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Six Must Reads for the CRE Industry Today (March 15, 2022)

Private equity giant KKR raised $17 billion for its new Global Infrastructure Investor IV fund, reports MarketWatch. Hollywood hotel projects come under scrutiny for how they were financed, according to Los Angeles Times. These are among today’s must reads from around the commercial real estate industry.

  1. KKR Raises $17 Billion for Latest Infrastructure Fund “KKR & Co. Inc. said Monday it drew in $17 billion in commitments for KKR Global Infrastructure Investors IV. The fund will make global infrastructure investments, with a focus on OECD countries in North America and Western Europe. Brandon Freiman, head of North American infrastructure at KKR and Vincent Policard, co-head of European infrastructure are leading the investment effort. KKR is investing $1 billion of capital in the fund from its balance sheet, affiliates, and employee commitments.” (MarketWatch)
  2. Hollywood Hotels Scrutinized for Financing Under Visa Program: ‘Not Fair,’ Critics Say “In an aging Hollywood neighborhood known for its dive bars, pawn shops and tattoo parlors, three luxury hotels and a private events center opened over the last five years, with the help of millions of dollars from Chinese investors. The developments — boutique hotels with rooftop pools and hip nightclubs — represented new life for a gritty area a few blocks from Hollywood’s fabled Walk of Fame. They are now mired in a dispute involving a powerful labor union and 16 members of Congress who have asked for a federal inquiry into the project’s financing.” (Los Angeles Times)
  3. How to Analyze New York Land Sales for a Modern Market “When it comes to land in Manhattan, generally, they ain’t making any more of it, and, today, we are seeing significant changes in the land sales market. Over the decades, we have seen tremendous swings in land sales volumes and values. During the mid-1980s, the top Manhattan land sales maxed out at around $125 per buildable square foot.” (Commercial Observer)
  4. The Direct-to-Consumer Craze Is Slamming into Reality “A gloomy confluence of rising Facebook ad prices, worsening ad measurement, soaring shipping costs, newly-sober public markets, and smaller-than-anticipated customer bases are dealing DTC companies a harsh blow. A Big Technology analysis of public DTC companies with market caps of more than $800 million found nearly every one of these companies are dealing with revenue contraction, shrinking margins, runaway losses, or a combination of all three.” (CNBC)
  5. JPMorgan Rolls Back COVID Precautions Including Masking and Mandatory Testing as U.S. Cases Drop “JPMorgan Chase on Monday told its U.S. employees that the bank was rolling back several coronavirus precautions as cases continue to drop. Wearing a mask at corporate buildings will be “completely voluntary” for workers starting today, regardless of their vaccination status, the bank said in the memo. Next month, the bank will stop mandatory testing for unvaccinated workers and will open up hiring to the unvaccinated, it added.” (CNBC)
  6. Why Buying Million-Dollar Digital Real Estate Does Not Make Sense “Digital real estate is the hottest thing in town at the moment. Last year, the sales of digital land topped $500 million on the fourth biggest platforms, and there were multiple million-dollar digital real estate deals in, for example, Decentraland, Axie Infinity, or The Sandbox. With $85 million in sales in January this year, we can expect 2022 to be a record year for digital real estate.” (Marker Medium)
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