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 Dow Jones industrial average gained 110.94 points, or 0.6 per cent, to 18,339.24. The Standard & Poor’s 500 index climbed 11.44 points, or 0.5 per cent, to 2,171.37. The Nasdaq composite picked up 12.84 points, or 0.2 per cent, to 5,318.55.
Benchmark U.S. crude jumped $2.38, or 5.3 per cent, to $47.05 a barrel in New York. Brent crude, the international standard, rose $2.72, or 5.9 per cent, to $48.69 a barrel in London. Wholesale gasoline jumped 8 cents, or 6 per cent, to $1.48 a gallon. Heating oil gained 8 cents, or 5.8 per cent, to $1.49 a gallon. Natural gas fell 4 cents to $2.95 per 1,000 cubic feet.
PhoenixMart Installation of Underground Pipe and Electrical Work Near Completion – PhoenixMart has announced that completion of the underground pipe and electrical work will pave the way for an exciting October. Portions of the footprint are already being back-filled and prepped for the initial pouring of the concrete slab. Throughout next month many important activities will commence; including the pouring of the slab, erection of steel support structures and tilting of the building’s walls.
Retailers Support House Vote to Push ‘Pause’ on Career-Killing Overtime Rules -The National Retail Federation praised today’s House passage of legislation that would delay the Labor Department’s expansion of overtime rules for six months. Prior to the vote, NRF told lawmakers in a letter that action on the legislation would be included in its annual voting scorecard. “Lawmakers from both parties recognize that the administration’s radical changes to overtime rules are too much, too fast,” NRF Senior Vice President for Government Relations David French said. “With the December 1st compliance deadline looming, the window for congressional action is quickly closing. Pushing pause on implementing these one-size-fits-all regulations would provide welcome breathing room for retailers large and small struggling to comply with the changes during the holidays, their busiest time of the year. We urge the Senate to help millions of employers and employees by stepping in to help fix or delay the overtime rules." The Regulatory Relief for Small Businesses, Schools, and Nonprofits Act approved today would give employers an extra six months to come into compliance with new overtime rules that are set to take effect December 1 by pushing the deadline to June 1, 2017. The new regulations will require employers to pay overtime to most workers who make up to $47,476 per year when they work more than 40 hours a week, more than double the current threshold of $23,660. Despite the dramatic increase, a recent survey by human resources company Paychex Inc. found that 49 percent of business owners polled were unaware of the change. (NRF)
Yellen says rate hike likely appropriate this year — Federal Reserve Chair Janet Yellen said Wednesday that the central bank has no “fixed timetable” for raising interest rates but she believes the economy is ready for a rate hike by the end of the year. She said during an appearance before the House Financial Services Committee that when the Fed met last week, a majority of her colleagues believed it would be appropriate to raise rates before the end of this year. The Fed boosted its key policy rate in December 2015 to a range of 0.25 per cent to 0.5 per cent. But since then, officials have left the rate unchanged.
Low Interest Rates Have Created New Housing Bubble, Says UBS “Housing bubbles are inflating in major cities around the world, with Vancouver and London most at risk, according to Swiss lender UBS Group. Ultralow interest rates at global central banks have contributed to overheating in the housing market in recent years, the report from UBS Wealth Management said Tuesday. Vancouver and London came first and second on the 2016 list of cities most at risk of real estate bubbles. Bubble risk was also evident in Stockholm, Sydney, Munich and Hong Kong, UBS said. House prices in all these cities have increased by nearly 50% on average since 2011. The average price rise in other financial centers has been less than 15%. Loose monetary policy at global central banks is a key driver behind rising prices, the report said. Low interest rates have pushed investors to hunt for returns in tangible assets, ‘so it is hardly any wonder that housing markets are again overheating,’ according to report authors Claudio Saputelli and Matthias Holzhey.” (The Wall Street Journal)
Here Are 4 Factors to Watch for as Walmart Continues Its Rebound “The entire brick-and-mortar retail sector has been severely affected by the rise of ecommerce superstar Amazon, and Walmart (WMT) has been no exception. Up nearly 18% year to date, the mega-retailer's shares have actually come close to the 19% returns delivered by Amazon. None of the other brick-and-mortar stores, such as Costco (down 5.17%) or Target (down 5.58%), have shown signs of sustainable recovery. Are Walmart's recent gains a sign of things to come? Or are they just a mirage before the company's final meltdown?...As supermarkets and even dollar stores lose their luster, Walmart's diversified business has been gaining back favorable investor interest.” (The Street)
Q&A with Daniel Farber, Executive VP at HLC Equity "Multifamily assets have become the crown jewel of the real estate market recently, thanks to their long-term stability and growth potential. HLC Equity is one of the companies that adapted to the current shifts in the industry and is now allocating significant resources to their newly opened multifamily portfolio." (MultiHousing News)
Asking Prices of Apartments and Condos in the First Quarter of 2016 “The NAHB's Carmel Ford sifts through the Survey of Market Absorption, a joint venture between the Department of Commerce, HUD and the Census Bureau, which shows the median asking price for a rental hasn't changed significantly over the last year. In the first quarter, the median asking price was $1,426, down slightly from the fourth quarter's $1,442 but a bump up year-over-year of about $12. Rents were highest in the Northeast, the data show, where median asking prices were $1,839, followed by the West, where median asking rents were $1,692.” (Multifamily Executive)
ICS-see you later, Giuliani “What a difference two years can make. The International Council of Shopping Centers, which paid Donald Trump $50,000 to give the keynote speech at its New York City conference in 2014, has booted former Mayor Rudolph Giuliani as this year’s top speaker over his support for the controversial presidential candidate. ICSC has decided to replace the city’s 107th mayor with Kevin Plank, CEO of the sports apparel retailer Under Armour, at the December expo after receiving letters from industry professionals calling on the council to dump Rudy over his vocal support for Trump, the Commercial Observer reported. ‘We shouldn’t bring politics into it,’ said a broker who requested to remain anonymous. ‘We should have someone more open-minded and who is for globalization and not for stopping trade, etc.’” (The Real Deal)
Sterling Bay wins lawsuit over Burr Ridge office project “A judge has sided with Chicago developer Sterling Bay in a five-year legal dispute with a partner in a Burr Ridge medical office project, but the battle may not be over. After a short trial, Cook County Circuit Court Judge Elizabeth Budzinki ruled earlier this month against Blackrock Medical, the partner, over a lawsuit it filed in 2011 alleging that Sterling Bay had stiffed it on $650,000 in payments from a refinancing of the Burr Ridge property, known as the Loyola Center for Health at Burr Ridge. The project at 6800 N. Frontage Road turned out to be a success—a Sterling Bay-Blackrock venture sold it in 2012 for $47.8 million, nearly 60 percent more than its $30 million construction cost—but the legal battle dragged on. Sterling Bay even hit back with a defamation suit in January accusing Blackrock and its leader, Dr. Joseph Sheehan, of extortion and calling the earlier complaint ‘a transparent display of opportunistic greed.’ That case was dismissed earlier this year.” (Crain’s Chicago Business)
Comeback kids: Related, Vornado win bid for Moynihan Station “After being kicked off the Moynihan Station project earlier this year, the Related Companies and Vornado Realty Trust are back. Gov. Andrew Cuomo announced Tuesday that Related, Vornado and Skanska won the bid for the redevelopment of the James A. Farley Post Office, which will be known as Moynihan Station and feature 700,000 square feet of office and retail space and train halls for both Amtrak and the Long Island Rail Road. The decision doesn’t come as much of a surprise, since Vornado and Related had a leg up on the competition. They were tapped in 2005 to develop the station and were only jettisoned from the project earlier this year. The design-build team has agreed to a fixed schedule and budget for the project, which is expected to be completed in 2020 and cost roughly $1.6 billion — $600 million from the developers, $570 million from Empire State Development (ESD) and $425 million from Amtrak, LIRR, Port Authority of New York and New Jersey, and other federal sources.” (The Real Deal)
Block 23 development may bring grocery store, housing to downtown Phoenix “An empty asphalt lot in downtown Phoenix may be developed into a grocery store, housing development, retail and office space thanks to a new development proposal. While the lot has entertained development proposals in the past, the City of Phoenix’s Community and Economic Development Director Christine Mackay said this proposal in particular shows every indication of future success…She said Phoenix is partnering with a private development company because the project will help accomplish some of the city’s goals, such as revitalizing the downtown area and bringing new economic opportunities.” (The State Press)
Queens catching up in race to be the next big thing “For years, Queens trailed behind Manhattan and Brooklyn in terms of growth and development. But now, the Borough is finally catching up with the race, and a lot of investors want to be part of the turnaround. According to the New York Department of State, the number of real estate brokers in Queens rose by six percent last year – more than double the rate in Manhattan, demonstrating the Borough’s increasing appeal and demand across all spectrums of the real estate market. Developers, businesses and renters alike are seeing the potential of Queens. Neighborhoods like Corona and Jackson Heights have paved the way for this relatively new trend – not only because they contain a diversity of cuisines – but also because of their accessibility and affordability. In the first eight months of 2016, the sales volume in Corona, a vibrant neighborhood situated in the heart of Queens, reached a staggering $83.4 million record, outbidding the four quarters of 2015 combined.” (Real Estate Weekly)
Inland Empire Industrial Asset Switches Owners as Market Booms “A seven-building, multi-tenant industrial/flex business park in the Inland Empire has been acquired by Focus Real Estate in a deal arranged by Voit Real Estate Services. Arrow Business Park in Rancho Cucamonga was sold by Essex Arrow LLC for a fee of $15.4 million. Voit Real Estate Services representatives Frank Geraci, Juan Gutierrez and Mike Bouma arranged the transaction on behalf of both parties involved. Located at 9047-9087 Arrow Route in Rancho Cucamonga, Calif., the business park offers a total of 136,806 square feet of industrial/flex space. The seven-building park is divided into 69 units that range in size between 240 and 12,650 square feet.” (Commercial Property Executive)
Sandwich chain Cosi files for Chapter 11 bankruptcy — Cosi, the restaurant chain known for its flatbread sandwiches, said it filed for Chapter 11 bankruptcy protection Wednesday and is seeking to sell itself to its lenders. The company has closed 29 stores, but said the remaining 76 Cosi restaurants located around the country will remain open as it goes through the bankruptcy process. In court documents, Cosi Inc. said it has between $10 million and $50 million in assets and the same amounts in debt. (AP)