Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!americast.com!usa-post Newsgroups: usa-today.real From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: real Mon, Aug 17 1992 Date: Mon, 17 Aug 92 04:19:44 EDT Message-ID: 08-17 0000 DECISIONLINE: Real Estate USA TODAY Update Aug. 17, 1992 Source: USA TODAY:Gannett National Information Network AUCTION PRICES DISAPPOINTING: A commercial real-estate auction held Thursday in Los Angeles disappointed industry experts who hoped it would indicate a turnaround in the depressed market. Although $180 million worth of office buildings, hotels and other properties sold, that was less than half the $450 million properties up for bid. (For more, see special Auction package below.) ESTEFANS BUY MIAMI HOTEL: Miami Sound Machine singer Gloria Estefan and her husband and band founder, Emilio, have bought one of Miami's most famous art deco buildings, the Cardozo Hotel, for $5 million. The couple plan to upgrade the hotel and open a restaurant inside. MORTGAGE RATES BOOST ECONOMY: While the economy is stumbling through the slowest recovery since World War II, it is slowly growing, due in large part to the boost that lower mortgage rates are giving to home sales and home construction starts. Another plus: Lower rates are tempting many homeowners to refinance their existing loans. That's putting money back in their pockets - money they can spend on other things. CITICORP CUTS EARNINGS FIGURES: Citicorp cut its previously reported second-quarter earnings by $28 million after regulators reviewed its books. The USA's largest bank says regulators put a lower value on its mortgage portfolio because of the trend toward refinancing at lower interest rates. Second-quarter net income was revised to 25 cents a share, down from 32 cents a share. REGULATORS WATCH CITICORP: Citicorp, hurt by bad commercial real-estate loans, disclosed that it has been under close supervision by regulators since January and has an agreement to provide regulators with information on its problem loans and efforts to rebuild its balance sheet. Chairman John Reed says such an agreement isn't unusual for a bank that is seen as having a troubled portfolio or low capital. NEW HOME TAX BREAK MAY CHANGE: The city council in Grand Forks, N.D., Monday decides whether to change the tax exemption for owners of new homes. The proposal calls for an exemption on the first $50,000 in value - instead of the current first $75,000 - of new homes for 2 years. If approved, the change would take effect Dec. 31. HUD CITES SOUTH CAROLINA: The U.S. Dept. of Housing and Urban Affairs has cited the South Carolina Human Affairs Commission with deficiencies in how it enforces state housing laws. State officials say HUD knows the department needs more investigators. Federal money to be awarded this fall hinges on the state's ability to make changes. PARTNERSHIP'S EARNINGS DOWN: American Real Estate Partners announced Friday that its second quarter earnings were down 13.7% compared the same period last year. This decrease in earnings before property transactions was principally attributable to a decrease in financing lease income. MILESTONE OBTAINS LOAN: Milestone Properties Inc., Boca Raton, Fla. says it has obtained a $9.7 million first mortgage financing secured by its Dillards, Kenner, La., property. Also, it reported net income of $269,850 for the quarter ended June 30. SPECIAL PACKAGE ON AUCTION: MOST SALES BELOW RESERVE PRICE: Most of the properties sold at what was billed as the world's largest commerial real estate auction went for less than the reserve price - the starting price asked by owners. On average, bids were about 9% below reserve price. Jack Rodman, a Los Angeles accounting firm partner, said, "The basic message is that most investors think prices have further to fall." BAD NEWS FOR BANKS AND THRIFTS: That's a bad sign for banks, insurers and other institutions that are sitting on billions of dollars in foreclosed properties. Some are considering using auctions to unload those properties, much as the Resolution Trust Corp. has done to dump assets from failed savings and loans. POOR TURNOUT BLAMED: Bidders passed on many of the 62 properties offered and one reason for the bad showing was a poor turnout. Several thousand onlookers were on hand, but many big vulture-fund buyers - investors seeking to buy large numbers of properties at bargain basement prices - failed to show. "I talked to a couple," Rodman says. "They told me it wasn't worth their time." (End of package.) Real Estate Editor: Susan M. Andrews. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. This article is copyright 1992 Gannett News Service. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM