Jun 14, 2017
One of the top stories of the past week is City Planning officials approved a plan to rezone a slice of Midtown East to allow for taller buildings. The City Planning Commission voted unanimously last week to approve the Midtown East Rezoning Plan, which will permit developers to build higher as long as they make required contributions to the public — like money for transit improvements, buying development rights from adjacent landmarks and creating public plazas on their properties. The rezoning will affect 78 blocks: from 57th Street to the north, 39th Street to the south, Third Avenue to the east, and Madison Avenue to the west, the plans show. According to DNA Info.
In transportation news, there has been increasing commuter frustration with the NYC transportation system in 2017. Subway delays and cancellation have been high recently, and these issues can directly impact the real estate market. Slashing service — like with the impending L train shutdown or this summer’s Penn Station track closures —can have negative ripple effects on the market, just as expanding service has positive ripple effects, as in the case of the new Second Avenue subway line, ferry service, and the No. 7 train extension.
“The infrastructure hasn’t kept up with the population growth, and it’s going to take an enormous commitment and be significant investment,” one expert said.
Upper East Side apartments along the Q line saw 12 percent growth rate over the past five months, this according to DNA Info. The city's new ferry service is also having a positive impact on real estate. Apartment units near the ferry route have undergone an average of a $500 per month rental premium compared to those 1 kilometer away, according to an analysis from Nestio of available rental inventory along the DUMBO, North and South Williamsburg ferry stops. But shutdowns and delays in areas like Williamsburg and Bushwick, have investors concerned about it’s unpredictable impact on the market.
Staying with transportation news, The first section of the new Goethals Bridge will open to drivers over the weekend, with the original 89-year-old bridge closing for good this past weekend.
For the Goethals Bridge, the transportation agency decided to completely replace the existing one for a new one with wider roadways, a walkway for pedestrians and bicycles and a design that allows for mass transit options in the future. The new bridge will have six, 12-foot-wide lanes split into two spans, compared to the four 10-foot-wide ones on the old bridge. A multiple step phase in process will unfold over the next few years. According to DNA Info.
In tech news, The first three buildings at Cornell Tech’s Roosevelt Island campus are nearing completion, just in time for their official opening in September. The Cornell Tech campus on Roosevelt Island Campus is a 2 billion dollar project that is looking to develop an east coast hub for tech that could potentially rival silicon valley in the years to come.
In brokerage news, the British auction house Christie’s is raising its bid on luxury real estate in New York City. The firm abruptly ended its 20-year affiliation with residential brokerage Brown Harris Stevens on Friday and announced plans to open its own real estate office later this year. The new brokerage will operate out of Christie’s flagship at 20 Rockefeller Plaza, according to the Real Deal. In commercial real estate news, Nearly a year after Westfield Corp. unveiled the first phase of its $1.5 billion shopping complex in downtown Manhattan, the World Trade Center mall remains littered with vacant storefronts.
While Westfield announced that the entire 290,000 square feet of Phase 1 had been leased when the mall opened in August, roughly 20 percent of the space remains empty and unopened, according to calculations by The Real Deal. Many storefronts are covered over with wrappers directing shoppers out of the underground portion of the mall and up to the Eataly market on the third floor.
Staying with Commercial Real Estate, JPMorgan Chase signed a 305K SF expansion deal at Five Manhattan West in the Hudson Yards district. The country’s largest bank now has a footprint of 428K SF in the building, which recently signed Whole Foods as a retail anchor. This according to Bisnow.
Thanks to the recent condo boom that’s turned scores of investors into landlords, there’s an abundance of ultrahigh-end units on the rental market. And just like the rest of the rental market — where landlords have been throwing out concessions for the better part of a year — tenants in the uberluxury market are scoring big discounts.
Some agents are telling their clients that overpricing is a waste of time and that If [renters] see the apartment sitting on the market, they know they’re in a strong negotiating position.
Some experts say that the market will remain soft until the current inventory is absorbed.
Savvy renters, meanwhile, are jumping on the opportunity and some renters are getting up to 20% discounts from some of the high end apartments, this according to the Real Deal.
Though high end rentals make up a small fraction of the overall rental market, it is representative of a supply glut that is market wide, where supply continues to far outweigh demand, putting pressure on landlords to attract tenants in a highly competitive market. According to the Real Deal.
WeWork has acquired a construction tech company to help build out office space for its tenants.
The coworking company acquired FieldLens, a software application that helps various parties involved in a project — the developer, architect, construction manager, etc. — communicate in real time. In a blog post, WeWork’s chief product officer David Fano noted that FieldLens will help the company manage millions of square feet of construction in the coming year.
“Today, there is information loss at every stage of the building process as real estate, design, construction, and operations are provided by a large number of disparate providers,” Fano wrote. “This results in needless waste of materials, time, and capital at the end user’s expense.”
Earlier this month, the company launched a new business line — WeWork Wellness — that offers fitness classes and manages a gym. WeWork has 140 locations in 44 cities.
Two Brooklyn legislators have proposed a “flip tax” that would increase transfer taxes on certain residential properties that are resold within two years of being purchased. Assemblymembers have introduced bills touting the tax as a measure that would discourage the type of flipping they say reduces affordability in the housing stock.
The bill would make flipping less profitable by increasing the city transfer taxes by 15 percent for one-to-five-family properties resold within a year of being purchased, and 10 percent if sold within two years. It would exclude some transactions, like properties sold to a family member or homeowners with financial hardship, in order to target professional flippers.
The proposal was first floated by housing advocates during the East New York rezoning process, one of the areas that saw the largest increase in flipping activity in 2015, according to a report by the Center for NYC Neighborhoods, which looked at single-to-four-family homes. Critics say there are multiple ways around the tax so its impact could be marginal.
In Brooklyn News, the talk around 9 Dekalb Avenue has resumed. There hasn’t been much news from 9 Dekalb since a deal was finalized in April 2016 to bring the first building over 1,000 feet to BK. But it looks like there’s some movement on site. JDS Development Group posted a new video to its Instagram account showing that caisson installation is now underway, one of the first steps necessary when building a high rise.JDS has said that construction is underway with completion slated for 2020, when the building will stand at 1,066 feet tall. For 9 Dekalb JDS Development Group is teaming up SHoP Architects. The pair are also working on the American Copper Buildings, the uniquely shaped buildings on 1st avenue and 35th st, and 111 West 57th Street, the supertall Steinway Tower, which is expected to be complete in 2018.
In development news, The Rabsky Group has scooped up the large Williamsburg waterfront site that Consolidated Edison put on the market last fall, according to The Real Deal. The city had warned prospective buyers that it would refuse to rezone the land to allow for a residential project, so Rabsky has decided to build a commercial project at 500 Kent Avenue instead.
Right next to this project is the Domino Sugar Refinery site, which is being transformed into a megaproject of rental units and affordable housing. The initial phases of construction of the megaproject are underway, and will eventually include more than 6,000 apartments and a waterfront park with full city views. Two Trees announced today that leasing has begun at old DOmino refinery site at 325 Kent Avenue. Market-rate studios to 2 bedroom apartments in the building will range from $2,495 to $5,195. Its affordable apartments hit the city’s housing lottery last fall, with 87,000 (!) people applying for 104 apartment. According to Ny Curbed.
Increasingly, if you ask a New Yorker where to find the most authentic food in Chinatown, they might reroute you to Brooklyn. Devotees of hot pot, a fondue-esque specialty from China's Fujian Province, are lining up at eateries in Sunset Park, Brooklyn's first Chinatown, according to CNBC. Bensonhurst, the middle-class neighborhood in south brooklyn, now claims the highest concentration of Chinese immigrants in the borough. Chinese residents comprise the largest immigrant group in Brooklyn and the Chinese population in New York City is the largest outside of any Asian city.
Many foreign buyers, including extended members of Chinese families, view Brooklyn real estate as a secure, high-return investment.
Dr. Peter Kwong, a professor of Urban Affairs and Planning at Hunter College who is a leading scholar on immigration, said for many middle-class Chinese, Brooklyn real estate represents far more than a long-term investment plan. It functions as a catalyst from which a pathway to citizenship, or at least the legal right to live, study and work in the United States, can be forged. That's in large part thanks to the EB-5 federal visa program, which stated that Foreign investors who sink $500,000 or more into American residential or commercial projects that create at least 10 jobs become eligible for green cards for themselves, their spouse and their unmarried children. American companies are advertising all over China, with billboards that say green cards are being exchanged for US investment, under the ED-5 visa program.
Despite tightening restrictions and increased scrutiny on foreign investments, Dr. Kwong said many Chinese remain "desperate to get their money out," and he thinks they will find ways to get around the new CHinese rules. Kwong said Chinese communities will continue to grow along subway routes in Brooklyn, including the N Train route that terminates in Brooklyn's Coney Island. According to a recent search on Yelp, there are nine Chinese restaurants in the area and counting.
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