10 Must Reads for the CRE Industry Today (June 16, 2016)

10 Must Reads for the CRE Industry Today (June 16, 2016)


  1. Why the Federal Reserve Left Interest Rates Alone—For Now “The time for another interest-rate increase is ... not yet, the Federal Reserve decided Wednesday. Despite hype earlier this spring about considering a hike in June, gloomy May jobs data and the possibility that United Kingdom voters will opt out of the European Union in a vote next week -- setting off a new round of market volatility -- prompted members of the central bank's monetary policy committee to wait, according to a statement. The decision leaves short-term interest rates at 0.25% to 0.5%, the range set in December.” (The Street)
  2. World Isn’t Ready for Another Fed Increase “When the Federal Reserve raised rates in December, it thought the fallout would be minimal. It had telegraphed the increase for a year and it was, after all, just a quarter of a percentage point. Yet since then both the U.S. and even more so the global economies have slowed. The reason isn’t because a quarter point rate increase by itself represents a stringent tightening of monetary policy. Rather, it brought to an end seven years of unprecedented monetary ease that had helped fuel a global commodity bubble.” (Wall Street Journal)
  3. Airbnb Gets $1 Billion Debt Facility from U.S. Banks: Source “Apartment-sharing startup Airbnb Inc has secured a $1 billion debt facility from some big U.S. banks to aid its new services and finance its expansion plans, a source close to the company said. JPMorgan, Citigroup Inc, Morgan Stanley and Bank of America Corp led the debt deal, the source said. Airbnb, which expects to achieve profitability in 2016, raised over $100 million in a round of funding late last year.” (Reuters)
  4. Pensions Unaware Hidden Real Estate Fees Dwarf Those Disclosed “In recent years, following a decade-long gorging on hedge and private equity funds by government pensions, the massive hidden fees and expenses related to these “alternative” investment funds have attracted greater scrutiny. Despite initial skepticism, it is now widely acknowledged that undisclosed fees and expenses as high as 8 percent may dwarf hedge and private equity disclosed fees of 2 percent. With monumental total (disclosed and undisclosed) fees and expenses, it’s no surprise that the net performance of these funds has been unimpressive.” (Forbes)
  5. Developers Are Making Millions Flipping Rundown Townhouses “For nearly two centuries, townhouses have served as status symbols for the New York elite. And for most of that time, these rarified dwellings typically traded from end-user to end-user: A family built one, sold it to another who altered it slightly to taste, and so on through the generations. In the modern era, though, townhouses have been chopped up by landlords to create multiple apartments, or even abandoned to the elements or squatters. But the potential to re-establish them as beautiful family residences never lost its appeal.” (New York Post)
  6. The Most Walkable Metros with the Highest Rent Premiums “The real estate market was once fueled by suburban neighborhoods with large yards and a place to park your car, but the tables have turned and the end of sprawl is in sight. The nation’s 30 largest metros consist of 619 regional “walkable urban places” (WalkUPs), defined as a development with substantially higher density, mixed-use real estate products, emerging and new product types, and a variety of transportation options. WalkUPs are seeing high demand for real estate development—and rent premiums along with it.” (Multifamily Executive)
  7. Purdue Takes On $1B Innovation District “Purdue Research Foundation and Browning Investments LLC are teaming up on a $1.2 billion mixed-use project at the west end of the Purdue University campus in West Lafayette, Ind., that will take 15 to 20 years to build. The Purdue Innovation District will encompass 450 acres and total several million feet of building space including housing for students, faculty and city residents; a hotel with conference center; restaurants; office and business space; parks; research facilities and industrial space.” (Commercial Property Executive)
  8. Brookshire to Acquire 25 Walmart Express Stores “Brookshire Grocery Co. said Wednesday it has agreed to acquire 25 former Walmart Express stores from west Texas to southern Louisiana that were shuttered earlier this year. The stores will be converted to a new banner — Spring Market — in honor of the opening of Brookshire’s first store in 1928 on Spring Avenue in Tyler, Texas. Brookshire said the acquisition is scheduled to be completed in July.  It includes 20 stores in Texas and five in Louisiana.” (Supermarket News)
  9. Bed, Bath & Beyond Acquires Home Décor Site—Probably at a Steal “Bed Bath & Beyond made another move to boost its online offerings by acquiring a home furnishings and home décor flash-sales site. The chain announced it has acquired One Kings Lane in an all-cash transaction. Bed Bath & Beyond did not disclose the purchase price, but said it was ‘not material’ to its finances. It’s a bit of a comedown for the San Francisco-based One Kings Lane, which was founded in 2009. The online retailer once enjoyed a reputation as one of the industry’s hottest e-commerce start-ups, with a valuation of about $900 million just a couple of years ago.” (Chain Store Age)
  10. Developers Takes Back Indianapolis Marriott Downtown for $165M “Maryland-based LaSalle Hotel Properties has agreed to sell the 622-key Indianapolis Marriott Downtown to affiliates of White Lodging Services Corp. and REI Investments for $165 million. The transaction is expected to close early in the third quarter of 2016. Merrillville-based White Lodging and Carmel-based REI Investments, along with Kite Cos., developed and opened the 19-story hotel in February 2001. Later in 2004, LaSalle purchased the property for $106 million.” (Commercial Property Executive)
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