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.

Monday, the Standard & Poor’s 500 index picked up 1.19 points, or less than 0.1 percent, to 2,444.24. The Dow Jones industrial average dipped 5.27 points to 21,808.40. The Nasdaq composite rose 17.37 points, or 0.3 percent, to 6,283.02.

Benchmark U.S. crude fell $1.30, or 2.7 percent, to $46.57 a barrel in New York. Brent crude, the international standard, lost 52 cents, or 1 percent, to $51.89 a barrel in London. Wholesale gasoline futures rose 5 cents, or 2.7 percent, to $1.71 a gallon. Heating oil rose 1 cent to $1.64 a gallon. Natural gas added 3 cents to $2.93 per 1,000 cubic feet.

Harvey slams region’s economy, with damages in the billions — Flood damage from Hurricane Harvey is likely to reach into the tens of billions and the storm is expected to cause the region’s economy to shrink, at least in the near term. The storm has forced Gulf Coast refineries to shut down, leading to higher gasoline prices. Houston’s two airports will remain shuttered for days. Harvey will also affect other industries from banking to insurance.

Voting Options for Election Day Tuesday – If you missed last week’s deadline to mail back your ballot in time for it to be counted in the City of Tucson’s primary election tomorrow, you still have some options available. Four sites will be used as voting locations or drop-off sites on Election Day. They will be open from 6 a.m.-7 p.m. The sites are: Tucson City Clerk Elections Center, 800 E. 12th St.; El Pueblo Senior Center, 101 W. Irvington Road; Parks and Recreation Administration, 900 S. Randolph Way; and the Donna R. Liggins Recreation Center, 2160 N. 6th Ave. If you don’t want to wait until tomorrow, you can return your ballot today until 5 p.m. at the 12th Street location. The contested races are in Wards 3, 5, and 6. For more information, call (520) 884-VOTE (8683).
Tucson City Clerk’s election page: https://1.usa.gov/1Jw2Box

Tucson City Golf Community Workshop this week – The City of Tucson is hosting its third of four community workshops to discuss the future of Tucson City Golf courses. The workshops include a presentation on the financial history of Tucson City Golf and the various options that will be considered at each course. Each golf course has a unique set of circumstances that impact options. The next community workshop will focus on the Randolph golf courses, and attendees will have an opportunity to comment on the options. The workshop will start this Thursday at 6 p.m. at the Randolph Golf Complex (Copper Room), 600 S. Alvernon Way. For additional information, please contact Greg Jackson at (520) 837-8011 or Greg.Jackson@tucsonaz.gov. Tucson City Golf: https://bit.ly/1wmSGx3

Tickets on Sale Now for Tucson Roadrunners Games – Single-game tickets for the Tucson Roadrunners 2017-18 hockey home games went on sale today at the Tucson Convention Center (TCC) Ticket Office. With tickets starting at just $15, fans can enjoy family fun in Downtown Tucson. The Roadrunners kick off the season on Saturday, Oct. 7, against the San Diego Gulls at 7:05 p.m. in the Tucson Arena. For more information, call 1-866-774-6253. You can also visit the website linked below to buy tickets, see the schedule, learn about promotions, follow game statistics, and more. The Sun Link streetcar has stops just west of the TCC (on Granada Avenue) for easy access to the games.
Tucson Roadrunners (and link to purchase tickets): https://bit.ly/2dCjdqn

Walk dogs on Labor Day – Pima Animal Care Center (PACC) is recruiting volunteers to walk dogs on Labor Day next Monday. PACC wants up to 200 volunteer dog walkers for the event. Anyone 15 years of age and older can register by following the link below. Check-in begins at 6:30 a.m. at 4000 N. Silverbell Road, and the dog walk will begin by 7 o’clock and run for about two hours. Walkers are encouraged to bring water, wear closed-toe shoes, and dress in clothing they don’t mind getting dirty.
Register for PACC community dog walk: https://bit.ly/2xrDg1Q
PACC news: https://bit.ly/2wiYgru

Download App to Track Streetcar – If you’d like to track the Sun Link streetcar and you have a smartphone, you’re in luck. The Tucson Streetcar Tracker, developed by Dallan Porter at the University of Arizona, is useful if you want to figure out how long it will take for the streetcar to show up at the stop where you’re waiting. The app was developed using open data provided by Sun Link. The free tracker is available for iOS and Android.
Tucson Streetcar Tracker (iOS): https://apple.co/1CVgsYR
Tucson Streetcar Tracker (Android): https://bit.ly/1Ila0wD
Sun Link: https://bit.ly/1YLz2IN

Office Spaces Focusing More on Communal Areas “Businesses are beginning to design offices spaces that are increasing the amount of square footage per employee when shared work settings are taken into account. That is one of the conclusions of a new report by architecture and design firm Ted Moudis Associates, which analyzed 2.4 million square feet of Ted Moudis’ office projects. Many companies are expanding the selection of alternative places to get work done.” (Wall Street Journal, subscription required)

What Happens After the Real Estate Wave Crests? “Boston was flying high. New towers were transforming the downtown skyline, while growing companies couldn’t hire fast enough to fill open jobs. Home prices had been surging for half a decade, and condo builders were racing to keep up with the demand. The year was 1988. And what happened next was a real estate bust just as epic as the boom that preceded it. Jobs vanished. Banks failed. Unsold condos littered the market. It took most of a decade for Boston to dig out.” (Boston Globe)

Thousands of Homes in Houston Inundated by Tropical Storm Harvey “Heavy rains are continuing to fall on Houston as tens of thousands of homes in the city are being inundated by Harvey, a former category 4 hurricane that has been downgraded to a major tropical storm. Harris County sheriff’s spokesman Jason Spencer says flooding throughout the county that includes Houston and the region is so widespread that it’s ‘difficult to pinpoint the worst area.’ In all, more than 230,000 homes on the Texas coast are at risk of damage from storm surge, according to analytics company CoreLogic. The combined reconstruction value of is about $39.6 billion, Corelogic estimates. But many of the homes at risk are not in a designated flood zones.” (Forbes)

Here’s What Will Make Real Estate Investing Great Again “Profitable enterprises can be poor investments if you pay too much for them. That’s exactly what is happening now with publicly traded REITs. This development was forecasted in an article I wrote last February. With assistance from investment firm Research Affiliates, the article concluded that REITs would produce returns between 0% and 2% annualized on an inflation-adjusted basis over the next decade.” (MarketWatch)

How Stephen M. Ross’ Gift to the University of Michigan Ended Up in Tax Court “On his way to becoming the University of Michigan’s largest donor, Stephen M. Ross and a group of business partners donated a collective gift to his alma mater. In return, the partnership claimed a giant charitable tax deduction: $33 million. The Internal Revenue Service didn’t buy it. IRS lawyers flagged Ross and his partners as engaging in a ‘tax avoidance scheme lacking in economic substance … to the benefit of Mr. Ross and his associates at Related Companies.’” (Detroit Free Press)

Google Effect Unleashes Downtown San Jose Property Boom “Google’s effort to acquire a broad swath of downtown San Jose properties for a massive new tech campus is triggering a sharp jump in selling prices for commercial real estate in the area. The internet search giant’s plan to expand into San Jose with a new campus employing up to 20,000 Googlers near the Diridon train station and SAP Center could take years to become a reality, if the company moves ahead with plans to build.” (Mercury News)

Flooding After Harvey Too Much for Retailers, Grocers: Many Close Sunday Afternoon “Major grocers and retailers in the Houston area were forced to close most or all stores Sunday after Harvey slammed the city overnight. H-E-B operated some Houston-area stores until 3 p.m. Its store at Braeswood and Chimney Rock, however, remained closed as Brays Bayou overflowed, forcing residents to escape in boats and helicopters. It also closed its Central Market store on Westheimer.” (Chron)

The Closing: Joanne Podell “Joanne Podell, a veteran retail broker and executive vice chairman at Cushman & Wakefield, was named the company’s top producer nationwide in 2016. She is the second woman in the history of the company to receive that designation. Podell, who has brokered more than 100,000 square feet in the past year, spearheaded the largest retail transaction in New York City in 2016 when she represented sports giant Nike in a 70,000-square-foot lease for its flagship store at 650 Fifth Avenue.” (The Real Deal)

Northwestern Mutual’s New HQ Opens in Milwaukee “The 1.1 million-square-foot Northwestern Mutual Tower and Commons project along the Lake Michigan lakefront in downtown Milwaukee has celebrated its grand opening. Gilbane Building Co., of Providence, R.I., was the project’s construction manager, along with joint venture partner CG Schmidt, a Milwaukee-based construction management and general contracting firm. The 32-story tower adjoins a three-story, two-block-long space known as the Commons.” (Commercial Property Executive)

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 Standard & Poor’s 500 rose 4.08 points, or 0.2 percent, to 2,443.05. The Dow Jones industrial average gained 30.27 points, or 0.1 percent, to 21,813.67, the Nasdaq composite dipped 5.68, or 0.1 percent, to 6,265.64. Benchmark U.S. crude added 44 cents to settle at $47.87 per barrel. Brent crude, the international standard, gained 37 cents to $52.41 per barrel. Wholesale gasoline was little changed at $1.67 per gallon, heating oil was virtually unchanged at $1.62 per gallon and natural gas fell 6 cents to $2.89 per 1,000 cubic feet.

Stocks climb; S&P 500 breaks two-week losing streak — Stocks rose on Friday, and the Standard & Poor’s 500 index cruised to its first winning week in the last three. It was a relatively quiet week, with fewer shares trading hands than usual. The S&P 500 barely budged off course after Federal Reserve Chair Janet Yellen gave her highly anticipated speech in the morning. The day’s other headline event, a speech by European Central Bank head Mario Draghi, likewise did little to alter the course for stocks.

LAST-MINUTE VOTING OPTIONS – If you missed Wednesday’s deadline to mail back your ballot in time for it to be counted in the City of Tucson’s primary election next Tuesday, you still have some options available. Four sites will be used as ballot locations or drop-off sites on Election Day. The sites will be open from 6 a.m.-7 p.m. You can also return your ballot today until 5 p.m. and Monday from 8 a.m.-5 p.m. at the Tucson City Clerk Elections Center, 800 E. 12th St. (extended hours on Election Day). The contested races are in Wards 3, 5, and 6. Voters in those wards should check their voting materials for the specific location of their drop-off site. For more information, call (520) 884-VOTE (8683). Tucson City Clerk’s election page: https://1.usa.gov/1Jw2Box

Amazon Says Whole Foods Deal Will Close Monday, with Discounts to Begin Then “Amazon announced on Thursday that its acquisition of Whole Foods will close on Monday. As the two companies work to integrate their business, customers will immediately see ‘lower prices on a selection of best-selling staples across [Whole Foods] stores.’ And Amazon promises ‘more to come,’ as the internet giant begins to integrate Prime into the Whole Foods ecosystem. Eventually, Prime members will receive ‘special savings and in-store benefits.’” (CNBC)

Yellen: Any Change to the Regulations That Police Wall Street Should Be ‘Modest’ “Reforms put in place after the 2007 to 2009 crisis have strengthened the financial system without impeding economic growth, and any future changes should remain modest, Federal Reserve Chair Janet Yellen said Friday in her fullest defense yet of the rules put in place after the Great Recession.” (Reuters)

WeWork Just Raised Another $4.4 Billion from SoftBank “WeWork has raised $4.4 billion in funding from SoftBank Group and SoftBank Vision Fund, the office sharing startup announced Thursday. SoftBank is investing $3 billion in WeWork itself, and putting another $1.4 billion into three new WeWork subsidiaries — WeWork China, WeWork Japan, and WeWork Pacific. As part of the investments, SoftBank will is naming two directors to WeWork’s board.” (Business Insider)

The Most Popular Cities Where House Hunters Want to Move Right Now “Homebuyers apparently have their eyes on Colorado. Colorado Springs, Colo., is the city that will likely have the most home sales in the third quarter, according to an analysis by ATTOM Data Solutions, a data firm that specializes in real estate, based in Irvine, Calif. Next on the list were Chicago, Washington, D.C., Reno, Nev., and Lexington, Ky. In some of the nation’s hottest housing markets, there was more interest in counties farther away from jobs but with more affordable homes, said Daren Blomquist, a senior vice president at ATTOM.” (MarketWatch)

A Third of Luxe Real Estate Deals Involve ‘Suspicious Activity’ “The Treasury Department said that 30 percent of high-end real-estate deals that were subject under a new watchdog program involved ‘suspicious activity’ and potential money-laundering. Treasury this week expanded and extended a program targeting luxury real estate deals in New York, Miami, Los Angeles and other big markets to prevent the use of real estate for money-laundering by overseas buyers. The program was designed to prevent buyers from using shell company’s or LLC’s to hide the identities of the real buyers.” (CNBC)

Judge Grants Pipeline Easements on Holdout Properties “A federal judge in Pennsylvania says a gas pipeline company can seize easements it needs from five final holdout property owners including land owned by nuns on which activists built an outdoor chapel to protest the project. Wednesday’s ruling means Transcontinental Pipe Line Co. has no obstacles to its Atlantic Sunrise pipeline project. An attorney for The Adorers of the Blood of Christ says he’s not sure whether the nuns will appeal Wednesday’s ruling.” (U.S. News & World Report)

SF’s Transfer Tax Revenue Jumps as Commercial Properties Change Hands “A concentration of high-value commercial properties changing hands in the last fiscal year helped San Francisco collect the highest amount of transfer taxes in the city’s history, San Francisco Assessor-Recorder Carmen Chu reported Thursday. Between July 1, 2016, and June 30, San Francisco collected $411 million in transfer taxes, which the city levies on transactions of taxable properties. That figure, which makes up 12 percent of the city’s general fund revenue, eclipsed the previous high for transfer taxes, set two years ago, by $97 million.” (SF Gate)

Data Center Construction in America Spikes 43 Percent in 2017 “A new report from global real estate consultant JLL reveals that as consumers turn to their smartphones for everything from streaming video to buying their groceries, the data center industry is stepping up to meet escalating demand for storage. Because of such, data center construction in North America is up 43 percent from 2016 and industry consolidation powered a $10 billion surge in mergers and acquisitions (M&A) in the first half of 2017. Meanwhile, cloud leasing activity started shifting to global markets.” (World Property Journal)

Economy Watch: U.S. Hotels to Grow at Slower Pace in 2018 “The U.S. lodging industry will continue to grow across all major metrics in 2018, but at a slower pace, according to a recent report by CBRE Hotels’ Americas Research. The company forecasts increases in occupancy, average daily room rate (ADR), revenue per available room (RevPAR), total operating revenue, and gross operating profits in 2018, compared with this year. CBRE is forecasting a 0.1 percent occupancy increase, along with a 2.3 percent rise in ADR for 2018. The net result is a projected 2.4 percent boost to RevPAR.” (Commercial Property Executive)

Ulta Beauty Beats Street; On Track to Open 100 Stores in 2017 “Ulta Beauty turned in another winning quarterly performance, besting analysts’ earnings and sales estimates. The beauty powerhouse also raised its fiscal 2017 guidance. One of the few specialty retailers with an aggressive store opening program, Ulta Beauty said it remains committed to opening 100 new locations in 2017. It will also remodel 11 stores and relocate seven others. Ulta Beauty earned $114 million, or $1.83 a share, in the second quarter ended July 29, compared with $90 million, or $1.43 a share, in the year-ago period. Analysts had expected earnings of $1.78 a share.” (Chain Store Age)

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 Standard & Poor’s 500 index fell 5.07 points, or 0.2 percent, to 2,438.97. The Dow Jones industrial average fell 28.69 points, or 0.1 percent, to 21,783.40, the Nasdaq composite fell 7.08 points, or 0.1 percent, to 6,271.33.

Benchmark U.S. crude fell 98 cents, or 2 percent, to settle at $47.43 per barrel. Brent crude, the international standard, fell 53 cents, or 1 percent, to settle at $52.04 a barrel. Natural gas rose 2 cents to settle at $2.95 per 1,000 cubic feet, heating oil was close to flat at $1.62 per gallon. Wholesale gasoline futures rose 5 cents, or 2.8 percent, to $1.66 per gallon.

Amazon will close its $13.7 billion buyout of Whole Foods Market Inc. on Monday and plans to cut prices on grocery staples.Amazon to cut prices on Whole Foods staples like eggs, beef — Amazon is moving swiftly to make big changes at Whole Foods, saying it plans to cut prices on bananas, eggs, salmon, beef and more as soon as it completes its $13.7 billion takeover next week.

30-year US mortgage rate dips to 3.86 percent, 2017 low — The benchmark 30-year mortgage rate is at new low for the year, touching its lowest level since last November. Mortgage buyer Freddie Mac says the rate on 30-year, fixed-rate mortgages fell to 3.86 percent from 3.89 percent last week. It was the fourth straight weekly decline for the key rate. The rate on 15-year, fixed-rate home loans, popular with homeowners who are refinancing their mortgages, remained at 3.16 percent this week.

Stonemont Financial Group Buys Portfolio of 100 Properties for $1.3 Billion “Stonemont Financial Group, an Atlanta-based real-estate-management firm, is buying a 100-property portfolio of office, industrial and retail holdings across 20 states for $1.3 billion, saying demand for properties with investment-grade tenants remains strong. The deal, Stonemont’s largest acquisition ever, was fueled in part by debt capital seeking to finance strong real-estate portfolios, the company said Wednesday.” (Wall Street Journal, subscription required)

Sears Is Closing Another 28 Kmart Stores as Sales Tumble Again “The bleeding at Sears Holdings shows no signs of stopping. The long-struggling retailer said on Thursday it was closing another 28 Kmart stores, the latest in a string of recent announcements of store shutterings amid a severely deteriorating business. The company has already closed dozens of Sears department stores and Kmart discount stores this year. Sears Holdings said comparable sales fell 13.2% at Sears, and 9.4% at Kmart, for a companywide decline of 11.5% in the quarter ended July 29.” (Fortune)

Growth Lessons for Real Estate Investments in the Desert States “The historical West was a place of feast or famine, mainly the latter. Deserts, snow, water, mountains, mining, gambling – the West either had too much of them or too little. The dry climate prevented settlement because farming was too difficult, limited to narrow strips along rivers that could flood or run dry from one year to the next. Towns only appeared in places where other natural resources were found. The modern West isn’t really that different.” (Forbes)

In a Thriving City, SoHo’s Soaring Rents Keep Storefronts Empty “Now, with the city’s unemployment at near historic lows and the economy humming along, empty storefronts dot SoHo’s streets, with 16 in the six-block stretch of Broadway between Houston and Canal Streets, the area’s retail spine. More stud the Belgian-blocked side streets, dark gaps between boutiques selling high fashion and designer furniture and the occasional remaining art gallery.” (The New York Times)

The New Gated Community: More Land, Fewer Neighbors “Ty and Kady Hendrix live in a gated development that doesn’t have a golf course or a clubhouse—or a lot of neighbors. A half-mile of woodland separates the couple from their nearest fellow homeowners in the Reserve, an 1,100-acre community with only 57 home sites, just a few miles from North Carolina’s Pisgah National Forest. ‘It’s almost like you’re camping,’ said Mr. Hendrix, 55, a financial adviser who spent over $1.09 million to build a 4,000-square-foot, board-and-batten home on 15½ acres there in 2003.” (Wall Street Journal, subscription required)

At Contentious First Debate, Rival Slams De Blasio Ove r Real Estate Ties  “Bill de Blasio’s underdog Democratic primary opponent used the first televised mayoral debate Wednesday night to paint the mayor as having ‘turned the city over to big developers’ to make good on his promise of building record amounts of affordable housing. Former Brooklyn Councilman Sal Albanese also sought to make an issue of the now-folded probes into the mayor’s political fundraising. Albanese alluded to recently disclosed email exchanges between de Blasio and JSR Capital founder Jona Rechnitz, who pleaded guilty in a separate police corruption investigation.” (Crain’s New York Business)

Investor Demand Further Compresses Capitalization Rates for U.S. Commercial Assets in 2017 “According to global property advisor CBRE, increased investor demand from both international and domestic buyers contributed to further capitalization rate compression in the U.S. industrial real estate sector over the first half of 2017. Industrial remains the strongest performer out of the five sectors, given the especially robust fundamentals, record low vacancy rates, tangible rental rate growth and strong tenant demand. The CBRE North America Cap Rate Survey provides insights on movements for the major property asset classes.” (World Property Journal)

SL Green, Vornado Close on $1.2B Refi for 280 Park “SL Green Realty and Vornado Realty Trust closed on a $1.2 billion financing package to refinance the 43-story office tower at 280 Park Avenue.The financing replaces a $900 million loan from a group that includes Deutsche Bank and Bank of China, which closed in 2016, that was set to mature in 2023. The new interest-only loan will mature in 2024 and carries a rate of Libor plus 1.73 basis points. It’s not immediately clear who the lender is.” (The Real Deal)

Large Mixed-Use Houston Portfolio Changes Hands “A joint venture between H.I.G. Realty Partners and Lincoln Property Co. has acquired Greenspoint Place, a six-property, mixed-use portfolio located in the North Houston District of Houston. In total, the portfolio includes six office buildings totaling more than 2 million square feet and three adjoining retail centers. Built over a 14-year span between 1978 and 1992, Greenspoint Place once held a decades-long standing as the premier office portfolio in the region, and the new owners plan to transform it back to its glory days.” (Commercial Property Executive)

Demand for Medical Office Buildings Rises as U.S. Population Ages “According to a new report from CBRE, the aging U.S. population, pressure for healthcare providers to cut costs and new technologies have boosted demand for medical office properties in recent years. The U.S. Census Bureau estimates that the 65+ population will nearly double between 2015 and 2055 to more than 92 million and comprise nearly 23 percent of the country’s total population by that time.” (World Property Journal)