- What Record Rent Growth Looks Like: Pawning Belongings, Going Hungry, Fearful Of Tomorrow “The median monthly asking rent in the U.S. surpassed $2K for the first time in May, an annual increase of 15%, according to Redfin. Exorbitant increases at a time of skyrocketing inflation mean many renters are falling behind, especially as the rate of rent growth outpaces changes to income. Since 1986, there has been a 282% increase in nationwide rent, while the federal minimum wage has only increased 116%, according to homelessness prevention organization Family Promise.” (Bisnow)
- Return-to-work wars: Execs at Citi, Manpower, and McKinsey on why they're embracing remote and hybrid work “More than two years into the pandemic, organizations are grappling with whether to reopen workplaces. A new Microsoft report says that about half of the leaders it surveyed are looking to end remote work in the next year…. Insider spoke with 10 industry leaders who shared why they are embracing remote and hybrid work for the foreseeable future.” (Insider)
- Kohl’s says a real estate sale is on the table after scrapping deal talks “The retailer on Friday announced it terminated deal talks with The Vitamin Shoppe owner Franchise Group, confirming CNBC’s reporting from Thursday evening. Instead, Kohl’s said, it will continue to operate as a standalone public company.” (CNBC)
- Chicago worst-hit by surge of construction delays on industrial projects “Challenges on all fronts, from finding and retaining labor, obtaining materials at rising prices amid record inflation, supply chain disruptions and growing community opposition toward building, are contributing to the slowdown, a Newmark report said.” (The Real Deal)
- Will Pillar Two Block Multinationals’ Real Estate Rollovers?—Part 1 “In foreign countries with a tax roll-over provision, similar carryover tax basis—and a corresponding immediate financial accounting gain recognition and deferred tax liability provision—may also be applicable. When the replacement land and building are sold and not replaced, it triggers any remaining deferred tax liability recorded with respect to the replacement building and any liability with respect to the replacement land.” (Bloomberg Tax)
- Asymmetrical risks? How the CRE industry is reacting to the Fed’s inflation-fighting moves “But we do not need to reach into the distant past for evidence of this. In early June, consumer sentiment reached its lowest level on record. Yet, empirical research also demonstrates that unless inflation reaches very high levels, it tends to have a negligible cost and impact on economic growth. Our own humble contribution to this research reaffirms this position.” (REJournals.com)
- Brooklyn Looks Immune to Wider Industrial Market Uncertainty “Two decades of residential rezonings of some of the borough’s largest industrial neighborhoods, coupled with the conversion of industrial space for other commercial uses and subdivision of large parcels into smaller lots, has made finding large sites — suitable for large distribution facilities — extremely challenging.” (Commercial Observer)
- Seritage Puts 38 Properties Up for Sale As It Tries To Pay Off Warren Buffett, Reshape Portfolio “Seritage Growth Properties is in a race to sell off dozens of properties over the next year and pay off $640 million in debt to billionaire Warren Buffett, a move that would buy the former real estate investment trust more time to turn itself around.” (CoStar)
- Digital Realty CEO refutes Chanos short claims, says data center "demand has never been stronger" “The CEO of the second-largest data center real estate investment trust (REIT) in the world has defended his company against claims that the sector is set to decline into irrelevance. Digital Realty's Bill Stein hit back against suggestions by short-seller Jim Chanos that value was not accruing to "bricks-and-mortar legacy data centers," and was instead going to cloud providers.” (DCD)
- SFR Rent Growth Slows But Outpacing Multifamily “Second, SFR housing falling vacancy is a result of higher than usual SFR resident retention. The May retention level was 83.2%. SFR renters moved less than usual during the early COVID-19 period. Higher retention and lower turnover are part of the appeal of SFRs and a necessity for operational success. Multifamily's retention levels were also higher than usual in Q2 2020 but are still much lower than SFRs.” (CBRE)
- NY AG blasts Cushman & Wakefield for blowing Trump-probe subpoena deadline; asks judge to 'enforce' compliance “New York Attorney General Letitia James on Friday asked a Manhattan judge to force Donald Trump's longtime appraisers, Cushman & Wakefield, to immediately turn over thousands of overdue documents that she has demanded for her investigation of the Trump Organization.” (Insider)
- Luxury Retail Along Manhattan’s Madison Avenue Shifts from Rebounding to Thriving “During the pandemic’s lockdown phases, retail vacancy rose dramatically, even in the most desirable areas. Now, post-pandemic, we see spaces along Madison Avenue getting filled by new and established luxury retailers ready to make a statement.” (REBusiness Online)
- 97 Percent of U.S. Hotels Are Short-Staffed “As the summer travel season gets into full swing, hotels are being hit hard by America’s labor shortage. The American Hotel and Lodging Association (ALHA) — which represents 80 percent of all franchised hotels with 3.8 million rooms across the country — said that 97 percent of its members reported a staffing shortage last month.” (Commercial Observer)
- No Deal in West Coast Port Labor Negotiations as Deadline Passes “The International Longshore and Warehouse Union (ILWU) and employers represented by the Pacific Maritime Association (PMA), which includes port terminals and shipping lines, have been negotiating a new labor deal since May 10.” (gCaptain)
- Biden Administration Weighs Move to Trim Mortgage Costs as Home Prices Rise “President Biden’s affordability push has so far largely focused on steps to ease constraints on the supply of new homes, a primary driver of a rapid run-up in home prices in recent years. Steps to ease costs on certain borrowers could help modestly but more meaningful steps to address affordability are likely to come only from increased supply, housing experts said.” (The Wall Street Journal)
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