Real Estate Daily News Buzz March 24, 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.
Above-Average Gains in Nonfarm Employment; AZ Unemployment Rate Increases to 5.1% – Arizona’s seasonally adjusted unemployment rate increased from 5.0% in January to 5.1% in February. The U.S. seasonally adjusted unemployment rate decreased one-tenth of a percentage point from 4.8% in January to 4.7% in February. A year ago, the Arizona seasonally adjusted rate was 5.5% and the U.S. rate was 4.9%. Full report here: unemployment-report
Tucson Metro Chamber President & CEO Mike Varney Submits Letter of Resignation Mike Varney wrote: “This day comes to all of us sooner or later. It is time for me to say good-bye to a career I cherish, a staff I love, a board of directors that is visionary and supportive…and to say good-bye to you as an investor in the Tucson Metro Chamber. The decision to retire is different for all of us, I guess. For me it has been an excruciating experience. It’s not human nature to walk away from friends, allies and a career that energizes every moment of every day. In the end, it is the lure of family in another state that was the trump card. Eight grandkids are growing up (one is graduating from high school in June) and grandpa lives 1,700 miles away. And I have also learned that that old bugger, Father Time, still has some pretty good legs under him because he seems to be gaining on me just a little.” (Tucson Metro Chamber)
CELEBRATION SET FOR NEXT PHASE OF GRANT ROAD PROJECT – Join the City of Tucson and the Regional Transportation Authority (RTA) as they begin the second phase of Grant Road improvements. Phase 2 includes Stone Avenue to Park Avenue. The official ceremonial start to the project begins at 10 a.m. tomorrow at the south side of Grant Road between First Avenue and Park Avenue. Speakers will include Tucson Mayor and RTA Board Member Jonathan Rothschild; RTA Board Chair and Sahuarita Mayor Tom Murphy; Tucson City Manager Michael Ortega; Mike Markham, Vice President/COO of Markham Contracting; and members of the Grant Road Citizens Task Force. The Grant Road Improvement Project has been underway since 2007. It includes six travel lanes, protected bike and pedestrian street crossings, sidewalks, bus pullouts, and more. The project is part of the $2.1 billion RTA plan. RTA: https://bit.ly/1kaYAfx; Grant Road information: https://bit.ly/2mV6j7C
PACC Launches First Construction Sale – Adopters can name their own adoption fee (March 24 – 31) Pima Animal Care Center will host its first Construction Sale starting Friday, March 24 through the end of the month. All pets—including dogs, cats, puppies, and kittens—will be eligible for a name-your-own-adoption fee. Shelter officials launched the first Construction Sale to celebrate the progress made on PACC’s new animal care facility. Construction crews are currently preparing the site for the foundation, which is scheduled to be laid next week. “With summer coming early this year, so is the start of overcrowding at PACC. We want to celebrate the significant milestone met for our new shelter by clearing out our kennels and offering low-cost adoptions to loving homes,” said Justin Gallick, PACC’s director of community engagement. The week-long sale begins at noon Friday at PACC’s shelter, 4000 N. Silverbell Road and will extend to PACC’s five partner PetSmart stores through March 31. The sale does not include the $17 licensing fee for adult dogs. As always, adopted pets come spayed or neutered, with up-to-date vaccinations, microchips, and with a free vet visit voucher, too. Help PACC celebrate the progress made on its new campus by bringing home a new furry family member. Visit the shelter or PACC’s website to see the pets ready for adoption.
KFMA Day returns to Kino Sports Complex March 26 – The 18th annual KFMA Day, southern Arizona’s largest outdoor concert festival, returns March 26 to Kino Veterans Memorial Stadium, 2500 E. Ajo Way. Folks can still purchase advance tickets at any Tucson-area Pizza Hut for $40 cash or with debit or credit card for an additional $2 surcharge per ticket. On the day of the concert, tickets will only be available at the Kino Box Office starting at 10 a.m. The parking lot opens at 9 a.m. and a $5 fee will apply to parked vehicles. Visitors will only be able to access the main parking lot from Ajo Way at Forgeus – this applies to Uber and Lyft drop-offs, too. Gates open at noon and the first show begins at 1:15 p.m. This year’s entertainment includes performances by Blink 182, A Day to Remember, Highly Suspect, Islander and Goodbye June. A Clear Bag Policy will be in effect. This policy restricts visitors to carrying their personal belonging in a one-gallon freezer bag, a clutch purse no larger than 4.5” x 6.5”, or a clear plastic or vinyl bag that does not exceed 12” x 6” x 12”. Security staff will check all bags at the entrance and will make exceptions for medically necessary items after proper inspection. This includes, but is not limited to, oxygen tanks, diabetes kits, and allergy pens. The “no food and beverage policy” will remain in effect. To find more details about this event, including rules and guidelines for the concert and information on the clear bag policy, visit KFMA’s website.
Celebration marking improvements to Christina-Taylor Green Memorial River Park set for Sunday, April 2 Pima County officials and family members of Christina-Taylor Green will celebrate improvements to the park bearing her name at a ribbon-cutting ceremony Sunday, April 2, at 1 p.m. Christina-Taylor was the youngest victim of the Jan. 8, 2011, shootings that claimed the lives of five others and wounded Congresswoman Gabrielle Giffords. Pima County Natural Resources, Parks and Recreation and Pima County Regional Flood Control District have been helping the Green family raise funds for renovations to the Pima County River Park, located along the Cañada del Oro section of The Loop between Thornydale and Magee Roads. Those renovations include adding a central seating plaza, children’s statue, a butterfly garden and botanical trail. John Green, Christina-Taylor’s father, and County Administrator Chuck Huckelberry will be speaking. The park’s transformation has been “a true community effort,” said Valerie Samoy, NRPR senior special staff assistant. Another important feature of the park is an existing concrete vertical monument with a quail design created by Denver artist Barbara McKee. Scheduled for removal, the monument is now a feature with beautiful art and surrounding pavers. City High School students helped paint the existing quail mural, and local artist Laurel Inman created beautiful hand-made tiles and murals to honor the greatest contributions. It’s A Blast etched the 18” colored concrete pavers, donated by Concrete Designs Inc., which form a plaza at the vertical monument’s base. The tiles and pavers acknowledge each person and business who contributed to the project. Perched at the top of the wall is a six-foot wingspan steel butterfly, created in the image of Christina-Taylor’s personal artwork. The renovations to the park celebrate a butterfly theme because they were a favorite of Christina-Taylor. CAID Industries, a local fabricator of massive metal works, contributed the butterfly. The park also has gardens with native plants chosen to attract butterflies, hummingbirds and songbirds. CAID also provided five steel benches plasma cut with desert southwest flora and fauna designs to reflect the garden themes. Durazo Construction led the renovation. More than 200 individuals or businesses also contributed services, materials or cash. Albertsons/Safeway and the Pascua Yaqui tribe were key partners in the fundraising effort, which raised more than $109,000. Other business partners were Anderson Painting, Arizona-Sonora Desert Museum, Bach’s Cactus Nursery, Cal Portland Cement, Civano Nursery, Desert Trees Nursery, The Gardeners of Tucson, Greg Carlson Engineering, HSL Properties, Kalamazoo Materials, Mountain States Wholesale Nursery, Omni Tucson National Resort, Superior Steel Supply, Tohono Chul Nursery, Tucson Audubon Society, Tucson Conquistadores, Tucson Medical Center, Wells Fargo Bank.
Hot U.S. Real Estate a Potential Red Flag: Fed’s Rosengren “The run-up in U.S. real estate prices could potentially amplify any future economic downturn, a Federal Reserve official said on Tuesday, urging regulators globally to consider tools beyond interest rates that could help cool the sector. A sharp downturn in U.S. residential and commercial property prices in 2007 and 2008 rocked banks that were highly leveraged in the sector, sparking the global financial crisis and deep recession. With the economic recovery now well under way, bank holdings of commercial and apartment mortgages rose 9 percent and 12 percent, respectively, in the past year.” (Reuters)
Millennials Turn Their Backs on New York and San Francisco “The top three cities for millennials are Salt Lake City, Miami and Orlando, according to real estate website Realtor.com. Following those cities are Seattle, Houston, Los Angeles, Buffalo, N.Y., Albany, N.Y., San Francisco and San Jose, Calif. The cities were ranked by millennial page views of each area compared to the national average, and reflect important factors to millennials, such as job availability and affordability. San Francisco, for example, can be pricey, particularly for real estate, while Albany and Buffalo cost less.” (MarketWatch)
Payless Said to Close Up to 500 Stores in Bankruptcy Reorganization “Yet another store chain looks set to seek bankruptcy protection in a brutal retail environment. Payless, the operator of a discount shoe chain, is set to file for bankruptcy protection as soon as next week, Bloomberg News has reported, citing unnamed sources. A Payless spokeswoman declined to comment to Fortune on the report. As part of that restructuring, Payless would close as many as 500 stores, though it had considered shuttering up to 1,000 stores, according to the report.” (Fortune)
Trump’s Vegas Partner Says Business Is Not Dividing Profits from Foreign Governments as Promised “Two months ago Donald Trump’s lawyer Sheri Dillon stood in Trump Tower and announced that the president would donate all profits from foreign governments at his hotels to the U.S. Treasury—part of an effort to resolve concerns that the he would be in violation of a little-known clause in the U.S. Constitution the day he took office. Now Phil Ruffin, who owns the Trump International Hotel Las Vegas in a 50-50 joint venture with the president, says that’s not happening.” (Forbes)
Investors Have $1.7T to Deploy, But Activity Will Be Flat in 2017: CBRE “There’s $1.7 trillion of dry powder across the globe just waiting to be deployed into real estate in 2017. But investor concerns ranging from a real estate bubble bursting to a black swan economic event throwing markets into turmoil has analysts projecting transaction volume to stay flat at $895 billion, according to CBRE. CBRE, the world’s biggest real estate services firm, published its annual survey of global investors Wednesday, which painted a rosy outlook for the year.” (The Real Deal)
Bohannon Earmarks $145M for Menlo Park Projects “The Bohannon Cos. has received $145 million in financing to develop Menlo Gateway, an eight-story, 210,000-square-foot office building in Menlo Park. The mixed-use project also consists of a 1,040-space parking structure and a 41,000-square-foot fitness center. Square Mile Capital Management LLC originated the construction loan, which was arranged by John Kerslake and Briana Smith of NorthMarq Capital.” (Commercial Property Executive)
This Is How You Destroy an American Icon “The retailer’s fate was sealed roughly 10 years ago when owner Eddie Lampert, the hedge fund billionaire, bought the chain, merged it with Kmart and then decided to all but stop investing in the chains’ upkeep and capital spending. The strategy has been questioned many times but Lampert, who eventually took over as CEO of the chains despite no retail experience, refused to budge from it. In fact, his 15-page manifesto in 2005 stated that conventional measures of retail success, such as same-store sales, were no longer relevant.” (New York Post)
The $2 Billion Club: 245 Park to Join Elite Group of Manhattan Towers “An exclusive tribe of New York City office towers is about to gain a new member. Chinese conglomerate HNA Group has agreed to pay about $2.21 billion for 245 Park Avenue, a 1.8 million-square-foot tower, as The Real Deal first reported Monday. If the deal closes at that price, 245 Park would be only the fourth tower in the history of Manhattan to cross the $2 billion threshold in an outright sale. (TRD excluded partial-stake deals for the purpose of this analysis.)” (The Real Deal)
Meridian Secures $150M Refi of 1 West 34th Street for BLDG, Crown “BLDG Management and Crown Acquisitions landed a $150 million financing from Wells Fargo and Goldman Sachs for 1 West 34th Street in Midtown, Commercial Observer has learned. Meridian Capital Group’s Carol Shelby arranged the 10-year mortgage, which carries a fixed rate of 4.31 percent and interest-only payments for the full term. The new loan, which will be securitized in the commercial mortgage-backed securities market, is replacing a $100 million loan that New York Community Bank provided on the 12-story office property in January 2014, property records indicate.” (Commercial Observer)
Thor Equities Appoints New CFO “Urban real estate development, leasing and management company Thor Equities has announced the appointment of Fess Wofse as Chief Financial Officer. In his new position, Wofse will oversee all global finance operations at Thor Equities. In addition, he will be responsible for managing and reporting on the performance of the company and its investments, as well as supervising the firm’s accounting and risk management departments.” (Commercial Property Executive)