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 Dow Jones industrial average gained 75.54 points, or 0.4 per cent, to 18,161.94. Standard & Poor’s 500 index rose 13.10 points, or 0.6 per cent, to 2,139.60. The NASDAQ composite index added 44.01 points, or 0.9 per cent, to 5,243.84.
U.S. benchmark crude oil rose 35 cents, or 0.7 per cent, to close at $50.29 a barrel in New York. Brent crude, the international standard, gained 16 cents, or 0.3 per cent, to close at $51.68 a barrel in London. Wholesale gasoline inched up a penny to $1.51 a gallon. Heating oil was little changed at $1.57 a gallon. Natural gas rose 2 cents to $3.26 per 1,000 cubic feet.
US homebuilders’ confidence eased slightly this month after surging to the highest level in nearly a year in September. Even so, builders remain optimistic overall about sales growth in months ahead, a reflection of how steady job gains are leading more Americans to buy newly built homes. The National Association of Home Builders/Wells Fargo builder sentiment index released Tuesday fell two points this month to 63 following a reading of 65 in September. Readings above 50 indicate more builders view sales conditions as good rather than poor. The index has held above 60 the past two months after hovering at 58 earlier this year.
US consumer prices rose in September on higher oil costs — Higher energy costs fueled U.S. consumer prices in September, but overall inflation remained in check as it has for the past several years. The Labor Department said Tuesday that consumer prices increased 0.3 per cent last month. Much of that rise stemmed from energy, housing and prescription drugs. Energy costs surged 2.9 per cent in September as oil and gasoline prices rebounded from recent lows. Previous price declines still mean that gas costs 6.4 per cent less than a year ago. Inflation has stayed relatively low despite job growth that has brought more workers into the economy. Until last month, the modest levels of inflation largely came from muted oil prices and a stronger dollar. (WASHINGTON AP)
Institutional Investors Eye More Real Estate, Despite Global Uncertainty “The world’s institutional investors are continuing to up their allocations to real estate despite dropping confidence in the market. Average target allocations to real estate among investors will hit 10pc next year for the first time, according to a major new study by real estate advisory firm Hodes Weill and Cornell University, equating to more than €1 trillion. In 2016, average target allocation to real estate was 9.9pc, rising to an estimated 10.3pc next year. Over the past four years, the target has risen 100 basis points.” (The Telegraph)
Gas, Housing Drive Fastest Rise in Inflation in Months “More expensive gas and rising housing costs boosted consumer inflation in September by the largest amount in five months, keeping the Federal Reserve on the cusp of raising U.S. interest rates. The consumer price index climbed 0.3% last month, the government said Tuesday. That matched the forecast of economists polled by MarketWatch. The cost of shelter — rent, new homes and previously owned homes — rose at the fastest pace since May. Energy prices, mainly gas, also posted the biggest increase since early spring.” (MarketWatch)
Supervalu to Sell Save-a-Lot for $1.4 Billion “Minneapolis-based grocery chain Supervalu said Monday that it had reached a deal to sell grocery discount chain Save-A-Lot to a private equity investor. Onex Corp. agreed to pay $1.4 billion in cash for Save-A-Lot, which owns 472 stores and licenses naming rights and supplies another 896 locations. Supervalu, which has 3,342 stores, including the Save-A-Lot locations, said it would use the cash from the transaction to pay down debt.” (USA Today)
Miracle Mile Sale Points to Bull Strip Real Estate Market “The sale of a prominent Strip shopping mall is proof, one local real estate professional said, that the smart money is now ready to bet on resort real estate in Las Vegas. Boulevard Invest LLC, the owners of the Miracle Mile Shops at Planet Hollywood, confirmed Monday that the mall was sold to Institutional Mall Investors LLC. The sales price was not disclosed. The 500,000-square-foot complex opened in 2000 as Desert Passage and became the Miracle Mile Shops when the Aladdin was rebranded as Planet Hollywood in 2007.” (Vegas Inc.)
Apple Retail Chief Angela Arendt on Turning Stores Into Town Squares “Apple’s retail chief Angela Ahrendts has spent the past two years revamping the technology company’s retail stores, where it sells iPhones, iPads, Macs, and Watches. That’s no small business—there are nearly 500 Apple stores worldwide, and retail sales are responsible for some 18% of the company’s $233.7 billion in sales, amounting to $42 billion in yearly revenue. But Ahrendts views the company’s newly redesigned retail outlets not just as stores, but as the company’s next big products.” (Fortune)
At the Low End, Homeowners Are Even More Leveraged Than They Were During the Bubble Era “Ever since the shock of the financial crisis ebbed and buyers began to return to the housing market, one truth has dominated: mortgage lending is tight. But is it? It’s true that only the borrowers with the highest credit scores get home loans now. So much lending to people with higher credit scores and so little to those on the lower end of the spectrum has shifted the average FICO score up about 40 points since before the bubble burst. But measured in another way, lending is shockingly loose.” (MarketWatch)
How to Value Boston’s Faneuil Hall and Other Questions Fintech Could Answer “Ryan Williams surveys the room: how many people could put a price tag on this building? A few hands shoot up but most do not. ‘We are focused on making anyone an institutional investor,’ says Williams, founder and CEO of real estate investment platform Cadre. ‘Our goal is for anyone to be able to access, invest [in], understand real estate. It’s important because real estate is the single most important asset for building multi-generational wealth.’ His question, it turns out, is a bit of trick.” (Forbes)
San Francisco is Greenest U.S. Office Market in 2016 “According to the third annual Green Building Adoption Index Study by CBRE Group, Inc. and Maastricht, institutional owners of office buildings continued to pursue green building certifications in the 30 largest U.S. markets during 2015. Continuing an upward trend over the past decade, green certifications are now held by 11.8 percent of all surveyed buildings, representing 40.2 percent of all office space. Both figures are slightly above last year's results.” (World Property Journal)
Allianz Secures Stake in Park Place Mixed-Use Campus “Allianz Group now owns a 45 percent stake in one of Orange County’s most high-profile office assets. The company acquired an interest in the Park Place office campus through local subsidiary Allianz Real Estate of America. Following the deal, Allianz joins LBA Realty and Principal Real Estate Investors in a joint venture. The Park Place mixed-use asset offers a total of 2.7 million square feet of office and retail space. Allianz’s stake concerns six assets that make up the office campus, the two towers located at 3121 and 3333 Michelson Drive, as well as the retail center.” (Commercial Property Executive)
What You Need to Know About Restrictive Use Clauses “For retail tenants and landlords alike, use and exclusive use clauses, which refer to the terms written into a lease that dictates what is and is not permitted by both parties, are a critically important part of the tenant-landlord relationship and lease negotiation process. It is also a potentially contentious subject that will not only affect a retailer’s operational specifics, but can have a profound impact on the bottom line.” (Chain Store Age)