VOL. 122 | NO. 188 | Thursday, October 4, 2007
California Investors Buy Site of Millington IHOP
Flapjacks Millington Venture LLC has sold property at 8484 Wilkinsville Road for $2.7 million to Richard and Dorothy Ehikian, with a 75 percent undivided interest, and Fathy Real Estate Partners, with a 25 percent undivided interest. Both buyers are based in San Francisco.
A mortgage for $750,000 was taken out from Citibank NA. It has a maturity date of Oct. 1, 2017.
The 1.2-acre site currently is the location of an IHOP restaurant. Richard Ehikian declined to comment except to say he bought the site as an investment property, and that there are no plans to make any changes to the property or the restaurant.
The 5,012-square-foot building was built this year, according to the Shelby County Assessor of Property. The 2007 appraisal for the property was $319,500.
Baker Donelson Forms Subprime Mortgage Task Force
Baker, Donelson, Bearman, Caldwell & Berkowitz PC has formed a Subprime Mortgage Task Force, a multi-disciplinary practice group of attorneys from across the firm's five-state and Washington region.
The task force of attorneys and advisers will help clients in all aspects of default representation, with state and federal public notices such as pending subprime mortgage legislation, quality control/quality assurance review of suspect loans and other issues related to the current mortgage lending crisis.
Linda S. Finley, a shareholder in the Atlanta office, and Hank Arnold, a shareholder in the New Orleans office, are leading the effort.
Deutsche Bank to Write Off $3.12B From Subprime Losses
Deutsche Bank AG said Wednesday it will write off around $3.12 billion related to the U.S. mortgage morass, but that gains from asset sales and tax credits still will help Germany's biggest bank earn a third-quarter profit of about $1.98 billion.
In the face of the 2.2 billion-euro writedown, the latest to hit major banks in the United States and Europe, Chief Executive Josef Ackermann remained upbeat about the bank's future and the industry.
"Despite a challenging quarter for our investment banking franchise, our 'stable' businesses continue to perform well," Ackermann said in a statement. "We see substantial opportunities in investment banking after this period of correction."
The news sent Deutsche Bank shares up 2.4 percent to 95.74 euros ($135.90) to lead the Frankfurt DAX.
Deutsche Bank said in a statement that it would take a charge of approximately 1.5 billion euros ($2.13 billion) on residential mortgage-backed securities, structured credit products, along with as much as 700 million euros ($991.6 million) on its leveraged loans and loan commitments.
Deutsche Bank National Trust Co. was the No. 2 seller of residential real estate in Shelby County between Jan. 1 and Sept. 30, with 462 sales totaling more than $27 million, according to real estate information company Chandler Reports. The bank sold 228 residential properties totaling $15 million in the same period of 2006 and 112 totaling $5.8 million in the same period of 2005.
Banks that buy back foreclosed properties from borrowers sometimes resell them at a loss.
The troubles at the German bank underscore the widespread impact of failed U.S. loans to people with weak credit, also known as subprime mortgages. Similar writedowns are hurting other big banks, including Citigroup and UBS, though analysts believe that investors and not account holders will feel most of the pain.
Still, Deutsche Bank expects third-quarter net profit to hit 1.4 billion euros, higher than a year ago, and reiterated its goal of posting a pretax profit of 8.4 billion euros ($11.9 billion) for 2008.
The bank is scheduled to release its third-quarter results Oct. 31.
The credit market turmoil began with rising defaults in the United States on subprime mortgages, but spread because banks had repackaged those loans with more reliable ones and sold them to a wide range of investors, including several European banks. Credit dried up in early August, roiling financial markets, as banks became wary of exposure to the risky loans.
Land Deal for Tunica Resort Postponed to November
Another postponement has taken place in a deal Myriad Entertainment & Resorts Inc. has in the works to buy more than 500 acres of land in Tunica County for a planned $1.3 billion destination resort.
The land purchase agreement has been amended to push the closing date back by as much as 45 days, and it's now expected to close by Nov. 15. The first phase of the resort development tentatively will include building two of the project's six total casinos, 1,000 casino hotel rooms, a 150,000-square-foot convention and exposition center with a 600-room hotel and a 5,000-seat entertainment arena. Discussions also are continuing with funding partners to finance the massive entertainment and resort complex.
Grand Casino to Undergo Name Change, Overhaul
The Grand Casino Resort Tunica is set to undergo a $45 million renovation that will include adding a 560-seat buffet style restaurant.
The renovation is being carried out by Grand Casino's parent company, Harrah's Entertainment Co. and the Food Network. The new restaurant, the Paula Deen Buffet, is expected to open in May.
In conjunction with the renovation, the Grand Casino's name will change to Harrah's Casino Tunica.
The installation of Paula Deen's buffet at the newly named Harrah's Casino Tunica will be the beginning of the transformation of the entire second floor into an entertainment promenade consisting of three retail outlets and three food outlets.
The overhaul will include a refurbishment of the rooms, new beds, carpet and furniture. Rooms will be refurbished by floor with the first hotel tower to be completed by May and the second tower to be completed by September.
Two County Airports Receive Grants
A pair of Shelby County general aviation airports, Charles W. Baker Airport and General DeWitt Spain Airport, have received state aeronautics grants for $51,731 and $29,556, respectively, Gov. Phil Bredesen announced Tuesday.
The funds will be used to replace runway lights, among other things at both facilities.
The grants are made available through the Tennessee Department of Transportation's Aeronautics Division, which issued more than $800,000 for 10 airports in the state.
U.S. Service Economy At Slower Pace in Sept.
The U.S. service economy, feeling the drag of the slumping housing market, expanded at a slower pace in September than in August, a trade group said Wednesday.
The Institute for Supply Management's (ISM) index gauging the health of non-manufacturing industries registered at 54.8 in September, down from 55.8 in August and below the 12-month high of 60.7 reached in June.
The index, now at its lowest point since March, was in line with economists' estimates. A reading above 50 indicates economic expansion in the service sector, while one below 50 indicates contraction.
The service sector makes up 80 percent of U.S. economic activity, and on Monday the ISM also reported weakening growth in the manufacturing sector.
With both of these portions of the economy losing steam, the Federal Reserve may feel more inclined to lower interest rates further.
On Sept. 18, the Fed reduced a key rate by a half-point, and meets again at the end of October to decide whether to make borrowing even cheaper and, in turn, stoke spending.
However, within the ISM's report are items that might give the Fed pause: expansion in employment and accelerating prices - a sign that inflation might not be easing, as the central bank hopes. The employment index logged in at 52.7 in September, up from 47.9 in August, and the prices index was at 66.1, up from 58.6.
Businesses including banking, health care, retail, utilities, transportation and wholesale trade reported growth in September, but industries such as agriculture, professional services, and arts and entertainment said business activity decreased.
Le Bonheur Teams With Wolfchase Dealerships
Le Bonheur Children's Medical Center has teamed with two Wolfchase-area car dealerships to raise money for the hospital.
Through a partnership with Wolfchase Honda and Wolfchase Nissan, anyone who buys a car at either dealership will be given the opportunity to make a donation to Le Bonheur.
The partnership to raise funds will continue through August.
Le Bonheur currently is raising money for a new $327 million hospital that is set to open in the summer of 2010. The new hospital will be at Poplar Avenue and Dunlap Street adjacent to the current Le Bonheur campus.