A New York-based firm, Castellan Real Estate Partners is a company that manages real estate investments. Led by managing principal John Salib, Castellan Real Estate Partners is working towards developing a 24 story rental building with 49 residential units in NoMad.
NoMad, short for North of Madison Square Park, is a neighborhood located in central Manhattan and can enable a person to experience everything in New York. While the neighborhood is known to be the home of celebrities and businessmen who can afford luxury lives, people can also find budget gems as one-bedroom units start at a renting price of $1750. Commuting is reasonably easy in this area, and a person does not necessarily need to have a car as there are plenty of subway and bus lines that can be reached within a minute. People in the neighborhood are within walking distance from everything they want as they can find markets, banks, drug stores, and even churches. Additionally, people can participate in NoMad Alliance’s non-profit events that aim to raise money as the foundation often organizes sports events and concerts.
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Established in 2009 by John Salib, Castellan Real Estate Partners is a vertically-integrated firm operating from New York City, New York. An investor, developer, and financier of real estate projects, Castellan Real Estate Partners has its finger solidly on the pulse of Manhattan’s real estate market.
Manhattan real estate prices are soaring back to their pre-pandemic highs. In 2021, Manhattan posted the highest co-op and condo sales in over 30 years, with median sales prices for either a co-op or condo hitting $1,125,000. This price was 7 percent higher than 2020 and the second highest in the last three decades. The highest median price recorded was in 2017, when prices peaked at $1,140,000. Manhattan’s real estate market was greatly affected by the COVID-19 pandemic. Sales slowed, vacancy rates rose, and prices fell. However, after authorities approved vaccines and vaccination rates shot up in 2021, economies reopened, and the real estate market launched a sharp recovery. Sales activity has remained strong in the first two months of 2022 as buyers race to lock down low mortgage rates ahead of a possible rate hike. Property values have also stayed high, prompting New York City Comptroller Brad Lander to revise Mayor Eric Adams’s November 2021 tax revenue projections for 2022 by $3 billion. Castellan Real Estate Partners, co-founded by John Salib and Paul Salib, is an investment firm that handles real estate development, lending, and management. In operation for more than a decade, Castellan Real Estate Partners keeps abreast of real estate trends, such as the shift to sustainability.
Sustainability is becoming more important to real estate investors, prompting developers to embrace it in their building designs. This incorporation has many benefits, including higher property values. Research shows that green certifications such as BREEAM (Building Research Establishment's Environmental Assessment Method) and LEED (Leadership in Energy and Environmental Design) increase property sale premiums by 7.6 percent and rent premiums by 6 percent. While developers can incorporate sustainability into their building designs in many ways, developers do not have to attempt all of them at once. They can start with one, such as a green roof, and still enjoy many benefits. For example, green roofs last up to three times longer than ordinary roofs because they are better protected from UV and wind damage. Further, green roofs reduce energy consumption by up to 25 percent because they provide better insulation from heat during summer. They are also effective at noise cancellation, which is useful for properties near airports and highways. In operation for more than a decade, Castellan Real Estate Partners focuses on redeveloping properties in New York City. John Salib strives to ensure that Castellan Real Estate Partners not only follows city and state-wide programs to build affordable housing but exceeds them. The Inclusionary Housing Program (IHP) addresses the high home prices in the city by requiring certain amounts of any given development to contain low-income housing units.
Housing complexes participating in the IHP are not composed of low-income housing units alone but are mixed-income developments. The three types of IHP zoning areas are mandatory, designated, and optional. Regardless of the zone, the architect multiplies the square footage of that development by the Floor Area Ratio (FAR) to obtain the total amount of developable space and turn it into housing units. The FAR is the ratio of square footage available for construction projects, determined by that district's building codes to the total lot size. In mandatory IHP zones, developers must include low-income housing in developments greater than 12,500 square feet. Four of New York city’s boroughs contain mandatory IH zones. In contrast, in designated IHP zones, developers receive a base FAR of 10, which may increase to 12, depending on the amount of qualifying housing built. R10, or optional, zoning districts abide by the same rules as designated ones, with one major difference. If a developer does not include low-income housing, they do not receive a FAR penalty. Led by Paul and John Salib, Castellan Real Estate Partners delivers investment and management solutions spanning the New York market. Castellan Real Estate Partners is developing a dynamic property at 7-9 East 30th Street in Manhattan’s prime NoMad district.
With SWA Architecture as the designer, the 23-story residential building spans 54 residences that inhabit 41,992 square feet of residential space. This is complemented by 2,142 square feet of retail space at the ground floor level. The building features a dark paneling system and offers striking geometric forms centered on balconies that each have unique, asymmetrically sloping designs. The upper-floor balconies offer views overlooking East 30th Street, while the building’s lower half features floor-to-ceiling glass interspersed with geometric paneling that coordinates with the upper-level aesthetics. A lighted canopy draws attention to the retail offerings of the building. The mid-Manhattan project is envisioned as an infill rental development that will attract tenants from the area’s expanding number of creative, technology, and media entrepreneurs. The well-appointed interiors feature designer finishes and contemporary color schemes and offer residents acmes to an exclusive fitness center. The building also has common areas ideal for social gatherings and meetings and a roof deck. New York City’s commercial real estate market experienced a significant economic downturn during the pandemic. Many restaurants and retail shops suffered income losses, forcing them to re-examine how they do business. While some businesses quickly adapted to online ordering and touch-free delivery, more than 2,800 small businesses in New York City were forced to close down.
It could take several years before the city returns to its pre-pandemic state. In fact, some commercial real estate market sectors may never fully recover. For instance, the demand for offices could continue to fall as NYC’s office workers switch to a work-from-home model or perform more work remotely work. If this happens, the city stands to lose on property tax revenues from office buildings. NYC’s tourism grew steadily from 2010 to the early months of 2020, but quickly ground to a halt when the pandemic hit and people from other cities, states, and countries were not allowed to travel due to lockdown restrictions. NYC generated only $13 billion in tourism revenues in 2020, a 73 percent decline from 2019. NYC’s 700 hotels suffered significantly, with many distressed properties being converted into affordable housing. Despite the economic pitfalls, some areas of NYC’s commercial real estate market are slowly recovering, with several retail shops, bars, and restaurants attending to more customers than they did before pandemic-related restrictions were lifted. NYC residents who left the city are also returning and re-occupying vacant homes. Moreover, hotels that survived the pandemic are hopeful that tourists with COVID-19 vaccinations will be more likely to book rooms. In June 2021, theatergoers witnessed Broadway's reopening with Bruce Springsteen’s solo acoustic performance at the St. James Theater. Major commercial development projects that were postponed due to the pandemic are also once again in the pipeline. Technology giants such as Apple and Facebook had previously announced major expansions into Manhattan. To further propel the recovery of NYC real estate, Mayor Bill de Blasio disclosed his recovery budget of $98.6 billion. The New York State Legislature, which passed a $212 billion budget, has also allocated part of the funding to aid economic recovery as the pandemic subsides. The industrial market also remained stable despite the dollar volume per $1-million in industrial transactions falling 25 percent from $1.75 billion in 2019 to $1.35 billion in 2020. This is due in part to the average price per square foot holding its value at $445 throughout the year. And even with the decline in leasing activities, the surge in online sales demand more than made up the difference. In 2020, the multinational conglomerate Amazon signed leases accounting for 750,000 square feet for new facilities in Staten Island and Queens. Expansions and new developments led by the film industry have also helped keep NYC’s industrial market strong. Netflix, Lionsgate, Broadway Stages, Kaufman Studios, Steiner Studios, Silvercup Studios, and several production facilities and media companies have occupied many of NYC’s warehouses, bringing in premiums of as much as 20 percent for the city. Market insiders are also confident that private and institutional investors who dropped out of deals during the early days of the pandemic due to fear of losses will return for fear of missing out on value-added and secure industrial investment opportunities throughout New York City. Homeowners can make their homes more energy-efficient in several inexpensive ways. Cheap fixes can be as simple as adding sealant around the windows or weather stripping around doors, reducing energy costs significantly. Unfortunately, while these small fixes reduce costs, they do not add much value to a home, which is also important for longevity and resale.
Much of what makes a home energy efficient relates to how the home remains cool and warm during the summer and winter, respectively. Homes considered energy efficient have good ventilation and are neither too dry, too humid, nor too drafty. Moreover, energy-efficient homes are outfitted with low-consumption devices to save water and the energy involved in heating water. One of the first places to start is with the windows. According to the Department of Energy, between 25 percent and 30 percent of energy is lost through the windows. However, windows have advanced considerably in the last few years, and homeowners can now opt for a range of features, including windows with more than one pane, UV-resistant windows, and types of frames such as fiberglass, wood, or vinyl frames, to be more energy-efficient. Replacing incandescent bulbs with more energy-efficient bulbs, such as halogen, compact fluorescent lamps, and light-emitting diode can also help save on the electric bill. Similarly, unplugging unused devices, such as cellphones and battery chargers, can save as much as 10 percent of the energy bill. Another big fix involves the cooling and heating systems, which can consume up to 43 percent of a home’s energy costs. Many experts state that homeowners should have new air-conditioning or heating installed if their current one is older than 12 years old. According to USA Today, newer units save a homeowner at least 30 percent in energy costs related to heating and cooling the home. When choosing a particular unit, homeowners should look for those with an Energy Star rating or a SEER (Seasonal Energy Efficiency Ratio) of at least 15. The higher the ratio, the more energy is saved. In addition, installing a new water heater can save energy. The water heater consumes up to 19 percent of a home’s energy. Consider a tankless heater, which is more energy efficient in that it only heats water on an as-needed basis, in contrast to traditional tanks, which store and heat large quantities of water at a time. To conserve energy, only use the heater for essential purposes. For instance, instead of running the washer on hot water, opt for cold or warm instead. Installing devices to reduce the water flow is another energy-efficient move. Low-flow fixtures, commonly called water misers, can be affixed to showerheads, faucets, and any plumbing fixture to reduce the amount of water used. Many of these devices can be adjusted to the homeowners’ tastes. Finally, installing a cool roof can improve a home's energy efficiency. These roofs come in white and other reflective colors, and they are designed to absorb less heat and divert sunlight away from home. According to USA Today, during the summer months, these roofs stay 50 degrees cooler than other types. Smart technology is threading steadily across the commercial real estate (CRE) sector. The global pandemic in 2020 and its aftermath have made the commercial sector rethink functionality and health security. As a result, the need for flexible, cost-effective, yet dependable solutions has become more conspicuous. One area that is seeing a particular shift in that direction is wireless lighting control.
Additionally, standards organizations and industry alliances, such as the International Electrotechnical Commission (IEC), the Institute of Electrical and Electronics Engineers (IEEE), the world’s largest professional association for innovation and technological excellence, and the DALI Alliance, the global industry organization for Digital Addressable Lighting Interface (DALI) lighting control, are also promoting wireless lighting control. Unlike wired lighting control that uses low-voltage hardwiring to transmit the control signals between the different devices, wireless lighting control uses radio waves. As a result, the wireless devices form a communication mesh that enables the easy and secure addition, removal, and replacement of devices. This last feature leads to the main benefits of wireless lighting control, namely fast and easy installation, greater scalability and flexibility, and cost reductions. The fast and easy installation and maintenance make wireless lighting control suitable for both renovation and new-build projects. For new constructions, wireless control allows for both added value, flexibility, and energy savings, as well as meeting stricter energy codes and Leadership in Energy and Environmental Design (LEED) requirements. For renovations, wireless lighting control could be specifically beneficial when retrofitting an existing wired lighting system. The latter approach appears to be more time- and cost-effective than replacing all the cables and conduits. In terms of scalability, wireless lighting control enables owners to test the technology at a scale matching their needs: from a single device to a whole municipality. For example, by simply exchanging the line voltage controls for wireless switches and multi-function touchscreen controllers, they could enhance a space, a building, or an entire campus. Wireless lighting control scalability and flexibility also come in handy with the significant change in how people use commercial spaces. Previously, hundreds of people gathered in the office. Nowadays, especially in the pandemic and post-pandemic contexts, it is not uncommon for premises to stay empty or with limited, sporadically spread occupancy. Unfortunately, wired lighting control turns out to be unable to keep up with this dynamic. Wireless systems with embedded sensors, individualized controls, and robust security protocols enable facilities managers to oversee lighting remotely. Furthermore, without the help of electricians, they could add controls for new technology like ultraviolet-C disinfecting lamps or optimize the controls of heating, ventilation, and air conditioning (HVAC) systems via the wireless occupancy sensors to employ airflows that minimize airborne pathogen transmission. Finally, wireless lighting controls allow systems to leverage human-centric lighting. The latter is a holistic approach that explores how the lighting in a given built setting impacts occupants’ well-being and productivity. For example, lighting temperature and color could be fine-tuned to match the amount of sunlight during the day and thus, minimize eye strain and general fatigue from computer screens and long days in the office. Led by managing principal John Salib, Castellan Real Estate Partners is a full-service, vertically integrated real estate investment firm in New York City. Since 2009, Castellan Real Estate Partners has focused on debt and equity real estate transactions in New York City and other major metropolitan markets.
The COVID-19 pandemic has left both New York tenants and landlords in precarious financial situations. Recently, New York announced a $2.7 billion emergency rental assistance program to help tenants and small landlords who have fallen behind on rent or mortgage payments over the last 15 months. In March 2020, the state enacted an eviction moratorium that prevented landlords from evicting tenants for non-payment of rent. As a result, landlords themselves were then unable to pay mortgages, utilities, and maintenance costs. The New York State Emergency Rental Assistance Program aims to resolve this issue by providing up to 12 months of past-due rent, three months of rental assistance, and a year of utility arrears directly to the landlord or utility company. To qualify for this assistance, the landlord must waive late fees and agree to refrain from raising rent for a year. The program should help up to 200,000 households, prioritizing in its first month individuals who are unemployed or earn below 50 percent of the area’s median income. A New York-based investment firm established in 2008, Castellan Real Estate Partners is managed by brothers and founding principals Paul and John Salib. Often referred to as Castellan, the company saw an opportunity following the 2008 financial crisis and created an acquisition platform to target undervalued assets and reposition them as valuable investments. In January 2018, Castellan Real Estate Partners sold a 1926 62-unit building at 1084 New York Avenue in Brooklyn to Sterling Group, a family-owned real estate investment service known for specializing in multifamily housing and storage facilities. Acquiring the property through bankruptcy, Castellan first purchased the walk-up apartment building in March 2013 for $6.1 million. The company invested in restoring the building’s exterior, installing intercoms and upgrading security systems to secure capital growth. Five years later, the 47,680-square-foot building, which also houses a 1,600-square-foot retail store, was sold for $13.8 million as part of a portfolio sale. This resulted in more than a 50 percent profit for Castellan. According to StreetEasy, a New York real estate listing site, the average rent for this building is $1,487 per month, with studio to three-bedroom apartments available. |
AuthorA fully integrated property investment and management firm, Castellan Real Estate Partners has served the greater New York City area for more than seven years. Archives
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