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 Tuesday, the Dow Jones Industrial average gained 40.07 points, or 0.2%, to 17,687.82. The Standard & Poor’s 500 index rose 10.48 points, or 0.5%, to close at 2,051.80. The NASDAQ composite climbed 31.44 points, or 0.7%, to 4,702.44.
Benchmark U.S. crude fell $1.03, or 1.4 per cent, to $74.61. Brent crude, a benchmark for international oils used by many U.S. refineries, fell 84 cents, or 1.1 per cent, to $78.47. Wholesale gasoline added 1.7 cents to $2.043 a gallon. Heating oil dropped 2.3 cents to $2.381 a gallon. Natural gas fell 9.7 cents, or 2.2 per cent, to $4.244 per 1,000 cubic feet.
BLACKSTONE AGREES TO SELL 2nd MOST EXPENSIVE US OFFICE TOWER FOR $2.25 BILLION
NEW YORK CITY—Blackstone Group has agreed to sell a midtown Manhattan office tower for about $2.25 billion, according to the Wall Street Journal. The buyer of the asset, 1095 Ave. of the Americas, is a venture led by Canadian property investor Ivanhoé Cambridge. Brokered by Eastdil Secured, the deal was done at approximately a 4.5% CAP rate, Bloomberg News reports. If completed, the trade of 1095 Ave. of the Americas would be the second-most-expensive sale of a single office building in US history, trailing only the sale of the General Motors building for $2.8 billion in 2008. The sale of the 1.2 million square-foot tower underscores the fact that foreign investors have become the dominant buyers of top-quality real estate within major American cities, the Journal notes. In the past year, foreign investors repeatedly have bought shares of iconic office towers like Time Warner Inc.’s headquarters and 601 Lexington Ave., the former Citicorp Center, as their interest in commercial property—particularly in New York City—grows. Ivanhoé, the real-estate arm of public pension-fund manager Caisse de Dépôt et Placement du Québec, has been a leading foreign investor, buying skyscrapers in Seattle and New York. Its partner on those deals and the 1095 Avenue of the Americas deal is Callahan Capital Partners. For Blackstone, the deal is the private equity giant’s latest move to sell the assets it still holds as a result of its $39 billion leveraged buyout of Sam Zell’s Equity Office Properties Trust in 2007, along with earlier acquisitions in 2006 and 2005.
US HOMEBUILDER SENTIMENT RALLIES IN NOVEMBER
WASHINGTON (AP) — U.S. homebuilders’ confidence rebounded in November as both sales expectations and buyer traffic improved. The National Association of Home Builders/Wells Fargo index rose to 58 this month, up from 54 in October. That puts the index just short of September’s reading of 59, which was the highest level since November 2005, shortly before the housing bubble burst. Readings above 50 indicate more builders view sales conditions as good rather than poor.
HEATING COSTS HEADING UP AS COLD GRIPS NATION
NEW YORK (AP) — The cold is back, and with it, rising heating bills. This winter was expected to bring much lower bills than last year because it wasn’t supposed to be so darn cold. Homeowners could go a little easier on the thermostat, and less fuel use would offset rising prices for natural gas and electricity, which generates heat for 88% of U.S. households. Then, descending from the Arctic, came a block of cold air nearly the size of the entire Lower 48. This month is now on track to be the coldest November since 1996.
JAPAN’S ABE CALLS SNAP ELECTION, PUTS OFF TAX HIKE
TOKYO (AP) — Japan’s Prime Minister Shinzo Abe called a snap election for December and put off a sales tax hike planned for next year, seeking a renewed mandate for his all-or-nothing policies to end two decades of economic stagnation. Despite those policies, the Japanese economy slipped into a recession last quarter after a sales tax increase in April crushed consumer and business spending. That forced Abe to delay the second hike planned for October next year until April 2017. Abe said Tuesday he will dissolve parliament on Friday. He wants an election as soon as possible, which would be mid-December, to seek public approval for his tax decision and for his overall “Abenomics” policies of extreme monetary easing, heavy government spending and economic reforms. The government and the Bank of Japan have pumped hundreds of billions of dollars into the economy in the two years since Abe was elected.
SAFETY AGENCY TO PUSH FOR NATIONAL AIR BAG RECALL
DETROIT (AP) — U.S. safety regulators are demanding that automakers and Takata Corp. expand nationwide a recall of vehicles with certain driver’s side air bags equipped with inflators that can erupt and send metal fragments into the passenger compartment. Previously, cars with the inflators have been recalled only in areas along the Gulf Coast with high humidity. The National Highway Traffic Safety Administration says it’s basing its latest decision on an incident that happened outside of those areas.
BLIGHTED HARVEST DRIVES OLIVE OIL PRICE PRESSURES
BEJA, Portugal (AP) — If your favorite bottle of Mediterranean olive oil starts costing more, blame unseasonable European weather — and tiny insects. High spring temperatures, a cool summer and abundant rain are taking a big bite out of the olive harvest in some key regions of Italy, Spain, France and Portugal. Those conditions have also helped the proliferation of the olive fly and olive moth, which are calamitous blights. The shortfall could translate into higher shelf prices for some olive oils and is dealing another blow to southern Europe’s bruised economies as they limp out of a protracted financial crisis.
TOYOTA TO START SALES OF FUEL CELL CAR NEXT MONTH
TOKYO (AP) — There will only be a few hundred, and they won’t be cheap, but Toyota is about to take its first small step into the unproven market for emissions-free, hydrogen-powered vehicles. The world’s largest automaker announced Tuesday that it will begin selling fuel cell cars in Japan on Dec. 15 and in the U.S. and Europe in mid-2015. The sporty-looking, four-door Toyota Mirai will retail for 6.7 million yen ($57,600) before taxes. Toyota Motor Corp hopes to sell 400 in Japan and 300 in the rest of the world in the first year.
HOME DEPOT TOPS STREET; BREACH COSTS STILL HAZY
ATLANTA (AP) — Home Depot’s third-quarter profit rose 14% as comparable-store sales climbed in the U.S., suggesting that a huge data breach announced exactly two months ago has not shaken the faith of its customers. The nation’s biggest home improvement retailer stuck to its outlook for all of 2014, but said that it could not account for all possible losses from a data breach it revealed in September that affected 56 million debit and credit cards. For now, the company is putting those costs at $28 million pretax for the most recent quarter, and $34 million as it pertains to its guidance for 2014. Home Depot said Monday during a call with investors that it anticipates a fourth-quarter breach-related expense of about $27 million, but only about $6 million after insurance. The company has a $100 million insurance policy for breach-related expenses, according to Chief Financial Officer Carol Tome.
FRACKING PERMITTED IN GEORGE WASHINGTON NATIONAL FOREST
NORFOLK, Va. (AP) — Environmentalists and energy boosters alike welcomed a federal compromise announced Tuesday that will allow fracking in the largest national forest in the eastern United States, but make most of its woods off-limits to drilling. The decision was highly anticipated because about half of the George Washington National Forest sits atop the Marcellus shale formation, a vast underground deposit of natural gas that runs from upstate New York to West Virginia and yields more than $10 billion in gas a year. The federal management plan reverses an outright ban on hydraulic fracturing that the U.S. Forest Service had proposed in 2011 for the 1.1 million-acre forest, which includes the headwaters of the James and Potomac rivers. Those rivers feed the Chesapeake Bay, which is the focus of a multibillion-dollar, multistate restoration directed by the Environmental Protection Agency.
US PRODUCER PRICES RISE 0.2% IN OCTOBER
WASHINGTON (AP) — Inflation picked up in October due to higher prices that U.S. companies received for new model cars, beef, pork, pharmaceuticals and electric power. The producer price index increased 0.2% in October from the previous month, the Labor Department said Tuesday. The index measures the cost of goods and services before they reach the consumer. Prices for many products climbed even as wholesale gas costs plummeted 5.8% last month. Automakers contributed to inflation by introducing 2015 car models, with the Labor Department adjusting its producer prices report each October to address the improved quality. Beef prices jumped 6 per cent and pork prices surged 8.1%.
NOKIA PLOTS COMEBACK WITH ANDROID TABLET
HELSINKI (AP) — Nokia is back in the fray. Just months after selling its ailing handsets business to Microsoft, the Finnish company is planning to go back into the consumer market with a new tablet. The former top mobile phone maker, which has a history of reinventing itself since it began as a paper maker in the 19th century, said Tuesday it will launch a 7.9-inch device early next year in China, the world’s biggest market, before selling it elsewhere.
EL TOUR DE TUCSON THIS WEEKEND
TUCSON - The annual Special Olympics El Tour de Tucson is this Saturday, and volunteers are still needed. The race attracts cyclists from around the world, bringing between $13 million to $18 million into the local economy. So far, El Tour officials say they already have approximately 2,000 volunteers, but they could use several hundred more for the Bike Expo, Thursday and Friday. More information is at the link below. The start and finish line for Saturday's race is located at Armory Park, across the street from Children’s Museum Tucson on South 6th Avenue at 13th Street. Crossing the finish line ushers the riders into the next event - the El Tour Downtown Fiesta. Celebrate with non-stop music, food vendors, children's activities, awards, and more. For Volunteer information email: volunteer@perimeterbicycling.com; El Tour de Tucson https://bit.ly/13EZqxV ; El Tour registration: https://bit.ly/1yZrXrV
PUBLIC MEETINGS CONTINUE ON TUCSON CHARTER CHANGES
TUCSON - Tucson's Charter Review Committee is asking for public comments as it reviews and makes recommendations about possible amendments to sections of the Tucson City Charter. A public meeting will be held at 4 p.m. Thursday at City Hall (255 W. Alameda, 1st floor). Potential amendments to the City Charter may be on the Nov. 3, 2015 City ballot. All comments should be made via email to the City Clerk’s Office, cityclerk@tucsonaz.gov; From tucsonaz.gov: https://1.usa.gov/1ric9Ps; City Clerk's Office: https://1.usa.gov/ZCAmWj
'RIGOLETTO' COMES TO TCC THIS WEEKEND
TUCSON - Arizona Opera returns to the Tucson Convention Center (TCC) this weekend for two performances of "Rigoletto." A court jester isn’t quite so funny when he has revenge on his mind. With unforgettable arias that are synonymous with Italian opera and a dramatic, twisting plot, Rigoletto features dark assassins, a philandering duke and the self-sacrificing Gilda. The production, set in 16th century Mantua, features baritone Michael Corvino as Rigoletto. Performances are Saturday (7:30-9:30 p.m.) and Sunday (2-3:30 p.m.) at the TCC Music Hall. Tickets are available at the TCC Ticket Office (link below). TCC website: https://1.usa.gov/1kJJBs2; TCC Ticket Office: https://1.usa.gov/1wNISfZ ; Arizona Opera: https://bit.ly/1vrFOZt
GOVERNOR ELECT DUCEY SAYS BUDGET IS PRIORITY FOR ARIZONA
PHOENIX – Doug Ducey said Monday the budget will quickly become his top priority when he takes office as governor, including what to do about a lawsuit that’s left the state owing more than $300 million to schools, the Cronkite News Service reports. That includes being open to reaching a settlement in the school-funding suit, he said. “I’d certainly rather be paying teachers than be paying lawyers,” Ducey said after volunteering at the Society of St. Vincent de Paul. “So I would like to settle the lawsuit, but the election is over now so we’re looking at the budget and making that a top priority.” After serving meals to dozens of homeless people, Ducey said he and his team will form a budget study committee before he takes office. “I want to see a budget that’s structurally sound,” he said. “The specifics of that are going to be talked about in our inaugural address.”
The lawsuit stems from Proposition 301, which in 2000 created an extra 0.6% sales tax earmarked for education. It also required the Legislature to increase the base level school funding with inflation, something lawmakers stopped doing in 2010. The state Supreme Court ordered the base-level funding reset to the level it should be at had it been adjusted every year. In all, the state could wind up paying nearly $1.6 billion. That uncertainty adds to forecasts of bleak state finances and tough choices facing the next governor and lawmakers.
Ducey said he’s putting together a transition team that will help him with the budget and other decisions, like what may happen with President Barack Obama possibly using an executive order on immigration reform. He said Obama should demonstrate leadership on immigration by working with the incoming Congress, in which Republicans have majorities in both houses. “I would call on the president to demonstrate leadership first by securing our borders and work with elected leaders on a step-by-step process for proper immigration reform.”
Asked what he wants in terms of immigration reform, Ducey said, “We are a nation of immigrants, but we’re also a nation of laws.” Ducey talked with reporters after working at the Society of St. Vincent de Paul to promote Serving Arizona, a campaign in which he’s encouraging Arizonans to volunteer. “We want to highlight those who we can help,” Ducey said. “I really believe there’s so many of us that can do more and that everyone can be a part of this, whether it’s providing food or clothing or a few extra dollars.” To read full story click here.