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10 Must Reads for the CRE Industry Today (September 5, 2019)

Sam Zell is holding on to his investment funds for now, reports MarketWatch. Business Insider looks at the 10 largest grocery chains in the world. These are among today’s must reads from around the commercial real estate industry.

  1. Chicago Billionaire Sam Zell Is Raising Cash to Record Levels in This Dicey Climate “Earlier this year, Sam Zell, the billionaire chairman of Chicago-based Equity Group Investments, said President Donald Trump’s continued push for interest-rate cuts could lead to ‘disaster’ for the U.S. economy. He didn’t sound much more bullish on Wednesday: ‘We certainly never had a cash position like we have now. I think we’re very reticent about the opportunity. We think there’s gonna be some significant opportunities, but what we don’t see is the urgency.’” (MarketWatch)
  2. The 10 Largest Grocery Chains in the World by Sales “Grocery stores are a ubiquitous sight across the globe. But which companies boast the biggest chains? The e-commerce insights firm Edge by Ascential recently ranked international grocery chains by net sales, as part of its July 2019 report on the state of the business. The company calculated its estimates on in-store and online net sales for 2019 based on its database, Retail Market Monitor, which analyzes 2,500 retailers globally.” (Business Insider)
  3. SF Planning Director to Retire After Presiding Over Building Boom “San Francisco Planning Director John Rahaim, who presided over one of the city’s biggest development booms, will retire at the end of February after 12 years on the job. Rahaim oversaw the completion of several neighborhood plans that paved the way for development from Hayes Valley to Transbay to the Dogpatch. He ushered in a wave of downtown construction that San Francisco hadn’t seen since the 1980s.” (San Francisco Chronicle)
  4. Alphabet and Other Giants Are Betting That the Future of Real Estate is Robotic “It seemed like an impossible idea. In 2014, an MIT project called CityHome proposed a sleek robotic armoire that would live inside your apartment, amplifying a tiny footprint with Jetsonian features like a kitchen and bed that could slide out from seemingly nowhere. It was neat, sure, but experiments like this rarely come to fruition as real products. Except CityHome did. It became a company called Ori that began selling units to real estate developers a few years ago.” (Fast Company)
  5. Broadstone Net Lease Buys $736M Industrial Portfolio “Real estate investment trust Broadstone Net Lease Inc. has chalked up its biggest deal to date by acquiring a portfolio of 23 fully leased industrial and office or flex assets for about $735.7 million. The properties, totaling 6.9 million rentable square feet of operational space, are scattered across 14 U.S. states and British Columbia, Canada.” (Commercial Property Executive)
  6. This REIT Stock Is Struggling, but its Top 2 Malls Are Thriving “Shares of mall REIT Pennsylvania Real Estate Investment Trust have lost nearly half of their value over the past year -- driving the stock's dividend yield to 15% -- due to investors' fears about the so-called retail apocalypse. There is certainly some truth to these fears. Funds from operations (FFO), an earnings-like metric used to evaluate a REIT's performance, has declined steadily over the past few years. Management currently expects adjusted FFO per share of just $1.20 to $1.30 in 2019, down from $1.96 in 2014.” (Motley Fool)
  7. The World’s Largest Starbucks Will Open Soon in Chicago. Here’s When the Mag Mile Gets its Reserve Roastery “The highly anticipated Starbucks Reserve Roastery Chicago is scheduled to open Nov. 15 on the Magnificent Mile, marking the last and largest of the chain’s grand coffee palaces. The Chicago roastery, first announced more than two years ago, will open at 10 a.m. that day in a glassy 43,000-square-foot space formerly occupied by Crate and Barrel, at the corner of North Michigan Avenue and Erie Street.” (Chicago Tribune)
  8. Frisco’s Tallest Office Project Just Filled Up “One of Frisco's newest office towers is hanging a "No Vacancy" sign out front. A new lease by Redwood Software has filled up the 12-story 3201 Dallas Parkway building in Hall Park. The 300,000-square-foot office project opened last year near the corner of the Dallas North Tollway and Warren Parkway. The tower is the tallest office high-rise in Frisco and the newest phase of the 162-acre Hall Park development. Redwood Software plans to move into its 8,000-square-foot office in January.” (Dallas Morning News)
  9. Barneys Looks at Downsizing to Survive Bankruptcy “As speculation continued to swirl, fashion industry sources with knowledge of Barneys' business, who spoke on condition of anonymity, outlined several potential paths to a sale. One includes a digital partner such as Farfetch. Another is a consortium including a brand purchaser, a financial firm tied to the vendor community and Barneys' landlords. Another option includes private-equity money, which has poured into the retail sector in recent years.” (Crain’s New York Business)
  10. New Low for Quick-Service Restaurant Cap Rates “The net lease quick service restaurant market experienced something new midway through the year, according to The Boulder Group’s QSR Net Lease Report for this year’s second quarter. Cap rates in the retail subsector continued their decline and dropped to their lowest point ever. While the overall retail net lease market recorded an increase in average cap rates to 6.23 percent in the second quarter, the overall QSR cap rate fell to 5.39 percent, from 5.5 percent in the second quarter of 2018, marking a year-over-year decline in basis points that was nearly double that seen from 2017 to 2018, when the figure dropped 6 basis points.” (Commercial Property Executive)
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