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.
The Dow Jones industrial average climbed 269.48 points, or 1.6 per cent, to 17,409.72. The Standard & Poor’s 500 gained 35.55 points, or 1.8 per cent, to 2,036.09. The NASDAQ composite added 97.42 points, or 2.1 per cent, to 4,691.87.
Benchmark U.S. crude rose $1.52, or 3.3 per cent, to close at $47.85 a barrel in New York. Brent crude, used to price international oils, gained $1.42, or 3 per cent, to close at $48.58 a barrel in London. In other energy trading, wholesale gasoline rose 3 cents to $1.51 a gallon. Heating oil added 4 cents to $1.47 a gallon. Natural gas gained 20 cents, or 7.4 per cent, to $2.92 per 1,000 cubic feet.
US stocks rebound as anxiety over British vote eases -- U.S. stock indexes mounted a broad comeback Tuesday as investors set aside their anxiety over Britain’s vote to leave the European Union and snapped up shares following a two-day rout. Encouraging data on the U.S. economy and housing market helped put traders in a buying mood. The broad rally followed even bigger gains in Europe, which also bounced back from the steep losses triggered by Britain’s “leave” vote last Thursday. Oil and gas companies led the rally as energy prices rose. Banks and other financial companies, which took the heaviest losses in the sell-off, also surged. Health care, consumer and technology stocks also notched gains. Bond prices fell, sending yields higher.
With the supply of homes slight, US prices surged in April -- U.S. home prices scaled new heights in April, with seven cities — Boston, Charlotte, Dallas, Denver, San Francisco, Seattle and Portland, Oregon — setting highs. The Standard & Poor’s/Case-Shiller 20-city home price index rose 5.4 per cent in April compared with a year earlier, just below the 5.5 per cent year-over-year gain posted in March. A shrinking supply of homes for sale has intensified competition from buyers and forced up prices. Demand has been further fueled by a healthy job market and historically low mortgage rates, which have made people more comfortable about paying higher home prices.
US economy grew at slightly faster 1.1 per cent in 1Q — The U.S. economy grew slightly faster at the start of the year than previously estimated, even though consumer spending posted the smallest gain in two years. The gross domestic product expanded at an annual rate of 1.1 per cent in the first quarter, an improvement from the 0.8 per cent rate released last month, the Commerce Department reported Tuesday. While growth prospects for the spring look even better, the shockwaves from Britain’s decision to leave the European Union could spread to the U.S. economy in the coming months.
How the U.K.’s Exit Benefits U.S. REITs “They are considered safe, and they offer yield. No wonder the stocks of real estate investment trusts ran in the opposite direction of the Brexit-bashed U.S. stock market Friday. Last fall, interest in REITs had begun to wane, as expectations of higher interest rates outweighed solid fundamentals in the real estate market. Now REITs, and the real estate underlying them, are the power play for the anxious investor.” (CNBC)
Analysts Are Saying Fed Rate Hike May Wait Until 2017 “The aftershocks of Britain’s vote to exit the European Union has left Wall Street pondering when the Federal Reserve will raise interest rates — or even if the central bank will raise them at all. Some economists still think the Fed will raise rates this year, but probably not until the central bank’s last policy meeting in December shortly after the presidential election. That will give Fed bigwigs time to gauge the fallout from the votes in Britain and the U.S. Others think the central bank will wait until 2017.” (MarketWatch)
Dick’s Bids for 17 Sports Authority Stores “Dick's Sporting Goods shares were caught up in the Brexit-induced selloff Monday, shedding more than 3.2% on weak volume despite the news that the company submitted bids on 17 Sports Authority stores nationwide. Other retailers bid on only one store, according to Reuters' sources. Sports Authority filed for Chapter 11 bankruptcy protection in March. After efforts to find a buyer who could continue to operate the company as a going concern failed, the Englewood, Colo.-based retailer decided to start liquidating its inventory.” (The Street)
Study: Targeting Hispanics Worthwhile for Grocery Retailers “Hispanic shoppers enjoy grocery shopping significantly more than the average U.S. consumer, in part, because they consider the experience a social endeavor, according to a new study from Acosta Sales & Marketing and Univision, ‘The Why? Behind the Buy U.S. Hispanic Shopper Study.’ Sixty-eight percent of Hispanic shoppers, and 70% of Hispanic millennials, say they enjoy grocery shopping, compared to 59% of total U.S. shoppers.” (Chain Store Age)
Fitch: New U.S. CMBS Supply Is Increasing Risks of Overbuilding “A report released last week from Fitch Ratings says the risk of Class A overbuilding is rising in some submarkets. Overall, the ratings agency says the concentration of high-end construction in 12 metro areas is intensifying and new supply in the student housing sector continues to break records. Despite this, Fitch doesn't expect the stress in multifamily asset performance to have an overall impact on ratings.” (Multifamily Executive)
Airbnb and House-Sharing Firms Reduced New York Housing Stock by 10%--Study “Short-term rental companies like Airbnb are flooding New York City’s housing market, reducing available housing stock citywide by 10%, a new study has revealed. More than 55% of rooms or apartments listed on Airbnb in New York are illegal, according to the report, which is the result of research commissioned by two affordable housing advocacy groups: Housing Conservation Coordinators and MFY Legal Services.” (The Guardian)
‘Cool Streets’ to Influence Urban Retail “Retail's edgy present — and its mainstream future — are taking shape in a handful of urban neighborhoods across the country where food concepts like Whole Foods' 365 and Ahold's bfresh have taken root, according to a new report. The report, authored by Garrick Brown, VP of retail research for real estate firm Cushman & Wakefield, presents an index of the 100 top ‘Cool Streets’ — hip retail districts where retailers focused on millennial shoppers and their preferences for frugality and experience are "an incubator of sorts for what will be the hottest new retail concepts of tomorrow.’” (Supermarket News)
JV Seals Parcel F Deal in San Francisco “F4 Transbay Partners LLC—a joint venture between Hines, Urban Pacific Development LLC, and Goldman Sachs affiliate Broad Street Principal Investments LLC—has completed the acquisition of the highly coveted Parcel F, a spot of land neighboring the Transbay Joint Powers Authority’s multi-billion-dollar Transbay Transit Center project. F4 paid TJPA $160 million for the high-profile site, where it will erect a mixed-use skyscraper.” (Commercial Property Executive)
Feeling Jilted Over Stilted Skyscraper “A plan to jack a new condo tower 155 feet above its neighbors has sparked a millionaires' catfight over views, values and city building regulations. Manhattan developer JD Carlisle, partnering with Shanghai investor Fosun Group, is using a new and increasingly common trick in the architectural playbook, effectively putting its building on stilts and vaulting the property over the roofline of a neighboring hotel to give each of its apartments a view of the New York City skyline.” (Crain’s New York Business)
$150M Refi for Prime Boston Hotel “Annapolis, Md.-based Chesapeake Lodging Trust recently closed on a $150 million fixed-rate mortgage for the 502-key Hyatt Regency Boston. Provided by MetLife, the 10-year loan carries a yearly fixed interest rate of 4.25 percent, with principal and interest payments based on a 30-year amortization. The Maryland REIT snapped up the downtown asset in 2010 from Hyatt Hotels Corp., for a price tag of $112 million. The transaction closed shortly after Hyatt had acquired the property from Host Hotels & Resorts, in February 2009, for approximately $113 million.” (Commercial Property Executive)