Measure introduced by state Sen. Gary Winfield would also eliminate no-cause evictions By TRD Staff

(Getty Images)

A Connecticut state senator has submitted a bill before the legislature that would cap yearly rent increases at 2.5 percent, and eliminate no-cause evictions, CT Insider reported.

The bill, introduced by Sen. Gary Winfield (D-New Haven), would cap increases between landlords and tenants as well as agreements between tenants. Owner-occupied properties with one to four units would be excluded.

State law only provides good-cause-eviction protections — preventing no-fault of retaliatory evictions following tenant complaints about maintenance — to people over the age of 62 and those living with disabilities, the outlet reported. The law prevents landlords from issuing no-fault evictions or retaliatory evictions following a tenant’s complaints about maintenance issues.

Tenant advocacy groups are supporting the measure in light of rents soaring an average of 20 percent in the past two years, according to CT Insider.

“This is an important and historical time in our world, where we have real opportunities for change,” Greta Blau, a Hamden Tenant Union leader, told the outlet. “Ending no-cause eviction will ensure that many more Connecticut residents will have housing security for years to come.”

Since pandemic protections have ended in Connecticut, there has been a sharp rise in the number of eviction filings, according to the CT Mirror.

The outlet reported that a 9 percent increase in people becoming unhoused was associated with a $100 increase in rent.

At least some landlords, however, believe the proposed legislation is misplaced.

.”I think that they haven’t thought it through. They’re not understanding the economics of housing,” David Haberfeld, a Bristol landlord who owns about 57 apartments, told WFSB. “Our labor costs have gone up, our material costs are up, our taxes, our insurance, the prices of the properties.”

Haberfeld said there are already protections in place for tenants and capping rent increases will lead to landlords cutting corners elsewhere.

“Landlords that don’t fix their apartments and keep them up, that is definitely not okay. But we already have something in place to combat that and that’s code enforcement,” he told WFSB.

Nationwide, advocates have called for greater tenant protections amid the pandemic.

In California, for example, Santa Ana — Orange County’s first city to adopt rent control and eviction protections — will create a Rental Housing Board and a registry of rentals.

The new seven-member board, to launch by July, will oversee enforcement of the city’s rent control law and offer tenants and landlords a place to resolve disputes outside of court.

— Ted Glanzer

Rising interest rates, expiration of tax break crush development

New York /

December 14, 2022 09:00 AM

By Holden Walter-Warner

REBNY’s Jim Whelan (Getty)

The construction pipeline is getting narrower.

There were 351 new building filings in New York City in the third quarter, down 17 percent from the second quarter and 28 percent year-over-year, according to a report from the Real Estate Board of New York.

The drop is in part because the 421a property tax break for multifamily development in the city expired June 15, which triggered a rush of filings. The 689 in the first quarter were the most in a quarter since 2014, which, not coincidentally, was just before the previous version of 421a expired.

A drought followed the 2014 surge, and now history is repeating itself. Developers have all but stopped trying to put together investors to pursue rental projects that cannot get the 35-year property tax break. Condo projects were largely excluded from the most recent iteration of 421a.

Rising interest rates have also contributed to the decline, as financing projects of all kinds became more challenging for developers.

But the impact of 421a’s expiration is clear when comparing the slowdown in filings for rental projects to the overall drop in new-building filings. The quarter-over-quarter falloff in rental filings was 62 percent, nearly four times the quarterly decline overall. Only 78 rental projects were filed in the quarter, half as many as in the same period last year.

Those 78 projects are proposed to have 3,346 units, down 46 percent year-over-year and the smallest quarterly number in a decade — since the slump that followed the 2008 financial crisis.

Rental projects in much of the city became dependent on 421a over several decades. Progressives let the tax break lapse, believing it forgave too much property tax for too little affordability. Some predict it will be several years before it is replaced, although an abatement still exists for co-ops and condos.

Read more

• Construction pipeline soars 69%: REBNY
• Boston Properties plans 1M sf tower at ex-MTA HQ
• Douglaston CEO sees 421a dead until 2026

Experts have estimated the city needs to build approximately 560,000 units by 2030 to catch up with demand for housing in the city.

The spikes in 2014 and 2022 coincide with expirations of 421a. (REBNY)

“We face a severe housing shortage that is only getting worse and hopefully these sobering findings will encourage stakeholders to advance policies that facilitate more of the development and construction activity that our city needs,” REBNY’s Zachary Steinberg said in a statement.

More than a third of the quarter’s proposed multifamily units were in Brooklyn, while the Bronx and Queens both grabbed larger shares than in the second quarter.

Multifamily construction was quiet in Manhattan and Staten Island, though, which combined for only 10 multifamily developments. However, Boston Properties’ 982,000-square-foot project at 343 Madison Avenue in Manhattan was the largest filing of the quarter.

Third-quarter filings accounted for 6.4 million square feet, a drop of 57 percent from the previous quarter and 20 percent year-over-year.

JPMorgan Chase, Deutsche Bank, Barclays exploring debt sales

National /

November 11, 2022 04:00 PM

TRD Staff

JPMorgan Chase’s Jamie Dimon, Deutsche Bank’s Christian Sewing and Barclays’ Nigel Higgins (JPMorgan Chase, Deutsche Bank, Barclays, Getty)

Is the other shoe about to drop on commercial real estate?

Just in case it is, prominent lenders for commercial properties, especially offices, are exploring sales of their loans in cities with low demand, including New York, Bloomberg reported. JPMorgan Chase, Deutsche Bank and Barclays are among them.

In a sign of how motivated lenders are to offload debt, some are offering discounts ranging from 3 percent to 25 percent. Many of the talks around selling debt have been held behind closed doors, and debt deals are largely being kept out of the public eye.

The risks lenders face include that the properties secured by their loans will not generate enough revenue for their owners to pay the debt service, and the assets’ value will fall below the loan balance.

“Office in particular is a dirty word for lenders,” Jeff Kaplan of Meadow Partners told the publication.

Read more

• Hedging against rate hikes gets pricey for CRE players
• Commercial prices down 13% this year
• Tough decade at the office: Analysis predicts $500B value destruction

Selling loans is a normal course of business for banks. What’s not, however, is the struggle they are having finding buyers. Hence the discounts.

Lenders issued $316 billion in commercial loans across the country in the first half the year, according to the Federal Reserve. But rising interest rates and distress for certain commercial property types has lenders reversing course.

Many have become hesitant to originate debt, fearing rising rates and inflation will reduce the value of those loans in the future. Some commercial real estate players are taking out variable-rate loans rather than lock in fixed-rate loans at high interest rates.

Commercial lenders are responding to declining property prices across the sector. Commercial prices are down 13 percent from a May peak, according to the Green Street Commercial Property Price Index. Shopping malls have taken the biggest hit with a 23 percent drop, but even industrial prices are down 17 percent since May.

In the long term, office landlords may have it the worst. A study by NYU’s Arpit Gupta and Columbia University’s Vrinda Mittal and Stijn Van Nieuwerburgh estimated that by 2029, New York City’s office stock will fall in value by 28 percent, or $49 billion.

— Holden Walter-Warner

A little liberty goes a long way

By Scott Beyer 

October 12, 2022

The major cities of the Northeast have faced a paradox of high demand and low overall growth. Businesses still want to locate, for instance, in New York City, and people still want to move there, but a combo of taxes, high home prices and quality-of-life problems often discourage moving to the city itself. But across the river a different city—and a general area—has embraced urban growth where New York City eschewes it. Jersey City and others along the North Jersey shore have grown at a faster rate this last decade, creating what could be thought of as the 6th borough.

This starts with permits; Jersey City and neighboring cities build substantially more housing than most of the New York metro area at large. According to the Citizen’s Budget Commission, Hudson County overall permits well over double the rate of housing that New York City does (51 units/10ks residents vs. 22 units/10k residents). For this reason Hudson County is growing faster than New York City (7% vs 3% from 2011-2020) and the percentage growth rate since then is a whopping 18% for Jersey City. 

Many renters move to Jersey City; it was one of the top 10 destinations for renters in the U.S. This includes New York City renters in particular, suggesting they can find a similar lifestyle across the river. Jersey City does have a high average rent price, at $3,821 for a 2-bedroom apartment, but it’s cheaper than New York City’s overall average of $4,927. Furthermore, the money stretches further along the west side of the Hudson River. As a local realtor stated:  “In Jersey City you can purchase a brand-new construction condo with three bedrooms, two baths, private outdoor space, parking, laundry and roof deck with NYC views for less than $1 million. In many parts of New York City, this same condo would be upward of $2 to 3 million.”

What’s perhaps more notable are rents around Jersey City. Union City, NJ, is one of the densest municipalities in America. The average rent per 1-bedroom apartment there is $1,700 and the median household income is below $50,000. In Bushwick, a Brooklyn neighborhood noted for its gentrification, median incomes are similar but the average rent is $2,700. From 2014 to 2022, rents increased by 32% in Union City, but this was 6% lower than Bushwick’s rate. To be sure, lower home prices typically run along a gradient the further one searches from a central area. But Jersey City, where the finance industry grew 500% between 1993 and the present day, is arguably central in its own right. And it’s likely that high density construction there has made both Jersey City and neighboring suburbs like Union City more affordable. 

New York’s housing production is anemic relative to demand, both in the city and surrounding non-Jersey suburbs. Notes the Citizen’s Budget Commission: “counties like Westchester, Rockland, Nassau, and Suffolk have some of the lowest housing production rates in the country.” Despite being known for density more than any other U.S. city, New York has in fact downzoned in recent decades. A 2010 NYU study found that out of 180,000 parcels, “14 percent had been upzoned, 23 percent downzoned, and 63 percent had not had their development capacity changed by more than 10 percent” the prior decade, reported Politico. 

Jersey City, by contrast, encourages high-rise construction. According to SkyscraperCenter, the city is the 10th “tallest” in the United States (and 13th in North America). While Manhattan is famous for its skyscrapers, this is mostly a legacy from more permissive past eras, and now anti-height NIMBYism is common. By contrast, Jersey City has allowed a whole new skyline, with 35 of its 43 tallest towers getting built since 2000.

Jersey City also embraces other urbanist bona fides, often with a free-market twist. Several of the private ferries serving New York City stop along the Jersey City waterfront, providing connections to Midtown and Lower Manhattan, as does the PATH train, which provides 24/7 service, and a light rail line to points throughout the North Jersey suburbs. Interestingly, Hudson County also embraces private bus transit, with jitneys making trips throughout the day within North Jersey and to Manhattan, charging cheap fares. The city is also among those which have launched a subsidized microtransit service, supplementing other transit services.

But Jersey City is not just a bedroom community for New York commuters; jobs in the city itself have grown. Numerous financial district firms have opened satellite offices in the city dating back to the early 1990s. Tech interest and employment is also growing, with one software firm leasing tens of thousands of square feet even amid the pandemic.

Jersey City—and the larger Hudson County urban oasis that includes Union City, Hoboken, Bayonne and more—could make its case as a proverbial “6th Borough” of New York City. While it could always do more to liberalize its land use and other fiscal policies, it has done a much better job than New York City proper of accommodating the region’s population demands. As a result it has become a very different city the last decade, while much of the rest of the region stagnates under an anti-growth mindset.

OCTOBER 11, 2022

The Albanese Organization is planning 670 luxury apartments at 286 Coles St. in Jersey City, as depicted in this rendering by Marchetto Higgins Stieve Architects — Courtesy: Grid Real Estate

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By Joshua Burd

A developer has acquired nearly two acres in Jersey City with plans to build 670 luxury apartments on the property, in a recently completed deal by Grid Real Estate.

The Albanese Organization, a Garden City, New York-based firm, paid $70 million for the 1.83-acre parcel at 286 Coles St., where it joins a growing list of builders involved in revitalizing a neighborhood near the Hoboken border and just west of the Holland Tunnel. The firm reportedly plans to break ground early next year, with approvals in place and plans calling for the project to span the entire block between 16^th and 17 streets.

Grid’s Bob Antonicello and Bobby Antonicello Jr. represented Albanese in the deal, noting that Hoboken Brownstone Co. previously owned the land. Eugene Paolino and Jeff Rich of Genova Burns LLCwere also involved in the transaction.

“We are excited to play a part in the redevelopment of 286 Coles Street,” Bob Antonicello said. “The Albanese team has designed a world-class mixed-use property that will be a welcomed addition to the downtown/Hoboken residential market.”

Part of a large redevelopment area, the Albanese project would rise alongside thousands of other units that have helped transformed the longtime industrial neighborhood at the northern end of Jersey Avenue. The area is also home to the recently opened Coles Park as a result of a $2.5 million investment by Manhattan Building Co., which has delivered nearly 800 apartments in the neighborhood since 2013 and had another 350 under construction when it broke ground on the park in late 2019.

Albanese, for its part, has other projects in Jersey City, including the Hendrix, a 482-unit property at 184 Morgan St., and the proposed 6th Street Embankment project.

Rendering of One Madison Avenue Expansion. Designed by Kohn Pedersen Fox

BY: MICHAEL YOUNG AND MATT PRUZNICK 8:00 AM ON SEPTEMBER 20, 2022

Construction is rising on One Madison Avenue, a 27-story commercial expansion in the Flatiron District. Designed by Kohn Pedersen Fox and developed by SL Green, the National Pension Service of Korea, and Hines, the project involves the gut renovation and expansion of a former eight-story structure and will yield 1.4 million square feet of office space. AECOM Tishman is the general contractor for the property, which occupies a full block bound by East 23rd and 24th Streets and Madison Avenue and Park Avenue South.

At the time of our last update in mid-June, the core for the tower expansion was just beginning to rise above the gutted podium. Since then, the reinforced concrete volume has risen steadily as work on the surrounding steel frame has begun to take shape. Based on the pace of progress, the core should top out before the end of the year, with the framing following shortly behind.

O

One Madison Avenue. Photo by Michael Young

Two tower cranes are busily hoisting steel into place for the tower’s frame. Nearly all of the new windows are in place on the lower floors, arranged in a grid of vertical columns.

One Madison Avenue. Photo by Michael Young

The new tower will yield 530,000 square feet with floor plates spanning up to 35,000 square feet each. The glass curtain wall will provide occupants with abundant natural light and panoramic views of Madison Square Park, the Flatiron Building, and the surrounding neighborhood. The tenth and 11th floors will feature 22-foot ceiling spans and provide access to an open-air rooftop deck. Additional outdoor terraces will sit atop the podium between Madison Avenue and Park Avenue South.

Office amenities at One Madison Avenue include a 15,000-square-foot artisanal food market, a 9,000-square-foot tenant lounge, a three-level fitness center, bicycle storage, and a 13,000-square-foot high-tech event space with a capacity of 800 people. The closest subways from the property are the R and W trains at the 23rd Street station to the west along Broadway, and the local 6 train to the west along Park Avenue South. It was last announced that IBM has signed on as the anchor tenant with plans to occupy 328,000 square feet across five floors.

One Madison Avenue is slated for completion by the end of November 2023.

Retailer ended deal talks with Franchise Group

National / Fortis Staff

July 01, 2022 02:30 PM

Kohl’s CEO Michell Glass (Kohl’s, iStock)

Sale talks between Kohl’s and Franchise Group are off. A sale of Kohl’s massive real estate portfolio, however, may be on.

The retailer said it is ending the exclusive negotiating period with Franchise Group for the business, instead continuing to operate as its own company. A Friday announcement on the move pointed to “reevaluating monetization opportunities for portions of the company’s real estate portfolio,” which is valued at $8 billion.

Ditching its real estate in leaseback transactions hasn’t appealed to Kohl’s in the past, CNBC reported, marking a strategic shift in how the retailer may move forward.

Kohl’s has some experience in recent leaseback deals, including e-commerce fulfillment and distribution centers in San Bernardino, which netted the company $127 million. Leaseback sales allow companies to realize funds quickly while maintaining use of its properties.

A drawback to the deal is a possible burden to companies stuck in leases with onerous terms or the chance to be left off the opportunity to lease the property at all down the road.

Read more

• Activist investors urge Kohl’s to cut real estate, inventory
• McLinden’s Hubbard Street lands Kohl’s for suburban Chicago store
• NYC retail asking rents show signs of recovery

Activist investors have spent more than a year pushing Kohl’s to get rid of some of its real estate. Macellum Advisors GP, Ancora Holdings, Legion Partners Asset Management and 4010 Capital called on Kohl’s last year to hire directors with retail experience and consider sale-leaseback deals while reducing inventory.

Kohl’s said at the time it was already considering some of the ideas. Macellum, the most prominent of the activist investors, didn’t respond to the outlet’s request for comment.

As of late January, when the $8 billion valuation came down, Kohl’s owned 410 locations. It was also leasing 517 locations and operated ground leases for 238 of its stores.

In addition to moving on from the Franchise Group, Kohl’s is moving forward with a $500 million accelerated stock buyback program. The company also reduced its revenue guidance for the fiscal second quarter due to diminishing demand linked to inflation.

CNBC — Holden Walter-Warner

                 article provided by Fortis Investment Group administrative staff             June 16, 2022                        

                                   

Dunn Avenue Senior Living

                                     150 Unit Independent Living & Assisted Living Care Facility

                                                        Jacksonville, Florida

Dunn Avenue Senior Living in Jacksonville Florida

The project is a mixed-use Senior Housing development. It will be located at 3641 Dunn Ave. just east of the I-295 junction with Dunn Avenue in Northwest Jacksonville. It will be the newest and most modern complete Senior Living project in Jacksonville. It will contain 55 independent living units (located in 26 individual duplexes and 1 tri plex buildings), & 95 assisted living suites. The main structure housing the assisted living units will be a three-story building. The total square footage of the project will be approx.139,700.

The project will be designed with residential style finishes and furnishings to attract all levels of income seniors who desire to live in a community with a residential experience and elevated level of quality service. Given the vibrancy and rejuvenation of the Jacksonville area, this is a sorely needed service provided not only for retirees in the area, but also family brought in to live closer to relatives and friends in the Jacksonville area.

It will incorporate the latest innovations in senior housing with the assisted living care and will provide the residents with a resort style setting with a full amenities package. “Dunn Avenue Senior Living will have a competitive market advantage by being able to integrate all levels of retirement needs” stated Dom Marino, Managing Partner at Fortis Investment Group in NYC. “From independent to assisted and, in the future, even long-term care” he added. In addition, a full range of social services, and recreational activities will be offered. The project will be a high quality, modern, fully equipped, and staffed property to provide a superior home and living experience for all residents.

Edge Fund Advisors, Jamestown nab combined $1B in Midtown; Rabina’s 5th Ave tower also a top recipient

By Orion Jones May 31, 2022 11:30 AM

520 Fifth Avenue, 1450 Broadway and 1 Times Square (Kohn Pedersen Fox, 1450 Broadway, Bernt Rostad from Oslo Norwayedited by Yarl CC BY 2.0 via Wikimedia Commons)

The 10 largest Manhattan real estate loans recorded in April totaled about $1.7 billion, a good $500 million over March’s total and nearly double last April’s amount.

Times Square was the center of some of last month’s biggest deals, including a refinance of the former Bertelsmann’s building and an extension of One Times Square, where the New Year’s Eve ball drops.

Below are more details on the borough’s largest real estate loans in April:

1. Timely refresh in Times Square | $445 million

Edge Fund Advisors and HSBC, owners of 1540 Broadway, the 44-story former Bertelsmann Building in Times Square, received $445 million to refinance the senior loan for the office portion of the building. The lenders were Apollo Global Management, Michael Dell’s MSD Partners and Monarch Alternative Capital. The loan included $96 million of new debt, for a total refinancing package of $590 million.

Developed by Bruce Eichner in the late 1980s for the German media conglomerate Bertelsmann, the project fell into bankruptcy in the early 1990s but its owners recently spent $40 million on amenities and energy-efficiency upgrades. Vornado Realty Trust owns the retail portion of the building.

2. Mixed-use muscle | $410 million

Bank OZK provided $410 million, including $300 million in construction loans, to Rabina for its 70-story tower underway at 520 Fifth Avenue in Midtown. Carlyle’s Global Credit business contributed $130 million at the mezzanine level, for a total amount of $540 million. The debt from Bank OZK replaces an acquisition loan used by Rabina to buy the land for $205 million in 2019. The tower will be Fifth Avenue’s second-tallest after the Empire State Building and will include 98 residences across 16 floors, plus offices and retail.

3. Party hats on | $290 million

JPMorgan Chase loaned $290 million, including $128 million in construction funds, at One Times Square, where the New Year’s Eve ball drops. Developer Jamestown will reportedly spend $500 million renovating the long-empty building thanks to a total debt package of $425 million. The top of the building is set to receive a new viewing deck and 12 floors of the 118-year-old building will be opened to the public.

4. Healing the Hayworth | $160 million

JPMorgan Chase loaned Zeckendorf Development $159.7 million, including $23 million in new project loan debt, for its purchase of the Hayworth, a 61-unit condo project at 1289 Lexington Avenue on the Upper East Side. Zeckendorf bought the building from the U.K.-based lender Children’s Investment Fund, which took control of the property from Ceruzzi Development through a foreclosure auction in January.

5. Meatpacking loan | $123 million

German bank Deutsche Pfandbriefbank loaned $123.4 million to Aurora Capital Associates at 809 Washington Street, an office building in the meatpacking district, including $63 million in new debt that will cover a renovation and expansion of the property. The loan replaces debt held by JPMorgan Chase.Read more

• New York City REIT in danger of default on NY real estate loans
• HUBB NYC picks up LES rental for $64M
• Astoria cigar factory converted to offices highlighted NYC i-sales last week

6. Sunrise, sunset | $80 million

Fortress Investment Group is now the senior lender at 141 East Houston Street, a new boutique office building on the Lower East Side, after providing a $79.6 million loan package that includes $31.6 million in fresh funds for developer East End Capital to finish construction. The office property replaces the Sunshine Cinema, which closed in 2018.

7. Art Deco refi | $70 million

The real estate lending arm of insurer MetLife provided $70 million in loans to Rose Associates for the refinancing of 21 West Street, a 33-story Art Deco residential building in the Financial District with 293 units. The loan replaces debt held by insurance company Axa Equitable Life Insurance.

8. Chetrit goes shopping | $63 million

Madison Realty Capital loaned $63 million to the Chetrit Organization for its purchase of 275 Cherry Street, a Two Bridges development site also known as 265 South Street, from CIM Group and L+M. Plans call for a two-towered building on the site with 1,300 residential units.

9. Ladder in Soho | $57 million

Ladder Capital plunked down $57 million to take over as senior lender at 446 Broadway, a boutique office and retail building in Soho owned by KPG. The total financing comes to $64 million including additional funding from Heitman. Building tenants include post-production video company Cabin Editing, Danish corporate networking company The Org and online equity investing firm Rally.

10. NoMad world | $47 million

New York Community Bank loaned Stellar Management $46.7 million to refinance its 99,000-square-foot office building at 44 West 28th Street in NoMad. The loan replaces debt previously held by Signature Bank. Artsy poster museum Poster House is the ground-floor tenant.

Rendering of the Frank J. Guarini Justice Complex – Hudson County Improvement Authority

BY: MICHAEL YOUNG 8:00 AM ON MAY 1, 2022

Construction is rising on the Frank J. Guarini Justice Complex, a massive new government building at 595 Newark Avenue in the Journal Square neighborhood of Jersey City, New Jersey. Designed by bridging architect Rafael Vinoly and design-builder Terminal Construction Corporation, the five-story structure will yield 24 courtrooms, jury assembly spaces, and new offices for the Hudson County prosecutor, the surrogate, and the sheriff, among others. The $345 million development will also house a 75-seat public food court, a self-help law library, a children’s play area, training spaces, and a 459-space parking garage. MAST Construction Services Inc. is the general contractor for the facility, which is rising from an extensive plot bound by Central Avenue to the west, Route 139 to the north, Oakland Avenue to the east, and Newark Avenue to the south. The developers are aiming for LEED Silver certification.

Recent photos show the towering concrete columns topped out around the perimeter of the site and the steel superstructure rising within.

From certain angles, the development appears almost like an abstract art installation towering over the nearby homes and commercial buildings. The land on which the building rests had to be cleared of several low-rise structures and consolidated to form one mega parcel. This involved the removal of Cook Street and the widening of Oakland Avenue into a two-way corridor for increased vehicular usage.

The Frank J. Guarini Justice Complex will replace the outdated Administration Building, which will eventually be demolished and replaced by a park using funds from Hudson County.

Renderings below from the Hudson County Improvement Authority provide further perspectives of the Frank J. Guarini Justice Complex and its lateral build defined by a multi-story system of diagonal trusses. New landscaping and tree-lined sidewalks will surround the main western entrance to the property.

The Frank J. Guarini Justice Complex is anticipated to be finished sometime next year.