Caesars to develop more property after bankruptcy | Expert: Some REITs will do better as interest rates rise | Fed survey shows lenders becoming more cautious about CRE
May 19, 2017
The daily source on REITs and real estate investment
After Caesars Entertainment Operating Co. emerges from bankruptcy this year, its parent wants to makes use of more than 90 Las Vegas acres it owns, including property fronting Caesars Palace. "We have plans to basically develop all of that very valuable center-strip property as soon as we emerge," says CEO Mark Frissora.
REITs that are most easily able to raise rents, such as self-storage companies, are best positioned for a rising interest rate environment, says Scott Crowe, chief investment strategist at CenterSquare Investment Management. Health care and data-center REITs are also sectors he advises investors to watch.
US banks are continuing to tighten lending to commercial properties, especially in the multifamily asset class, according to a Federal Reserve survey of financial institutions. Banks also note that demand for capital is weakening among some borrowers.
First-quarter issuance for long-term US bonds increased 13.1%, year-on-year, to $1.9 trillion, according to data from the Securities Industry and Financial Markets
Association's Research Quarterly. "Issuance increased quarter-over-quarter across all asset classes except for municipal, mortgage-related and asset-backed securities. Year-over-year growth was positive in all asset classes except municipal debt," SIFMA said in a statement.
As Apple continues to book strong sales growth at its retail stores it is still making plans for new locations, even as other brick-and-mortar retailers struggle in the digital age. Apple now operates about 500 global stores, and they're finding success with a strategy that stresses experiences, said Apple retail chief Angela Ahrendts.
Ralph Lauren went outside the world of designer fashion to recruit former Procter & Gamble executive Patrice Louvet as its new CEO, a move that's part of a growing trend in luxury retail. "They [consumer-products firms] teach branding and direct-to-consumer sales, especially direct-to-millennial-consumers, and that is what everyone wants," said Threadstone Advisors founder William S. Susman.
Critics and supporters of the Labor Department's fiduciary rule stood by their opposing views on the measure during a hearing of a subcommittee of the House Education and Workforce Committee. Bradford Campbell, a partner at Drinker Biddle & Reath, said an Investment Company Institute survey provided evidence of the harm the rule will cause, while Micah Hauptman, financial-services counsel at the Consumer Federation of America, said the institute didn't provide any facts to support its claims.
Treasury Secretary Steven Mnuchin expects Fannie Mae and Freddie Mac to continue making dividend payments to the Treasury Department despite comments from Federal Housing Finance Agency Director Mel Watt that he may suspend them to allow the housing giants to retain enough capital to operate safely. The firm's zero-capital targets were intended to force Congress to take action on housing reform.
The Trump administration has no plans to break up big banks, Treasury Secretary Steven Mnuchin told the Senate banking committee Thursday. Breaking up Wall Street's biggest banks would negatively affect liquidity and the economy, he said.
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