Mar 26, 2019
Welcome to the newest New York Real Estate Update from Brooklyn Made.
This is episode is brought to you by our sponsors The Ratner Team and Spartan Renovations. The Ratner Team are your local New York real estate experts for buying, selling, leasing and investing in property in the Big Apple.
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This month we’ve seen more positive signs of faith in the market. Even though at least one real estate brokerage is suffering with a big drop in profits due to slow sales. Amazon’s pull out of Long Island City is going to make a lot of people very unhappy, though plenty of other businesses are upping their stake in NYC.
We’re still seeing lot of big commercial real estate loans being made, and new permits being filed. Though new regulations see to be piling up just as fast.
Keep listening to get the scoop on all of this, the most notable deals of the month and what it means for landlords and investors.
In the commercial real estate headlines...
Despite all the great commercial leasing activity we reported last month, we also covered come of Extell’s pains and struggles. This month it is Douglas Elliman who is really feeling the pinch. The real estate brokerage’s profits are down 75% over the last year. Meaning in 2018 they only made a quarter of their profits of 2017. They say they are paring down, but won’t cut agent commissions.
While rebel startups Uber and Lyft are preparing for an IPO and are talking about handing out bonuses and stock to long term employees and top drivers, Airbnb continues to face plenty of legal challenges in NYC. The city sent 718 violations to 139 one and two family homes in the last year. Though that pales in comparison to the violations sent to apartments. Fines can easily reach into the thousands of dollars.
NYC’s mayor has now gone even further in issuing a subpoena to Airbnb demanding listing information to weed out illegal landlords who are breaking the law and operating with the same business licenses hotels require.
Zillow is also in hot water again. The company is being sued in federal court over incorrect data. Specifically by one spec builder whose home Zillow reported as sold for under the listing price. The property is still actively for sale. The seller is going after damages in the amount of $60M. Should the case win, who knows how hard Zillow could be hit. Countless individuals, real estate agents and investors have been hurt by the firm’s poor data and flawed home value tools over the years. It could certainly potentially become the largest class action suit in history when given the number of homes and individuals involved.
Say hello to universal rent control. Oregon just passed a measure that would cap virtually every property at rent increases of half the current pace. Brooklyn’s state senator has also moved in legislation aimed at doing the same. Only limiting local rent increases to 3.3% per year.
Of course, none of this is slowing down WeWork, who just leased over 200,000 square feet at 199 Water Street. It’s 7th location in the Financial District.
Coliving developers are also bullish. They say they are getting 44% more per square foot using their approach to shared housing. The question is, with rents running over $2,000 per person for shared digs, will it be sustainable?
Back to regulations, Cuomo wants to bar property owners from applying for property tax credits for six years if they are caught improperly applying for them. A rule he intends to work into other upcoming legislation.
New regulations could be coming to cap ceiling heights in new developments. Developers are accused of using abnormal ceiling heights and vast empty spaces to boost property height and charge buyers more for higher floor units. Regulations aim to discourage builders from any ceiling over 12 feet high.
Last month we covered the new record sale of a residential unit for $238M. The Manhattan penthouse that was purchased by hedge fund manager Ken Griffin. Ken’s property spree also includes a new decade record high $122M for a unit in London and a $58.5M unit in Chicago in November 2018. The penthouse at 220 Central Park South boasts an amazing 24,000 square feet. This unit was originally listed for $250M.
This month the hot news is the grumbling that his record breaking penthouse will only be taxed based on an assessment of $9M. A twentieth of the sales price.
For Brooklyn Real Estate News
In Brooklyn there is a push to speed up rezoning in Bushwick. A city council member is pushing to the move to be expedited
Over in Greenpoint a historic 1903 Bath Haus gets new look, as it is transformed into a residential building with studios, apartments, townhouses and a penthouse.
New architectural renderings have been revealed for an 11 story Park Slope building, and are definitely worth taking a look at. The progressive shape of 441 Fourth features lots of glass and brick, with staggered balconies.
960 Franklin Street is posed to be Crown Heights new megaproject. Close to the Brooklyn Botanical Garden it will feature two 39 story buildings and 180 parking spaces. Though will not be complete until 2024.
In other boroughs
Amazon’s pull out of the HQ2 deal in Long Island city is not the Valentine’s Day gift many were hoping for. There were a lot of expectations, and condo contracts in the area surge from November through February 13th. Now that Amazon is out, there’s a good chance those other buyers and developers will be looking for ways out of their contracts too.
Lyft isn’t being so shy. The ridesharing startup has just inked a lease for over 100,000 square feet alongside cardio startup Peloton, at Hudson Commons.
Among the big deals of the last month is the $200M sale of 250 Church Street to Normandy and Columbia.
The former Trump Soho hotel appears to be up for sale too, and doing much better since its name change.
Still, Kushner Co.s is on the move with a massive $1.2B purchase of apartments. A deal which some news sites have reported could involve a record sized loan from Fannie Mae.
This month’s New York real estate news roundup is definitely more positive. Despite the losses for Elliman, there is plenty going on. It’s just going to pay to watch new regulations, and get involved to protect your interests and those of the community where necessary.
Well, that’s it for this month’s round up. Look out for our other upcoming reports, and check out the latest data on the Manhattan and Brooklyn residential and multi-family market, and which features and neighborhoods are yielding the best rents at NewYorkMarketReports.com.
Make sure you like and share this report, and leave your comments on this news, or any trends you think we overlooked or you want to hear more about in the comments section.