Real Estate Daily News Buzz February 15, 2016


Reserve-White-house-domeReal 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.

Friday, the Dow Jones industrial average rose 313.66 points, or 2%, to 15,973.84. The Standard & Poor’s 500 gained 35.70 points, or 2%, to 1,864.78. The NASDAQ composite added 70.67 points, or 1.7%, to 4,337.51.

Benchmark U.S. crude climbed $3.23, or 12.3%, to close at $29.44 a barrel in New York. Brent crude, a benchmark for international oils, gained $3.30, or 11%, to $33.36 a barrel in London. Wholesale gasoline jumped 10 cents, or 10.8%, to close at $1.04 a gallon, while home heating oil climbed 9 cents, or 9.2%, to close at $1.07 a gallon. Natural gas fell 3 cents, or 1.4%, to $1.97 per 1,000 cubic feet.

Is the U.S. Economy Running Out of Gas? “Is there another U.S. recession on the way? That’s a question rattling investors, worrying business leaders and shaping the debate on the presidential campaign trail. The answer depends a lot on how you measure the strength and durability of the recovery, now in its seventh year based the business cycle dates tracked by economists at the National Bureau of Economic Research.” (CNBC)

Yellen Re-Examining Negative Rates; Top Lawmaker Doubts Legality “A top U.S. lawmaker questioned the Federal Reserve’s authority to cut interest rates below zero after Janet Yellen disclosed that the central bank was re-examining the tool as a policy option if the economy faltered. The Fed chair was asked during two days of congressional testimony to clarify her views on pushing borrowing costs below zero in the U.S., which some investors see as increasingly likely amid a darkening outlook for global growth that has panicked financial markets.” (Bloomberg)

Kroger in Bid to Acquire Fresh Market—Sources “The Kroger Co, the largest supermarket chain in the United States, is seeking to acquire Fresh Market Inc, a U.S. specialty grocery retailer that has been exploring a sale, according to people familiar with the matter. Kroger is in the second round of an auction process for Fresh Market that has also attracted other companies and private equity firms, the people said this week. Apollo Global Management LLC, KKR & Co LP and TPG Capital LP are among the buyout firms participating in the auction, the people added.” (Reuters)

AT&T Hires Firm to Study Downtown Office Options “Downtown Dallas’ biggest business is taking a look at its office needs. Communications giant AT&T Inc. has hired commercial real estate agents to evaluate its headquarters office options in the years ahead. AT&T, which moved its headquarters from San Antonio to Dallas in 2008, is working with CBRE to evaluate its long-term operation needs.” (Dallas Morning News)

Morgan Stanley Settles for $3.2 Billion Over Role in 2008 Financial Crisis “Federal and state authorities on Thursday announced a $3.2 billion settlement with Morgan Stanley over bank practices that contributed to the 2008 financial crisis, including misrepresentations about the value of mortgage-backed securities. The nationwide settlement, negotiated by the working group appointed by President Barack Obama in 2012, says the bank acknowledges that it increased the acceptable risk levels for mortgage loans pooled and sold to investors without telling them.” (Associated Press)

Optimism Slips a Bit for O.C. Commercial Real Estate, Survey Says “The folks who own and manage the region’s biggest properties may be seeing a future chill in their climate. Local commercial real estate executives remain generally optimistic, but that enthusiasm is decidedly tempered, according to the latest biannual edition of the Allen Matkins/UCLA Anderson Forecast. It surveys local real estate executives about their three-year outlooks for key industry segments.” (The Orange County Register)

Does Your Real Estate Investment LLC Give You Bullet Proof Asset Protection? “Real estate investors are particularly vulnerable to lawsuits because they are typically held responsible for injuries occurring on their property, regardless of how or why said injury occurred. Forming an LLC provides excellent protection to your personal assets. But real estate investors should not rest on their laurels simply because their company is structured as an LLC.” (Chicago Now)

Tishman Speyer to Buy CNN Building in Hollywood for More Than $127M “New York-based Tishman Speyer has agreed to pay more than $127 million for the CNN Building in Hollywood in a sale expected to close by the end of the week, The Real Deal has exclusively learned. The deal has been in the works for months, sources said, and neared a close right as Mark Laderman, Tishman Speyer’s regional director for Southern California, resigned, according to sources. The reasons for his resignation are unclear.” (The Real Deal)

Up Close: Shoppers Review Amazon Books “Modern. Innovative. Interactive. Organized. Those were among the words used most often by mystery shoppers to describe Amazon’s first ever retail storefront, Amazon Books. The report comes amid ongoing rumors that the Internet giant is planning to roll out additional stores. The shoppers are part of Field Agent, which provides on-location auditing and research via a network of 650,000 “agents” who collect data that can be monitored in real time by its clients.” (Chain Store Age)

Veritas Secures $815M Financing for San Fran Portfolio “Veritas Investments Inc., whose holdings consist of commercial real estate located exclusively in the San Francisco Bay Area, truly knows how to attract lenders willing to part with the big bucks. The multifamily, retail and mixed-use property owner and operator just obtained financing to the tune of $815 million for a mixed-asset portfolio, marking the largest transaction of its kind in San Francisco—ever.” (Commercial Property Executive)

Visa discloses stake in Dorsey’s company, Square — Shares in the mobile payment services company Square rose sharply Friday after Visa disclosed the details of its ownership stake in the company. While Visa’s stake amounts to about 1 per cent of the company, and the stake was established at least 5 years ago, investors interpreted the announcement as a major endorsement of Square by Visa, the world’s largest payment processing company. According to a regulatory filing, Visa owns 4.2 million of Square’s Class B shares. While Class B shares are not traded publicly they could be converted to 3.5 million Class A shares, which would leave the Visa with 10 per cent of that class of shares. That conversion would amount to just 1 per cent of Square’s total outstanding shares.

US business stockpiles rise in December, but sales fall — U.S. businesses boosted their stockpiles slightly in December, as sales dropped sharply. This combination has stoked anxieties about weakening economic growth, as sales over the entire year dropped for the first time since the Great Recession. The Commerce Department said Friday that December business inventories rose a seasonally adjusted 0.1%, after having slipped 0.1% in November. Both manufacturers and retailers — which were responding to holiday shopping — increased their stockpiles. But sales fell 0.6% in December, with a stiff 1.4% drop in manufacturer revenues accounting for much of the drop. Retail sales were nearly unchanged.

US retail sales rise as consumers shrug off stock price drop — U.S. retail sales rose modestly in January, evidence that Americans kept shopping despite sharp drops in stock prices. The Commerce Department said Friday that retail sales increased a seasonally adjusted 0.2% last month, the same as in December. Excluding the effect of falling gas prices, sales rose 0.4%. Sales in December were revised higher from an initial estimate of a 0.1 per cent drop.