NYC Planning Commission Pushing For More High Rises; Increase Density in Transit Rich Neighborhoods

The Real Estate Board of New York hosted their annual event honoring commercial property management achievements and pros. One of the speakers at the event was Marisa Lago who is the City Planning Commission. In her speech, she addressed what is ahead for the City with respect to housing and what the Commission has been prioritizing.

According to Lago, New York is has a population of 8.5 million people and 4.5 million jobs. She indicated that between 2010 and 2017, NYC added 600,000 jobs. With this boom in employment there are challenges that the Commission would like to address.

Her biggest concern is to build more affordable housing. In particular they are prioritizing "as of right" developments. As of right developments are ones that comply with all applicable zoning codes. They do not require special public hearings, permits, variances or discretionary action by the City Planning Commission or Board of Standards and Appeals. Lago stated
“Since 2010 over 80% of new housing in the city has been built as-of-right. Without this development about 300,000 New Yorkers, an entire city of Pittsburgh, wouldn’t have the homes that they live in today.”

The second priority would be to increase residential density in transit-rich neighborhoods. Lago states that the Commission has been encouraging mixed-used neighborhoods in a focused way for the past two decades.

According to Globest, Lago pointed out in 2017, only 18 buildings 40 stories or higher were constructed. They accounted for only 1% of new residential buildings completed. But they accounted for 22% of new housing units. Creating more high rises would certainly bring more affordable housing in transit rich areas.

Blue Harbour Property Management is a full service NYC property management company servicing the boroughs of Queens, Brooklyn, Manhattan and the Bronx.  Whether it be a 1 bedroom condo or multi-family building we are able to assist our clients maximize their investments.

Amazon's Long Island City Base Will Increase Residential Property Prices Dramatically According to PropertyShark

Amazon has finally decided on a new headquarters for their operations.  Instead on just deciding on just one location, they have decided on dividing it up with one location in Arlington, Virginia and another right here in Long Island City.  There have been numerous prognosticators discussing the implications on the move.  Some have not been positive.  What has been a consensus is that the interest in Long Island City and surrounding areas will be heightened.  A new article by PropertyShark shares their insight on what they are expecting for the future of the area surrounding the Amazon HQ.

There has been an increase in interest in Long Island City, Astoria and Sunnyside.  Point2Homes indicated that there was 198% increase in page view in Long Island City.  Residential neighborhoods around Amazon's headquarters will boom at a high pace but also neighborhoods around the subway 7 line will see increase in residential home prices as well.  Matthew Haines, real estate investor and founder of PropertyShark states “Prices along various subway lines are going to rise by 25-40%. Neighborhoods that have been stable for generations are going to get gentrified and existing residents pushed out.” 

Long Island City itself has seen a 35% increase in home prices in the last 5 years reaching a peak of $435,000 in 2017.  PropertyShark expects prices to increase at a more accelerated pace with a higher demand.  Hunter's Point they believe will see average prices hit $1 million in the near future.
Another result of Amazon's move and increased property prices will be gentrification of areas that have remained the same for many decades.  Matthew Haines explains “Until now the 7 train and the communities surrounding its stations haven’t really seen the gentrification and increase in price that other lines like the N, E and F serving Queens or any of the lines serving Brooklyn, even if commutes into Manhattan were significantly longer on those lines.  Suddenly the 7 train is going to be discovered.  Prices are going to swing in the other direction, from relatively affordable (for NYC) to very high.".  Neighborhoods that were pointed out with being impacted are Jackson Heights, Elmhurst, Corona Downtown Flushing.  Further out, Richmond Hill, Forest Hills and Rego Park will be affected.

Blue Harbour Property Management is a full service NYC property management company servicing the boroughs of Queens, Brooklyn, Manhattan and the Bronx.  Whether it be a 1 bedroom condo or multi-family building we are able to assist our clients maximize their investments.

http://www.blueharbourpropertymanagement.com/amazons-long-island-city-base-will-increase-residential-property-prices-dramatically-according-to-propertyshark/

Manhattan Office Rents Show Positive Signs in Third Quarter Report

Colliers International published their Manhattan 3rd quarter Office Market Report recently.  The report indicates that leasing activity between January and September reached levels not seen since 2002.  Also year to date activity has already surpassed 2008-2012 levels.

The robust job market has precipitated the growth in the office market sector.  Specifically from August 2017 to August 2018, New York City added 74,200 new private sector jobs which was a 1.9% increase.  Also, unemployment has dropped 0.8% within the year as well.  Manhattan leasing was showing significant health as it has shown a 4 year high.  Leasing increased 20.1% from the 3rd quarter of 2017 and 25.4% over Manhattan's 5 year historical average and 48.5% over the 10 year average.  Quarterly inventory remains unchanged at 10.2% for the quarter and slightly above (.4%) year over year.

The news on asking rents is even better for landlords.  The report shows that asking rents has hit an all-time quarterly record at $75.86/ sf.  The asking rents is up 2.3% from the 2nd quarter which is the largest quarterly increase in 3 years.

In an interview at Globest.com, Craig Caggiano, Colliers International’s executive director states that absorption is a great indicator of the future.  It is noted that because of new construction and relocation tenants are moving from Midtown to Hudson Yards and Downtown.  In what is considered a "home run" he states  “Those tenants leave big holes in the market.  Those spaces are coming into our availability right now and into 2019. The fact that we are able to absorb that availability because of strong, relatively stable leasing has been a very important market indicator.”

The top sub-markets for asking rents are the following:

1.  Hudson Yards/Manhattan West- $106.19 sf
2.  Plaza District- $96.28 sf
3.  Soho- $89.93 sf
4.  Midtown- $84.33 sf
5.  Greenwich Village- $82.48

The top sub-markets for leasing activity by square footage are the following:

1.  Midtown- 7,346,224
2.  Midtown South- 3,088,334
3.  Plaza District- 2,810,959
4.  Grand Central- 2,379,560
5.  Times Square- 1,654,621

Blue Harbour Property Management is a full service NYC property management company servicing the boroughs of Queens, Brooklyn, Manhattan and the Bronx.  Whether it be a 1 bedroom condo or multi-family building we are able to assist our clients maximize their investments.

http://www.blueharbourpropertymanagement.com/manhattan-office-rents-show-positive-signs-in-third-quarter-report/

REIT Markets Finding It's "Mojo" in Second Quarter After Historic First Quarter Selloffs

Globest.com is reporting that REIT equity shares increased 11.1% in the second quarter of 2018 after suffering historic selloffs in the first quarter that lent to a 10% decline in value for the period.  The report also indicates that shares increased another 3.6% in August as the sector is finding it's "mojo" according to Kroll Bond Rating Agency (KBRA).  The report covered 116 REITs that placed unsecured debt, including 66 REITs that issued notes in the public market, 28 REITs that issued unsecured notes but only via private placements and 22 REITs that borrowed via unsecured term loans but not unsecured notes.

According to KBRA  debt-to-market leverage for the REIT sector reached record lows by mid-year 2018, declining to a median of 30.2% for public and private note issuers. REITS have recovered all of their first quarter losses and are now high year-to-date as compared to the same period year over year.  Retail department stores as well as malls and shopping centers rebounded for the quarter.  Retail department stores are considered one of the strongest equity market groups.

Overall KBRA is confident in the overall REIT market stating “If REITS aren’t in the sweet spot for capital raising and allocation, they’re not far from it. Favorable borrowing costs and more agreeable equity valuations have become aligned with robust demand for properties and the backdrop of consistent economic and employment growth. The menu of REIT capital raising options has rarely, if ever, been broader.”

Other findings from the report according to the Globest.com article are the following:

• Alignment of shareholder and creditor interests is evident in the REIT sector, where lower-leverage REITs have substantially outperformed in the equity market, engendering a greater willingness to raise equity, expand portfolios and enhance diversification.
•  Lower borrowing costs for REIT unsecured debt than mortgage loans further align shareholder and bondholder interests, with unsecured borrowers prompted to avoid and retire mortgage debt.

Blue Harbour Property Management is a full service NYC property management company servicing the boroughs of Queens, Brooklyn, Manhattan and the Bronx.  Whether it be a 1 bedroom condo or multi-family building we are able to assist our clients maximize their investments.

http://www.blueharbourpropertymanagement.com/reit-markets-finding-its-mojo-in-second-quarter-after-historic-first-quarter-selloffs/