Earn Risk Adjusted Returns

In NYC´S Greatest Growth Neighborhoods

Why New York City Real Estate?

There is a compelling long-term investment opportunity in the multi-family and mixed-use real estate market in transitioning neighborhoods in New York City. Robust economic and population growth should increase the demand for and value of residential and mixed-use real estate in New York City, particularly in select parts of Brooklyn, Northern Manhattan and Queens that are near public transportation and close to employment centers.

The economy and real estate market in New York City are driven by numerous and diverse factors that currently reflect many positive trends including anticipated population growth, a limited supply of land and available housing units, record safety levels, and New York City’s desirability as a secure investment destination for both non-U.S. and domestic capital.

CityShares anticipates these trends will create robust demand for residential and retail space, which will increase rental prices and real estate values in New York City.

Population Growth

A significant demand driver is the anticipated population growth in New York City. The New York City Department of City Planning estimates the NYC population will grow by over 1.1 million people by 2030, including an additional 289,000 residents in Manhattan and an additional 253,000 residents in Brooklyn.

Manhattan is projected to add 289,000 people between 2000 and 2030, an increase of 18.8%. Manhattan has approximately 841,000 housing units representing a population to housing ratio of 2:1. In Brooklyn, the population is expected to increase by 10.3% or 253,000 people. Brooklyn has approximately 997,000 housing units, a 2.5:1 ratio of population to housing. To maintain this ratio, New York City will need to create over 80,000 units of additional housing in Manhattan and over 60,000 units of additional housing in Brooklyn, which will be challenging given geographic constraints, zoning, government regulations, and high construction costs. Because of the high cost of building additional housing units, most of these new housing units will be developed as “For-Sale” housing and not rental housing, creating a limited supply of rental properties. The limited supply of additional rental properties will help increase rental prices.

Additionally, the inflow of wealthy buyers and families into Manhattan and select neighborhoods in Brooklyn is reducing the total housing unit count, due to large unit combinations. For example, it is common to see the conversion of multi-family houses to single family residences (e.g. multi-family townhouse conversions to single family) or apartment unit combinations to create large family apartments. CityShares expects this supply/demand imbalance to put upward pressure on the value of existing properties.

Diverse Economic Drivers

New York City is a global center with diverse economic drivers in the fields of finance, law, media, art, fashion, research, technology, education and entertainment. These fields create demand for residential space for the people employed in these industries.

Supply Constrained Market

The incredible population increase NYC is currently experiencing and expected to continue is creating a supply constrained market in NYC and the surrounding neighborhoods.

With over 1,000,000 new residents set to migrate into NYC, where will everyone live?  There are several reasons NYC is currently experiencing a housing crisis:

  • Apartments are being combined in order to accommodate larger families.
  • High Development costs provide incentive for developers to build "for sale" vs "for rent" products.
  • International Buyers are purchasing properties that often remain vacant.

Flight to Quality

Non-U.S. and domestic capital continue to flow into the New York City real estate market. According to a survey administered by the Association of Foreign Investors in Real Estate (“AFIRE”), a Washington, D.C.- based trade group, New York City took the top spot among global cities for non-U.S. investment in 2012. According to Helen Hwang, executive vice president for capital markets with the New York office of brokerage firm Cushman & Wakefield, New York City real estate “provides transparency, stability, long term growth and significant asset appreciation”. The Managing Member believes this trend will continue as investors seek investment security, particularly given the volatility in the European and South American real estate markets.

Record Safety Levels

Crime in New York City is at a historic low making New York City an increasingly desirable place to live, visit and invest. New York City consistently ranks among the safest large cities in the United States, according to FBI crime statistics which incorporate both violent and non-violent crime. In 2012, there were 414 homicides, the lowest number since 1963. The safety of the city is expected to continue under Police Commissioner Bill Bratton who manages a police force that is larger than the next four largest U.S. police departments combined.

Limited Supply

Land supply in New York City, in particular the island of Manhattan and the Brooklyn peninsula, is limited due to geographic constraints, zoning and government regulations. Additionally, the large demand for condominium or cooperative housing, driven by local, domestic and non-U.S. demand, makes it difficult to build rental housing.

Regulated Housing Supply

The existence of rent regulated housing units, which total over a 1,000,000 units in the New York City, makes it very difficult to demolish existing properties to build larger ones that conform to enhanced zoning rules. Rent control and stabilization regulations greatly restrict available development sites because developers cannot easily relocate rent regulated tenants. For example, the Managing Member recently evaluated a 40,000 square foot buildable site that holds an 11-unit, 9,000 square foot building. The presence of a single rent controlled unit in this building restricted the construction of a larger building because the rent controlled tenant refused to relocate. This illustrates the influence that one regulated unit can have on the housing supply by limiting developers’ options and therefore increasing rent on properties that are not rent controlled.

Construction Costs

The high costs of new construction limits the construction of rental housing product as many developers are only able to afford to building for sale condominium product. High replacement costs restrict the available supply of housing. Constructions costs in New York City are higher due to competition, difficulty in obtaining labor and materials, insurance costs and the influence of labor unions.

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An investment in CityShares is appropriate only for certain sophisticated, accredited investors and involves significant risk, including a total loss of your investment. Please contact us if you are interested in obtaining more information about CityShares, and we will send you a questionnaire. Upon our receipt of satisfactory responses, we will send you a prospectus and subscription documents, which include detailed information on investment objectives, risks of investing, investor criteria and fees and expenses of the fund.  Please read these documents carefully before deciding to invest as you could lose your entire investment amount. CityShares reserves the right to accept or reject any subscription.

This overview does not constitute an offer to sell or a solicitation of an offer to make an investment (the “Investment”) in the projects or funds described herein. No such offer or solicitation will be made prior to the delivery of definitive documentation relating to the matters herein. Before making an investment decision with respect to the Investment, potential investors are advised to carefully read the operating agreement that will govern the Investment (the “Documents”) and the related subscription and offering memorandum documents. Further, potential investors are advised to consult with their tax, legal and financial advisors. By accessing this site and any pages thereof, you agree to be bound by its Terms of Use. This website is only suitable, intended and available for accredited investors who are familiar with, and willing to, accept the risks associated with private investments.

This overview contains a preliminary summary of the purpose and principal business terms of the Investment. This summary does not purport to be complete and is qualified in its entirety by reference to the more detailed discussion contained in the actual text of the Documents. The manager has the ability in its sole discretion to change the strategy described herein. Some of the statements contained herein are forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. These statements involve known and unknown risks, uncertainties, and other factors that may cause the project’s actual results, levels of activity, performance, or achievements to be materially and adversely different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements.

In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “targeted,” “projected,” “underwritten,” “estimates,” “predicts,” “potential,” or “continue” or the negative of these terms or other comparable terminology. These forward-looking statements include, but are not limited to, statements concerning the company, property, risk factors, plans and projections. Direct and indirect purchase of real property involves significant risks, including, but not limited to, market risks, risk related to sale of land and risks specific to a given property. Investments are NOT insured by the FDIC or by any other Federal Government Agency, are NOT Bank deposits, are NOT guaranteed by CityShares LLC and MAY lose value.

Except as required by law, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to update publicly any forward-looking statements for any reason to conform these statements to actual results or to changes in our expectations.

Disclaimer: Neither the SEC nor any state securities commission or regulatory authority approved, passed upon or endorsed the merits of this offering.

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