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ten must reads Roosevelt Island

10 Must Reads for the CRE Industry Today (November 11, 2016)


  1. Houston economy recovering, but real estate has a ways to go “Rising rig counts and oil prices show Houston's economy is in recovery mode, but it could take five years to work through an oversupply of apartments and office space, according to a local economist. ‘The worst is over for Houston's energy economy,’ Patrick Jankowski, senior vice president of the Greater Houston Partnership, said at Transwestern's annual TrendLines presentation at River Oaks Country Club Wednesday evening. ‘Real estate still has a ways to go.’ Houston's health care, retail and industrial markets have remained fairly strong, but the apartment and office and office sector have been hard hit.” (Houston Chronicle)
  2. Can President Trump make Chinese real estate investors desert the US? “, a website that connects overseas buyers with international properties, says Chinese investors won’t be jumping ship in large numbers as a result of Donald Trump’s election. One day after The Donald’s November 8th election victory over Hillary Clinton, Charles Pittar, Juwai’s CEO, says there wasn’t anything out of the ordinary when it came interest in stateside property from potential Chinese buyers.Our web traffic is normal and our inquiries are at normal levels,’ he explains in an email statement. ‘Most Chinese think of Trump as just another president,’ Pittar continues. Juwai, which has a full Mandarin version of its website that lets residents in China view and inquire about international properties, is arguably an indicator of global Chinese real estate investment sentiment.” (Buzz Buzz Home)
  3. How Trump's Presidency Could Impact Real Estate “How will the real estate market be impacted by Donald Trump’s victory and Republicans controlling both chambers of Congress? Though Mr. Trump is a real estate man, his policy platform has been largely vague on real estate proposals.  Here are my thoughts on how certain real estate issues may play out under President Trump and of their potential impact to consumers.” (Forbes)
  4. Clicks to Bricks: Online Retailers Find the Lure of a Store “Companies of all sizes that once sold primarily through multibrand retailers are building on their experience running online stores by opening direct-to-consumer brick-and-mortar locations. Established retailers are shifting their focus from basic transactions to offering compelling brand experiences and higher levels of personal service. Design stores that once catered to professionals are welcoming independent consumers, as Houzz, Pinterest and Instagram give rise to a legion of do-it-yourself decorators. And even companies that started as online-only enterprises are increasingly opening physical stores. To understand why, just follow the money. Online sales in the United States will reach about $394 billion this year, according to estimates by the research and advisory firm Forrester Research, a number representing less than 12 percent of total retail sales, which the firm expects will total $3.4 trillion. But web-influenced sales in physical stores (when a consumer researches a product on a smartphone, for instance, and then buys in a store) are expected to account for an additional $1.3 trillion, or about 38 percent of all retail sales.” (The New York Times)
  5. Here's How to Use Commercial Real Estate in Goal-Based Investing “The markets have see-sawing hundreds of points over the past few days as Americans voted and the aftermath became clear. Stock markets have historically been susceptible to significant events, and the Donald Trump upset win of the presidential election certainly qualifies as that. What is an investor to do? Bonds aren't the answer. Increasingly, they move in the same direction as stocks during market ups and downs. That makes them less attractive than in the past as a hedge on market risk. A byproduct of this trend: Investors are taking a closer look at private-equity real estate and other alternative investments. Shielded from daily market swings, these assets strengthen portfolios with their high returns and low volatility.” (The Street)
  6. Economy Watch: The Nation’s Top Cost-Burdened Rental Markets “Another post-election moment: S&P Global affirmed on Thursday the credit rating of the United States as AA+ with a stable outlook. 'We assume the longstanding institutional strengths and robust checks and balances of the U.S. will support policy execution in a Trump administration, despite the president-elect’s lack of experience in public office,' the ratings agency said. Moody’s likewise had said (in September) the election wouldn’t impact its AAA rating for the country, regardless of how it went. Something the election isn’t going to affect, at least in the short term, is apartment rents (and indirectly, the outsized demand for affordable housing). Recently ABODO released a report about the top 'housing-cost-burdened' markets in the nation. That is, markets in which a majority of households spend more than 30 percent of their income on rent. Of the 100 MSAs with the most renters, 19 have the highest proportions of renters facing a cost burden—all cities with at least 54 percent of their renters spending more than 30 percent of their income on rent.” (Commercial Property Executive)
  7. Cornell Tech unveils new design for hotel, conference center “Cornell Tech revealed renderings for a hotel and conference center at the 12-acre technology campus under construction on Roosevelt Island. University officials and the architecture team presented the renderings and designs for the 195-room hotel and executive education center to Community Board 8 on Wednesday night, DNAinfo reported. The school needs approval from the Public Design Commission before it can move ahead with the buildings, as it is leasing the land from the city. The hotel will feature a restaurant, a rooftop lounge and a cafe. The adjacent conference center will have a hall for around 300 people and four 50 to 75-seat classrooms, according to the news website. It will also feature a small conference room and a buffet lounge for 150 people. The buildings will serve as the entrance to the campus. Stretching roughly half a mile, Cornell Tech’s campus is slated to house a total of 10 buildings – including academic buildings, two residences, the hotel, a central utility plant and mixed-use buildings featuring co-working spaces and studios.” (The Real Deal)
  8. Count on Disruptive Innovation in Commercial Real Estate “We live in a time of disruptive innovation. Tech giants such as Amazon, Netflix, Apple and Google have redefined such seemingly well-entrenched fields as retail, entertainment, personal computing and advertising—and newcomers such as Airbnb and Uber have already transformed their industries. So far, the impact on commercial real estate of these disruptive innovators has varied from sector to sector. For instance, Netflix’s success drove Blockbuster into bankruptcy, which in turn flooded the real estate market with millions of square feet of retail space. In other cases, the effect has not been as dramatic.” (Commercial Property Executive)
  9. Stock markets are predicting disaster in London property prices post-Brexit “An Irish property tycoon says London's property market is "tanking by the day" in the wake of Brexit, with financial markets forecasting the second biggest ever collapse in the value of office and retail space in the capital. Scott Crowe, Chief Investment Strategist at CenterSquare, told Business Insider that financial markets are pricing in a 15% collapse in the value of commercial real estate in London as a result of the Brexit vote. Bloomberg reports on Friday that Stephen Vernon, chairman of Green Property, said at a conference that London property values are collapsing, creating a potentially ‘fantastic’ buying opportunity.” (Business Insider)
  10. Neighboring condo association files appeal against Miami Worldcenter’s redesign “Miami Worldcenter is already starting to come out of the ground, but that didn’t stop a neighboring condo association from appealing the project’s high street retail plans. The appeal challenges an October approval from Miami’s Planning & Zoning board that gave the green light for developers Nitin Motwani, Dan Kodsi and Art Falcone to move forward with their vast redesign of Miami Worldcenter’s retail component. Michael Gongora, an attorney representing 900 Biscayne, told The Real Deal that the condo association wasn’t against Worldcenter’s original enclosed mall design — but wants to better understand how the 63-story tower will be affected by the shopping center’s new open-air design. ‘The project is under construction and clearly will get built,’ he said. ‘Sometimes the only chance an abutting property has to learn about a project is to file an appeal and come to the table.’ In January, the developers announced they were paring back Worldcenter’s retail component from 750,000 square feet to 450,000 square feet, as well as adopting a layout akin to Miami Beach’s Lincoln Road.” (The Real Deal Miami)
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