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Equity Office Daily Brief: February 20, 2017

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Daily Brief

February 20, 2017

  EquilityOffice

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Los Angeles Looks to Ban Major Real-Estate Developments

The Wall Street Journal

 

Voters in the second-largest U.S. city are considering a measure that could effectively halt major real-estate projects, the most extreme example yet of a revolt against development that is breaking out across the country. A boom in luxury development over the last...

 


Real Estate Is Latest Target for Would-Be Disrupters

The Wall Street Journal

 

A real-estate startup called Compass Inc. has hired hundreds of sales agents away from older rivals, collected $225 million from marquee investors and amassed a valuation of over $1 billion, all with the pitch that its software can make brokers more...

 


How the Drop in Oil Prices is Affecting Commercial Real Estate

National Real Estate Investor

 

When the price of oil plunged from a peak of $107 per barrel in June 2014 to a 12-year low of $26 per barrel in February 2016, prices at the pump began dropping, briefly reaching a low of $2.05 nationwide in...

 


Auto Maker to Race Away From Massive Campus

Los Angeles Business Journal

 

Toyota Motor North America Inc. has put its massive Torrance campus on the market, almost three years after announcing plans to relocate its North American headquarters to Texas. The 110-acre site at 19001 S. Western Ave. encompasses 2 million square feet of...

 



BLOG & ONLINE NEWS

 

Tishman Speyer aims to build in the Arts District

Bisnow

 

Another project is coming to the Arts District: an eight-story office building that would replace the current offices of Hyperloop One. Tishman Speyer, the same firm that owns New York's Rockefeller Center, is planning to build the office building at 2159 Bay St....

 


Trump's first 30 days: What he proposed, what he's accomplished and how it all impacts CRE

Bisnow

 

Even before he was sworn into office, President Donald Trump's plans to expand the economy by increasing job growth in a tight labor market, cutting corporate taxes, pulling back on financial regulations and raising infrastructure spending had garnered support from the business community. Thirty days into his...

 


The Ratkovich Recapitalizes The Alhambra with New Partners

RENTV.com

 

HFF has arranged the sale of and secured debt and equity placements on behalf of The Ratkovich Company to facilitate the recapitalization of The Alhambra, a 45-acre mixed-use urban community in the San Gabriel Valley city of Alhambra.  The Ratkovich Company will...

 

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Los Angeles Looks to Ban Major Real-Estate Developments

The Wall Street Journal

 

Voters in the second-largest U.S. city are considering a measure that could effectively halt major real-estate projects, the most extreme example yet of a revolt against development that is breaking out across the country.

A boom in luxury development over the last five years has transformed urban America, bringing young people, restaurants, retailers and jobs back to city centers.

But construction activity has tilted toward the high end. Many longtime residents have become resentful of new towers that cast shadows over their neighborhoods of single-family homes and push up rents. Average apartment rents nationwide have surged 26% since 2010, according to MPF Research, due in large part to strong demand after the housing crash.

Now some activists are pushing back with actions that threaten to grind housing production in some cities to a crawl.

The moves threaten to further constrict a tight supply of housing. Housing starts dropped 2.6% in January, the Commerce Department said Thursday. The number of single-family and multifamily starts per 1,000 households last month was about 36% below the 50-year average, according to Ralph McLaughlin, chief economist at Trulia.

In Los Angeles, residents in early March are set to vote on a ballot initiative that, if passed, would suspend for two years any development that requires a modification to the city’s existing planning rules. Currently, such modifications are routine for new developments.

Proponents of the measure say it would affect only about 5% of projects in the city.

“People feel the system is rigged,” said Michael Weinstein, president of the AIDS Healthcare Foundation, which has poured some $3.7 million into promoting the measure. “It’s all about billionaires getting what they want.”

Many of the patients served by the AIDS Healthcare Foundation are struggling with rising housing prices, he said.

New barriers to development are rising in major cities, either through new regulations—such as requirements that developments include affordable housing—or through increased community resistance.

San Francisco in June passed a ballot initiative that puts a 25% on-site affordable-housing requirement on most new residential buildings, which developers say will make many projects economically untenable. An independent analysis by the city’s Controller’s Office has recommended the requirement be reduced, based on the results of a soon-to-be-released feasibility study.

In Oregon, the Portland City Council in December unanimously passed a similar ordinance requiring buildings with 20 units or more to set aside 20% of units for affordable housing, although it also provides some concessions to developers like tax waivers.

In Boston, a plan by Mayor Marty Walsh to sell a city-owned parking garage to a developer to build one of the tallest residential buildings in the city is running up against stiff community opposition. Mr. Walsh said the sale would provide the city with a $153 million revenue boost, but opponents said the tower would violate a local ordinance by blocking sunlight over the Boston Common and Public Garden.

Despite complaints in Los Angeles about a deluge of development, housing construction now is at only a fraction of the rate of the mid-20th century, before strict zoning rules were put in place. From 1950 through 1959, about 250,000 units of new housing were added in the city of Los Angeles, according to an analysis of census data by advocacy group Abundant Housing LA. From 2010 to 2015, the figure was 25,000, though the city issued permits for about 50,000 units in roughly the same period.

Permits tend to lag behind completed units by a couple of years, and not all permitted units end up getting built.

In the middle of the last century, zoning regulations were such that there was enough capacity in the city to build housing for 10 million residents, according to David Waite, a local planning lawyer.

The adoption of “community plans” in the 1970s and a ballot initiative in the mid-1980s knocked that down to 4.5 million people, meaning Los Angeles is now almost at full capacity.

Thirty-five community plans, each covering a separate neighborhood, govern how much development can occur in each. Updating community plans requires determining the anticipated growth for a neighborhood over two decades, writing new land-use policies, getting community consensus for the changes and conducting an environmental-impact report.

The proposed rule up for vote in March, called the “Neighborhood Integrity Initiative” and referred to as Measure S, would require the city to update all community plans.

The full implications of Measure S are open to some interpretation. Some officials and developers say that, if passed, no development will be permitted until all the plans are updated, which they say could take a decade. Others say the moratorium will run for two years or until the plans are updated.

The Department for City Planning been trying for five years to update the community plan for Hollywood alone, but thus far has faced backlash from residents and a lawsuit.

Developers and city officials said Measure S would effectively impose a moratorium on everything from apartment development along transit corridors to office space for a flourishing tech community and even homeless shelters.

“This housing ban would drive investment out of L.A., kill jobs and stymie our efforts to move people off our streets,” Mayor Eric Garcetti said.

Both supporters and opponents said Measure S has a good chance of passing.

Updating the community plans will give citizens an opportunity to have input into the planning process, said Mr. Weinstein of the AIDS Healthcare Foundation.

Because the existing zoning rules make it difficult to build projects along major corridors, city officials often change rules for particular parcels.

For now, developers say the proposal is already having a chilling effect on new projects.

“L.A. has been redlined from an investment standpoint in housing until this uncertainty is known,” said Sean Burton, chief executive of CityView, a Los Angeles-based developer. He said the firm isn’t planning any new projects until after the vote.

-Laura Kusisto

Real Estate Is Latest Target for Would-Be Disrupters

The Wall Street Journal

 

A real-estate startup called Compass Inc. has hired hundreds of sales agents away from older rivals, collected $225 million from marquee investors and amassed a valuation of over $1 billion, all with the pitch that its software can make brokers more efficient.

Real-estate veterans say they’re baffled by how the four-year-old firm, active in only a few cities, could be considered one of the most valuable brokerages in the U.S.—a skepticism increasingly familiar to incumbents in old-line industries facing well-funded startups. Property brokerages typically command modest valuations on Wall Street, as they have few assets and limited growth prospects.

“If they’re worth $1 billion, I’m worth $10 billion,” said Arthur Zeckendorf, co-chairman of Terra Holdings LLC, a private company that owns New York brokerages such as Halstead Property and Brown Harris Stevens. The largest U.S. brokerage, Realogy Holdings Corp., whose brands include Century 21 and Coldwell Banker, has a market value of $3.8 billion—not including $3.3 billion in debt.

Having raised money from the likes of Goldman Sachs Group Inc., Thiel’s Founders Fund and mutual-fund manager Wellington Management, including a round in the fall that pushed its valuation over $1 billion, Compass now must show investors it can defy incumbents’ skepticism and deliver on its lofty aspirations.

Executives at the New York-based firm say it is poised for years of fast expansion, with its software eliminating much busy work for brokers. In theory, this allows them to show more homes and deliver more sales, which, in turn, serves as a recruiting tool—enabling the rapid growth sought by investors. The broader industry has been improving, with total U.S. residential-sale commissions hitting an estimated $70 billion last year, up 67% from 2010, according to data firm Real Facts.

“The way that we grow our revenue faster is we hire more agents—once they’re here, we help them grow their business faster,” said Compass co-founder and Chief Executive Robert Reffkin, a 37-year-old former Goldman Sachs banker whose mother is a Compass real-estate agent.

Real estate is just the latest industry to witness a disconnect in the perception and value of incumbents and fast-growing startups.

Home-reservation service Airbnb Inc. boasts a $30 billion valuation that is just 15% below the word’s biggest hotel company by room count, Marriott International Inc., and 50% more than of No. 2 Hilton Worldwide Holdings. Electric-car maker Tesla Inc. is fast approaching Ford Motor Co.’s $49 billion market value despite bringing in less than 7% of the Detroit giant’s revenue.

Like many of these high-valued startups, Compass pitches itself as more of a software company that specializes in property brokerage than as a traditional real-estate firm. Its tools allow brokers with a new listing to quickly send an email advertising their property to hundreds of other brokers, cutting the need to custom tailor the ads. Flyers for an open house can be created nearly automatically, and Compass says its data helps brokers suggest asking prices that better reflect the market than competing brokerages.

Brokers at the company in 2016 garnered an average 32% more commission revenue than in the prior year, when most were at different firms, a spokeswoman said.

Compass has tempted high-earning brokers and young agents from competitors in New York, Los Angeles and San Francisco to its team of about 1,300 brokers. Some were lured by incentives and stock options, though a spokeswoman said the majority got no such incentives.

Industry veterans say better software only goes so far in a business based on human interaction, particularly for brokers on the priciest homes who produce a disproportionate amount of revenue.

“Anyone who knows what they’re doing doesn’t need these technology platforms,” said Will Randow, an analyst at Citigroup Inc. who follows the sector. And several former Compass staffers and agents said the company’s technology, while well-designed, isn’t revolutionary.

Mr. Reffkin said Compass and its technology aren’t a great fit for all agents who, like in most firms, don’t get a salary and make all their money from commissions. Yet the company says it has a high retention rate—98% during 2016, not counting dismissals.

Compass’s annual revenue last year nearly tripled to $180 million, a spokeswoman said. Most of that money—which came from commissions on home sales—goes right back to individual brokers, as is the industry standard. Compass doesn’t disclose that percentage, but brokerages typically take about 30% of every commission.

For Compass’s investors, the company’s promise extends beyond sales commissions.

Todd Chaffee, a Compass board member and partner at Institutional Venture Partners, which has invested in Twitter Inc. and Snap, said Compass can eventually sell its software to smaller brokerages, and develop a large home-search product. That would give Compass some overlap with Zillow Group Inc. or Move Inc., two of the largest real-estate-listing websites. (Move is a subsidiary of News Corp., which also owns The Wall Street Journal.)

“We are fired up,” Mr. Chaffee said. “We’re planning on this thing being north of $20 billion.”

-Eliot Brown and Laura Kusisto

How the Drop in Oil Prices is Affecting Commercial Real Estate

National Real Estate Investor

 

When the price of oil plunged from a peak of $107 per barrel in June 2014 to a 12-year low of $26 per barrel in February 2016, prices at the pump began dropping, briefly reaching a low of $2.05 nationwide in January 2017.

This was good news for consumers, but it dealt a devastating blow to energy industry employment, with 350,000 workers laid off worldwide. Of those, 217,000 were in the United States, according to a University of Houston (UH) study.  Additionally, 44,000 Canadian energy workers have lost their jobs over the last two years, according to the Canadian Association of Petroleum Producers (CAPP).

Using the 2.5 economic impact multiplier of CAPP and Enform, the industry’s safety association, direct and indirect job losses associated with the drop in oil prices would amount to 542,500 in the United States and 110,000 in Canada. 

Muoio, executive vice president and chief economist at the online real estate marketplace Ten-X, explains that the declines in energy prices and jobs also has had a major impact on hotel stays and the oil-related financial sector in cities affected by massive layoffs, as well as industrial occupancy in some states with a heavy dependence on oil.

For example, industrial real estate in Houston, Dallas and Fort Worth experienced drops in occupancies as a result of oil companies cutting capital expenditures, which caused a slowdown in oil-field equipment manufacturing.

The decline in energy-related employment took the greatest toll on the office sector in Houston and Calgary, Canada, according to JLL’s Denver-based Senior Vice President Lindsey Brown, who specializes in representation of oil and gas tenants. He says that Houston has about 11 million sq. ft. of empty office space and Edmonton, Canada, has about 6 million sq. ft. resulting from the cutbacks.

The glut of unoccupied office space was compounded in these two markets as new deliveries of space have come at a time when demand has drastically fallen off, he explains. In many cases, construction of these projects had started during the oil boom prior to 2015.  

Brown points out that the office markets in Houston and Calgary have weathered the storm in part due to strong demand from government and healthcare sectors and growing tech sectors. That’s offset the drop in demand from the energy side. Additionally, very few energy-related companies vacating office space reneged on their leases, and companies that were struggling worked lease restructures with landlords. Consequently, the biggest impact on landlord revenues has been the loss of parking fees rather than any drops in rental income. However, the deluge of sublet space in these markets is competing with direct office leasing, he says, noting that while asking rates remain flat, sublet space is leasing at about half price.

JLL reported in the second quarter of 2016 that Houston had 11.7 million sq. ft. of sublet space, 77.8 percent from oil companies, and Calgary had 5.6 million sq. ft. of sublet space, 82.7 percent from oil companies.

Even so, Houston’s overall average, direct asking rent remained at $30.78 at the end of 2016, compared to $30.05 in 2014, according to a JLL’s year-end 2016 office report, which indicated that sublet space is starting to be absorbed.

“The worst of the hit is over,” contends Muoio, noting that the energy industry is starting to recover: production is picking up and companies are hiring contract workers. “When things were rock ’n’ rolling, energy companies developed fat, but are now operating in a leaner way,” he says, explaining that energy companies have adopted new technologies, industry-wide standard practices and other efficiencies that reduced production costs.  Operating efficiencies have enabled energy producers to make a profit at today’s oil price of $53.09 per barrel, compared to over $100 per barrel a few years ago, Muoio adds.

Meanwhile, many laid-off oil workers have moved on to other industries, just as construction workers did during the recession, and older workers are beginning to retire, says Brown, noting that the industry is now worried about a shortage in skilled workers.

A UH survey of 720 laid-off oil workers found that one in four have found jobs in other industries, and many more say they may follow and leave for good. Principal investigator Christiane Spitzmuller said in a Houston Chronicle report, this means that oil and gas companies may face labor shortages as oil prices rise, slowing the pace of drilling, as well as recovery of the energy industry and regional economies, like Houston.

Brown predicts that to attract talent oil companies will either move their headquarters or establish regional headquarters in cities attractive to millennials. This is because of a shift in the way today’s young professionals view the world, he notes, pointing out unlike previous generations of college grads who moved where the jobs were, millennials move to where they want to live and then find a job. According to Forbes, the 10 top cities most attractive to millennials are: Cambridge, Mass.; Arlington and Alexandria, Va.; San Francisco; Ann Arbor, Mich.; Minneapolis; Seattle; Denver; Washington, D.C.; and Austin.

-Patricia Kirk

Auto Maker to Race Away From Massive Campus

Los Angeles Business Journal

 

Toyota Motor North America Inc. has put its massive Torrance campus on the market, almost three years after announcing plans to relocate its North American headquarters to Texas.

The 110-acre site at 19001 S. Western Ave. encompasses 2 million square feet of office and industrial space in about 20 buildings, according to Jones Lang LaSalle, which holds the listing.

Toyota spokesman Aaron Fowles confirmed the property is on the market, saying a sale was in lines with the automaker’s transition plan outlined in 2014.

The company will start moving into its headquarters in Plano, Texas, this summer, where 1,600 people are working in a temporary office, he said. The workforce includes transplants from California as well as New York state and Kentucky, but more people are expected to join from Torrance later this year.

JLL is marketing the property without a listing price and the site’s estimated value could not immediately be verified. Toyota built or purchased the campus in stages beginning in the mid-1970s; the property includes two helipads, a diesel generator, and a hydrogen fuel cell power plant as well as a pool and tennis court.

JLL Managing Director Jeff Adkison, who is marketing the property with Senior Vice President Brendan McArthur, said he expects the site to attract bidders who appreciate the location’s proximity to major transit and trade hubs.

Various options are on the table for the Toyota site’s future, said CBRE Group Inc. Senior Vice President Bob Healey. A developer could sell off the buildings one by one, which was the case when Nissan Motor Co. sold its South Bay property a decade ago. Another option would be for an industrial developer to use the space for warehouses, given the sector’s extremely tight vacancy.

A corporation could potentially buy the property for its own use, Healey said, but that seems doubtful given its gigantic size and lack of demand in the Torrance office market, where vacancy is 22.4 percent. Residential development would depend on city approval.

All that uncertainty means the property’s value is difficult to gauge. But with Healey putting Torrance land values at $50 a square foot, the baseline would likely be $235 million.

Monday Moves

New York real estate investor Monday Properties is, for the first time, looking west. The firm is opening an L.A. office and plans to begin targeting acquisitions in Los Angeles and along the West Coast.

Monday has appointed Philip Cyburt, previously chief executive at Laurus Corp. in Century City, to lead the effort, and plans to draw on his background in office, multifamily, and hotel projects to find properties in those sectors that could benefit from an investment infusion.

Cyburt said he is aiming for Monday to have about $2 billion of assets under management in West Coast markets in the next five years, including Los Angeles; San Diego; Seattle; and Portland, Ore.

“I see a huge opportunity in the marketplace for good, stable, high-quality operators,” he said.

With Monday’s history, access to capital, and the infrastructure already in place to own and operate large properties, it might be able to buy several properties at once in a portfolio sale rather than pick them off individually, Cyburt added.

Anthony Westreich, Monday’s chief executive, said the company is aiming to satisfy the demand of capital partners who are looking for opportunity in supply-constrained markets, without necessarily paying top dollar. Although commercial values in Los Angeles are heating up, they remain lower than in other big-city markets.

“The L.A. market, and many of the submarkets within L.A., are not as far along in the bull market as some of the assets we see in Boston, New York, or San Francisco,” Westreich said.

Native Land

Seven years after launching, ad tech firm Nativo Inc. is nearly tripling its footprint in El Segundo. The native advertising specialist is taking 25,051 square feet at Pacific Corporate Towers as its headquarters, leaving behind a 9,000-square-foot space in the same building.

JLL’s Jason Fine represented Nativo, while CBRE’s Grafton Tanquary, John Ayoob, and Erin Grannis represented landlords General Motors Pension Trust and BlackRock Inc.

Nativo considered relocation options in El Segundo and Playa Vista before deciding to stay put, according to Fine.

Midwest Purchase

CBRE has hooked a new company as part of ongoing efforts to enhance its status as a big fish in the world of commercial real estate services. The downtown firm last week acquired Capstone Financial Solutions, a finance company that targets private and middle-market investors, for an undisclosed amount.

St. Louis-based Capstone can help CBRE expand its debt financing footprint across the Midwest, said Jeff Majewski, an executive managing director at CBRE.

Capstone also operates in Beverly Hills; Tampa, Fla.; Dallas; Indianapolis; and Kansas City, Mo. Its new L.A. base will be in CBRE’s Century City office.

CBRE said it also targeted Capstone for access to the firm’s loan-processing software.

The acquisition fits into CBRE’s strategy of snapping up smaller companies that align with its own services. The firm made four acquisitions last year and one in January.

“There’s no transaction that’s too small or too large, from an M&A standpoint, if it’s a strategic fit,” said Majewski.

-Daina Beth Solomon

Tishman Speyer aims to build in the Arts District

Bisnow

 

Another project is coming to the Arts District: an eight-story office building that would replace the current offices of Hyperloop One. Tishman Speyer, the same firm that owns New York's Rockefeller Center, is planning to build the office building at 2159 Bay St. The company paid $24.5M for the property last year, Curbed reports.

Hyperloop One, now based at the site, is one of the startups focused on developing hyperloop technology that would shoot passenger vehicles through a tube at high speeds. With a hyperloop, the commute between L.A. and San Francisco theoretically could be slashed to 35 minutes.

Plans for 2159 Bay St. could include a 222,189 SF building with office, retail and restaurant space. Nearby, Warner Music Group is planning to move into the renovated Ford Factory building in the same neighborhood.

-Karen Jordan

Trump's first 30 days: What he proposed, what he's accomplished and how it all impacts CRE

Bisnow

 

Even before he was sworn into office, President Donald Trump's plans to expand the economy by increasing job growth in a tight labor market, cutting corporate taxes, pulling back on financial regulations and raising infrastructure spending had garnered support from the business community.

Thirty days into his presidency, analysts are re-evaluating their economic outlook and businesses are speaking out against some of his executive actions, which Oxford Economist's head of U.S. macroeconomics, Gregory Daco, said has led to a highly volatile and uncertain business environment that could discourage economic growth and lead to market corrections.

“I think there’s been somewhat of a repositioning from the business community that started with the immigration ban that's a bit broader than that,” Daco said. “Essentially you’re seeing businesses come out more publicly and voice opposition to policies considered anti-growth.”

Here are several polices the president prioritized within his first 30 days in office and their potential impact on the economy, jobs and commercial real estate. 

Foreign Investment In Commercial PropertyOne policy that is still causing a stir is the executive order Trump signed Jan. 27 that temporarily banned travel into the U.S. for immigrants and refugees from seven different Muslim-dominated Middle Eastern countries.

Though only enacted for little more than a week before being halted in response to federal court decisions and undergoing further review, Daco said there has been a noticeable shift in relations between the Trump administration and businesses.

“While most U.S. companies had so far shunned the limelight for fear of being targeted by presidential actions, many U.S. conglomerates expressed their concerns and general opposition to this new immigration stance … The concern is that this ban is a first step towards much more stringent immigration rules that would limit foreign entry into the United States, and thus cut the economy off important sources of revenues from labor, education and tourism.”

Real estate attorney Ed Mermelstein said he has observed a slowdown in commercial real estate investment coming from Middle Eastern investors following Trump’s ban, adding many institutional investors remain cautious as they await Trump’s next move and any revisions.

Mermelstein, a real estate attorney at RBM LLP and an international real estate lawyer at One & Only Realty Holding, said there also has been an uptick in capital injections from Russian investors into U.S. property markets. “It’s basically the opposite of what’s happening with Middle Eastern investors,” he said.

“Based on the transactions both within our legal office as well as in our brokerage we’ve seen a 100% pickup from our client base coming out of Russia. such a tremendous drop-off in the last two to three years because of sanctions — investors dropped off and there was huge discouragement ... significant political threats for anyone who invested in the U.S.”

But Mermelstein said since Trump’s Nov. 9 upset victory, there has been a pronounced change in the real estate dealings between Russia and the U.S. “Since the election took place a warming of relations between the U.S. and Russia … that has translated into deals,” he said.

Economic Vulnerabilities To Anti-Trade TalkIn an outline detailing his first 100 days in office, which Trump released at the end of October, one of the president's primary goals was to protect American workers by reworking trade deals that he said took jobs and money out of the country. In alignment with this plan, Trump pulled out of the Trans-Pacific Partnership treaty during his first week in office.

The deal involved 12 nations and was negotiated over the course of seven years by former President Barack Obama; it allowed for minimal tariffs and other trade benefits for all of the countries involved. Some experts said the president's movement away from trade deals could lead to uncertainty for multinational companies and foreign investors.

“The prospects for growth from deregulation and expected tax cuts has buoyed the mood of everybody, including the corporations. However, the anti-trade talk that will lead to a trade skirmish, especially with our closest neighbors and trade partners, is a serious cause for concern,” said Rajeev Dhawan, Georgia State University/J.

Mack Robinson College of Business director of economic forecasting. Similarly, Trump signed an executive order within his first week calling for a reworking of NAFTA, the North American Free Trade Agreement that the U.S. has been in since 1994 and that allows for the flow of goods between the U.S., Canada and Mexico without high taxes and tariffs.

Trump has labeled it the “worst trade deal in history,” claiming it has stolen millions of U.S. jobs. These claims hold some truth, but the economic implications of withdrawing could be brutal, experts said, as millions of American workers rely on trade between these three nations. Dhawan said canceling trade deals could carry implications for the 10-year bond rate.

Should America embrace anti-trade policies, it could cause foreign investors to back away from the market, leading to a rise in long-term bond yields and thereby boosting mortgage rates, Dhawan said. “That disruption has dangers for residential and commercial construction,” he said. “Trade rhetoric is also not good for the industrial and warehousing part of the real estate market, where the market has been hot. These skirmishes can cool that activity in a hurry.”

Mexican Border Wall: A Myriad Of ChallengesMexico-U.S. relations have become strained as the president’s push to build a $22B wall along America’s southern border is ruffling feathers. Trump has said Congress should fund the initial costs to build the wall, claiming Mexico will pick up the bill at a later date — but Mexican officials said that will not happen.

The president has proposed a 20% tax on all Mexican imports to the U.S. to make up for the costs, which has many American-based multinational corporations worried about their cross-border businesses. Texas, Arizona, Michigan, New Mexico and Kentucky are the five local economies that would suffer the most, as these states have the highest percentage of exports sent to Mexico, according to a recent report from WalletHub.

The concern for CRE goes beyond spending on the wall and its economic implications, centering on the challenge of a tighter border and what it means for the workforce. The construction industry has been facing an array of challenges, including rising costs and a lack of qualified talent in the tight labor pool.

There is already massive competition in the industry as oil and gas producers lure as many workers as they can with much higher wages. Couple that with the costs of construction materials and that a large number of construction workers are undocumented, and there are clearly challenges for the industry.

CRE Execs Boost Bets On Infrastructure SpendingExperts are forecasting a mixed outlook this year as gross domestic product, inflation and interest rates are all poised to increase, and the industry is betting on Trump’s plans to boost infrastructure spending.  

Private equity funds and REITs in particular are looking beyond the primary commercial property sectors to alternative options like infrastructure in search of returns because most sectors (particularly hotel and office) are maturing, and rising interest rates are expected to compress cap rates.

The majority of CRE execs that participated in a recent Altus Group survey overwhelmingly named infrastructure as a safe bet this year, with Trump’s plans to invest $1 trillion in projects throughout the U.S., Altus Group director of research Chuck DiRocco said. Trump also tapped longtime real estate moguls Richard LeFrak and Steve Roth to oversee his infrastructure agenda.

“This infusion of capital and more spending in the infrastructure arena sounds fantastic, but there’s obviously a lot of red tape to get through to get these things passed and where we need it,” DiRocco said. “But if they can build on infrastructure and ease regulations, I think we need that revival and that development.”

-Champaign Williams

The Ratkovich Recapitalizes The Alhambra with New Partners

RENTV.com

 

HFF has arranged the sale of and secured debt and equity placements on behalf of The Ratkovich Company to facilitate the recapitalization of The Alhambra, a 45-acre mixed-use urban community in the San Gabriel Valley city of Alhambra. 

The Ratkovich Company will maintain a stake in the property with new partners, ELITE International Investment Fund and Future Land Holdings. Additionally, the new ownership group has obtained $119.5 mil in financing from a national lender for the payment in full of the existing CMBS loan on the property. 

The Ratkovich Company purchased the site in December 1999 and completed a successful $56 mil renovation to protect, enhance and expand the campus into a truly integrated urban community. The recapitalization comes on the heels of two recent transactions, which brings the The Alhambra to nearly 75 percent leased: 

-The County of Los Angeles Parks and Recreation Division will move its new department headquarters into 55.6k sf of office space at the property -The University of Southern California’s Keck School of Medicine will expand into an additional 22.5k sf to enhance their USC Care program. 

The Alhambra is LEED Gold certified and centrally positioned several miles east of downtown Los Angeles and south of Pasadena. 

The HFF investment sales, debt and equity team involved in this transaction included John Crump, Michael Leggett and Bill Fishel. HFF was also involved sale/recapitalization and financing of The Alhambra in 2006. 

-Staff


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Please contact us with any comments or questions at questions@spamdex.co.uk. Spam Archive is a non-profit library of thousands of spam email messages sent to a single email address. A number of far-sighted people have been saving all their spam and have put it online. This is a valuable resource for anyone writing Bayesian filters. The Spam Archive is building a digital library of Internet spam. Your use of the Archive is subject to the Archive's Terms of Use. All emails viewed are copyright of the respected companies or corporations. Thanks to Benedict Sykes for assisting with tech problems and Google Indexing, ta Ben.

Our inspiration is the "Internet Archive" USA. "Libraries exist to preserve society's cultural artefacts and to provide access to them. If libraries are to continue to foster education and scholarship in this era of digital technology, it's essential for them to extend those functions into the digital world." This is our library of unsolicited emails from around the world. See https://archive.org. Spamdex is in no way associated though. Supporters and members of http://spam.abuse.net Helping rid the internet of spam, one email at a time. Working with Inernet Aware to improve user knowlegde on keeping safe online. Many thanks to all our supporters including Vanilla Circus for providing SEO advice and other content syndication help | Link to us | Terms | Privacy | Cookies | Complaints | Copyright | Spam emails / ICO | Spam images | Sitemap | All hosting and cloud migration by Cloudworks.

Important: Users take note, this is Spamdex - The Spam Archive for the internet. Some of the pages indexed could contain offensive language or contain fraudulent offers. If an offer looks too good to be true it probably is! Please tread, carefully, all of the links should be fine. Clicking I agree means you agree to our terms and conditions. We cannot be held responsible etc etc.

The Spam Archive - Chronicling spam emails into readable web records

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Spamdex - The Spam Archive Located in London, SW19 8AE. Phone: 08000 0514541.