BEHIND THE BRICKS
A Blog from Peter Von Der Ahe & the NYM Team
There are any number of reasons to separate from a real estate partnership. One partner may need to free the capital for other purposes – such as retirement or education funding.
The investment’s performance may not be living up to expectations. The property owned by the partnership may require more upkeep, maintenance, or repair than anticipated, or management responsibilities may be proving burdensome.
With sales numbers in for the first three quarters of 2017, it has given us an opportunity to look back over the year to make and share some insights into the market.
Overall, across all of New York City, 2017 sales volume is down approximately 40%.
To be a successful seller in this market you need the right broker, using the right process, who provides accurate pricing guidance.
This story is timely given today’s phase of the real estate cycle. In a flat market, investors cannot make mistakes. It’s imperative you work with a specialist.
It's not what you make, it's what you keep. While helping New York City owners buy and sell investment properties, the ultimate objective is very clear: either improve cash flow or increase appreciation.
Becoming more tax efficient is a very important part of that strategy. This month, I have asked Rob Rahner from Cost Recovery Solutions to explain cost segregation and why it's beneficial for New York City multifamily owners.
Behind The Bricks is the #1 podcast on New York City Multifamily Real Estate Investing. Through discussions with the most influential NYC apartment building owners, we get a deeper look into this exciting investment industry.
The goal of these talks is to go behind the transactions and explore what drives these individuals and the investment choices they make.
Stock market trading activity is very low. According to a WSJ article because the economy is not too hot, and not too cold, investors are acting as if the best move is not to make any move at all. In the world of investing, is holding cash (and not investing) a good investment?
For NYC multifamily, after the pricing peak in late 2015 and subsequent transition (where prices declined between 5-8%), pricing has been somewhat flat in 2017. Multifamily investors are asking the same question: what is the right move in a flat market?
Anticipation and fear of significant changes in the lending market have been on people's minds for the last 9 months. It's been the big talk among anyone in NYC interested in real estate. But has anything really changed? In order to answer that question, I asked Andrew Dansker from our Capital Markets team to highlight current financing trends as they relate to the NYC market. Lets hear from Andrew…...
I was more than pleased with the brokerage services provided by Peter, Joe, and the rest of the New York Multifamily team. After owning our midtown asset for many years, I was also delighted that the team was able to assist me in a 1031 exchange and subsequent purchase of multiple NNN (triple-net) properties.
As a result of their work, my cash flow has more than doubled. For anyone looking to make this transition, I would highly recommend using them.
The selection of an asking price can cause a lot of confusion among sellers, their brokers and buyers. Using an appropriate asking price is a huge strategic advantage for sellers, and requires navigating topics like trust (are they truly representing me?), competency (do they know the market?) and capability (can they get it done?) with your broker. Therefore, it can often seem like the interests of the seller and broker are not aligned.
I can recall a time when Rose, an elderly widow, forced me to price her $30MM Brooklyn portfolio 25% over market, saying “Sometimes you got to ask a...
So far 2017 has been the opposite of what the experts’ predicted. When compared to one year ago, our teams’ inventory and transaction volume is substantially higher. Why? With the new government and rate increases wasn’t the market supposed to be slower? Lets explore…
The first major trend emerging is more product is coming to market. This is showing up as more potential sellers are asking for “opinions of values” and our listing inventory is up approximately 35%. To understand why, consider the mindset of the sellers. Five months ago, interest rates moved up for the fir...
“It is my pleasure to acknowledge Joe Koicim, Peter Von Der Ahe, and Seth Glasser on their selling of my buildings on 139th Street in Harlem. Not only do I commend their ability to execute the objective in selling our assets, through their extended team, they were able to locate Triple-Net (NNN) buildings which allowed me to do a 1031 exchange and increase my cash flow significantly. Without hesitation I recommend them and keep them in the highest regard.”
-Steve, Former Owner of 515 & 526 West 139th Street
“I was fortunate to meet Shaun Riney and the New York Multifamily team who were extremely professional and diligent at every step of the process. After having been in the business since 1985, I have never experienced this level of competency, toughness, honesty and dedication through every twist and turn as was exemplified with this team.”
-Gina, former owner of 35 Claver Place
Foreign capital has always influenced the New York City market. They love it. Once while walking a foreign investor through the Upper East Side, we passed two identical buildings: the first, 100% occupied and the other, vacant with boarded up windows. The out-of-town investor looked at the vacant building and said "maybe I should buy that one..." assuming a discounted price.
This is one of the nuances of the NYC multifamily market: vacant buildings are often more valuable than occupied because they are not encumbered by leases. As one client put it, "In the Midwest I am trying to keep ...
The dynamics of the rental market in New York City have changed. The New York Times, Wall Street Journal, Real Deal, and others are running articles about the shift in rents. Let's take a deeper dive...
How did we get here? Market rents in NYC have risen dramatically over the past five years. In many cases, year-over-year increases were in the double digits as owners and developers realized a very strong demand from millennial renters who "paid up" for high-quality renovations and building amenities.
Welcome to 2017! This year we look forward to the growth that (hopefully) comes from a more favorable business environment. The past 12 months have been marked by uncertainty as prices, rents, financing, equity, and government regulations all changed. We hope the year ahead will bring resolution where needed--and looking forward--we focus on three categories: Rates, Rents, and Regulation. These are the "Three R's of 2017."
Rates: Interest rates have started to rise and indications are such that we should anticipate moderate future increases. To hold its value, a property's rents must ...
When I first started in the real estate business, I remember a distinct conversation I had with one of the titans of the NYC real estate industry. This owner currently controls over 10,000 units, and he shared a piece of his investment philosophy with me. He did so by telling a story about the appropriate time to harvest fruit from a newly planted tree, which he said should not be done in the first seven years.
I have thought about this conversation many times when new-to-market buyers ask me, “Why do properties in New York sell for 2% cap rates?” Let’s discuss four primary reason...
2016 was a transitional year in many ways for the New York City multifamily business. Financing, buyers' mindsets, pricing, rents, and other aspects of the business changed. To gain a better understanding of our clients, we surveyed several thousand owners and investors about various market topics. I think you'll be surprised at some of the answers I'll share with you below.
Are you Buying Next Year? Many investors pointed out that we are in the late stages of a market cycle, and are therefore more selective about what they purchase. That said, our first question was: "Do you pla...
What does the election mean for New York City Multifamily owners? Will it impact values? Will rents go up or down?
Our research team at Marcus & Millichap released a special report highlighting the impact that Trump’s presidency will have on multifamily owners. The election results may redefine the playing field and it is important to understand the implications involved in this governmental change.
The political and regulatory environment for New York City Multifamily owners is becoming increasingly complex. The real question is, how has it affected values and transactions?
One direct impact is the process required to sell a building has changed. Instead of due diligence being a formality, it has become a major part of the process and critical for the seller to maintain pricing.
Recently I was asked by a New York City property owner why so many of our clients sell their New York apartment buildings and buy triple net (NNN) properties? While I encounter individuals who would never make this transition, for those that do, there are consistent patterns in their thinking. They want the same things: less complexity, more free time, and increased cash flow. What we are really looking at here is something called the "return on equity" (ROE). Simply defined, your return on equity can be found by dividing your net cash flow – (net of all expenses and mortgage payments) –...