Annie Skorulski

Thanks to the The New York Times for this article about Hudson Yards New York and the sustained success of the office buildings within the Project. Are we surprised by the success of the office buildings at Hudson Yards? It's about the Flight to Quality that attracts companies seeking quality and those that can afford the highest quality in workplace environment. Interesting how retail initially suffered when the pandemic hit, and now the traffic at Hudson Yards has exceeded those levels from 2019. So many critics never gave Hudson Yards a chance considering what that area was prior to this massive development. But as many have suggested, even the Developers and Sponsors, Hudson Yards would never have been so successful if it wasn't for the public-private partnership including tax brakes and subsidies. But this article did not mention that most of the equity for Hudson Yards came from the EB-5 Program which clearly put little financial risk on the shoulders of the Developers. So, why can't cities, even #NewYorkCity look at Hudson Yards as a way to move forward and bring back that energy in the US cities that have been suffering from the loss of the American worker. Not so long ago the U.S. Department of Housing and Urban Development provided Action Grants and subsidies to cities where developers wanted to build. And these programs created jobs and helped create the infrastructure for future development and most of these programs were successful too.

1

1 Comment

Sustainable Living - The Story of 505 State Street A new project in Brooklyn, 505 State Street, is NYC’s first all-electric skyscraper and a big test case for renewable energy buildings.  Alloy, an architecture and development firm, set out to develop a building that not only addresses the city's neverending housing need but also sets a precedent for environmental responsibility. At 44 stories tall, 505 State Street is tackling energy sustainability at an unprecedented scale. What makes this building revolutionary? - All Electric: It has no gas fired furnaces or stoves. Instead, everything in the building — heat, air conditioning, elevators, pools — operates on electricity. This by itself is not revolutionary. But when combined with… - All Renewable Energy: the residential tower will operate solely on renewable energy, embodying an optimistic step toward environmental sustainability and reduced carbon emission. A Request for Proposals was recently issued by the team to enroll the project in community solar projects that will secure a 100 percent local renewable energy supply for the building. - Smart Home Technology: In addition, each of the 441 apartments is equipped with smart home technology that allows residents to optimize their energy consumption. When smart home technology becomes the standard, it has a meaningful economic impact for both the building and its residents. 505 State Street could be a blueprint for the future of urban living. Kudos to Alloy for thinking big. The time, energy and cost of developing these systems for the first time, and then implementing them, is no small endeavor. Someone has to be the first through the door. 505 State Steret is part of Phase 1 of Alloy Block, an entire city block in Brooklyn that is planned to contain buildings that feature the latest energy efficiency techniques in order to reduce carbon emissions from the built environment. 

7

3 Comments

1. If Berman is right, +66 million square feet of office space (about 6% of New York City's total office space) could be converted into residential units in the coming years. These units will likely be awkward, with windowless "home offices", but hey, that's the price you pay for the privilege of living in a converted cubicle in the city that never sleeps. 2. Berman's betting on the zoning gods and dreams of converting pre-1970s buildings, which account for an estimated 30% of the city's 1.1 billion square feet of office space. In a city where a shoebox costs a kidney, his "slums for the rich" sounds like a solid bet. 3. The article glosses over the second-order effects of this trend. Take urban agriculture, for instance – a sector that's expected to grow at a sizzling CAGR of 10.1% from 2020 to 2027, fueled by the insatiable demand for sustainable, local food sources. It's the perfect fit for the eco-conscious Gen Z crowd moving into these converted spaces, who wouldn't be caught dead eating a conventionally grown tomato. 4. Vertical farming can yield up to 350 times more produce per square foot compared to traditional farming methods, making it an ideal solution for urban environments. Startups in the agri-tech sector attracted $4.4 billion in investments in 2019, indicating a strong interest in sustainable crop production and smart farming technologies. 5. So, if you find yourself living in a converted office space with no windows, just remember: you can always grow your own food under the fluorescent lights of your "home office" – it's like having a personal, indoor farm right next to your standing desk! .

22

14 Comments

"Using the average gross annual wage as a guide, nearly half of all New York City neighborhoods would require more than 50% of income to be spent on rent." A relevant topic as recent grads enter the workforce. #newyorkcity #apartments #workforce #housing #rents #income #manhattan #realestate #commercialrealestate #salary #graduates #hiring CoStar Group CoStar News

14

📰 Today I´m sharing this insightful article from the New York Post highlighting the shift in NYC's office real estate market, as tenants favor Class A over Class B buildings. With demand soaring and space dwindling, a spike in Class A rents is anticipated until new developments emerge. A must-read for anyone in the commercial real estate sector. Please find full story here: https://lnkd.in/eszNaPqD #commercialrealestate #newyork

8

1 Comment

In a sign of the direction that the commercial real estate market might be moving in, the Department of City Planning in New York City said that 64 office building owners are considering converting to apartments, according to a report in the New York Post. The city has an ambitious goal of creating 20,000 new apartments in the next decade. As often happens, as the coasts go, so goes the rest of the country. This may be a bellwether for the changes that we might see around the country. Many inner cities have an abundance of empty office buildings. In a change from tradition, where building owners would wait out the market, many are seeing the shifts in office usage as long-term or permanent. What are your thoughts? Will it become a national trend to convert commercial real estate to residential? https://lnkd.in/gyzxmHCS #CRE #officebuildings #conversion #residential #WFH

18

3 Comments

Ruth in the New York Times Discussing Hudson Yards and the NYC Office Market. I was pleased to be quoted in an excellent article in the New York Times by Matthew Haag discussing the extraordinary success of the Hudson Yards development on the far west side of Manhattan. Five years on, offices at the complex are over 90% leased with some buildings completely occupied. A link to the article is below. However, the cup is not completely full for New York City as the piece correctly points out the bizarre juxtaposition between Hudson Yards and other top buildings for which there is tremendous demand, and the lesser Class B and C buildings which are struggling to attract tenants. Indeed, this bifurcated market is more stratified than ever as remote work continues to take a bite out of the Big Apple’s real estate industry with approximately 20% office vacancy rates in Manhattan.   This is not a surprise as NYC real estate is somewhat a zero-sum game because the tenants at Hudson Yards all come from somewhere else. Accordingly, while the companies Hudson Yards has attracted are adding approximately $300 million in tax revenues to the municipal coffers, there is also a downside. The piece highlights Worldwide Plaza on Eighth Avenue between 49th and 50th Streets, which has been rocked by the departure of the venerable law firm Cravath, Swaine & Moore to Hudson Yards, as a stark example of what can happen to other landlords. As a result of the Cravath move and the possibility other key tenants will leave when their leases expire, one analyst estimated in Crain’s New York that the value of Worldwide Plaza has dropped by $500 million to $1.2 billion. That is an extreme case, but this kind of tenant poaching has left its mark all over Manhattan.   I discussed this good news-bad news tale and what it means to tenants in dollars and cents (and common sense) terms in the Times as follows:   Ruth Colp-Haber, chief executive of Wharton Property Advisors, a real estate brokerage, said Hudson Yards illustrated the growing divide between the top office towers, known as trophy buildings, and the rest. In Hudson Yards, asking rents can start in the low $100s per square foot per year and skyrocket; the Manhattan average is around $70.   “The majority of tenants cannot afford half this rent,” Ms. Colp-Haber said. “For the very rich companies, they have no problem with this rent, and they are thrilled to be able to move their companies there.   But let’s accentuate the positive for our clients as there is an office for every tenant’s budget. If you want a first-class top-of-the-line office, there’s still plenty of space available. On the other hand, there are also lots of tremendous bargains that offer excellent value at the $70 per square foot average or less that abound and astound. The choices are yours. https://lnkd.in/eTyhjCHF

12

1 Comment

Nadeem Meghji, global co-head of Blackstone Real Estate, recently said in a WSJ article that the current market is comparable to late 2009 and 2010 when most of the news in commercial real estate was awful. “That was the opportune time for us to be doubling down,” he said. It's tough to be greedy when others are fearful. A few things give us hope: 1. Wage growth is outpacing rent growth. So much so that all of the inflationary rent increases may be wiped out soon, from a % of income standpoint. 2. The historic supply surge is peaking and rents should be leveling off. 3. With interest rates high, construction costs up, and rents not high enough, there's going to be a real lack of supply in 2026 and beyond. This sets the table for an apartment comeback.

3

2 Comments

The #CRE Conundrum 🤪 While the CRE industry is challenged in general, which classes are the “lesser of the evils” is the question as it pertains to markets of interest🤔 . Industrial and retail properties were resilient and will see higher allocations, while office and multifamily face challenges. #economy #marketinsights #retail

1

New construction and highly amenitized properties are leading the pack and remain most desirable by many firms. Companies are seeking modern and state-of-the-art office spaces that cater to their employees' needs. It's no surprise that these spaces are in high demand in the #NYCRealEstate market. #OfficeSpace #CommercialRealEstate #highendoffice

12

In The New York Commercial Real Estate World, 421-a = 485-x! This 421-a replacement was fiercely fought over for a long time, and debate will continue over whether this new tax break for multifamily developers will have the intended results. Those results? More housing supply with current supply at 50-year lows! Interest rates will play a major part in any deluge of new projects, but the passing of 485-x is a start. Depending on the deal structure, developers will get tax breaks spread over 40 years in exchange for some of the following... From the article at Gothamist 'NY finally has a housing deal. Will it work?', written by David F. Brand and Jon Campbell... '...The latest iteration, now known as 485-x, will generally require participating developers to make a quarter of the apartments in their projects affordable to individuals with average earnings of no more than $80,000 a year or families of three earning around $112,000 annually. It’s a significant drop from the last tax break, which allowed developers to create “affordable” units priced at higher income tranches many New Yorkers could never touch...' _____________________________________________ If You Are Buying Commercial Or Residential Property In New York State, You MUST Protect It…That's Where Title Insurance And Due Diligence Comes In! Do Some Research Concerning The Title Insurance Provider That Will Be Used For Your Real Estate Purchase In New York! Watch ‘If You’re A Homebuyer In New York You MUST Protect It…That's Where Title Insurance And Due Diligence Comes In!' here https://lnkd.in/eME5S_3u. And remember that it’s your RIGHT to choose the title company you would like to use! Hallmark Abstract Service...You Buy Real Estate, We Protect It! #multifamily #taxbreaks #affordablehousing #nycrealestate #contruction #apartmentinvesting #CRE #nyc #485x #421a

4

Slowing #industrial construction activity will bring supply/demand back into balance in #SouthFlorida by 2025. In our latest article, CoStar Group data and expert commentary reinforce this view of a market recovery ahead. CoStar Group subscribers can click the link to find out more! #CRE #miamidadecounty #browardcounty #palmbeachcounty

8

During my final semester at NYU, I had taken my final mandated RE course being Real Estate Senior Project through Professor Jerrod Delaine’s guidance and support. The purpose behind each individual student's project was unique; we were to select a location in NYC of our liking, narrow down a neighborhood and select a site, and our job was to develop or redevelop the site into our desired project. My project is based in East Elmhurst, New York located at 81-11 Broadway, 11373. The purpose behind selecting this site was location specific. Many may be aware, but the migrant and homelessness crisis in New York is once again on the significant rise. With high housing demand and low housing supply, the question raises where do you keep so many people in the city? Elmhurst is a neighborhood that has had a recent historical demographic of majority immigrant populations, primarily Asian and Hispanic households. The incentive of this project is to target communities in the neighborhood that need assistance through the housing shortage. Thank you Professor Jerrod Delaine for helping me all semester in brainstorming ideas for this vacant site that will be redeveloped into a 52 unit Condominium Apartment complex. While the teaching goal behind the project was to use the past 4 years of knowledge and to apply it through this project, I learned how to really apply and reapply my prior knowledge in a collective way that I am so thankful for. There is no limit to how much you could learn and how you apply that knowledge. #NYU #Senior #seniorproject #realestate

32

2 Comments

Here is why companies are sending employees back to the office: This 60 MINUTES video shares great insight on what is happening to office buildings in New York City. Empty office buildings contribute to a factor called the ‘Urban Doom Loop’ where empty office buildings are causing decreased property values and potential mortgage defaults which leads to decreased property tax assessments. This leads to a lower tax revenue for cities and in turn causes lower budgets for schools, police, government, city/urban planning etc. Then those employees working from home experience a lesser quality of life and chose to leave the city for cheaper housing and a better quality of life. Which leads to retail businesses closing. New York City has lost close to 1M people since 2020. Thoughts? https://lnkd.in/dNwA2BAh

6

Talk about a major deal! Blackstone just flipped a massive 1.2M SF industrial portfolio to Terreno Realty Corporation for a whopping $346.5 million! This portfolio was no small fry - it consisted of 21 prime lots totaling $246M in price. But get this - Blackstone snagged these lots just 5 years ago for a mere $130M! Talk about a prime investment payoff! “Logistics has been a high-conviction theme for us for well over a decade, and this transaction illustrates the continued strength we see today,” David Levine, senior managing director of Blackstone Real Estate, said in a statement. “We are pleased to deliver this outcome for our investors and remain big believers in the sector as illustrated by our $175 billion global logistics portfolio.” Source: Commercial Observer __________ SRS Industrial Vice President: Nate Niehuus #SRSIndustrial #SRS #SRSRealEstatePartners #CRE #Industrial #InTheNews #Texas #Austin #Logistics

25

Earlier this week, the SRS Real Estate Partners team attended GlobeSt.com Net Lease Spring conference in #NYC. Britt Raymond moderated the “Developers Spotlight” panel and did a great job! Summary below prepared alongside Richard Dorfman and Winston Guest, CCIM. Market Sentiment – US Economy continues to be global leader. Consumers continue to spend despite high interest rates. Excess savings have been exhausted from early pandemic era, so there’s an increase in credit card debt. Some CC delinquencies but still historically low and can sustain if labor market remains tight. Economy is strong and being supported by this spending, which also happens to fuel inflation. Current interest rate environment should be considered a new normal. Possibly 25-50bps of cuts this year but we’ll stabilize around +/- 4% treasuries and 6%+ interest rates unless new/large global events shake us up again.    Retail – Tenants are still seeing revenue and continue to sign/extend leases which is keeping vacancy low. ~50% decline in transaction volume among brokerages. Reports of more BOVs but less transactions. Supply is piling up (+10%) and there’s an abundance of capital in the market. Cap rates have risen for 8th quarter to levels not seen since 2014. Instead of FOMO, there’s Fear of Acting First. Investors are afraid to be the first ones to buy and look bad in 2 years if cap rates expand more (catching a falling knife). But there is fatigue setting in, capital needs to deploy and investors can only sit on the sidelines for so long. Competition among REITs is heating up too. Lots of Sale leaseback work and M&A activity. Expectations of increased activity towards end of this year. Will also require sellers to pick up their price discovery and meet the market.    Industrial – Tenant credit remains key for industrial. Capital is chasing non-credit supply with higher yields. IG credit/lower cap deals are taking longer to execute. Industrial can be more flexible with usage and backfilling so more focus on location and cost basis. Different dynamic than other sectors of the industry.   Office – Distress across sector but can find bright spots in sub-markets. NY rebound 80-85% while Boston and LA around 30% of pre-pandemic levels. Some buildings are maintaining 100% occupancy while other languish. Can be attributed to newer buildings with more amenities in districts that have more to offer. Office parks are declining while live/work communities that mix retail, office, and residential thrive. Continued in the comments.... #netlease #NNN #retail #industrial #office #debt #equity #broker #SRS #globest #SRS #advisor #realestate #CRE #commercial #investments

9

3 Comments

Here are the development project types that are trending today. I.e. here is where we (RD Advisors) are seeing the most demand in our home market of Boston: - Pre-Development loans for larger projects (mid-scale 10-100 unit developments with approvals however need not fully permitted so one step before construction loans) - ⁠Office to Resi conversions: Providing capital to acquire the ‘bricks’ so the developer can complete process with the City.  - ⁠Suburban residential housing in good school districts. This market is still on fire (hot hot) with very little supply and substantial demand. Sale prices under $2m for renovated projects in the best suburbs feel rare.  - ⁠Condo projects still have demand however the pressure is off as rates taking a bit out of first time buyer market. (That said there is there is demand, and not that much supply).  - ⁠High End Residential Condo is mixed - the best projects are selling out - however projects that missed the mark on design and specs are slowing down, we’re not involved in this sector in any meaningful way however it’s interesting to watch.  - ⁠New rental projects barely pencil. Therefore very little new supply coming: The result is that it’s pushing up rents on existing rentals Where are the developers out there seeing the most substantial demand? #BostonRealEstate #RealEstateDevelopment #RealEstateInvestment #Boston Marc Savatsky, Tom Colleran, J. Peter Vanko, Adam Dunn, John F. Fish, Sean Rose Scott Emrich Talia Cannistra, AIA Paul Passacantilli Chris Fitzpatrick Tyler Winder Nick Schiffer 🔨 Evan Smith

48

12 Comments

🔥 Today's guest is none other than Andrew Reichert, the CEO and Founder of Birgo, a prominent private equity real estate firm based right here in Pittsburgh. With a staggering $312 million in assets under management spanning over 3,400 multifamily units, Andrew is a titan in the real estate investment arena. 👉 Throughout our conversation, Andrew delves into his entrepreneurial journey, having founded four companies and contributed to numerous startups. We explore Birgo's strategies for raising capital, purchasing, and effectively managing multifamily residential real estate, shedding light on key market insights and investment strategies. 👀Watch this episode on YouTube here: https://lnkd.in/eY2fVtjM 👂Listen to the episode on Spotify: https://lnkd.in/ece92dwA 👂Listen to the episode on Apple Podcast and give us a rating: https://lnkd.in/eaxvzkNp 👉 Visit www.pantheoninvest.com to find more insightful information and powerful investing tools! #realestatepodcast #realestate #podcast #realestateinvesting #realestateinvestor #makemoney #multifamily #entrepreneur #realestatetips #cashflow #biggerpockets #realestatecoach #realestatemarketing #realestatelife #realestateadvice #podcasts #selfstorage #entrepreneurtips #wealth #realestategoals #selfstorageinvesting #realestateinvestors #investing #podcaster #makemoney #finance #wealthstrategysecrets #davewolcott

2

My stance has been unwavering on whether the apartment supply in Philadelphia will be absorbed: "All these units will fill up." After thinking about myself and the majority of my friends as a personal case study, I've realized there's a trend for how people live in Philly as they age. Here's what I've deduced the flow looks like: 1) In College/Freshly graduated -> University City / West Philly Home to Penn & Drexel, the young educated population lives close to or on campus in apartments such as The Radian, Evo, 3720 Chestnut etc. 2) Young Professional -> Center City The world is now their oyster, they want to be close to work and in the heart of the nightlife. Density and a little bit of chaos is fine, they have a high tolerance for it. How close can I physically live to McGillins? 3) Aging Professional / Young Family -> Riverwards Migration The density of the city is not ideal for a young family, and the North Philly submarkets of Northern Liberties and Fishtown provide some relief from the hustle and bustle while staying within the greater center city limits, still having access to some incredible restaurants and nightlife, and easier access to the Northeast suburbs for either work or Mom & Dad as a babysitter! 4) Established Family -> Suburban Migration to the Northeast, Mainline, South Jersey School Districts, health systems, and other family needs now in full consideration. Things the city just can't offer. Time to settle in to a long term home. 5) Empty Nester -> Back to Center City or North Philly in the highest end apartments The kids are gone, mowing that big lawn and keeping the big house clean is cumbersome, lets sell the house and move back to the city, rent in one of these beautiful new S-Class Apartment buildings and enjoy everything the city has to offer again while the kids move into Phase 1) themselves! There's a reason why a lot of the supply is proximate to this path. The Philadelphia Apartment Circle of Life! #Philadelphia #philadelphiarealestate #philadelphiamultifamily #multifamily #apartments #philadelphiaapartments #cre #philadelphiacommercialrealestate #multifamilyinvesting #apartmentinvesting #cushwake

19

3 Comments