10 Must Reads for the CRE Industry Today (January 17, 2017)

10 Must Reads for the CRE Industry Today (January 17, 2017)


  1. Deutsche Bank Real Estate Optimism Fueled by Trump “White and his team manage the RREEF Property Trust, a multi-billion dollar, non-listed, publicly registered real estate investment trust (REIT). White is optimistic on commercial rent growth as a result of shrinking supply for retail, warehouse, apartment and office properties. Trump’s infrastructure spending plans and influence on interest rate stabilization may lead to more construction starts. For now, White points out, value is ultimately driven by low levels of supply which are supporting strong rent growth rates.” (Forbes)
  2. Women’s Apparel Retailer Limited Stores Files for Bankruptcy “Limited Stores LLC, parent of U.S. women's apparel chain The Limited, said on Tuesday it filed for bankruptcy, the latest brick-and-mortar retailer to reorganize as shoppers shift to fast-fashion retailers and online competitors. Retailers Aeropostale Inc and Pacific Sunwear of California Inc filed for bankruptcy last year. Limited Stores said it also agreed to a ‘stalking horse’ bid for its intellectual property and some related assets from an affiliate of private equity firm Sycamore Partners.” (Reuters)
  3. Expert: Macy’s May Eventually Close ‘Hundreds’  of Stores “Macy’s Inc. fired the person in charge of in-store growth initiatives last week, prompting one retail expert to predict “hundreds” more store closures could be in the company’s future. ‘We’re in the second inning,’ said Howard Davidowitz, a New York-based retail consultant. ‘The fastest growing area of their business is online. What do you do with all these stores?’ Macy’s did not respond to questions raised by Davidowitz, a former Ernst & Young principal whose firm advises retailers on real estate and growth strategies.” (WCPO Cincinnati)
  4. Overseas Property Investment by Chinese Firms Rises 53 Percent Year-on-Year to $33 Billion in 2016 “Chinese firms invested $33 billion in overseas properties in 2016, marking a 53 percent rise from the previous year, property services and investment management firm Jones Lang Lasalle (JLL) said on Tuesday. The strong rise in overseas property investment has alarmed Chinese authorities and they have stepped up measures to stem capital outflows in the face of a weakening currency. The yuan lost around 6.6 percent against the dollar last year and is now at more than eight-year lows.” (Reuters)
  5. Big Changes to Accompany $400M Infusion in ARC Hospitality “An affiliate of Brookfield Strategic Real Estate Partners II has committed to invest up to $400 million, on a delayed draw basis, in American Realty Capital Hospitality Trust Inc., the latter announced Friday. The Brookfield entity is a real estate private equity fund managed by affiliates of Brookfield Asset Management Inc. As part of the transaction, Brookfield reportedly will be afforded ‘certain corporate governance and approval rights over certain activities’ of ARC Hospitality and its operating partnership, and the REIT’s board will be overhauled.” (Commercial Property Executive)
  6. Marijuana Interest Driving Real Estate Deals “With recreational marijuana use on the verge of becoming legal in Maine, real estate brokers are seeing a jump in demand for industrial spaces that could become indoor marijuana farms in the not-too-distant future. Marijuana is scheduled to become legal to use and possess Jan. 30, but the scramble for suitable warehouse space for commercial growing has begun, helping to push lease rates to nearly twice what they were six years ago in Greater Portland.” (Portland Press Herald)
  7. Property Investing Pitfalls: A No-Fail Plan for First Timers “The biggest mistake people make is to allow their emotions to cloud their judgment and over-capitalise on their purchase rather than negotiating the best price. They get overexcited or attached to a particular house and don’t consider the relevant financial factors. Such feelings can also lead people to avoid doing the proper research to determine whether the property will provide the returns required, i.e. whether it is in the right location to secure the right tenants in the short term and appeal to the owner occupier market, which will sustain the property’s price in the long term.” (NuWire Investor)
  8. Navy Federal Credit Union to Invest $100M in Virginia “Navy Federal Credit Union will invest $100 million to expand its operations center in Winchester, Va., doubling the firm’s employee-count and physical square footage in the area. It’s believed the expansion will result in the addition of approximately 1,400 new jobs in the state. Navy Federal Credit Union is already the world’s largest credit union with more than $79 billion in assets, six million members, 295 branches and a workforce of more than 14,000 employees worldwide. It serves all Department of Defense and Coast Guard Active Duty, civilian, and contractor personnel and their families.” (Commercial Property Executive)
  9. Trump Says Core Part of House GOP Corporate Tax Plan Is ‘Too Complicated’ “President-elect Donald Trump criticized a cornerstone of House Republicans’ corporate-tax plan, which they had pitched as an alternative to his proposed import tariffs, creating another point of contention between the incoming president and congressional allies. The measure, known as border adjustment, would tax imports and exempt exports as part of a broader plan to encourage companies to locate jobs and production in the U.S.” (MarketWatch)
  10. Property Supply Hasn’t Kept Pace with Popularity of Real Estate Funds “Investors are piling money into real-estate funds—but fund managers are finding it a challenge to spend it. Global fund managers had a record $237 billion available to invest in commercial property at the end of last year, according to data firm Preqin, up from $229 billion at the end of 2015 and $136 billion at the end of 2012.” (Wall Street Journal, subscription required)
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