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Real Estate Roundup 11.18.20 – Real Estate Daily Beat

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Ken Caplan, Kathleen McCarthy, Jon Gray (Credit: Fortune)

Real Estate Roundup:

Retail

  • U.S. retail sales rose in October at their slowest pace since the spring, another sign the nation’s economic recovery is losing steam as coronavirus cases surge across the country. Online shopping continues to flourish. Sales increased 3.1% in October from the prior month at non-store retailers, a category that accounts for online merchants, according to the Commerce Department… JPMorgan’s tracker of 30 million credit and debit cardholders recorded a 4% decline in spending from a year earlier in the week through Nov. 13. (WSJ)

Office leasing

  • Office employees are getting used to the perks of telecommuting and expect them to continue even after the pandemic ends, but most aren’t ready to abandon the office entirely. A majority of employees want to continue working from home at least two days per week, according to the JLL’s survey of more than 2,000 workers globally. Only 26% want to work from home full time after the Covid-19 pandemic passes. Most workers surveyed agreed that the office is more conducive to collaboration, with 66% of respondents preferring a hybrid model. (Bloomberg+JLL)

Acquisitions 

  • Steel Equities has closed on its $20 million purchase of six land parcels in Brooklyn right by the property where it landed a major deal with Netflix last year. The developer has purchased 132 Bogart St. and 375-377 Johnson Ave. in East Williamsburg from Superior Holdings. (Crain’s)

Financing 

  • Milbrook Properties has secured $47.5 million in financing for 19 multifamily properties based in Manhattan, the Bronx, and Brooklyn from Symetra Life Insurance Company. The portfolio comprises 1,188 apartments and 51 commercial units. Ten loans totaling $23.8 million were closed at a rate of 3.18 percent for 10-year terms, and the remaining nine — totaling $23.7 million — were closed at 3.30 percent for 13 years. (CO)

Politics

  • A 40% cut in weekday subway service and layoffs of more than 9,000 transit workers are on the table as MTA honchos battle a COVID-19 financial catastrophe. The transit austerity plan — parts of which were obtained by The Daily News — could be staved off if Congress approves more COVID-19 aid to the agency. Transit officials have asked for $12 billion in federal aid by the end of 2021 to stay afloat. (NYDN)

Development plans 

  • Zara Realty is planning to build a project in Jamaica that will span about 218,000 SF. Upon completion, it will contain 223 residential units (30% will be affordable), 176 parking spots, along with space for a community facility. (Crain’s)

Other news

  • Blackstone Group + Worthe Real Estate Group are planning to develop a new office tower near the sprawling Burbank and Warner Bros. studio complexes in California. The proposed 500,000-square-foot tower underscores Blackstone’s Nadeem Meghji strategy: “Content creation is one of our highest conviction themes, and we’re seeing long-term demand growth.” (WSJ)
  • South Korean investors swarmed some recent hot property sales. They accounted for nine of the 18 bids for a warehouse near Los Angeles that has been leased to Amazon. The South Korean investment firm Soulbrain Holdings last month bought three office buildings in San Jose, Calif., for $160 million, and four of the 12 bids came from South Korea… A big reason why Korean investors are flocking to the U.S. is the Federal Reserve. When foreign firms invest in the U.S., they generally hedge against currency fluctuations. Today, hedging costs are down to around 0.1% after recent Fed rate cuts. (WSJ)

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Demand fueling Powell River, Sunshine Coast real estate market – My Powell River Now

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The second wave of COVID-19 hasn’t put a damper on Powell River’s real estate market.

Powell River-Sunshine Coast Real Estate Board president, Neil Frost, says the region is coming off a record September and October.

“Sales have been very strong the past few months,” he added. “November was quite strong as well – we’re just waiting for the final numbers on it to come in.

Frost said 50 percent of the buyers are coming from outside of the area with most of those purchasing single family homes.

“So they’re becoming residents of Powell River, moving into our community, becoming taxpayers in our community,” Frost said.

“COVID certainly has presented challenges in the practice of real estate, but I would say that overall the exodus from the urban areas have definitely put a spotlight on Powell River (and) has benefited our real estate market… definitely our sellers, at any rate.”

The biggest challenge facing the local market right now is a lack of inventory.

Frost said there simply isn’t enough homes on the market to satisfy the demand. He noted that it’s driving prices higher.

Board-wide, the average price of a single-family home was $493,586 at the end of October, which is nearly 10 percent higher than the same time last year.

While the current travel restrictions on the Vancouver Coastal Health region has slowed the market, Frost says they’re still seeing competing offers, and “we’re experiencing the typical winter slowdown a little bit.”

“But we’re still seeing a lot of inquiries from out-of-time,” he added.

Frost believes the open spaces and lifestyle offered in the qathet Regional District is also a huge draw.

“After the first wave, where people were stuck at home, or stuck in a condo, or cohabiting situation, with no yard, nowhere to go in an urban environment, they look at the big open spaces here, the larger properties, the availability of recreational spaces, and they’re getting out of their condo in the city and coming here to a little house and a better living situation.”

Frost would like to see more housing and new construction come online in the new year.

“There’s still a demand and I expect that to continue into spring, summer of 2021,” he said. “Prior to the pandemic we had many people wanting to retire here. We’ve got all these people that want to come from out of province: buyers from Alberta, buyers from Ontario that haven’t been able to or have chosen not to come over the past few months. It’s not just the Lower Mainland which is where the majority of our out-of-town buyers are coming from.”

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Toronto eyes tax on empty homes in bid for real estate revenue – BNN

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Toronto is proposing a tax on empty homes as concerns build over speculators’ role in driving up housing costs in Canada’s largest city.

If adopted, the tax would bring in as much as $66 (US$52 million) million in revenue, assuming 1 per cent of Toronto’s housing stock is currently empty and those owners chose to pay rather than rent out their properties, according to a statement on Thursday.

The proposal calls for the levy to be implemented in 2022, part of a bid to free up rental housing in one of North America’s tightest markets and generate revenue that could be used for affordable housing.

“We simply can’t afford, from the housing supply perspective, to have housing accommodation for thousands of people sitting empty,” Toronto Mayor John Tory said in a statement. “You can live in it, you can rent it, but if it sits empty you will pay a tax that helps us build more affordable housing people can live in.”

As governments across the world face pandemic-fueled shortfalls, lawmakers are looking at new real estate taxes as way to plug shortfalls. The proposal in Toronto comes after Prime Minister Justin Trudeau said earlier this week that Canada would impose a tax on “the unproductive use” of housing by non-resident foreign owners sometime over the next year.

A recent report from Canada’s national housing agency found that a pair of similar taxes by local governments in British Columbia may have caused nearly 9,000 condominiums to be converted to rentals in Vancouver.

While rent has dropped in Toronto in recent months as the coronavirus rattles the economy, the city’s rental market remains tight.

In September, the vacancy rate for apartment buildings in the Toronto metropolitan area reached the highest in 10 years, but at 2.4% that’s still far lower than New York or San Francisco, expensive U.S. cities that have taken a hit as residents flee for more space in the suburbs.

A report recommending the Toronto levy on vacant homes is scheduled to go to Toronto’s executive committee next week.

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Real estate group beats prices of luxury mansions with smaller post and beam houses – North Shore News

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Real estate in Canada’s most expensive community isn’t usually a David versus Goliath struggle. For decades, West Vancouver real estate has followed a simple rule—bigger is better—10,000 square feet of living space, Swarovski chandeliers and five-car garages.

West Coast Modern Group takes a radically different approach. Using a marketing program that elevates architecturally-designed homes as collectable works of art, the namesake team (Jason Choi, Trent Rodney and Karim Bhatia) markets 60 to 70-year-old homes into hot selling properties that can out-price even brand-new luxury spec builds.

“Vancouver used to be about big shiny monster houses breaking sales records. We just proved David can win against these Goliath mansions, ” says Rodney.

Case in point, the custom Sea Ranch house in West Vancouver. This lovingly-restored A-frame was originally designed by architect Barry MacLeod in 1970 as an homage to iconic homes built on the coasts of California, almost three hours north of San Francisco.

When marketing such one-of-a-kind properties, it can be challenging for Realtors ® to attract the right buyers who value these homes. Given today’s penchant for gaudy faux Georgian or Tudor homes that dominate an entire building lot, it’s easy for realtors to tell clients that their homes are “lot value only,” and much of the time, assessment values reflect that.

When Sea Ranch owners, Steve and Sarah, planned on selling, they expected that it would command around $2.8 million, an identical price to a similar-size Colonial that had just sold across the street. The customized marketing campaign created by the West Coast Modern Group illuminated how living in a smaller, sensitively designed space integrated into the natural landscape could live better than a spec house that maximizes it’s buildable envelope.

The group then reached out to an international network of design aficionados and eventually sold the 3,000 sq. ft. property to a Manhattan buyer for $3.5 million—a premium over a brand new 6,000 sq. ft. luxury mansion that just sold across the street.

“I’ve always told people that our client base doesn’t want these big bloated houses, and I’m not sure if people believed me. I’m excited to announce that for the first time ever, we’ve beat out the sales price of a brand new luxury mansion with one of our smaller West Coast moderns that’s half the size. It’s exciting,” says Rodney, a listing agent for the property.

The West Coast Modern Group is Vancouver’s only dedicated real estate team for architectural houses.

Discerning home buyers from around the world appreciate what makes the West Coast special. From Horseshoe Bay to Deep Cove, mid-century modern homes are finally coming into their own, thanks to sellers who care and buyers who appreciate timeless design, creative landscaping and unbeatable views.

“Few real estate agents authentically understand the world of architect-designed homes. We don’t do cookie-cutter subdivision homes or faux-chateaux. When you contact us, we will share your architectural gem to the world and help put Vancouver on the map. That’s the West Coast Modern Group advantage. Trust us to gain a premium price for your listing,” says Rodney.

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