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 sank 84.03 points, or 0.5 per cent, to 18,552.02. The Standard & Poor’s 500 index lost 12 points, or 0.5 per cent, to 2,178.15. The NASDAQ composite declined 34.90 points, or 0.7 per cent, to 5,227.11.
Benchmark U.S. crude added 84 cents, or 1.8 per cent, to $46.58 per barrel in New York. Brent crude, a benchmark used to price international oils, rose 88 cents, or 1.8 per cent, to $49.23 a barrel in London. In other energy trading, wholesale gasoline rose 2 cents to $1.42 a gallon. Heating oil picked up 1 cent to $1.46 a gallon. Natural gas gained 3 cents to $2.62 per 1,000 cubic feet.
US stocks slip from records as investors sell safe picks — U.S. stocks slid Tuesday as investors continued to sell phone company and utility shares. Energy companies rose with the price of oil, but stocks have been locked in an up-and-down pattern for more than a week. As the dollar weakened, the price of oil rose for the fourth day in a row to sustain a recent recovery and metals prices also rose. Most stocks were down, but for the second day in a row, the biggest losses went to traditionally safe investments like telecom and utility companies. Bond prices also inched lower.
US consumer prices unchanged in July — U.S. consumer prices were unchanged in July as a big drop in gasoline and other energy prices kept inflation under control. The Labor Department said Tuesday the flat reading for overall inflation followed a 0.2 per cent gain in June. Energy prices fell by the largest amount in five months. Core inflation, which excludes volatile energy and food, edged up 0.1 per cent in July, the smallest increase in four months. The Federal Reserve has an inflation target of 2 per cent annual increases.
US factory output jumps 0.5 per cent for biggest gain in year — U.S. factories cranked out more autos, machinery and chemicals in July, lifting production by the most in a year. The Federal Reserve said Tuesday that factory output grew 0.5 per cent in July, after a 0.3 per cent gain in June. The figures suggest that U.S. manufacturing may be turning a corner after struggling to overcome the impact of a stronger dollar, slower overseas growth and falling oil prices. Overall industrial production, which includes utilities and mining, expanded 0.7 per cent. That is the biggest increase since November 2014.
CBL & Associates Properties Inc. Says Independent Investigation Finds No Wrongdoing “CBL & Associates Properties Inc. said today that an independent investigation confirms that allegations regarding its procedures with respect to four loans were false and unwarranted. ‘Additionally, through our outreach to the Department of Justice, we confirmed that the DOJ is not conducting an investigation of CBL,’ the company said in a statement. Specifically, the investigation said that information concerning leases and revenue, provided to lenders in connection with four loans, and the accounting for the leases for properties securing the loans were accurate in all material respects.” (Times Free Press)
As a Young Donald Trump Began His Real Estate Career, He Fought Hard Against Allegations of Racial Bias “Before he became the king of Atlantic City casinos, before he put his name on steaks or starred on reality television, Donald Trump served his own apprenticeship in the less glamorous family business of renting apartments. Trump, in his autobiography, recalled learning valuable lessons from his father, Fred: Hunt for bargains. Chase out deadbeats. Spend some money on paint and polish. Some alleged there was another part to the Trump formula: Make it tough for black people to move in.” (Los Angeles Times)
Barrack Says U.S. Real Estate Market is Getting ‘Bubblycious’ “Real estate investors could be in for a shock if interest rates rise or demand in some markets continues to fall because “amateurs” are plowing money in at high prices, betting on rent increases that may not continue, said Tom Barrack, the billionaire chairman of Colony Capital Inc. Trends in demographics and technology are undermining traditional holdings such as hotels, office buildings and residential properties, Barrack said in an interview at Bloomberg’s Los Angeles office.” (Bloomberg)
AIG Nears Deal to Sell Mortgage-Insurance Unit to Arch Capital “American International Group Inc. is nearing a deal to sell its mortgage-guaranty unit to Arch Capital Group Ltd. for about $3.4 billion, according to people familiar with the matter, as the insurance giant has been speeding up the return of cash to restive shareholders. An agreement between the companies could be reached as soon as early this week, some of the people said, cautioning that the talks could still fall apart. AIG had announced plans early this year to stage an initial public offering of the mortgage business, known as United Guaranty.” (MarketWatch)
Chinese Investment Trends in U.S. Hotel Real Estate “The rising trend of Chinese investment in the U.S. real estate market dates back to 2010, just as the nation's economy was pulling out of the recession. The impact of Chinese investment in U.S. residential and commercial properties—including hotels—has become increasingly pronounced every year since. The following tables show major single-asset transactions made by Chinese investors in the last five years. The two transactions in New York, one of which was recorded at approximately $1.4 million per room and the other at over $2 million per room, especially caught the attention of the industry.” (HospitalityNet)
The Cities with the Lowest Unemployment Rates in America “If you want to find the U.S. cities with the lowest rates of unemployment, you'll have to leave the coasts and head to what are sometimes called the flyover states. Among 107 metropolitan areas surveyed by CNBC for its Metro 20 ranking of America's Best Places to Start a Small Business, Provo, Utah, and Omaha, Nebraska, were tied for having the lowest annualized average unemployment rates in the United States in 2015.” (CNBC)
Stellar Management Buys Out Partner in SoHo Office Property “The real estate firm handling one of the largest office redevelopments in midtown south has bought out its lead partner and brought in another investor in a $650 million deal to recapitalize the project. Stellar Management purchased Rockpoint Group's 40% interest in One SoHo Square, a pair of buildings on the corner of Spring Street and Sixth Avenue that the companies have been renovating into upscale office space. Stellar, which previously held a roughly 60% stake in the buildings, also brought in a new undisclosed partner.” (Crain’s New York Business)
4 Reasons Barnes & Noble Isn’t Dead Yet “In a bid to attract more customers to its stores, which once upon a time had serpentine lines in front of the cashiers, the book retailer is adding four new concept stores which will also serve alcohol. While existing stores already house coffee shops, the new stores will offer a complete breakfast, lunch and dinner menu served by waiters and will be twice the size of its existing cafes. The first store is set to open in October in Eastchester, N.Y. This innovation could be a game-changer that lights a fire under the stock.” (The Street)
Potential Hotel Buyer Backs Out in Fear of Ron Burkle “Ron Burkle can rest easier when it comes to Morgans Hotel Group. A potential bidder for the boutique hotel chain — whose $3-a-share proposal for the business would have trumped a rival offer from a Burkle group — has backed down rather than risk a battle with the billionaire investor, The Post has learned. The suitor fretted that Burkle, who holds veto power over significant Morgans asset sales, would prove to be a roadblock to any deal other than his own, said a source close to the situation.” (New York Post)
Logan’s Roadhouse Bankruptcy: List of 21 Restaurants to be Closed “Twenty-one locations of Logan's Roadhouse will be closed as part of the chain's bankruptcy proceedings. The Nashville, Tennessee-based steakhouse chain filed for bankruptcy last week. The chain operates 250 locations nationwide, including 23 in Alabama. Logan's parent company, LRI Holdings Inc., cited years of declining sales and greater competition from fast-casual restaurant chains as contributing factors in its financial issues.” (AL.com)