By Sally Goldenberg and Khorri Atkinson | 05/17/2017 09:56 AM EDT
PRICE BOOM — "NYC is now the world's most expensive construction market," by New York Post's Lois Weiss: "It's official: New York is now the most expensive city in the world to build stuff. The Big Apple has unseated Zurich, Switzerland, as the world's priciest construction market, according to a closely watched survey — boosted in part by the city's sky-high construction-worker wages, which average $100 an hour. Average total expenditures in New York have hit $354 per foot — a staggering stat that helps explain, for example, why it will take more than $3 billion to build the 57-story skyscraper at One Vanderbilt that's slated for completion in 2020. San Francisco comes in at No. 2 worldwide at $330 per foot, nudging Zurich to No. 3, according to the 2017 International Construction Market Survey by Turner & Townsend, which blames the strength of the US dollar and labor rates for jacking up US price tags." Read the story here.
BLACK CLOUD — "Blackstone Sees End of Property's 'Great Run' as Returns Fade," by Bloomberg's Joyce Koh and Pooja Thakur Mahrotri: "Blackstone Group LP, the world's biggest private equity fund, told investors to dial back their expectations for property returns as the 'great run' of the past five years becomes harder to replicate. Investors should 'calibrate' their expectations,' Chris Heady, Asia Pacific chairman and head of Asian real estate, told a conference in Singapore on Tuesday. 'They're probably going to be lower over the next five years.' At the same event, Singapore's sovereign fund GIC Pte, an investor in world real estate from student housing to logistics, said that elevated prices were constraining its investment as it sold assets that had gained in value. Investors worldwide struggled to find high returns in the wake of the global financial crisis amid interest rates languishing near record lows and bouts of elevated volatility in the stock and bond markets. While property offered an alternative, higher real-estate prices in places such as Hong Kong, London and New York dim the allure." Read the story here.
NEW CYCLE — "Citi Bike may expand to all five boroughs," by POLITICO New York's Dana Rubinstein: "The company that operates Citi Bike is in discussions with Mayor Bill de Blasio's administration to expand to Staten Island and the Bronx, in exchange for, among other things, a measure of exclusivity on city streets, according to three well-informed sources. The proposal from Motivate — the company that operates Citi Bike — would add 6,000 new bikes to the 12,000 that are already scheduled to be in place by the end of the year. Two-thirds of those new bikes would go to neighborhoods that aren't already scheduled to have it, as in the currently bike-bereft Bronx and Staten Island. According to the Motivate proposal now under discussion, the de Blasio administration would help underwrite the expansion by no longer requiring Motivate to pay certain fees, including reimbursements for the revenue the city loses by turning over parking spaces to bike docks." Read the story here.
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FAMILY AFFAIR — "Real-Estate Empire Survives Brutal Family Battle," by Wall Street Journal's Peter Grant: "A prominent New York real-estate family that controls a multibillion-dollar empire of office, residential and retail properties has settled a bitter internal battle after more than eight years of fighting and tens of millions of dollars in legal costs, according to legal documents and people familiar with the matter." Read the story here.
BIG DEAL — "GreenOak buys Thor out of UWS rentals in $190M deal," by The Real Deal's Mark Maurer: "GreenOak Real Estate bought Joseph Sitt's Thor Equities out of its interest in three Upper West Side rental properties in a deal valuing them at a combined $190 million, sources told The Real Deal." Read the story here.
— "2 Herald Square nearing $350M deal for leasehold on property," by New York Post's Lois Weiss: "A white knight is swooping in to rescue 2 Herald Sq. Morris Bailey and his son-in-law Joseph Jerome of JEMB Realty are close to securing a $350 million deal for the leasehold on the property at the northeast corner of Sixth Avenue and West 34th Street[.]" Read the story here.
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SHELTER SKELTER — "Stresses of Shelter Life Rip Homeless Families Apart, Study Finds," by DNAinfo's Amy Zimmer: "A record 23,000 children — nearly half of whom are under 6 — are now living in the city's shelter system, and more often than not, their families are placed in shelters far from their communities, according to a new report from the Center for New York City Affairs at the New School." Read the story here.
— "Family Shelter Opens on Rogers Avenue Amid Opposition From Locals," by DNAinfo's Rachel Holliday Smith: "Despite opposition from neighbors preparing to file a lawsuit, homeless families have already started moving into a new shelter on Rogers Avenue in Crown Heights, city officials said Tuesday." Read the story here.
TRUMP CHANGE — "25 Million Americans Could Find Mortgage Tax Break Useless Under Trump's Plan," by Bloomberg's Prashant Gopal and Joe Light: "U.S. Treasury Secretary Steven Mnuchin has taken pains to stress that the Trump administration isn't out to kill Americans' beloved mortgage-interest tax deduction -- but a side effect of the plan could turn it into a perk for only the wealthy." Read the story here.
OFFLOADING — "Silvershore now trying to sell 57 buildings," by The Real Deal's Mark Maurer: "An even larger chunk of Silvershore Properties' New York City real estate holdings is up for grabs. The NoMad-based landlord had been looking to sell 44 of its nearly 100 rental buildings across the city in March. The firm has now added more properties to the portfolio, bringing the total to 57 buildings spanning 430,615 square feet, according to Cushman & Wakefield, which officially launched the marketing effort this week." Read the story here.
ON THE MENU — "Return of the Campbell, an Ornate Grand Central Bar," by New York Times' Robert Simonson: "The Campbell Apartment, a soaring, old-fashioned cocktail bar tucked away in an ornate corner of Grand Central Terminal, closed in July to the dismay of many commuters. It will reopen to the public on Wednesday — in triplicate." Read the story here.
MARKET WATCH — "IPO Fever? Not quite," by The Real Deal's E.B. Solomont: "Two years after disclosing plans to go public, [Clipper Equity] debuted on the exchange that chilly February morning under the ticker CLPR and at $13.50 a share. So far, Clipper's calculus appears to have paid off: The company's IPO generated $86 million — more than the $78 million Clipper had projected in regulatory filings. At the time, the move was in sync with predictions that 2017 would see a burst of IPO activity in the real estate sector.
"But those predictions were fueled, at least partly, by the fact that global IPO activity plummeted last year to its lowest levels since the financial crisis. That left many to believe the market was due for a bumper crop of IPOs because of pent-up investment demand. In 2016, deal volume was down 36 percent to 112 IPOs, and the amount of capital raised sank 37 percent to $21.3 billion, according to research from accounting giant Ernst & Young. Despite the predictions that 2017 would represent a turnaround, activity has been lukewarm— at least so far." Read the story here.
SHIFTING LANDSCAPE— "Schiller's Liquor Bar to Close Due to Rent Hike, Management Says," by DNAinfo's Allegra Hobbs: "Schiller's Liquor Bar will close by the end of August due to an unaffordable rent hike, according to restaurant management.'' Read the story here.
— "Banned expeditor lobs federal suit accusing DOB of violating speech rights," by The Real Deal's Kathryn Brenzel
— "SKA Marin scores $60M loan to build East Harlem affordable housing project," by The Real Deal's Miriam Hall
— "$265M Loan on Stamford Office Property Hits Special Servicing," by Commercial Observer's Cathy Cunningham
— "Flushing's landmarked RKO Keith's Theater will soon be engulfed by glassy condo," by Curbed's Zoe Rosenberg and Tanay Warerkar
— "Massey, saying he's 'exactly' on plan, spent $1M and raised half that in latest filing period," by POLITICO New York's Azi Paybarah
— "A Brooklyn development that couldn't possibly work somehow did," by IMPAACT Brooklyn's Bernell Grier and Dunn Development Corp.'s Martin Dunn via Crain's
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