Welcome to the newest New York Real Estate Update from Brooklyn Made.
This month’s roundup shows a New York City real estate market that just keeps marching on. It’s redeveloping and upgrading every day. New projects keep coming online. Despite recent softness in the data, there are many encouraging signs that the worst could already be behind us. 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…
The darkest days of NYC retail could be behind us. At least some major companies seem to be making a comeback. In addition to new Apple and Nordstrom stores, PayPal has decided to open a physical store this year. The digital payment company’s new location puts it right on prime 5th Avenue real estate.
The Lower East Side’s Essex Crossing Development reports it is doing well too. All but two spaces have been leased. A new food hall just opened at the development, the 150,000 square food Market Line.
Also, look out for an array of holiday markets and seasonal pop-up shops across New York City.
Even though national retailers seemed extra desperate this year, with Black Friday sales beginning back in October, over $700B is expected to have been splurged on this key day in the run-up to holiday shopping.
For investors, the one nagging fear is new commercial rent control laws. Recent residential rent controls are already expected to have cost the city $20M in lost revenues. New commercial rent controls would cap rent increases for office and retail tenants leasing 10,000 square feet or less. As well as manufacturing tenants leasing up to 25,000 square feet.
New changes went into effect for the EB 5 visa program in November. Most notably, there is a huge jump in the minimum investment amounts foreign nationals must bring to qualify for visas. The standard minimum investment is now $1.8M. It can be as low as $900k for those in low employment areas.
A new survey from Apartment List reports that many millennials have given up on the idea of ever buying a home. They plan to become and stay renters for life. Even among those who would like to buy a home, half have zero money saved for a down payment. Just 10% have $10,000 saved.
In addition to all of the existing online review websites, New York City landlords need to be on top of new ratings coming online. This includes a new blacklist of New York City’s landlords with the worst reputation for evictions. As well as the new 2020 letter grading system which rates buildings by energy efficiency. Landlords will be required to submit their data or face fines.
For Brooklyn Real Estate News
Last month we covered the new Brooklyn welcome sign in Columbia Heights, and developments at Dock 72 at the Brooklyn Navy Yards, and Fort Greene’s BAM Historic District.
The month the big news is the groundbreaking of the new Tetris looking towers at Greenpoint Landing. The mega project spans 22 acres on the water and includes a 2.5-acre waterfront park. The two towers will bring almost 750 new apartments along with almost 9,000 square feet of retail space. When completed the project will encompass 11 towers with 5,500 residential units.
In other boroughs
New renderings reveal the design for the Bankside megaproject in the South Bronx. The industrial-looking glass towers cover 4.3 acres, with over 1,300 new apartments.
In Queens, an old hospital is been transformed into a new mixed-use development. However, the Far Rockaway project could take 15 years to be completed.
In Manhattan, the Lower East Side could be rebuilt at 10 feet higher as a flood protection measure. Local objectors plan to sue the city for approving the plan.
The old Printing District of Hudson Square has become a major new tech hub with tenants like Google, Disney, and Nuveen.
Residential rents remain strong. October data shows slight increases in rents over last year, even though around 40% of all new leases include some type of deals and concessions.
Manhattan commercial rents may take a while to bounce back. They are down by 6% to 18%. Saks Fifth Avenue’s flagship store recent took a value write-down of close to $2B, or 60% from five years ago.
Tribeca also seems to have lost a lot of ground. Prices there have dropped 30% to 45% year over year.
On the bright side, this correction may also bring a lot of buyers and tenants back as they see more value. This includes many online retailers and tech workers who are putting their money back into physical assets. Such as one Instagram influencer who with just 100k followers was able to buy a $22.5M Park Avenue property with sweeping views. The expansive pad was listed for nearly $27M.
Wood is back in. Wondering what to build or decorate with next? Timber is now being recognized as the safer, greener and more sustainable building material. It may even be cheaper and stronger than steel.
While there continues to be some concern over the amount of unsold condo inventory, developers keep coming up with new deals. Residential rents seem strong.
There are concerns and frustration over new commercial and residential rent regulations and even more over increasing taxes which seem to be having a negative impact.
Still, the view from the top still looks great, and major retailers could be poised to turn things around. New rules are also putting pressure on investors to focus on even bigger deals.
Get out there and make some plays while the prices are good. Though don’t neglect to take some time to explore NYC’s holiday markets and enjoy the season.
Make sure you’ve checked out our new special episode on Brooklyn Startups too.
Well, that’s it for this month’s round-up. 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.