Real eState
Real Estate Roots Propel New Multi-Unit A&W Franchisee – Franchise Times
Founded in 1919, A&W has more than 900 units in the U.S. and Asia.
Dunkin’, Chipotle, Panera, Wendy’s, McDonald’s. Those are just a few of the big-name brands Lee Fry has worked with over the past 30 years as a real estate developer in Chicago. That gave Fry and his wife, Karin, plenty of time to vet and consider many companies and models, since they had always thought about owning their own franchise.
The timing was finally right in December 2020, when they bought an A&W restaurant in North Aurora, Illinois, from a retiring owner.
“What we realized is that the relationship between the franchisee and their developer, which was our company, was very intimate,” said Fry, who was there every step of the way from site selection to meeting with the city. Nearly every brand with a drive-thru model requires a special use permit, which means a public hearing with the city where everything is discussed—parking, hours of operation, zoning, traffic. Fry was able to apply those learnings to A&W, where he says the drive-thru is a “lifeblood” for the company’s sales.
“Having experience and dealing with all the corporate players in the world gave us a real solid heads up when we started talking with A&W, because we saw things there that we felt really good about and people we felt really good about,” Fry said. “Whenever you do something like this, you want to be associated with success—like a brand that’s 100 years old and people you’ve had a chance to talk to and respect.”
The Frys worked with the former franchisee, Mike Covelli, who spent two months introducing them to suppliers and making sure the transition went smoothly. Covelli is also helping them convert a shuttered Burger King in Addison, Illinois—which they bought in August—to an A&W as part of the Frys’ plans to own five restaurants. This coincides with the franchisor’s expansion plan that focuses on the Midwest, where many of the brand’s early locations opened.
“With Mike, what’s fantastic is the fact that he is typical of the people that we have met at A&W. They’ve been extremely helpful and have been totally open with regards to any questions,” said Fry, who was drawn to the 100 percent franchised brand especially for that reason. Founded in 1919, A&W has more than 900 locations in the U.S. and Asia.
Karin and Lee Fry acquired an A&W in Illinois from a retiring owner in December 2020 and plan to open a total of five restaurants.
“The fact that we’re dealing with a company that’s really owned by people who operate their own units is a strong, strong point on our side, and that was probably one of the most important elements in us making the decision to go with A&W,” he said.
The Addison restaurant is under construction and was set to open in February, but supply chain issues and equipment delays pushed them back 30 to 45 days. Nonetheless, Fry is excited about that particular location, he said, because it’s in a busy shopping center with a Walmart Supercenter and a Sam’s Club. Plus, the entrance to the restaurant is at a stop sign to those stores, which means people will be forced to stop and catch a waft of their salty fries before driving past. “Those are the types of locations we really like,” Fry added.
Nearly all of Covelli’s employees stayed at the North Aurora restaurant after the deal, so Fry is training some of them to move into upper management positions at the new Addison store after it opens.
“For lack of a more intelligent way to say it, I think it’s in his blood,” Fry said, referring to Covelli. “He had good success with the program, and not only helped us but enjoyed doing it. Any time you spend 20 years running a deal, there’s a certain amount of love that doesn’t go away when you sell it.”
The Frys are in negotiations for their third A&W, which they plan to build from the ground up and hope to be ready by next fall. In the meantime, Fry said they’re looking for other existing buildings in the Chicago area they could convert.
“Being in this business for a number of years, we have the advantage of seeing lots of things before they get out to the public, so where we see opportunities that make sense for us and A&W, we’re going to go for it,” Fry said.
Real eState
Real Estate Stocks Fall As Mortgage Rates Rise To 4-Month Highs: 'Inflation Is Proving Tougher To Bring D – Benzinga
Real estate stocks slid at Wednesday’s market open, weighed down by the latest disappointing data on housing starts and a spike in mortgage rates, darkening the outlook for the sector.
By 9:00 a.m. EST, the Real Estate Select Sector SPDR Fund XLRE had dropped by 0.3%. This marked its fourth consecutive day of losses and set a course for its lowest close since the end of November 2023.
The fund has also slipped below its 200-day moving average, a critical long-term benchmark, signaling that investor sentiment has turned negative.
The average interest rate for 30-year fixed-rate mortgages with loan balances up to $766,550 climbed by 12 basis points to 7.13% for the week ending Apr. 12, 2024, according to the latest figures from the Mortgage Bankers Association. This rate is the highest recorded since early December.
On Wednesday, the yield on a 30-year Treasury bond, a key benchmark for long-term mortgage rates, traded at 4.75%, at the highest since mid-November 2023, as Fed Chair Powell admitted that there has been a lack of progress in the disinflation trend.
Chart: Real Estate Stocks Fall Below Key Long-Term Moving Average As Inflation Bites Again
Weaknesses In Multifamily Segment Continue
Joel Kan, MBA’s Vice President and Deputy Chief Economist, explained the rise in rates, stating, “Rates increased for the second consecutive week, driven by incoming data indicating that the economy remains strong and inflation is proving tougher to bring down.”
Despite the uptick in mortgage rates, there was a 3.3% week-over-week increase in the Market Composite Index, which measures mortgage loan application volume.
Kan further noted, “Application activity picked up, possibly as some borrowers decided to act in case rates continue to rise. Purchase applications were the primary driver of this increase, although they are still about 10% lower than last year’s levels. There was a slight uptick in refinance applications, mainly due to a 3% rise in conventional applications.”
Chart: US 30-Year Mortgage Rates Rose To The Highest Level Since Late November
The real estate market’s challenges are linked to affordability and a shrinking availability as the supply of new homes falls.
Andrew Foran, an economist at Toronto Dominion Securities, commented on the trend in home building, “Homebuilding activity moderated in March as weakness in the multifamily segment persisted and the single-family segment gave back most of its considerable gain from the prior month.”
Data revealed a 14.7% month-over-month decline in housing starts in March, with the figures dropping to 1.32 million annualized units, significantly below the anticipated 1.49 million.
Both the single-family and multifamily sectors experienced declines, with single-family starts down by 12.4% (or 145,000 units) and multifamily starts plummeting by 21.7% (or 83,000 units). This retreat in multifamily starts marked the lowest level since April 2020.
Additionally, residential permits decreased more than expected in March, falling by 4.3% month-over-month to 1.46 million annualized units. This included a 5.7% drop in single-family permits—the first decline in fifteen months—and a 1.2% reduction in multifamily permits.
Rising & Falling
The weakest performers among real estate stocks with a market cap of at least $1 billion on Wednesday were:
| Name | 1-day %chg |
|---|---|
| Prologis, Inc. PLD | -6.55% |
| First Industrial Realty Trust, Inc. FR | -3.33% |
| STAG Industrial, Inc. STAG | -2.89% |
| EastGroup Properties, Inc. EGP | -2.89% |
| Rexford Industrial Realty, Inc. REXR | -2.35% |
Those showing the highest gains were:
| Name | 1-day %chg |
|---|---|
| SL Green Realty Corp. SLG | 3.18% |
| Opendoor Technologies Inc. OPEN | 2.55% |
| Medical Properties Trust, Inc. MPW | 2.49% |
| eXp World Holdings, Inc. EXPI | 2.32% |
| Vornado Realty Trust VNO | 2.25% |
Now Read: Best REITs to Buy in April
Image: Midjourney
Market News and Data brought to you by Benzinga APIs
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
A Toronto real estate agent posted a picture of a $799,000 house that appears to be burnt down on TikTok saying it’s perfect for first-time homebuyers on a budget.
The agent, Ruthie Miller, was half joking.
Miller’s real estate career has run parallel to being a stand-up comedian. She found the run-down house as she was trying to look for a place to invest in herself.
Though she wasn’t the seller of the house, she thought posting the entertaining video on TikTok would attract more buyers to it.
The Yorkdale-Glen neighbourhood home is placed on a 25 x 130 ft. lot and the listing includes pictures of burnt down areas in the home.
Miller posted the video a week ago, but now the price is currently over $1 million on Realtor.ca.
“This house did have a fire and probably needs a lot of work. If you’re anything like me and you think to yourself, ‘Oh, I can fix him. All he needs is a little bit of TLC. He’s just had some bad relationships in the past,’ then you might be into this one,” Miller said in the video.
Some viewers were confused and wondered if the video was a parody.
“LOL genuinely can’t tell if this is a joke or not … a budget? Your gonna need another 200k to fix it it’s not even livable,” one person commented.
When asked if she thought her comedic approach to real estate could mislead people, Miller said, “I don’t know.”
Miller told Now Toronto that she was joking about some parts, especially about the house being suitable for a first-time homebuyer because of the structural issues.
Miller believes she’s bringing attention to real estate regardless of the method and people are going to look at the listing and request more information if they want to.
“I’m a comedian also, so why not mesh the two? It’s a clever way of doing it,” Miller challenged.
Miller believes Toronto’s real estate market always has room for humour.
“I personally like it. I hope I’m not breaking any rules with my professionalism. I like blending comedy with real estate. It’s easy to make fun of realtors because they’re usually advertising multi-million dollar properties when most of the city can’t afford rent.”
Real eState
Former HGTV star from Los Gatos sentenced in $10M real estate fraud case – CBS San Francisco
LOS GATOS – A Los Gatos man who starred in a real estate reality show was sentenced to jail and ordered to pay back nearly $10 million to his victims after being convicted of real estate fraud, prosecutors said Tuesday.
According to Santa Clara County District Attorney Jeff Rosen’s office, 58-year-old Charles “Todd” Hill received a four-year sentence. Hill starred in the HGTV show “Flip It to Win It“, which featured teams buying dilapidated homes and fixing them, before selling them for a profit.
The show aired in 2014.
Prosecutors said Hill was convicted in Sep. 2023 after admitting to grand theft with aggravated white-collar enhancements for committing real estate and financial fraud against 11 victims. Hill was indicted in 2019 following an investigation by the DA’s office.
“Some see the huge amount of money in Silicon Valley real estate as a business opportunity,” Rosen said in a statement. “Others, unfortunately, see it as a criminal opportunity – and we will hold those people strictly accountable.”
According to the DA’s office, Hill engaged in “multiple fraud schemes”, with some scams dating back before the HGTV show.
Prosecutors said in one instance, he diverted construction money for his personal use. In another, Hill created a Ponzi scheme by taking money intended to buy homes from an investor and spending it on a lavish lifestyle instead. He hid the theft by creating false balance sheets and used fraudulent information to obtain loans, according to prosecutors.
In a third case, prosecutors said an investor who provided $250,000 to remodel a home toured the property, only finding it to be a “burnt down shell” with no work performed.
Hill had used the money on a rented apartment in San Francisco along with spending on hotels, vacations and luxury cars, prosecutors said.
In addition to jail time, Hill was ordered to pay back $9,402,678.43 in restitution and serve 10 years probation. Hill has been remanded into custody, the DA’s office announced.
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