Weekly News (April 1, 2020)
This week’s Interest Rate (14th Week)
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.