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10 Must Reads for the CRE Industry Today (May 1, 2019)

An IPO could help WeWork maintain its rapid growth, according to the Wall Street Journal. FTC has shut down the largest real estate investment scam ever, according to the Jackson Sun. These are among today’s must reads from around the commercial real estate industry.

  1. WeWork Spends a Lot of Cash. An IPO Could Help Keep Up the Flow “By turning to the public markets, office-space company WeWork Cos. could find a key to maintaining rapid growth: more cash. Nine-year-old WeWork, which on Monday said it filed confidentially for an initial public offering in December, has been a prodigious spender of capital in recent years, burning through more than $2.3 billion of free cash in 2018 alone, according to an annual report it gave to investors recently. That is even more than the total of another big-spending startup, ride-hailing company Uber Technologies Inc.” (Wall Street Journal, subscription required)
  2. A Marijuana Brand with Loads of Street Cred “To his die-hard fans, Mr. Sherbinski is a storied name in marijuana. A celebrated California cultivator, he helped create the Gelato and Sunset Sherbert strains that have been name-checked in more than 200 hip-hop songs, including ‘First Off’ by Future and ‘Bosses Don’t Speak’ by Migos. At the Business of Fashion’s Voices conference in London last year, his brand, Sherbinskis, was introduced as ‘the Supreme of marijuana.’” (The New York Times)
  3. State Appeals Court Upholds Tax Ruling Against Vornado “A New York state appeals court has upheld an NYC transfer tax ruling that will cost Vornado and its entities more than $25.5 million, The Post has learned. In a regulatory filing Monday, Vornado said the additional tax would be $25.503 million, up from the $23.8 million it reported last year, likely due to interest. The tax bill includes nearly $5 million for one building and $8 million for another that was sold by its Alexander’s entity.” (New York Post)
  4. Estimated Cost of 2028 Los Angeles Olympics Jumps to $6.9 Billion “The predicted cost of staging the 2028 Los Angeles Olympics has risen to $6.9 billion, according to an updated budget released Tuesday by the private committee responsible for staging the massive sports event. The new figure represents a $700 million increase over previous estimates, with organizers saying they had to adjust for inflation after L.A., which originally bid for the 2024 Games, agreed to wait four more years.” (Los Angeles Times)
  5. How to Fight Inflation Through Real Estate Investing “Inflation: a sustained increase in the general level of prices for goods and services. In more lay terms, it means as time goes on and inflation goes up, your buying power becomes less and less with the same amount of money. Remember in the mid-90s when $1 million dollars seemed like you were ready to retire for life? Fast forward to 2019 and that same amount seems like it would barely suffice for a few years.” (Forbes)
  6. FTC Shuts Down Largest Real Estate Scam EverThe word ‘sanctuary’ brings to mind comforting places – an oasis, a nature preserve, a port in a storm. That’s probably why it was chosen as part of the name of a luxury real estate development that turned out to be anything but any of those places. In November, a federal district court granted the FTC’s request to shut down a massive real estate investment scam called Sanctuary Belize that took in over $100 million. Located in the Central American country of Belize, it was also marketed under other names, including Sanctuary Bay and The Reserve.” (Jackson Sun)
  7. Struggling Subway Closed More Than 1,000 Restaurants in 2018 “Struggling fast food franchise Subway closed more than double the number of restaurants in 2018 than it had forecast, the company revealed in a regulatory filing. An annual financial disclosure statement filed in Wisconsin Monday says a net 1,108 restaurants closed nationally in 2018. Subway had forecast that about 500 would close, according to media reports.” (New York Post)
  8. LaSalle Street Office Tower Could Fetch $280 Million “A New York real estate investor is putting a 40-story LaSalle Street office tower up for sale, potentially adding to a run of buildings trading hands in the city's financial corridor. Tishman Speyer plans to go to market in the next several weeks with 190 S. LaSalle St., a nearly 800,000-square-foot building it has owned since 2013, according to sources familiar with the offering. It’s unclear how much Tishman is seeking.” (Crain’s New York Business)
  9. Wynn Resorts Cleared to Open Massachusetts Casino as Regulator Levies $35 Million Fine “Massachusetts gambling regulators said casino giant Wynn Resorts Ltd. can retain its license to open a new casino in the state but sharply rebuked Chief Executive Matt Maddox over his leadership of the company amid sexual-misconduct allegations against founder and former CEO Steve Wynn. The Massachusetts Gaming Commission fined the company $35 million over its handling of those allegations, along with $500,000 to be paid by Mr. Maddox personally.” (Wall Street Journal, subscription required)
  10. Garden State Plaza Getting Overhaul That Would Add Apartments, Give Paramus a ‘Downtown’ “The owners of Westfield Garden State Plaza have a grand vision to transform the region’s largest shopping center into something Paramus has never seen: a brand-new downtown, equipped with a luxury, mixed-use residentialdevelopment where mall-lovers can live a stone’s throw from their favorite stores. Mall officials revealed in an exclusive interview with and the USA TODAY NETWORK New Jersey their long-anticipated renovation plans, which begin with re-purposing three large vacant spaces at the mall to accommodate an estimated 20 new retail tenants.” (
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