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14 Must Reads for CRE Investors Today (Jan. 30, 2023)

The future of restaurants is increasingly focused on take-out and delivery, reports The Wall Street Journal. Remote work has saved Americans less time than workers in other countries, according to a recent research study. These are among today’s must reads from around the commercial real estate industry.

  1. Blackstone Outlines Plans For Real Estate Investment In Turbulent Market “Concerned about rising interest rates and inflation, it concentrated more than 80% of its real estate portfolio in logistics, life sciences offices, rental housing, hotels and data centers — sectors with strong cash flow growth. Forty percent of  its real estate portfolio is logistics. The rise of logistics has come alongside a significant pullback from office.” (Bisnow)
  2. Americans Are Gobbling Up Takeout Food. Restaurants Bet That Won’t Change. “The strategy from these giant chains is to orient their operations around drive-throughs and online ordering while testing new restaurant concepts that only serve food to go. They say these designs will make them more profitable and efficient since restaurants that bring fewer customers inside cost less to build, maintain and staff.” (The Wall Street Journal)
  3. Institutions seek out non-correlated assets after 2022 losses in stocks and bonds “Pension funds, hedge funds, family offices, banks and other institutions are eager to invest in assets uncorrelated to losing stocks and bonds — and these days they're wading into strategies like cryptocurrency bankruptcy claims and interest rate trades.” (Pensions & Investments)
  4. Blackstone steps up tenant evictions in US with eye on boosting returns “Blackstone has filed eviction lawsuits against hundreds of tenants across the US as it winds down one of the real estate industry’s most generous pandemic-era forbearance programs, in a move that executives say will boost financial returns at the company’s redemption-hit real estate fund.” (Financial Review)
  5. Remote work hasn't actually saved Americans much time — they're mainly just working more “The new paper includes results for the G7 countries. Looking at just the results for these wealthy democracies, the US stands out for its lack of minutes saved. US workers save 55 minutes a day, 17 minutes fewer than the overall average for the 27 countries. Japan's figure was 28 minutes above the average for the 27 countries.” (Insider)
  6. Bed Bath & Beyond’s Woes Prompt Landlords to Line Up New Tenants “Retail’s surprisingly strong recovery from the Covid-19 pandemic persisted in 2022 as shoppers continued to spend in person. Nationwide, retailers opened 2,400 more stores than they closed last year, marking the largest net expansion in a decade, according to commercial real-estate services firm Cushman & Wakefield.” (The Wall Street Journal)
  7. Fifth Wall, focused on real estate tech and managing $3.2B, looks to eat up even more of its market “Brendan Wallace’s ambition is beginning to seem almost limitless. The L.A.-based venture firm that Wallace and cofounder Brad Greiwe launched less than seven years ago already has $3.2 billion in assets under management. But that firm, Fifth Wall, which argues there are massive financial returns at the intersection of real estate and tech, isn’t worried about digesting that capital. It’s heavy-hitting investors — CBRE, Starwood, and Arbor Realty Trust among them — don’t seem concerned, either.” (TechCrunch)
  8. Office Sector to Continue Shifting in 2023 “Although some companies became more aggressive about bringing employees back into the office, others have fully embraced hybrid and remote work practices. According to the latest CommercialEdge office report, 2023 will bring further ambiguity to the office sector as it enters its post-pandemic phase.” (Commercial Property Executive)
  9. ChatGPT Is Just The Start: AI Is Rewriting The Data Center Real Estate Map “More AI means a growing need for computing power, and that means more data centers. But the equipment and infrastructure required for most AI applications differs significantly from the servers most data center providers have been hosting for decades.” (Bisnow)
  10. Chipotle Plans to Hire 15,000 People Ahead of ‘Burrito Season’ “Chipotle Mexican Grill, the fast-casual food chain, said on Thursday that it planned to hire 15,000 workers ahead of its busiest time of year, a sharp contrast to the other large companies that are laying off employees because of pandemic overexpansion and worries about the economy.” (The New York Times)
  11. Manhattan’s office occupancy shows signs of recovery “Manhattan’s office occupancy ticked upward to between 53 and 55 percent on an average weekday, according to the Partnership for New York City, which is expected to announce the results of its latest survey this week.” (New York Post)
  12. Starwood wheels and deals to fix $800M loan default “Starwood has since worked out a repayment plan with its lender. But the default points to the looming distress in a sector that still has not fully recovered from Covid’s hit to travel and hotel occupancy.” (The Real Deal)
  13. The other Kushner is the billionaire mogul to watch “Josh got a big boost from a $175 million stake sale in his venture firm, Thrive Capital, from a who’s who of investors including Disney CEO Bob Iger, Indian tycoon Mukesh Ambani and KKR co-founder Henry Kravis. Thrive, which Josh co-founded in 2009, made early investments in a number of tech giants, including Spotify, Stripe and Instagram.” (The Real Deal)
  14. Over $10B in hotel sales, with more to come across Australia and Asia Pacific “2022 was the year of recovery for the Asia Pacific hotel sector, with some US$8.4 billion (A$12 billion) in hotel transactions recorded between Q1 and Q3, according to a JLL report; expectations were that 2022 would close out with well over US$10 billion in hotel transactions.” (The Property Tribune)
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