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.

Tuesday, the Dow Jones industrial average rose 164.84 points, or 0.9 per cent, to 17,721.25. The Standard & Poor’s 500 index rose 19.73 points, or 1 per cent, to 2,061.72. The NASADQ composite index rose 38.69 points, or 0.8 per cent, to 4,872.09.

Benchmark U.S. crude oil climbed $1.81, or 4.5 per cent, at $42.17 a barrel in New York. Brent crude, the international standard, rose $1.86 to $44.69 a barrel in London. In other energy commodities, heating oil rose 6 cents to $1.276 a gallon, wholesale gasoline rose 3 cents to $1.534 a gallon and natural gas rose 9 cents to $2.004 per thousand cubic feet.

US budget deficit up sharply to $108 billion in March — The federal government’s budget deficit rose sharply in March, pushing the deficit for the first six months of this budget year above the same period a year ago. The Treasury Department says the deficit for March totalled $108.0 billion. That marks the biggest March deficit in four years and was more than double the imbalance in March 2015. The large jump from a year ago reflected calendar shifts, which had made the 2015 deficit look smaller because $36 billion in benefit payments were shifted into February. (AP)

Goldman Sachs to Pay $5 Billion in U.S. Justice Dept Mortgage Bond Pact “Goldman Sachs Group Inc (GS.N) has agreed to pay $5.06 billion to settle claims that it misled mortgage bond investors during the financial crisis, the U.S. Department of Justice said on Monday. The settlement, which Goldman disclosed in January, stems from the firm’s conduct in its packaging, securitization, marketing and sale of residential mortgage-backed securities between 2007 and 2009, the Justice Department said. Investors suffered billions of dollars in losses from the securities bought during the period, the department said.” (Reuters)

Forget Flipping Houses—These Retail Investors Flip Mortgages “While titles and deeds establish property ownership, notes — the financial agreements between lenders and home buyers — set the terms by which a borrower will pay for the home. Financial institutions have long passed them back and forth as they rebalance their portfolios. But the trade in delinquent notes has exploded in the post-financial-crisis world. As government entities like Fannie Mae and Freddie Mac have struggled with the legacies of the housing bust, they’ve sold billions of dollars’ of delinquent notes to big institutional investors, who resell them in turn.” (MarketWatch)

Union Investment Expands Property Portfolio in Boston “Since its acquisition of The Godfrey Hotel in Boston, the company’s first ever purchase in the States, Union Investment has felt particularly at home in New England. The company has now acquired its second property in Boston for approximately $452 million. Developed by Skasnka and only completed at the end of last year, the office newly built at 101 Seaport Boulevard will join the portfolio of open-ended real estate fund Unilmmo: Europa.” (Property Magazine)

Walgreens—Rite-Aid Deal Depends on Selling Stores “Announced mergers do not always become completed mergers. Deals are often subject to regulatory approval, shareholder votes and changes in circumstances in the time between when a deal is announced and when it is expected to close. In this climate, who is to say that Action Alerts PLUS holding Walgreens Boots Alliance’s $17.2 billion (including debt) bid to take over Rite Aid is immune from similar challenges? This year has already seen mergers challenged due to a mix of regulatory concerns.” (The Street)

Annaly Capital to Buy Hatteras Financial for $1.5 Billion “Annaly Capital Management Inc., the largest real estate investment trust that buys mortgage debt, agreed to purchase Hatteras Financial Corp. for $1.5 billion to expand and help diversify its holdings. The offer values Hatteras at $15.85 a share. Annaly will acquire the Winston-Salem, North Carolina-based mortgage REIT using a combination of cash and its own shares, the companies said in a statement on Monday.” (Bloomberg)

Port Authority Pays for Old Conde Nast Office to Sit Empty “More than a year after Condé Nast moved from Times Square to One World Trade Center, its new landlord, the Port Authority of New York and New Jersey, continues to shell out more than $3 million a month to cover the cost of the media giant’s previous lease. By the end of 2015, the Port Authority had paid $47.6 million to cover Condé Nast’s 840,000-square-foot lease at 4 Times Square, a 48-story office tower owned by the Durst Organization, according to information provided by the authority.” (Crain’s New York Business)

We Went Inside New York City’s Latest Luxury Skyscraper, Which Is One Giant Marble Block “Architect David Chipperfield’s latest skyscraper won’t feature a glass facade like normal skyscrapers. Instead, both the interior and exterior walls will be made of a marble mosaic. Chipperfield has received more than 100 awards, including the RIBA Stirling Prize. His new apartment building, called the Bryant, will open in spring 2017 and live on the last bit of real estate lining Bryant Park in New York City’s midtown. Tech Insider recently toured one of the model units, which will sell from $2 to $16 million. Take a look inside.” (Business Insider)

Use FHA Duplex Financing to Become a Real Estate Investor “Real estate investors in most cases need at least 25% of the purchase price as a down payment and possibly 35%. But investors willing to occupy one unit of a duplex or similar small multifamily property can get Federal Housing Administration insured loans for as little as 3.5% down. FHA loans are also suitable for borrowers with lower credit scores, and people just getting started in real estate investing.” (The Street)

Allen Morris Plans Midtown Atlanta Apartments, Offices “The Allen Morris Co. has unveiled development plans for Star Metals, a $210 million mixed-use development in the West Midtown neighborhood of Atlanta. The project will consist of a multifamily building, along with an office building directly across the street, with ground-floor retail. The multifamily component will feature 409 rental units, and offer residents a rooftop club room and amenity deck, theater, Bocce ball court, yoga studio, poolside movies at night, community garden and greenhouse.” (Multi-Housing News)

U.S. Office National Vacancy Rate Upticks in Early 2016 “According to CBRE, vacancy for the U.S. office market inched up by 10 basis points (bps) during the first quarter of 2016 (Q1 2016), rising to 13.2%. Even with the increase, the national office vacancy rate remains at the lowest level since 2008. Despite the slight increase, vacancy continued to improve in the majority of U.S. markets, with rates falling in 33 markets, rising in 25, and remaining unchanged in five. Suburban vacancy remained at 14.7% while downtown vacancy increased by 10 bps, to 10.4%.” (World Property Journal)

Environmental groups sue over pollution from airliners — A coalition of environmental groups sued federal regulators Tuesday over long-sought pollution standards for airliners and cargo planes. The Center for Biological Diversity and Friends of the Earth filed a lawsuit in U.S. District Court in Washington. The groups allege the Environmental Protection Agency has unreasonably delayed for years using the Clean Air Act to enforce limits on heat-trapping greenhouse gas emissions from aircraft. Aviation accounts for about 5 per cent of global carbon emissions, with U.S.-owned airliners emitting about 30 per cent of all aircraft pollution worldwide. (AP)

TEMPE, AZ – The Friendship House at Royal Oaks Memory Care facility in Sun City, Arizona, recently was named Best Medical Office Project of the Year by NAIOP, the Commercial Real Estate Development Association, Arizona Chapter. NAIOP is one of the largest and most prestigious real estate organizations in North America.

Led by Sundt Construction Inc. (www.sundt.com) as the general contractor, the $13.6 million project received the high honor for its construction as a superior facility that provides memory care in a residential setting, moving away from the skilled-care model that has been the standard in retirement communities.

The 53,000-square-foot facility, located near the center of the 38-acre Royal Oaks community, was designed to provide lifestyle-focused accommodations for residents with varying levels of cognitive needs. The new design concept allows for more efficient staffing and flexibility in a comfortable setting that stresses the individualized needs of residents. Personalization is achieved through four “neighborhoods” of 14 residents each that have distinct interior design themes and create smaller scale living environments.

Since 2000, Sundt has been the general contractor for numerous projects on the Royal Oaks campus, including the construction of new garden homes, an assisted living and life enrichment center, dining and wellness venues and a two-level parking structure. Sundt also renovated the Health Care Center.

The architect for Friendship House was Todd & Associates with interior design services by Thoma-Holec Design, both from the Phoenix area.

Steve Kozachik is a member of the Tucson City Council in Arizona, representing Ward 6. He was elected to the council in 2009. He is 60 years old and has a B.A. in Public Administration and an MED in Higher Education Management.

Steve has worked for the University of Arizona since 1988 in the Department of Intercollegiate Athletics. He is the Associate Director of Athletics for Facilities and Project Management, responsible for overseeing project management from design through occupancy. Prior to that he worked in Industrial Relations for ASARCO and ran a small business (Long John Silver’s).

Steve’s interests include all forms of athletics, primarily long distance running and biking.

In his April 11^th Newsletter, Kozachik writes in opposition to the 30% Broadway Widening project, given its name due to the 33% reduction in scope, that was compromised from the original 2006 voter approved RTA project. Kozachik is a persistent voice of opposition on Tucson City Council:

While some of the supporters of the 30% alignment have nuanced arguments, as I was sitting through the Broadway public hearing last week, it struck me that what we were hearing was a point-counterpoint of

Each brought their unique – and not unsupportable – perspectives to the table. There wasn’t much common ground for us to grab onto in order to come up with a compromise that’ll work for everyone.

The project first came onto the public radar screen with the 1997 county bond that was adopted for Broadway enhancements. No alignment or scope for the project was identified in that $25M commitment.

The project was refined in the 2006 RTA ½ cent sales tax vote. Broadway was one of 35 roadway projects included in the $2.1 billion RTA voter-approved package. It’s $74M of over 2 billion dollars of projects. On the ballot, it was identified as an eight lane, 150’ wide roadway, sold to the voters based on 10-year-old traffic projections that have since been debunked. Two years ago during the current design process, the RTA agreed that building what was on the ballot made no sense from the standpoint of need or cost. The argument can no longer be made that we’re doing this because it’s what the voters asked for.

On April 19^th, we will be asked to approve funding for city real estate to begin the property acquisition process. Many business operators from along the corridor have been waiting for the taxpayers to come in and buy them out due to the impact of the project. Investments have largely been avoided as a result. It has become a self-fulfilling cause and effect; that is, you know you’re a short-timer on the corridor, so why invest in the upkeep of your building when you know you’ll be relocated at taxpayer expense anyway?

The RTA and County have drawn a line in the sand saying anything less than six travel lanes will ‘not be funded.’ Traffic projections still do not demonstrate the need for what’s being proposed.

On the day the 2006 RTA measure was passed, traffic volume on this segment of Broadway was just under 45,000 trips per day. As you can see from the projected traffic volumes shown above, the eastern segment of the Broadway project won’t hit those numbers again for 20 years. And the western segment, where much of the demolition’s proposed, won’t get there until well beyond 2040, if ever. All of the modeling shown in the Design Concept Report assumes 22% growth in auto travel. Even if that happens, in 2040 the western segment still won’t be at the level of travel they were a decade ago when this was voted on.

Progressive urban planning creates destinations. The RTA/County model is to demolish existing businesses and homes and lay in new asphalt so the cars they assume will appear can move through the area more quickly. It’s the tension between those models that’s causing the heated debates on how this project moves ahead. That tension is being driven by the RTA/County insistence that we build what we don’t need, and won’t need when our unborn children are graduating from college.

2015 RTA Board Members:
City of Tucson Mayor
Jonathan Rothschild,Chair

Town of Marana Mayor
Ed Honea, Vice Chair

Town of Sahuarita Mayor
Duane Blumberg, Second Vice Chair

Pima County Board Supervisors
Ramón Valadez, Member

Pascua Yaqui Tribe Vice Chairwoman
Catalina Alvarez, Member

Tohono O’odham Nation Chairman
Edward Manuel, Member

City of South Tucson Mayor
Miguel Rojas, Member

Town of Oro Valley Mayor
Satish Hiremath, Member

Arizona State Transportation Board Representative
Mike Hammond, Member

Pima Association of Governments / Regional Transportation Authority
Farhad Moghimi, Executive Director

Come out on April 19^th to hear the discussion. I’m hopeful TPTB huddle up ahead of that and see they need to consider what the people have been asking for since our April 30, 2012 rally outside of the church at Campbell and Broadway – resurface the current curb-to-curb cross width, preserve the option for high capacity transit, and enhance the existing areas outside the curb lines. And have money left over for other RTA projects.

But the RTA and county are mandating what’s not necessary or desired. Just because you spend a lot of taxpayer money doesn’t make it good urban planning.

I’d toss in one more group. The roadway is a part of the Rio Nuevo District. Many of the storefronts that are now covered by stucco may still have the original brick underneath. Or under the stucco could be stone, rock walls, or patterned stucco that was redone 25 years ago. The point is that of course they need a facelift – but that doesn’t equate to applying eye-liner with a bulldozer.

Rio gets tax money from this area. Save the buildings that many call old and worn, get an investment influx from Rio to restore the original brick look (like what happened to Chicago Store downtown–also in the Rio District) and this area becomes what it once was –a destination, walkable, and a shopping haven. Here are some graphic examples of what’s being portrayed as old and worn down buildings, but behind the stucco façade is the rich history the buildings can once again display – if the people holding the purse strings choose to allow this stretch of corridor to become the example of good urban planning the people have been asking for.

Steve Kozachik

This project is a Regional Transportation Authority Plan  roadway improvement managed by the City of Tucson that will widen Broadway: Euclid to Country Club to a 6-lane arterial, with bike lanes, sidewalks, and landscape.  The project is currently in the design phase.  Acquisition is to begin in 2016.  Construction is not anticipated until late 2017-2018.

Visit the project’s Design and Construction web site at www.broadwayboulevard.info for the most current information, to find contact emails and phone numbers, and to provide comments.  Details about the RTA plan are available at www.RTAmobility.com.

It’s not too late to be heard, questions and comments can be submitted to the Tucson Department of Transportation before April 15^th. Take 1-2 minutes now and submit a quick “I support the Broadway 30% plan” by clicking on the following link: https://www.broadwayboulevard.info/comments.php