10 Must Reads for the CRE Industry Today (January 3, 2018)

Fannie Mae sold off $1 billion in benchmark bills at mixed interest rates, reports Reuters. In an environment of high prices, real estate investors have had to fine-tune their acquisition strategies, according to the Wall Street Journal. These are among today’s must reads from around the commercial real estate industry.

  1. Fannie Mae Sells One Billion Dollar Bills at Mixed Rates “Fannie Mae , the largest U.S. home funding source, said on Wednesday it sold $1 billion of benchmark bills at mixed interest rates compared with last week's sale of similar maturities. Fannie Mae said it sold $500 million of 1M bills due Jan. 31, 2018 at a 1.245 percent stop-out rate, or lowest accepted rate, down from the 1.248 percent rate for $250 million of 1M bills sold on Dec. 27.” (Reuters)
  2.  Private Equity Funds Focused on Property Raising Less Capital “Private-equity funds that focus on real estate have been raising less money for the past few years and chances are dim that there will be much pickup in fundraising in 2018. But the reason for this trend isn’t that pension funds, endowments and other institutions that invest in private equity have lost their appetite for commercial property. A big part of the slowdown is that private-equity funds haven’t been able to spend all the money they have raised, according to investors, analysts and fund managers.” (Wall Street Journal, subscription required)
  3. Internet Giants Fuel Warehouse Demand as Land Prices Surge “Land fit for future fulfillment centers for the likes of Amazon and Walmart saw huge spikes in prices last year, according to real estate services firm CBRE. In a trend largely stemming from the growth of e-commerce players across the U.S., some plots of land now cost twice the amount they did a year ago, the group found. This is especially true in major markets, including Atlanta and Houston. In surveying 10 U.S. markets, CBRE found the average price for "large industrial parcels" (50 to 100 acres) now sits at more than $100,000 per acre, up from about $50,000 a year ago.” (CBNC)
  4. AON Acquires Real Estate Investment Advisor Townsend Group “Insurance brokerage and consultant Aon has completed its acquisition of The Townsend Group, a global investment management and advisory services firm primarily focused on real estate and real assets. Aon reported in September that it had agreed to acquire Townsend for $475 million from Colony NorthStar. No other financial terms were disclosed by Aon. Aon said Terry Ahern, Townsend’s chief executive, will continue to lead real estate and real asset investment services.” (Insurance Journal)
  5. Peak Commercial Real Estate Prices Force Investors to Get Creative “As 2017 came to an end, the good news for commercial real-estate investors was that values were near peak levels in many markets throughout the world, putting in the black most anything they bought in the past eight years. The bad news as 2018 begins: Values in many markets throughout the world are near peak levels. That is going to make buying property this year particularly tricky.” (Wall Street Journal, subscription required)
  6. When the Glass Ceiling Won’t Break “When it comes to New York City’s largest development and investment firms, most have leadership teams that are at least 70 percent male. Meanwhile, of the city’s 20 largest commercial brokerages, only three come close to having an even split of male and female brokers. In addition, there was virtually zero improvement in gender diversity in real estate industry between 2007 and 2015, the most recent data from the U.S. Equal Employment Opportunity Commission shows. Women made up 27.2 percent of executive-level managers in the New York metro area in 2007 versus 27.3 percent in 2015.” (The Real Deal)
  7. Housing Outlook 2018: Six Predictions from the Experts “In 2017 Americans learned to expect the unexpected, whether it be politics, weather or housing. Driven by record low inventory, little about the housing market went as forecast last year. ‘We thought there would be some things to take the pressure off,’ reflects Skylar Olsen, senior economist at home search site Zillow. Interest rates would rise. Construction would pick up. Price growth would moderate. ‘That did not happen at any impactful level.’” (Forbes)
  8. AEW Is Buying Pearson’s U.S. Headquarters for $385M “Ivanhoe Cambridge is in contract to sell a 470,000-square-foot Hudson Square office building at 330 Hudson Street to AEW Capital Management for $385 million, The Real Deal has learned. The building marked the Canadian pension fund manager’s second big Manhattan deal in the past year, following its $652 million purchase of 85 Broad Street. Ivanhoe and its partner Callahan Capital Properties have swiftly moved in and out of the 16-story property.” (The Real Deal)
  9. Managing Property in NYC is About to Get a Lot Harder “Don’t say the City Council sat on its hands all year as it managed to pass numerous bills relating to property ownership and management that are now awaiting Mayor de Blasio’s signature. A hearing and bill-signing event is scheduled for Jan. 8. Three of the bills are giving the industry agita. Intro. 1632 requires Energy Star ratings to be posted like restaurant grades on buildings — even though Energy Star ratings are based on 1 to 100 and the City Council’s letter grades grouped the scores without understanding them or the energy required by varying occupancies.” (New York Post)
  10. How Major Real Estate Developers Are Experimenting with Co-Living “In the last decade, coworking has proven itself to be more than just a trend. It has dramatically changed the way many of us work today and reframed notions of how an office should look. And then came co-living. Co-living, a style of shared urban residence, typically involves furnished apartments with communal kitchens and common spaces – and an emphasis on amenities and community. The advantages for Millennials include affordability, flexibility and ease of use.” (Forbes)
Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.