After raising the possibility earlier this year, La Quinta Holdings has announced it will split into two stand-alone public companies, one of which will focus on the real estate business and the other on franchise and management activities. The real estate arm will be called CorePoint Lodging and will become a REIT with a portfolio of 316 hotels and 40,500 rooms; the transaction will be taxable both to the corporation and its shareholders.
The Federal Reserve said it will start the process of reducing the size of its bond portfolio "relatively soon" if the current rate of moderate economic growth holds up. The central bank left interest rates unchanged.
A transition from the London Interbank Offered Rate to an alternative that is more reliable will begin by the end of 2021, says Andrew Bailey, CEO of the UK Financial Conduct Authority. "We do not think we will complete the journey to transaction-based benchmarks if markets continue to rely on Libor in its current form," Bailey said.
Despite slower growth so far this year, REITs remain worthy investments for portfolios due to the income they produce, writes Genia Turanova. In addition, some sectors are performing exceptionally well, such as data-center REITs and mortgage REITs, both of which are generating good returns.
Equity Commonwealth has sold two office properties totaling 1.76 million square feet in Philadelphia for $328 million, or $186 per square foot. The sale of the buildings, Centre Square East and West Towers, to Nightingale Properties is the city's largest-ever single-asset office sale in terms of size, according to CBRE.
Marriott International has signed agreements with the Bernstein Cos. and Boston Properties for its new corporate headquarters and flagship Marriott Hotel in downtown Bethesda, Md., making its previously announced move official. The hotel company signed a letter of intent with the developers to build the $600 million campus earlier this year.
Financial hubs in such cities as Denver, Phoenix, Salt Lake City and Dallas are attracting professionals eager for lower housing costs and companies interested in securing cheaper rents. Denver, in particular, is attracting companies such as Charles Schwab and Partners Group AG, and is currently competing for 12 new projects.
Retail REITs' fundamentals were strong in 2016 and remain solid despite the wave of store closings, says Calvin Schnure, senior vice president of research and economic analysis at NAREIT. Ross Smotrich, managing director and senior research analyst with Barclays Capital, says, "News of all the store closures leads investors to assume retail is dead, but that's not accurate."
The Department of Labor has invited public comment on a rule proposed by the Obama administration to extend mandatory overtime pay to workers earning a basic salary of $47,000 from the current maximum threshold of $23,660. The call is seen as the first step in a move by the Trump administration to block or significantly amend the rule, which has been criticized by industry bodies.
Treasury Secretary Steven Mnuchin has told a Senate Appropriations subcommittee that prompt action is needed to raise the debt limit. "Right now effectively, as opposed to borrowing in the market at lower rates, we're borrowing and making our trust funds whole at slightly higher rates, so there is a real cost to doing that," Mnuchin said. "There's also an implied cost of uncertainty into the market. And the longer we wait, that more that uncertainty will be."
