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National Cheat Sheet: Insurance rates expected to spike nationwide after hurricanes Harvey & Irma, Amazon looks to spend $5B on a second HQ … & more
Insurance rates expected to spike nationwide after hurricanes Harvey and Irma
In addition to the dramatic flooding in Texas after Hurricane Harvey and the potential devastation of Florida from Hurricane Irma, the rest of the country could be hit with a spike in insurance rates after the storms have passed, experts say. Rates are almost certain to climb for federally backed flood insurance. “This could end up being a one-two punch to the industry,” said Kevin Madden, director of the New York City real estate practice for the insurance broker Aon. [TRD]
Amazon to spend $5B on a second headquarters somewhere in North America
Amazon is ordering up a second home. The Seattle-based online giant announced this week that it is looking to build another headquarters somewhere in North America. Amazon plans to spend around $5 billion on a new corporate campus to house as many as 50,000 employees. CEO Jeff Bezos said the new digs will “be a full equal” to Amazon’s still-growing presence in Seattle, where 40,000 employees already occupy 8.1 million square feet of office space. [Seattle Times]
Wells Fargo buys $51B in mortgage servicing rights from Seneca
Wells Fargo announced this week that it had purchased the servicing rights for approximately $51 billion in mortgages from Seneca Mortgage Investment. “Mortgage servicing is an attractive, core business for Wells Fargo, and this transaction provides an opportunity for us to strategically enhance our servicing portfolio,” said Franklin Codel, head of consumer lending for Wells Fargo. The deal is expected to close in the fourth quarter of this year. [Housing Wire]
Want to attract new tenants? Let them have free WiFi
One of the most popular amenities offered at new multifamily developments is free WiFi, a survey by Multifamily Design + Construction found. Nearly 60 percent said they had included complimentary wireless internet in residential developments. Individually metered utilities and conference rooms tied as the second most popular amenities in such buildings. [TRD]
Nation’s malls need to adapt to survive
Malls, once the cathedrals of American retail, need to shift their business strategy if they are to survive in the digital age, a new CBRE report finds. The department stores that have been the anchor tenants in malls since their inception are too susceptible to competition from e-commerce, the report concluded. “There is a growing trend of mall owners buying out department store leases and redeveloping the space into restaurants and specialty stores,” CBRE wrote. [TRD]
Despite new rules, CMBS market grew in 2017
In the first seven months of 2017, $47.4 billion in new Commercial Mortgage Backed Securities debt was issued, according to Commercial Mortgage Alert, up from $37.9 billion the year before. When a new rule was instituted in December requiring issuers to keep 5 percent of bonds on their books, real estate finance types had worried the regulation would hurt the market. [TRD]
Major Market Highlights
As Hurricane Irma threatens Florida, residents and real estate players prepare
With a massive storm heading for South Florida, the region is not only preparing for high winds and lashing rain, but the industry is racing to lock down deals before Hurricane Irma comes ashore.“Contracts perhaps closing after Irma are now trying to close before,” said Mike Pappas CEO of Keyes Company, a major residential brokerage in the region. Expected to reach the mainland by the weekend, the now Category 4 storm could be the first major hurricane to hit South Florida in more than a decade. [TRD Miami]
After months of fighting in NYC, Realogy cuts deal with Zillow
Major real estate brokerages in New York City have been zealously defending their turf against tech-driven disruptor, Zillow Group-owned Streeteasy. But this week Realogy, the parent company of three the Corcoran Group, Citi Habitats and Sotheby’s International Realty, announced that it had inked a deal with Zillow, paving the way for agents at those firms to again post rental listings on StreetEasy. Corcoran, Citi Habitats and Sotheby’s agents won’t pay to post rental listings, but Realogy will under terms of a “long-term, multi-year” deal. [TRD]
Miami’s Porsche Design Tower becomes a hurricane shelter – for exotic cars
The 60-story Sunny Isles Porsche Design Tower is built to withstand Hurricane Irma’s winds, so it will house up to 10 of Lamborghini Miami’s $5 million-and-up cars, including a $5 million Ferrari and a $15 million Pagani Zonda, developer Gil Dezer told The Real Deal. [TRD]
Houston-area reconstruction after Harvey could be hurt by labor shortage
As the flood waters recede from Hurricane Harvey, Houston-area residents could find hundreds of thousands of homes that need to be repaired or rebuilt. But contracting firms are worried about finding enough workers with proper training and certifications. “There is not enough skilled labor to meet this challenge today, immediately,” Texas Association of Builders executive director Scott Norman said. [Houston Chronicle]
Denver housing market slumps through the summer
The once red-hot housing market in Denver metro area appears to be cooling. For the second month in a row, single-family home sales and median home prices fell, a Denver Metro Association of Realtors report found. While home prices are still up 7.9 percent for the year, the median price fell 2.4 percent from July to August. [Denver Post]