The Real Deal January 2013 by The Real Deal

NY’s top listings photographers

Joan Swift’s, well, swift Elliman rise

Swig v. Macklowe lawsuit gets ugly

When will the Seaport recover?

113

Corcoran dogs get TV fame

THEREALDEAL www.TheRealDeal.com

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

Vol. 9 No. 1 January 2013 $3.00

The year in real estate Amid fiscal cliff worries, New Year’s forecasts and biggest 2012 deals

BY KATHERINE CLARKE, GUELDA VOIEN AND ADAM PINCUS Big worries like the fiscal cliff, prospective tax changes and a not-thatdistant mayoral election loomed at the end of 2012 for New York City real estate. This month, TRD talked to industry insiders from several sectors

to get their 2013 predictions. Among the forecasts: On the commercial side, experts say sky-high prices for existing buildings will push investors into the riskier development sector this year. On the residential side, they say to expect more super-luxe projects á la One57 and 432 Park Avenue. Meanwhile, TRD also looked back at the best deals of 2012, charting the priciest residential sales, the biggest office and retail leases, and the most expensive building buys. We also took a peek at the biggest blunders of the year. See stories beginning on page 60

FACT Retailer H&M scored two of NYC’s top five biggest retail leases in 2012. It took 103,000 square feet at two new Manhattan locations. See page 64.

AT A GLANCE Manhattan sees year-end sales rush Winter is a notoriously slow time for real estate deals. But 2012 saw a surprise fourth quarter sales spike of 29 percent compared to 2011, prompted partly by the looming increase in capital gains taxes. Appraiser Jonathan Miller said rising prices are next on tap. See page 16.

Office leasing lows Despite a flurry of deals at the end of 2012, the year was one of the slowest in memory for Manhattan office leasing. See page 26.

Newbie no more For WeWork’s Neumann, Woolworth was just start BY KATHERINE CLARKE WeWork founder Adam Neumann wowed industry insiders last year when he put together a mega-deal at the Woolworth Building. Now he’s snapping up NYC office space. See story on page 32

Does giving pay? What NYC donors get for their contributions: A look at philanthropy’s close ties with real estate deal-making BY HAYLEY KAPLAN AND LEIGH KAMPING-CARDER Charity is, of course, about giving back. But for NYC’s real estate elite, philanthropic involvement also gives movers FEATURE STORY and shakers a chance to form fruitful business relationships. This month TRD looked at the biggest givers in the NYC real estate world and what they get in return. See story on page 37

Sifting through Sandy’s wrath

Insurance skyrockets; owners and tenants battle over rent

Michele Kleier: A robbery led me to real estate See page 114.

PHOTO CREDITS ARE HERE

BY ADAM PINCUS There’s a new phase in New York City’s recovery from Hurricane Sandy: the insurance battles and the tenant-landlord disputes. Owners of Lower Manhattan’s hardest hit buildings are seeing short-term insurance premiums skyrocket and are dealing with tenants fighting them over rent payments. See stories beginning on page 48

Ponte power

Family’s massive Tribeca portfolio is finally in play

BY C.J. HUGHES The low-profile Ponte family is sitting on a goldmine after buying up Tribeca properties for decades and rarely selling or developing them. Now they’re finally making moves. See story on page 52

The brokers behind NYC’s priciest rentals

The agents who closed the most lucrative residential leases of 2012 — and how they did it BY HAYLEY KAPLAN Rentals are no longer just for rookies. With the strength of the highend leasing market, more top NYC brokers are moving into the rental domain. This month, with the help of listings website StreetEasy, The Real Deal examined Manhattan’s priciest closed rental deals — and the brokers who put them together. See story on page 74

Top Manhattan rentals, 2012 Waldorf-Astoria apt: $135K a month (Margaret Bay, BHS) Cassa Hotel/Residences apt: $90K (Ashley Teitel, Town) One Beacon Court apt: $75K (Frans Preidel, BHS)

Seven Bryant Park rendering

Cutting corners The planned Seven Bryant Park office tower designed by Pei Cobb Freed looks like it will fall short of the architecture firm’s earlier buildings, critic James Gardner says. The problem is the less-than-subtle corners. The building won’t disgrace the area, but won’t add much either, he says. See page 46.

RLS readies launch REBNY is launching its new listings system this month. The trade group insists the move will bring the portal, which brokers have criticized in the past, into the 21st century. See page 20.

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Highlights NURSERY SCHOOL

J A N U A R Y

2 0 1 3

Manhattan sales volume perks up

The new RLS — at long last

Lehman ramps up liquidation

And while luxury rental rates soar, too, median prices fall from previous high.

REBNY gears up to launch new listing system for residential brokers. The bankrupt firm agreed to a mega sale of apartment owner Archstone to Sam Zell and AvalonBay Communities.

Sam Zell, owner of Equity Residential

The builder behind Apple’s cube Les Hiscoe of Shawmut talks about the firm’s 200-plus projects for Apple and about building Fifth Avenue flagships for other fancy retailers.

Les Hiscoe of Shawmut Design and Construction

With 10,000 species of plants, century-old Brooklyn Botanic Garden needed a visitor center to teach its more than 1 million visitors each year about horticulture. As green as its mission, the center’s undulating glass curtain wall delivers high performance, minimizing heat gain while maximizing natural illumination. Skillfully integrated with park surroundings by architects Weiss/Manfredi, its organic transparency offers inviting respite between a busy city and a garden that has a lot of growing—and teaching—left to do.

words... 28 InThistheir month’s funniest and most

insightful real estate–related comments.

Transforming design into reality

Shaun Osher: A day in the life The Core CEO bikes up to 75 miles a day, plays the sax — oh, yeah, and manages to run his own residential firm.

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

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

Adam Neumann at WeWork’s 175 Varick Street location

Core CEO Shaun Osher

Neumann on tap

Hudson Yards breaks ground

After putting together a mega deal at the Woolworth Building, WeWork founder Adam Neumann is snapping up NYC office space.

After years in the making, the first tower at the massive West Side development, a 47-story ofﬁce tower, finally breaks ground.

37 Does it pay to give?

Architect: Weiss/Manfredi Architecture/Landscape/Urbanism Photographer: Albert Veˇ cerka

8 January October 2013 2012 www.TheRealDeal.com www.TheRealDeal.com

What NYC donors get for their contributions: A look at philanthropy’s close ties with real estate deal-making.

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Highlights continued camera... sale 42 Lights, Meet New York City’s top real

COURT ROOM

estate listings photographers.

“Swift” takeover 44 AElliman’s top broker, Joan Swift, on her rapid rise to prominence. It starts with Clint Eastwood. Real estate owner Vincent Ponte

Still reeling from Sandy

The powerful Pontes

Guberman’s gamble

Predicting the 2013 market

A state-of-the-art arena with unparalleled sightlines and an interior environment as dynamic as its sculptural exterior, Barclays Center is New York’s first major new entertainment venue in nearly a half century. But while the arena’s unique steel paneled facade may stop traffic outside, it’s the elegant long span steel roof structure inside that enables crowds to enjoy column-free views of show-stopping performances. Architects SHoP and AECOM with structural engineer Thornton Tomasetti made sure that, long after its first sold out performance, Brooklyn would have a new living room where every seat is always the best seat in the house.

Hard-hit office landlords face insurance squeeze post-storm — and battles with tenants over rent.

The family has been sitting on a gold mine of a real estate portfolio in Tribeca. But their properties are finally in play now.

New York City builder hits the Hamptons with a supply of extra-large spec homes. Can he replicate his city success?

The biggest residential and commercial deals of last year and what’s in store for the New Year.

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

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

National Market Report

Swig v. Macklowe

Structural steel Right for any application

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

Elliman broker Joan Swift

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

Kent Swig with soon-to-be ex-wife Elizabeth Macklowe

Reports from around the country on significant developments and trends.

A look at the bitter lawsuit that’s still dogging the former in-laws in the wake of an ugly divorce.

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

brokered the priciest rentals? 74 Who The agents who closed the most lucrative residential leases of 2012 —

and how they did it.

77 Arena Design Architect: SHoP Architects Arena Architect: AECOM Design Builder: Hunt Construction Group Structural Engineer: Thornton Tomasetti Photo: Bess Adler

10 January October2013 2012 www.TheRealDeal.com www.TheRealDeal.com

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

106

Calendar of Events

Sizing up the South St. Seaport

Check out this month’s activities.

The burgeoning nabe was slammed by Sandy, but brokers say retail, not residential, took the bigger hit.

114

Development Updates

112

Comings & Goings The stories behind the latest job moves and company announcements.

Kleier: Beyond TV stardom Michelle Kleier on getting into the business after being robbed and praying for rain in the Hamptons.

113

We Heard A lighter look at industry buzz.

www.TheRealDeal.com March 2012 00

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Note Financing Multifamily Property Brooklyn, NY December 2012

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Distressed Loan Pool Acquisition Multifamily/Retail Properties Brooklyn, Bronx & Queens, NY June 2012

Distressed Note Acquisition Retail / Office Property Queens, NY November 2012

DPO Financing/Construction Loan Retail Property Queens, NY April 2012

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Distressed Loan Pool Acquisition Multifamily Properties Brooklyn, NY June 2012

Distressed Note Acquisition Multifamily Property Brooklyn, NY September 2012

Note Financing Multifamily Property Queens, NY December 2012

Distressed Loan Pool Acquisition Multifamily/Retail/Industrial Brooklyn, Manhattan & Queens, NY April 2012

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Distressed Note Acquisition Mid-construction Multifamily Property Manhattan, NY November 2012

Distressed Note Acquisition Mixed-Use Building Brooklyn, NY February 2012

Distressed Loan Pool Acquisition Multifamily/Industrial Properties Brooklyn, NY December 2012

Distressed Loan Pool Acquisition Multifamily Properties Manhattan, NY July 2012

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Note Financing Flex/Industrial Building Long Island City, NY February 2012

Distressed Note Acquisition Mid-construction Retail Property Staten Island, NY July 2012

Distressed Note Acquisition Industrial Property Brooklyn, NY May 2012

Distressed Note Acquisition Multifamily Property Brooklyn, NY September 2012

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 EXECUTIVE DIGITAL EDITOR Gabrielle Birkner

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.

DEPUTY WEB EDITOR Leigh Kamping-Carder ART DIRECTORS Derek Zahedi, Ronald Gross SENIOR REPORTER Adam Pincus

You need Rosewood Realty Group

REPORTERS Katherine Clarke, Guelda Voien, Hayley Kaplan CONTRIBUTORS C.J. Hughes, David Jones, Adam Piore PRODUCTION MANAGER & RESEARCHER Linden Lim WEB PRODUCERS Zachary Kussin, Christopher Cameron, Hiten Samtani PHOTOGRAPHERS Chris Martin, Marc Scrivo DIRECTOR OF MARKETING OPERATIONS Yoav Barilan

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ASSOCIATE SALES DIRECTOR Ross Fox

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DIRECTOR OF DIGITAL MARKETING AND STRATEGY Amir Talai

Rosewood Knows New York We are pleased to announce that through December 28, 2012, Rosewood has completed total sales of $1,553,900,500 in New York, which include:

ADVERTISING SALES Eran Evron, Abi Laoshe, Nick Mascaro, Robert Stearns, Jennie Durkovic WEBMASTER Nima Negahban FINANCE DIRECTOR Kenneth Cyrus

Manhattan: Aggregate sales of $811,540,000 - 102 Buildings / 2936 Residential Units / 87 Commercial Units

Bronx: Aggregate sales of $343,797,500 - 54 Buildings / 2699 Residential Units / 55 Commercial Units

Brooklyn: Aggregate sales of $304,838,000 - 46 Buildings / 1676 Residential Units / 35 Commercial Units

Queens: Aggregate sales of $93,725,000 - 11 Buildings / 413 Residential Units / 18 Commercial Units

ADMINISTRATOR Junaid Zahid CIRCULATION Paul Destanko DISTRIBUTION Mitchell Newman, Michael Presto ATTORNEY Barry J. Friedberg Trachtenberg Rodes & Friedberg ACCOUNTANTS William T. McCallum, CPA, P.C., Christine Wang

12 January 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 The end of the world as we know it

f you are reading this note, the world has not ended. There is something about the end of the year that lends itself to predictions of the end of the world. “The Late Great Planet Earth,” which, according to Time magazine, was the bestselling nonfiction book of the entire 1970s, predicted that the world would end before Dec. 31, 1988 (nuclear war, communism and violence in the Middle East were the culprits). Then there was Y2K — where at the stroke of midnight on Jan. 1, 2000, the entire global computer network was slated to crash, causing widespread chaos. And the end of the 5,000-year Mayan calendar this past Dec. 21 was also supposed to signal the cessation of existence as we know it, thanks to an asteroid called Nibiru. (There is actually little evidence that the Mayans held this belief, though it did serve as inspiration for the disaster movie “2012,” starring John Cusack.) The end of the Mayan calendar was not the only doomsday scenario this year. The other, of course, was the so-called fiscal cliff, a bureaucratic end-of-the-world narrative centering on political gridlock, which many fear will lead to a hobbled government (as a result of reduced spending and the expiration of a host of tax cuts) that will throw the economy into a tailspin. That is the real scenario to be worried about, given its potential impact on Americans’ pocketbooks. That’s not to mention its impact on the New York City real estate market, which we examine in this issue, including in a story about what’s on tap for the New Year on page 66. The anxiety surrounding the fiscal cliff, which was still (unbelievably) unresolved at press time, hasn’t been all bad news for the market. In fact, while winter is normally a slow time for real estate, the number of residential sales in the fourth quarter was up nearly 30 percent compared to the same time the year before. That bump in activity was prompted by looming increases in capital gains taxes, according to industry pros.

There is something about the end of the year that lends itself to doomsday scenarios, from Y2K to the fiscal cliff.

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Check out the story by Hayley Kaplan, our newest reporter, on page 16. In addition, the outlook for the 2013 Manhattan residential market going forward could be good. Some are predicting prices may rise in the New Year because of a shortage of available apartments. And a look back at the most expensive residential sales of the past year — where many records were broken — is a cause for optimism as well (see page 60). Meanwhile, another end-of-the-world-type event (there were a lot this year) was Hurricane Sandy. With cleanup underway, lawyers and insurance companies are now front and center. (Insert your own joke here about lawyers and the end of the world.) Owners of some of Lower Manhattan’s hard-hit buildings are facing skyrocketing insurance premiums, as well as fighting with tenants over when their rent payments should resume. Check out the series of stories by Adam Pincus starting on page 48. And with the holidays this past month, it was high season for charitable giving. The Real Deal took the opportunity to examine the relationship between philanthropy and real estate deal-making. In addition to giving back to the community, the charity circuit is a big part of how power and money work in the city, and many deals are hatched because of relationships formed on nonprofit boards and committees. Check out our stories starting on page 37. Finally, watch out for The Real Deal’s newest publication, Luxury Listings NYC, which is set to debut this month. The bi-monthly magazine is going to feature residential property listings, and will have the largest door-to-door distribution of any magazine in New York City, reaching 100,000 doorsteps. For a complimentary subscription, sign up at LLNYC.com. The publication will feature real estate news geared toward the average buyer or renter (not the in-depth industry news you find in TRD), with dedicated regular coverage on what’s happening in each micro-neighborhood in Manhattan. That’s something that’s not being done by the various real estate sections around town, surprisingly, and will make it a valuable resource for readers who want to know what building is rising down the street or the best bargains on the market in their hood. We’re all very excited about the launch. Enjoy the issue and happy New Year!

Stuart Elliott

14 January 2013 www.TheRealDeal.com

Behind every successful Building Owner there is a host of incredibly talented Brokers and steadfast Tenants. Jack Resnick & Sons thanks the following Firms and the Brokers who represented them, as well as our existing Tenants who renewed their commitment to New York City in 2012. The City of New York 255 GREENWICH STREET Univision Radio New York, Inc. 485 MADISON AVENUE represented by: Michael Gottleib & Martin Cunningham of Avison Young Stephen R. Harris & Associates Media Co., Inc. 110 EAST 59TH STREET Mount Sinai School of Medicine 485 MADISON AVENUE Fieldman Gahr & Levy, Inc. 133 EAST 58TH STREET represented by: Stanley Piesh of Prime Manhattan Realty Maal 52, Inc. d/b/a Dino Baldini 485 MADISON AVENUE Willow Management of NYC, Inc. 133 EAST 58TH STREET Waxing by Grace, Inc. 133 EAST 58TH STREET

Moda Operandi, Inc. 315 HUDSON STREET represented by: Owen Hane of Cushman & Wakefield, Inc. Robert Marston Corporate Communications, Inc., Robert Marston Marketing Communications, Inc. and Robert Marston Associates, Inc. 485 MADISON AVENUE represented by: Moshe Sukenik & Barry Goodman of Newmark Grubb Knight Frank The Fashion Group International, Inc. 8 WEST 40TH STREET represented by: Kenneth Kronstadt & Rick A. Kramer of Newmark Grubb Knight Frank TED Conferences, LLC 250 HUDSON STREET represented by: Kim Skarvelis of Cast Iron Real Estate O.M.G., Inc. 301 EAST 45TH STREET 8 West Bakery LLC d/b/a Maison Kayser 8 WEST 40TH STREET represented by: Matt Cohen of The Lansco Corporation String Advisors, Inc. 133 EAST 58TH STREET

United States of America 315 HUDSON STREET SD Daniels & Co., C.P.A., P.C. 485 MADISON AVENUE

Pembrooke Capital Management, LLC 485 MADISON AVENUE represented by: Cory Borg of Newmark Grubb Knight Frank

TED Conferences, LLC 315 HUDSON STREET represented by: Kim Skarvelis of Cast Iron Real Estate

Klein Zelman Rothermel LLP 485 MADISON AVENUE represented by: John T. Pavone, Jr. of DTZ

Gracie Mews Restaurant Corp. 401 EAST 80TH STREET

Marlcroft Asset Management, LLC 133 EAST 58TH STREET

Steven Myers, D.D.S. 133 EAST 58TH STREET

Hat World, Inc. d/b/a The Yankee Store 110 EAST 59TH STREET

Alexandra Hara, DMD 133 EAST 58TH STREET

Microdot, L.L.C. 133 EAST 58TH STREET

Andrew Resnick, Au.D., LLC 133 EAST 58TH STREET

The Interpublic Group of Companies, Inc. 250 HUDSON STREET represented by: Robert Romano of Jones Lang LaSalle

Alla Belilovsky Internal Medicine, P.C. 133 EAST 58TH STREET represented by: Christian Arnold of Red Real Estate LLC

Ari A. Druz, D.D.S. 133 EAST 58TH STREET

BK Belts W. 57th Street 205 WEST 57TH STREET represented by: Peter Levitan of Lee & Associates, Inc.

Jack Resnick & Sons Owners and Builders Since 1928 110 East 59th Street New York, NY 10022 212-421-1300 www.resnicknyc.com

Proud to be a member of

Resnick Thank You 10.5 X 14.5 RD_4.indd 1

12/28/12 10:32 AM

RE S I D E N T I A L MA R K E T BY HAYLEY KAPLAN inter is usually the slowest time of year for Manhattan real estate sales. This season, however, the continued strength of the luxury market — paired with the pending change in tax rates for capital gains — prompted a spike in sales activity. In the fourth quarter of 2012, there were 2,598 closed sales in Manhattan, according to Douglas Elliman’s latest market report, which was prepared by appraisal firm Miller Samuel. That’s up a dramatic 29.2 percent from the fourth quarter of 2011. Listing inventory, meanwhile, plummeted 34.2 percent to 4,749 from 7,221 at the same time last year. Real estate appraiser Jonathan Miller of Miller Samuel said if this level of activity keeps up, rising prices are likely to follow in the first quarter of 2013. That hasn’t happened just yet, though. Average sales prices across the borough stayed largely flat in the fourth quarter, increasing just 1.1 percent to $1.46 million, up from $1.45 million in the same period of 2011. The median sales price, meanwhile, fell 2 percent to $837,500 from $855,000 in the prior-year quarter. But Miller said it’s only a matter of time.

16 January 2013 www.TheRealDeal.com

Manhattan sales volume perks up

Price increases likely on tap for sales in the New Year, but mid- and lower-end rental rates soften

“When you have sales rising modestly, listing inventory falling sharply and less product available, the result eventually is rising prices,” he said. He also noted that Manhattan’s monthly absorption rate — the amount of time it would take to sell all the listings on the market — was 5.5 months in the fourth quarter, a 49.1 percent decrease from the same period of 2011. Miller said it was second-lowest absorption rate since he began tracking data 12 years ago. Miller attributed the uptick in sales — and subsequent drop in inventory — in part to falling interest rates. Data released by the Mortgage Bankers Association last month shows that 30-year fixed-rate mortgages fell gradually throughout 2012, sliding from 3.9 percent in the first quarter to 3.5 percent by the end of the third quarter. “This trend has been occurring for a couple years [but] accelerated because interest rates have fallen,” Miller said. Another factor driving the market is the flurry of high-end sales, which has been prompted by the expected rise in capital gains taxes. “We expected to see a strong December in high-priced apartments as a result of the pending change in capital gains rates,” said

Neil Binder, president of the Bellmarc Group. Even so, he said, “we have been pleasantly surprised to see that the normal December lull has been less than we expected.” In another market report last month, the brokerage Olshan Realty reported that 42 contracts priced above $4 million had been signed in a period of two weeks in December — the best holiday season since the firm began tracking the luxury market in 2007.

The Manhattan rental vacancy rate, meanwhile, grew to 1.38 percent in November, up slightly from 1.16 percent in the same month of 2011, according to the firm. Still, the rental market continues to be active, driven by still-low vacancy rates, brokers said. “The cold-weather months are typically less competitive, but this year there continues to be a lot of competition among renters,”

In the fourth quarter of 2012, there were nearly 2,600 closed sales in Manhattan. That’s up 29 percent from the year prior. Perhaps as a result of this heightened sales activity, Manhattan rents have finally reversed course and begun to drop, while the availability of rental apartments has inched higher, brokers said. Average Manhattan rental prices peaked at historic highs in 2012’s third quarter after steadily increasing from January to August, according to market data from the brokerage Citi Habitats. In the fall, however, rents began to slide. The average Manhattan apartment rented for $3,368 in November, $76 less than the previous month, the Citi Habitats data showed.

said Douglas Wagner, executive director of leasing at Bond New York. Andrew Barrocas, CEO of MNS, said there is still “a lot of demand” for rentals, despite the softening of rents. “A building that would normally be filled within a month is now being filled in a week,” he said. At the same time, however, luxury rental prices in November swelled. A rental report compiled by Miller showed that median luxury prices (the top 5 percent of the rental market) in November had increased 19.6 percent from the year before, and 17.1 percent from October. TRD

www.TheRealDeal.com March 2012 00

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The new RLS at long last Data Book 2013 The Essential Book of Real Estate Statistics & Facts Residential | Development | Commercial

REBNY gears up to launch a new (and highly anticipated) listing system for residential brokers BY GUELDA VOIEN fter several years of anticipation, the Real Estate Board of New York, the largest real estate trade group in the city, is finally gearing up to launch its new listings system. The rejiggered REBNY Listing System — widely known as the RLS — is currently in a beta-testing period and is set to launch to the full residential brokerage community later this month. The move, REBNY officials insist, will bring the portal, which many brokers have criticized as slow and inaccurate in the past, into the 21st century. Indeed, Steven Goldschmidt, chair of REBNY’s technology committee and a broker at Warburg Realty, said not only will the new system be faster and more user-friendly, but more importantly it will conform to the so-called Real Estate Transaction Standard, or RETS. That change might sound technical, but Goldschmidt said it will give the 8,000 to 10,000 New York City brokers who use the

— does in fact run a MLS in Manhattan; however, it is not widely used.)

No universal system Instead of a straightforward, transparent and universally used MLS, New York City instead has a fractured system with a number of separate listing platforms run by private companies that disseminate information from the RLS. Those systems are the conduits that carry data from the RealPlus Online Listings Exchange, widely known as R.O.L.E.X., the current data transmission system for RLS, to many New York City brokerages. Those listings platforms include On-Line Residential, RealPlus (which functions as a vendor and whose owner, Eric Gordon, developed the R.O.L.E.X system) and other platforms like RealtyMX, BrokersNYC and Solid Earth — all of which firms can sign up for. In addition, some firms have their own proprietary databases, including the city’s two largest residential brokerages, Douglas

“It’s like we’ve been the PC, and the rest of the world is the Mac.” STEVEN GOLDSCHMIDT, REAL ESTATE BOARD OF NEW YORK

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RLS system access to all kinds of third-party products that brokers in other metropolitan areas already have. For example, it will be accessible through mobile phone apps, provide a more sophisticated way to calculate commissions (which have grown more complicated in recent years) and include more options for inputting information about a listing. The latter will allow for more specific apartment features to be checked off and included in a listing, like differentiating between a “terrace” and a “balcony,” for example, Goldschmidt said. “It’s like we’ve been the PC, and the rest of the world is the Mac,” said Goldschmidt. The fact that the system will be RETS-compatible means that many software programs developed by third parties — which brokers use to organize listings and other RLS information — will be able to access New York City listings data for the first time, Goldschmidt said. That should expand the number of software programs brokers here have at their disposal, he added. Brokers say the residential real estate community in New York has been woefully behind the rest of the country. That’s partly because the RLS system has been antiquated and partly because, unlike other cities, the Big Apple does not have one central Multiple Listings Service, where all brokers input their listings in a standard way. (A rival, albeit far smaller, trade organization — the Manhattan Association of Realtors

Elliman and Corcoran, whose systems are dubbed Limo and Taxi, respectively. But creating a more sophisticated system has been a long and onerous task. “The residential division has been trying for years to get more control over the data, and this effort to streamline and modernize it represents their success,” said Doug Wagner, executive director of leasing at Bond New York. “It’s the lifeblood of our industry” to be able to exchange listings, he added. Still, until brokers see REBNY’s new system in the flesh, many are skeptical. “I think in concept it’s good,” said Donna Olshan, owner and founder of Olshan Realty, who has not yet used the new system. “The whole question is, does it work?” Indeed, even before the system has launched, it has generated some serious scuttlebutt in the industry. Many brokers told TRD they believed that the new system would make it harder for agents to access their listings and that the system would automatically cut off a broker if she failed to pay her dues — both facts that REBNY disputes. In addition, many brokers said they thought the new system had already launched despite the fact that REBNY says it’s only in beta testing and hasn’t yet rolled out to brokers. Others say that preparing to implement the new system has been far too costly. Neil Continued on page 102

www.TheRealDeal.com March 2010

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By the Numbers

Lehman ramps up liquidation Compiled by Christopher Cameron

Lehman’s mega-sale Lehman Brothers Holdings last month agreed to sell Archstone, a massive Colorado-based apartment owner, in a deal valued at $16 billion (including debt) to Sam Zell’s Equity Residential and AvalonBay Communities. The mega-sale, which included $6.5 billion in cash and stocks, is expected to close during the FIrst Sam Zell quarter. (WSJ)

Lehman liquidates In September — exactly four years after the investment bank collapsed — Lehman’s remaining real estate assets were pegged at $10 billion. The sale of Archstone, Lehman’s biggest asset, is part of the bankrupt FIrm’s efforts to liquidate its holdings. But this is no fIre sale: the com-

Archstone Chelsea

Lehman’s remaining real estate Now that its largest real estate asset has been sold, Lehman can turn its attention to the roughly 70 properties nationwide that it hopes to eventually sell off. Some of those holdings — like 237 Park Avenue and 2178 Broadway, known as the On The Ave hotel — are in New York City. (NYT)

237 Park Avenue Lehman provided $1.23 billion in both mezzanine and First mortgage debt for Broadway Partners’ purchase of 237 Park Avenue in 2007. But Broadway defaulted and Lehman took full control of the building in April 2012. Some have speculated that because Lehman also owns air rights, a new tower or addition could be in the cards there. (Bloomberg News, New York Post) 237 Park Ave

On The Ave In 2011, Lehman took control of On The Ave after a default by the hotel’s owners, Highgate Holdings and its partner. They had purchased the building for just over $200 million in 2007. Lehman, which was headed by CEO Dick Fuld before it collapsed, has held the property as an investment since taking it back, and has not yet openly marketed it. (Real Capital Analytics)

A successful Flip At the time of its bankruptcy, Lehman had a $480 million stake in 200 Fifth Avenue across from Madison Square Park. But during the fInancial crisis, Lehman and partner L&L Holdings restructured the debt and made capital improvements to attract tenants. The result? Lehman sold its more than 90 percent stake in the building for some $700 mil200 5th Ave lion in 2011. (WSJ)

Penthouse Duplex

22 January 2013 www.TheRealDeal.com

Archstone’s NYC holdings

$15,000,000

Archstone partially or fully owns 181 developments nationwide, including 2,638 New York City apartment units in 11 buildings. Among its New York holdings are the 265unit Archstone Chel-

Dick Fuld

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24 January 2013 www.TheRealDeal.com

PHOTOGRAPH FOR THE REAL DEAL BY CHRIS MARTIN

Hiscoe’s wife works for Chanel, and this statuette of the Chanel logo came from the project where they met: the construction of a new Chanel store in Palm Beach, Fla. They were married nine years ago.

Hiscoe is pictured here with three of the cast members from the 1990s hit TV show “Beverly Hills 90210.” Shawmut built the Chanel Beverly Hills store and met the cast at the rooftop opening party in 2000. Hiscoe is surrounded by (from left) Tori Spelling, Tiffani-Amber Thiessen and Jennie Garth.

This sculpture depicts the iconic 1930s photo of a group of construction workers taking their lunch break on a steel beam above Rockefeller Center. While the sculpture was a gift from his wife, Hiscoe negotiated with the Soho artist who sold it to them. “I had to negotiate for my own birthday present,” he joked, noting that he got the price down to $200 from about $500.

the

Desk

of:Les

hiscoe

This ceremonial shovel was used a few years ago for the groundbreaking of a new flagship Apple store in Boston. Shawmut also built Apple’s flagship in New York, and in 2011 replaced the iconic cube’s glass with larger, higher-tech glass. The update reportedly set Apple back $6.7 million.

Hiscoe received this glass statue when he scored a hole in one during a company golf outing in New Jersey last year. At first, “my wife didn’t realize it was a big deal,” Hiscoe says. It took her a few days to realize the shot was a once-in-a-lifetime event.

flagship, two of the restaurants at the new Yankee Stadium and the glasscubed 59th Street Apple store — one of more than 200 projects that the firm has constructed for Apple. Shawmut also just finished the renovation of the lobby at the famed Waldorf Astoria hotel. The Real Deal sat down with Hiscoe in his West 54th Street office, which is home to memorabilia from the retailers whose construction projects his company has managed. B y G uelda V oien

Hiscoe often invites employees to his desk rather than a conference room for meetings; that reflects the democratic ethos of the company, which is fully owned by its employees. He also has video conferencing handy for holding court with Boston staff.

A jersey from the PanMass Challenge, a 200mile bike ride that Hiscoe participated in this past August in Massachusetts with a group of Shamut employees. Hiscoe, who was a novice cyclist before the race, began training in March, and now says he’s “hooked.” Shawmut cyclists and sponsors raised about $110,000 for cancer research.

es Hiscoe, chief operating officer of Shawmut Design and Construction, jets from the company’s New York offices to its Boston headquarters at least once a week. Over the past five years, his company has completed over $3 billion in construction projects, many in those two cities. In New York, Shawmut has built a number of high-profile retail, restaurant and academic projects, including Uniqlo’s 34th Street flagship, Lacoste’s Fifth Avenue

Shawmut gave away these custommade footballs to clients who came to watch the 2011 “Pinstripe Bowl” — a post-season college game it sponsors at Yankee Stadium in the Bronx. Shawmut helped convert the baseball stadium into a football arena for the game, and provided the infrastructure to do so for future games. The firm also built out the Malibu Rum Bar and remodeled the Hard Rock Café at the stadium.

This photo of Hiscoe and Ivanka Trump was taken at the opening for Ivanka’s jewelry store at 685 Madison Avenue, which Shawmut built in 2007.

Shawmut has done a number of projects at Yale University in New Haven, Conn., where the firm has a satellite office. Hiscoe estimates that 50 percent of Shawmut’s projects at any given time are for universities.

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Activity drops 30 percent, but pros have high hopes for 2013 By Adam Pincus espite a small flurry of deals last month, 2012 was one of the slowest years in recent memory for office leasing. Total leasing volume for 2012 fell to roughly 26.8 million square feet, a 33 percent drop from 40.7 million in 2011, preliminary figures from commercial firm Cassidy Turley showed. That dropoff, experts say, was due largely to big companies’ concerns about committing to space during these uncertain political and economic times (see related story on page 62). But this year may be a different story. Industry insiders said they expect a turnaround in 2013, if for no other reason than pent-up demand and the expiration of current leases. “There is no way … that it stays as stagnant as it’s been this year,” said David Berkey, executive vice president of leasing for the real estate firm L&L Holding Company. With the bogeyman of the fiscal cliff expected to be resolved in the coming weeks — no deal had been reached by press time — businesses will be able to make longer-term decisions, brokers said. And a handful of large deals were near completion as of late December. During a presentation to investors last month, Marc Holliday, CEO of SL Green Realty, Manhattan’s largest office landlord, referenced several of those deals. SL Green noted that Jefferies & Company, a global financial services firm, is close to inking a 450,000-square-foot renewal deal at 520 Madison Avenue, where it is currently located. The company is represented by Dale Schlather, an executive vice president at Cushman & Wakefield. Other large firms closing in on deals are cosmetics giant L’Oreal, which is expected to lease about 400,000 square feet at the Related Companies’ Hudson Yards development on the Far West Side, and Capital One, which is eyeing 225,000 square feet at 1221 Sixth Avenue.

Marc Holliday, CEO of SL Green Realty

long-anticipated move from 1290 Sixth Avenue to 11 Times Square, the 40-story tower at Eighth Avenue and 42nd Street. At one point, the Redmond, Wash.–based technology firm was expected to take more than 400,000 square feet at the building, but it ultimately signed a deal for just 230,000 square feet. Asking rents in Midtown rose $0.71 per square foot to $64.92 per foot in December, while the availability rate dropped 0.2 points from November to 11.1 percent, Cassidy Turley data showed.

Midtown South

Jefferies & Company, a global financial services firm, is close to inking a 450,000-square-foot renewal deal at 520 Madison Avenue.

“If these deals get done in the first quarter — we think they might; most will or should — it is going to be a hell of a start to 2013,” Holliday said at the meeting. He predicted that employment growth in the city’s office sector, as well as healthy profits from financial firms, should boost leasing. Overall asking rents for Manhattan rose to $57.43 per square foot in December, up from $56.84 the prior month, according to data from Cassidy Turley. Manhattan’s availability rate, which measures space that is currently vacant or will be available in the next six months, tightened slightly from the previous month by 0.1 point to 10.2 percent. That’s an improve-

26 January 2013 www.TheRealDeal.com

ment from 10.9 percent in December of 2011.

Midtown

Tenants inked several large deals last month in Midtown, ending a slow year with a slight uptick in activity. In Manhattan’s largest lease of the month, law firm Kaye Scholer signed a deal to take 250,000 square feet at Boston Properties’ under-construction office tower at 250 West 55th Street. The law firm, based in New York, will occupy floors three through 12 in the 20-year lease. Kaye Scholer will move from L&L Holdings’ 425 Park Avenue. Another large deal executed last month was Microsoft’s

Midtown South was the only Manhattan market to see an increase in availability last month. The area’s availability rose 0.1 point to 7.9 percent. The average asking rent, meanwhile, increased by $0.34 per square foot to $49.69 per square foot, according to Cassidy Turley. The increase in availability is due in part to two large blocks of space hitting the market. Vornado Realty Trust listed a 236,946-square-foot block of space at 770 Broadway. The current tenant, Nielsen, is moving to 85 Broad Street in Lower Manhattan, and had listed the space on floors seven, eight and 15 as a sublease over the summer with CBRE Group. There is no asking rent, but the Commercial Observer reported in June that Vornado was asking as much as $70 per foot in the building. The other large block is 57,904 square feet on the 14th floor at 11 Madison Avenue, the 2.2 millionsquare-foot office building on Madison Square Park. The space is being listed by the owners, the Sapir Organization and the CIM Group, and handled by CBRE. The Midtown South market was the darling of Manhattan office leasing last year, and insiders expect that to continue. “Midtown South will lead the [leasing] market in the city due to the lack of space and the demand that is still there,” said Greg Taubin, executive managing director at tenant-focused commercial firm Studley.

Downtown The Downtown market was, of course, hit hard by Hurricane Sandy, but many buildings that closed after the storm were back online by the end of last month. The 368,900-square-foot office tower 125 Maiden Lane, for example, added space to the market after reopening the first

Manhattan office stats AVAILABILITY RATE

AVG. ASKING RENT

Manhattan Dec ’12 10.2% $57.43 Nov ’12 10.3% $56.84 Midtown Dec ’12 11.1% $64.92 Nov ’12 11.3% $64.21 Midtown South Dec ’12 7.9% $49.69 Nov ’12 7.8% $49.35 Downtown Dec ’12 10.0% $40.08 Nov ’12 10.4% $39.95 Source: Cassidy Turley

week of December. The office tower, a commercial condominium building managed by development firm Time Equities, listed a partial space on the third floor for lease with an asking rent of $35 per square foot, and a condo space for sale on the 16th floor for $4.2 million. The asking rent for the newly listed space was about the same as that of space listed in the area before Sandy. The stability in rents is helped by the fact that in the Downtown market, “there seems to be a lack of space at the moment,” said Richard Recny, director of asset management for Time Equities. Recny declined to comment on how the storm impacted leasing terms, but said: “We are being cooperative with [prospective tenants] in terms of their space search, and we are doing right by them — and us — in the business terms.” Despite the storm, asking rents rose slightly in December to $40.08 per square foot, while the availability rate dropped by 0.4 points to 10 percent, Cassidy Turley said. Yet challenges remain in Lower Manhattan, where at least a half-dozen large buildings, such as 4 New York Plaza, were expected to remain closed at the start of the New Year, commercial firm Jones Lang LaSalle said. And leasing in the area is hampered by the continued outage of Verizon’s phone and data systems, which are not slated to be fully restored until the second quarter of 2013. While tenants can sign up with competing voice and data services, some companies need Verizon in order to communicate with other offices around the country that use the same system, insiders said. TRD

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In their words...

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

“There are a lot of crazed attorneys this month.” Lawyer Edward Mermelstein, on the rush of end-ofyear sales as homebuyers looked to unload property before the onset of scheduled tax increases (Wall Street Journal)

“If you’re from the music industry and you have tattoos and you want to get into real estate, you’re coming to work with us.” Jeff Schleider, founder of Miron Properties, explaining his recruitment strategy to The Real Deal reporters last month

“I was probably as shocked as you are.” Gerard Schumm, executive vice president of RFR Realty, reacting to the news that the RFRowned Seagram Building received a score of only 3 for energy efficiency in a recent city study. A minimum of 75 is required for high-efficiency buildings. (New York Times)

“There is no water at all. But Lloyd isn’t really an oceanfront person. He wanted a big property.” An anonymous source talking to the New York Post about Goldman Sachs CEO Lloyd Blankfein’s recently purchased Bridgehampton estate, which is located inland rather than on the beach 28 January 2013 www.TheRealDeal.com

“They called it an Orwellian attempt [to control people].” Dennis Sughrue, board president at the Richard Meier– designed condo On Prospect Park, on the reaction of some residents to a recent ban on smoking inside the building (New York Post)

“The truth is, I’m a house-aholic. I love to create a new nest.” Novelist Judy Blume, who has homes in Manhattan, Florida and Martha’s Vineyard (Architectural Digest)

“If you don’t suffer from agoraphobia before attempting to shop [at the Atlantic Terminal Target] on a Saturday or Sunday, you will develop it.” William B. May broker Barbara Rogers, writing in a Brick Underground post about Brooklyn

“Turn them over, lock them up, throw them under the bed. And it’s not just the obvious, valuable stuff we normally worry about, not just a pair of cuff links or a diamond ring. It’s anything small that can be pocketed. Because if it’s from their apartment, suddenly it’s a memento.” Douglas Elliman broker Dolly Lenz, recommending that celebrities remove all personal items from homes that are on the market (New York Times) www.TheRealDeal.com August 200600

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6:30 A.M. I usually wake up at 6:30. Half the week I stay in Port Washington, on Long Island. That’s where my two beautiful daughters live. The days when I don’t have my girls, I’m on West 9th Street, where I share a townhouse with my girlfriend, Brittley Jarrell,

DAY IN THE LIFE OF:

Shaun Osher The Core CEO walks TRD through a typical day, as he bikes up to 75 miles, juggles pricey listings and plays the sax

who is the chief operating officer of Core. I’ve always that 40 percent of the building has sold.]

been very active — I work out about four or five times a week. It’s usually a bike ride,

2:00 P.M. TO 5:00 P.M. Sometimes I will drop by our of-

between 20 to 75 miles [before

fice on Seventh Avenue to check in, and an agent will pull

work], and it’s usually loops in Cen-

me aside to ask about a deal. For example, Emily Beare

tral Park. Today, I ran seven miles

Osher competing in a triathlon

needed advice on a $95 million listing she has at 15 Central

along the Hudson. I also try to meet

Park West. We have property lists of people who are really

with my trainer once a week, to do

affluent, so we reach out and let them know the unit is avail-

push-ups, pull-ups, the rowing ma-

able. Emily also represented the seller, Leroy Schecter, in

chine and rope-climbing, like back in

his purchase of the Rothschild Mansion on the Upper East

my army days in South Africa. I was in the

Side for $25 million. I pulled some comps together and

army for two years. There was six months

helped with the negotiation.

of basic training, which was brutal. I was

93 Worth St., which Core is marketing

5:00 P.M. If I have my girls, I’m heading home to be with

living in the bush, crazy stuff.

them. I am very involved with their after-school activities, 7:30 A.M. When I stay on Long Island, I take my

so I will take Ava [who is 11] to tennis and pick up Ella [who

daughters to school. Then I go home and start checking

is 6] from dancing. I love to cook — maybe some chicken,

emails on my iPhone. There’s a 9:11 train that I usually take

or pasta, though my recipes are expanding. And Ava likes

into the city. When I’m here, I will help Brittley take her boys

to bake, so once a week after dinner, we’re baking.

to school. Then I will hop in the shower and do my emails 6:00 P.M. TO 8:00 P.M. If I’m in the city, I will go home

from the apartment. Walker Tower, which Core is marketing

and play sax for a while. I keep a tenor sax in Manhattan;

10:00 A.M. TO NOON Most mornings, I’m in the office by

my two altos are on Long Island. I keep my soprano sax here

10. Today, I had a conference call with the sales team at 93

[at Core’s headquarters, at Fifth Avenue and 16th Street]

Worth, a 92-unit condo conversion in Tribeca. Sales started

and sometimes I play at night when nobody is around. The

in early December, and more than a dozen contracts have

acoustics are really good in here. I played the sax in jazz

been signed already. Whenever you open a building, you

bands — I played at the Blue Note, the Cupping Room Café

have nearly constant engagement with the sales team and

and the Village Gate before it became a CVS. Every once in

the developer. The first two weeks are very intense. But it’s a

a while I will still go to see jazz, like at the Village Vanguard.

good problem to have. I spend about 15 to 20 percent of my time working on new business, which means meeting with

Tenor sax, one of Osher’s instruments

8:00 P.M. TO 10:00 P.M. I skip the charity events; I

new agents. We have about 70 employees, and we have two

usually just write a check. So we will have dinner in the

offices. We’re opening a third one, on the Upper East Side [at

apartment or go out to Tertulia, on Sixth Avenue, or Alta,

673 Madison Avenue], in mid-February. It will be a show-

on 10th Street. I don’t watch much TV — maybe Monday

room and will house 30 agents.

Night Football, or the Tour de France, or some cricket if it’s on. I also read a lot. I just finished “King Leopold’s Ghost,” about North Africa and the Belgian Congo. I also like GQ

NOON I don’t really do lunch meetings because they’re long, and I only have so many hours in the day. So, I usu-

Tertulia, a favorite dinner spot

and Vanity Fair. And Seth Godin’s blog, about marketing, but I don’t really focus on real estate too much.

ally eat on the run or get something in the office. A turkey sandwich, that’s usually my go-to, but I pretty much eat anything. Last Wednesday I had a meeting at noon with

10 P.M. ONWARD I’m in bed between 11:30 and 1, depend-

Michael Stern, managing partner of JDS Development

ing on how many emails I have. I like to start my day with a

Group, which is building Walker Tower, a 53-unit condo.

clean slate. By C. J. Hughes

We met at the sales office in Chelsea. The project is going Interview has been edited and condensed.

well. We’ve sold a significant amount. [StreetEasy shows Recent reading: King Leopold’s Ghost

30 January 2013 www.TheRealDeal.com

March 2012 00 PHOTOGRAPHwww.TheRealDeal.com OF OSHER FOR THE REAL DEAL BY MICHAEL TOOLAN

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Pr o f i l e

Neumannon tap

After putting together a mega-deal at the Woolworth Building, WeWork founder Adam Neumann is snapping up NYC office space

Adam Neumann at WeWork’s 175 Varick Street location

By Katherine Clarke eal estate newcomer Adam Neumann shocked industry observers last year when he acquired the rights to buy the top 25 floors of the famed Woolworth Building for $68 million. Neumann, 33, had launched the trendy shared office space provider, WeWork, only three years earlier, and his audacious play for the iconic skyscraper raised some eyebrows. “I don’t know what possessed him to think he could do it, but he did it,” said Kenneth Horn of Alchemy Properties, which Neumann has since brought in to spearhead the tower’s conversion into a residential condominium. (While Neumann was ultimately not part of the investment team, he will get a cut of the profits for finding the deal.) The Woolworth deal put Neumann on the map in New York real estate circles, but the pony-tailed Kabbalah devotee has little in common with his colleagues in the world of commercial office leasing. His WeWork spaces, better known in the tech world than the real estate world, come complete with free beer, fully stocked refrigerators, Foosball and Connect Four. WeWork’s mission, Neumann told The Real Deal, is to change workplace dynamics by bringing a diversity of creative pro-

32 January 2013 www.TheRealDeal.com

WeWork spaces come complete with free beer, fully stocked refrigerators, Foosball and Connect Four. fessionals into one space, where they can interact and collaborate. Making smart real estate plays, of course, is crucial to advancing that cause. To that end, WeWork has been busy expanding its portfolio: The company has long-term leases on some 218,000 square feet of New York office space, and in November, it teamed up with Boston-based investment firm AEW Capital Management to purchase the leasehold on a 103,000-square-foot office building at 175 Varick Street in Tribeca for $33.5 million. “We are changing the way people work,” Neumann said. “It just happens to be that we need space to do it in.”

Hatching an idea The Tel Aviv–born Neumann, the son of two doctors, moved stateside in 2001, following a stint as a navy officer in the Israeli military. After arriving in New York, Neumann enrolled at Baruch College to study towards an undergraduate degree in business. Joking around with friends during

a night out spawned his first big business idea: Krawlers, a brand of baby clothing with padded knees to protect crawling infants. Despite being childless and unmarried, Neumann thought the idea had potential. When he woke up the next morning, he set about registering a trademark for Krawlers. With the help of a professor at Baruch, Neumann secured a deal with a Chinese manufacturer to produce the product. Then, in 2006, he partnered with children’s clothing designer Suzan Lazar to create the brand Egg Baby, which is now carried by retailers such as Neiman Marcus, Nordstrom, Bloomingdale’s and Saks. (Neumann has largely taken a backseat to Lazar in recent years as WeWork has taken off.) Neumann displayed similar persistence with his first real estate foray in 2008, when he and two friends, Miguel McKelvey and Gil Haklay, struck a deal with infamous Brooklyn landlord Joshua Guttman. (Guttman’s Greenpoint Terminal Market burned down under mysteri-

ous circumstances in 2006.) At that time, Egg Baby and McKelvey’s architecture firm were both tenants at Guttman’s office building at 68 Jay Street in Dumbo. Neumann and McKelvey noticed that the building was partially vacant, which sparked an idea for a shared space concept. Thanks to badgering from Neumann, an initially reluctant Guttman agreed to let them try it out in one of his buildings, 147 Water Street. “Adam has an endless faith in his ability to convince people to do things he wants them to do,” McKelvey said of his longtime friend. With Guttman’s help, Neumann and McKelvey launched a new business, which they dubbed Green Desk, investing just $5,000 each. They rented the space from Guttman with flexible terms, then sublet individual cubicles, and groups of cubicles, to tenants. Neumann and his business partners managed the day-today operations, while the profits were split down the middle with Guttman.

www.TheRealDeal.com January 2011 25 PHOTOGRAPH FOR THE REAL DEAL BY CHRIS MARTIN

Pr o f i l e The concept took off. “We had most of the first floor preleased before we even finished construction” on the space, McKelvey recalled. The space was soon fully occupied, and Neumann and McKelvey decided to strike out on their own. Guttman did not respond to a request for comment, but McKelvey said Guttman bought them out of Green Desk in 2009 and has since expanded the business into more of his Brooklyn buildings. With a proven concept and “a few million” in their pockets from the sale of Green Desk, the duo went on to launch WeWork.

instance, if a fashion company requires a new website, a freelance computer programmer or website designer can be called in from across the hall. Neumann said he got the idea for WeWork from his involvement in the celebrity-friendly Kabbalah Centre. “I noticed that in the Kabbalah community, people were really helping each

plowed most of its earnings back into the company, investing in rapid growth and capital expenditures. That’s made the company an aggressive player on the real estate scene. “While we sacrifice profitability on a daily basis, we’re actually seeding real profitability that will come in the future,” Neumann said.

Kabbalah-inspired offices On a Tuesday last month, TRD toured WeWork’s 103,000-square-foot location at 175 Varick Street with Neumann, who stopped periodically to greet tenants and make sure the keg had not run dry. (Beer is available for free to WeWork tenants at all times.) One floor of 175 Varick houses tech professionals from companies like Reddit.com, as well as a Foosball table and a vintage arcade game. A few floors down, architects and design professionals occupy a sleek, contemporary allwhite space. And on yet another floor, Neumann is in the process of launching a new program for filmmakers in collaboration with his wife, Rebekah Paltrow, an actress and cousin of Gwyneth Paltrow. (The pair, who married four years ago, met in college and have a 16-month old daughter.) Companies who take space at a WeWork location are not technically tenants. They pay a monthly membership fee, ranging from less than $100 a month for a virtual office to around $2,600 a month for a private, six-person space. WeWork now has more than 3,000 members, and current tenants include TED, the not-for-profit conference company, Lego and a division of American Express. In addition to 175 Varick, WeWork has locations at 154 Grand Street, 349 Fifth Avenue, One Little West 12th Street and 261 Madison Avenue, as well as in San Francisco and Los Angeles, one of which the company owns. Kegs and arcade games are not WeWork’s only non-traditional office amenities. WeWork is well-known for its parties and events. Last summer, the company organized a trip for tenants to the Adirondack Mountains, where it took over a children’s summer camp at Raquette Lake for a three-day party and professional conference. While the events are pricey — the summer camp cost the company around $200,000 — Neumann says they’re worth it in order to attract the best and the brightest to WeWork spaces. WeWork also encourages connection-making between its members. For

28 March 2012 www.TheRealDeal.com

Kenneth Horn of Alchemy Properties, which is converting the top 25 floors of the Woolworth Building to residential condos

This summer, WeWork signed on to rent the entire 56,000-square-foot building at 54 West 40th Street.

The Woolworth Building

other,” he said. “I wanted to translate that into business.” WeWork has accepted upwards of $20 million in investment from wealthy individuals since it launched, Neumann said, though its owners and staff still hold more than 70 percent of the equity in the enterprise. Investors include Joel Schreiber, owner of Manhattan real estate investment firm Waterbridge Capital; Sam Ben-Avraham, owner of the New York–based Atrium clothing boutique; and Neumann’s longtime business partner, Marc Schimmel — a real estate scion, the reported former boyfriend of Madonna and a well-known Kabbalah devotee. Neumann said WeWork so far has

One Little West 12th Street

Property plays WeWork is now leasing space from wellknown landlords such as Neil Bender, head of the $1 billion Manhattan real estate portfolio amassed by the late William Gottlieb, and the Sapir Organization. And this summer, WeWork signed on to rent the entire 56,000-square-foot building at 54 West 40th Street. The location, which is adjacent to Bryant Park, is currently under construction; it’s being built out before tenants can move in. The firm, which now has 80 employees, is showing no signs of slowing its property-acquisition binge. Neumann said WeWork plans to rent an additional 1 million square feet nationally in 2013, including 600,000 to 700,000

square feet in New York. Two deals — one in Midtown for 90,000 square feet and one near the Woolworth Building for 103,000 square feet — are already underway, he said, though he declined to provide exact locations until the deals close. WeWork’s involvement in real estate extends beyond office leasing. Whenever possible, the company partners with investors to purchase its locations, Neumann said, adding that it’s also getting into development. Indeed, WeWork is in talks with the city to build a 250,000-square-foot WeWork location at the Brooklyn Navy Yards. That project could get underway as early as this spring, though Neumann declined to provide further details. By far his highest-profile deal, however, involved the Woolworth Building at 233 Broadway. Neumann first became interested in the building in early 2012, when Waterbridge’s Schreiber invited him to check it out as a potential WeWork location. Despite his lack of development experience, Neumann immediately saw the building’s potential as a residential conversion and approached owners Steven Witkoff and Ruby Schron with an offer to buy it. Neumann was “brazen in how he came in,” Horn said. His boldness paid off. The trio shook hands on a deal valued at $68 million. Once Schimmel came on board to provide some initial capital, a contract was signed. As a development newbie, Neumann knew he wouldn’t be able to convert the building to residential condos alone. So four months later, he and Schimmel reached a deal with Alchemy: Horn’s company would provide debt and equity for the project in exchange for the majority interest in the deal. While Schimmel is part of the investment group that eventually bought the property, Neumann is not. Instead, he will be compensated with a significant percentage of the project’s eventual profits. What made the real estate industry sit up and take notice, Horn said, was Neumann’s knack for deal-making. It’s a credit to those deal-making skills that Neumann will receive a large share of the profits, Horn said. And according to Neumann, Witkoff and Schron have since received offers for more than $10 million higher than the $68 million closing price it settled on with Alchemy. Indeed, at a panel event last month, Witkoff (who did not respond to a request for comment) admitted he may have sold too low, and stuck to the agreed-upon price only because he’d shaken Neumann’s hand in good faith. Neumann is “a bulldog,” Horn said. “He’s the kind of guy who sets his mind on something and moves forward on it.” TRD

www.TheRealDeal.com January 2013 33

REGULATING REAL ESTATE

On deductions, the polls are mixed Public opinion unclear on housing tax benefits

BY KENNETH HARNEY n the congressional and White House negotiations on tax reform — including the mortgage interest and property tax deductions — who has the crucial political advantage of counting documented public opinion on their side? Is it the real estate and building lobbies who argue that maintaining long-standing federal tax benefits are essential, given housing’s key role in job creation, household wealth and the fact that real estate is still in a fragile state coming out of the recession and mortgage bust? Or is it the “cut the debt” proponents and economists who see mortgage write-offs as unnecessary, costly and heavily tilted to favor upper-income owners, especially along the East and West coasts? In debates on tough issues like these, advocates invariably point

gies Corp. and released last month, found that 41 percent of respondents favor reducing the deductions for all homeowners, no matter their income, and another 21 percent favor limits on taxpayers earning more than $250,000 a year. Just 31 percent favored retaining the current system, which allows write-offs on up to $1.1 million in mortgage and home equity debt on primary and secondary homes. The same survey found roughly similar opinions on the property tax deduction: 42 percent of respondents said they favor limiting it for all owners, 19 percent support reducing it for high-income households, and 31 percent favor no change in the system. How to interpret these results? One way is to conclude that despite the housing industry’s claims to the contrary, there appears to be noteworthy public opinion support for reducing current mort-

Polling results suggest voters are more willing to cut tax breaks for upper-income folks but are reluctant to impose reductions on others. to public opinion surveys that show members of Congress where their constituents stand, and implicitly how they should vote. That process was well underway on Capitol Hill as the tense debt, tax and budget negotiations headed toward the “fiscal cliff ” deadline last month. But the polls can be confusing. On the one hand, a new survey by National Journal, a publication widely read on Capitol Hill, found larger numbers of Americans willing to limit both the mortgage interest and property tax write-offs than housing proponents suggest. The poll of 1,001 adults, jointly sponsored by United Technolo-

gage interest and property tax benefits, especially for taxpayers with the highest incomes. But hold on here. The National Journal doesn’t have the only poll on the subject. Earlier this year, the National Association of Home Builders commissioned a survey of 1,500 likely voters by a bipartisan pair of pollsters — Republican-leaning Public Opinion Strategies and Democratic-leaning Lake Research Partners. That survey found that 73 percent of respondents were either strongly or moderately opposed to eliminating the mortgage interest deduction and 62 percent opposed any reduction. The same poll found

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that a much slimmer majority — 54 percent — opposed new mortgage deduction limits on households earning $250,000 or more. Wait. There’s still another new poll to add to the mix. On Dec. 13, the Pew Research Center released a national sampling of 1,503 adults. It found that although a majority of Americans favor limits on tax write-offs in general, and 69 percent favor raising tax rates for households earning $250,000 and up, only 41 percent support cutting back on mortgage interest deductions. Fifty-two percent said they are opposed. Among Democrats, 45 percent favored limitations. Among Republicans, just 35 percent were willing to support cutbacks. So what to make of these conflicting results? Jerry Howard, CEO of the National Association of Home Builders, argued in an interview that multiple public opinion polls — the National Journal’s new survey notwithstanding — consistently have shown that a majority of Americans are opposed to limiting mortgage interest and other deductions. “There’s no question,” he said, and the politicians on Capitol Hill should give heavy weight to the public’s views on the subject. Which views — and which polls — they ultimately side with is still up in the air. But if you had to bet on the matter, you might consider this: President Obama’s position for years has been to limit housing and other deductions for wealthier taxpayers while leaving writeoffs intact for everybody else. That tracks fairly well with polling results that suggest voters are more willing to cut tax breaks for upper-income folks but are reluctant to impose reductions on others. Doing so would trigger battles with housing proponents, who’d call in every political chip at their disposal on Capitol Hill. But if compromises are needed to get to a debt reduction deal — and they will be — it just might be the way it all ends up. Kenneth Harney is a syndicated real estate columnist.

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GOVERNMENT BRIEFS Massive Hudson Yards project breaks ground In a ceremony attended by Mayor Michael Bloomberg and City Council Speaker Christine Quinn, the Related Companies and Oxford Property Group last month broke ground on the first building at the massive Hudson Yards development. The project, a 1.7 millionsquare-foot, 47-story office The Hudson Yards groundbreaking ceremony tower, will be the future home of luxury retailer Coach and is slated for completion by 2015. The 26-acre Hudson Yards site will ultimately include 13 million square feet of retail, hotel, residential, office and park space. Work on a larger tower north of the Coach building could start next year, Crain’s reported.

Federal Housing Administration facing bailout According to a study released last month, the Federal Housing Administration’s failure to tighten borrowing requirements after the 2008 financial crisis may have caused it to make risky loans that could require a taxpayer bailout. An analysis of 2.4 million FHA-insured loans by former Fannie Mae chief credit officer Edward Pinto suggests that a pattern of risky lending by the agency lasted into 2010, more than two years after the housing downturn had erupted into a global crisis, CBS News reported. In November, an independent audit of the agency showed that the FHA faces a shortfall of $16.3 billion, significantly larger than expected. That could force the agency to seek taxpayer funding for the first time in its 78-year history. Last month at a hearing of the Senate Banking Committee, lawmakers pressed HUD secretary Shaun Donovan Housing and Urban Development Secretary Shaun Donovan to take steps to shore up the federal agency, Businessweek reported. When asked whether the FHA will need a taxpayer bailout next year, Donovan responded: “I’m not going to assign a probability at this point. Obviously I’m highly concerned.”

City distributes $250,000 in funding to BIDs In a so-called “BID Challenge,” the city gave some $250,000 in grants to seven neighborhood Business Improvement Districts, the New York Daily News reported last month. The grants are intended to help BIDs to focus on a single important change in their areas. Recipients included the Third Avenue BID in the Bronx, which received $20,000 for research to help convince area landlords to renovate commercial properties. A BID in Queens also secured $50,000 in grants for architectural improvement programs in Jackson Heights and Elmhurst. Efforts will focus on renovating historic buildings along the 82nd Street retail corridor.

Sandy victims to get priority for vacant apartments In an effort to ease housing shortages in the wake of Hurricane Sandy, landlords and government officials reached a deal last month to give storm victims first crack at some 2,500 privately owned New York City apartments, the Wall Street Journal reported. Participating landlords include the Brodsky Organization and Two Trees Management, which offered up units at its Mercedes House development. The website Urban Edge will post the listings for these units, which will be available on Mercedes House a first-come, first-serve basis. Meanwhile, storm victims complained last month that Mayor Michael Bloomberg’s NYC Rapid Repairs program — which offers free services to repair damaged homes — is not moving quickly enough, the Associated Press reported. Over 10,000 affected homeowners have signed up for the program since its November launch, but only 400 projects have been completed. Compiled by Zachary Kussin

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Dpay oes it to Philanthropy

Real Estate

give?

What NYC donors get for their donations: A look at philanthropy’s close ties with deal-making

By Hayley Kaplan

“ There’s no question there is a benefit to being involved [in philanthropy]

iving to charity may be personally satisfying, but that’s not the

where you get to meet people in the business community in a setting that’s

only reason why real estate bigwigs do it. In many cases, philan-

not a sale or business environment,” said Peter Riguardi, Jones Lang LaSalle’s

thropy benefits the donor just as much as the recipient. Indeed,

tri-state president. Riguardi said he’s created connections through charities

in many cases writing a check with a lot of zeros not only helps

and boards that have resulted in business relationships and real estate deals,

the cause at hand, but can also grease the wheels for a future real estate deal.

but he declined to give specific details. Working these connections does take some finesse,

In addition, sources said one of the main reasons

however, since deal-making at charity events is some-

many top real estate executives sit on the boards

thing of a subtle art, where a seed is planted to be fol-

of high-profile cultural, education and healthcare

lowed up later.

institutions is that they get to hobnob with other

“If you’re involved in these charities for that sole

influential players in the business world (see relat-

purpose,” Riguardi warned, “it’s not going to work for

ed story on page 40). The galas and charity events

you.”

held by the elite institutions allow real estate pros

Last month, moguls and non-moguls alike rushed

to mingle with influential private equity execu-

to make final tax-exempt donations to their favorite

tives, hedge funders, political officials and other

charities. For example, Boston Properties CEO Mort

deal-makers in an informal setting.

Zuckerman pledged $200 million to Columbia Uni-

For example, former Citigroup chairman Sanford Weill and Brown Harris Stevens agent Kyle Blackmon were both on

versity to fund a neuroscience research institute in what was the biggest donation by a New York real estate player in 2012.

Carnegie Hall’s board when Blackmon brokered the $88 million sale of

In this issue, The Real Deal examined some of the biggest donors from the

Weill’s 15 Central Park West penthouse in 2011. (Weill, who donated the

New York City real estate world — including developers Larry Silverstein, How-

proceeds of the sale to charity, is still chairman of Carnegie’s board, while

ard Milstein, Stephen Ross and the Blackstone Group’s Jonathan Gray — to see

Blackmon is no longer a member.)

what they’re giving and what, if anything, they get in return for their generosity.

Board

game

here’s an unspoken expectation that sitting on distinguished arts, education and health boards in New York City requires giving generous donations. “There’s a cliché in the field — you’re supposed to give, or get off the board,” said Stacy Palmer, editor of the Chroni-

00 January 2013 www.TheRealDeal.com

cle of Philanthropy, which tracks charitable giving. “Some people on boards aren’t rich, so there’s the expectation that you’re either a generous donor [or bringing in donations].” Enter wealthy real estate executives. Daniel Brodsky, president of the Brodsky Organization, made headlines in

May 2011 when he was elected chairman of the board of the Metropolitan Museum of Art. One of the most elite organizations in the country, the Met had nearly $3 billion in assets in 2010, the most recent year that data is available for. Brodsky, who also serves on the boards of the New York City Ballet and New York

University, has been a trustee at the Met since 2001. Brodsky’s position puts him in contact with influential city figures like ex officio trustees Mayor Michael Bloomberg, City Council Speaker Christine Quinn, Comptroller John Liu and real estate execs like William Rudin.

www.TheRealDeal.com January 2013 37

Philanthropy

The NYC

Real Estate

real estate players who gave big in

2012

Donor

Recipient

Gift Amount

Notes

Mortimer Zuckerman (Boston Properties)

Columbia University

$200 million

The $200 million pledge will endow Columbia’s Mind Brain Behavior Institue for neuroscience research. The institute will be renamed the Mortimer B. Zuckerman Mind Brain Institute.

Jonathan Gray (Blackstone Group)

University of Pennsylvania

$25 million

The $25 million donation by Gray and his wife, Mindy, will go toward the creation of a center that researches genes linked to the development of breast and ovarian cancer. The center will be called the Basser Research Center after Mindy’s sister, Faith Bassar, who died of ovarian cancer.

Gary Sumers (Blackstone Group)

Washington University

$12 million

Sumers and his wife, Rachel, donated $12 million to his alma mater to expand the university’s athletic complex and to create a recreational center for the university.

Larry Silverstein (Silverstein Properties)

NYU School of Medicine; Hunter College

$10.2 million

A $5.2 million donation to the NYU School of Medicine will endow a scholarship fund, while a $5 million donation to Hunter College will establish a new component of the university’s library.

Richard LeFrak (LeFrak Organization)

American Museum of Natural History

$10 million

The Richard S. and Karen LeFrak Charitable Foundation contribution will enable students and summer campers to gain free admission to the museum.

Sam Zell (Equity International)

Museum of Contemporary Art Chicago

$10 million

The Zell Family Foundation donated $10 million to the Museum of Contemporary Art Chicago, which will create the Zell Fund for Artistic Excellence.

Howard Milstein (Milstein Properties)

New York Public Library

$8 million

The donation will be used to construct additional book storage space at the library.

Bernard Spitzer (Urbana Properties)

Public Theater

$4 million

The Bernard and Anne Spitzer Charitable Trust donated $4 million to the Public Theater’s capital campaign to provide free Shakespeare in the Park performances.

Stephen Ross (Related Companies)

Miami Art Museum

$1 million

Ross, who owns the Miami Dolphins, donated $1 million to the Miami Art Museum’s annual campaign.

Source: The Chronicle of Philanthropy, information released by recipients and TRD research. Chart does not include anonymous donations or contributions that were not publicly tracked.

Since Brodsky’s firm is actively marketing several residential projects in Manhattan, and is planning an expansion into Brooklyn, extracurricular ties to the current mayor and a possible future mayor (both Quinn and Liu are expected to run to replace Bloomberg) can’t hurt. If nothing else, it’s always helpful for developers to come into contact with wealthy potential buyers for their projects. Brodsky declined to comment for this story, but he has a building going up at 135 East 79th Street where units will trade for up to $20 million. One of his fellow Met board members is billionaire oil executive David Koch, who gave $60 million to the Met this past year for the renovation of the Museum’s Fifth Avenue plaza and fountains. Of course, much of the information about who is donating how much isn’t always shared publicly. “[There’s] so much giving from our industry that people don’t know about. Clearly a part of our tradition is quiet giving,” said Steven Spinola, president of the Real Estate Board of New York. “A lot of contributions [are] made that are anonymous [or] quietly made but there’s no big fanfare.” Stephen Ross, the founder of the Related Companies, echoed that point. “[You] wouldn’t know what I’ve given to Lincoln Center or the hospital or anything like that” is how he put it. In fact, the main publicly reported donation Ross gave this past year was $1 million to the Miami Art Museum’s annual campaign, according to the Chronicle of

638 January 2013 www.TheRealDeal.com

Philanthropy. Along with the Miami Dolphins, which he owns, and Related, Ross also donated $500,000 in November to the Mayor’s Fund to Advance New York for Hurricane Sandy relief efforts. However, it’s possible (and likely) that he made additional contributions to the boards he sits on. A source told TRD that Ross gives approximately $10 million annually to the variety of boards he serves on. And, he has been known to go well beyond that. For example, in 2004, he famously donated $100 million to his alma mater, the University of Michigan’s business school. (The school was aptly renamed the Stephen M. Ross School of Business at the University of Michigan.) Through the various boards he’s on — Lincoln Center, New York-Presbyterian Hospital, the Guggenheim Foundation, the New York Chapter of the Juvenile Diabetes Research Foundation International, the World Resources Institute and the Jackie Robinson Foundation — Ross serves with a host of other heavy hitters. They range from Carlyle Group co-founder David Rubenstein (at Lincoln Center) to Weill, Koch and former AIG CEO Hank Greenberg (at New York-Presbyterian Hospital) to media mogul Steven Forbes and Property Group Partners’ Jeffrey Sussman (at the Jackie Robinson Foundation). Meanwhile, Arthur Mirante II, principal and tri-state president at Avison Young, sits on some seven boards in the city, including that of the Alvin Ailey Dance Foundation and the National Jewish Center for Immunology and Respiratory Medicine.

Left: Boston Properties’ Mort Zuckerman gave $200 million to Columbia University last month. Right: The Blackstone Group’s Jonathan Gray gave $25 million to the University of Pennsylvania to create a cancer research center.

Left: Developer Larry Silverstein donated a combined $10.2 million to NYU and Hunter College. Right: The Related Companies’ Stephen Ross gave $1 million to the Miami Art Museum.

He said he’s “absolutely” reaped the benefits of sitting on boards. But, like Riguardi, he said, “if you do it for that reason, I really don’t believe it’s good business.”

Mirante described the business connections he’s made as “accidental” and said being involved in these charities is “a deeply personal thing.”

www.TheRealDeal.com January 2013 00

Philanthropy “I don’t like to play games. You get more rewards than you give [through charity work.] If [connections are] your motivation, then you’ll be disappointed,” Mirante told TRD. “I’ve been very lucky,” he added. “I’ve made lifelong friends that I’ve met on different boards in working with different nonprofits that have been very successful in their careers that have given me business, and others haven’t, and that’s okay. [It’s] icing on the cake.”

P ersonal

ties

f course, donating money (up to a certain amount, anyway) can be written

tions to specific causes. For example, Gray, Blackstone’s global head of real estate, and his wife, Mindy, donated $25 million to the University of Pennsylvania, their alma mater, in May to establish the Basser Research Center. The center (which was named after Mindy’s late sister, Faith Basser, who died of ovarian cancer) focuses on research and prevention of certain genetic cancers. “This is very personal to us,” Gray told TRD. “We want to make a difference to families who have this.” Gray said he and his wife did their due diligence to find a facility they thought would be right for the center.

Real Estate

enough to help,” said Sumers, who sits on the school’s board. Sumers denied that there was a business benefit to sitting on a board far outside of New York, but noted that the school “gave me a great education [and] a great start in life.” Stephen Schwarzman, chairman of the Blackstone Group, didn’t give a public donation in 2012, but donated $100 million in 2008 to the New York Public Library, where he’s a board member. The library has since renamed its main Fifth Avenue building after him. For his part, Silverstein — who generally declined to discuss his charitable do-

her business relationships. Besides Silverstein Properties, Corcoran Sunshine also represents Rudin Management. “I think it’s always a great opportunity to get to know people you work with in the business community outside of a predominantly business-oriented atmosphere,” Mack said. “Many of my clients are on the board of NYU, including Larry [Silverstein]. I had a great professional and personal relationship [with them] prior to joining the board, but I do think it … helps solidify those existing relationships [and] exposes you to different sides of them.” Mack — who is also on the committee for the Stephen D. Hassenfeld Children’s Cen-

“I think people know that you’re giving and part of the community and people respect that. It doesn’t hurt you.” Stephen Ross, Related Companies

Left: Corcoran Sunshine President Kelly Kennedy Mack sits on NYU’s board, where several of her clients are also board members. Right: Avison Young’s Arthur Mirante II sits on seven boards in the city, including the Alvin Ailey Dance Foundation.

Left: Jones Lang LaSalle Tri-State President Peter Riguardi warns against sitting on nonprofits boards simply to make business connections. Right: Developer Richard LeFrak’s foundation gave $10 million to the American Museum of Natural History.

off as a tax deduction. However, in recent weeks that’s become controversial given the national debate over the so-called fiscal cliff — the automatic tax increases and spending cuts that were set to kick in at the end of 2012 if Congress didn’t act. (At press time, elected officials and lobbyists were still feverishly trying to hammer out a deal.) Indeed, charities began lobbying in Washington last month out of fear that tax deductions on charitable contributions would be cut as Congress looked for ways to increase revenue to deal with the fiscal cliff. Depending on one’s tax bracket, up to 35 percent of a charitable donation can be written off. But while making big donations does come with tax benefits, many of the biggest donations from real estate pros last year seemed to be driven by personal connec-

“It came down to a handful of places,” he told TRD. “We thought Penn was the best choice given the work they were already doing in this area.” In the city, Gray is chairman of the board of Harlem Village Academics. He said he and Mindy are involved in other organizations, but have never given a donation this large before. Meanwhile, Gary Sumers — Gray’s colleague at Blackstone and senior managing director of the real estate group — donated $12 million in October to his alma mater, Washington University in St. Louis, to expand the school’s athletic complex and create a recreational center. “I think when you take on the responsibility of being a member of a board of trustees, along with that goes an understanding of the needs for capital, if one’s lucky

PHOTOGRAPH OF MACK FOR THE REAL DEAL BY CHRIS MARTIN; PHOTOGRAPH OF RIGUARDI BY MICHAEL TOOLAN 00 January 2013 www.TheRealDeal.com

nations — donated $5 million to his wife Klara’s alma mater, Hunter College, last spring as a surprise for her when she retired as chairwoman of Hunter College Foundation’s board of trustees after 11 years. The developer told TRD that he organized the donation without his wife’s knowledge, then showed up at her last board meeting as chair — she will stay on as a board member — to present it to her. “We surprised her completely,” Silverstein said. The donation will go towards establishing a new component of the Hunter Library. Silverstein also gave $5.2 million to New York University School of Medicine, which will create a scholarship fund. (Silverstein and two of his kids went to NYU as undergraduates.) He also serves on the board of NYU alongside his daughter, Lisa, senior vice president of Silverstein Properties; Brodsky; Kelly Kennedy Mack, president of Corcoran Sunshine Marketing Group; Rudin; developer Sheldon Solow; Leonard Boxer, chairman of Stroock & Stroock & Lavan’s real estate practice; and hedge fund billionaire John Paulson. And he does business with some of his fellow board members. For example, Corcoran Sunshine represents Silverstein Properties’ Four Seasons Private Residences New York located at 30 Park Place. Construction on the building was suspended during the downturn, but is expected to start this year, according to a Silverstein spokesman. “You constantly find yourself involved in various civic charitable functions with other people with whom you do business,” Silverstein said. “New Yorkers are a very involved group of people. … Certainly a large component of those [people] involved are in the real estate industry.” Mack said that although she’s never met a client through her nonprofit work, interacting socially with clients has improved

ter, which treats childhood cancers, and the Penn Institute for Urban Research advisory board — said she gets “a sense of great emotional pleasure and satisfaction” from seeing the nonprofit work impact the community. Silverstein agreed. “The benefits clearly are self-gratification, joy, happiness and a feeling of well-being for those who desperately need the help,” Silverstein said. “I find [philanthropy] extraordinarily satisfying. I have to believe everybody has the same feeling.”

S tatus

boost

n addition to the high-profile connections that running in New York’s charitable circles bring, charitable donations usually come with a boost in social status, too. For example, tickets to sought-after black tie galas, invitations to social events, a general increase in visibility and, of course, helping family and friends through connections all come with the territory. “Sure, there’s a social aspect,” Silverstein said, noting that philanthropy does “feed the ego” at times. “Being on these boards is [also] an extremely stimulating experience, intellectually and otherwise.” Riguardi — who is on the board for the Regional Plan Association, American Friends of Rabin Medical Center (based in Israel) and his alma mater, Iona College in New Rochelle, N.Y. — said his position often allows him to help friends and family. “If someone gets a certain type of medical issue, I’ve been able to connect them,” Riguardi said. “It’s always a pleasure to use one’s position in the industry to feel like you’re helping other people,” he added. Still, there’s a certain amount of exposure that accompanies making large donations and sitting on boards. “I think people know that you’re giving and part of the community and people respect that,” Ross said. “It doesn’t hurt you.” TRD

www.TheRealDeal.com January 2013 39

Philanthropy

New York-Presbyterian Hospital

he board of trustees at New York-Presbyterian Hospital, one of the city’s most venerable medical institutions, is studded with real estate players. Jerry Speyer, head of the development company Tishman Speyer, is a vice chair of the board along with Frank Bennack, the CEO of Hearst Corp., the publishing company and anchor tenant at the Hearst Tower at 300 West 57th Street — a building developed by Tishman Speyer. Additional trustees include Related Companies Chairman Stephen Ross and President Bruce Beal; Connie Milstein, co-founder of Ogden CAP Properties and a member of the Milstein real estate family; developer Peter Kalikow of H.J. Kalikow & Co.; Leonard Wilf of New Jersey–based Garden Homes (which owns Manhattan’s Skyline Developers); and Sanford Weill, the former chairman of Citigroup, who famously sold his penthouse at 15 Central Park West for $88 million. (The hospital’s affiliated medical school, the Weill Cornell Medical College, is named after him, and he is also the chair of Carnegie Hall’s board of trustees. Weill’s broker on the penthouse deal, Kyle Blackmon of Brown Harris Stevens, was a volunteer for Carnegie Hall at the time of the sale.) Brenda Neubauer Straus, a longtime broker at Sotheby’s International Realty, is also a member of the hospital’s board.

Weill Cornell Medical College

Where NYC real estate an By Leigh Kamping-Carder here’s no question that charity is about giving back. But in the upper echelons of New York’s business elite, involvement in philanthropic organizations also gives the city’s movers and shakers a chance to form social relationships that could lead to business deals (see related story on page 37). So what kind of deals get done in the lobby of Lincoln Center and the galleries

Metropolitan Opera

Metropolitan Museum of Art

Daniel Brodsky

Milstein family

Guggenheim Museum Richard and Karen LeFrak Museum of Modern Art

Stephen Ross

he Milstein clan operates several family foundations, which together control tens of millions of dollars in charitable wealth. Howard Milstein — whose father, Paul, co-founded Milstein Properties with his brother, Seymour — is on the board of the Weill Cornell Medical College, as well as the National September 11 Memorial Museum. His wife, Abby, an attorney, is a trustee of the New York Public Library. And his mother, Irma, is a trustee of the Natural History Museum. Meanwhile, Seymour’s wife, Vivian, is a managing director of the Metropolitan Opera. Her daughter Connie is a trustee of NYU and New York-Presbyterian, and her son Philip is a trustee of Columbia University and Lincoln Center.

T New York Philharmonic

he New York Philharmonic, one of the oldest orchestras in the world, has an impressive number of real estate bigwigs on its board of directors. In addition to Larry Silverstein, they include Joel Picket, the chairman and CEO of Gotham Organization, and Karen LeFrak, a philanthropist and wife of LeFrak Organization head Richard LeFrak. Also on the board is Susan Rose, wife of Rose Associates partner Elihu Rose. Rose Associates recently sold the Madison Belvedere, a 48-story rental property at 10 East 29th Street, for a reported $300 million. The buyer was an undisclosed client of Invesco, an Atlanta-based investment management firm; Invesco CEO C. Robert Henrikson is also a member of the New York Philharmonic board. Other board members include Benjamin Harris, president of the Gramercy Capital Corp. real estate investment trust, and H. Frederick Krimendahl II, chairman of the real estate fund manager Petrus Partners.

40 January 2013 www.TheRealDeal.com

Rea

The char in

he chairman of Related, one of the city’s most prolific developers, is also a common fixture on the boards of New York’s most powerful nonprofits. In addition to being involved at Lincoln Center and New York-Presbyterian, Ross is a trustee of the Guggenheim Museum.

New York Public Library

Tisch family

Rose family

ike the Milsteins, the Rose family is deeply involved in both philanthropy and real estate. Family patriarch Frederick Rose was a benefactor and board member at Lincoln Center, the New York Public Library, Carnegie Hall and other organizations until his death in 1999. His heirs are continuing the tradition: His wife, Sandra, is a trustee of the library. His son, Adam, a co-president of Rose Associates, is on the board of managers at the New York Botanical Garden. Another son, Jonathan, the founder of Jonathan Rose Cos., is on the board of the American Museum of Natural History. Elihu Rose, Frederick’s brother, also sits on the board of the Natural History museum, as well as Lincoln Center and the Park Avenue Armory. Elihu’s wife, Susan, sits on the board of Carnegie Hall and the New York Philharmonic.

Real Estate

arity web ropy in

Lincoln Center

he board of classical music hub Lincoln Center is headed by Jerry Speyer’s wife, Katherine Farley. Also on the board is Steven Kandarian, the CEO of Metropolitan Life Insurance Co. The two companies were on either side of one of the biggest real estate deals in New York’s history, when Tishman Speyer in 2006 paid MetLife $5.4 billion for the Stuyvesant Town-Peter Cooper Village rental complex. The deal famously went south for Tishman Speyer, which was forced to give up control of the 11,000-unit property after defaulting on the mortgage in 2010. Additional Lincoln Center board members include Laurie Tisch, a member of the well-known New York family that owns the Loews hotel brand; Related’s Steve Ross; Peter Malkin of Malkin Holdings; and real estate scion Philip Milstein, a principal at Ogden CAP.

te and philanthropy meet of the Guggenheim? To suss that out, The Real Deal examined the leadership ranks of more than two dozen of the city’s most prominent nonprofits — including arts organizations, academic institutions, hospitals and conservancy groups — and compiled a list of the real estate heavyweights and their spouses who are involved. Below is the complex web of connections between some of the major players.

Carnegie Hall

UJA-Federation of New York

Jerry Speyer

n addition to his involvement with New York-Presbyterian, the Tishman Speyer head became chairman of the board of the Museum of Modern Art in 2007. Speyer is also on the board of the Municipal Arts Society, along with developer Kent Swig and David Levinson, head of development firm L&L Holdings.

Central Park Conservancy

Society of Memorial Sloan-Kettering Cancer Center

William Mack

New York University

Larry Silverstein

he octogenarian founder of Silverstein Properties sits on several prominent boards in the city. Besides the Philharmonic and NYU, he is a board member of the UJA-Federation of New York, where fellow board members include real estate attorney Edward Mermelstein; developer Joseph Moinian, who has called Silverstein his mentor; and William Mack, the chairman of AREA Property Partners and Mack-Cali Realty Corp.

Leonard Wilf

American Museum of Natural History

he Central Park Conservancy, the 32-year-old nonprofit entrusted with managing the city’s most vaunted green space, received an unprecedented $100 million donation this year from John Paulson, who also sits on the conservancy’s board, along with a bevy of real estate heavyweights. Those bigwigs include Related CEO Jeff Blau; Manhattan Borough President Scott Stringer; Eric Rudin, the executive vice president of Rudin Management; Robert Lieber, the city’s former deputy mayor of economic development; Jane Bayard, an executive vice president at Warburg Realty; and Gordon Davis, a real estate attorney who worked on the rebuilding of the World Trade Center and the renovation of Lincoln Center. Of course, Stringer has a hand in the approval process for numerous Manhattan developments; in November 2011, he gave his conditional support for the Rudins’ St. Vincent’s project.

William Rudin

YU’s board of trustees — culled from the school’s roster of alumni — is a cross section of New York’s real estate power set. The board is heavy on developers, including Larry Silverstein, Sheldon Solow, Daniel Brodsky, William Rudin of Rudin Management and Leonard Wilf. The board also includes financiers, including John Paulson, whose investment firm, Paulson & Co., is an owner of the real estate conglomerate Realogy. NYU’s trustees also include Connie Milstein and Daniel Tisch of the Loews hotel family. Leonard Boxer, chair of the real estate department at law firm Stroock & Stroock & Lavan, is an associate trustee. Kelly Kennedy Mack, the president of Corcoran Sunshine Marketing Group, sits on NYU’s board of trustees, alongside the developers of some of the new condo projects her firm is marketing. For example, Silverstein Properties tapped Corcoran Sunshine to handle sales at the upcoming Four Seasons Private Residences at 30 Park Place. Her firm is also preparing to market Rudin’s conversion of the St. Vincent’s Hospital in the West Village.

YMCA of Greater New York

T Robert Lieber

he board of directors at the YMCA of Greater New York, which manages the 160-year-old organization’s activities in the city, is sprinkled with politicos and behind-the-scenes real estate players. Mayor Michael Bloomberg’s girlfriend, Diana Taylor, a managing director at the investment and advisory firm Wolfensohn & Co., is the board’s chair. Robert Lieber, a vice chair, is now an executive at Andrew Farkas’s Island Capital Group, but during his stint as deputy mayor, he worked closely on the Hudson Yards redevelopment with Related’s Jay Cross, who is also a YMCA board member. Also on the board is noted real estate attorney Jonathan Mechanic of Fried Frank Harris Shriver & Jacobson, who has worked with a veritable Who’s Who of the industry. Notably, he represented luxury retailer Coach in its deal to become Related’s anchor tenant at the first Hudson Yards office tower and also lobbied the city on behalf of Forest City Ratner, in connection with the Atlantic Yards project. Other board members include Avison Young principal Martin Cottingham and Randy Mastro, head of litigation at law firm Gibson Dunn & Crutcher.

www.TheRealDeal.com January 2013 41

“Lights,camera... sale!” Meet New York City’s top real estate listings photographers BAyphoto Andrew Klappholz by Evan Joseph (left) of Derek Jeter’s former Trump World Tower penthouse

A photo taken by Michael Weinstein (left) at 828 Fifth Avenue

By Andrew Klappholz n recent years, a new niche industry has exploded within the real estate industry: listing photography. With the advent of digital photography and growing international interest in New York City real estate, more and more brokers have turned to professionals to shoot their listings rather than taking the photos themselves. Photographer Michael Weinstein, who has shot real estate listings for 16 years, recalled being worried that digital photos would ruin his business. Instead, he said, they’ve benefitted him in ways he never could have foreseen: Now that digital images can easily be viewed on the web, buyers come from Russia and China to purchase homes in New York based solely on his photographs. “Photography has become more important in terms of the international market,” Weinstein said. “I feel my work now has become more valuable than ever.” Whether it’s a Park Avenue penthouse or a Downtown studio, brokers said, listing photographs can make — or break — a deal. Most brokers “are visual people,” said

42 January 2013 www.TheRealDeal.com

Emily Beare, managing director and associate broker at the brokerage Core. “We’ll look at the pictures, then look at the floor plan and then look at the description. So the photography has to be enticing.” Beare said she usually tries to get photographers Richard Caplan or Nico Arellano to shoot her higher-end listings, believing that their work helps generate sales. Agents said they will pay a premium — often out of their own pockets — for the right photographer. Most city real estate brokerages maintain a list of approved photographers, and a marketing budget that agents can tap into when hiring from that list. But many brokers said they will often seek out their favorites, even if they’re not on the list or cost extra money. Here’s a look at some of the most sought-after real estate photographers in New York.

Evan Joseph Many top brokers said when they have a seven- or eight-figure listing, they seek out Evan Joseph.

Richard Caplan. Below, a house photo shot by Caplan

An interior at 210 West 18th Street, shot by Nico Arellano (left)

Joseph, who is one of around 10 approved photographers at Douglas Elliman, did the photography for the CitySpire penthouse currently listed by Elliman’s Raphael De Niro for $100 million; in fact, Joseph said he does all of De Niro’s listings priced above $10 million. He also shot the photos for Elliman broker Dolly Lenz’s $95 million listing at the Sherry-Netherland, a $75 million duplex at Trump Place at 240 Riverside Boulevard and a $65 million mansion in Alpine, N.J., listed by Elliman’s Oren Alexander. Joseph said he also frequently works with Carrie Chiang of the Corcoran Group, and recently shot her listing for Derek Jeter’s penthouse, which sold for $15.5 million in October. “Evan is the best. He’s amazing,” said Camilla Papale, Elliman’s chief marketing officer. “The quality is so high.” That’s important, she noted, because “the better the image, the better the space is represented.” Joseph began shooting real estate listings during the Dot-com era of the 1990s, when he began taking photos for some early real

estate websites. He quickly mastered the craft of interior photography for marketing purposes, he said. When shooting a listing, he said, “I want people to feel like, ‘Wow, I have got to live there,’ not just, ‘Oh, that’s a nice space.’” In recent years, though, Joseph has expanded into lifestyle photography for artsy magazines. He has also co-authored the photography books “New York City at Night” and “New York Then and Now.” Listings now comprise about a quarter of Joseph’s overall business, and he has a business partner, Travis Dubreuil, who helps him maintain his crowded schedule. He declined to discuss his pricing, but said he’s proud that so many leaders in the industry keep coming back to him. “I work hard to cultivate these relationships,” he said.

Nico Arellano Photographer Nico Arellano has earned a reputation among brokers for his unique photo-processing style: He shoots an inteContinued on page 103

www.TheRealDeal.com March 2012 00

BEFORE YOU SELECT A REAL ESTATE LAW FIRM CONSIDER ASKING THESE QUESTIONS Q: What is the purpose of the real estate department? Is it to help “you” (the client) grow and expand your business (including coming up with innovative ideas and making critical business connections) – or is its sole purpose to produce legal documents in return for fees? Q: How much turnover has there been among associates and partners in the real estate department in the past five years (including through the Great Recession)? Q: What “results” has the real estate department had recently (i.e., during the down-turn in real estate did the documents the law firm produced hold up strongly and safely)? Q: Do the partners work as a team or is the lawyer you have met essentially a solo practitioner practicing under the brand name of the law firm he/she works in? At Duval & Stachenfeld, we have a roughly 45-lawyer real estate department (one of the largest in New York City). Despite our size, we work as an integrated team and therefore all real estate partners share a single goal of providing outstanding service to all of our clients. In addition to drafting great legal documents, we differentiate ourselves by making the true focus of our efforts the building and expanding of our clients’ businesses. One aspect of this is that we have made ourselves very “connected” in the real estate world. So, for example, in addition to providing great legal service, we locate operating and financial partners for our clients in order to foster deal flow. Finally, at Duval & Stachenfeld, our reason to exist is that we genuinely care about our clients, our attorneys and staff. This is not just because lawyers bill hours and clients pay money, but because these people matter to us. This is the core of our “hedgehog principle” and what inspires us to come to work every day. We think this is the reason our turnover is so low – because we lawyers actually like each other and enjoy working together. We think it is also one of the main reasons our clients stay with us – they like the feeling that their lawyers care about them and are looking out for them.

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Pr o f i l e

A ‘Swift’takeover

Elliman’s number-one broker on her rapid rise to prominence

Joan Swift in the penthouse at 419 Broome Street. Currently “raw space,” it’s on the market for $19.5 million.

By Katherine Clarke hen Joan Swift was 20, she made the first of many abrupt career changes. She’d just secured a spot in a Ph.D. program for psychoanalysis at Manhattan’s Postgraduate Center for Mental Health when she headed to California for a vacation. At a friend’s beach club in Carmel, the petite, charismatic brunette met legendary actor Clint Eastwood. She abruptly decided to stay in California, taking a job working in Eastwood’s office. Swift’s parents were horrified that she had abandoned her Ph.D. plans, but Swift (née Schorrman) was enticed by the beauty of the area and the glamour of Hollywood. “I met all of Clint’s friends,” Swift recalled. “I hung out with him and Merv Griffin — the crème de la crème of the Hollywood set who used to come to Carmel.” The about-face was the first of many changes of heart for Swift, who bounced around from one career to another before trying her hand at Manhattan real estate in 2005. But this may be the one that sticks: Now Douglas Elliman’s top-ranked residential broker, Swift has surprised industry insiders with her rapid rise to prominence.

44 January 2013 www.TheRealDeal.com

“Everyone was like, ‘who’s she? Where did she come from?’ She was quietly doing these multi-million-dollar deals, one after the other, and knocking them out of the park.’” Alfred Renna, Douglas Elliman “I was searching for a field that I would love,” Swift told The Real Deal. “This is it.” Swift was awarded the title of Elliman’s top individual broker by commission for 2011, after quietly selling a slew of multimillion-dollar properties together worth over $70 million, including financier David Matlin’s $25 million Park Avenue apartment. Her selling streak continued in 2012: In September, Swift represented the buyer of actor Kiefer Sutherland’s $17.5 million townhouse at 763 Greenwich Street in the West Village. And just a few months ago, Swift found a buyer for the apartment at 965 Fifth Avenue where powerbroker Linda Stein was murdered in 2007. Her buyer purchased that unit along with two other apartments at the Fifth Avenue tower for a total of $17.9 million, according to public records. Elliman President Dottie Herman said when her firm, which is Manhattan’s larg-

est brokerage, announces its top 2012 agents at an awards ceremony in February, Swift is likely to be ranked among the top 10. Colleagues said the same taste for glamour and adventure that attracted Swift to Carmel has helped her do deals with some of the city’s wealthiest New York executives. “I remember trying to get her started with small properties,” said Alfred Renna, Swift’s manager at Elliman. “From the beginning, she said, ‘No, I’m not working with studio buyers. I’m going for the big stuff.’ That’s what she set her mind to doing, and that’s what she did.”

The big leagues Swift, the daughter of an attorney, was born and raised in Forest Hills, Queens. She moved into Manhattan when she was 18 to study psychiatric social work, but her interest in the field had already

begun to wane by the time she was accepted into the Ph.D. program at the Postgraduate Center for Mental Health. Working for Eastwood was something new and exciting, she said. But after two and a half years, she got restless again. She moved back to New York and took a job at British Airways, organizing itineraries for travelers making long trips. She made sure to take advantage of employee benefits: Swift took 17 trips to Paris in one year. She also traveled extensively around Europe, discovering a love for Italy and France. That love of travel continues today: Swift owns homes in Florida, the Hamptons and St. Barts. Still, her stint at British Airways was also brief: Swift’s attention shifted again when she married prominent investment banker Richard Swift. The couple settled into an apartment at the exclusive co-op 1155 Park Avenue, and their two children, now 18 and 22, attended

www.TheRealDeal.com January 2011 25 PHOTOGRAPH FOR THE REAL DEAL BY CHRIS MARTIN

Pr o f i l e the exclusive Dalton school. (The couple are now divorced, and Swift declined to talk about her ex-husband.) Swift got her first taste of real estate in the early 1990s, after the death of her parents, when she took over managing her father’s small portfolio of residential rental units in Manhattan. Then, in 2005, she began her career as a broker at the Corcoran Group, where she was mentored by Daniella Schlisser, a top producer and associate broker. Swift’s first Corcoran deal was a $425,000 transaction at 345 East 91st Street. “There was a lot of client chasing, and it was disheartening at times,” said Schlisser, who is now a good friend of Swift’s. But the newbie broker reacted to disappointment with a sense of humor that reminded Schlisser of the famously wacky comedian Lucille Ball. Swift has “very much a Lucille Ball attitude and posture,” Schlisser said. “She’s the most entertaining, most colorful person I know.” Two years later, Swift moved on to Elliman, working out of the 575 Madison Avenue office. By that time, she was tired of the low end of the market. “I wanted to get into the big leagues,” she said. “Who wouldn’t want to work on the big listings?” At the time, Renna was skeptical of that approach. “I thought it was a mistake for her not to take small referrals, because she had no business at first,” he said. “She was the only person I ever worked with who said, ‘no thank you. I’m not working with that level of business.’ ” Instead, Swift offered to run open houses for other agents, on the condition that she could represent any house-hunters who arrived without brokers. It was slow going at first, but Swift did indeed start doing deals with high-end buyers. Then she began to acquire her own listings, as friends in her Upper East Side social circle began to recommend her to others. “I needed to prove myself,” Swift said, noting that she’s gotten several clients through Dalton. She’s also sold units in her building, 1155 Park Avenue. Herman noted that Swift’s longtime Manhattan connections — including charity work with high-profile organizations like the Make-A-Wish Foundation and the Memorial Sloan-Kettering Cancer Center — have helped her establish herself in real estate. “Her kids went to school here,” Herman said. “She knows a lot of people.” Swift’s first big break came in 2010, when she represented the seller of a 25-footwide limestone carriage house at 178 East 73rd Street, following a referral from a friend. The home sold for $13 million. While Swift declined to discuss the identities of any of her clients for this story, public records show the sellers of the property were clinical psychologist Valerie

28 March 2012 www.TheRealDeal.com

Swift is listing the penthouse at 419 Broome Street as a co-exclusive with the Corcoran Group.

Swift once worked for Clint Eastwood before launching her career in real estate.

The exclusive co-op 1155 Park Avenue, where Swift has sold apartments

Swift found a buyer for the apartment at 965 Fifth Avenue, where powerbroker Linda Stein was murdered in 2007. The purchaser acquired that unit and two others in the building for $17.9 million.

Rozen and her husband, attorney Michael Rozen. In early 2011, Swift represented the Rozens in their purchase of a $14.25 million townhouse at 14 East 95th Street. That deal was followed in June 2010 by a $7.1 million transaction for a penthouse at 62 Beach Street in Tribeca. In the fall of 2011, financier David Matlin, co-founder of private equity firm MatlinPatterson Global Advisers, was referred to Swift. At the time, he was trying to sell his full fourth-floor pad at 625 Park Avenue and was on the hunt for a Downtown apartment. She found him a penthouse at 419 Broome Street, which he bought for $17.8 million. He then sold his 7,500-square-foot private Park Avenue

residence, which Swift listed as a co-exclusive with Warburg Realty’s Robert Schulman, for $25 million. Swift is now listing the Broome Street apartment, which is currently unrenovated “raw space,” as a co-exclusive with the Corcoran Group for $19.5 million.

Under the radar Despite her successes, Swift has operated somewhat under the radar. When she was named Elliman’s top broker of the year, a number of top residential brokers were caught by surprise, though they knew Swift had completed some large closings during the year. “Everyone was like, ‘who’s she? Where

did she come from?” Renna remembered. “She was quietly doing these multi-million-dollar deals, one after the other, and knocking them out of the park. Boom, the awards came, and she was number one.” Unlike some star brokers, Swift maintains a purposefully low profile, sources said. That can be an advantage in the world of pricey co-ops, where Swift does many of her deals. “She doesn’t try to make headlines, she just does the work,” said Herman. “In the co-op world, people know who’s good and who’s not. A lot of times they don’t want someone whose name is all over the press.” In person, however, Swift isn’t so quiet; brokers pointed to her Lucille Ball–esque charisma as a reason for her success in real estate. Elliman agent Fredrik Eklund, who also stars on the reality show “Million Dollar Listing New York,” said Swift is “like a magnet,” he said. “Everyone gets smitten with her. That goes a long way.” Core’s Michael Graves agreed. “Sometimes you negotiate with someone and it just gets very stiff,” said Graves, who recently co-brokered a deal with Swift at 166 Duane Street. “Joan’s a blast. She would always laugh at all of my bad jokes. The whole time we were just having fun.” Swift herself attributed some of her success to interpersonal skills she developed while studying psychology. For example, she recalls telling a drug-addicted mother that she couldn’t take her child home. The woman “started coming at me when I told her,” Swift said. “I thought she was going to kill me. She started screaming. Instead of screaming back, I spoke very quietly. I did the opposite of what she did. I actually calmed her down.” These negotiation skills, Renna said, may indeed be part of the reason for Swift’s success. “She understands people and human behavior really well,” he said. “Before she commences a negotiation or responds to an offer, she thinks it through strategically.” In her personal life, Swift said she loves to frequent Downtown hotspots, like Morandi on Waverly Place, where she can regularly be found sipping on a glass of red wine. The exercise fiend — Swift does spinning and attends Barry’s Bootcamp — and self-confessed sun-worshipper said she is currently single. Finding a great guy can be as difficult as finding a great apartment, she said. “I’m so picky. I’m the pickiest person around,” she said. “I’ll admit to being shallow. I need handsome, brains, wit and kindness. That combination is difficult to find.” When it comes to real estate, however, Swift seems to have found the right combination of elements to secure her place among the city’s top brokers. “She made her way right into that club,” Renna said, “and she’s staying.” TRD

www.TheRealDeal.com January 2013 45

ARCHITECTURE REVIEW

JA M E S G A R D N E R

Cutting corners

ome years back, when the formidable One Bryant Park was just a mock-up in the offices of the architectural firm of Cook + Fox, I wrote a somewhat dismissive assessment of it that I have subsequently come to regret. Indeed, once built, the Bank of America Tower, as it’s also called, turned out to be far better than I had expected. For that reason I understand the perils of judging a building when it exists only in renderings. There’s an impulse for renderings to promise too much; 49 out of 50 buildings look better as renderings than they do in reality. One would hope that the reverse were true at Seven Bryant Park, which will soon rise opposite the southwest corner of the park, just as One Bryant Park stands opposite the northwest corner. To judge from its renderings, this new building will not, by any means, disgrace the neighborhood, but I doubt that it will add much to it either. That is to say that it is good enough, but one would have hoped for something far better for New York. The 470,000-square-foot office tower — which is being developed by international real estate firm Hines and designed by Henry Cobb of Pei Cobb Freed & Partners — will rise 28 stories. It will include outdoor terraces on the 10th and 17th floors. The building’s generally Modernist aesthetic is defined by a curtain wall whose vertical ascent is interrupted on each floor by horizontal bands that serve to qualify the sense of height. The building rises from the street to the 10th-floor terrace, which is formed by a setback in the rest of the building. The most obviously striking element of the design is a tilted chamfer, or scooped out incision, at the corner of 40th Street and Sixth Avenue. That incision narrows as it reaches that terrace, at which point it meets, at the spring of the setback, an equal and opposite motif that begins as a narrow point and expands as it rises. The structure bears a glancing resemblance to two other recent office buildings also designed by Pei Cobb Freed: the Tour EDF in the Défense section of Paris and the recently completed Hyatt Center in Chicago, which won the “Outstanding Building of the Year” award for 2012, bestowed by the Building Owners and Managers Association. Both of those towers recall the chamfered corner on 40th Street, which is doubtless supposed to be the iconic element of Pei Cobb Freed’s design.

46 January 2013 www.TheRealDeal.com

Regrettably, those two buildings turned out far better than I suspect will be the case at Seven Bryant Park. The excellence of their manufacturing distinguishes the Chicago and Paris buildings, but they are also marked by the evocative

Pei Cobb Freed’s Seven Bryant Park will probably not achieve design renown, but it could be worse

sors, but also because of the messy way in which the chamfered corner struggles to accommodate the setback. Unlike the graceful, sensitive legato of Pei Cobb Freed’s other buildings, there is simply too much going on at that corner.

Rendering of Seven Bryant Park. Insets: top, architect Henry Cobb of Pei Cobb Freed & Partners; bottom, a rendering of the lobby

curvature of their parabolic curtain walls. Though Seven Bryant Park is also clad in a curtain wall, the irregular angularity of its shape is far less pleasing. The problem seems to be the chamfered corner. Unlike the earlier buildings, which rise in an uninterrupted ascent and have smaller, less aggressively treated corners, the corners of the new structure look like they will be far more emphatic and far less subtle. That’s not only because the tower will be twice the size of its predeces-

To confuse matters further, the entrance is marred by a massive metallic canopy that seems to hover above the street like a stainless-steel UFO. The idea, one gathers, is that the convexity of the entrance will serve as an evocative counterpoint to the concave corners of the building. This interplay of rhythms has been a favorite device of architects since the days of Borromini, the Roman Baroque master, if not before. But it does not look promis-

ing in connection with the new building, not the least because the rhythms of the steel infill suddenly shift at the corner, due to the complexity of its curvature, to form a rather unlovely pattern. It is difficult to escape the impression that someone — and I suspect it was the developer — was so chuffed with the prospect of creating an iconic building, simply on account of that chamfered corner, that he went to immoderate lengths to make it seem all the more emphatic. This was accomplished by delineating the corner, at the level of each 21,000-square-foot floor plate, with a stripe of light that obviously comes into play only at night. I am sorry to say that the effect looks like it will be a disappointment. Indeed, it looks a little awkward and even cheap, especially since this device emphasizes what is already the awkwardness in the treatment of the chamfered corner. It is likely as well that the urgent interests of real estate have taken precedence over those of architectural aesthetics: The curvature of the corner, as we experience it from the inside out, will apparently coincide with the public area of each office space and offer thrilling views of the beautifully restored Bryant Park. Other than that tour de force, the interior — which is being designed by global architecture and design firm Gensler — appears modest and unobjectionable. The pale, polished stone of the lobby looks exactly as you might expect, while the terrace on the 10th floor affords the obvious satisfactions of air and light, without introducing any brilliant novelty into the equation. Since its founding in 1955, Pei Cobb Freed has made important contributions to the streetscape of Manhattan, from the Silver Towers on Houston Street to Kips Bay Plaza in the East 30s. Abroad, the firm has been responsible for such distinguished projects as the Pyramid of the Louvre in Paris and the Bank of China Building in Hong Kong. Given that distinguished record, it is very much to be regretted that a better design was not conceived for this important corner of Midtown. At the same time, however, Pei Cobb Freed gave New York the deplorable Jacob K. Javits Convention Center and, more recently, the somewhat dowdy Fiterman Hall for the Borough of Manhattan Community College, near the World Trade Center site. Good architecture surely can be built, and has been built, in New York City. But the forces of timidity and questionable taste win out more often than not. It is by this point an old story. And at the corner of Sixth Avenue and 40th Street, it has been told again. TRD

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AFTER

THE

STORM

Insurance rates spike for hard-hit landlords

Post-Sandy, some consider ‘going naked’ and forgoing expensive bridge coverage

not a big slice of the pie for a building with total expenses of more than $13 million in 2011. Those types of premiums gave most large office buildings Downtown at least $5 million to $10 million in flood insurance coverage, said Andrew Marks, a senior executive vice president at the New Jersey–based Bollinger Insurance, which has offices in Lower Manhattan. However, as Aon’s Tobin noted, those policies did not cover enough for some landlords. Those landlords who have hit their payout limit are put in a tough position. If they’ve used up their payout allotment or a significant portion of it — then the owner needs to purchase a so-called “reinstatement,” or an additional policy that will carry him through the remainder of his term. Unless, of course, the landlord opts to go without coverage. But reinstatement coverage is proving to be extremely expensive. Walter Harris, a vice chairman and senior managing director of the Commercial and Corporate Risk Group at the Manhattan-based Alliant Insurance Services, estimated that for a hypothetical, 1 million-square-foot office tower in the flood zone, a $150,000 annual flood insurance premium would have now spiked to $500,000 for $5 million of coverage.

BY ADAM PINCUS ore than two months after Hurricane Sandy smashed into New York City, some Lower Manhattan landlords are being forced to reach into their own pockets — in some cases deeply — to pay for repairs to their buildings. That’s because while insurance companies are footing the bill for hundreds of millions of dollars in damages to elevators, electrical systems and other infrastructure in hard-hit buildings, the carriers are not covering all

the damage. One insider estimated that about a quarter of the large commercial building landlords who were hardest hit by the storm have already maxed out their flood insurance payouts, and have to pony up the difference themselves. In some cases that can cost well over $1 million. “We have seen examples of some customers with just $5 million in flood coverage,” said Alfred Tobin, managing principal at global insurance firm Aon. For those whose losses were greater than that, “they’re out of pocket.” In addition, many of those building owners are being forced by clauses in their mortgage agreements to purchase additional flood insurance to cover them for the remainder of their annual insurance policies. As a slew of Lower Manhattan buildings have struggled to become operational in the wake of Sandy, the insurance issue has been looming over the heads of landlords. While it has been quietly discussed, and speculation has swirled over what impact Sandy will have on insurance rates, very few conclusions have been drawn so far. But what is clear is that while insurance premiums are likely to go up in the long term by a modest 10 percent to 30 percent, they are spiking much more dramatically in the short term for the hardest-hit buildings. Some Lower Manhattan owners are receiving quotes that are triple their current rates. And some of those building owners, unable or unwilling to pay the higher numbers, are forgoing flood insurance

48 January 2013 www.TheRealDeal.com

Some U.S. insurance companies are unwilling to provide the reinstated coverage, so landlords are being forced to look overseas. for the remainder of their annual terms. In general, owners in Lower Manhattan are caught in a financial squeeze, being hit not only by rising insurance payments, but also by a halt in cash flow from displaced office tenants who didn’t pay rent. In addition, while some tenants are trickling back into their buildings, others are sniffing around to see if they can break their leases (see related story on page 49) or further delay their return.

A line item Before Sandy, many landlords gave only a cursory glace at insurance payments. That’s because, relatively speaking, the payments are not a lot of money compared to a building’s larger fixed expenses, such as taxes, which can swallow 25 percent or more of revenue — or even janitorial, utilities or maintenance, which are all generally higher. But the importance of insurance will

likely increase for landlords, and not just because of damage. The Real Estate Board of New York, the city’s leading real estate trade group, is keeping an eye out for the redrawn 100-year flood boundaries that the Federal Emergency Management Agency is developing. “There will be properties now in that zone that were not before, and that will no doubt affect their insurance premiums,” said Michael Slattery, senior vice president at REBNY. Before Sandy, insurance for Downtown’s big towers was pretty straightforward. For example, 4 New York Plaza, the 1 million-square-foot tower that has been shuttered since the storm, had an annual insurance premium of $625,898 in 2011 — or about $0.59 per square foot, according to mortgage tracking firm Trepp. Insurance professionals told The Real Deal only about $150,000 of that was likely related to flood insurance. That’s

(It would cost $1 million for $10 million in coverage, he said.) While not an enormous amount compared to the millions of dollars in other expenses a landlord faces, that’s an increase of up to 560 percent, depending on the total coverage. Furthermore, many U.S. insurance companies are not willing to provide the reinstated coverage, saying they can’t afford the additional exposure, so the landlords are forced to look overseas. “They [are going] to the London [insurance] market,” when they can’t get insurance stateside, said Harris. “The London market has taken the point of view of, ‘You take our terms. If you don’t want to buy it, fine.’ ” Some landlords are willing to take the risk of not buying new insurance. “It is something a lot of people are wrestling with: Are they comfortable going naked versus do they put new coverContinued on page 98

ILLUSTRATION FOR THE REAL DEAL BY WARREN GEBERT www.TheRealDeal.com January 2011 25

After

the

Lemme out

Storm

Office tenants sniff out whether breaking leases is possible and engage in battles with landlords over when they have to start paying rent

By Adam Pincus Managing Partner Mercedes Colwin said outcome. That’s because most leases ret was something of a rite of passage it was improper to allow tenants back un- quire a tenant to be displaced for nine to for Lower Manhattan office workers 12 months (or more) before they can get til the mold was remediated. just after Hurricane Sandy hit: Alone, out of a lease, said Neil Tucker, a partner at or in small groups, they climbed dark law firm Kramer Levin Naftalis & Frankel. Battles brewing stairwells holding flashlights in order to “It is very unlikely that [a tenant] While the rent battle is currently retrieve computers and files from their ofwould have a termination right after just playing out between landlords and fices. tenants, it will almost certainly in- two months,” Tucker said. Now, with the lights back on, many In many cases, tenants are simply stuck volve their insurance companies soon office tenants are gingerly stepping back in limbo — trapped in leases that they no (see related story on page 48). into unchartered territory to reoccupy Indeed, most property owners longer want, but left without many options 100 Wall Street is technically opened, their spaces, which are not all ready for and tenants are protected by “busi- for how to proceed. In that regard, landbut not all tenants prime time. While 49 office buildings ness interruption” insurance, which lords have the upper hand because leases are back. Inset: (with 35 million square feet of space) covers them in the event of a disaster. generally provide them with more control Nicholas Bienstock, one of the heads of were closed after Sandy, all but about six But some policies exclude certain ca- when it comes to breaking leases. Savanna, which owns buildings were expected to be opened by sualties, such as a flood, said Jacob For example, one landlord, Rudin the building press time. Bart, a partner at law firm Stroock & Management, terminated all of its leases But, as The Real Deal and others have Stroock & Lavan. at 110 Wall Street, which has 38 tenants reported, some are finding unpleasant reThe unlucky landlords who do not have including investment advisory firm First alities — bad smells, mold, spotty heating flood insurance often want their tenants’ Investors and the law firm DeCorato Coand a lack of telephone or Internet service. insurance companies to pay the rent — hen Sheehan and Federico. The landlord had the right to terminate leases within In fact, many tenants that have been and that’s not coming easy. Bart said he’s representing some land- 60 days of the storm, said William Rudin, moving back are dissatisfied with what they are finding. Some (including those whose buildings have technically reopened) are sniffing around to see if they can break their leases, while others are readying for legal battles with their landlords over when they have to start paying rent again. “Most leases give the tenant William Rudin the right to stop paying rent (inset) terminated all office leases at 110 Ronald Sernau, Proskauer Rose during the restoration period. Wall Street. And the question is: When has lords who have sent letters to tenants tell- the company’s president. that restoration been completed?” said ing them their buildings are up and runRonald Sernau, a partner and co-chair“We felt it was appropriate,” Rudin told ning, even though some tenants may not TRD. man of the real estate department at law agree that the space is fully ready. firm Proskauer Rose. “We did not want to drag this out or “That, I think, is kind of a ripe dispute,” “Sometimes they want rent to start im- hold our tenants up,” he said, explaining Sernau added. mediately. The issue here is, no one size fits that he opted to terminate the leases after several building analyses revealed that it Officials at one company, all,” he said. which as of late December had At 125 Maiden Lane — a commercial would take months to restore the tower. not moved back into its space at condo building developed and managed He said he’s still looking at where the me100 Wall Street, said that based by Francis Greenburger’s Time Equities chanicals should be located. on a review of its lease they do not — about 85 percent of tenants are back in. While he suspected that most buildbelieve they are responsible for (The building, which also leases out un- ing owners are communicating effectively paying rent. sold condo units, was closed for more than with their tenants, he said those that are An executive at the company, About 85 percent of a month post-Sandy, but reopened Dec. 5.) not could suffer. “The market will determine what hapwho asked not to be identified, tenants have moved Of the tenants who have not yet moved back into 125 Maiden said, however, that the landlord, Lane. Inset: Francis back in, some had signed temporary leases pens with those properties going forward,” Savanna, was pressing the firm Greenberg, head of at other locations, and some were reluc- he said. “We all live on our reputation.” to pay even before it technically Time Equities, which tant to move back without Verizon serAt least one tenant at 110 Wall Street — owns the building opened the building last month. vice restored, according to Richard Recny, who does not have business interruption “If I am unable to access my director of asset management at Time coverage for floods — said her company space for reasons outside of my control, Equities. (Verizon’s copper cables, which was not happy with Rudin’s decision to terI am entitled to a rent rebate,” the tenant not move back into its office at 90 Broad carried phone and Internet service, were minate leases at the building. She said she claimed. Street even though the building officially destroyed in the storm. Service is not slat- thought the decision was made too soon. “It is a terrible situation. We built out A Savanna spokesperson said: “We are reopened in early December, because the ed to be restored until the second quarter, working to resolve any tenant concerns landlord, Swig Equities, admitted that an though more modern fiber optic wires will our space,” and have several years remainamicably and have worked tirelessly to air quality study had turned up mold. Swig be used.) ing on the lease, said the source, who asked move tenants back as quickly as possible.” did not respond to requests for comment While frustrated tenants at many to remain anonymous. buildings may be pining to break leasRudin said he hasn’t decided whether In another instance, a top partner at by press time. During an interview early last month, es, that seems like it will be an unlikely the law firm Gordon & Rees said it would Continued on page 100

“Most leases give the tenant the right to stop paying rent during the restoration period [after Sandy]. The question is: When has that restoration been completed?”

46 December 2012 www.TheRealDeal.com

www.TheRealDeal.com January 2011 www.TheRealDeal.com January 2013 49 25

After

the

Storm

Silver’s salve

By Adam Pincus ore than two months after Hurricane Sandy hit New York, thousands of outer-borough residents are still reeling from storm damage to their homes and businesses. And while homeowners are no doubt tapping into their own bank accounts to deal with the aftermath of the storm, elected officials in New York City and State are using government levers in an attempt to relieve some of the financial burden for them. Last month, Mayor Michael Bloomberg signed legislation extending property tax payment deadlines from Jan. 1 to April 1 for an estimated 3,000 impacted property owners. In another measure (this one requiring Albany approval), Bloomberg proposed property tax reimbursements for taxes already paid on severely damaged buildings in the current tax year. The reimbursements would be designed to more accurately reflect the current value of the properties and would average about $794 for each of the roughly 900 qualifying property owners, according to his office. Yet Assembly Speaker Sheldon Silver and 11 Democratic co-sponsors are pushing for more. This month, they plan to introduce a more costly and far-reaching plan aimed at sharply reducing assessments for heavily damaged properties, and cutting their future tax burdens until they either repair the damage or build something new on the property. The speaker’s office did not respond to several requests for comment, but when it announced the measure in November, Silver said, “Homeowners and businesses should not expect to pay taxes based on property assessments made prior to the storm.” Still, it’s unclear whether the measure, dubbed the Hurricane Sandy Assessment Relief Act, has enough support to make it out of Albany. So far, no Senate sponsors have come forward, and Governor Andrew Cuomo has not publicly taken a position. (His office did not respond to several requests for comment.) In addition, the proposal is being met with mixed reviews. While some think it’s a good idea that would provide badly needed relief to already struggling homeowners, others say it is a Band-Aid-type quick fix that needs to be more carefully thought out. Indeed, some insiders believe the legislation is unnecessary because homeowners who suffered severe damage will end up getting a break on their property taxes anyhow through appealing their property tax bill. In what might be the most controversial part of the legislation, the bill proposes reducing the assessed value of severely damaged properties to zero, which insiders say

50 January 2013 www.TheRealDeal.com

is a highly unusual move that they could not recall ever being tested. If the proposal were implemented, the property owner could hold onto the land completely tax-free until the assessments returned to normal levels. While Silver has not yet spelled out all the details of the proposal, insiders say that the assessment would undoubtedly go back up if a new building were constructed on the land. A little background: The annual assessment process begins with the city’s Department of Finance determining the market value for each property. That value is based

While elected officials have offered tax relief to homeowners in Sandy’s wake, Assembly Speaker Sheldon Silver is taking it a step further

they would undoubtedly appeal their assessment. “State law would generally [result in] a significant reduction in the value of assessment whether there was legislation or not,” he said. He said that after Sept. 11, 2001, some vacant parcels used for parking next to Ground Zero, which had been assessed at about $2.3 million before the attacks, had their assessments cut to $900, but that he could not recall, even then, seeing an assessment slashed to zero. “I have never seen the legislature bring

Left, Assembly Speaker Sheldon Silver’s proposal would bring some property owners’ tax bill down to zero. Right, 126 Beach 135th Street in Rockaway Park, which was damaged in the storm

Rockaway homes that were damaged in the storm

on similar sales, the estimated cost to replace the property or, if it’s a commercial building, the income. The property’s market value is then multiplied by a factor — currently 6 percent for single-family homes and 45 percent for commercial properties — to determine the property’s taxable value. Once that number is determined, it is multiplied by the tax rate to figure out the annual payment. Typically after a destructive event like a fire or storm, the property owner will file an appeal with the city’s Tax Commission, an independent body that reviews assessments, and receive a new, discounted tax bill based on the property’s reduced value. William Block — a former deputy commissioner for real property assessments for the Department of Finance who is now in private practice — said those who suffered serious storm damage to their homes would not be on the hook for their standard property tax bill this year anyway because

unilateral action to bring an assessment down that low — to zero,” Block said. “But on the other side, this is an extraordinary event and might require extraordinary action.” It is not clear exactly how many homeowners the law would impact. However, there were as many as 3,000 one- and two-family homes and larger residential buildings that were heavily damaged or destroyed in the storm, according to figures from the Bloomberg administration. Silver’s legislation would only cover properties in New York City. The proposal requires property owners to notify the city’s Department of Finance of the damage at their buildings within 90 days of the law’s passage and supply documentation of the damage. The city, which would need to approve the legislation by a resolution, did not respond to several requests for comment and it is not clear how much the bill

would cost in lost taxes. Duncan MacKenzie, CEO of the New York State Association of REALTORS, said he thinks it’s a good idea to accelerate the resolution of property taxes for those who have suffered damage. But he said there needs to be a clear outline of how the lost revenue to the city would be made up. “What is it going to cost and how are you going to pay for it?” said MacKenzie, whose group has not yet taken a position on the legislation. In addition, some say that the bill could spark confusion, if passed. Under typical assessment standards, a completely destroyed property still retains value because of the land that it’s on. That land generally accounts for a third — or even more — of the parcel’s total assessed value, a review of city tax records showed. For example, according to data provider PropertyShark, a heavily damaged single-family home located at 126 Beach 135th Street in Rockaway Park had an annual tax bill of about $13,449, based on a total assessed value of $73,876, which included $50,626 for the land. The city estimated the market value for the property one year ago at $1.9 million, city records revealed. Robert Marino, a Manhattan-based independent real estate consultant, said that, if passed, the proposal could be a boon for tax attorneys who would be hired to help individuals navigate the new law. Law firms typically take a 20 percent, or more, cut of any tax reduction that they achieve. Others say the legislation could be a helpful means of streamlining a bureaucratic tax assessment system for those who are suffering post-storm. “Since the assessment should reflect property values, and we are currently in an interim period where many of these properties are not marketable or functional, it appears to be a reasonable alternative,” said Jonathan Miller, CEO of real estate appraisal firm Miller Samuel. In the proposed legislation, the homeowners would proactively petition the city with evidence of the reduced value rather than appeal their tax bill after it arrived. “This sounds like a well-meaning shortcut to get assessments lowered for people very quickly,” Marino said. “But it’s sloppy.” TRD PHOTOGRAPH OF 126 BEACH FOR THE REALJanuary DEAL BY ADAM www.TheRealDeal.com 2011PINCUS 25

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The powerful Pontes Vincent Ponte of Ponte Equities, pictured at a 2011 charity event in the Hamptons

Until now, the Pontes’ lack of activity has kept them mostly out of the spotlight, with one notable exception: In the 1990s, family patriarch Angelo Ponte and his son Vincent pleaded guilty to corruption charges in connection with their waste management business. Recently, however, there’s been movement in the Ponte portfolio. In a joint venture with the Pontes, developer the Related Companies has plans to build an apartment building at 460 Washington Street, a massive site that the family has controlled since 1976, according to city records. Related officially declined to comment on the deal, but a source at the company said construction will begin early next year, though it’s unclear if the building will be a condo or rental. When completed, the new building will face Truffles Tribeca at 34 Desbrosses Street. That 15-story, 290-unit rental complex was built in 2009 by the Jack Parker Corporation on land leased to them by the Pontes. And a new hotel from prolific hotel developer Sam Chang is planned for a Ponte-owned site at 2 Renwick Street. Chang told The Real Deal that he and partner Barone Management are leasing the land from the Pontes, though he declined to comment on the terms of the deal. Construction is underway on the hotel, which will have 160 rooms when it’s completed in 2014, according to Barone’s website. Brokers said the Pontes have occasionally sold properties over the years, but this flurry of activity is the most movement they’ve seen from the family. “They just held most of their properties for years,” said Sean Turner, a broker with Stribling & Associates and a longtime neighborhood resident. “This latest wave of activity is more significant.” It’s not clear what exactly has prompted the family to make changes. Calls to Ponte Equities’ New York office at 268 West Street went unanswered, and Vincent Ponte through an intermediary declined to be interviewed. Some landlords and brokers, who asked to remain in the background so as not to jeopardize business relations with the family, speculated that patriarch Angelo Ponte, who is in his late 80s, wants to div-

BY C. J. HUGHES ew York City is known for its loud, splashy developSome of the Pontes’ notable properties ers. But quieter landlords 460 Washington Street, Related/Ponte development site often have equally valu511 Greenwich Street, the former Don Hill’s able holdings. The low-profile Ponte family, for example, started buying 34 Desbrosses Street, Truffles Tribeca site parking garages, former warehous2 Renwick Street, site of planned Sam Chang hotel es and auto shops in northwestern 39 Desbrosses Street, Ponte’s Restaurant Tribeca in the 1960s. Today, the family owns at least 30 properties in the 268 West Street, Ponte Equities’ office now-trendy area, according to public Source: New York City property records and TRD reporting records. The family’s firm, Ponte Equities, has rarely sold or developed any of its properties over vy up the family holdings before he passes away. the years and is sitting on a goldmine today, industry Others said the firm is looking for deals out of fear that experts said. capital gains taxes will climb in the next few years, which “They have just an unbelievable portfolio of prop- could reduce the proceeds from any sale. erties, but they haven’t been operated at their highest Another theory is that with Manhattan land prices at and best use, so there’s tremendous potential,” said Bob record highs, selling or developing property has become Knakal, chairman of Massey Knakal Realty Services, a an increasingly compelling option. In fact, land in Manhattan south of 96th Street is now commercial brokerage that specializes in property sales.

52 January 2013 www.TheRealDeal.com

Real estate family makes changes to longtime Tribeca holdings

selling for an average of about $382 per buildable square foot, up from $350 a square foot near the peak of the market in early 2008, according to Knakal. Since the Pontes first amassed their portfolio, land prices have “skyrocketed,” Knakal said. In particular, North Tribeca has taken off in recent years, with swanky new condo developments like the Laight House and 71 Laight Street and 429 Greenwich Street, where the five-bedroom penthouse sold last winter for $15 million, according to the listings website StreetEasy. A four-bedroom there is currently listed at $12.5 million, the website shows.

Family history In some ways, the Pontes’ empire looks much the same as it did in the 1960s. The family owns mostly industrial properties, including garages, warehouses and parking lots, but it also has a handful of small residential rental buildings. The heart of their holdings is the block bounded by West, Desbrosses, Washington and Vestry streets, where the Pontes control all but one property, records show. At 39 Desbrosses Street, Angelo Ponte opened a redawning-lined Italian restaurant in 1967. Called Ponte’s Restaurant, the eatery was Tribeca’s first dining destination, according to the eatery’s website. Other Ponte holdings include 511 Canal Street, a six-story Beaux Arts office building which previously housed the company’s headquarters. It is now home to Oscilloscope Laboratories, the film company founded by late Beastie Boy Adam Yauch, and Tribeca Lighting, which rents lights for weddings. There’s also 444-446 Greenwich Street, a row of lowslung garages between Vestry and Desbrosses, as well as the former Don Hill’s club at 511 Greenwich Street, which closed in 2011. The one-story brick building, which Ponte has owned since 1974, according to city records, is now covered with graffiti. Now that the club is closed, some brokers expect it to hit the market soon. Most of the Pontes’ properties appear well-kept, but the exception may be 480 Greenwich Street, a three-story red-brick building erected in 1819. The building has been so run-down for the past few years that the city’s Landmarks Preservation Commission, which designated it a historic property, threatened to sue the family for demolition by neglect, though a permit has recently been filed to repair it, a LPC spokesperson told TRD. Next door, the Pontes own 504 Canal, an early-1800s residential rental building with ground-floor retail. That property, too, has run afoul of Landmarks. The commission recently issued a violation against Ponte Equities for its failure to maintain the façade, the spokesperson said. That neglect has reportedly rankled some local residents, though others speak highly of the Pontes, saying they’ve treated the many artists who have lived and worked in their buildings well. “They always kept rents low,” said local landlord Jacques Capsouto, “and when they did push the artists out, they were quite gentle about it.” The Pontes haven’t just been real estate investors. In fact, V. Ponte & Sons, the name that appears on many old deeds, was once one of the largest commercial Continued on page 102

www.TheRealDeal.com January 25 PHOTOGRAPH OF PONTE BY PATRICK 2011 MCMULLAN

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The pricing puzzle I

BY KATHERINE CLARKE n a year full of eye-popping luxury listings — in the second half of 2012, four homes hit the market asking at least $90 million — pricing a New York City apartment can seem increasingly subjective. Right now, for example, a five-bedroom spread at 15 Central Park West is on the market for $95 million, even though it’s some 20 percent smaller than the $88 million penthouse in the building that set records when it sold last year. What justifies the higher price? The smaller unit has better views, listing broker Emily Beare of residential brokerage CORE recently told the Wall Street Journal. Shaun Osher, CORE’s CEO, said now more than ever, “pricing an apartment in New York City is an art, not a science. There are so many intangibles that create value.” It’s well known that New Yorkers are willing to pay more for certain basic features, like a top-notch location, a condo over a coop, or a doorman. A doorman, for example, can add up to 15 percent to an apartment’s value, industry veterans said, while condos are generally considered to be worth between 10 and 40 percent more than co-ops. But from there, things get a little more complicated. Icing-on-the-cake features like fitness centers, prewar detailing, outdoor space and show-stopping views are harder to quantify, especially since their value changes over time along with consumers’ attitudes, the economy and other factors. This month, The Real Deal asked New York City brokers and appraisers which of these extras fetch price premiums in today’s real estate market — and which ones don’t.

CENTRAL PARK VIEW

% 0 +5

54 January 2013 www.TheRealDeal.com

generally up to 10 to 15 percent more valuable than an unobstructed river view in a comparable apartment, said Neil Binder, who heads the Bellmarc Group. That preference may be due in part to legendary and controversial urban planner Robert Moses, who built the city’s highways along the waterfront. Over time, the preference for park views has become a “self-fulfilling prophecy,” Miller said, explaining that the rich flocked to park-side residences deemed more exclusive because of their limited availability. Miller noted, however, that views are among the hardest apartment features to price, since they’re so subjective.

Outdoor space OUTDOOR SPACE

% 5 +2

PREWAR

% 5 +1

Central Park views In Manhattan, Central Park views may be the single most valuable apartment amenity right now. In the right circumstances, unobstructed park views can tack an additional 50 percent onto an apartment’s purchase price, according to real estate appraiser Jonathan Miller of Miller Samuel. For example, at Extell Development’s 1,000-foot-tall new condo, One57 at 157 West 57th Street, a high-floor apartment is reportedly in contract for between $90 million and $100 million. Key to the building’s marketing are the panoramic, 360-degree views of the park and the city, which likely account for at least 50 percent of the value of the upper-floor units, Miller said. Unlike most other cities, where waterfront property is the most coveted, Central Park views are considered preferable to river views in New York, Miller said. New Yorkers “pay a premium for looking at Central Park,” he said. “In any other metro area, there’s a premium for facing the water.” An unobstructed Central Park view is

How much is that Central Park view really worth?

GYM

The method appraisers use to value outdoor space — such as a balcony, terrace or garden — has changed dramatically in recent years. In the 1980s and early 1990s, outdoor spaces were assigned a fixed dollar value based on their size, Miller explained. As such, terraces of the same size and shape were considered to have the same value, regardless of whether they were attached to a studio or a 12-room spread. But that changed in the late 1990s, when price per square foot became a popular metric for measuring apartment values. Nowadays, outdoor space is valued at 25 to 50 percent of the price per square foot of the apartment’s interior, Miller said. For example, if an apartment is worth $2,000 per square foot, the terrace might be worth $500 to $1,000 per foot. The same formula works for balconies, grassy gardens and backyards, Miller said. As a result, outdoor space is now worth more if it is attached to a larger or more impressive apartment. That makes sense, Binder said, because outdoor space is more desirable if it’s in proportion to the size of the apartment. “I don’t want a terrace with an apartment,” he quipped. “I want an apartment with a terrace.” Factors other than size also come into play when valuing outdoor space, like depth, shape and floor height, Miller said. A second-floor terrace overlooking a busy Manhattan street, for example, is likely to be less desirable than a 16th-floor terrace overlooking the park.

New construction

% +5

On average, apartments that have never been lived in fetch a price premium of 15 to 25 percent, Binder said. “There’s just a thing about fresh and new that people find compelling,” he said. Moreover, the sheer amount of marketing and advertising developers put into launching a new project helps drive up prices, Binder noted. In recent years, that premium has increased, in part due to increasing interest Continued on page 98

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Guberman’s gamble W By Candace Taylor hen Josh Guberman set out to market the house he’d just constructed at 78 Pheasant Close East in Southampton Village, he wasn’t content to hire a professional stager as most developers do. Instead, he personally stocked the 1,500-bottle wine cellar with rosé and champagne, and decorated the home’s great room with orchids and trays of wheatgrass. In fact, while staging is now standard in New York City new-construction condos, it’s rare in Hamptons spec homes, explained Susan Breitenbach, the Corcoran Group senior vice president who listed 78 Pheasant Close for $8.75 million last month. “Not a lot of the spec builders do that — they don’t stage the project,” she said. Guberman, by contrast, is “putting everything in there, not just the furniture. He’s stocking the bar. He’s hands-on in every aspect.” Guberman, a longtime New York City developer who turned his attention to the Hamptons last year, is aiming to set himself apart from other builders. Taking what he calls a “revolutionary approach” to homebuilding on the East End, he said his goal is to bring a new level of luxury to the already-exclusive Hamptons. In addition to Pheasant Close, Guberman has two other newly constructed spec homes on the market with Breitenbach: 38 Harvest Lane in Southampton Village, listed at $3.6 million, and an 18,000-square-foot mansion in Bridgehampton asking $11.995 million. For example, his houses have multiple laundry rooms, home theaters with stadium seating and Savant “smart system” technology that allows homeowners to adjust their lighting, air-conditioning and pool equipment from anywhere in the world. Guberman said he plans to start work on up to eight more East End properties this year, priced from $6 million to $20 million. He also has several upcoming projects in Manhattan — a 16- to 20-unit new condo in Tribeca and two townhouses — but said the Hamptons projects have become “a labor of love.” He faces some formidable challenges, however. The Hamptons real estate industry is notoriously close-knit and often skeptical of newcomers. “I think new is always a challenge in the Hamptons, since it’s just a closed market,” said Michael Daly, an agent with Sotheby’s International Realty in Sag Harbor. “Builders have to build relationships with

56 January 2013 www.TheRealDeal.com

the real estate community.” Meanwhile, Hamptons buyers are among the most discerning in the world. And Guberman has stiff competition from the likes of long-established builders like Jeffrey Collé, Joe Farrell and Michael Davis, Daly said. “The Hamptons have shown us time and again that it will reward you if you do something that is really well-conceived

New York City builder hits the Hamptons with a supply of extra-large spec homes

his hands, Guberman, who had vacationed in the Hamptons for years, began helping a friend build and sell a Bridgehampton spec house. When the project sold at full ask just a few weeks after it went on the market, “the bug hit me,” he said. He started buying properties in the Hamptons last summer, and decided to gut-renovate his own vacation home at 38 Harvest Lane, using it as a kind of “test

Developer Josh Guberman at 78 Pheasant Close East, a spec house he’s marketing in the Hamptons

An exterior of 78 Pheasant Close East, which went on the market last month for $8.75 million. Right, the 1,500-bottle wine cellar that Guberman personally stocked with rosé and champagne at the house.

and well-executed,” said Andrew Saunders, founder of the eponymous Hamptons brokerage. “But it brutalizes you, frankly, if you don’t do those things.” “Out here,” he added, “you can make a mistake by what side of the street you build a house on.”

The test case Guberman isn’t entirely new to building single-family houses: He had a business redeveloping suburban homes in the late ’90s. But for the past 15 years, he’s focused on developing boutique New York City condo projects, including Lux74 at 433 East 74th Street, Union Square Lofts, the Legacy on 84th Street and the Russell Court condominiums in Greenpoint. Sales at Lux74 had just finished when the real estate downturn hit, and Guberman decided to take a temporary break from developing in the city. With time on

case.” He’s since added four additional bedrooms, a movie theater and a guest house, and the property is now on the market with Breitenbach for $3.6 million. The Pheasant Close house, meanwhile, is on a 1.64-acre lot with nine bedrooms, 14 baths, a screening room, a pool and a tennis court. When she first saw the 11,000-squarefoot house, Breitenbach said, what most impressed her was the landscaping. “I was really stunned with the amount of money and the amount of detailing he did in the outside hardscape,” Breitenbach added.

Pricing problem? Some Hamptons brokers, however, said Guberman’s homes are “overbuilt,” and that the sites he’s chosen don’t warrant such large and luxurious houses. Particularly ambitious is Guberman’s

project at 94 Day Lily Lane in Bridgehampton. Asking $11.995 million, it’s among the town’s priciest listings north of Montauk Highway. When completed, the 18,000-squarefoot house — which Guberman called his “masterpiece” — will sit on five acres on a hill overlooking a nature preserve, with distant ocean views. “It’s a pretty unique spot,” Daly said. Still, some brokers said the home’s pricing and positioning isn’t appropriate for its location north of the highway, which is considered less desirable than the oceanfront homes to the south. The Bridgehampton project is “too big for the area — it’s just not typical in that spot,” said one broker who requested anonymity. Guberman “wants to get really big money for it. I’m not sure if it’s going to be achievable at this price point.” Guberman, undaunted, said he’s heard such criticism before. In the early 2000s, when he began developing Russell Court in then-emerging Greenpoint, “we were told that it was ridiculous to pour so much money into forward-thinking design,” he recalled, but the project “sold quickly and set the pricing standard for the community.” Guberman said he’s continuing the same “no dollar spared” mentality with his Hamptons homes. At Day Lily Lane, he said he’s spent “well over a million dollars” on the exterior landscaping, pool and tennis court. Collé, who has been a builder in the Hamptons for more than 30 years, said he wishes Guberman well. But he warned of the difficulty faced by newcomers building on the East End. “If you’ve never built out here and you don’t know who the best sub-[contractors] are and where to buy the best materials and you don’t know the lay of the land, you’re going to be vulnerable,” said Collé, who has not yet seen Guberman’s homes. One factor working in Guberman’s favor, however, is while Hamptons sales activity has picked up recently, there’s a shortage of newly constructed Hamptons homes due to a slowdown in spec building after the financial crisis. “Building stopped, for all intents and purposes, after 2007,” Daly said. “If you want new, there’s not a lot to choose from right now.” And Guberman does have industry connections and relationships due to his New York City development experience, Daly noted. “I think the fact that he has a track record in New York helps him,” Daly said. “But people are going to want to look and check out the product themselves.” TRD

www.TheRealDeal.com 2011 25 PHOTOGRAPHSJanuary BY KARL RIVENBURGH

In 2012, Meridian proudly advised on financing for the following transactions:

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The Year

Real Estate

‘The Year of the Penthouse’ In the top 10 deals of 2012, residential sales broke records

By Katherine Clarke own Residential founder Andrew Heiberger recently dubbed 2012 the “Year of the Penthouse,” due to the recent stream of record-breaking deals. The year started with the now-famous $88 million sale of a penthouse at 15 Central Park West, and before 2012 was done, city-wide records for condo, co-op and townhouse sales had all been broken — some more than once. In 2012, there were 10 sales over $30 million, compared to six in 2011, according to data from the listings website StreetEasy. And at $88 million, 2012’s most expensive

sale dwarfs 2011’s $48 million record and 2007’s $50 million top deal. Brokers attributed 2012’s jaw-dropping prices to limited inventory and a seemingly insatiable appetite for high-end product. Shaun Osher, CEO of the residential brokerage CORE, said mammoth sales such as the one at 15 Central Park West are seen as less and less of an anomaly. “They’re not run-of-the-mill, but they’re definitely becoming a lot more frequent,” Osher said. Read on for a closer look at the priciest closed sales of 2012 as of press time.

15 Central Park West, PH20 Closing date: Feb. 15, 2012 Price: $88 million n a deal that set the stage for a year of mammoth residential sales, former Citigroup Chairman and CEO Sanford Weill closed on the sale of his 15 Central Park West apartment in February for a record-breaking $88 million. The closing price, almost double the $43.7 million Weill paid for the apartment in 2007, made international headlines and sent shockwaves through the residential market for the rest of the year. The deal was the priciest residential property ever sold in the city, a record previously held by J. Christopher Flowers’ 2006 purchase of the Harkness Mansion at 4 East 75th Street. The 6,744-square-foot penthouse spread was purchased by Russian billionaire Dmitry Rybolovlev, a philanthropist and the owner of AS Monaco Football Club. Kyle Blackmon of Brown Harris Stevens represented the seller in the deal, while BHS’s Maria Torresy brought the buyer. BHS declined to comment on the deal. It was first reported that Rybolovlev bought the apartment for his equestrian daughter Ekaterina. But his wife, Elena, with whom he was engaged in a tumultuous divorce battle at the time, later alleged in a lawsuit that the billionaire had purchased the apartment in his daughter’s name in order to hide assets in anticipation of their divorce proceedings. Weill has reportedly since moved to a sixth-floor apartment in the same building. Rybolovlev’s record, however, is already set to be broken, with the expected closing of a $95 million deal reportedly in contract at Extell Development’s One57 at 157 West 57th Street. Closings at One57 are set to commence in the summer of 2013.

Kyle Blackmon of Brown Harris Stevens, who listed two of 2012’s priciest sales 50 Central Park South #30/31, which sold for $70 million to Steve Wynn

Serena Boardman of Sotheby’s 740 Park Avenue #12/13, which closed for $52.5 million in May

50 Central Park South, #30/31 Closing date: June 11, 2012

Price: $70 million

n June, casino mogul Steve Wynn paid $70 million for a duplex at the Ritz-Carlton at 50 Central Park South listed by Blackmon of Brown Harris Stevens. Wynn bought the apartment from Christopher Jeffries, the founding partner of Millennium Partners, which had developed the condominium portion of the 35-story hotel in 2002. Jeffries reportedly paid $22 million for the apartment upon its completion. The 10,882-square-foot duplex, on the 30th and 31st floors, previously served as the hotel’s ballroom. The upper floor has a library, media room, dining room and kitchen, while four bedrooms are on the lower floor. Serena Boardman of Sotheby’s International Realty

60 January 2013 www.TheRealDeal.com

Meredyth Smith of Sotheby’s

David Geffen paid $54 million for a duplex penthouse at 785 Fifth Avenue

represented Wynn in the deal. Neither broker responded to a request for comment. For Wynn, the purchase was the end of a long search for Manhattan digs. In late 2010, he changed his mind about his penthouse at the Plaza, flipping it for $24.4 million after owning it for just six months. Wynn, who was not available for comment, reportedly then spent close to two years touring trophy listings all over the city before settling on the Ritz spread.

785 Fifth Avenue, #PH Closing date: Nov. 8, 2012

Price: $54 million

usic industry legend David Geffen broke records in November when he paid $54 million for the duplex penthouse above his existing apartment at 785 Fifth Avenue. The seller was singer and socialite Denise Rich. The deal beat out the sale of Courtney Sale Ross’s apartment at 740 Park Avenue earlier in the year (see

PHOTOGRAPH OF BLACKMON FOR THE REALJanuary DEAL BY DEREK www.TheRealDeal.com 2013ZAHEDI 00

The Year

Real Estate

Manhattan’s top 25 residential sales for 2012 Rank

Address

Listing broker

Seller Name

Buyer Name

Sale Price

15 Central Park West, PH20 (condo)

Kyle Blackmon, BHS

The JW Revocable Trust

Property Ny 100 11 LLC

$88 million

50 Central Park South, #30/31 (condo)

Kyle Blackmon, BHS

Central Park Holding

Ny View, LLC

$70 million

785 Fifth Avenue, #PH (co-op)

Noble Black, Bonnie Pfeifer Evans, Chazz Levi, Corcoran

Denise Rich

David Geffen

$54 million

740 Park Avenue, #12/13 (co-op)

Kathy Sloane, BHS

Courtney Ross

Howard Marks

$52.5 million

5 (tie)

834 Fifth Avenue, #12B (co-op)

Katherine Bryan, Sotheby’s

Damon Mezzacappa

Anne Bass

$42 million

5 (tie)

973 Fifth Avenue (townhouse)

Paula Del Nunzio, BHS

Obe Holdings

973 Fifth LLC

$42 million

2 East 70th Street, #PH13A (co-op)

Meredyth Smith and Serena Boardman, Sotheby’s

Bessemer Trust Company, Co-Executor

Sudreau Rippe

$40.1 million

730 Park Avenue, PH (co-op)

Meredyth Smith and Serena Boardman, Sotheby’s

Joann Walker

Daniel Benton

$39 million

15 West 63rd Street, #29A (condo)

N/A

Park Laurel (Nyc) Ltd.

Park Laurel Acquisition LLC

$33.5 million

1030 Fifth Avenue, #9W (co-op)

Bonnie Chajet and Ronnie Lane, Warburg

George Blumenthal

Zachary Miller Schreiber

$31.5 million

995 Fifth Avenue, #16TH (co-op)

Nikki Field, Sotheby’s

Wb Imico Stanhope LLC

995 LLC

$27.4 million

998 Fifth Avenue, #5W (co-op)

Meredyth Smith and Serena Boardman, Sotheby’s

Bruce Fiedorek

Paul Fribourg

$27.2 million

768 Fifth Avenue, #2009 (condo)

Alexa Lambert and Elizabeth Lorenzo, Stribling

Plaza Residential Owner Lp

Plaza Penthouse LLC

$25.9 million

907 Fifth Avenue, #12W (co-op)

Mary Rutherfurd and Leslie Coleman, BHS

Ethel Griffin, Pub. Adm. Ny Cty, Temp Adm.

Robert Smith, Trustee of the Lz Trust

$25.5 million

39 East 79th Street, #89BA (co-op)

Deborah Grubman and David Dubin, Corcoran

James Goodwin

Wisteria Partners LLC

$24.5 million

834 Fifth Avenue, #3/4C (co-op)

Ann Jeffery and Mary Rutherfurd, BHS

The estate of Walter Goldstein

Ana Diez De Rivera

$24 million

15 Central Park West, #37C (condo)

Paula Del Nunzio, BHS

Gloria Lawrence

Westside Re Properties LLC

$23.35 million

907 Fifth Avenue, #8W (co-op)

Mary Rutherfurd and Leslie Coleman, BHS

Ethel Griffin, Ny Co. Pub. Admin., As Temp.

Frederick Iseman

$22.5 million

116 East 70th Street (townhouse)

Paula Del Nunzio, BHS

Copper House LLC

116 East 70 LLC

$22.4 million

26 East 73rd Street (townhouse)

Meredyth Smith and Serena Boardman, Sotheby’s

Central Park East Lp

East 73 Rd Street LLC

$21 million

32 East 64th Street, #10W (co-op)

N/A

Marcia Dunn

Stephen Meringoff

$21 million

101 West 67th Street, #PH3BC (condo)

Howard Margolis and Raphael De Niro, Douglas Elliman

Gideon Gartner

Nts Millenium, LLC

$20.75 million

988 Fifth Avenue, #9 (condo)

Marcy Grau, Stribling

Selig Zises

Timberocean LLC

$19.5 million

88 Central Park West

Kirk Henckels and Jennifer Callahan, Stribling

N.J. Nicholas, Jr.

88 Cpw Revocable Trust

$19.5 million

25 Columbus Circle, #68AF (condo)

Dolly Lenz, Douglas Elliman

Michael Murphy

Nyc Real Estate Opportunities Inc

$19.45 million

(tie)

20 (tie)

(tie)

23 (tie)

Source note: Data from StreetEasy and closed sales filed in public records by press time. Names are as they appear in public records.

below) to become the highest-priced co-op sale in the city’s history. The 12,000-square-foot, seven-bedroom apartment, which includes a full recording studio, had been listed for $65 million by the Corcoran Group’s Noble Black, Chazz Levi and Bonnie Pfeifer Evans. Before being picked up by Geffen, the spread was reportedly eyed by the prime minister of Qatar. Black declined to comment on the identity of the buyer or seller but said: “What was remarkable about the apartment was just its sheer size. The huge entertaining

44 November 2012 www.TheRealDeal.com

spaces upstairs were just fantastic.” He added: “The buyer was already very familiar with the building but liked the fact that this apartment had the high ceilings and a tremendous amount of outdoor space. He definitely had his eye on it for a while.” Geffen reportedly has no plans to combine the unit with his own apartment downstairs. The New York Post said he would likely complete an extensive renovation of Rich’s former digs before moving in and selling his other apartment. Deborah Grubman and David Dubin of Corcoran, who represented Geffen in the deal, declined to comment.

740 Park Avenue, #12/13 Closing date: May 4, 2012 Price: $52.5 million n the second priciest co-op deal of the year, billionaire investor Howard Marks, chairman of the global asset management firm Oaktree Capital, paid $52.5 million for a 30-room spread at 740 Park Avenue owned by Courtney Ross, the widow of the late Time Warner CEO Steve Ross. The eight-bedroom pad — actually a combination

Continued on page 100

www.TheRealDeal.com January 2013 61

The Year

Real Estate

The office slump

A look at the priciest building sales and biggest office leases of 2012 — amid a commercial market slowdown

2012’s priciest Manhattan building sales Rank Address

Size/type

Price

Buyer

Seller

Listing Broker

450 Lexington Avenue

910,473 sf (office)

$720.0M

RXR Realty

Istithmar World

No broker

666 Fifth Avenue

54,534 sf (retail)

$707.8M

Vornado Realty Trust

Carlyle, Kushner, Crown Acquisitions

Darcy Stacom, William Shanahan (CBRE)

Columbus Square

710 units (residential)

$630.0M

UDR and MetLife

Chetrit and Stellar Management

Douglas Harmon, Adam Spies (Eastdil)

450 West 42nd Street (MiMA)

814 units (residential)

$542.5M

TIAA-CREF

Related Companies

No broker

768 Fifth Avenue (Plaza Hotel)

n/a (condo-hotel, retail)

$450.0M

Sahara India Pariwar and Kingdom Holding

Elad Properties

Greg Rice, Salim Damji (Solid Rock Advisors)

530 Fifth Avenue

537,800 sf (office)

$390.0M

Crown Acquisitions, Murray Hill, Jamestown

Moinian Group, David Werner and Chetrit

Douglas Harmon, Adam Spies (Eastdil)

St. Regis New York

24,800 sf (retail)

$380.6M

Richemont

Crown, Goldman Properties and partners

No broker

160 Central Park South (Essex House)

518 rooms (hotel)

$362.3M

Strategic Hotels & Resorts with KSL Capital

Dubai Investment Group

Arthur Adler, Jeffrey Davis, Gilda Perez-Alvarado (JLL Hotels)

575 Lexington Avenue (Grolier Building)

743,240 sf (office)

$360.0M

Normandy and New York Life

Silverstein Properties and CalSTRS

Douglas Harmon, Adam Spies (Eastdil)

10 East 29th Street (Madison Belvedere)

404 units (residential)

$300.0M

Invesco RE

Rose Associates

Woody Heller, Will Silverman and others (Studley)

Source note: Building sales were researched in public property records and through industry sources. At 450 West 42nd Street, the buyer purchased a 70 percent stake, while at the Plaza the buyer purchased a 75 percent stake. All other purchases were for full (or nearly full) ownership. Columbus Square included properties at 801 Amsterdam and 775, 795, 805 and 808 Columbus Avenue. TRD only included sales where the buyer purchased more than 50 percent of the property.

2012’s biggest Manhattan office leases Rank Address

TENANT

square feet

tenant brokerage

landlord brokerage

terms

1515 Broadway

Viacom

1.6 million

CBRE Group

SL Green Realty

Renewal/expansion

1 New York Plaza

Morgan Stanley

1.2 million

Newmark Grubb Knight Frank

Brookfield Office Properties

Renewal

1285 Sixth Avenue

UBS

920,000

CBRE Group

Jones Lang LaSalle

Renewal/expansion

601 Lexington Avenue

Citibank

475,000

CBRE Group

Jones Lang LaSalle

Renewal

100 Church Street

NYC Law Department

373,000

CBRE Group

Newmark Grubb Knight Frank

Renewal

1 Chase Manhattan Plaza

Milbank, Tweed

372,000

Cushman & Wakefield

Newmark Grubb Knight Frank

Renewal

1745 Broadway

Random House

361,000

Cassidy Turley

SL Green Realty

Renewal

114 West 47th Street

Bank of America

346,000

Cushman & Wakefield

Durst Organization

Renewal

1 World Trade Center

U.S. General Service Administration

270,000

Studley

Durst, JRT Realty Group

New

1372 Broadway

Ross Stores

264,800

Studley

n/a

Renewal/expansion

Source note: Leasing information collected by TRD through brokerage reports, published reports and other industry sources.

By Adam Pincus he uncertain economy kept larger companies at bay in 2012 when it came to buying and leasing Manhattan office buildings. On the investment sales side, the top 10 priciest building sales of last year included only three office buildings — a weak showing compared to the year before, when there were eight. Meanwhile, there was a steep drop-off

62 January 2013 www.TheRealDeal.com

on the office-leasing front, which saw activity fall by as much as a third from 2011, preliminary data from Cassidy Turley revealed. And while there were several big lease-renewal deals — including media giant Viacom’s record-breaking renewal and expansion at 1515 Broadway — large companies shied away from committing to big, new Manhattan spaces. Highlighting that, just one of the top 10 Manhattan office deals was a new lease (as opposed to

a renewal) — a reversal of 2011 when nine of the top 10 leases were new, according to a review of data from the CoStar Group. Below is a rundown of Manhattan’s priciest building sales (as recorded in public records) for 2012 and its biggest office leases (as collected by The Real Deal through brokerage reports and other sources).

Big building sales The aggregate value of the priciest 10

Manhattan investment sales for 2012 was $4.8 billion — down from $6.0 billion in 2011, an analysis by TRD of the largest closed transactions of 2012 showed. (TRD looked at majority interest sales only.) The three office buildings that made the list were RXR Realty’s $720 million acquisition of the 910,473-square-foot 450 Lexington Avenue from Dubai investment fund Istithmar World in SepContinued on page 102

www.TheRealDeal.com January 2013 65

ON THE MOVE The Training Commitment An essential part of The Bellmarc Group’s commitment to its agents, the sales training program is acknowledged industry-wide as the best of its kind. In this interview by Olinda Turturro, Director of Recruiting for The Bellmarc Group, Neil Binder, Principal, explains the company’s training philosophy and strategy. OLINDA: Neil, why do you put so much emphasis on training new agents? NEIL: For some agents, the issue is career growth. When they achieve a degree of excellence in their performance, there is a natural inclination to say, “What’s the next step?” Other agents are searching for a means to marry their talent to a job. I create the mechanism to fulfill these goals. If you are going to train, there is no reason to do it unless you make a profit. The profit is achieving your goal of career satisfaction or finding fulfillment in your life. Making money is the byproduct. Training is important because it’s the only way to get to the goal.

OLINDA: I have heard that Bellmarc’s training is the best in New York or possibly the country. What is it about your training that makes it so special? NEIL: An agent finishing training must be able to compete. It’s not enough that you understand coops and condos and know how to put together a board packet. You have to have skills that make you competent enough to compete with salespeople who have been in the business 15 years or more. That requires that the training fulfill two fundamental criteria: confidence and technique. Confidence, so you truly believe you are entitled to success and have earned the right to substantial financial rewards; and

OLINDA: What do you think makes your training different? NEIL: I believe the sales process consists of four fundamental roles. To be a capable salesperson you must be able to perform each successfully. You might consider each role like a switch:

Neil Binder in conversation with Olinda Turturro (top), conducting a training seminar (center), sharing strategies with agents (bottom).

OLINDA: How does your training program work? What’s involved? NEIL: There are two forms of training. For AC Lawrence rental agents it consists of a series of 15 modules. Each module takes about two hours in a seminar with me. On Monday and Wednesday we go through a new module, and on Friday, we go over the material to make sure that everyone has a chance to ask questions and fully understand the material. AC Lawrence agents are normally working on their rental business during the time they also attend training seminars, so there is greater flexibility and more time to finish the program. I tell the agents that they should do their deals and earn an income first — I will be there when they are ready for me. The Bellmarc training consists of independent study and seminars with me on Selling, Negotiating and Listings Strategy. It takes about four weeks of effort to finish the Bellmarc program. It is more focused and quicker to complete since it is a full-time commitment. Most of these agents are new and not working with buyers.

THE

technique, so there is a fundamental model for each step of the selling process that is effective and detailed. Our training program performs this. I tell agents who complete the training that they are the best-prepared agents in the industry and I believe this in my heart. I ask for no money for the training; I only hope for their success so that we can share in the rewards.

BellmarcGROUP

if all the switches are on, the light bulb illuminates; however, if one switch is off, then everything stays dark. The first role is the Personality Role, in which you seek to build rapport. Rapport is not merely a conversation; rather, it is the dual exchange of information for learning and growing. The second is the Authority Role, which requires you to be concise, structured and meaningful in your communication. It is not enough to merely know the information; you must present it in an effective way. The third is the Projection Role. You must be able to empathize with the customer. Through empathy you gain insight into what the customer really wants and where you need to go to accommodate his true desires. The final role is the Mediator Role, which requires you to procure relevant and material information that creates a change in the customer’s beliefs. OLINDA: Your training seems intense and quite specific. Is it for everyone? NEIL: It’s for anyone who yearns to become a professional agent and is willing to learn. There’s no special secret — anyone can be a great agent, it’s all about having a passion to grow. I don’t want anyone to change; I want people to add to what they know and become wiser. OLINDA: It sounds as if you have a particular philosophy about how one is to succeed. Are you asking each agent to subscribe to your philosophy? NEIL: I propose ideas and hope that the agents will embrace them as part of their lives. OLINDA: Can you give me an example of a typical proposal? NEIL: I’ll give you my golden rule of selling: “All people are perfect. No one ever makes a mistake. People make information-impoverished decisions, never wrong ones.” To me, understanding this principle is the beginning of the journey to great selling.

BELLMARC RENTALS w w w.a c l a w re n c e.c o m

SALES w w w.b e ll m a rc.c o m

The Year

Real Estate

Retail records A

By Guelda Voien s tourists continued to flock to Gotham in record numbers, New York City retail saw a banner 2012: Nordstrom announced it would take 285,000 square feet of space at Extell’s under-construction One57 tower, and one of the retail condos at the base of 666 Fifth Avenue sold to Vornado for $707 billion. In the third quarter of last year alone, retail rents shot up 30 percent in the Herald Square area and 23 percent both on Upper Fifth Avenue and in Times Square, according to data from the CBRE Group. And the Lower Fifth Avenue market — the stretch from 42nd to 48th streets that has recently seen higher-end retailers replace souvenir

A behind-the-scenes look at the biggest Manhattan leases of 2012

shops — continued to burgeon, adding clothing designers Joe Fresh, Ted Baker and Aritzia to its list of increasingly up-market tenants. This month, The Real Deal looked at Manhattan’s largest new retail leases by square footage. Retailer H&M snagged two of New York City’s biggest leases — one at 589 Fifth Avenue at 48th Street, the other at the Durst Organization’s long-vacant 4 Times Square retail space. Grocery stores inked large leases, too, with Fairway securing a nearly 40,000-squarefoot Kips Bay space, and Whole Foods signing a lease for a blockfront on the Upper East Side.

4 Union Square South

Retailer: Burlington Coat Factory

Amount of space: 92,602 square feet

n April, the 92,602-square-foot Union Square South space vacated by bankrupt retailer Filene’s Basement rented to Burlington Coat Factory, a middle-market winter-wear purveyor that’s ramping up its presence in the city. According to figures from both Cushman & Wakefield and CBRE, the deal was the biggest new retail lease of 2012. Negotiations between Burlington and landlord Vornado were challenging and complex due to Filene’s bankruptcy, according to Clifford Simon of CNS Real Estate, who represented the prospective tenant. Simon said before Burlington and Vornado were able to strike a direct deal, Filene’s tried to sell the lease. “We had to patiently wait for [the lease] to not get purchased, and then once it was the right time, we struck,” Simon said. “We were the right user for the space. … We were big enough and it was a hard place to split because of the structural nature of the space. It was a fast deal.” The rent for the 15-year lease was not available. Sherri White represented Vornado in-house. Burlington Coat Factory signed another large deal later in the year on 125th Street in Harlem. The Union Square location, Burlington’s sixth in New York City, opened in September.

589 Fifth Avenue Retailer: H&M

Amount of space:

56,700 square feet

he world’s largest H&M will move to 589 Fifth Avenue at 48th Street, the firm announced in September. The 56,700-square-foot deal was the second-largest new Manhattan retail lease inked in 2012. The store will span six floors at the glass-front building owned by Western Management. The space was marketed for about a year, though at first Western was only planning to lease the first three floors as retail, according to Jedd Nero of CBRE, who represented the landlord and represented H&M in a previous lease at 42nd Street and Fifth Avenue. Cushman’s Robert Gibson and Thomas Citron represented H&M in the deal, but declined to comment for this article. Simon said Lower Fifth’s surge is partially due to H&M’s lease, which is helping the area compete with Upper Fifth — the area between 49th and 58th streets that boasts some of the highest rents in the world. “That line is quickly vanishing,” he said of the Fifth Avenue barrier. Indeed, as retailers figure out that even if they pay a premium to be on Upper Fifth, they still

64 January 2013 www.TheRealDeal.com 44 November 2012 www.TheRealDeal.com

A 92,602-square-foot Burlington Coat Factory opened in Union Square in September. It represented the largest new Manhattan retail lease in 2012.

JCPenney signed a lease for roughly 38,000 square feet of retail space at 200 Lafayette Street.

Fairway Market’s nearly 40,000-square-foot deal for a Kips Bay location was the fourth biggest new lease of 2012.

H&M signed two leases in Manhattan in 2012: one at 589 Fifth Avenue (pictured) and the other at 4 Times Square.

may end up “next to the Gap,” their interest in Lower Fifth increases, said Nero. H&M had looked at a space on Upper Fifth owned by Vornado, Nero confirmed, but negotiations had dragged on, and “time came where they needed to make some decisions,” he said. While the rent on the H&M deal was not disclosed, a third-quarter retail report from CBRE showed that Lower Fifth asking rents averaged $1,118 per square foot.

lease also includes valuable Times Square signage — two at ground level and at least two on the roof, said Tom Bow, who represented Durst in-house for the transaction. (H&M has an option to take up to four rooftop signs, but the agreement had not been finalized when TRD went to press.) The 20-year lease had an asking rent of $15 million annually, but the final taking rent was not disclosed. Gibson and Citron of Cushman also represented H&M in this lease. The ground-floor signs had a combined asking price of $5.5 million to $6 million per year, Bow said, and the rooftop signs had a $1 million per annum ask per sign. In the end, it was worth it to hold out for the right tenant, said Bow, who noted that H&M ended up taking one more floor than Express would have. “There are only a handful of [appropriate] users,” he said.

4 Times Square Retailer: H&M

Amount of space:

42,510 square feet

n 2010, when the sports bar ESPN Zone began shuttering sites around the country, this Durst Organization– owned space was left empty. Durst began marketing the space anew at the International Council of Shopping Centers conference — the mega-retail gathering in Las Vegas — in May 2011. A deal in its final stages with clothing store Express fell through this past May. And it wasn’t until October that Durst was able to finalize a lease, although ESPN Zone reportedly paid a hefty termination fee that likely gave Durst some breathing room when it came to finding the right tenant. H&M — the only retailer with two of the top five biggest Manhattan leases — ultimately stepped up. The clothing store took a 42,510-square-foot, three-level space. The

576 Second Avenue

Fairway Market space: 39,892 square feet

Retailer:

Amount of

fter months of speculation, the Fairway supermarket chain inked a lease for 39,892 square feet at 576 Second Avenue at 30th Street in June. “People have been asking for years for us to come to Midtown,” Howie Glickberg, vice chairman of

PHOTOGRAPHS OF BURLINGTON AND FAIRWAY FOR THE REAL DEAL BY DEREK ZAHEDI

The Year

Real Estate

Manhattan’s 15 biggest new retail leases of 2012 Rank

Tenant

Total SF

Address

Landlord Broker(s)

Tenant Broker(s)

Burlington Coat Factory

92,602

4 Union Square South

Sherri White (Vornado Realty Trust)

Clifford Simon (CNS Real Estate)

H&M

56,700

589 Fifth Ave.

Jedd Nero (CBRE Group)

Robert Gibson and Thomas Citron (Cushman & Wakefield)

H&M

42,510

4 Times Square

Tom Bow (Durst Organization)

Robert Gibson and Thomas Citron (Cushman & Wakefield)

Fairway Market

39,892

576 Second Ave.

David Green and Chris Schwart (Cushman & Wakefield)

Gary Alterman (RKF)

Whole Foods

38,850

1551 Third Ave.

Gary Alterman (RKF)

Chase Welles and Jacqueline Klinger (SCG Retail)

JCPenney

38,211

200 Lafayette St.

Susan Kurland (CBRE)

n/a

Express

30,000

1552 Broadway

n/a

David LaPierre (CBRE Group)

Sam Ash Music

29,688

333 West 34th St.

Jeffrey Roseman and Gregg Gropper (Newmark Grubb Knight Frank)

David Kaufman and David Amsterdam (SL Green Realty)

Complete Body & Spa

28,000

10 Hanover Square

n/a

Famous Dave’s BBQ

25,000

234 West 42nd St.

Marc Leber and Jeffrey Roseman (Newmark Grubb Knight Frank)

Andrew Pittel (Andrew A. Pittel & Co.)

Global Food International Restaurant

25,000

11 Times Square

n/a

James Emden (Colliers International)

(tie)

T.J. Maxx

22,700

2186-2190 Broadway

n/a

JPMorgan Chase

21,683

60 East 42nd St.

Jared Lack (Newmark Grubb Knight Frank)

Gene Spiegelman and Michael O’Neill (Cushman & Wakefield)

Finale

20,000

199 Bowery

n/a

Fogo de Chao

18,067

40 West 53rd St.

n/a

(tie)

Source note: Leases and square footage from Cushman & Wakefield, the CBRE Group, CoStar Group and news reports. Brokers from TRD Deal Sheet and other news reports. Only new Manhattan leases, not renewals, were included. In cases where reported figures for square footage differed, TRD deferred to CoStar and news reports.

development for Fairway, said in a statement at the time. Negotiations for the 15-year lease were not without tense moments, however, said RKF’s Gary Alterman, who represented Fairway in the transaction. The space was partially occupied by a Crunch gym, which had trouble relocating in time for Fairway to move in. Eventually, Alterman jumped in and helped Crunch negotiate for its new space on 34th Street, which he said is owned by Kamran Hakim. (Crunch did not have a broker.) The deal came together fairly easily after Crunch got its new lease figured out, he said. Unfortunately for the grocery store, the drama did not end there. While this location was not impacted nearly as badly as the chain’s Red Hook spot (which is still closed), the opening of the store was delayed by about a month by flooding and other issues related to Hurricane Sandy. The store was slated to open by press time in late December, Alterman said. Cushman’s David Green and Chris Schwart repped the landlord, Carlyle Construction, but declined to comment for this story.

Gary Alterman of RKF

Robert Gibson of Cushman & Wakefield

Susan Kurland of the CBRE Group

Jedd Nero of the CBRE Group

Tom Bow of the Durst Organization

1551 Third Avenue

Whole Foods Amount of space: 38,850 square feet Retailer:

airway isn’t the only grocery chain coming to the East Side. In October, Whole Foods announced that it would open a 38,850-square-foot store on Third Avenue in early 2014. Whole Foods will occupy an entire block front between 87th and 88th streets, on the basement, first and second levels, said Alterman, who represented the Milstein family, which owns the space. Previously

the space had been occupied by a smattering of retailers, including a paint store and a deli, he said. “They have been looking a very long time and never had the fortune to find a big enough space,” Alterman said of Whole Foods. While there are several smaller supermarkets in the area such as the Food Emporium and Grace’s, there is nothing as big as this space will be.

Thomas Citron of Cushman & Wakefield

“Suddenly a neighborhood starved for food will have [lots] of [new] grocery stores,” he added, also factoring in a new Fairway in the area, which opened in July (the lease for that Fairway was signed prior to 2012). Chase Welles and Jacqueline Klinger of SCG Retail represented the tenant. Rents in the long-term lease were not disclosed. TRD

www.TheRealDeal.com January 2013 65

The Year

Real Estate

Predicting the 2013 market As the fiscal cliff loomed over the last hours of 2012, real estate players weighed in with market forecasts

By Guelda Voien lthough the European debt crisis seems to be further from investors’ minds today than it was a year ago, fresh hurdles like the fiscal cliff standoff in Washington, prospective tax changes and a New York City mayoral election loom. And those are not the only questions that industry pros are pondering as 2013 gets underway. Also on their minds: Will the tech sector continue to prop up commercial leasing? What kinds of housing stock will move — and what will languish on the market? Where will the next wave of retail condo sales take place? And which overall sectors of the market will investors gravitate towards? This month, The Real Deal talked to New York City real estate insiders from several different sectors of the market to get their industry predictions for 2013.

Investment sales

Greater threshold for risk

hose who follow Manhattan’s commercial sales market predict that investors will shift their attention this year — and the result could be more new development projects. “Because existing assets have gotten so expensive, I think you will see investors go further out into the risk spectrum and decide it may make sense to develop or redevelop property instead of buying [existing assets],” said Dan Fasulo, managing director at Manhattan-based research firm Real Capital Analytics. “We are at the point in the [recovery] cycle where the spread between buying and building will tempt investors to build.” Indeed, when it comes to buying existing properties, challenges remain: There is too much capital for the number of buildings being sold. And, analysts say, owners are reluctant to sell because they aren’t sure where to invest their funds next. “It’s clear owners prefer owning well-located bricks to owning paper,” said Peter Hauspurg, chairman and CEO of the investment sales brokerage Eastern Consolidated. Still, as investors’ worries about inflation foment, many are scrambling to get capital

66 January 2013 www.TheRealDeal.com

into the real estate market, and to get projects started with financing at today’s low interest rates, experts said. In 2013, Hauspurg said, the most active sector for investors seeking “high-powered yields” will be condominium development, particularly in the outer boroughs — a shift from the post-Lehman years, when investors rushed to buy up multi-family properties and trophy office assets.

OFfice leasing

The tech sector question mark

hile 2012 saw deal volume plummet, industry pros say that commercial leasing could have fared far worse, given that the financial services sector — the motor behind New York City’s office market — shed jobs last year. “There is not a lot of velocity, but at the same time there has not been this great increase in vacancy” in 2012, said Eastern’s Hauspurg, adding that the much-ballyhooed technology sector has picked up the slack. But the major question mark for this year is whether the tech sector will be a lasting economic force. “Is the start-up dynamic go-

ing to continue? It all feels very Internet circa 1998,” said Nat Rockett, Executive Vice President at Cushman & Wakefield, of the tech industry’s recent New York leasing spree. He pointed to the fleeting success of some tech companies as cause for continued uncertainty in the leasing market. “I remember six months ago everybody who had space in Soho said, ‘Zynga will take it.’ Now it’s like — ‘Guess what? Zynga doesn’t look like it will survive 2013,’” he said of the online game developer. And while some tech firms have ventured from their preferred Midtown South market (because of the lack of inventory and increased prices there) to find cheaper space Downtown, not all areas are benefiting from the spillover. Rockett, for example, said the tight market in Midtown South has done nothing for submarkets that are suffering, such as the Plaza District.

Residential rentals

Pricing nears tipping point

he Manhattan rental market has been white hot for some time. And the high end of the rental market will continue to fare well, thanks to international renters looking for New York City homes. “Tight credit is definitely helping drive the upper end of the rental market,” said Larry Friedman, principal at brokerage AC Lawrence. But at the middle and bottom of the market, renters are increasingly resisting rising rents. “There will be a tipping point where you start pricing people out of the marketplace,” predicted Gary Malin, president of brokerage Citi Habitats.

Indeed, the middle and low segments of the rental market are also seeing an increasing number of renters take the plunge and purchasing, given the record-low interest rates. And, as TRD reported last month, Citi Habitats found that rental prices in Manhattan dropped across all apartment types between October and November, and that overall Manhattan rents slid $76 to $3,368 during that time. “The pace of increase [in rents] has slowed in the last two months, year over year,” Jonathan Miller, president of Miller Samuel, the real estate data firm, told TRD at the time. “We could be reaching some sort of threshold; we’re getting more resistance to the rising rental market.” With a lack of large-scale new rental developments in Manhattan, Malin said he expected new, amenity-rich buildings in the outer boroughs to continue to see strong activity, and noted that there may be more development of that sort as well. “There are nice amenities at a significant discount to Manhattan,” Malin said, pointing to new rental construction in Brooklyn and Queens. But, generally, expect more of the same in the rental market next year, real estate executives said. “I think the vacancy rate will hover right around where it is, and concessions will continue to play the same role they’ve been playing” — that of a marketing tool for new buildings — not a financial incentive landlords feel they must provide, Malin said.

Residential sales

More One57-type condos on horizon

ome sectors of the residential sales market could falter next year as foreign and domestic buyers seek different Continued on page 96

ILLUSTRATION FOR THE REAL January DEAL BY ROBERT www.TheRealDeal.com 2013 PIZZO 65

The Year

Real Estate

Ranks of NYC brokers swelled in 2012 Last year marked the highest number of licensed agents since 2007

By Leigh Kamping-Carder he real estate market bounced back last year but the wider jobs market continued to sputter, prompting an increasing number of people to obtain real estate licenses in New York City. In late 2012, the city was home to about 27,000 licensed salespersons and brokers, or 5.5 percent more than the 25,600 who were licensed at the same time in 2011, according to New York State Department of State data provided to The Real Deal. Breaking the numbers down further, there were 14,666 licensed salespersons in New York City — an 8.4 percent year-overyear increase and the highest number since 2007, before the housing bust. There were 12,337 licensed brokers, a modest 2.2 percent increase over the same period in 2011. (More commonly known as agents, salespersons represent the first rung on the licensing ladder, while brokers must have at least two years of industry experience and pass an additional licensing test. All agents must renew their licenses annually.) While it’s difficult to pinpoint the exact cause of the growth, insiders pointed to two parallel trends bringing people into real estate: healthier sales and a rental market

with more opportunities for deals, and a lackluster jobs market that has convinced some to try a different career. A year ago, the real estate market looked “dark and scary” to those on the sidelines, but this winter a trickle of new developments, a hot rental market and a stabilizing sales market — particularly in Manhattan — are all causes for optimism, said Gary Malin, president of Citi Habitats. “Once people start to hear positive news about a sector that was maybe getting battered earlier, they want to get in on that in the earlier states of a recovery, rather than in the middle of the recovery,” Malin said. Larry Friedman, co-founder of the brokerage AC Lawrence, which was recently acquired by Bellmarc Realty, said that he has not necessarily seen more agents coming into the industry, but he has seen “better quality” agents, who enter real estate as a second or third career, already equipped with contacts. (For example, one recent AC Lawrence hire, Arnie Leventhal, is a retired urologist, he said.) Rather than real estate being the proverbial “last resort,” the career is “something they’ve always wanted to do,” and see now as the right time to try, Friedman said.

veterans managed to ride out the downturn. Salespersons began to return to the field in 2010 and 2011, and that trend continued last year. Between January and November of 2012 (the most recent figures available), the state granted 3,366 new salesperson licenses — an 18.9 percent increase over the same period of the previous year, and more new licenses than in all of 2011. Meanwhile, the state granted 1,050 new broker licenses during the same 11-month period, or 8.6 percent more than a year ago. And it appears that existing agents are also sticking around the industry: 4,773 salespersons renewed their licenses between January and November of 2012, or 16.6 percent more than in the same period the year before, while 4,943 brokers renewed, representing a 10.2 percent jump over the previous year. TRD Citi Habitats President Gary Malin

As The Real Deal has reported, the industry lost a number of less-experienced agents in the years immediately following the housing crisis. Indeed, the number of licensed salespersons plummeted nearly 30 percent, from 16,928 in 2007 to 11,947 in 2009, while the number of licensed brokers (who, by definition, have more experience) fell only 3.2 percent between 2007 and 2009, from 12,715 to 12,309. The figures suggest that newer agents pursued other lines of work, while

The biggest real estate blunders of 2012

From that dangling crane to Grubb & Ellis’s implosion, a year of mishaps By Adam Pincus ome New York City real estate professionals likely can’t wait to see 2012 in the rearview mirror. Between the Grubb & Ellis bankruptcy, One57’s dangling crane and the Katan Group’s Domino Sugar sale, some high-profile firms and developers experienced mishaps last year. Among the biggest real estate–related fumbles was the implosion of California-based Grubb & Ellis, considered by many to be a man-made disaster. In 2011, as the firm was struggling financially, Grubb spoke with potential suitors to either invest in or buy the company. But those talks collapsed and Grubb & Ellis filed for bankruptcy in February, scattering its Manhattan brokers to more than half a dozen other companies. BGC Partners bought it out of bankruptcy for about $49.5 million in April, and the firm became known as Newmark Grubb Knight Frank. The other headline-grabbing bankruptcy was that of the law firm Dewey & LeBoeuf in May. The company’s large Manhattan-based real estate department, including prominent attorney Stuart Saft, was sent scrambling. Saft landed at Holland & Knight, while another group of lawyers left for Schulte Roth

68 January 2013 www.TheRealDeal.com

litigation. Brokers and agents were given the option to join rival residential firm AC Lawrence, now a division of the Bellmarc Group. Some real estate–related mistakes actually cost lives. In March, a construction worker died in Upper Manhattan when a Columbia University–owned structure collapsed in the process of being demolished. And in September, a worker was killed in Fort Greene when the roof of an under-construction building collapsed, crushing him. But the year’s most visually dramatic real estate–related glitch was the dangling crane atop Extell Development’s under-construction condo tower, One57. Hurricane Sandy’s winds flipped the boom over backwards on Oct. 29, causing the crane to hover The Domino Sugar Factory site 1,000 feet over Midtown. No one was injured, but city officials halted traffic, and nearby buildings, including Vornado Realty Trust’s 888 Seventh Avenue, were closed. The crane was secured and traffic reopened on Nov. 5. Extell experienced anoth& Zabel, and a third ended up at Venable. er high-profile setback in 2012 And last month, 28-year-old rental bro- when the developer and its partner, Carlyle kerage Manhattan Apartments closed its Realty Partners, lost a battle in a New York doors, after years of financial trouble and State appeals court last month over buyers The One57 crane

at the Rushmore condominium breaking their sales contracts. The court ruled that the state attorney general correctly ordered the return of $16 million in escrow deposits for apartments at the Rushmore. Another state appeals court decision left the Katan Group, an investor in the Domino Sugar Factory development on the Williamsburg waterfront, with a red face after months of legal jostling. Katan, a co-owner of the site with Community Preservation Corp., had fought to sell its share to the Chetrit Group and David Bistricer, thinking a sale price reached with developer Two Trees Management was too low. But in October the court threw out Katan’s lawsuit, and Two Trees closed on the land for $185 million. Not all legal issues were handled in civil court. In a high-profile case, Rabbi Yoshiyahu Yosef Pinto, an advisor to many real estate professionals in New York City, was arrested in Israel in October on money-laundering charges. Then in late November, Israeli media reported the government was close to indicting him for allegedly attempting to pay a $200,000 bribe to an Israeli police officer. A spokesperson denied the allegations in the news reports. TRD www.TheRealDeal.com January 2013 67

Swig v. Macklowe O

By David Jones ver the past four years, real estate developer Kent Swig has found himself under siege from creditors seeking to recoup loans and other investments lost in the 2008 economic crash. Thus far he’s been able to prevent the collapse of his considerable real estate empire, but an ongoing battle with his estranged father-inlaw, legendary developer Harry Macklowe, is threatening to push him over the edge and could derail any attempt at a comeback. Swig — the 51-year-old president of the development firm Swig Equities and Terra Holdings, the parent of brokerages Brown Harris Stevens and Halstead Property — has been locked in a bitter dispute with the parents of his soon-to-be ex-wife, Elizabeth, since May. As The Real Deal and others have reported, that’s when Macklowe and his wife, Linda, sued him, alleging that Swig defaulted on a $200,000 personal loan they made to him in 2009. But in September, the Macklowes failed in their attempt to obtain a judgment that would have forced Swig to pay back the loan immediately. As a result, the suit is now moving forward and setting the stage for a fullblown legal battle in state Supreme Court. Swig did not take the suit lying down. He fought back with a $1 million counterclaim against the Macklowes in October, alleging that his in-laws are conspiring to push him into bankruptcy. Swig claimed the $200,000 loan was supposed to be used to pay his law firm, Morrison Cohen, as it worked to restructure his holdings and help him recover from the financial crisis. In addition, he charged that the Macklowes entered a secret deal to hire Morrison Cohen to represent their daughter in her divorce case against him. “The Macklowes appear to be using the courts to inflict injuries and not redress them,” a spokesman for Swig said in a statement. “Now that Mr. Swig’s long-term marriage to their daughter, Elizabeth, has ended, this lawsuit only serves to hurt all of those involved.” The spokesman declined to comment further, citing the pending litigation. Macklowe, through a spokesperson, declined to comment on Swig’s allegations. But in a sworn affidavit filed June 18, Macklowe denied that he ever tried to ruin his son-in law. “At no time have I encouraged or supported any person to, or at any time initiated or commenced any involuntary proceeding against Kent Swig,” he said in the court filing. “Indeed to my knowledge, none of Swig’s creditors or anyone else has ever filed or sought to commence any involuntary bankruptcy against Mr. Swig.”

Happier times The marriage of Elizabeth and Swig, himself the scion of a powerful San Francisco 68 January 2013 www.TheRealDeal.com

real estate family, must have seemed like a match made in real estate heaven. When Swig married Elizabeth in 1987, she was working as an assistant vice president at the Harry Macklowe Real Estate Co., where her father was founder and president. (The firm is now called Macklowe Properties.) Meanwhile, Swig had recently joined Macklowe’s firm from Swig, Weiler & Dinner Development Co. in San Francisco, where he was vice president and his father served

A look at the bitter lawsuit that is still dogging the former in-laws in the wake of an ugly divorce

worked for Manhattan Pacific Management Co., the property management division at Macklowe.) A year later, in 1995, the two partnered with brothers Arthur and William Zeckendorf, whose family had a long history of investing with the Swig family in real estate deals, to form Terra Holdings. The company acquired Brown Harris Stevens that year from the Helmsley Organization, and Halstead Property in 1999.

The judgment from Square Mile was followed by $116 million in lawsuits brought by various banks and other creditors — each scrambling to get priority for rights to Swig’s assets. A major New York City real estate analyst said that Swig has yet to recover from the Square Mile debacle. “I don’t hear him as an active buyer in any deals,” the analyst said. “He’s still nursing his wounds.”

Developer Kent Swig. Inset, Swig and Elizabeth Macklowe during happier times. The couple filed for divorce in 2010.

Developer Harry Macklowe

Swig has been locked in a dispute with the parents of his soon-to-be ex-wife, Elizabeth, since May. That’s when the Macklowes sued him, alleging that Swig defaulted on a $200,000 personal loan. as chairman. The two companies were partners on several New York real estate deals. Harry Macklowe seems to have been taken by Swig from the start, as he set the up-and-coming executive up on a blind date with his daughter. Swig told the magazine Haute Living that on the night of their date, he and Elizabeth both had to cancel and that by happenstance they ran into each other later that evening at a restaurant called the Saloon (which has since closed) on the Upper West Side. Swig proposed about two weeks later. Swig spent more than seven years at Macklowe’s company, rising to executive vice president and ultimately managing a portfolio of about $4 billion in commercial and residential real estate. But in 1994, he left and partnered with David Burris to launch Swig Burris Equities. (Burris previously

By the early 2000s, Swig had built up a reputation as a major dealmaker in the commercial office market, acquiring and redeveloping major office towers in Lower Manhattan — including 80 and 90 Broad Street and 110 Williams Street — and establishing a reputation as a New York philanthropist. With his reputation as a commercial real estate mogul cemented, Swig began to enter into some highly leveraged residential deals, including the 2005 acquisition of the Sheffield at 322 West 57th Street for $418 million with partners Yair Levy and Serge Hoyda, and the $260 million acquisition of 25 Broad Street in the Financial District. Both condo conversions ended in foreclosure. In 2009, Manhattan-based real estate fund Square Mile Capital won a $32.4 million judgment against Swig for loans connected to both of those buildings.

More recently, Swig has been fighting for nominal control over some of his remaining properties, including 48 Wall Street. Indeed, his minority partner, M. Myers Mermel, filed suit in November 2011 to take control of the office building. The suit cited an earlier deal in which Swig’s assets would be sold off to pay for his $116 million debt. Mermel said that agreement allowed him to remove Swig as managing partner at 48 Wall because he was no longer financially capable of running the building.

Broken marriage

The downturn also took a heavy toll on Swig’s personal life. When the marriage was strong, Liz Swig, as she’s known, took an active role in her husband’s business and Continued on page 98

PHOTOGRAPHwww.TheRealDeal.com OF SWIG FOR THE REAL DEAL BYMarch HUGH HARTSHORNE 2012 00

“You’ve got to have something in which to believe. You’ve got to have leaders, organization, friendships, and contacts that help you to believe that, and help you to put out your best.” ...Dwight D. Eisenhower The Parkoff Organization is pleased to thank all who in 2012 helped us to achieve our best: Deal Makers & Advisors Ralph Herzka, Chairman & CEO Meridian Capital Group Matthew Texler & Peter Steier Meridian Capital Group Moshe Majeski Meridian Capital Group Aaron Jungreis Rosewood Realty Group Brad Siderow & Joshua Arcus The Siderow Organization Paul Greenbaum & Stephen Katz GCP Capital Group Matthew Mager Besen Associates Jeffrey Roseman & Benjamin Birnbaum Newmark Grubb Knight Frank Mark Tergesen ABS Partners Real Estate Laura Pommerantz & Betty Ende PBS Real Estate Richard Skulnik Ripco Real Estate Philip Narotzky Counsel Abstract And special thanks to: David Breger Breger and Breger Lenders & Financial Institutions New York Community Bank • Community National Bank Wells Fargo • UBS • Citibank • Signature Bank • Morgan Stanley IDB Bank • Sovereign Bank • Pembrook Capital • M&T Bank

Wishing all of our friends and colleagues a very successful 2013

Acquisition opportunities Commercial rental opportunities Residential rental opportunities

Adam Parkoff 212-324-1600 Michael Papilsky 212-319-3458 Allison Foldvary 212-324-1602

deals@parkoff.com retail@parkoff.com rentals@newparkmgmt.com

ON THE MARKET Chelsea development site asking $85M A block-through development site at 113-117 West 24th Street is listed for $85 million. The property, also known as 112-118 West 25th Street, consists of a three-story parking garage and is zoned M1-6, making it ideally suited for a hotel or commercial development, according to the listing. The current owner has purchased 112,574 square feet of additional development rights, increasing the total as-ofright development to about 268,999 buildable square feet. Furthermore, if a new owner creates a public plaza, the maximum buildable square footage could be increased to 300,278. Bob Knakal and Brock Emmetsberger of Massey Knakal Realty Services are handling the sale.

Soho retail condo could fetch $30M Jones Lang LaSalle has been tapped as the exclusive sales agent for the retail space at the Aby Rosen–developed 350 West Broadway, the New York Observer reported last month. Jason Gold, one of the members of the JLL 350 West Broadway marketing team, told the Observer that the 11,115-square-foot, two-floor retail condominium space could fetch between $26 million and $30 million. Richard Baxter, vice chairman at JLL, is leading the marketing efforts along with Gold, Yoron

Cohen, Yoav Oelsner and Ryan Solomon. The space, located between Grand and Broome streets in Soho, has 80 feet of frontage on West Broadway as well as its own 1,500-square-foot terrace. Nordstrom currently operates a pop-up store at the location.

Navy Yard industrial property for sale A 220,000-squarefoot industrial site at 29 Ryerson Street in Brooklyn’s Navy Yard area is on the market with an asking price of 29 Ryerson Street $26 million. Located at the corner of Ryerson Street and Flushing Avenue, the site consists of an eight-story, 192,000-square-foot industrial building; a one-story, 8,070-square-foot industrial building; and a parking lot separating the two structures. The properties, which are located across the street from the Brooklyn Navy Yard, can be delivered vacant in the first quarter of 2014. Alan Shmaruk and Michael Sherman of the Soho-based Manhattes Group are marketing the space.

UWS residential building on the market A 10-story apartment building with ground-floor retail at 208 West 96th Street is on the market with an asking price of $22.8 million. The 19,821-square-foot structure, located on the south side of West 96th Street between Broadway and Amsterdam Avenue, was built in 2011.

TH I S M O N T H I N

R EAL E STATE H ISTORY T

1984: $400M SALE SETS RECORD FOR NYC PORTFOLIO

he Chicago-based charity John D. and Catherine T. MacArthur Foundation sold 19 commercial buildings in New York City to a Boston investment firm for $400 million 29 years ago this month. The move set a record at the time for the priciest commercial portfolio sale in the city. The transaction included high-profile office towers such as the 407,767-square-foot 757 Third Avenue, the 134,706-squarefoot 220 Fifth Avenue and the 521,228-square-foot Gulf + Western Building at 15 Columbus Circle (now 1 Central Park West). The acquisition was the first in New York City for Winthrop, which is now known as Winthrop The Gulf + Western Building Realty Trust, and is based in both Boston and Manhattan. The foundation — which supports a host of causes from human rights to conservation — needed to sell in order to conform to a 1969 federal law regulating excess holdings by charities. The entire portfolio contained 4.5 million square feet and also included properties in Brooklyn and Queens. The sale was not an overall investment sales record, however. In 1981, MetLife purchased 200 Park Avenue for $400 million, setting a record for a single-building sale.

70 January 2013 www.TheRealDeal.com

Commercial properties recently placed on the market

Park Slope apartment building on the block A five-story multi-family building at 225 13th Street in Park Slope is for sale with an asking price of $8.75 million. The 23,500-square-foot property, located between Fourth and Fifth avenues, has 26 rental units, including four three-bedrooms, four two-bedrooms, 17 one-bedrooms and one garden three-bedroom unit with a private backyard. Three of the one-bedrooms have private decks. The building has an average asking rent of about $32 per square foot and produces $655,700 in rental income annually. Adam Hess and Jacob Colleran of Brooklynbased investment sales firm TerraCRG are handling the assignment. Compiled by Linden Lim

A look back at some of New York City’s biggest real estate stories

And in 1982, an investment firm structured an unusual sale-leaseback of the General Motors Building that valued the 50-story tower at a new single-building record of $500 million.

It is an elevator building with 31 feet of frontage on West 96th Street. The second through 10th floors contain nine full-floor condos, which are vacant and unsold. They average 2,000 square feet. All units are three-bedrooms with three baths, and each has its own private balcony as well as rear porches. The 2,400-square-foot retail 208 West 96th Street space on the ground floor is leased to H&R Block. David Schechtman, Marion Jones, Lipa Lieberman and George Moss of Eastern Consolidated are handling the sale.

1951: NY CATHOLIC CHURCH LAUNCHES $25M EXPANSION

he Roman Catholic Archdiocese of New York announced a $25 million development plan to construct 31 buildings, including hospitals, schools and convents, 62 years ago this month. The church was in the midst of a post–World War II attendance boom that drove demand for new construction in its territory, which included Manhattan, the Bronx, Staten Island and seven upstate counties. The New York Archdiocese was headed by Cardinal Francis Spellman at the time. The explosive growth was seen most clearly in school enrollment, which rose by 40 percent in the 10-year period ending in 1955 to about 200,000 students. The projects included a $2 million wing for St. Vincent’s Hospital at 146 West 12th Street, as well as three convents in Manhattan and the Bronx, expected to cost $1.95 million. The expansion plan was announced at a luncheon at the Building Trades Employers’ Association headquarters at 2 Park Avenue. The development agenda was part of a larger church expansion plan. A few years earlier, in 1947, the church announced another postwar building initiative, also for about $25 million.

1924: HEARST SECURES MIDTOWN

HEADQUARTERS SITE

he brash publishing giant, William Randolph Hearst, bought an option to purchase a large parcel of land near Columbus Circle 89 years ago this month. The site eventually became the location for his company’s landmarked headquarters. Hearst purchased the right to buy the land lining the entire block front along Eighth Avenue between 56th and 57th streets. It’s unclear exactly when he purchased the land, but his architect began designing the building in 1926. In 1928, the six-story International Magazine Building, constructed at a cost of $2 million, opened to house the offices of 12 magazines Hearst owned. The building was expected to be the base of William Randolph Hearst a much larger tower, but the Depression forced Hearst to abandon those plans. Hearst was one of the largest landowners around Columbus Circle, which he believed would become the next theater district. Among the many properties he owned was land that is now the Time Warner Center, which he purchased in 1920. He lost control of his real estate holdings and his publishing empire in 1937 under a court-ordered reorganization that ultimately liquidated many of the non-publishing holdings, including the money-losing, luxury rental Ritz Tower at 465 Park Avenue. Compiled by Adam Pincus

A $1,000,000,000 YeAr! In 201 2 , Bo b K nak al and hi s team ha d a record yea r. 92 Transactions Closed 114 Properties Sold 5,000,000 Square Feet Over $1 Billion in Aggregate Consideration Th ank yo u to all of our c li ents , collea gu es and f r iends for mak ing this possib le .

robert Knakal

Jonathan Hageman

Chairman

Team Manager / Partner

and the rest of Team Knakal: Matthew Abreu robert Bailey Alexander Baker

elysa Berlin George Dâ&#x20AC;&#x2122;Ambrosio David Kalish Leica Meliton

robert Knakal 212.696.2500 x7777 rknakal@masseyknakal.com

erin Mitchell Thomas Willoughby Patrick Yannotta

VITAL STATS NAME: Jordan Vogel AGE: 31 TITLE AND COMPANY:

Co-founder, Benchmark Real Estate HOMETOWN: Upper East Side CURRENTLY LIVING IN:

Upper West Side BUILDING BLOCKS How many buildings does Benchmark own? We own 17 buildings in total. The smallest building is 10 Fifth Avenue, which has 14 apartments. The largest is 425 Third Avenue. It has 101 apartments and three retail stores. How did you get into the business? I studied finance, but when I graduated from college in 2001, I couldn’t see sitting in front of a computer all day. I took a job doing property management — I managed about 1,000 apartments in Manhattan. It wasn’t glamorous. It was collecting rent, kicking the bricks in the basement and yelling at supers, but it was good experience. Actually, that’s one of the reasons I was able to start my own company: You make money in this business by pinching pennies and understanding how to operate these buildings. What came next? I got a job working for [CBRE Chairman of Global Brokerage] Steve Siegel. He started a residential acquisition company called SG2 Properties. That’s where I met Aaron [Feldman, Benchmark’s co-founder.] We shared an office for five years, and knew we worked well together. How did the recession impact the launch of your business? The recession was the best thing that could have ever happened to our business. I will always remember it as something that enabled us to start Benchmark. We were buying buildings in super-prime locations at $300 to $400 a foot and true 6 [percent] cap rates. In retrospect, I should have bought every property I toured. How does your relationship with Feldman work? He’s my daytime wife. Aaron is much more conservative than I am. He keeps me in check. Without him, I would overpay on many more properties. Are you married for real? I have been married for seven years and have a three-year-old daughter named Hayden.

THE BOTTOM LINE What are the biggest challenges of your job? Finding deals. When we started in 2009, it seemed like we were the only people buying. Now, debt’s cheap and there’s a lot of money chasing very few deals. What kind of acquisitions are you looking to make? We’re in the business of buying rent-stabilized buildings. … We only buy in the most prime locations of Manhattan. Our business plan works best in the highest-rent districts. Unless the rental market for high-end luxury product is above $70 per square foot in any given submarket, we’re not interested in buying there. Where does your capital come from? We syndicate our deals. I am against raising capital from institutional sources. We have a group of about 150 high-net-worth individuals who invest in our deals. We’re friends with a lot of them. I used to joke that a third of our equity came from sources we’d see across the table at Thanksgiving dinner. Now, as we’ve grown, it’s friends and friends of friends. You recently purchased a Gramercy Park rental building from Maurice Mann for $39 million. Is that more than you normally spend on a building? We’re transitioning now to doing larger deals. We have the ability to raise up to about $60 million in equity for any given deal. … Maurice Mann’s building was a true value-add play; 93 of the 94 apartments are fair-market. The tenants are paying $50 a foot. We could get $70 a foot. What’s in your pipeline for 2013? We’re at the stage of getting contracts on two properties right now. One is a $20 million project in Chelsea. The other is a $70 million project in the Village. By Katherine Clarke 10 Fifth Avenue

LANDLORD LIFE What’s your tenant horror story? We did a buyout and when I arrived at the apartment to give the tenant a check for the keys, I encountered a stench. About 40 years ago, she put down a piece of paper for her dog to go to the bathroom. Instead of picking it up, she laid another piece of paper on top of it. She did that for 40 straight years. We spent about $15,000 cleaning it. It was an environmental hazard. Do you encounter a lot of strange tenants? One rent-stabilized tenant was illegally subletting his apartment and we brought an action against him. The day after he was served, we got a letter from his lawyer saying that the tenant, a 75-year-old man, had married the subtenant, a 25-year-old girl, in court that day. If you’re married, your spouse is allowed to keep legal possession of your rent-stabilized apartment. The marriage certificate is dated the day after he was served. It was wild.

72 January 2013 www.TheRealDeal.com

425 Third Avenue

PHOTOGRAPH OF VOGEL FOR THE REAL DEAL BY DEREK ZAHEDI

Ac c ept edbyov er1, 100bui l di ngsr epr es ent i ngov er160, 000apar t ment s ,

Rental Market

The top rental deals of 2012— and the agents behind them A look at the brokers who closed the biggest residential leases of the year

By Hayley Kaplan ith the luxury residential market booming, expensive rentals have recently been in higher demand than ever — getting snapped up faster than usual and, in some cases, sparking bidding wars. Manhattan rents were at an all-time high this past year even as Citi Habitats’ third-quarter rental market report, the most recent data available at press time, showed the historic rental highs that occurred between January and August had plateaued during

2012’s third quarter (see related story on page 16). While in the past rentals were considered a less-prestigious (and lower-paying) sector of the brokerage business, six-figure rental deals have changed that, and a number of high-end brokers have found themselves focused on rentals. This month — using data provided by listings website StreetEasy — The Real Deal looked at the priciest closed rental deals in Manhattan in 2012 (see chart), the brokers who executed those deals and how the transactions came together.

Margaret Bay

Brown Harris Stevens

he most expensive rental apartment deal of 2012 — a unit at the Towers of the Waldorf-Astoria that leased for $135,000 a month — was handled by Margaret Bay of Brown Harris Stevens. After eight months on the market, the unit was rented in July. The three-bedroom apartment features a formal dining and maid’s room, and has views of the Chrysler Building and East River. Through her long-running relationship with the Waldorf, Bay has made luxury rentals her domain for years. Indeed, she rented the same apartment for $140,000 in October 2010, according to StreetEasy. And, these big-ticket rentals come with big-time commissions. According to Gary Malin, president of Citi Habitats, no matter the price of the transaction, brokers take home the usual commission, which is 15 percent of a year’s rent — as long as the lease is at least six months long. If the unit is rented for less than six months the commission is usually one month’s rent, said Malin, who was not connected to this deal. But he noted that everything is negotiable. “It’s the same thing [as a normal rental],” he said. Bay — who was at Sotheby’s International Realty for 15 years before jumping to BHS in 2005 — is the exclusive rental agent at the Waldorf, which is located at 100 East 50th Street and has all of the amenities of the famed hotel, which is located on the floors directly below the residential portion of the building. All the units there are available for long- and short-term leases. Last year, Bay rented a unit there for $75,000 a month (a deal which actually tied for the third-priciest rental deal of 2012) to two different renters — one in March and the other in July. The unit has not been relisted again since July. She also has the rental listing for the famed Cole Porter apartment, which

74 January 2013 www.TheRealDeal.com

Brown Harris Stevens’ Margaret Bay

Town Residential’s Ashley Teitel

Brown Harris Stevens’ Frans Preidel

Stribling & Associates’ Bahar Tavakolian

The Corcoran Group’s Andrea Wohl Lucas

Sotheby’s International Realty’s Torsten Krines

described her attitude. Although Bay has other luxury rental and sales listings across Manhattan — such as a $46,500-a-month penthouse at the Plaza Athenee Hotel — the Waldorf makes up the majority of her business.

Ashley Teitel

A This Waldorf-Astoria unit was rented by Margaret Bay of BHS for $135,000 a month.

has an asking price of $150,000. That unit previously rented for $140,000 a month. It’s not clear when renters last inhabited the iconic apartment because it’s gone on and off the rental market several times in the past three years. Bay declined to comment for this story, but her profile page on BHS’s website said “a fortuitous phone call

combined with her entrepreneurial spirit” landed her the exclusive Waldorf gig. Matt Zolbe, director of sales and marketing at the Waldorf-Astoria Hotel, described Bay as “flexible” and “responsive,” and said she works with “lightning speed.” “Do it once and do it right,” is how he

Town Residential

fter only a year in the business, Town broker Ashley Teitel is making a big splash in New York City’s highend rental market. Indeed, Teitel — who was previously an account executive for Christian Dior and earned her master’s degree in diplomacy and strategy at the Raphael Recanati International School in Israel before getting into real estate — brokered the second-most-expensive rental in Manhattan in 2012. The apartment was a $90,000-a-month unit at the Enrique Norten–designed Cassa Hotel and Residences at 70 West 45th Street between Fifth and Sixth avenues.

www.TheRealDeal.com January 2013 00

Rental Market

The priciest Manhattan rental deals of 2012 Ranking Agent

Price per mo.

Address

Firm

Margaret Bay

$135,000

100 East 50th Street, 42H (Towers of the Waldorf-Astoria)

Brown Harris Stevens

Ashley Teitel

$90,000

70 West 45th Street, PH3 (Cassa Hotel and Residences)

Town Residential

3 TIE

Margaret Bay

$75,000

100 East 50th Street, 31H (Towers of the Waldorf-Astoria)

Brown Harris Stevens

3 TIE

Frans Preidel

$75,000

151 East 58th Street, PH53W (One Beacon Court)

Brown Harris Stevens

5 TIE

Ashley Teitel

$60,000

70 West 45th Street, PH1 (Cassa Hotel and Residences)

Town Residential

5 TIE

Ashley Teitel

$60,000

70 West 45th Street, PH2 (Cassa Hotel and Residences)

Town Residential

5 TIE

Debbie Korb and Roberta Golubock

$60,000

50 East 73rd Street (Townhouse)

Sotheby’s International Realty

5 TIE

Ashley Teitel

$60,000

70 West 45th Street, PH3 (Cassa Hotel and Residences)

Douglas Elliman

5 TIE

John Barbato

$60,000

641 Fifth Avenue, 4647CF (Olympic Tower)

Stribling & Associates

10 TIE

Sam Bader

$50,000

9 East 77th Street (Townhouse)

Brown Harris Stevens

10 TIE

Ashley Teitel

$50,000

70 West 45th Street, PH2 (Cassa Hotel and Residences)

Douglas Elliman

10 TIE

Ashley Teitel

$50,000

70 West 45th Street, PH1 (Cassa Hotel and Residences)

Douglas Elliman

Bahar Tavakolian

$47,000

923 Fifth Avenue, 17CD

Stribling & Associates

Andrea Wohl Lucas

$45,000

170 East End Avenue, PH1A

Corcoran Group

15 TIE

Ashley Teitel

$40,000

70 West 45th Street, PH3 (Cassa Hotel and Residences)

Town Residential

15 TIE

Susan Barkin

$40,000

15 Central Park West, 27C

Barkin and Associates

15 TIE

Torsten Krines

$40,000

36 Grove Street (Townhouse)

Sotheby’s International Realty

David Kornmeier

$39,500

525 Park Avenue, PHB

Brown Harris Stevens

Elizabeth Sample and Brenda Powers

$38,000

80 Columbus Circle, 67D (Residences at the Mandarin Oriental)

Sotheby’s International Realty

Dennis Hughes, Brennan Zahler and Lorand Kovacs

$37,500

151 East 85th Street, 7HJK (The Lucida)

Corcoran Group

Source: StreetEasy. Closed rental deals were reported to StreetEasy by brokers and confirmed by TRD with brokers and in news reports. However, closed rental transactions are not publicly reported. Some of the high-end rentals are short-term leases.

The 10 priciest Manhattan rental listings Ranking Agent

Price per mo.

Address

Firm

TIE

Paula Del Nunzio

$150,000

4 East 80th Street (Woolworth Mansion)

Brown Harris Stevens

TIE

Margaret Bay

$150,000

100 East 50th Street, 33A (Towers at the Waldorf Astoria)

Brown Harris Stevens

Margaret Bay

$135,000

100 East 50th Street (Towers at the Waldorf Astoria)

Brown Harris Stevens

3 4

TIE

Harry DiOrio

$100,000

230 West 56th Street (Park Imperial)

Douglas Elliman

TIE

Herve Senequier and Leonard Steinberg

$100,000

144 Duane Street (House)

Douglas Elliman

TIE

Steven Halpern

$100,000

214 Lafayette Street (Townhouse)

Citi Habitats

Lisa Simonsen and William Rainero

$95,000

80 Washington Place (Townhouse)

Douglas Elliman

Vannessa Kaufman Team and Stan Ponte

$90,000

247 Central Park West (Townhouse)

Sotheby’s International Realty

Carrie Chiang

$85,000

106 East 71st Street (Townhouse)

Corcoran Group

Carrie Chiang

$78,000

7 East 63rd Street (Townhouse)

Corcoran Group

Source: StreetEasy.

The deal, which closed in July, was the second-priciest rental to close in 2012 — though some of her others at the Cassa were also on the list of 20 priciest rentals as ties. For example, Teitel rented out the $90,000 penthouse for $60,000 and for $40,000 last year. It’s unclear if either of those deals were for an entire month, however. Teitel said her international affairs degree has helped her “bridge the gap” with her real estate clients. In fact, she told TRD that it came in handy when

44 November 2012 www.TheRealDeal.com

she was working with the renters of the Cassa unit — a Saudi Arabian family who came to New York for medical care. She said demand among international clients, like the Saudi family, for furnished, short-term rentals is strong. And that unit is not her only highpriced rental. While at Douglas Elliman, she said she had an exclusive relationship with Cassa and handled numerous deals at the building, which was developed by Assa Properties. The tower has 165 hotel rooms and 57 residential units, which include a mix of rent-

als and condos, according to StreetEasy. Teitel said her family was in the real estate business, which prompted her to become a broker. She worked at Halstead Property from December 2011 to April 2012 and then at Elliman from April to November, before starting at Town.

Frans Preidel

Brown Harris Stevens lthough Frans Preidel (who hails from the Netherlands) moved to

the United States almost 24 years ago, he’s only made his mark on the New York City brokerage world in the last few years. Perhaps that’s because Preidel worked in finance for years and then started his own food-production firm. But when his business went under in 2004 (a reality he blamed on post-9/11 market conditions), he transitioned into residential brokerage. Preidel started out at Elliman, and around 2006 moved to Brown Harris Continued on page 99

www.TheRealDeal.com January 2013 75

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Q&A

Sizing up South Street Seaport The burgeoning neighborhood was slammed by Hurricane Sandy, but brokers say the damage is impacting retail more than residential

BY MELISSA DEHNCKE-MCGILL he South Street Seaport had to forgo its usual stream of shopping bag–toting tourists this holiday season as it continued to recover from the devastation it suffered during Hurricane Sandy. Indeed, while the Pier 17 mall, which juts out onto the East River, has reopened, some of the businesses (along with a bunch of others in the neighborhood) remain shuttered. “For the first time, I think the South Street Seaport may really sink,” Faith Hope Consolo, chairman of Douglas Elliman’s retail group, told the Wall Street Journal in late November. This month, The Real Deal checked in with residential brokers who work in the burgeoning area — which has seen a burst of new residential development since the Fulton Street Fish Market relocated to the Bronx in 2005 — to see how sales and rentals are holding up. Several brokers said that while the area has seen prices and activity steadily rise over the past few years, the residential market has suffered since the storm. That’s partly because

Julia Bryzgalina

director of sales & leasing, Platinum Properties The South Street Seaport complex and the surrounding neighborhood were pretty devastated by Hurricane Sandy. Have sales and rentals in the neighborhood slowed since the storm? Sales and rentals slowed down significantly after Hurricane Sandy in the South Street Seaport. That was because many buildings were declared uninhabitable and the restoration has been taking a very long time. In addition, many businesses that gave the South Street Seaport that special character and charm have been out of commission since the hurricane, so not as many people are renting apartments there. The market has picked up a little [more recently], but I don’t expect to see a full recovery until the spring. How are building owners dealing with prospective renters and buyers in the neighborhood in the wake of the storm? The most important factor leading tenants and buyers back to the South Street Seaport will be pricing. Landlords recognize that they will need to fill apartments vacated in Sandy’s aftermath and will hopefully provide concessions. How is the overall residential market holding up there compared to a year or two ago? The South Street Seaport is a relatively new neighborhood, which formed a couple years after the Fulton Fish Market moved to [the Bronx in 2005]. Before Sandy, 2012 was definitely the best year for the neighborhood for both rentals and sales. [Fol76 January 2013 www.TheRealDeal.com

lowing Sandy], sales prices have remained the same for the units still on the market, but about 60 percent of all apartments that were on the market pre-Sandy were taken off. There have been a bunch of new projects and conversions in the northern section of the neighborhood in the last few years, like 254 Front Street, 272 Water Street and Historic Front Street. Are there any other upcoming projects that you think will have a big impact on the South Street Seaport market? The development of the World Trade Cen-

many units have simply been pulled from the market with plans to relist in the spring. “Before Sandy, 2012 was definitely the best year for the neighborhood for both rentals and sales,” said Julia Bryzgalina, the director of sales and leasing at Platinum Properties. “[Following Sandy], sales prices have remained the same for the units still on the market, but about 60 percent of all apartments that were on the market pre-Sandy were taken off.” Nonetheless, brokers said that recent projects — like 254 Front Street, a high-end rental that opened earlier this year, and 272 Water Street, a condo — have both been test cases that have proven successful. And they predicted that developers will continue to pursue future residential projects in the neighborhood. In addition, they point to nearby under-construction projects like the World Trade Center site and the Fulton Street Transit Hub, along with planned (though delayed) projects like the Pier 17 redevelopment, as beacons that will draw more residents to the neighborhood. For more on the storm damage, on future projects and on prices, we turn to our panel of experts. and 11 percent since the boom — it’s becoming more difficult for buyers to negotiate. What’s the inventory like in the South Street Seaport neighborhood these days, and how does that compare to a year or two ago? The sales apartment inventory is lower in the South Street Seaport than it has ever been. The listings inventory decreased by 25 percent since 2011 and 43 percent since the boom. What are the most surprising trends you’re seeing in the South Street Sea-

“Before Sandy, 2012 was definitely the best year for the neighborhood for both rentals and sales. [Following Sandy], sales prices have remained the same for the units still on the market, but about 60 percent of all apartments that were on the market pre-Sandy were taken off.” JULIA BRYZGALINA, PLATINUM PROPERTIES ter and Fulton Transit Center will have a hugely positive impact on the South Street Seaport area, both because of the influx of people, which will increase demand for residential units, and because of the improved transportation options. As for residential projects, Metro Loft’s conversion of the AIG Building to a rental property will improve the northern boundary of the Financial District, which will also be good for the South Street Seaport. What kinds of discounts off asking prices are being seen in the area? There haven’t been many significant discounts off asking sales prices in the area. Properties were more likely to be taken off the market until the spring than reduced in price. Since the sale prices have been climbing year after year — 8 percent since 2011

port area’s residential market? The development of Magnum’s full-service building at 254 Front Street was one of the most interesting events for the South Street Seaport in 2012 because it’s the only full-service rental building in the area. It was a huge success and showed an increased recognition for the South Street Seaport. What are the biggest challenges to selling residential property in the South Street Seaport area today? One of the biggest challenges today is explaining how the landlords/developers in the area are planning to improve the buildings to allow them to withstand future natural disasters. It’s also important to help the client who hasn’t seen the neighborhood before imagine what it looks like when the businesses and restaurants function normally.

How much do you think the closure of retail in the South Street Seaport area is hurting the overall market? The neighborhood has suffered dramatically due to the loss of small businesses and restaurants. They represented a large portion of the South Street Seaport’s charm. This may affect renters who may not plan to stay in the neighborhood for a long time, but should be a positive thing for prospective buyers as they have a short amount of time to get a significant discount on apartments from motivated sellers.

Susie Park

senior vice president, Blu Realty Have sales and rentals in the neighborhood slowed since the storm? The Seaport is a small area geographically so we are never oversaturated with inventory. Since the storm I’ve seen a couple of units go off the market, including one at Seaport Lofts. Though there was no damage, we’ve decided to renovate the remaining units before re-listing. No better time to do this than during a downtime like post-Sandy into the holidays. Did you have properties or listings in the South Street Seaport that were damaged by the storm? Like most other buildings in the area, 272 Water Street went through basement repairs. No residential units were damaged — not even the first-floor unit in the front of the building, which is close to miraculous. Marketing has been continuous. What’s going on with residential sales prices in the neighborhood post-Sandy? Are they up or down compared to before the storm and to a year or two ago? www.TheRealDeal.com January 2013 77

Q&A Certainly from a year or two ago, I’m seeing an upward price trend in the Seaport community, which mirrors what’s taken place in the rest of Manhattan. … I haven’t seen any price changes or dips post-Sandy or as a direct result of Sandy. Which price ranges and apartment types are generally performing best right now in the area? Two-bedrooms seem to be higher in demand. This goes for any sale or rental in the area. There have been a bunch of new projects and conversions in the northern section of the neighborhood in the last few years. How are those projects impacting the market? 272 Water Street is pretty close to being sold out. I had two contracts signed post-Sandy that we are about to close very soon. Do you think the closure of so much retail in the Street Seaport is hurting other businesses? I believe so. The damage caused from Sandy has really seemed to hurt the businesses in the area. Between tourism drying up, which was the bulk of the income, and the cost of repairs, the businesses were hit much worse than the residential. We have some significant historical businesses that have been damaged; for example, the Bridge Café and the South Street Seaport Museum, which just opened. The good news is that I’m seeing businesses [come back]. Last week, MarkJoseph Steakhouse opened [as did] the popular Cowgirl SeaHorse, Acqua, Made Fresh Daily and Jeremy’s Ale House. I hope to see the rest open soon, especially those on the Peck Slip, which got hit really badly. Are there any other upcoming residential projects that you think will have a big impact on the area? The approved project for the new mall at Pier 17 will certainly contribute to major growth and development in our community. We’ve waited for a long time for this redevelopment at Pier 17, which will not only cater to the tourism in the area — as it is now — but will also bring a lot of Manhattan residents. How long are properties staying on the market in the area and how does that compare to a year or two ago? The turnover is increasing. A year ago when I first launched Seaport Lofts, I had a much slower turnover. I think back to a year ago and we had much more curiosity than people looking to buy. Today, my hit rate is much higher, though I may not get as much foot traffic anymore. Buyers who come through the area now have done their research and are more serious. What are the biggest challenges to selling residential property in the 78 January 2013 www.TheRealDeal.com

South Street Seaport area today? My biggest challenge has probably been getting people outside of the Seaport to understand and to educate them about what’s going on down here.

Jackie Chan-Brown

senior associate, Citi Habitats Which price ranges and apartment types are doing best and worst in the neighborhood? Considering the recent clean-up efforts going on in the South Street Seaport area, apartments are moving surprisingly fast. That being said, there will always be a segment of the population that has hesitation about the area after the recent storm, especially those with children or other family members that may be more vulnerable in the case of an emergency. For that reason, larger apartments have had a slight decline in demand. However, people tend to have short memories. Are you concerned that developers will shy away from the area for fear of future storms? There are no signs that I can see that developers will shy away from the area. Let’s remember that the new World Trade Center will soon be completed, bringing many thousands of new people to the area to work. Many of these people will want to live close to their workplace. This can only serve to strengthen the adjacent markets. Also, the Fulton Street Transit Hub is nearing completion. Developers are keenly aware of these factors, and it can only serve to whet their collective appetites. What they will do is build smarter, and make sure new buildings are built to better withstand extreme weather conditions. For example, move electrical systems and boilers out of the basement and install backup generators. While not as sexy as sweeping views and luxury amenities, these features may prove to be big selling points in the future. Are there any other upcoming residential projects that you think will have a big impact on the area? There’s 116 John Street, which is currently being converted to luxury rentals. What are the biggest challenges to selling residential property in the South Street Seaport area? The distance from the subways and from convenience stores. However, I believe that when the Fulton Transit Hub opens in 2014, many buyers will be drawn to the Seaport area for precisely those reasons: The transit system will bring more crowds and they may prefer to be in a calmer, more serene environment.

Sharon McGrail

vice president, Bond New York What’s going on with residential sales prices in the neighborhood post-Sandy and compared to the last few years? Historically, residential sales slow in the last quarter of each year through the second quarter of the following year, so it’s hard to say whether sales have slowed due to Sandy. But from what we can tell, the market is behaving as it would at this time of year. There have been a bunch of new projects in the northern section of the neighborhood. How are those projects impacting the market? The development of 272 Water Street and 254 Front Street have had a tremendously positive impact on the market. They were filling a need for new rental inventory that had gone down in prior years because of the focus on new condo developments and conversions. What impact will the closure of so much area retail have on opened businesses? The closure of [stores at] Pier 17 will have a direct impact on any neighboring retailers that are now up and running, because they were highly reliant upon the attraction of tourists to Pier 17. The temporary, and possibly permanent, closure of the shops and restaurants on Front Street and the neighboring streets will have an impact on the residents of the South Street Seaport area. It’s a very tight area, specifically historic South Street Seaport. [Residents may have to] wait till next spring to walk out their door and get a cup of coffee or a glass of wine, but there’s a lot of retail in Lower Manhattan; you just have to go a little bit further. I spoke to the people at Joe’s Coffee on Front Street and from what I understand they are looking to reopen in April. The South Street Seaport Museum opened in mid-December and Abercrombie & Fitch has reopened already. How are rentals doing in the neighborhood compared to sales? Since late 2008, rentals have been stronger than sales, due to the downturn.

Marc Palermo

managing director, Warburg Realty Have sales and rentals in the neighborhood slowed since Hurricane Sandy? Immediately following the storm it was horrendous.

So much had been lost and there wasn’t a light, but since then I have actually seen an uptick in business. Immediately after the storm I had several displaced clients who would never live anyplace else and needed a place to live. I also have new clients that see it as a good time to purchase. Did you have properties or listings in the South Street Seaport that were damaged by the storm? Yes, I did, and thankfully everyone is safe. For the most part the damage was to the common elements of the properties, such as lobbies, elevators, electrical systems, boilers, etc. Which price ranges and apartment types are generally performing best right now in the neighborhood? My clients have been looking for homes priced between $1.7 million and $2.5 million, for two- to four-bedroom, family-size lofts. The Seaport and FiDi are the best values in New York City. Which price ranges and apartment types are struggling the most in the neighborhood? I don’t think that any are struggling, but if I had to pick one it would be one-bedrooms. They tend to be on the larger side and that puts them out of reach for the students who also live in the neighborhood that prefer to share a two-bedroom.

David Wanamaker

senior vice president, Douglas Elliman Which price ranges and apartment types are generally performing best right now in the neighborhood? In general, prior to Sandy, the rental market was very strong with buildings along Front Street seeing very little to no vacancy overall. The sales inventory is usually small due to the area’s limited size, so things move very quickly if priced right. Are you concerned that developers will shy away from the area? There are very few development sites left in the historic district — storm or no storm. South Street from Beekman Street to the north is the last real place that could be exploited in a real estate sense, but there are still barriers there where landmark guidelines exist. What’s the inventory like in the neighborhood these days? Seaport inventory is always very limited. I think currently there are only around a dozen listings on the market in total priced from around $700,000 to almost $5 million. TRD www.TheRealDeal.com January 2013 79

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Real Deal Jan 13 Novogratz NDND.indd 1

12/7/12 12:46:41 PM

TRI-STATE BRIEFS WESTCHESTER

igation, management and financial expenses. Pennsylvania-based American Bridge Company, which built the existing Tappan Zee in the 1950s, partnered with Fluor Enter-

A rendering of the new Tappan Zee bridge

Design for the new Tappan Zee unveiled The state Thruway Authority last month chose a consortium known as Tappan Zee Constructors to design and build a new Tappan Zee Bridge, one of the largest public works projects in the country, the Journal News reported. Tappan Zee Constructors had previously won the state advisory committee’s recommendation with its de-

just over five years, will begin this year. The two other proposals — a $4 billion plan from a joint venture of Kiewit Infrastructure and Skanska USA, and a $3.9 billion proposal from a Bechtel Infrastructure and Tutor Perini partnership — each needed closer to six years to complete the project.

CONNECTICUT

Hartford to see 1,000 new apartments sign for a $3.1 billion, cable-stayed bridge with angled towers. The full cost of the project will be close to $4 billion with environmental mit-

prise of Texas and others as Tappan Zee Constructors to win the contract. Construction on the new bridge, which is expected to take

Downtown Hartford could see 1,000 new apartments over the next several years in five major projects and smaller conversions, the Hartford Courant reported. Some 85 percent of these units will

be studios and one-bedrooms, as developers aim to attract students and young professionals with affordable rents. Currently, studios in Hartford typically range in size from 480 to 950 square feet with rents from $1,000 to 1,500 a month, the Courant reported. “We’re at a critical stage for housing downtown,” Thomas Deller, Hartford’s director of development, told the Courant. “We want housing in Hartford to appeal across all income lines.” Of the projects vying for the $60 million the state has set aside for new downtown housing, the largest is the proposed conversion of the Bank of America office tower at 777 Main Street into 268 apartment units. Another is the planned conversion of the Sonesta Hotel into 193 units, including 54 studios. The Sonesta project could begin construction early this year, delivering units in 2014. Overall apartment vacancy in downtown Hartford is less than 5 percent, and even less for studio apartments. The overall Connecticut residential rental market showed signs of strength in November, the Courant reported. Rents rose 6.7 percent in New Haven from November of last year, while Hartford saw a 3.3 percent increase over the same period and Fairfield County registered a 2.9 percent uptick.

HUDSON VALLEY

Massive Will-O-Woods estate sells The Will-O-Woods estate in Croton-on-Hudson, one of the largest residential properties on the market in the Hudson Valley, is now in contract to be sold for the first time in 82 years, the Journal

Will-O-Woods

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80 January 2013 www.TheRealDeal.com

News reported. The 45-acre property, which has its own eight-acre lake, was on the market for $5.9 million with David Turner of Houlihan Lawrence. Turner, who had been marketing the property for two years, declined to reveal the sale price but confirmed that the property has gone into contract. The house has 14 rooms, eight bedrooms and 6.5 bathrooms. It has been owned since the 1930s by the family of Maurice Rosenthal, a onetime Securities and Exchange Commission official. Recently, the Rosenthals sold about 50 acres of the estate to New York City to preserve the land for its watershed. Compiled by Andrea Cetra

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

NATIONAL MARKET REPORT

The J. Edgar Hoover Building

Halle Berry

Hollywood Hills Actress Halle Berry has quietly listed her Hollywood Hills home for $15 million, TMZ first reported. The home recently made headlines when Gabriel Aubry, Berry’s ex-boyfriend, got into a fistfight there with her fiancé, Olivier Martinez. Berry reportedly has listed the 5,900-square-foot, five-bedroom house with Billy Rose at the real estate firm the Agency. Rose himself previously owned and renovated the property, which contains a 1,400-square-foot guest house, pool and spa. Pharrell Williams’ penthouse

Washington, D.C.

space and over 3,000 homes. Trulia shows that the median sales price

The federal General Services Administration last month announced

for Playa Vista homes between August and October was $535,000 —

that it is seeking proposals for a new headquarters for the Federal

2.7 percent higher than the same period of the previous year.

Bureau of Investigation, the Wall Street Journal reported. The 2.4 million-square-foot J. Edgar Hoover Building, which serves as the

Richmond

current FBI headquarters, is reportedly outdated and overcrowded.

Richmond-based Apple REIT Six has signed a $1.2 billion deal to be

The GSA said it hopes to exchange the Hoover building for a new site

acquired by BRE Select Hotels, an affiliate of Blackstone Real Estate

elsewhere in the city. Located on Pennsylvania Avenue near the White

Partners VII, Commercial Property Executive reported. Apple REIT,

House, the Hoover building sits on a 6.7-acre site zoned for office,

formed in 2004, is focused on hotel properties and has a portfolio

residential and other uses, and is a prime redevelopment site in a city

of 66 hotels with 7,658 rooms across 18 states. The REIT focuses

that is low on available development lots, according to the Journal.

on select-service and extended-stay hotels, such as Fairfield Inn,

Inventory of new condominiums in the capital region has dropped

Courtyard by Marriott and Hilton Garden Inn. The deal is slated to

sharply in recent years, according to data from Virginia-based real

be complete in the first half of 2013, according to Bloomberg News.

estate research firm Delta Associates. In the third quarter of 2012,

In May, Blackstone agreed to acquire another major hotel portfolio,

there were 2,797 new condo units under construction or being mar-

committing to buy a 1,102-property package of lodging destinations

keted in the capital region, Delta reported. That’s down from 3,629

in the U.S. and Canada from Accor for $1.9 billion.

in July 2011, and only a fraction of the number five years ago, when the area’s inventory neared 20,000.

Los Angeles

Chicago MetLife is set to pay roughly $120 million for an apartment building at 215 West Washington Street in Chicago, Crain’s Chicago Business

Brookfield Homes has reached an agreement to pay over $250 mil-

reported. Located in the city’s Loop neighborhood, the 50-story

lion for the remaining 110 acres of undeveloped land in the Playa Vis-

building has a total of 389 rental units. The owner, a joint venture

ta area of Los Angeles, the Wall Street Journal reported. Brookfield,

led by Chicago-based Jupiter Realty, developed the property in 2010.

which is controlled by Brookfield Asset Management, purchased the

Known as 215 West, the building was 95.9 percent occupied in the

land from the development company Playa Capital, which is owned

third quarter of 2012. The deal marks MetLife’s fourth acquisition

by a partnership including Goldman Sachs, Morgan Stanley and

of a high-rise in Downtown Chicago in the past 12 months: The firm

Oaktree Capital Management. Brookfield plans to construct 600

purchased the EnV apartment building for $122 million in Decem-

to 800 homes and 1,500 apartments on the site, while Dallas-based

ber 2011, and has since agreed to buy two West Loop office properties

Lincoln Property will develop office properties, a supermarket and

for a combined $221 million. In 2012, a total of eight buildings in

a movie theater. Playa Vista, a 1,000-acre area near the Los Angeles

Downtown Chicago traded for a combined $398 million, according

International Airport, was once largely undeveloped, but over the

to Crain’s. That’s down from 2011, when the city saw 17 sales for a

past decade has seen the construction of 2 million square feet of office

combined $1.43 billion.

82 January 2013 www.TheRealDeal.com

Miami Rapper and producer Pharrell Williams listed his three-story penthouse in Miami’s Bristol Tower for $16.8 million, Curbed reported. Williams purchased the 9,080-square-foot unit for $12.5 million in 2007. The five-bedroom condo on the building’s 40th floor has a pool and a home theater. Jill Eber and Jill Hertzberg of Coldwell Banker Residential Real Estate in Miami have the listing.

Conan O’Brien

Brentwood Comedian Conan O’Brien took a loss on the sale of his Brentwood, Los Angeles, home, the blog Real Estalker first reported last month. The home reportedly sold in June to a non-celebrity couple for $9.25 million, down from the $10.75 million O’Brien paid for the house in 2008. The home has six bedrooms, six fireplaces, a temperature-controlled wine room and pool. O’Brien and his wife have reportedly moved to Pacific Palisades, where they purchased a home for around $20 million in 2011. Compiled by Zachary Kussin

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Retail listings

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Deal Sheet summary

The Deal Sheet, on pages 86 to 93, covers transactions from 11/11/12 through 12/10/12. Please submit future deals to deals@therealdeal.com.

Sales

Overview

By type

Property sales Deals Dollars

54 $1,829,980,000

Financing Buildings Aggregate value

Development

Hotel

Industrial

Mixed-Use

Mixed-Use Multi-family

Transactions

By dollar volume (in millions)

66.30 178.60 11.80 46.68

Multi-family

733.38

Office

498.50

Retail

294.72

$372,750,000

Leases Office

Retail

Total

Leases square feet Office

592,183

Retail

107,310

Total

699,493

Office leases Office leases by industry Industry

Office leases sf by industry Leases

Industry

Top tenant reps for office leasing by sf

Square feet leased

Tenant representative

Square feet leased

Advertising & Marketing

Construction

Entertainment

Fashion*

Financial

Health & Beauty

Adams & Co.

29,595

Home Furnishings

28,793

Cushman & Wakefield

23,402

Jewelry

109,121

Rice & Associates

21,864

Legal

11,441

Colliers International

17,840

Logistics

8,700

Savitt Partners

11,735

Medical

Coldwell Banker Commercial Alliance

10,157

Other

43,944

CBC Hunter Realty

10,105

Retail

31,700

Murray Hill Properties

5,335

Science & Technology

54,045

Lee & Associates

5,308

Textiles

Heritage Realty Services

1,454

SBC Associates

1,350

57,444

CBRE Group

197,745

Studley

72,503

15,596

Jones Lang LaSalle

61,000

Fashion*

78,142

Williamson Picket Gross

34,899

Financial

137,123

Capstone Realty Advisors

32,192

4,750

6,014

900

4,470

Retail leases Top tenant reps for leasing by sf

Retail leases by industry

Broker

Discount

20,700

Fashion

14,355

Ripco Real Estate

Square feet leased 52,400

Retail leases sf by industry

Kalmon Dolgin Affiliates

9,600

Food & Beverage

19,100

RKF

8,805

Health & Beauty

36,600

Cushman & Wakefield

7,703

Mobile Services

NAI Friedland Realty

7,008

ABS Partners

4,100

Other

Podell Real Estate Advisors

4,000

Sholom & Zuckerbrot

4,000

Winick Realty

3,500

NYCRS

1,600

Besen Retail

1,400

Hanley Advisors

1,250

APE Realty (*includes showroom space)

1,163 15,392

700 www.www.TheRealDeal.com January 2013 85

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 11/11/12 to 12/10/12. Please submit future deals to deals@therealdeal.com.

Office leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

299 Park Ave

112,000

Aon / John Nugent, CBRE

Cerberus Capital Management / David Falk, Newmark Grubb Knight Frank

The insurance firm signed a sublease for the 14th, 21st, 22nd and 23rd floors, Crain’s reported. The asking rent was in the $50-per-square-foot range, according to the website.

4 West 58th St

61,000

Bruno Magli USA / Michael Higgins, Jones Lang LaSalle

Solow Management / S. Panzer, S. Rotter, Jones Lang LaSalle

The Italian shoemaker signed a new 10-year lease for the entire 10th-floor office space.

200 Fifth Ave

57,691

Tiffany and Co. / M. Steir, M. Barlow, D. Goldstein, G. Taubin, Studley

L&L Holding Co. / Represented inhouse

The luxury jeweler signed an expansion lease for another full floor, increasing its occupancy in the building to 405,489 square feet, the New York Post reported. The deal brings the building to 100 percent occupancy.

63 Madison Ave

54,045

IBM / J. Ackerson, C. Eriksen, CBRE

WestPoint Home / J. Freede, B. Iacovelli, M. Monahan, CBRE

The computer giant signed a sublease for the entire eighth floor. The building is owned by George Comfort & Sons and Loeb Partners Realty.

1440 Broadway

31,700

Macy’s / S. Gottlieb, M. Laginestra, CBRE

Monday Properties / Represented inhouse

The retail corporation signed an expansion lease for the entire 10th floor, bringing its total occupancy in the building to over 197,000 square feet.

205 Hudson St

28,793

One Kings Lane / Peter Gross, Williamson Picket Gross

TheLadders.com / Marc Shapses, Studley

The online home furnishings retailer signed a four-year sublease to expand from its existing space on the seventh floor to part of the eighth floor.

114 West 41st St

23,402

SpotCo / C. Lyon, M. Mandell, C&W

n/a / T. Stacom, D. Green, P. Alden, A. Aaron, C&W

The advertising firm signed a lease for the entire 18th and part of the 17th floors, the New York Post reported. The tenant is relocating from 512 Seventh Avenue.

551 Fifth Ave

20,400

International Gemological Institute / n/a

The Feil Organization / Jarod Stern, Studley

The laboratory for grading jewelry signed a new lease for the entire seventh floor. The landlord is building the space to suit for the tenant.

1441 Broadway

17,840

CPX Interactive LLC / R. Tunis, E. Ferriello, Colliers International

LH Charney & Associates / Richard Doolittle, Murray Hill Properties

The digital advertising company signed a lease.

400 Park Ave

14,812

Malayan Banking Berhad / D. Horowitz, G. Kerper, Studley

Waterman Interests / Represented inhouse

The Malaysian bank signed a lease for the entire 11th floor, the New York Post reported. The tenant had been subleasing space on the ninth floor.

10 West 33rd St

14,295

A Classic Time Watch Company Inc. / David Levy, Adams & Co.

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

The watch manufacturer and importer signed a 10-year lease renewal. The reported asking rent was $39 per square foot.

44 Court St (Brooklyn)

14,106

America Works of New York / K. Phelan, J. McLaughlin, Capstone Realty Advisors

n/a / Craig Berman, Joseph P. Day Realty

The private workforce development firm signed a lease for the entire seventh floor.

3 East 54th St

11,735

Renaissance Jewelry New York / H. Cygielman, M. Dubin, Savitt Partners

Cohen Brothers Realty / B. Mosler, D. Glassman, C&W; D. Nevins, M. Horowitz, Cohen Brothers Realty

The jeweler signed a new office lease on the sixth floor, the New York Post reported. The asking rent was $55 per square foot, according to the paper.

488 Madison Ave

10,311

Grassi & Co. / n/a

The Feil Organization / n/a

The accounting firm signed an expansion lease for the entire 23rd floor, adding to its existing space on the 21st floor. The tenant will now occupy 23,392 square feet in the building.

34 West 33rd St

10,157

Bon Bé Bé / Coldwell Banker Commercial Alliance

Arcade Building Associates / D. Levy, B. Maslin, Adams & Co.

The designer, importer and wholesaler of baby clothes signed a new 10-year lease. The reported asking rent was $42 per square foot.

88-11 165th St (Queens)

9,386

America Works of New York / K. Phelan, J. McLaughlin, Capstone Realty Advisors

n/a / N. Forelli, S. Markowitz, Muss Development

The private workforce development firm signed a lease for part of the ninth floor.

19 Fulton St

8,842

Lion TV / Elizabeth Juviler, Rice & Associates

Seaport Associates LLP / A. Weston, K. Fishel, Legacy Real Estate

The TV production company signed a lease.

145 West 30th St

8,101

Silver & Partners / n/a

The Feil Organization / n/a

The advertising agency and brand consultancy signed a three-year lease renewal on the seventh floor.

145 West 30th St

8,101

Mediabrix / n/a

The Feil Organization / n/a

The social and mobile advertising firm signed a lease on the fifth floor.

145 West 30th St

8,080

Propoint Graphics / n/a

The Feil Organization / n/a

The corporate presentation service firm signed a lease on the third floor.

444 West 36th St

7,500

Breakaway Courier / J. McLaughlin, R. Murtha, Capstone Realty

n/a / N. Joffee, B. Craig, Newmark Grubb Knight Frank

The logistics and courier company signed a lease for the entire building. The tenant is relocating from 335 West 35th Street.

270 Madison Ave

6,106

TechLaw Solutions / Peter Gross, Williamson Picket Gross

n/a / Doug Regal, ABS Partners

The litigation consultants signed a new five-year lease for part of the fourth floor. The tenant is relocating from 400 Madison Avenue.

1410 Broadway

5,635

Mirage Fashion of NY LLC / W. Siegel, T. Sullivan, CBC Hunter Realty

LH Charney & Associates / Richard Doolittle, Murray Hill Properties

The fashion company signed a lease.

30 Broad St

5,335

Kral Clerkin Redmond Ryan Perry & Van Etten LLP / R. Doolittle, J. Howard, Murray Hill Properties

Gotham Broad LLC / R. Doolittle, J. Howard, Murray Hill Properties

The law firm signed a lease.

648 Broadway

5,308

You Docs Beauty / Gabe Isaacs, Lee & Associates

Sierra Real Estate / Gabe Isaacs, Lee & Associates

The online health and wellness website signed a lease. The reported asking rent was $44 per square foot.

145 West 28th St

5,300

Bravo Media / Michael Hymowitz, Adams & Co.

n/a / Winoker Realty

The production company signed a new 10-year lease. The reported asking rent was $35 per square foot.

411 Fifth Ave

5,000

Designs by FMC Inc. / David Levy, Adams & Co.

411 Fifth Avenue Associates / David Levy, Adams & Co.

The jewelry designer signed a 10-year lease renewal. The reported asking rent was $46 per square foot.

1410 Broadway

4,470

Colorep / P. Sabesan, W. Siegel, T. Sullivan, CBC Hunter Realty

LH Charney & Associates / Richard Doolittle, Murray Hill Properties

The textile design and technology company signed a lease.

370 Lexington Ave

3,562

Specialty Reports Inc. / Matthew Kurzban, Rice & Associates

Boxwood Strategic Advisors / Curtis Woodside, Rice & Associates

The vehicle history reports website signed a lease.

928 Broadway

3,260

Colterjohn & Associates / Doug Rice, Rice & Associates

Grunberg Realty / Susan Donahue, Grunberg Realty

The tenant signed a lease.

510 LaGuardia Pl

3,050

Light Speed / Elizabeth Juviler, Rice & Associates

Fiji LLC / n/a

The courier service signed a lease.

312 Fifth Ave

2,500

J&B Arts Inc. / Brett Maslin, Adams & Co.

Cimantob Realty Co. / Brett Maslin, Adams & Co.

The tenant signed a new seven-year lease. The reported asking rent was $31 per square foot.

86 January 2013 www.TheRealDeal.com

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Office leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

312 Fifth Ave

2,500

Ronsco Construction Inc. / Brett Maslin, Adams & Co.

Cimantob Realty Co. / Brett Maslin, Adams & Co.

The construction firm signed a new seven-year lease. The reported asking rent was $31 per square foot.

261 West 35th St

2,250

Cavan Corporation of New York / Curtis Woodside, Rice & Associates

35 St Owners Corp Co-op / Audrey Hallett, H. Justin Realty Services

The construction management firm signed a lease.

411 Fifth Ave

1,454

Hego US Inc. / Heritage Realty Services

411 Fifth Avenue Associates / David Levy, Adams & Co.

The TV production services firm signed a five-year lease renewal. The reported asking rent was $44 per square foot.

153 West 27th St

1,350

Vaunte Inc. / P. Carrillo, R. Buckley, SBC Associates

Justin Management / n/a

The fashion portal start-up signed a new lease.

336-342 West 37th St

1,200

Grid Logistics / Jarad Winter, Capstone Realty Advisors

n/a / IGS Realty Co.

The logistics firm signed a lease for part of the eighth floor.

20 Fifth Ave

900

Dr. Galland / Doug Rice, Rice & Associates

20 Fifth Ave. LLC / Brett Weinblatt, Solil Management Corp.

The medical office signed a lease.

1133 Broadway

706

Light Touch Laser / M. Kabiri, W. Stein, Manhattan Commercial Realty

Kew Management / Represented inhouse

The spa signed a five-year lease for space in the office building.

Retail leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

1776 Eastchester Rd (The Bronx)

32,500

LA Fitness / Brian Schuster, Ripco Real Estate

n/a / Patricia Simone, Simone Development

The fitness chain signed a lease for another location.

924 Westchester Ave (The Bronx)

10,000

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

924 Westchester LLC / M. Mahony, E. Bukai, R. Senior, Ripco Real Estate

The discount retailer signed a 10-year lease for a corner space.

2027 Flatbush Ave (Brooklyn)

9,900

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

Group 2025 Realty LLC / R. Senior, M. Mahony, E. Bukai, Ripco Real Estate

The discount retailer signed a 10-year lease for a corner space.

1219 Third Ave

8,805

Men’s Wearhouse / Gary Alterman, RKF

Fraydun Realty Co. / Gary Alterman, RKF

The menswear retailer signed a lease for its first location on the Upper East Side.

200 Fifth Ave

7,703

LEGO Systems / J. Scibilia, A. Kahn, C&W

L&L Holdings / Represented in-house

The toy company signed a 10-year lease for a flagship store, the New York Post reported. The asking rent was $500 per square foot, according to the paper.

926 Third Ave (Brooklyn)

5,600

Attias Oven Corporation / Jean Cook, Kalmon Dolgin Affiliates

Industry City Associates / Jean Cook, Kalmon Dolgin Affiliates

The supplier of restaurant equipment signed a lease for ground-floor retail space.

1375 Metropolitan Ave (The Bronx)

4,008

Walgreens / R. Herko, S. Lorenzo, D. Scotto, NAI Friedland Realty

Mall Properties Inc. / R. Herko, S. Lorenzo, D. Scotto, NAI Friedland Realty

The drugstore signed a lease for another location.

58-50 Francis Lewis Blvd (Queens)

4,000

N&S Wines Inc. / Grant Dolgin, Kalmon Dolgin Affiliates

n/a / Grant Dolgin, Kalmon Dolgin Affiliates

The wine shop signed a long-term lease. The space also has a 4,000-squarefoot basement.

2111 86th St (Brooklyn)

4,000

Carter’s / M. Durst, Sholom & Zuckerbrot; J. Podell, Podell Real Estate Advisors

n/a / Ralph Hanan, Metropolitan Skyline Realty

The children’s clothing retailer signed a 10-year lease.

783 Lexington Ave

3,500

LUSH / Joseph Isa, Winick Realty

783/5 Lex Associates LLC / P. Braus, G. Steinberg, Lee & Associates

The cosmetics retailer signed a 10-year lease.

705 East 180th St (The Bronx)

3,500

First Steps Pediatrics / n/a

Crotona Center Corp. / Spencer Cohen, Sabre Real Estate Group

The pediatric office signed a lease for a storefront medical office. The practice is expected to open its doors Feb. 1.

23 West 45th St

2,500

Cock and Bull British Pub / Dean Valentino, ABS Partners

n/a / n/a

The restaurant signed a lease.

200 Ninth Ave

1,600

The Meatball Shop / J. Einbender, D. Valentino, ABS Partners

n/a / n/a

The restaurant signed a 10-year lease for its fourth New York City location. It is expected to open in the spring.

841 East 149th St (The Bronx)

1,500

Little Caesar’s Pizza / D. Scotto, R. Herko, NAI Friedland Realty

Simone Development / D. Scotto, R. Herko, NAI Friedland Realty

The pizza chain signed a lease for another location.

1600 Bruckner Blvd (The Bronx)

1,500

Popeye’s Louisiana Kitchen / D. Scotto, R. Herko, NAI Friedland Realty

G & T Consulting Co. LLC / D. Scotto, R. Herko, NAI Friedland Realty

The fast-food chain signed a lease for another location.

1268 Amsterdam Ave

1,400

Toast NYC / Elliott Dweck, Besen Retail

The Dermot Company / Sunburst Advisors

The restaurant signed a lease.

53-55 Houston St

1,250

Civilianaire / Robert Draizen, Hanley Advisors

n/a / J. Pruger, R. Kaplan, Newmark Grubb Knight Frank

The Los Angeles–based denim retailer signed a long-term lease for its first New York City location.

1774 Amsterdam Ave

800

Perry and Assoc. / n/a

Pritpal Kochar / H. Demetrious, I. Donath, NYCRS

The variety store signed a 10-year lease.

642 Lexington Ave

700

CHC Dining LLC / H. Demetrious, I. Donath, NYCRS

Macarthur Mgmnt Corp. / H. Demetrious, I. Donath, NYCRS

The restaurant signed a 10-year lease.

224B Atlantic Ave (Brooklyn)

700

CPR / Mark Camara, APE Realty

The Dermot Company / M. Mager, E. Dweck, Besen Retail

The cell phone and electronics repair company leased retail space.

88 January 2013 www.TheRealDeal.com

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Retail leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

195 Avenue A

600

Salon Spin / H. Demetrious, I. Donath, NYCRS

East Vill. Prop Mgmnt / H. Demetrious, I. Donath, NYCRS

The hair salon signed a 10-year lease.

350 Fifth Ave (Empire State Building)

463

ZAGG Inc. / Michael Kadosh, CBRE

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

The mobile accessories and technology company signed a lease for its first New York City store.

436 West Broadway

300

Happy Socks / D. Tordjman, N. Bobrow, Norman Bobrow & Co.

Centaur Properties / Sinvin Realty

The Swedish sock company signed a new 10-year lease for its first U.S. flagship.

199 Avenue A

300

Christine Han Huynh / H. Demetrious, I. Donath, NYCRS

East Vill. Prop Mgmnt / H. Demetrious, I. Donath, NYCRS

The ice cream and candy shop signed a 10-year lease.

243 East 78th St

181

n/a / n/a

n/a / Jill Lovatt, Massey Knakal

The gift shop signed a lease.

Buys Address

Size

Buyer / Representative

Seller / Representative

Notes

1411 Broadway

40-story office bldg

Ivanhoé Cambridge; The Swig Company / n/a

n/a / n/a

A 49.9 percent ownership interest in the property was sold for $360 million. The joint venture partners have hired Callahan Capital Partners to act as the building’s asset manager.

10 East 29th St

50-story apt. bldg, 404 units total

Invesco / n/a

Rose Associates / W. Heller, W. Silverman, E. Negrin, D. Parker, Studley

The Madison Belvedere sold for about $300 million, the New York Post reported.

8925 Avenue D and 856-860 Remsen Ave (Brooklyn)

278,000 sf retail complex

Cole Real Estate Investments / Represented in-house

Acadia Realty Trust / Andrew Scandalios, HFF

The Canarsie Plaza Shopping Center sold for $124 million.

45 East 53rd St

20-story, 113,000 sf office bldg

Kireland East 53rd Street / n/a

Santander / n/a

The property sold for $120 million.

430 West 14th St

61,321 sf retail bldg

Thor Equities / n/a

The Yucaipa Companies / D. Harmon, A. Spies, K. Donner, Eastdil Secured

The property sold for close to $100 million, the New York Post reported. Tenants at the building include men’s and women’s boutique Scoop, hair salon Edris, designers Rena Lange and Alexander McQueen and the Hogs N’ Heifers bar. Yucaipa purchased the property for $65 million in late 2011.

98 Montague St (Brooklyn)

14-story hotel

David Bistricer; Joseph Chetrit / Aaron Jungreis, Rosewood Realty

The Watchtower Bible and Tract Society of New York Inc. / Represented in-house

The Bossert Hotel sold for $81 million. The seller had owned and run the hotel since the early ’80s, using it for both short- and long-term stays by its members. The buyers plan to expand the number of hotel rooms to 302 from 224 and add a rooftop bar and restaurant, according to a release from Rosewood Realty, the purchasers’ representative.

103 East 86th St

91,260 sf apt. bldg, 48 units total

Stonehenge Management / Aaron Jungreis, Rosewood Realty

ABRO Management / A. Jungreis, D. Scheer, Rosewood Realty

The luxury rental building sold for $76 million, or $850 per square foot.

Manhattan and Brooklyn portfolio

14 apt. bldgs, 300 units total

Stone Street Properties; HIG Realty Partners / n/a

Robert Koppelman / P. Smadbeck, T. Gammino Jr., J. Nelson, J. Ciraulo, Massey Knakal

The package of 14 Manhattan buildings and two Brooklyn properties sold for $73 million, or $514 per square foot. The Manhattan properties are located primarily in Murray Hill, on the Upper East Side and in the East Village. They include 101 MacDougal Street, 104 East 7th Street, 438-440 East 13th Street, 236-236 East 33rd Street, 410 East 64th Street, 319 East 78th Street, 233 East 82nd Street, 310 East 83rd Street, 325 East 83rd Street and 504 East 88th Street. The Brooklyn properties are located at 354-356 State Street in Downtown Brooklyn.

224 East 39th St

187-room hotel

Atlas Capital Group / n/a

The Procaccianti Group / n/a

The Eastgate Tower Hotel sold for $69 million. The buyer plans to convert the property into a 190-unit luxury rental building.

498 West End Ave

12-story apt. bldg, 47 units total

Samson Management / Mike Sieger, Fenwick Keats

498 West End Ave Rlty / R. Anzalone, J. Wolk, Fenwick Keats

The property sold for $52.5 million.

309 West 57th St

102-unit apt. bldg

Imperium Capital; Bronstein Properties / n/a

n/a / n/a

The property sold for $42.5 million, the New York Post reported.

320 East 22nd St

94-unit apt. bldg

Benchmark Realty / n/a

Mann Realty / n/a

The property sold for $39 million, or $582 per square foot. The price represents a capitalization rate of 5.5 percent.

1042 Madison Ave

2-story retail bldg

JSRE Acquisitions / n/a

Emmes Management / Nat Rockett, Jones Lang LaSalle

The property sold for $36 million. Citibank signed a lease for the ground floor of the building in 2008, and continues to occupy the space.

260-268 Elizabeth St

5 apt. bldgs, 48 units total

Stone Street Properties / n/a

Marolda Properties / Edmund Levy, Cornerstone Property Group

The package of adjacent buildings sold for $33.5 million.

69 and 71-73 Greene St

2 mixed-use bldgs, 33,000 sf total

Local investor / C. Portelli, M. Ferrara, Highcap Group

Robert Zeisel / C. Portelli, M. Ferrara, Highcap Group

The properties sold for $33 million.

East 13th St between University Pl and Fifth Ave

8-story parking garage

n/a / n/a

n/a / A. Cohen, S. Hornstock, A. Maxson, J. Strizzi, ABS Partners

The garage sold for $32 million, or about $700 per square foot.

34 East 32nd St

90-room hotel

Alfa Development / n/a

n/a / n/a

The Hotel Grand Union sold for $28.6 million, or slightly less than $320,000 per room, Crain’s reported. Marshall Hotels & Resorts will manage the property, according to the website.

3560 and 4168 Broadway

Vacant theater, retail bldg and parking garage

Ben Ashkenazy / n/a

Emmes Properties / Robert Knakal, Massey Knakal

The properties sold for $19 million, Crain’s reported.

99 Hudson St

34,722 sf office condo

JMC Holdings LLC / Represented in-house

NAACP Legal Defense Fund / Janet Woods, Jones Lang LaSalle

The top three floors of the 16-story office building sold for $18.5 million. The buyer plans to gut renovate the space and build out the existing 7,500-squarefoot roof deck, according to the paper.

Queens portfolio

138 res. units

Astoria Lights LLC / n/a

38 Astoria Owners Corp. / Rubin Isak, Falco Isak Realty Services

The package of unsold, original sponsor units sold for $17.82 million. The apartments are located at 24-39, 24-51, 24-65 and 24-75 38th Street in the Astoria section of Queens. Ninety-nine units are free market, 27 are rent stabilized, 10 are rent controlled and two are sponsor-owned basement units.

1227 Broadway

51,420 buildable sf development site

John Lam / Venture Capital Properties

Pater Associates / B. Knakal, J. Ciraulo, Massey Knakal

The property sold for $16 million. The purchase allows hotel developer John Lam to have full control of the entire block front on Broadway between East 29th and East 30th streets, where he plans to build two separate hotels, a Marriott Renaissance and an Aloft, Crain’s reported.

237-241 East 34th St

Vacant 17,875 sf school bldg

n/a / Steven Forkosh, Platinum Realty

Yeshiva University / J. Ciraulo, K. Leifer, M. Azarian, Massey Knakal

The vacant lecture hall building sold for $15.5 million.

90 January 2013 www.TheRealDeal.com

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Buys continued Address

Size

Buyer/ Representative

Seller / Representative

Notes

215 West 108th St and 210 West 109th St

2 apt. bldgs, 44 units total

Joseph Franco / Peter Von Der Ahe, Marcus & Millichap

Fortuna Realty Group / Peter Von Der Ahe, Marcus & Millichap

The walk-up buildings sold for $14 million, or about $320,000 per apartment.

1 and 3 Bleecker St and 324 Bowery

6 res. units and 3 retail units

RWN Real Estate Partners; Silverstone Property Group / M. Cleeman, P. Trupia, Cohen Real Estate

n/a / M. Cleeman, P. Trupia, Cohen Real Estate

The contiguous properties sold for $13.4 million.

202 Coffey St (Brooklyn)

130,000 sf industrial bldg

Estate 4 / n/a

n/a / n/a

The factory space sold for $11.8 million, the New York Observer reported. The buyer has hired architecture firm Adjmi & Andreoli to help transform the property into a photography school and artist studios, according to the paper.

74 Washington Pl

5-story townhouse, 4 units total

Good Property / n/a

n/a / J. Nelson, M. Levine, Massey Knakal

The property sold for $9.3 million, or $2,112 per square foot. The site has about 2,317 square feet of available air rights.

246 East 53rd St

6-story apt. bldg, 21 units total

n/a / n/a

n/a / B. Knakal, C. Olsen, Massey Knakal

The property sold for $7.7 million

95 Chambers St

12,000 sf retail condo

Ascend Group LLC; HP Investors / P. Braus, P. Levitan, Lee & Associates

S. Myles Group / P. Braus, P. Levitan, Lee & Associates

The retail condo sold for $7.3 million.

291 West 230th St (The Bronx)

4,500 sf retail bldg

n/a / Jason Maier, Stan Johnson Company

The retail property leased to TD Bank sold for $7.1 million. The price represents a capitalization rate of about 5.4 percent. The tenant has 19 years remaining on its lease, with four five-year renewal options.

414 East 73rd St

6-story, 14,200 sf apt. bldg, 21 units total

Private investor / Rolfe Haas, Besen & Associates

n/a / Amit Doshi, Besen & Associates

The elevator building sold for $7 million, or $493 per square foot. The price represents a capitalization rate of less than 4 percent and a gross rent multiple of 15.

233 West 14th St

9-unit apt. bldg

Private investor / P. Von Der Ahe, J. Koicim, S. Gelernter, Marcus & Millichap

The property sold for $6.8 million, or $663 per square foot. The price represents a capitalization rate of 5.2 percent.

2828 and 2885 Valentine Ave (The Bronx)

2 apt. bldgs, 84 units total

n/a / Marcel Fridman, Barcel Group

The two properties sold for $6.5 million, or $82 per square foot. The price represents a gross rent multiple of 6.

338 West 17th St

5-story, 8,575 sf apt. bldg, 18 units total

n/a / M. Tabibnia, B. Farchi, Azad Property

The walk-up sold for $6 million, or $700 per square foot. The price represents a gross rent multiple of 13.

137 Fifth Ave (Brooklyn)

5-story, 6,830 sf apt. bldg, 4 units total

n/a / n/a

n/a / TerraCRG

The property sold for $3.75 million. The price represents a capitalization rate of 6.2 percent.

11 West 84th St

5-story, 7,300 sf apt. bldg, 5 units total

n/a / n/a

n/a / H. Oster, R. Shapiro, Massey Knakal

The property sold for $3.3 million, or about $452 per square foot.

701 St. Marks Ave (Brooklyn)

5-story, 19,500 sf apt. bldg, 23 units total

Local investor / Shlomo Antebi, GFI Realty

The property sold for $3.2 million. The price represents a gross rent multiple of 9.25.

175 East 90th St

4-story, 6,360 sf apt. bldg

n/a / Craig Leuzzi, Leuzzi & Assoc.

903 Hldg LLC / N. Carra, NLC Realty LLC Assoc.; M. Appell, Appell Assoc.

The property sold for $3 million. The price represents a capitalization rate of 6 percent.

5721 Sixth Ave

2-story school bldg

Private investor / n/a

n/a / J. Berman, V. Sozio, M. Tortorici, D. Tropp, Ariel Property Advisors

The property sold for $3 million.

368 Eighth Ave

7,225 sf mixed-use bldg

Private investor / P. Von Der Ahe, J. Koicim, D. Lloyd, Marcus & Millichap

n/a / P. Von Der Ahe, J. Koicim, D. Lloyd, Marcus & Millichap

The property sold for $2.99 million.

156 Broadway

3-story mixed-use bldg

n/a / n/a

n/a / TerraCRG

The vacant property sold for $2.65 million, or $354 per square foot.

1624 Amsterdam Ave

5-story, 11,835 sf apt. bldg, 8 units total

Private investor / V. Sozio, J. Deutch, Ariel Property Advisors

The property sold for $2.55 million.

2264-2266 Frederick Douglass Blvd

20-unit apt. bldg

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

The property sold for $2.53 million. The price represents a capitalization rate of 6 percent.

1649 Edison Ave (The Bronx)

5-story, 16,125 sf apt. bldg, 23 units total

Gionbalaj Management / Michael Kerwin, Rosewood Realty

Mata Realty Inc. / Michael Kerwin, Rosewood Realty

The walk-up sold for $2.35 million. The price represents a gross rent multiple of 8.5.

7136 Myrtle Ave (Queens)

2-story mixed-use bldg

n/a / n/a

n/a / Thomas Donovan, Massey Knakal

The property sold for $2.15 million, or about $168 per square foot.

606 St. Nicholas Ave and 129 Edgecomb Ave

Two 5-story apt. bldgs, 15 units total

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

The properties sold for $2.09 million.

12-16 East 177th St (The Bronx)

5-story, 21,950 sf apt. bldg, 22 units total

n/a / Amit Doshi, Besen & Associates

n/a / Aaron Jungreis, Besen & Associates

The walk-up sold for $1.7 million, or $77 per square foot. The price represents a capitalization rate of 12 percent and a gross rent multiple of 5.5.

Bronx portfolio

3 mixed-use bldgs

Private investor / S. Hirschfield, M. Tortorici, V. Sozio, Ariel Property Advisors

n/a / S. Hirschfield, M. Tortorici, V. Sozio, Ariel Property Advisors

The walk-ups sold for $1.61 million. The buildings are located at 983 Summit Avenue, 404 East 175th Street and 500-02 East 183rd Street.

127-129 Kingsland Ave (Brooklyn)

10,000 buildable sf development site

n/a / n/a

n/a / Christopher Pepe, NC Pepe Corp.

The vacant parcel sold for $1.6 million, or $160 per buildable square foot.

316 East 126th St

5-story, 8,615 sf apt. bldg, 10 units total

Private investor / V. Sozio, M. Tortorici, D. Tropp, J. Deutch, Ariel Property Advisors

The walk-up sold for $1.5 million.

2345-2347 Coney Island Ave (Brooklyn)

2-story, 5,280 sf retail bldg

n/a / Jack Cohen, Besen & Associates

The property sold for $1.32 million, or $250 per square foot.

213 Union St (Brooklyn)

3-story mixed-use bldg

n/a / n/a

n/a / TerraCRG

The property sold for $1.28 million, or about $290 per square foot.

139 Starr St (Brooklyn)

4-story apt. bldg, 8 units total

n/a / n/a

n/a / TerraCRG

The property sold for $1.2 million. The price represents a capitalization rate of 6.1 percent.

375 Prospect Pl (Brooklyn)

9,540 sf lot

n/a / n/a

n/a / TerraCRG

The vacant lot sold for $1.2 million, or $147 per buildable square foot. The buyer plans to develop a seven-unit apartment building on the site.

2270 Adam Clayton Powell Blvd

5-story, 6,355 sf apt. bldg, 5 units total

Private investor / V. Sozio, J. Deutch, Ariel Property Advisors

The property sold for $1.19 million.

For the best deal visit our website: www.TheRealDeal.com 92 January 2013 www.TheRealDeal.com

Financing Address

Size

Borrower / Representative

Lender / Representative

Notes

4 Union Square South

206,000 sf retail bldg

Vornado / n/a

n/a / n/a

A $120 million loan was secured to refinance the property, GlobeSt.com reported. The seven-year loan amortizes on a 30-year schedule beginning in the third year. Vornado realized net proceeds of $42 million after repaying the existing loan, according to the website.

9050 Parsons Blvd (Queens)

Mixed-use bldg

Mattone Group LLC / Robert Delitsky, HFF

Jefferies Loan Core LLC / n/a

An $81 million loan was arranged for Jamaica Center, a retail and office complex. Retail tenants include a National Amusements theater, Old Navy and Bally Total Fitness. The State of New York’s Queens Educational Opportunity Center leases the property’s entire office portion.

837 Washington St

Office bldg

Taconic Investment Partners; Thor Equities / E. Pariser, J. Pelusi, M. Gigliotti, HFF

M&T Bank / n/a

A $60 million construction loan was provided for the Morris Adjmi–designed office and retail building.

67-83 223rd Pl (Queens)

479-unit apt. bldg

The Estates at Bayside Owners Inc. / n/a

NCB / n/a

A $20 million first mortgage and a $5 million line of credit were arranged for the building.

150 East 61st St

131-unit apt. bldg

150 East Tenants Corp. / n/a

NCB / n/a

A $10 million first mortgage and a $2 million line of credit were arranged for the building.

250 West 94th St

147-unit apt. bldg

250 Tenants Corp. / n/a

NCB / n/a

An $8 million first mortgage and a $1 million line of credit were arranged for the building.

605 Park Ave

102-unit apt. bldg

605 Apartment Corp. / n/a

NCB / n/a

A $7.8 million first mortgage and a $500,000 line of credit were arranged for the building.

29-45 East 9th St

90-unit apt. bldg

29-45 Tenants Corp. / n/a

NCB / n/a

A $5.5 million first mortgage and a $2 million line of credit were arranged for the building.

30 Fifth Ave

140-unit apt. bldg

30 Fifth Avenue Owners Inc. / n/a

NCB / n/a

A $6.5 million first mortgage and a $500,000 line of credit were arranged for the building.

84-70 129th St (Queens)

135-unit apt. bldg

84-70 129th Street Owners Corp. / n/a

NCB / n/a

A $4.6 million first mortgage and a $300,000 line of credit were arranged for the building.

151 East 83rd St

82-unit apt. bldg

151 East 83rd Street Tenants Corp. / n/a

NCB / n/a

A $3.8 million first mortgage and a $1 million line of credit were arranged for the building.

105-10/30 66th Ave (Queens)

198-unit apt. bldg

Continental Gardens Apartment Corp. / n/a

NCB / n/a

A $4 million first mortgage and a $500,000 line of credit were arranged for the building.

225 East 76th St

45-unit apt. bldg

22576 Owners Corp. / n/a

NCB / n/a

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

1178 Washington Ave and 465 East 147th St (The Bronx)

38-unit apt. bldg

n/a / Angela Ortiz, Besen Capital LLC

Local savings bank / n/a

A $3 million loan was provided to refinance the property.

185 Marine Ave (Brooklyn)

46-unit apt. bldg

185 Marine Ave. Tenants Corp. / n/a

NCB / n/a

A $3 million first mortgage was arranged for the building.

141 East 3rd St

100-unit apt. bldg

141 East Third Owners Corp. / n/a

NCB / n/a

A $2.9 million first mortgage was arranged for the building.

329-337 West 85th St

34-unit apt. bldg

Townsend Mews Owners Corp. / n/a

NCB / n/a

A $2.4 million first mortgage and a $300,000 line of credit were arranged for the building.

925 Union St (Brooklyn)

49-unit apt. bldg

925 Union Street Tenants Corp. / n/a

NCB / n/a

A $2 million first mortgage and a $250,000 line of credit were arranged for the building.

370 Riverside Dr

75-unit apt. bldg

370 Riverside Drive Tenants Corp. / n/a

NCB / n/a

A $1.6 million first mortgage and a $500,000 line of credit were arranged for the building.

220 Berkeley Pl (Brooklyn)

58-unit apt. bldg

220 Berkeley Place Housing Corporation / n/a

NCB / n/a

A $1.5 million first mortgage and a $500,000 line of credit were arranged for the building.

45 West 10th St

87-unit apt. bldg

45 W 10 Tenants Corp. / n/a

NCB / n/a

A $1.8 million first mortgage was arranged for the building.

306 East Mosholu Pkwy South (The Bronx)

60-unit apt. bldg

Bedford House Apt. Corp. / n/a

NCB / n/a

A $1.5 million first mortgage and a $250,000 line of credit were arranged for the building.

1110 Caton Ave (Brooklyn)

32-unit apt. bldg

Caton/Stratford Owners Corp. / n/a

NCB / n/a

A $1.5 million first mortgage was arranged for the building, also known as 5 Stratford Road.

2 West 90th St

22-unit apt. bldg

2 W 90th St. Housing Corp. / n/a

NCB / n/a

A $900,000 first mortgage and a $250,000 line of credit were arranged for the building.

281 West 11th St

18-unit apt. bldg

281 West 11th Owners Corp. / n/a

NCB / n/a

A $900,000 first mortgage and a $200,000 line of credit were arranged for the building.

38-50 West 9th St

54-unit apt. bldg

38-50 West 9th Street Corp. / n/a

NCB / n/a

A $1 million line of credit was arranged for the building.

Other Deals Princeton International Properties closes $100M deal for Midtown office tower A $100 million deal between Princeton International Properties and Savanna for Park House, at 104 West 40th Street, officially closed last month after going into contract in September, the New York Observer reported. The sale to Princeton comes out to just under $500 per square foot, compared to the approximately $300 per square foot Savanna paid in a $64.5 million defaulted first mortgage buy in 2010. Savanna renovated the 20-story, 210,000-square-foot Midtown office tower, near Bryant Park on 40th Street and Broadway, shortly after acquiring the building —updating the elevators, building systems and lobby. (The deal was announced after the deadline for the Deal Sheet.)

Extell, liquidating assets ahead of new tower, sells Riverside Center development for $70M Last month, Extell head Gary Barnett and partner the Carlyle Group sold the Building 2 site at the Riverside The

Center development on the Upper West Side for $70 million, as Extell begins raising capital for its new 57th Street tower — currently poised to become the tallest residential building in the U.S., the New York Post reported. The buyers of the complicated $420 million development were Dermot and AFL-CIO Building Investment Trust. The project calls for 616 residential rentals, retail space and a school and has a $275 million state Housing Finance Agency bond mortgage with credit enhancements through Bank of America and Capital One. (The deal was announced after the deadline for the Deal Sheet.)

School Construction Authority pays $76 million for New York by Gehry school building The New York City School Construction Authority purchased the first five stories of New York by Gehry for a shade over $76 million, according to public records filed last month. The 100,000-square-foot space will continue to house PS 397 Spruce Street School, an early childhood and elementary school that has been leasing the site at 12

Spruce Street since the 76-story tower opened in 2011. The SCA’s purchase comes just over a week after developer Forest City Ratner sold a 49 percent stake in the tower for roughly $250 million to mammoth pension fund TIAACREF. (The deal was announced after the deadline for the Deal Sheet.)

Kaufman closes on Midtown South commercial building for $55 million The Kaufman Organization purchased a commercial building at 27-35 West 24th Street in Midtown South for $55.5 million, Crain’s reported. Thomas Gammino of Massey Knakal, who handled the sale, said that in 2008 a potential buyer had been ready to purchase the 11-story property for $52 million, when Lehman Brothers collapsed, ushering in the recession and causing the deal to fall apart. The building measures 94,075 square feet, with 10,000 square feet of retail and 84,075 square feet of storage, Property Shark data shows. (The deal was announced after the deadline for the Deal Sheet.) TRD www.TheRealDeal.com January 2013 93

Development updates CONSTRUCTION UPDATE

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94 January 2013 www.TheRealDeal.com

The Dermot Company and AFL-CIO Building Investment Trust announced plans for a 616unit, 43-story rental apartment building designed by SLCE Architects. The tower, the first of the five-building Riverside Center master development plan approved in DecemA rendering of ber 2010, will fea21 West End Avenue ture 30,000 square feet of amenity space, 23,725 square feet of retail space and a four-story New York City public school in the base. Building amenities will include a pool, hot tub, fitness center, wine bar and lounge, children’s playroom and dog grooming area. Construction will be completed in 2015. Contact: www.dermotcompany.com.

ie screening rooms and children’s playroom. MNS was the listing agent. Contact: www.williamsburgedge.com. LEASING UPDATE

Elmhurst

The Elm East 86-85 Broadway The 83-unit rental project, developed by James and Jerry Pi of Pi Capital Partners, is now 50 percent leased. Available units include one-bedroom apartments with monthly rents from $1,900 and ranging in size from 500 to 700 square feet. Two-bedroom homes are sized from 2,700 square feet, with rents starting at $2,900. Building amenities include a doorman and on-site building management. Contact: www.elmrentals.com.

Long Island City Crescent Club 41-17 Crescent Street Crescent Club

SALES UPDATE

Bedford-Stuyvesant 315 Gates Avenue The 72-unit, six-story condominium is now sold out. The building’s studios and one- and two-bedroom apartments were priced from $195,000. Units range in size from 435-square-foot studios to 1,566-square-foot duplexes. Building amenities include a rooftop terrace, virtual concierge service, refrigerated FreshDirect storage, residents’ lounge, movie screening room, bike storage, onsite parking and private storage facilities. MNS was the listing agent. Contact: www.315gates.com.

The 130-unit,17-story rental building, developed by Meadow Partners and Simon Development Group, is now 70 percent leased. Available homes include one-, twoand three-bedroom apartments, with rents starting at $2,625 per month. Units range in size from 581 to 1,000 square feet. Building amenities include a 24-hour attended lobby, fitness center, resident’s lounge and business center. The Marketing Directors is the agent. Contact: www.crescentclub.com.

Williamsburg

Upper East Side

199 South 1st Street Sales have launched at the eight-unit boutique condominium, developed by 199 South 1st LLC. One-bedroom apartments in the building, priced from $675,000, range in size from 610 to 951 square feet; two-bedrooms range from 789 to 804 square feet, with prices between $685,000 and $699,000. Building amenities include a laundry room and roof deck. Select units come with basement storage space. Aptsandlofts.com is the agent. Contact: www.aptsandlofts.com.

1214 Fifth Avenue The 53-story rental tower is now 50 percent leased. One-bedroom units in the building range in size from 700 to 950 square feet; two-bedrooms range from 1,000 to 1,200 square feet; and three-bedrooms start at 1,800 square feet. Monthly rents in the building range from $2,995 to $8,995 for penthouses. Building amenities include a 24-hour concierge, doorman and on-site valet, fitness center and pool. Related Companies is the leasing agent and management company. Contact: www.1214FifthAvenue.com.

The Edge 34 North 7th Street and 22 North 6th Street Douglaston Development’s 565-unit condominium has sold out. Units in the building include studios to three-bedroom residences, as well as duplexes, penthouses and townhouses. Amenities include onsite parking spaces, indoor/outdoor pool, spa, golf simulator, basketball court, mov-

Compiled by Andrea Cetra

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RESIDENTIAL DEALS Harlem $1.7 million 1485 Fifth Avenue, Apt. 27-28A

Three-bedroom, 3.5-bath, 2,386 sf unit in a new construction condo, Fifth on the Park; unit has dishwasher, hardwood floors; building has doorman, pool, children’s playroom, and fitness center; common charges $1,220 per month, taxes $29 per month; asking price $1.73 million; 25 weeks on the market. (Brokers: Michael Davis, Halstead Property; Victoria Rong Kennedy, Citi Habitats) “The buyer was relocating from Pittsburgh in order to work at Mount Sinai Hospital. [The family] was looking for a condo or cond-op on the Upper East Side for under $1.8 million. They looked at the Azure at 333 East 91st Street, which they really liked, but unfortunately the square footage [of the apartment] was about 1,400. When I brought them to this one at 119th Street, everything was very comparable, but it was 2,000 square feet. They fell in love. The size rather than the location was how they made the final decision. The negotiation part took a little while, one month all told. This was because Mount Sinai was relocating them and paid for half the cost, but the building normally only allows Citibank to finance on the property. But Sinai only works with Chase. So we had to go through all this [paperwork].” Victoria Rong Kennedy, Citi Habitats

Murray Hill $337,500 210 East 36th Street, Apt. 10J

479-square-foot studio in a 1961 co-op; unit has dining area, terrace, hardwood floors; building has doorman, live-in super; maintenance $903 per month; asking price $345,000; 24 weeks on the market. (Broker: James Nickerson, City Connections; Susan Goldenberg, Bond New York) 96 January 2013 www.TheRealDeal.com

“The seller had been living in that studio for 22 years and then found a larger apartment in the building. The terrace runs the entire length of the apartment, so for its price range it was unique. Everybody loved it, but they would get to the kitchen, which was really tiny, and say, ‘oh.’ I knew eventually I would find somebody who doesn’t need to cook that much. In August this buyer came with his broker, and as soon as he saw it, I could tell he thought this was going to be his home. [The buyer’s] job is in New York City, but he travels a lot. His primary residence is near Memphis; his wife and children are still living there but will eventually be moving North. This is one of the few co-ops that allows pied-à-terres. It was a very reasonable board and he was an all-cash buyer — and he was a real nice person — so they saw the makings of an excellent neighbor. The contract was signed Sept. 7, the board interview was Oct. 9, but because of the buyer’s travel schedule we had to wait till last [month] to close.” Susan Goldenberg, Bond New York

Tribeca

Predictions

from page 66

products from one another, sources say. That desire for different types of housing will intensify a growing chasm between the market for new construction — which often appeals most to foreign buyers — and for townhomes and co-ops, said Frederick Peters, president of Warburg Realty. In 2013, expect tonier co-ops to sit on the market, as sellers emboldened by headlines about rising prices in New York City list their homes for ever-higher sums, Peters said. “We’ve seen a lot of major inventory sit … because buyers are not willing to throw money at it unless they think it’s spectacular,” he said. CORE broker Michael Graves said he expected inventory to increase. But in the wake of the Presidential election and once the fiscal cliff is resolved — no deal had been reached at press time — sellers will be more likely to pull the trigger, he said. “We will see a healthier dose of inventory in the first and second quarters [first],” Graves predicted. Not everyone agreed with that assessment, however. Miller predicted that supply will likely remain constrained, which will lead to modest price appreciation. International buyers are not going anywhere either, Miller said, which could also buoy prices. “For all our problems [New York City’s market is] the lesser of all evils, and I see that continuing in 2013 because what’s driving [buyers here] doesn’t have a short-term solution — a softening economy in China and an economic bubble in South America,” he said.

“I think you will see investors go further out into the risk spectrum and decide it may make sense to develop or redevelop property instead of buying.”

$2.75 million 8-10 Warren Street, Apt. 5E

Dan Fasulo, Real Capital Analytics Given those factors, additional super-luxury developments are rising, as the development community salivates over moneyed foreigners. “You may see more One57s and 432 Park [Avenues],” Miller said, referring to Extell Development’s under-construction tower on West 57th Street and to the residential project that the CIM Group and developer Harry Macklowe just broke ground on.

Retail

L Two-bedroom, two-bath, 2,100 sf unit at Trinity Stewart, a loft-style condo converted in 2007; unit has marble baths, hardwood floors, keyed elevator, central air conditioning, and exposed brick; common charges $430 per month; taxes $17,628 per year, asking price $2.75 million; two weeks on the market. (Brokers: Sean Hughes, Town Residential; Kay Moon, Bond New York) “The buyers expect to have a baby, so they wanted Tribeca. They started looking around [at rentals] before the summer and couldn’t find anything, so I suggested they look to buy. But the inventory is so tight that by the time they made offers on [two] apartments, they were in contract. The third time, the apartment had just come on the market that day. [The wife] saw it and she loved it. We brought the husband in the evening, and the next day we made an offer for the full asking price. It was accepted on the same day. This building has a good school [district], so they were happy with it. Kay Moon, Bond New York

Interviews compiled and condensed by Guelda Voien

Side-street spillover effect

ast year was a strong year for Manhattan retail with big retail condo sales and rising rents. And some say that momentum is not likely to let up this year. “[This year] is only going to get better,” said Kelly Gedinsky, a broker with Winick Realty, noting that rents climbed by as much as 30 percent quarter over quarter on certain retail strips in 2012’s third quarter, the most recent data available at press time. Prices surged mostly in prime locations like Madison and Fifth avenues as well as in Times Square, Herald Square, the Meatpacking District and Soho. And Gedinsky predicted that those high rents will spill over to nearby side streets. In the Meatpacking District, more tenant interest has already been focused on Little West 12th and West 13th streets as retailers have moved beyond 14th Street. The same is true in Soho for Mercer, Greene and Wooster streets, where activity has been boosted because there are so few vacancies along Spring and Prince streets, she said. But Gedinsky said she expected to see more side streets adjacent to busy retail strips benefit from this spillover trend this year. But even as rents and activity rise in certain areas, others — notably along Second Avenue on the East Side, where the construction of the subway has killed activity for some time now — are stagnant or dropping, brokers said. Areas where revenues are not driven by tourism could suffer from ongoing depressed rents, said Jedd Nero, a retail broker with the CBRE Group. “When there is a blip, it’s the local players who bleed faster,” he said. Meanwhile, on pricey Fifth Avenue, a number of large blocks of space are coming to market next year. At Thor Equities’ 520 Fifth, about 77,000 square feet is due to come online, and at Crown Acquisitions’ 530 Fifth, about 42,000 square feet should be available, Nero said. He predicted that retailers might end up sharing the spaces in unconventional arrangements, since there aren’t that many tenants interested in such large blocks of space. TRD

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Insurance

from page 48

age in place if they have exhausted the aggregate limit?” said Andrew Lance, a Manhattan partner and co-head of the real estate practice group at law firm Gibson, Dunn & Crutcher. But the market for insurance is expected to flatten out after this Sandy-related crisis passes. Marks and others said they believed rates for impacted buildings in flood zones would likely rise by about 20 percent to 30 percent in the long term, or flood coverage could be excluded altogether. They noted that rates for buildings that are not in a flood plain were set to rise by 5 percent to 10 percent even before Sandy hit. Some are looking for avenues other than flood insurance to get reimbursed for damages incurred. But

that is not likely to work in Lower Manhattan, sources said. For example, in Brooklyn, Stuart Price, an attorney, is representing Greater New York Endoscopy Surgical Center, a tenant in the four-story 2211 Emmons Avenue in Sheepshead Bay, that lost millions of dollars in surgical supplies. An insurance adjuster said all the damage was from flooding, but Price is making a case that a hole in the roof was caused by wind damage. These efforts come as landlords and tenants are battling over who (or whose insurance company) is responsible for paying rent. For example, in some leases a landlord will only give rent abatements if he’s insured for the casualty, in this case a flood.

But sometimes when insurance policies exclude flood coverage landlords will turn to their tenants to make up the difference. Landlords have not sorted out all the insurance implications. For example, at 125 Maiden Lane, a commercial condo building owned by Time Equities, insurance payments will in part determine how the company prepares for future storms, whether that be moving mechanical systems out of the basement to above-grade floors or taking other steps, said Richard Recny, director of asset management for the company. “We have been advised to expect a 25 percent increase in flood insurance,” he said. TRD

along with hardwood floors and walls made of plaster rather than drywall, Miller said. The quality difference is a result of the postwar housing shortage, Miller said. “The name of the game was to get things up quickly,” he said. “Lower-cost housing for the masses was the mantra of the day, so construction quality changed.” (In fact, Miller said the two housing types are so different that when he does appraisals, he rarely uses postwar sales as a comparable for pricing prewar units.) Prewar buildings are also more likely to have fireplaces and baseboard and crown moldings, features which many New York homebuyers consider charming and desirable, Osher said. And the limited availability of prewar homes also adds to their value. “There’s a strong appeal to prewar property because it’s an irreplaceable asset, whereas there will be a lot of new buildings built,” Osher said.

actually add any substantial value to a property, Miller said. He estimated that the presence of a gym in the building adds less than 5 percent to an apartment’s total value. (He noted that gyms in new buildings usually come as a suite of amenities, which can include pools, sauna and spas.) In fact, buyers in luxury new developments these days seem to expect gyms as a bare-minimum feature, rather than a sought-after extra. “There are buildings [where] certain types of amenities are simply expected,” said Stephen Kliegerman of Terra Development Marketing. “Once you start getting above $2,000 or certainly $2,500 a square foot, your amenity package is going to have to be very good in order to justify your pricing.” But these health-oriented amenities don’t add as much value as some other features, Binder said, because many residents don’t use them, and they often mean additional costs for upkeep. That’s especially true for pools, he said. “People don’t use the pools,” Binder said. “They look nice and people use them as a means of deciding between properties, but they don’t want to pay for them.” TRD

Amenities from page 54 in Manhattan real estate by international investors. “Investors have a preference for new, because they don’t have to go through co-op or condo boards,” Binder said. Another factor is the increasing quality of new construction, Miller said, as developers aim to attract über-wealthy buyers from all over the world. “New development over the last 15 years has been continuing to move towards a higher luxury product,” he said. As a result, “the premium today between a 20-year-old [building] and new construction is larger than it was. The gap is widening.”

Prewar Just as New Yorkers are willing to pay more for brandnew construction, they’re also willing to fork over more cash for historic buildings. New York City homes built before World War II tend to be 10 to 15 percent more expensive than similar homes built in the decades after the war, Miller said. The reason? Prewar buildings tend to have better soundproofing and higher ceilings than their postwar counterparts,

Fitness center

Flashy fitness centers may help developers market new buildings, but the “jury is still out” on whether these amenities

Swig/Macklowe from page 68 became a design consultant in many of Swig properties, including 25 Broad Street. But in 2010, Swig filed for divorce, and Elizabeth put their Sagaponack estate on the market for $6.9 million. Then, things got uglier. In a 2011 suit against Bank of America, Elizabeth claimed that her husband conspired with the lender to use her as a front to shield his assets from being seized by creditors. In court papers, she claimed that Swig forged her signature on a 2006 letter of credit to rescue a $30 million nursing home deal that he was backing in Southampton called the Payton Lane project. She claimed the forgery allowed Swig to use the shares at their 740 Park Avenue co-op as collateral to protect the deal against delays and cost overruns that threatened to derail the project. Elizabeth alleged that a second $12.8 million loan was obtained through a forged signature along with a cover story from her husband that the loan was being used to refinance their Park Avenue apartment. Her father, meanwhile, also suffered devastating real estate losses during the financial crisis. Macklowe famously lost the prized possession of his portfolio, the General Motors Building, along with a half a dozen other prime Midtown towers. But now he’s back in the New York real estate game, teaming up with the Los Angeles–based CIM Group to convert 737 Park Avenue, a luxury rental building, into condos. In addition, he has at least two other major deals in the works, a 98 January 2013 www.TheRealDeal.com

95-story new construction condo at 432 Park Avenue, slated to be the city’s tallest residential tower, and a 34-unit rental at 150 East 72nd Street, which he’s converting to condos. Even with Macklowe staging a comeback, it’s not surprising that there’s still bad blood. Swig’s brother-in-law, Billy, told TRD in March that he never had a relationship with Swig, adding, “Do you know the difference between in-laws and outlaws? Outlaws are wanted.” In his October counterclaim against Macklowe, Swig alleged that the Macklowes hired his law firm, Morrison Cohen, to represent his wife in their contentious divorce case, knowing that the law firm was representing Swig in negotiations with various creditors. He also said Macklowe is trying to conspire with other creditors to put Swig into involuntary bankruptcy, which requires three unrelated creditors to join together. Swig also noted that Macklowe’s attorney, Stephen Meister — a partner at Meister, Seelig and Fein — is representing his Sheffield partners, Levy and Hoyda, who have accused him of embezzling millions of dollars at the building. In addition, he alleged in court papers that the Macklowes understood that he was negotiating a deal to restructure his finances, and agreed they would not use the loan to force a bankruptcy filing. Meister did not return calls for comment, but said in court papers that Swig never told Macklowe about any bankruptcy risk, nor did he ever make such a filing. “There is no statement by Mr. Swig that at any time in

the two years since the demand was served did he say to Mr. or Mrs. Macklowe, ‘you know, I’m going to have to file for bankruptcy, this will throw me over the edge,’ or words to that effect,” Meister told Justice Ellen Coin in a September court hearing. Y. David Scharf, a partner at Morrison Cohen, declined comment. But one of Swig’s investment partners, who asked not to be identified, predicted that Swig will be able to weather this storm and pay back the money he owes to creditors. “He reminds me of Bill Clinton,” said the investor. “He’s able to compartmentalize all the real crap going on around him.” TRD CORRECTIONS A N D C L A R I F I C AT I O N S In the December issue story, “NYC’s It buildings — past and present,” TRD incorrectly stated that new condo One57 does not have a sales office. It does in fact have a sales center, located in the Fuller Building at 41 East 57th Street. In the December issue story, “What’s ahead in 2013,” TRD incorrectly stated Keith Lipstein’s title. He is senior managing director at ABS Partners Real Estate.

www.TheRealDeal.com www.TheRealDeal.com January 2012 00

Rental brokers

from page 75

Stevens, where he focuses mostly on sales. But that didn’t stop him from tying for the third-priciest rental unit in Manhattan last year: a four-bedroom apartment at 151 East 58th Street that leased for $75,000 a month. The One Beacon Court unit went on the market in June, and was picked up in less than a month. Preidel rented the unit out for the owner, who purchased the apartment for $18.5 million in June 2010. At the time, a tenant was already occupying it, Preidel said. When that lease expired, the owner asked him to find another tenant, Preidel explained. The rental was one of three Preidel did in 2012 in deals he said ranged from $5,000 to this $75,000 transaction. He attributed his success partly to his business background. “I understand how entrepreneurs think,” he said. “I understand how financial people think. It’s a completely different mind-set, a completely different point-of view.”

Debbie Korb and Roberta Golubock

Sotheby’s International Realty

any in the New York City brokerage world know of Debbie Korb for the work she’s done with celebrities. She’s currently listing the $24.99 million Greenwich Village townhouse owned by acting power-couple Sarah Jessica Parker and Matthew Broderick. Previously, she’s worked with Julianne Moore and French fashion designer Thierry Mugler. But last year, she and fellow Sotheby’s powerbroker Roberta Golubock also tied for the fifth-priciest rental deal — a $60,000-a-month transaction at 50 East 73rd Street between Park and Madison avenues. (The townhouse was listed for sale in 2011 for $8.95 million, before renting this past April.) Golubock — who represented the buyers on the $52.5 million sale of Courtney Sale Ross’s apartment in May (see related story on page 60) — ranked fourth in sales production in Manhattan for Sotheby’s in 2010, according to the firm’s website. She also has a law degree from St. John’s University. Meanwhile, before becoming a broker, Korb’s career spanned the legal, banking and advertising industries. Korb did not respond to requests for comment, while Golubock declined to comment.

John Barbato

Stribling & Associates

nly four years into his real estate career, John Barbato is scooping up some of the priciest rentals in town. After abandoning a career in architecture to get his real estate license, Barbato began learning the residential market at a small, now-defunct residential firm on the Upper East Side before joining Stribling three years ago. His $60,000-a-month rental deal in Olympic Tower, a luxury condo at 641 Fifth Avenue near 51st Street, is Barbato’s priciest thus far, he said. But he has come close in the past, most notably with a $50,000-a-month deal in 2009 and others in the $20,000-to-$30,000 range, he said. In 2012, Barbato said he rented apartments priced between $5,000 and $60,000. “I pride myself on being comfortable with a client in any price range,” he told TRD.

He said he got to know the owner after some of his friends did a photo shoot for a clothing line in the apartment. The owners then contacted him about renting out the place two years later. The 11-room duplex was rented in February after nearly seven months on the market. He declined to reveal personal details about the owner or the renter.

Sam Bader

Brown Harris Stevens

fter 40-plus years of running his own legal recruiting firm, Sam Bader joined BHS just over eight years ago. Bader declined to comment, but according to his BHS profile, he became “intensely interested” in the New York real estate market because he owned four East Side co-op apartments, and served for 18 years on the board of a Park Avenue co-op. This year, he tied for the 10th-priciest rental in Manhattan — a $50,000-a-month townhouse at 9 East 77th Street between Madison and Fifth avenues. The five-story, six-bedroom townhouse has a garden, three terraces, a library and chef ’s kitchen. Bader has also closed a number of other transactions on the Upper East Side and has a listing for a $6 million Park Avenue co-op.

Bahar Tavakolian

Stribling & Associates

hen Stribling’s Bahar Tavakolian put a condo at 923 Fifth Avenue between 73rd and 74th streets on the rental market for $40,000 per month, she thought she had priced it too high. But when the unit, which has sweeping views of Central Park, quickly drew strong interest, she increased the price to $47,000. And sure enough, the unit received two competing bids, Tavakolian said. The condo owner eventually chose the bidder who wanted a longer, two-year lease, Tavakolian said. The deal, the 13th-priciest rental in Manhattan for 2012, closed in May after the unit was on the market for three months. Tavakolian said the owner is an out-of-towner who almost immediately put the unit up for rent after buying it for $10.9 million in December 2011 as an investment. The apartment has a full bar off the dining room and a media room. Tavakolian mostly does sales, but did six rentals in 2012 ranging from $7,000 to this $47,000 deal. She started out at Fox Residential, but has been at Stribling for nearly four years.

Andrea Wohl Lucas

Corcoran Group

uxury sales broker Andrea Wohl Lucas told TRD she’s beginning to understand the art of a rental deal. Lucas began her career in real estate in 1985 at Elliman, after leaving a job as a schoolteacher. While she’s focused on sales — she has a $4.1 million sale at 170 East End Avenue that recently went into contract and a $3.55 million listing at the same address — the Corcoran broker said some of her top clients are increasingly renting out their apartments as an alternative to selling. She said many investors are seeking a return on their investment through rentals and some sellers think they will get a better deal in the future and are therefore renting their

units in the interim. As a result, she’s now renting out apartments she’s previously sold. That was the case with a rental she brokered at 170 East End Avenue — which was built by Skyline Development in 2008 and where she’s done a number of deals. Indeed, she rented the 14th-priciest Manhattan rental of 2012 at the building: a $45,000-a-month unit. The owners moved out of the country, Lucas said. And rather than sell, they decided to rent to see if the market would improve, she said. Although she’s come close to renting out apartments at that price, she has yet to top it. In 2012, her rental deals ranged from $10,000 to $45,000 with about $200,000 in rental transaction volume, she said. She added that she did about eight to 10 rental deals in 2012.

Susan Barkin

Barkin & Associates

arkin, the founder of the boutique firm Barkin & Associates, started her own firm over 20 years ago. In addition to doing rentals and sales, the firm, which now includes nine other agents, also manages over 100 apartments in Manhattan. The firm’s current rental listings range from $3,500 to $11,000. Barkin’s $40,000-a-month, three-bedroom rental was in the high-profile 15 Central Park West and tied for the 15th priciest rental of 2012. It was leased in March after less than two weeks on the market. The building has a 75-foot pool, private restaurant and library. The corner unit was previously rented in April 2010 for $38,000 and sold for $14 million in May 2008. Barkin could not be reached for comment. Details on the owner and renter were not available.

Torsten Krines

Sotheby’s International Realty

lthough Torsten Krines began his career in real estate in the U.S. about eight years ago when he was humbly renting out $1,000 studios to college students, this year he rented one of the most expensive apartments in Manhattan. His real estate endeavors, however, began in Germany 15 years ago after he received his real estate license there. “I worked my way up,” he said. Last year, he rented out a $40,000-a-month townhouse at 36 Grove Street between Bedford and Bleecker streets in the West Village. The deal not only tied for the 15th spot on TRD’s priciest rental list, but was also the most expensive rental below 14th Street in 2012. The four-story, six-bedroom townhouse has a grand parlor entrance in addition to a garden-level entrance and chef ’s kitchen. The house was sold in January 2007 for $10.9 million. Krines, who focuses on luxury rentals, said the owner was introduced to him by one of his previous clients. Before Krines started at Sotheby’s in 2005, he worked at the Manhattan-based firm, Maison International, for two years, he said. Krines said he primarily does rentals ranging from $10,000 to $40,000, with the majority in the $20,000 range, and that a significant number of his listings are Downtown. TRD

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www.TheRealDeal.com January 2013 99

Breaking leases

from page 49

to keep the tower as an office building or convert it to residential, as Crain’s New York reported was being considered last month.

Future leases Going forward, landlords and tenants will negotiate their rights more aggressively in connection with how to deal with disasters. Real estate attorneys say some tenants will push to add clauses delaying when rent is due if the building isn’t fully operational or push for more lenient terms when it

comes to terminating their leases sooner after a disaster hits. “There is a term of art when it comes to leasing: tenantable, which means habitable. If you can’t use it to such a level where a reasonable party might say you can’t inhabit this office … depending on what the lease says, the tenant might be entitled to stay out,” Stroock’s Bart said. Daniel Ansell, co-chairman of the real estate litigation practice at law firm Greenberg Traurig, said the definition of tenantable in New York State revolves around whether the space is “usable.”

However, it’s often modified and “in some leases untenantability is limited to damage to the core and shell of the tenant’s space — other leases include lack of essential services and denial of access to the building,” he said. It may come down to arriving at a better definition. “It would be foolish for either party — landlord or tenant — to negotiate a lease as if a future disaster, like Sandy, were impossible,” said Ansell. “Leasing is all about allocation of risk,” he added. “It has always been about allocation of risk and always will be.” TRD

Biggest residential deals from page 61 of two apartments — has 10 bathrooms, two libraries and two dining rooms, according to the listing. Six exterior terraces overlook Central Park. Ross reportedly bought the two apartments in the 1980s for a total of $8 million. He passed away in 1992. The 740 Park Avenue spread was quietly shopped around in 2009 before officially hitting the market in 2011 for $60 million with Kathy Sloane of Brown Harris Stevens. “It’s a totally unique space,” said Sloane, who noted that she got the listing through a mutual friend. “This was an opportunity to have over 12,000 square feet in one of the best buildings in the world.” When the deal closed in May, it broke the record set by the 2008 sale of a spread at 2 East 67th Street to Loews Hotels CEO Jonathan Tisch for $48 million. Other high-profile residents of 740 Park include billionaire Stephen Schwarzman, co-founder of the Blackstone Group, and fashion designer Vera Wang. Roberta Golubuck of Sotheby’s represented the buyer, but was not available for comment. The deal came just one month after Marks took Oaktree public with $79 billion in assets.

834 Fifth Avenue, #12B

Closing date: Jan. 31, 2012, Price: $42 million

he year started out with a bang when Robert Bass, the founder of investment firm Oak Hill Capital Partners, paid $42 million for a 12th-floor unit at the exclusive coop, 834 Fifth Avenue. Bass, said to be worth close to $3 billion, ranked 88th on the 2011 Forbes list of the 400 richest Americans. He bought the apartment from fellow financier Damon Mezzacappa, head of the now-defunct private investment firm Mezzacappa Management and former vice chairman of financial advisory firm Lazard Frères & Co. Mezzacappa was represented by his wife, Katherine Bryan of Sotheby’s. Elsie Nelson of Brown Harris Stevens represented Bass. Mezzacappa told The Real Deal he sold the apartment because he moved to Florida after winding down Mezzacappa Management. The white-glove co-op was constructed in 1930 and designed by architect Rosario Candela. News Corp. Chairman Rupert Murdoch and Charles Schwab, head of the eponymous brokerage and banking firm, are also residents of the building.

The Stanford White Mansion, 973 Fifth Avenue

Closing date: June 21, 2012 , Price: $42 million n June, a mansion at 973 Fifth Avenue designed by famed architect Stanford White sold for the same price as Mezzacappa’s unit. The 15,225-square-foot house, located between East 78th and 79th streets, had been listed for $49 million by Brown Harris Stevens broker Paula Del Nunzio.

100 January 2013 www.TheRealDeal.com

The deal marked the priciest sale of a Manhattan townhouse in 2012, though the overall record for the city’s most-expensive townhouse sale is still held by the Harkness Mansion. Del Nunzio, who declined to identify the buyer or seller, said 973 Fifth “was one of the last two mansions designed by the illustrious Stanford White. It contained not only all the original interior detail of its famed architect, but also his original floor plan. … The view from the roof of Central Park was pure perfection.” According to public records, the seller of the Stanford White Mansion was an entity called OBE Holdings, and the buyer was 973 Fifth LLC. Plans were recently filed to renovate the property, according to data provider PropertyShark. The home was designed in the early 1900s for banker and railroad tycoon Henry Cook. Prior to Del Nunzio’s listing, it had not been on the market in more than 30 years.

2 East 70th Street, #PH13A Closing date: June 11, 2012, Price: $40.06 million

he stringent co-op board at 2 East 70th Street this spring approved Laure Sudreau-Rippe — an attorney and a minority owner of the agricultural commodities conglomerate Louis Dreyfus Holding BV — to purchase an apartment owned by the late private equity giant Ted Forstmann. Sudreau-Rippe paid approximately $40 million — 11 percent above the asking price — for the 4,000-square-foot home. Forstmann’s estate was represented by Meredyth Smith and Serena Boardman of Sotheby’s. Sudreau-Rippe was represented by Brown Harris Stevens broker Dominic Paolillo. The three-bedroom unit was never formally listed for sale, but reportedly has a wraparound terrace with views of Central Park. Forstmann, who famously dated actress Elizabeth Hurley and “Top Chef ” host Padma Lakshmi, died in 2011 of brain cancer. He was the chairman and CEO of IMG Worldwide, a sports and fashion-marketing company. Smith told TRD the apartment was subject to a bidding war. “It’s one of the most extraordinary penthouses on Fifth Avenue,” she said.

730 Park Avenue, PH Oct. 24, 2012, Price: $39 million nother “whisper listing” that sold this year was the 12room duplex at 730 Park Avenue, which traded for $39 million in October. Daniel Benton, co-founder of technology-based hedge fund Andor Capital Management, bought the unit from a seller named Joann Walker, public records show. The listing was a co-exclusive between Stribling and the Sotheby’s team of Smith and Boardman. The four-bedroom penthouse reportedly features five Closing Date:

terraces, a solarium, a greenhouse breakfast room and a 37-foot-wide living area. Benton and his wife, Anne, reportedly own another unit in the building, which they purchased for $21 million in 2007. Whisper listings are challenging to market, but “at the upper, upper end of the market, the buyers and sellers really prize discretion,” Smith said. To unload the property, “we quietly reached out to brokers we know who work with appropriate types of buyer.”

15 West 63rd Street, #29A Nov. 19, 2012, Price: $33.5 million iza Aziz, a Hollywood producer and the son of former Malaysian Prime Minister Tun Abdul Razak, paid $33.5 million for a seven-bedroom condo at the Park Laurel on 63rd Street in November. Aziz, whose company is currently producing the Martin Scorsese film “The Wolf of Wall Street,” bought the unit from Peter Edward Chadney and Simone Cecile Von Graffenried Simperl, both residents of Switzerland, public records show. The unit was not publicly listed, and a spokesperson for Aziz told TRD that no brokers were involved in the deal. The sellers purchased the apartment for almost $24 million in 2010, according to public records. The 15-room duplex has 7,728 square feet of interior space and a terrace. Aziz most recently produced the movie “Friends with Kids.” Closing date:

1030 Fifth Avenue, #9W Closing date: April 17, 2012, Price:

$31.5 million ech mogul George Blumenthal closed on the $31.5 million sale of his six-bedroom, prewar co-op in April, just three months after listing it with Warburg Realty’s Bonnie Chajet and Ronnie Lane. The 6,000-square-foot unit at 1030 Fifth Avenue, a white-glove building on the corner of 84th Street, closed for $3.5 million less than the initial asking price. The ninth-floor unit was purchased by hedge funder Zachary Jared Schreiber and wife Lori, who were represented by Brown Harris Stevens’ Blackmon. The Schreibers also own a three-bedroom apartment at 15 Central Park West, which they listed briefly with Blackmon in 2011. The unit is no longer on the market, according to StreetEasy. Their new apartment at 1030 Fifth Avenue has a library, a formal dining room with a fireplace, a gym and two maid’s rooms, according to the listing. Chajet declined to name the seller, but said she sold the apartment to him more than 20 years ago. When he was ready to sell, “he came back to me,” she said. “He was an empty nester ready to change his lifestyle.” Chajet said he has since moved into a smaller apartment in a more modern building on the West Side. TRD

www.TheRealDeal.com January 2012 00

RLS

from page 20

Binder, whose firm Bellmarc Realty uses a proprietary listing system, said he has spent more than $100,000 to prepare to integrate his software with the new RLS.

Years in the making The changeover has been years in the making. REBNY sent out a request for proposals for a new data platform in June 2010 and announced in September 2011 that it was working to implement the new system. The new system — which is called Stratus Data Systems’

RETS — will replace R.O.L.E.X. R.O.L.E.X. “served the community well for a really long time,” Wagner said, “but we needed new technology.” A REBNY news release called the Stratus the “national standard” and said it will allow brokers and agents “access to the new marketing tools and software available nationwide.” Goldschmidt likens the “painstaking process” to a heart transplant, saying it needs to be completely seamless so that it doesn’t disrupt brokers’ business.

But after focus groups with around 30 New York City brokers, the third-party listings services like OLR are now using the beta version of the system and working out the kinks. Still, Goldschmidt said that other than the faster system and new features, the interface won’t look different to brokers and that RLS users will not have to learn how to use a new software program. “There is no change as to how brokers will get their data,” Goldschmidt said. TRD

apparently later let Follieri drive his white Mercedes. Ponte never recovered the money, the magazine said.

One broker who has worked with the family said leasing is a smart strategy in the current tight lending market, when developers can’t get big loans to buy property and build on it. Leasing is “what you do when nobody is lending,” the source said. In the meantime, the landowner gets to improve the quality of the industrial parcel with a new building, which enhances its resale potential down the road. In the end, though, the possibility of paying more taxes on land sales in the near future may be the more relevant driving force, said Ivan Hakimian of the commercial brokerage HPNY, who was speaking about family sales in general and not the Pontes specifically. “Capital gains taxes are going to go up,” he said, “whether we like it or not.” They may have chosen the right time to take action. Turner, for one, sees sales prices continuing to rise in North Tribeca. “The great news for all of Tribeca is if these new buildings come in at $2,000, $2,500 a foot, they will raise the value of everybody’s property,” said Turner, who has lived on Greenwich Street for 12 years. “It will be a benefit across the board.” TRD

Ponte from page 52 trash haulers in New York. For years, the company was rumored to have ties to the Mafia, including the Gambino and Genovese crime families. In the mid-1990s, the Ponte family was the target of an elaborate sting operation, resulting in Vincent Ponte pleading guilty to offering bribes to an undercover detective in connection with the waste management business. At a diner in Soho, Vincent allegedly slipped the detective an envelope stuffed with $5,000 in cash. Later, at a Tribeca restaurant, came another bribe, also for $5,000. In 1997, before their trial began, Angelo pleaded guilty to corruption and spent two years in federal prison. Vincent, meanwhile, received probation. Both were also permanently banned from working in New York’s waste management business. But the Pontes have been victims, too, of a swindle by Raffaello Follieri, the Italian real estate entrepreneur who was romantically linked to actress Anne Hathaway and later imprisoned for fraud. Vincent Ponte invested $300,000 with Follieri in the early 2000s, according to the magazine Vanity Fair, and

Change in direction Since leaving their Manhattan trash hauling business behind, the Pontes seem to have taken a more active role in managing their real estate. In 2005, they sold a collection of contiguous lots at 15 Renwick Street, which they’d owned for 25 years. Under new ownership, the site fell into foreclosure during the recession. It’s now being developed as a condo by Izaki Group Investments and Glacier Global Partners. A hint of the uptick in activity is that Vincent, now nearly 60, has been seeking counsel from prominent real estate attorneys regularly; Jay Neveloff, a partner at Kramer Levin Naftalis & Frankel, told TRD last month that he now speaks with Ponte almost every day. (Neveloff declined further comment.) But the family seems unwilling to truly let go of many of its holdings. That’s evident by the fact that they’ve leased sites to Chang and the Jack Parker Corporation, rather than selling them outright.

Top commercial deals from page 62 tember, along with Crown Acquisition’s $390 million purchase of 530 Fifth Avenue in January and Normandy Real Estate Partners’ $360 million purchase of 575 Lexington Avenue in October. David Eyzenberg, principal in the investment banking division of commercial firm Avison Young, said traditional large office building investors, such as real estate investment trusts and pension funds, are in a holding pattern because the market for returns is flat. “They are not under pressure to sell and are having difficulty finding suitable replacement investments. Why sell at a 4.5 [capitalization rate] and buy at a 4.5 cap?” Eyzenberg said. Indeed, seven non-office properties also made the list — a fact that was largely spurred by investors turning to other asset types they believed would produce higher returns, such as retail. “In 2012, of the top 10, three were retail and four were residential. In 2011, there were no top 10 retail [sales] and only one residential,” said Charles Kingsley, a principal at Avison Young. Some of the big non-office building deals that made the list were Vornado Realty Trust’s blockbuster $707.8 million purchase of the retail condo at 666 Fifth Avenue (which ranked at No. 2) and UDR’s $630 million purchase of Columbus Square, a group of five large apartment buildings on the Upper West Side with 710 units (which ranked No. 3). As TRD reported throughout last year, multi-family properties like the Columbus Square deal grabbed the attention of investors, as the rental market appeared to have more of a potential upside than the office market. “Purchasers were willing to pay top dollar for residential assets for their perceived strength/stability and growth potential,” Kingsley said. In addition to RXR, Crown, Normandy, Vornado and 102 January 2013 www.TheRealDeal.com

UDR, the mega Midtown-based teachers’ pension fund TIAA-CREF was also a buyer on one of the 10 priciest buildings to sell in 2012. The fund — with nearly $500 billion in assets — paid Related Companies approximately $542.5 million for a 70 percent stake in the rental tower MiMA at 450 West 42nd Street. Other buyers among the top 10 in 2012 included the Indian firm Sahara India Pariwar, which bought a portion of the famed Plaza Hotel; French jewelry store Richemont, which bought the retail at the St. Regis; the Chicago-based Strategic Hotels & Resorts, which bought the Essex House, a hotel at 160 Central Park South; and Invesco, which bought the Madison Belvedere, an apartment building with roughly 400 units at 10 East 29th Street. While no brokerage firm dominated the top 10 investment sales, Eastdil Secured’s team of Douglas Harmon and Adam Spies represented the most deals, with three transactions totaling $1.38 billion. No other firm had more than one deal. Darcy Stacom and William Shanahan, vice chairmen at the CBRE Group, handled the largest brokered deal, representing sellers of the 666 Fifth Avenue retail condo — Carlyle Group, Kushner Companies and Crown Acquisitions.

Leading office leases Manhattan office leasing experienced a parallel slowdown in activity. The overall volume of deals declined in 2012 by about a third to roughly 27 million square feet from more than 40 million square feet in 2011. Of the biggest 10 Manhattan leases in 2012, a stunning nine were renewals, illustrating the conservative tack many companies are taking to keep spending down. “Companies did not want to spend capital,” explained Greg Taubin, executive managing director at tenant-rep firm Studley.

In addition to Viacom’s 1.6 million-square-foot renewal and expansion, Morgan Stanley renewed 1.2 million square feet at 1 New York Plaza in the Financial District. (The building was later hit by Hurricane Sandy and remained closed for several weeks. The office portion of the building has reopened, but its lower-level retail is being completely reconstructed because of the storm damage.) Other large renewals included Swiss Bank UBS signing for 920,000 square feet at 1285 Sixth Avenue and Citibank taking 475,000 square feet at 601 Lexington. While real estate insiders repeatedly said that banks and other financial service firms were scaling back office space in 2012, those companies ended up signing some of last year’s biggest Manhattan office leases. Indeed, four of the top 10 leases were inked by banks — three of those were renewals, and the other was a renewal and expansion. However, their leases may be part of a regional consolidation that reduces the company’s overall New York–area office footprint, said David Berkey, an executive vice president of leasing at Midtown-based landlord L&L Holding. “They might be expanding at [one] building, but they are consolidating from other locations,” said Berkey, speaking generally about the large financial firms. The only relocation lease on the top 10 list was the U.S. General Service Administration’s 270,000-square-foot lease at 1 World Trade. In addition, some of the most active tenants taking space — those in the technology and media sectors — opted for less square footage per employee in 2012. And companies in other industries may soon follow suit, said Robert Sammons, a vice president of research for Cassidy Turley. “Those that have been leasing recently [such as tech, media and advertising] use less square footage per employee, but other industries are now doing the same,” he said. TRD www.TheRealDeal.com January 2012 00

Photographers

from page 42

rior space with a variety of exposures and then blends the different shades of light into the final image, giving it a warm and inviting feel. Most photographers merge images with a computer program, but Arellano said he prefers to do it manually, even though it takes much longer. “The difference is enormous,” said Arellano, who is originally from Miami and has also worked in fashion photography. “The photos are so much more beautiful. You want to walk into the room and sit down.” Arellano’s photos “can direct your eye to a certain point in the room,” Beare said. “He hits it every time.” Arellano typically charges about $150 for the first photo, and then reduced amounts for each subsequent image. He charges less for bulk deals with firms like Halstead Property, Elliman and Core, he said, because he benefits from the consistent work a large brokerage can provide. Once he’s on a firm’s list of approved photographers, it acts “like my agent, in a way,” he said. “If a company has 1,000 brokers and 25 photographers on the list, they’ll call regularly.”

John Porcheddu Unlike the many independent real estate photographers in the city, John Porcheddu doesn’t have to worry about finding work. As one of the go-to guys on staff at Gotham Photo Company, a leading New York City real estate photography provider, Porcheddu is guaranteed a steady flow of clients. Gotham — which specializes in doing listing photos, headshots, video and floor plans for real estate brokers — was founded in 2005. Porcheddu is one of its most-requested photographers, according to Gotham president Vince Collura. “Clients request their favorite photographers, and John gets a lot of calls,” Collura said. “Many of our guys have

specialties that could make them a good fit for a particular [listing], but John does it all.” Porcheddu, who started taking photos as a hobby in high school, said working for Gotham allows him to focus on shooting rather than logistics. “Instead of spending half of my time on advertising and stuff, I can just go and take pictures,” he said. Through Gotham, Porcheddu charges $175 for a six-photo standard shoot, while larger, time-consuming packages can run over $300.

Michael Weinstein When Town Residential broker Ginger Brokaw has an important listing, she said, she’s willing to wait for veteran photographer Michael Weinstein, one of several photographers on Town’s list of approved vendors. “I would wait a week for Michael … especially if it was something unique or challenging,” Brokaw said. “I return to him time and time again.” Weinstein was working in fashion about 16 years ago when he approached one of the marketing executives at Halstead about taking headshots of the firm’s brokers. The executive responded by asking if he’d ever shot properties. “I said, ‘I never got paid for it, but I’ll certainly try,’” Weinstein recalled. He discovered he had a knack for it, and his business took off. “I got busy really quickly,” he said. Weinstein said he usually charges a flat rate, but sometimes negotiates prices with individual brokers, depending on the number of photos needed for a listing. He recently did the FRANK photos for a co-op at 828 Fifth Avenue listed for $72 million. Dennis Cusack, director of sales at Town, said Weinstein’s photographs helped draw a huge buyer turnout for a listing

at 225 West 95th Street. “The first open house I think there were 45 people, and the second one was in the high 30s,” Cusack said. “Probably one of the most important things about the listing is the photography, and that’s why we go to Michael.”

Richard Caplan Former Wall Street trader Richard Caplan became a professional photographer only five years ago, but has already shot over $2 billion worth of real estate, including a penthouse asking $48 million at 145 Hudson Street. Caplan said he decided to move into photography so he could spend more time with his family. The career change made sense, he said, since “I’ve had a camera in my hands since I was seven years old.” High-profile Elliman agent Fredrik Eklund said he’s worked with Caplan for years, and has even paid to fly Caplan to Sweden (where Eklund runs a brokerage) for real estate shoots. “I’ve grown to trust him,” Eklund said. “I don’t even go to the shoots anymore.” Eklund said Caplan instinctively shoots details within an apartment that convey a desirable way of life. “We not only sell property, we sell a lifestyle,” Eklund said. “The photos need to be perfect.” “Whether it’s a beautiful flight of stairs or an open floor plan, I’m looking for that sweet spot in the room,” said Caplan, who has an assistant and an editing team. But he noted that there isn’t a lot of room for ego in real estate photography. “As much as I like to see myself as an artist, I am here to help a salesperson,” he said. “The job is going to be what they want it to be.” TRD

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www.TheRealDeal.com January 2013 105

C A L ENDAR

J ANUA R Y 7

The New York Chapter of the American Institute of Architects presents a “Coffee Talk,” with Joseph LePique and Jeremy Woodoff of the New York City Department of Design and Construction. The Neighborhood Preservation Center, 323 East 11th Street. 8:30 to 10 a.m. Free. RSVP required. Information and registration: cfa.aiany.org.

The Real Estate Lenders Association hosts its 22nd annual “New Year’s Networking Celebration.” Cipriani, 110 East 42nd Street. 6 to 9 p.m. Fee: $250. Information and registration: www.rela.org.

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The Real Estate Board of New York presents a seminar on Local Law 87 compliance. LL87 requires all buildings over 50,000 square feet to file an energy efficiency report with the Department of Buildings once every 10 years. To facilitate compliance, this seminar will feature experts from New York City government, the Urban Green Council, Tishman Speyer and NYSERDA discussing key aspects of the law. REBNY Mendik Education Center, 570 Lexington Avenue. 8:30 to 11 a.m. Free. Members only. Information and registration: www.rebny.com.

The New York Society of Architects hosts its 106th annual awards dinner dance. This year’s honorees include John di Domenico of di Domenico + Partners, who will receive the Shelly L. Strauss Award; Dolly Williams of A. Williams Construction and Thomas Hanrahan, dean of the Pratt Institute, both of whom will receive Distinguished Achievement awards; and architects Elliot Glass of Glass and Glass and Anthony Morali of Morali Architects, who will both receive Distinguished Service awards. Tribeca Rooftop, 2 Desbrosses Street. 6:30 to 10:30 p.m. Fee: $250 for members, $300 for non-members. Information and registration: www.nysarch.com.

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The Council of New York Cooperatives & Condominiums hosts a two-day seminar, “An Introduction to Co-op Board Responsibilities: An Intensive Seminar for New Directors.” Attorney Marc Luxemburg and property manager Gregory Carlson will discuss all aspects of operating a cooperative. Location to be announced with purchase of tickets. 6 to 9:30 p.m. Fee: $125 for members, $200 for non-members. Information and registration: www.cnyc.com.

The Institute of Real Estate Management hosts its annual awards dinner. Hector Pinero, senior vice president of Related Management Company, will be named Certified Property Manager of the Year. Bob Friedrich, president of Glen Oaks Village and founder of the Presidents Co-op & Condo Council, will be named Real Estate Person of the Year. The Water’s Edge, East River at 44th Drive, Long Island City. 6:30 p.m. Fee: $200. Black tie optional. Information and registration: www.iremnyc.org.

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The New York City Chapter of CoreNet Global hosts a New Year’s party. Ring in the New Year with CoreNet colleagues and enjoy cocktails and hors d’oeuvres with the best view in town. Top of the Rock, 30 Rockefeller Plaza. 6:30 to 10:30 p.m. Fee: $50 for end-users, $125 for service providers. Members only. Information and registration: newyorkcity.corenetglobal.org.

The New York Building Congress presents a “Political Action Committee Luncheon.” Guest speaker George Mitchell Jr., former United States Senate majority leader, will discuss the country’s political and economic outlook. The Modern, 9 West 53rd Street. Noon to 2 p.m. Fee: $1,000. Information and registration: www.buildingcongress.com.

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The New York Chapter of the American Institute of Architects hosts “Copenhagen Says: ‘Green-up Your City!’ A Talk with Lord Mayor of Copenhagen, Frank Jensen.” In a visit to New York City, Lord Mayor of Copenhagen Frank Jensen shares how Copenhagen’s green aspirations and holistic approach to urban development have spurred economic growth and created a livable city with one of the world’s highest qualities of life. The Center for Architecture, 536 LaGuardia Place. 6:30 to 8 p.m. Fee: Free for AIA members; $10 for non-members. Information and registration: cfa.aiany.org.

The Real Estate Board of New York presents its 117th annual banquet. Honorees include Donald Zucker, chairman of the Donald Zucker Company, who will receive the Bernard H. Mendik Lifetime Leadership in Real Estate Award; Mike Fishman, international executive vice president of the Service Employees International Union, who will receive the Harry B. Helmsley Distinguished New Yorker Award; Dottie Herman, president and CEO of Douglas Elliman, who will receive the Kenneth R. Gerrety Humanitarian Award; Woody Heller, executive managing director of Studley, who will receive the Louis Smadbeck Broker Recognition Award; Dick Concannon, senior vice president of Rudin Management, who will receive the George M. Brooker Management Executive of the Year Award; and William Montana, managing director of Studley, who will receive the Young Real Estate Man of the Year Award. Hilton New York hotel, Grand Ballroom, 1335 Avenue of the Americas. 7 p.m. Fee: $1,000. Advance purchase required. Information and registration: www.rebny.com.

The New York Chapter of Professional Women in Construction hosts a “Developers Forum” moderated by New York Post real estate columnist Lois Weiss. Guest speakers TBA. The General Society of Mechanics & Tradesmen, 20 West 44th Street. 8 to 10 a.m. Fee: $80 for members, $95 for non-members. Information and registration: www.pwcusa.org.

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“Amazing Race” winners find buyer for NYC pad By Katherine Clarke Reality TV stars Josh Kilmer-Purcell and Brent Ridge, otherwise known as “the Fabulous Beekman Boys,” had two reasons to celebrate last month. After completing a 25,000-mile, nine-country endurance test across three continents for CBS’s “The Amazing Race,” the duo was declared the winner of the competition — winning $1 million. Also last month, Purcell and Ridge, a married couple, found a buyer for their Upper East Side apartment at 210 East 63rd Street. The 14th-floor unit is now in contract after having been on the market since April, asking $799,000. It was listed by Ryan Serhant, Katherine Salyi and Nick Jabbour of Nest Seekers. The sale is slated to set a price record for the building; the priciest transaction ever closed there was the 2010 sale of a unit on the first floor, which traded for just $370,000. Famed for their fresh produce, novice farmers Purcell and Ridge sold the apartment in order to relocate full-time to Sharon Springs, N.Y., where they own a farm. The pair purchased the apartment 11 years ago and began growing vegetables on the outdoor deck. That was the beginnings of their farming journey, which is now charted by their Cooking Channel show, Brent Ridge (left) and Josh Kilmer-Purcell “The Fabulous Beekman Boys.”

Investors Sutton and Sitt team up for $150M deal By Adam Pincus Two of the city’s most active retail investors, Jeff Sutton and Joseph Sitt, last month partnered to buy 529 Broadway for about $150 million, sources told The Real Deal. The two-story property has 26,500 square feet of commercial space at the corner of Broadway and Spring Street, and is currently occupied on the ground floor by shoe retailer Steve Madden, among other tenants. In a complex deal, the partners paid all cash for the property, which has been coveted by top retail investors and stores. The deal closed last month, and there were no brokers involved. “It was a tremendous odyssey to get this building,” one insider said. Although both Sutton, president of Wharton Acquisitions, and Sitt, CEO of Thor Equities, often partner with others on transactions, they have not publicly teamed up with each other on any recent deals. The building, owned by Zoltan Goldstein, president of Goldstone Realty, had been on 529 Broadway the market for years.

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