Google's Christmas Present to NYC? A $2 Billion Building

        One of the virtual world's most prominent companies has finalized a deal today to purchase a Chelsea office building for $1.9B. The company, whose unofficial motto is 'Don't be evil', has sparked some life back into the commercial real estate sector of the city. Their new space at 111 Eighth Avenue is rumored to be the city's fourth-largest office building with 2.9 million square feet, the Times reports. Taxes on the purchase will bring New York State a much needed $7.08 million, and New York City a huge $46,462,500, helping to fill some very empty coffers. 

        Google, which also has offices and land in New Jersey, is expected to expand its city workforce dramatically in the years to come, as it will now have the ability to fill in the additional 2.5 million feet as other large leases at 111 Eighth Ave. expire. Sale of the building should be finalized by the end of the year, which means that, come 2011, anyone using Yahoo in the building will be up for eviction! (jk, jk)

Pres. Obama Signs $858 Billion Tax Cut to Revive Economy, Add Jobs

(Via Bloomberg) President Obama signed into law an $858 billion bill extending Bush-era tax cuts to boost a fragile economy and add jobs. “Putting more money in the pockets of families most likely to spend it, helping businesses to grow, that’s how we’re going to spark demand, spur hiring and strengthen our economy in the new year,” Obama said at a signing ceremony in Washington.

The President had to overcome significant resistance among both Democrats and Republicans who were opposed to the bill. He signed the measure after meeting privately with about a dozen labor leaders, including AFL-CIO President Richard Trumka. Organized labor leaders opposed the tax-cut deal. “Candidly speaking, there are some elements of this legislation that I don’t like,” Obama said. “That’s the nature of compromise.”

I’ve summarized below what you need to know about the bill and how it applies to you:

·         The tax-plan expands aid to the long-term unemployed for 13 months and reduces payroll taxes for workers by two percentage points during 2011

·         Many economists and law-makers warned that failure to pass the bill would “possibly send us back into a double-dip recession”  [Repub. Rep Eric Cantor, VA]

·         Gus Faucher, director of macroeconomics at Moody’s Analytics, predicts that because of the bill unemployment will be lower in 2011, averaging 8.7 percent versus 9.8 percent (its most recent record in November of this year)

·         Under the plan, the estate tax next year would have a top rate of 35 percent to be applied after an exemption of $5 million per person

·         The plan extends all Bush-era tax rates through 2012, guaranteeing a fight over taxes during that year’s presidential campaign.

 --Raj Persaud

WikiLeaks' Julian Assange's Next Target? Corporate America

One of America's most hated and controversial figures, Julian Assange, told Forbes last week that his expose on the Pentagon and the US Government are only the tip of the iceberg. According to Assange, next year a major American bank will confront a crisis as it finds itself with tens of thousands of leaked exposed documents and communications among executives. Forbes reports, "The data dump will lay bare the finance firm’s secrets on the Web for every customer, every competitor, every regulator to examine and pass judgment on." Assange won't let up on anymore details such as where and when, or give any more hints on who the major financial firm in question is. But one thing's for sure-- he's planning to follow through, as he has on every other major project under Wikileaks' wings.

In his interview, Assange declares the work he's accomplished so far as just the beginning of a series of long-overdue exposes or "mega-leaks" as he decidedly calls them. Over the last year, his "information insurgency" has included 76,000 secret Afghan war documents and another trove of 392,000 files from the Iraq war, many of which documented data explosions. Their release created one of the largest classified military security breaches in history and has roused antiwar activists while enraging the Pentagon.

But what is the value of Assange's work? And is it the beginning of a movement we should fear or embrace? Admire him or revile him, Assange has been referred to as "the prophet of a coming age of involuntary transparency". His expose on misconduct in the world's largest and most reputable military has given him significant respect, if not bargaining power. Now, with the same philosophy, he's taking aim at corporate America. He claims to have unpublished, damaging documents on everything ranging from top pharmaceutical companies to Wall Street's biggest financial firms. On energy, he says that he possesses everything from BP to an Albanian oil firm that he says attempted to sabotage its competitors’ wells. 

What is the driving force behind his work? Being a visionary of free-speech. He prefers to think of himself as an "entrepreneur". "Leaks merely lubricate the free market," he says. Markets rely on pure information. He cites the example of the Chinese Sanlu Group, whose milk powder contained toxic melamine in 2008. While poisoning its customers, Sanlu also gained an advantage over competitors and might have forced more of them to taint their products, too, or go bankrupt—if Sanlu hadn’t been exposed in the Chinese press. “In the struggle between open and honest companies and dishonest and closed companies, we’re creating a tremendous reputational tax on the unethical companies,” he says.

But, of course, Assange isn't being entirely fair.  He alone decides which targets to choose, what documents to leak, and the theatrical fashion of their penality—all with zero personal accountability.

Powerful? Just? Frightening? The world can only wait and watch.

--Raj Persaud
[Forbes, Andy Greenberg]

The transformation is complete

A.C. Lawrence has finally taken over Century 21 NY Metro, and closed its office at 60 Madison Avenue and move to 228 East 45^th Street (where Century 21 NY Metro moved to in March).  Former Century 21 managers will continue on the A.C. Lawrence team except for Marc Windheuser, who has returned to Prudential Douglas Elliman. Furthermore, other Century 21 agents are "free to decide" whether they want to join A.C. Lawrence, which has around 35 agents, but A.C. Lawrence is launching an "aggressive recruitment campaign," however.

Charlotte Kullen said, “A.C. Lawrence did not technically absorb Century 21 NY Metro; rather, Century 21 NY Metro, the entity, was closed, leaving AC Lawrence free to take over its space and taking on many of its personnel.”

Real estate is still scary

Courtesy of Google Images

Even though the United States economy is starting to come out of the recession, the people are still filled with a fear of buying a home in the current market.  Some of the people are afraid about how they are going to making the payments from their salary, while others are waiting to see if the prices will fall even more.  “It's perfectly natural that they should feel that way in the wake of the housing bust,” said Lawrence Yun, the chief economist for the National Association of Realtors. "It's like when the stock market is crashing," he said. "People are waiting to see if deals will get better." Moreover, home sales are down about 25% since last year. 

If fear continues to plague the people of the United States, it will create a self-fulfilling downward spiral in the housing market.  If people continue to sit on the sidelines, and wait for the prices to fall even more the supply of houses will continue to increase and the prices will continue to drop.  Investment in real estate will certainly help the United States out of the recession.  

New plans with Fannie and Freddie

Courtesy of Google Images

According to the Wall Street Journal, the United States government is working with Fannie Mae and Freddie Mac to reduce the mortgage balances for the borrowers whose homes are worth less than they borrowed.  However, Fannie Mae and Freddie Mac are highly reluctant to go through with this plan especially with the borrowers who are still making mortgage payments.  Furthermore, the government also wants both companies to join another program run by the Federal Housing Administration (FHA) to further assist struggling borrowers

During the housing bubble, property values were sharply increasing, and so the owners were able to borrow additional money against their homes.  But, after the bubble burst, the borrowers found themselves in debt, and living in a home that was worth a lot less than the money they owed.  This is why the government would like to restructure the debts, and assist the homeowners who already have not lost their homes to foreclosure. 

America's 5 Slowest Real-Estate Markets OR Where NOT to Invest in the Next Few Years

There's no doubt that the great real estate bust of 2008 has left a dent on the way America does business. Today, however, the housing market is not entirely in shambles. Economists across the country have reported steady increases in market activity. Here at Manhattist, where we specialize in foreign investment in real estate, we've been working with scores of new international clients, most of whom have taken interest in New York property after the market seemed to have bottomed out. On the heels of my last blog-post about compelling reasons why you should invest in real-estate, I'll present to you today a few regions across the nation you should watch out for. It's important to keep updated on market trends and the rise and fall of prices. According to Moody's Analytics, these areas are the slowest appreciating markets in the nation. The projections are based on the relative growth in income, employment and population over the next decade.

1. Virginia Beach, VA:  With its low crime rate, strong school system and famous shoreline, it's no wonder U.S. News in 2009 named Virginia Beach one of the best places to grow up. The area may be a less enticing place for investors or new home-owners, however. According to Moody's Analytics, real estate values in Virginia Beach will increase an average of 1.1 percent a year from 2010 to 2020, significantly below the national average. Why? Blame the wonders of economics. Though home prices in the area were popular during the housing boom, the market didn't actually experience a subsequent crash.Since prices didn't plummet, the market won't get the rebound that harder-hit areas will experience in about 10 years.

2. Miami, FL: During the housing boom, sunny Florida became a destination for the masses. Easy credit and competing investor demands led to housing prices doubling between 2002 to 2006. But Miami, where the majority of activity occurred, took one of the biggest blows of the crisis, causing homes to drop to even about 48% of their peak values. The problem? The market there shows no sign of bottoming out until about 2012, so recovery must wait until after then. Even if the area does rebound, economists project a  slow 1.1 percent growth in appreciation values from 2010 to 2020, again, well below the national average.

3. Nashville, TN: During the housing boom in the earlier part of the decade, Nashville's rate of appreciation was comparatively slower than its peer cities. While this means that it's decline won't be terribly deep or dramatic, it also means that its rebound won't be either. Its 10 year annualized growth rate is projected to be 1.2 percent according to Moody Analytics.

4. Austin, TX: Austin suffers from the same fate as Nashville. Because its home-prices didn't surge during the boom, it will ride the bust but will be unable to appreciate strongly. Real estate values are expected to increase about 1.3 percent per year.

5. San Antonio, TX: Like the other southern cities on this list, San Antonio did not suffer too great of a price increase or price bust, which means that there's not much momentum for a rebound. It is expected to appreciate about 1.4 percent per year.

The projected national average growth is expected to be 3.1 percent annually.

--Raj Persaud

[Moody's Analytics, Chicago Tribune]

Bad news for slumlords

New York City Council member James Vacca sponsored the Bad Actors Bill to crack down on slumlords.  This new piece of legislation will require developers and landowners to have their permits reexamined to make sure they do not owe more than $25,000 in fines, taxes, or fees to the city.  The slumlords must pay these fines or at least establish a payment plan with the city before they can start building again.  The New York City Building Congress is against the bill because they believe it will destroy job opportunities in the midst of the economic recovery.  Moreover, the NYBC believes there are other ways to accomplish these tasks that will have less of an impact on the economy.

Courtesy of Google Images

This is definitely a critical time for the economy, and it important of understand how the developers will react before moving forward with the bill.  It is not worth risking the recovery to crack down the slumlords who have not paid their taxes on time.  

Federal grant for clean energy

Commercial property owners are racing to install solar panels on warehouses, and even excess land because there is a strong monetary incentive for going green.  The installers will receive a 30 percent tax credit check within thirty days of the project’s completion.  The Treasury grant program initiated in February 2009 as part the American Recovery and Reinvestment Act is due to expire on December 31, 2010. According to the New York Times, “An owner installing a typical 500-kilowatt photovoltaic system on a 100,000-square-foot rooftop at a cost of about $2.2 million would receive $660,000. Depending on how the building is used, that 500-kilowatt system could generate all the building’s power or, for high-demand uses like data centers or refrigeration, as little as 2 percent.”

Courtesy of Google Images

The purchase of the solar panels is no small expense, but the local, state, and federal incentives are causing a drastic increase in the amount of installations.  The benefits are not only saving the planet from the negative externalities, but are helping stimulate economy by increasing investment in the solar power industry.  Finally, the owners of the solar panels estimate a 100 percent return with four to five years of the installations.