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.
Wednesday, the Dow Jones industrial average slipped 3.36 points, less than 0.1 per cent, to 17,526.62. The Standard and Poor’s 500 index rose 0.42 points, less than 0.1 per cent, to 2,047.63. The NASDAQ composite climbed 23.39 points, or 0.5 per cent, to 4,739.12.
U.S. crude oil fell 12 cents, or 0.2 per cent, to close at $48.19 a barrel in New York. Brent crude, used to price international oils, dropped 35 cents, or 0.7 per cent, to $48.93 a barrel in London. In other trading, wholesale gasoline rose 1 cent to $1.65 a gallon, heating oil gained 2 cents to $1.48 a gallon and natural gas fell 5 cents to $2 per 1,000 cubic feet.
Stocks end mostly unchanged after key Fed minutes released — New signs that interest rates may be heading higher sent stocks flitting between gains and losses Wednesday, but the major indexes ended up closing pretty much where they started. Stocks held onto gains through the first part of the day, but in the afternoon the Federal Reserve released minutes of its last meeting suggesting it was more open to raising rates than many had thought. Caught unaware, investors started dumping utilities and other high dividend payers that had been in favor for much of the year. Bond prices fell sharply, sending long-term interest rates higher. (AP)
Poll: Americans more upbeat about own finances than economy — A new poll finds that Americans feel a whole lot better about their own situations than the economy as a whole in this election year. The Associated Press-NORC Center for Public Affairs Research poll finds just 42 per cent of adults consider the U.S. economy to be good while two-thirds say their own households are faring well. But the anxiety shows on an individual basis too, with only one-third saying they’d be very confident of finding another job if they were laid-off. And despite their own financial gains, many people worry about risks beyond their control — from a volatile stock market to another economic downturn. (AP)
More work, more pay? New rule extends overtime to millions — More than 4 million U.S. workers will become newly eligible for overtime pay under rules issued Wednesday by the Obama administration. The rule seeks to bolster overtime protections that have been eroded in recent decades. A diminishing proportion of workers have benefited from overtime regulations, which require employers to pay 1 1/2 times a worker’s wage for work that exceeds 40 hours a week. Under the new rules, the annual salary threshold at which companies can deny overtime pay will be doubled from $23,660 to nearly $47,500. That would make 4.2 million more salaried workers eligible for overtime pay. Hourly workers would continue to be mostly guaranteed overtime. (AP)
Optimism in Commercial Real Estate “Commercial real estate executives appear relatively optimistic about the general state of the market in 2016, with many predicting higher than average deal volumes for their firms. When considering the adoption of new technology, most believe that the influx of CRE tech companies is revolutionizing the industry. These executives recognize that while the U.S. CRE market is recovering, there are still certain segments that are poised for significant decline.” (Forbes)
The salary you need to afford the rent in these 15 cities “Rents are on the rise — and for residents of some cities, this means they must make six-figure incomes just to afford a two-bedroom apartment. In April, rent jumped 3.7% from a year prior, part of a steady rise that’s been going on for months now. “Rent price growth matched the highest since the financial crisis, another indication of the imbalance in the nation’s housing market,” my colleague Andrea Riquier wrote in her Marketwatch column Tuesday. For some, these rental price hikes have made renting unaffordable. Residents of San Francisco -- now the nation’s priciest rental market — need more than $216,000 to afford a two-bedroom in their area, a study released Tuesday by financial website SmartAsset concluded; meanwhile, the median income in San Francisco is less than $80,000 per year.” (MarketWatch)
Fed’s surprise message: June hike likely if economy improves — Catching many investors off guard, the Federal Reserve made clear Wednesday that an interest rate hike in June is likely if the economy keeps improving. The minutes of their most recent meeting in late April showed that Fed officials widely felt it would be time to raise rates at their June 14-15 meeting as long as hiring and economic growth strengthened and inflation showed signs of accelerating toward the Fed’s 2 per cent target rate. The Fed had voted 9-1 in April to keep rates unchanged while noting that threats from the global slowdown had eased.
Meet the Private Company That Has Changed the Face of the World “The Riyadh Metro is just the kind of epic, technically mind-boggling undertaking that makes its lead contractor, Bechtel, perhaps the world’s leading builder of one-of-a-kind megaprojects. A Bechtel-led team is installing 39 miles of tunnels, viaducts, deep-underground stations, and soaring terminals, all in the heart of a city that has never seen a bit of commuter track. (Other contractors are building additional metro lines, but Bechtel is doing the most difficult work in Riyadh’s center and using four of the seven TBMs assigned to the project.) At $10.1 billion, the Riyadh job is the biggest lump-sum civil engineering project ever awarded to a single team, and it’s being done for a fixed price. The consortium headed by Bechtel—its partners are contractors CCC of Greece and Almabani of Saudi Arabia, as well as Siemens of Germany, which is supplying the trains—is shouldering all the financial risk. Bechtel has guaranteed that by October 2018, the colossal jumble of parts will be united into a seamless network, with futuristic, self-driving trains running end to end." (Fortune)
Amazon planning second grocery store: Report “Amazon is planning to build a second 'click and collect' grocery story, according to a Monday report from the Silicon Valley Business Journal. Reports surfaced in July 2015, originating from the same outlet, that Amazon was planning a grocery store in Sunnyvale, California. That store would allow customers to order their groceries online and then pick them up readied at the brick and mortar location. The second location, according to this week's report will be in San Carlos, California, and public records tie Amazon to the potential space.” (CNBC)
Simon’s second coming? “When Saks Fifth Avenue, one of the great old American department stores, shuttered its location at the Shops at Riverside in Hackensack in 2014, the closure left a major hole in the fabric of the New Jersey property. The Saks branch had been the centerpiece of the mall since its 1977 debut to great fanfare as an anchor tenant. For many years the store was a major draw for New Jersey shoppers who wished for a taste of Manhattan glamour at their doorsteps. In the years following the financial crisis, Saks’ glory days were gone; sales lagged and the store was besieged by competition from rivals such as Bloomingdale’s and Neiman Marcus. The closing also had the potential to cause a big problem for the mall’s owner: Retail behemoth Simon Property Group — the largest mall operator in the U.S. — was suddenly faced with 100,000 square feet of vacant property.” (The Real Deal)
How to make city housing more affordable “Some of the most sought-after cities in the U.S. face a growing affordability crunch. While San Francisco and New York are known for especially high housing costs, places such as Seattle, Boston and Washington are finding more people priced out. It’s a long way from the days when cities were grappling with an exodus of people and their wealth; now they fear becoming too exclusive. A recent analysis by real estate information company Zillow Group Inc. shows many homeowners spending at least a third of their income on mortgages in some cities, while renters in general spend an even bigger percentage of their income on housing. ‘If you ask mayors across the country, their No. 1 problem is affordable housing,’ says Svenja Gudell, chief economist for Zillow.” (MarketWatch)
Inglewood, Calif., Pins Hopes for Commercial Revival on N.F.L.’s Rams “This year, there is fresh hope to revive Inglewood, which is planning to welcome the Rams football team back to the Los Angeles area after 20 years in St. Louis. The Rams’ owner, E. Stanley Kroenke, is building an 80,000-seat stadium, at a cost likely to exceed $2 billion, to accommodate the team, and an entertainment complex is being built nearby as part of a continuing project called Hollywood Park. The development will include about 900,000 square feet of retail space, a hotel, 2,500 residential units and 25 acres of public parks, all on the site of the former Hollywood Park Racetrack. Plans include almost 800,000 square feet of office space. ‘This development adds a dimension to the city that it has never had before,’ said Inglewood’s mayor, James T. Butts Jr." (The New York Times)
New York City's High-Price Retail Real Estate Expected To Slow Down “Adjustments in Manhattan's retail asking rents are being impacted by the slowing global economy, cautious retailers and a rising supply of space. ‘While there are retailers looking at potential stores to lease, the velocity of tenants committing to new leases has slowed and deals are taking longer to complete,’ the report said. According to REBNY's Manhattan Retail Advisory Group, which reviewed the data: ‘It appears that retailers have determined that the present period of slowing retail demand presents a challenge if they were to make a major branding push to increase their visibility. The retail property owners that are adjusting asking rents seem to be those who have had space on the market for an extended period of time.’ Back in November, the top end of Fifth Avenue in Manhattan was named the most expensive retail real estate on the globe, according to Cushman & Wakefield's annual ‘Main Streets Across the World’ research report.” (Fashion Times)
The Jehovah's Witnesses put 69 Adams St. in DUMBO up for sale “The Jehovah's Witnesses have just put onto the sale market a development site in the heart of DUMBO, 69 Adams St. The building that now occupies the site has a four-story recreational facility and an 84-space parking garage. Its rooftop is graced with an open-air tennis court — which is topped by a fence so cars and pedestrians down below don't accidentally get pelted with over-exuberantly hit balls.” (Brooklyn Daily Eagle)
Arlington Mixed-Use Development Commands $406M “A joint venture between AvalonBay Communities Inc. and Regency Centers Corp. has acquired Market Common Clarendon, a mixed-use development located in Arlington, Va., for $406 million. The development boasts 300 Class A apartment homes; 300,000 square feet of retail anchored by Whole Foods Market, Apple, Crate & Barrel, The Container Store, Pottery Barn and Williams-Sonoma; and an adjacent vacant building identified for future redevelopment. According to the deal, AvalonBay will acquire all of the benefits of the residential components, while Regency will acquire the retail and all remaining components.” (Commercial Property Executive)
Lowe’s like Home Depot, puts up big numbers as housing booms — Lowe’s on Wednesday reported surging first-quarter profits as key sales metrics jumped in the midst of a strong recovery in the U.S. housing market. The company boosted its outlook for the year, as did its rival, Home Depot on Tuesday. Home improvement stores continue to distance themselves from a retail sector that can’t seem to get shoppers through the door, or to spend much money when they do. Lowe’s profit jumped 31.4 per cent to $884 million, or 98 cents per share. Earnings, adjusted for non-recurring gains, were 87 cents per share, topping market forecasts. Revenue rose 7.8 per cent to $15.23 billion, also beating analyst expectations. (AP)