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Commercial Real Estate Week in Review

Week in Review for February 16 – 22:

 – According to the first three paragraphs of a Wall Street Journal article (you have to have a “Pro” account to read the rest), many investors are missing opportunities for high yields among smaller-cap REITs.

– Private commercial real estate service Cushman & Wakefield expands its presence in Central Pennsylvania, opening a local office in Harrisburg. John Derham, Cushman & Wakefield’s local director, tells CoStar Group the expansion is a response to the Harrisburg market’s growth, the fastest in the state.

– High-profile Federal Reserve officials voice opposition to the organization’s ongoing bond-buying practices, which are intended to stimulate the economy and hold down interest rates, says Reuters. The Fed had previously indicated it would maintain its stimulus program until the U.S. unemployment rate drops substantially. The Fed’s bond-buying is considered significant to many parts of the commercial real estate sector, including the REIT market.

–  In Manhattan, Comcast Corp (NASDAQ: CMCSA) acquires the iconic 30 Rockefeller Plaza. This purchase coincides with Comcast’s $16.7 billion purchase of General Electric (NYSE: GE)’s 49% stake in NBCUniversal, the building’s tenant.  

–  Forbes’ Brad Thomas suggests the possible merger of OfficeMax (NYSE: OMX) and Office Depot (NYSE: ODP) may pose a risk to shopping-center REITs. The consolidation of these retailers could lead to store closures in some locations, writes Mr. Thomas, especially as the combined entity competes with Staples (NASDAQ: SPLS) and online retailers such as 

– Canada maintains its role as the largest foreign investor in U.S. real estate, accounting for a third of the country’s foreign CRE investment in 2012, reports Jones Lang LaSalle.

– According to Fitch Ratings, REITs are unlikely to become the subject of leveraged buy-outs (LBOs) anytime soon. The news that Michael Dell would attempt to take Dell, Inc. (NASDAQ: DELL) private via an LBO has prompted speculation over which other industries will be affected by this buy-out strategy. Because of their strong returns, leverage limits, and the strength of the CMBS markets, analysts expect REITs to avoid this practice.

Starwood Property Trust nears finalization of a $450 million construction loan for New York’s Hudson Yards project, spearheaded by Related Companies.

– In Orlando, Florida, shopping center REIT Pennsylvania Real Estate Investment Trust (NYSE: PEI) sells its Orlando Fashion Square property to UP Development for $35 million, reports the Orlando Sentinel.

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