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Weekly News (April 1, 2020)

This week’s Interest Rate (14th Week)

(Fairway Asset)

 30 Y Rate: 3.625%/ 15 Year Rate:3.125%/ 10 Y Treasury: 0.687%/  FHA:3.490%
 Prime Rate:3.0% / Ref IR: 0.00- 0.25%

 

WeWork kept most of it locations open:Only two offices are closed in N. America

(The NYT  3/25)

  • In the fight against the spreading COVID-19 countless businesses, restaurants and bars have temporarily shuttered to stop people from congregating.
  • WeWork closed only two locations in North America and none was closed in Europe, according to WeWork website.  But most of tenant have changed to work-at-home mode and a wide spread shutdown could deal a grievous blow to WeWork, once celebrated start-up that was already struggling.
  • Softbank last week threatened to walk away from a tender offer to buy $3B of existing shares from other WeWork shareholders.  If that transaction does not happen, WeWork would not receive $1.1B in debt financing that is part of Softbank’s rescue.

 

Commercial RE market might be in difficulty because of COVID-19

(The Korea Times 3/26)

  • According to WSJ, conflict between landlords and tenants has been increased sharply.  Tenants insist to exempt or delay rent and landlords try to receive it.
  • Large part of US, eviction due to non-payment of rent is prohibited. Landlords are getting pressure of mortgage payment from the banks.
  • Total commercial loan is about $3T.

 

US home prices rose 3.1% annually in January 2020

(The  Record   4/1)

  • US home price growth was showing signs of acceleration in January, a sign of solid demand that existed before the COVID-19 outbreak caused millions of job losses and tossed the US economy into a likely recession.
  • Lower interest rates and solid job gains had been fueling interest from would-be home buyers, but the housing market is now in a moment of tumult as the viruse0induced downturn has led to fears of missed mortgage payments.

 

Affordable Luxury Group signed up the lease for a 2,138 sf to use as office and showroom (55/sf)

  • A fashion accessories company signed a 7 year lease in this building at 10 West 33rd St, Manhattan between Broadway and Fifth Ave in Koreatown.  The Building known as Fashion Accessories Center was built in 1914.
  • Other tenants include A Classic Time Watch Company, Rugged Equipment and Design Concepts.
  • Landlord is Ten West Thirty Third Associates and the broker was David Levy of Adams & Company.

 

Former chair of Fed Reserve, Bernanke is somewhat optimistic on CODIV-19 

(The Korea Daily  3/26)

  • Bernanke mentioned that COVID-19 situation is close to rather natural disaster such super snow storm, not like the Great Depression in 1930: hopefully there will be short and deep recession, but fast rebound of economy will be followed if employment and businesses are not critically damaged.
  • Also he mentioned the current chair Powel presented various positive programs and tactics during this shutdown period.
  • James Bullard, chair of St, Luis Reserve Bank shared similar view: after passing pinnacle COVID-19 situation with big shock such as perhaps 30% unemployment, it will turn around sharply.

 

CDC might recommend wearing mask to all citizen in the public places in US 

(The Korea Daily  4/1)

  • CDC will change their guideline and they are preparing new guideline to recommend wearing masks even it is a cloth mask.  According to CDC recommendation, President Trump might ask US citizen to wear cloth mask, not necessarily N-95 or medical mask.
  • Currently there is shortage of masks worldwide.
  • According to CDC basic guideline, still there is no need to wear mask for a healthy person.

 

Nationwide, gas price is going down

(The Korea Daily  4/1)

  • According to AAA Northeast, gas price is average $1.997 while it was $2.48 a week ago.  This means the gas price has dropped 18.3% from the right before the COVID-19 outbreak.
  • According to Crain’s NY, gas sales has been dropped by 70% due to reduced traffic on the roads.  In NY, average gas price is $2.33 per gallon and in NJ average gas price is $2.188 per gallon.
  • According to Bloomberg, they forecasted that the gas price might drop to $1.00 level.
  • In NYC, most gas station business are suffering because of relative high rent which could be max. $29,000 per month.

 


 

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Stephen Lee

He has been in Real Estate industry in about 20 years and has been Broker of Record for 9 years. His experience includes residential, commercial, and property management. Prior to involving with Real Estate business, he has been involved in the digital communication equipment industry utilizing his engineering background and education, including running own company. He has established C Land Realty in 2011 which has grown to staffing over 100 Real Estate agents and the annual transaction amount of over $110,000,000 today.

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