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Massey Knakal Reel

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A blog for breaking sales, leasing and neighborhood real estate news.

Bay Ridge two building package:
213 residential units
156,099 sq.ft. of combined livable space
Current rents are approximately 70% market rent.

This is the first time in 53 years that these properties have been available for sale.

333 & 555 Ovington Avenue is a sound investment opportunity for an experienced investor.

Click here to see full listing.

Agents: Stephen Palmese

Anyone reading the newspapers today would think Manhattan's investment sales market is up in flames. But Partner James Nelson wondered, how accurate are these statements? It depends on the submarket. Click here to find out why.

Agents: James Nelson

     We have recently compiled a summary of all major commercial real estate sale transactions in Flushing in 2007, and the amount of transaction declined by about 21% compared to the previous year (2006). 
      As the positive effects of fiscal and monetary stimuli take effect, economic expansion is forecasted to gain momentum in the second half of 2008. However there are risks present. Some indicators suggest the housing market has yet to reach bottom, and further job losses are still expected. As record-high oil prices continue to stir inflation concerns, additional Fed rate cuts will not come as willingly.
        In the capital market, unlike the residential market, commercial mortgage delinquency is still near historical lows, but uncertainty continues to cause volatility. Lender requirements reflect the more cautious environment. The demand for well-managed, high-quality assets will remain strong through the rest of 2008. While reduced CMBS lending is slowing the pace of large portfolio sales and REIT privatization, there is still a significant amount of private equity in the Flushing’s marketplace. Private and foreign funds are seeking opportunistic plays. They are poised to jump into the market when lenders release more capital.

Neighborhoods: Flushing

Nearly all the competitive bidders were looking to continue to use this 2,500 square foot space as a restaurant or gut it and use it for industrial or office space. The Brooklyn buyer, who paid $875,000, surely appreciated the additional 3,000 square feet of air rights.

Neighborhoods: Williamsburg/ Agents: Mark Lively

Ice cream anyone?

Massey Knakal closed on a mixed-use property with one store and a four-bedroom duplex apartment at 8612 3rd Avenue in Bay Ridge, Brooklyn. A Brooklyn investor paid $1,275,000 for the recently renovated space which includes a Carvel/Cinnabon store. Carvel is currently one of the top franchises in the country.  

Agents: Stephen Palmese

Excellent Bushwick, Brooklyn conversion opportunity:
A 17,550 square foot building consisting of 21 Commercial loft units split between 3 stories.

The property is located on Hart Street off Wyckoff Avenue, central to the "L" subway as well as multiple condominium developments and conversions.

Click here to see full listing.

Neighborhoods: Bushwick

  • Sold for $3,550,000
  • Built in 1819, second oldest townhouse in SoHo
  • 1,475 square feet
  • 1,650 square feet of air rights

The Manhattan buyer was not deterred by the small size of this nearly 200-year-old townhouse, originally constructed by a spinster and seamstress before it was converted to a bordello - also known as a brothel - in 1832.

These days it was vacant, but that didn't lower the price. The buyer paid an aggressive $2,400 per square foot so he can live there.

Neighborhoods: SoHo/ Agents: Robert Burton

This prime retail development site located on the east side of Central Park Avenue in Hartsdale, NY. This is a high traffic area (28,000+ vehicles daily) on Westchester’s premier retail corridor.

The property currently has 2 storefronts, a retail business and a residence. On-site parking for 24 vehicles. The property backs up to the Scarsdale Country Club.

Click here to learn more.

As I have stated in several recent interviews and articles, we believe that the reduction in sales volume in the under $100 million category of property sales in New York City has been the result of supply constraint as opposed to weak demand. Property owners are bombarded with negative news about the market and are opting not to put their properties up for sale rather than to sell into a disastrous market. The fact is that the market is not disastrous, far from it.  Prices are remaining healthy and debt is plentiful from numerous portfolio lenders who are looking at present loans as cherries which are more profitable than they have been in recent memory with spreads of 250 to 300 bps over LIBOR and with much less risk as loan to value ratios have declined from 75-80% to 60-65%. We believe this supply constraint will start to abate for two reasons: the first is that word is spreading that achievable prices are still near record levels and the second is that the reality of capital gains tax increases next year are starting to get some play.

We have been advising clients that it is likely capital gains tax increases will be approved next year. No one believes the capital gains rates will go down and a growing majority agrees that these rates will increase. The reason for our perspective is the massive shortfalls faced by state governments and the federal government. Many states are hurting with projected shortfalls in tax collections approaching $40 billion. This is more than three times the totals experience in 2007. Moreover, the federal government is facing massive shortfalls in its budget. The culprit: the national housing slump which is well into its second year. This slump has had a multiplier effect in tax collections across the nation.

The obvious tax collection problem is real estate taxes as payments are not made on houses which are in foreclosure. While these taxes will be paid eventually, it takes time for the property to work its way through the system and taxes are not paid as the house is digested and recapitalized.

Personal income tax collections are off significantly as our unemployment rate continues to grow. Unemployment is currently at 5.5% and is expected to continue to grow. The next unemployment report is due out this Friday and it will be interesting to see how the labor market is performing.

Corporate income tax collections continue to recede as the result of falling profits. Losses in the financial services sector alone will result in hundreds of billions of dollars of evaporating corporate taxes.

Lastly, sales taxes have been greatly affected by the housing slump as well as high gas prices. Fewer home sales means less money is spent on home renovation materials, home furnishings and appliances. Higher gas prices are prompting cutbacks in consumer spending as families continue to try to figure out how to make ends meet. The inability of homeowners to access mortgage equity withdrawal has also had a debilitating effect on spending. The Fed’s beige book is, by all accounts, underestimating current conditions as it presently characterizes consumer spending as “slowing”. Moreover, consumer confidence is as low as it has been in 40 years as more than half of employed Americans believe their income will be less this year than it was last year.

Given these conditions, governments are going to have to come up with additional revenue to meet these tax collection reductions. Unlike the federal government, most state governments are required to balance their budgets. Capital gains taxes are vulnerable as they are viewed as a tax on the affluent. We have many clients that are presently putting properties on the market with the condition that a closing must occur before the end of the year. The next administration is likely to raise the tax which, on a federal level, is normally retroactive to the beginning of the year. We expect this wave to continue as sellers who do not want to effectuate a 1031 exchange take advantage of historically low capital gains rates.

Agents: Robert Knakal

The Real Deal reports:
"Columbia University is poised to acquire a 15,000-square-foot city-owned Metropolitan Transportation Authority parcel on 131st Street in the footprint of its Manhattanville expansion plan.

The $3 million transfer, worth $200 per square foot, should occur some time in the spring of 2009, city Law Department spokeswoman Laura Postiglione said. The university will not pay the $3 million in cash, however, but will be credited for work performed at a park called Hudson River Piers that is under development in West Harlem, a source said....

Patrick O'Malley
, director of sales in Manhattanville for brokerage Massey Knakal Realty Services, estimated that the property, which is zoned for manufacturing, would normally be worth between $250 and $300 per square foot. But he expected the holdout parcels to command prices far higher because of the looming eminent domain use. " 

Click here for full story.

Neighborhoods: Manhattanville

This 5-story, 57-foot-wide institutional building currently home to The New York Genealogical and Biographical Society. Originally designed and built specifically for the G&B's use in 1929, it consists of a large ornate theatre on the ground floor with all the original detail and a full balcony. The second and third floors are both primarily large meeting/reception areas with high ceilings and hardwood floors; both can be reconfigured for different uses. The top floor and mezzanine are dedicated to a sprawling library with high ceilings and lavish detail. This prime and very rare building would be ideal for a museum, school, consulate, embassy, religious organization, foundation, bank, commercial user or even a single-family home.  Click here to view full listing.

Neighborhoods: Midtown East

Broker Paul Smadbeck's exclusive at 12 and 14 West 68th Street made a huge splash, also in the pages of the New York Observer. The owner bought the townhouses in 1965 for $140,000 with $10,000 down. Today he has put it on the market for $22,000,000 and plans to donate ALL the money to his newly created foundation that will focus on international relations, science and economics. Fascinating stuff. Read full story here.

Neighborhoods: Upper West Side/ Agents: Paul Smadbeck