News

As the national spotlight targets the banking and real estate industries, analysts are divided over the future of NYC real estate, especially in regards to the last six months.  In spite of what news sources have said about the current state of the market, we have found that although activity has been slow through late spring and the summer, prices have not decreased.  However, there remains a static gap between what a seller expects their property to fetch and what a buyer can afford to pay given the lending situation.  Larger property sales (over $50 million) have come to a virtual standstill, especially since banks have tightened their lending standards, expecting a higher return with some type of recourse in the event of a default.

Focusing on the SoHo/Chinatown/Hudson Square submarket, prices have held an overall increase from 2007 to 2008 but the gap between the high and low prices have narrowed.  SoHo in particular continues to overreach average sales prices in NYC. 

SoHo continues to be the staple of the downtown market as people clamor to live and work in the area.  Forbes has named 10013, a zip code encompassing SoHo and TriBeCa, the most overpriced zip code in the U.S., which means that investors and users are overpaying for property in this area simply because of its locale.  In 2007, not only did SoHo apartments have the highest median rent of all NYC neighborhoods in every category, the coveted one-bedroom apartment also had the highest increase in median rent over the last year.  Office vacancies in SoHo are the lowest of all NYC neighborhoods at a mere 1%.  It is still growing further south as name brand stores such as CB2 and Topshop take up space on Broadway below Broome Street, away from the traditional “heart of SoHo”. 

The beginnings of what has made SoHo great have also started to spread westward as new developments spring up in Hudson Square.  Projects such as the Trump SoHo, the Grand Street Hotel and Robert De Niro’s Greenwich Hotel have elevated the neighborhood’s reputation in NYC as an area of commerce with new restaurants and boutique stores.  However, new ground up condo developments that have not broken ground have been troubled as financing and buyers are scarce. 

Hudson Square continues to rise as cutting edge office tenants from Midtown and Midtown South are moving to the lower rents of this emerging area without having to give up the amenities they’re accustomed to.  Creative sector companies such as MTV, Viacom, The Guggenheim Foundation and designer Yohji Yamamoto have all taken space in the area.  Architecture firms and design groups help define the area as a vibrant and energetic office area.  Newsweek signed a lease for 163,000 SF at 395 Hudson Street and international advertising magnate Saatchi and Saatchi renewed a lease for 819,000 SF of space at 375 Hudson Street. These leases have helped anchor and solidify the presence of Hudson Square as one of Manhattan’s fastest growing neighborhoods.  According to a CBRE leasing report, Hudson Square has accounted for 60% of office leasing in Midtown South.  These improvements even launched a proposed Hudson Square BID.

Drawn by the availability of large scale development opportunities in the downtown area, hotel and office developers have staked claim to some prime sites in which to utilize the high 10.0 FAR that comes with the M1-6 zoning.  Millions of buildable square feet of undeveloped property give the area promise as one of Manhattan’s last remaining frontiers.  Talk of rezoning in the southern portion gives hope to residential developers interested in the area who need a variance on the commercial zoning.  These and other developments over the next couple of years will bring Hudson Square up to its full potential as a live and work neighborhood, raising property values to match its neighbors to the east and the south.

The phrase “gentrification of the Bowery” has been well documented in recent times as the Bowery has changed dramatically from the days of transient hotels and abandoned warehouses.  The New Museum of Contemporary Art started the revitalization of the Bowery, and many residential and hotel developments have brought a stream of young designers and new restaurants into the neighborhood.  Here, too, was a mecca for new condo developments and while most are near completion, many have been stalled in light of the current market conditions.  Although the old ways of the Bowery are now quickly becoming extinct, the area will most likely profit as it represents the boundary between SoHo, NoLita, and the Lower East Side. 

Neighborhoods: SoHo/ Agents: Robert Burton

Mixed-use property with long term retail tenant. Retail tenant pays all real estate taxes and insurance. Retail lease provides for 5% annual increases.

Click here for listing details.

Neighborhoods: Bensonhurst/ Agents: Jeffrey Shalom

From the The Real Deal:
Verizon secures $20M in tax credits to stay in Newark 
(by David Jones)
New Jersey awarded its first-ever urban transit hub tax credit to Verizon New Jersey Inc., under a sale-leaseback agreement with Accordia Realty Ventures that will keep the phone company headquarters in the city of Newark, officials said.

The property is a 6 story mixed use building with 21 apartments and 3 stores on the ground floor. Of the residential units 10 are rent stabilized, 8 are free market, and 3 are exempt.

This is a superb opportunity for an investor to purchase a property with a lot of upside potential.

Click here for listing details.

Neighborhoods: Lower East Side/ Agents: Michael DeCheser

A 5-story plus cellar, approximately 3,850 square foot, beautifully renovated single family townhouse. The ground floor consists of a spacious eat-in kitchen featuring stainless steal GE appliances, granite countertops, custom wood cabinets and new hardwood floors. The rear is an informal living area with access to the landscaped rear garden. The parlor floor consists of a formal living room and dining room with significant original detail. The upper floors each consist of a front and rear room and a full bathroom. The beautifully renovated property features original details, hardwood floors, substantial ceiling heights and ductless split air conditioning. The property is located in Murray Hill on the north side of East 37th Street between Lexington and Third Avenues.

Click here for listing details.

Neighborhoods: Murray Hill/ Agents: John Ciraulo

4802-4822 New Utrecht Avenue is the site of the original G & Sons shopping center which served the community for over 30 years and most recently, was occupied by National Wholesale Liquidators. The site boasts an unmatched 180 Feet of frontage on New Utrecht Avenue between 48th & 49th Street with a full loading bay located on 48th Street. 

The entire building will be delivered vacant and the current zoning allows for both commercial, residential & mixed use possibilities. The sheer size and scope of the property give any owner, user or developer one of the rarest opportunities in Boro Park.

Click here for listing details.

Neighborhoods: Boro Park

There is no doubt we are experiencing some of the most tumultuous times in our economy since the Great Depression. The unprecedented, aggressive tactics taken by the wealthiest governments across the globe in order to stabilize the current crisis we find ourselves in today are indicators of how serious the obstacles ahead really are. Although volume across the board for the first half of 2008 was down approximately 40%, prices are down just a small fraction of that. “Real buyers” in today’s marketplace can strongly benefit from a number of factors while sellers still achieve healthy prices for their property.  

If anything positive is to come from this world financial credit crisis it might be the realization of how we truly live, and invest, in a global economy. Although separated by bodies of water, borders, languages, religions and cultures, it has become all too evident that we have a lot more invested in each other than we thought. The United States was the epicenter of the CMBS quake and the shockwaves were quickly felt around the world.  Global equity markets began rattling with insecurity and credit markets came to a virtual freeze. LIBOR jumped to over 4.5% and the equity markets began plunging. The sharp decrease in stock value for some financial institutions led some to not be able to meet looming financial obligations. This created fear, and the pulling of equity out of investments created even more pressure. It quickly became evident that the failure of some of these institutions could have catastrophic effects. Not only with the basic fundamentals in the U.S., but with the rest of world as well. Failure of insurance giant AIG, for example, could have caused a domino effect amongst the global financial system that might have been cataclysmic. 

The U.S. quickly began bailing out, on its own discretionary basis, those institutions that it thought were “too big to fail.” It took a couple of weeks, but after a proposal by Treasury Secretary Hank Paulson, some ugly politics and a revision, the U.S passed the estimated $700 billion dollar bailout. The Toxic Asset Relief Program (TARP) was the first step to reassuring the world that the U.S. government is backing the economy and would do everything in its power to assure it is healthy. The rest of the world, including the G7 and G20 countries (consisting of the world’s largest economies), quickly started realizing that they needed to add liquidity to the banking system as well, and were able to pass similar legislation within five days time.  

Over a trillion dollars are in the works to flood liquidity into today’s banking system.  The plan is to get banks to lend to banks, institutions and small companies and to begin making commercial mortgages attractive again. The Fed has plans to increase the dollar limit on FDIC-insured deposits to help reassure depositors that there funds are safe and to avoid runs on banks from its depositors. These are just some of the actions that will help the flow of credit return.  

Promising news today is that the Dow Jones seems to have bottomed out around the 7800 – 8200 level, which is about 40% off its highs. Investment funds are beginning to dip their toe in the water as these values are considered extremely cheap.  LIBOR is slowly but consistently easing off its recent highs as banks begin to regain confidence in each other’s ability to repay debt. The credit arteries are beginning to unclog with the help of global stimulus initiatives. In addition, the U.S. government has bought about $25 billion dollars worth of our “private” banking system. These capital infusions are earmarked funds that must be lent out in the market. The banks cannot just keep the cash on their books. 

Today, investors who are active in the New York City multifamily real estate market should start to feel more comfortable about buying. Now they have a few things going for them. First, some owners who bought at inflated prices recently are feeling the pressure of not being able to refinance out of their current situation.  Therefore there are more motivated sellers. Second, in sharp contrast to the juiced up market of 2002-2007, there are far fewer “qualified buyers” to compete with. In happenstance, investors today can make clear and calculated decisions on what properties they want to buy. They have a number of different assets they can choose from, and are being extremely careful so as not to overpay for a property. Banks are still providing financing on this preferred asset class and the investor, or investment group, is providing much more capital into the purchase.  In the next few months all the liquidity pumped in by the world’s governments will reach the commercial lending markets. When it does, those who will receive the most favorable terms will be those who are well capitalized, patient, experienced investor operators. They will be purchasing financially sustainable properties. The Manhattan multifamily market continues to be more attractive because Manhattan is the financial capital of the world. The island also has a limited supply of potential acquisitions and their under market rents. These factors will continue to make this market thrive.

Investor’s focus is now on three alternative, but more viable, indicators. They are the cap rate, the price per unit and the price per square foot. Sellers have become much less attached to the GRM as many investors will buy property strictly on a basis of where deal cash flows. However, there are exceptions that sellers in today’s market should know. If a potential sale is valued on a cash flow basis but is still considered extremely cheap on a price per square foot basis and a price per unit basis, long term investors in today’s market will be all over it. This holds true even more so in the under $20,000,000 market place where private capital is much more accessible.

Buyers in today’s market are playing on a much more level playing field. They have real sellers in front of them, less competition, more options and strict guidelines to adhere to. Sellers can take solace in the fact that their properties values have remained extremely stable. The demand for multifamily assets in Manhattan remains one of the safest most desired assets in the world. The asset class has proven so in the strength and stability that it continues to show in a global market place that is turbulent at best.

Fed Chairman Ben Bernanke has already proposed a second stimulus package to continue to the normalization of our capital markets. The governments of the United States and the world have shown how dedicated they are to stabilizing the current financial climate we are in. Through unprecedented unilateral actions, nations across the globe vow to continue to act, to restore confidence in our economies. 

Agents: Robert Shapiro

A five story walk-up Greenwich Village apartment building with two stores and nine apartments. There is upside in the two retail stores which currently pay only $72/nsf and $139/nsf in a neighborhood which commands $150.

In four years, it might be possible to combine the shoe store and the rear apartment to create about 1,150 square feet of retail with outdoor space.

The residential units above, which are all 2 or 3 bedrooms, are extremely spacious. The property has strong in place cash flow with upside making it an extremely desirable investment.

Click here for listing details.

Neighborhoods: Greenwich Village/ Agents: Michael DeCheser

Yes, I know that things in our real estate market are very challenging and we have a long way to go before any recovery can occur, but there is some encouraging news out there. I am often asked what types of properties are most highly sought after today. After pointing out that income producing properties in under the $50 million market are doing much better than larger institutional quality buildings, we start to look at specific product types. Clearly, retail properties which are well-leased and parking garages are two product types where we have seen high demand. The third product type which is, by far, in the highest demand remains multi-family apartment buildings. This product is, and always has been, highly sought after primarily due to the safety of the investment due to the artificially low rent levels that are created by rent regulation. The buildings which have a high percentage of regulated units have, in most cases, been nearly as safe as T-bills with junk bond type yields over the long term. The higher the percentage of rent regulated units in a building, the more interest is generated from the marketplace. Rent regulation keeps rents at such low levels that there is little risk of a reduction in gross rent rolls, regardless of economic conditions. This was the case in the recession of the early 1990s when gross rent multiples declined from 12 to 13x (for properties sold for co-op conversion) down to 4 to 5x. While these multiples dropped, the rent rolls in the properties continued to increase given the upside in regulated rents. Therefore, the downside in multi-family properties is relatively low provided the appropriate level of financing is placed on the property. Over leverage is the Achilles’ heel of apartment properties. These properties also have a characteristic in which tenancy risk is very diversified. In a typical 40,000 square foot apartment building there may be 50-60 units. In a typical 40,000 square foot office building there will be a substantially lower number of tenants. Therefore, the risk of default by the tenants is relatively low in an apartment building.

A downside to multi-family properties is that they are extremely management intensive and only knowledgeable and hard working operators are able to truly maximize the potential that these buildings have. Rent regulation is a highly complex and continually changing set of rules by which these buildings must be operated. This complexity creates a significant barrier to entry for new buyers and is the main reason why we see such little direct investment from foreign buyers in this market segment. There has only been one major foreign acquisition that I can think of in the past several years and it appears that transaction is headed for bankruptcy. Not surprisingly, much of the foreign capital that is deployed into the multi-family sector is in the form of equity financing for local operators. While this barrier to entry might intuitively indicate that with less buyers, yields should be high, this is not the case. There are many operators in New York City that understand rent regulation and are able to maximize the performance of their properties through active hands-on management.

Notwithstanding the current credit crisis, the value of apartment buildings in the first half of 2008 versus the first half of 2007 (which will be viewed as the top of the bell curve for the last cycle) shows that prices were down, on average, only 5%. Since July 1st of this year, prices may have gotten softer by another 5% but, notwithstanding this additional drop, we are still within 10% of the top of the market. It is easy to conclude that this segment of the market has performed much better than others. The average capitalization rate for multi-family properties has inched up from an average of 5.5% in the first half of 2007 to 5.8% today, still well below the cost of debt. At our regular Monday morning sales meeting, I asked our brokers if they had any multi-family transactions at a capitalization rate of 6% or better. There was only one hand raised and that was due to the fact that the building consisted of nearly 100% free market apartments. This is indicative of the sector’s strength.

Portfolio lenders have also been a main contributor to the health of this sector. Multi-family not only is the most highly sought after product type by investors, but is the most highly sought after asset class for portfolio lenders. Loan to value ratios have certainly slipped from 75-85% in the first half of 2007 to 60-65% today. Clearly, there is substantial equity that is required to purchase multi-family buildings but the rates on 5-year fixed money today fluctuate in the mid-6s which is relatively low by historical standards. We have also seen a shift from the very common utilization of gross rent multiples to more of a focus on capitalization rates. The spike in oil prices earlier this year impacted multi-family properties by almost a full multiple. Increased cost of operations have also led investors to look more closely at cash flow and capitalization rate as opposed to gross rent multiple.

Perhaps the biggest trend change that we have seen in this market segment is the shift away from aggregating multi-family properties into portfolios which, up until about a year and a half ago, was the way to attract institutional capital because the bigger the transaction was, the better. Today the sum of the parts exceeds the value of the whole. Many portfolios that are being offered to the marketplace are now being broken up with properties being sold individually. This is a 180 degree change from the height of this cycle. The individual property sales also require less aggregate dollars making them within reach of a larger pool of investors. We believe that we will see a constant (albeit low) flow of product into the market as the de-leveraging effect of the credit crisis takes hold. We are seeing some larger properties that were over leveraged come to market in the form of note sales or direct sales from lenders who have taken properties back. Due to the reduction in loan to value ratios, it may become difficult for some owners to refinance an existing loan without injecting additional capital into the property. If this additional capital is not available to them and they choose not to bring in a preferred equity partner, a sale of the property may be their only alternative. We believe this de-leveraging process will take place over a period of years as loans mature and interest reserves burn off. 

Perhaps the biggest question on the minds of owners of multi-family buildings today is what will happen legislatively if the majority in the New York Senate shifts from Republican to Democrat? What will be the fate of The Rent Guidelines Board? What will happen to the $2,000 luxury decontrol threshold? These are questions that will only be answered in time and investors who remain the most bullish continue to aggressively seek opportunities in this market segment. A confluence of factors have kept the multi-family building sector in New York City resilient as long time owners continue to grow their portfolios.

Have a great week,

Bob

Two, 20' wide, five story walk up Upper West Side apartment buildings containing a total of 20 units of which 1 is rent controlled, 9 are rent stabilized and 10 are free market. Each building contains a ground floor duplex and two penthouse duplexes with roof decks.

Click here for listing details.

Neighborhoods: Upper West Side

From The Real Deal: 

Mayor Michael Bloomberg announced yesterday the extension of the J-51 Tax Benefit program, which helps owners maintain affordable housing.

Buildings eligible for the tax benefit program are multiple dwellings owned and operated by redevelopment companies that meet the city's "Article V" requirements and have a value of more than $40,000 per apartment. The only "Article V" building in the city that meets this criteria is Penn South, a large complex in Manhattan with more than 2,800 apartments, which has become a naturally occurring retirement community. The legislation enables residents to take advantage of the tax benefits to make repairs, update the building and ensure that apartments stay affordable for at least 15 years.

The sale of a parking garage at 301 East 69^th Street on Manhattan’s Upper East Side was completed by Massey Knakal Chairman Robert Knakal, marking his 1000^th commercial property sold in New York City.

31 Monroe Street is a 25' wide, five (5) story, landmarked brownstone building with nine (9) apartments in Brooklyn Heights. Six (6) of the units are free market, two (2) are rent stabilized and one (1) is rent controlled.

The property also features an approximate 1,250 sq.ft. private garden. The rents are estimated to be approximately 75% of market value.

Click here for listing details.

Neighborhoods: Brooklyn Heights/ Agents: Stephen Palmese

This four-story mixed use Greenwich Village property contains one ground floor retail unit and two residential units above. Located on a 15.67' x 66' lot, the property is approximately 2,608 square feet with about 1,025 square feet available in air rights. Currently, the ground floor lease rents at about $95/SF which is less than 50% of market rate, offering a substantial upside as retail rents to the north achieve upwards of $700/SF.

With the retail lease expiration in August 2009 and potential for newly renovated residential units being delivered vacant, the property would be ideal for an investor or live/investor.

Click here for listing details.

Neighborhoods: Greenwich Village

The PR Department is pleased to announce that we were featured in 10 news articles this week.

Of note:

-       Jason Maier’s Boro Park listing at 4802-4822 New Utrecht Avenue was picked up exclusively by Globest.com.

-          Kyle Mast’s promotion to Managing Director made the pages of NYREJ.

-          Bob Knakal’s 1000^th sale was announced in Real Estate Weekly.
 

These articles and others can be found at the new www.masseyknakal.com under News. 

Have a great weekend everyone!

Neighborhoods: Boro Park

This property happens to be on a block known as one of the best retail blocks in South Queens.

The brick building consists of 2,000 square feet of retail space and two three-bedroom apartments. The current tenant lease for the retail space is up in 18 months. After that, the new owner plans to put in a Subway.

Eat fresh, Jamaica!

Neighborhoods: Jamaica/ Agents: Stephen Preuss

This mixed-use building is on a prime part of the Fulton Street retail corridor three blocks from the A&C train at Nostrand Avenue. The building is in excellent condition and boasts one of the better commercial tenants on the block; a professional dentistry practice. This location will be positively impacted by the Gateway Streetscape Initiative, which is a $9 million city funded effort to revitalize the shopping environment on this section of Fulton Street. Excellent opportunity for an investor looking for a solid and reliable return in a location with real upside.

Click here for listing details.

Neighborhoods: Bedford Stuyvesant

The PR Department is pleased to announce that we were featured in 34 news articles last week.

Of note:
- Massey Knakal’s NYC Market Report for the 1^st half of 2008 has begun to hit the papers. The Real Deal, Curbed, Brooklyn Eagle, etc.
- The recent hiring of Daniel Doherty, John Jennings and the promotion of Kyle Mast to Managing Director in Manhattan made the Broker Exchange column in The Real Deal. Doherty also received mention in New York Real Estate Journal’s “Names, Faces, People and Places” column.
- The hiring of Ken Krasnow was exclusively written about in Globest.com. - Bob Knakal, Shimon Shkury and Rob Shapiro’s “New 118^th Street Portfolio” sale made the pages of Real Estate Weekly and many of the blogs.

These articles and others can be found at the new www.masseyknakal.com under News. 
Have a great week everyone!

Agents: Robert Shapiro

The other day, I was asked why my commentaries are generally slanted towards macroeconomics when I am a guy who sells buildings for a living. The reason is that the availability of credit and the cost of that credit are so vitally important to the functionality of our building sales market. It also appears that the credit market’s performance has never been quite so profoundly impacted by both domestic and foreign macroeconomic issues. These issues directly affect our ability to sell properties; therefore, I am riveted to them and continually try to connect the dots between what happens in our economy and how that might affect selling a property in New York City. Recently, there has been much to pay attention to.

The economic news last week was dismal. The Dow ended the worst week in its 112 years history with its most volatile day ever Friday reflected by a 1,018.77 point swing from high to low. Even the 22% market decline over 8 trading days, a movement which normally would have bargain hunters in buy-mode, left investors shell-shocked and unwilling to take new risks. Paper losses on U.S. stocks now total $8.4 trillion since the market peak one year ago. Was this surprising given the passing of the Troubled Asset Relief Plan (TARP) by Congress? Not really. There was a short rally before the passage and as the old saying on Wall Street goes, “Buy the rumor and sell the fact.” Additionally, the selling seemed to be fueled by tremendous margin calls which are demands for additional collateral from investors who purchased stocks with borrowed money. When market value of securities fall, they no longer provide adequate collateral for the loans, and if the investor does not have additional capital to invest, securities must be sold to pay off the loans. Additionally, in recent weeks, corporate bonds, which are generally considered safer than stocks, have had their largest declines ever. In fact, the corporate bond market is forecasting the worst recession since The Great Depression according to Moody’s Investors Service.

The credit markets have remained essentially frozen even in the aftermath of the passage of the TARP. Many types of debt, including agency mortgage backed securities and corporate rate leveraged loans, tumbled last week as banks, hedge funds and other investors were deleveraging, or unwinding their debt holdings. Banks that provided financing to effectuate hedge funds’ asset purchases are asking them to put up more collateral to back their positions or sell the assets which push prices down further.

Perhaps another reason why the markets have not reacted more positively to the TARP is that it is becoming more and more obvious that purchasing $700 billion of toxic mortgage securities will not be a solution by itself and perhaps should only be a minor component of the plan.  In addition to cleaning up balance sheets in the banking industry, capital must be injected into the system. Bank failures are expected to escalate over the next 6 months as the 117 banks on the FDIC’s troubled bank list have combined assets of over $78 billion. This list is expected to grow as there appear to be massive unrecognized losses ahead of us. This is one of the reasons the short term interbank lending market is also frozen. Nearly one-third of banks’ net operating revenue has been directed toward loan loss reserves. It is widely anticipated that the banking industry will see numerous consolidations, restructurings and additional federal regulation. This regulation is expected to affect the “shadow” banking system also which includes investment banks, hedge funds, private equity funds and the over-the-counter market for trading complex financial instruments. Remarkably, this shadow system accounts for 70% of lending in America.

There are four Cs in the correction of a market. The first two are Capitulation and Chaos. It appears the capitulation has occurred given the $8.5 billion of value evaporation in the equity market and the $5 billion of value evaporation in the housing market. Chaos is now upon us with economic turmoil going global, lead by equity markets in Russia, Brazil, Argentina, Canada, China and India falling by 61%, 41%, 37%, 34%, 30% and 25% respectively. The third C is for Catalyst. The TARP is a catalyst but additional catalysts are needed. Last week the Fed rolled out a $150 billion lending program for banks and created a $330 billion swap line for foreign central banks. The Fed also held a special auction called a term auction facility, or TAF, which made $225 of short term loans available. Two additional TAF sales are scheduled for November totaling $150 billion. Additionally, the Fed is considering injecting equity capital in banks, guaranteeing billions in bank debt and potentially guaranteeing all bank deposits. Around the world, governments are implementing these strategies to varying degrees. It appears the capital injection in struggling banks may be the most important. If done properly, these mechanisms will lead to the fourth C, Confidence.

The government has indicated a willingness to pump taxpayer funds into cash-strapped lenders in exchange for ownership interests in the banks. This would most likely be in the form of preferred shares, essentially nationalizing broad segments of the banking industries, reversing a decade long deregulatory trend. The intention is that this fresh capital will not only improve bank balance sheets but also provide a much needed confidence boost for the financial system. This would not be the first time this has happened in the U.S. Not surprisingly, in 1932 the Reconstruction Finance Corp. was formed which injected capital into 6,000 financial institutions. Not only did this program assist with the slowdown of the deterioration of the banking system, but it did so without a loss. Using the $700 billion of TARP funds solely for purchasing toxic mortgage securities will be politically impossible given the potential for conflicts of interest so capital infusion seems more realistic. If this recapitalization of the banking system was implemented and the system was stabilized, confidence would likely follow and credit markets would loosen. This is an important step in turning things around.

As I have stated several times before, we got into this crisis through the housing market and it is through the housing market that we will emerge from it. The housing market must bottom out in order to know the true value of mortgage backed securities and all of their derivative products. A plan to purchase and restructure troubled mortgages would aid in stabilizing the housing market, as will the loosening of credit. We have been fortunate in the mid-market of building sales in New York because there are many well capitalized banks which continue to pour debt capital into multifamily buildings, retail properties and office buildings. Unfortunately, this debt is available for properties under $50 million in value much more so than for properties with higher values. In order for lending to return to this institutional market, the banking system needs to be cleared out and recapitalized. Let’s hope the taxpayer’s money is used in the correct ways.

Have a great week,
Bob

A four-story mixed-use building on prime portion of Myrtle Avenue’s retail corridor sold to a city user for $1,100,000.

It's an ideal location within close proximity to several high-endresidential developments. The building has favorable mixed-use zoning w/ air rights, vacant commercial space and favorable short-term residential leases.

Neighborhoods: Fort Greene