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Williams-Sonoma Is Built for Home-Goods Musical Chairs: Gadfly

National Real Estate Investor (NREI) - 22 September 2017
There have been signals recently that the home-furnishings business is on the brink of major churn. Bed Bath & Beyond Inc. suffered its worst one-day stock decline since 2012 after a weak earnings report this week raised doubts about the chain's ability to stay relevant. You can see other brick-and-mortar retailers lining up to capitalize on such misfires: TJX Cos. opened the first location of its new HomeSense chain last month, a big-box furnishings and décor concept that will join its fast-growing corporate sibling, HomeGoods, in America's strip malls. Meanwhile, At Home Group Inc. said in September it has grown its fleet of At Home stores by more than 18 percent in the past year.
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Affordable Housing Developers Face New Challenges

National Real Estate Investor (NREI) - 19 September 2017
Affordable housing developers are facing more obstacles to building new projects, even though the need for affordable housing seems to grow stronger every year. “We believe affordable housing production, that is, the development or preservation of projects financed with Low Income Housing Tax Credits (LIHTCs), will be at best flat to last year,” says Richard Gerwitz, co-head of Citi Community Capital, a community lending and investment arm of Citi.
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Self-Storage Units Wanted in the Recovery from the Hurricanes

National Real Estate Investor (NREI) - 18 September 2017
Self-storage properties will have an important role to play in the recovery from the hurricanes that recently struck Florida and Texas. “Historically, hurricanes have been very favorable in boosting demand for self-storage,” says Jay Crotty, president of SkyView Advisors, a national brokerage firm specializing in self-storage. Earlier this year, experts worried that developers had built more new self-storage properties than there was demand for, especially in Sunbelt cities where development sites are relatively easy to fi
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Debt Limit Gums Up Treasury's Plan for Supply Bump as Fed Tapers

National Real Estate Investor (NREI) - 18 September 2017
The U.S. Treasury has been planning for years how to deal with the funding gap set to open up when the Federal Reserve begins unwinding its $2.5 trillion hoard of the government’s debt. Now there’s a new wrinkle to prepare for, as the latest deal to extend the nation’s debt limit complicates matters for Treasury Secretary Steven Mnuchin just as the Fed is expected to unveil the start of its balance-sheet reduction.
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Blackstone's Motel 6 Locations Left the Light on for ICE

National Real Estate Investor (NREI) - 15 September 2017
Motel 6’s parent company, G6 Hospitality LLC, said locations in the Phoenix-area have been voluntarily handing over guest information to U.S. Immigration and Customs Enforcement (ICE) employees. “This was implemented at the local level without the knowledge of senior management,” G6 spokeswoman Raiza Rehkoff wrote in an email. “When we became aware of it last week, it was discontinued.” ​She said the company is investigating the incidents. The Blackstone Group acquired Motel 6 in 2012 as part of a $1.9 billion deal. At least 20 undocumented people were arrested at two Motel 6 locations between February and August, according to the Phoenix New Times.
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Industrial REITs Experience Unprecedented Success

National Real Estate Investor (NREI) - 15 September 2017
Bolstered by the surge in e-commerce, industrial REITs have become the belles of the industry ball. Propelled largely by the e-commerce boom, industrial rents have grown more than 5.5 percent annually over the past two years in the top 50 U.S. markets, says Eric Frankel, lead industrial analyst at Green Street Advisors, a Newport Beach, Calif.-based firm. This year’s growth rate will be similar, despite more new supply coming on-line, he says.
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What Can Texas CRE Owners Expect as the Insurance Claims Process Gets Underway?

National Real Estate Investor (NREI) - 15 September 2017
It’s been nearly three weeks since Hurricane Harvey made landfall in Rockport, which lies along the southeastern coast of Texas. While emergency response efforts in the wake of the massive storm, which dumped a record-setting 51 inches of rain on the region, may be winding down, the insurance process for commercial and residential property owners is just getting under way.
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U.S. Cities Reporting Least Optimism about Finances Since 2012

National Real Estate Investor (NREI) - 13 September 2017
The financial gains for U.S. cities are showing signs of slowing, with the number reporting improvement dropping to a five-year low as revenue growth slows and they face pressure to spend more on infrastructure, according to a National League of Cities’ annual survey. City general-fund revenues are projected to increase by just 0.9 percent this year, compared with 2.6 percent in 2016, as property-tax growth slows and sales and income-tax collections drop, the report said. The share of cities reporting that they’re more able to meet their financial obligations than they were a year ago slipped to 69 percent, the least since 2012, when many were still contending with some of the fiscal aftermath of the housing crash and recession.
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Bank Loans Still Available for Apartment Construction, but Caveats Abound

National Real Estate Investor (NREI) - 12 September 2017
Even after a flood of new construction, it is still possible to get a construction loan to build new apartment projects. “Everything is financeable at some level and cost,” says Mark Fisher, senior vice president for CBRE Capital Markets. Developers will open more new rental apartments in 2017 than during any year since 2007. All of this new construction has made many lenders cautious as they consider loans on new apartment projects. In addition, banks are still contending with regulations that have taken effect over the past year that cut into their ability to lend. As a result, construction loans are often smaller compared to the cost of development, and lenders have become more cautious when they consider loans on certain types of projects.
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Florida Assesses Damage as Irma Ebbs to Tropical Storm

National Real Estate Investor (NREI) - 11 September 2017
Post-hurricane Miami got back to business with a puff of smoke. It came from the fat Arturo Fuente Opus X that Jorge Artiles was smoking after he opened his cigar shop in a strip mall. Asked why he decided to open only one day after Hurricane Irma turned the surrounding Brickell Avenue financial district into a lake, he said: "Because today is Monday." The first day of the week offered the city and all of Florida relief after facing what could have been a cataclysm. Hurricane Irma weakened as it moved north, leaving in its wake a state that avoided the worst predictions of destruction. By one estimate, the cost of total damages dropped to $49 billion from $200 billion. Still, almost 7 million were without power in the region and millions were displaced in what may yet go down as one of the worst storms in Florida’s history.
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Demand for Student Housing Shows Signs of Slowing Down

National Real Estate Investor (NREI) - 11 September 2017
Student housing properties leased up more slowly this year, thouth they still started the academic year fully-occupied on average, according to several industry sources.

The 10 Highest Paid REIT CEOs

National Real Estate Investor (NREI) - 8 September 2017
S&P Global Market Intelligence provided compensation information for the chief executives of U.S.-based public REITs from 2014 to 2016. Just how much do the heads of top U.S. REITs make? S&P Global Market Intelligence, a New York-based research firm, provided compensation information for the chief executives of public REITs in the U.S. from 2014 to 2016. All of the CEOs on this top-10 list received at least $11 million—with two receiving over the $15 million mark—in total compensation for the fiscal year 2016. Half of the executives made less than the year before.
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How Miami's Industrial Market Stacks Up Against its Peers

National Real Estate Investor (NREI) - 25 August 2017
Much the same way Miami has gained prominence from a cultural, culinary and tourism standpoint, the city has become a hotbed for industrial investment activity. The industrial real estate sector is now considered a top-tier U.S. market, alongside markets such as Los Angeles, New York/New Jersey, Chicago, Atlanta and Northern California.
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Pension Funds, Life Insurers Overtake Banks as Biggest CRE Lenders in Boston

National Real Estate Investor (NREI) - 23 August 2017
Boston, home to world-renowned educational institutions like Harvard and MIT, as well as over 30 other colleges and universities, ranks among the most educated cities in the country, both in terms of the number of college students and the proportion of its college educated population. So perhaps it’s fitting that the No. 1 lender financing mortgages for commercial properties in Boston in the first half of this year was the Teachers Insurance & Annuity Association of America, a U.S. pension giant founded in 1918 to provide retirement income and life insurance to educators.
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A Close Look at Urban Core Apartment Market Performances

National Real Estate Investor (NREI) - 22 August 2017
Measuring health in terms of annual rent growth for new resident leases, results range all the way from spectacular—a 7 percent rent escalation in downtown Seattle—to dismal. The U.S. apartment completion volume across the country’s 100 largest metros has accelerated to more than 80,000 units per quarter in 2017, up from around 60,000 units a quarter in the previous couple years. That aggressive new supply tally is creating a more competitive leasing environment for top-of-the-market product, especially in urban core settings where so many communities are coming on the market within blocks of each other.
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Mnuchin Hints at Keeping Carried Interest Break for Some Firms

National Real Estate Investor (NREI) - 21 August 2017
U.S. Treasury Secretary Steven Mnuchin said Monday that President Donald Trump may keep the carried interest tax break for firms that create jobs, while eliminating it for hedge fund managers.
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The Fed's Timidity Helps No One at This Point: Komal Sri-Kumar

National Real Estate Investor (NREI) - 18 August 2017
The U.S. Federal Reserve believes it faces a dilemma. Despite more than quintupling its balance sheet from about $800 billion in September 2008 to $4.5 trillion in an effort to stimulate the economy, growth continues to be subpar. A federal funds rate at near zero up until December 2015 did little to encourage consumers to borrow and spend. And although the surge in equity prices boosted consumer wealth, it didn’t lead to increased spending, higher incomes or “a virtuous circle (to) further support economic expansion,” as former Fed Chairman Ben Bernanke wrote in a Washington Post op-ed article in November 2010.
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Trump Is Said to Abandon Plan for Council on Infrastructure

National Real Estate Investor (NREI) - 18 August 2017
President Donald Trump will not move forward with a planned Advisory Council on Infrastructure, a person familiar with the matter said Thursday. The infrastructure council, which was still being formed, would have advised Trump on his plan to spend as much as $1 trillion upgrading roads, bridges and other public works. Its cancellation follows Trump’s announcement Wednesday that he was disbanding two other business advisory panels.
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Chinese Pullback Won't Dent Real Estate Prices, Brookfield Says

National Real Estate Investor (NREI) - 18 August 2017
Commercial real estate prices, hovering at record highs in the U.S. following a six-year boom, are sustainable even as Chinese regulators tighten restrictions on overseas investment, according to Brookfield Property Partners LP. There is enough capital pouring into real estate from multiple regions -- including Europe and the Middle East -- to counter any potential slowdown in Chinese investment, Brookfield Property Chief Executive Officer Brian Kingston said in a Bloomberg Television interview. While Asian buyers are often part of the equation, a global shift from low-yield fixed-income holdings to real estate will drive property values for the foreseeable future, he said.
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Considerations in Monetizing Retail Real Estate

National Real Estate Investor (NREI) - 17 August 2017
It is no secret that brick-and-mortar retailers are facing unprecedented headwinds. The headlines are filled every day with the latest updates on faltering sales and diminished fortunes. In this tumultuous environment, the real estate these ubiquitous retailers occupy may be a critical resource in fending off the competitive onslaught.
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More Growth Ahead for Seniors Housing

National Real Estate Investor (NREI) - 16 August 2017
The development boom underway in the seniors housing space has not put a damper on confidence. Exclusive survey results from the fourth annual NREI / NIC Seniors Housing Market Study indicate a more positive outlook across the board on questions related to improving fundamentals, access to capital and transaction pipeline.
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Top Loan Pitfalls: Eight Mistakes That Can Trip Up Borrowers

National Real Estate Investor (NREI) - 16 August 2017
Some of the common pitfalls that borrowers need to watch out for when trying to secure financing in today’s market include the following. Borrowers are reveling in a market where capital remains fairly readily available with lenders that are still eager to do deals. At this stage of the cycle, one might expect to start seeing some slowdown in lending activity, notes Robert Falese, a senior vice president at mortgage banking firm Berkadia. “In all candor, we have not, because the space has performed so well, credit losses have been negligible to non-existent and there is great relative value in these spreads,” he says.
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Do Office Tenants Prefer the City or the Suburbs? The Answer is Complicated

National Real Estate Investor (NREI) - 16 August 2017
Office building owners and developers pondering how to bridge the urban-suburban gap may want to set their sights on what you might call “urb-suburban” settings. What’s urb-suburban? It’s one way to describe the mash-up of suburban office locations in walkable settings with easy access to urban-style amenities like transit, housing, restaurants and retail. Owners and developers of suburban offices that fail to embrace the urb-suburban vibe might find it harder to justify new projects or attract new tenants, industry observers say.
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2017 Top Brokers

National Real Estate Investor (NREI) - 15 August 2017
For nearly a decade and a half, CBRE Group has topped NREI’s ranking of the top brokerage firms. This year marked the 14th consecutive time CBRE has topped the list, which is based on the total value of each firm’s leasing and investment sales transactions. CBRE cracked $300 billion in transactions for the second consecutive year in 2016—$110.8 billion in leasing deals and $211.4 billion in investment sales. The firm’s volume of deals increased 3.7 percent over 2015. (That’s a bit smaller than the 9.0 percent growth it had experienced the previous year.) Looking back further, however, CBRE Group has doubled its deal volume in just six years compared with the $159 billion in deals in posted in 2011.
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Some Apartment Markets Are Facing Challenges

National Real Estate Investor (NREI) - 15 August 2017
In a few overbuilt downtowns, apartment rents are starting to fall. But experts claim that demand for apartment units continues to be so strong, the trend won’t last for long. “The story in these markets is the apartment story writ large: the high levels of apartment construction are not enough to house the 1.2 million or so new households formed each year without increased single-family construction,” says John Affleck, research strategist with the CoStar Group. Apartment rents are still growing, but not as quickly as they had been, in markets across the country, according to research firm RealPage Inc. Rent growth is slowing the most in a handful of cities where developers have opened thousands of new apartments recently.
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Mall REITs Grappled with Tenant Closures in Second Quarter

National Real Estate Investor (NREI) - 15 August 2017
At 2017’s halfway mark, mall REITs continue to manage the fallout from anchor store closures, in-line tenant bankruptcies, single-digit NOI growth and a stock market determined not to overvalue their underlying properties. Regional mall REITs delivered a negative year-to-date return of 11.7 percent, according to NAREIT’s analysis of how 30 retail REITs performed by July 31. However, mall REIT’s chief executives remained optimistic that they still had solid strategies to deliver value to shareholders and property investors.

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