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10 Must Reads for the CRE Industry Today (September 26, 2017)

Los Angeles might pass new regulations that will impact where marijuana manufacturers and sellers can operate, reports Los Angeles Times. A pair of start-ups is having a public feud about the best way to invest in real estate, according to Business Insider. These are among today’s must reads from around the commercial real estate industry.

  1. Fed Needs to See Prices Rise Before Next Rate Hike, Evans Says “Chicago Federal Reserve Bank President Charles Evans, who votes this year on monetary policy, said he broadly agrees with his colleagues who believe rates should rise gradually to about 2.7 percent over the next two years or so, from the current range of between 1 percent and 1.25 percent. But he said inflation, running at 1.4 percent by the Fed's preferred gauge, is too low and voiced concerns that low inflation expectations will keep it from rising toward the Fed's 2-percent inflation goal.” (CNBC)
  2. Improving Diversification of Target-Date Funds with Direct Real Estate “Until recently, no target-date mutual fund offered exposure to direct real estate. For those target-date funds that include real estate exposure, nearly all invest in shares of publicly traded real estate investment trusts, which generally have similar returns and volatility to other equities. Adding direct real estate as an allocation, may offer four key advantages for multi-asset portfolios.” (Pensions & Investments)
  3. L.A. Presses Forward with Proposed Rules for Marijuana Businesses Despite Industry Concerns “The draft regulations set out how marijuana businesses can apply for licenses and operate, including what hours they can be open, what records they must keep, and what security systems they have to install. A separate set of zoning rules restricts where they can open their doors. Cannabis industry groups complained that the revised rules included major changes that could make some businesses shut downin January.” (Los Angeles Times)
  4. GRESB: Real Estate’s Sustainability Score Rose Globally for 2017 “The real estate sector worldwide improved its sustainability performance in 2017, according to GRESB, a firm that gauges the ESG performance of real assets. For North America, the average GRESB score for 2017 rose to 64, from 59 in 2016, the Amsterdam-based GRESB reports. Scores were based on input from 204 firms, with total assets under management of $2.3 trillion. The region performed better than the global average, and also saw the best annual improvement of all regions.” (Chief Investment Officer)
  5. A Pair of Investing Startups Are in a Public Spat about the Future of Real Estate Investing “It all started when Andy Rachleff the CEO of Wealthfront, a California-based roboadviser with $4.65 billion under management, went after the business model of Fundrise, a Washington DC-based real-estate crowdfunding company. In a September 7 blog post, Rachleff said professionals who run managed real-estate funds fare poorly compared with low-cost index-tracking ETFs, such as Vanguard REIT Index Fund.” (Business Insider)
  6. With More Hidden Fees, Hotels Begin to Resemble the Airline Industry “Check your hotel bill closely after your next stay. Are you being hit with extra charges? It’s becoming more likely, experts say, as hotels hit new records in surcharges and fees. The industry is projected to see $2.7 billion in surcharges in 2017, up from $2.55 billion in 2016 and $2.45 billion in 2015, according to a new report from New York University’s Jonathan M. Tisch Center for Hospitality and Tourism. In the airline industry, ‘no-frills’ basic economy seating has become the norm, and travelers have to pay extra for everything from reserving a seat in advance to carry-on bags.” (MarketWatch)
  7. Amazon Can’t Compete with Off-Price Retailers, JPMorgan Says “Here's a bright and booming sector within retail. Off-price retailers — TJ Maxx owner TJX, Ross Stores and Burlington — are expected to see incremental sales growth of $18 billion to $19 billion by 2021, according to JPMorgan. And that boost will primarily stem from the demise of department store chains, analyst Matthew Boss wrote in a Monday note to clients.” (CNBC)
  8. Trump’s Latest Hotel Venture Focuses on Flea Market-Chic in Deep South “The 45th President of the United States, who has flouted years of tradition by refusing to divest himself from his business ventures, is trying to link his political base with his hotel empire, so he's putting a new Trump hotel in Cleveland. No, not the Ohio city where he claimed the Republican nomination for the presidency, in a state that was crucial to his victory. His new midscale hotel brand, American Idea, is expected to debut in a town that's a long way from the opulent locales he normally favors: it's going to be in Cleveland, Mississippi, population 12,101.” (The Street)
  9. Busted Escalator in WTC’s Oculus Causes Riders Lifelong Injuries, Suit Says “Two men suffered permanent injuries earlier when an escalator inside the World Trade Center Oculus malfunctioned and sent them crashing to the ground, a new lawsuit charges.RuslanKipeev and David Godibadze were riding the escalator around 7 a.m. on April 27 when it ‘malfunctioned, disassembled and buckled,’ claims the suit filed Friday in Manhattan Supreme Court on Friday. The pair fell onto the escalator and landing with "hard impacts," sustaining “serious and permanent injuries,” the lawsuit says.” (DNA Info)
  10. $350M Marriott Marquis Chicago Opens “North America’s largest convention center, McCormick Place in Chicago, now has a brand-new hotel attached to it, courtesy of Prairie District3 Partners, a design-build joint venture spearheaded by Clark Construction Group. Acting on behalf of the Metropolitan Pier and Exposition Authority, Clark and partners recently delivered the $350 million Marriott Marquis Chicago, a 1,205-key lodging destination linked via a pedestrian bridge to the 2.6 million-square-foot meeting destination.” (Commercial Property Executive)
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