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ten must reads Toys R Us Leon Neal/Getty Images

10 Must Reads for the CRE Industry Today (March 15, 2018)

Toys ‘R’ Us will liquidate and close or sell all of its U.S. stores, reports the New York Post. The Senate has passed rollbacks to the Dodd-Frank regulations, according to the Washington Post. These are among today’s must reads from around the commercial real estate industry.

  1. Toys ‘R’ Us Is Going Out of Business “Toys ‘R’ Us, the iconic toy retailer, will shutter or sell its stores in the United States after failing to find a buyer or reach a deal to restructure billions in debt, putting at risk about 30,000 jobs. The closure is a blow to hundreds of toy makers that sell their products at the chain’s US stores, including Barbie maker Mattel, board game company Hasbro and other vendors like Lego.” (New York Post)
  2. Senate Passes Rollback of Banking Rules Enacted After Financial Crisis “The Senate on Wednesday passed the biggest loosening of financial regulations since the economic crisis a decade ago, delivering wide bipartisan support for weakening banking rules despite bitter divisions among Democrats. The bill, which passed 67 votes to 31, would free more than two dozen banks from the toughest regulatory scrutiny put in place after the 2008 global financial crisis.” (The Washington Post)
  3. Retail Defaults to Spike in March as Maturities Mount in 2019, Moody’s Says “Retailers defaulting on loans are expected to reach a peak this month, according to a new report from Moody's Investor Service. The firm is calling for retail defaults among borrowers to reach a rate of 12.4 percent by the end of this month, which would be a new high. For comparison, the rate of defaults for the trailing 12 months is about 6.3 percent.” (CNBC)
  4. These Real Estate Fund Managers Show There’s Money to be Made as Rates Rise “The fund’s investor shares have a $2,500 initial investment minimum and an annual expense ratio of 1.36%. The return figures on the table are after expenses. In an interview, co-lead manager Dobratz said he and Jason Wolf, the other co-lead manager, had been repositioning the fund “for a number of years” not only to protect capital from rising interest rates, but to benefit from them. He said the performance of the fund since President Trump’s election had shown the fund’s strategy was working.” (MarketWatch)
  5. Can Real Estate Investors Still Find a Good Deal in Utah and Colorado? “For five years, markets in Utah and Colorado have had strong economic growth and strong in-migration. The population increased 9 percent in Utah, the highest rate in the country, 8 percent in Colorado, putting upward pressure on housing. In the last three years home prices rose 25 percent in Utah, 35 percent in Colorado. Does this mean the best years are over? Can investors still get a good deal in these growth markets? In a way Utah and Colorado are a metaphor for all real estate investing - what's the best investment strategy once a market has already been successful?” (Forbes)
  6. Why Real Estate Investors Should Borrow the Check List Strategy from Doctors and Pilots “I watch the struggles of some landlords and witness the success of others as they scale when process is divided into routine repeatable tasks. Even without bringing on additional team members, a checklist provides the ability to complete the enormous mental and physical workload of the many tasks that are using up your brain’s processing energy.” (Forbes)
  7. Signet Jewelers to Close 200 Stores “Signet Jewelers Ltd. said it will close more than 200 stores this fiscal year but open new ones outside of shopping malls, as one of the biggest mall-based chains combats slumping sales at its existing locations. The jewelry retailer, which owns Kay Jewelers, Zales and Jared The Galleria of Jewelry, said it hasn't adapted quickly enough as consumers make fewer trips to stores and shop more online or on their smartphones. The company's sales have declined for the past two fiscal years.” (MarketWatch)
  8. Why Real Estate and Insurance Lobbies Will Have a Huge Influence on Climate Policy “Existing structures were built using engineering safety standards based on extreme loads seen in the past centuries. When once-in-1,000-year floods, hurricanes or heat waves become more frequent, historic safety margins easily will be exceeded. The debate should shift focus on weather/climate volatility rather than warming. Nature's "margin calls" can be ruinous. Insured values of properties in 100 eastern coastal counties are reported to be $10 trillion. New York and Florida account for $3 trillion each.” (
  9. New Hollywood Co-working Space Is Exclusively for Cannabis Companies “A Hollywood office building is being converted into the city’s first coworking space exclusively for startups and freelancers working in the cannabis industry. One of the benefits of such a space, according to Paragon, is that it may be difficult for cannabis companies to access office space from traditional developers or property owners.” (Curbed Los Angeles)
  10. Commercial Real Estate Investors See Upside in Co-Working Office Spaces “According to CBRE, while commercial real estate investors generally take a positive view on co-working, maintaining a balance of traditional and co-working space in a building is critical when it comes to creating long-term capital value. Based on CBRE's 2018 Americas Investor Intentions Survey, investors say a co-working occupancy of a third of the space or less, with a qualified operator, supports a healthy capital value.” (World Property Journal)
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