Articles 07.11.11

How to Be a Good Manager

For any of you who must supervise or manage a group of people, I'm sure that you frequently feel like you're “herding cats” (not Katz -- that would be more like a Bar Mitzvah). The number of people in my office has grown substantially over the past several years and one of my toughest tasks is to make sure they are all being managed properly. It's always useful to read how other companies have successfully managed this process. I found the article "Google Rules" very useful.

How Well-intentioned Laws can stifle Productivity and Personal Growth

Several months ago, an employee told me about his desire to work hard and learn the real estate business. He was hired as an assistant property manager and had no experience in that area. But he was eager to learn and wanted to work after hours and on weekends to learn the trade. "Wonderful, I thought" but my HR department quickly snuffed out this flicker of ambition. Apparently, allowing him to do so would run afoul of federal labor laws that prohibit employers from allowing employees to work overtime without paying them additional wages (not just at their base rate but at a premium rate to reflect the fact that they are working overtime). It doesn't matter that it was the employee's desire to work overtime. Apparently, this is a requirement that cannot be waived. Further, it wasn't that the employee would've wound up working for less than minimum wage. He was paid well enough that even with the extra hours that he wanted to work he still would've been paid in excess of the minimum wage rate. As much as he wanted to work and learn as much as he could, and as much as I wanted to see him do so, there was no way of making this happen without opening up a huge can of worms. How stupid!

Wal-Mart Versus Your Local Bodega

The opponents of Wal-Mart (mostly unions and their supporters) are sounding the alarm that if Wal-Mart is allowed to enter the City it will gobble up all the local grocery stores and bodegas. So what?! Visit the neighborhoods that Wal-Mart is seeking to enter. These are neighborhoods that are in neighborhoods that are severely underserved by the larger supermarket chains. As a result, residents of these neighborhoods are doomed to shopping at their local bodegas and mom-and-pop stores. While the image of a bodega and mom-and-pop store can often be quite quaint and conjure up an image of a hard-working family operating a store with pride, the truth is often that many of these bodegas are ripping off their customers by selling overpriced and outdated products in stores that are filthy and unsanitary. It is no wonder that recent polls of New York consumers showed overwhelming support for Wal-Mart. Perhaps injecting a little real competition into the system would be a wake-up call and cause the grocery stores and bodegas that are not properly serving their communities to close and be replaced by better quality merchants.

Community

For those of you who regularly follow my blog you've undoubtedly noticed that I often focus on articles and discussions about creating communities in an urban environment. Here's another article that I found intriguing about the use of good urban design and architecture to transform a sterile urban college campus into a true college community.

Blatant Self-Promotion (A Word From Your Sponsor)

I recently wrote an article entitled "Turnaround tale-A Building Management Case Study" which outlines the steps that Sierra took to turn around an office building that we took over management of last year.

Dodging a Bullet?

Many in our industry feel that we may have dodged a bullet with the recent modifications to the rent laws because the changes could have been far worse. However, before we all breathe a collective sigh of relief, we must bear in mind that the Governor has stated quite emphatically that he supports strengthening the rent laws and that much can still be done by way of administrative changes through the DHCR. Don't be surprised if we start seeing rulings that are unfavorable to property owners. Also, while these laws have been extended for four years, our "victory" may be very short-lived. The fact of the matter is that as soon as there is a democratic majority in the senate, we can expect that the laws will be revisited and substantial modifications will be made. Elections are only 15 months away.

Patriotism

Regardless of your politics, patriotism should never go out of style. We are blessed to live in this country and enjoy the freedom and opportunities that it gives us. I particularly enjoyed the recent article "100 Great Things about America". I'm sure that each of us could come up with our own list as well.

Articles 04.07.11

Why New York City Still Rocks!

Great article about why New York is such a unique place. For those of you who are diehard urbanites I also suggest the recently published book "Triumph of the City" by Nathan Glaeser, a Harvard economist. A quick and thought provoking read about the advantages of city living and how public policy has failed our cities over the past five decades.

Tips for Saving Time

Probably the best tip is to stop reading blogs! However, this article has some good ideas. I recently started using the web tool "Dropbox” as a way of being able access my files from any computer and to share them with others.

Quick Solution to New York City's Rat Infestation Problem

3 words.

“Neutered feral ferrets.”

If the city were to release these vicious little rat killers into the subway system the city's rat problem could be solved in less than a year. Not exactly the most politically correct solution but certainly effective!

Public Buildings, "Super Development Rights" and an Affordable Housing Solution

Creating affordable housing in New York has been an serious issue since the Dutch settlers first discovered Manhattan (good opening sentence but a bit of an exaggeration). Some of significant obstacles to the creation of affordable housing include high acquisition and construction costs, high real estate taxes and a limited supply of appropriate sites. Many programs have been devised to attempt to address these concerns but the problem still exists. A proposed solution: There exist a large inventory of excess development rights associated with city and state own properties throughout the city. To allow each governmental entity to realize the maximum benefit from these excess development rights and to also encourage the creation of affordable housing, the zoning resolution should be modified to create a "super development right" that would permit these excess development rights to be transferable to any property within a certain radius of the subject site so long as they are used for the construction of affordable housing. This would help average down the acquisition costs associated with the creation of affordable housing, increased significantly the number of potential sites and, if coupled with real estate tax abatements etc. would help reduce the operating costs of the buildings.

In addition, if developers were allowed to vacate older tenement style buildings and replace them with larger buildings (by either using the "super development rights" described above or other available techniques to increase density) containing an equal or number of affordable units this would increase significantly the number of sites available for affordable housing. For example, a developer should be permitted to demolish a 20 unit walk-up tenement style building and, by utilizing a combination of the excess development rights associated with that building and the acquisition of additional "super development rights,"to construct a 100 unit property containing 20 affordable units and 80 market rate units.

In order to accomplish this, the developer would have to be allowed to relocate the rent regulated tenants within these buildings. Not only would this result in the replacement of old decrepit housing stock with new, it would significantly increase increased the city's tax base. In addition, it would also generate additional revenues to the city or

the state from the purchase of the "super development rights" by the developer.

Means Testing and Rent Regulations

Perhaps one of the most perplexing questions about the current system of rent regulations is why there is no system of means testing to ensure that those who are receiving the benefits of the rent laws are actually those in need of affordable housing. The argument always made in support of rent regulations is that it is needed to preserve affordable housing. However, without a means test the system does not guarantee that regulated housing necessarily goes to those in need. In fact, it is truly ironic that many of our elected officials (US Congressman Charlie Rangel, City Council President Christine Quinn, former Governor Patterson, to name just a few) occupy rent regulated apartments while trumpeting the need to maintain the rent laws to preserve affordable housing for the needy.

To eliminate the hypocrisy in the system and to create a fund for the creation of additional affordable housing a means test should be established for rent regulated housing . For those current tenants whose income exceeds the threshold, the landlord would be permitted to not renew their lease, deregulate the apartment and then charge a market rent provided that the landlord makes a contribution to a city fund that would be utilize to the finance the creation of affordable housing. The amount of the

contribution would be a formula based upon the amount by which the landlord was able to increase its rent upon the vacancy.

Are you

a

Closet Republican?

I think this billboard on the West Side Hwy. says it all.

The Madness of City Real Estate Taxes

Surprise! Even as the net operating income of City properties declined over the past several years, our tax assessments have increased, in some cases quite significantly (see the article "The Madness of City Property Taxes"). Of course , on the face of it, this makes no sense but a careful analysis of the system of calculating real estate taxes makes it clear that tax assessments are a significantly lagging indicator. The reason, the determination of real estate taxes are based upon income and expense statements owners have to file about their properties. The information on these forms are from a previous year and are the basis of the calculation of tax assessments for the current year. The result is that tax assessments lag the market. This works the disadvantage of property owners in a bad market but to their advantage in an improving market as tax assessments decline even as the income of the building is going up.

The World Loves New York

In a world that seems to be going mad, New York is viewed as an island of stability (maybe it's because of all the schist on which our buildings are built!) The most recent example of this is the purchase of the former NBA store at 666 Fifth Avenue by a Spanish retailer for over $8000 a foot. Foreign money is fueling a resurgence of the real estate investment market in our city. The foreigners (who often have a much better world view than us) appreciate the political and economic stability that New York City offers relative to the rest of the world.

Negotiating 101

For some useful negotiating tips take a look at the article "Five things you should never say while negotiating." Strangely, "I love you" isn't included.

Web Site

As part of Sierra's rebranding of an office building that we took over last year, we created a website that has generated a tremendous amount of interest in the property. Last year the property suffered with a vacancy rate in excess of 30%. Today, the building is 98 % leased in no small part due to the rebranding of the building. Take a look at the website at http://www.bleeckerandbond.com/.

Articles 03.22.11

Two interesting articles --

• "Sierra Realty Putting West Side Studios on the Map with Spate of New Deals," from Real Estate Weekly
• and the story of candy concern Swissmaker and our own Brad Schwarz ink deal in "Twisting Times Square Lease," from The Commercial Observer

Enjoy!

Articles 02.18.11

The Taxi Cab as Economic Indicator

I have some pretty unscientific economic indicators that I watch to judge the state of our local economy. These would include the ability to get a cab in midtown Manhattan on a rainy day during rush-hour, whether my doorman gives me stock tips in the morning or how crowded the public tennis courts are in Central Park (the more crowded, the lousier the economy -- people give up their country club memberships). The article “Can You Hack it?” discusses what the history of the New York City taxi drivers says about the US economy.

Snow Removal: how the city can do it for free!

Shoveling snow is great aerobic exercise. The next time there is a major snowstorm, the city should require local health clubs to offer the hottest new exercise class -- the snow shovel aerobic workout!

Persistent Unemployment

Despite a pickup in the economy, unemployment continues to be a stubborn problem. I've always felt that unemployment issues are not just a function of the direct cost of hiring but also the myriad of rules and regulations with which employers must contend including fair labor laws, minimum wage requirements, OSHA requirements, etc., etc., etc., all of which add significantly to the cost of employment.My idea: during a severe economic downturn permit companies to hire unemployed workers and exempt the companies from complying with many of these rules and regulations with respect to these employees for a specified number of years. This would encourage employment by removing many of the obstacles and barriers that discourage employers from hiring.

The Silver Lining

Serious structural reform usually only occurs during periods of crisis. Only then are people compelled by economic necessity to resolve serious problems. The Great Depression gave birth to the New Deal, New York's flirtation with bankruptcy in 1977 resulted in significant labor concessions from local unions. Now with New York State and the city confronting the worst economic downturn in a generation there is a terrific opportunity to fix many of the structural problems that have plagued the city and state for many years. Pension reform, ethics reform, budgetary and fiscal policy, last in/last out firing policies etc. are all issues that have now been brought to the forefront and have a reasonable chance of resolution. Andrew Cuomo (much to my pleasant surprise) appears to be very much aware of the opportunity he has to effectuate this change. Hopefully he will have the willpower and strength to continue the fight until these changes are brought about. To see how other governors are taking advantage of the current economic downturn to effectuate serious structural reform, take a look at this New York Times article.

Efficiency

There is hardly a hard-fought political campaign that doesn't go by without one or more major candidates pledging to make government function more efficiently by eliminating government waste and needless spending. Yet, once the smoke clears and the election results are determined, these campaign promises often become empty pledges. What I find particularly alarming is that in all the discussions we are now hearing about budget deficits, nobody has really talked about how to make government function more efficiently as a way of reducing our deficits. They either discuss layoffs and service reduction or increasing taxes. It is time for politicians to act less like the politicians that they are and to behave more like the seasoned managers we need and take a hard look at how government functions and figure out how to eliminate much of the waste. The recent experiences of our airlines and auto companies are good examples of two industries that, through disciplined belt-tightening, have been able to rise from the dead. Our governments need to take a chapter from their books and weed out the gross inefficiencies in our systems.

The Greatest Year Ever

So what was the greatest year in the history of the city? For me, it was 1976. Even though the city was in the depths of a terrible downturn, a new creative spirit was beginning to take hold in Soho and the Village. I was living down on the fifth floor of a walk up on Sullivan Street in SoHo at the time. I was working as a bus boy in a trendy SoHo restaurant. In my free time I visited the new art galleries that were opening up in the area, listening to the new punk bands that were premiering at Max's Kansas City and CBGB’s, and hanging out in Washington Square Park and watching the world unfold around me while drinking Miller Hi-life out of a brown paper bag. I didn't have a care in the world. For other takes on the greatest year ever take a look at the article "The Greatest New York Ever."

All You Little Piggies!

Feeling hungry? Check out "Where to Eat."

Articles 01.04.11

Distressed Debt Trap -- Buyer Beware

In the event of the purchase of a mortgage at a discount, the buyer will recognize capital gain if they acquire title to the property by biddingon the full face value of the mortgage at the foreclosure auction. In such an event the amount of the gain will be the difference between the fair market value of the property less the amount the purchaser paid for the mortgage. The reason for this is that the winning bid at the auction will be deemed to be the fair market value of the property. For example: if an investor purchases a $5 million mortgage for $3 million and then wins the property at the foreclosure auction based upon a $5 million bid, the investor will have realized a taxable gain of $2 million.

How to avoid this pitfall: first, do not go to an auction but try to work out a settlement with the fee owner and any junior lien holders that does not require a foreclosure auction. Second, obtain an appraisal of the property that establishes its fair market value as price paid for the note.

Useful New York City Facts

The next time you're walking down the street and are stuck behind three rotund slow moving tourists from Indiana keep the following facts in mind:

in 2009 there were over 45 million visitors in New York City and that they contributed over $28.2 billion to our economy. As far as I'm concerned, let them continue clogging our streets as long as they continue spending their money here.

Read all these facts here.

Other interesting facts:

• Eating establishments: 18,951
• New restaurants in 2010: 157
• Average cost of a dinner in 2010: $41.81
• NYC is #1 US tourist destination for 1st time since 1990. NYC experienced a drop in tourism last year, but Las Vegas and Orlando were hit harder, allowing NYC to rise to the top.

Historic New York

for those of you who enjoy looking at pictures of historic New York the Museum of the City of New York has launched a portal into their collection of over 50,000 photographs of New York City from such notable photographers as Berenice Abbott, Samuel H. Gottscho, and Jacob A. Riis to name just a few. Check it out here.

My Cousin Vinny

I like to take naps. Every afternoon in my office. For about 20 minutes. I have a couch, small neck pillow, eye pillow and a white noise machine.

What you see here is the dial that allows me to select various modes on the white noise machine. Most of these modes, such as ocean, waterfall, and rain, are pretty standard on most white noise machines. This particular machine is unique, however, in its inclusion of my favorite mode-the "city" mode. This mode broadcasts the soothing sounds of city traffic, the steady hum of car engines, the melodic honking of horns and the three-part harmony of ambulance, fire truck and police car sirens.

I have to believe that whoever designed this white noise machine had to have been a fan of the movie "My Cousin Vinny" where the main character, played by Joe Pesci, had traveled from Brooklyn neighborhood to a quaint Southern town only to find that he could only get a good night sleep in the excruciatingly noisy local penitentiary.

You' re Ugly!

See if you can describe the mistakes in these two pictures of a recently completed luxury condominium on the southeast corner of 87th and Park Avenue. Give up?

First, this has to be one of the ugliest buildings ever built on Park Avenue. It is a glass wrapped middle finger to the entire neighborhood. It has absolutely no relationship to the building adjacent to it or to any of the other buildings along Park Avenue. Perhaps this could be forgiven if the architecture was truly remarkable or innovative but it's not.

It's no wonder that not a single unit in this development has been sold over the past year. Unfortunately for those of us who must live with this eyesore we can't just simply erase this building from the landscape but must live with it for the rest of our lives. Trevor Davis, the developer, should be ashamed of himself.

Second, as you can see in the lower left-hand corner of the window this building qualified for a 421-a tax abatement. So not only is this building ugly, it was constructed with a tax subsidy from the city. It's hard to imagine the necessity of granting a tax abatement for the construction of a building in one of the richest neighborhoods in the city. So, adding insult to injury, not only is this building incredibly ugly, we, as New York City taxpayers, subsidized its construction.

When Old becomes New

These are pictures of the newly constructed Ralph Lauren building on the southwest corner of 72nd St. and Madison Avenue.

Never has classical architecture looked so fresh and new. In a city that has grown accustomed to modern and contemporary architecture designed by such superstars as Frank Gehry, Renzo Piano, Jean Nouvel and others it is refreshing to see a return to classicism that has been so beautifully executed.

Sierra in the News

Journalist Jotham Sederstrom has a wonderful interview with our own Peter Braus in The Commercial Observer about ideas for Pier 57.

The good folks at City Biz report that Demetri Ganiaris has joined Sierra Realty as senior vice president of acquisition and development. Ganiaris has more than 15 years of experience inNew York City real estate and economic development. Prior to joining Sierra Realty, Ganiaris was a founding member and managing principal of Alder Real Estate Partners, a real estate advisory and brokerage firm that provided asset management and strategic planning services for such clients as Brevet Capital, Aris Real Estate Partners and EEK Architects. He previously worked at Vornado Realty Trust and the New York City Economic Development Corporation in the areas of program management, leasing, construction, contract management and real estate transactions. We are so pleased to have him aboard.

And again, Jotham Sederstrom writes in The Commercial Observer about Garry Steinberg moving from a highly successful career in retail to brokering space for the same with us at Sierra Realty. Awesome photo!

The Real Deal reports that our new building, former Swig FiDi, a seven-story, roughly 40,000-square-foot vacant commercial building at 140 William Street, is seeking tenants for the first time since it changed hands, after sitting vacant for several years. The tenant could be, well, anybody! The building could easily accommodate residential or commercial occupants, or even a hotel.

Articles 11.29.10

Current property valuations: I am constantly being asked whether property valuations are decreasing because of increases in capitalization rates. While capitalization rates have increased over the last two years what is more significant is the way in which properties are currently being underwritten. During the boom years, most underwriting utilized assumptions of projected large increases in rents often projecting increases of double digits each year. A clear sign of a market that was out of control. Currently, underwriting has come down to earth with more realistic rent projections. Consequently, property values have been more affected by the change in underwriting standards than by any change in capitalization rates.

Proposed Change in Lease Balance Sheet treatment: for those of you (hopefully, this is all of you) who don't regularly read the International Accounting Standards report you should be aware of a proposed accounting change that could significantly affect how companies view long-term leases. Could these changes encourage more companies to purchase office condominium units? Take a look at the article “Tenants, Landlords Could Face Dramatic Changes.”

High-tech Gizmo of the Month: observed in Boston, a trash can that compacts garbage using solar energy. The benefits: greater capacity for the garbage bin and easier and tidier collections.

Take a tour of the new East River Waterfront: having recently completed a tour circumnavigating Manhattan, I was struck by the huge number of new public parks that have open all around the perimeter of the island. One of the last missing pieces in this puzzle is the East River Waterfront, which, once this park opens, will be completed.

A country built on debt cannot stand: Abraham Lincoln once famously stated that a “House divided against itself cannot stand.” If he were alive today he might modify his speech and announce, “a country built on debt cannot stand.” More and more the American economy has become dependent upon consumer spending that is fueled by debt (either expensive credit card debt or, even worse, debt secured by second and third mortgages on a primary residence). No surprise then that during an economic contraction our economy goes into a deep swoon with high levels of bankruptcy and foreclosures. While less debt will result in less vigorous economic growth it will also result in fewer and less drastic economic downturns. Why then do we continue to bemoan the fact that the US consumer is spending less and saving more? Ultimately, this will lead to slower growth but more economic stability. Read “Consumer debt tumbles $100 billion.”

Do you think they paid overtime? Check out “Chinese workers build 15 story hotel in just six days.” You may want to think twice before checking into this resort.

For some interesting statistics about the third quarter multi-family sales market take a peek at the article “About that Third Quarter.”

Sierra in the News

Journalist Adrianne Pasquarelli in Crain's New York business reports that high-end Italian menswear retailer Tincati is making its U.S. debut in the Big Apple. The Milan based company recently signed a 14-year lease at 20 E. 63rd St., between Fifth and Madison avenues. The lease includes all 6,000 square feet of retail space in the five-story townhouse, nearly 1,100 square feet of which are on the ground floor. Asking rent, including taxes, was $800,000 a year. That price translates to a blended rent of $133 per square foot for the building.

The good folks at Real Estate Weekly have a story on our recent hire of Garry Steinberg, a licensed broker and seasoned commercial real estate specialist with more than three decades of experience in the fashion industry, as managing director. Steinberg will focus on the fashion, cosmetics, home and accessories industries.

Our friends at the always excellent Mann Report have a wonderful piece on how we brought Sprinkles, Hollywood's favorite cupcake bakery, to New York City.

The Mann Report also has a nice story up about Brooke Lovell, our new vice president of communications and marketing. Brooke will focus on our long-term marketing strategy, corporate communications, and managing client marketing campaigns.

Again from the Mann Report, a wonderful, perceptive piece on our own Peter Braus:

Over the years, [Braus] has represented such landlords as the Battery Park City Authority, C&K Properties, Goldman Sachs and the ownership of Brown Harris Stevens. Braus represents M&T Bank in New York City and has secured numerous locations for the bank, including their flagship location at 11 West 42nd Street. Recent transactions include the new Francois Payard Bakery at 116 West Houston Street and Sarabethʼs Tribeca location at 339 Greenwich Street. He has also been responsible for dozens more lease transactions in Nolita, Soho, and Tribeca for brands like Ed Hardy and Sigerson Morrison.

Articles 10.19.10

Food Glorious Food!
As a partial result of the economic downturn, street food has evolved significantly over the past two years. Affordable, good quality food and low operating expenses have become top priorities on the NYC lunch scene, and entrepreneurs have discovered that the food truck is far more cost-efficient than opening a restaurant. The trend is growing and the wide variety of foods being offered by these trucks is only exceeded by the various walks of life from which the entrepreneurs come.

Food trucks have now become such a part of our epicurean pop-culture that they even have their own annual awards -- the "Vendy’s." For a quick, cheap curbside meal, visit one of these trucks.

For those food snobs among you who wouldn't be caught dead eating a bison burger at a curbside food truck check out the article "Best of NYC Dining: 10 Most Exciting Restaurants."

And for the latest trends in restaurant design take a look at the article "Great-good-places."

Now that you've gorged yourself on a cholesterol-rich lunch from the trucks then hit one of Manhattan's most exciting restaurants for dinner, you should read the article "Fourth Stroke Indicator." Early detection can be an absolute lifesaver.

Innovations in Parking

An idea whose

time has arrived! Bicycle parking, one dollar a day, $20 a month. No more biking around with a 25 pound chain and lock wrapped around your waist.

For truly cutting edge parking technology take a look at the presentation for the "Multi-Parker 730."

Road Trip!

Next time you're itching to put the pedal to the metal and feel the wind of the road ripping through your golden locks, take look at the article "27 Ultimate Road Trips" first for some interesting rides.

Articles 8.31.10

Local Manufacturing Jobs: stick a fork in it, it's done?

Contrary to popular belief manufacturing as an industry is not dead in New York. In fact, as the article "Made in Brooklyn" illustrates certain types of manufacturing jobs are thriving in New York.

Grab your Nuts and Have Sex 700 times a year: The Best Health Advice I've ever received.
Need I say more? Check out "What Works."

New York Uncovered
One of the great things about living in New York City is that it's very difficult to get bored. The city is dynamic, multicultural, and amazingly diverse. I've lived here over 50 years and can always find something new to explore. Two recommendations: Chicago has its famed architectural tour conducted from a tour boat on the river. Now New York has a similar tour. If you're a building nut like my wife and me, I heartily recommend this tour. For more information look at the article "A Singular Perspective on the Urban Mosaic."

For something more pastoral, take a trip to Governors Island. Viewing it from a distance does not do it justice. It needs to be experienced to be truly appreciated. Besides being architecturally interesting and offering great views of the city where many cultural programs that are going on there that should be experienced. Go by yourself or bring the kids. The article "Governors Island as Playground" is aptly named.

How to Seduce a Community
Given the experience of Wal-Mart in unsuccessfully attempting to open its first store in New York City over the past decade it is somewhat surprising to find other big-box retailers who have succeeded where the country's biggest retailer has failed. For a primer on how to accomplish this difficult task take a look at the article "A Decade of Wooing."

How to Push a New Yorker's Buttons
We all have our pet peeves. The article "What drives New Yorkers up a wall" describes New Yorker's top annoyances. Don't expect too many surprises.

Jingle Mail

Those of you who are regular readers of my blog know my fascination with various terms that crop up from time to time that indicate what is going on in the marketplace. The newest entry "jingle mail" refers to a property owner mailing the keys to a property back to their lender. Definitely a sign of the times!

And the winner is!
(And, no it's not "Stairway to Heaven." So what is Rolling Stone's top rock 'n roll song of all time? Take a look.

News and Views, August 13

Stats and the City

For some curious statistics about the City check out this article.

What I found particularly interesting is that while $2 today buys you what $1 got you in 1985 (a 100% inflation rate over 25 years), average apartment prices for a one bedroom co-op/condo in Manhattan have increased 185% (significantly higher than the inflation rate), the average asking rent for commercial space has increased 76% (significantly less than the inflation rate), and the average 30-year fixed rate for New York area co-op mortgages has decreased from 13.28% in 1985 to 5.13% in 2010 (which probably explains why the appreciation in co-op/condo prices has greatly outpaced inflation during this period).

Also interesting is that while the city's population increased by 1.2 million people over the 25-year period, the number of people employed only increased by 200,000 during that time. Yet the unemployment rates were 8.2% in 1985 and 9.4% in 2010. Given the large increase in population relative to the modest increase in number of people employed over the same period together with slightly disparate unemployment figures it's difficult to explain this phenomenon.

My guess is that the number of children and elderly in the city relative to those in the workforce has increased significantly during this time period.

Operating Figures for Rent Regulated Housing

The "Highlights from the first three RGB Reports" provide some very interesting statistics relating to rent regulated housing in New York. The statistics are based on 2008 data and show that the average monthly rent for all rent stabilized units was $1,012 per unit ranging from a high of $1,404 in Manhattan to $743 in the Bronx. Operating and maintenance costs averaged approximate $739 per building.

The most startling number to me, however, was the number of properties that are characterized as "distressed" (buildings that have operating and maintenance costs greater than gross income). At 12.8% (or one in every eight buildings) this is an extremely upsetting number, particularly given that this was data collected based upon 2008 results which, for the most part occurred before the economic downturn fully affected New York.

I would expect that for 2009 and 2010 this statistic will be even worse. Under no set of circumstances is it healthy for 1/8 of the rent regulated housing stock to be in distress. This is bad for landlords, the tenants who have to live in substandard conditions as a result, and the city and the state that stand to lose significant tax revenues as a result and who ultimately may become the landlord of last resort.

Alive and Well!

It's expected that the 2010 census will demonstrate the resilience and strength of our city. New York is the only large city in the Northeast and Midwest, including Philadelphia and Chicago, that has shown substantial population gains since 2000. In fact, New York City has been adding, on average, almost 1000 people a week since 2000. What's even more interesting is the characteristics of these people and what it tells us about how the city has changed during the past decade and what we can expect going forward. For more information check out Crain’s white paper on "what the 2010 census..."

Three Years of Law School and This is What We Get

A recent newspaper article headlined " Alton attorney accidentally sues himself". Can't say that I'm surprised.

Great Idea of the Week

One political candidate’s answer to the proliferation of governmental rules and regulations: Office of the Repealer. He's got my vote.

25 Big Ideas to Change New York

Definitely worth a quick read.

No, It's Not "Stairway to Heaven" (volume 1)

Rolling Stone magazine just published their list of the 500 greatest songs of all time. I've included their list of the second through 10th. Number one will be included in my next blog posting.

Sierra in the News

Some interesting news this week:

• The New York Real Estate Journal notes that Sierra's own Jeffrey Anderson has leased 1,100 s/f to Musmanno of The Musmanno Group at 229 East 60th Street.
  

• Attention cupcake lovers! The Real Deal reports that Sierra helped our fave bakery, Sprinkles Cupcakes to lease 780 Lexington Avenue, across the street from Bloomie's.

• Real Estate Weekly's On the Scene writes about Sierra's Barry Sanet as the exclusive agent for Renaissance Studios at 130 West 57th Street -- exciting mixed use with some very glamorous retailers --

and finally,

• The Commercial Observer notes that yours truly (James Wacht) is Appleseed Advisory Council Chair -- check out their wonderful NYC advocacy and social justice work here