SAN JOSE — A San Jose office building seized through foreclosure in 2021 is in default on its loan — again — following two aborted efforts to develop housing on the building’s choice site near the city’s mega malls.
The office building is located at 826 N. Winchester Blvd. in San Jose. Since the start of the coronavirus outbreak nearly three years ago, the building has had a trio of owners and faced two foreclosure proceedings.
Investors still hunger for Silicon Valley office buildings despite current economic uncertainties, numerous property transactions show.
Even so, the delinquent loans that have plagued the property are a reminder that more than a few commercial properties in the Bay Area are mired in financial woes.
At first glance, the office building would seem to be primed for success, given its location in San Jose.
It’s situated on Winchester Boulevard near the corner of Hedding Street. The three-story structure is a few blocks away from Stevens Creek Boulevard and the Westfield Valley Fair and Santana Row malls.
In the most recent foreclosure threat, Sacramento-based lender Socotra REIT is pushing to auction off the building, Santa Clara County property records show.
The borrower has failed to repay a December 2021 loan of $6.45 million, Socotra REIT states in documents related to the attempted foreclosure.
The current owner is Kochland LLC, an affiliate controlled by Kenneth Ryan Koch, a real estate executive based in the Folsom Lake-area town of El Dorado Hills. Kochland bought the office building in December 2021, according to the county records.
The current string of owners for the property originated in the spring of 2020, a review of county property records shows.
Kenneth Colbert, a Redondo Beach-based real estate executive, paid $8.25 million for the building in March 2020. That was the first month of coronavirus-linked business shutdowns to combat the outbreak and spread of the deadly bug.
At the time of the purchase, a Colbert-headed affiliate obtained a $6.1 million loan to finance the acquisition.
Eventually, the property’s mortgage became delinquent and the building was auctioned off through a foreclosure proceeding.
In June 2021, a group headed by Los Gatos-based Sridhar Capital paid $2.9 million to buy the office building during the auction.
In December 2021, the affiliate headed up by Kenneth Ryan Koch paid $10.75 million for the property. The Koch-led group also obtained the $6.45 million loan to finance the office building’s purchase.
Now, the current lender on the site is pushing forward with plans to auction the property before the end of this year.
Two of the recent owners of the property envisioned the 0.6-acre as a site where housing development could occur.
In 2021, Kenneth Coleman’s group proposed a mixed-use project with ground-floor retail or restaurant uses. Residences would sprout on the floors above, a summary of the planning documents shows.
In May 2022, Kenneth Ryan Koch’s group proposed a five-story mixed-use development that would have included housing. Koch couldn’t be be reached for comment.
The two mixed-use projects were never built. The city planning records indicate that neither proposal received municipal approval.
The office center, known as Winchester Professional Building, stands empty and is bordered by a chain link fence. Graffiti mars multiple walls of the structure.
ANZ has forecast house prices will fall by a total of 22 percent from their peak, or by 32 percent, when adjusted for wages.
ANZ has forecast house prices will fall by a total of 22 percent from their peak, or by 32 percent, when adjusted for wages.
They said it would take house prices to about 10 percent below pre-pandemic levels.
ANZ’s chief economist Sharon Zollner told Morning Report for most people, the drop would come as a relief and would see house prices drop “from those crazy levels”.
The drop had the potential to “go off the rails” but if the decline happened in an orderly fashion, Zollner believed it would be a “great outcome” for the medium term.
However, it would take some jobs with it, she said, mostly in the construction industry.
Zollner said the country was already halfway through the forecast with houses down 12 percent – but prices were still at “silly levels”.
But the forecast was “even more encouraging” when it was adjusted for wage growth, she said.
“When you think about it in terms of real house prices adjusted for wage growth, we are actually forecasting them to fall 32 percent.”
That would see a drop a bit below pre-Covid levels.
From today, ANZ has raised its floating and fixed rate home loans between 35 and 65 basis points after last week’s large increase in the Reserve Bank’s cash rate.
The bank’s floating mortgage will rise 65 basis points to 7.99 percent, with its cheapest standard fixed rate being a 12-month loan at 7.14 percent.
A new wave of proptech tools are being used to aid in everything from identifying affordable housing to waste management.Chun han
Proptech, short for property technology, is already a growing force in commercial real estate, and now a Toronto tech firm is making it easier for developers to determine where to locate their projects even before they assemble the land.
“Our company is like Google Maps, only it’s for commercial developers. We use technology to help people building projects such as high-rise, multifamily buildings identify new sites,” says Devin Tu, president of MapYourProperty.
MapYourProperty’s technology streamlines due diligence for developers. “It lets them look at issues such as zoning, land use and transit corridors at properties they’re considering buying. A typical developer will look at up to 200 properties per year and only buy one or two to develop; our tool lets them focus on those one or two sites they’ll likely choose,” Mr. Tu says.
“This is the kind of work that can take up to two weeks of research. Our proptech tool can shorten this to 30 seconds,” he adds.
MapYourProperty is part of a new wave of proptech apps and tech tools that are extending the use of technology beyond project management and building maintenance into every aspect of the commercial real estate sector.
“It’s an exciting new industry; it’s early stage,” says Benjamin Shinewald, president and chief executive officer of BOMA Canada, a national umbrella group for building and maintenance operators. “There are new applications and areas of use being created all the time.”
Different areas of the real estate sector are taking notice of proptech’s possibilities. In February, MapYourProperty received a $2.5-million award from Canada Mortgage and Housing Corp.’s data-driven funding program to help organizations – including Habitat for Humanity Canada, Rural Development Network and Toronto Metropolitan University (formerly Ryerson) Centre for Urban Research and Land Development (CUR) – identify affordable housing sites.
Another Toronto proptech company Lane Technologies, which enables building owners and office tenants to manage office life digitally, was acquired by U.S. firm VTS for US$200-million in October, 2021, one of the largest proptech deals to date.
This acquisition anticipates workers returning to offices after COVID-19. Lane’s proptech allows owners to manage leases, while tenants and office workers can use the app to book conference rooms, order food, get through security and connect with nearby restaurants, entertainment venues and other local businesses.
“In our experience, we’re seeing proptech expand to cover a lot of different aspects of the real estate sector,” Mr. Tu says.
“In our case it’s on the predevelopment side; we’re planning to expand our operation to cover areas representing 50 per cent of the population across Canada within the next 18 months. We’re also seeing other proptech being used more to manage office and retail space.”
He says proptech is expanding to areas with programs that use artificial intelligence (AI) to predict housing prices near a development, by factoring in variables such as transit access, nearby prices and infrastructure to come up with ballpark prices in a nanosecond. “But AI can be overhyped. You can use it to predict some things, but not everything,” Mr. Tu says.
Proptech is becoming more important to the circular economy, says Molly Westbrook, executive asset managing director at Cushman & Wakefield Canada. The goal of a circular economy is to minimize waste in every aspect of a business operation, by reducing waste and reusing and recycling materials.
“There are some [proptech] items that are really moving the needle on sustainability,” Ms. Westbrook says. Proptech is already used widely to help buildings increase energy efficiency, enabling operators to manage heating and cooling remotely and to better know exactly where and when maintenance is needed.
Managing waste is the next frontier, Ms. Westbrook says. “Recycling is really key to a building’s operation – how a building streams, diverts and reuses paper, cardboard and plastic can really make a difference to its operating cost and efficiency,” she notes.
“We’ve been introducing AI technology to increase the efficiency of these types of operations,” she explains. Algorithms determine which materials go where to be recycled or reused.
It’s a way to overcome the situation in Canada where, for example, only 9 per cent of plastic waste now gets recycled.
Proptech can also simplify low-tech tasks such as garbage collection, Mr. Shinewald adds.
“In the past waste haulers would remove garbage from the large bins in the ground floors of the buildings on a schedule, say every Tuesday. With proptech, you can put a sensor in the bin to send a message to the hauler when it is full,” he says.
“That way, haulers come on demand rather than on a fixed schedule when the bin may or may not be full. This is not only more cost efficient, but it is more sustainable; it will result in fewer trips to the building,” he says.
As proptech continues to grow in significance, it’s important to reach a common understanding of what it actually is, Mr. Shinewald adds.
“We’re piloting a program that will be the first smart buildings standard for the industry,” he says. This will help current proptech companies, new entrants and potential users know what tools to consider and watch for.
He says BOMA expects to announce the first certified buildings soon, followed by a larger and more public launch of certified smart buildings in the spring.
“This is a made-in-Canada program created by and for the commercial real estate industry,” he says. “It will bring transparency and standards to the sector.”
There’s ample opportunity for proptech to grow in Canada, Mr. Tu adds.
“The field is wide open. In the United States proptech is used more widely, but it’s spreading widely here fast, with new companies and new applications all the time,” he says.
BAY CITY, Mich. — President Biden will be in Michigan November 29th— heading to Bay City to talk about the manufacturing growth happening here in the U.S.
SK Siltron CSS’s Semiconductor Material Manufacturing Facility, located in Bay City, expanded it’s Michigan operations last year. The $300M investment puts them in a position to quadruple production capacity over the next few years, creating 150 new positions for up to 300 news employees.
The President will highlight how this— and expansions like it— are supported by CHIPS Act incentives and his economic plan to rebuild supply chains through job creation.
SK Group, the owners of SK Siltron CSS, have committed to investing over $50B in the U.S. economy, including electric vehicle batteries, bio-tech, and semiconductor industries. Since 2021, over $13B have been invested into new private sector manufacturing ventures in Michigan alone, for a combined total of $240B in investments across the country.
Along with this economic boom, Biden is expected to discuss gas prices and Democrats’ success in the midterm elections in Michigan.
The President will be joined by Governor Gretchen Whitmer, Congressman Dan Kildee, and other state and local leaders.
Uttarakhand’s economy is largely driven by agriculture and tourism. With the drastic impact of a pandemic-induced lockdown that affected every sector for two years, the state’s economy has taken a hit too.
While in 2018-19, Uttarakhand reported a 7.64 per cent growth in Gross State Domestic Product (GSDP), the state recorded a 7.14 per cent increase in 2019-20, says data by the Ministry of Statistics and Programme Implementation.
Now, the Himalayan state has hired McKinsey, a global management consultancy, with the aim of doubling its GDSP in the next five years. It has set the target of boosting the economy from ₹2.73 lakh crore to ₹5.5 lakh crore, which will be done by reporting a Compound Annual Growth Rate (CAGR) of 15% by 2027.
Bringing New Investments & Reforms
Under the Shashakt Uttarakhand mission, the government has signed a two-year agreement with McKinsey. Founded by accountant James McKinsey and business theorist Marvin Bower in 1926, the company has worked with over 750 clients so far, most notable being Google, Amazon and Microsoft among others.
The primary focus of the company’s work towards Uttarakhand government will be in areas like agriculture, infra projects, service sector, horticulture, Urban (Brownfield and greenfield cities), and social sectors). This will aid the state in fast-tracking the income of the state as well as its people.
In the first six months, the company will shortlist sectors which need progress with the help of new investments and reforms. Secretary (Planning) R. Meenakshi Sundaram, in a report by The Hindu, said, “It will also bring renowned companies to invest in the identified areas in the remaining year and a half. The agency will invest in increasing the yield of crops and products and improving their quality.” He added that McKinsey shall also work to build an export market for the products manufactured in the state.
‘Making PM’s Dream Come True’
Chief Minister Pushkar Singh Dhami has stated, “PM Narender Modi has said that the third decade of this century will be the decade of Uttarakhand. To make his dreams come true, we have given the firm a target of doubling the GDP of Uttarakhand in five years.”
The Prime Minister made the statement in October this year while attending an event in Mana – the state’s last village – to lay the foundation stone of projects worth more than ₹3,400 crores in Uttarakhand.
Also Read: IIT Mandi Develops Visual-Based Method To Evaluate Earthquake-Prone Structures In Himalayan Region
South Africa’s land reform policy remains highly contested. But, in our view, a number of persistent myths about farmland statistics and the structure of commercial agriculture skew debates. This makes it difficult to reach some common understanding about the realities of land and agriculture in the country.
In 1994 when South Africa became a democracy, white farmers owned 77.580 million hectares of farmland out of the total surface area of 122 million hectares. The new government set a target of redistributing 30% of this within five years. This target date has been moved several times and is now 2030.
According to popular belief between 8% and 10% has been redistributed so far. But as we show below this is incorrect as it omits a number of key statistics.
Only 17%-20% of the 77,58 million ha is suitable for field crop, irrigation and horticultural production. More than 55% of farmland is only ideal for extensive grazing (land that is poor and dry but animals can roam widely, the Karoo being an example), and another 20% for intensive pastures and animal production (land, the KwaZulu-Natal Midlands being an example, that receives good rains and has good pastures for grazing).
This shows that the potential of farm land being used to create full-time sustainable livelihoods is limited. This suggests that a careful and measured approach needs to be adopted in redistribution efforts.
These realities are the basis for our arguments against five standard myths about agriculture and land in South Africa. That’s not to say that there isn’t a great deal still to be done. But failure to recognise the gains that have been achieved means that policies can’t be developed based on what’s been achieved so far.
Myth 1: 40,000 white farmers own 80% of all South Africa’s land
First, let’s turn to the number that’s quoted about white farmers.
The number of 40,122 commercial farmers is widely quoted as the total number of farmers earning a commercial income from farming. The number comes from the 2017 census of commercial agriculture.
But the number is flawed.
Firstly, the census only considers farmers who are registered for VAT (for which the the threshold is a turnover of R1 million a year (about US$59 000 today).
Adding in two other groups – the number of households involved in commercial farming as their main source of income and those that practice farming as a secondary source of income – the total number of households comes to 242,221.
It’s difficult to estimate the “race” of commercial farmers. But, using different data sources including the 2011 population census, the 2017 agricultural census and the 2016 community survey we estimated that most commercial farm enterprises are black owned. And that only 18% of these households are white.
Now to the 80% figure.
In 1994 white farmers owned 77.58 million ha of freehold land. We estimate that white farmers now own 61 million ha of freehold farmland. This follows the implementation of redistribution and restitution programmes and other transfers of land to the state and black farmers. It still represents 78% of freehold farmland but covers only 50% of the total surface area of South Africa.
Fact: white commercial farmers (around 44,000 farming units) own 61 million ha – 78% of the farmland that comes with private title deeds or 50% of all land in South Africa.
Myth 2: Commercial agriculture is characterised by large-scale white farmers
This myth results from a misinterpretation of the concept of “commercial” and “scale”.
Commercial agricultural production indicates production beyond subsistence needs, with some (or a major share) of the total production sold to the market. This usually also involves the purchase of production inputs such as seeds and fertiliser.
But commercial production happens at various levels or “scales of production”.
The scale of farming is not determined by land size. Instead it refers to the gross farm income (or turnover) of the farming enterprise.
Land size is not a good indication of the scale of the farming operation. For example, a small irrigation farm of 10 ha can deliver millions in turnover while a 10,000 ha extensive grazing farm is unlikely to exceed R1 million in turnover per annum.
If we unpack the census of commercial agriculture, commercial farming in South Africa consists largely of small-scale family-based operations. Almost 90% of all VAT-registered commercial farming businesses can be classified as micro – or small-scale enterprises (turnover below R13.5 million). While this is true, it’s also a fact that there are just over 2,600 large farms with turnover on average above R22.5 million per annum. These farms are responsible for 67% of all farm income and employ more than half the agricultural labour force.
If we take account of the farms that are not registered for VAT it is evident that 98% of all farming operations in South Africa are small-scale operations.
But, a mistaken leap is made to say that all white commercial farmers are “large-scale” operations, and all black farmers are “small-scale”. In the process, most writers on South African agriculture confuse the “scale of the operation” with the “race” of the operator.
Fact: most white commercial farmers in South Africa are small-scale and family-based operations. Only a small minority (2 600) are large-scale operations. Most of these are owned by white farmers.
Myth 3: Commercial farmers are hoarding land and not selling any farms
It is often argued that white commercial farmers are holding on to their land and not offering it for sale to potential buyers.
Deeds office records provide insights into the activity in the farmland market. Between 2013 and 2021, the annual number of farm transactions recorded varied between 2,000 and 4,000. In 2021 2,585 farms were sold and registered to new owners. Most (58%) of these were farms smaller than 300 hectares.
Between 2003 and August 2022, the state acquired 2.8 million ha which brings the total area of farm land acquired by the state since 1994 to 3,12 million ha (or 4% of freehold farmland). This suggests that the state is also active in the market.
Fact: The farmland market is active with around 2% of total farmland with private title deeds traded annually.
Myth 4: All black farmers with private title deeds acquired their land through the land reform programme
Deeds records show that since 1994 black South Africans have privately acquired a total of 1.78 million ha of farmland through normal self-financed market transactions.
Over the same period the government redistribution programme has assisted beneficiaries to acquire a total of 7.2 million ha of farmland. Thus, for every four hectares transferred by the State to black South Africans, private transactions contributed another one hectare to the process.
Fact: Black farmers have acquired almost 2 million ha of farmland (2,3% of total freehold farmland) on their own without any assistance from the state sponsored land redistribution programme.
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Myth 5: South Africa has only redistributed 8% of farmland to black people
The debate on the expropriation of land is largely driven by the myth that white farmers are hoarding land and are inflating prices, and therefore, it is impossible to remove the racially skewed land ownership patterns in South Africa.
These arguments typically ignore the statistics on the land market and the fact that black South Africans have been acquiring farmland on their own. These arguments also conveniently ignore other factors, such as bureaucratic inefficiences, patronage and corruption – that have slowed down land reform.
In addition, the incorrect presentation of the progress with the land reform process is also maliciously used to inflate the argument for expropriation. If South Africans are true to themselves and correctly report the statistics, then they will be much closer to the 30% target. We estimate, using various official datasets, that up to August 2022, the land statistics were as follows:
Based on these numbers extracted from official sources it is evident that South Africa has made much more progress than what is been punted around. It is, therefore, disingenuous of analysts and commentators not to take account of the real progress made here.
Fact: Taking account of all the pillars of the land reform programme, it is estimated that 24% of all farmland has been redistributed or land rights have been restored. This is close to the 30% target, which could be reached by 2030.
Johann Kirsten, Director of the Bureau for Economic Research, Stellenbosch University
Wandile Sihlobo, Senior Fellow, Department of Agricultural Economics, Stellenbosch University
NEW YORK — Cautious shoppers hunted for the best deals at stores and online as retailers offered new Black Friday discounts to entice consumers eager to start buying holiday gifts but weighed down by inflation.
Due to elevated prices for food, rent, gasoline and other essentials, many people were being more selective, reluctant to spend unless there was a big sale. Some were dipping more into savings, turning to “buy now, pay later” services that allow payment in installments, or running up their credit cards at a time when the Federal Reserve is hiking rates to cool the U.S. economy.
Sheila Diggs, 55, went to a Walmart in Mount Airy, Maryland early Friday looking for a deal on a coffee maker. To save money this year, she said the adults in her family are drawing names and selecting one person to shop for.
“Everything’s going up but your paycheck,” said Diggs, who manages medical records at a local hospital.
This year’s trends are a contrast from a year ago when consumers were buying early for fear of not getting what they needed amid supply-network clogs. Stores didn’t have to discount much because they were struggling to bring in items.
Early shopping turned out to be a fleeting trend, said Rob Garf, vice president and general manager of retail at Salesforce, which tracks online sales. People this year are holding out for the best bargains, and retailers responded this week with more attractive online deals after offering mostly lackluster discounts earlier in the season.
Online discounts rates were 31% on Thanksgiving, up 7% from the previous year, according to Salesforce data. The steepest discounts were in home appliances, general apparel, makeup and luxury handbags.
Macy’s Herald Square in Manhattan, where discounts included 60% off fashion jewelry and 50% off select shoes, was bustling with shoppers early Friday.
The traffic was “significantly larger” on Black Friday compared to the previous two years because shoppers feel more comfortable in crowds, Macy’s CEO Jeff Gennette said.
He said that bestsellers from Macy’s online sale, which started last weekend, included 50% off beauty sets. Last year Macy’s, like many other stores, had supply chain issues and some of the gifts didn’t arrive until after Christmas.
“Right now we are set and ready to go, “ he said.
Sophia Rose, 40, a respiratory specialist visiting Manhattan from Albany, New York, was heading into Macy’s with big plans to splurge after scrimping last year when she was still in school. She put herself on a budget for food and gas to cope with inflation but had already spent $2,000 for holiday gifts, and plans to spend a total of $6,000.
“I am going to touch every floor,” she said. “That’s the plan.”
Customer traffic was also higher than last year at Mall of America in Bloomington, Minnesota, according to Jill Renslow, executive vice president of business development of the shopping center. She said 10,000 people were at the sprawling mall during the first hour after the 7 a.m. opening, though inflation prompted many shoppers to figure out what to buy before showing up.
“With the economy, people are planning a little more,” she said.
Delmarie Quinones, 30, went to a Best Buy in Manhattan to pick up a laptop and printer she ordered online at $179, down from $379. Quinones, a health home aide, said that higher prices on food and other expenses are making her reduce her spending from a year ago, when she had money from government child tax-credit payments.
“I can’t get what I used to get,” said the mother of five children, ages 1 to 13. “Even when it was back to school, getting them essentials was difficult.”
Major retailers including Walmart and Target stuck with their pandemic-era decision to close stores on Thanksgiving Day, moving away from doorbusters and instead pushing discounts on their websites.
But people are still shopping on Thanksgiving — online. Garf said Salesforce data showed online sales spiked in the evening during the holiday this year, suggesting people went from feasting to phone shopping. And with holiday travel up, he said a greater share of online shopping occurred on mobile devices this year.
“The mobile phone has become the remote control of our daily lives, and this led to an increase in shopping on the couch as consumers settled in after Thanksgiving dinner,” Garf said.
But with more shoppers visiting stores this year, growth in online sales slowed.
Shoppers spent $5.3 billion online on Thanksgiving Day, up 2.9% from the holiday last year, according to Adobe Analytics, which monitors spending across websites. Adobe expects that online buying on Black Friday will hit $9 billion, up just 1% from a year ago.
Black Friday saw some of the labor unrest that has rippled through the retail industry over the past year. A coalition of trade unions and advocacy organizations are coordinating strikes and walkouts at Amazon facilities in more than 30 countries under a campaign called “Make Amazon Pay.” Among other places, hundreds of workers at a facility near the German city of Leipzig staged a protest Friday, calling for better working conditions and higher pay.
And at Walmart stores, some employees had Wednesday’s deadly shooting at a company store in Virginia in the back of their minds.
Jude Anani, a 35-year-old who works at a Walmart store in Columbia, Maryland, said the company offers training on how to react in such circumstances but he would like to see more protection. He was happy to see police officer standing outside the store, as is typical on Black Friday, and wished that was the case “most of the time during the year.”
Against today’s economic backdrop, the National Retail Federation — the largest retail trade group — expects holiday sales growth will slow to a range of 6% to 8%, from the blistering 13.5% growth of a year ago. However, these figures, which include online spending, aren’t adjusted for inflation, so real spending could even be down from a year ago.
Analysts consider the five-day Black Friday weekend, which includes Cyber Monday, a key barometer of shoppers’ willingness to spend. The two-month period between Thanksgiving and Christmas represents about 20% of the retail industry’s annual sales.
Hadero reported from Mount Airy, Maryland. Olson reported from Arlington, Virginia. Associated Press Personal Finance Writer Cora Lewis in New York contributed to this report.
Follow Anne D’Innocenzio: http://twitter.com/ADInnocenzio
A person shops in an Apple store on Black Friday, Nov. 25, 2022, in New York. (AP Photo/Julia Nikhinson)
NEW YORK (AP) — Cautious shoppers hunted for the best deals at stores and online as retailers offered new Black Friday discounts to entice consumers eager to start buying holiday gifts but weighed down by inflation.
Due to elevated prices for food, rent, gasoline and other essentials, many people were being more selective, reluctant to spend unless there was a big sale. Some were dipping more into savings, turning to “buy now, pay later” services that allow payment in installments, or running up their credit cards at a time when the Federal Reserve is hiking rates to cool the U.S. economy.
Sheila Diggs, 55, went to a Walmart in Mount Airy, Maryland early Friday looking for a deal on a coffee maker. To save money this year, she said the adults in her family are drawing names and selecting one person to shop for.
“Everything’s going up but your paycheck,” said Diggs, who manages medical records at a local hospital.
This year’s trends are a contrast from a year ago when consumers were buying early for fear of not getting what they needed amid supply-network clogs. Stores didn’t have to discount much because they were struggling to bring in items.
Early shopping turned out to be a fleeting trend, said Rob Garf, vice president and general manager of retail at Salesforce, which tracks online sales. People this year are holding out for the best bargains, and retailers responded this week with more attractive online deals after offering mostly lackluster discounts earlier in the season.
Online discounts rates were 31% on Thanksgiving, up 7% from the previous year, according to Salesforce data. The steepest discounts were in home appliances, general apparel, makeup and luxury handbags.
Macy’s Herald Square in Manhattan, where discounts included 60% off fashion jewelry and 50% off select shoes, was bustling with shoppers early Friday.
The traffic was “significantly larger” on Black Friday compared to the previous two years because shoppers feel more comfortable in crowds, Macy’s CEO Jeff Gennette said.
He said that bestsellers from Macy’s online sale, which started last weekend, included 50% off beauty sets. Last year Macy’s, like many other stores, had supply chain issues and some of the gifts didn’t arrive until after Christmas.
“Right now we are set and ready to go, “ he said.
Sophia Rose, 40, a respiratory specialist visiting Manhattan from Albany, New York, was heading into Macy’s with big plans to splurge after scrimping last year when she was still in school. She put herself on a budget for food and gas to cope with inflation but had already spent $2,000 for holiday gifts, and plans to spend a total of $6,000.
“I am going to touch every floor,” she said. “That’s the plan.”
Customer traffic was also higher than last year at Mall of America in Bloomington, Minnesota, according to Jill Renslow, executive vice president of business development of the shopping center. She said 10,000 people were at the sprawling mall during the first hour after the 7 a.m. opening, though inflation prompted many shoppers to figure out what to buy before showing up.
“With the economy, people are planning a little more,” she said.
Delmarie Quinones, 30, went to a Best Buy in Manhattan to pick up a laptop and printer she ordered online at $179, down from $379. Quinones, a health home aide, said that higher prices on food and other expenses are making her reduce her spending from a year ago, when she had money from government child tax-credit payments.
“I can’t get what I used to get,” said the mother of five children, ages 1 to 13. “Even when it was back to school, getting them essentials was difficult.”
Major retailers including Walmart and Target stuck with their pandemic-era decision to close stores on Thanksgiving Day, moving away from doorbusters and instead pushing discounts on their websites.
But people are still shopping on Thanksgiving — online. Garf said Salesforce data showed online sales spiked in the evening during the holiday this year, suggesting people went from feasting to phone shopping. And with holiday travel up, he said a greater share of online shopping occurred on mobile devices this year.
“The mobile phone has become the remote control of our daily lives, and this led to an increase in shopping on the couch as consumers settled in after Thanksgiving dinner,” Garf said.
But with more shoppers visiting stores this year, growth in online sales slowed.
Shoppers spent $5.3 billion online on Thanksgiving Day, up 2.9% from the holiday last year, according to Adobe Analytics, which monitors spending across websites. Adobe expects that online buying on Black Friday will hit $9 billion, up just 1% from a year ago.
Black Friday saw some of the labor unrest that has rippled through the retail industry over the past year. A coalition of trade unions and advocacy organizations are coordinating strikes and walkouts at Amazon facilities in more than 30 countries under a campaign called “Make Amazon Pay.” Among other places, hundreds of workers at a facility near the German city of Leipzig staged a protest Friday, calling for better working conditions and higher pay.
And at Walmart stores, some employees had Wednesday’s deadly shooting at a company store in Virginia in the back of their minds.
Jude Anani, a 35-year-old who works at a Walmart store in Columbia, Maryland, said the company offers training on how to react in such circumstances but he would like to see more protection. He was happy to see police officer standing outside the store, as is typical on Black Friday, and wished that was the case “most of the time during the year.”
Against today’s economic backdrop, the National Retail Federation — the largest retail trade group — expects holiday sales growth will slow to a range of 6% to 8%, from the blistering 13.5% growth of a year ago. However, these figures, which include online spending, aren’t adjusted for inflation, so real spending could even be down from a year ago.
Analysts consider the five-day Black Friday weekend, which includes Cyber Monday, a key barometer of shoppers’ willingness to spend. The two-month period between Thanksgiving and Christmas represents about 20% of the retail industry’s annual sales.
______
Hadero reported from Mount Airy, Maryland. Olson reported from Arlington, Virginia. Associated Press Personal Finance Writer Cora Lewis in New York contributed to this report.
______
Follow Anne D’Innocenzio: http://twitter.com/ADInnocenzio
The agriculture sector is an evergreen sector of the economy. The world will always need food, and the companies in this sector help ensure the world is fed. In fact, agriculture stocks are typically considered to be in the same category as consumer staples because demand remains constant no matter what is happening in the broader economy.
This is also a diverse sector. And that can get confusing for investors. Investors can buy into pure-play companies that make fertilizer and pesticides. You can choose to look at companies such as Deere & Company (NYSE:DE) that supply the equipment that many farms use.
And as interest in sustainable agriculture is growing, so is this sub-sector which creates another path for investors, particularly those who are focused on ESG (environmental, social, and corporate governance) concerns.
This presentation highlights seven agricultural stocks that offer investors different ways to play the sector.
New home sales rose in October but analysts expect the sector to remain under pressure
Jim WATSON
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New home sales in the US defied expectations and rose in October, government data showed Wednesday, despite mortgage rates remaining high.
Although sales surged during the pandemic, the sector cooled with the central bank raising the benchmark lending rate multiple times this year to ease demand and tamp down soaring inflation.
But sales of new single-family houses picked up 7.5 percent to a seasonally adjusted annual rate of 632,000 in October, said the Commerce Department, despite analyst expectations of a dip as higher rates bite.
The median sales price for a new home in October rose to $493,000 as well, up from September’s revised figure of $455,700.
Monthly data can be volatile, and some observers have pointed to a rush to lock in mortgage deals before rates increased further as a reason that sales surged previously.
Another factor analysts have cited is a lack of existing inventory, nudging buyers into the market for new property, supporting sales.
In October, the sales pace remained below that of the same period in 2021.
The latest figures come as the US’s much bigger existing home sales market slipped for a record nine consecutive months.
“The increase in sales came despite a rise in new home prices,” said Nancy Vanden Houten of Oxford Economics in an analysis.
But she noted that this reflected a shift in composition of sales, towards homes priced above the median.
“We expect sales to remain under pressure going forward as the erosion in affordability this year keeps many buyers on the sidelines,” she said.
Home sales have eased “sharply” overall, added economist Rubeela Farooqi of High Frequency Economics.
“Pressure is likely to persist in the near term as low inventories, still-high prices and elevated mortgage rates weigh on activity,” she added in an analysis.
Stocks on Wall Street closed broadly higher Tuesday, as solid company earnings helped lift several retailers ahead of the Thanksgiving holiday in the U.S.
The S&P 500 rose 1.4%, more than making up for its losses last week. The Dow Jones Industrial Average rose 1.2% and the Nasdaq composite gained 1.4%.
All the company sectors in the benchmark S&P 500 index rose, with technology stocks driving much of the rally. Chipmaker Nvidia rose 4.7%.
Financial and health care stocks also helped lift the market. Charles Schwab rose 1.6% and Pfizer added 1.9%.
Energy stocks notched the biggest gain as the price of U.S. crude oil rose 1.5%. Chevron rose 2.6%.
“Yesterday’s slow sell-off of energy was overdone,” said Jay Hatfield, CEO of Infrastructure Capital Advisors. “So you’re getting a bounce back in energy and that’s really leading the market.”
Long-term Treasury yields fell. The yield on the 10-year Treasury, which influences mortgage rates, slipped to 3.77% from 3.84% late Monday.
“When rates go down it’s great for all stocks,” Hatfield said.
The S&P 500 rose 53.64 points to 4,003.58. The Dow gained 397.82 points to 34,098.10. The tech-heavy Nasdaq climbed 149.90 points to 11,174.41.
Smaller company stocks also got a boost. The Russell 2000 rose 21.20 points, or 1.2%, to 1,860.44.
Investors have very little news to review this week, but several retailers and technology companies are closing out the latest round of corporate earnings with their financial results. Best Buy surged 12.8% after the electronics retailer did better than analysts expected and said a decline in sales for the year will not be as bad as it had projected earlier.
Dell Technologies rose 6.8% after the computer maker reported strong third-quarter profit and revenue. Zoom Video slumped 3.9% after giving investors a weak profit and revenue forecast.
Several retailers made particularly strong gains following solid financial results. Abercrombie & Fitch surged 21.4% and American Eagle jumped 18.2%.
Nearly every company in the S&P 500 has reported their latest financial results, according to FactSet, and the results have been mixed. Companies in the index have reported overall earnings growth of about 2%, but have also issued various warnings about weaker consumer demand and crimped sales as inflation continues squeezing consumers.
Inflation and the Federal Reserve’s fight to tame it remains the main concern for Wall Street. The central bank on Wednesday will release minutes from its latest policy meeting, potentially giving investors more insight into its decision-making process.
Wall Street has been hoping that the central bank might ease up on its aggressive rate increases. Its benchmark rate currently stands at 3.75% to 4%, up from close to zero in March.
The Fed has warned that it may have to ultimately raise rates to previously unanticipated level to cool the hottest inflation in decades. That strategy raises the risk that it could go too far in slowing economic growth and bring on a recession.
Worries about a recession continue hanging over the global economy and markets.
The Paris-based Organization for Economic Cooperation and Development is forecasting modest economic growth globally this year and more tepid growth in 2023. Russia’s war in Ukraine continues threatening energy supplies and key food commodities including wheat. A resurgence of COVID-19 cases in China continues threatening the world’s second-largest economy and global supply chains.
“In 2023, we expect less pain but also no gain,” stated a report from Goldman Sachs looking ahead to the new year.
The investment bank expects inflation and high interest rates to essentially flatten out corporate earnings and hold the broader stock market at its current levels, with the S&P 500 ending 2023 where it currently sits at around 4,000 points.
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