Real Estate Daily News Buzz March 31, 2016
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.
Wednesday, the Dow Jones industrial average rose 83.55 points, or 0.5%, to 17,716.66. The Standard & Poor’s 500 index gained 8.94 points, or 0.4%, to 2,063.95. The NASDAQ composite index added 22.67 points, or 0.5%, to 4,869.29.
Another gain for US stocks, led by banks and tech companies
Stocks closed higher on Wall Street again, led by banks and technology stocks. Several companies gained ground Wednesday after reporting encouraging financial results. Cruise operator Carnival jumped 6 per cent after reporting results that were better than analysts were expecting. Restaurant chain operator Sonic also rose after posting good results.
U.S. crude rose 4 cents to $38.32 a barrel in New York. Brent crude, the benchmark for international oil prices, rose 12 cents to $39.26 a barrel in London. In other energy trading, wholesale gasoline fell 2 cent to $1.44 a gallon. Heating oil was little changed at $1.16 a gallon. Natural gas climbed 2 cents to $2 per 1,000 cubic feet.
Ross Stores has ambitious store expansion plans for 2016—and sees plenty of potential beyond that. The off-price retailer opened a total of 22 Ross Dress for Less and six dd’s Discounts stores across 15 different states in February and March. The new locations are part of the company’s 2016 expansion plans to add approximately 70 Ross and 20 dd’s Discounts locations throughout the year. Ross Stores currently operates 1,295 Ross Dress for Less stores in 34 states, the District of Columbia and Guam. It also operates 178 dd’s Discounts stores in 15 states. (ABC)
Newcomer to the U.S. retail scene is leveraging one of the hottest trends in beauty right now — Korean skincare — by opening up stores nationwide. Aritaum, a division of South Korean skincare and beauty giant AmorePacific, has been flying under the radar since it opened its first U.S. store in 2014. The company currently operates some 70 locations in the United States and Canada, including freestanding stores as well as in-store shops at such diverse retailers as Bloomingdale’s and H-Mart supermarket. It expects to open 20 locations in 2016. Aritaum is positioned as one-stop shopping destinations for Korean beauty products. The stores carry a curated collection of premium beauty and skincare items from leading Korean brands, along with bath & body and hair care products. As to the brand’s name, Aritaum (pronounced “ar-ree-ta-um”) is derived from the Korean words for “beauty” and “place.” Initially, Aritaum’s U.S. locations operated under the Amore banner. But they are currently being rebranded as Aritaum. The new stores will not only have the new banner, but also feature a sleeker and more modern look. (ABC)
Sportsman’s Warehouse Holdings announced plans for its most ambitious expansion program ever with 11 new stores planned for 2016 following a strong fourth quarter performance. The Midvale, Utah-based operator of 64 stores focused on the categories of hunting, fishing and camping, opened nine stores last year which combined with its strong fourth quarter showing enabled the company to produce record results. The addition of 11 stores this year will give the company, which went public in April 2014, 75 locations in 20 predominantly Western states and Alaska. Fourth quarter net income, adjusted to exclude non-recurring litigation and loan refinancing costs, increased 25.3% to $11.4 million, or 27 cents a share, from $9.1 million, or 22 cents a share, in the fourth quarter the prior year. Full year adjusted net income, which also excludes expenses related to a secondary stock offering in the third quarter of 2015, increased 22.3% to $25.8 million, or 61 cents a share, from $21.1 million, or 50 cents a share. The company believes its full year sales will range from $800 million to $820 million.
Yellen: Economic readings mixed, appropriate to proceed cautiously “The Federal Reserve should proceed with caution in adjusting policy, Chair Janet Yellen said Tuesday, acknowledging that economic and financial conditions are in some respects less favorable now than in December. Yellen, speaking to the Economic Club of New York, noted in prepared remarks that recent readings on the strength of the U.S. economy since the beginning of the year have been mixed. All major U.S. indexes turned positive and Treasury yields hit multi-week lows after the release of Yellen’s remarks.” (CNBC)
CEO leaves US real estate lobby group “Steve Renna, CEO and president of powerful real estate lobby group CRE Finance Council, has left the organization, a spokesperson told IFR on Tuesday. The spokesperson did not say why Renna had gone, but a CREFC member told IFR that he had been asked to leave. The organization styles itself as the main voice of the US$3.4trn commercial real estate industry, and Renna took over as CEO about five years ago in the wake of the financial crisis.” (Reuters)
Prime Finance Lends $230M for National Multifamily Portfolio Buy “New York-based lender Prime Finance provided a joint venture between Providence Management Company and Stonecutter Capital Management with a $230 million mortgage to fund the purchase of 16 apartment complexes across five states, Commercial Observer can first report. Law firm Polsinelli represented Prime in the transaction and helped arrange the three-year bridge loan, which also carries two one-year extension options. Prime originated the funds from its fourth fund.” (Commercial Observer)
Commercial real estate execs present mixed outlook “Commercial real estate associated with health care, suburban retail and the industrial sector are bright spots of Houston’s property market, but office buildings and apartments continue to struggle, panelists at an industry conference said Tuesday. As low oil prices stoke fear and uncertainty about Houston’s economy, industry veterans on a panel at the RealShare Houston conference expressed confidence the energy decline could reverse course by next fall.” (Houston Chronicle)
Crazy Markets Can Build Great Retirements “Let’s hope something ‘bad’ does happen. Crazy markets are what you want as a long-term investor. Don’t believe me? Follow along, and you’ll be convinced. It’s all about volatility, that is, how much an investment goes up and down in price over time. Some investments are very predictable. Bonds, for instance, tend to slowly creep upward.” (Forbes)
Vanbarton Group to Close $1B Fund for Investments in Gateway Cities “Real estate investment and advisory firm Vanbarton Group is nearing the close for a fund in excess of $1 billion, sources have informed Commercial Observer. The fund will be used to finance the acquisitions of commercial properties in core cities including New York and San Francisco in 2016 and 2017, sources said under the condition of anonymity. Vanbarton may use the new fund to fuel its entry into the Miami, Chicago, Los Angeles, Seattle, Boston and Washington, D.C. markets.” (Commercial Observer)
The Apple effect: Cupertino retail project for sale at $1,276 per square foot “Saich Way Station, a 15,673-square-foot strip center at Stevens Creek Boulevard and Saich Way, is on the market for $20 million, according to an announcement from brokerage Marcus & Millichap. The site is notable not only because it is so close to the Apple mother ship, but also because it represents new-construction retail in Cupertino, where new projects are rare. The seller is Borelli Investment Co., which finished the $10.5 million retail center last year.” (Silicon Valley Business Journal)
Developers hope to add 380K sf of retail along Water Street “A proposed zoning change that would allow property owners — including Rudin Management, RXR Realty and Brookfield Property Partners — to add about 380,000 square feet of space along a stretch of Water Street has sparked debate. The Alliance for Downtown New York, Department of City Planning and the city’s Economic Development Corporation sponsored a zoning amendment that would apply to 110,000 square feet of arcades along Water Street between Fulton and Whitehall streets. The land-use application would make way for new retail space built into existing arcade space on the ground floors of several buildings.” (The Real Deal)
General Electric Finds New Home in Boston’s Seaport District “Following January’s announcement that GE would transition its global headquarters from Fairfield, Conn., to Boston, Mass., the $130 billion high-tech global industrial company has found itself a home, acquiring 110,000 square feet in the Seaport District from Procter & Gamble Co.” (Commercial Property Executive)
Prologis sells seven industrial buildings to Miami-Dade firm for $38M “Prologis sold seven industrial buildings in Broward and Palm Beach counties to an investment fund headed by Aventura-based Adler Kawa Real Estate Advisors for a combined $38.3 million. This was the latest deal in a $77 million commercial real estate fund that Adler Kawa plans to finish raising in July. In 2015 under the same fund, it paid $32.25 million for the Yamato Office Center in Boca Raton.” (South Florida Business Journal)
Resolution in FBI-Apple case prolongs larger legal battle — The FBI’s victory in breaking into a killer’s iPhone merely prolongs a battle over how far the government can go to examine private messages, photos and other files. The Justice Department said it no longer needs a court order to force Apple to access the phone. In turn, that means there won’t be ruling on whether a centuries-old law, known as the All Writs Act, provided legal authority for compelling Apple’s assistance. Some in the tech industry worry authorities will now try to pursue a smaller company — one without the financial and legal resources of Apple — to win a favorable legal precedent. (ABC)
Survey: Solid hiring continues despite weak US growth — U.S. companies added 200,000 jobs in March, buoyed by strong gains in construction, retail and shipping, according to a private survey. Payroll processor ADP said Wednesday that financial services firms also posted solid gains, while manufacturing employment barely rose. The figures point to an economy that is continuing to generate steady hiring, despite worries that growth slowed in the first three months of the year, held back by weak overseas economies and cautious consumers. The ADP report comes out two days before the U.S. government’s official jobs report. The ADP numbers cover only private businesses and often diverge from the official figures. (ABC)
Weak global economy is said to threaten government finances — Sluggish global growth threatens to keep governments around the world from being able to pay pensions and bondholders, the chief economist of the Organization for Economic Cooperation and Development said Wednesday. The OECD, representing mostly advanced economies, has lowered its forecast for worldwide economic growth to 3% this year from the 3.3% it estimated in November. When growth is weak, governments collect less revenue and struggle to pay pensioners and meet all their debt payments. (ABC)
Eurozone economic confidence falls to 13-month low — A survey from the European Union’s executive arm showed that economic confidence across the bloc fell in March for a third month running to a 13-month low, the latest in a run of figures to indicate that the recovery is losing pace. In its monthly assessment, the European Commission said its economic sentiment indicator fell 0.9 points to 103.0 in March. The Commission said the deterioration in sentiment was due to lower confidence among consumers as well as managers in the services and construction sectors. The Commission noted that the survey was conducted before the March 22 attacks on the Brussels airport and subway that killed 32 people. (ABC)
Chipotle files trademark for ‘Better Burger’— Chipotle apparently has burgers on its mind. The chain applied for a trademark for “Better Burger” earlier this month, according to a filing with the U.S. Patent and Trademark Office. A spokesman for Chipotle noted the company has already started a pizza chain concept called Pizzeria Locale and an Asian food chain concept called ShopHouse. Chipotle, which has more than 2,000 locations, has surged in popularity by touting fresh ingredients and the flexibility to customize orders. More recently, however, it is fighting to recover from a series of food scares that sent sales plunging. (ABC)
