The Real Deal New York

National Cheat Sheet: Why commercial property owners love the GOP tax plan, $20B valuation doesn’t impress WeWork co-founder much … & more

By James Klatell | November 17, 2017 08:30AM

National Cheat Sheet

Clockwise from top left: Miami’s hottest neighborhoods for development, commercial real estate owners love for Republican tax plans, retail leases on Rodeo Drive, and WeWork’s co-founder Miguel McKelvey.

Why commercial real estate owners love the GOP tax plan
The commercial real estate industry would see several benefits in the proposed Republican tax bills working their way through the House and Senate. In addition to lower corporate tax rates and the ability to avoid a 30 percent limit on interest expense deductions, the Senate’s version would lower the commercial property depreciation period, the Wall Street Journal reported. Both proposals also preserve 1031 exchanges, which allow property owners to avoid taxes on sales if the profits are reinvested in real estate. [TRD]

WeWork’s co-founder is quite nonchalant about a $20B valuation
Miguel McKelvey, the co-founder of unicorn’d shared space startup WeWork, said the company’s $20 billion valuation doesn’t doesn’t affect him or his business. “You can say, OK it’s your opinion I’m overvalued or undervalued. Like, who gives a shit?,” McKelvey said at a CornellTech@Bloomberg event. Investors, however, might have a different take on that. Japanese conglomerate Softbank invested $4.4 billion into the New York-based firm earlier this year.  [TRD]

Airbnb posts $1B in third quarter revenue
Home-sharing startup Airbnb has been profitable for 17 straight months, as it reported $1 billion in net revenue in the third quarter. A recent Morgan Stanley report that saw Airbnb’s growth is slowing, however, with fewer U.S. and European travelers saying they would book with Airbnb next year. Sources at the nine-year-old company told Bloomberg that the report did not include Asia and Latin America, where Airbnb saw a 150 percent increase in bookings this year. [TRD]

Is Dallas the best location for HQ2?
A new ranking puts Dallas at the top of the list of cities competing to win Amazon’s favor as the internet giant looks to build a second headquarters somewhere in North America. Based on six factors — tech labor force, fiscal health, cost of living, college population, culture fit and state tax rank — the Wall Street Journal found that Dallas best matches Amazon’s requirements. Boston placed second in the Journal’s rankings, followed by Washington D.C. [TRD]

Major Market Highlights

NYC mayor wants to raise taxes on city’s vacant land to fund affordable housing
Mayor Bill de Blasio’s latest affordable housing plan aims to raise taxes on vacant land and “incentivize owners to make their sites productive.” The “Housing New York 2.0” proposal promises to add 100,000 affordable housing units to the 200,000 units pledged in 2014. The city will also hold a “tiny home” design competition so affordable residences can be built on small, city-owned plots where traditional apartment buildings can’t be built. [TRD]

Apartment development booming in Miami’s trendiest neighborhoods
Wynwood, the trendy arts district in Miami, was the most active neighborhood in terms of new multifamily development, according a The Real Deal analysis of building permits filed with the city so far this year. The building department recorded four new projects in the Wynwood-Edgewater-Midtown Miami area, adding as many as 727 units. The area was rezoned in 2015, and a slate of new developments are already in progress, including the Related Group and East End Capital’s Wynwood 25 and Related and Block Capital Group’s Wynwood 26. [TRD]

Rodeo Drive is the second most expensive shopping district in the US
A new report from Cushman & Wakefield finds that Rodeo Drive in Beverly Hills is the nation’s second most expensive retail district. Los Angeles’ famous shopping strip trails only New York’s Fifth Avenue in retail rents, the “Main Streets across the World” report found. With big ticket tenants like Gucci, Versace and Louis Vuitton, Rodeo Drive’s asking rent this year is $875 per square foot, up from $800 in 2016. [TRD]

Growing Houston sees developments planned in ‘old deer huntin’ country’
A planned 4,500 home development north of Houston is the latest expansion of the fast-growing city into formerly untouched lands. Dallas-based Howard Hughes Corp. broke ground on the 2,000-acre master-planned Woodland Hills community this week, with construction to be fully complete in almost a decade. “I remember this as old deer huntin’ country,” Conroe Mayor Toby Powell said, according to the Houston Chronicle. In regards to exposure to flood risk in the wake of Hurricane Harvey, the Howard Hughes Corp. told the Chronicle that “home sites that builders purchase from us will allow the builders to construct homes at or above the 500-year elevation.” [Houston Chronicle]

60th construction crane rises over Chicago
There are now 60 tower cranes looming over Chicago — nearly double the number from 2016. The city has seen an increase in development for the last three years, with Mayor Rahm Emanuel touting it as evidence of the economic opportunities in Chicago. The latest addition in construction hardware comes courtesy of Belgravia Group, which is building an 18-story luxury condominium tower called Renelle on the River, which is 50 percent pre-sold. [Bisnow]