10 Must Read Items for CRE Investors on May 3, 2019

10 Must Read Items for CRE Investors on May 3, 2019 | National Real Estate Investor


MarketWatch at small U.S. cities that are seeing an influx of millennials. Forbes explores how a downturn would impact real estate crowdfunding. These are among today’s must reads from around the commercial real estate industry.

  1. Can an Art Collective Become the Disney of the Experience Economy? “You might be tempted to call AREA15, a development that opens in December a few miles from the Las Vegas Strip, a mall; its investors would prefer that you did not. The word ‘mall,’ in the second decade of the 21st century, has come to be a word for something dying, if not dead. It connotes suburban sprawl, vacant department stores, plummeting real estate values. Accordingly, even though it will most likely feature retail tenants, an ice-cream parlor, a gift shop and a food court, AREA15 is being billed as something fresh and exciting — an ‘immersive bazaar,’ an ‘experiential retail and entertainment complex,’ a place where “artists are front and center.” (The New York Times)
  2. Millennials Are Pouring Into These Smaller Cities and Buying Homes “High home prices along with strong demand have today’s youngest homebuyers moving to smaller cities — and that could mean a boom for local economies and home values in those markets. For example, Madison, Wisconsin is a new mecca for millennials, according to a recent study from the National Association of Realtors, which ranked the top millennial housing markets based on both their high share of current young residents and of millennials moving in.” (MarketWatch)
  3. What Family Offices Need to Understand About Real Estate Opportunities “One of the questions that I get asked all the time from other family offices is, ‘Where are the opportunities in real estate?’ The answer to that in many ways is subjective, as there are different types of properties, and there may be a preference that one family is more comfortable with than another. Let’s take multifamily for example. Multifamily is overwhelmingly the property type of choice when it comes to the kind of real estate investments that family offices tend to invest in.” (Forbes)
  4. Ginnie Mae Moves to Crack Down on Repeated Refinancings “Ginnie Mae is taking steps to curb repeated mortgage refinancings that it says are hurting both borrowers and investors. The government-backed firm, which promotes homeownership by guaranteeing government mortgage bonds, is considering barring some loans backed by the Department of Veterans Affairs from inclusion in its flagship bonds. Its proposal, released on Friday, is aimed at stopping so-called “churning,” a practice in which lenders push borrowers to refinance their home loans over and over in a bid to boost fees to the lenders. Ginnie Mae has made churning a priority in recent years.” (Wall Street Journal, subscription required)
  5. New York Private Equity Group Leads $800 Refi for Sears “A New York-based private equity group is betting big on Sears, after Edward Lampert’s multibillion-dollar takeover of the ailing retailer from bankruptcy earlier this year. HPS Investment Partners, a former subsidiary of JPMorgan, led a group of investors in providing Sears with an $800 million refinancing package, secured by a national portfolio of Sears and Kmart stores, The Real Deal has learned.” (The Real Deal)
  6. Buyer Beware: How a Downturn Could Affect Real Estate Crowdfunding “Real estate crowdfunding has grown exponentially over the past few years. Many crowdfunding platforms are thriving as the industry has ballooned into a multibillion-dollar market. Consequently, crowdfunding companies are disrupting the traditional real estate sector by allowing everyone — not just those with real estate connections and institutional capital — to invest in quality opportunities. This success should come as no surprise since real estate crowdfunding was born during a near decadelong market upcycle. History, however, has taught us that what goes up must come down.” (Forbes)
  7. Pritzker Interested in South Loop Mega Project “Maybe he’s just being polite, not wanting to discourage a potentially huge investment in his state. But at least initially, Gov. J.B. Pritzker is expressing interest in developer Bob Dunn’s proposal for a megadevelopment on air rights west of Soldier Field even though the project eventually would require hundreds of millions of dollars of state subsidies.” (Crain’s Chicago Business)
  8. A Very Modern Waste of Tax Dollars “When Californians place an online order with Best Buy, they pay the company and they pay a state sales tax. What the receipt doesn’t say is that Best Buy gets some of the sales tax, too. California distributes a portion of sales tax revenue to local governments, based on the location of sales. In 2015, Best Buy agreed to keep a distribution warehouse in the small city of Dinuba, and to credit its online sales to that location. In exchange, Dinuba agreed to give Best Buy 45 percent of its share of the resulting sales tax revenue.” (The New York Times)
  9. CVS Closing 46 Stores: See the List of Struggling Locations That Are Going Away “CVS Health is closing 46 of its stores, saying the locations were “underperforming” as the drugstore chain continues to shift more of its retail presence toward health care services. The move cost CVS about $135 million as a ‘store rationalization charge’ in its first-quarter earnings report. The cuts represent fewer than 1% of the about 9,600 CVS Pharmacy stores nationwide.” (USA Today)
  10. Marriott CEO Arne Sorenson Diagnosed with Pancreatic Cancer “Marriott CEO Arne Sorenson has been diagnosed with stage two pancreatic cancer. The 60-year-old Sorenson will continue to lead the company while he undergoes treatment. Sorenson said in a prepared release Friday that the cancer was found early and that he and his doctors are aiming for a complete cure. He will begin treatment next week, with surgery expected at the end of the year.” (New York Post)

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