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ten must reads Trump China

10 Must Reads for the CRE Industry Today (March 8, 2017)

  1. China Grants Preliminary Approval to 38 New Trump Trademarks “China has granted preliminary approval for 38 new Trump trademarks, paving the way for President Donald Trump and his family to potentially develop a host of branded businesses from hotels and golf clubs to bodyguard and concierge services, public documents show. Trump's lawyers in China applied for the marks in April 2016, as Trump railed against China at campaign rallies, accusing it of currency manipulation and stealing U.S. jobs. Critics maintain that Trump's swelling portfolio of China trademarks raises serious conflict of interest questions. China's Trademark Office published the provisional approvals on Feb. 27 and Monday. If no one objects, they will be formally registered after 90 days. All but three are in the president's own name. China already registered one trademark to the president, for Trump-branded construction services on Feb. 14, the result of a 10-year legal battle that turned in Trump's favor after he declared his candidacy.” (Bloomberg)
  2. Amid Insider Trading Allegations, SoftBank Eyes U.S. Commercial Real Estate “Japanese telecom giant SoftBank has been in the news lately primarily because of its investments, but its recent announcement that it was acquiring alternative investment player Fortress (a move we examined last week) was quickly followed by SEC suspicions of insider trading by unidentified traders at London and Singapore brokerages. Yet so far, this latest twist does not seem to be putting a damper on what appears to be SoftBank’s increasing interest in commercial real estate investment. In a time of political and economic uncertainty in the U.S. and Europe, SoftBank CEO Masayoshi Son appears to be making a bet on the relative stability of commercial real estate, evidenced in part in the $3.3 billion acquisition of Fortress Investment Group. The deal with Fortress ‒ a player in the commercial real estate game whose recent loans include a $109 million construction loan for the SLS Park Avenue hotel at 444 Park Ave. South in Manhattan and a $115 million loan for 9 Dekalb Ave., a planned 1,000-foot residential tower in Brooklyn ‒  is not the only indication that SoftBank has put commercial real estate on its shopping list.” (Forbes)
  3. Confronted by market doubts, Federal Reserve drove March rate rise expectations “Early last week, financial markets saw just a 30 percent chance of the Federal Reserve raising interest rates in March; but by Friday after a striking series of comments from Fed officials, including Chair Janet Yellen, traders saw an 80 percent chance. Investors were aware that improving U.S. economic data, a stable global economy, a booming U.S. stock market and easy financial conditions, provided some justification for further Fed interest rates rises this year. But policymakers had to ensure that global markets were indeed ready for a rate increase as soon as its next policy meeting on March 14-15, and further rises later this year, after a series of false starts in 2015 and 2016. The U.S. central bank prefers to have market expectations aligned with its own policy plans. Of the 27 rises in interest rates of a quarter of a percentage point since 1991 only three occurred with a market probability forecast of less than 60 percent a month beforehand, research from U.S. bank, Wells Fargo (WFC.N), research showed. ‘We didn't clearly see how the balance of risks was shifting, so they have to slap our faces, and say, 'Look, you are missing the point',’ said Tim Duy, an economics professor at the University of Oregon.” (Reuters)
  4. BREAKING: Voters shoot down Measure SThe results are in, and developers and housing advocates are clinking glasses. Angelenos voted on Tuesday to quash the controversial Measure S, the initiative which would have imposed a two-year moratorium on nearly all developments in L.A.. Its detractors say that by shooting down Measure S in such an emphatic manner –it received only 31.15 percent of votes – voters averted a catastrophe in the housing market.I’m unbelievably relieved,’ City Council President Herb Wesson told The Real Deal Tuesday night, at the ‘No on S’ campaign’s party at the L.A. Hotel. ‘I’m optimistic that a lot of the concerns from ‘Yes on S’ will be addressed, but it’s just that they took it too far. The voters rejected Measure S, and they rejected it big.’ The No campaign officially declared victory late Tuesday night. Just after midnight on Wednesday, the Yes campaign conceded.” (The Real Deal Los Angeles)
  5. The number of new downtown Miami condos will surge this year — and then fall "Downtown Miami’s real estate market is slowing fast, just as developers are preparing to deliver the most new condos in a single year since the last bubble — a dynamic that will mean good deals for cash-rich investors and for young professionals, who might finally be able to rent units at decent rates. Nearly 3,500 downtown condos will be delivered this year — a surge since the Great Recession. But the numbers are expected to drop to about 2,800 in 2018 and less than 2,000 in 2019 as developers push back plans to start new projects. That’s according to an annual report by Miami’s semi-autonomous, tax-funded Downtown Development Authority. The DDA had predicted a slowdown in its 2016 report, blaming weak currencies in Latin America and Europe — and a stronger U.S. dollar — for effectively making units more expensive for the foreign buyers who drive Miami’s market. But while the sliding demand will limit financing for some new projects, it’s also a sign of a market stabilizing after five years of continuous growth that some analysts had worried might lead to another condo glut. ‘A lot of people ask me, ‘When do you think the market’s going to crash?’ said Anthony Graziano of Integra Realty Resources and one of the lead authors of the report, which covers the period from July 2016-January 2017. ‘And I tell them, there’s no distress in the market right now. I think a lot of this pricing correction right now is really just a function of good old supply and demand — and I think that’s good for buyers.’” (Miami Herald)
  6. Here's why Dick's Sporting Goods won't suffer the same fate as Sports Authority “After scooping up market share that its bankrupt competitors left behind, Ed Stack, CEO of Dick's Sporting Goods, took a step back to diagnose the health of its core business. His conclusion? While the sporting goods chain doesn't suffer the same "symptoms of the disease" that his competitors "atrophied from and died," that doesn't mean it can sit idly by. On a call with investors after Dick's fiscal fourth-quarter earnings report, Stack outlined how his company will continue grabbing share amid consolidation in the industry. His strategy includes opening stores in markets where competitors' bankruptcies left a gap, and targeting new customers in its existing markets where one of those chains has failed. Meanwhile, Dick's is looking to strengthen its assortment by cutting 20 percent of its lower-volume vendors to focus on its most important suppliers, and lean harder into its private brands.” (CNBC)
  7. Finmarc Buys Big Industrial Portfolio in NoVa “In a $58 million deal, Finmarc Management Inc., of Bethesda, Md., has purchased a 15-building portfolio comprising more than 750,000 square feet of industrial and warehouse space in Northern Virginia’s I-95 corridor, Finmarc announced last Friday. Thirteen of the buildings are in Featherstone Industrial Park in Woodbridge, and two are in Fredericksburg, Va., roughly 30 miles south. Overall, the portfolio has more than 25 tenants and is 91 percent leased. The seller was Steuart Investment Co., of Chevy Chase, Md. Marc Rampulla, Mark Levy and Jay Wellschlanger of JLL were the brokers of record. The Featherstone portion of the portfolio encompasses 58 acres. At a total of 160 acres, Featherstone Industrial Park is one of the largest such parks in Northern Virginia and accounts for about 40 percent of all warehouse and distribution space in the Prince William East submarket.” (Commercial Property Executive)
  8. $1.2B Mixed-Use City Center Planned for West Omaha “Block Construction Services will provide master planning for Avenue One, a $1.2 billion mixed-use project that will serve as a City Center for West Omaha, Neb., providing a hub of activity for residents and businesses. ‘The major appeal is going to be the re-creation of Main Street. We’ve got really a true mixed-use environment where you can have live/work/play options,’ Aaron Mesmer, Block Real Estate Services’ investment sales manager, told MHN. ‘The development will have multifamily and office over retail, restaurants, entertainment, fitness and a trail system that connects the whole thing.’ The land for the property was acquired by Jasper Stone Partners 13 years ago.” (MultiHousing News)
  9. JPMorgan Chase Gives $1.2 Million More to Detroit Neighborhoods “As part of its $100 million commitment to Detroit, JPMorgan Chase has announced more than $1.2 million in grants to further revitalize the city’s neighborhoods. The latest donation supports six development programs that aid Detroit through housing development, blight removal, new-business creation, parent education, and neighborhood beautification projects. The new grants will support Southwest Solutions, Vanguard Community Development Corp., the Grandmont Rosedale Community Stabilization Program, Eastside Community Network, Michigan Community Resources, and Community Development Advocates of Detroit.” (Multifamily Executive)
  10. U.S. Commercial, Multifamily Loan Maturities Down in 2017  “According to the Mortgage Bankers Association's 2016 Commercial Real Estate/Multifamily Survey of Loan Maturity Volumes, ten percent, or $175.9 billion, of $1.7 trillion of outstanding commercial and multifamily mortgages held by non-bank lenders and investors will mature in 2017. This represents a 4 percent decrease from the $183.3 billion that matured in 2016. This year marks the end of the so-called 'wall' of commercial and multifamily mortgage maturities stemming from the ten-year loans made in 2006 and 2007," said Jamie Woodwell, MBA's Vice President of Commercial Real Estate Research. 'As those loans have paid off and paid down, we've seen the amount left getting smaller, to the point that we have less in maturities this year than we did in either 2016 or 2010.' The loan maturities vary significantly by investor group.  Just $12.1 billion (2 percent) of the outstanding balance of multifamily and health care mortgages held or guaranteed by Fannie Mae, Freddie Mac, FHA and Ginnie Mae will mature in 2017.  Life insurance companies will see $23.1 billion (5 percent) of their outstanding mortgage balances mature in 2017.  Among loans held in CMBS, $104.4 billion (20 percent) will come due in 2017.  Among commercial mortgages held by credit companies and other investors, $36.3 billion (22 percent) will mature in 2017.” (World Property Journal)
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