10 Must Reads for the CRE Industry Today (June 30, 2017)

Sycamore Partners plans to split Staples into three parts, reports MarketWatch. Amazon is planning to open a new office in Boston, according to the Boston Globe. These are among today’s must reads from around the commercial real estate industry.

1. Ten Best Cities for Global Real Estate Investors“And the best city in the world to invest in real estate is… Los Angeles. The City of Angels beat out London as the new hot spot for global real estate investors in the third annual Schroders Global Cities 30 Index, released on June 26.  Schroders is a London-based investment bank. For a city known more as a one-trick pony producing movie magic, Los Angeles is home to the well-respected colleges UCLA, USC and Pepperdine and start up tech companies are claiming their spot on the A-list. Snapchat, Pandora, eHarmony, Dollar Shave Club and Boingo Wireless are just some of the big names in tech that call LA and its beach ‘burbs their home.” (Forbes)
2. Sycamore Plans to Split Staples Into Three to Help Fund the Takeover “Sycamore Partners intends to split Staples Inc. into three to help fund its $6.9 billion purchase of the office-supply seller, in another sign of the challenges facing the retail industry. The plan calls for Staples to be divided into three separately financed entities, according to people familiar with the matter: U.S. retail; Canadian retail; and corporate-supply businesses. The three groups will still remain under the same corporate umbrella.’ (MarketWatch)
3. Harvard Said to be Near Real Estate, Private Equity Fund Sale “Harvard Management Co., which oversees the $35.7 billion endowment, is in talks with Lexington Partners for stakes in venture capital and buyout funds, according to two people with knowledge of the matter. It also has a commitment to sell interests in real estate funds to Landmark Partners, said the people, who asked not to be identified because the discussions are private. Some additional buyers may be involved for parts of the deal, one of the people said.” (Bloomberg)
4. Lower Manhattan Rents Hit Peak as Revived Downtown Booms “Asking rents for office space in downtown New York hit a record high in May as construction of a new tower at the World Trade Center and the migration of firms to a revitalized Lower Manhattan helped lift rental rates, brokerage CBRE Group said on Thursday. The average rent landlords are seeking in downtown climbed to $62 a square foot last month when the addition of 1.7 million square feet at 3 World Trade Center is added to the office space available for lease, the brokerage said.” (Reuters)
5. WeWork Wants to Take its Brand Beyond its Own Real Estate “WeWork is best known for its dozens of hip office buildings around the world where startups and freelancers can rent out desks by the month and mingle with each other. But the company is also working to extend its brand beyond the walls of its own buildings. Companies ‘are now starting to ask if we can bring in the experience and environment to them,’WeWork product chief Dave Fano told Axios of the startup’s new office management services in an interview.” (Axios)
6. Amazon Reportedly Near Deal for Building in Fort Point “You can add Amazon to the list of companies beating a path to Fort Point. The e-commerce giant is finalizing a lease for a large office space at 253 Summer St., next to General Electric’s new corporate headquarters in a neighborhood that’s emerging as the epicenter of Boston’s tech economy. Amazon would take about 150,000 square feet in the historic yellow-brick former warehouse overlooking Fort Point Channel, according to sources familiar with the deal.” (Boston Globe)
7. The Latest Victim in the Retail Apocalypse? Outlet Malls “Et tu, outlet malls? After years of being seemingly insulated from the ills affecting department stores, the country’s 200-plus outlet malls are starting to show signs of strain. Tanger Factory Outlet Centers, which owns 43 centers in 22 states and is the largest publicly traded pure-play outlet operator in the US, is throwing off some warning signs, experts tell The Post.” (New York Post)
8. Massey Noncommittal on His C&W Future, Could Run for Mayor Again “On the day that he ended his campaign to replace Bill de Blasio as mayor of New York City, Cushman & Wakefield executive Paul Massey told Commercial Observer that he would not rule out running for office again while also casting doubt over his future with the commercial real estate brokerage giant.Massey announced today that he was calling off his bid for the Republican mayoral nomination, citing the “extraordinary” challenge of raising enough money to defeat an incumbent Democratic mayor, as CO reported earlier today.” (Commercial Observer)
9. Staples Investors Should Take the Money from Private Equity and Run “Is going private going to save Staples? I have my doubts, even though many believe that being acquired by a private-equity firm improves the odds that Staples  can survive in the cutthroat retail arena. My doubts trace to a recent study that found that companies undergoing a private-equity leveraged buyout don’t perform any better after going private than they did when they were publicly traded.” (Fortune)
10. San Antonio Lures Investors “San Antonio has a diversified economy and employment is growing in most industries. That has fueled demand for apartments, which is expected to remain high as the metro continues to add jobs and households at a rate above the national trend, and as more residents move south to avoid the growing cost of housing in Austin.” (Commercial Property Executive)