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10 Must Reads for the CRE Industry Today (April 17, 2019)

Blackstone is looking at selling the Cosmopolitan hotel in Las Vegas, reports the Wall Street Journal. Artemis Real Estate Partners has raised a $1 billion fund for value-add projects, according to the Washington Business Journal. These are among today’s must reads from around the commercial real estate industry.

  1. Blackstone Preparing to Sell Las Vegas Strip Casino and Luxury Hotel “Blackstone Group LP is exploring a sale of the Cosmopolitan hotel and casino, the rare instance of a major casino on the Las Vegas Strip coming to the market. Deutsche Bank AG and PJT Partners Inc. have been retained to explore strategic alternatives for the property, including a sale, people familiar with the matter said. Blackstone, the New York-based investment firm, acquired the Cosmopolitan in 2014 for $1.7 billion, and it has sunk another $500 million into finishing and renovating the property.” (Wall Street Journal, subscription required)
  2. Sales Market Remains Robust Despite Chrysler’s Bargain Price “The Chrysler Building, which sold at a bargain price of $151 million to Aby Rosen and Michel Fuchs’ RFR through CBRE, may seem to portend a bleak sales market. But the low pricing — caused partially by the need for infrastructure improvements as well as hefty costs related to the ground lease — is not indicative of the market. Another Midtown building, the classic 711 Fifth Ave. owned by Coca-Cola, for instance, is expected to trade through Cushman & Wakefield for a bubbly price — nearly $900 million.” (New York Post)
  3. Artemis Real Estate Partners Closes its Largest Fund Ever “Artemis Real Estate Partners has closed out its third and largest fund to date after raising just over $1 billion for value-add projects in the D.C. area and beyond. Artemis Fund III officially closed in mid-March, exceeding the firm's target by $250 million, with Greater Washington expected to play a significant role in the fund's future assets. Artemis hopes to leverage around $3 billion in real estate deals such as forming joint ventures with others or taking on additional debt.” (Washington Business Journal)
  4. Luxury Corridors Lose Big Brands as Online Labels Open Edgy Shops “While the high-wattage opening of Hudson Yards’ shops and restaurants in March reinvigorated the retail landscape, lease signings for major retail brands along luxury corridors have dropped off to a trickle. ‘In a normal market cycle, we’d see 15 or 20 deals [in the Madison and Fifth avenue corridor], and we are seeing only three to five,’ observes Gene Spiegelman of Ripco Real Estate, who emphasized that retail deals are still getting signed at a regular clip in residential neighborhoods and in the outer boroughs.” (New York Post)
  5. Maritime Industry Warns of Harm from Proposed Oakland A’s Stadium “The Port of Oakland’s maritime industry is raising red flags over the Oakland A’s new waterfront ballpark plan, saying the 34,000-seat stadium and housing project would pose both a safety risk to ships and a threat to the port’s future as a major, regional economic engine.” (San Francisco Chronicle)
  6. A Challenge of Rebuilding Notre Dame: The Forests That Supplied its Wood Are All But Gone “The wood for the soaring cathedral was first felled around 1160 to 1170, with some of it coming from trees thought to be 300 to 400 years old at the time they were chopped. That puts the oldest timber in the cathedral at nearly 1,300 years old. Replacing those beams with comparable oak is simply not an option, said Bertrand de Feydeau, vice president of the preservation group Fondation du Patrimoine. Trees that supplied the roof’s frame came from primary forests—forests that are largely untouched by human activity, he said, according to the AP. He surmised that the huge trees associated with primary forests are gone too.” (Fortune)
  7. To Woo Shoppers, Stores Are Accepting Competitors’ Returns “Walgreens Boots Alliance Inc. and Nordstrom Inc. will let online shoppers at other brands and retailers pick up or return orders at some stores, a sign of how retailers are partnering in new ways to draw customers as more shopping shifts online. Walgreens will start offering package pickup and returns at over 8,000 U.S. locations to partners such as Levi Strauss & Co. and Urban Outfitters Inc., which owns Anthropologie and other chains. Nordstrom will test doing the same at seven stores in the Los Angeles area with a group that includes Cole Haan, said the companies.” (Wall Street Journal, subscription required)
  8. Godiva Moves Beyond Chocolate to Open 2,000 Cafes “Godiva is looking beyond its iconic gold gift box of chocolates. The Belgium confectioner is rolling out 2,000 cafes over the next six years that will serve a complete menu of items like the croiffle, a croissant and waffle hybrid that’s stuffed with fillings like cheese or chocolate and pressed on a waffle iron. Other items include an expanded list of coffees and a new collection of teas as well as grab-and-go items like sandwiches and yogurt parfaits.” (Associated Press)
  9. Columbia Realty Trust Sells 700 KSF Atlanta Campus for $228M “Columbia Property Trust continues to reshape its portfolio with the disposition of One and Three Glenlake Parkway, an approximately 700,000-square-foot office campus in Atlanta. The REIT sold the buildings in a $227.5 million transaction. The 351,000-square-foot tower at One Glenlake first opened its doors in 2002, while Three Glenlake came along in 2008, offering 355,000 square feet. Columbia had acquired both buildings from Granite Properties, purchasing One Glenlake for $80 million in 2004 and buying Three Glenlake for $105.9 million in 2008.” (Commercial Property Executive)
  10. Shorewood’s First OZ Project Will Be a 315-Unit Rental Tower in Jamaica “Shorewood Real Estate Group is bringing a new rental tower to Jamaica, Queens, marking the first project to be financed by the company’s Opportunity Zone Fund. Plans filed with the Department of Buildings on Tuesday envision a 24-story, 315-unit building at 160-05 Archer Avenue, which will also include the adjacent lot at 92-25 160th Street. Like many of Shorewood’s previous projects in Manhattan, the Jamaica project will include co-working space among its amenities.” (The Real Deal)
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