Archive for March, 2010
Monday, March 29th, 2010
The U.S. government, which announced Monday that it plans to slowly unload its 27% stake in Citigroup Inc. over the remainder of this year, currently stands to pocket an $8 billion profit on the investment from last September. That’s a remarkable 30% return in six months, or triple the return generated by the average hedge fund manager investing in distressed securities, according to data from Hedge Fund Research Inc. Of course, the value of the government’s huge stake in Citi could fall by the time it’s all sold. After all, the U.S. Treasury is proposing to sell a whopping 7.7 billion shares, which would be the second-largest stock sale of any kind ever.
So why all the noise about TARP funds when for one of the first times in history a US government program actually turns a huge profit? Where are all the naysayers and tea-party buffoons now that their complaints about the TARP program look quite simply….stupid? And this is good for New York City as the sale of all this stock will produce huge commissions…..that will result in bonuses…..that will be taxed to pay for Albany’s stupidity….and spent in the City…..hopefully on real estate!
Friday, March 26th, 2010
It was announced to-day that the cost of a movie theater ticket will rise from anywhere between 5% and 25%….this after a record-breaking 2009 where profits surged over $ 10 billion. Hmmmmmm…..
This will probably affect more American’s pockets than any tax of any kind. So where is the outrage? There was outrage about the TARP funds! Outrage about the Wall Street bonuses! Is outrage only deemed appropriate for select abuses? Very interesting.
Where was the outrage when NBC (owned by GE, who received TARP MONEY) paid Conan O’Brien tens of millions of dollars for a failed TV show? If he was the boss of a bank, would outrage have been less or more appropriate?
So why on LUXURYBLURB? Surely this is a clear indicator of coming inflation….and inflation results in rising interest rates and a rush to safe assets such as real estate. AND, we ARE outraged at the cost of movie theater tickets! What about raising real estate broker commissions after a record year of profits? What do you think?
Wednesday, March 24th, 2010
The majority of wealthy investors rely on their own expertise over the advice of wealth managers, according to a new survey, which will come as a fresh blow to an industry still reeling from massive outflows of client money. Real estate group Knight Frank and US-based Citi Private Bank asked high-net-worth respondents to their 2010 Wealth Report to rank their preferred source of advice before considering an investment. Respondents ranked their own expertise as the most important source of information and also put that of their peers ahead of advice provided by their private bank or independent wealth adviser. Newspapers and the Internet were the least popular sources of information, according to the survey. The findings of the report come at a time when wealthy investors, unhappy with the performance of their managers during the crisis in 2008, look to re-allocate assets, and advisers step up their efforts to retain clients. Swiss bank UBS, which boasted one of the biggest wealth management businesses, lost more than $100bn (€74bn) in client funds between 2007 and 2009. Respondents to the survey were bearish about growth prospects of their personal wealth in 2010. Although only a small proportion of 4% believed it would decrease, 72% believed it would increase slightly. Only 5% thought it would increase significantly. Tangible assets are considered the most popular investments, with property in particular accounting for one third of the portfolios of respondents. The wealthy believe now is a good time to buy – 13% of respondents said they planned to purchase a new primary residence, while 37% said they would look to acquire a new secondary residence. Michael McPartland, managing director and head of residential real estate at Citi Private Bank, said: “Buying becomes opportunistic in a downturn, particularly as people turn to assets such as property when other assets experience dislocation.” Manhattan luxury real estate benefits by independent thinking wealthy buyers for sure.
Tuesday, March 23rd, 2010
New York fares well in comparison to other global capitals following the economic downturn of 2008, according to Cities of Opportunity, an annual report on what makes cities thrive, released in a report by the Partnership for New York City and PricewaterhouseCoopers (PwC). The report analyzes how twenty-one global cities perform as centers of business opportunity, according to 58 variables in 10 indicator areas. New York City holds the top spot in two categories and ranks in the top 6 cities in 8 of the ten categories. New York City and other long-standing world business capitals have weathered a global recession with core economic assets intact but challenges to our pre-eminence are emerging from cities that people find more livable and affordable. Mature cities will need to keep down the costs of living and doing business and improve quality of life to retain top talent and the best jobs in an increasingly competitive world.
#1 in Technology IQ and Innovation, an indicator of a city’s ability to adapt to and take advantage of technological advances in the global economy.
#3 in Economic Clout, which indicates a city’s ability to influence world markets, attract investment, and stimulate growth. London and Paris take first and second place.
# 1 in the Lifestyle Assets category. As with Economic Clout, this category favors larger, more mature cities that have well-established entertainment, tourism, fashion and culinary industries.
# 2 in the Intellectual Capacity category, beat out by Paris, followed by Tokyo, London, Seoul, and Chicago, dependent primarily on a city’s share of top universities and medical schools, as well as its percentage of population with higher education.
# 13 out of the 21 cities surveyed in the Cost category, which the report cites as one of the most basic considerations for business location and expansion decisions, own from #9 (out of 20 cities) in last year’s report. New York City fares particularly poorly in cost of living and cost of business occupancy. Los Angeles, Toronto and Chicago rank in the top five.
# 6 in the Sustainability category (tied with London). Stockholm is first, followed by Sydney and Frankfurt. We received a poor rating in air quality and carbon footprint, reflecting the challenges of a densely developed and highly trafficked city.
# 8 in Demographics and Livability, which measures viable housing options, commute times, climate, healthcare, and education. “Second cities” consistently outperform historically dominant “power” cities here.
# 4 in Transportation and Infrastructure
# 3 in Ease of Doing Business
#6 in Health, Safety and Security.
This all bodes well for our city that seems to have weathered the recession almost as boldly as it weathered 9/11!
Tuesday, March 23rd, 2010
Nationally existing home sales dipped 0.6 percent month-over-month to an annual rate of 5.02 million units, the National Association of Realtors said on Tuesday. The drop last month was a touch less than market expectations for a fall to 5.0 million units. The data showed weakness at a crucial time for the housing market with the Federal Reserve due to wind up its program to buy mortgage-related securities. The program pushed home loan rates to record lows and helped the market slowly recover from a three-year slump.
Analysts were disturbed by the first rise in inventories in seven months and the jump in the months’ worth of supply to its highest level since August.
“It says to me not to expect significant price gains in the near term. We are looking at flat house prices this year on average, not every month, part of it is this overhang of supply,” said Craig Thomas, senior economist at PNC Financial Services in Pittsburgh.
U.S. stocks ignored the rise in inventories, surging on relief that the drop in sales was less than forecast. Both the Dow Jones industrial average .DJI and the Standard & Poor’s 500 Index .SPX jumped to 18-month closing highs.
Why is it that Manhattan is different? Is Manhattan a separate economy? We are experiencing multiple bids on many properties. Increased activity across the board. Is our little part of the world differnet? It appears so….
Tuesday, March 23rd, 2010
News out to-day is that the Euro is weakening: With the Greek crisis looming over the heads of the Euro community, now would probably be a very good time to take money outside of the European community. When we say the Euro is weak, lets not forget that the Euro was trading around 0.90 in 2001, and today it is trading around 1.35…..so it is still 50% higher than it’s low point. It has traded as high as 1.58 though….
Do you think Europeans should place their cash into the Dollar, or possibly US (preferably New York) real estate?
We do (then again, when haven’t we?)….
Friday, March 12th, 2010
Led by a big gain in electronics, U.S. retail sales increased 0.3% to a seasonally-adjusted $355.5 billion in February, despite three major snow storms in the East, the Commerce Department estimated Friday.
Sales have risen in four of the past five months, and were up 3.9% compared with a year earlier. Most categories of retailers recorded month-over-month increases in February, driving sales to their biggest percentage gain since November, the government said. Auto and truck sales were one exception, falling 2% compared with January. Sales at health- and personal-care stores dropped the most in six years. Excluding autos and trucks, retail sales increased 0.8% to $297.7 billion in February, the largest gain since November.
The storms had “no noticeable effect on retail sales,” wrote Brian Fabbri, an economist for BNP Paribas. Sales at non-store retailers, such as catalogs and online stores, were unchanged. “While we are not expecting the consumer to come roaring back in the near-term, improvements have been quicker than expected considering the still-distressed state of the labor market,” wrote Adam York, an economist for Wells Fargo Securities.
February sales were better than expected. Economists surveyed by MarketWatch were expecting February sales to be unchanged, and for sales excluding autos to rise 0.1%.
Retail reflects the real estate market in some way: February was brutally cold and stormy, yet sales were brisk. We ponder what sales will produce when the weather warms up….and it is…..and we are seeing LOTS of activity in the luxury real estate market. March’s figures will be interesting indeed!
Wednesday, March 10th, 2010
The millionaires’ club in the United States grew by 16 percent in 2009, following a 27 percent decline in 2008. Families with a net worth of at least $1 million, excluding primary residences, rose to 7.8 million in 2009, an increase from 6.7 million a year earlier, according to a survey of high-net-worth U.S. households conducted by Spectrem Group. The Standard & Poor’s 500 Index increased 24 percent in 2009 and has risen 68 percent over the past 12 months.
Affluent households, which the survey defined as those with net assets of $500,000 or more, increased 12 percent to 12.7 million, the Chicago-based consulting firm said in a statement Tuesday. The number of households with a net worth of more than $5 million rose 17 percent to 980,000.
The average age of a so-called affluent investor is 58, compared with 62 for a millionaire and 67 for an investor with more than $5 million. Survey respondents in all three categories said they were most concerned about the impact of a prolonged economic decline on their financial well-being, according to Spectrem. The highest number of affluent and millionaire investors said they were likely to invest in cash, which includes certificates of deposit, over the next 12 months, followed by stocks and then bonds, said Spectrem.
The biggest number of ultra-high-net-worth investors said they were likely to invest in equities, followed by cash and international investments. The fewest wealthy investors said they were likely to invest in alternative investments such as hedge funds and investment real estate, Spectrem said.
The increase in the number of millionaires is still being held back by residential and investment real estate, which hasn’t bounced back, Walper said. The S&P/Case-Shiller index of home prices in 20 major cities was down 29 percent in December from its July 2006 peak.
This may further explain the renewed strength of the Manhattan luxury real estate market.
Tuesday, March 9th, 2010
Jean-Georges Vongerichten’s newest venture is ABC KITCHEN, a roughly 150-seat café inside ABC Carpet & Home that will serve breakfast, lunch and dinner and fresh juices at a juice bar with a ‘from farm-to-kitchen’ mindset. Located steps off Union Square in the Flatiron District, Vongerichten worked with ABC CEO Paulette Cole on the design, sourcing as locally as possible; that includes plates from Bella Porcelain, made by Cole’s childhood friend Jan Burtz. The result is gorgeous: a room that mixes Downtown loft-style cool with a Tuscan/Provencal twist that actually is authentic Hudson Valley at its best. Svelte Lois Freedman, the diva behind Jean Georges, introduced us last night to the menu and it is wonderful: all ingredients come from within 100 miles of the store and are all organic. Standouts include the crab toast, the carrot and avocado salad and a divine Sea Bass item. Dishes are dead simple, mostly ones Vongerichten makes for his own family. “We want to do what Alice Waters did in the 1970s,” he says. “Handwritten menus, changing daily, seasonal food.” Chef de cuisine Dan Kluger won’t churn his own butter, but he will make his own yogurt….and mixed in with the beets we can attest that its amazing! All the restaurant waste will be re-cycled into compost. What a great addition to the City and neighborhood.
35 East 18th Street Tel: (212) 475-5829.
Tuesday, March 9th, 2010
Neiman Marcus Group Inc. swung to a fiscal second-quarter profit on steep write-downs a year earlier, as the luxury retailer posted higher revenue and lower expenses. The Dallas-based retailer is also owner of BERGDORF GOODMAN. Neiman’s is probably the most important barometer of the Luxury market, and this certainly is a good indicator of the luxury market in general. The key message appears to be that through cost-cutting measures along with improved sales, profits have improved too. The trend to profitability seems consistent: lay-offs. The harch bottom line is that lower income earners suffer at the expense of the top income earners who live for profit. This fuels a stronger luxury market, but reduces the spending power of the lower earners. Hopefully with this rebound the employment market will improve too as the need for additional help registers without impacting profits. All good for the luxury real estate market in New York.