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 rose 102.69 points, or 0.6%, to 16,433.09. The Standard & Poor’s 500 gained 8.76 points, or 0.5%, to close at 1,961.05. The NASDAQ composite picked up 26.09, or 0.5%, to 4,822.34.
U.S. crude fell $1.29 to close at $44.63 a barrel in New York. Brent Crude, a benchmark for international oils used by many U.S. refineries, fell 75 cents to close at $48.14 in London. Wholesale gasoline fell 2.4 cents to close at $1.370 a gallon. Heating oil fell 2.5 cents to close at $1.550 a gallon. Natural gas rose 1 cent to close at $2.693 per 1,000 cubic feet.
Real Estate Heavyweights Mull Turning Fifth Avenue Tower into a Mall “Real estate heavyweights Steve Roth and Jared Kushner are mulling a plan to reposition the 1957-era aluminum-clad 666 Fifth Ave. office tower into a 1,400-foot vertical mall, hotel and residential tower. The Post has also learned that Pritzker Prize-winning architect Zaha Hadid has already prepared a scheme that would restack the current 41-story building.” (New York Post)
Investors Snapping Up New Homes for Rentals “It was widely deemed a temporary play: Large-scale investors buying thousands of discounted foreclosed properties during the worst of the housing crash and turning them into single-family rentals. When home prices recovered, they would surely sell them for a hefty profit. The housing market is recovering, but these investors are not selling. They are buying more, and now they are buying new.” (CNBC)
Historic PacMutual Building in Downtown L.A. is Sold for $200 Million “The historic PacMutual center was sold for $200 million on Wednesday, capping a profitable turnaround for what was once a second-tier office complex in downtown Los Angeles. Rising Realty Partners made over the Beaux Arts-style building from a lower-rent alternative for conventional white-collar firms into a preferred address for businesses in creative fields such as technology and entertainment. It acquired the property at 6th and Olive streets for $60 million in 2012.” (Los Angeles Times)
Private Real Estate Market Remains Tight, Investment Manager Says “The heightened volatility in stocks may be hurting the necks of traders forced to contend with whipsaw price movements. The market for private real estate, meanwhile, remains as tight as a drum, said Todd Briddell, CEO of CenterSquare Investment Management. Selling out of real-estate investments because of fear of the Fed is wrong in Briddell's view because the asset class offers diversification, generates income and provides a healthy total return.” (The Street)
REITs May Not Be the Answer for Retailers “Under pressure from hedge funds, Darden Restaurants has agreed to spin off property into a REIT, then lease the buildings back. Some companies and shareholders consider this a bad idea. They say REITs holding property from just one retailer may not be the superior investments their proponents make them out to be.” (Bloomberg)
U.K. Retailer Primark Comes to Boston, But Won’t Go Online “Primark is making its American debut without an e-commerce component. Moreover, the company has no plans to launch one, a spokesman said. Primark doesn’t have an online sales operation in its home market and works with a small marketing budget. What it does offer on its website are social media links, giving visitors the chance to share items they recommend.” (MarketWatch)
Developer Pockets Big Profit in $50 Million Shopping Center Sale “A new Glenview shopping center anchored by a Mariano's Fresh Market sold for $50 million, generating a fat profit for its developer. Chicago-based LaSalle Investment Management bought the Glen Gate Shopping Center, a 102,879-square-foot property at the corner of Waukegan and Golf Roads that opened last October, according to Mid-America Real Estate, which brokered the deal. LaSalle bought the center Aug. 25 from Jacksonville, Fla.-based Regency Centers.” (Crain’s Chicago Business)
Paramount Takes It All at a Manhattan Office Building “Paramount Group, Inc., has bought out its joint venture partner in 31 W. 52nd St., taking the remaining 35.8 percent ownership stake in the 29-story Midtown Manhattan office building for $230 million in cash. The New York-based office property REIT declined to name the joint venture partner. The acquisition is expected to be completed in the fourth quarter.” (Commercial Property News)
Tenant Improvements Key to Attracting Tomorrow’s Millennial Workforce “According to a new report from JLL tracking national commercial construction trends, the Millennial generation is having a profound impact on the built environment under construction in 2015. Throughout 2015, tenant improvement ('TI') - or the renovation of existing space - has been a bright spot in the construction industry, even as labor and construction costs continue to rise.” (World Property Journal)
5 Ice Cream Chains Growing on West Coast “Move over, Pinkberry: Ice cream is back in a big way. Across the West Coast, a growing number of ice cream concepts are taking the stage in a year-round battle for frozen desserts. The concepts range from traditional soft-serve cones with a touch of nostalgia, to scoops served with a splash of Willy Wonka pageantry.” (Nation’s Restaurant News)
US budget deficit drops to $64.4 billion in August — The federal government ran up a much smaller budget deficit in August than a year ago, remaining on track to record the smallest annual deficit in eight years. The Treasury Department said Friday that the deficit in August totaled $64.4 billion, a drop of 50% from the same month a year ago. Much of that improvement reflected quirks in timing related to the calendar. Some $42 billion in August benefit payments were made in July because Aug. 1 fell on a Saturday. (NY Times)
US oil production seen tumbling, but low prices may hold on — Oil supply from the United States, Russia and other countries outside of OPEC is expected to drop sharply next year — possibly the steepest decline since the Soviet Union collapsed — because of low prices, the International Energy Agency forecast Friday. In its latest monthly report, the IEA says non-OPEC production is expected to drop nearly half a million barrels to 57.7 million barrels a day in 2016. But a prominent investment firm questions whether even a cut that steep will shrink the glut of oil on the market enough to boost the price. (Beaumontenterprise)