The Daily Ten – TikTok Deal, American Offices sit empty, Facebooks Infinite Office, Half U.K firms plan hiring freeze & cut…
The Daily Ten
1. Millions Are House-Rich but Cash-Poor. Wall Street Landlords Are Ready. | WSJ
Hardships caused by the coronavirus pandemic are likely to force a lot of sales and create new renters
Americans with mortgages have accumulated nearly $10 trillion in home equity thanks to a decade of rising home prices. Yet millions of them have fallen behind on mortgage payments and risk losing their houses.
It is a potential bonanza for rental-home investors. Since the coronavirus pandemic began, big single-family landlords have raised billions of dollars for homebuying sprees.
2. America’s Offices Sit Half-Empty Six Months Into the Covid-19 Pandemic | WSJ
U.S. stores and factories are getting back to normal occupancy, but offices are lagging.
Six months after coronavirus lockdown orders closed workplaces across the country, most offices in the U.S. are still quiet.
Data from Brivo, a company that provides access-control systems for workplaces, shows that “unlocks” at offices—when someone uses their credentials to enter an office—in late August were down 51% from the end of February. By comparison, visits to manufacturing and warehouse locations, where fewer jobs can be done remotely, remained down by a third
3. TikTok set to IPO globally if Trump approves deal with Oracle, Walmart | CNBC
President Donald Trump is expect to decide on TikTok’s fate in the U.S. in the next 24-36 hours, sources told CNBC’s David Faber.
To address ownership concerns, ByteDance plans to do an initial public offering of global TikTok on a U.S. stock exchange, according to people familiar with the matter. Oracle will also own a minority stake that will be less than 20% of the new global TikTok, two of the people said. Walmart will also take a stake, though its size is still unknown, according to two of the people.
The Treasury Department sent major revisions about security issues on the TikTok/Oracle term sheet Wednesday night, sources told CNBC’s Sara Eisen. ByteDance has fully agreed to those revisions, the sources said, although it’s unclear what the changes entailed.
Trump has been meeting with Cabinet members and other advisers as he decides whether or not to approve the deal, according to others familiar with the matter, who asked not to be named because the talks are private. There are mixed points of views among his advisers, who include Secretary of State Mike Pompeo, Secretary of Treasury Steve Mnuchin and Jared Kushner, the president’s son-in-law, one of the people said.
4. Unable to Pay Rent, Small Businesses Hope for a Deal With Their Landlord | New York Times
Months of pandemic-related closures have left many business owners too deeply in debt to survive without concessions or deferrals.
In March, when the Boston restaurateur Garrett Harker and his partners shut down their seven restaurants after Massachusetts issued lockdown orders, Mr. Harker assumed the closures would be painful but temporary.
Six months later, three of Mr. Harker’s restaurants, including the flagship Eastern Standard — once described as the “perfect restaurant” by The Boston Globe’s food critic — remain shuttered. Mr. Harker and his landlord for those three restaurants are in a standoff: He can’t afford to pay the six-figure arrears he has accrued while his restaurants remain shut, and the landlord, he said, has refused to grant a deferral or discount.
“We’re probably going to lose money for another year to a year and a half,” Mr. Harker said. “It doesn’t work financially to reopen without a new lease.”
Similar sagas are playing out nationwide, as Main Street businesses — especially music clubs, gyms, restaurants, bars and others that were forced to close by the coronavirus pandemic — try to figure out how, or if, they can dig out of debt.
Similar sagas are playing out nationwide, as Main Street businesses — especially music clubs, gyms, restaurants, bars and others that were forced to close by the coronavirus pandemic — try to figure out how, or if, they can dig out of debt.
5. Almost Half U.K. Firms Plan to Cut or Freeze Hiring, CBI Says | Bloomberg
Almost half of firms plan to cut hiring or not recruit at all over the next year, the U.K.’s biggest business lobby group said, adding to the gloom surrounding the country’s job market.
While 51% of companies said they plan to expand or maintain recruitment levels, 46% said they would not, according to the Confederation of British Industry’s annual survey, which drew responses from 248 firms. The positive balance of 5% was down from +56% last year, the CBI said.
The survey comes three days after official data showed the U.K. has shed 700,000 jobs since the start of the coronavirus pandemic, with the unemployment rate increasing to 4.1% from 3.9%.
Economists warn that might be the calm before the storm, predicting as many as 3 million people may be out of work by the end of the year, up from 1.4 million currently. That’s because the government’s furlough program, currently supporting 1 in 10 jobs, is due to end on Oct. 31.
6. AI-powered weight training startup Tonal raises $110 million amid home workout boom | Venture Beat
AI gym equipment startup Tonal today nabbed a $110 million round from new and existing investors. A spokesperson says the capital will enable Tonal to accelerate its marketing efforts, scale its supply chain and logistics, and roll out software upgrades and new workout content.
Shelter-in-place orders and office closures motivated by the pandemic have sent fitness equipment sales skyrocketing over the past few months. A report commissioned by eBay found that between March and April of this year, home gym sales increased up to 20 times in some categories compared with the same time frame last year. NPD Group reported that in March alone, fitness equipment sales rose 130% year-over-year, with benches up a whopping 259%.
Tonal, which says sales are up 12 times year-over-year, plans to collaborate with the Mayo Clinic on a clinical trial exploring physical therapy applications, the results of which are expected to be released in early 2021. The company is also expanding its presence in the hospitality space, with installations in the Four Seasons Palo Alto, Andaz Scottsdale Resort and Bungalows, the Waldorf Astoria Boca Raton Resort and Club, Proper Hotel and Residences, and the JW Marriott Anaheim.
Tonal’s $2,995 equipment, which attaches to any wall with two studs, lets bodybuilders lift up to 200 pounds in one-pound increments. Adjustable arms and 17 different sensors support over 170 leg, arm, shoulder, back, core, and chest workouts. Tonal says its system of magnets and algorithms makes thousands of calculations a second to adjust on the fly, delivering inertia-free resistance in a form factor smaller than a flatscreen TV.
7. Boston Robotics delivers plan for logistics robots as early as next year | TechCrunch
Boston Dynamics is just months away from announcing their approach to logistics, the first real vertical it aims to enter, after proving their ability to build robots at scale with the quadrupedal Spot. The company’s new CEO, Robert Playter, sees the company coming into its own after decades of experimentation.
Playter, interviewed on the virtual main stage of Disrupt 2020, only recently ascended from COO to that role after many years of working there, after longtime CEO and founder Marc Raibert stepped aside to focus on R&D. This is Playter’s first public speaking engagement since taking on the new responsibility, and it’s clear he has big plans for Boston Robotics.
The recent commercialization of Spot, the versatile quadrupedal robot that is a distant descendant of the famous Big Dog, showed Playter and the company that there is a huge demand for what they’re offering, even if they’re not completely sure where that demand is.
“We weren’t sure exactly what the target verticals would be,” he admitted, and seemingly neither did the customers, who have collectively bought about 260 of the $75,000 robots and are now actively building their own add-ons and industry-specific tools for the platform. And the price hasn’t been a deterrent, he said: “As an industrial tool this is actually quite affordable. But we’ve been very aggressive, spending a lot of money to try to build an affordable way to produce this, and we’re already working on ways to continue to reduce costs.”
8. Facebook’s Infinite Office is a virtual office space for the WFH crowd | Engadget
A couple of years ago, Facebook announced Oculus for Business, a software suite for enterprise-grade VR. But today, at Facebook Connect, the company is introducing a new virtual office experience for the work-from-home crowd. It’s called Infinite Office, and it promises to make WFH a lot more immersive.
With Infinite Office, you can put on the headset and be transported to a virtual office space that you can make as big or small as you wish. You can also add multiple customizable screens, which mimics a multiple monitor setup. The company has already begun experiments that incorporates Infinite Office with Spatial, a collaborative AR platform that lets you have virtual meetings. You can see how Spatial works with Passthrough below.
9. Real Estate Roundup: Industrial Real Estate Grabs Attention Of Big-time Investors | Yahoo Finance
It’s no secret that industrial real estate has thrived during the pandemic. Supply chain management, warehousing and distribution are viewed as vital to the economy now and in the future.
E-commerce sales, after all, are expected to increase 18% this year to $710 billion, according to real estate firm JLL. Online sales don’t work without a robust industrial real estate infrastructure serving as the foundation.
For those who still have doubts, a quick look at which investors are bullish on industrial real estate might dispel those concerns. These are investors who are attracted to a sector that’s produced the highest return of any commercial real estate sector, according to Motley Fool.
The Chicago billionaire investor Sam Zell this month filed plans for an IPO to raise $300 million to make acquisitions in the North American industrial real estate space.
Zell built his fortune in the 1990s as the founder of several real estate firms bearing the Equity name, each focused on a different sector — residential, multifamily and office. Zell is also no stranger to freight, having participated in 2018 in a $200 million investment in RailUSA, which has been an active buyer in the short-line railroad space.
10. Even Fidelity’s $230 Billion Star Manager Has Robinhood Anxiety | Bloomberg
Will Danoff has been wondering why billions of dollars keep flowing out of the Contrafund, the giant mutual fund he manages at Fidelity Investments. Performance isn’t the problem. He’s up 21% this year, trouncing the S&P 500’s 6.2% return. His conclusion: Today’s kids want something sexier.
“There’s a demographic issue,” Danoff, who has beaten the benchmark by an average of more than 3 percentage points annually over three decades, said in a Bloomberg Front Row interview. “We need to appeal to the Gen Z-ers and the younger generation as well, and luckily I think our app is quite good. But you know, a typical Gen Z-er may not be as interested in owning a mutual fund.”
That assessment, from one of Fidelity’s biggest stars, captures the angst of an entire industry. For years, traditional mutual funds have been losing favor. Many investors were turned off by chronically poor performance, and others objected to paying commissions or annual fees that often approach 1%.
There’s now less money in actively managed U.S. equity funds than in low-cost alternatives such as index funds and exchange-traded funds that track the market instead of trying to beat it. More recently, young investors have flocked to Robinhood Markets, making commission-free trades with a few taps on their smartphones.