News

Rather than merely haul away toxic bank assets at unreasonably high prices, thereby rewarding bankers for their bad judgment, word is (via various major news outlets) that Sec. Henry Paulson (pictured) and his minions at Treasury are actually considering buying ownership stakes in the banks that the department helps with its $700 billion line of credit from the American people. It’s an idea that’s been kicking around almost since Paulson proposed the original bailout plan, and would amount to a partial nationalization of the banking industry, which may be why he’s resisted it until now. If such a plan happened…

The Federal Reserve has cut its key rate from 2 percent to 1.5 percent. The response, an effort to stem mounting losses in the markets around the world, is part of a move that includes similar efforts by other central banks, according to news sources. The Bank of England cut its rate by half a point to 4.5 percent and the European Central Bank its rate by half a point to 3.75 percent. Other central banks in China, Canada, Sweden, and Switzerland have done likewise.”The recent intensification of the financial crisis has augmented the downside risks to growth,” the Fed…

The I.M.F.–that’s the International Monetary Fund, not the Impossible Missions Force–warned today that the governments of the developed world need to act together to stem the financial crisis, or it could become “increasingly disorderly and costly for the real economy.” The warning was included in the organization’s Global Financial Stability Report. Especially vulnerable, according to the I.M.F., are Central and Eastern European countries, which are highly dependent on credit. And poor Iceland. The near-Arctic nation’s banking system is groaning under the weight of debt that’s about 12 times the size of the country’s economy–veritable Third-World territory, even though (for now)…

Skanska has been awarded a contract to design and build the William Beaumont Hospital in Troy, Mich., at a contract amount of $56 million. The project is a joint venture between Skanska and construction management firm Barton Malow, in which Skanska has a 51 percent stake. The project originally broke ground in June 2007 and is expected to be completed in October 2010. The plans call for approximately 17,000 square feet of facilities on the site, including about 7,000 square feet dedicated to an emergency care center and a critical care tower. Additionally, the firm plans to build a three-story…

The Port Authority of New York and New Jersey issued a 70-page report today detailing more realistic costs and timetables for redevelopment of the 16-acre World Trade Center site while at the same time acknowledging that it is now expected to cost at least $17 billion for the entire build out–more than $1.7 billion than originally estimated. The report was presented at today’s Port Authority Board of Commissioners meeting. Port Authority Chairman Anthony Coscia said in a statement released after the meeting that the report “builds on previous efforts by the Port Authority to conduct our business with transparency and…

The 1031 exchanges and tenant-in-common deals have had a rough time of it lately. Until last year, there was a booming volume of real estate investment sales, which provided the necessary folder for a healthy 1031 exchange and TIC market. In particular, as apartments went condo, the sellers needed a tax-advantageous exit strategy. Those days are gone. But 1031s remain an important part of the real estate market, and companies such as American Realty Capital Exchange L.L.C. (ARCX), an arm of American Realty Capital Advisors, remain active participants in the market, especially those exchanges that facilitate subsequent TIC investments. Recently…

The monster 110-page bailout bill has been finalized. The proposed legislation would allow Treasury Secretary Henry Paulson (pictured) to start buying bad mortgage-backed assets — or any other assets — from any firms at any price. Various strings have been attached, or at least they seem to be strings, including the government taking an equity interest in the companies it helps, and allowing the Treasury department to modify some of the troubled loans, partly by forgiving outstanding debt. Congress will vote on it in short order. Will it work? As a financial leap of faith, no one can say. Across…

In a transaction orchestrated by the Federal Deposit Insurance Corp., Federal Reserve and Department of the Treasury, Citigroup Inc. will acquire the banking operations of Wachovia Corp. According to Citigroup, the deal will make it the largest U.S. bank in terms of total deposits. The announcement by the FDIC noted that “Wachovia did not fail; rather, it is to be acquired by Citigroup Inc. on an open bank basis with assistance from the FDIC.” For a payment of about $2.16 billion in stock, Citigroup will acquire the majority of Wachovia’s assets and liabilities, including five depository institutions, and will assume…

For the day on Thursday, the Dow Jones Industrial Average was up 196.89 points on the hope that a Wall Street bailout was a done deal. But all bets are off Friday as the news sinks in that no deal has been reached and and Morgan has bought the Washington Mutual Bank, which the FDIC had seized. The day after President Bush went to the airwaves to ask the nation for $700 billion, he met with the John McCain and Barack Obama, plus other Republican and Democratic leaders of Congress. It isn’t clear yet what happened at that meeting, but…

Hotel Brokers International has brokered its 10,000th hotel transaction. The milestone was a $10.2 million package deal of two Holiday Inn Express hotels. The two properties were a 77-unit Holiday Inn Express in Austinburg, Ohio, which sold for $5.6 million, and the 64-unit Holiday Inn Express in Newton Falls, Ohio, which sold for $4.4 million. It was appropriate that HBI achieved the milestone with two mid-market hotels, since that is the lion’s share of transactions the brokerage network completes, H. Brandt Niehaus (pictured), president of HBI and the Louisville, Ky.-based brokerage, Huff, Niehaus & Associates, told CPN at the 2008…