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VOL. 122 | NO. 204 | Friday, October 26, 2007

Daily Digest

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Memphis Detox Center Sells for $1.8 Million

     A Memphis drug treatment center has been bought by the Brentwood, Tenn., company that formerly managed it. La Paloma Treatment Center LLC bought the former Foundations Associates center at 1248 La Paloma St. south of Lamar Avenue from Foundations Associates for $1.8 million.
     On a 12.4-acre campus, La Paloma is a dual-diagnosis treatment center that treats patients with addiction problems and mental health issues such as anxiety and depression.
     Under its former incarnation as Foundations
     Associates, the center was managed by Brentwood-based Dual Diagnosis Management, said Rob Waggener, CEO of La Paloma Treatment Center and chief operating officer of Foundations Associates.
     "Dual Diagnosis Management has acquired Foundations Associates. As part of that, we are changing the name (of the Memphis center) to La Paloma," Waggener said, adding
     Dual Diagnosis owned other locations in Palm Beach and Malibu, Calif., that now will be administratively run by Foundations Associates.
     Foundations operates its national call center from La Paloma, Waggener said. The center, which receives about 2,000 calls a month, refers patients to Foundations' three locations, as well as other programs throughout the country, he added.
     La Paloma has about 50 beds currently and is planning a half-million dollar renovation and expansion that will add two cottages - one for men and one for women - with about 16 beds each, he said.
     "What we currently offer at that location is detox, residential (treatment), partial hospital and intensive outpatient,"
     Waggener said. "(The cottages) actually will add a new level of care that is called 'extended care,' so for people who ... are stepping down from a primary-care residential state who need continued housing and treatment, we'll be adding cottages on the back of the property."

Lamson & Sessions Merger With Thomas & Betts Approved

     Lamson & Sessions shareholders have approved the company's $450 million merger agreement with Memphis-based Thomas & Betts Corp.
     The merger agreement was announced Aug. 15 and has been approved by the boards of both companies. The required waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 has expired.
     Under the terms of the agreement, shareholders will receive $27 for each share of Lamson & Sessions common stock. In addition, Lamson & Sessions' board of directors has declared a special dividend of 30 cents per share conditioned on the closing of the merger transaction and payable to shareholders of record as of the closing date of the merger, for a total cash amount of $27.30 per share.
     The merger is expected to close Nov. 5.

Kornegay Honored With National Real Estate Award

     The commercial division of the National Association of Realtors has recognized Brad Kornegay of Colliers Management Services with the 2007 Commercial Alliance National Award.
     The National Award recognizes a select group of commercial Realtors for outstanding professional achievements that previously have been acknowledged on a local level.
     The Memphis Area Association of Realtors Commercial Council nominated Kornegay for the National Award based on his 2006 accomplishments, which the council recognized earlier this year by naming him Commercial Broker of the Year.
     As president and CEO of Colliers Management Services LLC, Kornegay focuses on industrial and investment properties and currently oversees the leasing and management of more than 23 million square feet.
     He joined Colliers in 2004 after spending 12 years with Trammell Crow Co. His current and past clients include Panattoni Development Co., CalEast, AMB Property LP and Principal Capital Management. He serves as an industrial board member of CoStar Group and is a member of the Airport Industrial Park Association, Phi Theta Kappa and Knights of Columbus.

Sales of New Homes Rebound in September

     Sales of new homes posted an unexpected gain in September although the improvement came after sales had fallen to the slowest pace in more than a decade.
     The Commerce Department reported Thursday that sales of new homes rose by 4.8 percent last month to a seasonally adjusted annual rate of 770,000 units. That level of activity was still 23.3 percent below a year ago, indicating that housing remains in a steep downturn.
     Analysts had been expecting sales would fall by 2.5 percent last month from an August sales pace that originally had been reported as 795,000 homes. However, that figure was revised sharply lower in the new report to show a sales rate of just 735,000 in August, the slowest sales pace in 11 years.
     The report on home sales showed the median new home price in September rose to $238,000, up 2.5 percent from August, which had seen prices fall to the lowest level in nearly a year.
     The rebound in home sales was led by a 37.7 percent surge in the West. Sales were also up 0.5 percent in the South. But sales of new homes fell by 19.5 percent in the Midwest and 6.6 percent in the Northeast.
     Losses that began in investments on subprime mortgages, where delinquency rates are soaring, had caused a severe credit crunch in August as the market for many kinds of investments nearly dried up.
     The concern is that if the economic disruptions become serious enough, they could drag down overall economic growth, which has already slowed under the impact of the steep downturn in housing.
     Many analysts, however, believe the economy will still be able to avoid an outright recession because the Federal Reserve, which cut a key interest rate for the first time in four years, will keep cutting rates to stimulate economic growth. The Fed meets again next week.
     In a new report released Thursday, the congressional Joint Economic Committee estimated that 2 million subprime mortgages could go into foreclosure over the next 18 months as initially low introductory rates reset at much higher levels. The report said states will lose $917 million in property tax revenue as housing values are depressed by the wave of foreclosures.

Universal Life Building Named to Historic Register

     Three sites in Tennessee have been added to the National Register of Historic Places, including one in Memphis.
     The Universal Life Insurance Co. in Downtown at 480 Linden Ave. was selected based on its importance as an example of the Egyptian Revival style, according to the Tennessee Historical Commission, which announced the listing. The Egyptian Revival style was a short-lived style popular a century before Universal Life was built, making the building especially unusual, as Egyptian Revival-style buildings from the mid-20th century are extremely rare.
     McKissack and McKissack, historically considered the first black architectural firm in the country, built the building in 1949.
     The Whiteland Area Neighborhood District in Nashville and the Marion Memorial Bridge, southeast of Jasper, Tenn., in Marion County, also were added to the national register.

Federal Reserve Pumps $25.5B In Liquidity Into Markets

     The U.S. Federal Reserve has pumped $25.5 billion in liquidity into the financial system so far this week, raising concerns of continued troubles in short-term funding markets.
     The central bank released $8.5 billion in cash Tuesday and $6.5 billion Wednesday. The intervention came after the Fed pumped out $10.5 billion Monday.
     The Fed's move raised the possibility of more troubles in short-term funding markets. However, the central bank's overnight rate has remained close to its target of 4.75 percent, suggesting that borrowing and lending in the federal funds market are properly functioning.
     Veteran money-market watcher Lou Crandall of Wrightson ICAP downplayed the Fed's operations this week, saying "there is no sign this is a response to anything" other than technical pressures in the Fed funds market.
     The Federal Reserve regularly intervenes in financial markets to achieve the monetary policy goals of the central bank's Federal Open Market Committee. The interventions influence activity in the federal funds market, where banks borrow and lend short-term funds.
PROPERTY SALES 85 205 21,165
MORTGAGES 76 206 24,338
BUILDING PERMITS 183 321 43,755
BANKRUPTCIES 48 92 13,560