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. stock indexes held steady Thursday after the price of oil took at least a temporary break from its sharp slide. Energy stocks fell again, but not by nearly as much as earlier in the week, after crude rose for the first time in four days. Big gains for health care stocks also helped to offset losses for financial companies and other areas of the market, leaving indexes close to flat.
On Thursday, the Standard & Poor's 500 index edged down by 1.11 points, or less than 0.1 percent, to 2,434.50. The Dow Jones industrial average dipped 12.74, or 0.1 percent, to 21,397.29. The Nasdaq composite rose 2.73 points, or less than 0.1 percent, to 6,236.69. The Russell 2000 index of smaller company stocks rose 5.28, or 0.4 percent, to 1,404.54.
For the week, the S&P 500 is up 1.35 points, or 0.1 percent. The Dow is up 13.01 points, or 0.1 percent. The Nasdaq is up 84.93 points, or 1.4 percent. The Russell 2000 is down 2.19 points, or 0.2 percent.
For the year, the S&P 500 is up 195.67 points, or 8.7 percent. The Dow is up 1,634.69 points, or 8.3 percent. The Nasdaq is up 853.57 points, or 15.9 percent. The Russell 2000 is up 47.41 points, or 3.5 percent.
**City of Tucson Tax Rate Increase--effective July 1, 2017** As a result of the City of Tucson Special Election held on May 16, 2017, most city sales and use tax rates will increase effective July 1, 2017. This link to flyer lists the affected business activities and also identifies the business activities for which the tax rate did not increase. This will be in effect for the next 5 years. Click here for flyer: Tax_Rate_Increase_Flyer_070117
Special Note Regarding Construction Contracting and the Upcoming Tax Rate Increase - For the purposes of City of Tucson Regulation 19-415.3 (Construction contracting; tax rate effective date), the City has chosen to establish the tax rate effective date (July 1, 2017) as the "enactment date". Contracts executed prior to July 1, 2017, will be subject to the current city tax rate of 2.0%, while contracts executed on or after July 1, 2017 will be subject to the new city tax rate of 2.5%. Regardless of when a contract is executed, if change orders are executed on or after July 1, 2017, they will be subject to the new city tax rate of 2.5%.
Qatar Issue May Affect China’s Soft Power as Biggest Property Buyer “China's soft power as the world's biggest property buyer is under severe strain due to a government crackdown on capital flight and the Qatar controversy, which is expected to drive a lot of Arab money into the property market in western countries. Qatar citizens are desperately looking for alternative investment avenues as Saudi Arabia and the United Arab Emirates recently cut off relations with their country, and issued orders making it difficult for them to hold property in different Arab countries, property sellers said.” (Voice of America)
What You’ll Pay for Rent in America’s Fastest-Growing Cities “The U.S. Census' list of fastest-growing cities by percentage released last month comprised primarily suburbs in high-growth metro areas. The mass of people flocking to these cities will be happy to know that in most cases, the average apartment rent falls in line with that of the market in which they are located.” (Forbes)
Sears Canada to Close 59 Stores, to Cut 2,900 Jobs “Ailing Sears Canada Inc. on Thursday got court protection from its creditors so it can close 59 stores – including 20 large department stores – and let go about 2,900 of its 17,000 employees to continue operating and possibly sell the business. Toronto-based Sears said it is closing 20 of its 94 department stores, plus 15 of its home stores, 10 outlet stores and 14 Hometown locations. Insolvent Sears Canada Group operates 225 stores in all under the Sears and Corbeil banners. It got protection from Ontario Superior Court under the Companies’ Creditors and Arrangement Act.” (The Globe and Mail)
President Trump Using Trump Hotel to Hold Trump Re-Election Fundraiser “President. Candidate. Businessman. Three of President Donald Trump's roles converge next week as he holds his first re-election fundraiser at his hotel in Washington. Trump can see the Trump International Hotel from the White House lawn, making it a premier and convenient location for the June 28 major-donor event, his campaign director Michael Glassner said. But the choice also raises ethics questions, according to conflict of interest attorneys who have been critical of Trump's decision not to cut financial ties with his global business empire.” (Fortune)
CT Realty to Develop $300M Industrial Park in Atlanta “CT Realty’s industrial growth spurt has hit metropolitan Atlanta. Acting through its affiliate, Port Logistics Realty, the real estate company paved the way for the development of the 3.5 million-square-foot Palmetto Logistics Park with the acquisition of 213 acres of land and an option on an adjacent 145 acres. Upon full completion, the three-building industrial project in Fulton County will be valued at $300 million. Joining CT Realty in the development of Palmetto are Prudential Global Investment Management and River Oaks Capital Partners. The joint venture partners believe location will be one of the keys to the project’s success.” (Commercial Property Executive)
Sycamore Partners Reportedly Near Deal to Acquire Staples, Report Says “Private equity firm Sycamore Partners is in advanced talks to acquire Staples following an auction for the U.S. office supplies retailer, people familiar with the matter said on Wednesday, in a deal that could top $6 billion. The acquisition would come a year after a U.S. federal judge thwarted a merger between Staples and peer Office Depot on antitrust grounds. It would represent a bet by Sycamore that Staples could more quickly shift its business model from serving consumers to catering to companies if it were to go private.” (Fortune)
Amazon Wardrobe Is Another Blow to Department Stores “Amazon.com Inc. isn’t letting a $14 billion deal to buy Whole Foods Inc. distract from its efforts in fashion. With the introduction of Amazon Wardrobe, experts say the e-commerce giant is delivering yet another blow to the already-ailing department store sector. Department stores are already suffering from a number of headwinds, including declines in mall traffic and the need for massive store closures.” (MarketWatch)
Why Public Markets Aren’t the Best Way to Invest in Real Estate “What if I told you the value of your investment portfolio had dropped by 50% overnight? How would you react? Probably with a mix of confusion, anger and even a total loss of confidence in the stock market. While most investors might assume this scenario is highly unlikely, the truth is that the average investor is subjected to this sort of value slashing every day without even realizing it. To understand how such a dramatic occurrence could go largely unnoticed, look no further than the seemingly familiar event of a company “IPOing” on the public market.” (Forbes)
Skittish Israeli Investors Respond to Drop in Extell Bond Price “Gary Barnett is back to calming nervous Israeli investors over his company’s bonds trading on the Tel Aviv Stock Exchange. Since May, when his firm Extell Development released its first-quarter financial reports, the price on the two rounds of Extell bonds have decreased between 5 and 7 percent, and are now trading at 13 percent yields. That’s an improvement over last year’s high of 16 percent, but too high for comfort for some investors.” (The Real Deal)
HTI to Buy Sibling’s Portfolio for $120M “In an all-cash transaction valued at about $120 million, Healthcare Trust Inc. (HTI) will be acquiring substantially all of the assets of American Realty Capital Healthcare Trust III Inc. (HT III), the two New York–based companies announced Monday. Both companies are sponsored by AR Global, also of New York, and both are externally managed by the same management team. The ARC HT III portfolio comprises 19 properties totaling 467,932 square feet, of which 17 are medical office buildings with an average occupancy of 97.1 percent.” (Commercial Property Executive)