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 Dow Jones industrial average lost 17.98 points, or 0.1%, to 16,444.76.The Standard & Poor’s 500 index rose 0.64 points, or 0.03%, to 1,838.13. The NASDAQ composite fell 9.42 points, or 0.2%, to 4,156.19. Benchmark U.S. oil for February delivery fell 67 cents to close at $91.66 on the New York Mercantile Exchange.
IKEA TO OPEN IN ST. LOUIS FALL OF 2015
St. Louis, Mo. — IKEA plans to break ground on a three-level, 380,000-sq.-ft. building in midtown St. Louis this summer, according to Pace Properties, the broker selected by IKEA to help facilitate the chain’s expansion into the St. Louis market. The site is a 21-acre redeveloped tract at the intersection of Forest park and Vendeventer avenues within the 240-acre CORTEX Life Science District in midtown St. Louis. The building will feature two floors of showroom space above a ground-level garage. With supplemental surface parking, and accommodate 1,250 vehicles. Pace began evaluating properties in metro St. Louis in 2004. Overall, the firm analyzed more than 30 prospective locations. A defining characteristic of the site IKEA selected is its urban setting in a gentrifying area of St. Louis City. IKEA typically favors suburban locations.
FOREIGN INVESTORS JUMPED TO 58% OF CRE DEALS IN DC 2013
WASHINGTON, DC-Last year foreign investors from countries ranging from Israel and Kuwait to South Korea accounted for 58.1% of the roughly $2.6 billion in commercial single-asset deals in the District according to Jones Lang LaSalle. It is a significant jump from the previous year, which also experienced a good-sized uptick in foreign investment. In 2012 foreign buyers accounted for 30.7% of DC commercial asset sales. Historically that figure is around 18.3%.
DM HOSTS F-16s AS PART OF OPERATION SNOWBIRD
TUCSON -DAVIS-MONTHAN Air Force Base will begin its hosting of Air National Guard F-16 Fighting Falcons beginning Saturday. Twelve F-16s from the South Dakota Air National Guard are scheduled to operate in Tucson Jan. 11 - 25. Ten F-16s from the New Jersey Air National Guard will be in Tucson Feb. 18 - March 8. Residents can expect to see and hear more F-16 traffic in and out of Davis-Monthan during these training dates. D-M says pilots will adhere to all normal arrival, departure and noise abatement procedures.
OIL & NATURAL GAS – BOON TO US GDP, SPELLS JOBS
An IHS Global Inc. study predicts investments will boost US GDP by $94 billion to $120 billion annually. Investment of $890 billion over the next 12 years in oil and gas transportation and storage infrastructure will move the U.S. toward a trade balance in energy and dramatically impact the U.S. economy, according to a new study from IHS Global Inc., an information and analytics firm. In the past five years, IHS noted, the U.S added nearly 1.2 million barrels per day of crude oil production capacity. The nation now leads with world in natural gas production at 65 billion cubic feet per day. And the U.S. has added 500,000 barrels of oil equivalent per day of natural gas liquids (NGLs) since 2008. Between 2014 and 2020, an average of more than $80 billion will be invested annually in petroleum infrastructure, IHS predicts. After 2020, that investment will moderate but the research firm expects direct capital investment will still be nearly $60 billion by 2025. While all areas of the country will receive investment, IHS said, the south is likely to see the greatest investment – an average of $41.5 billion annually while $14.1 billion would go to the West, $11.8 billion to the Midwest and $6.4 billion to the Northeast.
BIG SIX BANKS’ 2013 PROFIT THWARTED BY LEGAL COSTS
Combined profit at the six largest U.S. banks jumped last year to the highest level since 2006, even as the firms allocated more than $18 billion to deal with claims they broke laws or cheated investors. A stock-market rally, cost cuts and a decline in bad loans boosted the group’s net income 21 percent to $74.1 billion, according to analysts’ estimates compiled by Bloomberg. That’s second only to 2006, when the firms reaped $84.6 billion at the peak of the U.S. housing bubble. The record would have been topped were it not for litigation and other legal expenses. Wall Street’s largest banks, set to report fourth-quarter earnings starting Jan. 14, are contending with fresh accusations they misled buyers of mortgage-backed securities, rigged markets or turned a blind eye to suspicious activity by customers.
TUCSON MAYOR AND COUNCIL APPROVE LOCAL FILM INCENTIVE
TUCSON- In an effort to lure filmmakers back to Tucson, Mayor and Council yesterday directed City staff to prepare an ordinance that would provide an incentive for film production. The incentive will give films with a production cost of at least $2 million a rent discount on City-owned or City-operated property (such as the Tucson Convention Center). Without incentives, major productions will continue to bypass Tucson, said Brent DeRaad, president and CEO of Visit Tucson. City Staff will return to the Council with a final ordinance at a later date. At one point, the State of Arizona offered film incentives, but those expired several years ago and never were re-authorized.
GOLD REBOUNDS AS DEMAND GAINS
Gold rose for the first time in four days in New York on speculation lower prices are boosting physical demand. Bullion fell for a third consecutive day yesterday, the longest run since November, after minutes of the Federal Reserve’s December meeting showed some officials saw diminishing economic benefits from purchasing debt. The dollar was little changed after reaching a four-month high versus 10 major currencies before a report tomorrow that may say U.S. employers continued to add positions last month. The Fed minutes didn’t describe a set schedule for the pace of asset-purchase reductions after policy makers cut monthly buying to $75 billion from $85 billion, citing improvement in the labor market. While gold tumbled 28% last year, the most since 1981, lower prices boosted physical demand. The U.K.’s Royal Mint said yesterday it ran out of 2014 Sovereign gold coins as lower prices spurred demand.
FOOD INDUSTRY CUTS CALORIES FOUR FOLD OVER PLEDGE
WASHINGTON (AP) — Some of the nation’s largest food companies have cut daily calorie counts by an average of 78 per person, a new study says, more than four times the amount the industry pledged to slash by next year. The study, which was sponsored by the Robert Wood Johnson Foundation, found that between 2007 and 2012 the estimated total cut in food product calories from a group of 16 major food companies was in the range of 6.4 trillion. Seventy-eight calories would be about the same as an average cookie or a medium apple. The federal government estimates an average daily diet at around 2,000 calories. The 2010 pledge taken by the companies — including General Mills Inc., Campbell Soup Co., ConAgra Foods Inc., Kraft Foods Inc., Kellogg Co., Coca-Cola Co., PepsiCo Inc. and Hershey Co. — was to cut 1 trillion calories by 2012 and 1.5 trillion calories by 2015.
WEEKLY UNEMPLOYMENT BENEFIT CLAIMS DROP TO 330K
WASHINGTON (AP) — The number of Americans seeking unemployment benefits fell 15,000 last week to a seasonally adjusted 330,000, signaling fewer layoffs and steady job growth. The Labor Department said Thursday that the less volatile four-week average dropped 9,750 to 349,000. A Labor Department spokesman said there was no indication that snow and freezing weather around much of the country caused the drop in applications. Applications are a proxy for layoffs. They appear to have stabilized near pre-recession levels after a period of volatility around the Thanksgiving and Christmas holidays. That suggests recent job gains will continue.
ALCOA SUBSIDIARY PLEADS GUILTY TO BAHRAIN BRIBERY
PITTSBURGH (AP) — A subsidiary of Alcoa Inc. pleaded guilty Thursday and, along with the parent company, will pay a total of $384 million in penalties for bribing officials in the kingdom of Bahrain through a London-based middleman. A company official entered the plea on behalf of Alcoa World Alumina LLC, which will pay $223 million in fines and criminal penalties for violating the anti-bribery provisions of the Foreign Corrupt Practices Act. The law governs the conduct of American businesses abroad. Parent company Alcoa Inc. must guarantee those payments and on Thursday also agreed to a separate $161 million civil penalty for related Securities and Exchange Commission violations.
FORD BOARD RAISES QUARTERLY DIVIDEND 25%
DEARBORN, Mich. (AP) — Ford Motor Co. is raising the quarterly dividend it pays shareholders for the second time since restoring it in 2012. The second-largest U.S. automaker said Thursday its board declared a first-quarter dividend of 12.5 cents per share, a 25% increase from the previous dividend of 10 cents. The new dividend is payable on March 3 to shareholders of record at the close of business on Jan. 31. Ford stopped paying a dividend in 2006, a year in which it lost $12.6 billion. After a restructuring, it returned to profitability in 2009. Ford restored its quarterly dividend at 5 cents per share in the first quarter of 2012 and doubled that dividend a year later.
McKESSON RAISES BID TO BUY CELESIO
SAN FRANCISCO (AP) — McKesson Corp. has raised its bid for rival German pharmaceutical drug distributor Celesio with what it said Thursday was its best and final offer. San Francisco-based McKesson is now offering 23.5 euros for each share of Celesio. That equates to about $31.97 per share and is up from an offer of 23 euros last month. That offer is currently worth about $31.29 per share. McKesson said Thursday it had reached a deal with Franz Haniel & Cie. GmbH, which holds a 50 per cent stake in Celesio, on the higher bid. It also struck a deal with the hedge fund Elliott to acquire its Celesio convertible bonds if the latest takeover bid succeeds. Elliott owns about a 25 per cent stake in Celesio and had contended that the company was worth more than the $8.3 billion value of the previous offer. The hedge fund didn’t specify an acceptable price, but it had vowed last month not to accept McKesson’s earlier bid, which was worth $31.65 per share in early December.
IBM’s WATSON GETS ITS OWN BUSINESS
NEW YORK (AP) — One of the most famous “Jeopardy!” champs of all time is moving to Manhattan. No, it’s not Ken Jennings. IBM announced Thursday that it’s investing more than $1 billion to give its Watson cloud computing system its own business division and a new home in New York City. The Armonk, N.Y.-based technology company said the new business unit will be dedicated to the development and commercialization of the project that first gained fame by defeating a pair of “Jeopardy!” champions, including 74-time winner Jennings, in 2011. In the years since Watson’s TV appearance, IBM has been developing the computing system for more practical purposes and changed it to a cloud-based service. While still in the development phase, Watson’s massive analytical capabilities are currently being used in industries ranging from health care to banking.