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AvalonBay, Equity Residential sign Amazon deal; Toronto greenlights Alphabet

Commercial real estate

* Inc. has signed deals with big apartment landlords including AvalonBay Communities Inc., Equity Residential and Greystar to install Amazon locker systems in their buildings to facilitate package deliveries, The Wall Street Journal reported, citing the landlords. Many landlords consider package sorting to be the single largest problem they face, the report noted.

Citing a person familiar with the matter, the publication said Amazon has agreements in place to install the lockers in "thousands" of properties. The "Hub by Amazon" program will provide automated lockers for residents and will accept packages from all carriers, not just Amazon, according to the report.

* Meanwhile, the Austin Business Journal reported that Sandow Lakes Ranch in rural Milam County, northeast of Austin, is pitching a "wild card" bid for Amazon's second headquarters. The ranch, owned by Alcoa Corp., spans more than 33,000 acres and is roughly an hour's drive from downtown Austin. County leaders are highlighting the low living costs of the agrarian site compared to urban settings.

* The Sidewalk Labs unit of Google parent Alphabet Inc. has been chosen by the Canadian government to help plan a mixed-use waterfront development in Toronto "using cutting-edge digital technologies and urban design," Reuters reported. Sidewalk will invest $50 million in the initial planning and testing phase for the new neighborhood, dubbed Quayside.

Subject to initial success, Sidewalk will land a mandate to develop a larger industrial wasteland area nearby. The project is expected to house 5,000 people and 5,000 workers in three to four years, and Google will move its Canadian headquarters to the project upon completion, the report noted.

* China's Dalian Wanda Group Co. Ltd.'s development partner Athens Group has exited a joint project comprising a luxury condominium and hotel project in Beverly Hills, Calif., Bloomberg News reported, citing Rohan a'Beckett, Wanda Beverly Hills Properties LLC's deputy general manager.

The $1.2 billion One Beverly Hills project, slated for delivery in 2020, will consist of 193 luxury apartment units and 134 hotel rooms. A'Beckett and Athens COO Jay Newman declined to comment on the reasons for the split, but according to sources with knowledge of the matter, the separation did not stem from China's tightened policy on capital outflow.

* Bloomberg News reported, citing a quarterly letter to investors obtained by the news outlet, that hedge fund Newbrook Capital Advisors is betting against an unnamed real estate investment trust. The description of the unnamed storage REIT appears to match Extra Space Storage Inc., the report noted, citing Bloomberg Intelligence analyst Lindsay Dutch.

* The Journal featured a look at the debt and capital equity sources for the Hudson Yards megaproject on Manhattan, N.Y.'s far west side and noted that foreign lenders from 11 countries provided a majority of the financing. U.S. banks, on the other hand, have been wary of construction financing since the financial crisis, the report noted.

The publication also pointed out, citing debt tracker Trepp LLC, that foreign banks held a total of $71.6 billion in loans backed by U.S. commercial real estate at the end of the second quarter, up from $59.3 billion in the year-ago period and $38.3 billion in the second quarter of 2015.

* Savanna completed its $195 million acquisition of the 303,943-square-foot Berkeley Building at 19 W. 44th St. in Manhattan from Germany-based Deka Immobilien GmbH, Commercial Observer reported. The investment manager will carry out a $25 million revamp at the 18-story building. The building is about 86% occupied, the report noted, citing The Real Deal.

* L+M Development Partners Inc. and Prudential Financial Inc. have secured more than $100 million in financing to redevelop the old New Jersey Bell headquarters building at 540 Broad St. in Newark, N.J., into a 263-unit mixed-use tower with market-rate affordable units along with office and retail space, the Journal reported.

City and state leaders are pitching Newark for Amazon's second headquarters with up to $7 billion in tax incentives.

* Leasing activity in Manhattan's retail market fell nearly 25% in the third quarter to 506,000 square feet, The Real Deal reported, citing CBRE. The second quarter saw leasing and renewal activity totaling 673,000 square feet. The report noted that the number of ground-floor vacancies in Manhattan's busiest shopping strips has been declining from a peak earlier in 2017.

Average asking rents in Manhattan's retail market fell 13.4% year over year to $711 per square foot.

* Meanwhile, Brooklyn, N.Y.'s retail market saw average asking rents rise year over year in 10 of its 15 shopping corridors as the borough's residential and hotel developments are boosting the retail market, the New York Post reported, citing the Real Estate Board of New York.

* Gotham Organization and the Actors Fund secured a $217.5 million loan backed by six condominium units at the Ashland residential building in the Brooklyn Cultural District, The Real Deal reported, citing property records. The 53-story, 586-unit residential building at 250 Ashland Place was completed in 2016 and has rental apartments.

* L+M Development Partners' Bronx Point project in the Bronx borough of New York City won official approval from the City Council, The Real Deal reported. The developer will convert a vacant waterfront site into 1,045 residential units, a food and beverage hall, and the long-awaited Universal Hip Hop Museum.

L+M is working in partnership with Type A Projects on the two-phase development, with the first phase — comprising roughly 600 affordable units, the museum and the food hall — expected to complete in 2022.

* The Square Feet column of The New York Times featured a look at the expanding market for conversions of various building types to residential and office use, including power plants, churches, schools, prisons, railroad stations, hospitals and factories. The report noted the conversion of a former correctional facility in Staten Island, N.Y., into a film and television production facility and a $98 million plan to convert the deserted Ponemah Mills complex in Norwich, Conn., into residential and retail use.

* The Journal featured a report on how struggling malls in the U.S. end up staying open for much longer partly due to contracts signed years or decades ago, and owners facing regulatory hurdles in their efforts to close or redevelop the properties.

* The Miami Planning and Zoning Board unanimously agreed to Miami Jewish Health Systems' $200 million four-phase redevelopment project at its elderly care campus in Miami's Buena Vista neighborhood, The Real Deal reported. The non-profit organization will demolish six out of 10 buildings and substitute them with housing for Alzheimer's and dementia patients at a new three-story complex. A five-story, 140-room hotel along with amenities for patients will also be part of the space that spans in excess of 20 acres.

After the bell

* Veteran real estate investment trust analyst Rich Moore has landed in CBRE's global REIT practice.


* MGM Resorts International has bought the San Antonio Stars team of the Women's National Basketball Association and will move the team to Las Vegas, Bloomberg News reported, citing a statement from the company.

The news outlet said casino operators have been looking to sports as a means to boost revenue and lure guests and tourists to Las Vegas at a time when gambling growth is modest.

The day ahead

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

In Asia, the Hang Seng rose 0.05% to 28,711.76, and the Nikkei 225 was up 0.13% to 21,363.05.

In Europe, as of midday, the FTSE 100 climbed 0.32% to 7,540.50, and the Euronext 100 had grown 0.48% to 1,054.99.

On the macro front

Mortgage applications increased 3.6% on a seasonally adjusted basis in the week ended Oct. 13, the Mortgage Bankers Association reported, citing data from its weekly mortgage applications survey.

The housing starts report, the Atlanta Fed's business inflation expectations survey, the EIA petroleum status report, the Beige Book and the Treasury budget report are also due out today.

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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.

Ayesha Waqar contributed to this report.