—— U.S. Pending Home Sales Surge; Palantir May Turn First Profit This Year; Apartment Rents Fall in 11 U.S. Cities; NBA Team Owner Gets 6x Return; Twitter Cuts More Executives; Turkey Earthquake Causes $34B Damage; Brookfield Launches $20B Fund
1. U.S. Pending Home Sales Surge
According to data released today by the National Association of Realtors (NAR), the Pending Home Sales Index for U.S. existing homes rose by 8.1% month-over-month in January to 82.5—the largest monthly gain since June 2020—and far exceeding economists’ 1% forecast.
However, pending home sales are still down 22.4% year-over-year.
High mortgage costs remain a key challenge for homebuyers, but lower mortgage rates last month helped revive demand, and discounts became more common.
All four major U.S. regions saw increases in pending home sales in January, with the West leading at 10%.
NAR Chief Economist Lawrence Yun said gains in the West were mainly due to declining home prices, while the South benefited from job growth.
Although pending sales surged in January, the number remains 22.4% lower than a year ago.
______
2. Palantir May Turn First Profit This Year
Data analytics firm Palantir, co-founded by Peter Thiel, announced last Friday it had laid off 70 employees, representing 2% of its workforce, in an effort to cut costs.
Palantir CEO Alex Karp had just declared at the World Economic Forum last month that the company planned to continue hiring this year.
As of the end of 2022, the Denver-based company reported 3,838 employees. In Q4, Palantir posted its first-ever profit and expects fiscal year 2023 to be its first full profitable year.
In August last year, Palantir said it would pursue aggressive hiring to support its ambitious growth plans.
Palantir expects 2023 to be a turning point as it scales operations and maintains profitability.
______
3. Apartment Rents Fall in 11 U.S. Cities
According to new data from real estate brokerage Redfin, median apartment rent prices fell last month in 11 major U.S. cities, dropping from a 2022 peak of $2,053 to $1,942.
While rents remain 2.4% higher year-over-year, they have declined 17.5% from the March 2022 high.
The number of cities experiencing rent declines has increased from 2 a year ago to 11 today. Phoenix and Oklahoma City saw the largest drops, at 6.7% and 6.3%, respectively.
Redfin attributes the decline to reduced demand and increased supply.
Another data set shows that household formation is slowing, largely due to an unfavorable economy and inflation. Many young people are choosing to live with their parents to save money instead of renting their own place.
An increasing number of U.S. cities are seeing rent prices decline due to weaker demand and growing inventory.
______
4. NBA Team Owner Gets 6x Return
Sources report that billionaire investor Marc Lasry has agreed to sell his stake in the NBA’s Milwaukee Bucks to a group of Cleveland Browns co-owners.
The NBA’s board of governors is reviewing Lasry’s sale of a 25% stake, valuing the Bucks at $3.5 billion.
In 2014, Lasry—Chairman and CEO of Avenue Capital Group—partnered with Wes Edens, Co-CEO of Fortress Investment Group, to acquire the Bucks for $550 million.
During that time, under the leadership of superstar Giannis Antetokounmpo, the team reached the Eastern Conference Finals twice and won one championship. Lasry’s investment has since increased sixfold.
Since Lasry’s acquisition, the Bucks have become one of the NBA’s top franchises, dramatically boosting their valuation.
______
5. Twitter Cuts More Executives
Sources report that on Saturday, Twitter fired dozens of staff from its product and marketing divisions, including Head of Product Management Esther Crawford and Senior Product Manager Martijn de Kuijper. Crawford was one of the company’s few senior female executives.
According to The New York Times, internal data shows Twitter’s headcount dropped by more than 200 people.
In an effort to generate more revenue, Elon Musk is pushing Twitter Blue, a subscription service offering enhanced features and a blue verification badge.
Crawford was previously photographed sleeping overnight at the Twitter office—evidence of her intense dedication and the high demands of the role.
Twitter continues trimming leadership amid Musk’s overhaul to reshape its monetization strategy.
______
6. Turkey Earthquake Causes $34B Damage
According to new estimates from the World Bank, the recent massive earthquakes in Turkey have caused at least $34 billion in property damage, highlighting the profound human and economic toll of natural disasters.
The World Bank said today that rebuilding homes, schools, hospitals, and infrastructure in 11 provinces may cost up to $68 billion. An estimated 105,000 buildings have collapsed.
Humberto Lopez, World Bank Country Director for Turkey, said this devastating crisis underscores the country’s high seismic risk and the importance of building-quality infrastructure.
So far, more than 50,000 people have died and 1.25 million have been left homeless by the disaster.
Turkey’s reconstruction will require $68 billion in funding, emphasizing the nation’s high earthquake vulnerability.
______
7. Brookfield Launches $20B Fund
Sources report that Brookfield Asset Management plans to launch its second global energy transition fund by mid-year, targeting $20 billion. If investor demand exceeds expectations, the fund may raise up to $25 billion.
Previously, Brookfield launched the $15 billion Brookfield Global Transition Fund, co-led by former Bank of England governor Mark Carney and Brookfield Renewable CEO Connor Teskey.
The new fund will focus on investing in carbon reduction companies that lack capital and technical expertise. Brookfield, the world’s second-largest alternative asset manager, is also partnering with EIG Global Energy Partners to acquire Australia’s largest coal company, Origin Energy.
Brookfield believes that scaling clean energy is essential to achieving global net-zero goals.
______
This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.