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 fell 58.96 points, or 0.3 percent, to 19,826.77, cutting into the gain it had made since Donald Trump's surprise victory in November. The Standard & Poor's 500 index fell 6.75, or 0.3 percent, to 2,267.89. The Nasdaq composite fell 35.39, or 0.6 percent, to 5,538.73.
Benchmark U.S. crude oil rose 11 cents, or 0.2 percent, to $52.48 per barrel. Brent crude, used to price international oils, fell 39 cents, or 0.7 percent, to $55.47. Natural gas fell a fraction of a penny to $3.412 per 1,000 cubic feet. Wholesale gasoline fell down 1 cent to $1.60 a gallon. Heating oil flat at $1.65 a gallon, and natural gas declined 1 cent to $3.41 per 1,000 cubic feet.
Walmart to add about 10,000 retail jobs & 24,000 construction jobs in the US — Wal-Mart plans to add about 10,000 retail jobs in the U.S. as it opens new stores and expands existing locations. The world's biggest retailer said Tuesday that its plans will also generate about 24,000 construction jobs. The jobs will come from the opening of 59 new, expanded and relocated Walmart and Sam's Club locations as well as e-commerce services that were previously announced. Walmart is opening fewer stores this year, but still adding jobs as it offers more positions in online grocery pickup, trainers for its new academies for hourly workers and construction jobs for remodels.
GM to add or keep 7,000 US jobs, make $1B factory investment -- General Motors plans to invest $1 billion in U.S. factories and add thousands of new white-collar jobs, measures that were announced Tuesday after criticism from President-elect Donald Trump. In all, the Detroit automaker said it will create or keep 7,000 jobs in the next few years, including about 2,000 at factories. Another 5,000 new positions will be created at its auto financing arm and to develop advanced technology, electric and autonomous vehicles and information technology. Trump has demanded the auto industry build more cars in the U.S. GM said these latest actions have been in the works since before the election, although spokesman Patrick Morrissey acknowledged it's a good time to announce new jobs in the U.S.
Deutsche Bank Real Estate Optimism Fueled by Trump “White and his team manage the RREEF Property Trust, a multi-billion dollar, non-listed, publicly registered real estate investment trust (REIT). White is optimistic on commercial rent growth as a result of shrinking supply for retail, warehouse, apartment and office properties. Trump’s infrastructure spending plans and influence on interest rate stabilization may lead to more construction starts. For now, White points out, value is ultimately driven by low levels of supply which are supporting strong rent growth rates.” (Forbes)
Women’s Apparel Retailer Limited Stores Files for Bankruptcy “Limited Stores LLC, parent of U.S. women's apparel chain The Limited, said on Tuesday it filed for bankruptcy, the latest brick-and-mortar retailer to reorganize as shoppers shift to fast-fashion retailers and online competitors. Retailers Aeropostale Inc and Pacific Sunwear of California Inc filed for bankruptcy last year. Limited Stores said it also agreed to a ‘stalking horse’ bid for its intellectual property and some related assets from an affiliate of private equity firm Sycamore Partners.” (Reuters)
Expert: Macy’s May Eventually Close ‘Hundreds’ of Stores “Macy’s Inc. fired the person in charge of in-store growth initiatives last week, prompting one retail expert to predict “hundreds” more store closures could be in the company’s future. ‘We’re in the second inning,’ said Howard Davidowitz, a New York-based retail consultant. ‘The fastest growing area of their business is online. What do you do with all these stores?’ Macy’s did not respond to questions raised by Davidowitz, a former Ernst & Young principal whose firm advises retailers on real estate and growth strategies.” (WCPO Cincinnati)
UnitedHealth looks beyond insurance to help fuel 4Q growth -- The nation's biggest health insurer made most of its money in the fourth quarter by selling things other than health insurance. UnitedHealth Group's Optum division, which manages prescription drug plans, runs doctor practices and analyzes health care data, generated slightly more of a profit than the company's traditional business of selling insurance. Health insurance still brought in most of UnitedHealth's revenue. But analysts who follow the company see more growth potential in Optum and its array of products focused on cutting costs and improving health care, topics more Americans are concerned with as medical costs rise faster than wages and inflation every year.
Overseas Property Investment by Chinese Firms Rises 53 Percent Year-on-Year to $33 Billion in 2016 “Chinese firms invested $33 billion in overseas properties in 2016, marking a 53 percent rise from the previous year, property services and investment management firm Jones Lang Lasalle (JLL) said on Tuesday. The strong rise in overseas property investment has alarmed Chinese authorities and they have stepped up measures to stem capital outflows in the face of a weakening currency. The yuan lost around 6.6 percent against the dollar last year and is now at more than eight-year lows.” (Reuters)
Big Changes to Accompany $400M Infusion in ARC Hospitality “An affiliate of Brookfield Strategic Real Estate Partners II has committed to invest up to $400 million, on a delayed draw basis, in American Realty Capital Hospitality Trust Inc., the latter announced Friday. The Brookfield entity is a real estate private equity fund managed by affiliates of Brookfield Asset Management Inc. As part of the transaction, Brookfield reportedly will be afforded ‘certain corporate governance and approval rights over certain activities’ of ARC Hospitality and its operating partnership, and the REIT’s board will be overhauled.” (Commercial Property Executive)
Marijuana Interest Driving Real Estate Deals “With recreational marijuana use on the verge of becoming legal in Maine, real estate brokers are seeing a jump in demand for industrial spaces that could become indoor marijuana farms in the not-too-distant future. Marijuana is scheduled to become legal to use and possess Jan. 30, but the scramble for suitable warehouse space for commercial growing has begun, helping to push lease rates to nearly twice what they were six years ago in Greater Portland.” (Portland Press Herald)
Property Investing Pitfalls: A No-Fail Plan for First Timers “The biggest mistake people make is to allow their emotions to cloud their judgment and over-capitalise on their purchase rather than negotiating the best price. They get overexcited or attached to a particular house and don’t consider the relevant financial factors. Such feelings can also lead people to avoid doing the proper research to determine whether the property will provide the returns required, i.e. whether it is in the right location to secure the right tenants in the short term and appeal to the owner occupier market, which will sustain the property’s price in the long term.” (NuWire Investor)
Navy Federal Credit Union to Invest $100M in Virginia “Navy Federal Credit Union will invest $100 million to expand its operations center in Winchester, Va., doubling the firm’s employee-count and physical square footage in the area. It’s believed the expansion will result in the addition of approximately 1,400 new jobs in the state. Navy Federal Credit Union is already the world’s largest credit union with more than $79 billion in assets, six million members, 295 branches and a workforce of more than 14,000 employees worldwide. It serves all Department of Defense and Coast Guard Active Duty, civilian, and contractor personnel and their families.” (Commercial Property Executive)
Trump Says Core Part of House GOP Corporate Tax Plan Is ‘Too Complicated’ “President-elect Donald Trump criticized a cornerstone of House Republicans’ corporate-tax plan, which they had pitched as an alternative to his proposed import tariffs, creating another point of contention between the incoming president and congressional allies. The measure, known as border adjustment, would tax imports and exempt exports as part of a broader plan to encourage companies to locate jobs and production in the U.S.” (MarketWatch)
Property Supply Hasn’t Kept Pace with Popularity of Real Estate Funds “Investors are piling money into real-estate funds—but fund managers are finding it a challenge to spend it. Global fund managers had a record $237 billion available to invest in commercial property at the end of last year, according to data firm Preqin, up from $229 billion at the end of 2015 and $136 billion at the end of 2012.” (Wall Street Journal, subscription required)
New prescription: Doctor offices that look like Apple stores — After a relative suffered a heart attack a few years ago, Silicon Valley entrepreneur Adrian Aoun got an unsettling look at a health-care system that he diagnosed as an inefficient and outdated mess. Now he believes he has a remedy. It's called Forward, a health-management service that charges a $149 per month — roughly $1,800 a year — to tend to all of its patients' primary-care needs. And not just with attentive doctoring, either; Forward plans to deploy body scanners, sensors, giant touch-screen monitors, infrared devices and other high-tech gizmos that could make a doctor's appointment feel more like a trip to an Apple store. Forward will still refer patients to outside specialists when its primary-care doctors can't deal with certain health problems; same goes for hospital admissions. And there are bound to be health insurance headaches that Forward isn't attempting to address.