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.
Thursday, the Dow Jones industrial average fell 28.97 points, or 0.2 per cent, to 17,930.67. The Standard & Poor’s 500 index lost 9.28 points, or 0.4 per cent, to 2,088.66. The NASDAQ composite lost 47.16 points, or 0.9 per cent, to 5,058.41.
Benchmark U.S. crude slipped 68 cents to $44.66 a barrel in New York. Brent crude, the international standard, fell 51 cents at $46.35 a barrel in London. Heating oil fell 1 cent to $1.45 a gallon, wholesale gasoline fell 2 cents to $1.43 a gallon and natural gas fell 2 cents to $2.769 per 1,000 cubic feet.
Stocks fall for 8th day, longest decline since 2008 crisis — Stocks retreated for an eighth consecutive day on Thursday as nervous investors remain transfixed on the potential outcome of next week’s U.S. presidential election, which has become too close to call. The stock market is now on its longest losing streak since the depths of the 2008 financial crisis. With five days left until the election, Hillary Clinton maintains a lead in national polling in the U.S. presidential race but Donald Trump has significantly narrowed the gap, particularly in swing states. (NEW YORK AP)
Applications for jobless aid hit highest level since August — More Americans applied for unemployment benefits last week, but jobless claims remain at levels that suggest most workers enjoy job security. The Labor Department says claims for unemployment aid rose by 7,000 to a seasonally adjusted 265,000, highest since early August. Still, claims came in below 300,000 for the 87th straight week, longest such streak since 1970 when the workforce was much smaller. The less-volatile four-week average rose 4,750 to 257,750. Overall, 2.03 million Americans are collecting unemployment checks, fewest since June 2000 and down more than 7 per cent from a year earlier. (WASHINGTON AP)
US productivity up at 3.1 per cent rate in third quarter — The productivity of American workers rose in the July-September quarter at the fastest pace in two years, while labor costs slowed. Productivity increased at a 3.1 per cent rate in the third quarter, the Labor Department reported Thursday. It was a significant improvement from the previous three quarters when productivity had fallen. Unit labour costs edged up a modest 0.3 per cent in the third quarter, compared to a 3.9 per cent jump in the second quarter.The productivity figure was the best showing since a 4.2 per cent gain in the third quarter of 2014. But the rebound was expected to be temporary. (WASHINGTON AP)
US factory orders up slight 0.3 per cent in September — Orders to U.S. factories increased a modest amount in September even though a key category that tracks business investment plans fell by the largest amount since February. Factory orders edged up a slight 0.3 per cent in September following a 0.4 per cent advance in August, the Commerce Department reported Thursday. Orders in a category that serves as a proxy for business investment fell 1.3 per cent, reversing a 1.2 per cent increase in August. It was the biggest decline in the investment category since a 2.1 per cent plunge in February. (WASHINGTON AP)
Average US 30-year mortgage rate rises to 3.54 per cent — Long-term U.S. mortgage rates jumped this week, reaching their highest levels since late June amid indications of strength in the economy. Mortgage giant Freddie Mac said Thursday that the average for a 30-year fixed-rate mortgage rose to 3.54 per cent from 3.47 per cent last week. Rates remain near historically low levels, however. The benchmark 30-year rate is down from 3.87 per cent a year ago. Its all-time low was 3.31 per cent in November 2012. The 15-year fixed-rate mortgage, popular with homeowners who are refinancing, increased to 2.84 per cent from 2.78 per cent. (WASHINGTON AP)
Fed Holds Rates and Says It’s Waiting for “Some Further Evidence Before Hiking Again “The Federal Reserve on Wednesday left its benchmark fed funds rate unchanged, as expected, and said the case for a hike continued to strengthen. Most economists had expected that the Federal Open Markets Committee (FOMC) would leave the federal funds rate unchanged. That rate ends up influencing other rates on things like mortgages, and has been in a range of 0.25%-0.50% since last December.” (Business Insider)
Why a Chinese Real Estate Bubble Could Bring Down the Global Economy “While U.S. GDP grew by 2.9% this quarter, trouble is brewing on the other side of the Pacific. Analysts are sounding the alarm about growing Chinese debt loads and a potential real estate bubble that threatens to dramatically slow growth in Asia, and which could be a drag on the entire global economy if it bursts. In September, Ma Jun, the chief economist of the People’s Bank of China’s research bureau, argued that the Chinese government must take action to stamp out real estate speculation.” (Fortune)
American Apparel May Not Make It Through the Holidays “The largest clothing manufacturer in North America is hanging by a thread. American Apparel, less than nine months after emerging from Chapter 11 and losing sales and bleeding cash, has been slashing payroll at its Los Angeles factory — but it may not be enough to keep it afloat through the holidays. Working with a restructuring expert, the company, famous for its provocative ads and Made in the USA apparel, has had talks with licensing firms and could agree to be sold in a deal that would precipitate another trip through bankruptcy court.” (New York Post)
The Restaurant Recession Has Arrived “Restaurant companies should brace for a challenging period as consumers grapple with the rising costs of rent, prescriptions and car loans and take advantage of cheaper groceries to eat at home more. That’s the verdict of Moody’s Investors Service, which on Tuesday slashed its operating-profit growth forecast for the restaurant sector and revised its outlook to stable from positive. The ratings agency is now expecting operating profit to grow 2% to 4% in the next 12 to 18 months, down from a previous forecast of growth of 5% to 6%.” (MarketWatch)
CBMS Worries: Delinquency Declines May Reverse “Although the CMBS delinquency rate continues to steadily improve, the industry is bracing for the impact of the large number of loans originated at the height of the last bubble that will be maturing over the next year. Roughly $126 billion of CMBS 1.0 loans are still outstanding, and just over $105 billion have a maturity date through 2017, according to Trepp, a New York-based research and analytics firm. These loans have to be refinanced at a time when lenders are adhering to stricter standards that include lower loan-to-value ratios, which will make it difficult for a number of those loans to be refinanced without some sort of recapitalization.” (Commercial Property Executive)
Q3 Commercial, Multifamily Mortgage Originations Up 2 Percent Annually in the U.S. “According to the Mortgage Bankers Association's latest Quarterly Survey of Commercial and Multifamily Mortgage Bankers Originations, commercial and multifamily mortgage loan originations for the first nine months of 2016 increased 2 percent compared to the same period last year. Third quarter 2016 commercial and multifamily mortgage loan originations were 5 percent higher than the third quarter of 2015 and seven percent higher than the second quarter of 2016.” (World Property Journal)
How Marijuana Legalization Is Ultimately a Real Estate Story—and What That Means for California “Legalized marijuana doesn’t just benefit cannabis advocates, though. It can also be good stuff for commercial real estate players — specifically, those who get in on the action in the industrial sector early enough to buy, finance or lease out warehouses that can be used for marijuana. (See examples below and here for data about California warehouses.) What happens after marijuana is legalized is very much a real estate story.” (Forbes)
Mall of America is Stepping Up its Digital Game with Virtual Realty, Robots “It is hard to convey the spectacle that is Mall of America in a PowerPoint presentation. Yet until recently, that is what its tourism staff had to do when speaking at conferences. Now, the staff can take people on a three-minute virtual reality experience that includes the Ferris wheel in Nickelodeon Universe, the 300-foot ocean tunnel in Sea Life Minnesota Aquarium, a view of the swanky Cedar + Stone restaurant in the new J.W. Marriott, the mall’s atrium and its endless corridors of stores.” (Chicago Tribune)
Schneiderman Announces $20M for Land Banks to Combat Blighted Properties “Efforts to combat vacant and blighted properties around New York state are getting a $20 million boost. State Attorney General Eric Schneiderman says Wednesday $20 million in new funds will be committed for community land banks, which acquire and rehabilitate vacant buildings. The money comes from state legal settlements with Morgan Stanley and Goldman Sachs over banking practices that contributed to the housing and foreclosure crisis. It comes on top of $33 million Schneiderman's office has already invested in land banks in the past three years.” (Crain’s New York Business)
GE @ The Banks Sells for $107M in Cincinnati “London-based 90 North Real Estate Partners has snapped up a minority stake in General Electric @ The Banks, the 338,000-square-foot office tower that serves as home to General Electric’s Global Operations Center, at The Banks master-planned community in downtown Cincinnati. 90 North and Kuwait-based majority partner Kamco Investment Co. acquired the trophy property from Carter, developer of The Banks, for $107 million.” (Commercial Property Executive)
Fannie Mae posts $3.2B profit in 3Q; paying $3B dividend — Mortgage giant Fannie Mae reported net income of $3.2 billion from July through September, up from $2 billion a year earlier, as its losses declined on investments it uses to hedge against interest rate swings.
The third-quarter results released Thursday marked the 19th straight profitable quarter for the government-controlled company. Washington-based Fannie Mae said it will pay a dividend of $3 billion to the U.S. Treasury next month. With that payment, Fannie will have paid a total $154.4 billion in dividends. (WASHINGTON AP)
SEC probes Wells Fargo, bank ups legal reserves fund — Wells Fargo has confirmed that the Securities and Exchange Commission is investigating its sales practices, and revealed that the bank has almost doubled funds set aside to deal with legal problems. The bank said in a regulatory filing Thursday that the SEC has joined numerous other agencies and states with ongoing probes. That’s on top of class-action lawsuits filed against the bank by investors, its former employees and customers. Wells Fargo has been under fire since it was learned that employees, pushed to the limit by lofty sales goals, opened as many as 2 million bank and credit card accounts without customer authorization. NEW YORK (AP)