The Real Deal August 2014 by The Real Deal

Buyers’ brokers get snubbed

Ridgewood: new hipster haven

NY industry pros play politics in D.C.

Ben Shaoul talks superstitions

Pricey thank-you gifts for brokers

THEREALDEAL N E W YO R K R E A L E S TAT E N E W S

www.TheRealDeal.com

Vol. 11 No. 8 August 2013 $3.00

r o f s

g e t a a fl t d s e e R eal The best r commercial ,

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m 46 o o p b s t’ ead? e rk ah a e m l b C ou Y N s tr e Th ut i b

Shopping with SAC’s Steve Cohen The embattled mogul’s home-buying spree. p30

Top property managers

Biggest firms snap up rivals, cut costs to get ahead. p54

brokerages to work for

Where to find the top pay, perks and office culture. p34

Cheap common charges Which condos charge the lowest fees, and how they do it. p40

Huang out to dry

The most notorious developer in Queens gets banned. p38

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Highlights A U G U S T

REFLECTING PRESENCE

Cash is king — or is it?

No love for buyers’ brokers

Gearing up for Election Day

2 0 1 3

“Tech refis” can help homebuyers get a mortgage — even after the closing.

Representing buyers has always been a tough job, but now it’s tougher than ever. Real estate is a power player in New York’s upcoming primary.

Eliot Spitzer

the hunt 20 On Technology, advertising and media

firms are seeking more office space.

Peter Hennessy

As the only building officially on memorial grounds, the National September 11 Memorial Museum Pavilion must echo the somber dignity of its WTC environs while admitting thousands of visitors to its exhibits each day. To achieve these diverse goals, Snøhetta teamed with consultant Front Inc. to design an enclosure that both maximizes the building’s security and mirrors its placid surroundings. Through the changing days and seasons, it offers museumgoers a setting for reflection on the past while looking to the future.

Transforming design into reality

In their words

A day in the life of: Peter Hennessy

This month’s funniest and most insightful commentary about real estate.

The Cassidy Turley exec rarely sits down — in part because he gave up his desk chair.

Ridgewood rising Can this quiet Queens community become the next Williamsburg?

Steve Cohen

Shopping with Steve Just as authorities bring charges against SAC Capital Advisors, its founder goes on a real estate buying spree.

Beyond Holiday Inns in Brooklyn The number — and quality — of Brooklyn hotels is set to soar, thanks to nearly 20 new projects planned for the borough.

For help achieving the goals of your next project, contact the Ornamental Metal Institute of New York.

The best commercial firms to work for

Publisher of Metals in Construction 211 E 43 ST | NY, NY 10017 | 212-697-5554 | www.ominy.org

Which companies offer the best perks, benefits and all-expenses-paid vacations? To find out, The Real Deal surveyed more than two dozen major commercial firms.

Tommy Huang

Huang out to dry The notorious Queens developer may be banned from real estate, but problems at his projects live on. Architect: Snøhetta Photo: Snøhetta

6 2013 8 August October 2012www.TheRealDeal.com www.TheRealDeal.com

Common charges: how low can they go? A look at the condo buildings with the lowest monthly fees. www.TheRealDeal.com March 2012 00

Equal Housing Opportunity.

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PDE Real Deal April 2013 rev1.indd 1

3/29/13 5:39 PM

Highlights continued 44

Don Peebles

Playing politics in D.C.

SLANT ROUTES

Columbia University’s new field house, the Campbell Sports Center by Steven Holl Architects, is designed to be a team player with facilities that foster balance between the minds and bodies of student athletes in a range of sports. Inspired by the slanting lines of field-play diagrams, the building’s design relies on point foundations and a lightweight steel structure to achieve its diverse program on a sloped site. The university’s first new athletics building since the mid-1970s, Campbell forms a gateway to the revitalized Baker Athletics Complex, and a new game plan for sports at Columbia.

NYC real estate pros are known for lobbying and making campaign donations. But they also lend expertise to governing on the national stage.

Red flags for real estate The mood in New York City real estate right now is buoyant after a year of big-ticket deals. But some experts are warning of trouble ahead.

A sit-down with Shaoul

Staten Island, beyond Sandy

The much-criticized landlord talks about Lehman Brothers, the recession and the “ridiculous” accusations from his tenants.

Low-lying areas struggle to recover, but hilltop neighborhoods see a real estate rebound.

Residential Market Report Checking in with brokers to take the pulse of the apartment market.

Manhattan’s biggest managing agents

Commercial Market Report

Companies snap up smaller firms and cut rates to get ahead.

Tracking rents and vacancy figures in Manhattan’s three office districts.

Government Briefs How the federal, state and local government impact real estate.

Structural Steel Right for any application For help achieving the goals of your next project, contact the Steel Institute of New York.

National Market Report

Publisher of Metals in Construction 211 E 43 ST | NY, NY 10017 | 212-697-5553 | www.siny.org

10 8 August October 2013 2012 www.TheRealDeal.com www.TheRealDeal.com

The Deal Sheet

Brutalism revisited Critic James Gardner on why neo-modernism, especially at Cary Tamarkin’s new project, is better than the style that inspired it.

Architect: Steven Holl Architects Structural Engineer: Robert Silman Associates Photo: Iwan Baan

Reports from around the country on significant developments and trends.

David Kuperberg at 8 Spruce Street, where his company, FirstService Residential New York, is the managing agent.

The Closing with Mitch Rudin The Brookfield exec talks about his massive Manhattan West project and getting confused with Bill Rudin.

A roundup of office and retail leases, building buys and financing.

Development Updates An update of the construction and sales status of projects around the city.

Residential Deals An insiders’ look at how home sales really happen.

We Heard

A lighter look at industry buzz.

www.TheRealDeal.com March 2012 00

Recent Transactions S ince 2005, we have invested in excess of $1.2 billion in the origination and acquisition of commercial mortgage loans collateralized by multifamily, retail, office and light industrial properties throughout the United States.

$50,000,000

$29,000,000

$13,000,000

Loan Origination Multifamily / Retail Recapitalization Flushing, NY May 2013

Loan Origination Industrial / Retail Portfolio Long Island City / New York, NY April 2013

Note Financing Multifamily Property Brooklyn, NY May 2013

$5,500,000

$5,250,000

$5,200,000

Loan Origination Mixed-Use Development Site New York, NY June 2013

Note Financing Multifamily Property Brooklyn, NY June 2013

Distressed Note Acquisition Retail Property Miami, FL May 2013

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Loan Origination Mixed-Use Property Soho, New York, NY May 2013

Loan Origination Multifamily Property Brooklyn, NY July 2013

Loan Origination Hotel / Retail Property Brooklyn, NY July 2013

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Loan Origination Office Property Brooklyn, NY July 2013

Loan Origination Multifamily / Retail Property Brooklyn, NY July 2013

Loan Origination Multifamily Property New York, NY July 2013

825 Third Avenue • 37th Floor • New York, NY 10022

(646) 472-1900 • www.madisonrealtycapital.com Includes deals closed by Sullivan Realty Capital, LLC, an investment adviser registered with the Securities and Exchange Commission doing business as Madison Realty Capital, and its affiliates. Past performance does not guarantee future results. It should not be assumed that the recommendations made in the future will be profitable or will equal the performance of the securities listed. Holdings are subject to change.

THE REAL DEAL N E W YO R K R E A L E S TAT E N E W S PUBLISHER Amir Korangy EDITOR-IN-CHIEF Stuart W. Elliott MANAGING EDITOR Jill Noonan DEPUTY MANAGING EDITOR Candace Taylor EDITORIAL DEVELOPMENT DIRECTOR Melanie Gray

Whether you need to buy or sell a building having a real estate broker that knows the local players is key - the buyers and the sellers. You need an intensely dedicated broker who is still on the job long after the lights have gone out elsewhere.

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WEB EDITOR Leigh Kamping-Carder ART DIRECTORS Ronald Gross, Keziah Makoundou SENIOR REPORTER Adam Pincus REPORTERS Katherine Clarke, Guelda Voien, Hayley Kaplan CONTRIBUTORS C. J. Hughes, David Jones, Adam Piore EDITORIAL OPERATIONS MANAGER Linden Lim WEB PRODUCERS Zachary Kussin, Hiten Samtani, Mark Maurer, Julie Strickland PHOTOGRAPHERS Chris Martin, Marc Scrivo DIRECTOR OF MARKETING OPERATIONS Yoav Barilan ASSOCIATE SALES DIRECTOR Ross Fox

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Rosewood Knows New York

We are pleased to announce that for the year-to-date July 26th 2013,

Rosewood has completed total sales of $816,614,000 in New York, which include: Manhattan: Aggregate sales of

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58 Buildings / 1,149 Residential Units / 68 Commercial Units Brooklyn: Aggregate sales of

$220,629,000

43 Buildings / 1,785 Residential Units / 25 Commercial Units Bronx: Aggregate sales of

$150,090,000

29 Buildings / 1,478 Residential Units / 28 Commercial Units

ADVERTISING SALES Eran Evron, Abi Laoshe, Nick Mascaro, Robert Stearns, Jennie Durkovic, Nicki Chadi DIGITAL TRAFFIC MANAGER Junaid Zahid WEBMASTER Nima Negahban FINANCE DIRECTOR Kenneth Cyrus ADMINISTRATIVE ASSISTANT Virginia Durso CIRCULATION Paul Destanko DISTRIBUTION Mitchell Newman, Michael Presto ATTORNEY Barry J. Friedberg Trachtenberg Rodes & Friedberg LLP ACCOUNTANTS William T. McCallum, CPA, P.C., Christine Wang

Queens: Aggregate sales of

$79,375,000

10 August 2013 www.TheRealDeal.com

The Real Deal is a registered trademark of Korangy Publishing Inc. Copyright © 2013. Call 212-2601332 or e-mail news@therealdeal.com. Warning: It is illegal to photocopy or reproduce any part of The Real Deal without express written consent. For reprints and duplication rights, call 212-260-1332. Principal office: 158 West 29th St., New York, NY 10001. The Real Deal is published monthly. Annual subscriptions cost $95. Send check or money order to 158 West 29th St., New York, NY 10001.

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EDITOR’S NOTE

Funny money

n New York City real estate, it’s a time of record-setting deals, low inventory and apartments getting snapped up at lightning speed. But at the tippy top of the luxury market, even with all the positive signs, one could make the argument that it’s not necessarily good economic fundamentals that are driving activity today. For example, hedge funder Steve Cohen, who is the subject of a profile in this issue, is making some of the biggest moves in New York real estate right now, but the economy likely has little to do with his decision-making. Cohen, who is at the center of one of the biggest insider-trading cases in history, recently made the priciest Hamptons purchase since 2008, paying $60 million for a home in East Hampton. And he spent another $60-plus million on two homes in Greenwich Village. The

Who is setting real estate records now? Speculators and those trying to shield their assets from ex-wives or the government. embattled founder of SAC Capital Advisors is also seeking to sell his Manhattan apartment in Midtown for what would be a record price at $115 million. Instead of a bellwether of a hot market, Cohen’s high-flying real estate activity may simply be an attempt to shield his assets from the federal government. Last month, after a years-long investigation, the SEC filed civil charges against Cohen that accuse him of failing to prevent insider trading at his firm. (Check out our story on his recent activity on page 30.) But it’s not just Cohen. The current record holder for a Manhattan apartment sale is Russian businessman Dmitry Rybolovlev, who bought an $88 million penthouse at 15 Central Park West last year. His ex-wife has claimed in court documents that the deal was an attempt to shield assets from her during their nasty divorce battle. And what will likely be a new record holder for New York (it hasn’t closed yet), the $90plus million sale of a penthouse at One57, also doesn’t speak to the kind of fundamentals

ABBOTTENTERPRISES

12 August 2013 www.TheRealDeal.com

that support the long-term health of the market. A partnership of Pershing Square Capital’s William Ackman and a group of real estate investors paid big bucks for the massive 13,000-square-foot condo overlooking Central Park as a speculative investment — not as a place to live. Foreign buyers, speculators and those running from the law … I thought the market was supposed to be on surer footing since the last crash? It almost makes you nostalgic for the mid-2000s boom, when the high-water mark was private equity investor J. Christopher Flowers buying the Harkness Mansion on the Upper East Side for $53 million. (Flowers reportedly sunk $4 million into renovations, then sold it in 2011 for a steep discount at $36 million to art world powerhouse Larry Gagosian.) Of course, high-priced sales are inherently outliers, even if they do help set the pace for the rest of the market. And the market is clearly going gangbusters right now. The Manhattan apartment market had its most active spring since 2007 this past quarter, and inventory is supertight, with the number of available units at a 13-year low. Buyers are grabbing everything that isn’t nailed down. But it is worth noting where the money at the highest end is coming from, especially since — not to be alarmist — everyone missed the warning signs last time around. In a spread starting on page 46, we look in more detail at these and other factors that could serve as red flags to counter the current real estate market euphoria. Some see the New York market as being driven by artificial factors, such as the Fed’s policy of buying bonds to shore up the economy. Also, private equity investors, in particular, are highly levered, and with rising interest rates, things could get messy. And unemployment — at the end of the day, more important to the city’s economic health than foreign buyers, of course — remains high, at 8.4 percent versus 5.1 percent right before the financial crisis. Less ominously, elsewhere in this issue we take a look at the best commercial brokerages to work for (page 34), rank Manhattan’s biggest residential management companies (page 54), and survey the condo buildings with the lowest common charges (page 40). Enjoy the rest of summer and enjoy the issue. STUART ELLIOTT

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RE S I D E N T I A L MA R K E T BY HAYLEY KAPLAN ash remains king for buyers scrambling to get the edge in New York City’s heated housing market. But most aren’t really draining their rainyday funds — not at all. They’re putting the money up front, then finding a lender to help finance their dream home.

Finding a way around the all-cash buy Buyers are getting mortgages after the sales have closed

Getting a mortgage after a sale has closed has always been an option, but not one that buyers embraced until just a few months ago, when the process of residential deals started moving at a breakneck pace, mortgage experts and brokers told The Real Deal. Today, there are essentially two ways to secure a loan after a sale

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broker at Douglas Elliman on the LuxuryLoft team, estimates that

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eight out of 10 buyers whom he works with ask about the lending

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practice because they want to recoup their savings and still beat out other bidders by offering all cash. “If [a buyer] has the cash, they feel like they need to close cash, because that’s the incentive for sellers,” said Debra Shultz, senior vice president of mortgage lending at Guaranteed Rate. “It’s easier to get their offer accepted, and then they do the ‘tech refi’ after. It’s a mortgage as well; it’s just not a purchase mortgage.” Added Terrence Oved of the Manhattan law firm Oved & Oved: “Nobody really wants to do mortgages. [Buyers are] basically culling together all their money, and then right after they close, they put together an application to refinance. They’re doing it backward, basically.” Overall, mortgage refinances — including technical refinances — are declining because of the inching up of mortgage rates, according to the Mortgage Bankers Association. For the week of July 17, for example, refinance applications accounted for 63 percent of all mortgage applications, a drop from 64 percent the week before and the lowest level since April 2011, according to the trade group. Sales in Manhattan are slowing down too, even though prices are still climbing. Just 461 condominium sales closed in June, compared with 529 for the same month the year before — a 12.85 percent decline, data compiled for TRD by real estate database CityRealty shows. Condominium prices climbed to $1,350 per square foot, up from $1,279 in June 2012 — a 5.6 percent increase. The priciest contract signed in July was a townhouse at 144 Duane Street in Tribeca, listed for $49.5 million with Elliman’s Leonard Steinberg and Herve Senequier, according to the Olshan Luxury Market Report and listings website StreetEasy. Despite the dip in mortgage applications, lenders are increasingly willing to write technical refinances, said Rolan Shnayder, director of new development lending at Continued on page 90

14 August 2013 www.TheRealDeal.com

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Buyers’ brokers struggle in seller’s market As inventory plummets, getting appointments toughens

By Katherine Clarke n a city where only sellers’ brokers have exclusive contracts, representing a buyer is a tough job. And now it’s tougher than ever, thanks to the ongoing inventory shortage afflicting the New York City residential market. With few new properties on the market, buyers’ brokers are having difficulty finding apartments to show their clients, since many apartments get snapped up even before they are listed online. When a new property does appear on the market, listing brokers said they are immediately inundated with requests for showings and even offers, which means they have to pick and choose which brokers to work with. Meanwhile, many tech-savvy buyers — especially those frustrated by losing apartment after apartment in a tight market — don’t hesitate to contact the listing broker directly, without the aid of a buyers’ broker. “The market is inundated with qualified — and oftentimes overqualified — buyers who are also quite Internet-savvy, and who may or may not have a buyers’ broker with them,” said Sam DeFranceschi, an associate broker at Nest Seekers International. “When desirable products come to market, [buyers]

are quick to reach out for a showing, and in some cases make an offer sight unseen.” In today’s market, working with a buyers’ broker may even be a disadvantage, sources said, since listing agents often prefer to do a “direct deal”— one with no co-broker to split the commission. And though it’s against the rules of the Real Estate Board of New York, some sellers purposefully don’t return phone calls from buyers’ brokers, preferring to make a deal with an unrepresented purchaser. According to Donna Olshan, president of Olshan Realty, some listing brokers “are putting off showing until the open house, in the hope that they can land a direct deal.”

“You’re more likely to show your property to a high-profile broker than to any old Joe Schmo.”

Listing brokers “are putting off showing until the open house, in the hope that they can land a direct deal.”

Michael Graves, CORE

Donna Olshan, Olshan Realty

“Today, it’s more about timing and relationships than ever.”

Essex House at 160 Central Park South

A frenzied atmosphere With Manhattan’s inventory of available homes at its lowest point in 12 years, apartments are selling quickly. It took an average of 4.6 months to sell a Manhattan apartment in the second quarter, down from 7.9 months in the same period of last year, according to a market report from the brokerage Douglas Elliman. The combination of low inventory and speedy sales has created a frantic climate in the market. Buyers’ brokers in particu-

Gea Elika, Elika Real Estate

Continued on page 91

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By the Numbers

Gearing up for election DaY Compiled by Evan Bleier

ew York City voters head to the polls Sept. 10 to cast primary ballots for a host of elective offices. In more than a few of the races, real estate is a power player — from six-figure donations to candidates with ties to the industry. Read on to find out all of the connections.

450

Number of real estate contributors in the latest campaign filing period, May 12 to July 11.

$3 billion

Net worth of mayoral hopeful John Catsimatidis, real estate developer and supermarket mogul who wants to bring the World’s Fair back to the Big Apple.

$369,023

Total those donors ponied up during that period to all city races, including mayor and City Council.

54 cents

80,000

Number of affordable housing units that council President Christine Quinn wants to build if she’s elected mayor. (She lives in a $1.3 million apartment in Chelsea.)

Cost of printing a primary ballot.

$10 million

Funds pledged to council candidates by Jobs for New York, a political action committee spearheaded by the Real Estate Board of New York.

$5.26 million

Cash actually raised by REBNY’s PAC.

Number of years since comptroller challenger Eliot Spitzer was caught in a prostitution scandal and forced to resign as governor. He sought refuge in running his father’s real estate empire.

$185,000

Annual salary that Spitzer would receive if he is elected comptroller.

$425,000

Top amount donated to Jobs for New York by seven firms, each through an election-law loophole. The companies: Brookfield Office Properties, Durst Organization, Fisher Brothers, Glenwood Management, Jack Resnick & Co., Rudin Management and SL Green Realty.

Percentage of votes that a candidate needs to avoid a runoff and advance to the Nov. 5 general election.

$1.1 million

Value of row house in Park Slope, Brooklyn, that mayoral candidate Bill de Blasio calls home.

$30 million

Price that Spitzer Enterprises paid for the retail condo at 350 West Broadway in February.

$71,325

Total that mayoral candidate Jack Hidary, a cousin of the Hidrock Realty family, received from real estate players in the latest filing period. Only serial sexter Anthony Weiner received more — $85,011.

$3,850

Contribution that William and Arthur Zeckendorf, of Zeckendorf Development, each gave to council member Gale Brewer, who is running for Manhattan borough president.

Sources: The Real Deal, Crain’s, The New York Times, DecideNYC, Washington Post

HISToRICAL TREASuRE AT THE oSBoRNE

205 West 57th Street NIKKI FIELD Senior Global Real Estate Advisor, Associate Broker | 212.606.7669 | nikki.field@sothebyshomes.com | www.nikkifield.com PATRICIA WHEATLEY Global Real Estate Advisor, Associate Broker | 212.606.7613 | pat.wheatley@sothebyshomes.com

$4,500,000

Compiled by Yaffi Spodek

Operated by Sotheby’s International Realty, Inc. Sotheby’s International Realty® is a registered trademark. 08-13.indd 1

18 August 2013 www.TheRealDeal.com

7/26/2013 4:38:02 PM

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TAMI to the rescue I BY ADAM PINCUS t’s been a difficult month for financial firms, with investment bank Gleacher & Co. winding down and hedge fund giant SAC Capital Advisors accused of insider trading. Luckily for the Manhattan office market, demand from tech and media companies is on the rise. At the start of last month,

space include the Doha-based broadcaster Al Jazeera, which needs up to 200,000 square feet. The entertainment companies Sony and HBO are looking for some 500,000 square feet each. And the small but fast-growing online marketing company Constant Contact signed a lease in June for 21,441 square feet at 17 Battery Place

Tech-media sector seeks more office space

ident in the Midtown office of the commercial services firm DTZ. The average annual Manhattan asking rent rose to $56.85 per foot in July from $56.61 in the previous month, according to preliminary figures from the commercial firm Colliers International. The availability rate, which measures space that is vacant or will become available

Last month, companies in the so-called “TAMI” sector — technology, advertising, media and information — were on the hunt for some 5.8 million square feet of Manhattan office space. That’s up 21 percent from 4.8 million in July 2012. companies in the so-called “TAMI” sector — technology, advertising, media and information — were on the hunt for some 5.8 million square feet of Manhattan office space, according to an estimate from the commercial brokerage Cushman & Wakefield. That’s up 21 percent from 4.8 million in early July 2012. TAMI companies in search of

South in the Financial District. The uptick in tenants looking for space should translate into a greater volume of deals later this year, and could lead to higher prices, brokers said. “Notwithstanding that we are in the summer doldrums, there seems to be a steady stream of activity: tenants entering the market and deals getting done,” said Louis Buffalino, senior vice pres-

over the next year, held steady last month at 12.1 percent, the same level as in June, the firm reported.

Midtown A major addition of space to the Midtown office market last month came from the faltering Gleacher, which recently informed its shareholders that it will cease operations.

Last month, Gleacher placed its 83,452-square-foot headquarters at 1290 Sixth Avenue on the sublease market. Jones Lang LaSalle brokers Matthew Astrachan, Mitti Liebersohn and Scott Vinett have the listing for the space, located on the fourth and fifth floors. The sublease runs through 2025, according to property database CoStar Group, which did not list an asking rent. JLL and Gleacher did not respond to a request for comment. Gleacher is currently paying rent at or above $58.70 per foot, according to documents filed with the U.S. Securities and Exchange Commission. And the financial firm is preparing to take a hit of $15 million to $20 million at its leased properties, according to SEC filings, which suggests the company expects to sublease the space for less than it is paying. Brokers are also speculating about what might happen to SAC’s 66,000 square feet of

Manhattan office stats AVAILABILITY RATE

AVG. ASKING RENT

Jul ’13 Jun ’13

Manhattan 12.1% $56.85 12.1% $56.61

Jul ’13 Jun ’13

Midtown 12.2% $66.88 12.3% $66.09

Midtown South Jul ’13 9.2% $52.02 Jun ’13 9.2% $51.52

Jul ’13 Jun ’13

Downtown 15.9% $46.89 15.9% $46.20

Source: Colliers International

Class A space at 510 Madison Avenue, a 350,000-square-foot tower at 53rd Street owned by the real estate investment trust Boston Properties. SAC, headed by Steven Cohen (see related story on page 30), inked the high-profile lease in 2011. SAC’s Continued on page 90

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In their words...

The month’s funniest and most insightful comments on real estate

“Nest Seekers is like a Morton’s [the steakhouse]. We’re like Subway.” Anthony Lolli on the mass market appeal of Rapid Realty, the brokerage he founded and is now franchising nationwide.

“In general, these don’t look like ‘Cosby Show’ brownstones.” AJ Pires of Alloy, on the modern aesthetics of his company’s Dumbo townhouse project. (The New York Times)

“We need to drive the hardest bargain possible in each case.” Bill de Blasio, public advocate and mayoral candidate, on how the city should deal with the real estate industry. (Brownstoner)

“I started the firm in 1967, but I was still in diapers.” Architect Stephen Jacobs, founder of Stephen B. Jacobs Group, on his long career — 45 years and counting. (TRD)

“We probably need to reset our expectations: Maybe 5,000 is going to be our new normal, not 9,000.”

From the will of late “The Sopranos” star James Gandolfini, who left his Greenwich Street apartment to his 13-year-old son Michael. (New York Post)

“I’m sort of paid to worry. That’s my job.” Jonathan Miller, CEO of appraisal firm Miller Samuel, on always being on the lookout for the real estate meltdown. (TRD)

Corcoran Group CEO Pamela Liebman, suggesting that brokers need to rethink what constitutes an inventory shortage. (The New York Times)

“He has planned [well], whether that be zoning, whether that be environmental issues, whether that be where to put the garbage.” REBNY’s Steven Spinola, on the legacy of outgoing Mayor Michael Bloomberg. (WNYC)

22 August 2013 www.TheRealDeal.com

“It is my hope and desire that they will continue to own said property and keep it in our family for as long as possible.”

“The family has a background of what can happen with living too large and growing too fast.” Townhouse Management Co. patriarch Richard Maidman, on why he decided to limit the company profits available to his relatives. (The Wall Street Journal)

“We are anti-flash.” Architect and developer Cary Tamarkin, on marketing his latest condo project in West Chelsea. (TRD)

“I need them to hide my skeletons.” Terrence McKnight of classical radio station WQXR, on the many closets and cupboards in his Harlem walk-up. (The New York Times) www.TheRealDeal.com August 2006 00

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Peter Hennessy The president of the New York Tri-State region for commercial firm Cassidy Turley hardly ever sits down — in part because he doesn’t have a chair at his desk.

The restaurant Lexington Brass at 517 Lexington Avenue

4:45 a.m. I get up at 4:45 at my house in Bedford, N.Y., and take my two dogs for a walk before I do anything else. We have an English Springer Spaniel named Macallan, like the Scotch, and a Pomeranian-Chihuahua mix — a rescue — called Scarlet. My wife, Lisa, refers to her as a “Chi-Pom.” 5:15 a.m. I work out in the basement. It’s not a gym; it’s a concrete slab at grade, and I have an old bike and elliptical machine, and a little TV. I work out for 45 minutes, to the point where I’m getting a bit of an endorphin rush. 6 a.m. I’ll get my coffee, and wake up my wife and two kids — twin 14-year-old boys, Brooks and Andrew. Waking them is like taking a grenade, throwing it in their room and running. No breakfast. Some days I take the boys to school; on other days I grab a train around 6:40 so I can get into the office [at 277 Park Avenue] at 7:45. On the train, I write in my notebook all the things I need to do. I’m getting to that stage of life where I’m starting to not remember stuff.

square feet at 330 Madison Avenue. They relocated there from 135 East 57th Street. Noon Lunches are out a few times a week. This week I was at Lexington Brass on 48th Street, to meet a guy from Cushman & Wakefield I’m trying to recruit. In 2012, we hired 70 people, and this year so far, we’re at 35 new hires. [Lexington Brass] is not overly stuffy. I had chicken paillard. I try to eat relatively light. No heavy starches, because it will make me tired. 2 p.m. In the afternoons, I dedicate a few hours to my national role [within the company]. I’m now helping to plan a convention in Nashville in September. Tenants will come from around the country. The focus is on the impact technology is having on people’s work habits.

8:30 a.m. Most of our meetings start at 8:30. Our tri-state staff is about 420, with about 150 here [in New York]. Fifteen of them are senior level. But I like to figure out what’s been going on with our junior-most folks, whatever issues are on their plate.

4 p.m. I have a bad habit at four — I go downstairs and get a bag of potato chips. And then I’m back up here. … I got rid of my desk chair two years ago. In our society, too many people have their faces plastered to screens for no ultimate benefit. I can stand at the desk for only about 25 minutes [before getting tired], so I’m forced to walk around, interacting with people. … I also have a headset, so I can walk around and do my calls, although a great man once said to me, ‘You think you’re multi-tasking, but you’re just being rude.’

10 a.m. From 10 to noon, I am pretty focused on my client work. I’m doing about five to 10 deals a year. My clients used to include tenants like NFL, Disney and Mobil; now I have Guggenheim Partners and GFI Capital Resources Group. In December 2011, Guggenheim leased 200,000

6 p.m. I try to get the 6:43 train, but tonight I’m going to the bar at the Four Seasons hotel to meet a guy who manages the real estate assets for an insurance company. He may need help with a project. I like the hotel’s beautiful modular construction, concrete blocks that were plugged

24 August 2013 www.TheRealDeal.com

The Hennessy family has an English Springer Spaniel named Macallan.

Hennessy works out on the elliptical machine in his basement.

Hennessy takes the 6:40 a.m. train to Manhattan from Bedford, N.Y.

An afternoon guilty pleasure: potato chips.

together. I’ll have a glass of red wine or a beer. Scotch is for Friday or Saturday nights. If I’m stuck [in the office] at night, I like to scribble sayings on my walls, like ‘More organizations die from indigestion than starvation.’ I try to change them every month or so, because things get stale. When I ran the New York Marathon in 1986 and I was crossing the bridge into the Bronx, there was a woman in her 90s with a little hand-scrawled sign that said, ‘Face your fears, and you will win.’ You know how you have epiphanies in life? That was one of them. 7:45 p.m. Typically I get home around 7:45. Dinner is usually in the oven. I talk to my sons about what happened that day, what’s going on with their schoolwork. The messaging I give to my young employees is similar to the messaging I give to my kids — courage, honor and truth. 9 p.m. Around nine, we’ll find something on the TV that they want to watch. They like [the A&E reality series] “Duck Dynasty,” which is actually pretty funny. That’s really the only screen time they get. They’re not on Facebook because I have banned it in the house. 10 p.m. I’m addicted to “Mad Men.” I started my career in advertising. The show really gets the details right. When I was 22, on the first day of my first job, my boss called me in at four and said, ‘Go over there, open the cabinet.’ There were two glasses and vodka. I poured myself a drink and had a seat. 11 p.m. No later than 11, those lights are out, and we’re asleep. By C. J. Hughes

Hennessy is “addicted” to the AMC drama “Mad Men.”

www.TheRealDeal.com March 2012 00 PHOTOGRAPH OF HENNESSY FOR THE REAL DEAL BY CHRIS MARTIN

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BY EVAN BLEIER very year in New York City real estate, it seems, a new area is anointed the next hot neighborhood — from Long Island City in Queens to Bushwick and Greenpoint in Brooklyn. But there’s something different about this year’s most-buzzed about up-and-coming neighborhood: Ridgewood, Queens. Ridgewood is just one stop past Bushwick on the L train, but the working-class enclave, with its rows of attached houses, has a far different feel than the converted post-industrial warehouses of its hipper neighbor. Nonetheless, real estate brokers are seeing artists, 20-somethings and young families trickle into Ridgewood, lured by cheaper home prices, a burgeoning local arts scene and new restaurants. “There’s a big upswing in the market in terms of people coming in,” said Joe Crifasi of Crifasi Real Estate, which has offices in Williamsburg, Ridgewood and Middle Village, Queens. “We have people come into our office on Bedford Avenue in Williamsburg and now we can turn them on to a property in Ridgewood. Before, that would have been impossible — now it’s relatively easy.” Demand from these new residents, combined with the overall uptick in the real estate market over the past year, has led to more sales and rising rents. According to the real estate listings provider StreetEasy.com, the median closed sale price of a Ridgewood home in the second quarter was $400,000, up 14 percent from the same period of last year. “In the past year, we’ve seen an uptick in sales and rentals,” said Aaron Hillel of Ridgewood-based Hillel Realty Group. “Apartments have definitely increased in price. We were renting one-bedroom apartments for $1,150 to $1,200 two to three years ago, and now they are going for as high as $1,500.” He added: “Last year, apartments would stay on the market for months, but this year they are renting so fast it’s unbelievable.”

Located just over the Queens border from Bushwick, Ridgewood’s manicured brick row houses were largely constructed in the early 1900s to house the immigrants who worked in the area’s breweries and knitting mills. That gives it a far different feel than trendy, post-industrial Bushwick. “You’re talking about different housing stock,” said Sofia Song, vice president of research at StreetEasy. “Bushwick is more apartments and multi-family homes. Ridgewood has more single-family homes and row houses.”

Nonetheless, artists and young professionals priced out of other areas are moving to Ridgewood, brokers said. They’ve been followed by new art galleries — for instance, Famous Accountants on Gates Avenue and Valentine, opened by a founder of Galapagos Art Space in Dumbo — as well as restaurants and bars. At the Vietnamese restaurant Bunker on Metropolitan Avenue, chef Jimmy Tu once cooked at Eleven Madison Park in the Flatiron District. So, what is behind the sudden surge in demand? First, a 2010 change to the “M”

Tidy brick buildings, with homes on the upper floors and retail shops on the ground level, are sprinkled throughout Ridgewood, Queens. Examples are 703 Fairview Avenue (above) and a swath of Forest Avenue near Metropolitan Avenue. The addresses of these buildings are 66-22 to 66-44 Forest Avenue (below).

subway route shortened the commute of Ridgewood residents to Midtown, brokers said. But more importantly, the resurgent economy has strengthened the housing market citywide. With rents again on the rise in popular neighborhoods such as Williamsburg, home seekers are again venturing farther afield in search of bargains. “A lot of people are getting priced out of Manhattan, Williamsburg, Long Island City and even Greenpoint,” said Eric Hantman, CEO of boutique real estate firm Prime NY, “so they are going to the next areas of gentrification, which seem to be Bushwick and Ridgewood.” In particular, the increasing popularity of Bushwick has led more home seekers to start looking over the Queens border. “I think Bushwick opened up Ridgewood,” Crifasi said. Good deals are still readily available in Ridgewood, brokers said, because the area was hard hit by the ensuing real estate downturn and has not recovered as fast as its hipper neighbors. Continued on page 88

www.TheRealDeal.com March 2010

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REGULATING REAL ESTATE

The low down on loans

A look at where homebuyers are finding cheap mortgages in a dog-eat-dog market BY KENNETH HARNEY t’s a crucial question for many first-time and moderate-income buyers in rebounding markets across the country: Where do we find the lowest down payment, the lowest monthly cost loans? The answers are changing. True zero-down alternatives are rare and tend to be tightly restricted: •If you’re a veteran or active-duty service member, a Veterans Affairs–guaranteed home loan might be ideal since it requires no down payment. •The same is true for certain rural housing loans administered by the Department of Agriculture, but purchases must be in designated areas outside large population centers. •Members of the Navy Federal and NASA federal credit unions can qualify for zero-down financing, but those programs are closed to everyone except their members. •Some state housing finance agency programs may also be helpful, but they often come with income limits and other requirements. For most shoppers looking for mini down payments, there are much larger, less restrictive sources. The Federal Housing Administration is probably the traditional favorite since it requires just 3.5 percent

with 4.625 percent for Fannie. (A point is 1 percent of the loan amount.) But FHA’s new mortgage insurance premium spoils the rate advantage: The monthly cost is $195.41, a third higher than the $123.68 for Fannie’s private mortgage insurance. On a monthly basis, FHA costs $43.30 more than Fannie — $1,064.67 vs. $1,021.37 — including principal, interest and insurance. More important for buyers who plan to hold on to their low mortgage interest rates, Fannie’s insurance charge disappears when the principal balance hits 78 percent of the purchase price. FHA’s insurance fee is a drag until you pay off the loan. There are noteworthy restrictions to the Fannie program that might stand in the way of some buyers, however: •There are income limits pegged to median incomes in the metropolitan area where the house is located, although applicants in higher-cost markets such as in California, metropolitan Washington, D.C., Seattle, Vancouver-Portland, Boston and New York, among others, can qualify with incomes well above the median. •Fannie requires higher credit scores — generally 680 FICO and up; FHA is more generous, al-

Zero-down plans are hard to come by, but the mini-down payment arena is becoming more competitive down. But beware: In the wake of a series of insurance premium increases and a highly controversial move to make premiums non-cancellable for the life of the loan for most new borrowers, FHA no longer rules the low-cost roost. Fannie Mae, the giant federal mortgage investor, may now do better. And for some applicants, so might Freddie Mac, Fannie’s smaller competitor. Consider this scenario prepared by George Souto, a loan officer with McCue Mortgage in New Britain, Conn., who specializes in putting first-time buyers into houses using FHA loans. Lately, though, “the numbers just don’t work as well,” and Souto is directing clients into Fannie Mae’s 3 percent minimum down payment “My Community Mortgage” program. Here’s the head-to-head: You want to buy a house for $180,000. If you go with a 3.5 percent FHA loan, you need to come up with $6,300. For Fannie’s 3 percent loan, it’s just $5,400. The rate on the FHA loan with zero points — in Souto’s hypothetical — will be 4.25 percent, compared

lowing 580 FICOs. As a practical matter, though, many mortgage lenders won’t do FHA loans for borrowers with FICO scores below 640. For firsttime buyers, Fannie insists at least one borrower to complete a financial education or counseling course. FHA has no such requirement. •FHA allows borrowers to use gift funds as part of their down payments, but Fannie requires borrowers to rely on their own resources such as savings accounts for their full down payments. Freddie Mac’s “Home Possible” program is a low-down-payment competitor to both Fannie and FHA and is an attractive option for buyers who don’t want to keep paying expensive FHA insurance premiums. It requires a 5 percent minimum down payment but allows all of it to come from gifts provided by family, friends, employers or other sources. There is no minimum cash contribution directly from the borrower, which may resemble zero down but really isn’t. Kenneth Harney is a syndicated columnist.

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GOVERNMENT BRIEFS Fannie, Freddie face lawsuits over growing profits Fannie Mae and Freddie Mac are tangled in legal battles with investors and nonprofit housing groups that want a share of their fat profits, the Wall Street Journal reported. The nonprofits are challenging a 2008 decision by the Federal Housing Finance Agency, which regulates Fannie and Freddie, to suspend payments to two affordable-housing trust funds. The investors are suing over changes that the Treasury Department made last year to the terms of its $188 billion bailout of the lenders during the financial crisis; until last summer, Fannie and Freddie had to pay a 10 percent dividend on their bailout funds, but now they must turn over all their payments to the Treasury. The lawsuits, according to the newspaper, show the increased scrutiny of the government’s takeover of Fannie and Freddie. Housing policy expert Julia Gordon, with a liberal think tank called Center for American Progress, predicted the number of court fights is “going to multiply until Congress reforms” the lenders.

High court strengthens hand of developers against government land-use policies The U.S. Supreme Court handed down a decision at the end of its 2013 term that could have widespread ramifications for real estate developers challenging state and local land-use policies, Atlantic Cities reported. In a 5-4 vote, the justices expanded the definition of the so-called Takings Clause of the Fifth Amendment far beyond simply banning government entities from seizing private property without proper compensation. Now, even the rejection of a special permit might be considered unconstitutional. The ruling came in Koontz v. St. Johns River Water Management District, an 11-yearold lawsuit filed by Florida properJustice Samuel Alito ty owner Coy Koontz, who is now deceased. Koontz wanted to develop four of 15 acres of wetlands but was denied a special environmental permit from the district because he refused to scale down his project or pay for improvements to nearly public property. The district’s rejection, Koontz contended, violated the Constitution. A sharply divided court agreed. “It makes no difference that no property was actually taken,” Justice Samuel Alito wrote for the majority. “Extortionate demands for property … run afoul of the Takings Clause.”

Senate bill would make green housing more affordable to the middle class A bipartisan Senate bill aims to make energy-efficient features in homes more affordable by allowing average-income buyers to qualify for larger loan amounts, the New York Times reported. The legislation, called the SAVE (Sensible Accounting to Value Energy) Act, has two key provisions. The first would require Fannie Mae, Freddie Mac and the Federal Housing Administration to include energy efficiency into their underwriting policies. The second would force lenders to factor in energy savings when calculating a borrower’s debt-toincome ratio and to add the value of projected energy savings to the home’s appraisal; a higher valuation could help the prospective buyer qualify for a larger loan. A study examining 71,000 home loans from 2002 to 2012 found that default risks are 32 percent lower on homes that meet the government’s “Energy Star” guidelines than on similar non–Energy Star homes. The measure has broad support from business, real estate, energy and environmental groups. Compiled by Sanna Chu

28 August 2013 www.TheRealDeal.com

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Pr o f i l e

Shopping with Steve

Real estate buying spree by embattled SAC founder sets tongues wagging

Steven Cohen, head of the hedge fund SAC

By Guelda Voien AC Capital Advisors founder Steven Cohen is at the center one of the biggest insider-trading cases ever. And the 57-year-old hedge-fund king — reports put his worth at $8 billion to $9 billion — is also making history in the real estate market. In March, the same month his now-notorious firm agreed to pay a $616 million fine for insider trading, Cohen bought a seven-acre property at 52 Further Lane in East Hampton for $60 million, one of the highest home prices ever paid on the East End. And Cohen’s Beacon Court penthouse in Manhattan is on the market for $115 million, which would set a new record if it fetches that price. April brought two Cohen buys: a $39 million building on Perry Street in the West Village, which he plans to renovate, and a $23.4 million maisonette at the newly converted Abingdon condomini-

30 August 2013 www.TheRealDeal.com

The $60 million Further Lane estate was on the market for less than a week before Cohen snapped it up, a source with knowledge of the East Hampton deal said. um at 607 Hudson Street. Cohen’s buying and selling extends into the art world: He laid out $150 million, again in March, for Pablo Picasso’s “Le Rêve,” and has been quietly offering several pieces from his prodigious collection, which includes works by Jasper Johns, Andy Warhol and Jackson Pollock. All this comes just as the Securities and Exchange Commission completes a years-long investigation of allegations of insider trading at SAC. Last month, the SEC filed civil charges against Cohen that accuse him of failing to prevent insider trading at his company. Five days later, the Manhattan U.S. Attorney’s Office charged SAC with four counts of secu-

rities fraud and one count of wire fraud, related to insider trading and allegedly laundering the profits. From the start, Cohen has maintained he has done nothing wrong and has vowed to fight all the charges against both him and SAC Capital. He declined to comment for this story. The timing of the purchases, though, has made Cohen’s motives the subject of intense speculation. Sources told The Real Deal that Cohen could be investing so heavily in art and real estate to shield his assets from the government.

The buying begins The son of a garment worker and a part-

time piano teacher, Cohen left his native Long Island in 1978 for the University of Pennsylvania, then went to work as a trader at boutique investment bank Gruntal & Co. Gruntal, as it turned out, was a perfect milieu for Cohen, who would later be at the forefront of technology-driven trading. Gruntal featured one of the first so-called prop trading desks, and Cohen was its star. In the 1980s — a famously bullish time for American stock markets — Cohen’s desk made a reported $33 million a year (a lot of money in the days before hedge funds and electronic trading were ubiquitous). In 1991, while Gruntal struggled under the cloud of junk-bond

www.TheRealDeal.com January 2011 25

Pr o f i l e scandals, Cohen made an auspicious exit, starting SAC Capital with about $20 million of his own money, and eventually growing the firm’s assets to about $15 billion. Along the way, Cohen met and married Patricia Finke. They stayed together for 11 years and had two children before divorcing. He met his current wife, Alex Garcia, on an online dating site. They have four children together. In the last 10 years, SAC was reportedly one of many companies that relied on so-called expert network firms, which feed information to funds for a fee. Some

for the money. But for Cohen personally, the yearslong investigation came to a head last month, when the SEC filed civil charges against him, in an unexpected move. The SEC alleges Cohen failed to properly supervise two of his portfolio managers who traded on information not available to the public. The civil charges and even the indictment of SAC are widely viewed as evidence that authorities did not have sufficient evidence to file criminal charges against Cohen himself. “It’s kind of scraping the bottom of the

off an Andy Warhol painting of actress Elizabeth Taylor for $27 million, and reportedly picked up $300,000 in fine art at Miami’s Art Basel in just five minutes. In March, the month that SAC agreed to pay the fine, Cohen shocked the Hamptons real estate world by shelling out $60 million for investment banker Robert McKeon’s Further Lane mansion in East Hampton, a sale brokered by Sotheby’s Ed Petrie. The deal is the most expensive home sale in the Hamptons since 2008, when an oceanfront spread at 104 Gin Lane in Southampton sold for $60 million.

Cohen’s new property, he’ll be able to gaze unimpeded at the Atlantic. Petrie did not return calls for comment, but a source with knowledge of the deal said the estate was on the market for less than a week before Cohen snapped it up; a listing price was not made public. Cohen plans to tear down the existing house and rebuild, brokers said, and is expected to sell the first Hamptons home once construction at 52 Further Lane is complete. Cohen’s big-ticket purchase is viewed as something of an outlier in the Hamptons, where sales in that price range have

Cohen’s house at 30 Crown Lane in Greenwich, Connecticut

Top, Cohen’s One Beacon Court penthouse at 151 East 58th Street is on the market for $115 million. Bottom, Picasso’s “Le Rêve,” which Cohen purchased in March for $150 million.

Cohen bought a house at 52 Further Lane in East Hampton for $60 million, the highest-priced home sale on the East End since 2008.

“This is putting us back on the stratospheric map.” JUDI DESIDERIO, TOWN AND COUNTRY REAL ESTATE of that information, the SEC has alleged, is what is called “material non-public information.” Paying for MNPI constitutes insider trading. In 2007, the SEC began scrutinizing the trades of SAC and other firms that used these expert networks. Since then, four current or former SAC employees have been criminally charged with insider trading, and two of them have pleaded guilty. SAC itself agreed to the $616 million fine, most of which Cohen will be paying out of his pocket, experts said, because he owns 100 percent of the hedge fund’s “management fund,” which is on the hook

28 March 2012 www.TheRealDeal.com

barrel,” said securities attorney Bill Singer of the charges. And fines levied against Cohen probably will be in the six figures, a drop in the bucket of his vast fortune, Singer said. Still, Cohen could be banned from trading from six months to life. And SAC’s indictment could still spell doom for his hedge fund.

Big trades Cohen has a history of making big purchases — and sales — when trouble looms. When the SEC’s investigations into SAC became public in 2011, Cohen auctioned

Cohen’s new, 10,000-square-foot oceanfront home is just down the road from another house he owns — also on exclusive Further Lane. That property, which he bought in 2007 for $14.8 million, figures prominently in Cohen’s response to the civil case against him, which is already being called the “Hamptons pool defense.” Cohen’s lawyers say he was at his Hamptons home on the day in 2008 when an improper trade of Dell stock by one of his employees took place. The view at Cohen’s first Further Lane home is reportedly blocked by the home of fellow hedge funder James Chanos. At

been rare since the recession. But that hasn’t stopped wealthy sellers from trying. Just a month after news of Cohen’s purchase, Courtney Ross, widow of the late Time Warner honcho Steven Ross, listed an estate at 20-30 West End Road in East Hampton for $75 million. And just last month, actor Richard Gere put his 6.3-acre estate in North Haven on the market for $65 million. Cohen’s willingness to spend top dollar on Hamptons real estate has likely prompted more high-end sellers to put their homes on the market. Continued on page 86

www.TheRealDeal.com August 2013 31

Beyond Holiday Inns in Brooklyn A bevy of new upscale hotel projects are coming to Kings County

By Guelda Voien or years, Brooklyn has been a difficult place to find a hotel room. But the number — and quality — of Brooklyn hotels is set to soar, thanks to nearly 20 new projects planned for the borough. The number of Brooklyn hotel rooms is slated to jump by more than 25 percent by 2018, from roughly 4,000 to more than

vices’ 95 Rockwell Place near the Brooklyn Academy of Music; the revamped Bossert Hotel in Brooklyn Heights, a project by David Bistricer and the Chetrit Group; and developer Juan Figueroa’s 250-room hotel next to the historic Williamsburgh Savings Bank building at 155 Broadway. These projects also stand out for their individualized branding and stylish décor, bringing a new level of luxury to a borough

Manhattan — 1.6 million is the latest head count — had more than 90,000 rooms as of the beginning of 2012, according to published reports. That wasn’t always the case. Brooklyn had a thriving hotel sector in the 1950s, said Leary, who grew up in the borough. But by the 1970s, an onslaught of urban problems — stagflation, white flight and the city’s bankruptcy — had decimated the hotel market.

to host large conventions, a component often thought necessary for a big hotel not near an airport or tourist destination. “The prior viewpoint was that you would have to build another Brooklyn Marriott — that has meeting space — or a small hotel,” Hennessey said. But that began to change last year, with the opening of two pricey new hotels in Williamsburg. At Two Trees Management’s trendy

Brooklyn hotels in the pipeline Name/address

projected opening

number of keys

Hotel Bossert, 98 Montague Street

May 2014

302

155 Broadway

2015

250

Holiday Inn, 300 Schermerhorn Street

February 2014

246

247 Metropolitan Avenue

TBA

245

95 Rockwell Place

August 2015

200

1 Hotel, 42 Furman Street

September 2015

200

96 Wythe Avenue

TBA

150

Hampton Inn, 125 Flatbush Avenue Extension

August 2014

117

TownePlace Suites, President Street and Fourth Avenue

TBA

115

La Quinta Inn and Suites, 1229-1231 Atlantic Avenue

2014

104

Clarion Hotel, 1118 36th Street

June 2014

19 Bogart Street

January 2014

La Quinta Inn & Suites, 814 Lexington Avenue

September 2014

La Quinta Inn & Suites, 437 Union Avenue

TBA

120 Osborn Street

TBA

1420 Atlantic Avenue

TBA

5911 Foster Avenue

TBA

235 24th Street

TBA

A map of hotel projects in the pipeline in Brooklyn

Source: Smith Travel Research, New York City Buildings Department, TRD reporting

“If you see success at BAM and Brooklyn Bridge Park, it will signify the arrival of an upscale customer base.” Sean Hennessey, Lodging Advisors 5,000, according to data from the hospitality analytics company Smith Travel Research. “There is a lot more interest in Brooklyn than there has been historically,” said Sean Hennessey, founder of the consulting firm Lodging Advisors. Several of the projects will be significantly larger and higher-end than most of the 60-odd hotels already up and running in the borough. Right now, there are only three Brooklyn hotels with 200 rooms or more, but six of the new ones will have at least that many rooms: The most prominent of those include 1Hotel in Brooklyn Bridge Park, being developed by Toll Brothers and Starwood Capital; Second Development Ser32 August 2013 www.TheRealDeal.com

that is dominated by chains such as Holiday Inn, Hampton Inn and Clarion. “Those are going to be high-end hotels on the level of what you would see in Manhattan,” said Brian Leary, a managing partner at commercial brokerage CPEX, who worked on the 95 Rockwell Place deal. “They are bringing us to a whole other level.”

A commanding presence

For decades, Brooklyn has been “underserved” when it comes to hotels, Hennessey said. Brooklyn has 2.5 million residents and 4,000 hotel rooms, according to statistics from the city. By contrast, less-populous

Epitomizing the fall was the 19th-century St. George Hotel in Brooklyn Heights. In its postwar heyday, the hotel boasted the largest saltwater swimming pool in the U.S. and counted Frank Sinatra, Katherine Hepburn and Duke Ellington among its guests. In the 1970s, the pool was drained and the hotel was converted to mostly apartments. A fire in 1995 eventually tore through the few remaining hotel rooms. These days, the 666-room New York Marriott at the Brooklyn Bridge, on Adams Street in Downtown Brooklyn, is considered the borough’s only successful large hotel, industry experts said. The Marriott’s main draw is that it offers enough meeting space

A rendering of the hotel planned for 95 Rockwell Place, near the Brooklyn Academy of Music in Fort Greene

Wythe Hotel, at Wythe Avenue and North 11th Street, the 73 rooms have furniture custom-made from reclaimed pine and locally sourced mini bars. Prices ranged from $280 to $910 per night last month. The Chetrit Group transformed the 64room Hotel Williamsburg on North 12th Street — the property alone cost $33 million, or $520,000 per key — into the King & Grove Williamsburg. The revamp included a rooftop terrace, pool and complimentary bike rentals. A Friday stay costs $360 to $760 pretax, according to the hotel. “The Wythe and others have shown that [Brooklyn hotels] can command a presence,” Continued on page 86

www.TheRealDeal.com March 2012 00

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Brokerages

A survey of standout workplaces By Katherine Clarke ommercial brokers have long days, filled with structuring deals, sourcing financing and pulling market data. And all those hours mean it’s important for brokers to find a firm that’s a good fit, a corporate culture that makes that time spent in the office at least tolerable — maybe even somewhat enjoyable. Money, of course, is what commercial brokers pay the closest attention to: Which firm offers the best commission splits? The most generous bonuses? But they also are on the lookout for other perks — from listings databases to Caribbean vacations — that firms are using to attract top talent and keep their brokers happy. This month, The Real Deal set out to analyze the factors that influence workplace satisfaction in commercial real estate. To do that, we asked more than two dozen major New York City commercial brokerage firms to complete a survey detailing the amenities and perks they offer. Some declined to fill out the survey, but TRD asked current and former employees and others in the industry about working conditions at those firms. And we talked with veteran brokers for their perspective. Read on for a closer look.

34 August 2013 www.TheRealDeal.com

Getting paid on commission means “I don’t have to wonder how I’m going to be rewarded by somebody making a subjective decision.” Woody Heller, Studley

Compensation models Most New York City commercial brokers work on commission rather than salary, so the commission split they’re offered by each firm is the biggest driving factor when choosing where to work. And splits vary widely by individual: At most firms, agents start at a 50-50 split, then graduate to higher percentages as they gain more experience and deal volume. When teams work together on deals, the commission is divvied up between team members, with each broker’s cut determined by factors such as seniority, who did the most work on a given deal, and who brought in the client.

Some commercial firms have different approaches to compensation, however. Brokers who work at the investment bank Eastdil Secured and Brookfield Financial, a subsidiary of Brookfield Asset Management, are not paid on commission; instead, they’re salaried employees. At both firms, commissions are pooled and distributed at the end of every calendar year as bonuses, with big-time brokers such as the Eastdil power team of Douglas Harmon and Adam Spies taking the largest cut. Eastdil declined to comment. Eric Anton, co-head of U.S. brokerage at Brookfield Financial, said the salary model means a less-competitive work environment and more cooperation, since bonuses are based in part on being a good team member. “You’re not keeping your arms around things and not sharing,” Anton said. “You’re trying to help each other, not hurt each other.” Plus, being a salaried employee means Brookfield brokers get health insurance through the company, something most commercial brokers don’t have access to (see below). Anton said the salary-plus-bonus structure has something of an equalizing effect, helping out brokers who have had a disappointing year but tempering the earnings of those on a hot streak.

ILLUSTRATION FOR THE REAL DEAL BY Tomasz Biernat

Brokerages

“If everything you touch turns to gold,” he said, “you’re not going to do as well” with a salary rather than working on commission. That’s one reason why many in the industry said they prefer the commission model. “Our brokers love that type of system because it’s got unlimited upside to what they can make as the result of their own productivity,” noted Paul Massey, CEO of Massey Knakal, which pays its brokers by commission. And bonuses are more subjective than commissions because bonuses are determined by managers and fellow team members, sources said. Getting paid on commission means “I don’t have to wonder how I’m going to be rewarded by somebody making a subjective decision,” said Woody Heller, executive managing director and a top broker at Studley, which also

Brookfield’s Lowdown Hudson Blues Festival, at Brookfield Place at 250 Vesey Street

operates on a commission model. Jones Lang LaSalle previously paid its brokers with the salary-plus-bonus model, but found that it was too difficult to attract new talent without the incentive of commissions, sources said. The company has changed to a commission model for its new brokers, and now has brokers working under both compensation plans. When asked, the firm declined to comment. Two of the city’s largest commercial brokerages, Cushman & Wakefield and Newmark Grubb Knight Frank, are trying out yet another method of compensation: giving brokers ownership interest in their companies. Cushman did a private stock offering for its employees, including brokers, in 2006. And in 2011, Newmark instituted a mandatory policy for brokers — a percentage of each commission check goes toward buying stock in the company. Cushman and NGKF declined to James Kuhn of Newmark Grubb discuss the specifics of their compensaKnight Frank tion. But the idea, sources said, is that owning stock in the company helps morale and reduces competition by giving brokers a vested interest in their colleagues’ success. Still, these stock-ownership programs have been met

with mixed reviews from brokers, who said they would prefer to decide on their own what to do with their commission checks. That may be one reason why NGKF has changed its program, which is no longer mandatory. Now, sources said, brokers have individual arrangements with the company.

pany’s Manhattan office who went on the trip last month. Similarly, about 15 top brokers in Studley’s New York office receive an all-expenses-paid winter trip abroad each year. During the trip, the firm gives out its annual “Numero Uno” award, which recognizes the top producer during the past year. Past destinations have included Paris, Berlin, Florence, Tokyo and the Caribbean. While that trip is reserved for the elite brokers, Studley also Massey Knakal’s annual company picnic, held in June at the Larchmont Yacht Club in pays for all its brokers to attend an annual Westchester. The firm also offers yearly all-expenses-paid vacations for its top producers. summer retreat, usually to a U.S. destination like Florida or California. Massey Knakal also sponsors a yearly trip for its top producers and their families. This spring, about 100 brokers attended a retreat at the Boulders resort in Carefree, Arizona. Brokers can bring anyone they want, including partners and children — all expenses paid. “I got a thank-you note from one of [the] spouses when we came back from our most recent trip,” Massey said. “She said, ‘It’s not like a work trip. It’s like I’m hanging around with good old friends.’ ” Closer to home, Massey Knakal also hosts an annual Perks To boost morale and attract new tal- company picnic; this year it was held in June at the Larchent, Manhattan brokerages also re- mont Yacht Club in Westchester County. ward their top producers with free Other companies offer smaller-scale extras to make trips, events and services. work more bearable for its agents. At the investment property sales firm Ariel Property In this category, Brookfield is a standout. The company’s sister firm, Advisors, healthy snacks from online grocery compaBrookfield Office Properties, has a ny FreshDirect are delivered to the office once a week, national arts and culture program, and breakfast — featuring fruit, yogurt and whole-wheat arts>Brookfield, which aims to liv- wraps with egg-whites and vegetables — is catered twice en up public spaces in major cities a week. Brokers at Cassidy Turley get discounts at local in which Brookfield has a presence. gyms and retailers where the firm has relationships, inIn New York, the company regularly cluding Brooks Brothers, Levenger and Dell. holds events and performances at its properties, including the Office facilities and equipment office building Brookfield While residential offices are often ground-level storeDaun Paris and Peter Hauspurg of Eastern Place at 250 Vesey Street fronts to attract passersby, commercial brokerage office Consolidated in the Financial District, spaces have a more corporate feel. that Brookfield Financial Perhaps the most impressive brokerage offices belong employees can attend for to major national firms, such as CBRE and Jones Lang free. Last month, for ex- LaSalle, which boast well-appointed spaces in Class A ample, Brookfield hosted office buildings in Midtown. CBRE’s 141,000-square-foot an outdoor B.B. King con- space at the Met Life Building at 200 Park Avenue, for excert at Brookfield Place as ample, has interactive white boards in all conference and part of the Lowdown Hud- training rooms, plus a dining room and terrace. The space son Blues Festival. Another was designed in 2011 by the California-based design firm event was “New Fish City,” Gensler, and reportedly cost more than $30 million, or a seafood festival with $225 per square foot, to build out. more than a dozen seafood When it comes to facilities, one area where firms differ restaurants and a beer gar- is their approach to private offices. Large firms such as den. Brookfield also spon- CBRE and JLL have private spaces for their senior brosors the Tribeca Film Fes- kers and executives, but some firms prefer to have their tival, giving brokers the chance to top brass sit among their more junior colleagues. Firms that take this approach, including Ariel, Massey Knakal pick up free tickets to premieres. When it comes to rewarding and the retail brokerage Ripco, say it encourages more its top producers, one stand-out collaboration. Massey sits in “the bullpen” at his firm’s 275 Madison company is the national investment services firm Marcus & Avenue headquarters along with co-founder Bob Knakal. Millichap, which has roughly 85 The configuration, he said, gives newbie agents greater agents in its Manhattan office. access to managers than they would have otherEach year, the company provides wise. And, he said, the trading floor–style an all-expenses-paid trip for all atmosphere impresses clients who stop senior brokers who have done in by the office. excess of $2 million in gross deals. “We position them in the conThis year’s destination: California’s Napa Valley, where ference room so as that they’re brokers went wine tasting, golfed and played tennis, ac- sitting right next to the tradcording to J.D. Parker, a first vice president in the coming floor,” he said. “It drives a

www.TheRealDeal.com August 2013 35

Brokerages

big message about how collaborative our people are.” Cassidy Turley and Lee & Associates encourage collaboration with socalled “living room” spaces, rooms with comfortable chairs and sofas. At Lee’s 600 Madison Avenue office, which houses about 40 brokers, the living room space also has a ping-pong table, and brokers use the room for informal meetings and office celebrations.

also reimburses employees for education courses that are not applied toward a degree, such as business certifications.

Health care and benefits Most commercial brokers are independent contractors, which keeps them from getting benefits such as health insurance or Paul Massey, co-founder of paid vacation time. Massey Knakal Indeed, many companies purposefully don’t offer these benefits so the Internal Revenue Service doesn’t categorize their brokers as employees. But both CBRE and Cushman & Wakefield offer a package of benefits to commission-based brokers. At Cushman, brokers receive benefits similar to those offered to employees, including medical, dental and vision insurance as well as disability coverage, a company spokesperson said. Other firms pay a percentage of their brokers’ insurance premiums. Peter Riguardi of Massey Knakal, for example, pays 50 Jones Lang LaSalle

brokers is considered company property. That’s a selling point for brokers thinking of giving Marcus & Millichap a try, Parker said.

Company culture

The office culture of a commercial real estate firm is largely determined by whether a firm is privately owned or publicly traded, Training sources said, as well as the system Commercial real estate brokers are required to be licensed that brokers operate under. before they start working on deals, which involves taking Public companies tend to be classes and passing a written exam. Some firms hire dipressure cookers because they have to rerectly from real estate schools. Still, brand-new brokers port to investors, brokers said. aren’t always ready to jump right into deal-making. “When you work for a publicly owned Commercial firms take a variety of approaches to trainfirm, you have to report quarterly,” said ing their brokers, from mandatory courses to mentorship Studley’s Heller, who worked at publicly programs. traded JLL. “That’s a very different mindAt Eastern Consolidated, new brokers are required to set, which imposes certain pressures and take part in AdvanceTrac, a 12-month training program. short-term thinking, which are difficult to The program includes weekly training sessions on subjects work with. At the end of the year, or the end such as marketing, real estate analysis, local market knowlof the quarter, I’d have people walk into my edge and technology, as well as menoffice and ask, ‘Is there any way to acceltorships with senior brokers. Also as erate the closing of this transaction?’ That may not be the right thing to do for the transaction.” part of the program, newcomers work on deals with several senior brokers, At privately held Studley, by contrast, “We don’t rather than being placed permanentreport to anybody but ourselves,” Heller said. “That ly on a team. gives us a lot of flexibility to do what we think is Mark Schnurman, director of sales right.” Heller also noted that many of Studley’s manand training, drew on his experience of agers are themselves brokers who are working on training programs at one of his former their own deals as well as supervising others. He companies, investment bank Morgan considers that an advantage. Stanley, to create a custom program “All the managers are brokers and understand for Eastern. The program, he said, alBrookfield’s New Fish City event, a festival featuring more than a dozen seafood what brokers need and want,” he said. lows newbie agents “to partner with restaurants and a beer garden the best brokers in the industry on a Other managers who are also top brokers indeal-by-deal basis, as opposed to being tied percent of the premium for its bro- clude Massey Knakal’s Knakal and Mary Ann Tighe, who up with one or two brokers.” kers’ medical, dental and vision in- is CEO of the tri-state region at CBRE. But other firms have a different take. Marcus & MilliOne graduate of the program closed a deal surance. HFF brokers pay the same within six weeks of completing the training, rates as all other employees at the chap prefers that its managers not do deals, Parker said, Schnurman said, and another one got “four company — between 25 and 30 per- to “make sure that [managers] are aligned 100 percent exclusives in 10 weeks.” cent of the overall costs. with the agents.” Another factor that impacts brokers’ happiness is the At Massey Knakal, new brokers are resystem for how deals are divvied up. Some firms, such as quired to participate in a 90-day “Initial SucTechnology cess Training” program, with classes led by Almost all Manhattan firms provide the retail brokerage Winick Realty and Massey Knakal, diindustry professionals from both inside and their agents with access to a variety vide the New York metro area into geographic territories. outside the company, on topics such as underof software programs and online The idea is that the client is better served by brokers who writing, transaction management, closings subscriptions to help them navigate know the area inside out and can underwrite or evaluate properties more accurately. and maintaining relationships. After that’s the market. Mary Ann Tighe of CBRE Group completed, optional continuing education is Those programs generally inPlus, it helps encourage “collegiality and order,” Massey offered at no cost to all brokers at the firm. clude CoStar, Loopnet, LexisNexis, Land Vision, MapNet, said. Another popular form of training is mentoring. Mar- PropertyShark and Real Capital Analytics. Most compaWhile some brokers thrive under the territory model, cus & Millichap has a different take on the concept: Junior nies also maintain their own listings databases, which are others said the system is restrictive for brokers who would brokers interview senior executives, then choose their own updated by agents as deals are made. prefer to work all over the city. Consistently ahead of the pack is Marcus & Millichap, mentor. Often, the junior broker then joins the senior broOther firms have more flexible models. At the retail ker’s team. which has been ranked by InformationWeek magazine firm Ripco, brokers can do deals with colleagues on othThe program “leverages senior brokers’ skill sets and as one of the top 100 U.S. companies for technological er teams and in neighborhoods outside their regular track records and accelerates the learning curve” for junior innovation. Marcus & Millichap has an online property stomping grounds, said Richard Skulnik, agents, Parker said. search program that allows agents to browse through more a partner at the firm. In fact, he attributed the firm’s retention rate of approx- than 3.3 million properties for new listings, inventory and “We don’t block anybody imately 75 percent, which he said was high in the industry, closed sales. The company also has gained recognition for from certain listings,” Skulin part to that policy. its Smartphone app, which is reportedly the first of its kind nik said. “[Our system] alThe mortgage bank Holliday Fenoglio Fowler, which to allow investors to communicate directly with the agents lows you to take part in has an investment sales and capital markets advisory arm, representing them. leasing throughout the Plus, Marcus & Millichap agents are given software to city instead. You’re not also stands out for its educational offerings. Besides mentoring and educational workshops, HFF pays up to $4,000 maintain their own databases, Parker said, and if a broker forced just to work per year toward any college or post-graduate class, to help leaves the firm, their information goes with them. At oth- in one neighborits staffers earn MBAs and other degrees. The company er brokerages, by contrast, the information gathered by hood.” TRD

36 August 2013 www.TheRealDeal.com

C OME GROW W I T H US

JAMES M. GRICAR Promoted to President

DIANE M. RAMIREZ

Promoted to Chief Executive Officer

RICHARD J. GROSSMAN

Promoted to EVP, Managing Director

In the last 5 years alone, Halstead has grown to 28 offices in three states. This growth has enabled our team of professionals to service clientele no matter their housing dream: From Primary Residence to Pied-a-terre, Country Home to Weekend Beach Escape. Our agent roster has doubled in size, and our executive team has grown as well.

SARA ROTTER

Promoted to Executive Director of Sales Downtown

NANCY HARDY Recently Named Director of Sales Southampton

TRISH MARTIN

Promoted to Executive Director of Sales Brooklyn

EUGENE CORDANO

Promoted to Executive Director of Sales New Jersey

ANTHONY DEVIVIO

GUS PERRY

SANDY WILSON

TAMMY FELENSTEIN

Recently Named Executive Director of Sales Harlem, Washington Heights, & Riverdale

Recently Named Director of Sales Harlem

Promoted to Managing Director Hamptons

Recently Named Director of Sales Stamford

Meet our executive team at halstead.com/executives

Pr o f i l e

Huang out to dry

Notorious Queens developer may be banned from real estate, but problems at his projects live on

By David Jones or a while, it seemed like developer Thomas “Tommy” Huang was living the American dream. The immigrant businessman came to New York nearly 40 years ago and parlayed a Queens College education into a multimillion-dollar real estate empire. But it all came crashing down in June, when Huang and his wife, Alice, pleaded guilty in Queens Supreme Court to charges of felony securities fraud. The couple agreed to a deal that prevents them from working for at least five years in New York construction and real estate. The ban, in combination with a fatal 2011 accident at one of Huang’s Queens development sites, could put the final nail in the coffin of Huang’s storied 35-year career. “Mr. Huang’s misconduct stretches back decades, and includes unsafe construction sites, environmental crimes, building code violations and fraudulent securities transactions,” state Attorney General Eric Schneiderman said in a June statement. “This egregious and unscrupulous greed on the part of the Huangs, and their blatant disregard for the law and safety of others, must stop.” Huang, 59, and Alice Huang admitted to developing and selling units at the Broadway Tower Condominium at 85-23 Broadway in Elmhurst, Queens, despite a 1999 ban by the AG’s office barring them from marketing and selling real estate in New York. That original ban, which was more limited in scope, stemmed from the duo’s failure to pay more than $325,000 in common charges at two of their condo developments, and a notorious oil spill at the landmark RKO Keith’s Theater in Flushing. Under the new plea agreement, the Huangs must turn over all profits from sales at Broadway Tower, estimated at $3.3 million, and pay another $1.5 million in penalties and fees. Besides being banned from marketing and selling properties, the couple will no longer be allowed to work in any aspect of the real estate or construction business — a more extensive ban than the 1999 penalty. Their 35-yearold son, Henry, is now also banned from selling real estate. The court named Kew Gardens attorney Gary Darche as receiver of the commercial units at the Broadway Tower condo, which will be sold at auction. At a sentencing hearing scheduled for Sept. 18, Huang is expected to make the $4.8 million payment.

38 August 2013 www.TheRealDeal.com

Tommy Huang

“This egregious and unscrupulous greed on the part of the Huangs, and their blatant disregard for the law and safety of others, must stop.” State Attorney General Eric Schneiderman Attorney Marvin Kornberg, who represented Huang, told The Real Deal that his client had committed only a “technical violation” and been the victim of bad advice from a previous lawyer. “Nobody lost a dime” as a result of Huang’s actions at Broadway Tower, Kornberg said. The Huangs may now be out of the real estate game, but litigation and problems linked to their projects continue, industry insiders said. Huang is “the poster child for illegal and

unsafe construction,” State Senator Tony Avella, a former council member from northeast Queens and a longtime critic of Huang, told TRD.

Building an empire Huang left his native Taiwan in 1974 at age 20 and settled in Flushing, Queens. A few years later, he married Alice Liu, heiress to Taiwan’s Haw Di-I Foods and Bull Head Barbecue Sauce fortunes and cousin to City Comptroller John Liu, a Democrat

who is running for mayor. While studying business at Queens College, Huang saw opportunity in Flushing’s many vacant properties and decided to go into the real estate business. “I could not believe it,’’ Huang told the New York Times in 1997 of the empty land he saw around him. “How come nobody wants to buy it?’’ With the help of his wealthy father-in-law, Huang built seven high-rises and hundreds of houses. By the late 1980s, he had been credited with helping to revive downtown Flushing with projects such as the Golden Shopping Mall and Main Street Tower, a nine-story office building. In 1986, Huang paid $3.4 million for the dilapidated RKO Keith’s movie theater on Northern Boulevard in Flushing. Huang closed the landmark and began work on the site, with plans to develop it into a major shopping center. Huang had a natural affinity for real estate, said Thomas Donovan, a partner at Massey Knakal who has done several deals involving Huang over the years. “He’s like one of the old-school geniuses,” Donovan said. “He can look at [a site] without penciling it out, and be right. If he liked something, he moved on it, and moved on it quickly.” Soon, Huang caught the eye of the Democratic political machine, which at the time was led by then-Queens Borough President Donald Manes. Working with Manes to encourage business development, Huang solidified his ties with the Queens political establishment, which helped him evolve into one of the most powerful real estate developers in the borough. “They were grooming Tommy to be the fair-haired boy,” said Jerry Rotondi, a member of the Committee to Save the RKO Keith’s and a long-time critic of Huang. “He was the symbol of the revitalization,” State Senator Leonard Stavisky told the New York Times in 1997. “But it was wrong to entrust so much of it to Tommy Huang.’’

A violent act Trouble was on the horizon early on. In a highly publicized 1982 incident, a Molotov cocktail was thrown into a Flushing

www.TheRealDeal.com January 2011 25

Pr o f i l e building where Huang wanted to build a condominium. The bank that owned the site had refused to sell it to a group of investors headed by Huang. After the fire, Huang upped his bid, and the bank sold. But local politicians cried foul in the press, demanding an investigation of what was called an “arson for profit’’ ring. No one was ever charged, and Huang said he knew nothing about the blaze. Then as the booming market of the 1980s came to an end, Huang fell on hard times, declaring bankruptcy in 1993. A year later, the attorney general’s office sued the Huangs for failing to pay more than $325,000 in common charges at two buildings they had developed: Flushing Towers, at 33-70 Prince Street, and the Main Street Plaza condominium, at 133-36 41st Road. At the time, more than half of the apartments in the two buildings remained unsold; under state law, condo developers are required to pay common charges on all unsold units. Problems also arose at RKO Keith’s. Huang bulldozed a landmarked staircase inside the building, and allowed thousands of gallons of heating oil to spill into the basement from an adjacent alleyway, officials said. They claimed he then attempted to cover up the spill by submitting a false letter of compliance to inspectors. In 1997, Huang was arrested on charges related to the theater and indicted on one count of endangering the public health in the third degree. He eventually pleaded guilty, was placed on probation and ordered to clean up the site, which he later sold to developer Shaya Boymelgreen for $15 million. Today, developer Patrick Thompson has the site and hopes to move forward with a retail and residential project there. That same year, Huang and his wife pleaded guilty in the Flushing Towers/ Main Street Plaza case, prompting thenState Attorney General Eliot Spitzer to ban them from selling real estate securities, including condos and co-ops, though they were still allowed to engage in commercial real estate. But the Huangs purposefully flouted the ban, according to the June lawsuit filed by the AG’s office, which had launched a probe of the building after receiving multiple complaints about Huang’s development sites, according to officials familiar with the case. Henry Huang, who in recent years has emerged as the public face of the family business, in 2008 started selling condos at the eight-story Broadway Tower project. He secretly let his parents serve as vice president and secretary of the condo board, the AG’s complaint alleged, despite giving a sworn statement that he was the sole principal of the sponsor group. According to the lawsuit, his father executed several brokerage contracts, sales contracts and corporate resolutions on behalf

28 March 2012 www.TheRealDeal.com

of the sponsor entity, while his mother executed deeds to purchasers. Under the terms of the plea deal, the Huangs admitted to developing and selling six commercial and 27 residential units at Broadway Tower, and agreed to surrender their remaining ownership interests at the project. Kornberg argued that the charges are

resolved, but it’s far from the only project linked to Huang where problems have arisen. Over the years, Huang’s projects have repeatedly been cited for lack of proper documentation and safety protocols. Most notably, in 2011 a construction worker died at a development site owned by Huang at 84-18 Queens Boulevard in

Alice Huang (center), daughter of a wealthy businessman and cousin to city Comptroller John Liu.

Left: the Broadway Tower Condominium at 85-23 Broadway in Queens, where Tommy Huang and his wife, Alice, admitted to developing and selling units despite a 1999 ban by the AG’s office barring them from doing so. Right: John Liu.

In 1986, Huang paid $3.4 million for the RKO Keith’s movie theater in Flushing. Huang closed the landmark and began work on the site, with plans to develop it into a major shopping center.

trumped up, and that his client had a right to be reinstated into the real estate business but received bad advice from his previous counsel. “The lawyer that he had did not advise him that he had a right to go into court to lift the ban,” Kornberg said.

A worker’s death The Broadway Tower case may now be

East Elmhurst. The worker, Hedilberto Sanchez, 26, was killed when a concrete wall collapsed at the site, where Huang was building a five-story residential building. Three other workers were injured. In the wake of the accident, the U.S. Labor Department’s Occupational Safety and Health Administration fined three companies, one of which was H Rock Corp., chaired by Huang’s son,

Henry. H Rock agreed to pay $26,470 in a settlement with the agency, according to OSHA. The project has been idle since a stopwork order in 2012, and city records show Huang sold the property in June for $3.3 million to an entity called Wing Fung. Nonetheless, litigation involving the site continues. The owners of several adjacent properties claim improper construction practices have damaged the structural integrity of their buildings. D&D Glass is suing Huang, alleging that improper shoring and bracing at the construction site caused cracks in the walls of its building. The Huangs repeatedly promised to fix the damage but never followed through, said Vincent Pallaci, an attorney for D&D, adding his client repeatedly complained to the Buildings Department about construction problems at 84-18 Queens Boulevard. That’s a constant theme among many of Huang’s critics, who claim government regulators have been slow or unresponsive to complaints about his practices. “For some reason, he’s been protected,” said Rotondi. It’s been suggested that Huang’s political ties with the city comptroller and others could partially explain the city’s inaction. The comptroller’s office did not respond to TRD’s request for comment. When it comes to lawsuits, Huang has used his family’s vast wealth to overwhelm opponents in court, Avella said. “What he relies upon is the weak response of the Department of Buildings,” said Avella. “He also relies on the fact that the neighboring property owners just give up on him [in court].” Another controversial Huang-owned site is at 223rd Street and Mia Drive in Bayside, where Huang has been in the process of developing four new houses on what had previously been a single-family lot. Local homeowners and the community board have fought the project, which Avella said was built without proper foundations; as a result, the homes are under constant threat of sliding into the nearby Cross Island Parkway. In 2004, a retaining wall collapsed at the site. The project is the subject of an ongoing lawsuit in State Supreme Court, and has 11 open violations from the Department of Buildings, according to the city’s website. Henry Huang told officials earlier this year that he planned to take over the project from his parents, but it’s unclear what will become of the property in the wake of the family’s plea deal. “We’re sitting with four abandoned homes that are a mess, and we’re afraid they [will] be vandalized,” said Susan Seinfeld, district manager of Community Board 11, which includes Bayside. “No one seems to know at this point what’s going to happen.” TRD

www.TheRealDeal.com August 2013 39

Residential

Common charges: How low can they go?

Condo boards cut costs, raise revenue to ease resident fees By Hayley Kaplan ow common charges have always been a draw for buyers on the hunt for a luxury condo. Even in this fast-moving market, condo boards are paying close attention to monthly fees. Across the city, board members are looking for creative ways to reduce common charges and, at the same time, beef up amenities. The Atelier at 635 West 42nd Street The goal: to make their buildings as attractive as possible to home seekers as well as to current residents, many of whom are still working their way back financially from the recession, experts told The Real Deal. This month, TRD ranked condos in Manhattan below 100th Street with more than 50 units, then delved into how a few are managing to offer both rock-bottom fees and top-of-the-line services. For those 366 condos surveyed, monthly common charges — the building’s operational and maintenance expenses — range from slightly less than a dollar per square foot to nearly $4, according to data compiled by StreetEasy for TRD. Cooperatives are not included in the numbers because their fee structure is much different, often including any mortgage that the building carries. Consequently, coops generally have much higher monthly charges. The lowest common charges are at Downtown by Philippe Stark at 15 Broad Street, where residents pay 92 cents per square foot yet have a doorman, a concierge, a fitness center, a roof terrace and a host of other amenities. The former J.P. Morgan headquarters building nabbed the top spot for two big reasons, according to Douglas Elliman broker Ariel Cohen: its high number of units, 382, and the high square footage in those apartments. Just tailing 15 Broad is the Atelier at 635 West 42nd Street, which charges 97 cents. And rounding out the top five: the Alexander at 250 Hudson Hill East 49th Street, 99 cents; Condominiums at 35 West 15th Street, $1; 462 West 58th Street and Hudson Hill Condos at 462 West 58th Street and the Rushmore at 80 Riverside Boulevard, both $1.04. The highest is $3.98 per square foot, at Cove Club at 2 South End Avenue in Battery Park City, followed by the Baccarat Hotel & Residences at 20 West 53rd Street, at $3.88. The Cove Club is on a land lease, which accounts for its comparatively expensive charges; the Baccarat ranks up there because of its ultra-luxury status. The other three condos with the priciest common charges are Trump International at 1 Central Park West, $3.63; the Beekman at 575 Park Avenue, $3.35; and Helmsley Carlton House at 21 East 61st Street, $3.17.

40 August 2013 www.TheRealDeal.com

The vanishing tax break Of the five condos with the lowest fees, all except 35XV — the tapered glass tower is still under construction — have 421a status. And the exemptions play a big part in why homeowners in the buildings are paying much cheaper common charges, at least right now. The city launched the 421a program in 1971 to reward developers who put their projects on underused or unused land, but the number of exemptions reached into the thousands from when the last boom started in 2004 until the market hit the skids in 2008. Today, a record number of condos — more than 43,000 — have 421a status. How long a building gets an exemption depends on where it is, explained Doug Perlson, founder and CEO of the online brokerage RealDirect. Condos below 96th Street generally have a 10-year deal; those in Upper Manhattan and the

years or so, when that tax abatement is up, some of those big amenities that might have seemed like a great idea in a new-construction offering might not have [made] a lot of sense.” Most condo boards have followed the lead of the developers and passed along the exemptions, giving residents a break on their monthly charges. The exemptions, though, begin to decrease annually after the first two years, which usually translates to hikes in the monthly charges. The 11-year-old Park Imperial at 230 West 56th Street, for example, will see its 421a exemption go away next year, according to StreetEasy, which helps explain why its monthly charges of $1.73 per square foot put it solidly in the middle of the pack, at 143rd on TRD’s list. Many newer projects, though, have exemptions for almost another decade, StreetEasy shows. The exemption for 20 Pine, only six years old, runs out in 2021. Those “tax abatements are keeping their monthly [costs] low today,” Perlson said. “But over time, those monthly [costs] are going to increase substantially.”

Making deep cuts The gradual increase in taxes, coupled with the struggling housing market during the downturn, focused many of Manhattan’s condo boards Dan Neiditch heads on lowering the monthly the Atelier’s board. fees. Atelier residents, for example, have seen their charges drop twice in the past five years — from 92 cents to about 80 cents in 2009 and to 72 cents in 2010, according to board president Dan Neiditch. StreetEasy puts the Atelier’s number at 97 cents, which Neiditch attributes to brokers entering the 2008 fee into the website’s database. Atelier took its biggest cost-cutting measure a little more than a year ago, when it terminated its contract with the city’s largest property management company — Cooper Square Management, now called FirstService Residential of New York — and hired an on-site manager to supervise the building’s staff members, pay the bills and handle residents’ complaints. The switch saves the Atelier about $200,000 annually, though Neiditch declined to specify how much the Atelier paid the management company and how much it pays the on-site manager. “You don’t really need a management company,” said outer boroughs have exemptions that range from 15 to 25 years. Neiditch, president of the boutique brokerage River 2 More than a few of the developers who River Realty, which handles sales at the Atelier. “You just received the 421a exemption put up luxu- need a board that’s hands-on and willing to dedicate some ry buildings that have rooftop decks, play- time out of its schedule to decrease the costs and look for rooms, libraries, concierges — the list goes on. Then, they ways to generate revenue.” set the monthly charges until their condo boards are in Not all boards, though, are willing to pitch in and help, place. especially since members are not paid. “I do think that developers will try to keep those com“Often, boards have difficulty finding people to volmon charges as low as possible initially, because you sell unteer,” said Roberta Axelrod, Time Equities’ director of units for a higher price [as a result],” Perlson said. “In 10 residential sales and rentals, who sits on some 10 condo A rendering of 35XV at 35 West 15th Street

Residential Simply trimming expenses

A rendering of the Baccarat at 20 West 53rd Street

and co-op boards by virtue of Time Equities’ interest in the buildings. Still, she said, “the involvement of active boards makes a very big difference in the quality of life and in the economics” of the building. More-active boards can stay on top of management companies to make sure they are meeting the building’s goals. “An active board keeps the management company attuned to whatever its agenda is,” Axelrod said. “Some are particularly focused on trying to save money. Some are more focused on lifestyle or aesthetic improvements.” Unlike Neiditch, others in the industry don’t recommend that a building ditch its managing agent. Stephen Kliegerman of Halstead Property, which has a property management arm, pointed out all the tasks that management companies handle in large properties — from handling emergencies and repairs to paying bills to implementing changes in building codes. “Managing agents bring a lot of experience and value to the table,” Kliegerman said. “You may be thinking that you’re saving money, but how do you know what the right insurance coverage is, [for example, and the] right amount to pay for the insurance? So all of a sudden you may think you’re saving money, but you save money in the short term but not in the long term.”

There are other, less drastic steps buildings can take to lower their common charges. The 408-unit 20 Pine, for example, charges its residents a monthly fee of $1.07 per square foot — putting it tied for eighth on TRD’s list of the least expensive buildings — because of small steps that have added up to big savings. FirstService Residential’s Drew Kantor, the building’s manager, cites the “constant” evaluation of the property’s 20 contracts. The building’s board, according to Kantor, makes it a priority to review two of its 20 contracts every month to ensure residents are getting the most competitive rates and highest-quality services. In January, for example, the building renegotiated the mortgage rate on the superintendent’s apartment from 8 percent to about 4 20 Pine in the percent — for a savings of about Financial District $28,000 annually. Some buildings have even looked to reduce monthly fees by cutting staff, since labor costs — specifically pay and benefits — are typically a building’s biggest maintenance expense, industry professionals said. Axelrod and her fellow board members at 7 Dutch Street Condominium in the Financial District decided to control costs by reducing its payroll spending. Today, the building shares a superintendent with nearby 80 Nassau Street, 15 Dutch Street and 41 John Street, all also owned by Time Equities. Each buildDeveloper Ken Horn is behind 35XV. ing has fewer than 50 units, making the 200 total not unreasonable from a superintendent’s standpoint. The savings are “substantial,” Axelrod said, though she declined to give an exact figure. Of course, cutting staff also means reducing service to residents. At 7 Dutch Street, superintendent services are now part-time, Axelrod said. Both 20 Pine and the Atelier zeroed in on energy efficiencies to help their bottom lines. At 20 Pine, an LED

Manhattan condo buildings with the lowest common charges Ranking Building Name

Address

Common charges, per sf

Units

Downtown by Philippe Starck

15 Broad Street

$0.92

382

Atelier

635 West 42nd Street

$0.97

478 88

The Alexander

250 East 49th Street

$0.99

35XV

35 West 15th Street

$1.00

5 (tie)

Hudson Hill Condominiums

462 West 58th Street

$1.04

5 (tie)

The Rushmore

80 Riverside Boulevard

$1.04

289

+art

540 West 28th Street

$1.06

189

8 (tie)

100 West

100 West 93rd Street

$1.07

280

8 (tie)

20 Pine The Collection

20 Pine Street

$1.07

408

10 (tie)

The Laurel

400 East 67th Street

$1.09

129

10 (tie)

752 West End Avenue

$1.09

179

William Beaver House

15 William Street

$1.11

319

13 (tie)

Stewart House

70 East 10th Street

$1.14

360

13 (tie)

150 Nassau Street

$1.14

125

lighting program that cost $380,000 has already saved $200,000 in electricity costs since it was installed last year. And the Atelier saw its electricity bill drop by 30 percent after it installed solar panels two years ago; the $60,000 investment has already been recouped, Neiditch said. Finally, when condo board members think they have shaved expenses all that they can, they turn to raising revenue to help hold down common charges. The Atelier, for example, rents out its Sky Lounge for up to $10,000 per event, and earns $100,000 a year from storage units that it rents to its residents for $2,000 annually, Neiditch said. Sometimes, between the cost-cutting and the fund-raising, buildings have enough in their bank accounts to add amenities. The Atelier has built a movie theater, an office center, a tennis court and a dog run. At 20 Pine, Kantor said, the children who live there have a playroom. And another of Axelrod’s buildings, the Amos Street Condominium at 223-225 West 10th Street, has installed storage space and a laundry room.

Raising sale prices For residents still feeling financially fragile from the downturn, the combination of more amenities and lower common charges is a boon. But the windfall is much more than a better quality of life and more money in their pockets: It has raised the value of their homes. Lower common charges especially translate to higher sale prices, brokers said. “Buyers are willing to pay more for a home with a lower monthly outlay,” said The Alexander at Halstead’s Kliegerman. 250 East 49th Street As Warburg Realty’s Caleb Hartzler explained: A comparatively smaller monthly fee allows buyers to look for apartments in “a higher price point. “If it brings down [buyers’] net monthly costs,” he said, “it does sometimes enable them to obtain a larger mortgage.” All of the Atelier’s efforts to reduce common charges have driven up the value of its apartments, Neiditch said. A cost comparison of the Atelier and the Strand, just blocks away at 500 West 43rd Street, drives home the tie between common charges and property values. At the Atelier, the average price per square foot of apartments sold in the last year was $1,178. At the Strand, the average price per square foot of sold apartments was $1,034. Its common charges, according to StreetEasy: $1.94 per square foot, nearly a dollar more than the Atelier’s. “The lower your maintenance fees are, the higher the price the condo will sell at,” Neiditch said. “If your maintenance fees are crazy-expensive … it lowers the price of the apartment to compensate for it.” TRD

Source: StreetEasy; all are condos below 100th Street with at least 50 units; common charges are based on units sold from April 2012 to April 2013.

www.TheRealDeal.com August 2013 41

TH I S M O N T H I N

R EAL E STATE H ISTORY A look back at some of New York City’s biggest real estate stories 1961: UN AFRICAN DELEGATES COMPLAIN OF HOUSING BIAS

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nited Nations delegates from Africa formally complained they had been discriminated against in their search for housing in Manhattan, 52 years ago this month. The delegates wrote a letter to Secretary-General Dag Hammarskjold outlining a range of bias that they had encountered. A traffic stop is what prompted the members to send the dispatch, but apartment hunting was one of the biggest injustices they cited. Discrimination against Africans surged because of the record number of African countries that joined the international body in 1960 — a total of 16 nations. The UN had anticipated the discrimination; in a secret meeting in June 1960, U.S. Ambassador Henry Cabot Lodge notified Henry Cabot Lodge the Real Estate Board of New York of the incoming delegates. Despite that outreach, though, about a third of the 80 or so new African members had trouble finding homes, the New York Times reported. Two of the obstacles that the delegates encountered were landlords wary of their diplomatic immunity and location. A landlord had no recourse against a member, because of his diplomatic immunity, if he damaged an apartment or left without paying rent. As for location, the delegates wanted to live near the UN in Midtown — not in Harlem, a historically black neighborhood that they considered “degrading” and “unsafe,” according to news reports at the time.

1940: NYCHA FILES PLANS FOR FIRST GARDEN-STYLE HOMES

he New York City Housing Authority filed building plans for its first low-rise, garden-style apartment homes — and its first project in the Bronx — 73 years ago this month. Officials with the city’s public housing agency proposed spending $2.2 million to build Clason Point Gardens, a development of mostly two-story row houses for more than 400 families in the Soundview section of the South Bronx. The plans called for the complex to sit on 17 acres bounded Clason Point Gardens by Story, Seward, Noble and Metcalf avenues. Before Clason Point Gardens, NYCHA had the practice of putting up large apartment buildings that each housed hundreds of residents. The first tenants, low-income families headed by military veterans, moved into their homes in September 1941. A photograph from the project’s dedication in 1942 shows an all-white crowd, the New York Times reported. NYCHA still owns and manages the 401 apartment units in the 46 cinder block buildings, which by the early 1990s had mostly black and Latino residents.

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emolition of the historic Five Points Mission House, just north of City Hall on a site with an infamous past, began 98 years ago this month. The six-story building, at 63 Worth Street, was home to a charity operated by the Ladies’ Home Missionary Society of the Methodist Episcopal Church. It was the location, though, not the use, that made the house notorious. Across the street from a triangular patch of land called Paradise Park, the building was in the middle of Five Points, an area that left less than a favorable impression on British author Charles Dickens. “This is the place [Five Points], these narrow ways, diverging to the right and left, and reeking everywhere with dirt and filth,” Dickens wrote in an account of his American travels. The building rose on the site where a decrepit tenement building known as the Old Brewery, famous for being a center of vice, once stood. Five Points Mission In 1913, a state Courthouse Board picked a design for the new Courthouse building as part of a sweeping cleanup of the crime- and gang-ridden neighborhood. By the next year, demolition of the area was underway. Construction started in 1919, and the neoclassical building was completed in 1927 at a cost of $30 million. Compiled by Adam Pincus

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Profile

Political players A look at the NYC real estate executives bringing change to Washington, D.C.

By C. J. Hughes ll politics is local, the late House Speaker Tip O’Neill famously noted, and there are few businesses where that rule of thumb is more important than real estate. After all, putting up a building in New York means wading through a thicket of government regulations — permitting, zoning, landmarking — that elected leaders may have significant sway over.

in 2007 for selling 14 Penn Plaza at 225 West 34th Street, reportedly for a profit of $250 million. Mosler sees his work with BENS as his civic duty, not a way to further his career. “I do it out of a sense of responsibility and patriotism,” Mosler said, noting that he got involved in BENS through Manhattan’s Intrepid Sea, Air & Space Museum. “I feel very strongly that our country Not surprisingly, then, the city’s real is at a crossroads.” Other volunteer efforts in the nation’s estate professionals have a long history of lobbying lawmakers and donating to po- capital also have — at least on their surlitical campaigns; just this spring, for ex- face — little to do with real estate. For ample, developers, landlords and unions example, Peebles, who is developing a hocreated a new political action commit- tel-condo in Tribeca, serves as vice chairtee called Jobs for New York, which ex- man of the Congressional Black Caucus pects to spend $10 million on the fall City Foundation, which describes itself as a nonpartisan public policy, research and Council elections. But industry veterans also lend their educational institute dedicated to helpexpertise to governing on the national ing underserved communities. An offshoot of the Congressional stage. Right now, for example, Cushman & Wakefield’s Bruce Mosler and developer Black Caucus, the foundation will hold Don Peebles sit on the boards of national its 43rd annual legislative conference groups, help lawmakers draft legislation next month in Washington, to focus on and advise them on a wide range of issues. the issues affecting the African-AmeriMosler chairs a Washington-based can community. Attendees will include group called Business Executives for U.S. Reps. Donna Edwards and Cedric National Security, a 31-year-old non- Richmond, and Peebles said he would be partisan organization that aims to im- in attendance. Peebles, though, has political connecprove national security through busitions besides ness solutions. his work with He also has the foundation served on the and his relaDefense Busitionships with ness Board, a caucus memgroup of busibers. Both Peeness executives bles and his who advise the wife, Katrina, Department of ardent Defense on ev- Neil Binder, Coldwell Banker Bellmarc are supporters of erything from streamlining the acquisitions process to President Obama. They were key fundmodernizing the military’s retirement raisers in both his campaigns; in 2011, the couple even hosted the President and system. A member for three years, Mosler about 140 other of his supporters for a meets with the group a few times every fund-raiser at their Washington home. With other organizations, the D.C. quarter, mostly in D.C. Occasionally the group meets at Cushman’s Midtown tie-in to New York real estate is more oboffices to hear distinguished speakers, vious. Many industry executives belong such as military officers who teach at the to the Urban Land Institute, a Washington-based think tank focused on planFletcher School at Tufts. BENS’ board includes the top lead- ning, affordable housing and transporers at investment banks, tech compa- tation issues. Members include Michael nies and law firms, as well as a handful Fascitelli, the CEO of Vornado Realty of other real estate executives from New Trust; Robert Ivanhoe, who chairs the York. One is investor Andrew Borrok of global real estate practice at Greenberg Borrok Properties, who made headlines Traurig; Joseph Azrack, a managing

“You try to make a difference, but you’ve got to get to the right people. And it can be a battle and a fight. Be prepared for a long haul.”

44 August 2013 www.TheRealDeal.com

partner of Apollo Global Real Estate; and Bob Lieber, New York City’s former deputy mayor, who now works with Island Capital Group, a merchant bank. Jeff Blau, CEO of the Related Companies, is a trustee. Ivanhoe and several others declined to comment.

Uphill battle

Bruce Mosler, CHAIRMAN OF Cushman & Wakefield

Neil Binder, president of Coldwell Banker Bellmarc

Don Peebles, CEO and chairman of the Peebles Corporation

Trying to effect change in Washington can be an uphill battle. “You try to make a difference, but you’ve got to get to the right people,” said Neil Binder, president of New York–based residential brokerage Coldwell Banker Bellmarc. “And it can be a battle and a fight. Be prepared for a long haul.” A decade ago, Binder, a certified public accountant, set out to fix what he considered a problem with the federal tax code: If homeowners refinance a home loan, they are only permitted to deduct the mortgage interest on the new loan, and not the interest on the loan that preceded it. For a few years, Binder flew to Washington once a month, and took his case to then-Rep. Tom Reynolds, a Buffalo, N.Y.-area Republican sympathetic to the cause. He also reached out to then-House Speaker Dennis Hastert, and to representatives from AARP, since older Americans are among those most affected by the tax-code provision. Binder also met with the Manhattan Institute, a center-right think tank. The result of all this outreach was the 2003 Homeowner Refinance Fairness Act, which Binder helped draft. The bill, which would have allowed homeowners to deduct any mortgage interest, never made it out of a key legislative committee. Another, more recent, issue near and dear to Binder’s heart that could result in some D.C. face time soon: Legislators are considering changing the lending rules stipulating that condos must have a contingency reserve equal to 10 percent of their operating budget, set aside for things like roof repairs. Fannie Mae usually won’t back loans for condo purchases unless that reserve is in place, which has scuttled many deals in recent years, Binder said. But after his past efforts fizzled, Binder said, he’ll be sitting this round out. TRD

www.TheRealDeal.com March 2012 00

WE NEEDED A PLACE BIG ENOUGH FOR ALL OF US TO HAVE A TIME OUT

What’s ahead

Red flags foR Real estate

Amid market euphoria, are dark clouds looming?

By Hiten Samtani and Hayley Kaplan n a Wall Street Journal op-ed last The New York City market is being month, Boston Properties Chairman driven by artificial factors, such as the Mort Zuckerman voiced concerns Federal Reserve’s policy of buying bonds to about the economy, and especially the shore up the economy and a severe shortage of homes for sale, he said. listless growth of the job market. “The country needs a real recovery, not a phony one,” the mogul wrote. His viewpoint stands in stark contrast to much of the economic news Americans have heard over the past few months, and especially to the buoyant mood felt in New York City real estate. The Manhattan market has enjoyed a heady year so far, with historically low interest rates and a seemingly limitless influx of international capital sparking a demand for trophy properties. Mammoth trades, such as a $1.4 billion deal at the GM Build BuildMidtown East, where Mayor Michael Bloomberg’s rezoning plan — which ing and the sale of two penthouses would allow developers to tear down old buildings and construct taller, modern skyscrapers — is now in jeopardy. at One57 for more than $90 million each, have set new expectations for the market’s performance. “We are getting good news, but it’s not based on any“There’s a lot of euphoria in the marketplace and a thing fundamental,” Miller said. lot of people think that is going to continue,” said Noah See below for a closer look at the red flags in the curRosenblatt, founder of Manhattan market analytics rent real estate market — the warning signs experts say website UrbanDigs. could mean trouble ahead. Then again, many market-watchers missed or failed to heed the warning signs in the run-up to the 2008 real RIsIng InteRest Rates estate collapse. Chief among economists’ concerns is rising interest And despite the mostly sunny forecasts, a handful rates. of industry observers are warning of dark clouds on Since November 2008, the Fed has engaged in a the horizon. Experts said they are worried about ris ris- policy of “quantitative easing:” buying bonds to keep ing interest rates, and the current disconnect between interest rates at extreme lows and help stimulate the the New York real estate market and the reality of the economy. But in May, Federal Reserve Chairman Ben economy. Bernanke announced that the Fed may scale back on Jonathan Miller, president of the Manhattan ap ap- bond purchases this year, which would increase interest praisal firm Miller Samuel, has said for months that the rates even more than they’ve been inching up already. real estate market is not in a recovery, but a “pre-covery.” Indeed, the average interest rate on a 30-year fixed-rate

46 August 2013 www.TheRealDeal.com

mortgage jumped from 3.43 percent in May to 4.68 percent in mid-July, according to the Mortgage Bankers Association. Higher interest rates could impact the real estate market in several ways. First, experts said, it could dampen activity in the residential market by increasing the size of homebuyers’ monthly mortgage payments. If rates rise too quickly, said Doug Perlson, the CEO of online brokerage RealDirect, that could “slow down the market” and impede the growth of home prices. Miller said rising interest rates could lead to a “surge and stall” situation, in which activity speeds up — as buyers rush to close sales with rates still low — then fizzles. Real estate investment trusts, such as Zuckerman’s Boston Properties, are also likely to be hurt by rising interest rates, analysts said. Because of a law that requires REITs to pay most of their taxable earnings out to shareholders, they tend to rely on the capital markets for financing and development costs. Higher interest rates

“REITs have been on a harrowing ride since the Fed’s taper-talk began.” Michael Knott, Green Street Advisors mean that it’s more expensive for them to borrow for those purposes. In fact, REITs saw their stock prices tumble after Bernanke’s remarks in May, though they’ve since rebounded as the markets adjusted to the Fed’s news. REITs “have been on a harrowing ride since the Fed’s

What’s ahead A drop in unemployment is crucial for the city to taper-talk began,” noted Michael Knott, an analyst at Manhattan-based Green Street Advisors. move to a full recovery, Miller said. “The next phase is a recovery based on fundamentals, Higher capital costs are also likely to dampen the like employment, being where they hyperactive deal making in the private need to be and incomes [beginning] equity sector, which was responsible to rise,” he said. “All those things will for 36 percent of the money flowing happen, but very gradually over sevinto the office market in the second eral years.” quarter, according to data from comIn particular, widespread unemmercial brokerage Avison Young. ployment among young profession“The private guys have a lot of als is a major problem facing the money,” said Real Capital Analytics’ housing market nationwide, accordDan Fasulo, “and do push the enveBoston Properties Chairman Mort ing to Jed Kolko, the chief economist lope and prices more than [where] in- Zuckerman, who wrote an opinion piece in the Wall Street Journal last at San Francisco–based Trulia, a real stitutional investors and pension fund month warning about “the jobless recovery” estate website. types think they should be.” “Young people are at the Indeed, investment sales prices are Mayor Michael Bloomberg age where they’re making a lot up 17 percent from the 2007 boom-time of housing decisions,” he said, peak, according to Real Capital Analytics “whether it’s [living with] pardata. Bob Knakal, chairman of Massey Knakal ents, roommates or on their Realty Services, said he worries that invesown, or to rent or buy.” tors are jumping into the market without Young professionals who considering how their ability to refinance are unemployed or facing job these purchases will be affected by rising insecurity, he noted, are far less rates. likely to buy a home than those “They’re mismatching long-term assets with steady incomes. with relatively short-term debt,” Knakal For now, the combination said. “Interest rate risk is not something of high unemployment and that is priced into the market the way it high prices is unsustainable, should be.” Miller said. Private equity investors, in Ironically, however, indusparticular, are highly levered, try experts noted that a strong meaning that they tend to use national employment report could actually harm Manhattan’s commercial investment more debt and would therefore sales market, illustrating a paradox unique take a bigger hit from an interest to New York City. rate hike. However, while most industry A strong jobs report could prompt the experts expressed concern about Fed to further scale back bond purchases, rising interest rates, Miller said causing interest rates to rise and in turn he is heartened by the uptick, beslowing the building sales market, explained cause it “tempers the market … Barbara Denham, Eastern Consolidated’s City Council Chair Christine Quinn [and] may keep runaway growth chief economist. “The next really good news in check.” will be bad news,” she said. But even as they hope for lackHigH luster national news, real estate insiders are all for strong job growth Unemployment in New York, which would create a Bemoaning what many are calling “a jobless recovery,” Zuckerman’s opgreater demand for office space and ed called for government policies bolster the leasing market. They may be getting their wish. that would create a tech-savvy workAs of the end of June, 60,700 jobs force and reduce unemployment. Though the recession is now over, were created in the city in 2013, joblessness remains high, which the highest rate of growth of any experts said is taking a toll on the six-month period since 2000, achousing market. cording to the Department of LaIn June, the unemployment rate bor. In comparison, the city lost Soho China and M. Safra & Co. bought a 40 percent stake, valued at $1.4 in New York City was 8.4 percent, a more than 40,000 jobs per month billion, in the General Motors Building at 767 Fifth Avenue in March. drop of one percentage point from in early 2009. the same month of last year but still higher than the national 7.6 percent unemployment politics rate, according to the New York State Department of A number of political factors are also giving real estate Labor. By contrast, the city’s unemployment rate in professionals pause. Of particular importance for the December of 2007, before the financial crisis, was 5.1 New York market is the mayoral election on Nov. 5. percent. In his 11 years in office, departing Mayor Michael Salaries aren’t increasing either. According to the Bloomberg has championed pro-business policies. For U.S. Census Bureau, the median household income example, his administration’s proposal to rezone a large statewide was $56,033 in 2008. By 2011, that figure swath of Midtown East — which would allow developers had dropped to $55,246. to tear down old buildings and construct taller, modern

skyscrapers — was applauded by the real estate industry. But though the proposal’s enactment was once thought to be a foregone conclusion, the plan has hit a roadblock on the community board level. If it doesn’t pass before Bloomberg leaves office, the next mayor may not have the political muscle (or the desire) to push it through, disappointing developers who hope to revitalize their building stock by adding floors and raising rents. “If it slows down and doesn’t pass while Bloomberg is in office, that may create uncertainty” for the real estate market, according to Robert Ivanhoe, chair of the global real estate practice at law firm Greenberg Traurig. The crop of mayoral candidates makes the industry nervous because their views on development are not seen as gung-ho as Bloomberg’s. When it comes to Council President Christine Quinn, one of the front-runners, some industry insiders said they are concerned about what they described as her close ties to unions. Other major industry figures, including CBRE’s Mary Ann Tighe, have endorsed Quinn, however. Another area where politics is creating uncertainty for the real estate market relates to “carried interest,” also known as a promote, which refers to a common way of compensating the developers of real estate projects and acts as a sweetener for taking the lead on a project. Currently, carried interest is taxed at capital gains rates, generally at about 20 percent, rather than as or-

“I don’t like seeing the market being driven by an artificially low inventory level.” Doug Perlson, RealDirect dinary income, which tops out at nearly 40 percent. But several local and national politicians have proposed taxing carried interest at the same rates as earned income. If such a measure passes, it could deter development, Knakal said. The way that carried interest is taxed somehow managed to survive Congress’ budget deal at the beginning of the year, despite attempts by Democrats to reform it. The subject, though, more than likely will remain a target for lawmakers in the months ahead. Mayoral candidate Bill de Blasio said he, too, has considered the possibility, if elected, of taxing carried interest as income.

spiking land prices The manic demand for luxury residential projects has led to a sharp spike in Manhattan land prices — up to $800 per buildable square foot in some cases, as TRD has reported. So far, international investors and New Yorkers starved for inventory have been willing to shell out vast sums for these pricey apartments, but if land values keep rising, buyers will eventually balk, analysts warned. “If land is selling at $800 a foot, then to make sense, the condos would have to sell at $2,200 to $2,300 a foot,” noted Neil Helman, a member of Avison Young’s capital markets group. “There’s going to come some point in time where people can’t afford to spend $2,300, $2,400, $2,500 a square foot for what was once $1,400 or $1,500. So buyers are going to have to say ‘uncle.’ ” Such high prices may also make it hard for developers continued on page 90

www.TheRealDeal.com August 2013 47

VITAL STATS NAME: Ben Shaoul AGE: 36 TITLE AND COMPANY:

Pres., Magnum Real Estate Group HOMETOWN:

Great Neck, N.Y. CURRENTLY LIVING IN:

West Village & Bridgehampton BUILDING BLOCKS How many buildings does Magnum own? I’m a little superstitious about telling people what we own, but we’ve bought and sold well over 100 properties, [primarily in] Manhattan — everything from a 10-unit walk-up to a $200 million development project. How did you get into real estate? I started working as an intern for a real estate management company, and that kind of morphed into managing a property for my father, Abraham. He had a small property at 813 Broadway that he bought for his business — he was and still is an importer of French antiques. I renovated the building for him and I made him a few bucks. I bought my first property, on Mott Street, when I was close to 20 years old. What development projects do you have in the pipeline? We just purchased an old theater building at 100 Avenue A in the East Village, which we’re going to develop into a [residential] project — about 60 apartments — with a large retail component. We’re in design and development for a project at First Avenue and 24th Street, the former ICD [Institute for Career Development] building, [which is going to be either rental or dormitory].

THE BOTTOM LINE How did the recession impact your business? We were able to take on a lot of projects and capitalize on the recession, and we’re very fortunate for that. [But] we obviously had issues with some of our loans and some of our projects. We were a big Lehman Brothers borrower, so when Lehman went under, we had to deal with some of the issues that created for us. I would not give up the experience [of the recession] for anything in the world. Doing business and making money was much easier in 2007, when the industry was booming. It takes a market like 2009 to test those relationships and notions, and I think we emerged stronger as a company as a result. You have a lot of properties in the East Village; for example, you recently starting leasing Bloom62 at 542 East 5th Street. What appeals to you about the area? It’s funny; we have just as many projects in other neighborhoods as the East Village, but for some reason people keep connecting us with the East Village — which is fine, because we love it here. Because people talk so much about our involvement in the East Village, deals kind of float our way.

48 August 2013 www.TheRealDeal.com

You’ve been frequently criticized in the press for construction problems in your buildings and for allegedly mistreating your tenants. How do you respond to that? They’re ridiculous. We don’t mistreat tenants. We borrow from every bank. Banks don’t lend money to, and capital partners don’t do deals with, landlords who mistreat tenants. I think sometimes tenants misconstrue change as mistreatment. We’ve never been convicted of, or accused directly of, doing anything wrong [involving] tenants, ever. We have a stellar track record of how we treat tenants. I think change leads to feelings being hurt sometimes, or people having differences of opinion. But to say that we mistreat someone is just false. What about allegations that you’ve improperly displaced rent-stabilized tenants from your buildings? Show me something that proves I’ve done something wrong. Never. We treat rent-stabilized tenants the same as our free-market tenants. If anything, we spend more dollars on operating our properties than any other landlord.

LANDLORD LIFE What are the challenges of being a landlord in the city? The changing scope of the business. It changes every single year. I used to buy properties from bricks, and now I’m buying them from financial analysis of what it’s going to be worth today and what it’s going to be worth tomorrow. The city has been leaning on landlords every year to pay increased taxes. It’s been a huge challenge — it’s very hard to know what our taxes are going to be next year. Do you have a family? About four months ago, on March 1, I got married [to Megan Walsh Shaoul] at City Hall. We have twins, Henry and Piper, who are two and a half, almost three. And [our] son Mayer was born on July 12, 2012. What are the challenges of balancing work and fatherhood? Challenges are endless. I work from 5 in the morning till 11 at night. But I recognize that the time I have with my children I will never be able to recapture, and that I can’t miss moments in their lives. … I’m the dad who runs home and gives them a bath before they go to bed, then goes back to the office. By Hayley Kaplan

PHOTOGRAPH FOR THE REAL DEAL BY DEREK ZAHEDI

MiaMi’s Most valuable views iNtRODuCiNG thE OPERA tOwER LEASEBACK PROGRAM Owners now have the option to lease back their condominium to the developer for three years commencing at closing. As part of the leaseback program, the developer will assume all hOA and maintenance fees and will pay the owner annual rent equal to 6% of the purchase price. DEVELOPER FiNANCiNG AND CASh DiSCOuNtS iNCENtiVE PROGRAMS ARE ALSO AVAiLABLE.

RISING 56 STORIES ABOVE THE BAY, STudIO, ONE-BEdROOm ANd TwO-BEdROOm cONdOmINIumS STARTING AT $257,900 NoVe Kitchen Sidewalk Café • New Models • Oversized Pool & Spas Dramatically Designed Lobby • State-of-the-Art Fitness Center • Fully-Equipped Residents’ Lounge 24/7 Security & Concierge Service • On-Site Garage with Valet Service AmericanAirlines Arena • Museum Park • Arsht Center for the Performing Arts Sales center open daily at 1750 N. Bayshore Drive, Suite 101, Miami, FL 786.361.0512 • operatower.com • FORtuNE DEVELOPMENt SALES All features, dimensions, drawings, conceptual renderings, plans and specifications are subject to change without notice, and Developer expressly reserves the right to make modifications. All prices are subject to change without notice. ORAL REPRESENTATIONS CANNOT BE RELIED UPON AS CORRECTLY STATING REPRESENTATIONS OF THE DEVELOPER. FOR CORRECT REPRESENTATIONS MAKE REFERENCE TO THE DOCUMENTS REQUIRED BY SECTION 718.503, FLORIDA STATUTES, TO BE FURNISHED BY A DEVELOPER TO A BUYER OR LESSEE. All borrowers are subject to credit approval. For leaseback, Seller may be substituted with affiliated entity. Terms and conditions of seller financing and leaseback are subject to change without notice. Other restrictions and limitations may apply. WE ARE PLEDGED TO THE LETTER AND SPIRIT OF THE U.S. POLICY FOR THE ACHIEVEMENT OF EQUAL HOUSING OPPORTUNITY THROUGHOUT THE NATION. WE ENCOURAGE AND SUPPORT AN AFFIRMATIVE ADVERTISING AND MARKETING PROGRAM IN WHICH THERE ARE NO BARRIERS TO OBTAINING HOUSING BECAUSE OF RACE, COLOR, RELIGION, SEX HANDICAP, FAMILIAL STATUS OR NATIONAL ORIGIN.

OPERA-117 RealDeal_Fullpg_July2013.indd 1

7/3/13 4:44 PM

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80 WASHINGTON PLACE - TH 5 BR, 7 BATH

WEB ID: 467066

$28.9 M

55 WARREN STREET - PH

4 BR, 4.5 BATH

WEB ID: 752972

$16.0 M

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730 Fifth Avenue New York, NY 10019 212.242.9900

110 Fifth Avenue New York, NY 10011 212.633.1000

26 Astor Place New York, NY 10003 212.584.6100

530 LaGuardia Place New York, NY 10012 212.557.5300

88 Greenwich Street New York, NY 10006 212.269.8888

337 West Broadway New York, NY 10013 212.924.4200

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239 East 79th Street New York, NY 10075 212.929.1400

WEB ID: 672744

$12.5 M

2077 FIFTH AVENUE

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WEB ID: 943887

$2.695 M

56 EAST 1ST STREET

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$6.5 M

14 PRINCE STREET

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Outer Boroughs

Staten Island, beyond Sandy Low-lying areas struggle to recover,

but hilltop neighborhoods see a real estate rebound By Claire Wilson

t’s a tale of two markets right now on Staten Island, where Superstorm Sandy ravaged waterfront communities but left other areas with little more than downed trees. So while low-lying areas are still suffering, the overall real estate market on the island is experiencing a remarkable turnaround — especially its posh hilltop neighborhoods, brokers said. “We are having a fantastic year — the best we’ve had in six or seven years,” said Frank DiTommaso, a principal at Coldwell Banker DiTommaso Realty in New Dorp. The median sale price of a Staten Island home in June was $413,500, jumping 8.8 percent from $380,000 in the same month of last year, according to the Staten Island Board of Realtors (SIBOR). The average sale price for the same period grew 7.2 percent, to $432,702. And the number of closings island-wide is up 28.2 percent year-to-date, according to SIBOR, while inventory is shrinking: There were 2,451 active listings at the end of June, down 29.5 percent from 3,426 at the same time last year. That’s a significant improvement from the dark days of the real estate downturn, when prices across Staten Island

North Shore The North Shore, site of the Staten Island Ferry terminal, includes the neighborhoods of St. George, New Brighton and Stapleton. These hilltop areas, featuring classic Victorians and many of the island’s grand, older homes, had wind damage but no water damage. The area is also the site of much of the island’s planned new development. For example, construction started in June at Stapleton’s former Homeport Navy base, where Hoboken-based Ironstate Development is building 400 rental units and 25,000 square feet of street-level shopping, with additional apartments and retail space to come. In St. George, Brooklyn-based BFC Partners is developing the 200-store Empire Outlet Mall. There will also be a 625-foot Ferris wheel, the world’s highest. Lighthouse Point, developed by Queens-based Triangle Equities, will include underground shops, a 164-room hotel, a new esplanade and 96 residential units. This fall, a converted warehouse at 130 Bay Street Landing called the Accolade will hit the market with 100 waterfront condos priced from $300,000 to $1.1 million, according to Angela Ferrara, executive vice president at the Marketing Directors, which is marketing the building. The developer, Manhattan-based Meadow Partners, is also just finishing up sales at the Pointe, a condo project that originally hit the market five years ago, then stalled during the recession. Only one of 57 new waterfront units remains at the Pointe, Ferrara said. The average asking price in St. George was $366,744 in mid-July; the median price was $345,000, according to SIBOR. The average asking price in Stapleton was $311,460 and the median price was $259,900. 52 August 2013 www.TheRealDeal.com

dropped by some 20 percent and the island saw more than 330 foreclosures, according to data from Coldwell Banker DiTommaso. SIBOR president Traci Cangiano said the island is experiencing “almost a complete turnaround,” and attributed the improvement to low interest rates and pentup demand. In the areas untouched by Sandy, she said, “we put

“We are having a fantastic year — the best we’ve had in six or seven years.” Frank DiTommaso, Coldwell Banker DiTommaso Realty

homes on the market, and within days, sometimes hours, there are multiple offers. We are even seeing bidding wars.” By contrast, the real estate market is at a virtual standstill in communities hit hard by the storm, such as Midland Beach, South Beach, New Dorp Beach, Oakwood Beach, Great Kills and Tottenville. In those areas, some 600 resi-

The Pointe, a St. George condo project that originally stalled during the recession, is now nearly sold out.

the hills Staten Island’s geography is dominated by a spine of hills that run from St. George to the center of the island. These hills — Todt, Emerson, Lighthouse, Grymes and Ward — boast the island’s most sprawling and expensive houses. In this area, where storm damage was limited to lost trees, SIBOR figures show that the number of closings is up by 25 percent year-to-date. And in the second quarter, the median sale price of a home in Todt Hill was $1.23 million, according to SIBOR. That’s up from $1.2 million in the second quarter of last year. One factor working in the area’s favor is that many buyers once interested in the waterfront are now seeking higher ground, said Connie Profaci, principal of Connie Profaci Realty in New Dorp. In Todt Hill, 95 Emerson Avenue is listed for $2.4 million with Connie Profaci Realty.

dential buildings were destroyed or demolished because of storm damage, according to data from the city. And many homeowners are waiting for revised building codes before repairing or rebuilding their houses, a process that could take years. In the meantime, few homeowners in these areas are willing to buy, sell or renovate for risk of having to rebuild to code later, or face punishing fines. “Until the new elevations [as described by building codes] are set in stone, people are skeptical about buying down there,” DiTommaso said. Adding insult to injury, flood insurance rates in these areas are expected to balloon. In June, the Federal Emergency Management Agency released new flood maps that show the number of Staten Island buildings in the so-called Special Flood Hazard Area has jumped to 11,200 from 8,000 in 2007, the Advance reported. When FEMA formally adopts these maps, likely sometime in 2015, they will determine flood insurance rates. Staten Island is a patchwork of distinct communities. Now, below is a closer look at how different areas are faring post-Sandy.

Eltingville and Annadale These South Shore neighborhoods, where many older single-family detached and semi-detached homes sit on small parcels, saw some storm damage in low-lying areas. But overall, the area is enjoying a brisk real estate trade: Eltingville and Annadale are part of a sampling that collectively saw a 36 percent uptick from last year in closed sales, according to SIBOR. The median price in Eltingville was $534,999 in June. That’s up from $390,000 a year prior (a few higher-priced sales may account for the big price swing). In Annadale, the median was $489,000, up from $468,000 last year. A three-bedroom home at 31 Moffett Street in Eltingville, which recently sold for $391,500

Tottenville At the southernmost tip of Staten Island lies

Tottenville, an area with quiet, tree-lined streets. The housing stock here is a mix of new construction and historic homes dating to when the area was a thriving port. Tottenville, surrounded on two sides by water, was badly flooded by Sandy. Currently, there are 99 houses on the ELTINGVILLE PHOTOGRAPH BY KENNETH COLE OF APPLESEED HOMES; MIDLAND BEACH PHOTO COURTESY OF ANDREA BOOHER/FEMA

Outer Boroughs

St. George Stapleton

New Brighton Todt Hill

Westerleigh Midland Beach

New Dorp Beach

Oakwood Beach Tottenville

market, an unusually high number for the area — most likely because nothing is moving, brokers said. Still, in the second quarter, the median sale price of a home in the area was $665,000, up from $422,000 in the same period of 2012.

Annadale

Hurricane Sandy damage in Oakwood Beach

Debris in Midland Beach after Sandy

Tottenville

Midland Beach Oakwood Beach and New Dorp Beach Among the areas hardest hit by Sandy was Oakwood Beach, a tiny community crammed with small houses, many originally summer bungalows. All but a few of the 184 property owners are taking buyouts from the state, which plans to demolish the houses closest to the shoreline because they have been deemed at high risk of flooding again. In Oakwood Beach and adjacent New Dorp Beach, 10 houses are on the market — more than double last year’s four closings. July’s average asking price was $339,980, brokers said.

Much of Midland Beach was practically swept away by Sandy, and many residents remain homeless. Portions of the boardwalk reopened in time for Memorial Day, in what locals called a sign of confidence, and repairs will continue through the summer. According to Profaci, rebuilding is practically a given. “We are an island and will always have the allure of the water,” she said. The market, though, has suffered mightily because of the storm. In the second quarter of last year, the median sale price was $330,000; this year, that plummeted to $125,000. Thirty-four homes are on the market, but many need repairs. Others are so badly damaged that they are being marketed as tear-downs.

Mid-Island Mid-Island neighborhoods are tree-shaded, dotted with parks, and are home to an attractive mix of old and new housing stock of all types that are in no danger of hurricane flooding. In Westerleigh, there are 56 houses on the market, and the median closed price in June was $472,450. Nearby in Clove Lake, the median sale price was $576,950. In adjacent Sunset Hill, noted for its gracious older homes and quiet side streets, the median sale price was $609,000 in June, up from $453,000 in the same period of last year. TRD www.TheRealDeal.com August 2013 53

Residential

Manhattan’s biggest managing agents

Companies snap up other firms, cut prices to get ahead By C. J. Hughes hey pencil out budgets. They organize repairs. They field complaints about noise in the middle of the night. And many of Manhattan’s managing agents — the companies that handle the unglamorous, day-to-day aspects of the real estate business — seem particularly adept at weathering recessions. Many of the city’s major property management companies expanded during the recession and its aftermath, often by gobbling up smaller firms and poaching clients from their rivals, according to The Real Deal’s ranking of Manhattan’s 20 largest residential managing agents. For example, FirstService Residential New York, previously known as Cooper Square Realty, is ranked No. 1 by number of units on The Real Deal’s list, after an aggressive expansion. After joining forces with a large publicly traded company and snapping up several other firms, FirstService now has 45,000 units, a leap of nearly 30 percent from 35,000 in 2009, the last time TRD ranked managing agents. FirstService unseated 2009’s top finisher, Douglas Elliman Property Management, which came in at No. 2 this year despite its recent acquisition of Bellmarc Property Management. TRD compiled its rankings from surveys of property management companies, the Real Estate Board of New York and industry reports. The list includes only “third-party” agents, or property management companies that own less than half of their portfolio; it does not count developers like the Related Companies, which manage the buildings they own. Other companies that have shown impressive growth include Halstead Management Company, which has soared 51 percent by number of units since 2009, putting it in the No. 7 spot. At No. 13, Century Management is a newcomer to the list, with 7,200 units in 70 buildings. The company with the most buildings is Andrews Building Corp., which has 350 properties in its portfolio. But the majority of these buildings have less than 100 units, and some much less. Fairly typical is 25 Bond Street, a 30-unit boutique property, said Divya Rashad, Andrews’ managing director. Despite the growth of some companies, though, the industry as a whole has had a difficult time. Landlords are increasingly opting to manage their own high-rises; many firms have frozen their fees or have drastically cut their

Metal Shutter Houses at 524 West 19th Street has switched from Halstead to Andrews.

and now president of FirstService Residential New York. But he said other firms seem to be hurting, adding: “I’m not sure that others are investing in their business.” Less demand, coupled with consolidation, means the market-share pie is shrinking. “The market is getting more diverse and consolidated at the same time,” said Brian Peters, the chief operating officer of Rose Associates, which has a property management arm.

Mergers and acquisitions Kuperberg started Cooper Square Realty in 1987, managing

FirstService is now managing 100 United Nations Plaza, where Charles H. Greenthal Management had been since 1988.

a 23-unit co-op in Greenwich Village. In 2003, the company became a subsidiary of FirstService Residential, the largest manager of residential communities in North America. Cooper Square changed its name in June, along with several other FirstService subsidiaries. FirstService has been aggressively expanding in New York City, in part by snapping up other firms. David Kuperberg at 8 Spruce Street,where his company, FirstService Residential New York, is the managing agent In 2010, it bought Goodstein Management, adding 40 buildings to its portfolio, including the San Remo, prices to keep their the legendary two-towered co-op at 145 Central Park West. clients happy. Some Today, FirstService has 285 Manhattan buildings, up from firms have succeeded 200 in 2009, with another 215 buildings in the Bronx, Brookin grabbing market lyn, Queens and Staten Island. Other high-profile buildings share by dramatical- it manages include New York by Gehry, a 900-unit rental at ly undercutting the 8 Spruce Street in the Financial District. Elliman is another firm swallowing up other companies. competition’s rates. “We are adapt- It purchased Bellmarc Property Management in 2010, adding” to the new con- ing 50 buildings to its roster, including CitySpire at 150 West ditions, said David 56th Street, where a penthouse is famously on the market Kuperberg, found- now for $100 million. Elliman manages 290 buildings in Manhattan, the firm er of Cooper Square

54 August 2013 www.TheRealDeal.com

said, up from 250 in 2009. But its total number of Manhattan units is 38,000, down 14 percent from 44,000 in 2009. Halstead, too, has made aggressive moves to expand its management portfolio. In 2009, Terra Holdings, the parent company of Halstead and Brown Harris Stevens, bought Penmark Realty and merged it with Halstead. That helped significantly boost Halstead’s unit count: Today, it manages 11,670 units in 131 buildings, a 51 percent increase from 2009, when it had 7,700 units in 80 buildings. Many of the buildings Halstead manages are new condos, such as One Jackson Square, a 30-unit development in Greenwich Village where sales were handled by the Corcoran Group, which is not in the management business; 110 Third Avenue, an East Village condo developed by Toll Brothers; and the Lucida condo at 151 East 85th Street. Another big mover is Manhattan-based Century Management, founded in 1971, which did not make TRD’s list in 2009. Mitchell Barry, the firm’s CEO, could not be reached for comment, but according to the firm’s website, current Manhattan properties it manages include the Gramercy Park co-op 130 East 18th Street, and 190 East 72nd Street in Lenox Hill. Large firms are merging with smaller ones in part to help recapture market share lost now that more building owners are self-managing their properties, industry insiders said. Among these are the many REITs now entering the New York City marketplace. The Colorado-based firm UDR, for example, is ramping up its purchases in New York and now owns AKAM Living Services recently took over management of the Sheffield from Rose Associates.

“This is a very pricesensitive business, but on the other hand, clients are willing to pay for value and good service.” Paul Herman, Brown Harris Stevens Residential Management

and manages the Financial District apartment building 10 Hanover Square, among other buildings. And current market conditions have prompted many buildings to look around for new managing agents. With material and labor costs going up, complying with city rules like Local Law 11 — which requires buildings to repair their façades — is now a pricier proposition than in the past. Higher prices, combined with difficult economic times, tend to make buildings dissatisfied with their management companies, so they’re more likely to switch firms.

Residential Indeed, competitors gripe that FirstService and some othAs a result, nearly every city management company has of its 22,294-unit management portfolio is Rose-owned, er firms have grabbed market share by offering clients steep gained and lost buildings over the past few years. Rose company officials said. discounts. “I think developing and managing go hand in hand,” Associates, for example, has nabbed some key buildFor example, FirstService recently added the 244-unit Peters said. “You learn things on one side or the other ings from its competitors, such as the 142-unit rentcondo 100 United Nations Plaza to its roster, taking over from that you can apply to the benefit of everybody.” al tower 2 Cooper Square, which Rose took over Charles H. Greenthal Management, which from Knickerbocker Management. Rose’s Peters had managed the building since 1988. said a long-standing partnership with JPMorgan, Comparison shopping Greenthal is far more expensive that an institutional owner, has helped the company But there’s another key reason why FirstService, with fees starting at $60,000 add clients. buildings are ditching their manper year per building and going up to a But Rose, which came in at No. 4 in aging agents: price. Sources “couple hundred thousand” for some large the rankings, has also lost some buildsaid the market is currently complexes, according to company presiings. AKAM Living Services took over at very price-sensitive, which dent Jonathan West. the Sheffield, a nearly 600-unit condo at is one reason FirstService At 100 United Nations Plaza, West 322 West 57th Street previously managed has dominated, while more said, “yuppies from Wall Street and whatby Rose. Peters said a short-term stay was expensive firms such as not came onto the board there and discardthe plan the whole time; Rose, along with Brown Harris Stevens Resed the accountant, attorney, and resident Fortress Investment Group, came in after idential Management have manager, as well as management.” Five of Swig Equities lost the property to help conlost ground. The San Remo co-op, where FirstService is the managing agent seven board members were new, he said, vert it from rentals. FirstService’s size allows and “they had a whole different philosophy about how monIn total, Rose is managing more than it to give customers deals on everything from ey should be spent.” 22,294 units in 100 buildings, up from yearly fees to electricity costs. Last fall, for exGreenthal, founded in 1959, came in at No. 3 on TRD’s 19,360 units and 77 buildings in 2009. ample, buying electricity in bulk for all of its ranking. Today, it manages nearly 23,000 units in ManhatRose, which started developing buildings allowed the company to offer clients tan, down slightly from 2009’s 24,000. Its building total, too, buildings in 1925, still controls some a hefty 17 percent discount, Kuperberg said. has fallen a bit from 185 in 2009 to 184 today. rentals that it built, such as the Chel- The CitySpire building, managed FirstService’s fees are on the low end of West said the firm has been focused on expanding in sea Landmark on West 25th Street and by Douglas Elliman the scale, starting at $10,000 a year, allowing Brooklyn and Queens rather than Manhattan. Sixth Avenue. Still, less than 20 percent for profit margins of 10 to 15 percent, he said. Continued on page 88

Source note: Data comes from a survey of property management companies or divisions, from the Real Estate Board of New York and from industry reports. List includes only “third-party” managing agents, or companies that own less than half of the buildings in their portfolio.

Most Manhattan residential units under management units

2013

2009

Amy Rose

Leslie Kaminoff

Paul Herman

9 (tie)

4,500 4,200

5,300 4,800

5,400

7,200

9,500 9,000

5,500 7,000

9 (tie)

6,750 4,671

9 (tie)

10,000 9,000

10,000 8,715

10,000 6,325

6,850 4,959

7,000 7,500

11,451 10,000

11,670 7,700

rank

F (r irs an t k Ser 20 v Do 09 ic ug 2) e (r las an E k ll 20 im 09 an 1) (r Gr an e k en 20 t 09 ha 3) l (r an k 20 r 09os 4)e (r an k A 20 K 09 AM 5) (r an M k ax 20 w 09 el 6) l (r an H k al 20 s 09 te a 11 d Or ) (r s an id k R 20 ea 09 lt 7) y (r an A k nd 20 r 09 ew 15 s ) (r Tud an o k rR 20 e 09 al M 10 ty at ) (r th an ew k A 20 d 09 am Br 8) (r ow an n k Ha 20 r 09 ri (r 8) s an k C 20 e 09 nt u N/ ry A) (r an k G 20 um 09 l 12ey ) (r an La k w 20 re 09 n c 16 e ) (r an Bu k Mid 20 b ch 09 or bi nd 18 o (r er ) an & k W 20 a 09 rr 13en (r ) an k 20 09 Ar N/ go A) (r an A k JC 20 la 09 r k 17 e ) (r Ru an d k dR 20 e 09 al 19 ty )

13,500 12,800

10,000

21,000 18,000

20,000

22,294 19,360

22,856 23,853

38,000 44,000

30,000

35,000

40,000

45,000

50,000

Most Manhattan residential buildings under management 2009

18 Gramercy Park South Central Park South

50 Central Park South

2 Cooper Square

69 Fifth Avenue

190 East 72nd Street

285

290

2013

15 (tie)

75 80

75 75

90 69

90 90

99 67

100 77

102 85

120 100

15 (tie)

(r an An k d 20 re Do 09 w ug 1) s (r las an E k ll 20 im 09 an 2) F (r irs an tS k er 20 v 09 ic 3) e (r G an re k en 20 t 09ha Br 4) l (r ow an n k Ha 20 r 09 ri 5)s (r A an J k Cla 20 r 09 ke 6) (r an k O 20 r 09 si 9) d (r an M k ax 20 w 09 el 7) l (r an H k al 20 s 09 te a 14 d ) (r an Bu k 20 A ch 09 KA bi nd 11 M ) (r er an & k W 20 ar 09 r e M 10 n (r att ) an h k ew 20 A 09 da 13 m (r ) an k 20 09 Ro 16se ) (r an k 20 09 HS 19 C ) (r Tud an o k rR 20 e 09 al 12 ty ) (r an k Mid 20 b 09 or 18 o (r ) an k 20 09 A r N/ go A) (r Ru an d d k R 20 e 09 alt 17 y ) (r an k G 20 um 09 l 14ey ) (r an k Ce 20 n 09 tu N/ ry A)

125

131

141

140 122

100

120

160 130

163 152

200

185 184

250

300

350 300

buildings

www.TheRealDeal.com August 2013 55

rank

ARCHITECTURE REVIEW

JA M E S G A R D N E R

Brutalism revisited

Cary Tamarkin turns neo-modernism on its head with West Chelsea condo

ontemporary architecture in New York City tends to come in one of three broad formal categories: the deconstructivist style of Frank Gehry’s 8 Spruce Street, the neoclassicism associated with Robert A.M. Stern’s 15 Central Park West, and the neo-modernism that inspired Shigeru Ban’s Metal Shutter Houses on West 19th Street and Jean Nouvel’s 40 Mercer in Soho. In the last of these categories, one of the more honorable names to emerge in recent years is that of Cary Tamarkin, a rare bird who happens to be an architect and a developer at the same time. Such is the general level of quality that Tamarkin Co. has attained to date that one wonders whether architecture around the world would not be better served if the two roles were combined more often. Tamarkin’s latest project is at 508 West 24th Street, in the heart of Chelsea and literally a stone’s throw from the High Line. Set between 10th and 11th avenues, the neo-modernist 10-story condominium is only beginning to rise, but renderings show a very promising start. One especially striking element of the project is that it impressively develops the historicist tendencies that were always present, though unsuspected, in the neo-modern style. At the project, Tamarkin has used the language of neo-modernism as much as a period style as Stern did with the fluted pilasters and oeils de boeuf of the Beaux-Arts fantasy 15 Central Park West. But instead of looking back to Napoleon III, Tamarkin fondly invokes the more austere style of half a century ago, and does so with considerable sensitivity and skill. Strangely, neo-modernist architecture is generally better than the modernism that inspired it. The newer style is more comfortable, more respectful of the environment and more attentive to the finer points of design. It has also, I would contend, learned from the mistakes that were committed by the modernists the first time around. In addition, materials and technological processes have improved over the past half-century, so completed projects tend to look far better-made (because they are). The dominant idiom of Tamarkin’s architecture is neo-modernist, in the sense that it revives the vocabulary of the mid-20th century. But neo-modernism is almost as varied as the style upon which it was based, and so Tamarkin’s designs draw inspiration from several sources. The curving setback of his 456 West 19th Street is inspired by the prewar works of the German modern-

56 August 2013 www.TheRealDeal.com

ist Erich Mendelsohn, while the strictly rectilinear Shelter Island home that Tamarkin built for his own family recalls Richard Neutra’s California houses and

The most conspicuous feature of 508 West 24th Street is béton brut, or unadorned concrete, along its entire expanse. But while the exterior harkens

A rendering of 508 West 24th Street. Inset: Cary Tamarkin.

double-height windows and curving setbacks. The 24th Street project has ribbon windows alternating with infill up to the seventh floor, at which point the building recedes in a sequence of rectilinear setbacks. It is at ground level that the Brutalist style is most emphatic. The canopy of the building juts out into the street in the form of an aggressive cantilever, while the ground floor on either side of the canopy, as well as certain points on higher floors, is articulated with the sort of striated patterns that the Brutalists invoked in the ’70s to add visual interest to their buildings in hopes of mitigating the severity of the concrete. But the overall spirit of the building is not Brutalist, in the sense that its massing is restrained rather than assertive, while the detailing of the concrete is, in the renderings, so delicate as to suggest some of the lusher delights of Art Deco. This is especially true of the refined if minimalist clock that is promised for the second floor of the façade — a grace note that rarely if ever appears in Brutalist buildings — as well as the marking of each concrete panel of infill with a tastefully incised dot. Because of the free-handed way in which Tamarkin has mingled styles, 508 West 24th Street is really a cross-breed of a building, though it will effortlessly fit in with the utilitarian, early-20th-century structures that define its surroundings. It re-imagines and reapplies the standard formulas of modernism with a spirited abandon that would doubtless have seemed heretical to such masters of the International Style as Ludwig Mies van der Rohe and Walter Gropius. But in that very act of fanciful initiative, Tamarkin proves that the modernist vocabulary, in its essence, never was the timeless and universal idiom that its inventors aspired to create. TRD

Tamarkin’s 508 West 24th Street is one of the first buildings in New York that attempts to revive the Brutalist style, with its broad expanses of unfaced concrete. elements of the French modernist Jean Prouvé. In his latest venture, however, Tamarkin has used a very different set of aesthetic coordinates. His 508 West 24th Street is one of the first buildings in New York that attempts to revive the Brutalist style, with its broad expanses of unfaced concrete. Le Corbusier initiated the style in the 1950s, and it came of age in Manhattan in the 1970s.

back to the 1970s, the details of the building recall the early International Style that was common during World War II. Were it not for the promising elegance of this design, one would have thought the collision of these two styles incompatible. The building is a hybrid, and a strikingly original one at that. Conceptually, the building’s massing recalls that of Tamarkin’s 456 West 19th Street, a red-brick building with

PHOTOGRAPH OF TAMARKIN FOR THE REAL DEAL BY CHRIS MARTIN

$600,000,000 Joint Venture Equity Investment 1.8 Million Square Feet Office Portfolio New York, Washington D.C. and Boston Arcturus provided investment advisory and underwriting services in connection with this transaction.

Hotel

Multi-Family

Office

Retail

www.arcturusgrp.com

Single-Family

Q&A

A changing Upper East Side New subway line, proposed waste transfer plant impact market in one of the city’s ritziest neighborhoods

BY MELISSA DEHNCKE-MCGILL AND MELANIE GRAY he Upper East Side used to be called the Silk Stocking District. Today, the ritzy nickname isn’t heard very often, but the neighborhood is still one of New York City’s most affluent. Upper East Siders — there are about 60,000 of them — earn on average about $100,000 a year, and they are protective of their high-priced turf. Many are up in arms over a proposal to open a waste transfer station at East 91st Street and FDR Drive, where one operated for six decades before closing in 1999. The fiercest foes are fighting the plan in court. Others are threatening to lie down in front of the bulldozers when they start to roll. Still others are looking to put their homes on the market — and a few already have. Regardless of the legal battle and the threats, the station will almost surely be built. Judges have signed off on it; so has the federal government. Right now, construction is

Tom Postilio

founding member, CORE What impact will the waste transfer station have on the residential market? This is a similar situation to the Urban Glass House in the West Soho area on Spring Street. The city put plans in place to put up a parking garage for sanitation trucks, and everybody panicked. You couldn’t sell apartments across the street at the Urban Glass House, and the real estate values plummeted. It was fear of the unknown. Once the city put out the renderings of what it was going to look like, people could start to deal with it. That’s my prediction as to what is going to happen here in this one area of the Upper East Side. People panic over fear of the unknown, but the dust will settle. And if the values are temporarily being hurt, they will come back. There are several new-construction residential projects on the market or launching soon, including Harry Macklowe’s 737 Park Avenue, the Marquand at 11 East 68th Street, and Extell Development’s Carlton House at 61st Street and Madison Avenue. Which do you think will have the most impact, and why? They are all so different. I think that the collective influence will reshape how we think of the Upper East Side as a co-opdriven market. These kinds of projects are presenting opportunities for people who may have plenty of resources and lots of money, but they may not pass muster with a co-op board. That’s the big impact. Are there any other upcoming projects that you think are going to have an impact, and why? 58 August 2013 www.TheRealDeal.com

I’m the director of sales for One Museum Mile, at 1280 Fifth Avenue at 109th Street, and [there’s] 1212 Fifth at 102nd Street. Both of these projects have shattered the myth that the Upper East Side stops at 96th Street. We are seeing that particularly with international buyers, because they don’t have that in the back of their mind. It’s more the local buyer who thinks that [the UES] stops at 90th or 96th Street. What’s the inventory of available homes? It hasn’t been this low since they started keeping records in New York City. It’s great to see that there are all these new projects happening and inventory is coming to the Upper East Side. The Philip House is fabulous, 200 East 79th, 530 Park, 150 East 72nd. Product is low, but there is a nice assortment of new development that has been happening and is continuing to happen. How long are properties staying on the market, and how does that compare to a year ago, two years ago and during the boom? The averages have dropped. If the average apartment was listed for 120 days, maybe that’s now down to 90 to 100 days. It’s definitely better than a year ago, it’s a lot better than two years ago, and it’s almost comparable to the boom in terms of: a nice product priced well in a good location is going to sell immediately. What are the biggest challenges to selling property on the Upper East Side? Because of so much construction, the area along where they are putting in the Second Avenue subway has been a little bit challenged. Savvy shoppers understand that once it is finally all cleared up and we get that desperately needed subway, those values are going to increase. We did a deal at Second Avenue and 69th Street and

scheduled to start later this summer, and the finish date is sometime in 2015. Already underway is work on the Second Avenue subway, a nearly $4.5 billion project that will ease crowding on the Lexington Avenue line and improve connections to Midtown and Downtown. The digging is almost done and the first phase — more than two miles of new tunnels from 96th to 63rd streets — should be wrapped up in 2016, according to transit officials. The subway work and the waste station are issues du jour, but the UES is still a neighborhood that New Yorkers are jockeying to move into, of course. And the numbers prove its popularity. Different reports show slightly different specifics, but the takeaway is the same: The median price for resales — condos and co-ops — is up, demand for new development units is strong, and inventory is tight, just like it is in the rest of the city. With all that’s happening, we decided it was time to take a close-up look at the UES through the eyes of our experts. Here’s their take on the neighborhood.

[the buyers] got a really nice deal. I explained to them this is a challenging spot because of what is going on. Not everybody can see past the mess, but when all is said and done, this is going to add value to your property because you practically have the subway right outside your door.

Buyers are so savvy and they know when an apartment is priced correctly. I’m seeing apartments going at asking or, if there are multiple bidders, over asking. A year or two ago, you could negotiate. It’s all a cycle, but those days are over and out for now.

Who are the most active buyers? In general terms, there are a lot of families that are expanding.

Which price ranges and housing types are struggling? One-bedroom apartments have slowed in the past month, particularly in co-ops that only permit 50 percent financing.

Which areas of the Upper East Side — Lenox Hill, Carnegie Hill, Yorkville, for example — are performing best? Which are the weakest? Anywhere that you have pockets of new developments, it’s like bees opening up a hive. That’s where the people will go because it’s fresh new product. If anything is maybe moving any slower, it may be the Sutton Place area, just because it is a little bit removed and off the beaten path.

Daniel Farris

associate broker, Brown Harris Stevens How is overall residential sales volume? The volume has changed dramatically since a year ago and two years ago. The number of apartments available has dropped dramatically and there are so many buyers actively looking. There were something like 1,257 apartments available on the East Side in June, versus 1,344 in May and 1,780 in June 2012. You send your buyer some listings and if they wait a week, most of those listings have gone into contract. What’s going on with sales and rental prices?

What impact will the waste transfer station have on the market? It will definitely impact that area. Two of my buyers passed on great apartments within range of the transfer station simply due to the uncertainty surrounding it in the future and for possible resale. What’s the inventory of available homes? Quite frankly, pathetic. There is so little available in so many price points. You can show maybe one or two good listings and that’s it. A few years ago, I spent three days showing apartments to one of my buyers and she bought the last apartment I showed her on a three-day run. Can you imagine doing that today? How long are properties staying on the market? A few days or up to a few weeks if the property is priced correctly. Misprice it and the apartment lingers. Buyers still will not put in an offer on an overpriced property. What are the most surprising trends you’re seeing? Besides lack of inventory, it has to be the willingness of buyers to look at new conwww.TheRealDeal.com January 2013 77

Q&A dominiums. But the prices of those apartments sometimes boggle the mind. I’m also seeing families who bought Downtown a few years ago coming back Uptown to be closer to some of the schools and activities for their children. What are the biggest challenges to selling property on the Upper East Side? You have to know your inventory cold. Get a new listing to your buyer before they pick it up on StreetEasy and know the nuances of the building and what it takes to get them past the [building’s] board. You had better clearly understand the purchaser’s financial situation and know how to explain it to the board.

Eloise Johnson

executive vice president, Halstead How is overall residential sales volume? Compared to a year ago, it is quite healthy and it is much better than two years ago. Comparing today’s market to the boom, it is difficult to draw parallels, as it was two totally different markets — there was much more inventory during the boom. What’s going on with residential sales and rental prices? Prices are on the ascent, with sales in certain categories being very robust. Rental prices are more than holding their own. We are fast approaching pricing during the boom. And in certain categories such as three- or four-bedrooms with views — those prices are exceeding the boom years. Which price ranges and housing types are performing best? I am seeing large condos on high floors with fabulous views and perfect, move-in condition move quickly. Townhouses are also experiencing a nice comeback. Which are struggling? Large apartments on very low floors are not selling quickly. One-bedrooms on lower floors are also lagging. What impact will the waste transfer station have on the market? As expected, some prospective purchasers are reluctant to [buy] in the area. If the station does open, it will have some impact on prices. However, sometimes the fear of the unknown is worse than the reality. The Second Avenue subway has also been a source of concern for prospective purchasers. Now that the subway is near completion and the real estate market is stronger, many consider the new subway a plus. What are the most surprising trends you’re seeing? 78 January 2013 www.TheRealDeal.com

For the past 10 or 15 years, properties in the East 50s, Beekman Place and Sutton Place have sold at lower prices than comparable properties on the Upper East Side. We are seeing an increased interest in this area. We believe our customers are interested in taking advantage of the lower prices. A customer of ours is a family that is purchasing in Sutton Place. They believe there will be long-term value in the area due to the resurgence in Midtown East. This family believes — and we agree — that eventually the extension of the Second Avenue Subway will contribute to an easier commute to Downtown and higher prices of residential properties. What are the biggest challenges to selling property on the Upper East Side? Often, our first job is to help buyers understand how strong the Manhattan market is today. Many still think there is a real estate recession. Another challenge is that coop and condo boards are increasing their standards for purchasing, making it more difficult for some prospective purchasers to buy the property of their dreams. [The tougher standards are the consequence of many owners falling behind on their monthly common charges during the recession.] Finally, rising prices and lower inventory have combined to make the Upper East Side a very fast-paced selling environment. Agents and buyers need to be prepared to act quickly. Who are the most active buyers? We deal mostly with young professionals, young families and empty-nesters. During the recession, there were fewer young professionals because it was difficult for them to find jobs, or if they did have jobs, it was difficult for them to find better-paying jobs so they could buy larger apartments. We saw some young families use the opportunity to trade up. The empty-nesters who no longer wanted a large house in the suburbs used the opportunity to purchase in Manhattan. Lastly, during the recession, we were pleased that purchasers from other countries were buying. The foreign buyers are still here. However, people who live and work in New York are coming back in big numbers. Which areas of the Upper East Side are performing best? Which are struggling? Lenox Hill has always been very much in demand, and therefore expensive. We believe that this area will continue to outperform other areas of the city. Since there is an abundance of excellent private and public schools, families are increasingly interested in purchasing properties in Carnegie Hill. There have been many new residential buildings, plus new stores and restaurants. Since prices in Yorkville, east of Second Avenue, have been lower than Lenox Hill or Carnegie Hill, some buyers are interested in taking advantage of this opportunity.

Kathy Slattery

associate real estate broker, Corcoran Which upcoming projects are going to have a big impact on the UES market? 432 Park is going to be an iconic building, both on the New York skyline and in the apartments. It has 10-foot square windows, has soaring ceilings, is beautifully designed and is in a great location. How long are properties staying on the market? In the under–$3 million category, apartments are on the market up to two or three months. Above $6 million, depending on the location and price/value perception, it can be a year. What are the most surprising trends you’re seeing in the Upper East Side residential market? All of the new development in the East 70s, Manhattan’s “Gold Coast.” Who are the most active buyers right now and how does that differ from the past? I see more retiring baby boomers moving into the city and sizing down in the city, which may account for the low supply of smaller apartments and the higher supply of larger apartments. Fortunately, I am also seeing more big families with children looking for space on the UES, because that is where their children are in school. Which areas of the Upper East Side are performing best? West of Third Avenue is the strongest market in all of these neighborhoods.

Peter Culliney

director of research and analytics, CityRealty How is residential sales volume? About on par and maybe slightly ahead of last year, which had the highest volume since the crash — 2008 was the prior peak, with $5.5 billion in co-op and condo transactions, and 2012 is the peak since with $5.2 billion. Since the second half of the year is traditionally stronger than the first half, provided the current dearth of inventory does not keep too many people out of the market, our feeling is that we will at least equal last year’s overall volume, but it will be a hard push to beat the 2008 record. Where are sales and rental prices? Overall average sales prices [for co-ops and condos] are off slightly this year from last year’s feeding frenzy, dropping to $1.4

million from $1.7 million. There is clearly a lot of demand and not nearly enough supply. This is keeping pricing somewhat firm but also causing hesitancy for both buyers and sellers. Which price ranges and housing types are performing best? Which are struggling? There seems to be a rising demand for larger units and more bedrooms. The average square-foot pricing for condo units with six or more bedrooms — driven by demand — is more than 50 percent above the 2008 peak. Studios, on the other hand, are almost 8 percent below peak, while two-bedroom apartments are almost 2.5 percent below peak. Smaller co-ops — studios to two-bedrooms — are off by 10 percent to 15 percent. What’s the inventory of available homes? We are seeing less than 50 percent of the listings we have recorded for 2009. How long are properties on the market? Of the thousands of properties that have come to the market in the UES over the past year, there are only 56 that have been on the market more than one year, and only 160 that have been on the market for more than six months.

Roy Silber

associate broker, Citi Habitats What’s going on with residential sales and rental prices? Prices for rentals are up 5 percent to 7 percent from this time last year. I am even seeing clients outbidding each other for rental apartments, and that’s something I haven’t experienced in recent years. Which price ranges and housing types are performing best? The most intense demand is for two-bedroom homes with two full baths. Apartments with two full bathrooms can carry up to a 15 percent premium over those with just one and a half. Of 737 Park Avenue, the Marquand and Carlton House, which do you think will have the most impact? I predict that all three are going to trade at price points that will put them among the most expensive buildings in the neighborhood. It’s extremely rare to find completely gut-renovated buildings of this magnitude in well-established areas. Typically, home seekers would have to go east to find new construction. What are the biggest challenges of selling property on the Upper East Side? The challenge is not to overprice the home. In this market, everything and anything will sell if it’s not overpriced. TRD www.TheRealDeal.com August 2013 59

SOUTH FLORIDA

Real estate news in the Sunshine State TheRealDeal.com/miami

BRIEFS

Miami developer puts up artwork to secure $80M loan Martin Margulies is so driven to wrap up his latest condominium project before Miami’s next real estate crash that he is doing something extraordinary — and extremely personal. The 74-year-old developer is putting up pieces of his estimated $800 million art collection, including works by Mark Rothko and Jackson Pollock, as collateral for an $80 million loan from U.S. Trust

Martin Margulies

to finance construction of Bellini Williams Island, a 24-story tower in Aventura, Fla., set to be completed in October.

Margulies opposes using cash deposits from buyers to pay for building costs, a model favored by many of his colleagues. “The danger of that is … if [the developer] uses the money, and the construction costs escalate, he better have the money to cover those costs because the buyer is out there. We felt that by using our own money to build a building, that would encourage people to have confidence in us and the project,” Margulies told The Real Deal.

Versace mansion goes on auction block in September The former villa of slain Italian fashion mogul Gianni Versace will go to bankruptcy auction on Sept. 17. Bidders will need to deposit $3 million into escrow and show proof of funds of $40 million, said listing broker Jill Eber, of the Coldwell Banker team The Jills. The 19,000-square-foot mansion, where serial killer Andrew Cunanan gunned down Versace in 1997, had been listed for $75 mil-

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lion; last year, the listing price stood at $125 million, a record for Miami. The majority owner of the estate, now known as the Casa Casuarina, is telecom mogul Peter Loftin, who has battled foreclosure by the Nakash family, founders of Jordache jeans. The Nakashes bought a note from Loftin’s original lender that allowed them to pursue foreclosure.

Bio-tech park re-energizes blighted Miami area Downtown Miami’s historically black Overtown neighborhood has a blossoming biomedical industry. The University of Miami Life Science Technology Park sits on 68 acres, surrounded by hospitals, and has 250,000 square feet that house a mix of private medical companies and public research labs, including the school’s 80,000-square-foot tissue bank. The developer is Wexford Science and Technology, a biomedical realty company that has built several other medical parks across the country.

University of Miami Life Sciences Park

Latin American banks follow customers to South Florida Latin American financial giants are expanding their Miami footprint to hang on to their wealthy clients, who keep parking their cash in South Florida real estate. Brazil’s largest publicly traded bank is just one example: Banco Itaú is doubling its square footage at downtown’s Southeast Financial Center, the largest office tower in Florida. In the last few years, hundreds of billions of dollars have left South America’s wealthier nations. Argentina, for instance, saw a $25 billion net outflow for 2011 and responded with controversial capital controls. Chile’s third-largest bank, Banco de Crédito e Inversiones, is trying to hang onto cash by establishing operations in the U.S. for the first time. It purchased City National Bank from Spanish investors for $882.8 million. Compiled by Emily Schmall

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Commercial and residential real estate news briefs from around the U.S.

NATIONAL MARKET REPORT

An abandoned building in Detroit

Denver Colorado’s attorney general is looking into whether law firms that specialize in foreclosures are gouging homeowners by hiking their process-serving fees as much as six times, the Denver Post reported. Right now, four law firms that have handled thousands of foreclosures are under investigation but have not been charged; for a time, Colorado led the nation in foreclosures, and the amounts that law firms statewide overcharged in the last several years could total tens of millions of dollars, according to the newspaper. Law firms often pay $25 for someone called a process server to post an official foreclosure notice on a house; attorneys then turn around and up the amount that they tack on to the legal fees generated by a foreclosure case. The fee is sometimes as high as $150 and must be paid by the homeowner to avoid losing his house.

Kansas City

Detroit Detroit’s bankruptcy filing might help to revive the city’s devastated housing market by signaling to investors — and even to average home buyers — that the worst is over, industry experts told Marketwatch. Motor City has struggled with a depressed real estate market for two decades. In the last five years alone, sale prices have dropped by 25 percent; the median price for a single-family home stood at $52,770 in June, down 12.5 percent from the year before. “It’s not as if this bankruptcy filing tells people anything they didn’t already know,” said Stephen Malpezzi, who teaches real estate and urban land economics at the Wisconsin School of Business. “The good news is, it’s a concrete step toward resolving the huge issues Detroit faces.” Malpezzi doubts investors will make bulk buys, but a few just might if the prices are right. If they do, the sales will almost certainly shore up the residential market. For local broker John R. Kersten, the bankruptcy filing could encourage home ownership by showing buyers that Detroit is finally acting on its financial crisis. “This is so needed,” said Kersten, who owns Century 21 Town and Country. “It’s time.”

Section 8 housing in Kansas City

A foreclosed home

A division of Block Real Estate Services has teamed up with a Philadelphia property management company so it can make a run for huge federal housing contracts nationwide, the Kansas City Business Journal reported. Block Multifamily Group and Balfour Beatty Communities will bid to oversee properties under the government’s Section 8 (rent-subsidized) and Section 42 (low-income housing tax credit) programs. Block will handle the administrative and compliance tasks; Balfour Beatty will handle the onsite management duties. Just a week before forming the partnership, Block had announced that it wanted to increase the number of properties it managed by 10,000 units over the next five years. Now, the company expects to have to revise that figure upwards significantly.

Boston

Los Angeles

Washington, D.C.

Restaurants, supermarkets and fitness clubs are driving the recovery of Boston’s retail sector, according to a report by KeyPoint Partners, a Vermont-based commercial brokerage. The three categories of retailers took over nearly 2 million square feet of space in the last 12 months, bringing the vacancy rate down from 8.9 percent to 7.8 percent — the biggest drop in more than a decade, KeyPoint said. Grocery-store chain Market Basket leased the most space, 230,000 square feet, and Subway opened the most new locations: 34. Sleepy’s Mattresses, Orange Leaf Frozen Yogurt, Supercuts and Bay Coast Bank each added more than 10 locations.

Massive apartment complexes make up half of all the housing in Los Angeles, so the sale of one of the city’s biggest, an 18-acre luxury development in the Marina del Rey neighborhood, is getting noticed by industry insiders. Capri Capital Partners, on behalf of an institutional investor, and Kennedy Wilson paid $225 million for the 18-acre Esprit, which has 437 units in five buildings as well as 227 boat slips and boat storage. The seller was a partnership led by former City Councilwoman Cindy Miscikowski. The real estate investment firms will spend $5.3 million to upgrade the property.

Foreign investors are showing that they like the economic stability of the nation’s capital, the Washington Post reported. In just the first six months of this year, heavy hitters from both Europe and Asia have bought $1.9 billion in commercial properties — nearly double the $1 billion that they sank into the market last year and more than four times the $807 million overseas investment total from 2007, according to numbers from Jones Lang LaSalle. Among the projects: the under-construction Marriott Marquis Convention Center Hotel and CityCenterDC. And companies from China, Korea, Germany and Saudi Arabia are still on the hunt for fully leased downtown office buildings.

BOND Restaurant and Lounge in Boston

Esprit, a luxury residential development in Los Angeles

The under-construction Marriott Marquis in Washington, D.C.

Los Angeles

Atlanta

Austin

Hollywood hottie Scarlett Johansson has unloaded a one-bedroom, twobath condo for $470,000, a modest price, but $45,000 more than what she was asking. The 1,150-square-foot apartment, in the Hollywood Versailles Scarlett Johansson Tower on Hollywood Boulevard, is average in size but has luxury touches, including a dressing-room vanity surrounded by stage lights and gold sinks in the master bath. Johansson listed her bachelorette pad in May; the buyer wasn’t disclosed.

A 45,000-square-foot mansion that once belonged to Evander Holyfield is on the market for $8.2 million, about half of what the ex-heavyweight boxer paid for it. The listing, according to Curbed, describes the 12-bedroom, 21-bath main Evander Holyfield house as the largest single-family home in Georgia but makes no mention of Holyfield, who sold the 100-acre property to a bank last year for $7.5 million. (The address, though, is 794 Evander Holyfield Highway.) If the asking price isn’t high enough, Holyfield once claimed that the palace set him back $1 million a year in maintenance costs .

Lance Armstrong has flipped a 3.6-acre compound near Lake Austin in Texas that he bought just three months ago. The disgraced cyclist paid $4.3 million for the 12,500-square-foot mansion, but what he made off the sale — to race car Lance Armstrong driver Bret Curtis — isn’t known since the purchase price hasn’t been disclosed, Zillow Blog reported. Armstrong, who confessed to doping after being stripped of his Tour de France championships, has already moved on to another home in town: a showplace on only a half-acre lot that had been the home of former Lt. Gov. Ben Barnes.

62 August 2013 www.TheRealDeal.com

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ON THE MARKET Williamsburg waterfront site asks $210M

462-490 Kent Avenue

Developers Isack and Abraham Rosenberg have put a Williamsburg waterfront site on the market for $210 million, the Wall Street Journal reported. The 3.75-acre site at 462-490 Kent Avenue, near South 11th Street, is zoned for 754 apartment units — 226 designated as affordable housing — and 29,000 square feet of retail space, according to the newspaper. Gabriel Saffioti and Nicole Rabinowitsch of Eastern Consolidated are the brokers.

Battery Park City rental tower on the market A 324-unit rental apartment building at 22 River Terrace is now on the block and should bring in the range of $100 million for owner Rockrose Development, the Broadsheet Daily reported. Rockrose has signed on Cushman & Wakefield to help field offers for the 26-story tower. The property, built by Rockrose in 2001, could be converted into a condo, according to the publication.

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Perry Street garage primed for condo conversion; no asking price set A 40,000-square-foot West Village parking garage at 125 Perry Street that has hit the market could be converted into condominium homes. The West Village Housing Development Corporation, a co-operative organization, tapped Massey Knakal Realty Services to sell the four-story building; the brokerage isn’t setting an asking price in hopes of getting top dollar, but outside experts predict a sales price of $1,200 per buildable square foot, or just under $50 million. Condominiums in the neighborhood have been selling for more than $2,000 125 Perry Street a square foot.

Commercial properties recently placed on the market Vacant lot in Park Slope asking $20M A Park Slope development site located at 11th Street and Fourth Avenue is on the block for $20 million. The 12,690-square-foot plot is being marketed by a team at brokerage TerraCRG led by Ofer Cohen. Zoning for the site allows for a mixed-use property of roughly 86,000 gross buildable square feet — 79,626 for residential use and the rest for commercial space and community facilities.

Asking price for Flushing parcel is $12.6M A lot in Queens with 86,560 buildable square feet is for sale for $12.6 million, or $145 per buildable square foot.

Hell’s Kitchen property has $48M price tag A 20,083-square-foot parcel at 505-511 West 43rd Street is for sale with an asking price of $48 million, or $300 per buildable square foot, the New York Observer reported. The site, between 10th and 11th avenues above an active Amtrak rail line, can accommodate 190 residential units with 160,664 square feet of space. Because of the rail line, though, the site’s developer will have to obtain two special permits from the city. The HFF team of Andrew Scandalios, Jose Cruz, Jeffrey Julien, Rob Hinckley and Christopher Peck are handling the sale.

131-32 Avery Avenue

The site is at 131-10 through 131-32 Avery Avenue in Flushing, on a block that allows both commercial and residential uses. The property is located near Flushing Meadows Corona Park and the National Tennis Center. Marcus & Millichap’s Steven Siegel, Michael Kook and Michael Helpern are marketing the property on behalf of the seller. Compiled by Linden Lim

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Deal Sheet summary

The Deal Sheet, on pages 68 to 80, covers transactions from 6/11/13 through 7/10/13. Please submit future deals to deals@therealdeal.com.

Sales

Overview

By type

Property sales Deals Dollars

64 $1,238,290,000

Financing Buildings Aggregate value

Development

Hotel

Industrial

Mixed-use

Mixed-use Multi-family

Transactions

By dollar volume (in millions)

294.52 0 14.70 14.06

Multi-family

559.53

Office

268.30

Retail

87.18

$206,620,000

Leases Office

101

Retail

Total

131

Leases square feet Office

1,333,960

Retail

203,753

Total

1,537,713

Office leases Office leases by industry Industry

Office leases sf by industry Leases

Industry

Square feet leased

Tenant representative

Square feet leased

64,474

Jones Lang LaSalle

279,324

Architecture & Design

57,385

Newmark Grubb Knight Frank

225,258

Consulting

31,046

CBRE Group

183,983

Education

79,548

Cushman & Wakefield

111,539

Entertainment

5,000

Colliers International

43,480 35,454

Advertising & Marketing

Architecture & Design

Consulting

Education Entertainment

Advertising & Marketing

Top tenant reps for office leasing by sf

Fashion*

109,335

Cassidy Turley

Financial

432,626

Tarter Stats O'Toole

34,858

Cresa New York

33,626

56,060

Lee & Associates

28,036

Rice & Associates

25,288

VIZA Group

15,237

Health & Beauty

Internet

3,875

Legal

53,363

Media

142,892

NGO

88,036

DTZ

13,978 10,902 10,000

Other

97,997

Studley

Public Relations

36,917

Mogull Realty

Real Estate

Science & Technology

Other

5,700 69,706

Joseph P. Day Realty

9,275

ABS Partners

6,140

Retail leases Top tenant reps for leasing by sf

Retail leases by industry

Broker

Discount

18,536

Square feet leased

Retail leases sf by industry

McDevitt Company

56,730

Drugstore

11,305

Right Time Realty

43,100

Fashion

66,580

Ripco Real Estate

22,636

Food & Beverage

32,442

Winick Realty

15,000

Health & Beauty

16,610

Newmark Grubb Knight Frank

10,365

Other

58,280

J. W. Burke & Company

10,000

Adams & Co.

6,654

RKF

3,747

Cushman & Wakefield

3,700

NYCRS

3,400

Lee & Associates

3,095

Tarter Stats O'Toole

2,500

Rice & Associates

2,200

(*includes showroom space)

www.www.TheRealDeal.com August 2013 67

Deal Sheet

Commercial deals in New York City Deals are listed from largest to smallest in square feet leased or bought. The Deal Sheet covers transactions from 6/11/13 to 7/10/13. Please submit future deals to deals@therealdeal.com.

Office leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

9 West 57th St

95,200

Och-Ziff Capital Management Group/ n/a

Sheldon Solow / Scott Panzer, Jones Lang LaSalle

The hedge fund signed a lease renewal for the entire 13th and 40th floors and part of the 39th floor, and took the rest of the 39th floor in an expansion. The tenant will pay rent in the low $100s per square foot on the 13th floor and in the $200s on the 39th and 40th floors.

One Hudson Square

80,508

New York Media LLC / R. Martin, J. Wheeler, M. Berg, B. Lane, Jones Lang LaSalle

Trinity Real Estate / Represented inhouse

The media firm signed a direct, 10-year lease with the landlord for the entire fourth floor. The tenant had been subleasing the space from Getty Images.

101 Park Ave

79,200

Tiger Management LLC / M. Horner, B. Winter, R. Longley, Jones Lang LaSalle

Kalikow Properties / J. Cefaly, G. Field, C. Finney, D. McBride, C&W

The hedge fund signed a long-term lease renewal on the entire 33rd, 47th and 48th floors for its headquarters.

17 Battery Park South

73,321

New York Film Academy / H. Kessler, J. Gosin, Newmark Grubb Knight Frank

Moinian Group / Represented inhouse

The school signed a 15-year lease for the entire fourth and fifth floors.

260 Madison Ave

60,105

Hanesbrands Inc. / M. Konsker, M. Ginberg, Jones Lang LaSalle; R. Gallucci, C&W

Sapir Organization / A. Wildes, B. Mosler, C&W

The apparel manufacturer signed a 10-year lease renewal on the sixth and 14th floors, the New York Post reported.

101 Sixth Ave

60,000

Two Sigma Investments / n/a

Edward Minskoff / Paul Glickman, Jones Lang LaSalle

The hedge fund management firm signed a lease, the Wall Street Journal reported. The company has additional space across the street at 100 Sixth Avenue as well as in three buildings nearby.

125 Park Ave

52,450

Pandora Media / W. Iacovelli, R. Feher, CBRE

SL Green / D. Levine, J. Tootell, D. Falk, B. Waterman, P. Shimkin, Newmark Grubb Knight Frank; D. Kaufman, SL Green

The Internet radio provider signed a 10-year lease on the 19th and 20th floors.

245 Park Ave

50,000

Angelo Gordon / D. Falk, P. Shimkin, Newmark Grubb Knight Frank

Brookfield Properties / D. Falk, P. Shimkin, Newmark Grubb Knight Frank

The investment firm signed an expansion lease for an extra floor, Crain’s reported. The tenant now occupies about 110,000 square feet at the building.

132 West 31st St

42,000

TPG Architecture / M. Ravesloot, M. Monahan, CBRE

Savanna / Mitch Konsker, Jones Lang LaSalle

The architecture firm signed a new, 11-year lease to relocate to the building’s entire fourth floor and part of the fifth floor, Crain’s reported. The tenant is relocating from 360 Park Avenue South.

1251 Sixth Ave

41,900

Public Company Accounting Oversight Board / n/a

Mitsui Fudosan / Newmark Grubb Knight Frank

The nonprofit signed a direct lease renewal for the 33,125 square feet it had been subleasing on the 16th floor, and expanded to take the entire floor.

1345 Sixth Ave

40,644

Ellenoff Grossman & Schole / Tim Gibson, C&W

Alliance Bernstein / B. Needleman, M. Affronti, R. Alexander, A. Golod, CBRE

The law firm signed a six-year sublease on the 11th floor, the New York Post reported. The tenant is relocating from 150 East 42nd Street. The asking rent was in the low $50s per square foot, according to the publication.

199 Water St

36,985

NYCHSRO/MedReview Inc. / M. Ravesloot, W. Iacovelli, CBRE

Jack Resnick & Sons / Represented in-house

The nonprofit signed a direct lease with the landlord on the 27th floor, the New York Post reported. The tenant had been subleasing at the building.

245 Park Ave

36,000

Pierpont Securities / B. Goldman, M. Lorberbaum, Newmark Grubb Knight Frank

JPMorgan Chase / B. Alexander, D. Lehman, CBRE

The broker-dealer signed a lease, the New York Post reported. The tenant is relocating from a smaller, 10,000-square-foot space at 650 Fifth Avenue.

199 Water St

35,454

WeissComm Group / Cassidy Turley

Jack Resnick & Sons / J. Cefaly, R. Constable, A. Peretz, C&W; D. Brady, B. Greenberg, Jack Resnick & Sons

The San Francisco–based public relations firm signed a lease on the 14th floor, the New York Post reported.

1177 Sixth Ave

33,626

The Weather Channel / M. Rayner, E. Wartels, Cresa New York

Silverstein Properties / R. Silverstein, J. Artusa, Silverstein Properties; P. Glickman, C. Wasserberger, B. Bass, Jones Lang LaSalle

The cable broadcasting company signed a 10-year lease for the entire sixth floor. The tenant is relocating from 205 East 42nd Street.

9 West 57th St

32,000

Tiger Global Management / Paul Amrich, CBRE

Sheldon Solow / Scott Panzer, Jones Lang LaSalle

The investment manager signed a 10-year lease for the entire 35th floor, Crain’s reported. The asking rent was about $175 per square foot, according to the publication.

10th Ave and West 30th St

30,714

SAP America Inc. / A. Chudnoff, S. Vinett, Jones Lang LaSalle

Related Companies; Oxford Properties Group / R. Alexander, H. Fiddle, R. Stillman, L. DiMicelli, CBRE

The business management software company signed a 16-year lease for additional space at Hudson Yards’ South Tower, the New York Observer reported. The tenant, which leased the building’s 44th through 47th floors earlier this year, is adding the entire 43rd floor for a total occupancy of 144,272 square feet, according to the publication.

757 Third Ave

28,036

Epiq Bankruptcy Solutions / Mitchell Kunikoff, Lee & Associates

RFR Realty / S. Morrows, RFR Realty; M. Konsker, A. Chudnoff, Jones Lang LaSalle

The consulting firm signed a lease on the third and seventh floors, the New York Observer reported.

261 Madison Ave

28,000

Signature Bank / Howard Kaplowitz, Colliers International

ASRR / B. Mosler, A. Wildes, C&W

The bank signed a new lease for 18,000 square feet of office space and 10,000 square feet of retail space, Real Estate Weekly reported.

140 Broadway

26,206

Fundtech / n/a

Union Investments / L. D’Avanzo, R. Constable, W. Overlock, C&W

The Israeli financial technology firm signed a 10-year lease for its first New York location. The tenant will pay roughly $50 per square foot at the building, where asking rents were around $70 per square foot, according to data from CompStak.

104 West 40th St

25,000

Gotham Inc. / Scott Panzer, Jones Lang LaSalle

David Tawfik / Paul Amrich, CBRE

The Interpublic Group advertising subsidiary signed a new lease for the entire sixth and seventh floors, Crain’s reported. The tenant is relocating from 150 East 42nd Street.

3 Park Ave

23,280

Return Path Inc. / Ira Rovitz, Newmark Grubb Knight Frank

Charles Cohen / B. Mosler, C. Borrok, D. Glassman; M. Horowitz, Cohen Brothers

The digital analytics company signed a lease for the entire 41st floor, the New York Post reported. The asking rent was in the mid-$50s per square foot, according to the publication.

601 West 26th St

19,000

Under Armour / J. Greenstein, D. Falk, Newmark Grubb Knight Frank

RXR Realty / Represented in-house

The sports apparel company signed a 10-year lease for part of the 15th floor, Crain’s reported. The reported asking rent was in the $60s per square foot.

375 Park Ave

17,519

375 Leasing LLC / Steven Morrows, RFR Realty

Aviva Investors North America / A. Chudnoff, J. Fanuzzi, B. Bass, Jones Lang LaSalle

The tenant signed a sublease for the entire 14th floor.

68 August 2013 www.TheRealDeal.com

www.TheRealDeal.net December 200

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Office leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

885 Third Ave

13,854

CorpBanca / D. Gronich, L. Zuckerman, Newmark Grubb Knight Frank

IRSA; Marciano Investment Group / S. Klau, M. Weiss, E. Harris, Newmark Grubb Knight Frank

The Chile-based bank signed a 15-year lease on the 33rd floor, the New York Observer reported. The asking rent was $85 per square foot, according to the publication.

11 East 26th St

12,084

Project Worldwide / J. Buslik, Adams & Co.; S. Zarba, CBRE

East Twenty Sixth Associates / James Buslik, Adams & Co.

The global network of marketing communications firms signed a new, sevenyear lease. The reported asking rent was $49 per square foot.

510 Madison Ave

11,500

Prosiris Capital Management / n/a

Boston Properties / P. Amrich, J. Powers, CBRE

The hedge fund signed a new, 10-year lease to relocate from 529 Fifth Avenue.

632 Broadway

11,250

Serengeti Asset Mgmt. / Nora Stats, Tarter Stats O’Toole

n/a / Nora Stats, Tarter Stats O’Toole

The asset management firm signed a lease renewal.

463 Seventh Ave

10,945

Bernardo Fashions LLC / David Levy, Adams & Co.

The Arsenal Company LLC / David Levy, Adams & Co.

The fashion company signed a lease renewal. The reported asking rent was $44 per square foot.

450 Park Ave

10,790

The ADOC Group Inc. / M. Mandell, B. Mosler, C&W

Falconhead Capital LLC / A. Chudnoff, A. Haber, B. Wunsch, Jones Lang LaSalle

The tenant subleased the entire third floor.

440 Park Ave South

10,000

BlackBerry / Mogull Realty

Samco Properties / Represented inhouse

The wireless communications company signed a lease for its first New York office, the New York Post reported.

888 Seventh Ave

9,370

Loral Space and Communications / Alan Desino, Colliers International

Lyster Watson Management Inc. / A. Chudnoff, B. Wunsch, D. Turkewitz, Jones Lang LaSalle

The satellite communications company signed a sublease for part of the 40th floor. The tenant is relocating from 600 Third Avenue.

52 Vanderbilt Ave

9,275

SocialFlow / J. Peck, N. Farmakis, G. Kerper, Studley

Brause Realty / L. Desatnick, F. Doyle, A. Petrus, Jones Lang LaSalle; M. Rackoff, D. Brause, Brause Realty

The social media marketing company signed a new, long-term lease for the entire 12th floor. The tenant is relocating from 2 Grand Central Tower.

52 Vanderbilt Ave

9,275

AdLarge Media / Craig Berman, Joseph P. Day Realty

Brause Realty / L. Desatnick, F. Doyle, A. Petrus, Jones Lang LaSalle; M. Rackoff, D. Brause, Brause Realty

The media sales company signed a new, long-term lease for the entire seventh floor. The tenant is relocating from 475 Park Avenue South.

15 West 37th St

8,500

Welocalize / J. Weinberg, N. Bates, DTZ

Kamber Management / Represented in-house

The language localization services firm signed a long-term lease for the entire eighth floor, the New York Observer reported.

31 Penn Plaza

6,822

Real Estate Arts Inc. / M. Hirsch, B. Friedland, CBRE

Savanna / M. Konsker, M. Astrachan, M. Polhemus, Jones Lang LaSalle

The strategic design consultancy signed a new, 10-year lease for part of the sixth floor.

250 West 39th St

6,596

Level 8 Apparel / C O’Toole, J. Mines, Tarter Stats O’Toole

Lincoln Properties / C O’Toole, J. Mines, Tarter Stats O’Toole

The apparel company signed a long-term lease.

477 Madison Ave

6,384

Trepp LLC / n/a

JAB Madison Associates / D. Hoffman Jr., W. Williams, Cassidy Turley

The commercial real estate data provider signed an expansion lease on the second floor, bringing its total occupancy to 40,489 square feet.

115 East 23rd St

6,140

PlaceIQ / D. Regal, E. Algier, ABS Partners

n/a / W. Becker, D. Dynak, First Pioneer Realty

The intelligence provider for marketers signed a lease for the entire seventh floor.

757 Third Ave

5,700

Omni Development / Represented in-house

RFR Realty / S. Morrows, RFR Realty; M. Konsker, A. Chudnoff, Jones Lang LaSalle

The real estate developer signed a lease, the New York Observer reported.

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70 August 2013 www.TheRealDeal.com

Office leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

52 Vanderbilt Ave

5,478

U.S. International Media / Hunter Duncan, DTZ

Brause Realty / L. Desatnick, F. Doyle, A. Petrus, Jones Lang LaSalle; M. Rackoff, D. Brause, Brause Realty

The media services provider signed an expansion lease on part of the fifth floor. The tenant previously occupied a 4,363-square-foot space in the building.

757 Third Ave

5,284

Astoria Federal Savings and Loan Association / E. Cagner, B. Lee, P. Shimkin, Newmark Grubb Knight Frank

RFR Realty / S. Morrows, RFR Realty; M. Konsker, A. Chudnoff, Jones Lang LaSalle

The thrift depository signed a lease, the New York Observer reported.

477 Madison Ave

5,178

Bankrate Inc. / Dave Armento, New Dominion

JAB Madison Associates / D. Hoffman Jr., W. Williams, Cassidy Turley

The online aggregator of financial rate data signed an expansion lease on the fourth floor. With the new lease, the tenant now occupies 18,763 square feet in the building.

36 East 12th St

5,000

Draftstreet / Gregory Rogers, Rice & Associates

Legov Realty Corp. / Doug Rice, Rice & Associates

The fantasy sports company signed a lease on the second floor.

350 Fifth Ave (Empire State Building)

4,705

Enclos Corp. / Thomas Sullivan, CBC Alliance

W&H Properties / W. Cohen, R. Kass, S. Ursini, Newmark Grubb Knight Frank

The façade engineering and manufacturing firm signed a lease on the 76th floor.

250 West 57th St

4,519

Young Concert Artists / R. Fisher, T. Scheinman, Newmark Grubb Knight Frank

W&H Properties / H. Blair, S. Kearns, K. Mekles, C&W

The nonprofit signed a lease renewal.

20 West 55th St

4,462

Glenn Horowitz Bookseller Inc. / David Greene, Murray Hill Properties

Skyline Developers / B. Cohen, A. Weisz, R. Kass, Newmark Grubb Knight Frank

The bookseller and art dealer signed a 15-year lease for the entire penthouse office space.

477 Madison Ave

4,130

Elara Capital PLC / n/a

JAB Madison Associates / D. Hoffman Jr., W. Williams, Cassidy Turley

The investment bank signed a lease renewal on the second floor.

561 Seventh Ave

3,944

Lazarus & Harris LLP / n/a

Handler Real Estate / Represented in-house

The law firm signed a long-term lease renewal on the 11th floor.

52 Vanderbilt Ave

3,797

Cypress Associates / L. Desatnick, F. Doyle, A. Petrus, Jones Lang LaSalle

Brause Realty / L. Desatnick, F. Doyle, A. Petrus, Jones Lang LaSalle; M. Rackoff, D. Brause, Brause Realty

The investment banking firm signed an expansion lease for part of the fifth floor.

485 Seventh Ave

3,610

Priceline.com / Robert Corbi, Colliers International

The Eretz Group / C O’Toole, J. Mines, Tarter Stats O’Toole

The e-commerce company signed a new, five-year lease. The reported asking rent was $38 per square foot.

250 West 39th St

3,605

NJR Associates / C O’Toole, J. Mines, Tarter Stats O’Toole

n/a / C O’Toole, J. Mines, Tarter Stats O’Toole

The fashion company relocated and extended its lease in the building. The reported asking rent was $37 per square foot.

45 Broadway

3,500

Phillips & Associates, Attorneys at Law PLLC / Wire Consulting

45 Broadway Owner LLC / The Lawrence Group LLC

The law firm signed a 10-year lease.

466 Broome St

3,500

Trunk Archives / Catherine O’Toole, Tarter Stats O’Toole

466-26 Soho LLC / Catherine O’Toole, Tarter Stats O’Toole

The digital imaging company signed a five-year expansion lease. The reported asking rent was $70 per square foot.

866 Sixth Ave

3,200

Versatile Studios Inc. / Jarad Winter, Capstone Realty Advisors

n/a / Sam Stein, Justin Management

The photo studio signed a lease for the entire eighth floor.

28 West 44th St

3,010

Eikos Partners / Matthew Kurzban, Rice & Associates

APF Properties / Joshua Goldman, C&W

The strategic IT consulting firm signed a lease.

215 West 125th St

3,005

National Black Leadership Commission on AIDS / Elizabeth Juviler, Rice & Associates

Health Insurance Plan of Greater New York / Colliers International

The nonprofit signed a lease.

11 Broadway

2,865

The Law Offices of Gerard Karikari / Uriel Gandelman, VIZA Group

Bowling Green Associates / M. Braun, D. Braun, Braun Management

The law firm signed a five-year lease. The reported asking rent was $31 per square foot.

39 West 38th St

2,708

Project Décor / Jack Petrie, Creative Office

n/a / C. O’Toole, S. Moore, Tarter Stats O’Toole

The virtual design center signed a new, three-year lease. The reported asking rent was $32 per square foot.

39 West 38th St

2,708

Leanne Marshall / Ken Lerner, Okada & Co.

The Eretz Group / C. O’Toole, S. Moore, Tarter Stats O’Toole

The jewelry designer signed a new, 10-year lease for office space. The reported asking rent was $32 per square foot.

222 Fifth Ave

2,700

IMG Live / Lidice Mendoza, Rice & Associates

222 Fifth Inc. / n/a

The marketing agency signed a lease for the entire fifth floor.

424 West 33rd St

2,620

Myx Fusions / S. Moore, J. Slade, Tarter Stats O’Toole

Planned Parenthood Federation of America Inc. / E.N. Cutler, Newmark Grubb Knight Frank

The beverage company signed a new, three-year lease. The reported asking rent was $39 per square foot.

52 Vanderbilt Ave

2,558

Coalition for Rainforest Nations / Philip Gardiner, Vicus Partners

Brause Realty / L. Desatnick, F. Doyle, A. Petrus, Jones Lang LaSalle; M. Rackoff, D. Brause, Brause Realty

The intergovernmental organization signed a new lease for part of the 14th floor. The tenant is relocating from 370 Lexington Avenue.

261 Fifth Ave

2,500

China Glassware Capital Qixian Inc. / Jeffrey Anderson, Rice & Associates

261 Fifth Avenue LLC / Robert Fallucci, C&W

The glassware company signed a lease on the 15th floor.

259 West 30th St

2,500

Kore Software / Brian Wilson, Capstone Realty Advisors

Two Friends Realty LLC / Joe McLaughlin, Capstone Realty Advisors

The software company signed a lease for part of the eighth floor.

552 Seventh Ave

2,500

The Performing Option / Gregory Rogers, Rice & Associates

n/a / C. O’Toole, J. Slade, Tarter Stats O’Toole

The acting school for children signed a seven-year lease. The reported asking rent was $35 per square foot.

75 Greene St

2,500

Cengage Learning / Steven Jaray, Colliers International

n/a / C. O’Toole, S. Moore, Tarter Stats O’Toole

The education publisher signed a new, five-year lease. The reported asking rent was $70 per square foot.

1 Penn Plaza

2,413

JM Search Inc. / Elizabeth Juviler, Rice & Associates

Vornado / Represented in-house

The executive search firm signed a lease on the 21st floor.

370 Lexington Ave

2,410

Hines Held LLP / Curtis Woodside, Rice & Associates

Sherwood Equities / Represented inhouse

The law firm signed a lease.

250 West 39th St

2,400

Greenland Trading / C. O’Toole, J. Mines, Tarter Stats O’Toole

n/a / C. O’Toole, J. Mines, Tarter Stats O’Toole

The fashion company signed a five-year lease renewal.

250 West 39th St

2,295

Level 8 Apparel / C. O’Toole, J. Mines, Tarter Stats O’Toole

Lincoln Properties / C. O’Toole, J. Mines, Tarter Stats O’Toole

The apparel company signed a new, seven-year lease for a second space in the building. The reported asking rent was $36 per square foot.

250 West 57th St

2,065

Investor Communications Network / George McCarthy, Real Property Advisors

W&H Properties / H. Blair, S. Kearns, K. Mekles, C&W

The research and advisory services firm signed a lease.

552 Seventh Ave

1,800

Belldini / Catherine O’Toole, Tarter Stats O’Toole

n/a / Catherine O’Toole, Tarter Stats O’Toole

The fashion company signed a new, five-year lease. The reported asking rent was $35 per square foot.

415 Lafayette St

1,750

Triumph Construction Corp. / Michelle Styer, Rice & Associates

Only Properties LLC / n/a

The construction company signed a lease on the second floor.

110 West 40th St

1,627

Women’s City Club of New York / Studley

One Ten West Fortieth Associates / D. Levy, B. Maslin, Adams & Co.

The nonprofit signed a new, 10-year lease. The reported asking rent was $46 per square foot.

www www.TheRealDeal.com August 2013 71

Office leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

11 Broadway

1,502

Keller & Vandernoth / Uriel Gandelman, VIZA Group

Bowling Green Associates / M. Braun, D. Braun, Braun Management

The accounting firm signed a five-year lease. The reported asking rent was $35 per square foot.

10 West 33rd St

1,463

Cameo Public Relations / David Levy, Adams & Co.

Ten West Thirty Third Associates / David Levy, Adams & Co.

The public relations firm signed a new lease. The reported asking rent was $42 per square foot.

110 Greene St

1,400

MVTS Technologies / Zack Tagani, Goldman Properties

n/a / J. Slade, S. Moore, Tarter Stats O’Toole

The technology company signed a new, two-year lease.

11 Broadway

1,375

Ross Meyerson; Julie Tucker / Uriel Gandelman, VIZA Group

Bowling Green Associates / M. Braun, D. Braun, Braun Management

The casting agency signed a lease. The reported asking rent was $32 per square foot.

935 Kelly St (The Bronx)

1,274

Versatil Beauticians / S. Kaufman, S. Lorenzo, NAI Friedland Realty

Kelly Street Partners LLC / S. Kaufman, S. Lorenzo, NAI Friedland Realty

The tenant signed an office lease.

110 West 40th St

1,244

Pippin Properties Inc. / CBRE

One Ten West Fortieth Associates / D. Levy, B. Maslin, Adams & Co.

The literary agency signed a new, six-year lease. The reported asking rent was $44 per square foot.

555 Eighth Ave

1,227

Frontline CPR / Eli Someck, Redwood Property Group

n/a / Tom Bisaki, Sloyer Forman

The first aid training company signed an office lease. The reported asking rent was $34 per square foot.

6 Maiden Ln

1,175

Just Train / Uriel Gandelman, VIZA Group

Daror Associates / M. Braun, D. Braun, Braun Management

The gym signed a lease on the second floor of the office building.

2 West 45th St

1,150

Design Resources NY / Uriel Gandelman, VIZA Group

n/a / Louis Zimbaro, Joseph P. Day Realty

The design firm inked a seven-year lease. The reported asking rent was $40 per square foot.

57 West 57th St

1,100

Zoya Zak DDS PC / Max Vizgalin, VIZA Group

n/a / Christel Engel, Colliers International

The dentist signed a 10-year lease. The reported asking rent was in the low to mid-$60s per square foot.

110 West 40th St

1,053

Kazarian/Spencer/Ruskin Associates Inc. / Home Work People II LLC

One Ten West Fortieth Associates / D. Levy, B. Maslin, Adams & Co.

The talent agency signed a new, five-year lease. The reported asking rent was $44 per square foot.

160 Broadway

1,015

OmniMarkets / U. Gandelman, M. Vizgalin, VIZA Group

Daror Associates / M. Braun, D. Braun, Braun Management

The financial services firm signed a lease. The reported asking rent was $35 per square foot.

55 Broad St

992

Netbiis USA / Marie Hammoudi, VIZA Group

n/a / Eugene Baumstein, Rudin Management

The technology firm signed a seven-year lease. The reported asking rent was $36 per square foot.

315 Madison Ave

970

Zen Body Mechanics / Max Vizgalin, VIZA Group

Abramson Brothers / Represented in-house

The orthopedic massage therapist signed a five-year office lease. The reported asking rent was $38 per square foot.

250 West 39th St

948

YaYa Publicity / David Ho, Okada & Co.

C. O’Toole, J. Mines, Tarter Stats O’Toole / n/a

The fashion company signed a new lease. The reported asking rent was $37 per square foot.

850 Seventh Ave

880

Body Balance NYC / Max Vizgalin, VIZA Group

Textwood Investment / David Kahane, DAK Commercial Realty

The massage therapist signed an office lease. The reported asking rent was $43 per square foot.

57 West 57th St

850

N. Spa New York / Uriel Gandelman, VIZA Group

n/a / Christel Engel, Colliers International

The day spa signed a five-year lease. The reported asking rent was in the low to mid-$60s per square foot.

250 West 39th St

849

Recherche / Daniel Schwartz, Winslow & Co.

n/a / C. O’Toole, J. Mines, Tarter Stats O’Toole

The fashion company signed a three-year lease. The reported asking rent was $37 per square foot.

250 West 57th St

820

Vendini / Jacob Hecht, Bergson Strategies

W&H Properties / H. Blair, S. Kearns, K. Mekles, C&W

The software company signed a lease.

250 West 39th St

792

Sapphire USA Inc. / C. O’Toole, J. Mines, Tarter Stats O’Toole

n/a / C. O’Toole, J. Mines, Tarter Stats O’Toole

The fashion company signed a three-year lease renewal. The reported asking rent was $37 per square foot.

11 Broadway

690

Samson Software Solutions / Alex Saharov, VIZA Group

Bowling Green Associates / M. Braun, D. Braun, Braun Management

The software company signed a three-year lease. The reported asking rent was $35 per square foot.

64 Fulton St

673

Cinnabar Pictures / Marie Hammoudi, VIZA Group

Recovery Country Club / William Hocking, William S. Hocking Realty

The production company signed an office lease. The reported asking rent was $30 per square foot.

110 West 40th St

648

GBS Group / n/a

One Ten West Fortieth Associates / D. Levy, B. Maslin, Adams & Co.

The tenant signed a new, four-year office lease. The reported asking rent was $46 per square foot.

110 West 40th St

543

Quick Response Service Inc. / D. Levy, B. Maslin, Adams & Co.

One Ten West Fortieth Associates / D. Levy, B. Maslin, Adams & Co.

The tenant signed a new office lease. The reported asking rent was $42 per square foot.

250 West 57th St

450

Calvisius / n/a

W&H Properties / H. Blair, S. Kearns, K. Mekles, C&W

The production company signed an office lease.

110 West 40th St

398

Barry Cohn LLC / CBRE

One Ten West Fortieth Associates / D. Levy, B. Maslin, Adams & Co.

The tenant signed a new office lease. The reported asking rent was $44 per square foot.

Retail leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

1333 Broadway

56,730

Urban Outfitters / W. McDevitt, K. Fencl, McDevitt Company

W&H Properties / A. Goldberg, M. Chmielecki, CBRE

The fashion retailer signed a lease for a three-level space. The tenant will take occupancy in September.

70-17 83rd St (Queens)

19,000

Megavision Inc. / J. Ibrahim, R. Tinio, Right Time Realty

K-9 Caterers / J. Ibrahim, R. Tinio, Right Time Realty

The retail fixtures company signed a lease.

253 West 47th St

15,000

Buffalo Wild Wings / M. Gleicher, J. Winick, Winick Realty

Friedland Properties / Represented in-house

The sports bar chain signed a lease for its flagship New York City location.

18-55 Steinway St (Queens)

15,000

East Coast Cutting / G. Raftis, R. Tinio, Right Time Realty

Zoe Management / n/a

The tenant signed a retail lease.

42-56 East Houston St

10,365

CVS Pharmacy / Jason Pruger, Newmark Grubb Knight Frank

n/a / M. Kadosh, J. Nero, CBRE

The drugstore chain signed a 15-year lease for a new location.

226 East 144th St (The Bronx)

10,199

Deal$ by Dollar Tree / M. Mahony, R. Senior, E. Bukai, Ripco Real Estate

Morris Avenue Owners LLC / Kathy Zamechansky, KZA Realty

The discount retail chain signed a lease for a new location.

70-30 80th St (Queens)

9,100

Franco LLC / J. Ibrahim, R. Tinio, Right Time Realty

Way Fong / J. Ibrahim, R. Tinio, Right Time Realty

The costume and accessories retailer signed a lease.

840 Westchester Ave (The Bronx)

8,337

Deal$ by Dollar Tree / M. Mahony, R. Senior, E. Bukai, Ripco Real Estate

Columbus Pacific Properties / Represented in-house

The discount retail chain signed a lease for a new location.

317 East 34th St

6,654

Laser & Skin Surgery Center of New York / David Levy, Adams & Co.

317 East 34th Street LLC / David Levy, Adams & Co.

The medical tenant signed a new, eight-year retail lease for 4,547 square feet and a seven-year lease renewal for 2,107 square feet.

340 Fourth Ave (Brooklyn)

6,000

LA Boxing / n/a

n/a / R. Condren, K. Triglia, G. Danut, T. King, CPEX Real Estate

The boxing studio signed a retail lease.

72 August 2013 www.TheRealDeal.com

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Retail leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

688 Sixth Ave

5,200

Tiger Schulmann’s Mixed Martial Arts / J. Burke, L. Roth, J. W. Burke & Company

Francmen Associates / Robert Frischman, JDF Realty

The martial arts studio signed a lease for the first, second and third floors.

550 West 54th St

5,000

MH Supermarket Corp. / n/a

Two Trees Management / Represented in-house

The supermarket signed a lease at the Mercedes House luxury rental building, the New York Observer reported. The asking rent was $60 per square foot, according to the publication.

224 Flatbush Ave (Brooklyn)

4,100

TD Bank / R. Senior, S. Shabbot, Ripco Real Estate

478/480/482 Bergen LLC / R. Senior, S. Shabbot, Ripco Real Estate

The bank signed a 20-year lease for a new location.

175 Varick St

3,700

TD Bank / C&W

AEW Capital Management / M. Kapnick, P. Smith, SRS Real Estate Partners

The bank signed a 20-year lease for a new location.

456 Grand St (Brooklyn)

3,500

Tiger Schulman’s Mixed Martial Arts / Jonathan Burke, J. W. Burke & Company

Babaev Group / Represented in-house

The martial arts studio signed a retail lease.

111 Nassau St

3,095

Tre Monelli LLC / H. Goldfarb, S. Lindenfeld, Lee & Associates

Ann/Nassau Realty LLC / H. Goldfarb, S. Lindenfeld, Lee & Associates

The Italian restaurant signed a 15-year lease. The reported asking rent was $100 per square foot.

1542 Third Ave

2,747

IT’SUGAR / Jeremy Ezra, RKF

Malkin Properties / n/a

The candy and novelty retailer signed a lease on the ground floor of luxury condo the Gotham.

12 Wooster St

2,500

Melissa Joy Manning / Greg Kim, Tarter Stats O’Toole

D. James Dee / Stephen Tarter, Tarter Stats O’Toole

The jewelry designer signed a 10-year retail lease. The reported asking rent was $100 per square foot.

531 West 24th St

2,200

Unix Gallery / Earl Bateman, Rice & Associates

GTM Associates / n/a

The art gallery signed a lease.

1165 Elton St (Brooklyn)

2,126

East New York Restoration LDC / n/a

Hudson Gateway LLC / M.C. O’Brien Inc.

The nonprofit signed a retail lease.

189 East 3rd St

2,000

Casa Blanca / Ravi Idnani, NYCRS

Corigin Manhattan Apartment / James Famularo, NYCRS

The restaurant signed a lease for space on the ground floor and lower level. The reported asking rent was $100 per square foot.

110 West End Ave

1,910

n/a / n/a

n/a / David Chkheidze, Massey Knakal

A nail salon signed a lease.

717 Flatbush Ave (Brooklyn)

1,800

Baby City Food Inc. / n/a

n/a / G. Bartlett, D. Chkheidze, Massey Knakal

The baby supplies store signed a lease.

192-196 Second Ave

1,400

Juke Bar / Ina Donath, NYCRS

n/a / Helen Demetrious, NYCRS

The bar signed a 10-year lease.

155 East 52nd St

1,300

DE CLIE / L. Roth, J. Burke, J. W. Burke & Company

Billy Haugh / L. Roth, J. Burke, J. W. Burke & Company

The café and bakery signed a lease.

982 Manhattan Ave (Brooklyn)

1,200

Miron Properties / Represented inhouse

Hercules Management Corp. / n/a

The real estate brokerage signed a 15-year lease to relocate its Brooklyn office.

267 Bleecker St

1,000

London Candy Company / A. Connolly, J. Fantasia, RKF

n/a / n/a

The British candy and coffee retailer signed a lease to relocate from 1442 Lexington Avenue on the Upper East Side.

2258 Adam Clayton Powell Jr. Blvd

940

Heritage Pharmacy & Surgical Supplies / n/a

AIMCO / H. Goldfarb, S. Lindenfeld, Lee & Associates

The pharmacy signed a lease.

176 Bleecker St

900

100 Montaditos / n/a

n/a / Brendan Gotch, Massey Knakal

The Spanish sandwich chain signed a lease.

107 Mercer St

750

Pineda Covalin / n/a

n/a / Stephen Tarter, Tarter Stats O’Toole

The Mexican fashion designer signed a new, long-term lease for retail space.

Buys Address

Size

Buyer / Representative

Seller / Representative

Notes

107 and 109 West 57th St

Development site

JDS Development; Property Markets Group / n/a

n/a / Darcy Stacom, CBRE; Corcoran

The Steinway Building at 109 West 57th Street, its accompanying land lease and the site next door at 107 West 57th Street sold for $177.8 million. The buyers plan to build condo units and retail in a tower that is expected to rise to more than 900 feet.

2 Rector St

26-story, 465,000 office bldg

Kushner Companies; CIM Group / Ray Cecora, CIA Group

Savanna; Larry Gluck / R. Cohen, R. Baxter, S. Latham, J. Caplan, Jones Lang LaSalle

The property sold for $140 million, or $300 per square foot, the New York Post reported.

752 West End Ave

24-story apt. bldg, 197 units total

Crescent Heights / n/a

Clipper Equity; Rieder Holdings / D. Harmon, A. Spies, J. Celestin, Eastdil Secured

The property sold for $120 million. The sellers acquired the building for $72 million in 2010.

62-60 99th St (Queens)

16-story apt. bldg, 417 units total

Treetop Development / J. Cruz, A. Scandalios, HFF

n/a / n/a

The rental building sold for $85.25 million.

41-17 Crescent St (Queens)

130-unit apt. bldg

Charles Dayan / n/a

Simon Development Group; Meadow Partners / A. Spies, D. Harmon, Eastdil Secured

The property sold for about $85 million, Crain’s reported.

465 Broadway

14,100 sf retail condo

Centurion Realty; Imperium Capital; ASB Real Estate / n/a

Savanna / W. Heller, W. Silverman, E. Negrin, D. Parker, Studley

The retail condo sold for $80 million.

Manhattan portfolio

14 office bldgs

n/a / n/a

Princeton Holdings / n/a

Princeton Holdings’ 25 percent stake in the “Ring portfolio”, controlled by F.M. Ring Associates, sold for $74 million. The properties are all located in Midtown South and include 212 Fifth Avenue and 251 Park Avenue South, among others.

206-210 West 77th St

Development site

The Naftali Group / n/a

n/a / n/a

The property sold for $55.48 million. The parking garage on the parcel will be demolished to make way for a new condo development. The project is expected to break ground in 2014.

30 West 21st St

12-story office bldg

Skyline Development Group / n/a

n/a / James Nelson, Massey Knakal

The property sold for $38.5 million.

Greenwich Village portfolio

6 apt. bldgs

Dalan Management; RWN Real Estate Partners / Ben Tapper, Eastern Consolidated

Noah Osnos / Peter Hauspurg, Eastern Consolidated

The package of multi-family buildings with seven commercial spaces sold for $32.34 million. The properties are located at 89 and 91 Christopher Street and 329, 333, 337 and 341 Bleecker Street.

334-338 East 79th St

46-unit apt. bldg

Harbor Group International / n/a

n/a / n/a

The property sold for $20.5 million. The buyer plans to renovate the building with $1.2 million in upgrades to the units’ kitchen, bath and living areas.

74 August 2013 www.TheRealDeal.com The

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Buys continued Address

Size

Buyer/ Representative

234-238 East 23rd St

62,000 buildable sf development site

The Naftali Group / Amit Doshi, Besen & Associates

Westwater Equities LLC; Lee Fat Property Inc. / Adam Traub, Besen & Associates

The property sold for $19.5 million. The site currently contains two apartment buildings with 13 residential units and three retail units.

1005 Jerome Ave and 1000 Anderson Ave (The Bronx)

2 apt. bldgs, 202 units total

1005 Jerome Equities / Aaron Jungreis, Rosewood Realty

1005 Jerome Avenue Owner LLC / Aaron Jungreis, Rosewood Realty

The property sold for $17.5 million.

17-27 West 125th St

50-unit apt. bldg

Treetop Development / n/a

n/a / P. Van Der Ahe, S. Edelstein, S. Glasser, Marcus & Millichap

The property sold for $13.6 million.

Bronx portfolio

Industrial bldg and 10 development sites

n/a / n/a

n/a / N. Burns, D. Simone, Massey Knakal

The properties sold for $13.28 million to individual investors. The sites are located in the West Bronx at 920, 930, 950, 969-973 and 998 University Avenue and 939, 950, 977-979 and 985 Summit Avenue.

1061 Second Ave

4-story office bldg

n/a / n/a

n/a / T. Gammino Jr., C. Olsen, Massey Knakal

The property sold for $13 million.

1728 Second Ave and 435 East 75th St

2 apt. bldgs, 36 units total

n/a / HPNY

The two walk-up buildings sold for $12.3 million.

174 Duane St

4-story apt. bldg, 3 units total

n/a / n/a

n/a / B. Knakal, N. Petkoff, Massey Knakal

The property sold for $11.5 million.

118-120 Duane St

5-story, 27,000 sf apt. bldg, 9 units total

United American Land / HPNY

Ackerman Holding Company / HPNY

The property sold for $11 million. The site includes 7,500 square feet of additional air rights for development.

1854 Second Ave

6-story apt. bldg, 25 units total

Local investor / Adelaide Polsinelli, Eastern Consolidated

300 East 96th Street LLC / A. Polsinelli, M. Yawitz, P. Nigido, Eastern Consolidated

The property sold for $9.8 million.

1473-1475 Sheridan Ave (The Bronx)

6-story, 92,676 sf apt. bldg, 100 units total

1475 Sheridan Equities / Aaron Jungreis, Rosewood Realty

1475 Sheridan Avenue Owner LLC / Aaron Jungreis, Rosewood Realty

The elevator building sold for $9.3 million. The price represents a gross rent multiple of 7.25.

220 East 18th St

100-unit apt. bldg

Local investor / Josh Orlander, GFI Realty

Local investor / Joseph Landau, GFI Realty

The property sold for $9.05 million, or $90,500 per unit.

736 Broadway

11-story industrial bldg

n/a / n/a

n/a / B. Knakal, J. Nelson, Massey Knakal

The property sold for $8.7 million.

36 Riverside Dr

7,380 sf apt. bldg, 8 units total

n/a / n/a

n/a / Adelaide Polsinelli, Eastern Consolidated

The property sold for $8.6 million.

225 13th St (Brooklyn)

26-unit apt. bldg

n/a / A. Hess, J. Colleran, K. Royer, TerraCRG

The property sold for $8.28 million, or $352 per square foot. The price represents a capitalization rate of 6.4 percent and a gross rent multiple of 12.5.

477 3rd St (Brooklyn)

5-story apt. bldg, 20 units total

n/a / Erik Yankelovich, GFI Realty

Local investor / Roni Abudi, GFI Realty

The walk-up building sold for $7.75 million, or about $387,500 per unit.

210 Rivington St

6-story apt. bldg, 20 units total

n/a / G. Niblock, J. Radmin, Friedman-Roth Realty

The walk-up building sold for $7.63 million.

93-95 India St (Brooklyn)

5-story, 17,600 sf apt. bldg, 20 units total

93 India LLC / Samuel Kooris, Rosewood Realty

93 India Street LLC / Michael Kerwin, Rosewood Realty

The walk-up building sold for $7.6 million.

12 East 95th St

5-story, 5,800 sf apt. bldg, 10 units total

Peter Yu / n/a

Silvershore Properties 18 LLC / n/a

The property sold for $7.6 million.

1780 Eastburn Ave and 1125 Wyatt St (The Bronx)

2 apt. bldgs, 80 units total

n/a / A. Doshi, Besen & Associates; L. Capin, Capin & Associates

1780 Eastburn Av E LLC / A. Doshi, Besen & Associates; L. Capin, Capin & Associates

The elevator buildings sold for $7.25 million.

2800 Heath Ave (The Bronx)

7-story apt. bldg, 78 units total

n/a / Amit Doshi, Besen & Associates

Heath Realty LLC / Amit Doshi, Besen & Associates

The elevator building sold for $7 million.

190 South 1st St (Brooklyn)

Development site

n/a / Abraham Posner, Midwood Group

The property sold for $7 million.

63 Spring St

5-story, 5,500 sf apt. bldg, 4 units total

Silvershore Properties 40 LLC / n/a

236 Lafayette Owners LLC / n/a

The property sold for $6.4 million.

2265 and 2271 Morris Ave and 2345 Crotona Ave (The Bronx)

3 apt. bldgs, 83 units total

n/a / E. Jordan, A. Watkins, Northeast Private Client Group

n/a / n/a

The properties sold for $6.33 million, or $76,300 per unit.

267 Flatbush Ave (Brooklyn)

4-story, 9,000 sf apt. bldg, 9 units total

267 Flatbush Associates LLC / O. Cohen, A. Hess, M. DiBella, M. Hernandez, TerraCRG

Silvershore Properties 20 LLC / O. Cohen, A. Hess, M. DiBella, M. Hernandez, TerraCRG

The property sold for $6.2 million. The seller acquired the building last year for $2.3 million.

592-594 Dean St and 587-597 Bergen St (Brooklyn)

Development site

n/a / n/a

The warehouse and parking lot sold for $6 million, Brownstoner reported.

10 West 28th St

5-story apt. bldg, 6 units total

1170 Broadway Associates / n/a

Silvershore Properties 6 LLC / n/a

The property adjacent to the NoMad Hotel sold for $6 million. The purchase will allow the hotel to expand.

199 Cook St (Brooklyn)

30,000 sf industrial bldg

Mann Group / n/a

n/a / n/a

The property sold for $6 million. The buyer plans to convert the warehouse into artistsâ&#x20AC;&#x2122; studios.

747 Ninth Ave

5-story apt. bldg, 12 units total

n/a / HPNY

The property sold for $5.75 million.

2320 Aqueduct Ave (The Bronx)

6-story, 51,000 sf apt. bldg, 61 units total

2320 Aqueduct Partners / Aaron Jungreis, Rosewood Realty

2320 Aqueduct Ave. Owner LLC / Aaron Jungreis, Rosewood Realty

The elevator building sold for $5.3 million. The price represents a gross rent multiple of 7.5.

228 East 10th St

5-story, 8,400 sf mixed-use bldg

DSA Management / Aaron Jungreis, Rosewood Realty

228 East 10th Street LLC / Michael Kerwin, Rosewood Realty

The walk-up building sold for $4.4 million. The price represents a gross rent multiple of 16.3.

401 State St (Brooklyn)

Development site

n/a / n/a

n/a / B. Knakal, S. Palmese, Massey Knakal

The property sold for $4.2 million.

1823-1831 White Plains Rd (The Bronx)

5-story apt. bldg, 35 units total

Metro Realty Dividend Fund LLC / A. Doshi, Besen & Associates; L. Capin, Capin & Associates

1823-1831 White Plains Road LLC / A. Doshi, Besen & Associates; L. Capin, Capin & Associates

The property sold for $4.15 million.

44-46 Purves St (Queens)

36,528 buildable sf development site

n/a / n/a

n/a / Evan Daniel, Massey Knakal

The property sold for $4.14 million, or $113 per buildable square foot.

265 Fourth Ave (Brooklyn)

14-unit apt. bldg

n/a / A. Hess, J. Colleran, K. Royer, TerraCRG

The property sold for $4.13 million. The price represents a capitalization rate of 4 percent and a gross rent multiple of about 14.

76 August 2013 www.TheRealDeal.com

Seller / Representative

Notes

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Buys continued Address

Size

Buyer/ Representative

Seller / Representative

Notes

291 Metropolitan Ave (Brooklyn)

Development site

n/a / n/a

n/a / Abraham Posner, Midwood Group

The property sold for $4 million.

620 East 178th St (The Bronx)

5-story apt. bldg, 47 units total

n/a / A. Doshi, Besen & Associates; L. Capin, Capin & Associates

Prana Nine Properties LLC / A. Doshi, Besen & Associates; L. Capin, Capin & Associates

The walk-up building sold for $3.8 million.

283 West 147th St

6-story, 10,788 sf apt. bldg, 23 units total

Local investor / V. Sozio, M. Tortorici, J. Deutch, Ariel Property Advisors

n/a / V. Sozio, M. Tortorici, J. Deutch, Ariel Property Advisors

The property sold for $3 million, or $278 per square foot.

78-02/10 Metropolitan Ave (Queens)

10,300 sf retail bldg

n/a / n/a

n/a / T. Donovan, B. Sarath, Massey Knakal

The property sold for $2.94 million, or about $285 per square foot.

118 East 25th St

3,800 sf office co-op

n/a / n/a

n/a / John Ciraulo, Massey Knakal

The third-floor commercial co-op sold for $2.8 million, or $737 per square foot.

698 Second Ave

4-story, 4,356 sf mixed-use bldg

n/a / V. Sozio, S. Shkury, M. Tortorici, J. Deutch, Ariel Property Advisors

The property sold for $2.75 million. The buyer plans to open a cafĂŠ and restaurant at the site.

57-14/16 Roosevelt Ave (Queens)

6,300 sf retail bldg

n/a / n/a

n/a / Stephen Preuss, Massey Knakal

The property sold for $2.5 million, or about $407 per square foot.

156-158 East 33rd St

Mixed-use bldg

n/a / n/a

n/a / James Famularo, NYCRS

The property sold for $2.42 million.

10-57 Jackson Ave (Queens)

3-story mixed-use bldg

n/a / n/a

n/a / Evan Daniel, Massey Knakal

The property sold for $2.26 million, or $526 per square foot.

118-18 Liberty Ave (Queens)

3-story, 5,000 sf mixed-use bldg

n/a / n/a

n/a / S. Preuss, B. Sarath, Massey Knakal

The property sold for $2.23 million, or about $445 per square foot.

115 Atlantic Ave (Brooklyn)

4-story apt. bldg

Silvershore Atlantic LLC / n/a

GVC Realty LTD / n/a

The property sold for $2 million.

2174 Davidson Ave (The Bronx)

5-story apt. bldg, 31 units total

n/a / Amit Doshi, Besen & Associates

Laurent Felix / Matthew Garcia, Besen & Associates

The corner walk-up building sold for $1.97 million.

945 Park Pl (Brooklyn)

15-unit apt. bldg

n/a / n/a

n/a / Abraham Posner, Midwood Group

The property sold for $1.95 million.

201-04-08 Northern Blvd (Queens)

10,080 buildable sf development site

n/a / n/a

n/a / Stephen Preuss, Massey Knakal

The property sold for $1.82 million, or $181 per buildable square foot.

500 Fourth Ave (Brooklyn)

4,977 sf retail condo

David Dosik, M.D. / J. Dario Jr., F. Rufrano, Kalmon Dolgin Affiliates

Park Slope Group / J. Dario Jr., F. Rufrano, Kalmon Dolgin Affiliates

The property sold for $1.74 million. The space will be used for medical offices.

97-26 147th Pl (Queens)

30,048 buildable sf development site

n/a / n/a

n/a / B. Sarath, E. Gevinski, Massey Knakal

The property sold for $1.3 million. The site traded at a price per buildable square foot of $43 for commercial use and $35 for residential use.

107 Boerum Pl (Brooklyn)

8 res. units

n/a / Marcel Fridman, Barcel Group

The package of apartments sold for $1.3 million.

1156 Myrtle Ave and 329 Menahan St (Brooklyn)

2 apt. bldgs, 11 units total

n/a / Marcel Fridman, Barcel Group

n/a / n/a

The properties sold for $1.2 million.

32 Garnet St (Brooklyn)

4-story, 5,000 sf apt. bldg, 8 units total

Silvershore Properties 39 / n/a

Rafael Seda / n/a

The property sold for $1.2 million.

Financing Address

Size

Borrower / Representative

Lender / Representative

Notes

375 West Broadway

5-story, 57,800 sf office bldg

Real Estate Equities Corporation; Mount Kellett Capital Management / n/a

Natixis Real Estate Capital LLC / n/a

A $55 million floating-rate loan was provided for the acquisition of the property. The 11,200-square-foot retail component of the building is leased long-term to national retailer Anthropologie.

444 West 55th St

Storage bldg

Madison Capital Management / S. Kohn, D. Karson, C. Moyer, S. Vankayala, T. Hovey, C&W

Redwood Trust / n/a

A $39 million loan was provided to recapitalize the Cirkers Fine Art Storage and Logistics facility.

98 Van Cortlandt Park South (The Bronx)

145-unit apt. bldg

Amalgamated Housing Corp. / n/a

NCB / n/a

A $30 million first mortgage was arranged for the property.

2105-2177 33rd St and 21062178 35th St (Queens)

617 apts.

Acropolis Gardens Realty Corp. / n/a

NCB / n/a

A $20 million first mortgage was arranged for the building.

33 Greenwich Ave

149-unit apt. bldg

33 Greenwich Owners Corp. / n/a

NCB / n/a

A $12 million first mortgage and a $2 million line of credit were arranged for the building.

113-117 Elizabeth St

3 apt. bldgs, 30 units total

Kalikow Group; Waterbridge Capital / Represented in-house

Chase Commercial Term Lending / n/a

A $11.75 million loan was provided to refinance the properties.

366 Broadway

35-unit apt. bldg

Collect Pond House Inc. / n/a

NCB / n/a

A $4.5 million first mortgage and a $1 million line of credit were arranged for the building.

55 Central Park West

108-unit apt. bldg

Fifty-Five Corporation / n/a

NCB / n/a

A $5 million third mortgage was arranged for the property.

400 East 17th St (Brooklyn)

81-unit apt. bldg

400 East 17th Street Corp. / n/a

NCB / n/a

A $3.6 million first mortgage and a $500,000 line of credit were arranged for the building.

1430 Theriot Ave (The Bronx)

168-unit apt. bldg

Archer Cooperative Inc. / n/a

NCB / n/a

A $3 million first mortgage and a $500,000 line of credit were arranged for the building.

201 East 83rd St

114-unit apt. bldg

Saxon Towers Owners Inc. / n/a

NCB / n/a

A $2.5 million first mortgage and a $1 million line of credit were arranged for the building.

3030 Johnson Ave (The Bronx)

59-unit apt. bldg

3030 Johnson Avenue Corp. / n/a

NCB / n/a

A $2.5 million first mortgage and a $300,000 line of credit were arranged for the building.

130 East 75th St

54-unit apt. bldg

130 East 75th Street Owners Corp. / n/a

NCB / n/a

A $2 million first mortgage and a $500,000 line of credit were arranged for the building.

280-290 Lafayette St

24-unit apt. bldg

Lafayette Studios Corp. / n/a

27 East 95th St

24-unit apt. bldg

NW Mad-95 Owners Corp. / n/a

NCB / n/a

A $1.5 million first mortgage and a $500,000 line of credit were arranged for the building, which has an alternate address of 1356 Madison Avenue.

31 West 31st St

11-unit apt. bldg

Herald Square Loft Corp. / n/a

NCB / n/a

A $1.3 million first mortgage and a $565,000 line of credit were arranged for the building.

78 August 2013 www.TheRealDeal.com

house ad NCB / n/a

A $2.2 million first mortgage was arranged for the building.

Financing continued Address

Size

Borrower / Representative

Lender / Representative

Notes

10 Holder Pl (Queens)

43-unit apt. bldg

10 Holder Apartments Corp. / n/a

NCB / n/a

A $1.6 million second mortgage was arranged for the building.

86-04 Grand Ave (Queens)

66-unit apt. bldg

Victory Apartments Inc. / n/a

NCB / n/a

A $1.1 million first mortgage and a $200,000 line of credit were arranged for the building.

241 West 23rd St

11-unit apt. bldg

23rd St. Loft Corporation / n/a

NCB / n/a

An $850,000 first mortgage and a $150,000 line of credit were arranged for the building.

Other Deals Ziel Feldman’s HFZ buys Westbrook Partners’ residential portfolio for $600M

BRG acquires $68 million Queens portfolio from Area Property Partners

Startup printing firm takes floor at 419 Park Avenue South

Ziel Feldman’s HFZ Capital will pay $600 million for Westbrook Partners’ four-building, 750-apartment Manhattan rental portfolio, the Wall Street Journal reported. Westbrook had put the buildings on the market in April as part of a $1 billion portfolio that includes office buildings 295 Madison Avenue and 444 Madison Avenue, as The Real Deal first reported. As part of the deal, Feldman will purchase the Astor, a notable 12-story, 212-unit prewar building at 235 West 75th Street, which contains prime commercial space. The other three buildings are 301 West 53rd Street, 90 Lexington Avenue and the adjacent 88 Lexington Avenue. (The deal was announced after the deadline for the Deal Sheet.)

BRG, a Long Island real estate investment company, has acquired a 19-building Queens multi-family portfolio for more than $68 million, a top BRG official told The Real Deal last month. Senior Vice President Charles Agus declined to comment on the identity of the seller, but public records showed the property had been held by Area Property Partners, which is set to become part of Los Angeles–based private investment firm Ares Management, it was announced last month. The 561-unit portfolio, which spans the neighborhoods of Jackson Heights, Elmhurst and Corona, brings BRG’s total units in New York City to about 5,000, according to a statement from BRG. (The deal was announced after the deadline for the Deal Sheet.)

The 3D-printing firm Shapeways has signed a 10-year, 9,050-square-foot renewal and expansion at 419 Park Avenue South, the New York Observer reported. Shapeways moved into the building two years ago and upped its original occupancy by more than 1,000 square feet in December of last year before adding an additional 3,950 square feet in the latest amendment to the lease. This new lease gives the rapidly growing company a full ninth-floor presence. It also includes expansion rights for two additional floors. Steven Blair Strati of Cushman & Wakefield, who represented the tenant, said that although asking rents were $55 per square foot, a better deal was made. (The deal was announced after the deadline for the Deal Sheet.)

Scotiabank moves downtown but sticks with Brookfield

Law firm takes 29,000 square feet at Aby Rosen’s 17 State Street

St. Giles School picks up eighth-floor space at 330 Fifth Avenue

Scotiabank is moving offices downtown, from 1 Liberty Plaza to nearby 4 Brookfield Place, both of which are owned by Brookfield Properties, Crain’s reported. Scotiabank, based in Toronto, will take about 100,000 square feet in the new location, where asking rents are in the $50s per square foot. Brookfield, also based in Toronto, is one of the largest public real estate companies in North America and also a client of Scotiabank. The bank handles many of Brookfiend’s debt and stock underwriting issues. (The deal was announced after the deadline for the Deal Sheet.)

Law firm Nelson Levine de Luca & Hamilton signed a lease for 29,386 square feet at 17 State Street, a 42-story office building in the Financial District, according to a release from the Aby Rosen–led RFR Realty, which owns the building. Asking rents at the 540,000-square-foot building, which was designed by Emery Roth & Sons in the 1980s, are nearly $60 per square foot. The long-term lease covers the full 29th and 30th floors. Steve Morrows, AJ Camhi and Ryan Silverman represented RFR in the lease. Lewis Cowan of Mohr Partners acted on behalf of the law firm, the release said. (The deal was announced after the deadline for the Deal Sheet.)

St. Giles School, the Catholic educational institute sponsored by St. Giles Parish, is taking over the King’s College’s 11,880-square-foot eighth floor at 330 Fifth Avenue, the New York Observer reported. The new sublease will double the school’s occupancy in the building, and the school has plans to connect its space on the seventh and eighth floors by adding a new staircase. King’s College initially inked a 10-year deal at 330 Fifth in 2008, looking for space close to its main 50,000-square-foot operation at the Empire State Building next door. The school has since reshuffled its real estate, boarding up and moving to the Wall Street area. (The deal was announced after the deadline for the Deal Sheet.)

Telx signs lease at Rudin Management’s 32 Sixth Avenue in Tribeca

Northern Trust takes floor at LeFrak’s 40 West 57th Street

Telx has signed a lease for the 45,000-square-foot 10th floor of Rudin Management’s 32 Sixth Avenue in north Tribeca, Crain’s reported. Robert Steinman, a vice president at Rudin, represented the building’s ownership in-house, while Amanda Bokman and Robert Meyers of CBRE represented Telx. Telx will use the space to house servers and other hardware needed to operate its cloud computing and data warehouse for clients such as Amazon and Google. The data service provider will also operate the Hub, a 27,000-square-foot facility on the 24th floor that provides connections to over 90 network operators located in the building. (The deal was announced after the deadline for the Deal Sheet.)

Investment management firm Northern Trust signed a 25,000-square-foot lease at the LeFrak Organization’s 40 West 57th Street, where rents tend to surpass $100 per square foot, the New York Observer reported. The Chicago-based firm plans to relocate its New York office at 65 East 55th Street to the full 21st floor of the 34-story, 893,000-square-foot tower between Fifth and Sixth avenues in the Plaza District. Gus Field of Cushman & Wakefield represented Northern Trust, while Howard Fiddle of CBRE negotiated on behalf of LeFrak, the newspaper said. (The deal was announced after the deadline for the Deal Sheet.)

Chelsea development site trades for $35M; zoning allows for office tower

Advertising firm Droga5 is leaving Midtown for the less-expensive Downtown, having inked a deal to lease 92,000 square feet at 120 Wall Street for 15 years, Crain’s reported. The new spread covers five floors of the Silverstein Properties–owned office building, and the firm will receive government grants from the city and state under the World Trade Center Job Creation & Retention Program to make the move Downtown and continue to grow. “This is another example of how the country’s leading tech, media and advertising companies are choosing New York State as the place to bring and expand their business,” Governor Andrew Cuomo told Crain’s. (The deal was announced after the deadline for the Deal Sheet.) TRD

L&L buys Lehman Brothers’ stake in 425 Park Avenue for $140 million Real estate investment firm L&L Holding Company, formerly the minority stakeholder in a new office development at 425 Park Avenue, has acquired the remaining 90 percent interest in the property from Lehman Brothers, The Real Deal has learned. The company paid close to $140 million for Lehman’s stake, said Robert Lapidus, president and chief investment officer at L&L. The stake was valued by Lehman at $84 million in 2006. Eastdil Secured’s Adam Spies and Joshua King marketed the stake on behalf of Lehman, which had been trying to unload its ownership interest since February. (The deal was announced after the deadline for the Deal Sheet.)

Joe Sitt pays $65M for Milford Plaza retail Joseph Sitt’s Thor Equities is buying the retail portion of the Milford Plaza Hotel for $65 million, the New York Post reported last month. Sitt will pay $2,730 per square foot for the 27,456-square-foot retail space in the 27-story Times Square hotel, once the city’s largest. The deal, which includes a partial lease-back by the hotel for a food court and gym, will see Sitt acquire the long-term leasehold on the property until 2112. The Rockpoint Group and Highgate Hotels paid $200 million in 2010 for the Milford property at 700 Eighth Avenue between West 44th and West 45th streets and hired top Eastdil Secured brokers Adam Spies and Doug Harmon to split up pieces of the property and market it to investors. (The deal was announced after the deadline for the Deal Sheet.)

80 July 2009 www.TheRealDeal.com August 2013 www.TheRealDeal.com

A 120-foot-wide Chelsea parking lot primed for the development of a commercial office tower has traded for $35 million in a deal that closed July 2, public records filed with the city last month show. The lot, at 132-142 West 27th Street, was purchased by an LLC linked to Artimus Construction, a construction services company based in Upper Manhattan. It was not clear if Artimus will be the developer of the site or if they will project manage the site on behalf of another company. A spokesperson for the firm was not immediately available for comment. (The deal was announced after the deadline for the Deal Sheet.)

Ad firm Droga5 heads to Lower Manhattan, inks 15-year deal

Development updates LEASING UPDATES

50 United Nations Plaza 345 East 46th Street

30 Washington Street The seven-story, 94-unit conversion is now 40 percent leased. The building, developed by Two Trees Management Company, was originally constructed by the Robert Gair Company in the late 19th century. Monthly rents for the project’s one- and two-bedroom apartments range from $3,325 to $4,200. The units are sized from 550 to 1,100 square feet. Building amenities include a gym, children’s playroom and roof deck. Contact: www.30wash.com.

Turtle Bay

Dumbo

The 44-story, 88-unit condominium, developed by Zeckendorf Development and Global Holdings, has topped out. The project is the first residential building designed by Foster + Partners in the United States. One-bedroom apartments will be priced 50 U. N. Plaza starting at $2.8 million, and two-bedrooms will range from $3.6 to $9.4 million. Sales are set to launch later this summer.

Upper West Side 206-210 West 77th Street The Naftali Group has purchased 206210 West 77th Street, currently occupied by a parking garage, with plans to develop the site as luxury condominiums. The existing structure will make way for a 100,000-square-foot building with 30 residential units and ground-level retail. Construction is slated to begin in 2014. Contact: www.naftaligroup.com.

Aptsandlofts.com is the agent. Contact: www.aptsandlofts.com.

Williamsburg

CONSTRUCTION UPDATES

101 Bedford Avenue

Long Island City Gantry Park Landing 50-01 2nd Street Leasing has started at the 12-story, 199-unit rental project, developed by the Lightstone Group. With interior design by Mark Zeff, the project offers studio apartments ranging in size from 440 to 475 square feet, one-bedrooms sized from 580 to 700 square feet, two-bedrooms from 900 to 1,000 square feet, and 1,250-square-foot three-bedroom apartments. Monthly rents range from $1,875 to $4,750. Building amenities include a fitness center, yoga room, game room, courtyard, roof deck, bicycle storage and a 24-hour doorman. Aptsandlofts.com is the listing agent. Contact: www.gantryparklanding.com.

Tribeca

101 Bedford Avenue

Franklin Place 5 Franklin Place Franklin Place

Leasing has started at the 351-unit rental building, developed by Halcyon and designed by Karl Fischer Architects. The studios and one- and two-bedrooms range in size from 420 to 1,100 square feet, and rent for $2,400 to $6,500 per month. Building amenities include a fitness center, indoor pool, recording/photography studio, business center and 24-hour concierge service. Contact: www.101bedford.com. SALES UPDATES

Greenpoint

Canvas Loft Condominiums 118 Greenpoint Avenue The 15-unit condo conversion is now 73 percent sold. Formerly a manufacturing building, the project is being developed by Capital Real Estate Group. The oneand two-bedroom apartments range in size from 721 to 1,285 square feet and in price from $615,000 to $899,000.

Sales have launched at the 53-unit condominium, developed by the El Ad Group. Designed by ODA, the 23-story building offers studio to three-bedroom units sized from 756 to 2,924 square feet, as well as 3,751-square-foot penthouses. Studios are priced from $950,000, one-bedrooms from $2.3 million, two-bedrooms from $2.6 million, three-bedrooms from $3.5 million and penthouses from $7 million. Amenities include a doorman, roof deck, pool, fitness center, on-site parking and concierge. Cantor & Pecorella is the agent. Contact: www.tribecafranklinpl.com. Compiled by Andrea Cetra

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Two-bedroom, two-and-a-half-bath, 1,352-square-foot unit in a new-construction condo conversion; unit has laundry, 10-foot ceilings, marble baths, built-in storage; building has 24-hour doorman, concierge, roof terrace, lounge, catering kitchen, hotel services; common charges $1,575 per month; taxes $50 per month; asking price $1.46 million; 16 weeks on the market. (Brokers: Masha Sales, Citi Habitats; Glenn Davis, New York Living Solutions)

“The sellers are old friends. I sold another property for them in 2012 and I was happy that they approached me to sell this one. A number of buyers and brokers are still not including the Financial District in their target areas [because of Hurricane Sandy], and the storm has resulted in some troublesome delays in the marketing process, although this building itself dealt with the storm quite well. [But] the buyer was focused on this building; he had been looking for an apartment for a while and knew [the building] had the finishes and amenities he wanted — it was just a matter of finding a two-bedroom, two-bath. This particular apartment had been combined with the studio next door. The buyer didn’t need the extra space and that worked out for the sellers as well, who are retaining the studio for the time being for when they spend time in NYC. The way it was combined made it easy to separate the units, but it still required some imagination from the buyer to appreciate the full potential. Negotiations were challenging, and both the buyer and seller compromised on the price and closing date to get the deal done.” Masha Sales, Citi Habitats

Greenwich Village $562,500 67 East 11th Street, Apt. 204

Alcove studio in a prewar elevator co-op; apartment has balcony, renovated kitchen; building has 24-hour doorman, laundry room; maintenance $880 per month; asking price $575,000; four months on the market. (Brokers: Evan Shaffer, Douglas Elliman; Maureen Egan Chen, Prime NYC) “Initially, the buyer wanted [a place in the] far West Village, but everything in her price range was too small. After a lot of comparison shopping and getting familiar with the neighborhood, she jumped on this listing. [Because it’s an alcove studio], the unit offered a real division of space for sleeping, living and entertaining. The balcony was a huge bonus. The board-approval process was very long. Then when we finally got approval and the bank cleared the closing, the closing agent was booked solid and we had to wait another 10 days to close. The buyer’s lease was up, so she had to sleep on her sister’s couch for a month.” Maureen Egan Chen, Prime NYC

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Cohen

from page 31

“This is putting us back on the stratospheric map,” said Judi Desiderio, founder of Hamptons brokerage Town and Country Real Estate. “It gives a certain percentage of the market comfort that they aren’t in that camp alone.” Cohen has also made big real estate moves in Manhattan. In April, he paid nearly $39 million for an apartment building at 145 Perry Street, which has an alternate address of 703 Washington Street, according to records from the Department of Buildings. When complete, the apartment will have numerous fireplaces and “morning and evening terraces,” according to StreetEasy. The LLC that bought the home in city records, Greenwich Heights Corporation, lists SAC’s Stamford office as its address. Cohen reportedly plans to stay at his newly purchased 9,600-square-foot Abingdon apartment while he renovates the Perry Street pad. He also owns a 30,000-square-foot home in Greenwich, Conn., that has a golf course and a movie theater. Also in April, Cohen listed his 51st-story duplex at Beacon Court for $115 million with Corcoran’s Deborah Grubman and David Dubin, who declined to comment for this story. Cohen bought the 9,000-square-foot unit for $24 million in 2005. Sources said the property had been quietly shopped to VIPs last year as well, with a price tag just under $90 million. Brokers attribute the new, higher price to Manhattan’s red-hot ultra-luxury market; apartments reportedly have been going for more than $90 million in super-luxe new condos One57 and 432 Park Avenue. “If you are gonna try a new price, this is a market to try it in,” said Shaun Osher, head of residential brokerage CORE.

A mogul’s motives The volume of Cohen’s latest real estate buys and the way

he made them — all through limited liability corporations — have fueled the speculation that he is shielding his assets from the government. In the criminal proceeding against SAC, Cohen’s assets could be seized by authorities; the U.S. Attorney’s complaint seeks “forfeiture of certain property,” which could mean anything bought with SAC proceeds — even a home in the Hamptons. With all his troubles, bankruptcy is not out of the question for the billionaire, according to published reports. A source told the Wall Street Journal that the government aims to confiscate about $10 billion from SAC — much of it Cohen’s. In the event of a forced bankruptcy, a trustee would be appointed to liquidate Cohen’s assets and divide them among creditors. Funds tied up in real estate could help slow that process, industry insiders said. In particular, moving assets into LLCs — especially those in a spouse’s name — “creates an additional step” before authorities can seize them, said Steven Wagner, an attorney with Porzio, Bromberg & Newman. Assets passed to an irrevocable trust can be even more difficult to recover. Anything placed to such a trust about a year before any seizure proceedings would be relatively “untouchable,” said attorney Adam Leitman Bailey. “I would not be surprised if the LLC [that bought 52 Further Lane] is connected to an irrevocable trust for his kids and wife that protects his assets,” Bailey said. But it’s not foolproof. Cohen is tied to to the real estate deals — the LLC that bought the Abingdon home, Hudson Heights Holdings, listed Cohen’s Connecticut mansion as the address in city records. And given the timing of these purchases, Bailey said, a court could force Cohen to turn over the assets through a procedure called a turnover proceeding. Still, since no criminal or bankruptcy proceedings have

been brought against him as of yet, anything Cohen moves into an irrevocable trust right now “is probably safe,” Bailey said. Art purchases are an even better way to shield wealth from the SEC, industry experts said. Because it’s difficult to assign value to art, its worth is often a matter of dispute for the Internal Revenue Service, an agency that also becomes involved in seizure of assets, explained art attorney Christine Steiner of Sheppard, Mullin, Richter & Hampton. And since the market for fine art is notoriously unregulated, the SEC won’t be able to prevent Cohen from buying and selling it. Much like luxury real estate, the contemporary art world has recovered from the recession admirably, with record-breaking sales fueling speculation that the entire market has become inflated. Now, before a bust, would be a good time to exit those assets as well, sources said. Besides his April purchase of Picasso’s “Le Rêve,” Cohen in 2010 bought Jasper Johns’ “Flag” for about $110 million, and three years before that, he spent $80 million on Andy Warhol’s “Turquoise Marilyn.” Even Cohen’s ex-wife has accused him of concealing assets. While his divorce from Finke was initiated more than two decades ago, she is still in the midst of two lawsuits accusing Cohen of fraud for hiding real estate from her during the split. She also maintains that she has evidence of racketeering and insider trading by Cohen; a lawsuit to sort out those accusations is also pending. Whatever the motive, Cohen’s bevy of purchases show that he’s not ready to give up on investing — even if it’s in real estate and art rather than finance. “Now, at the end, [Cohen] steps away and has a good laugh,” Singer said. “I don’t think he gives a damn about anything other than ‘how much am I worth today?’” TRD

Locals and tourists

plummets, land set aside for hotels may be swallowed up by the demand for housing — when zoning permits, McConnell said. “The hotel pipeline is crimped because different uses might make more sense, and that’s usually residential,” he said. Just because a hotel is planned does not mean it will be built, especially since residential is still considered a safer bet in Kings County. Figueroa’s project, for example, does not currently have financing. In Brooklyn, McConnell said, it’s still “probably smarter to build residential than hotel.” TRD

Brooklyn hotels from page 32 said Hennessey. Now, that ripple of development is spreading. Chetrit is joining with Bistricer to resuscitate the Bossert, a century-old hotel owned for years by local mega-landlord the Jehovah’s Witnesses. The pair paid a reported $81 million for the property and will re-brand it with the posh King & Grove label. The opening date: 2014. Chetrit, sources told TRD, also plans to build at least one more King & Grove hotel in Brooklyn, though the exact location hasn’t been announced. Second Development’s 95 Rockwell Place is set to be finished in 2015. The hotel should have about 200 rooms, event space, and 10,000 feet of restaurants and bars, including one on the roof. Toll Brothers’ waterfront development at Brooklyn Bridge Park will have an approximately 200-room luxury hotel and 123 condos, as well as a 300-car garage, banquet hall, spa, gym, several restaurants and retail, the company said. These higher-end projects herald a new era for hotel development for Brooklyn, sources said. Hospitality-industry insiders told The Real Deal they’re closely watching how these projects fare; success would be a sign that Brooklyn can hold its own in the hospitality sector. Most developers, though, are still looking at projects under the Holiday Inn, Hampton Inn and Clarion brands, “which are historically the safe way to go,” said Hennessey. In fact, STR data shows an approximately 250-room Holiday Inn under construction at 300 Schermerhorn Street. “But if you see success at BAM and Brooklyn Bridge Park, it will signify the arrival of an upscale customer base,” Hennessey said. 86 August 2013 www.TheRealDeal.com

Brooklyn has Manhattan to thank in part for the surge in hotel development. In the last year, New York City as a whole has added about 12,000 rooms, Hennessey said. But the borough also can attribute part of the demand to its own residents, especially its newly affluent ones, who need nice places for visiting friends and families to stay, said Tom McConnell, head of the global hospitality group at Cushman & Wakefield. Indeed, McConnell thinks the demand from the locals far outstrips the demand from tourists priced out of Manhattan. “The majority of the demand at these [new hotel projects] is Brooklyn-generated,” he said. The occupancy rate for Brooklyn hotels is healthy and steady — hovering around 80 percent this year and last, compared with 61.4 percent nationwide. The average daily room rate is higher, too, and soaring: In April, the figure was $162.50, up 15.8 percent year over year, according to STR. The number for the country as a whole grew 3.5 percent, to $106.13. Hotel developers are interested in Brooklyn because its land costs are still much lower than in Manhattan, sources said. Prices for development sites in Brooklyn now range up to $300 per square foot, compared with up to $1,000 in Manhattan, said Andrew Barrocas, CEO of commercial and residential brokerage MNS. “Virtually every available piece of land [in Brooklyn] is being looked at for rentals, condos or a hotel,” said Ed Eschmann, a broker with CBRE’s evaluation group, who worked with Figueroa on his Williamsburg hotel project. Still, industry sources underscore that the best-laid hotel plans may never pan out. As residential inventory

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from page 26

For example, the median home price in Ridgewood at the end of the first quarter was $370,000, about 11 percent lower than in the same period of 2008, according to StreetEasy. By contrast, the median price of a Bushwick home sale was $412,000, up nearly 30 percent from $317,382 five years ago.

Not on the radar But there are some factors that may prevent an explosion of development in Ridgewood. First, Ridgewood is densely populated, and its attached row houses make development more difficult than in Bushwick and Willamsburg, with their large multi-family buildings and former factories. “There just isn’t that much available land for big developments,” Crifasi said. Ridgewood has seen some new residential projects, such as the Times Bldg on Cypress Avenue. The former headquarters of the Ridgewood Times newspaper was converted to condos in 2009, and is now sold out, said David Maundrell, president of Brooklyn-based real estate brokerage aptsandlofts.com, who handled sales at the 19-unit building. Still, “you aren’t going to see so much new construction here,” Hillel said. “It’s hard to knock down an apartment building, because there isn’t much [room for another one].” Ridgewood landlords are investing in renovating their properties to make them more attractive to renters and buyers, brokers said. But so far at least, Ridgewood simply isn’t on the radar of many Brooklyn and Manhattan apartment hunters. Ridgewood is still largely “unfound,” Hillel said. “You see all these people moving into Bushwick because Williamsburg is so expensive, but they still haven’t found the L [train stop] at Wyckoff and Myrtle.” TRD

Managing agents

from page 55

For its part, Andrews charges a minimum of $12,000 a year. Fees go up by 2 percent annually, though the company decided not to raise its rate in recession-battered 2008, Rashad said. Metal Shutter Houses, an 11-story condo at 524 West 19th Street, has switched from Halstead to Andrews, which Rashad attributed to Andrews’ performance cleaning up after Hurricane Sandy. “We have gotten several new buildings because of Sandy,” Rashad said. AKAM, which came in at No. 5, has also benefited from below-average fees, sources said. Founded in 1983 by Leslie Kaminoff, 103-employee AKAM manages 21,000 units in 125 buildings, up from 18,000 units in 95 buildings in 2009. AKAM, which focuses on buildings with 100 or more units, recently took over management of the Ritz-Carlton condo-hotel at 50 Central Park South from Brown Harris Stevens, which had been there for decades. And in 2012, AKAM started managing the 275-unit condo 120 Riverside Boulevard, which it took over from the Trump Organization in 2012, according to President Michael Berenson. He declined to discuss what the firm charges, though he said the company does increase fees 2 to 5 percent annually. “We have a niche, and we’ve been staying in that niche,” said Berenson, who joined the company in 1987. “We are not everything to everybody.” Brown Harris saw its ranking by number of units drop to No. 12 this year, down from No. 8 in 2009. At Brown Harris, the residential arm of the major real estate brokerage, fees start at $60,000 per year, said Paul Herman, the management division’s president. Brown Harris manages some of the city’s most exclusive buildings, such as 730 Park Avenue. Unlike other companies, however, Herman said Brown Harris isn’t planning to try to increase business by buying up competitors. “We didn’t buy companies, and we don’t really advertise,” said Herman. “We’re interested in good business, not more business.” After all, being part of a major brokerage has its advantages. Brown Harris will be the property manager of the new 16-unit condo 18 Gramercy Park South when it is completed by Terra Holdings principals Arthur and William Zeckendorf. “This is a very price-sensitive business, but on the other hand, clients are willing to pay for value and good service,” Herman said. Another firm that slipped in the rankings this year is Orsid Realty, which dropped to No. 8 from No. 7 in 2009. The firm grew, but not at the same rate as some other property management companies: Orsid manages 11,451 units in 141 buildings, up from 10,000 units in 120 buildings in 2009. Founded in 1955 by Albert Etingin and now run by his son, Maks, Orsid manages buildings ranging in size from eight to 500 units. But its sweet spot is somewhere in the middle, and usually Uptown, such as 470 Park Avenue, a 60-unit prewar doorman building. The company’s fees are in the middle of the pack, starting at around $45,000 a year, said Dennis DePaola, executive vice president at the 65-employee firm, but fees vary depending on the level of service. “It really depends,” he said, “on how much hand-holding the group is going to need.” Drastically discounting its rates, DePaola said, wouldn’t allow Orsid to properly serve its clients. As it is, he said, Orsid usually loses money during the first two years it manages a building, because of the time it takes to get settled in. “We will not [be able to] adequately service the building if we come in really low,” he said. TRD www.TheRealDeal.com March 2012 00

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Residential market

from page 14

H.O.M.E. Mortgage Bankers. Buyers, though, must complete the loan process within 90 days after closing to comply with a regulation by the Internal Revenue Service, the experts said. If a buyer misses the 90-day window, he still has the cash-out refinancing option. Cash-out refinancing, though, is far less common for two reasons: The mortgage generally carries a high interest rate and the buyer is more likely to receive a smaller loan amount, Shultz said. For the all-cash buyers who come to Guaranteed Rate, Shultz does what she can to make sure they qualify for the more desirable technical refinance — she has

their paperwork all ready to go as soon as their sales are finalized. Even the well-heeled aren’t always thrilled about depleting their liquid assets. Elliman broker Jessica Cohen tells the story of a couple who took an equity line on their first home, in the city, so they could buy a second home, also in the city — a pied-à-terre that they planned to eventually pay for with a technical refinance. “People don’t usually keep the type of money that it costs to buy a New York City apartment in their checking accounts,” she said. “They’re usually pulling it from somewhere else. They’re not taking it from a checking

account or liquidating a retirement portfolio.” The duo typifies so many of the other buyers who Cohen has worked with: They are conservative with their money and preferred to finance — but they also realized that they had to be ready to move fast when they found the home they wanted. “All of the headache that it takes to get a mortgage, [buyers are] dealing with it later so they can have a competitive edge in the bidding process,” Cohen said. “I’ve seen a lot of interesting stories where people have their loan commitment and they’re ready to close and the bank backs out at the last minute. It’s brutal.” TRD

main headquarters is at 72 Cummings Point Road in Stamford, Conn., in a 98,905-square-foot office building it owns. If SAC were to go out of business, the Midtown space would likely be reabsorbed easily: Class A space in that area was hit hard in the downturn but has rebounded, according to Ryan Severino, senior economist at the analytics firm Reis. “I can’t say it would be immediately leased up, but I don’t think [the ownership] would be too worried about releasing it,” Severino said. In Midtown last month, the average asking rent rose to $66.88 per square foot from $66.09 in June, according to Colliers, while the availability rate fell slightly to 12.2 percent in July from 12.3 the previous month.

cording to CoStar. That’s just above the average asking rent for Midtown South, which was $52.02 per foot last month, up from $51.52 per square foot in June, Colliers data showed. The availability of the Tory Burch space is likely welcome news for tenants looking for space in Midtown South, the city’s hippest office sector. Commercial brokers complain that large blocks of space are rare in the area, Buffalino said. According to Colliers, the availability rate in Midtown South last month was 9.2 percent, the same as in June. Tory Burch’s brokers, Donald Preate and Jamie Katcher of Cushman & Wakefield, declined to comment, as did Trinity.

Midtown South

Downtown

Less than a year after fashion designer Tory Burch signed a 10-year-deal for 77,995 square feet on two floors at 350 Hudson Street, landlord Trinity Real Estate has put both floors back on the market at a slightly higher asking rent. Each floor is now asking $58 per square foot, up from $54 per foot when the deal was signed in May 2012, ac-

Massachusetts-based Constant Contact recently paid about $65 million to acquire the start-up SinglePlatform, which helps small businesses with online listings. At the time, SinglePlatform occupied about 7,000 square feet at 17 Battery Place, which is co-owned by the Moinian Group and Newmark Holdings. Then, in June, Constant

Contact signed a five-and-a-half-year lease for a larger space in the same building. The company now has nearly 25,000 square feet on two floors at 17 Battery Place. The space was listed with an asking rent of $35 per square foot, according to Adam Leshowitz, a managing director at Newmark Grubb Knight Frank, who represented the landlord with colleagues Jordan Gosin and Travis Wilson. Constant Contact was represented by Cassidy Turley’s Mark Furst, Andrew Bay and Stephen Bellwood, and brokers from the Boston-based firm Richards Barry Joyce & Partners. That’s slightly below Lower Manhattan’s average asking rent last month of $46.89 per foot, which is up from $46.20 in June, Colliers said. The availability rate was 15.9 percent last month, unchanged from June, the firm reported. Constant Contact isn’t the only tech firm taking up residence downtown. Midtown South is so hot that a number of TAMI firms have been priced out of the area, Leshowitz said. “We are seeing continued interest,” he said, “from tenants from Midtown South.” TRD

Commercial market from page 20

Red flags from page 47 to get construction loans. “Developers by nature are extremely optimistic,” Helman said, but at those prices, “lenders may start to pull back.” The combination of factors could add up to failed condo projects, he said. “If land prices are pushed too much further … there’s going to be projects that won’t be able to reach the finish line,” he said. “It’s just gotten into very dicey territory right now.” Moreover, a dramatic land rally such as this one has historically been a harbinger of a downturn, Knakal said. The land market rally is “irrational,” he said, noting “there is no reason” that prices should have climbed so fast. But this time around, all bets are off because the disconnect between the real estate market and the larger landscape has never been greater. “There are no models that exist to predict the behavior in this market,” Knakal said. “We are in completely uncharted territory.”

Lack of inventory New York City’s severe shortage of residential inventory has showed no sign of easing, and experts agree it could be months before there’s any sign of relief for home-seekers. In the second quarter, listing inventory in Manhattan fell 31.3 percent to 4,795 available units, down from 6,981 in the same period of last year, according to Douglas Elliman’s quarterly market report, compiled by Miller. With the continued lack of inventory, demand and pric90 August 2013 www.TheRealDeal.com

es should continue to climb. That sounds like a good thing for the market, but Miller said it is “not a sign of strength.” Rather, because the current shortage was caused by tight credit and an unusually low amount of new building, it actually suggests “imbalance and weakness” in the market. The inventory squeeze dates back to late 2008, when the recession and accompanying credit crisis halted many under-construction residential projects, and skewered plans for new ones. The pipeline of planned projects had run dry by 2009, Miller said. Meanwhile, with unemployment still high and raises scarce, many New Yorkers cannot afford to trade up to larger apartments, so they’re deciding not to move. The lack of inventory has since caused bidding wars and driven up prices as buyers compete for the few homes available. That’s caused a bubble that could burst when inventory finally does start to return, sources said. “I don’t like seeing the market being driven by an artificially low inventory level,” Perlson said. “I’d like to see it being driven by healthy supply and healthy demand. These secondary factors make me less comfortable.” If inventory stays low for some time, prices could accelerate rapidly, then collapse, Miller noted. “If we don’t see inventory return to the market, I’m concerned about prices rising too quickly, which would threaten the housing market,” Miller said. “I don’t want to be in a situation where there’s double-digit price appreciation and no relief in inventory.”

Instability abroad As many countries struggle politically and economically, New York real estate has remained a safe haven for foreign wealth. Many purchases come from countries such as Spain, which is mired in a recession and coping with a corruption scandal involving Prime Minister Mariano Rajoy; Italy, where lenders are now struggling with a flood of bad loans; and Greece, where public finances have been kept afloat since 2010 by a rescue loan program funded by the Eurozone and International Monetary Fund. Buyers in these and other countries are eager to purchase real estate in the United States and New York specifically, believing that their money is safer here than abroad. “A lot of what’s driving up prices is coming from foreigners,” said Terrence Oved, a partner at the Manhattan law firm Oved & Oved. “People are making their money in other places in the world that are a lot more dangerous to invest in.” Because many of these international buyers are more interested in an investment than a place to live, the stratospheric prices they’re willing to pay for homes here essentially amounts to speculation, sources said. And at some point, that’s likely to catch up with the market, especially when the turbulence settles down and buyers from Europe and elsewhere become less interested in New York real estate. Despite what we may think, Helman said, there isn’t “an infinite amount of foreign buyers.” TRD www.TheRealDeal.com January 2012 00

Buyers’ brokers

from page 16

lar said that they are struggling to show apartments to their clients before they get snapped up by another purchaser. Last month, “a new listing came on the market and it was perfect for one of my buyers,” said Jason Haber, CEO of the brokerage Rubicon Property. “He was literally boarding the Hampton Jitney when I called him about it. He was afraid it would be [gone] by the time he returned from East Hampton, so he got off the bus. That’s the kind of market we’re in.” According to REBNY rules, a broker has 24 hours after signing an exclusive sales contract to distribute the property information to other brokers through REBNY’s online listing service. But in today’s tight market, brokers often get several offers even before the listing hits the RLS, simply by emailing their contacts. By the time a buyers’ broker sees the listing online and calls to request a showing, the seller often already has a deal in place. And even when an apartment is still available, busy listing brokers don’t always return calls from buyers’ brokers promptly. Forced by time constraints to prioritize, they sometimes opt to show their listings only to the clients of veteran agents, whom they assume will be better qualified than those represented by industry newcomers. “It’s a sad reality that some brokers are choosing to give access to apartments to only certain well-known brokers, who have a track record for transacting a lot,” said Michael Graves, a broker at CORE. “You’re more likely to show your property to a high-profile broker than to any old Joe Schmo.” Prioritizing well-qualified clients is not illegal or unethical. But some agents take it a step further, purposely avoiding co-broking in order to get a larger chunk of the commission. In so doing, they’re violating the law and REBNY’s rules, which require brokers to present all offers to their clients. Nonetheless, some listing brokers direct their clients

more enthusiastically toward unrepresented buyers, industry insiders said. That’s especially tempting in today’s inventory-starved environment, when buyers desperate to find a home don’t hesitate to contact listing brokers directly the minute they see a new listing. “When representing a buyer, I have seen some sellers’ brokers reacting to inquiries in a slower fashion, and at times not at all,” said David Salvatore, a broker at Town Residential. DeFranceschi said he recently encountered this problem with a listing at the Essex House at 160 Central Park South. The listing broker, whom DeFranceschi declined to identify, kept dodging his requests to view the apartment, then demanded detailed financial information about his client before agreeing to show it. “For all I know,” DeFranceschi said, “the seller’s agent just used that as an excuse to deter my buyer because he was working with a broker — me.” Tired of jumping through hoops, DeFranceschi’s client gave up on the apartment without ever getting to see it. The unit has not yet sold, he said. There are even some brokers who have dropped their REBNY memberships, or never joined in the first place, in part to avoid the co-broking requirement, according to Isaac Nematnejad, a broker at Elliman. “I’ve recently encountered a few agents who are purposely not members of REBNY as a kind of loophole to avoid splitting commissions,” Nematnejad said. “This act is a clear indication of how some agents care to collect a maximum profit for themselves, as opposed to gaining maximum value for their clients’ listings.”

Chasing the deal In the face of these obstacles, what’s a buyers’ broker to do?

Industry veterans advised persistence.“If there are three brokers on the listing, I’d make sure I emailed every single one,” said Mara Flash Blum, an associate broker at Sotheby’s International Realty. It’s also important to be prepared, brokers said, so a listing agent has no excuse not to show the home. “You want them to know that you have a viable buyer, that they’ve been screened and preapproved for a loan,” Blum said. “If you just write an email without giving any background, especially when you’re a broker that’s just starting out, [you won’t get the appointment]. Some sellers want to know who’s coming into their apartment, especially if it’s a private viewing.” In extreme scenarios, brokers can report a fellow agent’s misbehavior to a manager or to REBNY. But Blum noted that, for sellers’ brokers, doing a direct deal isn’t all it’s cracked up to be. It may mean a larger commission, but an unrepresented buyer usually means a lot more work for the listing broker, who often ends up guiding the buyer through the process. Plus, direct buyers often “think you’re going to lop half the commission off the purchase price,” Blum said. But most important, brokers emphasized the importance of networking and forming relationships within the real estate community. Gea Elika is principal of Elika Real Estate, which specializes in representing buyers. He said he has good relationships with fellow brokers, who give him the heads-up about new listings even before they sign an exclusive agreement. “I’m lucky to have relationships with [sellers’ brokers] who are quick to let me know if they’re getting a listing,” he said. “Today, it’s more about timing and relationships than ever.” TRD

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New York Real Deal, 1/4 Page, July Issue

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• Demystifying the REIT Universe: Equity vs. Mortgage, Listed vs. Non-Traded, Up vs. Down REITs • Hot Spots & Sizzling Sectors: A Snapshot of the REIT Universe • Going Public: REIT IPOs & Conversions • Dynamic Dialog: REITs vs. Private Equity Real Estate— Which Makes the Best Investment? • New Ways to Play Non-Traded REITS • REIT Strategies: Best & Next Practices

NETWORK WITH LEADING: • • • • • •

REIT Executives & Investors Real Estate Owners & Investors Private Equity Real Estate GPs & LPs Institutional Investors & Insurance Companies Investment & Commercial Bankers Investment Advisors & Asset Managers

SELECT LISTINGS

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to a satisfying steakhouse. Wolfgang’s Steakhouse brings to Miami what it has perfected in New York City, Beverly Hills, and Waikiki. The restaurant’s atmosphere provides comfort and elegance; skilled servers are trained to deliver the most pleasant experience for guests. An impressively extensive first class wine list complements every dish. Exquisite dishes include seafood towers, salads and irresistible sides, to indulge in. We welcome you to come in and taste perfection with a serene view of the Miami River.

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A Hamptons home hosts a Bentley brunch $25M villa shows itself off to A-list crowd W hat better way to market a $25 million villa in the Hamptons than to tie it to arguably the world’s most luxurious motor car and most definitely the world’s most expensive cognac?

designer/developer — sits on 42 acres, with a tree farm on one side and a nature preserve on another. The A-listers strolled the grounds of what has become known as Beechnut Hill Farm Estate, sipping cognac pro-

WE HE AR D

▼

The Brunch with Bentley last month at 674 Scuttle Hole Road in Water Mill

There most certainly is none — if you asked the more than 300 guests who attended last month’s Brunch with Bentley, in the expansive backyard of 674 Scuttle Hole Road in Water Mill. The 18,000-square-foot mansion — built five years ago by Jeffrey Colle, a well-respected South Fork

the Flying Spur. The seven-bedroom, seven-bath home turned heads, too, with hand-planed reclaimed black walnut floors and handcarved mahogany railings, bidets and radiant heated Japanese marble tubs, iPad- controlled lighting and humidity — and, with all that land for horseback riding, a six-stall stable. “It’s perfect for an equestrian,” said broker Matthew Breitenbach, who is marketing the house with his mother, Susan. The $24.99 million listing price is down from about $40 million, mostly because of the property’s vastness and lack of an oceanfront view, Breitenbach explained. Still, as one guest pointed out: “All you need is one [buyer].” Another guest, Michelle Stoddard of Resorts World in Queens, was impressed with the Flying Spur — so much so that the public relations rep plans to buy a few of the $200,000-plus sedans for the casino’s high rollers to take for a spin. The Bentley impressed a good number of others, even one person who arrived in a Lamborghini — the home, though, not so much. “I see it going for $10 [million], maybe $15 million,” said another attendee. By Guelda Voien

vided by French liquor purveyor Cognac Croizet, which proudly displayed a $157,000 bottle of its Cuvee Leonie (1858). A few tried out the artificial putting green, others took a dip in the pool and a steady stream took turns sitting behind the wheel, but not driving, Bentley’s latest model,

A little something to say thanks Brokers are reeling in pricey gifts

for helping clients navigate tight market

ong gone are the days of a handwritten thank-you note or a basket of fruit. In today’s tight housing market, buyers and sellers are giving much flashier presents to their brokers for a job well-done — jewelry, European vacations, even pets. Parisse, a Maltese, came to Javier Lattanzio at Christmastime, a gift from a couple who wanted to show their appreciation for his hard work in selling their Fifth Avenue apartment a year earlier. “It’s not a monetary thing — it’s from their hearts,” said Lattanzio, director of sales at Time Equities, who also has received a vacation to Paris from clients. “This comes from a relationship that starts in real es-

tate and people become friends.” Among the goodies that NestSeekers International’s Ryan Serhant, who stars in Bravo TV’s “Million Dollar Listing New York,” has received: a $30,000 Breitling wristwatch and VIP tickets to an NFL playoff game last year. Lattanzio stressed that his gifts have always arrived after a sale closed and that he discussed each one with his manager. His forthrightness is the right ap-

NestSeekers’ Ryan Serhant received a $30,000 Breitling wristwatch as a gift.

A building to grace the city’s coffee tables ‘400 Fifth Avenue’ hits bookstores this fall T he Residence at 400 Fifth Avenue exemplifies all the best of the real estate world: an exquisite façade; luxury homes inside (including a Fendi-designed penthouse); and a five-star hotel — all at a storied location just a stone’s throw from the majestic Empire State Building. Now the 60-story tower is making its mark in the literary world as the subject of a coffee table book that will hit the shelves in late October. The price: $85, with all proceeds going to the publisher, Rizzoli International Publications. Titled “400 Fifth Avenue: A New Gwathmey Siegel Landmark,” the

96 August 2013 www.TheRealDeal.com

77-page tome has images of the skyscraper, its homes and the neighborhood — all taken by noted real estate listings photographer Evan Joseph — along with an introduction by architecture critic Paul Goldberger and a foreword by architect Robert Siegel of Gwathmey Siegel, who designed the building with his late partner, Charles Gwathmey. Siegel credits the site’s developer, Italy-based Bizzi & Partners Development, for the structure’s European-influenced aesthetic. “It’s a beautifully detailed building,” Seigel told The Real Deal, pointing out the vertical bay win-

proach for Time Equities Chairman and CEO Francis Greenberger, who isn’t troubled by end-of-transaction tokens — only those gifts that might be construed as a quid pro quo: “If I do this, will you buy me a puppy?” he cited as an example. For Steven Kirkpatrick, an attorney for Belkin Burden Wenig & Goldman, gifts are perfectly ethical but should always be disclosed by brokers. “It’s really like a bonus,” he said. “You did a great job — here’s a bonus commission.” By Zachary Kussin

dows that let residents walk up to a wall of glass and look out — and down. Added Joseph: “It’s so unusual that it’s really like a sculpture.” Siegel and Giuseppe Rossi, the executive vice president of Bizzi, acknowledge the book could help find buyers for the two dozen or so of the 162 homes that are still available since sales launched in November 2010 — the average sales price is $2,078 per square foot, according to CityRealty, a listings database. The tower’s 214 rooms in the Langham Hotel go for roughly $700 a night. “Obviously, if people love architecture, it’s possible they [will] contact us to see if there’s some units available, but we really didn’t do it for that purpose,” Rossi told TRD. Rizzoli approached Bizzi about doing the book — and didn’t have to do much to get the Milan-based firm to sign off on it, Rossi told TRD. “[Rizzoli] believed it was a good opportunity — that this combination of an Italian developer doing an American building with American architects in New York was a great idea for a book,” he said. “We were immediately excited about it.” By Hayley Kaplan www.TheRealDeal.com January 2013 113

SUPPORT OUR POLICE

Real Deal 8-13rev_Layout 1 7/30/13 10:55 AM Page 1

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Through The Outstanding Command Of Police Commissioner Ray Kelly: • This year, murders are down 29% from the 50-year low in 2012. • They stop & question individuals about whom they have reasonable suspicion - a widely used and lawful police tactic upheld by the U.S. Supreme Court in 1968. • In 2012 civilian complaints were the lowest in five years. That’s progress - and a trend we need to continue!

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THE CLOSING

WITH MITCH

RUDIN Mitch Rudin is president and CEO of U.S. commercial operations at Brookfield Office Properties. He joined Brookfield in 2011 from the brokerage CBRE, where he’d been president of U.S. Transaction Services. Currently, Rudin is overseeing Brookfield’s $250 million renovation of the World Financial Center and the construction of Manhattan West, a 5.4 million-square-foot office, residential and hotel development near Hudson Yards in Manhattan. Rudin attended Franklin & Marshall College and Boston College Law School. What is your full name? Mitchell Eliot Rudin. Any relation to Bill Rudin, CEO of Rudin Management? No, but I get that almost daily. They’re a wonderful family. Date of birth? April 25, 1953. Where did you grow up? I was born in New York City, but grew up in Atlantic Beach, on the south shore of Long Island. What were you like as a kid? I was probably fairly serious. I was committed to school, sports and the friendships that came with them. What did your parents do? My father owned and ran a hosiery company — stockings and men’s socks. My brother and I worked with him on weekends when we were young. I learned the importance of hard work and ethical behavior from him. You now live in Scarsdale? Yes, I commute every day [by car]. It takes about 45 minutes. Do you have any other homes? We just completed construction on a house in Amagansett. We converted an old beach house into a modern beach house. We’ll be out there probably 12 to 15 weekends a year. How long have you been married? Thirty-three years. We met in Amagansett. Bonnie was coming off the tennis court, I was coming off the basketball court, and we met at the water fountain. We ended up going to the same singles party, followed by a club, and we’ve been together since that night. How many kids do you have? We have two children, Scott and Ben. Scott is 28. He’s a senior [fashion] designer at Ralph Lauren. Our younger son Ben is 26. He’s living in Israel. Does a passion for fashion run in the family? Scott has a wonderful sense of design and style. I think it skipped a generation. My father was always considered a very dapper dresser; I just try to keep up.

98 August 2013 www.TheRealDeal.com

You were previously an attorney. How did you get into real estate? I was practicing law at [Manhattan firm] David & Gilbert. I’d been doing a deal with Saatchi and Saatchi at 375 Hudson Street. After the deal, the people at Tishman Speyer [the owner of 375 Hudson] asked me if I’d ever thought of making the switch [to real estate]. We had a series of discussions, and I ended up going over to the business side with them. You left CBRE for Brookfield after being there for 21 years. Was it a tough decision? It was an opportunity to be part of two projects that would be redefining New York City: the renovation of Brookfield Place and the West Side project. It was only an opportunity of that nature — which I was not looking for — which would have led me to make the change. [CBRE] could not have been more gracious when I left. What is the status of Manhattan West? We’ve been in construction since October. We’re currently talking to a couple of major tenants. You used to host an annual basketball tournament at your house for CBRE people. Do you still do that? Yes, a number of CBRE and Brookfield people come to the house. The moment I stop playing is the moment I’ll stop hosting. Are you competitive? Quite.

“Occupy Wall Street” protesters spent months camped out in Brookfield’s Zuccotti Park last year. What did you make of the movement? We were concerned about crime, and harm coming to individuals. There were some really bad elements mixed in among that group. … Regardless of your view of the politics, it was a terrible missed opportunity. … Their message was entirely unclear and their decision-making was dysfunctional. They could have converted [their efforts] into political influence, but they didn’t. If you look back now, what was really accomplished? How do you size people up when you first meet them? I listen very carefully. Start with the fundamental decision: Is the person a good or a bad person? If the person is good, have tolerance for some of the things they do that might not be so perfect. If the person is a bad person, have no tolerance. … When I’ve been involved in recruiting people, I often want to know about their significant other. I want to meet that person. What other hobbies do you have? I stand-up paddle board [in the Hamptons] and play tennis. We also collect Modern American art. At the moment, our favorites are Reginald Marsh, Charles Burchfield and other artists of that generation. Do you view art as an investment? I view it as a passion, not as an investment. Still, the passion won’t lead me to buy something that isn’t a prudent investment. By Katherine Clarke

PHOTOGRAPH FOR THE REAL DEAL BYJuly MAX2006 DWORKIN00 www.TheRealDeal.com

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Sales: 877 510 2266 | info@isgworld.com | www.isgworld.com Oral representation cannot be relied upon as correctly stating the representation of the developer for correct representations, references should be made to the documents required by section 718.503, Florida Statutes to be furnished by a developer to a buyer or lessee. This offering is made only by the prospectus for the condominium and no statement should be relied upon if not made in the prospectus. This is not an offer to sell, or solicitation of offers to buy, the condominium units in states where such offer or solicitation cannot be made. Prices, plans and specifications are subject to change without notice. Actual improvements may vary from renderings and are used solely for illustrative purposes. Actual views may vary and may not be available in all units. Views cannot be relied upon as the actual view from any particular unit within the condominium. The developer does not guarantee the future view from the property or from a specific unit and makes no representation as to the current or future use of any adjacent property. We are pledged to the letter and spirit of the US policy for achievement of equal housing opportunity throughout the nation we encourage and support an affirmative advertising and marketing program in which there are no barriers to obtaining housing because of race, color, religion, sex, handicap, familial status or national origin.