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10 Must Reads for the CRE Industry Today (February 23, 2018)

The Federal Reserve sees no reason to postpone interest rate hikes, reports Reuters. The Motley Fool looks at the performance of six real estate ETFs. These are among today’s must reads from around the commercial real estate industry.

  1. Fed Sees Rate Hikes on Track; Continued U.S. Growth “The U.S. Federal Reserve, looking past a recent stock market sell-off and concern about inflation, said it sees steady growth continuing and no serious risks on the horizon the might pause its planned pace of rate hikes. Fed officials anticipate raising rates three times this year. The report was released Friday ahead of new Chairman Jerome Powell's first public outing next week, when he testifies separately before House and Senate committees.” (Reuters)
  2. These Top 6 Real Estate ETFs Are All Falling Hard “Stocks have seen immense volatility so far in 2018, with major market benchmarks having seen huge initial gains, fallen back in the first official market correction in years, and then climbing back toward gains for the year. Yet in the carnage that the market's roller-coaster movements left behind, one particular sector -- real estate -- hasn't shown signs of bouncing back. Investing in real estate directly requires specific knowledge about a particular location, so most investors choose real estate investment trusts or other companies that pool together exposure to a large number of different properties for diversification purposes.” (The Motley Fool)
  3. Airbnb Is Overhauling its Business to Further Take on the Hotel and Travel Industries “Airbnb is taking further aim at big chain hotels and online travel agencies, announcing a program Thursday that would expand it beyond shared accommodations into something like a full-fledged travel company. At an event in San Francisco on Thursday, co-founder and CEO Brian Chesky said that the start-up is making it easier for more hotels to list by expanding the type and quality of its listings. The company is also introducing four new rental categories, hiring people to vet higher-end listings and launching a loyalty program later in the year.” (CNBC)
  4. Chinese Government Seizes Anbang, Owner of NYC’s Waldorf “The Chinese government on Friday seized control of Anbang Insurance Group, one of China’s biggest insurance conglomerates, in a dramatic move that underscores Beijing’s intent to crack down on financial risk. Anbang’s chairman and key shareholder, Wu Xiaohui, had also been prosecuted for economic crimes, the China Insurance Regulatory Commission (CIRC) said in a statement Friday.” (New York Post)
  5. Will the Waldorf Be China’s Rock Center? “The symbolism was priceless.  David Rockefeller, the embodiment of American capitalism, had come out of retirement to bail-out Rockefeller Center in 1995.  Merely six years earlier, Japan’s Mitsubishi Group had purchased the complex, long viewed as the Hope Diamond of real estate.  This investment failure by one of Japan’s premier trading groups was the most dramatic sign that Japan’s once rising sun was now setting.  Mitsubishi lost US$2 billion in that debacle and Japan lost its luster as a global financial behemoth which it has never regained.” (Forbes)
  6. Rising Interest Rates, Inflation Concerns Putting Upward Pressure on U.S. Cap Rates “According to global property advisor CBRE, the recent rise in inflation and higher interest rates is expected to put upward pressure on U.S. capitalization rates in 2018, counterbalancing the impact of strong global capital flows into the commercial real estate sector. The CBRE North America Cap Rate Survey provides insights on movements for the major property asset classes. Cap rates for U.S. commercial real estate assets fell slightly in H2 2017, albeit with some variation by sector.” (World Property Journal)
  7. Six Things You Must Do to Oversee Your Passive Real Estate Investments “So you’ve invested in real estate through limited partnerships, syndications or funds, and someone else is doing all the dirty work so you can spend your time enjoying life. Because you’re a passive investor, you don’t need to do anything, right? Unfortunately, no — your investments do need a little attention. You’re busy, and this is why you didn’t take on an active role in the property. But regardless, there are reports coming in, calls to be on and checks to deposit.” (Forbes)
  8. Recalling the ‘Toughest Woman in Real Estate’ “Women who have smashed through the glass ceiling in New York real estate may have Cecilia Benattar to thank. By her mid-30s, Benattar had earned her stripes by playing a key role in the development of Midtown’s iconic General Motors Building. And she pulled off the feat back in the 1960s, when women in offices were often employed as secretaries.” (The Real Deal)
  9. Amenities War Breaks Out in Long Island City Rentals “In search of an affordable apartment near her midtown office, Lauren Dana found an embarrassment of riches in Long Island City. The once-run-down industrial area is in the midst of a transformation into a residential destination.” (Wall Street Journal, subscription required)
  10.  TIER REIT Sheds Fort Worth Office Asset “TIER REIT has sold Centreport Office Center in Fort Worth, Texas, for approximately $12.7 million. The firm had previously acquired the 133,246-square-foot property from Invesco, in 2007, for $16.1 million, according to Yardi Matrix. The deal follows the sale of a Baltimore Class A office asset to Morning Calm Management in a series of three divestments made by TIER recently. Located at 14760 and 14770 Trinity Blvd., Centreport’s two one-story structures are situated in an office and industrial area less than five miles south of DFW International Airport.” (Commercial Property News)
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