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Eight Must Reads for the CRE Industry Today (Feb. 9, 2021)

Tenant activists try to interfere with court eviction cases, reports Reuters. The Wall Street Journal looks at how theme parks became a liability for regional malls. These are among today’s must reads from around the commercial real estate industry.

  1. HNA Group’s Financial Maneuvers Powered its Rise—and Caused its Downfall “From 2015 to 2017, as the Chinese conglomerate HNA Group Co. collected stakes in overseas hotels, financial institutions and office towers in a $40 billion deal-making frenzy, a question lingered: How did the company get so much money to spend? Now, following the downfall of one of China’s most acquisitive companies, the findings of a provincial government working group are shedding some light on the unorthodox ways that money was moved around within HNA, which has a sprawling web of more than 2,000 subsidiaries, affiliates and shell companies.” (Wall Street Journal)
  2. ‘This Is Not Justice.’ Tenant Activists Upend U.S. Eviction Courts “Some of these activists operate loosely under the umbrella of the Autonomous Tenants Union, which works to end evictions nationally. Others, like KC tenants, are independent. Their anthems are ‘Cancel Rent,’ ‘No Debt,’ and ‘No Evictions.’ They are calling for more federal relief to help tenants pay back rent. Landlords, some of whom haven’t been paid in nearly a year, say they are hurting financially too, and are being unfairly villainized for a housing crisis created by a once-in-a-century pandemic.” (Reuters)
  3. Knotel and Industrious’ Paths Diverge, Why Opendoor Is Raising $770M “Why rental arbitrage doesn’t work: Knotel vs. Industrious Knotel, once gleeful over WeWork’s downfall, succumbed to the pressure of rental arbitrage last week by (finally) filing for bankruptcy. In recent months, the startup led by CEO Amol Sarva faced mounting lawsuits alleging it stopped paying rent. In a Chapter 11 filing, the flex-office provider listed assets and liabilities between $1 billion to $10 billion.” (The Real Deal)
  4. Mall Spent Millions on Theme Parks to Woo Shoppers. It Made Matters Worse “Adding theme-park-like attractions was a strategy that Pyramid viewed as crucial to drawing foot traffic and reversing the yearslong struggles of mall operators battling online shopping. Now, the strategy looks less like a lifeline and more like a millstone. Even as new pandemic measures have allowed the mall’s stores to reopen, regulations have kept many of its entertainment attractions closed. Pyramid, which is privately held, borrowed heavily to expand and to build entertainment extravaganzas at Destiny USA and another mall, Palisades Center in West Nyack, N.Y., and the bills are coming due.” (Wall Street Journal)
  5. Housing Parents in a Pandemic: How About the Backyard? “Over the past two years, California has enacted sweeping regulations to make construction of the units more affordable, praising their ability to ‘give homeowners the flexibility to share independent living areas with family members and others, allowing seniors to age in place as they require more care.’ Across the country, the coronavirus has accelerated demand, too, as families look to hunker down together.” (The New York Times)
  6. AMC Entertainment CEO’s Unusual Plan to Keep Theater Chain Afloat Praised “But getting on the right side of the “Reddit rally” wasn’t always easy and sometimes required Aron to clash with his powerful Wall Street allies, including his friends at private equity giant Apollo Global Management, sources said. AMC, which is the nation’s largest theater chain, said on Jan. 25 that it had raised close to a billion dollars to help it through the pandemic, which has decimated movie ticket sales since March. Roughly half of the $917 million AMC raised was from the sale of new stock.” (Fox Business)
  7. First Look: Men’s Wearhouse Expands Digitally Enabled ‘Next-Gen’ Store “The revamped stores are designed to showcase the breadth of the brand’s offerings while supporting a seamless omnichannel customer experience. Innovative technology solutions are integrated throughout the space to enhance service, selection and convenience. Clean sight lines and glass and steel finishes complete the modern, contemporary aesthetic.” (Chain Store Age)
  8. Alumnus Creates McIntyre Bicentennial Professorship in Real Estate Finance “When Robert M. White Jr. made a $3 million gift to create the Robert M. White Jr. Bicentennial Professorship in Real Estate Finance in 2019, the University of Virginia McIntire School of Commerce’s real estate curriculum received a major burst of energy. Last fall, Andrew R. Sanderford became the inaugural chairholder, with a charge to expand the school’s real estate initiative across Grounds.” (UVA Today)
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