While Manhattan is clearly one of the most desirable places on the planet to live—and much ink has been spilled over rising rental prices therein—there is another side to the coin. The sky-high land values that come along with rising rents are now keeping a firm lid on multifamily development in Gotham.
Despite the enormous demand from renters, lenders are far more interested in financing luxury condominiums, hotels and office and retail development in Manhattan, sources told Mortgage Observer. And while developers and bankers cite myriad economic and practical reasons for the hampered development pipeline for multifamily projects, the ever-loftier land costs are the bedrock issue.
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By approving a $1.5 billion project on the site of the old Domino Sugar factory in Williamsburg, Mayor Bill de Blasio recently signaled a willingness to let developers build larger projects in exchange for creating more affordable housing.
“It seems the de Blasio administration favors density over tax abatement,” said Ben Thypin, the director of market analysis at RCA. “They’d rather allow someone to build more than give them a tax abatement.”
Read More: http://commercialobserver.com/2014/03/multifamily-financing-in-manhattan-faces-rising-hurdles/
The investment-banking giant Eastdil Secured and the financial brokerage firm Meridian Capital Group were the two most active intermediaries in the origination of loans of $100 million or more in New York City last year, an exclusive analysis by The Real Deal found.
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Unlike property brokerage that is very closely tracked and larger deals are regularly publicly reported in articles or through databases like Real Capital Analytics and CoStar Group, loan brokerage remains largely unreported.
It was not clear why mortgage brokers publicize their deals less frequently than sales brokers. Insiders proposed several theories.
Ben Thypin, director of market analysis at Real Capital Analytics, said it may be caused by the fundamentally different relationship between a seller, a sales broker and a buyer, and between a borrower, a mortgage broker and a lender.
In a sales transaction there is typically a limited pool of potential buyers, but in a mortgage transaction, there are generally many potential lenders. In addition, a mortgage brokerage might do dozens of deals in a single year with a lender for one reason or another, and it is not beneficial for either the broker or the lender to publicize that relationship; therefore leaving it open to competition from others, Thypin said.
Read More: http://therealdeal.com/blog/2014/03/14/eastdil-meridian-top-list-of-large-loan-brokerages/
Ben Carlos Thypin
I am currently the co-founder of Quantierra, the world's first data driven real estate brokerage and investment manager. In my former life as Director of Market Analysis at Real Capital Analytics, I worked with press outlets large and small to provide them with great data and insightful commentary. Here are some of the results of this collaboration. For the rest, please check out the News Archive.