New York Real Estate Market Recap 2018. Special Episode! – Brooklyn Made
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New York Real Estate Market Recap 2018. Special Episode!

by Tim Houghten. Narrated by Millian

Welcome to the newest New York Real Estate Update from Brooklyn Made.

This month we’ve seen bigger real estate moves in play, and see developers marching on with new projects that will continue to change the skyline and living trends over the next few years. Yet, the data continues to show the market is changing.

In this special episode, we’ll dig into this new data and the most notable trends of this year, and look forward to what’s coming up in the New Year…

Make sure to check out our special report on the next 100 years for Brooklyn and what planning and developments are going into place to shape it and sustain its place on the map and a more prosperous community for all those that call this borough home.


The Real Estate Market in 2018

As a whole, the 2018 real estate market has been an exciting roller coaster ride. We’ve both seen new records set, and also what appears to be cresting, and the beginning of a new correction. New York may be leading that new direction, with a reversal in price and transaction trends.

Property prices across America have reached new highs. As have rents. Tight publicly advertised inventory and cheap money fueled an acceleration in appreciation and competition for properties. The worst of that may be over for now.

A dive into Brooklyn rental market statistics show that overall the market is holding quite well, and prices are still high. Even though some gains may be only be maintained by an equal amount of discounts, and landlord concessions.

On the commercial property front, America’s largest corporations show no sign of lack of appetite for new offices. In fact, some continue to set records with big, bold deals in prime locations.


Still, it is impossible to deny that the data also shows that home sales are dropping off, more price cuts are happening, and both residential and commercial buyers and renters are gaining more negotiating power out there.

Factors that have been, and are likely to continue to affect these trends include:

  • Rising interest rates
  • New construction levels
  • The decline of the stock market
  • New innovations
  • New tax laws
  • A highly litigious business environment
  • Returns on investment property


Notable Properties in 2018

According to PropertyShark data, the most expensive home for sale in New York as of October 2018 was 90 Jule Pond Drive in the Hamptons. Listed for $175M, it came second only to California’s The One, listed at $500M.

Google claimed the first and second most expensive purchases this year with a $1B deal in Mountain View, California, and a $2.4B purchase in Chelsea Market.

Runners-up included the fall purchase of 425 Lexington Ave for over $700M by the VanBarton Group. That traded at $1,000 per square foot.

So, forget $100M, the new benchmark for bragging rights in buying elite property in 2019 is likely to be a billion dollars.


In Brooklyn

Brooklyn has continued to prove itself as one of the hottest destinations for global retailers,  developers, and fashionable properties to rent and buy.

Proposed zoning changes and allowances for special permits in north Brooklyn could allow more entertainment venues, hotels, and residential projects to be built alongside the industrial zone. This could create more growth in Greenpoint, Williamsburg and Bushwick over the next few years.

Unfortunately, Brooklyn Borough President Eric Adams has notified the Attorney General that some programs to eliminate the weight of ailing properties and put them into the hands of developers may be being misused. The program which allows developers to purchase property for as little as $1 or $8,750 per unit may be in the middle of illegal activities in which some property owners have been forced out.

Over at the Brooklyn Navy Yards, WeWork is preparing to lease 6 of 16 floors in the ground up development at dock 72. The dynamic space includes amazing views and plenty of amenities.

There continues to be a lot of mixed data on Brooklyn’s retail leasing front. Much of the confusion stems from the fact that all real estate is hyper-local. Especially in New York. So, while some hot spots were at full occupancy, less desirable retail locations may have given tenants more negotiating power in the second half of the year. Retail rents may be down on some streets. Yet, according to the Real Estate Board of New York, rents were still up on 3 of 5 Williamsburg shopping strips. That includes North Fourth Street where rents rose 34% this year to $197 per square foot.

Make sure you check out our recent report on the Brooklyn Piers and how their transformation is creating exciting new spaces for live, work and play.


Over in Manhattan…

While this borough may never completely go out of fashion on the world map, it has certainly seen some moderation and continues to fall a little less trendy than Brooklyn.

Still, we continue to see notable brands launch flagship stores here, developers competing for records with fabulous new and renovated buildings, lots of innovation and a magnet for the world’s wealthy.

Dutch CitizenM just completed the world’s tallest prefab building in the Lower East Side. The modular built hotel designed for mobile travelers always on the go appears to be doing well on occupancy rates and revenue per room as well.

Nike just completed its own new 6-floor flagship store as well. The high tech digital store offers plenty of innovative features for those who love technology and have been searching for the perfect blend between online and real-life shopping. Nike experts are available for one on one appointments at the Fifth Avenue store. Though some may wonder if the real key to getting more millennials and other generations back to brick and mortar shopping is actually simply a more human, attentive and pleasant customer service experience. Something which seems sorely lacking, even at big-name phone brand stores.


Perhaps this lack of customer service is partially to blame in the downturn in Manhattan retail rents as well. Retail rents have fallen an average of 25% in 15 of Manhattan’s 17 retail corridors. Some with cuts as deep as 37%. The two refuse to bend to this trend are Broadway which is up 5% and Harlem which is up 15%. Inventory levels are likely also a factor, and new inventory can take time to be absorbed. Yet, for those claiming there is no big downturn in real estate on the horizon, consider this is the most widespread decline in 18 years.

The Manhattan condo market is dealing with lots of new inventory as well. So much so that Extell is offering to pay 3 to 5 years of common charges for buyers who purchase any of its approximately 1,000 units before the end of 2018.


Still, the building continues. Trinity Commons at 74 Trinity Place just topped out at 424 feet tall in FiDi. Just a year after it reached the ground floor. Of the 26 stories, the first 5 floors will add more retail space in the city.

Fund manager Bill Ackman who is famous for buying the second most expensive condo at One57 (a building which is also among the deals being offered by Extell), just closed on the last apartment for his new, more modest $22.5M penthouse in the city. The Central Park West property is just across from the Museum of Natural History.


In other Boroughs

Queens certainly stepped up to garner plenty of attention for itself in the final quarter of 2018. The newly approved Skyline Tower is to both be the tallest in the borough, and the first to exceed $1B in unit sales. However, the actual units themselves appear to be quite modestly priced at just $600k to over $3M.

Queens is also, of course, the location chosen by Amazon for one of its new twin HQ2 destinations. The new Amazon project in Long Island City is sure to create a lot of headlines in 2019, though is perhaps one of the most controversial deals to date.

Taxpayers are not pleased about forking out close to $2.5B in perks, grants, and breaks to the corporate giant, including providing discounts on property taxes. If Amazon fails to deliver on all of its promises it could prove to be one of the biggest scandals for the city so far.

This new venture for Amazon also happens to be in one of the new Opportunity Zones (O Zones). As part of the Tax Cuts and Jobs Act, these zones provide those investing in them deferred taxes on their capital gains for coming to distressed areas.


New Rules & Taxes

It’s been a great and terrible year for tax changes. New Yorkers have unfortunately felt the brunt of a lot of these developments. The new tax rules implemented in 2018 brought new tax breaks, but also some limitations that hit states with state income taxes harder.

New rules cap the deduction for state and local taxes at $10,000. That’s not much if you live in Manhattan or Brooklyn. Especially when property taxes seem to keep rising one way or another.

On the bright side, we have new tax breaks for small business owners, the Opportunity Zones, and individuals can still invest in real estate tax-free with self-directed Roth IRAs.

It’s going to be more important than ever to have a great CPA on your side when it comes to filing taxes in April. Though a local real estate expert can also help direct you to excellent professionals for retirement account investing, 1031 exchanges, and other structures for reducing and eliminating future taxes, and keeping more of your gains.


Where to Go for the Holidays

Whether you are staying in the city or crave something completely new, there is plenty to explore this season.

The Rockefeller Center and its skating rink are still a must for first-time visitors to NYC. As is Santaland at Macy’s. Don’t forget to leave plenty of time to stroll down Madison Avenue and Fifth Avenue to check out the holiday window displays.

For those looking for something a little different, why not a holiday brunch cruise from Manhattan, on a yacht with plenty of heating? Or head over to Harlem to The Apollo Theater and introduce your ears to some live gospel.

However, Brooklyn is continually becoming a more serious contender for holiday festivities for both visitors and residents of New York City. Perhaps most famous of all is now the Christmas lights of Dyker Heights. It’s a sight not to miss.

While in town, make sure you head over to Winterfest at the Brooklyn Museum where the kids can walk inside a giant snow globe and see the world’s largest snowman.

If you’re burned out on the mayhem of the Times Square ball drop for New Year’s Eve, Elle Decor recommends trying out the Brooklyn Bridge Walk instead. Or for a more sophisticated evening get tickets to see the New York Philharmonic Orchestra life.


If you’re looking for something a little more lively, consider the New Year’s Eve parties at The Empire Rooftop, the Penthouse at Hotel on Rivington or the Bushwick Bash at the Legendary Republic.

Tired of the snow and cold? There are plenty of great destinations around the globe for New Yorkers to head off to.

If you’re not feeling too adventurous Barcelona, Spain will give you sunnier weather, soccer, and great architecture. This is their offseason, so look for great apartment deals on the beach.

Cyprus is another English speaking country with plenty to do for the whole family, and even a little warmer. Also, a good time to find travel deals here.

If you make it that far, you may want to keep going to Jerusalem. Take it in for yourself. Walk the markets, experience great cuisine and history.

For something a little closer to home, warmer and more exotic, try Nicaragua. It’s the new Costa Rica. Only much cheaper, less spoiled and more rugged. Just help keep it that way. If you’ve never been, this is a great place to learn to surf.


If there is no limit to how far you can go, why not Mumbai? India is one of the fastest growing countries today. Mumbai is the commercial capital and home to Bollywood. There are beaches, markets, new foods and much more to explore. It’s also much warmer and more metropolitan.


In conclusion… 

It has been a busy year in the New York real estate market. Big players, buyers, and developers haven’t been shy. In fact, we continue to see a run of aggressive new projects coming onto the market, some with even larger price tags. Brooklyn continues to be one of the biggest beneficiaries of this action and is receiving much of the investment capital. Rents have been blown around by a variety of factors. Manhattan condos and retail are facing some tough times. In Brooklyn, it is all about being on the right street. Though there are many economic factors which could impact the direction of the market in the new year.


Well, that’s it for this month and year’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

Thank you for being loyal listeners and readers this year. We’ll see you in 2019, with plenty of fresh new information.

Thanks again to our sponsors, The Ratner Team, and for making these reports and delivering this valuable information possible!

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.


Brooklyn's Next 100 Years  - Special Edition! 1
Tim Houghten
Founder Of: Ninja With a Pen
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