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 Standard & Poor’s 500 index finished down 4.02 points, or 0.2 percent, at 2,338.17. The Dow industrials lost 118.79 points, or 0.6 percent, to 20,404.49. The Nasdaq composite rose 13.56 points, or 0.2 percent, to 5,863.03.
Benchmark U.S. crude lost $1.97, or 3.8 percent, to $50.44 a barrel in New York. Brent crude, used to price international oils, fell $1.96, or 3.6 percent, to $52.93 per barrel in London. Wholesale gasoline fell 5 cents, or 3 percent, to $1.66 a gallon. Heating oil lost 4 cents, or 2.5 percent, to $1.58 a gallon. Natural gas rose 4 cents to $3.19 per 1,000 cubic feet.
Fed survey finds moderate economic growth in spring — The Federal Reserve says the U.S. economy kept expanding in the early spring, with tight labor markets and many businesses reporting rising wages. In its latest survey of economic conditions nationwide, the central bank found that it’s 12 regional banks all depicted growth as either “modest or moderate” from mid-March through early April.
US housing starts total 1.215M in March vs. 1.25M starts expected “Housing starts declined 6.8 percent to a seasonally adjusted annual rate of 1.22 million units, the Commerce Department said on Tuesday. February’s starts were revised up to a 1.30 million-unit pace from the previously reported 1.29 million-rate. Economists polled by Reuters had forecast groundbreaking activity falling to a 1.25 million-unit pace last month. Homebuilding was up 9.2 percent compared to March 2016. Construction in February was boosted by unseasonably warm temperatures. But temperatures dropped in March and a storm lashed the Northeast and Midwest regions, which could have accounted for the drop last month in homebuilding.” (CNBC)
PetSmart offers to buy the company that’s eating its lunch online “PetSmart is buying its competitor Chewy, a pet supply web-only retailer founded in 2011 that’s quickly grown a commanding online market share for pet food and gear. A price wasn’t disclosed by the two privately-held companies, but the companies did say the deal is expected to close this summer. Phoenix-based PetSmart was taken private in early 2015 in an $8.7 billion leveraged buyout by BC Partners. Chewy just opened a 660,000-square-foot distribution center in southwest Dallas at 7243 Grady Niblo Road. The building was rented from Crow Holdings and the company said it plans to hire 700 people to work there.” (Dallas Morning News)
Ikea May Open Standalone Restaurant [Video] Calling all Ikea Swedish meatball fans.You may soon be able to satisfy your meatball fix without shopping for furniture. The retail chain is exploring opening standalone restaurants. Turns out 30 percent of customers at Ikea eateries visit stores just to eat.” (Fortune)
Institutional Investors Upbeat About CRE, but Cut Commitments Anyway “U.S. institutional investors plan to reduce their new capital commitments to real estate by an average of 19 percent in 2017, it was announced Monday with the release of the 2017 Institutional Investors Real Estate Trends report. On the other side of the coin, the report, which is based on the latest annual investor survey by Institutional Real Estate Inc. and Kingsley Associates, indicates that U.S. players do plan to commit $62 billion of new capital to CRE this year. While average new capital commitments to real estate are expected to decline compared to 2016, the survey states that fully 72 percent plan to be active with new commitments to real estate this year. The survey’s participants ranked industrial assets as the most attractive property type for new investments, followed by multifamily.” (Commercial Property Executive)
Investors Cash Chips In Las Vegas “Amid accelerated hiring, demand for rentals heightened in Las Vegas in 2016. The city’s economy grew at a healthy pace, due to broad-based employment gains and an increasing population. The mining, logging and construction and the leisure and hospitality segments were the most active during the past year. A record number of visitors passed through Sin City last year, contributing $25.5 billion to local tourism—a 16.3 percent increase from 2015. The Lucky Dragon Hotel and Casino opened in December 2016. Construction continues on Genting’s $4 billion Resorts World. The office market is expected to achieve a second consecutive annual increase in rents, further strengthening its performance. More than 100,000 square feet of space is slated for delivery in 2017. In Reno, Tesla Gigafactory has begun producing batteries and will employ several thousand people.” (MultiHousing News)
Predicting the 2017 Winners in Real Estate Tech “Real estate has long been an intriguing investment vehicle. And while memories of the Great Recession may still loom large in potential investors’ minds, money continues to flow into commercial and residential real estate. That trend is expected to continue, and one can look back at investment winners of 2016 to predict who will secure the most attention (and investment dollars) in 2017. If last year is any indication, the safe bet is on real estate technology solutions and services providers. CB Insights reports that in 2016, real estate tech companies raised $2.6 billion across 235 deals. The third quarter alone notched 53 deals, marking seven straight quarters with more than 50 deals closed for real estate tech startups, until that streak was broken in the fourth quarter with 49 deals.” (Forbes)
Councilwoman Won’t Vote For Tech Hub Unless City Rezones Union Square South “A local councilwoman is threatening to withhold her approval of the city-backed Union Square Tech Hub — slated to replace the P.C. Richard & Son building on East 14th Street — unless the city agrees to rezone a cluster of nearby blocks preservationists fear will become an oversized “Silicon Alley” if left unchecked. Councilwoman Rosie Mendez has allied herself with the Greenwich Village Society for Historic Preservation’s campaign to cap building heights in the corridor between University Place and Broadway, claiming she will use her vote on rezoning measures for the upcoming tech hub as leverage to make those protections a reality.” (DNA Info)
What happens to French Quarter real estate with no short-term rentals? “A promised crackdown on short-term rentals in the French Quarter could shake up the real estate market in the city’s priciest neighborhood, where an estimated 400 houses and condos were listed on Airbnb last month. The impact of removing short-term rentals from the sought-after Vieux Carre will unfold in coming months. Property owners will have to consider how essential short term rentals are to their real estate investment and whether to sell or long-term rent their homes instead. More houses for sale or rent could drag down prices; more long-term residents could move in. The city’s landmark ordinance legalizing short-term rentals in most of New Orleans officially went into effect April 1. Property owners have until May 15 to register their short-term rentals with the city, but officials have warned that enforcement of the total ban in the French Quarter will begin sooner.” (The Times Piscayne)
Charities don’t pay property taxes. That pinches some city budgets more than others. “By one measure of charity, the village of Miami Shores tops the list in Miami-Dade. No municipality has a larger share of its tax roll occupied by nonprofits exempt from property taxes. Home to Barry University, the bayside village has about 11 percent of its properties protected by the tax exemption given to charities across the country. The rule frees hospitals, churches, universities and other private nonprofits from paying property taxes to local governments. And while almost every local government sees some lost revenue from the charity tax break, none comes close to the Miami Shores share of nonprofit exemptions.” (Miami Herald)
Savanna Sells Flatiron District Retail Condo for $97.5M After Three Years “TH Real Estate, an affiliate of TIAA Global Asset Management’s investment arm Nuveen, has acquired a retail condominium on the ground floor of the 23-story 10 Madison Square West from Savanna, Commercial Observer has learned. The 20,619-square-foot condo, which is 100 percent leased and is located on Broadway between West 24th and West 25th Streets, traded for $97.5 million, a source with knowledge of the deal told CO. TH Real Estate was drawn to the investment because of the site’s location, according to TH Real Estate’s Todd Rollins. “The Flatiron District is one of the most desirable live, work, play areas in Manhattan and is situated in a convenient location on the west side of Madison Square Park,” Rollins said in a statement. “Given its excellent visibility and strong national tenancy, we believe the asset will provide long-term stable income and an excellent return profile and will make a great addition to our urban retail portfolio in New York City.” (Commercial Observer)