The summer of 2023 was hotter than any other in the Northern Hemisphere for the past two millennia, according to a study published Tuesday in Nature. And as scorching as 2023 was, the coming summer could be even hotter — largely because of manmade climate change heating the planet, compounded by an El Niño weather cycle.
Scientists previously determined that 2023 was the hottest year since 1850, when global modern temperature records began. The researchers managed to establish a 2,000-year record by combining instrumental measurements with climate reconstructions. They found the extreme warmth of last summer not only smashed modern records but also exceeded the warmest summer prior to the instrumental record — in the year 246 — by more than 32 degrees Fahrenheit, with almost all natural climate variations taken into account. And it was almost 39F warmer than the coldest summer (in 536).
“When you look at the long sweep of history, you can see just how dramatic recent global warming is,” Ulf Büntgen, a study co-author from the University of Cambridge in the U.K., said in a statement. “2023 was an exceptionally hot year, and this trend will continue unless we dramatically reduce greenhouse gas emissions.”
Büntgen and his colleagues limited their analysis to the landmasses between the 30th parallel north and the North Pole, because that’s where most of the world’s long-standing meteorological stations are. They also reconstructed historical climate conditions in this zone by studying thousands of tree rings from nine regions in the Northern Hemisphere. Weather influences how trees form the layers of wood in their trunks, so tree rings contain key clues to past temperatures. Given the strong correlation between tree rings and summer temperatures, the researchers focused on June through August.
They found a lack of consistency between tree-ring-enabled climate reconstructions and instrument-based measurements during the second half of the 19th century, raising the question of whether older thermometers produced inaccurately high temperature readings. The consequence of that, according to the researchers, is a “systematic warm bias” in early instrumental observations, which are used widely as the baseline for global climate science.
The tree-ring data also reveals that most of the cooler periods over the past 2,000 years came after major volcanic eruptions, which spewed huge amounts of aerosols into the stratosphere and triggered rapid surface cooling. Meanwhile, most of the warmer periods can be attributed to El Niño, one of three phases of a multi-year climate cycle known as the El Niño-Southern Oscillation that disrupts weather patterns worldwide and typically drives up summer temperatures in the Northern Hemisphere.
El Niño is a natural climate phenomenon, but scientists say global warming caused by burning fossil fuels and other human activities is intensifying its strength. That, in turn, creates more extremely hot summers.
An El Niño phase began in June 2023 and is ongoing, though expected to end in coming weeks.
“It’s true that the climate is always changing, but the warming in 2023, caused by greenhouse gases, is additionally amplified by El Niño conditions, so we end up with longer and more severe heat waves and extended periods of drought,” said Jan Esper, the study’s lead author and a professor of climate geography at Johannes Gutenberg University Mainz in Germany.
The study notes that the 2015 Paris Agreement goal to limit temperature rises to 1.5C above pre-industrial levels “has already been superseded” in the Northern Hemisphere. Although the conclusion cannot be applied on a global scale, as the warming rate varies among high and low latitudes and from land to sea surfaces, the research findings “clearly demonstrate the unparalleled nature of present-day warmth at large scales,” the authors write.
It also reaffirms what some climate scientists have warned: As climate change is amplified by an El Niño, 2024 will likely see temperature records broken again. In recent weeks, exceptional heat waves have baked many countries across Asia, with Myanmar experiencing its hottest-ever April temperature of 119F.
It's hard enough for central bankers and Wall Street traders to make sense of the post-pandemic economy with the data available to them. At Wells Fargo, senior economist Tim Quinlan is particularly spooked by the “phantom debt” that he can't see.
That specter lurks behind buzzy "Buy Now, Pay Later" platforms, which allow consumers to split purchases into smaller installments. The major companies that provide these so called “pay in four” products, such as Affirm Holdings, Klarna Bank and Block’s Afterpay, don’t report those loans to credit agencies.
Time and again, they’ve resisted calls for greater disclosure, even as the market has grown each year since at least 2020 and is projected to reach almost $700 billion globally by 2028. That’s masking a complete picture of the financial health of American households, which is crucial for everyone from global central banks to U.S. regional lenders and multinational businesses.
Consumer spending in the world’s largest economy has been so resilient in the face of stubbornly high inflation that economists and traders have had to repeatedly rip up their forecasts for slowing growth and interest-rate cuts. Still, cracks are starting to form. First it was Americans falling behind on auto loans. Then credit-card delinquency rates reached the highest since at least 2012, with the share of debts 30, 60 and 90 days late all on the upswing.
There are signs that consumers are struggling to afford their BNPL debt, too. A recent survey conducted for Bloomberg News by Harris Poll found that 43% of those who owe money to BNPL services said they were behind on payments, while 28% said they were delinquent on other debt because of spending on the platforms.
For Quinlan, a major concern is that economic experts are being “lulled into complacency about where consumers are.”
“People need to be more awake to the risk of BNPL,” he said in an interview.
Blame game
BNPL is a black box largely because of a longstanding blame game among BNPL providers and the three major credit bureaus: TransUnion, Experian and Equifax. The BNPL companies don’t provide data on their installment loans that are split into four payments, which were used by online shoppers to spend an estimated $19.2 billion in the first quarter, according to Adobe Analytics, up 12.3% compared with the same period last year.
The BNPL behemoths say credit agencies can’t handle their information — and that releasing it could harm customers’ credit scores, which are key to securing mortgages and other loans. The big three bureaus say they're ready, while two of the major credit scoring firms, VantageScore Solutions and Fair Isaac Corp., say they're equipped to test how the products will affect their figures. Meanwhile, regulation is looming over the industry, but this stalemate has left the status quo mostly in place.
There have been signs of progress. Apple earlier this year became the first major BNPL provider to furnish transaction and payment data to Experian. As of now, it provides a snapshot of consumers’ overall debt load from Apple Pay Later transactions, but the information won’t be used for consumer credit scores.
In separate statements to Bloomberg, Klarna, Affirm and Block said they want assurance that consumers’ credit scores and their data would be protected before reporting customer information. Representatives for TransUnion, Experian and Equifax said they’ve updated their structures and the data would be secure.
All the while, the lack of transparency has researchers at the Federal Reserve Bank of New York, which publishes a comprehensive quarterly report on the $17.5 trillion in household debt, convinced they’re missing some of what’s happening in the economy.
“They’ve reached a certain scale that they could impact economists’ assumptions about their economic outlooks," said Simon Khalaf, Chief Executive of Marqeta, a firm that helps BNPL providers process their payments.
Hiding consumer distress
The Harris Poll survey, conducted last month, provides some crucial clues about how Americans use BNPL. For one, splitting payments into smaller chunks encourages more spending.
More than half of respondents who use BNPL said it allowed them to purchase more than they could afford, while nearly a quarter agreed with the statement that their BNPL spending was “out of control.” Harris also found that 23% of users said they couldn’t afford the majority of what they bought without splitting payments, while more than a third turned to the services after maxing out credit cards.
The findings also show that the spending, which for more than a third of users has exceeded $1,000, isn’t entirely on big-ticket items. Almost half of those using BNPL say they've started, or have considered, using it to pay bills or buy essential items, including groceries.
So far, the small pockets of consumer distress that have emerged in the US have been chalked up to a bifurcated economy where working class Americans struggle to make ends meet. But the survey found that middle-class households are relying on BNPL, too.
About 42% of those with household income of more than $100,000 report being behind or delinquent on BNPL payments.
“BNPL essentially lets people dig a deeper and deeper hole of credit, which will be harder and harder to climb out of,” said Ed deHaan, a professor of accounting at Stanford Graduate School of Business, adding that it happens “more easily when there’s no transparency.”
How it works
The option to pay in installments using short-term loans has been around for several years, but exploded in popularity during the pandemic, especially with younger, digitally savvy consumers who gravitated to the services as an alternative to credit cards. The pioneering BNPL companies, including Afterpay, Klarna and Affirm, launched with trendy retailers, partnered with social media influencers and became a common option on apps and online checkouts.
BNPL offers quick credit approvals and lets consumers pay in installments. The first is usually due right away, and the others are often collected once every two weeks for the popular “pay in four” loans. There’s typically no interest or fees, as long as payments are made on time. Like credit card companies, BNPL firms make money on fees from merchants — and some have steep penalties for missed payments.
The rapid adoption of the products has enticed major financial institutions to offer the option to split payments, even as regulators warn them of the risks. That includes PayPal Holdings, U.S. Bancorp and Citizens Financial Group. Even big banks like Citigroup Inc. and JPMorgan Chase have similar capabilities on their credit cards.
The industry has branded itself a financial equalizer. They argue that “soft-credit checks” — when a lender runs a consumer’s credit history without affecting their score — expand credit access to those underserved by traditional lenders, while zero-interest provides a better deal than many cards.
Affirm said its customers have an average outstanding balance of $641, while Afterpay and Klarna put the figure at $250 and $150, respectively. The average credit card balance was $6,501 in the third quarter of 2023, according to Experian data.
Still, critics argue BNPL is particularly attractive to the financially vulnerable. The Consumer Financial Protection Bureau has flagged risks to consumers, including surprise late fees and “hidden interest” — or when BNPL purchases are made with credit cards charging high interest rates. The CFPB has also expressed concern about “loan stacking,” when individuals take out several BNPL loans at once with different providers.
Some BNPL services, including Afterpay and Klarna, require borrowers to agree to “mandatory autopayment,” meaning the companies can automatically charge the credit card or bank account on file when a payment is due. Those who link the latter are potentially vulnerable to overdraft fees.
Stretched thin
Robust consumer spending and low unemployment rates have many economists convinced the consumer remains strong, making Wall Street bullish on the economy. But lately, stubbornly persistent inflation has dialed back expectations for imminent interest-rate relief.
That’s set to ramp up pressure on households that are already stretched thin by higher prices for everything from gas and food to rent and apparel. As of the end of December, almost 3.5% of credit-card balances were at least 30 days past due, according to the Philadelphia Fed, the most since the data began in 2012. Nominal card balances also set a new high.
For those who are falling behind, BNPL offers what appears to be a no-brainer decision: space out payments.
That was the thinking of Hayden Waschak, a 23-year-old in Pittsburgh. Even though he said it felt “dystopian” to use BNPL to pay for food, he began using Klarna in February to spread out payments on a grocery delivery app.
It helped his finances — at first. After he lost his job as a documents processing specialist at University of Pittsburgh Medical Center in March, he relied more heavily on the service. And without any income, he became delinquent on payments and started racking up late charges. He eventually paid off the nearly $200 balance, but he said his credit score dropped.
“Unexpected life events caused me to lose income,” Waschak said. “I ended up paying more than if I had paid for it all at once.”
A representative for Klarna said the company doesn’t report data to credit bureaus and “therefore consumer credit scores are not negatively impacted when using Klarna's BNPL options.”
Debt collection
The BNPL providers’ stalemate with the bureaus means users get little upside when it comes to their credit — paying on time won’t help them build up their score. On the other hand, the downside is still there for falling behind: not only can they get charged late fees, but delinquent BNPL loans can be turned over to debt collectors.
The latter is what Fabrizio Lopez said happened to him. He used Affirm to split up a $500 online payment for used-car parts five years ago. The Long Island-based mechanic, who doesn’t have a traditional credit card, said that while he received the items a week later, he never got a bill. That is, until debt collection letters started pouring in from across the US.
Lopez said he primarily relied on cash before that purchase, so the unpaid loan stands out on his credit profile. Now 30, he worries that a the BNPL purchase has created “invisible barriers” to the financial system.
“They hook you with the idea of no interest rates,” he said. “I thought that I would be able to build my credit if I paid it back — I was so wrong.”
When 111 Livingston St. was developed more than 50 years ago, it was the tallest building to rise in Brooklyn since the 1930s and included an on-site power generator, an unusual amenity for the time. More recently, the 22-story, 400,000-square-foot office tower has become known for tenants vocal about poor conditions inside.
Brooklyn Law School vacated the premises last year, court records show, after alleging the air quality was “poor” and that the landlord had failed to fix elevators after an employee got trapped on one for over an hour because the emergency-call button didn’t work. In 2022, another tenant, Legal Aid Society, sued because “white, bluish and grey fuzzy circular mold colonies…[were] growing on office chairs, desks, any wooden object, clothing, other office furniture, shoes, and wall hangings,” according to its lawsuit.
An attorney for the building owner, Leser Group, said the Legal Aid lawsuit was settled “amicably” and the tenant has returned and is paying rent. “The conditions are fixed,” said the attorney, Louis Solomon, a partner at law firm Reed Smith. Legal Aid declined to comment.
Now 111 Livingston faces the loss of its biggest tenant, the New York State Office of Temporary and Disability Assistance, which leases 30% of the space.
“The largest tenant…is scheduled to roll in May 2024,” Fitch Ratings said in a report yesterday, “but an extension has yet to be executed.”
OTDA, which dispenses cash grants for New Yorkers in need and supervises housing for the homeless, will relocate to 5 Beaver St. in Lower Manhattan, a spokesman said.
Brooklyn-based Leser Group acquired 111 Livingston in 1995. A 2018 appraisal valued the building at $232 million. Leser Group is managed by founder Abraham Leser and owns about 2 million square feet of commercial property in New York, Connecticut and Pennsylvania. Fitch said yesterday that 111 Livingston’s $120 million mortgage has been delinquent twice in the past 12 months.
“Mr. Leser has been associated with multiple foreclosures,” bond-rating firm KBRA observed in a 2020 report.
Thanks to 111 Livingston’s downtown location and proximity to several subway lines, its average occupancy rate was nearly 100% for 20 years, KBRA said. But since 2020 occupancy has fallen to 80% after defense contractor Northrup Gruman and the New York State Workers’ Compensation Board both left.
Leser Group offered an extension to ODTA, a tenant since 1999, but the agency didn’t accept it, KBRA said in a March report.
Louis Stahl, a principal at Leser Group, said he is confident the firm will fill the space and is in leasing talks with several prospective tenants, including federal agencies such as the General Services Administration.
“The building is in excellent condition,” he said.
Beginning this month, Medicare beneficiaries in 11 states can access virtual mental health care through Talkspace, the Upper West Side-based telehealth company announced Tuesday.
Talkspace started the process of getting licensed as an approved Medicare provider about a year ago, Dr. Jon Cohen, the company’s chief executive, after Medicare began permanently covering telehealth mental health services in 2020. The initiative will match older patients with licensed providers for virtual sessions on the company’s platform. About 13 million beneficiaries in states with large populations that are covered by the insurance, including New York and California, will be able to access care.
The expansion comes as the need for mental health care among older New Yorkers is rising. The Mayor’s Office of Community Mental Health’s latest report shows about 85,000 older individuals in the city experienced depression in 2017, but less than 25% of those with mental illness currently receive professional treatment. The impact of the Covid-19 pandemic worsened the issue, according to the agency, and the population faces disproportionate challenges in accessing care. The city’s fiscal 2025 executive budget for its Department for the Aging, which runs mental health programming for seniors, is $493 million.
Cohen told Crain’s that getting Talkspace providers approved for Medicare is an integral part of the company’s goal of being the largest in-network provider of virtual mental health services in the country. Medicare represents a “very significant” opportunity to expand the firm’s reach, he said. He added that currently, a very limited number of behavioral health providers accept Medicare, an access barrier the initiative aims to break down.
While Cohen did not share exactly how much Talkspace invested in the initiative, he said getting providers credentialed and building infrastructure to bill Medicare was a “significant undertaking.” Talkspace might have to bill differently depending on whether each provider is a psychiatrist or therapist, and Cohen said he expects reimbursement rates to be slightly less than those of commercial insurers.
The Medicare initiative is Talkspace’s latest bid to expand coverage for subsets of New Yorkers that often lack access to behavioral health care. Last November the company launched Teenspace, a partnership with the city that offers counseling to young adults who show signs of depression, anxiety and other mental illnesses. A $26 million contract will fund the pilot program through September 2026.
Talkspace aims to expand to all 50 states and cover 33 million Medicare members plus those enrolled in some Medicare Advantage plans by the end of 2024, according to the company.
Talkspace was founded in 2012. The company’s first-quarter results, released last week, surpassed analyst’s expectations with $45 million in revenue, a 36% increase over the first quarter of 2023.
This year marks the 60th anniversary of the 1964-1965 New York World’s Fair in Flushing Meadows-Corona Park in Queens. Taking place just 25 years after the 1939 World’s Fair in the same location, the World’s Fair was the largest international exhibition ever constructed in the United States, with 140 pavilions representing 80 nations, 24 U.S. [...]
The post Vintage photos look back on the futuristic 1964 New York World’s Fair in Queens first appeared on 6sqft.
New York City will assume control of 122 acres of Brooklyn waterfront and transform it into a modern port facility with housing, retail and green space, Mayor Eric Adams announced Tuesday.
City economic development officials plan to take over the redevelopment site in June from the Port Authority of New York and New Jersey. The site stretches from just south of Brooklyn Bridge Park and down to Red Hook. The property will be transferred to the city in a no-cash deal through an agreement that city, state and port officials intend to formally sign this week.
“This is the largest city real estate transaction in recent history,” Adams said during a Tuesday news conference flanked by government officials. “It's going to create a neighborhood on our shoreline that truly displays the promise of New York City.”
The Adams administration says the site, which includes the Brooklyn Marine Terminal, will be reimagined as a shipping hub to grow the city’s maritime freight industry while decreasing its reliance on trucks. One way to accomplish that is through micro-distribution, such as cargo bikes and electric vans, for the last leg of deliveries. Adams said the site will also include a new mixed-use community with opportunities for housing, retail and green space.
The city will invest an initial $80 million into the terminal to repair three existing piers and plan the waterfront’s future. Adams said funds for the project come from “capital dollars and other sources” along with state assistance. Gov. Kathy Hochul said her administration will kick in another $15 million to help overhaul the site.
None of the land will be procured through eminent domain, the city said.
As part of the arrangement, the city will transfer ownership of its 225-acre portion of the Howland Hook Marine Terminal in Staten Island to the Port Authority. The move will bring the shipping facility entirely under the control of the Port Authority, which plans to build on its operations.
Beginning this spring the Adams administration plans to launch a community engagement process along with a master planning process to develop a vision for the Brooklyn waterfront site. Those efforts will unfold over the next six to nine months.
After securing the necessary land use approvals, the city says it will issue requests for proposals for an operator for the port facility and other maritime work, according to Deputy Mayor Maria Torres-Springer.
“We know for sure at the core of this project will be a working waterfront,” she said. “All of the other community uses from open space to housing will be considered because it’s a large site and we want to make sure we keep everything on the table.”
New York City is transforming a 122-acre stretch of Brooklyn’s coastline into a dynamic, mixed-use community and modern maritime port. Mayor Eric Adams on Tuesday announced an agreement that gives the city full control of the Brooklyn Marine Terminal, enabling its redevelopment into a vibrant community hub with housing, retail, green space, and a modern [...]
The post NYC to redevelop 122-acre stretch of Brooklyn coastline first appeared on 6sqft.
Leases
Law firm inks major lease by Grand Central
Address: 22 Vanderbilt Ave., Manhattan
Landlord: Milstein Properties
Tenant: Duane Morris LLP
Lease size: Approx. 80,000 square feet
Asset type: Office
Brokers: CBRE's Bill Iacovelli and Conor Denihan represented the tenant. CBRE's Paul Amrich, Neil King, Jeffrey Fischer, Sacha Zarba and Meghan Allen represented the landlord, along with Brookfield Properties' Duncan McCuaig, David Caperna and PJ Massey.
Sales
Luxury condo developer picks up former city office site near Union Square
Address: 8 W. 14th St., Manhattan
Seller: Philips International
Buyer: Legion Investment Group
Sale price: $57.5 million
Asset type: Office
Financings
Condo in Carhart Mansion lands nearly $15 million loan
Address: 3 E. 95th St., Manhattan
Owner: Dean Adler
Lender: JPMorgan Chase
Loan amount: $14.9 million
Asset type: Condo
Rents may be creeping up again. But a rise in inventory in some outer-borough neighborhoods could offer some relief soon, according to a new report.
Mott Haven, in the Bronx; Greenpoint, Brooklyn; and Astoria, Queens, all enjoyed modest bumps in supply in April versus April 2023, said real estate listings service StreetEasy.
Though some of the increases seem small in absolute terms — Mott Haven added 178 units to its rental stock, for a total of 387 that were available last month — the boosts could move the needle slightly on some blocks, according to the report.
Just across the Harlem River from Manhattan, the South Bronx neighborhood, which has been awash in high-rise construction, still saw prices climb in the past year. Its median asking rent reached $3,050 in April, a 6% increase in a year, according to the data, which analyzed both market-rate and income-restricted affordable units.
But prices could plateau if supply keeps nudging upward in the next few months, StreetEasy said.
Greenpoint, meanwhile, with a 47% rise in available apartments, for a total of 507, tied for second with Astoria, with 1,377, according to the data. Other areas with upticks in rental listings, whether from the opening of new projects or turnover of existing units, though the vacancy rate of 1.4% is historically tight, included Bushwick, Williamsburg and East Flatbush, in Brooklyn.
But four Manhattan neighborhoods also made the top-10 list, one of which was Midtown South, a swath that contains some blocks in Chelsea, Murray Hill and the Garment District. The neighborhood’s inventory rose 13% in a year, according to the data, and its median asking rent of $5,000 a month didn’t budge over that time frame.
Of course, if new apartments are coming online now, they were planned years ago, when developers appeared to be in a more pro-construction mood than they are today.
Indeed, builders filed permits for just 9,909 units across 285 projects in 2023, a haul that came in far below the 50,000 units a year Mayor Eric Adams has said are necessary to keep pace with population growth, according to data from the trade group the Real Estate Board of New York.
The current dearth of projects, then, could spell an inventory crunch down the road.
Mott Haven, a former industrial district rezoned twice for housing, in 1997 and 2005, though it took years for full-scale redevelopment to take hold, has added thousands of apartments since 2020, StreetEasy said.
And many of those appear to be rent-regulated. In fact, since 2023, 897 units of affordable housing have begun welcoming tenants, according to city housing data. About a third of them appear clustered at one of the newest towers at Brookfield’s multisite riverfront development there, Bankside. Year-old Lincoln at Bankside, according to the data, offers 277 apartments set aside for those in certain income bands and distributed by way of a lottery.
Rents may be creeping up again. But a rise in inventory in some outer-borough neighborhoods could offer some relief soon, according to a new report.
Mott Haven, in the Bronx; Greenpoint, Brooklyn; and Astoria, Queens, all enjoyed modest bumps in supply in April versus April 2023, said real estate listings service StreetEasy.
Though some of the increases seem small in absolute terms—Mott Haven added 178 units to its rental stock, for a total of 387 that were available last month—the boosts could move the needle slightly on some blocks, according to the report.
Just across the Harlem River from Manhattan, the South Bronx neighborhood, which has been awash in high-rise construction, still saw prices climb in the past year. Its median asking rent reached $3,050 in April, a 6% increase in a year, according to the data, which analyzed both market-rate and income-restricted affordable units.
But prices could plateau if supply keeps nudging upward in the next few months, StreetEasy said.
Greenpoint, meanwhile, with a 47% rise in available apartments, for a total of 507, tied for second with Astoria, with 1,377, according to the data. Other areas with upticks in rental listings, whether from the opening of new projects or turnover of existing units, though the vacancy rate of 1.4% is historically tight, included Bushwick, Williamsburg and East Flatbush, in Brooklyn.
But four Manhattan neighborhoods also made the top-10 list, one of which was Midtown South, a swath that contains some blocks in Chelsea, Murray Hill and the Garment District. The neighborhood’s inventory rose 13% in a year, according to the data, and its median asking rent of $5,000 a month didn’t budge over that time frame.
Of course, if new apartments are coming online now, they were planned years ago, when developers appeared to be in a more pro-construction mood than they are today.
Indeed, builders filed permits for just 9,909 units across 285 projects in 2023, a haul that came in far below the 50,000 units a year Mayor Eric Adams has said are necessary to keep pace with population growth, according to data from the trade group the Real Estate Board of New York.
The current dearth of projects, then, could spell an inventory crunch down the road.
Mott Haven, a former industrial district rezoned twice for housing, in 1997 and 2005, though it took years for full-scale redevelopment to take hold, has added thousands of apartments since 2020, StreetEasy said.
And many of those appear to be rent-regulated. In fact, since 2023, 897 units of affordable housing have begun welcoming tenants, according to city housing data. About a third of them appear clustered at one of the newest towers at Brookfield’s multisite riverfront development there, Bankside. Year-old Lincoln at Bankside, according to the data, offers 277 apartments set aside for those in certain income bands and distributed by way of a lottery.