— Country Garden Forecasts $7.6 Billion Loss; July Core CPI Rises Just 0.2%; Biden to Ban Investment in Chinese AI Firms; NYC Rents Keep Rising; Oaktree Launches Largest Private Credit Fund; Chris Xu Plans New LIC Project; Amazon Warehouse Portfolio Secures Refinancing
1. Country Garden Forecasts $7.6 Billion First-Half Loss
Country Garden Holdings Co., China’s sixth-largest property developer, stated in a filing with the Hong Kong Stock Exchange that it expects a loss of RMB 55 billion ($7.6 billion) for the first half of 2023, compared to a profit of RMB 1.91 billion a year earlier.
In the first seven months of this year, Country Garden’s revenue dropped 35% to RMB 140.8 billion, after years of being among the top in revenue rankings.
Country Garden remains one of the few major developers in China that has not defaulted, and it is implementing multiple debt management strategies to ensure long-term growth.
In the past month, Country Garden’s U.S. dollar bonds have dropped 59% in value, while its stock price has fallen 30%.

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2. July Core CPI Rises Just 0.2%
The U.S. Bureau of Labor Statistics reported today that the Core Consumer Price Index rose 0.2% month-over-month in July, matching June’s increase and marking the smallest back-to-back gains in over two years.
Encouragingly for the Federal Reserve, inflation is easing while the labor market and economic growth remain solid.
While the positive CPI data increases the likelihood that the Fed may pause rate hikes, the current inflation rate still remains well above target.
The Fed will review other data before making decisions at its meeting next month.

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3. Biden to Ban Investment in Chinese AI Firms
Sources revealed that U.S. President Joe Biden is expected to issue a new executive order within days, banning U.S. companies from investing in Chinese firms that derive over 50% of their revenue from AI or quantum computing.
The scope of the order is relatively limited, and U.S. private equity and VC firms will still be allowed to invest in diversified companies involved in AI.
One source said the order will target AI firms with military end users and companies in the advanced semiconductor sector. Even if companies fall outside the ban, any U.S. investment in Chinese AI companies will require disclosure.
The order, in development for over a year, is aimed at restricting China’s AI development and technological innovation.
Whether a Chinese company is affected depends on whether AI accounts for over 50% of its revenue.

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4. NYC Rents Keep Climbing Across Three Boroughs
According to the latest survey by Douglas Elliman Real Estate, the median rent for new leases in July rose 2.3% month-over-month to $4,400 in New York City.
Brooklyn rents increased 11% to $3,950, while North Queens—which includes Long Island City and Astoria—saw a 1.9% increase to $3,641.
Landlords continue to test the upper limit of what tenants can pay, though the number of new leases across NYC’s three main boroughs is down compared to last year.
With new families and students moving in during August, rents could climb even higher.

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5. Oaktree Launches Largest Private Credit Fund
Sources say that Oaktree Capital Management plans to raise $18 billion for what would be the world’s largest private credit fund.
The new vehicle will be Oaktree’s 12th fund. The firm currently manages $179 billion in assets.
A pioneer in distressed debt, Oaktree says the fund will lean toward speculative investments, including deep-discounted assets and corporate debt restructuring opportunities.
In Q2, 34 global private credit funds raised a total of $71 billion—double that of Q1.
The final fund size will depend on investor interest and market conditions.

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6. Chris Xu Plans New Long Island City Project
Well-known Chinese developer Chris Xu is planning a 213,000-square-foot mixed-use residential building in Long Island City.
Because Xu purchased the site before June 2022, he is still eligible to apply for 421a tax benefits for rental units, but the project must be completed before June 15, 2026.
Xu is one of the most active developers in Queens. Earlier this year, he acquired a $103 million site in Flushing.
He also plans to build a 700-unit mixed-use building in Rego Park.

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7. Amazon Warehouse Portfolio Secures $1.1B Refi
Preylock Real Estate Holdings recently secured a $1.1 billion refinancing package for a portfolio of 12 Amazon-leased warehouses.
Goldman Sachs is providing a $1 billion fixed-rate loan at 5.38%, and Preylock obtained a $150 million mezzanine loan from an undisclosed firm.
The 100% leased portfolio spans 8.9 million square feet across 10 U.S. states, with an average lease term of 14 years.
While industrial real estate investment reached $21.2 billion in H1 2023, that’s still down from $55 billion a year earlier.
Backed by high-quality tenants like Amazon, the industrial property sector remains resilient.

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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.