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.
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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. Castellan Real Estate Partners is a fully integrated investment firm that undertakes development, lending, property management, and more. Dedicated to green development of its property portfolio, Castellan Real Estate Partners has partnered with Harlem Community Development Corporation (HCDC) to install solar panels on the roof of one of its properties and to undertake other weatherization projects. HCDC helps individuals in Harlem and surrounding communities take advantage of opportunities to improve their homes and neighborhoods. One of the major services that HCDC provides for the community is connection to the Weatherization Assistance Program (WAP), which provides federal funding for weatherization projects for qualifying families. HCDC can determine eligibility for individuals and entire buildings, and then discuss potential improvements for reducing energy consumption and making homes safer. Projects covered by WAP grants include lighting upgrades, roof insulation, heating system conversions, and smoke detector installation. Funding for the grants comes from the US Departments of Energy and Health and Human Services. Law prevents any increases in rent for improvements completed using these grants, which are meant to decrease energy demands while educating citizens about green practices. |
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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