Apr 19, 2019
Welcome to the newest New York Real Estate Update from Brooklyn Made.
This month we’re taking a look at the latest developments, new technology that is scaring renters, what’s happening with the banks and lenders, tax issues, new design trends and celebrity property deals.
The market may have changed, but there’s no holding back New York as an innovative playground for real estate developers, architects, and creatives of all types.
Keep listening to get the scoop on all of this, the most notable news this month and what it means for landlords and investors.
In the commercial real estate headlines…
Brooklyn tenants don’t appear to be too happy about the latest real estate tech their landlords are trying out. The landlord of the Atlantic Plaza Towers is attempting to install biometric security systems to limit entry to those passing the facial recognition technology. Renters are pushing back, and are for obvious reasons concerned about their privacy.
Despite all the debates over budgets and the need for more taxes, NYC appears to be literally flush with cash. The average public bathroom built by the New York City Parks Department has been costing taxpayers $3.6M. That may soon seem like a bargain. The Bronx is getting a new $4.7M bathroom at Ferry Point West Park. Staten Island is getting a new $6M public bathroom.
Banks and lenders finally seem to be adjusting to the new trajectory of the real estate market. That’s even causing problems for $47B giant We Work. ING appears to be the latest to turn them down, with Softbank pulling back from a plan to invest $16B in the company.
The FHA has also announced it is tightening underwriting standards. It will flag more loan applications as high risk after years of allowing subprime level credit scores, down payments and debt to income ratios.
A court has ruled that a case against a major landlord for rent inflation can proceed. While we all want to preserve affordable housing, who’s stopping the tax inflation. It is great to keep rent increases gradual, but landlords face constantly rising costs for workers, maintenance, materials, insurance and taxes. Without being able to pass some of those costs on, which the public (including renters) have approved, then who will operate these buildings which have such low or negative yields?
This includes the recent property transfer tax which levies a Realtor level commission against those selling their homes. The two levels of taxes from the state and NYC can now reach over 3% of the sales price.
With more people leaving New York due to high taxes, Governor Cuomo says he is having a hard time keeping up with calculating a budget. With tens of thousands of people leaving and spending rising, those bills must be spread across fewer taxpayers.
If you’d like a place that is a little less crowded, with a few less neighbors in NYC, then some of the newer luxury buildings on the market might be for you. At 520 West 28th St., the Zaha Hadid designed building has only seen 16 of 39 apartments sold. The building has been opened for two years already. More concerning is the fact that the building carries a $162M mortgage, but has only sold $132M in units.
Queens is working on an idea to rival the Hudson Yards by building above its own Sunnyside Yards rail hub. Not everyone is onboard. Some would like to see more development in existing neighborhoods. The complex master planned project would cover 180 acres and likely feature housing, schools and parks.
Who says they aren’t making more land? In a move possibly mirroring developments in Dubai and Monaco, Mayor Bill de Blasio has unveiled a $10B plan to extend lower Manhattan, two blocks out into the river.
For Brooklyn Real Estate News
Brooklyn has a new hub on the web for listing and finding creative offices and art studios. Check it out at www.brooklyncreativelofts.com.
Bed Stuy’s Restoration Plaza is set for a new renovation with the help of British Starchitect David Adjaye. Also in Bed Stuy, a new 235 unit apartment complex has been approved. Features include 108 bike parking spaces, a grocery store, a farm and aquaponics learning center.
The first of the new She Built NYC series of statues is becoming close to a final design. The memorial for Brooklyn Born Shirley Chisholm will rest in Prospect Park.
In Williamsburg, the lottery has opened for Eliot Spitzer’s waterfront building and a shot at one of its 121 low income units. Despite the ‘affordable’ price ta, residents can still expect to spend over 30% of their monthly income, if they win a spot.
Equinox has gone from a luxury gym chain to opening its own hotels. It’s first opens at the Hudson Yards, with 212 rooms, a thermostats set to 66 degrees for better sleep, and an on-call nurse for IV drips for overcoming hangovers. Nightly rates will start over $700.
In other boroughs
The $25B Hudson Yards project is now open. The arts center The Shed kicked off with a five-night concert on April 5th.
A deal gone bad in the Bronx has opened up a legal dispute over the $1.2M down payment put up by Hello Living.
While New York may be battling some woes in some sections of its real estate market, BisNow proclaims that as the new top home for tech companies, NYC, and Brooklyn and Queens, in particular, is seeing a new rise in demand. Not only for housing units, but also for creative office spaces and amenities to serve tech workers.
Still, Manhattan hasn’t lost its appeal to everyone. The Walking Dead’s Negan actor has just added a $2.85M, 2 bedroom unit in downtown to their holdings. Though, it’s unlikely they’ll leave their upstate farm to live in the city full time.
However, Tommy Hilfiger is the latest major retailer to pull out of Manhattan. It is quitting its flagship store on Fifth Ave., as local restaurants have shed thousands of jobs and over 25% of retail space in Manhattan is now believed to be empty.
This month’s New York real estate news roundup is definitely positive. In spite of rising inventory levels in luxury condominiums and retail spaces, those who can afford it are still clearly in love with NYC property and are willing to pay a premium for it. The new tech scene is likely to further feed the market, especially in Brooklyn and Queens. Any temporary slowdowns certainly are not deterring world-class developers, architects, and innovators from unveiling progressive new buildings and communities. If you have the right product, in the right place, at the right price, and it is marketed well, investors can still expect great successes.
Well, that’s it for this month’s roundup. 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.