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11 Must Reads for the CRE Industry Today (Dec. 2, 2020)

Airbnb is targeting a $35 billion valuation as it prepares to go public, reports CNBC. Retailers with means are using the pandemic as an opportunity to buy retail centers, according to the Wall Street Journal. These are among today’s must reads from around the commercial real estate industry.

  1. A New Setback for Big Cities as Return to the Office Fades “The recent surge in Covid-19 cases across the country has led to an uptick in Americans resuming work at home after some momentum had been building for returning to the workplace, property analysts said. Floor after floor of empty office space is a source of great frustration for landlords and companies, which have invested millions of dollars in adapting building plans and developing new health protocols to make employees comfortable with a shared location.” (Wall Street Journal)
  2. Airbnb Seeks Valuation of Up to $35 Billion in its IPO “Airbnb plans to price at $44 to $50 per share in its IPO, giving it a valuation of up to $35 billion on a fully diluted basis, according to a new filing it submitted to the Securities and Exchange Commission on Tuesday. The company aims to raise about $2.5 billion in the initial public offering. Existing investors seek to sell $96 million worth of stock in the IPO.” (CNBC)
  3. Retailers Seize on Pandemic Fallout to Become Property Owners “Struggling shopping malls are finding an unexpected boost from bargain-hunting retail operators. Such was the case in Stamford, Conn., where the Stamford Town Center mall lost popular tenants like H&M, Apple Inc. and Talbots to a competing shopping center that opened last year only 8 miles away. In October, home-furnishing company Safavieh purchased Town Center mall.” (Wall Street Journal)
  4. PREIT Eyes Early December Bankruptcy Exit “Pennsylvania Real Estate Investment Trust is eyeing an early December bankruptcy exit after a Delaware court approved its restructuring plan this week. On Monday, the United States Bankruptcy Court for the District of Delaware confirmed the company’s prepackaged financial restructuring plan, setting it up to emerge from voluntary Chapter 11 in early December, said PREIT.” (Sourcing Journal)
  5. This Is the Winter from Hell for Restaurants and Workers “COVID-19 infections surge throughout the country again — with the virus causing nearly 1,500 daily deaths on average — the restaurant industry is preparing for further shutdowns, job losses, and permanent closures. Los Angeles has ended all restaurant dining except for takeout and delivery. New York Gov. Andrew Cuomo is threatening to do the same for parts of Staten Island, and has already ordered restaurants to shutter dine-in service by 10:00 p.m. citywide. And Mayor Bill de Blasio says a full prohibition on indoor dining could come in early December, following similar bans to that effect in other major U.S. cities.” (Eater New York)
  6. As J.C. Penney Exits Bankruptcy, Its Long-Term Outlook Remains Grim “JCPenney has survived to see its 119th holiday shopping season. How many more it has ahead of it is tough to say. In May, the storied department store chain filed for bankruptcy, having been brought to the brink by a combination of the Covid-19 pandemic, unaffordable levels of debt and years of miscalculation and blunders by a constantly changing lineup of top management. The brand's most recent profitable year was 2010, and net losses have since reached roughly $5 billion.” (CNN Business)
  7. British Retailer Arcadia Group, Owner of Topshop, Files for Bankruptcy “Arcadia Group, the British retail company owned by Philip Green that includes the Topshop clothing chain, has gone into administration, a form of bankruptcy, the company said Monday. It is one of the biggest retail collapses in Britain since the start of the pandemic. Deloitte has been appointed as the administrator. Arcadia, which has 444 stores in Britain, 22 overseas and about 13,000 employees, said it would keep operating during administration.” (The New York Times)
  8. Seattle Trophy Office Tower to Change Ownership in $625M Deal “Hudson Pacific Properties Inc. and Canada Pension Plan Investment Board will soon add the trophy office tower at 1918 8th Ave. in Seattle to their jointly owned portfolio of assets. The partners will acquire the approximately 668,000-square-foot building from institutional investors advised by J.P. Morgan Asset Management. Hudson Pacific and CPP Investments are expected to close on the acquisition of 1918 8th Ave. by year’s end.” (Commercial Property Executive)
  9. Greendale Mall-to-Amazon Would Be a First for New England “The Greendale Mall, now down to a single tenant, wasn't especially unusual as a fading shopping mall at a time when retail is struggling and indoor shopping centers in particular have fallen out of fashion. But the Worcester mall's apparent fate as a future Amazon fulfillment center would make it a first: the only shopping mall in New England to be converted into industrial use, according to the national real estate firm CBRE, which tracks such shifting uses.” (Worcester Business Journal)
  10. Bronx Rent-Stabilized Multifamily Portfolio Nabs $186M Loan “Finkelstein Timberger East Real Estate received a $186 million refinancing package for 16 multifamily buildings in the Bronx. Fannie Mae provided the financing, which has an average fixed rate of 2.98 percent for 12 years with partial interest-only payments, followed by 30-year amortization schedules. Black Bear Capital Partners brokered the transaction for the borrower.” (The Real Deal)
  11. Tis Not the Season: CRE Laments Loss of Holiday Party Circuit “The first few weeks of December are usually crammed with real estate parties, all of which are off this year because of the coronavirus pandemic.” (Bisnow)
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