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10 Must Reads for the CRE Industry Today (November 9, 2018)

Federal Reserve keeps benchmark rates steady, reports Reuters. This holiday season could decide the fate of Barnes & Noble, according to CNBC. These are among today’s must reads from around the commercial real estate industry.

  1. Fed Holds Rates Steady, Says Economy Remains on Track “The U.S. Federal Reserve held interest rates steady on Thursday and said ongoing strong job gains and household spending had kept the economy on track. ‘The labor market has continued to strengthen and ... economic activity has been rising at a strong rate,’ the Fed said in its latest policy statement, leaving intact its plans to continue raising rates gradually.” (Reuters)
  2. This Holiday Season Could Seal Barnes & Nobles’ Fate as the Bookseller Considers Selling Itself “This holiday season could be the most crucial one of Barnes & Noble's history. Its sales have been in a decline for six years as the bookseller cedes market share to Amazon and consumers turn to their phones or portable tablets instead of books. There's been a revolving door in the retailer's C-suite, and activist investors have piled on. Now, Barnes & Noble is considering a sale of its business after receiving interest from a handful of parties, including its founder and executive chairman, Leonard Riggio, and reportedly, U.K. retailer W.H. Smith.” (CNBC)
  3. UBS Will Fight Expected U.S. Lawsuit Over Mortgage Securities “UBS Group AG will fight an expected civil complaint from the U.S. Department of Justice over its issuance, underwriting and sale of residential mortgage-backed securities before the financial crisis, the Swiss banking giant said Thursday. UBS has been informed by the Justice Department that the U.S. plans to file a complaint as soon as Thursday. ‘The DOJ’s claims aren’t supported by the facts or the law. UBS will contest any such complaint vigorously in the interest of its shareholders. UBS is confident in its legal position and has been fully prepared for some time to defend itself in court,’ the bank said.” (Wall Street Journal, subscription required)
  4. Brookfield Could Buy Back $40B in Shares Over Next Decade “Brookfield Asset Management expects to buy back as much as $40 billion in shares in the next decade. During a third-quarter earnings call on Thursday, the company said it expects to bring in $60 billion in the next 10 years. But the opportunities to spend the capital will likely be “outstripped” by the anticipated volume of cash, CEO Bruce Flatt said. Brookfield expects to spend roughly $10 billion in the next decade and will likely distribute the remaining $50 billion to shareholders.” (The Real Deal)
  5. Foreign Investor Burnout Hits Miami Real Estate “Florida real estate from a foreign perspective is concentrated on South Florida, with Miami, Fort Lauderdale, and West Palm Beach the main attractions.  The foreign buyer share to dollar volume of real estate sold there is nearly twice the national foreign buyer average of 10%. Foreign buyers, mainly from Canada and Brazil, purchased 52,000 properties, a 15% drop from the previous 12-month cycle.” (Forbes)
  6. Sears, In Bankruptcy, Is Set to Close 40 More Stores on Top of Those Previously Announced “With its latest batch of store closures, Sears appears to be making good on its goal to emerge from bankruptcy a vastly smaller company. The iconic retailer, which filed for Chapter 11 bankruptcy protection last month, said Thursday that it will shutter another 40 Sears and Kmart stores in February, on top of the 142 locations it previously announced would be closing by the end of this year.” (USA Today)
  7. Fed to Further Overhaul Stress-Testing Regime, Making It Easier for Banks to Pass “The Federal Reserve plans to broaden its plan to ease stress tests for the nation’s largest banks with a revised proposal that could reduce the chance banks fail the annual assessments. Fed Vice Chairman of Supervision Randal Quarles in a Friday speech said the agency was considering changes to an existing plan to revamp the stress tests, including making the test scenarios more consistent from year to year and giving firms their results before they wrap up shareholder return plans.” (Wall Street Journal, subscription required)
  8. Long Island City Has No Idea Where Amazon Would Fit “It was the lunch-hour rush at the Court Square Diner in New York’s Long Island City on Wednesday and co-owner Nick Kanellos pointed to the elevated subway tracks that rattle overhead as he fretted over the news that Amazon may build a major outpost in the neighborhood. Like many long-time inhabitants, he worries how this once-sleepy enclave in Queens would absorb the up to 25,000 people the online retail giant may employ here as it expands outside its Seattle home base.” (New York Post)
  9. Autonomous Vehicles and DFW Real Estate “If you do not believe an autonomous vehicle revolution is coming, just ask the heads of the world’s largest technology and automobile companies. They are investing billions to plan for a fundamental transformation in the way people use personal transportation. For example, Google’s Waymo subsidiary will offer commercial autonomous taxi service in Phoenix later this year, and General Motors will follow in selected markets in 2019.” (D Magazine)
  10. Thriving Tech Sector Revives Pittsburgh “Pittsburgh stands as a model for reinvention, having successfully shifted its economic base to education, health care, finance and, more recently, technology. The metro was a late joiner to the tech craze, but caught up rapidly. Although nobody would confuse it with Seattle, or even Austin, Pittsburgh is home to more than 1,600 technology firms. Google, IBM, Apple, Intel, Uber and Amazon are among the firms taking advantage of the skilled workforce produced by the metro’s 68 colleges and universities.” (Commercial Property Executive)
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