Amazon eyeing 400K sf office in Jersey City

E-commerce giant close to inking lease with Mack-Cali Realty’s Harborside 1

Tri-State /November 02, 2021 06:30 PMTRD Staff

Jeff Bezos & 50 Hudson Street in Jersey City (, Getty Images)

Amazon’s expansion in the tri-state area continues as the e-commerce giant reportedly eyes space in Jersey City.

The company is close to a deal to lease 400,000 square feet at Mack-Cali Realty’s Harborside 1 in Jersey City, Bloomberg reports, citing people familiar with the potential deal. Tax breaks are available for the waterfront property at 150 Hudson Street, the developer’s website reveals.ADVERTISING

Harborside 1 is an eight-story, 400,000-square-foot building according to Mack-Cali’s website.

The company this spring completed more than $100 million in renovations on its Harborside campus, which spans 4.3 million square feet. The improvements at Harborside 1 include a new facade, new lobby and terrace views of Manhattan and the Hudson River.

The REIT was hoping the renovated spaces would attract media and creative tenants, Ed Guiltinan, Mack-Cali’s senior vice president of leasing, told the New York Post in May.

Jersey City was a contender in the competition for Amazon’s HQ2, offering up to $5 billion in economic incentives to land the corporate campus. Ultimately, Amazon founder Jeff Bezos chose to split HQ2 between Long Island City and Arlington, Virginia.

Things didn’t go so well for the company’s development in Queens. Grassroots organizations bemoaned the $3 billion in city and tax incentives that the company was poised to receive, not to mention the helipad that was to be part of the campus. Activists even objected to the high-paying jobs, saying the new employees would drive up housing prices.ADVERTISEMENT

On Valentine’s Day in 2019, Amazon abandoned its plans at the site.

However, Amazon’s failure in Queens hasn’t soured the company on the New York metro area. But it has focused it search for office space on Manhattan rather than the outer boroughs.

In December 2019, the tech giant signed a 335,000-square-foot lease with SL Green Realty for an office near Hudson Yards. The lease at 410 Tenth Avenue did not involve any tax breaks.

In March 2020, Amazon doubled down on New York City, buying the Lord & Taylor building from WeWork for $1.15 billion. The purchase price on the 660,000-square foot building at 424 Fifth Avenue worked out to about $2,000 per square foot.

[Bloomberg— Holden Walter-Warne

601 West 29th Street completion In Hudson Yards, Manhattan

Façade work is nearing completion on 601 West 29th Street, a 695-foot-tall residential skyscraper in Hudson Yards and number 19 on our year-end construction countdown. Designed by FXCollaborative and developed by Douglaston Development, the 60-story structure is also known as “Tower A” in a two-building development alongside 606 West 30th Street, which has yet to begin rising over Midtown, Manhattan. 601 West 29th Street will yield 703 market-rate and 235 affordable housing residences, 50,000 square feet of amenity space, and 15,000 square feet of retail space. Levine Builders is constructing the property, which is bound by Eleventh Avenue to the east, West 29th Street to the south, and West 30th Street to the north.

601 West 29th Street. Photo by Michael Young


Façade work is nearing completion on 601 West 29th Street, a 695-foot-tall residential skyscraper in Hudson Yards and number 19 on our year-end construction countdown. Designed by FXCollaborative and developed by Douglaston Development, the 60-story structure is also known as “Tower A” in a two-building development alongside 606 West 30th Street, which has yet to begin rising over Midtown, Manhattan. 601 West 29th Street will yield 703 market-rate and 235 affordable housing residences, 50,000 square feet of amenity space, and 15,000 square feet of retail space. Levine Builders is constructing the property, which is bound by Eleventh Avenue to the east, West 29th Street to the south, and West 30th Street to the north.

A great deal of progress has occurred on the exterior since our last update in April, when curtain wall installation had just begun. Now nearly all of the glass and metal panels are in place on the L-shaped building.

The construction elevator remains attached to the southern corner of the edifice, while the façade for the podium along West 29th Street is quickly shaping up.

From afar 601 West 29th Street blends into the Hudson Yards skyline, contributing nicely to the density of the cluster and extending it to the south toward Chelsea. The structure stands out from its neighbors with its white grid of squares on the northern and southern faces, while the taller rectangular segment facing east and west utilizes the same proportions and scale but with a dark-colored grid of lines between the floor-to-ceiling windows. Multiple wooden water towers of varying heights and a small mechanical extension are tightly perched above the flat roof parapet.

As of now, the structure enjoys a fairly isolated position with only 15 Hudson Yards nearby, but it will soon be joined by 606 West 30th Street, which will be built in the middle of the same parcel as 601 West 29th Street. The photographs below taken from across the Hudson River would see the most notable change in perspective as the majority of the tower would be obscured from this angle.

Photos of 601 West 29th Street. Photo by Michael Young

Residential amenities at 601 West 29th Street will include multiple tenant lounges, a gym with fitness studios, an outdoor swimming pool, multiple outdoor terraces, indoor and outdoor pet spaces, bike storage, and parking for 186 vehicles. The closest subway to the site is the 7 train at the Hudson Yards station in Bella Abzug Park to the north.

601 West 29th Street should likely be finished in the first half of 2022, perhaps by late spring or early summer at the latest.

Humans vs machines: The fallout from Zillow’s iBuying fiasco

How Zillow’s model differs from other iBuyers’

National /November 05, 2021 04:51 PMBy Erin Hudson

 Zillow CEO Rich Barton (Getty, iStock)

Zillow CEO Rich Barton (Getty, iStock)

For all the talk about how Zillow’s iBuying fiasco was a triumph of humans over machines, it’s worth remembering one simple fact: Someone had to tell the bots which data to use.

Agents and rival homebuyers are crowing about how Zillow’s apparent overreliance on a faulty algorithm led it to pay thousands over market prices. They say it shows the importance of on-the-ground expertise in a business that perhaps more than any other depends on human-to-human interactions.

“It reinforces the need for a local area expert when you’re buying or selling a home,” said Babbi Gabel, a top agent in the busy iBuying nexus of Phoenix. “Real estate is about relationships.”

Yet the answer may be more nuanced. After all, competitors have long used computer programming to identify, buy and sell homes at a profit. Rather than some sort of post-apocalyptic tale of how ragtag rebels faced down Skynet, it’s more the story of how hubris overtook good judgement.

“Investors should ask questions about execution,” said Tom White, an analyst at D.A. Davidson & Co. who rates Zillow a buy. “They clearly screwed up.”

Zillow Offers did use pricing specialists and occasionally agents to help resolve discrepancies in property values and to find valid comparative prices, a person familiar with the company said, speaking on condition of anonymity. Yet Zillow relied mostly on its much-touted, and long-derided Zestimate and stripped out most human interaction.

Rivals such as RedfinNOW and HomeVestors, by contrast, built in human checkpoints to review automated prices and underlying assumptions. In some cases, they inspect a home they’re considering buying. Offerpad’s CEO Brian Bair said in a statement that it relies on “local market expertise,” without elaborating. Opendoor says on its web site that it hires real estate professionals to man pricing teams.

RedfinNOW uses extensive renovations to deliver upside to ensure it can sell a home for more than it paid. Its specialists also manually review Redfin’s own comparative analysis for every offer it makes. Redfin’s licensed home inspectors visit every home and take 3D scans of the property.

“Those are things that we think humans are really good at,” said Quinn Hawkins, who heads RedfinNOW.

Orchard, a startup that provides loans based on a previous home’s value and will manage its sale, uses an automated valuation system that relies on data from public records, a structured interview with the homeowner, a virtual tour and photos. Yet that’s only 70 percent of the process. The rest of the time, or when there aren’t enough comparable properties, humans step in.

“The key is the system needs to be self-aware to know when it’s confident and when it’s not,” said Orchard CEO Court Cunningham.

Then there’s Zillow’s own obsession with growth.

“We made a decision that we needed to increase our acquisition pace” even as the pricing model failed to keep up, Allen Parker, Zillow’s CFO, said on a conference call Tuesday with analysts.

Zillow’s stumble probably almost certainly isn’t the end of the road for iBuying. Younger people, more at ease with clickable purchases, may seek the path of least resistance when it comes to buying and selling homes.

Even so, Zillow’s sudden exit spooked investors. Its shares slid 32 percent this week bringing the loss since a peak in February to 67 percent.

Trulia co-founder Sean Black, who sold his site to Zillow for $2.5 billion in 2015, said he’s rooting for the company. The stock’s dramatic slump this week is a buying opportunity provided “you have the stomach for the volatility,” said Black, who holds Zillow shares.

Even so, Black said home pricing needs a human to conduct a qualitative review.

“Homes are not a commodity,” said Black, who has since founded home finance startup Knock. “You need a human element to it.”

Manhattan retail market ticks up, indicating slow recovery

Availabilities decrease, leasing increases in Q3: CBRE

New York /October 14, 2021 03:30 PMBy Sasha Jones

Retail availabilities decreased, but leasing increased in the third quarter (iStock, Wikimedia, LoopNet)

Retail availabilities decreased, but leasing increased in the third quarter (iStock, Wikimedia, LoopNet)

Manhattan’s retail market is showing slow signs of recovery aided by a few major deals, according to a new report by CBRE.

Direct ground-floor availabilities across 16 of Manhattan’s shopping corridors decreased in the third quarter of this year, from 290 to 282 quarter-over-quarter. Though the figure is 11 percent higher than it was a year prior, the slight decrease marked the first decline in availability in the region since 2019.

Leasing activity, which includes new leases and renewals, also increased for the first time since 2019. Velocity rose roughly 4.4 percent from the prior quarter but remained 45.5 percent below the rate recorded the previous year.

The area with the highest leasing velocity was NoHo, with over 89,000 square feet transacted in just two deals. That’s thanks to Wegmans Food Market taking over K-Mart’s 89,000-square-foot Astor Place flagship store at Vornado’s 770 Broadway.770 Broadway and 324 Lafayette Street (Wikimedia, LoopNet)

770 Broadway and 324 Lafayette Street (Wikimedia, LoopNet)

The other deal was Kyu Restaurants, a modern Asian fusion eatery based in Miami, which announced a 6,600 square-foot lease at 324 Lafayette Street.

Flatiron/Union Square scored the second-highest leasing velocity in the third quarter with over 52,000 square feet closed across six transactions.Read more

However, average asking rent did not see much improvement. Rent in Manhattan’s retail corridors declined for the 16th consecutive quarter, falling to $605 per square foot. That’s a 1.6 percent decline from the second quarter and a 8.3 percent drop from the prior year.

The report comes as the city introduces the Key to NYC mandate, which requires customers to provide proof of vaccination to participate in activities, such as indoor dining. Simultaneously, the delta variant has posed yet another threat to businesses.

However, the city’s gradual return of tourists and office workers marches on.

The Times Square Alliance said the landmark over Labor Day Weekend saw as many as 255,000 visitors — the highest number since the pandemic began, but far less than pre-pandemic levels.

An average of 36 percent of the workforce in top U.S. cities returned to offices in the week of Oct. 4-8, according to data from Kastle Systems reported by the Wall Street Journal. The figure marked the second consecutive week of growth after an average of 35 percent of the workforce swiped in during the week ending Oct. 1. It’s also a decent jump from the week of Labor Day — an initial target return date for many companies — which saw an average of 31 percent clock in.

“The city’s economic fundamentals continue to strengthen with further improvement expected as more people return to pre-Covid routines,” Nicole LaRusso, CBRE senior director of research and analysis, said in a statement.

Lost without office workers, Midtown storefronts struggle to find tenants

Retail vacancies approached 30% this summer, far outpacing city’s residential areas

New York /October 07, 2021 02:17 PM

October 07, 2021 02:17 PMBy Sasha Jones

Vacancy rates for Midtown storefronts have more than doubled compared to pre-pandemic figures (iStock)

As resurgent Covid caseloads kept New York City’s office workers at home through the summer, retail corridors that depend on their foot traffic struggled to fill empty storefronts.

Just under 30 percent of retail storefronts in the Grand Central and Midtown East business districts — home to 15 percent of the city’s office stock — remained vacant this summer, more than double the 10 to 15 percent vacancy rates seen before the pandemic, according to a report by the Real Estate Board of New York.

Madison Avenue also saw a jump in vacancies, with 28 percent of storefronts unoccupied, up from 19 percent in 2018.

In comparison, residential neighborhoods in Manhattan, Brooklyn and Queens had storefront vacancies ranging from 14 percent to 20 percent — which, while still elevated, were much closer to pre-pandemic rates.

“It’s clear from these findings how critical the link is between the recovery and success of the City’s once vibrant retail sector and a full, safe return of office workers,” REBNY President James Whelan said in a statement.Read more

It wasn’t just retail landlords who were reeling. Office asking rents fell 4.2 percent in the second quarter, while the office vacancy rate hit a 30-year high of 18.3 percent, according to a separate report by the Office of the State Comptroller.

The total market value of the city’s office buildings, estimated at $172 billion in fiscal year 2021, fell nearly 17 percent in the fiscal 2022 assessment, the first decline in total office property market values in at least two decades. Of the $1.7 billion in property tax revenue the city stands to lose in fiscal 2022, which began on July 1, more than half will be driven by the drop in office building valuations.

According to the REBNY report, the city lost 631,000 jobs last year, with leisure and hospitality accounting for 250,000 losses. The retail sector shed over 67,000 jobs.

Only 49 percent of the city’s jobs have since returned, according to the report, leaving New York well behind the national recovery rate of 90 percent.

Still, those seeking signs of recovery should look below ground: Subway ridership had returned to nearly 50 percent of its pre-pandemic levels by early September, up from 20 percent in the spring of last year.

German investor buying 100 Pearl Street office tower for $850M

Sellers GFP and Northwind oversaw $250M renovation of property formerly known as 7 Hanover Square

New York /September 30, 2021 09:58 AMTRD Staff

German investor buying 100 Pearl Street office tower for $850M

100 Pearl Street in NYC, GFP Real Estate Co-CEO Eric Gural, Northwind Group founder Ran Eliasaf (Google Maps, GFPRE, Northwind Group)

GFP Real Estate and the Northwind Group have agreed to sell the tower at 100 Pearl Street — previously known as 7 Hanover Square — to German investor Commerz Real.

The price for the building was $850 million, or $900 per square foot, according to the Commercial Observer. Cushman & Wakefield arranged the transaction.

The office building spans just under 1 million square feet and was recently renovated for $250 million. Changes to the 1983 building included a new lobby, infrastructure improvements, the addition of a food hall and the creation of a tenant-exclusive rooftop and amenity lounge.

Ownership of the building between GFP and Northwind has been brief, although GFP is staying on as part of a long-term management agreement. The two companies acquired the building in 2018 for $308.5 million. It wasn’t long, however, before the companies began looking for an equity partner.

They eventually found one in TPG Real Estate Partners, which agreed to join the purchase and repositioning of the building as a majority stakeholder. The stake it purchased valued the building at $600 per square foot, or approximately $585 million overall, The Real Deal previously reported.

The office building is 96 percent leased and 92 percent of tenants are locked in to the building until at least 2050, the Commercial Observer reports. Among its tenants are NYC Health + Hospitals, which agreed to take up 500,000 square feet for 25 years, and the Securities and Exchange Commission, which signed a 20-year lease.

Germany-based Commerz Real has proven to have a healthy appetite for big commercial real estate purchases stateside. The firm purchased an office building in the Fulton Market section of Chicago in 2019 for $175 million, one of the biggest office sales in the city that year. The arm of Commerzbank also agreed to purchase the NYU Langone Medical Center for more than $330 million in 2018.Read more

Home sales dipped in August after two months of increases

Lack of inventory, high prices push buyers out of the market again

National /September 22, 2021 02:00 by Sasha Jones

After rising for two straight months this summer, home sales are once again on the decline.

Total existing-home sales, which includes single-family homes, townhomes, condos and co-ops, fell 2 percent month-over-month to a seasonally adjusted annual rate of 5.88 million in August, according to the latest monthly report from the National Association of Realtors. On a year-over-year basis, sales dropped 1.5 percent.

The slowdown may be partially attributed to a lack of inventory. Total housing inventory at the end of August totaled 1.29 million units, down 1.5 percent from July’s supply and down 13.4 percent from a year ago.

The lack of inventory has continued to cause bidding wars and rising prices, driving some prospective homebuyers to the sidelines, awaiting more supply.

“Sales slipped a bit in August as prices rose nationwide,” Lawrence Yun, NAR’s chief economist, said in a statement. “Although there was a decline in home purchases, potential buyers are out and about searching, but much more measured about their financial limits, and simply waiting for more inventory.”

The median existing-home price for all housing types in August was $356,700, up 14.9 percent from August 2020’s $310,400. Prices increased in each of the report’s regions, marking 114 straight months of year-over-year gains.

Properties typically remained on the market for 17 days in August, unchanged from July and down from 22 days a year ago. Eighty-seven percent of homes sold in August 2021 were on the market for less than a month.

Ruben Gonzalez, chief economist at Keller Williams, said that he expects year-over-year declines in home sales moving into the fall as there is a return to normal seasonal patterns.

​​”Overall we think home sales will remain strong going into next year, but we should see inventory levels continue to slowly trend toward more normal levels and home price appreciation begin to slow over time,” Gonzalez said in a statement.

Fortis’ Dumbo condos are priciest homes in Brooklyn

Developer asking $3,746 a foot for penthouse

New York /September 01, 2021 08:30 AMBy Erin HudsonFortis’ Dumbo condo is most expensive in Brooklyn

Fortis CEO Jonathan Landau and a rendering of Olympia Dumbo at 30 Front Street (Hill West Architects, Fortis Property Group)

UPDATED 9:17 a.m., Sept. 1, 2021: Inch for inch, Fortis Property Group’s new Dumbo condo units are the most expensive dwellings in Brooklyn.

The sail-shaped tower at 30 Front Street, dubbed Olympia Dumbo, will ask upwards of $3,000 per square foot for its two highest units, according to its initial offering plan filed with the state. The 76-unit project’s total sellout is almost $375 million — just under $5 million per pad.

The average asking price of $2,203 per square foot is the highest in the borough, according to an analysis by Marketproof, a real estate analytics company that tracks new development sales in the city.

That’s 7 percent more than the runner-up, Brooklyn Heights’ Quay Tower, where the average is $2,054. The third most expensive is Alloy Development’s 46-unit condo at 168 Plymouth Street in Dumbo at $1,797 a foot.

The premium Fortis is seeking at Olympia is even more pronounced for its two full-floor penthouses. The top unit, penthouse A, is seeking $3,746 per square foot, or $16 million for the four-bedroom pad, whose 4,271 square feet doesn’t include its 498-square-foot terrace.

The larger, five-bedroom Penthouse B, one floor below, is priced at $3,145 per square foot. It also comes with a spacious terrace. The price tag is $15.5 million.

Whether buyers meet those figures when sales launch is another matter. The most expensive condo unit sold in Dumbo to date is the Clock Tower penthouse at 1 Main Street, which went for $2,242 per square foot. The three-bedroom, 6,813-square-foot sold for $15.27 million in 2017 after nearly seven years on the market.

“It’s a huge premium,” said Kael Goodman, CEO of Marketproof, said of Fortis’ prices. But he said it could be justified by Olympia’s unusually spacious units. The building has 26 three-bedroom units and 13 with at least four bedrooms.Read more

Dumbo has been a hotbed of condo developments. Across 31 projects, developers have brought 2,400 units worth $4.3 billion to market in the past two decades, according to Marketproof. But they haven’t been selling as fast as builders expected.

Dumbo has the second most unsold condo units in the borough, with 542, according to Marketproof. Downtown Brooklyn has 608, but sales there have been brisk by comparison.

It would take about 5.5 years for Dumbo’s unsold condo units to find buyers based on the pace of contract signings this year. Downtown Brooklyn’s timeframe for absorption is just 2.3 years.

Fortis CEO Jonathan Landau has said that units on Olympia’s 15th floor and higher will have panoramic views, and amenities including a tennis court and swimming pool. Prices start at $1.5 million for a one-bedroom.

Sales at the project are being handled by Douglas Elliman’s Eklund Gomes Team and Karen Heyman of Sotheby’s International Realty.

“Nothing like this has ever been built in Dumbo, and can ever be built like this in Dumbo,” said Fredrik Eklund, referring to the wedge-shaped development site and its set-back terraces. The broker said the building has already generated interest among buyers, and the sales team has sent out “multiple” contracts.

“It’s going to shatter all records,” he said. Fortis did not respond to a request for comment.

The developer bought the triangular site between York and Front streets from Jehovah’s Witnesses in 2018 for $91 million with financing from Madison Realty Capital. Last October, Fortis landed a $163 million construction loan, also from Madison.

Brooklyn luxury home prices outside Dumbo have been increasing. An unknown buyer picked up two adjacent penthouses at Quay Tower for $20.3 million last year, setting a record for the priciest apartment sold in the borough. Actor Matt Damon previously held the title for his $16.7 million purchase at the Standish in 2018.

Manhattan office rents hit 4-year low as availability remains at record-high

Growth in leasing volume accompanied by increase in sublease inventory, reversing downward trend

New York /August 02, 2021 02:48 PMBy Akiko Matsuda

One New York Plaza and 60 Broad Street (Brookfield, Google Maps)

One New York Plaza and 60 Broad Street (Brookfield, Google Maps)

Manhattan’s office availability rate held steady at 17.1 percent in July, matching the record-high set two months ago, as asking rents dipped to their lowest level in years.

The high availability rate was despite the fact that Manhattan’s office leasing volume in July was up 15 percent compared to June, according to Colliers International’s monthly market snapshot.

July’s leasing volume of 2.35 million square feet was well above last year’s monthly average of 1.58 million square feet. But it was still nearly 35 percent below 2019 levels, when the pre-pandemic market averaged 3.58 million square feet per month.

Sublease availability also climbed, reversing the downward trend seen in the prior three months. Net sublet availability in July rose by 360,000 square feet to 21.61 million, the highest amount tracked by Colliers since the start of the pandemic.

July’s sublet inventory is 1.8 times more than the amount seen in March 2020, when inventory sat at 11.9 million square feet.

The average asking rent was $72.72 per square foot, down nearly 8 percent from a year ago and the lowest level since 2017, the report said.

The top two leases for the month were both signed in the Financial District. The law firm Fried, Frank, Harris, Shriver & Jacobson inked a 400,000-square-foot renewal at One New York Plaza, an office tower owned by Brookfield Property Partners, Chinese sovereign fund China Investment Corporation, and AEW Capital Management.

Ranking second was the city government’s 313,000-square-foot renewal at Piedmont Office Realty Trust’s 60 Broad Street.

But the Downtown submarket also set a new record-high for availability at 18.3 percent, with more than 100,000 square feet added to the market at 88 Pine Street and 81,000 square feet at 110 William Street.

“Forgotten borough” no more: Staten Island homes are pricier than ever

Median sales prices eclipsed $600K for the 2nd straight month as inventory remains scant

By Alexandra WhiteNational trends of low interest rates and shrinking inventory has led to record median home prices in Staten Island (iStock)

National trends of low interest rates and shrinking inventory has led to record median home prices in Staten Island (iStock)

Homes in Staten Island continue to command record sums.

After reaching an all-time high of $610,000 in May, the median monthly sales price in the borough remained above $600,000 for the second consecutive month in June — a 2.3 percent increase over June 2020, the previous record high, and a nearly 10 percent jump from the same month in 2019, according to data from the National Association of Realtors.

Although the median sales price is not as high as it is in Brooklyn or Queens, the Staten Island Board of Realtors said that eager buyers are making offers well above the asking price and sight unseen, consistent with anecdotal accounts in markets across the country.

Homes spent an average of 82 days on the market in June, a nearly three-year low for the borough, compared to 108 days the month before and 96 days in June 2019. Like in other markets, low mortgage rates and shrinking inventory has led to sharp increases in Staten Island home prices.

After suffering declines in 2020, pending sales and closed sales increased 113 percent and 68 percent year-over-year in June, respectively. But new listings declined by 8 percent over the same period, and inventory tumbled 36 percent.

In a statement, SIBOR CEO Sandy Krueger said numbers indicate “an overheated market that doesn’t clearly identify where things are going in the future” and encouraged both buyers and sellers to take advantage of the uncertainty.

It would take three months to sell all available inventory in Staten Island, the data suggests, compared to more than eight months in June 2020.