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 rose 168.43 points, or 1%, to close at 17,888.35. The Standard & Poor’s 500 index rose 22.22 points, or 1.1%, to 2,102.63 and the NASDAQ composite rose 47.64 points, or 0.9%, to 5,156.31.
Benchmark U.S. crude rose 20 cents to $41.85 a barrel on the New York Mercantile Exchange. Brent crude, which is used to price oil internationally, lost 17 cents to $44.44 a barrel in London. Heating oil rose a cent to $1.369 a gallon, wholesale gasoline rose six cents to $1.363 a gallon and natural gas was roughly unchanged at $2.231 per thousand cubic feet.
Landlords buy bankrupt retailers' leases back to seek new opportunities -Shopping center owners, banking on the short supply of retail space, are buying back leases from struggling tenants in the hopes of securing new tenants willing to pay higher rents. Owners such as Brixmor Property Group Inc., Federal Realty Investment Trust and Kimco Realty Corp. purchased space when grocery chain A&P filed for bankruptcy and may be able to turn these around with tenants paying $20 to $30 a square foot, though the move is a gamble. (WSJ)
How Seritage plans to add value to its Sears retail portfolio - Seritage Growth Properties, the real estate spinoff of Sears Holding Corp., is ready to focus on executing projects, says CEO Benjamin Schall. He notes that the average site has 13 acres of land, with opportunities to add density over time, and that Seritage has the right to downsize Sears stores. Seritage could convert them into multitenant shopping centers at higher rents, Schall said. (REIT.com)
Silicon Vies for a Piece of the U.S. Mortgage Market “Social Finance Inc., a San Francisco-based online lender that refinances government-backed student loans, is originating about $50 million a month of loans like the one it made to Patmont, according to Chief Executive Officer Mike Cagney. Next year, SoFi plans to issue as much as $3 billion of mortgages, including interest-only loans and others that can be sold to Fannie Mae and Freddie Mac, he said.” (Bloomberg)
Investing in Real Estate for Retirement with a Solo 401 (k) “Most people turn to stocks, bonds and mutual funds when they want to invest for retirement. These assets can be good sources of passive income — but some retirement savers prefer to mix in alternative investments, such as real estate, as well. Solo 401(k) plans allow certain investors to do just that. These self-directed plans are designed for owners of small businesses without any full-time employees other than the owner and the owner’s spouse.” (NASDAQ)
Private Equity Market Is Expected to Attract $629 Billion in 2015 “Private equity funds took in $364 billion in the first three quarters of the year, and fund-raising is on pace to reach $468 billion by year-end, the highest annual amount for traditional funds since 2008, according to data from the investment advisory firm Triago. Notable is the amount of money raised in a separate category — what Triago calls ‘shadow capital,’ or side deals that investors strike with funds to co-invest or directly invest in deals.” (New York Times)
Brooklyn Is Leading the U.S. in Apartment Construction “Those construction cranes you see hovering over Brooklyn could represent the fulfillment of a lot of people dreams: the construction of a lot of apartments. Emphasis on ‘a lot.’ New York’s Kings County is likely to have the most new apartment units delivered in 2016 of any submarket in the U.S., by Axiometrics’ estimation. Some 6,073 units have been identified for delivery in Brooklyn next year as of Nov. 16, a huge increase from the 969 that came to market this year.” (Forbes)
RCAP Appoints New General Counsel “RCS Capital (RCAP) has appointed Mason Allen as its new general counsel, taking over for James Tanaka immediately. In a statement, the firm did not say why Tanaka left the position. His LinkedIn page says he’s serving as chief securities counsel and executive vice president at American Realty Capital. Most recently, Allen was serving as assistant general counsel at RCAP.” (Wealthmanagement.com)
A Hot 2016 for Seattle Real Estate “Seattle's supercharged market for everything from skyscrapers to single-family houses is expected to keep booming next year, even with higher interest rates. Metro Seattle ranks fourth nationally as the hottest market to watch for 2016, according to the influential Emerging Trends in Real Estate survey by the Urban Land Institute. This marks a rise from No. 8 in last year’s report. Emerging Trends has proved to be a good barometer of Seattle’s real-estate prospects.” (Seattle Times)
Sheldon Silver Found Guilty on All Counts in Corruption Trial “Former state Assembly Speaker Sheldon Silver was convicted on all seven criminal counts Monday in a corruption scheme that traded taxpayer cash and political favors for nearly $4 million in payoffs. A Manhattan federal jury deliberated less than three days before finding the veteran lawmaker guilty of seven charges of honest-services fraud, extortion and money laundering.” (New York Post)
Multifamily Units: Third Quarter Post-Up “The average per unit square footage for multifamily housing construction starts was 1,119 ft for 3Q 2015, down from 1,247 ft (the post-recession high set earlier this year). According to Robert DIetz, the current quarterly average is only 4% higher than the post-recession low. Market mix is viewed as the key factor behind this change in multifamily average size.” (Multifamily Executive)
Teenage Wasteland: Can This Wall Zombie Be Saved? “When Melanie Cox gave the staff of fashion retailer Wet Seal her rah-rah spiel in August, she knew they had heard it all before. Here before them was the company's fourth chief executive in as many years, with yet another plan to recharge sales. ‘If I could've been inside a lot of their heads, I think it'd be like, OK, here we go again,’ she said. Cox has inherited a retailer reeling from more than a decade of tumult.” (Bloomberg)
US factory activity drops in Nov.; first decline in 3 years - U.S. factory activity plummeted last month to the lowest level in more than six years, with a stronger dollar and low oil prices cutting new orders and hurting production. The Institute for Supply Management said Tuesday that its index of factory activity in November dropped to 48.6 from 50.1 in October. Any reading below 50 signals contraction. It now rests at its lowest level since 2009, a worrisome sign as Federal Reserve officials will consider raising short-term interest rates this month on the understanding that the economy has sufficiently healed from the Great Recession.
US construction spending rises to highest level in 8 years — U.S. construction spending jumped in October, fueled by solid gains in home building and the largest increase in federal construction in nine years. The Commerce Department said Tuesday that construction spending rose 1 per cent in October from the previous month to a seasonally adjusted annual rate of more than $1.1 trillion. That’s the highest level since December 2007 when the Great Recession began. More Americans are buying new homes or renting apartments, driving greater residential development. And federal, state and local governments, spurred partly by greater tax revenue, are building more roads and schools. Construction spending has increased 13 per cent in the past 12 months.