Real Estate Daily News Buzz January 21, 2016

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.

Wednesday, the Dow Jones industrial average lost 249.28 points, or 1.6%, to close at 15,766.74. The Standard & Poor’s 500 index fell 22 points, or 1.2%, to 1,859.33. The NASDAQ composite index shed 5.26 points, or 0.1%, to 4,471.69.

U.S. crude dropped $1.91, or 6.7%, to $26.55 a barrel in New York. Brent crude, a benchmark for international oils, fell 88 cents, or 3.1%, to $27.88 a barrel in London.

In other energy trading, wholesale gasoline dipped to $1.018 a gallon. Heating oil plunged 4.3 cents, or 4.7%, to 86.6 cents a gallon. Natural gas rose 2.7 cents, or 1.3%, to $2.118 per 1,000 cubic feet.

Stocks avoid biggest losses but slide again as oil tumbles — U.S. stocks slumped Wednesday as the price of oil suffered its worst one-day drop since September. A huge sell-off earlier in the day pushed the Standard & Poor’s 500 index to its lowest level in almost two years. Investors are worried that low oil prices mean there’s not that much demand for fuel. That would be a sign that growth in the global economy is slowing down. Stocks in the U.S. started sharply lower, following widespread selling overseas, and at one point the Dow Jones industrial average fell as much as 565 points. (AP)

Einhorn Buys Macy’s Stake Saying It Could Be Takeover Target “Greenlight Capital, the hedge fund firm led by David Einhorn, made a new investment in Macy’s Inc. in the fourth quarter, arguing the retailer could become a takeover target, according to a letter to investors that was obtained by Bloomberg. A private equity firm and a real estate investment trust could team up to purchase the company and ‘unlock the value’ of its land and buildings, Greenlight said in the letter, which was dated Tuesday.” (Bloomberg)

Housing Starts Fall 2.5% in Final Months of 2015 “Home builders cut back slightly on new construction in the final month of 2015, though they built the most homes last year since 2007. So-called housing starts fell 2.5% last month to an annual rate of 1.15 million, the government said Wednesday. Economists surveyed by MarketWatch had expected starts to total a seasonally adjusted 1.23 million. Yet for the full year home builders started work on 1.11 million new houses, the largest number since the Great Recession.” (MarketWatch)

How American Department Stores Are Fighting Extinction “American department stores have been pillars of retail for well over a century. Saks, Bloomingdales, and Lord & Taylor were founded back in the 1800s, while their competitors such as Barneys are relative upstarts, launching during the Roaring 20s. For many years, their hold on consumers was absolute. But in an age when customers can just as easily shop from their sofas, the American department store is facing flagging sales.” (Fortune)

Silver Bay CEO Steps Down as Board Seeks New Leadership “David Miller resigned as chief executive officer of Silver Bay Realty Trust Corp., and board member Thomas Brock will lead the single-family landlord during the search for a new CEO. Brock will serve as interim president and CEO, effective immediately, while the company seeks a permanent replacement with a strong background in real estate operations, according to a statement Tuesday. Miller will no longer serve on Silver Bay’s board.” (Bloomberg)

MetLife and New York State Common Retirement Fund Form Real Estate Investment Venture “MetLife, Inc. announced today that it has formed a real estate investment venture with New York State Common Retirement Fund, the third largest public pension fund in the U.S. The venture’s initial investment portfolio, which will be managed by MetLife Investment Management (MIM), comprises seven properties valued at more than $1.4 billion. MetLife sold a 49.9 percent stake in the portfolio to the New York State Common Retirement Fund.” (WallStreet: Online)

Crashing Chinese Markets Could Be Boon for U.S. Real Estate “Concern about the Chinese economy heightened again with the announcement Tuesday that GDP rose just 6.9% in 2015, its lowest annual gain in 25 years. Chinese and other foreign investors will undoubtedly start shifting their attention to the U.S. and other markets. Among the industries most likely to benefit is real estate, which has benefited significantly from foreign investment in recent years.” (The Street)

As Wealthy Brazilians Snap Up Miami Real Estate, Few Benefit “Facing a teetering economy at home, wealthy Brazilians have been pouring money into what they increasingly see as the safest place to invest: South Florida real estate. So are Argentinians, Colombians, Mexicans, Venezuelans, French and Turks—almost anyone with money to shelter, a direct flight to Miami and a shaky economy to flee. Their cash has helped drive the latest twist in Miami’s ever-evolving transformation.” (CNBC)

Commercial Property Demand in U.S. Remains Strong in Q4 “According to CBRE Group, Inc., the U.S. commercial real estate market shows continued healthy demand across all property types during the fourth quarter of 2015 (Q4 2015). The office vacancy rate declined 20 basis points (bps) to13.2%. The vacancy rate has not shown an increase in 23 quarters. The industrial availability* rate continued to decline, falling by 20 bps to 9.4%.” (World Property Journal)

15 NYC Real Estate Properties Assessed at Over $1B “Related Companies and Oxford Properties saw 10 Hudson Yards’ “market value” – assessed for tax purposes – grow by nearly $250 million year-over-year according to city assessments released Friday, the largest increase of any property in the city. The city valued the property at $332.8 million, up from $84 million the previous year. Vornado Realty Trust’s 1.8 million-square-foot hotel and retail building at 1375 Broadway saw its city-assessed market value climb by just over $200 million, to just over $1 billion.” (The Real Deal)

Major Landlord to Spend Millions of Dollars Creating Retail Space at Starrett-Lehigh Building “The owner of the Starrett-Lehigh Building is investing millions of dollars into the west Chelsea office building to create ground floor retail. The space will be a welcome addition to the neighborhood, which has a dearth of stores and restaurants that cater to the growing population of office workers. RXR Realty plans to create about 50,000 square feet, spanning a full block, of retail along Eleventh Avenue.” (Crain’s New York Business)

Anxiety in the air as world elite meets in Davos — In the couple of hours before Morgan Stanley chief James Gorman sat down Wednesday to speak on a panel in Davos, Switzerland, he had lost some $600,000 on the value of his shares in the bank. As the world’s richest business leaders and public figures kicked off the World Economic Forum’s annual meeting in the Swiss ski resort, a renewed plunge in stock markets and global oil prices clouded the air with anxiety. Gorman is not alone — already this year trillions of dollars have been wiped off the value of shares around the world. Some participants voiced a high degree of concern over the global economy, saying the recent turbulence in financial markets — which saw the Dow plunge over 500 points on Wednesday — was akin to a “meltdown.” Others sought to describe it as a natural adjustment. Not many were upbeat.

Iran’s big market tempts European firms despite hazards — With many barriers to dealing with Iran suddenly lifted as part of a nuclear deal, some European companies are ready to seize business opportunities in a tempting market of 78.5 million people. At first glance, the allure is obvious — Iran is the second-largest economy in the region, the second most populous country and it has infrastructure and vehicles overdue for an upgrade after years of sanctions. But those companies that take the plunge face serious risks from the remaining sanctions, geopolitical uncertainty, red tape and corruption.

Palestinians lambast Airbnb’s West Bank settlement listings — Airbnb is coming under Palestinian criticism for listings that fail to mention the property is in a West Bank settlement, on occupied land claimed by the Palestinians. Such criticism puts Airbnb in the crosshairs of an increasingly aggressive global boycott movement and has injected a dose of Mideast politics into the sharing economy. The Palestinians say that by contributing to the settlement economy, Airbnb, like other companies doing business in the West Bank, helps perpetuate Israel’s settlement enterprise. Senior Palestinian official Saeb Erekat sent a letter to Airbnb’s CEO last week demanding the company cease working with settlers.

US Treasury Sec: Puerto Rico needs congressional action — U.S. Treasury Secretary Jacob Lew stressed on Wednesday during a visit to Puerto Rico that congressional action is the only solution to pulling the U.S. territory out of its worsening economic crisis. He called on Congress to approve a restructuring mechanism to help the island deal with its $72 billion public debt. He also said some kind of oversight authority that respects Puerto Rico’s system of self-government is needed.

Walmart to give pay raises to most of its workers — The vast majority of Walmart’s U.S. employees will get raises as part of the world’s largest retailer’s previously announced commitment to invest in its workforce as it faces pressure from labor-backed groups and seeks to retain workers in a tighter labor force. Walmart Stores Inc. on Wednesday said more than 1.2 million U.S. hourly workers will get wage increases on Feb. 20. The company, which is the largest U.S. private employer with 1.4 million total workers, also said it will provide free, basic short-term disability to full-time hourly workers. And it will start allowing workers to accrue paid time off as they earn it. The moves mark the biggest changes Wal-Mart has made in its efforts to offer better wages and benefits to its workers.

New Mexico sues Volkswagen over emissions scandal — New Mexico has become the first U.S. state to sue Volkswagen and other German automakers over an emissions cheating scandal that involves millions of cars worldwide. Attorney General Hector Balderas filed the lawsuit in state district court late Tuesday. He alleges Volkswagen, Audi, Porsche and their U.S. subsidiaries violated New Mexico’s air quality standards and engaged in deceptive marketing to pass off certain diesel models as clean and efficient. Dozens of state attorneys general have teamed up for a civil investigation of VW. Others are conducting separate inquiries.

Feds probe complaints that Ford Focus doors won’t latch — U.S. auto safety regulators have opened an investigation into complaints that doors won’t latch properly on about 400,000 Ford Focus compact cars, including some reports that the doors have opened while the cars are moving. The probe by the National Highway Traffic Safety Administration covers Focuses from the 2012 and 2013 model years, according to documents posted Wednesday on the agency’s website. It’s similar to an investigation that caused a recall last year of more than 456,000 Lincoln MKZ and Ford Fusion and Fiesta models.

Russian ruble slides to record low in Moscow trading — The Russian ruble slid to a record low against the dollar Wednesday under pressure from low oil prices. The ruble traded above 81.8 to the dollar in Moscow on Wednesday evening, down by around four per cent. That beat the mark of 80.1 set when the currency crashed in value in December 2014 before stabilizing. Russia’s economy and government revenues are suffering due to the country’s dependence on oil, which has traded at 12-year lows in recent weeks because of a supply glut and the return of Iran to world markets.

Pot states take fresh look at out-of-state investment — States that have legalized pot are taking a fresh look at making it easier for out-of-state investors to get in the weed business, saying the industry’s ongoing difficulty in banking means they need new options to finance expansion. The four states that allow recreational pot sales — Alaska, Colorado, Oregon and Washington — have another big reason to take a new look at pot investment. That’s California, the nation’s most populous state and largest marijuana producer. California voters could approve recreational pot this fall, which gives the nascent pot industries in the other states reason to want to attract investment before a giant enters the picture.

Dow Chemical adds paid weeks to parental leave benefit — Dow Chemical is fattening the paid leave it gives employees after the birth of a child as it becomes the latest major U.S. employer to rethink how it treats parents. The creator of Ziploc bags and Saran Wrap said Wednesday that mothers will receive a minimum of 12 weeks of paid leave, while non-birthing parents can get two weeks. That’s up from six to eight weeks and one week, respectively. This leave can be taken in the 12 months after a child’s birth, and the change applies to all of the company’s 53,000 employees worldwide.