Rabsky sells Williamsburg apartment building to UDR for $130M

Rabsky sells Williamsburg apartment building to UDR for $130M

Source: TheRealDeal.com

Rabsky sells Williamsburg apartment building to UDR for $130M

Denver-based REIT is buying in NYC at a time when competitors are looking to reduce exposure

A rendering of 395 Leonard Street in Brooklyn and UDR President Jeffrey Davis (Credit: LinkedIn)

The Rabsky Group sold one of its large Williamsburg multifamily buildings for $130 million to Denver-based landlord UDR, which is buying at a time when several large apartment REITs are retreating from the New York market.

UDR, which already owns about half a dozen properties in Manhattan, closed on the 188-unit Leonard Pointe building in North Williamsburg on Wednesday, sources told The Real Deal.

The purchase price of $132.2 million works out to more than $700,000 per unit.

The Colorado-based real estate investment trust, which has a market capitalization of $12.3 billion, made the purchase at time when competitors such as Equity Residential and AvalonBay Communities are limiting their exposure to the New York City market over concerns about a glut of new apartments.

On UDR’s fourth-quarter earnings call Thursday, company chief financial officer Joe Fisher said the firm is taking a long-term view on the New York City market.

“While it has lagged of late from a regular standpoint given the supply picture, we are starting to see that come off. New York will be probably a little bit higher next year in terms of supply, but this is not a one-year trade for us. We are thinking about the next five to 10 years,” he said. “We are looking to get more dollars put to work in that market.”

A representative for Rabsky Group could not be immediately reached for comment. Savills-Studley brokers David Krantz and Paul Leibowitz negotiated the off-market deal on behalf of the buyer. The brokers declined to comment.

Simon Dushinsky’s Rabsky Group developed the seven-story, 140,000-square-foot apartment building at 395 Leonard Street in 2015. The property has a 25-year year 421a tax exemption that fully abates taxes through 2036 before expiring in 2040.

The benefit amount is valued at $18.6 million over the life of the exemption, according to records with the city’s Department of Finance.

Rabsky purchased the site adjacent to the Brooklyn-Queens Expressway a few blocks from Bryant Park in 2012 for $18 million. Dushinsky developed the building – one of at least a dozen properties the company’s developed in North Brooklyn in recent years – with financing from PNC Bank.

Rabsky in 2015 took out the PNC debt and replaced it with a $95 million loan from TD Bank, and earlier this year refinanced property again with an $88.2 million mortgage from Berkadia.

Dushinsky’s firm, which is one of the most prolific developers in Brooklyn, infrequently sells its stabilized properties.

The sale was negotiated at a time when the market still believed that the L Train subway between Brooklyn and Manhattan would be shut down for 18 months starting this spring, before Gov. Andrew Cuomo last month announced a plan to keep the line partially open during repairs.

UDR chief investment officer Harry Alcock said the company underwrote the deal expecting the worst-case scenario for the L.

“Our initial underwriting contemplated the L train stopped entirely,” he said on the company’s earnings call. “Today, we are well aware of the circumstances which should be positive.”

UDR entered the New York market in 2011 with its purchase of the 493-unit 10 Hanover Square in the Financial District for $260.8 million.

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Lichtenstein on Amazon pullout: “Worst day for NYC since 9-11”

Lichtenstein on Amazon pullout: “Worst day for NYC since 9-11”

Source: TheRealDeal.com

Lichtenstein on Amazon pullout: “Worst day for NYC since 9-11”

Developer lambasts politicians who stymied deal for megacomplex

David Lichtenstein and Long Island City

Lightstone Group’s David Lichtenstein said Friday that Amazon’s about-face on its New York megacomplex was the “worst day for NYC since 9-11.”

“Except this time, the terrorists were elected,” the developer added in an email to The Real Deal, in a dig to the politicians who fiercely criticized the tech giant’s deal with the city for the nearly $3 billion in tax breaks and government incentives it came with. (Lichtenstein later emphasized that he was referring only to the financial implications the Amazon pullout will cause.)

On Thursday, Amazon cited pressure from the local politicians as its reason to abandon the deal for the Long Island City campus, which was to bring 25,000 new jobs to New York and would create, by some expectations, $27 billion in tax revenue over a decade.

Since November, Amazon had faced fierce backlash from elected officials, activists and union leaders, who criticized the secretive nature of the negotiations between the company and the city and state, and who argued that the world’s most valuable company did not need to be cajoled with tax breaks to come to New York.

Among the deal’s most vocal critics: State Sen. Michael Gianaris of Queens, who was named to a board that had veto power over the plan; Rep. Alexandria Ocasio-Cortez, whose congressional district borders the one where the complex would rise; and leaders from the Retail, Wholesale and Department Store union.

“A number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward,” Amazon said in a statement Thursday explaining its decision to drop the plans.

Lightstone is a major developer with a $3 billion portfolio across New York, Miami and Los Angeles. In Long Island City, Lightstone owns a 428-unit rental building less than two miles from where Amazon’s campus was set to rise. 

Lichtenstein is among several industry figures who’ve addressed losing out on the Amazon campus, which the real-estate industry felt would be a major boost to both the residential and commercial markets. “The future of the neighborhood is still going to happen,” said Robert Whalen, Halstead’s director of leasing in Long Island City, “but Amazon could’ve accelerated the process.” Dave Maundrell, of Citi Habitats, said that without Amazon, “we’re back to where we were six months ago. The market’s gonna go back down.”

Kathryn Wylde, who leads the pro-business group Partnership for New York City, said that “we competed successfully, made a deal and spent the last three months trashing our new partner.” Seth Pinsky of RXR Realty echoed her sentiments, telling the Wall Street Journal that “for some of the people opposing the project it was kind of a game.”

“They enjoyed being the center of attention and having their statements tweeted and retweeted,” Pinsky added. “But this isn’t a game.”

Correction: An earlier version of this story misidentified Ocasio-Cortez’s district. It borders the one where Amazon’s campus was set to rise.

Update: This story was updated with additional remarks from Lichtenstein.

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Next week: The Real Deal’s inaugural tri-state issue drops online!

Next week: The Real Deal’s inaugural tri-state issue drops online!

Source: TheRealDeal.com

Next week: The Real Deal’s inaugural
tri-state issue drops online!

Become a subscriber to receive TRD’s quarterly issue

February 15, 2019 12:30PM

Not a subscriber? Click here!

The Real Deal’s first-ever tri-state quarterly drops online this Tuesday, bringing readers the biggest real estate news from Long Island and the Hamptons, New Jersey, Westchester and Fairfield counties.

The print edition will be delivered to all subscribers of The Real Deal head of the March magazine.

Features in this issue will include:

– Senior living: How developers are reaping the benefits of building retirement homes and managed care centers
– OZs outside the big city: How brokers, developers and fund managers are trying to capitalize on Opportunity Zones in the suburbs
– Co-working’s evolution in the outer markets, and how shared office space in the suburbs differs from its urban counterpart
– How the rise of e-commerce and New Jersey’s status as a key transit hub is driving a red-hot industrial market
– A look at the biggest home trades to hit the Hamptons last year

Not a subscriber? Get out Print + Digital plan now, which includes the tri-state issues.

The tri-state issues will be published in February, May, August and November of 2019 and 55,000 copies will be distributed across all markets.

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“They know how to reach us.” Rejected Amazon HQ2 suitors may give it another try

“They know how to reach us.” Rejected Amazon HQ2 suitors may give it another try

Source: TheRealDeal.com

“They know how to reach us.” Rejected Amazon HQ2 suitors may give it another try

Chicago, Miami, Newark and Dallas among those willing to restart talks following e-commerce giant’s New York breakup

Top to bottom: Chicago, Miami, Newark, Dallas, and Jeff Bezos recieving phone calls (Credit: Getty Images, Pixabay, and Wikipedia)

What about now?

They may have been rejected once, but they’re not giving up. At least a handful of cities that had been in the running for Amazon’s second headquarters said they would be willing to restart talks after the e-commerce giant’s stunning news it had pulled out of plans for New York City.

Some of those cities that reached the Top 20 but missed out on the big prize — Chicago, Miami, Dallas and Austin among them — responded to the news with a glimmer of hope, while remaining realistic.

“They know how to reach us and they know all that Dallas and our people have to offer,” Dallas Mayor Mike Rawlings said. The mayor said his city will “continue to keep the lines of communication open.” But the canceled plans for New York, he said, “should not be taken as a sign that anything imminent will be happening with Amazon in Dallas.”

Amazon, which cited mounting political opposition as a reason to back out of developing a headquarters in Long Island City, said it has no plans to reopen the HQ2 search “at this time.” Instead, the Seattle-based company will move forward with its second headquarters in Northern Virginia, and an expansion in Nashville, Tennessee. “We will continue to hire and grow across our 17 corporate offices and tech hubs in the U.S. and Canada,” Amazon said on its company blog.

Across the Hudson River, New Jersey Gov. Phil Murphy said he would welcome Amazon. “New Jersey is open for business, and now more than ever, Newark is the clear choice as the next presence for Amazon corporate offices,” he said in a statement. In its ultimately unsuccessful bid, Newark had been considering offering up to $1 billion in tax breaks to help lure Amazon.

In New York, the major issue with was the $3 billion in state and city tax incentives Amazon was set to receive for setting up in Queens.

For Miami-Dade Mayor Carlos Gimenez, there was a lot of confidence and no talk of tax incentives.

The mayor said his county maintains it is the “ideal location” for HQ2 as the gateway to the Americas. The 27-acre Miami Worldcenter was the proposed second headquarters site for South Florida. “We have the talent, technology and low taxes that would serve Amazon’s needs, if they chose to reengage,” Gimenez said in a statement.

Meanwhile, in Texas, a spokesperson for the Austin Chamber of Commerce was all but resigned to the inevitable. No one from Amazon had called, but the chamber was “always open to working with companies that want to consider doing business and creating jobs for families in Central Texas.”

But in Chicago, hope was alive and well. Last week, after reading a report about the potential about-face, Illinois Gov. J.B. Pritzker “immediately called Amazon,” he has said. On Thursday, Pritzker and Chicago Mayor Rahm Emanuel were again ready to work with Amazon following news New York had been dumped.

In a letter addressed to the Everything Store, the two politicians wrote that “Chicago, our surrounding communities and the state of Illinois remain ready to welcome HQ2 to our city, and to ensure a smooth and successful transition and launch.” And in a reference to the opposition that led to Amazon’s departure from New York, Pritzker and Emanuel noted Illinois’ “new commitment to bipartisanship…We will be happy to bring you back.”

Erin Hudson and John O’Brien contributed to this report.

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Alamo Drafthouse is growing at City Point in Downtown Brooklyn

Alamo Drafthouse is growing at City Point in Downtown Brooklyn

Source: TheRealDeal.com

Alamo Drafthouse is growing at City Point in Downtown Brooklyn

The movie theater chain will double number of screens by 2020

February 15, 2019 11:15AM

The Alamo Drafthouse at 445 Albee Square West in Brooklyn (Credit: Alamo Drafthouse)

Fans of dinner-and-a-movie chain Alamo Drafthouse rejoice. There will soon be 400 more seats at the theater’s Downtown Brooklyn location.

Alamo Drafthouse have inked a lease to add 25,000 square feet to their current space at Acadia Realty’s City Point at 445 Albee Square West, according to Commercial Observer.

The movie theater currently occupies 38,000 square feet and has seven screens at City Point. The new expansion will double the amount of screens. The chain is also set to open a new 10-screen multiplex at 28 Liberty in the Financial District.

Other businesses at Acadia and Washington Square Partners-developed City Point, which opened in 2017, include Target, Century 21, Trader Joes and an outpost of Katz’s Deli.

Bookstore McNally Jackson recently announced they will expand to a 5,300 square foot space at the site.

Alamo does have new competition in Brooklyn — Hidrock Realty recently opened a Nitehawk Cinema at the former Pavilion Theater on Prospect Park West in Park Slope. [CO] — Decca Muldowney

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Should seniors take the rap for the gap in homeownership by millennials?

Should seniors take the rap for the gap in homeownership by millennials?

Source: TheRealDeal.com

(Credit: iStock)

Are senior homeowners preventing millennials from buying houses? Could the decisions of millions of older owners to “age in place” rather than sell their homes explain why millennials are lagging behind in homeownership?

A provocative new study  from federally chartered mortgage investor Freddie Mac suggests the answer may be yes. “Who is living in those homes that millennials might otherwise have bought?” ask the study’s authors. Their answer: baby boomers, war babies and people born in the 1930s. By hunkering down longer than would have been typical of earlier generations — who would have sold their homes in greater numbers by now — today’s seniors are effectively denying their houses to the real estate market. As a result, according to the study, roughly 1.6 million homes have been kept out of buyers’ reach in recent years, sharply reducing the availability of houses nationwide that millennials could buy.

“The most important fundamental in today’s housing market is the lack of houses for sale,” says the Freddie Mac study, which was conducted by the company’s economic and housing research group.

Does all this sound right? There’s no question that tight inventories exert upward price pressure on properties that are available, and they make it tougher for many buyers to afford homeownership. And there’s no question that millennials haven’t opted for ownership at rates comparable to earlier generations. When the Urban Institute’s Housing Finance Policy Center studied the matter last summer, it estimated that 3.4 million millennials are missing from the ranks of homeownership, based on the behaviors of boomers (born between 1946 — 1964) and gen X-ers (born between 1965-1980). Millennials are 8 percentage points behind earlier generations at the same age.

But should seniors take the rap for the gap? Previous studies of millennial homebuying have pointed to multiple causes for differences in ownership rates. Last month, the Federal Reserve identified ballooning student-loan debt loads — now an estimated $1.5 trillion nationwide — as a key barrier to millennial home purchasing. It estimated that 20 percent of the decline in ownership among young adults since 2005 can be attributed to student debt, which doubled in real terms during the decade ending in 2015.

Last year’s study by the Urban Institute highlighted other important factors in addition to student debt:

— High rents that many millennials pay, which make it more difficult to save for a down payment.

— Later ages for marriage and child-bearing, thereby postponing key traditional inflection points that stimulate homebuying.

— Locational choices by millennials themselves, who often show a lifestyle preference for higher-cost urban centers.

In an interview, Edward Golding, a nonresident fellow at the Urban Institute, also noted that there are financial constraints on senior owners beyond simply wanting to age in place and enjoy their homes. Some seniors choose not to sell because they don’t want to give up mortgages they have at favorable interest rates — the so-called “lock-in effect.”

Another factor the Freddie Mac study doesn’t mention: Homes owned for many years often are not what millennials are shopping for anyway — they’re too big and may have too many bedrooms, plus they might have interiors that require extensive updating. They’re frequently priced for move-up buyers, not first-timers. Yet the study includes an example in which fictional older owners, Al and Rose, aren’t selling, thereby forcing younger buyers, Alex and Rita, “to wait longer — and pay more.”

In an interview, Doug McManus, Freddie Mac’s director of financial research, conceded: “That’s a simplification.” So is the entire study. Millennials have lower homeownership rates for a complex of reasons — some of them financial, some of them simply reflective of changing personal preferences.

You can’t blame it all on the old folks.

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This article was imported from an external RSS feed distributed by TheRealDeal.com. Although the article is presumed to originate from a reputable source, JusPost Inc however reserves the right to protect itself and herein affirms that it is NOT the author or copyright owner of this article, nor does it warrant or guarantee that the content of this article is 100% accurate and without prejudice. Furthermore, JusPost Inc declares that it has not modified, nor sold or redistributed this article for profit, and has credited it with the proper source link.
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