Highlights from Commercial Real Estate: Don’t Write NYC Off Just Yet!

Yieldstreet’s Mitch Rosen, Senior Director of Real Estate, and Seth Weissman, Managing Partner of Urban Standard Capital, discuss the New York City real estate market and how they think it can bounce back in the coming months.

Do not write a NYC epitaph just yet

As Seth sees it, it’s critical to recognize that New York City can’t be broadly defined. It comprises various asset types and neighborhoods and neighborhoods within neighborhoods. You are going to have some asset types that are going to perform better than others (hospitality/luxury retail vs multi-family rental or industrial) and certain neighborhoods that will outperform others.  The Brooklyn market looks to be stronger, almost considered a suburban market, particularly in lower density pockets.  New York City has a diversified industry base. Not just finance. Its tech, healthcare, education, law, etc., which provides a potentially strong springboard for recovery.

Where does NYC go from here and how does CRE rebound?  

The Cares Act and supplemental payments have helped renters to continue to make their payments and the positive domino effect is that when people make their payment, owners can pay their mortgages and real estate taxes and the system works. The government will need to continue to provide some level of support until economic activity normalizes. 

How does NYC bounce back? 

Short-term pain, but long-term fundamentals remain. People inherently want to be together, congregate, exchange ideas. We have learned a lot in the last 5 months about how the virus works and how to be safe.  We should have been socially distancing and wearing masks at the beginning.

Where does the market go over the next 6 months?

The next 2-3 months are going to be defined by price discovery.  A lot of the sellers are long-term owners who want to take their capital off the table.  Historically, the trend pre-Covid has been conversions of large one and two bedrooms to three and four bedroom.  I believe multi-family will continue to be the strongest performer, mixed-use with essential business tenants will be negatively impacted but not as significantly as mixed-use with non-essential retail or significant exposure to retail. 

About Urban Standard Capital 

Urban Standard Capital is a real estate investment company with three lines of business: ground-up development, renovation of existing properties, and short-term financing solutions within New York City. The three verticals do not exist in a vacuum, but rather speak to each other amplifying its knowledge of each. Urban Standard Capital’s experience investing on the equity side helps it make informed lending decisions as it can easily put itself in the shoes of its borrowers. As investors and developers, Urban Standard Capital is a responsible risk-taker, with exacting attention to detail. It’s composed of decisive, forward thinkers determined to turn new opportunities into new successes.

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