(FROM THE WALL STREET JOURNAL 4/1/15)
The Big Get Bigger
CBRE Group Inc., the world's largest commercial
real-estate-services firm, is making a further push into managing
facilities for big corporations by agreeing to buy Johnson Controls
Inc.'s workplace solutions business for $1.48 billion.
The deal, announced Tuesday, will increase the amount of real
estate and corporate facilities managed by CBRE to 5 billion square
feet from 3.8 billion square feet.
The deal comes as CBRE and other real-estate-services firms seek
recurring sources of fee revenue so they aren't so reliant on sales
and leasing commissions. Many firms are expanding
property-management businesses partly to meet the growing need of
big corporations to outsource their real-estate operations.
CBRE's purchase of the Johnson Controls unit is expected to
close in the fall. Once it does, about half of CBRE's revenues will
come from contractual work. In 2006 the firm got 21% of its revenue
from contractual work.
The Johnson Controls unit "is a business we've long admired,"
said CBRE Chief Executive Bob Sulentic. Shares were up over 6%
Tuesday.
-- Bob Tita
Airbnb Battles Critics
Airbnb, an online listing service for short-term accommodations,
has long been criticized for driving up apartment rents.
New research, commissioned by the company from an academic at
the University of British Columbia, shows that Airbnb pushes up
rents only slightly in some major cities across the country.
Critics say that people who lease apartments and rent them out
to tourists through Airbnb are willing to pay more rent, driving up
prices for everyone. Critics say landlords put units on Airbnb
themselves instead of renting them, decreasing the supply of
long-term rentals.
But research by Thomas Davidoff, an assistant professor at the
Sauder School of Business, found the impact isn't big. For example,
in New York, Airbnb increases the price of a one-bedroom unit by
about $6 a month. In San Francisco, he found that it increases
rents by on average about $19 a month.
"So Airbnb is touting a study they paid for that finds that
Airbnb increases rents for regular people all over the country?"
said a spokesman for Share Better, a coalition for fair housing.
"Airbnb is fueling an affordable housing crisis from New York to
California, making it harder for everyday people to make ends
meet."
-- Laura Kusisto
Finding Comfort in
Student Housing
Investors are getting more comfortable with student housing.
Freddie Mac's sale last month of $734.5 million in commercial
mortgage backed securities was primarily backed by about 8,800
units of student housing owned by Kayne Anderson Real Estate
Advisors LP.
Freddie Mac has been buying and securitizing loans
collateralized by student housing since 2009. But until now student
housing mortgages have made up small parts of mortgage backed
securities pools.
In this month's deal, more than 80% of the $734.5 million pool
was made up of student-housing mortgages and the collateral is all
owned by Kayne Anderson.
"This isn't an alternative asset class anymore," said Albert
Rabil III, Kayne Anderson CEO.
-- Peter Grant
Access Investor Kit for CBRE Group, Inc.
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http://www.companyspotlight.com/partner?cp_code=P479&isin=US12504L1098
Access Investor Kit for Federal Home Loan Mortgage Corp.
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http://www.companyspotlight.com/partner?cp_code=P479&isin=US3134003017
Access Investor Kit for Johnson Controls, Inc.
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http://www.companyspotlight.com/partner?cp_code=P479&isin=US4783661071
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