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 climbed 235.31 points, or 1.3 per cent, to 17,929.99. The Standard & Poor’s 500 gained 28.09 points, or 1.4 per cent, to 2,098.86. The Nasdaq composite added 63.43 points, or 1.3 per cent, to 4,842.67.
Benchmark U.S. crude fell $1.55, or 3.1 per cent, to close at $48.33 a barrel in New York. Brent crude, used to price international oils, slid 93 cents, or 1.8 per cent, to close at $49.68 a barrel in London. Wholesale gasoline fell 2 cents to $1.50 a gallon, while heating oil shed 5 cents to $1.48 a gallon. Natural gas rose 6 cents to $2.92 per 1,000 cubic feet.
Average US 30-year mortgage falls to 3.48 per cent — Long-term U.S. mortgage rates slid to new lows for the year this week amid market upheaval stoked by Britain’s vote to leave the European Union. Rates are at three-year lows at the height of the spring home buying season. Mortgage buyer Freddie Mac said Thursday the average 30-year fixed-rate mortgage fell to 3.48 per cent from 3.56 per cent last week. The benchmark rate is down sharply from 4.08 per cent a year ago, and close to its all-time low of 3.31 per cent in November 2012. The average for the 15-year fixed-rate mortgage declined to 2.78 per cent from 2.83 per cent last week.
7 Reasons Now is a Great Time to Invest in Real Estate “You work hard for your money, but does your money work hard for you? When you store your cash under your mattress (or in a bank if you aren't a weirdo), it will produce next to nothing. However, when you put money into an investment, your dollars go to work for you. Yes, real estate is subject to timing; and there are times when real estate is not the wisest investment. However, I believe that right now might be the greatest time to buy real estate that we'll see for another decade or longer.” (Entrepreneur)
Real Estate Industry Emerging as Foe of GOP Tax Plan “Real estate is the industry most critical of the House GOP tax reform plan in the early going. Tax reform involves a big bet: That all the businesses, families and groups that benefit from specific tax breaks would be willing to trade those breaks for lower rates and simpler taxes. House Republicans' tax reform proposal recommends setting a top individual tax rate of 33 percent, and a business tax rate of 20 percent. But the trade-off is that the vast majority of existing deductions, credits and exclusions would be eliminated.” (Washington Examiner)
Hines REIT Approves $1.7 Billion Asset Liquidation Plan “Hines Real Estate Investment Trust Inc., one of three public non-listed REITs sponsored by Hines, approved a plan for liquidation and dissolution of the company. The plan, which is subject to stockholder approval, takes advantage of the current strong demand for high-quality assets by institutional buyers, and includes Hines REIT entering into a definitive agreement to sell seven West Coast office assets in a cash transaction for $1.162 billion to an affiliate of Blackstone Real Estate Partners VIII.” (CoStar News)
Cornerstone Real Estate to Buy Ares’ Commercial Lending Unit “Cornerstone Real Estate Advisers, an asset manager owned by Massachusetts Mutual Life Insurance Co., agreed to buy ACRE Capital Holdings LLC in a bet on multifamily loans. Cornerstone agreed to pay $93 million to purchase the Plano, Texas-based lender from Ares Commercial Real Estate Corp., the buyer said Wednesday in a statement. The deal will double Cornerstone’s multifamily loan portfolio to $10 billion and is expected to be completed as soon as next quarter, according to the statement.” (Bloomberg)
Today’s Renters Really Are Worse off Than Their Parents “It’s not just your imagination. It is a lot harder to afford an apartment today than it was for your parents’ generation. Sharp increases in rents along with stagnant incomes over the past five years have helped create a dire situation for many of the country’s renters. A new report shows how those trends have actually been playing out for more than five decades. Inflation-adjusted rents have risen by 64% since 1960, but real household incomes only increased by 18% during that same time period, according to an analysis of U.S. Census data.” (Wall Street Journal)
America’s Richest Real Estate Family Doesn’t Want You to Know Who They Are “Once New York’s biggest landlord, Sol Goldman’s legacy lives on. You can see it in the city’s skyline (particularly over on Madison Avenue between 37th and 84th streets, large parts of which his heirs still own). Or go downtown to the courtroom and dig through thousands of pages of legal documents detailing the bitter battle between his wife, Lillian, and their four children over Sol’s estate after his 1987 death.” (Forbes)
Where to Invest Now? How About Multifamily Real Estate? “With all that's going on in the world from Brexit to Zika, U.S. investors may want to consider keeping their money at home in multi-family real estate projects. But not necessarily in publicly traded real estate investment trusts. ‘Buying real estate is better done on a direct basis,’ said Eric Jones, chief investment officer of Dome Equities. ‘Public REITs are too correlated to the public market and interest rates in particular.’” (The Street)
Related Seals Deal for $6.5B Cali Project “A $6.5 billion, 9.7 million-square-foot mixed-use development proposed by Related Cos.—the largest private project in California’s Silicon Valley history—has received unanimous approval from the Santa Clara City Council after three years of planning. The megaproject is expected to earn LEED certification and be constructed in multiple phases spaced out over 30 years, with some of the later phases—including office campuses—built to market demands.” (Commercial Property Executive)
2 Brooklyn Blocks to Become 1-Million-Square-Foot Development “ODA New York is remaking the Bushwick neighborhood of Brooklyn—two blocks of it, at least. The New York–based architecture firm, along with local developer All Year Management, has begun work on its largest project to date on the former site of Brooklyn’s Rheingold Brewery. The Bushwick II will be built over two city blocks and will bring 1 million square feet of apartment units, retail, and community park space to the neighborhood.” (Multifamily Executive)
Cereal Giant Opening Café in Heart of Manhattan “Kellogg’s is in a New York state of mind. Times Square to be more specific. On July 4, Kellogg's will open Kellogg's NYC, its first-ever permanent café, at 1600 Broadway. The café will serve dishes featuring Kellogg's cereals available with an array of unique ingredients, including pistachios, lemon zest, thyme, and green tea powder to name a few. Customers can also customize their dishes by choosing from dozens of toppings. Also on the menu: ice cream topped with various cereals.” (Chain Store Age)
Self-driving car driver killed in Florida collision, a first — The first U.S. self-driving car fatality took place in May when the driver of a Tesla S sports car using the vehicle’s “autopilot” automated driving system died in a collision with a truck in Florida, federal officials said Thursday. The government is investigating the design and performance of Tesla’s system. Preliminary reports indicate the crash occurred when a tractor-trailer rig made a left turn in front of the Tesla. Tesla said “extremely rare circumstances” led to the collision and said the accident led to the first known death in over 130 million miles of autopilot operation.