2017 has been a hectic year, but now it’s finally time for it to come to an end! With that said, many stories have made headlines this year in CRE. So which ones were the biggest that really impacted the industry? Below are 7 of the biggest stories that changed and made CRE this year!
Very recently, the Senate passed the tax reform bill. The bill added a change that would benefit real estate investors, stating that businesses would be able to take advantage of the tax break. This change would surely benefit those who are already wealthy, especially in the CRE industry. There would be a tax reduction by the end of the year, and the tax reform would help out middle and upper class families.
After Amazon announced that it was going to build a second headquarters, cities started aggressively competing for the spot! Cities were throwing creative pitches on why Amazon should choose them; this incredible $5 million investment would give 50,000 jobs, economic opportunities, and more! These incentives have driven cities, big and small, from all over the country to create proposals. We won’t find out who will win the economic prize til sometime next year.
We can’t not mention one of the country’s greatest disasters this year. Hurricane Harvey destroyed homes, and Texas will take a while to recover. The disaster is also one of the costliest storms in U.S. history, totaling nearly $200 million in losses. The storm has caused home sales to decline, as well as employment. However, once the state completes recovery, Texas will most likely see a short-term economic boom in the market.
We millennials aren’t the only ones affected here! An overwhelming amount of people in the U.S. are spending more than 30% of their income on solely rent. South Florida is feeling the impact of this since a third of its renting population spends over half their income on rent. Some cities are taking charge by changing building codes, securing funding, and creating affordable apartment complexes. However, this crisis needs more attention from city officials in order for this crisis to come to an end.
This fact most likely won’t surprise anyone—foot traffic in stores are down, and online shopping is a force that can’t be stopped. More people are actually shopping from their smartphones, smaller brands are doing pretty well, and of course, Amazon killed it this year. However, a surprising fact is that sales on Thanksgiving Day online was actually higher than online sales during Black Friday. Consumers are able to get deals at almost any time, so it looks like Black Friday might just die out sooner than we think.
Retail is constantly shifting and evolving. E-commerce and fast fashion are powerful and have caused a lot of retailers to change their business models. Despite a lot of store openings this year, many retailers have called it quits. These include Sears, Teavana, JC Penney, Kmart, The Limited, Michael Kors, and Ann Taylor. Although brick-and-mortar is all about the shopping experience and sometimes convenience, it looks as though BAM might be losing its momentum.
One of the biggest and noteworthy deals of the years, Amazon purchased Whole Foods this summer and completely changed the M&A game. With the emergence online grocery services, Amazon made a great move by acquiring Whole Foods. Following the acquisition, Whole Foods slashed prices on some items and has continued to do so throughout the holiday season. So the question we all have is, what’s next?