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 wafted up and down through the day before ending at 2,399.38, up by just 0.09 of a point. The Dow Jones industrial average likewise edged up a fraction of a percent, adding 5.34 points to 21,012.28. The Nasdaq composite rose 1.90 points, or less than 0.1 percent, to 6,102.66.
Benchmark U.S. crude rose 21 cents to settle at $46.43 per barrel. Brent crude, the international standard, rose 24 cents to settle at $49.34 a barrel. Natural gas fell 9 cents to $3.17 per 1,000 cubic feet, heating oil rose 2 cents to $1.46 per gallon and wholesale gasoline added a penny to $1.52 per gallon.
Gov. Ducey: I've Got My Eye On Tucson -- ‘The nation’s eyes are on Tucson — and so are mine. This region and I have a long history, in and out of office. In the ’90s, Cold Stone Creamery — where I eventually served as CEO — opened its first license in Tucson, before we even began to franchise. In 2006, I had the great fortune of being named an Eller Entrepreneurial Fellow at the University of Arizona. And, while running for governor, I made it clear that my administration would focus on smart policies to unleash opportunities here. That’s what we’ve done for the past two years. We knew the Governor’s Office could do better. Juan Ciscomani, who oversees our Southern Arizona office, is a key member of my senior leadership staff who provides us with first-hand, on-the-ground insight into the unique issues affecting families in metro Tucson. Tucson and Arizona have made great progress since early 2015. We’ve cut taxes, removed and streamlined outdated regulations and generally made our region an easier place to find and create jobs.’
City Manager to submit recommended budget to Mayor and Council - Tucson City Manager Michael Ortega tomorrow will officially submit his recommended budget for the next fiscal year, which begins July 1. The proposed $1.373 billion spending plan for FY 17/18 is structurally balanced for the second consecutive year. Final adoption of the budget is set for June 6, and there will be two public hearings before that (May 23 and June 6).
Mayor and Council agenda materials: https://bit.ly/2pXyAiU; Budget calendar: https://bit.ly/2pdTpHU
Audit: RTA ‘On Budget and on schedule’ - A report commissioned by Arizona's Office of the Auditor General says the voter-approved Regional Transportation Authority (RTA) is generally delivering its projects within budget and on schedule. The 20-year RTA plan was approved by voters in 2006 and is slightly more than halfway through its lifespan. The report says the recession cut into the projected revenue for the RTA, but some projects have come in under budget and state and federal money also is covering part of the shortfall.Read the audit: https://bit.ly/2peoif2; RTA: https://bit.ly/1kaYAfx
Jared Kushner’s Sister Highlights Family Ties in Pitch to Chinese Investors “Jared Kushner has said that he has stepped away from the day-to-day business of his family’s real estate company while he serves as a senior adviser to his father-in-law, President Trump. But Mr. Kushner’s relatives are working feverishly to solicit overseas money for projects in the United States, and they are highlighting their ties to Mr. Kushner as they court investors. On Saturday afternoon, Mr. Kushner’s sister Nicole Meyer made a pitch to attract $150 million in financing for a Jersey City housing development, known as One Journal Square, to more than 100 Chinese investors gathered at the Ritz-Carlton Hotel in Beijing. The money would be provided through a much-criticized government program known as EB-5 that awards foreign investors a path to citizenship in exchange for investments of at least $500,000 in American development projects. Speaking in a ballroom, Ms. Meyer said the project “means a lot to me and my entire family.” She mentioned her brother’s service as chief executive of Kushner Companies, the family business from which he resigned in January, saying he had left to serve in the Trump administration.” (New York Times)
J.C. Penney buying back debt "J.C. Penney is buying back a total of $300 million of its notes due in 2018 and 2019. The Plano-based department store chain started a cash offer of the notes on Monday. Penney said the offer ends on June 5. Penney's offer includes a maximum of $75 million of the 2018 notes. Penney ended 2016 with $4.836 billion in total debt. During its turnaround the past couple of years, Penney has been lowering its debt from cash flow and the sale of real estate assets including its Plano headquarters.” (Dallas Morning News)
Welltower CEO Discusses ‘Most Compelling Real Estate Opportunity in Decades’ “Welltower Inc. (NYSE: HCN) sees big opportunities for medical office and senior housing real estate. In fact, the $2.75 billion sale of Duke Realty’s medical office building portfolio, announced this week, was a major topic of discussion Friday on Welltower’s first quarter 2017 earnings call. Thomas DeRosa, CEO of the Toledo, Ohio-based real estate investment trust, admitted that Welltower had been interested in the Duke portfolio. He called the sales process “the auctions of all auctions in the MOB space,” and elaborated on the synergies he sees between senior housing and medical office real estate. ‘We were certainly interested in that portfolio—I think everyone was interested in that portfolio,’ he said. The portfolio’s ultimate price indicates there were likely several players interested in the deal, which is ‘a positive for our industry and this property type,’ DeRosa added. Now, Welltower isn’t “sitting waiting for some big portfolio trade,” DeRosa said. ‘Not to say if one comes out we won’t be hanging around the hoop,’ DeRosa said.” (Senior Housing News)
Commercial real estate steady but future is uncertain say leaders “Domestic policy and geopolitics are concerning leaders in the commercial real estate sector. A study by The Real Estate Roundtable found that although current conditions are stable with slow, steady growth over coming months, there is less optimism about how things may play out in the longer term. "As the Trump Administration and Congress continue to consider ideas for tax reform, infrastructure investment and financial regulatory overhaul, The Roundtable's Q2 Sentiment Index is tempered by anticipation about what consequences the details of any eventual legislation could have on commercial real estate," said Roundtable CEO and President Jeffrey D. DeBoer.” (Mortgage Professionals America)
Commercial Real Estate Loan Delinquencies Rise Again “There is a slow creep in delinquent credit that is starting to get noticed. The special-servicing and delinquency rates for securitized commercial mortgages rose again last month, Commercial Mortgage Alert first reported. While the rise was reasonably contained, it is the trend of commercial underperformance that is causing a mild degree of concern. The data on Commercial Real Estate comes as investors are closely watching the prospects for retail malls across the country.” (Value Walk)
Fed's Mester Warns Against Falling Behind With Rate-Hike Pace “Federal Reserve Bank of Cleveland President Loretta Mester said the central bank should continue on its gradual path of raising interest rates to prevent the risk of overheating the U.S. economy. ‘It’s important for the FOMC to remain very vigilant against falling behind as we continue to make progress on our goals,’ Mester said in the text of a speech Monday in Chicago, referring to the policy-making Federal Open Market Committee. ‘If we delay too long in taking the next normalization step and then find ourselves in a situation where the labor market becomes unsustainably tight, price pressures become excessive and we have to move rates up steeply, we could risk a recession,’ she said.” (Bloomberg)
These Cities Are the 10 Biggest Comeback Stories in U.S. Real Estate “The path to housing recovery has not run smoothly across the United States. Some cities have rebuilt and recovered. Some are back even stronger than they were in their heady, pre-crash salad days. And yet others continue to flounder, plagued by swaths of bank-owned homes.” (Realtor.com)
$150M Live! by Loews Hotel Coming to Texas in 2019 “Loews Hotels & Co., The Cordish Cos., and the Texas Rangers unveiled the plans for a hotel and convention center at Texas Live. The $250 million dining, entertainment and hospitality destination is being developed in partnership between the three companies and the city of Arlington, Texas. The new $150 million flagship hotel, Live! by Loews – Arlington, Texas, will be the first of its kind in the country, providing guests an experience that blends sports and entertainment with hospitality and amenities. Texas Live!, anchored by Live! by Loews, is a part of a $4 billion vision for the Arlington Entertainment District that includes the Rangers’ new $1 billion ballpark and preservation of Globe Life Park. Designed by HKS Architects, the 14-story, 302-key glass tower will feature several unique resort-style spaces and amenities. These include an event lawn, an outdoor infinity edge pool with two bars, private cabanas, lounge space and fire pits, a rooftop terrace and a two-story, 35,000-square-foot Grand Event Center that will include a ballroom that seats 1,500 people and an executive boardroom with five meeting rooms. The hotel will also offer the Revolver Brewing Brewery Bar and Tasting room, a 6,000 square-foot signature restaurant, a state-of-the-art fitness facility, a porte-cochere entrance with 24-hour valet services and coffee bar.” (Commercial Property Executive)
City taps developers for 100% affordable Far West Side project “The New York City Economic Development Corporation selected the partnership of Radson Development and Kingspoint Heights Development to build a mixed-use complex with 200,000 square feet of office space and 234 completely affordable apartment units on a city-owned site on the Far West Side. The Long Island-based Radson, which focuses on affordable housing in the Bronx, and Kingspoint submitted the winning proposal to develop the mixed-use tower on the site of a New York Police Department parking lot at 495 11th Avenue, the Wall Street Journal reported. The EDC in August 2015 sent out a request for proposals for the site as part of Mayor Bill de Blasio’s goal to build 80,000 units of affordable housing and preserve another 120,000 units. Radson and Kingspoint submitted a plan to build 200,000 square feet of office space, 80,000 square feet of dorms, a 12,000-square-foot grocery store and a parking facility for the police department. The commercial space will subsidize the affordable apartments.” (The Real Deal)
Berkeley Point Provides $2.2B in Financing For Starwood-Milestone Deal “Berkeley Point Capital has provided Starwood Capital Group with $2.22 billion in acquisition financing as part of Starwood Capital Group’s purchase of Milestone Apartments Real Estate Investment Trust. That deal was via a public-to-private transaction announced by the REIT at the end of April. In that deal, Starwood—which is privately held—acquired all of Milestone’s subsidiaries and assets. Milestone was formerly a public REIT trading on the Toronto Stock Exchange. Starwood currently has about $51 billion in assets under management. Berkeley Point provided financing on 74 of the assets, built between 1974 and 2016, and containing nearly 23,000 units. The majority of them are located in Texas and Florida, with the rest scattered across other states, including Arizona, California, Colorado, Georgia, Maryland, North Carolina, Tennessee and Utah.” (MultiHousing News)