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.
Tuesday, the Dow Jones industrial average rose 164.84 points, or 0.9 per cent, to 17,721.25. The Standard & Poor’s 500 index rose 19.73 points, or 1 per cent, to 2,061.72. The NASADQ composite index rose 38.69 points, or 0.8 per cent, to 4,872.09.
Benchmark U.S. crude oil climbed $1.81, or 4.5 per cent, at $42.17 a barrel in New York. Brent crude, the international standard, rose $1.86 to $44.69 a barrel in London. In other energy commodities, heating oil rose 6 cents to $1.276 a gallon, wholesale gasoline rose 3 cents to $1.534 a gallon and natural gas rose 9 cents to $2.004 per thousand cubic feet.
US budget deficit up sharply to $108 billion in March — The federal government’s budget deficit rose sharply in March, pushing the deficit for the first six months of this budget year above the same period a year ago. The Treasury Department says the deficit for March totalled $108.0 billion. That marks the biggest March deficit in four years and was more than double the imbalance in March 2015. The large jump from a year ago reflected calendar shifts, which had made the 2015 deficit look smaller because $36 billion in benefit payments were shifted into February. (AP)
Goldman Sachs to Pay $5 Billion in U.S. Justice Dept Mortgage Bond Pact “Goldman Sachs Group Inc (GS.N) has agreed to pay $5.06 billion to settle claims that it misled mortgage bond investors during the financial crisis, the U.S. Department of Justice said on Monday. The settlement, which Goldman disclosed in January, stems from the firm's conduct in its packaging, securitization, marketing and sale of residential mortgage-backed securities between 2007 and 2009, the Justice Department said. Investors suffered billions of dollars in losses from the securities bought during the period, the department said.” (Reuters)
Forget Flipping Houses—These Retail Investors Flip Mortgages “While titles and deeds establish property ownership, notes — the financial agreements between lenders and home buyers — set the terms by which a borrower will pay for the home. Financial institutions have long passed them back and forth as they rebalance their portfolios. But the trade in delinquent notes has exploded in the post-financial-crisis world. As government entities like Fannie Mae and Freddie Mac have struggled with the legacies of the housing bust, they’ve sold billions of dollars’ of delinquent notes to big institutional investors, who resell them in turn.” (MarketWatch)
Union Investment Expands Property Portfolio in Boston “Since its acquisition of The Godfrey Hotel in Boston, the company’s first ever purchase in the States, Union Investment has felt particularly at home in New England. The company has now acquired its second property in Boston for approximately $452 million. Developed by Skasnka and only completed at the end of last year, the office newly built at 101 Seaport Boulevard will join the portfolio of open-ended real estate fund Unilmmo: Europa.” (Property Magazine)
Walgreens—Rite-Aid Deal Depends on Selling Stores “Announced mergers do not always become completed mergers. Deals are often subject to regulatory approval, shareholder votes and changes in circumstances in the time between when a deal is announced and when it is expected to close. In this climate, who is to say that Action Alerts PLUS holding Walgreens Boots Alliance's $17.2 billion (including debt) bid to take over Rite Aid is immune from similar challenges? This year has already seen mergers challenged due to a mix of regulatory concerns.” (The Street)
Annaly Capital to Buy Hatteras Financial for $1.5 Billion “Annaly Capital Management Inc., the largest real estate investment trust that buys mortgage debt, agreed to purchase Hatteras Financial Corp. for $1.5 billion to expand and help diversify its holdings. The offer values Hatteras at $15.85 a share. Annaly will acquire the Winston-Salem, North Carolina-based mortgage REIT using a combination of cash and its own shares, the companies said in a statement on Monday.” (Bloomberg)
Port Authority Pays for Old Conde Nast Office to Sit Empty “More than a year after Condé Nast moved from Times Square to One World Trade Center, its new landlord, the Port Authority of New York and New Jersey, continues to shell out more than $3 million a month to cover the cost of the media giant's previous lease. By the end of 2015, the Port Authority had paid $47.6 million to cover Condé Nast's 840,000-square-foot lease at 4 Times Square, a 48-story office tower owned by the Durst Organization, according to information provided by the authority.” (Crain’s New York Business)
We Went Inside New York City’s Latest Luxury Skyscraper, Which Is One Giant Marble Block “Architect David Chipperfield's latest skyscraper won't feature a glass facade like normal skyscrapers. Instead, both the interior and exterior walls will be made of a marble mosaic. Chipperfield has received more than 100 awards, including the RIBA Stirling Prize. His new apartment building, called the Bryant, will open in spring 2017 and live on the last bit of real estate lining Bryant Park in New York City's midtown. Tech Insider recently toured one of the model units, which will sell from $2 to $16 million. Take a look inside.” (Business Insider)
Use FHA Duplex Financing to Become a Real Estate Investor “Real estate investors in most cases need at least 25% of the purchase price as a down payment and possibly 35%. But investors willing to occupy one unit of a duplex or similar small multifamily property can get Federal Housing Administration insured loans for as little as 3.5% down. FHA loans are also suitable for borrowers with lower credit scores, and people just getting started in real estate investing.” (The Street)
Allen Morris Plans Midtown Atlanta Apartments, Offices “The Allen Morris Co. has unveiled development plans for Star Metals, a $210 million mixed-use development in the West Midtown neighborhood of Atlanta. The project will consist of a multifamily building, along with an office building directly across the street, with ground-floor retail. The multifamily component will feature 409 rental units, and offer residents a rooftop club room and amenity deck, theater, Bocce ball court, yoga studio, poolside movies at night, community garden and greenhouse.” (Multi-Housing News)
U.S. Office National Vacancy Rate Upticks in Early 2016 “According to CBRE, vacancy for the U.S. office market inched up by 10 basis points (bps) during the first quarter of 2016 (Q1 2016), rising to 13.2%. Even with the increase, the national office vacancy rate remains at the lowest level since 2008. Despite the slight increase, vacancy continued to improve in the majority of U.S. markets, with rates falling in 33 markets, rising in 25, and remaining unchanged in five. Suburban vacancy remained at 14.7% while downtown vacancy increased by 10 bps, to 10.4%.” (World Property Journal)
Environmental groups sue over pollution from airliners — A coalition of environmental groups sued federal regulators Tuesday over long-sought pollution standards for airliners and cargo planes. The Center for Biological Diversity and Friends of the Earth filed a lawsuit in U.S. District Court in Washington. The groups allege the Environmental Protection Agency has unreasonably delayed for years using the Clean Air Act to enforce limits on heat-trapping greenhouse gas emissions from aircraft. Aviation accounts for about 5 per cent of global carbon emissions, with U.S.-owned airliners emitting about 30 per cent of all aircraft pollution worldwide. (AP)