Weekly News (July 3, 2019)
This week’s Interest Rate
30 Y Rate: 3.750%/ 15 Year Rate:3.250%/ 10 Y Treasury: 1.976%/ Prime Rate:5.5%
800 ft office space above Macy’s building in Manhattan will be constructed
(The Korea Daily 7/3)
- Macy’s building in Harold Square is 10 story building currently and they have a plan to build up 800 ft office space on top of the building, according to NYT. Macy’s does not announce it officially and neighborhood around Macy’s is already in welcoming mood. With this plan, 6000 workers will be hired.
- Park, Hye Wha, who has operated the restaurant The KeunJib(더 큰집) for over 20 years mentioned that it is very good news because it will create more foot traffic around K town on 32nd. Also the owner expressed concerns that Hudson Yard district attracted more tourists recently and the congestion tax below 60th St. will affect business. (Congestion tax is estimated $1.5B annually)
- Foot traffic around Herald Square is 96M a year and over 600,000 people are using Penn station a day.
A 4 story mixed use building in Bushwick, Brooklyn sold at $11M ($611/sf)
- 1487 Broadway between Cornelia Street and Jefferson Ave in Brooklyn was built in 1915 and redeveloped in 2018. It has 3 commercial spaces and 17 high-end, rent stabilized apartments over a total 18,000 sf. All commercial spaces and apartments are occupied.
- Transaction was in-house deal of Rosewood Realty Group.
Millburn in Essex county is richest town in New Jersey, according to US Census
(The Korea Times 7/2)
- Median income in Millburn town is $202,862 which is richest town among about 560 towns in NJ. This means that more than half of household income is above $200,000. The 2nd town is Essex Fells of which median income is $200,875.
- In Bergen county, Upper Saddle River is 8th and the median income is $176,674. Hohokus is 9th with median income of $176,518.
- Saddle River is 13th with median income of $173,333. Haworth is 14th with $170,427.
- Glenrock is 17th with $162,443. Ridgewood is 18th with $162,011. Tenafly is 29th with $153,906. Demarest is 34th with $149,271. Old Tappan is 44th with $141,185.
This Summer RE market will be hot
(MiJu News/ week of 7/1)
- According to CNBC, low interest rates and steady increase of housing demand will make this summer hot for RE residential market. House price went up by 3.6% in May, compared to last year, which is biggest increase during last 7 months. Mortgage interest rates is 3.86% as of 6/27 while it was over 5% last year. As a result, demand is increased sharply, but new construction and existing inventory are not matched with that demand.
- New construction is in difficult situation due to material cost increase and lack of labor force, which will be same situation for a while. In April, there are 404,000 construction jobs open, which is biggest since financial crises.
- Organization investors who purchased massive number of short sale, foreclosure houses are not ready to dump those houses in the market yet.
- Most sellers are thinking it is a good time to sell and they will put their homes in the market. Buyer will think it is a good time to buy because of lower interest rates Meantime, house price will be kept reasonably high price.
- RE residential market will be different form the first half of the year in a positive way.
LA Times has reported Forever 21 management asked investment from outside.
(The Korea Daily 7/2)
- According to LA Times, some Forever 21 management team asked investment money from their shopping mall landlords such as Simon Real Estate Group and Brookfield of Canada. However, the founder Chang, Do Won is in a position to disagree about the idea, hoping that he can keep management power. One of management team who is involved with this matter mentioned that the company is sonly involved with nothing, but lease negotiation with landlords.
- Simon RE Group is one of biggest shopping mall owners in US and they have hold 99 Forever 21 stores, a total of 1.5M sf, which makes 6th biggest client of Simon RE Group.
Warren Buffett(88) donated $3.6B as stock to 5 different non-profit org
(The Korea Times 7/2)
- According to WSJ, Berkshire Hathaway Chairman, Warren Buffett has decided to donate $3.6B worth of stock to 5 non-profit organization such as Bill & Melinda foundation, Susan Thomson Buffet foundation, etc. Buffett has promised to donate 85% of his stocks and he is in the process of keeping his promise.
- He will convert 11,250 shares of A class to 16.9M shares of B class stocks, and he will donate 16.8M B class stocks this time.
- WSJ mentioned that he has donated about 45% up until 2006, which is equivalent to $34B.
US consumer expenditure increased by 0.4%, compared to last month
(The Korea Times 7/1)
- According to Department of Commerce, consumer expenditure increased by 0.6% in April. Increase rate drop in May indicates slow economy and weakening inflation thrust, which will provide ammunition to lower RI rates in July as a first time. (Next FOMC meeting is scheduled on 7/30 – 7/31)
- Meantime, PCE price index shows 0.2% increase in May while it was 0.3% in April.
- Accumulated major PCE price index is 1.6% in May which is the same as in April while Fed Reserve is targeting 2% inflation.