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 saw big gains in technology companies that sent major U.S. stock indexes to more record high closes on Wall Street. Apple, already the world's most valuable publicly traded company, added another 2.9 percent Monday. Google's parent company Alphabet rose 1.7 percent. Health care companies and banks also did well. Biogen climbed 3.5 percent and Morgan Stanley rose 2.8 percent.
Monday, the Standard & Poor's 500 index rose 20.31 points, or 0.8 percent, to 2,453.46. The Dow Jones industrial average added 144.71 points, or 0.7 percent, to 21,528.99. The Nasdaq composite jumped 87.25 points, or 1.4 percent, to 6,239.01. The Russell 2000 index of smaller company stocks rose 11.35 points, or 0.8 percent, to 1,418.08.
For the year, the S&P 500 is up 214.63 points, or 9.6 percent. The Dow is up 1,766.39 points, or 8.9 percent. The Nasdaq is up 855.90 points, or 15.9 percent. The Russell 2000 is up 60.95 points, or 4.5 percent.
Rates rise at US Treasury auction to highest since fall 2008 -- Interest rates on short-term Treasury bills rose in Monday's auction to their highest levels since October 2008. The Treasury Department auctioned $39 billion in three-month bills at a discount rate of 1.01 percent, up from 0.99 percent last week. Another $33 billion in six-month bills was auctioned at a discount rate of 1.12 percent, up from 1.10 percent last week. The three-month rate was the highest since those bills averaged 1.25 percent on Oct. 20, 2008. The six-month rate was the highest since those bills averaged 1.40 percent on Oct. 27, 2008. The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,974.47, while a six-month bill sold for $9,943.38. That would equal an annualized rate of 1.027 percent for the three-month bills and 1.142 percent for the six-month bills. Separately, the Federal Reserve said Monday that the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, stood at 1.21 percent on Friday, up from 1.19 percent at the start of last week on June 12.
Rio Nuevo Board Meeting will be held Tuesday, June 20, 2017 1:00 PM at Arizona State Building, 400 W Congress, Suite 222, Tucson, AZ Click here for agenda: 2017-06-20-Agenda
Experts Weigh In: Amazon to buy Whole Foods for $13.7 billion “The ramifications for all of retail are seismic – not just retailers that sell grocery, but for everyone. Also, we wonder if purchasing the high-end grocer represents part one of a two-part act on Amazon’s part to expand its grocery arm. Said differently, the acquisition gives CEO Jeff Bezos a weapon to attract a customer he largely already caters to (the majority of PRIME members make more than $100K per year). But if the goal is to fully compete against Wal-Mart (and the low-end), then could Dollar General be next on Amazon’s buying list to go after an arguably larger part of the U.S. population? Stay tuned.”
3 Big Reasons Why Amazon Needs Whole Foods “Amazon has been trying unsuccessfully to break into the grocery industry for 10 years. It launched AmazonFresh in Seattle in 2007 to see if it could persuade consumers to buy bananas online the same way they buy toothpaste online. While AmazonFresh has expanded to Los Angeles and San Francisco, it hasn't really caught on across the country.” (CNBC)
Everyone’s Asking San Francisco: Can You See a Bubble if you’re in a Bubble? “The spreading grip of the technology sector on the San Francisco Bay Area means the boom reaches to every service sector that well-paid techies consume. But what that really means is that when a tech boom becomes a bubble, it’s a real-estate bubble, a restaurant bubble, a luxury-vehicle bubble, even a public-services bubble, writes Charles Hugh Smith.” (MarketWatch)
CoWorking Spaces Spread to the Suburbs “Communal co-working office spaces such as the ones offered by shared-office giant WeWork Cos. are red hot in big U.S. cities like New York. Now they are making inroads in the New Jersey suburbs. Co-working startup Vi Coworking LLC opened a site in June at a redevelopment project at Fort Monmouth, after finding success with a 5,000-square-foot co-working space it launched a little over a year ago at the Bell Works redevelopment.” (Wall Street Journal, subscription required)
Commercial Mortgages: Commercial Real Estate Values Are Peaking “Much like one of Tennessee's state songs ‘Rocky Top,’ commercial real estate values are peaking and it is a little rocky at the top. It is not uncommon to read a headline reporting surging stock, gold or bond prices while simultaneously reading about investors’ fear that a great drop off is imminent. The same is true of commercial real estate. The more values surge, somehow, there is greater fear that a cliff is right around the corner.” (Richmond Times Dispatch)
Office Oversupply Looms, but Global Economies Look Solid, Commercial Real Estate Economist Says “As the world’s economies rebound, developers have embarked on a construction spree that will create a “scary” amount of office space, says Kevin Thorpe, global chief economist at commercial real estate brokerage Cushman & Wakefield. Some 700 million square feet of office space is under construction worldwide, and Thorpe fears an oversupply. ‘This massive wave of supply is absolutely going to create pain in the world’s office sector,’ Thorpe said Thursday at the National Association of Real Estate Editors’ conference in Denver.” (Chief Investment Officer)
Architect Rafael Vinoly Talks About 432 Park Avenue, New York “Architect and former Wallpaper* Awards judge Rafael Viñoly worked with the developer team, Macklowe Properties and the CIM Group, to produce the design for an impressive 96-story high slender structure, featuring elegant 10ft by 10ft square windows. In this short film (below), Wallpaper* catches up with Viñoly in his studio in New York to hear the thinking behind New York's tallest skyscraper—as well as the tallest building in the Western Hemisphere—behind One World Trade Center.” (Fortune)
Women in Business Q&A: Heidi Burkhart, President and Founder, Dane Real Estate “Heidi Burkhart is the President and Founder of Dane Real Estate. Burkhart formed Dane, an affordable housing real estate brokerage, in 2008 when she was 26. Today the company has facilitated the closings in excess of 11,000 affordable housing units and over $1.5 billion in transactions. Dane has had tremendous success rehabilitating properties nationwide but focuses heavily on the New York City area.” (Huffington Post)
Can Airbnb Professionalize Without Losing the Personal Touch? “Airbnb was born under the banner of the "sharing" or ‘on-demand’ economy, and much of its immense brand cachet was built on travelers’ desire to ‘belong’ rather than just be tourists. But as the company works to standardize customers' experiences across an array of different rentals, the company might be eroding some of the warmth that set it apart from traditional hotels.” (Fortune)
Tax Developments Could Place Chill on Real Estate Deal Flow “Commercial real estate deal makers are facing a potential tax change that could severely impact profits, and even place a chill on commercial real estate investment overall. Taxes on carried interest, the profits secured by general partners, have been stable at 20 percent since the 1990s. Now, there are proposed changes in the works that, if enacted, could see that tax raised to 39.6 percent, almost doubling the tax general partners pay on investment profits. Some fear this change could place a chill on deal makers’ willingness to make bold investments in new projects.” (Commercial Observer)
Queens Landlord Demands Tenants Prove Their Immigration Status or Face Eviction “Prove you're a citizen — or get out. A letter from a Queens landlord to tenants of a Corona building raises the threat of eviction to anyone who can’t show they’re in the U.S. legally. The notice, sent to residents of all 23 apartments at the corner of 42nd Ave. and Junction Blvd. last week, demands each leaseholder appear at the building’s management office with photo ID, Social Security card, ‘proof of your status in US (Green card or Passport)’ and proof of employment.” (New York Daily News)