Real Estate Daily News Buzz April 12, 2017
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.
The Standard & Poor’s 500 index fell 3.38 points, or 0.1 percent, to 2,353.78. The Dow Jones industrial average slipped 6.72 points, or 0.03 percent, to 20,651.30. The Nasdaq composite index slid 14.15 points, or 0.2 percent, to 5,866.77.
Benchmark crude oil rose 32 cents to close at $53.40 a barrel in New York, its sixth gain in a row. Brent crude, the standard for international oil prices, added 25 cents to close at $56.23 a barrel. Wholesale gasoline was little changed at $1.76 a gallon. Heating oil also held steady at $1.65 a gallon. Natural gas slid 9 cents, or 2.7 percent, to $3.15 per 1,000 cubic feet.
US employers posted more jobs in February and quitting fell — U.S. employers posted more open positions in February, but the number of people getting hired and the number quitting jobs fell. The overall figures suggest that the job market remains healthy, although it has yet to take off during the early stages of the Trump presidency. The Labor Department said Tuesday that job openings rose 2.1 percent in February to a seasonally adjusted 5.7 million. While more employers are seeking workers, hiring fell 2 percent compared to January to 5.3 million. Job openings have increased 3.2 percent over the past 12 months. (ABC)
Century, UCP Announce $336M Merger Deal create a $1.3 billion company with a footprint in 10 states. — Century Communities, Inc., Greenwood Villiage, Col. (NYSE: “CCS”) and UCP, Inc., San Jose (NYSE: “UCP”) on Tuesday morning annonced a definitive merger agreement that will result in a $1.3 billion company with market capitalization of $700 million. Century ranked as the 21st largest home builder in the 2016 BUILDER 100; UCP was number 58. The transaction would have an aggregate value of $336 million, including cash and the payment of certain indebtedness. The companies said both boards had unanimously approved the deal and that PICO Holdings, Inc. (NASDAQ: “PICO”), UCP’s largest shareholder, has entered into a voting agreement pursuant to which it has committed to vote 57% of UCP’s outstanding voting power for the adoption of the merger agreement. UCP stock will be converted into the right to receive $5.32 in cash and 0.2309 of a newly issued share of Century common stock. Based on the closing sale price of Century shares on Monday, the implied value of the total stock and cash consideration to be received by UCP’s stockholders in the merger is $11.35 per share, and UCP’s stockholders would own, on a pro forma basis, approximately 16.4% of the combined company. The new company is expected to issue 4.35 million new shares. The transaction is expected to close by the end of the third quarter of 2017. Century will fund the cash portion of the merger with available borrowing capacity under its $400 million senior unsecured credit facility. (Builder)
Regents Approve Robbins as New UA President – The Arizona Board of Regents has approved a three-year contract for Dr. Robert C. Robbins, president and CEO of Texas Medical Center, to become the 22nd president of the University of Arizona. The board’s unanimous approval of Robbins’ contract, which will pay him a base salary of $600,000 annually as part of a total compensation package of less than $1 million, received a standing ovation from those assembled Friday in the North Ballroom of the Student Union Memorial Center for ABOR’s regular meeting. Robbins, 59, wore a red tie patterned with the University’s block “A” that he said he had received in a gift basket from outgoing President Ann Weaver Hart, paired with a sky-blue dress shirt and navy suit. He addressed the board briefly and fielded questions from local media afterward. He touched on his childhood in rural Mississippi, raised by his maternal grandparents, and his education at Millsaps College, a small liberal-arts college that sent him on to the likes of Stanford University, Columbia University and the National Institutes of Health in his career as a cardiac surgeon. His position at Texas Medical Center, the world’s largest medical network, paid him close to $1.8 million annually, according to regent Bill Ridenour, who co-chaired the search committee and said that other universities were interested in hiring Robbins as their president. Robbins has been at TMC for the past four and a half years. Ridenour said Robbins was the “strong preference” of the committee, which also considered Sethuraman “Panch” Panchanathan, an Arizona State University vice president, as a top candidate. (UA)
Slumping PC market shows a glimmer of hope in 1st quarter — The long-suffering personal computer market may be finally recovering from the damage inflicted by the shift to smartphones and tablets, according to a report released Tuesday. PC shipments in the first quarter rose by about 1 percent from last year, based on calculations from the research firm International Data Corp. The modest gain marks the first quarterly increase in five years, a stretch that has seen people increasingly turn to mobile devices for their computing needs. (ABC)
New York, Texas Top Nation in Commercial Property Development “For the second year in a row, Texas was behind only to New York in total commercial real estate spending in 2016. Commercial property construction expenditures topped $18.5 billion in the Lone Star State last year. And development supported 310,994 Texas jobs, according to the new report by the NAIOP Research Foundation, a commercial real estate study organization. Nationwide the commercial development and construction industry contributed $861 billion to the U.S. gross domestic product last year.” (Dallas Morning News)
Partial Owner of Kushner’s New York Flagship Property Willing to Sell “Efforts to breathe new life into an ageing Manhattan office building that is the flagship property of the family of President Donald Trump’s son-in-law has gained a green light after a partial owner of the building indicated a willingness to sell. Steven Roth, chairman and chief executive of Vornado Realty Trust, said in a letter to its shareholders that there had been ‘much press’ recently about 666 Fifth Avenue, a 60-year-old building that Vornado owns with the Kushner family.” (Reuters)
Here’s What Could Be Coming to More Than 7 Acres in Midtown Detroit “Although a great deal of the specifics are still yet to be determined, this morning I was able to get a peek of what could be coming to more than 7 acres of property at the southeast corner of Woodward and Mack avenues in Detroit’s Midtown. As a refresher, it’s that site, owned by father and son developers George and Adam Nyman, where Target Corp. has been a rumored possible tenant. George Nyman, sitting at a long table in a conference room in his downtown Birmingham office on West Brown Street, confirmed a meeting with the Minnesota-based retail giant.” (Crain’s Detroit Business)
What in the World Is Causing the Retail Meltdown of 2017? “A deep recession might explain an extinction-level event for large retailers. But GDP has been growing for eight straight years, gas prices are low, unemployment is under 5 percent, and the last 18 months have been quietly excellent years for wage growth, particularly for middle- and lower-income Americans. So, what the heck is going on? The reality is that overall retail spending continues to grow steadily, if a little meagerly. But several trends—including the rise of e-commerce, the over-supply of malls, and the surprising effects of a restaurant renaissance—have conspired to change the face of American shopping.” (The Atlantic)
Here’s How Much You Have to Earn to Live Comfortably in the 25 Biggest U.S. Cities “City life is expensive. If you’re considering settling down in San Francisco, for example, you’ll have to earn six figures to live comfortably. That’s according to a 2017 GOBankingRates report, which determined just how much you need to earn each year to get by with a minimum of stress in the biggest U.S. cities. The site looked at the cost of living for a single person in each city, factoring in the median rent for a one-bedroom apartment, groceries, utilities, transportation and health care.” (CNBC)
“Your Only Opportunity to Get Rich in America”: Inside LA’s Deceptively Simple $50M EB-5 Scam “It’s a paint-by-numbers approach to defrauding real estate investors. Federal agencies raided the homes and office of a California attorney and her father Wednesday, amid an investigation into whether the two perpetrated a multi-million-dollar fraud scheme. Victoria and Tat Chan allegedly took money from roughly 100 Chinese investors through the EB-5 visa program — but never actually invested it on their behalf. Instead, the Chans allegedly used the funds to buy luxury homes for themselves throughout Southern California.” (The Real Deal)
Freddie Mac: More Renters Financial Confident, Plan to Stay Put “The latest renter survey from Freddie Mac is packed with good news for the apartment industry. A growing number of renters are optimistic about their financial situation and expect to stay where they are even if their rents increase, the research findings, released Monday, show. Also of note, a declining number of renters say they’re working toward homeownership, expect to buy a home, or plan to move within the next few years.” (Multifamily Executive)
More Competition, Challenges for Direct Lending, Private Debt Market in 2017 “Institutional investors have been raising their allocations to direct lending and private debt opportunities in the past few years as they eye favorable risk-adjusted return profiles and diversification possibilities. For 2017, Preqin reports, 57% of the investors the research firm surveyed are looking to raise their exposure to private debt opportunities. This interest has led to deals this year, such as Aflac’s signing on NXT Capital to manage $500 million in private debt opportunities. Meanwhile, the North Dakota State Investment Board is looking to deploy $200 million in direct-lending opportunities through Cerberus Capital Management.” (Chief Investment Officer)
Chicago Grocery-Anchored Center Commands $107M “Federal Realty Investment Trust has acquired Riverpoint Center, a 211,000-square-foot grocery-anchored shopping center in Chicago for $107 million cash from an affiliate of Centrum Partners. Located at 1800 W. Fullerton Ave. in Chicago’s Lincoln Park neighborhood, Riverpoint Center is situated 3.5 miles northwest of downtown Chicago. Riverpoint Center is currently 97 percent occupied and is anchored by Jewel-Osco, Marshalls and Old Navy. The property boasts demographics that enhance Federal Realty’s already sector-leading position, with 545,759 people and average household incomes of $104,696 within a 3-mile radius.” (Commercial Property Executive)
Department Store Retailer Enters New Market “Von Maur has opened its first location in Wisconsin. The family-owned company opened a 150,000-sq.-ft. store at The Corners of Brookfield in Brookfield, Wisconsin. Von Maur has been expanding with its eye on a national footprint. After expanding beyond its Midwestern footprint in 2011 with the opening of its first location in Georgia, Von Maur has since grown in additional new states including New York, Alabama and Oklahoma.” (Chain Store Age)