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Mogul Minute 06/24/2016
June 24 | 2016

Mogul Minute

Here at RealtyMogul.com, we keep our finger on the pulse of all things real estate, from finance to technology and everything in between. We make a point of sharing interesting articles and think pieces among RealtyMogul.com staff to help our team stay abreast of the market, and ahead of the curve.

So we thought, why not share some of these insights with you, our partners?

Got A Minute? Here’s some recommended reading with key points from the content:

U.K. Backs Brexit as Cameron Resigns After Historic Rupture (Bloomberg)

  • The UK has voted to leave the EU and Prime Minister David Cameron has resigned in response. The vote was 52% leave and 48% stay. A striking quote from the article, “above all, the outcome shows just how disillusioned Western voters have become with the political establishment for failing to deliver more inclusive economic growth in the era of globalization.”
  • Both the pound and European stocks are down substantially after the news this morning.
  • Boris Johnson, the former mayor of London who led the “Out” vote, is the heavy favorite to take over for Cameron. Among those considered to be in the running, Justice Secretary Gove and Home Secretary Theresa May.

Corporations Move to Urban Downtowns in Pursuit of Young Talent (National Real Estate Investor)

  • More and more corporations are moving out of the suburbs and into downtown locations to attract Millennials. Some of the more recent examples include: McDonald’s move to Chicago, Expedia moving to Seattle, and GE moving to Boston. Even some of those firms already located in CBD’s are looking for better space such as Quest Diagnostics in New Jersey and Big Lots in Columbus.

Macy’s Reveals CEO Succession Plans (Commericial Property Executive)

  • Macy's has promoted current president Jeff Gennette to CEO in the first quarter of 2017. The current CEO, Terry Lundgren, will stay on as executive chairman and work in conjunction with Gennette. As we have previously discussed, Macy’s has fallen upon hard times and has recently announced the closing of 36 more stores.

Federal Reserve says U.S. stocks have gotten expensive (MarketWatch)

  • In an often seen occurrence, the Fed has weighed in on what they believe to be the overvaluation of stock values. “Forward price-to-earnings ratios for equities have increased to a level well above their median of the past three decades. Although equity valuations do not appear to be rich relative to Treasury yields, equity prices are vulnerable to rises in term premiums to more normal levels, especially if a reversion was not motivated by positive news about economic growth.”
  • Quincy Krosby, market strategist at Prudential financial disagrees that the Fed should be weighing in on the undervaluation/overvaluation of the stock market – “what investors want to hear is whether companies’ earnings will start improving. Whether the Fed decides that stocks are undervalued or overvalued does not have an impact on prices.”
  • By another measure, the cyclically adjusted Shiller PE, says the price-to-earnings ratio (adjusted for inflation over the past 10 years) is at its highest levels since 2007.

5 Retail Predictions, Trends to Watch in 2017 (Globestreet)

  • Ami Ziff, national director of retail with Time Equities, with 5 predictions for 2017:
    • Retailers will remain in expansion mode with the vacancy rate down to its lowest since 2007.
    • People will always want to have interactive experiences while shopping for certain goods despite the rise in online retail.
    • Off Price is now Always in Season – discounter retailers will continue to see success.
    • Retailers Doing More with Less – anticipation of retailers shrinking their physical real estate.
    • Crowded Investment Sales Landscape.

 

Tim Ednoff Headshot
Written by , Associate - Commercial Equity at RealtyMogul.com

Tim evaluates investment opportunities as well as performs due diligence and writes content for various equity and debt transactions. Outside of the office, Tim is an avid sneaker collector, a passionate health and fitness advocate, and a dedicated podcast enthusiast.

 
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