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Seven Must Reads for the CRE Industry Today (Feb. 15, 2022)

The Wall Street Journal looks at an Alabama private equity company that has been buying up hospitals over the past 10 years. Increased infrastructure funding could inadvertently worsen global warming, according to The New York Times.

  1. How a Small Alabama Company Fueled Private Equity’s Push into Hospitals “Private-equity firms have been buying hospitals in increasing numbers over the past decade. Several relied on an Alabama real-estate company to help pay for their purchases. Medical Properties Trust Inc. was willing to buy the bricks and mortar, and lease the facilities back to the hospital operators. That provided financing for the deals and helped some of the private-equity firms take money out of their investments. As a result, the Birmingham-based company became one of the nation’s biggest owners of hospital property. The real-estate investment trust, or REIT, offered investors an appealing story: It had long-term leases with tenants that provide essential services, and it paid a lucrative dividend.” (The Wall Street Journal)
  2. Brick-and-Mortar Help Drive Strong Global Retail Spend in 2021 “Physical retail made a strong comeback in 2021. Total retail spending around the world grew 9.7% to $26.031 trillion, according to eMarketer’s Insider Intelligence report. The increase outpaced eMarketer’s earlier forecast of 6.0% growth. Pent-up demand from in-store shoppers helped drive the increase. In-store sales rebounded by 8.2% last year, to $21.094 trillion, more than was spent in 2019, the report.” (Chain Store Age)
  3. How Billions in Infrastructure Funding Could Worse Global Warming “A Western frontier state with an affinity for the open road and Subaru Outbacks, Colorado’s traditional answer to traffic congestion could be summed up in two words: more asphalt. But widening highways and paving new roads often just spurs people to drive more, research shows. And as concerns grow about how tailpipe emissions are heating the planet, Colorado is among a handful of car-dominated states that are rethinking road building.” (The New York Times)
  4. Industrial Outdoor Storage Primed for Growth “As commercial real estate lenders and investors eye new yield opportunities, the industrial outdoor storage (IOS) sector has emerged as an asset class with large-scale, long-term growth potential. The subset of industrial first began to take hold in commercial real estate circles in 2019 and the COVID-19 pandemic has only accelerated demand for it as companies seek out more space to keep up with rising e-commerce orders.” (Commercial Observer)
  5. Microsoft Tells Workers to Prepare to Return to the Office “The company has long said it would embrace a hybrid work environment, with most employees able to work from home up to 50 percent of the time. In a Monday morning blog post focused on its headquarters near Seattle, Chris Capossela, an executive, said that starting Feb. 28, ‘employees will have 30 days to make adjustments to their routines and adopt the working preferences they’ve agreed upon with their managers.’” (The New York Times)
  6. The Biggest Threat to Manhattan Office Market Isn’t Remote Work “The biggest threat to the Manhattan office market is … Remote work? Yes, to a degree. Even as the world clicks over into the third year of the coronavirus pandemic, well over half of the office space in Midtown, Midtown South and Downtown sits empty most workdays, according to Kastle Systems, a proptech firm that tracks office swipe-ins at buildings.” (Commercial Observer)
  7. Thinking Inside the Box: Developers Rush to Create More Warehouse Space “Players in infill markets are getting creative as vacancies approach zero and demand for industrial real estate intensifies.” (The Real Deal)
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