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.
Thursday, the Dow Jones industrial average gained 23.76 points, or 0.1 per cent, to 18,597.70. The Standard & Poor’s 500 gathered 4.80 points, or 0.2 per cent, to 2,187.02. The Nasdaq composite picked up 11.49 points, or 0.2 per cent, to 5,240.15.
Benchmark U.S. crude gained $1.43, or 3.1 per cent, to $48.22 a barrel in New York. Brent crude, used to price international oils, rose $1.04, or 2.1 per cent, to $50.89 a barrel in London. Wholesale gasoline rose 4 cents to $1.49 a gallon. Heating oil edged up 4 cents to $1.53 a gallon. Natural gas rose 6 cents to $2.67 per 1,000 cubic feet.
US stocks edge higher as energy prices rise; dollar weakens — U.S. stocks again ticked higher Thursday as the continuing rebound in oil prices gave energy companies a lift. The gains were modest, however, as investors have been avoiding big moves. The dollar weakened further, and compared to the yen it’s at its lowest in almost three years. Energy companies were a standout as the price of U.S. oil reached its highest level since the beginning of July. The weakening dollar aided exporters including technology and chemical companies. Phone company stocks continued to slump, as did financial firms. Stocks haven’t moved much this week and haven’t made many big moves over the last month.
Applications for US unemployment benefits fall to 262,000 — Fewer people sought U.S. unemployment benefits last week, evidence that layoffs are scarce and employers are likely hiring at a solid clip. Weekly applications for unemployment aid slipped 4,000 to a seasonally adjusted 262,000, the Labor Department said Thursday. The four-week average, typically a less volatile measure, rose 3,000 to 265,250. The number of people receiving benefits ticked up 15,000 to 2.18 million. That’s nearly 4 per cent lower than a year earlier.
Average US 30-year mortgage rate slips to 3.43 per cent — Long-term U.S. mortgage rates edged lower this week, remaining at historically low levels as a potential spur to home purchases. Mortgage giant Freddie Mac said Thursday the average for the benchmark 30-year fixed-rate mortgage slipped to 3.43 per cent from 3.45 per cent last week. The average rate is down from 3.93 per cent a year ago, and is close to its all-time low of 3.31 per cent in November 2012. The 15-year fixed mortgage rate declined to 2.74 per cent from 2.76 per cent last week.
Wal-Mart raises annual profit outlook, reports strong sales — Wal-Mart’s vast fleet of stores and its online business are starting to click together. The company raised its earnings outlook for the year on Thursday and delivered strong profit and sales for the second quarter, as moves to improve the store and online experience are winning over customers. Wal-Mart has launched a flurry of changes, from making sure vegetables look good to cleaning up the stores to being sharper on keeping prices low. It’s melding online services with the stores — rolling out a mobile payment system to speed checkouts. And it’s pressing ahead with online grocery and pick-up services.
The Pros and Cons of Investing in Real Estate With a Partner “Investing with a partner in real estate, especially residential properties, can often be appealing as a business venture due to the inherent benefits, like mitigation of risk and shared responsibilities. But proceed with caution. Real estate investing partnerships are like any other business undertaking, and should be treated as such. This is even more important to consider when potentially partnering with friends or family. Before entering a partnership on a real estate investment opportunity, ask yourself, “Why am I doing this?” There should be an easily identified, tangible benefit to investing with a partner versus investing on your own. It could be any number of items, but if you can’t pinpoint what it is, maybe adding a partner is not right for the specific opportunity you have in mind.” (U.S. News & World Report)
BNP Paribas: Remain constructive on Chinese developers “[Video] Expect Chinese developers’ 2017 earnings to record margin improvements and big jumps in earnings growth, says BNP Paribas’ Lee Wee Liat.” (CNBC)
Areas hit hardest by the real estate bust are now seeing the highest gains “By the time it broke ground in March, Residences by Armani/Casa, a new condominium underway in Miami’s Sunny Isles Beach, already had more than 65 percent of its 308 units under contract. The planned 56-story tower, where prices range from about $2 million to more than $15 million, will include more than 35,000 square feet of amenities, including a restaurant, cigar room and a two-story spa. The sale of the Giorgio Armani-furnished penthouse, which will not be complete until next year, comes with a trip to Italy to meet Armani himself. The glossy new project sits on a stretch of Florida oceanfront where at least six other luxury buildings are in some stage of development amid a vigorous building boom in South Florida not seen in more than a decade.” (Washington Post)
Seattle’s Commercial Real Estate Market in High Demand as Second Quarter Market Reports Released “Cushman & Wakefield/Commerce released its second quarter Marketbeat Snapshot report detailing the Seattle and Puget Sound Eastside areas’ office markets. According to the reports, the commercial real estate office market continues to be in high demand. The Seattle-Bellevue-Tacoma unemployment rates increased from 4.8 percent in Q1 of 2016 to 5.2 percent. Despite the continuously increasing unemployment rate, employment actually continued to grow as a result of the high return to the workforce, pushing the labor participation rate higher. ‘As the labor participation rate continues to rise, we are also seeing a significant Chinese, Korean and Japanese increase of investments for Seattle’s commercial real estate market,’ said Dave Magee, Washington region market leader of Cushman & Wakefield/Commerce. ‘Amazon, Boeing and other major tech companies have been the driver to the growth in Seattle. This area has reached the level of attraction to international investors, and is now being compared to leading cities like New York, Washington D.C., Chicago, Los Angeles and San Francisco.’” (Yahoo! Finance)
Andrew Cuomo really wants to be New York’s next master builder — but can he deliver? “A year into his second term, Gov. Andrew Cuomo is a man with a limited legacy. Well before fiascoes like the Moreland Commission, there were triumphs: He signed same-sex marriage into law just months after taking office, and in 2013, inked what he calls the ‘toughest’ gun control law in the country. But when it comes to being a gubernatorial icon, nothing says “remember me” like giant infrastructure projects. On their paths to the White House, Franklin Roosevelt and Nelson Rockefeller constantly touted their records of public works that transformed New York. Cuomo, who likely shares their presidential ambitions, has some catching up to do. Which is perhaps why, in the days leading up to his sixth State of the State address, the governor evoked the names of Rockefeller and Robert Moses. The parallels were in reference to his Built to Lead program, a proposed $100 billion investment in the state’s infrastructure that includes overhauls of LaGuardia Airport, Penn Station and the Jacob K. Javits Center. ‘It is a development initiative that would make Gov. Rockefeller jealous,’ Cuomo said of the program.” (The Real Deal)
Skanska Tapped to Build $206M Michigan Hospital “A joint venture between Skanska USA and Closner Construction is developing a $206 million replacement hospital for UP Health System – Marquette in Michigan for Duke LifePoint Healthcare. The new replacement facility for the hospital, also known as Marquette General Hospital, will consist of approximately 538,000 square feet, 243 beds, and will also include an approximately 150,000-square-foot diagnostic and therapeutic service center, as well as nearly 183,000 square feet of patient care services. The project will also include an adjoining medical office building and parking structure. Construction began in May and is slated for completion in October 2018. Gresham, Smith & Partners is handling the design of the new hospital.” (Commercial Property Executive)
J.C. Penney turnaround plan focuses on private labels, omnichannel “J.C. Penney announced a three-year plan for accelerated growth and outlined its financial expectations for improved performance beyond 2017 at its analysts conference in Dallas on Wednesday. CEO Marvin Ellison said the retailer plans to break even this year and turn a profit of $450 million to $500 million by 2019. To achieve its goals, the retailer is expanding its private label efforts, special sizes and home appliance offerings. It will also focus on ramping up beauty products (including its successful Sephora concessions), speeding up its supply chain and expanding omnichannel efforts.” (Retail Dive)
Aldi Sets Up HQ, Distribution Center in Virginia “Grocery chain Aldi will be building a $57 million division headquarters and 500,000-square-foot distribution facility in Dinwiddie County, Va., just south of Richmond, it was announced Tuesday by Virginia Gov. Terry McAuliffe’s administration. Aldi declined to provide additional information about the project, but the Richmond Times-Dispatch reported that the 80-acre site is located at U.S. 460 and U.S. 1, on land being purchased from First Management Co. of Petersburg, Va. (That location is about a half-mile from a large Amazon distribution center.) The Times-Dispatch also reported that the facility is expected to be in operation by the end of next year. Aldi currently has 32 stores in Virginia and plans to open 60 more over the next five years, CEO Jason Hart said in a prepared statement.” (Commercial Property Executive)
PetSmart debuts new store concept heavy on service “PetSmart is looking to get a bigger share of the more than $60 billion Americans spent on their pets last year. The retailer has opened its first-ever PetSmart Pet Spa, in Oceanside, New York. The new store is aimed at offering an enhanced experience and is intended to test out various ideas for consideration within PetSmart’s network of 1,460 plus stores. The store features a heavy emphasis on pet services and has a modern design with approximately 7,400 sq. ft. of space – a smaller footprint than PetSmart’s typical stores, which average about 18,000-20,000 sq. ft. The store features a first for PetSmart stores, a self-service dog wash where customers can personally bathe their pups. It also features a range of grooming services where pets receive hands-on care by academy-trained, certified stylists.” (Chain Store Age)
Miami’s biggest developer delays construction of downtown condo tower “No one can escape the chill creeping into Miami’s luxury real estate market. The Related Group, South Florida’s biggest condo developer, confirmed Wednesday it would delay construction on a 298-unit project called Auberge Residences & Spa Miami. ‘The market is slower,’ said Carlos Rosso, president of Related’s condo division. ‘The dollar has appreciated a lot against Latin American currencies.’ Groundbreaking was originally set for 2017. Rosso said he wasn’t sure yet how long the project at 1440 Biscayne Blvd. would be delayed. ‘Do you have a crystal ball?’ he asked. A cascade of foreign buyers pushed Miami real estate into overdrive after the recession but has since dried up. Rosso says the slowdown doesn’t worry him and sales will continue at Auberge.” (Miami Herald)