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 Standard & Poor's 500 index slid 18.70 points, or 0.8 percent, to 2,457.85. The Dow Jones industrial average slumped 234.25 points, or 1.1 percent, to 21,753.31. The average had been down more than 277 points. The Nasdaq composite lost 59.76 points, or 0.9 percent, to 6,375.57. The Russell 2000 index of smaller-company stocks gave up 13.92 points, or 1 percent, to 1,399.66.
Benchmark U.S. crude gained $1.37, or 2.9 percent, to settle at $48.66 a barrel on the New York Mercantile Exchange. Brent crude, used to price international oils, rose $1.04, or 2 percent, to close at $53.38 a barrel in London. Wholesale gasoline dipped 5 cents to $1.70 a gallon. Heating oil was little changed at $1.75 a gallon. Natural gas slid 10 cents, or 3.2 percent, to $2.97 per 1,000 cubic feet.
Banks, technology companies lead US stocks lower — Escalating tensions on the Korean peninsula rattled nerves on Wall Street Tuesday, leading to the stock market's worst day in almost three weeks. Bank stocks led the slide as bond yields slumped. Technology stocks, the biggest gainers this year, also pulled the market lower. Energy companies climbed the most as the price of crude oil rose.
US factory orders tumbled 3.3 percent in July — Orders at U.S. factories tumbled in July, dragged down by a sharp fall in orders for civilian aircraft. The Commerce Departments reports that factory orders declined 3.3 percent in July, mostly because of a 19.2 percent drop in orders in transportation equipment.
To get sales kicking, LL Bean renews focus on the outdoors — L.L. Bean is putting a renewed focus on the fun of being outside as it tries to invigorate sales in a fast-changing marketplace. The Maine-based retailer is urging consumers to "Be an Outsider" in a campaign that's launching this month that celebrates the outdoors as something to be enjoyed with friends and family. It comes as L.L. Bean has faced flat sales of about $1.6 billion for two consecutive years and as the company takes a hard look at its generous, return-anything-at-any-time policy.
Round of NAFTA talks ends amid resistance over Mexico wages — The second round of talks on renegotiating the North American Free Trade Agreement has ended amid resistance to talking about Mexico's low wages. Few concrete proposals appear to have been made on issues like dispute-resolution mechanisms, seasonal farm tariffs and regional content rules during the Mexico City talks. The U.S. wants to eliminate the system of private arbitration panels, and tighten labor standards and local content rules. Business groups want to keep wages out of the talks.
Fed Should Be Cautious in Face of Weak Inflation: Brainard “U.S. inflation is falling "well short" of target so the Federal Reserve should be cautious about raising interest rates any further until it is confident that prices are headed higher, an influential Fed policymaker said on Tuesday. In a dovish speech in the face of months of weak inflation readings, Fed Governor Lael Brainard said the U.S. central bank should go so far as to make it clear it is comfortable pushing prices modestly above the Fed's 2-percent target.” (Reuters)
Are We Headed for Another Housing Collapse? “Median home prices across the nation have been increasing with gusto, though perhaps not at levels as staggering as San Jose’s median price tag of $1,183,400. In the second quarter of 2017, prices jumped by 6.2 percent compared with the same period in 2016 to an average cost of $258,300, according to the National Association of Realtors. While trends diverge profoundly from place to place — for all sorts of economic, geographical and lifestyle reasons — a good many of the nation’s metropolitan locales have experienced record appreciation.” (New York Post)
Is Houston Still a Model City? Its Supporters Aren’t Backing Down “Houston is a prime example — of what depends on your point of view. It’s an example of development run amok, of how sprawl can devour nature. It’s what you get when everything as far as the eye can see is designed around cars instead of people. It’s an example, according to a very different interpretation, of how to create affordable housing. It’s proof that fewer regulations mean more prosperity, that the market knows better than any central planner.” (The New York Times)
Developer Lands Loan Deal to Turn Hospital Buildings into Apartments “The developer behind a planned conversion of historic former hospital buildings in upper Manhattan cut a deal to secure a construction loan to restore and transform the beaux-arts structures into apartments. Delshah Capital has entered into a nonbinding contract for a $130 million construction loan, paving the way for the conversion of five buildings at 30 Morningside Drive into 205 rental apartments.” (Wall Street Journal, subscription required)
How the Kushner Family’s Real Estate Fumble May Entangle Trump’s White House “In 2007, near the peak of the real estate bubble, Kushner Companies made a huge leap from New Jersey apartments to Manhattan high rises. Using only a $50 million down payment against a $1.8 billion purchase price, with financing including short-term, high-interest loans, they purchased the office-and-retail tower at 666 Fifth Avenue.” (Fortune)
Carlyle Avoids $1 Billion Payout Tied to 2008 Bond Fund Collapse “Carlyle Group LP was exonerated in a lawsuit tied to the collapse of a mortgage fund from 2008, avoiding $1 billion in damages sought by the pool’s liquidators. Billionaire Chief Investment Officer Bill Conway and other Carlyle entities acted in the best interests of Carlyle Capital Corp. during the 2008 financial crisis and the fund’s insolvency was due to an unforeseen liquidity crunch, the Royal Court of Guernsey ruled Monday.” (Bloomberg)
Banks Close $1.5 Billion Loan for Flagship Tower at Hudson Yards “The developer of the Hudson Yards complex on Manhattan’s West Side has hit another milestone with a financing package for its flagship office building that will increase the money it has raised for the first phase of the sprawling project to more than $18 billion. A venture led by Related Cos. has closed a $1.5 billion construction loan for 50 Hudson Yards from a group of banks from Asia, Europe and the U.S.” (Wall Street Journal, subscription required)
How Communities Can Unlock the Value of Federal Property “Towns and cities across the country seek development that promotes vibrant, people-oriented, mixed-use communities. The federal government, which owns significant tracts of land in prime areas for redevelopment, could be a key partner, but genuine collaboration between community leaders and federal officials is essential. The U.S. General Services Administration (GSA) is the nation's largest holder of commercial property, with more than 375 million square feet of space in 9,600 buildings housing more than a million federal employees.” (Governing)
Norway’s Wealth Fund Appoints Europe, U.S. Real Estate Investment Chiefs “The Norwegian sovereign wealth fund’s real estate investment unit has appointed Per Loeken and Romain Veber as chief investment officers for the United States and Europe respectively, it said on Tuesday. Both come from senior positions in the real estate unit, known as Norges Bank Real Estate Management.” (Reuters)
Crystal Ball: Executives Size Up CRE Predictions “Forecasting market trends is a universal—and vital—exercise in commercial real estate, and throughout the decades, industry leaders have often provided smart predictions that have enabled their companies to capitalize on changing conditions and steer clear of hazards, as well. Inevitably, of course, not every one of these prognostications hits the bullseye, but those that are spot-on influence strategy in both their own time and the future. In this series marking CPE’s 30th anniversary, industry leaders are taking the measure of earlier prophesies and providing fresh ones for today.” (Commercial Property Executive)