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 held steady on Wall Street Thursday, and bond prices gave back some of their big gains from the prior day as a rally fueled by the Federal Reserve’s announcement on interest rates Wednesday faded.
The Standard & Poor’s 500 index slipped 3.88 points, or 0.2 percent, to 2,381.38. The Dow Jones industrial average fell 15.55 points, or 0.1 percent, to 20,934.55. The Nasdaq composite, meanwhile, rose 0.71 points, or 0.01 percent, to 5,900.76. The Russell 2000 index of smaller stocks also rose slightly, up 3.20 points, or 0.2 percent, to 1,386.03.
Yields ticked higher as bond prices fell. The yield on the 10-year Treasury note rose to 2.53 percent from 2.50 percent late Wednesday. It had plunged 0.11 percentage points the prior day, after the Fed threw cold water on speculation that it may get more aggressive in raising rates.
The Fed is hoping to lift rates gradually off their record lows, where they stayed for seven years following the 2008 financial crisis. With both economic data and inflation picking up recently, some investors began to consider the possibility that the Fed may try to raise rates four times this year. But the Fed on Wednesday stuck with its forecast for three.
Pima County Board of Supervisors proposes up to 4% sewer connection fee increase – The Pima County Wastewater Reclamation Department (RWRD) and its Advisory Committee will host a public meeting March 23, 2017 about its proposal to increase existing sewer connection fees by up to 4 percent in early 2017. The meeting starts at 8 a.m. in the Board of Supervisors Hearing Room, 1st Floor, 130 W. Congress. Sewer connection fees are charges homebuilders and new businesses pay when they connect to the sewer system or when they increase their potential to discharge to the public sewer system. When a customer first connects to Pima County’s wastewater system or increases potential discharges, the new customer is required to ‘buy-in’ to the system by paying a connection fee based on the customer’s expected use of the available system capacity. Pima County uses water meter size to estimate that expected capacity use. In 2012, Pima County determined the one-time cost of system capacity was $4,066 for a residential-size water meter and $27,030 for a one-and-a-half inch commercial water meter. Pima County is currently reevaluating the cost of system capacity. Based on preliminary results, Pima County expects the one-time cost of system capacity may increase to $4,229 for a residential-size water meter and $28,111 for a one-and-a-half inch size commercial water meter. A full range of commercial meter size fees can be found in the revised ordinance. Sewer connection fees are separate from monthly sewer user fees, which are fees charged to current customers based on usage. The last connection fee change was in 2012. For more information about the proposed rate increase, RWRD officials encourage the community to attend the public meeting. Members of the public will have an opportunity to comment on the proposal. Those who cannot attend in person may review the proposed rate increase online at www.pima.gov/wastewaterreclamation or call Pima County’s Finance and Risk Management Department at (520) 724-3669 or submit their questions by email to email@example.com. The final recommendation to increase RWRD’s sewer connection fee by up to 4 percent is currently scheduled to be considered by the Pima County Board of Supervisors at the April 18 meeting.
MAYOR DELIVERS STATE OF THE CITY ADDRESS – Tucson Mayor Jonathan Rothschild delivered his sixth State of the City address this afternoon. Speaking to more than 1,000 guests at the J.W. Marriott Starr Pass Resort, the theme of Rothschild’s speech was “Tucson: A Reliable Partner.” The mayor discussed successes in economic development and partnerships with Rio Nuevo, the Regional Transportation Authority, Davis-Monthan Air Force Base, Raytheon, the Tucson Metro Chamber (which hosted the event), and others. Rothschild also spoke about how City government has become a lean operation, making it more important than ever to work together with outside groups.
Mayor Rothschild speech is here: State-of-the-City-2017
AIRMEN MEMORIAL BRIDGE TO BE REDEDICATED TOMORROW – Two new plaques honoring the 18 airmen who died in a mid-air collision of two B-24 Liberator Bombers during a training mission over the Pantano Wash on Nov. 30, 1944 will be unveiled tomorrow. The new plaques were designed and donated by some of the surviving family members of the 18 airmen. Tucson City Council Member Paul Cunningham, the Tucson Department of Transportation (TDOT), and about 25 surviving family members from across the country will take part in the 1 p.m. rededication ceremony at the Airmen Memorial Bridge (Pantano Wash/Kolb Road). The bridge is part of the roadway improvements to connect Sabino Canyon Road south of Tanque Verde Road to Kolb Road. The ribbon cutting for the new roadway and the dedication of the Airmen Memorial Bridge took place in January.
Investors Are Snapping Up New Corporate Campuses “Want to buy a corporate campus? There are plenty to choose from on the market in North Texas. New corporate facilities that house Raytheon, FedEx Office and Geico Insurance are all up for grabs. Sales of these new business enclaves have been some of the biggest real estate deals in the Dallas-Fort Worth area in the last year. Last year, some of the largest property trades in North Texas were corporate campuses, adding up to more than $1 billion.” (Dallas News)
Starboard Said to Have Sold Macy’s Stake—Report “Macy’s incoming CEO may have received a big break as activist investor Starboard Value is said to have sold its stake in the struggling department store. Starboard Value, which pressured Macy’s to separate its real estate from its retail business, has sold its 1% holding, Reuters reported. The activist investor owned about 3 million Macy’s shares worth about $107.8 million at the end of December, Starboard’s recent disclosure showed.” (The Street)
U.S. Banks’ Real Estate Boom Could Be Signaling Next Crisis “Excessive real estate credit is the most common cause of banking booms, busts and collapses, throughout history, right up through the most recent financial crisis and around the world. The U.S. commercial banking system has gotten much bigger relative to the U.S. economy than it used to be, although there are many fewer banks. The principal source of this growth is that banks have vastly increased their real estate exposure relative to the U.S. economy as a whole. This acceleration in real estate risk has fundamentally changed the nature of the banking system and its systemic risk.” (InsideSources)
Real Estate Survey Finds ‘Trump Bump’ in the Midwest and Rural Areas “President Donald Trump may be enduring sagging poll numbers since taking office in January, but his election appears to be lifting the spirits of a core group of his supporters when it comes to real estate and the economy. Multiple years of uninterrupted job gains and hope that the best is yet to come in 2017 are igniting consumer confidence across the country, and especially in rural and middle America, according to new consumer survey findings from the National Association of Realtors.” (Forbes)
The $100 Billion Interview: Blackstone’s Top US Real Estate Exec on the One That Got Away “Blackstone Group TRData LogoTINY is the largest private landlord in America. Over the past decade, it has devoured assets ranging from Sam Zell’s Equity Office portfolio to the 11,000-plus-unit Stuyvesant Town. But even then, the ones that got away still sting. ‘If I think [of] one building, it would be One Worldwide Plaza in New York, which traded in 2009 for a very cheap price,’ Nadeem Meghji, the head of real estate Americas for Blackstone Group, said at a Real Estate Board of New York luncheon Wednesday afternoon.” (The Real Deal)
When Is ‘Ugly’ a Negative Influence on Value of Commercial Real Estate? “When proportion, balance, form, and function come together in delicate harmony, the architecture of commercial real estate (CRE) can be nothing short of an art form. But when, on occasion, those principles clash, the results can be CRE that is eye-searingly awful. But do these CRE architectural misses ever rise to the level of an adverse condition or obsolescence that requires a negative adjustment in valuing the affected property either for a sale or ad valorem property taxation? Some experts believe that they can.” (Bloomberg BNA)
10 Rules to Invest in Equity Like a Real Estate Mogul “If a real estate investor were to invest in stocks the same way they do in real estate, they would apply the following rules: Don’t overpay for an asset. Buy assets where dividends increase over time. Buy assets you would be happy to hold for 10 to 20 years. Generate more income in dividends than the cost of capital (i.e. current interest rates). Identify the risks to cash flows and create a buffer (i.e. interest rates, dividend cuts).” (Seeking Alpha)
Sixth Avenue is the New Fifth Avenue “Move over, Park Avenue — Sixth Avenue is the towering king of Manhattan commercial boulevards. The under-celebrated corridor is enjoying an office-leasing boom, with a surge of first-class new development, and the healthiest retail market in town. Big Six never got much respect. Apart from being home to Radio City Music Hall and for hosting Macy’s Thanksgiving Day Parade since 2012, its main claim to pop-culture fame (or infamy) was rock band The Wallflowers’ ‘Sixth Avenue Heartache,’ an obscure 1996 tune about homeless people.” (New York Post)
Walgreens Said Ready to Sell More Assets to Win Rite Aid Nod “Walgreens is trying to sweeten its proposal to win U.S. antitrust approval to buy rival pharmacy chain Rite Aid, according to people familiar with the talks. Walgreens is nearing an agreement to sell more assets to Tennessee-based discount chain Fred’s — boosting the number of stores and adding distribution centers, software and personnel, according to one of the people. Walgreens could present the beefed-up package to the U.S. Federal Trade Commission within weeks, the person said, in hopes of satisfying the agency’s concerns after an initial proposal fell short.” (Chicago Tribune)
Blackstone Sells Value-Add Medical Campus in Providence “Ventas Inc. has purchased a life science, research and medical campus in Providence, R.I., from affiliates of Blackstone Real Estate Partners VIII LP, the Chicago-based REIT announced Tuesday. The acquisition’s nearly $130 million price tag covered South Street Landing, a redeveloped 269,000-square-foot former municipal power station, as well as an adjacent newly constructed 744-car parking garage. The building is 100 percent leased to Brown University for academic administrative offices and the Nursing Education Center.” (Commercial Property Executive)