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New York City's flatlining real estate market is about to get a jolt, The Real Deal reported. Months into a languor brought on by the coronavirus, one of Brooklyn's biggest landlords has struck a deal to sell a portfolio of rental buildings for $1.25 billion, sources familiar with the transaction told The Real Deal. It's the first such deal of its size to come together in the past year, and among the largest multifamily deals ever in Brooklyn. Joseph Brunner and Abe Mandel's Bruman Realty entered into contract earlier this week to sell the 14-building portfolio of residential rental buildings across Northern and Central Brooklyn to Manhattan-based investor Dalan Management, sources said. The portfolio consists of relatively new buildings constructed in recent years under the city's 421a tax abatement program. It spans 1.5 million square feet and includes roughly 1,275 residential rental units, a source said. People familiar with the offering said the two investors had put it on the market late last year. The contract price works out near an eye-popping $1 million per unit, hardly firesale pricing.
With small businesses across the city closed or on the brink of failure, a Manhattan lawmaker introduced a bill Tuesday to give some in his borough a break, The Real Deal reported. The legislation from City Council member Keith Powers would temporarily repeal the commercial rent tax for businesses for the remainder of the Covid-19 state of emergency. The 3.9 percent tax is imposed on base rent for commercial properties south of 96th Street in Manhattan. The bill would affect about 5,500 businesses with an annual base rent of less than $1 million. ''This is money back in the hands of small business owners,'' Powers said in a press release. ''Right now, New York City is experiencing a state of emergency and our response to help businesses recover must be commensurate. Relieving payment of the commercial rent tax at this time is a tangible benefit for businesses.'' But it would also hurt city tax revenues, which is why lawmakers have struggled to eliminate the unpopular tax despite decades of trying. They have managed to reduce its scope, but that was when the city was flush, not when it was cutting programs to balance the budget as it did last month.
Plans to rezone Industry City are, once again, dead on arrival - should the developer decide to move forward, The Real Deal reported. Brooklyn Council member Carlos Menchaca said in an Instagram video posted Tuesday that he ''strongly opposes'' the rezoning. Under City Council custom, as the local member, he has the power to make or break the proposal. ''I made it very clear that I would not support Industry City's rezoning unless certain conditions were met. Those conditions were not met,'' Menchaca said, likely referring in part to the developers' failure to remove hotels from the application. ''Industry City's rezoning will make it more difficult for working people to live in Sunset Park. And our city's land use process? Well, it favors corporate developers as they profit off the displacement of working-class workers.'' Representatives for the development team - a partnership between Jamestown, Belvedere Capital, Cammeby's International and Angelo, Gordon & Co. - had told Politico New York on Monday that it was considering pulling its $1 billion rezoning plans because of ''a number of convergent factors'' - that the concessions Menchaca was seeking were too steep and that the industrial campus is proving to be attractive to tenants under the current zoning. Back in September, after delaying the process, Menchaca said the rezoning application could proceed if the development team made certain concessions.
The Blackstone Group is mulling options for a new headquarters in New York City as large as 1 million square feet, sources told The Real Deal. The investment giant's current leases in the Plaza District expire in several years. Blackstone, headed by CEO Stephen Schwarzman and president Jon Gray, has asked a handful landlords to submit proposals for a new headquarters in Midtown and the Far West Side. Among the sites under consideration is a supertall office tower on Park Avenue proposed by Vornado Realty Trust and Rudin Management. The two have floated the idea of developing properties they separately own into a 1,450-foot-tall, 1.68 million-square-foot tower at 350 Park Avenue. The project is particularly attractive to Blackstone, sources said, because the site sits catty-corner to the firm's current headquarters at Rudin Management's 345 Park Avenue. Between that location and another office at Boston Properties' 601 Lexington Avenue, Blackstone occupies about 800,000 square feet on leases that expire in 2027.
New York City's biggest multifamily lender said today that rent collections in its $31.6 billion multifamily portfolio have remained strong, The Real Deal reported. During New York Community Bank's second quarter earnings call, executives reported that multifamily rent collections have been 85 to 90 percent of normal levels. The bank also reported a slight increase in net income, up 5 percent from the first quarter of 2020 to $105.3 million. NYCB was one of the first lenders to craft a forbearance program for landlords - and it is offering a six-month deferral period. Other banks have opted for three-month deferral periods with the option to renew later. Offering that much time for borrowers to restart full payments has benefited the bank's balance sheet, said CEO Joseph Ficalora. ''We have a higher rate of interest on every dollar we defer,'' said Ficalora. ''When you take massive amounts of money that are being deferred at rates we could not get at the marketplace, it's attractive to the bottom line.'' As of June 30, the bank had $3.7 billion in deferred multifamily loans. Most of those agreements will lapse at the end of the third quarter, he said.
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