National Grid backs down, WeWork is getting its $3B tender offer
A roundup of New York real estate news for November 25, 2019
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National Grid has relented in its standoff with Gov. Andrew Cuomo. The utility company had for months refused to activate gas hookups for returning and new customers on Long Island and in parts of New York City, prompting a threat from Cuomo to revoke its license to operate in southern New York. Under a deal announced Monday, National Grid will immediately lift its moratorium and has 30 days to contact smaller customers who want gas hookups and 45 days to start restoring service to larger projects, according to the New York Times. It will also pay $36 million in penalties. [NYT]
Cove Property Group has closed on a $724.2 million refinancing for Hudson Commons, its Hudson Yards office redevelopment, Commercial Observer reported. Blackstone Mortgage Trust provided the debt. [CO]
SoftBank will move forward with its WeWork stock tender offer this week. The $3 billion offer includes up to $970 million that co-founder Adam Neumann owns. SoftBank was expected to launch the offer earlier this month, but it was delayed after the bank tried to make technical revisions to the offer documents. [Reuters]
WeWork may look to its Japanese unit to figure out how to become profitable. The unit is already in the black and will be the springboard for a new service called Passport that WeWork plans to introduce across the globe. Passport users will be given “flexible” access to desks and shared spaces in an aim to boost occupancy. [Bloomberg]
Clipper Equity wants the U.S. Supreme Court to rule on the constitutionality of rent regulation. The firm has filed a petition the court following a New York Court of Appeals ruling in June that found tenants at 50 Murray Street should have been receiving rent-stabilized leases for years because of a tax break. Clipper argues that this decision violates the Fifth Amendment and asks whether enforcing rent regulation rules is a form of the court seizing property. [The City]
The Cuomo administration says it has no records of communicating with Amazon about its planned Queens headquarters. His Executive Chamber responded to a Freedom of Information Law request from the Wall Street Journal saying that it has no files on Amazon and no communication records with anyone at the company or at the state’s economic development authority about its planned (and since abandoned) headquarters in Long Island City. The administration has also denied similar requests from other journalists and advocacy groups. [WSJ]
The sale of the Rego Park portfolio has sparked debate about multifamily values. The rent-stabilized Kestenbaum portfolio sold for $129.5 million, about 38 percent less than its original listed price. Brokers differed on whether or not this was a sign that the new rent laws have diminished the value of multifamily properties. [TRD]
Aging Baby Boomers are preparing to sell millions of homes, but the younger generations might not want them. A quarter of homes seniors are set to vacate by 2037 are primarily in traditional retirement communities: Florida, Arizona or in areas of the Rust Belt that have long been losing population. Those areas may not attract Generation X and millennial buyers. [WSJ]
Financial firms think that returning Fannie and Freddie to private ownership could be a risky and disruptive move. Investors from firms including BlackRock and Fidelity Investments have told the federal government that any attempt to privatize Fannie Mae and Freddie Mac should include an explicit guarantee of the $5 trillion they issue in mortgage-backed securities, something only Congress can provide. The Trump administration has said it would move forward without this guarantee and that the government needs to reduce its role in housing. [WSJ]
Manhattan saw 30 luxury contracts signed for about $191 million last week. Both figures were up from the previous week, when 21 contracts were signed for about $158 million. The properties spent an average of 502 days on the market and had an average discount of 11 percent from the original asking price. [Olshan]
Brooklyn’s luxury market saw 23 contracts signed for about $66.6 million last week. Both numbers were up from the previous week, when 19 contracts were signed for about $61.3 million. The properties spent an average of 152 days on the market and had an average discount of 3 percent. [Compass]
Broadway veterans Phyllis Newman and Adolph Green’s former home is asking $24 million. The duplex at the iconic Beresford spans about 3,300 square feet with five bedrooms and four bathrooms. Newman, an actress and a singer, died at age 86 in September, while her husband Green, a lyricist and playwright, died in 2002 at age 87. [NYT]