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Vornado expects Q3 result impairments; Marcus threatens to sue Wis. town

Gauging Supply Chain Risk In Volatile Times

The Commercial Real Estate (CRE) Sector Feels the Impact of the Coronavirus

Credit Analytics Case Study Poundworld Retail Ltd

Segment

IFRS 9 Impairment How It Impacts Your Corporation And How We Can Help


Vornado expects Q3 result impairments; Marcus threatens to sue Wis. town

Commercial real estate

* Vornado Realty Trust said its third-quarter financial results will include a $44.5 million noncash impairment loss on its investment in Pennsylvania Real Estate Investment Trust due to a sustained trading stock price below its carrying value.

The results will also include $53.6 million of transaction costs related to its spin-off of JBG SMITH Properties.

* Marcus Corp. is threatening to sue the town of Brookfield, Wis., if the municipality approves plans to add a movie theater to The Corners lifestyle center development, according to a Milwaukee Business Journal report, which cited a letter to the town from Marcus President and CEO Greg Marcus.

The report noted that Marcus Corp., which owns a 10% stake in the 750,000-square-foot complex, is the parent company of Marcus Theatres, the operator of a theater roughly one mile to the west of The Corners. Marcus intends to develop another cinema at Brookfield Square, three miles east of The Corners development, according to the report.

* Crain's New York Business reported that the "abrupt" departure of Dan Thomas as head of the Bank of the Ozarks' real estate lending arm could have ramifications for the New York City real estate market. The bank has emerged as one of the leading construction lenders for projects in the city in recent years.

The report said Thomas' departure in July creates uncertainty regarding the continuation of the bank's lending practices for New York City projects. Funding deals are planned and executed within roughly three months, so any changes in the bank's appetite for city projects should become apparent in a few weeks, the report noted.

* The median price for cooperatives in Manhattan, N.Y., hit a 28-year high in the third quarter after jumping 8.3% year over year to $850,000, The Real Deal reported, citing Douglas Elliman. Meanwhile, the borough's median condominium price increased 6.3% to $1.7 million.

* A study by Anderson Economic Group ranks New York City as the most favorable contender for Amazon.com Inc.'s second headquarters. The group compiled an index using 11 total metrics across three categories of access to labor and services, ease of transportation, and cost of doing business. Chicago came in second place, followed by Los Angeles, Boston, Atlanta and Washington, D.C.

* Speaking of Amazon, the online retail giant is leasing the entire 722,000 square feet of office space at Wright Runstad & Co.'s Rainier Square office tower in Seattle, Bloomberg News reported, citing the developer.

The 58-story, $570 million Seattle skyscraper is poised to be the city's second-tallest after Columbia Center. The 1.17 million-square-foot tower, set to open in 2020, will also house 200 luxury apartments above the offices, along with an Equinox fitness club and organic food market occupying part of the retail space, the news outlet noted.

* The City of Doral, Fla., is partnering up with developer Codina Partners to offer 47 acres for Amazon's second headquarters in downtown Doral, Miami Herald reported. Meanwhile, economic development agencies in Miami-Dade, Broward and Palm Beach counties in Florida are piecing together a tri-county proposal for the headquarters, the report noted.

* The new city of Stonecrest, Ga., is proposing to de-annex a part of its city limits so that Amazon can "turn the headquarters into its own new city" and even rename it to "The City of Amazon," the Atlanta Business Chronicle reported. The report said the pitch is an attempt to market a 345-acre site that the city can acquire from a local ownership group for economic development. The publication also noted that the city lies on the proposed path of a long-term expansion of MARTA rail along Interstate 20 in DeKalb County.

* According to Reis Inc. data, shopping centers in 34 of 77 U.S. metro areas saw increased vacancy rates in the third quarter compared to the year-ago period, The Wall Street Journal reported. The figure marks an improvement from the second quarter when 39 metro areas reported year-over-year increases.

The retail vacancy rate across different types of malls and retail centers remained unchanged overall at 10% during the third quarter, the publication noted. The jump in store closures across the country in 2017 has only had a moderate impact on retail vacancy rates, according to the report.

* Citing RealPage Inc. data, the Journal reported that a slowdown in rental growth is spreading to less expensive apartment markets after afflicting New York and San Francisco in 2016. Dallas logged an annual rental growth of 2.8% in the third quarter, dropping from 5% in the year-ago period. Year-over-year rent growth in Charlotte, N.C., came in at 2.5% in the third quarter, down from 4.2% in the third quarter of 2016.

* The Industrial Development Authority of St. Louis approved the issuance of $119 million in bonds to finance the second phase of the Ballpark Village mixed-use project, the St. Louis Business Journal reported. The city is providing $65 million in subsidies to go toward the financing of the development, the report noted.

The project, which has an estimated cost of $260 million, will include 117,000-square-foot office building, a 220-room boutique hotel, a 900-space parking garage, a 30-story apartment tower and 75,000 square feet of new retail space. Construction is expected to commence in November or December, the report said, citing Otis Williams, executive director at St. Louis Development Corp.

* Priderock Capital Partners LLC entity PRCP-Phoenix III LLC bought an 832-unit apartment project in Phoenix for $125.5 million, the Business Real Estate Weekly of Arizona reported, citing records from Maricopa County, Ariz.

* In Houston's office market, the average deal size across all property types was just 4,700 square feet in the third quarter, reflecting one of the lowest points since 2009, the Houston Business Journal reported, citing JLL.

* Pacific Business News reported on CBRE's third-quarter market data on Hawaii's retail and industrial real estate markets. The statewide retail vacancy rate was unchanged at 5.8%, while the industrial market's availability rate dropped to 1.9%. The third quarter reflected the state's strongest industrial leasing activity so far in 2017.

After the bell

* Duke Realty Corp. struck a deal to buy nearly $700 million of logistics centers from Bridge Development Partners LLC, the Journal reported.

* Welltower Inc. tapped John Goodey as its new executive vice president and CFO, succeeding Scott Estes, who is leaving the company to explore other opportunities.

* Forestar Group Inc. shareholders overwhelmingly approved the company's proposed merger with D.R. Horton Inc.

* SL Green Realty Corp.'s operating partnership priced an offering of $500 million worth of 3.250% senior unsecured notes due 2022.

* American Campus Communities Inc.'s operating partnership priced a $400 million offering of 3.625% senior unsecured notes due Nov. 15, 2027, for roughly $395 million in net proceeds.

* National Storage Affiliates Trust priced a roughly $150 million preferred stock offering, provided an update on its $84.9 million secured debt financing and detailed its recent self-storage property acquisitions.

* NorthWest Healthcare Properties REIT launched a bought-deal offering of 11,420,000 trust units priced at C$10.95 per unit for gross proceeds of approximately C$125 million.

* Sotherly Hotels Inc. priced an offering of 7.875% in series C cumulative redeemable perpetual preferred shares to gross about $30.0 million.

* S&P Global Ratings downgraded Quality Care Properties Inc.'s corporate credit rating to B- from B.

Housing

* PICO Holdings Inc. sold its stake of roughly 2.4 million shares in Century Communities Inc. for net proceeds of roughly $59.2 million.

The day ahead

Early morning futures indicators pointed to a lower opening for the U.S. market.

In Asia, the Hang Seng rose 0.73% to 28,379.18, while the Nikkei 225 was up 0.06% at 20,626.66.

In Europe, as of midday, the FTSE 100 had dropped 0.07% to 7,462.69, and the Euronext 100 had fallen 0.30% to 1,041.48.

On the macro front

Mortgage applications slipped 0.4% on a seasonally adjusted basis in the week ended Sept. 29, the Mortgage Bankers Association reported, citing data from its weekly mortgage applications survey.

The ADP Employment Report, PMI Services Index, ISM non-manufacturing index report and EIA petroleum status report are also due out today.

The Daily Dose is updated as of 7:30 a.m. ET. Some external links may require a subscription. Articles and links are correct as of publication time.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.