Things are looking up Uptown.

Its common knowledge that New York City real estate is reawakening.  But during this first month of the lucky 13^th year of the 21^st century, several unlikely geographies - the neighborhoods above 96^th street – are apparently leading the march to prosperity. And multi-family investment properties are providing the lions share of the momentum.

The reason? It’s getting way too hot in Midtown.

With Manhattan rents skyrocketing and capital gains taxes poised to rise, established neighborhoods are short on inventory, and long on price. Many so-called ‘ordinary’ New Yorkers can’t even consider Midtown, Chelsea, Gramercy, the Village – or any well-heeled areas.

But with affordable (at least by New York City standards) dwellings in short supply, the gentrifying areas of East Harlem, Washington Heights, and Harlem are looking better than ever. They offer something unique and increasingly valuable: Manhattan without the price tag. And the trend will only accelerate. Northern Manhattan investment property sales soared by 58 per cent year-over-year during 2012, easily exceeding the $1 billion dollar mark. The previous year’s sales didn’t hit $700 million.

Uptown is unique in another respect – there’s room for development. The vacant lots and tumble-down properties that were considered eyesores just a few years ago have become the apple of many an investor’s eyes. Just a few of many recent examples: since New Year’s alone, an undeveloped on Third Avenue in East Harlem has fetched close to four million dollars, and two undeveloped Washington Heights parcels on 163^rd street have been bundled into a $2.5 million dollar deal.

We mentioned in an earlier blog that multi-family real estate now ranks is one of the wisest investment options around. Add in this important update: Trading up – Uptown, that is – may well be the best strategy of all.

Thirteen – and counting on renewed good luck

Happy 2013.  It promises to be a lucky year for the New York City real estate industry.

With the threatened 2012 Armageddon safety behind us, the metro area market is reawakening in a quadruplet of sectors - commercial sales, commercial leases, residential sales, and residential rentals.

Credit the pent-up demand; the growing housing shortage; a small – but appreciable – rise in employment; and some exciting new local projects. Whatever the reasons, there’s an altogether new buzz noted in a spate of recent publications.

To get specific:

·        Commercial sales are so solid that a recent study by Pricewaterhouse Cooper US and the Urban Land Institute report ranked New York City as the second most exciting real estate market in the country for this year (after San Francisco). The combined lure of the city’s technology hub, two new subway lines, and many desirable neighborhoods are sparking interest – and spurring development in both the city and the boroughs. 

·        Commercial leases benefit from the same factors, with the PWC and ULI study predicting that NYC and the country will enjoy “noticeably better prospects as compared with last year.”

In a dramatic example, just days ago 11 Madison Ave., which had been   offered for $1.5 billion, was taken off the market by developers who realized that had more to gain by maintaining their lease with Credit Suisse than by selling the structure. As described in the current issue of Crains, the deal show just how valuable prime commercial space has become.  

·        Residential sales are on the upswing, according to Forbes magazine.  The reluctant buyers and sellers of recent years are re-emerging, to find mortgages that remain at historically low interest rates. Yes, financing is still tougher to get than before the bust, but banks are loosening up.

Meanwhile, the pent-up demand for housing is spurring new construction, certain to create a bounty of new jobs – further enhancing the economy.

In this transitional real estate marketplace, cash deals fare the best. But these shoppers, many of them foreign buyers lured by the relative stability of US investments, will further ignite the market. Meanwhile, areas impacted by Sandy now offer uncommon value to buyers brave enough to venture downtown.

·        Residential rentals may well be the pot of gold at the end of this rainbow. As Manhattan rents, fueled by the many New York City residents still avoiding property ownership, may well increase by five to 10 per cent. That’s high enough to convince many condo and coop developers to convert back to rentals. Hot neighborhoods from Greenpoint in Brooklyn to downtown Manhattan will benefit from the new crop of apartments.

Every silver lining has a dark cloud.

This one has to do with those rapidly rising rents, which are threatening the affordability of literally all of Manhattan and many of the boroughs.

But the flipside is that owning rental property is more attractive than it’s ever been.  Starter apartment are in such short supply that they’re snapped up quickly, making this perhaps the most auspicious time ever to acquire a multifamily or mixed-use building. What could be better than combining home ownership with a healthy investment return.

Thirteen never looked so good!

Taking the multifamily plunge: the water’s fine!

With all the talk of a fiscal cliff it’s easy to forget another precarious situation that wrecked havoc in recent years: the investment gap. Financial markets rocked, the stock market roiled, and even ‘safe’ instruments became dangerously unpredictable, while more ‘creative’ funds proved to be totally worthless.

 

Interestingly, there is one time-worn investment that has remained stolid and strong. It’s multifamily property. 

Even in troubled times, everybody needs a place to live. And with the uncertain housing market convincing more families to rent, multifamily property is proving to be a powerful renewable investment.

 

 

Here’s why:

 

• Those who sat out the housing market have now accumulated cash. They have the means to acquire property and no end of reasonably-priced inventory available. Early movers can avoid the rush, and still negotiate great deals. But this could be a limited time offer.
• Having weathered the financial storm, NYC multifamily real estate offers an unusually desirable proposition; an ongoing and increasing rate of return. Not only does an apartment ownership bring in a reliable monthly income but it is one of the few investments that can actually increase in value, given even the smallest improvements. Stocks and bonds can’t be enhanced, they don’t amortize, and the investment has no control over their growth potential.
• Having been ultra-conservative in their lending policies to date, financial institutions are itching to reenter the mortgage market. Banks are becoming more confident about the economy, and are eager to serve qualified real estate buyers.
• Multifamily building ownership allows an investor to enter the real-estate field while getting paid; it’s the ultimate ‘on-the-job training’.
• Over the sweep of time, property value has climbed an average six per cent a year, while many stocks – and the companies they belong to – have lost value or vanished entirely. Long story short, buildings endure.

 

These arguments represent the very tip of a large iceberg; the many reasons multifamily property is a wise investment. My advice is to take the plunge now. Icebergs aside, the water is amazingly warm and clear!

 

 

 

 

 

 

 

Houston, TX is coolest according to Forbes. What???

For most of the eight million people in the New York City metropolitan area, the Big Apple is, always will be the coolest city around. Sadly, Forbes Magazine and Sperlings Best places didn’t get that message.

 

In a recent survey of cool cities, they actually designated Houston the coolest city in the USA. 

 

The Texas city ranked far, far ahead of New York City, which only nabbed number ten, and outperformed Chicago, San Francisco, Washington, DC, and all the happening places in the Pacific Northwest. They just barely bested several other Texas cities.  

When the number-crunchers of  Sperlings, a livability rankings organization based in Portland, Oregon, were done, Houston had outperformed every other place in a weighted average that considered job growth, entertainment options, number of recreation and food venues, and green spaces.  

Hey. Hold on just a Texas minute.  

First of all, NYC and Houston are quite similar in some ways.  The Texas city’s median age is 33 (drawing from the same Sperlings statistics), while ours is 37 – hardly geriatric. True, our largest single population group has a few years’ jump on theirs. Our biggest demographic includes people from 35 to 44 years old, while their largest slice of the population pie is made up of individuals between 25 and 34. But that’s hardly revolutionary.

Houston is unquestionably getting fatter, happier, and more prosperous every year. The job growth, a booming oil and gas industry, and a wave of eager young professionals are injecting new life into the city. But nothing can touch the sheer opportunity, entertainment potential, cultural significance, and intellectual stimulation of a New York City. With four times as many people as Houston, and the virtue of a long and storied history, we have a uniquely inexhaustible supply of things to do, see, and talk about.  And the best may be yet to come.

Thanks to some amazing recent developments, New York City is poised to take imagination and entrepreneurship to an entirely new level. Our very own Silicon Alley, located between Broadway and Fifth Avenue between Union Square and Madison Square Park, is catapulting the city right into the new century – and sprouting new ‘mini’ Silicon Alleys in Queens and Brooklyn. New public-private partnerships are giving web start-ups and genuinely running start. And those exciting new businesses are attracting new professionals, new funding, new opportunity, and the new housing that’ll keep our innovators comfy, cosy, and close at hand. 

Houston may have its 2.6 job market growth rate, but New York posted a 28.7 per cent increase in information technology jobs over the last five years; the stuff that cool is built on. From Shelby.tv, to Tumblr, ETSY, Bit.ly, Foursquare, Socialflow, Food52, and Reddit these places are not only more sustainable than old-and-gas related multinationals, they are downright chill.  

So let’s be gracious and congratulate the Bayou City for topping the Forbes list knowing that New York City, the place that gave cool its cache, won’t be cooling its own heels for too long.

What makes world's ugliest buildings ugly

The eye of the beholder 

The Guggenheim, the Chrysler building, the Empire State buildings are among countless New York City structures celebrated for their grace, style, and distinction.

But for every iconic structure there are just as many duds. 

Ten of the most unfortunate constructions were recently listed in a Reuter’s news ranking of the world’s ugliest buildings. Among them are several iconic American buildings (including, notably, the Rock and Roll Hall of Fame),

a smattering of Asian sites, and a single location each in Australia and the UK. They range from the downright outrageous (Australia’s crazy-quilt Pixel building)

 to the terrifyingly cold (The Royal National Theatre in London). With a thin line dividing the campy from the simply catastrophic, architecture often blame a combination of unfortunate factors for the worst eyesores: excess, ego, and exceedingly bad judgment. 

Reuters proclaims the J. Edgar Hoover Building (FBI HQ) in Washington, D.C. as the worst among them.

The poured-concrete stalwart was imagined as a powerful structure, meant to appear as solid as the organization it housed. Since then, most of DC – including the majority of its own occupants- has deemed it destruction-worthy. In fact, the building’s demise is likely if and when the FBI relocates to another headquarters. 

Function, structure, and beauty 

While ugly comes in many and interesting varieties, though, truly exemplary architecture incorporates three essential qualities: function, structure, and beauty. 

Function describes the building’s ability to meet its original purpose (if it’s an airport terminal, for example, does it truly accommodate the planes and passengers well?) Structure is a matter of sheer physical soundness and durability. Beauty, clearly dependent on the beholder’s eye, is harder to pin down.  

I’ve always loved buildings that endure and delight – like the Chrysler Building. The pre-war skyscraper tastefully incorporates elements from the 1929 Chrysler (the hubcaps and hood ornaments), without veering into the realm of excess. Even today, almost 80 years after its debut, the Chrysler’s shiny Art Deco ornamentation is graceful and inviting rather than gaudy or garish.  

Interestingly, the Reuters list included only one New York City site: Trump Tower at 725 Fifth Avenue.

Once considered the signature building of its time (circa 1983), the Trump is, according to Reuters, “downright dull on the outside, dizzyingly gaudy on the inside,” and “generally only visited by tourists - as it is almost universally avoided by actual New Yorkers”. 

Do tell 

So if we hate the Trump, who do we love? What constitutes well-executed design – and why? And where, among out many streets and avenues, are the real architectural gems lurking? 

Leave us a comment below, and I’ll share some of our discoveries in the weeks ahead. Happy hunting!