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.
Thursday, the Dow Jones industrial average fell 5.23 points, less than 0.1%, to close at 16,995.13. The Standard and Poor’s 500 rose 0.31 points to end at 1,989.57. The NASDAQ composite lost 12.22 points, or 0.3%, to 4,662.16.
U.S. crude fell 45 cents to $37.84 a barrel on the New York Mercantile Exchange. Brent crude, which is used to price international oils, fell $1.02, or 2.5%, to $40.05 a barrel. In other energy trading, wholesale gasoline fell 3.15 cents, or 2%, to $1.439 a gallon, heating oil rose 1.66 cents to $1.216 a gallon and natural gas gained 3.6 cents to $1.788 per 1,000 cubic feet.
$6 Billion Real Estate Bet Eases Pain for Giant Oil Fund “The world's biggest sovereign wealth fund has just reported its worst year of investment returns since 2011. Norway's $876 billion oil fund made 2.7% in 2015, half the average it has achieved over the past decade. Real estate was its best play last year, generating 10%. Stocks were next with 3.8% and bonds lagged with 0.3%.” (KTVZ.com)
Why Global Cities Face a Real Estate Affordability Challenge—and How to Solve It “The study, by global real estate consultants Savills, compares the annual combined cost of residential and office rentals for an employee across 20 cities in five continents. London emerges as the world’s most expensive city, with combined live and work costs of $112,800 per annum—more than double those of Sydney, Los Angeles or Chicago. New York is second with $111,300 and Hong Kong third with $103,200. San Francisco, ranks sixth after Paris and Tokyo.” (Forbes)
More and More People are Renting. Thank the Suburbs “Renting is less and less confined to the high rises of Manhattan or brick-apartment blocks of downtown Chicago and spreading further into the single-family homes of the American suburbs. Nearly 22 million more people were renting in metropolitan areas around the U.S. in 2014 than in 2006 and much of that increase was driven by the growth in suburban renters, according to a new report from New York University’s Furman Center, which studies real-estate and urban policy, and Capital One.” (Wall Street Journal)
Tishman Speyer Buys Sites for a Second Hudson Yards Office Tower “Tishman Speyer has assembled a site in the Hudson Yards area of Manhattan where it plans to build a second office tower, giving the company more prominence in a section of New York that’s primed for growth. The development firm acquired 434-444 11th Ave. and 550 W. 37th St., adjacent properties where it intends to construct a 1.3 million-square-foot (121,000-square-meter) skyscraper, according to an e-mailed statement Wednesday. The price wasn’t disclosed.” (Bloomberg)
Jehovah’s Witnesses’ Brooklyn Properties See Price Surge “The Jehovah’s Witnesses have had such a tremendous response to their Brooklyn land and office offerings that they have now hired Bob Knakal of Cushman & Wakefield to vet the wheat from the chaff. Additionally, with ‘dozens’ of offers received from both locals and global players, sources say the bidders are also now expecting a winnowing second round. Because of the interest and coming second round, pricing is now expected to be well over the $300 million mark, more akin to last year’s expected pricing.” (New York Post)
Why a Major Home Builder is Giving Up on San Francisco “Just how bubbly is the San Francisco real estate market? Home builder Hovnanian announced Wednesday it would exit the market, calling it ‘frothy’ and saying that prices for land were ‘lofty, almost speculative.’ Ara Hovnanian, the company’s CEO, also noted that the company was a ‘relatively small’ player in the San Francisco market and the company wanted to refocus its efforts on other markets.” (MarketWatch)
Talking Construction, Chris Christie and Affordable Housing with Richard Anderson “When Richard Anderson took over as president the New York Building Congress in 1994, construction spending in the city stood at around $10 billion. Even with inflation, that’s paltry next to the $40 billion that’s expected to be spent this year between residential, commercial, entertainment and public works funding. There’s probably no better time to leave the construction advocacy organization than on such a high note, which Mr. Anderson, 75, will voluntarily do later this year.” (Commercial Observer)
Portillo-Backed Firm Pays $159 Million for Retail Buildings “A new Chicago venture whose investors include hot dog baron Dick Portillo paid $139 million for 48 single-tenant retail buildings, including seven in the Chicago area. BlueRoad Ventures said it bought the portfolio last month from Brauvin Net Lease, a privately held real estate investment trust managed by Chicago-based Brauvin Real Estate. It was the first acquisition for BlueRoad, an asset management and investment firm launched in the fall, said Managing Partner Tim Farrell.” (Crain’s Chicago Business)
Zara Looks to Online Growth as it Cuts Store Sales Forecast “Inditex, the world’s biggest clothing retailer, said the pace of store openings would slow as part of a broader trend of sales moving online. Inditex will focus store openings on flagship sites in prime locations like the three-floor Zara store opened in a 19th century building in Manhattan’s trendy SoHo district last week. It will aim for 6 to 8 percent growth in new sales space in coming years, below previous guidance of 8 to 10 percent.” (Fortune)
This One Square Mile of Downtown Miami Saw at Least $585M in Investment from NYC “New York investors interested in Miami are making a beeline for one square mile in Downtown. Over the past two years, New Yorkers have spent at least $586.5 million on property concentrated between the Miami River to Northeast Sixth Street and east of I-95 to Biscayne Bayin, according to research done by Mika Mattingly, a broker with Sterling Equity Commercial. In total, New York buyers acquired at least 1.28 million square feet of buildings and at least 1.1 million square feet of land in the area.” (The Real Deal)
TUCSON FESTIVAL OF BOOKS THIS WEEKEND - The annual Tucson Festival of Books will be held Saturday and Sunday from 9:30 a.m. to 5:30 p.m. on the campus of the University of Arizona. The festival features more than 350 authors and panelists, 250 exhibitors, and opportunities to meet famous authors, poets, writers and journalists. There will be book signings, panel discussions, live entertainment, food vendors, children's activities, Science City, and dozens of free activities for all ages. Admission is free and both Sun Link and Sun Tran provide stopswithin a short walk of the festival. Sun Link will be kicking off the Festival of Books with an onboard reading by award winning children’s author, Conrad Storad, on Saturday, March 12 at 10 a.m. Storad will begin his reading at the Avenida del Convento stop (across from Mercado San Agustin) and will exit at the University of Arizona to participate in the Festival of Books at the Children’s Storyteller Stage.
SWEETWATER WETLANDS CONTROLLED BURN TOMORROW - As part of a joint project to enhance Tucson Water’s Mosquito Abatement Program at the Sweetwater Wetlands and provide a firefighting exercise for the Tucson Fire Department, the two City departments are planning a controlled burn of Wetlands vegetation. Weather permitting, the burn is scheduled to begin Friday at 8:30 a.m. at 2667 W. Sweetwater Drive. As in years past, there will be smoke in the area and there's no cause for alarm. Sweetwater Wetlands will be closed to the public Friday, but will reopen Saturday.
WARDS 1 AND 5 HOST BUDGET FORUM - Tucson City Manager Michael Ortega and Chief Financial Officer Joyce Garland will provide the public with a budget update during a meeting on Tuesday, March 15 at 5:30 p.m. at the El Pueblo Senior Center, 101 W. Irvington Road. Despite a hiring freeze, an early retirement incentive, and other cost cutting measures, Tucson still has a projected $25 million deficit for the new fiscal year that begins July 1.
ROAD BOND PROJECT TO REPAVE SECTION OF KOLB ROAD - Beginning Monday morning, Kolb Road from Golf Links Road to approximately one-half mile north of Valencia Road will repaved. Crews will work Monday through Friday, from 7a.m. to 6 p.m. milling (removing asphalt) and repaving. During this work at least one travel lane in each direction will be maintained. Once the paving work is done, crews will adjust the manhole covers and water valve covers flush with the new asphalt. Business and residential access will be maintained at all times during the project, except when heavy equipment is directly in front of a driveway. Voters approved the five-year, $100 million Road Recovery program in 2012.
Meet Tucson’s Birds with new map - The new Tucson Birding Trail Map is now available. The free map shows the 45 best locations in and around Tucson for finding wild birds. The sites include a range of mountain, desert, and wetland locations, each with its own variety of species. The map is available at a variety of Tucson Audubon and Tucson Parks and Recreation department locations. The Tucson Birding Trail Map was produced by Parks and Recreation and the Tucson Audubon Society, with funding from the Arizona Game and Fish Department’s Heritage Fund. As many as 350 wild bird species have been seen in and around Tucson over the years.
Applications for US unemployment aid fall to 5-month low — The number of people seeking U.S. unemployment aid fell last week to the lowest level since October, evidence that employers are confident enough in the economy to hold onto their staffs. Weekly unemployment benefit applications fell 18,000 to a seasonally adjusted 259,000. The four-week average, a less volatile measure, dropped 2,500 to 267,500, the lowest reading since the week of Oct. 31. And the number of people actually receiving benefits also declined, falling 4,500 to 2.25 million.
Higher stock prices, home values lift US household wealth — Americans’ household wealth jumped in the final three months of last year, pushed higher by rising stock prices and greater home values. That leaves many households, particularly wealthy ones, with more money to spend — a potential boost to economic growth. The Federal Reserve said Thursday that U.S. household net worth increased 1.9 per cent in the fourth quarter to $86.8 trillion. Americans’ stock and mutual fund portfolios grew $758 billion. Home values rose $458 billion. The overall increase in wealth masks large disparities between richer and less well-off households. And the Fed’s figures aren’t adjusted for population growth or inflation.
Average US rate on 30-year mortgage edges up to 3.68 per cent — Average long-term U.S. mortgage rates rose this week for only the second time this year. It was the second straight weekly increase for long-term loan rates, which had declined since the start of the year amid global economic anxiety and market turbulence. Rates still remain at historically low levels at the start of the spring home buying season. Mortgage buyer Freddie Mac said Thursday the average rate on a 30-year, fixed-rate mortgage edged up to 3.68% from 3.64% last week. The average rate on 15-year fixed-rate mortgages increased to 2.96% from 2.94% last week.