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.
Tuesday, the Dow Jones industrial average added 13.76 points, or 0.1%, to 16,790.19. The Standard & Poor’s 500 index lost 7.13 points, or 0.4%, to 1,979.92. The NASDAQ composite fell 32.90 points, or 0.7%, to 4,748.36.
U.S. benchmark crude jumped $2.27, or 5 per cent, to close at $48.53 a barrel on the New York Mercantile Exchange. Brent Crude, a benchmark for international oils used by many U.S. refineries, rose $2.67, or 5 per cent, to $51.92 a barrel in London. Wholesale gasoline rose 5.1 cents to close at $1.436 a gallon. Heating oil rose 6.3 cents to close at $1.612 a gallon. Natural gas rose 2 cents to close at $2.47 per 1,000 cubic feet.
MetLife Takes Majority Stake in New San Francisco Office Tower “MetLife Inc. is taking a majority stake in a 43-story office tower being built next to San Francisco’s Transbay Transit Center, expanding the biggest U.S. life insurer’s holdings in one of the country’s most expensive office markets. MetLife formed a joint venture with Chicago-based John Buck Co. and Golub & Co. for the property, called Park Tower at Transbay.” (Bloomberg)
5 Reasons American Apparel is Now Bankrupt “Once a successful retailer that had hipsters everywhere wearing disco pants and crop tops, American Apparel Inc. filed for Chapter 11 bankruptcy protection on Monday after years of decline. How did the successful retailer end up so deep in the doldrums? Here are five reasons.” (MarketWatch)
New York REIT Lands $325M Financing for 1440 Broadway “Almost two years after entering contract to acquire 1440 Broadway, New York REIT closed on $325 million in financing for the Midtown office building. The real estate investment trust bought the 25-story, 756,000-square-foot property, located near Times Square, from the Rockpoint Group and Monday Properties for $528.7 million in 2013, as The Real Deal reported.” (The Real Deal)
Green Street Says REITs Are Cheap “Green Street recently released a report that suggests real estate investment trusts, or REITs, are around 15% cheaper than what an investor would pay for individual properties. And, thus, there's likely to be a consolidation phase. That sits well with previous comments from industry veterans like Sam Zell who believe that small REITs won't be able to compete and will be swallowed up by larger ones. Does that mean it's time for you to buy?” (Seeking Alpha)
Is Student Housing Still a Niche Market? “Rewind to a decade ago and major REITs would have quickly dismissed student housing as a small niche market with minimal investment potential. The concept of purpose built student housing was almost exclusive to on-campus housing; aside from a few early adopters who helped usher in a new era of student focused accommodations. However, in 2015, the student housing sector has seemingly outgrown its status as a small niche market.” (Multifamily Insiders)
Exclusive: Q&A With Real Estate Legend Laurence Geller “In June, lodging and hospitality visionary Laurence Geller (whom we snapped in his Chicago office at 625 N Michigan Ave) cut a deal with billionaire Sam Zell to buy the Waldorf Astoria Chicago for $112M. The record acquisition was his second announced deal since stepping down as president and CEO of Strategic Hotels & Resorts in 2012. At his new firm, Geller Investments, he's also teaming with Conrad Hotels & Resorts to build a 290-room Conrad hotel in a former office building at 101 E Erie.” (Bisnow)
Student Loan Debt, Homeownership and Millennials. It’s Complicated. “Freddie Mac says that many theories have been advanced for the slower-than-average entry of Millennials into homeownership. Some analysts argue that the reduced employment opportunities at what should have been the start of their careers delayed and perhaps permanently reduced their career development and wealth building while others attribute it instead to the generation's different attitudes towards marriage, family, and renting than their predecessors.” (Mortgage News Daily)
The Secret Sauce That Makes This REIT So Sweet “Recently, I have begun to use the weighted-average cost of capital (WACC) metric to provide differentiation related to REIT profitability. LTC’s WACC offers compelling value, especially as it relates to LTC’s development pipeline that generates wide profit margins. Now you know the ingredients that make this REIT so sweet!” (Seeking Alpha)
Haggen Selling 26 Stores to Smart & Final “The bankrupt Haggen supermarket chain is following through on its promise to unload some of its California locations as the company looks to refocus its operations on 37 stores in the Pacific Northwest. Haggen announced Monday that it has entered into an agreement with Smart & Final Stores Inc. for it to acquire 28 store leases and related assets from affiliates of Haggen Holdings for $56 million.” (Chain Store Age)
To Energize Sales, Best Buys Will Open Shops Within Macy’s “Consumers hoping to snag the latest Skullcandy headphones, Pebble smartwatch or Samsung tablet will soon find them at a handful of Macy's stores. Beginning next month, the department-store chain will host 300-square-foot shops from Best Buy in 10 of its stores—one or two of which will be in the New York metro area—as a pilot program designed to spur sales, which have been sluggish for both retail giants.” (Crain’s New York Business)
Ex-UN General Assembly head among 6 held in bribery scheme — A former president of the United Nations General Assembly turned the world body into a “platform for profit” by accepting over $1 million in bribes and a trip to New Orleans from a billionaire Chinese real estate mogul and other businesspeople to pave the way for lucrative investments, a prosecutor charged Tuesday. John Ashe, a former U.N. ambassador from Antigua and Barbuda who served in the largely ceremonial post as head of the 193-nation assembly from September 2013 to September 2014, faces tax fraud charges in what authorities call a conspiracy with five others, including Francis Lorenzo, a deputy U.N. ambassador from the Dominican Republic who lives in the Bronx.
US trade deficit widens to $48.3 billion in August — The U.S. trade deficit jumped sharply in August as exports fell to the lowest level in nearly three years while imports increased, led by a surge in shipments of cellphones from China. The deficit increased 15.6% to $48.3 billion, the biggest deficit since March, the Commerce Department reported Tuesday. Exports of goods and services dropped 2% to $185.1 billion, the lowest level since October 2012. Imports rose 1.2% to $233.4 billion.
For Volkswagen, costs of scandal will be piling up — For Volkswagen, the cost of its cheating on emissions tests in the U.S. is likely to run into the tens of billions of dollars and prematurely end its long-sought status as the world’s biggest carmaker. As well as fines from governments, Volkswagen faces the massive expense of recalling up to 11 million cars globally. Already the company has set aside 6.5 billion euros ($7.3 billion) to cover the fines and recalls — but it’s a fair bet that’s only the start. Some experts estimate the bill could ultimately be five times as large.