The Daily Dirt: More bad news for real estate

An analysis of New York's top real estate news

New York /
Feb.February 07, 2020 11:42 AM
Mayor Bill de Blasio (Credit: Getty Images)

Mayor Bill de Blasio (Credit: Getty Images)

Tenants may soon be free of security deposits and broker fees. The past two days have been rough for the real estate industry.

During his seventh state of the city address, standing below a giant fiberglass whale, Mayor Bill de Blasio warned of “bad landlords” and lamented that New Yorkers aren’t fleeing the city, but are being priced out. He announced a push to eventually allow all tenants to avoid security deposits and seemed to advocate for a state bill that some have characterized as “universal rent control.”

All of that followed shocking news Wednesday (proud colleague moment: TRD broke this story) that state officials are interpreting the language of the June rent law to mean landlords must foot the bill for rental broker fees. Specifically, owners will be on the hook for payments to rental brokers they hire (if a tenant hires a broker, they are still on the hook to pay that fee). Landlord groups have already referred to the change — outlined in guidance issued by the Department of State — as a “death knell” for a chunk of the brokerage industry.

So, what’s next?

The Real Estate Board of New York has suggested that it will explore legal action if necessary. The mayor’s support of “good cause” eviction doesn’t do much for the state bill, but does indicate a broader comfort level with the measure. In fact, just five months ago his deputy mayor called the legislation the “flavor of the day” and said she was unsure what problem it was seeking to solve.

Prodigy Network investors claim they’ve been left in the lurch.

The crowdfunding company is facing another investor lawsuit, filed more than five months after founder and CEO, Rodrigo Niño, stepped down.

The latest complaint alleges the firm promised investors an option to collectively redeem $1.8 million in debt and equity on a hotel project in Chicago, but had ignored their redemption requests dating back to June, Mary Diduch and Sylvia Varnham O’Regan report.

Niño stepped down last year amid allegations of financial misappropriation. Investors have complained that the company hasn’t been open about the value of their investments nor the struggling projects it pledged to turnaround.

“I fear that I was … betrayed,” said Fernando Acedo Diaz, a Venezuelan investor who previously worked in real estate and now imports goods to sell in his country. He invested $70,000 into Prodigy’s AKA Wall Street in the Financial District. The value of Acedo’s investment — money he said he was saving for his six-year-old daughter’s education — has apparently fallen $41,000.

What we’re thinking about: Are you a developer or property manager grappling with the DOS guidance on rental broker fees? We want to hear from you! Send a note to [email protected].

CLOSING TIME

Residential: The priciest residential closing recorded Thursday was for a condo unit at 53rd West 53rd Street in Midtown, at $11.6 million.

Commercial: The most expensive commercial closing was for a student-housing complex at 15 East 11th Street in Greenwich Village for $104 million.

BREAKING GROUND

The largest new building filing of the day was for an 11,220-square-foot sports facility at 636 Howard Avenue in Grymes Hill. Wagner College filed the permit application.

NEW TO THE MARKET

The priciest residential listing to hit the market will be for a condo unit at 515 Park Avenue in Lenox Hill, at $25 million. Douglas Elliman’s Tal Alexander has the listing.

— Research by Mary Diduch

A thing we’ve learned…

Realestate.com, for some reason, redirects to Zillow.com. Thank you to Kevin Sun for pointing out the ubiquity of the Zillow Group.

Elsewhere in New York

— A creepy robot was sent to Bryant Park to survey park goers for potential coronavirus symptoms, the New York Post reports. Security gave the bot the boot, however, after it asked three people to take the survey.

— The Trump administration is suspending Global Entry and other programs that allow New Yorkers to cut down on the amount of time they spend in customs lines at the airport, Politico reports. Officials blamed a state law granting driver’s licenses to undocumented immigrants for the suspension.

— The City Council’s women’s caucus is calling on Manhattan District Attorney Cyrus Vance to resign, Gothamist reports. The group claims Vance bungled a series of high-profile sexual assault cases.


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