Jul 30 2014

REAL ESTATE: Bill that would offer financial aid after terrorism attacks renewed

Commercial real estate investors and other industry professionals and trade groups are pleased that a bill to provide federal backing to properties in the event of a destructive terrorist attack was renewed by the US Senate last week.

SB2244 was ratified by a 93-4 vote and reauthorizes a post-Sept. 11, 2001 law that was passed to help the property and insurance industries financially survive another catastrophic destruction of property. The Terrorism Risk Insurance Act obligates the US Treasury to cover 80 percent of losses above the varying deductible levels and then seek repayment from insurers.

Any foreign or domestic attack that causes damage costing at least $100 million triggers this program. According to insurance industry calculations, the 9/11 attacks on the World Trade Center and the Pentagon cost insurers $40 billion.

The measure now goes to the House of Representatives and is expected to be taken up soon.

MURRIETA OFFICES SOLD

Two Class A office buildings in Murrieta, both mostly occupied and components of the larger Village Walk Corporate Center, have been sold for $7.75 million, according to a statement from Avison Young, which represented both sides in the deal.

The larger of the two buildings is a three-story property at 41391 Kalmia St. It’s more than 32,500 square feet and is currently 96 percent occupied by 11 tenants.

The smaller neighboring building, at slightly more than 5,000 square feet, is 100 percent occupied by Pacific Western Bank.

In a statement, an Avison Young representative said that the buyer acquired a property priced below its replacement cost and that the seller got the kind of price that the owner of a property that produces a stable revenue yield should expect.

Village Walk Murrieta is the buyer. Village Walk Square is the seller. The overall complex, with more than 400,000 square feet of space spread over 65 acres, is a mixed-use project that includes offices, shops, restaurants and senior housing.

APARTMENT COMPLEX BOUGHT

The Brentwood Apartments, a 44-unit apartment complex in San Bernardino, has been sold to an unnamed investor for $2.4 million, according to a statement from the Ontario office of Marcus amp; Millichap.

The complex, located at 1415 E. Date St., contains units with two to three bedrooms. It is located less than one mile from I-210.

The seller, a private investor, was also not named in the statement.

Contact the writer: 951-368-9553 or katzanek@pe.com

Jul 29 2014

Urban Compass Raises $40M in Digital Real Estate Boom

Urban Compass, a New York-based real estate site which matches buyers with brokers, has raised $40 million in venture financing, as it looks to expand to new regions.

Investors include American Express CEO Kenneth Chenault, Conde Nast parent Advance Publications and Salesforce CEO Marc Benioff.

This is the third round of funding for the housing service, raising a total of $73 million to date from an investor list that also includes Goldman Sachs (GS), Founders Fund, Thrive Capital and .406 Ventures. The company began raising capital in late 2012 and the Urban Compass service was launched last year.

“People will always need to rent or buy apartments,” Ori Allon, founder and executive chairman of Urban Compass, says. “We provide a service that you’re going to need no matter what.”

Competitors Trulia (TRLA) and Zillow (Z) have performed well in recent months, as prospective buyers and renters increasingly look at listings online. Trulia is up 13% year-to-date and Zillow has surged 55%.

“There’s been a fundamental shift in the manner in which consumers engage in real estate information — mobile,” Bradley Safalow, analyst at PAA research, notes. “Everyone in tech looks at real estate as an industry that is ripe for disruption.”

Other entrants to the online real estate space include Redfin, Homesnap and Apartment List. Yet Urban Compass has a different business model than the ad-based services, focusing instead on pairing home seekers with brokers.

“Urban Compass is tackling a different side of the market versus the online portals by going after commission dollars, whereas the likes of Zillow, Trulia, and Move serve as platforms attracting advertising dollars,” James Cakmak, analyst at Telsey Group, says. “Meanwhile, Redfin, a more direct competitor to Urban Compass, is rapidly expanding into new markets following its latest capital raise last year.

The company is benefiting from a strong real estate environment in New York and looks to take advantage of a housing rebound in additional regions. Allon says that Urban Compass is evaluating an expansion that could include San Francisco, Chicago, Boston and Washington DC

Yet the company may run into growth problems, Safalow warns. “Real estate is a hyper local market so scaling nationally is cumbersome and complicated, he says. No one knows Urban Compass outside of NYC” at the moment.

The new round reportedly values Urban Compass at $360 million. Realogy (H) agreed to acquire competitor Ziprealty (ZIPR) just last week for $166 million.

Allon previously sold companies to Google (GOOGL) and Twitter (TWTR), but says that he’s not ready to shop Urban Compass.

“The plan is to build a national brand that you can really trust.”

Follow Katie Roof on Twitter @Katie_Roof

Jul 29 2014

DRDGold names interim finance chief

DRDGOLD on Monday appointed former Mintails chief financial officer Anthon Meyer as its interim chief financial officer, replacing Francois van der Westhuizen, who had by agreement, relinquished his position with the company and resigned from the board with effect from last Friday.

DRDGold said in Monday’s statement that Mr Meyer had agreed to a two-month, interim appointment as chief financial officer and would be appointed to the company’s board of directors subject to the finalisation of various regulatory and administrative processes.

DRDGold promoted Mr van der Westhuizen from group financial accountant to chief financial officer last December after Craig Barnes migrated to Australia.

DRDGold also issued its June quarter production update on Monday, saying it estimated that gold production increased 13% from the March quarter.

Cash operating costs are expected to be down by about 6%, while cash and cash equivalents have increased from R206m to about R210m.

CEO Niël Pretorius said in Monday’s production update: Following the suspension of the flotation and fine grind circuit in April, it was important that we stabilise Ergo’s carbon in leach circuit.

This circuit is now delivering into call, and we are well positioned to start a three-month test programme of the circuit in September, after Eskom’s winter tariffs come to an end, Mr Pretorius said.

DRDGold said its June quarter and year-end results are scheduled for release on September 2.

In its March quarter, DRDGold reported that gold produced and sold fell 14% to 30,126oz from the December quarter.

It said both components of the flotation and fine grind circuit — the flotation plant and the ultra-fine-grind mills — performed satisfactorily and achieved levels of efficiency that were in line with project expectations.

From the outset, however, gold recovery was much lower than planned in the new high-grade section. In the established low-grade section — which treats both the float and high-grade tail — recoveries also dropped off significantly.

The drop in gold recovery prompted it to suspend its new flotation and fine grind circuit and high-grade section early in April, and to restore the established low-grade section to steady state in order to isolate the cause of the erratic metallurgical performance. We also decided to make a number of small engineering upgrades to the new circuit, DRDGold said in its March quarter report.

Jul 28 2014

Zimbabwe could miss 6.4 pct growth target for 2014: finance minister

HARARE (Reuters) – Zimbabwe could miss its 6.4 percent growth target this year but the final number will not be as low as some international lenders have predicted, finance minister Patrick Chinamasa said on Monday.

The World Bank has downgraded the southern African countrys growth to 3 percent this year. The International Monetary Fund says the economy is fragile and sees growth of 4 percent.

Chinamasa had premised his 2014 growth forecast on a recovery in agriculture and a strong performance in mining.

Chinamasa told a parliamentary committee on finance that agriculture, which was expected to grow 9 percent, had performed reasonably well after output of the staple maize, tobacco and sugar surpassed targets.

Mining in a country with the worlds second largest reserves of platinum had been hobbled by weak metal prices during the first half of the year, and a number of new mining ventures that were expected had not taken off, Chinamasa said.

So, for now I want to remain, should I say, neutral. Maybe not six point something percent (growth), but not as low as is being put out, Chinamasa said in response to an MPs question.

Zimbabwes 2014 harvest for maize rose 82 percent to 1.46 million tonnes, enough to meet annual domestic needs for the first time since 2003, a government report showed.

Agriculture is critical for the livelihood of a majority of Zimbabweans, since 80 percent of the working-age population do not hold a formal job. Chinamasa said only 500,000 people in the country were in formal employment.

Jul 27 2014

Real Estate Crowdfunding (Infographic)

The below infographic is courtesy of the team at Crowdentials – a crowdfunding compliance company.

As many know by now, real estate crowdfunding is super hot.  Be it debt or equity applying technology to gather hundreds or thousands of investors for an offer can make way more sense than scurrying around to find a few institutional types that prefer to do things their way instead of yours.

The info below states that more than $135 million in both debt and equity has funneled through real estate crowdfunding portals in recent years.  It states that between 2009 and 2012 over 5600 Reg D filings have been associated with real estate.  With many of these transactions expected to shift to online platforms it is onward and upward for this new industry segment.

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Jul 26 2014

China’s Alibaba to Finance Wong Kar-wai Movie Slate (EXCLUSIVE)

Chinese e-commerce giant Alibaba has struck a deal to be involved with the upcoming films of top auteur Wong Kar Wai.

The company revealed the deal in a regulatory filing by Chinavision, the Hong Kong stock market listed company that is soon to be renamed Alibaba Pictures Group.

“The Group has entered into several motion pictures development cooperation agreements with leading movie producers and directors, including cooperations with (i) Block 2 Films Limited and Mr. Wong Kar Wai (???), a highly acclaimed and nationally renowned director, producer and script writer,” the Chinavision statement said.

Block 2 is a Hong Kong-based film production investment company that has been involved in several of Wong’s movies including “In the Mood for Love,” and “My Blueberry Nights” as well as others produced by Wong’s main company Jettone, including Taiwanese pictures “Miao Miao,” and “Touch of the Light.”

A spokesman for Wong confirmed the Alibaba deal and told Variety that details would be announced at a future event.

Chinavision, however, also suffered a setback. The company warned that it would lose between HK$97 million (US$12.5 million) and $23.3 million in the six months to end of June, compared with profits of $17.9 million in the same period last year. Revenue has dropped by some 70%, compared to a period when Chinavision was a minority investor in Stephen Chow’s record breaking “Journey to the West: Conquering The Demons.”

The Alibaba parent group is preparing for one of the most significant IPOs anywhere in the world this year. In a filing to US market regulators last week Alibaba valued itself at $130 billion.

Chinavision said that its results also reflect the postponement of other strategic decisions relating to Alibaba’s takeover of the company. That acquisition of 60% of Chinavision’s stock through Alibaba offshoot Ali CV Investment Holding, has now been completed.

Chinavision recently announced the resignation of well-known producer Dong Ping as its CEO and the appointment of Alibaba executives Shao Xiaofeng as chairman and Liu Chunning as acting CEO. However the company has not confirmed recent reports that former number two executive at China Film Group Zhang Qiang will make the unusual leap from state owned enterprise to private sector giant take over as CEO from August.

Chinavision said Alibaba ownership will transform it from humble production company to part of a budding entertainment colossus.

“Given the strengthened financial position and relationship with Alibaba Group, the (Chinavision) board is of the view that the group is now better positioned strategically to broaden the scope of its content production and to capitalise, through the Alibaba Group’s ecosystem, on new opportunities related to online entertainment and other media-related areas in addition to its core competence in film production and distribution. By leveraging the ‘Alibaba’ brand and relationship with Alibaba Group, the (Chinavision) Group will be also able to further strengthen its cooperation with renowned producers, directors and artists in the content production industry,” it said as a followup to the loss warning.

The latest Chinavision filing also confirmed production finance deals with other high-profile filmmakers; Peter Chan Ho-sun’s We Pictures company, and Giddens Ko, the Taiwanese novelist who became a hit film-maker with his sophomore directorial effort “You Are the Apple of My Eye.”

Chinavision has a seven-year option with Hong Kong-based We Pictures to invest in the production of up to five movies in which Chan, who last year directed smash hit nostalgia drama “American Dreams in China,” has a role as producer, director or screenwriter. It has a five-year, five-film deal with Taiwan-based Star Ritz Intl. Entertainment covering the films of Ko (who also works under the pen name Nine Knives) and producer Angie Chai Zhi Ping.

Chinese media have recently reported that Wong will next direct a romance film that is an adaptation of a short story, about a married man’s affair, from the “I Belonged to You” collection written by mainland Chinese author Zhang Jiajia.

Zhang tipped off the media with a posting on his Weibo social media site. But Jettone last month told Variety that Wong would produce, not direct.

Patrick Tong, CEO of another Greater China media group Mei Ah which part-financed “The Grandmaster” said that it too would be financing a new Wong Kar-wai film. But the company has not responded to Variety’s queries and the projects may be unconnected.

Wong, who has long been globally cherished as an arthouse icon, is a hot property in China after “The Grandmaster,” his auteurist martial arts biopic became by far his biggest box office success in China and Hong Kong. Starring Tony Leung Chiu-wai and Zhang Ziyi, the picture grossed $45.7 million in China and amassed huge hauls of prizes at the Golden Horse, Hong Kong and Asian Film Awards events.

Jul 25 2014

Naples’ luxury homes driving Collier real estate market

Even outside of its traditional winter peak season, Collier Countys luxury home market is humming.

The market sold 156 homes priced at more than $2 million from April to June, up 42 percent from the same time period last year, according to a recent report by the Naples Area Board of Realtors. Collier County single-family homes in the $2 million-and-above market also rose 44 percent from the same time period last year. The two developments have local real estate experts excited about the future.

The fact that we have so many buyers interested in the $2 million-plus homes makes us feel really good about the market, NABOR President Pat Pitocchi said. We think there are many factors involved. One of them is the strong stock market. As those investors look in the future, they are pulling assets out and putting them into real estate to diversify their assets.

And then there is the common wisdom about mid-year national election and how they bring a correction in the market. People might be looking ahead and saying let me diversify and go back to something I can touch and feel, and thats real estate.

Another key indicator of a stable housing market is that conventional financing is making a comeback. According to the NABOR report, about 37.5 percent of Collier homes sales were financed with conventional mortgages vs. cash in June 2014. Thats up 10 percent compared to January 2013 when conventional financing was 27 percent of the market.

We appear to be in a more agreeable lending environment now, said Mike Hughes, vice president and general manager of Downing-Frye Realty. Boomerang buyers, or consumers that were hit by foreclosures and short sales, are now able to re-enter the market because they can qualify for financing again.

And to an investor, their perception is that investing in real estate has a real steady upside versus increasing their investment in the stock market since analysts predict a major correction by the mid-term election. In all, people feel more confident investing in real estate and, with rates still low, reinvesting and keeping it longer.

Analysts at NABOR say market stabilization is further evident in nontraditional (short sale and foreclosed) purchases. In the recent NABOR report, 9 percent of all closed sales were non-traditional. In July 2009 when NABOR began collecting this type of data, about 49 percent of sales were non-traditional.

We have a positive outlook for the future, Pitocchi said. I dont deal with predictions, but we believe that we will have strength going forward and it will hopefully be demonstrated in our next report.

Jul 24 2014

Real estate transactions

Beacon Investment Properties of Hallandale Beach, Fla., has acquired 10333 Richmond from a Boston real estate adviser for $46.3 million.

Jul 23 2014

Chinese Buyers Snap Up Real Estate In The US

A sale pending sign is posted in front of a home for sale on July 17, 2014 in San Francisco, California. (Justin Sullivan/Getty Images)

Jul 22 2014

Finance Industry Bonuses Hit in Poll as Revenue Disappoints

Almost half of all finance professionals expect bonuses to be smaller this year, if they get one at all, according to a Bloomberg Global Poll.

Twenty-seven percent of those surveyed said they foresee this year’s payout dropping compared with 2013, while 18 percent said they don’t expect one, according to the quarterly poll of 562 investors, analysts and traders who are Bloomberg subscribers. Thirty-two percent said they look forward to getting a larger bonus, the July 15-16 poll showed.

Goldman Sachs Group Inc., JPMorgan Chase amp; Co. and Citigroup Inc. were among Wall Street firms cutting the amount of money set aside for employees in the first half as revenue from businesses including trading and mortgage lending fell. Still, many of the world’s key stock markets are up for the year and fees from underwriting and merger advice have surged.

“If the profit potential of the institution has been clipped by regulation or the market opportunities are contracting, you can extrapolate that to how much you pay your staff,” Daniel Baker, 50, a poll respondent and London-based analyst for Informa Global Markets, said in a phone interview.

Twenty-three percent of the respondents answered that they weren’t sure about the size of this year’s bonus.

Photographer: Scott Eells/Bloomberg