—— U.S. Mortgage Applications Surge; LIC Landmark Tower Renovated for Leasing; Nvidia Backs AI Video Firm; Accenture Commits $3B to AI; Citadel Ups High-Yield Credit Bets; Canadian Pension Fund Buys Banff Resort; Top U.S. Diplomat Visiting China
1. U.S. Mortgage Applications Surge
According to the Mortgage Bankers Association (MBA), the U.S. mortgage application index jumped 7.6% in the week ending June 9, reaching a four-week high of 163.2.
Refinance applications also rose 7.2%, marking the largest weekly gain in three months.
The average 30-year mortgage rate dropped 4 basis points to 6.77%, and refinance applications increased by 6%.
While inventory remains low and borrowing costs are high, the market appears to be adjusting to elevated mortgage rates, with potential opportunities to refinance later.
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2. LIC Landmark Tower Renovated for Leasing
Originally built in 1989 for Citigroup, the 1.5 million sq ft skyscraper in Long Island City, One Court Square, was acquired by Savanna 25 years later.
Years ago, Amazon nearly leased 1 million sq ft at the property for its HQ2, but ultimately backed out—leaving the tower’s fate uncertain.
Savanna’s Chief Real Estate Officer, Brian Reiver, remains optimistic about the building’s future, calling it one of the highest-quality office towers outside Manhattan.
Sitting atop the Court Square subway station and just minutes from Midtown, the property has undergone major upgrades including $7 million in sustainability infrastructure and a 27-floor amenity overhaul.
Savanna has appointed Cushman & Wakefield to handle leasing and has already attracted new tenants like Target, which leased 31,000 sq ft in April.
Originally built for Citigroup, One Court Square remains LIC’s most iconic historic high-rise.
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3. Nvidia Backs AI Video Firm
London-based AI video startup Synthesia has raised $90 million in a Series C round at a $1 billion valuation. Backers include Accel, Nvidia’s NVentures, and existing investor Kleiner Perkins.
CEO and co-founder Victor Riparbelli said the company wasn’t actively seeking funding, but shared a vision with Accel and Nvidia that AI video will empower creators and disrupt education and film production.
Founded in 2012, Synthesia has helped over 50,000 companies generate more than 12 million videos. Its total funding now exceeds $156 million.
AI-generated video is emerging as a key future trend in content creation.
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4. Accenture Commits $3B to AI
Consulting giant Accenture announced on Tuesday that it will invest $3 billion over the next three years to hire new AI talent, retrain existing staff, and acquire AI-focused companies.
CEO Julie Sweet noted that AI is a pivotal trend across the 19 industries that Accenture serves globally.
With technology evolving rapidly, Accenture aims to guide clients toward faster, smarter decision-making via AI consulting.
This week, Salesforce Ventures also doubled its Generative AI Fund to $500 million.
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5. Citadel Ups High-Yield Credit Exposure
Ken Griffin, billionaire founder of Citadel, said in an interview in Hong Kong that he still believes a US recession in 2024 is hard to avoid. Citadel will seek more opportunities in the credit market, which could become a major source of returns later this year.
Griffin said the company will focus more on high-yield credit markets, pursuing both short- and long-term strategies. He expects the Federal Reserve to raise interest rates once more this year and then pause for a while.
Currently, Bloomberg economists predict that a US recession could begin in Q3, with a 65% chance of occurring within the next 12 months.
From the beginning of the year through the end of May, Citadel’s flagship Wellington fund returned 6.1%. All of the firm’s strategy funds—including equity, fixed income, commodities, quantitative, and credit—posted positive returns last month.
Griffin also forecasted that China’s GDP growth this year may exceed 5%.
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6. Canadian Pension Fund Buys Banff Resort
Recently, the real estate arm of Canada’s major public pension fund—Oxford Properties—acquired the Rimrock Resort Hotel in Banff National Park for $128 million.
Tyler MacDonald, head of hotel investments at Oxford Properties, said the company is a long-term investor and strongly believes in the future of the global tourism industry, which has grown consistently for nearly 75 years.
Banff National Park is one of Canada’s top tourist destinations, known for skiing and golf, as well as hiking and biking in summer. Oxford plans to invest another $75 million to renovate the resort.
Oxford noted that properties within Banff Park are rare, making this acquisition a unique opportunity.
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7. Top US Diplomat to Visit China This Week
From June 16 to 19, the US’s highest-ranking diplomat, Secretary of State Antony Blinken, will visit Beijing to help ease current tensions between the two countries. Blinken will be the most senior US official to visit China in nearly five years.
In recent months, US-China communication has suffered setbacks. Blinken’s primary mission is to resume dialogue and prevent further deterioration. US officials do not expect any major breakthroughs from this trip.
Blinken originally planned to visit in February, but multiple incidents earlier this year worsened relations.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.