Weekly News (October 3, 2018)

1. Korean Restaurant “GumKangSan” filed bankruptcy again

  • The restaurant (Owner: JiSung Yoo) filed chapter 11 on 7/12/2018
  • Frist chapter 11 filed in 2015 during wage dispute
  • Debt is about $500K- $1M and Loaners are about 49, including fine by NYC fire department ($41,000) and Health department ($35,000)
  • Real reason to file chapter 11 this time is to protect eviction by landlord
  • Total debt to LL is about $810,000 (rent: $189,000/ tax:$244,000/ water: $48,000, etc)
  • According to the restaurant owner, it is reaction from that LL could not sell the property due to the lease contracted till 2024
  • 2015 wage dispute judgment ordered the owner to pay $$2.67M → filed first bankruptcy
  • The owner changed his title of a property to his wife, according to Manhattan court

2. “E Mart” announced opening the 1st Store in LA, USA

  • 712 South Olive Street, LA → mixed Use complex in Jewelry District
  • Lease: 10 years / estimated lease amount: $40M/ 1st – 3rd floor in 6 story building (total: 52,000 sf)
  • Fit to “Grocerant” style trends
  • Opening will be toward end of next year
  • The building is famous landmark building (built in 1917)
  • Possibly it will compete against Wholefood nearby
  • The plan decided after complete retreat from China

3. A Luxury Condo in West Village sold at $43.5M → Highest price last month

  • 160 Leroy street /penthouse unit
  • 7700 sf/ 5 bedroom /5 bath/ super large library/ movie screen/ 4944 sf own roof top terrace with own swimming pool
  • Buyer : Michael Rubin (owner of “Kynetic”/ owns some New Jersey devil’s stock)

4. New Jersey will charge tax on Airbnb

  • Starting on 10/1, 5% occupancy fee, 6.625 sale tax (also local town can charge 3% as an option)
  • Reason : more tax revenue for hotel type of service /also possible hotel industry’s lobbying

5. Z-Gen will next major home buying force

  • Z-Gen: Born in 1995 (23 Y) – 2010 (8 Y)
  • Survey for 1995-1999 → over 85 % has a plan to buy a home during next 5 years
  • Y-Gen (millennium generation) shows 87 % /X-Gen shows lowest %
  • Biggest blocking factor → student loan ( Z-Gen:32%, Mill-Gen:17%, X-Gen:7%)
  • Location preference → suburban area (Z-Gen: 60%, X-Gen: 26%)
  • Down payment → 50% paid less than $10,000 (12% paid more than $50,000)
  • Period for preparation of down payment: 93% of Z-Gen → less than 5 year (only 68% of Mill-Gen )

6. Many people wish to buy home, but cannot: Why?

  • Home price move up and interest rates is also increased → lowest buying power since 2008
  • Home owning rate is increased slowly and steadily, but younger generation is still lower rate → Mill-Gen owning rate is 8% lower than Baby boomer Gen when they were Mill-Gen
  • Fannie Mae warns that Baby Boom Gen put houses on the market and younger gen is not ready to absorb and, then home price might be decreased sharply
  • Existing and new house sales are decreased for past few months
  • New house builder stopped building new house for 4-5 years after financial crises, and last few years new construction recovered to fair level, but slow down again last two month
  • June new home sale → 631,000 (yearly rate) → 3% down / July →  627,000 (1.7% down from June) / Augest → 629,000
  • According to NAR, July existing home sale: 5.34M → 7% down from last month (forecast was 5.42M)
  • Existing home sales → continuous decreasing for last 4 months → might be in market adjustment period

7. Fed Reserve raised Reference IR again by 0.25% on 9/26/2018

  •  → Reference IR: 2.00-2.25%
  • This 3 times : March, June, September
  • Fed Reserve forecasts 3 times next and 1 time in 2020 → no change in 2021

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