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.
Monday, the Dow Jones industrial average rose 175.39 points, or 1 per cent, to 17,710.71. The S&P 500 rose 20.05 points, or 1 per cent, to 2,066.66. The NASDAQ composite index gained 57.78 points, or 1.2 per cent, to 4,775.46
Benchmark U.S. oil rose $1.51 to $47.72 a barrel. Brent crude, used to price international oils, rose $1.14, or 2.4 per cent, to $48.97 a barrel in London. In other energy trading in New York, wholesale gasoline rose 2 cents to $1.61 a gallon, heating oil rose 4 cents to $1.44 a gallon and natural gas fell 7 cents to $2.03 per 1,000 cubic feet.
Don’t Forget to Vote in Special Election Tomorrow Arizona– Polls will be open Tuesday from 6 a.m-7 p.m. for Arizona’s Special Election. There are two propositions on the ballot. Prop. 123 is a ballot measure that would increase the distribution of state education funding from the State Land Trust. Prop. 124 is a measure that would change the way the Arizona’s public safety pension system pays increases in benefits to retirees. If you still have your Early Ballot, you can drop it off tomorrow at any polling location until 7 p.m.
Find your polling place: https://1.usa.gov/1qoIGWd
Election information from Secretary of State: https://bit.ly/1TPB0qv
Two Public Hearings Tomorrow on Proposed Fee Increases – The Tucson Mayor and City Council will hold a public hearing Tuesday night on new fees to help fund Environmental Services. After that hearing, there will be another public hearing on proposed increases in Tucson Water rates, as required by the FY 2017-2021 Financial Plan approved by the Citizens’ Water Advisory Committee (CWAC) and the Mayor and Council. Any water rate increases would become effective on July 5 for the upcoming fiscal year (FY 2017) and July 3, 2017 for FY 2018. Both public hearings will be held during the 5:30 p.m. Regular Meeting in Council Chambers, 255 W. Alameda St. For details about the fees, please follow the link below.
Mayor and Council agenda materials for public hearings: https://1.usa.gov/22dORKL
Environmental Services: https://1.usa.gov/1rcmU8f
Tucson Water: https://1.usa.gov/1uo8uPh
US reveals how much Treasury debt Saudi Arabia owns — Foreign holdings of U.S. Treasury securities rose in March, with the Treasury Department revealing for the first time in four decades how much Saudi Arabia owns. In its latest report, Treasury said Monday that that total holdings increased 0.8 per cent to a record $6.29 trillion. For the first time since 1974, when the government began releasing data on foreign ownership of Treasury securities, the report broke out ownership for specific countries that it had always lumped together such as “oil exporting nations” and “Caribbean banking centres.” The report showed that Saudi Arabia in March held $116.8 billion in Treasury debt, down 2.5 per cent from February.
Chinese pour $110bn into US real estate, says study “Chinese nationals have become the largest foreign buyers of US property after pouring billions into the market in search of safe offshore assets, according to a study. A huge surge in Chinese buying of both residential and commercial real estate last year took their five-year investment total to more than $110bn, according to the study from the Asia Society and Rosen Consulting Group. The sheer size of that total has helped the real estate market recover from the crash that began in 2006 and precipitated the 2008 economic crisis, they said. Chinese investment in property has also helped to inflate prices in other developed countries, notably the UK and Australia in the wake of the dip in world stock markets in 2015. And despite a slowdown due to Beijing’s subsequent clampdown on capital outflows, the figure for the second half of this decade is likely to double to $218bn, the study said.” (The Guardian)
Is the Staples/Workbar partnership the answer to retail’s real estate glut? “Between the rise of e-commerce and the U.S. population’s demographic shift to urban centers, the era of thriving big box retail is largely over. Along with evidence that U.S. retail is overstored, many merchants are left scratching their heads about what to do with excess space. Staples has one answer. The office supplies retailer recently announced that it would partner with office-space sharing startup Workbar to set up co-working spaces in three suburban Boston area stores. Boston-based Workbar offers members a range of perks including high-end workspaces, conference rooms, private phone rooms, fast and secure Wi-Fi, printers, and unlimited coffee and tea. Workbar spaces feature four basic ‘neighborhoods,’ including cafés, a ‘commons’ era conducive to hanging out or meeting, a ‘switchboard’ area ideal for talking on the phone or Skype, and ‘studies’ for more heads-down work.” (Retail Dive)
Chinese investment in US real estate expected to slide: report “With China’s domestic economy faltering, investment in U.S. and New York real estate is expected to slow over the next two years, according to a new report from the Asia Society. The spigot won’t be shut off altogether: Some $58 billion is still expected to be deployed into commercial real estate in the U.S. between 2016 and 2020, according to the report’s authors. But they spoke of an 18- to 24-month ‘hiatus’ that’s already underway as the Chinese government tries to right its economy. The Chinese government has been taking longer to approve investments abroad in recent months, signaling an effort to staunch the flow of funds overseas, the authors wrote.” (The Real Deal)
Shopping pall trashes NYC commercial real estate “The fall-off in sales at US brick-and-mortar stores is starting to hit Manhattan’s pricey commercial real estate. Building owners across town are being forced to cut their rents as sales slow and retailers become cautious, a report due out Monday reveals. Retail rents in 10 of 12 top Manhattan shopping corridors are getting marked down — some by as much as 16 percent, the report shows. Rents first showed signs of weakness last fall after a building spree created an apparent glut of available ground floor spaces — but the discounting has accelerated as vacancies multiplied, according to the Real Estate Board of New York Spring Retail Report.” (The New York Post)
Should this proposed Manhattan project comply with a new affordable-housing law? “Nearly two months after passing a sweeping policy that requires developers to include affordable housing in certain new buildings, the de Blasio administration says the program shouldn’t apply to a new project in Manhattan. But a Manhattan community board disagrees, and voted Thursday night to deny an application being sought by Acuity Capital Partners for a mixed-use project along West 18th Street, between Fifth and Sixth avenues, unless the developer makes some of the estimated 66 apartments affordable. The disagreement marks the first of what will likely become many tests facing the mayor’s complex Mandatory Inclusionary Housing law. The policy was enacted in March and has been applied in few real-life instances outside of the theoretical models used to craft it.” (Crain’s New York Business)
A breakdown of $500M in new development approved for Boston’s neighborhoods “The Boston Redevelopment Authority board last week approved close to $500 million worth of real estate projects in seven city neighborhoods, including three large-scale mixed-use projects in Dorchester and Brighton that contain close to 1,000 units of housing. All told, the BRA approved nine projects totaling $478.2 million in projected-development costs. The projects are expected to bring 1,139 new units of housing online, of which at least 135 units will be designated affordable.” (Boston Business Journal)
South Florida’s industrial markets continue tightening in Q1: Avison Young “With unemployment rates improving, developers are banking on a strong South Florida economy with roughly 2.5 million square feet worth of industrial development under construction during the first quarter. According to the Avison Young report, that’s about 1 million more square feet than what was under construction during last year’s first quarter. Vacancy rates nudged down less than a percentage point to 5 percent, with rental rates growing $0.50 per square foot to $8.95 per foot — the highest industrial asking rates since 2008. On top of that, absorption hit a whopping 4.6 million square feet. The report said many of Miami’s tenants are looking to expand into more efficient spaces, which means speculative developers are building much more sophisticated projects with fire suppression systems, larger truck courts and bigger docking bays.” (The Real Deal)
New Future for Former Washington Post Site “In Washington, D.C., Carr Properties is ushering in a new era at the site that had been home to the Washington Post for a half-century with the groundbreaking on the $650 million Midtown Center development. Carr will replace the newspaper property on 15th St. NW. with an 862,000-square-foot trophy office and retail destination that will serve as the new headquarters of government-sponsored enterprise Fannie Mae. Midtown Center has been a couple of years in the making. In 2014, Carr completed the $159 million acquisition of the 470,300-square-foot Washington Post properties—a group that includes the 12-story Washington Post newsroom tower at 1150 15th St., as well as the interconnecting buildings at 1515 L St and 1523 L St., and the ground lease on the land beneath the Carr-owned property at 1100 15th St. Located downtown just four blocks from the White House, the portfolio occupies an A+ site that is ripe for a renaissance.” (Commercial Property Executive)
George Smith Partners Lands $115M Financing for LA Community “Despite recent volatility in the CMBS market, commercial real estate investment banking firm George Smith Partners (GSP) was able to secure $115.3 million in cash-out refinancing for a 566-unit multifamily community in downtown Los Angeles. GSP arranged the financing on behalf of Southern California-based developer GH Palmer Associates for the Orsini II, a Class A property adjacent to the LA Music Center. GSP’s Principal and Managing Director Gary Tenzer arranged the financing, noting that while many borrowers are concerned about refinance transactions because they think they may “require capital injections in order to close,” multifamily product in Los Angeles has fared well and values are high enough to support cash-out transactions.” (MultiHousing News)
Related Midwest to Develop Massive Downtown Chicago Site “At issue is a long-derelict 62-acre riverfront site in Chicago’s South Loop neighborhood, and Related Midwest now both has acquired an ownership stake in the site and with the city’s blessing will serve as its master developer, the administration of Mayor Rahm Emanuel announced Thursday…Over the coming months, Related Midwest will formally start the planning process for the development, which will ultimately require approval from the Chicago City Council.” (Commercial Property Executive)