A report from the San Francisco Business Times in California. “An iridescent San Francisco luxury apartment tower stretching 42-stories toward the sky has been welcoming residents over the past year, but a subcontractor involved in making the project a reality alleges that there is unfinished business with those who did the work. Hired for reinforcing steel and post-tensioning work at Essex Property Trust’s tower at 500 Folsom St., CMC Rebar West, a subsidiary of Texas-based Commercial Metal Co., has sued for over $5 million for unpaid work.”
“The lawsuit names the tower’s general contractor, Webcor Concrete, and a number of limited liability companies connected to owner Essex, a real estate investment trust that acquires, develops and manages multifamily properties in West Coast markets. It seeks to foreclose on a mechanic’s lien recorded by CMC in August for $5.6 million for labor, supervision, materials and equipment provided by the company for the project. Liens force payment by preventing a property’s sale or refinancing until they are removed. Filing the lawsuit is a necessary step in enforcing the lien.”
“Designed by SOM Architects, 500 Folsom St. includes units ranging from studios to two-bedrooms with rents starting at $3,500 per month and began leasing in 2019. The tower includes 32 penthouses and 109 below-market-rate apartments.”
The Business Observer Florida. “The Floridian, is what Larry Lieberman calls a reimagining of the active adult community concept. The model? Build high-touch, amenity-rich resort-style communities — ‘a place that would rival a country club,’ says Lieberman. But the pandemic —people in the Midwest, Northeast and in particular, Canada, aren’t able or willing to come down and see The Floridian in person — has stalled momentum. ‘People are saying gosh, ‘this is exactly what I want, but I can’t get down there right now,’ Lieberman says. ‘I believe there will be a lot of pent-up demand for this.’”
“Lieberman’s biggest lesson in multifamily development in Florida, and elsewhere, is tired-but-true: a strong market eventually comes down, so always be prepared for it. ‘Apartment guys will always overbuild,’ he says. ‘If you happen to be on the wrong end of the cycle, you are in trouble.’”
From Time Out New York. “Everyone knows there are a lot more apartments available to rent in the city than there used to be, but the actual number of available units could be even higher than we think. At least, that’s the argument made by Gary Malin, the COO of one of NYC’s largest real estate firms, Corcoran Group on a recent episode of Talking Manhattan. Manhattan rental prices are currently at the lowest they’ve been in almost a decade—with prices dropping a whopping ten percent just between June and July. Generally, over the last few years, the Manhattan vacancy rate has been about one percent but it reached as high as six percent in October.”
“We know what you’re thinking, ‘But isn’t that a little over one in 20 available units in the borough?’ Don’t worry, our math isn’t (that) bad. The 20 percent figure that Malin estimates comes from a phenomenon called ‘shadow inventory.’ This is both a very good name for an evil big box store as well as what it’s called when landlords don’t list all their available units.”
“Back in April, the New York Post estimated the ‘shadow inventory’ in the city could contain as many as 38,200 units. That number is surely higher now given the overall real estate trends of the last nine months. One thing that may keep prices high? The city’s shadow inventory isn’t expected to hit the market all at once. In the meantime, it’s another bit of additional info useful to use if you’re planning on signing a new lease and want to talk your rent down a bit. And if you haven’t negotiated your rent down yet, now is the time!”
From King 5 on Washington. “The novel coronavirus pandemic is quite literally reshaping the world we live in and our place in it, especially when it comes to the real estate market around Puget Sound Region. As the pandemic plays on, people are moving out of Seattle and into some unexpected places. The only downside to the market right now, according to Windermere Real Estate Chief Economist Matthew Gardner, is urban condos. ‘The attractiveness of those is the lifestyle,’ said Gardner. ‘You can walk to work. So much for that, anymore. You can walk to the theater. You can walk to the museums. Not so much today.’”
The Globe and Mail in Canada. “Living the downtown condo lifestyle stopped being cool in mid-March, 2020. And so, downtown condo prices in expensive cities such as Toronto are soft. The number of condos listed for sale has jumped not only in Toronto, but also Montreal and Vancouver. Disruption caused by the pandemic has reduced demand for rental units, sending rents lower and persuading some condo landlords to sell. ‘Tight downtown condo markets that previously commanded expensive rents are now thick with supply,’ a recent RBC Economics report says.”
“Bigger condos haven’t dipped much in price, but the market is less hectic than it was nine months ago. ‘Buyers aren’t paying astronomical prices and they’re not competing with 10 other people,’ said John Pasalis, president of Realosophy Realty. One example of finding value in larger condos today: Mr. Pasalis said a client of his firm recently bought a two-bedroom Toronto condo for the same price as the owner paid in 2018.”
“One more piece of advice is to find an experienced agent who is willing to offer sellers less than they’re asking. ‘When you’re looking for value, you’re basically paying a fair bit less than what the seller is asking,’ he said. ‘My experience in Toronto is that a lot of agents have only known an up market and many of them are reluctant to offer less.’”
The Eurasian Review on the UK. “Is this how the world as we know it ends, then — not with a bang, or even a whimper, but with the slow, silent death of shops, pubs, restaurants and live culture? As the global tourist industry collapsed overnight, it became apparent that we had all become overly reliant on it — even major cities like London were, in fact, economically lost without millions of tourists over-consuming on a daily basis.”
“In relation to residential rents, companies and individual landlords are also suffering, Shaftesbury explained that, in September, it was ‘struggling to re-let flats, with a fifth of its 622 residential properties lying empty, after many of their previous occupants, such as international students and young professionals, returned to their home countries at the start of the pandemic.’”
The Herald Sun on Australia. “Apartments have emptied out in popular inner-city hot spots that were previously deemed bulletproof, causing Melbourne’s rent prices to plunge. Richmond, South Yarra, Prahran and St Kilda have all had hundreds of renters vacate during the coronavirus crisis, with landlords unable to fill their properties again without dramatically reducing rents. Almost 16,000 properties in Greater Melbourne emptied out in the six months to October, with the number of vacant dwellings rising from 11,091 in March to 27,070.”
“The latest SQM Research report also shows Docklands and Southbank vacancy rates continue to skyrocket to new heights of 18 per cent, when they started at below 5 per cent in March. But vacant listings are also on the rise in popular inner-city haunts. Propertyology director Simon Pressley said renters would find some ‘basement bargains’ in the languishing CBD and the flow-on effect was being felt in neighbouring pockets.”
“‘It was interesting to see Richmond’s empty apartment numbers soar from just 127 in March to 553 in October,’ Mr Pressley said. ‘I suspect what we’re going to see for some months is vacancy rate increases in different parts of Melbourne.’”
“Collings Real Estate head of property management Caleb Pikoulas said apartments in Richmond and Collingwood were taking more than a month to lease, even after their weekly rate had been reduced by more than $100. ‘It took about five weeks to lease a one-bedroom unit in St Kilda, which is usually the sort of product that would fly out the door,’ Mr Pikoulas said. Student accommodation and sharehouses had taken the biggest hit during the pandemic, he added. ‘There are so many apartments on the market, so there’s so much for renters to choose from,’ Mr Pikoulas said.”