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 27.94 points, or 0.2%, to close at 16,016.02. The Standard & Poor’s 500 index rose one point to 1,881.33. The NASDAQ composite index fell 11.47 points, or 0.3%, to 4,476.95.
U.S. crude fell 96 cents, or 3.3%, to close at $28.46 a barrel in New York. Brent crude, a benchmark for international oils, rose 21 cents to close at $28.76 a barrel in London. In other trading of energy futures, the price of wholesale gasoline inched up 0.5 cent to $1.026 a gallon. Heating oil fell 2.6 cents to 90.9 cents a gallon. Natural gas slipped 0.9 cent to $2.091 per 1,000 cubic feet.
Starwood Capital, Fosun Said to Consider Offers for Ascendas “Starwood Capital Group, the property investment firm, and Chinese billionaire Guo Guangchang’s Fosun International Ltd. are weighing bids for Ascendas Hospitality Trust, people with knowledge of the matter said. Starwood Capital, which manages about $45 billion of assets, and Fosun are studying the Singapore-based hotel owner and could submit offers as early as the end of January.” (Bloomberg)
Macy’s Is Pursuing Real Estate Opportunities: CEO “Macy's CEO Terry Lundgren said Tuesday the company is taking a more professional view of its real estate assets than ever as it faces pressure to unlock their value. Lundgren noted that Macy's is seeking to hire an in-house real estate adviser who can look out to the long term and help the company rethink the value opportunities in its property holdings and make its big box stores more productive.” (CNBC)
Ivanhoe, Veritas Invest $200 Million in San Francisco Apartments “Ivanhoe Cambridge, the largest foreign investor in U.S. commercial real estate last year, bought 16 San Francisco apartment buildings for about $200 million, adding to its business there with partner Veritas Investments. The duo now own 45 properties in neighborhoods including Russian Hill and Nob Hill in the city, many with retail in the buildings, according to a joint statement.” (Bloomberg)
2016 Retail IPO Outlook “In response to a tepid IPO landscape in 2015, some consumer business companies like Neiman Marcus Group Inc. and grocery chain Albertsons Cos. hit the brakes on going public until sentiment improves overall. So, could 2016 be a year of IPO revival following 2015's hangover? In our recent 2016 BDO IPO Outlook Survey, we polled 100 capital market executives on their expectations for the IPO market in 2016 and found that investment bankers are divided in their projections for the year ahead.” (Chain Store Age)
J.C. Penney CEO Brings in His Own Head of Stores “Joe McFarland has been hired to be executive vice president over all of J.C. Penney’s 1,000 stores, the Plano-based retailer said Monday. McFarland’s appointment is effective immediately, the company said in a release. He succeeds Tony Bartlett, who had been with Penney since 2006, the last three years over stores. The addition of McFarland means CEO Marvin Ellison is still putting his team together.” (The Dallas Morning News)
L.A. Eyes Plan to Hire Lobbyist to Explore Ways to Use City-Owned Land “The Los Angeles City Council voted Wednesday to explore whether L.A. should retain a private company to come up with ideas for developing city property — and suggested using a process that would avoid competitive bidding for the work. Two days later, after The Times asked about the reason for avoiding a bid process, City Councilman Curren Price asked the council to amend his proposal.” (Los Angeles Times)
Fairfield Real Estate Company Looks to Take over GE’s Headquarters as Company Relocates “Less than one week after General Electric announced its move to Boston, Fairfield-based real estate company Kleban Properties is looking to purchase the headquarters. The real estate and development company wants to bring technology-based businesses to the campus, along with an educational component Kleban Properties Chairman Al Kleban said he cannot elaborate much on the idea, but noted that a partnership with a Connecticut college -- possibly Fairfield University -- is key.” (Fox61)
Marco Rubio: Poor Little Rich Boy Runs into Real Estate Trouble “In 2003, Mr. Rubio bought his first house (at 6247 14th Street SW in West Miami) for $175,000, putting zero money down. He put it up for sale in 2005 but had difficulty selling it because of a weak local real estate market. But gracias a Dios, Dr. Cereceda’s mama, Nora Cereceda (now deceased), bought Mr. Rubio’s house in 2007 for $380,000 cash, netting Mr. Rubio a profit of about $205,000. Shortly after Mr. Rubio sold the house, he did a 180-degree rotation on a key insurance bill for which Dr. Cereceda had been lobbying.” (Commercial Observer)
Tech Boom Starts to Transform Oakland Real Estate “The tech boom has begun spreading across the San Francisco Bay to Oakland, and it's creating a surge in commercial real-estate spending. As big companies like Uber move in and more small start-ups set up shop, real estate companies have to stretch their thinking to accommodate companies that want everything from flexible lease arrangements to kombucha bars and community hammocks.” (Marketplace)
Rams Players Could Bring $400M to LA Home Market “The Los Angeles Rams move from St. Louis to La La Land could bring anywhere from $200 to $400 million to Los Angeles’ residential market, said Lee Mintz, head of the sports and entertainment division at Partners Trust. The cash will be split between luxury leases and home sales, she estimated. Roughly 100 people associated with the franchise will move to LA, Mintz said, including players, staff and administrators — and they’re in a rush to settle down.” (The Real Deal)
Bank of America profit grows, but says growth is a struggle — Bank of America reported higher profits on better performance in consumer banking and lower costs, but the bank acknowledged that it is struggling to increase revenue despite an improving U.S. economy. BofA earned a profit of $3.01 billion, or 28 cents per share, after payment of dividends to preferred shareholders. That’s an improvement of nearly 10 per cent over the same period last year and beat market expectations. CEO Brian Moynihan said that results for the year, which were the highest earnings in a decade for the bank, were the result of “doing more business with each customer and client.”
Delta posts $980 million 4Q profit on lower fuel prices — Cheaper jet fuel helped Delta Air Lines earn $980 million in the fourth quarter despite lower revenue than a year ago. Delta forecast another decline in a key revenue measure through the first three months of 2016. That could add to investor concern that airlines are adding too many flights while fuel is relatively cheap, which is pushing fares lower. But Delta officials said bookings for this spring are ahead of last year’s pace because lower gasoline and heating bills mean that consumers have more money to spend.
Morgan Stanley swings to profit in 4Q, beating expectations — Morgan Stanley swung back to a profit in the fourth quarter as the bank moved on from large legal settlements, its wealth management division improved and investment bank advisory activity picked up. Morgan Stanley had $3.1 billion in legal expenses in 2014, when the bank settled with state and federal regulators over its role in the housing bubble and subsequent financial crisis. Removing an adjustment tied to the value of Morgan Stanley’s debt, the bank earned $986 million, or 43 cents per share, in its most recent quarter.
Johnson & Johnson to cut about 3,000 jobs in medical devices -- Johnson & Johnson said Tuesday that it plans to cut about 3,000 jobs over the next two years as the health care conglomerate works to restructure its medical devices business. The company said that amounts to more than 2 per cent of its global workforce of around 127,000 people. The cuts come after a tough year for the healthcare bellwether, which has seen sales of its prescription drugs, devices and consumer medicines squeezed by a weakening global economy and unfavourable currency exchange rates.
JC Penney to start selling home appliances again -- J.C. Penny will sell refrigerators, washing machines and other appliances at some of its stores for the first time in more than 30 years. The move, announced Tuesday, comes as many department stores are under pressure to attract shoppers who are spending more money on their homes than on clothing. J.C. Penney says many of its customers are either buying their first home or already own one and want to update them. Shoppers were often searching for refrigerators or washing machines on the department store’s website, says company spokeswoman Daphne Avila.
Netflix impresses Wall St. with robust 4Q overseas growth — As its U.S. subscriber growth tapers off, Netflix’s Internet video service is setting out to conquer the rest of the world in an audacious expansion likely to sway the company’s stock and the prices it pays for TV shows and movies. Netflix added 1.56 million U.S. subscribers from October through December, slightly below what management had predicted. It marked the second-straight quarter that Netflix’s subscriber gains in the U.S. have disappointed. But international growth exceeded the company’s projections to give Netflix nearly 75 million worldwide subscribers through December. Netflix Inc.’s fourth-quarter earnings also exceeded analyst forecasts.
Faced with array of risks, CEOs increasingly pessimistic — Facing risks from the economic slowdown in China to the rise of the Islamic State group, chief executives around the world are more pessimistic about the global economy than at any time in three years — a development that has the potential to seriously affect their investment and growth plans. That’s the conclusion from a survey of CEOs conducted by consulting and accounting firm PricewaterhouseCoopers, or PwC, during the last quarter of 2015 and released in time for the start of the World Economic Forum in the Swiss ski resort of Davos. The survey found top executives fretting over problems including regulation and cybersecurity.