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US to seize HNA's stake in NYC asset; Newark, NJ, approves $1B Amazon incentive

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US to seize HNA's stake in NYC asset; Newark, NJ, approves $1B Amazon incentive

Commercial real estate

* The New York Post reported, citing anonymous sources, that U.S. President Donald Trump's administration is moving to seize Chinese conglomerate HNA Group Co. Ltd.'s majority stake in the 850 Third Ave. building in Manhattan, N.Y. The publication pointed out that Congress approved expanded authority for the Committee on Foreign Investors in the United States on Aug. 1, including a purview on foreign real estate assets.

Sources said the move is related to a national security concern as the New York Police Department's 17th Precinct is on the ground floor of the building and officers from the precinct are sometimes detailed to protect Trump Tower, according to the report.

New York real estate investor Norman Sturner, the minority partner in the 575,000-square-foot building, has a right to find a new partner before a government-appointed trustee takes over the asset. Sources told the publication that Sturner is seeking partners to replace HNA for a "fire sale price" of $460 million.

An HNA spokesperson told the publication that there is no seizure or forced sale of the property underway or pending.

* The city of Newark, N.J., "one of the less glamorous contenders" for Amazon.com Inc.'s second headquarters, approved up to $1 billion in tax breaks to add to its pitch as part of the city's total $7 billion incentives package, Bloomberg News reported.

Aisha Glover, president of the Newark Community Economic Development Corp., said the approved incentives can be applied to other companies if Amazon does not choose Newark. The city council approved payroll-tax exemptions for any companies that create 30,000 jobs and invest $3 billion in the city over the next 20 years.

* Front Yard Residential Corp. purchased property manager HavenBrook Partners, LLC and a portfolio of 3,200 rental homes, both majority-owned by a Pacific Investment Management Co. fund, for $485 million, in a bid to start internalizing the management of its properties, Bloomberg News reported.

Front Yard, which obtained a $509 million loan from Freddie Mac for the transaction, plans to use the loan to refinance around 2,800 homes acquired in the deal, as well as 2,000 homes it already owns, the news outlet noted, citing an interview with CEO George Ellison.

* WeWork Cos. leased 60,000 square feet in the $117 million Wills Wharf tower under construction in the Harbor Point development in Baltimore, Md., marking its first location in the city, the Baltimore Business Journal reported.

The property is being developed by Armada Hoffler Properties Inc. and Beatty Development Group.

* CommonWealth Partners LLC is the buyer of Paramount Group Inc.'s 2099 Pennsylvania Ave. building in Washington, D.C., the Washington Business Journal reported, citing industry sources. Paramount did not identify the buyer in the $220 million sale.

Paramount had paid $158 million for the property in 2012, according to the report.

* Goldman Sachs Asset Management Private Real Estate acquired a two-property apartment portfolio in Philadelphia's Chestnut Hill submarket, according to Holliday Fenoglio Fowler LP, or HFF, which represented the seller. The 821-apartment portfolio was sold by Apartment Investment and Management Co. for $170 million, The Philadelphia Inquirer reported, citing an email from spokeswoman Cindy Lempke.

* Howard Hughes Corp. intends to pursue its claims against contractor Nordic PCL Construction over alleged construction defects at its 36-story Waiea mixed-use tower in Honolulu after Chief Judge Michael Seabright of the U.S. District Court in Hawaii dismissed the developer's $75 million lawsuit over the timing of the claim, Pacific Business News reported. The lawsuit was filed in November 2017.

The suit was dismissed without prejudice after Nordic argued that Howard Hughes failed to follow certain procedures under the state's Contractor Repair Act, among other things. The case's dismissal allows the possibility of a refiling, which Howard Hughes intends to avail, the report noted, citing an emailed statement from the developer.

* Centurion American Development Group is pitching a makeover of the Collin Creek Mall in Plano, Texas, in a project that Mehrdad Moayedi, the firm's president and CEO, estimates would cost between $800 million and $900 million, the Dallas Business Journal reported, citing an interview with Moayedi.

Centurion is under contract to acquire the mall and intends to partly demolish it to make way for two office buildings of between 300,000 to 500,000 square feet each, a 300-room hotel, hundreds of townhomes and condominiums, a music venue, a conference center and 15 to 20 restaurants.

Previously, Sam Ware of Dreien Opportunity Partners had planned a $1 billion project for the site but failed to close a purchase deal with the mall's various owners, the report noted.

After the bell

* Equinix Inc. disclosed second-quarter funds from operations of $289.5 million, an increase in the aggregate from $219.8 million in the 2017 second quarter.

Housing

* Prices of luxury homes in Florida jumped 16% year over year in the second quarter, fueled by New York buyers looking to escape the new tax law that is hitting homeowners in affluent suburbs of New York City, Bloomberg News reported, citing Redfin Corp.

The day ahead

Early morning futures indicators pointed to a higher opening for the U.S. market.

In Asia, the Hang Seng climbed 0.88% to 28,607.30, while the Nikkei 225 fell 0.20% to 22,598.39.

In Europe, around midday, the FTSE 100 fell 0.72% to 7,721.01, and the Euronext 100 was down 0.31% to 1,074.53.

On the macro front

The jobless claims report, the PPI-FD report, the wholesale trade report, the EIA natural gas report, the Fed balance sheet and the money supply report are due out today.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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