Michael Kinsler

Colliers' Manhattan Office Market stats featured in a recent article where Michael Cohen and I spoke about the nearly 7M SF of space removed from the available inventory over the last few years due to planned conversions. If it weren't for these planned conversions, Manhattan's total availability would've been ~100M SF! Please read more about the state of the Manhattan Office Market in the Q3 2024 Colliers report here: https://lnkd.in/dxxCPSEQ #nycofficemarket #colliers #nyceconomy #nycofficeleasing https://lnkd.in/dTpETabT

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TPG and PAG took over Cushman & Wakefield in May 2015 when DTZ, the UK-based real estate services firm the venture acquired in 2014, merged with C&W in a $2B deal. The Ontario Teachers' Pension Plan was also invested in the joint venture, but the pension fund is holding on to its shares in C&W. The merger created a combined company with 250 offices in 50 countries. It went public three years later in August 2018, raising $765M at a valuation of around $3.1B. Cushman & Wakefield has a $2.6B market capitalization, based on Friday’s closing price of $11.72. The stock is down around 38% from when it first went public, but it is up 7.6% year to date and has seen a 20% rally in the last month. Shares were down around 2% early Monday.

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How could you not see this coming? From CRE Daily: NYC Multifamily Permits Hit 10-Year Low in May New Yorkers face a deepening housing crunch with a 1.4% vacancy rate and soaring costs. High borrowing rates, aimed at curbing inflation, are stalling development citywide. Dramatic decline: The number of permits for multifamily buildings in May plummeted to just 36, the lowest monthly count in a decade, excluding the pandemic period of 2020. Last year saw permits for only about 15,500 apartment units, the smallest annual total since 2016, according to the NYC Department of Buildings and Department of City Planning. Affordability crisis: High interest rates and cautious lending have frozen many housing projects, heightening concerns that New York may soon become unaffordable for all but the wealthy. This could further strain NYC’s $315 billion taxable commercial real estate market, which is already under pressure from a post-pandemic shift to remote work and an underfunded public transit system. Ambitious goals: In response, Mayor Eric Adams has set a bold goal of adding 500,000 housing units over the next decade—50,000 units per year. This target is ambitious, given that from 2012 to 2022, the highest number of units approved in any decade was 297,000 under former mayors Bloomberg and de Blasio. In 2023, only about 16,300 units were proposed for perspective. Zoom in: Since 2010, Long Island City has seen the most significant development, adding 18,500 units as it transformed from an industrial area to a bustling residential neighborhood. This surge in housing has attracted more residents, doubling the local population. However, it has also driven up the median asking rent by 56% from April 2010 to April 2024. A possible (but costly) solution: Converting commercial spaces into residential units is one strategy being pushed by city and state officials. Since 2010, nearly 6,000 units have been added in the Financial District. Governor Hochul's housing law offers tax breaks for conversions starting by mid-2031, including affordable units. As of late June, 69 buildings are participating in the city’s program. ➥ THE TAKEAWAY Big picture: The expiration of the 421-a tax exemption in 2022 has stalled development, and its replacement, 485-x, hasn't yet proven effective due to new wage requirements. Experts argue NYC must think bigger and tackle its housing crisis with a multi-faceted approach, including government subsidies, regulatory changes, and diverse housing types, to prevent further displacement.

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https://lnkd.in/eCW4WK3S The headlines keep getting worse for the nontraded REIT sector. There is only so long redemptions can exceed subscriptions before every succeeding decision becomes more unpalatable than the last. However, this article points out #balancesheet issues that my come into play sooner rather than later. It is worth the read. “The slow fundraising and high redemption rates are just part of the problem for these REITs moving forward.” “Many of these nontraded REITs have used floating rate debt which they have hedged with interest rate caps and swaps that could soon expire, and it is more costly to refinance or buy new rate caps as interest rates remain high.” “Additionally, commercial property prices have continued to trend down, reducing their asset values and making it unappealing to sell properties. In April, Green Street's Commercial Property Price Index was down 21% from its March 2022 peak.” REIT Academy & The Executive REIT Masterclass David Auerbach Jonathan Morris Reagan P. Juliana H. Mary Jensen Craig Smith, CFA, FRICS Alex Pettee, CFA Eka Gigauri #reits #commercialrealestate #realestateinvesting #HallKnowsRE

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  The New York Times: Buyers Finding Deep Discounts In the Office Building Market A perfect storm of plunging property values for aging buildings, weak tenant demand coming out of the pandemic and high interest rates for new loans and refinancing has left the $2.4 trillion office building sector wobbling. In New York 1740 Broadway which Blackstone had paid $600 million for ten years earlier just sold for $185 million. “Office vacancies are going to heights we have never seen before,” said Chad Littell, national director of U.S. capital markets analytics at CoStar, a commercial real estate data and research firm. “As vacancies are rising, it’s difficult to get debt for buying or developing an office.” The question is, how can we tell when we are truly at the bottom? I remember back in the 1990’s when the entire savings and loan industry went upside down, and out in my area of the East Bay over 25% of all our office buildings were foreclosed…and there were several where the investor purchased an office complex thinking they had gotten a steal and bargain price, only to lose the investment a few years later in a second foreclosure on the same property when it went to an even lower value. As I have stated repeatedly, we will bounce along the bottom for several years to come and when you see major lenders once again making reasonable loans on office buildings this may be a key sign that we are headed back to normality. #Office; #OfficeBuildings; #foreclosure; #commercialrealestate; #SIOR

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Takeaways from an interview yesterday with SL Green Chief Financial Officer Matt DiLiberto. His perspective on the dynamics of the New York City office leasing market we're definitely interesting and food for thought.Watch this and let me know your thoughts. Savills Savills North America SL Green Realty Corp. Matthew DiLiberto #nycrealestate #officeleasing

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Are we seeing a return to major MSA office districts? Manhattan's "largest office Landlord" SL Green Realty Corp. is probably of the opinion that there is. Shareholders should certainly be impressed by a valuation 24% higher than what was initially projected. Availability rates around Manhattan have dropped to 17.9%, with Tenants favoring Class A buildings over the rest; however, it should be noted that "2/3rds" of Manhattan's total office inventory is considered Class A. What about Phoenix? We still have a Downtown vacancy rate of 22.6%. While there is plenty of product in Downtown and Midtown that could be considered "ideal space", much of the growth is still retained in the suburban markets - where most Class A buildings reside. #officeleasing #tenantrep #nyc #phoenix #ccim https://lnkd.in/gDeUQR6K

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