Outlook for Investment Sales in 2020 | The Stoler Report-New York’s Business Report

Outlook for Investment Sales in 2020 | The Stoler Report-New York’s Business Report


♪ [THEME MUSIC] ♪>>OH, CRYSTAL APPLE, TELL ME HOW THE INVESTMENT SALES BUSINESS IS GOING TO BE IN 2020. ARE YOU GOING TO BE BRIGHT OR DULL? I DON’T KNOW THE ANSWER, SO I ASSEMBLED A DISTINGUISHED GROUP OF INVESTMENT SALES BROKERS, PROFESSIONALS, TO TALK ABOUT THE MARKET. MY GUESTS INCLUDE AARON JUNGREIS CHAIRMAN AND CEO OF ROSEWOOD REALTY, AMIT DOSHI, SENIOR EXECUTIVE MANAGING DIRECTOR AT MERIDIAN INVESTMENT SALES, AND LAST BUT DEFINITELY NOT LEAST, THE MAN THE OTHER PEOPLE HAVE CALLED THE DEAN OF INVESTMENT SALES, MY FRIEND, ROBERT KNAKAL WHO IS THE CHAIRMAN OF THE NEW YORK INVESTMENT SALES FOR JLL. HOW IS THE APPLE LOOKING MR. KNAKAL?>>THE INVESTMENT MARKET HAS BEEN CHALLENGED FOR 50 MONTHS. OCTOBER, 2015 IS WHEN WE SAW THE FIRST CRACKS IN THE MARKET. SINCE THEN, SALES ARE DOWN ABOUT 69% IN THE OVER $10 MILLION SECTOR. SO, IT’S BEEN CHALLENGING.>>BEFORE THE SHOW, I WAS ON THE PHONE WITH ONE OF THE SENIOR LENDERS OF A MAJOR BANK TALKING TO ME ABOUT WHAT’S HAPPENING ON THE WEST SIDE WITH AMAZON, WITH FACEBOOK TAKING SPACE, WITH BLACK STONE, ALL THESE PEOPLE TALKING ABOUT THE OFFICE MARKET. THE OFFICE MARKET SEEMS OK. THE RETAIL MARKET SEEMS A LITTLE QUIET. RESIDENTIAL RENTAL MARKET, EVERYBODY HAS AN OPINION –>>I THINK HE IS CORRECT. JUST ABOUT $80 BILLION WORTH OF INVESTMENT PROPERTY IS BEING TRADED. I SPECIALIZE IN THE MULTIFAMILY AREA ONLY — NOT SAYING ONLY, I’VE SOLD MANY, MANY SITES FROM THE UPPER EAST SIDE, TO THE LOWER EAST SIDE. I PERSONALLY THINK, AT THE END OF THE DAY, THE EDUCATION OF THE MARKET, ESPECIALLY WITH THE NEW LAWS — THE NEW LAWS CAME AND THEY DESTROYED THE MARKET — AND I THINK MY FELLOW MEMBERS HERE WILL AGREE, IN JUNE 2019, LAWS DEVASTATED EVERYTHING. SOMETHING INTERESTING HAPPENED IN THE LAST QUARTER AND I THINK IT WILL HAPPEN NEXT QUARTER ALSO. THE REEDUCATION OF THE SELLERS AND EXPECTATION OF BUYERS CAME TO FRUITION VERY QUICKLY. CALL IT SOCIAL MEDIA.>>THE ACT OF JUNE 14, WHICH I CALL DEFINITELY A CHANGING EFFECT ON THE RESIDENTIAL RENTAL MARKET IN NEW YORK, IT DEFINITELY HAD AN EFFECT. ARE YOU SAYING BUYERS AND SELLERS ARE TOTALLY COGNIZANT TODAY? ARE THEY AWARE, OR ARE THEY STILL EXPECTING THIS LAW IS GOING TO CHANGE WITHIN A YEAR OR TWO YEARS?>>THE LAWS MAY NOT CHANGE SO QUICKLY. THAT ITSELF TAKES SOME TIME. I THINK IT’S A QUESTION OF ACCEPTANCE OF THE LAWS. THE LANDLORDS COME UP WITH THE WAY TO DO SOMETHING BETTER GOING FORWARD. I CALL IT A COMPLETE CHESS GAME, YES, IT’S A COMPLETE CHECK MADE BY THE CITY.>>AS I WAS SAYING PRIOR TO THE SHOW IN THE GREEN ROOM, BOB HAS A LARGE DEVELOPMENT SITE IN LONG ISLAND CITY WHICH IS GOING TO SELL FOR A REASONABLY HIGH NUMBER IN TODAY’S MARKET, EVEN IN GENERAL IN LONG ISLAND CITY. HE RECENTLY SOLD A PORTFOLIO OF BUILDINGS IN QUEENS. SO SALES ARE TAKING PLACE. WHAT IS THE PRICING DIFFERENTIAL? HOW MUCH HAS THE PRICE GONE DOWN?>>I WOULD SAY PROBABLY 30% IN NEW YORK, BUT EVERY SUBMARKET IS DIFFERENT. I THINK THE BRONX IS PROBABLY ABOUT 30%-35%. MANHATTAN IS LOWER — WEST VILLAGE, MAYBE 10%-20%. BUT THERE ARE PROPERTIES GOING FOR $600 A FOOT THAT PREVIOUSLY WOULD HAVE GONE FOR $1000 A FOOT, THAT’S 40%. AND BROOKLYN AND THOSE AREAS THAT USED TO HAVE 15, 16 TIMES MULTIPLES BECAUSE THAT’S HOW THEY TRADE ARE GOING FOR 10 MULTIPLES. THAT’S ALMOST 50%.>>WE WERE TALKING ABOUT THE SAVINGS AND LOANS IN 1992, 1994. THEN WE TALK ABOUT THE RECESSION AT THE END OF 2008, 2009. WE HAVEN’T HAD A RECESSION. WE’VE HAD SOME IMPLEMENTATION OF SOME LEGISLATION WHICH HAS HAD THIS EFFECT ON THE MULTIFAMILY. BUT THE REAL ESTATE WORLD HAS A LOT OF ASSETS.>>I THINK WHAT AARON AND AMIT WERE DISCUSSING IS APPLICABLE TO THE MULTIFAMILY MARKET. EACH PRODUCT TYPE HAS PERFORMED DIFFERENTLY. SOME HAVE NOT BEEN AS ADVERSELY AFFECTED AS OTHERS. FROM A MACRO PERSPECTIVE, THE BIGGEST THING OF INTEREST IS THAT FOR THESE 50 MONTHS THAT THE INVESTMENT SALES MARKET HAS BEEN IN CORRECTION, THE BROADER ECONOMY IN THE UNITED STATES AND IN NEW YORK CITY HAS BEEN DOING GREAT. GDP IS STRONG, WAGES ARE GROWING, JOBS ARE GROWING. CONSUMER CONFIDENCE, CONSUMER SPENDING — ALL OF THESE METRICS ARE GREAT, SO IT’S REALLY PUZZLING WHY THE INVESTMENT MARKET HAS DECOUPLED. EVEN BEFORE POLICY CHANGES HAVE AFFECTED THINGS, THE MARKET WAS SLOWING DOWN BEFORE THEN. MOST RECENTLY IT WOULD BE MULTIFAMILY RENT REGULATION REFORM.>>LET’S TALK ABOUT MIXED USE, BECAUSE ALL OF YOU SELL MIXED USE PROPERTIES, WITH RETAIL DOWNSTAIRS AND UPSTAIRS MULTIFAMILY APARTMENTS, HOW ARE YOU SEEING THAT?>>THE INTEREST RATES ARE GOING DOWN. THE EMPHASIS WE HAD ON THAT SITUATION, THE VALUE IS BECOMING NONEXISTENT.>>WHAT HAS HAPPENED TO THE VALUE END BUYERS WHO CAME INTO THE MARKET — THE ICONS IN THE SUGAR HILLS, THE MADISONS AND ALL THESE OTHER BUYERS WHO CAME IN WITH THE IDEA THEY WERE GOING TO TAKE THE PROPERTY, UPGRADE IT, GET RID OF SOME TENANTS. WHERE ARE YOU SEEING THEM? ARE THEY BAILING OUT, ARE THEY SELLING PROPERTIES, ARE THEY STAYING IN OR CALLING THEIR INVESTORS FOR MORE CAPITAL TO RUN THE PROPERTIES?>>IF YOUR PLAN WAS TO HOPE TO GET A PROMOTE, YOU ARE GOING OUT OF BUSINESS. WE ARE SEEING A LOT OF FOLKS WHO HISTORICALLY HAVE BOUGHT MULTIFAMILY NOW LOOKING FOR OFFICE BUILDINGS. THAT’S WHY ONE OF THE BRIGHT SPOTS OF THE MARKET ARE THE VALUE-ADDED CLASS B, C, D OFFICE BUILDINGS. INTERESTINGLY, WE ARE SELLING A BUILDING ON WEST 22ND STREET NOW THAT, TYPICALLY IF WE GET 100 OR 125 CONFIDENTIALITY AGREEMENTS SIGNED, THAT’S GREAT. 242 CA SIGNED ON THAT AND THE MAJORITY ARE PEOPLE WHO NEVER BOUGHT AN OFFICE BUILDING BEFORE. IT’S BECAUSE THEY ARE HAVING TO CHANGE THEIR BUSINESS PLAN.>>BUT THERE’S A BIG DIFFERENCE IN OPERATING IN OFFICE THAN A MULTIFAMILY.>>MULTIFAMILY IS VERY DIFFERENT. LET’S SAY THERE WERE 100 BUYERS OUT THERE. NOW IT’S DOWN TO 20 BUYERS, BUT THANK GOD IT’S REAL BUYERS. IF YOU LOOK AT THE CONTRACTS I HAVE — PROBABLY 10 OR 11 SINCE THE COLLAPSE OF THE MARKET. I THINK SOME PEOPLE ARE BUYING AGAIN WHO WERE MAYBE WAITING ON THE SIDELINES. THIS QUESTION, OLD FAMILIES ARE TAKING OUT MORE FINANCE MONEY AND SITTING ON THE SIDELINES. IT’S A GESTATION PERIOD. THEY NEED TO DIGEST THE LAWS. MAYBE THEY WILL ENTER THE MARKET BUT NOT UNTIL Q3 OF NEXT YEAR.>>I’LL TELL YOU WHAT BOTHERS ME, MORE THAN ANYTHING, MOST OF THESE GUYS ARE GOING OUT OF TOWN. AS A NEW YORKER, A BROKER, AS SOMEONE WHO OWNS PROPERTY AND LOVES NEW YORK MORE THAN ANYTHING IN THE WORLD, THAT BOTHERS ME THAT THESE GUYS WHO WORKED HARD AND MADE A LOT OF MONEY ARE TAKING IT TO ATLANTA.>>BUT LOOK AT THE TAX EFFECT AND WHAT HAS HAPPENED IN NEW YORK. THE TRANSFER TAXES ARE DOWN, BECAUSE THE SALES ARE DOWN. THEN YOU TALK ABOUT THE DISCUSSION OF THE COMMERCIAL RENT TAX. COMMERCIAL RENT REGULATIONS ON SMALL OFFICES — SMALL RETAIL. IT’S NOT A INVESTOR FRIENDLY CITY ANYMORE.>>THE MOST FREQUENT QUESTION I AM ASKED BY CLIENTS TODAY IS THEY CALL UP AND SAY HEY, I AM BUYING A BUILDING IN NASHVILLE, TALLAHASSEE, AUSTIN. THE BROKERS DON’T KNOW ME. CAN YOU CALL AND TELL THEM WHO I AM? WHILE I AM HAPPY TO DO THAT FAVOR FOR A CLIENT, I HATE THAT THE CAPITAL IS LEAVING NEW YORK. OWNERS WHO HAVE BEEN HERE FOR DECADES ARE LOOKING OUTSIDE THE CITY.>>HOW DO YOU PROTECT NEW YORK CITY WITH INVESTORS WHO CONTINUE TO COME HERE?>>I AM ALL POSITIVE ON THE MULTIFAMILY MARKET. I WILL LIVE AND DIE WITH IT. I TELL MY CLIENTS YOU CAN GO OUT OF TOWN BUT YOU WILL NOT GET THE APPRECIATION.>>BUT LET’S BE REALISTIC. STUDENTS GRADUATE COLLEGE. THEY WANT TO COME HERE. FOREIGNERS COME HERE. THIS IS THE LAND OF MILK AND HONEY. THIS IS THE PLACE PEOPLE WANT TO BE. WE NEED TO BUILD MORE APARTMENTS. THAT’S WHY DEVELOPMENT SITES IN IN LONG ISLAND CITY, IN MANHATTAN AND IN THE BRONX ARE SELLING. BECAUSE HOUSING IS A REQUIREMENT. NOW, SOME OF THE PROBLEMS ARE FINE, IF YOU DON’T HAVE FAIR MARKET VALUE, YOU ARE LIVING WITH A CERTAIN NUMBER. I THINK THERE IS GOING TO BE AN ADJUSTMENT. PEOPLE WILL CONTINUE TO BUY. THEY MAY CONTINUE TO BUY WITH LESS OF AN EXPECTATION OF WHAT THEY WILL EXPECT TO GET.>>THE EXISTING STOCK IS GOING TO BE FROZEN BY NEW RENT REGULATION REFORMS. IF WE GO TO UNIVERSAL RENT CONTROL, IT WILL IMPACT FREE-MARKET APARTMENTS. WE NEED NEW CONSTRUCTION — DOUBLE THE “FAR” IF YOU ARE GOING TO BUILD A RENTAL BUILDING. PUT CAP PER SQUARE FOOT ON WHAT THE REAL ESTATE TAX CAN GO TO. THAT WILL STILL GIVE THE CITY MORE REAL ESTATE TAX REVENUE PER PARCEL IN AN ECONOMIC SYSTEM THAT WORKS, AND YOU HAVE TO PUT A COVENANT IN THAT PARTICULAR BUILDING’S DEED SAYING NO MATTER WHAT HAPPENS ON A STATE OR CITY LEVEL, THOSE UNITS WILL NEVER BE SUBJECT TO RENT REGULATION OF ANY KIND.>>I DON’T KNOW HOW MUCH YOU ARE INVOLVED WITH SALES OF HOTELS, BUT RIGHT NOW, NEW RULES ARE GOING INTO EFFECT THAT YOU HAVE TO HAVE A COMMUNITY PURPOSE TO GET APPROVED AS A HOTEL. THAT’S WHY THE CITY HAS 40% INCREASE IN THE NUMBER OF ROOMS. 67 MILLION VISITORS TO NEW YORK. YOU NEED A PLACE FOR THEM. NOW WE ARE GOING TO LIMIT THE NUMBER OF HOTELS BECAUSE THEY WANT REGULATION?>>BOB MENTIONED EVERYTHING CORRECTLY. THE RENT STABILIZATION IN 2017, 2018, 945,000 — DEREGULATED APARTMENTS, JUST ABOUT THE SAME. PUBLIC HOUSING WAS ONLY 9%. I WOULD LOVE TO TALK TO CITY OFFICIALS AND SAY WHY NOT INCREASE THE PUBLIC HOUSING FUND RATHER THAN PENALIZING THE LANDLORDS? INCREASE THE PUBLIC HOUSING. INVITE THE PRIVATE SECTOR TO COME IN HERE.>>I AM NOT SURE IF ANY OF YOU ARE SELLING NYCHA PROPERTY. ON SOME OF THESE PROPERTIES, THERE ARE GARAGES. PEOPLE DON’T NEED GARAGES ANYMORE. SOME OF THESE PROPERTIES SHOULD BE TAKEN OVER AND USE THE AREA FOR HOUSING EVEN IF YOU CHANGE THE ZONING A LITTLE BIT.>>THERE IS A TON OF EXCESS PROPERTY THE CITY OWNS. WITH THE RIGHT INCENTIVES, THE PRIVATE SECTOR WILL DO ANYTHING YOU WANT THEM TO DO. BUT THE INCENTIVE PACKAGES ARE NOT ENOUGH TO STIMULATE THE UNITS WE NEED. IT’S THAT SIMPLE.>>ABSOLUTELY.>>I HAVE SPOKEN TO MANY LANDLORDS. THEY’RE TRYING TO GET ARTICLE 11 PASSED IN THEIR BUILDINGS. THE CITY IS NOT FRIENDLY TO THEM. ARTICLE 11 IS,YOU TELL THE CITY, I AM GOING TO KEEP THE PROPERTY FOR 40 YEARS AND STABILIZATION. IT’S GOOD FOR THE LANDLORD BECAUSE THE TAXES ARE LOWER. IT’S GOOD FOR THE CITY BECAUSE TENANTS ARE IN STABILIZATION FOR 40 YEARS. THE CITY WON’T GET IT DONE FOR THEM.>>WHAT’S HAPPENING IN JERSEY CITY, — UNION CITY AND LONG ISLAND? WHAT ARE YOU SEEING WITH INVESTMENT SALES THERE?>>WE DID A DEAL RECENTLY IN JERSEY CITY. WE HAVE A FEW MORE WE ARE SELLING THERE.>>NASSAU IS NOT THAT GREAT BECAUSE THE TAXES ARE SO HIGH. WHEN YOU TALK ABOUT JERSEY CITY, THE QUALITY OF LIVING — YOU CAN LITERALLY LOOK AT NEW YORK CITY, WHAT BEAUTIFUL SITE CAN YOU HAVE? THE HOUSING STOCK IS MUCH BETTER IN JERSEY CITY. DEFINITELY BETTER INCENTIVES BY THE LOCAL OFFICIALS AND GOVERNMENT. I THINK JERSEY CITY IS GOING TO BECOME A PLACE TO GO TO.>>ANY INVOLVEMENT IN THERE?>>THERE’S SOMETHING WEST OF THE HUDSON. I DIDN’T HEAR ABOUT IT. 99% OF MY WORK IS DONE –>>I MEAN, LOOK. THERE IS A LOT OF DEVELOPMENT IN NEW ROCHELLE AND YONKERS. THE BRONX IS RIGHT NEXT TO YONKERS. I REMEMBER MAJOR DEVELOPERS BUYING A LOT OF PROPERTY OVER THERE. WHAT’S GOING ON THERE?>>CLEARLY, PEOPLE NEED TO LOOK OUTSIDE THE CITY FOR OPPORTUNITY. IF YOU ARE TRYING TO GET OUTSIZED RETURNS, IT’S STILL CHALLENGING TO FIND IT IN THE CITY. MARKET PARTICIPANTS ARE INCREASING THEIR GEOGRAPHIC FOCUS.>>I HAVE DEVELOPERS ON THE SHOW WHEN I TALK ABOUT DEVELOPERS — HOW ARE YOU ADAPTING AND WHAT ARE YOU DOING TO CHANGE THE MARKETS TODAY IN YOUR OWN WAY THAT YOU DIDN’T DO BEFORE DUE TO CHANGES IN REGULATIONS, DUE TO OTHER CHANGES TAKING EFFECT?>>I AM SELLING DEVELOPMENT SITES. WE ARE DOING DEALS OUT OF TOWN. WE’RE TRYING TO SELL OFFICE BUILDINGS, BUT THAT’S HARD TO BREAK INTO. WE ARE DOING THE SAME, BRONX, MANHATTAN, BROOKLYN MULTIFAMILY.>>I AM NOT LOSING MY FOCUS ON THE MULTIFAMLY. JUST TODAY, WE SIGNED A CONTRACT IN ALBANY, NEW YORK. I AM GETTING THE OPPORTUNITY NOW TO WORK ON OUT-OF-TOWN DEALS AND UNDERSTAND THE MARKETS MUCH BETTER. THE BOTTOM LINE IS WE WILL ALL SURVIVE.>>EXACTLY. MY COMMENT, AND I SAY THIS WITH REGARD TO MY OTHER SHOW, I HAVE AN ACRONYM CALLED SALT. ONE OF THE LETTERS IS A. YOU HAVE TO BE ADAPTABLE. T, YOU’RE ALL TENACIOUS. S, YOU SEIZE THE OPPORTUNITY. AND YOU NEED A LITTLE LUCK, WHICH IS THE L. NICE ACRONYM.>>I ALWAYS SAY WE, BROKERS, HAVE STAYED NIMBLE. BOB, YOU WERE ONE OF THE FIRST ONES TO GO TO HUDSON YARDS, I DIDN’T KNOW SOMETHING COULD BE DONE IN HUDSON YARDS.>>YOU BRING UP AN INTERESTING POINT. LET’S TALK ABOUT HUDSON YARDS. YOU HAVE THE DEVELOPMENTS OVER THERE. SOMEONE JUST BOUGHT A BUILDING ON 30TH AND 9TH AVENUE. YOU HAVE THE POST OFFICE PROPERTY. YOU HAVE THE OTHER PROPERTIES FROM 36TH TO 42ND.>>WHAT ABOUT FACEBOOK’S MAJOR LEASE?>>NO, NO. I’M TALKING ABOUT — DO YOU SEE NEW DEVELOPMENT SITES BEING SOLD IN HUDSON YARDS NOW?>>THERE ARE VERY FEW DEVELOPMENT SITES SOLD IN THE YARDS. THERE WAS A TON. WE HAVE DONE 17 MAJOR SITES IN HUDSON YARDS, AND THAT HAS BEEN A BIG PART OF OUR PRACTICE. NOW THERE ARE A FEW SITES DEVELOPERS PURCHASE THAT THEY ARE NOT GOING TO DEVELOP THAT MAY BE PUT ON THE MARKET FOR SALE, BUT THE INTEREST HAS BEEN TREMENDOUS. IT’S REMARKABLE. IF YOU GO OVER THERE AND WALK AROUND, REALLY AMAZING WHAT’S GOING ON.>>THERE WAS A CHANGE IN ZONING IN HARLEM. WHAT ARE YOU SEEING IN EAST AND WEST HARLEM TODAY?>>I THINK EAST HARLEM IS STILL GOING TO BE THE STEP COUSIN OR STEPCHILD OF THE GENTRIFICATION. I THINK THE WEST HARLEM SECTION OF THE UPPER, UPPER WEST SIDE — I JUST DON’T SEE EAST HARLEM. NEWER BUILDINGS ARE COMING UP. BUT I COULD BE WRONG –>>WHAT ABOUT YOUR THOUGHTS ABOUT THE INWOOD MARKET? THERE IS A LOT OF TALK ABOUT THAT AND WASHINGTON HEIGHTS MARKET.>>INWOOD IS DEFINITELY UNDERGOING A CHANGE. THERE’S THE HUGE TOWER THAT ARDEN IS PUTTING UP. BUT A LOT OF THE BUILDINGS ARE FAR FROM THE TRAINS, SO THERE’S A SLOW GROWTH POTENTIAL, IN MY OPINION, NOT LIKE WASHINGTON HEIGHTS.>>WHEN WE TALK TO BUYERS, THEY ARE MORE DESIROUS OF HARLEM FIRST, AND THEN THEY GO TO WASHINGTON HEIGHTS. AGAIN, I AM SELLING SOMETHING RIGHT NOW — 33%, PRICES ARE DOWN, AND I’M SEEING UP TO 40% PRICE ADJUSTMENTS FOR MULTIFAMILY RENT STABILIZED.>>SOMETIMES PEOPLE FORGET ABOUT THE FIFTH BOROUGH. THE WHEEL DIDN’T HAPPEN. THE OUTLET CENTER DID HAPPEN. WHAT ARE YOUR THOUGHTS ABOUT STATEN ISLAND? ARE THINGS IMPROVING IN STATEN ISLAND? I KNOW A COUPLE OF SHOPPING CENTERS HAVE BEEN UP FOR SALE. SOME BUYERS SAY IT IS A NICE PLACE. BOB, DO YOU KNOW WHERE STATEN ISLAND IS?>>IT’S ON THE WAY TO JERSEY.>>WE DID A NUMBER OF LOAN SALES DURING THE GREAT RECESSION OUT IN STATEN ISLAND. SINCE THEN, WE HAVE NOT REALLY DONE A LOT.>>GOING BACK TO POLICY, THIS IS WHERE THE POLICYMAKERS ARE GOING WRONG AGAIN. STATEN ISLAND IS A GREAT EXAMPLE. INSTEAD OF DECREASING THE TOLLS, THEY’RE INCREASING THE TOLLS. SO, WHO WOULD WANNA LIVE THERE? EVEN IF YOU ARE A RESIDENT OF STATEN ISLAND, YOU’RE STILL PAYING A SUBSTANTIAL AMOUNT OF MONEY. STATEN ISLAND HAS POTENTIAL. A LOT OF WATERFRONT. PEOPLE ARE RUSHING TO THE WATERFRONT.>>HOW DO WE SEE THE GREENPOINT NEIGHBORHOOD, THE BUSHWICK, THOSE NEIGHBORHOODS WHICH ARE EMERGING AND GENTRIFIED AND SO ON.>>THEY’RE STILL EMERGING. PEOPLE ARE BUILDING. WE HAVE A FEW PENDING SALES IN THAT AREA, BECAUSE THERE ARE SO MANY NEW DEVELOPMENTS, I DON’T SEE THAT SLOWING DOWN AT ALL. IT’S BECOMING MORE AND MORE LIKE MANHATTAN EVERY DAY.>>I WANNA MAKE A DIFFERENT KIND OF A COMMENT OVER HERE. AFTER HE RENTAL LAWS GOT KICKED IN, IT’S NOT LIKE LOCATION, LOCATION, LOCATION, BUT MORE LIKE CAP RATE, CAP RATE, CAP RATE. WHETHER YOU ARE BUYING IN BROOKLYN OR SOMEWHERE ELSE. YES, CONSTRUCTION MATTERS. HOW THE PAPERWORK MATTERS, ESPECIALLY IN RENT STABILIZED STUFF. BUT I THINK PEOPLE ARE LOOKING AND SAYING, WHETHER I BUY IN GREENPOINT — UNLESS SOMETHING CHANGES DRAMATICALLY. I COULD BE WRONG.>>MOST OF THE SALES ARE NEW CONSTRUCTION.>>CAP RATE IS SO IMPORTANT TODAY. WITH A FEW TRANSACTIONS AT THE RIGHT CAP RATE, YOU ARE GOING TO HAVE A FLOOD OF PEOPLE LOOKING AT IT. IF YOU’RE TRYING TO GET 2016 PRICING, THAT SET UP GOES RIGHT IN THE GARBAGE CAN. IF YOU WANT TO GET ACTIVITY, YOU HAVE TO BE AT A YIELD AND ASKING YIELD THAT IS COMPELLING AND YOU’LL HAVE A TON OF ACTIVITY, BUT IF YOU’RE TOO AGRESSIVE, IT’S TOUGH TO –>>WHAT ARE YOUR THOUGHTS ABOUT MY FRIEND JOHN, HE BUILT TWO BUILDINGS IN CONEY ISLAND. CONEY ISLAND AND EAST NEW YORK. ANY THOUGHTS ABOUT THAT?>>CONEY ISLAND HAS THE TRAIN ISSUE. IT’S FAR. I THINK BECAUSE HE’S BUILDING SUCH A UNIQUE STRUCTURE, CONEY ISLAND IS GOING THROUGH A HUGE CHANGE BECAUSE OF WHAT HE’S PUTTING IN THERE. EAST NEW YORK — IT’S TOO EARLY TO TELL. I KNOW EAST NEW YORK HAS BETTER TRANSPORTATION. BUT IT STILL HAS A LOT OF HOUSING PROJECTS. I THINK EAST NEW YORK STILL HAS A LOT OF TIME.>>I THINK CONEY ISLAND HAS A LOT OF THINGS GOING FOR IT. THERE ARE SOME INFRASTRUCTURE ISSUES THAT NEED TO BE WORKED ON. THERE ARE SO MANY ATTRACTIVE THINGS ABOUT CONEY ISLAND.>>WHAT ABOUT JAMAICA?>>PEOPLE SAY WHERE IS THE OPPORTUNITY TO BUY. THE OPPORTUNITY TO BUY OUTSIDE MANHATTAN IS NEAR TRANSPORTATION HUBS. JAMAICA IS ONE OF THE BEST IN THE COUNTRY. I THINK WITH THE PROPER CHANGES IN ZONING, IT COULD BE UNBELIEVABLE.>>WHAT ABOUT FLUSHING?>>FLUSHING IS A MELTING POT. THAT STUFF SELLS, NO QUESTIONS ASKED. A TREMENDOUS AMOUNT OF ACTIVITY. IT’S ALL GOING TO GET REZONED. IT’S GOING TO BE GREAT.>>FLUSHING IS ALMOST LIKE BOROUGH PARK. IT’S IMPERVIOUS TO THE MARKET.>>WHAT’S HAPPENING IN BOROUGH PARK?>>NOT MANY BUILDING SALES ARE GOING ON, PEOPLE WHO BOUGHT THE PROPERTIES YEARS AGO, FAMILY ASSETS, THEY DON’T NEED TO SELL, AND THEY’RE NOT GOING TO SELL — THERE ARE VERY FEW SALES GOING ON IN BOROUGH PARK, BUT HOUSING MARKET HAS EXPLODED. IT’S GOING OUT INTO BENSONHURST, SUNSET PARK, FLATBUSH.>>THE GOWANUS. WHAT’S YOUR THOUGHTS?>>WE’RE SEELING A BIG SITE IN GOWANUS NOW AND THE INTEREST HAS BEEN REMARKABLE. PEOPLE ARE LOOKING AT THAT AS AN AREA OF THE FUTURE. ALL THE DIFFERENT USES — RETAIL, RESIDENTIAL –>>GOOD TRANSPORTATION ALSO. CRYSTAL APPLE, YOU ARE REASONABLY BRIGHT, NOT SHINY, BUT BRIGHT. PEOPLE WILL ADAPT AND I THINK THE MARKET WILL CONTINUE TO SELL. WE LOVE NEW YORK AND PEOPLE WANT TO LOVE NEW YORK. I WOULD LIKE TO THANK AARON, AMIT, AND BOB. I WILL SEE YOU NEXT WEEK. ♪ [THEME MUSIC] ♪

One thought on “Outlook for Investment Sales in 2020 | The Stoler Report-New York’s Business Report

  1. This is a wonderful show! Thank you for putting it together and out there. I know it’s been around for almost a decade but I recently stumbled upon it!

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