Institutional investors may control 40% of U.S. single-family rental homes by 2030, according to MetLife Investment Management. And a group of Washington, D.C., lawmakers believe that Wall Street needs to back away from the market.
“What we’re saying is don’t have private equity buying up single -family homes,” said Rep. Ro Khanna, a Democrat representing California’s 17th Congressional District. Khanna is the lead author of the Stop Wall Street Landlords Act of 2022. “What’s outrageous is your tax dollars are helping Wall Street buy up single-family homes,” he said in an interview with CNBC.
The single-family rental industry got its start with government backing in the fallout after the 2008 financial crisis. “It was that rare opportunity that attracted the institutions to build a portfolio out of these foreclosed properties” said Steven Xiao, an assistant professor of finance and managerial economics at the University of Texas at Dallas.
Since the early 2010s, Tricon Residential, Progress Residential, American Homes 4 Rent, Invitation Homes have each bought thousands of homes. They’ve also added to the housing supply in some cases with built-for-rent communities.
Some of these companies are financed by private equity firms like Blackstone and investment managers like Pretium Partners.
“It’s almost a captive market” said Jordan Ash, director of Labor-Jobs and Housing at the Private Equity Stakeholder Project. “They’ve been very explicit about how people are shut out of the homebuying market and are going to be perpetual renters.”
These calls come after fierce housing inflation hit many Sun Belt states, including Texas, Florida and Georgia, according to the National Association of Realtors.
The prices in their Sun Belt markets have outpaced national figures for rent inflation, according to research compiled by Zumper for CNBC. Between January 2020 and January 2023, rents for a two-bed detached home increased about 44% in Tampa, Florida, 43% in Phoenix, and 35% near Atlanta. That’s compared to a 24% increase nationwide.
Industry advocates argue that they do not control enough market share to dictate prices in any market. Large institutions owned roughly 5% of the 14 million single-family rentals nationally in early 2022, according to analysts.
By 2030, the institutions may hold some 7.6 million homes, or more than 40% of all single-family rentals on the market, according to the 2022 forecast by MetLife Investment Management.
In the short term, however, some companies may retreat from the real estate market as correction concerns mount. “You will see some selling by us,” said Jon Gray, Blackstone’s chief operating officer, in a December 2022 interview with CNBC.
Watch the video above to learn about the rise and future of corporate landlords in the United States.
You may know Don Mullen as one of Wall Street’s hardest-driving executives—or as your landlord. The son of an elevator repairman, Mullen shot through the ranks of Salomon Brothers, Drexel Burnham Lambert and Bear Stearns. During his 11 years at Goldman Sachs Group Inc., he played a key role in the company’s sale of investments backed by subprime mortgages just as the housing market crashed—part of a trade sometimes referred to on Wall Street as the “Big Short.” In 2009 he traveled to some of the US’s worst-hit communities, spending $25 million of his money to buy distressed properties, before deciding to expand it into a business. He founded Pretium Partners LLC in 2012, turning it into a $51 billion asset manager and one of the country’s largest private owners of single-family homes and rentals.
Pretium tells investors it aims to achieve percentage returns in the mid- to high-teens over a long period of time, according to Mullen. But he declines to say more because, in his words: “I’m in a highly politically sensitive asset class.” Last year, Minnesota’s attorney general sued Pretium and some related entities, saying they failed to adequately maintain rental homes in the state. Earlier this month a judge denied Pretium’s motion to dismiss. Separately, in January, a subsidiary of a Pretium-managed fund signed an agreement with Minneapolis to abide by a long list of conditions to keep its rental license. While Pretium declined to comment on those specific incidents, Mullen says his institutional model provides renters with access to better neighborhoods, service and technology and can help governments relocate people during natural disasters and other emergencies.
It may be one of the most anticipated recessions of all time, but that doesn’t mean it won’t hurt.
Barclays Capital Inc. says 2023 will go down as one of the worst for the world economy in four decades. Ned Davis Research Inc. puts the odds of a severe global downturn at 65%. Fidelity International reckons a hard landing looks unavoidable.
To kickstart the new year, Bloomberg News has gathered more than 500 calls from Wall Street’s army of strategists to paint the investing landscape ahead. And upbeat forecasts are hard to find, threatening fresh pain for investors who’ve just endured the great crash of 2022.
As the Federal Reserve ramps up its most aggressive tightening campaign in decades, the consensus view is that a recession, albeit mild, will hit both sides of the Atlantic with a high bar for any dovish policy pivot, even if inflation has peaked.
Still, humility is the order of the day for prognosticators who largely failed to predict the 2022 cost-of-living crisis and double-digit market losses. This time around, the consensus could prove badly wrong once again, delivering a host of positive surprises. Goldman Sachs Group Inc., JPMorgan Chase & Co. and UBS Asset Management, for their part, see the economy defying the bearish consensus as price growth eases — signaling big gains for investors if they get the market right.
Expect an uneven year in trading. Deutsche Bank AG sees the S&P 500 Index rising to 4,500 in the first half, before falling 25% in the third quarter as a downturn bites — only to bounce back to 4,500 by end-2023 as investors front-run a recovery.
Perhaps the easy money will be made in bonds at long last. After the asset class delivered the biggest loss in the modern era last year, UBS Group AG expects US 10-year yields will drop to as low as 2.65% by the end of the year on juicy coupons and renewed haven demand.
Meanwhile the crypto bubble has burst. Investments houses are in no mood to talk up the industry, after spending the boom years hyping up the speculative mania as same kind of digital gold for tomorrow, while peddling virtual-currency products to clients in traditional finance. Now, crypto references have been all but extinguished in 2023 outlooks.
And remember Covid? For global macro strategists at least, it’s a distant memory. The pandemic is only a material consideration with respect to China’s high-risk effort to rapidly reopen its economy — the outcome of which could have profound consequences for the world’s investment and consumption cycle.
US stocks open higher on robust consumer spending
Stocks opened higher in the opening minutes of trading on Wall Street as investors welcomed news of robust consumer spending in October, as well as signs of a drop in the rate of inflation.
The S&P 500 index rose 0.2% to 4,087, while the Nasdaq rose 0.1% to 11,475.
Streaming service Netflix led the games, up 8.85% as the firm’s turnaround plan to attract new customers with cheaper tiers of membership appeared to please investors.
Next to buy collapsed retailer Joules
Collapsed country fashion brand Joules has been bought up by retail rival Next, administrators have said, in a deal that will see 133 of its staff being laid off.
The retailer has acquired around 100 Joules stores, with approximately 1,450 employees across these stores and head office transferring as part of the transaction.
Under the terms of the deal, Joules’ head office in Leicestershire has also been acquired while 19 stores will be closed immediately.
Will Wright, head of Restructuring at Interpath Advisory and joint administrator, said: “Following a highly competitive process, we are pleased to have concluded this transaction which secures the future of this great British brand, as well as safeguarding a significant number of jobs.
“To have achieved this in such a short timetable is testament to the support we’ve received from employees, suppliers and other key stakeholders throughout the administration process, so we’d like to express our profound thanks to everyone involved.”
City comment: employers need to think about both class and race when recruiting
Naomi Kellman, founder of the Target Oxbridge programme, offers her comments on diversity in recruitment amongst City employers:
“Working class people face invisible barriers to progress in the Square Mile, according to the City of London Corporation, which reported this week that banks and other City firms need to do more to nurture those who don’t have posh accents or privileged parentage.
“No sensible person would argue against this. Even so, the adage that ‘it’s all about class, not race’ has become a little too popular lately in public discussions about social mobility. The truth is that it’s not an either/or – as I know, having spent ten years helping Black students, many of them also from lower-income households, get into Oxford and Cambridge, and then to City firms.
“The consistent message from speaking to these students is clear – both class and race affect their ability to access top universities and the most desirable jobs.”
That’s a wrap: film firm snapped up by rival
London-based film services and equipment company Location One is being snapped up by a rival firm, Facilities by ADF, in a deal worth almost £9 million.
The company was founded in 2008 in the garage of its managing director, former location manager Crispin Hardy, with just “ two bowsers, some tables and chairs and battery lights.”
Barking-based Location One now has 80 staff and has gone on to work on a string of blockbusters, from The Crown, above, on Netflix to the BBC’s Peaky Blinders as well as My Lady Jane and The Gentleman. It has grown into the UK’s biggest integrated TV and film location services firms.
ADF says the deal will take it towards being a one-stop shop for the UK’s fast-growing high-end TV and film industry. The country is now Netflix’s third-biggest filming venue after the US and Canada.
Rates outlook lifts tech stocks, buy note boosts Deliveroo
Deliveroo shares were boosted today after a City firm backed the online food delivery sector to weather the cost of living crisis.
The note by Jefferies said current valuations for Deliveroo and other players including Just Eat Takeaway.com mis-priced the potential of their “sustainable” earnings streams.
Jefferies added: “Deliveroo remains the most under-appreciated equity in the sector. It has consistently led on big sector themes and strategy, all of which is now observable in its leadership on growth.”
Deliveroo listed at 390p in March 2021 but languished at 73p in October due to fears over rising costs and expectations for a big fall in takeaway demand.
The shares today rallied by 5% or 4.3p to 91.5p after Jefferies highlighted a potential 80% upside to 155p. Just Eat also improved 2% or 39.2p to 1903.4p.
Their performances were aided by renewed market hopes that the worst of the recent run of interest rate rises are out the way.
Wall Street surged last night as Federal Reserve chair Jerome Powell signalled a slackening in the pace of tightening after four successive hikes of 0.75%.
The FTSE 100 index followed November’s 7% rise by adding another 14.98 points to 7588.03, consolidating its position at the highest level since June.
It was outgunned by the FTSE 250 index, however, as the UK-focused benchmark benefited from a stronger pound to lift 0.7% or 126.58 points to 19,289.91.
Other technology-focused stocks to benefit from the rate rise outlook included Ocado, which jumped 6% or 37.4p to 660p in the FTSE 100. ASOS and Cazoo investor Molten Ventures rose 34p to 665.5p and 16.4p to 406.4p respectively in the FTSE 250.
Auction Technology Group bucked the trend, however, as its shares fell 123p to 734p despite reporting annual profits in line with previous guidance.
City Comment: Stock trading is not like Call of Duty
Two snapshots of how the financial services sector is doing today – and two very different outlooks.
City broker Peel Hunt reports profits down 99% (ninety-nine per cent, the vidiprinter doing the football scores might have felt the need to clarify).
That’s a function of nerves in the Square Mile and among corporate clients. No one wants to float or do risky deals in the teeth of a recession.
Over at AJ Bell, a brilliant business which punts shares to retail investors, things are going swimmingly. New customers are pouring in. Revenues and profits are up smartly. Growth seems easy to come by.
The risk here must be that the City broker is ahead of the game. Retail investors are blithely carrying on, unaware of the turmoil that has left many professionals running scared.
When the retail market plays catch-up with the City, there shall be brunt fingers for tea.
Into this noise marches the Financial Conduct Authority, which is seriously worried about the “gamification” of share trading.
A new breed of apps – not AJ Bell, let’s be clear – are offering incentives to trade as if they were the Tesco Clubcard.
There are points and celebratory messages for making a trade, something that encourages the armchair punter to treat the stock market as if it were Call of Duty.
During lockdown a “meme-stock” trading frenzy encouraged some small investors into the delusion that they could bet against, and beat, giant US hedge funds.
The delusion will be corrected, one way or the other.
FTSE 250 up 0.9%, ASOS shares surge 5%
The FTSE 100 index is 6.35 points higher at 7579.40, keeping London’s top flight at its highest level since June. Big risers included Ocado, which lifted 6% or 39.6p to 662.2p, and insurer Prudential after a gain of 3%.
Some of the stocks behind this week’s strong performance gave up some of their gains, including Rolls-Royce as the engines giant weakened 1.4p to 89.5p. Oil giants BP and Shell were also down by around 1.5%.
The FTSE 250 index, which has lagged the performance of blue-chip stocks so far this year, added 0.9% on the back of a stronger session for the pound.
The UK-focused benchmark rose 173.33 points to 19,336.66, led by private equity firm Bridgepoint after its shares rallied 6% or 12.7p to 209.2p. Fash fashion business ASOS also improved 5% or 37p to 668.5p and publisher Future gained 75p to 1480p in the wake of yesterday’s annual results.
Hotel Chocolat sinks into the red over botched Japan expansion
Hotel Chocolat posted a full-year loss of £9.4 million this morning after its botched Japan expansion plan led to tens of millions of pounds being written off.
The Hertfordshire-based confectioner was forced to write off almost £30 million after its Japanese business went through insolvency.
Hotel Chocolat boss Angus Thirlwell told the Standard: “We thought we should take that on the chin and write the cost off and change the way we approach international opportunities and contain the capital spend and work with partners rather than try to do it ourselves.
“Nobody gets international right the first time straight out of the blocks – it’s very much a case of adapting and taking the learnings and making your work smarter as you go on.”
Hotel Chocolat shares rose 1%.
Inflation hopes fuel strong month for markets
November was a very strong month for markets, with the FTSE 100 up by around 7% to its highest level since June.
Deutsche Bank reported progress for 35 of the 38 non-currency assets in its coverage, the highest number so far in 2022 and a change from the mood for much of this year.
The bank’s strategists said the positive momentum was propelled by a number of factors, including signs that inflation is beginning to ease across key economies.
There was also further encouragement that China is inching away from its zero Covid strategy, leading to a massive outperformance from Chinese assets.
One asset that struggled was the US dollar, with the unwinding risk premium meaning it experienced its worst month in over a decade.
House prices down 1.4% in mini-Budget fallout
Building society Nationwide today reported the biggest monthly drop in house prices since June 2020.
The month-on-month fall of 1.4% follows a decline of 0.9% in October and reduces the annual rate of growth to 4.4% from 7.2% the previous month. The average price stood at £263,788.
Robert Gardner, Nationwide’s chief economist, said the fallout from the mini-Budget continues to impact the market.
He said: ““While financial market conditions have stabilised, interest rates for new mortgages remain elevated and the market has lost a significant degree of momentum.
“Housing affordability for potential buyers and home movers has become much more stretched at a time when household finances are already under pressure from high inflation.”
Hotel Chocolat sinks into the red over botched Japan expansion
Hotel Chocolat posted a full-year loss of £9.4 million this morning after its botched Japan expansion plan led to tens of millions of pounds being written off.
The Hertfordshire-based confectioner was forced to write off almost £30 million after its Japanese business went through insolvency.
Hotel Chocolat boss Angus Thirlwell told the Standard: “We thought we should take that on the chin and write the cost off and change the way we approach international opportunities and contain the capital spend and work with partners rather than try to do it ourselves.
“Nobody gets international right the first time straight out of the blocks – it’s very much a case of adapting and taking the learnings and making your work smarter as you go on.”
Hotel Chocolat shares rose 1%.
Inflation hopes fuel strong month for markets
November was a very strong month for markets, with the FTSE 100 up by around 7% to its highest level since June.
Deutsche Bank reported progress for 35 of the 38 non-currency assets in its coverage, the highest number so far in 2022 and a change from the mood for much of this year.
The bank’s strategists said the positive momentum was propelled by a number of factors, including signs that inflation is beginning to ease across key economies.
There was also further encouragement that China is inching away from its zero Covid strategy, leading to a massive outperformance from Chinese assets.
One asset that struggled was the US dollar, with the unwinding risk premium meaning it experienced its worst month in over a decade.
House prices down 1.4% in mini-Budget fallout
Building society Nationwide today reported the biggest monthly drop in house prices since June 2020.
The month-on-month fall of 1.4% follows a decline of 0.9% in October and reduces the annual rate of growth to 4.4% from 7.2% the previous month. The average price stood at £263,788.
Robert Gardner, Nationwide’s chief economist, said the fallout from the mini-Budget continues to impact the market.
He said: ““While financial market conditions have stabilised, interest rates for new mortgages remain elevated and the market has lost a significant degree of momentum.
“Housing affordability for potential buyers and home movers has become much more stretched at a time when household finances are already under pressure from high inflation.”
ITM Power’s new CEO delays trading update
ITM Power, which helps industry decarbonise, has delayed its next trading update as its new CEO takes up the reins at the the AIM-listed clean fuel company.
The move will gove Dennis Schulz, who is succeeding Dr Graham Cooley today, “sufficient time to properly assess the company’s operations and identify his near-term priorities”, it said today. It was originally planned for December 8. Its half-year results are due by the end of January, when it said it would “provide an initial strategic and operational update”.
Schulz moved over from Linde, the German chemical giant that is one of ITM’s biggest backers. Cooley ran the Sheffield-based firm for 13 years.
Three promoted in FTSE 100 reshuffle
Investment group Abrdn and engineer Weir have secured promotion back to the FTSE 100 after the results of December’s quarterly review were confirmed last night.
Specialist insurer Beazley is also set for top flight status, with the North Sea production firm Harbour Energy, vet products business Dechra Pharmaceuticals and private equity group Intermediate Capital the three stocks dropping into the FTSE 250 index.
Abrdn lost its FTSE 100 place in the previous reshuffle while Weir suffered relegation in September 2021. The changes come into effect on 19 December.
Bonuses in doubt at Peel Hunt
PROFITS at Peel Hunt crashed 99.7% in the half-year, a brutal sign of how tough life has been for City brokers this year.
With the market for flotations basically halted and clients sitting on their hands while they prepare for a likely recession, brokers and fund managers have found conditions difficult.
The plunge in profits from £29.5 million to just £100,000 is a stark sign of the City strife – and an indicator that for bankers at Peel Hunt and else where bonuses this year as likely to be negligible or non-existent.
Peel Hunt’s own IPO saw it join the stock market in September 2021 on the back of a pandemic trading boom that saw thousands of new punters open share trading accounts.
The firm was worth £280 million on float, with chief executive Steven Fine’s 7% stake worth £20 million.
Peel Hunt shares are down 60% this year and open today at 83p, valuing the business at around £100 million.
Revenues in the six months to September are down 42% to £41 million.
But the broker says it is luring new clients. It now has 165 investment banking clients with an average market cap of £555 million.
Fine says: “”Challenging market conditions have persisted throughout our first half as the macroeconomic and geopolitical backdrop has continued to have an adverse impact on markets and investor sentiment. Equity capital markets activity has been at a multi-decade low and market volumes have reduced materially during this period. This is due to several factors including investor redemptions, institutional investors building up cash positions and retail investors being more cautious as equity markets responded to rising inflation, the cost-of-living crisis and the possibility of a lengthy UK recession.”
Peel Hunt says it has made “good progress” on setting up a European office.
Tesla to recall over 400,000 cars in China
Tesla is set to recall over 400,000 cars in China over software faults, the Chinese regulator said today.
Model 3 and Model Y cars are to update to fix an error which caused clearance lamps to fail to work, which could lead to the risk of collision in some circumstances.
Tesla said it would be updating the cars’ software remotely to fix the problem.
Powell speech boosts Wall Street, FTSE 100 seen higher
The FTSE 100 index rose more than 6% in November and is expected to start the new month on the front foot after big gains on Wall Street last night.
Europe’s softer inflation print and last night’s comments from Federal Reserve chair Jerome Powell on a potential rate rise slowdown have boosted the mood.
The Dow Jones Industrial Average finished 2.2% higher last night and the S&P 500 rallied 3.1% following Powell’s speech in Washington.
With a smaller interest rate rise of 0.5% expected this month, the question for markets now is how many more hikes are likely to follow and whether the peak will be above 5%.
Cracks are already starting to show in the US economy, with figures yesterday showing that private companies created the smallest number of jobs since early 2021.
CMC Markets expects the FTSE 100 index to open 40 points higher at 7,613, having risen by 0.8% in yesterday’s session.
Daily Mash owner Digitalbox adds to online satire empire with The Poke acquisition
Daily Mash owner Digitalbox has added to its online satire empire with the acquisition of The Poke.
The Poke handpicks the funniest content on the web to enable its users to spend” time well wasted”. It generated revenue of c.£0.17m in its financial year to November 2021.
The terms of the deal were not disclosed.
James Carter, CEO, Digitalbox, said: “The Poke is another excellent addition to our growing portfolio of exciting digital assets. We have a proven and successful approach to integration which releases value from the assets we acquire. The inclusion of The Poke, alongside The Daily Mash and The Tab, creates opportunities to grow our audiences across the sites and strengthen the Company’s market position which is led by Entertainment Daily.”
Marion LaRue is an architect and principal at DIALOG’s Vancouver office.Lindsay Elliott
From labour shortages to climate change, the commercial real estate industry continues to face key challenges as 2022 comes to a close. It’s never been more urgent to harness the power of the other half of the talent pool in traditionally male-dominated industries.
We spoke to three Canadian female powerhouses in commercial real estate about their successes, challenges and advice for the next generation of women.
Marion LaRue, principal and architect, DIALOG
Marion LaRue is an architect and principal at DIALOG’s Vancouver office. Her area of commercial real estate design expertise includes sports, recreation, public and institutional projects. Currently Ms. LaRue is working on student residences and dining commons for Simon Fraser University, the Vivo for Healthier Generations recreation centre in Calgary, a student housing facility for North Island College on Vancouver Island and an aquatics/ice arena addition in Edson, Alta. She is passionate about creating environments that inspire people to take ownership of their health and well-being.
What do you like about working in commercial real estate?
I get a great deal of gratification from the improvements the facilities make in people’s lives. I also find public sector clients are fun to work with and they respect and value our expertise as designers. This field provides architects with a tremendous opportunity to be creative.
What are the biggest challenges and opportunities facing commercial real estate today?
Some of the most significant challenges include the exponentially rising cost of construction, lack of women in the work force, labour shortages impacting delivery schedules for both consultants and the construction trades, recession challenges exacerbated by interest rate hikes and increasing carbon emissions that continue to contribute to global warming.
To mitigate these challenges, we need to invest in new design and construction technologies. We need to invest in more affordable housing and daycare for families so more women continue to enter the labour force. We must also focus on repurposing existing infrastructure and limit new building wherever reasonably possible.
What opportunities and challenges do you see where you live?
Vancouver’s opportunities include harnessing the creativity of green building, research at local institutions such as UBC, and embracing vertical farming, given the tremendously high cost of land. Our challenges include growth limited by geography, rise in sea level and the ongoing tug of war to keep agricultural land supplying food to our communities.
Which projects are you most proud of?
My most career-defining project is the design and construction of the Richmond Olympic Oval for speedskating for the 2010 Winter Olympics. The facility is now the vibrant home of community recreation and sports in the City of Richmond, a successful example of a post-Olympics venue that is improving the health and well-being of all users; it was also one of the first projects to robustly engage the local First Nations in meaningfully contributing to its design.
What sacrifices have you had to make as a woman in a male-dominated industry?
I didn’t spend as much time with my children as I would have liked. At times I’ve had to manage my compensation expectations or even the expectations for the types of work. I’ve been careful with how I voice my opinion on some topics at times as it can be a judgmental industry. I’ve waited longer than some men for the same opportunities. Some of my male mentors have been incredibly supportive and provided me with opportunities along the way. But I didn’t have many female role models, which has driven me to focus on mentorship in my career.
What advice do you have for women who are pursuing a career in this industry?
I would recommend that you ask for what you believe you are entitled to, with integrity. Take more risks earlier in your career and know the choices you make matter significantly down the road. Build relationships with as many men and women equally and be self-aware – it’s critically important.
Patricia Phillips, CEO of PBA Group of Companies
Patricia Phillips is the chief executive officer of the PBA Group of Companies.
Patricia Phillips is the chief executive officer of the PBA Group of Companies, a full-spectrum real estate company based in Calgary, which owns and developed the city’s Dorian hotel. She has closed more than $1.5-billion in transactions in her role. Before joining PBA Group, Ms. Phillips was the founder and CEO of three successful private oil and gas companies, served as an economist on trade policy development for the Tokyo Round of the General Agreement on Tariffs and Trade (GATT) in Geneva, and worked on Wall Street as a financial analyst.
Why did you choose this line of work?
I’m immensely grateful to have had the privilege of growing up within a supportive family of business leaders. My father was a local real estate developer and his passion for creating community was extremely formative in my own development. The ability to collaborate and create opportunities speaks deeply to me; it was a natural progression into the hospitality industry, as it provides further opportunities to support the local economy while showcasing Calgary as a world leader in its own right.
What are the biggest challenges and opportunities facing commercial real estate today?
Moving into 2023, we realize supply chains will continue to be challenging; however, the PBA team and I are relying heavily on our local relationships to help cut down on wait times, while ensuring we support local vendors and suppliers whenever possible.
Which projects are you most proud of?
Our most recent development, The Dorian hotel, is the first to be built in Calgary’s downtown core in over a decade and the city’s only female-developed and owned hotel. Less than 2 per cent of hotels are owned and developed by women worldwide. It’s also the city’s only dual-brand lifestyle hotel, which allows us to target specific demand segments, and offer two unique price points with shared amenities.
What do you think needs to change to make the industry more accessible?
I strongly believe and advocate that our industry requires more diversity and inclusion. Unfortunately, for many years commercial real estate has been seen as a man’s world and a “boys’ club.” I’m hopeful this is currently changing. I’ll use PBA as a great example; we prominently feature females within our leadership team and board of directors.
What advice do you have for women pursuing a career in this industry?
Give yourself permission to follow your passions and trust your gut when you have a calling to do something interesting. We spend a lot of our youth living up to other people’s expectations, but in the end, we are the only ones who need to live with our choices. Never shy away from surrounding yourself with people smarter than yourself as this only improves your own skill set. Being self-aware is key and finally, give back to your community any way you can.
Diana Hoang, managing director/broker of record, owner of Spear Realty
Diana Hoang is the founder and managing director of Spear Realty Inc.ERNESTO DiSTEFANO
Diana Hoang is the founder and managing director of Spear Realty Inc., a commercial and industrial real estate brokerage based in Toronto. Ms. Hoang began her career in the industry in 2009 in a publicly traded company that allowed her to work with teams specializing in all facets of commercial real estate. Since starting her business in 2021, Ms. Hoang has led more than $500-million in real estate transactions, including record-setting deals for leading landlord groups.
Why did you choose this line of work?
I’ve always had a passion for marketing and sales; I enjoy being practical, resolving issues and helping groups maximize their rate of return. About 13 years ago as I was raising my two young daughters, I found a position as an administrator with a large commercial real estate firm in Toronto. Then I transitioned into a full-time non-licensed assistant, got my licence and began as a fully licensed adviser in the industrial space.
What projects do you have on the go right now?
Expansion is top of mind to keep up with demand from existing and new clients who want that boutique level of client care and expertise. We’re looking at increasing our numbers of agents who specialize in various areas and asset classes. Within the span of one year, we grew to a team of 10 active associates and plan to expand further to 30 by 2023.
What kinds of sacrifices or concessions have you had to make as a woman in a male-dominated industry?
The day does not stop at 5 p.m. I am still juggling schoolwork and family, managing kids’ extracurricular activities, sacrificing both my personal time and the time needed for career advancement, and working and taking conference calls even when on vacation with the family.
How are you doing business differently these days?
We’re proud to have an equal number of active female commercial agents at our office and plan to keep focusing on hiring, training and retaining more. Our mandate is to move towards 100-per-cent digital and paperless operations.
What advice do you have for women pursuing a career in this industry?
Be flexible, tolerant, always search for alternate solutions, and be creative to achieve your end goal. Perseverance will win the day – you should never take no for an answer.
S&P 500 falls on Wall Street as stellar US jobs data encourages Fed rate hawks
New York stocks fell in opening trade and the dollar rose after influential employment data powered through forecasts, allaying fears about a US recession but opening the way for the Federal Reserve to be more hawkish in lifting interest rates to tame inflation.
The S&P 500 fell 30 points to 4,124.40, a slip of 0.8%. The dollar index rose by over 1% as the prospect of faster monetary tightening boosted the currency. The non-farm payroll report showed the creation of 528,000 jobs in July, more than double the number forecast, which took the number of people on private sector payrolls in the US back to pre-pandemic levels and cut the overall unemployment rate to 3.5%.
Hinesh Patel, portfolio manager at Quilter Investors, said it showed the US labour market “remains red hot”, and:
“The Federal Reserve will see this a sign that they need to continue to hike aggressively to get inflation under control and take some of the froth out of this tight labour market.”
US jobs data smashes through forecasts and points to more room for Fed rate hikes
Closely-watched US employment data has powered through forecasts, showing a 528,000 rise in the number of non-farm payrolls for July, more than double the 250,000 forecast.
The number looks to give the US Federal Reserve more room to fight inflation by raising interest rates without damaging the economy if it able to generate such strong job growth. The overall unemployment rate fell to 3.5% from 3.6%.
Such strong demand for labour will dilute fears about a US recession as central banks tighten monetary policy and could play into lead City forecasters’ expectations on the pace of rate rises there.
After the numbers came out, US futures fell, andpointed to an opening fall for the S&P 500 of around 30 points as investors measured the implications of the data, one of the most closely-watched on the economic calendar. The dollar rallied, with the index tracking it against a series of currencies up 0.8% for the session. Investors sold out of two-year US Treasuries, one of the assets most sensitive to the outlook for US monetary policy, sending its yield up toward 3.2%.
London’s FTSE 100 was 17 points lower at 7430.60.
FTSE 100 steady in mid-session trade ahead of US jobs numbers
London’s FTSE 100 slipped 7 points to 7,441.3 in afternoon trade as investors across global markets turned their attention to influential US jobs data that will play into exptectations for the pace of rate rises in the world’s biggest economy,
The non-farm payrolls report for July is due out at 1.30pm London time, an hour before the start of Wall Street trade. City forecasters expect it to show the creation of 250,000 posts outside the agricultural sector in the month, which would be a slowdown in the pace of job creation from 372,000 in June, though not by enough to shift the unemployment rate from 3.6%. It would be the 19th consecutive month of payroll expansion.
Michael Hewson, chief market analyst at CMC Markets, pointed out a reading of 250,000 would ”still be the lowest number this year,” but that “the strength of the labour market may well be starting to increase in the level of importance when it comes to how aggressive the Fed is likely to be when it comes to tackling inflation. “
Financial stocks were stronger in London after well-received updates from Hargreaves Lansdown and the London Stock Exchange. Their shares gained 7% and 3% respectively. WPP’s shares fell 7% after it sounded a muted tone on the outlook for the advertising industry as recession looms.
Allianz profits climb as it claims to be well set to handle inflation
Health, life and disability insurer Allianz insisted it is in good shape to withstand high inflation and economic pressures across Europe as it reported a boost in profits.
Revenues rose 8.2% to €37.1 billion (£31.2 billion) in the second quarter, while operating profit increased by 5.3% to €3.5 billion.
CEO Oliver Bäte said: “We are well-positioned to manage the impact of high inflation and the economic pressures that are particularly evident in Europe.”
In May the US asset management unit of Allianz was hit with a $6 billion fine for fraudulent conduct by the Securities and Exchange Commission over the collapse of investment funds early in the pandemic.
‘Once in a generation’ global troubles hurt Hargeaves Lansdown
Investment business Hargreaves Lansdown said it had been hit by a “geopolitical climate not seen in a generation” that had caused “subdued flows and lower activity across wealth management” as full-year revenue and profits declined.
Assets under administration feel 9%, driven by what HL described as “market falls” to £123.8 billion.
Revenue dipped 8% year on year to £583 million. Pre-tax profit dropped 26% to £269.2 million, but the firm remained confident of delivering “outstanding client service, strong shareholder returns and market leadership”. Boss Chris Hill stressed its “continued commitment to our clients to ensure they get the best outcomes in these challenging times”.
Pendragon reverses out of car dealership takeover talks
Pendragon, owner of the Evans Halshaw and Car Store brands, has said it is no longer in takeover talks with an unnamed suitor after one existing shareholder refused to engage with the bid.
The company said the offer, from a “large international corporate”, was not going ahead after one of its five biggest investors would not join the talks, which were supported by the other four. The bidder’s offer, priced at 29p per share, would have valued Pendragon at about £460 million. It was conditional on the backing of all the major shareholders.
Demand for used cars has stayed strong after the end of lockdown and the prospect of tighter restrictions on new vehicles’ environmental performance boosted demand in the sector. Nonetheless, the trade faces pressure from the cost-of-living crisis and soaring inflation.
According to Auto Trader, the industry magazine, the average price of a used car in July was more than £17,000, a year-on-year increase of almost 20%.
Pendragon forecast underlying profit before tax of around £33 million for the first half of its financial year. Shares rose more than 11% to 24p.
LSE buyback boosts shares another 2%
London Stock Exchange’s better-than-expected results powered shares to their highest level since April today.
LSE rose another 2% or 198p to 8342p at near the top of the FTSE 100 index, with its valuation now up by a quarter since mid-June as investors become more comfortable about the integration of financial data firm Refinitiv.
The benefits of the $27 billion deal from January 2021 were shown in today’s results as data and analytics revenues rose £482 million to £2.3 billion. The capital markets arm grew revenues to £720 million, despite a 47% drop in the number of new listings.
Adjusted profit lifted 4.3% excluding currency moves to £1.4 billion as LSE accompanied its results with a £750 million buy back of shares and 27% increase in interim dividend.
Charlie Huggins, head of equities at Wealth Club, said investors could be richly rewarded if LSE is successful with the Refinitiv integration. He added that LSE was a “pretty resilient business” as three-quarters of its revenues are recurring.
Huggins said: “High inflation is less of a problem for LSE than for most businesses, thanks to good pricing power which results in consistently solid margins. The business model is also highly scalable and capital light.”
LSE’s improvement came during an otherwise lacklustre session as the FTSE 100 retreated 12.23 points to 7435.83. The biggest downward force came from BP and Shell after the price of Brent crude dipped to below $95 a barrel.
The gloomy UK economic outlook meant little appetite for Next shares, which declined for a second session in a row despite the retailer’s better-than-expected trading update yesterday.
Liberum raised its price target on Next to 500p this morning, but shares fell another 122p to 6592p. Other broker upgrades saw BAE Systems lifted to 970p by Deutsche Bank, but shares in the defence firm were flat at 793p.
Outside the top flight, Capita shares fell 2p to 27.5p despite the UK government’s biggest software and IT services provider reporting half-year results in line with expectations.
LSE shares up 3%, BP down 1%
Declines of 1% for BP and Shell after the price of Brent crude last night dipped to $94 a barrel left the FTSE 100 index near to its opening mark, down 8.99 points at 7439.07.
The weakness for the oil majors was offset by results-day progress at London Stock Exchange and investment platform Hargreaves Lansdown after their shares lifted 3% and 4% respectively.
LSE’s improvement of 214p to 8358p was driven by plans for a £750 million buy back of shares alongside a 27% increase in its interim dividend to 31.7p a share.
The FTSE 250 index was unchanged at 20,155, having rallied by 0.7% yesterday.
House price dips 0.1% in July
The latest house market report from mortgage lender Halifax shows prices fell last month for the first time since June 2021, with a marginal fall of 0.1%. The annual rate of growth eased to 11.8%, from 12.5%.
Halifax managing director Russell Galley said: “While we shouldn’t read too much into any single month, especially as the fall is only fractional, a slowdown in annual house price growth has been expected for some time.
“Leading indicators of the housing market have recently shown a softening of activity, while rising borrowing costs are adding to the squeeze on household budgets against a backdrop of exceptionally high house price-to-income ratios.”
However, he added that some of the drivers of the buoyant market over recent years, such as extra funds saved during the pandemic and investment demand, are still evident.
Galley said: “The extremely short supply of homes for sale is also a significant long-term challenge but serves to underpin high property prices.
“Looking ahead, house prices are likely to come under more pressure as those market tailwinds fade further and the headwinds of rising interest rates and increased living costs take a firmer hold.”
FTSE 100 steady, US jobs report in focus
Financial markets have held firm in the face of the Bank of England’s recession warning and biggest hike in interest rates in 27 years.
The domestic-focused FTSE 250 improved by 0.7% yesterday and the FTSE 100 index was close to its opening mark, in line with robust performances elsewhere in Europe.
CMC Markets sees a resilient start after forecasting a 10 point rise for the FTSE 100 to 7458, although progress later in the session is likely to depend on the outcome of the closely-watched non-farm payrolls report in the US.
Wall Street economists expect to see the addition of 250,000 jobs, which compares with the previous month’s better-than-forecast figure of 372,000.
The strength of the labour market is likely to be the key consideration for the US Federal Reserve when determining the pace of interest rate rises in the fight against inflation.
US markets were slightly lower yesterday but the S&P 500 remains on track to finish higher for the third week in a row.
The pound, meanwhile, stood at just above $1.21 versus the US dollar. Brent crude, which has fallen by around 10% this week, has steadied at near to $94.50 a barrel.
Check out the companies making headlines after the bell:
Pinterest — Shares of the image-sharing company popped more than 19% despite a miss on the top and bottom lines as activist investor Elliott Management revealed it is now the largest investor. The company also beat monthly active user estimates.
Simon Property Group — Simon Property’s stock rose more than 1% in extended training despite a revenue miss. The REIT beat earnings estimates by 8 cents and shared earnings guidance for the full year that topped expectations.
Arista Networks — The cloud computing stock added 4.6% after hours following a beat on the top and bottom lines in the latest quarter. Arista Networks reported adjusted earnings of $1.08 per share on revenues of $1.05 billion and posted strong revenue guidance for the current quarter.
Avis Budget — The rental vehicle company gained 6% in extended trading on the back of a better-than-expected quarter. Avis Budget posted adjusted earnings per share of $15.94 per share on $3.24 billion in revenue. Analysts anticipated earnings of $11.48 a share on revenue of $3.17 billion.
ZoomInfo — Shares of ZoomInfo jumped 12% postmarket after topping earnings and revenue estimates for the most recent quarter. The company reported adjusted earnings of 21 cents per share on $267 million in revenue and lifted its guidance for the full year.