Residential Conversion of Financial District Bldg

25 Water Street, an iconic financial district building, is getting a residential facelift.
With a $535.8 million loan arranged by Newmark for GFP Real Estate, Metro Loft Management, and Rockwood Capital, the 1.1 million-square-foot office building will be bought and redeveloped in the largest ever office-to-residential conversion in the United States.

The renovation of the 22-story building is being redone to include some 1,300 residential units of varying size (studios to four-bedrooms). Amenities in the building will include a basketball court, steam room/sauna, indoor and outdoor pools, and other sporting/fitness equipment. There will also be a sky lounge, a rooftop garden terrace, and spaces for entertaining and coworking.

The property was built in 1969 and showcases views of lower Manhattan and New York Harbor from each floor. It sits on a double-wide street corridor with the widest exposure facing Water Street.

Remote Workers Resign to a Renters Crisis

Pandemic restrictions are lifting and most bosses and companies are accepting that remote work is here to stay. And as employees continue to enjoy the benefits of working from home, they are also looking for homes to work in. The rental market is fierce these days, with prime interest in Florida and across the Northeast region of the U.S.

A review of recent real estate data released in June by RentCafe, a subdivision of Yardi real estate software, indicates that Miami-Dade County, with its 20+ miles of beaches, had the most competitive rental market during the first third of 2022. Orlando and other parts of Southwest Florida are also in the top-ten list of cities, as are Harrisburg, Pa., North and Central Jersey, Grand Rapids, Mich., Rochester, N.Y., and Milwaukee.

What these cities all have in common is their excellent school systems, tranquil lifestyles, and family-friendly communities. The demand for rental properties is driven by high housing prices that have not budged in years and climbing mortgage rates prompting buyers to delay their purchase and seek a rental lease. While some cities are accommodating the increased demand, like Miami-Dade County where additional units were released to the rental market, other cities are not as quick to meet the need: Harrisburg, PA did not add any new apartments in the last four-month period, causing most tenants to renew their leases instead of moving out.

Chattanooga: the newest Hub of Tech, VC talent

Chattanooga at night

Chattanooga, Tennessee is one of the first American cities to have installed fiber optic cables with gigabit speeds across the entire city. While this upgrade was completed a little over 10 years ago, Mayor Tim Kelly says the pandemic brought a surge of new residents all looking for comfortable remote working spaces and quality of life.

Kelly, himself a former businessman and startup founder, credited the 2010 EPB investment in fiber optics as a forward-thinking move by previous leaders. He notes that while Chattanooga doesn’t offer financial incentives for relocation like other places, it does cultivate a vibrant cultural life and family-friendly ethos.

As a result- and specifically since the pandemic- Chattanooga has seen a new balance of tech companies and those working for them; once concentrated in major coastal cities, firms are now widely dispersed in more rural areas across the country. The Brookings Institution found that tech jobs in San Francisco, Seattle, and Los Angeles had slowed or disappeared, while regions like St. Louis, Philadelphia, San Antonio, and Nashville showed an unprecedented uptick.

Brickyard, for example, is a newly established venture fund based in Chattanooga. Cameron Doody, the co-founder, explains that as workers from traditional tech hubs swamped cities like Atlanta and Austin, residents of those cities moved to places like Chattanooga for quiet, comfort, and quality of life. Brickyard invests in international tech companies. The founders then come to headquarters in Chattanooga to rigorously expand their product and enjoy the benefits of amenities like a sauna, a gym, and a steam room.

4 Real Estate Predictions for 2014

Certainly, as the New Year arrives, investors and homeowners are anxious to know how the housing market will do. Will it be a year of prosperity and enterprise, or will it be another year of buckling down and hoping that the market recovers and flourishes at some point again?

The NJ Biz online site recently offered up opinions from a number of real estate insiders about the year ahead. Here is their advice.

The managing member of KABR Real Estate Investment Partners, Adam Altman said, “The multifamily and industrial markets have been strong for a few years to the point where most of the returns and opportunity have been squeezed out of the assets. In 2014, the market will show continued improvement in office and retail space in buildings that have strong sponsorship. In addition, urban transit hubs will continue to be a choice destination for development of multifamily and retail properties.”

Partner at Genova Burns Giantomasi & Webster, Frank Giantomasi, said “I think we’re going to see several noticeable surges, both in our urban centers and in the suburbs. Hoboken, Jersey City and Newark are going to be hot spots, with Hoboken and Jersey City seeing the lion’s share of new commercial office and hotel construction due to the exodus from Wall Street and New Jersey’s rising appeal to tourists. Businesses will continue to flock to Newark, too, given the recent incentives legislation, and I predict at least one new Fortune 500 company will announce that it’s coming to the Brick City in 2014.”

Many other sources have been making predictions as well. The online real estate database Zillow has predicted that mortgage rates will hit 5% by the time 2014 finishes. Erin Lantz, Zillow’s director of mortgages has tried to reassure the public by saying, “While this will make homes more expensive to finance – the monthly payment on a $200,000 loan will rise by roughly $160 – it’s important to remember that mortgage rates in the 5 percent range are still very low.”

Another prediction posted on predicts that foreclosure sales will not be a large part of the housing market in 2014. Foreclosure activity has been decreasing for over 36 months and foreclosure inventory has dropped nearly 33% since the end of 2012.

Time will tell how accurate these predictions are, and whether the experts have hit the mark for the year ahead.

Zeller Realty Purchases 13-Story Guaranty Bank Building

Zeller Realty Group, a Chicago-based commercial real estate company with executive vice president Ari Glass, recently purchased the Guaranty Bank Building in LoDo, Denver. This is the company’s first investment in the Denver market.

The sale was confirmed by Mary Sullivan and John Jugl of Holliday Fenoglio Fowler LP. Though the exact price was not disclosed, the building was likely sold for more than its 2007 sales price of almost $70M.

Sullivan said: “Zeller chose the strongest market in Denver for office property ownership, so they know it will be successful.”

In fact, brokerage reports show that LoDo’s vacancy rate has fallen as low as 6% while rents have increased significantly over the past year.

“They’ve wanted to be in the market for quite some time and have bid on other assets,” Sullivan continued. “They’re committed to the Denver market and want to own more assets here.”

Jugl added, “In LoDo, there’s limited available stock, so there’s a lot of pressure on existing buildings.”