Bookmarks: 5 Interesting Articles That May Help You This Week

Each week, I select a few articles that rise above the fray and hopefully help you on your journey in the CRE world. They pull from one of four "corners:" corporate real estate, technology, management science and anything positive. I welcome your comments on these articles.

1. Could a Ski Hill, a Theme Park and 40 Water Slides Save the American Mall?

American Dream, the most expensive U.S. mall ever built, opened Friday. It is the first in the U.S. to devote more space to entertainment, restaurants and theme-park rides than to traditional retail. Given that more than a few people have declared the mall dead, the entire industry is glued to the spectacle to see if its formula could save the American shopping center from oversupply and the rise of online shopping.

The nearly 90-acre site, built over swampland next to the Meadowlands Sports Complex, is opening in phases stretching to 2021, at a cost so far of $5.7 billion. The total could reach $6 billion, after amenities such as a planned hotel and convention center are added.

Construction crews are working on more attractions, many targeted to families. Legoland Discovery Center and the Sea Life Aquarium will open in the spring. Children will be able to play around in the fuselage of a Boeing 737 at KidZania, due to open in 2021. Minigolf enthusiasts can tackle Pig Island and other challenges at the Angry Birds-themed 18-hole indoor golf course.

2. How to Weigh the Risks When Choosing Your First Job

Overwhelmed by student debt and underwhelmed by your career choices? It’s normal to feel anxious. The economy is undergoing a radical transformation as technology changes the nature of work and some jobs disappear. To make matters more complicated, most industries are dominated by a handful of superstar, productive firms that shower their employees with most of the economy’s wage gains. If you work at these firms, you get more raises, learn useful skills, and get a stamp of approval that offers credibility throughout your career. If you don’t, your career and wages could stagnate.

Picking the right path has never felt more crucial to lifelong success. But fear not — you can make the right choice by applying some basic risk management tools to your most valuable asset: your future earnings.

The simplest and most effective risk management tool is setting clear goals. It can also be the hardest part because most people don’t know what they want. I still marvel at people I knew in college who at 22 knew they wanted to be an equity research analyst, have three children, and live in the suburbs. Many of them got all of these things. I don’t know if they are happy or not. But no doubt, possessing such clear goals increased the odds of getting what they wanted.

3. How Much Inheritance Is Too Much?

When Lynn Chen-Zhang’s older son was in third grade, he came home from school one day wondering why he bothered studying so hard: A classmate had told him that because he had wealthy parents, he’d be all taken care of in life. What was the use?

This question worried Chen-Zhang and her husband—who run a financial-advisory firm in Portage, Michigan—and prompted them to have a talk with their two boys about their financial future. They planned to pay for as much schooling as their kids wanted, but beyond that, Chen-Zhang told me, their message was, “You're on your own. And don’t expect any inheritance from us.”

Chen-Zhang’s sons ultimately studied plenty hard—now in their early 20s, they are both establishing careers in finance—so if she and her husband were to give them any help with money, she guesses it’d come in the form of a gift to any future grandkids, such as a contribution to a college-savings plan. “I think it is not in the next generation’s best interest to leave them a large sum of money,” she said. “From a selfish standpoint, I want my kids to be successful. I want them to be contributing members [of] society.”

Chen-Zhang and her husband’s approach may be a reversal of the typical way of thinking about inheritances, but it is one that is also preoccupied with heirs’ well-being. Some affluent parents are focused not on whether their kids will have enough, but on ensuring that they won’t have too much.

4. Institutions Continue to Raise Real Estate Allocations in 2019

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An annual report from Hodes Weill and Cornell University shows real estate remains a preferred asset class among global institutions. Global institutions continue to raise their allocations to real estate, according to the latest Allocations Monitor survey from Hodes Weill & Associates and the Columbia University Baker Program in Real Estate.

The survey, based on responses of 212 institutional investors, found that institutions increased their weighted target allocations to real estate to 10.5 percent in 2019—a 10-basis-point increase compared to last year, which translates into a dollar volume of roughly $80 billion to $120 billion of additional capital coming into the space.

The 10-basis-point increase is slightly smaller than in prior years. Between 2017 and 2018, target allocations increased by 30 basis points and between 2016 and 2017, they increased by 20 basis points. Looking forward, respondents said they expect allocations in 2020 to the sector is expected in 2020 to grow 20 basis points.

5. Moving a Major Corporate Headquarters? A Look at One Shift in Progress

Paint giant Sherwin-Williams, now based in Cleveland, is rumored to be on the hunt for a new headquarters location. Cities reportedly at the top of the company's list are Atlanta, Dallas and Charlotte, North Carolina, three cities that have become magnets for other corporate expansions and relocations.

While the rumors continue to swirl over Sherwin-Williams' next move, CoStar analysts have taken a look at those three contenders and examined which buildings there would be best suited to land Sherwin-Williams or another major corporate tenant.

If Sherwin-Williams or any other major corporation chooses to relocate or expand, Atlanta is an obvious choice for a new home. The region is already home to a multitude of Fortune 1000 companies, renowned universities that produce top talent and, of course, the world’s busiest airport.

Any large company can pick from several options for a new headquarters. Tower Square, previously occupied by AT&T, provides major tenants with 1.4 million square feet of space that is ready for move in. Icahn Enterprises is underway on a renovation of the ground-floor retail and plaza space that should be completed in the next few quarters. The tower stands on top of a subway station and is positioned in Atlanta’s hottest neighborhood: midtown.

Your success blesses others. I wish you a great a hugely impactful week!

Ken Ashley