Gary Barnett says luxury market is crowded, WeWork IPO woes continue: Daily Digest

A daily round up of New York real estate news, deals and more for September 9, 2019

TRD New York /
September 09, 2019 01:10 PM

Every day, The Real Deal rounds up New York’s biggest real estate news. We update this page in real time, starting at 9 a.m. Please send any tips or deals to [email protected]

 

Gary Barnett says luxury condos aren’t “flying off the shelves” anymore. Barnett acknowledged in a recent interview with Bloomberg Television that there is “much more competition” in the luxury condo market now than there was just a few years ago. His company Extell Development is currently at work on Central Park Tower, which at 1,550 feet will be the tallest condo project in the Western Hemisphere. [Bloomberg]

 

Goldman Sach’s coder-in-chief is listing his West Village townhouse for $19.95 million. Martin Chavez, who is now moving to the West Coast, bought the four-story, four-bedroom townhouse in 2011 for $10.5 million. The home spans 5,150 square feet and has 1,525 square feet of outdoor space. [WSJ]

 

Realogy says it’s not interested in a sale, despite Compass’ claims. CEO Ryan Schneider said in a letter to agents and employees over the weekend that the claim was meant to “inspire sensational news coverage about Realogy that is simply not true.” He said the allegation from Compass that he tried and failed to sell Realogy to the firm was just an attempt by Compass to distract people from its “illegal and unfair business practices, which are part of our lawsuit against them.” [TRD]

 

Small homeowners are getting caught up in a law meant to guard against fatal accidents. After a series of fatal construction accidents, the Department of Buildings attempted to crack down by hiring hundreds of new inspectors and issuing harsher penalties for violations. However, ordinary people in the city are frequently getting caught up with costly fines as well, according to the New York Times. And some of the harshest punishments end up being the result of not knowing how to respond to an initial ticket rather than serious safety issues, the Times’ investigation found. [NYT]

 

Brooklyn’s luxury market saw 12 contracts signed last week for a total of roughly $32.6 million. Both figures were down from the prior week, when the borough saw 13 contracts signed for about $41.4 million. The average contract went for about $2.7 million, and the properties spent an average of 287 days on the market. [Compass]

 

There were 10 luxury contracts signed for about $69 million in Manhattan last week. Both figures were down from the week before, when the borough saw 16 luxury contracts signed for about $118 million. The properties spent an average of 667 days on the market and had an average discount of 7 percent from the original to the final asking price. This was the market’s lowest post-Labor Day week total since 2012, when only five contracts were signed. [Olshan]

 
The We Company CEO Adam Neumann (Credit: Getty Images)

The We Company CEO Adam Neumann (Credit: Getty Images)

The We Company’s valuation might drop even further. Last week, the WeWork parent company was reportedly mulling halving its valuation, and the latest consideration of less than $20 billion would be a steep drop from the $47 billion valuation the firm claimed after raising more money this year. Possible public investors are skeptical about the company’s governance, ability to turn a profit and business model. The company’s underwriters plan to meet this week with investors to determine what changes they might need to spur enough demand for a public offering. Some investors want the company to shelve the IPO plan altogether. [WSJ]

 
Mayor Bill de Blasio (Credit: Getty Images)

Mayor Bill de Blasio (Credit: Getty Images)

The latest critic of New York’s new rent laws is… de Blasio? Mayor Bill de Blasio said he was “very concerned” by reports that Blackstone Group had stopped making upgrades to units at Stuyvesant Town-Peter Cooper Village. (On Friday, the landlord announced it would be renovating and leasing all units at the 11,000-unit complex.) Though de Blasio maintained that the overall impact of the new rent regulations were “very positive,” he noted there were “a variety of consequences.” “All of us want to see buildings kept up well,” he said. “So, obviously, this is something we’ve got to analyze and decide where to go from there.” [Crain’s]

 

A new report says the city’s waterfronts will be unrecognizable in 10 years. A report from Localize.city found that said the city’s waterfront transformation is far from over, pointing to projects at places like Brooklyn Bridge Park and the Gansevoort Peninsula. [amNY]

 

Sheldon Solow’s son is focused on developing farmland. Stefan Soloviev has acquired 325,000 acres of land over the past 20 years, which includes 135,000 acres of crops in Colorado, New Mexico and Kansas, along with about 190,000 acres of grass for his cattle. He is also working on reviving a 122-mile defunct rail line, telling Bloomberg, “I want this to be the railroad of the people of eastern Colorado and western Kansas. Anyone who screwed me over, anyone who said anything, I’ll remember them, and I will not let them be a part of it.” [Bloomberg]

 

The working-from-home trend is leading to a boom in second cities. Employees who either work from home, freelance or travel constantly are starting to move away from larger cities like San Francisco and Los Angeles to cheaper areas like Boise and Denver. New York City Residents are moving to Austin, Charlotte, Orlando and Raleigh. The migration is common late in the economic cycle, but as worries of a downturn arise the ultimate effects on the cities remain unclear. [WSJ]

 

Brooklyn tenants displaced by a massive fire are still waiting on answers about their home. A fire overtook a Sunset Park building at 702 44th Street in April, which housed a mix of condominium owners and 15 rent-stabilized tenants. The tenants are now suing the condominium corporation and the city’s Department of Housing Preservation and Development to demand that their homes get restored and the owners cover their relocation fees. But it’s possible that the condo owners could decide to tear down the building and start over, which would throw the displaced tenants into Brooklyn’s expensive housing market. [The City]

 

Testimony about the fatal East Village explosion from 2015 is about to begin. A Manhattan jury will begin hearing testimony on Monday against the landlord of the buildings and a pair of other people who prosecutors are accusing of setting up an illegal gas line and causing the explosion, which led to two deaths. They face charges of manslaughter and criminally negligent homicide. [NYT]

 

A Bedford-Stuyvesant project just landed funding from Gov. Cuomo’s “Vital Brooklyn” initiative. The development is known as Herkimer Gardens, and will feature 118 units of affordable housing and amenities including a wellness center, community space and a computer lounge. [YIMBY]

 

FROM THE CITY’S RECORDS:

 

New permit filings:

Alphonse Lembo of Monadnock Construction pre-filed an application to construct an eight-story apartment complex with 95 apartments at 481 East 164th Street in the Bronx. [DOB]

 

Residential sales:

Lucyna and Arminio Fraga sold a co-op at 115 Central Park West in Lincoln Square for $7.85 million. [ACRIS]

Compiled by Mary Diduch


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