Lori Rafael, director of Real Estate for the Brooklyn Chamber of Commerce, Alison Novak and David Kramer of Hudson Companies, and Karen Auster, marketing consultant for the project and head of Auster Events.
David Kramer, of Hudson development, held an open house November 12 for members of the Brooklyn Chamber’s Real Estate Development Committee at the firm’s new green, luxury residential project in Brooklyn–third + bond.
Third + bond, which is expected to receive LEED-GOLD and Energy Star designations, will be completed in the Spring of 2010. Prices range from $311,500 for a studio to $1,381,000 for a three+ bedroom with three baths. The development is approved for FHA and SONYMA mortgages, and offers mortgages with as little as 3.5% down and interest rates as low as 4.75%. Corcoran is the exclusive sales and marketing agent. Continue reading
One day in the mid-1980s while I was walking down 42nd Street near 5th Avenue I saw that someone had painted “New York City is a Marxist, Leninist Hell” on a piece of plywood outside a construction site.
I laughed out loud. I had recently arrived here, one of the thousands of young professionals elbowing their way into New York City every year like waves of soldiers storming the Normandy beaches.
What I found in my adopted city was a healthy dose of free market love on the corporate level, but a peculiar bias against free markets among all social classes on the local level.
For example, a highly compensated executive I knew lived with his professional wife in a rent stabilized penthouse apartment on the Upper West Side around 72nd Street that featured two bedrooms, two baths, and a wraparound deck with breathtaking views of Manhattan; all for a whopping $800! With the money he saved on rent, he invested in a country house in Connecticut where he retreated on weekends and holidays.
After growing up in a state where land and private property are revered, and only people with low incomes qualify for subsidized housing, I found the City’s rent control laws mystifying and extremely unfair, particularly to newcomers and young people.
With a salary of less than $30,000, my housing options were limited so I headed to the outer boroughs. For around $850, which included rent and electric heat, I landed a tiny apartment in the attic of a brownstone in Park Slope, Brooklyn. Continue reading
With high unemployment pushing up vacancies, no credit capacity, and property values plummeting, commercial real estate markets remain extremely stressed with little prospect for significant near-term improvement, according to The Real Estate Roundtable’s latest quarterly survey of senior commercial real estate executives.
All three indices tracked by the “Sentiment Survey” have risen considerably since the near-collapse of financial markets last fall–a reflection of respondents’ collective sense of relief at having survived the worst of the turmoil, and the extreme uncertainty and paralysis of last year giving way to a greater sense of acceptance of market realities. However, the latest numbers–particularly the “Current Conditions” reading of 56–remain well below the ideal 100. An overall index of 100 means all survey respondents have answered that conditions today are “much better” than they were a year ago, and will be “much better” 12 months from now.
“The problems now are more clearly defined and there’s a grim sense of reality setting in, but that’s a long way from saying markets are stabilizing or that conditions are on the mend,” said Roundtable President and CEO Jeffrey DeBoer. “With job losses mounting, consumer confidence in the doldrums, and a relapse of the recession still possible, additional policy action is needed to restore credit availability–the lubricant of the economy and job creation–and to address the equity shortage resulting from falling commercial property values,” DeBoer continued.
An overwhelming majority of the 100+ respondents in the Q4 survey said property values are down today vs. a year ago, although the percentage declined to 77 percent from 93 percent in the previous quarter. But respondents were far from optimistic about future valuations, with 71 percent saying they expect values to remain “about the same” or to erode even further in the next 12 months.
“So-called “zombie buildings” and empty storefronts on Main Street will only mean bigger budget shortfalls for local governments, more layoffs for construction, hotel and retail workers, and further devaluation of investment portfolios held by individual and institutional investors,” DeBoer added. Continue reading
“I can’t believe I’m here being a little bit bullish,” said Barry M. Gosin, CEO of Newmark Knight and Frank at the November 3 Association of Real Estate Women luncheon.
Gosin said he is seeing positive absorption in the Midtown market and that his firm was having a good fourth quarter. He admitted, however, that the first quarter of 2009 set the bar so low that anything would look better.
“I was so bearish for so long, for probably four years, that everyone got tired of hearing me cry wolf,” Gosin said.
David R. Greenbaum, president of Vornado Office, said the market is extraordinarily healthy when you look back 12 months when the industry was facing disaster. No business wanted to make leasing decisions a year ago because they weren’t sure that they were going to survive.
Greenbaum said, “As tenant brokers, we’ve said to tenants, ‘if you’re confident that your business will survive, this is the time to look into a long-term lease.’”
Rents have dropped and velocity is down. For example, a building that rented office space at $90 a square foot at the height of the market, will rent that same space today at $65 a square foot.
With an office vacancy rate of about 14 percent, Gosin said tenants will move to financially stable buildings with good owners and managers and stay away from signing leases in “zombie buildings” that are financially troubled. Continue reading
Lenders are taking properties back from borrowers, but rather than selling buildings in this market, they’re managing the assets in house, according to Dave Karson, managing director of Cushman & Wakefield Sonnenblick Goldman.
“It will be a bleed out, not a tsunami,” Karson said of the commercial real estate market. “Lenders will hold onto the assets.”
Karson was one of the speakers on a recent National Realty Club panel, “Current Mortgage Financing and Joint Venture Opportunities” that was moderated by Allan Riley. Continue reading
Bloomberg News reported on Oct. 9 that the first new commercial mortgage backed security issued since June 2008 may be sold by Goldman Sachs Group Inc. The article said the underlying asset is a $400 million loan to Developers Diversified Realty Corp. that it is secured by 28 shopping centers. Goldman and Developers Diversified are seeking to include the loan in the Fed’s TALF program, the article said.
Average free market rents in Northern Manhattan declined approximately 15 percent in the first six months of 2009 compared to the same period last year, according to the Northern Manhattan Residential Rental Report produced by real estate broker Shimon Shkury and his team.
“According to our study, free market rents throughout Northern Manhattan averaged approximately $28 per square foot, which represents a 15 percent decline from last year’s average of $32 per square foot,” said Mr. Shkury, a partner at Massey Knakal Realty Services.
The report noted, however, that the majority of the units throughout Northern Manhattan continue to be rent regulated. Rent regulated units averaged about $18.28 per square foot during the first two quarters of this year, which presented a 55 percent potential increase, or upside, on the existing rents for those units. Continue reading