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 dipped 48.90 points, or 0.3 per cent, to 17,780.83. The Standard & Poor’s 500 index fell 3.45 points, or 0.2 per cent, to 2,085.45. The NASDAQ composite edged down 10.44 points, or 0.2 per cent, to 4,833.32.
Benchmark U.S. crude fell 72 cents, or 1.4 per cent, to $49.13 a barrel in New York. Brent crude, the benchmark for international oil prices, lost 74 cents, or 1.5 per cent, to $49.88 a barrel in London. In other energy trading, wholesale gasoline was little changed at $1.59 a gallon. Heating oil fell 1 cent to $1.50 a gallon. Natural gas lost 9 cents to $2.68 per 1,000 cubic feet.
US homes sell at strongest pace since 2007 -- Americans snapped up houses in May almost as soon as properties were listed, fueling the strongest sales rate in nearly a decade. Sales of existing homes rose 1.8 per cent last month to a seasonally adjusted annual rate of 5.53 million, the highest level since February 2007, the National Association of Realtors said Wednesday. People remain intent on buying homes, despite the low inventory of properties on the market that has caused prices to rise. The elevated demand likely stems from low mortgage rates and a relatively healthy jobs picture with unemployment at 4.7 per cent, even with a recent slowdown in hiring.
How to Invest in Residential Real Estate Without Becoming a Landlord “You have to be courageous to put much of your hard-earned retirement portfolio into the stock market, given that earnings are generally stalling and an interest rate hike cycle is just beginning. Moreover, with most bond funds only paying around a 3% annual return, and the majority of hedge funds performing poorly, it's getting more difficult for investors to find the 5% to 8% return they need to meet their retirement goals. Until a few decades ago, there were few methods of investing in real estate aside from just buying properties yourself or in a partnership. That has changed. Investors can choose from dozens of different real estate-related investments. Investment opportunities in residential real estate, long a second sister to commercial real estate, have also grown, especially in the last few years.” (The Street)
Hyatt CEO: Ignorance of the Hotel Business Was My Most Valuable Asset “In this video by Fortune, ‘Mark Hoplmazian explains how he grew as a leader.’” (Fortune)
Amazon grows fulfillment infrastructure for large items “The latest planned fulfillment center for Amazon.com will have a big impact on operations in the South. The e-tail giant will open a new 600,000-sq.-ft. facility in Braselton, Georgia. When opened, it will create more than 500 new full-time jobs. Amazon currently has more than 1,500 full-time employees at its existing facilities in the state. Employees at the Braselton center will pick, pack and ship large items for customers like household décor items, sporting equipment and gardening tools. ‘We are excited to expand in the state of Georgia and add a new fulfillment center to better serve our customers in the region,’ said Akash Chauhan, VP of Amazon's North America operations. ‘This facility will create hundreds of new jobs with competitive pay and great benefits starting on day one. From the local community to state leadership, we appreciate the tremendous support from elected officials for this project and we look forward to growing in the Peach State.’" (Chain Store Age)
PeerStreet lowers barriers for accredited investors who want access to real estate debt “PeerStreet co-founders, Brew Johnson, Brett Crosby, and Alex Perelman, have been working alongside famed investors like Dr. Michael Burry to provide investors access to real estate debt. Dr. Burry is famous for having been portrayed by Christian Bale in The Big Short. Historically, the only way to get exposure to real estate debt was to either make the loan yourself or invest alongside investors. If a loan was for $250 thousand, it is quite possible that investors were putting all their eggs in one basket. PeerStreet lowers that minimum exposure to $1,000 per loan. The company also does underwriting due diligence on all its loans and visits each property before giving users access to a new investment opportunity.” (Tech Crunch)
Fannie Mae’s new headquarters deemed too fancy for troubled agency “Fannie Mae might need to take its own advice: You shouldn’t buy more home than you can afford. A June 9 inspector general’s report from the Federal Housing Finance Agency (FHFA), which controls operations through conservatorship of both mortgage giants Fannie Mae and Freddie Mac, released a scathing report on Fannie Mae’s FNMA, -4.58% plans for a new headquarters in downtown Washington, D.C., doubting that the plans for the so-called Midtown Center, which include spiral staircases, rooftop decks and three glass-enclosed walkways, ‘are appropriate for an agency in conservatorship.’ In the report, the agency’s inspector general, Laura Wertheimer, told FHFA that the cost to built the new 679,0000 square-foot Fannie Mae headquarters had risen since January of 2015 to $151 million up from $115 million. All told, the 15-year cost of relocation of Fannie Mae’s headquarters , the construction of the new building and the lease now tops $770 million, the OIG said. The OIG took particular aim at the three glass-enclosed bridges at the property, of which Fannie Mae will bear about 70% of the costs to construct, totaling about $15 million, as well as the spiral staircases and rooftop decks.” (MarketWatch)
Circuit City Update: ‘Taking Our Time To Get It Right’ “Six months ago global sourcing exec Ronny Shmoel announced plans to revive the Circuit City brand, which he acquired last year from Systemax. At the time he projected a June opening for a Dallas prototype store, with an e-commerce site to follow. That’s all still in the works Shmoel said in the following statement issued to TWICE; he and top lieutenant Albert Liniado are simply taking more time to get it right: ‘A lot has changed since TWICE first broke the story back in January,’ Shmoel noted. ‘We could have easily leased a location, put some product in and opened the doors for business. Instead, we are taking our time to get this right.’” (Twice)
Small businesses shake up the mix at local malls “When a 4,000-square-foot space opened up at Town Center Corte Madera, an open-air shopping center near San Francisco, Colliers International had a choice. The brokerage firm could seek out another large tenant to fill the space, or divide it into two less-expensive locations that would be friendlier to small businesses. After parsing through sales data and noticing a spurt in small-business revenue, Colliers opted to split the space in two, leasing out one half to a local salad and sandwich joint. Since opening at the center in 2013, that San Francisco-based restaurant's sales per square foot have increased 5 percent annually, to $1,800 a square foot. ‘They're performing far stronger than a restaurant tenant that we have there in 5,000 square feet that's national,’ said Anjee Solanki, national director of USA retail services at Colliers.” (CNBC)
As Expanded Panama Canal Prepares to Open, New York Isn’t Ready “Ports on the U.S. East Coast have been hurrying to prepare their harbors, terminals and roads for the arrival of supersize container ships that are expected to pass through the Panama Canal once its expansion is completed later this month. But the East Coast’s busiest port won't be ready for them. Late last year, the Port Authority of New York and New Jersey announced that a project to raise the Bayonne Bridge, an 83-year-old arch that spans the channel between Bayonne, N.J., and Staten Island, would be delayed until the end of 2017 because of engineering miscalculations and construction work slowed by inclement weather. Until the project is completed, larger ships passing through the Panama Canal will be unable to visit the three largest terminals at the Port of New York and New Jersey, located beyond the bridge in the towns of Newark and Elizabeth, N.J. The delays undermine the economic rationale for the expansion, and raise doubts about whether the wider canal will lead to an immediate surge in cargo headed for the East Coast. New York, with its bustling port and direct access to the densely populated Northeast corridor, was the destination many Asian exporters and shipping lines had in mind when they pushed for a wider canal.” (The Wall Street Journal)
SL Green Lines Up Five Banks for $1.5B One Vanderbilt Loan “SL Green Realty Corp. has lined up Bank of China, Bank of New York Mellon, J.P. Morgan Chase, TD Bank and Wells Fargo to provide a $1.5 billion construction loan for One Vanderbilt—Grand Central Terminal’s soon-to-be neighbor. The consortium of banks will act as co-leads on the deal, multiple sources have told Commercial Observer on the condition of anonymity. While it’s not a done-deal and the loan structure has yet to be finalized, the mortgage is expected to carry a five-year term, one of the sources told CO. The financing is expected to close by the end of summer and there will be a formal groundbreaking in the fall, SL Green has previously stated.” (Commercial Observer)
CIM Group Grabs $191M Chicago Office Asset “CIM Group has expanded its presence in Chicago by 1 million square feet with the acquisition of Four40, the office tower located at 440 LaSalle St. in the city’s business and financial district in the Central Loop area. CIM purchased the property from Tier REIT Inc. in a $191 million transaction. Four40, formerly known as One Financial Center, last changed hands at the height of the market. It was in 2007 when Tier, then Behringer Harvard REIT I Inc., purchased the asset from Beacon Capital for approximately $270 million in a four-property portfolio transaction. But names and price tags aren’t all that have changed; the office destination has undergone a transformation of sorts, courtesy of a recently completed renovation that added a 25,000-square-foot tenant amenity space to the 31-year-old property.” (Commercial Property Executive)