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10 Must Reads for the CRE Industry Today (October 11, 2018)

At a meeting with Sears on Wednesday, the company’s lenders were pushing for liquidation, the Wall Street Journal reports. Forbes looks at how to find good real estate investment opportunities in a seller’s market. These are among today’s must reads from around the commercial real estate industry.

  1. Big Lenders Make Push to Liquidate Sears “Sears Holdings Corp. met with its lenders Wednesday night to discuss emergency financing for the embattled retailer, according to people familiar with the matter. The meeting ended without an agreement that would keep Sears operating as a going concern, according to one of the people. A group of lenders, including Bank of America Corp., Wells Fargo & Co. and Citigroup Inc., are pushing for the company to liquidate its assets under a chapter 7 bankruptcy filing, as opposed to reorganizing the business under chapter 11, this person said.” (Wall Street Journal, subscription required)
  2. At Real Estate Conference, There’s Talk of a Coming Slowdown “Economists attending a major real estate conference this week in Boston generally agree on two things: The boom times for building in the United States are due for a slowdown, but it probably won’t be a crash. That’s the forecast from the Urban Land Institute, a real estate trade group that surveyed dozens of its members — developers and investors who drive the US real estate economy — and found predictions that economic growth, job growth, and real estate price increases would slow over the next few years.” (Boston Globe)
  3. Hurricane Michael: Real Estate Experts Anticipate Billions in Storm Damage “CoreLogic predicts homes with a reconstruction value of $13.4 billion are at risk of storm surge damage. According to a pre-landfall analysis by Realtor.com, hurricane warnings have been issued across an area containing roughly 758,000 households, impacting a region with approximately $160 billion worth of residential property. ‘Although the number of homes and people in path of Hurricane Michael are less than Hurricane Florence, this major hurricane will have a tremendous impact on the Gulf Coast/Florida panhandle housing market,’ according to Danielle Hale, chief economist for Realtor.com.” (Curbed)
  4. Two Ways to Find Real Estate Investments in Very Competitive Seller’s Market “Real estate investing is one of the greatest wealth-building strategies of our time. However, it can get a little frustrating when it's hard to find good deals in your market. Real estate markets have gotten very hot (i.e., competitive) in many areas. The media is just starting to catch up to how hot these markets are, and market forces have driven up prices while depleting the inventory for solid investment deals.” (Forbes)
  5. Real Estate Loans Make Comeback in CLO Surge “Wall Street is cooking up a new type of mortgage-backed security for bond investors: the commercial real estate collateralized loan obligation, or CRE CLO. The financial product is part of a broad surge in CLO issuance as institutional investors clamor for more of the floating rate securities, which outperform most bonds when interest rates rise. Global CLO issuance is expected to hit a record of at least $165 billion in 2018, a 27% increase from the previous year, according to data from Creditflux.” (Wall Street Journal, subscription required)
  6. Best U.S. Property Market in 2019? All Bets are on Dallas-Fort Worth “Dallas-Fort Worth tops the list of U.S. cities that real estate industry execs say will be the best for their business in 2019. For the second time in the last four years, D-FW has been rated the highest for property investment and construction in a closely watched real estate beauty contest. The annual Emerging Trends in Real Estate report polled industry professionals on property market prospects for 79 U.S. cities.” (Dallas Morning News)
  7. CVS-Aetna Merger Deal Is Given Go-Ahead by U.S. Antitrust Regulators “CVS has said the deal will enable a variety of new medical services to be brought into its stores, part of its shift from corner pharmacy chain to a hub for health care with thousands of locations around the country. It could also help steer Aetna customers into stores to shop. Aetna shares were up 1.1 percent to $206.04 at 10:46 a.m. in New York. CVS gained 0.9 percent to $80.19.” (Fortune)
  8. Large Fire Breaks Out Near Oakland’s BART Coliseum Station “A large fire broke out Wednesday morning in a single-story industrial warehouse in Oakland that housed a painting company and was slated to become an apartment complex near BART’s Coliseum station. The two-alarm blaze, which broke out at 6:31 a.m., shot flames high into the early morning darkness and could be seen from the nearby BART tracks and Interstate 880.” (San Francisco Chronicle)
  9. Deloitte’s 2019 CRE Outlook Puts Tech at the Forefront “Deloitte’s 2019 Commercial Real Estate Outlook has a subtitle: ‘Agility is the key to winning in the digital age’ and the report—which includes and analyzes responses from 500 investors across the globe—looks at various ways technology is driving investors’ decisions now and in the future. ‘The data clearly indicates those real estate companies [that] are building agility into their strategies and daily operations will receive higher allocations of investment capital,’ Jim Berry, Deloitte’s U.S. Real Estate leader, told Commercial Property Executive.” (Commercial Property Executive)
  10. University of Texas: Eco-Conscious Campus and Major Fracking Landlord “The dusty oilfields of west Texas can feel a world away from the bustling heart of Austin, the state’s eco-conscious capital. A common thread is the University of Texas: one of America’s biggest academic institutions and one of its largest landowners. University land managers control 2.1m acres in Texas, much of it leased to oil and gas companies who have installed 9,000 wells on its property.” (The Guardian)
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