Changing face of the real estate market

Normally I stay local – but here’s an interesting price on the changing  face of the real estate market and more short term rentals. Not only in residential but in commercial leasing too.

Reported by White & Case.

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How do I find out if my building has air rights, and how do we sell them?

Henning Klokkeråsen/Flickr

Question:

I want to look into whether my building has air rights to sell. How do I go about it, and if we do have air rights, how does the board sell them?

Answer:

What are commonly referred to as air rights or development rights are legally based in a concept called floor area ratio, or FAR.

“FAR determines bulk of the building by establishing the amount of permitted floor area. FAR is calculated by multiplying the size of the zoning lot by a number/ratio permitted under the Zoning Resolution of the City of New York,” says Steve Wagner, a partner at the real estate law firm Wagner Berkow and a longtime board member at his Manhattan co-op. “The ratio number primarily depends on the zoning district you’re in, but other things may affect it.”

To figure out the allowed size of your building versus how big it is now involves a bit of algebra. In short, by doing some back-of the-napkin math with the length and width of your building’s lot and the length and width of your building itself, you should be able to figure out the gross size of your building and the number of square feet of FAR allowed for your lot. And if there’s a lot more floor space allowed than you currently have, you may have development rights to sell.

“In the most basic terms, to find out the number of square feet of FAR that’s available for sale, you take the number of square feet of the footprint of the property and multiply it times the ratio specified for that zoning district, and then deduct the floor area of your building.” Wagner says.

If only zoning were so simple!

“This is a complicated thing,” Wagner says. “The ratio is different depending on the use, for example whether it’s residential, commercial or what’s called a community facility.”

Also, the building’s mechanicals, cellar space, elevators and stair bulkhead don’t count towards the FAR square footage total.  Developers may be able to get FAR bonuses for including plazas or below-market-rate apartments in or around their buildings. Various zoning designations require street setbacks or have height caps, to name a few requirements from the array that exists, which may also limit other property owners ability to use excess FAR.

It could be that when you do these calculations you find out that your building is actually bigger than the zoning allows. Generally, this is because the building was constructed before current zoning rules went into effect, and there’s no need to panic, since your building is probably grandfathered in. However, it can be a pain if you’re trying to do any kind of addition, because you’re likely not allowed to add any more floor space, and even if you can buy development rights, some of it will just go to offset the amount that your building is over-built.

If you do have extra FAR, though, “Check with somebody who would be able to tell you whether there is a possibility of transferring them,” Wagner says. “An architect or an attorney who’s knowledgeable could tell you whether there are restrictions or whether you will be allowed to merge the zoning lots.”

Another feature of zoning rules is that additional FAR is only transferrable to a point: with few exceptions, you can only transfer to buildings next door (specifically, properties with 10 feet or more of contiguous lot lines) or, if you want to get creative, a few buildings over on the same block. The latter option would require getting the buildings between you and the buyer involved, so that the buyer can merge your and your neighbors’ zoning lots with theirs and daisy-chain the air rights over to their building.

“The person you’re selling to can be two or three properties away, but everybody has to agree,” Wagner says. “Ideally you’d want to have a contiguous lot line with the person who’s buying them.”

If a sale it looks like a possibility, “It’s not a bad idea to bring in a broker who knows the value and possibly knows the parties surrounding your building,” he adds. Thanks to the geographic limitations, “It’s not like the entire world can come in and buy development rights. There’s a limited number of people who can purchase them.”

Late in the process, either your board or the prospective purchaser will need to hire a surveyor to go through the building floor by floor and confirm the floor area down to the square foot. The sale negotiations can get complex, particularly if more than two building owners are involved. But the payoff can be huge.

“In prime Manhattan neighborhoods, the price for air rights can be $400 a square foot or higher” Wagner says. “It can be enough to redo the lobby, fix the facade, and have a big reserve for many years to come.”

He adds that he’s currently working on such a deal worth eight figures. As your board starts seeing dollar signs, it’s worth keeping in mind that the sale will be subject to taxes.

“So it’s not only figuring out how much you have to sell and figuring out who to buy it,” Wagner says. “You also have to figure out what you’re going to net out of it.”


As reported by Brickunderground.com

First Time Home Buyers Seminar – March 24th!

Thinking of buying a home for the first time and unsure how to best go about it, or just want to learn more.

Please join us for a First Time Home buyers Seminar on March 24th at the Brooklyn Office, 386 Atlantic Ave from 11am-12pm. A light breakfast will be served.

Please RSVP: firsttimebuyer@stribling.com

Dena Driver
Licensed Associate Real Estate Broker

Jaqueline Gill
Licensed Real Estate Salesperson

Julie Greenspon
Licensed Real Estate Salesperson

Gina Stormont, ChFC, CLTC
Financial Planner
Storming Financial Strategies

Melissa Cohen
Mortgage Banker
FM Home Loans

Rising mortgage rates squeeze U.S. refinancing activity

By Richard Leong

NEW YORK (Reuters) – Rising borrowing costs are dampening U.S. refinancing activity, with its weekly share of mortgage applications falling to the lowest level since August, the Mortgage Bankers Association said on Wednesday.

The Washington-based group said its index on refinancing applications fell 2.9 percent to 1,288.0 in the week ended Jan. 26 as average interest rates on 30-year mortgages rose to their highest level since March.

Home refinancing is seen a source of cash which homeowners can tap into. They can either switch into a cheaper loan which would lower their monthly payment, or borrow against the value of their homes through “cash-out” refinancing.

As mortgage rates rise, refinancing activity slows as this funding option becomes less viable for homeowners.

Average interest rates on 30-year conforming mortgages, or loans whose balances are $453,100 or less, rose to 4.41 percent, up 5 basis points from the previous week. This was highest since 4.46 percent in week of March 17.

Other 30-year mortgage rates on average were up 3 basis points on the week, while average 15-year mortgage rates climbed to 3.85 percent, the highest since April 2011.

Home loan rates have risen in step with U.S. bond yields.

Benchmark 10-year Treasury yield touched a near four-year peak of 2.746 percent on Wednesday, underpinned by bets on faster global economic growth and reduced stimulus from central banks.

The latest increase in mortgage rates also crimped application volume to buy homes.

MBA’s mortgage purchase index, seen a proxy on future home sales, was down 3.4 percent to 255.5 in the Jan. 26 week. It was up about 11 percent from its year-ago levels.

It was unclear whether the decline in purchase applications is an omen for home sales in the spring, which is the annual boom season for the real estate market.

Earlier on Wednesday, the National Association of Realtors said its index on pending home sales, another future sales gauge, rose for a third straight month in December.

The drop in both refinancing and purchase requests knocked overall mortgage activity from a four-month peak set the week before.

MBA’s total mortgage application index fell 2.6 percent to 413.4.

(Reporting by Richard Leong; Editing by Chizu Nomiyama and Meredith Mazzilli)

Only one left! 137 Atlantic Ave. Apt 3

3 Fantastic 3BR 2Bth available in the most central location in Brooklyn Heights.

This newly renovated large 3BR has a private huge roof deck. Ornate original details such as crown molding, exposed brick, and two original working fireplaces, give this apartment a wonderfully warm character. Large open plan kitchen and separate dining alcove lead into living room with wide plank hardwood floors and a large fireplace. Three bedrooms and two and full baths with high end finishes throughout make up the approx 1450 sq ft, Ceiling soar up to 14 ft. This apartment has everything you’ve been looking for, good closet space, a new washer dryer, central air Mitsubishi units and its own separate boiler and water heater too.
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77 Eastern Parkway, Prospect Heights

Price: $549,000 | Coop | Rooms: 3 | Bedrooms: 1 | Bathrooms: 1 | Maint/CC: $571

This Prospect Heights one-bedroom Co-op is beautifully renovated and perfectly located on Prospect Park at the Brooklyn Botanic Garden. This top floor boasts a bright new eat in kitchen with marble counter tops, stainless steel appliances, custom cabinetry and a lovely sun filled view. This is a meticulously maintained forty unit Co-op in a pre-war building. The large bedroom and living room are both spacious, serene, and exceptionally quiet with hardwood floors and gorgeous original molding throughout, as well as multiple closets. The building offers a free, large storage unit for each apartment in addition to bike and stroller storage, as well as a live-in super and laundry. Ideally located and steps to all of the best cultural icons of Brooklyn including gracious Grand Army Plaza, the Farmers Market, the Brooklyn Museum, and Public Library. Conveniently located down the street from the 2, 3, 4, and 5 express trains so Manhattan is at your fingertips in just 20 minutes! Close to the best restaurants, such as Olmsted and Tom’s Diner. At such a great price with a super low maintenance, this apartment will not last. See you at the first open house Sunday, February 18th! more “77 Eastern Parkway, Prospect Heights”

137 Atlantic Ave. Apt2

 

Price: $6,595 | Type: Rental | Rooms: 6 | Bedrooms: 3 | Bathrooms: 2 | Approx. Sq. Ft.: 1,250

Fantastic 3BR 2Bth available in the most central location in Brooklyn Heights.

This newly renovated large 3BR has its own terrace and is bright and airy. Ornate original details such as crown molding, exposed brick, and one original decorative fireplace, give this apartment a wonderfully warm character. Large open plan kitchen and separate dining alcove lead into living room with wide plank hardwood floors and a large fireplace. Three bedrooms and two and full baths with high end finishes throughout make up the approx 1250 sq ft; This apartment has everything you’ve been looking for, good closet space, a new washer dryer, central air Mitsubishi units and its own separate boiler and water heater too. more “137 Atlantic Ave. Apt2”

137 Atlantic Ave. Apt1

Price: $7,595 | Rooms: 8 | Bedrooms: 3 | Bathrooms: 2 | Approx. Sq. Ft.: 1,450

Fantastic 3BR 2Bth available in the most central location in Brooklyn Heights.

This newly renovated, light-flooded large 3BR wraps around a central terrace. Ornate original details such as crown molding, exposed brick, and two original decorative fireplaces, give this apartment a wonderful character. Large open plan kitchen and dining room step up to warm living room with wide plank hardwood floors and a large fireplace. Three bedrooms and two and full baths with high end finishes throughout make up this approximately 1450 sq ft. home. This apartment has everything you’ve been looking for, high ceilings, good closet space, a new washer dryer, Mitsubishi central air units and its own separate boiler and water heater too. more “137 Atlantic Ave. Apt1”

137 Atlantic Avenue

3 Fantastic 3BR 2Bth available in the most central location in Brooklyn Heights.

This newly renovated large 3BR has a private huge roof deck. Ornate original details such as crown molding, exposed brick, and two original working fireplaces, give this apartment a wonderfully warm character. Large open plan kitchen and separate dining alcove lead into living room with wide plank hardwood floors and a large fireplace. Three bedrooms and two and full baths with high end finishes throughout make up the approx 1450 sq ft, Ceiling soar up to 14 ft. This apartment has everything you’ve been looking for, good closet space, a new washer dryer, central air Mitsubishi units and its own separate boiler and water heater too.
more “137 Atlantic Avenue”