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.
Thursday, the Dow Jones industrial average slipped 23.22 points, or 0.1 per cent, to 17,828.29. The Standard & Poor’s 500 index gave up 0.44 points to 2,090.10. The NASDAQ composite index rose 6.88 points, or 0.1 per cent, to 4,901.77.
U.S. crude slipped 8 cents to $49.48 a barrel in New York while Brent crude, which is used to price international oils, fell 15 cents to $49.59 a barrel in London. In other energy trading, wholesale gasoline fell 2 cents to $1.62 a gallon. Heating oil declined 1 cent to $1.50 a gallon. Natural gas fell 3 cents to $1.96 per 1,000 cubic feet.
Kim DeMarco - Official Candidate for Pima County Supervisor - District 3 - Kim DeMarco, a former United States Marine, Retired Arizona State Police Officer and Local Business woman has filed her Affidavit of Qualification and more than 3 times the required signatures with the Pima County Elections Office on May 26th. It is official, Kim DeMarco is a candidate for Pima County Supervisor - District 3. Kim looks forward to running against the current 20 year incumbant supervisor and believes that the November election will bring change to the Pima County Board of Supervisors. DeMarco's priorities are on repairing the roads, putting a stop to wasteful spending and bringing economic prosperity back to Pima County. For more information, contact her office at 520-644-4444 or visit the campaign website at www.demarcoforsupervisor.com
Natural Grocers will open stores in both Central Phoenix and Chandler on Tuesday, May 31. These new locations will bring the total of Natural Grocers stores to three in the Greater Phoenix Area and nine in Arizona. Both locations are set to open at 8 a.m. next Tuesday. The Phoenix store is located at 655 W. Indian School Road and the Chandler location is at 5805 W. Ray Road. To kick off the store openings, Natural Grocers will host a ribbon-cutting ceremony at both locations at 7:55 a.m. They will give out mystery gift cards to the first 50 customers in line with amounts ranging from $5 to $100. Both store openings will begin live performances from local bands from 8 to 10 a.m. The Phoenix store will host Mancini the Band and the Chandler location will feature the Senators. For those Paleo inclined there will be a tasting of the delicious food from its Paleo Wraps class from 10 a.m. to noon on May 31. The opening day celebrations will be followed by a month-long sequence of free events such as food tastings, cooking demonstrations, and nutrition classes.
Can Dick’s Sporting Goods hang on to its current lead over Amazon? “In the battle between Amazon.com Inc. and the rest of the retail world, Dick’s Sporting Goods Inc. may have a slight advantage in the sporting goods area. At least for now. Credit Suisse teamed up with e-commerce pricing and analytics firm Boomerang Commerce and found that while Amazon offers sporting goods merchandise, it doesn’t have the strong edge over Dick’s Sporting Goods that it does over other retailers. ‘Amazon offers a competitive assortment but still mostly through third parties,’ the bank wrote in a Monday report. The analysis shows that only 17% of the 3,000 SKUs (stock keeping unit) tracked in the study were sold and fulfilled by Amazon. ‘Its pricing is somewhat less disruptive than expected, with few discounts on marquee brands (Nike Inc.). Under Armour Inc. and categories that Dick’s Sporting Goods relies on (activewear),’ said the report. But that edge might not last forever.” (MarketWatch)
Wells Fargo Launches 3% Down Payment Mortgage “First-time buyers and low- to moderate-income buyers have largely been sidelined by today's housing recovery. The common cry is too-tight credit. Lenders have kept the credit box restrictive because they are gun-shy from the billions of dollars in buy backs and judicial settlements stemming from the mortgage crisis that they still face today. Now, the nation's largest lender, Wells Fargo, says it is opening that box with a new low down payment loan — a loan it claims is low-risk to the bank.” (CNBC)
Dollar Stores Escape the Retail Blues “The nation’s top two extreme-value discounters aren’t feeling the retail malaise that affected department stores and many specialty retailers in the first quarter. Rivals Dollar Tree and Dollar General Corp. on Thursday both reported better-than-expected first quarter profits amid increases in traffic, higher spending and lower costs. Summing up a sentiment widely voiced by industry experts and analysts, Dollar Tree CEO Bob Sasser said his company is ‘part of what I consider, in this economic environment, the most attractive sector in retail.’” (Chain Store Age)
Top 10 Retail Brokerages Battle for Share of Billions in Deals “To see which brokerages have been getting the big-ticket listings, The Real Deal crunched retail sales and leasing data for the period from March 1, 2015, to Feb. 29, 2016. The numbers show that the top five brokerages in retail sales volume handled nearly $44 billion in transactions; the top 10 combined hit more than $54 billion. Leading the pack in sales volume was CBRE, with closed deals worth a combined $11.2 billion.” (The Real Deal)
RECon Recap: Shopping Center Owners, Store Chains Deal with Contradictions of Shifting Retail Landscape “This year’s ICSC RECon conference in Las Vegas was by most accounts the busiest and most well-attended since the Great Recession. But the tone of many panels and reports about deal-making activity at the four-day conference in Las Vegas suggested that shopping center landlords and many retailers are beginning to shift from growth mode to preserving portfolio value against a muted retail backdrop.” (CoStar News)
Yardi: Rent Growth to Level Off in 2016 “Towards the end of last year, murmurs were hitting the industry – would 2016 be just as good as 2015? Yardi Matrix’s U.S. Multifamily Outlook suggests it may not be quite as good, but it will definitely be close. The multifamily software company forecasts rental growth of about 5% for 2016, just under the 6.3% rate experienced in 2015. Yardi finds jobs and population growth will keep demand high, raising rents at above-historic norms.” (Multifamily Executive)
Whole Foods Opens First 365 Store in Los Angeles “After months of anticipation, the 365 by Whole Foods Market value store format has made its debut in the Silver Lake neighborhood of Los Angeles. The 29,000-sq.-ft. store offers a streamlined look and feel to go along with its streamlined product selection. All price tags are digital and printed signs are limited to maximize the customer’s view of the store. The space is accented with blues, reds and yellows, and features a textured piece of art designed to be reflective of the neighborhood.” (Chain Store Age)
Economy Watch: Fast Casual Restaurants to Lead Retail Growth “Led by franchise and fast-casual restaurant chains, North American retail growth into 2017 will be overwhelmingly driven by discount and off-price apparel, food, and service concepts, according to a report by Cushman & Wakefield published in conjunction with the International Council of Shopping Centers. It was released this week at RECon. The firm’s first-ever North American Retail and Restaurant Expansion Guide tracks the growth plans of about 2,000 national retail and restaurant chains across 22 categories in the U.S. and Canada.” (Commercial Property Executive)
Retail Investment Sales Prices Falling for the First Time in Years “Manhattan’s retail property market has been growing at a furious pace for years, but as tourism growth tapers off and the U.S. dollar appreciates against tourists’ currencies, that’s starting to change. Average prices per foot have fallen over the last three quarters after peaking in mid-2015, according to retail real estate sales data from Real Capital Analytics. Both the long rise and recent fall, brokers say, has to do with the economic impact of shifts in the city’s tourism rates.” (The Real Deal)
New San Francisco Apple Store is a Game Changer “Apple has recently opened Apple Union Square, a green-inspired store in San Francisco designed by a close collaboration between Apple’s Chief Design Officer Jonathan Ive, Senior Vice President of Retail and Online Stores Angela Ahrendts and Foster + Partners. Located on San Francisco’s popular and vibrant Union Square, the store features 42-foot sliding glass doors that double as two-story windows, a 6,000-inch video screen on the second floor, and living trees lining its customer support section.” (Commercial Property Executive)
U.S. Probes Real-Estate Firm With Ties to Sen. Bob Corker “A real-estate firm that has been a favored investment of Tennessee Republican Sen. Bob Corker is under investigation by federal law-enforcement officials for alleged accounting fraud, according to people familiar with the matter. The Federal Bureau of Investigation and the Securities and Exchange Commission are focusing their examination of CBL & Associates Properties Inc. on whether officials at the Chattanooga, Tenn., company falsified information on financial statements to banks when applying for financing arrangements, the people said. Law-enforcement officials have talked to former CBL employees who allege the company inflated its rental income and its properties’ occupancy rates when reporting those figures to banks, the people said. The FBI and SEC officials have also separately asked questions about the relationship between the company and Mr. Corker, who is close with senior executives at the firm and has made millions of dollars in profits trading the company’s stock in recent years.” (The Wall Street Journal)
China could buy $220 Billion of U.S. Real Estate over Next Four Years “First quarter GDP slowed considerably since 2009. The banking system is highly over-leveraged. Corporations are deep in debt. Credit growth, industrial production, retail sales and recent signs of stabilization have fallen short of expectations. However, as a result of continued poor economic growth, Chinese investors have been pushing into higher yielding opportunities abroad, especially in real estate. In fact, according to a new report from the Asia Society and Rosen Consulting Group, Chinese investors have become the largest foreign buyers of U.S. property after pouring billions into the market in search of safer offshore assets. After a substantial surge in residential and commercial real estate from Chinese investors in 2015, the five-year investment total has ballooned to $110 billion.” (The Huffington Post)
Global push by US retailers expands real estate footprint “The World Wide Web may be the fastest-growing retail space, but the physical world itself is still a target for U.S. retailers seeking growth. The U.S. led all other nations in global retail real estate expansion last year, opening more stores overseas than anyone else, according to a new report from CBRE Group. American retailers already operate in more foreign countries than Asian and European retailers do, but the gap is now widening. U.S. retailers expanded internationally at a faster pace last year than in 2014, accounting for 21 percent of retailers entering cities internationally. Italy was second at 14 percent and the United Kingdom third at 11 percent, according to CBRE. "I think it's an indication that U.S. retailers are seeking growth, and one of the main drivers of growth is to expand into a channel that they're not in today," said Anthony Buono, chairman of CBRE's global retail executive committee.” (CNBC)
Economy Watch: Hotel Revenues Edge Down, Expenses Edge Up “U.S. hotel revenue growth is slowing down, while expenses are on the rise, according to CBRE Hotels’ Americas Research’s 2016 edition of Trends in the Hotel Industry, which was released this week. After five years of strong increases in occupancy, average daily rate (ADR) and profits, U.S. hotels reached the top of the current business cycle in 2015, noted R. Mark Woodworth, senior managing director of CBRE Hotels’ Americas Research. 'It isn’t a surprise that Total Operating Revenues grew just 5.3 percent from 2014 to 2015,' Woodworth said. “What stands out as a concern for hotel owners and operators was the increase in expenses, especially during a year when inflation was just 0.1 percent.” From 2014 to 2015, 56.9 percent of the hotels in the Trends sample posted an increase in occupancy, down from the 70+ percent marks posted the prior few years. Some 86.1 percent of the properties in the sample were able to raise their room rates during the year, however, while 80.5 percent of the hotels enjoyed an increase in revenue per available room (RevPAR). On average, the Trends sample achieved a RevPAR gain of 4.6 percent.” (MultiHousing News)
A fresh take on ‘Retailtainment’ and future of fun “Retail has been the foundation of shopping centers throughout their existence, but new entertainment concepts are making inroads in traditional retail venues. Even in mixed-use venues, it is generally accepted that a critical mass of traditional retail is the highlight, and that other uses are complementary pieces, designed to drive traffic and support the retail component. While the industry has been slowly evolving away from that traditional model for some time now (dining and entertainment uses in particular have emerged as more significant pieces of the commercial puzzle) that trend has exploded in recent years. A wide range of dynamic and engaging new entertainment uses have sprung up, and have functioned as increasingly prominent features on the development landscape. Today, entertainment is no longer a side dish: it’s the main course. And it’s a meal that landlords and commercial development decision-makers are increasingly interested in ordering. Entertainment concepts have evolved well beyond the movie theater, and creative new brands like Momentum Indoor Climbing, Pinstripes, Punch Bowl Social, iFLY indoor skydiving and Topgolf have captured imaginations and dollars as they expand across the country.” (Chain Store Age)
Phase I of 80-Acre Development in Growing D.C. Submarket Breaks Ground “Baltimore-based St. John Properties recently broke ground on the construction of Phase I of Ashburn Crossing, an Ashburn, Va., mixed-use development expected to bring a total of one million square feet of commercial space to Loudoun County. Situated at the intersection of Gloucester and Loudoun County Parkways, the Ashburn Crossing project currently includes plans for eight office buildings totaling more than 500,000 square feet, as well as a 20.5-acre parcel reserved for future retail. Situated close to the Redskins Park and Dulles Park Center, the development will soon benefit from faster access to Route 28 due to ongoing work that will connect the artery directly to Gloucester Parkway this fall. Close to Loudoun Tech Center and Ashburn Technology Park, Ashburn Crossing will offer much-needed space in a market hosting AOL, Verizon, Raytheon, Airbus, Equinix and a plethora of other NoVa hi-tech employers. The development also sits 5 miles from Dulles Airport and is within a one-hour ride from downtown Washington, D.C.” (Commercial Property Executive)
The city of Boston will lend millions of dollars to landlords who promise to keep rents low “City Hall is looking to recruit white knight developers, investors and housing groups interested in buying rental buildings and offering a substantial portion of the units at below market rents. The Department of Neighborhood Development is rolling out a $7.5 million loan fund to help fuel acquisition of rental buildings by prospective owners who agree to offer at least 40 percent of the apartments at below-market prices. And the new owners must also agree to keep the current tenants, agreeing to the requirement that “no tenant in good standing will be displaced from their unit,” according to press release accompanying the rollout by the Department of Neighborhood Development.” (Boston.com)
Labor unions, environmentalists are biggest opponents of Gov. Brown's affordable housing plan “Powerful opponents have emerged to fight Gov. Jerry Brown’s plan to streamline affordable housing development — and their main reason isn’t about building homes. A coalition of labor and environmental organizations has come out against the proposal, arguing that the governor’s plan would harm public health because it allows housing projects to sidestep the state’s premier environmental law. ‘It would be a disaster for local government, local communities, the environment and the citizens of California,’ said a May 18 letter to state lawmakers from the State Building & Construction Trades Council, the Natural Resources Defense Council and other labor and environmental groups. Brown’s plan would exempt urban housing projects that reserve a certain percentage of their development for low-income residents from detailed local government review. By making it easier to build houses, Brown believes the state can reduce California’s major housing supply deficit, which is considered the primary driver of the broad home affordability crisis.” (The Los Angeles Times)