Real Estate Daily News Buzz February 15, 2016
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 92.25 points, or 0.5 percent, to 20,504.41. The Standard & Poor’s 500 index rose 9.33 points, or 0.4 percent, to 2,337.58 for its sixth straight day of gains. The Nasdaq composite rose 18.62, or 0.3 percent, to 5,782.57.
Benchmark U.S. crude oil rose 27 cents to settle at $53.20 per barrel. Brent crude, the international standard, rose 38 cents to $55.97 a gallon in London. Natural gas fell 4 cents to $2.91 per 1,000 cubic feet, heating oil rose a penny to $1.64 per gallon and wholesale gasoline was close to flat at $1.55 a gallon.
2 big insurance breakups on Valentine’s Day — Cigna says it is ending Anthem’s proposed, $48-billion acquisition bid and seeking billions in damages from the Blue Cross-Blue Shield insurer. The announcement comes hours after another major insurer, Aetna Inc., said it was abandoning its planned, $34-billion purchase of Medicare Advantage provider Humana Inc.
Voice your opinions about highway improvement plans – The Arizona Department of Transportation (ADOT) and the Federal Highway Administration (FHWA) are hosting a public scoping meeting this week about potential improvements to two important corridors that serve the Tucson area: Interstate 10 from the I-10/Interstate 19 interchange to Kolb Road and State Route 210 (Barraza-Aviation Parkway) from Golf Links Road to a future connection with I-10. The meeting will provide study information and solicit community feedback on study area issues and concepts. The Environmental Assessment and Design Concept Report also will be discussed. The purpose of the Environmental Assessment is to identify environmental concerns and impacts in the study area. The Design Concept Report is meant to further refine alternatives in order to relieve congestion and improve traffic flow. The scoping meeting will be held this Wednesday, 6-7:30 p.m., at El Pueblo Regional Center, 101 W. Irvington Road. If you can’t make the meeting, you can follow the link below to offer your comments.
Ina Road closing at I-10 for two years beginning February 15th – For the next 25 months or so, motorists will not be able to pass under Interstate 10 on Ina Road or exit from the interstate in either direction. Ina Road at I-10, including the east and westbound on- and off-ramps at Ina, will close at 1 a.m. Wednesday. The westbound I-10 frontage road from the Orange Grove on-ramp to Cortaro Road is scheduled to close at the same time, according to an Arizona Department of Transportation (ADOT) news release. Ina Road east and west of I-10 will remain open during the closure, and ADOT will ensure that all businesses in the work zone are accessible throughout the project. The closure is part of a reconstruction project designed to improve traffic flow in the area by widening I-10 and adding an extra lane in each direction and widening Ina from Silverbell Road to Camino de la Cruz. Managed by ADOT, the project is funded by the $2.1 billion Regional Transportation Authority (RTA) plan approved by voters in 2006.
More than 200 jobs coming to Tucson’s Southside – Dave & Buster’s now is accepting applications to fill 230 jobs at its new Tucson location near South Park Avenue and Interstate 10. The company says the restaurant/video arcade is expected to open April 3. The company is hiring all positions, which include managers, game techs, servers, hosts, bartenders, cooks, front desk, and back of house jobs. If you’re interested in applying, please follow the company link below.
New jobs report shows positive signs of growth – The Tucson area is expected to add 7,100 jobs this year, according to a report from Picor Commercial Real Estate. The report says the projected job growth could mean a steady rise in home prices and commercial properties in the area. New or expanding retail absorbed more than 386,000 square feet of space in 2016, the Picor report shows. Industrial activity also showed growth last year, as did the number of building permits.
Payless Inc. in talks with lenders over a restructuring plan including closing 1,000 stores as it wrestles with an unsustainable debt load, according to people with knowledge of the matter. The discount shoe retailer may consider filing for bankruptcy if it’s unable to reach a deal with the creditors, said the people, who asked not to be identified because the information isn’t public. A decision on whether to restructure in or out of court may be reached as soon as this month, they said. The chain has hired Guggenheim Partners to help in the effort, the people said. Guggenheim declined to comment, as well as Payless. Payless is the latest retailer to find its back against the wall because of declining mall traffic as more and more customers shift spending to experience from shoes and apparel. The retailer hired law firm Kirkland & Ellis LLP to look at options for its $600 million debt load, people with knowledge of the matter said earlier. Payless was bought by private equity firms Golden Gate Capital and Blum Capital Partners in 2012 as part of a split of publicly traded Collective Brands Inc. The company, founded in 1956 in Topeka, Kansas, has more than 4,400 stores in 30 countries and employs more than 25,000 people, according to its website.
The Humane Society of Southern Arizona (HSSA) is opening a 4th Avenue Thrift Boutique and is asking the public for donations to benefit their brand new thrift store, Best In Show, a Thrift Boutique, set to open on 4th Avenue this year. HSSA opened a successful thrift store location in 2011, located at 5311 E Speedway, and is excited to announce the expansion of their thrift retail enterprise. “The store on Speedway has been very successful over the last 6 years, so when we were given the opportunity to expand our efforts onto 4th Avenue, it felt like a really good fit. We’ve signed a one year lease, and are currently getting the space painted and prepped,” says Brandy Burke, Chief Operations Officer. The new store will cater to the 4th Avenue crowd, with a mix of vintage and designer finds, at thrift store prices. “We hope to use the space to host some smaller events, as well,” says Burke. Donations can be made at the existing Thrift Store location at 5311 East Speedway location, or can be picked up free of charge by calling 520-327-0010. A soft-launch of the store is planned for mid-February, with a grand opening celebration in March.
Fed Report Says Some Smaller Banks May Be Vulnerable to Drop in Commercial Real Estate Prices “Rising commercial real estate prices may leave some small banks vulnerable to a drop in the market, the Federal Reserve said Tuesday. In a report to Congress on financial stability, which accompanied Fed Chairwoman Janet Yellen’s testimony to the Senate Banking Committee, the central bank said that commercial real estate prices, which have been an area of growing concern at the central bank, rose further.” (MarketWatch)
Walmart Is Undergoing a Significant Transformation—and That Should Terrify Amazon “Wal-Mart Stores Inc for the first time will combine its own buying for products sold at its stores with purchases it makes for its website, sources said, a significant move to stamp out duplicate efforts as it consolidates buying operations to better fight Amazon.com Inc. Vendors contacted by Wal-Mart about the change told Reuters the store and online buying teams of the world’s largest retailer currently operate independently.” (Reuters)
Nike and Coach Are Fighting Amazon by Creating Stores That Appeal to All the Senses “The Nike Inc. store in Soho is more than just a place to try on sneakers and workout gear. It’s a playground, equipped with a small soccer pitch, a basketball court and treadmills, so consumers can take potential purchases for a test drive. Even if a customer only wants to try on a few things, there’s someone to help with styling in the fitting room. ‘This is the future of retail,’ said Heidi O’Neill, president of direct-to-consumer at Nike. ‘Gone are the passive days of street traffic. It’s about connecting and welcoming back our customers.’” (MarketWatch)
Commercial Real Estate Executives Cautiously Optimistic “The Real Estate Roundtable’s first quarter sentiment index, released Friday, registered at 55, up seven points from the pre-election fourth quarter. A recent report on trends in the U.S. property market in 2017 said it would be characterized by continued strong fundamentals, increased investor flows and high transaction volume. The Real Estate Roundtable’s overall sentiment index is scored on a scale of 1 to 100 by averaging current and future indexes; any score above 50 is considered positive.” (ThinkAdvisor)
CMBS Market Remains Steady in Post Risk-Retention Era “January was the first complete month since new risk-retention laws for CMBS loans went into effect, and despite earlier concerns, CMBS activity remained steady. In January, there was a total of $61.8 billion on the New York CMBS market, down 1 percent from $62.4 billion in December, and the delinquency rate fell from .79 percent to .76 percent, according to data from Trepp. A total of $810 million in newly issued CMBS loans backed by New York properties entered the market in January in three separate deals.” (The Real Deal)
High Line Creator Admits the Park is a Problem for Residents “The creator of the High Line admitted the design is no good for neighbors who have long griped about the constant parade of tourists marching just feet from their homes, a new report reveals. Designers cared more about the look of the of the elevated park than how it would affect the folks who live just feet from it, said co-founder Robert Hammond. The tourist attraction has drawn millions of visitors since it opened in 2009. But neighbors have complained about everything from loud crowds to obnoxious tourists snapping photos of their backyards, saying it destroys the neighborhood it cuts through.” (New York Post)
Nashville Real Estate Market Can Handle Growth “The pace of commercial development in Nashville has been challenging to keep up with, as cranes and construction sites continue to pop up throughout the city. In addition, residential builders are constructing new homes at a break-neck pace to accommodate the steady flow of new Nashvillians moving to the market. Some worry the pace of development has outrun the momentum of demand. There is fear of an overheated real estate market hitting the wall as Nashville becomes overbuilt.” (The Tennessean)
HASI Invests $144M in Land for Solar Projects “Hannon Armstrong Sustainable Infrastructure Capital Inc. has acquired, for $144 million, more than 4,000 acres of land that’s leased under long-term contracts to more than 20 individual solar projects with investment grade off-takers (customers that have contracted to buy power). The projects have an aggregate capacity exceeding 690 megawatts of direct current. Including this transaction, HASI has invested about $375 million in real estate and owns more than 20,000 acres of land leased under long-term agreements to over 45 renewable-energy projects.” (Commercial Property Executive)
Pima Animal Care Center will join animal-welfare organizations across the country in hosting a free, three-day adoption event at select PetSmart stores Feb. 17-19 during PetSmart Charities National Adoption Weekend. Dozens of PACC dogs and cats will be available for adoption at five Tucson PetSmart locations – and all adoption fees will be waived for qualified, loving families. All pets will go to their new families spayed or neutered, up-to-date on vaccinations, microchipped, and with a free vet visit voucher. A standard $17 licensing fee will apply to all adult dogs. “It’s not too late to find your Valentine,” said Justin Gallick, PACC director of community engagement, adding that PACC hopes to find families for 100 pets during the three-day event. PetSmart Charities awarded PACC a $4,000 grant to underwrite its event, which runs from 10 a.m. to 4 p.m. each day at these locations:
- PetSmart at Oracle & Wetmore (dogs and cats)
- PetSmart at El Con Mall, between Home Depot and Target (dogs and cats)
- PetSmart at Irvington & I-19 (dogs and cats)
- PetSmart at River & Orange Grove (dogs and cats)
- PetSmart at Grant & Swan (cats only)
PACC will also honor the free adoption special at its shelter, 4000 N. Silverbell Rd., all weekend long. The shelter opens from noon to 7 p.m. on Friday and from 10 a.m. to 5 p.m. on Saturday and Sunday.