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The New York Times took a deep dive into how Guangzhou-based property developer China Evergrande Group has spiraled to bankruptcy and possible dissolution, noting poor corporate oversight played a big role in the company’s undoing.
The company defaulted on $300 billion in debt in 2022 and faces dissolution if executives can’t reach a comprehensive deal with creditors within two months.
Evergrande’s issues also spurred serious problems across the Chinese economy and development sector.
“Evergrande’s collapse was just one domino in a falling line,” the newspaper reports. “Since then, 46 other developers have defaulted, leaving a landscape of boarded-up construction sites, angry home buyers and unpaid builders. Worried about social unrest, the authorities have quietly pushed for the companies to continue building apartments. Evergrande built 300,000 apartments in 2022 while the company talked to its creditors about repaying them.”
There are some early signs that the Federal Reserve could soon declare victory on inflation and start to reverse course on interest rates, despite Chairman Jerome Powell stating rate cuts aren’t in the near future, Axios reports.
Some economists and market watchers say rate cuts could be in store as soon as March.
“All the pieces are there, the Fed just needs to put them together,” said Tim Duy, SGH Macro Advisors’ chief U.S. economist. “I have high confidence the data will unfold in a way that allows for the Fed to cut by then.”
Las Vegas hotels generated almost $220 million in rooms revenue around the F1 Las Vegas Grand Prix, according to CoStar’s Emmy Hise. She noted there are signs that guests opted to stay longer in the popular leisure destination compared to races in Austin and Miami.
“Attendees may have arrived on Wednesday to ensure they were ideally positioned for their first look at the cars on the Vegas strip for Thursday night’s practice session,” Hise writes. “This could also be why it became such a debacle when the practice session had to be canceled due to issues with the track. Still, from Wednesday through Sunday, hotel revenue was nearly $220 million.”
Blackstone has purchased the Moxy Kyoto Nijo in Japan for 8 billion yen ($54 million) from Goldman Sachs, Bloomberg reports. The property opened in July 2021 and is near Kyoto’s Nijo Castle.
The news outlet notes this is yet another example of the popularity of Japanese hotels among Asian real estate.
“Investors are betting that tourism will continue to recover as the yen weakens, and are attracted by the ability of hotel operators to change room rates in an inflationary environment,” Reuters reports. “As of August, foreign investors had spent $2 billion on hotel deals in Japan in 2023, more than any other sector in Asian commercial property and surpassing 2022’s annual investment figure, according to MSCI Real Assets.”
Mounting concerns about state and local government debt has spurred Moody’s to cut China’s credit rating outlook. The country represents the second-largest economy in the world but is dealing with a “deepening property crisis,” Reuters reports.
“The outlook change also reflects the increased risks related to structurally and persistently lower medium-term economic growth and the ongoing downsizing of the property sector,” Moody’s said.
China was officially listed as “stable” by the agency but has been downgraded to “negative.”