The Dealmaker: 10/30/2017

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The Dealmaker is a daily note of the day’s top real estate stories served just in time for lunch. Bon Appetit! Subscribe here to receive the Dealmaker to your inbox

Lennar, CalAtlantic strike deal to create largest U.S. home builder. “[T]he combination will increase Lennar’s presence in markets it already operates in and allow it to be one of the top three home builders in 24 of the top 30 markets in the country.” The Wall Street Journal has more on the deal that “would create a combined company with revenues of more than $17 billion in the last year.” (Subscriber Content).

The Villas at Cheney Estates set for Nov. 16 public hearing. “[Paradise Valley Town Council recently] discussed the state of [the] proposed eight-lot private residential community on a 9.6-acre property at the [N.W.] corner of Northern Avenue and Scottsdale Road.” Paradise Valley Independent recaps the study session and has the latest developments on plans for the Geoffrey Edmunds / Rod Cullum project.

How does Cullum Homes remain at the top of luxury home market? AzBigMedia takes a look at how “lock-and-leave,” “rightsizing,” “building techniques,” “Virtual Reality” and “Building Information Modeling” have all factored into Cullum Homes becoming “one of the top custom builders in the Valley.”

Christopher Todd Communities starts on 5th rental community this year.“[The company] has started preliminary construction on its fifth luxury [‘horizontal’] rental community this year in the Phoenix metro area. CEO Todd Wood on the “single-story, single-family homes with private backyards”: “We have created a new way to live that is resonating with the market…” AzBusinessMagazine. 

Phoenix home flips up 16 percent as aggressive investors find bargains.“This year through mid-October, 7,502 Valley homes have been bought and resold within 180 days.” And AZCentral real estate reporter Catherine Reagor relates a personal experience of just how ‘f’-ing intense (read “flipping intense”) the bargain hunting been: “One day last week,” three separate investors contacted her, seeking to buy her home!

Peoria’s future development heading north. “Deputy City Manager Andy Granger and Community Development Director Chris Jacques “look at the possible future Peoria can expect, given [‘historical data’ for population and area growth, and] the present growth patterns throughout the Valley…” One of several TAKEAWAYS in this Peoria Times report: “8,000 SFR units [are] projected for the next five years [with the] growth focus… mainly north of Bell, where 93 percent of the permits are expected to be issued.”

eGADS! – Tempe firm’s $4M dispute sticks landlords nationwide. “Dozens of apartment complex owners across the country failed to receive tenant rent payments in early October due to mysterious financial issues faced by a Kentucky-based payment processor [eCheckit, ‘eRentPayment’s payment processor’], and Tempe’s Check Commerce is stuck in the middle of the dispute.” East Valley Tribune.

Evictions are a growing threat to renters. “About 20 percent of renters couldn’t pay their rents in full for at least one of the past three months…”  How Phoenix fares as far as renters getting 86’d, plus the link to the full Apartment Listreport, “Rental Insecurity: The Threat of Evictions to America’s Renters” — in REALTORMag.

Sedona examines short-term vacation home rentals. “Prior to Jan. 1, Sedona was one of a handful of cities in Arizona where this practice was banned… But ever since Gov. Doug Ducey signed Senate Bill 1350 into law, it’s been legal… aside from those neighborhoods where homeowners associations have made them illegal.” Red Rock News looks at the latest updates given to the Sedona City Council “on specific aspects of the law such as neighborhood impacts, taxes and businesses licenses.”

UPWARDLY MOBILE HOMES? Shipping container housing project to go up near downtown Tucson. “Stackhouse is a [50-foot] steel structure with slots for shipping-container homes. Homebuyers can pick their container and rent a slot in the Stackhouse, which will be located near the head of the snake bridge at Broadway and Euclid Avenue… A special crane will lift and place the containers in their slot.” Further Stackhouse details plus a colorful visual of the development at Arizona Daily Star. 

Stuck in place, U.S. homeowners hunker down as housing supply stays tight. “Despite rising home prices and a growing economy, U.S. homeowners’ mobility rate is stuck at a 30-year low as many opt to stay put rather than move to pursue job opportunities or trade up for more space… The Wall Street Journal has the story and how it has led to “led Americans to pour record sums into home renovations.” (Subscriber Content.)

Ryan loses key ally on tax reform after switch on breaks for homeowners. “The National Association of Home Builders on Saturday accused House Speaker Paul Ryan of abruptly reversing course on a mortgage tax credit proposal and announced it would oppose the tax-reform proposal that GOP lawmakers expect to unveil on Wednesday.” NAHB CEO Jerry Howard: “All the resources we were going to put into supporting are now going to go into opposing the plan…” POLITICO. 

CoStar, Xceligent fight gets (much) messier. “CoStar is, by far, the largest provider of commercial real estate data in the world… Xceligent [is] a self-styled plucky upstart… trying to provide its users with an option for CRE data other than CoStar” AZBEX’s Roland Murphy reports on the “ongoing feud between” the two, with “turns and twists” which he says (with much reservation) “are best described with terms like ‘bloodbath,’ ‘war,’ ‘body count,’ [and] ‘collateral damage.’ ”

Protect your email from latest hacking trend; wire fraud plaguing real estate industry says Lauren Reynolds, Rose Law Group litigator, focusing on cybersecurity. “Many real estate professionals have become keenly aware of targeted wire fraud scams that include email impersonation tactics. A growing avenue cyber criminals are using to get highly sensitive financial data is known as spear phishing, [which] is a highly targeted and researched personal attack that is difficult to detect.” This report in REALTORMag presents “three ways to fight these threats against your real estate company.” Lauren Reynolds: “While internal measures are important, real estate transactions involve many moving parts and it would also be prudent to ensure other parties to these transactions are well versed on the risks.” Read Lauren’s entire comment in Rose Law Group Reporter.

Highway 89A traffic will exceed 69 soon, say experts. “Many local drivers will tell you that Pioneer Parkway/Highway 89A/Glassford Hill is your best choice [‘for the quickest route between Prescott and Prescott Valley’]… Local experts say [that, like on Highway 69, long lines at interchanges to merge onto the highway are] not so far off — especially with the numerous housing/commercial developments that are in the works along the Highway 89A corridor.” The Daily Courier.

Anger, frustration mark town hall on water bills and meter readings.“There were shocking stories of water bills that drew gasps… There were anguished pleas on behalf of fixed-income seniors and poor families forced to choose between water and rent… What there weren’t were any explanations or solutions… as a standing-room-only crowd… confronted the Phoenix Water Services Department for three hours over huge spikes in usage levels and bills — many of which evaporated the following month.” Ahwatukee Foothills News.

Even with stopgap, water cutoff may leave New River high and dry. “About 1,000 to 1,500 homes in [New River and Desert Hills] rely on water hauled by trucks, which refill at the city of Phoenix’s fire hydrants. But Phoenix has said it will cut haulers off on December 31. Residents of these communities are desperately trying to find a solution… [Last week], they moved closer to… constructing a water-hauling station in nearby Anthem… But can they get it done by January 1?” Phoenix New Times.

As a supplement to the Dealmaker, we thought you might enjoy these articles!

Who controls the water? Arizona agencies slug it out. “The turf war pits the Arizona Department of Water Resources, which manages water issues statewide, against the agency operating the Central Arizona Project, the 336-mile-long canal that brings Colorado River water to Tucson and Phoenix. The agencies are jockeying over a series of issues, many pointing to who controls the state’s most precious resource — and the population growth and jobs it can support…” Arizona Daily Star. 

Heiler announces US Senate exploratory committee. GreatHearts founder and chairman, Jay Heiler, “had been exploring a run prior to Jeff Flake’s withdrawal from the race… [He] told reporters [recently] that Flake’s withdrawal had sped up his timetable.” Jay Heiler: “I’m very proud to announce this outstanding group of Arizonans who make up the beginning of a committee in support of my candidacy.” Head to Rose Law Group Reporter for Jay Heiler’s full announcement on the exploratory committee, (including names of members), plus get a link to this RELATED Item, “Former Rep. Matt Salmon reportedly considering run for Flake’s seat in 2018.”

‘The New York Times’ reports political ‘bedlam out here in Arizona.’ “Senator Jeff Flake’s decision to abandon his 2018 re-election campaign in Arizona has thrown open the Senate race there, exposing deep fissures not only on the Republican side where a nationalist insurgency is gunning for the party establishment but also among Democrats contending with a rising left.”

Arizona Republicans call for indictments of IRS officials. “The IRS, which under the Obama administration singled out groups with words such as ‘patriot’ and ‘Tea Party’ in their title, apologized for the use of ‘inappropriate criteria’ when determining tax-exempt status.” In a KEY QUOTE, Rep. Kelley calls this treatment by the IRS “the most vile form of political abuse,” adding that “apologies are best left for kindergarten and true accountability should be exacted upon this agency. I want to see indictments.” Arizona Daily Independent.

House tax writer gives ground on a state and local tax break. “[House Ways and Means Chairman Kevin] Brady says he’ll allow deduction for property taxes in [tax-overhaul plan]… But in a sign of the complex balancing act that Brady must perform to produce a… bill this week, the property-tax announcement came on the same day that the National Association of Home Builders pulled its support for the legislation.” Bloomberg. 

[COLUMN] Following the (bike) trail to Amazon’s second headquarters.“[Amazon] has said that 20 percent of its employees in Seattle don’t use motorized transport to get to work. Fifty-five percent walk, ride bikes or use public transportation.” Based on this and (and a lot of) other criteria, New York Timescolumnist James B. Stewart names his six “finalists” for landing Amazon HQ2.

Cundiff: Rose Law Group Reporter Hero of the Week. AZCentral: “[Chloe Cundiff] was the grand prize winner of the ‘Take a Lemonade Stand’ program, which donated 100 lemonade stands to Arizona kids this summer to teach them entrepreneurial skills and instill a spirit of community giving.” And what did the “9-year-old Scottsdale girl” learn? She learned how to raise “almost $10,000 in lemonade stand sales from the first day of summer to Oct. 1,” which she then “donated [all of it] to a non-profit for ovarian cancer research.” And that is why Chloe Cundiff is RLGR’s “Hero of the Week.”

Phoenix Industrial Market Surging with Activity Read more

Phoenix retail vacancy lowest in eight years; home furnishing store expansions signal housing market Read more

Optima Kierland condominium tower more than 75% sold Read more

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October 2017