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10 Must Reads for the CRE Industry Today (January 3, 2017)

10 Must Reads for the CRE Industry Today (January 3, 2017)


  1. U.S. Construction Spending Hits More Than 10-Year High in November “U.S. construction spending rose more than expected in November, reaching its highest level in 10-1/2 years, which could provide a lift to fourth-quarter economic growth. The Commerce Department said on Tuesday that construction spending increased 0.9 percent to $1.18 trillion, the highest level since April 2006. It was boosted by gains in both private and public sector investment.” (Reuters)
  2. Expect More Store Closings Despite Big Holiday Sales “In a sign of how dramatically the landscape is changing when it comes to shopping, experts say don't expect any let up in store closings in 2017 just because retailers just had biggest growth in holiday sales in five years. Consumers finally opened their wallets, making purchases on everything from toys to apparel. But a record amount of the spending for the season went to online sellers. And when the droves eventually showed up in stores, much of the foot traffic was driven by discounting.” (USA Today)
  3. Chinese Real Estate Investors Eyeing the U.S. Look Beyond New York, Los Angeles “Chinese real estate investors are beginning to look for opportunities outside major metros like New York, Los Angeles and San Francisco as they become more familiar with the U.S. housing market, according to The Real Deal, citing a report in the South China Morning Post. Thirty percent of Chinese investment inquiries to the U.S. focused on cities other than the aforementioned three, according to consulting firm East-West Property Advisors. The report noted increased interest in markets like Seattle, Houston and Las Vegas.” (Construction DIVE)
  4. Americans Spent This Much on Rent Over the Past Year… “Rising rents and a lack of leasing opportunities are sweeping the country, forcing Americans to put more money toward their rent than a down payment for a future home. Renters paid $478.5 billion in total this year, a 3.8% increase from 2015, according to real estate website Zillow. Combined with increasing home values, heavier lender expectations of credit scores and rising interest rates that will push up monthly mortgage repayments, the American dream of owning a home might seem somewhere off in the distance.” (MarketWatch)
  5. Trump’s Paradox: Real Estate CEOs Brace for a Change “The real estate industry is bracing for big changes to the U.S. tax code as Donald Trump, who has made a fortune in real estate, gets set to take office in less than a month’s time. While Trump made no specific reference during his campaign to tax reforms that would affect real estate, industry executives are speculating that a plan to overhaul most tax laws made last June by House Republicans will be much more likely to proceed with Trump in office than a Democrat, according to the Wall Street Journal.” (Investopdia)
  6. Why 2017 Will See Desperate Department Stores and Anxious Apparel Chains “It was a hard year for many retailers. continued to run away with the e-commerce prize, and consumers, though in much better shape financially than they have been in many years, are getting increasingly bargain-hungry. The result has been declining sales at many major retailers (particularly department stores) and store closings by the hundreds. But a new year offers the industry a clean slate, whether it be a new CEO or new initiatives to break that sales skid.” (Fortune)
  7. Surging Property Values Are Upending Commercial Landlords’ Ground Leases “As the city's largest commercial landlord, SL Green is used to plunking down huge sums for prime Manhattan properties. It paid $2.3 billion in 2015 to purchase a Madison Square Park building that houses Sony's North American headquarters. And it's spending more than $3 billion to build a new 1,400-foot office tower next to Grand Central Terminal. But holding on to a relatively inauspicious 17-story office building on Madison Avenue may come at a price not even the $11.2 billion public company can afford.” (Crain’s New York Business)
  8. Tishman Speyer Lands $194M Construction Loan for DoBro Macy’s Reno “There’s a lot of activity buzzing around the Downtown Brooklyn Macy’s. And no, we’re not just talking about end-of-the-year clearance sales. Bank of the Ozarks provided Tishman Speyer with $194 million in construction debt for the redevelopment of the Macy’s-anchored 422 Fulton Street, according to records filed with the city today. In summer 2015, the department store had agreed to sell off a portion of the 9-story property to Tishman Speyer for $170 million, amid waning sales performance, as Commercial Observer reported at the time.” (Commercial Observer)
  9. Concerns Raised Over Cabela’s, Bass Pro Shops Deal “Federal regulators have raised questions over Bass Pro Shops' $4.5 billion deal to acquire Cabela's Inc. In a regulatory filing Friday, Cabela's said the Federal Trade Commission had requested additional information from both Cabela's and Bass Pro Shops, according to Capital One Financial Corp., which is also buying some financial assets as part of the deal, also told Cabela's that it expects a delay in the deal's final approval, the report said.” (Chain Store Age)
  10. Starbucks to Top McDonald’s as Restaurant King, Analyst Says “Starbucks Corp. is poised to overtake McDonald’s Corp. as the world’s most valuable restaurant company, and the coffee giant could ultimately have 50,000 locations -- more than any current chain. That’s the prediction of Nomura analyst Mark Kalinowski, who named Starbucks his top restaurant stock for 2017 in a report on Tuesday. He estimates that the company will increase its worldwide restaurant count by 8.4 percent this year and boost same-store sales by more than 5 percent.” (Bloomberg)
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