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. The U.S. stock market finished slightly lower on Wednesday, adding to its losses so far this year. A survey on hiring did little to ease uncertainty about the health of the economy.
Tuesday, the Dow Jones Industrial average rose 74.95 points, or 0.5%, to close at 16,532.61. The Standard & Poor’s 500 index gained 13.18 points, or 0.7%, to close at 1,885.52. The NASDAQ composite rose 69.05 points, or 1.6%, to 4,268.04. Benchmark U.S. crude for May delivery was down $1.61 to $99.97 a barrel in New York.
ESSEX PROPERTY TRUST AND BREE COMPLETE MERGER
SAN FRANCISCO—Essex Property Trust Inc. and BRE Properties Inc. have completed the merger of the two companies, forming a combined company with equity market capitalization of approximately $11.1 billion and a total market capitalization of approximately $16.2 billion. Transaction details under the terms of the agreement, each share of BRE common stock has been converted into 0.2971 newly issued shares of Essex common stock plus $7.18 in cash, without interest. The cash consideration was adjusted as a result of the authorization and declaration of a special distribution to the stockholders of BRE of $5.15 per share of BRE common stock. Former Essex stockholders hold approximately 63% of the combined company's common stock, and former BRE stockholders hold approximately 37% of the combined company's common stock. On March 31, 2014, BRE formed three new joint ventures with two separate third-party institutional joint venture partners and contributed 17 BRE properties with an aggregate estimated value of approximately $888 million to the joint ventures. As a result of the contribution of the properties to the joint ventures and the merger, Essex Portfolio LP and its subsidiaries now hold a 50% interest in each of the joint ventures. Additionally, BRE received proceeds from approximately $475 million in mortgage financings of the properties contributed to the joint ventures. As a result of the closing of these joint ventures, BRE authorized the payment of the special distribution described above. The special distribution will be paid on or about April 9, 2014 to BRE stockholders of record as of the close of business on March 31, 2014.
CONGRESS DEMANDS ANSWERS ON DELAY IN GM RECALL
WASHINGTON (AP) — The piece needed to fix a defective ignition switch linked to 13 deaths would have cost just 57 cents, according to documents submitted by General Motors to lawmakers investigating why the company took 10 years to recall cars with the flaw. Members of a House subcommittee demanded answers Tuesday from new GM CEO Mary Barra about why the automaker used the switch in some of its cars even though it knew the part didn’t meet GM’s own specifications. GM has said that company engineers proposed solutions to the switch problem years ago, but the company concluded that none represented “an acceptable business case.” The automaker has recalled 2.6 million cars since February over the faulty switch.
US AUTO SALES ACCELERATED AS MARCH MOVED ALONG
DETROIT (AP) — U.S. auto sales went out like a lion in March. Automakers said Tuesday that new car and truck sales picked up speed halfway through the month, culminating in a strong final weekend. March sales helped rescue what was otherwise a disappointing first quarter. Analysts had predicted flat growth for the first three months of this year after harsh weather in January and February hurt sales. The surprisingly strong March results could help the first quarter pull off a sales increase, but it’s not likely to top the 6-per cent increase that the industry saw during the same period in 2013.
SEN. PAUL: CATERPILLAR DESERVES AWARD FOR TAX STRATEGY
WASHINGTON (AP) — Caterpillar Inc. executives defended a tax strategy Tuesday that has saved the manufacturing giant billions in U.S. taxes. They got support from Republican senators, including one who said the company deserves an award. Caterpillar has avoided paying $2.4 billion in U.S. taxes since 2000 by shifting profits to a wholly-controlled affiliate in Switzerland, according to a report released by Sen. Carl Levin, D-Mich. Levin chairs the Senate investigations subcommittee. Levin grilled Caterpillar executives and their accountants at a hearing Tuesday on the company’s tax strategy. Caterpillar is the world’s leading manufacturer of construction and mining equipment.
CRAFT BEER REACHES FOR THE SKIES ON US AIRLINES
RICHMOND, Va. (AP) — Attention passengers, craft beer has reached 35,000 feet. As the airline industry works to improve its food and beverage options, a new trend has emerged — airlines adding craft beers to their in-flight offerings. The assumption is that as more drinkers switch from mass market beers to specialty brews, they’ll be happier if they don’t have to give up the good stuff when they’re in the air. It’s another sign that airlines are getting better at responding to changing consumer tastes. U.S. craft beer retail sales reached $14.3 billion in 2013, an increase of 20 per cent from a year earlier, according to the Brewers Association, the trade group for the majority of U.S. brewing companies.
EUROZONE UNEMPLOYMENT STUCK NEAR RECORD HIGH
BRUSSELS (AP) — The 18-country eurozone may have emerged from recession last year, but that has done little good to the jobs market, with unemployment stuck near a record high since then. A new report on Tuesday showed that while the number of jobless in the currency union dipped in February, the unemployment rate remained at 11.9 per cent — where it has been since October after peaking at 12.1 per cent earlier in the year. The figures, published by the Eurostat statistical agency, illustrate how long it will take for the continent’s hardest-hit countries to return to economic health after years of financial upheaval.
US MANUFACTURING EXPANDED MORE QUICKLY IN MARCH
WASHINGTON (AP) — U.S. manufacturing grew at a slightly faster pace in March compared with February as factory output recovered from disruptions caused by severe winter weather. Manufacturers also received more orders, suggesting that production could strengthen a bit in the months ahead. The Institute for Supply Management, a group of purchasing managers, said Tuesday that its manufacturing index increased to 53.7 from 53.2 in February. Any reading above 50 indicates expansion. The increase suggests that manufacturing is growing at a steady but modest pace after cold winter weather caused a sharp slowdown in the first two months of the year. Even so, factories are hiring at the slowest pace in nine months, the survey found.
US HOME PRICES ROSE IN FEB. DESPITE WEAKER SALES
WASHINGTON (AP) — U.S. home prices rose in February from a year earlier at a solid pace, suggesting that a tight supply of homes for sale is boosting prices despite slowing sales. Real estate data provider CoreLogic says prices for existing homes rose 12.2% in February from a year ago. That was up slightly from January’s year-over-year pace of 12%. Snowstorms, rising prices and higher mortgage rates combined to reduce home sales in February to their lowest level in 19 months. The number of available homes remains below the level typical of a healthy market.
FBI INVESTIGATES HIGH-SPEED STOCK TRADERS
NEW YORK (AP) — The FBI is looking into the practices of high-frequency stock trading firms, adding to the scrutiny of the practice. Brokerage firms use high-frequency trading to get a jump on their competitors. Powerful computers analyze market information and then execute buy and sell orders for stocks within a fraction of a second. One way that high-frequency traders have gained an edge is by receiving market-moving information, such as corporate earnings releases, before other traders and investors. They then exploit that advantage by placing buy or sell orders before other investors. That practice has come under increasing scrutiny in recent months though. New York Attorney General Eric Schneiderman says high-frequency trading gives firms an unfair advantage and erodes public confidence in the stock market.
INDUSTRY GROUP SEEKS CONTINUOUS FLIGHT TRACKING
KUALA LUMPUR, Malaysia (AP) — An aviation industry group is creating a task force to make recommendations this year for continuously tracking commercial airliners because “we cannot let another aircraft simply vanish” like Malaysia Airlines Flight 370. The 25-day-old search has turned up no sign of the Boeing 777, which vanished March 8 with 239 people aboard bound for Beijing from Kuala Lumpur. A multinational team of aircraft and ships are searching the southern Indian Ocean for the plane, which disappeared from radar and veered off-course for reasons that are still unexplained. The aviation mystery has highlighted the need for improvements in tracking aircraft and security, according to the International Air Transport Association, a trade association for the world’s airlines meeting in Kuala Lumpur.
STARBUCKS BRINGING BACK CAKE SLICES
NEW YORK (AP) — Starbucks has found that Americans really like their sliced cake. The Seattle-based coffee company says it will start bringing back its cake slices in response to customer feedback. It had been eliminating the slices as part of a staggered rollout of its pricier new baked goods. In their place, Starbucks offered what looked like miniature loaves. But the company realized that people preferred the sliced cake and says they should return in the coming weeks. The new baked goods have so far been rolled out to roughly half of the company’s 11,500 U.S. locations. That means about half of stores never got rid of the cake slices.
YOUNG ZEBRA DIES IN TRAGIC ACCIDENT AT REID PARK ZOO
TUCSON - The young Grevy's zebra, named Ajani, was born at Reid Park Zoo 19-months ago and died yesterday morning during the preparation for routine, required vaccinations. Shortly after being separated from the rest of the herd, Ajani was suddenly startled by another zebra in an adjacent area and ran into the normal enclosure barrier, fracturing his neck. Zoo officials say the incident occurred in an interior area of the exhibit, not visible to the public. Zookeepers witnessed the accident and the veterinary team immediately performed CPR in attempts to revive the zebra. While a full post-mortem exam will be completed, an X-ray on site revealed the physical trauma to the vertebrae was not survivable.
STOLEN JFK BUST RECOVERED
TUCSON - After sitting idle for almost 50 years at El Presidio Park in Downtown Tucson, the bronze bust of the head of John F. Kennedy was ripped from its concrete base last December and hadn't been seen until this past Saturday. A couple walking in a westside wash says they found the bust in a pot turned upside down and took it to a recycling center to turn it in, but they didn't want any money. Tucson Parks and Recreation Administrator Peg Weber identified the bust, which is in pretty good shape, except for a few gashes at the lower part that was near the base.