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 Dow Jones industrial average added 3.76 points, or 0.02 per cent, to 18,533.05. The Standard & Poor’s 500 index rose 0.85 of a point, or 0.04 per cent, to 2,181.74. The NASDAQ composite index gained 12.34 points, or 0.2 per cent, to 5,225.48.
Benchmark U.S. crude fell 25 cents, or 0.6 per cent, to close at $42.77 per barrel in New York. Brent crude, used to price international oils, slid 41 cents, or 0.9 per cent, to close at $44.98 per barrel in London. Wholesale gasoline slipped 2 cents to $1.35 a gallon, while heating oil lost a penny to $1.33 a gallon. Natural gas fell 13 cents, or 4.8 per cent, to $2.62 per 1,000 cubic feet.
US stocks eke out small gains; NASDAQ sets record close -- U.S. stocks recovered from a late-afternoon slide to eke out small gains Tuesday, nudging the NASDAQ composite to its second record close in less than a week. The three major stock indexes, all of which set new highs last Friday, rebounded from a slight decline on Monday. Investors focused on the latest batch of company earnings, bidding up health care, telecommunications and consumer-focused companies most. Energy was the biggest laggard, as crude oil prices closed lower, backtracking after an early rally. Traders also sold off shares in big department store chains after The Gap reported lower sales figures.
Survey: Americans remain gloomy about economy, Chinese sunny — Americans, Japanese and many Europeans are glum about their national economies. By contrast, Chinese, Indians and Australians feel positive about theirs. Those are among the findings from a survey released Tuesday of 20,132 people in 16 countries by the Pew Research Center. Just 44 per cent of Americans rated the U.S. economy as “good,” although that proportion has risen steadily from 18 per cent in 2011. Since that year, the U.S. unemployment rate has tumbled from 9 per cent to 4.9 per cent.
Who Owns the City? How Urban Real Estate Became the Corporate Asset Class of Choice “The term ‘gentrification’ does not quite capture the massive changes that have been happening in a growing number of cities worldwide in the last few years. In mid-2014 to 2015 alone, more than a trillion dollars was invested in real estate in just 100 cities across North America, Europe and Asia; this is excluding properties priced under $5m and sites available for development. Something else is happening. Urban land – not just buildings, but also undeveloped lots – is considered a good investment at a time when financial markets are shaky.” (CityMetric.com)
REITs Beat Dow, S&P Indexes in July “Although it may be too early to judge whether commercial real estate broadly has benefited from the turbulence caused by June’s unexpected outcome for the U.K. referendum on European Union membership, it’s clear that the U.S. real estate investment trust sector has been riding high in a post-Brexit environment. Susan Persin of Trepp, a real estate data provider, reports that a combination of strong market fundamentals, positive second-quarter earnings reports and post-Brexit assurances of ongoing low interest rates helped REITs achieve a 3.87% total return in July, outpacing the Dow Jones industrial average and the Standard & Poor's 500 index.” (ThinkAdvisor)
China Needs More Time to Review Marriott’s Acquisition of Starwood Hotels “China has extended its review of Marriott International acquisition of Starwood Hotels & Resorts Worldwide by up to 60 days, the companies said on Monday. China’s Ministry of Commerce (MOFCOM) review is the only remaining merger clearance for the deal, which is expected to create the largest hotel group in the world with a combined enterprise value of $36 billion and 1.1 million hotel rooms.” (Fortune)
US worker productivity falls in 2Q, causing annual decline — American workers’ productivity slipped in the April-June quarter, feeding into a 12 month decline in how much people are producing for each hour worked. Productivity fell at an annual rate of 0.5 per cent in the second quarter, the Labor Department said Tuesday. Over the past 12 months, productivity has dropped 0.4 per cent, as labour costs and the hours worked are rising faster than the output of workers’ goods and services. Unit labour costs rose 2 per cent in the second quarter, after decreasing 0.2 per cent in the first quarter.
US wholesale inventories rise 0.3 per cent in June — U.S. wholesale businesses increased their stockpiles slightly in June while sales rose at a faster pace. The Commerce Department says inventories at the wholesale level increased 0.3 per cent in June, close to the 0.2 per cent gain in May. Sales increased for a fourth consecutive month, climbing 1.9 per cent in June. Since late last year, businesses have been slowing the rebuilding of their stockpiles in the face of weaker domestic sales and a fall in export sales. The slowdown in inventory restocking dampened overall economic growth, but many economists believe inventories will enhance growth in the second half of 2016.
E-Commerce Forces Shift in Warehouse Building “The rise of online shopping is forcing warehouse builders to redraw the map of logistics hubs on the East Coast. Over the weekend, FedEx Ground, one of the largest transporters of parcels and other shipments, broke ground for its largest facility in the country, an 800,000-square-foot automated distribution center in Allen Township, Pa., adding a large chunk of space to the cluster of logistics real estate in the state’s Lehigh Valley area.” (Wall Street Journal)
Bankrupt Teen Retailer Aeropostale is Thinking of Selling to a Private Equity Firm “Aeropostale Inc has been negotiating a potential sale to private equity firm Versa Capital Management LLC that would save thousands of jobs at the bankrupt U.S. teen retail chain and keep many of its stores open, according to a court filing. Versa, which specializes in distressed investments, would pay an undisclosed amount of cash for Aeropostale's inventory and take on over 500 of the chain's leases, located mostly in malls across the United States, according to the filing made late on Thursday.” (Reuters)
After Last Real Estate Boom, Hangover Lingers for Some “It may feel like 2006 for many real estate investors, but when it comes to one indicator it looks more like 2009—a year many would like to forget. The delinquency rate on Chicago-area commercial mortgage-backed securities loans fell to 4.53 percent in July, a five-month low and down from a peak of 10.35 percent in 2013, according to Trepp, a New York-based research firm. But that's roughly where the rate was in late 2009 when distressed properties were starting to pile up.” (Chicago Real Estate Daily)
Downtown St. Paul Makes Room for New Settlers “The restoration is one of the most ambitious historic preservation undertakings in downtown St. Paul, where a few years ago investors began adding apartments, hotel rooms and restaurants. In particular, developers are turning brick-and-stone warehouses that once outfitted arriving settlers with clothes, shoes, bedding and other necessities into mixed-use properties in the roughly 16-block Lowertown Historic District. The federal building, known as Custom House, has 202 high-end units on floors six through 17, and a 149-room Hyatt Place hotel on floors two through five is scheduled to open in September.” (The New York Times)
Target to Open Country’s First Urban-Style Store Near UC Irvine “Irvine will be home to Orange County’s first flexible-format Target store, as part of the retail chain’s effort to grow in urban and college campus markets. The new store is scheduled to open in July 2017 at the University Center mall, adjacent to UC Irvine at Bridge Road and Campus Drive, Target announced Monday. The company is opening stores with flexible designs at its smaller locations, offering a customized selection of items to meet the needs of local clients, such as the UC Irvine students.” (The OC Country Register)
Chicago-Area Housing Construction at Seven-Year High, Study Says “Homes are being built in the Chicago area at the strongest pace in seven years. According to housing consulting firm Metrostudy, through the second quarter of this year annual new home construction was up 5.6 percent in the Chicago area. Yet while there is some momentum in the market, gains are modest. The number of homes that have been completed and sold declined 4.1 percent, the study found.” (Chicago Tribune)
Equity Residential Flouting Law by Running Airbnb-Style Hotel in Midtown: Lawsuit “Don’t count Equity Residential among the landlords who fervently oppose Airbnb’s controversial business model. A new lawsuit says the real estate investment trust ‘brazenly’ made money by turning its Midtown rental building into an Airbnb-styled hotel. In a suit filed Friday, tenants Clifford and Mie Yellen accused the Sam Zell-controlled REIT of ‘defiantly’ flouting a New York law preventing short-term rentals, and instead running an ‘illegal makeshift hotel’ for the past six years at Hudson Crossing, a 259-unit rental building at 400 West 37th Street.” (The Real Deal)
GM begins autonomous car tests in Scottsdale, Arizona -- General Motors and its autonomous technology company Cruise Automation are testing self-driving cars on the streets of Scottsdale, Arizona. Testing of self-driving electric Chevrolet Bolts began in Arizona about two weeks ago. It’s the second city for GM’s real-world tests. Autonomous Bolts with Cruise Automation software have been driving around San Francisco since May 20. GM spokesman Kevin Kelly says the company is considering other cities for tests but wasn’t ready to announce locations.