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Manhattan Office Market Shows Signs of Recovery as Worker Return Gains Momentum

By Columbus International,1 July 2024

In a promising turn for New York City’s commercial real estate sector, recent data suggests that the Manhattan office market is gradually regaining its pre-pandemic vigor. According to an analysis by the Real Estate Board of New York (REBNY), office “visitations” in May reached 74% of 2019 levels, marking a notable improvement from 70% in the same month last year.

This upward trend in office occupancy offers a glimmer of hope for property owners and investors who have grappled with the challenges posed by remote work policies in the wake of the COVID-19 pandemic. The data, derived from Placer.ai location information, encompasses visits to 350 office buildings, tracked through cellphone records, and includes retail traffic within these properties.

While the May figure showed a slight dip from April’s 75% due to Memorial Day weekend travel, analysts believe the overall trajectory remains positive. Keith DeCoster, REBNY’s director of market data and policy, notes that excluding the holiday weekend, May’s numbers would have surpassed those of April.

Key Takeaways:

Manhattan office visitations in May 2024 reached 74% of pre-pandemic levels.
Year-over-year improvement from 70% in May 2023 indicates steady recovery.
Data reflects both office worker return and retail traffic in office buildings.

Looking ahead, industry experts are cautiously optimistic but remain vigilant. “We will watch closely to see if visitation rates increase, hold steady or decline during the summer in line with historic behavior,” DeCoster adds.

As the New York office market continues to evolve, stakeholders will be keenly observing these trends. The gradual return to office spaces could have far-reaching implications for the city’s economy, from local businesses that rely on office worker foot traffic to the valuation of commercial real estate assets.

For investors and business leaders, this data provides valuable insights into the changing dynamics of urban work environments and may inform strategic decisions regarding office space utilization and real estate investments in the post-pandemic era.

Real estate investments in Milan. An in-depth market analysis and numerous tips from Corriere della Sera

By Columbus International,27 June 202427 June 2024

In an ever-evolving real estate market, Milan continues to be one of the most attractive locations for investors. A recent study reveals that about 20% of real estate transactions in the Lombard capital are aimed at generating income. But how truly profitable is investing in Milan’s brick and mortar? Il Corriere della Sera has conducted a detailed analysis to shed light on this trend.

Comparing Returns: Real Estate vs. Government Bonds

To assess the actual profitability of real estate investments, we compared Milan’s rental yields with those of 8-year Italian Government Bonds (BTPs), currently at 3.2% net. Our analysis is based on standard 8-year free-market rental contracts, assuming a reliable tenant and regular payments.

The Milan Landscape: Data and Figures

Based on data provided by immobiliare.it, we examined a typical 70 m² apartment:

Average purchase price: €378,000
Monthly rent: €1,631
Gross yield: 5.17%
Net yield: 3.36%

It’s important to note that the net yield, considering taxes and expenses, is only slightly higher than that of BTPs, but carries significantly greater risks.

The Geography of Returns

Our research highlighted considerable disparities between different areas of Milan:

Historic center: 2.3% net yield
Premium areas (> €350,000 for 70 m²): yields lower than BTPs
Peripheral areas like Baggio and Ponte Lambro: yields up to 4.6% net

Milan’s Hinterland: An Interesting Alternative?

Extending the analysis to the province, surprising data emerges:

Average yield: 6.8% gross, 4.4% net
Top 3 for monthly rents: Gorgonzola (€1,156), Vimodrone (€1,084), Segrate (€1,075)
Municipalities with the best yields: Turibigo, Truccazzano, Tribiano (> 6% net)

These data suggest that the hinterland could offer more profitable investment opportunities compared to the city center.

Short-Term Rentals: The New Frontier?

The short-term rental phenomenon is gaining ground, promising higher gross returns. However, management costs, taxes, and platform commissions significantly erode margins. The profitability of this model seems to be limited mainly to specific areas of Milan.

Conclusions for Investors

Real estate investment in Milan can still offer interesting returns, but it requires careful risk assessment and deep knowledge of the local market. Investors should consider:

Location as a key factor for profitability
The potential for capital appreciation in developing areas
Management and maintenance costs, especially for short-term rentals
The financial stability of tenants for long-term rentals

In a market characterized by high prices and compressed yields, due diligence and a well-thought-out strategy are more crucial than ever for real estate investors in Milan.

Source: Corriere della Sera

Iconic Four Seasons New York to Reopen After Billionaire Owner and Management Reach Agreement

By Columbus International,26 June 2024

In a significant turn of events for New York City’s luxury hospitality sector, the Four Seasons Hotel New York is set to reopen its doors this September, ending a four-year hiatus that began with the onset of the COVID-19 pandemic. The reopening comes after a protracted negotiation between the hotel’s owner, billionaire Ty Warner—best known as the creator of Beanie Babies—and Four Seasons Hotels & Resorts, the property’s management company.

Sources close to the matter reveal that a key factor in breaking the impasse was the decision to convert approximately 50 of the hotel’s 368 rooms into residential apartments. This strategic move is expected to generate substantial maintenance fees from full-time residents, helping to offset the hotel’s operating costs and address Warner’s concerns about profitability.

The dispute between Warner and Four Seasons centered on the fee structure and operational expenses of the iconic property, which Warner acquired in 1999 for $275 million. The Beanie Babies tycoon had reportedly been pushing for a profit-linked fee model, arguing that the existing arrangement was unsustainable given the hotel’s financial performance.

While the exact terms of the agreement remain undisclosed, the resolution appears to be mutually beneficial. Four Seasons will retain management of the property, maintaining its presence in one of the world’s most competitive luxury hotel markets. Meanwhile, Warner stands to benefit from the potential real estate play and a more favorable operational model.

The reopening of the Four Seasons New York is likely to have a ripple effect on the city’s high-end hospitality sector. As one of the most expensive hotels in New York, its return signals renewed confidence in the luxury travel market and could spark further investment in the segment.

However, challenges remain. The hotel still needs to reach an agreement with the New York Hotel and Gaming Trades Council, the powerful union representing hospitality workers. Labor disputes have been a significant hurdle in the property’s path to reopening, with former employees having filed lawsuits over wages and severance pay.

The resolution also extends beyond New York. As part of the agreement, Warner and Four Seasons have committed to reopening the Biltmore Santa Barbara, another luxury property that has been closed since the pandemic began. This California hotel is slated to welcome guests again in spring 2025.

As the Four Seasons New York prepares for its September reopening, the hospitality industry will be watching closely. The success of this high-profile property could serve as a bellwether for the luxury hotel market’s post-pandemic recovery and potentially set new trends in hotel ownership and management structures.

For Ty Warner, whose net worth Forbes estimates at $3.8 billion, the reopening represents a significant milestone in his real estate portfolio. For Four Seasons, it marks the revival of one of its flagship properties in a key global market. And for New York City, it signals another step towards normalcy in its vital tourism and hospitality sectors.

Source: Curbed and New York Post

Photo via Four Seasons New York

JPMorgan Chase Expands South Florida Footprint, Doubling Miami Office Space

By Columbus International,25 June 2024

In a bold move signaling its commitment to the burgeoning South Florida market, JPMorgan Chase (NYSE: JPM) has announced plans to significantly expand its presence in the region. The financial giant will double its office space in Miami’s Brickell district and establish its first West Palm Beach location, accommodating a growing workforce and client base.

Miami Expansion The bank is set to lease an additional 80,000 square feet at 1450 Brickell Avenue, effectively doubling its current footprint in the tower. This expansion will create room for 400 new employees, underlining JPMorgan’s confidence in the area’s economic potential.

West Palm Beach Entry In a strategic move to tap into Palm Beach County’s affluent market, JPMorgan Chase will open a 13,000-square-foot office at Related Companies’ 360 Rosemary development in West Palm Beach. This new location is expected to house over 60 employees.

Regional Growth Strategy Jonathan Bello, co-chair of JPMorgan’s South Florida Market Leadership Team, emphasized the strategic importance of the region, stating, “Miami and South Florida are home to an increasing number of our clients, customers, community partners and employees, and a strategic location for our operations in Latin America.”

The bank’s two-year expansion plan includes:

Renovating its existing 80,000 square feet in the Brickell tower
Opening new offices in Melbourne, Sarasota, and Fort Myers
Launching three new J.P. Morgan financial centers in Palm Beach, Jupiter, and Palm Beach Gardens

First Republic Integration Following its acquisition of First Republic Bank in May 2023, JPMorgan Chase is converting some former First Republic locations into new customer-facing offices. Jen Roberts, CEO of Chase consumer banking, noted that these centers will offer “the strength and scale of JPMorgan Chase and First Republic’s commitment to exceptional client service.”

Market Context JPMorgan’s expansion comes amid a broader trend of financial firms flocking to South Florida, attracted by the influx of wealthy individuals and Latin American capital. Notable moves include Goldman Sachs doubling its Brickell presence and BNY Mellon Wealth Management strengthening its Miami team.

The bank currently boasts 16,400 employees across Florida, serving 6.2 million customers through over 400 branches. With approximately 5,400 wealth advisers managing around $900 billion in assets, JPMorgan is well-positioned to capitalize on the region’s growing wealth management opportunities.

Real Estate Impact The 80,000-square-foot lease expansion ranks among the largest in South Florida this year. Alan Ojeda, Chairman of Rilea Group, which developed 1450 Brickell, highlighted the building’s appeal to blue-chip companies and its ability to “command some of the highest blended rents in the city today.”

As JPMorgan Chase doubles down on its South Florida investments, the move not only reinforces Miami’s status as a financial hub but also signals continued confidence in the region’s economic prospects. With this expansion, the banking giant is poised to enhance its services and capture a larger share of the dynamic South Florida market.

Photo and source via Bisnow/Google Maps

Milan’s Next Cultural Powerhouse: Scirocco Hub Signals Urban Renaissance

By Columbus International,24 June 20249 November 2024

In a bold move set to redefine Milan’s cultural landscape, Lendlease and Mare culturale urbano have joined forces to birth Scirocco, a cutting-edge cultural hub in the burgeoning Milano Santa Giulia district, reports Il Sole 24 Ore. This 500-square-meter hybrid space, nestled within the Spark Business District, represents a fusion of art, commerce, and community engagement.

Positioned strategically in the Spark 3 building, Scirocco aims to become a vibrant nexus for cultural, musical, and sporting events, accessible to all Milanese citizens. Andrea Capaldi, the visionary co-founder and artistic director of Mare culturale urbano, envisions Scirocco as more than just a venue. “We’re creating a social and cultural beacon,” Capaldi asserts, “a space that will resonate with both current residents and future inhabitants of this evolving neighborhood.”

This innovative project is a cornerstone of Lendlease’s ambitious urban regeneration initiative for Milano Santa Giulia. Spanning over one million square meters, this development is poised to become one of Italy’s most significant urban renewal endeavors. At its heart lies a sprawling urban park, surrounded by a carefully curated mix of public amenities and services tailored for both individuals and businesses. Claudia Imparato, head of fund & asset management at Lendlease Italy, exudes confidence about the partnership’s potential. “Scirocco transcends the conventional notion of an artistic or retail space,” Imparato explains.

“It’s engineered to be a catalyst for social cohesion and inclusivity, fundamentally reshaping the neighborhood’s DNA.” Industry insiders view Scirocco as merely the opening salvo in a series of transformative projects slated for Milano Santa Giulia. This district is on track to emerge as a dynamic new hub in Milan’s southeastern quadrant, challenging traditional urban living paradigms and setting new benchmarks for city development. As Milan continues to cement its status as a global design and fashion capital, projects like Scirocco underscore the city’s commitment to cultural innovation and community-centric urban planning. It’s a clear signal that Milano is not just preserving its rich heritage, but boldly reimagining its future.

Source: Il Sole 24 Ore

Catherine Zeta-Jones and Michael Douglas saying goodbye to ritzy $12M New York estate

By Columbus International,21 June 2024

Hollywood A-listers Catherine Zeta-Jones and Michael Douglas are waving goodbye to their posh Hudson River estate, slapping a cool $12 million price tag on their Westchester County palace.

Nestled in the ritzy village of Irvington, a mere 20 miles from the hustle and bustle of Manhattan, this gated oasis sprawls over a luxurious 12 acres. The stunning property, snatched up by Zeta-Jones for $4.5 million in 2019, has seen its fair share of star-studded soirées, including a recent campaign bash for President Biden, according to the Wall Street Journal, which first reported on the listing.

The “Wednesday” star, 54, reflected on their time in the mansion with fondness. “When I purchased our Irvington home I knew our family would share many happy times here, and we have!” she told the Journal, adding that with both of their kids now having flown the coop, the timing feels “right” for a sale. “Michael and I plan to spend more time in Bermuda and Europe,” she revealed, citing work commitments pulling them overseas.

The couple has a home in Bermuda that has been listed for sale in the past. Made up of eight bedrooms and 12 baths, their upstate estate is steeped in history, boasting 130 feet of prime river frontage once owned by Charles Lewis Tiffany of Tiffany & Co. fame, as well as the Matthiessen sugar dynasty. The current Georgian-style stunner, dating back to the 1920s, spans a whopping 12,000 square feet with grand columns and an elegant brick-and-stone façade. A 100-foot terrace offers idyllic river views. Inside, the splendor continues with a two-story, oak-paneled library, an indoor pool, and a kitchenette on the lower level that opens to a picturesque terrace. The power couple has tastefully updated the mansion while preserving its original charm, blending formal and casual spaces seamlessly.

“There’s a blend of formal and informal rooms,” listing agent David Turner of Compass added. “There’s a family room next to the kitchen, which many of these old mansions don’t have.” The estate is a stone’s throw from Irvington’s charming main street, bustling with shops and restaurants and offering a quick train ride to Manhattan. “Longmeadow is a spectacular property — a true Hudson River estate. The owner has done a masterful job in renovating the house in a cool, comfortable and modern aesthetic that preserves its original grandeur and integrity,” Turner told The Post.

Five of the bedrooms come with ensuite bathrooms. The Oscar-winning duo, who previously resided in nearby Bedford, have a knack for lucrative real estate flips. Zeta-Jones sold their Bedford home for a staggering $20.5 million after buying it for $11.25 million. Douglas, meanwhile, once listed their Central Park West pad for $21.5 million.

Vesta Expands To Portofino And Pietrasanta As Valuation Hits $50 Million

By Columbus International,19 June 2024

Vesta, the restaurant brand owned by Triple Sea Food Holding (Tsf), is opening two new locations this summer in the upscale seaside towns of Portofino and Marina di Pietrasanta.

The moves come as the holding company, which is partly owned by Leonardo Maria Del Vecchio’s Lmdv Capital, has seen its valuation recently estimated at around $50 million by one of the Big Four accounting firms. The new Vesta Portofino will be located inside Le Carillon beach club on the picturesque Paraggi Bay, which was taken over creatively this year by Dolce&Gabbana to rebrand as Le Carillon Dolce&Gabbana Resort. In Marina di Pietrasanta, Vesta has taken over the entire Franco Mare beach club and will offer 53 private cabanas with dedicated menus alongside the restaurant, as well as an ice bath for fresh catches and a Basque-style grill. The dual openings mark the fifth and sixth locations for the rapidly expanding Tsf Holding in under two years. They join the original Vesta in Milan’s Brera district along with the company’s Trattoria del Ciumbia and Casa Fiori Chiari restaurants in the same neighborhood.

“The results and growth prospects are so solid that the valuation of Tsf, conducted by one of the ‘Big Four’ global consulting firms, was recently estimated in the range of €45 million ($50 million),” said Davide Ciancio, CEO and co-founder. “With the new 2024 openings we’ll cross the threshold of 250 employees and look ahead confidently to new projects in 2025 across all three of our brands.”

The premium seaside expansions underscore the soaring ambitions of the upstart Milan hospitality group as it rides a wave of demand for high-end dining experiences in Italy’s most prestigious locales. With a valuation typically reserved for tech unicorns, Tsf is aiming to quickly become a dominant national player in the country’s restaurant scene.

Source: Monitor Immobiliare
Photo: Instagram

Billionaire Trader Doubles Down On Miami’s Financial Future

By Columbus International,18 June 2024

When hedge fund billionaire Ken Griffin relocated his $51 billion Citadel from Chicago to Miami last year, he cited the Sunshine State’s business-friendly policies and Chicago’s rising crime rates as catalysts for the move.

Now the famously aggressive trader is expanding Citadel’s footprint in Miami before employees have even settled into their new digs. Citadel and its sister market-making firm Citadel Securities are adding two extra floors to their already massive eight-floor pre-lease at OKO Group and Cain International’s newly built 830 Brickell tower in Miami’s financial district.

The expansion brings Citadel’s total occupancy to 10 floors spanning over 300,000 square feet in the sleek, sail-shaped 55-story skyscraper. It’s the first top-tier office development delivered in the city in over a decade. The extra floors became available after two Chicago law firms – Winston & Strawn and Kirkland & Ellis – shuffled their leasing plans, presenting an opportunity Griffin’s team quickly pounced on. While a Citadel spokesperson confirmed the enlargement, further details on the value of the deal were not disclosed.

Premium office rents at the property reportedly top $100 per square foot, multiples higher than typical Brickell averages around $80. When Citadel’s new headquarters opens later this summer, the contemporary tower promises abundant amenities befitting a billionaire owner’s tastes: A swanky rooftop bar and restaurant, wellness center with yoga and fitness studios, an outdoor sky terrace, and 24/7 concierge service. It’s just the start of Griffin’s grandiose vision transforming Miami into Wall Street’s southern rival. The 54-year-old, worth $31.7 billion, has been enthusiastically promoting his new home base, calling Miami “the future of America” in interviews and pledging $1 billion for Citadel’s eventual permanent headquarters.

He’s already been snapping up prime real estate, including a prized waterfront parcel, while donating millions to local schools, hospitals and projects. Griffin is all-in on the city stealing finance’s spotlight from New York. Citadel’s move brought hundreds of high-paying jobs, with 450 employees expected by summer, fueling Miami’s quickly evolving into a legitimate corporate hub. Major firms like Microsoft, Thoma Bravo and law firm Baker McKenzie have also signed on at 830 Brickell. As Wall Street’s elite continue making Miami inroads, Griffin is aiming to lead the sunny new frontier.

Source: CoStar

Real Estate Market Rebalancing Offers Buyers Attractive Opportunities

By Columbus International,13 June 20249 November 2024

The real estate market is going through a transitional phase, moving from a period of strong euphoria to one of greater reflection. According to data from the Revenue Agency and the Tecnocasa Group, there is a decrease in residential property sales and an increase in the average discount applied to selling prices. In the second half of 2023, the average discount in Italy was 8.3%, an increase compared to the previous year.

This gap between the price requested by sellers and the price actually paid by buyers is widening, indicating greater caution in the market. The discounts vary depending on the type of property. Used properties suffer greater reductions (8.5%) compared to renovated (7.5%) and new (4.5%) ones, as they often require renovation work that entails additional costs. The most significant discounts, almost 12%, are recorded for properties purchased for investment purposes, where the buyer’s purchasing power carries more weight.

Economical properties and homes sold out of necessity suffer above-average discounts, respectively 10.2% and 9.6%. The position of the property also influences the discount: ground-floor apartments suffer discounts of 8.5%, while for those on the top floors, the discounts are more contained (7.7%). These data confirm the picture of a slowing real estate market. In fact, the Revenue Agency has recorded a sharp decline in residential property sales in the first quarter of 2024, equal to 7.6% compared to the same period in 2023 and 7.2% compared to the last quarter of 2023, affecting all areas of the country.

Source: Il Sole 24 Ore

Miami’s Sizzling Real Estate Market Defies Gravity

By Columbus International,12 June 2024

Over the past decade, Miami’s real estate landscape has undergone a staggering transformation, solidifying its status as one of the nation’s hottest housing markets. From the first quarter of 2013 to the first quarter of 2023, the median single-family home prices in Miami-Dade, Broward, and Palm Beach counties have nearly tripled, resulting in an average home price gain of a whopping $340,000. This surge has left traditional investment returns in the dust, even outpacing the relentless bull run of the stock market. The numbers speak for themselves: Between 2013 Q1 and 2023 Q1, home prices across the tri-county area witnessed a jaw-dropping increase.

In the last five years alone (2018 Q1 to 2023 Q1), median single-family home prices soared by an average of 64%, translating to an average price gain of a cool $220,000. Certain municipalities within this real estate hotbed have experienced particularly stratospheric home price gains over the last decade. Palm Beach takes the crown with an average home price increase of a staggering $6 million, followed by Miami Beach ($2.5 million), Lighthouse Point ($1.4 million), Pinecrest Village ($1.3 million), and Coral Gables ($1 million). The city of Miami itself saw homes appreciate by $400,000, slightly higher than Fort Lauderdale ($387,000) and West Palm Beach ($337,500). Remarkably, the Miami real estate market continues to display robust growth, defying challenging market conditions. According to recent data, home prices in Miami have seen an impressive 8.7% increase in April 2024 compared to the same period last year, with the median home price now a cool $625,000.

Homes are selling slightly slower, averaging 69 days on the market compared to 68 days last year, indicating a relatively stable market despite the price surge. Sales activity, however, has slightly declined, with 583 homes sold in April 2024, down from 634 in April 2023. This trend reflects a broader pattern of fluctuating demand, as evidenced by the 27% of Miami homebuyers searching to move out of the city between February and April 2024. However, a significant 73% of buyers expressed interest in staying within the Miami metropolitan area, underscoring the city’s enduring appeal. Miami remains a top destination for homebuyers from other major cities, particularly from New York, Washington, D.C., and Boston.

Nationally, 3% of homebuyers considered moving to Miami from outside metropolitan areas, highlighting the city’s attractiveness on a broader scale. As of February, new listings in Miami had increased for six consecutive months, nearing pre-pandemic levels. In fact, February 2024 saw a 25.87% year-over-year increase in new listings, providing more options for homebuyers and contributing to a more balanced market. While the Miami real estate market may be experiencing some turbulence, its resilience and allure continue to captivate investors and homebuyers alike, solidifying its position as one of the nation’s most coveted and dynamic housing markets.