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10 Must Reads for the CRE Industry Today (Feb. 27, 2020)

Google plans to invest more than $10 billion in offices and data centers, reports Reuters. 7-Eleven to expand new store concept, according to Chain Store Age. These are among today’s must reads from around the commercial real estate industry.

  1. U.S. Long-Bond Yield Hits All-Time Low “U.S. Treasury yields fell sharply Friday as a flight to safety drove global investors into the government securities. The intraday yield of the benchmark 30-year bond fell to a record of 1.889%, well below the previous all-time low of 1.905% in late August, according to data from Tradeweb. The bond yield later rebounded to close at 1.917%, still down from 1.971% on Thursday. Treasurys have been rallying since mid-January on fears that the coronavirus will slow economic activity. However, that isn’t the only factor behind the buying.” (Wall Street Journal, subscription required)
  2. Google to Invest Over $10 Billion in 2020 on U.S. Data Centers, Offices “Alphabet Inc’s (GOOGL.O) Google said on Wednesday it would invest more than $10 billion in offices and data centers across the United States this year. The company added that the new investments will focus on 11 states including Massachusetts, New York and Ohio. ‘These investments will create thousands of jobs - including roles within Google, construction jobs in data centers and renewable energy facilities, and opportunities in local businesses in surrounding towns and communities,’ Chief Executive Officer Sundar Pichai said here in a blog post.” (Reuters)
  3. New Home Sales Soar to Highest Level Since 2007 “Sales of newly-constructed homes in the U.S. soared 7.9% on a monthly basis in January to a seasonally-adjusted annual rate of 764,000, the government reported Wednesday. That figure represents the highest pace of new home sales since July 2007, making for a new cycle high for the housing market. On an annual basis, new home sales were up 18.6% compared with January 2019.” (MarketWatch)
  4. Economists See Growing Recession Risk as Coronavirus Spreads in U.S. and Elsewhere “As the coronavirus outbreak enters a potentially dangerous new phase, with cases widening in Europe and expected to spread in the United States, economists have begun to raise their estimates for the risk of a global recession and fallout to the American economy. Economists say the stock market selloff in recent days reflects a reassessment of the likely magnitude of the hit to corporate earnings in the virus’ wake, suggesting the economic pain could last longer and the recovery may not be as swift as initially thought.” (Los Angeles Times)
  5. 7-Eleven to Expand New Store Concept Nationwide “7-Eleven is moving forward with its ‘evolution’ store format. The c-store giant, which unveiled the concept last March in Dallas, has expanded it to Washington, D.C., with an additional location to open in San Diego in the coming months. 7-Eleven said it plans to continue to expand the concept across the country in 2020. The evolution format is designed to serve as a lab store and real-time experiential testing ground where customers can try the retailer’s latest innovations.” (Chain Store Age)
  6. Behind the Scenes of Tishman Speyer’s Flexible Workspaces “When Tishman Speyer launched its own coworking brand in 2018, longtime players such as Regus and WeWork dominated the shared space sector. Today, an increasing number of notable companies, including Hines and CBRE, are following the business model of one of the nation’s biggest commercial landlords. Tishman Speyer’s first Studio locations opened in Boston and Los Angeles in 2019.” (Commercial Property Executive)
  7. Surviving Hurricanes, Sea Rise in Keys May Mean $3 Billion in Home Buyouts, Elevations “A bird’s eye tlook at the Florida Keys is all it takes to understand that little stands between the chain of islands and the sea. A new federal study all but confirms that there are few big, structural options to keep the Keys safe from the stronger hurricanes and rising seas that climate change is expected to bring. The answer, it suggests, is a combination of elevation and retreat.” (Miami Herald)
  8. Riverfront Skyscraper Owners Look to Cash Out “The search for a buyer could provide a high-profile temperature check of how investors feel about Chicago real estate. While the fundamentals of the downtown office market are especially strong—companies leased more office space in 2019 than any year since 2007—uncertainty about Cook County's overhaul of the way it values properties and the impact that will have on taxes has chilled some real estate investor sentiment.” (Crain’s Chicago Business)
  9. JV Buys Texas Shopping Center Totaling 1 MSF “With the assistance of JLL, an unidentified investor has sold two Texas malls totaling nearly 1.2 million square feet. A joint venture of Mason Asset Management, Namdar Realty Group and CH Capital Group acquired South Park Mall in San Antonio and Westgate Mall in Amarillo, Texas, for an undisclosed price.” (Commercial Property Executive)
  10. Westfield Mall Opens ‘The Digital District’ to House Stores Born on the Web “The Westfield Valley Fair mall in San Jose, California, is opening The Digital District in March, which will house eight stores for born-on-the-web brands. The stores are on average 1,100 square feet and have an average lease of one year, says Shawn Pauli, senior vice president of leasing operations at Westfield, who declined to reveal the lease length for specific retailers. The store spaces will likely rotate over time with new digitally native brands, Pauli says.” (DigitalCommerce360)
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