Category Archives: Real Estate

Trump Org Disengaging from Trump SoHo

Real Estate, , , ,

 

The Trump SoHo, located at the corner of Varick Street and Spring Street in the Hudson Square neighborhood of Manhattan. Photo courtesy of Beyond My Ken.

Trump SoHo will be losing its designation as a Trump hotel as the Trump Organization withdraws its name-licensing deal from the former Trump signature destination in lower Manhattan.

Donald Trump announced his plan to build Trump SoHo from his position as host of The Apprentice reality television show, to much excited anticipation. But even back in 2007 the project suffered. Wall Street lenders would not fund Trump projects anymore, due to his history of bankruptcies, so the money for the hotel came from a controversial source.

Bayrock Capital was a major sponsor, led by Felix Sater, who had been convicted of overseeing a “pump and dump” stock fraud scam which was connected to Russian criminals. Additional money for the hotel came from foreign sources, mostly from the former Soviet Union who were suspected of money laundering. No charges ever stuck.

After it opened in 2010, the hotel never did well. Managed by the Trump organization from the very beginning, the hotel never recovered from the economic crisis that began in 2008, which left the target population’s discretionary spending in tatters.

In 2014 the hotel was sold in a foreclosure auction to the CIM Group, which was one of its biggest lenders. After Trump’s election business was still stuck. Liberals have been boycotting everything and anything “Trump,” including the noted refusal of basketball legend LeBron James to stay at the hotel last year. This past summer the Koi Restaurant closed its doors at the bottom of the hotel noting that business plummeted after Trump’s election. “Before Trump won,” the restaurant told Money magazine, “we were doing great.”

China Investing Heavily in US Real Estate

Economy, Real Estate, ,

A recent study outlines the extent to which Chinese investors have been flooding money into the United States real estate market. According to the study a recent surge of Chinese buying of residential and commercial property as brought the five-year total investment to over $110 billion.

Conducted by the Asia Society and Rosen Consulting Group, the study shows that the huge size of the total investment helped the US real estate market recover from the real estate crash that began in 2006. The Chinese investment in real estate has also influenced other countries, inflating prices in developed markets such as Australia and the UK.

The study predicts that, despite the tightening restrictions of capital outflows by Beijing, the amount of investment will double to $218 billion.

“What makes China different and noteworthy is the combination of the high volume of investment (and) the breadth of its participation across all real estate categories,” including a “somewhat unique entry into residential purchases,” the study said.

Commercial Real Estate Market On the Rise

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The commercial real estate market has been doing exceptionally well in the Eastern U.S. since the start of this year. Companies with a focus on the region, such as Northland Investment Corporation with CEO Steven P. Rosenthal, are being swept into a pace that, according to local brokers, hasn’t been matched in years. During the first two months of 2014, Erie County saw almost $120 million worth of commercial property deals despite the frigid weather. Robert Strell, a broker and owner of MBA Consulting and president of the Western New York Commercial Association of Realtors, said: “It’s almost staggering, I’ve got to tell you. We knew there was action and activity, but the total is a big number and there’s a lot more coming down the pike.” Experts have said that given the current rate, the market may surpass the half-billion-dollar mark and post more than $720 million in deals throughout the rest of the year. The activity recorded in January and February is high-priced, with deals exceeding $5 million in value and some reaching as high as $15 million. Amy Nagy of Hastings Cohn Real Estate confirmed this positive outlook, stating: “It’s highly busy in this first quarter. There’s a lot of momentum in the market that’s generating things moving along.”

Home Sales Boding Well for Economy

Economy, Real Estate, , ,

In what many economists believe may be the highest numbers in at least three years, home sales are going up as demand for residential real estate continues to give added home sales are upstrength to the economic recovery.

Taken together, the number of new and existing homes which were bought reached the annualized pace of 5.64 million as of last month. This is the quickest pace since November of 2009.

Builder confidence is rising in response to improved sales even while the cost to borrow is going up. The limited supply of homes, lots and materials are also adding to builder confidence.

Federal spending cuts combined with improvements in the housing and auto markets will most likely boost economic growth in the last half of this year.

“The economy is slowly improving,” said Washington-based Roberto Perli, a partner at Cornerstone Macro LP. “I look for the housing recovery to continue. The fundamentals of the market are strong enough to overcome higher mortgage rates.”

Real Estate Taxes: Israel Tax Authority with Gidi Bar Zakay

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To fight the soaring real estate prices, the Israel Tax Authority with Gidi Bar Zakay has taken many measures. In December of 2010, the Israeli finance and housing ministers made two new tax amendments. For those purchasing a second or third residential property, the taxes rose from 3.5% to 5% for properties that were up to IS 1 million. The tax went from 5% to 6% for those properties that were between IS1 and up to IS3 million.

However, non-primary residential properties have been taxed at 20% up until now; if sold within four years, they would now be tax exempt. These amendments were planned to be good for two years, and the end of this period is approaching soon. It will be interesting to see how the Israeli finance and housing ministers deal with it now, and how the Israel Tax Authority with Gidi Bar Zakay reacts.