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 climbed 114.78 points, or 0.6 percent, to 19,911.21. The blue-chip index went as high as 19,953. The Standard & Poor’s 500 index picked up 14.76 points, or 0.7 percent, to 2,271.72. The Nasdaq composite climbed 51.29 points, or 0.9 percent, to 5,463.83.
Benchmark U.S. crude rose 15 cents to $52.98 a barrel in New York. Brent crude, the international standard, added 3 cents to $55.72 a barrel in London. Wholesale gasoline edged up 1 cent to $1.55 a gallon. Heating oil remained at $1.67 a gallon. Natural gas lost 3 cents to $3.47 per 1,000 cubic feet.
Dow nears 20,000 as energy companies and tech stocks climb – Major U.S. stock indexes set records again Tuesday as energy companies continued to climb following international deals that will cut oil production. Big-name technology companies like Apple and IBM also traded higher as the Dow Jones industrial average closed above 19,900 for the first time. The Dow finished at an all-time high for the seventh consecutive trading day. The biggest gain went to IBM, while Apple and Exxon Mobil also finished near the top. Energy companies rose for the ninth day out of the last 10 as investors anticipated steadier oil prices and larger profits. Technology companies also jumped.
TUCSON OFFICIALLY FILES CHALLENGE TO STATE LAW – The City of Tucson yesterday filed a Complaint for Special Action in Pima County Superior Court, contesting the provisions of SB 1487 on various constitutional grounds. The complaint asks the Court to declare the law invalid in its entirety and in its component parts; to enjoin the Arizona attorney general and treasurer from taking any actions under the law; to declare the bond requirement unlawful; to declare that SB 1487 cannot be used to overcome the powers granted to charter cities; and to declare that the City’s code relating to disposal of firearms is a matter of local concern and a lawful exercise of the City’s charter authority. The complaint also seeks recovery of attorney’s fees. Arizona Attorney General Mark Brnovich asked the Arizona Supreme Court to cut off the City’s state aid for its policy that allows the destruction of confiscated firearms. Potentially at stake is $115 million a year that Tucson receives in state-shared revenue. The Arizona Supreme Court on Jan. 10 will decide whether the justices will even look at Brnovich’s complaint. Meanwhile, the City Council said it will temporarily stop the practice of destroying guns until the legal issue has been resolved, but it directed City Attorney Mike Rankin to take all legal action to defend the City’s rights under the Tucson City Charter. (Capitol Media Services via the Arizona Daily Star)
WORK PROGRAM FOR HOMELESS GETS LARGE DONATION – The Tucson Homeless Work Program just got a financial boost from a local real estate investor. Humberto Lopez of HSL properties today presented a check for $50,000 to benefit the one-year pilot program that began last week. The program allows homeless people to join a day-labor crew to clean streets and medians for $10 an hour in cash. Recent participants cleared trash and brush from city traffic circles. Those who take part in the pilot program get two meals, a shower, and other services. The program is administered by Old Pueblo Community Services. From Ward 5 Council Member Richard Fimbres’ Facebook page: http://bit.ly/2hu3mK4
SOFTBALL OFFICIALS NEEDED FOR CITY LEAGUES – The City of Tucson Parks and Recreation Sports Unit is seeking softball officials for its adult ASA Slowpitch Leagues. Tucson offers a spring league beginning in March and a fall league beginning in August. Classroom and field mechanics training are required. If you’re interested, please call (520) 791-4870 or e-mail firstname.lastname@example.org by Feb. 3.
PARENTS NIGHT OUT FRIDAY – Enjoy more than three hours of childless free time Friday, while your kids have organized activities with Tucson Parks and Recreation. The event runs from 4:30-7:45 p.m. at Udall Recreation Center, 7200 E. Tanque Verde Road. The cost per child (ages 5-11) is $4. The event features a showing of the movie Finding Dory, pizza, popcorn, and drinks. Tomorrow is the deadline to register (call 791-4931). Parents are encouraged to bring additional snacks and drinks and a donation of a non-perishable food item for the Community Food Bank of Southern Arizona. Community Food Bank of Southern Arizona: http://bit.ly/1cxrKze
NAT GEO MAGAZINE: TUCSON AMONG ‘BEST WINTER TRIPS 2017‘ – National Geographic lists Tucson as a great vacation destination over the winter. The latest list of the ten best cities in winter includes mentions of Tucson’s food scene. “Enjoy delicious food on a budget in a city that draws its culinary inspirations from Native American, Spanish, Mexican, and Anglo-American influences,” the article says. The magazine also highlights Tucson’s proximity to the U.S.-Mexico border, the Tucson Gem, Mineral & Fossil Showcase, easy traveling and public transit, bicycling, and more. Tucson is the only city in the United States to make the international list of best winter vacation destinations. Complete Best Trips of 2017 National Geographic article: http://on.natgeo.com/2hru8lW
Opus Plans 540 KSF Industrial Project Near Phoenix “The Opus Group is keeping busy in the Phoenix metro area with a master-planned, 96-acre speculative industrial project in Goodyear, Ariz. The company intends to begin work on the 540,000-square-foot first phase of the development at Goodyear Crossing Industrial Park in early 2017. Phase I of the project will consist of a 540,000-square-foot industrial building with expansion capability to more than 1.1 million square feet, and will be one of only two buildings in the area to have at least 500,000 square feet of available space with 36-foot clear heights.” (Commercial Property Executive)
Small businesses seem to like a unified Republican government — President-elect Donald Trump’s victory in the U.S. elections is a giant leap for small businesses, according to a survey of their owners. The November reading of the National Federation of Independent Businesses’ small business optimism index jumped to 98.4 from 94.9 — its sharpest surge since 2009 — with all of the increase in sentiment coming after the U.S. elections held on Nov. 8. Among those who were surveyed following the election, the balance of opinion on whether business conditions were expected to improve skyrocketed from a reading of -6 to a whopping +38. (Bloomberg)
Monsanto shareholders approve Bayer’s $57 billion takeover – Monsanto Co. shareholders on Tuesday overwhelmingly approved a $57 billion merger with Bayer AG, a deal that would combine two of the world’s biggest agricultural companies. But the path toward securing regulatory approval may be rough. Critics say the combination would shrink competition in the agricultural market, drive prices higher for farmers and consumers, and escalate damage to the environment. Monsanto and Bayer officials say growers and ranchers stand to benefit, and the combined company will be better suited to address issues like climate change. Preliminary results showed that 99 percent of all votes cast favored the merger announced in September, St. Louis-based Monsanto said. Shareholders will receive $128 per share in cash at the closing of the merger, which must still receive regulatory approval. Monsanto said the deal is expected to close by the end of 2017.
Fifth Avenue is Barely Clinging to its Priciest-in-the-World Title “Once again, in 2016 the most expensive shopping strip in the world was Manhattan’s Upper Fifth Avenue, where annual rent averaged $3,000 per square foot. But the luxury nexus, which goes from 49th Street to 60th Street—and houses world-famous stores such as Tiffany & Co., Saks Fifth Avenue and Bergdorf Goodman’s flagships—could be losing its grip on that mantle: in 2015, the average rent was $3,500, according to Cushman & Wakefield research.” (Fortune)
Kroger Poised to Buy Walgreens/Rite Aid Stores “Kroger Co. could be close to wrapping up a deal to buy some of the Walgreens and Rite Aid stores that Walgreens needs to divest when it completes its acquisition of the drug store chain. The deal involving multiple buyers for nearly 1,000 stores should be finalized by year-end, an attorney told mergers and acquisitions reporting website CTFN. A real estate executive told CTFN that Kroger is in line to buy some of the stores while discount pharmacy chain Fred’s is set to buy what that person called a ‘substantial’ number of stores.” (Cincinnati Business Courier)
Mall of America Gets an IBM Watson-Powered Bot for Holiday Shopping “IBM today announced the launch of a pilot program to deploy its artificial intelligence inside Mall of America. Mall of America in Bloomington, Minn. covers 5.6 million square feet, making it the largest retail space in the U.S. The Experiential List Formulator (E.L.F.) can now help guests manage their options by suggesting ways to spend time at the mall’s more than 500 stores and theme parks.” (Fortune)
U.S. Commercial, Multifamily Mortgage Delinquencies Remain Low in Q3 “According to the Mortgage Bankers Association’s Commercial/Multifamily Delinquency Report, delinquency rates for commercial and multifamily mortgage loans remained low in the third quarter of 2016. The MBA analysis looks at commercial/multifamily delinquency rates for five of the largest investor-groups: commercial banks and thrifts, commercial mortgage-backed securities (CMBS), life insurance companies, Fannie Mae, and Freddie Mac. Together these groups hold more than 80 percent of commercial/multifamily mortgage debt outstanding.” (World Property Journal)
Morningstar Adds Houston Properties to Real Estate ‘Watchlist’ “Several large real estate loans backed by Houston office buildings with vacant space and exposure to the volatile energy industry have the potential to default, according to a recent report from a ratings agency Morningstar Credit Ratings. Morningstar’s November “Watchlist” report includes loans held in commercial-backed mortgage securities with an elevated risk of default based on a number of factors, including building occupancy, upcoming lease expirations and the amount of debt the owner has on the property.” (Houston Chronicle)
CBRE Boosts Retail Presence with Skye Group Acquisition “CBRE Group Inc. recently announced the acquisition of Skye Group, a provider of retail project management, shopping center development and tenant coordination services in the U.S. and Canada. This acquisition enhances CBRE’s position in the retail market by boosting its retail project management service offerings. Terms of the deal were not disclosed. Based in the Oswald Centre on 1100 Superior Ave., in Cleveland, Skye is a local consulting firm founded in 2000.” (Commercial Property Executive)
Rutgers Now Offering Certification in Real Estate Development & Redevelopment “Last week, Rutgers announced that it will now offer a graduate-level certification program dedicated to development and redevelopment through the Rutgers Business School Center for Real Estate in partnership with the Edward J. Bloustein School of Planning and Public Policy. The program will cover various courses including land use planning, property tax regimes, urban redevelopment, environmental law and policy, community economic development, among others.” (Jersey Digs)
Rising Housing Costs Precipitate Increases in Eviction Rates “According to Redfin, an estimated 2.7 million Americans faced a home eviction in 2015. Redfin analyzed more than six million eviction records across 19 states where data was available provided by American Information Research Services, Inc. to predict the number of evictions for each U.S. county as well as the country at large. Redfin also examined the effects of rising home prices at neighborhood and metro levels on local eviction rates.” (World Property Journal)
Communal Living: Should Real Estate Developers Be Interested? “In recent years, the concept of utilizing shared resources has gained traction in the housing market. Targeting cities where demand for rental properties has prompted a spike in prices, communal living has emerged as a cost-effective alternative. The rise of communal living is an attempt to fill a gap in the residential marketplace and a buzz continues to build around the startups that are spearheading the charge. At issue for real estate developers, however, is whether it’s a trend that’s both sustainable and powerful enough to transcend beyond a small market niche.” (Forbes)