—— June Global Temperatures Hit Record High; More Manhattan Buyers Pay Cash; US VC Investment Nearly Halved; US Companies Added 500,000 Jobs in June; NYC Office-to-Residential Conversions Face Challenges; NYC-NJ Gateway Tunnel Wins Federal Funding; Threads Surpasses 30 Million Registrations on Launch Day
1. June Global Temperatures Hit Record High
According to a report by Europe’s Copernicus Climate Change Service, June 2023 was the hottest June globally in the past 30 years, with record-breaking temperatures across much of Western Europe.
Ocean temperatures, after three consecutive months of increase, have reached their highest levels since 1991.
June’s global air temperature was 0.5°C higher than the 1991–2020 average, and the rapid warming could lead to extreme weather events and affect food production and the global economy.
The first El Niño event in four years is developing, potentially impacting economies worldwide.
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2. More Manhattan Buyers Paying Cash
A new report from Douglas Elliman shows that in Q2 this year, 65% of Manhattan homebuyers paid in cash, up from 57% in Q1 and the highest since 2014.
With mortgage rates nearly doubling since early 2022, all-cash offers have become more attractive to buyers and sellers alike.
The median Manhattan home price was $1.2 million, down 4% year-over-year.
Cash buyers have more leverage for negotiation, making fast closings an appealing option.
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3. US VC Investment Nearly Halved
According to PitchBook, US venture capitalists closed 3,011 deals in Q2, down about one-third year-over-year.
Total investment volume nearly halved to $39.8 billion.
Angel and seed rounds saw the steepest declines, although analyst Kyle Stanford argues that slowing VC investment could be healthy after the overly aggressive funding during the pandemic.
Easy money during COVID allowed even lower-quality startups to secure funding, creating long-term risks.
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4. US Companies Added 500,000 Jobs in June
ADP Research Institute and Stanford Digital Economy Lab data shows US companies added nearly 500,000 jobs in June, while layoffs fell to an eight-month low.
Separate reports showed the US services sector added more jobs than expected.
While strong labor market data raises pressure on the Federal Reserve to hike rates, it also suggests the economy could achieve a soft landing.
Good employment numbers increase the likelihood of more Fed rate hikes but signal economic resilience.
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5. NYC Office-to-Residential Conversions Face Challenges
Joey Chilelli, managing director of Vanbarton Group, explained the complexity of office-to-residential conversions on Bloomberg’s Odd Lots podcast.
Vanbarton has completed several projects, including the conversion of 180 Water Street into 573 apartments, and is now working on nearby 160 Water Street.
Challenges include:
- High costs: renovations are expensive and require charging higher rents.
- Zoning restrictions: only pre-1977 (Downtown) or pre-1966 (Midtown) buildings qualify.
- Structural issues: ceiling heights, plumbing, and lighting are often incompatible.
Due to high conversion costs, landlords must charge premium rents to recover expenses.
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6. NYC-NJ Gateway Tunnel Wins Federal Funding
The Gateway project linking New York and New Jersey secured $6.9 billion in federal funding, the largest-ever grant by the Federal Transit Administration.
Senator Chuck Schumer credited the 2021 $1 trillion infrastructure bill for the funding.
Total costs for the Hudson River tunnel have risen to $16.1 billion, 14% higher than 2021 estimates, with half funded federally and the rest split between New York and New Jersey.
President Biden emphasized the project’s importance for the Northeast Corridor’s economy and transportation.
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7. Threads Surpasses 30 Million Registrations on Launch Day
Meta launched its Twitter competitor Threads, surpassing 30 million users within the first 24 hours.
CEO Mark Zuckerberg said Threads aims to offer a “friendlier” social media experience. Users can post up to 500 characters, share photos, videos, and links.
Mark stated that Threads quickly attracted tens of millions of users and that commercialization will not begin until the platform reaches one billion users.
Registration requires a linked Instagram account, aiming to leverage Meta’s existing social graph.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.