The president’s annual State of the Union (SOTU) speech is high political theater with plenty of red meat served up to the respective bases, no matter what administration.

This annual ritual offers insight not only into the goals of the president but also where particular industries hope to see the economy and legislative calendar go. The commercial real estate industry is no different of course. Some issues the president touched on in his speech–and others he didn’t–of interest to the industry included the budget, the establishment of an infrastructure bank, affordable housing and multifamily finance.

Talk of bipartisan measures was still a staple in the speech although the President warned he would accomplish his mission via executive orders if Congress didn’t cooperate with him.

The Budget
It wasn’t long into his speech that the President made reference to the bipartisan budget deal that Congress passed last year—a deal that undid some of the severe cuts under sequestration. “Nobody got everything they wanted,” the President said, “and we can still do more to invest in this country’s future while bringing down our deficit in a balanced way.”

The budget deal was perhaps the most significant achievement for the CRE industry and was a welcome addition to the SOTU speech for that reason.

The Government Services Administration posted prospectuses for space needs of several government agencies the day after the SOTU. While they must be approved still by Congress, some of the requests point to an agency that is thinking beyond mere space reduction.

There’s a prospectus for the Transportation Security Administration’s headquarters. That was an agency created hurriedly in the aftermath of 9-11, meaning it grew quickly without much forethought and now exists in multiple locations.

A prospectus for the Federal Energy Regulatory Commission proposes staying in its existing building, where there is a favorable purchase option. It is clear they will take an ownership position in the building in 10, 15 years from now.

But consolidation and reduction of space is also part of the mix.

The National Institutes of Health’s prospectus is more in line with traditional requests and the FBI Headquarters Consolidation project figures in one of these prospectuses.

Some of the other proposals, according to the GSA website:
The current lease at 1400 L Street, NW, Washington, DC, for the Department of Homeland Security’s Customs and Border Protection expires on August 31, 2015. It currently occupies 140,560-square-feet and the prospectus proposes reducing it by 31,560 square feet.

GSA is proposing a replacement lease of up to 86,000-square-feet for the Department of Housing and Urban Development, which is currently located at 550 12th St., SW, in a lease that expires April 25, 2014. This location houses five HUD components. The prospectus proposes keeping four in the location and moving the fifth elsewhere.

A replacement lease of up to 839,000-square-feet is being proposed for the Department of Justice at 600 E St., NW, 1425 New York Ave., NW, 601 D St., NW, and 1331 Pennsylvania Ave., NW in Washington, DC. The office utilization rate will go from 184 usable-square-feet (USF) per person to 130 USF per person, for a proposed reduction of 206,230-square-feet

A replacement lease of up to 157,000-square-feet of space for the Federal Bureau of Investigation, currently housed at 1025 F St., NW was proposed. This lease would replace three existing leases, which expire on January 17, May 31, and November 24, 2015. It is expected that these operations will eventually relocate to the FBI Headquarters Consolidation project, if approved by Congress. Therefore GSA will attempt to negotiate a flexible lease term.

A replacement lease of up to 105,000 square feet was proposed for the Corporation for National and Community Service, located at 1201-1225 New York Ave. NW. The current lease expires October If, 2014. The replacement lease will drop from 151 to 129 usable square feet per person and 226 to 198 USF per person, respectively.

GSA is proposing a succeeding lease of 504,000 square feet for continued occupancy of 888 First St., NE, by the Federal Energy Regulatory Commission and to house another, to-be-determined, federal agency. The building at 888 First Street, NE was originally constructed as a build-to-suit facility to meet the space requirements of FERC and the agency has been the primary tenant at this location since 1995.

GSA is proposing a new lease of up to 345,000 square feet for the National Institutes of Health currently located at 6701 and 6705 Rockledge Dr., Bethesda, MD, and 6100 Executive Blvd, Rockville, MD–leases that expire on February 1, 2014 and June 30, 2015. NIH would improve its office utilization rate from 143 USF per person to 100 USF per person, or 98,764 square feet less than the total of current occupancies.

GSA is proposing a replacement lease of up to 123,000 square feet for the Department of Homeland Security’s National Protection and Programs Directorate. NPPD’s Cybersecurity and Communications office is currently housed in two leases located at 1110 North Glebe Rd in Arlington, VA.

A replacement lease of up to 625,000 square feet for the Department of Homeland Security’s Transportation Security Administration has been proposed. It is currently housed in five separate buildings in Northern Virginia, which are set to expire between March 2014 and March 2018. TSA will improve its office utilization rate from 103 USF to 84 USF per person, for 21,859 square feet less than the total occupancy of these operations

The Infrastructure Push
President Obama also revisited his focus on infrastructure although in a more modest fashion than his earlier proposal for an infrastructure bank.

Clearly, though, infrastructure upgrades and investment remain on the Administration’s radar. The President referenced the continued need to streamline the permitting process among other measures.

“We’ll need Congress to protect more than 3 million jobs by finishing transportation and waterways bills this summer,” the President said.

“But — but I’ll act on my own to slash bureaucracy and streamline the permitting process for key projects, so we can get more construction workers on the job as fast as possible.”

The President went on to discuss a range of issues of interest to the country from minimum wages to the Affordable Care Act to a proposal for a new retirement plan. He didn’t touch on, at least not beyond the most general terms, was multifamily reform and affordable housing. Their omission gave the industry an opening, though, to voice their own opinions.

Housing Finance Reform
Cindy Chetti, the National Multifamily Housing Council’s SVP of Government Affairs, for example said that while the industry appreciated his support of housing in his speech we “would remind him that housing preferences are changing and a growing number of American households are choosing to rent for lifestyle and financial reasons.”

For that reason, Chetti said in a prepared statement, “housing finance reform must avoid a ‘one-size-fits-all’ approach. The multifamily market uses commercial mortgage debt products, and imposing single family reforms would jeopardize our ability to meet the nation’s need for millions of new rental homes over the next decade.”

Affordable Housing
The President also made numerous references to low income Americans and what measures he would like to introduce to better support them.

National Low Income Housing Coalition CEO Sheila Crowley, for example, applauded President Obama’s call for an increase in the federal minimum wage and an expansion of the Earned Income Tax Credit.

To read the full story at Globe Street Click Here.

Trautwein Testifies before Congress that Retailers and Chain Restaurants Need Action

National Retail Federation Vice President and Employee Benefits Policy Counsel Neil Trautwein testified before the House Ways and Means Committee this week on the impact of the Affordable Care Act, where he reiterated the retail industry’s strong support for modifying the health care law’s employer mandate and 30-hour requirement for coverage.

“Many retail and restaurant employees do not fit neatly into full-and part-time categories and compliance with the unprecedented levels of change under the ACA will be particularly challenging,” Trautwein testified.

The health care law is especially burdensome for small employers who cannot afford the sophisticated and expensive strategies needed to fully-comply with the law’s multitude of mandates, requirements and penalties.

“The law that reforms health care coverage should not advantage larger employers to the detriment of smaller ones,” Trautwein said.

Although NRF opposed the enactment of the Affordable Care Act, it has worked closely with Congress, the Administration, and its diverse membership of retailers and chain restaurants to make the law more workable for employers and employees.

“Given the complexity of requirements under the ACA, we strongly urge this Committee and Congress to consider specific changes to the ACA, including the definition of full-time employment,” Trautwein said. “NRF stands ready to help the Administration and Congress make the ACA more workable, so long as it remains the law of this land.”

NRF supports specific, common-sense reforms to the health care law, including bipartisan legislation aimed at repealing the employer mandate, changing the law’s definition of a full-time employee to 40-hours a week and increasing the coverage requirement from 50 employees to 100.

NRF is the world’s largest retail trade association, representing discount and department stores, home goods and specialty stores, Main Street merchants, grocers, wholesalers, chain restaurants and Internet retailers from the United States and more than 45 countries. Retail is the nation’s largest private sector employer, supporting one in four U.S. jobs – 42 million working Americans. Contributing $2.5 trillion to annual GDP, retail is a daily barometer for the nation’s economy. 

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 for the day will be.

On Thursday, the Dow Jones industrial average rose 109.82 points, or 0.7%, to 15,848.61. The NASDAQ composite jumped 71.69 points, or 1.8%, to 4,123.13. The Standard & Poor’s 500 index rose 19.99 points, or 1.1%, to 1,794.19.  Benchmark U.S. crude for March gained 87 cents to finish the day at $98.23 a barrel on the New York Mercantile Exchange.

SOLID GROWTH BRIGHTENS ECONOMIC OUTLOOK FOR 2014
WASHINGTON (AP) — Consumers will spend more. Government will cut less. Businesses will invest more. And more companies will hire. Add it all up, and you can see why expectations are rising that 2014 will be the best year for the U.S. economy since the recession ended 4 1/2 years ago. That’s why the Federal Reserve is pressing ahead with a plan to scale back its economic stimulus. The optimists got a boost Thursday from a government report that showed consumers fueled solid economic growth in the final quarter of 2013. The report lifted hopes that the economy will be able to withstand turmoil in emerging economies, a pullback in the Fed’s stimulus and mounting risks to the U.S. stock market over the next 12 months.

GOOGLE’S 4Q EARNINGS RISE 17% BUT AD RATES FALL
SAN FRANCISCO (AP) — Google’s fourth-quarter earnings rose 17% even though a long-running slump in its online ad prices deepened. The performance announced Thursday indicates that Google is still struggling to close the gap between the rates for ads shown on mobile devices and those on personal computers. Advertisers haven’t been willing to pay as much to reach prospective customers on the smaller screens of smartphones and tablets, but Google Inc. has been tweaking its digital marketing system so mobile and PC ad campaigns are bundled together. In doing so, Google Inc. is hoping advertisers eventually will recognize the advantages of reaching people on the go and gradually begin to pay higher prices for mobile marketing pitches.

BITING COLD PUTS A FREEZE ON RESTAURANT BUSINESS
TOLEDO, Ohio (AP) — The homemade matzo ball and beef barley soups are lost on customers walking into Rascals’ NY Deli — because there just aren’t very many of them. Across much of the eastern half of the country, bitter cold and snowstorms in recent weeks have put a chill on restaurants, bakeries and coffee shops, limiting the number of walk-in customers and shrinking tips. Some merchants report sales cut in half. And other businesses that rely on walk-ins and appointments are seeing a hit, including health care specialists and hair salons. They can expect to recoup some losses as people venture out in warmer weather, but for now, that’s cold comfort.

CHINA FACES OBSTACLES ON ROAD TO CONSUMER SOCIETY
BEIJING (AP) — Business should be picking up for Zhao Guoping, a Beijing shopkeeper, as Chinese leaders try to build a consumer society to replace a worn-out economic model based on trade and investment. But his financial struggle highlights the hurdles that ambitious effort faces. Squeezed by higher costs and weak sales to budget-minded shoppers, Zhao said the income from his neighborhood shop has fallen by half to 50,000 yuan ($6,000) a year. The reluctance of Zhao and his customers to open their wallets wider is one of a thicket of obstacles facing communist leaders as they try to rebalance China’s economy away from reliance on investment, a big share of which comes from the government and is losing its ability to boost growth. The government is walking a fine line, however, as an abrupt shift in the economy could hurt growth, with consequences not just for the country but the global economy. China’s economic importance was laid bare last week, when a report showing a drop in manufacturing activity caused turmoil on world markets.

TOYOTA TELLS DEALERS TO STOP SELLING 6 MODELS
DETROIT (AP) — Toyota has told North American dealers to stop selling six popular models with heated seats because the fabric doesn’t comply with U.S. safety codes and potentially could catch fire. The order affects 36,000 cars, trucks and minivans, about 13 per cent of the inventory on dealer lots in the U.S., spokesman John Hanson said. Also affected are additional vehicles in Canada, Mexico, Korea, Israel and other countries, but no total number was available. No fires or injuries have been reported, but Toyota can’t legally sell cars that don’t comply with U.S. safety codes, spokesman John Hanson said.

FROM MUPPETS TO PUPPIES, SUPER BOWL ADS GET CUTE
NEW YORK (AP) — Call it Cute Bowl. Adorable is the name of the game this year as Super Bowl advertisers try to grab your attention. That means lots of “cute” story lines, including a family that’s expecting a new baby and a horse that forms a long-lasting bond with a puppy. The saccharine spots are partly a result of more family-friendly brands like Cheerios and Heinz advertising this year. At the same time, fewer startups that tend to have more provocative commercials are in the advertising game this year.

AMAZON 4Q EARNINGS GROW BUT MISS EXPECTATIONS
SEATTLE (AP) — Amazon’s profit and revenue both grew in the latest quarter but its results fell below what Wall Street was expecting and shares of the world’s biggest online retailer tumbled. Amazon has long focused on spending the money it makes to grow its business and expand into new areas, from movie streaming to e-readers and even grocery delivery. Investors have largely forgiven thin profit margins and zeroed in on the company’s solid revenue growth and long-term prospects. It posted losses in two previous quarters due to rising operating costs.

MERCK JOINS COMPANIES ENDING CHIMPANZEE RESEARCH
TRENTON, N.J. (AP) — Drugmaker Merck & Co. is joining two dozen other pharmaceutical companies and contract laboratories in committing to not use chimpanzees for research. The growing trend could mean roughly 1,000 chimps in the U.S. used for research or warehoused for many years in laboratory cages could be “retired” to sanctuaries by around 2020. That’s according to Kathleen Conlee of the Humane Society of the United States, which seven years ago began urging companies to phase out all chimp research.