Must Reads for the CRE Industry Today (December 22, 2016)

Must Reads for the CRE Industry Today (December 22, 2016)


  1. Millennial Innovators are About to Leave Big Cities “Smart leaders are also increasingly seeing the potential of small towns as innovation hotspots. After visiting a few small towns, futurist and tech evangelist Robert Scoble wrote that small communities ‘are primed to see rapid growth over the next decade.’ Some of that growth is driven by the high-cost of housing in cities, but a lot of it is about a narrowing of the ‘livability gap.’” (Fortune)
  2. Trump May Have a $300 Million Conflict of Interest with Deutsche Bank “For years, Donald Trump has used a powerful tool when dealing with bankers: his personal guarantee. Now that guarantee -- employed to extract better terms on hundreds of millions of dollars of loans to the Trump Organization -- is at the center of a delicate loan-restructuring discussion at Deutsche Bank AG, which is under investigation on several fronts by the U.S. Department of Justice.” (Bloomberg)
  3. 5 Commercial Real Estate Trends to Watch in 2017 “This year held some surprises that could have an impact on commercial real estate, and the economy as a whole, in 2017. Here’s a look at five commercial real estate trends to watch in the coming year. CMBS lending has slowed down this year, even as 10-year CMBS loans from the pre-recession boom continue to come due into 2017. And non-bank lenders like Blackstone are picking up some of the slack.” (Forbes)
  4. Consumer Spending Growth Slows After Income Flattens “Consumer spending growth in November slowed as incomes stagnated, and following several strong months of spending gains. Personal incomes were unchanged for the month, and outlays rose 0.2%, the Commerce Department said Thursday. Economists surveyed by MarketWatch had forecast a 0.3% increase for both measures. The government also reported that inflation was unchanged in November. The median forecast among economists in a MarketWatch survey was for a 0.1% monthly increase.” (MarketWatch)
  5. Retailers Go Into 2017 with Too Many Stores “U.S. retailers have a problem they can’t easily resolve: They have too many stores. And even though they’ve already announced slews of store closings, it’s increasingly likely they’ll have to shutter even more over the next few years. That’s especially the case as consumers keep shifting their spending online, which has left the U.S. awash in unwanted retail space, or ‘overstored.’ According to real estate information firm CoStar, nearly 1 billion square foot of retail space will be ‘rationalized’ in the coming years through store closures and conversions to other uses.” (CBS News)
  6. Nursing Home Claims Landlord Flipping Property Led to Deaths “A nonprofit Brooklyn nursing home is suing its landlord for $30 million, accusing him of plotting to flip the pricey property without informing elderly tenants. Allure Group Inc. allegedly began forcing out frail residents soon after buying the CABS Bed-Stuy home in 2015 — leading to the untimely deaths of certain residents, the Brooklyn Supreme Court lawsuit charges.” (New York Post)
  7. Vornado Scores Big at Vintage Manhattan Building “As part of a $625 million refinancing of 85 Tenth Ave. in Manhattan, Vornado Realty Trust has received $192 million and a 49.9 percent interest in the 11-story, 168,000-square-foot building. Vornado received the $192 million from the refinancing proceeds in repayment of multiple loans to Related. In 2007, Vornado made $50 million in 11 percent payment-in-kind mezzanine loans, and in 2013 and 2014 the REIT funded an additional $23 million.” (Commercial Property Executive)
  8. REITs, Real Estate and Donald Trump in 2017 “The outlook for REITs is positive heading into 2017, as a growing economy will spur earnings and dividend growth. And having a real estate mogul in the White House is not a bad thing either, said Wilson Magee, portfolio manager for the Franklin Real Estate Fund (FGRRX). Rexford (REXR), which is up 41% year to date, is one of Magee's top picks for the coming year. Rexford focuses on industrial properties in the greater Los Angeles market.” (The Street)
  9. Women’s Apparel Chain The Limited Said to be Heading to Liquidation “Just like Chico’s, Ann Taylor and other women’s apparel stores, The Limited has been struggling with shifts in consumer behavior and interest, a greater number of rivals as well as longer store leases. Ann Taylor’s parent company Ascena Retail said last week that the chain’s comparable-store sales fell 11% last quarter. Limited Stores, founded in 1963 in Columbus, Ohio, was spun off from Victoria’s Secret parent L Brands in 2007 in a leveraged buyout by private-equity firm Sun Capital Partners.” (Fortune)
  10. SF Office Building Changes Hands for $350M “American Realty Advisors has acquired Foundry Square III, a Class A trophy office asset located in the heart of San Francisco’s Transbay District, from a development joint venture between Tishman Speyer and institutional investors advised by J.P. Morgan Asset Management, for $350 million. The building is currently 100 percent leased to an impressive roster of tenants, including IBM, NASDAQ, Perkins Coie, Neustar and Silicon Valley Bank.” (Commercial Property Executive)
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