KeNo's Housing and Economic Portal: Wednesday August 17 2016 Housing and Economic stories

Tuesday, August 16, 2016

Wednesday August 17 2016 Housing and Economic stories

There Are All Kinds of Signs of a High-End Real Estate Slowdown - (www.bloomberg.com) According to real-estate website StreetEasy, 12 of the condos in Manhattan currently listed at over $20 million have had their prices cut by 5 percent or more in recent months, while only 2 of them have seen any increase in their listing price. Among the cuts is a condo at 1 Central Park South. It's been on the market for more than 250 days, and is now on sale at $45.5 million, $6.45 million less than its price a few weeks ago. That's just one of the indications that the market may be slowing down. Here are some others: Turning one apartment into two: One developer recent chopped a $45 million listing at 10 Sullivan into 2 separate apartments. The 8,400 square feet property is now split into a 3,000 square foot listing for $11 million, and a 5,400 square foot listing at $29.5 million.

U.S. mutual funds boost own performance with unicorn mark-ups - (www.reuters.com) Some U.S. mutual funds are boosting their performance with relatively big bets on private companies such as Uber and Pinterest, which they have been marking up at a rate far greater than the broad stock market. Relied upon by millions of Americans to save for their retirement, mutual funds emphasize that their investments in young tech companies ahead of their initial public offerings are relatively small. A Reuters analysis of fund filings and other data shows, though, that some have taken a more aggressive approach, boosting the share of these companies to more than 5 percent of assets and awarding them rich valuations that in some cases have helped them beat their benchmarks and peers by a wider margin. Mutual funds' involvement also helped boost the number of so-called unicorns - private companies valued at $1 billion or more.

As Rental Supply Grows, Landlords Negotiate - (www.wsj.com) Vacancy rates for Manhattan rental apartments reached their highest level for any July in at least 14 years, the latest evidence that the market is softening, according to a report from broker Citi Habitats. The report also said deals that include landlord concessions more than doubled from July 2015. July is usually a strong month for New York City landlords, as college graduates move in and families scramble to find apartments in time for the fall semester. Analysts attributed the signs of weakness to a disconnect between the rents that landlords are demanding and what tenants expect to pay, at a time when the real-estate market is flooded with newly opened rental buildings in Manhattan and Brooklyn.

VC Funding Is Drying Up for Media Startups - (www.bloomberg.com) As venture capitalists exercise more caution and place fewer bets, they’re leaving media startups behind. Venture funding to media-tech companies slid for the third consecutive quarter to $91.7 million, the lowest amount since mid-2013, according to data from industry researcher CB Insights. Investment activity followed a similar trend, declining to the fewest number of deals since the second quarter of 2012. While U.S. venture deals were down overall in the first half of the year, the drop in funding to media companies has outpaced declines in other sectors, said Garrett Black, an analyst at researcher PitchBook. Investors worry the businesses are expensive to run compared with software makers and struggle to keep readers’ attention.

Wendy’s CEO Blames Rising Inflation, Falling Wages, Election Mayhem for Restaurant Sector “Slowdown” - (www.wolfstreet.com) Restaurants are considered a leading indicator of the economy into a downturn. The theory is that restaurant revenues are slowing when consumers, whose spending accounts for about 70% of GDP, start having trouble with their wallets. Some call the current situation a “restaurant recession.” Wendy’s, in its earnings call today, calls it a “recent slowdown.” This is the struggle in the QSR sector – “quick service restaurants,” as the fast-food industry likes to call itself more appealingly. Today it was Wendy’s CEO Todd Penegor who shed some light on this in the earnings call (transcript via Seeking Alpha): “Wendy’s brand is poised for success, even in a challenging environment,” he said as revenues plunged 22% in Q2 to $383 million, “primarily” caused by the sale of 361 company restaurants to franchise operators. Same-restaurant sales edged up a measly 0.4% in North America. Net income plunged 34%.

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