Weekly News (August 9, 2017)

1. Former Hess terminal in Edgewater, NJ will become mixed use complex?

Plan is to build 1872 unit residential and retail complex (8.7 ACRE on River Rd) ←→ Town wants to seize the property through eminent domain
The developer (615 River Rd Partners) is ready to the Mayor (Michael McPartland) and other town officials
Will appear before the board on 9/12 to request multiple variances (height, density, land use)
Town is intended to buy this lot for $25 Million (largest undeveloped land on the Hudson River waterfront north of Hoboken) for Public works, parking and additional parkland

2. New Garment District in Brooklyn, NY

Former Brooklyn Army Terminal in Sunset Park → Becomes 2^nd garment district
According to NYCEDC, $115 Million invested → will complete the end of this year (300,000 SF)
Nearby Ferry terminal will have a sign to Garment District
Moving Garment business from Manhattan Garment district to this 2^nd Garment District is welcome → will support establish modern process facility

3. Manhattan → Small business’s grave yard? (The Korea Times 8/9/2017)

Recently a deli owner closed down his deli business in K town (Landlord asked $100,000 rent from $80,000)
Some store raised 10% in the area (Manhattan average increase : 2~5%)
Typical K town rent: $200~250 / SF (Office: $50~$55 / SF) and mostly Triple Net
Fort Lee, NJ → $95 / SF, Office: $35~$45 / SF) due to Hudson Lights project
Palisades Park, NJ → $45~$65 / SF, Office: $35~$45 / SF

4. New Apartment construction → NY area is #1

According to RentCafe, NY metro area new apartment units → 26,739 units by 2017 (#1 in US)
17,000 units Last year: 57% Up in 2017 (Dallas: 24,960 units, Fort Worth: 17,960 units)
In NY/NJ metro, Manhattan: 7023, Brooklyn: 6984, Queens: 4165, Northern NJ: 3510, Mid NJ: 2426.
Accordingly, residential vacancy rate is expected to be 11% in NYC in 2018 (Currently VC rate: 3.8% / US Average rate: 4.4%)
40,000 units will be supplied around end of 2018 (LIC is #1 in 30 big cities in US for new apartment 12,533 units supply between 2010~2016)
Recently, rent increase is slowing down and more landlord concession → Rent down by 2.7% in 2020 / Cap rate → 4.5%

5. Reasons for Mortgage Interest rate increase

Federal Reference rate is controlled by FRB. Long term rate will follow US treasury bond income rate / Shot term rate (Variable rate) will follow reference rate by FRB
Contractionary policy has been announce at June FOMC meeting → upward Interest rate
Unemployment rate decrease →4.4% → Increase employment → upward Interest rate
Consumer confidence level is being checked when mortgage rate is determined
(High confidence level → high Interest rate)
Inflation → high mortgage rate (Current inflation: 1.5%~2%: low)
Stocks move high → triggers mortgage rate upward (investors sell bonds and buy stocks → increase bonds return rate → mortgage rate upward)
Trade Conflict → National debt: $20 Trillion. 1/3 is kept by foreign banks
If trade conflict → foreign countries sell US bond → Bond return rate go up → Mortgage rate upward

6. Pending Home Sales improved in June

7. Foreign buyers continue to increase (Articled by Charles Oppler)

According to NAR, Foreign investment in US continue to grow in 2017
New Jersey is 5^th for foreign buyers ← Close to NYC (Global financial capital of the world)
In 2016, FL, TX, Cal, NJ, Arizona were the destinations of foreign buyer home sales
New Jersey becomes more diverse → Multicultural downtowns, schools, recreational programs → Melting pot of diversity
Over $153 Billion in total seals closed in US in 2016 → 49% gain over the previous year
Residential investment led by China: $31.7 Billion , Canada: $19 Billion, UK: $9.5 Billion, Mexico: $9.3 Billion, India: $7.8 Billion

8. Nationwide Top Real Estate agent: commission $35 Million~$42 Million ?