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.
U.S. stocks climbed Friday after the government said hiring grew at a stronger pace in June. Technology and consumer-focused companies led the way as investors were glad to see a positive sign for the economy.
On Friday, the Standard & Poor's 500 index surged 15.43 points, or 0.6 percent, to 2,425.18. The Dow Jones industrial average climbed 94.30 points, or 0.4 percent, to 21,414.34. The Nasdaq composite jumped 63.61 points, or 1 percent, to 6,153.08. The Russell 2000 index of smaller-company stocks advanced 15.02 points, or 1.1 percent, to 1,415.84.
For the week, the S&P 500 edged up 1.77 points, or 0.1 percent. The Dow gained 64.71 points, or 0.3 percent. The Nasdaq rose 12.66 points, or 0.2 percent. The Russell 2000 added 0.48 points.
For the year, the S&P 500 is up 186.35 points, or 8.3 percent. The Dow is up 1,651.74 points, or 8.4 percent. The Nasdaq is up 769.96 points, or 14.3 percent. The Russell 2000 is up 58.71 points, or 4.3 percent.
Walmart is building giant self-service kiosks in its stores that retrieve customers' online orders -The first kiosk appeared in a Walmart store in Bentonville, Arkansas, last year. The company is now rolling them out to more than a dozen stores in cities including Gilbert, Arizona; Glenpool, Oklahoma; Enterprise and Auburn, Alabama; Gwinnett County, Georgia; and Midlothian, Virginia. The kiosks, which Walmart calls Pickup Towers, are massive — standing at least 16 feet tall and about 8 feet wide — and are typically near store entrances.
Hilton Sees Room for Growth with New Low-Price Brand “At first glance, the new hotel chain on track to be the fastest-growing in the U.S. resembles a boutique brand that might be found in a trendy, urban location. But Hilton Worldwide Holdings Inc.’s new midprice brand, Tru, is pricing rooms at around $100 a night or less and is largely aimed at less flashy locales.” (Wall Street Journal, subscription required)
Bon Ton Stores, Sears, J.Crew Lead List of Retailers with High Risk of Default “Default rates for U.S. retailers are poised to climb in the near-term and department store chains and specialty retailers are most at risk. There are currently nine retailers with a credit risk estimate (CRE)--a measure of an issuer’s one-year forward default probability -- that was above 5% at the end of June, according to research firm CreditSights. That’s based on the firm’s BondScore default risk model, which covers 34 of the 58 U.S. high-yield retailers that are included in the Bank of America Merrill Lynch US High Yield Index.” (MarketWatch)
A Surprising Way to Increase Property Values: Build Affordable Housing “Despite the lawsuits, media spotlight and conventional wisdom, affordable housing developments built in poor, heavily black communities can lead to greater racial and income integration, according to new research by Stanford economists. Such housing, funded by federal tax credits, also raises property values and lowers crime in surrounding neighborhoods as higher-income white residents move in, the researchers found.” (Washington Post)
Chinese Investment in U.S. Real Estate Could Fall Dramatically in 2017: Report “Chinese investment in overseas real estate could drop by as much as 20 percent in 2017 amid tighter capital controls and a slowing economy, according to a new report by property search portal Juwai. Outbound real estate investment by Chinese firms and individuals reached a record $101.4 billion in 2016, but Juwai expects it to fall to around $80 billion in 2017.” (The Real Deal)
California Senate OKs Real Estate Fee to Fund More Housing “The California state Senate approved a new fee Thursday on real estate transaction documents to generate hundreds of millions of dollars for affordable housing. The legislation would impose a $75 fee on documents such as deeds and notices, with a cap of $225 per transaction. It's expected to generate between $200 and $300 million annually for affordable housing projects. It passed 27-12 with all Democratic votes and now heads to the Assembly.” (Associated Press)
Friedman Secures Buyer for Detroit Office Building “Friedman Integrated Real Estate Solutions closed on another office deal in Michigan—an 85,539-square-foot building located at 440 E. Congress St., in Detroit’s CBD. The owner, Broder & Sachse Real Estate Services, sold the property to 311 Associates. Peter Jankowski, vice president with Friedman, brokered the transaction. The mid-rise building sits on the corner of Congress and Beaubien Streets, right across from Saint Andrews Hall. Built in 1925, it went through two major renovations in 1990 and 2014, when the main lobby and tenant common areas were upgraded.” (Commercial Property Executive)
Physical Retail: Definitely Different, Far from Dead “it is crystal clear that years of overbuilding, failure to innovate on the part of most traditional retailers, shifting customer preferences and market-share grabs from transformative new models that aren't held to a traditional profit standard (mostly the little outfit in Seattle) are creating fundamentally new dynamics. Physical retail is not going away, but digital disruption is transforming most sectors of retail profoundly. Here are a few important things to bear in mind.” (Forbes)
Extell Bondholders Could Face Early Repayment on Barnett’s Bonds “Israeli investors in Gary Barnett’s Extell Development could demand early repayment of the company’s Series A bonds, sources told The Real Deal. About 40 private and institutional bondholders met Thursday in Israel to discuss concerns about Barnett’s ability to meet his payments on the bonds, the first of which is a $180 million payout in December 2018. In late May, bondholders grew anxious after a first-quarter report showed flaccid results, and bond yields rose to 14 percent.” (The Real Deal)
CRE Opinion: Need Current Income? PE Real Estate Might Be the Answer “Unlike some other asset classes that help diversify a portfolio, real estate is backed by something tangible. We can see and touch an office building, apartment building, or self-storage facility, while many other investments represent nothing more than a belief in a piece of paper. As a hard asset, real estate can also act as a volatility hedge in ways other investments can’t. Barring a catastrophic event, property will survive even if currency or traditional investments lose much of their value.” (D Magazine)