Capstak's Weekly Wrap Up | July 14

by Capstak

 

1) TechCrunch | With autonomy, commercial real estate could go mobile

We’ve all heard of the, so called, retail apocalypse without many proposed solutions. Well, this week TechCrunch proposed an alternative to traditional brick and mortar retail. Mobile malls in the form of autonomous vehicles. While this provides a lot of opportunity for retailers, it doesn’t do anything to help retail vacancy rates which are expected to rise through 2018. On the brightside, these cars will need somewhere to park...

 

2) Business Insider | 'We are in a precarious situation': The electric-car startup Faraday Future is scrapping its big Nevada factory as its cash crisis deepens

Faraday Future announced this week that they would be scrapping plans for a 1-million-square-foot assembly plant in Nevada. The company, which set out to dethrone Tesla, is now suffering from a, “deepening cash crunch.” Instead of building their factory, the company plans to find an existing building to retrofit. This seems like a good plan since many building can be bought for below replacement cost. The only hitch is the United States industrial vacancy rate is at a 17 year low, and finding a building is easier said than done. Could this be a good opportunity for an adaptive reuse project for a suffering retail space?

 

3) Fast Company | Hyperloop One says it completed its first test run in May

At Hyperloop One’s proposed speed of 700 miles-per-hour, the trip from San Francisco to Los Angles could be reduced to about half an hour. The completion of their first success full system test brings that trip another step closer. While that test trip reached only one tenth of the full speed eventually hoped for, the test only lasted five seconds. While this technology can revolutionize transportation, the bigger effects will be seen in how communities are organized. Hyperloop Co-founder Shervin Pishevar put it best, saying, “When you bring in the idea that you can travel 700 mph and you can live and work anywhere, the ideas of cities and states and governments begin to reorient themselves.”

 

4) Forbes | Apollo's $1.1B Buyout Of This Golf Course Operator Signals A Turnaround For The Struggling Industry

Private equity firm Apollo Global Management made a big bet on an asset class that was hard hit during the recession. In a $1.1 billion deal, Apollo acquired golf club operator ClubCorp Holdings,  which is over a 30 percent premium from the July 7 closing price. Apollo has a strong history of making money on alternative assets types. So, this move should be making commercial investors take a second look at embattled asset class.

 

5) Real Estate Weekly | Berkshire Hathaway launches commercial real estate division

The Oracle of Omaha is continuing his faith in Commercial Real Estate by launching Berkshire Hathaway HomeServices commercial division in New York. According to their website, Berkshire already has over 2,000 agents in other markets who represent owners and investors, landlords, tenants and commercial affiliates. New York City’s property assessment crossed $1 trillion last year, so Buffet’s bet on New York has plenty of room to pay off. And as Buffet himself has said, “Price is what you pay. Value is what you get.”

 

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