Bank of America confirms Dublin as location for EU hub

Even if the UK reverses and doesn’t Brexit, the genie is out of the bottle. While London may survive as Europe’s premier financial center in a no-Brexit scenario, it will be by a smaller margin and with more competition.
Frankfurt and Dublin will be more important as financial centers with or without Brexit. Paris will gain – especially as high-speed transportation links advance. Just as Wall Street now stretches coast-to-coast, the European financial industry will spread across Europe. And don’t forget, non-financial institutions are also important and also relocating. For a country with strict gun control, the Tories-led UK has amazingly managed to shoot itself in one foot with no-Brexit and both feet with Brexit.

Wall Street giant Bank of America Merrill Lynch has picked Dublin as the preferred location of its EU hub, joining a growing number of international financial groups to outline initial plans for how they plan to deal with the fallout from Brexit.

Speaking to The Irish Times in Dublin on Friday, group chief executive Brian Moynihan said this will result in the bank’s existing Irish subsidiary merging with its current most important EU banking unit, based in London.

It will also involve the group setting up an EU trading operation, or broker-dealer, in the Republic, which will require separate Central Bank approval, he said.

 

Source: Bank of America confirms Dublin as location for EU hub

In Shadow of Manhattan, a Long-Neglected City Is Having a Moment

Newark has been “coming back” since I went shopping there with my grandmother. This time it looks like it might actually succeed. Great transportation (PATH, AMTRAK, and NJ Transit train station), some great parks and neighborhoods, a great museum, corporate anchors, legal center, Rutgers University and an administration that wants to learn from Hoboken and Jersey City’s mistakes.

 

 

For years, downtown Newark’s Military Park, barren and surrounded by vacant buildings, was a symbol of the despair that set in after the 1967 riots. Now it’s at the center of hope that a long-sought recovery for New Jersey’s biggest city may finally be taking hold.

Source: In Shadow of Manhattan, a Long-Neglected City Is Having a Moment

NYC Real Estate | NYC Luxury Market | 432 Park Ave

It took two months longer on average to sell a New York City luxury apartment in 2016 compared with 2015. That’s according to the real-estate agency Olshan Realty, which on Wednesday published its year-end report on the New York residential market.

It backed up other reports released earlier in 2016 that showed the luxury market in Manhattan, New York’s most expensive borough, had a tough year. Unlike other price segments of the housing market, there’s an excess of luxury apartments, giving buyers power to negotiate asking prices lower.

“New York City’s rental market has been mostly steady, except at the high end, where the inventory has risen and rents have drifted down,” the Federal Reserve said in a recent Beige Book based on comments from its contacts.

Source: NYC Real Estate | NYC Luxury Market | 432 Park Ave

Who’s Moving Into and Out of Washington, D.C. – Next City

Construction workers, cashiers and janitors are moving out of Washington, D.C., while doctors, economists and software developers are moving in. As the cost of housing increases in the city, it’s part of a larger trend, says the District of Columbia’s Office of Revenue Analysis (ORA), which has low-wage workers fleeing for the suburbs, and higher-wage workers flocking to urban cores.

Source: Who’s Moving Into and Out of Washington, D.C. – Next City

Fear Spreads of a Housing Crash in Canada | Alternative Economics

The reading marks a change from almost unbridled consumer optimism in a housing market that has carried the Canadian economy since the 2008 global financial crisis, even as policy makers warn price gains in some cities are unsustainable.

Source: Fear Spreads of a Housing Crash in Canada | Alternative Economics

The Global Real Estate Bubble Is OFFICIALLY Bursting | Seeking Alpha

Bubbly cities like Singapore and Vancouver have started punishing foreign housing investors that have pushed up property prices to unaffordable – and unsustainable – rates. Foreign investors are now being taxed in many of these areas, and as a result, their real estate markets have begun to tank.During this housing burst, the most high-end, desirable locations will be hit the hardest.

Source: The Global Real Estate Bubble Is OFFICIALY Bursting | Seeking Alpha (sic)

The “New Housing Crisis” – Not Enough Rental Homes? | Zero Hedge

The point here is that while the housing market has recovered – the media should be asking ‘Is that all the recovery there is?’

With 30-year mortgage rates below 4%, we should be in the middle of the next housing bubble with prices and home ownership rising. The question the media should be asking is “why?” Furthermore, what happens if the “bond market bears” get their wish and rates rise?

The housing recovery is ultimately a story of the “real” unemployment situation that still shows that roughly a quarter of the home buying cohort are unemployed and living at home with their parents. The remaining members of the home buying, household formation, contingent are employed but at lower ends of the pay scale and are choosing to rent due to budgetary considerations. This explains why household formation is near its lowest levels on record despite the “housing recovery” fairytale whispered softly in the media.

Housing-NetHouseholdFormation-072516

While the “official” unemployment rate suggests that the U.S. is near full employment, the roughly 94 million individuals sitting outside the labor force would likely disagree. Furthermore, considering that those individuals make up 45% of the 16-54 aged members of the workforce, it is no wonder that they are being pushed to rent due to budgetary considerations and an inability to qualify for a mortgage.

The risk to the housing recovery story remains in the Fed’s ability to continue to keep interest rates suppressed. It is important to remember that individuals “buy payments” rather than houses, so each tick higher in mortgage rates reduces someone’s ability to meet the monthly mortgage payment. With wages remaining suppressed, and a large number of individuals not working or on Federal subsidies, the pool of potential buyers remains contained.

The real crisis is NOT a lack of homes for people to buy, just a lack of enough homes for people to rent. Which says more about the “real economy” than just about anything else.

While there are many hopes pinned on the housing recovery as a “driver” of economic growth in 2013, 2014, 2015, 2016 – the lack of recovery in the home ownership data suggests otherwise.

Source: The “New Housing Crisis” – Not Enough Rental Homes? | Zero Hedge

Manhattan Retail Market | Retail Vacancies NYC

These days, hardly a week goes by without a new report about struggling retailers and rising vacancies in Manhattan.

Average retail asking rents fell year over year in seven of the borough’s 12 main retail submarkets in the first quarter of 2016, according to Cushman & Wakefield. And several prime shopping districts now have availability rates well over 20 percent, while stretches on Bleecker Street and Broadway have become notorious for their empty storefronts.

These signs of trouble are coinciding with record spending by retail investors and the rise of the retail condo.

Investors have shelled out $25 billion on Manhattan retail properties since the beginning of 2011, according to data from Real Capital Analytics. And in recent years, buyers have been more willing to dig deeper into their wallets and accept higher per-square-foot prices — forcing them to find tenants willing to pay high rents to justify their purchases.

Since 2000, RCA’s database counts 24 Manhattan retail condo sales that were priced at $10,000 per square foot or more. All of them closed after July 2011 and 17 closed in 2014 and 2015.

“I don’t want to say it’s a bubble but it’s been constantly bid up for six years,” Lee & Associates Managing Principal Peter Braus told The Real Deal.

Consolo added that retail condo sales prices have gone into the “stratosphere” in recent years.

“It is clear that there were numbers that were far too aggressive and the market just couldn’t keep up,” she said.

While real estate insiders are reluctant to call it a retail bubble, many acknowledge that a correction is imminent.

Michael Weiser, president of commercial brokerage GFI Realty Services, said the best indicator of whether Manhattan’s retail market is weakening is vacancy.

Availability rates — which measure the amount of retail space that is vacant or will become available — rose in all but one of Manhattan’s main retail submarkets between the first quarters of 2015 and 2016, according to Cushman.

Among those neighborhoods, several stand out: On Fifth Avenue between 42nd and 49th streets, a staggering 31 percent of retail space was available for lease. Meanwhile, Soho clocked in with a 25 percent availability rate followed by Herald Square and the Meatpacking District (both at 22 percent), Times Square (20 percent) and Madison Avenue (17 percent).

Braus said that owners who paid a steep price for retail space are more reluctant to accept lower rents. “That’s one reason why you’re seeing a lot of vacancies in those neighborhoods,” he noted.As it happens, those six districts were also home to the bulk of the priciest Manhattan retail purchases in the last two and half years, accounting for 57 of the 73 sales priced at $100 million or more recorded by RCA since January 2014. (That excludes office properties with retail components.) They are also among the neighborhoods where asking rents saw the steepest rise over the past two years, the numbers from Cushman & Wakefield show.

Worth the time to read the entire article here:

Source: Manhattan Retail Market | Retail Vacancies NYC | Thor

Jetson Green – Net Zero Prefab That Can be Built in Just Three Days

Unity Homes has recently unveiled a prefab home, which is sustainable yet still made to last for at least as long as traditionally constructed homes. The home has a number of certifications, including LEED v4 Platinum, while it is also net-zero energy and can be constructed on site in three days or less. It is also fitted with the largest number of Cradle to Cradle (C2C) certified building products used in a residential project to…

Source: Jetson Green – Net Zero Prefab That Can be Built in Just Three Days

Why Commercial Real Estate Is Next: ‘Challenging Technicals’ Are About To Become ‘Weak Fundamentals’ | Zero Hedge

There is a growing sense of tighter financial conditions, particularly to the commercial real estate sector. Late last year the regulators issued a joint statement on Prudent Risk Management for Commercial Real Estate Lending and the latest Senior Loan Officer Opinion Survey (SLOOS) shows that banks tightened their lending standards to commercial real estate meaningfully in 4Q15…. The growing sense of gathering clouds in terms of tightening financial conditions to commercial real estate translates into a more challenging road ahead for US commercial real estate.

Source: Why Commercial Real Estate Is Next: ‘Challenging Technicals’ Are About To Become ‘Weak Fundamentals’ | Zero Hedge

Introducing ‘treeconomics’: how street trees can save our cities | Cities | The Guardian

In Toronto, researchers recently found that people living on tree-lined streets reported health benefits equivalent to being seven years younger or receiving a $10,000 salary rise. As well as studies revealing benefits from everything from improved mental health to reduced asthma, US scientists have even identified a correlation between an increase in tree-canopy cover and fewer low-weight births. And economic studies show what any estate agent swears by: leafy streets sell houses. Street trees in Portland, Oregon, yielded an increase in house prices of $1.35bn, potentially increasing annual property tax revenues by $15.3m.

Source: Introducing ‘treeconomics’: how street trees can save our cities | Cities | The Guardian

Not NY-London 2015 But Paris 1700

They built fortunes and Paris:

In the seventeenth century, all these factors came together, and Paris became the European capital of conspicuous consumption when a new kind of wealth began to be very ostentatiously exhibited…All through the century, incalculably ostentatious displays of opulence were rolled out by non-Parisians of humble birth. The most publicized cases involved your men from poor families in the French provinces who, once they reached the French capital, had managed to amass fortunes. To a man, they owed their rags-to-riches stories to their instinct for the working of the age’s equivalent of high finance…

Guidebooks presented this financial elite’s impact on the cityscape as a noteworthy feature of modern Paris; their authors never failed to point out when a residence they recommended as particularly fine belonged to a man of finance. And indeed more than half the homes new to Paris in the seventeenth century and considered then and now to be of architectural significance were built by men who made their fortunes in finance rather than inheriting them. These men, who early in the century became known as “financiers,” were more than three times as likely as the scions of the great old families to build a home in seventeenth-century Paris and thereby to have helped create the original modern French architecture. And, as a 1707 work explained, this was evident to all: “Everyone knows that it’s because of the financiers that [Paris] has the special glow for which it is so renowned at present.”

The financiers were not the only group responsible for the “special glow” with which memorable modern architecture enveloped the city. A second profession also made a meteoric rise to prominence in the city on the move: the real-estate developer….

In the seventeenth century, Paris became a city in which to many the lure of money seemed omnipresent… a city that was “paradise for the rich and hell for the poor”…

Writers of every stripe… spoke of men of new wealth in the same way, as “leeches” who were bleeding the country dry and making paupers of honest citizens…..

The stories of Parisian financiers inspired the creation of other new words… nouveau riche… “the plague of our century”…”absolutely teeming with nouveaux riches, flaunting the fruit of their plundering of widows and orphans.”…

Parvenue, “one day a servant, the next, master of the house.”…

Millionnaire was initially a synonym for nouveau riche and parvenu, and individual of humble origins whose vast wealth was both sudden and ill-gotten….

Read the book – well worth the time.

How Paris Became Paris – The Invention of the Modern City by Joan DeJean, Bloomsbury Publishing

Coastal property values could erode if nourishment subsidies end — ScienceDaily

The value of many oceanfront properties on the East Coast could drop dramatically if Congress were to suddenly end federal beach nourishment subsidies. Values could fall by as much as 17 percent in towns with high property values and almost 34 percent in towns with low property values. A gradual reduction of the subsidies, in contrast, is more likely to smooth the transition to more climate-resilient coastal communities.

via Coastal property values could erode if nourishment subsidies end — ScienceDaily.

Sprawl costs US more than a trillion dollars a year | Better! Cities & Towns Online

Sprawl costs the American economy more than $1 trillion annually, according to a new study by the New Climate Economy. That’s more than $3,000 for every man, woman, and child.

These costs include greater spending on infrastructure, public service delivery and transportation. The study finds that Americans living in sprawled communities directly bear $625 billion in extra costs. In addition, all residents and businesses, regardless of where they are located, bear an extra $400 billion in external costs.

via Sprawl costs US more than a trillion dollars a year | Better! Cities & Towns Online.

NYC Recaptures Top Global Investment Market in Foreign Investor Survey – CoStar Group

The U.S. overwhelmingly remains the most popular place in the world among foreign commercial real estate investors to place capital, according to the 23rd annual survey among members of the Association of Foreign Investors in Real Estate (AFIRE).

New York City returned to its accustomed spot as the top global market for foreign investment in real estate after being briefly displaced in 2014 by London. With the exception of last year, New York has held the top rank both globally and among U.S. cities since 2010.

NYC Recaptures Top Global Investment Market in Foreign Investor Survey – CoStar Group.