ABRAHAM GULKOWITZabe@gulkowitz.com917-402-9039

2017 issue 4February 26, 2017

Turning the Corner? The equity and credit markets are roaring, and even the Federal Reserve’s clear signals on the need to raise rates have not checked the rallies. Thiscontrasts with earlier episodes recently when even a hint of moving off an extreme easing posture resulted in eruptions in markets. Investors are evenincreasing their bets on a European recovery and rethinking emerging markets as well. Some of this market liveliness is founded on hard evidence. Afteryears of weak, irregular growth, evidence of a steadier recovery has taken hold across much of the global economy. Surveys show business activity at a six-year high in the Eurozone. UK markets have shrugged off the threat of Brexit. China carefully dodges financial accidents; its ongoing growth, though reducedfrom boom years, continues to propel other markets. But most of all, the key basis of optimism has been Donald Trump’s promise of higher growth, lowercorporate taxes and lighter regulation. The new Treasury secretary asserted this past Thursday that a “very significant” tax reform could raise growth above 3per cent by next year. This would come after years of subpar growth in the U.S. Any such acceleration might be accompanied by a return to corporate pricingpower, with a lift to corporate profits. One should not forget that there are obstacles to all these developments. Even overseas… there are a long string ofseemingly impossible problems. China is struggling to contain capital flight. China faces a demographic time bomb (see headline below). Europe faces aseries of nerve-racking elections that may yet challenge the very nature of the Eurozone. The UK’s resilience will be tested as tough Brexit play out. Andbelligerent countries have elevated risk concerns in many regions. Your head may be spinning with all these developments, in DC and around the globe butmarkets — which supposedly hate uncertainty — have roared ahead.

Weak yen helping hundreds of companies…

China's Stable Growth Reflects Stimulus Not SustainabilityChina's strong macroeconomic performance remains an important rating strength, but the continuation of policy settings that prioritize short-term growth targets is becoming a more significant risk to medium-term macroeconomic stability.

China is considering forcing steel and aluminumproducers to cut more output, banning coal in oneof the country's top ports and shutting somefertilizer and drug plants as Beijing intensifies itswar on smog, a draft policy document shows.

Oil fell after an OPEC report showing high compliance with lastyear's landmark production-cut deal underwhelmed investors whilesigns of rising U.S. crude output continued to weigh on prices.Worst Gasoline Glut in 27 Years Could Be Oil Rally’s NemesisStorage levels swelled - the highest in EIA records dating to 1990

Ford Motor Co plans to invest $1 billion over thenext five years in tech startup Argo AI to help theDetroit automaker reach its goal of producing aself‐driving vehicle for commercial ride sharingfleets by 2021

Lower US tax receipts may crimp spending plansHouse Republicans seek tobundle a border tax with lowertaxation, higher spending andreducing the deficit

Italy, along with certain other 'Club Med' nations, has passed the point of no returnin terms of big government, demographic decline, and societal dependency...

Fed to raise rates 50bp ?? 

The German two-year debt yields fell to -0.96% onFriday, the lowest level on record, amid rising concernsabout political stability across European countries.

Dutch Parliament To Debate Leaving The Eurozone

Chinese authorities are lookingat ways to encourage peopleto have more children, lessthan 18 months after droppingthe country’s contentious one-child policy in a bid to boostbirth rates and stave off ademographic decline.

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February 26, 2017

In This Issue

Headlines and data appearing in The Punch Line came from widely available publications including national and international newspapers, trade journals, economic and industrial bulletins and news websites.

• Engines of GrowthWeak world trade and severe geopolitical risks, along with high debtlevels and policy limitations, still cloud the global economic outlookDespite extensive and massive easing, most of the global economystill faces woefully inadequate growth prospects and difficult policyoptions. The U.S. stands alone in the shift in monetary policy and theimprovement in job markets. Very obvious financial vulnerabilitiesand serious geopolitical concerns are aggravating the uncertainty.And let’s not forget that many of the challenges are not fleeting, andmany cannot be resolved easily or quickly (pg 5)

• Dislocation, Dislocation (pg 6)

• The Likelihood of Unlikely Events… (pg 7)

• The Market Roar… (pg 8)

• Households… (pg 9)

• You Can’t Handle the Truth ! (pg 10)

• How Do You Figure? (pg 11)

• Credit… (pg 12)

• Pumping Iron (pg 13)

• The DNA of Business… (pg 14)

• Real Estate and Construction… (pg 15)

• More Real Estate (pg 16)

• Will Life Ever be the Same? (pg 17)

• Turning the Corner?The equity and credit markets are roaring, and even the Federal Reserve’sclear signals on the need to raise rates have not checked the rallies. Thiscontrasts with earlier episodes recently when even a hint of moving off anextreme easing posture resulted in eruptions in markets. Investors are evenincreasing their bets on a European recovery and rethinking emergingmarkets as well. Some of this market liveliness is founded on hard evidence.After years of weak, irregular growth, evidence of a steadier recovery hastaken hold across much of the global economy. Surveys show businessactivity at a six-year high in the Eurozone. UK markets have shrugged off thethreat of Brexit. China carefully dodges financial accidents; its ongoinggrowth, though reduced from boom years, continues to propel other markets.But most of all, the key basis of optimism has been Donald Trump’s promiseof higher growth, lower corporate taxes and lighter regulation. The newTreasury secretary asserted this past Thursday that a “very significant” taxreform could raise growth above 3 per cent by next year. This would comeafter years of subpar growth in the U.S. Any such acceleration might beaccompanied by a return to corporate pricing power, with a lift to corporateprofits. One should not forget that there are obstacles to all thesedevelopments. Even overseas… there are a long string of seeminglyimpossible problems. China is struggling to contain capital flight. China facesa demographic time bomb (see headline below). Europe faces a series ofnerve-racking elections that may yet challenge the very nature of theEurozone. The UK’s resilience will be tested as tough Brexit play out. Andbelligerent countries have elevated risk concerns in many regions. Your headmay be spinning with all these developments, in DC and around the globe butmarkets — which supposedly hate uncertainty — have roared ahead. (pg 1)

• In This Issue (pg 2)

• Alternative Facts (pg 3)

• The Future Ain’t … (pg 4)

Contact information:

Abraham Gulkowitz

phone: 917-402-9039 email:   abe@gulkowitz.com

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February 26, 2017

Alternative Facts- Careful Reading

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February 26, 2017

The Future Ain’tWhat It Used To Be

Fed Chair Yellen: 'Unwise' to wait too long to hike interest rates

U.S. Household Debts Climbed in 2016 by Most in a DecadeTotal household debt climbed by $226 billion in the final three months of 2016 to $12.6 trillion, driven by broad and steady increases in credit card debt, auto and student loans, and a surge of mortgage originations.

Foreign property investment by Chinese companiesplunged 84 per cent last month as Beijing’s capitalcontrols choked off foreign acquisitions. In an effort tocurb capital outflows and ease downward pressure on therenminbi, Chinese regulators have in recent monthsimposed restrictions on outbound dealmaking. The curbscame after outbound investment in non-financial assetssurged 44 per cent in 2016 to a record $170bn. Therestrictions have had an effect. Overall non-financialoutbound investment fell 36 per cent in January from ayear earlier to Rmb53bn ($7.7bn), the commerce ministrysaid yesterday, following a 39 per cent drop in December.The commerce ministry did not reveal actual figures forJanuary, but the sharp fall in foreign real estate investmentcomes after an overall 53 per cent surge last year to arecord $33bn, say separate data from JLL, a global realtor.

More US car owners behind on loan payments than at any time since 2009The car loan delinquency rate also remains lowerthan for other types of debt. Americans continue toprioritise car loan repayments, a sign of theimportance they attach to their vehicles. Bankers sayoverall credit quality remains good. The mortgagedelinquency rate is significantly higher than the carloans rate, at 2.28 per cent, although this remains lowby the historical standards of the home loan market.

Political turmoil in EU

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February 26, 2017

Engines of Growth…

Retail sales in Brazil fell 2.1 percent month-over-month in December of 2016, following adownwardly revised 1 percent rise in Novemberand in line with market expectations. It was thebiggest drop since January last year,

Weak yen helps to fuel Japanese growth

Escalating riots could benefit French National FrontPresident Francois Hollande is trying to calm protests sparked by a violent police arrest

Consumer gloom will limit retail recovery in BrazilDepressed demand may encourage rate cuts, but a rapid retail uptick is unlikely

US consumer prices increased 2.5% year‐on‐year inJanuary of 2017, following a 2.1% rise in Decemberand above market expectations of 2.4%. It is thehighest inflation rate since March of 2012 as energycost surged 10.8 percent.

Despite a surge in oil and gas drilling (up 8.5% MoM), US Industrial Production tumbled 0.3% MoM - the biggest MoM drop since March 2016.

Dollar Extends Longest Winning Streak Since 2012 as March Rate Hike Odds Surge

The Israeli economy advanced an annualized 6.2 percent onquarter in the fourth quarter of 2016, following an upwardlyrevised 4.2 percent growth in the previous period, according tothe preliminary estimates. It was the strongest expansion since thesecond quarter of 2013, boosted by exports and consumerspending. Exports jumped 11.2 percent (from -0.8 percent in theprevious period) and imports went up 6.7 percent (from 7.1percent). Consumer spending expanded at a faster pace (3.5percent from 3.1 percent) while growth eased for public spending(2.3 percent from 2.4 percent) and investments (7.4 percent from12.8 percent). On a seasonally adjusted quarterly basis, the GDPexpanded by 1.5 percent. In 2016, the GDP advanced 4 percentcompared to 2.5 percent growth in the previous year.

US industrial metals see bullish but high-risk outlookThe election of the pro-business, pro-fossil fuels President Donald Trump has boosted the industrial metals outlook

Eurozone private sector activity gained momentum inFebruary, amid strong job creation, robust order books andbusiness optimism, leading to the fastest expansion innearly six years. The flash Eurozone Composite OutputIndex, which combines manufacturing and services, rose to56.0 from 54.4 in January, results of the purchasingmanagers' survey by IHS Markit showed Tuesday. Areading above 50 suggests growth in activity. The latestreading was the highest since April 2011.

EU GDP revised down… The Eurozone economyadvanced 0.4 percent on quarter in the three months toDecember of 2016, the same pace as in the previousperiod and worse than a preliminary reading of a 0.5percent expansion, the second estimate showed.

Brazil Begins Carnivale

Economic growth in thedeveloped economies showed inthe fourth quarter, theOrganization for EconomicCooperation and Developmentannounced. Real GDP growth inthe OECD area decelerated to 0.4percent from 0.5 percent in thethird quarter, provisionalestimates showed. The pattern ofsluggish growth continues…

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February 26, 2017

Dislocation, Dislocation, DislocationSince the OPEC deal in November, crude prices have moved ina tight $5-band. The OPEC cuts, however, have spurred aspeculative move into crude oil that has pushed prices towardsthe top of their recent ranges that might prompt a correction.Money managers hold the highest number of net long Brent andU.S. crude futures and options on record, data showed onMonday and Friday, betting on higher prices to come as OPECand other key exporters reduce production. [O/ICE] [CFTC/]Bank of America Merrill Lynch cut its forecast for Brent crudeprices to an average of $50-70 through 2022, from $55-$75amid a recovery in U.S. shale production.

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February 26, 2017

The Likelihood of Unlikely Events

Global Disorder Infrastructure woes…Dam crisis wake-up call for aging California water system...

Fear spreads across Paris as riots in suburbs spills into city...

China’s holdings of U.S. Treasuries declined bythe most on record last year, as the world’ssecond-largest economy dipped into its foreign-exchange reserves to buttress the yuan. Japan,America’s largest foreign creditor, trimmed itsholdings for a second straight year. A monthlyTreasury Department report released inWashington on Wednesday showed China held$1.06 trillion in U.S. government bonds, notes andbills in December, up $9.1 billion from Novemberbut down $188 billion from a year earlier. It wasthe first monthly increase since May. ThePeople’s Bank of China, owner of the world’sbiggest foreign-exchange reserves, has burnedthrough a quarter of its war chest since 2014 in aneffort to underpin the yuan and deter capital fromfleeing the country. Chinese sales have madeborrowing more costly for the U.S. government:10-year yields rose to 2.6 percent last year, fromas low as 1.3 percent.

Delaying the agreement on the bailout forGreece will carry costs for all, and not just forAthens, European Commission Vice PresidentValdis Dombrovskis said Thursday. Lenders areforced to choose between working hard to solve thestand-off or to return to uncertainty that isdangerous, Dombrovskis said in an interview

Brexit will bring instability to Northern IrelandThe collapse of the power-sharing executive, along with the Brexit fallout, threatens to end a period of political calm

China struggles to rein in its troublesome neighbour

British consumers are starting to feel the Brexit pinch, data showed Friday,as retail sales dipped in January for the third consecutive month amidwarnings that the U.K. economy is set to weaken.

MEXICO After a decade of the 'war on drugs', violent crime appears to be on the rise once again

How one Chinese region shows risks of relying on heavy borrowingA flurry of construction in the Chinese city of Shenyang belies a regional economy in crisis, a striking example of the increasingly diminishing returns from a policy of investing heavily in infrastructure to prop up economic activity.

Paris and the surrounding region lost 1.5 milliontourists in 2016 as visitors, especially from the FarEast, stayed away due to ongoing terror fears.According to the Comité Regional du Tourisme, the ParisIle-de-France region also lost 1.3 billion euros in touristincome, while the number of nights spent by foreignvisitors in the region’s hotels also fell by 10.8 per cent.

Amazon announced that it would increase its British workforce by a quarter,adding 5,000 jobs to its current headcount. Apple, Facebook and Google havemade similar commitments to increase their presence in Britain recently.American tech companies seem to be less worried than financial firms about theprospect of Britain leaving the EU.

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February 26, 2017

The Market Roar… History May Not Repeat, But It Often Rhymes

Bitcoin Price Hits an All-Time High, Currently Trading at $1,200 Level

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February 26, 2017

Households – Brave New World

U.S. retail sales rose more than expected in January ashouseholds bought electronics and a range of othergoods, pointing to sustained domestic demand thatshould bolster economic growth in the first quarter.The Commerce Department said on Wednesday retailsales increased 0.4 percent last month. December'sretail sales were revised up to show a 1.0 percent riseinstead of the previously reported 0.6 percent advance.Last month's fairly upbeat sales came despite motorvehicle purchases recording their biggest drop in 10months. Compared to January last year retail saleswere up 5.6 percent.

► Sales at gasoline service stations again lifted retailspending last month, as they went up 2.3% (13.9%y/y); December's gas stations sales increase wasrevised from 2.0% to 3.2%.

U.S. home resales surged to a 10-year high inJanuary as buyers shrugged of higher prices andmortgage rates, a sign of growing confidence in theeconomy. December's sales pace was revised up to 5.51million units from the previously reported 5.49 million units.Economists had forecast sales rising 1.1 percent to a 5.54million-unit pace in January. The NAR also revised sales datagoing back to 2014. The revisions were minor and had noimpact on the characterization of the housing market. Saleswere up 3.8 percent from January 2016. Demand for housingis being underpinned by a strengthening labor market, whichis improving employment opportunities for young adults and,in turn, boosting household formation. A persistentshortage of properties available for sale, which is lifting houseprices, remains an obstacle to a robust housing market. Whilethe 30-year fixed mortgage rate appears to be stabilizing afterrising rapidly in recent months, it still remains above 4percent. In contrast, annual wage growth is running below 3percent.

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February 26, 2017

YouCan’t Handle the Truth…Let's Take the “Con” out of Economics

Natural gas reached an all time high of 15.39 in December of 2005 and a record low of 1.02 in January of 1992.

The demand for German paper is nowhere moreobvious than the "schatz", the German 2 Yearwhose yield fell earlier in the week to what wasthen a record 0.92%, and has since continued tofall, earlier in the session sliding to a new all timelow of -0.95%, down 15 bps on the week, beforerebounding modestly as ravenous credit traderssnapped up every German asset they can find amidrising political fears

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February 26, 2017

How Do You Figure?

Latest: 3.9%

Latest: 5.3%

Latest: 3.9%

Latest: 4.8%

Latest: 6.6%

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February 26, 2017

Credit Matters - Know RiskMany Excel in Strategy, Few in the Management of Risk

Fitch Ratings ’ global rating outlooks are more negative than a year agoacross most rating sectors. The greatest challenges are faced by emerging-market issuers in all sectors, but this is a global trend with the outlookbias also negative for developed market entities across most sectors

China’s top foreign exchange regulator says the countrywill not follow the “old road of capital controls”, asBeijing seeks to reassure investors their money will notbe trapped in China after recent measures to limitcapital outflows. A flurry of moves to keep moneyonshore has sparked concern that China is backtrackingon promises to liberalise cross-border investment andinternationalise its currency. The measures includetighter approval procedures for foreign acquisitions byChinese companies and higher hurdles for forexpurchases by individuals. In a rare media interview,Pan Gongsheng, head of the State Administration ofForeign Exchange and deputy governor of the People’sBank of China, described the tightening primarily as aneffort to close loopholes and improve enforcement ofexisting rules and root out fraud, not to abandon thegeneral trend towards greater openness.

Venezuela's oil sector faces rising challengesFalling output, debt repayments and the risk ofdefault are undermining prospects for recovery of acrucial sector

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February 26, 2017

Pumping Iron…The Old Economy Revisited

A strike at the world’s largest copper mine has sent prices soaring to their highest level in almost two years as a stand-off shows little sign of resolution

Chile copper strike stalemate may have wider falloutThe course of the Escondida copper mine strike could affect other wage talks in the crucial sector

South Korea court declares Hanjin Shipping bankruptA South Korean court declared Hanjin Shipping Co Ltd bankrupt on Friday, after ruling earlier this month that the firm's liquidation value would be worth more than its value as a going concern.

As U.S. shale oil activity surges, sand could be in short supplyDemand for frac sand has surged in recent weeks asU.S. producers rush back to the oil patch, stokingconcern that supplies of the key component ofdrilling may not be able to keep up with demand laterthis year, industry professionals said.

Oil slipped pressured by growing global stocks, while expectations that an oil output cut by producers might eventually balance the market helped to underpin prices. But inventories and supplies remain high, especially in the United States. "You've gotbullishness from the OPEC cuts, but the bearishness of the inventory report," Hamza Khan,head of commodities strategy at ING, said. "The question is, which of these is going to givefirst?“ Brent and WTI have traded within a $5 per barrel price range this year, in what hasbecome the longest and most range-bound period since a price slump began in mid-2014. Inthe United States, rising output has helped push up crude and fuel stocks to record highs. InAsia, oil flows into the region remain as high as they were before the production cuts, ThomsonReuters data shows, as exporters fight for market share. There are also signs of falteringdemand growth in core markets China, India and the United States.In India, fuel demand growth fell in January, while in China sagging car sales and soaringgasoline and diesel exports also point to a slowdown in growth. U.S. gasoline cracks slid to aone-year low on Friday on fears of excess supply and weakening demand growth. Despite thesupply glut, analysts expect oil markets to tighten in the longer term. "In the fourth quarter of2018, global oil demand will most likely surpass 100 million barrels per day," AB Bernsteinsaid on Friday in a note to clients. "If oil prices stay around $60 per barrel and GDP (grossdomestic product) growth over 3 percent per annum, then oil demand growth will be strongerover the next 5 years than the previous decade. What we are witnessing is a rather surprisingrenaissance of oil consumption," it said.

S&P Global Inc said in a report it could cut its rating of Toshiba Corp credit byseveral notches should the Japanese firm receive financial support that includesdebt restructuring, sending Toshiba stock down 9 percent. S&P rates Toshibacredit as junk, at CCC+, following downgrades in December and January, afterthe conglomerate flagged a multi-billion dollar writedown in its nuclear powerbusiness. The credit-rating firm expects banks to help Toshiba, including byextending deadlines for loan repayments. Any further downgrade would promptbanks to charge Toshiba even higher rates for credit, at a time when theconglomerate is dealing with the crippling writedown while still working to recoverfrom a financial scandal in 2015.

Hanjin Shipping has finally been declared bankrupt by acourt in Seoul five months after the Korean shipping lineentered receivership and sent global supply chains intoconvulsions, ending months of uncertainty and the carrier’s 40-year history. According to Lloyd’s List, the Seoul CentralDistrict Court will choose a trustee to liquidate what is left ofHanjin's assets to repay some of the money owed to creditors,who will have until 1 May to submit their right to claim. It saidthe court, as well as an auditor’s report, had concluded Hanjinwould be worth more liquidated than as a going concern. Ina to creditors note on Hanjin’s website, the Korean lineexplained: “After the bankruptcy sentence is filed, a bankruptcyfoundation will be established, a bankruptcy trustee will beelected, and the remaining assets of Hanjin Shipping will besold and creditors will be reimbursed in accordance withprocedures and regulations established under the permissionof the court, led by the bankruptcy trustee.”

China data questions… the rust‐belt province ofLiaoning admitted to fabricating fiscal numbers from2011 to 2014. The fabricated economic data weremeant to show a state of economic strength with fiscalrevenues inflated by at least 20%... What else is fake?

Nokia's newly revitalized phone business went back to the future on Sunday,re-introducing a brightly colored version of the best-selling phone of2000. The new version of the classic 3310 talk and text phone has biggerscreens and is priced at just 49 euros ($52). Nokia also reentered the globalsmartphone market with four moderately priced models ranging from 139 to299 euros. Once the world's dominant phone maker, Nokia in 2014 sold itsby-then ailing handset operations to Microsoft for $7 billion.

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February 26, 2017

The DNA of BusinessReconfiguring Industries to Define Growth

Verizon Communications Inc's announcement that it will once again offer an unlimited pricing plan marks a shift in its thinking as a price war among the four biggest U.S wireless carriers accelerates.

General Motors, Considering Exiting Europe, Talks About Selling OpelA potential deal, with PSA Group of France, would create a European rival to Volkswagen and free G.M. to concentrate its resources on new technologies.

Nestlé suffers drip, drip, drip of deflation and sluggish economiesNew chief digests scale of task facing him after slowest organic growth for at least two decadesSales growth at Nestlé has not fallen quite as precipitously as the mountain slopes surrounding the Swiss group’s headquarters on Lake Geneva. However, the slowdown last year was still breathtaking — especially for Mark Schneider, its new chief executive. The largest food and drinks company achieved organic growth of just 3.2 per cent in 2016, the slowest for at least two decades.

Americans eat out less as higher menu prices take a bite from restaurant visitsA third of U.S. adults are eating out less frequently than three monthsago, mostly because of cost, according to a new Reuters/Ipsos surveythat illustrates the challenge for U.S. restaurants seeking to revivetraffic after zero growth in 2016. Penny-pinching diners and intensecompetition from supermarkets, meal kit sellers like Blue Apron andupstart grocers such as Amazon.com have been a growing problem forrestaurants. Annual traffic to U.S. restaurants has been flat or upjust 1 percent since 2009, when there was a 2 percent drop in thewake of the debilitating financial crisis, according to data from the NPDGroup. One-third of respondents to the Reuters/Ipsos opinion poll ofmore than 4,200 U.S. adults from Jan. 14 to 25 said they were eatingout less often than three months ago. Of those diners, 62 percent saidcost was the primary reason. Recent minimum wage increases haveprompted some U.S. restaurant operators to raise menu prices whileless labor-intensive grocery stores have been able to pass lower foodcosts on to shoppers.

The shipping news: Amazon, Walmart battle for online customersA year ago, Amazon hiked its free shipping minimum for non-Prime customers from $35to $49. Naturally, many customers weren’t happy with that move. Meanwhile, Walmartrecently adopted free 2-day shipping with a $35 minimum purchase requirement. Now,Amazon seems to have changed up its shipping again in a bid to hang on to customers.The online giant was known for its low-minimum free standard shipping, which undercutmany retailers that required purchases $50 or more. It was one of the best deals online —until Amazon bumped the requirement from $25 to $35, and then again to $49 last year.

PRICE WARS

Norwegian Air to offer U.S.-Europe fares starting at $65 one wayNorwegian Air Shuttle ASA plans to offer transatlantic flights on 10 new routes between the United States and Europe with tickets starting at $65 one way, putting pressure on U.S. and European rivals to compete, it said on Thursday.

As transient as it was titanic, a proposed $143bn takeover bid by Kraft Heinz for Unilever waswithdrawn just a few days after it was leaked to the press. The deal would have been one ofthe biggest mergers on record, creating a behemoth in consumer products. Kraft’s majorshareholders are Berkshire Hathaway, Warren Buffett’s investment company, and 3G Capital, aBrazilian private-equity firm with a reputation for stringent cost-cutting at its takeover targets.Unilever swiftly rejected its advances, but in a rapid response it launched a wide-rangingreview of its business.

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February 26, 2017

Real Estate and Construction Outlook

Bonds Tied to Dying Malls Could Be the Next ‘Big Short’Some see opportunity in securities tied to lower-quality malls during the wave of retail closures

The problems facing malls are asymptom of a weak environment forretailers. In January, Sears HoldingsCorp. said it would close 150 stores,while Macy’s Inc. gave more details of aplan to close 100 stores, weakeningsentiment among mall investors.The lengthy list of retailers teetering onthe edge of bankruptcy but not beingallowed to die is holding the rest of theindustry back

Glut of Apartment Development in New York Puts Stress on Owners The softening market for high-end rentalapartments in New York City is taking its toll onREITs that have substantial exposures to themarket. Among them is Chicago-based REITEquity Residential, which owns 40 propertieswith 10,632 units in the city.

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February 26, 2017

More Real Estate

The US office sector is experiencing contrasting levels of demandamong different employment sectors and markets. On the positiveside, the technology sector remains the leading driver of demand, andhas made major leasing contributions in multiple “tech hub” markets.There has also been a significantly large growth of registeredoccupancy among secondary markets, which is a potential indicationthat employers are seeking to expand in cost-efficient areas.

Office landlords in many markets are having a harder time raisingrents because of new supply and less than robust job growth,according to a new report by a leading real-estate research firm.Green Street Advisors, of Newport Beach, Calif., has revised itsprojections for rent increases through 2020 to about 3% annuallyfrom 4% annually.The firm said that rent increases in 2016 also wereless than expected.

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February 26, 2017

Will Life Ever Be the Same?

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