10 Must Reads for the CRE Industry Today (March 4, 2016)

10 Must Reads for the CRE Industry Today (March 4, 2016)


  1. Student Lender SoFi Said to Explore Mortgage REIT Formation “Social Finance Inc. is sketching out plans to start a real estate investment trust that would buy the mortgages the startup lender makes, according to two people with knowledge of the matter. Executives at the company are considering the idea as a way to raise money at low cost to lend out long term, the people said, requesting anonymity because the talks are private. The company makes home loans as big as $3 million, focusing on borrowers with stronger credit profiles.” (Bloomberg)
  2. Apple’s New San Francisco Office is More Than Just a Move from Cupertino “Apple’s decision to plant a flag in San Francisco, 46 traffic-choked miles north of its headquarters, comes years after similar moves from rival tech firms such as Google and LinkedIn and marks a turning point in Apple’s willingness to accommodate workers, according to recruiters and former employees. The move is one sign of the intensifying war for tech talent – and of the overwhelming preference of younger tech workers to live and work in the city, with its vibrant nightlife and public transportation.” (Fortune)
  3. Has Donald Trump Underperformed in the Real Estate Business? “Certain investors, like Warren Buffett, stand out as having produced outstanding returns over long periods, and they are judged winners, who have superior skill. Those who don’t measure up are politely called underperformers. In this short essay, I will try to evaluate the investment return of Donald Trump by the same standards. I will do so in an academic manner, relying only on substantiated facts. The calculation requires just a few pieces of information: (1) starting and ending wealth, (2) the investment asset class, and (3) the benchmark returns for that asset class.” (Forbes)
  4. Does Brexit Provide U.S. Entrance for Foreign Lenders? “In several ways, now is a good time for those outside the U.S. to get in on commercial real estate lending in the U.S. A tax law passed in December, known as the PATH Act, exempts certain foreign pension funds from being taxed on capital gains from investment in U.S. real estate and allows foreign investors to invest up to 10% in REIT stocks – up from 5% before the law was passed – without having to pay U.S. capital gains tax.” (Forbes)
  5. Drexel and Brandywine Team Up on $3.5B Project in Philadelphia “Drexel University and Brandywine Realty Trust are partnering to create Schuylkill Yards, a 14-acre master planned community in Philadelphia that will act as an innovative community. Expected to be developed over the next two decades, Schuylkill Yards will consist of 5 million gross square feet of mixed-use real estate on a 10-acre site next to Drexel’s main campus and adjacent to Amtrak’s 30th Street Station and Brandywine’s Cira Centre.” (Commercial Property Executive)
  6. Lower Manhattan Retail Market Evolving as Consumer Demand Increases “According to CBRE's newly released Manhattan Retail MarketView for fourth quarter 2015, the evolution of Downtown Manhattan -- once recognized mainly for its financial office tenants, it now has emerged as a home for TAMI-sector tenants, helping drive increased demand for retail, food and entertainment. The need for retail space in Lower Manhattan continues to grow, as a rising number of retailers seek a presence in the area.” (World Property Journal)
  7. Stage Stores to Close 30 Units after Weak Q4 “Warm weather was a problem for most retailers in the fourth quarter, but Houston-based Stage Stores also got hit by weakness in the energy sector and the Mexican Peso. During the company’s fourth quarter ended Jan. 30, sales declined 4.2% to $502.6 million and same store sales declined 3.4%. Full year sales declined 2.1% to $1.6 billion and same store sales fell 2%. Profits fell sharply to $21 million, or 72 cents a share, from $43.7 million, or $1.36 a share the prior year. In conjunction with the release of fourth quarter results, the company said it planned no new store openings in 2016 but said it would close 30 of its 832 units.” (Chain Store Age)
  8. Multifamily Peaks in Construction Outlays “NAHB Housing Policy Economist Na Zhao reports that total private residential construction spending stood at $433.2 billion in January, an unchanged rate from December’s $433.1 billion. But year-over-year growth is strong, with an increase of 7.7% from January 2015. The rate is also the highest it has been since the November 2007. Multifamily construction appears to be the strongest segment of the residential spending market.” (Multifamily Executive)
  9. Lenders Blocking U.S. Agents from Buyers’ Closing Documents “In a recent internal survey of members across the country, the National Association of Realtors found that 54.5 percent of agents reported they had experienced difficulties obtaining the Closing Disclosure form used under the new federal rules, and that half of these agents detected errors when they finally reviewed them. The errors included incorrect fee charges, commission splits, taxes and failure to include seller concessions to the purchasers, among others.” (The Real Deal)
  10. Nordstrom Tower Plan May be Keeping Midtown Storefronts Empty, Experts Say “More than a dozen vacant storefronts line a six-block stretch of Broadway between Columbus Circle and Times Square in what some say is the result of property owners holding out for sky-high rents expected when the long-awaited Nordstrom Tower is completed. There are 13 vacant storefronts along Broadway between 53rd and Central Park.” (DNA Info)
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