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10 Must Reads for the CRE Industry Today (September 28, 2018)

The Wall Street Journal looks at the appeal of co-living projects. Interest rate hikes will cause the next financial crisis, according to Forbes. These are among today’s must reads from around the commercial real estate industry.

  1. For Rent: 98-Square-Foot BR in Co-Living Apt., Community Included “Scott Levine wakes each morning in his tiny room in the Alta apartment building in Long Island City, N.Y., across the river from Manhattan. He gets dressed, brushes his teeth in an attached bathroom, and folds away his Murphy bed. Mr. Levine, a 30-year-old marketing manager, shares the rest of his apartment—basically, a kitchen—with two roommates. Once a week someone from Ollie, the startup that manages his apartment, comes to change his sheets and towels, even top up his toiletries, all of which is included in his rent, which is around $1,800 a month for his 98-square-foot room.” (Wall Street Journal, subscription required)
  2. Downtown Dallas’ Historic Purse Building Is Chasing a New Generation of Office Tenants “Compared to other downtown Dallas office projects, the 113-year-old Purse Building at first look doesn't have a lot to offer. There's no air conditioning, no elevators and the inside is covered in peeling paint. But prospective business tenants that have taken a peek at the West End district landmark are eager to talk about a deal. ‘We got interest as soon as we started working on the building,’ said investor Tanya Ragan, who earlier this year started a fix-up program on the more than century-old Elm Street building. ‘We've been getting all kinds off nibbles from tenants but we haven't been ready.’” (Dallas Morning News)
  3. How Interest Rate Hikes Will Trigger the Next Financial Crisis “As rates continue to climb off their post-Great Recession record lows, market participants and commentators are showing almost no signs of fear as the stock market is hitting records again and complacency abounds. Unfortunately, ‘soft landings’ after rate hike cycles are as rare as unicorns and virtually all modern rate hike cycles have resulted in a recession, financial, or banking crisis. There is no reason to believe that this time will be any different.” (Forbes)
  4. A Man Stashed Guns in His Vegas Hotel Room. 3 Years Later, a Killer Did the Same “The high-powered guns were scattered around the room on an upper floor of the Mandalay Bay Resort and Casino in Las Vegas. One of the firearms, a rifle outfitted with a scope, was near a window, its barrel pointed toward the popular Vegas Strip. But this was 2014, three years before Stephen Paddock used a suite on the 32nd floor of the Mandalay Bay to stock an array of guns and carry out the deadliest mass shooting in modern American history, killing 58 people and injuring hundreds of others at a country music festival.” (The New York Times)
  5. The Luxury Hotels America’s Wealthy and Powerful Call Home “After more than a year, finance executive Robert Wolfangel, his wife Jaime and their cats Tiki and Cody have just moved out of their Philadelphia hotel room. It wasn’t a depressing existence: Their place at Roost Apartment Hotel was a roughly 750-square foot one bedroom with a full kitchen, herringbone floors and midcentury modern furniture. After they finally bought a home, the couple was able to move on two weeks’ notice.” (Wall Street Journal, subscription required)
  6. Rite Aid Overhauls Board After Failed Albertsons Merger “Rite Aid said it would overhaul its board of directors Thursday, a month after it abandoned its merger with grocery chain Albertsons. The company said that it is separating the CEO and chairman position. Director Bruce Bodaken will become chairman and John Standley will remain CEO. Additionally, Rite Aid nominated three independent directors — Robert E. Knowling Jr., Louis P. Miramontes and Arun Nayar — to the board. Shareholders will vote on the proposed changes at next month's meeting.” (CNBC)
  7. Cushman & Wakefield Names Top 25 Tech Cities “Cushman & Wakefield released the ‘Tech Cities 2.0’ report today, an annual study of the top markets in North America where tech is driving the economy and its impact on commercial real estate, which can’t be underestimated. Following up on last year’s research, the 2.0 study groups the top 25 cities into three categories based on how crucial the tech sector is to local economy and real estate market, from ‘tech is a critical component’ to ‘tech is a key driver’ to ‘tech is important.’” (Commercial Observer)
  8. Goldman Sachs Revealed to Have Contributed $275M to 111 Murray Street Financing “The nearly $500 million construction loan on 111 Murray Street has been resized following the sale of a condominium apartment—revealing, in the process, that Goldman Sachs chipped in $275 million last spring to refinance the property, New York City Department of Finance records show.” (Commercial Observer)
  9. Tech Has Taken Over Commercial Real Estate “If it seems like every other office is occupied by a tech company, or that every other block downtown seems to have a new tech incubator, it’s not a coincidence. A new report released today by Cushman & Wakefield, Tech Cities 2.0, shows how the tech industry dominates the commercial real estate market. Since the beginning of 2017, tech companies have accounted for 42 percent of the square footage in the top 100 leases in North America, according to the report. That’s double the percentage taken by the financial industry.” (Curbed)
  10. Knotel Expands NYC Flex Workspace Portfolio “Knotel, a fast-growing provider of custom office space, continues to increase its footprint in New York with the completion of transactions at four office buildings across Manhattan. The company signed four new leases and lease expansions, adding a total of 31,973 square feet to its flexible workspace offerings. The flurry of leases, Knotel notes, is in direct response to a growing demand in the office sector.” (Commercial Property Executive)
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