On Interest  & Mortgage rates:

On July 25th and 26th the FED will meet again to discuss interest rates, where it is expected that they will raise rates again 0.25%. We are expecting this to occur again after the September 2023 meeting before starting to taper down in 2024.

Mortgage Rates are currently at their highest levels this year with the 30-year hitting 7.22% this month and the 15-year touching 6.65%.

NYC Development & Construction News Worth Repeating:

1. Rider Levett Bucknall (RLB) recently issued their Q1 2023 Construction Cost Report for North America. For New York it found that construction costs varied as follows:

Residential Multi-Family Development: $225/sf to $435/sf

Residential Single-Family Development: $320/sf to $640/sf

Prime Office Development: $370/sf to $855/sf

Secondary Office Development: $215/sf to $535/sf

Retail Strip Center Development: $340/sf to $670/sf

5-Star Hotel Development: $460/sf to $690/sf

3-Star Hotel Development: $340/sf to $460/sf

Hospital Development: $580/sf to $870/sf

Industrial Warehouse Development: $125/sf to $215/sf

Education - Elementary School Development: $490/sf to $620/sf

Education - High School Development: $535/sf to $680/sf

Above-Grade Parking Construction: $105/sf to $185/sf

Below-Grade Parking Construction: $145/sf to $225/sf

The values above represent hard construction costs based on price per square foot of gross floor area.

1. 421a Watch - Governor Hochul planned to use an Executive Order to extend 421-a behind the scenes. The order would have created a similar program to 421-a; officials were contemplating a measure involving payments in lieu of taxes, or “PILOT”s. NYS would take over properties and then rent them back to developers through long-term ground leases. The rent would be less than what the developers would pay in property taxes, essentially substituting for the benefit that 421a once provided. However, it seems that the labor unions were not fully on board with the plan and shot it down. Stay tuned.

Sources: The Real Deal & New York Focus

Highlighted Development Site Sale:

Development Site Advisors®️ (DSA) just sold 2610 & 2616 Cropsey Avenue in the Gravesend neighborhood of Brooklyn NY. The assemblage is a 104’ x 95, 9,545 sq. ft. lot located in an R6 zoning district, allowing for an as-of-right development of 28,635 ZFA.  The sales price of $4,600,000 equates to $160/ZFA. DSA was the exclusive and sole broker in this all-cash transaction. Congratulations to our Brooklyn South Neighborhood Focused Platform® broker, Elana Kapul on the sale, as well as the Seller and Purchaser!