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Seven Must Reads for the CRE Industry Today (March 8, 2022)

The real estate industry could see fewer mergers and acquisitions this year, reports The Wall Street Journal. Apartment rents in New York City are rising rapidly, according to The New York Times. These are among today’s must reads from around the commercial real estate industry.

  1. Fast Pace of Real Estate M&A Activity Seen Cooling This Year “Publicly traded real-estate investors in the U.S. enjoyed a record-breaking year for mergers in 2021, but the war in Ukraine and soaring inflation threaten to slow that deal making in the second half of the year. Real-estate investment trust mergers and acquisitions as well as stock mergers totaled $140 billion last year, an all-time high, according to Jones Lang LaSalle, a professional services company specializing in commercial real estate.” (The Wall Street Journal)
  2. Rents Are Roaring Back in New York City “After the pandemic swept in two years ago, rents in New York and several other major American cities plunged, as fear of the virus and the lockdown of urban economies prompted waves of people to leave. But with the virus receding and a sense of normal life slowly returning, many big cities are regaining their appeal, helping fuel a nationwide surge in housing costs and pushing some residents out of homes they can no longer afford.” (The New York Times)
  3. Kohl’s, Facing Activist Pressure, Plans to Open Smaller Shops and Aims to Make Sephora a $2 Billion Business “Kohl’s on Monday issued fresh long-term financial targets, including growing sales by a low-single-digit percentage annually, as the retailer faces pressure from activists to consider a sale and unlock value from its real estate. Ahead of a planned virtual meeting with investors, Kohl’s announced that it aims to grow its Sephora business to more than $2 billion in annual sales.” (CNBC)
  4. Knight Frank, Savills Pull Operations from Russia as War Prompts CRE Firms to Rethink Footprint “Top CRE firms are pulling out of Russia or considering it strongly.” (Bisnow)
  5. NYC Hit Record Life Science Leasing in 2021 “New York City’s commercial spaces traded sports coats for lab coats as leasing in the life sciences shattered records in 2021. Tenants in the sector leased 433,000 square feet in 2021, according to CBRE data reported by the New York Business Journal. The record amount marked nearly triple leasing in the sector from 2020 levels and exceeded all of the leases in the sector combined in the previous seven years.” (The Real Deal)
  6. Kroger to Grow Last Mile Network “The Kroger Co. continues to expand its e-commerce offerings through the growth of its hub-and-spoke network with the announcement of the planned addition of three new last-mile centers that will total 187,000 square feet. The company will open a spoke facility in Austin, Texas, and San Antonio, as well as one in Birmingham, Ala., marking the entrée into three new territories.” (Commercial Property Executive)
  7. How Do You Measure the Social in Real Estate ESG? “The hardest part of focusing on social impacts in ESG is the lack of consensus on what to measure. There’s a hodgepodge of factors that could be considered, everything from racial equity and diversity, public health and healthy buildings, supply chain forced labor, to community environmental justice. No company can suport all of these important causes so they often have to choose just one to peg their performance to.” (Propomodo)
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