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 picked up 46.16 points, or 0.2 per cent, to 18,538.12. The Standard & Poor’s 500 index climbed 6.50 points, or 0.3 per cent, to 2,186.48. The NASDAQ composite jumped 26.01 points, or 0.5 per cent, to close at a record 5,275.91.
Benchmark U.S. crude oil added 39 cents to $44.83 a barrel in New York. Brent crude, the benchmark for international oil prices, lost 37 cents to $47.26 a barrel in London. In other energy trading, wholesale gasoline rose 1 cent to $1.32 a gallon. Heating oil remained at $1.41 a gallon. Natural gas skidded 8 cents to $2.72 per 1,000 cubic feet.
Selling 1 World Trade Center “One World Trade Center sits at the heart of America's most hallowed ground, a 1,776-foot-tall icon that concretely testifies to the city's rebirth after Sept. 11, 2001. But as an investment for its owner, the Port Authority of New York & New Jersey, it has been a bust. Fifteen years after the terrorist attacks, the roughly 3-million-square-foot, $3.8 billion tower is still one-third empty. According to the Citizens Budget Commission, the tower netted the authority $13 million in revenue last year, a figure that equates to a meager 0.35% return on its investment—a rate that doesn't even keep pace with inflation.” (Crain’s New York Business)
Middle East Investors Raise Bets on New York Real Estate: Chart “Middle Eastern investors stepped up purchases of U.S. commercial real estate, with New York City the top destination in both the country and the world for the 18 months through June. Economic growth and favorable exchange rates combined to make the U.S. appealing, particularly for sovereign-wealth funds, according to CBRE Group Inc. Among the $6.5 billion of New York deals was Qatar Investment Authority’s purchase of a stake in the Manhattan West development, and, following the period CBRE studied, the authority paid $622 million for 9.9 percent of the company that owns the Empire State Building.” (Bloomberg)
How to Make Sure You Don’t Get Burned in a Real Estate Investment “I’ve seen flippers who take people’s money and start a project. They use shoddy materials and unlicensed and or unqualified workers. From there, the scenario can take all kinds of bad turns. The county can come in and put a stop order on the project. Or the flipper decides to go on vacation and spends the money that was intended for renovations; often, that money was taken from the lender for the purpose of doing the renovation.” (The Washington Post)
Aeropostale Back from the Brink After Auction “Aeropostale Inc. will live to see another day after all. A consortium, including Simon Property Group Inc. General Growth Properties Inc. and Authentic Brands Group, won the bankruptcy auction for Aeropostale Inc. The group, which also includes liquidators Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC, plans to keep at least 229 of the teen retailer’s stores up and running along with Aeropostale's e-commerce business and international licensing business. The purchase price was $243.3 million, and assumption of certain debt.” (Chain Store Age)
Fight Against Barry Diller’s Pier 55 May Be Funded by Real Estate Tycoon “The approvals process and construction of Pier 55 on Manhattan’s west side has been snarled by lawsuits since the moment plans for the futuristic floating park were announced. But who exactly is behind these lawsuits? The Times has finally asked the question. The obvious answer is the named plaintiff, City Club of New York, but given the small civic club’s recent history of money woes, that it would be the sole backer of these pricey lawsuits seem unlikely. The Gray Lady offers a much more interesting answer, from Diller himself: could it be Douglas Durst?” (Curbed New York)
With Occupancy High, Hotels Seeks to Avoid Online Booking Services “When hotels are having trouble filling rooms, they will grudgingly pay Expedia and other online travel agencies commissions of 15 to 30 percent to help reduce the vacancies. But when the beds are filling up, the hotels would much rather avoid those hefty commissions by having travelers book directly through the hotel’s website, call center or authorized brick-and-mortar travel agent. Which is why lately, with average occupancy rates in the United States at the highest level in a least a generation, hotels are dangling inducements to get you to book direct.” (The New York Times)
Apple Hospitality Merger Highlights Investor Interest in Select-Service Properties “Creating one of the largest upscale, select-service lodging REITs in the industry, with a value of about $5.7 billion, the merger of Apple Hospitality REIT Inc. with Apple REIT Ten Inc. has been completed. The transaction had been announced back in April. The common shares of Apple Hospitality will continue to trade on the NYSE under the APLE symbol. An analysis of 16 hotel REITs tracked by Hotel Appraisers & Advisors, of Chicago, ranked APLE third in profitability, Hans Detlefsen, president of HA&A, told Commercial Property Executive.” (Commercial Property Executive)
Commercial Lending Markets Strengthen in U.S. “According to new data from CBRE, commercial real estate lending markets continue to improve in the U.S. after a bout of volatility and sluggish lending volume at the start of the year. The CBRE Lending Momentum Index, which tracks the pace of U.S. commercial loan closings, increased by 2.1 percent in Q2 2016. The Index shows positive momentum on a year-over-year basis, with loan closings up by 5.7 percent. The increase in commercial lending volume is a promising sign, especially in light of the heightened uncertainty at the beginning of the year.” (World Property Journal)
Real Estate Tycoons’ Top 7 Fall Projects “With Labor Day behind us, school’s in for the city’s real estate power players. Here’s our selective guide to the Lucky-7 big deals on their agendas.1) East Midtown Rezoning. A comprehensive, complex proposal to allow larger and taller towers in Manhattan’s historic commercial heart was finally set in motion by the Department of City Planning after two years of study and input. Now it must survive the ULURP review process, which requires approval by the City Council and the mayor.” (New York Post)
Wexford Portfolio Sells for $1.5B “Ventas Inc. has completed its acquisition of the life science and medical real estate assets of Wexford Science & Technology LLC from affiliates of Blackstone Real Estate Partners VIII LP for $1.5 billion, further solidifying Ventas’s position as the leading capital provider at the intersection of healthcare and real estate. The Wexford portfolio of 4.5 million square feet includes 100 percent private pay assets and is leased by excellent credit tenants, including top research universities, academic medical centers and research companies.” (Commercial Property Executive)