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.
The Dow Jones industrial average rose 98.75 points, or 0.5 percent, to 19,954.28. The S&P 500 index added 6.42 points, or 0.3 percent, to 2,275.32. The Nasdaq gained 11.83 points, or 0.2 percent, to 5,563.65.
Benchmark U.S. crude rose $1.43, or 2.8 percent, to close at $52.25 a barrel in New York. Brent crude, which is used to price oil sold internationally, gained $1.46, or 2.7 percent, at $55.10 a barrel in London. In other energy trading, wholesale gasoline added 5 cents to $1.59 a gallon and heating oil rose 4 cents to $1.65 a gallon. Natural gas futures slipped 5 cents to $3.22 per 1,000 cubic feet.
RAYTHEON TO GET CITY TAX CONSIDERATIONS TO ADD NEARLY 2,000 JOBS - The Mayor and Tucson City Council last night voted to give about $6 million in tax considerations to Tucson's largest private employer to expand its workforce. Raytheon Missile Systems is planning to add 1,900 jobs as part of its expansion. The deal calls for the company to spend $400 million for new construction and equipment on City-owned land near Tucson International Airport. The amended agreement extends the time frame of the existing Pre-Annexation Agreement and will tie tax incentives to Raytheon’s completion of the expansion project and creation of the new jobs. Partners in the expansion include the City of Tucson, Pima County, the State of Arizona, Arizona Commerce Authority, Sun Corridor Inc., Tucson Electric Power, and the Tucson Airport Authority. Raytheon has major manufacturing operations at its headquarters next to Tucson International Airport and at the University of Arizona Tech Park on South Rita Road.
JAZZ FESTIVAL RETURNS TO TUCSON - The third annual HSL Properties Tucson Jazz Festival begins tomorrow and runs through Jan. 22. The festival descends on Downtown Tucson for 11 straight days of jazz, featuring performances from local artists and national stars, including George Benson, Dee Dee Bridgewater, Kamasi Washington, Tower of Power, and more. Follow the links below for more information and a schedule of events. HSL Properties Tucson Jazz Festival: https://bit.ly/1BYrQjw
AFNI & ALORICA CALL CENTERS ADDING JOBS - Tucson call center Afni is adding 280 new employees in Tucson. The company will host hiring events at its two locations (7810 E. Escalante Road and 5320 N. La Cholla Blvd.) from 9 a.m.-5 p.m. on Jan. 18. Most of the company’s new hires will be entry-level customer service, customer sales, and web chat employees. Earlier this week, the Alorica call center in Tucson announced it's adding 200 jobs by July.
Retailers Back Chao to Lead Transportation Department – The National Retail Federation supported confirmation of former Labor Secretary Elaine Chao as the new head of the Department of Transportation in a letter sent today to the Senate. “The next secretary of transportation must address ongoing issues of infrastructure funding while ensuring that our transportation systems are truly state-of-the-art and able to handle expected increases in freight flows,” NRF Senior Vice President for Government Relations David French wrote. “Mrs. Chao has an incredible history, knowledge and experience within the transportation industry and we think she is perfectly suited to be the next secretary.” French said Chao “has the background and experience to address some of the key supply chain issues facing our nation and our global competitiveness,” citing her previous posts as deputy secretary of transportation, deputy administrator of the U.S. Maritime Administration and chairwoman of the Federal Maritime Commission. French said the Transportation Department is important to retailers because merchants are among the nation’s largest shippers, moving hundreds of billions of dollars’ worth of merchandise through the nation’s ports, rail lines, and highways each year. The Senate Commerce, Science and Transportation Committee began Chao’s confirmation hearing Wednesday morning.
6 Rules for Value Investors to Buy Real Estate at the Right Price “The first step to achieving success for value investors in private-equity commercial real estate is buying an investment property at the right price. Whether the investment is a multi-family apartment building, an office building or an industrial facility, the true worth of the asset isn't the income stream. Price appreciation is what builds wealth. So how does one achieve price appreciation? For real estate investors, it starts by understanding the difference between price and value. Price is what one pays, while value is what one receives. Buying investment property at too high a price isn't a good value. Instead, it is the surest way to limit potential returns. But commercial real estate can double or triple in value for an investor who can spot hidden growth potential, develop a strategy to unlock that untapped value and execute that plan.” (The Street)
Teen apparel retailer reopens 500-plus stores “Aéropostale, the teen apparel retailer that most of the industry had written off as dead, has risen like a Phoenix. Starting this week, the company is reopening more than 500 doors across the United States. In February, Aéropostale will kick off its spring 2017 marketing campaign, which is designed to showcase the brand’s trans-formation under its new owners. The campaign will be in the stores as well as online and through social media. Aéropostale filed for Chapter 11 bankruptcy protection in May 2016, and it appeared headed for liquidation as the months passed. But in September, a last-minute consortium, led by Authentic Brands Group (ABG), acquired the chain as a going concern for $243.3 million in an auction. (Also included in the consortium: Simon Property Group, General Growth Properties, Gordon Brothers Retail Partners and Hilco Merchant Resources.)” (Chain Store Age)
The real estate industry smells big money in marijuana “Recreational marijuana is legal in California, but there is still no place to buy it, and there will not be until the state works out regulations. That could take a year. In the meantime, local governments are laying out rules on where marijuana can be bought and sold. As you could imagine, these rules are having an impact on the real estate market for commercial marijuana spaces. The general trend is limited supply and high prices. In places like the city of San Jose, local governments have banned the sale of recreational marijuana. Other cities stipulate that marijuana businesses must be a certain distance from schools and community centers. Aaron Herzberg is partner of a Southern California real estate firm called CalCann Holdings. He said the restrictions are making real estate prices skyrocket. Herzberg said now finding any place to sell medical marijuana is hard, let alone one that is affordable. Herzberg said, ‘We own a dispensary in the city of Santa Ana and in order to buy that building we payed close to double market value.’ In other states that have legalized recreational marijuana, real estate analysts have noted widespread impacts, like falling warehouse vacancy rates in Colorado or an uptick in commercial prices in Southern Oregon.” (Marketplace.org)
NAHB Panel Says U.S. Housing Production Will Gradually Uptick in 2017 “According to some of the top U.S. housing economists speaking at the National Association of Home Builders (NAHB) International Builders' Show in Orlando, Florida this week; fueled by a growing economy, solid employment gains and rising household formations, single-family housing production in the U.S. will continue on a gradual, upward trajectory in 2017. ..‘While positive developments on the demand side will support solid growth in the single-family housing sector in 2017, builders in many markets continue to face supply-side constraints led by the three 'Ls' - lots, labor and lending,’ said NAHB Chief Economist Robert Dietz. He added that 64 percent of builders nationwide report low or very-low lot supplies; the rate of unfilled jobs in the construction sector is now higher than the building boom; and that acquisition, development and construction loans for builders--while on the rise--needs to grow faster to meet demand. ‘The industry needs to recruit more workers and get more land in the pipeline, but it will take time,’ Dietz said. However, these supply-side challenges are more than offset by continued economic growth, ongoing job creation, rising wages and favorable demographics. Moreover, builder confidence is up on anticipation that the incoming Trump administration will help to lower regulatory costs going forward.” (World Property Journal)
Economy Watch: Report Details Sino-American Economic Ties “On Tuesday, the US-China Business Council released a report done for the organization by Oxford Economics, ‘Understanding the US-China Trade Relationship.’ Timely reading, considering that the incoming administration’s plans for China are still unknown. The report begins with the scope of the relationship, noting that the U.S.-China trade relationship of today “supports roughly 2.6 million jobs in the United States across a range of industries… as the Chinese middle class continues its rapid expansion over the next decade.” It added that the number of Chinese middle-class consumers will actually exceed the entire U.S. population by 2026, which provides U.S. companies with significant opportunities to reach a “new and lucrative customer base that can further boost employment and economic growth.” Other data included in the report was that China purchased $165 billion in goods and services from the United States in 2015, representing 7.3 percent of all U.S. exports and about 1 percent of total U.S. economic output.” (MultiHousing News)
245 Park Ave. poised to sell for over $2B “The first trophy office building of the year has come to market and could sell for in excess of $2 billion. That jumbo price tag would chalk up to more than $1,100 per square foot for each of 245 Park Ave.’s 1.8 million square feet. Last fall, the Real Deal reported the 45-story, 1967-era building was being put up for sale by Brookfield Property Partners and its 49-percent stakeholder, the New York State Teachers’ Retirement System. We’ve now learned that investment brokers Darcy Stacom and Bill Shanahan of CBRE launched the marketing earlier this month. Tenants include Societe Generale, Rabobank, Angelo Gordon, Ares Capital and Major League Baseball, which will be moving to 1271 Sixth Ave. in a few years.” (New York Post)
$1B Master-Planned Development Moves Forward in Dallas Metro “Construction on a $1 billion mixed-use, master-planned development featuring the first Crystal Lagoon in Texas will begin in March. It will take two years to complete the 262-acre Bayside project along Lake Ray Hubbard in Rowlett, Texas, about 15 miles from downtown Dallas. Lifescapes International, a Newport Beach, Calif.-based landscape architectural firm, has been tapped by Bayside Land Partners LLC, comprising Kent Donahue and Wilks Development, to design the overall landscape environment for Bayside. The master-planned community will feature 1.5 million square feet of commercial space, including 3,000 residential units, a 1,000-slip marina and 700 hotel rooms. There will be about 300,000 square feet of entertainment and dining space and 800,000 square feet of mixed-use office and retail space. Lifescapes, which has extensive experience in designing mixed-use and resort destinations including the Bellagio Resort in Las Vegas and The Grove in Los Angeles, will be creating the landscaping for the perimeter of the man-made lagoon that will be filled with clear, turquoise water and the 300-foot long fountain that will have laser-projected video mist screens along with water features.” (Commercial Property Executive)
E-commerce poised for big year in Denver commercial real estate “Mark your calendar: 2017 will be the year of e-commerce for Denver’s industrial real estate market, a CBRE broker said Tuesday. After years of rumors but little measurable activity — Amazon’s 452,400-square-foot Aurora sorting facility aside — e-commerce will have a much bigger impact on the local market this year, said Jim Bolt, executive vice president of CBRE Industrial & Logistics in Denver. ‘What we’ll see is bigger buildings announced for e-commerce users than we’ve ever seen in Denver before,’ Bolt said. Those buildings could fall in the neighborhood of 1 million square feet — more than twice the size of Amazon’s first brick-and-mortar presence in Colorado. ‘All these e-commerce companies are the same — they all have goals to be able to deliver very quickly to everyone in the United States,’ Bolt said. ‘You can’t deliver on a timely basis to the Rocky Mountain region unless you’re in Denver.’” (Denver Post)
Ford Is Creating More Auto Jobs. Does That Make The Detroit Area A Good Real Estate Bet? “Ford has been making headlines over plans to bring car manufacturing back to the Detroit area, announcing at the 2017 Detroit auto show this week that the Bronco and Ranger are coming back to the U.S. in 2019 and will be built in Wayne, Michigan. This came on the heels of the automaker’s statement last week that it was investing $700 million in its manufacturing plant in Flat Rock, Michigan, where it will add 700 jobs. In addition, Italian-American automaker Fiat Chrysler announced ahead of the auto show that it would invest $1 billion in plants in Michigan and Ohio, adding a total of 2,000 new U.S. jobs. This news has implications beyond the auto industry, extending to commercial real estate.” (Forbes)
Omni, four other big landlords accused of tenant discrimination “Former Mets slugger Mo Vaughn is one of five landlords charged by the city’s Human Rights Commission with discriminating against tenants on federal assistance programs. According to the commission, River Park Residences in the Bronx is one of the buildings allegedly refusing to rent on tenants who use Section 8 vouchers and similar public assistance. The Mitchell Lama complex is run by Omni New York, the real estate firm co-founded by Vaughn and Eugene Schneur. The commission also charged the Parkchester South Condominiums in the Bronx, as well as real estate firms Goldfarb Properties, Martini Properties and ABECO Management. The firms jointly control 20,000 units in the city according to a statement released by the commission.” (The Real Deal)