On Friday, the presidential race finally turned to real estate.
Vice President Harris presented an economic plan in Raleigh, North Carolina, which included a proposal to create three million new housing units during her first four years in office.
That’s a lot of living space!
Harris said she would accomplish this with a series of tax incentives for builders focused on first-time home buyers, as well as a $40 billion fund for local governments to develop their own specialized solutions.
But the Democratic candidate also took aim at exploding rents.
“Some commercial landlords work together to set artificially high rents, often using algorithms in pricing software to do so,” Harris said. said in her remarks“I will fight for a law that puts an end to these practices.”
We can understand why this issue would play a prominent role in any national political campaign. Housing is one of the most important issues for many Americans.”“The biggest economic pain point and pressure point is housing affordability,” New York Representative Pat Ryan told Reuters in July, shortly after a Reuters/Ipsos poll This shows that the housing market is the second biggest economic concern for voters after wage stagnation and inflation.
Developers also perceive these signals.
Only last week, RXR began exploring whether to convert the 1.1 million square meter office tower they own jointly with SL Green (SLG) in the heart of Times Square — 5 Times Square — into residential construction. (Speaking of RXR, you should definitely check out this story about how they have quietly raised capital for projects that need money. And speaking of Times Square, not everything is going great for every building in that particular part of Midtown.)
Plus, GFP Real Estate and TPG Real Estate submitted their plans to the city to convert 222 Broadway into 798 apartments.
Hopefully there will be more living space thanks to the rezoning plan The City Council last Thursday unanimously approved a 46-block area around four planned MetroNorth stations in the East Bronx, which could pave the way for 7,000 new housing units, according to City Council Speaker Adrienne Adams.
And while New York often suffers the most from housing shortages, this is hardly just a problem in Gotham. Last week, Related California his proposal for a $3 billion, 3,750-unit mixed-use project in Santa Ana to that city’s Planning Commission. The project would also include a 250-room hotel, 200 senior housing units and another 350,000 square feet of commercial space.
Living… but different
Of course, multifamily housing and affordable housing are not the same as condos. And for a long time, it seemed as though the condo market—especially high-end luxury housing—was going strong. (At least in Manhattan.)
But right now, luxury condos may have the opposite problem: there is too much supply.
“If you just look at pure supply and demand, the market for three- and four-bedroom apartments, there is currently a little more supply than demand is absorbing,” said Steven Kliegerman of Brown Harris Stevens in this week’s sit-down.
However, Kliegerman was quick to add: “I think we will see over the next few years that luxury products in very good locations in buildings with a boutique count of less than 50 units will continue to sell very well, because the luxury buyer loves anonymity.”
In fact, as Kliegerman also notes in the interview, luxury condos still attract foreign buyers to New York (especially from Asia) – and actually from New York. Even if it is not particularly popular, the so-called Golden Visa In many countries, the path to citizenship is paved with an expensive condominium.
It should also be noted that the hunger for conversions we mentioned earlier exists in office-to-condominiums. For example, last week we learned that Isaac Tshuva’s El-Ad Group had bought 419 Park Avenue South for $72.1 million with plans to convert it into condominiums.
Nevertheless, one must assume that any developer dealing with condominiums has realistic ideas about the oversupply in the market. Some condominiums are designed with a built-in fail-safe: a portion of the units will reserved as Airbnb accommodations – and not just as a last resort, but right from the start.
“We always thought the rental base was the first phase (of Airbnb’s plans),” said Jesse Stein of Airbnb’s rental division. “But ultimately, the idea of renting out your home should be pervasive in every real estate asset class, from multifamily to single-family to condominiums and so on and so forth.”
Well, who will pay for it?
Despite high demand, financing multifamily housing remains unbearably difficult, and for pretty good reasons.
Just last week, CRED iQ reported that the Multi-family house emergency rate increased 100 basis points in July. It rose to 8.4 percent, up from 2.6 percent just seven months ago. (Woof.) That should understandably make lenders suspicious.
However, the right project will continue to be funded.
For example, the New Empire Corporation achieved 72 million US dollars construction financing for the 117-unit condominium they are planning in Long Island City, Queens.
Invesca Development Group’s 330-unit PIXL Plantation project in Plantation, Florida, won $94 million in construction loans from Madison Realty Capital and Taconic Capital Advisors.
NRP Group swindled $94.3 million in refinance its debts about The Rylan (a 390-unit apartment complex in Tysons Corner, Virginia) from Keybank Real Estate Capital.
Senior living in Atria collected 52 million dollarsadjustable rate, first lien mortgage loan for its 168-unit Atria Newport Beach property in Newport Beach, California.
Urban Homestead Assistance Board and Workforce Housing Group refinanced five of their affordable properties in Far Rockaway, Queens, for $39 million thanks to Citizens Bank.
Finally, condo financing received its biggest boost yet last week when Witkoff, Access Industries and Monroe Capital secured a whopping $1.2 billion from JP Morgan Chase and TYKO Capital to refinance two luxury towers off the High Line in Manhattan.
All of this should alleviate some of the concerns floating around in the public mind. Because there is no better place to be than your own home – assuming someone can build it.
Until next week!
