Real Estate Daily News Buzz – March 25, 2015

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.

Tuesday, the Dow slipped 104.90 points, or 0.6%, to 18,011.14. The Standard & Poor’s 500 index fell 12.92 points, or 0.6%, to 2,091.50 Tuesday. The NASDAQ composite fell 16.25 points, or 0.3%, to 4,994.73.

Benchmark U.S. crude rose 6 cents to close at $47.51 a barrel in New York. Brent crude, a benchmark for international oils used by many U.S. refineries, fell 81 cents to close at $55.11 in London. Wholesale gasoline fell 0.4 cent to close at $1.800 a gallon. Heating oil fell 2.4 cents to close at $1.707 a gallon. Natural gas rose 5.3 cents to close at $2.786 per 1,000 cubic feet.

FRESH & EASY TO CLOSE 50 STORES – 5 IN METRO PHOENIX
LOS ANGELES— Fresh & Easy is closing about 50 stores in California, Arizona and Nevada in the coming weeks as the grocery chain pursues a new business model. The company said Sunday that by selling the stores, it can invest in new fresh food convenience stores. Five of Arizona’s stores will be closed by the end of the month. Los Angeles-based The Yucaipa Cos. bought the chain out of bankruptcy in 2013 from British retailer Tesco. Since that time, the company gradually changed the stores' look and introduced a new "click and collect" service in Las Vegas that allows shoppers to buy online and pick up the purchased items at the store. Fresh & Easy said the service will serve as a test for a wider rollout. Todd Folger with CBRE in Phoenix has the listing assignment for these properties.

HIGHER GAS COSTS LIFT US CONSUMER PRICES AFTER 3 DECLINES
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2% in February on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index was unchanged before seasonal adjustment. The seasonally adjusted increase in the all items index was broad-based, with increases in shelter, energy, and food indexes all contributing. The energy index rose after a long series of declines, increasing 1.0% as the gasoline index turned up after falling in recent months. The food index, unchanged last month, also rose in February, though major grocery store food group indexes were mixed. The index for all items less food and energy rose 0.2% in February, the same increase as in January. In addition to shelter, the indexes for used cars and trucks, apparel, new vehicles, tobacco, and airline fares were among those that increased. The medical care index was unchanged, while the personal care index declined. The all items index was unchanged over the past 12 months, after showing a 0.1% decline for the 12 months ending January. Over the last 12 months the food index rose 3.0% and the index for all items less food and energy increased 1.7%. These increases were offset by an 18.8% decline in the energy index.

US NEW HOME SALES SURGE IN FEBRUARY
WASHINGTON (AP) — Sales of new U.S. homes in February climbed to their fastest pace in seven years, as an otherwise dormant housing market showed fresh signs of life. The Commerce Department said Tuesday that new-home sales shot up 7.8% last month to a seasonally adjusted annual rate of 539,000, the strongest performance since February 2008. January sales were revised up nearly 4% to a rate of 500,000.

FREDDIE MAC SELLING $1 BILLION OF HOME LOANS
(Bloomberg) -- Freddie Mac is selling more than $1 billion of soured U.S. home loans in its largest sale of the debt. Potential buyers are bidding on three pools of nonperforming loans, with unpaid principal balances of about $660 million, $249 million and $125 million, according to debt broker Mission Capital Advisors. Homes tied to loans in the smallest group are all located in New York, while properties linked to the other two pools are geographically dispersed. Offers are due March 24. The offering is the government-backed mortgage company’s third large sale of delinquent home loans. Freddie Mac has been accelerating auctions of soured mortgages, bought from bonds guaranteed by the McLean, Virginia-based company that went bad after the housing crash. Demand has been increasing as Wall Street firms compete to buy the loans at a discount after a real estate market rebound. Rising home values have prompted bidders for the loans to raise their offers, pushing up the prices of the debt and driving lenders such as Bank of America Corp., JPMorgan Chase & Co. and Citigroup Inc. to accelerate their sales of delinquent loans this year. “The loans involved in this transaction are deeply delinquent, including a large share that are more than two years delinquent,” Thomas Fitzgerald, a Freddie Mac spokesman, said in an e-mail. He wouldn’t comment on the size of the pools being sold.

U.S. REP. McSALLY INTRODUCES FIRST BILL TO STOP CARTEL “SPOTTERS”
WASHINGTON, D.C. – U.S. Representative Martha McSally today introduced her first legislation of the 114th Congress, a bill to increase penalties for drug spotters operating along our border. The bill follows Rep. McSally’s continued efforts since taking office three months ago to improve border security, which include co-introducing legislation to improve our border strategy and hosting over 20 Members of Congress along the Southern Arizona border. “Since taking office, I’ve made it a top priority to improve our border strategy and make our communities safer, and that’s exactly what this legislation will do,” said Rep. McSally (R-AZ). “During multiple trips to the border, I’ve seen where these spotters operate from and heard frustrations from ranchers and Border Patrol about the lack of consequences and penalties spotters face. Stricter penalties will prevent experienced spotters who are caught from quickly returning to action and deter many others from joining a criminal cartel operation, degrading their ability to circumvent our border controls.” The Transnational Criminal Organization Illicit Spotter Prevention and Elimination Act would increase penalties for transmitting information about the position or surveillance efforts of Border Patrol or destroying United States border controls by increasing fines and imposing a maximum prison time of 10 years. Arizona Senator John McCain today introduced identical companion legislation in the Senate. “All across southern Arizona, so-called ‘spotters’ can be seen sitting on mountains directing drug cartels and human traffickers as they attempt to skirt our laws and illegally cross over the U.S.-Mexico border.” said Senator McCain (R-AZ). “Our legislation would help to dismantle a central part of these cartels’ communications and logistics networks by providing enhanced penalties for spotters. I thank Congresswoman McSally for her leadership on this issue in the House and am pleased to be working together to secure the border and protect Arizona communities.” “Stopping traffickers takes a multifaceted approach that involves degrading their ability to move and communicate,” said Tucson Sector Border Patrol Chief Manuel Padilla Jr. “We need to make sure that after we catch them, spotters don’t end up right back at their posts, and this bill makes the positive step of helping stop and deter these activities.” Arizona Representatives Trent Franks (R-AZ), Kyrsten Sinema (D-AZ), Paul Gosar (R-AZ), David Schweikert (R-AZ), and Matt Salmon (R-AZ) joined as original cosponsors of the legislation. The full bill text can be found HERE.

BROADWAY WIDENING PROJECT TASK FORCE SUFFERS MELTDOWN
The Tucson Weekly is reporting, the Broadway Boulevard Project suffered a meltdown last week, when several members of its Citizens Task Force finally revolted. At the packed meeting on March 19, they railed against being hoodwinked by city transportation planners, who had diligently gathered their suggestions over more than two years, and then just as earnestly cast those recommendations aside. Even worse, city officials had simply designed the six-lane roadway they wanted, and then pretended that it had come from the citizens group. Task force team member Colby Henley sparked the insurrection, as he rifled through a duplicitous paper trail stacked across the conference table before him. He pulled out one transportation department memo pledging that city planners would honor the task force’s call for two dedicated mass-transit lanes in the final Broadway widening plan. He hoisted another transportation memo to Tucson’s Mayor and City Council pledging the same thing. “But somewhere between the mayor and council and the (Regional Transportation Authority) briefings, that changed,” said Henley. “It was out of the sight of the public, and I still have not received an answer about when and who changed that.” It turns out that city staffers quietly ditched the transit-lanes option when presenting their six-lane plan to the Regional Transportation Authority. (The RTA oversees funding for this and other projects under a sweeping road plan approved by voters in 2006. The agency has repeatedly demanded that Broadway be transformed into the car-dominated behemoth mandated by voters nearly 10 years ago, and based on faulty traffic projections concocted nearly 20 years before that.) Full story click here.

HIGH NURSING HOME BILLS SQUEEZE INSURERS, DRIVING RATES UP
NEW YORK (AP) — Thirty years ago, insurance companies had the answer to the soaring cost of caring for the elderly. Plan ahead and buy a policy that will cover your expenses. Now, there’s a new problem: Even insurers think it’s unaffordable. Life insurance firms pitched long-term care policies as the prudent way for Americans to shoulder the cost of staying in nursing homes. But those same companies have found that long-term-care policies are squeezing their profits. Earnings for life insurers slid 11 per cent in the most recent quarter, according to Moody’s Investors Service, and long-term care was the chief culprit.

AmEx TROUBLES: CARDHOLDERS CAN LEAVE HOME WITHOUT IT
NEW YORK (AP) — For decades, American Express was the undisputed credit card of choice among corporate road warriors, the wealthy and the well-travelled, who lived by the company’s slogan, “Don’t leave home without it.” But changing consumer habits, extremely aggressive competition and increased pushback from its merchants are putting heavy pressure on AmEx. Rivals are trying to steal away business and are succeeding in some cases. Costco, for example, is ending its 15-year relationship with AmEx and defecting to Citigroup and Visa starting next March. And airlines that used to give VIP lounge access to AmEx cardholders have been switching in recent years to other credit card companies.

GOOGLE IMPORTS NEW CFO RUTH PORAT FROM WALL STREET
SAN FRANCISCO (AP) — Google has lured away Morgan Stanley’s chief financial officer, Ruth Porat, to be its CFO at a time when the Internet search leader and its Silicon Valley peers are under fire for hiring and promoting too few women. The appointment announced Tuesday fills a void that opened earlier this month after Google’s CFO of the past seven years, Patrick Pichette, announced his plans to retire. Porat, 58, will become Google’s highest-ranking female executive when she starts her new job on May 26. Her last day at Morgan Stanley will be April 30, ending a 28-year career at the New York investment bank.

WOULD YOU PAY TO WATCH VIDEO CLIPS ONLINE?
SAN FRANCISCO (AP) — Would you pay to see some of the Internet’s best video clips first? Vessel, a new service trying to change the way that short video pieces make money on the Internet and mobile devices, is betting on it. Instead of free-for-all distribution supported solely by advertising, Vessel will charge $3 per month for exclusive early access to clips of musicians, sporting events, comedians and many other forms of entertainment not available on YouTube or any other digital video service for at least three days. CEO Jason Kilar, formerly head of Hulu Plus, believes Vessel’s model will be able to pay video producers about $50 per 1,000 views of their clips on the site. That compares with just $2.20 per 1,000 views of ad-supported video at sites such as YouTube, Kilar says.

TACO BELL’S WAFFLE TACO IS DEAD, BISCUIT TACO TO REPLACE
NEW YORK (AP) — The newest weapon in the breakfast wars is a biscuit shaped like a taco. Taco Bell is launching a “biscuit taco” this week and ditching its “waffle taco,” which got widespread attention last year when it was included in the rollout of the chain’s breakfast menu. The swap comes as the chain tries to build on its year-old breakfast business by once again going after the dominant player in the mornings: McDonald’s.

BRITISH POUND’S SWINGS CAUSE UNCERTAINTY FOR BUSINESS
LONDON (AP) — The British pound is getting caught between the dollar’s surge and the euro’s slump, and its swings are shaking things up for business just as uncertainty grows over a potentially tight general election. Caught in the crossfire of developments in the United States and the 19-country eurozone, the pound has dropped to a 5-year low against the dollar but pushed to a seven-year high against the euro. Against the dollar, it is trading below $1.50, its lowest since 2010, largely due to expectations that the Federal Reserve will start raising interest rates this year. Higher rates tend to bolster a currency’s value.

MALE NURSES SCARCE BUT MAKE MORE MONEY THE WOMEN RNs
CHICAGO (AP) — Even in an occupation that women overwhelmingly dominate, they still earn less than men, a study of nurses found. The gender gap for registered nurses’ salaries amounts to a little over $5,000 yearly on average and it hasn’t budged in more than 20 years. That pay gap may not sound big — it’s smaller than in many other professions — but over a long career, it adds up to more than $150,000, said study author Ulrike Muench, a professor and researcher at the University of California, San Francisco.

MEXICO’S BAJA FARMWORKERS STRIKE FOR BETTER CONDITIONS
SAN QUINTIN, Mexico (AP) — Workers at large, export-oriented farms in the Mexican border state of Baja California have led a week of violent protests over low pay, abuses and poor conditions, threatening a harvest that supplies millions of dollars’ worth of tomatoes, strawberries and other crops to the United States. Burning tires and tossing rocks at vehicles, hundreds of farmworkers have blocked Baja’s main north-south highway on and off, and as many as 50,000 are believed to be on strike statewide as of Tuesday. Their demands — health care, overtime pay, days off, an end to abuse by field bosses and more pay than the $8 many earn for a full day of stoop-labor — echo those of farmworkers 40 years ago in the United States.