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10 Must Reads for the CRE Industry Today (May 10, 2021)

New rules are targeting emissions from large distribution logistics facilities, reports The New York Times. looks at how the Fed has raised concerns that low transaction volumes have made it difficult to assess current property valuations. These are among today’s must reads from around the commercial real estate industry.

  1. E-Commerce Mega-Warehouses, a Smog Source, Face New Pollution Rule “The rule, which was adopted late Friday by the South Coast Air Quality Management District’s 13-member board in a 9-4 vote, sets a precedent for regulating the exploding e-commerce industry, which has grown even more during the pandemic and has led to a spectacular increase in warehouse construction.” (The New York Times)
  2. The Fed Worries That Low Transactions May Mask Falling CRE Valuations “The Fed says that disruptions caused by the pandemic make it hard to understand what valuations are in the CRE sector. While cap rates continue to decline, the Fed notes that an index of REIT properties remains below pre-pandemic levels.” (
  3. CREFC First-Quarter 2021 Surveys Reveal Continued Positive Outlook for CRE Finance Market “The results indicate a continued strong upward surge in positive outlook for commercial and multifamily real estate finance, with 95% of the Board expecting the U.S. economy to perform better over the next 12 months, compared to 77% in Q4 2020. CREFC's quarterly sentiment Index is derived from the Board's responses to 10 core questions on the state of the commercial real estate (CRE) finance market.” (Via press release)
  4. Ventas plans to ‘win the recovery’ in senior housing through strategic moves “Saying that the worst of the pandemic is over, Ventas Chairman and CEO Debra Cafaro said the real estate investment trust’s portfolio delivered ‘better than expected financial results’ in the first quarter. The REIT, she added, is ‘actively engaged in taking steps to win the recovery’ through its portfolio and capital allocation decisions.” (McKnight’s Senior Living)
  5. Would Opportunity Zones Still be a Worthwhile Investment Under the American Families Plan? “Consider an investment of $1 million into two, similar real estate investments, both of which earn a 10% annualized pre-tax internal rate of return, but where one investment is non-QOZ (left columns) and the other is a QOZ (right columns). As you can see below, the QOZ investment would yield higher after-tax returns than a non-QOZ investment of equivalent performance.” (Real Estate Industry Insights blog)
  6. Nuveen CEO on why corporate awakening on race is no fad “As CEO, he’s pushing to bring in a more diverse workforce at Nuveen, and he says the great awakening on race companies have undergone over the last year will only continue. He spoke with The Associated Press recently about what it was like to take the CEO job just as the pandemic swept the world and whether he’s worried about bubbles in the stock market.” (The Associated Press)
  7. Grocery Store Properties See Strong Gains During Pandemic “The in-store and online gains have boosted profits for grocery store chains. Albertsons Cos. Inc., for example, reported sales growth of 16.9% last year, while Kroger Co., which owns Ralph’s, reported sales growth of 14.1%, not including fuel.” (Los Angeles Business Journal)             
  8. Shopping center REIT Phillips Edison files for a $100 million IPO “The Cincinnati, OH-based company was founded in 1991 and booked $497 million in revenue for the 12 months ended March 31, 2021. It has not selected an exchange yet but plans to list under the symbol PECO. Morgan Stanley, BofA Securities, and J.P. Morgan are the joint bookrunners on the deal.” (Renaissance Capital)
  9. Revolutionizing Main Street: How Shopping Hubs Are Changing “El Centro is an example of how many retail hubs are evolving to keep pace – we mean literally, as in foot traffic – with a customer base that has grown accustomed to shopping everything online. The residential and retail complex, on Hollywood Boulevard in Los Angeles, California, has recently added Amoeba Music, the world’s largest independent record store, as an anchor tenant.” (Forbes)
  10. Brookfield Property Sells Forever 21 Stake as Retail Continues to Drag “Brookfield Property Partners sold its stake in Forever 21 for $63 million during Q1 2021, which contributed to the real estate company’s quarterly income of $731 million. Brookfield’s flow from operations (FFO) was $125 million for the quarter, down from $309 million during the same period in 2020.” (Retail Touchpoints)          
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