Real Estate

Nasty pieces of WeWork

17 December 2019

The shared-office outfit’s absurd $47 bln valuation wasn’t all that got exposed during a shambolic IPO attempt that led to SoftBank’s bailout. With any luck, founder worship, supervoting shares, weak governance, wacky missions and more will be knocked down a peg – or several.

UK takes small step to solving fund liquidity mess

17 December 2019

Bank of England Governor Mark Carney wants open-ended investment vehicles to offer redemption terms that match the cost of selling assets. The hope is to avoid blowups like M&G’s frozen property fund. Yet discounts could still encourage investors to run for the exit in a crisis.

Greek poise goes beyond flawed bond markets

12 December 2019

The $720 mln rights issue by Lamda to start work on Athens’ Hellenikon project gives a boost to Prime Minister Kyriakos Mitsotakis, who championed the development. It’s a far better gauge of confidence in Greece than sovereign debt yields, which are partly skewed by ECB policy.

UK property investors pay for watchdog blind spot

5 December 2019

The Financial Conduct Authority has passed up chances to ban real-estate funds that promise daily liquidity. Now investors are stuck in a $3.2 bln M&G vehicle that has suspended dealing. Their ire should be aimed at FCA boss Andrew Bailey for tolerating such illogical products.

Colony Capital is easy target even minus politics

26 November 2019

Activist investor Blackwells Capital wants Tom Barrack, the real-estate veteran and backer of Donald Trump, ousted as the asset manager’s CEO. Barrack has probably been distracted. But lousy returns on Colony’s stock and poor governance are enough to justify a shareholder revolt.

Maurice Levy and WeWork share unlikely synergies

25 November 2019

The 77-year-old adland grandee seems an odd pick for the office-sharing group’s C-suite. Yet the Publicis chairman earned his tech chops organising a huge Paris-based startup gathering. And his bulging blue-chip contact book may aid WeWork’s push for steadier corporate business.

India’s shadow bank fix shows much-needed audacity

21 November 2019

The regulator is taking control of a credit crisis, sending housing lender DHFL and $12 bln of liabilities to bankruptcy court. Unpicking a financial institution’s woes with a process designed for regular corporates is bold. It might also be the only way to break an impasse.

Tech cartel would be handy for U.S. housing

19 November 2019

Apple, Facebook and Google have pledged a total of $4.5 bln to build homes in the San Francisco area. California needs at least 200 times that amount. Silicon Valley firms get criticized for being too big, but this is one area where they could throw their weight around more.

Soho House crashes WeWork club for rosy valuations

15 November 2019

The trendy members’ club has raised capital valuing it at $2 bln. Unlike the stricken office lessor, it can flaunt 25 years of history and rising profitability. Yet the heady price tag will only make sense if Soho House can keep expanding without sacrificing its exclusive appeal.

Hong Kong property crash may hurt less this time

15 November 2019

The world's least affordable housing market is heading for a steep correction. The Asian currency crisis and SARS epidemic pushed prices down 69% from 1997 to 2003. But resilient local demand, a land shortage, fewer speculators and higher down payments might pad this downturn.

Zillow’s new ‘hood looks financially edgy

8 November 2019

The real estate site’s quarterly revenue more than doubled thanks to its new line in buying and selling houses. Investors looked past rapidly rising losses and fast-expanding balance sheet. Making homes more liquid is good for sellers, but a growing risk for Zillow.

Viewsroom: WeWork’s future may lie in China’s past

24 October 2019

Beijing-based Kr Space switched from renting out space held on long-term leases to selling services after the shared-office market crashed. Following suit may help WeWork stem losses. Also: climate change and Canada’s election. Plus: the gloomy IMF and unrest in Latin America.

Tech riches bypass San Francisco African-Americans

22 October 2019

The city is bursting with billionaires and boasts a jobless rate of just 2.3%. Yet black residents’ median annual incomes are only a quarter of what whites take home. Many factors are to blame, but Silicon Valley could do much more to reduce the inequities.

China rival offers WeWork half an office blueprint

22 October 2019

Like Adam Neumann's company, over-expansion at Beijing-based Kr Space caused a cash crunch. It turned itself into an office manager, reducing exposure to falling occupancy rates. A similar pivot to services can’t salvage WeWork's $47 bln valuation, but it may stem losses.

Warehouse IPO reroutes Asian investment bank fees

21 October 2019

Warburg Pincus-backed logistics firm ESR is trying a Hong Kong market debut again after postponing an effort in June. Morgan Stanley has been enlisted to lead the $1.4 bln deal over Deutsche Bank and CLSA. Given the industry shakeup, it may be a sign of things to come.

Jardine maps a road to younger Asia for its peers

20 September 2019

The $41-bln conglomerate turned to the southeast when it moved out of Hong Kong ahead of 1997. It thrived, betting on cars in Indonesia and milk in Vietnam. Those economies have cooled of late but long-term prospects, plus uncertainty up north, will encourage more to follow.

Blackstone $4.7 bln REIT deal houses market oddity

16 September 2019

Steve Schwarzman’s firm is paying an 18.5% premium to take Canadian property owner Dream Global private. The lack of daily pricing volatility helps explain why far more is invested in unlisted real estate. But REITs are liquid, have lower fees and tend to outperform.

Tech and NYC are so over the Amazon spat

16 July 2019

With Google and WeWork expanding, Manhattan office rents are setting records and the space being leased is at a 25-year high. Tech employment continues to grow, and even Amazon may be seeking more capacity. It suggests the city can do just fine without subsidizing big tenants.

Canada’s student flat deal hedges its UK bets

3 July 2019

The Canada Pension Plan Investment Board has sold university housing player Liberty Living to Unite Group for 1.4 billion pounds. The seller’s small premium is offset by the buyer’s synergies. CPPIB gets to cash out, but a 20% stake creates upside if student inflows endure.

San Francisco vaping ban shows warped agenda

28 June 2019

Juul Labs’ home is the first U.S. city to block its sales. Local agencies can’t use facial-recognition software. Meanwhile the area has a property-crime problem and human feces on its streets. The place boasting the highest density of billionaires is neglecting basic services.