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.
Wednesday, the Standard & Poor’s 500 index slipped 1.11 points, or less than 0.1 percent, to 2,411.80. The Dow Jones industrial average gave up 20.82 points, or 0.1 percent, to 21,008.65. The Nasdaq composite declined 4.67 points, or 0.1 percent, to 6,198.52.
Benchmark U.S. crude lost $1.34, or 2.7 percent, to $48.32 a barrel in New York. Brent crude, the standard for international oil prices, fell $1.53, or 3 percent, to $50.31 a barrel in London. In other energy trading, wholesale gasoline lost 3 cents to $1.61 a gallon. Heating oil gave up 3 cents to $1.52 a gallon. Natural gas dropped 7 cents to $3.07 per 1,000 cubic feet.
US stocks slide further as banks and energy companies sink — US stocks fall as banks weaken after executives say their trading businesses are having a rough quarter. Energy companies skid along with oil prices. Drugmakers and utilities finish higher.
CVS Eyes Downtown Tucson location – Downtown’s historic Chicago Music Store may become the location of a new CVS pharmacy, pending corporate approval. Building owners yesterday made a presentation to the Rio Nuevo Multipurpose Facilities District board regarding the property. “It’s a real sign of urban life when a drugstore makes that kind of commitment,” said Rio Nuevo Chairman Fletcher McCusker. The building was constructed in 1903 for the Los Angeles Furniture Store and housed a JC Penney before becoming home to Chicago Music Store in 1976. The Chicago Music store moved to their current location at 45 S. Sixth Ave. in spring 2016 after Marcel Dabdoub and Ron Schwabe, bought the 21,000-square-foot building last year for redevelopment.
Kellogg shutters distribution centers, lays off workers — Kellogg is closing distribution centers around the nation, laying off more than 1,000 workers. The company is following through on a prior decision to shift to a warehouse system. It has been cutting costs as sales decline amid changing consumer trends.
Multifamily Developer Confidence Dips to Lowest Levels Since 2011 in U.S. “According to the National Association of Home Builders latest Multifamily Production Index released this past week, the MPI index dropped seven points to 48 in the first quarter of 2017. The MPI has not had a reading of under 50 since the fourth quarter of 2011. The MPI measures builder and developer sentiment about current conditions in the apartment and condominium market on a scale of 0 to 100. The index and all of its components are scaled so that a number above 50 indicates that more respondents report conditions are improving than report conditions are getting worse. The MPI provides a composite measure of three key elements of the multifamily housing market: construction of low-rent units, market-rate rental units and “for-sale” units, or condominiums. All three components decreased in the first quarter: low-rent units dropped six points to 48, market-rate rental units dipped three points to 55 and for-sale units fell nine points to 43.” (World Property Journal)
Blackstone surpasses Brookfield as world’s biggest real estate manager “Blackstone is once again the world’s largest real estate manager after overtaking Brookfield Property Partners last year. Blackstone’s real estate assets grew 6 percent in 2016 to $160 billion, the Financial Times reported. Brookfield slipped to the second spot with $158 billion in assets, an increase of 2.6 percent. PGIM, the investment arm of Prudential, took the third-place spot with $130 billion, and TH Real Estate, the property arm of Chicago-based asset manager Nuveen Investments, was the fourth-largest with $103 billion in assets.” (The Real Deal)
Michael Kors slumps on weak forecast; to shut over 100 stores “Michael Kors Holdings Ltd (KORS.N) gave a bleak full-year forecast and said it would shut more than 100 full-price retail stores in the next two years as the upmarket fashion retailer struggles to turn around its brand. Shares of the company, which also swung to a fourth-quarter loss, slumped more than 10 percent to $32.69, their lowest in more than five years…Comparable-store sales fell 14.1 percent in the quarter, below analysts’ estimate of 13.4 percent, according to research firm Consensus Metrix.” (Reuters)
Ori Systems brings the robotic furniture of the future to apartments today “The Jetsons’ fictional (and functional) home of the future is one step closer to reality with the launch of the first product from Ori Systems, an all-in-one robotic dresser, desk and bed product. Showrooming in luxury real estate developments all over the country, Ori is debuting its new, modular, and gorgeous-looking furniture that enables city-dwellers to do more with less space (I want one. Now.) The product of research from MIT’s famous Media Lab, Ori launched in 2015 as a way to spin out research being conducted by MIT professor Kent Larson and graduate student Hasier Larrea. Collaborating with the rockstar designer Yves Béhar, and building off of research that Larrea and Larson had worked on for four years, Ori’s combined bed/storage/workspace units were designed to met the needs of folks who are trying to do more in increasingly cramped urban spaces.” (TechCrunch)
This Is What Will Happen To All The Empty Stores You’re Seeing “Retail real estate doesn’t vanish if you don’t use it, so what will happen to all those empty stores? No one knows for sure but there are some things we’re seeing now that are important indicators of where all that retail space will go. One of the inevitabilities of retail real estate now is that it will be less valuable in the future than it was in the past. You don’t need a crystal ball to see that there’s more supply than demand of retail square feet. Basic economics says when that happens the price goes down. Landlords are not acting quickly to recognize that, they are not acknowledging that their asset is less valuable, they are not lowering the price of their space fast enough to generate new leases and soak up what’s coming on the market. They are letting the space sit on the market while their thinking adjusts.” (Forbes)
Is e-commerce a frenemy of retail real estate? “These days everyone is trumpeting retail’s downturn, with each earnings call, retail conference and panel seeming to ending in the same rueful refrain. Recently, billionaire investor-slash-oracle Warren Buffett shared his perspective on the retail landscape: “The department store is online now.”…While the facts — including bankruptcies and rampant store closings — can’t be disputed, many retail real estate experts are more optimistic than one might expect. Brick-and-mortar stores aren’t going anywhere, they say, but brands need to integrate their physical and online presence. It’s not enough to do just one side well. Others see the re-imagining of older, obsolete shopping centers as a plus for consumers, or note the significant uptick in warehouse deals.” (The Real Deal Los Angeles)
Daikin Brings Cool $417M Campus to Houston “Daikin Industries Ltd., one of the largest heating, ventilating and air conditioning manufacturers in the world, has completed its $417 million state-of-the-art business campus on 500 acres outside Houston, where it is expected to eventually employ about 4,000 people. Daikin Texas Technology Park in Waller County, about 40 miles from Houston, features a 4.2 million-square-foot building, the largest tilt-wall structure in the world and the second largest manufacturing facility in North America. The 90-year-old Japanese company began construction in March 2015. The plant will support the design, engineering and assembly of a wide variety of heating and cooling products for residential and commercial use that carry the Daikin, Goodman and Amana brand names.” (Commercial Property Executive)
SF Development Bags $66M in Construction Financing “The developers of The Rise Market Street, an apartment project at 1699 Market St. in San Francisco, have obtained $66.5 million in construction financing. The loan was provided by Square Mile Capital. The developers are Rescore Property Corp., a private REIT based in Boca Raton, Fla., and its San Francisco-based local partner Presidio Development Partners LLC. The financing was arranged by Kevin O’Grady, Daniel Sheehan and Eric McGlynn, all managing directors in Walker & Dunlop’s Miami-based Capital Markets Group. The nine-story, 160-unit project is in the Upper-Market/Hayes Valley neighborhood of San Francisco, a market that exhibits above-average employment rates, sustained rent growth and high occupancy. O’Grady calls it “a diversified and thriving neighborhood.’” (MultiHousing News)
First look at downtown Dallas’ landmark Statler Hotel rooms “The first guests won’t check into downtown Dallas’ Statler Hotel until late summer or early fall. But a sneak peek inside the downtown Dallas landmark shows that the grand hotel is getting closer to an opening. Construction has been underway for almost two years on the 19-story Commerce Street hotel which sat vacant for more than a decade. The first apartment tenants have already moved into rental units on the upper floors of the high-rise….Farmers Branch-based developer Centurion American Development is doing the $175 million redevelopment of the Statler. Dallas-based Merriman Anderson Architects designed the renovations.” (Dallas News)
Facing threats from landlords, immigrants push for tenant protections “Concord resident Marta Gonzalez, an immigrant from Mexico, said her troubles with her building manager started last summer. After a series of rent increases that drove up monthly rates by $200 to $300 every time a lease ended, Gonzalez, a member of the nonprofit Alliance of Californians for Community Empowerment, and other residents in the complex began to organize an effort to stabilize the rents there. Not longer after, Gonzalez said, her children and others at the complex who play outside started receiving threats from the building manager that she would call immigration enforcement officers to the complex. After being threatened with eviction, Gonzalez and her family had to fork over an extra deposit to be able to stay in the apartment, which now costs them $3,000 a month.” (Miami Herald)