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10 Must Reads for the CRE Industry Today (February 27, 2017) Photo by Scott Olson/Getty Images

10 Must Reads for the CRE Industry Today (February 27, 2017)

  1. How to Leverage Real Estate Tax-Deferral Strategies to Grow your Business “It goes without saying that, all things being equal, having access to a larger pool of money offers you the chance of greater returns. That’s why strategies to defer tax payments are so perennially popular, as a way to grow investments and businesses, larger and faster. With that in mind, a number of tax trends are attracting renewed attention and should be of interest to you: Real estate owners are transitioning away from the active management of their properties. Real estate investors are looking to diversify their holdings while avoiding an exit tax. Owners or investors are looking for the next project, and not an immediate tax bill. So, what are the strategies being used in tandem with these tax-deferral trends?” (Entrepreneur)
  2. The Seduction of 'Wellness Real Estate' “Chopra has been selling our body antidotes to life for two decades, and he has taken on most ingestible platforms. Now he is striking out into the booming domain of “wellness real estate”—building living spaces ostensibly designed to optimize bodily functioning. In collaboration with the design firm Delos and real-estate firm Property Markets Group (PMG), he is finishing construction of a 68-unit luxury tower in Sunny Isles Beach, on the barrier island abutting North Miami Beach. Two angular penthouse units resembling white glass-marble sky mausoleums are listed for $18.5 and $19.5 million. The value is enhanced by the pitch. Once Delos turns a condo into a wellness condo, the price increases substantially. Outfitted rooms at Las Vegas’s MGM Grand cost 40 percent more than equivalent, non-wellness rooms.” (The Atlantic)
  3. Why Real Estate Will Never Be The Same “We’ll never see a near non-stop and unprecedented real estate boom like the one from 1933 to 2005 again. We’re heading right into a great residential and commercial real estate crash ahead. Demographically speaking, this crash is unavoidable.” (Seeking Alpha)
  4. UPS to Build $275M Salt Lake City Hub “UPS will build a $275 million, new regional operations hub in Salt Lake City, an 840,000-square-foot facility that will process 69,000 packages per hour as a complement to the existing 200,000-square-foot operations in town. When completed in 2018, the project will be among the largest processing facilities in the company’s global package network. ‘This new regional hub is one of our strategic initiatives to continue to build the long-term future of UPS,’ Mark Wallace, UPS’ senior vice president of global engineering and sustainability, said in a prepared release. ‘Utah is the crossroads to serving the Western U.S., and the state-of-the-art automation technology being deployed will improve performance, increase capacity and create additional flexibility to handle the non-stop growth of e-commerce business in the region.’ The property will include onsite fueling to accommodate both diesel and natural gas alternative fueled vehicles. Two automated processing areas will focus on smaller-sized packages, typical of today’s e-commerce purchases.” (Commercial Property Executive)
  5. Investcorp Makes $400M Portfolio Investment in Three States “Investcorp’s U.S.-based real estate arm has invested in three multifamily properties in the New York, California and Nevada MSAs for a total purchase price of nearly $400 million. That brings the company’s total residential investment to more than $1.2 billion in the last 18 months. Mohammed Alardhi, executive chairman of Investcorp, said that the company believes the U.S. economy is poised for significant growth, thus providing good return for the Bahrain-based company and its clients. 'We have a long history of investments in the U.S., and our investment in residential properties in the past 18 months demonstrates our belief that the U.S. real estate market provides high-quality investments,' he noted. The three properties include Atlantic Point, a 795-unit multifamily property in Bellport, N.Y., which is located within the Nassau County-Suffolk County Metro Division. Suffolk County is one of the tightest multifamily housing markets in the United States, with a vacancy rate of 2.9 percent. Given the high cost of land and strict zoning regulations which makes it difficult to build, the area has seen minimal new development since the 1990s.” (MultiHousing News)
  6. Wendy's plans self-ordering kiosks at 1,000 locations “Wendy's says it plans to install self-ordering kiosks at about 1,000 locations by the end of the year. A typical location would have three kiosks, The Columbus Dispatch reported. Higher-volume restaurants will be given priority for the kiosks. Wendy's chief information officer, David Trimm, said the kiosks are intended to appeal to younger customers and reduce labor costs. Kiosks also allow customers of the fast food giant to circumvent long lines during peak dining hours while increasing kitchen production.” (Business Insider)
  7. CVS to close 11 Chicago stores by late March “CVS Health plans to close 11 stores in Chicago starting in late February as part of a previously announced restructuring. The Woonsocket, R.I.-based retailer has said it plans to close about 70 locations in several markets in early 2017, and on Friday it shared a list of Chicago pharmacies that will go out of business. CVS will continue to have about 80 pharmacies in Chicago. The pharmacy operations of the closing stores will be transferred to nearby pharmacy locations, so patients won't experience any service disruptions, CVS spokeswoman Stephanie Cunha said. The company plans to post signage in its pharmacies before the closing date for affected locations.  CVS is also working with employees affected by the store closings to transfer them to other Chicago locations, Cunha said.” (Chicago Tribune)
  8. Increased Employment, Pent Up Demand Driving Development in U.S. Midwest “In an unusual shift, jobs in the Chicago area are moving where the talent is rather than the other way around: companies are relocating from the suburbs to downtown seeking to attract millennial workers and spurring the development of multifamily and office projects in the city. In Detroit, construction is expected to begin this summer on the first new Class A office building to be built downtown in more than a decade. In Milwaukee, pent-up demand for space continues even after completion of a major office tower in 2016. Cleveland—which benefited this year from a number of high-profile events, including baseball’s World Series, National Basketball Association championship games, and the Republican National Convention—is seeing increasing adaptive use of buildings, as well as new construction.” (Urban Land Magazine)
  9. Here's why department stores aren't cutting it “To understand why shoppers aren’t frequenting J.C. Penney, consider the alternatives. T.J. Maxx, shoppers relish the hunt for a bargain-priced designer dress. Visitors to a Nike store in Manhattan can try out sneakers by taking a virtual jog through the park. And Ulta customers can sample an array of makeup without assistance from a sales representative. Some retailers are developing success formulas that are helping them thrive while department stores like J.C. Penney, Sears, and Macy’s are shuttering dozens of locations and struggling to lure shoppers away from their mobile phones and laptops and into stores. J.C. Penney said Friday that it will close up to 140 locations, a move that mirrors a decision by rival Sears, which plans to shutter 150 stores, and Macy’s which closed 66 locations last year and intends to close 34 more. The new recipe for retail success entails offering immediacy, experiences that can't be found on a screen, bargains galore and speedy, specialized service. While some chains are executing better than others, industry watchers say stores, in the hands of the right operator, still play a key role in satisfying shoppers.” (USA Today)
  10. Why Snapchat's unprecedented real estate strategy in Venice could be tech's new standard A tech start-up based in Los Angeles rather than Silicon Valley. A mobile app that built its appeal by deleting photos and messages. Vertical video in a widescreen world. Snapchat, the popular photo and video messaging app, has broken the mold in many ways. Now, with parent company Snap Inc.’s initial public stock offering only days away, it is poised to do so again. Snap will begin trading on public markets without a designated headquarters, an anomaly in the tech world. None of Snap’s peers — the 10 California-based technology companies with the biggest IPOs of the last 15 years — lacked a corporate headquarters when it went public. Snap knows its strategy is unusual: The company listed its lack of a headquarters and spread-out West L.A. offices on its financial filings as a risk that could potentially harm its business and future revenue prospects.” (Los Angeles Times)
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