CNBC looks at the best and worst cities for retirees. Rising interest rates are undermining affordable housing development efforts, according to the Wall Street Journal. These are among today’s must reads from around the commercial real estate
industry.
- Startups Turning Office Market Upside Down by Offering Short-Term Leases “A startup real-estate technology firm is looking to take on shared office company WeWork Cos in one of hottest new areas of commercial real estate: providing short-term office space to some of the biggest U.S. companies. Convene launched nine years ago as a firm that provided conference, meeting and training spaces. Now it is starting to provide short-term, more flexible workspaces as well.” (Wall Street Journal, subscription required)
- The Best and Worst U.S. Cities for Retirement “If you're looking for an affordable retirement, the city in which you decide to live should be an important factor. Personal finance website WalletHub recently ranked 182 U.S. cities based on their affordability, activities, quality of life and health care. Each city was graded on a 100-point scale, with 100 representing the highest score. Here are the cities that fared best.” (CNBC)
- McDonald’s and Franchisees to Spend $6 Billion to Build, Upgrade Restaurants “McDonald's, the nation's largest burger chain, said Tuesday the company and its franchisees plan to invest $448 million in Texas on the construction and modernization of 840 McDonald's restaurants this year and next. The cash infusion will impact most McDonald's restaurants in Texas and is part of a broader effort by the Chicago-based company and its franchisees to invest $6 billion to modernize most U.S. restaurants by 2020.” (Dallas Morning News)
- Rising Interest Rates Are Another Blow to Affordable Housing Market “Rising interest rates are undermining efforts to build more affordable housing, creating larger funding gaps for an industry already grappling with cuts in government subsidies and rising construction costs. This year’s climb in borrowing costs—coupled with expectations that they will keep rising—has driven down the amount of debt used to fund affordable housing deals, said Michael Novogradac, managing partner of Novogradac & Co., an accounting firm that specializes in affordable housing.” (Wall Street Journal, subscription required)
- Get Ready for a Big Fight Over California’s Property Taxes in 2020 “A big battle over property taxes in California is shaping up for the 2020 ballot. Supporters of a bid to increase taxes on commercial land announced Tuesday they’ve collected more than 860,000 signatures to force a vote on the issue in two years. ‘This is a defining moment for California,’ Fred Blackwell, CEO of the San Francisco Foundation, said in a statement. ‘Closing the commercial property tax loopholes is important to our state.’” (Los Angeles Times)
- Homebuilder Sentiment Falls to the Lowest Point in Almost a Year as Affordability Becomes a Bigger Worry “U.S. homebuilders are slowly losing confidence in their business. A monthly index of builder sentiment fell one point to 67 in August, the lowest level since September 2017. Sentiment was unchanged from one year ago, according to the National Association of Home Builders. Anything above 50 is considered positive sentiment, and the index hit a recent high of 74 last December. Yet there are signs of growing concern among builders.” (CNBC)
- State Sues Trump Tower Over Chicago River Pollution “The state of Illinois is taking the Trump Organization to court, alleging it is polluting the Chicago River without a permit. A lawsuit filed yesterday by the Illinois attorney general's office alleges that the Trump International Hotel & Tower's state permit to discharge a limited amount of pollutant into the river has lapsed, but that it has continued to operate for almost a year without the state's permission to run that water management system, known as a cooling water intake structure.” (Crain’s Chicago Business)
- Value of NYC Construction Starts Rises 44 Percent in 2018: Dodge “New York City construction activity was up nearly 50 percent in the first half of 2018 even as it slid slightly nationwide, according to data released by Dodge Data & Analytics. After a slowdown last year, the value of construction starts in the New York metropolitan area shot up 44 percent to $16.14 billion, from $11.19 billion in the first half of 2017. New York City’s big construction boom was driven largely by an 83 percent jump in commercial development, Dodge numbers show.” (Commercial Observer)
- Industrial Drives PGIM Real Estate Finance Lending “PGIM Real Estate Finance, the commercial mortgage business of PGIM, reports that it originated $8.1 billion in commercial mortgage financing in the first half of 2018, much of it propelled by the industrial asset class with lending up 33% compared to the same period last year. PGIM Real Estate Finance expects this trajectory to continue.” (GlobeSt.com)
- Repurposing Real Estate Is a Growing Opportunity for DFW “As a growing population moves to DFW, making room for the millennials and the new tech hires may not mean spilling over to the suburbs. It may lie in repurposing the real estate that’s already here, according a recent study. In a study co-sponsored by the CCIM Institute and Alabama Center for Real Estate, CCIM Institute chief economist K.C. Conway examined adaptive reuse in metropolitan areas across the country. He found that the trend of repurposing makes up 1 or 2 percent of commercial real estate, and he expects it to double in the next five years.” (D Magazine)
