Can you believe that there have already been $23.1 BILLION in investment sales closed in 2014? The projection is that $50B will close by year end. But could we possibly reach the watermark of 2007 where $60B was closed? Maybe.

So far this year the dollar volume of transactions has increased over last year across the entire market except for in North Manhattan. In the North Manhattan market the % change has only been 3%. In the Bronx there has been a 92% increase over last year! Brooklyn came in with a 73% increase and Queens increased by 49%.

The above percentages are a mix of several different products on the real estate market: Commercial; Garage & Development; Multifamily; Office; User; Industrial & Special Purpose.

What do all of these transactions mean? Properties only trade for some kind of value add. The real estate market is always going through cycles. After an exchange properties are activated into the value add process. This could be  build or improve to reposition. Cycles of residential and commercial may take turns. When there is a residential cycle populations increase as people move into finished units. Then they need jobs and amenities provided within their community. Or when an area is in a commercial cycle the area improves and more people want to live there which creates an opportunity for a residential cycle. Basically the city keeps growing and growing and there won’t be an end to this until all the FAR is used up entirely and then they’ll just have to rezone. Real estate perpetuates real estate.

So how do you identify opportunities? You pay attention to what’s happening and then it’s a mix of timing, understanding, communication, and luck. A good broker usually helps!

With the lack of transaction volume in Northern Manhattan and the new 125th Street commercial corridor underway expect growth here next this year. Or get in on it if you can!

Also pay attention to secondary markets that still have an upside. There are huge discrepancies across our city and this gap will close as the economy keeps improving and the city keeps changing for the better. Jamaica, Sunnyside, Glendale, and Ridgewood still have room to grow in Queens. Bed-Stuy, Lefferts Garden, Prospect Heights and areas that may be rezoned such as Bushwick and Gowanus in Brooklyn also have bright futures.

Continued diversification in our economy with a growing tech industry and educational facilities expanding in campus size and housing will create new destination areas. Areas like Sunset Park that have the space to absorb this kind of growth will be unrecognizable in a few years.

New York City is experiencing a new kind of democracy. Through Participatory Budgeting (PB), residents of twenty-three Council Districts are directly deciding how to spend over $25 million of taxpayer money. From now until April 2015, community members are exchanging ideas, working together to turn ideas into project proposals, and voting to decide what proposals get funded. It is a democratic process in which community members directly decide how to spend part of a public budget. It enables taxpayers to work with government to make the budget decisions that affect their lives. The community knows what’s best for their community and this is how we can get it.

This is the fourth cycle of PB and the number of districts that are involved has more than doubled since ten participated last year. You can find out if your city council district is participating and learn much more at www.pbnyc.org. There is even an interactive map showing projects that have been funded.

This Wednesday is the first Steering Committee meeting in District 34 served by Antonio Reynoso who has just been voted in after serving Diana Reyna as her Chief of Staff as her term limits expired. I’ve lived here for over a decade and I’m excited to be volunteering to serve as a budget delegate to City Council. Citizens don’t often get any direct control over how the budget is spent. The NYC 2015 annual budget is around $75 Billion. Last year PB spent $14 Million and this year with the increase of districts participating, that amount will increase to $25 Million. PB engages many New Yorkers left out of traditional political processes and mainstream community activism: youth under 18, people of color, low-income earners, women, immigrants, and ex-offenders. Much of the money was spent on safety, parks and gardens, education, and school improvements or electronics that wouldn’t have otherwise been available.

A few projects were out of the box such as bus countdown clocks so residents would be able to see how long they’d have to wait for the bus, and a sea-themed statue that won $150,000 with 298 votes in the Rockaways. As this will be an ongoing and growing process, the Gazebo/Grandstand/Outdoor Performance Space on Shorefront Parkway that got $150,000 in 2011-2012 received an additional funding of $200,000 with 309 votes in 2013-2014 that added audio equipment and an electrical system.

I was shocked by the relatively small numbers of voters that participated. Each voter can vote for up to 5 projects in their district. Of 1,641 total projects proposed city-wide, 122 made it on the ballot and 46 of them were funded. They ranged in cost from $30-675,000 and voter turnout ranged in districts from about 1,000-3,000.

So this Wednesday I get involved. Anyone can get involved! Even by just spreading the word. Youth aged 14 and up can serve in committees and voting age is 16. Committees meet to vet the ideas that are proposed by the community and figure out which ideas are feasible then determine costs. They also form sub-committees for the different projects and then create an expo like a science fair where the community can come out and see the ideas that are proposed. I’m pretty excited. Feel free to contact me if you have questions about getting involved, although most information is all at www.pbnyc.org.

I am still travelling down the rabbit hole of manufacturing. Oftentimes I am looking up companies via their ‘NAICS’ code. This stands for North American Industry Classification System and is used to classify business establishments according to type of economic activity or process of production. There are six digits in codes and all codes that with 31, 32 & 33 represent manufacturers. There are 666,849 manufacturing businesses in the US when quantified by NAICS codes.

I just learned the NAICS updates its codes every five years. The most recent changes were in 2012 and 2007.  The next batch of changes will come in 2017 but the deadline for comments from the public passed already on July 21, 2014. This is interesting because within the NAICS codes we can see emerging industries with the creation of a new code and watch how industries evolve as categories diminish.

After reading all about it, I give you takeaways of the latest round of changes from a document at census.gov titled Federal Register, Part II, Office of Management and Budget. May 12 2010. This is a report just before the latest 2012 changes.

The ECPC (Economic Classification Policy Committee) had reviewed 65 comments. They then made recommendations based on four guidelines:

1. Because of the cost of change and disruption of statistical data that have already resulted from ongoing implementation of NAICS, changes would be limited to those that significantly improve the relevance and efficiency of the classification system;
2. They will recommend new and emerging industries;
3. They will recommend revisions to issues;
4. They will make changes to account for errors and omissions as well as recommend narrative improvements to clarify the content of existing industries.

The following is a summary of the 65 comments:

-ten addressed reducing manufacturing’s detail because of inability to publish statistical data for these industries due to decreasing number of establishments, decreasing employment, and/or decreasing value of shipments over time; and increasing difficulty in stable and consistent classification of establishments into these industries due to decreasing specialization and coverage within the industries. In the end they recommended the decrease of 108 6-digit industries in a way that would aggregate any that had been under these classifications to the 5-digit industry level. (table in Part IV)

-nine made suggestions for the most appropriate classification of units that outsource manufacturing transformation activities. They considered impact on economic programs of major statistical agencies and on the resulting comparability & consistency of the economic data published across the agencies. In the end they recommended classifying these activities, even for companies that outsourced 100 percent of activities while being responsible for the overall responsibility and risk for production, into manufacturing over the suggestion towards wholesalers.

-three addressed clarification of the classification of publishers’ sales offices, distribution centers, and logistics service providers. The ECPC resolved to recommend classification of publishers’ sales offices in the information sector, classification of distribution centers supplying affiliated retailers in warehousing and storage, and classification of units providing logistics services based on the primary industrial activity of the establishments being classified.

-46 comments requested specific changes to industries. Thirty-nine of those comments requested creation of new industries, including five requests for an ecosystem health care assistance industry or sector, three requests for an industry covering the delivery of orthotic and prosthetic devices, two requests to create an industry for the cryogenic treatment of metal, two for a nanotechnology research and development industry, several for industries related to renewable energy, and single requests for other new industries such as cultural resources management green jobs, technical ceramics manufacturing, public health service, simulation, erosion control contractors, and classic car retail showrooms. the rest requested revisions or clarifications of content of existing NAICS industries, such as the design service industries, the display advertising industry, and the industries in Sector 62 related to elder care and disability services. One request proposing new industries in the utilities sector to identify renewable energy resulted in the recommendation of four new industries based on unique production processes for solar electric power generation, wind electric power generation, geothermal electric power generation, and biomass electric power generation. They also recommended changes in the agriculture; construction; manufacturing; and professional, scientific, and technical services sectors for 2012 (Part III).

-there were also recommendations for content revisions

www.census.gov/naics

http://www.census.gov/eos/www/naics/federal_register_notices/notices/fr12my10.pdf

I have been in the process of starting a blog called Realestatic and I just happen to also be required to start a blog in MGT 4961. So now, I have the advantage of accountability to get this blog up and running, and will have the added benefit of actually doing opportunity, business model, target market, and competition analysis as required in MGT 4961.

So what is Realestatic? It’s how I feel about commercial real estate! Like ecstatic, but about real estate. I look forward to building a blog/website that anyone in the leasing market will find helpful.