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10 Must Reads for the CRE Industry Today (May 2, 2017)

Rental income has reached an all-time high, according to MarketWatch. Forbes looks at 10 myths about real estate investing. These are among today’s must reads from around the commercial real estate industry.

  1. Rental Income Just Hit an All-Time High. Here’s How That Drives a Wedge Between ‘Haves’ and ‘Have-Nots’ “You already know the rent is too damn high. But here’s fresh evidence that something’s amiss in the housing market: one metric of measuring housing costs has never been so high. Rental income as a share of gross domestic product hit an all-time high of 3.86% in the first quarter, according to government data out Friday. That makes sense: with lean supply and pent-up demand, it’s never been such a good time to be a landlord. But it’s a bit more complicated than that.” (MarketWatch)
  2. Treasury’s Mnuchin: Trump Tax Plan Eliminates All But Two Loopholes “President Trump's tax plan adheres to the ‘Mnuchin Principle’ of helping the middle class, the Treasury secretary says. The Trump tax plan was vague because the president wants to work with Congress on getting it done, Mnuchin says. Mnuchin argues it'll take some time, but Trump's policy agenda would lead to ‘sustained 3 percent economic growth or higher.’” (CNBC)
  3. Anbang, Chinese Company With Global Reach, Faces New Scrutiny “Wu Xiaohui, the Chinese tycoon who was in failed talks with President Trump’s son-in-law, Jared Kushner, to buy into a skyscraper project in Manhattan, is fighting allegations of financial chicanery and has threatened to sue a Chinese magazine that examined his company’s labyrinthine funding. The Anbang Insurance Group, which Mr. Wu controls as president and chief executive, said on Sunday that it would take legal action against Caixin Media and its editor in chief, Hu Shuli.” (The New York Times)
  4. 10 Myths About the Real Estate Industry Debunked “As flexible schedules and independent work become more appealing (and accepted), more and more people — including a surge of millennials — are joining the real estate business. But while there can be many perks, there are also a lot of industry misconceptions. We asked 10 members of the Forbes Real Estate Council to weigh in on one myth about the real estate industry that newbies in the profession often think is true, and what the actual truth is.” (Forbes)
  5. Japan’s Pension Fund Plows Into Real Estate Investing “Japan’s government pension fund, the world’s largest with $1.25 trillion in assets, is making its biggest push ever to expand its real-estate portfolio. The Government Pension Investment Fund in April asked asset managers around the world to submit proposals to run portions of the fund’s real-estate investment portfolio. The request was part of a broader move by the fund to expand into so-called alternative assets.” (Wall Street Journal, subscription required)
  6. Trump Today: Dodd-Frank ‘Out of Control,’ President Tells Community Bankers “President Donald Trump told community bankers the Dodd-Frank law is ‘out of control,’ said in an interview he is open to raising the federal gasoline tax under one condition and wondered aloud why the Civil War wasn’t ‘worked out.’ Keeping up a long-running line of attack, Trump ripped the Dodd-Frank law in brief remarks to the Independent Community Bankers of America. ‘It’s out of control,’ Trump said. ‘And by the way, not only for community banks — for banks, period.’” (MarketWatch)
  7. San Francisco, Expedia, Airbnb Settle Host Regulations Lawsuit “The City of San Francisco has reached a settlement with home sharing services HomeAway, which belongs to travel website Expedia, and Airbnb with regards to a lawsuit the companies brought over the city's regulations requiring registration rules for hosts. San Francisco, where Airbnb is headquartered, passed the legislation in 2015 in part to stop hosts with more than one dwelling from listing on the sites and keeping long-term housing off the market.” (The Street)
  8. Trump’s Tax Plan Could Bruise REITs “One of the investment vehicles that could be significantly impacted by these tax shakeups is the real estate investment trust, or REIT. REITs do not pay corporate tax and in exchange are required to pay out 90 percent of their returns to stockholders, mostly in the form of dividends. Because of that tax-exempt status, REITs offer yields that are higher than the average S&P 500 corporate stock. Their shareholders, however, pay ordinary income tax on those dividends, with a maximum rate of 39.6 percent under current law.” (The Real Deal)
  9. Bankrupt Gander Mountain Acquired “The largest U.S. chain dedicated to recreational vehicles and a group of liquidations have come together to thrown a lifeline of sorts to outdoor retailer Gander Mountain. Camping World Holdings was chosen as the winning bidder at a bankruptcy auction for certain assets of Gander Mountain and its Overton’s boating business. Under the terms of the deal, Camping World, which is run by Marcus Lemonis, the host of CNBC TV's reality show ‘The Profit,’ is obligated to run 17 of Gander Mountain’s 160 stores as a going concern.” (Chain Store Age)
  10. Commercial Real Estate Values Are on the Rise in Cleveland “Commercial real estate value is up across the board, both on the sales and leasing side, and in both the office and industrial sectors. In addition, land values have begun to rise as investors as well as users are more willing to put shovels in the ground and begin new rather than take on a property that has significant flaws. As the vacancy rate for the industrial market has dropped from more than 10 percent in 2008 and 2009 to 4.6 percent today, many of the more desirable buildings have come off the market.” (Smart Business)
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