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The Rubin Report - The Pulse of the NYC Development / Issue No. 10 - October 2023

Rubin Isak

8 Highlighted Recent Development Site Transactions:

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50 Recent New Building Filings in MN, BK, QNS & BX:

These 50 filings in the last 30-days have accounted for 3,063,254 ZFA & 2,536 Apartments.

  1. 183 Christie Street, Lower East Side in Manhattan - Plans filed to build a 61,764 ZFA, 17-Story Residential Building with 26 Apartments on a 7,281 sq. ft. lot (cantilevering off the neighboring building from the 8th floor on.). Zoning: C6-3A (R9A Equivalent)
  2. 413 9th Avenue, Chelsea in Manhattan - Plans filed to build a 287,770 ZFA, 34-Story Office Building.
  3. 665 Fifth Avenue, Midtown, Manhattan - Plans filed to build the “Rolex Headquarters”, a  470 ft tall, 154,214 ZFA, 28-Story Office Building.
  4. 275 N 6th Street, Williamsburg, Brooklyn - Plans filed to build a 5,404 ZFA, 5-Story, 5-Unit Apartment Building.
  5. 74 Jackson Street, Williamsburg, Brooklyn - Plans filed to build a 4,994 ZFA, 5-Story, 6-Unit Apartment Building.
  6. 390 Manhattan Avenue, Williamsburg, Brooklyn - Plans filed to build a 6,117 ZFA, 5-Story, 5-Unit Apartment Building.
  7. 316 Rutledge Street, Williamsburg, Brooklyn - Plans filed to build a 42,225 ZFA, 9-Story, Commercial & House of Worship Building.
  8. 12 Berry Street, Williamsburg, Brooklyn - Plans filed to build a 1-Story, 13,303 ZFA Retail Building.
  9. 659 Grand Street, Williamsburg, Brooklyn - Plans filed to build a 9,925 ZFA, 7-Story, 6-Unit Apartment Building.
  10. 46 Adelphi Street, Fort Greene, Brooklyn - Plans filed to build a 6,322 ZFA, 2-Story,  Commercial Building.
  11. 131 Concord Street, Downtown Brooklyn - Plans filed to build a 49,678 ZFA, 13-Story, 73-Unit Apartment Building.
  12. 861 Park Avenue, Bedford Stuyvesant, Brooklyn - Plans filed to build a 45,836 ZFA, 9-Story, 50-Unit Apartment Building.
  13. 726 Madison Street, Bedford Stuyvesant, Brooklyn - Plans filed to build a 4,913 ZFA, 5-Story, 7-Unit Apartment Building.
  14. 106 Melrose Street, Bushwick, Brooklyn - Plas filed to build a single-story + mezzanine, 4,998 ZFA Commercial Building.
  15. 316 Stockholm Street, Bushwick, Brooklyn - Plans filed to build a 5,463 ZFA, 4-Story, 8-Unit Apartment Building.
  16. 1116 Madison Street, Bushwick, Brooklyn - Plans filed to build a 8,679 ZFA, 4-Story, 10-Unit Apartment Building.
  17. 2759 Fulton Street, East New York, Brooklyn - Plans filed to build a 7,038 ZFA, 5-Story, 8-Unit Apartment Building.
  18. 114 Snekider Avenue, East New York, Brooklyn - Plans filed to build a 51,085 ZFA, 5-Story Commercial Building.
  19. 267 Bond Street, Gowanus, Brooklyn - Plans filed to build a 296,993 ZFA, 21-Story, 344-Unit Apartment Building.
  20. 498 Sackett Street, Gowanus, Brooklyn - Plans filed to build a 190,357 ZFA, 21-Story, 173-Unit Apartment Building.
  21. 129 McDonald Avenue, Windsor Terrace, Brooklyn - Plans filed to build a 10,347 ZFA, 3-Story, 11-Unit Apartment Building.
  22. 828 53rd Street, Sunset Park, Brooklyn - Plans filed to build a 10,152 ZFA, 6-Story, Community Facility Building.
  23. 1555 60th Street, Borough Park, Brooklyn - Plans filed to build a 31,958 ZFA, 8-Story, Commercial & Community Facility Building.
  24. 435 Coney Island Avenue, Flatbush, Brooklyn - Plans filed to build a 68,170 ZFA, 8-Story, 90-Unit Apartment Building.
  25. 2201 Beverly Road, Flatbush, Brooklyn - Plans filed to build two (2), 7-Story Apartment Buildings, totaling 564,697 ZFA and 296 Apartments.
  26. 757 Flatbush Avenue, Flatbush, Brooklyn - Plans filed to build 105,604 ZFA, 9-Story, 132-Unit Apartment Building.
  27. 1688 E 18th Street, Homecrest, Brooklyn - Plans filed to build a 13,277 ZFA, 8-Story, 19-Unit Apartment Building.
  28. 1700 Jerome Avenue, Sheepshead Bay, Brooklyn - Plans filed to build a 37,933 ZFA, 7-Story, 36-Unit Apartment Building.
  29. 1482 Brooklyn Avenue, East Flatbush, Brooklyn - Plans filed to build a 5,604 ZFA, 5-Story, 9-Unit Apartment Building.
  30. 1484 Brooklyn Avenue, East Flatbush, Brooklyn - Plans filed to build a 5,607 ZFA, 5-Story, 9-Unit Apartment Building.
  31. 25-14 21st Street, Astoria, Queens - Plans filed to build a 5,200 ZFA, 4-Story, 8-Unit Apartment Building.
  32. 33-10 38th Avenue, Long Island City, Queens - Plans filed to build a 16,403 ZFA, 7-Story, 30-Unit Apartment Building.
  33. 37-38 9th Street, Long Island City, Queens - Plans filed to build a 6,666 ZFA, 4-Story Commercial Building.
  34. 43-25 52nd Street, Woodside, Queens - Plans filed to build a 41,220 ZFA, 9-Story, 60-Unit Apartment Building.
  35. 76-51 Austin Street, Forest Hills, Queens - Plans filed to build a 12,327 ZFA, 2-Story Community Facility Building.
  36. 87-79 Merrick Blvd, Jamaica, Queens - Plans filed to build a 74,420 ZFA, 8-Story, Mixed-use Building with 36 Apartments and 41,344 SF of Commercial Space.
  37. 148-15 89th Avenue, Jamaica, Queens - Plans filed to build a 46,328 ZFA, 8-Story, 69-Unit Apartment Building.
  38. 11-27 Foam Place, Far Rockaway, Queens - Plans filed to build a 45,759 ZFA, 7-Story, 68-Unit Apartment Building.
  39. 409 E 158th Street, Melrose, Bronx - Plans filed to build a 31,415 ZFA, 10-Story Mixed-use building with 45 Apartments and 18,172 ZFA of Community Facility space.
  40. 1239 Tinton Avenue, Morrisania, Bronx - Plans filed to build a 34,657 ZFA, 5-Story Mixed-use building with 32 Apartments including 7,555 ZFA of Community Facility space.
  41. 3273 3rd Avenue, Morrisania, Bronx - Plans filed to build a 56,050 ZFA, 7-Story Mixed-use building with 73 Apartments including 3,102 ZFA of Community Facility space.
  42. 1049 Washington Avenue, Morrisania, Bronx - Plans filed to build a 122,596 ZFA, 13-Story Mixed-use building with 102 Apartments including 53,787 ZFA of Community Facility space.
  43. 1472 Shakespeare Avenue, High Bridge, Bronx - Plans filed to build a 22,843 ZFA, 6-Story Apartment Building with 34 Units.
  44. 2077 Ryer Avenue, Fordham, Bronx - Plans filed to build a 60,438 ZFA, 12-Story Apartment Building with 93 Apartments.
  45. 41 North Street, University Heights, Bronx - Plans filed to build a 30,581 ZFA, 7-Story Apartment Building with 38 Apartments.
  46. 3103 Sedgwick Avenue, Kingsbridge Heights, Bronx - Plans filed to build a 29,048 ZFA, 7-Story Apartment Building with 42 Apartments.
  47. 3525 Bruckner Blvd, Pelham Bay, Bronx - Plans filed to build a 6,327 ZFA, 5-Story, 10-Unit Apartment Building.
  48. 717 Bartholdi Street, Williamsbridge, Bronx - Plans filed to build a 7,255 ZFA, 4-Story, 14-Unit Apartment Building.
  49. 729 E 216th Street, Williamsbridge, Bronx - Plans filed to build a 27,702 ZFA, 6-Story, 54-Unit Apartment Building.
  50. 261 Grand Concourse, Mott Haven, Bronx - Plans filed to build two (2) Apartment Buildings with a total of 275,592 ZFA and 405 Apartments.

Financial Markets Summary:

  • The Federal Prime Rate is 8.5%.
  • The Secured Overnight Financing Rate (SOFR) is staying steady at 5.31%
  • The United States Federal Funds Rate is at 5.5%. (I am forecasting this to jump to 5.75% by the end of this year.)
  • United States Annual Inflation Rate: The current inflation rate has now ticked upwards to 3.7% up from 3.67%, (& up from 3.18% the month prior). This is the 3rd consecutive increase in the inflation rate after 12 consecutive decreases, where we finally hit sub 3% at 2.97% in June. The Fed’s stated goal is to steadily raise rates until they are able to achieve a 2% inflation rate.
  • The US 1-Year Treasury Rate has increased to 5.4%.
  • The US 10-Year Treasury Rate is now at 4.64%, (after touching a 16-year high of 4.8%), up from 4.27%, last month.
  • Mortgage Rates: the average 30-Year Fixed Rate is now at 7.6%, (touching 7.84% last week), up from 7.25% last month and the 15-Year Fixed Rate is at 6.99% (touching 7.15% last week) up from 6.59% the previous month. We are nearing some of the highest mortgage rates we’ve seen since May 1995 when the average 30-year mortgage rate was at 8.05%.

“City of Yes” Zoning Change Proposals

Mayor Adams has proposed zoning regulation changes, some of which are as follows:

  • Ending Parking Mandates for New Housing - This proposal will eliminate parking requirements for housing.
  • Universal Affordability Preference - Similar to AIRS but allowing all types of affordable housing.
  • Shared Living - Allow more smaller-sized apartments.
  • Town Center “Main Streets” Zoning - This proposal would allow between 2 to 4 stories of residential development over ground-floor commercial space to encourage mixed-use communities.
  • Transit-Oriented Development - This proposal would allow apartment buildings between 3 and 5 stories on large lots near transit stops.
  • Accessory Dwelling Units - This proposal would legalize an additional dwelling unit of up to 800 square feet on 1-family and 2-family properties across the five boroughs.
  • Converting Empty Offices into Housing - Turning vacant commercial space into homes. This proposal would update the year of construction to 1990 for flexible conversion regulations, extend geographic eligibility to anywhere in the city that zoning permits housing, and allow conversion to more types of homes, including supportive housing.
  • Maximizing Campuses - This proposal would ease approvals for new buildings on campuses.

Construction Costs Outlook

From Gordian’s Quarterly Construction Costs Report Summary:

  • 82% of materials experienced a significant increase, climbing 19% on average
  • Demand for workers exceeds labor supply currently, although conditions appear to be improving.
  • Production wages are increasing costs for finished products, increasing the cost of goods.
  • The broad indices for construction materials reveal price stabilization in 2023
  • Lumber, Steel Pipe and Aluminum prices have seen double-digit decreases over the past 12 months
  • Concrete, Glass, Gypsum, and Insulation have witnessed double-digit price increases over the past 12 months
  • We have seen a consistent increase in concrete prices, as well as HVAC equipment prices, over the past 3 years. But the prices of lumber and plywood are approaching the levels seen before the COVID-19 pandemic
  • Industry experts remain cautiously optimistic about the stabilization of construction material pricing for the remainder of 2023. However, the challenges posed by labor shortage and a bustling market might offset potential savings in material costs.
  • Looking ahead, the consensus suggests that while prices are expected to remain relatively calm this year,regionalized cost pressures and increases may emerge in 2024 due to infrastructure and large-scale project demands.
  • While inflation is predicted to decrease in the coming months,the actual decline in prices might not be noticeable until 2024.
  • Ultimately, the industry anticipates a return to a more predictable pricing landscape, with a majority of materials experiencing a yearly price change of less than 5%.
  • The average cost to build a 4 to 7 story apartment building in New York City has increased 3.9% from last year from $17.9m to $18.6m. (up from $16.8m in 2021)