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10 Must Reads for the CRE Industry Today (Dec. 5, 2022)

Like Blackstone, Starwood is also limiting investor redemptions in one of its funds, Barron’s reported. Conferences are upping the bells and whistles to draw attendance in a work-from-home era, according to Vox. These are among today’s must reads from around the commercial real estate industry.

  1. Starwood, Like Blackstone, Limits Investor Redemptions from Big Real Estate Fund “In a letter to financial advisors that was forwarded to Barron’s, SREIT said it received repurchase requests equal to 3.2% of NAV in November. Based on the 2% monthly limit, it fulfilled 63% of investor redemption requests (0.63 times 3.2 equals 2). Any requests that weren’t filled will have to be made again in December, the letter said.” (Barron’s)
  2. Conferences want to cure the work-from-home blues “In addition to world-class speakers, conferences are touting their tropical climates, water sports, and wine tastings. They’re also being careful to orchestrate intimate in-person interactions they don’t feel can be replicated online. According to Kitty Boone, vice president of the Aspen Institute’s Public Programs and executive director of its Aspen Ideas Festival, the goal is to make it ‘something that they don’t feel they can miss.’” (Vox)
  3. Wynn Completes Sale of Encore Boston Harbor for $1.7 Billion “Under the deal, Wynn Resorts will continue to operate Boston Encore Harbor via a triple net lease agreement worth $100 million over 30 years, with another 30-year renewal option. The rent will escalate at a rate of 1.75% for the first decade, and the greater between 1.75% or the Consumer Price Index (CPI), capped at 2.5%, over the remainder of the lease term.” (The Sports Geek)
  4. Gov. Yimby? Hochul promises housing blitz next year “Hochul indicated Thursday that her administration would target communities and zoning policies that block housing and perpetuate segregation. Rattling off statistics, she claimed that New Jersey and Connecticut are outpacing Long Island, Westchester and other New York suburbs in housing production.” (The Real Deal)
  5. CMBS Sector Outlook: Continued Uncertainty Going into 2023 “MBA NewsLink interviewed KBRA’s Larry Kay and Andrew Foster to get their insights on the current lending environment and property fundamentals as well as factors that may affect overall property performance in 2023. The report also discusses year-to-date 2022 KBRA-rated CMBS conduit trends and metrics and looks at 2022 ratings activity and surveillance expectations for 2023.” (MBA Newslink)
  6. Democrats eye new legislation to rein in Wall Street landlords “The stated goal of the new House bill is to deter future institutional investments into single-family homes. It would try to do this in a few ways, including by barring corporate investors from claiming certain tax breaks like the mortgage interest deduction, and imposing a transfer tax on the sale value of new single-family home purchases.” (Vox)
  7. Why Blackstone’s $69 Billion Property Fund Is Signaling Pain Ahead for Real Estate Industry “What’s changing most drastically across the industry is the relative value of real estate to other investments. Thanks in part to the Federal Reserve’s hiking campaign, investors have other places to earn money that could generate more yield than in years past and tend to be more liquid than commercial real estate, including Treasuries, investment-grade bonds, and mortgage-backed securities.” (Advisor Perspectives)
  8. McDonald's opens US's first small-format location that's optimized for delivery and mobile orders “The test restaurant, outside of Fort Worth, Texas, is the first of its kind for McDonald's. It includes an order-ahead lane where customers can drive up and retrieve mobile orders from a conveyer belt. These customers will be able to skip the regular drive-thru line.” (Insider)
  9. Can private clubs bring New York workers back to the office? “To that end, some landlords are thinking outside the cube. One Willoughby Square in Brooklyn includes amenities such as a coffee lounge, outdoor balcony, banquette seating, covered outdoor space and a custom bar.” (The Real Deal)
  10. New Orleans Apartment Market is Performing Well Due to High Barriers to Entry “The overall vacancy factor for our seven primary submarkets that make up metro New Orleans are in the 5 to 6 percent range. We anticipate occupancy rates to steadily increase going forward as new construction has stalled and rising interest rates have delayed many tenants from transitioning to homeownership.” (Real Estate Business)
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