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10 Must Reads for the CRE Industry Today (May 30, 2019)

The Blackstone Group has soled more than $1 billion in Invitation Homes shares, reports the Wall Street Journal. Walmart is planning to build a new headquarters on a 350-acre site in its hometown of Bentonville, Ark., according to the Dallas Morning News. These are among today’s must reads from around the commercial real estate industry.

  1. Blackstone Starts Selling Out of Home Rental Empire “Blackstone Group is cashing in on its bet on the suburban rental class. The private-equity firm late Tuesday sold more than a $1 billion worth of shares of Invitation Homes Inc., the giant single-family home landlord it launched following the financial crisis in a wager that many Americans would be willing to rent the suburban lifestyle they could no longer afford to own. The share offering is Blackstone’s second since March and comes at a time when Invitation’s shares are trading at a record.” (Wall Street Journal, subscription required)
  2. Abercombie & Fitch CEO Says Smaller Stores Are the Future (as it Closes 3 of its Largest Stores) “While Abercrombie & Fitch said Wednesday it will close three more of its sprawling, flagship retail locations, it’s opening additional smaller-format stores and shrinking some of its existing shops in a bid to keep customers streaming through its doors. ‘What we’ve learned from the consumer is they are really enjoying the smaller spaces,’ CEO Fran Horowitz said in an interview. ‘There is a more intimate feel to it. ... And the customer likes that one-on-one interaction.’” (CNBC)
  3. Real Estate Broker Robert Futterman Fired from His Company After Drug Bust “New York real estate broker Robert Futterman has been fired from his own company, The Post has learned. Futterman, who last year sold his firm Robert K. Futterman & Associates to BGC Partners and Newmark and has been chairman of Newmark RKF, was terminated ‘for cause,’ on Tuesday, a BGC spokeswoman told the Post. Sources said Futterman has been behaving erratically and has been texting and emailing people at the company with bizarre messages.” (New York Post)
  4. Walmart Is Planning a New HQ That Dwarfs Even Toyota’s Sprawling Campus “While Amazon was dizzying the world with its HQ2 search, Walmart was quietly mapping out plans for its HQ2 campus in its hometown of Bentonville, Arkansas. Walmart will build its new headquarters on 350 acres it already owns and where it's operated warehouses and office buildings for years. To put it in perspective of large North Texas projects, the planned headquarters is more than three times the size of Toyota North America's new Plano headquarters in Legacy West and it's five times the size of the new Charles Schwab campus in Westlake.” (Dallas Morning News)
  5. McCormick Place Revamp Picks Up Steam in End-of-Session Springfield Sprint “A plan to expand McCormick Place by taxing restaurants and bars as far as 10 miles away from the convention center picked up considerable momentum in Springfield today, and could be in line for final legislative action by the end of the week. Under the proposal pushed by the Metropolitan Pier & Exposition Authority, which runs McCormick Place, much of the center’s outmoded lakefront building would be demolished and be replaced by a new structure that would deck over Martin Luther King Drive.” (Crain’s Chicago Business)
  6. Size Matters: Tracking the Economy Through New Home Square Footage “The U.S. housing market may not be synonymous with the business cycle, as a famous 2007 paper proclaimed, but the ups and downs in housing, which represents a big part of the economy, usually do offer hints about what’s going on more broadly. That’s why economists closely watch housing market indicators like sales volumes and home prices — as well as how Americans are accessing the market and managing their obligations to mortgages, rental costs, taxes, and so on.” (MarketWatch)
  7. Take a Look Inside McDonald’s New Times Square Flagship “On Thursday, McDonald’s will open a new flagship store in Times Square, expected to be its busiest in the U.S. The location showcases the modern updates that McDonald’s has been bringing to its U.S. stores. It boasts digital menu boards, 18 self-order kiosks and wireless mobile charging stations at tables. The high-tech upgrades are part of its strategy to drive sales by bringing customers back to its stores. The renovations are meant to improve convenience for the customer and modernize the look of the restaurants.” (CNBC)
  8. Lady Gaga, Tara Banks and the Disneyfication of Fashion “Later this winter, Modelland, the 21,000-square-foot modeling amusement park in Santa Monica dreamed up by Tyra Banks, is scheduled to open, offering retail, model role-play and other interactive fashion features, the better to allow paying visitors to live out their catwalk fantasies.” (The New York Times)
  9. Macy’s Real Estate Value Matters More Than Ever “Macy's was one of the few department store operators to report positive comps in the first quarter of fiscal 2019. Comparable-store sales rose 0.7% year over year at the No. 1 department store company last quarter, despite a slowdown in overall retail sales growth. This solid sales performance didn't save Macy's from getting caught up in a massive department store stock sell-off in May. Macy's shares have fallen more than 10% in the past month, due to renewed fears that the department store business model can't be salvaged.” (The Motley Fool)
  10. California Bill to Cap Rent Increases Advances in Legislature “A bill to protect Californians from spiking rents narrowly passed the Assembly on Wednesday, after a last-minute deal to scale back the proposal. Assemblyman David Chiu, D-San Francisco, agreed to make amendments in the Senate, where AB1482 heads next, to reflect changes requested by the California Association of Realtors. Under the deal, the measure would limit annual rent increases to 7 percentage points above the regional change in the cost of living, rather than the 5 percentage points plus inflation that Chiu originally proposed.” (San Francisco Chronicle)
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