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.
Thursday, the Dow declined 72.32 points, or 0.4 percent, to 19,732.40. The Standard & Poor's 500 index slid 8.20 points, or 0.4 percent, to 2,263.69. The Nasdaq composite shed 15.57 points, or 0.3 percent, to 5,540.08.
Benchmark U.S. crude oil rose 29 cents to close at $51.37 a barrel. Brent crude, the international standard, rose 24 cents to $54.16. In other energy trading, wholesale gasoline lost 1 cent to $1.53 a gallon and heating oil rose 1 cent to $1.62 a gallon. Natural gas rose 7 cents to $3.37 per 1,000 cubic feet.
Pizza Hut plans to hire 11,000 ahead of the Super Bowl — Pizza Hut is gearing up for the Super Bowl by hiring 11,000 people in the U.S. to cook up its pies, deliver them to hungry customers or manage its restaurants. The Super Bowl is the busiest day of the year for Pizza Hut, and it expects to sell more than 2 million pizzas during the game. It plans to fill as many of the positions as possible before the Super Bowl, but those that aren't will be filled afterward.
Average US 30-year mortgage rate falls to 4.09 percent — Long-term US mortgage rates marked their third week of declines this week, after snapping a nine-week run of increases. Mortgage buyer Freddie Mac said Thursday the rate on 30-year fixed-rate loans fell to an average 4.09 percent from 4.12 percent last week. That was still sharply higher than a 30-year rate that averaged 3.65 percent for all of 2016, the lowest level recorded from records going back to 1971. A year ago, the benchmark rate stood at 3.81 percent. The average for a 15-year mortgage declined to 3.34 percent from 3.37 percent last week.
Costco agrees to pay $12M over lax pharmacy practices — Costco Wholesale Corp. has agreed to pay nearly $12 million to settle Justice Department allegations of lax pharmacy controls over a four-year period. The Issaquah, Washington-based company acknowledges in the settlement announced Thursday that some of its pharmacies improperly filled prescriptions, kept poor records or failed to adequately track inventory between the start of 2012 and the end of 2015. The case grew out of separate investigations conducted by federal authorities in Washington, Michigan and California. Costco has invested in a new, $127 million pharmacy management system and adopted new audit protocols.
Starwood to Buy Milestone Apartments for About $1.3 Billion “Starwood Capital Group, the investment firm controlled by Barry Sternlicht, agreed to buy U.S. landlord Milestone Apartments Real Estate Investment Trust for about $1.3 billion in cash. Starwood will pay $16.15 a share for Dallas-based Milestone, which trades on the Toronto Stock Exchange but mostly owns properties in the U.S. Southeast and Southwest. The offer is about 8.6 percent more than Wednesday’s closing share price of C$19.66 ($14.87). The deal has an enterprise value of $2.85 billion, including debt, according to a statement Thursday.” (Bloomberg)
The Economy Is Getting Closer to Running on its Own, Yellen Says “The U.S. economy is closing in on the Federal Reserve's goals, giving the central bank impetus to start reducing the extreme levels of support it has provided over the past decade, Chair Janet Yellen said in a speech Wednesday. After more than a decade of benefiting from historically aggressive easing measures, the economy is ‘close’ to the Fed's objectives, though policy removal is expected to be slow, Yellen said in San Francisco.” (CNBC)
More New Multimillion-Dollar Skyscrapers Rose in 2016 Than Any Other Year in History “In its annual report, the 2016 Tall Building Year in Review , the Council on Tall Buildings and Urban Habitat (CTBUH) has announced that 2016 saw the completion of a record 128 buildings 655 feet or higher. This number surpasses the previous record of 114 completions set in 2015. Eighteen of these buildings became the tallest in their city, country, or region, and ten earned the designation of supertall , at 965 feet and above.” (Business Insider)
Rent in December Soars to Highest Growth Since Start of Recession “Rent hit a new multiyear high in December as limited supply and ‘unprecedented’ demand push costs higher. Rents rose 4% compared to a year ago in December, the Labor Department said Wednesday. That’s the strongest yearly gain since December 2007, the month the Great Recession began. Since the downturn ended, rental costs have been accelerating for two simple reasons: supply and demand. When the housing bubble popped, homebuilders retrenched. That means there’s been less housing inventory – both to buy and to rent – than in past periods.” (MarketWatch)
As Rates Rise, the Appeal of Real Estate Bridge Loans Grows “Over the past few years, the story with allocators investing in private equity had a rich-man, poor-man quality. A spate of big distributions left cash on hand, but nowhere comparable to invest it. Real estate emerged as a go-to asset class, driving up valuations alongside a growing public demand for properties, which only added to an already frothy market. Now, as interest rates are beginning to rise, investors are wary of a correction and turning to parts of the real estate debt market as a hedge.” (Institutional Investor)
EB-5 Faces Uncertain Future with New Bill, Trump Presidency “A mere week before Donald Trump’s inauguration as president of the United States, the Department of Homeland Security (DHS) added fuel to the fire of political uncertainty by proposing a series of changes to the ever-controversial EB-5 immigrant investor program. Though the president-elect has yet to take a stance on the much-debated program, set to expire on April 28 following a series of extensions by Congress, applicants are worried given his stance on immigration.” (Commercial Observer)
Philadelphia Office Market Enjoyed Strong Investment Sales Activity in 2016 “According to Cushman & Wakefield's fourth-quarter 2016 Office Marketbeat report for Philadelphia, commercial investment sales activity was robust in both the CBD and suburban office markets while vacancy rates in the suburbs hit historic lows in 2016. The overall vacancy rate is expected to continue to rise in early 2017, with two sizable renovation projects scheduled to deliver in the second quarter.” (World Property Journal)
Inglewood Real Estate Market Expected to Score as Chargers Join Rams at New Stadium “The Chargers’ decision to join the Rams at a splashy new stadium in Inglewood has at least one builder even more pumped up about the city’s prospects. The promise of pro football in Inglewood, still three years away, has already given a lift to real estate developer Sandy Sigal, who is spending $15 million to renovate a 1960s-era shopping center there. The football buzz, which started a year ago with the Rams’ decision to play at a $2.66-billion sports and entertainment complex now under construction, has given Sigal clout with desirable tenants.” (Los Angeles Times)
Real Estate or Return? “’I’m looking for a low-yielding property.’ This is most likely a phrase that has never been spoken. But when discussing the options of where to place the most underwriting emphasis for your net lease investment, most investors—institutional entities or individuals using their own money—frequently use the credit of the tenant and terms of the lease to determine the majority of the value of the asset. When a linearly focused valuation of an asset is used, there may be a tremendous amount of data that is overlooked when considering the real estate investment.” (Commercial Property Executive)
Real Estate Donors Help Massey Outpace De Blasio “Bob Knakal, James Nelson and HFF Boston executive director John Fowler were Paul Massey’s top fundraisers as he outpaced incumbent Mayor Bill de Blasio on his way to a $1.6 million campaign haul over the past six months. In the months ahead, the two candidates’ fundraising efforts will play a key role in shaping the race for City Hall in November. Massey, who received the endorsement of the Independence Party of New York earlier this month, raised about $500,000 more than the $1.1 million de Blasio raised since July.” (The Real Deal)