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13 Must Reads for the CRE Industry Today (June 18, 2020)

CalPERS investment committee would like to increase the fund’s target for opportunistic strategies, reports Pensions & Investments. Greater Greater Washington looks at how commercial real estate can address the underrepresentation of black professionals in the industry. These are among today’s must reads from around the commercial real estate industry.

  1. CalPERS Investment Committee Backs Hiking Opportunistic Strategies Target “CalPERS' investment committee on Monday voted to recommend that the board approve a new total fund investment policy that would increase the maximum target for its opportunistic strategies to 5% from 3% and give the staff discretion to invest with opportunistic strategies external managers without board approval. The $386.9 billion California Public Employees' Retirement System's new investment policy would also focus investments in the opportunistic strategies on private and some public credit strategies.” (Pensions & Investments)
  2. Commercial Real Estate Has a Whiteness Problem. What We Can Do to Address Black Underrepresentation in the Industry “Commercial real estate’s whiteness problem does not necessarily stem from pernicious evilness and overt discrimination  —  although the ghosts of real estate’s racist past are still with us  —  but it is more about the underlying sociological systems that underpin the industry and how those social systems revolve around the legacy of white social networks. Those social networks are self-perpetuating, and you should think critically about them and how they can lead to social exclusion.” (Greater Greater Washington)
  3. Clothing Stores, Not Bars and Restaurants, Took the Biggest Sales Hit from the Coronavirus “If you had clothing stores on your bingo card, congratulations. It turns out that bars and restaurants did not take the biggest hit from the coronavirus pandemic — it was clothing stores that suffered the biggest revenue losses over the past three months, with sales slashed by 66.6%. By contrast, sales at restaurants and bars were down “only” 40%. Many of them have been surviving on take-out or delivery, but how many clothing stores were doing curbside pickup? And who needs to buy new clothes if you’re just hanging out in your yoga pants all day and night?” (MarketWatch)
  4. Americans Are Eyeing Homes in the Suburbs as Pent-Up Demand Hits Housing Market “Coronavirus cases may be on the rise in some parts of the country, but that hasn’t stopped Americans from looking for homes to buy. And increasingly, those homes are in the suburbs. A new study from Realtor.com found that Americans are showing a more pronounced interest suburban and rural areas as the housing market recovers from pandemic-induced shutdowns. Views of online home listings in May 2020 on Realtor.com grew by 13% compared to May 2019 for suburban ZIP codes, roughly double the rate of urban areas, researchers found.” (MarketWatch)
  5. Rockpoint Group Raises $5.8 Billion in Opportunistic Funds “Rockpoint Group has completed equity raises for two investment vehicles, securing an aggregate $5.8 billion. The global real estate investment and management firm has just announced the final close of Rockpoint Real Estate Fund VI, with $3.8 billion in commitments on the heels of the final close of Rockpoint Growth and Income Real Estate Fund III, which raised an aggregate $2 billion.” (Commercial Property Executive)
  6. As Tech Firms Rethink San Francisco, Silicon Valley Stands to Gain “San Francisco’s reign as the tech capital of the Bay Area suddenly looks in doubt. For the past decade, San Francisco has outshined Silicon Valley in attracting new technology firms, entrepreneurs and younger employees, who tend to prefer the city’s lifestyle and attractions to the suburbs. Now, that trend shows signs of reversing. Office demand has been falling in both markets, as the coronavirus pandemic, slowing economy and the early success of work from home have caused firms to reconsider office use.” (Wall Street Journal)
  7. Keeping “Pace” in Commercial Real Estate Improvements: A Primer on the New Washington Commercial Property Assessed Clean Energy and Resiliency Program “Commercial property owners in the state of Washington may soon have access to a new source of funding for energy efficiency, renewable energy, and resiliency improvements to their buildings. Washington’s C-PACER legislation (House Bill 2405), passed by the legislature during the 2020 regular session, went into effect 11 June 2020.” (The National Law Review)
  8. Trump’s Golf Club Seeks Rent Reduction from Florida County “Trump International Golf Club, which leases public land in West Palm Beach, Florida, is requesting rent relief from Palm Beach County after COVID-19 forced President Donald Trump’s resort to temporarily close. Ed Raymundo, the director of finance at the resort, sent a letter to ​the county’s real estate director Ross Hering on June 5 claiming that the mandated closure of the golf club, which pays the county $88,338 per month, in March caused a ‘significant impact’ on the resort’s operations.” (Talking Points Memo)
  9. Cinemark to Reopen All U.S. Theaters by July 17 “Cinemark, the third-largest movie theater chain in the U.S., is looking to have all of its more than 500 cinemas reopened by July 17. The company announced on Wednesday a phased reopening plan starting June 19 in Texas. The rest of its locations will open between July 3 and July 17 in advance of Disney’s ‘Mulan’ on July 24 and Warner Bros. ‘Tenet’ on July 31. (CNBC)
  10. Dining in the Street? As Restaurants Reopen, Seating Moves Outdoor “The new open-air seating arrangements not only help the restaurant industry recapture lost business, they also appeal to customers who want a restaurant meal but are wary of venturing inside, where the virus can spread more easily, as studies have shown. In a recent survey by the online publication Slate, 36 percent of respondents said they would eat at a restaurant outdoors, while only 15 percent said they would eat at a restaurant indoors with reduced seating.” (The New York Times)
  11. Investor: Suburbs Are New Hotspots for Miami Office. Large Tech Firms Are Coming Too “Measures to contain the spread of the coronavirus continue to shift — and so do responses by investors, developers, builders, banks and buyers. To track the impact, RE|source Miami is asking area real estate professionals in various sectors for on-the-ground reports. Today we hear from Raoul Thomas, founder and CEO of the Brickell-based private equity and management firm CGI Merchant Group. Thomas transitioned into real estate after 25 years as an investor and bank regulator overseeing global financial institutions working in the United States.” (Miami Herald)
  12. The Plan to Reopen New York City’s Real Estate Industry “The day Governor Andrew Cuomo issued a stay-at-home order in March, Claire Groome, a broker with Warburg Realty, had planned to stage a spacious Upper East Side apartment with furniture. Instead of helping her sell the unit, those props have gathered dust in the back of a truck over the past four months. Virtually overnight, a typically bustling spring season for the real-estate industry ground to a halt along with the rest of New York City life because of the pandemic.” (Curbed New York)
  13. Guess Is Permanently Closing 100 Stores as Its Leases Near Expiration “Guess? Inc. is reevaluating its brick-and-mortar strategy as coronavirus-related shutdowns continue to impact its business. The American apparel and accessories brand has revealed plans to permanently shutter about 100 stores in North America and China, or roughly 9% of its global network. The closures will take place over the next 18 months.” (Footwear News)
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