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10 Must Reads for the CRE Industry Today (July 12, 2019)

Forbes looks at the range of real estate investment options. Charming Charlie is going out of business, reports Chron. These are among today’s must reads from around the commercial real estate industry.

  1. Google’s Plans for a Mega-Campus in San Jose Lurk Behind its Recent $1 Billion Housing Pledge “Last month, when Google said it was investing $1 billion to build 20,000 Bay Area homes over the next decade, it seemed like a generous investment — and compared to what other companies have given, it is. ‘Glad to do our part to support our future neighbors in San Jose,’ CEO Sundar Pichai tweeted to the mayor of San Jose, Sam Liccardo. But the company’s pledge followed months of tense discussions and protests over rising housing prices in San Jose, where the company is planning a new mega-campus.” (CNBC)
  2. There Are More Real Estate Investment Options Than Ever—Here’s What You Need to Know About Them “Real estate investments come in all shapes and sizes. Whether you've considered looking for an investment in an urban metropolis like New York City or a fix and flip opportunity in Austin, Texas, there is something out there for everybody. However, before embarking on a wild goose chase for the ‘best’ investment, it's important that you first understand what your investment objectives are. Just in the same way that one wouldn't begin investing in the stock market without first considering the objectives of the investment, the same wisdom holds true for real estate.” (Forbes)
  3. Private Equity’s Latest Scheme—Closing Urban Hospitals and Selling Off the Real Estate “On Thursday, thousands of union workers and community members are expected to rally against the decision of private-equity tycoon Joel Freedman to close Philadelphia’s 171-year-old Hahnemann University Hospital. Workers and community members are accusing Freedman of closing a vital medical center for the poor in order to sell the prime real estate to build luxury condos and hotels.” (The American Prospect)
  4. Israeli Bondholders to Hire Legal Firm in Standoff with Starwood “Bondholders in Israel have voted to hire a legal team to represent their interest against Starwood Capital, whose Tel Aviv bond is trading at roughly forty cents on the dollar, Commercial Observer has learned. The decision was nearly unanimous among the bondholders who participated in the vote, who together own 53 percent of the outstanding shares. Of the participants, 96 percent voted in favor of appointing legal representation and 95 percent voted in favor of appointing an economic consultant, according to documents filed on the Tel Aviv Stock Exchange.” (Commercial Observer)
  5. Charming Charlie to Go Out of Business “The company, which filed for Chapter 11 bankruptcy protection in Delaware on Thursday, plans to close 261 stores nationwide, including nine in the Houston area. Liquidation is expected to take until August 31, and will impact some 3,342 full- and part-time employees nationwide. The retailer in its court filings reported outstanding debt of about $81.8 million, and cash on hand of about $6,000. ‘The Debtors once again face issues similar to those that precipitated filing the Prior Cases: unsustainable operating expenses, including onerous leases, and constrained liquidity under our loan documents,’ Charming Charlie said in its bankruptcy filing.” (Chron)
  6. SF’s Mission Bay Is Almost Complete as Last Commercial Site Seeks Approval “A new lab and office building could fill the last commercial development site in San Francisco’s Mission Bay, capping off a two-decade transformation of 303 acres of warehouses and railyards. Developer Alexandria Real Estate Equities has proposed a 175,000-square-foot lab and office project at 1450 Owens St. It would be the only new commercial project in the area without a tenant. It would add new research facilities in a neighborhood with no empty lab or office space for lease, according to brokerage Cushman & Wakefield.” (San Francisco Chronicle)
  7. H&M Has a New Strategy to Avoid Retail’s Deadliest Mistake “H&M is the latest retailer to launch a buy-now, pay-later payment program to could encourage shoppers to spend more money at its stores. H&M has partnered up with Klarna, a global payments provider - that counts Afterpay as a competitor - that allows shoppers to purchase an item and have 30 days to decide whether they want to keep it and to pay for it across four installments. A spokesperson for Klarna said there are no fees or interest on the service; H&M said this is service expected to launch in the US in the fall.” (Insider)
  8. Where to Invest in Real Estate in 2019 “Halfway through the year real estate markets across the country hold different potential for investors, and favor different investment strategies. Some markets are over-priced - are they bubbles waiting to burst? Some boast strong demand, reflected in high home price increases - will they soon become over-priced? Some currently see moderate demand but have good economic growth - how will that growth affect future prices? And some are enduring mediocre growth and modest demand - how do you invest in a stagnant market?” (Forbes)
  9. Kroger to Build Fourth Ocado Warehouse Near Atlanta “The Kroger Co. has named Forest Park, Ga., as the fourth location for a high-tech customer fulfillment center (CFC) under its partnership with U.K.-based online grocer Ocado. Kroger said Thursday that the 375,000-square-foot automated warehouse is scheduled to break ground later this year and become operational in 2021. The site is located at 2000 Anvil Block Rd. in Forest Park’s Gillem Logistics Center, where Kroger already operates a 1.3 million-square-foot distribution center.” (Supermarket News)
  10. Foreign Property Investors Targeting U.S. Net Lease Assets in Greater Scale “According to new research from commercial property consultant CBRE, the global search for yield and portfolio diversification is driving more foreign investors to the U.S. net-lease real estate market. Foreign investment in net-lease assets--comprising office, industrial and retail properties--reached $1.9 billion in Q1 2019, up by 6.6% from Q1 2018's total. International investors accounted for an even larger share of net-lease investment (15.1%) in Q1 2019 than the same period last year (12.9%).” (World Property Journal)
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