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.
Friday, the Dow Jones industrial average fell 16.64 points, or 0.1 per cent, to 18,145.71. The Standard & Poor’s 500 index slipped 0.18 points, or 0.01 per cent, to 2,141.16. The NASDAQ composite index gained 15.57 points, or 0.3 per cent, to 5,257.40. In other U.S. energy futures trading, wholesale gasoline added 4 cents to $1.53 a gallon, while heating oil gained a penny to $1.57 a gallon. Natural gas lost 15 cents, or 4.7 per cent, to $2.99 per 1,000 cubic feet.
Starbucks Opening up to 1,000 Reserve Cafes in Bid to Go Upscale “Starbucks Corp. plans to open as many as 1,000 locations of a new upscale chain that will tout its premium Reserve coffees, escalating an effort to reach more sophisticated customers. The world’s biggest coffee-shop operator had previously set a target of 500 globally for the Reserve chain, which hasn’t rolled out yet. The first location, scheduled to open next year, will sell more expensive small-lot coffee, along with food from Starbucks’ Italian bakery partner, Princi. The push is part of a move by Starbucks to add different store concepts around the world. It’s also opening giant locations known as Roasteries, which offer tastings and spotlight its premium coffee and the roasting process. The company announced plans on Thursday to open its next Roastery in Tokyo, following a location in Seattle and planned sites in Shanghai and New York.” (Bloomberg)
US internet repeatedly disrupted Friday by cyberattacks on key firm — Cyberattacks on a key internet firm repeatedly disrupted the availability of popular websites across the United States Friday, according to analysts and company officials. The White House described the disruption as malicious. Dyn Inc. said its server infrastructure was hit by distributed denial-of-service attacks, which work by overwhelming targeted machines with junk data traffic. The attack had knock-on effects for users trying to access popular websites from across America and Europe, including Twitter, Netflix and Sony’s PlayStation Network.
6 Reasons To Invest In Multifamily Real Estate “With interest rates at historic lows and a strong rental market encompassing much of the country, people are investing in real estate. Many investors automatically think “single-family home” when they set out to buy a property, and while this may be a smart move in cities where the rental market is hot, like Austin, TX, or Provo, UT, there are definite advantages to buying multifamily real estate that should not be overlooked.” (Yahoo)
$47 billion offer to create world’s biggest tobacco company— British American Tobacco has offered to buy out Reynolds American Inc. for $47 billion in an attempt to gain a strong presence in the U.S., a lucrative market where sales of electronic cigarettes are booming as traditional smoking fades. The takeover would create the world’s largest publicly traded tobacco company and combine BAT’s presence in developing countries, where anti-smoking campaigns are not as strong as in the U.S. and Europe, with Reynolds’ almost exclusive focus on the U.S. (LONDON AP)
Economy Watch: Apartment Sector Slows in 3Q “Though the multifamily sector still has a lot of momentum in some of the hotter markets (Seattle, Denver or Nashville, for instance), nationwide the property type, so hot for so long, is at least taking a pause. According to NMHC’s October 2016 quarterly survey, apartment markets softened during the third quarter. All four of the indexes that the NMHC publishes quarterly were down compared with the second quarter; Its Market Tightness, Sales Volume, Equity Financing and Debt Financing indexes all landed below the breakeven level of 50—showing weaker conditions from the previous quarter. The Market Tightness Index fell to 28, the lowest since July 2009, and the fourth quarter in a row showing declining conditions. Almost half of respondents (49 percent) to the survey reported looser conditions than three months ago. The Sales Volume Index decreased from 50 to 42, signifying lower overall sales volume. Sixteen percent of respondents reported higher sales than three months prior, compared to 33 percent that reported lower sales volumes.” (MultiHousing News)
Most EB-5 funds go to gerrymandered districts: fed gov’t study “The overwhelming majority of EB-5 funding goes into gerrymandered districts where affluent neighborhoods are combined with high-unemployment areas that qualify for the program, a new study shows. The study, released Wednesday by the U.S. Government Accountability Office, is the first attempt by the federal government to quantify claims of abuse critics have lobbed at the visas-for-dollars program, which is set to expire in December as lawmakers debate its future. Conducted over a three-month period last year, the study found that 90 percent of EB-5 funds went to gerrymandered districts made up of two census tracts stitched together, and in some cases more than 100, the Wall Street Journal reported. EB-5, a low-cost source of financing for developers, allows projects to stitch together areas of low unemployment with affluent neighborhoods, one of the main points of criticism in the debate. The program allows investors to get a green card in exchange for investing at least $500,000 in U.S. businesses that create jobs.” (The Real Deal)
New LEED Version to Spur Green Building “Green energy continues to advance, with a major milestone set for Nov. 1. That’s when the U.S. Green Building Council unveils its new version of the 16-year-old Leadership in Energy and Environmental Design certification program that created an international standard for sustainable buildings and communities. The new version raises the bar on increasing energy efficiency and covers more sectors, like data centers. The new version of the LEED certification program, v4, becomes the primary version and ‘pushes the green building industry forward in a way that no previous iteration of LEED ever has,’ said Corey Enck, vice president of LEED technical development at the USGBC. Since it was unveiled in 2000, LEED has become an international standard, certifying hundreds of thousands of square feet per day. As of July, more than 80,100 total commercial and LEED ND (neighborhood development) projects have been certified.” (Commercial Property Executive)
San Diego medical marijuana landlord files for IPO “A nascent San Diego real estate firm that aims to own buildings used to grow medical marijuana has filed to become publicly traded on the New York Stock Exchange. Innovative Industrial Properties, lead by former BioMed Realty Chief Executive Alan Gold, submitted its prospectus Monday to the U.S. Securities and Exchange Commission. Founded in June, the company is seeking to sell 8.75 million shares at around $20 each for net proceeds of $175 million, according to the prospectus. Innovative Industrial plans to use the money to buy 10 to 20 indoor grow facilities for state-licensed medical marijuana producers in nine states, including California. These early IPO financial estimates are often revised before the company actually goes public, based on the interest of institutional investors.” (The San Diego Union Tribune)
Bombardier to cut 7,500 jobs globally over the next 2 years — Bombardier will cut 7,500 jobs around the world over the next two years as it tries to turn around its business. The airplane and train maker said Friday that the reductions are part of a plan to restore it to profitability by 2020. Its plans to eliminate 7,500 positions — more than 10 per cent of its global workforce — through the end of 2018, are on top of 7,000 positions Bombardier already planned to eliminate by the end of 2017. (MONTREAL AP)
Miami condo tower will pour 52 million pounds of concrete for foundation “More than a decade after proposing the massive, mixed-use project known as Miami Worldcenter, developers are laying the foundation for a 60-story luxury condo tower in downtown’s derelict Park West district. One hundred trucks and more than 700 construction workers will start pouring an estimated 52 million pounds of concrete for the high-rise, called Paramount Miami Worldcenter, at 1 a.m. Saturday morning. General contractor CoastalTishman will perform the 30-hour pour. In a statement, developer Daniel Kodsi called the milestone ‘a very proud moment in the evolution of the city as our tower and neighborhood fulfill its potential to become a gleaming global landmark for the city of Miami.’” (Miami Herald)
Sentinel to sell Washington Heights portfolio for $102M “A group of real estate investors led by Joshua Sternhell and Mike Spira is in contract to pick up five Washington Heights rental buildings known as the Fort Riverside portfolio from Sentinel Real Estate Corporation for $101.5 million, or about $300 per square foot, sources told The Real Deal. The six-story elevator buildings contain 289 apartments and span 341,148 square feet. They are spread along Fort Washington Avenue and Riverside Drive. The package also includes a combined 199,000 square feet of air rights. The addresses are 66-72, 80 and 86 Fort Washington Avenue and 838 and 884 Riverside Drive. Of the 289 apartments, 104 are renovated. About 62 percent of the apartments are rent-regulated and rent for about 50 percent of the market rate at $20 per square foot, according to an offering memorandum. Together, the buildings generate $5.8 million in annual revenue and $3.4 million in net operating income, the memo shows.” (The Real Deal)
Ireland to hit foreign investors with new tax on real estate deals “Non-resident investors in Irish real estate funds will have to pay a 20 percent withholding tax from next year, the finance ministry said on Thursday, in a further clamp down on structures used to minimise tax bills on property transactions. Ireland last month proposed to amend tax laws for so-called ‘Section 110’ special purpose vehicles and widened the net on Thursday to include all funds where 25 percent of their value is made up of Irish real estate assets. Such a change targets two other popular types of funds used by foreign investors to buy up swathes of Irish property in recent years: Irish Collective Asset-management Vehicles (ICAVs) and Qualifying Investor Alternative Investment Funds (QIAIFs). The new withholding tax will not apply to certain categories of investors such as pension funds, life assurance companies and other collective investment undertakings, the finance ministry said in a statement.” (Reuters)
McDonald’s sales rise 1.3 per cent at US stores — The launch of all-day breakfast helped McDonald’s record higher sales at established U.S. locations for a fifth straight quarter, but the boost from that is shrinking and the company is hoping new menu items and recipe tweaks will keep customers coming back. McDonald’s said sales rose 1.3 per cent at established U.S. locations in the third quarter, matching what Wall Street analysts expected. That’s down from the 1.8 per cent rise the world’s biggest burger chain reported in the previous quarter. Worldwide, sales grew 3.5 per cent at established locations, far exceeding the 1.3 per cent growth analysts were expecting, according to FactSet.
Let’s toast: Jim Beam strike ends with promise to expand— Jim Beam ended a nearly week long strike at two bourbon distilleries in Kentucky on Friday, toasting a labor settlement that answers the workers’ key demand with a commitment to hire more full-time staff. Union members picketing since last Saturday approved the company’s latest contract offer on a 204-19 vote and will resume producing whiskey Monday, said United Food and Commercial Workers union official Tommy Ballard. (LOUISVILLE, Ky. AP)
Canada walks out as EU trade talks founder— Canada walked out of talks Friday meant to save a massive trade deal with the European Union, unable to break a deadlock with a small Belgian region that has been defying multinational efforts to have the pact signed next week. Canadian International Trade Minister Chrystia Freeland said it had been impossible to overcome the differences with Wallonia, a French-speaking region of barely 3.5 million people. Despite the stunning setback, European officials refused to accept that the pact, which had been agreed on provisionally two years ago, could not be saved. The impasse, however, raises troubling questions about the 28-nation EU’s ability to negotiate major international agreements. (BRUSSELS AP)
Walmart invests $50M in China’s online grocery business— Wal-Mart is investing $50 million in New Dada, China’s largest online grocery and logistics company, as it moves to strengthen its foothold in the nation’s fiercely competitive food market.The move, announced late Thursday, is an extension of Wal-Mart’s pact with JD.com, China’s no. 2 e-commerce site. New Dada, partly owned by JD.com, has more than 25 million registered customers and delivers to more than 300 cities. China is a key growth market for Wal-Mart. (NEW YORK AP)