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.
Tuesday, the Standard & Poor’s 500 index shed 6.82 points, or 0.3 percent, to 2,342.19. The Dow Jones industrial average lost 113.64 points, or 0.6 percent, to 20,523.28. The Nasdaq composite fell 7.32 points, or 0.1 percent, to 5,849.47.
U.S. crude oil futures lost 24 cents to $52.41 a barrel in New York. Brent crude, used to price international oils, lost 47 cents to $54.89 per barrel in London. Wholesale gasoline fell 1 cent to $1.71 a gallon and heating oil dipped 1 cent to $1.62 a gallon. Natural gas lost 2 cents to $3.15 per 1,000 cubic feet.
Benchmark Electronics and Arizona Governor Doug Ducey Tuesday announced a major economic development win for the state with the news that Benchmark Electronics, a global engineering, design, and integrated electronics manufacturing company will relocate its corporate headquarters from Angleton, Texas to Arizona. The move, expected to begin in May of 2017, is anticipated to create more than 500 projected Arizona-based jobs over the next five years. Benchmark has not selected a location for the headquarters operation, but is considering multiple sites in the greater Phoenix area. An announcement of the exact location of the new Benchmark headquarters is expected in May. Benchmark designs and manufactures an impressive variety of advanced technologies, supporting the aerospace & defense, medical, industrial, telecommunications and computing industries. Benchmark currently has a precision technology facility in Tempe that specializes in manufacturing equipment for the semiconductor, aerospace and medical sectors. The skilled talent pipeline, pro-business climate, and high quality of life made Arizona Benchmark’s location of choice. The state’s geographic position was also a key factor in the decision, and will allow Benchmark to leverage greater access to customers worldwide. In addition, expanded engineering facilities in Arizona will complement the company’s existing development facilities in California, Minnesota, the Netherlands and Malaysia.
Genuine Parts Company announced today an acquisition for its U.S. Automotive Parts Group. (NYSE: GPC) The Company has entered into a definitive agreement to acquire Merle’s Automotive Supply (Merle’s), with an effective close date of May 1, 2017. Merle’s, founded in 1969 and based in Tucson, Arizona, is a 14 location automotive parts distributor serving both the commercial and retail markets in the greater Tucson and southern Arizona area. The addition of Merle’s will consolidate into our U.S. automotive operations and is expected to generate approximate annual revenues of $45 million. Paul Donahue, President and Chief Executive Officer, stated, “Merle’s is a leading automotive distributor in the greater Tucson area, and this strategic acquisition significantly enhances our automotive store footprint and competitiveness in the Arizona marketplace. We are excited to welcome the Merle’s team to the U.S. Automotive Parts and GPC family and look forward to working with them and continuing our shared tradition of providing quality parts and excellent service to our customers.”
NNN Investment Property Sold, Occupied by National Tenant – GILBERT – The single-tenant, NNN investment property sold for $750,000 ($271.05 PSF) with a national automotive tenant in place – AAMCO. Located in a fast-growing area of Gilbert, this property was constructed in 2005 with an attractive exterior to match the new and upcoming neighborhood. Nick Miner, CCIM, Senior Vice President, at ORION Investment Real Estate represented the Seller in this transaction. Miner said, “I have been involved at this intersection since 2003 when I helped the original developer (Tunex) purchase the land from the original developer (Gabel Investments). I sold the property to the seller in 2006 as a net leased investment. Unfortunately, during the downturn the original tenant filed bankruptcy. The tenant, AAMCO, immediately took advantage of the opportunity to lease the property. The Buyer was a related entity to the tenant, AAMCO. They wanted the opportunity to own the real estate instead of leasing it, especially since it was a proven location for them.” The Seller was Jeffery H. Cranor, represented by ORION. The Buyer, PH Val Vista Williams Field, LLC, was not represented by a broker.
It’s Easy to Start a Business in Tucson – Tucson has plenty of tools to get your business up and running. Getting a required business license in Tucson can be done online through the City of Tucson’s Finance Department. If you prefer, you can also get a business license in person on the first floor of City Hall, 255 W. Alameda St. One thing to remember if you are buying an existing business is that you are liable for any unpaid taxes of the seller. Before purchasing any business, you should require the seller to provide a “Letter of Good Standing” issued by the City’s License Section, which is a document that states there is no tax amount outstanding. If you have any questions about starting a business, please call the City of Tucson’s Small Business Assistance Line at (520) 837-4100 or email firstname.lastname@example.org. Small Business Assistance Line: http://1.usa.gov/1QVDJ0p
Billionaire Jeff Greene: I Think We’re More Likely to Have a Slowdown of 0 Percent Growth “The U.S. economy could grow sluggish as President Donald Trump moves forward with his pro-business policies, billionaire real estate investor Jeff Greene told CNBC on Monday. ‘I think we have been in a period of insane ‘animals spirits,’ Greene said on ‘Squawk on the Street,’ citing previous inaction in Washington. The founder of the Greene Institute said that the assurances from the Trump administration that they will get things done may slow the economy, perhaps leading to a rise in interest rates.” (CNBC)
Rents Are Finally Dropping in New York City, and a Bubble Might Be About to Pop “In October, the share of New York City rentals that took a price cut, according to the listing tracker Streeteasy, topped 42 percent—the highest level since December 2010. The real estate firm Citi Habitats, which draws data from its own listings, reports that the vacancy rate in Manhattan has climbed to 2.1 percent, its highest level since 2009. Both of those indicators, in other words, are back in Great Recession territory. ‘It’s a renter’s market right now,” says Chris Lee, the director of sales at Triplemint, a real estate startup.’” (Business Insider)
Facing Tough Financial Call, Neiman Marcus Decides to Make Interest Payments with More Debt “Neiman Marcus said it will make interest payments over the next six months with new debt to preserve its cash and bank line of credit. The Dallas-based luxury retailer said in a filing on Friday that instead of making a current $29 million cash interest payment on $600 million notes due in 2021, it will issue more bonds to holders to cover the 9.5 percent interest. Neiman Marcus also updated its liquidity position.” (Dallas Morning News)
Home Builder Sentiment Weakens in April from 11-Year High “Home builders in April weren’t quite as ebullient, though they’re still anticipating strong demand, according to a survey released Monday. The National Association of Home Builders/Wells Fargo housing market index fell 3 points to 68, on a scale where any reading over 50 is considered good. The March reading was an 11-year high. The measure of current sales conditions also fell 3 points, to 74, though it’s been over 70 for five consecutive months.” (MarketWatch)
Banks Are Suddenly Scaling Back, and Wall Street Isn’t Sure What to Make of It “Bank lending to consumers and businesses is slowing down. As of last week, commercial and industrial lending had not increased since September 7, the first six-month period of declines since the aftermath of the financial crisis, Bank of America Merrill Lynch said. Consumer-loan growth has also slowed, up by 1.4% since the November election versus 3.1% during the same period a year earlier.” (Business Insider)
Teen Apparel Retailer Closing Hundreds of Stores “Tough times have caught up with Rue 21. The struggling teen apparel chain plans to close nearly 400 stores nationwide, the Associated Press reported. The shutterings will leave the retailer with about 700 stores nationwide. Rue 21 confirmed the news in a post on its Facebook page, calling it a ‘difficult but necessary’ decision. ‘We still have hundreds of locations across the country, and our website rue21.com open for business,’ the retailer added.” (Chain Store Age)
Downtown Manhattan Enjoys Significant Surge of Office Leasing in Early 2017 “Downtown records 2.3 million square feet in transactions, highest quarterly volume in 2 years. According to JLL, lower Manhattan recorded more than 2.3 million square feet in leasing transactions in the first quarter of 2017. More transactions were completed Downtown in the first quarter of the year than in any quarter during the past two years. Additionally, deal volume was 44 percent higher than the quarterly average the submarket has posted since 2007.” (World Property Journal)
Commercial Real Estate—a New Lease is Signed—Now What? “You, on behalf of your manufacturing or distribution company just signed a commercial real estate lease for a new location. Congratulations! Many believe the deal is now done (including many in my profession), we can move-in, cue the band, alert the media – and let’s get the party started. Hmmm, not so fast. There is a multitude of issues still to address, some seen and some unseen and not the least of which is the physical move!” (Orange County Register)
Dollar Tree Coming to Hudson Companies Development in Gateway, Brooklyn “The variety chain that sells items for $1 or less, Dollar Tree, has landed a lease at Hudson Companies’ Gateway Elton Street development in Gateway, Brooklyn. The 9,995-square-foot ground-floor tenant signed a 10-year deal with options at 12442 Flatlands Avenue at the southwest corner of Elton Street, according to J. Matthew Dillon, a project manager at Hudson. The lease commences June 9 at the 151-unit affordable apartment building, CoStar Group indicates.” (Commercial Observer)
$91M Delta by Marriott Comes to Metro Dallas “A Delta by Marriott Hotel and attached convention center is coming to Allen, Texas in late 2018. Construction will begin later this month on the $91 million project, which will be one of the largest facilities of its kind in North Texas. Recently acquired by Altera Development, the 300-key hotel will feature 90,000 square feet of convention, ballroom and meeting space; 1,000 parking spots; a restaurant and destination bar; a swimming pool; 24 Hour Elite Pantry; fitness center with cardio, weights, yoga and crossfit; and free Wi-Fi and bottled water.” (Commercial Property Executive)