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.
Tuesday, the Standard & Poor's 500 index edged up 2.84 points, or 0.1 percent, to 2,391.17. The Dow Jones industrial average climbed 36.43 points, or 0.2 percent, to 20,949.89. The Nasdaq composite gained 3.76 points, or 0.1 percent, to 6,095.37.
Benchmark U.S. crude lost $1.18, or 2.4 percent, to $47.66 a barrel in New York. Brent crude, used to price international oils, shed $1.06, or 2.1 percent, to $50.46 a barrel in London. Wholesale gasoline dipped 1 cent to $1.51 a gallon. Heating oil lost 2 cents to $1.47 a gallon. Natural gas gave up 2 cents to $3.20 per 1,000 cubic feet.
FHA/VA Default Rates Down in Early 2017, Some Sharply -- Mortgage default rates for FHA and VA loans followed seasonal trends and shifted significantly lower in the first quarter of 2017, according to a new analysis and servicer ranking by Inside FHA/VA Lending. While both portfolios showed strong growth in the dollar volume of loans outstanding in Ginnie Mae mortgage-backed securities, there were also huge declines in the number of loans past due. Some $1.036 trillion of FHA forward mortgages were in Ginnie pools at the end of March, up 1.1 percent from the previous quarter. But delinquency rates for the less-severe categories of late payment were down sharply. The number of FHA loans 30-60 days past due, for example, declined by 28.4 percent, lowering the delinquency rate by 1.51 percentage points, leaving it just about where it was a year ago. The same thing happened in the VA sector. For the full story and exclusive delinquency tables, see the new edition of Inside FHA/VA Lending, now available online.
Blackstone's GSO snaps up J. Crew debt in restructuring gambit - GSO Capital Partners, private equity firm Blackstone Group LP's credit arm, is acquiring more of J. Crew Group Inc's debt, hoping for a profitable trade that could also give the U.S. fashion retailer more time to stave off bankruptcy, people familiar with the matter said. Sales have been declining as J. Crew, whose ballet flats and cashmere cardigans were once a staple of middle-class U.S. wardrobes, struggles to keep abreast of changing tastes and faces fierce competition from cheaper online retailers. It now has $2.1 billion in debt. Most pressing is $567 million in unsecured bonds coming due in 2019. To cut that burden, J. Crew is trying to slash more than half the bonds' value by placing the intellectual property of its eponymous brand into a new company, but holders of other debt are resisting the move. (CNBC)
Oro Valley to expand public art tour offerings - The Town of Oro Valley has partnered with two retirement communities to bring free, public art tours right to residents’ doorsteps. Since 2013, the Town of Oro Valley has been providing free, guided tours of the Town’s expansive public art collection—a result of the 1% for Public Art Program. Residents and visitors have the opportunity to view this collection on the second and third Tuesday of each month. Oro Valley will continue offering its twice-monthly tours to the general public, but last month, the Town expanded its tour offerings for residents of Splendido at Rancho Vistoso, and Fairwinds Desert Point. Residents of these communities now have the opportunity to catch the art tour bus right at their property, and enjoy a free tour with their friends and neighbors. The frequency of these tours will be based on demand, and there is already a waiting list. Public art tours may be reserved for individuals or groups up to 13 people. To reserve your seat, please contact Margie Adler at madler@orovalleyaz.gov or 520-229-4758. Reservations can also be made online at www.orovalleyaz.gov by clicking on the Arts & Entertainment link.
Golf Galaxy Opens 36 New Stores — DICK'S Sporting Goods has opened 36 new Golf Galaxy stores throughout the United States. This includes two stores in Arizona, five in California, two in Colorado and one in Oregon. These new locations were formerly Golfsmith properties acquired by DICK'S and have been converted to Golf Galaxy stores, bringing the specialty golf retailer's footprint to 98 locations across 33 states. Founded in 1948, DICK'S Sporting Goods, Inc. is a leading omnichannel sporting goods retailer. As of January 28, 2017, the company operated more than 675 DICK'S Sporting Goods locations nationwide. Headquartered in Pittsburgh, DICK'S also owns and operates Golf Galaxy and Field & Stream specialty stores.
Rental Income Just Hit an All-Time High. Here’s How That Drives a Wedge Between ‘Haves’ and ‘Have-Nots’ “You already know the rent is too damn high. But here’s fresh evidence that something’s amiss in the housing market: one metric of measuring housing costs has never been so high. Rental income as a share of gross domestic product hit an all-time high of 3.86% in the first quarter, according to government data out Friday. That makes sense: with lean supply and pent-up demand, it’s never been such a good time to be a landlord. But it’s a bit more complicated than that.” (MarketWatch)
Treasury’s Mnuchin: Trump Tax Plan Eliminates All But Two Loopholes “President Trump's tax plan adheres to the ‘Mnuchin Principle’ of helping the middle class, the Treasury secretary says. The Trump tax plan was vague because the president wants to work with Congress on getting it done, Mnuchin says. Mnuchin argues it'll take some time, but Trump's policy agenda would lead to ‘sustained 3 percent economic growth or higher.’” (CNBC)
Anbang, Chinese Company With Global Reach, Faces New Scrutiny “Wu Xiaohui, the Chinese tycoon who was in failed talks with President Trump’s son-in-law, Jared Kushner, to buy into a skyscraper project in Manhattan, is fighting allegations of financial chicanery and has threatened to sue a Chinese magazine that examined his company’s labyrinthine funding. The Anbang Insurance Group, which Mr. Wu controls as president and chief executive, said on Sunday that it would take legal action against Caixin Media and its editor in chief, Hu Shuli.” (The New York Times)
10 Myths About the Real Estate Industry Debunked “As flexible schedules and independent work become more appealing (and accepted), more and more people — including a surge of millennials — are joining the real estate business. But while there can be many perks, there are also a lot of industry misconceptions. We asked 10 members of the Forbes Real Estate Council to weigh in on one myth about the real estate industry that newbies in the profession often think is true, and what the actual truth is.” (Forbes)
Japan’s Pension Fund Plows Into Real Estate Investing “Japan’s government pension fund, the world’s largest with $1.25 trillion in assets, is making its biggest push ever to expand its real-estate portfolio. The Government Pension Investment Fund in April asked asset managers around the world to submit proposals to run portions of the fund’s real-estate investment portfolio. The request was part of a broader move by the fund to expand into so-called alternative assets.” (Wall Street Journal, subscription required)
Trump Today: Dodd-Frank ‘Out of Control,’ President Tells Community Bankers “President Donald Trump told community bankers the Dodd-Frank law is ‘out of control,’ said in an interview he is open to raising the federal gasoline tax under one condition and wondered aloud why the Civil War wasn’t ‘worked out.’ Keeping up a long-running line of attack, Trump ripped the Dodd-Frank law in brief remarks to the Independent Community Bankers of America. ‘It’s out of control,’ Trump said. ‘And by the way, not only for community banks — for banks, period.’” (MarketWatch)
San Francisco, Expedia, Airbnb Settle Host Regulations Lawsuit “The City of San Francisco has reached a settlement with home sharing services HomeAway, which belongs to travel website Expedia, and Airbnb with regards to a lawsuit the companies brought over the city's regulations requiring registration rules for hosts. San Francisco, where Airbnb is headquartered, passed the legislation in 2015 in part to stop hosts with more than one dwelling from listing on the sites and keeping long-term housing off the market.” (The Street)
Trump’s Tax Plan Could Bruise REITs “One of the investment vehicles that could be significantly impacted by these tax shakeups is the real estate investment trust, or REIT. REITs do not pay corporate tax and in exchange are required to pay out 90 percent of their returns to stockholders, mostly in the form of dividends. Because of that tax-exempt status, REITs offer yields that are higher than the average S&P 500 corporate stock. Their shareholders, however, pay ordinary income tax on those dividends, with a maximum rate of 39.6 percent under current law.” (The Real Deal)
Bankrupt Gander Mountain Acquired “The largest U.S. chain dedicated to recreational vehicles and a group of liquidations have come together to thrown a lifeline of sorts to outdoor retailer Gander Mountain. Camping World Holdings was chosen as the winning bidder at a bankruptcy auction for certain assets of Gander Mountain and its Overton’s boating business. Under the terms of the deal, Camping World, which is run by Marcus Lemonis, the host of CNBC TV's reality show ‘The Profit,’ is obligated to run 17 of Gander Mountain’s 160 stores as a going concern.” (Chain Store Age)
Commercial Real Estate Values Are on the Rise in Cleveland “Commercial real estate value is up across the board, both on the sales and leasing side, and in both the office and industrial sectors. In addition, land values have begun to rise as investors as well as users are more willing to put shovels in the ground and begin new rather than take on a property that has significant flaws. As the vacancy rate for the industrial market has dropped from more than 10 percent in 2008 and 2009 to 4.6 percent today, many of the more desirable buildings have come off the market.” (Smart Business)
Pay for news? More than half of Americans say they do — A battered news industry can find some flickers of hope in a survey that gauges public willingness to pay for journalism, as long as its leaders plan judiciously. A little more than half of American adults regularly pay for news, through newspaper and magazine subscriptions, apps on electronic devices or contributions to public media, according to the Media Insight Project, a collaboration between the American Press Institute and The Associated Press-NORC Center for Public Affairs Research.