October 16, 2019
K.C. Conway is presenting at the CCIM Global Conference in San Diego this week, so his commentary will return next week. (Click here to view his slide deck: Preparing for a Market Correction: Exploring Exposure Risk.)
Following are some highlights from this week's Wednesday Insights article list that correlate to areas of ACRE’s recent research: The struggles of WeWork, a unique affordable housing solution, and the beginning of corporate earnings season.
WeWork continues to struggle, yet it’s largest source of capital, SoftBank Group, is moving towards a bid to take a controlling stake in the company. Former CEO Adam Neumann’s voting shares would be diminished significantly by additional equity from SoftBank. Interest in the struggling coworking giant, however, does not end with SoftBank. Additional banks, led by JPMorgan Chase, are competing to provide billions more in debt as a bailout. WeWork might not have enough funds to operate into December, and another year in business would require approximately $3 billion in additional capital.
A construction management firm in South Florida is looking towards prefabricated construction as an affordable housing solution. While traditional construction methods bring numerous building trades to a site in sequence, the new model calls for most work to be done in factories and shipped as needed. “The exterior walls, load bearing components, wind resistance requirements, plumbing and electrical systems, air conditioning duct work, wall panels and home amenities are designed, engineered and manufactured off-site for final assembly on site.” Cruise ships, for example, are built in a similar fashion. While it is unlikely to replace traditional construction methods for high-end custom homes, prefabricated construction offers an affordability solution, especially for hurricane-prone areas in need of rebuilding.
J.P. Morgan Chase exceeded analyst expectations and posted record revenue on Tuesday October 15. The impact of lower interest rates was offset by the strength of its consumer banking operations, citing growth in home loans, auto loans, and credit cards. “The consumer remains healthy with growth in wages and spending, combined with strong balance sheets and low unemployment levels,” said CEO Jamie Dimon in the earnings release. “This is being offset by weakening business sentiment and capital expenditures mostly driven by increasingly complex geopolitical risks, including tensions in global trade.”
NATIONAL NETWORK MEMBER NEWS
LEGAL / RISK MANAGEMENT
WORKFORCE DEVELOPMENT (powered by CCAP)
ACRE Industry Presentations
Colliers International Atlanta Broker Event
Economic Update: Utah Chapter of CCIM Institute
Salt Lake City, UT
NALCOM: CRE and Economic Outlook
Colliers International Client Conference: Texas-nomics
Keynote Address: St. Louis Chapter of CCIM Institute
St. Louis, MO
PERE Private Equity Conference: New York
6th Annual NAI Florida Conference