Real Estate Daily News Buzz is designed to give news snippets to readers that our (yet to be award winning) editors thought you could use to start your day. They come from various business perspectives, real estate, government, the Fed, local news, and the stock markets to save you time. Here you will find the headlines and what the news buzz for the day will be.
On Wednesday, the Dow Jones Industrial average rose 59.54 points, or 0.4%, to 16,979.13. The Standard & Poor’s 500 index rose 4.91 points, or 0.3%, to close at 1,986.51. The NASDAQ composite fell 1.03 points, or 0.02%, to 4,526.48.
Benchmark U.S. oil gained $1.59, or 1.7 per cent, to $96.07 a barrel. Brent crude, a benchmark for international oils imported by many U.S. refineries, rose 72 cents to $102.28 a barrel in London. Wholesale gasoline added 1.72 cents to $2.713 a gallon. Heating oil rose less than a penny to $2.826 a gallon. Natural gas fell 5.4 cents to $3.823 per 1,000 cubic feet.
FAMILY DOLLAR STORE CLOSURES IN THE WINGS
New York -- As analysts begin to speculate about the acquisition scenarios for Family Dollar – whether by Dollar Tree or Dollar General – one thing is clear: some store closures will occur. According to a report by Wall Street Journal Online, a Dollar General takeover would close more stores than if Dollar Tree wins the bid. Dollar General said it is prepared to divest up to 700 of the combined company’s approximate 19,600 stores to satisfy antitrust regulators. Nearly two-thirds of Dollar General’s 11,338 stores are within three miles of a Family Dollar store, according to the CoStar Group, which could result in more closures than the anticipated 700, a senior strategist at CoStar told WSJ. The report went on to say that about a third of Dollar General stores are less than a mile from a Family Dollar store, but only about a quarter of Dollar Tree’s 4,891 stores are within a mile from a Family Dollar Store.
YELLEN TO GIVE HER OUTLOOK AS FED HONEYMOON FADES
WASHINGTON (AP) — Janet Yellen has won credit for guiding the Federal Reserve’s first six months of transition from the Ben Bernanke era. Bernanke’s Fed had steered the economy through a deep crisis by slashing interest rates and restoring confidence in banks. Yellen has so far carried on his approach with barely a hiccup. She may one day recall her first six months as a too-brief honeymoon. The perilous question that now awaits Yellen’s Fed has put investors on nervous alert: Can it manage to raise rates from record lows without weakening the U.S. economy or spooking markets? Or, conversely, will it wait too long to raise rates, causing the economy to overheat and inflation to surge?
CASSIDY TURLEY MAY BE GETTING NEW OWNER
NEW YORK CITY— Numerous sources are reporting—that TPG Capital is in negotiations to buy Cassidy Turley. No financial information has been disclosed.Rumors about Cassidy being up for sale have circulated for some time. A merger between the two firms would give both entities global reach. In a partnership with a group of institutional investors, TPG acquired DTZ, a property services firm and brokerage focused on Europe and Asia, for $1.2 billion earlier this summer. When TPG Capital announced the deal to buy DTZ, it disclosed that it was hiring Brett White, the former chief executive of CBRE, to oversee the firm, according to Crain's New York Business. The acquisition of real estate companies to build a massive firm with a variety of service lines and geographic penetration, in order to land assignments for global companied, was White’s modus operandi for building CBRE in the early 2000s. However, some other reports note that TPG’s financial health may be too weak for acquisitions. The firm is reportedly wooing investors by offering discounts on management fees as high as 25% off.
GLOBAL CRUISE LINES SET SAIL FOR CHINA
HONG KONG (AP) — Royal Caribbean’s newest ship has attractions not usually seen on cruise liners, including bumper cars, a skydiving simulator and a glass observation capsule on a mechanical arm that lifts its passengers high into the air. What’s also a surprise is the vessel’s intended home port: Shanghai. After floating out of a German shipyard last week, the $935 million Quantum of the Seas will spend the winter running between New York and the Caribbean before moving to its new base next summer in mainland China’s financial center. It’s a gutsy move for the world’s second biggest cruise company. Cruise operators have traditionally sent older vessels to developing countries while saving their most advanced ships for U.S. and European customers. But surging growth in China means it’s a market operators can no longer ignore.
Auction.com: CRE Deal Volume, Pricing Shift Upward
IRVINE, CA—Auction.com reports a healthy outlook for commercial real estate markets, with all major sectors demonstrating year-over-year growth and widespread strength. According to the firm’s Q2 CRE Capital Markets Monitor Report, transaction metrics are trending in a positive direction, with deal volume and pricing shifting upward as cap rates and risk premiums decline. The report shows that CRE deal volume is up from recessionary lows and led by historically dominant office sector. The total combined commercial volume in the office, retail, apartment, industrial and hotel sectors reached $81.6 billion in the second quarter, up nearly 14% from a year ago. Office and apartment transactions combined to account for more than 55% of the five-sector total, similar to one year ago, though the apartment sector’s portion of that volume has shrunk. Meanwhile, retail transactions made up 16% of the total.
BofA REACHES $17B SETTLEMENT WITH U.S.
WASHINGTON (AP) — Bank of America has reached a record $17 billion settlement to resolve an investigation into its role in the sale of mortgage-backed securities before the 2008 financial crisis, officials directly familiar with the matter said Wednesday. One of the officials, who spoke with The Associated Press on condition of anonymity because the announcement isn’t scheduled until Thursday at the earliest, said the bank will pay $10 billion in cash and provide consumer relief valued at $7 billion. The deal is the largest settlement arising from the economic meltdown in which millions of Americans lost their homes to foreclosure. It follows agreements in the last year with Citigroup for $7 billion and with JPMorgan Chase & Co. for $13 billion.
HOME DEPOT Q2 PROFIT SURGES 14%
Atlanta -- Home Depot reported its fiscal second-quarter net income rose 14% amid a rebound in its spring selling season and strong online sales. The retailer also raised its annual profit guidance. "In the second quarter, our spring seasonal business rebounded, and we saw strong performance in the core of the store and across all of our geographies," stated Frank Blake, chairman and CEO. For the three months ended Aug. 3, Home Depot Inc. earned a better-than-expected $2.1 billion, compared to $1.8 billion in the year-ago period. Revenue rose 5.7% to $23.8 billion, from $22.5 billion. Same-store sales rose 5.8%; same-store sales in the United States were up 6.4%. Home Depot's online sales increased 38% in the second quarter, and were "well ahead of expectations," Blake said on the chain’s earnings all.
INA ROAD TO BE CLOSED THIS WEEKEND
ADOT is reporting that Ina Road will be closed, east of Interstate 10, at the railroad track on Friday, Aug. 22, through Sunday, Aug. 24, from 9 p.m. to 5 a.m. nightly for utility and survey work. The road will be open during the day. Drivers will be detoured to Orange Grove Road or Cortaro Road to access I-10. The east- and westbound I-10 entrance and exit ramps at Ina Road will be open. Ina Road, west of I-10, will be open. Drivers should expect delays.
TARGET CUTS OUTLOOK AS BREACH FALLOUT LINGERS
NEW YORK (AP) — Target Corp. slashed its annual profit outlook for the second time in three months as the retailer reels from a massive customer-data breach, a botched Canadian expansion and sluggish U.S. sales. The nation’s third-largest retailer also said Wednesday that its second-quarter earnings dropped 61.7 per cent. Excluding expenses related to the data breach, earnings per share came in a penny short of Target’s reduced estimate, issued earlier this month. The latest results highlight the challenges that new CEO Brian Cornell, a former PepsiCo executive who officially started at Target Aug. 12, faces on all fronts.
APPLE’S STOCK BOUNCES BACK TO HIT A NEW HIGH
SAN FRANCISCO (AP) — Apple’s stock touched a new high Wednesday, reflecting investors’ renewed faith in CEO Tim Cook’s ability to outwit the competition and expand the technological hit factory built by the late Steve Jobs. The milestone represents a dramatic turnaround in sentiment since Apple’s shares reached its previous split-adjusted peak of $100.72 in September 2012. After hitting $101.09 Wednesday afternoon, shares closed up 4 cents at $100.57. That gave Apple a market value of $602 billion — by far more than any other publicly held company.
MACY’S TO PAY $650,000 IN SHOPPER-PROFILING PROBE
ALBANY, N.Y. (AP) — Macy’s has agreed to pay $650,000 to settle allegations of racial profiling at its flagship store in Manhattan’s Herald Square. Under the agreement signed Tuesday with New York’s attorney general, the retailer will adopt new policies on police access to its security camera monitors and against profiling, further train employees, investigate customer complaints, keep better records of detentions and report for three years on its compliance. Attorney General Eric Schneiderman said the settlement should help ensure customers are treated equally regardless of race or ethnicity at the retail giant’s 42 department stores statewide.
WARREN BUFFET’S FIRM TO PAY $896,000 PENALTY
OMAHA, Nebraska (AP) — Warren Buffett’s company has agreed to an $896,000 penalty for failing to tell regulators about a December 2013 investment in wallboard maker USG Corp. beforehand. The Federal Trade Commission said Wednesday that Berkshire Hathaway Inc. should have notified the U.S. Justice Department before it converted $325 million of senior USG notes it held into 21.4 million shares of the company. Because Berkshire was already a significant USG shareholder, antitrust laws required it to notify regulators because of the size of the deal. At the end of June, Berkshire held just over 39 million USG shares.
BRINE FIRM SUES OVER BIBLICAL FRACKING BILLBOARD
COLUMBUS, Ohio (AP) — An Ohio man who uses a biblical reference and a statement against “poisoned waters” on billboards opposing wells for disposal of gas-drilling wastewater is fighting a legal threat from the Texas well owner on free-speech grounds. Austin, Texas-based Buckeye Brine alleges in a July lawsuit that the billboards paid for by Michael Boals, of Coshocton in eastern Ohio, contain false and defamatory attacks against its two wells, which dispose of contaminated wastewater from oil and gas drilling. The complaint by the company and Rodney Adams, who owns the land and operates the well site, contends the wells are safe, legal and meet all state safety standards. The parties object to statements on two billboards along U.S. Route 36, including one that “DEATH may come.”
COWBOYS WORTH MORE THAN $3 BILLION, TOPS NFL
NEW YORK (AP) — The Dallas Cowboys are the first U.S. sports franchise to top $3 billion in value. For the eighth straight year, the Cowboys are worth the most of all 32 NFL franchises, according to Forbes. They’re valued at $3.2 billion; only Real Madrid at $3.4 billion is worth more among global franchises. Dallas posted the NFL’s highest revenue, $560 million, and operating income, $246 million. That was far ahead of second-place New England, worth $2.6 billion and with $428 million in revenues, $147 million in operating income. But the Patriots had the biggest increase since last year, up 44% in value. Dallas was up 39%.
STARBUCKS TESTING MOBILE TRUCKS AT ASU
Classes don’t begin until later this week at Arizona State University, but there’s already a buzz on campus about a Starbucks mobile truck. The new truck, a pilot mobile service coming to three college campuses this fall, offers a menu of drinks and food nearly identical to what customers would find in their neighborhood Starbucks stores. The Starbucks mobile truck can move to various locations on campus throughout the day, making it convenient for students and faculty to grab a snack or beverage. While hours will vary on each campus, trucks are able to adjust business hours to suit the needs of their customers, in some cases staying open later than a dining hall. The mobile truck, which complements Starbucks cafes currently located across campus, is a licensed store operated through Aramark and is a natural extension of the long-standing partnership between the two companies. In addition to ASU, a truck will begin service on the James Madison University campus in Virginia on August 25 and Coastal Carolina University in South Carolina on September 18.
GO DADDY TO BUY MAD MIMI
SCOTTSDALE – GoDaddy, the world’s largest technology provider dedicated to small businesses, announced it has acquired Mad Mimi, which helps small businesses connect with customers through simple, beautiful and effective email marketing. Mad Mimi’s easy-to-use applications, empathetic and knowledgeable customer care, and robust technology platform made the company a perfect fit for GoDaddy and its expanded offerings to small businesses. Financial details of the transaction were not disclosed. While email marketing is an effective way to engage with customers, less than one-third of small businesses are using email marketing applications to communicate with and engage customers and prospects. Mad Mimi’s stylish and simple email marketing product helps users easily create, send, share and track elegant and customized email newsletters. With the combination of GoDaddy and Mad Mimi, GoDaddy customers can easily collect customer information and add fresh content on their website, improving customer engagement and search engine optimization. The Mad Mimi service will continue to be available as a standalone application. GoDaddy and Mad Mimi intend to build a next generation product utilizing the Mad Mimi platform, with availability scheduled for 2015.