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10 Must Reads for the CRE Industry Today (March 20, 2019)

A 46-story tower of retail, entertainment and accommodation, with a giant LED billboard on one side, is set to open in early 2022 in Times Square, reports CNBC. Real estate services firm Jll will acquire capital markets services provider HFF, in a cash and stock transaction valued at approximately $2 billion, announced the two firms. These are among today’s must reads from around the commercial real estate industry.

  1. JLL to Accelerate Growth in Capital Markets Through Acquisition of HFF “Jones Lang LaSalle Incorporated and HFF, Inc. today announced that they have entered into a definitive agreement under which JLL will acquire all the outstanding shares of HFF in a cash and stock transaction with an equity value of approximately $2 billion. The transaction has been unanimously approved by the boards of directors of both companies. HFF is one of the largest and most successful commercial real estate capital markets intermediaries in the U.S.” (PR Newswire)
  2. Fed Faces Crucial Decision on Mix of Treasurys in its Portfolio “Markets have cheered the Federal Reserve’s imminent announcement that it will stop shrinking its asset portfolio later this year, but determining that date is just one challenge facing central-bank officials. Now, they are turning to the arguably more sensitive task of determining the composition of the Treasury securities the central bank will hold. Specifically, they need to decide the right combination of Treasurys of varying duration to hold—whether mostly short-term bills or a mix that also includes more longer-term notes and bonds.” (Wall Street Journal, subscription required)
  3. New York City Picks Team to Develop Broadway Triangle Sites “New York City’s housing development agency has selected a joint venture that includes community organizations to build hundreds of affordable apartments on an undeveloped swath in Brooklyn that had been at the center of an eight-year legal battle over racial and housing discrimination. The land, part of what is known as Broadway Triangle, lies at the intersection of three neighborhoods—Williamsburg, Bedford-Stuyvesant and Bushwick—which are home to Hispanic, black and Hasidic communities. It encompasses three sites and has more than 69,000 square feet of space.” (Wall Street Journal, subscription required)
  4. Times Square is about to Get a new 46-story Tower that is Basically a Giant LED Billboard on One Side “Contractors have started work on a project that will light up New York’s Times Square even more. TSX Broadway, as it is known, will be a “branded beacon,” 46 floors of retail, entertainment and accommodation. The building, on the corner of 47th Street at Broadway and Seventh Avenue, currently houses a DoubleTree Hilton hotel and the landmark Palace Theatre, which will be restored and lifted 30 feet to accommodate an experiential retail outlet. Upper floors will have a performance stage over Times Square, a restaurant with large terrace and a hotel with more than 600 rooms.” (CNBC)
  5. U.S. Commercial, Multifamily Mortgage Debt Climbs to $3.39 Trillion in 2018 “According to the Mortgage Bankers Association's latest Commercial and Multifamily Mortgage Debt Outstanding quarterly report for 2018, the level of commercial and multifamily mortgage debt outstanding in the U.S. at the end of 2018 was $216 billion (6.8 percent) higher than at the end of 2017. MBA's report found that total mortgage debt outstanding in the final three months of 2018 rose by 2.1 percent ($68.5 billion) compared to the previous quarter, with all four major investor groups increasing their holdings. Multifamily mortgage debt grew $32.2 billion (2.4 percent) to $1.36 trillion over the same period.” (World Property Journal)
  6. Homebuilder Sentiment Holds Steady Despite a Decline in Mortgage Rates “The nation’s homebuilders are feeling positive about their business, but not as much as they did a year ago. A monthly sentiment measure held steady at 62 from February to March, according to the National Association of Home Builders/Wells Fargo Housing Market Index. The index stood at 70 in March 2018. Anything above 50 is considered positive.” (CNBC)
  7. Residential Rent Growth Hits 10-Month High in U.S. “According to Zillow's February 2019 Real Estate Market Report, residential rent prices grew at their fastest rate in 10 months in February 2019, reaching 2.4 percent year-over-year appreciation. The U.S. median monthly rent was $1,472 in February, up from $1,438 a year earlier. This translates to more than $400 in additional yearly expenses for the typical renter. Rents have steadily recovered since a slowdown in the fall that saw the first annual price decreases in more than six years.” (World Property Journal)
  8. Five Trends That Will Impact Real Estate Investing This Year “Let’s be honest: Real estate valuations are very high today. But worries of an impending housing crash are premature. There are many trends that could continue to drive real estate values. A millennial middle class hungry for the independence of owning a home and a reasonable economy outweigh housing indicators that might signal a downturn is imminent. That doesn’t mean U.S. real estate markets are not in a pivotal phase. In fact, 2019 is poised to create significant opportunity for those who understand the five significant economic and demographic trends driving the market. Let’s consider the following five trends:” (Forbes)
  9. U.S. Commercial Real Estate Lenders Expect a Strong 2019  “Alternative lenders increased their market share in the commercial real estate debt sector in 2018, panelists said at a ULI North Texas event in March. That trend is likely to continue this year as competition among all types of debt providers heats up capital markets. More than 100 debt funds are operating in the United States today, and they continue to gain market share, said Mona Carlton, senior managing director at HFF. Real Capital Analytics (RCA) reports that debt funds and nonbank lenders commanded about 11 percent of the U.S. commercial and multifamily real estate debt market last year, up from 7 percent in 2017.” (Bisnow)
  10. Now You Can Shop and Buy Stuff on Instagram Without Leaving the App “The on-Instagram checkout feature is currently a closed beta, so only a small group of 20 brands will get it at first. They include Adidas, Burberry, H&M, Micheal Kors, Nike, Oscar de la Renta, Prada, Revolve, Warby Parker, Zara, and others. After the beta, Instagram will expand the service to more brands (and more types of brands). For brands not yet participating, shoppers will have to make purchases the old way for now.” (Fast Company)
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