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 Standard & Poor's 500 index lost 3.32 points, or 0.1 percent, to 2,472.10 and closed a week packed with corporate earnings reports almost exactly where it started. It set a record during the middle of it. The Dow Jones industrial average gained 33.76 points, or 0.2 percent, to 21,830.31 and set another all-time high. The Nasdaq composite fell 7.51, or 0.1 percent, to 6,374.68.
Benchmark U.S. crude rose 67 cents to settle at $49.71 per barrel and touched its highest level since May. Brent crude, the international standard, gained $1.03 to $53.53 a barrel Friday. Natural gas fell 3 cents to $2.94 per 1,000 cubic feet. Heating oil rose 4 cents to $1.64 per gallon, and wholesale gasoline gained 3 cents to $1.68 per gallon.
Stocks sag following disappointing profit reports — Stock markets around the world sagged on Friday after Amazon and several other big companies reported quarterly results that underwhelmed investors. Tobacco stocks were some of the worst performers after the U.S. government said it may consider limiting the amount of nicotine in cigarettes. Treasury yields dipped after the government said the U.S. economy accelerated in the spring but also revised down its growth for the first quarter.
US economy expanded at stronger 2.6 percent rate in Q2 — The U.S. economy revved up this spring after a weak start to the year, fueled by strong consumer spending. But the growth spurt still fell short of the optimistic goals President Donald Trump hopes to achieve through tax cuts and regulatory relief.
Higher prices, fewer options lurk after health bill collapse -- Soaring prices and fewer choices may greet customers when they return to the Affordable Care Act's insurance marketplaces this fall because insurers still don't know whether they will receive critical payments from the federal government. Some Republican proposals would have continued those payments, but the latest push fell apart early Friday. Without the subsidies, estimated at $7 billion a year, insurers would either charge much more for coverage, or decide not to offer coverage at all.
Wells Fargo in another scandal, this time in auto lending — Scandal-plagued Wells Fargo is back in hot water for signing customers up for products they didn't need or want. This time it's auto insurance, and the bank says it may have cost about 20,000 people their cars. The San Francisco-based bank says it enrolled roughly 570,000 auto loan borrowers for what's known as collateral production insurance on their vehicles when they already had appropriate insurance. It will pay $80 million in refunds.
Mainstream Model 3 holds promise — and peril — for Tesla — For Tesla, everything is riding on the Model 3. The electric car company's newest vehicle is set to go to its first 30 customers Friday evening. Its $35,000 starting price — half the cost of Tesla's previous models — and 215-mile range could bring hundreds of thousands of customers into the automaker's fold. Or the Model 3 could dash Tesla's dreams. Among potential pitfalls, customers could lose faith if Tesla doesn't meet its aggressive production schedule.
Nordstrom Family Offers Preferential Terms to Clinch Buyout Partner, Sources Say “The group of Nordstrom Inc. family members seeking to take the eponymous U.S. department store operator private is offering preferential terms to potential equity partners willing to fund the buyout, people familiar with the matter said. The Nordstrom family's decision to offer these concessions underscores the apprehension of investors over leveraged buyouts of department store chains, as private equity-owned peer Neiman Marcus Group Inc now struggles with its debt pile.” (Reuters)
L.A. Commercial Property Sales Decline, but Total Surpasses Slumping Manhattan “High-priced trades of hotels, shopping centers and industrial properties helped launch L.A. County to an estimated $12.6 billion in sales, according to a study released Thursday by property data provider Real Capital Analytics. That total was down 11% from the first half of 2016, but property sales in Manhattan, last year’s leader, fell much more — 55% to $10.6 billion as big investors such as pension and sovereign wealth funds grew more wary of pulling the trigger, said analyst Jim Costello of New York-based Real Capital Analytics.” (Los Angeles Times)
Smaller Housing Markets Lure Individual Investors “While publicly traded companies like American Homes 4 Rent and Colony Starwood Homes are major players in this market, most single-family rental properties are owned by small-time investors, like Mr. Bahr. In 2015, 85 percent of the 17.5 million single-family rental properties in the United States were owned by investors with portfolios of 10 properties or fewer, with 45 percent of those houses owned by investors with only one property, according to the Housing Finance Policy Center at the Urban Institute, a research institution.” (The New York Times)
Retail’s New Normal: Three Trends Stores Must Embrace to Win “You need only look at Wall Street's reaction to the nearly $14 billion acquisition of Whole Foods – or the multitude of headlines about brick-and-mortar locations doubling as distribution hubs – to see that a new normal is on the horizon for the retail industry. Retail consumers today are adapting to new shopping norms that include more choices, co-browsing (in-store while shopping on a mobile device) and higher expectations. So what are today's retail leaders doing to ensure future success?” (Forbes)
Starbucks Tempers Expectations, Says It’s Closing All of its Teavana Stores “Starbucks Corp on Thursday reported quarterly profit that matched analysts' estimates, but tempered expectations for the current quarter amid softness in the U.S. retail and restaurant industries, and said it would close all 379 of its Teavana stores. The company's shares rose slightly in late trade to $59.60. The results landed just hours after Starbucks announced plans to buy the remaining 50 percent share of its East China business from its joint venture partners for about $1.3 billion, in its biggest ever acquisition.” (Reuters)
Off-Price Retailers Are Losing Their Steam “The once red-hot off-price operations of upscale department stores have cooled considerably. Over the past several months, Neiman Marcus has closed three of its Last Call off-price stores — and this week the Dallas chain said it would be ‘assessing’ the Last Call portfolio ‘to ensure we have the right mix of brick- and-mortar and online stores.’ At Neiman rival Nordstrom, which has been aggressively doubling down on Nordstrom Rack, its off-price stores, performance has been ebbing.” (New York Post)
Kroger-Anchored Shopping Center Trades in Dallas “Located at 10675-10677 East Northeast Highway, close to Interstate 635, the shopping center sits on nearly 15.5 acres. Combined, traffic from Northwest Highway and Plano Road totals 52,000 cars per day. More than 120,000 residents with an average annual household income of $78,000 live within three miles of Northview Plaza, . The shopping center features multiple national and local retailers and restaurants, including Petco, Allstate Insurance and McDonald’s.” (Commercial Property Executive)
Steadfast’s Star III Acquires Another Denver-Area Community “Steadfast Apartment REIT III, or STAR III, has acquired its sixth apartment community. The latest property, Belmar Villas, is a 318-unit, garden-style apartment development located in the Denver suburb of Lakewood, Colo., and was purchased for $63.3 million. STAR III is sponsored by Steadfast REIT Investments, an affiliate of Orange County, Calif.–based Steadfast Cos. Belmar Villas includes 17 three-story buildings with one-, two-, and three-bedroom apartments that average 856 square feet. In-place rents average $1,318 per month, and the community is currently 93% occupied.” (Multifamily Executive)
Why REITs Still Deserve a Place in Your Portfolio “So far, it hasn't been a very good year for real estate investment trusts (REITs). However, this isn't to say these stocks have performed badly as a whole. So far this year, the Dow Jones Equity REIT Total Return Index is up about 3.8%. Even though it's less than the return of the market -- the S&P 500 index is up more than 13% over the same period -- these aren't the numbers to really complain about. Especially in the context of this market environment. As we move a little more than six months into the year, the U.S. Federal Reserve has already hiked interest rates twice -- something that many had anticipated would trigger a REIT sell-off.” (Nasdaq)
Marriott Unveils New $600M HQ, Flagship Hotel “The hotel giant announced two years ago it was looking to move from its 10400 Fernwood Road campus in suburban Bethesda, where it had been since 1978, to a more urban and transit-friendly location. The new site is a short walk to the Bethesda Metro station. JLL worked with Marriott on the search and six months ago Marriott signed a letter of intent with the Bernstein and Boston Properties joint venture to develop its global headquarters on the site at the corner of Wisconsin and Norfolk avenues.” (Commercial Property Executive)