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10 Must Reads for the CRE Industry Today (May 7, 2018)

Goldman Sachs researchers claim there’s virtually no chance of a recession this year, reports The Street. The Washington Post’s looks at The Trump Organization’s debt strategy through the years. These are among today’s must reads from around the commercial real estate industry.

  1. Managing Your Property Manager “Excellent property management delivers the highest profits and superior care for your property. This is a clear and simple truth. But as an owner, how can you really know when you’re getting great management? Is there any way to confirm that your manager is delivering maximum profits and taking the best possible care of your building? How can you know that they’re watching your expenses as if they were their own or that rents are as high as possible? Are smart steps being taken to minimize liability? You can see how the simple truth we started with quickly becomes a lot less simple to nail down.’ (Forbes)
  2. There’s Virtually No Chance of a U.S. Recession This Year: Goldman Sachs “‘The US Economic team's recession probability model assigns a 5% likelihood of a recession during the next four quarters, 19% during the next eight quarters, and 34% during the next 12 quarter," says Goldman Sachs strategist David Kostin. "An economic contraction in the near term seems remote. The consumer accounts for 69% of US GDP and confidence stands near its 20-year high. Business spending is also robust. S&P 500 capex is tracking at +24% in 1Q year/year. We forecast 2018 capex growth of 10% to $690 billion (27% of cash spending).’” (The Street)
  3. Americans Haven’t Been This Optimistic About House Prices Since Just Before the Crash “House prices are soaring and, despite warnings from some analysts, most Americans believe they will continue to soar. A majority of U.S. adults (64%) continue to believe home prices in their local area will increase over the next year, a survey released Monday by polling firm Gallup concluded. That’s up nine percentage points over the past two years and is the highest percentage since before the housing market crash and Great Recession in the mid-2000s.” (MarketWatch)
  4. Which One of Dallas’ Downtown Skyscrapers Is Up for Grabs? “One of downtown Dallas' most recognizable skyscrapers is up for sale. It's hard to miss the 37-story Whitacre Tower with its huge blue AT&T emblems and new nightly light shows. The Akard Street high-rise since 2008 has been owned by a unit of New York investor Carl Icahn's property firm. The almost 1 million square foot tower is the largest building in AT&T's 4-building downtown headquarters campus. Icahn Enterprises has hired commercial property firm CBRE to market the office high-rise to potential buyers.” (Dallas Morning News)
  5. HQ2 Cities Listen Up: Amazon Flexing its Political Muscle Sends a Message Not Just to Seattle “Surrounded by jungle plants under a glass-domed ceiling four stories high, Washington and Seattle political leaders got up on a rainy January day to toast Amazon’s success and their hopes for a long-lasting partnership. The occasion was the opening of the Amazon Spheres, the centerpiece of a $4 billion corporate campus now home to more than 45,000 workers. The spheres, declared King County Executive Dow Constantine, were ‘a permanent expression of this company’s commitment to Seattle.’” (The Seattle Times)
  6. As the ‘King of Debt,’ Trump Borrowed to Build His Empire. Then He Began Spending Hundreds of Million in Cash “In the nine years before he ran for president, Donald Trump’s company spent more than $400 million in cash on new properties — including 14 transactions paid for in full, without borrowing from banks — during a buying binge that defied real estate industry practices and Trump’s own history as the self-described ‘King of Debt.’ Trump’s vast outlay of cash, tracked through public records and totaled publicly here for the first time, provides a new window into the president’s private company, which discloses few details about its finances.” (Washington Post)
  7. Retail Investment Market Stays Balanced “The struggles of retailers to meet the challenge presented by e-commerce is probably one of the most studied aspects of commercial real estate today. But those struggles don’t mean investors have no options. ‘Retail is not totally getting killed,’ Chad M. Firsel, president of Quantum Real Estate Advisors, Inc., tells GlobeSt.com. In fact, ‘the smaller, $1 million to $3 million strips with service-oriented tenants are seeing a ton of activity.’” (Globest.com)
  8. California Military Department’s $135 HQ Breaks Ground “A ceremonial groundbreaking was held for the California Military Department’s new $135 million Consolidated Headquarters Complex (CHQC) in Rancho Cordova, near Sacramento, Calif. The 285,000-square-foot, multi-building campus will be home to all four of the CMD’s “four pillars”: the California Army National Guard, California Air National Guard, California State Military Reserve and California Youth and Community Programs.” (Commercial Property Executive)
  9. Commercial Real Estate Brokers Optimistic About Phoenix Area “A recent survey of commercial real estate brokers found optimism for growth in the Phoenix metropolitan area. While some uncertainty and a cautious attitude among respondents remained, the survey found that the type of real estate growth seen over the last few months has the ‘commercial brokerage community feeling positive.’ The Center for Real Estate Theory and Practice at the W. P. Carey School of Business conducted the survey. About 200 commercial real estate brokers responded.” (KTAR News)
  10. First Rule of Investment: Don’t Fall in Love with an Asset “International investment strategies are shifting around the concept of what makes a city an attractive global investment market. While emerging companies might be reluctant when it comes to expanding their portfolios outside the border, due to various political or economic events, experienced professionals in the business see no reason for hesitation. Jeff Holzmann, managing director of iintoo, highlighted what a real estate investor’s checklist should contain before going international.” (Commercial Property Executive)
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