10 Must Reads for the CRE Industry Today (October 12, 2017)

Jerome Powell is the most likely candidate to be the next Federal Reserve chairman, according to CNBC. California fires can cause damage to $65 billion in real estate, reports the San Francisco Gate. These are among today’s must reads from around the commercial real estate industry.

  1. December Rate Hike Might Not Be Automatic, Minutes of Last Month’s Meeting Show “The persistence of low inflation had more Federal Reserve officials wondering whether an interest rate was needed in December, according to minutes of the Federal Reserve’s last policy meeting released Wednesday. Several Fed officials said that they now believed it would be longer than they had previously thought to get inflation back to the central bank’s 2% target. As a result, many noted that “some patience” was warranted in hiking interest rates in order to assess trends in inflation, the minutes said.” (MarketWatch)
  2. Powell Odds-On Favorite for Fed Chair Amid Report Mnuchin Is Pushing for Him “Odds are gaining for Jerome Powell to be chosen as the next Federal Reserve chairman. Powell, currently a Fed governor, is now the leading contender, according to PredictIt, a website that predicts political and financial events. It puts his odds of selection at 47 percent, higher than the 28 percent odds on Kevin Warsh and 9 percent on the incumbent, Janet Yellen.” (CNBC)
  3. More Than $65 Billion in Real Estate Estimated to be at Risk in Napa and Santa Rosa Areas “More than 170,000 homes are at some level of risk from the wildfires in Napa and Santa Rosa, which would cost over $65 billion to completely reconstruct, according to CoreLogic hazard risk analysis. CoreLogic said that of that total, 6 percent (or over 11,000) are at significant risk, while the rest are at low to moderate risk, but noted that ‘wildfire can easily expand to adjacent properties and cause significant damage.’” (San Francisco Gate)
  4. Kroger Weighs Sale of Convenience Stores “Kroger Co. said it may sell its convenience stores and cut other costs, as the nation’s largest traditional grocer battles Inc. and other new competitors. The nearly 800 convenience stores, most which sell gas, will likely fetch Kroger a higher return than profits delivered to the company currently, executives told investors at an annual meeting Wednesday at the New York Stock Exchange.” (The Wall Street Journal, subscription required)
  5. Airbnb Is Teaming Up with a Local Developer to Create a Large Apartment Complex in Florida “Airbnb is introducing its first branded apartment complex in Florida, a state where strict regulations threaten its growth and restrict its supply of available rooms. The partnership with Miami-based Newgard Development Group marks the first step by Airbnb to design accommodations from the ground up for home-sharing, further challenging the traditional hotel industry. Under the brand ‘Niido Powered by Airbnb,’ the first complex in this project is a 324-unit building in Kissimmee, Florida.” (CNBC)
  6. Mandalay Bay Staffers Didn’t Call Cops After Security Guard Was Shot “Police officials said Monday that Campos was shot roughly six minutes before the 64-year-old retiree opened fire. It’s unclear how long after Paddock started shooting that security officials waited to call the police. Many have questioned the timeline of the Las Vegas massacre in the days following the tragedy — including MGM resorts International, which owns the Mandalay Bay. The second-guessing began this week after police officials revealed that they had been wrong about the times they originally reported.” (New York Post)
  7. Jared Kushner Sells Majority Stake in Real Estate Tech Firm WiredScore “Jared Kushner has sold his majority stake in WiredScore, a New York-based real estate tech firm that certifies office buildings for internet connectivity, Forbes has learned. The buyers are Silicon Valley-based Bessemer Venture Partners—an early investor in LinkedIn, Yelp, Blue Apron and Pinterest—and Fifth Wall Ventures, which invests in real estate technology out of Los Angeles. The terms of the deal were not divulged, but Kushner’s financial disclosure form from July pegged the value of his stake between $5 million and $25 million and stated that he was ‘in the divestment process.’” (Forbes)
  8. Office Landlords Discover the Consumer “The office market has seen plenty of innovation in recent decades, from the rise of real estate investment trusts to online databases like CoStar. But landlords have made little progress in one arena: using new technologies to appeal to tenants. ‘We spend a lot of time on the analysis of our assets, a lot of time on how well they are performing and I think really little time on the end user,’ Lisa Picard, who manages the Blackstone Group’s office portfolio, said at the MIPIM Proptech summit Wednesday. But now that is starting to change. (The Real Deal)
  9. Women in Real Estate Take on Wage Gap and Work-Life Balance “The real estate business may be seen as dominated by men, but it’s attracting more and more women — including nearly 100 women pursing master’s and bachelor’s degrees in real estate development at the USC Price School of Public Policy. ‘Playing a role in shaping cities is driving more and more women to the real estate profession,’ said Sonia Savoulian, USC Price associate director for Program in Real Estate, at the school’s Women in Real Estate Luncheon. ‘Women want to have a role in driving decisions for real estate development and investment.’” (USC News)
  10. Japanese Outbound Real Estate Investment Spikes 23 Percent in 2017 “Outbound real estate investment (direct investment in existing properties) by Japanese investors in H1 2017 (Jan.-Jun.) stood at $1.3 billion, up 23% y-o-y. By region, almost all investment occurred in the Americas, and by asset type, 88% of investments were in office buildings. Investment for development continues to grow. The total cost of projects announced in H1 2017 was $700 million, up 35% y-o-y. Ongoing development projects announced since 2016 have now reached approximately $1.9 billion. Of these, 95% are projects in Asia Pacific. By sector, mixed-use property accounts for 38%, followed by offices at 30%.” (World Property Journal)
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