News

January 27, 2016 | Commercial Observer

Mayor Bill de Blasio must be beside himself now that the 421a tax benefits program has expired. Labor’s unwillingness to agree to reasonable wages for construction workers has dealt a crushing blow to the mayor’s objective of creating/preserving 200,000 units of affordable housing over the next 10 years. “Preserving” is always a necessary hedge word when politicians employ it, as it is impossible to accurately determine how many units get preserved. This provides elected officials with wiggle room when examining actual results versus numerical projections. However, new construction is a critical component of any initiative to increase affordable housing in the city. Without the 421a program—or some kind of equivalent—even a fraction of this target is outlandishly optimistic.

There is no doubt that New York City is in dire need of more affordable housing for residents across a broad range of earning levels. Affordable housing is typically thought of as housing for the poorest among us; however, the working class is an equally important segment of society that requires housing within the city’s boundaries...

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February 3, 2016 | Commercial Observer

For the past two years, the investment sales market in New York City has performed better than during any other two-year period I have seen in my 32 years brokering here. Values have soared due in large part to enhanced fundamentals, plentiful financing and an extremely acute supply/demand dynamic that has been skewed heavily in favor of demand. While this demand has been broad-based, foreign capital has been a significant component of the tremendous demand we have witnessed. And this foreign demand could be ready to surge to even greater heights.

Until recently, foreign investors in U.S. real estate were disadvantaged by a law that should never have been put into the tax code to begin with. The Foreign Investment in Real Property Tax Act of 1980, referred to as FIRPTA, unfairly (relative to other non-real property investments in the U.S.) imposes excessive tax barriers on foreign capital investment in American real estate. FIRPTA has been the central obstacle to greater capital investment by non-U.S. investors...

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February 24, 2016 | Commercial Observer

At the beginning of 2016, our forecast for the investment sales market in New York City was rather bearish. Coming off two years with all-time records, we felt that both sales volumes and values had to correct given how values had gotten so far ahead of fundamentals. We projected that the dollar volume of sales this year would fall by 10 percent to 20 percent, and the number of properties sold could be down as much as 30 percent to 40 percent from last year’s totals. In addition, we believed that property values would also decline this year relative to last year’s all-time record levels.

We are currently a bit more than halfway through the first quarter of the year, and it appears our forecast is on track...

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March 9, 2016 | Commercial Observer

Last week, I wrote about the current status of the multifamily sector in New York City and one sentence, toward the end of that column, produced more emails and calls than any other I have written in quite some time. That sentence was, “Notwithstanding the strong policy headwinds rent-regulated assets have faced, and will continue to face, the sector continues to progress in a positive way, at least for now.” Most of the questions were regarding the headwinds yet to come. But the tumult the market has already faced is substantive and should be reviewed as well. Let’s take a look...

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