Bubble Wrap: January 2006

HDC to back two Grand Concourse apartment building renovations

Crain’s New York Business reports that the City’s Housing Development Corp will help with a $3.7 million mortgage refinancing so that the landlord can renovate two apartment buildings in the Grand Concourse Historic District in the South Bronx. These six-story buildings currently house more than 200 working class families.

This work is separate from a existing $52 million project to reconstruct an area located between East 161st and East 166th streets, part of an ongoing effort to overhaul the once grand Grand Concourse.

The High Line Park gets real

According to The Villager, a plan was presented to Community Board 2 by the Friend of the High Line and the NYC Dept of Parks and Recreatation. While there is still no specific schedule of construction activities, Initial work on High Line park’s south end to begin next month with the installation of a protective fence.

The next phase was described as removal of much of the existing rail, wild plants and “pigeon mitigation”.

Once completed the park will extend from Gansevoort to West 20th Street. It is hoped that the park will be ready for visitors by Spring 2008.

The project is currently funded to $84M, of which the city has contributed about 3/4 with federal sources making up with balance.

RE/MAX chairman predicts '06 will be very strong

RE/MAX chairman Dave Liniger said that while 2005 was clearly the best year he’d ever seen, he believes that 2006 will be nothing short of second best.

Liniger said that he does not agree with some who have predicted dramatic changes, but rather sees this year as simply the “the-year-of-the-correction.”

Just for our benefit he did add one note of caution: You do certainly have to be a little concerned with properties that have shown double digit appreciation on both coasts.

Home Depot coming to Hudson Square?

The Slatin Report says that Home Depot is close to signing a lease for a roughly 107,000-square-foot, three-level store at 345 Hudson Street

We sure hope the city manages to get funding for a few more cops out of the deal, as the traffic at that intersection is already legendary.

Carl Weisbrod, who ran Downtown Alliance, and who many credit for the Fulton/John Sts turnaround, is now running Trinity Real Estate for the church. According to Slatin “Trinity owns some 6 million square feet in 18 buildings in Hudson Square” and is trying hard to give meaning to an otherwise “quirky” area bordered by Tribeca and Soho.

National new housing starts drop 8.9% in December

The Wall Street Journal reported that U.S. housing starts fell 8.9% in December … and that applications for building permits also fell, declining 4.4% Apprently permit applications are a more relaible measure becasue they are not as affected by weather. They also report that while several national builders continue to report solid earnings, some are beginning to offer strong incentives. An example was Centext homes who is offering as much as $100,000 off of the price of some home sites in Northern California.

Mayor Bloomberg's bubble has clearly already burst

In the Matrix blog, Jonathan Miller discusses coverage of Mayor Bloomberg’s comments regarding the future of the city’s real estate market.

The mayor said that the market was slowing and that nothing but a “miracle” could stop it.

Given that interest rates have been moving more slowly than expected, hardly “soaring” as Bloomberg said, Jonathan Miller suggests From a macro perspective, it seems like he is going out on a limb…

It does.

Brooklyn Bridge Park Approved!

The Architects Paper reports that Brooklyn Heights will be home to the boro’s first new park in 135 years. The land as well as much of the development cost is being provided by the State and the City. Ten percent of the space will be for “revenue generating” purposes to defray the annual cost of maintaining the park.

“The approved plan calls for 1,240 housing units, 225 hotel rooms, 188,000 square feet of retail space, 138,000 square feet of restaurants and 90,000 square feet of commercial space.”

NAR says Pending Home Sales Pending Longer

The National Association of Realtors announced Pending Home Sales Index Slowing This index is based on contracts signed in November.

While NAR’s chief economist, David Lereah, said that prices remain historically strong, he also made clear his view of the period ahead “We are clearly experiencing a market transition, moving from a prolonged boom to a more balanced period of sustainable sales”.

Regionally the NorthEast has seen the biggest dip. A handy chart is included.

Duke Semans mansion on Fifth Ave sells for $40MM

Now what will look at? The New York Times reports that the Duke family has accepted a $40 million offer for 1009 Fifth Avenue, the most ever paid for a townhouse, from Tamir Sapir, who currently lives in Trump Tower.

Mr. Saphir was apparently a taxi cab driver before making it rich in New York real estate and Russian oil.

He is considering making the first several floors of the mansion a gallery for his collection of ivory.

No bubble in commercial real estate. Damn it.

In the brilliantly titled Warning: Beware of Warnings About Real Estate the New York Times surveys the outlook for REITs and commercial real estate mutual funds. You definitely get a sense that these guys don’t want the residential market bubble talk souring investor sentiment.

“They are looking at the bubble in residential real estate, in single-family homes and condos, and translating that to a bubble in other parts of real estate,” Mr. Cohen said. “They are unrelated.”

Mr. Bigman concurred: “Is there a bubble in commercial real estate? We would argue that there isn’t.”