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10 Must Reads for the CRE Industry Today (February 5, 2019)

Apple is looking to lease space at New York’s Hudson Yards, reports the New York Post. Miami is seeing more home buyers from high-tax states, according to the Wall Street Journal. These are among today’s must reads from around the commercial real estate industry.

  1. Apple Sizing Up Huge Hudson Yards Spot “Apple is in advanced talks for about 60,000 square feet at 55 Hudson Yards — the nearly finished tower at 11th Avenue and West 34th Street that Related Cos. is developing with majority owner Mitsui Fudosan, sources said Monday. If a deal is struck, the technology giant would join such prestigious 55 Hudson Yards tenants as Steve Cohen’s Point72 Asset Management, Dan Loeb hedge fund Third Point, private equity firm Silver Lake and several big law firms.” (New York Post)
  2. Amazon Deal Meets New Resistance as Cuomo and N.Y. Senate Clash “Gov. Andrew M. Cuomo and newly emboldened Democrats in the State Senate appeared headed for open warfare on Monday over a plan to bring Amazon to New York City after the Senate leader named a critic of the $3 billion deal to a state board that could scuttle it. The decision to choose the critic, Senator Michael Gianaris, for the board immediately presented a direct political challenge for Mr. Cuomo — who must decide whether to refuse the Senate’s selection. And it demonstrated the ability of the Democrat-led State Legislature to call into question the governor’s control over the kinds of state boards that, in recent years, he had been mostly able to bend to his will.” (The New York Times)
  3. Saks Turns Prime Space into a Handbag Emporium “Part of Saks Fifth Avenue’s new plan to woo shoppers: $50,000 handbags. The luxury retailer on Tuesday unveiled at its Fifth Avenue flagship store a remodeled ground floor that includes a handbag emporium featuring 50 brands, ranging from a $45 Saks tote to a $49,500 alligator bag from The Row. Of those brands, 14 are new to Saks, including Celine, Bottega Veneta, and Salvatore Ferragamo . The selection also includes 100 bags, many of which are inspired by the archives of European fashion houses, that are exclusive to the retailer.” (Wall Street Journal, subscription required)
  4. Landlord-Tenant Relationships Are Changing Thanks to Cryptocurrencies, Airbnb and More “This could be a great time to be a landlord. The real-estate market still only has enough supply for half the population. We’re still seeing high divorce rates, so people need more places to live. And households are still being created faster than the housing supply. All that combined means higher rents and that trend looks likely to continue for a long time.” (MarketWatch)
  5. This Corner of California Suffering Economic Misery Despite Boom All Around It “As California has rebounded from the Great Recession, the Imperial Valley has largely defied attempts to expand its economy beyond seasonal farming and government work, and the county continues to suffer the highest unemployment rates in the state. According to the U.S. Census Bureau’s latest five-year estimate, Imperial County's unemployment rate stands at 16% — four times greater than the state’s overall jobless rate of 4.2%.” (Los Angeles Times)
  6. Out-of-State Buyers Flock to Miami “A growing list of public officials in high-tax states are expressing alarm that big earners are bolting to low-tax states as new data suggests some home buyers are moving in response to the year-old change in the federal tax law. New York Gov. Andrew Cuomo became the latest on Monday when he blamed a $2.3 billion state shortfall on the new federal tax law that he said is driving people to leave the state. During a news conference in Albany, Mr. Cuomo said the 2017 law capping a deduction for state and local taxes at $10,000 is the reason for the deficiency.” (Wall Street Journal, subscription required)
  7. Mayor’s Call for Housing Seeks to Speed Glacial Pace “Mayor London Breed’s State of the City address last week was packed with plans, and one of them in particular grabbed my attention. She proposed a charter amendment for the November ballot that would make it easier to build 100 percent affordable housing projects — teacher housing included. If a proposed project fit the city’s zoning regulations and other requirements, it would get the green light. There would be no appeal, no way for angry neighbors to block it.” (San Francisco Chronicle)
  8. Achieving Pay Parity in Commercial Real Estate “The recent white paper cites a study from the American Association of University Women (AAUW) that showed full-time working women in the U.S. were paid 20 percent less than men as of 2016. Furthermore, ‘At the rate of change between 1960 and 2016, women were expected to reach pay equity with men in 2059—but progress has slowed in recent years. If the current level of growth continues, AAUW warns that women may not reach pay equity with men until 2119.’ A CREW Network 2015 benchmark study report entitled Women in Commercial Real Estate stated that within the commercial real estate industry, ‘the industry median annual compensation for women was $115,000 USD compared to $150,000 for men—an average income gap of 23.3%.’” (GlobeSt.com)
  9. Most Shoppers Are Still Leery of Buying Their Groceries Online. But Delivery in the U.S. is Set to ‘Explode’ “You might think that just about everybody is buying groceries online today, as retailers like Walmart, Kroger and Amazon race to perfect their delivery services and tout their abilities to get food to shoppers’ homes in under an hour. But that’s not exactly the case. Grocery shoppers are still concerned they’re being charged higher prices online and complain about delivery drivers being late, among other disappointments.” (CNBC)
  10. Limited Supply, Increased Demand Push NJ Life Sciences Real Estate Costs “Increased investment and employment in the life sciences sector has driven life sciences-related real estate costs to new heights, according to Cushman & Wakefield’s new report, Life Science: Great Promise & Rapid Growth. The research provides a big-picture overview of the life sciences sector and its impact on commercial real estate as well as more granular insights into 13 top life sciences markets in the US and Canada—including New Jersey.” (GlobeSt.com)
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