Weekly News (September 27, 2023)

Mortgage Interest Rates Review

(United Mortgage Nation  9/27/2023)

Federal Fund Rate: 5.25% -5.50%        Prime Rate: 8.25%-8.50%

NYC Rental Market Gets More Competitive:  뉴욕시 아파트 임대 경쟁 치열해 졌다

(Korea Daily  9/26/23)

• According to RentCafe’s 2023 Rental Competitive Market Report, NYC gets more competitive : Among 139 cities in U.S. Manhattan and Brooklyn are within 20 ranking.
• RentCafe searched for 5 factors : 1.Vacancy dates 2. Occupancy rate 3. Number of offers for a property  4. Rate of renewed tenants  5. Supply rates for new rental units.
• Manhattan positioned 13th, which is the first time for Manhattan in higher than 20th. Average offers for a unit were 9 and average vacancy dates was 38. Brooklyn positioned 11th while Queens is out of 20th. But still many Koreans prefer to Queens, rather Brooklyn.

Real Estate Bust Plays Out On the San Francisco Streets: 샌프란시스코 거리에 부동산 붕괘 현상

(WSJ   9/25/23)

• About half of the retail stores at Union Square, the city’s downtown shopping district, have closed, and government revenue has declined. Ridership last month on Bay Area Rapid Transit was down 61% compared with 2019.

– 650 California Street, a 34-story office building that has defaulted on its mortgage.
– 101 California, whose second-biggest tenant left last year and whose biggest is slashing staff and office space.
– Embarcadero Square is for sale for $90 million. Its owner bought it for $245 million in 2018.

• While the city’s office market recently showed signs of life with sales of properties resuming at much lower valuations, a wave of maturing loans already in distress threatens to extend the city’s economic turmoil.

Commercial Properties w/ Debt & Office Vacancy rates

Office Market Slump Hits Booming Atlanta: 사무실 건물 불경기, 아틀란타 까지

(WSJ   9/26/23)

• Atlanta has been one of the Sunbelt’s biggest boomtowns, where the population and job market are growing fast. But you would never know that from its slumping office market.
• Office values and rents are falling. Developers are delaying new office projects, while office defaults are mounting. Atlanta’s commercial-property turmoil shows that even Sunbelt cities with thriving economies can’t escape the office- sector meltdown.
• Some developers remain bullish : Rockefeller Group broke ground on a 60story mixed-use tower that includes about 230,000 square feet of office space and 350 rental apartments. But other developers are pulling back. Shaul Kuba with CIM Group, said his firm is shifting its focus away from office development and more toward residential and hotel uses in a $5 billion project under way in Atlanta.

Atlanta’s office vacancy rate

Relentless Climb in Treasury Yields Reverses Rally in Technology Stocks: 겁없이 올라가는 국채 수익률이 기술주 상승을 제어 

(WSJ    9/13/23)

• Yields on 10-year notes—a key benchmark for borrowing costs on everything from mortgages to corporate loans—have hit 16-year highs above 4.5%.
• Rising yields have hit tech stocks particularly hard, because those companies’ future profits are worth less relative to the risk-free returns from holding Treasurys to maturity. Behemoths such asAmazon. comand Apple have slid 4.9% and 6.3% in September, respectively.  The tech-heavy Nasdaq Composite is down 5.4%.
• Though the S& P 500 is still up 13% this year, it is down 9% since yields began rising in 2022. Stocks’ rally this year was largely halted when the 10year yield reached 4% at the end of July.

10-year U.S. Treasury yield                     Fed-fund rate

Goldman Sachs forecasted the Fed will lower the rate late next year: 연준 금리인하, 내년4분기에나 가능

• The global investment bank, Goldman Sachs forecasted on 21st that the Fed might start lowering the federal fund rate around 4th Qt in 2024.
• Before the Sep FOMC meeting on 19-20th , the bank forecasted the rate lowering might start around 2nd Qt in 2024.
• The FOMC indicated that the rate might be lowered by 0.5% while they indicated 1% lowering next year.

Open AI Aims for $90B Value with Stock Sale: Open AI사 가 $90B 시가 주식을 팔려고 준비

(WSJ   9/27/23)

• OpenAI is talking to investors about a share sale that would value the artificial-intelligence startup behind Chat-GPT between $80 billion to $90 billion, roughly triple its level earlier this year.
• The startup, which is 49% owned by Microsoft, has told investors that it expects to reach $1 billion in revenue this year and generate many billions more in 2024, people familiar with the discussion said.
• Alphabet’s Google, which pioneered some of the artificial-intelligence technology behind ChatGPT, is preparing Gemini, a general-purpose AI program to rival GPT-4, OpenAI’s most advanced large language model.