10 Must Reads for the CRE Industry Today (March 10, 2016)

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1. $6 Billion Real Estate Bet Eases Pain for Giant Oil Fund “The world's biggest sovereign wealth fund has just reported its worst year of investment returns since 2011. Norway's $876 billion oil fund made 2.7% in 2015, half the average it has achieved over the past decade. Real estate was its best play last year, generating 10%. Stocks were next with 3.8% and bonds lagged with 0.3%.” (KTVZ.com)
2. Why Global Cities Face a Real Estate Affordability Challenge—and How to Solve It “The study, by global real estate consultants Savills, compares the annual combined cost of residential and office rentals for an employee across 20 cities in five continents. London emerges as the world’s most expensive city, with combined live and work costs of $112,800 per annum—more than double those of Sydney, Los Angeles or Chicago. New York is second with $111,300 and Hong Kong third with $103,200. San Francisco, ranks sixth after Paris and Tokyo.” (Forbes)
3. More and More People are Renting. Thank the Suburbs “Renting is less and less confined to the high rises of Manhattan or brick-apartment blocks of downtown Chicago and spreading further into the single-family homes of the American suburbs. Nearly 22 million more people were renting in metropolitan areas around the U.S. in 2014 than in 2006 and much of that increase was driven by the growth in suburban renters, according to a new report from New York University’s Furman Center, which studies real-estate and urban policy, and Capital One.” (Wall Street Journal)
4. Tishman Speyer Buys Sites for a Second Hudson Yards Office Tower “Tishman Speyer has assembled a site in the Hudson Yards area of Manhattan where it plans to build a second office tower, giving the company more prominence in a section of New York that’s primed for growth. The development firm acquired 434-444 11th Ave. and 550 W. 37th St., adjacent properties where it intends to construct a 1.3 million-square-foot (121,000-square-meter) skyscraper, according to an e-mailed statement Wednesday. The price wasn’t disclosed.” (Bloomberg)
5. Jehovah’s Witnesses’ Brooklyn Properties See Price Surge “The Jehovah’s Witnesses have had such a tremendous response to their Brooklyn land and office offerings that they have now hired Bob Knakal of Cushman & Wakefield to vet the wheat from the chaff. Additionally, with ‘dozens’ of offers received from both locals and global players, sources say the bidders are also now expecting a winnowing second round. Because of the interest and coming second round, pricing is now expected to be well over the $300 million mark, more akin to last year’s expected pricing.” (New York Post)
6. Why a Major Home Builder is Giving Up on San Francisco “Just how bubbly is the San Francisco real estate market? Home builder Hovnanian announced Wednesday it would exit the market, calling it ‘frothy’ and saying that prices for land were ‘lofty, almost speculative.’ Ara Hovnanian, the company’s CEO, also noted that the company was a ‘relatively small’ player in the San Francisco market and the company wanted to refocus its efforts on other markets.” (MarketWatch)
7. Talking Construction, Chris Christie and Affordable Housing with Richard Anderson “When Richard Anderson took over as president the New York Building Congress in 1994, construction spending in the city stood at around $10 billion. Even with inflation, that’s paltry next to the $40 billion that’s expected to be spent this year between residential, commercial, entertainment and public works funding. There’s probably no better time to leave the construction advocacy organization than on such a high note, which Mr. Anderson, 75, will voluntarily do later this year.” (Commercial Observer)
8. Portillo-Backed Firm Pays $159 Million for Retail Buildings “A new Chicago venture whose investors include hot dog baron Dick Portillo paid $139 million for 48 single-tenant retail buildings, including seven in the Chicago area. BlueRoad Ventures said it bought the portfolio last month from Brauvin Net Lease, a privately held real estate investment trust managed by Chicago-based Brauvin Real Estate. It was the first acquisition for BlueRoad, an asset management and investment firm launched in the fall, said Managing Partner Tim Farrell.” (Crain’s Chicago Business)
9. Zara Looks to Online Growth as it Cuts Store Sales Forecast “Inditex, the world’s biggest clothing retailer, said the pace of store openings would slow as part of a broader trend of sales moving online. Inditex will focus store openings on flagship sites in prime locations like the three-floor Zara store opened in a 19th century building in Manhattan’s trendy SoHo district last week. It will aim for 6 to 8 percent growth in new sales space in coming years, below previous guidance of 8 to 10 percent.” (Fortune)
10. This One Square Mile of Downtown Miami Saw at Least $585M in Investment from NYC “New York investors interested in Miami are making a beeline for one square mile in Downtown. Over the past two years, New Yorkers have spent at least $586.5 million on property concentrated between the Miami River to Northeast Sixth Street and east of I-95 to Biscayne Bayin, according to research done by Mika Mattingly, a broker with Sterling Equity Commercial. In total, New York buyers acquired at least 1.28 million square feet of buildings and at least 1.1 million square feet of land in the area.” (The Real Deal)