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JUNE 8, 2019

Top Stories

Finance & Investment

Bank Exposure Risk on CRE Lending Creeps Higher

Given the depth of the last financial crisis, it is no surprise that observers are keeping a close eye on weaknesses that could negatively impact the banking sector and capital markets in general. “Overall, the system continues to function, as it should, safely providing liquidity,” says CrediFi CEO Ely Razin. “However, there are pockets of concern already and more may form, if and when there is a downturn.”

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Alternative Properties

As Rent Growth Declines in the Self-Storage Sector, Developers Slow Down New Projects

Stagnant rents are finally dampening the enthusiasm of developers to build new properties. After years of relentless activity, they are breaking ground on fewer self-storage facilities this year. That should help cool down the competition for tenants, and eventually allow rents to grow again.

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Retail

Can Sears Survive by Opening Smaller-Format Stores?

Outside of the court battles, the former retail giant is working to revitalize and reinvent the Sears brand and try to make it relevant in today’s changing retail environment. That likely won’t be an easy task as bricks-and-mortar retail continues to flail. In fact, 7,215 store closures have already been announced by U.S. retailers in 2019, according to global market research firm Coresight Research.

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Analysis

Retail

Investment in Power Centers Spikes, In Spite of Troubles in the Larger Retail Sector

Investment sales involving power centers increased by 30.4 percent in the first quarter of 2019, marking it the most active first quarter since 2016, according to research from real estate services firm JLL. “Power centers have seen a decline in transaction volume over the last couple of years. The subsector is transitioning from a low, tempered amount of activity to a bit of a spike, but it’s still all relative,” says Arielle Einhorn, research manager with JLL Investor Research. 

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Multifamily

Apartment Building Owners Try to Grapple with Tougher Energy Use Requirements

New York City is just the latest municipality to raise the bar for apartment investors and developers on sustainability requirements. Local governments across the U.S. are raising the requirements on what developers have to do to be allowed to build their projects. Advocates for sustainable development also call for tougher building codes, including “improvements” to the International Energy Conservation Code (IECC), a national model energy code that many cities and states use as the basis for their own local codes.

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Finance & Investment

Hospitality Properties Trust’s Acquisition of the Spirit MTA Portfolio Underscores the Appeal of the Net Lease Sector

On June 3, Newton, Mass.-based Hospitality Properties Trust said it was expanding outside its foundation of hotels and travel centers by scooping up a 774-property portfolio of net lease retail properties for $2.4 billion. The seller is Dallas-based Spirit MTA REIT. The 774 Spirit properties include quick-service and casual-dining restaurants, movie theaters, health and fitness centers, specialty retail stores, automotive parts and services shops, and other service-oriented and necessity-based businesses. 

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Commentary

Finance & Investment

How Foreign Investors Can Deal with Higher Risks in a Down-turning Market

An investor not fully knowledgeable of the market—both locally, regionally, and nationally—may end up paying above top dollar just as a market decline hits, which could be disastrous. Foreign investors often take a much longer view in terms of the expected ROI, making them attractive partners for U.S. developers. However, given the situation, foreign investors need to be acutely aware of some of the pitfalls facing those who are willing to invest in the United States. Recent examples provide some perspective.

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Gallery

Office

The Top Flex Office Space Markets

One of the biggest trends in the office sector over the past few years has been the proliferation of flexible space options and co-working operators. A recent CBRE MarketFlash report took a close look at the dynamics in th flexible office space universe, based on the 30 markets tracked by the real estate services firm. 

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NREI Wire

Blackstone Plans $6.8 Billion European Urban Warehouse Unit

The private equity firm would like to pull its European warehouse properties to create a new company.

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