Real Estate Daily News Buzz July 11, 2017

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Real Estate Daily News Buzz July 11, 2017

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 2.25 points, or 0.1 percent, to 2,427.43. The Dow Jones industrial average slid 5.82 points, or 0.03 percent, to 21,408.52. The Nasdaq composite rose 23.31 points, or 0.4 percent, to 6,176.39.

Benchmark U.S. crude added 17 cents to settle at $44.40 a barrel in New York. Brent crude, used to price international oils, also rose 17 cents to close at $46.88 a barrel in London. In other energy trading, wholesale gasoline was little changed at $1.50 a gallon. Heating oil also held steady at $1.45 a gallon. Natural gas rose 7 cents, or 2.3 percent, to $2.93 per 1,000 cubic feet.

US consumer credit up $18.4 billion in May, most in 6 months — American consumers increased their borrowing in May at the fastest pace in six months, reflecting a sharp rebound in the category that includes credit cards. The Federal Reserve reports that total consumer borrowing rose by $18.4 billion in May, the strongest gain since a $25.1 billion increase in November. (AP)

Whole Foods Saving Amazon – not the other way around — The dust has barely settled from the recent announcement that Amazon will buy Whole Foods Market for $13.4 billion later on this year, but the reigning sentiments seem clear: Amazon saved the declining grocery store and, in doing, boosted its own value proposition. Amazon’s bread and butter is ecommerce and, while they own 43% of that market, that’s just a sliver of the retail industry. Over 90% of purchases happen in physical stores. With its purchase of Whole Foods, Amazon is not only investing in brick-and-mortar but also securing a spot in the $750 billion grocery market—and the perks that come with it.

News outlets seek to negotiate with Google, Facebook on ads — News outlets are seeking permission from Congress for the right to negotiate jointly with Google and Facebook, two companies that dominate online advertising and online news traffic. The News Media Alliance, which represents nearly 2,000 news organizations, says because of those two companies’ dominance, news publishers are forced to “play by their rules.” The news industry has been hit with declining print readership and a loss of advertising revenue as it has moved online. (AP)

Abercrombie takes itself off the block and shares plunge — Abercrombie & Fitch is no longer up for sale, and that isn’t sitting well with investors who were looking for a white knight to rescue the struggling teen retailer. More people are shopping at lower-cost, fast-fashion stores like H&M and Forever 21, and that has wreaked havoc on one-time mall mainstays like Abercrombie. (AP)

Facebook and Google are Both Building More Affordable Housing in Silicon Valley “One day, Facebook employees will only have to cross the street to commute to the tech giant’s Menlo Park headquarters. In a blog post on Friday, Facebook announced plans to turn the 56-acre Menlo Science & Technology Park it bought in 2015 into a company town, dubbed the Willow Campus. Located across the street from the company’s current campus, it will include a grocery store, pharmacy and shopping center.” (CNBC)

When it Comes to L.A. Development Projects, Does Anyone Really Care What the Neighbors Think? “As the city of Los Angeles sets its sights on increased density to accommodate our ever-growing population, a proposed five-story apartment complex at the top of the block — where Gateway, Pico and Exposition boulevards converge — has many nearby homeowners worried that the character of their peaceful, low-slung neighborhood will be lost in the shadow of a looming apartment complex. They are particularly upset because the city has given the developer — at no cost — a 100-foot alley that divides the land into two separate parcels.” (Los Angeles Times)

Michigan’s New Motor City—Ann Arbor as a Driverless-Car Hub “As the world looks ahead to a future of interconnected, self-driving cars, this college town 40 miles west of Detroit has emerged as a one-of-a-kind, living laboratory for the technologies that will pave the way. Here, it is not uncommon to see self-driving Ford Fusions or Lexus sedans winding their way through downtown streets and busy intersections, occupied by engineers with eyes focused more on laptops and test equipment than the roadway.” (The New York Times)

House Oversight Committee Investigated HUD Brooklyn Housing Co-Owned by Trump for Possible Conflicts of Interest “The House Committee on Oversight and Government Reform has opened an inquiry into the many potential conflicts of interest involved in President Trump’s financial interest in the huge Brooklyn apartment complex known as Starrett City. The complex, located in Brooklyn by the Belt Parkway, receives millions of dollars in subsidies from his administration and is facing an inspection by the U.S. Department of Housing & Urban Development (HUD) in the coming weeks.” (New York Daily News)

Bay Area Property Assessments Hit $1.6 Trillion After 7.4% Rise “Thanks to new construction, rising real estate prices and higher inflation, the assessed value of Bay Area real and personal property rose to about $1.6 trillion for 2017-18, up by $110 billion, or 7.4 percent, from the year before. That’s according to reports from county assessors, who generally must complete their roll by July 1 each year. The roll is the assessed value (which is not the market value) of all taxable property as of Jan. 1 the same year. The vast majority of taxable property is residential and commercial real estate.” (San Francisco Chronicle)

Boulder County Area Malls Turn Doom-and-Gloom Retail Forecast on its Head “It may be that the mall of the future looks a lot like those already present in the Boulder County area. Operators, enjoying a time of rapid population and economic expansion, are shunning traditional retailers and bringing in a mix of office, entertainment and food tenants to bolster revenue while still offering a more traditional mall experience with dozens of clothing merchants. ‘This is a vibrant, growing market,’ said Kim Campbell, property manager for FlatIron Crossing. ‘More people, more rooftops equal strong retail sales, and malls are thriving.’” (Times-Call)

Black’s Money: A Bizarre Co-Working Scheme and the Global Rise of Online Real Estate Fraud “On the surface, Bar Works is just another co-working company. Wedged between Seventh Avenue and Morton Street, with large windows and arching brick walls inside, the street-level space could make for a quaint restaurant. Instead it’s got bland desks dotted with telephones, wheely chairs covered in gray velvet, and a fully-stocked bar. It calls itself a ‘workspace with vibe,’ a fair description if the vibe you’re going for is a cross between a WeWork, a dive bar and an airport terminal. In reality, however, the space, along with other Bar Works locations in Manhattan, Brooklyn, San Francisco, Las Vegas, Miami and Istanbul, served as a front for Renwick Robert Haddow, a British career fraudster.” (The Real Deal)

Nation’s Greenest Office Markets: CBRE Report “Energy benchmarking ordinances are increasing in the United States and appear to be having an impact on the office market. Nine of the cities that placed in the top 10 of the fourth annual Green Building Adoption Index have implemented the new rules and the number of green certifications have risen. The percentage of commercial office space in the top 30 U.S. markets that has been certified as ‘green’ or ‘efficient’ is now 38 percent, up from less than five percent in 2005, according to the study done by CBRE and Maastricht University in collaboration with the U.S. Green Building Council.” (Commercial Property Executive)

Community Drives Development “Connecting with other people has become a big part of choosing the right housing for many residents. They’re looking for a place that makes them feel they fit in, where they can picture their friends living as well. Often, this intangible residential feature has nothing to with amenities. Rather, it’s about the people in the community and the activities that drive their engagement with the property.” (Multifamily Executive)

How Much Longer Can Carson’s Hang On? “There’s been much hand-wringing over the troubled futures of Macy’s, Sears and J.C. Penney, which together are planning to close more than 450 stores in coming months as sales sink. The outlook is just as dire for another department store chain—Carson’s, the 160-year-old retailer that has long played second fiddle to Macy’s in metro Chicago. Carson’s, which actually outnumbers Macy’s in the market with 22 locations to Macy’s 17, is feeling the weight of its money-losing parent, Bon-Ton Stores, which runs 261 stores in 25 states from twin headquarters in Milwaukee and York, Pa.” (Crain’s Chicago Business)

 




Real Estate Daily News Buzz July 10, 2017

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Real Estate Daily News Buzz July 10, 2017

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.

U.S. stocks climbed Friday after the government said hiring grew at a stronger pace in June. Technology and consumer-focused companies led the way as investors were glad to see a positive sign for the economy.

On Friday, the Standard & Poor’s 500 index surged 15.43 points, or 0.6 percent, to 2,425.18. The Dow Jones industrial average climbed 94.30 points, or 0.4 percent, to 21,414.34. The Nasdaq composite jumped 63.61 points, or 1 percent, to 6,153.08. The Russell 2000 index of smaller-company stocks advanced 15.02 points, or 1.1 percent, to 1,415.84.

For the week, the S&P 500 edged up 1.77 points, or 0.1 percent. The Dow gained 64.71 points, or 0.3 percent. The Nasdaq rose 12.66 points, or 0.2 percent. The Russell 2000 added 0.48 points.

For the year, the S&P 500 is up 186.35 points, or 8.3 percent. The Dow is up 1,651.74 points, or 8.4 percent. The Nasdaq is up 769.96 points, or 14.3 percent. The Russell 2000 is up 58.71 points, or 4.3 percent.

Walmart is building giant self-service kiosks in its stores that retrieve customers’ online orders -The first kiosk appeared in a Walmart store in Bentonville, Arkansas, last year. The company is now rolling them out to more than a dozen stores in cities including Gilbert, Arizona; Glenpool, Oklahoma; Enterprise and Auburn, Alabama; Gwinnett County, Georgia; and Midlothian, Virginia. The kiosks, which Walmart calls Pickup Towers, are massive — standing at least 16 feet tall and about 8 feet wide — and are typically near store entrances.

Hilton Sees Room for Growth with New Low-Price Brand “At first glance, the new hotel chain on track to be the fastest-growing in the U.S. resembles a boutique brand that might be found in a trendy, urban location. But Hilton Worldwide Holdings Inc.’s new midprice brand, Tru, is pricing rooms at around $100 a night or less and is largely aimed at less flashy locales.” (Wall Street Journal, subscription required)

Bon Ton Stores, Sears, J.Crew Lead List of Retailers with High Risk of Default “Default rates for U.S. retailers are poised to climb in the near-term and department store chains and specialty retailers are most at risk. There are currently nine retailers with a credit risk estimate (CRE)–a measure of an issuer’s one-year forward default probability — that was above 5% at the end of June, according to research firm CreditSights. That’s based on the firm’s BondScore default risk model, which covers 34 of the 58 U.S. high-yield retailers that are included in the Bank of America Merrill Lynch US High Yield Index.” (MarketWatch)

A Surprising Way to Increase Property Values: Build Affordable Housing “Despite the lawsuits, media spotlight and conventional wisdom, affordable housing developments built in poor, heavily black communities can lead to greater racial and income integration, according to new research by Stanford economists. Such housing, funded by federal tax credits, also raises property values and lowers crime in surrounding neighborhoods as higher-income white residents move in, the researchers found.” (Washington Post)

Chinese Investment in U.S. Real Estate Could Fall Dramatically in 2017: Report “Chinese investment in overseas real estate could drop by as much as 20 percent in 2017 amid tighter capital controls and a slowing economy, according to a new report by property search portal Juwai. Outbound real estate investment by Chinese firms and individuals reached a record $101.4 billion in 2016, but Juwai expects it to fall to around $80 billion in 2017.” (The Real Deal)

California Senate OKs Real Estate Fee to Fund More Housing “The California state Senate approved a new fee Thursday on real estate transaction documents to generate hundreds of millions of dollars for affordable housing. The legislation would impose a $75 fee on documents such as deeds and notices, with a cap of $225 per transaction. It’s expected to generate between $200 and $300 million annually for affordable housing projects. It passed 27-12 with all Democratic votes and now heads to the Assembly.” (Associated Press)

Friedman Secures Buyer for Detroit Office Building “Friedman Integrated Real Estate Solutions closed on another office deal in Michigan—an 85,539-square-foot building located at 440 E. Congress St., in Detroit’s CBD. The owner, Broder & Sachse Real Estate Services, sold the property to 311 Associates. Peter Jankowski, vice president with Friedman, brokered the transaction. The mid-rise building sits on the corner of Congress and Beaubien Streets, right across from Saint Andrews Hall. Built in 1925, it went through two major renovations in 1990 and 2014, when the main lobby and tenant common areas were upgraded.” (Commercial Property Executive)

Physical Retail: Definitely Different, Far from Dead “it is crystal clear that years of overbuilding, failure to innovate on the part of most traditional retailers, shifting customer preferences and market-share grabs from transformative new models that aren’t held to a traditional profit standard (mostly the little outfit in Seattle) are creating fundamentally new dynamics.  Physical retail is not going away, but digital disruption is transforming most sectors of retail profoundly. Here are a few important things to bear in mind.” (Forbes)

Extell Bondholders Could Face Early Repayment on Barnett’s Bonds “Israeli investors in Gary Barnett’s Extell Development could demand early repayment of the company’s Series A bonds, sources told The Real Deal. About 40 private and institutional bondholders met Thursday in Israel to discuss concerns about Barnett’s ability to meet his payments on the bonds, the first of which is a $180 million payout in December 2018. In late May, bondholders grew anxious after a first-quarter report showed flaccid results, and bond yields rose to 14 percent.” (The Real Deal)

CRE Opinion: Need Current Income? PE Real Estate Might Be the Answer “Unlike some other asset classes that help diversify a portfolio, real estate is backed by something tangible. We can see and touch an office building, apartment building, or self-storage facility, while many other investments represent nothing more than a belief in a piece of paper. As a hard asset, real estate can also act as a volatility hedge in ways other investments can’t. Barring a catastrophic event, property will survive even if currency or traditional investments lose much of their value.” (D Magazine)

 




Real Estate Daily News Buzz July 7, 2017

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Real Estate Daily News Buzz July 7, 2017

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.

U.S. stocks had their biggest drop since mid-May Thursday as investors worried about the latest sign that hiring is slowing down. Energy and health care companies and fell sharply, and so did retailers.

Payroll processor ADP reported early Thursday that hiring by private companies slowed in June. The biggest losses were in health care and technology stocks. Drugmaker Merck lost 1.7 percent and Apple fell 0.9 percent. L Brands, the parent company of Victoria’s Secret, plunged 14 percent after reporting weak sales in June.

On Thursday, the Standard & Poor’s 500 index lost 22.79 points, or 0.9 percent, to 2,409.75. The Dow Jones industrial average skidded 158.13 points, or 0.7 percent, to 21,320.04. The Nasdaq composite tumbled 61.39 points, or 1 percent, to 6,089.46. The Russell 2000 index of smaller-company stocks plunged 19.33 points, or 1.4 percent, to 1,400.81.

For the week, the S&P 500 is down 13.66 points, or 0.6 percent. The Dow is down 29.59 points, or 0.1 percent. The Nasdaq is down 50.96 points, or 0.8 percent. The Russell 2000 is down 14.54 points, or 1 percent.

For the year, the S&P 500 is up 170.92 points, or 7.6 percent. The Dow is up 1,577.44 points, or 7.9 percent. The Nasdaq is up 706.35 points, or 13.1 percent. The Russell 2000 is up 43.68 points, or 3.2 percent.

Tucson to donate old motorcycles to Mexico – The Mayor and Tucson City Council last night voted to donate five Harley-Davidson motorcycles to Nogales, Sonora. Once used by the Tucson Police Department, the motorcycles will increase the Nogales Police Department’s enforcement in its downtown area. The five Harleys are not in running condition and may have missing parts, but Nogales will fix them to augment its current fleet of six motorcycles for 20 police officers.

Mayor and Council salary increase question to be sent to voters – City voters will get a chance this November to decide whether to grant raises to the Mayor and Tucson City Council. The Nov. 7 ballot question will ask voters to approve or reject a raise for each member of the Tucson City Council, increasing their pay from $2,000 per month to $3,300. The mayor would get $5,775 a month, up from the current salary of $3,500. The Tucson City Charter requires the salary question to appear on the ballot every two years during a general election. The exact amount is recommended by the Citizen’s Commission on Public Service and Compensation.

Adoption fees waived at  PACC – Citing critical overcrowding and an influx of lost pets from the 4th of July fireworks, Pima Animal Care Center (PACC) is waiving adoption fees through Sunday for all dogs, cats, puppies, and kittens. PACC also is waiving redemption fees for pet owners who lost their pets and want to get them back. The fee waiver applies at the PACC shelter, 4000 N. Silverbell Road, and all five PetSmart adoption locations. The only fee that may apply to those who adopt a pet or redeem their lost pet is a $17 licensing fee for adult dogs.

Summer movie series downtown continues – The Cinema La Placita summer movie series hosts classic movies in an outdoor setting every Thursday night at 7:30, May through August. Tonight’s movie is Jaws (1975), starring Roy Scheider, Richard Dreyfuss, and Robert Shaw. This year, the movies are shown in the plaza at the Tucson Museum of Art, 140 N. Main Ave. Hundreds of Tucsonans enjoy the summer evenings with a different movie each week for $3 per person (includes popcorn).

Summer Safari nights Fridays at Reid Park Zoo – Summer Safari Nights 2017 continues tomorrow at Reid Park Zoo. The program runs 6-8 p.m. every Friday until Aug. 4. Visit the Zoo during cooler evening temperatures, and enjoy the added benefits of live music, family-friendly animal features, special dining options, and gift shop discounts. Each night will feature face painting, glitter tattoos, enrichment stations, artifact stations, the carousel, camel rides, and animal encounters. Regular admission applies, but some activities require an additional fee. Tomorrow’s theme will focus on caring for carnivores.

Fed Officials Split Over Timing on Reducing Debt Holdings “The Fed has said it wants to launch the balance sheet plan this year, but officials are divided between starting in September and waiting until December. The minutes of the June meeting said several officials wanted to start ‘within a couple of months,’ while others favored waiting. The Fed published the meeting account Wednesday after a standard three-week delay.” (The New York Times)

Goldman Raised $1B for a Real Estate Fund, Putting 2007 Fail Behind It “It was the biggest blot on the copybook of the investment bank that came out of the credit crunch in better shape than any other. But Goldman Sachs has transformed its real estate business and is back raising huge amounts of capital to put to work in the sector. Documents filed with the Securities and Exchange Commission show that the investment bank has raised $1B for a new real estate fund, Broad Street Real Estate Credit Partners III.” (Forbes)

Fed’s Powell Says Current U.S. Housing Finance System ‘Unsustainable’ “The US housing finance system continues to put taxpayers at risk in a market dominated by government-backed agencies, Federal Reserve Governor Jerome Powell said on Thursday, calling for further reform of an ‘unsustainable’ situation. A decade after doubts about the creditworthiness of mortgage-backed securities helped trigger the worst financial crisis since the Great Depression, systemic risk in housing remains given the concentration of mortgages in the duopoly of Fannie Mae and Freddie Mac, he said.” (Reuters)

Cabela’s-Bass Pro Merger Gets FTC Blessing “The Federal Trade Commission on Monday notified Cabela’s that its proposed merger with rival Bass Pro Shops can proceed, according to a filing with the Securities and Exchange Commission. The deal must yet garner approval from Cabela’s shareholders, which the outdoor retailer is seeking at a special meeting scheduled for July 11. The similarities of the two retailers makes the merger at once rational and a target of careful scrutiny from regulators, Scott Wagner, an antitrust expert and partner in law firm Bilzin Sumberg’s litigation group, told Retail Dive last year.” (Retail Dive)

Online Clothing Retailer Eloquii Ready to Open Brick-and-Mortar Stores “The unlikely journey of Columbus-based online retailer Eloquii is about to get even more unlikely. The plus-size fashion brand will go from ‘clicks to bricks’ by opening a store in September at Easton Town Center in a space once occupied by its former parent, the now-bankrupt the Limited. ‘If you would have asked us about four years ago if this would happen, we would have said you were crazy,’ said Julie Carnavale, chief merchandising officer.” (Columbus Dispatch)

Natixis Issues First Green CMBS Rake Tranch Backed by 85 Broad Street “Natixis has issued the first “green” commercial mortgage-backed securitization rake tranche backed by 85 Broad Street. The issuance was oversubscribed after being met with strong demand from both U.S. and overseas investors, according to an announcement by the lender today. The $72 million green-specific tranche (the ’85 Broad Street Loan-Specific Certificates’), issued in collaboration with Ivanhoé Cambridge and Callahan Capital Properties, is part of the Credit Suisse-sponsored CSAIL 2017-C8 CMBS deal. The issuance refinances part of the $358.6 million fixed-rate, first mortgage loan that Natixis provided to Ivanhoé Cambridge.” (Commercial Observer)

Group Uses New Tool to Press Ban on Tall Towers in East Midtown “The rebellion against super tall skyscrapers rising in New York City has found a new weapon: grass-root do-it-yourself zoning rules. The push, by opponents of a new 800-foot tall condo tower under construction on East 58th near the East River, has gained surprising bureaucratic traction during the past few months, despite potential opposition from City Hall.” (Wall Street Journal, subscription required)

Kroger Sues German Grocery Chain Lidl Just Two Weeks After it Lands in the U.S. “Kroger is suing the German grocery chain Lidl over trademark infringement. In the lawsuit, Kroger claims that Lidl’s private-label brand called ‘Preferred Selection’ too closely resembles Kroger’s own house brand, ‘Private Selection.’ The close resemblance of the names will cause confusion for customers and allow Lidl to ‘compete unfairly’ with Kroger, because customers could assume that the two brands are associated with one another, the lawsuit states.” (Business Insider)

Harrison Street Opportunistic Fund Raises $1.1 Billion “Harrison Street Real Estate Capital LLC recently closed Harrison Street Real Estate Partners VI LP with a bang. Fund VI, Harrison Street’s sixth U.S. opportunistic real estate fund, surpassed its $850 million target by a long shot, reeling in a total of $950 million in equity commitments and raising an additional $205 million of equity capital in co-investment vehicles, for a total raise of approximately $1.15 billion. A lot can happen in a year; Fund VI launched in late July 2016. Like the real estate investment management firm’s previous five closed-end opportunistic funds, Fund VI focuses on investing in the education, health care and storage sectors.” (Commercial Property Executive)

How Much is Nashville’s Greer Stadium Property Worth? Proposed Deal Under Scrutiny “A proposed lease deal to redevelop Nashville’s Greer Stadium property is facing scrutiny from a top Metro Council critic of Mayor Megan Barry’s administration who says the city’s financial return wouldn’t come close to matching the market value of Greer’s 20-plus acres. But the mayor’s office is firing back, saying the intent has never been to sell the city-owned land to the highest bidder, but rather to find the most appropriate uses for the neighborhood.” (The Tennessean)

 




Real Estate Daily News Buzz July 6, 2017

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Real Estate Daily News Buzz July 6, 2017

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.
U.S. stock indexes were mixed Wednesday as energy companies skidded along with oil prices, but technology stocks rose and reversed a portion of their recent losses.

On Wednesday, the Standard & Poor’s 500 index gained 3.53 points, or 0.1 percent, to 2,432.54. The Dow Jones industrial average lost 1.10 points to 21,478.17. The Nasdaq composite picked up 40.80 points, or 0.7 percent, to 6,150.86. The Russell 2000 index of smaller-company stocks fell 6.54 points, or 0.5 percent, to 1,420.15.

For the week, the S&P 500 is up 9.13 points, or 0.4 percent. The Dow is up 128.54 points, or 0.6 percent. The Nasdaq is up 10.43 points, or 0.2 percent. The Russell 2000 is up 4.79 points, or 0.3 percent.

For the year, the S&P 500 is up 193.71 points, or 8.7 percent. The Dow is up 1,715.57 points, or 8.7 percent. The Nasdaq is up 767.74 points, or 14.3 percent. The Russell 2000 is up 63.02 points, or 4.6 percent.

How to Help the Burro Wildfire Efforts — People in the community have inquired about what they can do to help those working on the Burro Fire firefighting effort. This link from the Inciweb site provides some ideas with details of things we can all do to help.

Office Market Growth Slows “The pace of office-space leasing slowed in the second quarter, mostly because of sluggish activity in the country’s top five markets, according to new figures from data firm Reis Inc. The amount of occupied office space in New York, Los Angeles, Chicago, Houston and Dallas increased by a total of 789,000 square feet in the three-month period ending in June.” (Wall Street Journal, subscription required)

City Cracks Down on Office Roof Terraces “Big Apple real-estate developers and landlords are raising the roof over a citywide crackdown on office tower roof terraces — which have recently become the must-have amenity for tenants. Major new projects around town are imperiled or are being delayed by a bizarre, ‘out of left field’ interpretation by the Department of Buildings of 1961 zoning language that was only intended to stop a proliferation of outdoor flea markets, multiple sources told The Post. The 56-year-old zoning code stated that ‘all uses must be contained within enclosed buildings.’” (New York Post)

Treasury Yields Steady Before Release of Fed Minutes “Treasury yields were largely unchanged ahead of the Fed minutes from the June meeting that could give investors insight into how central-bank officials are lining up in the hawks-vs.-doves debate amid deteriorating inflation. The yield for the benchmark 10-year Treasury note steadied at 2.350%. The 2-year note’s yield added 1.2 basis point to 1.422%, while the yield for the 30-year bond fell 0.3 basis point to 2.863%. Bond prices go up when yields go down; one basis point is one one-hundredth of a percentage point.” (MarketWatch)

More Securitized Commercial Real Estate Debt Becomes Delinquent in June “The delinquency rate for securitized commercial real-estate loans jumped 28 basis points to 5.75% in June from May, the biggest month-over-month increase since March 2012 and up sharply from the 4.6% recorded in June last year, according to real estate provider Trepp Inc.” (Wall Street Journal, subscription required)

Jersey City is a Case Study in the Perils of Politics and Real Estate for the Kushners “Since the presidential election, Jersey City has turned sharply against Kushner. Opposition to Trump runs deep here, and the city has been taking out some of that hostility on the Kushner Cos., withdrawing political support for high-profile projects and shining a spotlight on the company’s business practices. Mayor Steve Fulop, a personal friend of 36-year-old Jared, abruptly yanked his support for a tax abatement at Journal Square in May. Several other Kushner projects have run into intense public opposition.” (Los Angeles Times)

Collapsing Ceilings and No Working Toilets: Sears Workers Describe Decay in Failing Stores “In interviews with Business Insider, half a dozen employees described signs of decay in the stores they work in. These include a rat problem, collapsing ceilings, empty shelves, and a lack of working toilets for weeks on end. Some of these problems started several years ago, and have been getting progressively worse, according to the employees, who asked to remain anonymous for fear of retaliation from Sears.” (Business Insider)

Capital Markets, Regulatory Shake-Ups Ruffle REIT Industry “According to the 2017 BDO RiskFactor Report for REITs, competition for assets at lucrative prices, the anticipation of tax reform and the likely drumbeat of interest rate hikes rank high on REITs’ risk radar. BDO further reports that 2017 is leaving a string of broken stock market records in its wake, but REITs have seen more modest boosts in performance. REITs registered 3.41 percent annual growth in early-June, compared to the broader S&P 500’s 9.91 gains.’ (World Property Journal)

Apple Disrupts Silicon Valley with Another Eye-Catcher: its New Home “Things change when a spaceship comes to town. Tourists stroll by, whipping out their iPhones to get a photo. New businesses move in. And real estate prices go up even more. Apple’s new home in Cupertino — the centerpiece being a $5 billion, four-story, 2.8 million-square-foot ring that can be seen from space and that locals call the spaceship — is still getting some final touches, and employees have just started to trickle in. The full squadron, about 12,000 people, will arrive in several months.” (The New York Times)

Oxford Properties JV Nabs Pair of DC Trophy Buildings “Oxford Properties Group and Norges Bank Real Estate Management, the real estate branch of the Norwegian Government Pension Fund Global, joined forces in order to acquire two prime office buildings in Washington, D.C. The LEED Gold-certified assets total more than 500,000 square feet and will be managed by Oxford, the operating partner in the joint venture.” (Commercial Property Executive)

Here’s How Trump Transferred Wealth to his Son While Avoiding the Usual Taxes “In April 2016, as Donald Trump was on the cusp of clinching the Republican nomination for the White House, he sold two luxury condos near Manhattan’s Central Park for less than half the price his company had said they were worth. The lucky buyer: Trump’s son, Eric. Such family-friendly deals would normally incur hundreds of thousands of dollars in gift taxes. But in this case, Trump appears unlikely to have been on the hook for anywhere near that, thanks to benefits only available to real estate developers.” (The Real Deal)

 

 




Real Estate Daily News Buzz June 30, 2017

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Real Estate Daily News Buzz June 30, 2017

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 20.99 points, or 0.9 percent, to 2,419.70. The Dow Jones industrial average slid 167.58 points, or 0.8 percent, to 21,287.03. The Nasdaq composite lost 90.06 points, or 1.4 percent, to 6,144.35. Benchmark U.S. crude rose 19 cents to settle at $44.93 a barrel in New York. Brent, the international standard, gained 9 cents to close at $47.63 in London. Wholesale gasoline held steady at $1.48 per gallon. Heating oil added 1 cent to $1.45 per gallon. Natural gas slipped 5 cents to $3.04 per 1,000 cubic feet.

21st ANNUAL “A” MOUNTAIN FIREWORKS CELEBRATION – TUCSON — The 21st Annual “A” Mountain Fireworks Celebration sponsored by Desert Diamond Casinos and Entertainment will start at approximately 9:15 p.m., Tuesday, July 4. Residents may enjoy the “A” Mountain Fireworks Celebration from the Tucson Convention Center’s (TCC) Parking Lot B (off Cushing Street between Granada and Church Avenue) or Parking Lot C (off Granada between Broadway Boulevard and Cushing Street). Parking will be free. There also will be entertainment and food vendors (burgers, hot dogs, ice cream, and refreshments) available from 7-9 p.m. in Lot B sponsored by Azteca  The Sun Link streetcar provides convenient access to the TCC at the Cushing Street stops. Parking will be available at the TCC and throughout downtown. The last streetcar will leave the Avenida del Convento stop 30 minutes following the conclusion of the fireworks show. Beginning at 5 p.m. on July 4, Mission Road will be closed from Starr Pass Boulevard to Congress Street. Mission Road will reopen approximately one hour following the completion of the fireworks show. Additionally, the eastbound exit ramp at I-10 and Congress and the westbound I-10 exit ramps at Silverlake and Congress will be closed from 9-11 p.m. to ease congestion. In order to accommodate the fireworks display, there will be restricted access to Sentinel Peak Park. Sentinel Peak Road will close at 6 p.m. on Monday, July 3, and will reopen to all traffic Wednesday, July 5. For more information, including ADA-related accommodations at the above-listed locations, call the Tucson Convention Center at 791-4101.

PACC services will change for Marana and Sahuarita residents on July 1 — PIMA COUNTY –Starting July 1, 2017, Pima Animal Care Center will no longer provide animal care services to residents of Marana and Sahuarita. Town residents must contact their municipal animal care divisions for all animal related inquiries. Earlier this year, the towns of Marana and Sahuarita opted out of their intergovernmental agreements with Pima County for the animal care services provided by PACC. Since then, both jurisdictions have established their own animal care services and contracted with the Humane Society of Southern Arizona to house their communities’ homeless pets. Marana Animal Services and Sahuarita Animal Services Division will handle the following animal care services for its town residents: Animal bites, Animal welfare concerns, Noise and animal waste complaints, Reports of stray pets within the town limits, Owner surrenders, Rabid animals, New dog licenses and renewals. For other service-related inquiries, residents should call Marana Animal Services at (520) 382-8020 if they reside in the Town of Marana or Sahuarita Animal Services Division at (520) 445-7877 if they live in the Town of Sahuarita.

Sewer User Fee Amnesty Program ends June 30PIMA COUNTY — Unauthorized sewer users must sign up before the deadline to avoid back bills and penalties –The deadline to apply for a one-time Sewer User Fee Amnesty Program, offered by the Pima County Wastewater Reclamation Department (RWRD), is Friday, June 30. After the deadline, users connected to the sewer system and not paying for services will be responsible for any back bills and additional penalties or other related fees. This one-time Amnesty Program will forgive back user fees charges plus related interest, administrative charges, and penalties. The program is open to anyone without a sewer user account who discharges into the Pima County sanitary sewage system. Nearly 400 unauthorized customers have signed up since RWRD began the program earlier this year. However, there’s still a remaining 700 unauthorized users identified who have not contacted RWRD to find out how they could benefit from the program and avoid back bills and penalties. For more information on the one-time Amnesty Program or to determine if you qualify, please visit the RWRD website or contact the RWRD Director’s Office at (520) 724-6511.

Pima County Youth Employment Center will open July 3 in new location Pima County’s Community Services, Employment and Training Department (CSET) is moving its Youth Employment Center to the second floor of the Sentinel Building, 340 N. Commerce Park Loop, effective July 3. CSET is the administrative entity that operates the ARIZONA@WORK Pima County One-Stop workforce development system. The move will enable the county to operate its summer youth program from the new location, as well as the ongoing activities focusing on employment resources for in-school youth age 14-21 and out-of-school, disconnected youth age 16-24. Outreach activities include employability skills workshops, case management, and small job fairs.  Several of the agencies that the county contracts with will have a presence in the 6,400-square-foot space, including the Tucson Urban League; SER-Jobs for Progress; Portable, Practical Educational Preparation; Goodwill; Community Outreach Program for the Deaf; and Tucson Youth Development. In addition, the Sentinel Building location puts the Youth Employment Center right next door to the county’s Rio Nuevo Service Center, which assists unemployed adults and provides key services to job-seekers, notably adult education services, employment services, vocational rehabilitation, and Job Corps programs. The Youth Program is designed to get young adults “work ready” either through post-secondary education and training opportunities or other skills workshops.  The new facility offers more space than the current Youth Employment location at 2723 S. Park Ave., as well as easy access to the bus line and Pima Community College’s Community Campus.

Work program for homeless expands (VIDEO) – The Tucson Homeless Work program is only 6 months old, but it’s already growing. Starting next month, the one-year pilot program will be expanding to three days a week and will include two more partners. Sister Jose Women’s Center and Pima Animal Care Center will join the program to serve a more diverse group of people and help animals in need. Since the program began last December, 166 homeless workers have cleaned more than 55 miles of roadways and picked up about 37,000 pounds of trash. Seventeen people who participated in the program have found housing. The program, which allows homeless people to join a day-labor crew to clean streets and medians for $10 an hour in cash, was made possible by initial contributions from the City of Tucson, Pima, County, and HSL Properties.

Tucson Water seeks candidates for two administrator positions – Tucson Water is looking for two professionals to oversee the utility’s Water Quality and Operations Division and the Maintenance Division. Applicants should have the technical knowledge and skills necessary to be a leader at a large water system serving more than 722,000 customers. The application deadline is July 28.

Summer movie series continues tonight – The Cinema La Placita summer movie series hosts classic movies in an outdoor setting every Thursday night at 7:30, May through August. This year, the movies are shown in the plaza at the Tucson Museum of Art, 140 N. Main Ave. Hundreds of Tucsonans enjoy the summer evenings with a different movie each week for $3 per person (includes popcorn). Tonight’s movie is The Manchurian Candidate (1962), starring Frank Sinatra, Janet Leigh, Lawrence Harvey, and Angela Lansbury.

Summer Safari nights program continues at Reid Park Zoo – Summer Safari Nights 2017 continues tomorrow at Reid Park Zoo. Members of the military (active and retired) will get free admission tomorrow and Friday, July 7. The program runs 6-8 p.m. every Friday until Aug. 4. Visit the Zoo during cooler evening temperatures, and enjoy the added benefits of live music, family-friendly animal features, special dining options, and gift shop discounts. Each night will feature face painting, glitter tattoos, enrichment stations, artifact stations, the carousel, camel rides, and animal encounters. Regular admission applies, but some activities require an additional fee. Tomorrow’s theme will focus on the power of primates.

GDP Beats Estimates as Consumers Spend More “The US economy grew faster than initially thought in the first quarter, according to the Commerce Department. Gross domestic product, the value of everything produced in America, increased by 1.4%, a third estimate released Thursday showed. Consumer spending, the largest part of the economy, and exports were revised higher, though the broader picture of economic growth remained the same.” (Business Insider)

Tax Reform is Coming in September, Trump Economic Advisor Gary Cohn Says “Tax reform is coming in September, regardless of what happens with health care, says Gary Cohn, director of the National Economic Council. President Donald Trump has promised tax reform since taking office in January, but some have questioned whether he can accomplish it this year, especially if Congress’ attempts to repeal and replace the Affordable Care Act fail. Cohn dismissed concerns, telling MSNBC on Thursday that the White House will ‘absolutely’ get tax reform done.” (CNBC)

Treasury Official: The Next Financial Crisis Could Look Nothing Like the Last One “The first of four reports from the U.S. Treasury meant to provide a comprehensive review of U.S. banking and financial services regulation, much of which was put in place in response to the financial crisis, hews closely to the Financial CHOICE Act passed by the Republican-controlled House on June 8. Craig Phillips, who joined Treasury in January from asset manager BlackRock, Inc. as a counselor to Treasury Secretary Steven Mnuchin and is leading these reviews, said most of the report’s more than 100 recommended changes to financial regulations can be implemented without Congressional approval.” (MarketWatch)

Staples Is Being Bought for $6.9 Billion “Sycamore Partners said on Wednesday it would acquire U.S. office supplies chain Staples for $6.9 billion, a rare bet by a private equity firm this year in the U.S. retail sector, which has been roiled by the popularity of internet shopping. Buyout firms largely have refrained from attempting leveraged buyouts of U.S. retailers in the past two years, amid a wave of bankruptcies in the sector that have included Sports Authority, Rue21, Gymboree and BCBG Max Azria.” (Fortune)

U.S. Retail Mall Vacancies Edge Up in Second Quarter: Reis “U.S. retail mall vacancies increased in the second quarter and rents were slightly higher, real estate research firm Reis said in a report. The national retail vacancy rate rose to 10 percent in the second quarter from 9.9 percent in the first quarter, partly due to new construction that was only partially absorbed by new leasing, Reis said. The mall vacancy rate inched up 0.2 percent to 8.1 percent in the quarter from the earlier quarter due to confirmed closings of Macy’s stores, the research firm added.” (Reuters)

China Emerges as a Player in Industrial Real Estate and That is Good News for the Sector “According to a new report on industrial capital markets by Avison Young, foreign investors bought $4.3B in U.S. industrial real estate assets between Q1 2016 and the first three months of 2017. Foreign entities bought 79 industrial properties across the country in Q1 2017, totaling $1.3B in trade volume. But the most surprising information from the report is the amount of capital being deployed by Chinese investors, which bought $284.9M in industrial real estate in Q1 2017, compared to $5.2M for the same time frame last year, a 540% increase year-to-year.” (Forbes)

Paul Massey Drops Out of NYC Mayoral Race “Paul Massey abruptly ended his campaign for mayor Wednesday. The Cushman & Wakefield executive, who ran on a platform of fiscal responsibility as a Republican, said the cost of sustaining a campaign against Mayor Bill de Blasio was prohibitive. ‘Unfortunately, the cost of running for office is extraordinary, and I do not see a path to raising the necessary funds to beat an incumbent mayor,’ Massey said in a statement Wednesday. ‘I am forever indebted to my family, team and my friends for their support.’ Massey’s decision to drop out was seen by some industry insiders as a surprise.” (The Real Deal)

With Retail Writhing, What’s the Secret of a Successful Mall? “Acadia Realty Trust and Washington Square Partners would prefer not to call their new Brooklyn development City Point a ‘mall.’ But, respectfully, it has all the trappings: There’s the large department store anchor—Century 21—which opened last fall. There are the nationally recognized retailers like Target and Trader Joe’s, both opened this year. But two things set City Point aside from the shopping arcades of middle America that seem to be reeling right now.” (Commercial Observer)




Real Estate Daily News Buzz June 29, 2017

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Real Estate Daily News Buzz June 29, 2017

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 gained 21.31 points, or 0.9 percent, to 2,440.69. The Dow Jones industrial average added 143.95 points, or 0.7 percent, to 21,454.61. The Nasdaq composite rose 87.79 points, or 1.4 percent, to 6,234.41.

Benchmark U.S. crude added 50 cents, or 1.1 percent, to $44.74 a barrel in New York. Brent crude, the international standard, rose 66 cents, or 1.4 percent, to $47.31 per barrel in London. Wholesale gasoline rose 2 cents to $1.48 per gallon. Heating oil also added 2 cents to $1.43 per gallon. Natural gas gained 3 cents to $3.07 per 1,000 cubic feet.

U.S. stock market makes biggest gain in 2 months — The U.S. stock market notched its biggest gain in two months Wednesday, bouncing back from losses a day earlier. Banks and other financial companies led the rally as investors bet on interest rates climbing further. Technology companies were among the big gainers, recouping some of their recent losses. Energy stocks also rose as the price of crude oil closed higher for the fifth straight day. Utilities and real estate companies were the only laggards.

Office supplies chain Staples sold for $6.9 billion — Private equity firm Sycamore is buying office supplies chain Staples for $6.9 billion. The companies said Wednesday that shareholders of Framingham, Massachusetts-based Staples will get $10.25 per share. Reports of deal talks emerged in early April, less than a year after Staples dropped a $6.3 billion merger with rival Office Depot because antitrust regulators opposed it. (ABC News)

Fed approves dividend, buyback plans of all 34 biggest banks — The Federal Reserve has given the green light to all 34 of the biggest banks in the U.S. to raise their dividends and buy back shares, judging their financial foundations sturdy enough to withstand a major economic downturn. It was the first time in seven years of annual “stress tests” that every bank assessed won approval for its capital plans. The Fed announced results of the second round of its annual stress tests.

Yellen: Banks ‘Very Much Stronger,’ Another Financial Crisis Not Likely ‘In Our Lifetime’ “Fed Chair Janet Yellen said Tuesday that banks are “very much stronger” judging by how major institutions did in the recent stress tests. Speaking during an exchange in London with British Academy President Lord Nicholas Stern, the central bank chief said the Fed has learned lessons from the financial crisis and has brought stability to the banking system. Banks last week passed the first round of the Fed’s stress tests to see how they would perform under adverse conditions.” (CNBC)

Witness Says Real Estate Owner Schorsch Playes Role in Fraud Scheme “The chairman of a real-estate empire involved in one of the biggest accounting scandals in years participated in a key conversation the night executives finalized a quarterly earnings report at the center of the case, according to the government’s star witness. Testifying earlier this month in a federal courtroom in Manhattan, Lisa McAlister, the former chief accounting officer of American Realty Capital Partners, described a frantic, all-night session on July 28, 2014.” (Wall Street Journal, subscription required)

Plano’s Collin Creek and Lewisville’s Vista Ridge Malls May Soon Have New Owners “North Texas’ two big foreclosed regional shopping malls may soon have new owners. Dallas real estate investor Sam Ware’s Dreien Opportunity Partners has bid on Plano’s Collin Creek Mall. The same partnership purchased J.C. Penney’s Plano headquarters in January. Other offers may be pending. The mall, built in 1981 and located on the southwest corner of 15th Street and North Central Expressway, is being marketed by a real estate brokerage firm Avison Young.” (Dallas News)

Footwear Retailer Supersizes it with New Format “Skechers has debuted a new store format in its largest mall location to date. The company has opened a 24,000-sq.-ft. outlet store at Ontario Mills, Ontario, California, that houses one of the widest assortments of Skechers products under one roof, with dedicated departments for the brand’s various lifestyle and performance collections for men and women. The new Skechers Superstore also features a fun kids’ area, complete with a candy shop and a theater space screening Skechers cartoons.” (Chain Store Age)

NYC Construction Worker Wages Hit 10-Year High “Average wages for New York City construction workers rose more last year than they did in any year since 2007, a new report from the New York Building Congress found. Construction workers’ average annual wages shot up 5.4 percent last year, to $80,200 in 2016 from $76,100 in 2015. The uptick was the biggest annual increase since wages rose 6.4 percent in 2007. It also marks the first time in nine years that construction worker earnings increased by more than 3 percent in a year.” (Commercial Observer)

Need to Learn How to be a Property Landlord? Lake Worth May Show You “Lake Worth’s code compliance division has had its share of problems in recent years. But the city says it’s trying to address some of those problems. One of the things the city is considering doing is offering a class that teaches property owners how to be a landlord. At last week’s city commission meeting, Vice Mayor Scott Maxwell said West Palm Beach has one.” (Palm Beach Post)

Whole Foods New 365 Format Store Coming to Weehawken “It’s been called the next-generation Whole Foods — a new-format store designed to appeal to millennials — and the first New Jersey location will be on the Weehawken waterfront. Developer Hartz Mountain and Whole Foods broke ground Tuesday for a 365 by Whole Foods Market store in the Lincoln Harbor waterfront project. The 365 stores are smaller than a typical Whole Foods, and sell more pre-packaged foods, with an emphasis on the lower-priced 365 house brand.” (NorthJersey.com)

Inside Edison Properties’ Plan for a Newark ‘Renaissance’ “The firm, founded by the Gottesman family in 1956, is currently developing Ironside Newark, a seven-story, $80 million speculative office project located at the corner of Edison Place and McCarter Highway (Route 21) in Newark, astride a burgeoning park that will be known as Mulberry Commons. (The City of Newark is developing the park on the site of the former Triangle Park, along with a pedestrian bridge that will connect much of the area. Edison is making another $20 million investment in the construction of the bridge and various park-related infrastructure elements.)” (Commercial Observer)

A Quarter of U.S. Companies Fail to Adopt New Lease Accounting Standards “According to a new survey from CBRE and PwC US, twenty-three percent of U.S. companies have not yet started to implement the new lease accounting standards, nearly 18 months after they were promulgated by the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB). Of those who say adoption is “in progress,” 52 percent say they are only 0 to 25 percent complete. The new lease accounting standards go into effect in 2019 for public companies.” (World Property Journal)

The Top 10 Properties for Online Reputation in the Top 26-to-50 MSAs “If there were ever any doubt as to how important property ratings and reviews are to residents of multifamily housing, this month’s ORA report should dispel them. In our latest research, more than 28,000 residents rated the impact of online ratings and reviews on their decision to visit a property at 7.33 (on a scale of 0 to 10, with 10 being the highest), proving that apartment communities need to closely watch their digital curb appeal.” (Multifamily Executive)

ABC, meat producer settle in $1.9B ‘pink slime’ libel suit — ABC and a South Dakota meat producer have settled in a $1.9 billion lawsuit against the network over its reports on a beef product that critics dubbed “pink slime.” The terms of the settlement announced Wednesday are confidential. Beef Products Inc. sued the television network in 2012, saying ABC’s coverage misled consumers into believing the product is unsafe, is not beef and isn’t nutritious.

 




Real Estate Daily News Buzz June 28, 2017

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Real Estate Daily News Buzz June 28, 2017

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 index fell 19.69 points, or 0.8 percent, to 2,419.38. The Dow Jones industrial average slid 98.89 points, or 0.5 percent, to 21,310.66. The Nasdaq composite lost 100.53 points, or 1.6 percent, to 6,146.62. Oil and gas futures notched gains Tuesday.

Benchmark U.S. crude gained 86 cents, or 2 percent, to settle at $44.24 per barrel in New York. Brent, the international standard, added 82 cents, or 1.8 percent, to close at $46.65 per barrel in London. In other commodities trading, wholesale gasoline rose 2 cents to $1.46 per gallon. Heating oil also added 3 cents to $1.41 per gallon. Natural gas gained a penny to $3.04 per 1,000 cubic feet.

New cyberattack wallops Europe; spreads more slowly in US — A new and highly virulent outbreak of malicious data-scrambling software appears to be causing mass disruption across the world, hitting Europe — and Ukraine — especially hard. Company and government officials reported serious intrusions at the Ukrainian power grid, banks and government offices. The number of companies and agencies affected was piling up fast, with the attack also confirmed in the U.S., where drugmaker Merck said its systems have been compromised. (PARIS AP)

EU hits Google with $2.7B fine for abusing weaker rivals — European regulators fined Google a record 2.42 billion euros ($2.72 billion) for abusing its dominance of the online search market. The case could be just the opening salvo in Europe’s attempt to curb the company’s clout on that continent. The decision announced Tuesday by the European Commission punished Google for unfairly favoring its own online shopping recommendations in its search results. The commission is also conducting at least two other probes into the company’s business practices.

Yellen: Banking reforms should avert future financial crisis — Federal Reserve Chair Janet Yellen said Tuesday that she believes banking regulators have made enough improvements that the world will not experience another financial crisis “in our lifetimes.” Yellen said the banking reforms put in place in recent years have made the financial system much safer with regulators doing a better job of watching for the type of systemic risks that struck the global economy in 2008. (LONDON AP)

UNESCO celebrates Tucson’s City of Gastronomy designation at Paris event – At the invitation of the U.S. Commission to UNESCO (United Nations Educational, Scientific, and Cultural Organization), on the eve of the 2017 UNESCO Creative Cities Network annual conference in the Paris, there will be a cooking demonstration to present the distinctive cuisine that helped Tucson earn its designation as the first UNESCO City of Gastronomy in the United States. James Beard Award-winning Chef Janos Wilder will prepare a sampling of traditional and modern dishes that showcase the ancient ingredients of our region. Funded by a grant from the U.S. Commission to UNESCO, the event will be held at UNESCO headquarters in Paris on June 28. The 200 attendees will include UNESCO officials, delegates from the five other U.S. Creative Cities, journalists from French and international media, and local dignitaries. Welcoming remarks by the U.S. chargé d’affaires in France will be followed by presentations by each of the six U.S. Creative Cities, concluding with Tucson and an introduction of Chef Wilder. During the event, a slideshow of Tucson’s food history and gastronomy will be projected. Jonathan Mabry, the City’s representative to UNESCO, observes that leveraging the designation has become an integral part of Tucson’s economic development. “It is already expanding our heritage-based economic assets and highlighting them on a global platform, linking them to tourism development and creation of new business opportunities,” Mabry said.

Some water rates and charges increase next week – Effective next Monday, July 3, certain water rates and fees will increase. The rates were set last month by the Mayor and Tucson City Council after a recommendation by the Citizens’ Water Advisory Committee. The rate adjustments under Tucson Water’s Financial Plan for fiscal years 2017-2021 will support the utility’s operation. Residential usage and monthly service charges for water will increase, as will with the CAP Fee, Conservation Fee, fire sprinkler monthly service charge, and the base rate charge per CCF for multifamily, mobile home parks, commercial, industrial, and construction customers. Help is available for those with limited incomes.

The Cities Creating the Most High-Wage Jobs “We decided to take a look at which metropolitan areas are gaining the most professional and business services jobs and the trends that are driving some to pull ahead while others fade. Our rankings look at employment in the sector over time— assessing short, medium and long-term job trends and adding in variables for persistence and momentum as well.” (Forbes)

A New Skyscraper for Los Angeles: Wilshire Grand Makes its Debut “Eight years ago, architect David Martin’s vision for Wilshire Grand Center was little more than a daydream in a sketchbook. Over time, that dream gave way to a 73-story skyscraper, the tallest building west of the Mississippi, and an impressive new addition to the Los Angeles skyline. Expectations for the building are high. Undoubtedly a new downtown landmark, the tower must find its place within the architecture of the city.” (Los Angeles Times)

High-Profile Deals Disguising Commercial Real Estate Market’s Anxiety “Manhattan’s office market could be headed for trouble despite today’s solid-seeming condition and euphoria over big chunks of space being gobbled up by marquee tenants at glamorous new towers. Commercial brokers with the jitters didn’t want their names used, but one we spoke to worried about a ‘lack of depth’ to the market beyond a handful of large-scale negotiations now going on.” (New York Post)

A New Real Estate Play for Income Investors “Risk-averse investors looking for income will soon have a new option to consider: ground leases. iStar Inc., a New York-based real-estate investment, financing and development firm, has spun off some of its ground leases into a separate real-estate investment trust called Safety, Income and Growth Inc. that is expected to raise $250 million from an initial public offering and concurrent private placement.” (Wall Street Journal, subscription required)

Feds Looking into Bernie Sanders’ Wife Over Real Estate Deal “Federal investigators are looking into the finances behind a real estate deal for a now-defunct college put together by the wife of U.S. Sen. Bernie Sanders, and she has hired a lawyer to look after her interests, a family spokesman confirmed on Monday. The complaint against Jane Sanders was filed in early 2016 by attorney Brady Toensing, who served as the Vermont campaign chairman for Donald Trump during his run for president as a Republican. In a separate complaint, Toensing alleged that Bernie Sanders’ senatorial office pressured a bank to approve the loan.” (Associated Press)

Here’s When and Where Lidl’s Next U.S. Grocery Stores Will Open “On July 13, Lidl will open new stores in Chesapeake, Virginia; Culpeper, Virginia; Havelock, North Carolina, and Wake Forest, North Carolina. The grocer also announced on Monday plans to open its fourth regional headquarters and distribution center, in Cartersville, Georgia. Lidl operates more than 10,000 grocery stores in 28 countries. The chain now poses a threat to U.S.-based grocers such as Kroger, Ingles and even Target, as well as a discount chain such as Aldi, because of Lidl’s ‘lowest possible prices’ promise.” (CNBC)

Downtown Dallas Landmark Projects Asking for More Time to Finish Construction “Developers of downtown Dallas’ two largest building redos are asking for more time to get the projects done. The companies renovating the historic Statler Hotel on Commerce Street and the former First National Bank tower on Elm Street are asking downtown’s tax increment finance district for another year to finish all construction on the projects. Work on the 61-year-old Statler Hotel was supposed to be complete by October under original terms of the tax increment financing grant agreement with the city that was approved in 2014.” (Dallas News)

Claire’s is a ‘Complete Train Wreck’ “After nearly six decades in American malls, Claire’s is facing an uphill battle to stay afloat. The retailer — which says it has pierced 94 million ears, more than any other company — has reported 11 consecutive quarters of declining sales and racked up more than $2 billion in debt, prompting speculation among analysts that it could be among the next to face big trouble.” (Washington Post)

Real Estate Firms Calls Houston Valuations ‘Spotty and Uneven’ in 2016 “The commercial real estate market is boosting some property values while deflating others. Houston-based real estate valuation firm Deal Sikes and Associates reported Monday that varying conditions across the city’s submarkets and property types have created uneven changes in commercial property value over the last year. The firm said 57 percent of commercial properties recently received notifications of value increases, 18 percent received decreases and 25 percent were unchanged.” (Chron)

Amazon Could Easily Own Whole Foods, Rite Aid and Express Scripts, This Top Analyst Says “Amazon.com Inc. may be plenty busy working to complete, and then digest, its $13.7 billion acquisition of Whole Foods Market, but anyone who has followed the company knows that it has ambitions to enter all facets of retail, and frankly all facets of people’s lives. With recent reports that the company its looking to break into the pharmacy space and uncertainty swirling around the merger of Walgreens Boot Alliance Inc. and Rite Aid Corp., one Wall Street firm suggests that Rite Aid, or even a pharmacy benefit manager could be next in the company’s crosshairs.” (The Street)

 




Real Estate Daily News Buzz June 27, 2017

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Real Estate Daily News Buzz June 27, 2017

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 added 0.77 points, or 0.03 percent, to 2,439.07. The Dow gained 14.79 points, or 0.1 percent, to 21,409.55. The Nasdaq composite slid 18.10 points, or 0.3 percent, to 6,247.15.

U.S. crude rose 37 cents, or 0.9 percent, to settle at $43.38 a barrel in New York. Brent, the international standard, gained 29 cents, or 0.6 percent, to close at $45.83 a barrel in London. Wholesale gasoline rose 1 cent to $1.44 per gallon. Heating oil also added a penny to $1.38 per gallon. Natural gas gained 10 cents, or 3.3 percent, to $3.02 per 1,000 cubic feet.

US stock indexes close mostly higher; oil recovers — U.S. stock indexes closed mostly higher, snapping a four-day losing streak for the Dow Jones industrial average on a day of largely listless trading. Utilities led the gainers as falling bond yields made high-dividend companies more attractive to income-seeking investors. Phone companies and real estate investment trusts, which also tend to offer high yields, notched gains. Financial stocks also did well. Technology companies declined the most, giving up gains from an early rally.

Company curbs sale of panels used on burned London high-rise — U.S.-based Arconic says it is discontinuing sales of one type of aluminum composite paneling for use on high-rise buildings following the deadly fire at a London apartment tower. Arconic says its Reynobond PE panels will no longer be sold for high-rise projects. The panels may have been a factor in the rapid spread of the June 14 blaze that killed at least 79 people at Grenfell Tower.

BMW announces $600M expansion as it celebrates 25 years — BMW plans to invest an additional $600 million in its South Carolina plant and create 1,000 more jobs over the next four years. CEO Harald Krueger’s announcement Monday coincides with the German automaker celebrating 25 years of manufacturing in South Carolina.

New York City Tops List for Flexible Office Rates “New York City is the most expensive big city in the world to rent a desk, according to a new report about flexible office space. The city topped a list of the largest international central business centers for the cost of renting flexible office space, which usually offers shorter terms than a conventional lease and provides furnished space ready to use.” (Wall Street Journal, subscription required)

Communal, Cozy and Connected: Hotels of the Future Break New Ground “Business travelers beware: hotels are redesigning room layouts. It’s now 2017 — you work in coffee shops, your smartphone controls your home and car, and your business trips are short, two-day jaunts with a bit of leisure thrown in. Why can’t your hotel be the same way? New hotels seek to capitalize on that question. Out are the large but dark rooms, the voluminous dressers and utilitarian corner gyms, replaced by cozier rooms, bright common spaces, natural lighting and centerpiece gyms.” (CNBC)

Is Dallas’ Housing Market Cooling Off? “They are workers relocating from Southern California, following employers like Toyota and Jacobs Engineering. They are college graduates moving from the Midwest to start careers in what is, reportedly, the country’s best city in which to find work. They are highly skilled immigrants from India capitalizing on a demand for tech workers. They are people from the East Coast who are simply tired of schlepping through slush every winter. They keep coming to Dallas, waves and waves of them, all looking for places to live. Looking and buying and boosting prices.” (D Magazine)

Jared Kushner Got $285 Million Loan from Deutsche Bank Ahead of Election Day “Evidence of wider ties between Deutsche Bank (DB) and President Donald Trump’s family and businesses is emerging after a report that the German bank lent Trump’s son-in-law Jared Kushner $285 million ahead of the presidential election. Deutsche Bank finalized a $285 million loan to Kushner’s real estate company a month ahead of Election Day, The Washington Post reported late Sunday. Part of a refinancing package for property near Times Square in Manhattan, the deal was struck as Kushner was propelling the Trump campaign to the finish line and Deutsche Bank was settling fraud cases with federal and state authorities.” (The Street)

Buffett’s Berkshire Hathaway Just Became One of the Largest Shareholders in an Obscure Real Estate Firm “Warren Buffett’s Berkshire Hathaway is investing more money in the real estate business. Store Capital announced on Monday that Berkshire invested $377 million in the company, which represents a 9.8 percent stake in the real estate investment trust. The company issued 18.6 million shares of Store Capital shares in a private placement to a subsidiary of Berkshire Hathaway, National Indemnity Co., at $20.25 per share.” (CNBC)

Commercial, Multifamily Mortgage Originations in U.S. to Dip in 2017 “According to the Mortgage Bankers Association, commercial and multifamily mortgage originations in the U.S. will be down slightly in 2017, ending the year at $478 billion, a decrease of 3 percent from the 2016 volumes. Mortgage banker originations of just multifamily mortgages are forecast at $206 billion in 2017, with total multifamily lending at $245 billion.” (World Property Journal)

Hines Nabs Sacramento Office Tower in $120M Deal “Hines recently snapped up Park Tower, a trophy office property in Sacramento. The company purchased the asset from CIM Group in a transaction valued at, according to the Sacramento Business Journal, $120.5 million. The 25-story Park Tower, as Cameron Falconer, senior managing director with Hines, said in a prepared statement, is ‘a best-in-class office asset in a very desirable location.’” (Commercial Property Executive)

Staten Island Ferris Wheel Project is Spinning Out of Control “The giant Staten Island Ferris-wheel project is spinning out of control. The design team building the 630-foot-high New York Wheel on the borough’s north shore got into a bitter pay dispute with the developer — and walked off the job in late May. The developer then made desperate pleas to a federal judge to get the work started again, saying the revitalization of Staten Island’s waterfront was at stake.” (New York Post)

Is New York Real Estate Showing Symptoms of Distress? “For Hans Futterman, it was a dream defaulted. The developer assembled a vacant plot of land — formerly a Shell gas station and a parking lot — at Frederick Douglass Boulevard and West 122nd Street in Harlem over roughly four years, from 2011 to 2015. He then secured approvals to construct a 12-story, 127-unit residential building on the site, which offers 205,000 buildable square feet. But in June of last year, Futterman, who declined to comment for this story, defaulted on a $36 million loan from RWN Real Estate Partners, and five months later his development firm filed for Chapter 11 bankruptcy protection.” (The Real Deal)

NorthMarq Capital Buys SLC Mortgage Banking Firm “NorthMarq Capital has acquired Western Capital Realty Advisors, a leading commercial mortgage banking firm in Salt Lake City. The acquisition includes a $400 million loan servicing portfolio. John Bradshaw, Western Realty Capital’s founder, will join the company as managing director. Additionally, principals Nate Barnson, Larry Pinnock, and Dale Christiansen will come aboard NorthMarq as well as key employees Tara Jewkes and Tom Bradshaw.” (Commercial Property Executive)

Airline vet to lead Amtrak in a summer of repairs, reckoning — America’s railroad is counting on an airline industry veteran to lead it through a summer of reckoning for congestion and crumbling infrastructure at its busiest station. Amtrak on Monday named former Delta chairman Richard Anderson as its new president and CEO. He’ll take charge of the government-owned railroad July 12, as it rushes to make repairs at New York’s Penn Station.

UK’s May makes deal she needs to govern, but critics abound — British Prime Minister Theresa May has struck a deal with Northern Ireland’s Democratic Unionist Party Monday that is designed to give her minority government enough support in Parliament to endorse her legislative agenda this week. The move, made necessary by her Conservative Party’s dismal performance in the June 8 election, came with a high cost: May’s government agreed to a massive injection of funds into Northern Ireland in exchange for Democratic Unionist support.

Promised college loan forgiveness, borrowers wait and wait — New federal data suggest no new student loan forgiveness applications have been approved out of more than 64,000 pending applications. Thousands of former students of failed for-profit colleges were promised forgiveness by the Obama administration. Borrower advocates say the process to get loans canceled appears to have slowed since President Donald Trump took office.

 

 

 




Real Estate Daily News Buzz June 26, 2017

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Real Estate Daily News Buzz June 26, 2017

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.

Stocks ticked higher as energy companies clawed back some of their sharp losses from earlier in the week. After getting off to a slow start, the Standard & Poor’s 500 index finished with a modest gain Friday, leaving it slightly higher for the week. Energy companies benefited from a second day of gains in oil prices. EQT jumped 8 percent, the biggest gain in the S&P 500. Health care and technology stocks had the biggest gains of the week. Energy companies trimmed their weekly loss to 2.9 percent. Bed Bath & Beyond plunged 12 percent after reporting weak earnings. The S&P 500 added 3 points, or 0.2 percent, to 2,438. The Dow Jones industrial average slipped 2 points to 21,394. The Nasdaq gained 28 points, or 0.5 percent, to 6,265.

Sales of new homes rebounded in May, helped by strong sales gains in the South and West — Sales of new single-family homes rose 2.9 percent last month to a seasonally adjusted annual rate of 610,000, the Commerce Department reported Friday. That followed a 7.9 percent drop in sales in April which was the biggest monthly decline in eight months. Sales gains of 6.2 percent in the South and 13.3 percent in the West overcame big declines of 25.7 percent in the Midwest and 10.8 percent in the Northeast. The Midwest drop was the largest in that region in nearly three years. The median price of a home sold last month rose to a record $345,800, up 16.8 percent from a year ago. Prices have been increasing as demand has outstripped supply, in part because of a shortage of available building lots.The rebound in May sales had been expected following the big April drop. Sales of previously owned homes also rose last month. The National Association of Realtors reported Thursday existing home sales, a much larger market than new homes, increased 1.1 percent in May to a seasonally adjusted annual sales rate of 5.62 million. (ABC News)

Starwood Capital Ups its Offer for Forestar as Battle with D.R. Horton Intensifies “There’s a battle brewing between two real estate titans as Starwood Capital Group and D.R. Horton are both angling to acquire Forestar Group, a residential and mixed-use real estate developer. Last month, Forestar and Starwood announced that the companies reached a merger agreement, which would see Starwood acquire all of Forestar’s outstanding shares for $14.25 per share in cash. The total purchase price would be approximately $605 million. But, D.R. Horton attempted to swoop in with a superior offer.” (Real Estate Daily News)

Real Estate Firm with Ties to Trump May Build the New FBI Headquarters “A commercial real estate firm, Vornado is widely reported to be a finalist to build a new campus for the FBI somewhere in the suburbs of Washington, D.C. But its financial ties to President Trump are raising concerns about conflicts of interest. ‘It puts a cloud over Vornado’s otherwise perfectly sensible bid,’ says Rep. Gerald Connolly, D-Va. Vornado’s chairman, Steven Roth, is a Trump supporter, whom the president has called ‘one of the greatest builders in America.’ Trump appointed Roth to serve on his advisory council on infrastructure.” (NPR)

Forest City Laying Off 50 Workers as it Refocuses on Property Development Business “Forest City Realty Trust Inc., a major real-estate developer in New York, San Francisco, Denver and other cities, is laying off 50 employees as part of its effort to exit from most of its retail and entertainment business and refocus more on residential, office and mixed-use projects in urban markets. ‘We have to make extremely tough choices,’ Chief Executive David LaRue said Thursday in a message to employees informing them of the layoffs.” (Wall Street Journal, subscription required)

Foreign Investment Pours into Industrial Real Estate “Houston’s industrial real estate boom hasn’t been enough to woo big foreign investors away from the nation’s commerce hubs en masse. High demand nationwide for warehouse distribution space, driven largely by high hopes for an e-commerce future, has prompted a boom in direct investment from overseas, with the largest sums landing in traditional ports and rail yards like New Jersey, Southern California and Dallas, which topped the list of incoming investment in industrial real estate.” (Chron)

Bank Stress Tests Could Embolden Trump’s Deregulatory Agenda “The big banks’ high scores on the Federal Reserve’s stress tests could speed up deregulation out of Washington. For the third time in as many years, all 34 of the biggest banks in the United States met the minimum capital standards in the first half of the Fed stress tests designed to safeguard against another financial crisis on Thursday. The strong performance of firms such as Goldman Sachs (GS) , Morgan Stanley (MS) and Citigroup (C) could embolden D.C. lawmakers to loosen regulations on the financial sector.” (The Street)

Sears is Shuttering 20 More Stores “Sears Holdings is planning to shutter 20 more Sears stores in the U.S., in addition to the more than 200 closures that have already been announced, Business Insider reported Thursday. Sears reportedly announced the latest round of closures to its store employees on Thursday, several workers told the online publication. Some of the Sears locations on the updated list of stores being closed include those in Sarasota, Florida; Roseville, Michigan; Watchung, New Jersey and East Northport, New York, Business Insider said.” (CNBC)

Develop a Localized Investment Strategy When Considering Real Estate in the Northeast “In New York City-North New Jersey, Newark, Portland, Boston and Providence, the ratio of average home price to average rent is very high (above 20). With the exception of Portland, these markets also have high proportions of renters, 65 percent in Boston, 70 percent in New York. Here you will do best to buy a single-family property and divide it into several units, each with above-average rents. Find properties that are reasonably close to a college/university or to a hospital/medical center.” (Forbes)

Chicago’s New Apple Store Looks Like a Giant Laptop “The new Apple store under construction on the Chicago River is starting to look a little familiar. Construction crews on Thursday placed a big, white Apple logo on the roof of the new store on Pioneer Court, 401 N. Michigan Ave. Combine the new logo with the store’s curved, metallic roof, and the site starts to resemble a Macbook. Less than an hour later, however, crews rolled up the apple and took it away.” (DNA Info)

America is Over-Malled, with Not Enough Warehouses to Support Amazon “As sales by internet retailers grow, though, there could be one class of REITs poised to benefit, Jefferies analyst Jonathan Petersen wrote in a note to clients Friday. While there is a glut of malls, there aren’t nearly enough warehouses across the U.S. to support internet retailers like Amazon, Petersen said. ‘[R]etail sales are not in decline, but rather shifting toward e-commerce retailers who require large amounts of warehouse space.’” (CNBC)




Real Estate Daily News Buzz June 23, 2017

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Real Estate Daily News Buzz June 23, 2017

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.

U.S. stock indexes held steady Thursday after the price of oil took at least a temporary break from its sharp slide. Energy stocks fell again, but not by nearly as much as earlier in the week, after crude rose for the first time in four days. Big gains for health care stocks also helped to offset losses for financial companies and other areas of the market, leaving indexes close to flat.

On Thursday, the Standard & Poor’s 500 index edged down by 1.11 points, or less than 0.1 percent, to 2,434.50. The Dow Jones industrial average dipped 12.74, or 0.1 percent, to 21,397.29. The Nasdaq composite rose 2.73 points, or less than 0.1 percent, to 6,236.69. The Russell 2000 index of smaller company stocks rose 5.28, or 0.4 percent, to 1,404.54.

For the week, the S&P 500 is up 1.35 points, or 0.1 percent. The Dow is up 13.01 points, or 0.1 percent. The Nasdaq is up 84.93 points, or 1.4 percent. The Russell 2000 is down 2.19 points, or 0.2 percent.

For the year, the S&P 500 is up 195.67 points, or 8.7 percent. The Dow is up 1,634.69 points, or 8.3 percent. The Nasdaq is up 853.57 points, or 15.9 percent. The Russell 2000 is up 47.41 points, or 3.5 percent.

**City of Tucson Tax Rate Increase–effective July 1, 2017** As a result of the City of Tucson Special Election held on May 16, 2017, most city sales and use tax rates will increase effective July 1, 2017.  This link to flyer lists the affected business activities and also identifies the business activities for which the tax rate did not increase. This will be in effect for the next 5 years. Click here for flyer: Tax_Rate_Increase_Flyer_070117

Special Note Regarding Construction Contracting and the Upcoming Tax Rate IncreaseFor the purposes of City of Tucson Regulation 19-415.3 (Construction contracting; tax rate effective date), the City has chosen to establish the tax rate effective date (July 1, 2017) as the “enactment date”.  Contracts executed prior to July 1, 2017, will be subject to the current city tax rate of 2.0%, while contracts executed on or after July 1, 2017 will be subject to the new city tax rate of 2.5%.  Regardless of when a contract is executed, if change orders are executed on or after July 1, 2017, they will be subject to the new city tax rate of 2.5%.

Qatar Issue May Affect China’s Soft Power as Biggest Property Buyer “China’s soft power as the world’s biggest property buyer is under severe strain due to a government crackdown on capital flight and the Qatar controversy, which is expected to drive a lot of Arab money into the property market in western countries. Qatar citizens are desperately looking for alternative investment avenues as Saudi Arabia and the United Arab Emirates recently cut off relations with their country, and issued orders making it difficult for them to hold property in different Arab countries, property sellers said.” (Voice of America)

What You’ll Pay for Rent in America’s Fastest-Growing Cities “The U.S. Census’ list of fastest-growing cities by percentage released last month comprised primarily suburbs in high-growth metro areas. The mass of people flocking to these cities will be happy to know that in most cases, the average apartment rent falls in line with that of the market in which they are located.” (Forbes)

Sears Canada to Close 59 Stores, to Cut 2,900 Jobs “Ailing Sears Canada Inc. on Thursday got court protection from its creditors so it can close 59 stores – including 20 large department stores – and let go about 2,900 of its 17,000 employees to continue operating and possibly sell the business. Toronto-based Sears said it is closing 20 of its 94 department stores, plus 15 of its home stores, 10 outlet stores and 14 Hometown locations. Insolvent Sears Canada Group operates 225 stores in all under the Sears and Corbeil banners. It got protection from Ontario Superior Court under the Companies’ Creditors and Arrangement Act.” (The Globe and Mail)

President Trump Using Trump Hotel to Hold Trump Re-Election Fundraiser “President. Candidate. Businessman. Three of President Donald Trump’s roles converge next week as he holds his first re-election fundraiser at his hotel in Washington. Trump can see the Trump International Hotel from the White House lawn, making it a premier and convenient location for the June 28 major-donor event, his campaign director Michael Glassner said. But the choice also raises ethics questions, according to conflict of interest attorneys who have been critical of Trump’s decision not to cut financial ties with his global business empire.” (Fortune)

CT Realty to Develop $300M Industrial Park in Atlanta “CT Realty’s industrial growth spurt has hit metropolitan Atlanta. Acting through its affiliate, Port Logistics Realty, the real estate company paved the way for the development of the 3.5 million-square-foot Palmetto Logistics Park with the acquisition of 213 acres of land and an option on an adjacent 145 acres. Upon full completion, the three-building industrial project in Fulton County will be valued at $300 million. Joining CT Realty in the development of Palmetto are Prudential Global Investment Management and River Oaks Capital Partners. The joint venture partners believe location will be one of the keys to the project’s success.” (Commercial Property Executive)

Sycamore Partners Reportedly Near Deal to Acquire Staples, Report Says “Private equity firm Sycamore Partners is in advanced talks to acquire Staples following an auction for the U.S. office supplies retailer, people familiar with the matter said on Wednesday, in a deal that could top $6 billion. The acquisition would come a year after a U.S. federal judge thwarted a merger between Staples and peer Office Depot on antitrust grounds. It would represent a bet by Sycamore that Staples could more quickly shift its business model from serving consumers to catering to companies if it were to go private.” (Fortune)

Amazon Wardrobe Is Another Blow to Department Stores “Amazon.com Inc. isn’t letting a $14 billion deal to buy Whole Foods Inc. distract from its efforts in fashion. With the introduction of Amazon Wardrobe, experts say the e-commerce giant is delivering yet another blow to the already-ailing department store sector. Department stores are already suffering from a number of headwinds, including declines in mall traffic and the need for massive store closures.” (MarketWatch)

Why Public Markets Aren’t the Best Way to Invest in Real Estate “What if I told you the value of your investment portfolio had dropped by 50% overnight? How would you react? Probably with a mix of confusion, anger and even a total loss of confidence in the stock market. While most investors might assume this scenario is highly unlikely, the truth is that the average investor is subjected to this sort of value slashing every day without even realizing it. To understand how such a dramatic occurrence could go largely unnoticed, look no further than the seemingly familiar event of a company “IPOing” on the public market.” (Forbes)

Skittish Israeli Investors Respond to Drop in Extell Bond Price “Gary Barnett is back to calming nervous Israeli investors over his company’s bonds trading on the Tel Aviv Stock Exchange. Since May, when his firm Extell Development released its first-quarter financial reports, the price on the two rounds of Extell bonds have decreased between 5 and 7 percent, and are now trading at 13 percent yields. That’s an improvement over last year’s high of 16 percent, but too high for comfort for some investors.” (The Real Deal)

HTI to Buy Sibling’s Portfolio for $120M “In an all-cash transaction valued at about $120 million, Healthcare Trust Inc. (HTI) will be acquiring substantially all of the assets of American Realty Capital Healthcare Trust III Inc. (HT III), the two New York–based companies announced Monday. Both companies are sponsored by AR Global, also of New York, and both are externally managed by the same management team. The ARC HT III portfolio comprises 19 properties totaling 467,932 square feet, of which 17 are medical office buildings with an average occupancy of 97.1 percent.” (Commercial Property Executive)

 

 




Real Estate Daily News Buzz June 22, 2017

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Real Estate Daily News Buzz June 22, 2017

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.

Energy stocks dove again on Wednesday as oil dropped to its lowest price since last summer. Gains for health care and technology stocks helped hem in losses for broader market indexes.

On Wednesday, the Standard & Poor’s 500 index dipped 1.42 points, or 0.1 percent, to 2,435.61. The Dow Jones industrial average fell 57.11, or 0.3 percent, to 21,410.03. The Nasdaq composite rose 45.92, or 0.7 percent, to 6,233.95. The Russell 2000 index of smaller company stocks fell 3.71, or 0.3 percent, to 1,399.25.

For the week, the S&P 500 is up 2.46 points, or 0.1 percent. The Dow is up 25.75 points, or 0.1 percent. The Nasdaq is up 82.19 points, or 1.3 percent. The Russell 2000 is down 7.47 points, or 0.5 percent.

For the year, the S&P 500 is up 196.78 points, or 8.8 percent. The Dow is up 1,647.43 points, or 8.3 percent. The Nasdaq is up 850.84 points, or 15.8 percent. The Russell 2000 is up 42.12 points, or 3.1 percent.

US Home Sales Up in May along with prices — The May home sales report released Wednesday by the National Association of Realtors shows a housing market unable to meet the demand from would-be buyers. Sales edged up 1.1 percent in May to a seasonally adjusted annual rate of 5.62 million, a decent gain amid a relatively stable job market with a robust 4.3 percent unemployment rate. But many possible buyers are finding their ambitions thwarted because there aren’t enough homes for sale. Sales listings have plummeted 8.4 percent over the past 12 months to 1.96 million. On an annual basis, the number of homes for sale has declined for the past 24 months. Homes are staying on the market for a median of just 27 days, the briefest period since the Realtors began tracking the measure in 2011.

How T.J. Maxx Is Bucking the Crisis in Retailing “Traditional retailers are in crisis, damaged by rapidly shifting consumer tastes, technological change and cut-throat price competition. And then there’s TJX Cos., which is defying gravity with the simple idea that under the right circumstances people still like to shop in stores. The owner of T.J. Maxx and Marshalls has seen sales at stores open at least a year rise for 33 straight quarters.” (Wall Street Journal, subscription required)

Commercial Real Estate Owners Are Missing Their Big Opportunity “What is the biggest, most obvious opportunity for the future of commercial real estate? What? Not enough patience or time? Do you just want to scroll until you see the bold type and figure it out in two sentences? I could lay it out in fifty words or less but would you understand it completely? Here is my problem, I have been screaming about this as loud as I can for how long now? It’s to the point where I’m starting to question your ability to see what’s right in front of your face. It’s also obvious to me that the rest of the world has already figured out what you have not.” (cre.tech)

Kroger Should Challenge Amazon and Make Whole Foods a Sweeter Offer “Watch out, Amazon. Kroger could give Jeff Bezos a run for his money. At least that’s what one analyst is saying, issuing a note to clients Wednesday morning explaining why a competing bid by Kroger for its rival grocer Whole Foods makes sense. This, after Amazon announced plans last Friday to acquire Whole Foods for $13.7 billion — a deal that’s expected to close in the second half of 2017. Unless, of course, a rival bidder steps into the picture.” (CNBC)

Deep in the Malls of Texas, a Vision of Shopping’s Future “Several shopping centers in Texas give a peek into how mall owners and developers are responding. In spots where the shopping activity has slowed, the response is clear: Move away from strictly shopping, and expand the mix to include more restaurants and entertainment, or health care and education. Or, in the case of Valley View Center, start over from scratch.” (The New York Times)

Despite a $17B Valuation and Expanding Business, How Long Can WeWork Work? “Its success—and potential for more—has divided real estate professionals in New York: Those who are willing to accept WeWork’s vision of its place in the real estate firmament and those who are not willing. Sam Zell, the chairman of Equity Group Investments, which includes major office properties, put it like this during a May appearance on CNBC: ‘We have yet to find out what happens to WeWork when the office market softens, which is probably not too long from now.’” (Commercial Observer)

New York REIT Taps RKF to Sell Retail Holdings “New York REIT hired RKF’s investment sales division to oversee the selloff of its standalone retail properties as the troubled real estate investment trust liquidates its $2.78 billion office-and-retail portfolio. RKF vice chairman Jeff Fishman will lead a team marketing the assets, the bulk of which are concentrated on Bleecker Street. The buildings are located in such neighborhoods as Midtown West, Tribeca and Greenwich Village.” (The Real Deal)

Vanke Founder Wang Shi, Chinese Property Developer, Steps Down “The chairman and founder of China’s largest property developer said on Wednesday that he would step down, ending a career that mirrored the country’s giddy embrace of privately owned real estate but stumbled after his company became the target of an unprecedented Chinese corporate takeover battle. Wang Shi, the chairman of China Vanke Group, said in a post on a personal social media account that it was time to let the next generation take over.” (The New York Times)

LA Job Growth Spurs Office Leasing Activity “While one may think sound stages and theaters would be most in demand in Los Angeles, office space is thriving in the area due to a growing presence in the tech, engineering and financial sectors. The U.S. capital of the entertainment industry is also one of the largest markets in the country, with almost 254 million square feet of office inventory, according to Yardi Matrix’s second quarter report on the Los Angeles office market.” (Commercial Property Executive)

Plan Would Bump Playground for $1B Real Estate Project “In a move critics say circumvents zoning laws to assist powerful developers, state and city officials plan to relocate an East Harlem children’s playground to accommodate a $1 billion project that would include one of the tallest buildings outside midtown. At the request of the City Council and the de Blasio administration, state Sen. Jose Serrano (D-Bronx) and Assemblyman Michael Benedetto (D-Bronx) are pushing bills that could be approved as early as Wednesday to discontinue the use of the Marx Brothers Playground on Second Avenue and East 96th as parkland.” (New York Post)

Atlanta’s ACS Building Commands $166M “Carter Validus has acquired the American Cancer Society Building, a 995,728-square-foot property in downtown Atlanta, Ga., from Cousins Properties for $166 million. Cushman & Wakefield represented the seller in the transaction. Cushman & Wakefield’s equity, debt & structure financing group, led by Mike Ryan and Brian Linnihan, arranged the acquisition financing.” (Commercial Property Executive)

 




Real Estate Daily News Buzz June 21, 2017

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Real Estate Daily News Buzz June 21, 2017

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.

U.S. stock indexes retreated from their record heights Tuesday after a slump in the price of oil weighed on energy companies. On Tuesday, the Standard & Poor’s 500 index fell 16.43 points, or 0.7 percent, to 2,437.03. The Dow Jones industrial average lost 61.85 points, or 0.3 percent, to 21,467.14. The Nasdaq composite lost 50.98 points, or 0.8 percent, to 6,188.03. The Russell 2000 index of smaller company stocks fell 15.11, or 1.1 percent, to 1,402.97.

For the week, the S&P 500 is up 3.88 points, or 0.2 percent. The Dow is up 82.86 points, or 0.4 percent. The Nasdaq is up 36.27 points, or 0.6 percent. The Russell 2000 is down 3.76 points, or 0.3 percent.

For the year, the S&P 500 is up 198.20 points, or 8.9 percent. The Dow is up 1,704.54 points, or 8.6 percent. The Nasdaq is up 804.91 points, or 15 percent. The Russell 2000 is up 45.84 points, or 3.4 percent.

Amazon-Whole Foods Deal Hurts Grocery Stores in My District, Says Silicon Valley Congressman “Khanna spoke after he called for the Justice Department and the Federal Trade Commission to review the impact the deal would have on food prices and wages. On Monday, Amazon’s stock jumped to an all-time intraday high, three days after the company announced its blockbuster agreement to acquire Whole Foods. Khanna said Wal-Mart’s dominance in the grocery space has already had a negative impact on wages and local grocery stores.” (CNBC)

Opinion: Another Part of the Real Estate Market is Starting to Crumble “While the struggles of mall REITs are no secret given Amazon’s increased dominance of the retail sector, real estate investors may also contemplate putting apartment REITs on their warning lists. That’s because although apartment real estate investment trusts have done well this year — and since the end of the housing crisis, in general — rent growth is starting to slow. To understand the current situation of multifamily rental housing, some recent history is necessary. In the lead-up to the housing crisis, homeownership in the U.S. rose from 64% to 69% at its peak in 2005 and 2006.” (MarketWatch)

Google Village Property Buys Continue in Downtown San Jose “Google’s massive downtown San Jose development plan has prompted four more property purchases, including some that indicate the search giant’s area of interest has begun to widen. The property deals occurred just a few days ahead of a key San Jose City Council meeting, during which the council is scheduled Tuesday to approve the launch of exclusive negotiations with Google for the purchase of 16 government- and city-agency-owned parcels. The parcels would be part of a land assembly for the tech giant’s proposed tech campus and transit-focused village near Diridon Station and SAP Center.” (The Mercury News)

Infrastructure Spending Could Be Hindered by a Shortage of Skilled Labor “A joint report from lobbying group U.S. Chamber of Commerce and construction materials manufacturer USG Corporation shows commercial contractors anticipate they’ll have more trouble hiring workers during the second half of 2017. The USG and Chamber of Commerce Commercial Construction Index is a quarterly economic report that gauge the outlook for the commercial construction industry. Each quarter, researchers survey a panel of 2,700 commercial construction decision-makers and provide findings that are representative of the entire U.S. construction industry by geography, size, and type of company.” (Fortune)

Meet Jonathan Litt, the Real Estate Investor Pushing Retailer Hudson’s Bay to Change “His playbook has largely focused on finding ways to monetize real estate to enhance shareholder value. That was the case at BRE Properties, which sold to Essex Property Trust for $4.3 billion in 2013, as well as Associated Estates, which sold itself to Brookfield for $2.5 billion in 2015. It was also the case at MGM Resorts, which spun off some of its real estate through an initial public offering in 2016.” (CNBC)

Miami Owes its Life to Foreigners “Miami is done (well, never entirely) building residential or mixed use towers for money laundering foreigners. They are now building entire towns for them, and everyone else in between. The developers will call it ‘lifestyle properties,’ but it is even more than that. In Swire’s case in particular, the BCC and its surroundings is a work and entertainment complex that hires hundreds if not thousands of locals.” (Forbes)

DDR, Madison International Recap $1B Retail Portfolio “DDR Corp., of Beachwood, Ohio, and an affiliate of Madison International Realty, of New York City, have agreed to recapitalize a $1 billion, 52–shopping center joint venture previously owned by DDR and various partners through the DDR Domestic Retail Fund I, the two companies announced last week. In the transaction, Madison International Real Estate Liquidity Fund VI, an investment fund managed by Madison International Realty, acquired 80 percent of the joint venture’s common equity and a DDR affiliate retained 20 percent.” (Commercial Property Executive)

Amazon Is Finally Opening One of its Mega-Warehouses in New York “Amazon’s ability to quickly ship stuff to New Yorkers, from Kindle readers to kayaks, is about to get a major boost. The Seattle-based Web giant headed by billionaire Jeff Bezos is preparing to open a massive distribution hub in the Big Apple — the company’s first major facility in New York state — by summer’s end, The Post has learned. The Amazon ‘fulfillment center’ will span nearly 1 million square feet on the west shore of Staten Island.” (New York Post)

Whole Foods CEO Hints at Launching Another Brand Under Amazon “After Amazon completes its takeover of high-end grocer Whole Foods Market, it might launch another brand with different standards, the grocery chain’s chief executive said in remarks reported in a securities filing on Monday. Amazon plans to keep the natural grocer’s high standards, Whole Foods Chief Executive John Mackey said, adding, ‘They’re not stupid enough to go change that.’ The filing contained a transcript of a town hall meeting for Whole Foods employees.” (Fortune)

Seattle Office Building Commands $330M “Union Investment has acquired Midtown21, a 21-story, Class A office building in Seattle, from developers MetLife Real Estate and Trammell Crow Co., for $330 million. The acquisition will be transferred to the holdings of open-ended real estate fund Unilmmo: Europa, which focuses on investments in Europe but occasionally buys properties overseas. The fund also owns Seattle-based properties, Amazon Phase VI office building and Hilton Garden Inn Hotel.” (Commercial Property Executive)