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10 Must Reads for the CRE Industry Today (November 15, 2016)

10 Must Reads for the CRE Industry Today (November 15, 2016)


  1. Panic in Housing Market as Trump Effect Pushes Mortgage Rates to 4% “More selling in U.S. bond markets Monday pushed mortgage rates to a psychological breaking point. The average contract rate on the popular 30-year fixed mortgage hit 4 percent, according to Mortgage News Daily, a level most didn't expect to see until the middle of next year. Rates have now moved nearly a half a percentage point higher since Donald Trump was elected president. Mortgage rates follow loosely the yield on the 10-year Treasury bond.” (CNBC)
  2. 5 Real Estate Trends to Watch in 2017 “A surprising twist towards the end of 2016 with the election of real estate magnate Donald Trump as president is likely to presage some dramatic changes in 2017 for the housing industry, which saw healthy increases this year, thanks to low interest rates, millennials getting off the fence and entering the buying market, and lower gas prices and higher wage growth. Still, as demonstrated by this month’s presidential election, anything can happen. Here are five things to watch for in real estate in 2017 so you don’t get blindsided.” (MarketWatch)
  3. Airbnb Surrenders to San Francisco Officials in Fight Over Illegal Home Rentals “Airbnb has agreed to end a fight against its hometown and cooperate with the city’s effort to crack down on illegal hosts. The home-sharing company says it will work with San Francisco’s government to create a registration system to share information with officials about its local hosts including names, addresses, and length of stays by guests, Airbnb’s global head of policy and public affairs Chris Lehane said in an op-ed in Sunday’s San Francisco Chronicle.” (Fortune)
  4. Ex-Stuy Town Manager to Serve as Consultant on Blackstone’s Kip Bay Court “Andrew MacArthur, a former executive at CWCapital Asset Management who led the $5.3 billion sale of Stuyvesant Town-Peter Cooper Village last year, has been hired by Blackstone Group as a consultant on the management of another large multi-family complex, sources told The Real Deal. MacArthur left CWCapital this summer to form his own company, a building operator and investment firm known as Brooksville Company, sources said. Sources familiar with the company said its focus is on creating a business plan for owners of New York City rental properties — and then operating the buildings.” (The Real Deal)
  5. Hines REIT Wraps Up $1.2B Office Sale to Blackstone “Hines REIT takes a big step forward in its dissolution and liquidation plan with the closing of the sale of a 3 million-square-foot office portfolio to an affiliate of Blackstone, just months after announcing the deal. The group of seven West Coast properties fetched nearly $1.2 billion. In a prepared statement, Sherri Schugart, president & CEO of Hines REIT, said the sale ‘was a significant and positive transaction and a result of our focus on maximizing the assets’ appeal to the institutional market.’” (Commercial Property Executive)
  6. This REIT Stands to Benefit From Impending Rise in Interest Rates “Some investors appear to be concerned that rising interest rates could hurt real estate investment trusts, but this shouldn't make you turn your back on this great asset class. Investors concerned about the impact of interest rates on REITs posit that even a slight jump in interest rates will heighten borrowing costs, which will then eat into REITs' bottom lines and impede their ability to pursue acquisitions. We remain convinced, however, that the strength of the housing sector is prominent enough to offset the potential complications that could arise from an increase in interest rates.” (The Street)
  7. Friends of Ours: President Trump and the Danger of Cronyism “When Donald Trump began to seriously reckon with taking on the Hillary Clinton fundraising machine in June, he took some of his closest real estate buddies to lunch. Richard LeFrak, Steven Roth, Howard Lorber, Michael Fascitelli and Steve Witkoff were reportedly among the guests, according to Bloomberg. The matter at hand: how to raise enough funds for what would promised to be an uphill battle against Clinton. He later named LeFrak, Roth and Lorber to his economic advisory committee, and his son-in-law Jared Kushner, the CEO of development and investment firm Kushner Companies, became a key advisor.” (The Real Deal)
  8. 3 Signs Welltower’s Best Days Are Ahead “In the week since Donald Trump won the presidential election, the stock market has soared. However, real estate investment trusts, or REITs, have been an exception. One of my favorite REITs, Welltower (NYSE:HCN), has continued its recent decline and is now down nearly 20% over the past three months. Here's why long-term investors shouldn't be worried. In a nutshell, REITs get crushed when interest rates rise rapidly, which is exactly what happened after the election (the spike in the orange line in the chart below). And as you can see, the real estate sector and interest rates tend to move in opposite directions.” (The Motley Fool)
  9. Fundrise Spins Off its Real Estate Investment Branch RSE Capital Partners “Crowdfunding real estate platform Fundrise is spinning off  RSE Capital Partners, its real estate investment branch, into a stand-alone company, according to several news sources. The new standalone firm will continuation to focus on origination, underwriting, investment and management for the company’s eREIT platform. RSE currently collaborates with top brokers and real estate firms nationwide, focusing on institutional-level assets, primarily multifamily acquisitions, multifamily development and infill bridge lending valued in the $20 million and $100 million range with the aim for growth.” (Crowdfund Insider)
  10. A Newly Vibrant Washington Fears That Trump Will Drain Its Culture “What the effect on Washington will be when Donald J. Trump moves into the White House is hard to predict. But many Washingtonians fear the worst. Among them is Vincent Gray, the city’s mayor during much of the Obama administration. ‘I’m worried about people not wanting to come here because of the image they have of the Trump administration,’ Mr. Gray said. Now a member of the City Council, Mr. Gray said the engagement of Mr. Obama and his family with the city has been ‘tremendously uplifting.’” (The New York Times)
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