Last year was one of highs and lows for New York City commercial real estate investors. From the “retail apocalypse” to rising Class-A multifamily concessions, the city’s diverse and competitive real estate market experienced growing pains. Meanwhile, pockets of the market, like workforce housing and industrial, show continued strength.
Think you are up-to-date on the latest news affecting New York’s CRE investors? Take this quiz from the JPMorgan Chase Commercial Term Lending team.
1
How much did office investment growth decline in Q4?
YOU'RE CORRECT!
Office investment growth declined 13.3% in Q4, according to JLL. New supply has outpaced demand, putting pressure on office vacancies. Despite the decline, JPMorgan Chase Northeast Regional Manager Judy Guarino has seen continued office investment interest among clients. The diversity of businesses in New York City has bolstered transaction activity, and a constant influx of companies into the metro area has kept the market stable.
“As one office transitions to cheaper space, there are other industries, like tech, that come in and take over leases,” Guarino said. “I don’t see much high vacancy among our clients.”
YOU'RE WRONG!
Office investment growth declined 13.3% in Q4, according to JLL. New supply has outpaced demand, putting pressure on office vacancies. Despite the decline, JPMorgan Chase Northeast Regional Manager Judy Guarino has seen continued office investment interest among clients. The diversity of businesses in New York City has bolstered transaction activity, and a constant influx of companies into the metro area has kept the market stable.
“As one office transitions to cheaper space, there are other industries, like tech, that come in and take over leases,” Guarino said. “I don’t see much high vacancy among our clients.”
2
Which asset class is known for stable rent rolls and long-term tenancy?
YOU'RE CORRECT!
As luxury, Class-A multifamily properties experience a supply gut and a rise in tenant concessions, housing for middle-income renters is both in demand and a more stable investment alternative. Class-A multifamily rent growth stalled in 2017, with rents falling by nearly 2% in Manhattan last year compared to 2016.
By comparison, workforce housing offers stable rent rolls and long-term, resilient occupancy, JPMorgan Chase Northeast Area Manager for Commercial Term Lending Kurt Stuart said. The sector is largely regarded as recession-proof, and an estimated 4.5 million new apartments are expected to be in demand by 2030.
YOU'RE WRONG!
As luxury, Class-A multifamily properties experience a supply gut and a rise in tenant concessions, housing for middle-income renters is both in demand and a more stable investment alternative. Class-A multifamily rent growth stalled in 2017, with rents falling by nearly 2% in Manhattan last year compared to 2016.
By comparison, workforce housing offers stable rent rolls and long-term, resilient occupancy, JPMorgan Chase Northeast Area Manager for Commercial Term Lending Kurt Stuart said. The sector is largely regarded as recession-proof, and an estimated 4.5 million new apartments are expected to be in demand by 2030.
3
What is the current retail vacancy in the Madison Avenue Business Improvement District?
YOU'RE CORRECT!
The Madison Avenue BID covers 29 blocks from East 57th to East 68th streets, and is the largest luxury shopping district in the U.S. The BID has an 8.5% retail vacancy rate . While high, more businesses are either leasing space or reinventing existing storefronts, BID President Matthew Bauer said to The Real Deal.
Luxury brands were not immune to last year’s “retail apocalypse,” causing many to shift toward more experience-based models. Popular fitness-oriented chains like equipment maker Peloton and apparel company Lululemon maintain locations in proximity to each other. Wellness-based shops like Vinotherapie Spa by Caudalie and Radiance Aesthetics & Wellness add to the variety of activities.
“Some retailers that we see today will not be around tomorrow,” Guarino said. “But these locations are being replaced with ones that millennials demand, like service- and health-type businesses that offer social environments.”
YOU'RE WRONG!
The Madison Avenue BID covers 29 blocks from East 57th to East 68th streets, and is the largest luxury shopping district in the U.S. The BID has an 8.5% retail vacancy rate . While high, more businesses are either leasing space or reinventing existing storefronts, BID President Matthew Bauer said to The Real Deal.
Luxury brands were not immune to last year’s “retail apocalypse,” causing many to shift toward more experience-based models. Popular fitness-oriented chains like equipment maker Peloton and apparel company Lululemon maintain locations in proximity to each other. Wellness-based shops like Vinotherapie Spa by Caudalie and Radiance Aesthetics & Wellness add to the variety of activities.
“Some retailers that we see today will not be around tomorrow,” Guarino said. “But these locations are being replaced with ones that millennials demand, like service- and health-type businesses that offer social environments.”
4
What was the overall 2018 transaction dollar volume in Manhattan?
YOU'RE CORRECT!
Transaction volume across Manhattan commercial real estate investment hit $21.6B in 2017, according to Cushman & Wakefield. That is down from $39.6B in 2016, and a 66% decrease from the $63.2B total in the market peak in 2015. Last year, the number of properties sold in the borough fell 21% year over year.
YOU'RE WRONG!
Transaction volume across Manhattan commercial real estate investment hit $21.6B in 2017, according to Cushman & Wakefield. That is down from $39.6B in 2016, and a 66% decrease from the $63.2B total in the market peak in 2015. Last year, the number of properties sold in the borough fell 21% year over year.
5
Where did the Chase Multifamily Lending Team last close a deal in 2017?
YOU'RE CORRECT!
As workforce housing grows in popularity among investors, JPMorgan Chase has completed more transactions in working-class neighborhoods like Fordham Heights in the Bronx, Astoria, Queens, and Bay Ridge, Brooklyn. The Commercial Lending Team recently closed financing deals in all three submarkets, ranging from $3M to $11M.
YOU'RE WRONG!
As workforce housing grows in popularity among investors, JPMorgan Chase has completed more transactions in working-class neighborhoods like Fordham Heights in the Bronx, Astoria, Queens, and Bay Ridge, Brooklyn. The Commercial Lending Team recently closed financing deals in all three submarkets, ranging from $3M to $11M.
6
Which retail corridor commanded the highest asking rent in Q3?
Herald Square/West 34th Street
YOU'RE CORRECT!
While many of Manhattan’s retail corridors experienced a decline in rents last year, Upper Fifth Avenue between 49th and 60th streets closed Q3 at $2,939/SF. That is a 42.2% increase from five years ago, according to a Cushman & Wakefield report.
YOU'RE WRONG!
While many of Manhattan’s retail corridors experienced a decline in rents last year, Upper Fifth Avenue between 49th and 60th streets closed Q3 at $2,939/SF. That is a 42.2% increase from five years ago, according to a Cushman & Wakefield report.
7
When did Chase enter the New York market?
YOU'RE CORRECT!
JPMorgan Chase has served New York City investors and the larger community since 1779, and plans to keep doing so far into the future. From helping bring drinkable water to city residents for financing the construction of the Brooklyn Bridge, the 1,200 predecessor institutions that form the banking institution of today have helped transform New York into a global capital.
No matter the cycle, the Commercial Lending Team is committed to improving its speed and certainty of loan execution for borrowers. Programs like the Feel The Free Campaign, which waives four major costs for borrowers, is one incentive that highlights JPMorgan Chase’s efforts to improve its loan origination process.
To learn more about this Bisnow content partner, click here.
YOU'RE WRONG!
JPMorgan Chase has served New York City investors and the larger community since 1779, and plans to keep doing so far into the future. From helping bring drinkable water to city residents to financing the construction of the Brooklyn Bridge, the 1,200 predecessor institutions that form the banking institution of today have helped transform New York into a global capital.
No matter the cycle, the Commercial Lending Team is committed to improving its speed and certainty of loan execution for borrowers. Programs like the Feel The Free Campaign, which waives four major costs for borrowers, is one incentive that highlights JPMorgan Chase’s efforts to improve its loan origination process.
To learn more about this Bisnow content partner, click here.
