Real Estate Daily News Buzz May 12, 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.

The Standard & Poor’s 500 index fell 5.19 points, or 0.2 percent, to 2,394.44. The Dow Jones industrial average lost 23.69 points, or 0.1 percent, to 20,919.42. The Nasdaq composite declined 13.18 points, or 0.2 percent, to 6,115.96, a day after closing at another all-time high.

Benchmark U.S. crude oil rose 50 cents, or 1.1 percent, to settle at $47.83 per barrel in New York after surging $1.45 on Wednesday. Brent crude, the international standard, added 55 cents, or 1.1 percent, to close at $50.77 per barrel in London. Wholesale gasoline rose 2 cents to $1.56 a gallon. Heating oil added 1 cent to $1.49 a gallon. Natural gas climbed 8 cents, or 2.6 percent, to $3.38 per 1,000 cubic feet.

LAST-MINUTE TUCSON VOTING OPTIONS – If you missed yesterday’s recommended deadline to mail back your ballot in time for it to be counted in the City of Tucson’s May 16 Special Election, or you didn’t receive your ballot, you still have some options available. Seven sites will be used as ballot replacement locations or drop-off sites on Election Day. Follow the link below for a list of locations that will be open from 6 a.m.-7 p.m. on May 16. You can also pick up a replacement ballot at the Tucson City Clerk Elections Center, 800 E. 12th St., every day until the election (except Sunday). Hours are 8 a.m.-5 p.m. The purpose of the election is to submit a question to voters (Proposition 101) as to whether they want to authorize a temporary half-cent sales tax increase to fund improvements for roads and public safety. Of the 254,539 eligible voters in Tucson 45,232 (17.7%) have been returned so far.  Here are the ballot replacement locations or drop-off sites:

Tucson Voting Locations	Days of Operation	Hours of Operation
Department of Housing and    Community Development 310 N. Commerce Park Loop	May 16, 2017	6:00 a.m. – 7:00 p.m.
Morris K. Udall Regional Center 7200 E. Tanque Verde Road	May 16, 2017	6:00 a.m. – 7:00 p.m.
Donna R. Liggins Recreation Center 2160 N. 6th Avenue	May 16, 2017	6:00 a.m. – 7:00 p.m.
William Clements Recreation Center 8155 E. Poinciana Drive	May 16, 2017	6:00 a.m. – 7:00 p.m.
El Pueblo Senior Center 101 W. Irvington Road	May 16, 2017	6:00 a.m. – 7:00 p.m.
Parks and Recreation Administration -Randolph Park, 900 S. Randolph Way	May 16, 2017	6:00 a.m. – 7:00 p.m.
Tucson City Clerk Elections Center, 800 E. 12th Street	April 27 – May 15 May 16, 2017	8:00 a.m.-5:00 p.m. Mon-Fri 6:00 a.m. to 7:00 p.m. on May 16th

FREE Mother’s Day Concerts in the Park this weekend – Reid Park and Udall Park will be alive with music this Mother’s Day weekend. The volunteer Arizona Symphonic Winds will play Saturday at Udall Park’s László Veres Amphitheater, 7600 E. Tanque Verde Road. The Tucson Pops Orchestra, comprised mostly of Tucson Symphony Orchestra players, takes the stage Sunday at Reid Park’s DeMeester Outdoor Performance Center, East 22nd Street and South Country Club Road. Admission is free to both concerts. Under the baton of László Veres, music director of both orchestras, the concerts begin at 7 p.m. each night.

Aetna drops last 2 state markets under Affordable Care Act — While Republicans rewrite the Affordable Care Act in Washington, the future of the current law has grown hazier with the nation’s third-largest health insurer completely divorcing itself from state-based insurance markets. Aetna said late Wednesday that it won’t sell individual coverage next year in its two remaining states — Nebraska and Delaware after projecting a $200 million loss this year. It had already dropped Iowa and Virginia for 2018. The insurer once sold the coverage in 15 states, but slashed that to four after losing about $450 million in 2016.

Wholesale prices jumped in April — Inflation at the wholesale level jumped in April by the largest amount in three months, fueled by rising prices of food and energy. Even excluding the volatile energy and food categories, core inflation was up sharply as well, raising concerns about whether inflation is starting to edge higher after being quiet for years. The Labor Department said Thursday that its producer price index, which measures inflation before it reaches the consumer, rose 0.5 percent in April. That represented a sharp rebound following a 0.1 percent decline in March. It was the largest one-month gain since January.

Claims for US unemployment aid fall by 2,000 to 236,000 — Fewer Americans sought jobless benefits last week, and the number of people collecting unemployment checks fell to the lowest level since 1988. The Labor Department says initial claims for jobless aid fell by 2,000 to 236,000.

Depreciation’s Tax Break Has Consequences for Real Estate Investors “The depreciation computation is figured based on the value of the improvements, not on the land underneath the improvements. This necessitates that you be able to determine the value of the land and the value of the improvements. This determination is generally included in the multitude of closing documents you received when buying the property or found on the county real estate tax website. It is essential that you keep your closing documents.” (Kiplinger)

Property Developer Five Point Spikes as Much as 10% on its First Day of Trading “Shares of Five Point, a California real-estate developer backed by the nation’s second-biggest homebuilder, soared on their debut on the New York Stock Exchange on Wednesday. Five Point raised $294 million in its initial public offering of 21 million shares priced at $14 each. The share pricing Tuesday night was well below the expected range. By Wednesday afternoon, share prices were about 7 percent higher than the IPO price, but had been up about 10 percent late in the morning.” (CNBC)

Private Equity Investors Slow Real Estate Buying in First Quarter “The private equity real estate market, which saw exceptionally strong fundraising and dealmaking activity in 2016, seemed to pause and take some profits in early 2017.  CRE-focused equity funds completed 136 major property investments in the first quarter of 2017 totaling $6.1 billion, according to CoStar Group COMPs data. That total is well off the nearly $15 billion in purchases the same set of investors made in the first quarter of 2016.” (CoStar)

Abercrombie & Fitch in Merger Talks with At Least Two Suitors “Among the suitors are apparel rivals Express Inc. and American Eagle Outfitters Inc., the people said. Abercrombie shares have tumbled 45% over 12 months and are near multiyear lows amid slumping sales in its namesake brand. It had revenue of $3.3 billion in its last fiscal year but sports a market value of less than $1 billion. Express, which has a market value of about $700 million, is interested in either a merger of equals or a stock-and-cash takeover of the company, one of the people said.” (Wall Street Journal, subscription required)

Chinese Construction Giant to Buy Stake in Hudson Square Dev Site in $140M Deal “A subsidiary of state-run Chinese construction giant China State Construction Engineering Corporation is in contract to buy a majority stake in a Hudson Square development site, once slated for a cantilevering tower. The deal would value the site at north of $140 million, or $625 per buildable square foot, sources told The Real Deal. China Construction America (CCA) entered contract this week to acquire the vast majority of the ownership interest in the site at 537 Greenwich Street and 110 Charlton Street, sources said.” (The Real Deal)

I.G. Closes $600M Real Estate Fund “H.I.G. Realty Partners closed on H.I.G. Realty Partners III, the firm’s value-add investment vehicle. Fund III secured capital commitments totaling $593 million, handily surpassing its hard cap of $500 million. The fund’s general partner and related parties were among the list of contributors, as was a $52 million co-investment vehicle. H.I.G. Realty, the real estate affiliate of multi-billion-dollar global alternative asset management firm H.I.G. Capital had 29 investors by January 20, at which point $471.7 million had been raised, according to an SEC filing.” (Commercial Property Executive)

Aldi Raises Stakes in U.S. Price War with Wal-Mart “The strategy, previously unreported, centers on adding more private-label goods, which are a retailer’s in-house brands, to win over price-sensitive customers, and a massive expansion to further disrupt a U.S. grocery sector that has seen 18 companies go bankrupt since 2014. Hart’s plan calls for spending $1.6 billion to expand and remodel 1,300 U.S. stores, and open 400 new stores mainly in Florida, Texas and on both coasts by end of 2018. He also pledged Aldi will be willing to change prices more frequently to respond to rivals if needed.” (Reuters)

Macy’s Takes Another Hit as Mall Traffic Dwindles “Macy’s reported a much bigger-than-expected drop in quarterly profit and sales, continuing its uphill struggle to attract customers amid a slump in demand for apparel and the shift toward shopping online. Macy’s shares fell as much as 10 percent to $26.40 on Thursday to levels last seen in 2011, and pulled down shares of rivals across the department store industry. Sales at Macy’s stores open at least a year, including sales in departments licensed to third parties, fell 4.6 percent in the first quarter.” (New York Post)

CRE Opinion: Full Speed Ahead for Metro Multifamily “In the past 12 months, Dallas ranked no. 5 in the country in closed multifamily transactions. The Dallas-Fort Worth metro continues to show up on more buyers’ radar screens—with more institutional and foreign capital streaming into our market. We eagerly anticipate more product coming to market and selling in the next four quarters. The DCAD just released its 2017 values—two words: Sticker Shock!” (D Magazine)