Real Estate Daily News Buzz December 7, 2015

Reserve-White-house-domeReal 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.

Friday, the Dow Jones industrial average soared 369 points, or 2.1%, to 17,847. The Standard & Poor’s 500 index jumped 42 points, or 2.1%, to 2,091. The Nasdaq composite increased 104 points, or 2.1%, to 5,142.

The price of U.S. crude fell $1.11, or 2.7%, to $39.97 a barrel in New York. Brent crude, a benchmark for international oils, slid 84 cents, or 1.9%, to $43.

Wholesale gasoline fell 2.6 cents, or 2%, to $1.27 a gallon. Heating oil declined 1.6 cents to $1.342 a gallon. Natural gas inched up 0.5 cents to $2.816 per 1,000 cubic feet.

Strong job gains send US stock market sharply higher — The stock market had its biggest gain since September after the U.S. government reported another solid month of job gains. The encouraging news on the economy Friday paved the way for the Federal Reserve to begin nudging interest rates back toward normal levels at its policy meeting later this month. Energy stocks didn’t join the rally, and fell instead as the price of oil took another tumble after OPEC said it wouldn’t curb production. Bond prices rose. The yield on the 10-year Treasury note fell to 2.27%.

US trade deficit up 3.4 per cent in October to $43.9 billion — The U.S. trade deficit widened in October, the Commerce Department said Friday, as exports of U.S. goods fell to the lowest level in more than four years, a reflection of the impact of a weak global economy and stronger dollar. The trade deficit, the difference between exports and imports, widened 3.4% in October to $43.9 billion, compared to a revised $42.5 billion deficit in September. Exports of goods and services fell 1.4% to $184.1 billion while exports of just goods dropped an even bigger 2.4% to $123.8 billion, the lowest level since June 2011.

American Homes 4 Rent to Acquire American Residential “American Homes 4 Rent, the largest publicly traded U.S. single-family home landlord, agreed to acquire a smaller competitor, American Residential Properties Inc., in a deal valued at $1.5 billion, including debt. The combined company will own more than 47,000 homes in 22 states and will have a stock-market value of $5.5 billion, according to a statement Thursday.” (Bloomberg)

Janet Yellen Takes Issue with Citi’s Recession Call “It’s not every day that the chair of the Federal Reserve takes a public opinion on a specific piece of Wall Street research. But Thursday, Janet Yellen found herself compelled to do just that. In testimony before Congress’ Joint Economic Committee, Yellen was asked by Rep. Pat Tiberi about a piece of research released by Citigroup’s rates strategy team Monday. Specifically, Tiberi, an Ohio Republican, wanted to know what Yellen made of Citi’s conclusion that there is a 65 percent chance of a U.S. recession in 2016.” (CNBC)

AIG Dismisses Four Top Executives in its Real Estate Group “American International Group Inc. has dismissed four top executives in its real-estate investment division, including the group’s chief executive officer, according to people familiar with the matter. The New York-based insurer is also letting go AIG Global Real Estate’s chief counsel, its head of Americas and the real-estate group’s head of Mexico investments, these people said.” (Wall Street Journal)

Staples Ready to Offer FTC More Assets to Win Office Depot “Staples Inc. is ready to offer additional concessions to resolve U.S. antitrust concerns that its proposed takeover of Office Depot Inc. — which would leave one national office-supply chain — would threaten competition, according to two people familiar with the matter. Representatives from Staples and Office Depot are meeting this week with Federal Trade Commission officials ahead of a Dec. 8 deadline for the agency to decide whether to approve the $6.11 billion deal, one of the people said.” (Bloomberg)

These Will Be the Hottest Real Estate Markets in 2016 “Jonathan Smoke, Chief Economist with put forward his predictions for markets that “are poised for a for substantial growth in prices and sales” next year. He looked at which markets are seeing 60% more listing page views than the national average, and the inventory of which is moving 16 days faster than the national average, and found the following 10 markets can be expected to take off.” (Fortune)

KoP Rail Could Add Nearly $1B in Real Estate Value: Study “The addition of rail into King of Prussia could add an estimated $540 million to $946 million to the assessed value of existing real estate in that section of Upper Merion over two decades and encourage developers to construct upwards of 8 million square feet of new space valued at $840 million, according to a study of the proposed project. The rail line could also alleviate long, frustrating hours spent slogging slowly along the Schuylkill Expressway where rush hour is seemingly every hour these days.” (

3 Strategies for Attracting Real Estate’s Future Leaders: Adapting to the Millennial Mindset “We’re seeing it everywhere: the American workforce is in the midst of an ‘aging out’ epidemic. According to the Department of Labor, last year more than 40 percent of workers aged 55 and above were still in the labor force—the highest since the early 1960s. I can say from experience that the residential real estate industry is feeling this age crunch.” (RisMedia)

Dollar General Sets 900 Openings, Names New CEO “Dollar General Corp. said Thursday it plans to increase square-footage growth 7% next year after boosting growth 6% this year. Todd J. Vasos, CEO of the Goodlettsville, Tenn.-based chain, said the company anticipates opening 900 new stores in 2016, compared with 730 this year — in a combination of urban, suburban and rural locations. The company said it expects to begin shipments in February from a new distribution facility in San Antonio, Texas.” (Supermarket News)

RXR Close to Inking $1.7B Contract to Buy 1285 Sixth “Scott Rechler’s RXR Realty is close to entering contract to buy a 39-story office tower at 1285 Sixth Avenue from AXA Financial and JPMorgan Chase for about $1.7 billion, The Real Deal has learned. The sale, if it goes through, would be one of the largest deals for a single New York City building ever. The 1.61 million-square-foot tower, located between West 51st and 52nd streets, is fully occupied, with Swiss bank UBS AG serving as the 700,000-square-foot anchor tenant.” (The Real Deal)

Starbucks Prospers by Keeping Pace with the Coffee Snubs “Starbucks’s strong financial performance seems all the more remarkable considering that the retail sector is struggling, and that the company had seemed to have lost its way when Mr. Schultz rejoined it in 2008. But last year, same-store comparable sales grew 8 percent, not just in growth markets like China and Japan, but in the United States. And rather than cede the high end to competitors like Stumptown, Blue Bottle or Intelligentsia, Starbucks took them on.” (New York Times)

Another month of solid US hiring clears way for Fed hike — If the Federal Reserve needed any final evidence that the economy is ready for higher interest rates, it got it on Friday. A solid November job gain of 211,000 showed that despite weak overseas growth and struggling U.S. factories, the U.S. economy appears healthy enough to withstand a Fed hike from record-low rates later this month. The unemployment rate remained at a low 5 per cent in November for a second straight month, the government said Friday. More Americans started looking for jobs, and nearly all found them. Average hourly pay rose, though modestly, and the government revised up its estimate of job growth for September and October. Employers have now added a robust average 213,000 jobs a month over the past six months.