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Last Week This Morning with Miles Bloom (Episode 1)



Episode: 1 (Secret Test Pilot)
Title: 99 Problems and an Acquisition Ain't One
Filmed: April 23rd, 2015
For the last few weeks, Bisnow's New York office has been working on a top secret project. The concept is simple: create a short video recap of last week's most important national real estate stories, and then distribute to our audience of CRE professionals all over North America. Here is our first rough draft. Make sure to tell us what you think by emailing or share your thoughts on twitter using #BisnowTV.
Video Recap:
Hello everyone, I’m Miles Bloom, coming to you from Bisnow Headquarters in New York, and welcome to BisnowTV.  Today marks the beginning of Bisnow’s newest news offering, a mercifully short video recap of the week’s biggest storylines for the CRE industry nationwide. 

On Tuesday, Cushman & Wakefield released its U.S. Economic Outlook and Office Forecast for 2015-2017.  The big take-away? The Economic Environment over the next three years will be the best it’s been for office real estate in over a decade.  Now, Cushman did more than just put out the report, as they also took action based on those findings.  According to an article Wednesday in Crain’s Chicago Business, Cushman & Wakefield will be acquiring J.F. McKinney & Company, a Chicago-based office leasing powerhouse that handles marquis properties like the 100-story John Hancock building and the 4+MM SQ FT Merchandise Mart.  This is already Cushman’s second major acquisition this year, as they announced in January the acquisition of Massey Knakal, which was one of New York’s top investment sales shops.

Now Cushman & Wakefield isn’t the only big name making acquisitions in the last week, as several other big splashes were felt around the country.  Reuters reported on Sunday that industrial REIT Prologis would be acquiring fellow powerhouse KTR Capital and its holdings for a reported $5.9B. Reuters also reported on Wednesday that, not to be left out, Canadian commercial giant Brookfield Properties is acquiring Associated Estate Realty (a REIT headquartered outside Cleveland, OH) in a deal valued at approximately $2.5B.  Keeping the M&A funk alive, Savills Studley was busy this week, as the Silicon Valley business journal reported on Wednesday that they have acquired Silicon Valley tenant rep Cooper Brady to build a presence in the epicenter of tech start-ups.  But Savills Studley wasn’t done there, as the firm also announced on Wednesday that they have acquired Vertical Integration, a Florida-based firm that will serve to enhance their Occupier Services platform.

As if the big week of major mergers and acquisitions wasn’t enough of an indicator of a booming market, first quarter figures show that REITs across the board have a lot to be happy about as the US REIT index saw Q1 gains of 4.75%, a favorable increase compared to the roughly 1% bump in the S&P.  The Real Deal reported on Wednesday that major New York REITs in particular enjoyed a strong start to the year, with most outperforming both the S&P and the MSCI US REIT index by a substantial margin.  Boston Properties led the way to start the year, with a total return of 9.67%. 

Now, for all of you investment junkies out there, Laurence Fink, the Chairman and CEO of BlackRock, said on Tuesday during a speech in Singapore on Tuesday that gold, which has served for centuries as an instrument for storing of wealth has “lost its luster”.  He went on to say that now “there’s other mechanisms in which you can store wealth that are inflation-adjusted.”  Looking for examples?  Perfect, because Fink gave us two, saying that the two greatest stores of wealth internationally are, wait for it, contemporary art and apartments in Manhattan, Vancouver, and London.

With that tidbit from the head of the world’s largest asset manager in mind, let’s take a moment to dive into the big stories in the residential world.  Bloomberg reported this week that sales of existing homes shot up in Q1 to their highest levels since September 2013.  The average length of time homes are spending on the open market has decreased to an average of 52 days nationally, and home values across the board have appreciated.  Clearly this is great news for sellers, but what about those out there looking for homes?

Short answer, it’s not so peachy.  The Washington Post reported on Tuesday that the last few decades have brought a huge increase in the number of single-person residences, which has cranked up demand and forced folks into solutions ranging from the classic “living with roomates” to the more contemporary “embracing of the concept of micro-units.”  Contributing to that trend, a video put out by this week suggested that the three groups that will most directly affect the real estate industry (and the pricing it experiences) are aging baby-boomers, millenials, and immigrants.  All three are populations are growing, so we can likely expect demand to continue to outpace supply, especially in major urban metros.

I’m right up against time here, so that’s going to be all for now.  I’m Miles Bloom, and I’ll be here waiting in your inbox next week.