Wheeler files IPO for real estate investment trust

n a complicated financial arrangement, Jon Wheeler, president and CEO of commercial real estate firm Wheeler Interests in Virginia Beach, has filed an initial public offering for the formation of Wheeler Real Estate Investment Trust.

 A prospectus was filed with the Securities and Exchange Commission Oct. 10 creating the firm, a real estate investment trust.

 “We can confirm we filed,” Wheeler said. “Unfortunately, we’re in the quiet period and I can’t talk about it. I would love to. But the constraints and restrictions of what we can say and can’t say won’t allow us to.”

 REITs are treated differently by the Internal Revenue Service than other corporations. In return for reduced taxes, REITs must distribute at least 90 percent of taxable income to shareholders in the form of dividends every year.

 REITs must invest at least 75 percent of total assets in real estate and derive at least 75 percent of gross income as rents from real property or interest from mortgages on real property.

 REITs are measured by their net asset value, funds from operations, adjusted funds from operations and cash available for distribution.

 Wheeler plans to raise $23.8 million through a sale of 2.5 million to 3.4 million shares priced between $5 and $7 a share. If 2.5 million shares aren’t sold by Feb. 28 of next year, Wheeler will return the money to investors and withdraw its IPO.

 Wheeler expects net proceeds from the sale may range from $13.2 million to $18.3 million.The money will be used to pay down debt, for working capital and for reimbursement of the company’s operating partnership. The remainder, which may range from $9.5 million to $14.6 million, depending on the final share price, will be used to buy properties.

 Wheeler listed total assets of $32.2 million and total liabilities of $30.8 million for six months of this year, ending June 30.

 Wheeler posted a $78, 759 loss for the first six months and a $1,359 gain for the same period in 2010.

 For 2010, Wheeler registered a $98,157 gain, down from a $179,000 gain for 2009. Assets for 2010 totaled $32.7 million, up from $30 million in 2009. Liabilities for 2010 totaled $30.8 million, up from $27.8 million for 2009.

 Wheeler Real Estate Investment Trust was formed as a Maryland corporation on June 23. Jon Wheeler, chairman and CEO, is the company’s second largest stockholder. WHLR Management LLC, which is wholly owned by Jon Wheeler, will provide administrative support to Wheeler Real Estate Trust.

 The REIT will have access to several companies in which Jon Wheeler is owner, including Wheeler Interest Inc., an acquisition and asset management firm; Wheeler Real Estate LLC, a real estate leasing management and administration firm; Wheeler Capital LLC, a capital investment firm specializing in venture capital, financing and small business loans; Site Applications LLC, building maintenance; and Creative Retail Works, a design firm; and TESR LLC, tenant relations and community events.

 Wheeler, the new firm’s executive officer, will be paid a minimum of $18,50 a month. Steve Belote, the firm’s chief financial officer, will be paid a minimum of $10,000 a month. The firm will also pay both executives expenses related to company business and benefits.

 Wheeler has worked for Harbor Group International, Divaris Real Estate, Total Retail Management in Washington, D.C., and Federal Realty Investment Trust in Rockville, Md. In 1999, he partnered with Harrison Perrine to develop and own commercial properties.

 In 2006, Wheeler bought Perrine’s interest in the company and formed Wheeler Interests, which now has a portfolio of 368,865 square feet and includes six retail shopping centers, two free-standing retail properties and one office building in Virginia, Florida, North Carolina and Oklahoma.

http://insidebiz.com/news/wheeler-files-ipo-real-estate-investment-trust

Signs Point to Economy’s Rise, but Experts See a False Dawn

As the fourth quarter draws to a close, a spate of unexpectedly good economic data suggests that it will have some of the fastest and strongest economic growth since the recovery started in 2009, causing a surge in the stock market and cheering economists, investors and policy makers.e

In recent weeks, a broad range of data — like reports on new residential construction and small business confidence — have beaten analysts’ expectations. Initial claims for jobless benefits, often an early indicator of where the labor market is headed, have dropped to their lowest level since May 2008. And prominent economics groups say the economy is growing three to four times as quickly as it was early in the year, at an annual pace of about 3.7 percent.

But the good news also comes with a significant caveat. Many forecasters say the recent uptick probably does not represent the long-awaited start to a strong, sustainable recovery. Much of the current strength is caused by temporary factors. And economists expect growth to slow in the first half of 2012 to an annual pace of about 1.5 to 2 percent.

Even that estimate could be optimistic if Washington lawmakers fail to extend aid for the long-term unemployed and a payroll tax cut for the United States’ 160 million wage earners.

At stake is about $150 billion, the bulk of which would go to middle-class families and the unemployed. If Congress does not pass the measures, economists say, it would significantly weaken growth from already-damped levels anticipated early in the new year.

“Unfortunately, I think we’re going to see a slowdown over the course of next year,” Ethan Harris, co-head of global economics research at Bank of America Merrill Lynch, told reporters last week. “Not only do we have the European crisis spilling over and hurting U.S. trade and confidence,” he said, but the United States economy also faces “homegrown shocks.”

There are two reasons for the renewed pessimism. First, economists say that temporary trends increased growth in the fourth quarter and may not continue into next year. Second, the economy faces significant headwinds in 2012: some from Europe’s long-lingering sovereign debt crisis, and some from domestic cutbacks beyond the control of President Obama, whose campaign would like to point to a brightening economic picture, not a darkening one. Even the Federal Reserve is predicting that the unemployment rate will remain around 8.6 percent by the time voters go to the polls in November.

The fourth quarter benefited, for instance, from wholesalers restocking inventories of goods like petroleum, paper and cars, giving a jolt to growth.

“We had lean inventories, so those required additional production to satisfy demand,” said Gregory Daco of IHS Global Insight. “But once inventories are restocked, there is no need to restock them anymore. That means there’s going to be less production,” he said.

Consumers also pulled back on their savings, helping to finance a recent spurt in spending. a trend that forecasters doubt will continue. Other short-lived factors include falling gasoline and commodity prices, and an increase in orders from Japanese companies returning to business after the devastating spring tsunami.

But next year, Washington is increasing some taxes and reducing spending as temporary measures enacted during the worst of the recession expire. That will damp growth by a percentage point or more next year, forecasters say. Provisions like a tax write-off to help businesses pay for equipment are winding down or ending.

Most worrying is the prospect that Congress will drop aid for the long-term jobless and allow payroll taxes to rise to 6.2 percent from the current level of 4.2 percent, amounting to a $1,000 tax increase on the average wage earner. Macroeconomic Advisers, a prominent forecaster, estimates that the expiration of the two provisions could cost the economy 400,000 jobs and cut growth by half a percentage point next year.

How and when Congress acts will also have an important, if impossible to quantify, impact on consumer and business confidence, economists say. Households and companies uncertain about their income, unclear about their tax rates and lacking confidence in their government might hold off on major financial purchases and tighten their purse strings.

Then there is Europe.

“If there is some Lehman-type event in the first half of the year, it will have a big impact,” said Joel Prakken, chairman of Macroeconomic Advisers. The collapse of Lehman Brothers, a New York investment bank, in late 2008 helped set off the financial crisis.

Even without such a major event, forecasters say problems on the Continent will weigh on American growth next year. Investor flight from assets denominated in the shaky euro have made the dollar stronger and American exports less competitive abroad. The euro zone’s woes have also made a global slowdown more likely, which could mean a reduction in American exports to emerging-market countries as well.

For now, Democrats and Republicans remain at loggerheads, blaming each other for the uncertainty around the payroll tax rates and aid for the unemployed.

“A two-month extension creates uncertainty and will cause problems for people who are trying to create jobs,” John Boehner, Republican of Ohio and speaker of the House, said on Monday.

“The clock is ticking. Time is running out,” President Obama said at a White House news briefing on Tuesday. “One of the House Republicans referred to what they’re doing as ‘high-stakes poker.’ He’s right about the stakes, but this is not poker. This is not a game.”

http://www.nytimes.com/2011/12/22/business/signs-point-to-economys-rise-but-experts-see-a-false-dawn.html?_r=1&ref=business

Tax information: The Value Added Tax

The Tax collection statistic comes from theAnnual Tax Collection Reports in the case of State managed taxes and in the case of assigned and agreed taxes, from theInformative Summaries on the Collection of Assigned and Agreed Taxes, issued by the General Inspection of the Ministry of Economy and Tax

The Economic and Tax Results in VAT statistic is a piece of census type research based on the information supplied by the economic agents via the "Annual Summary".

The Annual Accounts in Corporate Tax statistic is based on the annual Corporate Tax returns from entities that have their domicile for tax purposes in the Common Tax System Territory.

Income Tax details are derived from the breakdown of some of the tax variables that are included in the forms on which the income tax declaration/self-return is presented. Information from returns presented at Autonomous Inland Revenues (C.F. de Navarra and País Vasco) is not included.

The data come from the State Tax Administration Agency and from the BADESPE database, which is developed by the Institute of Tax Studies. Both of these belong to the Ministry of Economy and Tax.

http://www.ine.es/jaxi/menu.do?type=pcaxis&path=%2Ft45%2Fp062&file=inebase&L=1

Bell settles 'say on pay' suit

Cincinnati Bell Inc. says it has approved a proposed settlement in a shareholders’ lawsuit over pay increases given in 2010 to top officers of the telecommunications company.

The lawsuit, filed in the Hamilton County Court of Common Pleas, challenged the pay increases for chief executive officer Jack Cassidy and other top officers in light of a shareholders’ “say on pay” advisory vote in May that opposed board approval for the higher compensation.

Terms of the settlement, subject to a court hearing and final approval, weren’t disclosed.

The lawsuit came after Bell’s net income fell 68 percent last year to $28.3 million, or 9 cents a share, from $89.6 million, or 37 cents a share, in the prior year as the company completed a $525 million acquisition of Texas-based data center CyrusOne.

The acquisition was strategically important to Bell, which is remaking itself into a leading provider of corporate data centers to serve the growing appetite for computer servers, storage gear and network connections for the online world. The CyrusOne purchase has since fueled both higher earnings and revenue, the company has reported.

In its 10K filing with the Securities and Exchange Commission, the company said the drop in net income was “a result of increased interest expense associated with the CyrusOne acquisition and debt refinancings, losses on extinguishment of debt and acquisition-related expenses.”

Bell’s board of directors last year awarded pay increases to top executives —raises that were influenced in part by the successful CyrusOne acquisition.

Cassidy’s compensation increased 71 percent to $8.5 million. Gary J. Wojtaszek, then Bell’s chief financial officer and now president of CyrusOne, saw his compensation increase 80 percent to $2.07 million; and Christopher J. Wilson, vice president and general counsel, saw his compensation increase 54 percent to $1.4 million.

Cassidy’s salary included a $4 million bonus, which according to the proxy was “to recognize (his) contributions to the company over the years, particularly his leadership as chief executive officer, and to ensure his retention during the next few years of transformative growth in the technology solutions/data center segment.”

http://news.cincinnati.com/article/20111221/BIZ/312210034/Bell-settles-say-pay-suit?odyssey=tab|topnews|text|

Residents vow to appeal re-zoning decision

Some local residents plan to appeal the re-zoning of the “Nelson Street Park” to the Ontario Municipal Board after council voted 6-1 on Monday night in favour of amending the zoning bylaw to re-zone the property for residential development.
Council also passed a bylaw to re-zone the property on the corner of Minnie Avenue and Front Street from tourist commercial (C4) to “open space” to offset the eliminated open space that would result from the conversion of the “Nelson Street Park.”


Read more:
http://fftimes.com/node/248082

Inflation rate hits 12-month low

Inflation in Ottawa in November dropped 20 basis points to 2.5 per cent, according to Statistics Canada figures

This is the lowest threshold for the 12-month average change in the consumer price index in 2011. The highest was four per cent.

Statistics Canada does not break out local drivers, instead focusing on provincial figures. In November, inflation in Ontario fell at the same rate as in Ottawa, to 2.5 per cent from 2.7 per cent in October.

The major drivers in Ontario were food prices, which at 6.7 per cent were the highest in Canada and well above the national rate. Gasoline also greatly influenced inflation, with an increase of 11.6 per cent.

"Typically, we've seen that Ontario gasoline price increases have been above the Canadian year-over-year change, with the exception of the last two months," said Amanda Wright, a CPI analyst with Statistics Canada, in an OBJ interview.

Shelter also saw a small increase of 0.9 per cent. Provincial declines were posted in electricity (3.9 per cent), women's closthing (4.6 per cent) and mortgage interest costs (one per cent.)

Ontario's inflation was at the lower end of provinces and territories in Canada. Only British Columbia (2.3 per cent) and Nunavut (2.2 per cent) came in lower. The highest was Newfoundland and Labrador, at 4.1 per cent.

Nationally, Canada's inflation rate was unchanged at 2.9 per cent, although the agency pointed out food prices rose sharply month-over-month.

The 4.8-per-cent national gain in food prices was the largest since July 2009, the agency said. Energy also rose substantially, by 13.5 per cent.

Shelter and car insurance also rose, while declines were seen in home mortgage and interest, natural gas and furniture, among other items.

http://www.obj.ca/Local/2011-12-20/article-2842461/Inflation-rate-hits-12month-low/1

ECB aid to banks a mixed blessing

The good news is the European Central Bank seems prepared to offer virtually unlimited liquidity to banks in need of cash. The bad news is the banking sector in Europe needs it.

The central bank opened its tills to all comers on Wednesday, offering long-term, low-interest loans designed to keep money flowing through the financial sector and prevent a credit crunch.

A total of 523 banks took up a total €489-billion in loans, well exceeding the central bank’s intervention after the fall of Lehman Brothers Holdings Inc.

“That is the most important action they could take,” said Eric Lascelles, chief economist at RBC Global Asset Management. “Offering liquidity to illiquid banks is absolutely necessary to prevent disaster.”

Markets saw things differently, pushing yields on Italian and Spanish debt higher, while European stocks fell across the board, for at least a couple of reasons.

First, the headline tally on the ECB’s tender was mitigated by expiring liquidity operations, with net new liquidity amounting to about €200-billion.

Also, markets seemed to interpret the size of the intervention as an indication of the size of the problem.

“The big figure was welcomed initially but huge demand for ECB loans is not exactly a massive positive and really just reflects the huge squeeze European banks are feeling at present,” said Richard Driver, an analyst at Caxton FX in London.

All of which discounts the significance of the liquidity offering, Mr. Lascelles said. The ECB has gone a long way to easing one of the more urgent pressures of the crisis: How to refinance €600-billion of bank debt expiring in 2012.

“You’ve taken this rollover risk out of the banking sector for three whole years, which anyone has to think will be a sufficient amount of time to get Europe back to something resembling normal or at least more stable,” Mr. Lascelles said.

The large take-up does serve to warn that “banks are urgently in need of funds to boost liquidity,” said Jennifer Lee, a senior economist at BMO Capital Markets. “But at least they have somewhere to turn to.”

As the ECB has established itself as a steadfast lender of last resort to the banking sector, it refuses to assume the same role for eurozone countries, a practice prohibited by treaty. Both the central bank and its chief benefactor, Germany, reject quantitative easing as unfit for Europe.

At the same time, eurozone’s central bankers hope a flood of cheap money might achieve much the same effect.

Banks were invited to borrow as much as they liked at a rate of 1%, creating a carry trade incentive to use that money to pursue higher yield securities.

Further, recently relaxed banking rules now include peripheral debt as allowable collateral, drawing banks back into the market for high-yield sovereign bonds, Mr. Lascelles said.

“That is being viewed as a back door way of buying government bonds,” he explained. “It’s arguably taken a fair chunk of sovereign debt off the market that won’t be sold in a panic any time soon.”

A second liquidity operation is scheduled for February.

Of course, the optics of encouraging European banks to build up exposure to sovereign debt are not great.

The risks inherent in those bonds, however, are presumably fairly reflected in market yields, Mr. Lascelles said. “When you’re buying Greek debt, a default is priced in, so you won’t lose money on a default. The greater risk is debt that was held all along.”

Still, banks could conceivably shy away from risky debt, if only for the sake of their reputation among investors.

“If you’re a French bank, do you want to be seen buying Italian bonds?” said Marc Chandler, global head of currency strategy at Brown Brothers Harriman.

“The reason European banks have not been buying peripheral is not because they couldn’t get cheap enough funding. The reason they didn’t buy European bonds is because they’re in the process of deleveraging.”

http://business.financialpost.com/2011/12/21/ecb-aid-to-banks-a-mixed-blessing/