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10 Must Reads for the CRE Industry Today (September 3, 2019)

Brokers in New York City are still charging hundreds of dollars in “processing and application fees” for apartment rentals, reports The New York Times. Lego plans a global expansion, according to CNBC. These are among today’s must reads from around the commercial real estate industry.

  1. $500 to Apply for an Apartment? So Much for the $20 Cap “Within a few days of beginning her apartment hunt this summer, Natalie Miscolta-Cameron got lucky: She found a one-bedroom walk-up she could afford on East 96th Street in Manhattan. But she was surprised when the landlord’s broker asked her to pay a $100 application fee, followed by a $400 ‘processing fee,’ even though such upfront fees had been capped at $20 as a result of new rent laws passed by state lawmakers in June.” (The New York Times)
  2. Overseas Investors Unload U.S. Real Estate “A strong appetite among foreign investors for office buildings, apartments, malls and other real estate has in part fueled the long-running bull market in U.S. commercial property. Now, amid a maturing property market cycle and rising uncertainties in geopolitics and the global economy, foreign investors have sold more U.S. commercial real estate than they bought in a quarter for the first time since 2013. After years of amassing huge portfolios, investors from abroad sold $13.4 billion of property in the second quarter of 2019, according to data firm Real Capital Analytics.” (Wall Street Journal, subscription required)
  3. Glamping Has Come to NYC “Travel company Collective Retreats opened a luxury campground on Governors Island in New York Harbor, an eight-minute ferry ride from Manhattan, in July 2018 — and they just added an even more luxe type of accommodation. On a recent summer afternoon, I took the ferry out to the island to get a look at what it's like to go glamping in New York City.” (Business Insider)
  4. How a Trump Tax Break to Help Poor Communities Became a Windfall for the Rich “President Trump has portrayed America’s cities as wastelands, ravaged by crime and homelessness, infested by rats. But the Trump administration’s signature plan to lift them — a multibillion-dollar tax break that is supposed to help low-income areas — has fueled a wave of developments financed by and built for the wealthiest Americans. Among the early beneficiaries of the tax incentive are billionaire financiers like Leon Cooperman and business magnates like Sidney Kohl — and Mr. Trump’s family members and advisers.” (The New York Times)
  5. Lego Plots Global Expansion with Malls Hungry for New Stores “The Danish toymaker said Tuesday when it reported earnings the expansion includes a flagship store it’s planning to open in Amsterdam this December, along with about 80 new stores in China. The plan puts Lego on track to have more than 140 stores across 35 cities in China by the end of this year. It’s also set to open in Mumbai, India, early next year. The openings will bring Lego’s store tally to nearly 600 locations globally.” (CNBC)
  6. Miami Office Developers Step on the Gas “Like office-building developers in many U.S. cities, those in Miami have shown restraint during the financial recovery, adding new space at a modest pace. But now the Miami office-development engine is chugging into gear as developers hope to cash in on the rise in occupancy and rents over the past five years. Demand for space is being fueled by corporations expanding their Latin American trade operations, growing tech companies, law firms and high-earning newcomers escaping high-tax states.” (Wall Street Journal, subscription required)
  7. East Bay Tenants Face Eviction as Developer Converts Units to Affordable Housing “A San Francisco developer is turning apartments in the East Bay and North Bay into affordable housing that the area sorely needs. But as the company acquires the properties and renovates and readies the units, existing tenants whose income levels disqualify them for the new apartments are being pushed out. Reliant Group acquired properties in Hayward, Antioch, Hercules and Napa in March. The properties had a mix of market-rate units, rent-control apartments and affordable dwellings that in some cases were out of compliance.” (San Francisco Chronicle)
  8. Nearly 100 More Sears and Kmart Stores to Close, Including 2 Mass. Locations “Nearly 100 additional Kmart and Sears stores could close in December or sooner. The latest round of closures includes two locations in Massachusetts. The news comes just weeks after retailers announced 26 Sears and Kmart locations would close in October. Liquidation sales are expected to start in mid-September.” (CBS Boston)
  9. Landmark Lakewood Tower Gets a Top-to-Bottom Redo “Developers are pushing ahead with plans to redo a faded Lakewood high-rise into modern office space. Larkspur Capital recently purchased the seven-story former Faulkner Tower at 6220 Gaston Ave. near La Vista Drive. Built in 1967 for a savings and loan and office space, the almost 35,000-square-foot building has been considered a neighborhood eyesore.” (Dallas Morning News)
  10. EQ Office Sells Washington Asset for $231M “The Spanish multibillionaire behind Zara is plowing more money into U.S. real estate. An investment vehicle controlled by Amancio Ortega, founder of the Inditex retail empire, has acquired an office building neighboring the White House from Blackstone-owned EQ Office for $231.3 million, according to Yardi Matrix.” (Commercial Property Executive)
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