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 Dow Jones industrial average added 2.47 points, or 0.01 per cent, to 17,789.67. The Standard & Poor’s 500 index rose 2.37 points, or 0.1 per cent, to 2,099.33. The NASDAQ composite index gained 4.20 points, or 0.1 per cent, to 4,952.25.
Benchmark U.S. crude oil slipped 9 cents to close at $49.01 a barrel in New York. Brent crude, which is used to price international oils, slid 17 cents to close at $49.72 a barrel in London. In other energy futures trading, natural gas rose 9 cents, or 4.1 per cent, to close at $2.38 per 1,000 cubic feet. Wholesale gasoline was little changed at $1.62 a gallon and heating oil was also flat at $1.50 a gallon.
World economy risks getting caught in ‘low-growth trap’ — The world economy risks getting caught in a “low-growth trap” if governments don’t spend more on investments, open up to trade, and make reforms, a top economic forum warned Wednesday. The Organization for Economic Co-operation and Development said in a wide-ranging report that it is increasingly pessimistic about the global outlook and cut its growth forecasts. Among the risks identified by the Paris-based economic agency, which represents the world’s most developed economies, was a potential British exit from the European Union, volatility in financial markets, and Europe’s inability to find a common response to its refugee flows.
Abercrombie & Fitch expected to benefit from overlap with bankrupt teen retailers “Abercrombie & Fitch’s Hollister brand and Zumiez Inc. have the most overlap with bankrupt teen retailers Aéropostale Inc. and Pacific Sunwear, but that puts the teen retailers in a positive position, analysts say. Analysts at Keybanc Capital Markets analyzed more than 1,400 Aéropostale and Pacific Sunwear locations, comparing them with Hollister, American Eagle Outfitters Inc., Zumiez and Tilly’s Inc. The bank found that Hollister and Zumiez have the most exposure at malls where Aéropostale and Pacific Sunwear stores are located. Aéropostale, which filed for chapter 11 bankruptcy on May 4, expects to close 113 U.S. locations and 41 in Canada. Pacific Sunwear, which filed for bankruptcy in April, has not announced plans for store closures. As of April 2016, the company operated 593 stores.” (MarketWatch)
How VC Funding Is Transforming the Real Estate Industry “The real estate brokerage business is one of America’s last cottage-type industries. In 2015, the Association of Real Estate License Law Officials (ARELLO) estimated the United States had roughly 2 million individual licensees active. These small entrepreneurial businesses control an enormous market share. That said, their independent nature means the industry has yet to consolidate to the level it could. Nor has the home buying process changed much in the last half century. Steps have been made toward automation, and the internet and mobile phone apps have brought conceptual progress. But these measures haven’t been widely implemented yet.” (Observer)
Cadillac opening NYC digs—just don’t try to buy a car “In a trendy part of Manhattan known more for art galleries than car dealerships, Cadillac is taking the next step in its efforts to revitalize its brand image and reach a new audience. On Wednesday, the automaker will open the doors to its new Cadillac House, a space that’s part art gallery, part coffee shop — but no parts dealership. Instead of serving as a hub to sell cars, the ground-floor location in New York City’s SoHo neighborhood is meant to introduce the brand to certain affluent shoppers who may not have have previously had an interest in its cars.” (CNBC)
Build it big and they will come “To confront the reality of e-commerce and continue to attract customers to brick-and-mortar establishments, some developers are building bigger and more extravagant shopping centers than ever before. In addition to having a greater diversity of stores and restaurants, these next-generation malls are relying heavily on entertainment to drive sales. Using amusement parks and fashion shows as well as world-famous architects and celebrity chefs, the top retail developers are now selling an experience with retail present, and not the other way around. ‘The merger of entertainment and retail is critical,’ said Todd Caruso, senior managing director of retail services at global real estate services firm CBRE. ‘It’s no longer an impulse kind of retail experience; it’s a clear destination. If you get the right location it does work.’” (The Real Deal)
Philly Developer Tops Off $90M Luxury Condo “Dranoff Properties celebrated the topping off of One Riverside, a $90 million condominium community in Philadelphia. The Harman Group, a firm specializing in structural engineering, parking planning and design and construction engineering, handled construction on the 82-unit project. ‘Working closely with Dranoff Properties and Cecil Baker, we were able to create a premier luxury condominium building that adheres to the architect and developer’s unique vision,’ Malcolm Bland, The Harman Group’s vice president and principal, said. ‘This is the second successful project that Dranoff Properties and THG have completed, with two other projects in design. It is also one of many successful projects that Cecil Baker + Partners Architects and THG have created, which speaks volumes about our ability to design projects that get built.’ At 22 stories tall, One Riverside is the first ground up luxury high-rise condominium constructed in Philadelphia since the real estate downturn in 2007.’” (MultiHousing News)
Look Inside A Real Estate CEO’s Palatial $40 Million Park Avenue Apartment “David Simon, CEO of Simon Property Group, has listed his full-floor residence at a desirable Upper East Side co-op for $39.5 million with Douglas Elliman. FORBES has exclusive photographs of the apartment’s interior. The decoration of the grand apartment is a far cry from the malls that made Simon wealthy. It takes up the entire 4th floor of 625 Park Avenue, a limestone-clad co-op designed by J.E.R. Carpenter in 1931. It has six bedrooms, seven full bathroom, a full gym, a billiards room, a screening room and a library. Several rooms have fireplaces.” (Forbes)
Coworking-space giant WeWork reaches Philadelphia with big plans for city “Shared-office giant WeWork opens its first Philadelphia location Wednesday, a validation of – and potential threat to – the city’s large existing contingent of collaborative-workspace operators. The 30,000-square-foot, two-story space at the former Schmidt’s brewery building in Northern Liberties’ Piazza development is the first of three shared-office facilities planned in the city by New York-based WeWork. To follow in the fall are a 30,000-square-foot space at 1430 Walnut St. – a glass-walled retail building that also accommodates a Cheesecake Factory restaurant – and a 40,000-square-foot location on the 19th and 20th floors of the Five Penn Center office building at 1601 Market St. ‘We look for cities that have a robust mix of the right elements: a real percolating tech community, an active investment community, strong support from the city,’ said Dave McLaughlin, the company’s eastern U.S. general manager. ‘All those pieces are in place here.’” (Philly.com)
365: A Whole Foods Spinoff for the Millennial Mindset “365 by Whole Foods Market, a more affordable spinoff of the grocer often referred to as Whole Paycheck, opened last week in the groovy Los Angeles neighborhood of Silver Lake. The store, the first of nineteen in development, was designed to appeal if not to actual millennials (whose moms still do most of the shopping) then to those whom one 365 employee described to me as sharing a “millennial mind-set.” On opening day, the guy directing traffic in the extremely crowded parking lot seemed to have it: he was eating a peach with one hand and with the other pointing vaguely in the direction of no open spots. Before the door was a d.j. tent, printed with the phrase “Do Something Delicious Every Day”: low-stakes activism, cozy self-indulgence, a habit for living. A pair of Zuckerberg look-alikes with a wheely bag. A young woman in a pickup truck made twenty years before she was born. Inside: the comforting sight of warehoused, color-banded food under a vaulting hangar-like ceiling.” (The New Yorker)
Property Management: Industry Grows as Commercial Real Estate Rebounds “Nevada’s real estate markets continuing to rebound is great news for commercial property managers, as it translates into more and more work to go around. Property management firms generally have been getting busier over the last one to two years. Avison Young’s team in Las Vegas, for example, now manages 3.4 million square feet for 30 clients. Gaston & Wilkerson Management Group in Reno has grown, too, primarily in managing newly acquired properties for its owners. A sign of the real estate turnaround is the nearly doubling of Nevada’s real estate licensees in the past two years. The number jumped from 24,000 to 40,000, said Joseph (J.D.) Decker, administrator of the Nevada Real Estate Division.” (Nevada Business Journal)
Sapir, Rosen bring in Chinese, Hong Kong investors to partner on Miami project “ASRR Capital Ltd. — the publicly-traded Israeli company led by New York real estate moguls Alex Sapir and Rotem Rosen — has brought in Chinese and Hong Kong investors to partner in redeveloping the Miami Arts & Entertainment District property it purchased earlier this year, The Real Deal has learned. The deal marks the latest major Chinese investment in Miami, as Asian buyers continue to target the area. The Asian investors, CNMB International, a giant construction company based in Beijing, and G-Resources Group, a Hong Kong-based public investment group, will have a 67 percent interest in ASRR’s project, according to an announcement on the Tel Aviv Stock Exchange, where ASRR’s shares are traded. Yi Bao Nelson, the former CEO of Morgan Stanley in China, represents the group, according to the statement on the stock exchange.” (The Real Deal)