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 25.96 points, or 0.1 per cent, to 18,559.01. The Standard & Poor’s 500 index fell 3.11 points, or 0.1 per cent, to 2,163.78. The NASDAQ composite lost 19.41 points, or 0.4 per cent, to 5,036.37.
The price of crude oil fell 59 cents to $44.65 a barrel. Brent crude lost 30 cents, or 0.6 per cent, to $44.66 a barrel in London. Wholesale gasoline fell 1 cent to $1.38 a gallon, heating oil edged up less than 1 cent to $1.38 a gallon and natural gas rose less than 1 cent to $2.73 per 1,000 cubic feet.
US home construction posted solid gain in June — Construction of new homes posted a solid increase in June, led by a surge of building in the Northeast and the West. The Commerce Department said Tuesday that housing starts rose 4.8 per cent to a seasonally adjusted annual rate of 1.19 million from a revised 1.14 million in May. The June reading was the highest level since February, but was down from 1.21 million a year earlier. Construction of single-family homes rose 4.4 per cent to 778,000. (AP)
UnitedHealth’s profit surges, yet Affordable Care Act drags -- UnitedHealth’s second-quarter earnings jumped 11 per cent to beat investor expectations even though the nation’s largest health insurer took a bigger hit than expected from coverage linked to the Affordable Care Act. The company said Tuesday that losses from its ACA-compliant individual business came in $200 million above projections, which means the company now expects to lose around $850 million this year from what amounts to a small slice of its total operation. But another strong gain from UnitedHealth’s Optum segment helped push the company’s total net income up to $1.75 billion from $1.59 billion in the previous year’s quarter. (AP)
United 2Q profit falls 51 per cent, revenue down too — Profit at United Airlines was down by half in the second quarter, and the carrier says that the slump in average fares will last through the summer. United Continental Holdings Inc. said Tuesday that it earned $588 million in the April-June period, down from $1.19 billion a year earlier. Excluding one-time items like write-downs, profit was $2.61 per share, 5 cents better than analysts expected. But revenue fell 5.2 per cent, and the airline forecast that revenue per mile will drop again in the third quarter. (AP)
Monsanto rejects Bayer buyout, again — Monsanto on Tuesday rejected a second and richer takeover bid from Bayer. The German drug and chemicals company last week boosted its offer from $62 billion, to about $65 billion, or $125 per share. Monsanto Co., a seed company, called the revised offer inadequate, as it did the initial bid. The St. Louis company said that it remains open to talks with Bayer and others about a deal. Bayer on Tuesday said that it was disappointed with the second rejection. (AP)
Current U.S. Economic Recovery May End Up as Longest Ever “The seven-year-old economic recovery in the U.S. is already the fourth longest since 1850, and the odds of the current expansion breaking the record is not so farfetched. The long road back from the Great Recession began in mid-2009 and July marks the 84th month of recovery. By next February the expansion is likely to move into third place. The expansion can break an all-time record of 120 months if the economy continues to chug along until June 2019 — three years from now.” (MarketWatch)
The Newest Real Estate Investment in Wine? Here’s a Tip “’Where would you invest in vineyard real estate?’ It’s a question I hear surprisingly often and, since I travel extensively to track business developments in the wine industry, I do have access to information that enables and shapes my answer. The ‘short list’ of where I’d personally invest in vineyard land has held steady at precisely two regions for several years now. First is Switzerland — it’s a steep buy-in, certainly, but my bet would be on the long-term domestic wine market, which for historical and cultural reasons consumes nearly everything they produce. Second is Tasmania. I’ve recently added a third region to my list: Idaho.” (Forbes)
New York Investor Adds Victory Park Tower to Dallas Real Estate Portfolio “One of Victory Park's biggest buildings has changed hands. New York investor Clarion Partners bought the 17-story One Victory Park high-rise at Lamar Street and Victory Avenue. The 436,253-square-foot Dallas high-rise was built in 2008 and is 95 percent leased. It's the biggest office building in Victory Park. The building was expected to fetch more than $400 per square foot at sale. Holliday Fenoglio Fowler LP marketed the office tower for sale. Terms of the purchase were not disclosed in county deed records.” (Dallas Morning News)
10 Beach Towns Where Real Estate is a Bargain “Buying a home in a beach town is an expensive proposition, but in some spots there are bargains to be found. Real estate research firm RealtyTrac identified beach towns with fewer than 50,000 residents that had a high quality of life and then investigated which of those were home to the best bargains. The study, released this month, measured the median price of homes in towns relative to prices in other beach towns, as well as the home prices that weren’t too close to their housing-bubble peaks. For quality of life, it looked at good weather and air quality, and a low density of registered criminal offenders.” (MarketWatch)
CBRE Report Cites 25 Straight Quarters of Declines for Industrial Real Estate Availability “When anything occurs for more than 25 quarters, or six years and three months, one can make the argument that whatever is going on for that long is more than a trend. And based on data recently issued by commercial real estate firm CBRE, the trend of industrial real estate becoming harder to occupy due to limited availability, largely due to increasing e-commerce-based demand for warehouse space, remains fully intact.” (Logistics Management)
Look to Washington (State) for Bank Buys “After last week's madness, it was nice to have a quiet weekend before the great rebuild begins this week. A Dumpster is being dropped off this morning and I am looking forward to lots of noise and clutter. It was not a quiet weekend in the news with failed coups, police shootings and vice-presidential madness dominating the airwaves. For a political junkie like me, the GOP convention is going to be high theater and I expect lots of low comedy as well before the week is over. With all the madness swirling around this week, I am just going to keep my head down as the week starts and look for more banks to buy in the nation's most business-friendly states.” (The Street)
J.C. Penney Gets Aggressive in Appliance War with Sears “Mall arch-rivals J.C. Penney JCP and Sears are escalating the hostilities in their battle for consumer spending. Over the weekend, Penney began expanding appliance sales to hundreds of stores, continuing the recent revival of its appliance business after a successful pilot that was first reported by Fortune in January. The department store cut prices aggressively to make sure customers know it once again sells things like fridges and washing machines after a 33-year hiatus.” (Fortune)
Leading Water Company to Build HQ in Camden, NJ “It will be a water company, on the waterfront, in a development named Waterfront. How’s that for staying consistent to a corporate mission? American Water Works Co. Inc., the nation’s largest publicly traded water and wastewater utility company, will build its new corporate headquarters at the Camden Waterfront, a $1 billion, 20-acre master-planned development in Camden, N.J. The location of the LEED Platinum, metal-and-glass building is at One Water Street.” (Commercial Property Executive)
What Stays as the Seagram Building Loses the Four Seasons “Aby J. Rosen would like to remind you that there is more to the Seagram Building than the Four Seasons restaurant. Since 2014, beginning with his removal of ‘Le Tricorne’ by Pablo Picasso, Mr. Rosen has reaped little but headaches from his contentious dealings with preservationists and the proprietors of the Four Seasons over the fate of that celebrated restaurant. It closed on Saturday but is to reopen four blocks away. The Seagram Building goes on, under the ownership of Mr. Rosen and Michael Fuchs, his partner in RFR Holding.” (The New York Times)
AllianceBerntein Pays $100.4M for George Washington Hotel’s Ground Lease “Hail to the (new) chief. New York-based investment firm AllianceBernstein has scooped up a 99-year ground lease for the George Washington Hotel from Lloyd Goldman’s BLDG Management for $100.4 million, property records show. The hotel – which played host to the likes of poet W. H. Auden and novelist Christopher Isherwood in the 1930s – was most recently used as a student dormitory by the School of Visual Arts. In April, Goldman’s firm filed plans to restore the 148,767-square-foot property into a 417-room hotel.” (The Real Deal)