California senator failed to go after Mnuchin’s OneWest, but secured a major settlement from big banks for mortgage-servicing violationsTRD NATIONAL /August 11, 2020 07:00 PM By Georgia Kromrei
Kamala Harris and Joe Biden (Getty)
While serving as California attorney general, Kamala Harris could have gone after Steve Mnuchin for alleged mortgage fraud at his company, OneWest, but didn’t.
OneWest foreclosed on more than 36,000 California homeowners in the years following the Great Recession. Harris’ office conducted a preliminary investigation, and deputy attorneys general recommended the state take action, but no charges were brought.
On other occasions, however, Harris, who was just named by Democratic presidential nominee Joe Biden as his pick for vice president, has taken the battle to the industry.
In 2012, she negotiated the second-largest civil settlement in U.S. history for predatory practices that contributed to the foreclosure crisis, securing $25 billion for homeowners from the country’s biggest lenders, including Bank of America, Wells Fargo, JPMorgan Chase and Citigroup. Though the banks had agreed upon a far lower amount with the Obama administration and other states, Harris played hardball, walking away from the table until the banks agreed to cough up billions of dollars more.ADVERTISEMENT
Harris is the first African-American female vice presidential candidate — in a year when longstanding racial tensions have roiled communities. The police killing of George Floyd unleashed a public outcry and nationwide protests against police brutality. The haphazard federal response to the Covid-19 crisis has also given more force to criticism of President Donald Trump, whose Wall Street donors have mostly abandoned him in favor of Biden.
James Whelan, president of the Real Estate Board of New York, called Harris’ nomination an “exciting moment” that will impact generations to come.
“In a country as diverse as ours, we must continue to make strides like these to include a broader spectrum of voices in every industry and every institution, including the highest office in the land,” he said in a statement.
A lot has happened since Harris threw her hat in the ring for the Democratic presidential nomination. She officially withdrew her candidacy on December 3, 2019, and endorsed Biden three months later.ADVERTISEMENT
Her presidential platform, however, included points that may not sit well with real estate interests, including her position that “housing is a human right.” In November 2019, she and Rep. Maxine Waters introduced a bill that would invest more than $100 billion in affordable housing, including $10 billion to ease or eliminate zoning requirements.
Harris said she would pass legislation to provide a tax credit for renters spending over 30 percent of their income on rent and utilities, the level at which tenants are considered to be rent-burdened. She also supported a federal minimum wage of $15, which developers have said would drive up their construction costs.
Last year, she also teamed up with Rep. Alexandria Ocasio-Cortez – the subject of intense criticism from many in the real estate community – to eliminate the “one-strike rule” in public housing, a Clinton-era policy allowing residents to be evicted for violent or drug-related crimes. The legislation aimed to prohibit public housing authorities from denying someone housing if they had a criminal record.ADVERTISEMENT
Harris has challenged Trump’s tax cuts, calling them a “trillion-dollar tax scam” and said that she would reverse his 2017 corporate tax cut. And she joined 37 of her Democratic colleagues last year to argue against a capital gains tax cut, calling it an “illegal action that would defy longstanding Justice Department policy.”
(Biden has also called for a reform of the tax code, specifically going after real estate’s favorite tax loophole, the 1031 “like-kind” exchange. )
She has proposed additional taxes on the financial sector, calling for a new tax on banks with more than $50 billion in assets. Many of New York’s largest construction lenders would fall into that category.
But while she may take largely populist political stances, Harris’ personal taste, at least as real estate goes, runs more to the posh. She owns a 3,500-square-foot pad in the posh Brentwood neighborhood of Los Angeles. The property, as per a Forbes article citing Zillow estimates, is worth $4.8 million.
Plans for 343 Madison Avenue in Midtown East unveil the substantial size and scope of the supertall to take the place of the former Metropolitan Transportation Authority (MTA) headquarters. Boston Properties is developing the project that would comprise 925,630 square feet and rise 1,050 feet tall, with Class A office space above ground-floor retail. The building would yield 5,357 square feet of retail space on the ground floor, 832,613 square feet of commercial office space above, and 84,593 square feet of dedicated mechanical space. The tower would sit on a podium 301 feet tall.
Schematics in the YIMBY Forum show how the proposed superstructure will impact the New York City skyline.
343 Madison Avenue. Illustration by Mtoltethys
The project site, known as located at 341-347 Madison Avenue, has approximately 200 feet of frontage along Madison Avenue and 125 feet of frontage along both East 44th and 45th Streets. It sits in a predominantly commercial area surrounded by high-rise office buildings, retail and hotels due to its proximity to Grand Central Terminal. According to the drafted Environmental Impact Statement, the building would also offer pedestrian access to Grand Central Terminal and the LIRR East Side Access concourse, currently in the works. It would also include a 3,067-square-foot easement for the East Side Access.
Midtown East Rezoning, image by The Wall Street Journal
343 Madison Avenue is expected to be completed by 2026, with excavation work beginning in 2022. Demolition would take place from October 2020 to November 2021.
Invictus Real Estate Partners and Fortis Investment Group are combining for a series of ventures into New Jersey mixed use and commercial real estate. Eric Scheffler of Invictus and Dom Marino of Fortis have worked out an arrangement wherein Fortis will take the lead in the acquisition and development process while Invictus provides needed funding and other valuable parts of its evergrowing assets and organization.
Marino has indicated that the partnership will be flexible enough to move on the swiftly changing and dynamic landscape of the New Jersey real estate market. ” With our close to the street resources and Invictisus’ financial market saavy and fluidity our relationship should prove highly worthwhile for both parties.” Mr. Scheffler was not available for comment at the time of this article but will submit a release as soon as possible.
Recent photos show the state of progress at the site, which is located between West 36th and 37th Streets. Since YIMBY’s last update in late March, the reinforced concrete slab has been fully formed and settled, and formation of the superstructure appears to be imminent. Steel rebar can be seen protruding along the southern edge of the property and around the street-level floor plate, and will soon receive the first concrete pour for the building’s columns and walls, as well as within confines of the street-level floor plate. The construction crane should also be assembled in the coming weeks.
450 Eleventh Avenue. Photo by Michael Young
450 Eleventh Avenue. Photo by Michael Young
450 Eleventh Avenue. Photo by Michael Young
450 Eleventh Avenue. Photo by Michael Young
450 Eleventh Avenue will bring a unique, striking design to the Hudson Yards district. Renderings show a lively, modern massing composed of an undulating array of glass boxes. Resembling a stack of Rubik’s Cubes, the glass-clad structure subtly twists as it rises to the flat roof parapet. The design scheme also incorporates a number of irregular cuts and angles in the surfaces of its cubic components, which should create interesting reflections and lighting patterns throughout the course of the day.
YIMBY last reported that 450 Eleventh Avenue is expected to be finished in the fall of 2022.
Development team announces plans for five-block, 2.7K-unit megaproject
TRD New York /July 02, 2020 12:15 PMBy Rich Bockmann
Larry Silverstein of Silverstein Properties and George Kaufman of Kaufman Astoria Studios with renderings of the project (Getty, ODA)
A team of developers is planning a $2 billion, 2.7 million-square-foot mixed-use development in Astoria.
Kaufman Astoria Studios, Silverstein Properties and Bedrock Real Estate Partners unveiled their plans Wednesday for the Queens megaproject, which they’re calling “Innovation QNS.”ADVERTISING
The development will cover five blocks at the intersection of Steinway Street and 35th Avenue and will include 2,700 units of mixed-income housing, the developers announced. Of those units, 700 will be set aside as affordable housing. The project will also have 200,000 square feet of retail and 250,000 square feet of space set aside for what the developers called the city’s creative industries and other small businesses.
“This is a time when people desperately need jobs, and this project will serve as an enormously important stimulus for Astoria and New York City,” Silverstein Properties chairman Larry Silverstein said.
The development will also include 2 acres of open space, a movie theater, a grocery store, community health facilities and dedicated senior housing.ADVERTISEMENT
Architecture firm ODA designed the project.
Silverstein has spent the past two years assembling parcels at the development site, which is zoned for low-density manufacturing, meaning the development team will need a rezoning to move forward with their plans.
The developers said they plan to begin the city’s public review process next year, with construction slated to kick off in 2023 and the first phase slated to open two years later.
Purchase and refinancing requests both dropped last week:
MBA TRD NATIONAL /June 24, 2020 07:00 AM By Erin Hudson
(iStock)
Homebuyers’ appetite waned last week after two months of growth.
An index tracking mortgage applications to buy homes fell 3 percent, seasonally adjusted, after nine weeks of gains had pushed the metric to an 11-year high.ADVERTISING
The Mortgage Bankers Associated metric had been rising as prospective buyers readied for the end of pandemic lockdowns, but fell in the third week of June, according to the trade group’s weekly report.
Joel Kan, MBA’s executive at the helm of industry forecasting, maintained that the purchase market is “strong” and blamed the decrease on a lack of supply.ADVERTISEMENT
“One factor that may potentially crimp growth in the months ahead is that the release of pent-up demand from earlier this spring is clashing with the tight supply of new and existing homes on the market,” he said in a statement.
Kan added that additional inventory “is needed to give buyers more options and to keep home prices from rising too fast.”
Some homeowners have pulled listings or kept their homes off the market, waiting for the economy to improve. That kept prices from falling when demand did in April.
MBA’s index measuring applications to refinance also dropped last week, falling by 12 percent from the prior week and breaking a two-week streak of increases. The refinance index remained up 76 percent year-over-year, however, thanks to low interest rates and some homeowners’ need for cash.ADVERTISEMENT
MBA’s overall index, which covers 75 percent of the residential mortgage market’s weekly applications for purchase and refinance loans, was down 8.7 percent week-over-week.
The 30-year fixed mortgage rate remained at a record low of 3.30 percent for loans of less than $510,400. Jumbo rates fell 5 basis points to 3.62 percent.
Late last month, about 60 agents from some of New York’s top brokerages gathered in a virtual conference room for what was billed as the first open house of its kind for real estate agents. One by one, presenters shared pictures and videos of eight listings in Chelsea, with varying degrees of candor.
“It does look onto a brick wall,” said one agent.
“We just reduced the price,” said another.
The gallery of muted agents looked on. One chewed a sandwich and yelled at someone offscreen; another sat stone-faced in front of a virtual jungle background. One wore a suit and tie, while another splayed out on a couch in sweats.
“I feel like I’m inside an acid trip,” an agent wrote in a private text.
Six weeks after New York State issued its stay-at-home order to combat the coronavirus, agents, consumers and developers are finding their way through an unrecognizable home-buying market, devising new and unfamiliar methods to push deals along against long odds. Some are proving more successful than others.
It was already going to be a challenging spring in Manhattan, where prices are down about 20 percent from the peak in 2016 amid a glut of luxury condos. But as sellers pitch million-dollar apartments over FaceTime and buyers grapple with purchasing a home they’ve never set foot in, sales and listings are evaporating during what is supposed to be the peak of spring buying season.
From March 22, when the stay-at-home order took effect, to April 29, there were 643 contracts signed in Manhattan, fewer than half signed during the same period last year, according to GS Data Services, a real estate data firm. The median sale price of $1.025 million marked a 6 percent drop from the same time last spring. In Brooklyn, where the median sale price was $900,000 from March 22 to April 29, signings were down 65 percent from the same period last year.
Now agents are bracing for deeper cuts. There were just 59 new listings posted in Manhattan in the week ending April 26, including resales and new development, a stunning 88 percent decline from the 519 listings added during the same week last year, according to UrbanDigs, a real estate data site.
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“The drop in deal volume is staggering and unprecedented for the industry,” said Garrett Derderian, the chief executive of GS Data Services, adding that most of the recent buyers still had a chance to visit in person, before the lockdown.
“I don’t see deals going fully virtual,” he said, adding that sales will decline further because so much of the buying process is normally tactile and emotional.
The organizer of the virtual open house, Gerald Germany, an agent with Douglas Elliman, said his remote event was the best way for agents to gain exposure for their listings while in-person showings remain prohibited. So far, though, he has had just one signed contract since the lockdown began: a one-bedroom apartment listed for $995,000, which the buyer visited just before the restrictions began.
“We’re going to have to wait until these people can get in and see the units,” he said. In early May, Gov. Andrew M. Cuomo announced that the second phase of reopening the city would include real estate services, though the timeline is unclear.
Still, as frantic sellers hunt for buyers, deals are still happening — from first-timers hoping to take advantage of near record-low mortgage rates and soft prices, to all-cash investors buying units in bulk. To lure sheepish buyers, agents and developers are trying everything from millennial-friendly Instagram tours to deeper discounts and even “satisfaction guarantees.”
It’s unclear where prices will settle, but the first batch of new buyers could set the tone for months to come. In a small survey of 43 offers entered after the stay-at-home order in Manhattan, Queens and Brooklyn, the average offer was 14.5 percent below asking price, according to Fritz Frigan with Halstead Real Estate. Among accepted offers, the discount was about 8 percent. (Discounts are likely to be smaller at the lower end of the market, where supply remains tight, agents said.)
Kathy Murray, a Douglas Elliman agent, is still getting deals done, but from the confines of her home. If there is an upside to having to show apartments virtually, it’s that habitual open-house tourists rarely bother, leaving only determined buyers to contend with.
“Once they want a FaceTime tour, they tend to be more serious about making a deal,” said Ms. Murray, who has four deals in the works — three of which involve international buyers.
In late April she closed a deal on an Upper East Side studio listed a year ago. Before the pandemic, the price was cut twice, from $745,000 to the last asking price of $695,000, and she said the buyer, a Harvard student from Hong Kong, negotiated an additional 9 percent discount as the market grew more uncertain. Crucially, the buyer and his parents requested to include the seller’s furniture, so they wouldn’t face move-in challenges with the condo board.
Deals today require good timing and adaptability. Lara Sullivan, who rented out her Upper West Side co-op before moving to Boston for a job in the health industry, drove back to New York recently to retrieve the keys from her last tenant, not thinking she’d soon find another renter, let alone a buyer.
Her agent, Alyssa Brody with Compass, wasn’t expecting much interest when she listed the apartment for sale in late March, but she received a call from an interested broker within half an hour, she said.
With gloves and a mask in tow, Ms. Sullivan drove for three hours to open all the doors in the apartment, then waited in the car as the prospective buyer toured the space. Ms. Brody, who was two hours away in Sag Harbor, gave live updates over FaceTime, conveyed by the buyer’s agent.
Alyssa Brody, a Compass agent, credited a recent sale to this selfie-style apartment tour posted to Instagram. “It has to be authentic,” she said, or buyers become suspicious of the content.Credit…Alyssa Brody
It paid off: The buyer, who caught wind of the upcoming listing three weeks before it came to market, agreed to pay close to the asking price of $1,968,300 for the three-bedroom duplex at the top of a prewar walk-up. Ms. Brody credits an amateur Instagram tour of the apartment she recorded in 2018 for catching the buyer’s eye.
“It has to be authentic,” she said of the selfie-style video, with captions like “the most magical part!” and the hashtag #mondaymotivation. Overproduced videos, she said, can make buyers question the content.
As Ms. Sullivan discovered, motivated buyers are out there. At Manhattan House, the well-regarded midcentury condo on the Upper East Side, Shelly Bleier, an agent with Douglas Elliman, sold a one-bedroom apartment, sight unseen, to another resident of the building in an off-market deal. It is in contract for $70,000 more than the $2.01 million the sellerpaid for it in 2016, at the peak of the market. Ms. Bleier said she would have listed the unit for about $1.65 million, based on recent comparable sales.
“I think it’s the pandemic deal of the century,” said Ms. Bleier, whose client, an investor in India, was preparing to rent rather than sell because she feared she wouldn’t be able to turn a profit.
The buyer had heard the apartment was going to list for rent, and jumped at the chance to buy it for a family member. “I told the woman, ‘I can’t show it to you,’ and she said, ‘I don’t care,’” apparently because she had seen the apartment before.
In the luxury condo market, where prices have been lagging for years, there were just 11 new development contracts signed in the week ending April 26, marking the lowest weekly tally in several years, according to the brokerage CORE. Now developers, some of whom were under pressure to move units long before the pandemic, are offering substantial concessions.
While few expect the wave of defaults seen after 2008, there will likely be some urgent sales in the coming months, said Elliot Bogod, president of Broadway Realty. He said he was trying to purchase about 20 units at a 20 percent discount from an Upper West Side condo he would not name, because of competition from other bidders. (In an unusual move, he said he was negotiating with the lender, not the developer, suggesting the property might be in financial distress.) The units start at around $4 million, he said, and his clients plan to rent them.
At Waterline Square, a new luxury complex on the West Side, a group of South American buyers bought eight units in April for close to $27 million in cash — an average discount of about 7 percent, according to people familiar with the deal. James Linsley, the president of GID Development Group, the developer, would not comment on the buyers, who visited the property before the lockdown, but said the sales team has signed six deals since the lockdown began, none of which were sight unseen.
Despite its current role as the epicenter of a global pandemic, investors “still look at New York City as a safe haven,” said Melissa Ziweslin, a senior managing director at Corcoran Sunshine, a large development marketing firm.
At One Manhattan Square, the 815-unit tower on the Lower East Side, the developer, Extell, has announced its deepest discounts yet: up to 20 percent off select units in a building where prices ranged from $1.2 million to over $13 million. Before the pandemic, the developer was already offering to cover up to 10 years of common charges on the most expensive units, at a cost of tens of millions of dollars to the project. About 33 percent of the units are now closed or in contract, according to an analysis by the data company MarketProof. A spokeswoman said the developer would not release new sales numbers.
Less expensive condo projects have taken other unusual steps. At the Rowan in Astoria, Queens, where prices range from $540,000 to about $2.5 million, the developer, RockFarmer Properties, is offering a “satisfaction guaranteed” clause. Buyers who signed after the stay-at-home order will be able to tour the under-construction project when the lockdown is eased, after which they will have five days to walk away from any deal. Down payment requirements were also reduced to 5 percent from 10 percent.
Shan Chowdhury, of Halstead, signed a contract for a client, a first-time buyer in Miami who works in the medical field, to purchase a one-bedroom apartment, sight unseen, at the Vernon 123 complex in Long Island City, Queens.
The buyer watched a virtual tour and looked at an aerial view from Google Street View, Mr. Chowdhury said. That was enough to seal the deal. The 650-square-foot apartment initially listed for $895,000 in 2019, and was cut several times to the last asking price of $799,000.
Mr. Chowdhury wouldn’t reveal the final price, because the deal hadn’t closed yet, but could confidently say: “We renegotiated, hard.”
Chicago-based CNA Financial claims its policy doesn’t explicitly rule out virus-related lossesTRD WEEKEND EDITION /May 09, 2020 09:00 AMStaff
CNA Financial CEO Dino Robusto
A business insurer’s position that it isn’t required to cover coronavirus-related losses is set to face a legal litmus test.
A Las Vegas-based company with a CNA Financial’s subsidiary’s policy filed a class-action lawsuit against the company in a Chicago federal court on Monday, according to Crain’s.
The company, Vegas Image, owns a distributor of gambling-themed candy and toys. The company argues that its policy doesn’t explicitly rule out losses “from the spread of viruses.”
Conversely, CNA Financial CEO Dino Robusto claimed on Monday that all the company’s policies “have exclusion barring coverage for viruses.”
“Our property policy exclusionary language does not provide coverage for COVID-19, and as such we never collect a premium for it,” he said during a conference call.
Vegas Image wants the court to order CNA to cover losses for all parties that hold its same policy. The outcome could have wider implications for other insurers and policyholders.
Some insurance policies explicitly cover events like coronavirus. Many insurers began excluding pandemic and disease coverage following the SARS epidemic of the 2000s, when many paid millions out in claims.[Crain’s] — Dennis Lynch
350 Park Avenue, rendering from Vornado / Rudin Management
BY: Michael Young 8:00 AM ON APRIL 17, 2020
Perhaps the most exciting skyscraper project proposed for New York last year is 350 Park Avenue, a nearly 1,500-foot-tall skyscraper from Vornado Realty Trust and Rudin Management. After YIMBY broke the news on Vornado’s expected 2027 completion date for the tower back in February, we stopped by the site to check on the status of its current occupant. Located between East 51st and East 52nd Streets, a total of two edifices would need to be demolished to make way for the development.
350 Park Avenue. Photo by Tectonic
Vornado has stated that demolition cannot begin until the current leases expire at the end of 2023. Rudin Management owns the adjacent 23-story building to the immediate west at 40 East 52nd Street. This would also have to be demolished to make room for the expansive superstructure. As of now, an architect for the future supertall hasn’t been formally announced, but YIMBY will keep an eye out for any information.
Though the main rendering may not reflect the finished design, it nonetheless reveals the project’s height and design language, characterized by a dramatic wedge-shaped design culminating in twin architectural spires. Composed of four glass-clad sections that successively step back from the sidewalk, the building is a gentle, elegant homage to the classic New York setback pattern. Regardless of the final iteration, any building massing would likely feature wide eastern and western elevations and much slimmer northern and southern profiles.
Park Avenue and Midtown East as a whole are poised for a dramatic transformation over the next decade. Topped-out projects like One Vanderbilt and 425 Park Avenue have already made an impression on the Manhattan skyline and will both complete construction in the near future. In addition, JP Morgan Chase’s upcoming headquarters at 270 Park Avenue is underway and will bring another commercial office supertall to the fold.
350 Park Avenue is reported to be completed around 2027.
9 DeKalb Avenue. Rendering by SHoP Architects/JDS Development
BY: MICHAEL YOUNG 8:00 AM ON APRIL 6, 2020
Construction is finally about to go vertical at 9 DeKalb Avenue, the first supertall skyscraper in the outer boroughs. Designed by SHoP Architects and developed by JDS, the Downtown Brooklyn residential tower will stand 1,066 feet above the neighborhood.
Recent photos shot through the construction fence shows construction above street level. Workers were observed placing steel rebar in preparation for the concrete pours that will form the ground-floor columns and core walls of the 73-story skyscraper. The yellow construction crane was constantly in motion delivering materials to the site as crews put up the temporary metal formwork to support the ground-floor ceiling.
9 DeKalb Avenue. Photo by Michael Young
9 DeKalb Avenue. Photo by Michael Young
9 DeKalb Avenue. Photo by Michael Young
9 DeKalb Avenue. Photo by Michael Young
9 DeKalb Avenue. Photo by Michael Young
9 DeKalb Avenue. Photo by Michael Young
9 DeKalb Avenue. Photo by Michael Young
9 DeKalb Avenue. Photo by Michael Young
9 DeKalb Avenue. Photo by Michael Young
Meanwhile, the 160-year-old landmarked Dime Savings Bank of Brooklyn stands awaiting its complete restoration and integration into the 9 DeKalb Avenue project.
Looking at the front of the Dime Savings Bank of Brooklyn. Photo by Michael Young
Looking at the front of the Dime Savings Bank of Brooklyn. Photo by Michael Young
9 DeKalb Avenue will yield a total of 425 rental apartments and 150 condominiums, along with amenities including an outdoor terrace and a rooftop pool on top of the Dime Savings Bank. The domed edifice will serve as an entrance to the development’s 120,000 square feet of retail space along Flatbush Avenue, greeting visitors with its beautifully ornamented and richly colored former bank interiors. The southern corner of the parcel will retain the famous Junior’s Restaurant and Bakery, which is operating within a two-story structure. This is the only section of the land that was left untouched.
The closest subway trains are the B, Q, and R trains to the north at the DeKalb Avenue station; the the 2, 3, 4, and 5 trains to the south at the Nevins Street station; and the A, C, and G trains to the west at the Hoyt-Schermerhorn Streets station.
9 DeKalb Avenue is anticipated to be finished around 2022.
343 Madison Avenue. Illustration by Mtoltethys
350 Park Avenue, rendering from Vornado / Rudin Management
9 DeKalb Avenue. Rendering by SHoP Architects/JDS Development
