Real Assets Adviser

July 1, 2018: Vol. 5, Number 7

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From the Current Issue

Roundtable: What strategies will make the retail centers of the future successful?

Traditional retailers have taken a pounding the past couple of years, with the high-profile bankruptcies of Toys “R” Us, RadioShack Corp., Gymboree Corp. and Sports Authority, among many others. Meanwhile, the “bankruptcy watch list” includes the likes of J.C. Penney Co., Sears Holdings Corp., Burlington Stores and Stein Mart, all of which are said to be at risk of insolvency.

The future of food: Seven technologies that are making farms smarter

Farming, a field still largely unaffected by the tech revolution, is ripe for change and offering opportunities for investors. “We’ve seen a wave of technology impact our information industries,” says Haim Mendelson, a professor at the Stanford University Graduate School of Business. “Now we see another big wave of technology reshaping our traditional industries, and certainly agriculture is one of the most basic ones.”

Chill winds blow in Chicago: The land of the deep-dish pizza is thinning out

One could argue it is the worst of times in the Windy City. The municipality and its major suburbs continue to bleed population, and growth in homes prices was last among the 20 largest U.S. cities — alarming trends when demographers are touting the global shift toward urbanization, real estate markets are sizzling, and the country is in the midst of one of the longest expansions in our history.

Blockchain enabled: Lease contracts to arrive by 2022

Investors expect to see the first property lease contracts based on blockchain to emerge by 2022. The finding comes from BrickVest, the commercial real estate investment platform, which recently asked investors for their views on the disruptive technology. On average, respondents said that it would come into use within four years’ time, but 25 percent of investors also predict that blockchain will be behind some leases as early as 2020.

Women and crowdfunding: How nontraditional financing is unleashing women and their entrepreneurial potential

An analysis of more than 450,000 seed crowdfunding campaigns across the globe showed women-led campaigns reached their funding target more often than male-led campaigns. In fact, campaigns led by women across the world in 2015 and 2016 were 32 percent more successful than those led by men across a wide range of sectors, geography and cultures. Furthermore, many female-led projects achieve a greater average pledge amount than male-led projects: On average, each individual backer contributes $87 to women and $83 to men.

Toy story: Closing of Toys ‘R’ Us will create a short-term glut, but real estate investors should recognize the opportunity amid the so-called retail apocalypse

In the wake of news that Toys “R” Us would be closing its doors for good, observers have been quick to point fingers attributing blame. Jim Cramer identified Inc. and Walmart as the chief culprits, while U.S. Rep. Bill Pascrell, in a USA Today op-ed, pinned the bankruptcy on “greedy Wall Street profiteers.” While such a characterization overlooks the fact Toys “R” Us was struggling prior to its 2005 buyout, it also ignores the fact it is the same “profiteers” — investors in private capital — who will reimagine how the retail space left vacant by the bankruptcy can be reinvented to accommodate the evolving consumer.

Discounted volumes: Retail investment sales activity falls during start of year

Retail transaction volumes were $12.8 billion in the first four months of 2018, according to JLL, reflecting a 46 percent decline in investment in retail assets during the first part of the year. JLL attributed the drop to investor caution and a perception retail returns are not commensurate with current valuations.

Blockchain technology and the secondary market

Location, location, location. For years, this phrase has been repeated as the cardinal rule of real estate. Location is immutable, something that cannot be changed. Developers can improve a vacant lot by building a new asset and skilled operators can increase the quality and finish of construction, but they cannot change the physical location.

Vintage funds: A look back at infrastructure fund performance

We still think about infrastructure as being a young asset class — and in comparison to others, it still is. But we are finally reaching the point where we can look at several vintage periods and analyze how those funds performed during a variety of economic conditions. The 2005–2007 vintage is a perfect one to start with. Not many funds can claim to have been launched into one of the highest-flying of high-flying economic climates, only to quickly be in the midst of a great financial crisis. How these funds survived the crisis, both in relation to promised performance and in relation to other asset classes, has helped funds today position themselves for future downturns.

Going nuclear: Using fission power technology as part of a zero-emission strategy

In a new report, the Center for Climate and Energy Solutions emphasizes that states are taking the lead in developing policies to preserve existing nuclear power. Considering the urgency and nuclear plants’ role in helping us avoid carbon dioxide emissions, this is a welcome development. To meet mid- century climate goals, power-sector emission reductions must include substantial growth in renewables and maintenance of zero-emission nuclear generation.

Understanding direct participation programs: DPPs are now managing investor capital totaling more than $100b, primarily in the real estate sector

For decades, inflation and interest rates in the United States and globally have been in retreat, hitting fresh nadirs in the wake of the global financial crisis of 2008 and subsequent easing by major central banks. The long-term falling interest and inflation rates rewarded stock and bond buyers, who found debt and equity issues worth more as rates fell in a very broad long-run bull market. “A rising tide lifts all boats,” as they say.

Head of the class: Mandell Crawley, head of private wealth management at Morgan Stanley, had a different career in mind; then he landed an internship on the firm’s trading desk

As a child, Mandell Crawley envisioned himself a teacher standing at the front of a classroom, probably schooling his pupils in history, and perhaps offering guidance to at-risk kids. Initially, he thought in terms of working at the elementary school level, but as the idea incubated his thoughts gravitated toward teaching high school students or even young men and women at an institution of higher learning.

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