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.
Friday, the Dow Jones industrial average rose 218.18 points, or 1.3%, to 17,213.31. The S&P 500 gained 32.62 points, or 1.6%, to 2,022.19. The NASDAQ composite climbed 86.31 points, or 1.9%, to 4,748.47.
U.S. crude added 66 cents, or 1.7%, to $38.50 per barrel on the New York Mercantile Exchange Brent crude, which is used to price international oils, gained 34 cents, or 0.8 per cent, to $40.39 a barrel. Wholesale gasoline rose 0.5 cents to $1.444 a gallon, heating oil rose 0.2 cents to $1.218 a gallon and natural gas gained 3.4 cents to $1.822 per 1,000 cubic feet.
Men’s Wearhouse Parent Company is Closing 250 Stores “The parent company of Men’s Wearhouse and Jos. A. Bank is closing 250 stores, unable to stanch chronic sales declines after an ill-advised merger two years ago. Tailored Brands Inc., known as Men’s Wearhouse until last month, said it will close 80 to 90 Jos. A. Bank stores, as well as 58 outlet stores. What’s more, it will shut 100 to 110 MW Tux locations, as it shifts its tuxedo rentals business to Men’s Wearhouse stores and partner Macy’s. No Men’s Wearhouse stores will close given the strong performance of that chain.” (Fortune)
ACA co-ops lose millions in 2015; some expect 2016 profits — The Affordable Care Act’s health insurance co-ops absorbed deep financial losses last year, and 2016 is shaping up to be a make-or-break year for these non-profit alternatives to traditional insurers. Officially called Consumer Operated and Oriented Plans, these still-fledgling insurers were devised during the ACA’s creation to inject competition into insurance markets. But they have struggled from the start to build a customer base from scratch and deal with higher-than-expected expenses, among other problems. Heading into their third full year of operation, the co-ops are adding customers and improving their coverage, but they also face the end of some government programs designed to support insurers as they build business on the ACA’s public insurance exchanges. They will have to determine soon whether their businesses can stand on their own and compete with more established carriers.
Real Estate’s Ticking Bomb: Who Gets Hurt “Commercial real estate had a banner year in 2015, and the fundamentals of high demand and low vacancies are still driving rents higher. There is, however, a catch that could cool the market quickly, at least when it comes to financing. Investors are insisting on high yield, and the bonds backing commercial mortgages are not giving them that, so they are moving on to other products, leaving a big crack in commercial financing.” (CNBC)
ONE57 tower linked to global money-laundering probe “New York’s first billionaires’ building, ONE57, was funded by a subsidiary of an Abu Dhabi company linked to a global money-laundering investigation, The Post has learned. Gary Barnett, of Extell Development, started to build the 75-story skyscraper, at 157 W. 57th St., during the height of the recession when Western funding was scarce.” (The New York Post)
Surging Dollar General to open record number of stores in 2016 “Opening 900 stores a year is a daunting challenge, but Dollar General will likely exceed that figure in 2017 and beyond based on a new long-term financial guidelines the company shard with investors. Plans call for annual sales growth in the range of 7% to 10% driven by the combination of square footage growth between 6% and 8% and same-store sales growth of 2% to 4%.” (Chain Store Age)
Americans’ Home Wealth Recovers $7 Trillion as Prices Firm “Home-price appreciation is a welcome development for households whose nest eggs were shattered by the residential real-estate bust that began a decade ago. The 2006-2009 housing slump reduced wealth by $7 trillion. Since then, the value of homeowners’ equity in real estate has more than doubled from a low in the first quarter of 2009, a Federal Reserve report today showed. What’s more, housing wealth is poised to reach a new record as early as the second quarter, say economists at the Federal Reserve Bank of St. Louis and Pantheon Macroeconomics Ltd.” (Bloomberg)
Manhattan Luxury Rents Slide as Condo Buyers Seek Tenants “A condo-development boom that added thousands of luxury homes to the Manhattan market is benefiting renters willing to pay up for high-end accommodations. Buyers—in many cases out-of-town investors—are taking possession of their new apartments and seeking to become landlords. That’s swelling the number of upscale rentals available and pushing down leasing costs for wealthy tenants.” (Bloomberg)
Detroit Offers an Urban Lifestyle With Affordable Luxury Homes “Last year, Kirsten Iverson and her husband, Marcus, bought a new riverfront home on the east side of Detroit, an area once obscured by junkyards and abandoned industrial buildings. Their 5,050-square-foot home in the gated Morgan Waterfront development has water views, five-bedroom suites, two garages, and a marble foyer with 18-foot ceilings. The couple paid $580,000…” (The Wall Street Journal)
Why these retailers flocked to new north San Jose shopping center “Less than 18 months after acquiring the 14-acre site, the company has the project mostly leased up, with strong soft- and hard-goods interest. Its four mid-box spaces leased quickly to Sprouts Farmers Market, Ross, Homegoods and ULTA; shop space also found takers in Sleep Train, Wells Fargo, Banfield Pet Hospital and The Joint Chiropractic.” (Silicon Valley Business Journal)
The Most Expensive Cities in the World to Live “A stronger dollar has propelled New York and Los Angeles into an annual ranking of the world’s 10 most expensive cities. Singapore took the top spot in the ranking from the Economist Intelligence Unit for the third straight year, followed by Zurich and Hong Kong.” (The Wall Street Journal)
Inside Vornado’s Penn Plaza ‘War Room’ “The company is investing hundreds of millions of dollars into properties in the vicinity of the Penn Plaza district to give the buildings and public spaces “a little TLC,” as company CEO Steven Roth has put it. (The company’s properties span from Fifth to Ninth avenues between 31st and 34th streets). The portfolio is one of the largest concentrations of office space owned by one landlord in the city. All told, it’s about on par with the Related Companies’ Hudson Yards, the World Trade Center site and Tishman Speyer’s Rockefeller Center. Rents in the Penn Plaza office submarket currently average about $55 per square foot.” (The Real Deal)
