— NYC Rent-Stabilized Apartments Face Major Shift; Manhattan Office Leasing Slows Further; AI Fintech Firm Raises $80M; U.S. Job Openings Miss Forecasts; Goldman Builds Dallas Campus; SEC Introduces 72-Hour Disclosure Rule; Toronto Home Sales Surge
1. NYC Rent-Stabilized Apartments Face Major Shift
At a meeting held Tuesday, New York City’s Rent Guidelines Board announced that for over 1 million rent-stabilized apartments across the city, two-year lease renewals could face rent hikes of 4% to 7%, while one-year renewals may see increases of 2% to 5%.
A final vote on the new proposal will take place in June. If passed, this would mark the second consecutive year of significant rent hikes for NYC rent-stabilized apartments.
Building owners have been pressuring the board to approve higher rent increases in order to cover rising operating costs.
Currently, more than 2 million New Yorkers live in rent-stabilized apartments, and beginning October 1, their renewal costs are likely to rise significantly.
Meanwhile, data from appraisal firm Miller Samuel show that median rents for Manhattan market-rate apartments rose 13%.
Many tenant advocacy groups have protested, demanding rent freezes or even rent reductions.
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2. Manhattan Office Leasing Slows Further
According to a new report from Colliers, 1.5 million square feet of Manhattan office space was leased in April, down 8% from March and 44% from a year earlier.
April’s leasing volume was far below the monthly average over the past three years. In 2022, the average monthly leased space was 2.4 million square feet, and even during the height of the pandemic in 2020, the monthly average was 1.6 million.
Average asking rent in Manhattan rose about $1 to $75 per square foot in April. The availability rate increased 0.3% to 17.4%, matching the peak from February 2022.
Net absorption in April was negative 1.35 million square feet, meaning more space was vacated than newly leased. Overall, available office space is now 75% higher than in March 2020.
Downtown Manhattan office leasing plunged 60% from March, with average asking rents dropping to $59 per square foot.
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3. AI Fintech Firm Raises $80M
Singapore-based fintech firm Advance Intelligence Group has secured $80 million in new funding from existing shareholders Warburg Pincus and Northstar Group.
Advance Intelligence’s core platform is Atome, an AI-powered buy-now-pay-later digital lending service. To date, the company has raised more than $700 million.
In 2021, it received $400 million in a Series D round led by SoftBank Vision Fund 2, which valued the company at around $2 billion.
Advance Intelligence co-founder Jefferson Chen stated that the new funding will help accelerate the integration of AI technology and expand access to credit and financial products for consumers.
Currently, Advance Intelligence serves more than 40 million individuals, 235,000 merchants, and 500 enterprise clients.
The firm’s shareholders also include China-based Vision Plus and Gaorong Capital.
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4. U.S. Job Openings Miss Forecasts
The latest U.S. Department of Labor survey shows that in March, job openings declined for the third straight month to 9.59 million, falling below expectations and marking the lowest level in nearly two years.
The data suggest labor demand is easing, labor supply is becoming more balanced, and wage inflation may start to cool. The number of voluntary quits also declined, indicating that Americans are becoming more cautious about job security.
Recently, financial and tech companies have carried out large-scale layoffs, though the labor market remains generally resilient.
Layoffs reached their highest level since December 2020, with real estate development, accommodation and food services, and healthcare among the most affected sectors.
Currently, there are 1.6 job openings per unemployed person, the lowest since October 2021. Before the pandemic, when the job market was booming, that ratio was 1.2.
A cooling labor market is what the Fed wants to see, as it could further ease wage-driven inflation.
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5. Goldman Builds Dallas Campus
Goldman Sachs plans to develop an 800,000-square-foot office campus in the Victory Park area of Dallas, Texas. Construction will begin this year, and the facility will accommodate 5,000 employees upon completion.
Last week, CEO David Solomon said Dallas is a great city with a strong talent pool, and the company has been committed to its local presence since first entering the market in 1968.
Once completed, the new campus will become Goldman’s largest U.S. office location outside of New York, consolidating all employees in North Dallas into one site.
Statistics show that over the past decade, financial jobs in Dallas have grown by 33%, twice the national average.
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6. SEC Introduces 72-Hour Disclosure Rule
Today, the U.S. Securities and Exchange Commission (SEC) announced plans to approve a new policy requiring large hedge funds to report major investment losses within 72 hours of a significant event.
Previously, hedge funds were only required to report quarterly. Under the new rule, regulators will have earlier insight into events that seriously impact investment returns. Private equity firms may also be subject to the same rule.
SEC Chair Gary Gensler stated that private investment fund strategies have grown increasingly complex and are now deeply intertwined with the broader capital markets.
In January 2022, the SEC had proposed requiring hedge funds to disclose major events within one day.
The SEC aims to use the new policy to improve transparency in hedge fund investments and understand the impact of major losses on investors.
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7. Toronto Home Sales Surge
The Toronto Regional Real Estate Board announced today that housing transactions in April jumped 27% month-over-month, the biggest monthly increase in more than two decades.
Average home prices in April rose 2.4% to C$815,000, erasing all losses from earlier in the year.
After the Bank of Canada aggressively raised rates last year, home prices plunged at a record pace. With rate hikes now on pause, buyers are returning to a market short on supply.
Although Toronto’s April home sales were still down 5.2% year-over-year, the number of new listings dropped 38%.
With rate hikes paused and market conditions stabilizing, buyers are returning and competing for limited housing inventory.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.