Real Estate Daily News Buzz June 6, 2017

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.

On Monday, the Standard & Poor’s 500 index slipped 2.97 points, or 0.1 percent, to 2,436.10. The Dow Jones industrial average fell 22.25 points, or 0.1 percent, to 21,184.04. The Nasdaq composite lost 10.11 points, or 0.2 percent, to 6,295.68. The Russell 2000 index of small-company stocks gave up 8.94, or 0.6 percent, to 1,396.45.

For the year, the S&P 500 is up 197.27 points, or 8.8 percent. The Dow is up 1,421.44 points, or 7.2 percent. The Nasdaq is up 912.57 points, or 17 percent. The Russell 2000 is up 39.32 points, or 2.9 percent.

Truth in Taxation Hearing/Notice of Tax Increase — In compliance with section 42-17107, Arizona Revised Statutes, Pima County is notifying its property taxpayers of Pima County’s intention to raise its primary property taxes over last year’s level.  Pima County is proposing an increase in primary property taxes of $20,001,671 or 5.88%.  For example, the proposed tax increase will cause Pima County’s primary property taxes on a $100,000 home to increase from $421.19 (total taxes that would be owed without the proposed tax increase) to $445.96 (total proposed taxes including the tax increase). This proposed increase is exclusive of increased primary property taxes received from new construction.  The increase is also exclusive of any changes that may occur from property tax levies for voter approval bonded indebtedness or budget and tax overrides. All interested citizens are invited to attend the public hearing on the tax increase that is scheduled to be held on Tuesday, June 20, 2017, at 9 a.m. or thereafter at the Board of Supervisors Hearing Room, Pima County Administration Building, 130 W. Congress, 1st Floor, Tucson, Arizona.

Interest rates on short-term Treasury bills rose in Monday’s auction to their highest levels in more than eight years. The Treasury Department auctioned $39 billion in three-month bills at a discount rate of 0.980 percent, up from 0.960 percent last week. Another $33 billion in six-month bills was auctioned at a discount rate of 1.070 percent, up from 1.060 percent last week. The three-month rate was the highest since those bills averaged 1.250 percent on Oct. 20, 2008. The six-month rate was the highest since those bills averaged 1.100 percent on Nov. 3, 2008. The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,975.23, while a six-month bill sold for $9,945.91. That would equal an annualized rate of 0.996 percent for the three-month bills and 1.091 percent for the six-month bills. Separately, the Federal Reserve said Monday that the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, stood at 1.16 percent on Friday, unchanged from the level on May 30.

Gymboree Is One Step Closer to Bankruptcy “Children’s clothing retailer Gymboree is expected to file for bankruptcy in the coming weeks or even days, after it elected not to make an interest payment on $171 million of bonds that was due on Thursday. The troubled company, which has been in talks with investment banks and advisers on ways to repair its balance sheet since January, has a 30-day grace period before it is officially in default.” (MarketWatch)

Trump’s Travel Ban Gives the Impression ‘People Are Not Welcome,’ Loews Hotel CEO Says “Jonathan Tisch, chairman and CEO of Loews Hotels and co-owner of the New York Giants, said Monday he’s worried President Donald Trump’s immigration policies and tough talk about homeland security send a message of exclusivity to the world. ‘We’re concerned that there is a negative sense that people are not welcome in this country. And that will have an impact on the industry,’ the co-chairman of Loews Corporation said on CNBC’s ‘Squawk Box.’” (CNBC)

Residential Towers Lead the Way in Additions to Dallas’ Skyline “During the 1980s, Dallas’ skyline more than doubled in size. Developers rushed to put up ever-larger towers, adding to Big D’s high-rise profile. Lately, most of the office construction has been in neighboring Uptown. All three of the tallest buildings to go up inside the downtown loop are not offices, but residential high-rises.” (Dallas News)

Bank at Center of U.S. Inquiry Projects ‘Soft Power’ “It has offices in a sleek Manhattan skyscraper. Its bonds are accessible to millions of American investors. And it holds ties to some of New York’s biggest banks. Despite this presence on Wall Street, detailed in previously unreported financial records, Vnesheconombank, or VEB, is no normal bank. It is wholly owned by the Russian state. It is intertwined with Russian intelligence. And the Russian prime minister is, by law, the chairman of its supervisory board.” (The New York Times)

New Jersey Landlords Sweeten Perks with Ride-Hailing Subsidies “New Jersey office landlords have been sprucing up their properties with everything from food trucks to fitness centers to compete in an era when urban amenities are in vogue. The latest enticement: Subsidies for digital ride-hailing services such as Uber and Lyft.” (The Wall Street Journal, subscription required)

Industrial Real Estate Market Faces Bright Outlook “Houston’s industrial real estate market has a strong near-term future, according to a first-quarter analysis released by commercial real estate service firm Lee & Associates this month. Average industrial rental rates grew 4 percent since the start of last year, and the company predicted that they’ll continue to grow by as much as 5 percent in 2017. That comes as the pipeline dwindles.” (Chron)

U.S. Commercial, Multifamily Mortgage Delinquencies Remain Low in 2017 “According to the Mortgage Bankers Association’s latest Commercial/Multifamily Delinquency Report, delinquency rates for commercial and multifamily mortgage loans in the U.S. were flat or decreased in the first quarter of 2017. ‘Delinquency rates for commercial and multifamily mortgages remained at or near record lows for most capital sources during the first quarter,’ said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research.” (World Property Journal)

Cress Expands Western Portfolio with $110M Buy “Cress Capital LLC has acquired more than 800,000 square feet of office and flex industrial space in Southern California and Colorado for about $110 million. The two transactions include Prospect Portfolio, a 23-building office and flex industrial portfolio totaling more than 500,000 square feet in Fort Collins, Colo., and Sandpointe, two office buildings totaling 301,168 square feet in Orange County, Calif.” (Commercial Property Executive)

Investing in Real Estate: Single Family Homes or Multifamily? “In recent years, a growing number of online platforms have begun to offer direct investments in residential properties, allowing individual investors to access this asset class much more readily and at lower minimums. Some platforms offer investments in apartment buildings (multifamily properties, in industry lingo), some offer investments in single family homes, and some offer both. But while all of these offer attractive investments, multifamily investments offer better downside protection and risk-adjusted returns. This is true for several reasons.” (Crowdfund Insider)

Alexander’s Cashes Out Nearly $200M in Manhattan Refi “Alexander’s Inc., a Vornado Realty Trust affiliate, completed a $500 million refinancing of the office portion of 731 Lexington Ave. in Manhattan. The interest-only loan is at LIBOR plus 0.9 percent (currently 1.95 percent) and matures in June 2024, as extended. The Paramus, N.J.–based REIT realized net proceeds of about $188 million after repaying the existing $300 million mortgage and closing cost.” (Commercial Property Executive)