10 Must Reads for the CRE Industry Today (May 12, 2016)

10 Must Reads for the CRE Industry Today (May 12, 2016)


  1. Brookfield Asset Management to Acquire MHC Portfolio for $2 Billion “NorthStar Realty Finance Corp. has agreed to sell its 135 manufactured housing communities to an affiliate of a real estate fund managed by Brookfield Asset Management Inc. for $2.04 billion or about $61,800/pad site. A portion of the purchase price includes Brookfield assuming $1.27 billion of outstanding mortgage notes encumbering the portfolio.” (CoStar News)
  2. 1 in 3 American Malls Are Doomed: Retail Consultant Jan Kniffen “About one-third of American malls are not long for this world, retail analyst Jan Kniffen said Thursday. The CEO of J. Rogers Kniffen Worldwide Enterprises spoke after Macy's reported its worst sequential same-store sales decline since the financial crisis. Macy's and other retailers got slammed by a warm winter and cool spring, as well as the continued migration of millennials to fast fashion and off-price stores, Kniffen said.” (CNBC)
  3. These New Apartment Buildings Are Probably out of Your League “If there’s a new apartment building going up in your neighborhood, chances are you can’t afford to live there. Much of the new rental apartment stock that hit the market last year was of the high-end, luxury variety — and that trend doesn’t appear to be slowing down, according to a new report. In 2015, 75% of large, multi-family rental developments completed were classified as high-end, according to a report from RENTCafé, a national apartment search website.” (MarketWatch)
  4. Boston Tops San Francisco as Best U.S. City for Digital Entrepreneurship “The City by the Bay ‘is becoming too cutthroat to inspire success.’ Boston is the U.S. city best placed to capitalize on the shift to a digital economy, with the tech-centered San Francisco Bay Area second as it lost ground because of worsening quality of life, a report said on Wednesday. The analysis of 25 cities’ competitiveness by the U.S. Chamber of Commerce Foundation and others said it aimed to show which are ready for the digital revolution expected to transform every industry, from robotics to healthcare.” (Fortune)
  5. Stephen Schwarzman and Blackstone: Wall Street’s Unstoppable Force “In March 2015 Stephen Schwarzman got a telephone call from JPMorgan vice chairman Jimmy Lee, one of Wall Street’s legendary power brokers. Lee, who died three months later, was helping General Electric unload $30 billion in commercial real estate assets lingering on its books. GE boss Jeffrey Immelt was uncomfortable with the massive financial services business his predecessor, Jack Welch, had slowly built up. During the 2008 meltdown, frozen credit markets put GE Capital’s $101 billion in commercial paper funding in peril, bringing the mighty industrial conglomerate to its knees.” (Forbes)
  6. Macy’s Needs More Change, Less Hope “Maybe the most worrisome thing in Wednesday's results is the dozens of store openings Macy's highlighted in its earnings press release, along with plans to grow its new, off-price Backstage brand to 200 to 300 stores. Yes, the company has been closing some stores. But not enough. And now is not the time for any massive retailer to talk about adding retail square footage. Plus, Macy's keeps saying it's looking to monetize its mall-based properties and flagship stores. But after talking about this for the better part of a year, all we've seen so far is a new top real estate executive.” (Bloomberg)
  7. Why Some Suburbs Are Trying to be More Like Cities “For more than a generation, the suburb of New Rochelle, N.Y., has been struggling with a stagnant economy, closed storefronts and tax revenue that has fallen even as New York City has boomed just 15 miles to the south. Now this bedroom community is forging ahead with a plan to remake its low-slung downtown into a landscape checkered with office towers, high-rise apartments and new retail. Over the past year and a half, it has changed its zoning and signed on a team of developers to start building some of the planned towers.” (MarketWatch)
  8. How to Raise Money in Israel: A Developer’s Guide “Boaz Gilad remembers first meeting Gal Amit and Rafael Lipa around 2008, when the U.S. economy was on its knees and Gilad’s firm, Brookland Capital, “didn’t have money to buy a cup of coffee” — much less finance the sort of ground-up projects that have since made it one of Brooklyn’s busiest condominium developers. At the time, Amit and Lipa were working with Brooklyn real estate investor Abraham Leser on an unprecedented deal: taking him to Israel, where a new entity holding some of Leser’s New York properties would issue publicly-traded bonds on the Tel Aviv Stock Exchange (TASE).” (The Real Deal)
  9. U.S. Hotel 2015 Profits Surpass 2007 Market Peak “According to STR's 25th annual HOST Almanac, U.S. hotel industry revenue topped an estimated $189 billion in 2015, adding nearly $14 billion in revenue from 2014. Total industrywide house profit reached almost $73 billion, a year-over-year increase of 9.4% on a per-available-room basis. On an absolute nominal basis, the house profit represents an all-time high, and the house profit margin for 2015 exceeds the previous industry peak reached in 2007. Revenue and GOP growth levels were strong in 2015, but lower than the levels experienced in 2014. On a nominal basis, house profit increased 11.2%, compared to 12.9% in 2014.” (World Property Journal)
  10. CIT Survey: CRE Execs Divided About Outlook for 2016 “A new study released by the CIT Group Inc., ‘2016 Commercial Real Estate Outlook,’ revealed that while many commercial real estate executives see solid prospects for their sector, not everyone is on board with a positive outlook. The study, conducted online by Forbes Insights on behalf of CIT among 201 senior commercial real estate executives, shows 52 percent of CRE execs indicated that they believe their segment of the market to be either strong or very strong, while 71 percent reported adequate capital is available for investment.” (Commercial Property Executive)
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