Real Estate

LVMH pays luxury price to check into Belmond

14 December 2018

Bernard Arnault’s champagne-to-handbags group is spending $3.2 bln including debt on the owner of Venice’s Cipriani. The multiple of 19 times expected EBITDA is as punchy as a Belmond suite. The French group will need all its limited hotel experience to make the deal work.

Amazon HQ2 meets NIMBY 2.0

13 December 2018

A month after picking New York for its new location, the $810 bln e-commerce giant is being bashed by local politicians and unions. It’s a rude shock for a firm used to getting its way. This kind of opposition can be eased with money. As Amazon gets bigger, the cost rises.

U.S. housing poses headwind for economy

9 November 2018

Online real-estate firm Zillow lowered its outlook, tanking its shares, while DIY chain Lowe’s is shuttering stores. Meanwhile mortgage applications have dropped as loan rates hit a nine-year high. If home buying continues to slow, the effects will be felt more widely.

Colony Capital’s village is built on shaky ground

8 November 2018

The $3 bln real estate firm is gambling Tom Barrack can still build. Yet the founder helped erode nearly half the group’s value with a 2016 merger. Making Middle East introductions for his pal, President Donald Trump, has been a distraction. His best investing days may be over.

Evergrande’s bond bravado baffles bystanders

1 November 2018

The indebted Chinese developer issued $1.8 bln of dollar bonds at eye-watering coupons, but sold $1 bln to its chairman. With housing looking toppy, the yuan sliding, and a listing in the works, Evergrande has a lot of balls in the air. This gesture confuses more than it amuses.

SoftBank in danger of over-WeWorking itself

10 October 2018

The Japanese group may invest up to $20 bln for a majority stake in the office-sharing outfit. That suggests it could wind up as roughly a fifth of SoftBank's Vision Fund. That would be a dangerous amount of concentration risk, especially given WeWork’s unproven business model.

Hadas: Why houses are not like pigs

3 October 2018

Farmers respond to high pork prices, so the hog cycle keeps turning. It’s different for housing. An excess of money, not a shortage of buildings, usually turns prices upwards. And the cycle reverses when the money runs out, sometimes because lenders take fright at new supply.

Fed helps Hong Kong homebuyers at owners’ expense

28 September 2018

Banks are hiking their benchmark rates for the first time in 12 years. As tighter U.S. monetary policy feeds into Hong Kong mortgages, flat prices look set to fall, relieving young buyers. But cooling the world’s bubbliest property market could tax economic activity.

Silicon Valley puts tech gloss on house flipping

27 September 2018

Opendoor thinks algorithms are a better way to buy and sell homes. SoftBank’s $400 mln investment in the company suggests it agrees. Opendoor and its peers can speed up and streamline an inefficient process. They can’t wish away balance-sheet risk if the housing market slows.

Wembley bid is open goal for Britain’s soccer body

27 September 2018

Jacksonville Jaguars owner Shahid Khan has offered a staggering 600 mln pounds for the UK’s national stadium. Given that the Pakistani-American is leaving behind the lucrative hospitality arm and naming rights, the Football Association should put the deal in the back of the net.

More AWOL China bosses flag unique key-man risks

24 August 2018

Casino operator Landing has lost half its market value amid news that its chairman is unreachable. It’s the second such case in three days. Overdependence on top executives continues to plague many Chinese companies, and they’re exposed to hazards uncommon in other markets.

Hong Kong office space gets unneeded bitcoin lift

23 August 2018

Cryptocurrency exchange operator BitMEX is paying a record $344 a square foot per year to rent in the world’s priciest commercial property market. Chinese capital controls and rising interest rates haven’t cooled things off. The city’s real estate is a safer bet than bitcoin.

Easing could re-inflate China’s housing bubble

9 August 2018

Beijing wants more active fiscal policy to buttress growth. A crackdown on shadow banking, plus mortgage curbs, have bit into frothy real estate. Unfortunately new money tends to pour into property. Recent rules might slow speculation, but a price rise looks hard to avoid.

Sale can’t erase mark of 666 from Jared Kushner

6 August 2018

Selling the troubled New York skyscraper lifts financial pressure off the family of Donald Trump’s son-in-law but not the stain. The president’s young adviser layered conflict-of-interest concerns on an inflated investment. Buyer Brookfield brings adult supervision to the plot.

Brookfield pays dearly to enter the home

1 August 2018

The $16 bln infrastructure investor is making a detour to pick up Canada’s Enercare. A renter of residential water heaters and air-conditioning systems sits oddly inside an owner of utilities, roads and railways. Its steady growth is valuable, but a 53 pct premium is extravagant.

Activists finagle deal in toppy real-estate market

31 July 2018

Brookfield is buying Forest City, owner of a hodge-podge of assets including the New York Times building, for $11.4 bln. The 27 pct premium allows Starboard to exit with a profit. Rising rates and other heady markers mean the deal may signal a peak in property values, too.

IWG suitors need sparkle to make takeover work

18 July 2018

Four bidders circling the shared office provider are hoping to unlock the toppy valuation of rival WeWork. A 2.9 bln pound offer would allow founder and part-owner Mark Dixon to retire in style. But to get a decent return, buyers need leverage and a plan to ramp up earnings.

Hutchison’s $3 bln Italian buyout is a good call

3 July 2018

The Hong Kong conglomerate is buying Russian-backed partner Veon out of their Italian mobile JV, Wind Tre. That is a bold step amid political instability and intensifying competition. But the deal looks cheap, and could prove shrewd for new CK Hutchison boss Victor Li.

IWG profit flub takes heat out of bidding war

27 June 2018

The serviced-office provider said profit this year would be lower than expected because it needs to invest more and revamp drab space. The miss suggests competition from rivals like WeWork is hotting up. That will also give private equity bidders the upper hand in takeover talks.

College dorms play host to financial keg party

25 June 2018

Greystar is paying a reasonable-sounding $3.1 bln for Education Realty’s student-bunking business. The astronomical cost of college is prompting changes to the market, though, such as kids telecommuting to class. It could deprive university real estate of its youthful glow.