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10 Must Reads for the CRE Industry Today (October 8, 2018)

MarketWatch looks at how baby boomers will impact the seniors housing sector. Giant Foods has unveiled a mini-grocery store concept for urban markets, according to Retail Wire. These are among today’s must reads from around the commercial real estate industry.

  1. Starbucks Hires Finance Chief from Hyatt “Starbucks Corp. has named Patrick Grismer its next chief financial officer, luring him away from the same position at Hyatt Hotels Corp. Mr. Grismer will take over as CFO at Seattle-based Starbucks on Nov. 30, when the company’s current finance chief, Scott Maw, retires. Mr. Grismer was appointed to the CFO position at Hyatt in March 2016, and has also worked for Yum! Brands Inc. and Walt Disney Co., according to a statement Monday from Starbucks.” (Wall Street Journal, subscription required)
  2. As Storms Keep Coming, FEMA Spends Billions in ‘Cycle’ of Damage and Repair “In the exact spot where Hurricane Katrina demolished the Plaquemines Parish Detention Center, a new $105 million jail now hovers 19 feet above the marsh, perched atop towering concrete pillars. Described by a state official as the ‘Taj Mahal’ of Louisiana corrections, it has so much space that one of every 27 parish residents could bunk there. But on an average day in the first half of this year, more than 40 percent of its 872 beds went unoccupied, making it one of the emptiest jails in the state, records show.” (The New York Times)
  3. This Is How the Boomer Generation Will Influence Retirement Homes “For a glimpse into the future of retirement communities and — pardon the odious term — ‘senior housing,’ you couldn’t do much better than to ask Robert Kramer. He and several partners got together in 1991 to launch what has become the leading trade group for this industry, the National Investment Center for Seniors Housing and Care (NIC), based in Annapolis, Md. And he has been a revered authority on this subject ever since. Kramer, who first got involved in this field in the early 1980s, turned over the CEO post at NIC to a younger colleague last July.” (MarketWatch)
  4. Are Airbnb Type Rentals a Boon or a Threat to Tenants Under Rent Control? “For years, Los Angeles leaders have wrestled with how to regulate the renting out of homes for short stays, a practice popularized through websites like Airbnb. Until recently, there was little debate at City Hall about banning the practice in hundreds of thousands of rent-controlled apartments. The goal, city staffers said, was ‘to protect this critically important housing stock from possible abuse.’ Community activists agreed, saying a ban would prevent landlords from pushing out tenants to rent to a revolving door of travelers and turning their apartment buildings into ‘illegal hotels.’” (Los Angeles Times)
  5. The U.S. China Trade Battle Spawns a New Era of Tariff Dodges “One day in June, seven months after the U.S. imposed stiff tariffs on plywood from China, a wood importer in Oregon got a call from a supplier asking if he would like to get some Chinese plywood tariff-free. How would that work, asked importer David Visse. The products carry an identification code that is checked by U.S. Customs agents. ‘Don’t worry about it,’ Mr. Visse says the supplier told him. The plywood would be stripped of its Chinese markings, and ‘we’ll ship it under some other code.’” (Wall Street Journal, subscription required)
  6. How to Invest in Real Estate: Buying vs. Not Buying Property “Investments are inherently risky - real estate in particular. The subprime mortgage crisis was barely a decade ago and it played a large role in a devastating recession. Is real estate a good investment today? As with any potential investment, doing thorough research and examining all your options is crucial. One of the causes of the subprime mortgage crisis was predatory loan companies taking advantage of vulnerable homebuyers.” (The Street)
  7. Real Estate Developers: Look to Theme Parks “Mixed-use projects, which blend commercial, residential, retail and more, have become increasingly popular across the United States as real estate developers have come to realize they are not just selling properties but also promoting their communities. Yet, many CRE developers end up running into the same challenge of differentiating themselves from competitors, making it difficult to procure tenants at the desired leasing price.” (Commercial Observer)
  8. Inside JLL’s Investment Sales Shakeup “It’s been a busy year for the personnel departments at New York’s commercial real estate brokerages. But of all the changes at such a tumultuous time in the city’s investment sales arena, Bob Knakal joining JLL may be the biggest reshuffling of the deck in 2018. The veteran broker, widely seen as one of the industry’s top players, is starting the next chapter of his career after he was unceremoniously fired from Cushman & Wakefield this summer. And JLL, the world’s second largest commercial brokerage, has been eager to regain traction since it lost its team of top investment sales producers in late 2016.” (The Real Deal)
  9. Giant Food Expects Big Things from New Mini-Grocery Store Concept “Giant Food Stores announced plans to introduce a mini-grocery concept for urban markets — Giant Heirloom Market. The first location in downtown Philadelphia will measure only 9,500-square-feet, less than a quarter of Giant’s average store size of 45,000. In a statement, Giant said the concept is the result of over a year of neighborhood listening sessions and market research, with lessons borrowed from Amsterdam, ‘known for its innovative, small grocery stores.’” (Retail Wire)
  10. Netflix Signs Full-Building Lease at Hollywood Office Development “Hudson Pacific Properties Inc. leases up EPIC, its latest Los Angeles office development, in one fell swoop. The REIT recently inked a deal with Netflix for the streaming service giant to occupy all 327,900 square feet of office space at the state-of-the-art tower. EPIC will rise 13 stories at 5901 Sunset Blvd., smack in the middle of Hollywood. Described by HPP as ‘a new model of Class A, creative high-rise office space,’ the Gensler-designed building will provide a few amenities not often seen at office properties, including the capacity to accommodate such next-generation offerings as autonomous vehicle drop-off and drone deliveries.” (Commercial Property Executive)
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