A report from Market Place on New York. “Broker Peter Schubert estimates that between 10% and 20% of commercial real estate in Brooklyn is vacant right now — officially. ‘On top of that 10 or 20%, we know that there’s kind of this shadow inventory of these other spaces, which haven’t quite hit the market yet,’ Schubert said. ‘I think we’re at some kind of a record number, probably historic number that in some cases are in the 20 to 30% range.’”
From The Real Deal on New York. “Rudra Pandey snapped up a sprawling condominium at the Woolworth Building at a hearty discount. Pandey and his wif purchased a 4,623-square-foot unit on the 29th floor of the tower last month, property records show. The unit sold for $13.5 million, or $2,920 per square foot. Developer Alchemy Properties had initially aimed to sell it for 40 percent more, or $22.6 million, according to the condo’s initial offering plan filed in 2014 with the Attorney General’s office. But as Manhattan’s luxury condo market softened, so did prices.”
From Bisnow Boston in Massachusetts. “A judge handed down a small victory in the battle between prominent Boston developers over tens of millions of dollars allegedly lost in a massive failed Back Bay condo project. Suffolk Superior Court Judge Kenneth Salinger dismissed developer Stephen Weiner’s fraud claims against Suffolk Construction CEO John Fish as Fish moves forward his $100M civil suit against Weiner over the failed $800M 1000 Boylston tower, The Boston Globe reported.”
“Weiner Ventures Managing Partner Adam Weiner, a co-defendant in the lawsuit, had earlier professed confidence in the project, saying at the time in regards to a then-failed Simon Property Group high-rise in Back Bay, ‘We’re comfortable with the market. They weren’t.’”
The Real Deal on Florida. “Spider sold an assemblage in Miami’s Edgewater neighborhood for $7.25 million, after scrapping plans to build a 12-story condominium. Spider, led by Andres Goldenberg and Alejandro Eskenazi, sold the 28,000-square-foot site to Edgewater investor Jehad Audy, according to a press release. Spider’s decision to exit Miami is driven by the city’s high condo inventory and decreasing unit prices, Goldenberg said. The firm now is focusing on Detroit and Cleveland, which have upside potential and where investors will get a higher return. ‘It’s close to the start of a new cycle in Miami, but for us the project is done,’ Goldenberg said.”
From 7 Action News on Michigan. “Downtown areas around the country have lost some of their shine due to the pandemic. Recent data from the Downtown Detroit Partnership shows the Motor City’s downtown area isn’t immune. The data was taken from 4,487 units and shows that in the last quarter of 2020 the city’s average vacancy rate was 16%, around double was it in the first quarter of 2020. The data collected does not include subsidized units.”
“While the numbers show that people aren’t filling downtown Detroit apartments like they did pre-pandemic, there’s an upside for perspective renters: attractive move-in offers and cheaper rent in many cases. Mark Ruhle revisited the idea of moving. In part he said, because he wanted to be downtown, confident in the city and state’s rebound from the pandemic. ‘They said hey we’re dropping the rent prices if you would like to move here now, the prices are a lot cheaper.’”
The Globe and Mail in Canada. “The Toronto rental market is still suffering from a bulge in inventory that allows tenants much more negotiating power, says broker Robin Pope. Many are demanding – and receiving – cuts to their rent of as much as $300 to stop them from leaving for a cheaper apartment, he says. ‘The rental market is fine as long as you have it priced right. But prices have not recovered. Landlords have to negotiate down.’”
“Ira Jelinek, a real estate agent with Harvey Kalles Real Estate Ltd., says the midtown area around Yonge Street and Eglinton is also seeing a large number of condos for rent. ‘A lot of tenants are threatening to leave if they don’t get a better price.’ One owner recently called Mr. Jelinek to say that her tenant is moving out. She asked for his advice on whether to find a new tenant or sell. Mr. Jelinek’s research showed that the landlord would have to compete with more than 100 similar units for rent.”
“The small, one-bedroom units that used to rent for $1,800 a month now fetch between $1,400 and $1,500. ‘You have 110 to compete with,’ Mr. Jelinek told her. ‘There’s downward pressure on the price.’”
From The Connexion France. “Paris landlords are selling their flats as a lack of tourists in the past year has meant rental revenues have fallen by up to 70%. The Paris mairie estimates there are around 35,000 Parisian properties posted on tourist rental website Airbnb. But during the health crisis tourist numbers have plummeted, and many landlords have been left shouldering costs they cannot pay.”
“Frédéric Teboul, boss of multiple branches of estate agency Guy Hoquet Aleph in Paris, told newspaper Le Figaro, ‘we have more and more sellers in this position.’ ‘Banks froze their loans for a few months, but landlords had to start repaying mortgages and, without tourists, they weren’t able to,’ he said.”
“Landlord Philippe bought a studio in Paris at the end of 2019 and since then has only been able to rent it for a few weeks. He eventually sold the property for €320,000, after completing renovation works – €30,000 less than he bought it for. He said: ‘The losses are heavy, but what I want now is to lose as little money as possible.’”
The Vietnam Express. “After the third outbreak of Covid-19, house rents in HCMC have plummeted by up to half from pre-pandemic levels. Luong, a real estate agent mainly operating in districts 1 and 3, said the pandemic had severely affected businesses, resulting in a slump in demand for houses to run them. Luong said over 50 percent of houses in District 1 that were leased this year have seen rents cut by 35-40 percent, some even by half, and lease periods extended.”
“Talking to VnExpress, Nguyen Hong Hai, chairman of VNO Development and Investment Corporation, a company that transforms residential buildings into offices for rent, said the latest outbreak has driven rents even lower though they had already been low after the earlier outbreaks in 2020. ‘House rents have plunged to the lowest levels ever.’”
From Edge Prop Malaysia. “A favourite with students, Wangsa Maju and Setapak in Selangor have always enjoyed good rental yields of 4% to 6%. However, as the Covid-19 pandemic has revealed, there is no rental market that is foolproof. Oriental Real Estate Sdn Bhd team leader Alps Tan Joon Kiat has noticed many vacant units in Wangsa Maju and Setapak since the first movement control order (MCO) was instituted last year. ‘Two or three out of 10 owners are willing to drop rental by 10% to 20% just to get tenants. No one predicted the pandemic. What was worse was that no one foresaw it could last so long. It has been more than a year now,’ says Tan.”
“Landlords, he says, especially those of newly-completed units, feel the pinch after the expiry of the loan moratorium in September. Like other areas in the Klang Valley, Propnex Realty group leader Matt Tian observes that rents in Wangsa Maju and Setapak have dropped 20% to 30%. ‘A number of housing units rented to students have been vacant since last year. Some shops targeting student crowds such as saloons, milk tea shops, cafes and F&B outlets have shuttered,’ Tian observes.”
The Australian Financial Review. “Desperate landlords holding apartment stock in inner Melbourne have slashed their rents by hundreds of dollars a week and are now asking up to 25 per cent less to let their properties than 10 years ago. Hardest hit are apartments in Melbourne’s CBD, Docklands, Southbank and Carlton, where rental yields have been crushed by zero immigration, far fewer international students and changing renter preferences.”
“Riskwise CEO Doron Peleg warned investors against making a countercyclical play and investing in Melbourne CBD apartments. ‘This may still be a high-risk endeavour with potential issues over the short and long term,’ Mr Peleg said. He said inner Melbourne had ‘12,521 units in the pipeline, representing a further 5.1 per cent increase to established stock.’”
“David Anderson of Nelson Alexander said his agency did record leasing business each month from November to February as people took advantage of drastically reduced rents. ‘We have got one-bedroom apartments that were renting for $450 down to $300 or even $290,’ he said. ‘There are two bedders that prior to COVID were getting $650 to $700 a week that are $450 or $500 now.’”