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.
Thursday, the Dow Jones industrial average lost 6.03 points, or less than 0.1 percent, to 19,884.91. The Standard & Poor's 500 index rose 1.30 points, or 0.1 percent, to 2,280.85 and the Nasdaq composite fell 6.45 points, or 0.1 percent, to 5,636.20.
Benchmark U.S. crude fell 34 cents to close at $53.54 a barrel on the New York Mercantile Exchange. Heating oil lost 2 cents to $1.65 a gallon and wholesale gasoline fell 5 cents to $1.53 a gallon. Natural gas rose 2 cents to $3.19 per thousand cubic feet.
Average US 30-year mortgage rate unchanged at 4.19 percent — Long-term US mortgage rates barely budged this week, after marking their first increase of the year last week. Mortgage buyer Freddie Mac says the rate on 30-year fixed-rate loans was unchanged from last week at an average 4.19 percent. That was still sharply higher than a 30-year rate that averaged 3.65 percent for all of 2016, the lowest level recorded from records going back to 1971. The average for a 15-year mortgage ticked up to 3.41 percent from 3.40 percent last week.
Amazon increasingly wants to be its own deliveryman — Amazon increasingly looks like it wants to be its own deliveryman. Its announcement of a new air cargo hub in Kentucky is merely its latest foray into building out its shipping and logistics unit. If successful, the move ultimately means lower costs for Amazon — but could eventually pit the company against package deliverers like FedEx and UPS. Amazon said Thursday the number of items it sold in the fourth quarter rose 24 percent compared with a year ago. Its revenue rose 22 percent to $43.74 billion, slightly missing analyst expectations.
Fed Sees ‘Improved’ Sentiment, but No Interest Rate Hike “The Federal Reserve held the line on interest rates at its meeting this week, though it did give a nod to growing optimism among the business community and consumers. As widely expected, the Federal Open Market Committee — the central bank's policy making arm — kept its benchmark overnight lending rate target at a range of 0.5 percent to 0.75 percent. In December, the Fed raised the target a quarter point, or 25 basis points, marking just the second hike in more than 10 years.” (CNBC)
For Some in the Middle Class, Net Worth Slumps a Staggering 43% “From 1983 to 2007, wealth in the United States tripled from $24 trillion to $73 trillion, adjusted for inflation, and the level of inequality stayed about the same. But the Great Recession brought a decline in wealth and an increase in inequality. Between 2007 and 2010, wealth declined from $73 trillion to $62 trillion, and then rose slightly to $65 trillion in 2013. While all income classes saw lower levels of wealth, middle-income Americans were hit the hardest, mostly because of declines in home ownership and the value of their homes.” (MarketWatch)
Blackstone Takes Its Single-Family Rental Bet Public as Sector Soars “A home on Casaba Ave. in Canoga Park that Invitation Homes recently bought, fixed up and turned into a rental property. Investors are seeing green in single-family rentals, and one of the biggest players in the space is reaping rewards. Invitation Homes, a Dallas-based single-family rental real estate investment trust and a behemoth in its class, raised $1.54 billion in an initial public offering Tuesday. It priced 77 million shares at $20 each, well within its previously stated range of $18 and $21. The stock opened slightly higher Wednesday.” (CNBC)
Investors Fret as Ryan Says Tax Reform Will Be Delayed Until Spring “Congress will tackle healthcare first, tax reform second, said one of the men leading the charge on both fronts, Speaker of the House Paul Ryan. The Wisconsin Republican said in an appearance on Fox News' ‘Fox & Friends’ on Thursday morning that GOP lawmakers will focus on repealing and replacing the Affordable Care Act as their first legislative priority and then move on to tackling tax reform in the spring. He said the decision is largely a matter of timing and budget law.” (The Street)
Amazon Is Building a Massive Air Cargo Hub in Kentucky “Amazon plans to invest $1.49 billion to build a large air cargo hub in northern Kentucky, stoking expectations it may one day opt to directly compete with FedEx and United Parcel Service. The world’s biggest online retailer has agreed to a 50-year lease for about 900 acres of property from Cincinnati/Northern Kentucky International Airport, state officials said Tuesday — close in size to the global hubs of top cargo airlines.” (New York Post)
Are We Entering the Golden Age of Infrastructure? “Investors and the public have been waiting for years for the U.S. to fix its ailing infrastructure. Now, with Donald Trump’s lofty infrastructure spending plan, it may actually happen. However, there are still issues that have to be worked out including creating the right framework, getting Americans to pay for it, coordinating government entities, and turning to the private sector for investment, asset managers said during a round table discussion sponsored by Legg Mason.” (WealthManagement.com)
Financing Still Strong for Quality Retail Projects “In the era of e-commerce, the retail industry is transforming and adjusting to the new ways consumers prefer to shop. But despite these changes, the sector as a whole is still experiencing moderate growth, and the trend is expected to continue in 2017 and beyond. The retail properties most likely to survive and be successful in 2017 are those with high-quality retailers and amenities, and their owners are constantly adapting them to keep up with the times.” (Commercial Property Executive)
Macy’s Sale Rumored as Long-Time CEO Steps Down “Terry Lundgren’s final weeks as chief executive of Macy’s are anything but peaceful. The veteran retail boss, who is stepping down as CEO later in the quarter, is trying to avoid an ugly board shakeup that could tarnish his 13-year legacy and turn the largest US department store into a battleground littered with discarded top brass, The Post has learned. Lundgren, who had not planned to cap his tenure with a sale, has recently become open to offers from potential friendly buyers as a proactive measure to head off any attempt to mess with the board.” (New York Post)
Equity Residential: NYC Rental Market Is Weakening “Equity Residential’s outlook on its New York rental market continues to look gloomy, with the real estate company on Wednesday bemoaning falling rents and rising concessions in the Big Apple. While most other markets in the country, especially Los Angeles, are strong, the real estate investment trust expects its revenues in New York to fall by 1.8 percentage points in 2017. Same-store profits had fallen by 3.1 percent in 2016. The culprit: growing supply thanks to new construction, and mediocre growth in high-paying jobs.” (The Real Deal)
Downtown Washington Office Changes Hands for $75M “The Meridian Group recently announced that it has acquired an eight-story, 132,372-square-foot office building in the central business district of Washington. 1901 L Street NW was bought off market from New York Life for $75 million. Meridian plans major renovations, including three new floors, a new lobby, a new façade, new HVAC and elevator systems as well as an exclusive tenant-only indoor-outdoor penthouse space, fitness center and a conference center. Fox Architects will lead the revamp, and upon completion, the size of the asset will increase to 206,000 square feet.” (Commercial Property Executive)