Co 11 29 11

NOVEMBER 29, 2011

The Weekly Newspaper of New York’s Commercial Real Estate Industry

$7.00

o f t le a s e he w eek: 6th 641 aven ue

Murray Hill Properties’ David Greene on turning the brokerage over to the brokers and his upcoming Fund V. PLUS

• The negotiations behind the Infor deal • The Plan: Invision comes to 28 West 44th street

• postings: the landfilling of NYC

Lease Beat: credit Agricole | Guggenheim partners | DG fast channel

Joao maio pinto

• Winoker’s Jonata Dayan keeps it all in the family

TABLE OF CONTENTS 321 West 44th Street, 6th Floor, New York, NY 10036

Page 4

The Week in Commercial Real Estate

Page 6

Lease Beat

Page 10

Page 12

Stat of the Week

Page 16

The Lobby

Page 18

Postings

Tyler Rush, Production Manager

Page 19

The Sit-Down

Lisa Medchill Advertising Production

Page 20

Lease of the Week

Christopher Barnes, President,

Page 21

Power Broker

Barry Lewis, Exec. Vice President,

Page 22

Lease Beat Charts

Page 23

Calendar

Page 26

The Plan

Jared Kushner, Publisher Robyn Reiss, Associate Publisher Elizabeth Spiers, Editorial Director Jotham Sederstrom, Editor

Concrete Thoughts

2 | November 29, 2011 | The Commercial Observer

Daniel Edward Rosen, Dan Geiger, STAFF WriterS Robert Knakal, Sam Chandan, Columnists Peter Lettre, Photo Editor

Observer Media Group Observer Media Group Ken Newman, Director of Classified Advertising

Page 21

The Commercial Observer | November 29, 2011 | 3

this week in commercial real estate Judge Recused in $11 M. Fraud Case

By DAN GEIGER A New York Supreme Court judge has recused himself from a case involving an alleged $11 million real estate fraud and referred the matter to the Brooklyn District Attorney’s office, The Commercial Observer learned last week.

The suit involves 315 West 35th Street, a 60,000-squarefoot Midtown building that Isaac Chetrit, a cousin of the prominent real estate investor Joe Chetrit, has been trying to foreclose on.

The case has been locked in court over allegations that similarly named real estate investor Aaron Chitrik, the owner of 315 West 35th Street, who is in default on the property, tampered with the deed to the mortgage, illegally transferring it to an entity that he controlled.

The debt has since been transferred back to Mr. Chetrit, who purchased it for roughly $11 million in 2010 with the intent to take control of the property. The confusion stemming from the improper transfer, however, has delayed efforts to foreclose, which are ongoing.

Mr. Chitrik could not be reached for comment, although an adviser to Mr. Chitrik, Benjamin Herbst, spoke to The Commercial Observer on his behalf.

In late October, Mr. Chetrit’s attorney in the case, Stephen Meister, a principal at the law firm Meister Seelig & Fein, sent a letter to Justice Bernard Fried, a prominent judge who has presided over several high profile real estate cases in the city, outlining the fraud. Mr. Meister accuses Mr. Herbst and two of his associates, Stuart Davis and Jonathan Lefkowitz, of counterfeiting the mortgage deed.

Mr. Meister told The Commercial Observer he suspected the group’s plan was to delay the foreclosure by tying up the case in court, potentially in hopes that Mr. Chetrit would offer a payoff to walk away.

In November Mr. Meister responded by adding Mr. Herbst and Mr. Davis as defendants in the foreclosure

action and formally identifying their misconduct in a letter to Justice Fried. In an apparent nod to the validity of Mr. Meister’s accusations, Justice Fried has brought the case to the attention of Brooklyn District Attorney Charles Hynes.

“I am referring this matter to the Office of the District Attorney, for whatever action is deemed appropriate,” Justice Fried wrote in a letter to the DA last week. “In light of this referral, I am recusing myself from this case, effective immediately.”

The case has since been turned over to Justice Melvin Schweitzer. Mr. Meister has continued to proceed with the foreclosure action and has asked the court to place 315 West 35th Street in the hands of a receiver in order to remove the building from the control of Mr. Chitrik in the meantime.

According to court records and Roy Martin, an attorney with the Midtown law firm Hodgson Russ, this isn’t the first incident in which Mr. Herbst has been involved in fraud. Mr. Herbst has acknowledged tampering with mortgage and property deeds on several occasions, modifying the names on the documents to illegally transfer them to entities he controls.

In a conversation with The Commercial Observer, Mr. Herbst denied the allegations.

He said he arranged an amicable workout between Mr. Chetrit and Mr. Chitrik and accused Mr. Chetrit of improperly altering the mortgage papers. Mr. Herbst, however, was unable to provide any proof that there was ever a willing partnership between the two parties.

“The DA will not touch this because there is nothing criminal here,” Mr. Herbst said.

“When you’re doing 3,000 workouts in the last 25 years sometimes you step on someone’s toes and this happens.”

“I don’t know how he has been able to get away with this for so long,” Mr. Martin told The Commercial Observer.

4 | November 29, 2011 | The Commercial Observer

The Staten Island Ferry Terminal

Staten Island Named as Huge New Development Site, City Sez The Staten Island site of a former U.S. Navy port base will soon be transformed into 14 acres of waterfront residential properties and retail space, the city announced last week.

New Jersey-based developers Ironstate Development Company has pledged $150 million to transform the site, located in the Stapleton neighborhood on the North Shore of Staten Island, into 30,000 square feet of commercial space and 900 apartments.

The city is expected to contribute $33 million to the project, which will go to building a new waterfront esplanade and spruce up a nearby Staten Island Railway station.

Rents in the residential buildings are expected to range from $1,400 to $2,000, according to published reports. Ironstate, which has developed similar waterfront properties like the W Hoboken and 50 Columbus in Jersey City, is expected to break ground on the project as soon as possible, said Seth Pinsky, president of the city’s Economic Development Corporation.

Interstate president David Barry could not be reached for comment.

The former Naval port base was handed over to the city after the Cold War, when the military was downsizing its budget, said Mr.

Pinsky. Once Mayor Bloomberg took office, he ordered local officials to come up with a redevelopment plan for the six development parcels—totaling 35 acres—on the Staten Island site.

After a request for proposal process stalled during the recession, Ironstate approached in 2009 and signed a contract with the city to redevelop two parcels.

The contract was finalized Nov. 1 shortly after Ironstate finalized its $150 million in financing.

Now with a slew of retail and residential possibilities on the horizon, the most appealing part of the borough will soon be youth, according to Mr. Pinsky. Staten Island “has had a very hard time retaining its young people,” he said. “The idea of having rental units in a location that’s accessible to public transportation and to jobs in Manhattan and elsewhere we thought was a great opportunity for the borough.”

The site features panoramic views of Manhattan and the Verrazano-Narrows Bridge and is a five-minute walk from public transportation, he added.

The city has been actively trying develop NYC’s faraway borough in other ways as well.

The city has a request for interest for a few development parcels in St. George between the ferry terminal and the Staten Island Yankees’ Richmond County Bank Ballpark. In addition, the city is working to improve retail at the Staten Island Ferry terminal and working on the expansion of the New York Container Terminal,

among other projects. —Daniel Edward Rosen

CBRE: National Retail Availability Rates Will Drop to 12.4 Percent by the End of 2012 The country’s retail sector availability rate should see a notable decline, falling to 12.4 percent by the end of 2012, according to a new report issued yesterday by CBRE Econometric Advisors.

The availability rate, which is the space that is actively being marketed and is available for tenant construction within a yearlong period, should see a further dip in 2013, falling to 11.7 percent.

The rate for the third quarter of 2011 stood at 13.2 percent.

New construction, meanwhile, will reach historic lows in 2012.

But there will be a modest increase in rents—about 1.8 percent —in 2013.

“We do not expect rents to get back to their 2008 levels until early 2017,” said Abigail Rosenbloom, an economist at CBRE-EA. The company does predict retail rental growth in Denver, Austin, Nashville, New York and Columbus over the next two years. —DER

The Commercial Observer | November 29, 2011 | 5

lease beat

The Commercial Observer’s almost-exact breakdown of last week’s ten biggest deals

1

6 | November 29, 2011 | The Commercial Observer

2

Crédit Agricole 350,000 Square Feet

Guggenheim Partners 222,000 Square Feet

Crédit Agricole has renewed approximately 350,000 square feet at 1301 Avenue of the Americas in what is one of the largest leases to get done in the second half of 2011.

The French bank and financial firm has extended its hold on a block of floors near the base of the 1.8-million-square-foot tower, owned by the Paramount Group, and also two tower spaces in the 45-story property.

The term of the lease is 10 years, according to a source. The rents in the deal are said to be in the $80s per square foot, though The Commercial Observer could not confirm those rates by press time.

Crédit Agricole is the largest retail bank in France. It has long had its New York headquarters at 1301 Avenue of the Americas, which is known as the Crédit Agricole Building. The company leases floors 13 through 20 in the property and two smaller floors higher up.

The company had been in the leasing market in search of options for months and for a time was rumored to be potentially interested in a deal at 825 Eighth Avenue, the West Side office building known as Worldwide Plaza. Most tenants who had been shopping at that location were eventually pushed off the building by the Japanese financial company Nomura, which absorbed virtually all of Worldwide Plaza’s cavernous vacancy in a 900,000-square-foot deal there during the summer.

Crédit Agricole’s lease settles some rising concerns among real estate experts that European financial institutions could cast sublease space into the market next year as a result of that Europe’s ongoing debt crisis. Many brokers have cast a watchful eye toward banks like UBS, Crédit Suisse and Société Générale, though none have yet announced any intent to downsize in the city.

Studley, led by company chairman and CEO Mitchell Steir, represented Crédit Agricole in the renewal deal. Paramount uses an in-house leasing team led by one of the company’s top leasing executives, Ted Koltis, to tend to its multimillion-square-foot Manhattan portfolio, which includes several trophy buildings besides 1301 Avenue of the Americas, including 712 Fifth Avenue and 1633 Broadway.

Neither Mr. Steir nor Mr. Koltis could be reached.

A spokeswoman from Crédit Agricole declined to comment. —Dan Geiger

Guggenheim Partners is looking to bring its New York headquarters to 330 Madison Avenue, sources have told The Commercial Observer.

The investment and financial services firm would take several floors in the base of the Vornado Realty-owned tower. Estimates vary how much space Guggenheim could fill the building, but several people with knowledge of the firm’s requirements pinned the potential deal at 220,000 square feet or larger.

For months Guggenheim has been in the market in search of a space to which to move from its current location at 135 East 57th Street. The company began as an investment operation set up in the early part of the 20th century to invest the Guggenheim family fortune but has since grown into a major private investment company with roughly $100 billion of funds under management and over 1,400 employees.

The company almost had a deal to move to 1251 Avenue of the Americas in recent months, where it was set to sublease about 220,000 square feet from the French financial company Natixis. That lease crumbled abruptly over the summer when Natixis was unable to complete a transaction to relocate from 1251 Avenue of the Americas to 9 West 57th Street. In the end Natixis was forced to remain in place instead of subleasing the space to Guggenheim, casting the firm back into the market in search of space.

The deal at 330 Madison Avenue, if it gets done, would be a substantial expansion over the company’s existing location at 135 West 57th, a building owned by Cohen Brothers Real Estate. According to sources, Guggenheim has less than 140,000 square feet in its present New York location.

Its lease at 135 West 57th Street expires in 2013.

Peter Hennessy, a top executive at the real estate services firm Cassidy Turley, is representing Guggenheim in its space search. Mr. Hennessy declined to comment.

Frank Doyle, an executive at JLL, leads an agency team that handles leasing at 330 Madison Avenue. Mr. Doyle also declined to speak. Reps at Vornado and Guggenheim couldn’t be reached. —DG

The Commercial Observer | November 29, 2011 | 7

lease beat

3

4

5

6

7

DG Fast Channel 90,000 Square Feet

Human Rights Watch 80,000 Square Feet

Macy’s 60,000 Square Feet

Regus 50,000 Square Feet

Infor 31,500 Square Feet

DG Fast Channel, an advertising production and distribution company, has leased 90,000 square feet at 1633 Broadway.

The company will take the building’s entire fifth and sixth floors in the deal for undisclosed rents.

DG Fast Channel will be consolidating two locations into 1633 Broadway, a 48-story, 2.4-millionsquare-foot office tower just north of Times Square. The company will join offices it has at 600 Third Avenue, where it has about 15,000 square feet, and at 205 West 39th Street.

Stephen Siegel, CBRE’s chairman of global brokerage, arranged the transaction on behalf of the building’s landlord, the Paramount Group.

Mr. Siegel, a prolific dealmaker in the city, has brought large tenants to 1633 Broadway before.

Last year, en route to winning CBRE’s title for having transacted the most square feet of deals in 2010, Mr. Siegel represented the cable network Showtime in a 200,000-plus-square-foot lease at 1633 Broadway.

Earlier this year, Paramount consolidated its ownership in 1633 Broadway, buying a minority 49 percent interest in the tower from a partnership between Morgan Stanley and Merrill Lynch for about a billion dollars.

The deal with DG Fast Channel is one of a number of notable transactions to take place in the Paramount Group’s sizeable New York portfolio since Ted Koltis moved over from Tishman Speyer to take the reins as the company’s chief Manhattan leasing executive. As The Commercial Observer reports exclusively this week, the company just inked a deal to have the French bank Crédit Agricole renew the 350,000 square feet of space it occupies at 1301 Avenue of the Americas. —DG

Fueled by a $100 million donation last year by George Soros, Human Rights Watch reached a deal to nearly double its space at the Empire State Building.

“We got a big contribution from George Soros and that has really spurred the organization and jumpstarted our growth,” said Barbara Guglielmo, HRW’s director of finances and administration in a conversation with The Commercial Observer.

HRW has long occupied space in the Empire State Building. The company leases the entire 34th floor and a portion of the 35th. In the new 14-year lease, HRW agreed to renew its hold on 34 and grow into almost all of 35 as well as the 33rd floor. The deal, which schedules HRW’s growth in stages over the term of the lease, totals nearly 80,000 square feet for rent in the $40s per square foot.

“With George’s money as a basis for growth, it will allow us to continue to expand here for another 14 years,” Ms. Guglielmo said. “We don’t believe that all of our growth will occur here in New York City, but our headquarters here will need to grow to support our global operations.”

HRW is a nonprofit, nongovernmental organization that investigates and reports human rights violations around the world.

The group has been based in the Empire State Building for over a decade and has witnessed the iconic tower’s transformation in recent years from an antiquated office property cluttered with tenants to a building that has been renovated and refitted with modern energy efficient systems and infrastructure.

“Tony has done an unbelievable job with that building,” Brian Waterman, a Newmark Knight Frank executive who represented HRW in the leasing deal, said of the building’s landlord, Tony Malkin.

“We looked at other options in the market but we definitely wanted to remain in place.” —DG

Macy’s will be expanding its already sizeable presence in the office building 11 Penn Plaza by a floor.

The retailing giant, which uses the 1.1-million-square-foot building as a location for its New York headquarters, will be taking the property’s entire fifth floor, with nearly 60,000 square feet of space. Macy’s will pay rents in the $50s per square foot for the floor.

The lease will stretch till 2020 so that its expiration aligns with the existing term for a large portion of the roughly 600,000 square feet the company occupies at the property, which sits on Seventh Avenue two blocks south of Macy’s flagship department store on 34th Street.

The expansion came about when the prior tenant in the space, the office suite company Regus, reached a deal in recent weeks to relocate to the nearby office property 112 West 34th Street, which is owned

by Malkin Properties. According to sources, Macy’s snatched up the space at 11 Penn Plaza before it ever hit the market. Its expansion needs in fact may have prompted 11 Penn Plaza’s landlord, Vornado Realty Trust, to usher Regus out, a source said, so that the landlord could accommodate its marquee tenant at the property.

Large tenants typically are favored by the owners they rent space from, gaining rights to spaces in a property where they have a concentration of offices as the space becomes available.

Macy’s, like a number of other major retailers, has appeared to do well in recent months despite renewed concerns about the economy. According to reports, sales figures for the Black Friday shopping weekend surged over recent previous years, an indication that much-needed consumer spending could be rising in the sector.

Glen Weiss, a senior level leasing executive at Vornado, brokered the deal with Macy’s for the expansion floor. Neither Mr. Weiss nor representatives for Macy’s could be reached for comment. —DG

The office suite company Regus is taking two floors totaling about 50,000 square feet at 112 West 34th Street.

The firm will be relocating from 11 Penn Plaza, where the retailing giant Macy’s is expanding into the space it will leave behind.

Regus will take floors 17 and 18 at 112 West 34th, a 26-story, 770,000-square-foot building owned by Malkin Properties.

The company has committed to the spaces, which are 28,000 and 23,000 square feet respectively, for 15 years, and to rents that start in the mid $40s per square foot.

A Regus spokesman confirmed the deal and said 112 West 34th Street was an ideal location because it was nearby its current offices at 11 Penn Plaza, making the move more convenient for its tenants while remaining close to Penn Station, a central transit hub.

“We want to retain as many tenants as possible in the move and stay close to Penn,” the spokesman said. “The 11 Penn location is almost fully leased.”

Regus rents offices and then partitions them for smaller users such as start-up companies or even individuals who would like to lease a single work station.

“Many of our tenants are firms that are starting out and want flexibility,” the spokesman said. “It’s a great way to enter the market because we allow tenants to easily shrink or add space.”

Lately the concept has appeared to gain steam in the city amid lingering economic problems that have cast swaths of the workforce into the job market and spurred some to start their own business or embark on a more entrepreneurial career path.

As The Commercial Observer reported, WeWork, another office suite provider, just committed to about 75,000 square feet at 175 Varick Street, where it will open its fourth location in the city.

According to WeWork’s chief executive, Adam Neuman, the firm has taken almost 200,000 square feet in under two years.

Regus is one of the largest office suite companies, with 20 locations in the city and over 1,200 in 92 countries worldwide. —DG

As the old adage goes, you have only one chance to make a first impression.

For Infor, a business software company that is far less known than its roster of 70,000 clients— Saab, AB World Foods, Foxwood Casinos, etc.—moving into New York City’s growing tech market is as good as telling the world that it is ready to play with the big boys.

Infor signed a long-term lease at 641 Avenue of the Americas, an eight-story building owned by Atlas Capital Group, officials announced earlier today.

Originally based in Alpharetta, Ga., Infor (see Lease of the Week for more details) will be occupying a total of 31,500 square feet on both the fourth and part of the third floors, and will have an option for 11,500 square feet of contiguous space on the third, said Cushman & Wakefield, which represented Infor during the deal.

The new office will house executive staff, a client reception center and engineers who specialize in graphic design and social computing.

The building is located in Midtown South, which is fast becoming the hub of the booming tech industry; both Apple and Yelp will be Infor’s new neighbors at their offices at 100-104 Fifth Avenue.

The Midtown South area has a 6 percent vacancy rate, reports The Wall Street Journal.

Infor is being welcomed with open arms from the city, as both Mayor Bloomberg and Governor Cuomo are expecting sizable layoffs in the financial sector in the next year, according to The Journal.

“Tech companies have been gravitating to areas with a critical mass of other such companies so there will be a big labor pool,” Mr. Bloomberg said. “New York is proving to be one of these areas, thanks in part to its culture and lifestyle offerings.”

Bruce Mosler and Adam Rappaport, both of Cushman & Wakefield, represented the tenant.

Peter Turchin and Gregg Rothkin of CBRE represented the landlord.

—Daniel Edward Rosen

8 | November 29, 2011 | The Commercial Observer

8

9

Skanska 16,000 Square Feet

The Simons Foundation 15,173 Square Feet

Skanska Railworks Joint Venture, a U.S. subsidiary of Swedish builder Skanska AB, will lease 16,000 square feet at 519 Eighth Avenue, it was announced last week. The mega-builder has spearheaded construction on the Second Avenue subway project, the 7 subway line extension and the World Trade Center site.

Although The Commercial Observer first broke news of the deal Nov. 2, representatives for the tenant and building owner officially announced the transaction last week.

The construction company also has a large office in the Empire State Building, but when it won the bid for the systems and furnishings of the 7 line extension last month, it began the hunt for nearby office space. “[Skanska] likes to locate as close as possible to major projects they are working on, and they lease for as long as they think the life of the project is,” said Barbara Raskob of the Kaufman Organization, who represented the landlord in the deal with Steven Kaufman.

The lease is for five years, with a cancellation option after three.

Asking rent was in the mid-$30s per square foot for the entire 14th floor.

This deal brings 519 Eighth Avenue to 100 percent occupancy.

The building will be and ideal, if rather temporary, home for the company—the lobby was renovated about four years ago and the landlord is considering adding a roof deck.

Ted Spiegel of Spiegel Real Estate represented the tenant in the transaction. —Guelda Voien

The Simons Foundation has expanded onto the entire second floor of 160 Fifth Avenue, a 15,173-square-foot space.

The organization, which was founded by the billionaire hedge fund manager James Simons, occupies several floors in the 112,000-squarefoot property, including 6, 7, 8 and 9—the top four floors in the asset.

The nonprofit is involved in various types of research funding, including autism, education programs in Africa, and grants for high level math and life sciences.

His foundation committed to the expansion space on the second floor until 2025. Asking rents for the space are $65 per square foot.

Alexander Chudnoff repped RFR Realty with JLL colleagues Mitchell Konsker, Jonathan Tootell and Matt Ginberg.

Peter Hennessy, president of the real estate services firm Cassidy Turley’s New York operations, and Wendy Miller, an executive at the firm, handled the deal for the Simons Foundation. —DG

Raines International 13,900 Square Feet Executive headhunters Raines International poached 13,900 square feet of Rockefeller Plaza sublease space from Time Warner.

The sublease is for the 27th floor at 75 Rockefeller Plaza and will begin on Jan. 1. Asking rent for the space was believed to be $40 per square foot, sources familiar with the deal said last week.

Seth Hecht and Robert Tunis of Colliers International represented the tenant, Raines International.

Robert Martin of Jones Lang LaSalle represented sublandlord Time Warner in the negotiations.

Raines International will be relocating its headquarters from 250 Park Avenue, where its lease was due to expire and landlord AEW Capital Management sought to assemble its 17th-floor office into a four-story block beginning at the 15th floor, according to Crain’s. —DER

10

The Commercial Observer | November 29, 2011 | 9

stat of the week 21,200

SOLD k

$7,900,000 k

1400 Dean Street, 267 Clifton Place, 299 & 303 Putnam Avenue Brooklyn, New York k Four 4 story walk-up apartment buildings consisting of 72 apartments. 9X Rent Roll. k

Office jobs in New York City, defined as jobs in the professional and business services, financial activities, and information industries, have increased by 21,200 through October of this year. That’s the good news. The bad news is that the number for 2011 has been higher and, in fact, was up by 25,400 through July of this year before trending lower. In total, there are now 1.2 million office-sector jobs in New York City. During the recent downturn, it had fallen to 1.150 million. The record high since at least January 1990 was set in January 2001 at 1.298 million positions. For 2011, the problem areas have been information (down by 3,100), banking (down by 400) and insurance (down by 400).

Believe it or not, the official numbers show that the securities industry is actually up by 900 positions this year, closing October at 168,900. That said, it remains well below the job levels recorded in late 2007/early 2008 (nearly 190,000) and back in late 2000/early 2001 (just over 200,000). —Robert Sammons, Cassidy Turley

Samuel Kooris & Aaron Jungreis successfully brokered this transaction

38 East 29th Street • New York, NY 10016 • 10th Floor

212-359-9900

www.rosewoodrealtygroup.com

WOMEN’S SIG

A special way to end an exceptional year Celebrate the second year of ICSC’s Women’s Special Industry Group program at this interactive discussion of today’s most important trends and topics, featuring some of the most successful professionals in the industry.

30229 ROSEWOOD_COMMERCIAL OBSERVER_4.75 When: Monday, December 5, 2011, 4:00 – 5:30 pm X 5.125 • 11/21/11

Where: New York Hilton, Mercury Ballroom, New York, NY PROGRAM CHAIR

Faith Hope Consolo

Chairman, Retail Leasing Marketing and Sales Division Prudential Douglas Elliman Real Estate New York, NY RSVPS ARE REQUIRED IN ADVANCE - RSVP to NewYorkRSVP@icsc.org You must be a paid registrant of the New York National Conference to attend the SIG at no cost.

If you are not a registrant of the New York Deal Making and would like to attend this SIG ONLY go to www.icsc.org/2011SIG5. The fee is $45 for members and $65 for non-members.

For Sponsorship Opportunities contact Suzanne Tanguay at stanguay@icsc.org or call 646-728-3475.

10 | November 29, 2011 | The Commercial Observer

To purchase a subscription to The Commercial Observer, please call 212.407.9331

REX PREMIERE UJA-Federation of New York’s Real Estate & Allied Trades Division would like to thank the generous supporters of the REX Premiere.

TUESDAY, NOVEMBER 15, 2011

Bar Basque, New York City

PLATINUM BLDG Management Co., Inc. GOLD 5IF $PNNFSDJBM 0CTFSWFS r 'SJFE 'SBOL )BSSJT 4ISJWFS +BDPCTPO --1 r 'SJFEMBOE 1SPQFSUJFT r )BZT 3FBMUZ 4FSWJDFT .BEJTPO 3FBMUZ $BQJUBM r /BUJPOBM (SBOJUF 5JUMF *OTVSBODF "HFODZ *OD r /PSUI )JMM $BQJUBM .BOBHFNFOU --$ Weber Law Group LLP SILVER "SJFM 1SPQFSUZ "EWJTPST r $PSOFSTUPOF 3FBM &TUBUF *OWFTUNFOUT r &TUSFJDI $P r 3FBM &TUBUF 8FFLMZ 4BWBOOB *OWFTUNFOU .BOBHFNFOU --$ r 7JDLFST 3FBMUZ -UE REX PREMIERE CHAIRS 3PE ,SJUTCFSH r 4IBOF /FVSJOHFS r #FSOBSE 4DIXBSU[ REX PREMIERE COMMITTEE 3PCFSU "S[BOJQPVS r 5BMJZB #BTIBOJ r ;BDIBSZ #FOOFUU r /PBI #JMFOLFS r #BTUJFO #SPEB r -BVSFO %BWJETPO r .BSD 'FMMT 3PCFSU 'SJFENBO r +VTUJO ) (SFFO r #FO )BHIBOJ r 4DPUU )BSSJT r .JDIBFM )PĂ­ FOCFSH r (SFHPSZ + ,BMJLPX r +POBT ,BU[PĂ­ +PTFQI ,PJDJN r &ENPOE -FWZ r .BUUIFX -JWJBO r %BO -VTUJH r .JDIFMF .BIM r /FJM .JMMFS r +PTIVB .PSSJT r %BWJE /BUBOPW "EBN 3 4BOEFST r .BUUIFX 4OZEFS r +PSEBO % 5PMNBO r .JDIBFM 7JDLFST r %BOJFMMF " 8BHOFS r (BCSJFM 8BTTFSNBO #FOKBNJO . ;JTFT r 4IJSZ ;PGOBU REX STEERING COMMITTEE CHAIR Alfonso Kimche REX STEERING COMMITTEE VICE CHAIR Lee Deutsch

Through UJA-Federation, you care for people in need, inspire a passion for Jewish life and learning, and strengthen Jewish communities in New York, in Israel, and around the world. www.ujafedny.org www.facebook.com/ujafedny

REX STEERING COMMITTEE 3PO #FJU )BMBDINZ r /PBI #JMFOLFS r 4BNVFM " #MBOL r "BSPO $BTEFO r 3JDIBSE $PIFO r 3PO $PIFO r #SJBO $PPQFS +FOOJGFS %FTTFS r +POBUIBO 'BMJL r #SJBO 'FJM r +BSFUU 'FJO r .BSD 'FMMT r 8JMMJBN 'SJFEMBOE r .JDBI (PPENBO r +VTUJO ) (SFFO +BTPO )BJN r &WBO )BLBMJS r +POBT ,BU[PĂ­ r 3PE ,SJUTCFSH r +BSFE ,VTIOFS r &ENPOE -FWZ r #SJBO 4 -JDIUFS r .JDIFMF .BIM .JDIBFM .BZ r %BOJFM .FSNFM r &SJD .FZFS r /FJM .JMMFS r +FĂ­ SFZ .PSPDI r #SJBO + /FJMJOHFS r 4IBOF /FVSJOHFS r +BTPO # 1BSLFS %BWJE 1FSFU[ r "EBN 4BCMPĂ­ r "EBN 3 4BOEFST r %BWJE 4DIPOCSBVO r .JDIBFM 4DIPOCSBVO r #FSOBSE 4DIXBSU[ 4IJNPO 4ILVSZ r 7MBEJNJS 4IOFZEFS r 4DPUU " 4JOHFS r .BUUIFX 4OZEFS r &ENVOE 4PMBSTI r +BSFE 4UBSS r %BWJE 7BMHFS .JDIBFM 7JDLFST r #SBN % 8FCFS r "OESFX . 8FJOCFSH r -JTB " 8FJOCFSH r +BSFE :BWFST r +POBUIPO :PSNBL +PTI ;FHFO r #FOKBNJO . ;JTFT

REX GALA

HONORING www.twitter.com/ujafedny

REX Premiere Observer AD 0879.indd 1

Justin H. Green

SAVE THE DATE: WEDNESDAY, APRIL 4, 2012 )BZT7FOUVSFT --$

For more information about REX, e-mail rex@ujafedny.org or call 1.212.836.1131.

0879 11/23/11 11:02 AM The Commercial Observer | November 29, 2011 | 11

concrete thoughts

Market-Moving Myths Despite conventional wisdom, misconceptions about the U.S. economy persist We are living in a time in which the fact. There are no direct relationrelationships between politics, ships to commercial real estate economics and real estate have presented here. These issues never been more interconnect- are more impactful on our gened. As I sit at my desk in Midtown eral economy (which, of course, Manhattan each day, I look at trickle down to our marketplace), proposed legislation presented but I thought they would be inby local, state and fedteresting to discuss eral legislators and try nonetheless, particto figure out how these ularly as we enter an new policies will impact election year. I’m sure my ability to sell propwe will continue to erties in New York City hear these day after and what the potential day as we get closer to ramifications will be on November 2012. our commercial real esThe three astate market. Sometimes, sumptions I want to connecting the dots is present today are: 1) easy and, at other times, Robert Knakal The U.S. is dependent it is a bit more difficult. on foreign oil from the It’s important to stay Middle East, 2) China current with what electholds most of our naed officials are proposing because tional debt, and 3) our national our markets can be significantly budget is fixable by agreeing to a altered by new laws, either di- balanced budget. rectly or indirectly.

Therefore, watching the news U.S. Oil Consumption and reading newspapers (or read- Hearing politicians say that we ing an electronic device) to look are dependent upon oil from the for indications of new policy have Middle East is enough to make become even more important your head explode. The U.S. conthan in the past. One of the most sumes 19.1 million barrels of oil interesting things to observe is per day. Guess where more than the endless stream of soundbites half of that comes from? Yes, the that emanate from legislators on United States. More than 9.7 milboth sides of the aisle. Each side lion barrels (50.8 percent) comes makes some arguments that are from domestic sources. From outcoherent and others that are ab- side of the U.S., we receive 2.3 surd. What can be comical at million barrels per day from our times are the assumptions made neighbors to the north. Twelve by some politicians that bear no percent of our total daily oil conrelationship to the facts. The folks sumption comes from Canada. who are responsible for shaping This is more than double the the direction of our future can at amount we get from anywhere times be misinformed or, simply, else. From the Middle East, we uninformed. get about 200,000 barrels from This week, I would like to review Kuwait (1 percent), 415,000 barthree assumptions that are regu- rels from Iraq (2.2 percent) and larly presented to U.S. citizens as about 1.1 million barrels from givens despite having no basis in Saudi Arabia (5.7 percent), which

12 | November 29, 2011 | The Commercial Observer

is our largest supplier in the region. It is noteworthy that we get almost as much from Nigeria, which supplies us with over 1 million barrels per day (5.2 percent).

Of the 19.1 million barrels we use per day, the U.S. Energy Information Administration says that 80 percent of that, more than 15 million barrels, goes into cars, trucks and planes. Clearly, we need to transport ourselves and our goods more efficiently. Presently, the average fuel efficiency of all vehicles sold in America is 22.5 miles per gallon. CAFE standards are slated to improve this number to 35.5 by 2016 and, this past July, the president announced a groundbreaking agreement with 13 major automakers to improve the standard to 54.5 by 2025. If

this actually occurs, it could cut our consumption down to 10 million barrels per day, which could easily be accommodated by the U.S. and Canada.

Notwithstanding the potential consumption savings from efficiencies, our long-term solution in this area could be closer to home than we may think. The American Petroleum Institute claims that an additional 10 million barrels per day could be produced in North America. This initiative would produce 1.4 million new jobs and generate an estimated $800 billion in government revenue by 2030. The only thing standing in the way of this is proper government cooperation. For our economy, it is critical to remember that the price of fuel

is reflected in the cost of almost everything we purchase.

China and Our National Debt How many times per day do we hear that we are selling ourselves out to China, which is “buying all of our Treasuries”? I have heard several politicians say that we “owe our future to China.” There is no doubt that our national debt is massive and growing rapidly.

Today, it is over $15 trillion dollars and is rising by about $50,000 each second of every day. Seventy percent of this debt is owed to U.S. citizens. The largest holder of our debt is the Social Security Trust Fund, which is used by administration after administration as an ATM. Presently, there is about $2.67 trillion owed to the

fund, which represents about 19 percent of our debt. The Federal Reserve Bank is the second largest holder of our debt, clocking in at $1.63 trillion, or 11.3 percent.

While foreigners hold about 30 percent of our debt, China, the largest of all foreign holders, holds $1.16 trillion, or about 8 percent of the total. This figure represents about only one-quarter of the debt held by foreign entities. Japan holds nearly as much with $912 billion, or about 6.4 percent. For some perspective, U.S. households (which include hedge funds) hold about $960 billion, or 6.6 percent of the total.

The bottom line with respect to our debt is that we owe most of it to ourselves. What is more important is the magnitude of the total debt and the implications it has on our future. This leads to the third of the assumptions we will take a look at, which is that a balanced budget will miraculously solve all of our economic problems.

The National Debt and Deficits Most Keynesian economists believe that the government stepping in to create demand, at times when recession kicks in, is appropriate economic policy. Many politicians also follow this school of thought. The downside to this policy is that it increases government debt and deficits. What most proponents of this approach fail to remember is that the time during which Keynes developed his theories was a time of cyclically balanced budgets. During good times there were surpluses that were saved so the government was able to step in and spend during down periods without substantially increasing debt.

Unfortunately, the U.S. government has been running constant deficits since 1969, making Keynesian policies less effective and, in most cases, harmful. Moreover, the term “reducing the deficit” is now thrown around like such a wonderful thing. Certainly it would be positive to reduce the deficit, as a deficit of any amount adds to the total debt. The fact is that if the deficit is any amount more than zero, we have to borrow and our national debt grows. This dynamic reduces the term “reduce the deficit” to a meaningless sound bite.

As mentioned earlier, our national debt is now in excess of $15 trillion. The impact this has on our budget (and I use the term loosely as we don’t actually have a budget and haven’t for a couple of years) is profound. To lend some perspective, the entire budget for NASA is $6 billion annually.

The budget for the Department of Transportation is $26 billion and the budget for the Department of Education is $31 billion. Because of our debt, we spend $454 billion

each year on interest payments alone. As our debt balloons, Congress appears unconcerned, treating debt as an abstraction, Monopoly money, someone else’s problem.

Our spending addiction and massive debt, and both sides of the aisle are guilty, have caused annual budgets to grow dramatically. When George W. Bush became president, the entire federal budget was $1.2 trillion. By the end of his second term, it was $2.9 trillion. Today, there is no budget but spending for FY2012 is scheduled to be $3.6 trillion.

Revenue is scheduled to be $2.3 trillion, hence the $1.3 trillion deficit. Think about that. We will

spend 57 percent more than we take in.

The scary thing is that in addition to the debt, there are massive unfunded liabilities in Social Security, Medicare and Medicaid that are not included in the published national debt data. These programs are vexing societal enigmas and are accurately referred to as the “third rail of U.S. politics.” Depending upon which report you read and the accounting method used, these unfunded liabilities total anywhere from $50 trillion to $116 trillion, mainly due to the patently unsustainable nature of the programs. And they are unsustainable regardless of how high taxes are raised.

The ugly realities are starting to be felt as, in August 2010, Social Security began paying out more than it took in for the first time and is on track to have a zero balance by 2032. Similar fates await the other programs and tangible action is needed, but is not likely to occur.

The only way to fix our longterm budget problems is to address these programs with fundamental changes. This, or a subsequent, Congress needs to show courage, wisdom, honesty and vision. It won’t be easy but this is necessary. Many European countries hid their heads in the sand for decades and now they are finally taking action. Retirement

ages are rising, contributions are increasing and the rules of the game are changing. Why? Because without them bankruptcy is all that is left. The U.S. has an opportunity to address these issues voluntarily. Many European countries have no choice. Let’s hope we make changes before we are in the same predicament. rknakal@masseyknakal.com Robert Knakal is the chairman and founding partner of Massey Knakal Realty Services and in his career has brokered the sale of more than 1,175 properties having a market value in excess of $7.8 billion.

The Commercial Observer | November 29, 2011 | 13

14 | November 29, 2011 | The Commercial Observer

The Commercial Observer | November 29, 2011 | 15

the lobby

William Sandholm

Mr. Horowitz

Mr. Schmerzler

Mr. Soutendijk

Mr. Finney

Mr. Katcher

Mr. Murphy

BY JOTHAM SEDERSTROM

tamin Shoppe, has been named executive director.

Mr. Schmerzler, who joined Cushman’s Retail Services division in 2005 and has represented Mango, Associated Supermarkets and Omega, has been named executive director.

Mr. Soutendijk, who joined Cushman’s Retail Services division in 2004, has been named senior director.

Mr. Finney, who joined the firm’s Midtown office in 2007 and has participated in the closing of approximately 1.5 million square feet of leasing transactions, has been named director.

Mr. Katcher, who joined the firm’s Midtown office

in 2003 and was named the Real Estate Board of New York’s “Most Promising Commercial Salesperson of the Year” in 2006, was promoted to director.

Mr. Berke, who joined the firm’s Midtown office in 2007 and who has handled clients in the fashion, financial services, construction, accounting and media industries, was named associate director.

Mr. Farooq, who joined the firm’s Midtown office in 2007 and has represented Major League Soccer and the Bank of Tokyo Mitsubishi, has been named senior associate.

Mr. Mayeske Jr., who joined the firm’s Midtown office in 2006 and previ-

In an end-of-the year treat, Cushman & Wakefield has promoted 12 of its brokerage professionals, the company announced earlier this month.

Jared Horowitz, Alan Schmerzler, Steven Soutendijk, Clark Finney, Jamie Katcher, Rory Murphy, Willard Overlock, David Berke, Jon Mayeske Jr., Diego Rodino Di Miglione, Ethan Silverstein and Omar Farooq were all promoted, according to a Nov. 18 release.

Mr. Horowitz, who joined the firm’s Midtown office in 2001 and has since represented clients such as JP Morgan Chase and the Vi-

To purchase a subscription to The Commercial Observer, please call 212.407.9331 16 | November 29, 2011 | The Commercial Observer

the lobby

Mr. Overlock

Mr. Berke

Mr. Mayeske, Jr.

Mr. Di Miglione

Mr. Silverstein

Mr. Farooq

ously served as assistant vice president at RFR Realty, has been named associate director.

Mr. Murphy, who joined Cushman’s Downtown Manhattan office in 2007 and was among The Commercial Observer’s “20 to Watch in 2012” earlier this year, was promoted to associate director.

Mr. Overlock, who joined the firm’s Downtown office in 2006 and has worked for clients like Proverian Capital and New Mainstream Capital, was named associate director.

Mr. Rodino Di Miglione, who joined the firm’s Midtown office in 2007 and has worked to expand Cushman’s relationship with

the Italian and European money markets, has been named associate director.

Mr. Silverstein, who joined Cushman’s Midtown office in 2007 and whose responsibilities have included new business development and tenant and agency representation, has been named associate director.

at Mihai Radu Architects, will be tasked with designs for Bam Architecture’s current and future clients.

Darwen Hinton, a 25-year-old former health promotion team leader at Thagard Health Center, will now serve as an interior designer at BAM, specifically for health care groups.

“In this challenging economy, it is especially pleasing to note our consistent growth by announcing another increase in the size of our staff,” said Adam Cole, a principal at BAM. “This reflects the confidence of our clients in our business model for how a 21st-century architecture firm should be run.”

­­­­­­———————————— Bam Architecture Studio, a firm specializing in designs for health care, research and corporate clients, has added an architect and interior designer to its staff.

Anahita Rouzbeh, a 28-year-old native of Iran who most recently worked

To advertise in The Commercial Observer, please contact Robyn Reiss, 212.407.9382 The Commercial Observer | November 29, 2011 | 17

Postings landfill-ville Last week, the Center for Urban Real Estate, a new research group at Columbia University, unveiled a proposal to connect Lower Manhattan to Governors Island with millions of cubic yards of landfill, an idea vaguely reminiscent to what developers had in mind when they laid landfill across the southwestern tip of Lower Manhattan to create Battery Park City 35 years ago. With those ideas in mind—one real, another imagined—The Commercial Observer asked real estate experts and land use wonks for other ways for using landfill to create new neighborhoods in the five boroughs. Below, a mixed bag of existing and merely fantasized ways for sprinkling landfill across the city.

Jamaica Bay Last year, city officials announced plans for revitalizing the Jamaica Bay landfill as a nature reserve using, of all things, more landfill, thanks in part to a Department of Environmental Protection effort dating back more than a decade to turn dumps in the area into beautiful park.

Although the revitalization will cost more than $200 million, the effort, which involves using landfill for new habitat creation, is being hailed as a major conservation achievement by local residents and ecologists.

Parking Barge With an eye toward reducing unsightly parking lots that mar Manhattan’s landscape, Urban Land Institute executive director John Parkinson suggested the construction of a series of parking lots all across the Hudson River and East River, presumably with bridges to Manhattan, that would subsequently allow for new development sites all across the borough where lots once operated. “If one were to look at the city broadly speaking, a lot of what city planning has been looking into, from a private perspective, is where real opportunities are in parking,” said Mr. Parkinson.

“In the Flatiron district, for example, there’s a double-wide lot with seven subway stops within 100 yards of the thing.

Instead of operating those in Manhattan, why not develop green parking lots from landfill?”

Battery Park City As much as 1.2 million cubic yards of soil and rock excavated during the construction of the World Trade Center towers was used to create an area bounded on the east by West Street that now boasts more than 10,000 mostly upper-middle-class residents living across the manmade, 92-acre neighborhood. “I can attribute the spectacular success of Battery Park City to bringing residents, visitors and workers to the waterfront on the landfill that was adjacent to Battery Park,” Philip Pitruzzello, the former president of the Battery Park City Authority, told The Commercial Observer. “People and parks were put out by the water’s edge and that’s part of the reason for the spectacular success.”

Lolo Adding to the hodgepodge of creatively named neighborhoods to sweep

New York City over the past decade or so (think Dumbo and Nomad for example), Lolo refers to the area just below Lower Manhattan, technically the Upper New York Bay, and stands for “Lower Lower Manhattan.” As envisioned by the Center for Urban Real Estate, the new neighborhood would connect Lower Manhattan to Governors Island and, over the course of 20 to 30 years, create 88 million square feet of development while generating $16.7 billion in revenue for New York City.

18 | November 29, 2011 | The Commercial Observer

the sit-down

The Non-Playing Captain Murray Hill Properties’ president of brokerage services reveals details on the firm’s upcoming Fund V and weighs in on plans to turn his brokerage division over to the agents In early 2010, David Greene accepted a promotion as president of brokerage services at Murray Hill Properties. Since then, the former broker, 47, has expanded the company’s brokerage division from 18 brokers to 34, overseen the origination of an upcoming global fund and acted as a self-described non-playing captain to his team of agents.

Mr. Greene sat down with The Commercial Observer to discuss the new fund and a tentative strategy to turn over Murray Hill Properties’ brokerage division to the brokers.

BY JOTHAM SEDERSTROM The Commercial Observer:

By July 2010 Murray Hill had originated approximately $265 million in high-net-worth individual funds, all of which were oversubscribed. Since then, have more funds been created?

Mr. Greene: What’s happening now is, you’re correct, Funds I, II, III and IV are fully subscribed.

We’ll be coming out shortly with Fund V. It’s aimed at a different group. The first four funds basically were high-net-worth individuals, and many of those individuals went from fund to fund to fund. We hit the market at a fortunate time.

What distinguishes Fund V from the previous four?

Fund V is a very different fund.

It’s really more of a global fund that we’re looking at in terms of who we’re attempting to attract. And the perfect example is probably a sovereign wealth fund or a pension fund, and that could be anywhere.

It could be in Asia, it could be in London. It could be pretty much anywhere all over the world.

What’s the status with Fund V? How soon will it be available to investors?

Five will be coming out soon.

I’m legally bound to not give too much information about it, but basically we’re getting ready to come out with it. It’s basically aimed at a different group, more worldwide.

We really believe that outside America, in many places there’s a lot of difficulty that some of the

sovereign wealth funds are having. For instance, if you’re in the Middle East, or if you’re in Japan or somewhere else like that, there’s a lot of difficulty locally—for different reasons—and we feel that for the most part New York is about as safe a haven as you can get to in terms of investment quality.

buildings over there in that area.

Murray Hill Properties has, in the past, considered turning its brokerage over to the brokers. Is this an ongoing discussion at the firm, or has it since come off the table?

We had a time at Murray Hill where we were going off in different directions. We couldn’t decide whether we wanted to have the brokerage owned by the brokers or what.

Prior to 2001, when Murray Hill’s first fund was originated, how were you financing deals?

Basically, it was similar, but we weren’t a fund. We’d create limited partnerships and we would go in that direction. It was less formal.

Does it involve the same amount of time and personnel?

Well, it used to be that the brokers also could help bring in investors and, perhaps, if they were successful, they might see some compensation on a deal. Basically, what’s changed is, … we have now in asset acquisition a number of members. We have three guys, including Norman [Sturner], who that’s all they do. They’re deal junkies. They’re out looking for deals. They’re out trying to raise money. Part and parcel to that is you have all the brokers, and you also have the asset management side here, which is just down the hallway, and, of course, we have project management. So, literally, we would find a building we were interested in. We have very narrow management here. Anybody needs anything done immediately, it’s basically within a minute or five minutes or 10 minutes, you can pretty much have an answer. It’s a matter of getting in front of the right person. That’s it. And if we found a building that was intriguing to us we could turn it around in a matter of a couple days and we were ready to roll.

When was the last time Murray Hill Properties turned a deal around in a matter of days?

Just this morning I received an email on a property that was out there from a major broker who was handling a building in Manhattan, and the email was: ‘Building’s off the market, preempted, no contingencies.’ And just like that, another

When was this?

This was around four or five years ago, I’d say. It was back when a lot of senior brokers started to say, ‘I want to be an owner of a building. I’m gonna go put together a fund and see if I can buy buildings.’

Some of them were successful and others never got there.

So, anyway, there was a time when Murray Hill was thinking that Murray Hill would sell the brokerage piece to some of the brokers, but that’s long past.

Although, I can tell you, since it’s on the record, that this discussion is coming back because I think it’s something that belongs on the table to talk about.

building goes off the market—and that’s before all the bids came in and the beauty contest and all that.

ner building. It’s got great-credit tenants in it. But we get a lot of traction with the building.

What’s the latest on 1180 Avenue of the Americas?

That’s actually a building I was the broker on for a while. I was on the building up until my new position. We hired a terrific broker from the outside and he took over that building. Prior to that, there was a lot of talk about buildings in general that might be having some difficulties. As owners with our partners the Carlyle Group, we never missed a mortgage payment—ever.

But now, we’ve basically recapped the building. The only thing that’s happening in the building going forward is there’s some small vacancy that we’re leasing up right now. We’re not looking to reposition the building in some stark, different manner. It’s a cor-

Murray Hill hired former NAI global executive managing director Gil Robinov this year. Does that mean the firm will be putting a greater focus on the UN submarket?

Gil actually worked here years ago. Gil is one of those guys who also is a deal junky, and he has a niche that nobody else can come close to.

He has done more deals with UNrelated tenants and governments than anyone. It’s probably five or 10 times more than anyone else—it’s probably even more than that. And Gil developed that basically on his own. Everybody in that entire niche knows him and he’s the go-to guy, but it’s probably more than a hundred governments have done deals with him, and he controls some

I bet brokers will be happy to hear that.

A number of brokers already know about it.

You work very closely with Norman Sturner and, I imagine, know him well. He strikes me as someone who rarely takes no for an answer. Is that safe to say?

He doesn’t really take no, but I will say one thing. Certainly you can go to any one of the brokers at Murray Hill to talk about what has happened here in the last year or so. A lot of it comes from Norman and [other principals]. They have empowered me to do what I want to do, and what I mean by that is, clearly, 95 percent of whatever I ask for they’ve said yes to.

What was the 5 percent they said no to?

I don’t know. I guess I’m just hedging. Maybe a bigger expense budget. jsederstrom@observer.com

The Commercial Observer | November 29, 2011 | 19

LEASE OF THE WEEK

The Teching of Chelsea 6-4-1 On the heels of a lease with Meebo, CBRE team lassos Infor for another 42,000 feet at 641 Avenue of the Americas

By Dan Geiger

H

ired to lease 641 Avenue of the Americas earlier this year, Peter Turchin, an executive at the real estate services firm CBRE, quickly knew what potential takers the 170,000-square-foot building could appeal to.

The property is located at the edge of Chelsea, a neighborhood that in recent years has attracted an influx of technology, Internet and social media-related firms.

Earlier this year, the area’s rise as the focal point of what is being dubbed a burgeoning “Silicon Alley” in Manhattan was cemented by Google’s $2 billion acquisition of 111 Eighth Avenue, a nearly three-million-square-foot property between 15th and 16th streets where the Internet search and software company bases its New York operations.

Still, Mr. Turchin said he didn’t want to rest on the neighbor-

hood’s credentials alone.

When he, and his CBRE colleague Gregg Rothkin, took tenants on tours of 641 Avenue of the Americas, which had several vacant floors totaling tens of thousands of square feet, he gave them the usual slide-show presentations and promotional materials detailing both the building’s and the neighborhood’s features and amenities. But to really drive home the neighborhood’s transformation in recent years, Mr. Turchin went a step further.

“Every time I’ve ever done a space tour in the past, you always take the tenant down to the lobby and it’s there where you shake hands, say thank you and head off on your way, but not on this assignment,” Mr. Turchin said. “As part of every tour we marched tenants outside and across the street to the Limelight.”

The Limelight Marketplace, which is kitty-corner to 641

20 | November 29, 2011 | The Commercial Observer

Avenue of the Americas across 20th Street, features a collection of high-end boutiques and food shops that Mr. Turchin said immediately gave prospective tenants a sense of the neighborhood’s flare.

“You have this church and a lot of people will walk by and not know what’s on the inside, but when we showed tenants what was beneath the surface here, it brought home a lot of what’s gone on in this neighborhood,” Mr. Turchin said.

Mr. Turchin and the CBRE team’s approach produced success. Working with Mr. Rothkin, Mr. Turchin bagged a deal with the social media software company Meebo in September to have the firm fill the eight-story building’s roughly 22,000-square-foot seventh floor.

In recent weeks, Mr. Turchin and his team reeled in an even bigger software company, Infor,

which took 42,000 square feet on the building’s entire third and fourth floors for rents in the $30s per square foot.

With more space on the table in that transaction, Mr. Turchin felt like he had to do more than sell the tenant on the surroundings. Indeed, Infor, according to Bruce Mosler, a brokerage executive from Cushman & Wakefield who headed its search, was cruising between Midtown South and Midtown, unsure of which location it would choose and unconvinced at the outset that either was better than the other for its needs.

“There’s two things to getting a deal done,” Mr. Turchin said. “You have to sell a tenant on a neighborhood but also the building.”

In this case, a clever investment by 641 Avenue of the Americas’ owner, Atlas Capital Group, helped push the deal forward.

The pursuit of Internet and tech tenants may have had some landlords scrambling to update key infrastructure such as a building’s electrical capacity or Internet connectivity. At 641 Avenue of the Americas, a historic office property that was built in 1902, those would have been expensive upgrades. Recognizing this, Atlas, Mr. Turchin said, was determined to be more focused.

“Atlas had replaced some of the

windows in the space that Meebo ended up taking and Meebo really responded to that upgrade,” Mr. Turchin said, noting that many tech firms don’t need any more infrastructure than a conventional office user.

The landlord, with Mr. Turchin’s support, went on to swap out all the old wooden windows in the property with all new window modules.

“It’s not the kind of upgrade you notice until it’s been changed,” Mr. Turchin said. “It was a subtlety that really was a huge thing. When you saw the space with the new windows, it just looked completely different.

Light was flooding in.”

The CBRE team scrambled to find ways to highlight and enhance the upgrade, asking that walls be knocked down in the vacant spaces that obstructed the building’s perimeter and cut off the majority of the space from the abundant light that was now flooding in.

“Atlas was incredibly responsive,” Mr. Turchin said. “They moved very fast. When a tenant is looking to take a space, they’re moving fast and you need a landlord who can move accordingly.

At 641 Avenue of the Americas, the window decision was a quick decision for Atlas. When we needed a wall torn down, they had the workers in that day practically starting on the work to get it done as soon as possible.”

After seeing the building in a better light—literally—Infor began to warm to the prospect of being in Chelsea.

“We had looked at lots of different alternatives in Midtown,” Mr. Mosler said, noting that the search process was a learning experience for Infor’s top executives because the firm was based in Atlanta and 641 Avenue of the Americas will be its first office in the city. “They saw the neighborhood as a place that was going to be conducive to the talent pool they want to attract.”

The deal was also attractive to Infor because it allows the company to stage its growth. According to the terms of the transaction, the company will take 31,500 square feet of its space immediately and then grow into the remaining 11,500 square feet after a given amount of time.

“It gives them a lot of flexibility to grow,” Mr. Mosler said.

For Mr. Turchin, the deal was a gratifying lesson in being focused.

“That’s what a good landlord does,” Mr. Turchin explained.

“You can think of a thousand things to do to a building. The key is selecting the two or three things that the tenants are really looking for.” dgeiger@observer.com

power broker Jonata Dayan of Winoker Realty

All in the Family

BY DANIEL EDWARD ROSEN

W

hen the Elizabeth Foundation for the Arts sought to sell a block of space at its Midtown building in 2009, the nonprofit turned to a straight-talking broker at the Winoker Realty Company whose talent for converting condo space into offices had long ago cultivated her a reputation for success in the real estate industry.

The Elizabeth Foundation was looking to sell three floors and a retail space at 323 West 39th Street to raise money to pay off some of its mortgage while funding its thriving arts programs. The foundation had purchased the 52,573-squarefoot building in 1999 under the assumption that owning, rather than renting, has its benefits.

“Our [message] is, why should you pay your landlord’s mortgage if you can pay your own,” said Jonata Dayan, the Israeli-born, Flatbush-bred broker who represented the Elizabeth Foundation in a 2009 transaction.

Owning an office space instead of renting often protects tenants from sudden rental spikes and serves as an equity investment for the tenant while also offering the option of refinancing, selling or leasing out the space when the owner needs income, said Ms. Dayan, 60, who founded Winoker Realty’s office condominium and co-op division in 2005.

Ms. Dayan and her group eventually sold more than 10,000 square feet of space on the 11th and 12th floors of 323 West 39th Street for $4.85 million to Michael Brandon Enterprises, a fashion company.

For the Elizabeth Foundation, it was a healthy profit. For Ms. Dayan, it was proof that her mother-and-sons team—Adam Ben-Dayan, 35, and Jonathan Ben-Dayan, 26, both work for Ms. Dayan—could co-exist just as well in the work realm as they regular-

ly do in the family.

“There is a vested interest,” said Adam, who joined the firm in 2007. “Everybody wants to see the others do well, especially when it’s your family.”

Ms. Dayan and sons are currently marketing another floor and the retail space for the Elizabeth Foundation.

Together, the team has handled co-op and condo sales deals that have brought the joys of ownership to companies like Mondani Accessories and Titanium Marketing. Meanwhile, she helped the software developer StellaService buy an 11,294-square-foot office condo for $5.08 million.

And with the increases in the property value—5 percent per year, in her optimistic opinion— tenants like StellaService are spared the intemperate price increases of a long-term lease.

“With all the increases generated by the landlord, the [building’s] owner is way ahead of the tenant,” said Ms. Dayan of office renters.

When a company owns its office space, it should look at it as a longterm investment, not something to be flipped for a profit in five years, cautioned Ms. Dayan during an interview earlier this month.

“If you’re in it for the long haul and you’re looking at a 10-year lease, then buy,” said Ms. Dayan.

And in the event a company needs to reposition, she says, it can lease or sell the floor, which, in the end, is easier than subleasing, she added.

“Most of these leases are pretty iron-clad, and if you try to get a sublease approved by a landlord and the landlord has three or four empty floors, you will find that it will be much harder to get that approval for the sublease than you will to sell the floor,” she said.

While a condo association has the first right of refusal for the sale of a company’s office space, it

then will have to either rent or buy the floor from that company.

“So you’re not in a bad position, or any worse position than you would be with a long-term lease,” said Ms. Dayan.

For renters, the disadvantages of not owning space are plentiful: the residual value of a company’s lease is nil, and if it’s signing a long-term lease, it needs to know— and be confident in—growth projections.

For owners, meanwhile, negotiating the lease is a one-time ordeal while the renter’s fear of reoccurring rent hikes fades away for condo owners. Additionally, she added, real estate taxes for owners rarely fluctuate.

For Ms. Dayan, who spent 30 years working with her husband, Eli Dayan, in fashion, assisting businesses in their search for permanent space is like giving tenants the chance she and her husband never had while they were leasing showroom space on Broadway in the 1980s.

A graduate of Erasmus Hall High School—which counts Barbra Streisand and the late longtime Oakland Raiders owner Al Davis as alumni—Ms. Dayan handled the business operations for Bon Jour Jeans, a famed jeans brand that her husband owned.

Because Bon Jour needed to have office space in the middle of the financial district, buying office space was not an option. The couple had always dabbled in real estate investments—her brotherin-law is a developer—and when she was at the end of her tether with the fashion industry in 2000, it was Eli who suggested she go into real estate.

“He’s the one who inspired me and thought I’d be good,” she recalled. “I thought, ‘I don’t know, I’ve never sold anything.’”

She joined Winoker in 2001, a week before 9/11 (she witnessed the events unfold while attend-

ing a broker’s breakfast at 1450 Broadway).

Working as a “lowly sales associate” was a tough adjustment for Ms. Dayan. But she appreciated the entrepreneurial nature of being a broker, she said.

“I think it’s a plus,” she said about acting essentially as an independent contractor. “I think brokerage is a very self-disciplined business.”

Then, her husband suggested that Ms. Dayan find a niche in real estate.

“He said to me, ‘You really can’t be running and competing with all these 25-year-olds to try and lease space. You’re going to have to find some kind of caveat,’” she said.

It was in 2005 that she launched the commercial condominium division, where she worked with fashion firms like Felina Lingerie to find new office space—they eventually purchased space at 12 West 32nd Street—that was con-

veniently located in the fashion district.

“Fashion tenants have been buying because, unlike the 1980s, properties are on the market now that are within the location where fashion tenants need to be,” said Ms. Dayan.

She brought on Adam in 2007 after he spent seven years at Met Life. Working with other brokers had proven difficult because they would often leave for greener pastures soon after being trained and receiving part of her commission.

As of 2010, the trio has represented sellers and buyers in approximately $58 million in transactions, with more than 40,000 square feet of office condo space included in the mix of deals.

With Adam and Jonathan, who joined Winoker in 2009, Ms. Dayan has team and family sharing a tight bond and a love for their new business. drosen@observer.com

The Commercial Observer | November 29, 2011 | 21

jackie snow

The mother-in-chief of Winoker Realty’s six-year-old Office condominium and co-op division has helped propel the city’s commercial condo craze

ThE Chart Lease Beat reflects deals closed or announced from November 21st to November 25th.

Information on leases, sales and financing deals can be sent to Dan Geiger at Dgeiger@observer.com

OFFICE

Sq. Feet

Tenant

Landlord

BROKERS

350,000 square feet

Credit Agricole

Paramount Group

Studley’s chairman and CEO Mitch Steir represented Credit Agricole in the deal. Ted Koltis, Paramount’s in house leasing chief, repped the landlord in the deal.

330 Madison Avenue

222,000 square feet

Guggenheim Partners

Vornado Realty

Peter Hennessy of Cassidy Turley represented Guggenheim. Frank Doyle of Jones Lang LaSalle represented Vornado.

1633 Broadway

90,000 square feet

DG Fast Channel

Paramount Group

Stephen Siegel of CBRE represents Paramount at 1633 Broadway.

80,000 square feet

Human Rights Watch

Malkin Properties

Human Rights Watch renewed its 45,783 square feet of existing space and grew by 25,000 square feet in the deal. Newmark Knight Frank executive Brian Waterman represented HRW in the deal.

Newmark brokers William Cohen and Ryan Kass represented Malkin Properties.

11 Penn Plaza

60,000 square feet

Macy’s

Vornado

112 West 34th Street

50,000 square feet

Regus

Malkin Properties

A CBRE team led by Mark Ravesloot handled the deal for Regus. Cushman & Wakefield broker Mitch Arkin heads the agency team at 112 West 34th Street. Rents in the 15-year were in the $40s per square foot.

31,500 square feet

Infor

Atlas Capital Group

Bruce Mosler and Adam Rappaport of Cushman & Wakefield represented Infor. Peter Turchin and Gregg Rothkin of CBRE represented the landlord.

519 Eighth Avenue

16,000 square feet

Skanska Railworks

Kaufman Organization

Steven Kaufman and Barbara Raskob, executives at the Kaufman Organization, were the in house leasing agents for the owner in the five-year deal. Ted Spiegel, a principal of Spiegel Real Estate, repped Skanska. Asking rent for the space was in the mid $30s per square foot. The deal was originally reported on Nov. 2 by The Commercial Observer.

160 Fifth Avenue

15,173 square feet

The Simons Foundation, Inc.

RFR Realty

Peter Hennessy and Wendy Miller of Cassidy Turley repped The Simons Foundation. Jones Lang LaSalle executives Alexander Chudnoff, Mitch Konsker, Jonathan Tootell and Matt Ginberg represent RFR at the property.

75 Rockefeller Plaza

13,900 square feet

Raines International

Time Warner (sublandlord)

9,715 square feet

Jen Kao

Trinity Real Estate

Savitt Partners’ Michael Schoen represented Jen Kao, a fashion designer. Rent in the deal was $45 per square foot.

8,886 square feet

Falcon Edge Court, LLC

N/A

Alexander Chudnoff and Dan Turkewitz of Jones Lang LaSalle represented Falcon. CBRE executives Paul Amrich, Sacha Zarba and Neil King represented the landlord.

1301 Avenue of the Americas

Empire State Building (350 Fifth Avenue)

641 Avenue of the Americas

10 Hudson Square (160 Varick Street)

660 Madison Avenue

Macy’s expanded its presence in the deal to about 600,000 square feet in the building. Vornado’s in house leasing executive Glen Weiss brokered the transaction.

Seth Hecht and Robert Tunis of Colliers International repped Raines. Robert Martin, a broker with Jones Lang LaSalle, handled the sublease for Time Warner. Asking rents for the space were in the $40s per square foot.

To advertise in The Commercial Observer, please contact Robyn Weiss, 212.407.9382 22 | November 29, 2011 | The Commercial Observer

calendar Tuesday, November 29 Data centers, those windowless buildings teeming with Internet servers, massive cooling and heating systems, and, alas, very few human beings, have been recognized as one of the rare real estate success stories following the 2007 mortgage crisis and economic downturn that followed. More than 25 investors, owners, developers, brokers and technology executives will be on hand during a so-called data server summit that will look toward the rapid evolution of one of the more recent real estate sectors to surface in the tristate area. Greater New York Data Center Summit, McGraw-Hill Conference Center, 1221 Avenue of the Americas, second floor, 7:30 a.m. to 1:30 p.m.; contact Ronnie Niederman at 212-8733484 for more info or to register.

East Side will be explored by the Municipal Art Society during a time of the year when frigid weather encourages keen pedestrian strategies along the city’s icy streets.

Municipal Art Society “Keeping Off Midtown Streets: East Side” walking tour, meet at the NYC Transit Gallery & Store, shuttle passage, Grand Central Terminal, 11 a.m.; visit www. mas.org for more info.

Sunday, December 4

Brian Tolle’s Irish Hunger Memorial, Craig McPherson’s 318-foot Harbors of the World mural and Ken Smith’s Eleven Tears will all be illuminated when the Municipal Art Society tours the public art of Lower Manhattan. Municipal Art Society “Public Art in Lower Manhattan” walking tour, meet at the northeast corner of Chambers Street and West Broadway, outside Starbucks, 10 a.m. to 1 p.m.; visit www.mas.org for more info.

The New York Commercial Real Estate Women will let down its hair next Tuesday during its 10th anniversary holiday celebration, a shindig that promises to mix bubbly with business within the cool confines of the Columbus Townhouse. New York Commercial Real Estate Women 10th annual holiday celebration, Columbus Townhouse, 8 East 69th Street, 6:30 p.m.; visit www.nycrew.org for more info.

Monday, December 5

Wednesday, November 30

From rooftops to utility-scale programs, solar power is everywhere—except in your building. As such, join Cleantech Corridor and an array of experts in a seminar that will touch on solar power assemblage and current legislation to bring solar power to New York City. Cleantech Corridor solar energy seminar, New York Institute of Technology Auditorium, 1871 Broadway, 5:30 to 8:30 p.m.; visit www.cleantechcorridor.eventbrite. com for more info.

When considering real estate ethics the Ten Commandments are a great reference point (thou shalt not kill, thou shalt not steal, etc.), but for more specific information drop by the Mendik Education Center this Wednesday when the Real Estate Board of New York will host its ethics course for new commercial real estate brokers. Real Estate Board of New York “Commercial New Members Ethics Course,” Mendik Education Center, 570 Lexington Avenue; email Desiree Jones at djones@rebny.com for more info.

Thursday, December 1

Michael Norton of Tishman Speyer will host the 30th iteration of what has become a can’tmiss charity event, the annual Metropolitan Luncheon. The benefit, which has raised approximately $10 million since 1981, benefits families struggling with substance abuse.

Outreach Annual Metropolitan Luncheon, Cipriani 42nd Street, 11:45 a.m. to 12:45 p.m.; contact Marsha Radulov at 718-847-9233, ext. 2310, or visit www.opiny.org for more info.

As much as anyone else living in New York, real estate builders and owners rely on the NYPD to keep the streets and their buildings safe from crime. As such, the Associated Builders and Owners of Greater New York will bestow the city’s head gunslinger, Ray Kelly, with its Public Servant of the Year award at its 101st annual dinner gala.

Associated Builders and Owners of Greater New York 101st annual dinner, Ritz Carlton Battery Park City, 2 West Street, 6:30 p.m.; call 212-385-4949 for more info.

Saturday, December 3

The public atriums, secret passageways, building lobbies and walkways of the Upper

The nation’s retailers, mall owners and commercial brokers will descend on Manhattan for two days of passionate shop talk when the International Council of Shopping Centers hosts Day 1 of its annual parade of trade events this year at the New York Hilton. International Council of Shopping Centers conference, New York Hilton, 1335 Avenue of the Americas, Dec. 5-6; visit www.icsc.org for a compete schedule of events.

Tuesday, December 6

Hard hats and soft bellies will gather, en masse, when the Greater New York Construction User Council hosts its annual winter gala. Greater New York Construction User Council winter reception, the Club, 2 Gold Street, 5:30 p.m.; contact Joel Park at 212-450-7300 or email him at jpark@bermangrp.com for more info.

NWE will host a mixer at El Patron Mexican Grill. NWE Consulting Group Real Estate Mixer and Food Drive, 6 p.m., El Patron Mexican Grill,194-01 Northern Boulevard, Flushing, Queens; email Evantz Saint-Gerard at evantz@yahoo.com for more info.

REBNY hosts its “Inside Secrets of Top Brokers” series next week with an eye toward reducing administrative tasks. Real Estate Board of New York Inside Secrets of the Top Brokers seminar, “How to Avoid Administrative Tasks and Do More Deals,” Mendik Education Center, 570 Lexington Avenue, 9:30 a.m.; email Desiree Jones at djones@rebny.com for more info.

Vornado’s Wendy Silverstein will speak at the next RELA event. Real Estate Lenders Association breakfast, the Yale Club, 50 Vanderbilt Avenue, 8 a.m.; visit www.rela.org.

The Commercial Observer | November 29, 2011 | 23

ThE Chart Lease Beat reflects deals closed or announced from November 21st to November 25th.

Information on leases, sales and financing deals can be sent to Dan Geiger at Dgeiger@observer.com

RETAIL

Sq. Feet

382 West Broadway

10,000 square feet

1211 Avenue of the Americas

Tenant

Landlord

BROKERS

Kamran Hakim and The Erno Laszlo brand signed a 10-year netlease of the entire building. The tenant will pay $1.5 milHenry Hay lion per year in rent for the space. Prudential Douglas Elliman retail brokers Faith Hope Consolo and Joseph Aquino brokered the deal.

Erno Laszlo Spa

News Corp. will take over 9,000 square feet of retail space formerly occupied by Charles Schwab.

The tenant will use the space to construct a studio. A Cushman & Wakefield team, Josh Kuriloff, Gene Spiegelman, David Tricarico and Mitch Arkin, represents Beacon at the property. Mary Ann Tighe, chairman of CBRE’s New York office and CBRE executives Kenn Rapp and Tim Dempsey represent News Corp.

9,000 square feet

News Corporation

Beacon Properties

10 Union Square East

4,600 square feet

Panera Bread Co.

Malkin Properties

Fred Posniak, an in-house leasing broker for Malkin, represented the landlord in the deal. Ripco broker Andrew Mandell repped Panera. Asking rents for the space are $250 per square foot.

694 Madison Avenue

1,350 square feet

Faberge

N/A

Beth Rosen and Zach Beloff of Robert K. Futterman repped Faberge. Newmark Knight Frank’s Jonathan Krivine repped Daum, the former tenant in the space, in assigning the lease.

Sales

Seller

Address

Sq. Footage

amount

Brokers

Andre Balazs Properties

Westport Capital Partners LLC Cooper Square Hotel, 25 Cooper Square, NY

n/a (145-key hotel)

$91 million

Eastdil Secured (seller)

Kushner Companies

John Zaccaro, Sr.

200 Lafayette Street

130,000 sq. ft.

$50 million

Robert Burton, Massey Knakal (seller)

Neil Dolgin, Kalmon Dolgin Affiliates (seller)

Berry Street Association

118 North 11th St., Brooklyn

135,000 sq. ft.

$16.4 million

n/a

Fifth Street Real Estate Company, LLC

EJ & P, LLC

50-02 Fifth Street, Long Island City

50,207 sq. ft.

$10.25 million

Pinnacle Realty, LLC

FINANCING Doubletree, Syracuse, NY; Hilton Downtown, Newark, NJ

Amount $120 million (refinancing Investcorp’s national hotel portfolio)

West 131st Street, New York, NY (355-unit, eight- $20.5 million (7-year term) story multifamily building)

Recipient

lender

Broker

Investcorp

HFF

Michael Tepedino, KC Patel, and Michael Gigliotti, HFF.

n/a

Meridian Capital Group, LLC

Moshe Majeski, Meridian Capital Group, LLC

50 Saint Andrews Place, Yonkers, NY

$10 million (10-year fixed rate loan)

n/a

Meridian Capital Group, LLC

Isaac Filler, Meridian Capital Group, LLC

28 Lamartine Terrace, Yonkers, NY

$6.25 million (10-year fixed rate loan)

n/a

Meridian Capital Group, LLC

Isaac Filler, Meridian Capital Group, LLC

Ninth Street, Brooklyn

$5.5 million (5-year fixed rate loan)

n/a

Meridian Capital Group, LLC

Max Herzog and Michael Diaz, Meridian Capital Group, LLC

Fifth Avenue, New York (20-unit, four-story multifamily building)

$2.6 million (5-year term)

n/a

Meridian Capital Group, LLC

Judah Hammer, Meridian Capital Group, LLC

Lexington Avenue, NY (11unit, five-story mixed-use building)

$1.95 million (5-year term)

n/a

Meridian Capital Group, LLC

Morris Diamant and Jacob Rochlitz, Meridian Capital Group, LLC

Gravesend Neck Road, Brooklyn, NY (68-unit, six- $1.3 million (10-year term) story co-op)

n/a

Meridian Capital Group, LLC

Jeffrey Weinberg and David Ostrov, Meridian Capital Group, LLC

24 | November 29, 2011 | The Commercial Observer

The Commercial Observer | November 29, 2011 | 25

THE PLAN 28 West 44th Street

When Cushman & Wakefield took over leasing responsibilities for APF Properties at the beginning of 2010, a brokerage team led by executive director David Rosenbloom wasted no time in rebranding the 15-year-old real estate company’s portfolio of Class B buildings and scouring the Plaza district for the best examples of existing prebuilt space. So when the company snapped up 28 West 44th Street this May, a strategy to reposition the 22-story, 370,000-square-foot asset with state-of-the-art turn-key offices was already in its earliest stages. Mr. Rosenbloom spoke with The Commercial Observer last week about what, exactly, convinced the Internet advertising sales firm to relocate in September from the Graybar building to 13,114 square feet at 28 West 44th, which the Cushman team renamed as the Club Row building this year.

In addition to the cubicles, the prebuilts also include what Mr. Rosenbloom called “one-onone rooms,” a small breakout conference area that, while not entirely new in Manhattan office culture, has gained prominence in recent years. “You used to see that in law firms all the time: Breakout rooms directly outside conference areas,” said Mr. Rosenbloom. “And, yeah, we’re starting to see that a lot more.”

Despite having a space that can already fit approximately 60 employees, the rapidly growing Internet company inked a deal with the Cushman team that gives them an option for 5,000 additional square feet on a floor that currently houses only one other tenant. “We created that space in the middle, but we don’t envision more than two or three other tenants on the floor,” said Mr. Rosenbloom.

sPeCIaltY Glass serVICes Vandalism RepaiR • ConstRuCtion sCRatChes FRosted Glass RestoRation GRaFFiti / seCuRity Film • solaR Film RestoRation, Refinishing & Maintenance seRvices

Marble • Metal • Glass • Wood

212-972-8847

www.surfacecareusa.com

EXPERIENCE

ATTENTION

26 | November 29, 2011 | The Commercial Observer

SERVICE

While less common in prebuilt spaces, independent air-conditioning systems have been a staple of customized offices for years now. In the case of 28 West 44th Street, however, the Cushman & Wakefield brokers chose to introduce dedicated airconditioning systems in each of the building’s turn-key offices, including in Invision’s new space.

“Those are tenant-controlled aircooled air-conditioining systems, and that gives them the ability to run air conditioning pretty much during extended hours on a very cost-efficient basis,” said Mr. Rosenbloom. “These people don’t punch a clock, and they’re going to be working long hours so it’s really more of a convenience for them.”

In designing the prebuilt space, which is identical in turn-key offices throughout 28 West 44th Street, Mr. Rosenbloom and his team strove to create a highly efficient floor plan that takes advantage of three corners of the asset. With Invision in particular, the space allowed for as many as 15 perimeter offices and conference rooms as well as plenty of space for employee cubicles. “And what’s even nicer is that it’s a very open collaborative environment because there’s glass all along those office lines, so it’s very open,” said Mr. Rosenbloom.

The Commercial Observer | November 29, 2011 | 27

28 | November 29, 2011 | The Commercial Observer