Crains New York - February 18, 2013 - (Page 15)

R E A L E S TAT E REPORT INSIDE The List CoStar’s top NY office leases PAGE 15 ‘There’s a lot of money chasing real estate’ —Michael Sherman, senior vice president, CBRE, Page 14 Illegal solution for more housing? Quest for additional affordable units tests limit of rules on size, light and location BY NICK MORONI Reason to modify zoning “They’re really one of the last [affordable housing] options out there,” said Seema Agnani, executive director of Jackson Heights, Queens-based Chhaya, which focuses on immigrant and affordablehousing issues in the city. In fact, facing similar shortages of affordable housing, several other cities, including Santa Cruz, Calif., and Orlando, Fla., in recent years have moved to modify their building, housing and zoning codes to legalize a greater number of such dwellings. A number of states have See ILLEGAL on Page 19 LET’S MAKE A DEAL: Peter D’Arcy’s M&T Bank has been particularly active in the real estate market. Lenders loosening up Stronger economy and property market, low interest rates lift the sector’s appeal BY STEPHEN KLEEGE Two successful financings last month set the stage for what is looking like a significantly healthier real estate lending market this year. In the larger of the two, a heavy- weight global group including HSBC Bank, Bank of New York Mellon, TD Bank, Bank of Nova Scotia and Wells Fargo Bank is providing a five-year, $340 million construction loan to Brookfield Office Properties Inc. The big Canadian developer will use the funds to build a platform over the train tracks at its planned Hudson Yards development just west of Penn Station— a three-building project for which it has yet to line up a single tenant. In the other loan, Deutsche Bank Group’s PB Capital emerged from a pack of competitors with the winning LOWER LEVERAGE Property loan-to-value ratios Prerecession 80% to 90% Market bottom 55% Now 65% to 70% larry ford An apartment in the basement of a two-story building in Astoria, Queens, is rented by a Bangladeshi immigrant who works at Madison Square Garden. The unit includes a small living room, a bathroom and a kitchen. The space is heated, has windows and has exits at both ends. At $900 a month, it’s a pretty good deal. It’s also illegal. Even the building’s owner, who declined to be named, concedes that because the property sits on a slope, more than half of it is “below grade,” which technically makes it a cellar and thus unlawful to rent out. Known in housing circles as accessory dwelling units, such basement units are drawing increasing attention from a range of groups Scott Stringer eager to expand the supply of low-cost apartments in the city in an effort to accommodate young workers just starting out, as well as immigrants. Chhaya Community Development Corp.estimates there are more than 100,000 illegal ADUs citywide, many of them in outerborough neighborhoods with large immigrant populations. proposal to finance the $45 million conversion of the upper floors of a former Verizon building on West 50th Street into luxury condominiums—a slice of the residential market that has struggled to attract financing until recently. Both are evidence of lenders loosening their purse strings in the face of mounting evidence of an economic recovery at home, demand for dollardenominated investments as the European economy slumps and rockbottom interest rates that heighten See LENDERS on Page 19 February 18, 2013 | Crain’s New York Business | 15

Table of Contents for the Digital Edition of Crains New York - February 18, 2013

DIGITAL NY
IN THE BOROUGHS
IN THE MARKETS
the insider
BUSINESS PEOPLE
OPINION
GREG DAVID
SMALL BUSINESS
REPORT: REAL ESTATE
THE LIST
CLASSIFIEDS
FOR THE RECORD
NEW YORK, NEW YORK
SOURCE SNACK
OUT AND ABOUT
SNAPS

Crains New York - February 18, 2013