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City Council approves Seaport redevelopment

Posted on | March 21, 2013 | No Comments

Howard Hughes gets the go-ahead to tear down the Pier 17 mall, but a delayed construction start date will allow retail tenants, hurt by Superstorm Sandy, to spend one more summer in business.

Photo by Buck Ennis.

By Lisa Fickenscher @LisaFickenscher
March 20, 2013 1:45 p.m.

The City Council approved the South Street Seaport redevelopment plan today, paving the way for Howard Hughes Corp. to tear down the Pier 17 mall and replace it with a sleek new complex including a green roof.

Before the Dallas-based developer got the green light, however, it had to agree to a number of conditions set forth by the council, including a delay in the start of the project, allowing the current tenants to have one more summer at the Seaport.

The deal also includes plans to establish two new food markets at the Seaport, said City Council Speaker Christine Quinn and council member Margaret Chin at a press conference on Wednesday morning. It is a plan that Ms. Quinn had proposed several years ago, but one that the developer had initially opposed.

An agreement with Howard Hughes was reached on Tuesday, Ms. Quinn said, in what had been described by others as “difficult negotiations.” The City Council vote today was the final hurdle for Howard Hughes as it went through the Uniform Land Use Review Procedure process.

“Our vision for a revitalized South Street Seaport has taken an important step forward today,” said David R. Weinreb, CEO of The Howard Hughes. “I am particularly pleased because the redevelopment will have a catalytic effect on Lower Manhattan and help the area continue to recover from the impact of Hurricane Sandy.”

The developer had wanted to start construction on Pier 17 by July 1 and had asked tenants to leave the building by April 30. But retailers at the storm battered neighborhood, which was shut down for several months following Superstorm Sandy—some businesses are still closed—lobbied to remain open for the summer in order to recoup their losses. Under the agreement, they can stay until Sept. 9, with construction beginning on Oct. 1.

One of the food markets will go into the Tin Building, where the Fulton Fish Market had been before it moved to the Bronx. Howard Hughes had expressed interest in developing the Tin Building and the neighboring New Market building and it has until June 30 to submit a proposal to the city’s Economic Development Corp., which controls the land. The City Council deal requires any plan for the Tin Building to include 10,000 square feet for a year-round, seven days a week public market.

“New York will no longer be the only major city without a destination food market where tourists and New Yorkers can go and chefs can shop for food,” said Ms. Quinn, adding that “Lower Manhattan is where our food economy began.”

Howard Hughes will also be required to develop a second food market selling locally sourced food, likely to be in what is called the Link Building, which is adjacent to the Pier 17 mall and now is home to restaurants and clothing retailers.

Other aspects of the deal, led by Ms. Chin, include assurances from Howard Hughes that the green roof at Pier 17 will include free public space. “We wanted to make sure that the front part of the roof, facing the harbor, would be open space,” said Ms. Chin. “That’s a major change in the plan.”

But not everyone is applauding the deal that City Council is heralding.

Robert LaValva, president of New Amsterdam Market, which operates a seasonal food market at the former Fulton Fish Market, has been advocating for one much larger market than the two smaller ones announced today.

“We want at least 50,000 square feet of space, so the 10,000 square feet is not the same visionary thing we had been working on. It’s no longer a scenario we are pursuing,” he said.

Still the city pointed to the economic benefits of the overall project.

“Today’s City Council votes to approve the redevelopment of the South Street Seaport are an important step for the future of this dynamic project,” said Kyle Kimball, Executive Director of the New York City Economic Development Corporation in a statement. “Funded through more than $200 million in private investment, not only will this project create enhanced shopping, dining and entertainment options, it will also create hundreds of jobs and revitalize the Seaport for New Yorkers and visitors alike.”

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Posted on March 20, 2013 1:45 p.m.

Apartment sales hit second highest level of decade in Manhattan

Posted on | February 1, 2013 | No Comments

Sales in Manhattan rose to 10,508 units last year, up 3.4% from 2011, but still nearly 20% below the peak of 2007. Sales increasingly constrained by shortage of inventory.

By Ali Elkin / Crain’s New York Business
January 31, 2013

Despite slim inventories, sales of Manhattan apartments in 2012 hit highs only exceeded once in the last decade, back in 2007, according to a report by Douglas Elliman. Sales last year hit 10,508, up by 3.4%, but still 19.2% south of the peak of 2007. The small size of the increase is likely due to low inventory, according to Jonathan Miller of Miller Samuel, who compiled the report. Median home prices eased by 1.8% to $835,000.

“It’s too early to call this a recovery,” said Jonathan Miller, who compiled the report. “A period of better housing stats isn’t catchy, but that’s more what it is.”

That performance contrasted sharply with the 5.5% rise for the year ending Nov. 30, reported on Tuesday in the Standard & Poor’s/Case Schiller index of housing prices nationwide. On that index New York was the only one of 20 metropolitan areas to see a drop in the period.

Inventory, at 4,749 listings, was at its lowest level in the 10-year period, down 34.2% from 2011 levels. Mr. Miller predicted prices are likely to rise this year and sales will fall largely because of the dwindling number of homes on the market.

“Now that we have this chronic shortage of inventory,” Mr. Miller said. “We’re looking probably at some upward pricing trends in 2013.”

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Hunts Point rejects city’s lease offer

Posted on | January 15, 2013 | No Comments

By Lisa Fickenscher @LisaFickenscher
January 10, 2013 3:21 p.m

City officials thought a deal was within reach, but the 46 merchants at the Hunts Point Terminal Produce Market have yet to agree to terms as New Jersey continues to woo them.

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The Hunts Point Terminal Produce Market rejected the city’s proposal to extend the market’s lease by 10 years, frustrating city officials who believed that a deal was within reach.

The market is operated by 46 merchants who are part of a co-operative and whose board members have been negotiating for more than a year an extensive redevelopment plan, including a long-term lease with the city.

“The recent rejection by the co-op’s board of a long-term lease extension is unfortunate,” said a spokesman for the city’s Economic Development Corp., the market’s landlord. “And the lease extension we offered was on very favorable terms.”

Market officials did not to elaborate on why they turned down the proposal, which occurred at a board meeting on Tuesday. Crain’s reported Tuesday afternoon that a tentative deal had been struck. The Economic Development Corp. also declined to provide details about the proposal.

But a spokesman for the merchants said the “city offered some different terms to extend the current lease,” which expires in 2014. Over the next two weeks, the board will meet with its members to discuss the matter further.

The proposal did not address the terms of the $320 million redevelopment plan—a multi-year project that would completely modernize the 105-acre facility. The cost of the upgrade will be shared by the city and the merchants. The city has already raised more than $150 million from various government agencies while the merchants have expressed concern about coming up with their half of the funding.

At the same time, New Jersey officials are still trying to persuade the market to relocate; the merchants are free to negotiate with New Jersey since an exclusivity agreement with New York expired last year. The state, as is typical, is offering tax incentives among other perks, according to published reports.

Relocation of the market could result in nearly 4,000 jobs leaving New York.

“I look forward to continuing to work together with Hunts Point to persuade them New Jersey is a great alternative to their cramped and outdated facilities in the Bronx,” said Lt. Gov. Kim Guadagno, in a statement.

A spokesman for the market said the merchants continue to explore all their options.

One bone of contention for them in New York is their relationship with the Business Integrity Commission, which regulates public markets. The agency is responsible for cracking down on organized crime, among other things. And the merchants believe the commission oversteps its authority. They have complained to elected officials, but have been frustrated by the response so far.

While the market leaders have said they want to remain in New York, they also insist they will not invest millions of dollars in a new facility without assurances that the Business Integrity Commission’s role in their businesses will be curtailed.

Some insiders have speculated that the market is hoping that a new city administration will be more sympathetic to their complaints.

“We sincerely hope that the co-op leadership will reevaluate their position,” said the Economic Development Corp. spokesman, “so that we may reach a deal that will benefit the people of the Bronx and the entire city for decades to come.”

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Commercial Real Estate Taxes Rise…

Posted on | September 22, 2012 | No Comments

Written by By Robert Knakal*

I spoke at commercial real estate conference in Miami a few months ago, and there were property owners attending from all over the country. None of them were particularly concerned about the level of real estate taxes they were paying, with the exception of an owner of rental apartment buildings in Houston. He was surprised that in a state like Texas, which is very pro-business and anti-tax, his real estate taxes were approaching 10 percent of gross revenue. When I told him that in New York City they are approaching, and in some cases exceeding, 30 percent, he nearly choked.

So why are our real estate taxes so high? Why do elected officials treat income-producing properties like ATM machines in order to plug holes in municipal budgets? With our income tax rates and commercial real estate taxes both the highest in the country, having adequate revenue is clearly not New York’s problem. If you believe the revenue side of the balance sheet is high enough, this leaves spending cuts as the obvious way to create some relief when it comes to our real estate tax burden.

I often ask politicians what specific budget line-item they would consider reducing spending on. I have never received a straight answer to this question. Most of the time, I get the “waste, fraud and abuse in government” answer, which is generally a meaningless response when a courageous answer is required. While no statistics are kept on this issue, one would have to wonder if New York is the leader in “waste, fraud and abuse.”

Reading local papers for the past few years, one gets the sense that we just might be. If so, opportunity is knocking for those who use that phrase to get to the business of ridding the city and the state of these revenue-evaporating practices.

Gov. Cuomo has been doing a great job thus far and has accomplished much more than most political pundits predicted. However, his vow to clean up Albany (and all misconduct in state and local government) is being put to the test. Will his Joint Commission on Public Ethics do what it was set up to do? In a major test, the recent allegations against Assemblyman Vito Lopez were met with JCOPE announcing an investigation of Lopez, but they initially chose to not investigate Speaker Sheldon Silver, who allegedly arranged a back-room payoff of the victims using taxpayer money. Subsequently, external pressure added the speaker to the investigation.

While the Lopez matter has made headlines recently, abuses by elected officials with ties to supposed nonprofit organizations have been brought to light at an alarming rate. The examples are numerous and include ex-Senator Vincent Leibell, ex-Senator Pedro Espada, Efrain Gonzales, Larry Seabrook, Miguel Martinez, Gloria Davis and Brian McLaughlin. Recently we have seen investigations begin of Senator Shirley Huntley and Assemblywoman Naomi Rivera. The game is simple: create a nonprofit organization, use your political influence to obtain taxpayer dollars and load up the entity’s payroll with relatives, lovers and political friends, giving them exorbitant salaries and massive expense accounts. No wonder a bagel and coffee goes for $177 (only if you are expensing it on the taxpayer’s dime).

If elected officials really want to eliminate waste, fraud and abuse in government, JCOPE should investigate all nonprofits set up by elected officials, and legislation should be enacted to prevent pubic funds from going to any of these entities. New York has many nonprofit organizations that do incredible work for those who need a helping hand; therefore, the actions of a few should not sully the work of the rest. However, if there is hope that our real estate taxes are not going to continue to spiral out of control, spending needs to be controlled, and these politically backed sham nonprofits are a great place to start.

* Mr.Robert Knakal is the chairman and founding partner of Massey Knakal Realty Services and has brokered the sale of more than 1,250 properties in his career, with a market value in excess of $8.5 billion.

Brooklyn multifamily building sales jump 50%

Posted on | August 8, 2012 | No Comments

August 8, 2012 5:13 p.m.
Residential property sales in Brooklyn jumped 50% in the first six months of the year from year earlier levels, hitting $1.2 billion, according to a report by TerraCRG, which also includes development sites and some industrial buildings. Slightly more than half of the total volume came in sales of multifamily residential properties. There, 233 buildings sold for a total of $635 million.
But it was the 91 sales of development properties that paced the overall gains in the period. They hit $188 million, nearly triple the year-earlier levels.
The action was heaviest in the neighborhoods of downtown Brooklyn/Park Slope and in Williamsburg/Greenpoint, as properties that had languished during the recession found new owners.
“We’ve seen both private and institutional equity pouring into Brooklyn,” said Ofer Cohen, founder and president at TerraCRG, who led the study. “Investors see Brooklyn as one of those markets that still have a lot more growth ahead of it.”
The upshot of the investment, Mr. Cohen said, is that the supply of “shovel-ready” projects has dwindled markedly. Down the road, that could have a big impact on prices.
“It’s going to take some time until inventory of new development sites comes to market,” he said.
In other parts of Brooklyn, the deals were smaller but there were more of them. In Bedford-Stuyvesant/Crown Heights and in greater Flatbush, the dollar volume of sales of multi-family houses is nonetheless on track to beat their last year’s totals. Mr. Cohen credited new investors looking to get into the market by buying up more affordable properties with driving sales volume in these neighborhoods.
The largest Brooklyn sale this year was the mixed-use property at 237-241 Bedford Ave. in Williamsburg. It sold for $66 million.

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US Economy May Be Bottoming Out: Economist

Posted on | July 3, 2012 | No Comments

A surprise contraction in U.S. manufacturing activity in June has raised the prospects of a worsening slowdown in the U.S., but one economist says the economy may actually be showing signs of bottoming out.


Gary Schlossberg, Chief Economist at Wells Capital Management, told CNBC Asia’s“Squawk Box” on Tuesday a recovery in housing and construction will lend support to the economy for the rest of the year.

Construction spending in the U.S. increased a better-than-expected 0.9 percent in May to an annual rate of $830 billion, the highest level since December 2009, the Commerce Department said on Monday. Economists polled by Reuters had expected construction spending to rise 0.2 percent after a 0.6 percent gain in April.

“I think it’s interesting that the construction spending numbers do point to the fact that this recovery, such that it is, is being led increasingly by housing, which could provide some support to the economy later in the year,” Schlossberg said.

Housing is becoming one of the few bright spots in the U.S. economy, whose recovery has slowed in recent months as the debt crisis in Europe and worries about a “fiscal cliff” of higher taxes and lower spending create a cloud of uncertainty for businesses and households.

That uncertainty is already having an impact in the manufacturing sector. The U.S. Institute for Supply Management’s (ISM) index dropped from 53.5 in May to 49.7 in June, the lowest reading since July 2009. The data, released Monday, surprised analysts who were expecting a slight expansion.

But Schlossberg said lower fuel costs, rising home values, the return of ‘risk-on’ trading in the wake of Europe’s bailout agreement with Spain and Italy, and hopefully, higher consumer spending will boost growth this year.

He pointed out that while the decline in manufacturing was unexpected, the weakness wasn’t across the board. There are still jobs available in some segments of manufacturing and employers are having difficulty filling vacancies, he said.

“This drop-off in orders may have surprised manufacturers as much as it surprised us,” he said. “Clearly, there’s caution on both sides of the ledger. They’re not getting the orders, they’re keeping inventories lean. On the other hand, there is that case that the labor markets may be a little bit tighter in some areas than they appear on the surface.”

The shortage of skilled manufacturing workers in some sectors could be encouraging businesses to hold off on new orders until they get better visibility on the economic outlook, he said.

A number of economists and strategists believe the weakness in the manufacturing sector won’t lead to another recession.

Michael Jones, Chief Investment Officer of Riverfront Investment Group, a U.S.-based asset manager, told CNBC the U.S. economy should improve in the second half of the year, albeit in a “three steps forward, two steps back” manner.

“This second quarter was the maximum period of uncertainty, whether Europe was going to be able to pull a policy rabbit out of their hat,” Jones said. “And you also had, for most of the period, uncomfortably high gasoline prices in the U.S. so the combination of those two forces, add on top of that a little bit of uncertainty over fiscal policy in the U.S. and there are a lot of reasons to curtail your purchases during your quarter.”

- By CNBC’s Jean Chua.


Posted on | May 29, 2012 | No Comments

Finding the right type of mortgage for your needs requires some knowledge on how different mortgage types work.

There are four main mortgage types: fixed rate, variable rate, interest-only, and balloon mortgages. Within each of these four categories are several subtypes, but understanding the main types of mortgages will help you narrow down your mortgage options for your particular financial situation. Here are the basics of the four main mortgage types.

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Posted on | May 29, 2012 | No Comments

Real estate investment is investing your resources usually monetary in real estate property. Over the years, real estate has become big business and many more able people are investing their money into it.

It is an investment that, if well calculated, can give great returns on your money. In most cases the investment can start from purchasing a barren parcel of land and developing it and later on renting it out or selling to for a profit. Developing real estate property means building structures on the raw parcel of land and hence increasing its value and offering it to potential buyers with the aim of making a profit from the sale.

Real estate investment also involves other activities such as purchasing already developed properties, managing properties or renting real estate properties for a profit. Real estate is regarded as limited liquidity compared to other forms of investments and it requires a high flow of cash to sustain. These are some of the very integral facts that an investor needs to understand very well before investing in real estate otherwise they risk getting into a situation that might force them sell a property at a loss since they got into a negative cash flow.

To invest in real estate one needs to be a patient investor because run over does not happen overnight as might be with other form of investment. There are also many other factors that determine the success of real estate investments and this is price speculations and other factors. When you invest in real estate, you need to have enough cash to sustain yourself before your property gets a buyer. With also the high competition in the industry, you need to be knowledgeable on what happens and how to react or what moves to make so as to avoid losing your money in the process.

In worst cases, an investor who does not know all concerned rules and moves ends up investing in property that will just depreciate in value due to its inability to adapt to the market or future trends in the market. Buying a home for your family can be an investment by itself because this is an asset you have acquired. In the future when you need to secure a loan facility and you are required to produce security, you can use your house deed.

Investing in real estate can be great if you know when and where to invest in.


Posted on | May 29, 2012 | No Comments

If you are thinking of relocating, or need to relocate for your job, or you want to get a bigger or a smaller house the best thing you can do is to find and use a real estate agent.

When searching for help buying a home, look for a ‘seasoned’ Buyers Agent, someone who has been an agent for a few years. In most states, agents are now either Sellers Agents or Buyers Agents. A Buyer’s Agent looks out for your interests in the transaction and not those of the seller, so be sure to ask.

Once you’ve found a good real estate agent, shoot them a call or an e-mail introducing yourself. Tell them that you are relocating to the area, as well as a bit about where you’re from and your living situation. They should respond relatively quickly. During your next call or e-mail, you should discuss your price range and what type of place you are looking for, as well as what type of neighborhood you would like to live in. This will help the real estate agent to find you the perfect home.

When you find your perfect new place to live, the real estate agent will act as your liaison when it comes to filling out all of the paperwork. They will help you navigate purchase papers, mortgage papers, or lease papers. This may be one of the most useful aspects of hiring a realtor. Real estate paperwork can be very tricky and confusing to the untrained eye. You need a realtor to help interpret it for you.

Hiring a real estate agent is likely one of the most important aspects of relocating.

Commercial R.E. tight lending Standards.

Posted on | May 9, 2012 | No Comments

(Source: NAR) - Although commercial real estate markets showed signs of recovery in 2011, commercial lending standards have tightened in the past year for small businesses and scuttled a major portion of contracted transactions for smaller properties, according to the National Association of Realtors® annual Commercial Real Estate 2012 Lending Survey. Read more

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