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.
Monday, the Dow Jones industrial average fell 19.04 points, or 0.1 percent, to close at 20,052.42. The S&P 500 index slid 4.86 points, or 0.2 percent, to 2,292.56. The Nasdaq composite index gave up 3.21 points, or 0.1 percent, to 5,663.55.
Benchmark U.S. crude fell 82 cents, or 1.5 percent, to close at $53.01 a barrel in New York. Brent crude, used to price international oils, lost $1.09, or 1.9 percent, to $55.72 a barrel in London. In other energy trading, wholesale gasoline fell 4 cents to $1.51 a gallon, while heating oil slid 3 cents to $1.64 a gallon. Natural gas futures slipped a penny to $3.05 per 1,000 cubic feet.
US stocks close lower, snap S&P 500's 3-day winning streak -- Energy companies led U.S. stocks slightly lower Monday as the price of crude oil declined, snapping a three-day winning streak for the Standard & Poor's 500 index. Investors are continuing to focus on company earnings reports this week as they size up the health of Corporate America.
GEM SHOW Means Big Money for Tucson - The Tucson Gem, Mineral & Fossil Showcase is starting its second and final week. Most shows are free and open to the public. The shows run until Feb. 12, culminating with the Tucson Gem and Mineral Show® opening this Thursday. That event packs the Tucson Convention Center for the final four days of shows, pulling in thousands of treasure hunters from around the world. The latest economic study (2014) from FMR Associates, commissioned by Visit Tucson, indicates the various gem shows account for about $120 million in direct spending for the Tucson region. That’s a 20 percent increase from the $100 million estimate released in 2007 and a 56 percent increase from the $76 million in 2000. If you plan to visit the shows, the City offers a free shuttle from 33 stops. Follow the GemRide link below for a schedule, or download the Official Tucson Gem Show Guide https://bit.ly/1ld0WP8 Gem Ride: https://1.usa.gov/1UDitx9
Tucson Gem and Mineral Show®: https://bit.ly/2kKR1Vw
Arguments being accepted for half-cent sales tax ballot proposition - Pro and con arguments are being accepted for Proposition 101, a proposal to amend the Tucson City Charter to authorize a temporary half-cent sales tax to fund street and public safety improvements. The measure recently was referred by Mayor and Council for a May 16 special election. Written arguments (300 words maximum) should be sent to the City Clerk's Office no later than Feb. 15 at 5 p.m. Formatting requirements can be found at the link below. Arguments will be included in the City of Tucson publicity pamphlet prepared for the election. The pamphlet will be mailed to each household with a qualified elector in the City of Tucson. At the time of filing the argument with the City Clerk, the sponsor shall pay the City of Tucson $240 to offset a portion of the proportionate costs of the paper and printing of the argument. Any proportional balance remaining of the deposit will be returned to the depositor. The City Clerk's Office is located on the 9th floor of City Hall, 255 W. Alameda St. The mailing address is P.O. Box 27210, Tucson, AZ 85726-7210. City Clerk's Office (arguments): https://bit.ly/2kkaSdk
Road Repair Progressing in Tucson - Money from the voter-approved, $100 million, five-year Road Recovery street bond program in 2012 already has improved more than 173 miles of roadway, and the work continues to improve additional streets. The bond money pays for repaving, while the bigger widening projects are funded by the Regional Transportation Authority (RTA), a 20-year program approved by voters in 2006. RTA: https://bit.ly/1kaYAfx
Meet the new Lemurs at Reid Park Zoo - The newest residents at Reid Park Zoo are Elm, Oak, and Linden, a troop of ring-tailed lemurs. Ring-tailed lemurs can live in a wider range of habitats than any other lemur species. They are adapted to live in the coldest, hottest, and driest habitats in Madagascar. That includes the desert, making the ring-tailed lemurs perfectly suited for Tucson. Ring-tailed lemurs are classified as endangered on the International Union for Conservation of Nature Red List, the listing authority for species worldwide. Human interference is contributing to their declining population. You can visit the lemurs at Reid Park Zoo from 9 a.m.-4 p.m. daily. If you can't make it in person, you can observe them on the webcam linked below.Reid Park Zoo Lemur webcam: https://bit.ly/2lc4ZR5
Economy Watch: Wage Increases Slow in December “Are wage increases in the U.S. finally gathering steam? Wages have been a lingering concern since the recession, which put the kibosh on such wage growth as workers saw in the 2000s (not that much compared to the 1990s, however.). Toward the end of 2016, it finally looked like workers were going to enjoy a larger share of the increased worker productivity of the 2010s—but maybe not. According to the Bureau of Labor Statistics’ employment report released on Feb. 3, average hourly earnings for all employees on private payrolls rose by 3 cents to $26 even in January, following a 6-cent increase in December, which was robust growth compared with most months during the year. For the entire year 2016, average hourly earnings rose by 2.5 percent, according the bureau, which is a small amount over inflation. Also on Friday, the Institute for Supply Management reported that its Non-Manufacturing Business Activity Index decreased to 60.3 percent, 0.6 percentage points lower than the December reading of 60.9 percent.” (MultiHousing News)
Bob's Stores parent Eastern Outfitters files for bankruptcy “Eastern Outfitters LLC, the parent of discount chain Bob's Stores and outdoor retailer Eastern Mountain Sports, filed for bankruptcy protection on Sunday, the latest U.S. retailer to do so amid increased competitive pressure facing the sector. British sportswear retailer Sports Direct International Plc (SPD.L) has engaged in extensive talks with Eastern Outfitters to become a stalking-horse bidder in a bankruptcy auction, the Chapter 11 filing showed. Sports Direct could not be immediately reached for comment outside regular business hours. Eastern Outfitters listed assets and liabilities in the range of $100 million to $500 million, according to court documents filed in the U.S. Bankruptcy Court for the District of Delaware. Eastern Outfitters is owned by private equity firm Versa Capital Management LLC, which acquired Bob's and Eastern Mountain Sports through the bankruptcy last year of Vestis Retail Group LLC, the previous owner of the store chains. Versa said at the time that Eastern Outfitters had more than $400 million in annual revenue.” (Reuters)
House flipping is back, with all its opportunities and risks “Flipping is back. The trend of buying a fixer-upper, making some repairs and ‘flipping’ to a new buyer quickly is making a return to real estate markets, years after the trend fell out of fashion with home buyers. More than 6 percent of home sales last year were ‘flips’, according to a new report from Trulia. The real estate data website defines a flip as the selling of a home at least twice within a year. That's the highest number in a decade, before the real estate bubble burst and the financial crisis of 2008. So could the housing market flip out again? "When you see flipping reach ten-year highs, economists like us start to worry a little bit." Trulia's Chief Economist Ralph McLaughlin told CNBC's ‘On the Money’ recently.” (CNBC)
Buyers in Expensive U.S. Housing Markets Wait Longer to Break Even in 2017 “According to the recently released Q4 2016 Zillow Breakeven Horizon report, U.S. home value appreciation is expected to slow in some of the nation's most expensive markets, and as a result, it now takes longer to break even on a home in those markets compared to renting it. Nationally, buying a home becomes a better financial decision than renting it in just under two years. When home values grow quickly, home equity also accumulates faster, helping to offset and eventually recoup the large upfront costs of buying a home more quickly. But home value appreciation is slowing down in some places, especially expensive areas like Silicon Valley and the San Francisco Bay Area. This makes building home equity a slower process, and the Breakeven Horizons in both the San Jose and San Francisco metros are nearly two years and 1.5 years longer, respectively, than they were the year before. No other major metros saw the Breakeven Horizon grow as much in a single year. Home value appreciation isn't slowing everywhere. Home values in the Washington metro, for example, are expected to grow at a faster pace over the next year after staying largely flat recently, leading to a shorter Breakeven Horizon. (World Property Journal)
Two Florida Retail Centers Change Hands for $163M “InvenTrust Properties Corp. has acquired Paraiso Parc and Westfork Plaza, two adjacent retail centers in Pembroke Pines, Fla., for $163 million. When an expansion is finished in mid-2017, the two centers will total nearly 389,000 square feet. ‘The acquisition of Paraiso Parc and Westfork Plaza represents a truly unique opportunity to secure an A+ asset in one of South Florida’s strongest retail submarkets,’ Michael Podboy, InvenTrust’s EVP, chief financial officer & chief investment officer, said in a prepared release. ‘This property represents the type of high-quality properties InvenTrust will continue to invest in as we execute on our portfolio transformation. Additionally, from this transaction, we anticipate operational efficiencies in this key target market for InvenTrust’s existing portfolio.’ Located just 20 miles northwest of downtown Miami and 15 miles southwest of Fort Lauderdale, the two centers feature national tenants such as Publix, Costco, Regal Cinemas, Ross and TJ Maxx.” (Commercial Property Executive)
Football star Emmitt Smith wants Miami to get a haircut — in style “Emmitt Smith isn’t afraid to admit he likes being pampered. The former Dallas Cowboys star is a convert to manicures, pedicures and hot shaves — and he wants you to try them, too. ‘Women do this quite often,” said Smith, a bruising NFL Hall of Fame running back who attended the University of Florida. “Men, we rarely ever take care of ourselves.” Smith and business partner Ben Davis run four luxury barbershops in the Dallas and Kansas City areas called The Gents Place. Now, they’re looking to franchise the operation to Florida. And Miami — especially its booming downtown — is at the top of their list. 'As we know, urban cores are dynamically changing,' said Smith, who got into real estate with an assist from ex-Cowboys gunslinger Roger Staubach. “Some downtowns used to be vacant. Now they are becoming vibrant, 24-hour locations.” The Gents Place isn’t your corner barbershop: A shave and haircut can run upwards of $100, according to a pricing menu. But Smith, who these days sports a crown closely shaven by a straight razor, argues it’s a worthwhile luxury.” (Miami Herald)
Landlords hit with $17K worth of fines during first week of Airbnb enforcement “An Upper West Side landlord and a former Corcoran Group broker were hit with a combined $17,000 worth of fines for allegedly advertising illegal short-term rentals – the first to be penalized under the state’s new law designed to cut back on illegal Airbnb listings. Hank Freid, who manages the Marrakesh Hotel on the Upper West Side, and real estate broker Tatiana Cames were hit with 17 violations to the tune of $1,000 a piece for allegedly listing illegal short-term rentals, the New York Post reported. Freid received 12 violations for listing SROs in the building on several sites such as Booking.com, Expedia, Kayak, Hotwire, Travelocity and Orbitz.” (The Real Deal)
Discovering the Lost Coast of Queens “A wave, of the development kind, finally seems to be forming along the edge of Queens where Astoria meets the East River. Hoping to turn a long-isolated shoreline with panoramic views of Manhattan into a gold coast, developers are at work on a batch of high-end rental complexes that will add pools and saunas, schools and supermarkets along a stretch that currently has barbed wire, warehouses and power plants. Locally focused firms, like AKI Development, which opened its 28-unit Graffiti House in the area in December, are planting flags alongside major builders from elsewhere, like the Durst Organization, which is building a 20-story high-rise with a supermarket that will loom over the Astoria Houses, the sprawling public housing complex that anchors the neighborhood. At the same time, the city is investing in quality-of-life upgrades, including ferry service for the subway-starved neighborhood, which runs from about 36th Avenue to 20th Avenue, west of 21st Street.” (The New York Times)
A High Line Plan Emerges in Newark, N.J. “A former skeptic of the High Line walkway on Manhattan’s West Side is now one of the biggest advocates of a similar project across the Hudson River. Jerry Gottesman, chairman of Edison Properties LLC, a real estate company and parking-lot and self-storage giant, was once a vocal skeptic of efforts to convert the abandoned freight rail line on the West Side into a landscaped promenade. The project attracts more than 7.5 million people a year. Now, Mr. Gottesman is an advocate of a similar elevated promenade in Newark, N.J. A raised pedestrian bridge is one of the signature features of a 22-acre public-private redevelopment project called Mulberry Commons, unveiled by the city of Newark and developers last month. Although the bridge won’t be built on old railroad tracks, like the High Line is, it will connect neighborhoods, creating a pathway linking the city’s Ironbound neighborhood, a former industrial section known for its ethnic mix, restaurants and shops, with Newark Penn Station and a planned 3-acre park surrounded by commercial and residential development in front of the downtown Prudential Center. Edison Properties’ $80 million conversion of a vacant warehouse to retail and loft-style office space will sit in the middle of Mulberry Commons at one end of the raised promenade. The bridge and park will be designed by Sage and Coombe Architects, with the park expected to be completed by late summer in 2018.” (The Wall Street Journal)
Diversification key for mall developers as retail landscape evolves “The difficulties facing traditional retailers are many — and they’re changing the very nature of American shopping malls. Traditional anchors like Sears/Kmart and Macy’s are beset by competition from all sides, from freestanding big-box outlets (think Home Depot and Bed Bath & Beyond), to stores attracting fashion-forward yet price-conscious consumers (Target and Kohl’s) to mounting online competition from Amazon and others. This is leading to the loss of mall tenants, especially anchor tenants, which are major drivers of all-important foot traffic. As a result, American malls stand at a crossroads, with some simply being demolished while others are in various stages of reinvention. Mall owners are (or should be) rethinking the very definition of a mall. New tenants such as high-end restaurants, amusement parks, spas, health clubs, online pickup locations at traditional retailers and upscale movie theaters increasingly are essential components. Whole Foods, the high-end supermarket, recently became a tenant in a Los Angeles mall, and urgent care medical locations and other healthcare providers — which can benefit from low rents while providing medical service closer to people who don’t live near centralized medical campuses — have also taken root in some shopping centers. This is leading to the loss of mall tenants, especially anchor tenants, which are major drivers of all-important foot traffic.” (Retail Dive)