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.
On Wednesday, the Dow Jones industrial average fell 292.60 points, or 1.6%, to 17,718.54. The Standard & Poor’s 500 index lost 30.45 points, or 1.5%, to 2,061.05. The NASDAQ composite shed 118.21 points, or 2.4%, to 4,876.52.
Benchmark U.S. crude rose $1.70 to close at $49.21 a barrel in New York. Brent crude, a benchmark for international oils used by many U.S. refineries, rose $1.37 a barrel to close at $56.48 in London. Wholesale gasoline rose 3.7 cents to close at $1.837 a gallon. Heating oil rose 2.1 cents to close at $1.728 a gallon. Natural gas fell 6.3 cents to close at $2.723 per 1,000 cubic feet.
FULL PRICE STORES AND OUTLETS FINDING WAYS TO COEXIST
Retailers facing sluggish sales at particular locations are opting for a lucrative alternative to shutting down: They are converting weak full-price stores to outlets. Among those taking this step are Abercrombie & Fitch, American Eagle Outfitters, Express, Gap, J.Crew and New York & Company, particularly at malls in secondary and tertiary markets. A few years ago Simon’s Towne West Square mall, in Wichita, Kan., lost its full-price Sears store. This month, however, Sears Hometown and Outlet Stores is set to open a 10,000-square-foot store at the mall. The concept gives consumers access to Sears Hometown and hardware merchandise as well as outlet goods the retailer bills as “new, one-of-a-kind, out-of-carton, discontinued, reconditioned, overstocked, and scratched-and-dented products.” At Mills malls, American Eagle Outfitters and Express have already converted all their full-price stores into outlets — 14 stores for American Eagle, and 15 for Express. “Sales in most cases have gone up dramatically,” said Gregg M. Goodman, president of The Mills: A Simon Company. “The customer has responded to the thought that there is a value proposition there for them.” If the only other option is to take a huge write-off by closing the underperforming store, then turning it into an outlet instead is certainly preferable for both the chain and its landlord, according to James McCandless, managing director of Streetsense, a Washington, D.C.–based multidisciplinary design and strategy firm. “Vacancy is the enemy of vibrancy,” he said.
RISING REAL ESTATE VALES HELP RETAILERS RASIE CASH
Rising real-estate values are driving more retail companies to consider splitting off their real-estate assets to generate cash. Late last month, Hudson’s Bay Co., the Canadian parent company of Saks Fifth Avenue and Lord & Taylor department stores, announced a $1.7 billion joint venture with U.S. mall operator Simon Property Group Inc. involving 42 department stores. Hudson’s Bay will retain 80% of the joint venture but will lease its store space back from the company. It plans eventually to split off the venture into a real-estate investment trust. The same month, Sears Holdings Corp. said it would split off as many as 300 of its best locations into a separate company by June to raise money. Activist investors, meanwhile, have pushed for real-estate split-offs at a half-dozen other companies over the last six months, including fast-food chain McDonald’s Corp., department store Dillard’s Inc. and casino operator MGM Resorts International. Full story here https://tinyurl.com/oazbw5z
US DURABLE GOODS ORDERS STUMBLED IN FEBRUARY
WASHINGTON (AP) — Orders to U.S. factories for long-lasting manufactured goods fell in February, the latest installment of disappointing data this quarter that suggests the economy has hit a soft patch. The weaker-than-expected performance is pushing economists to downgrade their growth forecasts for the January-March period. But they blame temporary factors for the slowdown, including severe snowstorms and West Coast port disruptions, and have brighter hopes for the spring.
HJ HEINZ BUYS KRAFT TO BUILD $28 BILLION FOOD GIANT
NEW YORK (AP) — Some of the most familiar names in ketchup, pickles, cheese and hot dogs are set to come under the same roof after H.J. Heinz Co. announced plans Wednesday to buy Kraft and create one of the world’s largest food and beverage companies. The deal would bring together an array of longtime staples in American kitchens, including Oscar Mayer lunchmeats, Jell-O desserts, Miracle Whip spreads, Ore-Ida potatoes and Smart Ones diet foods.
SCIENCE, PATIENTS DRIVING RARE DISEASE DRUG RESEARCGH SURGE
TRENTON, N.J. (AP) — The global pharmaceutical industry is pouring billions of dollars into developing treatments for rare diseases, which once drew little interest from major drugmakers but now point the way toward a new era of innovative therapies and big profits. The investments come as researchers harness recent scientific advances, including the mapping of the human genome, sophisticated and affordable genetic tests and laboratory robots that can screen thousands of compounds per hour in search of the most potent ones.
BOSSES CAN’T GET EVEN WHEN STAFFERS GRIPE ON SOCIAL MEDIA
NEW YORK (AP) — Bosses can get mad when staffers vent on social media about their jobs, but they may not be able to get even. When one of Bert Martinez’ employees posted gripes about her job and the boss on Facebook last year, the publicist consulted his lawyer, who said the staffer couldn’t be fired. The employee quit a week after Martinez learned about the post.
FACEBOOK’S MESSENGER APP ADDING MORE WAYS TO CONNECT
SAN FRANCISCO (AP) — Facebook is trying to mold its Messenger app into a more versatile communications hub as smartphones create new ways for people to connect with friends and businesses beyond the walls of the company’s ubiquitous social network. To pull it off, Facebook Inc. is opening Messenger so outside programmers can build features tailored for the service. By the end of April, Messenger will also be adding the ability to display store receipts and shipping information to help consumers keep track of their interactions with merchants and other businesses.
RUSSIA’S HEAVY DRINKERS TURN TO MOONSHINE, CLEANING PRODUCTS
MOSCOW (AP) — As the economic crisis sweeps through Russia, a dangerous trend is emerging in this heavy-drinking country: the rise in consumption of potentially lethal moonshine, medical alcohol or even cleaning products. Layoffs, wage cuts and price increases are combining to worsen the problem of alcoholism, which has long been a major public health issue, by increasing the mix of dangerous products in the market. Those who can no longer afford store-bought drinks are turning to “under the counter” alternatives that can cause serious damage, even death.
PICKLE BUTTS AND DOG FOOD: CHEF DAN BARBER SHOWS OFF WASTE
NEW YORK (AP) — What’s for dinner? How about leftover cartilage of skate with herring-head tartar sauce, cured tuna blood line aioli or a meat loaf of offal and slightly past-its-prime cow usually reserved for dogs? Those and two dozen other dishes using scraps and usually ignored bits comprise the menu at chef Dan Barber’s WastEDny, a pop-up project at one of his Blue Hill restaurants intended to shed light on the many tragedies of food waste.
JAPAN USES CLIMATE CASH FOR COAL PLANTS IN INDIA, BANGLADESH
MUTTAGI, India (AP) — Despite mounting protests, Japan continues to finance the building of coal-fired power plants with money earmarked for fighting climate change, with two new projects underway in India and Bangladesh, The Associated Press has found. The AP reported in December that Japan had counted $1 billion in loans for coal plants in Indonesia as climate finance, angering critics who say such financing should be going to clean energy like solar and wind power. Japanese officials now say they are also counting $630 million in loans for coal plants in Kudgi, India, and Matarbari, Bangladesh, as climate finance. The Kudgi project has been marred by violent clashes between police and local farmers who fear the plant will pollute the environment.
HOW INVESTIGATORS WILL DETERMINE WHY GERMANWINGS JET CRASHED
NEW YORK (AP) — Cockpit voice recordings and, hopefully, flight data will provide the main clues to investigators trying to understand what caused Germanwings Flight 9525 to crash. But that is just the beginning. Drawing on decades of experience with crashes around the globe, French officials will analyze thousands of pieces of wreckage, maintenance log books and other clues to determine what led the Airbus A320 to crash into a mountain, killing all 150 passengers and crew.
FEDS INVESTIGATE SAFETY OF LUMBER LIQUIDATORS FLOORING
RICHMOND, Va. (AP) — The U.S. Consumer Product Safety Commission said Wednesday it is investigating Lumber Liquidators Chinese-made laminate flooring following a national TV broadcast raised concerns over levels of formaldehyde. Chairman Elliot F. Kaye said Wednesday the agency is taking the issue seriously and is working to get answers for consumers, but it’s too early to tell whether any flooring would be recalled. It’ll likely be months until there will be “some sense of the answers,” he said, and the science “does not often provide the clarity” where consumers will know immediately whether they need to take action.
UNION VOTE SET NEXT MONTH AT BOEING’S SOUTH CAROLINA PLANTS
NORTH CHARLESTON, S.C. (AP) — About 3,000 production workers at Boeing plants in South Carolina will decide next month whether they want representation by the Machinists union. The union announced Tuesday that the Machinists and Boeing have agreed to the National Labor Relations Board conducting a one-day vote April 22 at five locations on the company’s North Charleston campus. The union last week petitioned for an election for production workers at the company’s 787 Dreamliner assembly plant and the nearby Interiors Responsibility Center, which provides interior parts for the 787. The vote also includes production workers at its new propulsion plant.
UK STUDY: WOMEN TO MAKE UP 25% OF BOARDS BY END OF 2015
LONDON (AP) — The percentage of women on the boards of the country’s top companies is on track to meet a target of 25% by the end of the year, a study tracking female achievement said Wednesday. The report from the Cranfield International Center for Women Leaders said that 23.5% of boards of the companies listed on the U.K.’s main stock index, the FTSE 100, are now comprised of women, up from 20.7% last year. Some 263 directorships are held by women.
BILL WOULD CREATE ORGANIC-TYPE LABELS FOR NONMODIFED FOODS
WASHINGTON (AP) — Inspired by the popular “USDA organic” label, House Republicans are proposing a new government certification for foods free of genetically modified ingredients. The idea is part of an attempt to block mandatory labeling of foods that include genetically modified organisms, or GMOs. The certification would be voluntary, says Rep. Mike Pompeo, R-Kan., who is including the idea in legislation he is introducing Wednesday.