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 added 35.68 points, or 0.2 per cent, to close at 18,903.82. The Standard & Poor’s 500 index rose 10.18 points, or 0.5 per cent, to 2,187.12. The Nasdaq composite added 39.39 points, or 0.7 per cent, to 5,333.97.
Benchmark U.S. crude slid 15 cents to $45.42 a barrel in New York. Brent crude, which is used to price international oils, slipped 14 cents to $46.49 a barrel in London. In other energy trading, wholesale gasoline rose 2 cents to $1.34 a gallon. Heating oil rose 1 cent to $1.45 a gallon. Natural gas fell 6 cents, or 2.2 per cent, to $2.70 per 1,000 cubic feet.
Tucson Council meeting signals imminent Raytheon announcement — There is only one thing on the agenda for an emergency Tucson City Council meeting set for Friday morning — Raytheon Missile Systems. The council is expected to head into a closed-door meeting with its lawyers, apparently to discuss economic development incentives for a major expansion expected by the region’s largest private employer. Details of incentives have not been disclosed. Closed-door meetings are legally allowed for negotiating economic incentives. The state is also reportedly offering financial incentives to encourage Raytheon’s expansion in Tucson. Two county officials recently confirmed Raytheon is considering a major expansion of its Tucson manufacturing operations that could create nearly 2,000 new jobs with high-paying salaries. The company has major manufacturing operations at its headquarters site adjacent to Tucson International Airport and at the University of Arizona Tech Park on South Rita Road. Officially, the executive session is about an amendment to a pre-annexation and incentives agreement the city has with Raytheon. (Tucson.com)
El Tour de Tucson America’s Largest Perimeter Bicycling event this Saturday is for cyclists of all ages and abilities who ride 106, 76, 54, 37 or 28 (NEW!) miles or 11, 5 or 1/4 miles in the Fun Ride or for minutes not miles in Indoor El Tour. In 2016 the route has significant changes from 2015! Have fun, ride your bike, stay safe and join us on Saturday November 19, 2016! Stay up to date on all El Tour information and see routes map here http://www.perimeterbicycling.com/el-tour-de-tucson/maps/
Tucson Roadrunners return home Friday – The AHL’s Tucson Roadrunners return to the Tucson Arena this Friday to face off against the Manitoba Moose. The puck drops at 7:05 p.m. If you haven’t been to a hockey home game yet, Tucson 12 has a video to show you what you’ve been missing. Take a look by following the link below.Tucson Roadrunners: http://bit.ly/2dCjdqn
Attend a Town Hall on propose tax increase for Tucson’s future – As part of an ongoing discussion regarding Tucson’s future, the City of Tucson is holding a series of town halls where the public can get information, provide input, and have questions answered about a possible sales tax question that could go to City voters in May 2017. The City’s proposal is tentatively for a half-cent City sales tax increase to fund equipment and facilities for the Tucson Police and Tucson Fire departments and to continue the Tucson Department of Transportation’s Road Recovery program to repair major and neighborhood streets. The first town hall will be held tomorrow at 5:30 p.m. at the William M. Clements Center, 8155 E. Poinciana Drive. Another town hall will be held this Thursday at 5:30 p.m. at the Ward 6 Office, 3202 E. 1st St. The final meeting will be next Monday at 5:30 p.m. at El Pueblo Senior Center, 101 W. Irvington Road. If you can’t attend a meeting and have a question, please email email@example.com. See the flier: http://bit.ly/2fuWYU1
Target opening in Camelback Corridor — Target Corp. will open its first Arizona “flexible-format” store on Camelback Road in Phoenix next year, reports The Arizona Republic. The retailer, which already operates a number of stores across the Valley, will take over a recently shuttered Sports Authority space at 16th Street and Camelback Road in Phoenix. Target’s (NYSE: TGT) flexible-format locations are smaller than standard Target stores and are often located in densely populated or urban areas and college campuses. The Phoenix store will be 50,000 square feet and will include clothing, beauty items and cosmetics, fresh groceries, baby products, home goods, tech products and Target Mobile and order pickup services. The average Target store is about 140,000 square feet, spokeswoman Kristy Welker said in an email.
The Cheesecake Factory Inc. is making minority equity investments in two Fox Restaurants Concepts North Italia and Flower Child, the companies said Monday. Calabasas Hills, Calif.-based Cheesecake Factory, under the terms of the agreements, is making initial minority equity investments in the two concepts and will provide ongoing growth capital. Phoenix, Ariz.-based Fox Restaurants will continue to manage the day-to-day operations, and the agreements allow for The Cheesecake Factory to acquire a future majority or full ownership position in either or both concepts.
Goldman Sachs Sees Trump Leading to More Aggressive Fed, ‘Ambiguous” Growth Outlook “Goldman Sachs economists expect Donald Trump’s economic agenda to lift inflation and interest rates. They expect to see a more aggressive Fed. They also initially expect higher growth thanks to a Trump plan to spend on infrastructure — bumping their forecast for U.S. GDP growth in the second half of 2017 by a quarter point. But they also described the effect of Trump’s economic plans as ‘ambiguous.’” (CNBC)
Yellen says she isn’t going anywhere when Trump takes office — Federal Reserve Chair Janet Yellen appears unruffled by incoming President Donald Trump’s victory last week. Her remarks to Congress Thursday suggest that the central bank is on track to raise interest rates at its meeting in December, one month before Trumps takes office. She said she has no plans to step down before her four-year term ends on Feb. 3, 2018, reiterated the Fed’s political independence and vigorously defended tougher bank regulations established in the wake of the financial crisis. An improving U.S. economy has bolstered the case for raising interest rates, Yellen told Congress’ Joint Economic Committee. (Fortune)
Commercial Real Estate Faces Strong Headwinds “According to Moody’s Investors Service, as reported by the Wall Street Journal, the current 60-day delinquency rate on the approximately $390 billion worth of commercial real estate mortgages that have been packaged into securities sits at 5.6%, which is already up one full percentage point from earlier this year. The future is not looking much brighter. The delinquency rate is likely to get worse rather than better in the coming years as the wave of lending that took place in 2006 and 2007, just prior to the financial crisis, is about to see the day of reckoning.” (Investopedia)
Target Planning ‘Hundreds’ of Small Stores “Target (TGT) CEO Brian Cornell said Wednesday that he’s “increasingly confident” the company will open “hundreds” of small-format stores, reshaping the big-box chain’s image and real estate footprint. ‘We think we have the opportunity to enter many, many new neighborhoods,’ Cornell said on a conference call. Target is currently operating nearly 30 small-format locations, including a new 45,000-square-foot store in Manhattan’s hip Tribeca neighborhood, where the retailer hopes to glean lessons it can apply to future stores.” (USA Today)
Brookfield Place Owner Looking to Sell Stake for $2.45B “Brookfield Property is seeking to sell a 49 percent stake in downtown’s Brookfield Place for around $2.45 billion, or $625 per square foot. Eastdil Secured has been tapped to market the minority interest in the Brookfield Place complex which includes five office towers, the Winter Garden and a revamped retail complex with a Saks Fifth Ave. store and a successful food market and dining area, according to Real Estate Alert. Two years ago, Brookfield Chief Executive Ric Clark told analysts the company wouldn’t consider a sale until after its now-completed $250 million redo ‘for fear of leaving way too much money on the table.’” (New York Post)
The Tallest Modular Apartment Building in the World Just Opened in New York City—Take a Look Inside “461 Dean, a 32-story apartment complex in Brooklyn, is the newest residential tower in New York City to feature modular construction. It’s now considered the tallest modular tower in the world. The apartments’ pre-fabricated rooms fit and lock together like a puzzle pieces. The modules were placed by cranes to create the building. Its developer, Forest City Ratner Companies, built 90% of 461 Dean in its factory at the Brooklyn Navy Yard. That allowed them to save 20% on construction costs.” (Business Insider)
Rent-the-Runway to Open Neiman Marcus Stores-Within-Stores as Startup Surpasses $100M Annual Sales “Rent the Runway is set to open its first store-within-a-store inside Neiman Marcus’ Union Square, San Francisco location as part of a new partnership between the fashion tech startup and the luxury retailer. The move sees Neiman Marcus allowing an ostensible competitor 3,000 square feet to rent apparel and accessories to a demographic it has struggled with: millennial women. It also allows Rent the Runway, with its median customer age of 30, to get in front of an older, wealthy clientele.” (Forbes)
How Will New Risk Retention Regulations Impact the CMBS Market? “With less than two months to go before CMBS issuers will have to keep a portion of the loans they provide on their own balance sheets, market preparations are in full swing. The new federal rules on risk retention will be in effect starting Dec. 24, and while some issuers are testing strategies to adapt, others fear these rules could be the end of their businesses. Commercial Property Executive discussed the effects of the new regulations with Lauren Cerda, senior director at Fitch Ratings.” (Commercial Property Executive)
Concrete Jungle Where Loans Are Made: NYC Lenders Talk Relationships “Jonathan Mechanic, the chairman of Fried, Frank, Harris, Shriver & Jacobson’s real estate department, didn’t waste any time as moderator, quizzing the industry experts on the presidential election’s impact on the commercial real estate sector. Ralph Herzka, the chairman and chief executive officer at brokerage Meridian Capital Group, said that while the world may believe that banks will come out on top with Trump as president, ‘We’re in the middle of the storm. We just need to let the dust settle and we’ll figure it out.’” (Commercial Observer)