National Cheat Sheet: The Oracle of Omaha gambles on retail, Chinese investment in US industrial sector rises by 540% … & more

TRD New York /
Jun.June 30, 2017 04:48 PM

From left, Aaron Graf, CEO of LG Fairmont, and Warren Buffett. (credits: LG Fairmont, Huffington Post)

Warren Buffett invests in retail’s future

This week, Store Capital Corp. revealed that Warren Buffett’s Berkshire Hathaway bought a 9.8 percent stake in the investment trust, which largely specializes in single-tenant retail properties, like chain restaurants, veterinary offices and fitness centers. Buffett paid $377 million for his company’s stake, the Wall Street Journal reported. Store Capital is in 48 states with 1,750 locations and is valued at $5.5 billion. [TRD]

Study says Chinese investors increased spending on U.S. industrial real estate by 540 percent

In the wake of the e-commerce boom, Chinese investors are taking notice of the noise currently surrounding industrial real estate, according to a new report by on industrial capital markets by Avison Young. A massive $284.9M investment in industrial real estate was attributed to Chinese buyers in in Q1 2017, up from $5.2M for the same period the previous year. It’s a jump of 540 percent over a 12 month period. [Bisnow]

As interest rates rise and refinancings drop, lenders lower FICO score requirements

The FICO credit score required by lenders from borrowers to originate mortgage loans declined in April according to Urban Institute’s latest report. It stated that the increase in interest rates and the drop in refinance applications has caused lenders to soften their credit requirements. Since the housing crisis, the median FICO score has increased by 23 points and now stands at around 645, compared to the low 600s a decade ago. []

Worker shortage forces contractors to turn down work amid construction boom

With construction spending rising by 5.8 percent, or $359.5 billion, nationwide in early 2017, compared to the same time last year, construction companies are struggling to find enough workers to keep up with demand. In fact, according to the Wall Street Journal, one-third of contractors surveyed said that they have had to turn down work due to worker shortages. [TRD]

Housing prices continue to soar

Housing prices continued their unassailable ascent into the stratosphere in April, increasing by 5.5 percent nationally according to S&P Dow Jones and CoreLogic’s latest report. Seattle registered the biggest gain, 12.9 percent, followed by Portland and Dallas. []

Real estate data companies Costar and Xceligent trade insults and accusations in antitrust suit

Citing “an obvious abuse of power,” real estate data company Xceligent filed an antitrust lawsuit against competitor Costar. Xceligent claimed that Costar was stopping its users from sharing their data and is seeking monetary damages. In a statement about the countersuit, Costar, which filed a copyright infringement suit against Xceligent in December, accused the company of “industry scale theft.” [TRD]

E-commerce industrial sector generates $150M fund for Robinson Weeks

Robinson Weeks Partners has raised $150 million for a fund intended to target industrial real estate investment opportunities.“We see this e-commerce effect is really driving demand this development cycle,” president David Welch said. The Atlanta firm is led by industrial real estate vets Forrest Robinson and David Welch with long term build-to-suit developer Ray Weeks remaining as chairman. [Bisnow]

Major Market Highlights

Santa Monica votes to force full disclosure of hotel ownership

Fueled by Chinese insurance giant Anbang’s sizable strides in the American hospitality business, the Santa Monica City Council is taking measures to discourage further foreign investment in the sector. A vote to disclose hotel ownership followed complaints after Anbang spent $6.5 billion to purchase Blackstone’s Strategic Hotels and Resorts Inc., which included the Loews Santa Monica Beach Hotel. Anbang is currently converting New York’s Waldorf Astoria, which it purchased for $2 billion in 2014, into condos and local community groups fear a similar conversion of the Loews. [TRD]

Conjecture swirls on the effect lead generation could have on rockstar brokers

When a rookie agent landed the sale of a $17 million penthouse in Soho, New York City’s high-powered brokers started buzzing. Why? The lucky agent’s startup brokerage, LG Fairmont, had purchased their leads. The success of StreetEasy’s Premier Agent and Broker platforms is leading to intense debate regarding the possible effect this new style of marketing may have on the city’s established broker power houses. [TRD]

And now, StreetEasy takes aim at the NYC rental market

Following the victory with the Premier Agent and Premier Broker programs, StreetEasy has the rental market in its cross hairs. The site, which is owned by Zillow, has announced plans to charge agents $3 per day for each listing advertised. [TRD]

Miami takes a tough stance against Airbnb

South Florida doesn’t play when it comes to protecting its hotel industry from online home sharing companies like Airbnb and Home Away. Last year, Miami Beach raked in almost $1.6 million in fines, which start at $20,000 and double and triple for further violations.  Short-term rentals are only permitted in certain areas of the city, but the Miami-Dade County Commission is considering extending the ban to other areas, despite the considerable protestations of Airbnb. [TRD]

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