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The Daily Ten – WeWork to turn profit, ‘No vaccines, No service,’ China turns to Starbucks for diplomacy…

January 14, 2021by Steve NsonNews

The Daily Ten – WeWork to turn profit, ‘No vaccines, No service,’ China turns to Starbucks for diplomacy…

January 14, 2021 by Steve Nson
Thursday, January 14th, 2021

The Daily Ten

1. WeWork CEO says company on track to be profitable by end of year | New York Post

WeWork Chief Executive Sandeep Mathrani said Wednesday the co-working firm is “completely on track” to reach profitability by the fourth quarter of this year, and its office spaces in China have nearly bounced back to pre-pandemic levels.

Mathrani took the helm at WeWork in February to turn around the company after a disastrous period in which WeWork scrapped its initial public offering, fired its founder Adam Neumann and faced bankruptcy.

In an interview during the Reuters Next conference, Mathrani said he expects many Americans will still want to work in an office environment despite the ongoing pandemic.

“We’ve seen mental health reasons for people who want to come back to work [in the office],” he said. “I’m a firm believer that the office is an important part of everyday living.”

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2. Big Real-Estate Firms Turn Buyers of Their Own Shares | WSJ

The companies say stock-market investors have undervalued their property holdings

Some publicly traded real-estate companies have found a buyer for their shares, despite empty offices, deserted hotels and reeling shopping malls—the companies themselves.

Real-estate owners, including SL Green Realty Corp. and Healthcare Trust of America Inc., say stock-market investors have significantly undervalued their property holdings compared with what they could fetch in the private market. While some of these companies authorized buying back their own shares even before the coronavirus pandemic, they are betting that with a vaccine rollout under way, travel, office work and mall shopping will bounce back after a terrible year for major property types.

Brookfield Asset Management Inc. took this strategy one step further last week, when it offered to buy the nearly 40% stake in Brookfield Property Partners LP it doesn’t already own for $5.9 billion. Brookfield Property, which BAM spun off about eight years ago, is one of the world’s largest real-estate investors and owns the giant office and retail complexes Brookfield Place in New York and London’s Canary Wharf.

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3. ‘No vaccine, no service:’ How vaccinations may affect travel plans in the future | CNBC

While interest in getting vaccinated for Covid-19 might vary, the desire to travel largely does not.

study released by Hilton last October indicated that 95% of Americans miss traveling. But those who either can’t or won’t take a Covid vaccination may find themselves shut out of some routine travel experiences, such as flying, cruising and going to business conferences.

Here’s how the choice of whether to vaccinate (or not) may affect travel plans in the future.

Though no country has announced a mandatory vaccination requirement yet, it’s “very possible” that some will once vaccinations become freely available, said Sharona Hoffman, co-director of the Law-Medicine Center at Case Western Reserve University School of Law.

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4. Logistics real estate activity breaks records in Q4 | FreightWaves

Cushman & Wakefield report notes jump in net absorption even as supply added

Logistics activity continues to dominate the industrial real estate markets, according to global commercial real estate services firm Cushman & Wakefield (NYSE: CWK). The firm’s fourth-quarter outlook report highlighted the impact e-commerce is having on demand for logistics space.

Warehousing, distribution space in high demand

The report said the fourth quarter was the strongest on record for positive net absorption, the amount of space leased over that vacated, at 90 million square feet. The warehousing and distribution segment drove positive net absorption for full-year 2020, as the sector absorbed 267 million square feet of space.

New leases of 179 million square feet were signed in the fourth quarter, pushing the full-year total to an all-time high of 659 million square feet. Logistics real estate accounted for 86% of all leasing activity in 2020, with the report pointing to digital sales as the catalyst for increases in demand for e-commerce space and new leases signed by third-party logistics companies.

A well-run e-commerce fulfillment platform requires square footage, proximity and inventory.

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5. Manhattan Bargain-Hunters Drive a 94% Jump in Apartment Leases | Bloomberg

Manhattan apartment leases almost doubled last month, a sign that sliding rents and landlord freebies are drawing tenants to New York’s costliest borough.

The number of new deals jumped 94% from a year earlier to 5,459, the biggest annual increase since April 2011, appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate said in a report Thursday.

About 54% of those leases came with move-in incentives such as free months or payment of broker fees. With the value of those perks factored in, the median rent tumbled 17% to $2,800, the firms said.

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6. China President Xi Jinping is trying to recruit a new U.S. liaison: Starbucks | Fortune

President Xi Jinping called on Starbucks Corp. to help improve China-U.S. ties, striking a business-friendly tone as the Biden administration prepares to take over in Washington.

“I hope Starbucks will make active efforts to promote China-U.S. economic and trade cooperation and the development of bilateral relations,” Xi said in reply to a letter from Chairman Emeritus Howard Schultz. Xi’s letter was dated Jan. 6 and published Thursday by the official Xinhua News Agency.

“China has embarked on a new journey of comprehensively building a modern socialist country, which will provide a broader space for companies from all over the world, including Starbucks and other American companies, to develop in China,” Xi wrote.

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7. U.S. startups raise record investment in 2020 | GeekWire

When the pandemic hit the U.S. earlier this year and tech companies began laying off thousands of employees, analysts warned of a bumpy ride ahead for startups and venture capital investment.

To say the industry stabilized would be an understatement.

New Q4 numbers from the latest PitchBook-NVCA Venture Monitor show that U.S. startups broke another record in 2020, reeling in $156.2 billion, topping the previous mark set in 2018 ($142.7 billion) and last year’s total ($138.1 billion).

“Tragic as the pandemic has been, it has created a global need to re-think and re-set many practices and behaviors,” Joe Horowitz, managing general partner at Icon Ventures, said in a statement. “This has spurred significant demand for new innovative solutions and a digital acceleration, fueling the pace of venture capital investment.”

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8. Cities prepare for home delivery by drone | Axios

The Federal Aviation Administration has released new and looser rules for flying drones over highly populated areas and at night, effectively laying a welcome mat for future aerial deliveries of takeout food, Amazon packages, prescription drugs — you name it.

Why it matters: While the prospect of Jetsons-style convenience with less street gridlock is tantalizing, there are still plenty of logistical hurdles, and it will take some time for cities to figure out how to manage low-altitude air traffic as routinely as they do today’s road traffic.

Driving the news: FAA rules — handed down late last month — will require drones flying over cities to use remote identification technology, so people on the ground can tell what they’re doing and who owns them.

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9. Bitcoin in Race for Adoption Before Central Banks Launch Digital Currencies: Australia’s Macquarie | CoinDesk

With a runway of a year or more before the Federal Reserve and other major central banks can launch digital currencies, bitcoin and other private cryptocurrencies could gain a foothold in electronic commerce.

Central banks like the Federal Reserve and European Central Bank risk losing the digital-currency race if private cryptocurrencies like bitcoin become too entrenched in electronic commerce, according to a new research note from the Australian investment bank Macquarie.

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10. Opendoor’s Window Appears to Be Closing | WSJ

Pandemic erodes online real-estate platform’s first-mover advantage

What’s more risky than betting on one pandemic frenzy? Automated home flipper Opendoor Technologies OPEN -3.10% embodies three of them at the same time.

Back in September, the online real-estate platform made a splash announcing its merger with one of venture capitalist Chamath Palihapitiya’s prized special-purpose acquisition companies as a means to a public offering. The move essentially combined a few of 2020’s hottest trends: a SPAC, a disruptive touchless technology and housing fever. Together, they have brought much hype to an unproven business that might have lost a key competitive edge.

While the onset of the pandemic temporarily derailed the iBuying business, which is focused on buying and reselling homes electronically, more recent trends have played to its strengths. Low interest rates and the rise of remote work have brought new buyers into the market, while skyrocketing home prices have enticed homeowners to try to cash out while demand is hot.

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