for Their Real Estate “You really have to be careful when making the perceived value of a company's real estate holdings one of the main reasons that you buy a stock. Sometimes, value investors can become overly excited about a company's real estate portfolio. It's an easy trap to fall into, and one I've been guilty of it myself. For example, Sears seemed like a can't-miss opportunity a few years back. Many value investors were so taken by company's vast real estate portfolio that the stock became the focus of the day.” (The Street)
  3. United Development Plunges as FBI Raids Firm’s Texas Offices “United Development Funding IV shares plunged before being halted after FBI agents raided the real estate investment trust’s offices in Texas. The Grapevine, Texas-based company, which invests in residential real estate and property loans, dropped 55 percent to $3.20 Thursday before trading was suspended. The stock is down 71 percent this year. The Federal Bureau of Investigation received court authorization for the search, said Allison Mahan, a spokeswoman for the bureau in Dallas.” (Bloomberg)
  4. World Trade Center’s $4B Transit Hub is a Lemon “The Oculus, which will partially open to the public the first week in March, is as functionally vapid inside as it is outside. It’s a void in search of a purpose other than to connect a bunch of subway and pedestrian corridors and concourses with one another. But what will the public find on the vast, 56,448- square-foot floor? Nothing. Not a seat. No newsstands or snack concessions. No central information kiosk like the one that provides a focus to the main hall of Grand Central Terminal.” (New York Post)
  5. Why Enormous Subsidies for a Staten Island Mall? “The new outlet mall being built next to the Staten Island Ferry Terminal, and adjacent to a proposed giant Ferris wheel, is being subsidized with more than $74 million in state and city incentives. That represents about a third of the mall project's total cost and two times the developer's contribution. This is a story that deserves far more attention than it has been getting.” (Crain’s New York Business)
  6. Advice in Today’s Overheated Commercial Real Estate Market “If you own and occupy your commercial real estate. Take a hard look at your business that occupies the commercial space. What is your succession plan? How old are you? Would you benefit from selling the commercial real estate today and leasing the building from the buyer for three to five years? The answers to these questions can illuminate a direction.” (The Orange County Register)
  7. Why Renting Is Beating Owning “Homeownership is no longer the key driver of America’s industrial economy. Across the U.S., cities and metros with higher rates of homeownership have had more trouble adjusting to the demands of the knowledge economy, trapping their residents in housing they cannot sell and limiting their ability to adjust to economic downturns. Meanwhile, cities and metros with more renters have proven better able to cope with the transformation from an industrial to a knowledge economy.” (Multifamily Executive)
  8. Fairway on the Brink of Default: Here’s What Went Wrong “A few months before Fairway held its initial public offering in 2013, a retail expert told Crain’s that the supermarket’s financial condition was so precarious that it ‘sounds to me like a company that’s going bankrupt.’ Three years later, the popular grocery store chain is gasping for air. This week, a Moody’s analyst said the heavily indebted company is on the cusp of default. What on earth went wrong here? How did one of the city’s most beloved retailers stumble so badly?” (Crain’s New York Business)
  9. Get Ready: Regulators are Looking Hard at Cybersecurity of Third-Party Vendors “A panel at the Mortgage Bankers Association's Mortgage Servicing conference examined the data security threats servicers need to address, and one glaring area of weakness was these vendor relationships. Specifically, the panel pointed to the guidelines from the New York Department of Financial Services on this issue that are voluntary now, but are likely — even highly likely — to be required in the near future.” (Housing Wire)
  10. Investors Home In on Multifamily Real Estate “Commercial property investors were betting on Albuquerque multifamily real estate in 2015. Five out-of-state buyers brought nearly $100 million in business for the year, said Albuquerque broker Cynthia Meister of Colliers International, who recently announced the sale of the 200-unit Presidio at Northeast Heights apartment complex and totaled the take.” (Albuquerque Journal)
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