It appears that both luxury buyers and institutional-sized investors may soon be choosing NYC as an alternative to London.
By LISA PREVOST
New federal regulations require mortgage lenders to do what should go without saying: verify that prospective borrowers can pay.
Yet during the housing bubble, many lenders all but abandoned traditional underwriting standards, and the resulting wave of foreclosures has taken years to recede. An “ability-to-repay” rule, adopted last month by the Consumer Financial Protection Bureau and effective January 2014, is intended to protect borrowers from again falling victim to risky lending.
“The rule sets standards for what’s a safe loan and what isn’t,” said Kathleen Day, a spokeswoman for the Center for Responsible Lending, “and it takes away a lot of the tricks and traps that lenders were using to talk people into refinancing.”
Required under the Dodd-Frank Act, the rule prohibits the “no-doc” loans common during the bubble. Before making a loan, lenders must document the borrower’s job status, income and assets, debt, and credit history. Lenders must also calculate a borrower’s ability to pay the principal and interest over the length of the loan. They may not base their calculation solely on the payment due when an introductory “teaser rate” is in effect.
Via The NY Times
Rent Guidelines Board Chairman Jonathan Kimmel (credit: DNAinfo)
The Rent Guidelines Board voted last night on the lowest rent increases for the city’s 1 million-plus stabilized rent units since 2002, the New York Daily News reported, and no one’s happy. Landlords claimed the increase, totaling 2 percent for one-year leases and 4 percent for two-year leases, wouldn’t cover rising costs and property taxes. But tenants advocates argued that any increase was unaffordable considering the current economic climate.
Landlord representatives wanted 5 percent and 9 percent increases as property taxes rose 7.5 percent in the last year. Joe Strasburg, president of the landlord’s Rent Stabilization Association group, said the inadequate increases would hurt small property owners, in particular, as many of those buildings are exclusively rented to stabilized renters that already pay well below market rate.
Tax Revolt 2012: By Frank Lovece
“It’s counterintuitive that a condo unit you bought for 10 percent more than you could sell it for today has gone up in value,” admits Dept. of Finance spokesman Owen Stone. “But if the rental market is moving up, you’re still going see an increase in the value of your home.”
When a Home Is Not a Home
By “home” he means “co-op or condo,” not single- and two-family homes and townhouses. That’s because under New York State’s Real Property Tax Law Section 581, co-ops and condos are assessed as if they were “comparable” income-producing commercial properties — i.e., rental buildings. And rents generally tend to go up, regardless of what the sales market does.
By Robert Frank
- Associated Press Monaco
If you think real-estate in Manhattan or San Francisco is expensive, consider Monaco.
The price of real-estate in Monaco — the world’s most expensive locale — is now an average of $5,408 a square foot, according to a report from Citi Private Bank and Knight Frank, the London real-estate firm. Spending $1 million will get you a 200 square-foot closet – presumably without a water view.
The second most expensive locale is Cap Ferrat in the south of France, at more than $4,800 a square foot. That’s followed by London, at $4,534 a square foot, and then by Hong Kong, at $4,406 a square foot.
New York is a relative bargain, coming in at number 17, at more than $2,161 a square foot (this seems to be a little high, even for Manhattan). The only other U.S. locations on the top 50 are Aspen, at number 39, with $974 a square foot, followed by Telluride ($760 a square foot) and Miami, at about $580 a square foot.
Here is the list of the Top 10
LOCATION AVG PRICE PSF
Monaco – $5,408
Cap Ferrat — $4,800
London — $4,534
Hong Kong (houses) — $4,406
Courcheval 1850 — $4,081
St. Moritz — $3,951
Gstaad — $3,701
St. Tropez — $3,600
Geneva – $2,959
Hong Kong (apartments) — $2,625
March 29, 2012 06:30PM
Charles Garner, principal at CIM, and the proposed tower at 440 Park Avenue (center)
CIM Group and New York developer Harry Macklowe are making strides toward building the tallest residential building in New York City at the Drake Hotel site at 440 Park Avenue. They filed a plan examination request for the building, one of the first steps towards getting a development off the ground, with the Department of Buildings, according to a DOB filing dated March 26.
The California-based real estate investment trust filed its plans for an 82-story condominium tower for review to DOB, which will check if its plans are in compliance with building code, a DOB spokesperson confirmed, saying an examiner had not yet reviewed the filing. The filing cites the height of the building as 1,397 feet in total, which would make it the tallest residential building in the city; for comparison’s sake, One57, Extell Development’s planned condo tower on 57th Street will be 1,004 feet tall upon completion in 2013 and the Empire State Building, the tallest structure in the city, is 1,453 feet in height.
As previously reported, CIM, (which acquired the site for $305 million last year), and Macklowe plan to erect a slim condo and retail complex designed by Uruguayan-born architect Rafael Vinoly at the site. It is slated to have 128 units and 12-foot high ceilings. The $1 billion project will include a 5,000-square-foot driveway, golf training facilities and private dining and screening rooms, according to previous reports.
Neither CIM nor Macklowe immediately responded to requests for comment.
— Katherine Clarke
BATTERY PARK CITY — The cost of the massive redevelopment of Pier A has ballooned and the project is slated to run behind schedule, as officials have discovered that the rotting landmark is in worse shape than initially believed, they revealed this week.
The overhaul of the 126-year-old landmarked building will now cost taxpayers $36 million, up from $30 million, and the pier will not reopen to the public until at least the middle of 2013, Battery Park City Authority officials said.
“There was a great deal more rot … than we had anticipated when the project started,” said Gwen Dawson, senior vice president of asset management for the authority, at a Community Board 1 meeting Tuesday night.
“There was a significant amount of water damage, rot and structural deterioration,” she said.
Crews working on Pier A are still continuing to find rot, Dawson said, which means that the work could be delayed even further.
Full Article Here: Via DNAinfo
BUYERS in New Jersey have the highest down-payment rate in the country, putting down an average 13.71 percent of the purchase price, according to a new report from LendingTree. That surpasses percentages in cities like Washington, and states like New York, Hawaii and California, though only by tenths of a point. In New York, the average down payment works out to 13.47 percent. The national average is 12.24 percent, for the year ending in November.
Of course, very few borrowers pay the average percentage, which is computed by figuring out the average down payment on conventional loans made by banks and government-insured Federal Housing Administration or Department of Veterans Affairs loans, which have down payment minimums of 3.5 percent.
Countrywide, about a quarter of all mortgage loans are government-backed, according to lending specialists.
April 12, 2011 12:30PM By Adam Pincus
The first quarter of 2011 saw a steep decline in investment sales in New York City compared to the last three months of 2010, but the dollar volume for the whole year is expected to surge over last year, Robert Knakal, chairman of commercial brokerage Massey Knakal Realty Service, said.
He predicted the total volume of investment sales would jump to as much as $22 billion this year from $14.5 billion in 2010.
“We believe the dollar volume will increase by 40 to 50 percent over 2010 levels,” Knakal said at the firm’s quarterly press briefing at its Midtown headquarters this morning. “We are expecting that the total dollar volume is going to be in the $20 [billion] to $22 billion range.”
But that would remain far below the record $62 billion sold in 2007, he said.
In the first quarter of 2010, there were $3.9 billion in sales citywide, down 30 percent from the $5.6 billion sold in the fourth quarter last year.
Knakal blamed some of the decline this year to a surge in sales in the prior quarter by sellers fearing a change in taxes. But even as the first quarter lagged the previous three months, it was far more than the first quarter one year ago, when just $2.03 billion in properties traded hands.
The increase in property sales was led by office buildings purchases, such as William Macklowe Company and ING Clarion Partners together buying 636 Sixth Avenue for $45.23 million.
The development market picked up as well in terms of volume of deals, but fell in the average price per square foot.
The State Assembly passed a bill on Monday that would strengthen rent regulation, while setting up a possible showdown with the Senate and the real estate industry.
State laws that limit the rent that landlords can charge on more than one million apartments in New York City and the suburbs are set to expire on June 15. Democratic legislators from the city and Gov. Andrew M. Cuomo had sought to extend and expand the laws during budget negotiations last month, until the Senate Republican leader, Dean G. Skelos, rejected the idea, threatening to delay the budget.
The bill in the Democratic-controlled Assembly would extend rent regulations until 2016. It would do away with vacancy decontrol, which lets landlords deregulate apartments when they become vacant and their rent exceeds $2,000. It would alter luxury decontrol, which lets owners deregulate apartments when the tenants’ income exceeds $175,000 and the rent is at least $2,000. Those limits would rise to $300,000 and $3,000. The bill would also limit rent increases for new tenants to 10 percent, down from 20 percent.
“Every year more than 10,000 rent-regulated apartments are lost because of loopholes in the rent laws,” the Assembly speaker, Sheldon Silver, said in a statement.
LOWER MANHATTAN — Six months from today, the long-awaited 9/11 memorial is scheduled to open for the first time.
Enormous waterfalls will flow into pools in the Twin Towers footprints. Nearly 300 trees will shade the cobblestone-paved memorial plaza. And the names of the nearly 3,000 attack victims will be inscribed on bronze parapets, memorialized for the first time at the site of the attacks.
But about 180 days before 9/11/11, the 8-acre memorial is still very much a construction site.
On a recent afternoon, workers laid stone tiles along the plaza, covering the complex infrastructure below. They also cleared sites for new trees, which are expected to arrive this spring. So far, more than 120 swamp white oak trees have been planted at the memorial, a number that is expected to more than double by September.
At the North Tower pool, bronze panels bearing the victims’ names already stretch halfway around the perimeter. The names are large and deeply grooved, and the smooth bronze glows when it catches sunlight.
The Port Authority tested the waterfall in the North Tower footprint last fall and expects to do a similar test in the South Tower pool in April, a spokesman said.
After the 10th anniversary ceremonies, the memorial will be open to the public seven days a week through a timed ticketing system. Construction will still continue all around the memorial on the other projects, including One World Trade Center, which recently reached the 58th floor. By September, the skyscraper will be about 80 stories tall.
“Signs of progress are everywhere,” Port Authority Executive Director Chris Ward said in a statement. “But there is much left to do and challenges ahead so we can’t let up. We must continue to keep our heads down and zeroed in on delivering on the commitment we made to open the 9/11 memorial on the 10-year anniversary.”
By Kenneth R. Harney
With hundreds of thousands of homeowners having negotiated loan modifications or short sales or been foreclosed upon during the past year, the Internal Revenue Service has issued fresh guidance on how to handle canceled mortgage debt in the upcoming tax season. It’s a huge issue, widely misunderstood by consumers, and involves potentially billions of dollars of tax liability.
When most debts are canceled by a creditor, such as unpaid balances on student loans or credit cards, the forgiven amounts are treated as ordinary, taxable income by the Internal Revenue Code. But under a special exemption adopted by Congress covering distressed home mortgages, many owners can escape the ultimate double-whammy: Getting kicked while you’re down, hit with extra taxes because your mortgage went seriously delinquent or you lost your house.
In its latest guidance, the IRS focuses on several key points that owners — and former owners — need to know. Tops on the list: Just because a lender wrote off a portion of your mortgage debt, this doesn’t mean you automatically qualify for special tax treatment. To the contrary, there are essential tests you need to pass to qualify: The debt your lender canceled must have been used by you “to buy, build or substantially improve your principal residence.”
(source: Eastern Consolidated)
New York City lost fewer jobs than previously estimated as it emerged from the recession, shedding 141,300 jobs between April 2008 and September 2009, instead of the 179,000 previously reported, according to the January 2011 employment report from Eastern Consolidated. Since that September 2009 low, the city has experienced a net gain of 50,700 jobs — 18,000 of which were added in January 2011 — putting city employment levels at 2.4 percent below the April 2008 peak. The city’s real estate industry gained 600 jobs in January, putting employment in the sector at 5.4 percent, or 6,600 jobs, below peak levels from April 2008. Nationwide, employment across all industry is also 5.4 percent below its January 2008 peak, having shed 7.48 million jobs since then.
By CARA BUCKLEY
After sitting fallow for 43 years as the Lower East Side’s popularity soared, a desolate stretch of parking lots along Delancey Street is closer than ever to being transformed into housing and shops, marking the end of a long and bitter stalemate over the future of the sites.
Under the guidelines, the properties would become the site of about 1,000 housing units — roughly half of which would be allocated to middle- and low-income earners — along with retail shops, green space and, potentially, a school.
On Monday, after a subcommittee approved the guidelines, the State Assembly speaker, Sheldon Silver, whose district includes the land, gave the plan crucial support. “The final guidelines that were approved by the committee tonight strike an appropriate balance between the needs and concerns of all stakeholders,” Mr. Silver said in a statement, “and will result in a development that will ensure our neighborhood continues to thrive.”
Sheldon Silver, the assembly speaker, in the chamber in Albany last week.
ALBANY — Democratic leaders in the State Assembly are signaling that they are ready to embrace a cap on local property taxes, which could clear the way for its passage this year.
The cap, popular with voters in New York’s suburbs, who pay some of the highest property taxes in the nation, is one of Gov. Andrew M. Cuomo’s top priorities and already has support from the Republican-led State Senate.
But in what will very likely be one of the defining legislative battles of the year, Assembly leaders are indicating they want something else for their mostly urban constituents: stricter rent regulations for New York City, a measure strongly opposed by Republicans and the real estate interests that helped Mr. Cuomo capture the governor’s office in November.
“In a day and age when we’re talking about giving people the ability to live in their homes and not be priced out of their homes, we should not forget people who have rent protections,” the Assembly speaker, Sheldon Silver, said, adding, “I just think the philosophy behind the tax cap is the same as the philosophy behind rent regulation.”
By Amanda Fung
Hudson Square in lower Manhattan has come a long way in recent years, as ad agencies, media firms and others have replaced the printers that once dominated the area.
But it wasn’t until last year, when local businesses banded together to form a business improvement district, that Hudson Square finally got noticed. The BID adorned the area with promotional banners and planted trees along its corridors.
“We helped put Hudson Square on the map,” says Ellen Baer, president of the Hudson Square Connection BID, which just last week tapped a team of seven leading urban designers to give area streets and squares a pedestrian-friendly makeover.
Today, business owners in two nearby neighborhoods, SoHo and Chinatown, are hoping to follow in Hudson Square’s footsteps by forming their own BIDs, as is another group along Atlantic Avenue in Brooklyn. In addition to those three, four existing BIDs—NoHo and the Lower East Side in Manhattan, and two in Brooklyn—are hoping to expand. Others, like Myrtle Avenue in Queens, are just in the “thinking about it” stage.
The first steel girders of the Barclays Center rose above the corner of Flatbush and Atlantic avenues on Tuesday, a tangible sign that the future home of the Brooklyn Nets is moving forward.
“The installation of steel is always a major milestone for a construction project,” said Atlantic Yards developer Bruce Ratner. “With the foundation work largely done, we are now poised to go vertical.”
One hundred tons of steel arrived at the site last week, a small portion of the 10,500 tons of the stuff that will be used in the arena.
November 24, 2010 08:30AM
Mortgage applications for purchases spiked 14 percent during the week that ended Nov. 19, to their highest level since May, according to the latest weekly survey from the Mortgage Bankers Association. According to Michael Fratantoni, vice president of research and economics for the MBA, “the increase in purchase applications last week aligns with other incoming data suggesting that consumers are feeling somewhat more confident with their financial situation.” Meanwhile, refinancing applications fell 1 percent week-over-week, to their lowest level since June, as the interest rate for the 30-year fixed-rate mortgage rose to 4.5 percent — its highest since September. The average contract interest rate for the 15-year fixed-rate mortgage declined to 3.83 percent from 3.87 percent one week ago.
Via: The Real Deal
By ELIOT BROWN
A task force commissioned by City Comptroller John Liu is poised to call for a major change in the way that the city determines what amenities—such as affordable housing and parks—to extract from real-estate developers in exchange for approving their plans.
Those decisions are among the most controversial parts of the city’s rough-and-tumble land-use approval process and are often criticized for the inconsistent way in which they are made. A draft report by the task force, reviewed by The Wall Street Journal, recommends that new groups made up of community representatives—and monitored by the comptroller—negotiate benefit deals with developers involving major rezoning decisions.
Currently there’s no formalized way in which these deals are made. Rather a collection of interest groups typically participate, including elected officials, community organizations and others, with the ultimate decision on the zoning being made by the City Council.
September 17, 2010 09:00AM
The city’s construction industry added 1,700 jobs last month, making it one of the best-performing employment sectors for August, second only to retail, according to a new report from Eastern Consolidated. Year-to-date, 3,000 New York City construction jobs have been created, representing 2.6 percent of the industry, but construction employment is still 11.8 percent off its August 2008 peak. Meanwhile, 400 jobs were added in real estate, bringing the total for 2010 thus far to 4,100 new employees in the city’s industry, or 3.5 percent of the workforce. New York City real estate, which Eastern Consolidated considers to include brokerage firms, leasing agencies and management companies, has now all but entirely recovered the job losses incurred during the recession, with employment down just 0.3 percent off its peak. Architecture, meanwhile, continues to suffer, losing another 200 jobs last month, which brings the yearly total for the industry in New York City to 1,200. New York’s architecture industry has lost 4.8 percent of its workforce this year and 22.8 percent of its workforce since August 2008, Eastern Consolidated data shows. via TRD
By ELIZABETH A. HARRIS
Ezra Shaw/Getty Images
DEREK JETER has spent his entire Major League Baseball career as a New York Yankee. But with his contract up at the end of this season, his life might be in for some adjustments. For now he is making at least one big change, selling his New York apartment.
Mr. Jeter has listed his 5,425-square-foot condominium at Trump World Tower, near the United Nations, for $20 million.
The listing broker, Debra Stotts, who is the sales and leasing director for the building, did not respond to a request seeking comment, but the listing provides some details. It describes a south-facing four-bedroom apartment with five and a half bathrooms. And through the 16-foot floor-to-ceiling windows, it says, one can see the Empire State Building, the Chrysler Building, Central Park, and all the way out to the Atlantic Ocean.
The city’s Industrial Development Agency voted today to approve Thomson Reuters’ application to shift up to $20.8 million in unused city and state sales tax subsidies from the construction of 3 Times Square to seven other Manhattan properties, Crain’s reported. The approval was a blow to the Newspaper Guild of New York, which is in a contract dispute with Thomson Reuters and had mobilized elected officials to pressure the Bloomberg administration to table the application.
A 2006 rendering of the Freedom Tower. It is now known as 1 World Trade Center.
Fourteen years later, the Port Authority of New York and New Jersey is hoping that Condé Nast can work that kind of magic downtown. On Tuesday, the authority signed a tentative deal to move the Condé Nast headquarters to 1 World Trade Center, the 1,776-foot skyscraper now under construction at ground zero. That would make it the building’s largest private tenant so far and one with trend-setting cachet to boot.
July 21, 2010 01:30PM By Candace Taylor
Bob Scaglion of Rose Associates (left), NY Living Solutions’ Gannon Forrester and the Aire at 200 West 67th Street
Aiming to gain an edge on the other new luxury rentals just hitting the market, Upper West Side tower the Aire held a contest last month, offering bonuses to the brokerage that completed the most transactions in the building.
The 80-agent sales and rental firm New York Living Solutions won the contest, helping to bring the building to roughly 25 percent leased, according to Rose Associates, the on-site leasing agent for the building.
The contest, which ran from June 1 to July 4, offered bonuses to the firm which completed the most transactions in the 43-story building, located at 200 West 67th Street, during that time period. The prize was $1,000 for each agent who completed a transaction in the building, plus $5,000 for the firm. (The developer, Kalimian Properties, is also paying a one-month broker’s fee.)
New York Living Solutions management is using its prize money to host a celebratory cruise around Manhattan for all its agents, said Gannon Forrester, a managing director at the firm. Agents will receive their $1,000 bonuses then, he said.
The company is focusing special attention on lease-ups of new rental buildings, he said, so the contest fit with that goal. “We made sure all the agents knew about it,” Forrester said.
Forrester directed inquiries about how many transactions the firm did to win the contest to Rose. Bob Scaglion, senior managing director at Rose, would not disclose that number, but said during the period of the contest, about 50 of the building’s 310 units were leased. Three other firms were hot on New York Living Solutions’ heels, he said, adding that Kalimian is running a similar contest at the building this month.
The goal of the promotion, in conjunction with a recent broker party, was to create buzz about the new building, which started leasing in May.
“A lot of the brokers weren’t familiar with the building, so having the party and the promotion was very good,” Scaglion said.
At the Aire, studios range in price from $2,500 to $3,600, one-bedrooms range from $3,600 to $5,000, two-bedrooms range from $5,600 to $12,000, and three-bedrooms are $11,500 to $15,000 (that’s not including a one-month-free concession currently being offered to tenants.) There are also a few as-of-yet unreleased “trophy” apartments that will rent in the range of $20,000 per month, Scaglion said.
The Aire faces stiff competition from other new Upper West Side rentals, including the Corner at 72nd and Broadway (both buildings were designed by Handel Architects.)
But brokers say the high-end rental market is showing surprising strength.
“You would be amazed at the number of rentals above $15,000 a month all over Manhattan,” said Nancy Packes, head of the eponymous new development marketing firm, which handles both sales and rentals.
This is due in part to a pickup in relocations that started early in 2010, she said. “Our core industries are hiring,” she said. “These people are very often coming from far away from New York.”
These new hires, many of them families with children, tend to rent rather than buy when they first move to the city, she said.
And while lavish spending has become socially unacceptable since the financial crisis, wealthy renters are still out there.
After the Lehman Brothers collapse, “everyone was concerned about buildings like the Corner and the Aire,” Scaglion said. “Actually, the depth of the high-end marketplace is good. People are just quiet about it.”
The top end of the luxury rentals marketing is now pushing $80-per-square square foot, up from the $60s during the downturn, Scaglion said.
“If you build a better product, they will pay for it,” he added.
Catching up on a little news from the long weekend, minutes before the close of business Friday, the Paterson administration announced that Tim Gilchrist, a top aide to the governor on all things infrastructure and transportation, would leave his job as senior advisor to the governor.
His new job: president of the Moynihan Station Development Corporation, the state agency charged (for at least the past decade) with expanding Penn Station into the Corinthian column-lined Farley Post Office across Eighth Avenue.
Mr. Gilchrist was the highest ranking member of the Spitzer administration left in the executive chamber. He initially served as deputy secretary for economic development and transportation; as his fellow deputy secretaries each left, he took on more turf, coordinating how to spend the state’s stimulus money received from the federal government
Full Article Here – Via NY Observer