Housing Starts: Investors Shift to Suburbs | Developers Fight for 421a | Multifamily in Manhattan

March 17th 2015

New developments across New York City (Photo credit: Curbed NY)

  1. Buyers are Finding There’s Wiggle Room at the Top of the Luxury Real Estate Market Sellers of some of the city’s most expensive properties are dramatically slashing prices, even as developers keep trying to push the boundaries of the luxury market with pie-in-the-sky price tags of up to $175 million. “Million Dollar Listing New York” star Fredrik Eklund and business partner John Gomes of Douglas Elliman are cutting the price on their ritziest listing — the stunning 7,061-square-foot penthouse at 11 N. Moore St. in Tribeca — by more than 25%. Initially, they were seeking $40 million. Now it can be yours for $29.95 million. [New York Daily News – 03/12/15]
  2. Apartment Investors Shift to U.S. Suburbs After Crowding Cities After years of clamoring to buy the most centrally located rental buildings in major urban centers, U.S. apartment investors are rediscovering the suburbs. Transactions for multifamily properties outside cities—often sprawling, garden-style complexes appealing more to families than urban- dwelling 20-somethings—are on the rise as an increase in construction slows rent gains in more central areas. “The urban supply was just continuing to ramp up pretty quickly,” said Sean Breslin, chief operating officer of Arlington, Virginia-based AvalonBay Communities, the second-largest publicly traded landlord in the U.S. “On a risk- adjusted basis, the suburban markets look more attractive.” [Chicago Tribune – 03/14/15]
  3. Developers Fire Back Against Calls to Kill Tax Break Nearly 5,500 affordable apartments in just nine projects would never have been planned if not for a four-decade-old tax break due to end in three months, according to a report by the Real Estate Board of New York. The 421a abatement, which lowers property taxes on new apartments for up to 25 years, expires June 15. The REBNY report is intended to counter critics who say 421a mainly subsidizes luxury apartments and should be left to die. Developers are rushing to lay foundations for projects across the city before they lose the benefit, which is already going to 71,950 dwellings. [Crain’s New York Business – 03/16/15]
  4. NYCHA Second in Command Cecil House to Step Down General Manager Cecil House, the second in command at the city agency, submitted his resignation this week and NYCHA Chairwoman Shola Olatoye accepted it, officials said Thursday. The former utilities exec was hired in September 2012 by former NYCHA Chairman John Rhea to address mismanagement exposed by the Daily News. For years, the GM position had been vacant. [New York Daily News – 03/12/15]
  5. King of the North: Multifamily Trades Surge in Upper Part of Manhattan Multifamily trades in the upper portion of Manhattan jumped 92 percent year-over-year in January, according to a new report from Ariel Property Advisors. The area saw 13 deals in January worth $115 million, compared to eight deals worth $59 million during the same period last year. RCR Management, for example, bought a six-story rental building at 225 Central Park North for $33 million. Overall, the size and quantity of New York City multifamily deals grew in January. [The Real Deal – 03/13/15]
  6. De Blasio Names 3 to Rent Board as Annual Fight on Increases Nears Mayor Bill de Blasio has appointed three new members of the board that sets rents for about one million rent-stabilized apartments in the city, completing the process of filling all nine seats with his selections just in time for the annual fight over rent increases. This year the decisions of the Rent Guidelines Board will also play out against the backdrop of an even bigger fight in Albany over the renewal of state rent laws. Mr. de Blasio, who is focused on increasing and retaining affordable housing, is lobbying the State Legislature to strengthen rental protections to curb the number of stabilized units taken out of regulation each year. [New York Times – 03/12/15]
  7. Committee Calls for All Affordable Housing at 39th Street Site Community Board 4’s Land Use Committee will soon issue a Request for Proposals (RFP) for a 25,000-square-foot site at 493 Eleventh Avenue, a city-owned parking lot currently used by the NYPD (and formerly the site of a slaughterhouse). At a hearing yesterday evening, the Land Use Committee drew up a list of wants for the site, and made clear that it thinks that whatever is built there should be 100 percent permanent affordable housing. The New York City Economic Development Corporation (NYCEDC) and Housing Preservation and Development (HPD), however, have indicated that the development will beonly 50 percent affordable. [Curbed NY – 03/12/15]
  8. The 41 New Developments Hitting The Market This Spring New York City real estate is booming. Beyond charts and graphs and stats, another way to gauge the strength of the market is by the sheer number of new developments launching sales or leasing in a given season. Spring 2014 was action-packed, as was the fall of 2014. And the spring of 2015 looks to be no different, with at least 40 different projects hitting the market in the coming months. [Curbed NY – 03/13/15]
  9. What Do Americans Prioritize When Picking a Place to Live? Though choosing a place to settle down includes many individual considerations, the most recent Allstate/National Journal Heartland Monitor poll suggests that there are a few things Americans agree on when it comes to picking a place to build a life. More than 90 percent of respondents said that providing equal chances for all people to get ahead, through educational and economic opportunities, was one of the most-important attributes that any community can have. And more than three-fourths of respondents thought that locations that included ethnic and racial diversity were a key factor for good communities. [Atlantic CityLab – 03/12/15]
  10. Home Builder Sentiment Dips in March - NAHB U.S. home builder sentiment declined for a third straight month in March but still showed more builders view market conditions as favorable, the National Association of Home Builders said on Monday. The NAHB/Wells Fargo Housing Market index fell to 53 from 55 the month before, the group said in a statement. Economists polled by Reuters had predicted the index would edge up to 56. Readings above 50 mean more builders view market conditions as favorable than poor. The index has not been below 50 since June 2014. [Reuters – 03/16/15]
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