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10 Must Reads for the CRE Industry Today (January 5, 2017)


  1. Macy’s Posts Disappointing Holiday Sales, Down 2.1% in November/December; Unveils Store Closures “Macy's shares tumbled 6 percent after the market's close Wednesday after it posted disappointing holiday sales and released 68 of the 100 stores it plans to close as it looks to turn around its performance. Macy's comparable sales fell 2.1 percent in November and December, which was at the low end of its previous guidance. It maintained its 2016 comparable sales guidance of a 2.5 percent to 3 percent decline, but expects full-year diluted earnings to be in a range of $2.95 to $3.10. It had previously been expecting $3.15 to $3.40.” (Reuters)
  2. Fed Sees Faster Economic Growth Under Trump, But Not a Boom “Federal Reserve officials expect Donald J. Trump’s election to result in somewhat faster economic growth over the next several years, but they see little chance of the boom Mr. Trump has promised, according to an account of the Fed’s most recent meeting in mid-December. That is in part because the Fed plans to raise interest rates more quickly if growth accelerates. The minutes, released Wednesday, offer more evidence that the Fed sees itself as a counterweight to Mr. Trump’s promised policies of tax cuts and infrastructure and defense spending.” (The New York Times)
  3. Amazon is Opening its First Book Store in New York City “Online retailer Amazon plans to continue its push into brick and mortar stores when it opens its first Manhattan bookstore later this year, according to reports. The shop, a 4,000-square-foot location in the city's Columbus Circle complex, joins Amazon stores in Seattle, San Diego and Portland, according to a Wall Street Journal report. The company also plans to open stores in Chicago and Massachusetts and is considering building another store at a different location in Manhattan.” (Fortune)
  4. There’s a Warning Sign That We Are Nearing a ‘Retail Recession’ “It's getting ugly for brick and mortar retailers. Physical stores are struggling to keep pace with online retailers such as Amazon and consumer trends are shifting away from their product offerings. Recent news has made this decline even more obvious. Another sign of the struggles retailers face comes from the labor market. Neil Dutta, the head of US economics at Renaissance Macro, pointed out in a note to clients on Thursday that the percentage of holiday hiring coming from the retail sector was at its lowest since the recession.” (Business Insider)
  5. Amazon, Forever 21 Vying for Bankrupt American Apparel: Report “Online retailer and teen apparel store chain Forever 21 are among the companies weighing offers to acquire bankrupt American Apparel, people familiar with the talks said on Wednesday. The bankruptcy auction of Los Angeles-based American Apparel, which made its branding theme ‘Made in the U.S.A,’ will determine the future of a major clothing manufacturing plant in California, one of the most expensive U.S. states in terms of labor costs.” (Reuters)
  6. How Sears Lined Up $2 Billion in Much Needed Money in the Last 10 Days “Sears Holdings said on Thursday it had reached a deal to sell its popular Craftsman tool brand to Stanley Black & Decker, its latest move in the last week or so to shore up its finances with urgently needed money as sales continue to collapse. The company is selling Craftsman, a brand that generated sales of $200 million in the last year, 90% of which were at Sears and Kmart stores, for a total of about $900 million. That includes $525 million at the closing of the deal, another $250 million at end of year three.” (Fortune)
  7. These Startups Are Bringing Commercial Real Estate into 2017 “Commercial real estate is behind the times. That might come as a surprise, especially since the industry is valued at $12.6 trillion. Thankfully, a growing community of tech startups is beginning to address common issues that plague the industry. Just weeks ago, Hightower and VTS, software solutions that help real estate professionals and owners manage the sales and leasing of properties, announced a $300 million merger to combine both services under the name VTS. The company focuses on helping real estate professionals track deals and manage space in real-time, and collaboratively.” (Forbes)
  8. Restaurant Industry Ends 2016 on a Sour Note “While the restaurant industry struggled with weak sales and traffic throughout 2016, it seems that December, in particular, had the worst same-store sales growth of the year. According to Nomura-Instinet analyst Mark Kalinowski, December is slated to be the only month where the industry as a whole generated negative same-store sales growth. Kalinowski points to adverse weather as the largest factor in the sales decline, particularly during the second and third week of the month.” (CNBC)
  9. What CRE Finance Will Look Like in 2017 “The commercial real estate financing market is facing numerous obstacles this year, ranging from the potential impact of newly implemented regulations to a likely shift in federal monetary policy to shifting solid fundamentals—and whether or not those changes will decrease demand for debt. There is also the rise of nontraditional, nonbank lenders in the marketplace to consider, as well as an incoming presidential administration that many believe will bring about policies beneficial to the overall economy but whose specific agenda remains notoriously hard to predict.” (Commercial Observer)
  10. CBRE Gets Floored: Brokerage Acquires Real Estate Tech Startup “CBRE acquired real estate tech startup Floored for an undisclosed price, in a deal that expands the real estate services behemoth’s technology division. Founded in 2012, Floored produces virtual, 3D office floor plans for landlords and brokers. The firm’s co-founders David Eisenberg, Dustin Byrne and Judy He will join CBRE along with their 36 employees.” (The Real Deal)
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