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

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


  1. These Government-Approved, High-Interest Green Loans Are Turning Mortgage Lending Upside Down “When Lucia Chavez saw her mortgage bill, she thought there had to be a mistake. For years, the 70-year-old Vista, California homeowner had paid about $990 every month. But in early 2015, after solar panels were installed on her roof, Chavez, a retiree, discovered a total of $1,500, a sum she couldn’t afford, had been paid from her bank account. Chavez said the company that pitched her on the panels, Fidelity Home Energy, did not explain how expensive they would be.” (MarketWatch)
  2. Amazon’s Next Push Into Bricks-and-Mortar Shops Appears to Target Convenience Stores “Amazon isn't going to sit idly by as Wal-Mart zeroes in on the online grocery business. Instead, as the world's largest retailer pushes forward in the category — which makes up roughly half of its sales — Amazon is reportedly eyeing a bigger piece of the action. People familiar with the strategy told the newspaper that shoppers could use their smartphones or screens scattered around the shops to place their orders.” (CNBC)
  3. Lower Manhattan Landlords Missing Out on $175 Million in Retail Opportunities “Lower Manhattan is full of young New Yorkers looking to part with substantial amounts of disposable income, a report released Monday by the Downtown Alliance concludes, findings the development-advocacy group hopes will spur neighborhood landlords to allocate more space for restaurants, bars and entertainment. Sixty percent of apartments in the Financial District, Battery Park City and South Street Seaport are occupied by single tenants, nonrelated roommates or unmarried couples who don’t have to spend cash on child care. That’s one of the highest rates in the city.” (Crain’s New York Business)
  4. Costco Enters Retail’s “War on Amazon” “Like most, Costco offers customers bricks-and-mortar as well as online shopping experiences. Similarly, like most, Costco strives to set itself apart from the competition. From a shopper’s point of view, I think Costco does a pretty good job presenting a self-contained shopping extravaganza, but more importantly, I’m not alone. Costco’s loyal customers and foot traffic are proof that free samples and cases of two dozen paper goods are still en vogue with consumers.” (Forbes)
  5. Mega-Property Sale Includes 9 Buffalo-Area Shopping Plazas “DLC Management Corp. has added to its vast real estate holdings by acquring 16 shopping centers from DDR Corp. All but one of the plazas is located in New York state — 9 are in the Buffalo area, one is in Olean, five more in Upstate New York. The other property is in Birmingham, Alabama. Working in a joint venture with fellow real estate investment group, DRA Advisors LLC, DLC’s deal adds 4.85 million square feet to its portfolio — 26 percent increase for the Tarrytown-based company. DLC Management now has 21.7 million square feet in its holdings.” (Buffalo Business First)
  6. Airbnb’s Plan to Woo Landlords Isn’t Going Very Well “Airbnb’s attempt to bring landlords into the fold by offering them a cut of revenue is off to a rocky start. In an effort to get landlords to allow their tenants to rent units on Airbnb, the rental giant launched a program last month which offers landlords a cut of revenue between 5 and 15 percent from Airbnb guests in their buildings. But a month in, the returns aren’t promising. Landlords are concerned about getting entangled in legal and regulatory issues, as well as dealing with the risk of unknown guests.” (The Real Deal)
  7. Sears, Macy’s and J.C. Penney Are Fueling a $48 Billion Crisis in the Retail Industry “There's no end in sight to American's shopping mall crisis, according to a Morningstar research report. Hundreds of shopping malls have shut down over the last several years amid a pullback in consumer spending on apparel and accessories and the growth of ecommerce. But the US is still oversaturated with shopping malls, and that's putting $48 billion in loans backed by mall properties at risk, according to the Morningstar analysts.” (Business Insider)
  8. Suburban Mixed-Use Office Markets in U.S. Outperform Downtown Peers “According to CBRE Group, Inc., vacant space in the U.S. office market held steady during the third quarter of 2016 at 13.1 percent. The national office vacancy rate remained at the lowest level since 2008, with a 30 basis points (bps) decline over the past year. The office market is being helped by steady demand for space and limited new construction. ‘Firms are adding space, but at a more modest pace than in recent years, reflecting slower overall job creation,’ said Jeffrey Havsy, Americas' chief economist for CBRE.” (World Property Journal)
  9. That Swanky New Rental Apartment Could Finally Be Yours “For the last four years the skies of major U.S. metropolitan housing markets have been littered with cranes. As the homeownership rate fell following the recession, the towers rose — the vast majority boasting luxury rentals, complimented by high-end amenities like rooftop dog parks, fitness centers, private movie theaters and party rooms. Now all that construction has largely come on line, and sky-high rent growth is officially shrinking.” (CNBC)
  10. NorthStar Completes $370M in Portfolio Transactions “NorthStar Real Estate Income II Inc. has invested $370 million in two significant portfolio transactions—a portfolio of 39 industrial real estate properties and a portfolio of 41 institutional-quality private equity real estate funds. Through subsidiaries of its operating partnership, NorthStar Income II originated an approximately $98 million subordinate interest investment in a portfolio of 39 industrial real estate properties, which are currently 100 percent leased with an average remaining lease term of nearly 11 years.” (Commercial Property Executive)
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