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E-commerce's next victim: commercial real estate

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The shift to on-line shopping is now striking at the underlying value of malls, and commercial real estate as a whole.

  • About $120 billion in U.S. commercial mortgages mature this year: Borrowers went delinquent on about $2.4 billion of it in June alone, according to Trepp, a real estate data provider, quoted by the WSJ.
  • It was the largest rise in delinquencies in six years, according to Fitch, the rating agency. Fitch's silver lining: it's not as bad as it expected at the beginning of the year.
  • Still, more defaults are coming: The credit industry expects delinquencies on such debt to escalate over the coming year, according to a new poll of portfolio managers, and to spread globally.
  • Look at this number: In the FT, Blackstone executive Nadeem Meghji said the value of regional malls in smaller cities may be down 40% on average over the last two years.
  • We are only seven months into the year: Retailers have announced plans to close 76 million square feet of store space already this year, according to CoStar, a data provider, almost as much as that announced in the whole of 2016.

"Second-order effects": Joe Brusuelas, chief economist at RSM, an auditing firm, tells Axios that the plunge in valuations is likely to spread to office buildings and other commercial real estate. That will then affect surrounding communities. "They won't have those property taxes," he said.

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Trump: Transgender people "disqualified" from the military

SecDef Jim Mattis and Gen. Joseph Dunford.
Secretary of Defense Jim Mattis and Gen. Joseph Dunford. Photo: Andrew Harrer-Pool / Getty Images

President Trump late Friday issued an order disqualifying most transgender people from serving in the military.

"[T]ransgender persons with a history or diagnosis of gender dysphoria -- individuals who the policies state may require substantial medical treatment, including medications and surgery -- are disqualified from military service except under certain limited circumstances."

Why it matters: Anything short of an inclusive policy for transgender troops will be viewed as a continuation of the ban Trump announced on Twitter in August.

Haley Britzky 8 hours ago
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Both Bush and Obama also requested line item veto power

Donald Trump.
Photo: Mark Wilson / Getty Images

President Trump tweeted on Friday evening that to avoid having "this omnibus situation from ever happening again," he wants Congress to re-instate "a line-item veto."

Why it matters: This would allow him to veto specific parts of a bill without getting rid of the entire thing. Trump was deeply unhappy with the $1.3 trillion spending bill approved by Congress early Friday morning, but signed it anyway on Friday afternoon.