Monday, May 4, 2015

POSTED: Monday, May 4, 2015, 4:22 PM

NJ Gov. Chris Christie today declined to sign Senate Bill 2430, which would have expanded reporting of millions of dollars in annual fees paid by the state's chronically underfunded state and local government pension system to private firms that invest the money and provide more detail on their political contributions. 

"I agree it is important to disclose the fees... so that we can identify where our success in private investments is greatest," Christie said in a statement. "However," he added, "many of the premiere fund managers may elect not to continue a relationship with the State if their confidential fee arrangements will be made public," which could lead to "suboptimal returns."

Christie did not cite any examples of "premiere" fund managers who are afraid to have their fees disclosed, and a state Treasury spokesman didn't provide examples. 

Joseph N. DiStefano @ 4:22 PM  Permalink | 0 comments
POSTED: Monday, May 4, 2015, 4:02 PM

Egan-Jones Ratings Corp. has followed proxy advisory fims Institutional Shareholder Servcies (ISS) and Glass Lewis & Co. in urging DuPont Co. shareholders to vote for billionaire activist Nelson Peltz to win election to the DuPont board over company-backed incumbents in a contested election May 13.

Egan-Jones has joined ISS in also endorsing former GE Capital executive John Myers, a Peltz ally. Egan-Jones has also gone further by also recommending votes for the other two Peltz-backed insurgents, Arthur B. Winkleblack, and Robert J. Zatta. 

Writes Egan-Jones re DuPont: "While we note that as shown in the Egan-Jones Ratings Corporate Stewardship & Compensation Analysis Report the overall rating for this company is "GOOD” (http://comprtg.com) we are concerned that the dissident thesis is correct and while current macro-economic conditions and lower feedstock pricing have allowed this company to produce a decent shareholder return despite high administrative costs and other failures and that there is ample opportunity for far better returns. 

Joseph N. DiStefano @ 4:02 PM  Permalink | 0 comments
POSTED: Monday, May 4, 2015, 12:45 PM

Philadelphia real estate tax revenues slipped to $981 million in the three months ended March 31, from $991 million in early 2014 and just over $1 billion in 2013, says elected Philadelphia city controller Alan Butkowitz (corrected) in a report today. 55% of real estate tax money goes to the city public school system, which has limited taxing authority and is otherwise dependent on city and state payments. 

Under that formula, schools collected $541 million from the tax so far this year; city government got the other $440 million. Most real estate taxes are collected during the first quarter. According to Butkowitz, the school faces a budget shortfall of $25 million due to lower real estate tax collections this year. 

Why the drop, if housing prices and construction in neighborhoods surrounding Center City and the universities keeps rising? "The City hasn’t indicated a reason as to why the real estate collections are down," controller spokesman Brian Dries told me. "Last year when the collections dropped during the same quarter, the City attributed it to the backlog in assessment appeals from the Actual Value Initiative." Still backlogged? Butkowitz wants to know more. 

Joseph N. DiStefano @ 12:45 PM  Permalink | 0 comments
POSTED: Monday, May 4, 2015, 12:05 PM

A string of large U.S. data centers "are being shopped" by owners including AT&T and Verizon, reports analyst Kevin Smithen at Macquarie Research. Verizon is looking to raise cash from its modern Terramark systems, while keeping its cloud infrastructure business. But, other than Terramark, Verizon and AT&T data assets are mostly "outdated legacy facilities" that modern center operators aren't likely to want, Smithen added.

Separately, Telx Group, one of the major private data center providers, is For Sale by owners Berkshire Partners and ARBY Partners, with 20 data centers on offer at $2 billion. Cervalis Holidngs LLC and its 4 data centers has agreed to be acquired by publicly-traded CyrusOne (CONE) for $400 million. And Carlyle Group is cashing out part of its interest in CorSite Ralty (COR), Smithen says.

Amazon Web Services (AWS)'s large capability has become both a stimulant and "an emerging threat" for data center operators, Smithen concludes. 

Joseph N. DiStefano @ 12:05 PM  Permalink | 0 comments
POSTED: Monday, May 4, 2015, 11:34 AM

(Revised) Less than two years after opening a Philadelphia office, Avison Young, a Toronto-based company that calls itself "the fastest-growing commercial real estate service provider in the world," has taken over a local project-management competitor, Remington Group, and its Wayne headquarters. Terms of the deal weren't disclosed.

"Project management is integral to us," along with design and construction servcies, David Fahey, Avison Young's Philadelphia-based principal and managing director, told me. "Remington was Number One on our target list." Remington founder William Connor will report to him.

"We are taking what was Remington to the next level, bringing Avison Young services to where our reach will be much broader," Connor told me. "For full service companies like Avison, project management is a key resource to be able to offer their clients."

Joseph N. DiStefano @ 11:34 AM  Permalink | 0 comments
POSTED: Thursday, April 30, 2015, 12:48 PM

For customer satisfaction: Susquehanna Bank rates tops among 31 mid-Atlantic banks, while Bank of America ranks near the bottom all across the country, says McGraw-Hill Financial's JD Power agency, in this report on its survey of 80,000 U.S. consumers.

Susquehanna was awarded 834 points out of a possible 1,000, with particular praise for its 245 branches and its electronic banking services. While "mobile banking and mobile deposit (use) is on the rise, branches are still important to customers," even young people, Susan Bergen, chief marketing officer at Susquehanna, told me.

JD Power data shows people in their 20s -- the smartphone generation -- typically visit a bank branch once a month -- which is a little more than people in their 30s and 40s. Customers want to be able to meet with bankers, in person, to talk about loans and investments, Bergen said. 

Joseph N. DiStefano @ 12:48 PM  Permalink | 0 comments
POSTED: Thursday, April 30, 2015, 12:32 PM

The U.S. Postal Service's Inspector General in this report recommends the agency fire CBRE Inc., the largest U.S. real estate broker, and re-bid the company's four-year-old contract for leasing private properties and selling surplus offices for the Postal Service.

The agency says CBRE's practices of representing its own private-sector clients -- buyers of surplus Post Office facilities, as well as landlords who rent sites to the Post Office -- at the same time CBRE is paid to get the best rental and sales prices for the Postal Service "are inherently risky and create conflicts of interest."

CBRE "followed the standard business practices explicitly defined in our contract," and is "committed to cooperating with any governmental review," said spokesman Robert McGrath in response. (More details from CBRE's response near the end of this item.)

Joseph N. DiStefano @ 12:32 PM  Permalink | 0 comments
POSTED: Thursday, April 30, 2015, 10:03 AM

(Friday update:) After posting flat sales but rising profit margins in its first-quarter earnings last week, DuPont Co. "will reach an agreement with Mr. Peltz" before the May 13 board meeting, predicts Carol Levenson, analyst at bond research agency Gimme Credit in New York, in a report to clients.

Levenson says DuPont CEO Ellen Kullman's efforts to placate activist investors led by Nelson Peltz and his Trian Fund Management have already resulted in (1) cost-cutting that has boosted DuPont margins to nearly 20 percent, highest (for the first quarter) since 2010; and (2) the company's decision to give $4 billion from the planned spinoff of Chemours (kem-OARS), DuPont's cyclical but highly profitable titanium-dioxide (white pigment) unit, to shareholders instead of using it to pay down debt 

 (Thursday:) Shareholders' adviser Glass, Lewis & Co. LLC has endorsed billionaire activist investor Nelson Peltz for a seat on the DuPont Co. board. The move follows support for Peltz by another adviser, Institutional Shareholder Services Inc., on Monday.

Joseph N. DiStefano @ 10:03 AM  Permalink | 0 comments
About this blog

PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

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