Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-63167 Fri, 20 Oct 2017 14:45:06 GMT What would happen if Amazon brought 50,000 workers to your city? Ask Seattle. http://implode-explode.com/viewnews/2017-10-20_WhatwouldhappenifAmazonbrought50000workerstoyourcityAskSeattle.html Maybe no city could have built housing fast enough to keep prices from spiraling upward during Amazon's growth, but Seattle - despite nearly leading the nation in new apartment construction - hasn't come close.

On the sidewalks, alongside rentable neon bikes, people subsist in tents and sleeping bags in places locals say they did not congregate at 10 years ago - a warning sign for cities nationwide trying to capture a version of Seattle's glory.

"We don't have enough housing for low-income people especially, but we also just don't have enough housing," said Myers, a longtime Seattle housing advocate. "And Amazon obviously impacts both of those things."

Officials at Bellwether Housing, the city's largest nonprofit manager of affordable housing, at 2,000 units, report a vacancy rate of 1 percent. "It's very rare that someone moves out, because they have nowhere else to go," said chief executive Susan Boyd.

A state analysis of evictions found they were driven not by social problems but by economics. As Amazon's boom has continued, the city approved a rule this year requiring landlords to accept the first viable renter who applies - rather than cherry-picking a tech worker. The government also adopted an inclusionary zoning policy requiring developers to set aside some new units at below-market rates or pay into a fund to develop other affordable units.

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iehi-feed-63146 Mon, 16 Oct 2017 17:04:17 GMT HSBC Tries To Sell Stake in Times Square Office Tower, Once Lost By Macklowe, for $445M (VALUED ABT. $250 mln in 2010) http://implode-explode.com/viewnews/2017-10-16_HSBCTriesToSellStakeinTimesSquareOfficeTowerOnceLostByMacklowefo.html

According to The Real Deal, "The 44-story tower was built in 1990 as the headquarters of German publisher Bertelsmann. In 2006, Vornado Realty Trust bought the retail space for $260 million. A year later, Harry Macklowe paid the Blackstone Group $830 million for the office portion of the property. Macklowe lost the property to his lender, Deutsche Bank, which sold it to CBRE Global Investors."

... In 2010, a 49 percent stake in the property was purchased by HSBC, in a deal that valued the office space at $520 million. Then in 2011 the remaining 51 percent was acquired in a deal valuing it at $660 million, respectively. Adobe Systems, Viacom, Verizon, Pillsbury Winthrop and Duane Morris are among the tenants of the building.

We expect the results will not be great. The commercial market is definitely on the rocks, and an office tower just a flew blocks north of Times Square -- recently financed -- is already distressed (reported a few months ago).

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iehi-feed-63145 Mon, 16 Oct 2017 15:22:05 GMT China's mortgage debt bubble raises spectre of 2007 US crisis http://implode-explode.com/viewnews/2017-10-16_Chinasmortgagedebtbubbleraisesspectreof2007UScrisis.html City residents in their 20s and 30s view property as a one-way bet because they've never known prices to drop. At the same time, property inflation has seen the real purchasing power of their money rapidly diminish.

"Almost all my friends born since the 1980s and 1990s are racing to buy homes, while those who already have one are planning to buy a second," Mai, 33, said. "Very few can be at ease when seeing rents and home prices rise so strongly, and they will continue to rise in a scary way."

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The rush of millions young middle-class Chinese like Mai into the property market has created a hysteria that eerily resembles the housing crisis that struck the United States a decade ago. Thanks to the easy credit that has spurred the housing boom, many young Chinese have abandoned the frugal traditions of earlier generations and now lead a lifestyle beyond their financial means.

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iehi-feed-63143 Mon, 16 Oct 2017 13:59:37 GMT Congress Votes To Lavishly Subsidize Flood Hazard In "Real US States" While Giving Puerto Rico a Lump of Coal http://implode-explode.com/viewnews/2017-10-16_CongressVotesToLavishlySubsidizeFloodHazardInRealUSStatesWhileGi.html The House approved the debt forgiveness in a 353-69 vote on Thursday. As The Intercept previously reported, the bill cancels two-thirds of the flood program's debt while offering Puerto Rico a $5 billion loan from the U.S. Treasury--a baffling move considering the small island is already at least $74 billion in the red to a number of mostly foreign creditors who aren't about to give up their investments without a fight.

The difference? Puerto Rico is effectively a colony of the United States. The National Flood Insurance Program (NFIP) happens to help a lot of millionaires.

For that reason, the NFIP has historically been a rare spot of cross-aisle agreement, with loyalties divided more along geographic lines than partisan ones. Because homeowners living in floodplains are required to purchase flood insurance, the politicians who represent coastal constituencies tend to favor keeping rates low in order to keep them happy.

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iehi-feed-63141 Sun, 15 Oct 2017 17:37:53 GMT The land of the permanent renter:  More single family homes are now rentals with households moving less http://implode-explode.com/viewnews/2017-10-15_ThelandofthepermanentrenterMoresinglefamilyhomesarenowrentalswit.html iehi-feed-63128 Thu, 12 Oct 2017 22:08:00 GMT Some Struggling Malls Turn To Churches For "Redemption" http://implode-explode.com/viewnews/2017-10-12_SomeStrugglingMallsTurnToChurchesForRedemption.html As retailers consolidate and shrink the number and sizes of their stores, retail center landlords, especially in weaker markets, are being forced to consider a wider range of prospective tenants that might not fit the conventional retail mold. Among them: houses of worship.

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The growth of e-commerce has hit retailers hard. In Elmira, N.Y., the local mall is struggling to find new tenants and attract shoppers. But in weaker markets where vacancies are higher, it is more difficult for landlords to find complementary retailers, and churches are becoming palatable options.

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According to a Wall Street Journal analysis of August 2017 data from the Directory of Major Malls that tracks about 8,200 retail centers in the country, at least 111 malls and open-air centers have a church in them. Some have two or more.

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Churches usually weren't in the mix. Shopping center owners prefer tenants that draw foot traffic on a daily basis and often consider churches to be second-tier tenants because they aren't typically open all week. What's more, if rents aren't paid, landlords might find it harder to evict a church than another tenant.

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iehi-feed-63099 Sun, 08 Oct 2017 13:09:41 GMT Lennar Offers to Pay Your Student Loans If You Buy a New Home http://implode-explode.com/viewnews/2017-10-08_LennarOfferstoPayYourStudentLoansIfYouBuyaNewHome.html iehi-feed-63090 Thu, 05 Oct 2017 14:12:53 GMT NYC DA curiously dropped felony case against Don Jr. and Ivanka after Trump lawyer paid a visit http://implode-explode.com/viewnews/2017-10-05_NYCDAcuriouslydroppedfelonycaseagainstDonJrandIvankaafterTrumpla.html For two years, prosecutors in the Manhattan District Attorney's office had been building a criminal case against them for misleading prospective buyers of units in the Trump SoHo, a hotel and condo development that was failing to sell. Despite the best efforts of the siblings' defense team, the case had not gone away. An indictment seemed like a real possibility. The evidence included emails from the Trumps making clear that they were aware they were using inflated figures about how well the condos were selling to lure buyers.

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Donald Trump dispatched his own personal attorney, Marc Kasowitz, to bypass the Major Economic Crimes Bureau, in favor of direct talks with District Attorney Cyrus Vance Jr. Kasowitz, who'd donated $25,000 that same year to Vance, must've worked some magic in that meeting because despite two years of investigation and a trail of emails pointing to fraud, Vance overruled his staff and dropped the case. Kasowitz bragged about making it disappear

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iehi-feed-63077 Tue, 03 Oct 2017 17:23:01 GMT Manhattan Condos Are Barely Yielding More Than Government Treasuries http://implode-explode.com/viewnews/2017-10-03_ManhattanCondosAreBarelyYieldingMoreThanGovernmentTreasuries.html Manhattan condo buyers who rent out their apartments are getting little more yield than they would with government debt.

Newly purchased condos that were listed for lease in the second quarter brought their owners a median return of 2.5 percent, according to an analysis released Monday by property-listings website StreetEasy. It's been stuck at that level since the end of last year, the lowest in data going back to 2010. The median yield on relatively risk-free 10-year Treasury notes was 2.25 percent in the second quarter.

"This is the lowest point we've seen in history," Grant Long, a senior economist at StreetEasy, said in an interview. "It's a steady downward trend."

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The investment thesis had promise in 2011, when rental yields peaked at 3.9 percent in the third quarter. But as developers added ever-pricier units to the skyline and the supply of rentals swelled, income prospects for those who buy and lease out condos have been diminishing fast.

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In 2011, the median purchase price of condo units that became rentals during the third quarter was $899,000, StreetEasy said. In the second quarter of this year, investors who bought condos to lease out paid almost double that amount -- a median of $1.7 million.

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iehi-feed-63071 Sun, 01 Oct 2017 21:24:13 GMT NY's New Casinos Undershoot Revenue Expectations Horribly http://implode-explode.com/viewnews/2017-10-01_NYsNewCasinosUndershootRevenueExpectationsHorribly.html ``According to a report in the New York Times, "So far that expansion has indeed led to some $70 million in new gaming tax and ample jobs at new facilities and constructions sites, according to casino operators. But early returns from two casinos that opened in February have been weaker than projections, according to the most recent figures posted by the New York State Gaming Commission. The Del Lago Resort & Casino -- built opposite an Amish farm adjacent to the Thruway outside Rochester -- is on pace to gross about $151 million in gaming revenue in its first year, significantly lower than the $262 million it had projected when it applied for the license in 2014. Likewise, the Rivers Casino and Resort in downtown Schenectady, next to the Mohawk River, has also underperformed. Its first-year projections ran between $181.5 million and $222.2 million; since opening on Feb. 8, an event attended by Mr. Cuomo, the casino has grossed $81.8 million -- a pace that represents just 77 percent of even its lowball estimate. A third new casino, Tioga Downs, which in December was converted from one of the state's racinos, is also running short of its projections."''

What??? So consumers don't have tons of money to blow (literally, burn up)??? We're shocked...

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iehi-feed-63065 Fri, 29 Sep 2017 14:25:29 GMT Commercial RE Markets Capitulating, According to Magnates http://implode-explode.com/viewnews/2017-09-29_CommercialREMarketsCapitulatingAccordingtoMagnates.html Blockbuster deals like HNA Group's $2.21 billion purchase of 245 Park Avenue may be going the way of the dodo bird as the flow of institutional Chinese cash in the United States slows to a trickle.

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"We've been fed a lot of crack cocaine to support asset values over the past 7 to 8 years," Sotoloff said. "It's been artificially inflating asset value."

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Sitt noted that various markets have reacted to the dynamics of the Trump administration -- such as whether Steve Bannon or Jared Kushner had more influence in the White House.

"I think it's gotten to the point where the markets have given up," he said.

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"The New York office-based REITs are getting hammered," Mills said. "The public markets have spoken, and New York is out of favor for the time being."

As for international investment, Mack said he's hopeful that the U.S. won't "close [its] borders to international investment" but is troubled by a global rise in nationalism.

"I see it happening for China right now, they are trying to keep their money there. The banks are getting queasy about loaning to real estate of any kind, especially retail, and secondarily office," he said. "I have grave concern that the next step will be a diminution of capital coming into the country or capital that is available in the country for real estate lending."

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iehi-feed-63063 Fri, 29 Sep 2017 00:01:29 GMT Fight Erupts to Shield Tax Breaks Threatened by G.O.P. Overhaul (INCL.: RE-IND. WANTS TO AXE STD. DED. INCREASE TO KEEP MI-DED. ATTRACTIVE(!)) http://implode-explode.com/viewnews/2017-09-28_FightEruptstoShieldTaxBreaksThreatenedbyGOPOverhaulINCLREINDWANT.html Opposition from the real estate industry was swift and vocal, with trade groups strongly criticizing elements of the plan that they say will make home-buying less attractive and weaken the housing market. While the plan specifically calls for preserving the mortgage interest deduction, real estate agents are warning that a proposal to double the standard deduction will make taxpayers less likely to itemize their tax returns and claim the mortgage deduction.

The deduction is a key incentive for people to buy homes, since it reduces their taxable income by the amount of interest paid on a mortgage. Real estate agents worry that doubling the standard deduction may provide a richer tax break than itemizing and claiming the mortgage deduction.

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A proposal to limit the deductibility of corporate interest has prompted jockeying among powerful groups that rely on debt to help finance their operations, including real estate companies, private equity firms, financial companies and other businesses.

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The most politically fraught proposal is eliminating the state and local tax deduction, which allows taxpayers who itemize to write off their property, state and local taxes. The measure is particularly prized in blue states with high property taxes, but is also widely used in some Republican districts in Virginia, New Jersey and California.

Eliminating the deduction, which the real estate industry also opposes, would save more than $1 trillion over a decade and make room for the tax cuts. But Republican members of Congress in affected states have already expressed concern about the provision, and a plan that repeals the deduction could be impossible to pass.

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For its part, the Trump administration is maintaining that surging economic growth produced by the tax cuts will prevent the plan from adding to the deficit, and that it will benefit middle-class families.

However, Mr. Trump's top economic adviser acknowledged in an interview with ABC News that it was too soon to make promises. It remains possible that some middle-class families could see their tax bills increase under the plan.

"There's an exception to every rule," said Gary D. Cohn, director of the National Economic Council. "I can't guarantee anything. You can always find a unique family somewhere."

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iehi-feed-63058 Thu, 28 Sep 2017 14:55:02 GMT Stop sugarcoating the housing market: Economist warns that buyers face increasing troubles http://implode-explode.com/viewnews/2017-09-28_StopsugarcoatingthehousingmarketEconomistwarnsthatbuyersfaceincr.html Supply on the low end is tight because during the housing crash investors large and small bought hundreds of thousands of foreclosed properties and turned them into rentals. There are currently 8 million more renter-occupied homes than there were in 2007, the peak of the housing boom, according to the U.S. Census.

Investors could take the opportunity of high prices and high demand to sell these properties, but today's high rents offer them better returns.

Low supply of homes for sale might also seem like a great opportunity for the nation's homebuilders. Yes, they went through an epic housing crash, but they have since consolidated market share and righted their balance sheets. Homebuilders are simply not building enough inexpensive houses that the market needs.

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iehi-feed-63055 Wed, 27 Sep 2017 17:20:57 GMT Pending Home Sales Plunge; NAR Admits "The Housing Market Has Essentially Stalled" http://implode-explode.com/viewnews/2017-09-27_PendingHomeSalesPlungeNARAdmitsTheHousingMarketHasEssentiallySta.html iehi-feed-63024 Sat, 23 Sep 2017 15:24:02 GMT Housing Affordability NEVER Worse...By a Long-Shot - M. Hanson http://implode-explode.com/viewnews/2017-09-23_HousingAffordabilityNEVERWorseByaLongShotMHanson.html iehi-feed-63019 Sat, 23 Sep 2017 14:21:10 GMT Creating Test for Trump, Panel Says Imported Solar Gear Hurts U.S. Firms http://implode-explode.com/viewnews/2017-09-23_CreatingTestforTrumpPanelSaysImportedSolarGearHurtsUSFirms.html A flood of imported solar equipment has seriously hurt American companies, the International Trade Commission ruled on Friday, setting up a major test of President Trump's willingness to use the protectionist measures he endorsed during the campaign.

The commission will now devise a course of action to recommend to Mr. Trump by Nov. 13. Its recommendations -- which the president will have broad leeway to accept, amend or reject -- could include establishing tariffs or minimum prices on imported solar equipment.

The commission ruled 4-0 in a case that focused on the question of whether the financial woes of two companies, Suniva and SolarWorld Americas, were caused by their own business practices or by unfair competition, often from Chinese companies that benefit from state subsidies.

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"The president will examine the facts and make a determination that reflects the best interests of the United States," said Natalie Strom, a White House spokeswoman. "The U.S. solar manufacturing sector contributes to our energy security and economic prosperity."

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Several analysts predicted that tariffs would revive the manufacturing of solar modules, or panels, in the United States, encouraging producers to open or expand American factories, as some large Chinese panel makers are already looking to do. But others said problems in the market were the result of low prices stemming from a global glut rather than a lack of capacity.

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Although companies like Sunrun, which focuses on installing panels on residential rooftops, said they could withstand higher prices, developers of large-scale projects said they were already seeing a slowdown as customers pulled back from committing to deals that could become uneconomical if costs rose.

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The case relied on a section of United States trade law that has not been used since President George W. Bush levied tariffs on foreign steel in 2002. In the intervening years, Barack Obama's administration chose to rely more heavily on the World Trade Organization to settle trade disputes.

President Trump and his advisers have argued that the World Trade Organization has been ineffective and slow at resolving trade violations. They have urged more unilateral action by the United States.

Analysts see a good chance of the president's taking action to protect the solar industry, given his longtime support for tariffs as a way to protect industries from cheap foreign products, especially from China.

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iehi-feed-63013 Thu, 21 Sep 2017 17:17:20 GMT China's Dangerous House Price Boom Is Spreading http://implode-explode.com/viewnews/2017-09-21_ChinasDangerousHousePriceBoomIsSpreading.html In general, it's debt that's the warning sign. As developers and households become more leveraged, the risk is that a price downturn doesn't remain contained within the property market.

"The high leverage will amplify the damage to the economy if a property bust happens," said Bloomberg Intelligence economist Fielding Chen. "The shock wave will be passed onto the entire financial system, and losses will be greater," he said.

Once home prices tumble, about 40 percent of Chinese banks will be hit hard, according to a recent research note from Ping An Securities.

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iehi-feed-63010 Wed, 20 Sep 2017 23:19:34 GMT NYC's latest trophy apartment, in historic Woolworth bldg, priced at whopping $110M (WILL IT JUST SIT??) http://implode-explode.com/viewnews/2017-09-20_NYCslatesttrophyapartmentinhistoricWoolworthbldgpricedatwhopping.html Meet the city's latest trophy apartment -- a penthouse at the iconic Woolworth Building that is back on the market for an eye-popping $110 million.

"This is as close to having a castle in New York City as you can get," developer Ken Horn tells the Post.

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So far, only one condo -- at 157 W. 57th St., known as One57, the "billionaire's building" -- has sold for more than $100 million. Both the Woolworth Building and One57 were once the city's tallest building.

To date, the most expensive downtown purchase was a $50.9 million trade at Walker Tower in Chelsea. But that 2013 purchase was made with dirty money linked to the multibillion-dollar Malaysian money-laundering scandal and the feds are trying to seize it.

Billionaire Steve Cohen, who paid $1.8 billion in fines after pleading guilty to insider trading a few years ago, first tried to sell his apartment at 141 E. 58th St. for $115 million in 2013. This month, that penthouse duplex went back on the market for $57.5 million.

This all looks peak-ey to us....

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iehi-feed-63008 Wed, 20 Sep 2017 19:54:35 GMT Unusually Large Loans Mask Decline In NYC Commercial Real Estate Lending http://implode-explode.com/viewnews/2017-09-20_UnusuallyLargeLoansMaskDeclineInNYCCommercialRealEstateLending.html iehi-feed-63006 Wed, 20 Sep 2017 17:41:56 GMT Freelancer CEO destroys "delusional, stuffed, basket case, bubble, Third World economy like no other" (AU) http://implode-explode.com/viewnews/2017-09-20_FreelancerCEOdestroysdelusionalstuffedbasketcasebubbleThirdWorld.html