Urbanexus Update - Issue #79
H. Pike Oliver compiles this weekly update of real estate and community development news. Please note that some links may lead to items that are behind a paywall.
Real estate investment and strategy
Investing directly in CRE Deals vs REITs
Investing in publicly-traded REITs today no longer serves as the same type of safety hedge as it did in the early 2000s, says Jon Needell. H/T to Ed McGovern for finding this.
Howard Hughes Corp. to sell $2B in real estate assets
The Howard Hughes Corp. (NYSE: HHC), a mixed-use and residential real estate developer and operator with projects across the country, has announced a series of changes. The Dallas-based firm plans to focus on its master-planned communities in Texas, Hawaii, New York, Maryland and Nevada and sell its non-core assets valued at roughly $2 billion over the next 12 to 18 months. HHC expects to net $600 million in cash proceeds from the sales.
Retail
A mall with a ski hill, a theme park and 40 water slides
American Dream, the most expensive U.S. mall ever built, has opened in New Jersey. The industry is watching closely to see if its entertainment-heavy formula could be the future of the larger shopping malls.
Office
SoftBank and WeWork’s rise and fall
At a WeWork executive offsite meeting last year, Adam Neumann tried to fire up his lieutenants by invoking the company’s largest benefactor, SoftBank founder Masayoshi Son.
The troubled coworking company is the largest office tenant in New York City. What happens to the city’s commercial real estate market if it goes under? In the near-term— not much. In the longer run it could change the way co-working space is delivered.
Residential
Largest Chicago condo since the Great Recession
Developers plan to start building 1000M, a Helmut Jahn-designed condominium tower that would be the tallest building in the iconic row of skyscrapers on Michigan Avenue across from Grant Park.
Facebook and affordable housing
Facebook (NASDAQ: FB) has committed $1 billion and will partner with the State of California to build 20,000 affordable workforce- and low-income housing units over the next 10 years. Many of the units will serve first responders and teachers who can’t afford to live in the communities they serve, according to a press release from Facebook.
Hospitality
US hotel transactions have slowed
America’s hotel sector has been operating at peak levels for the past three years as an expanding economy has readily absorbed accelerated supply growth in most markets. Notwithstanding rising salary and wage rates and slowing revenue growth, operators have controlled costs sufficiently to achieve GOP margins at their highest levels since the 1960s. Nonetheless, the near‐term lodging outlook appears choppy and transactions have slowed and the bid/ask gap has widened during the past year.
Planning and design
Organic urbanism vs new urbanism
Organic urbanism supports what people want in their neighborhood and strives to preserve, protect, and rejuvenate the existing housing stock of diverse sizes, styles, and conditions that is conducive to a mix of incomes and lifestyles. In contrast advocates of new urbanism, particularly their allies in the planning profession, oppose such housing and favor density to support public transit.
Environment
Cleanest U.S. cities are progressing toward zero-carbon
The cleanest cities provide powerful lessons in how to transition to clean energy, while growing a city economy and providing better services to citizens. All of these cities improved their renewable energy generation, energy-efficient buildings, government, equitable communities and transportation. The success of these cities, and the ranking of all major U.S. cities is detailed by American Council for an Energy-Efficient Economy (ACEEE).