Manhattan Rents Reach Another Record High in July 

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From NY Post.com:

Manhattan rents soared to another record high in July but leasing activity dipped — leaving a glimmer of hope the red-hot market is approaching its peak. Renters forked over an average of $5,588 last month to live in the borough — a 9.3% increase from last July — and prices jumped more than 15% in Brooklyn and parts of Queens, according to the latest rental market report from appraisers Miller Samuel and brokerage giant Douglas Elliman. Manhattan’s median rent, at $4,400 per month, also set a new record for the fourth time in five consecutive months, the report showed. The July figure marked a 2.2% month-over-month increase from June’s median rent of $4,300, the only month in the past five that saw a decrease from the 30 days prior. The skyrocketing prices are 30% higher than what landlords charged in 2019 — despite the pandemic-induced exodus dropping Manhattan’s population by 400,000 between June 2020 and June 2022, according to U.S. Census data. The dearth of apartments for sale because of high interest rates have forced many would-be buyers to rent, brokers said. Workers also have returned to live in Manhattan as more and more companies mandate they be at their desks at least part of the week. Meanwhile, the number of new leases signed last month declined by 6% compared to 2022.

Miller Samuel CEO Jonathan Miller told The Post that prices may be capping out. “What’s a little different this month is that leasing activity fell, and typically July and August are peak leasing season,” Miller said. “What this suggests is that consumers are beginning to hit the threshold of what they can afford, which may suggest that rents are approaching their peak for the time being.” Miller noted that unlike in the sale of goods and services, where prices surge when there’s a greater demand, in housing “as landlords push to get higher rents, we’re seeing a drop in the people that are actually renting.” Still, the increase in rents in July was across the board — from studio apartments to three-bedroom cribs. In Manhattan, the average rental price for a studio in July was $3,236. One-, two- and three-bedroom apartments went for $4,366, $6,226 and $10,744, respectively. To live in a luxury building in Manhattan, be prepared to dish out an average of $15,260 monthly, the report showed — a nearly 13% surge from last year. There were few deals to be found across the East River. Brooklyn’s median rent rose 16.2%, to $3,950, compared to last year — the highest in history. The borough saw 11.2% less inventory and a 52.1% dip in new lease signings, according to the report. The average rental in Brooklyn was $4,347 in July, another record high. Rents in popular Queens neighborhoods like Astoria and Long Island City spiked 17% year-over-year, to an average of $4,003, according to the report.. The median rental price in northwest Queens was $3,641. New leases were down 13.5% in the area, though the average rental spent only one day on the market before getting snatched up.

The report does not include data on the Bronx or Staten Island. Miller expects the record prices to be broken again next month, “the busiest leasing season of the year.” “July is second, so it’s certainly possible to see another record net month, but I suspect we’re getting near the top,” Miller said. However, that doesn’t mean prices will be falling come September. “Many people (think) the opposite of rising rents are falling rents, but we just had the Federal Reserve say they didn’t think there was a recession in front of us, so I contend that the opposite of rising rents is stable rent,” Miller said. “It seems unreasonable to expect rents to fall significantly in the near term” unless there was some “significant economic event with substantial job loss,” he added. US data released Thursday showed the price of everyday goods and services rose moderately in July, showing signs of progress in the central bank’s tightening cycle to snuff tamp down inflation. However, rising housing costs were by far the largest contributor to July’s uptick in prices, accounting for 90% of the advance, the Bureau of Labor Statistics reported.

Inflation Rose 0.2% in July..First Increase in a Year

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CONSUMER PRICE INDEX – JULY 2023

From the U.S. Bureau of Labor Statistics:

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.2 percent in July on a seasonally adjusted basis, the same increase as in June, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.2 percent before seasonal adjustment.

The index for shelter was by far the largest contributor to the monthly all items increase, accounting for over 90 percent of the increase, with the index for motor vehicle insurance also contributing. The food index increased 0.2 percent in July after increasing 0.1 percent the previous month. The index for food at home increased 0.3 percent over the month while the index for food away from home rose 0.2 percent in July. The energy index rose 0.1 percent in July as the major energy component indexes were mixed.

The index for all items less food and energy rose 0.2 percent in July, as it did in June. Indexes which increased in June include shelter, motor vehicle insurance, education, and recreation. The indexes for airline fares, used cars and trucks, medical care, and communication were among those that decreased over the month.

The all items index increased 3.2 percent for the 12 months ending July, slightly more than the 3.0-percent increase for the 12 months ending in June. The all items less food and energy index rose 4.7 percent over the last 12 months. The energy index decreased 12.5 percent for the 12 months ending July, and the food index increased 4.9 percent over the last year.

$12M in 6 months: How New York’s First Legal Weed Retailer Exceeded Expectations

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From the Gothamist:

Cannabis sales figures released on Monday show that the dispensary run by the nonprofit Housing Works exceeded its revenue expectations for the first six months. But it’s unclear whether other early licensees who have struggled with New York state’s slow rollout of the retail industry will be able to replicate this success.

The state’s cannabis program has prioritized granting licenses to nonprofits like Housing Works as well as people whose lives were affected by prohibition. In late December, when Housing Works opened New York’s first legal recreational marijuana dispensary in the East Village, a line stretched around the block, and it sparked a flurry of local news coverage. But the initial hype was not a guarantee of sustained sales — especially given how many unlicensed dispensaries were selling untaxed weed nearby.

The Housing Works shop sold $12 million worth of edibles, flower and other marijuana products in its first six months, averaging $2 million a month. That’s twice the monthly revenue the nonprofit was projecting when it launched, according to Matthew Bernardo, president of Housing Works, which provides health care, housing and social services.

“We were very pleased and it was really successful from day one,” Bernardo said. The dispensary did about $40,000 in sales within three hours of opening on Dec. 29, the nonprofit said.

Because state officials have been slow to open other dispensaries, Housing Works accounts for more than a third of the $33.4 million the state’s legal recreational marijuana industry generated in its first six months. But more than 400 retail licenses have now been distributed, and other shops are coming online one by one. As of Friday, seven legal dispensaries operated across the five boroughs, and 17 had opened statewide, not counting a handful of delivery-only operations.

The state’s legal recreational cannabis industry generated $33.4 million from sales in its first six months. Housing Works brought in more than a third of that revenue.

From the New York State Cannabis Control Board

For Bernard Allulli, who has a license to open a dispensary in Manhattan, the initial sales figures from Housing Works are encouraging. “It helps with investors, obviously, for those numbers to be released, because people know that this is a real thing,” Allulli said.

Still, he said he felt Housing Works had certain advantages.

“I’m not going to be on Broadway and Eighth Street right on top of NYU, and I’m not the first shop that opens up that has all of that press behind them,” Allulli said.

At Housing Works, deliveries currently account for about 5% to 7% of sales, and Bernardo said the goal is to expand that segment of the business. “We are trying to get the word out,” he said.

So far, Housing Works delivers to parts of Manhattan and Brooklyn as well as Long Island City in Queens.

Part of the appeal of legalizing marijuana was to generate more tax revenue for the state. Housing Works created about $1.8 million in sales tax in its first six months. New York’s recreational cannabis retailers generated an estimated $4.3 million in sales tax revenue during that time, based on overall sales figures from the state’s Cannabis Control Board.

Tax revenue from the recreational cannabis program is supposed to go towards education, grants to community organizations and drug treatment programs.

Meanwhile, Housing Works is using its cannabis revenue to bolster its social programs, including housing and job training for people re-entering the community after being incarcerated, Bernardo said.

He added that the company is planning to launch a cannabis job training program where people can shadow employees at the Housing Works dispensary, so they can either work there or elsewhere in the legal weed industry.

Wegmans to Open in the East Village in October

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From NY Post:

Downtown Manhattan is about to get a big dose of upstate New York.

Almost exactly two years after the Rochester-based grocery giant Wegmans announced it would debut its first-ever Manhattan location in the former Kmart on Astor Place during the second half of 2023, now comes word of its specific opening date. And, just like the company said in 2021, it’s right on target.

The two-level, 87,500-square-foot store — located in the 1907-built 770 Broadway — will open for business on Oct. 18 at 9 a.m., according to a company release.

It’s the first Wegmans location in Manhattan, but not the first within city limits.

“We know our customers can’t wait to come see what we have in store and our employees have been training, in some cases, for over a year to get ready for this day,” says store manager Matt Dailor in the release. “Wegmans is a celebration of food and people, and we can’t wait to open the doors on October 18 to our community here in the East Village.”

On Oct. 27, 2019, almost exactly four years before the opening of this Astor Place spread, Wegmans made its Big Apple debut across the East River in the Brooklyn Navy Yard, which remains open.

Ever since the company announced its forthcoming Astor Place location, the space has been decorated with company designs. Now, windows bear logos -- as do docking stations for Citi Bike right in front.
Ever since the company announced its forthcoming Astor Place location, the space has been decorated with company designs. Now, windows bear logos — as do docking stations for Citi Bike right in front.
The new store runs two levels at 770 Broadway in the former Kmart space.
The new store runs two levels at 770 Broadway in the former Kmart space.
The new store is still in the works, and will have one floor for prepared foods and the lower level for grocery staples.
The new store is still in the works, and will have one floor for prepared foods and the lower level for grocery staples.
Visitors will recognize the interior design of Wegmans, though this one will have design elements in its decorative windows resembling the building's architectural details.
Visitors will recognize the interior design of Wegmans, though this one will have unique elements in its decorative windows resembling the building’s own architectural details.
Under rainy skies, the Brooklyn Wegmans opened in October 2019.
Under rainy skies, the Brooklyn Wegmans opened in October 2019.
The Brooklyn opening drew crowds of fans to the store.
The Brooklyn opening drew crowds of fans to the store.
"Wegmaniacs" loaded up on their favorite products, which will happen when the Manhattan location opens this fall.
“Wegmaniacs” loaded up on their favorite products, which will also happen when the Manhattan location opens this fall.

The bulk of Wegmans locations are in New York State — spanning from Buffalo to a forthcoming store in Long Island’s Suffolk County — with plenty of others in Pennsylvania, New Jersey, Massachusetts, Maryland, Delaware, the District of Columbia, Virginia and North Carolina. Future stores, according to the Wegmans website, will include one in Norwalk, Connecticut — which will be the first to open in that state.

The grand opening of the Astor Place behemoth comes full circle after summer 2021 saw speculation that Wegmans would move into the former Kmart, which shut abruptly in July 2021. Published reports, as well as Reddit chatter, said the space would be replaced by a “first-class regional grocer,” leading many curious minds to offer their guesses of Wegmans, Whole Foods or Trader Joe’s.

What customers can expect: fresh sushi, sandwiches, pizza and even Mediterranean bites from the “Mezze” section. What’s more, in the first half of 2024, visitors will also have an on-site dining room with a sushi bar, as well as a Champagne and oyster bar.

Similar to Trader Joe’s, Wegmans has long attracted a cult following — particularly among natives of Western and Central New York who grew up chowing down on its fresh, and reasonably priced, food.88

The loyalty was so strong for some upstate natives that, despite living in New York City, they’d drive 330 miles home to Rochester to load up on several months worth of groceries to cart back to Manhattan. Others deliberately rented apartments or bought homes near the closest Wegmans stores — and not just for breezy shopping, but also for nostalgia.

Longtime customer favorites include the brand’s ginger-flavored sparkling water, the cave-ripened Cremeux de Bourgogne cheese, chocolate-dipped chocolate chip cookies that sandwich flavored buttercream frosting and, this being an upstate brand, its Buffalo wings.

Record High Residential Rental Downtown

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From NY Post:

A penthouse at 100 Vandam in downtown Manhattan has set a record for the highest publicized residential lease in New York City — renting for a jaw-dropping $125,000 per month.

The tenant has not been identified, but was represented by Platinum Properties agents Cyrus Eyn and Cash Bernard. Nest Seekers’ Jessica C. Campbell held the listing.

Occupying over 6,500 square feet, the duplex residence takes up the 20th and 21st floors of the 25-story building.

Made up of six bedrooms and seven bathrooms, the home boasts panoramic views of the city skyline, the Hudson River, the New York Harbor, and the Statue of Liberty through its wraparound floor-to-ceiling windows, the previous listing notes.

The home is considered to have one of the largest outdoor spaces in Manhattan, totaling 3,821 square feet surrounded by manicured gardens.

From Nestseekers.com

Features of the unit include an open kitchen with signature millwork and blue de savoie stone island countertops.

All bedrooms come with ensuite bathrooms. The double-exposure primary bedroom features an expansive closet, a dressing room and a spa-like ensuite bathroom with heated floors.

Smart-home ready, the residence also features beamed ceilings and pre-war window fenestrations.

The kitchen.
The kitchen.
One of six bedrooms.
One of six bedrooms.

Situated in a full-service building, it has a 24-hour concierge, a live-in resident manager and a slew of amenities, which include a second-floor 1,200-square-foot fitness center with yoga and training studios, a children’s playroom, two residents’ lounges, cold storage, private and bicycle storage and a theater-quality screening room.

While the monthly price is the highest on record, sources told The Real Deal, that other units downtown have rented for more. Unlike sales, rentals are not publicly recorded in order to verify.

“It’s the highest [rent] I’m aware of,” Jonathan Miller, whose appraisal firm Miller Samuel prepares market reports for Douglas Elliman, told the outlet.

Crane Catches Fire and Falls in Hells Kitchen This Morning

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From NY Post:

Five people were injured, including a firefighter, when a crane collapsed into a neighboring building after catching fire in New York City on Wednesday morning, authorities said.

The construction equipment and debris fell near 41st and 10th Avenue in Manhattan around 7:40 a.m, the FDNY said.

The five injured people suffered non-life-threatening injuries.

The crane caught fire and collapsed at W. 41st Street and 10th Avenue (from NY Post)

Congestion Pricing Cameras Starting to be Installed

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From W42st.com

On Friday, New York started installing the first of the 120 toll readers on W61st Street and West End Avenue, which will be empowered to monitor and charge congestion fees for drivers heading below 60th Street in Manhattan from Spring 2024.

When we dropped by to take photographs of the newly installed cameras, a driver was double parked in the street, shooting a video for his social media account. Jimmy Gomez, known on Instagram as @blacktiger12, posted and shared with his colleagues: “The city is ready to kill us with the tolls. Enjoy!” Gomez lives in the Bronx and is an UBER driver. He said that even though the city might charge the livery drivers just once a day, it was an extra cost they could not afford, adding: “But for the people who are coming to the city, it’s gonna be insane.”

Gomez is not the only one against the congestion charges. Phil Murphy, the Governor of New Jersey, filed a lawsuit to block New York’s congestion tolling program on Friday. Governor Murphy said on social media that he wanted to prevent the implementation of the controversial charges, suggesting that the federal government may have side-stepped conventional channels. Murphy said that the tolls were “anti-environmental, anti-commuter and anti-business.”

Congestion pricing cameras at West 61st Street and West End Avenue (from W42st.com)

Landlord Defaults On Garment District Loan After WeWork Vacates 135K SF

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July 19, 2023 Ciara Long, Bisnow New York City 

From Bisnow:

The owner of a nine-story office condominium in Manhattan’s Garment District has fallen behind on its debt obligation after the building’s sole office tenant stopped paying rent.

The loan backing the commercial portion of the 18-story 315 West 36th St. building, built in 1926, is now in special servicing, according to the Morningstar Credit database. The building’s owner, Walter & Samuels, has been in default since April, according to commentary by special servicer Midland Loan Services.

The largest tenant in the property WeWork, signed a lease in 2015 covering roughly 135K SF across all nine floors of office in the building. But WeWork has stopped paying rent, according to the special servicer commentary, and is not planning to renew its lease for the space.

The building has 143K SF of leaseable space, including ground-floor retail. Walter & Samuels took out a $77M loan at the building in 2018, which matures in March 2028. Walter & Samuels, led by David Berley, paid SL Green $115M for a 35.5% stake in the building a few months after WeWork signed its lease.

WeWork doesn’t list the building on its website, but does offer coworking space down the block at 229 West 36th St.

The building has nine stories of residential condos atop the commercial property and spans 276K SF in total. Ratings agency Fitch signaled in early June that the property’s CMBS debt could face a credit downgrade, Crain’s New York Business reported.

The lender and special servicer have executed a pre-negotiation letter and are starting workout discussions for the space, according to the servicer commentary.

Representatives for Walter & Samuels and WeWork declined to comment to Bisnow. 

WeWork’s contraction efforts in recent years have led to upheaval in the office markets it operates in. After closing scores of locations in the early months of the pandemic, it announced last fall it would close 40 more as its losses mounted. It was sued in Chicago earlier this year for vacating a property it agreed to lease until 2033. 

In one instance, WeWork stopped paying rent to itself. At 600 California St. in San Francisco, a building in which WeWork has a 3% ownership stake and occupies more than 50%, loan documents indicate it stopped paying rent earlier this year, Bisnow previously reported.

1 in 5 New Yorkers May Be Drinking Water From Lead Pipes, new report says

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From the Gothamist

Lead pipes may carry water to as many as 900,000 New York City homes, more than 60 years after such pipes were banned across the five boroughs, according to a new report by the New York City Coalition to End Lead Poisoning.

By analyzing publicly available data from the city’s Department of Environmental Protection, the report found that nearly half of all buildings in Brooklyn and Manhattan are served by pipes that are either certainly or potentially made of lead, a dangerous heavy metal that can cause permanent brain damage and other developmental problems in children if consumed. Staten Island’s Port Richmond had the highest proportion among individual neighborhoods.

The pipes need to be replaced for the health of the public, said Joan Matthews, senior attorney with the Natural Resources Defense Council, which contributed to the report. That’s why she and the report’s other authors want the City Council to pass a bill mandating that city agencies replace the lead pipes within the next decade.

Why lead pipes remain in NYC

  • Lead is a dangerous heavy metal that can cause permanent brain damage in children.
  • New York City’s water supply is lead-free, but it can become contaminated in the service lines that lead from water mains to people’s homes. About 40% of city service lines are believed to contain lead.
  • You can check the status of your pipes on the Department of Environmental Protection’s Water Connection Information map.
  • If your home has a lead or possible lead service line, follow the Department of Environmental Protection’s guidelines for reducing exposure. You can also follow that link to request a free test kit.

New York City treats its water to prevent corrosion, the chemical reaction by which lead flakes off the pipes and into the water supply, according to the Department of Environmental Protection. “While we agree that privately-owned lead service lines should be removed, and are actively working to do that, NYC’s daily water supply is safe,” DEP Commissioner Rohit Aggarwala said via an emailed statement.

But lead levels can still spike depending on the temperature of the water and the time since it was last turned on. Nearly a decade ago, Flint, Michigan experienced a lead crisis after merely switching what water source went through its pipes.

New York City outlawed new installations of lead service lines — the pipes that carry water from central mains to individual buildings — in 1961. But many of the predating lead service lines are still underground, and because so much time has passed, it’s unclear exactly how many remain.

For the new report, the data team for the NYC Coalition to End Lead Poisoning — a group of experts and advocates that’s been campaigning for the cause since the 1980s — studied lead service line records published biannually by the Department of Environmental Protection. The city agency identifies confirmed lead service lines throughout the five boroughs. It also labels a pipe “potential lead” if historical records indicate that at least a portion of the water service line is lead. But it’s hard to know for sure because the pipes were installed so long ago.

The report’s authors classified the number of each service line by neighborhood and joined the counts with population data to estimate how many New Yorkers use the poisonous pipes.

The report found about 40% of citywide service lines include some lead pipe. Those service lines provide water to an estimated 1.8 million people, or more than 20% of the city’s population.

Brooklyn and Manhattan led the city in the estimated proportion of lead service lines, at 46% and 44%, respectively. The Bronx, meanwhile, had the largest chunk of confirmed lead service lines of all the boroughs.

Staten Island had a below-average proportion of lead service lines at the borough level, but its Port Richmond neighborhood, situated on its North Shore, had the largest share by far of lead service lines: an estimated 61% of its pipes are either believed or confirmed to contain lead. East Harlem, Coney Island in Brooklyn and Jamaica in Queens also ranked high on the list of neighborhoods most plagued by lead service lines.