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10 Must Reads for the CRE Industry Today (January 26, 2017)

10 Must Reads for the CRE Industry Today (January 26, 2017)


  1. Government’s Fannie Mae Will Back PE Giant Blackstone’s Rental Home Debt “Mortgage giant Fannie Mae is getting into the single-family rental business in a big way. The government-backed agency said it is going into business with private equity giant and major housing player Blackstone by backing $1 billion in debt. Blackstone's Invitation Homes filed for an initial public offering this week, and the Fannie Mae relationship was disclosed afterward. Blackstone is looking to raise $1.6 billion by selling shares to the public.” (CNBC)
  2. White House, Trump Organization Name Ethics Advisers “President Donald Trump and his hotel and real estate business on Wednesday separately named ethics counselors, the latest step in the president's plan to address conflicts-of-interest concerns that arise from his decision to maintain financial ties to his company. Trump selected Washington attorney Stefan Passantino as his White House ethics adviser, press secretary Sean Spicer said. The announcement came the same day Trump's company tapped a former George H.W. Bush campaign lawyer and a longtime company executive as in-house ethics monitors.” (ABC News)
  3. Blackstone President: U.S. Real Estate Market “Softer” “The Blackstone Group’s real estate business continued to grow in the fourth quarter of 2016, but the company’s president Tony James cautioned that investment opportunities could be harder to come by as the market matures. ‘The one area that’s a little softer I’d say is real estate in the U.S.,’ he said on an earnings call with journalists Thursday morning. The fund manager ended the year with $102 billion in real estate assets under management – up 9 percent over 2015 – making real estate its largest business line ahead of private equity.” (The Real Deal)
  4. Buyers Haven’t Flocked to New Homes This Much Since the Bubble “It’s fairly common to hear that a particular economic data point is the best since the recession. But you’d have to go back a bit further to compare the last time home builder sentiment was so high. In December, builder sentiment, as measured by the National Association of Home Builders’ housing market index, surged to the highest reading since July 2005 — the height of the housing bubble.” (MarketWatch)
  5. Department Stores Need to Close 800 Locations to Restore Their 2006 Productivity “Those 110 Sears and Macy's stores that have been marked for closure are only the beginning. As department store chains cede market share to off-price, fast-fashion and online competitors, they would need to close about 800 locations to achieve their inflation-adjusted sales productivity level of 2006, according to Green Street's 2017 Mall Outlook.” (CNBC)
  6. Banana Republic Ousts President After Continued Sales Slump “Fixing Banana Republic is turning out to be Mission Impossible. And after two years of trying to nurse the once iconic brand of affordable but smart clothing back to health, the well regarded brand president Andi Owen is out of a job, the company said on Tuesday. One prominent Wall Street analyst even thinks struggling parent company Gap Inc should consider shuttering the brand, which he sees as beyond repair, or selling it off to better focus on its overall turnaround.” (Fortune)
  7. Global Data Center Marketplace Expected to Explode in 2017 “According to JLL's new 2017 Data Center Outlook, the public's obsession with online video binge-watching is just one of the factors helping the data center industry flourish worldwide. Furthermore, massive movement of data from private corporate servers to cloud-based solutions and a growing corporate thirst for Internet of Things (IoT) initiatives are pushing corporate demand too. With data consumption skyrocketing, some major cloud providers are anticipating the need to triple their infrastructure by 2020.” (World Property Journal)
  8. Whole Foods Shutters Regional Kitchens as Turnaround Continues “Whole Foods Market is closing its three remaining regional kitchens, the latest setback as the grocer struggles to turn the company around after five consecutive quarters of negative comparable sales. Austin, TX-based Whole Foods will close the kitchens, in Georgia, Maryland and Massachusetts, where ready-to-eat products were prepared for some stores. The Massachusetts facility was previously singled out by the FDA, which alleged that Whole Foods' food safety procedures at the facility were inadequate and potentially conducive to contamination.” (The Street)
  9. SL Green Forms One Vanderbilt JV with Korean Pension Fund, Hines “SL Green Realty Corp. has brought in two new equity partners for One Vanderbilt, the developer’s under-construction tower adjacent to Grand Central Terminal. National Pension Service of Korea now owns a 27.6 percent interest in the planned skyscraper, while fellow developer Hines has taken a 1.4 percent stake, according to an SL Green press release. Together, the two companies are investing at least $525 million into One Vanderbilt, which will stand at 1,401 feet with 58 stories when completed in 2020.” (Commercial Observer)
  10. U.S. Industrial Market Enjoyed Record Pace in 2016 “Global property consultant Cushman & Wakefield announced this week that the U.S. industrial market nationwide absorbed 63.6 million square feet (MSF) of space in the fourth quarter of 2016, which propelled net absorption for the year to a record-setting 282.9 million square feet. The current industrial expansion is one for the record book. As of January 2017, the industrial sector has registered 27 consecutive quarters of net occupancy gains, placing this expansion among the longest ever.” (World Property Journal)
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