Real Estate Daily News Buzz February 24, 2017
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.
A.F. Sterling Homes Announces Grand Opening at Stone House in Sahuarita, Arizona — The public is invited to celebrate the grand opening of A.F. Sterling Homes at Stone House in the Town of Sahuarita, Arizona on Saturday, March 4 and Sunday, March 5 from 11 AM to 4 PM. Visitors are welcome to tour a fully decorated custom model home. Light refreshments, free gifts and prize drawings will be available. Stone House is located at 2022 E. Old Stone House Trail. For more information please call (520) 625-6366 or visit afsterling.com. Buyers can select from six single-story, three and four bedroom luxury home plans ranging from 2,346 to 3,541 square feet on half-acre to two-acre homesites. Prices range from $357,900 to $472,900. Sitting adjacent to 50,000 acres of state land, residents will enjoy scenic views of the Santa Rita Mountains and lush desert walking trails that are a part of the gated community. Diamond Ventures Inc. is the developer.
Arizona House Committee Approves Funding for Jan 8 Memorial – The Arizona House Appropriations Committee voted Wednesday to provide $2.5 million over five years to help build a permanent memorial in Downtown Tucson to honor the victims of the Jan. 8, 2011 shootings that left six dead and 13 others injured, including then-Congresswoman Gabrielle Giffords. The bill, sponsored by Arizona State Representative Todd Clodfelter of Tucson and others, stipulates that the funds appropriated by the State must be matched with private donations. The unanimous vote of the committee sends HB 2436 to the full Arizona House.
Meerkats arrive at Reid Park Zoo – Reid Park Zoo’s newest residents are a group of meerkats, known as a “mob.” The Zoo decided to build the new exhibit for the highly social, small animals in response to public requests. A visitor survey in 2014 named meerkats as one of the animals guests would most like to see at Tucson’s Zoo. Meerkats are a small carnivore related to the mongoose. They’re native to southern Africa’s Kalahari Desert. Being desert dwellers, meerkats have several adaptations that help them thrive in this climate, including long claws, dark eye patches, and an advanced sense of smell. The meerkat habitat includes two artificial termite mounds, African décor, a night house, sand, and vegetation. If you can’t make it to the Zoo to see the meerkats, follow the Facebook link below to see video of them in their new habitat. Facebook video of meerkats: https://bit.ly/2mcqoKI
Tucson City Council sends homeless sleeping ordinance proposal to a commitee – A possible overnight sleeping ordinance discussed by the Mayor and Tucson City Council yesterday is now in the hands of the Homeless/Houseless Work Group led by Ward 5 Council Member Richard Fimbres. The council directed the group to conduct further study on the pilot plan. The original proposal, brought by Council Member Karin Uhlich, would allow religious, nonprofit, and business entities to host up to four vehicles or microhousing structures on their properties for people needing overnight shelter. The program would not involve any City funding.
Tucson Roadrunners return home this weekend – The AHL’s Tucson Roadrunners return to the Tucson Arena Friday and Saturday to face off against the San Jose Barracuda. The puck drops at 7:05 each night. Hot dogs, popcorn, and sodas are $1 each on Saturday only. There are just 10 home games left this inaugural season.
UA Eller College Expanding in downtown Phoenix — Ten years after the University of Arizona Eller College of Management entered the Phoenix market to offer an evening Master of Business Administration (MBA) program, the top-ranked business school is expanding its presence in downtown Phoenix with more opportunities for Valley organizations and professionals. The increased presence of the Eller College in Phoenix aligns with its strategic directions: Entrepreneurship and Innovation, Digital Business Transformation and Healthcare.
Mnuchin says Treasury studying 50- and 100-year bonds “The Treasury is studying the possibility of issuing 50- and 100-year bonds, taking advantage of current low interest rates and potentially turning the 30-year long bond into a relative youngster. The idea was raised by Treasury Secretary Steven Mnuchin in an interview Thursday on CNBC, echoing an earlier comment he made when newly nominated by President Donald Trump. Traders say the idea would be to help the government’s future debt payments by securing current low interest rates. ‘I think it’s something we should seriously look at. I’ve already begun to talk to the staff about looking at that. We’ll reach out to the market, investors, different people, but I think it’s something that is a very serious issue of whether we should explore whether we can raise 50- or 100-year money at a very slight premium. That’s something that makes sense for Treasury to look at,’ said Mnuchin.” (CNBC)
A Global Real Estate Powerhouse “The Real Estate Sector represents nearly 4% of the equity market capitalization of the S&P 1500. Equity REITs make up about 98% of the equity market capitalization of the sector, and real estate management and brokerage companies make up the remainder…On August 31, 2016, S&P Dow Jones Indices and MSCI moved stock exchange-listed Equity REITs and other listed real estate companies from the Financials Sector of its Global Industry Classification Standard (or GICS) to a new Real Estate Sector. GICS is the industry classification methodology that both companies rely on for their proprietary stock market indices, and it serves as one of the primary classification systems for equities for investors around the world. The Real Estate Sector is the first new headline sector added since GICS was created in 1999. The change reflected the growth in size and importance of real estate, primarily Equity REITs, in the economy. Over the past 25 years, the total equity market capitalization of listed U.S. Equity REITs has grown from $9 billion to more than $1 trillion.” (Seeking Alpha)
How many big US real estate deals have Chinese insurers made this year? None “China’s insurance giants have hit the brakes on their $100 billion buying spree following a regulatory squeeze on speculation and new limits on outbound capital. Insurers like Anbang Insurance Group, Ping An Insurance and China Life Insurance – some of the most active buyers last year – haven’t made any acquisitions so far this year, Bloomberg reported. Chinese investment has been behind some of the biggest New York City real estate deals in recent years, including Anbang’s notable purchase of the Waldorf-Astoria in 2015 for $1.95 billion. But the clampdown hasn’t just affected real estate. Chinese insurers have not made any purchases in other markets such Internet and software companies, traditional energy and finance.” (The Real Deal)
TJX is planning a new chain that could deliver another blow to department stores “Off-price retailer TJX has been stealing apparel sales from department stores for several years. Now, it has another category in its crosshairs: home decor. The parent company of T.J. Maxx and Marshalls told investors on Wednesday that it will open a new line of home goods stores this year. The concept will be complementary to its existing chain of HomeGoods shops that sells pillows, lamps and accents. On a call with analysts outlining its fiscal fourth-quarter earnings report, TJX CEO Ernie Herrman said the company will open four U.S. stores under its new nameplate this year. Though Herrman was mum on additional details — including the name of the forthcoming chain — he said the strategy is to encourage customers to shop at both these new stores and its existing HomeGoods locations. That strategy is similar to the approach it’s taken with T.J. Maxx and Marshalls.” (CNBC)
Home Depot: Cramer’s Top Takeaways “In his “No-Huddle Offense” segment, Cramer expounded on the many things going right at Home Depot (HD), which saw a 7.1% boost in same-store sales this quarter, as well as announcing a stock buyback program. The company saw broad growth in all categories in all regions of the country and continues to take appliance marketshare from the ailing Sears Holdings (SHLD). But beyond increased employment, Home Depot management saw the strength in housing as a driving factor, as well as little impact from the Federal Reserve getting ready to raise interest rates.That gives the company a long runway of growth ahead, Cramer said. And let’s not forget: Home Depot doesn’t sell apparel or fashion items and is often not located at the mall.” (The Street)
Toyota puts its 2M SF headquarters campus on the market “Toyota Motor North America Inc. has put its Los Angeles-area headquarters campus — which spans 2 million square feet on 110 acres in Torrance and Los Angeles — on the market, as part of its relocation to Plano. The Japanese automaker recently hired JLL to market the California campus. With the campus sitting near the airport and two major ports, JLL Managing Director Jeff Adkison said he expects to see significant interest from buyers attracted by proximity to the Ports of Long Beach and Los Angeles, as well as a high-educated workforce and a desirable southern California lifestyle. Adkison, along with JLL’s Brendan McArthur are leading the JLL team in marketing the campus, which sits about 10 miles from the Los Angeles International Airport. Nearly three years ago, Toyota announced it would relocate the company’s North American headquarters to Plano, which would bring its manufacturing, financial services, sales and marketing and corporate operations under one roof. The relocation is expected to happen this year, with Toyota executives saying the campus is on schedule for a mid-year delivery. In all, the relocation is expected to exceed $1 billion. To date, Toyota has spent more than $5 billion in the California campus, which housed the automaker for five decades.” (Dallas Business Journal)
U.S. Crackdown on Money Laundering in Luxury Real Estate Set to End “Federal regulations meant to catch illicit money flooding into luxury real estate are set to expire on Thursday, leaving the future of the so-far successful initiative in limbo. The federal government launched the program a year ago in two municipalities—Manhattan and Miami-Dade County, luxury real estate hubs where all-cash buyers of multimillion-dollar homes commonly hide their identities behind obscure limited liability companies, known as “shell companies.” But the pilot program ends this week, and the federal government has given no indication of whether it will be continued, replaced or scrapped despite comments from top officials in the past about its effectiveness.” (Mansion Global)
Tristar Capital Lands $232M in Financing for Sunnyvale Campus “Natixis has provided an approximately $232.5 million five-year, fixed-rate loan to Tristar Capital for the acquisition of Crossroads III, an office property in Sunnyvale, Calif. The financing was arranged by Richard Horowitz of Cooper-Horowitz in New York. According to a Tristar Capital press release, the properties were acquired from Rockwood Capital for a price tag of $290.7 million. The three, three-story freestanding office buildings are located at 410, 420 and 430 N. Mary Ave., and offer a total net rentable area of 349,758 square feet. Originally built between 1990 and 1992, the properties are situated on a 14.82-acre site and are 100 percent net leased to Apple Inc.” (Commercial Property Executive)
Willis Tower upgrades set the table for National Restaurant Association lease “The National Restaurant Association has leased almost 51,000 square feet of office space in Willis Tower, whose owner recently unveiled plans for a $500 million redevelopment of the city’s tallest building. The restaurant business group signed a long-term lease for the 50,852-square-foot 36th floor, where it plans to move in December, according to landlord Equity Office. Equity Office is a Chicago-based unit of private-equity giant Blackstone Group. New York-based Blackstone in 2015 bought the 110-story former Sears Tower for $1.3 billion, a record price in Chicago.” (Crain’s Chicago Business)
Retailers Ask Supreme Court Not to Revive Disputed Credit Card Swipe Fee Settlement –The National Retail Federation and the Retail Industry Leaders Association today asked the U.S. Supreme Court to let stand an appeals court ruling that struck down a controversial 2012 settlement of a class action lawsuit over Visa and MasterCard’s credit card swipe fees. The 2nd U.S. Circuit Court of Appeals last year struck down a $7.25 billion antitrust settlement approved by U.S. District Court Judge John Gleeson in a 2005 lawsuit brought by a small group of retailers and trade associations claiming to represent the retail industry. Gleeson approved the settlement even though NRF and others argued that it failed to reform the price-fixing system under which Visa and MasterCard set fees for credit cards issued by thousands of banks. Rather than lower the fees, the card companies proposed in the settlement that they be passed along to consumers as a surcharge. Major retailers rejected the surcharge proposal, saying it was the opposite of what they sought, while small retailers would have seen as little as a few hundred dollars each. Retailers who rejected the monetary settlement would have still been bound by other restrictions the court would not let them opt out of, including a prohibition on future lawsuits over the fees. NRF in 2014 asked the 2nd Circuit to overturn the settlement, saying a broad cross section of the retail industry ranging from independent Main Street stores to national chains opposed the deal. The appeals court ruled in NRF’s favor last year, saying that merchants “were inadequately represented” in the case. That ruling, however, has been appealed to the Supreme Court by some of the original plaintiffs. “The settlement itself achieved nothing important for merchants that accept credit cards, which is why every prominent group that represents merchants has opposed it,” NRF and RILA said in a joint brief filed today with the Supreme Court. “This deal is a bad one, unworthy of resuscitation.”