NEWS AT A GLANCE
Office rents soften, in a mixed blessing
Companies are using less office space across the U.S., according to real estate research firm Reis, and that’s cutting into commercial rents in most markets. That’s bad for landlords, but it’s bringing welcome rent relief to businesses. Nationwide, office rents rose 0.7 percent in the second quarter, less than inflation and way down from last year’s 3.2 percent growth. (Reuters) The sharp slowdown could spell trouble for real estate deals done last year on the assumption of continued strong rent growth. “Landlords are having to concede ground on rents and tenant improvements,” says Reis chief economist Sam Chandan. “The balance is tipping in the favor of tenants in many markets.” (The Wall Street Journal)
American Airlines downsizes, explores foreign alliance
American Airlines said it’s cutting almost 7,000 jobs, or 8 percent of its workforce, as it downsizes flights and pulls airplanes from service amid high fuel costs. The airline expects to take up to $1.3 billion in charges relating to severance and aircraft retirement. (The New York Times, free registration) The job cuts, including up to 900 flight attendants, will bring American to fewer than 80,000 workers, its lowest staffing level since 1988. (The Dallas Morning News) American is also seeking antitrust immunity to form a joint venture with British Airways and Spain’s Iberia, including profit and revenue sharing. The venture would form a powerful transatlantic link between Europe, the U.S., and Latin America. (Financial Times, free registration)
Asian and European markets dip as oil rises
New record-high oil prices and a decision by the European Central Bank to raise interest rates sent overseas markets to a five-month low. (Reuters) Japan’s Nikkei 225 ended its 11th consecutive session in the red, in its worst losing streak since 1965. Most other Asian markets closed lower, too. (MarketWatch) Oil futures passed $145 a barrel for the first time and neared $146 in New York early today, after the U.S. reported lower stockpiles. “The rise of European interest rates has been priced into oil,” said Purvin & Gertz analyst Victor Shum, but the “official announcement by the ECB will still add momentum to oil prices.” (AP in Yahoo! Finance) The ECB raised its key lending rate by 25 basis points, to 4.25 percent. (AP in CNNMoney.com)
Mildly entrepreneurial, and loving it
As the first wave of America’s 76 million baby boomers starts retiring, some are using their hard-won free time to turn hobbies into very small businesses. Call them microbusinesses. These laid-back entrepreneurs tend to use their business as a way to focus on something they like, fill excess time, and maybe even make some money. But unlike traditional entrepreneurs, the retired boomers aren’t too focused on success. “I’m not out to make money or change the world,” says pharmaceutical-neuroscientist-turned-nature-photographer Carl Boast, 60. But he’s found unexpected pleasure in selling a photo to a buyer, he says, “especially if it’s a perfect stranger.” (The New York Times)
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