Real Estate Daily News Buzz Sept. 15, 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 lost 31.98 points, or 0.2 per cent, to 18,034. The Standard & Poor’s 500 index dipped 1.25 points, or 0.1 per cent, to 2,125.77. The NASDAQ composite climbed 18.52 points, or 0.4 per cent, to 5,173.77.
Benchmark U.S. crude lost $1.32, or 2.9 per cent, to finish at $43.58 a barrel in New York. The international standard, Brent crude, fell $1.25, or 2.7 per cent, to $45.85 a barrel in London. Wholesale gasoline lost 2 cents to $1.36 a gallon. Heating oil fell 4 cents, or 2.9 per cent, to $1.38 a gallon. Natural gas gave up 2 cents to $2.89 per 1,000 cubic feet.
UPS to hire 95,000 seasonal workers for upcoming holidays — The calendar says it’s not even fall yet, but delivery companies and retailers are making their hiring lists for the holiday season. It looks like short-term employment in stores may be flat with last year, but more people will be needed to deliver gifts bought online. UPS said Wednesday it will add about 95,000 seasonal workers, mostly package handlers and drivers. That’s close to last year’s pace, when United Parcel Service Inc. hired 93,000 workers for a busy stretch that starts in late November and runs through the gift-return season in early January. Delivery rival FedEx Corp. has not yet announced its plans. (AP)
Inside Airbnb’s Plan to Partner With the Real Estate Industry “Jaja Jackson, Airbnb’s director of global multifamily housing partnerships at Airbnb and who joined the San Francisco company in early 2015, is leading the effort. The program works like this: Building owners—provided they operate in a jurisdiction where short-term rental laws are clear, meaning that there’s no ambiguity nor potential for a regulatory mess—apply for the program. Once accepted, the owner then decides the terms (which units, for how long, revenue division, etc.) under which tenants can rent out their homes and submits them to Airbnb as well as amends its tenants’ leases. Eligible tenants in that can then sign up for their building’s program through Airbnb, and become part of the regular reports the company sends to the landlord. What’s more, Airbnb also handles paying out both the hosts and their landlords, as well as collecting and remitting taxes where applicable. According to Airbnb, building owners typical take between 5% and 15% of their tenants’ earnings through the program.” (Fortune)
U.S. Household Income Grew 5.2 Percent in 2015, Breaking Pattern of Stagnation “Americans last year reaped the largest economic gains in nearly a generation as poverty fell, health insurance coverage spread and incomes rose sharply for households on every rung of the economic ladder, ending years of stagnation. The median household’s income in 2015 was $56,500, up 5.2 percent from the previous year — the largest single-year increase since record-keeping began in 1967, the Census Bureau said on Tuesday. The share of Americans living in poverty also posted the sharpest decline in decades. The gains were an important milestone for the economic expansion that began in 2009. For the first time in recent years, the benefits of renewed prosperity are spreading broadly. The data was released into a heated presidential race, where Democrats seized on the statistics to promote Hillary Clinton’s candidacy and undercut Donald J. Trump’s dark assessment of the nation’s well-being.” (The New York Times)
Trump is ‘better than all the rhetoric,’ says fellow real estate mogul “Donald Trump is better on the issues than Hillary Clinton, Tom Barrack, founder of Los Angeles-based Colony Capital, told CNBC on Tuesday. Critics of Trump’s controversial statements, are ‘underestimating’ the GOP candidate’s ability to solve the nation’s problems, Barrack said on ‘Squawk Box’ from the sidelines of the CNBC/Institutional Investor Delivering Alpha conference in New York. ‘Hillary is terribly competent. Nobody can say she’s not competent,’ said Barrack, a member of Trump’s Economic Advisory Council. ‘Her being sick is not an opportunity to pounce on her, in my view. It happens to everybody.’ But the executive chairman at Colony Capital, with $24 billion in assets under management, said the election is a choice between ‘disruption, which is Trump, and status quo, which is Hillary.’ Barrack, like Trump, made his fortune investing in real estate. He’s known Trump since the 1980s, and spoke in support of the billionaire at the Republican National Convention in July.”
Chinese buyers have Dallas real estate on their shopping list “Dallas is one of the most popular U.S. markets for Chinese investors, according to a new commercial real estate report. New York, Los Angeles, San Francisco, Washington, D.C., Chicago and Dallas are the top spots for Chinese buyers, according to a new report by KPMG. Last year, Chinese buyers spent almost $10 billion on U.S. property. ‘The U.S. market is very attractive to Chinese investors as they look to expand their global operations, diversify their portfolios by adding U.S. assets, and establish information exchanges with U.S. developers,’ Phil Marra, KPMG U.S. Real Estate Funds leader, said in the report. ‘While much of the investment has been focused in U.S. coastal ‘gateway’ cities, where assets are considered most liquid, Chinese investors are starting to expand into other markets as they seek higher yields and diversification.’ KPMG expects Chinese investment in U.S. real estate market to reach record-setting growth in the next two years.” (Dallas Morning News)
GLP Grows US Presence with $1.1B Buy “GLP, a Singapore-based provider of logistics facilities, is making its third industrial acquisition in the U.S. with plans to purchase a $1.1 billion portfolio from Hillwood Development Co. in several phases starting later this year. The first part of the deal is expected to close in December with the purchase of a $700 million portfolio. The remaining $400 million development portfolio will be acquired in phases upon completion and lease-up.” (Commercial Property Executive)
Nickelodeon to headline theme park at American Dream “Triple Five’s American Dream project in the New Jersey Meadowlands got closer to the finish line today with the announcement that Nickelodeon would be attaching its name and entertainment brands to the retail-entertainment center’s theme park. To be called Nickelodeon Universe, the 8.5-acre indoor amusement park — reputed by Triple Five to be the Western Hemisphere’s largest — will feature rides themed by Mutant Ninja Turtles, SpongeBob SquarePants, Blaze, and the Monster Machines. Sarah Levy, COO of the Viacom Kids and Family Group, said the company was eager to ‘give kids and families in the New York Metro area the opportunity to interact with their favorite characters.’ The company already runs a Universe park at Triple Five’s Mall of America in Bloomington, Minnesota. American Dream, which will provide nearly 3 million sq. ft. of gross leasable space next to Met Life Stadium off the New Jersey Turnpike, will also feature a DreamWorks-designed theme park and an indoor ski slope. Visitors to the parks will have to pass through retail space to arrive at their destinations. Saks Fifth Avenue, Primark, and Uniqlo head up the retail contingent at American Dream, which will also field a luxury collection of high street brands such as Hermes. A dining level will accommodate a planned 15 full-service restaurants.” (Chain Store Age)
Fairway makes a big bet in Brooklyn “Fairway’s 2015 announcement that it signed a 20-year lease for 40,000-square-feet at the Georgetown Shopping Center in Bergen Beach, Brooklyn, has started to help generate leasing deals in the area, and may spur at least one small-scale development. The new store will be Fairway’s first since it emerged from bankruptcy this summer, and its second location in the borough; it opened in Red Hook 10 years ago, playing a key role in that neighborhood’s revival and later its recovery after Superstorm Sandy in October 2012. The new Fairway, expected to open before the end of the year, replaces a Waldbaum’s supermarket at the 156,000-square-foot shopping center, a short distance from Jamaica Bay. Tenants there include Nine West, Dress Barn, GameStop, Torrid, Payless and H&R Block. Since Fairway’s deal, Carter’s, Oshkosh and Five Below have all leased space at the plaza (though none as much as Fairway). All three are expected to open by November. Asking rents at the shopping center are between $45 and $50 per square foot, according to Marc Durst, a senior managing director at Sholom & Zuckerbrot, the center’s property manager.” (Crain’s New York)
De Blasio gave top-level job to former NYPD official after receiving call from real estate investor: report “Mayor de Blasio gave a retired police official a high-level position in his administration after a key donor called him and requested the appointment as a “personal favor,” according to a report. Jona Rechnitz, the real estate developer at the center of the NYPD corruption scandal, reportedly made the call from the office of Philip Banks III, at the time chief of the police department. According to anonymous sources cited by the New York Post, Rechnitz told de Blasio that he hadn’t asked for much since bundling thousands of dollars in campaign donations to de Blasio, and requested he appoint former chief of department Joseph Esposito as head of the city’s Office of Emergency Management. Esposito ended up getting the gig, which pays $220,000 a year, in June 2014. The Post doesn’t mention when the call took place, or whether Esposito was considered for the job before the call.” (The Real Deal)
GPT, TPG Enter Strategic Partnership “TPG Real Estate has acquired a 75 percent interest in a portfolio of six office assets valued at $187.5 million, from Gramercy Property Trust, and the two have formed a new partnership, Strategic Office Partners. ‘We see a compelling investment opportunity in the office net lease sector and believe that this portfolio of high-quality assets in strong growth markets is poised to benefit from positive fundamental trends,’ Avi Banyasz, TPG Real Estate’s co-head, said in a prepared release. ‘We look forward to working with Gramercy, a best-in-class owner and operator, whose extensive experience in the space will prove valuable as we work together to manage and expand the platform.’ The newly formed $400 million equity partnership will be initially financed with a $200 million non-recourse secured credit facility from an institutional lender as well as equity from Gramercy Property Trust and TPG Real Estate. (Commercial Property Executive)
Protestors rally against LA’s most ‘Trump-like’ developer “Dozens of demonstrators gathered outside of the Medici apartments Tuesday morning to show support for the pro-development affordable housing ballot measure now known as Proposition JJJ. As residents of the apartment complex watched from balconies and sky bridges, marchers addressed the project’s notorious developer with their chants. “Palmer, Palmer, you can’t hide; we can see your greedy side,” went one refrain. The apartments are part of Geoffrey Palmer’s Fauxtalian Renaissance Collection—luxury units that have drawn the ire of affordable housing advocates and labor groups for their high rents and low wages paid to workers during construction. As LA Weekly points out, it’s a bit surprising to see backers of Proposition JJJ, also known as the Build Better LA Initiative, overtly taking on a major developer since the measure came about largely in response to the stringently anti-development Neighborhood Integrity Initiative that’s now scheduled to appear on ballots in March. But Proposition JJJ supporter Laura Raymond tells Curbed that Palmer’s fortress-like luxury projects aren’t the kind of development projects that LA needs.” (Curbed Los Angeles)
