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The economy is red hot!
U.S. employers added the most workers in four months — January’s 227,000 increase in payrolls steam-rolled over estimates from a Bloomberg survey of economists which called for a median 180,000 advance. The jobless rate rose to 4.8 percent, and average hourly earnings grew 2.5 percent from January 2016, the weakest since August.
Employers hired briskly in January and more Americans joined the workforce, suggesting the labor market still has room to grow. Jobs outside of farms increased a seasonally adjusted 227,000 in January, the best gain since September.
Results were helped by hiring in construction, retail, finance and professional services. The 36,000 increase in construction payrolls was the largest since March.
Here’s How Situs Keeps Jobs in USA
Robbins, NC was like hundreds of other textile-mill towns across the Southeast, closing apparel plants across the region drained the lifeblood from these towns.
But, Commercial Real Estate Giant Situs knew there was a better way.
Situs’ Robbins Outsourcing Facility, located in rural North Carolina, was the brain child of Situs Executive Managing Director Steven Bean, who grew up in Robbins and returned Monday to lead the ten-year anniversary celebration for this office which is part of Situs’ secret sauce as it supports the company’s other locations including New York, London, Houston, San Francisco and Atlanta.
“I’m most proud that many of the early hires who have been with us for a decade are now running the Robbins office,” says Situs’ Bean. “There are many longtime employees who care about the company and more importantly about each other. Their colleagues truly are their neighbors. These are people who embody Situs’ corporate values; integrity, excellence and collaboration. They know that what they do every day makes a difference in their neighbors’ lives.”
For example, there’s Valerie Freeman, Office Manager and Recruiter. “I was 23 years old when I walked in the door ten years ago, I went through a crash course to learn the basics of Commercial Real Estate.” Valerie later took several advanced course at Situs University and at Sandhills Community college which worked with Situs on developing an advanced Commercial Real Estate curriculum. “I’m actually now in charge of new-hire training and I teach them a basic Commercial Real Estate background in a couple of weeks.” And, Valerie says other corporations can learn a great deal from Situs about how to keep jobs in the U.S., “The secret is you must mentor your people, we have trained people with very diverse backgrounds to become savvy in Commercial Real Estate. If you put the training effort into the ’front end’, you are going to end up with a loyal staff like ours that has been here for a decade.”
Amanda Jones, Portfolio Management Analyst who has also been with the company for a decade says, “When people hear about our office in Robbins, North Carolina, they assume we aren’t sophisticated, but what we do is detailed Commercial Real Estate analysis, working deals with complex loan structures. We know the ins and outs of American business and I’d put our team up against any other.”
Danna Powers, Vice President of Operations at Situs and the first employee to be hired in Robbins says the secret sauce is “a very different culture, everyone is from here. They are a family. They want to help each other. You know each other’s spouses, kids and even pets. You don’t dread going to work, you work harder for your team. I can’t tell you how often I’ve been in the office late at night and somebody came over to ask how they could help to get me out sooner.”
Situs CEO Steve Powel says, “All this actually makes good business sense too and other businesses in the U.S. can learn from our example. Americans want to work and prosper and will if you let them.”
Click Here to see how this wonderful story was told on WRAL-TV, Raleigh, NC
May Day: Brexit Moves Closer
Britain’s exit from the European Union moved a step closer after Parliament voted for the first time in favour of legislation to pave the way for Prime Minister Theresa May to trigger the formal process of leaving.
The European Union (Notification Of Withdrawal) Bill will allow the Prime Minister to invoke Article 50 of the EU treaties to exit.
As for how this is affecting Commercial Real Estate in the UK and on the continent: Situs Managing Director Chip Good says, “People in the industry are simply working hard, and yes there are properties being bought and sold.”
The next move is up to the British House of Lords where it faces further debate. Following that, the process of triggering Article 50 and beginning Brexit, -Britain’s exit from the EU- could come as soon as mid-March.
“In all markets there are winners and losers,” says Good, who oversees Situs’ European Business Development. “There’s a big demand right now for CRE from people who have the money to either lend or to buy real estate assets.”
Europe’s Surprise Commercial Real Estate Hot Spot: Italy
Sales of commercial real estate in Italy hit a nine-year high in 2016, driven by investors looking outside of Europe’s biggest property markets for higher returns.
Property transaction volumes in Italy reached €9.1 billion ($9.7 billion) last year, topping the €8 billion in 2015 and the highest level since the €10.4 billion peak in 2007, according to real-estate services firm CBRE Group Inc. The increased demand has helped boost values of the most sought-after types of property in top cities, like stores in Milan’s most fashionable shopping districts.
Yet, the size of the real estate market in Italy remains small compared with the rest of Europe. While the Italian economy is the fourth biggest on the continent, it accounted for just 4% of the €251 billion of property traded in Europe last year, CBRE said. Sweden, a much smaller economy, made up around 7% of the total.
Yellen Eyes Commercial Real-Estate Froth as Fed Weighs ’17 Risks
A decade after the U.S. housing market collapsed, Federal Reserve officials are watching rising apartment towers as the next potential asset-price bubble, which could add to the debate about the pace of interest-rate hikes this year.
Fed Chair Janet Yellen cited commercial real estate prices as “high” in a speech at Stanford University on Jan. 19. That message has been echoed by Governor Jerome Powell, who warned “low rates may lead to a reach for yield,” as well as Boston Fed President Eric Rosengren, who cited luxury housing in his city.
While single-family housing prices have had a gradual recovery from the mortgage bust, commercial real estate is showing signs of being overheated in markets such as New York, San Francisco and Boston. Fed officials have mostly said they plan to address potential asset price bubbles with financial supervision, rather than by raising interest rates at a faster pace than they currently expect. But such hot-spots are testing their patience.
“It’s an important sector and so has to be on the radar screen,” said Jonathan Wright, an economics professor at Johns Hopkins University in Baltimore and a former Fed economist. “At least a couple of bank presidents would see it as a substantive argument for tighter policy. But I don’t see any indication that the center of the committee is inclined to adopt a faster pace of tightening.”
The Federal Open Market Committee on Wednesday reiterated plans to raise rates gradually, and no one dissented from a decision to leave the federal funds rate target range at 0.5 percent to 0.75 percent. Officials have penciled in three quarter-point rate hikes this year, according to the median quarterly estimate submitted by officials in December. Investors see the central bank taking its time, with a roughly 70 percent probability of a quarter-point hike by the June FOMC meeting.
read more: Bloomberg
Trump Targets Bank, Mortgage Regulations
President Trump moments ago ordered a sweeping review of Dodd-Frank Act rules enacted in response to the 2008 financial crisis. The President signing an executive action Friday designed to significantly scale back the regulatory system put in place in 2010. “We’re signing new rules for regulating the U.S. financial system. It doesn’t get much bigger than that, right?,” Trump said just before signing the document.
“During the campaign, I am fairly certain candidate Trump didn’t say he supported fewer consumer protections, however he did make clear that changes were needed to Dodd-Frank, “ says The Collingwood Group Vice Chairman Brian Montgomery and former HUD Secretary. “The President’s recent comments signal that it’s time for a common sense approach to regulation. For one, the barrage of rules targeted at mortgage bankers has required them to spend hundreds of millions in technology upgrades most of which have nothing to do with improving the actual customer experience.”
The action is designed to lay down the Trump administration’s approach to financial markets, with an emphasis on removing regulatory burdens and opening up investor options.
“One large independent banker told me he spends 75% of his information technology budget just on Dodd-Frank mandated changes,” says Collingwood’s Montgomery. “The new regulatory regime has also driven up the cost to originate a mortgage loan to $7,046 (in 2015) up from $4,500 in 2008. This creates two major problems – lenders remain fearful of loan defaults and the heavy-handed government intrusion that follows and will only lend to borrowers with pristine credit, and it’s now uneconomical for them to originate smaller balance mortgages.”
Changes at the Mall: Macy’s Gets Takeover Offer
Canada’s Hudson’s Bay Co. has approached Macy’s Inc. about a takeover, people familiar with the matter said, as the biggest U.S. department-store chain grapples with disappointing results and restive shareholders.
Talks between the companies are at a preliminary stage and also encompass other ways they could cooperate, one of the people said, adding that a deal for Macy’s real estate is also a possibility. Other details of the talks are unclear and it’s far from guaranteed there will be any deal.Hudson’s Bay is an acquisition-hungry owner of marquee names in retail including Lord & Taylor department stores and Saks Fifth Avenue. While its market value is dwarfed by that of Macy’s—$1.8 billion compared with $9.8 billion as of Friday morning—Hudson’s Bay could raise equity and debt against its real estate portfolio, which could be worth $14 billion, one of the people said. It could also bring in a partner.But complicating a takeover, Macy’s is saddled with about $7.5 billion in debt.
Macy’s has struggled in recent years amid increasing competition from upstarts and a shopping habits change and consumers buy more over the internet. Its stock has fallen more than 50% from the highest level it reached in 2015. In January, Macy’s said it would slash more than 10,000 jobs and detailed plans to close dozens of stores after another weak holiday-sales season. It’s facing mounting investor pressure to turn around its performance and reverse the stock drop. Starboard Value LP took a stake and a board seat and called on Macy’s to hive off its valuable real estate, which the activist investor says is worth more than $20 billion.
read more: Wall St Journal
Cashing In on Home Rental Biz
Invitation Homes Inc. shares ended higher as owner Blackstone Group LP takes a step toward cashing in its big bet on housing.
On Tuesday, Invitation Homes raised $1.54 billion in its initial public offering, which represents the largest U.S.-listed IPO in more than a year. The real-estate investment trust sold 77 million shares at $20 apiece.
Invitation Homes is the end result of the biggest home-buying spree in history. Starting in 2012 with a home in Phoenix, Blackstone spent some $10 billion buying and fixing up homes to rent. For stretches, the private-equity giant spent $150 million a week on foreclosed homes, often buying them sight unseen.
The company now owns and rents 48,431 houses in 13 markets, from Seattle to south Florida, according to Invitation’s offering document. Blackstone Group didn’t plan to sell any of its roughly 70% stake in the IPO, the filing said, but the listing will enable it to begin cashing out of its investment in the future.
The stock is also a test of investors’ interest in the rental-home business.
read more: Wall St Journal
FinTech: Online Lender SoFi Buys Digital-Banking Startup
SoFi is acquiring a digital-banking startup as the online lender seeks to accelerate its expansion into more pockets of consumer finance.
The San Francisco company said Wednesday it had reached a deal to buy Zenbanx Holding Ltd., a four-year-old firm that offers online and mobile bank accounts in multiple currencies and performs international money transfers.
Terms of the acquisition weren’t disclosed, but a person familiar with the matter said it was an all-stock deal valued at nearly $100 million.
Since its 2011 founding, SoFi has branched out beyond its original business of refinancing student loans and into personal loans, mortgages, wealth management and life insurance.
The company is betting that deepening relationships with borrowers will be better for its top line: an October corporate presentation reviewed by The Wall Street Journal said that the strategy was expected to generate an additional $3.7 billion in revenue from its existing customer base alone.
Chief Executive Michael Cagney said in an interview that with the Zenbanx purchase he expects customers will be able to open SoFi bank accounts by the end of the first quarter of 2017.
read more: Wall St Journal
Isle take it! The rich look to the Caribbean for second homes
Sometimes a Caribbean vacation isn’t enough.
A growing number of moneyed Americans love the islands so much they’re buying second homes there in high-end resorts and communities.
There’s good reason for their purchases.
Getting to the Caribbean is easier than ever, thanks to an increase in the number of direct flights, and the perks — including tax breaks and weather that entices year-round — are hard to beat. Then there’s the advantage of living away from overdeveloped New York-area vacation spots, such as the traffic-clogged Hamptons, and the fact that a home in the Caribbean is often cheaper than paying for luxury vacations in the long run.
Another plus for some: Many islands offer citizenship to real estate investors. For example, in St. Kitts and Nevis, a dual-island nation that faces both the Atlantic Ocean and Caribbean Sea, citizenship can be purchased with a $400,000 real estate investment.
read more: NY Post
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