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Real Estate Roundup 8.21.20

Politics 

  • State Sen. Julia Salazar unveiled a bill in January to tax mezzanine debt just as mortgage loans are taxed when recorded with the state. This month Assembly member Harvey Epstein added preferred equity to the proposed measure. The bill would mean that recorded preferred equity and mezzanine debt would have to pay the mortgage recording tax, which starts at 0.5 percent for mortgages. It would also make public who is providing mezzanine debt and preferred equity in real estate projects. The real estate industry has pushed back against the bill, arguing that it will lead people to move out of New York and investors to look elsewhere for opportunities. (TRD)
  • The ferry pier by Douglas Durst’s massive Astoria apartment project was just four minutes from the East 90th Street pier by boat, but an hour and 15 minutes by mass transit. Alas, the city’s ferry system did not connect the two. So the Durst Organization successfully pushed to have the ferries stop at the Upper East Side. The route will debut Saturday. (TRD)
  • The City Planning Commission approved the proposed rezoning of Industry City. The proposal to rezone the 35-acre campus, which would allow for more retail, academic space and offices, now heads to the City Council. (TRD)
  • Out of the Facebook group “Upper West Siders for Safer Streets,” formed in late July to protest the transfer of more than 600 homeless people to hotels in the neighborhood, has come a not-for-profit group called West Side Community Organization (WSCO). Over 330 people have contributed to a GoFundMe drive launched by WSCO on Tuesday, which has already raised $62,883. The group has sought help from attorney Randy Mastro, listed this year as one of the top 100 most politically powerful lawyers by City & State magazine. (NYPost+WestSideRag)

Hospitality

  • As travelers throughout the U.S. try to make the most of a surreal summer, hotel occupancy has slowly improved, and has finally hit the 50 percent mark. The latest data — for the week ending Aug. 15 — also showed average daily room rate was $101.41, which was 23 percent below year-to-date figures; and revenue per available room was $50.87, about 46 percent the same time last year… In New York City, occupancy now stands at 41 percent, a 54 percent decline from the same time last year. (TRD)

NYC will be just fine – ignore the noise and take advantage of dislocation in certain RIETs

  • Perma-bears find a new target: “Covid-19 Pounds New York Real Estate Worse Than 9/11, Financial Crash.” The pandemic has delivered a stunning gut-punch to the NYC luxury real-estate market, applying downward pressure at a rate that surpasses both the 2008 financial crisis and the period immediately following the 9/11 terrorist attacks.” (WSJ). 
  • Industry pushes for return to normal: A loose coalition of New York’s top property owners and managers is busily working the phones, pressing many of the city’s biggest employers — including powerhouses like Goldman Sachs, Blackstone and BlackRock — to speed up the return of workers. Their argument: It’s safe, and the eateries and shops that make Manhattan special can’t hold out much longer. Some are calling it the patriotic thing to do… SL Green’s Marc Holliday, who has personally spoken with more than 100 tenants, predicts the return to Manhattan will speed up after Labor Day with many employers bringing in roughly a third to half of their staff. (Bloomberg)

Other news

  • JZ Capital Partners says stakes in their Brooklyn and Miami projects with RedSky Capital are now worthless. The private equity firm recently wrote down its equity investment on a Downtown Brooklyn development site and a portfolio of properties in Miami’s Design District to zero. (TRD)
  • Alex Sapir is attempting to restructure his last remaining bond in Tel Aviv, in a move that could impact his properties in New York and Miami. Sapir is proposing to pay down $8 million of the $44 million bond early, and then defer the remaining principal payment for three years. Two of Sapir’s assets, development sites in Miami and New York, are both on the market. (CO)

American initial jobless claims exceeds 1 million again… The number of people filing for unemployment benefits last week was greater than expected, raising concern about the state of the economy as lawmakers struggle to move forward on a new pandemic stimulus package. The Labor Department said Thursday that initial jobless claims for the week ended Aug. 15 came in at 1.106 million. (CNBC)

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