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 rose 35.54 points, or 0.2 percent, to 19,251.78. The Standard & Poor’s 500 index picked up 7.52 points, or 0.3 percent, to 2,212.23. The Nasdaq composite added 24.11 points, or 0.5 percent, to 5,333.00.
Benchmark U.S. crude closed down 86 cents to $50.93 in New York. Brent crude, the international standard, shed $1.01 to $53.93 a barrel in London. Heating oil fell 2 cents to $1.64 a gallon, wholesale gasoline fell 2 cents to $1.54 a gallon and natural gas fell 2 cents to $3.64 per 1,000 cubic feet.
US productivity up 3.1 percent in third quarter – The productivity of American workers rose in the July-September quarter at the fastest pace in two years while labor costs slowed after a big jump in the spring. Productivity increased in the third quarter at a 3.1 percent rate, the Labor Department reported Tuesday. That followed three quarterly declines and was the best showing since the third quarter of 2014. Labor costs edged up at a 0.7 percent rate in the third quarter following a much faster 6.2 percent jump in the second quarter. The rebound in productivity was expected to be temporary. (ABC News)
Equinix to Buy 29 Verizon Data Centers for $3.6B “Verizon is selling its data center business to Equinix in a $3.6 billion cash deal as the communications giant focuses on digital transformation for its customers, the companies announced Tuesday. Redwood City, Calif.-based Equinix will get 24 Verizon customer-facing data sites, which include 29 data center buildings across 15 metro areas in the U.S. and Latin America. Data centers typically store large amounts of data on hard drives.” (USA Today)
Real Estate Sector Has Sunk Since Its Creation and Could Spiral Further “The S&P 500 real estate sector has been the market’s worst performer since its launch in September, and these high dividend-yielding names could see more difficulty ahead if rates move even higher. The sector is down 10 percent since its first day as an official sector, while the S&P has gained nearly 2 percent in the same time. Such poor performance comes as no surprise to S&P Global’s Erin Gibbs, who noted that after a strong start to the year, investors have recently been moving away from high dividend-yielding sectors.” (CNBC)
Asian Investors Shift to Seattle as a New Vancouver Tax Takes Effect “More and more Chinese and other Asian investors appear to be moving their money to markets in Seattle and Toronto, after a new tax on foreign property investment was announced in Vancouver—which in the past has been a prime destination for overseas buyers. The 15% levy was enacted in August in an effort to temper the province’s rising property rates; the price for detached homes in Vancouver has reportedly doubled over the past decade due to a surge in investment, Bloomberg reports.” (Fortune)
Alaska Airlines gets US approval to buy Virgin America – Alaska Airlines has won government approval to buy rival Virgin America after agreeing to reduce its flight-selling partnership with American Airlines. Parent company Alaska Air Group Inc. said Tuesday that it expects to close the $2.6 billion deal soon. Seattle-based Alaska is the nation’s sixth-biggest airline, and California-based Virgin is eighth. Together, they will become the fifth-biggest.
Amazon.com’s New Grocery Store May Not Pay Off for a Long Time “Shares of Amazon.com were slightly higher in mid-morning trading on Tuesday, the day after the e-commerce giant announced that it would open its first physical grocery store to the public in Seattle early next year. The store won’t have checkout counters because payment will be done through the app, allowing customers to avoid the frustration of lines. This is 100% the future of grocery shopping, Rosecliff Capital CEO Mike Murphy said on Fox Business’ ‘Varney & Company” on Tuesday morning.” (The Street)
From Sand to Shimmer: a Casino Resort Rises in Maryland “As MGM opens a new resort this week on a hillside overlooking the Potomac River, it will deliver a victory in a long effort to develop a shoreline carved from a sand and gravel pit. The $1.4 billion resort at National Harbor, a minicity south of Washington, puts casino gambling just seven miles from the nation’s capital and is a prominent addition to Prince George’s County, a long overlooked but upwardly striving county of 900,000 residents, the majority of them black.” (The New York Times)
Chertrit Group Secures $103M Loan Package for 49 Chambers Condo Conversion “The Chetrit Group scored $103 million in financing for its condominium conversion at 49 Chambers Street in the Financial District. The financing package includes a $70 million building loan and a separate $33.1 million project loan, according to records filed with the city on Monday. Real estate investment trust SL Green Realty TRData LogoTINY and real estate finance company Acore Capital are the lenders. Chetrit plans to turn the property at 49 Chambers, which was once home to Emigrant Industrial Services Bank and the New York City government agencies, into 81 condos.” (The Real Deal)
MAA, Post Properties Compete Merger “MAA and Post Properties Inc. have completed their merger, creating a company that has an equity market capitalization of about $11 billion and a total market capitalization of roughly $15 billion, the companies announced late last week. The combined company, headquartered in Memphis, will retain the MAA name and will continue to trade under the symbol ‘MAA’ on the NYSE. The transaction, which involved stock worth about $3.9 billion, had been announced in August and was touted as building the largest multifamily REIT that focuses on the Sun Belt.” (Commercial Property Executive)
Supervalu Finalizes Save-A-Lot Sale “Supervalu, Eden Prairie, Minn., completed its sale of Save-A-Lot to an affiliate of Onex Corp. for $1.365 billion in cash Monday. Supervalu and Save-A-Lot have now commenced a five-year professional services agreement under which Supervalu will provide certain back office services to Save-A-Lot. Supervalu has used $750 million of the net proceeds from the sale to prepay that portion of its outstanding term loan balance. It will use the remaining proceeds to further reduce debt and improve its capital structure.” (Supermarket News)
Chipotle’s Co-CEO Gives Half Its Restaurants a ‘C’ Grade “This won’t come as a surprise to many fast food eaters in the Northeast, but Chipotle Mexican Grill thinks a lot of its restaurants leave a lot to be desired. Chipotle founder and co-CEO Steve Ells said on Tuesday at the Barclays conference that he doesn’t think his restaurants are run well enough to bring customers back after last year’s E.Coli safety crisis that has sent the burrito chain’s sales plummeting for four straight quarters and little relief in sight.” (Fortune)
Amid Global Uncertainty U.S. Benefits from Safe-Haven Status “According to CBRE Group, U.S. commercial real estate lending markets expanded in Q3 2016, as capital markets conditions became increasingly favorable amid global uncertainty. U.S. capital markets remained favorable to borrowers in Q3 of 2016, despite some concerns at the beginning of the quarter regarding the direction of the global economy following Britain’s late-June vote to exit the EU. Instead, U.S. capital markets benefited from their perception as a safe haven, as investors moved into Treasuries and other debt instruments.” (World Property Journal)