Real Estate Daily News Buzz January 30, 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.
Friday, the Dow Jones industrial average fell 7.13 points, or 0.04 percent, to 20,093.78. The S&P 500 index slid 1.99 points, or 0.1 percent, to 2,294.69. The Nasdaq rose 5.61 points, or 0.1 percent, to 5,660.78.
Benchmark U.S. crude oil fell 61 cents, or 1.1 percent, to close at $53.17 a barrel in New York. Brent crude, used to price international oils, slid 72 cents, or 1.3 percent, to close at $55.52 a barrel in London. In other energy trading, wholesale gasoline dropped 2 cents to $1.53 a gallon, while heating oil fell 2 cents to $1.62 a gallon. Natural gas futures rose 1 cent to $3.39 per 1,000 cubic feet.
US business spending rises for 3rd month, boosting factories — U.S. businesses ramped up their investment in industrial machinery, semiconductors and other big-ticket items last month, boosting demand for factory goods. A measure that tracks business spending plans climbed 0.8 percent in December, after jumping 1.5 percent the previous month, the Commerce Department said Friday. Orders for all durable goods, which are meant to last longer than three years, slipped 0.4 percent, mostly because of a sharp fall in demand for defense aircraft, a volatile category. Excluding transportation-related goods, orders rose 0.5 percent, the sixth straight increase. (AP)
US economic growth slowed in Q4, but there’s hope ahead — The U.S. economy lost momentum in the final three months of 2016 as a downturn in exports temporarily depressed activity. But there were hopeful signs in housing and business investment that the economy will rebound in the coming months. The gross domestic product grew at an annual rate of just 1.9 percent in the October-December period, a slowdown from 3.5 percent growth in the third quarter, the Commerce Department reported Friday. GDP, the broadest measure of economic health, was held back by a swing in trade with exports of soybeans plunging in the fourth quarter after having surged in the third quarter.
UA Program bringing foreign businesses to Tucson — Global Advantage, a program of Tech Parks Arizona, aims to recruit new businesses to the UA Tech Park on South Rita Road by offering an array of product-development and business support. The current Global Advantage program is a retool of a program of the same name launched in 2004, which aimed to attract foreign companies by working with technology business incubators in other countries. In 2014, the UA reworked the program to focus on identifying and recruiting companies that are eager to partner with the UA in six technology areas. Global Advantage took on a couple of clients then, but has since shifted its offices to a tech park building at 9070 S. Rita Road and now has four companies signed up for the program, including one original client. Partners in the effort include Tucson Electric Power Co., industrial fabricator CAID Industries, The Offshore Group, commercial real-estate broker PICOR/Cushman Wakefield and the Arizona Technology Council, which recently moved its Southern Arizona office to the Global Advantage building. The program focuses on six technology areas: advanced energy, including solar and other renewables; aerospace and defense; agriculture, water and arid-lands technology; biosciences, with a focus on medical devices and diagnostics; mining technology; and intelligent transportation systems. Wright says the UA and Tucson have deep expertise in those areas that can help companies perfect their products, with Tech Park space to accommodate collaborative business development. While the program is not limited to foreign firms, he said prospective client companies ideally are interested in demonstrating their products to the North American market and want to access huge markets relatively close to Tucson, including California and Texas as well as Mexico. (Tucson.com)
The University of Arizona has licensed a new tunable laser technology invented in the College of Optical Sciences to startup TPhotonics Inc. While most lasers produce beams of a single or highly limited range of wavelength, the technology allows for devices that can produce a beam and tweak its wavelength on the fly. The invention is a new kind of VECSEL, or vertical external-cavity surface emitting laser, which can generate spectrally tunable light and multiple wavelengths, from the ultraviolet (UV) to the far infrared (IR) regions of the spectrum. The team of inventors includes the UA’s Mahmoud Fallahi, professor of optical sciences; Chris Hessenius, research professor in optical sciences; and Michal Lokowski, a postdoctoral researcher in optical sciences. Fallahi is serving as chief science officer of the company, and Hessenius is the chief executive officer. Tech Launch Arizona, the office of the UA that commercializes inventions stemming from University research, provided services to facilitate the protection of the intellectual property, the license to TPhotonics and the creation of the company — the office’s sixth startup of the 2017 fiscal year. (UA News)
Toshiba to spin off flash memory unit to offset US nuke loss — Toshiba Corp. says it will split its lucrative flash memory business to make up for losses from its troubled U.S. nuclear business, and is looking for a third-party capital injection. The company said its board approved the plan Friday to sell an unspecified stake in its chip operation to make up for losses from its nuclear operations in the U.S. Tokyo-based Toshiba is one of the major Japanese industrial conglomerates whose nuclear sectors have struggled since the 2011 Fukushima disaster. Last year it also said it could book an impairment loss of “several billion dollars” in its U.S. nuclear business. (AP)
Sears Shares Tank on Forecast It’ll Burn Through $1.8 Billion This Year “Sears Holdings’s (SHLD, -3.02%) cash problems are only getting worse, raising the odds the troubled retailer may have to restructure, credit agency Fitch Ratings said in a research note this week, implying the possibility of a bankruptcy filing. The company, which also operates the discount Kmart chain, is likely to burn through $1.8 billion in the fiscal year starting next week, an even bigger cash drain than 2016, Fitch estimates. And to keep up, Sears will have to raise some $2 billion to get through the latest cash squeeze. The company has been selling off assets for years such as its tools brand Craftsman, the Lands’ End apparel brand, some of its best stores, and its stake in Sears Canada, as a long promised turnaround has failed to materialize. The company has lost more than $10 billion since as sales have cratered. During the holiday season, comparable sales at Sears and Kmart fell 12 to 13%, a sharper drop than earlier periods in the years, and Sears Holdings said this month it would close 150 stores. And Fitch warned investors that the company is running out of ways to raise money.” (Fortune)
Canadian icon Tim Hortons is expanding into Mexico — North American free trade might be under threat, but Mexicans will soon import a big taste of Canada. Tim Hortons is expanding into Mexico, making it the company’s first Latin American market. Restaurant Brands International Inc. said Friday it has teamed up with a group of investors in Mexico to form a joint venture and open branches of the coffee, bakery and sandwich chain. (AP)
Economy Watch: US GDP Growth Tepid in Q4 “U.S. GDP in the fourth quarter grew at an annualized rate of 1.9 percent, a drop from the third quarter surge, when the rate came in at 3.5 percent, the Bureau of Economic Analysis reported on Friday. The estimate is the bureau’s first for the quarter, and so it is necessarily preliminary. Usually, but not always, estimates are adjusted somewhat upward in later months. Real GDP increased 1.6 percent for all of 2016, the BEA also reported, compared with an increase of 2.6 percent in 2015. A number of factors were drags on economic growth during the year, including a downturn in private inventory investment (business spending), a deceleration in personal consumption expenditures, a downturn in nonresidential fixed investment—part of which is commercial real estate—and deceleration in residential fixed investment and in state and local government spending.” (MultiHousing News)
Teen retailer Wet Seal closing all its stores “Troubled teen retailer Wet Seal LLC is closing all of its stores after it was unable to nail down fresh capital or a buyer. In a letter dated Jan. 20, the retailer notified employees in its Irvine, Calif., headquarters that the office would be permanently closed and all of the workers would lose their jobs. ‘Unfortunately, the company was unable to obtain the necessary capital or identify a strategic partner, and was recently informed that it will receive no further financing for its operations,’ Vice President and General Counsel Michelle Stocker wrote in the letter, a copy of which The Wall Street Journal reviewed. There are 148 employees in the company’s headquarters, according to a public notice of the layoffs. Wet Seal’s website says the chain has 171 stores in 42 states. Earlier this month, the Journal reported that Wet Seal was exploring its options, including a liquidation, sale or restructuring that could take place in or out of bankruptcy court.” (MarketWatch)
Modern furniture retailer opens largest store to date “Design Within Reach has opened a store in Portland, Ore., in an historic building that dates back to the end of the 19th century. The retailer opened in the city’s North Pearl District, in a circa 1890 two-story brick warehouse that originally served as a distribution center for pottery and housewares. ‘We’re thrilled to be a part of the vibrant, evolving Pearl District and the opportunity to support the preservation of this historic building,’ says DWR president John McPhee. The 26,000-sq.-ft. space replaces the company’s previous location nearby and is its largest showroom in North America. New York-based architectural firm DFA partnered with Portland’s Fieldwork Design and Architecture on the project, which draws inspiration from the landscape of the Pacific Northwest. The wood-slatted ceiling and dark wood floor of the partially enclosed environment reflect the warmth and the spirit of the region.” (Chain Store Age)
NYU plans $500M expansion in Downtown Brooklyn “New York University isn’t just gobbling up space in Greenwich Village. The university plans to spend $500 million on an expansion in Downtown Brooklyn. NYU President Andrew Hamilton said the 10-year plan includes adding 500,000 square feet to the school’s Tandon School of Engineering by renovating the MTA’s former headquarters at 370 Jay Street. That project will nearly double NYU’s 600,000-square-foot footprint in the area. The high tech school, which has more than 5,200 students enrolled, plans to move into the 500,000-square-foot Jay Street building by the fall of 2017. NYU signed a 99-year ground lease for the building in 2012, under an initiative by the Bloomberg administration to boost science, technology, engineering and math (STEM) education.” (The Real Deal)
Serendipity Labs Sets Up Shop in Nashville, Denver “Serendipity Labs Coworking just keeps growing and growing. The members-only, upscale workspace provider has recently secured exclusive development agreements with two new franchise partners, paving the way for the opening of 10 new workplaces in Nashville and Denver. The co-working market is on fire, and it’s not just for startups and freelancers anymore. ‘There is a massive shift away from conventional leases under 5,000 square feet, and upscale co-working, like Serendipity Labs, that can meet enterprise standards, is winning this demand now,’ John Arenas, CEO of Serendipity Labs Coworking, told Commercial Property Executive.” (Commercial Property Executive)
Genting asks FAA to re-approve towers planned for old Miami Herald site “Malaysian gambling giant Genting is in a holding pattern on the bayfront property once owned by the Miami Herald: The company says it won’t sell the land but is still far from being able to build the casino it wants. On Monday, Genting asked the Federal Aviation Administration to re-approve plans to build three 649-foot towers, federal records show. The FAA approved the towers in 2013, but that approval expired Jan. 10. Real estate blog the Next Miami first reported the news. The towers are not expected to rise anytime soon. Art Miami recently said it had struck a deal to set up its tent on the site for the next several years. Genting also wants to build a marina on the property, which it bought for $236 million in 2011.” (Miami Herald)
See Facebook’s $1 billion datacenter campus that’s growing in North Fort Worth “Facebook is still busy building its $1 billion datacenter in North Fort Worth. And the mega social media firm recently increases the size of its property by almost 50 percent in the AllianceTexas development in Tarrant County. Construction started on the 4-phase datacenter development back in mid 2015. The project in North Fort Worth is one of several regional datacenters in the U.S. that Facebook uses to power its huge online social networking site. Originally the company had a 110-acre tract on State Highway 170 near Interstate 35W.” (Dallas Morning News)
South Park’s huge Circa towers will offer rents from $3,000 “Downtown LA’s crane-dotted skyline is a reminder that construction is flourishing. One under-construction complex near the Staples Center, at 12th and Figueroa, will bring two 35-story towers containing 648 luxury rentals to the South Park neighborhood. Formerly known as 1200 Fig but now called Circa, the Harley Ellis Devereaux-designed project includes the two towers, which will sit on a seven-story podium with numerous resident amenities, and 48,000 square feet of ground-floor retail space. The space is expected to house three restaurants and as many as four retail stores. The podiums will feature about 17,000 square feet of digital signs, an increasingly common feature on South Park towers with retail. If that sounds a little like New York’s Times Square, well … “We are creating something that will rival Times Square, change the LA skyline and become a magnet in the downtown area,” said Scott Dobbins, president of Hankey Investment Company. Hankey is one of four ‘investment entities’ that makes up Circa 1200 LLC. Another is prominent corporate landlord, Jamison Services.” (Los Angeles Curbed)