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15 Must Reads for Real Estate Investors for the Weekend (May 5, 2023)

Cushman & Wakefield named Michelle Mackay as its new CEO and also announced the passing of John C. Cushman, III. Bisnow examined the “weird” real estate holdings of the British royal family. These are among the must reads from around the real estate investment world to end the week.

  1. Cushman & Wakefield Names Michelle MacKay CEO as John Forrester Retires “Cushman & Wakefield (CWK) CEO John Forrester is retiring and will be succeeded by Michelle MacKay, who currently serves as president and chief operating officer, Commercial Observer can first report. Forrester, who has a 35-year tenure at the company and has served as CEO since 2022, will step down on June 30, with MacKay taking the reins on July 1 and serving on C&W’s board of directors as part of the succession plan.” (Commercial Observer)
  2. How the GSEs Are Proving Vital Once Again “In the multifamily sector, the decline in credit availability from banks and other lenders spooked by growing economic uncertainty is expected to generate more business for Fannie Mae and Freddie Mac. The mission of the two government-sponsored enterprises is to provide a liquidity backstop, and it’s a role that they have fulfilled in periods of financial disruption—most recently during the early days of the COVID-19 lockdowns.” (Commercial Property Executive)
  3. Honoring John C. Cushman, III's Life and Legacy “Cushman & Wakefield is deeply saddened by the passing of John C. Cushman, III, member of Cushman & Wakefield’s founding family who passed away on May 4, 2023. Over the course of his 60-year career, John’s iconic legacy in business, the commercial real estate industry and as a global citizen stands as a key pillar in Cushman & Wakefield’s history.” (Cushman & Wakefield)
  4. NAV Monitor: US office REITs trade at largest discount to NAV as of May 1 “As of the start of May, the office sector traded at the biggest discount to NAV at 57.9%. Eight of the 10 REITs on the overall biggest discount list were office REITs, led by Hudson Pacific Properties Inc. Hudson Pacific Properties closed May 1 at $5.38, 78.5% below its consensus NAV estimate of $24.97 per share.” (S&P Global Market Intelligence)
  5. Why Investors Should Consider Using a 721 Exchange to Defer Capital Gains Taxes “Usually, a 1031 exchange comes to mind; however, an often-underutilized tool that helps investors achieve a similar result is a 721 exchange, or umbrella partnership real estate investment trust (UPREIT). Both 1031 and 721 exchanges offer advantages and disadvantages, but ultimately the choice depends on an investor’s specific goals.” (CPA Practice Advisor)
  6. Faded Hype for Real Estate Tech Leaves Cadre, Others Scrambling “But the New York–based company failed to fulfill those big expectations. Last year, it told investors it would likely pull in less than $30 million in annual revenue and wasn’t yet profitable, according to people familiar with the matter. That has made its latest fundraising effort even more difficult. Over the past six months, the company has struggled to raise tens of illions of dollars, the people said.” (The Information)
  7. Ben Ashkenazy to Raymond Gindi: “I’m going to crush you” “Ashkenazy’s attorney claims the Gindis refused to help cover this shortfall. The attorney also alleges the Gindis are liable for back rent owed by Century 21, the department store chain that the Gindi family owns, which was one of the mall’s anchor tenants. In court filings, the Gindis’ attorneys have claimed that Ashkenazy in fact owes the Gindis money on the property and provided them misleading information about the mall’s finances, making the capital calls invalid.” (The Real Deal)
  8. Seoul advised to prepare exit plans for real estate funds “The surge in overseas real estate investments now leaves them with greater exposure to fallout from declining property values in Europe and the US, a business lobby group said on Wednesday.” (The Korea Economic Daily)
  9. Commercial Real Estate and Big Tech Are Proving to Be a Toxic Mix “It’s something of a coup for famed short seller Jim Chanos, who has been bearish on the sector since at least last year. He’s been vocal about his view that big tech companies will stop renting from industry stalwarts and instead build their own data centers.” (Bloomberg)
  10. WeWork proposes stock merger to avoid delisting “The co-working firm on Monday asked shareholders to approve a maneuver called a reverse stock split, essentially consolidating its outstanding shares in hopes that its stock will trade at  higher prices as a result.” (The Real Deal)
  11. Predictive Analytics in Commercial Real Estate: How AI Is Transforming Decision-Making “These algorithms are capable of analyzing rental information from a variety of sources, including real estate listings, lease contracts, and market trends. Artificial intelligence (AI) algorithms are able to estimate rental prices more accurately by taking into account variables like location, property type, size, and demand-supply dynamics. This enables real estate experts, landlords, and renters to make better-informed choices on rental agreements and investment decisions.” (CBI Commercial)
  12. L.A. leaders want to save downtown garment jobs. But that could mean fewer new homes “But a key element of that plan has drawn fierce opposition from some of downtown’s lowest-wage workers, who fear that new condominiums and apartment towers will push out garment businesses. Those workers, and their allies in organized labor, succeeded last week in adding new language to the plan in the hope of securing “no net loss” of sewing factories and other fashion-related businesses.” (Los Angeles Times)
  13. After Nordstrom store closures, what can San Francisco do to stop the retail exodus? “The loss of Nordstrom, a neighboring Saks Off 5th store and other global brands like Uniqlo, Gap and H&M hurts not only the city’s sales tax base and labor force, but also the vitality of critical downtown streets where tourists flock, helping shape San Francisco’s global reputation.” (San Francisco Chronicle)
  14. Clarence Thomas Had a Child in Private School. Harlan Crow Paid the Tuition. “ProPublica interviewed Martin, his former classmates and former staff at both schools. The exact total Crow paid for Martin’s education over the years remains unclear. If he paid for all four years at the two schools, the price tag could have exceeded $150,000, according to public records of tuition rates at the schools.” (ProPublica)
  15. The Weird, Big Money World Of The Royal Family And Real Estate “Then there is the CrownEstate, a property company like perhaps no other in the world, which owns more than £15B of assets that are hereditary possessions of the Sovereign, held “in right of the Crown”, where the profits go to the British state. It owns everything from London offices and retail to the British seabed, and, for a 1,000-year-old estate, is at the forefront in areas like renewable energy and sustainability.” (Bisnow)
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