Author - Alexandra R. Fasulo

Altice vacates St. Louis commercial office space

Altice vacates St. Louis commercial office space

ST. LOUIS, MO/May 21, 2017 (STLRealEstate.News) Parent company of Suddenlink Communications, a St. Louis-based startup with communications technology, has slowly decreased its local footprint since acquiring Suddenlink in December 2015 for $9.1 billion.  Altice, the global telecommunications company behind the acquisition, this week confirmed that the company has consolidated two of its St. Louis-area offices into one by vacating nearly 46,000-square feet at 575 Maryville Center Drive in Town & Country towards the end of 2016.  Additionally, the company has relocated an unconfirmed amount of employees from St. Louis to New York.

“As we strengthen our operations in a highly competitive market and advance our position as a best-in-class connectivity company, last year we consolidated two offices in St. Louis and deployed some corporate and key business functions closer to our operations, partners, and the communities we serve,” said an Atlice spokeswoman in a statement to the St. Louis Business Journal.

After the consolidation, the company is only operating out of their office space at 520 Maryville Centre Drive.  To make the move possible, Atlice had to bail out of their year lease on their previous location at 575 Maryville Centre, where it was the occupant of the entire third flood of the building. The space left behind is now available for sublease at $15 per square foot.  The building, owned by New York-based private equity real estate asset manager Bluerock Real Estate, also has high profile tenants like CenturyLink and Cushman & Wakefield.

The building is located in a hot St. Louis submarket today, with only a 7.2 percent vacancy rate, second-lowest rate in the region trailing only to Clayton, according to research from Newmark Grubb Zimmer.  Comparatively, the St. Louis metro average is around 11.2 percent.

According to the St. Louis Business Journal, Suddenlink generated $681 million in revenue during the first quarter of this year, which was a 9 percent increase from this time last year.

Chinese real estate investors interested in Miami market

Chinese real estate investors interested in Miami market

May 21, 2017 (STLRealEstate.News) Until recently, Asian investors were ultimately unacquainted with the Southern American city of Miami.  The reasons for this include lingering misconceptions of the “Miami Vice” era and the absence of direct flights from South Florida to East Asia.  However, some key factors are catching Asian investors’ eyes as they look towards the booming tropical haven.

Despite measures by its government to curb capital outflow, China is still dominating the global real estate scene today.  When looking at numbers from the last 2-years, investment in Florida real estate by Chinese buyers increased by 1 percent year-over-year from 2015 to 2016, according to the Florida Association of Realtors.  “Interest from Chinese buyers and investors continues to grow in South Florida,” said Teresa Kinney of the MIAMI Association of REALTORS.  “For the first time in 2016, Chinese buyers ranked in the top tier of foreign purchasers in South Florida.  Like other foreign investors, they are attracted to the desirability of the location, profitability of investment, safety, climate, clean air, shopping venues, and our institutions of higher learning.”

China isn’t the only Asian nation that is taking note of the South Florida region.  Japan made a $220 million purchase of the iconic Miami Tower earlier this year, one of the region’s biggest investment deals thus far in 2017.  Additionally, Asian Pacific Islanders are also becoming more active in the U.S. mortgage market, even though their global activity is still dwarfed in comparison by the likes of Japan and China.

This past April, China’s interest in Florida was definitely solidified when Chinese President Xi Jinping arrived in Boca Raton to meet with President Donald Trump.  He visited Mar-a-Lago, and his presence has created a “golden goose” ripple effect – meaning, if the president puts his seal of approval on something, all Chinese investors are likely to follow.

Boland Place development project officially approved

Boland Place development project officially approved

Boland Place & Dale Avenue multi-million dollar apartment complex approved

RICHMOND HEIGHTS, MO/May 19, 2017 (STLRealEstate.News) Richmond Heights made a massive approval plan for $37 million Boland Place development today.  Officials approved an agreement with developer Joseph Cyr, who has plans to build the multi-million dollar apartment complex at Dale Avenue and Boland Place.  Despite the tax agreement cap put in place by the city of St. Louis, the city still agreed to a payment in lieu of taxes that will cap real estate taxes at $297,396 per year.  Put simply, taxes over that threshold will be abated for a 10-year period upon completion of the project.

The developer is a former Lawrence Group employee with years of experience in the St. Louis development industry.  Cyr plans to build a five-story, 187-unit apartment complex with 4,000 square feet of retail space on the ground flood.  The project is a big undertaking, and is estimated to take 3-years with a final completion sometime in 2020.

P&M Holdings, a business entity controlled by Cyr, acquired the properties in August 2016 for $885,000, the St. Louis Business Journal reported.  The Richmond Heights Church of God in Christ and before that, the vacant A.B. Green School, previously occupied the site for the project.  Although Richmond Heights actually approved the development back in February 2016, Cyr was forced to ask for tax relief because the projected tax on the completed project came in at 50 percent higher than he was initially expecting.

To date, Cyr has raised $8 million in equity to help fund the big project.  The remaining $29 million will have to come from various lenders, many of which he is already hotly pursuing.  City documents, provided by the St. Louis Business Journal, also confirm that Cyr is in the process of securing a loan for the project.  No official word on when the construction development will officially be underway.

Old Shriners Hospital site to be developed

Old Shriners Hospital site to be developed

Old Shriners Hospital in Frontenac to be developed by the Desco Group

ST. LOUIS, MO/May 19, 2017 (STLRealEstate.News) The old Shriners Hospital for Children site, presently abandoned and looking rundown, has a new future just around the corner.  The Desco Group, commercial development company based out of downtown St. Louis, this week officially submitted its plans with the city of Fontenac to redevelop the site into a multi-building, mixed-used project.  The project, which would be a three-story undertaking, 36,000-square-foot office and retail building, will also include two 6,500-square-foot restaurants, as well as a Lifetime Fitness gym.  There will even be parking included onsite at eh 2001 S. Lindbergh Blvd. site address.

Overall, this is no cheap project.  The total investment on the project is expected to exceed $80 million, according to Scott Sachtleben, the present senior vice president of development and general counsel with the Desco Group.  This isn’t the first time the city of St. Louis is hearing about the project from Desco, however.  The group has had the land, which is currently owned by Shriners, under contract since May 2015.  According to the St. Louis County records, observed by the St. Louis Business Journal, the property has an appraised value of $11.7 million.

The site was left vacant two years ago when the Shriners Hospital for Children moved into a new $50 million, 90,000-square-foot specialty hospital located at the corner of Clayton and Newstead avenues in St. Louis.  Shriners today is one of the St. Louis’ largest hospitals with 2015 revenue of more than $37 million.

The Desco project has hired Stock and Associates to handle the design work, DG2 Design to manage the landscaping architecture, and Remiger Design to provide additional architectural work on the roll-out.

The Desco Group has been responsible for other development projects around downtown St. Louis, including the development of University Commons in St. Charles, and the Old Post Office in downtown St. Louis.

With higher St Louis property values come higher taxes

With higher St. Louis property values come higher taxes

ST. LOUIS, MO/May 18, 2017 (STLRealEstate.News) Property values are going up in St. Louis County, and so are the property taxes.  What’s been an incredible last 2-years for the St. Louis real estate market has translated into higher valued properties – and residents aren’t happy about it.  It’s been almost 10-years since many of the reassessed saw any kind of hike in their property value.  Opening the letters this week with increased property value information spelled out one clear thing for residents: higher property taxes.

City Assessor Fred Dunlap said St. Louis is simply responding to the real estate market today.  Close to 55,000 parcels of residential and commercial real estate in the city saw an average increase in value of seven to nine percent since the last assessment took place in 2015.  Land reassessments take place on every consecutive odd year.  “Of those 55,000, we had 17,000 that increased by 15 percent or more,” said Dunlap.  Naturally, residents that fell into the big increase category weren’t too thrilled with the result.

Dunlap went on to state that although statewide assessments are done on odd years, the values of the market following the Great Recession result in no property value increases until now.  Used to no changes from 2008 until 2017, a lot of citizens are trying to calm down and max sense of it all.

Of course, with rising property values come rising taxes.  Last year, city property owners paid $350 million in taxes.  This year that’s expected to reach $371 million if assessments are approved.  “We don’t establish the tax rate. We combine tax rates,” Dunlap continued.  “Then we get the certified rates we receive from the taxing authorities and send it to the auditor.  Once we get things back from the auditor, we establish the tax rate.”

Dunlap is hoping more St. Louis residents will do some research to understand the assessment letters they got this week.

St Louis residents aren’t happy about rising property taxes

St Louis residents aren’t happy about rising property taxes

ST. LOUIS, MO/May 18, 2017 (STLRealEstate.News) The red hot St. Louis real estate market could very well mean a higher property tax bill for many residents in the greater metropolis today.  St. Louis County Assessor Jake Zimmerman stated that most people will see a significant increase this time around.  The last time the reassessments were done, in the wake of the Great Recession, there was no increase to residents.  This shift is already creating controversy and unhappiness in worried residents today.

“Two years ago we saw that homes in really nice parts of town were going up in value and the rest of St. Louis County, not so much.  This year, the rising tide seems to be lifting all of the boats,” said immerman.  He went on to state that it’s about a 7 percent increase across the board.  Residents are wondering how they come up with these numbers.

Zimmerman responded, “It’s data driven, but we have personally inspected 75,000 properties just in the space of the last couple of months.”

Some St. Louis residents have certain opinions on who should be subject to these increased assessments.  Sarah Heine of Kirkwood, the former head of the group that pushed for property tax relief ten years ago, stated that there ought to be a property tax cap for anyone over the age of 65.  “I feel at some point I should not be in a position to have to move out of the community I helped to support for all those years, and be able to live in my home and enjoy the community I helped create,” she said.

She went to claim that it might be time to consider taxing homes when they are sold, not when they are being lived in.  Heine’s group, the St. Louis County Citizens for Property Tax Relief, is presently looking for new leadership to carry on the crusade.

Higher ground Miami real estate eyed as sea levels rise

Higher ground Miami real estate eyed as sea levels rise

May 18, 2017 (STLRealEstate.News) Climate change and the overall warming of the planet may start to affect real estate trends in major American coastal cities today.  One notable tropical city, Miami, is already witnessing the effects and the new desire to purchase “higher grounded” property that is guaranteed to be protected longer than the sea level – or below sea level – property.  As the Scientific American put it this week: climate change may now be part of the gentrification story in Miami real estate.

Broadway Harewood, a real estate investor in Miami, recalled a time when he first learned about the possibility of rising sea levels in Miami and what it would do to real estate.  He states that with the rising sea levels, it’s bringing expensive investors to more historically black neighborhoods.  With them come higher property values, prices that black families are not going to be able to afford.

“Oh, Miami Beach is going under, the sea level is coming up,” Harewood said.  “So now the rich people have to find a place to live.  My property is 15 feet above sea level, theirs is what?  Three under?” Elaborating further, Harewood said that developers are now planning to knock down the projects and push out the black families so rich families can set up shop in an area that is safer – and drier.  “If there’s anything more complicated than the worldwide sea-level rise, it might be the forces of real estate speculation and the race-based historical housing patterns that color present-day gentrification in Miami.”

Harewood went on to state that one of the great ironies of the problem in Miami today is that from decades under Jim Crow law, laws forced black families to move into the interiors of cities.  Today, that very Miami interior is starting to be more desirable to the individuals who once pushed the black families away.  Gentrification is in full swing, and it’s being exacerbated by the global climate change trends today.

Typical home costs in every American state

Typical home costs in every American state

May 17, 2017 (STLRealEstate.News) Though we’re not going to review every single average home cost in all 50 states here, we are going to look at the variation over the most populous states with smaller state comparisons.  There is a lot of variation and many unexpected surprises in the ever-tumultuous U.S. housing market.  Due in large part to the subprime mortgage crisis that lasted from 2007 to 2010, the U.S. housing market has undergone unprecedented change over the last 10-years.  When the housing market bubble burst, the national median home sale price dipped by more than 31%, from $219,000 in 2006 to $150,500 in 2011.  Even though there have been considerable improvements since the housing catastrophe, housing prices across the U.S. remain slightly lower than they were a decade ago.

It’s worth noting that every state’s housing market is unique.  Differences in demand, the age, as well as the condition of the available homes, and the quality of schools and other social attractions nearby have variable effects on the final home asking price.  To come to the median home price conclusions, 24/7 Wall St. reviewed 2016 median sales prices to identify the cost of a come in every state.  According to the data provided by ATTOM Data Solutions, Hawaii came out on stop, with the media sale price of $485,000.  And the state with the cheapest home values? West Virginia came in with a media home sale price of $122,550.

Clearly, the recovery from the subprime mortgage crisis has not happened evenly throughout the country.  While homes in states like West Virginia are far below their averages before the recession, homes in Hawaii are far above.  What explains this variation?  In most places, it can all be explained by trendy demand.

Other states in the cheap median bracket include Ohio, Oklahoma, and Michigan with a $134,000 asking price.  Higher median prices fall in New Jersey, Alaska, Utah, and Colorado with a $300,000 median price.

Katy Industries files for bankruptcy

Katy Industries files for bankruptcy

May 17, 2017 (STLRealEstate.News) Katy Industries is already planning to sell the majority of its assets to a new investment vehicle co-owned by Highview Capital LLC and Victory Park Capital Advisors today.  A company that manufacturers and distributes commercial cleaning and storage products, based out of Maryland Heights, Katy Industries officially filed for bankruptcy this past week.  On Sunday, the company announced it had entered into an agreement to sell all of its assets to the Highview/Victory entity for both cash and credit at the end of the sale.  In order to facilitate the sale, Katy Industries said it had already filed for Chapter 11 reorganization in Delaware bankruptcy court.

Katy Industries went on to state that the new agreement they struck with Highview Capital and Victory Park would lay the foundation for a long-term financial stability plan that will provide the failing company with the resources and cash flow it needs to sustain its remaining operations.  Additionally, Katy is going to allow other companies to bid for the assets being sold as well.  The company experts the court-supervised sale process to be completed within the next 60 to 90 days.  In the court papers obtained by the St. Louis Business Journal, it showed that Katy listed assets of $821,321 and debts of $58.4 million. Local creditors included are Koller Craft Plastics, with an unsecured claim of $202,639.

The statement went on to claim: “Our goal is to put the company on the proper financing footing, de-lever our balance sheet and use the influx f new funding to recover the business and position our operations for future growth while, at the same time, providing a mechanism to address the liquidity constraints and legacy liabilities that have impacted our ability to operate efficiently and effectively,” said Robert Guerra, president and CEO of Katy Industries. “By utilizing Chapter 11, we are able to ensure an expedited and orderly sale transaction.”

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Published at 5:16 a.m. CST

The new normal: staying put

The new normal: staying put - STLRealEstate.News

May 17, 2017 (STLRealEstate.News) Staying Put – The ebb and flow of real estate norms and what’s expected in a given time-frame is constantly changing.  Sometimes, homeowners are eager to sell their home and upgrade in a house far away.  Other times, the urge to move isn’t so high.  It’s dependent upon real estate trends and financial circumstances at the time of the evaluation.  Today, rising interest rates are encouraging homeowners to renovate their homes instead of moving to a bigger place.

Homeowners are moving less, creating a drag on the economy, fewer commissions for real estate brokers and a brutally competitive market for the first-time home shoppers who are not able to land a house of their dreams in a price range they can actually afford today.  For most today, reported the New York Times, the desire to stay put began out of caution or necessity.  After the Great Recession, millions of homeowners lost out on their businesses and were forced to go into damage control.  Thinking about upgrading houses and moving was definitely not at the top of the list.

Even though the economy today has improved with unemployment below 5 percent and home prices are steadily climbing, homeowners with historically low mortgage rates do not want to take on the new interest rates that will come with new home mortgages.  Most Americans refinanced when mortgage rates were incomparably low.  Grabbing one today just wouldn’t compare.

Data shows that the median length of time people have owned their homes rose to 8.7 years in 2016, which is more than double what it had been 10-years prior.  Now that interest rates are being risen by the Fed, the housing market may face a problem called the lock-in effect: homeowners are reluctant to move, since moving entails taking out a mortgage at a much higher rate than what they have today.