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 Dow Jones industrial average lost 65.21 points, or 0.4%, to 16,674.74. The Standard & Poor’s 500 index fell 5.11 points, or 0.3%, to close at 1,990.20. The NASDAQ composite rose 4.71 points, or 0.1%, to 4,893.95.
U.S. crude fell 25 cents to $46.90 a barrel. Brent crude, a benchmark for many international oils imported by U.S. refineries, decreased 67 cents to $49.08 a barrel. Wholesale gasoline fell less than a penny to $1.376 a gallon. Heating oil slipped 1.17 cents to $1.53 a gallon. Natural gas fell 1 cent to $2.652 per 1,000 cubic feet.
US homebuilding slows in August after hot streak — Builders broke ground on fewer houses and apartment complexes in August, a possible sign that the housing market may be levelling off after accelerating for much of the year. Housing starts last month fell 3 per cent to a seasonally adjusted annual rate of 1.13 million homes, the Commerce Department said Thursday. Construction activity slowed sharply in the Northeast and Midwest last month, edged downward in the West and climbed in the South. Still, homebuilding appears much stronger than a year ago, despite figures that can be highly volatile on a monthly basis. Construction slowed in part due to the expiration of tax incentives for developers in New York.
Applications for US jobless aid fall to very low 264,000 — The number of Americans seeking unemployment benefits fell last week to the lowest level in two months, suggesting employers remain confident enough in the economy to hold onto their workers. The Labor Department said Thursday that weekly applications for unemployment aid dropped 11,000 to a seasonally adjusted 264,000. That’s the lowest level since July, when applications plunged to a 41-year low. Applications are a proxy for layoffs, so the decline indicates that employers are cutting fewer jobs. Americans are enjoying strong job security: Applications have been below 300,000 for the past six months, which hasn’t happened since 1973. (Richmond Times Dispatch)
Cheaper oil lowers US current account deficit in 2nd quarter — Cheaper oil imports and greater U.S. exports lowered the deficit in the broadest measure of U.S. trade in the April-June quarter. The Commerce Department said Thursday that the current account deficit shrank to $109.7 billion, down from $118.3 billion in the first quarter. The current account tracks not only trade in goods and services but also investment flows. Falling oil prices helped reduce the value of oil imports, lowering the trade deficit to $130 billion from $134.3 billion in the first quarter. Exports of goods and services increased to $564.7 billion from $561.7 billion. (Herald Whig)
Average US rate on 30-year mortgage rises to 3.91% — For the second straight week, average long-term U.S. mortgage rates inched up this week as financial markets awaited the Federal Reserve’s crucial decision on interest rates. Capping months of feverish speculation, Fed policymakers announced Thursday they’ve decided to keep interest rates at record lows in the face of threats from a weak global economy, persistently low inflation and unstable financial markets. But at a news conference, Fed Chair Janet Yellen said a rate hike was still likely this year. A majority of Fed officials on the committee that sets the federal funds rate — which controls the interest that banks charge each other — still foresee higher rates before next year. The Fed will meet next in October and then December. (Yahoo)
ULI Panel to Explore the Gender Gap in CRE “The gender gap in commercial real estate has narrowed substantially over the last decade. But, according to experts, there is still work to do.” (Commercial Observer)
Prudential Real Estate’s New Life in Cambridge “Prudential Real Estate Investors has just grabbed Twenty|20, a brand new luxury multifamily property in Cambridge, Mass., for its ever-growing portfolio. PREI, the investment business of Prudential Financial, purchased the 355-unit property from Canyon Partners Real Estate L.L.C., which developed the tower at a cost of approximately $147.3 million. The acquisition price was not disclosed.” (Commercial Property Executive)
Moody’s Report Is Raising Concerns Over Lending “A new report from Moody’s Investors Service is raising concerns over commercial real estate lending, since it shows banks becoming as overextended on commercial real estate properties as they were during the 2007 financial crisis. By calculating the market wide loan-to-value ratio—adjusted for normalized, historical rates of returns—Moody’s found the ratio has exceeded 100% for two years.” (Bisnow)
Griffin-American Doubles in Size “Griffin-American Healthcare REIT III, Inc., will nearly double its holdings when it completes an agreement with joint venture partner NorthStar Healthcare Income, Inc., to acquire Trilogy Investors, L.L.C., for $1.13 billion.” (Commercial Property Executive)
The $1 Trillion Idea “Roughly 30 years ago, Michael Colacino, now the president of the global commercial real estate services firm Savills Studley, stumbled upon an idea that was ingenious and straightforward enough for almost anyone to understand it: Bundling up leases and selling them to investors—just like securitized mortgages.” (Commercial Observer)
Carlyle Raises $4.2 Billion for Seventh U.S. Real Estate Fund “Carlyle Group LP raised $4.2 billion for its seventh U.S. real estate fund, meeting the top end of its target range, in preparation for more property purchases at a time when prices are at record levels.” (Bloomberg)
The Typical Household Makes Less than It Did Before the Recession “The typical American household, six years after the Great Recession, is still worse off, according to a report released Wednesday.” (Market Watch)
SL Green to Sell Two Fifth Avenue Dev Sites for $125 Million “Less than a month after closing on the largest single-building transaction in New York history, 11 Madison Avenue, SL Green Realty is again making deals, hoping to raise cash to invest in its new marquee property.” (The Real Deal)
ACKMAN: The US Government Is Perpetrating ‘the Most Illegal Act of Scale’ with Fannie and Freddie “Hedge fund titan Bill Ackman, founder of $19 billion Pershing Square Capital Management, slammed the US government Tuesday night for keeping all the profits from mortgage guarantors Fannie Mae and Freddie Mac.” (Business Insider)
Tech Firms Venture Into New Territory: Lending “Intuit, PayPal and Square already know how much money millions of small businesses are bringing in each day. Now these tech firms are stepping up efforts to mine that data to get into the lending business.” (Wall Street Journal)
Fed leaves key interest rate unchanged, citing low inflation — The Federal Reserve ended weeks of speculation Thursday by keeping U.S. interest rates at record lows in the face of threats from a weak global economy, persistently low inflation and unstable financial markets. But at a news conference after a Fed policy meeting, Chair Janet Yellen said a rate hike was still likely this year. A majority of Fed officials on the committee that sets the federal funds rate — which controls the interest that banks charge each other — foresee higher rates before next year. The Fed will next meet in October and then in December. (Journal)
GM will pay $900 million over ignition switch scandal — General Motors agreed to pay $900 million to fend off criminal prosecution over the deadly ignition-switch scandal, striking a deal that brought criticism down on the Justice Department for not bringing charges against individual employees. The switches, which can slip out of the “run” position and cut off the engine, have been linked to at least 169 deaths. Despite evidence that GM’s legal and engineering staffs concealed the problem for nearly a decade, no employees were charged Thursday, though U.S. Attorney Preet Bharara said the investigation is still going on. Also Thursday, GM announced it will spend $575 million to settle the majority of the civil lawsuits filed over the scandal.
Amazon dangles $50 tablet computer to hook more consumers — Amazon is dangling a $50 tablet computer in its latest attempt to lure consumers who can’t afford or don’t want the more expensive Internet-connected devices made by Apple and other rivals. The 7-inch Fire tablet unveiled Thursday marks Amazon’s most aggressive attempt yet to undercut Apple, which has been the market leader since its first iPad went on sale five years ago. The least expensive iPad Mini, which has an 8-inch screen, currently sells for $270. (CBS)