Matrix Blog

Commercial, Retail

[In The Media] Real Estate Weekly Profile Of Jonathan Miller (The I Don’t Know Edition)

September 1, 2007 | 11:59 am | Public |

Last week, a profile article was published in Real Estate Weekly about me. I was surprised at the bold headline: Jonathan Miller: The man who knows but hey, I’ll take it, even though I don’t know how I got into this business. But I did win my NCAA basketball pool last spring so I must know something.

A special thanks to the writer Maggie Hawryluk for getting the story right.

John Cicero, MAI my partner in our commercial valuation firm Miller Cicero, LLC teased me about providing details about my personal interests in the piece but failing to mention our firm. Well I believe I did mention it in the interview, but I suppose the editors thought lobster fishing was more interesting than commercial valuation. Just kidding.

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New York City Income Property Market Report Released

May 18, 2007 | 9:27 am |

The Massey Knakal New York City Income Property Market Report [pdf] was just released for the second half of 2006. This report, which we prepare on behalf of the brokerage firm Massey Knakal, examines cap rates, gross income multipliers, median price per square foot and number of sales for multi-family and mixed-use buildings in five New York City submarkets: Manhattan, Northern Manhattan, the Bronx, Queens and Brooklyn.

Overall, values and rates held steady throughout the City, though the number of sales dropped sharply.

Massey Knakal New York City Income Property Market Report 2H 06 [pdf]

Report Methodology [Miller Cicero]

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Miller Cicero’s New York City Income Property Market Report Second Half 2006 Is Released

May 17, 2007 | 7:04 pm |

Our commercial advisory firm just released its New York City Income Property Market Report for the second half 2006. My commercial valuation partner John Cicero put the report together. Its the only one of its kind available.

Here’s an excerpt:

The second half of 2006 saw a sharp drop in the number of income property sales, down 22% from the first half of the year. The greatest decline was in Manhattan (south of 96th Street), where the number of sales declined 44%. Northern Manhattan, Brooklyn, Queens and the Bronx each saw the number of sales decline from 17% to 21%. Though the drop in the number of sales was significant, the sales activity for all of 2006 was nonetheless 34% higher than in 2005, with 4,234 sales versus 3,148 sales, respectively. The market- wide turnover rate was 1.5% in the second half of 2006 (down from 1.9% the prior half) a total turnover rate of 3.4% for the year. This is in contrast to the second half 2005 turnover rate of 1.3%, and a total 2005 turnover of 2.5%…

Massey Knakal will distribute over 300,000 hard copies of the report over the next few months.

Massey Knakal New York City Income Property Market Report [pdf]

Report Methodology [Miller Cicero]

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Radar Love = Radar Logic Research

April 24, 2007 | 10:06 am | | Public |

Radar Logic Incorporated and my appraisal and consulting firm Miller Samuel Inc. have entered into a joint venture named Radar Logic Research, LLC.

Radar Logic Research Press Release [pdf]
Radar Logic White Paper Here’s more technical information.

Radar Logic Incorporated, through its partner Ventana Systems, Inc. a mathematics consulting and software firm, have leveraged methodologies commonly used in the sciences, and applied it to real estate. The objective was to make sense of the national residential housing market by creating a daily housing “spot” price to be used in the trading of real estate derivatives.

The Radar Logic Daily Index is a single, statistically accurate value representing the price per square foot paid in a defined metropolitan area on any given day. Data is gathered from public source records and then translated by our proprietary algorithms into an accurate reflection of the values paid in actual arms-length real estate transactions.

First, a little history…

The name Radar Logic references modern radar, and its ability to illuminate order out of chaos.

When I met with the CEO Michael Feder not too long ago and began to grasp what he and his team had accomplished, a light bulb went on in my head (despite the usual foggy conditions) and I wanted to be a part of this effort immediately. (more on that below) The Radar Logic approach solved the glaring problems found in national market statistics, such as moving averages and omission of data types. Up until now, this has prevented the financial markets from efficiently using residential real estate as a basis of trading instruments such as derivatives in a manner similar to the futures and options contracts available in more traditional commodities.

A derivative is a financial instrument used to trade or manage the asset upon which the instrument is based. It “derives” its value from something else (another asset or instrument). Derivatives are most often used to manage risk or to take positions on future market directions. Derivatives exist for a wide range of assets, such as commodities (gold, oil, corn), stocks and bonds, and on indices, such as the Dow Jones Index®. Until now, there have been few derivatives markets for residential real estate. Radar Logic Incorporated was founded for the purpose of enabling financial derivatives based on real estate.

The residential housing market is the largest asset class in the United States. To provide some perspective, the Federal Reserve indicates that the US housing market represents about $21 trillion in value. Commercial real estate, while a large asset class, is only about 20% of that amount. Yet because the residential real estate market is made up of 124 million units worth an average of around $240,000, it is fragmented and difficult to measure.

In addition, residential real estate as an asset class, is constantly changing. It is characterized by seasonality, new development, the surge of condos in metro areas and now, the rise in foreclosures. Its always changing. The Radar Logic methodology considers all verifiable transactions in a market to arrive at a value for the day that is not a moving average.

Its really exciting, and its groundbreaking stuff, to say the least. The beauty of this approach, is that there are no hidden filters, assumptions or calculations. In other words, the market is the market.

In addition to my duties at Miller Samuel and Miller Cicero, I have become Chairman of Radar Logic Research, LLC as well as Director of Research for Radar Logic Incorporated. I am still going to be active in the operation of Miller Samuel and produce the New York area market report series for Prudential Douglas Elliman that I created and have authored since 1994, with more markets to be added. Trust me, I have simply invented more time in a day. (More on that at another time, when there is more time in the day.)

Radar Logic Research will develop and publish research products providing market commentary and analysis related to real estate values across the United States later this year for institutions as well as enterprise-specific consulting services to real estate and financial organizations, including builders, developers, brokerages, commercial lenders, REITs, and investors such as pension funds, hedge funds and insurance companies. The initial plan is to offer these services to cover 25 major metro areas, roughly 2/3 of the value of the US housing market.

More on this to come!

Ok, back to work.

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The Converted

April 5, 2007 | 9:42 am | |

Lisa Chamberlain wrote a particularly good article yesterday in the New York Times’ Square Feet column called Condo Conversions Switch Gears to Go Commercial. The story has applications to most metro markets, not just New York.

A few years ago in New York, a common quip was “sooner or later every building is going to be a condo.”

And it seemed like it. Famous hotels, rental buildings, not so famous hotels, office buildings, affordable and middle class housing projects, old lofts and government buildings found a potential new use: luxury condos.

But building permits reached 27,000 and a residential condo glut was forecast. However, the widely cited permit figure is the combination of many forms of housing such as rental and hotel, not withstanding, many of these deals never get done. Still its a big number and no one (self included) maintains a publicized list of what is coming online.

With herd mentality firmly in control two years ago, everyone was talking about how bad the glut was in Miami and that New York was next. Sellers looking to cash out, threw their apartments on the market to see what they could get. Buyers became renters or could not get deep discounts in their negotiations.

The slow down in demand caused the residential apartment inventory to nearly double from 2004 to 2006.

Then a funny thing happened in New York last year, that didn’t seem to happen in the same scale as in markets like Washington DC, San Diego, Miami, Las Vegas, Pheonix and others. Developers of new conversions adapted to new uses in mid-renovation from condo to hotel, extended stay, offices and rentals. Our commercial advisory firm Miller Cicero began to see the tide turn in development sites and condo was not always the obvious choice anymore. Developers were seeing the market and were able to adapt.

Still, the number of condo units coming online remains a concern. The law of supply and demand seems to be working here so far, but why?

It’s the economy.

The office market has exploded in New York. For example, I fought for a 10 year deal with my office lease when vacancies were high and rents were depressed. My broker tells me the market rate on my office rent is up about 75% in 3 years since I signed the deal. In the past two years tourism has continued to rise causing virtually 100% occupancy during holidays and conventions, drawing concerns from the city government of damaging tourism. Rising employment has created demand for office space, and kept the demand up for housing while the weak dollar has kept tourism at record levels.

And most importantly, individual speculators (aka flippers) never became a force here so residential development was not based on musical chairs (aka proverbial ponzi schemes).

Everyone seems to be scratching their heads these days, wondering why the demand for owner occupied housing is rising right now, in contrast to the national market.

Yet the core footing of the real estate market, in fact, seems to be real. I think that buyers in this market, as evidenced by the record jump in activity in the first quarter, have been converted.


Real Deal Totals Lincoln Center

March 26, 2007 | 12:05 am | | Public |

90. entire panel laughing

Well, Real Deal magazine sold out their “Science of Real Estate” New Development Forum at Lincoln Center last week. It was an event! Over 3,000 tickets were sold.

Some thoughts…

  • It was the first real estate event in the history of Lincoln Center.
  • It was the first sellout event in 2007 for Avery Fisher Hall at Lincoln Center.
  • Amir and Stuart proved once again, that they are truly unable to think small.
  • Additional confirmation that the backstage green room, is never green.
  • Amazed that Fritz was able to crash the green room.
  • Glad that Cathy H picked Real Deal red.
  • The constant and very loud church bells that ring behind the black curtain.
  • The spotlights were so bright, I now know how a deer feels.
  • Steve Cuozzo was our fearless conductor.
  • Admiring developers Kent Swig and Steven Ross’ incredible knowlege and the lion’s share of questions.
  • New understanding for the looming 421a tax abatement expiration.
  • Memories of bursting with answers and comments, but couldn’t figure out how to get a word in.
  • Appreciated Amanda Burden’s stance in not apologizing for critics accusations of micromanagement.
  • Wished Professor Shiller would not be so apologetic for his contrarian views on housing. He’s a smart man and has a lifetime of work to show for it.
  • Kudos to Pam Liebman of Corcoran and Bob Knakal of Massey Knakal for asking the first questions of the panel, achieving a strong pr play without being on stage.
  • Relieved that so many other people aside from myself have real estate centric existences.
  • Glad to get that free chocolate bar in the Real Deal goodie bag.
  • Sure that The Real Deal has been around longer than 4 years.

86. Miller Cuozzo 5. Shiller and Burden 68. Pre-event over shot room filled

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Massey Knakal New York City Income Property Market Report is released

November 6, 2006 | 12:01 am |

My commercial appraisal partner John Cicero of Miller Cicero has been busy lately. He just completed a new market report on New York City income properties. We are really excited about the results. Here’s what he has to say about it:

This week the first Massey Knakal New York City Income Property Market Report [pdf] was released. This is a first of its kind study that I researched and authored on behalf of Massey Knakal, one of the most active investment sales brokerage firms in New York.

Massey Knakal is excited about it too. They are distributing about 300,000 copies of it over the next several months.

Massey Knakal New York City Income Property Market Report [pdf]

Report Methodology [Miller Cicero]

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[Commercial Grade] Massey Knakal Income Property Market Report, prepared by Miller Cicero, LLC, released

November 6, 2006 | 12:01 am | Public |

Commercial Grade is a post by John Cicero, MAI who provides commentary on issues affecting real estate appraisers, with specific focus on commercial valuation. John just created and completed a new study analyzing the income property investment market in New York City in a way thats never been done before. Its a very exciting new tool for investors.

Disclosure: John is a partner of mine in our commercial real estate valuation concern Miller Cicero, LLC and he is, on Mondays, one of the smartest guys I know. …Jonathan Miller

This week the first Massey Knakal New York City Income Property Market Report [pdf] was released. This is a first of its kind study that I researched and authored on behalf of Massey Knakal, one of the most active investment sales brokerage firms in New York.

Appraisers are, by nature, data hounds, and this study culls data from a variety of sources: Massey Knakal’s sales transactions, Miller Cicero’s own database, and all publicly recorded transactions as reported by Property Shark. And while there were no real surprises in the results (values continued to increase in the first half of 2006 across property types and in all of the submarkets tracked), the trend lines are truly fascinating (or at least I think so).

This will be an ongoing study, to be released every six months. My hope is that it will be another tool for all to better understand the nuances of New York’s complex income property investment market.

Massey Knakal New York City Income Property Market Report [pdf]
Report Methodology [Miller Cicero]

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Outstanding On Our Soapbox This Week: Schmoozin’

September 7, 2006 | 11:19 am |

On our other blog, Soapbox, in this week’s Commercial Grade post [Schmoozin’]( 241), appraiser John Cicero, of Miller Cicero, LLC, talks about the fine line between illegal kickbacks and schmoozin’.

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NYC Subway Marathon: Saving A Seat, Setting A Record

August 23, 2006 | 12:01 am | | Public |

Amy Zimmer wrote about the latest attempt to break the record for riding the entire New York City subway system continuously [Metro].

The 25 hours, 11 minute record was sent in 1998 [Time for Kids] by Michael Falsetta and his friend Salvatore Babones. Michael is a senior executive at our commercial firm, Miller Cicero, LLC.

Falsetta, an executive at a real estate firm, remembers drinking just one liter of water and eating three Power Bars. Babones, a sociology professor at the University of Pittsburgh, said, “We took 10 minutes off and missed a transfer at Jamaica station so that we could use the restrooms there.”

Babones doubted their record would be broken, but his partner said they “would come out of retirement and issue a challenge” if their record fell.

I love the convenience of the NYC subway system – I use it nearly every business day. However, I don’t know if I love it enough to ride for 24 hours straight.

Two Adventurers, One Subway System, and a Challenge to Break a Riding Record [NYT]
Two Commuters Try To Break Record For Traveling Entire Subway [NY1]

The Rise and Fall of the Amateur New York Subway Riding Committee [Gricer]
Subway Challenge on MySpace
Buddies go after subway riding mark [Newsday]
Subway Record Attempt [Fox5]

Straphangers Break Record For Fastest Subway System Record [NY1]

If the mass transit thing doesn’t work out, these guys are destined to be in public relations. They got a lot of coverage.

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Outstanding On Our Soapbox This Week: Appraisers: Analyze This

April 6, 2006 | 12:01 am |

On our other blog, Soapbox, in this week’s Commercial Grade post [Analyze This]( 176), appraiser John Cicero, of Miller Cicero, LLC, still smarting from not being in the movie with DeNiro, talks about how the role of appraisers has shifted as data has been more accessible to the public.

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Outstanding On Our Soapbox This Week: [Commercial Grade] The Appraiser Brain Drain

March 9, 2006 | 9:17 am |

In this week’s Commercial Grade weekly post on our other blog, Soapbox, Appraiser Brain Drain, appraiser John Cicero, of Miller Cicero, LLC, talks about the brain drain of appraiser talent the current licensing law and lender-appraiser client structure has created.

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