The Real Deal New York

National Cheat Sheet: Construction costs jump 4.2% nationwide … & more

By Aidan Gardiner | April 19, 2018 03:30PM

Clockwise from top left: Al Capone’s Miami home lists for $15M, construction costs are up nationwide, apartment rental prices jump and insiders predict a tech migration to New York City.

Construction costs jumped 4.2% nationwide 
The average cost of construction climbed throughout the United States last year, with Los Angeles seeing the largest increase, at 7.59 percent, according to a study by construction consultancy firm Rider Levett Bucknell. Chicago saw a 5.35 percent increase while New York City saw an uptick of 3.29 percent. There’s no evidence that the new taxes on steel and aluminum imports contributed to the spike, despite fears, the study noted. [TRD]

Lead-selling app for real estate agents raises $12M
An app called Agentology has raised $12 million in its most recent funding round. The app aims to sift through agents’ leads and let them sell off unwanted ones. It uses sales reps to vet leads from buyers and sellers that they then toss to brokers to take or pass on. The referring agent would get 25 percent on any successful deal, though company officials have also said each lead would cost agents up to $6. [TRD]

Zillow’s move into home sales welcomed by some brokers, others balk
Zillow’s announcement about the expansion of its “Instant Offers” program — for which it plans to buy homes in Phoenix, Arizona, with the aim of selling them in 90 days — is getting mixed reviews from real estate agents across the country. The program would still involve brokers, but could minimize their role. Some welcome it, saying it gives them access to listings they wouldn’t have had otherwise. But some are skeptical, believing it swaps out industry experts for discount sales. [TRD]

Apartment rents increase across the country in March
The average multifamily rent in March rose to $1,371 per month in March, according to Yardi Matrix. It’s only a $4 hop from the month before, but it’s the most significant movement since July 2017. Rents have only been fluxuating by about a dollar since then. Experts predict strong rent growth in major U.S. markets in the coming years. “Demand drivers — such as growth of millennial households, downsizing of the baby boomer generation and the healthy job market — remain favorable, while occupancy rates continue to hold above the historical average,” said Yardi’s Paul Fiorilla said, according to Bisnow. [Bisnow]

MAJOR MARKET HIGHLIGHTS

Realtors say Google’s Chelsea Market signals tech’s migration to the Big Apple
Google’s $2.4 billion Chelsea Market buy is perhaps the most prominent sign that tech is beginning to flock to New York City. Uber, Spotify and Amazon have all found homes in the city. Real estate insiders said tech companies are recognizing the value of a city rich in various industries. Whereas during the first dot-com boom, many companies sought older loft-style spaces, many have learned that their upkeep costs add up and new buildings are often better. Hudson Yards and downtown could become major tech hubs, they said. [TRD]

California has largest housing shortage in US
California’s housing production has fallen well behind demand for it — more than any other state, according to a new study. The Golden State is short about 3.4 million units, more than half the 7.3 million needed throughout the country, consulting firm ECONorthwest told the Wall Street Journal. The study was commissioned by a group of advocates, including developers, who’re looking to loosen building code regulations. California lawmakers have tried to do just that, but the state’s senate this week rejected a bill that’d permit dense housing developments near transit stops, which advocates had hoped would usher in lower priced housing. [TRD]

Bringing down the (open) house: Cops play spoilsport at Makowsky’s LA megamanse
A brokers-only open house at Bruce Makowsky’s $188 million-dollar spec home in Bel Air drew the authorities earlier this week. Brokers representing the property, Rayni and Branden Williams of Hilton & Hyland and Nest Seeker’s Shawn Elliott said the fuzz broke up the party because cars parked for it were lined up all the way down to Sunset Boulevard. “There was an overwhelming amount of people,” said Rayni. “We expected it but the issue is everyone came at once.” Makowsky had originally listed the home for a record-breaking $250 million and reduced the price just this week. [TRD]

Houston retail strong amid nationwide closures
Houston has managed to avoid the impact of a national retail downturn, according to CBRE’s first quarter numbers. The city posted a 94.4 percent occupancy rate, thanks to a tightening market, strong absorption and heavy pre-leasing deliveries, Bisnow reported. Rising land and build costs could create more competition, but overall, moderate growth is expected, according to CBRE’s report. [Bisnow]

Al Capone’s Miami Beach pad lists for nearly $15M
The home where the Prohibition-era gangster died has hit the market at $14.9 million. Wealth management company MB America bought the home for $8 million in 2013. The company, which represents a wealthy Italian industrialist family, did a multi-million dollar renovation on the 6,100-square-foot home, which features a pool, two-story cabana, original black and gold Art Deco powder room, ceiling lights from the 1920s, an original fireplace and porch. Nelson Gonzalez of EWM Realty International is handling the listing. [TRD]