SoftBank share prices sink as Saudi Arabia is implicated in Jamal Khashoggi’s death
SoftBank Group’s shares saw their steepest price drop in two years this week after Turkey’s government claimed disappeared journalist Jamal Khashoggi was tortured, murdered and dismembered by Saudi Arabian authorities, Bloomberg reported. The country is “the biggest outside investor” in SoftBank’s $100 billion Vision Fund — a factor that could deter investors from getting involved with the group. “If the Saudis are implicated in the murder, you might find a lot of investors not willing to take their money,” Sanford Bernstein analyst Chris Lane told the outlet. “This could start to freeze the Vision fund out of future deals.” It’s not yet clear how the price drop will affect SoftBank’s talks with WeWork, in which it’s interested in buying a majority stake. [TRD]
Sears files for bankruptcy protection, plans to close 142 stores
Last week, Sears Holdings hired bankruptcy advisers ahead a possible bankruptcy filing, and on Monday, the company officially filed for bankruptcy protection. Sears had already announced plans to close 46 stores, and on Monday said it would close an additional 142 stores. The company tried to bandage its financial wounds with the closings, having lost more than $11 billion since 2011, but its efforts weren’t enough to stave off bankruptcy. The company’s CEO Edward Lampert, who has tried to help Sears avoid its current fate, will be stepping down from the position. The news comes with vacancy rates at malls across the country at a seven-year high in the third quarter. [TRD]
Microsoft co-founder Paul Allen dies at 65, leaving behind expansive real estate portfolio
Paul Allen is best known as the co-founder of Microsoft, but the billionaire — who passed away on Monday at the age of 65 due to complications of non-Hodgkin’s lymphoma — was also a major real estate player. Allen’s portfolio included a 120-acre site in Beverly Hills that he listed for $150 million earlier this year, a 13,000-square-foot mansion in Beverly Hills, two apartments in Manhattan, 11 mansions in Seattle, a hilltop mansion in the French Riviera and a house in London. He also had a significant impact on Seattle’s real estate landscape, developing one neighborhood into Amazon’s home, and millions of dollars into an affordable housing initiative, as well as efforts to combat homelessness in the city. Allen reportedly had a net worth of around $20 billion, and gave more than $2 billion to philanthropic causes. [TRD]
Americans find renting a home to be more affordable than buying one, report says
A majority of Americans believe that paying rent for a home is more affordable than shelling out money to buy a home, the Wall Street Journal reported. Freddie Mac data shows that 78 percent of Americans consider renting the less expensive option, compared to 67 percent half a year ago — although many still struggle to pay their rents, according to the outlet. Fifty-eight percent of people who currently rent a home, meanwhile, said they don’t have any plans to buy an abode. The outlet attributed this to high mortgage rates, interest rates and housing prices. Home sales across the country have been slowing due to low inventory and high prices, and that preference on the part of people seeking housing could prolong the trend. [TRD]
MAJOR MARKET HIGHLIGHTS
Former NYCHA chair who resigned amid lead paint scandal joins building contractor
The former chair of the New York City Housing Authority, Shola Olatoye, has accepted a job with building contractor Suffolk, as vice president in charge of business development in New York. Olatoye resigned in April after news broke that NYCHA hadn’t inspected thousands of apartments for lead paint, and had covered up the lack of inspections. New York City Mayor Bill de Blasio, however, defended Olatoye, who was at the helm of the agency for four years. “The Housing Authority that the Chair inherited four years ago faced bankruptcy, an inability to make basic repairs and an alarming surge in violence. She was a change agent from Day One,” he said. Suffolk has been trying to expand in New York, and Olatoye’s “knowledge of the New York real estate development landscape” will contribute to that, its New York president Charlie Avolio said in a statement. [TRD]
Downtown Miami luxury high-rise offering residents yacht service to the beach
Residents of a luxury high-rise in downtown Miami will be able to take a yacht to the beach. G&G Business Developments and International Booking Services LLC are offering the butler service to people who live at the 391-unit Aston Martin Residences. The offer comes amid a push by luxury condo developers in Miami to entice buyers with more amenities, as there’s currently an excess supply of luxury units in the Greater Downtown Miami area, according to a report released in August. At one development in Sunny Isles Beach, for example, the developer is offering amenities including Formula One simulators, an ice-skating rink, a movie theater and bowling lanes. [TRD]
Warren Buffett sells his Laguna Beach home at a discount, but still profits
Warren Buffet has sold his six-bedroom beach house in Laguna Beach, the Wall Street Journal reported. The Berkshire Hathaway chairman listed the house for $11 million in February 2017, and only ended up selling it for $7.5 million, but he still made a hefty profit, as he bought the house for $150,000 in the 1970s, according to the outlet. The sale mirrors Buffett’s philosophy that a property owner shouldn’t count on “making a good sale.” “Have the purchase price be so attractive that even a mediocre sale gives good results,” Buffet wrote in 1963. An unidentified couple purchased the property. Buffet said he felt “very good about the couple who bought the house,” adding that he “hope[s] their family gets as much enjoyment from it as [his] family did.” [TRD]
Chicago, St. Louis take top spots on list of most affordable big cities to buy a home
St. Louis, Missouri is the most affordable place in the U.S. to buy a home, followed by Chicago, according to new data from consulting firm John Burns Real Estate. While purchasing a home is expected to become harder in cities like New York, Philadelphia and Seattle, the firm predicted that Chicago will continue to be an affordable place to do so into 2021, Crain’s reported. The monthly payment on a median-priced home in the Windy City was expected to stay at around 23 to 24 percent of the median household income through that year. “Chicago took it on the chin during the last downturn and is just getting up off the mat when it comes to economy and housing market recovery,” Rick Palacios Jr., the director of research at John Burns, told the outlet. [TRD]
Washington D.C. is trying to pass legislation that would place restrictions on Airbnb rentals
Washington D.C. could crack down on Airbnb soon, Reuters reported. Its district council on Tuesday was expected to vote on legislation that would impose strict regulations on home rentals. The vote ended up being postponed, according to the Washington Post, but the legislation previously passed unanimously in a preliminary vote. The legislation’s detractors have expressed concerns over the millions of dollars the city could lose as a result. D.C. Chief Financial Officer Jeffrey S. DeWitt, for one, said the bill could “eliminate nearly all current short-term rentals.” But its sponsors said that issue could be addressed, adding that they were optimistic it would eventually be approved. [WaPo]
Netflix buys film studio in Albuquerque, New Mexico
Netflix has snapped up a film studio in New Mexico, it said in an announcement. The company bought ABQ Studios in Albuquerque as part of “a plan to bring as much as $1 billion in production to the state over the next 10 years,” according to The Verge. Shows including Breaking Bad and Godless have filmed in the state. “Our experience producing shows and films in New Mexico inspired us to jump at the chance to establish a new production hub here,” Netflix’s vice president of physical production Ty Warren said in a statement. The purchase and subsequent production are expected to create 1,000 new jobs for people who live in the area. [TRD]