10 Must Reads for the CRE Industry Today (June 29, 2016)

10 Must Reads for the CRE Industry Today (June 29, 2016)


  1. 10 issues that could impact commercial real estate “The changing global economy, debt capital market retrenchment and widespread demographic shifts are expected to have the most significant impact on real estate in Arizona and in the U.S. in the near-and long-term. This is according to the CRE 2016-17 Top Ten Issues Affecting Real Estate, an annual list produced and released by The Counselors of Real Estate. This year’s list was revealed at the National Association of Real Estate Editors conference in New Orleans.” (AZ Big Media)
  2. U.S. Apartments Shrink to Smallest Size in a Decade “When it comes to living spaces, size doesn’t always matter. Especially for young professionals, location is a more important factor than the size of the apartment as the cohort is more concerned with proximity to jobs, restaurants and other sources of entertainment, a recent RENTCafe report found. The proof is in the numbers with the average size of new apartments (those completed in 2016) now at 934 square feet, 8 percent smaller than those 10 years ago. Using Yardi Matrix data, the report examined changes in U.S. apartment size in buildings with at least 50 units over the last decade. Results showed that all property types have seen significant drops in size, but studios have seen the steepest decline. While an average studio in 2006 was 614 square feet, the average size is now 504 square feet. In contrast, two-bedroom apartments saw the least change in size.” (MultiHousing News)
  3. Real Estate and Other Hard Assets Are Good Investments During Economic Upheaval  “What Brexit has done, like so many other government-created crises before, is to provide a clear reminder to investors that real estate and other hard assets should be at the center of the wise investor's portfolio. Real estate tends to hold its value, generate more stable returns, and therefore, be less vulnerable in volatile economies. It may be a particularly useful investment in the current post Brexit climate. Consider below the connection between Brexit, hard assets and your portfolio. If your portfolio is primarily composed of so-called paper assets, like stocks, bonds and most financial instruments, then your financial security hinges on the value of your country's currency. If the currency devalues, so does your portfolio. If the currency inflates, so does your portfolio.” (The Street)
  4. Airbnb in talks for funding that value startup at $30B “Vying for an even larger-slice of the short-term rental market, Airbnb is in talks for a new funding round that would value the startup at $30 billion, according to a new report. Terms of the round would triple Airbnb’s valuation in two years and make it the second-highest-valued startup in the U.S., behind Uber, the New York Times reported. The San Francisco-based company plans to use the funds to ramp up growth, specifically targeting international markets. The new funding round also comes on the heels of a $1 billion debt facility, previously reported by Bloomberg. The San Francisco-based company has been aggressively expanding, and it opened operations in Cuba last year. It currently operates in 34,000 cities.” (The Real Deal)
  5. Priciest Assisted Living Markets in the United States “Depending on where you live in the United States, you could wind up paying significantly more or drastically less for senior care. Now, there’s data that indicates just how much more someone in Washington, D.C., and other expensive markets can expect to pay on an annual basis, compared with someone in Missouri or another more affordable state. In the Northeast, assisted living will cost you a pretty penny, according to state-specific information insurer Genworth Financial (NYSE: GNW) recently pulled from its 2016 Cost of Care report.” (Senior Housing News)
  6. Prime Real Estate: Amazon Has Swallowed Downtown Seattle “Walk down Seventh Avenue in downtown Seattle and you can't miss them: three gigantic spheres resembling melted-together Milk Duds rising in the shadow of Amazon’s new 500-foot-tall office tower. The architectural oddity has already become a tourist attraction and social media phenomenon. Passersby snap photographs and watch construction crews attach glass panes to the steel frames. Images stream through Instagram and Twitter. When they open in 2018, the 100-foot-tall orbs—Amazon calls them Biospheres—will host more than 300 plant species from around the world, creating what the company sees as the workplace of the future. Amazonians will be able to break from their daily labors to walk amid the greenery along suspension bridges and climb into meeting spaces resembling bird nests perched in mature trees, where the company expects them to brainstorm—and perhaps even invent the next billion-dollar opportunity. Amazon's new headquarters was designed to project a forward-thinking company eager to help employees be more productive, creative and happy by providing a connection to nature.” (Bloomberg)
  7. Detroit Real Estate Developer Focuses on the 90 Percent “One of the more common refrains you’ll hear from the community development class here is that while it is fantastic that the downtown area, the central business district, is seeing so much investment and has this great momentum, that area represents less than 10 percent of the population, less than 10 percent of the land mass of Detroit, and so what is the plan for the rest of the city,” says Mays. In part recognizing that shortcoming, and in part recognizing the importance of a real estate development team led by a Detroit native, funders that have been extremely active in those central business district areas have opened up their coffers to Develop Detroit. JPMorgan Chase, in the middle of lending or granting $100 million to Detroit initiatives, granted Develop Detroit $4 million for runway capital. Ford Foundation, which committed $125 million to Detroit over 15 years beginning in 2014, provided a $2 million grant to Develop Detroit. Kresge Foundation, with a $100 million Detroit commitment, provided a $1.3 million grant. Develop Detroit also obtained a line of credit from a national bank.” (Next City)
  8. Colorado self-storage company in big acquisition deal “National Storage Affiliates Trust, a real estate investment trust based in Greenwood Village that operates self-storage facilities and that went public last year, has made a big purchase. National Storage (NYSE: NSA) said it's buying 29 self storage properties in six states, for about $190 million.The purchase includes a 22-property portfolio in California for about $154 million. The company's been on a buying spree, said its CEO. ‘With these planned acquisitions, we will have successfully completed or currently have under contract approximately $390 million of acquisitions, representing 54 properties and over 36,500 units since the end of the first quarter 2016 and approximately $480 million, representing 71 properties and over 44,000 units since the end of the fourth quarter 2015,’ said CEO Arlen Nordhagen, in a statement.” (Denver Business Journal)
  9. Manhattan’s Hudson Yards Lands Another Big One The gargantuan Hudson Yards mixed-use development continues to lure big players to Manhattan’s far West Side, with Point72 Asset Management becoming the latest to make a major commitment to the $20 billion project being developed by Related Cos., Mitsui Fudosan America and Oxford Properties Group. Point72, the family office managing the assets of hedge fund legend Steven Cohen, has signed a letter of intent to lease 175,000 square feet at the 1.3 million-square-foot 55 Hudson Yards office tower.” (Commercial Property Executive)
  10. Adidas expands Kanye West partnership with branded stores “Adidas Wednesday announced it is expanding its relationship with hip-hop star and fashion designer Kanye West with a co-branded effort dubbed 'adidas + KANYE WEST' that the company calls ‘a Yeezy branded entity creating footwear, apparel and accessories for all genders across street and sport.’ An Adidas spokeswoman speaking to Reuters declined to disclose the financial terms of the deal and how long it may last.  Part of the deal includes new co-branded stores, a collaboration with the artist based at Adidas' Portland headquarters, and the introduction of more athletic, "performance-intended" designs.” (Retail Dive)
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