by stephenlee 1. Amazon 2nd HQ → Possibly Queens Sunnyside Yard in NY, Edison in NJ
- Direct investment of $5 Billion will create 50,000 jobs with earning more than $100,000 salary
- Any candidate must submit the proposal by 10/19/2017
- Total more than 50 cities are in the race
- NY (Queens Sunnyside Yard): 180 Ac/ 5 miles form LaGuardia Airport and 15 miles from JFK Airport / LIRR / Metro North Train connects to Manhattan Grand Central station / 12 subway stations concentrated nearby/ Bicycle roads connect to Manhattan easily
Issues: 1.MTA, Amtrak are co-owner and NYC owns air right → Multiple owners
2.EDC estimated $19 Billion the cost of redevelopment of Sunnyside Yard. Amazon will direct-invest only $5 Billion - NJ : (Edison former ‘Ferren Mall’ on Albany Street): Middlesex County, New Brunswick City and Rutgers University initiated joint efforts to attract Amazon 2nd HQ.
Former ‘Ferren Mall’: Total 1,007,000 SF, Easy access to University, Newark Air port and NYC. Other cities are under consideration: Jersey City, Atlantic City, Camden. Governor Christie asks two Governor candidates to put unified efforts to attract. Amazon to NJ ( Estimated $9 Billion Economy impact )
2. NYC is #1 for highest rent in the world among 30 big cities
- With $1,500, rentable space is 277 SF in NYC. → London: 301 SF, Zurich: 314 SF, San francisco: 316 SF, Hong Kong: 321 SF, Paris: 321 SF, Geneva: 341 SF, Boston:359 SF.
- LA: 530 SF (11th), Washington DC: 543 SF (14th), Chicago: 600 SF (15th)
- Cheapest city among 30 → Istanbul: 1899 Sf, Shanghai: 1705 SF
- Seoul, KOREA : 1389 SF (26th)
3. Long Island, Underwater house decreased
- According to Core Logic, Underwater house in Long Island: 6.9% last year → 5% this year
- First time it went to under 6% since 2009 3rd QT (In 2013, it was 10%)
- April ~ June in 2017: Median Price → $404,000 ($339,000 in 2011)
4. What is driving our fall real estate market? (quote from Terrie O’ Conner)
- Multiple years of uninterrupted job gains → Strong consumer confidence
- The share of households believing the economy is improving was up 48% in the first part of 2017 CMT last year same time.
- 69% of home owners think it is good time to sell → 13% Up from a year ago
- Mortgage standards are more relaxed
- Student loan debt is getting alleviated
- In Northern NJ Area, low inventory, lack of open land, and higher constructions costs
5. In US, 33% of income is used for Housing cost
- Housing cost → Highest expense item
- Average income $74,664 → 33% ($18,186) for Housing cost, 15% ($9,049) for Transportation, 12.6%($7,203) for Grocery, 12% for Pension/Insurance, 8% for medical expense, 7% for Education / Self Development, 5.1% ($2,900) for Entertainment, 3.6%($2,081) for donation
- Some say this statistics has a flaw: Debt service is not considered → house-hold’s card debt is $8,377 ($500 Up form a year ago)
- 2016 Average income increased by 7.6%, but Consuming expenses increased by only 2.6%
6. Leverage Loan level is about right before the financial crises
- Leverage loan in US → Loan to global company, who has debt, for their assets as collateral. Usually for funding M&A case for consideration of asset of company to be bought out
- 53% increase this year → Very close to $534 Billion which was loan amount right before 2007 financial crises
- In Europe, similar situation: This year up to now, 7.6 Billion Euro → highest in7 years. 70% is covenant-lite bond → High risk bond
- 2008 during financial crises, US lost 30% of leverage loan investment
- Toys ‘R’ us Bankruptcy is good example of risky Leverage loan and high yield bond
