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10 Must Reads for the CRE Industry Today (September 19, 2019)

The New York Times looks at why the Federal Reserve decided to cut rates again. Airbnb plans an IPO in 2020, reports Reuters. These are among today’s must reads from around the commercial real estate industry.

  1. Why the Fed Lowered Interest Rates Again “The Federal Reserve on Wednesday lowered interest rates for the second time this year, as it tries to guard the United States economy against trade-related uncertainty and slowing global growth. The central bank cut borrowing rates in late July for the first time since the financial crisis. The moves are part of an effort to keep borrowing cheap, credit widely available and businesses and consumers confident.” (The New York Times)
  2. The 10 Trends That Will Shape Real Estate in 2020 “Underscoring the broad feelings of uncertainty—and in some cases, surprise that the economy is still performing well—there’s a worldwide search for safe investments that in many cases is coming up short. One investor told Emerging Trends researchers that there’s ‘a continued shortage of deals with desirable yields; there are more investors chasing deals than there are good deals available.’” (Curbed)
  3. Airbnb Plans Public Listing in 2020 “Home rentals giant Airbnb said it plans to list on stock exchanges in 2020, making it one of the most high-profile market debuts next year. In a short statement posted on its website on Thursday, Airbnb, which is widely expected to list through a direct listing, did not give any details about how it plans to list its shares. On Wednesday, Airbnb said that it took in more than $1 billion in revenue for the second quarter of 2019. Reuters had reported in June that Airbnb was considering a direct listing.” (Reuters)
  4. SF’s Treasure Island, Poised for Building Boom, Escaped Listing as Superfund Site “San Francisco’s Treasure Island, the former naval base being transformed into a $6 billion development of condos and shops, was once considered hazardous enough to be a federal Superfund waste site but was never officially named one, newly disclosed documents show. While it’s not clear why Treasure Island was never named a Superfund site, a designation given to some of the most polluted places in the country, the release of the records prompted calls Wednesday from some environmentalists for more federal examination.” (San Francisco Chronicle)
  5. A New Hollister Store Is Coming to Herald Square in New York as the Retailer Thinks Smaller “A new Hollister store is coming later this month to New York, right down the block from Macy’s, Target and Victoria’s Secret in the bustling Herald Square shopping district. The opening highlights Hollister parent company Abercrombie & Fitch’s broader real estate strategy: Think small, not big, in a bid to boost profitability. Abercrombie earlier this year announced it would be shutting its flagship Hollister location in the SoHo neighborhood in New York, along with a few other global flagship locations, which can span more than 40,000 square feet.” (CNBC)
  6. Loop Office Building Goes Up for Sale “Downtown office building sales have been few and far between this year, but an East Coast real estate investor is joining the bandwagon of landlords looking to cash out. A sale at that price, or around $255 per square foot, would be about $10 million more than the Melohn venture paid for the Central Loop tower in 2013, according to Cook County public records.” (Crain’s Chicago Business)
  7. Toys ‘R’ Us Partners with Candytopia to Woo Shoppers with New Experiences “Tru Kids, the new owner of the Toys R Us brand, is partnering with Candytopia, the company known for its interactive candy exhibits, as part of its efforts to revive and evolve the toy store. Through its partnership with Candytopia, the companies will create Toys R Us Adventure, ‘an immersive wonderland that celebrates the whimsical, silly and fun of toys.’ Toys R Us Adventure will have more than a dozen interactive play rooms that include installations featuring the Toys R Us mascot, Geoffrey the Giraffe.” (CNBC)
  8. Life Insurance Companies May Hold Up to $120 Billion in Multifamily Loans by 2024 “According to a new study released today by the Mortgage Bankers Association, life insurance companies have an appetite to increase their multifamily lending volumes by approximately $10 billion in 2020, compared to 2018 volumes. In terms of portfolio holdings, surveyed life companies indicated that they have a desire to hold between $50 billion and $120 billion more in loans backed by multifamily properties on their balance sheets over the next five years.” (World Property Journal)
  9. How New Model Cities Are Attracting CRE Investment “Global cities that adapt to new economic models focusing on quality of life, innovation, sustainability, governance and resilience are becoming new sources of real estate demand and attracting higher cross-border investment, according to a new report from JLL and The Business of Cities, a London-based intelligence and strategy firm.” (Commercial Property Executive)
  10. 3 Real Estate Funds to Grab Today “For investors looking to park their money in the real estate sector, mutual funds are the cheapest and most convenient options. This category of funds also offers solid protection against inflation. The real estate sector has recently seen tough times but the presence of this investment vehicle generally adds stability to a portfolio. This is because volatility in property prices is far less compared to the extent experienced by stocks. Adding such funds to a widely diversified portfolio would increase returns while significantly reducing the associated risk.” (Yahoo! Finance)
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