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.
Stocks ticked higher as energy companies clawed back some of their sharp losses from earlier in the week. After getting off to a slow start, the Standard & Poor's 500 index finished with a modest gain Friday, leaving it slightly higher for the week. Energy companies benefited from a second day of gains in oil prices. EQT jumped 8 percent, the biggest gain in the S&P 500. Health care and technology stocks had the biggest gains of the week. Energy companies trimmed their weekly loss to 2.9 percent. Bed Bath & Beyond plunged 12 percent after reporting weak earnings. The S&P 500 added 3 points, or 0.2 percent, to 2,438. The Dow Jones industrial average slipped 2 points to 21,394. The Nasdaq gained 28 points, or 0.5 percent, to 6,265.
Sales of new homes rebounded in May, helped by strong sales gains in the South and West -- Sales of new single-family homes rose 2.9 percent last month to a seasonally adjusted annual rate of 610,000, the Commerce Department reported Friday. That followed a 7.9 percent drop in sales in April which was the biggest monthly decline in eight months. Sales gains of 6.2 percent in the South and 13.3 percent in the West overcame big declines of 25.7 percent in the Midwest and 10.8 percent in the Northeast. The Midwest drop was the largest in that region in nearly three years. The median price of a home sold last month rose to a record $345,800, up 16.8 percent from a year ago. Prices have been increasing as demand has outstripped supply, in part because of a shortage of available building lots.The rebound in May sales had been expected following the big April drop. Sales of previously owned homes also rose last month. The National Association of Realtors reported Thursday existing home sales, a much larger market than new homes, increased 1.1 percent in May to a seasonally adjusted annual sales rate of 5.62 million. (ABC News)
Starwood Capital Ups its Offer for Forestar as Battle with D.R. Horton Intensifies “There’s a battle brewing between two real estate titans as Starwood Capital Group and D.R. Horton are both angling to acquire Forestar Group, a residential and mixed-use real estate developer. Last month, Forestar and Starwood announced that the companies reached a merger agreement, which would see Starwood acquire all of Forestar’s outstanding shares for $14.25 per share in cash. The total purchase price would be approximately $605 million. But, D.R. Horton attempted to swoop in with a superior offer.” (Real Estate Daily News)
Real Estate Firm with Ties to Trump May Build the New FBI Headquarters “A commercial real estate firm, Vornado is widely reported to be a finalist to build a new campus for the FBI somewhere in the suburbs of Washington, D.C. But its financial ties to President Trump are raising concerns about conflicts of interest. ‘It puts a cloud over Vornado's otherwise perfectly sensible bid,’ says Rep. Gerald Connolly, D-Va. Vornado's chairman, Steven Roth, is a Trump supporter, whom the president has called ‘one of the greatest builders in America.’ Trump appointed Roth to serve on his advisory council on infrastructure.” (NPR)
Forest City Laying Off 50 Workers as it Refocuses on Property Development Business “Forest City Realty Trust Inc., a major real-estate developer in New York, San Francisco, Denver and other cities, is laying off 50 employees as part of its effort to exit from most of its retail and entertainment business and refocus more on residential, office and mixed-use projects in urban markets. ‘We have to make extremely tough choices,’ Chief Executive David LaRue said Thursday in a message to employees informing them of the layoffs.” (Wall Street Journal, subscription required)
Foreign Investment Pours into Industrial Real Estate “Houston's industrial real estate boom hasn't been enough to woo big foreign investors away from the nation's commerce hubs en masse. High demand nationwide for warehouse distribution space, driven largely by high hopes for an e-commerce future, has prompted a boom in direct investment from overseas, with the largest sums landing in traditional ports and rail yards like New Jersey, Southern California and Dallas, which topped the list of incoming investment in industrial real estate.” (Chron)
Bank Stress Tests Could Embolden Trump’s Deregulatory Agenda “The big banks' high scores on the Federal Reserve's stress tests could speed up deregulation out of Washington. For the third time in as many years, all 34 of the biggest banks in the United States met the minimum capital standards in the first half of the Fed stress tests designed to safeguard against another financial crisis on Thursday. The strong performance of firms such as Goldman Sachs (GS) , Morgan Stanley (MS) and Citigroup (C) could embolden D.C. lawmakers to loosen regulations on the financial sector.” (The Street)
Sears is Shuttering 20 More Stores “Sears Holdings is planning to shutter 20 more Sears stores in the U.S., in addition to the more than 200 closures that have already been announced, Business Insider reported Thursday. Sears reportedly announced the latest round of closures to its store employees on Thursday, several workers told the online publication. Some of the Sears locations on the updated list of stores being closed include those in Sarasota, Florida; Roseville, Michigan; Watchung, New Jersey and East Northport, New York, Business Insider said.” (CNBC)
Develop a Localized Investment Strategy When Considering Real Estate in the Northeast “In New York City-North New Jersey, Newark, Portland, Boston and Providence, the ratio of average home price to average rent is very high (above 20). With the exception of Portland, these markets also have high proportions of renters, 65 percent in Boston, 70 percent in New York. Here you will do best to buy a single-family property and divide it into several units, each with above-average rents. Find properties that are reasonably close to a college/university or to a hospital/medical center.” (Forbes)
Chicago’s New Apple Store Looks Like a Giant Laptop “The new Apple store under construction on the Chicago River is starting to look a little familiar. Construction crews on Thursday placed a big, white Apple logo on the roof of the new store on Pioneer Court, 401 N. Michigan Ave. Combine the new logo with the store's curved, metallic roof, and the site starts to resemble a Macbook. Less than an hour later, however, crews rolled up the apple and took it away.” (DNA Info)
America is Over-Malled, with Not Enough Warehouses to Support Amazon “As sales by internet retailers grow, though, there could be one class of REITs poised to benefit, Jefferies analyst Jonathan Petersen wrote in a note to clients Friday. While there is a glut of malls, there aren't nearly enough warehouses across the U.S. to support internet retailers like Amazon, Petersen said. ‘[R]etail sales are not in decline, but rather shifting toward e-commerce retailers who require large amounts of warehouse space.’” (CNBC)