10 Must Reads for the CRE Industry Today (January 21, 2016)

10 Must Reads for the CRE Industry Today (January 21, 2016)


  1. Macy’s Buyout Would Be a Miracle on 34th Street, Investors Say “A takeover of Macy’s, with a market capitalization of $12.5 billion, would require buyers to take on a significant amount of debt, a likelihood that’s fading as credit markets become increasingly strained.  Carlyle Group and Symantec Corp. are lowering the price of the biggest buyout of 2015, because banks are getting reluctant to lend money to companies with troubled balance sheets. And lenders backing Sycamore Partners’ acquisition of retailer Belk Inc. are said to be offering deep discounts on the debt.” (Bloomberg)
  2. FIRPTA for Dummies “We all know that foreigners have been snapping up real estate in the United States for a while, but are they taxed the same way? Since the introduction of the Foreign Investment in Real Property Tax Act, called FIRPTA, in 1980, Congress has had a way to tax foreigners who sell U.S. real estate. The tax law has been in the news lately, as some reforms were passed at the end of last year. What are those amendments? And, really, what on earth is this obscure FIRPTA law anyway?” (Commercial Observer)
  3. Traders Seem Certain Federal Reserve Won’t Raise Interest Rates Again This Year “Turmoil in the stock market, falling oil prices and an uncertain outlook for the U.S. and global economy has convinced traders that Federal Reserve won’t be able to deliver on its planned four rate hikes this year. In fact, trading on fed futures contracts now suggests the market barely expects the Fed to hike only once this year after lift rates for the first time in almost ten years in December.” (MarketWatch)
  4. Landlords Generated $500 Million a Year on Airbnb: Study “Landlords operating illegal hotels are raking in big bucks on Airbnb, according to a new study, funded by the hotel-lodging industry. The study found that multi-unit hosts, who operate two or more units, accounted for nearly 40 percent of Airbnb's total revenue for the year of $1.3 billion — or roughly $500 million in revenue. The study was conducted by researchers at Penn State University's School of Hospitality Management, and the American Hotel & Lodging Association paid for the data.” (CNBC)
  5. Do Walmart, Macy’s Store Closings Spell Trouble for Retail Landlords? “What might be a little more troublesome for retail real estate landlords, though, is the demise of Walmart Express. This concept was intended to be the answer to the discounter’s battle against smaller stores, primarily dollar and convenience stores that were taking up its market share. The impact of those closures shouldn’t be that big of a tax on landlords, though. The Walmart Express concept has many suitors in line for their spaces, due to demand for space in high-density areas.” (Hightower Blog)
  6. Court-Appointed Probe Will Slam Caesars for Fraud “Caesars Entertainment’s court-appointed examiner has told company officials and creditors’ lawyers he believes the company acted improperly when it transferred assets away from the hobbled casino prior to putting it into Chapter 11, The Post has learned. A report by the examiner, expected to be released next month, is likely to conclude there was a degree of civil fraud connected to the transfer, three sources with direct knowledge of the talks said.” (New York Post)
  7. To Cut Costs, Morgan Stanley May Leave Brooklyn Behind “In 1988, a young developer named Bruce Ratner made a big splash when he built a high-rise in downtown Brooklyn called One Pierrepont Plaza and persuaded Morgan Stanley to locate its computer systems there. Alair Townsend, a Koch administration official who later became publisher of Crain’s, said the bank’s rent would be just over $20 per square foot. You sure don’t see prices like that anymore.” (Crain’s New York Business)
  8. Is There Still an Opportunity in Small Format Supermarkets “Walmart’s decision to pull the plug on its Walmart Express pilot should not be taken as a read of the future for smaller format grocery stores in the U.S. For the retailer, discontinuing the pilot at this stage is driven by internal factors rather than the failure of the format itself and looks like a solid, commercially-driven decision.” (Supermarket News)
  9. Staples, Office Depot Extend Merger Agreement “Staples is giving itself three more months before calling off its proposed $6.3 billion acquisition of Office Depot, giving the companies time to fight an antitrust lawsuit with the Federal Trade Commission. The companies announced Wednesday that they intend to waive the merger agreement termination date of Feb. 4 and extend it to May 16. The extension allows for the completion of ongoing federal district court litigation with the Federal Trade Commission.” (Chain Store Age)
  10. Madison Realty Capital Slammed with $150M Lawsuit for ‘Fraud’ in Loan Bait-and-Switch “Imagine a lender provides a mortgage to pay off financing from that same institution. Now imagine finding that out shortly before closing the new loan. That’s exactly the stunt that father and son Jozef and Sylvester Smolarczyk are alleging Joshua Zegen’s Madison Realty Capital pulled on them. The Brooklyn-based duo, which runs the development company SMK Property Management, filed a $150 million lawsuit against the active New York-based real estate investment firm, accusing MRC of 15 counts of fraud.” (Commercial Observer)
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