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 of the day will be.
Wednesday, the Dow Jones industrial average fell 99.64 points, or 0.6%, to 15,914.74. The Standard & Poor’s 500 index lost 0.35 points, or 0.02%, to 1,851.86. The NASDAQ composite index added 14.83 points, or 0.4%, to 4,283.59.
Benchmark U.S. crude fell 49 cents, or 1.8%, to close at $27.45 a barrel in New York. Brent crude, a benchmark for international oils, rose 52 cents, or 1.7%, to close at $30.84 a barrel in London. In other energy trading in New York, wholesale gasoline rose 4 cents, or 4.9%, to 94 cents a gallon and home heating oil was flat at 97 cents a gallon. Natural gas fell 5 cents, or 2.5%, to $2.05 per 1,000 cubic feet.
CalPERS Makes Huge New York Real Estate Deal “CalPERS has completed one of the biggest real estate investments in its history, purchasing a New York office tower for $1.9 billion. The big pension fund confirmed Tuesday it has bought the 50-story Manhattan office building, saying the deal is emblematic of its focus in recent years on purchasing real estate properties that are already generating revenues. The deal closed Jan. 27, said spokesman John Cline of AXA Financial, the financial services conglomerate that sold the building.” (The Sacramento Bee)
Sears Warns on Sales, to Speed Up Store Closures “Based on the disappointing performance during the quarter, Sears said, it will speed up the shuttering of unprofitable stores and look to further reduce costs. The company has recently flagged 50 stores for closure in the coming months and suggested Tuesday that it may raise that number. It also said it is targeting at least $300 million of other asset sales during the first half of its 2016 business year–including a possible sale or partial divestiture of its Sears Auto Center business.” (MarketWatch)
U.S. Government Must Make a Decision on Freddie, Fannie “It’s time for the Federal government to make a decision about Fannie and Freddie — to let them die a gradual death or to help them resurrect. The government’s disingenuous measures that have kept the lending institutions afloat have been unlawful and dangerous for taxpayers and for the organizations’ investors. Congress should insist that Fannie and Freddie be wound down through receivership or be allowed to recapitalize and resume operations.” (The Street)
Major Affordable Housing Lender is Back in Business after Being on the Brink of Financial Collapse “The Community Preservation Corp. celebrated its turnaround by unveiling a new logo and website at a reception last Wednesday. The organization was created in 1974 and had become a major lender to developers of small affordable-housing projects until the years leading up to the real estate crash. Over time, the organization began lending to riskier market-rate projects. And in early 2009, CPC found itself on the brink of disaster with $900 million in troubled loans on its books.” (Crain’s New York Business)
Staples Shows How Bad it Want to Get Office Depot Deal Done “Staples secured approval of its acquisition of Office Depot from European regulators after agreeing to numerous concessions. Now similar actions may be required if the company is to win over a stubborn U.S. Federal Trade Commission. Staples said it received approval from the European Union to acquire Office Depot, highlighted a range of actions it took to alleviate the regulator’s competitive concerns and used the action to take a jab at the U.S. Federal Trade Commission (FTC).” (Chain Store Age)
Office REITs Had an Underwhelming 2015 “While residential-focused real estate investment trusts like AvalonBay Communities and Equity Residential saw double-digit returns mirrored by positive stock price performance last year, their office counterparts such as SL Green Realty, Vornado Realty Trust and Boston Properties had difficulty coming up with the goods. In 2015, SL Green and Vornado delivered total shareholder returns of -3.0 percent and -3.9 percent, respectively, according to data provided to The Real Deal by investment banking firm Sandler O’Neill + Partners.” (The Real Deal)
The 10 Cities with the Highest and Lowest Unemployment “The Bureau of Labor Statistics (BLS) releases seasonally adjusted civilian labor force and unemployment data for 387 cities with a population of 25,000 or greater on a monthly basis. The numbers here reflect preliminary December 2015 data. As of December, the percentage of the U.S. labor force that did not have a job, had actively sought work in the four week period prior, and was currently available for work–and thus qualified for ‘unemployed’ status–was 4.8%.” (Forbes)
What SL Green’s One Vanderbilt Will Mean to Midtown’s Retail and Office Market “Though the shovels haven’t yet begun digging at SL Green’s 1.7M SF mega-tower, One Vanderbilt, it’s not too soon to note that the Kohn Pederson Fox-designed building is going to forever alter Midtown’s commercial real estate landscape. In fact, a number of sweeping changes are already afoot for some of the area’s aging office stock, which is undergoing massive upgrades, including distinctive amenities, retail and even new property names.” (Bisnow)
What Fairway Needs to do to Stay in Business “Fairway Group Holding , the parent of Fairway supermarkets, said it needs to raise more capital to stay in business over the long term, after losing money in each quarter since it went public in 2013. In a Friday regulatory filing, Fairway said: ‘we need to raise additional capital to de-lever our balance sheet to allow us to continue as a going concern over the long term.’ Fairway cited its debt load, recent underperformance and ‘challenging market conditions’ for its concern.” (Fortune)
A Look Inside Tishman Speyer’s $3B Spiral Skyscraper “Mega-developer Tishman Speyer has unveiled plans to build a $3.8B-plus luxury office tower called the Spiral in New York City’s Hudson Yards district. As we reported yesterday, the 60-story office tower is the brainchild of Danish architect Bjarke Ingels, who envisioned the building as a symbol of the current ‘workspace revolution,’ with every detail intended to emphasize creativity, connectivity and collaboration.” (Bisnow)
Report: Harmful gas levels in Lumber Liquidators flooring — A federal investigation has found that Lumber Liquidators sold Chinese-made flooring that emits hazardous levels of formaldehyde. The laminate flooring was sold by the national retailer until last May, when the company announced it was halting sales. A long-awaited federal safety review found the flooring gave off enough formaldehyde gas to irritate the eyes, nose and throat of many people. There also was enough gas from the product to trigger breathing problems in people with certain health conditions. The formaldehyde also increased cancer risks by a small amount. U.S. officials released the analysis Wednesday.
Phoenix, AZ – NAIOP Arizona ran its victory streak to 11 consecutive years as it won the Chapter Merit Award in the Education category Monday night at the industry organization’s annual meeting in Washington, D.C.
