FARE Act Comes Into Play, Related Making Hudson Yards Moves


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Key Real Estate Developments in New York City

This article reports on several significant real estate events in New York City. A key focus is the implementation of the Fairness in Apartment Rental Expenses Act (FARE Act), which bans forced broker fees and has led to a significant drop in rental listings on StreetEasy.

FARE Act Impact

  • A judge denied a request to halt the FARE Act, leading to its implementation.
  • Over 1,000 rental listings were removed from StreetEasy shortly after the act's passage.
  • The Real Estate Board of New York (REBNY) appealed the decision to prevent the law's enforcement.

Related Companies' Activities

  • The City Council approved changes to the Hudson Yards rezoning, allowing for up to 4,000 housing units, an office building, a hotel, and a park.
  • Related is exploring the sale of a portion of 35 Hudson Yards, potentially for $600 million.

Other Notable Transactions

  • Edmond M. Safra's AVRS Partners is backing two office-to-residential conversion projects.
  • RXR signed a contract to acquire 590 Madison Avenue for approximately $1.1 billion.
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It’s been a busy week for Related Companies, too. On Wednesday, the City Council voted to approve changes to a 2009 rezoning of the Western Rail Yards, allowing for a development that could include up to 4,000 housing units, an office building, a hotel and a 6.6-acre public park. 

Related has indicated the housing units would primarily be of the rental variety. The Adams administration announced the developer had committed to a minimum of 625 affordable apartments.

At the same time, Related and partner Oxford Properties are exploring a sale of a portion of 35 Hudson Yards. The sections include office, retail, fitness and hotel condominiums completed just before the pandemic, but not 143 residential condominium units

There could be a $600 million price tag on the listing, a source told Bloomberg.

The most impactful news of the week, however, came on Tuesday when a judge denied the Real Estate Board of New York’s request for a preliminary injunction to prevent the Fairness in Apartment Rental Expenses Act, or FARE Act, from going into effect. The law, which bars “forced broker fees,” went into effect on Wednesday.

The law requires landlords to cover the cost of commissions for rental brokers they hire. A broker who publishes a listing is assumed to have been hired by the property’s owner.

The repercussions of the act’s implementation were instantaneous. Within hours, more than 1,000 rental listings were wiped from StreetEasy, a possibility opponents of the measure feared.

A spokesperson for the company, which supported the FARE Act, said wide fluctuations in listings are typical and that the company expects the decrease in listings to be temporary as agents and owners adjust to the rules.

The saga continued on Thursday when REBNY filed a notice to appeal the Tuesday decision. The appeal is to revive the bulk of REBNY’s claims and stop the law in while the legal fight continues.

In other news, Edmond M. Safra is backing two conversion projects by the Vanbarton Group through his company, AVRS Partners. His company is the financial backer on the conversion of the Archdiocese of New York’s office building in Sutton Place, as well as a financial partner for a 600-unit conversion of 77 Water Street in the Financial District.

Finally, Scott Rechler’s RXR signed a hard contract to acquire 590 Madison Avenue, putting down a $50 million deposit on the Plaza District skyscraper. The company signed a letter of intent about three and a half weeks ago to purchase the building from the STRS Ohio state teachers’ pension fund for close to $1.1 billion.

Rechler has until July 30 to close the deal. The clock is ticking.

Read more Politics New York Judge declines to halt NYC’s broker fee bill Residential New York StreetEasy listings drop by more than 1,000 day 1 of FARE Act passage Politics New York REBNY appeals FARE Act loss

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