hiteReal 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 lost 112.58 points, or 0.5 percent, to 21,002.97. The Standard & Poor's 500 index fell 14.04 points, or 0.6 percent, to 2,381.92. The Nasdaq composite slid 42.81 points, or 0.7 percent, to 5,861.22.
The price of U.S. crude fell $1.22, or 2.3 percent, to close at $52.61 a barrel in New York. Brent crude, used to price international oils, lost $1.28, or 2.3 percent, to close at $55.08 a barrel. Wholesale gasoline shed 3 cents, or 2.1 percent, to close at $1.64 a gallon. Heating oil slid 5 cents, or 2.8 percent, to close at $1.58 a gallon. Natural gas rose 1 cent to close at $2.80 per 1,000 cubic feet.
Caterpillar offices raided in probe related to Swiss unit — Federal law enforcement officials raided three central Illinois facilities of Caterpillar on Thursday as part of an investigation that the company said may be related to business with its Swiss subsidiary CSARL. Federal agents were seen wheeling large boxes into the Peoria, Illinois, headquarters of Caterpillar, one of the world's largest makers of construction and other heavy equipment. Facilities in East Peoria and Morton, Illinois, also were searched under a federal warrant, U.S. Attorney's office spokeswoman Sharon Paul said.
Costco raises membership fees, misses earnings forecasts — Costco Wholesale Corp. announced Thursday that it's raising its membership fees, as the warehouse club operator released quarterly results that fell short of Wall Street's expectations. Starting June 1, annual membership fees for individual, business and business add-on members in the U.S. and Canada will rise $5 to $60. Executive memberships in the U.S. and Canada will increase from $110 to $120. Overall, the fee increases will affect around 35 million members.
Fed board member Powell says March rate hike possible -- A top Federal Reserve official has added his voice to a growing group of Fed officials who are indicating that it might be appropriate to raise interest rates this month. Fed board member Jerome Powell said in a CNBC interview Thursday that "I think the case for a rate increase in March has come together and I do think it is on the table for discussion."
Robles Ranch Community Center Open House set for March 14 -- Robles Ranch Community Center, one of 13 community centers that is part of Pima County’s Natural Resources, Parks and Recreation Department, is hosting a Spring Community Celebration and Open House Tuesday, March 14, 11 a.m. to 1 p.m. All are invited to the free event at the center, 16150 W. Ajo Highway in Three Points, to sample snacks, peruse local business and organizational displays, learn about offerings at the center and throughout Robles Junction. The event also will feature the unveiling of the new Just Older Youth (JOY) Senior Craft Room, where attendees may participate in fitness class demonstrations and short tours of the historic Robles Ranch. Area businesses or organizations interested in participating, at no charge, may contact Center Coordinator Joanna Dinan (Joanna.Dinan@pima.gov or (520) 882-4408). Table space is limited.
Parent Company of Burger King Acquires Popeyes Louisiana Kitchen for $1.8 Billion -- Restaurant Brands International Inc. (RBI) (NYSE: QSR) parent company to Burger King and Tim Hortons has agreed to acquire Atlanta-based Popeyes Louisiana Kitchen Inc. (NASDAQ: PLKI) for $1.8 billion. Ontario, Canada-based RBI is the parent company of fast food giants Burger King and Tim Hortons. The company owns a portfolio of over 20,000 restaurants throughout the world. Popeyes will continue to be managed independently in the U.S. following the close of the transaction, which is slated for April of this year. RBI plans to expand the Popeyes brand at an increasing pace in both the U.S. and international markets over the next few years. The concept, founded in New Orleans in 1972, has over 2,600 restaurants in the U.S. and 25 other countries. https://shoppingcenterbusiness.com/the-latest-news/parent-company-of-burger-king-acquires-popeyes-louisiana-kitchen-for-1-8-billion
J.C. Penney to Close Two Distribution Facilities, 130-140 Stores -- Plano-based J.C. Penney Co. Inc. has announced plans to close two distribution facilities and approximately 130-140 stores over the next few months. The company’s distribution center in Lakeland, Florida, will close in early June, at which time operations will transfer to a logistics facility in Atlanta. The company is also in the process of selling its supply chain facility in Buena Park, California. The total store closures represent approximately 13 to 14 percent of the company’s current store portfolio. A full list of planned closures will be released in mid-March, pending notification of all affected personnel. Nearly all impacted stores are expected to close in the second quarter of 2017. Associates who will be impacted by the store and distribution center closures will receive separation benefits, which include assistance identifying other employment opportunities and outplacement services such as resume writing and interview preparation.
GDP Estimate Cuts Show Divergence Between Economic Activity and Optimism “There’s a growing divergence between the optimism seen by stock market traders, business executives and consumers, and actual economic activity. The Atlanta Fed’s GDPNow model for GDP growth, which mashes 13 subcomponents together, was cut on Thursday to 1.8% from 2.5%, marking its lowest forecast for the quarter. The biggest culprit was the weak consumer spending revealed in Thursday’s personal consumption expenditure report.” (MarketWatch)
New York Developer Jonathan Rose Plows Into Affordable Housing “New York developer Jonathan Rose Cos. is set to purchase a $500 million portfolio of affordable-housing properties from Forest City Realty Trust, in a transaction that will double the size of Jonathan Rose’s portfolio and help turn it into a more significant player in the industry. The 48 affordable-housing communities the company is purchasing in a deal expected to close Wednesday are sprinkled throughout seven states.” (Wall Street Journal, subscription required)
6 Large Retailers Besides J.C. Penney Are Closing Waves of Stores “The Great Restructuring in retail continues. In the wake of a disappointing holiday season, J.C. Penney (JCP) said recently that it will close 130 to 140 stores by the second quarter. The store closures represent 13% to 14% of the company's current store base and less than 5% of annual sales. Here are several other retailers continuing to rightsize their store fleet amid the shift to digital shopping or other external pressures.” (The Street)
CRE Opinion: DFW Institutional Real Estate—Right Where We Should Be “As of year-end 2016, the NPI was tracking 7,362 assets with an aggregate appraised value of $525,273,700,000—call it $525 billion. That’s a cool $71.3 million per asset; by that measure, this is big time real estate investing. And in case you were wondering what property type is most favored by these large investors: it is office, followed by apartments, then retail. The industrial sector has the most individual properties, but because of the relatively lower cost (per asset), it falls a distant fourth in dollars invested.” (D Magazine)
DineEquity Expects Closures at 2016 Levels “ DineEquity Inc. expects Applebee’s Neighborhood Grill & Bar franchisees to close slightly more restaurants this year than in 2017, the company said Wednesday. ‘Our 2017 plan includes expectations for the closure of some Applebee’s restaurants,’ said Greggory Kalvin, who on Wednesday was named DineEquity’s interim chief financial officer.” (Nation’s Restaurant News, subscription required)
With Sales Slowing, But Prices Still High, Where Does the Multifamily Investor Go? “The 2016 multifamily investment sales market suffered last year in New York City. Compared with the year prior, transaction volume was down, dollar volume was down and number of units sold was down, according to data from Ariel Property Advisors. Dollar volume dropped the most, at 26 percent, to $14.1 billion year-over-year citywide, the brokerage’s numbers show.” (Commercial Observer)
How Real Estate Developers Can Profit from Solar “Many organizations have committed to the idea of sourcing all their power from renewables. Some, including Intel, Kohl’s, Apple, the National Hockey League and Starbucks, purchase enough clean energy to offset or run all of their operations. Real estate developers who sell or lease their spaces, however, have been slower to incorporate rooftop solar in the projects. Because their tenants usually pay the electric bills, there hasn’t been much of an incentive. But that scenario is changing.” (GreenBiz)
Medical Institution Buys Detroit Office Park “Friedman Integrated Real Estate Solutions arranged the sale of North Troy Corporate Park, a 141,464-square-foot office property located at 5505 Corporate Drive in Troy, Mich. Friedman CEO & executive managing director and Associate Broker Robert Gagniuk represented the seller, 5505 NTCC LLC, in this transaction. The building was acquired by the Oakland County Community Mental Health Authority (OCCMHA), which plans to move its headquarters from Auburn Hills to Troy in late summer.” (Commercial Property Executive)
Belay Investment Group Forms Strategic Partnership with Eagle Property Capital Portfolio “Los Angeles-based Belay Investment Group has acquired a 49% interest in a five-property portfolio of workforce housing assets assembled by Miami-based Eagle Property Capital Investments, which sponsors the portfolio’s 51% interest holder, EPC Fund III. Belay and EPC have also entered into a programmatic joint venture, Belay-EPC PJV, through which they will acquire and reposition up to $269 million in Class B and Class C multifamily properties, primarily in Florida and Texas.” (Multifamily Executive)
Outcome Health Plans Huge New HQ in River North “Outcome Health is increasing its headquarters space by six times with a nearly 400,000-square-foot office lease in River North, signaling that one of Chicago's fastest-growing companies is keeping its foot on the gas. The health technology company, formerly known as ContextMedia, has leased almost 400,000 square feet in the former American Medical Association headquarters building at 515 N. State St., according to people familiar with the deal.” (Crain’s Chicago Business)