Condo developers could benefit bigly from GOP tax reform
A new tax plan proposed by secretary of the treasury Steve Mnuchin and GOP lawmakers might be a boon to Manhattan’s luxury condo developers. It calls for lowering the maximum rate paid by businesses, including many LLCs, which are taxed under the personal income rate, to 25 percent from 39.6 percent, among other alterations. While Manhattan condo developers pay the top 39.6-percent rate on apartment-sale profits, rental developers usually pay the 20-percent capital gains rate (which would not be reduced in the new tax plan). Such a huge decrease in the top income tax rate for LLCs would suddenly make condo development a lot more appealing in relation to rental development. [TRD]
New law bans salary questions, likely putting broker poaching on ice
Better think twice before trying to lure a top broker to change firms. Starting Oct. 31, employers in New York and a few other states will be barred from asking about a job candidate’s current pay, dealing a blow to poaching efforts. The goal is to protect women and minorities from wage discrimination, which often involves setting new salaries based on prior ones, rather than what a candidate may be worth. But this provision is seen by some experts as hurting the efforts of commercial real estate firms to approach brokers with offers to raise their salaries. Candidates can still say how much they make, but they can not be asked during negotiations. [TRD]
Home prices rise in U.S. even as sales slow down
Residential prices nationwide were up in July despite a drop in sales over the summer. According to the Standard & Poor’s CoreLogic Case-Shiller national home price index, there was an increase of 5.9 percent in July from the prior year, reported USA Today, just ahead of the 5.8 increase in June. Fewer homes on the market and growing demand prompted bidding wars, which drove up prices. Seattle, Portland, Oregon and Las Vegas saw the largest increases in July with Seattle rising 13.5 percent year over year. Overall, U.S. housing starts dropped for the fourth time in five months, according to Commerce Department data, revealing that multifamily construction is slowing. [TRD]
MAJOR MARKET HIGHLIGHTS
Luxury condo conversion of drug rehab center in NYC’s Upper West Side priced for $61 million sellout
Developers transforming a former drug rehab center into 14 luxury condos hope for a sellout of $61 million, according to an offering plan filed with the New York state Attorney General’s office last week. Greystone Development is spearheading the 33,000-square-foot project at 164 West 74th Street, formerly Phoenix House, where apartments will average about $4.3 million each. Greystone and partner Prime Rok Real Estate bought the seven-story Beaux Arts property in 2016 for $27 million. [TRD]
Owner of hurricane-damaged apartment complex in trouble with city of Miami
The landlord of a federally subsidized apartment complex where 80 tenants were forced to evacuate just before Hurricane Irma struck is in legal trouble with the city of Miami. A Sept. 15 inspection found Civic Towers unsafe for habitation due to mold and water intrusion from the hurricane, and the city is accusing owner Redwood Housing Partners of Burlingame, California of preventing residents from accessing their belongings, according to a Sept. 20 emergency motion in Miami-Dade Circuit Court. Tenants camped out in cars and in the street surrounding the two towers for nine days before being relocated to hotel rooms. [TRD]
Beverly Hills lot can be yours for $250M — but bring your developer
What can $250 million buy in Beverly Hills? About 97 acres of undeveloped land in the famed 90210 zip code, according to Curbed. The property is made up of 12 adjoining parcels and listing information for 9560 Cedarbrook Drive suggests buyers could build a 75,000-square-foot mansion or a gated community. The asking amount would beat the $200 million price tag on the famed Spelling mansion in Holmby Hills. Branden Williams, Jesse Lally and Michelle Saniei of Hilton & Hyland have the listing. [Curbed]
How to lure shoppers to a mall, Los Angeles style
This may be the ultimate place to shop ’til you drop. At the newly renovated Westfield Century City mall in Los Angeles, which is opening next week, shoppers can visit a cryotherapy clinic, enjoy VIP treatment and pay for parking with their phones. The lavish features are part of a two-year redevelopment to encourage people to shop at the mall instead of online. Look for an outpost of Mario Batali’s Eataly, Amazon Books, San Diego’s Crack Shack and Equinox, Next Health cryotherapy clinic and Gloveworx boxing studio. But the most L.A.-like enticements are likely the luxury VIP lounges, which offer private fittings, gourmet food deliveries and access to secret elevators that lead to every shop and restaurant in the mall. [TRD]
Chicago alone among global cities sees its housing undervalued
Chicago housing values are undervalued, making it the only one out of 20 global cities with that distinction, according to a study reported by Crain’s. Home values in the area are still 30 percent below their 2006 peak, according to the Global Real Estate Bubble Index for 2017, published by UBS Wealth Management’s chief investment office, which blamed sluggish employment and lackluster economic and income growth. UBS expected price growth to continue to lag in future quarters. In comparison, three-quarters of cities in the UBS study are overvalued, with San Francisco the most overvalued city in the U.S. Housing in Boston and New York is deemed at fair value, the report said. [Crain’s]