Real Estate Daily News Buzz is designed to give news snippets to readers that our (yet to be award winning) editors thought you could use to start your day. They come from various business perspectives, real estate, government, the Fed, local news, and the stock markets to save you time. Here you will find the headlines and what the news buzz of the day will be.
Monday, the Dow Jones industrial average fell 17.12 points, or 0.1%, to 16,449.18. The Standard & Poor’s 500 index lost 0.86 of a point, or 0.04%, to 1,939.38. The NASDAQ composite index rose 6.41 points, or 0.1%, to 4,620.37.
The price of U.S. benchmark oil plunged $2, or 5.9%, to $31.62 a barrel in New York. Natural gas also fell about 6%, dropping 14.6 cents to $2.152 per 1,000 cubic feet. In London, Brent crude fell $1.75 to $34.24 a barrel.
Wholesale gasoline lost 4.9 cents to $1.083 a gallon, heating oil fell 4.2 cents to $1.037 a gallon and natural gas plunged 14.6 cents to $2.152 per 1,000 cubic feet.
Gem Shows Underway in Tucson — The Tucson Gem, Mineral & Fossil Showcase is happening at more than 40 sites, and most shows are free and open to the public. The shows run until Feb. 14, culminating with the Tucson Gem and Mineral Show® opening on the 11th. That event packs the Tucson Convention Center for the final four days of shows, pulling in thousands of treasure hunters from around the world. The latest economic study (2014) from Visit Tucson shows the gem shows account for about $120 million in direct spending for the Tucson region. If you plan to visit the shows, the City offers a free shuttle from 33 stops. Follow the GemRide link below for a schedule or download the Official Tucson
Tucson Gem, Mineral & Fossil Showcase: https://bit.ly/1ld0WP8
Gem Ride: https://1.usa.gov/1UDitx9
Tucson Gem and Mineral Show®: https://bit.ly/1Cb49kv
US consumer spending flat, savings rate at 3-year high — U.S. consumers kept their spending flat in December and instead boosted their savings rate to the highest level in three years. Consumer spending was unchanged in December after rising 0.5% in November, the Commerce Department reported Monday. Incomes increased 0.3%, matching November’s gain. Higher incomes and flat spending pushed the savings rate to 5.5% of after-tax income in December. That was the highest level since December 2012.
US manufacturing weakens in line with China factory slowdown — Factory activity in the world’s two biggest economies — the United States and China — slowed in January, a discouraging trend for the global economy. U.S. factory activity shrank in January for a fourth straight month as a strong dollar and weak demand overseas pinched American manufacturers, the Institute for Supply Management said Monday. The ISM’s manufacturing index ticked up to 48.2 from a revised 48 in December, but any reading below 50 signals a contraction. The index has remained below 50 since September.
US construction spending hit 8-year-high in 2015 — U.S. construction spending rebounded slightly in December, helping push total spending for 2015 to the highest level in eight years. Construction spending increased 0.1 per cent in December after falling in October and November, the Commerce Department said Monday. The December increase was driven by gains in home construction and spending on government projects. That offset declines in spending on private construction of shopping centers, office buildings and hotels.
FelCor Jumps as Investor Seeks Sale of Hotels or Whole Company “FelCor Lodging Trust Inc. rose as much as 9.1 percent after activist investor Jonathan Litt urged the company to consider options to increase shareholder value, such as finding a buyer for hotels including the Knickerbocker in Manhattan or selling itself. Litt, co-founder of Land & Buildings Investment Management LLC, called FelCor shares ‘incredibly cheap.’ The real estate investment trust’s shares had fallen about 48 percent through Wednesday from a peak of $12.23 about 10 months ago.” (Bloomberg)
4 Reasons Passive Investing Makes Sense in Real Estate “The variety of options for investing in real estate has expanded considerably in recent years with the popularity of investment via crowdfunding. This is making it easier for small investors to become involved in the market and to explore the possibilities of passive investment. The strength of the commercial market in recent years makes this type of investment a good idea, for a number of reasons.” (Seeking Alpha)
Related CEO Jeff Blau Says Chinese Real Estate Investment is Drying Up “Amid mounting fears that the recent downturn in China’s economy could hurt investment in US real estate, the developer behind the country’s largest mixed-use project ever—which has been backed in no small part by Chinese investment—said it’s time to start looking elsewhere for funding. Addressing an Urban Land Institute New York forum yesterday, Related Cos CEO Jeff Blau told audiences, ‘we should be looking at other places for capital over the next couple of years.’” (Bisnow)
Circuit City is Back from the Dead Again “Radioshack may have filed for bankruptcy, but that’s not deterring fellow electronics retailer Circuit City from getting back into the retail business. The company, led by Ronny Shmoel and Albert Liniado, will make a comeback this June when its first store opens, according to Twice, a trade magazine that covers tech industry news. Once the top big-box technology retailer, Circuit City filed for bankruptcy in 2008.” (CNBC)
SL Green Shares Slide as CEO Sees NYC Job Creation Slowing “SL Green Realty Corp. slipped 8.1 percent, its biggest decline in four and a half years, after Chief Executive Officer Marc Holliday said he expects job creation in New York to soften, affecting office demand in the city. SL Green, the largest owner of New York office buildings, making its stock a barometer on the city’s office market, was the worst performer in the 22-company Bloomberg Real Estate Investment Trust Office Property Index, which fell 2.7 percent Thursday.” (Bloomberg)
Strong Outlook Seen for California Commercial Real Estate through 2018 “Despite higher interest rates and slower economic growth, confidence on the part of developers indicates a positive outlook for commercial real estate growth through 2018, according to a survey released Tuesday by UCLA economists. The latest Allen Matkins/UCLA Anderson Forecast Commercial Real Estate Survey found ‘continued confidence among developers through 2018, indicating both the probability of new supply and of opportunities for new investment,’ said a statement released by the UCLA Anderson School of Management.” (Times of San Diego)
To REIT or Not to REIT? That Is the Macy’s Question “The Macy’s saga – replete with store closures, slumping revenue and shares, and pressure to maximize the value of its real estate – reminds us that retailers sit at the uncomfortable and continually shifting juncture of boots and bricks: the products they are selling and the brick-and-mortar real estate from which they make those sales in the age of e-commerce.” (Forbes)
VA Proposes Hundreds of Housing Units Plus Services for Homeless Vets at Wet L.A. Campus “Federal officials released a blueprint Thursday that could transform the long-neglected West Los Angeles Veterans Affairs campus into a residential community with hundreds of housing units for homeless veterans and a town center featuring a café, fitness center and cultural facilities. The plan calls for construction of 1,200 units of permanent supportive housing for disabled and traumatized veterans and more than 700 short-term units for homeless veterans while they await their own apartments.” (Los Angeles Times)
American Dream Mega-Mall Adds Huge Primark Store “The American Dream mall will encompass three million square feet when it opens in northern New Jersey in 2017 and occupying 100,000 sq. ft. of that space will be fashion retailer Primark. Primark, a leading European retailer (290 stores in 10 countries) of women’s, men’s and children’s apparel and home good, opened its first two U.S. stores in late 2015 in Boston and the King of Prussia Mall in Pennsylvania. The company has also announced plans for six additional locations in 2016.” (Chain Store Age)
Stressed Out: Is Office Depot the Next RadioShack? “In early 1992, shares of Office Depot traded for over $50 a share. No one knew it at the time, but that would be Office Depot stock’s all-time high. Fast forward 24 years to today — Office Depot stock is now trading for around $5 a share and is part of a group of distressed and “Stressed Out” stocks that TheStreet will be monitoring through these choppy markets. The company has lost around 90% of its value over the last 24 years.” (The Street)
Airlines restore tiny perks, like pretzels, to pacify fliers — After 15 years of near austerity, U.S. airlines are restoring some small perks for passengers crammed into coach. Don’t expect ample legroom or free checked bags. But fliers will find improved snacks, a larger selection of free movies and — on a few select routes — the return of free meals. Monday, American Airlines became the latest carrier to add something back. It announced the return of free snacks in the economy section and more free entertainment options on some aircraft.
Google parent tops Apple as world’s most valuable company — Alphabet, Google’s new parent company, topped Apple as the world’s most valuable business in after-hours trading Monday after reporting surging earnings. Alphabet Inc. earned $4.9 billion in net income on revenue of $21.3 billion in the fourth quarter. If not for employee stock expenses and certain other items, Google said it would have earned $8.67 per share. That figure easily topped the average estimate of $8.10 per share among analysts surveyed by FactSet. The earnings report provided the most detailed breakdown yet on the profits pouring in from Google’s dominant search engine and ad network. (Google reorganized itself under Alphabet last October.) Investors pushed up Alphabet stock $44.23, or more than 5 per cent, to $815 in extended trading.
Hotels expand options to keep guests healthy on the road — Running concierges, a hotel mini bar stocked with produce from the local farmers market and a training wall that comes standard in every room. The hotel industry is moving beyond basement gyms and basic spa menus to accommodate guests’ growing requests to stay healthy while on the road. The trend has been a mainstay at spas and wellness resorts for years, but now hotels frequented by business travelers and families are showing that life on the go doesn’t have to mean sacrificing spin class or a quinoa superfood bowl. Boutique and luxury hotels along with big name brands including Westin and Wyndham have vastly expanded fitness programs and dining options in recent years. The luxury gym Equinox is even opening its own hotel in New York.
China company accused of fleecing investors of $7.6 billion — Police arrested the maverick founder of China’s largest online finance business on suspicion of fleecing 900,000 investors of $7.6 billion, in what could be the biggest financial fraud in Chinese history. State media outlets reported the arrest of Ding Ning and 20 of his employees late Sunday. State broadcaster CCTV aired purported confessions from two former employees at Ezubao, an Anhui Province outfit that rose from obscurity to become China’s largest online financing platform in the span of about 18 months. Ezubao was the most spectacular player in a booming online investment industry that Chinese authorities have been struggling to regulate. Firms ranging from established Internet companies such as Alibaba to virtually unknown upstarts have flooded into the business, promising higher returns than those at state-run banks, which often offer interest rates below inflation.
CDC says Chipotle-linked outbreak of E. coli appears over — Looks like it’s safe to bite into that burrito. The federal agency that monitors public health says the outbreak of E. coli illness linked to Chipotle restaurants that sickened 60 people appears to be over. The Centers for Disease Control and Prevention said Monday the most recent illness reported to the agency started on Dec. 1.
Lumber Liquidators to pay more than $13 million for illegal imports — Lumber Liquidators will pay more than $13 million for illegally importing hardwood flooring, after the company pleaded guilty to environmental crimes last year. The Department of Justice said that Lumber Liquidators made hardwood floors in China from illegally cut Mongolian oak trees in Russia. Those trees are needed to protect endangered Siberian tigers and Amur leopards because their prey eats the acorns from them, the Justice Department said. Lumber Liquidators, which was sentenced Monday in federal court, will pay $7.8 million in criminal fines, more than $1.2 million in community service payments and nearly $970,000 in criminal forfeiture. It will also pay about $3.2 million through a related civil forfeiture. The company also agreed to a five-year probation period.
Dominion Resources buying Questar for about $4.4 billion — Dominion Resources will spend approximately $4.4 billion to acquire Questar in a big reach to the West for the East Coast energy company. Dominion is a power producer in the mid-Atlantic region. Questar is in the Rockies and a principal source of gas supply to Western states. There was a rush of deals last year among energy companies who are bulking up with demand weak and energy prices plunging.
Abbott to buy medical test provider Alere — Abbott Laboratories will buy Alere for $4.8 billion as it tries to expand its medical-testing business. The deal is worth $5.8 billion when restricted stock, stock options and preferred shares are included, the company said Monday. Alere Inc., based in Waltham, Massachusetts, makes tests used to diagnosis the flu, HIV, malaria and several other diseases that are used in doctor’s offices, clinics and at home.
The Southern Arizona CCIM Chapter will be giving its market predictions for 2016 on Tuesday, February 9th at the 25th Annual CCIM Market Forecast Competition, the longest running competition in the nation. There local commercial real estate brokers, lenders and appraisers specializing in the office, retail, multifamily, land, industrial and financing sectors will offer their thoughts, insights and opinions for the new year.
