Teva to move global HQ to Tel Aviv amid $3B cost-cutting drive

Teva has already decided to move its U.S. headquarters, and now it’s planning to move its worldwide headquarters, too.

The company will relocate to Tel Aviv from Petah Tikvah, Israel in mid-2020, a spokeswoman confirmed by email. Teva has chosen a site in the city’s Ramat Hahayal district, and the new structure will house only Teva employees. Teva will be leasing the building.

The reasoning behind the move is no surprise, given the generics giant is in the midst of implementing a $3 billion cost-cutting drive. Putting Teva’s headquarters under one roof—instead of at sites scattered around Petah Tikva—will save the company money, the spokeswoman said.

“Combining into one site … will be an efficient and cost-effective solution, generating significant savings from a business and operations point of view,” she wrote, adding that it will also “fulfill our goal of working as One Teva.”

 

As part of CEO Kåre Schultz’s grand restructuring, unveiled this time last year to help the company out of immense debt, Teva also agreed this summer to an address change in the U.S. after shuttering pricey offices in New York and Washington, D.C. Lured by a $40 million tax break from the state of New Jersey, the company switched its home base to Parsippany from North Wales, Pennsylvania.

There, it has a construction project to complete. “It is an astronomical build-out process,” Harvey Rosenblatt, founder of the real estate developer that owns and manages Teva’s new building, toldNJ.com in July.

Meanwhile, as Globes pointed out, the Tel Aviv news is likely to go over well in Israel’s home country, where concerns have persisted—thanks in part to the hiring of Danish Schultz, as well as plenty of local layoffs—that Teva is losing its Isareli identity and could even relocate to a new country.

https://www.fiercepharma.com/pharma/teva-to-move-global-hq-to-tel-aviv-amid-3b-cost-cutting-drive

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‘Cheap’ Is The Most Requested Apartment Search Word In 2018

Over 25% of those searching for an apartment in 2018 were looking for something “cheap”. A close second was “studio“.

The Rent Cafe 2018 Year End Rent Report shows rents hold strong at year end.

What most caught my eye, however, was an interactive graphic that lets you hover over a phrase to see how often perspective renters included that word or phrase in a search.

Search Results

  • Cheap apartments: 25.14%
  • Studios: 23.88%
  • One-, two- and three-bedroom apartments follow in that order, with 10.48%, 9.46% and 7.5% of all rental-related searches, respectively.
  • Luxury apartments also saw significant interest among renters this year, accounting for 7% of searches.
  • Those wanting a pool or gym turned up in 0.33% and 0.06% respectively

Cheap Is On My Mind

Studio is another sign that cheap is on renter’s minds.

Admittedly there is some overlap between cheap and studios while there isn’t between One-, two- and three-bedroom apartments. However, there is likely some overlap between studio and one-bedroom.

GPS Searches

The infographic only listed amenities but here’s another interesting factoid: Online activity has migrated to GPS-enabled mobile devices. One third of the keywords people searched for in 2018 included the words ‘near me.’

Cheap – Near Me

This is what people want: Cheap, near them.

Everything else other than number of bedrooms doesn’t factor in until final comparisons.

National Average Rent

Other Take-Aways

  • The national average apartment rent ends the year with a strong 3.1% y-o-y increase, having reached $1,419, $42 above what renters were paying this time last year, according to Yardi Matrix.
  • As of the end of the year and throughout 2018, rents have seen the most fluctuation in small cities, with double-digit percentage increases in Odessa, TX, Midland, TX, and Reno, NV.
  • Queens, NY has been the only large market with stagnating rents, and only two small cities, Baton Rouge, LA and College Station, TX have seen significant decreases.

Cheap is In

In case you haven’t figured it out, cheap is in.

Don’t count on those looking for “cheap” to be looking to buy homes until this economic bubble collapses.

https://www.zerohedge.com/news/2018-12-14/cheap-most-requested-apartment-search-word-2018

Berkadia, Freddie Mac finance 2,200 rental units for seniors

Berkadia announced today the closing of $327 million in fixed and variable rate financing for Brookdale Senior Living, Inc. Berkadia’s Senior Managing Directors Heidi Brunet and Lisa Lautner of the Seniors Housing & Healthcare team originated the transaction through Freddie Mac’s new Structured Pool Transaction program. The deal closed on November 16 and will be used to refinance 28 senior housing facilities representing approximately 2,200 units. The ten-year, non-recourse Structured Pool Transaction features fixed and variable rate loan components and a 30-year amortization schedule. The fixed rate component was $213 million and the variable rate component was $114 million.

The property was financed through Freddie Mac’s Green Advantage program, which provides competitive pricing to finance upgrades that reduce energy or water consumption.

“We were excited to work closely with Freddie to utilize their new Structured Pool Transaction program in order to meet Brookdale’s needs for this unique portfolio of facilities,” said Brunet. “As we look ahead to 2019, we anticipate that more owners and operators will be looking for greater flexibility in financing solutions in order to create more value across their property holdings.”

Brookdale’s Treasurer George Hicks commented that “Brookdale places significant value in the ability to build flexibility into its capital structure, and we were very pleased to have been able to work with Berkadia and Freddie Mac to accomplish that on this transaction. The Seniors Housing Structured Pool Transaction allows us to achieve interest rate risk diversification by placing most of the debt into a fixed rate while allowing for the ability to obtain partial releases that can be repaid out of the variable rate portion.”

Freddie Mac’s Structured Pool Transaction targets large transactions and provides enhanced structuring to meet the borrower’s specific needs. The program provides various options, including combinations of fixed and floating rate debt components, no property assignments for the debt type, flexible releases and prepayments, faster Joint Underwriting path, and other customizable features.

“Freddie Mac has refined its Structured Pool Transaction program to achieve optimal flexibility for Senior Housing Borrowers who are financing crossed loan pools,” said Steve Schmidt, National Director of Senior Housing at Freddie Mac Multifamily. “We have already closed three large Senior Housing transactions under the program and our Borrowers are very receptive to the program’s various features. We are grateful to Brookdale and Berkadia for their close collaboration on this significant financing, which helped us further refine this program for the Senior Housing market.”

Berkadia’s Seniors Housing & Healthcare group leads the industry in innovative and comprehensive solutions for even the most complex independent living, assisted living, memory care and skilled nursing projects across the country. In addition to deep market knowledge, the group offers a full set of advisory, underwriting, loan origination services and products including FHA, Fannie Mae, Freddie Mac, Life Company, Proprietary Bridge Lending and Capital Markets Advisory Services. Last year, the team expanded its capabilities by adding an investment sales presence, rounding out its full-suite of services.

In 2017, Berkadia’s Seniors Housing team completed more than $1.7 billion in loan volume, including closing over $1 billion in financings in a single day.

 

Berkadia, a joint venture of Berkshire Hathaway and Jefferies Financial Group, is a leader in the commercial real estate industry, offering a robust suite of services to our multifamily and commercial property clients. Through our integrated mortgage banking, investment sales and servicing platform, Berkadia delivers comprehensive real estate solutions for the entire life cycle of our clients’ assets.

https://www.marketscreener.com/news/BERKADIA-FREDDIE-MAC-FINANCE-2-200-RENTAL-UNITS-FOR-SENIORS–27751344/

Fred’s hit post Q3 results

Fred’s (NASDAQ:FRED) reports comparable-store sales down 5.3% in Q3.

Gross margin rate leveraged 353 bps to 25.1%.

Adjusted SG&A expense improved 50 bps to 33.6%.

Joe Anto, Fred’s Interim CEO and CFO, stated “We have made significant progress against our goal of strengthening the balance sheet and as of December 12, 2018 our ABL balance stood at $51.9M vs. $153.4M as of the beginning of this Fiscal Year.  As of December 12, 2018 we completed the sale of script files associated with approximately 138 locations to Walgreens and expect to complete the remaining 41 location transfers to Walgreens by the end of January 2019. As we have stated in the past, we are continuing to evaluate potential opportunities to monetize all our non-core assets including our retail pharmacy script portfolio as well as our real estate.”

https://seekingalpha.com/news/3416686-freds-minus-10_7-percent-post-q3-results

Bull Case For What A No-Deal Brexit Will Do To Commercial Real Estate Values

The good news: There is a respected research firm that is much more optimistic than the Bank of England about what a no-deal Brexit will do to U.K. commercial property values.

The bad news is, they still think values will fall.

Last week, the Bank of England published its scenario analysis for the economy in the event of a no-deal Brexit, which ranged from a best case of a 27% fall in commercial property values over five years to a worst case of a 48% fall, deeper than the crash after the financial crisis.

But Capital Economics thinks the fall would only be 5% to 9%, much less than in past crashes.

“In a no deal environment, we would expect the Bank of England to cut rates and undertake new asset purchases to steady markets, similar to the aftermath of the EU referendum,” it said. “Looser policy will keep property yields lower than otherwise, but is unlikely to be enough to stop them rising altogether.”

Capital Economics thinks no matter what happens, values will fall by about 4%.

Both estimates need to be taken with a hefty pinch of salt. The Bank has been staunchly opposed to the idea of leaving the EU, whereas Capital Economics founder Roger Bootle is pro-Brexit.

It is still unclear exactly what on earth will happen with Brexit, and whether we will get the chance to see who was right.

https://www.bisnow.com/london/news/capital-markets/heres-the-bull-case-for-what-a-no-deal-brexit-will-do-to-commercial-values-95830

Turner Construction, Bloomberg Execs Indicted In $15M Bid-Rigging Scheme

More than a dozen construction executives and workers at Turner Construction Co., Bloomberg L.P. and various subcontractors have been charged for a bid-rigging and bribery scheme that prosecutors say was worth millions.

In all, 14 people and three companies were charged with counts of grand larceny, conspiracy, money laundering and bribery in unsealed indictments announced by the Manhattan District Attorney Tuesday.

More than a dozen other people and companies have already pleaded guilty and cooperated with the investigation.

The allegations stem from interior build-out work at two Bloomberg offices in Manhattan, at 919 Third Ave. and 120 Park Ave. Besides under-the-table cash payments in exchange for insider information, one subtractor illegally registered as a woman-owned business to position itself for work, even as it was being used to funnel contracts for kickbacks, prosecutors allege.

Former Bloomberg construction executives Anthony Guzzone and Michael Campana, along with former Turner executives Ronald Olson and Vito Nigro, were charged with stealing from Bloomberg by inflating contractor bids, falsifying work orders and misappropriating funds.

The scheme ended up costing Bloomberg $15M, prosecutors said.

“New York’s sky-high construction costs are driven not only by market demand, but by pay-to-play industry corruption that makes it impossible for honest companies to compete,” District Attorney Cyrus Vance said in a statement. “Thanks to the unique expertise of prosecutors in my Office’s Rackets Bureau, as well as our partners in the New York State Police, this massive, years-long kickback scheme has come to an end.”

The DA’s office thanked Turner and Bloomberg for their help cooperating in the investigation, which did not implicate the two companies or their highest-ranking executives in the scheme.

https://www.bisnow.com/new-york/news/construction-development/turner-construction-bloomberg-bribery-indictments-95929

Apple: plans new $1 billion campus for Austin, TX

 Apple Inc said on Thursday it would spend $1 billion to build a second campus in Austin, Texas, that will house up to 15,000 workers as part of a broader push by U.S. companies to create more domestic jobs.

The iPhone maker also plans to open additional sites in Seattle, San Diego and Culver City, California, and hire more than 1,000 employees in each location, while expanding operations in Pittsburgh, New York and Boulder, Colorado, over the next three years.

Apple said at the start of the year it would invest $30 billion in the United States, taking advantage of a windfall from U.S. President Donald Trump’s sweeping tax code overhaul.

The 133-acre campus in Austin will be less than a mile from Apple’s existing facilities and initially have 5,000 employees. The jobs created would be in engineering, research and development, operations and finance.

Amazon.com Inc in November said it will create more than 25,000 jobs in both New York and the Washington, D.C. area by opening massive new offices. The two technology companies chose cities with a wealth of white-collar workers and high employment, bypassing other regions that may have required more investment.

Austin is one of the fastest growing U.S. cities with a population of nearly 1 million, and is home to the University of Texas and other tech companies including Dell Technologies Inc in nearby Round Rock, Texas, and IBM.

Apple’s existing facility in the city has the second-most employees after its headquarters in Cupertino, California. With the new campus, the company will become the largest private employer in the city.

“Apple has been a vital part of the Austin community for a quarter century, and we are thrilled that they are deepening their investment,” Austin Mayor Steve Adler said on Thursday.

Corporate America has been under political pressure to ramp up investments at home as part of Trump’s “America First” policies, which have led to a bitter trade war with China. Trump has also warned of possible tariffs on iPhones and other Apple products imported from China.

The new Austin campus marks a turnabout from Chief Executive Tim Cook’s earlier comments that Texas would be an unlikely choice for a new campus.

“Apple is proud to bring new investment, jobs and opportunity to cities across the United States and to significantly deepen our quarter-century partnership with the city and people of Austin,” Cook said.

Apple could be getting some incentives for the Austin expansion in the form of a $25 million grant from the Texas Enterprise Fund, a source familiar with the matter said.

The fund awards “deal closing grants” to companies looking at new projects in Texas, according to its web site. The Austin American-Statesman newspaper reported that Apple is also seeking a 15-year property tax abatement for the new campus and said the city did not provide incentives.

Unlike tech rival Amazon, Apple did not hold a public bidding process to choose the site of its new campus.

Amazon last month ended a more than year-long bidding war for a $5 billion second headquarters, splitting that investment between Long Island City in Queens, New York, and Arlington, Virginia, for offices that could each house 25,000 jobs.

Amazon’s plans for its New York City headquarters met with backlash from some city officials and state representatives due to the project’s large tax breaks and potential impact on the neighborhood’s infrastructure.

Last year, Apple moved into its sleek “spaceship” campus in Cupertino that cost about $5 billion.

The company has added 6,000 U.S. jobs this year and is on track to reach the goal it set out in January of adding 20,000 domestic jobs by 2023.

https://www.marketscreener.com/APPLE-4849/news/Apple-plans-new-1-billion-campus-for-Austin-Texas-27746827/