10 Must Reads for the CRE Industry Today (February 4, 2016)

10 Must Reads for the CRE Industry Today (February 4, 2016)


  1. Hersha Jumps After Forming Joint Venture for 7 Manhattan Hotels “Hersha Hospitality Trust surged the most in more than four years after the company said it sold stakes in seven Manhattan hotels, three of them in the tourist-heavy Times Square neighborhood, to a Chinese investment firm. The hotels -- which operate under the Holiday Inn, Hampton Inn and Candlewood Suites brands -- have a total of 1,087 rooms. Cindat Capital Management Ltd. will pay $571.4 million for a 70 percent stake in the joint venture.” (Bloomberg)
  2. Mall Executive Backtracks from Statement on Amazon Retail Stores “A day after saying that Amazon plans to open hundreds of physical bookstores, the chief executive of a large shopping mall operator has backed away from the comments. In a statement Wednesday from General Growth Properties, the mall operator’s chief executive, Sandeep Mathrani, said a comment he made this week on a conference call referring to the Internet retailer’s ‘goal’ to open 300 to 400 bookstores ‘was not intended to represent Amazon’s plans.’” (The New York Times)
  3. Why Washington is Making it Easier for Rich Foreigners to Buy U.S. Real Estate “The real motivation behind the change in the Act back in December is a tax exemption that makes it easier (and cheaper) for foreign stock funds and REITs to buy American real estate. This also opens the door for institutional investors, particularly those in Europe, who are dealing with zero yield and negative interest rates and don’t have attractive options for capital preservation long term. Now they have a tax-friendly haven for moving money off shore in a tangible asset.” (Forbes)
  4. Jehova’s Witnesses’ Brooklyn Tax Exemptions Totaled $368 Million “The Jehovah’s Witnesses have been exempted from paying at least $368 million in taxes on their Brooklyn real estate holdings over the last 12 years, according to an analysis by the Downtown Brooklyn Partnership and consulting firm BJH Advisers. The Partnership released the finding to increase its pressure on the religious organization to donate $50 million to the borough as it sells off at great profit the remainder of its Brooklyn property and moves upstate.” (Crain’s New York Business)
  5. Life Companies Gaining an Edge as Regulatory Hurdles Become a Reality in 2016 “Despite the SIFI tag, life companies seem to have been active in 2015. Last year, MetLife actually increased its global CRE lending business to a company record of $14.3 billion, up 18 percent from $12.1 billion the year prior. Prudential Mortgage Capital Company President and CEO David Durning told CO that the firm’s final lending numbers for 2015 were $14.6 billion. Comparatively, J.P. Morgan Chase originated the most in U.S. CMBS debt, with $11.14 billion, followed by Deutsche Bank with $9.62 billion, according to Commercial Mortgage Alert.” (Commercial Observer)
  6. Five Mistakes Entrepreneurs Make When Buying Real Estate “There are countless investors who make high return realty investments, but there are also many who lose just as much from their investments. If you are considering investing in real estate, then it is important that you know five of the most common mistakes that real estate investors tend to make. Do your best to avoid these pitfalls and you can be on your way to the successful real estate investment you have always dreamed of.” (Huffington Post)
  7. U.S. Black Investors Shift from Real Estate to Stocks “Burned by the housing bust of 2008, more black Americans are tying up their wealth in the U.S. equity market through workplace retirement plans, experts say. The percentage of blacks citing real estate as the ‘best investment overall’ was 61 percent in 2004, according to a survey released on Tuesday by Ariel Investments, a Chicago money management firm. In mid-2015, the percentage of black investors ranking real estate as the best investment was down to 37 percent, according to the survey.” (Reuters)
  8. Related Buys Stake in London Affordable Housing Firm “Related Cos. is one of America’s most prominent real estate firms, developing mixed-use, residential, retail, office, and affordable properties. It regularly appears on Top 50 lists of owners and developers. Overall, it owns and operates a premier portfolio of global assets valued at over $20 billion. Affordable Housing Finance's Donna Kimura reports the company now has its eyes set to Europe.” (Multifamily Executive)
  9. Wal-Mart to Operate its Own Gas Stations “For most of the past 20 years, Wal-Mart Stores Inc. has let another company build and operate gas stations in the parking lots of its stores. Now, the retailer has decided it wants to pump its own gasoline. Last week, Wal-Mart executives told Murphy USA Inc. that going forward it will build and operate its own gas stations. Murphy will continue to run the more than 1,000 locations it has already built near Wal-Mart stores.” (MarketWatch)
  10. Documents: Mets’ Owners Real Estate Fund Was $300 Million in the Hole This Past June “The owners of the New York Mets are no strangers to financial calamity. After losing $550 million in Bernie Madoff’s Ponzi scheme and paying out $80 million to settle a lawsuit claiming they were in on the scheme, Fred and Jeff Wilpon managed to keep their team by taking out loans and slashing payroll. But Madoff’s predatory investment schemes aren’t the only source of red ink for the Wilpons. One of their own major investments in real estate—long their area of business expertise—has gone deep underwater.” (Deadspin)
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