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Nine Must Reads for the CRE Industry Today (Dec. 1, 2021)

Chicago Atlantic Real Estate Finance, which specializes in mortgage loans to cannabis operators, is going public, according to Green Market Report. Commercial Observer looks into why some corporate occupiers are buying their offices instead of leasing them. These are among today’s must reads from around the commercial real estate industry.

  1. Pandemic Delivery Boom Fuels Demand for ‘Last Mile’ Space “The last mile in the e-commerce delivery process looks like a windfall for real-estate owners. Industrial properties in general have enjoyed strong rent growth and record-low vacancies during the pandemic. An increase in online shopping has furthered the trend, creating greater demand for warehouses to hold ordered items. Retailers especially covet space near highly populated areas where online orders can be loaded onto trucks and vans for local delivery to their final destinations.” (The Wall Street Journal)
  2. New Cannabis REIT to Go Public “Chicago Atlantic Real Estate Finance, Inc. is a newly formed commercial real estate finance company or REIT. The current portfolio is mostly first mortgage loans to state-licensed operators in the cannabis industry. The company expects the IPO to be priced between $16.00 and $18.00 per share and could raise as much as $129 million. It has applied to list the common stock on the Nasdaq Global Market under the symbol ‘REFI’.” (Green Market Report)
  3. Omicron Variants Starts to Hit Travel, Business Flights and Events “Airlines are warning of lower bookings, executives in Europe are tweaking business travel plans and a handful of organizations have canceled or downscaled events across the continent amid new government-mandated restrictions and uncertainty over the spread of the Omicron variant of the coronavirus. EasyJet PLC, one of Europe’s largest and the first major airline to report financial performance since the identification last week of the new variant, said it was seeing some softening in bookings as customers defer flights.” (The Wall Street Journal)
  4. Office Stocks Take a Hit as Omicron Variant Concerns Add to Growing Slowdown in Demand “Stocks of the nation’s largest office REITs moved lower again Tuesday, as the office market faces new concerns over the Omicron variant of Covid. This comes on top of a new cooling in office demand, which had been improving sharply in the first half of this year as Covid19 vaccinations promised a safe return to work. Stocks of the largest office REITs, like Boston Properties, SL Green, Douglas Emmett and Alexandria Real Estate Equities all fell sharply Friday, when news of the variant spread, and have yet to recover. These stocks had been surging, up around 25% year-to-date.” (CNBC)
  5. Why New York Tenants Are Buying Their Buildings Instead of Leasing “Whatever its true merits, personal homeownership has generally been depicted as an unalloyed good — an essential wealth-building tool, the bedrock of healthy communities, the cornerstone of the American dream! Businesses, on the other hand, have often opted to rent. Sure, you have your famous flagships, though, in many cases, their namesakes are long gone — Pan American World Airways doesn’t own 200 Park Avenue nor does MetLife, even if that’s how generations of New Yorkers came to know the building — but, by and large, compared to the residential scene, commercial operations have preferred leasing to buying.” (Commercial Observer)
  6. Once the World’s Biggest Real Estate Investor, ADIA Pivots Strategy to Stay Relevant “Giant sovereign wealth fund is filling top positions and investing in a different manner.” (Bisnow)
  7. Some California Cities Aim to Blunt New Duplex Law “With California on the verge of allowing multi-unit housing in neighborhoods previously reserved for single-family homes, some cities are rushing to pass restrictions on the new developments. Senate Bill 9, which takes effect Jan. 1, requires communities across California to allow duplexes, and in some cases four units, in most single-family home neighborhoods. The law’s passage this summer came after years of debate over how to address a shortage of available homes at root of the state’s housing affordability problems.” (Los Angeles Times)
  8. Supply Chain Problems Have Small Retailers Gambling on Hoarding “For many small businesses, the unpredictability this year has forced them to make buying decisions months or weeks earlier than they normally would and to tie up more of their cash in inventory, which can be risky. ‘The big thing is you really have to order in advance,’ said Dan Quinn, an owner of What We Make, a furniture business in Algonquin, Ill., which sells tables and other wares through Etsy. ‘I’ve got 14 weeks of projects. I need to get most of that material in house as fast as possible and keep buying it until you have a stockpile basically.’” (The New York Times)
  9. Why Dollar Tree Is Ditching $1 Forever “Dollar Tree is throwing away those green ‘Everything's $1’ signs at stores, ditching the brand identity it created and stuck to devotedly for 35 years. The chain said last week that it will permanently raise prices by 25% on the majority of its products. Dollar Tree has already made the change at some stores and will roll out the new prices to all of its nearly 8,000 US stores by the first quarter of next year. In addition to new signs at stores alerting customers of the change, Dollar Tree will run advertising and train store staff on how to handle customers confused about why prices aren't $1 anymore.” (CNN Business)
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