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.

Wednesday, the Standard & Poor’s 500 index fell 8.47 points, or 0.3 percent, to 2,444.04. The Dow Jones industrial average fell 87.80 points, or 0.4 percent, to 21,812.09, and the Nasdaq composite lost 19.07, or 0.3 percent, to 6,278.41.

Benchmark U.S. crude oil rose 58 cents to settle at $48.41 per barrel. Brent crude, the international standard, rose 70 cents to $52.57 per barrel. Natural gas fell 1 cent to $2.93 per 1,000 cubic feet, heating oil rose 3 cents to $1.62 per gallon and wholesale gasoline gained 3 cents to $1.62 per gallon.

TUCSON UNIFIED SCHOOL DISTRICT HIRES SUPERINTENDENT – The Tucson Unified School District (TUSD) Governing Board last night voted to give Interim Superintendent Gabriel Trujillo the permanent job he’s been filling. Trujillo, who temporarily took over the superintendent’s post in March, beat out three other finalists for the position. He’ll be paid a base salary ranging from $180,000 to $230,000 to oversee more than 47,000 students in 89 schools and programs. The board hopes to have the terms of Trujillo’s contract worked out by next Monday’s meeting. In other TUSD news, U.S. District Judge A. Wallace Tashima said yesterday that racism was behind an Arizona ban on ethnic studies that shuttered a popular Mexican-American Studies (MAS) program at TUSD. However, Tashima said he doesn’t know a remedy for the violation and has not issued a final judgment.
MAS story from the Arizona Daily Star: https://bit.ly/2wFMsle

CITY’S FLEET SERVICES RANKED AMONG THE NATION’S BEST – The City of Tucson’s Fleet Services Division once again is ranked in the top 100 by The 100 Best Fleets in the Americas. The City is ranked No. 52 this year, up from No. 83 last year. The program recognizes and rewards peak performing fleet operations in North America. Currently in its 16th year, 100 Best Fleets identifies and encourages ever-increasing levels of performance improvement within the fleet industry. This is the fifth consecutive year that Tucson’s Fleet Services has been included in the top 100. As a division of the Environmental & General Services Department, Fleet Services maintains and repairs a diverse fleet of 2,550 vehicles and equipment. Fleet Services is an active member of the Clean Cities Coalition.

US new-home sales fell in July, yet still ahead of last year — Sales of new U.S. homes plummeted by the most in nearly a year in July, yet the drop comes after strong sales in previous months. So far, this year’s sales are outpacing last year’s.

Converted Office Parks Try to Lure Millennials with Cheaper Rents “Developer National Resources has for several years been studying different office, retail and residential schemes for an underused corporate campus designed in the 1960s for International Business Machines Corp. in East Fishkill, N.Y. But now, as National Resources moves to close on a deal to buy a 300-acre site, the Greenwich, Conn.-based developer is recognizing that housing has got to be a central component of the plan.” (Wall Street Journal, subscription required)

Kohl’s to Reduce Floor Space in Half of its Stores by End of Year “There are some major changes going on at Kohl’s stores. The department store retailer announced plans to make nearly half its locations “operationally smaller through balancing inventory and adjusting fixtures” by the end of 2017. To date, the new interior layouts have been rolled out in 300 of Kohl’s 1,100 locations. In addition, Kohl’s plans to ‘right-size’ the physical square footage of its store in Warner Robbins, Ga., reducing it from an 89,000-sq.-ft. store to a 62,000-sq.-ft. one.” (Chain Store Age)

Latest Capital Controls Won’t Choke Off Chinese Overseas Real Estate Investments—CBRE “The impact of the latest round of capital controls announced Aug. 18 by China’s State Council in curbing Chinese overseas direct investment into real estate could be relatively light, said a report by global commercial real estate services firm CBRE Tuesday. Controls imposed since late 2016 to staunch capital flight and bolster the yuan in currency markets saw Chinese overseas direct investments to real estate for the first half of 2017 plunge 82% from the year before to $25.6 billion, according to China’s Ministry of Commerce.” (Pensions & Investments)

Condo Owners Eye Cashing In on Rental Market “During real-estate booms developers often rush to convert rental buildings into condos to take advantage of skyrocketing prices. But in an unusual reversal, investors in Chicago are transforming condos into apartments. Dozens of stately Chicago condo buildings are or have recently been converted into rentals, real-estate agents say.” (Wall Street Journal, subscription required)

Whole Foods Shareholders Vote in Approval of Amazon Deal “Whole Foods shareholders have at last voted to advance Amazon’s acquisition of the grocery chain, moving the proposal one step closer to reality. Gathered at Whole Food’s headquarters in Austin, Texas, the retailer’s shareholders approved a merger with the internet giant on Wednesday morning. Amazon shareholders don’t need to sign off on the deal. Now, completion of the transaction is subject to regulatory approvals and other customary closing conditions. Whole Foods and Amazon are preparing to seal their $13.7 billion deal, which would also mark the biggest retail deal of 2017.” (CNBC)

Wal-Mart, Google Team Up to Battle Amazon “Google and Wal-Mart Stores Inc. are joining forces in a partnership that includes enabling voice-ordered purchases from the retail giant on Google’s virtual assistant, challenging rival Amazon.com Inc.’s grip on the next wave of e-commerce. Wal-Mart said Wednesday that next month it will join Google’s online-shopping marketplace, Google Express. While the deal will add hundreds of thousands of Wal-Mart items to Google Express, it will also give Wal-Mart access to voice ordering. The deal won’t alter how consumers receive their orders, because Wal-Mart will fulfill purchases made through Google Express.” (MarketWatch)

Valle Vista Mall Owners in Harlingen to Return Property to Lenders “The owners of the city’s premier mall say they intend to dump the property on lenders, apparently conceding profits from the mall will not meet expectations. City officials, however, expect new ownership will keep the 650,504-square-foot retail mall open. ‘With the continued growth of the Harlingen economy, this news is welcomed,’ Mayor Chris Boswell said in a statement. ‘What has been reported is that Washington Prime borrowed too much money against the Harlingen property, but during their ownership the lease revenues continued to perform reasonably.’” (The Monitor)

JW Marriott Chicago Lands $270M Natixis Refi “Nearly seven years after opening in the former Continental & Commercial National Bank Building in Chicago’s downtown Loop, the JW Marriott Chicago Hotel has been refinanced with a $270 million loan provided by Natixis, a French corporate and investment bank. The owners opened the premier luxury hotel at 151 W. Adams St. in the heart of the financial district in November 2010 following a $396 million restoration. Designed by noted architect Daniel Burnham in the early 1900s, the first 12 floors of the former bank building were transformed into a 610-key luxury hotel.” (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.

Tuesday, the Standard & Poor’s 500 rose 24.14 points, or 1 percent, to 2,452.51 for its fourth-biggest gain of the year. The Dow Jones industrial average rose 196.14 points, or 0.9 percent, to 21,899.89. The Nasdaq composite gained 84.35, or 1.4 percent, to 6,297.48. Benchmark U.S. crude rose 27 cents to settle at $47.64 per barrel. Brent crude, the international standard, gained 21 cents to settle at $51.87 a barrel. Natural gas fell 2 cents to $2.94 per 1,000 cubic feet, heating oil was virtually flat at $1.59 per gallon and wholesale gasoline rose 1 cent to $1.59 per gallon.

MAYOR LAUNCHES NEW MENTORING INITIATIVE – Tucson Mayor Jonathan Rothschild yesterday announced a new initiative calling for community volunteers to help mentor youth. Alongside representatives from several youth-serving nonprofits and the kids they serve, Rothschild encouraged nonprofit, business, and government representatives to become mentors. Depending on the program, the time commitment can be as little as a few hours a month, the mayor wrote recently in the Arizona Daily Star (link below). “Mentorship programs share a dedication to improving the lives of young people through positive interactions with adults,” he said. For a list of participating agencies in need of volunteers, please follow the links below. Mentor Tucson Youth volunteer opportunities from mayor’s website: https://bit.ly/2wvzmaQ

SELF-DRIVING SEMI TRUCK TECHNOLOGY BEING DEVELOPED IN TUCSON – A Chinese startup company is developing self-driving technology for commercial trucking at a recently opened facility in Tucson. Beijing-based TuSimple’s research and testing includes a planned Tucson-Phoenix trip with an autonomous truck. The company says it plans to hire as many as 100 employees in the next five years. TuSimple is leasing more than 6,800 square feet of warehouse and office space at 2551 N. Dragoon St., near West Grant Road and Interstate 10. Company Co-founder and Chief Technology Officer Xiaodi Hou said Tucson’s logistics and friendly Arizona policies toward autonomous vehicle technology lured the company to Tucson. Tucson Mayor Jonathan Rothschild spoke at yesterday’s ribbon cutting, along with Pima County officials, and regional economic development partners. The City provided no incentives to bring the company to Tucson, with the mayor saying Tucson’s workforce and talent coming out of the University of Arizona will help the company succeed.

LEARN ABOUT FISHING AT URBAN LAKES – Do you need a license to fish at a City lake? Find out the answer to that question and many others in an episode of Sierra Says from Tucson 12 and the Tucson Parks and Recreation department (video link below). Send your parks questions to Sierra.Boyer@tucsonaz.gov, and you could have them answered in the next installment of this TV and social media series.
Watch Sierra Says video: https://bit.ly/1RyVQH1

WATERMELON WEDNESDAY TOMORROW AT REID PARK ZOO – Reid Park Zoo is giving its animals watermelon enrichment every Wednesday morning in August. From 8-10 a.m., guests can observe elephants, lions, tortoises, and other animals as they think about and work for this special treat. While watermelon may not be found naturally in an animal’s environment, it stimulates various behaviors. Zoo education staff will be on hand for chats about the enrichment activities and other exciting ways to explore Reid Park Zoo. Watermelon eegee’s will be available in the Zoofari Café. Reid Park Zoo: https://bit.ly/1dJgCDh

Simon Property Reaches Settlement in Antitrust Investigation by New York “New York State Attorney General Eric Schneiderman and retail property giant Simon Property Group Inc. reached an antitrust settlement that requires Simon to end practices that protected its wildly popular Woodbury Common Premium Outlets from competition, according to a statement released by the attorney general’s office.” (Wall Street Journal, subscription required)

McDonald’s to close 169 outlets in India in franchise battle — McDonald’s India has announced it will close nearly 170 McDonald’s outlets in northern and eastern India after the American fast food giant decided to terminate a franchise agreement with its Indian partner. McDonald’s said its partner Connaught Plaza Restaurants violated the terms of the franchise agreement, including reneging on payment of royalties.

Americans Shift from Spending at Mall to Spending on Health Care “The brick-and-mortar retail industry is in crisis. For many old-line retailers, sales and market share are plunging fast. The most obvious explanation for their distress is the rise of online shopping, but some analysts mistakenly point to another trend: ‘Shoppers are choosing experiences over stuff, and that’s bad news for retailers.’ Instead of purchasing a couch, we’re going to Paris! Or maybe buying avocado toast.” (MarketWatch)

Chesapeake Real Estate Group Acquires 259 Acres in Curtis Bay “Chesapeake Real Estate Group has acquired 259 acres in Anne Arundel County and plans to develop up to 1 million square feet of industrial and warehouse space there. The Baltimore-based real estate company acquired the Curtis Bay property, known as Brandon Woods III, from Exelon Corp. Financial terms were not disclosed. Chesapeake and partner EverWest Real Estate Partners expect to break ground in September on the $75 million project’s first phase: a 500,000-square-foot industrial building.” (Baltimore Sun)

Famed Plaza Hotel Is on the Block “The Indian owners of the Plaza Hotel have hired a broker to sell the New York City landmark, a sign that a world-wide scramble among investors, celebrities and governments to acquire the property could be nearing an end. Sahara Group, a Lucknow, India-based conglomerate and the hotel’s majority owner, has enlisted JLL Hotels and Hospitality Group, a unit of real-estate firm JLL, to find a buyer.” (Wall Street Journal, subscription required)

Heidi Klum Fashion at a Supermarket? Grocers Now Sell More than Food “Former supermodel Heidi Klum is known for glamour and her svelte physique, but her new women’s clothing line be sold under the same roof as candy, canned peaches and disposable diapers — at a supermarket chain. The leap from salad dressings to sun dresses is part of an industry trend. More grocery stores turning to products that have nothing to do with food.” (USA Today)

What Amenities Do Tenants Want? “Does your property have everything your tenants need? Commercial Property Executive and Kingsley Associates asked what would bring the most value to your asset. ‘Some additional amenities I would like to see are better walking trails, modern vending machines that accept credit cards and more common-area seating in the hallways for breaks or casual meetings.’ —Austin, Texas.” (Commercial Property Executive)

Ernst & Young Might Relocate to One Manhattan West “Negotiations are actively moving along for a possible relocation by Ernst & Young to Brookfield’s One Manhattan West. The professional-services giant is in talks for around 400,000 square feet, we’re told — a major commitment although not as large as previously reported. Ernst & Young is currently at 5 Times Square. Asking rents at One Manhattan West run to $105 a square foot, my colleague Lois Weiss recently reported.” (New York Post)

Ross Stores Remains the Big Winner of Brick-and-Mortar Retail “Most U.S. retailers produced better results last quarter than they did in the first few months of 2017. Nevertheless, the vast majority of them posted second-quarter adjusted earnings that were flattish or down on a year-over-year basis. Ross Stores was the biggest exception. The off-price giant reported strong sales growth and a 15% jump in earnings per share, outpacing its larger off-price rival TJX. With American consumers still laser-focused on getting the most bang for their buck, Ross Stores’ success is likely to continue for the foreseeable future.” (The Motley Fool)

Related Seeks $30M More in EB-5 Financing for Hudson Yards “Related Companies is seeking $30 million more in EB-5 financing for 35 and 55 Hudson Yards and the Western Rail Yards. The company is looking for $10 million each for 35 and 55 Hudson Yards — respectively, a 1.1 million-square-foot mixed-use tower and a 1.7 million-square-foot office building — after requesting hundreds of millions of dollars for the towers two months ago, New York YIMBY reported.” (The Real Deal)

NASA Opens 118 KSF Biomedical Lab “The Johnson Space Center at NASA in Houston has opened the Human Health and Performance Laboratory (Building 21), a 118,000-square-foot biomedical laboratory facility, designed by HDR based on NASA technical requirements. The facility is home for the JSC Human Health and Performance Directorate, the primary agency organization focused on improving the health of astronauts and their performance while mitigating the human system risks associated with spaceflight.” (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.

Monday, the Standard & Poor’s 500 index rose 2.82 points, or 0.1 percent, to 2,428.37. The Dow Jones industrial average gained 29.24, or 0.1 percent, to 21,703.75. The Nasdaq composite slipped 3.40 points, or 0.1 percent, to 6,213.13.

Benchmark U.S. crude fell $1.14 to settle at $47.37 per barrel. Brent crude, the international standard, lost $1.06 to $51.66 a barrel. Natural gas rose 7 cents $2.96 per 1,000 cubic feet, heating oil fell 5 cents to $1.57 per gallon and wholesale gasoline lost 4 cents to $1.58 per gallon.

Get Started: FBI warns of spreading W-2 email theft scheme –– The IRS is warning of a sharp increase in email phishing scams involving employees’ W-2 forms — scams that can put staffers’ Social Security numbers in the hands of thieves. The government says 200 businesses, schools and organizations were victimized by these scams during this year’s tax filing season. Cyberthieves send emails that appear to come from executives inside the organizations. The emails ask payroll or human resources staffers to send a list of workers and their W-2s.

OPEN HOUSE FOR NEW SALES TAX PROGRAM – The public is invited to the kickoff of Tucson Delivers – Better Streets, part of the voter-approved five-year, half-cent sales tax to fund street repairs. Nearly $100 million is expected to be generated, and the City’s Bond Oversight Commission wants input on the repair plan for neighborhood streets and major roads. Come meet the team, view the maps, and learn how streets are evaluated for repair. The open house is scheduled for this Thursday, Aug. 24, 6-7:30 p.m., at the Sabbar Shrine Center, 450 S. Tucson Blvd. For questions or accommodations, call (520) 622-9000. The remaining $150 million the sales tax generates will be used for vehicles, equipment, and facilities for the Tucson Police and Tucson Fire departments.

STREETCAR REACHES MILESTONE – Sun Link reached another historic milestone last week, boarding its 3 millionth streetcar passenger. In celebration of the occasion, Sun Link is running a social media contest, asking passengers to identify a picture of a particular location along the streetcar line. Passengers will then be asked to take a selfie at the location and post it on Facebook, Twitter, or Instagram using the hashtag #SunLinkSelfie. Those who participate could win prizes, including a new 3-Day Pass. Sun Link celebrated its third anniversary last month.

TUCSON ROADRUNNERS RELEASE PROMOTIONAL SCHEDULE – The Tucson Roadrunners have plenty of special promotions and giveaways scheduled during their upcoming second year of play at the Tucson Convention Center. The American Hockey League (AHL) team has special promotions on food and drinks, as well as rally towels, bobbleheads, military appreciation night, T-shirt giveaways, free fidget spinners, superhero night, and more. For a complete list of the promotional and game schedules, please follow the links below. Opening night is Oct. 7 at the Tucson Arena. The Roadrunners will host the San Diego Gulls at 7:05 p.m.

China’s Great Wall considers bid for Fiat Chrysler Jeep unit — Spokespeople for Chinese SUV maker Great Wall Motors say it is considering making a bid to buy Fiat Chrysler’s Jeep unit, in a possible ambitious new step onto the global stage for China’s fast-growing auto brands. Great Wall has yet to formally declare its interest in Jeep but a possible acquisition would be in line with its chairman’s goal of becoming the top specialty SUV producer by 2020.

Here’s How Amazon-Proof These 13 Types of Retailers Are “It goes without saying that retail is evolving. More shopping is occurring online, but the pace of change is uneven. ‘You can’t paint retail with broad brush strokes,’ James Cook, JLL’s director of retail research, told CNBC in an interview. ‘You have to talk about the category changes … instead of saying retail is going down the tubes.’ JLL took a look at 13 retail categories using consumer opinion data gathered by the firm, store closure statistics, same-store sales growth and e-commerce penetration, to gauge how it will look in the future.” (CNBC)

Norway’s Wealth Fund Takes 48 Percent Stake in New York Property “Norway’s $975-billion sovereign wealth fund, the world’s largest, has bought a 48-percent stake in a New York City property, it said on Monday. Norges Bank Real Estate Management paid $223 million for the stake in the 93-year ownership interest of 375 Hudson Street from Trinity Church Wall Street, valuing the property at $865 million. The deal was done in a joint venture with Trinity Church Wall Street and Hines, the Norwegian fund added.” (Reuters)

WeWork and Other Firms Test Brooklyn’s Office Market “Samuel Rudin, the late patriarch of one New York’s oldest real estate dynasties, built the family’s real estate portfolio with a rule: if a property wasn’t accessible by subway, he wasn’t interested. Now the Rudin family is tweaking that rule, adding another mode of transportation—a ferryboat. The Rudin family and office giant Boston Properties Inc. are in the midst of building a 675,000 square-foot office building.” (Wall Street Journal)

How Is Commercial Real Estate Taxation Unfair to Other Investors? “Next up in Washington will be tax reform since an easy, no-brainer like infrastructure improvement has been put on hold until sometime later in 2018. Fixing roads and bridges awaits the findings of the new committee formed to study the subject — which really means a fight over which states deserve to receive the forthcoming pork. Where was I? Oh yes. Tax reform. But first, I’ll note that one aspect of returning to a summer home for vacation is that all the magazines lying around are from July and August of the previous year.” (Mercury News)

Republican Committees Have Paid Nearly $1.3 Million to Trump-Owned Entities This Year “The Republican National Committee paid the Trump International Hotel in Washington $122,000 last month after the party held a lavish fundraiser at the venue in June, the latest example of how GOP political committees are generating a steady income stream for President Trump’s private business, new Federal Election Commission records show. At least 25 congressional campaigns, state parties and the Republican Governors Association have together spent more than $473,000 at Trump hotels or golf resorts this year, according to a Washington Post analysis of campaign finance filings.” (Washington Post)

Walmart Wants to Take on Amazon with Flying Warehouses “Wal-Mart Stores Inc. has opened a new front in its battle with Amazon.com Inc. The world’s largest retailer has applied for a U.S. patent for a floating warehouse that could make deliveries via drones, which would bring products from the aircraft down to shoppers’ homes. The blimp-style machine would fly at heights between 500 feet and 1,000 feet (as much as 305 meters), contain multiple launching bays, and be operated autonomously or by a remote human pilot. Amazon was granted a patent for a similar vessel in April 2016.” (Fortune)

Frank Sinito Has Sky-High Hopes for Real Estate Portfolio “Frank Sinito recently bought the 57-story Key Tower and the attached 400-room Marriott Cleveland Downtown in a $267 million deal. It’s a long reach for a Cleveland native who started out with a 14-suite apartment complex and a bar in the suburbs. But at 54 with a tireless devotion to work, he’s fine-tuning things at the Key Center complex and has his eye on another big downtown building and renovation project.” (Crain’s Cleveland Business)

CoStar Moves to Dismiss Xceligent’s Antitrust Countersuit “CoStar Group is asking a Missouri judge to dismiss the countersuit Xceligent filed against the data giant in late June alleging the company had engaged in years of anti-competitive behavior.  The D.C.-based commercial real estate data company filed a 27-page motion to dismiss with the U.S. District Court for the Western District of Missouri Thursday, arguing Xceligent did not present adequate claims to merit a court judgment.” (Bisnow)

Sheldon’s Grey Cloud and Silver Lining “The recent overturning of Sheldon Silver’s 2015 corruption conviction raises key questions for both the real estate industry and those who police it: Do landlords and developers have clearer guidelines on what counts as corruption, or will heightened scrutiny and a likely retrial only bring more of them into the witness box? Although the former State Assembly speaker was sentenced to 12 years in prison for schemes involving real estate developers, he was spared last month by a Supreme Court decision that cleared former Virginia Governor Bob McDonnell of corruption charges in 2016 — a ruling that redefined what could be considered an official act by a politician.” (The Real Deal)

Entrada Snags DFW Office/Industrial Portfolio “Entrada Partners recently snagged an office and industrial portfolio in the Dallas-Fort Worth area, thanks in no small part to HFF. The commercial real estate and capital markets services provider arranged a loan with Bank of America Merrill Lynch for Entrada’s purchase of the 508,800-square-foot group of properties. The financing came in the form of a floating-rate, non-recourse loan with a three-year term and the option for two one-year extensions.” (Commercial Property Executive)