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 gained 303.31 points, or 1.5 percent, to 21,115.55. The Standard & Poor's 500 index rose 32.32 points, or 1.4 percent, to 2,395.96. The Nasdaq composite added 78.59 points, or 1.4 percent, to 5,904.03.
U.S. crude fell 18 cents to $53.83 a barrel in New York. Brent crude, used to price international oils, lost 15 cents to close at $56.36 a barrel in London. Wholesale gasoline shed 5 cents, or 3 percent, to close at $1.68 a gallon, while heating oil slid 2 cents to $1.62 a gallon. Natural gas rose 3 cents to close at $2.80 per 1,000 cubic feet.
Record highs for US stocks; Dow crosses 21,000-point mark -- Investors bet big on U.S. stocks Wednesday, giving the market its biggest single-day gain in nearly four months and pushing the major indexes to record highs. Banks were the biggest gainers amid heightened expectations that an improving economy will lead to higher interest rates. Energy stocks also notched big gains. Utilities and real estate stocks lagged. The dollar strengthened against the yen and euro and other major currencies. Bond prices fell, as did the price of crude oil and gold.
TWO MORE HOTELS PLANNED FOR DOWNTOWN TUCSON - The board of the Rio Nuevo Facilities Improvement District approved deals yesterday that could bring a new hotel to the Tucson Convention Center (TCC) area downtown and another boutique hotel catering to millennials. Construction of the hotels would be funded privately, with Rio Nuevo agreeing to multimillion dollar deals that would allow both developers to keep a portion of the sales taxes generated by each property. The board vote would allow Caliber Hospitality, the developer behind the proposed 125-room hotel next to the TCC, to keep a minimum of $2.5 million in sales tax revenue. A second Marriott-branded hotel called Moxy, developed by Scott Stiteler, doesn't have a minimum sales tax figure but would be capped at $5.6 million by 2025. That hotel is expected to be built on top of the Depot Plaza underground parking garage at 45 N. Fifth Ave., near East Congress Street. Stiteler is one of the developers of the AC Hotel Tucson by Marriott, which is set to open later this year. (Arizona Daily Star)
Hershey expects to cut 15 percent of global workforce — Hershey says it expects to cut its global workforce by about 15 percent, with the reductions coming mostly from hourly employees outside the United States. The Pennsylvania-based maker of Reese's, Kit Kat and Twizzlers also cut its long-term sales growth forecast to between 2 percent and 4 percent, down from the previous 3 percent to 5 percent.
IRS: Deadline near to get $1 billion unclaimed 2013 refunds — The IRS says it has $1 billion in unclaimed refunds from 2013, and time is running out to claim them. Under federal law, there is no fine for failing to file a tax return — as long as you are owed a refund. But taxpayers have only three years to claim them. After that, they are forfeited to the U.S. Treasury.
Trump tax plan, not even on drawing board, is already roiling rental housing “The housing development known as A.O. Flats, announced in March 2016, was hailed as exactly what Boston needed: affordable rental homes in a mixed-use building, just steps from a transit station. It would mean 78 middle-class families and residents - nurses, teachers, service workers - could afford to rent in Jamaica Plain, one of the city’s most sought-after neighborhoods, an area where 2-bedroom apartments are renting for about $2,000 per month, according to Zillow. A.O. Flats was in a sweet spot, according to Bart Mitchell, president of The Community Builders, the nonprofit housing developer behind the project. ‘People embraced the idea of housing production being needed near transit, in a neighborhood for people with higher incomes but having it be for moderate incomes as well.’ The project was supported by the City of Boston and The Community Builders and had funding through a national initiative called the Low Income Housing Tax Credit, a program that’s enabled more than 43,000 housing units to be built over the past three decades.” (MarketWatch)
Target To Recast Stores As 'Hyper Local' Online Fulfillment Centers To Revive Ailing Business “Amazon’s symbolic shadow loomed large at Target’s investor meeting today in New York City. Executives from the cheap-chic discounter outlined a plan to transform its struggling stores into local fulfillment centers to keep step with massive e-commerce growth. With shopping increasingly moving online, Target needs to get its digital-physical profit model right — and do so quickly— as Amazon continues to gobble up market share. “More and more, we know we’re competing with Amazon,” Brian Cornell, CEO, said during a Q&A with press after the meeting. The retailer also announced plans to lower prices to better compete with the online giant and Wal-Mart, news that sent its stock spiraling.” (Forbes)
CRE Opinion: The Irresistible Rise of Private Equity Real Estate “For high net worth investors, these are extraordinary times impacted by disruptive changes to the regulatory and political landscape. Today, CEOs, doctors, attorneys, and other sophisticated investors are exploring new ways to preserve and grow their capital, including adjusting their asset allocations and making strategic moves into alternative investments. In many cases this means getting out of hedge funds and into private equity. In this brave new world, I believe that private equity real estate is worth strong consideration. Private equity real estate can deliver a tangible financial return—and preserve capital—even in today’s yield-starved market. If all else goes wrong, and barring war or a major global disaster, property will continue to exist long after fiat paper money and other traditional investments have imploded or even vanished (anyone for Lehman Brothers, The Royal Bank of Scotland, or Lloyds Bank).” (D Magazine)
Archdiocese of New York Seeks $100 Million Mortgage for Sexual Abuse Fund "The Archdiocese of New York wants to take out a $100 million mortgage on one of its prized real estate possessions to fund a compensation program for victims of clergy sexual abuse. The petition for a mortgage, which was filed in New York State Supreme Court on Monday, will be on the land the archdiocese owns underneath the luxury Lotte New York Palace Hotel and a semicircle of landmark 19th-century mansions known as the Villard Houses, on Madison Avenue between 50th and 51st Streets. Directly across Madison Avenue from St. Patrick’s Cathedral, the land was acquired by the archdiocese in the decades after World War II. In the 1970s, the archdiocese entered into a 99-year ground lease with the developer Harry Helmsley that allowed him to build a 54-story hotel on the property and rent the underlying land for $1 million a year. The hotel and leasehold were purchased in 1993 by the royal family of Brunei, then sold to a private equity fund, and then to the current owner, Lotte, in 2015. The archdiocese did not say how much rent it receives for the underlying land.” (The New York Times)
A big fight is brewing over Boston’s iconic Citgo sign “Like so many real estate disputes, this one involves a longtime tenant and a new landlord who wants to jack up the rent. But in this case, the tenant is the iconic Citgo sign — or, more precisely, the Venezuelan-owned oil company that leases the rooftop at 660 Beacon St., where the neon landmark sits. And the landlord is Related Beal, the New York developer that bought the building in October. The two are locked in a stalemate over how much Citgo Petroleum Corp. should pay to rent the perch for a sign that serves as a backdrop to Fenway Park and as a beacon as runners near the Boston Marathon’s finish line. Citgo’s lease is set to expire just days before the Red Sox home opener.” (Boston Globe)
EB-5 Funding Approved for JFK Airport Redevelopment “The New York City Regional Center, which helps secure EB-5 funding for real estate and infrastructure projects in New York City, has received approval to provide foreign investments in a redevelopment project at JFK International Airport that has transformed a vacant building into The ARK at JFK, an animal handling cargo terminal that recently completed its first phase.Paul Levinsohn, co-managing principal of the NYCRC, said the United States Citizenship Immigration Services (USCIS) issued an I-924 petition approval for its JFK redevelopment project involving Building 78, a 172,165-square-foot facility on a 14.4-acre site that is now providing space to support general cargo operations and the agricultural industry at JFK Airport. ‘This is an important milestone for a key redevelopment project in the city’s largest airport,’ Levinsohn said of the I-924 petition approval.” (Commercial Property Executive)
Economy Watch: GDP Growth Slows in Q4 “Real U.S. gross domestic product increased at an annualized rate of 1.9 percent in the fourth quarter of 2016, according to the second estimate by the Bureau of Economic Analysis, which was released on Tuesday. The rate represents a slowdown from previous quarters. In the third quarter, real GDP increased 3.5 percent. The revised GDP estimate—the BEA always releases three—is based on more complete source data than were available for the advance estimate in January. Even so, in the advance estimate, the increase in real GDP was also 1.9 percent. With the second estimate for the fourth quarter, the general picture of economic growth remains the same, with some adjustments. The increase in personal consumption expenditures was larger than previously thought, and increases in state and local government spending and in nonresidential fixed investment were smaller.” (MultiHousing News)
Tampa landlord cuts ties with Marco Rubio due to protests “A Tampa landlord is kicking Sen. Marco Rubio’s office to the curb to join the hundreds of protestors who have been camping out in the office park. America’s Capital Partners, which owns the nine-story office building at 5201 Kennedy Boulevard, notified Rubio’s office at the beginning of February that it would not renew its lease, which had been on a month-to-month basis since the lease expired in December, the Tampa Bay Times reported. Rubio’s staff will have to leave by Friday, and has not yet secured a new location. Rallies became too disruptive for other tenants of the Bridgeport Center, America’s Capital Partners President Jude Williams told the newspaper. Rubio, who lives in West Miami, has reportedly been dodging town hall meetings in Florida. Last week in Tampa, event organizers brought a life-sized cutout of Rubio to a town hall meeting in anticipation of his absence.” (The Real Deal)
LA rents are the 6th priciest in the country “A new analysis from rental listing website Zumper ranks Los Angeles as the sixth priciest rental market nationwide, tied with Oakland and behind San Francisco, New York, Boston, San Jose, and Washington D.C. Zumper looked at 1 million active listing in 100 U.S. cities, and it found the average LA rent for a one-bedroom is $2,000. Comparatively, that might seem reasonable to San Francisco, where the median rent for a one-bedroom is $3,270—higher than any other U.S. city. But other studies have shown Los Angeles is actually very unaffordable, because about half of the residents in the metro area here don’t earn enough money to keep up with the cost of rent. In its analysis, Zumper looked the city of Los Angeles, in neighborhoods far north as Chatsworth, south Northwest San Pedro, and west to Venice. It did not include such incorporated cities as Santa Monica, West Hollywood, Pasadena, and Beverly Hills.” (Los Angeles Curbed)
Petco’s expanding retail presence “Petco continues to expand its store portfolio. The retailer, which operates more than 1,500 Petco and Unleashed by Petco locations across the United States, Mexico and Puerto Rico, will open 12 new stores during the month of March. It will also relocate one store in Ohio. The new stores include locations in Virginia, Arizona, New York, Florida, Connecticut, Georgia, Colorado, Tennessee, and Missouri.” (Chain Store Age)