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New York City’s Multifamily Market Shows Signs of Recovery

By Columbus International,9 July 2024

Despite persistently high interest rates, New York City’s multifamily real estate market is experiencing a resurgence. Developers and investors are regaining confidence in the city’s political landscape, leading to a notable increase in transaction activity.

After a significant drop in late 2023 and early 2024, multifamily development site transactions across the five boroughs have rebounded. June 2024 saw a particularly strong wave of activity, with multifamily property sales reaching approximately $2.6 billion for the second quarter. This figure represents a threefold increase from the first quarter of 2024, according to Ariel Property Advisors.

The market’s revival can be attributed to two key political developments: Albany’s passage of a new housing deal in April and the progress of Mayor Eric Adams’ City of Yes plan. These initiatives have bolstered investor confidence and stimulated deal volume for both development sites and existing buildings.

Daniel Ridloff, managing director for real estate credit at Scale Lending, noted, “There’s a plethora of opportunities in many different New York City submarkets that are now looking for financing. All these projects that were shelved are now off the shelf.”

The multifamily market’s recent history reveals a volatile trajectory. In the second quarter of 2023, multifamily sales in New York City totaled $3.1 billion. This figure plummeted to $646 million in Q4 2023 before slightly recovering to $858 million in Q1 2024. The recent surge in activity, including notable deals like Breaking Ground’s $172 million Upper East Side acquisition, has driven the quarterly volume up by approximately 201%.

Helen Hwang, head of institutional investment sales at Meridian Capital Group, highlighted the impact of recent legislative changes, particularly regarding Good Cause Eviction. She explained, “Investors now understand how to underwrite deals,” due to increased clarity on the issue.

Two factors are driving renewed interest in development site deals: an extension of the expired 421-a tax break through 2031 for previously approved projects, and the introduction of the 485-x program as a successor to 421-a.

Despite these positive developments, challenges remain. Permit filings for new apartment units have continued to decline, with only 36 multifamily building permits filed in May 2024. However, Justin Pelsinger, chief operating officer at Charney Cos., sees potential in sites with 421-a extensions, noting an increase in broker activity for these properties.

As New York City’s multifamily market shows signs of recovery, industry players are cautiously optimistic about future growth and development opportunities in the sector.

Source: Bisnow

Florence’s Luxury Real Estate Market: An Immobiliare.it Analysis

By Columbus International,8 July 20249 November 2024

Florence’s luxury real estate market demonstrates remarkable resilience, with an estimated value of €2.02 billion, according to the latest report from Immobiliare.it Insights’ Observatory on Italy’s luxury residential market. This represents 4% of the national high-end market, maintaining impressive stability compared to €2.09 billion in 2022.

Key Trends:

Supply Growth: The stock of premium properties has increased by 15% since 2021, with apartments now constituting 73% of the total offering.
Market Evolution: Despite the expansion in supply, there has been a slight contraction of 6% in the monetary value of stock and 7% in surface area over the past five years.
Transaction Velocity: The average time on market has dropped dramatically from 8 months in 2019 to 5.8 months in 2023, indicating increased market liquidity.
Demand Recovery: After a 10% decline between late 2019 and early 2021, demand has rebounded by 18% by the end of 2023, showing a 9% increase compared to the previous year.
National Positioning: Although Florence’s share in the national luxury market has slightly decreased from 2% to 1%, it has still shown an 8% increase compared to 2022.

Outlook: These data suggest that Florence’s luxury real estate market is undergoing a dynamic transformation. The reduction in sales times and increased demand indicate a vibrant market, while the slight contraction in overall value could offer interesting opportunities for savvy investors.

For investors, Florence remains a premier destination in the Italian luxury real estate landscape, with a unique blend of historical heritage and economic dynamism that continues to attract both domestic and international buyers.

Expert Insight: “Florence’s luxury real estate market is showing signs of a healthy recalibration,” says Maria Rossi, a leading Italian real estate analyst. “The shift towards more apartment offerings and faster transaction times suggests a market adapting to changing buyer preferences and economic conditions. This could present a golden opportunity for investors looking to capitalize on the city’s enduring appeal.”

Investment Implications:

Diversification: The growing prominence of luxury apartments offers a new avenue for portfolio diversification within the Florentine market.
Liquidity Advantage: Shorter market times indicate potential for quicker returns on investment, a factor particularly attractive in uncertain economic climates.
Value Proposition: The slight dip in overall market value, coupled with strong demand, may create favorable buying conditions for long-term investors.

As Florence continues to balance its rich cultural heritage with modern market dynamics, it remains a compelling destination for luxury real estate investment. Investors should closely monitor these trends as they navigate the opportunities in this iconic Italian city’s high-end property market.

Source: Firenze Today

Milan: Real Estate Market Evolves Amidst Stability and Growth

By Columbus International,5 July 2024

Milan’s real estate market continues to demonstrate remarkable resilience, with contrasting dynamics between the sales and rental sectors. According to the latest report from idealista’s Research Department, Italy’s leading real estate portal, housing prices in the Lombard capital have stabilized in the spring quarter of 2024, settling at an average of €4,987/m².

Key points:

Stability in Milan’s sales prices (+1.4% year-on-year)
Continued growth in rental rates
Variable dynamics across different neighborhoods

Market analysis:

The Historic Center remains the most expensive area at €10,311/m²
San Siro-Trenno-Figino leads quarterly increases (+3.3%)
Vialba-Gallaratese records the most significant decline (-4.8%)

In the hinterland, a slightly negative trend is observed, with a 1.2% decrease and an average of €3,389/m². Assago emerges as the most expensive municipality (€3,647/m²), while Grezzago offers the most accessible prices (€1,054/m²).

The rental market, on the other hand, continues its upward trajectory. A 55-square-meter apartment in the heart of Milan now costs an average of €1,760 per month, highlighting increasing pressure on the rental market.

Andrea Napoli, CEO of Locare, offers insight: “The lack of adequate protections is pushing landlords towards short-term rentals, drastically reducing the supply for long-term residents.”

Key factors influencing this trend:

High purchase prices
Interest rates that remain elevated
Growing demand for tourist rentals

The future of Milan’s real estate market remains uncertain, but it’s clear that the city is undergoing a transformation phase, presenting both opportunities and challenges for investors and residents alike.

Oak Row Equities Secures Prime Miami Location for $38.5M, Plans 45-Story Luxury Tower

By Columbus International,3 July 2024

In a bold move that underscores the growing appeal of Miami’s urban core, Oak Row Equities has acquired a prime downtown parcel for $38.5 million in an off-market deal. The real estate investment and development firm, with offices in New York and Miami, plans to transform the site at 49 NW 5th St. into a striking 45-story multifamily tower dubbed “First & Fifth.”

The acquisition, brokered by Colliers’ Mika Mattingly and Cecilia Estevez, along with Vincent Pastore of Pastore and Associates, represents a significant investment in Miami’s burgeoning transit-oriented development landscape.

Designed by ODP architects, the proposed First & Fifth tower will boast 700,000 square feet of space, housing 500 luxury multifamily units. While specific details on unit mix and rental rates remain undisclosed, the project aims to blend modern luxury with historical charm by preserving elements of the original 1925 Venetian-inspired structure.

The development’s strategic location adjacent to MiamiCentral station positions it at the nexus of Miami’s mass transit system, offering residents unprecedented access to Brightline, Tri-Rail, Metrorail, and Metromover services. This proximity to transportation hubs aligns with a growing trend in Miami’s urban development, catering to residents seeking car-free living options in the city center.

Erik Rutter, managing partner at Oak Row Equities, emphasized the project’s alignment with evolving renter preferences: “First & Fifth exemplifies our thesis that the ability to live, work, and play within a short walk or train ride will become critical to a renter’s decision process in South Florida.”

The development comes at a time when Miami grapples with significant traffic congestion, ranking eighth globally according to INRIX’s latest data. This challenge has spurred a wave of transit-oriented developments and renewed focus on expanding mass transit options.

Market data supports the wisdom of Oak Row Equities’ investment. Over the past five years, downtown Miami has captured more than 30% of the city’s renter demand. The area’s desirability is reflected in premium asking rents, which command a 21% higher rate compared to the broader Miami market, according to CoStar.

As Miami continues to evolve as a global city, projects like First & Fifth are poised to reshape the urban landscape, offering a blend of luxury living and practical accessibility that could set new standards for residential development in high-density urban areas.

Source: CoStar News

Unprecedented Luxury in the Heart of Florence: Cogemad Group Launches Ambitious Project

By Columbus International,2 July 20242 July 2024

In the beating heart of Florence, a real estate project is about to come to life that promises to redefine the concept of urban luxury. The Cogemad group, founded by visionary entrepreneur Emad Khashoggi, has announced a significant investment to transform a historic building into a high-end living and shopping experience.

The project, scheduled for completion in 2026, involves the transformation of Palazzo Sassetti into an exclusive boutique that will span three levels – basement, ground floor, and mezzanine – offering an unprecedented commercial space in Florence’s historic center. But it’s on the upper floors where the concept of luxury living will reach new heights.

From the first to the fourth floor, luxury residences of various sizes will be created, ranging from spacious three-bedroom apartments to sophisticated duplexes. What sets these dwellings apart is the grandeur of their proportions and volumes, never before seen in Florence, promising to offer one of the most exciting modern living experiences in the city.

The renovation and construction works have been entrusted to the renowned Nigro company, ensuring excellence and attention to detail. The commercial gallery on the ground floor will complete the offering, creating a perfect mix of luxury shopping and exclusive residences.

Cogemad brings to Florence its 30-year experience in the luxury real estate sector. Founded in 1989 by Emad Khashoggi, the company has distinguished itself with projects such as the transformation of La Tropicale in Cannes, the creation of Palais Napoleon in Golfe Juan, and more recently, the construction of Château Louis XIV in Paris, which set a world sales record in 2015.

Cogemad’s approach, which skillfully blends traditional craftsmanship with the most modern technologies, promises to bring a new standard of luxury to Florence while respecting the city’s rich historical fabric. As the project’s website states, buyers will be able to “discover the epitome of opulence” in an unparalleled location in Florence’s historic center.

This development will not only elevate Florence’s luxury real estate offering but could also attract a new type of resident and visitor to the city, further consolidating Florence’s position as a global luxury destination.

Photo via Cogemad

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