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.
Thursday, the Dow Jones climbed 155.73 points, or 0.9%, to 17,481.49. The Standard & Poor’s 500 index rose 13.37 points, or 0.7%, to 2,040.59. The NASDAQ composite picked up 11.01 points, or 0.2%, to 4,774.99.
Benchmark U.S. crude rose $1.74, or 4.5%, to close at $40.20 a barrel. Brent crude, the benchmark for international oils, gained $1.21, or 3%, to $41.54 a barrel in London. In other energy trading, wholesale gasoline picked up 2 cents to $1.44 a gallon and heating oil rose 2 cents to $1.25 a gallon. Natural gas gained 7 cents, or 3.6%, to $1.94 per 1,000 cubic feet.
U.S. Single-Family Housing Starts Hit 9-Year High “Construction on new houses rose in February to a five-month high, led by the biggest increase in single-family units in nine years. Housing starts climbed 5.2% last month to an annual pace of 1.18 million, the Commerce Department said Wednesday. Economists polled by MarketWatch had expected starts to rise at a seasonally adjusted 1.15 million rate. The faster pace of construction signals that housing will remain one of the best-performing segments of the U.S. economy and help underpin growth in 2016.” (MarketWatch)
Vote-By-Mail deadline for Presidential Preference Race – If you still have your mail-in ballot for the March 22 Presidential Preference Election at time of reading this, it’s too late to mail it! You can drop it off at any of the Pima County Recorder’s Early Voting sites – 240 N. Stone Ave., 6920 E. Broadway Blvd. (Suite D), and 6550 S. Country Club Road. Voters also can drop off their vote-by-mail ballots at any polling location next Tuesday. Independents cannot vote in this election. Pima County Recorder’s Office polling location search here: https://1.usa.gov/1SSXGYd
Tucson Fire submits plan to help balance City budget – Tucson Fire Department (TFD) Chief Jim Critchley is offering a $4.7 million budget reduction plan to help the City of Tucson balance its budget for the next fiscal year and beyond. In a recently-released memo to staff, Critchley’s plan includes job reclassifications and possible demotions, reducing overtime, not filling some vacancies, converting some commissioned fire prevention inspectors to civilian positions, and other cost savings. City Manager Michael Ortega asked all City departments for plans to cut costs to help trim a projected deficit of $25.6 million for the new fiscal year that begins July 1.
Bill awaiting Governor Ducey’s signature could strip funding to local governments for non-compliance – Arizona lawmakers Wednesday sent Gov. Doug Ducey a bill that would allow him to demand that local government ordinances fall in line with state policies, or those governments could lose state funding. SB 1487 allows any legislator to ask the Attorney General’s Office to investigate whether a local ordinance or policy is contrary to state law. If the attorney general finds the state statute is being violated, the local government would be given 30 days to bring practices into compliance, or the state treasurer could stop providing state funds and redistribute that money to other communities. Under the bill, if a local government disagrees, the case would go directly to the Arizona Supreme Court for a final decision. The bill could affect the nearly $50 million in state-shared revenue the City of Tucson receives annually from the state.
AC Marriott Hotel Construction Downtown Tucson to alter traffic – In order to facilitate concrete delivery for construction of the AC Marriott Hotel at Fifth Avenue and Broadway Boulevard, some modifications to vehicular traffic will be needed this week. Starting tonight at 10:30, through 4 p.m. tomorrow, the left lane of Broadway will be closed between Sixth Avenue and Fifth Avenue. On Saturday, the left lane of Broadway will be closed again between the hours of 6 a.m. and 4 p.m. The daily left lane closure on Broadway will continue on weekdays between the hours of 6 a.m. and 4 p.m. That restriction will be in effect until the middle of next year.
Caesars Could Face $5B Hit from Unit’s Bankruptcy “Caesars Entertainment and its private equity backers could be on the hook for up to $5.1 billion in potential damages over a series of corporate deals that a court-ordered examiner said Tuesday led to a $18 billion bankruptcy protection filing by the casino company’s operating unit. Richard Davis and a team of lawyers have spent a year probing whether Caesars stripped away prime properties such as the LINQ Hotel & Casino in Las Vegas and left the company unable to pay a mountain of debt.” (Reuters)
Exploring the Connection Between Food and the Built Environment in New Orleans “A renewed focus on food is providing a bounty of innovations in real estate, attendees of the ULI Food and Real Estate Forum in February learned while sharing development experiences. The event was held at the Renaissance New Orleans Arts Hotel, and discussions included enhancing health, environmental sustainability, social equity, food system security, and investment.” (Urban Land Magazine)
After Making Several Big Deals, Norway’s $880 Billion Pension Fund Manager Has “Limited Enthusiasm” for Property Markets “Not seeing a correction in property prices they expected, investment managers of the world’s largest pension fund, Norway’s Government Pension Fund Global worth roughly $879 billion in U.S. currency, say it may be time to sit on the fence before making any more big bets on the global property markets. The fund returned 2.7% in 2015, helped by its real estate investments, which returned 10%, Norges Bank Investment Management, the fund’s manager, reported this past week.” (CoStar News)
Developers, Microsoft Plan $500M Smart City in Northern Virginia “Gramercy District, a $500 million tech-centric mixed-use development that has Microsoft as one of its investors, is being planned by 22 Capital Partners for Loudoun County, Va., at the terminus of the new Ashburn Metro station on the Silver Line. Construction is expected to begin a year from now on the so-called “smart city”—a 2.5 million-square-foot project on 16 acres that runs along the Dulles Greenway (Route 267), the region’s main highway.” (Commercial Property Executive)
Manhattan Office Investors’ Confidence Rising Despite Signs of Slowdown in Other Sectors: PWC “The luxury residential market is slumping. The retail market is cooling. But investors in the Manhattan office sector still think it’s a great time to be selling. In fact, that sentiment is on the rise. According to Big Four accounting firm PricewaterhouseCoopers, 67 percent of private real estate firms, investment bankers and pension and investment advisers surveyed in the first quarter of this year believe Manhattan office is a sellers’ market. That’s up from 50 percent of investors at the end of 2015.” (The Real Deal)
After its Dream Tenant Bailed on 2 WTC, What Happens to Silverstein Properties’ Tower? “On Friday, Jan. 15 this year, Silverstein Chairman Larry Silverstein received a call from Mr. Murdoch. The News Corp. and 21st Century Fox head told the developer that because of the shaky global economy, his companies were not going to relocate their headquarters from two locations along Avenue of the Americas in Midtown. With financing dependent on a large occupant, this meant that all plans to move ahead would be put on hold until a replacement could be found.” (Commercial Observer)
Excitement Builds as REIT Re-Classification Date Draws Near “Currently lumped into the financial sector, REITs are set to have their own sub-sector with S&P Dow Jones Indices on Sept. 16. Excited yet? You should be. Cohen & Steers’ Thomas Bohjalian expects far-reaching impact since nearly the entire investment community uses Global Industry Classification Standards for its framework for portfolio planning and analysis. He sees three main benefits to REIT prices.” (Seeking Alpha)
New Push to Change Philadelphia Real Estate Taxation “A pair of Philadelphia lawmakers are trying to change the state constitution in Pennsylvania in order to realign how their city levies taxes on commercial real estate. According to a Philadelphia Business Journal report, Reps. John Taylor (R) and William Keller (D) are leading an effort to remove Philadelphia from the state’s uniformity clause, which requires that the commercial real estate tax rate not vary by more than 15 percent from the rate applicable to other real estate.” (National Mortgage Professional)
Investment, Occupational Markets Moving Toward Balance, Says JLL “The dynamics of the world’s dominant real estate markets have begun to shift, from being driven by investment markets strengthened by “a huge weight of money” targeting commercial real estate assets, to one in which occupational markets are showing more momentum, according to the latest Global Market Perspective from JLL. ‘Market fundamentals are improving across all major global regions and property sectors, and recent leasing activity has surprised on the upside,’ the report summarizes.” (Commercial Property Executive)
Average US rate on 30-year mortgage rises to 3.73 per cent — Average long-term U.S. mortgage rates rose this week for the third straight week. Long-term rates have reversed the upward trend that took hold at the start of the year amid economic anxiety and market turbulence. However, rates still remain at historically low levels at the start of the spring home buying season. Mortgage buyer Freddie Mac said Thursday the average rate on a 30-year, fixed-rate mortgage increased to 3.73% from 3.68% last week. The average rate on 15-year fixed-rate mortgages rose to 2.99% from 2.96% last week.
