NYC transfer taxes dragging down commercial deals

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A budding recovery in New York City commercial real estate could be thwarted by some of the highest transfer tax rates in the country, industry executives told the New York Times. Combined, state and city transfer taxes here add up to about 3 percent — by comparison, Chicago’s taxes are a combined 1.2 percent and San Francisco’s are 1.5 percent — and that number is complicating a number of would-be transactions in a market where lenders are keeping a closer eye on their bottom lines. The most notorious recent example is the case of Stuyvesant Town and Peter Cooper Village, where lender Appaloosa Management is suing to force a bankruptcy rather than a foreclosure that would result in $200 million in transfer taxes. “With the market in so much turmoil, transfer taxes are something that has to be seriously considered and structured around in order to get any deals done,” said Michael Lefkowitz, a partner at law firm Rosenberg & Estis. [NYT]

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