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.
The S&P 500 dipped 3.54 points, or 0.1 percent, to close at 2,390.90, part of a 0.3 percent loss for the week. The Dow Jones industrial average fell 22.81 points, or 0.1 percent, to 20,896.61, and the Nasdaq composite rose 5.27 points, or 0.1 percent, to 6,121.23.
Benchmark U.S. crude oil rose a penny to settle at $47.84 a barrel. Brent crude, the international standard, rose 7 cents to $50.84 a barrel. Natural gas rose 5 cents to $3.42 per 1,000 cubic feet, heating oil was close to flat at $1.49 per gallon and wholesale gasoline rose a penny to $1.58 per gallon.
S&P 500 index slips, posts its first down week in a month — Shares of department stores sank again Friday, hurt by more evidence that shoppers are turning away from them. A drop in Treasury yields also put pressure on bank stocks, and the weakness helped pull the Standard & Poor's 500 index down modestly. The S&P 500 had its first down week in the last four, though it remains close to its record.
Lawyers: Wells Fargo created about 3.5 million fake accounts — Lawyers suing Wells Fargo say the bank may have opened about 3.5 million unauthorized accounts. That's far more than the about 2 million possibly unauthorized accounts than the bank and regulators disclosed last year. A bank spokesman said the lawyers' new estimation was unverified and based on a hypothetical scenario.
China and US reach agreement on beef, poultry, natural gas — China will finally open its borders to U.S. beef while cooked Chinese poultry is closer to hitting American supermarket shelves as part of a trade agreement. U.S. companies would also be allowed to ship liquefied natural gas to China as part of the agreement.
US prepares to ban laptops on flights from Europe — The U.S. is expected to broaden its ban on in-flight laptops and tablets to include planes from the European Union, a move that would create logistical chaos on the world's busiest corridor of air travel. Alarmed at the proposal, which airline officials say is merely a matter of timing, European governments held urgent talks Friday with the U.S. Department of Homeland Security.
Anthem gives up Cigna bid, vows to fight on over damages — Anthem is finally ending its soured, $48 billion bid to buy rival Cigna, but the nation's second-largest health insurer isn't giving up a fight over whether Cigna deserves a termination fee for the scrapped deal. Anthem says Cigna sabotaged the merger agreement and caused "massive damages" for Anthem, which provides Blue Cross-Blue Shield coverage in several states.
US Treasury chief to brief key allies on Trump policies — Top finance officials from seven advanced economies have gathered to hear more about U.S. President Donald Trump's economic policies on taxation and trade as well as to look for ways to promote growth, combat terrorist financing and stop tax avoidance by major corporations. The meeting of the Group of 7 finance ministers in the southern Italian seaside town of Bari kicked off Friday with a discussion with economists on how to make growth benefit more people. Treasury Secretary Steven Mnuchin was due to explain Trump's plans to cut business taxes and regulation, as well as the president's push for what he considers more balanced trading relationships.
Apple to invest $200 million in scratch-resistant glass — Apple says it will invest $200 million in a rural Kentucky facility that it credits with rescuing the company's signature smartphone from a design flaw that would have led to scratched screens. The California-based company announced Friday it would give the money to Corning Inc. to use at its facility in Harrodsburg, Kentucky.
Elon Musk posts video of 'electric sled' for tunnel travel — Billionaire entrepreneur Elon Musk on Friday posted video on social media of what he describes as an electric sled speeding through a tunnel, a test of a system he envisions for 3-D networks of underground passages for speeding traffic under Los Angeles' congested roads. He posted on Twitter and Instagram that such sleds could transport cars at 125 mph (200 kmh), with automatic switching from one tunnel to the next.
GGP explores options, including dispositions, stock buybacks -“Nothing is sacred,” General Growth Partner (GGP) chief Sandeep Mathrani told financial analysts on a first-quarter earnings call, explaining that the company is exploring its options. Generating returns for GGP shareholders may involve a number of strategies, Mathrani said, ranging from selling a trophy property to buying back shares. About 80 percent of the firm’s net operating income comes from such trophy properties as Ala Moana Center, in Honolulu, and Fashion Show Mall, in Las Vegas. These class-A properties are growing at about 4 percent annually, he said. “ ‘A’ assets trade from [the] mid-3s to low-4s — you do the math,” Mathrani said. “The breakup value is far in excess of where we trade today. We’re evaluating all alternatives, and we will pick a path in the near term by looking at assets on both ends of the quality spectrum.” The company is pursuing similar actions throughout its portfolio, which comprises 65 million square feet of anchor space, 17 million square feet of which it owns, Mathrani says.
Fannie and Freddie Are Nearly Out of Money and D.C. Is Getting Anxious “In 2008, as the financial crisis swirled, the federal government rushed Fannie Mae and Freddie Mac into conservatorship. The two giant mortgage-finance companies became wards of the state under a new regulator that would manage their affairs until they were healthy enough to stand on their own. Nearly nine years later, they’re still under government control. And while in some ways their crisis has receded, in other—and what some would call self-inflicted—ways, Fannie and Freddie still teeter on the edge of needing another taxpayer bailout.” (MarketWatch)
How Sephora Is Thriving Amid a Retail Crisis “.Much has been written about the crisis in retail, with shoppers deserting department stores for e-tailers and fast fashion, if they shop at all. The beauty business, though, has not had the same fate. Prestige beauty sales in the United States rose 6 percent in the 12 months ending in February, tallying $15.9 billion, according to the market research company NPD Group. Makeup alone is up 11 percent, totaling $7.3 billion. But that industry, too, is in the midst of its own upheaval, driven in part by the success of stores such as Sephora.” (The New York Times)
Eight Ways for New Investors to Succeed in Today’s Real Estate Market “Investing in real estate is an increasingly popular way for entrepreneurial-minded individuals to diversify their portfolios and earn income. It's not the easiest endeavor, and like any investment, it requires plenty of research and due diligence to make it work. But when done correctly, real estate can be an incredibly lucrative business opportunity. If you're new to the real estate market or are thinking about making your first investment, now is the time to get a jump on learning the latest industry trends.” (Forbes)
Related Nearing Deal for $2.5B Financing Package at 50 Hudson Yards: Report “Related Companies, which is developing what’s slated to be New York’s most expensive office building at 50 Hudson Yards, is in advanced talks to secure a $2.5 billion financing package for the property, The Real Deal has learned. The financing would include a roughly $700 million equity injection and a $1.8 billion senior loan from a syndicate of banks, sources familiar with the discussions said. The loan, if it closes, would be among the largest-ever construction loans for an office tower.” (The Real Deal)
Prices for Luxury Condos Under Pressure in Top U.S. Housing Markets “Want to bask in the luxury condo lifestyle? Know your real estate markets, as sales of luxury condos are a mixed bag right now. From Miami To Los Angeles and New York to San Francisco with a stop in Chicago, take an in-depth look at the luxury condo markets in these five U.S. cities. A stronger U.S. dollar is good for our economy, but is partly to blame for slowing sales of high-end condos by international buyers. With more inventory on the market, buyers are requesting (and getting) lower-than-asking prices from sellers.” (MarketWatch)
Sears Stock Crashes a Day After its CEO Goes on a Bizarre Rant Against the Media “Shares of the dying owner of Sears and Kmart plummeted as much as 8.5 percent to $10.32 in afternoon trading Thursday. In part, the sell-off in Sears' stock could be tied to a nasty first quarter earnings miss from fellow mall player Macy's. Given Macy's struggles to kick off the year, investors may now be concerned Sears' sales got even worse from when it provided guidance in late April.” (The Street)
REITs vs. Private Real Estate “Both have their own advantages and disadvantages, and how I see it, both may deserve a place in a well-diversified portfolio. Coming myself from a private equity real estate background, I have a certain insider view to this topic that may add value to other comparisons found online. There are very valid arguments for investing in private real estate over REITs. These include a greater control over the assets, potential tax benefits and a lower correlation to other financial assets.” (Seeking Alpha)
HTA Grabs Multi-State MOB Portfolio for $150M “Already the largest owner and operator of medical office buildings in the U.S., Healthcare Trust added 592,000 square feet of space in Arizona and Southern California. The portfolio consists of the 168,000-square-foot McAuley Medical Center, located within the St. Joseph’s Hospital and Medical Center campus in downtown Phoenix and the others are primarily located on Dignity Health (Rated A3) campuses in Phoenix and Southern California.” (Commercial Property Executive)
Young Women’s Apparel Retailer to Open Chicago Flagship “Canada’s Aritzia Inc. is expanding its Chicago footprint as it targets both brick-and-mortar and online expansion. The fashion retailer will open a flagship on Rush Street in Chicago this fall. The Vancouver, British Columbia-based company already operates a store in the Windy City, at Water Tower Place. Aritzia recently made its Los Angeles debut, opening a 10,000 sq.-ft. flagship at Westfield Century City. The company plans to open three to four new stores during the remainder of its fiscal year, including the repositioning of an existing San Francisco location into a flagship on Market Street.” (Chain Store Age)
Lightstone Group Seeks EB-5 Funds for $700M FiDi Condo Project “David Lichtenstein’s Lightstone Group is seeking EB-5 funds for its 228-unit Financial District condominium tower, which will be designed by noted architect David Adjaye and is expected to be valued at $701 million. The developer recently launched a teaser site for the 800-foot building at 130 William Street, which it is calling the Wall Street Tower. On Lightstone’s EB-5 website, the company is seeking $100 million, or 18 percent of the project’s total cost, from investors, and is marketing the project to investors in China and Vietnam.” (The Real Deal)
Global extortion cyberattack hits dozens of nations — A huge extortion cyberattack spread across the world Friday, holding computer data for ransom at hospitals, telecommunications firms and other companies in dozens of countries. The attack appeared to exploit a vulnerability purportedly identified for use by the U.S. National Security Agency and later leaked to the internet. The attack hit Britain's health service, forcing affected hospitals to close wards and emergency rooms. Related attacks were reported in Spain, Portugal and Russia.