The Real Deal November 2012 by The Real Deal

Joe Moinian: A day in the life

Setting records in South B’klyn

Not-so-gritty East Village

125

The other Kushner making big deals

125

Brokers who date brokers

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

www.TheRealDeal.com

Vol. 10 No. 11 November 2012 $3.00

A rabbi on From Russia with cash the ropes

After Pinto’s arrest, attention turns to his NYC real estate BY DAVID JONES Federal investigators are speaking to investors involved in projects conSPECIAL REPORT nected to Rabbi Pinto, the spiritual advisor to a slew of high-profile industry players, who was arrested in Israel last month. They’re trying to figure out what happened to millions in investments he’s linked to.

The barbell effect Demand for starter apartments and high-end units in Manhattan is up, but the middle of the market is lagging. Between the third quarters of 2010 and 2012, sales for apartments on the bookends of the market increased, but dropped for midsized apartments. See page 14.

Hotel royalty Ranking Manhattan’ s hoteliers by # of rooms

See story on page 54

Condo vs. condo

Office tenants dump space on Sixth Ave.

Inside the world of NYC’s billionaire Russian real estate buyers — from assassination attempts to the sources of their vast wealth

BY KATHERINE CLARKE The perennially posh Upper East Side is about to get a slew of new highly anticipated residential towers. TRD matched those projects up against each other to uncover their pros and cons.

Welcome to the world of the superrich RusElizabeth Lee Sample has brokered $1.5 billion sian buyer, a rarefied and red-hot segment of of real estate in her career. But it wasn’t until she the New York real estate market. It’s a world began working with high-end Russian buyers with private planes, cars that cost as much as that she found herself leaving the some houses and entourages Four Seasons Hotel one day with EATURE TORY of bodyguards (understanda deposit check for $2.5 million able given some have survived burning a hole in her pocket. Her buyers found a assassination attempts). But perhaps its most penthouse they wanted, but were heading out of notable component is its emphasis on discretown so they wrote a check on the spot. tion — don’t ask what’s in the bank account.

See story on page 50

See story on page 58

A match-up of the UES’s new residential buildings

BY ADAM PIORE

A look at the most influential nabe nags battling builders

See page 126.

BY LEIGH KAMPING-CARDER In many ways, the city’s NIMBY (Not In My Backyard) groups embody NY’s fighting spirit. This month, TRD examined the track records of the most influential neighborhood groups to find out how successful they’ve been at taking on developers and what strategies they employ to do so. See story on page 62

Available office space is piling up on a prime stretch of Sixth Avenue in Midtown. A TRD analysis looked at the trend and at the buildings dumping space. See page 22. One World Trade Center

NYC’s powerful Is the tech boom real? NIMBY players A breakdown of Internet office leases and

Maurice Mann: I was thrown under the bus

Community banks have had post-recession staying power. Their market share for commercial loans is 19%, up from 6% in ’07. See page 16.

AT A GLANCE

See story on page 70

BY C.J. HUGHES Record tourists. Soaring occupancy. There’s no doubt the hotel market is going strong. This month, TRD surveyed the Manhattan landscape to determine who owns the most hotel rooms. Host Hotels & Resorts came out on top. Find out who else made the cut.

FACT

the brokers winning over the big clients

BY ADAM PINCUS Is Manhattan’s tech leasing boom for real? That largely depends on how it’s defined. The problem is that the real estate industry is having difficulty defining it. This month, TRD dissected the tech-leasing craze to see which companies are taking space, what kinds of leases they’re signing and which brokers are doing the deals. One key Tech firms on the prowl for big blocks of office space finding: tech leasing is being driven by short-term deals, which is makMicrosoft: 400k sq. feet ing the industry seem especially acAmazon: 100k sq. feet tive. In addition, we checked out where tech moguls from the likes of Media Ocean: 100k sq. feet Facebook and Google live in NYC. Usablenet: 50k sq. feet See story on page 37

Smaller deals at One World Trade Leasing at the World Trade Center site has been slower in 2012 than it was in 2011. But the lead broker for 1 WTC said owners there are subdividing some of the space to lure in smaller tenants. See page 46.

NYC’s billionaire club Ten NYC real estate titans made the Forbes list of richest Americans. Find out how your favorite billionaires fared compared to last year, and who fell off this year’s list. See page 74.

www.TheRealDeal.com

RUSSIA GRAPHIC BY WPVORTEX; MANN PHOTOGRAPH BY MARC SCRIVO; ONE WORLD TRADE CENTER PHOTOGRAPH BY DEREK ZAHEDI.

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SPACE LIFT

Highlights N O V E M B E R

The barbell effect

Staying power for local banks

Staten Island rebooted

2 0 1 2

NYC sees boost at ends of residential market, but a lag in the middle.

Post-recession, NYC community banks remain active in multi-family lending. The borough will soon be home to a giant Ferris wheel and a new megamall.

A rendering of the outlet mall and hotel BFC Partners is building

20 Sharif El-Gamal, beyond Park51 The developer talks about getting his start in real estate and what’s on tap for his Soho Properties now that the so-called “Ground Zero mosque” is out of the spotlight. Sharif El-Gamal

Since its construction in 1982, the Jacob K. Javits Center has been one of the world’s leading examples of spaceframe design. But the I.M. Pei & Partners-designed exhibit space needed updating to put its best face forward for the 3.5 million visitors it receives each year. So owners engaged Epstein Global and FXFowle Architects, who developed the recladding program that is dramatically increasing the building’s transparency and energy efficiency. Targeting LEED Silver with a glazing system that will enable the building to exceed energy code requirements by 25 percent, the new face of Javits proves that being old doesn’t have to mean retiring.

In their words...

Joe Moinian: A day in the life

Inside a developer’s brain

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

The developer takes TRD through a typical day, including Pilates, lunch at San Pietro and gala events at night.

A look at what keeps New York City builders up at night. Joe Moinian

golden oldies 30 The With Kenny’s Castaways now

Transforming design into reality

gone, a look at some of the latest music venues to get pushed out due to rising rents.

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

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

memorial opens — finally 32 FDR The Louis Kahn–designed

Kenny’s Castaways on Bleecker Street, which shuttered last month

tech boom overblown? 37 IsTRDthedissects the number of deals

tribute, first proposed 40 years ago, was unveiled on Roosevelt Island last month.

in the sector, where companies are locating and the brokers winning.

the 46 Watching World Trade Center Architect: Epstein Global, FXFowle Architects Photographer: Enclos

6 2012www.TheRealDeal.com www.TheRealDeal.com 8 November October 2012

While office leasing has been slow at the site in 2012, building officials say smaller leases in 2013 will lead to more activity. www.TheRealDeal.com March 2012 00

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Highlights continued in context 50 Condos A side-by-side look at how a slew

LAWN AND ORDER

of new Upper East Side condos stack up next to each other.

big in hospitality? 54 Who’s TRD ranks Manhattan hoteliers to

find out who has the most units.

Developer Orin Wilf at 200 East 79th Street

58 The Russian buyer blitz An inside look at the Russian billionaires buying up NYC — from their private jets to assassination attempts.

Dmitry Rybolovlev bought an $88 million apartment at 15 CPW.

Colleges today are rethinking not only the structure of their curriculum, but also that of their classrooms. With John Jay College of Criminal Justice outgrowing its widely scattered facilities, school officials asked Skidmore, Owings & Merrill to design a new vertical campus consolidating all social and academic functions, including a 65,000-square-foot roof terrace, within a single city block. Using steel girders to span a network of Amtrak tunnels running beneath the prominent Midtown site made the design possible. Now, John Jay students are better able to collaborate across disciplines and enhance their legal research—proving it’s easy to build a case for choosing structural steel.

The mansions of South Brooklyn

NYC’s NIMBY posse

The borough’s priciest homes — outside the brownstone belt.

A roundup of the city’s most influential neighborhood advocates.

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

A rabbi on the ropes

After Rabbi Pinto’s arrest in Israel, attention turns to his New York real estate activities.

Commercial Market Report

National Market Report Reports from around the country on significant developments and trends.

74 A look at the real estate players

Stakes go up for billionaires who made the Forbes list of richest Americans.

The other Kushner

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

Joshua Kushner

10 8 November October 2012 2012 www.TheRealDeal.com www.TheRealDeal.com

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

125

Architect: Skidmore, Owings & Merrill Structural Engineer: Leslie E. Robertson Associates Photograph: SOM | © Eduard Hueber

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

Rabbi Yoshiyahu Yosef Pinto

Structural steel Right for any application

Jared’s bro is not in the real estate biz, but he’s making waves in the tech world.

Mann gets mad 126 Maurice The Apthorp investor says partner Africa Israel threw him “under the bus” at the storied UWS building.

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

100

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

118

Calendar of Events Check out this month’s activities.

124

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

125

We Heard A lighter look at industry buzz.

www.TheRealDeal.com March 2012 00

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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 Deputy Web Editor Leigh Kamping-Carder Art Directors Derek Zahedi, Ronald Gross Senior Reporter Adam Pincus ReporterS Katherine Clarke, Guelda Voien Contributors C.J. Hughes, David Jones, Adam Piore production manager & researcher Linden Lim Editorial Assistant Zachary Kussin INTERN Christopher Cameron Photographers Chris Martin, Marc Scrivo Director of mARKETING OPERATIONS Yoav Barilan ASSOCIATE SALES DIRECTOR Ross Fox Director of Digital Marketing and Strategy Amir Talai Advertising Sales Eran Evron, Abi Laoshe, Nick Mascaro, Robert Stearns, Jennie Durkovic Webmaster Nima Negahban Finance director Kenneth Cyrus 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

The Real Deal is a registered trademark of Korangy Publishing Inc. Copyright ÂŠ 2012. 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.

10 November 2012 www.TheRealDeal.com

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12 November 2012 www.TheRealDeal.com

As TRD went to press

was going to write this month’s editor’s note about two forces — technology companies and international buyers — that brokers are counting on to save the New York City real estate market and which we cover in depth in this issue. But after all our stories were wrapped up and we prepared to go to press, it wasn’t the city’s real estate market that needed saving, it was the city itself. The impact of Hurricane Sandy will be long-lasting and will involve real estate at every turn, from rebuilding ravaged areas like Hoboken, Fire Island and Breezy Point, to fixing Manhattan, to the broader question of how New York City’s entire infrastructure should be rethought and revamped. Beyond the damage, we’ll never look at the divide between Lower Manhattan and the rest of the island the same way again. I live in the West Village near 14th Street and, for me, The Real Deal’s office on West 29th Street became one of the first outposts of civilization, with the electricity, Internet and cell service that were nonexistent farther south. (Eventually, I decamped to the Upper East Side, where I introduced my family as refugees from the south while trick-or-treating on Halloween.) We’ve been covering the storm extensively online since the news first broke that it was charting a path for New York. As we move forward, The Real Deal will be there every step of the way to look at how the real estate industry — from developers and investors to brokers to everyone else — will mobilize alongside the public dollars and government efforts in the rebuilding process. That’s, of course, after the level of damage is fully assessed, which itself will take some time. Back inside this issue, we examine those two drivers of the current real estate market that might actually take on more importance post-Sandy. Commercial real estate brokers are counting on technology firms — from Google, Amazon and LinkedIn on down — to be one of the prime engines of growth

The recovery from Hurricane Sandy will be long-lasting and will involve real estate at every turn. in the city’s vast office market. But is the talked-about boom in tech leasing really happening? We take a comprehensive look at deals from the last two years to answer that question, as well as survey the brokers doing the most tech deals and the companies on the hunt for the biggest blocks of space. See reporter Adam Pincus’s stories starting on page 37. On the residential front, brokers have been relying on international buyers, particularly Russians, to sustain home-buying in Manhattan at the very high end. We take a look at these überwealthy and übersecretive Russian buyers in a feature story by Adam Piore starting on page 58 examining where their money comes from and how they go about their real estate deals here. (They don’t drink vodka and usually have bodyguards in tow.) There is likely more big money to come from Russia; the number of Russian billionaires has gone from zero in 2000 to 96 this year, according to one tally. And the ever-increasing presence of condominiums in Manhattan will also help, since they require considerably less financial disclosure than do co-ops — an important consideration for many Russian buyers. It’s interesting that 30 years ago, these groups — tech firms and Russians that are now helping to boost the Manhattan market — had little clout or money. Indeed, they would have been classified as nerds and commies in 1980s parlance. Things have certainly changed. Meanwhile, other real estate players have been on top for decades. In a story on page 74, we examine New York City real estate moguls that made the latest Forbes list of richest Americans and how their net worth has changed during the downturn. While there has been significant movement, it’s impressive how stalwarts like Jerry Speyer, Richard LeFrak and a handful of others have mostly stayed on top, their prime property reliably printing money year after year. Finally, we take a look at the most powerful NIMBY (Not in My Backyard) groups that regularly battle developers over their plans (see page 62). If there is a contingent that typically wants things to stay the same, for better or worse, it’s probably this one. Enjoy the issue, and have a safe month post-Sandy.

Stuart Elliott

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Re s i d e n t i a l Ma R k e t

By Katherine ClarKe confluence of economic factors are causing a “barbell effect” in Manhattan’s residential real estate market, where both the high- and entry-level segments of the market are seeing a surge in activity, while the middle of the market remains subdued. Brokers and analysts told The Real Deal that they’re seeing increased demand for start-

The barbell effect

Manhattan sees boost in activity at ends of market, but middle lags

er apartments as low interest rates and rising rents continue to propel first-time buyers to make purchases. They said they’re also seeing demand on the upper end of the market as wealthy foreign investors continue to view Manhattan as a safe haven while Europe is rocked by economic turmoil. Meanwhile, the middle of the market, while not falling out of favor per se, is not seeing the

THEREALDEAL

AND

same bounce in activity as the bookends of the market are. “The market is sort of like a doughnut — strong at the bottom and the top but weak in the middle,” said Jonathan Miller, president and CEO of appraisal firm Miller Samuel. “Mortgage rates are falling and it’s skewing the mix. This is probably the fourth-consecutive quarter where we’ve seen elevated studio and one-bedroom activity in Manhattan.”

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According to Miller’s data, sales of entry-level apartments (studios and one-bedroom units) and higher-end units (those with three bedrooms or more) ticked up slightly between the third quarters of 2010 and 2012 — the former to a 55 percent share of the market from 51 percent, and the latter to 15 percent from 13 percent. But during the same period, sales of midsize apartments

(those with two bedrooms) declined to 29 percent from 37 percent. The decreasing affordability of Manhattan rentals — coupled with the fact that lower-end buyers are generally the first to respond to falling interest rates — is pushing nonowners to consider buying, Miller said. Median rental prices surged 10 percent year over year in September, the most recent month on record, according to a firsttime rental report that brokerage Prudential Douglas Elliman released last month. Meanwhile, concessions from landlords are on the wane — they were offered in just 2 percent of deals tracked by Elliman in September, compared with 40 percent three years ago. The average asking rent for a studio apartment was $2,113 and $2,789 for a one-bedroom. A two-bedroom was $3,989 on average, while a three-bedroom was $5,306, according to another report by Citi Habitats. “We’re seeing a lot of firsttime buyers transitioning from rentals,” said Mike Chapman, an executive vice president at Stribling & Associates. “It makes more sense for some people to buy than it does to rent.” On the high end, the market is also in full swing. Luxury apartment prices are exceeding their pre-crash levels in some instances. Last month’s high-profile closings include an anonymous U.K.based CEO of a conglomerate of companies, who purchased three units at the Laureate at 2150 Broadway in a bulk deal for $21.88 million; New York– based hedge fund founder Jamie Zimmerman, who bought a three-unit assemblage of apartments at 965 Fifth Avenue for $17.9 million; and direct marketing entrepreneur Cheryl Mercuris, who purchased a six-bedroom home at Extell Development’s the Aldyn for $13.72 million. A host of pricey listings also came online, including a Greek Revival–style home at 10 West 10th Street owned by Andrea Soros Colombel, the daughter of billionaire investor George Continued on page 114

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Staying power for community banks Having established themselves post-crash, local lenders remain active in multi-family lending Katherine Clarke ven as national banks and insurance firms reenter the lending arena, community banks are hanging onto the foothold they established in the multi-family market when larger institutions backed away during the financial crisis. Local banks such as New Jersey–based Investors Bank and New York Community Bank are doing record volumes of lending, spurred on by the strength of New York’s multi-family market, sources told The Real Deal. For the most part, their staying power is thanks to the relationships they built during the dark days of

the financial crisis and their willingness to both invest in up-andcoming areas and create customized loans for tricky deals. “These days, a good deal with upside is very hard to come by,” said Adam Mermelstein, a partner at Treetop Development, which owns various multi-family portfolios in New York and New Jersey. “The deals we come by that are good and have upside oftentimes also have hair on them. The local banks are able — and willing — to work through that and come up with solutions. A lot of times, the larger players have much more of a rigid checklist that they’re not willing to work through.”

In June 2012, Investors Bank produced its strongest loan volume in its history, said Kevin Cummings, the institution’s CEO.

has a total portfolio of commercial real estate loans valued at $3 billion, up from just $700 million in 2008.

“The local banks are able and willing to work through [problems] and come up with solutions. A lot of times, the larger players have much more of a rigid checklist that they’re not willing to work through.” Adam Mermelstein, Treetop Development The company — which established a real estate lending office in New York in January 2009 —

Meanwhile, New York Community Bank, a rival, is active in the space. According to the

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bank’s most recent Security and Exchange Commission filings, it had a more modest $18.2 million in multi-family loans on its books in June 2012. The bank did not respond to a request for comment. According to data provided to TRD by research firm Real Capital Analytics, regional banks have been growing their portfolios since 2007. Their market share of New York City commercial property loans by dollar value was just 6 percent in 2007, but has now reached 19 percent, the data shows. By comparison, national banks’ market share has remained consistent at 23 to 24 percent after dipping to 10 percent during the financial crisis. The RCA data also shows that, by loan count, regional banks have 48 percent of the city’s market share, up from 35 percent in 2007. By contrast, national banks’ market share on a loan count basis has decreased to 13 percent from 24 percent in 2007. As a group, community banks have significant capital reserves, making them a reliable source of financing in a market characterized by uncertainty, said Joseph Orefice, senior vice president and head of commercial real estate lending at Investors Bank. “All the big banks ran for the hills in 2009, and the community banks were the only ones left. To me, that was the tipping point,” he said.

Understanding the market Community banks have always played a larger role in the multifamily sector in New York than in other U.S. cities because they understand the financial realities of the market here well. New York rent regulations can also be difficult for national lenders to comprehend, said Bob Knakal, a founder of commercial brokerage Massey Knakal Realty Services. “It can take a while for outof-town banks to get their arms around [them],” he said. Still, bigger banks such as Wells Fargo and JPMorgan Chase started lending in the multi-family sector again last year, Mermelstein noted. What’s more, Chase is being even more aggressive now than it was before the collapse of Lehman Brothers, Knakal said. Continued on page 106

16 November 2012 www.TheRealDeal.com

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By the Numbers

Staten Island Soars Compiled by Christopher Cameron

Outlet shopping on Staten Island Last month, BFC Partners inked a $350 million deal with the city to develop Harbor Commons on Staten Island. The 470,000-square-foot project, which will be located on the waterfront next to the Staten Island Yankees’ stadium, will include a 350,000-square-foot outlet mall, a 200room hotel and 100 retail shops.

Small borough, big wheel BFC Partners is also bringing what is being billed as the world’s tallest Ferris wheel to Staten Island. The socalled New York Wheel, which will be built just north of the ballpark, will have 36 carriages that can each hold up to 40 passengers. The city is estimating that the ride will get 30,000 riders a day during peak season, for a total of 4.5 million visitors a year.

A rendering of Harbor Commons

Wheels worldwide The New York Wheel will be the world’s tallest Ferris wheel: At 625 feet, it will clock in above the 541-foot Singapore Flyer, the world’s CURRENT tallest wheel. China’s Star of Nanchang holds the No. 2 spot at 525 feet. A rendering of the New York Wheel But it could soon be knocked down by the 550-foot wheel being built in Las Vegas. The new wheel will also be taller than the 443-foot London Eye and CONEY ISLAND’S 150-foot Wonder Wheel.

Market stats Residential inventory remains tight on Staten Island. inventory fell 18.6 percent in September, year over year. Meanwhile, Pending sales grew 16.7 percent and the median sales price rose 6.2 percent to $410,000. But the number of days on the market was also up 5.5 percent to 12.5 months. (Staten Island Board of Realtors)

18 November 2012 www.TheRealDeal.com

Backed by big shots The New York Wheel may sound like fun and games, but it’s being bankrolled by some serious NYC real estate players. Heading up the effort is Rich Marin, the onetime CEO of Africa Israel Investments. Others include One World Trade equity partner Lloyd Goldman, Jordache clothing cofounder and real estate investor Joseph Nakash and the Feil Organization’s Jeffrey Feil. (The New York Times) Lloyd Goldman Jeffrey Feil

The View Staten Island’s long-stalled 40-unit rental tower in St. George, dubbed the View, is slated to hit the market this month. Developer Leib Puretz lost control of the project after defaulting on his loans in 2009, when the project was 95 percent complete. Madison Realty Capital, however, paid $8.4 million for the building’s debt in July. Casandra Properties is marketing the property. (Staten Island Advance)

Fresh Kills Park Once the world’s largest landFIll, Fresh Kills is being transformed into a 2,200-acre park, roughly triple the size of Central Park. Last month, one section opened after a $6.5 million redevelopment added a playground, two handball courts and basketball courts. Another 28-acre stretch is set to open by the end of the year. The rollout will continue over the next 30 years. (Staten Island A rendering of the Fresh Kills park Advance)

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PHOTOGRAPH FOR THE REAL DEAL BY CHRIS MARTIN

“I have a pretty stressful life so I need to do things to de-stress on a regular basis,” he said. So when he bought the building and moved this office there three years ago, the space in the bathroom was easily converted to a steam room, which he uses multiple times a week.

This 2010 American Council on Islamic Relations Award was given to El-Gamal the same year as the Park51 controversy. He said it recognized him for “protecting the First Amendment [and] for standing up for ideals as an American,” when so much personal invective was being directed at him because of his faith.

the

Desk

of:shArif

El-Gamal comes from a unique background. His father is Egyptian, while his mother is PolishCatholic. In this photo, he appears with his father and his brother, Sammy — a partner in Soho Properties — smoking a hookah in a café in the East Village.

El-Gamal’s daughters, Jennah, 4, and Sarah, 5, “draw masterpieces for me every day,” he said. Sarah attends public school on the Upper West Side. “We were very lucky to get her into it,” El-Gamal said, noting that the school is on his block.

Before getting into real estate, El-Gamal was a stockbroker (which he hated) and a bartender at the Michael Jordan’s The Steakhouse N.Y.C. “It was a lot of fun — too much fun,” he said of the latter job.

El-Gamal tries to read the Koran for 15 or 20 minutes multiple times during a day. He began keeping a copy of the book on his desk a few months ago. “We had just finished fasting for Ramadan,” he said. “It was important for me to try and continue with the good habits built over that month.”

These Zikr beads are used by Muslims to count the recitations of the name of God. The green ones were a gift from a “very prominent” sheik.

“I think I got it at Staples,” admitted El-Gamal, whose mouse pad looks like a miniprayer rug.

This plaque was a gift from El-Gamal’s stepmother when he opened his first office as a developer. He got his start in real estate “the old-fashioned way,” he said, buying his first property in Soho in 2003 with funds from friends and family. The Arabic letters translate to: “Thank God, the lord of the worlds.”

to respond to rumors that the site would be developed as condos. El-Gamal began his career as a commercial investment sales broker in Brooklyn in the late 1990s. While he’s managed to stay out of the headlines in recent months, he said he’s hard at work trying to find Class A and B office buildings in Midtown and Downtown to purchase. He gave TRD a tour of his office — and opened up about his Muslim faith, which informs all aspects of his life, down to his mouse pad. B y G uelda V oien

el-GAmAl

rooklyn-born Sharif El-Gamal is the chairman and CEO of the Manhattan-based Soho Properties. The company is, of course, the developer of Park51 — the project that was at the center of an international firestorm in 2010 when critics dubbed it the “Ground Zero mosque” and argued that it shouldn’t be allowed to open so close to the site of the World Trade Center attacks. The project has not begun construction; El-Gamal said he is “in the process of finalizing financing” and declined

This bullhorn was a gift from the developer who sold him his first building, which is on Broome Street. “I think it represents a little of my tenacity and my personality,” said El-Gamal. He called his firm Soho Properties because his first office was in Soho — and he had heard that company names should end in vowels, to make them easy to say. Surprisingly, he said, “it wasn’t taken.”

This Chinese box holds gifts from El-Gamal’s wife, Rebekah, in accordance with the Chinese practice of feng shui. El-Gamal’s office is set up using those principles. “We are composed of mind, body and soul, and it is important to reflect on your soul and the energies which are around us,” he said.

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Sixth Avenue space piles up

A premier Midtown stretch sees more availability as leasing from large office tenants remains scarce By AdAm Pincus n a stark reminder that large tenants have retreated, the amount of available office space is piling up on a stretch of Sixth Avenue that is home to many of the city’s premier office addresses. Last month, Manhattan landlords and tenants listed another 384,000 square feet in six buildings located between 41st and 55th streets on Sixth Avenue, a survey of commercial data website CoStar Group showed. Meanwhile, in a report last month,

commercial firm CBRE Group outlined how, for the first nine months of the year in Midtown, activity for smaller deals was steady, but volume for larger deals — above 100,000 square feet — was down. “The real drop-off has been in the large tenant market,” said Peter Turchin, an executive vice president at CBRE, speaking at the firm’s third-quarter market briefing. “We have not seen large tenants moving that much.” Boston Properties CEO Mort Zuckerman echoed the sentiment that large tenants were not on the hunt. He

partly attributed that to the fact that many are renewing leases or looking to shrink their footprints. “There is, undoubtedly, a review on the part of almost every major firm, particularly financial firms who are taking advantage of technology, amongst other things, to see how much space they really need,” Zuckerman said in his firm’s third-quarter call with analysts late last month. “And most of them are heading in the direction of contracting their space.” Overall, the Manhattan leasing market remained flat last month as many firms held off making decisions in a period of economic uncertainty. Average asking rents rose by $0.30 per foot to $56.82 per square foot in October, compared with the prior month. The availability rate — which counts space that is vacant now or will be available within six months — remained unchanged at 10.3 percent, data from commercial firm Cassidy Turley showed.

Midtown In the Midtown market, the biggest trend of the month was the dumping of office space on Sixth Avenue. While tenants have inked some blockbuster deals this year in Midtown, those leases — such as Viacom’s deal at 1515 Broadway for 1.6 million square feet in April — have been renewals or small expansions that absorb little or no new space.

Manhattan office stats AVAILABILITY RATE

Oct ’12 Sept ’12

Manhattan 10.3% 10.3%

$56.82 $56.52

Oct ’12 Sept ’12

Midtown 11.1% 11.1%

$64.50 $64.46

Oct ’12 Sept ’12

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22 November 2012 www.TheRealDeal.com

AVG. ASKING RENT

Oct ’12 Sept ’12

Midtown South 7.9% $48.73 8.0% $47.74 Downtown 10.4% 10.3%

$39.84 $39.38

Source: Cassidy Turley

TRD’s analysis found that the stretch of Sixth Avenue between 41st and 55th streets had an availability rate of 20 percent among the 20 buildings that had the most available space. For example, last month Rockefeller Group Development, which owns the 2.5 million-square-foot 1221 Sixth Avenue, listed 195,316 square feet of space, bringing its total available space in the building up to 786,927 square feet. A spokesperson for the Midtownbased company noted that the space being marketed in the building, while available, was not actually vacant, and the firm had about a year to fill it with tenants. “From our perspective, we are optimistic that there will be a pickup along the avenue. There has been an artificial lag in leasing, and we do expect a post-election [bump]” sometime next year, the Rockefeller spokesperson said, attributing the lag to the uncertainty surrounding the presidential race. Other buildings with more than 400,000 square feet available (either directly through the landlord or through a tenant) are Vornado Realty Trust’s 1290 Sixth Avenue, Paramount Group’s 1301 Sixth Avenue and Japanese real estate investment firm Mitsui Fudosan’s 1251 Sixth Avenue, TRD’s analysis of CoStar data showed. Yet there have been some large deals on the avenue this year. For example, Amazon leased about 92,000 square feet at 1350 Sixth Avenue, and, in September, law firm Chadbourne & Parke inked a deal for 200,000 square feet at 1301 Sixth Avenue. Continued on page 113

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In their words...

The month’s funniest and most insightful comments on real estate “Brooklyn, I’m sure, will help [the Islanders] get their mojo back. And no, ‘Mojo’ is not the name of a hip, new Brooklyn neighborhood.” Mayor Michael Bloomberg talking about the New York Islanders’ decision to move from Nassau Coliseum to the Barclays Center. (The New York Times)

“He likes to say he rejected me. He’s completely off base. I’d asked to go up [to see the unit]. They wouldn’t let me. You want me to spend $16 million without seeing it?” Investor Michael Hirtenstein, on developer Gary Barnett returning his deposit for a unit at One57. The two have been locked in a nasty dispute. (New York Post)

“Sometimes I smelled coffee, other people smelled bacon. They installed this behemoth [air vent] to combat it, but the noise from that has been much worse.”

“In the end, sanity usually wins the day and the price comes back down to reality. You can’t trick the market.”

Union Square resident Rena Begleiter, on living adjacent to the new International House of Pancakes there. (The New York Post)

“Under Governor Romney’s definition, Donald Trump is a small business. I know Donald Trump doesn’t like to think of himself as small anything.” President Barack Obama, during the first presidential debate against Governor Mitt Romney.

24 November 2012 www.TheRealDeal.com

Donna Olshan talking about whether raising the asking price results in a higher final sales price. (The Wall Street Journal)

“I hate design that tries too hard. Anything that looks like design, that says, ‘Aren’t I fabulous,’ is totally without style. It needs to fit in, it needs to be appropriate, it needs to be comfortable.” Celebrity Chef Ina Garten. (The New York Times)

“What they did was homophobic. … Not only do I consider it an act against the movement, I consider it an act against me personally.” Allen Roskoff, on the demolition of 186 Spring Street. The site was denied landmark status despite the fact that, in the 1970s and 1980s, it housed prominent gay-rights activists, including Jim Owles, who was Roskoff’s partner. (The New York Observer)

“If you don’t want luxury housing, please tell me. Give them my phone number!” Bronx city council member James Vacca speaking about his colleagues in government who don’t want new residential developments in Manhattan. He said they should send those projects, which generate important economic activity, to his district in the Bronx. (Interview with TRD)

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A DAY IN THE LIFE:

Joseph Moinian

The CEO of the Moinian Group walks TRD through a typical 24 hours, including Pilates class, conference calls and a power lunch at San Pietro

Developer Joseph Moinian at the W New York Downtown

6:00 to 6:30 a.m. I wake up between 6:00 and 6:30. I

on East 54th Street for a lunch with my partners or bankers

check the New York Post. If there are headlines that I like, I

or somebody I’m doing business with. The food is very good,

will read the full version later on my iPad in my car. I also like

the atmosphere is very good and the service is impeccable, but

to watch international news when I’m getting ready, like the

you have to be willing to gain 500 calories. I am driven there

BBC and Al Jazeera.

New York Post

in a town car, but I like to walk back to the office along Madison to window-shop and enjoy the weather. Though we’ll be

7:00 a.m. I only eat breakfast about three times a week, egg

moving our offices soon to 3 Columbus Circle, where our 50

whites with maybe some tomato or grilled onions. I also drink

employees will be in a 15,000-square-foot space.

a skim latte from Starbucks every day, without sugar, because 3:00 p.m. The afternoon is typically when most of my phone

I like the bitterness. I bring it with me to the office and it stays on my desk until it gets cold. Joe’s entire system is on-the-go.

Starbucks

calls take place. The other day I had a call with David West [a partner at Goldstein Hill & West Architects] to talk about the design of 605 West 42nd Street [a new 970-unit condo].

7:30 a.m. If we have a construction project in the works, on some days I’ll head right to the construction site. I’ll arrive

7:00 p.m. The other day me and my wife, Nazee, were at Car-

at 7:30, like when we were building the W New York Downtown. It’s important that the workers see the owner to create a feeling that we need to get to the end. Other days I go to the

negie Hall for the opening night of the symphony in October. Sports Club/L.A on East 61st St.

We also recently went to see Barbra Streisand at Barclays

gym, the Sports Club/LA on East 61st Street, where I’ve been

Center in Brooklyn. Bruce Ratner did a wonderful job; it’s

going for 14 years. I like Pilates classes rather than doing it

the nicest multiuse sports stadium that I’ve seen on the East

on my own; I find that I focus better in classes and tend to

Coast. And I think one thing will lead to another, and this

get off the subject when nobody is watching me. I also own

will help revamp Brooklyn. Yes, my BlackBerry was with me,

seven buildings next to the gym, so I say hello to my build-

but was it because of my business? I would have to say no. I

ings as well. If I don’t go to the gym in the morning, I go in the

have five children, and two of them, Morgan and Michaela,

evening, maybe do boxing or weights with my trainer. I also

still live at home.

play tennis on Saturdays and Sundays on Roosevelt Island.

Galleria at 115 East 57th St.

I exercise about every day except for Wednesday, when I just

8:00 p.m. [Even if I sometimes go to events,] I’m usually at the

stretch in the morning at home. The body gets frozen after a

office till 8. That’s except for Friday, the Shabbat, when I leave

night of sleep, and you need a boost to keep going.

early; we have people over to our house, sort of like an Italian Sunday dinner. It’s gone on for years. [Meanwhile,] yester-

8:30 a.m. [On days that I go to the gym,] I get to the office

San Pietro on East 54th St.

day, I went to an event at the Bank of America building with

at 8:30. [My schedule the other morning] was pretty typi-

Mayor Bloomberg to hear about how the construction of the

cal: I went to a board of governors meeting at REBNY for a

9-11 Museum had restarted. That was music to my ears. After-

few hours. Later, I met with my team about the retail floors

ward, I went to Casa Lever, at the Lever House, for dinner with

at 535-545 Fifth Avenue, which are being combined into a

an ex-employee of the company whom I stayed friendly with.

single 84,000-square-foot space. My schedule that day also included checking in with Galleria [one of our buildings] at

9:00 p.m. I don’t really watch TV unless there’s a game on,

115 East 57th Street; I watch it to make sure the tenants are

basketball or football. I will probably get in trouble for saying

all working together, not crowding the elevator, that sort of

this, but baseball, I hate! My phone is quiet at night, but you get calls in your head, in a way: “Should I buy this? Should I

thing. Nazee Moinian, Joe’s wife

say yes to this tenant who wants to occupy this space?”

NOON Some days I will eat with my son Matthew [a managing director at the Moinian Group] or my son Mitchell [a broker

11:00 p.m. to 1:00 a.m. I go to bed anywhere between 11

with Cushman & Wakefield] in one of the conference rooms in

and 1. All I need is five to six hours of sleep — there are better

my office at 530 Fifth Avenue. Once a week, I go to San Pietro 26 November 2012 www.TheRealDeal.com

things to do than sleeping. By C.J. Hughes Casa Lever at the Lever House

Interview has been edited and condensed.

www.TheRealDeal.com 2012 00 PHOTOGRAPH OF MOINIAN FOR THE REAL DEALMarch BY MICHAEL TOOLAN

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Inside the developer’s brain A look at what makes builders tick

By Guelda Voien ew York City real estate developers have a lot on their minds. Not only do they have to deal with all of the details of their projects — financial and otherwise — but they must also consider the latest trends in the city and the politi-

cal dynamics that could impact their approvals. Dealing with a shake-up at a city agency, for example, can drastically change the calculus of a project, developers said. That’s not to mention a new regime in City Hall, which will come in at the beginning of 2014 when

Finding the right site

Taxes

Finding a potential upside in a location that nobody else has targeted is a perennial challenge in the world of New York real estate development. In looking at potential projects, one residential developer said he zeros in on areas where his competition is not interested, saying: “You want to buy something that has something wrong with it that scares other people off.” The tricky part, of course, is knowing when there’s too much wrong with a site. “The most difficult decision is when you have to walk away from something because the risk is too high,” said one Manhattan developer. At the end of the day, it often comes down to instinct. “I ask myself, ‘Is this good land?’ ” said one source.

Developers worry about high property taxes and fear that abatements like the 80/20 affordable housing program could be altered or even eliminated under a new mayor. Already, changes to the 421-a tax abatement program have made it difficult to locate viable projects, residential developers said. “We’ve looked at a number of projects where the land is worth nothing essentially because the taxes are so high, even with rents as high as they are,” one developer said.

Budget In a city with such high prices and building costs, “the major concern of all developers is to avoid going over budget,” said one Manhattan residential builder. “You think, ‘Oh, it’s just $20,000 here, $10,000 there,’ but it all adds up.” And small mistakes can easily lead to higher costs: One tiny error in plans submitted to the city could cause the entire permitting process to be restarted — at great cost.

The economy Fears about jobs and the economy obviously weigh heavily on developers’ minds. A related concern is inflation, which some fear could result from the government adding money to the economy through quantitative easements. Sudden inflation would lower real estate values, said one developer. “It’s like this lurking menace.” 28 November 2012 www.TheRealDeal.com

Mayor Michael Bloomberg’s term expires. A few months ago, The Real Deal delved into the brain of a residential brokerage CEO. This month, we shift gears and dive into the recesses of developers’ minds, finding out what keeps them up at night and how they go about planning their projects.

Financing

The mayoral race

While one developer said he is “always worried about financing,” many real estate pros said they sleep better now that borrowing has gotten easier along with the improving economy. Still, they worry that the market will suffer when today’s record-low interest rates rise, which could make homebuyers more skittish about taking out mortgages. “When rates are 7 or 8 percent, what will happen to real estate values?” asked one developer .

Most developers said they view Bloomberg as prodevelopment and worry about what will happen when he leaves office in January 2014. “There are a great deal of unknowns with respect to the mayoral race, and how that will affect the business community,” said one prominent commercial developer. “It’s expensive to build here, and it isn’t getting any cheaper.” He said he fears that unless the next mayor works to keep costs down for businesses, as Bloomberg has, the city will lose jobs to New Jersey, with far-reaching consequences for the real estate market.

The DOB Dealing with the Department of Buildings and other city agencies is notoriously frustrating, developers said, as delays and excessive paperwork can prevent shovels from getting into the ground. “It’s like how everyone has a tequila story,” one developer said. “Everyone in real estate has a DOB story.” Luckily for developers, the DOB’s NYC Development Hub digital plan review system has received praise for reducing delays since launching a year ago.

Zoning In looking for new projects, developers said they face difficult zoning challenges. Often, a shortage of floorarea ratio that’s allowed as-of-right makes what seems like an otherwise-profitable development feel impossible. Developers can sometimes get around this problem by adding a park or affordable housing to their project in exchange for building taller. But making it work sometimes comes down to dumb luck. One Midtown office tower literally “required an act of Congress to make the tax situation work,” a developer recalled. TRD

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The golden oldies

With Kenny’s Castaways now gone, a look at some of the latest NYC music venues that are getting pushed out because of rising rent

G IN

S O L C

D E S O CL

The longtime record store Bleecker Bob’s on West 3rd Street, which is about to lose its home

By C. J. HugHes ike checkered cabs and subway graffiti, New York’s iconic live music venues are disappearing at an increasingly rapid pace. Many of these addresses, once suffused with reverb, have been replaced with gastropubs, clothing stores and even children’s play spaces. The trend is not new. The Fillmore East, a 1970s hot spot in the East Village, shut down in the 1990s; the Wetlands Preserve in Tribeca closed after a 12-year run in 2001; and, of course, more recently in 2008, fashion designer John Varvatos took over the former CBGB space on the Bowery; his store now peddles vintage rock T-shirts for hundreds of dollars there. But in light of the recent announcement that another rock venue, Kenny’s Castaways, shuttered, this month The Real Deal looked at the live music spaces (and some iconic music vendors) who have fallen by the wayside as of late. Plus, we examine what real estate forces were at work.

Kenny’s Castaways 157 Bleecker Street

enny’s Castaways, which had been located at its Bleecker Street location since 1976, where it hosted major acts like Bruce Springsteen, called it quits on Oct. 2. The Kenny family, which owned the three-story building where the club was located, sold it to Allied Properties, a Brooklyn developer, according to a source close to the deal. The building sold for close to its asking price of $5.9 million, the source said.

30 November 2012 www.TheRealDeal.com

That price — which is reportedly far more than what the record store is paying — includes the basement, though the space is currently carved up into small rooms and essentially unfinished, said Limor Eliyahu, the Point NYC broker who has the listing. According to industry sources, Bleecker Bob’s has been suffering financially (not unlike other music stores these days) and can’t pay its rent. The landlord, Greenwich Realty Associates, which is based on Long Island, will consider a restaurant, a bank or “anything,” Eliyahu said. “I grew up in the ’80s, so I appreciate the smell of the store,” Eliyahu said. “But the business is dying. Do you know anybody that buys vinyl?” Located on Third Street since the 1970s, Bleecker Bob’s, which is named for owner Bob Plotnik, earned fame as one of the first places in New York to carry punk rock LPs. According to reports, in the 1960s, before the record store moved in, the space was the Night Owl Cafe, where the pop rock band Lovin’ Spoonful played. Efforts to reach both Plotnik and Greenwich Realty were unsuccessful.

The new restaurant won’t be The building sale was contingent on the retail space getting leased, another source silent either. Riva not only plans added. That requirement was satisfied by to host performances four nights Sergio Riva, who owns the Diner in the Meat- a week, he’s going to enlarge the packing District and Cotta Osteria on the stage from 10 to 23 feet. Allied did not return a call for Upper West Side. Next spring, he will open a gastropub called Carroll Place there. The name, Riva said, was the one given to Bleecker in the 19th century by a developer who wanted to make it seem more upscale. He said he’s paying Allied a blended rent of about $60 a square foot for the 5,800-square-foot space, which includes a basement and mezzanine, in a 12year lease. That works out to about $140 a square foot for the ground floor alone, Riva said. Kenny’s Castaways on Bleecker Street, which shuttered early last month While that rent is far cheaper than the $400 a foot landlords comment, and Maria Kenny, the daughter of command on the stretch of Bleecker west club founder Pat Kenny, couldn’t be reached. of Seventh Avenue, it’s actually comparable for its area, brokers say. Marcus & Millichap broker Barbara Dansker, who represented both the buyer and earby, Bleecker Bob’s record store, seller in the sale, would not elaborate on the on West Third Street, is about to lose deal, which is expected to close imminently. Though some other brokers called that its home to make way for a higher-paying price too high, Dansker said it made sense tenant. The 1,600-square-foot ground-level considering Bleecker’s continuing retail space, which is in a five-story tenement-style evolution. “Bleecker Street has always been a very building near Macdougal Street, is now being busy street, but the tenants moving from west marketed for $18,000 a month — or about to east are getting better and better,” she said. $135 a square foot in blended rent annually.

D E S O CL

Bleecker Bob’s 118 West Third Street

The music venue Southpaw closed last February. A nursery-school chain called New York Kids Club is opening there this coming February.

Southpaw 125 Fifth Avenue (Park Slope, Brooklyn)

ast February saw the shuttering of Southpaw at 125 Fifth Avenue in Park Slope after a decade-long run. In February, the venue — which featured shows with Sharon Jones & the Dap Kings, Joan Jett and Luna — will become the latest outpost of New York Kids Club, a chain that offers popular nursery-school classes. The move might not be a huge surprise considering that once-gritty Park Slope has continued to become more and more family-friendly. As part of the changeover, Kevin Wolf and his wife, Pam, who founded New York Kids Club in 2001, have purchased the building, which has 11,400 square feet across three levels. The couple is now adding an additional story to prepare for the club’s February opening, Kevin Wolf said. The sale price for the building was $4 million, added Wolf, who bought it from Joseph Continued on page 110

www.TheRealDeal.com March 2012 00 PHOTOGRAPH OF BLEECKER BOB’S FOR THE REAL DEAL BY DEREK ZAHEDI

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Scammers in the neighborhood Freddie Mac is sounding the alarm over rise in bogus landlords renting out foreclosed homes By Kenneth Harney o one wants to take the blame for the housing bust in this political season, but scammers and rip-off artists in the hundreds are working overtime to siphon dollars out of the wreckage of the crash and its still-vulnerable victims. You’ve probably heard about the loan-modification predators who promise financially ailing homeowners that they’ll prevent or forestall foreclosures. But they are really after thousands of dollars in fees, for which they do nothing. Now the second largest source of mortgage money in the country — Freddie Mac — is warning about a troubling new wave of post-crash fraud: scammers who illegally rent out its foreclosed and for-sale homes to unsuspecting consumers shopping for houses to lease. The bogus landlords don’t own the properties — Freddie does — and they have no right to of-

• • • •

fer them to anyone. But they use Craigslist and other online sites to advertise them to prospective tenants. Typically, the rents are tantalizing — say $1,200 a month for a three-bedroom home in a neighborhood where similar houses command double that — and the terms are straightforward: Pay us a one-month security deposit and one or two months’ rent upfront — always in cash or money order — and we’ll give you the keys, no questions asked. The fraud promoters sometimes change the locks on the front door, remove the lockbox installed by the broker marketing the house for Freddie Mac and they tell prospects: Oh, and don’t worry about that real estate sign in the front yard offering the house for sale. We tried to sell the house but it didn’t work out, so now we’re renting it. According to real estate brokers who work with Freddie, this type of scam can bilk unsus-

pecting rental-home shoppers — some of whom have themselves lost their own homes to foreclosure or short sales — out of hundreds or thousands of dollars. According to Robert O’Hara, a foreclosure specialist with Re/Max Synergy in suburban Chicago, one victim told him that she lost a total of $10,000 in upfront fees and rental payments to a fraudulent landlord before being forced to leave the property. “This is happening all over the place, in every price range,” said O’Hara. “They take the [victims’] money and disappear.” Sometimes the tenants don’t even get the keys; they fill out a fake lease application, disclose sensitive personal information such as social security and financial data, send the money and never hear a thing again. Other times they move in and are later discovered by property managers or the real estate Continued on page 104

Portion 6th Floor: 21,878 rsf

Entire 20th Floor: 51,459 rsf

Total Block:

69,932 rsf

After 40 years, FDR memorial park opens on Roosevelt Island Nearly 40 years after it was first planned, the four-acre Franklin D. Roosevelt Four Freedoms Park opened on Roosevelt Island last month. Famed architect Louis Kahn completed drawings for the FDR Four Freedoms Park park, but died of a heart attack in 1974 before they were implemented. Despite Kahn’s death, his plan to use the government-owned land — which is on the southern end of the East River island — survived. New York–based Mitchell/Giurgola Architects and the F.J. Sciame Construction Company, along with Weidlinger Associates and Langan Engineering, completed the $53 million project with some modifications to the original design. The park was named for the country’s 32nd president and his 1941 State of the Union speech, according to published reports. President Bill Clinton, Gov. Andrew Cuomo, Mayor Bloomberg and other dignitaries were on hand for the park’s designation.

Credit Suisse in crosshairs over mortgage-backed securities New York state and federal prosecutors have launched an investigation into Credit Suisse over mortgage-backed securities that the bank packaged and sold, sources told Reuters. New York Attorney General Eric Schneiderman — who has been aggressively going after banks for improprieties that he argues prompted the 2008 financial crisis — and the Justice Department are behind the probe. The details of the New York Attorney General investigation were not disclosed, but pre- Eric Schneiderman vious lawsuits against the bank alleged misrepresentation of the quality of mortgages underlying securities that it created and sold, Reuters said. Schneiderman and the Justice Department declined to comment as did the bank.

Six-acre swath of LES gets green light for revamp Mayor Michael Bloomberg and city council speaker Christine Quinn

102,918 rsf announced the passage of a redevelopment plan to transform more

than six acres of underutilized land on the Lower East Side. The socalled Seward Park Mixed-Use Development Plan won approval from T HE E QUITABLE B UILDING the city council and Manhattan Community Board 3 last month. 120 BROADWAY The long-dormant area includes nine sites along Delancey and EsClassic National and City • More than 15 subway sex streets, which will be transformed into 1.65 million square feet landmark building and bus lines within IS PLEASED TO WELCOME: of space. The plan calls for 1,000 units of housing, half of which will steps of building In the heart of be earmarked as affordable, along with 15,000 square feet of public Downtown Manhattan • New building installation METROPOLITAN COUNCIL ON JEWISH POVERTY First class institutional • Smaller units available open space. The city is planning to issue a request for proposals for site Entire 7th Floor: 51,000 RSF tenant roster developers in early 2013. Meanwhile, in another area of Lower ManCapital Grille Restaurant AND hattan, Hudson Square Connection, the local business improvement to open at property soon district, proposed a $27 million, five-year redevelopment for the area STRATEGIES FOR WEALTH at the mouth of the Holland Tunnel, Crain’s reported. The measure Portion 37th Floor: 45,000 RSF aims to create more green space and pedestrian walkways. For further information please call: Roger A. Silverstein

WE THANK STUDLEY INC. AND THE FOLLOWING Catherine T. Giliberti Stuart A. Christie BROKERS FOR THEIR PARTICIPATION: Tel. 212.732.9700 Fax 212.732.9708

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32 November 2012 www.TheRealDeal.com

Joseph J. Artusa jartusa@silvprop.com 212.732.9700

DOB to expand online permit approvals program Mayor Bloomberg and Department of Buildings commissioner Robert LiMandri announced an expansion last month of the NYC Development Hub — an online review system launched a year ago that has since approved hundreds of projects citywide. The newly expanded program, which has been dubbed the “Hub Self-Service,” will allow design professionals to submit plans, Buildings Commissioner get permits and pay the fees for small conRobert LiMandri struction projects online, according to a news release. Those projects include office improvements, façade repairs and home modifications. The new program is projected to save the industry $50 million annually. Compiled by Zachary Kussin

www.silversteinproperties.com

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Technology

and

Real Estate

Is the tech boom being overblown? P. 38

s Manhattan’s tech leasing

es signed over the last two years.

companies investing here — like

boom for real? That large-

The goal was to see what kinds of

Google (which paid $1.8 billion to

ly depends on how it’s de-

companies are taking space, what

purchase 111 Eighth Avenue), and

fined. The problem is that

kinds of leases they’re signing and

Cornell University and Technion-Is-

the real estate industry is

which brokerages are doing the

rael Institute of Technology (which

deals.

are partnering to build a $2 billion

having a difficult time defining it. That’s because in today’s world,

evelt Island) — will only boost local

is mandatory, nearly every com-

focus on the Internet as their main

employment.

pany in the country could be clas-

source of revenue, such as the pro-

sified as “tech” in some way. And

fessional networking site Linke-

we’ve seen over and over again is

classifications get trickier when

dIn, the retail giant Amazon and

a commitment to make New York

the company is, say, a publisher

the social networking site Four-

City a viable alternative to Silicon

that devotes serious capital to its

square, among scores of others.

Valley, a place where true inno-

In addition, while many com-

vation occurs,” Google executive

not large occupiers of space,” said

chairman Eric Schmidt told the As-

Greg Taubin, executive managing

sociated Press last month. And over the past year, venture

director at Studley. “It’s not that

the current tech leasing situation

they are taking over leasing in New

capital investors have poured in

a boom because it’s brought an

York City, a 400 million-square-

about $1.8 billion into local firms.

onslaught of new businesses that

foot market.” Taubin represented

Yet even as tech firms are growing

need space, by most accounts

social product development com-

and hiring, the industry is facing

these companies still only repre-

pany Quirky in its lease at 606

headwinds.

sent a fraction of the market. For

West 28th Street. Furthermore, tech leasing is be-

While venture capital funding over the past two years has been

shows that what it classifies as

ing driven by shorter-term deals,

higher than in any period since

“computer service and technolo-

which make tech leasing appear

2001, funding over the last 12

gy” accounted for about 6.4 per-

more active than an industry with

months was down 22 percent from

cent of all Manhattan office space

longer leases, sources point out.

the previous four quarters.

leased in the first nine months

In addition, in our survey of the

In addition, the stocks of mar-

of the year, while Cassidy Turley

tech landscape, we also looked

quee brands like Google and Apple

shows that deals classified as

at the leasing brokers who are

have performed poorly over the

“information and new media” ac-

going after these tech deals and

past month. And clouds are form-

counted for about 14 percent.

the tactics they’re using to pry cli-

ing on the West Coast: In San Fran-

ents loose from their competitors.

cisco, tech sublease space is start-

the data believe that technology is

By some tallies, there have been

ing to creep back on the market.

not a flash in the pan.

1,000 start-ups created in the past

Nevertheless, those closest to

“We talk a lot about it internal-

five years — a fertile ground for

ly,” said Tristan Ashby, research

Robert Sammons, vice president

agents generally boxed in by their

manager at Jones Lang LaSalle,

of research services at Cassidy

firm’s senior brokers who jealously

but he was not seeing it here. “The

Turley. But he added that it’s a dy-

guard their turf.

news out of San Francisco seems

“Yes, it is definitely real,” said

namic market: “There are a lot of

Digiterati deals: Page 38

“For the most part, these are

“Over the last few years, what

mercial leasing brokers consider

example, Colliers International

Napster and Facebook cofounder Sean Parker

applied-sciences campus on Roos-

panies located in Manhattan that

out the day.

P. 44

We zeroed in on leases for com-

where having an Internet presence

website and is updating it through-

P. 42

TRD dissects the number of deals in the sector, where tech companies are locating and the brokers winning over Internet clients

“These younger customers are

to be that [leasing] has flattened.” To get a better sense of what’s

companies that are established,

more open-minded about their

and then you have your start-ups.

[brokers],” said Jack Petrie, pres-

coming down the pipeline, we also

… Some of them will make it, and

ident of brokerage Office Lease

looked at which tech tenants are

some will sell themselves to the

Center. He was previously at Cre-

currently on the hunt for more of-

Googles of the world and some will

saPartners New York, where he

fice space.

go under.”

represented clients such as Am-

And we mapped out where

azon and Sailthru, which collects

some of the top tech entrepreneurs

dissected the tech leasing craze

data to help companies under-

— like Facebook cofounder Sean

that’s gotten so much attention

stand their web users.

Parker, Google cofounder Sergey

This month, The Real Deal

Brin and Reddit cofounder Alexis

lately to get a better handle on the

As a result, the area has be-

Brokers scramble for tech tenants: Page 42

impact it’s having on the commer-

come intensely competitive for

Ohanian, among others — live in

Where the techies reboot: Page 44

cial market. We analyzed approxi-

broker business.

the Big Apple. Think Downtown and

www.TheRealDeal.com November 2012 37

mately 70 of the largest tech leas-

There’s no doubt that private

Brooklyn. By Adam Pincus

www.TheRealDeal.com January 2011 2 www.TheRealDeal.com November 2012 375

TECHNOLOGY

AND

REAL ESTATE

Digiterati deals Dissecting some of NYC’s biggest and most notable tech-leasing transactions of the last two years BY ADAM PINCUS he spiritual center of the city’s technology zone remains Silicon Alley, centered on Fifth Avenue and Broadway, but over the past decade it has spread out widely from there, with nodes growing in Chelsea, Hudson Square and even Midtown. That’s true now more than ever, as the tech industry expands, and companies that were once housed at 111 Eighth Avenue, which Google bought in 2010, slowly move out and look for new spaces. (Google is actually still squeezed for space there

because of preexisting leases.) In addition, there’s a lot of fluidity in the tech industry as firms grow, shrink and get purchased by other companies. As a result of the rapid changes in the industry (and the uncertain economic times), many of these firms are signing short-term leases and staying in commercial spaces for as little as two years. This month, The Real Deal charts more than 100 of Manhattan’s biggest tech deals of the past two years and does a more in-depth analysis of 15 of the most notable ones.

75 Ninth Avenue

11 West 19th Street

1065 Sixth Avenue

Broker: Kenneth Rapp and David Hollander (CBRE Group)

Broker: Jamie Katcher and Frank Coco (Cushman & Wakefield)

Brokers: Jon Mayeske and Frank Coco (Cushman & Wakefield)

Less than two years after buying the 2.9 million-square-foot 111 Eighth Avenue for $1.8 billion, Mountain View, Calif.–based Google is boxed in because the building has a bunch of preexisting leases. As a result, the search engine giant, which has approximately 775,000 square feet in the building, is expanding. Last month, it inked a deal across the street at the Chelsea Market at 75 Ninth Avenue for about 94,000 square feet, the Wall Street Journal reported. The firm now has 202,000 square feet in that building.

In September, this Amsterdam-based global tech and marketing company added 26,000 square feet of space to its main New York office at 11 West 19th Street. The deal was revealed just days after French ad giant Publicis announced it would buy the firm for about $540 million. The new space gives LBi a total of 78,000 square feet at the 11-story building located in the Flatiron District and represents its second expansion in as many years. LBi originally moved to the 19th Street building in 2010 with a 52,000-square-foot lease, after outgrowing the 27,000 square feet it leased at 295 Lafayette Street. The firm, which is focused on social media marketing, has two other locations in Manhattan, at 225 Park Avenue South and 12 Vestry Street.

Not all the firms signing leases are brandnew start-ups. Online food ordering service Seamless, founded in New York City in 1999 during the last tech boom, signed a deal for 28,681 square feet at 1065 Sixth Avenue at 40th Street in May 2011. It now offers restaurant deliveries in 28 cities around the U.S. as well as London.

641 Sixth Avenue Broker: Lisa Kiell (Jones Lang LaSalle) Microsoft is another of the global computer technology and Internet firms looking to expand in Manhattan. The firm, which owns the search engine Bing, among other websites, is considering a move from its New York headquarters, now at 1290 Sixth Avenue, to a larger space at 11 Times Square (see related story on page 42). Last month, Microsoft snapped up 22,000 square feet at 641 Fifth Avenue, leasing the entire seventh floor formerly occupied by social media developer Meebo, which Google purchased in June for $100 million. Google relocated Meebo’s staff and put the space on the sublease market in August. It’s one of the few spaces vacated by a shuttered tech firm in Manhattan.

38 November 2012 www.TheRealDeal.com

685 Third Avenue Broker: Gus Field (Cushman & Wakefield) The cloud computing firm that is reportedly launching a high-stakes effort to shed its reliance on software giant Oracle signed a lease in August for 74,349 square feet at 685 Third Avenue in Midtown. That’s about four and a half times the space it is leaving at 140 East 45th Street. Interestingly, the company signed a 10-year lease, signifying it’s one of the more stable companies in an industry blitzing landlords with requests for shorter-term leases.

The streaming Internet music company is one of the many firms that have been squeezed out since Google purchased 111 Eighth Avenue. But the Swedish company remained in Midtown South when it signed a lease in September for 63,285 square feet at 620 Sixth Avenue, in a large expansion from the 11,000 square feet it had occupied in Google’s building.

1500 Broadway Broker: Joseph Thanhauser and Benjamin Mohr (Byrnam Wood)

Broker: Stephen Siegel (CBRE Group)

The website About.com signed a lease in June for 45,337 square feet on two floors at 1500 Broadway. The move came shortly before the website’s parent, the New York Times Company, announced in September that it had sold About.com to Barry Diller’s Internet conglomerate, IAC, for $300 million. Despite the sale, the firm is expected to remain at the Times Square location.

The Noho-based publicly traded software developer Take-Two Interactive — the company responsible for controversial video games like “Grand Theft Auto” and car racing–themed “Midnight Club” — signed a 69,005-square-foot, 10-year lease renewal at 622 Broadway. The company first moved into the Broadway location in 2002.

641 Sixth Avenue

622 Broadway

Broker: Allyson Bowen and Ryan McKinney (Studley)

620 Sixth Avenue Broker: David Goldstein and Nick Farmakis (Studley)

In some instances, the rapid buying and selling of tech companies is leading to more subletting. The California-based Meebo — a social-media software developer founded in 2005 — signed a five-year, 22,047-squarefoot lease for the entire seventh floor at 641 Sixth Avenue in August 2011. But not even a year later, Google bought Meebo and, in September of this year, put the space on the Continued on page 40

TECHNOLOGY

Recent NYC tech leases Company 10gen

Address

Sq. ft.

568 Broadway

12,849

20x200

568 Broadway

n/a

33Across

229 W. 28th St.

12,500

Dogpatch Labs

36 E. 12th St.

N/A

LanguageMate

102 W. 38th St.

15,600

Sailthru

10 Hudson Sq.

17,775

DonorsChoose .org

213 W. 35th St.

N/A

LBi

11 W. 19th St.

78,000

Salesforce.com

685 Third Ave.

74,349

LearnVest

740 Broadway

3,793

Seamless

1065 Sixth Ave.

28,681

eBay-Hunch

625 Sixth Ave.

35,156

350 Fifth Ave.

42,400

SecondMarket

26 Broadway

33,732

Efficiency 2.0

165 William St.

N/A

Live Gamer

678 Broadway

3,700

Shapeways

56 W. 22nd St.

10,000

Livestream

111 Eighth Ave.

N/A

419 Park Ave. South

N/A

Enterproid

21,059

LivingSocial

101 Fifth Ave.

60,405

Spotify

620 Sixth Ave.

63,285

Stack Exchange

One Exchange Plaza

30,230

StreetEasy

895 Broadway

7,500

Take-Two Interactive

622 Broadway

69,005

TechStars

36 Cooper Sq.

7,000

TheLadders

137 Varick St.

12,829

Thrillist

568 Broadway

22,000

Totsy

27 W. 20th St.

N/A

Tremor Video

53 W. 23rd St.

22,225

Tumblr

35 E. 21st St.

28,277

About.com

1500 Broadway

45,337

Adobe

1540 Broadway

36,200

Everyday Health

345 Hudson St.

Amazon

1350 Sixth Ave.

24,707

F5 Networks

12,487

Apple

100 Fifth Ave.

45,000

600 Lexington Ave. 95 Morton St.

23,500

AppNexus

28 W. 23rd St.

24,500

Fab

Art.sy

401 Broadway

6,000

Facebook

335 Madison Ave.

40,000

Aviary

243 W. 30th St.

10,000

FiftyOne

292 Madison Ave.

30,000

Behance

530 Broadway

N/A

Foursquare

568 Broadway

56,000

Betaworks

416 W. 13th St.

1,943

Gawker Media

210 Elizabeth St.

N/A

General Assembly

902 Broadway

3,634

GetGlue

131 Varick St.

N/A

1515 Broadway

N/A

Birchbox

230 Park Ave. South

N/A

bitly

85 Fifth Ave.

8,500

Gilt Groupe

2 Park Ave.

98,646

Bonobos

45 W. 25th St.

10,000

Google

75 Ninth Ave.

94,000

Boxee

122 W. 26th St.

N/A

GroupMe

26 W. 17th St.

N/A

Business Insider

257 Park Ave. South

12,300

GrubHub

11 Broadway

N/A

H.Bloom

20 W. 22nd St.

23,500

BuzzFeed

54 W. 21st St.

12,500

HealthiNation

35 E. 21st St.

2,500

CafeMom

401 Park Ave. South

35,000

HopStop

10 E. 33rd St.

2,500

31 E. 32nd St.

2,000

Huffington Post

770 Broadway

N/A

Hulu

276 Fifth Ave.

N/A

ideeli

1385 Broadway

10,210

Internet Week New York

22 W. 21st St.

N/A

Clickable

7 W. 22nd St.

8,200

Collective

99 Park Ave.

31,615

Constant Contact

17 Battery Pl.

N/A

CrowdTwist

110 E. 23rd St.

N/A

Daily Candy

584 Broadway

N/A

Dailymotion

156 Fifth Ave.

8,000

Kenshoo, Inc.

80 Broad St.

Lot18

6 E. 32nd St.

20,000

M5 Networks

1385 Broadway

23,500

Mashable

304 Park Ave. South

17,485

Medivo

55 Broad St.

N/A

Meebo

641 Ave. of the Americas

22,000

Meetup

BillGuard

Catchafire

REAL ESTATE

AND

9,000

Kickstarter

155 Rivington St.

N/A

Knewton

100 Fifth Ave.

16,000

632 Broadway

11,920

Microsoft

641 Sixth Ave.

22,000

Mr. Youth

225 Park Ave. South

27,025

Net-A-Porter

100 Fifth Ave.

32,144

Turntable.fm

532 Broadway

N/A

Offerpop

36 E. 31st St.

10,000

Twitter

340 Madison

11,119

OMGPOP

632 Broadway

2,500

Uber

447 Broadway

N/A

OneWire

540 Madison Ave.

15,000

UrbanDaddy

900 Broadway

6,000

565 Fifth Ave.

N/A

Onswipe

39 W. 14th St.

N/A

Vibrant Media

Outbrain

34 W. 14th St.

25,000

Vimeo

555 W. 18th St.

N/A

Oyster

155 Sixth Ave.

N/A

Warby Parker

295 Lafayette St.

10,800

Paperless Post

151 W. 25th St.

12,813

Yahoo!

1540 Broadway

55,000

Phreesia

432 Park Ave. South

9,000

Yammer, Inc.

218 W. 18th St.

13,504

Pivotal Labs

841 Broadway

17,775

Yelp NY

100 Fifth Ave.

29,505

Quirky

606 W. 28th St.

27,500

Yext

1 Madison Ave.

36,823

Refinery29

30 Cooper Square

6,500

Yipit

3 W. 18th St.

4,200

Rent the Runway

163 Varick St.

N/A

Yodle

50 W. 23rd St.

N/A

Percentage of tech deals by brokerage Cresa 4 deals (153,615 SF)

3.9%

CBRE Group 12 deals (448,329 SF)

Soho/Noho/ Tribeca

Grand Central/ Park Ave. South

Newmark Grubb Knight Frank 10 deals (192,278 SF)

Hell’s Kitchen/ Clinton

Midtown West

Cushman & Wakefield 6 deals (245,033 SF)

Financial District

Midtown East

City Hall

East Village

8.9%

N/A

5.4% 5.4% 23.2%

Other 30 deals (500,939 SF)

# of deals

Jones Lang LaSalle 10 deals (287,076 SF)

33.9%

Neighborhood

Flatiron/ Union Square

10.7% 8.9%

Deals by neighborhood

Studley 6 deals (187,659 SF)

Source for all charts on page: The Real Deal analysis of CoStar Group and CompStak data, and additional research by The Real Deal.

Note: ThisThe ranking is based leasing deals companies thatand haveComtStak Manhattan offi ces that wereresearch. on the city’s Digital 100 list, as well as additional well-known Manhattan firms that have a primary focus on the Internet. The Real SOURCE: Real Dealonanalysis of with CoStar Group data; TRD Deal reviewed a total of 121 deals and found brokers for 79. Of those, 69 were deals inked in 2011 and 2012. NOTE: This ranking is based on leasing deals with companies that have Manhattan offices that were on the city's Digital 100 list, as well as additional well-known firms that have a primary focus on the Internet. The real deal reviewed a total of 121 deals, and found brokers for 79. Of those, 69 were deals inked in 2011 and 2012. www.TheRealDeal.com November 2012 39

Technology Continued from page 38

sublease market, where it was snapped up by Microsoft.

261 11th Avenue

and

to increase their space or move out if need be. After finding the Noho space on his own, the firm’s CEO, 26-year-old Ben Kaufman, was initially reluctant to take space outside of the core Silicon Alley tech area. But with the possibility to grow, Kaufman signed a 10-year lease at the 1.1 million-square-foot Terminal Stores Building at 261 11th Avenue and 28th Street. Taubin is now negotiating for another 15,000 square feet on the same floor of the building for Quirky.

Broker: Greg Taubin (Studley) In 2011, the then-two-year-old crowdsourced design company Quirky signed a 27,500-square-foot lease to move from Noho’s 628 Broadway to this West Chelsea building. The relocation illustrates just how frequently tech firms are asking for — and often getting — expansion and termination rights, which allows them

417 Fifth Avenue

Real Estate

CafeMom Broker: David Dusek (Studley) Atari: 475 Park Avenue South Atari Broker: Henry Goodfriend and Trent Dickey (NAI Global New York City) In many instances, tech firms are taking space from other tech firms that are moving, growing or shrinking. In one such case, CafeMom, a website for moms cofounded by former “Melrose Place” actor Andrew Shue, leased space formerly occupied by Atari, the once-dominant gaming company. CafeMom signed a 10year lease for the 35,000-square-foot seventh floor of 417 Fifth Avenue. At the same time, Atari, which has pared back its business since the days of classic games like Frogger, moved to a much smaller space, with just under 8,000 square feet, at 475 Park Avenue South.

BANKRUPTCY LEASE AUCTION* (Transactions Subject to Bankruptcy Court Approval)

Bid Deadline: 12/7/12 • Auction Date 12/12/12 (Dates Subject to Change)

T! W EN LOT R BEKE AR M

Below Market Leases For Sale in Extremely Desirable NY & NJ Locations Ranging from 17,145+ to 54,000 + Sq. Ft.

11 Strategically Positioned Retail Leases Shopping Center & Street Locations Tremendous Flagship Potential *Disclosure-Pursuant to an Order dated August 8, 2012, of the United States Bankruptcy Court presiding over the Chapter 11 case, Case #12-13312( MG) In Re Daffy’s Inc. (“Daffy’s”), Daffy’s was authorized to sell certain assets to Jericho Acquisition l, LLC (“Jericho”) including but not limited to its interest in certain real property leases. Jericho has retained GA Keen Realty Advisors, LLC and Keen Realty, LLC to conduct an auction in order to sell these real property leases acquired from Daffy’s.

GA Keen Realty Advisors, LLC P: 646-381-9222 • Daffys@greatamerican.com www.greatamerican.com/keen

40 November 2012 www.TheRealDeal.com

Client: GA Keen • Job No: GAK-XXX • Subject: DAFFYS Size: 7.625 in x 9.75 in” • Color: BW • Publication: New York Times • Issue Date: NOV 4,7 ,11,14This Ad Prepared by SMM Advertising, 631-265-5160

100–104 Fifth Avenue Broker: Martin Horner (Jones Lang LaSalle) In one of the most high-profile tech expansions over the past two years, iPad and iPhone maker Apple added 45,000 square feet at 100–104 Fifth Avenue in late 2011. That was a year after first taking about 10,000 square feet in the building, which is in the epicenter of Silicon Alley. The bulk of the new space is for Apple’s advertising division, iAd, which Fortune reported last month is not doing well.

1 Madison Avenue Broker: Neil Goldmacher and John Moran (Newmark Grubb Knight Frank) Just a few months before online listing firm Yext announced it would sell its profitable ad service business to the CityGrid division of IAC for a reported $30 million, it signed a lease for 36,823 square feet at the 1.2 million-square-foot 1 Madison Avenue in Midtown South. Yext’s roughly seven-year lease was signed in May. The company is vacating 28,744 square feet at Chelsea Market, which is being gobbled up by Google, in its recent deal there for 94,000 square feet.

625 Sixth Avenue Broker: Sacha Zarba, Ben Friedland and Frederick Fackelmayer (CBRE Group) The more established tech firms like online auctioneer eBay are often the ones in the tech industry signing longer leases. The company, headed by CEO John Donahoe, inked a 10-year deal at 625 Sixth Avenue for 35,156 square feet. The firm expects to move as many as 200 people into the space in the next several years in what it is calling its Technology Center of Excellence. The online auction house now owns the fast-growing, Webbased PayPal. TRD

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

Technology

and

Real Estate

Brokers scramble for tech tenants Big commercial firms dominate in the sector, but the competition is fierce as leases turn over at faster-than-normal rates “The tech people seem to want a lot of space, and I don’t know if they really need that much.”

By Adam Pincus he robust growth of Internet companies in Manhattan has spurred a feeding frenzy of pitching, cold-calling and client poaching among brokers hoping to profit from one of the city’s few expanding industries. Yet dependable figures on this difficult-to-define market remain elusive; the brokerage firms have not even come up with a consistent system for classifying which companies actually fall into the tech sphere. (See related story on page 37.) To put the technology sector in perspective, this month The Real Deal analyzed which brokers and firms represented the tech companies in nearly 70 leases, all of which were signed over the past two years. To come up with that sample,

Bonnie Shapiro, Allied Partners we relied on the Bloomberg administration’s so-called “Digital 100” list, a compendium of what the city calls the biggest consumer Internet companies, based on employees, hiring, valuation, funding and traffic. We supplemented that with significant leases signed by high-profile Internet firms that the city did not include. And we excluded computer hardware firms and supporting software companies that are not traditionally viewed as part of the tech sphere. Jim Wenk, an executive vice president

at Jones Lang LaSalle, said his firm began aggressively going after the tech sector about three years ago, when the overall market was cool. “[Tech companies] were getting venture capital funding, they were hiring people and investing in technology, and hence they would need more space,” he said. In addition, TRD found that, for the most part, it’s not the city’s senior commercial leasing brokers who’ve risen to the top of the tech-leasing game. In fact, there were only a few top-level executives

among the more than 90 agents who brokered the tech leases that TRD analyzed. They included CBRE Group’s Kenneth Rapp and Stephen Siegel, and Newmark Grubb Knight Frank’s David Falk. While the global services firms like CBRE and JLL dominated the list, there was a surprising level of diversity among the brokerages, and there was no shortage of agents at smaller firms representing some of the city’s top tech companies. “[A broker] with extensive knowledge is more key than the brand of the real es-

Top tech leasing brokerages

Firm

# of leases (2011 & 2012) Square feet

Notable deals

CBRE Group

448,329

Kenneth Rapp and David Hollander represented Google, which leased 94,000 sf last month at 75 Ninth Avenue. Sacha Zarba represented LinkedIn in a 42,400 sf deal at the Empire State Building. Zarba, who handled five deals on this list, brokered more deals than any other agent.

Jones Lang LaSalle

287,076

Sean Black represented M5 Networks in a 22,500 sf deal at 1385 Broadway. It was one of Black’s four deals in the group of leases analyzed.

Cushman & Wakefield

245,033

Augustus Field represented Salesforce.com in a 74,349 sf deal at 685 Third Ave.

Newmark Grubb Knight Frank

192,278

Neil Goldmacher and John Moran represented Yext in its 40,000 sf lease at 75 Ninth Ave.

Studley

187,659

David Goldstein and Nick Farmakis represented Spotify in a 63,285 sf lease at 620 Sixth Avenue.

CresaPartners New York

153,615

Marcus Rayner and Justin Halpern represented Amazon in a 24,707 sf expansion at 1350 Sixth Ave.

Total deals analyzed with brokers

1.8 million

Source note: The Real Deal analysis of CoStar Group and ComStak data; TRD research. The ranking is based on 2011 and 2012 leases signed by companies that have Manhattan offices. TRD included firms that were on the city’s Digital 100 list, as well as additional well-known firms that have a primary focus on the Internet. TRD reviewed a total of 121 deals and found brokers for 79. Of those, 69 were deals inked in 2011 and 2012.

42 November 2012 www.TheRealDeal.com

www.TheRealDeal.com January 2011 25

Technology

CBRE’s Stephen Siegel

JLL’s Sean Black

tate company,” said Michael Rouzenrouch, president of the six-person, Soho-based brokerage Miyad Realty, who’s represented the blog-hosting website Tumblr in the past.

The churn

The high churn rate of leases in the tech industry creates a unique dynamic among brokers. Indeed, according to TRD’s analysis, lease lengths in the tech industry are on average about half as long as the 10 or 15 years that are standard in the rest of Manhattan’s office-leasing sector. With such frequent turnover, there’s more opportunity for brokers to poach accounts; indeed, in some cases, leases are coming up for renewal every two or three years. Sometimes the poaching (or attempts at poaching) can get especially ugly. Ruth Colp-Haber, a partner with Midtown boutique brokerage Wharton Prop-

and

CBRE’s Sacha Zarba

erty Advisors, said a competing landlord broker attempted to wrest an Israeli tech firm from her. “The agent wanted to steal them away. I explained [to the client that he] had an inherent conflict of interest,” she said, pointing out that the agent could have ended up representing both the tenant and the landlord. She held onto the account. “It is more competitive than ever,” Colp-Haber noted, “and harder to get an exclusive.” Adding intensity to the battle for tenants is the overall slowdown in the leasing market. That has been especially pronounced in the larger deals, a report from CBRE last month showed. So tech, while not the only game in town, is the one with the most potential. “Everybody wants [their tech tenant] to be the next whale,” said Glenn Markman, an executive vice president at Cushman & Wakefield. He represented the vintage

Real Estate

Newmark’s David Falk

clothing and crafts website Etsy when it took space in Brooklyn. (Etsy has since moved to CBRE, according to a source.) Still, the Etsy case is just one example of how the large firms dominate when it comes to representing the big tech firms. CBRE did more tenant rep deals than any other firm in the 69 deals TRD analyzed. The firm brokered 12 deals totaling 448,329 square feet during the past two years. JLL ranked second, with 10 deals totaling 287,076 feet. The next four firms in order were Cushman, Newmark, Studley and CresaPartners New York. Those firms handled 48 out of the 69 deals. According to the survey, some of the most active tech brokers (considering both square feet and number of deals) are CBRE’s Sacha Zarba, JLL’s Sean Black and Martin Horner, Cushman’s Frank Coco and Studley’s Greg Taubin. Other smaller firms represented top

Studley’s Greg Taubin

tenants in top deals, too. For example, Byrnam Wood, a six-person shop based in Midtown, represented the online resource site About.com, and Vicus Partners, a four-broker firm, represented tech education firm General Assembly in two recent deals.

A different world The shorter-term deals generate more activity over time — even as they represent a small slice of the broader Manhattan office-leasing market. While brokers like the steady turnover they create, the short deals yield a much lower commission for those brokers because the fee is based in large part on the length of the lease. The standard commission on a 10year deal is about 32 percent of the first year’s rent. That’s about $250,000 on a 20,000-square-foot deal at $40 per foot. Continued on page 112

Tech firms on the prowl

The Internet companies that are in the market for Manhattan space

ven as top tech firms like Google and Microsoft have inked deals in recent weeks, others are still scouring the market for space. The Seattle, Wash.–based computer and software giant Microsoft, which owns search engine Bing among other websites, has leased a small, 22,000-square-foot space at 641 Sixth Avenue, on the corner of 20th Street. But it’s reportedly still in discussions to either stay at its current location, 1290 Sixth Avenue (where it now has about 175,000 square feet), or move to as much as 400,000 square feet at 11 Times Square. The company is being represented by Jones Lang LaSalle’s Lisa Kiell, who keeps a low profile, but is a veteran dealmaker. Networking site Twitter, also represented by JLL, is also on the hunt for space. Others in the market, however, are smaller, lesser-known firms like online game developer Arkadium, represented by CBRE Group, and Internet device integrator Usablenet, represented by Newmark Grubb Knight Frank.

Even as Silicon Alley has broadened its boundaries, tech brokers say some neighborhoods remain in demand for certain types of industries. The cutting edge of Internet technology is seen to be centered on mobile applications, and those tenants are sticking to the Union Square and Flatiron District areas, said Ashkán Zandieh, an associate at ABS Partners Real Estate who focuses on tech leasing. Others said the size of the company is a major factor in determining where it looks for space. “Start-ups prefer to be south of 34th Street, then as they grow, they are looking for more services and amenities,” and will look at the larger floor plates and more sophisticated air-conditioning and other services that Midtown buildings offer, said John Lizzul, managing director at Newmark. By Adam Pincus

Tech tenants looking for space in the NYC market Firm

Current Location

looking for (max sq. ft.)

Tenant’s brokerage

Microsoft (website, software)

1290 Sixth Avenue

400,000

Jones Lang LaSalle

Amazon (online retailer)

1350 Sixth Avenue

100,000

CresaPartners New York

Media Ocean (social media advertising)

115 West 18th Street

100,000

Newmark Grubb Knight Frank

Useablenet (mobile platform)

Lower Fifth submarket

50,000

Newmark Grubb Knight Frank

Vibrant Media (contextual advertising)

565 Fifth Avenue

40,000

Newmark Grubb Knight Frank

OutBrain (web marketing)

93–95 University Place

30,000

N/A

Totsy (retailer targeted at new parents)

10 West 18th Street

30,000

Norman Bobrow

Twitter (microblogging and social media)

340 Madison Avenue

25,000

Jones Lang LaSalle

Arkadium (game developer)

920 Broadway

17,000

CBRE Group

Bleacher Report (online sports news)

153 Kearny Street (San Francisco)

15,000

CBRE Group

Source note: TRD sources.

28 March 2012 www.TheRealDeal.com

www.TheRealDeal.com November 2012 43

Technology

and

Real Estate

Where the techies reboot A roundup of NYC pads that Silicon Alley’s most powerful players call home

But this month, The Real Deal looked at where some of New

By Christopher Cameron

s New York’s rapidly expanding tech sector gobbles up York’s most savvy and powerful tech personalities are pitching increasing large swaths of prime office space, much their tents. Not surprisingly, Downtown and Brooklyn neighborof the focus on tech real estate has been on what hoods — where bars and restaurants abound — proved most kind of office space those companies are taking.

Sean Parker

apster and Facebook cofounder Sean Parker has tried to distance

himself from Justin Timberlake’s depiction of him as a self-obsessed party

popular.

hood may help him shake his bad boy

do at 744 Greenwich Street for $8.5

5,000-square-foot, 56th-floor penthouse

image. Pellegrino declined to comment

million from Bill Brady, managing direc-

in the Millennium Tower, located at 101

on the deal.

tor of Credit Suisse First Boston. The

West 67th Street, for $20.75 million —

four-bedroom apartment features a

a record for the building, Howard Mar-

limestone bath with heated floors and

golis of Prudential Douglas Elliman told

oogle made a splash in NYC with

a master suite with a 23-foot balcony.

TRD at the time. Margolis and Raphael

its $1.8 billion purchase of 111

Google declined to comment and calls

De Niro, also of Elliman, represented

Eighth Avenue in late 2010. And last

to Stribling & Associates’ Laurie Sil-

Gartner in the deal. In July, Gartner paid

month, the Wall Street Journal reported

verman, the listing broker, were not re-

$9.15 million for a 2,946-square-foot

that because it’s squeezed for space

turned.

unit in the Metropolitan Tower at 146

Sergey Brin

in its new building, it leased another 94,000 square feet across the street at Chelsea Market, where it already has office space. But before the tech giant sets up shop in Manhattan, bil-

Gideon Gartner

ideon Gartner, the CEO and founder of Gartner, a Stamford, Conn.–

based global technology research firm

West 57th Street, public records show.

Christopher Hughes

edia entrepreneur and Facebook cofounder Christopher Hughes

turned heads this year after purchasing

Napster and Facebook cofounder Sean Parker

the majority stake in the New Republic and becoming the magazine’s publisher and editor-in-chief. In the wake of Hughes’s takeover, TNR opened a 3,750-square-foot NYC office just above Madison Square Park at 60 Madison Avenue. But Hughes, like many tech

The Bacchus House at 40 West 10th Street, which Parker bought in 2010

Tech entrepreneur Gideon Gartner

boy in the 2010 film “The Social Network,” calling the character a “morally reprehensible human being” at a 2011 conference. But Bacchus House — his Greenwich Village bachelor pad, which features an indoor pool, a private parking garage and an entire New York subway car — isn’t helping him avoid comparisons. Parker purchased the 40 West

Google cofounder Sergey Brin

lionaire company cofounder Sergey Brin had already secured a prime piece of city real estate in Greenwich Village. In 2008, Brin and his wife, Anne Wojcicki, bought a 3,457-square-foot duplex con-

10th Street townhouse in 2010 for $20 million, according to real estate web-

tions on technology-related matters,

Sotheby’s International Realty brokered

keeps his primary residence in Aspen,

the deal between Parker and the seller,

Colo., but that hasn’t kept him from

Enrico Cinzano, who owns of a brand of

purchasing several high-end properties

vermouth. Still, the New York Post remonths pregnant. So perhaps father-

44 November 2012 www.TheRealDeal.com

The Metropolitan Tower at 146 West 57th Street, where Gartner bought a $9.15 million apartment in July

that advises over 12,000 organiza-

site StreetEasy. Michael Pellegrino of

ported last month that his fiancée is six

Facebook cofounder Christopher Hughes

in the New York metropolis. TRD reA unit at 744 Greenwich Street, where Brin owns an $8.5 million duplex

ported in August that Gartner sold his

30 Crosby Street, where Hughes bought a $4.8 million apartment in 2010

www.TheRealDeal.com 2011 25 PHOTOGRAPH OF 30 CROSBYJanuary STREET FROM COSTAR

Technology

and

Real Estate

moguls, calls Downtown home. Hughes

burg home. Early this year, he bought a

purchased a 4,164-square-foot apart-

1,286-square-foot, two-bedroom unit

ment at 30 Crosby Street in Soho with

in the Esquire Building, located at 330

husband Sean Eldridge for $4.8 million

Wythe Avenue, for $1.6 million, accord-

in 2010, according to public records.

ing to public records.

Corcoran Group broker Julie Pham, who

Paul Allen

handled the sale, declined to comment.

ack in 1975, Paul Allen cofounded

But according to the listing, the massive

Microsoft with Bill Gates, later be-

one-room loft is divided by a row of wood columns, complimented by exposed brick walls and antique wood floors. The

Dennis Crowley, cofounder of Foursquare 397 West 12th Street, where Wilson bought a penthouse for $13 million in 2010

couple also owns an estate in Garrison, N.Y., according to the New York Times.

Greenwich Village townhouse, located at 11 West 10th Street, for $34.5 mil-

Alexis Ohanian

lion to Stuart Coleman, comanaging

n 2005, Alexis Ohanian cofounded

partner at the law firm Stroock, Stroock

Reddit.com, the hugely popular so-

& Lavan — a record price for a Down-

cial-news site. Since then, the site has

town townhouse at the time. More re-

been acquired by Condé Nast for an un-

cently, Wilson purchased the penthouse

disclosed amount of money, attracted

at 397 West 12th Street for $13 million.

Paul Allen, cofounder of Microsoft

According to public records, the deal Crowley bought an apartment at 303 East 8th Street in 2007

social networking sites Dodgeball (now defunct) and Foursquare. And, like a growing number of techies, Crowley has chosen Soho (568 Broadway) for Four-

Alexis Ohanian, cofounder of Reddit.com

closed in January 2010.

David Karp

he text, image and video sharing website Tumblr revolutionized the

aesthetics of blogging, transforming

square’s headquarters. But according

dull blocks of text into glittery, pho-

to public records, he lives in a two-bed-

to-jammed morsels. Standing behind

room co-op at 303 East 8th Street in the

the 77.2 million blogs hosted on the

East Village. He purchased his pad back

site is David Karp. Karp runs Tumblr out

in 2007 for $1.15 million, according to

of his 21,000-square-foot office at 35

public records.

East 21st Street, but he calls Williams-

Frederick Wilson

4 East 66th Street, where Allen bought a co-op for $25 million last year

rederick Wilson is the blogger and venture capitalist responsible for

coming the 48th richest person in the world, according to Forbes’s 2012 ranking. Post-Microsoft, Allen invests in tech-

One Brooklyn Bridge Park, where Ohanian bought a two-bedroom unit last year

nology and real estate, including the Lenox Hill penthouse he calls home. Allen

a site-crashing interview with President

purchased his co-op unit at 4 East 66th

Barack Obama, and grown to 3.4 billion

Street adjacent to Central Park last year The head of Tumblr, David Karp

page views for the month of August, an

for $25 million, according to public re-

8.8 percent increase from 3.1 billion the

cords. Allen already owns an 11th-floor

previous month. Ohanian lives in Brook-

apartment in the co-op that he picked

lyn Heights, where he continues to work

up back in 1996 for $13.5 million, ac-

for various tech start-ups and counts real estate titan Elizabeth Stribling as a

cording to the New York Observer. The

Blogger and venture capitalist Frederick Wilson

Observer also noted that the building’s

neighbor. In 2011, according to public

both Flatiron Partners, a firm that invest-

roster of well-known residents includes

records, he purchased a two-bedroom,

ed in many dot-com, bubble-era start-

Ace Greenberg, the former CEO of Bear

1,385-square-foot unit in One Brooklyn

ups, and Union Square Ventures, a firm

Stearns who sits on the building’s co-

Bridge Park at 360 Furman Street for

with investments in Twitter, Tumblr, Four-

op board, oil tycoon Sid Bass and Iraqi

$1.24 million.

square and 10gen — a software com-

financier Ezra Zilkha. More famously,

pany that provides production support

Allen owns a multibuilding complex on

Dennis Crowley

for the document-oriented database

ennis Crowley made his name co-

MongoDB. TRD previously reported that

founding location-based mobile

in 2007, Wilson sold his 55-foot-wide

PHOTOGRAPH 303 EAST 8TH STREET FROM COSTAR 28 MarchOF2012 www.TheRealDeal.com

Seattle’s Mercer Island, which includes The Esquire Building at 330 Wythe Avenue in Williamsburg, where Karp bought an apartment earlier this year

six mansions, a fitness center and a ballroom, among other amenities.

TRD

www.TheRealDeal.com November 2012 45

Watching the World Trade Center

While office leasing at the site has been slow in 2012, building officials expect that to change in 2013

By Guelda Voien hile last year brought a 1.1 million-squarefoot lease to 1 World Trade Center, leasing at the World Trade Center site — and Downtown in general — has been considerably slower in 2012. The closely watched negotiations that would have put massive law firm Chadbourne & Parke into 300,000 square feet at the tower fell apart abruptly in March. And while the long-stalled General Services Administration lease was finally inked in July after five years of negotiations, the agency took just a fraction of the 900,000 square feet it was originally considering. In fact, since April, no additional leases have been announced for 1 World Trade — now New York City’s tallest tower at 105 stories. And so far only two leases — for 600,000 feet for the Port Authority of New York and New Jersey and 600,000 square feet for the City of New York — have been inked at 4 World Trade, which is slated to come online next year. Still, there seems to be activity in the pipeline. The New York Observer reported last month that advertising giant WPP’s subsidiary Group M has been browsing for about 500,000 square feet at 3 World Trade, where it is considering a deal to become an anchor tenant. And one broker told The Real Deal that an unidentified law firm was considering the anchor spot in 4 World Trade, while another broker hinted that digital darling Facebook and Nielsen Media Research were looking in and around the building. Nonetheless, construction at 2 World Trade — which, like towers 3 and 4, is owned by Silverstein Properties — will halt at street level if an anchor tenant is not signed, a source said, confirming previous reports. Meanwhile, the height of 3 World Trade as well as the pace of construction will be determined by tenant demand, as has been reported. The building has temporarily topped off at seven stories. Rents at these towers tend to be slightly higher than those at 1 World Trade — which hover at around $75 per square foot, according to sources, because of larger floor plates and slightly easier transit access. The bulk of space at 1 World Trade will, of course, be occupied by magazine publisher Condé Nast, which signed an initial lease in May 2011, and upped its total space by 140,000 square feet, to 1.2 million square feet, earlier this year. But now, 1 World Trade, which will still have another 1.1 million square feet to lease up when the balance of the tower hits the market, is starting to gear up for smaller leases. “We are working with an architect to subdivide” at least one floor, but possibly more as needed, said power broker Tara Stacom of Cushman & Wakefield, who heads up leasing at the building.

The power of one The lease signed by the GSA — the federal agency that manages and supports other 46 November 2012 www.TheRealDeal.com

government agencies — accounts only for about one-tenth of the building. While the GSA declined to reveal which government agency it will house there, its lease prohibits “law enforcement, immigration, probation, health or medical welfare” tenants, a spokesperson for landlord the Durst Organization told TRD. One source close to the tower who asked not to be identified said the U.S. Securities and Exchange Commission is currently the front-runner to take the 270,000-square-foot space. The source also said the other agencies are off limits in order to retain the “corporate identity” of the building. Meanwhile, online discount stock brokerage E*TRADE is taking “a hard look” at space, sources said. An E*TRADE spokesperson denied that the company has looked at a 1 World Trade Center space, but it currently occupies 39,000 square feet at the Time-Life Building, according to the CoStar Group. Stacom said she tours the building with prospective tenants “several times a week,” and that interest has come mainly from “law firms, tech companies and other professional services firms.” She also said that considerations of partial-floor tenants in the building have begun in earnest. “We expect, in 2013, to do some [deals for] smaller spaces.” Stacom declined to specify if the building was in negotiations with any tenants. And she declined suggestions that leasing was going too slowly. “We are two years before we can even turn over the whole building, so we’re ahead of schedule,” she said.

Building officials say 1 World Trade Center has prospective tenants touring “several times a week.” But it’s had a slow 2012 when it comes to actual leases.

Refugees from Midtown

“We expect, in 2013, to do some [deals for] smaller spaces.” Tara Stacom, Cushman & Wakefield Insets, from top: Construction at the World Trade Center site; Cushman & Wakefield’s Tara Stacom.

The decision to consider partial-floor leases at 1 World Trade may prove to be a smart decision based on what’s happening in Lower Manhattan. The market for smaller spaces Downtown is ramping up, said Hal Stein, managing principal at Newmark Grubb Knight Frank and head of the firm’s Lower Manhattan office. “Tenants under 10,000 feet always drive Lower Manhattan,” he said. In addition, some noted that the interest in small spaces in the top-shelf buildings is increasing. Plus, as Midtown South heats up and concessions there wane, more tenants are eying Lower Manhattan, including the World Trade Center buildings, brokers said. “While concession packages Downtown haven’t changed, concession packages in Midtown South have,” Stacom said. Most tenants Downtown are receiving $60 or $70 per square foot of landlord contributions to their build-out, including at the Trade Center. The standard free rent concession for a new tenant with good financials is one month for each year a tenant signs for, said Dirk Hrobsky, an executive vice president with DTZ, the commercial brokerage previously known as UGL Limited. As has been reported, Condé Nast shelled out around $60 per square foot for its space, with progressive increases over the course of the company’s 25-year lease. The GSA, which is required by law to pay market rate, is paying similar rents, and will also see price increases at regular intervals during its 20-year lease, a source familiar with the negotiations said. Current asking rents in the building are $75 per square foot for the floors below the sky lobby on the 64th floor, the source said; rents for the space above it have not yet been set. By comparison, average rents for Midtown trophy office space in August were about $89 per square foot, according Continued on page 104

March 2012 00 PHOTOGRAPHS OF WTC FOR THE REAL DEALwww.TheRealDeal.com BY DEREK ZAHEDI; PHOTO OF STACOM BY MARC SCRIVO

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1983: NAACP ACCuses Helmsley-sPeAr of biAs

he NAACP claimed residential and commercial landlord Helmsley-Spear was discriminating against black apartment applicants in a housing development in Queens 29 years ago this month. The civil rights group filed the class-action suit in Federal District Court in Brooklyn, accusing Harry Helmsley’s firm, one of the largest real estate companies in the city, of discriminating against blacks who applied to live in the 3,200-unit Fresh Meadows Apartments. The suit claimed the development — which was built in the late 1940s for returning World War II veterans — passed over black applicants on waiting lists, showed them inferior apartments and did not tell them when apartments became available. An attorney for Helmsley-Spear at the time said the accusations were “preposterous.” Harry Helmsley According to news accounts, racial bias was common in New York City at the time and led to public service advertisements, such as one featuring the popular actor Mr. T the following year raising awareness about housing discrimination. Helmsley-Spear did not admit guilt in connection with the class-action suit, but within six months it signed a consent order agreeing to offer vacant apartments to “qualified black applicants whose applications are still on file.” Helmsley died in 1997.

he city created a new agency called the Department of Relocation to assist an estimated 120,000 New Yorkers who were expected to be forced out of their homes by large public development projects 50 years ago this month. Mayor Robert Wagner created the new department because of the anticipated increase in the number of families that would be displaced by planned urban renewal projects in the coming years. Before the new agency was created, a division with the now-defunct Department of Real Estate performed the same relocation work. Herman Badillo The large public projects that the Wagner administration dealt with included new housing for the West Side Urban Renewal Project between 87th and 89th streets and Central Park West and Amsterdam Avenue, where approximately 6,000 individuals lived. Bronx politician Herman Badillo was tapped as the first commissioner of the new agency — a job he held until 1965. He later rose to become Bronx borough president. In 1967, the Department of Relocation was folded into the then-new agency known as the Housing and Development Administration. The task of moving people and businesses is now known as the Division of Relocation Operations and is a much diminished entity within the Department of Housing Preservation and Development.

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48 November 2012 www.TheRealDeal.com

1962: City AgeNCy formed to reloCAte Nyers

1936: West side rezoNiNg uPs resideNtiAl sPACe

n one of the largest acts of urban planning carried out between the two World Wars, the city approved a rezoning of the West Side 76 years ago this month. The move sharply increased the amount of space reserved for residential buildings in the area. The city’s Board of Estimate approved the plan, which upped the amount of residential area to 22 percent of the land — from 6 percent — between 14th and 59th streets and Seventh and 10th avenues. The amount of unrestricted land fell from 66 percent to 50 percent. Proponents of the rezoning said the increased industrial activity on the West Side was creating demand for apartments. Manhattan’s West Side circa the 1930s The majority of the new residential space was created from 14th to 23rd streets between Seventh and Eighth avenues and from 44th to 57th streets between Eighth and 10th avenues. The land west of 10th Avenue was not affected by the law. The change in zoning followed a four-year study showing a demand for residential space in the 544 city blocks. Compiled by Adam Pincus

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New Development

Condos in context A side-by-side comparison of how a slew of new residential buildings in the works on the Upper East Side stack up next to one another

By Katherine Clarke n the wake of the economic crisis, a citywide inventory drought has sent demand for luxury apartments sky-rocketing across the city. And nowhere, brokers say, is that more true than on the moneyed Upper East Side. However, New York’s most prestigious zip codes are about to see that inventory-crunch change. Developers are currently putting the finishing touches on a number of highly anticipated new residential towers, and readying their shovels for construction on others. In the next few months alone, approximately 363 new units are expected to come onto the market in the neighborhood, according to data provided by new development marketing firm Corcoran Sunshine. Another 79 units are slated to hit the market in 2013 and, so far, 57 more are due to come online in 2014. While inventory is still expected to stay tight in the neighborhood, those numbers represent an increase in new units compared to the last few years. Many of these projects are being designed to fit contextually into a neighborhood known for its landmarked limestone façades and Renaissance mansions. But make no mistake: They all will feature state-of-the-art conveniences and amenities. “In the last wave of real estate developing, the goal was to do all-glass buildings,” said Orin Wilf, president of Skyline Developers, which is building a new 39-unit property at 200 East 79th Street. “I’ve never been a big fan of an all-glass building on the Upper East Side because, contextually, it doesn’t really fit into the neighborhood.” Perhaps easing concerns for developers is that there’s already a recent success story to point to: The new 22-unit condo the Touraine, a Toll Brothers development, hit the market one year ago this month and is now almost sold out. It has just one unit — a five-bedroom penthouse — left for sale, despite the fact that construction is still underway. But unlike others that are now going up on the Upper East Side, that project benefited from a 421-a tax abatement, which made it especially attractive to buyers, said Scott Avram, assistant vice president at Toll Brothers. Read on for a closer look at the Upper East Side’s newest development projects.

50 November 2012 www.TheRealDeal.com

Orin Wilf of Skyline Developers in a model apartment last month at 200 East 79th Street, which is rising on the corner of Third Avenue.

“I wasn’t bidding against anybody, so we’re in the deal at a very good price. By being in the deal at that price, it allows us to sell apartments and not have to charge a ridiculous amount of money.” Orin Wilf, Skyline Developers 200 East 79th Street Number of units: 39 Price: $1,800 per square foot he 19-story tower rising on the corner of 79th Street and Third Avenue has been seven years in the making. That’s how long it took Wilf ’s Skyline Developers to assemble the five smaller parcels needed to create the site. Wilf secured a $112 million construction loan (in a not-so-easy climate for construction lending) from Wells Fargo in March and started construction on the building soon after. The property, which was designed by CetraRuddy, will feature a façade with ornamental accents on the windows. Each of the building’s 39 units has four

or five bedrooms. In addition to those 39 units, six studio apartments on the building’s second floor will be available to buyers who have purchased in the building to use as offices or guest apartments. “It’s right in the center of the Upper East Side, so I knew that once everything came together it would be a very successful project based just on its location,” Wilf said. “I wasn’t bidding against anybody, so we’re in the deal at a very good price. By being in the deal at that price, it allows us to sell apartments and not have to charge a ridiculous amount of money.” Apartments at 200 East 79th Street will range in price from just under $3 million to over $14 million and are opening at around $1,800 per square foot, though

unit-specific prices have not yet been released. The price per square foot is lower than other comparable projects in the neighborhood, Wilf noted. According to data from real estate website StreetEasy, the average listing price for an Upper East Side condo is $1,823 per square foot. The median asking price, meanwhile, is $1,322 per square foot. “We feel we are where the market should be priced,” he said. The project’s location, however, may be a deal breaker for some buyers, noted Andrew Gerringer, managing director at the Marketing Directors, who is not affiliated with any of the projects mentioned in this story. “It’s on a busy corner intersection,” he

PHOTOGRAPH FOR THE REAL DEAL BY PJ SPANIOL www.TheRealDeal.com January 2011 25III

New Development noted, adding that the location may see more noise and foot traffic than desired. Wilf said Skyline conducted rigorous noise tests and has done everything possible to limit the amount of noise in the apartments. “We do live in New York City,” he noted. “Every corner is a busy intersection.” Several industry sources said the developer will likely raise prices once sales gain momentum. “[The pricing] is probably a little low,” said Toll Brothers’ Avram. “I think they’ll sell for much higher than that. By the time they sell out, he predicted, “they’ll probably be over $2,200 a square foot.” The property, which is being marketed by Stribling & Associates, started selling last month. By mid-October, 10 units were already under contract, according to Wilf. The building is slated for occupancy in the third quarter of 2013.

135 East 79th Street Number of units: 30 Price estimate: $3,000 to $3,500 per square foot he Wilfs are not the only New York real estate family building on 79th Street. The Brodsky Organization — wellknown for the Chelsea Enclave, where it created condos in the General Theological Seminary — will soon debut its newest project at 135 East 79th

“I live in the neighborhood,” said Daniel Brodsky, a partner at the company, noting the difficulty of securing a suitable location west of Lexington Avenue. “It’s one of the few places that is a real residential neighborhood.” “We did a lot of work to get the site and we think it’s worth it,” he added, noting that the company invested heavily in the project. While he declined to comment on how much was being spent on construction or say how much he paid Hunter for the site, he said it was “by far the most we have ever spent or contemplated spending [on a project].” The 19-story building was designed by architect and interior designer Bill Sofield, an industry veteran who has collaborated with the likes of jewelry giant Harry Winston. (The architect designed the store’s Shanghai headquarters.) The project is going for an authentic prewar look. The brick building will feature limestone relief sculptures, which were designed by Sofield using a clay model, and will flank the entranceway. Each of the building’s apartments will have a private elevator lobby and a separate service entrance accessed via a back corridor in their unit, Brodsky told TRD. The project’s website depicts the building as something of a throwback to an earlier (and very grand) New York, claiming a “passionate attention to detail that was once common in this city, but is now depressingly rare.” Prices at the building reflect the extra expense at which the building has been constructed, starting at $7 million and

forming a 1940s rental building into a 116-unit condominium. Their firm, RFR Holdings, bought a majori-

RFR Holdings’ 530 Park Avenue conversion. Inset: RFR’s Aby Rosen.

ty stake in the 19-story building in 2010, and has invested close to $70 million to renovate the property, according to published reports.

“What [RFR has] going for them is the panache of being on Park Avenue, which the other buildings do not have. The question is, how much [more money] does that get you? All things being equal, people still prefer new construction over conversion.” Scott Avram, Toll Brothers

A rendering of the Brodsky Organization’s 135 East 79th Street project. Inset: Developer Daniel Brodsky.

Street, between Lexington and Park avenues. Construction on the 30-unit condominium is currently underway; the building is scheduled to open for sales sometime before the end of the year. Brodsky acquired the site four years ago from the Hunter College Silberman School of Social Work, which had been located there for more than 40 years. (As part of the deal, Brodsky built the school a new site on 119th Street.)

PHOTOGRAPH OF ROSEN FOR THE REAL DEAL BY HUGH HARTSHORNE

64 March 2012 www.TheRealDeal.com

going up to more than $20 million for the building’s top-floor apartments. “It’s a very strong location,” said Gerringer, who speculated that Brodsky will be asking top dollar for the units. “They’ll be going for between $3,000 and $3,500 per square foot,” he predicted. The Corcoran Group’s Daniela Sassoun said she already has several clients interested in purchasing units.

530 Park Avenue

Number of units: 116 Price: $3,250 per square foot n Park Avenue and 61st Street, Aby Rosen and Michael Fuchs are trans-

Rosen did not respond to a request for comment. The prewar, white-brick building, designed by architect George F. Pelham, Jr., will feature classic interiors such as marble baths and herringbone hardwood floors. The building will also have a 24hour doorman, a private fitness center, a library and a courtyard with a landscaped garden and reflecting pool, according to the project’s website. The amenity package, while not necessarily superior to those offered by some of the other new developments on the Upper East Side, is unusual for Park Avenue, said Jay Solinsky, president of Classic Marketing, the

company handling sales at the project. The developer is reportedly asking an average of $3,250 per square foot, making it one of the most expensive new Upper East Side condos. While its prominent Park Avenue location goes far to justify its hefty price tags, 530 Park’s floor plans aren’t as “large or as gracious” as the apartments at Philip House, another conversion on 88th Street, said Steve Rutter, head of new development marketing for Stribling, which is selling the rival project. “[530 Park] has smaller apartments,” he said. “I think they’ve tried to create some larger, but I don’t think their layouts on the whole are as large as what we’re offering.” Gerringer agreed. “It’s a top location,” he said. “But for what I think it is, it seems to be high-priced based just on things like floor plans — [they’re] nothing special, but they’re okay. It’s not one of those grand, prewar buildings. It’s got the location, but the building itself is [just] white brick.” The floor plans and combination options, both men said, are limited by the existing structure and the fact that there are still tenants living in the building. Solinksy said the project — where roughly 30 percent of the units are still tenant-occupied — will get a great deal of value from its location. “Location plays heavily into people’s buying decisions right now,” he said. “If they’re going to make an investment in real estate, they want to invest in locations that historically have outperformed and remained somewhat stable in flat markets.” Others echoed that point. “What they have going for them is the panache of being on Park Avenue, which the other buildings do not have,” Toll Brothers’ Avram said. “The question is, how much [more money] does that get you? All things being equal, people still prefer new construction over conversion.” Park Avenue’s reputation precedes it, especially for foreign buyers, Solinksy said. “People are attracted to the historical significance and the stability that Park Avenue affords,” he said.

680 Madison Avenue (Helmsley Carlton House) Number of units: 68 Price: N/A ast year, the city’s Landmarks Preservation Commission gave the green light to a proposed gut renovation and residential conversion of the Helmsley Carlton House, a brown-brick former hotel property at 680 Madison Avenue between 61st and 62nd streets. Gary Barnett’s Extell Development Company purchased the building, built in 1951, in 2010 from the estate of Leona Helmsley, for $170 million. The de-

www.TheRealDeal.com November 2012 51

New Development veloper is partnering with private equity firm Angelo, Gordon & Company on the 16-story project. The duo is now constructing a two-story addition to the property and expanding the footprint on the structure’s north and south sides. A new five-story

680 Madison Avenue, which Extell Development and Angelo, Gordon & Company are converting into 68 luxury residential units. Inset: Extell’s Gary Barnett.

“There’s a lot of anticipation for that project,” Rutter noted. “The location is just fantastic. My guess is that that [property] will see a different type of buyer [from the projects further north]. There will likely be a strong interest from international pied-à-terre buyers. I think they’ll do really, really well.” Gerringer noted that the building will likely be a co-op since it’s built on a ground lease, but that’s not likely to deter foreign buyers as Extell will probably work to make the bylaws liberal. “It will probably scare away some international buyers, but when you [buy in the building] first, you don’t have any board approvals or sponsor issues,” Gerringer said. “When you’re the first buyer from the sponsor, you don’t have to go through that. It’s when you go to sell it [that you run into these issues].” Pricing information was not available. Meanwhile, just up the street at 11 East 68th Street, HFZ Capital is planning to convert 41 residential rental units into condos. HFZ plans to update the mechanicals and completely renovate the public areas, according to a spokesperson for the company. Elliman will be handling sales and marketing. But it’s early in the pro-

“[A co-op at 680] will probably scare away some international buyers, but when you [buy in the building] first, you don’t have any board approvals or sponsor issues. When you’re the first buyer from the sponsor, you don’t have to go through that. It’s when you go to sell it [that you run into these issues].” Andrew Gerringer, the Marketing Directors townhouse will fill what is currently a 35-foot gap between the existing building and its 61st Street neighbor. (Part of the first floor of that 9,700-square-foot house will serve as the lobby for the main apartment building, while the remainder of the first floor will belong to the townhouse.) The building’s 32,000-square-foot retail space will be upgraded, and a full restoration of its exterior façade will be completed by 2013. (Beyer Blinder Belle Architects & Planners is spearheading the renovation work.) The property previously contained 157 hotel and residential units. When the renovation is done, it will reportedly have 68 luxury residential units. Extell did not respond to a request for comment, though Barnett previously said in a statement: “I think when it is completed, people will find Carlton House’s most iconic attributes preserved and its impact on Madison Avenue’s retail streetscape enhanced.”

52 November 2012 www.TheRealDeal.com

cess, and HFZ has not revealed any specifics about the building.

141 East 88th Street (Philip House) Number of units: 79 Prices: $1,900 per square foot prewar building at 141 East 88th Street has been transformed into 79 luxury condominiums by the Cheshire Group, the developer behind the conversion of the Devonshire House on East 10th Street, which serves as home to “30 Rock” actor Alec Baldwin. The 11-story Carnegie Hill property was originally constructed in 1927 by the Rhinelander Real Estate Company, one of the city’s earliest real estate dynasties, and is designed in Renaissance Revival style with classic brick and limestone. The residences all feature crown moldings, coffered ceilings and wood-burning fireplaces. The property includes a wide variety of units — with prices ranging from $850,000 for a one-bedroom to $8.5

million for a five-bedroom. A number of penthouses will come on the market next year when their floor plans have been finalized, according to Jenifer Steig, a partner at Cheshire. The building, which has already begun selling, is asking over $1,900 per square foot for the units currently on the market. “To me, that pricing is within reason [for the area],” Gerringer said. Stribling’s Rutter, whose team is marketing the project, said the developer expects to raise prices later in the process if things go well. While limited by the structure of the existing building, Cheshire reduced the number of

Downtown that would be considered a success across the board.” Steig said she and partner Susan Hewitt are cognizant of the fact that most of the building’s competition will be located more than 10 blocks south. The project’s lower price point reflects its slightly more out-of-the-way location, but is still relatively aggressive for the neighborhood, she said. Lenox Hill is still relatively “undiscovered” by foreign buyers, she said, but the project will benefit from its proximity to some of the city’s most exclusive private schools. Other Upper East Side developers said the project hadn’t yet cropped up on their radar.

150 East 72nd Street Number of units: 34 Prices: N/A uch attention has been paid to what CIM Group and developer Harry Macklowe are planning for the former Drake Hotel site at 440 Park Avenue. Indeed, in May, the real estate press was abuzz with news that the city Department of Buildings issued a permit for the construction of the new 84-story residential building, slated to be the city’s tallest at 1,400 feet. But another Macklowe project is brewing on the Upper East Side — at 150 East 72nd Street — and could start sales before the year is out. The 34-unit condo will be housed in a converted Renaissance Revival building, designed by the Mark Hotel architects Schwartz & Gross and developed in 1913 by Edgar A. Levy. Most of the residences will feature between

M The Cheshire Group is converting the Philip House at 141 East 88th Street into 79 luxury units. Inset: Stribling & Associates’ Steven Rutter, whose team is marketing the project.

apartments from more than 100 to 79. “Where we were able to combine apartments, we did,” said Rutter. “We would definitely have skewed more toward larger apartments [if we had the option], but I don’t think we would have done [only] four-bedrooms and five-bedrooms. When you have a building that size, it’s good to have somewhat of a mix.” Still, one industry pro said some of the layouts are problematic, citing one 1,647-square-foot apartment on the second floor, asking $2.99 million, with a master bedroom only slightly more than seven feet wide. “A master bedroom being 10 feet wide in a residence that you’re going to sell at this price is unacceptable to me,” said the source, who asked to remain anonymous. “I’ve never seen a seven-foot-wide bedroom in an apartment of this size. When you’re doing luxury, 12 feet wide is the minimal acceptable size for a master bedroom. You’re [almost] four feet short of what luxury would normally be.” The source added: “Some of this is not necessarily [the developer’s] fault, but some of it is. They could have done better.” Cheshire is working with interior designer Victoria Hagen and architect ARCT on the project. Both worked with the developer on the Devonshire. Rutter hopes that replicating the partnership uptown will spell success. “Devonshire House came on the market just post-Lehman, but it sold well,” he said. “It’s definitely one of those projects

150 East 72nd Street, which is being converted into 34 condo units. Inset: Developer Harry Macklowe.

three and five bedrooms, according to the project’s website. Macklowe Properties acquired the building in July 2011 for $70 million. Floor plans and pricing were not available at press time. TRD

www.TheRealDeal.com January 2011 25III PHOTOGRAPH OF ORIN WILF FOR THE REAL DEAL BY PJ SPANIOL

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Hotels

Who rules in hospitality?

Ranking the biggest Manhattan hotel owners and their highest-profile properties

By C. J. Hughes otel owners may award 2012 five stars. That’s because in the last year, Manhattan’s hospitality market has posted huge gains as tourists continued to flood the city and occupancy levels soared. Yes, there’s a sense that the market has been here before: 2010 enjoyed similar growth on the hotel investment front before the calendar turned and the momentum petered out, largely because prices began to climb. Yet Manhattan rooms now average $275 a night and are projected to eclipse $280 a night by year’s end, which would be the highest they’ve been since 2008, when they averaged $310 a night, according to a recent study from the CBRE Group. Indeed, by many measures, 2012 is shaping up to be the best year for the local hotel business since the Great Recession. This month, The Real Deal surveyed the Manhattan hotel landscape to determine who owns the most hotel rooms south of 96th Street — and is therefore benefiting from the current hotel boom. The Maryland-based Host Hotels & Resorts came out on top, with the most hotel rooms on its balance sheet — in order, the Blackstone Group, Hersha Hospitality Trust, Hyatt Hotels Corp. and Pebblebrook Hotel Trust rounded out the top five. (See chart for the top 15.) Host owns and operates 5,967 rooms at six properties south of 96th Street, including its 1,957-room Times Square hotel, the New York Marriott Marquis. Host is revamping that hotel; this summer the company struck a $140 million deal with Vornado to convert the Marriott’s below-grade parking garage into shops, according to Host’s third-quarter report. And that’s not the only property Host is investing in. The company also spent $80 million to renovate the former New York Helmsley Hotel at 212 East 42nd Street, which it bought in 2011. That top-tobottom makeover included all 774 rooms and also added a new bar and restaurant to the property, which was rebranded as the Westin New York Grand Central. Taking advantage of an improved lending market for hotels, Host (a publicly traded real estate investment trust, or REIT) also issued $1.5 billion in debt to help pay down existing loans, the company said in a statement. “We had a great year on the refinancing side,” said W. Edward Walter,

54 November 2012 www.TheRealDeal.com

Host’s chief executive, in an earnings call last month. He added, “We’re feeling pretty good about how New York should play out next year for us.” Driving the improved industry fundamentals is, quite simply, the influx of more

sitive than the corporate side” and isn’t willing to shell out as much money to spend the night. Still, unlike with previous false starts, such as in 2010, he said, “I don’t think it’s déjà vu all over again. It’s been a very good year.”

367-room Pod 39, which opened last summer at 145 East 39th Street. A predecessor, Pod 51, with 360 rooms, opened in 2007. Analysts say in addition to tourists, those hotels appeal to a rarely tapped Roosevelt Hotel

tourists. According to city tourism figures, 51.5 million people will have visited New York in 2012, versus 50.9 million in 2011 and 48.7 million in 2010. Enhanced tourism dollars have largely offset the continued slack in demand from corporate travelers, said Edward Eschmann, director of the hospitality group at CBRE in New York. He noted, though, that “the tourism side is a little more price-sen-

Tourist trap Targeting tourists, it seems, is BD Hotels, whose “pod”-style properties — which were a hit overseas before debuting in New York a few years ago — have tiny, inexpensive rooms. Founded by Richard Born and Ira Drukier, BD Hotels ranked No. 11 on TRD’s list with 1,336 rooms across seven properties. Among the company’s pod hotels are the

market of business travelers “who need a place to sleep because their flight got canceled, so a room for one night only,” said Bjorn Hanson, dean of the Tisch Center for Hospitality, Tourism and Sports Management at New York University. In addition to those pods, BD also owns the famed Maritime Hotel, Jane Hotel in the West Village and the Merwww.TheRealDeal.com January 2011 25

Hotels New York Marriott Marquis

A look at what the biggest Manhattan hoteliers own Owner Name

Biggest NYC hotels

Host Hotels & Resorts, Inc.

Sheraton New York Hotel & Towers (1,780 rooms)

Total # of rooms

New York Marriott Marquis (1,957 rooms)

5,967

The New York Helmsley Hotel (774 rooms) Hilton New York (1,981 rooms)

The Blackstone Group

3,955

Waldorf Astoria New York (1,413 rooms) The London NYC (561 rooms) Holiday Inn Express NYC Madison Square Garden (228 rooms)

Hersha Hospitality Trust

Holiday Inn Express New York City Times Square (210 rooms)

1,762

Candlewood Suites New York City Times Square (188 rooms) Grand Hyatt New York (1,305 rooms)

Hyatt Hotels Corporation

1,742

Andaz Wall Street (253 rooms) Andaz Fifth Avenue (184 rooms) Affinia Manhattan (618 rooms)

Pebblebrook Hotel Trust

1,733

Affinia Shelburne (325 rooms) Affinia Dumont (242 rooms)

Vornado Realty Trust*

1,705

Hotel Pennsylvania (1,705 rooms) DoubleTree New York City Metropolitan Hotel (764 rooms)

RLJ Lodging Trust Mark Hoplamazian

1,568

Hilton Garden Inn, 35th Street (298 rooms) Hilton New York Fashion District (280 rooms) Element New York Times Square West (411 rooms)

Magna Hospitality Group

DoubleTree New York City Financial District (399 rooms)

1,551

Sheraton Hotel Tribeca New York (369 rooms)

Tishman Hotel & Realty*

Westin New York at Times Square (863 rooms)

1,470

InterContinental New York Times Square (607 rooms) Radisson Lexington Hotel New York (712 rooms)

DiamondRock Hospitality Company Ira Drukier

Courtyard New York Manhattan/Midtown East (312 rooms)

1,378

Courtyard New York Manhattan/Fifth Avenue (185 rooms) The Pod 39 Hotel (367 rooms)

BD Hotels

1,336

The Pod 51 Hotel (360 rooms) Jane Hotel (186 rooms) Park Central (934 rooms)

LaSalle Hotel Properties

1,254

The Roger Williams (194 rooms) Gild Hall (126 rooms)

Morgans Hotel Group Co.* Government of Pakistan*

Hudson Hotel (866 rooms)

1,129

Mondrian Soho (263 rooms)

1,015

Roosevelt Hotel (1,015 rooms) Hilton Garden Inn New York Times Square (369 rooms)

Highgate Hotels

Hampton Inn Manhattan Times Square North (300 rooms)

967

Hilton Garden Inn New York/West 35th Street (298 rooms)

Steven Roth

cer Hotel in Soho, among others. Hanson said the relatively inexpensive pod hotels — room rates there start at $195 a night for a weekend night — can put downward pressure on room prices, to the chagrin of owners of luxury properties. He noted that promotional rates, plus the burgeoning crop of mid-market “select service” chain hotels, also push rates down.

Source: TRD research, industry sources. Only hotels south of 96th Street in Manhattan were included. Where the ownership stake in a project was clearly a minority interest, the project was not included. *Owners have fewer than three hotels in NYC. Research by Lisa Dunn.

Further cutting into profit margins in New York, analysts added, are powerful labor unions: The contracts they secure for their members often require hotel owners to pay housekeepers whether or not they actually have rooms to clean, for example. As a result, owners often rent rooms at any cost, just to fill them and have some income, they explain. “Some hotels would rather collect

$100 than zero just to cover costs,” said Ray Martz, chief financial officer of Pebblebrook, the Maryland-based REIT that ranked No. 5 on TRD’s list. Still, for hotel owners, the all-important revenue-per-room figure, or RevPAR — the rate that determines how much money they make — is actually climbing. It averaged $216 per room in the first half of 2012 versus $202 in the same period in

2011 — a jump of 7 percent. That rate is also inching closer to its recent apex, about $250, in 2008, the data showed. In addition, Manhattan’s occupancy rate is hovering around 85 percent, which is close to where it was four years ago, in flusher times, according to CBRE’s data. Continued on page 113

www.TheRealDeal.net November 2012 55

Hotels

Inn-coming at Hudson Yards

The Far West Side looks like the next frontier for hotel development, with more than a half-dozen projects being planned in the area

By C. J. Hughes uch attention has been paid to the new office towers planned for the Hudson Yards redevelopment on Manhattan’s Far West Side. But the area, which is still largely industrial, may also soon be dotted with new hotels, too. In the blocks closest to the actual rail yards — namely, along 10th and 11th avenues in the West 30s — hotels are being planned or considered at more than a half-dozen sites, though the dealmaking is taking place under the radar, according to brokers, developers and city officials. Hotels have been popping up in a 60-block area that was rezoned in 2005 for some time. Indeed, about 3,000 rooms have been added to the swath — which stretches from Eighth to 12th avenues and from West 30th to West 42nd streets. But they’ve mostly been relegated to the area’s edges, like near the Port Authority Bus Terminal, and they are generally marketed to Times Square tourists. In contrast, the newest crop of hotels being considered would be clustered close to the rail yards, where there are currently very few places to get a room for the night. And, they would focus on a new market: the expected surge of workers, tourists and business travelers, according to analysts, who called the area Manhattan’s next hot hotel market. “That whole corridor’s about to see a tremendous amount of growth,” said Jeffrey Davis, managing director of the hotel group at commercial firm Jones Lang LaSalle. One big factor driving the trend for new hotels is that the zoning is largely commercial, meaning developers can’t put up as many apartment buildings as they can in other parts of the city. Indeed, many lots restrict the amount of housing that can be built to around 30 percent of construction, with the rest reserved for commercial development. Thus, if developers want to make money off their land, they may be compelled to build hotels, brokers say. Hank Sopher, a parking garage owner, has been marketing a parcel (now home to a parking lot) at the southeast corner of West 38th Street and 11th Avenue as a possible hotel site, brokers said. A message left with Quik Park, one of Sopher’s companies, was not returned. Also, Edward Imperatore, whose family

56 November 2012 www.TheRealDeal.com

Manhattan’s Far West Side is poised to see a new wave of hotel development. Insets, from top: Ryan Nelson of Sherwood Equities, which is planning a 700,000-square-foot hotel at 360 10th Avenue, and Justin Elghanayan of Rockrose Development, which is considering a hotel at one of its West Side sites.

cent lots at 541–545 West 37th and 540–544 West 38th streets — can support about 370,000 square feet of development, twothirds of which could be a hotel, or up to 1,000 rooms, said Bob Knakal, chairman of Massey Knakal Realty Services. He represented the seller, Fortress Credit, in the deal. Attempts to reach Chetrit were unsuccessful. But the company’s hotel division, King & Grove Hotels, has been actively acquiring hotels recently. In 2011, it spent $77.8 million on the Chelsea Hotel, which is currently in the midst of a major renovation.

Lure for hotels

Architect David Childs (pictured bottom-right) is designing a tower at Related’s Hudson Yards that will include a 200-room hotel. The two-pronged tower is pictured in the center of the rendering.

If developers want to make money off their land, they may be compelled to build hotels, brokers say. owns NY Waterway, has hired CBRE Group broker Darcy Stacom to explore the sale of an L-shaped lot on West 36th Street, just off 11th Avenue, according to Crain’s. A spokesperson for Imperatore did not return a request for comment. But sources said the site was being marketed as a hotel.

Hotel-condo hybrids are also an option. According to a broker close to the deal, that’s what the Chetrit Group is planning for a T-shaped, block-through site on West 37th Street that it purchased this summer for $26.5 million. The parcel — which includes four adja-

While much of the expected office construction in the area is not expected to be complete until after the newest stop on the No. 7 Subway line is extended into the area in 2014, hotels are a different story. Sources say there is not as much concern about competition flooding the market. “Hotels are better in the short-term,” Knakal said. While it will take time to plan and build these hotels, they are still likely to be built before other projects, he said. Others point out that the decade-old Best Western Convention Center Hotel, adjacent to the Chetrit site at 522 West 38th Street and one of the only existing hotels in the immediate neighborhood, frequently sells out its 83 rooms. (A queen-size room there costs about $350 a weekend night.) A condo-hotel will also rise at the largest development site: the 26-acre parcel over the rail yards itself, where the Related Companies and Oxford Properties are slated to construct more than a dozen towers, or almost 13 million square feet. To be located at West 33rd Street and 11th Avenue, the tower is being designed by One World Trade Center architect David Childs and is scheduled to be completed by 2017. It will include a 200-room hotel along with office and retail, according to a source at Related. One major lure for hotel developers is the Hudson Park and Boulevard, a fouracre mix of streets and parks planned for a strip that runs from West 33rd to West 42nd streets, between 10th and 11th avenues, in a mid-block location. Hotel developers, who often shy away from mid-block sites because they don’t offer high enough visibility, will like the additional new corner lots created by the boulevard, brokers and landlords say. The boulevard’s first section, between West 33rd and West 36th streets, is scheduled to be done by 2013. Continued on page 108

www.TheRealDeal.com January 2011 25

PHOTOGRAPH OF ELGHANAYAN FOR THE REAL DEAL BY DEREK ZAHEDI; PHOTOGRAPH OF CHILDS BY MARC SCRIVO

Russian BuyeRs

Anything but roulette

An inside look at how Russian billionaires wheel and deal for NYC real estate

By AdAm Piore lizabeth Lee Sample has brokered $1.5 billion worth of real estate in her career. But it wasn’t until she began working with high-end Russian buyers several years ago that she found herself leaving the Four Seasons Hotel on East 57th Street one Sunday with a check for $2.5 million burning a hole in her pocket. “We had shown a couple a penthouse at the Ritz-Carlton,” she recalled. “They really liked the apartment, but they were leaving right away for California. So they left the check for us in the lobby for the escrow deposit.” Welcome to the world of the superrich Russian condo buyer, a rarified and redhot segment of the New York real estate market. It’s a world with private planes, cars that cost as much as some houses and entourages of bodyguards, assistants and traveling maids. But perhaps its most notable component is its emphasis on discretion and secrecy — qualities so valued that co-ops are virtually out of the question. “Normally with buyers in New York, you need to know up front what’s in their bank, in terms of liquid cash, but I would never dream of asking that question,” said Dominique Punnett, a half-Russian broker at Stribling & Associates, of a Russian client who is looking for an ultra-highend apartment. The buyer has made it clear to Punnett, without explicitly saying so, that “price is not an issue.” “They come from a very different culture, and you have to understand that,” said Victoria Shtainer, a Russian-born broker with Prudential Douglas Elliman, who began meeting Russian clients through family and friends back in 2004 and has sold them properties at many of the city’s most expensive addresses, including 15 Central Park West and the Time Warner Center. Russia, she pointed out, is “not the land of opportunity — it’s cutthroat.” Those who made it to the top and come here to spend the spoils, she added, expect VIP service, don’t suffer fools and “are always on the defensive.” “They don’t talk about who and what they are,” Shtainer said. “You have to win their trust. You find that information out later rather than sooner.”

Portraits of wealth Perhaps the most notorious Russian buyer in New York in recent years has been Andrei Vavilov, a former deputy finance

58 November 2012 www.TheRealDeal.com

minister and hedge-fund magnate. Vavilov generated worldwide headlines when he sued Plaza Hotel developer Elad Properties in 2008, complaining that two penthouses he’d committed to buy for a cool $53.5 million (and planned to combine) had been ruined by

and other reforms and survived a James Bond–like assassination attempt in 1996, when someone blew up his car in a Kremlin parking lot, according to the New York Times. (Vavilov was not in it at the time.) He later joined the board of the Russian energy firm Gazprom as a financial

Vavilov, of course, is just one of the many Russian billionaires to buy a lavish New York apartment in the last few years. And that number is only likely to grow. The number of Russians on the Forbes list of the world’s billionaires has gone from zero in 2000 to 96 this year. And

“Honestly, there is no vodka. Surprisingly, a lot of them don’t drink at all. These guys and women did not get this money by drinking all night.” ElizabEth SamplE, SothEby’S intErnational rEalty ugly architectural features including narrow windows that “make the space more closely resemble an attic than a luxury penthouse living room,” according to the lawsuit. Vavilov, who sports wire-rimmed glasses and a salt-and-pepper buzz-cut, illustrates both the spoils in play in modern Russia and the danger one can face in attempting to grab them. He rose to be deputy finance minister under former President Boris Yeltsin in 1992, helped push through privatizations

counselor, bought a controlling stake in a smaller oil company with a $25 million loan and sold the company just four years later for $600 million in cash, according to the newspaper. But he was dogged by suspicions that he was involved in insider deals and, in the late 1990s, Russian federal prosecutors investigated whether he embezzled $231 million during the sale of MiG fighter jets to India. He denied the accusations, and the case was closed in 2008 after the 10-year statute of limitations expired.

every year, new arrivals seem to one-up each other when it comes to buying real estate here. One of the highest-profile deals involving a Russian billionaire is, of course, the $88 million pad that Dmitry Rybolovlev bought for his 22-year-old daughter, Ekaterina, at 15 Central Park West. The purchase of the apartment, which was owned by former Citigroup chairman Sandy Weill, was the highest closed sales price ever for a Manhattan apartment.

ILLUSTRATION FOR THE REAL DEAL BY PETER www.TheRealDeal.com January 2011 BONO 25

Russian Buyers The purchase came four years after Rybolovlev broke another record, when he shelled out about $100 million for Donald Trump’s 69,000-square-foot Palm Beach estate. Both of those properties are now at the center of his divorce. Rybolovlev’s estranged wife, Elena, sued in Manhattan and Florida, alleging that Rybolovlev used trusts linked to their children to shield his assets from her. Rybolovlev — who’s worth an estimated $8 billion — was one of Russia’s early stockbrokers. He bought shares in stateowned enterprises, founded a bank and made his fortune investing in potash fertilizer during the privatization of those state-owned enterprises. Like Vavilov, his past is replete with innuendo and spy-novel–type details. He is said to wear a bulletproof vest, has an art collection worth more than $500 million with works by Monet and Picasso, and owns homes in Dubai, Monaco, Paris and Geneva. According to the New York Times, Rybolovlev has not set foot in either the Florida or New York property since purchasing them. Meanwhile, in 2011, Russian impresario Igor Krutoy and his wife, Olga, paid a then-record $48 million for a 6,000-square-foot condo at the Plaza. A composer who owns record labels, music TV stations and produces Russia’s American Idol–esque “Star Factory,” Krutoy is an entertainment icon across the former Soviet Union with a net worth Forbes estimates at upwards of $13 billion. A few months after breaking the record at the Plaza, he shelled out another $23.85 million for a mansion on tony Gin Lane in Southampton. He reportedly told his brokers he planned to demolish it and build a new one. Then there’s Russian It girl Anna Anisimova — daughter of metal magnate Vasily Anisimov. She purchased a 3,900-squarefoot penthouse at Time Warner Center in 2004 for $9.86 million, soon after enrolling in NYU and diving into the New York social scene, where she earned the sobriquet, the “Russian Paris Hilton.” Anisimova, now in her late 20s, listed the penthouse in April for $50 million. Just months after buying her penthouse, Anisimova, a former teen model, rented socialite Denise Rich’s Southampton mansion for $550,000 (then the most ever paid for a Hamptons summer rental), and announced plans to host a 700-person charity bash promoted by celebrity PR guru Lizzie Grubman. Now married to film producer Peter Schafer, Anisimova is selling the penthouse because she wants to pursue an acting career in Hollywood. Other Russian buyers in recent years reportedly include billionaire Len Blavatnik, an oil, gas and metals magnate, who paid Edgar Bronfman, the heir to the Seagram Company, $50 million for his 64th Street townhouse in 2007. That deal came

28 March 2012 www.TheRealDeal.com

Russian billionaires and some of the NYC apartments they’ve scooped up in recent years Name

Made fortune in

Property purchased

Year

Price

Dmitry Rybolovlev

Fertilizer

15 Central Park West (apartment)

2012

$88 million

Len Blavatnik

Oil, gas, metals

15 East 64th Street (townhouse)

2007

$50 million

Igor Krutoy

Entertainment

Plaza Hotel (apartment)

2011

$48 million

Andrei Vavilov

Hedge funds

Time Warner Center (apartment)

2009

$37.5 million

Bolat Nazarbayev

Oil

Plaza Hotel (apartment)

2008

$20 million

Oleg Baibakov

Construction

Time Warner Center (apartment)

2007

Heiress

Time Warner Center (apartment)

2004

Anna Anisimova Source: News reports.

$13.5 million (listed in May for $25 million)

$9.86 million (listed in April for $50 million)

Russian entertainment mogul Igor Krutoy

Nets owner Mikhail Prokhorov

Russian It girl Anna Anisimova, daughter of metal magnate Vasily Anisimov, and her Time Warner apartment, which originally listed for $50 million in April

From left: Dmitry Rybolovlev; the $88 million apartment at 15 CPW Rybolovlev bought for his daughter; the townhouse at 15 East 64th Street that Len Blavatnik purchased in 2007 for $50 million from Seagram Company heir Edgar Bronfman.

just a couple of years after Blavatnik paid $31.25 million for another townhouse nearby, and a couple of months after he purchased a Fifth Avenue apartment for $27.5 million. Then there’s Oleg Baibakov, president of a Moscow construction management and consulting firm, who purchased a $13.5 million Time Warner Center condo. There are also scores of other high-pro-

file buyers from the former Soviet Union, such as oil magnate Bolat Nazarbayev, brother to the longtime Kazakhstan President, who owns a $20 million Plaza condo. Even Boris Berezovsky, exiled oligarch and Vladimir Putin foe, reportedly owns a $3.2 million Central Park West condo he purchased in 2001. But perhaps the most well-known Russian oligarch in New York owns a

different sort of property — the Brooklyn Nets. Mikhail Prokhorov, who made his fortune in precious metals, shelled out $200 million for the team in 2009 and owns 45 percent of the Barclays Center.

Wining and dining Working with this cast of characters brings serious financial rewards. Sample Continued on page 114

www.TheRealDeal.com November 2012 59

The mansions of South Brooklyn

The borough’s priciest homes — outside the brownstone belt

By Tracey Samuelson o most New Yorkers, luxury Brooklyn real estate means gracious four-story brownstones in Brooklyn Heights or sleek new-construction condos in Williamsburg. But some of the borough’s priciest real estate is actually much farther south, in communities often overlooked by outsiders, including Gravesend, Bay Ridge and Brighton Beach. In fact, some of the most expensive properties ever sold in Brooklyn are located in its southern neighborhoods, where high-end real estate often boasts water views, inground pools and plenty of square footage. Brooklyn’s current record holder is a townhouse at 212 Columbia Heights in Brooklyn Heights, which sold for $11 million earlier this year, according to the real estate data provider PropertyShark. But before that, an 8,200-squarefoot brick mansion at 2111 East Second Street in Gravesend held the record for Brooklyn’s priciest-ever transaction, selling for $10.26 million in 2009. The priciest sale in Brooklyn in 2011 was also in the southern half of the borough — a single-family house at 451 Avenue S in Gravesend sold for $10.25 million. The strength of South Brooklyn’s real estate market is due in part to the tight-knit communities that live there, brokers said. Over the years, for example, Gravesend has attracted a small but significant population of Sephardic Jews primarily from Syria, Lebanon and Egypt. Brighton Beach, of course, is known for its preponderance of Russian immigrants. Many wealthy members of these communities choose to remain in South Brooklyn rather than decamping for more fashionable areas of the city, sources say. Buyers of South Brooklyn luxury properties “could afford to be anywhere, but they consciously pick to be there” because of their ties to the area, explained Sheepshead Bay native Victoria Shtainer, an executive vice president with Prudential Douglas Elliman. “There are a lot of people in the neighborhood who do want to stay,” said Kyle Talbot, a vice president at the Corcoran Group, referring to Midwood, where he’s currently listing a $3.42 million house. “[They are] people who have lived there for generations.” International buyers, especially those from Russia, are increasingly interested in South Brooklyn properties as well, brokers noted. All of these factors have helped buoy the median price of a single-family house in South Brooklyn to $1.36 million in the second quarter of 2012, according to data compiled by Corcoran. But it’s sometimes hard for outsiders to get a handle on the South Brooklyn market, brokers said, because many properties change hands privately, without officially hitting the market. This month, TRD looked at some of the priciest homes currently for sale in South Brooklyn.

8220 Narrows Avenue (the Gingerbread House): Bay Ridge

ay Ridge is known for its views of New York Bay, which once led wealthy Manhattanites to build extravagant summer houses there. Many of these grand homes still stand, though the neighborhood — a little over an hour from Manhattan by subway — is now known as a middle-class enclave of commuters. Designed by J. Sarsfield Kennedy and known as the 60 November 2012 www.TheRealDeal.com

The “Gingerbread House” at 8220 Narrows Avenue in Bay Ridge is listed for $11 million.

2134 Ocean Parkway in Gravesend is currently listed for $10.75 million.

Some of the most expensive properties ever sold in Brooklyn are located in its southern neighborhoods, where high-end real estate often boasts water views and in-ground pools. Gingerbread House, this famed Arts and Crafts–style home was completed around 1917. It’s over 5,700 square feet and its shingled roof is meant to look like storybook-style thatch. The home first hit the market in 2009 with Bill Radtke and Peter Noonan of Brown Harris Stevens, who listed it for $12 million. Now listed for $11 million by broker Harry Chalbis of Bay Ridge–based Alpine Realty, the home appears to be the priciest house on the market in South Brooklyn. Chalbis could not be reached for comment. The home has six bedrooms, including a master with two balconies. There are also stained glass windows and a hand-painted coffered ceiling in the dining room.

2134 Ocean Parkway: Gravesend

nother one of the most expensive homes currently for sale is a single-family house at 2134 Ocean Parkway in Gravesend. The seven-bedroom home is currently asking $10.75 million, down from its initial $14 million price tag. Listing agent Ryan Serhant, an executive vice president at Nest Seekers International, said it’s unusual to see such a pricey listing actually hit the market. “It’s the first time in recent memory where a house this size [has] come to market in this neighborhood,” Serhant said. “Typically, this area trades very quietly between friends and neighbors.” Continued on page 108

www.TheRealDeal.com March 2012 00

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Development

vs.

Community Groups

NYC’s NIMBY posse

A roundup of the city’s most influential neighborhood organizations fighting developers

By Leigh Kamping-Carder ew Yorkers are nothing if not opinionated — especially when it comes to their own backyards. Hundreds, if not thousands of New York City block associations, community groups and single-issue nonprofits exist to shape the streetscape and the skyline. While these groups are sometimes derisively called NIMBYs (short for Not In My Backyard), some have pushed to protect whole swaths of the city, successfully curtailing development projects and swaying public opinion. This month, The Real Deal rounded up some of the most active and influential neighborhood groups, examining their recent victories and their future plans. The activity of these groups tends to surface in areas where development is concentrated, with real estate hot spots like Manhattan’s West Side or Brooklyn’s Atlantic Yards spurring vociferous advocacy and quieter neighborhoods like the Upper East Side seeing fewer protests, sources said. (Of course, neighborhood additions like a waste transfer station on East 91st Street or a homeless shelter on West 95th Street are bound to inspire classic NIMBYism.) “The most confrontational situations are going to be in neighborhoods that are undergoing either the most development or the biggest threat from undesirable facilities,” said Ken Fisher, a land-use attorney with the law firm Cozen O’Connor. Additionally, some projects that were previously lightning rods for protest, such as Hudson Yards, are far enough along now that community opposition is relatively subdued, sources said. More generally, the slowdown in development since the 2008 market crash has

reduced the activity of community groups, sources said. “The economy has been doing poorly, so development has been sparse, which could explain the recent lack of NIMBY activity,” said Nikolai Fedak, founder of development and architecture blog New York YIMBY, which stands for “Yes In My Backyard.” “Bloomberg’s pro-growth stance has also blunted NIMBY power,” Fedak said. The most active YIMBY advocacy has come from groups that push for development-friendly amenities, such as parks, with the most notable example being the Friends of the High Line’s push for the elevated park in West Chelsea, experts said. Additionally, business improvement districts have taken on some of the traditional roles of community nonprofits in commercial neighborhoods — like the Financial District and Downtown Brooklyn — where new residents are putting down roots, Fisher said. These nonprofits, which are funded through assessments on property owners, are trying to enlist newcomers as a pro-development constituency, arguing that density will lead to better retail options and higher property values, he said. At the same time, many community groups are preparing for an eventful last year of Mayor Michael Bloomberg’s term, as developers push for city approvals from this pro-development administration, sources said. “No doubt we will be kept very busy,” said Andrew Berman, executive director of the Greenwich Village Society for Historic Preservation, a forceful voice in the approval process for numerous neighborhood developments. “There may well be things that come up in the next few months that we had no idea of and did not anticipate, but we’re always at the ready.”

The NIMBYs Greenwich Village Society for Historic Preservation

Headquarters: East Village Staff: Six full-time Annual budget: $700,000 Founded: 1980

ince 1980, the Greenwich Village Society for Historic Preservation has operated as an outspoken defender of the East and West Village. In the last year, however, the group has taken unprecedented steps to advance its mission. In July, executive director Andrew Berman, already a familiar face at public hearings, registered as a lobbyist with the city along with five of his colleagues, as TRD reported. And in late September, the group filed its first lawsuit, seeking to overturn city and state approvals for New York University’s 1.9 million-square-foot expansion. “We’ve never sued over anything before, but this, we felt, was just so egregious and so important to the future of our neighborhood that we felt it was essential,” Berman said. The organization (along with a host of faculty members, residents and other community groups) has hired bulldog law firm Gibson, Dunn & Crutcher to litigate their case. Although the NYU expansion is proceeding (with some size limitations), the Greenwich Village Society achieved a longtime goal last month when a chunk of the

62 November 2012 www.TheRealDeal.com

From left: Andrew Berman of the Greenwich Village Society for Historic Preservation speaking at a rally protesting NYU’s expansion, Develop Don’t Destroy’s Daniel Goldstein and Simeon Bankoff, head of the Historic Districts Council.

“There may well be things that come up in the next few months [before the mayor leaves office] that we had no idea of and did not anticipate, but we’re always at the ready.” Andrew Berman, Greenwich Village Society for Historic Preservation East Village became a Historic District. The measure will protect 330 buildings, or about 10 times as many as before, Berman said. The group is also pushing to establish a Historic District in an area south of Washington Square Park known as the South Village. The proposal comes as the city is considering rezoning the 20-block area nearby known as Hudson Square. The rezoning, advanced by Hudson Square landlord Trinity Real Estate, would allow for ground-up residential development and 320-foot tall

buildings on the avenues, with the aim of creating a 24-hour mixed-use neighborhood. The Greenwich Village Society is fighting to cap the building heights at 210 feet — a modification supported by the community board — and to landmark a swath of the South Village as a component of the rezoning. “We don’t want to see a whole bunch of very, very tall towers erected in that area,” Berman said. “We think it would really contradict the character of that neighborhood.”

Develop Don’t Destroy Brooklyn Headquarters: Atlantic Yards area Staff: none Annual budget: minimal Founded: 2004

n late September, the Barclays Center at Atlantic Yards opened to much fanfare. But Develop Don’t Destroy Brooklyn and other groups wanted to hammer home a message: Developer Forest City Ratner promised jobs and housing along with the basketball.

www.TheRealDeal.com January 2011 25

Development Develop Don’t Destroy is considered the most visible opponent of the massive project, but cofounder Daniel Goldstein explained that, with the first phase of the development complete, the nonprofit is shifting its focus. “We’re more interested in the longterm macro issues of what’s going to happen with this site,” said Goldstein, who advises other Brooklyn nonprofits and is working on a memoir about Atlantic Yards, but declined to discuss his day job. Develop Don’t Destroy formed just a few months after Forest City Ratner formally announced its development plans in December 2003. After several homeowners, including Goldstein, realized that the site of the future stadium overlapped with their homes, they formed a nonprofit and hired civil rights attorney Norman Siegel to block the use of eminent domain. Though the group failed at that effort — Goldstein was evicted in 2010 and received $3 million in compensation — it racked up some impressive victories, including pressuring the Metropolitan Transportation Authority, which owned the 22-acre site, to request alternative proposals for the land in 2005. Feeling that the MTA had not sufficiently marketed the request for proposals, Develop Don’t Destroy sent it to dozens of developers, eventually securing a rival $150 million bid from Extell Development Company. That forced Forest City Ratner

vs.

2009, the group raised about $162,000, according to figures from nonprofit data provider GuideStar.) Moreover, the group is now focusing on a “political effort” that, in part, hinges on the environmental review. Since the review requires studying alternatives to Forest City Ratner’s plan, and since the company has not closed on all of the land at Atlantic Yards, Develop Don’t Destroy is hoping to persuade state officials to renegotiate their development agreement with the company. The goal is to have the state issue RFPs for the remainder of the site and to have multiple developers finish Atlantic Yards. “The struggle over the rest of the site, and what happens there, is really the longterm, ongoing struggle that our group … and other groups are going to have to deal with for a very long time,” Goldstein said.

Historic Districts Council Headquarters: East Village Staff: five full-time, one part-time Annual budget: $450,000 Founded: 1971 (became an independent group in 1986)

he Historic Districts Council is the only group in the city that reviews every public proposal affecting landmarked properties — from the landlord who wants to install an air-conditioning system to the proposed rezoning of Midtown East.

Community Groups committee began reviewing legislation that would revamp the way the LPC operates. The package of bills would impose deadlines on when the LPC must respond to requests for evaluation (within 180 days) and rule on historic designations (within 33 months), as well as require the City Planning Commission to weigh in on how a landmark designation would affect a property’s development potential, among other things. The Real Estate Board of New York has come out in support of those measures. But Bankoff argued that the new policies would overwhelm the LPC’s resources. (Additional funding is not part of the legislation.) Moreover, the strict time line could scuttle historic designations that take too long to approve, even if they have merit, he said. The city council has not yet scheduled a vote on the bills. Additionally, the HDC is closely monitoring the proposed rezoning of Midtown East, unveiled in July, which would allow developers to build taller office towers in a 74-block area. In exchange, builders would have to contribute to a fund earmarked for neighborhood improvements. The HDC hopes to submit a list of buildings within the zone that it believes deserve landmark protections. “We hope to preserve some of the lower-rise buildings of significance — architectural and cultural significance,” Bankoff said.

The Soho Journal, a semiannual magazine and website, recently called Sean Sweeney, the group’s director, one of the people “who candidates must see if they wish to gain traction with Downtown voters.” The Alliance’s political arm, the Downtown Independent Democrats, has been closely involved in local politics since the 1970s. In the coming months, Sweeney and other DID members will meet with about 20 city candidates to determine who to endorse. The group also puts out a “very serious” voter’s guide, Sweeney said. But the organization’s biggest current fight is combating the creation of a Soho business improvement district along Broadway from Canal to Houston streets. The Soho Alliance has said the BID will increase costs for local businesses and add traffic to already congested streets and sidewalks. “Soho doesn’t need a business improvement district,” Sweeney added. “It needs a resident improvement district.” The City Planning Commission recommended approval of the BID this past January, but the Soho Alliance’s campaign has helped convince state senator Daniel Squadron and Assembly member Deborah Glick to oppose it. The city council was scheduled to hold a public hearing on the issue on Oct. 31.

From left: Sean Sweeney, head of the Soho Alliance; West End Preservation Society founder Richard Emery; Joshua David and Robert Hammond, co-founders of Friends of the High Line; and Elizabeth Berger, president of the Alliance for Downtown New York.

to double its bid to $100 million. The group also filed six lawsuits, challenging the use of eminent domain, the soundness of the environmental review and a renegotiated agreement between Forest City Ratner and the MTA. Though the group met with mixed success in the courts, an appeals court ruled this past June that the developer and the state must conduct an environmental impact study, since the project is now estimated to take 25 years instead of 10. (Forest City Ratner appealed the decision, but New York State’s highest court declined to hear the appeal.) Today, the group is a streamlined operation: The all-volunteer staff of about four or five is no longer working full-time on the issue, and they have not raised funds in about a year, Goldstein said. (In fiscal year

28 March 2012 www.TheRealDeal.com

All told, that’s about 400 to 500 projects reviewed annually, said Simeon Bankoff, the nonprofit’s executive director, estimating that the organization testifies in about 30 percent of them. Additionally, the HDC acts as a watchdog for the New York City Landmarks Preservation Commission, monitoring how it writes and enforces regulations. Although the organization’s clout with the LPC is difficult to measure, the group is considered an active advocate for preservation throughout the five boroughs. “I’d say that we have a batting average in the mid-to-high 200s,” Bankoff said. “Our comments often find some purchase and are seldom completely ignored, but other than that, it’s hard to specifically quantify.” The group’s mission came to the forefront in May, when the city council’s land-use

Soho Alliance

Headquarters: Soho Staff: one full-time Annual budget: $10,000 Founded: 1994

he Soho Alliance generated headlines with its fight against Trump Soho, the 46-story condominium hotel tower developed by the Trump Organization, the Bayrock Group and the Sapir Organization. In 2008, however, a state court rejected the group’s attempt to revoke the project’s building permit. But the Soho Alliance has continued to wield its influence in the community, whether by convincing the Landmarks Commission to shrink developer Jared Kushner’s proposed penthouse atop the Puck Building at 295 Lafayette Street or throwing support behind political candidates.

West End Preservation Society Headquarters: Upper West Side Staff: three part-time volunteers Annual budget: less than $5,000 Founded: 2007

he West End Preservation Society was founded in 2007 with the narrow goal of protecting West End Avenue from creeping development. Since then, the group has had some remarkable success. In 2009, the Society proposed expanding the existing Historic District on West End Avenue to an area reaching from West 70th to West 107th streets. Last month, the city council unanimously approved the first phase of the plan, known as the Riverside–West End Historic Continued on page 109

www.TheRealDeal.com November 2012 63

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Architecture Review

Ja m e s G a r d n e r

The New School needs new design

With brass plates and irregular curtain walls, the New School’s student center will blight the surrounding neighborhood

olumbia’s Manhattanville ex- ture is clad mostly in brass plates, which pansion. NYU’s superblock look distinctly odd, as though they were redevelopment. Cornell’s new trying to simulate the tones of wood. Roosevelt Island campus. If The base of the building, meanwhile, it seems as though this column has been is scarred across its three main façades devoted to discussing an with a decidedly abundance of new acaugly and ill-condemic buildings recently, ceived array of it may be because there irregular curtain are few areas of the New walls that move York real estate market in diagonally across which the expansion has been so striking. Indeed, the growth of New York’s infrastructure for higher education is almost as energetic as its development of condos and hotels (see related story on page 68). And it is far more energetic than the expansion of its museums. If the vigor of this sector were in question, it would suffice to look at the new Skidmore, Owings & Merrill–designed, 354,000-square-foot University Center for the New School at 65 Fifth Avenue, which will take up the entire block between 13th and 14th streets. As for a thumbnail description of the new project, I’ll start by quoting real estate website Curbed, whose headline summed it up this way: “New School Unveils Blinged-Out Bronze Badass on Fifth Avenue.” The exterior of the new building — which is scheduled to open at the beginning of the next academic year — is almost complete. Clad in brass, it squats along the surface in a way that seems Fifth Avenue in a state far removed from the Art Deco of almost truculent destructures that Joseph Urban fiance — as though dardesigned for the New School ing pedestrians to assail back in the 1920s and that have defined the school to its blatant insensitivity to Architect Roger Duffy of SOM its urban context. some degree. The setbacks above the base will serve As originally planned, the building was to be much taller than its current 18 as dormitories. From the exterior, at least, stories. In addition, a rendering of an ear- they look as if they won’t admit as much lier version of the project shows a build- light as the older plan for this building, ing clad in a tinted glass curtain wall that which had no setbacks. would have looked far better than what is Between the unsightly irregularities actually being built. of the curtain walls and the brass plates In response to the neighborhood’s across its surface, the new structure looks outcry, the building, which was built as- not only like nothing in its immediate viof-right (meaning without any zoning cinity, but like nothing ever built before! changes), is now shorter. In its present That hasn’t deterred SOM’s website from configuration, it consists of a base and two offering this boilerplate assessment: “The setbacks, each eventually to be accentuat- building has been carefully designed to ed by a row of trees. complement its eclectic surroundings, afThe predominantly dark brown struc- fording the university a signature archi-

66 November 2012 www.TheRealDeal.com

tectural presence that respects the massing and scale of neighboring buildings.” To the contrary, the style of the building is that of Deconstructivism, which, by its very program, aspires to disturb and disrupt the relationship between it and the buildings around it. In regard to that ambition, the new building succeeds with exemplary efficiency. Whether that ambition was ever a worthy one is a better question; I am cerThe construction of the school’s latest academic building, which is scheduled to open for the next academic year. Left: Original rendering.

tain that the answer is no. Personally, I’ve never felt that discord was an estimable ambition, but I feel strengthened in that sentiment by the general ugliness of so many of the buildings — including this latest — that the Deconstructivist style has left in its wake. An eminent example of this, and in some sense a template of the New School’s building, is the new academic building at Cooper Union, at 41 Cooper Square, a monstrosity on the Bowery, which was designed by the dean of Deconstruction: Thom Mayne, the head of Morphosis Architects. The East Village will long suffer from that ghastly intervention, completed in 2009. What was most striking about that building was the helter-skelter gash or scar that rips through its western façade — a scar reprised in the New School’s so-called University Center.

One of the problems with the new building is that it was designed by SOM, which has distinguished itself not only with its mid-century Modernism, but also with the Neomodernism of buildings like 7 World Trade Center. But the firm has always run into trouble when it’s tried to keep up with the latest trends, a fact that is evident in the gauche Contextualism of the Bear Stearns building at 383 Madison Avenue built in 2001, or in this latest attempt at Deconstruction. In what I believe is a break from SOM’s custom, which is to emphasize the teamwork in creating any project, here it has welcomed the attribution of the building to a single designer, in this case Roger Duffy (almost as though SOM was eager to deflect the attribution away from the firm as a whole). The architecture that Duffy has created to date is a decidedly mixed bag. The Condé Nast cafeteria is a promisingly Neomodernist concoction of green glass ceilings and ominous space pods with big oculus openings along the sides. Parts of his Burr Street Elementary School in Fairfield, Conn., with its curving curtain walls, are similarly successful, and indeed, SOM has a long tradition of work on educational institutions. But other projects, like the mirrored interiors of the Skyscraper Museum, which is incorporated into the ground floor of a high-rise in Battery Park City, miss the mark and look cramped and value engineered. And the Toren in Brooklyn, with its vexed and bristling gray plated surface, is simply unlovely to an extreme degree. It is hard to say what this strange use of materials is supposed to signify, whether it is intended to recall the natural textures of wood or something provocatively antinatural. Or perhaps, like so much Deconstructivist architecture, its main ambition, in which it surely succeeds, is to draw clamorous attention to itself. In a further example of the sort of pallid boilerplate that seems to define architectural pitches to universities, on the school’s website, Duffy stated of the building: “Its location, innovative design and bold programming will encourage the face-to-face, spirited inquiry that is a characteristic of this university.” But if buildings are metaphors, this new structure, rather than communicating openness and light — as did earlier versions of the project — instead will live on as a darksome burden to the avenue, metaphorically shunning the surrounding neighborhood that it has blighted. TRD

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The dorm life

By Janna Herron tudents are often told that getting an education is a good investment in their future. But New York City developers are increasingly taking that advice, too. Indeed, as local universities rush to accommodate swelling enrollments, more and more developers are turning to institutions of higher education as business partners. Demand for education goes a long way in explaining the phenomenon: Nationally, full-time students enrolling in two- and four-year colleges and universities grew 45 percent between 2000 and 2010, according to the most recent figures from the National Center for Education Statistics. That government agency estimates the enrollment of students under 25 to increase by 11 percent over the next 10 years, while enrollment of students older than 25 is projected to rise by 20 percent. To house that onrush of students, “it’s relatively common for the public institutions and smaller private universities [to team up with private developers],” said Dan Fasulo, managing director at Real Capital Analytics. Industry insiders say that while developers teaming up with universities is nothing new, the opportunities to partner are growing as schools keep up with more incoming freshmen. Smaller universities in the city also want to stay competitive, and developing first-class student housing is one way to do that, said Miki Naftali, chairman and CEO of the Naftali Group, which is currently partnering with SL Green Realty on a dorm development for Pace University. By contrast, “NYU, Columbia and Fordham are wealthy enough to buy or build their own facilities, and usually only team up when they have to,” Fasulo added. The higher-education partnerships build off of a trend The Real Deal wrote about in last month’s issue, which detailed how developers are agreeing to include elementary and middle schools in, or near, their residential development projects. However, developing for a university is a different beast, sources say. Still, they note that it’s a win-win for both the developers and the schools. The developers are drawn to the projects because the risk is relatively low given that they have guaranteed tenants. Meanwhile, schools are glad to hand over the reins to developers that are experienced with the complexities of constructing large projects. Smaller universities also don’t have deep pockets to acquire the property or land to develop these projects. Yet for experienced developers, getting financing for these projects isn’t any different than obtaining construction loans for other build-to-suit projects, Naftali said. “It’s traditional financing, same as building for a single retail or office tenant,” he said.

68 November 2012 www.TheRealDeal.com

As universities see enrollment skyrocket, more NYC developers turn to building student housing

SL Green is developing 180 Broadway with partner Jeff Sutton for Pace University.

SL Green CEO Marc Holliday

Stuyvesant Park Residence on East 15th Street, which developer Arun Bhatia built for the New School.

Developers are drawn to the projects because the risk is relatively low given that they have guaranteed tenants.

Developer Miki Naftali

And for Naftali, building student housing isn’t that different from developing condos, the company’s traditional business. “It’s not necessarily easier, but there’s a clearer direction,” Naftali said. “We are working with one client, not with 200 different clients. And this one client knows exactly what they want.”

Getting in on the action A host of developers have recently gotten in on the dorm-building action. SL Green’s first foray into dorm development is 180 Broadway, a mixed-use student housing project for Pace that the firm is developing with retail investor Jeff Sutton. SL Green owns the dormitory portion of the project — which sits next door to the

future Fulton Street Transit Center — and is leasing it to Pace. Sutton, meanwhile, is getting the retail part, according to Brett Herschenfeld, senior vice president at SL Green. No retail tenants have been signed yet at the project, which is slated to open by next fall, but Herschenfeld said tenant interest has gone up “exponentially” because the transit station is slated to be completed in the next 12 to 24 months. SL Green is already onto its second project for the university. In August, SL Green and the Naftali Group paired up to buy a development site at 33 Beekman Street for an undisclosed amount. The duo brought in Israeli company Har-

el Insurance and Finance as an investment partner, and the team is planning a 30-story student housing facility for Pace. The two developers share a 51 percent interest in the project, while Harel has the remaining 49 percent. The number of units in the dorm building — which is scheduled for completion in 2016 — has yet to be determined, according to Herschenfeld. Unlike 180 Broadway, 33 Beekman won’t have any retail. Its purpose is to offer “brandnew, state-of-the-art” accommodations for Pace students currently living in university housing in Brooklyn Heights or in “dated, inferior dorms in Manhattan,” he said. While many developers have just recently gotten into building dorms, Arun Bhatia, head of AIB Development Corp., is no stranger to the sector. The developer sold off the bottom 32 floors of his luxury condo the Capri on 55th Street to Marymount Manhattan College for a reported $57 million in the early 2000s. (He kept the higher, more valuable floors as luxury condos.) Bhatia has also completed three student housing developments for the New School in the last 10 years: The 200-bed 20th Street Residence Hall in Chelsea, the 175-bed 13th Street Residence in Greenwich Village and the most recent 635-bed Stuyvesant Park Residence near Union Square. Bhatia sold the former two to the New School for a combined $45 million, Crain’s reported. But he still retains a stake in the retail portion at the 20th Street Residence Hall. And Bhatia is not letting up. In August, he filed plans to construct a 43-room dorm with ground-floor retail at 35 Cooper Square. There’s no word on which university it would serve, but both NYU and Cooper Union are right nearby. In addition, Bhatia still owns a parcel on East 73rd Street between York Avenue and the East River that could accommodate up to 1,000 dorm beds, according to his website. Calls and emails to Bhatia’s company were not returned.

Not always easy The first go-around on a dormitory development takes patience. Unlike speculative developments, constructing a building for a university must be customized for the school’s needs from Day One, Herschenfeld said. “Most buildings you design from the outside in. This is from the furniture out,” Herschenfeld explained. Still, once a developer gets the knack of working with a university, it can be a good source of repeat business. “Once you’re familiar with the needs of the university, it makes the second project go a lot smoother. It’s almost an assembly line Continued on page 110

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ropes

After Rabbi Pinto’s arrest in Israel, attention turns to the New York real estate activities of the religious leader

By David Jones ederal investigators have been speaking to investors involved in real estate projects connected to Rabbi Yoshiyahu Yosef Pinto, who was arrested in Israel for alleged bribery last month. The arrest came amid claims that millions of dollars in real estate investments he’s connected to cannot be accounted for, and that investors may have been threatened by officials close to the spiritual leader. Pinto — the head of the New Yorkbased nonprofit organization Mosdot Shuva Israel and an advisor to a number of high-profile New York real estate figures — was placed under house arrest after allegedly trying to bribe an Israeli police officer in order to get information about an alleged money laundering and bribery probe. The combination of Pinto’s arrest and the August arrest of one of his former aides, Ofer Biton, in New York, is raising new concerns among law enforcement officials that Pinto’s philanthropic and political fund-raising activities may be connected to losses at a number of distressed real estate projects in New York that are controlled by his associates. Almost all of the properties linked to Pinto are owned by his aides or his organization, so it’s impossible to tally exactly how much real estate the rabbi owns, according to multiple sources. Biton — who is also a former fund-raiser for Republican Rep. Michael Grimm of Staten Island — was arrested on charges of immigration fraud after making false statements on an immigration form in 2010 while flying from LaGuardia Airport to Fort Lauderdale. He is suspected of lying about the source of money he had transferred to a U.S. bank account. Investigators are looking at whether those funds were connected to illegal campaign contributions to Grimm. Pinto supporters, however, claim that they were victims and that Biton embezzled funds from the cleric’s organization to help finance the 2010 campaign. John Meringo, an attorney for Biton, told The Real Deal that his client “has done nothing criminal,” but declined to comment on his connections to Pinto’s organization. Robert Nardoza, a spokesman for the

70 November 2012 www.TheRealDeal.com

U.S. attorney’s office in Brooklyn, also declined to comment. An FBI spokesman did not return calls. Meanwhile, New York–based attorney Arthur Aidala, Pinto’s U.S. lawyer, denied that Pinto did anything wrong and noted that the Israeli legal system allows suspects to be held without formal charges. He told TRD that support for the controversial rabbi has been “through the roof ”

Haim Binstock, a principal at Keller and a cofounder of B&B Investment Group; and high-powered attorney Morris Missry, chairman of the real estate department at the law firm of Wachtel, Masyr & Missry — have been mum on Pinto’s recent arrest. Missry, a frequent political bundler for former Rep. Anthony Weiner, told TRD that he was completely unaware of Pinto’s arrest. He said he was “shocked” by the news.

for $1.75 million. Bracha, Pinto and Binstock had planned to build a synagogue there, but defaulted on $1.2 million in loans. Bracha is marketing the property, a commercial condo, through his firm Keller Williams NYC. Robert Holland, an attorney representing the board at Heritage at Trump Place, said lawyers have been trying to

Rabbi Yoshiyahu Yosef Pinto

The combination of Pinto’s arrest and the August arrest of one of his former aides is raising new concerns among law enforcement officials that Pinto’s activities may be connected to losses at a number of distressed real estate projects in New York. here and that there has been no direct impact on Pinto’s local business interests. The Israeli-born Pinto founded Shuva Israel in 1997 and has grown the nonprofit into a major educational and social services group with thousands of followers around the globe. While an Israeli citizen, Pinto spends a considerable amount of time in New York and has a townhouse at 409 East 58th Street. (The townhouse is in the name of Pinto’s organization and a Pinto associate. Lenders filed to foreclose on the property in 2009.) Still, his friends in the real estate world — including New York superbroker Ilan Bracha of Keller Williams NYC; investor

Increased scrutiny Pinto has come under tighter scrutiny in recent years, amid questions about his growing influence in U.S. political and financial circles, as well as the financial dealings of many of his associates. The political and financial tumult has spilled over into millions of dollars in real estate deals linked to the cleric, sources told TRD. Bracha declined to comment on the Pinto investigation, but confirmed to TRD that a 2,800-square-foot ground-floor property at Heritage at Trump Place, an Upper West Side condo, has been on the market

hash out a deal to settle the litigation that stemmed from a foreclosure suit after the partners defaulted. “We’ve been talking with the unit owners’ attorney about a settlement,” Holland said. Meanwhile, Ben Zion Suky — a real estate developer with Manhattan-based Livorno Properties and a top aide to Pinto — is also embroiled in a wide range of legal troubles in connection with his distressed real estate across the city. Pinto is linked to the Livorno deals, as documents obtained by TRD show Suky was Continued on page 109

www.TheRealDeal.com January 2011 25

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ViTal sTaTs NAME: Daniel Benedict AGE: 55

TiTlE ANd CoMpANY:

Founder, BRG HoMEToWN: By Katherine ClarKe

building blocks How many units does BRG own in New York City? We own about 5,000 units in 75 buildings in four of the five boroughs. Approximately half of them are in Queens, but we have some in Manhattan, in Brooklyn and a couple of units in the Bronx. Our smallest building has 15 units and the largest has 325 units.. The biggest is La Mesa Verde; it’s a six-building complex in Jackson Heights. We third-party manage another 2,000 units, most of them co-ops and condos. How did you get into the real estate business? I was born in Geneva, Switzerland.. I started my career in Europe trading precious metals. I then represented a [precious metal] company in New York [when it opened an office here]. Some of my relatives had a building in New York and they asked me to watch over it, and one thing led to another. That’s how I got into the business at age 27. When did you launch BRG? I started the company in 1996 with approximately 500 units, which I had bought. The early 1990s was a great time to buy real estate because Congress had formed the [Resolution Resolution Trust Corporation]] to sell all of the assets held by insolvent institutions, following the savings and loan crisis. What kinds of properties do you have in Manhattan? We just closed on a 117-unit [building], plus commercial space at 321 East 22nd Street.. MNS is renting for us there. We bought it last April. We have other properties in Chelsea and in the West Village and Turtle Bay. Why was the East 22nd Street building a good buy? It was part of a $100 million-plus,, multibuilding transaction. We bid on the full package, but someone came in much stronger on two of the buildings [in the package], so we got a very good deal buying this building. We’re currently [revamping] the hallways with lighting and carpeting and [creating] a dramatic new lobby. In addition, we’re renovating every unit as they become available, putting in new oak flooring and upgrading appliances. We’re also changing the layout of some of the units.

Geneva, Switzerland CuRRENTlY liviNG iN:

Kew Gardens, Queens you’re there, you become a target. It’s just not comfortable. I’d rather be in someone else’s building and complain to them.

The bo boTTom line How did the recession impact your business? My business is primarily focused on the middle of the market. I’m not in the government-subsidized housing business and I’m not in the luxury market. There was a period in 2009 where rents were affected and came down, but now rents have come back to exceed the levels we saw in 2007. You purchased a mixed-use building in Jackson Heights for $14 million last year, setting the record for Queens transactions in 2011. Queens has a different scale than Manhattan. This building was 76 units and 10 stories in a great location a block from the subway. The building had been neglected, which we always like. There was work to be done. To be honest, 2011 was a year where there weren’t that many Queens transactions. I did much larger transactions years before. What’s in BRG’s pipeline over the next year? We have a number of bids out there, from deals as small as $7 million to others worth over $100 million. I’m always actively looking at properties. Lately, it’s been very difficult to find transactions that make economic sense. The prices have risen, and there’s been a lot of capital going into multi-family in New York. By Katherine Clarke

landlord life What’s been your strangest tenant experience? I have a tenant who covered the entire ceiling of their apartment with aluminum because they felt that the tenant above them was trying to poison them with harmful rays. I also have a tenant who keeps moving all their furniture into the hallway. Obviously the tenant is very strange, so it’s hard to rationalize with a strange person and to explain to them that it doesn’t belong there.

96-02 37th Avenue in Queens

What about the worst tenant horror story? We had a tenant in Chelsea who started a fire in his building by throwing a cigarette outside his window. What happened was he also threw garbage out the window [and it caught fire]. The building is about 100 years old. It was damaged and tenants were evacuated. [Ironically, after the fire,] the tenant turned around and organized a tenant association to try to get an abatement for the whole building. Have you ever lived in a building you owned? No. You have things that go wrong — the boiler breaks down, the sewer system backs up, the elevator goes down — and people get very upset. If 321 East 22nd Street in Manhattan

72 November 2012 www.TheRealDeal.com

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Real Estate’s Richest

Stakes go up for billionaires

A look at the NYC real estate players who made the Forbes list of richest Americans, and why it’s getting harder to make the cut

The LeFrak Organization’s Richard LeFrak

The Blackstone Group’s Stephen Schwarzman

The Related Companies’ Stephen Ross

Boston Properties’ Mort Zuckerman

Leonard Stern of Hartz Mountain Industries

Jerry Speyer of Tishman Speyer

Red Apple Group’s John Catsimatidis

Leon Charney of L.H. Charney Associates

Donald Trump of Trump Organization

Solow Realty and Development’s Sheldon Solow

By Tom Acitelli he price of entry for Forbes magazine’s list of 400 wealthiest Americans is going up. The last person on this year’s list clocked in with a net worth of $1.1 billion — which was up $50 million from last year. However, New York City’s real estate titans are (with one big exception) keeping pace. Indeed, most of the 10 New York real estate moguls who made the list, which was released in late September, saw their net worth increase in the last 12 months. Yet one big name dropped off this year: Steven Roth of Vornado Realty Trust. So who led the real estate pack? The highest-ranked New York real estate moguls this year were LeFrak Organization’s chairman, president and CEO Richard LeFrak, and the chairman and CEO of the Blackstone Group, Stephen Schwarzman. The two tied for No. 63 — each with an estimated net worth of $5.2 billion. That was up from $5 billion for LeFrak in 2011, and $4.7 billion for Schwarzman. LeFrak — who was listed “with family”— oversees a real estate portfolio that includes the 5,000-unit LeFrak City complex in Queens and 16 million square feet of property in Newport, the large-scale Jersey City development the firm created beginning in the early 1990s. Schwarzman’s firm, meanwhile, has a U.S. office portfolio valued as high as $22 billion and totaling some 50 million square feet. But the private-equity giant

74 November 2012 www.TheRealDeal.com

announced this summer that it would be selling off most of those properties. It’s trying to capitalize on demand for real estate among investors looking for a safe harbor in uncertain economic times, according to an analysis by the Wall Street Journal. At the same time, though, Blackstone closed the largest real estate opportunity fund ever last month at $13.3 billion. The company launched the fund in 2010 with a plan to raise just $10 billion and will now set to work investing the money. Much of Blackstone’s real estate portfolio, including 1095 Sixth Avenue and the Waldorf-Astoria Hotel, was amassed by Jonathan Gray, its global head of real estate. Gray, a boyish 42, was listed by Forbes this year as “One to Watch,” with a net worth estimated at $550 million. The magazine pegs him as one of the potential CEO successors to Schwarzman.

Property assessments Forbes’s research takes into account each subject’s assets and, of course, their debt. “The challenge, obviously,” said Luisa Kroll, the Forbes editor in charge of the list, “is often that in some of these real estate deals, they end up owning not quite as much as you think they own. And then, also, they might have levels of debt that might have been higher than we’d have first assumed.” Still, while many of the real estate players on the list have diversified finan-

cial interests, most of their wealth stems from their real estate holdings. LeFrak’s firm, for example, controls several hundred oil and gas wells, but those holdings accounted for a small slice of his $5.2 billion net worth. “It’s almost all property,” Kroll said of LeFrak. “The other assets are really not that sizable in comparison at this point.” Another example is Stephen Ross, the third-highest-ranked New York real estate player on the list. The chairman of the Related Companies had an estimated net worth of $4.4 billion and was ranked No. 83, up from the No. 114 spot in 2011, when his net worth clocked in at $3.1 billion. While Ross owns the NFL’s Miami Dolphins, most of his wealth, according to Forbes, comes from properties and developments associated with Related, including the Hudson Yards project on the Far West Side and the Time Warner Center, where he lives in a penthouse. No. 190 on the list this year (and No. 188 last year), Mort Zuckerman, chairman and CEO of mega-REIT Boston Properties, is the publisher of the Daily News and U.S. News & World Report. Those publications, though, pale in revenue generation compared to towers like the GM Building and 601 Lexington Avenue. Zuckerman lives in a penthouse at 950 Fifth Avenue, which he bought in 1986 for $8.5 million. Perhaps the starkest case in point when it comes to making more money

Billionaires By the Numbers

$5,145,000,000

The GDP of the European nation of Liechtenstein, which is less than Stephen Schwarzman’s net worth. (U.N. statistics)

54,302

The number of times that New York State’s 2011 median household income of $55,246 would have to be multiplied to equal Jerry Speyer’s net worth.

4 Number of books Leon Charney has written. The most recent was “The Mystery of the Kaddish.”

www.TheRealDeal.com January 2011 25

Real Estate’s Richest

How have NYC real estate billionaires fared since the 2008 downturn?

$4.4 billion

Leonard Stern, Hartz Mountain Industries

$4.2 billion

Sheldon Solow, Solow Realty and Development Company

$3.5 billion

Donald Trump, Trump Organization

$3.1 billion

John Catsimatidis, Red Apple Group

$3 billion

Jerry Speyer, Tishman Speyer

$3 billion

Mort Zuckerman, Boston Properties

$2.4 billion

$1.2 billion Leon Charney, L.H. Charney Associates

➜

Stephen Ross, Related Companies

$6.4 billion

Schwarzman’s net worth ballooned from 2011 by $500 million, due largely to a 15 percent uptick in Blackstone’s share price. The firm closed the largest real estate opportunity fund ever last month at $13.3 billion.

$4.5 billion

Ross’s net worth has stayed about the same for the last few years, but that could change as Related’s $15 billion Hudson Yards gets under way. The company also has myriad other developments in the works.

➜ ➜

$5.2 billion

The firm has recently bought stakes in Miami’s Gansevoort Hotel as well as in multi-family properties in Oregon, Washington and California. It also has a new luxury rental project in Queens and is continuing work on its mega Newport, N.J., project, which has 20-plus buildings.

$3.7 billion

Stern’s net worth benefited from the general economic recovery. In the NYC area his firm controls 667 Madison Avenue and the land under the Meadowlands sports complex in New Jersey, among others.

$2 billion

Solow’s net worth is up mainly because of a revaluation by Forbes. The firm owns marquee Manhattan office properties like 9 West 57th Street, where, in early 2012, it announced plans to rent space on the 49th floor for more than $200 a square foot. Also, in May, Solow hired Studley to market a plot at 616 First Avenue, which is big enough to support two towers totaling 730,240 square feet.

➜

Stephen Schwarzman, Blackstone Group

$3 billion

Recent purchases have kept Trump’s net worth level. In Washington, D.C., his firm is planning to remake the Old Post Office into a hotel, and in Miami, it bought the Doral Golf Resort & Spa. It also opened a $150 million golf resort along the Scottish coast in July.

$2.1 billion

The supermarket magnate had a particularly good 2011 and 2012 due to the success of his United Oil refinery in Pennsylvania, according to Forbes.

$2 billion

Domestically, the firm is building the first spec office development in San Francisco since 2007; internationally, it has projects under way in Germany, India, Brazil and China. Meanwhile, existing holdings like Rockefeller Center have increased in value coming out of the recession.

$2.8 billion

Boston Properties’ share price didn’t fully recover until the middle of 2011. But Zuckerman’s net worth is likely even higher now because the share price is up and the firm is putting finishing touches on its new office tower at 250 West 55th Street.

$1.5 billion

Charney draws most of his net worth from the three properties he owns in Times Square, totaling 1.5 million square feet, including the 38-story 1441 Broadway, where tenants include Jones New York, Liz Claiborne and Tommy Hilfiger.

Source note: Dollar figures from Forbes. Analysis from TRD and other news sources.

from real estate than from other investments is No. 128 on this year’s list: Donald Trump. Trump, who held the same spot last year, made more than $63 million over the last 12 months from entertainment-related ventures, but still derives most of his $3.1 billion fortune from properties like the Trump International and Trump Tower.

Arrivals and departures Five other New York real estate titans made the list this year: Leonard Stern, chairman and CEO of Hartz Mountain Industries, who, despite maintaining a net worth of $4.2 billion, dropped to No. 89 on the list this year from No. 75 in 2011; Sheldon Solow jumped to No. 111 this year from No. 227 in 2011 with a big increase in net worth to $3.5 billion from $1.9 billion; and Jerry Speyer, co-CEO of Tishman Speyer, who leapt to No. 132 from No. 242 with a corresponding net worth increase to $3 billion from $1.8 billion. In addition, John Catsimatidis, the owner of the Red Apple Group, which controls Gristedes supermarkets and has real estate and other holdings, tied with Speyer, increasing his net worth from $2 billion in 2011; and Leon Charney, No. 360 this year, down from No. 331 in 2011, saw a slight dip in net worth to $1.2 billion from $1.3 billion. All except Catsimatidis drew their net worths entirely from real estate. For Stern — who bought a penthouse duplex at 459 West Broadway in 2010 for $16.5 million — that includes 38 million square feet of property in New Jersey and New York. 28 March 2012 www.TheRealDeal.com

Notes

$4.5 billion

➜ ➜

$5.2 billion

2008 net worth

➜

Richard LeFrak, LeFrak Organization

CHANGE

➜

2012 net worth

➜ ➜

Name

Meanwhile, Charney owns three Times Square buildings, including 1441 Broadway. But given that $1.1 billion was the minimum net worth threshold for making the list this year, it appears that he could be knocked off in 2013 by fellow New York real estate players. Catsimatidis got much of his bump on the list beyond real estate and the supermarket chain he’s famous for: His Warren, Penn.–based United Oil, which supplies his 300-plus gas stations, had a particularly good year, according to Forbes. As for those moguls who did not make the list, it appears that Extell Development’s Gary Barnett and landlord Ruby Schron came closest. Barnett is one of the city’s most active developers, with projects like the International Gem Center and the mixed-use One57, New York’s tallest building with condos. At the muchhyped residential tower, apartments are selling for well into eight figures. “I would be surprised if Barnett doesn’t approach billionaire status if successful with what he has on the table right now,” said one New York analyst. Kroll said that Barnett would, indeed, be a contender for a future Forbes 400, but it was Schron, the elusive landlord of perhaps 20 million square feet in New York, who came the closest this year of any New York titan who did not make the list. She said Forbes pegged Schron’s net worth to be around $900 million this year — $200 million shy of the price of admission. Schron’s sometimes business partner David Werner was also on the verge

of making the list, according to Kroll. Schron and Werner’s involvement in turning the top 25 floors of the Woolworth Building into condos might put both over the top next year. At the same time, there were big New York real estate names who dropped off after making the cut in previous years. The most high-profile example this year was, of course, Vornado’s Roth. He just made the list in 2011, coming in at No. 397 with a net worth of $1.05 billion, down from $1.1 billion in 2010. But this year, Roth slipped off, largely because of drops in Vornado’s share price, Kroll said. The company’s share price last month was trading at $78.68. (Forbes’ financial-magazine rival, Fortune, in October described Vornado’s share price as “treading water for the past couple of years.”) Given the REIT’s 100 million square feet of property nationwide, including much of the Penn Station submarket, Kroll said she would expect Roth to make the list again. Douglas Durst, the chairman of the Durst Organization, has also made the list with his family in the past — though not in 2011. But for Durst, who ceded day-to-day control of the company to his cousin Jodi three years ago, 2012 also proved to be too competitive. But don’t count the Durst family out for 2013: With the expected topping out next year of One World Trade Center, the tallest office tower in America, which the firm codeveloped with the Port Authority, the family could once again make the Forbes 400. TRD

64,136 The number of full-page ads (based on its daily retail rate of $37,420) that Mort Zuckerman could afford to buy in his Daily News.

860

The number of oil- and gas-producing wells controlled by the LeFrak Organization, though those wells did not add nearly as much to the family’s net worth as its real estate holdings.

$1,060,000,000

The dollar value of the NFL’s Miami Dolphins, which is owned by Stephen Ross. He paid more than that — $1.1 billion — for the franchise back in 2008.

730,240

The amount of square feet that could be constructed on a 9.2-acre plot off First Avenue that Sheldon Solow put up for sale in May 2012. That’s about onefourth the size of the Empire State Building.

www.TheRealDeal.com November 2012 75

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Q&A

The East Village’s (friendlier) edge The once-gritty neighborhood is seeing more residential construction and a new wave of buyers and renters to go with it

By Melissa Dehncke-McGill oodbye grit. The East Village, once a haven for artists and squatters, still has more edge than most of Manhattan. But it’s a friendlier edge these days than it’s had in the past. In this month’s Q&A, The Real Deal talked to brokers and market analysts about the boon in residential development in the neighborhood and about the changes in the makeup of buyers and renters calling the area home. (Think fewer recent college grads and more young families.) While most of the for-sale residential housing stock in the East Village is still co-ops, that’s starting to change with new projects like the 36-unit Village Green on East 11th Street and the 48-unit 123 Third Avenue, which both sold out in a year. There’s also the Arabella 101, a 78-unit rental building on Avenue D that’s 50 percent leased. Brokers say those projects and others that came earlier are increasing the livability of the neighborhood, which could lead to higher prices there. For now, recent market measurements are mixed. While most brokers that TRD talked to said prices and sales activity are up, Sofia Song,

Jason Haber

CEO, Rubicon Property What’s going on with residential prices in the East Village? Are they up or down compared to a year ago, two years ago and during the boom? Not only are they up over a two-year period, but prices in some buildings have returned to their pre-crash levels. Take a look at sales at 240 East 10th Street, a luxury condo. You can see that prices achieved in August 2007 are once again being achieved. Which price ranges and apartment types are performing best right now? You are seeing particular strength right now in the townhouse market. Our firm recently closed on an East Village townhouse that required an extensive renovation in which the house sold at just under $1,500 per foot. Which price ranges and apartment types are struggling the most now? Smaller co-op units are lagging compared to the gains made over the last two years by condos. But I’m not sure there is an apartment type in the East Village that I would characterize as ‘struggling.’ How are rentals doing in the East Village compared to sales? Rents are continuing to climb. Whereas we once saw renters come to the East Village because the rents were more affordable, now they are looking elsewhere as prices have come up. What kinds of new retail and restaurants are you seeing in the East Village today, and how is that impacting the market? The East Village is gaining lots of traction

74 November 2012 www.TheRealDeal.com

from international restaurants. For example, the Momofuku restaurants began in the East Village and continue to attract crowds, both visitors and residents. Additionally, the high-end retail such as Lancelotti, John Derian and John Varvatos has brought more affluent buyers to an area that largely was associated with affordable housing. I see transformation moving farther east as more attractive restaurants and retail such as Edi and the Wolf make their claim. What are the most surprising trends you’re seeing in the residential market? There is real demand for luxury singlefamily townhouses in the East Village. This was the domain of Greenwich Village and the West Village until recently.

Sofia Song

vice president of research, StreetEasy How is overall residential sales volume doing in the East Village these days, and how does that compare to a year ago, two years ago and during the boom? The East Village is faring worse compared to Manhattan overall. Based on the volume of closings in the second quarter of 2012, the East Village is down 35.2 percent from the year prior and 41.2 percent from 2010. What’s going on with residential prices in the East Village? Prices are also faring worse than they are in Manhattan as a whole. The median price in the East Village in the second quarter of 2012 was $645,000, which is down 18.1 percent from last year and 18.9 percent down from the peak. In contrast, Manhattan’s median price saw a 3.7 percent increase compared to the prior year

vice president of research at real estate website StreetEasy, said the numbers tell a different story. She said both prices and sales volume are down from the year-ago quarter and are faring worse than Manhattan as a whole. But she agreed that the housing stock is changing and the area is becoming “less gritty.” And, she said, rentals are going strong. Brokers say one reason why sales might be down is that inventory is so tight. If there were more properties on the market, there would be more homes selling because the demand is there. One sector that is doing well, they say, is townhouses. As Jason Haber of Rubicon Property put it, the townhouse market used to be “the domain of Greenwich Village and the West Village until recently.” The area’s trendy restaurants and shops like Momofuku, Edi and the Wolf, Nicoletta, Dirt Candy and Big Gay Ice Cream are also a big draw. And many of the newer restaurants and retail stores are headed east to the previously grittiest parts of the neighborhood. For more on new projects hitting the market, the newly proposed nightlife zone and which apartment types are doing best and worst, we turn to our panel of experts. … and it’s still only a 10.5 percent decline from the 2008 peak. Which price ranges and apartment types are performing best right now in the area? Co-ops dominate sale activity in the East Village. They make up 61.4 percent of all residential transactions. Additionally, the area attracts entry-level, first-time buyers with the bulk of sales, 68.9 percent, priced below $1 million.

continues the gentrification of the East Village. The area is becoming less and less gritty and less and less associated with squatters and artists. What do you think of the proposed zoning changes that would essentially create a “nightlife district” away from residential development in the East Village? I think a proposal like this would only increase the livability of a neighborhood,

“There is real demand for luxury single-family townhouses in the East Village. This was the domain of Greenwich Village and the West Village until recently.” JASON HABER, RUBICON PROPERTY Which price ranges and apartment types are struggling the most now in the area? The East Village had only two closings above $3 million. It’s in short supply of high-end listings. The Arabella 101, a luxury rental, along with 123 Third Avenue and Village Green, have recently hit the market. What impact are those projects and other new residential construction having on the area? I think [they] add much needed diversity to the East Village housing stock. Ultimately, projects like these will add cachet to the area and will attract a broader range of buyers and renters — not just students and entry-level first-time buyers, but more professionals and young families. Are there any other upcoming projects that you think will have a big impact on the East Village market? Yes, 11 Second Avenue. It’s a 64-unit new construction building that will replace an old, three-story rundown building on the corner of Second Avenue and First Street. While it’s not a monolithic building, it

but it would certainly change the character of the East Village. It would increase its appeal to young families, older couples and could drive up residential prices. How are rentals doing in the East Village compared to sales? The East Village is doing well in terms of rentals. Median rent in the East Village is currently $3,200, which is 10.3 percent higher than it was last year. Overall, Manhattan median rent is $3,395, but it is only up 2.9 percent from last year. What’s the inventory like in the East Village these days? Like everywhere else in the city, the East Village inventory has been declining quite dramatically. In the third quarter of 2012, there were only 182 listings, which was 18.4 percent less than a year ago. What kind of new retail and restaurants are you seeing in the East Village today? The East Village has become a foodie’s heaven with the likes of Momofuku, Porchetta, Nicoletta, Dirt Candy, Big Gay Ice www.TheRealDeal.com November 2012 77

Q&A Cream and the new Calliope. Many great eateries are going farther into Alphabet City, onto Avenue C and Avenue D. What’s going on with financing for residential purchases in the East Village? Buyers are still having a difficult time securing mortgages [in general]. Additionally, the bulk of the East Village market is made up of co-ops, which tend to be slightly more difficult to finance.

Cindy Scholz

senior associate, Citi Habitats What impact do you think that new residential construction in the East Village is having on the rest of the area? When I lived in Alphabet City over five years ago, you would never place Avenue D and luxury in the same sentence. [The Arabella 101,] a modern rental building, is thriving in the area, and I think we will see more luxury units like this pop up in Alphabet City. Are there any other upcoming projects — either residential or commercial — that you think will have a big impact on the East Village? Yes, 211 East 13th Street is a new condo project that’s been greatly anticipated. Also, 51 Astor Place is a commercial building in the heart of the Village that is going up very quickly. There is still a long way to go on this project, but it will be a prominent fixture in the area upon completion. What do you think of the proposed zoning changes that would create a “nightlife district” away from residential areas? A dedicated nightclub district may help preserve the charisma on many residential blocks while centralizing the noise and other issues inherent to the nightlife industry to a more confined area. The East Village is made up of many young renters and owners who frequent bars and clubs. Would they like to reside above one? Probably not, but it is important to have them within walking distance to maintain the fun vibe that lures people to the East Village. What kinds of discounts off asking prices are being seen in the East Village? Properties are selling at ask. The days of lowball offers are over. Two years ago, you would be foolish not to submit a bid 10 to 15 percent below ask. I purchased my own condo earlier this year paying slightly above ask. I placed an offer within 24 hours of it hitting the market to prevent a bidding war. Clients who insist on lowballing learn after they lose one or two apartments that they need to be prepared to come in at ask, or just a hair below if they want to compete with other buyers. 78 November 2012 www.TheRealDeal.com

Eileen Kim

real estate agent, Bond New York

How is overall residential sale volume doing in the East Village these days? Inventory is really tight right now. In the third quarter, there were 74 sales, but I think that number would be higher if there was more inventory. By comparison, in last year’s third quarter, there were 95 sales, in 2010’s third quarter there were 66 and in 2007’s there were 138. [But] anything priced well now is going into contract in four to eight weeks. Which price ranges and apartment types are performing best right now in the area? One bedroom co-ops between $500,000 and $1 million. Which price ranges and apartment types are struggling the most now in the East Village? Anything under $500,000 and between $1 to $2 million. Also, studios and two-bedrooms. Are there any upcoming projects — either residential or commercial — that you think will have a big impact on the East Village market? There are several. For example, 74–84 Third Avenue is a doorman rental building with 94 apartments coming online in 2013. There’s also 21 East First Street, a new condo on the cusp of the Lower East Side with 64 apartments coming online in 2013, and 316 East 3rd Street, a new rental with 33 apartments coming online in 2013. There are also a slew of smaller developments and conversions and renovations popping up. And, 51 Astor, the new 400,000-squarefoot office building going up, could be the kind of neighborhood-changer in the East Village that the Time Warner Center was for Columbus Circle. How are rentals doing in the area? Rentals dominate the East Village. There were 818 rental deals versus 185 sale deals in 2012 to date. What kinds of discounts off asking prices are being seen in the East Village? Prices are no longer very negotiable, and apartments are now trading at about 2 percent below ask. During the same period last year, apartments were trading around 5 percent below ask. How long are properties staying on the market in the East Village? Anything priced well is going into contract in one to two months. In the last couple of years, a lot of properties would sit on the market for a year, sometimes longer.

What are the biggest challenges to selling residential property in the East Village today? The lack of inventory.

June Phillips

senior vice president, Halstead Property Which areas of the East Village are seeing the most activity? Between Avenues A, B and C is where I am seeing a lot more activity lately, but there is not much on the market. I have one listing at the Fillmore and it’s been on the market for quite a while. There are 10 on the market right now in the A Building. At 123 Third Avenue, there are two listings. What’s going on with residential prices in the East Village today? At one property I have, 525 East 11th Street, we have a 799-square-foot [unit] listed for $918,000. We’re asking $1,150 a square foot, which is a little under market because we want to draw customers since it hasn’t moved. The average in the neighborhood, depending on the grade of the apartment, is about $1,350 a square foot. How is the new residential development in the area impacting the market? It’s been wonderful — it has brought people down there. I do broker open houses, and 50 percent of the brokers haven’t ventured past Avenue A, especially on the rental side, because people are going to rent and eventually they’re going to buy. What kinds of new retail and restaurants are you seeing in the East Village, and how is that impacting the residential market? We are seeing a lot of new little restaurants and retail shops. They are geared toward skateboard shops, consignment shops and little boutiques. … Where I see the most change from 10 or 15 years ago is from 13th Street to Ninth Street and from First Avenue to Avenue C. That little area has changed a lot, especially in and around Tompkins Square Park. What are the biggest challenges to selling residential property in the East Village? The stigma that still exists: getting people east of First Avenue. Once people walk down there and get into properties, they see what a wonderful neighborhood it is. There is a uniqueness that you don’t see anymore on the Upper East Side; even the West Side is changing. It is a neighborhood that is not as Hollywood as the West Village — it’s just a real comfortable neighborhood. The challenge is getting people there.

Who are the most active buyers/renters in the East Village right now, and how does that differ from the past? There are a lot of first-time buyers and couples, whereas maybe 10 years ago or even five years ago the rentals and a few sales in the walk-up buildings were people just out of college and students. Hipsters are still there — it still does have an edge, but it’s a friendly edge. No one is pushing them out, you don’t get the feel that they are being displaced.

Jacqueline Urgo

president, the Marketing Directors How is overall residential sale volume doing in the East Village these days? Sales volume has been climbing over the past few years, but the numbers don’t truly reflect the full potential of the neighborhood as activity has largely been hampered by a lack of existing inventory. Residences that hit the market generally change hands in short order, and the tightening rental market is pushing even more residents toward ownership. How have new residential projects in the area impacted the market? The success of these buildings has provided tangible evidence that the appetite for new construction is very high.

Kira Saltzman

representative/salesperson, Town Residential How is overall residential sales volume doing in the East Village these days? Many seeking to buy for the first time with their hearts set on the Village, Tribeca or Soho were priced out. [They] have been blown away to discover what they can get for the same price and [still be Downtown]. What do you think of the proposed zoning changes that would create a “nightlife district” away from residential development? I believe the new zoning laws being discussed stand to have a positive impact on residential development. Keeping large clubs — 200-plus capacity — in commercial zones would protect not only the well-being of residents, but also the dedicated small local businesses that have been struggling due to the nightlife surge in this area. No one wants to shop on a street filled with grime from the night before. Landlords and owners would benefit, too: Implementing restrictions for nightlife would protect their investments as prices continue to rise on rents and property values. TRD www.TheRealDeal.com November 2012 75

in 2008 by Metropolitan Development. The buyer was represented by Institutional Property Investors, a unit of commercial brokerage Marcus & Millichap.

CONNECTICUT

Yalie apartment complex sells in CT’s priciest deal of the year In Connecticut’s priciest multi-family housing deal so far this year, a five-building, 294-unit apartment complex in New Haven sold last month for $41.65 million, the Hartford Business Journal reported. UOB Eagle Rock Multifamily Property Fund LP bought the complex from SA Wintergreen LLC.

Wintergreen of Westville

Called Wintergreen of Westville, the property is located at 400 Blake Street in the city’s Westville neighborhood. It was built

The complex is located near Yale University and provides off-campus, prefurnished housing for students.

LONG ISLAND

Jumbo mortgages return to Long Island The jumbo home loan is making a comeback on Long Island, Newsday reported. In the first half of the year, $4.3 billion in new jumbo mortgages — defined as home loans over $625,500 — were taken out on Long Island, according to LPS Applied Analytics. That’s almost double the $2.4 billion in new jumbo mortgages the area saw during the same period of 2011. With buyers now required to put more money down, lenders now see jumbos as less of a risk, according to Newsday. In the first

five months of 2012, jumbo loans made up 4.3 percent of new mortgages in Nassau County, up from 4.1 percent from the same time period last year. In Suffolk County, 5 percent of new mortgages were jumbos, a jump from 4 percent at this time last year. In 2009, by contrast, only 2 percent of new mortgages in Nassau and 1.2 percent in Suffolk were jumbos. NEW JERSEY

BofA office sale could set NJ record In what could be a record-setting sale for New Jersey, Bank of America unloaded a 12-building office complex in Hopewell Township last month, Bloomberg News reported. Neither the buyer nor the price has been officially announced, but Fortress Investment Group reBank of America CEO Brian Moynihan

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portedly bought the property for $375 to $400 million. As The Real Deal has reported, the deal could surpass the largest office sale on record in New Jersey, set last year when Newport Tower in Jersey City traded for $377.5 million. BofA acquired the 1.8 million- square-foot Hopewell Township property during its 2009 merger with Merrill Lynch, but is now shedding its office properties. Bank of America CEO Brian Moynihan said in February that the bank may sell every one of its offices, save for its North Carolina headquarters and its stake at 1 Bryant Park. Available office space in central and northern New Jersey grew to 21 percent in the third quarter of this year, up from 20.3 percent in the second quarter, according to Colliers International data cited by GlobeSt .com. New Jersey’s overall average asking rent, meanwhile, dropped slightly in the third quarter to $22 per square foot, down from $22.03 in the second quarter. Northern New Jersey, however, saw asking rents increase in the third quarter to $22.22, up from $22.10 in the prior quarter. Compiled by Andrea Cetra

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The W. Howard Lester estate

Holmby Hills The estate of the late W. Howard Lester, the chairman and CEO of Williams-Sonoma, has listed his 20,000-square-foot home in the Holmby Hills section of Los Angeles for $30 million, the Wall Street Journal reported. The home, which sits on 1.4 acres, has seven bedrooms, 13 bathrooms, a home theater, a wine cellar and a billiards room. The property also has a guest house, waterfall and fountains. Lester and his wife purchased the home in 2004 for $17.5 million. Mauricio Umansky, founder and CEO of the brokerage the Agency, has the listing. Sheryl Crow

A rendering of Farmers Field and the surrounding area in Los Angeles

Los Angeles Last month, the Los Angeles city council unanimously approved plans for Farmers Field, a proposed $1.5 billion football stadium downtown, ESPN reported. The 78,000-square-foot stadium will be built by Anschutz Entertainment Group, the entity that owns the Los Angeles Kings hockey team, and will be connected to the existing Los Angeles Convention Center, which would be modernized under the plan. The project cannot break ground, however, until AEG secures an NFL football team to take up residence at the stadium. L.A. mayor Antonio Villaraigosa said at a ceremonial signing of the agreement last month that the new stadium would help revitalize downtown L.A., according to the Los Angeles Times. “This is not just about football,’’ the mayor said. “People will come to downtown from every part of the city.” AEG said it is on track to announce a team by March, though the project faces a lawsuit filed by antipoverty activists who want AEG to contribute $60 million for affordable housing.

Virginia Real estate mogul Donald Trump has purchased the final piece of Patricia Kluge’s Charlottesville estate, paying $6.5 million for a 23,000-square-foot mansion, the Washington Post reported. Kluge, third wife of the late media mogul John Kluge, had put the 45-room home on the market for $100 million three years ago. The Donald, who already owned Kluge’s vineyard and the bulk of the land around the mansion, bought the house after negotiating with Bank of America, which took ownership of the property after Kluge defaulted on her loans. “The banks had [the estate] on the books for hundreds of millions of dollars,” Eric Trump, Donald Trump’s son, told the Post. “We were able to reassemble it for a small fraction of that.” The mansion, constructed by the Kluges in the 1980s, has eight bedrooms and 13 bathrooms, as well as a private chapel and a helicopter landing pad. Before defaulting on her loans, Patricia Kluge turned the land into a vineyard and winery. The Trumps have begun renovating the winery, and are considering several options for the estate, including converting it into a golf course, turning the mansion into an inn or even flipping the property.

Florida Completed foreclosures are declining nationwide, according to 82 November 2012 www.TheRealDeal.com

data released last month by CoreLogic, but Florida remains the state hardest hit by the housing crisis. In the year ending in August, there were some 92,000 completed foreclosures in Florida, according to CoreLogic. That accounts for some 11 percent of all mortgaged homes in the state. Still, Florida’s overall foreclosure inventory percentage declined 1.1 percent from the same time last year. In the Tampa–St. Petersburg–Clearwater area, there were 13,094 completed foreclosures in the year ending in August. That accounts for 11.3 percent of all homes with a mortgage, a slight decline from last year. The Orlando–Kissimmee–Sanford area saw 11,463 houses, or 11.1 percent of all mortgaged homes, in the foreclosure inventory. According to the report, there were 57,000 completed foreclosures across the U.S. in August of this year, down from 58,000 in July and 75,000 in August of 2011. Since the financial crisis began in September 2008, there have been approximately 3.8 million completed foreclosures across the country. Some 1.3 million homes, or 3.2 percent of all homes with a mortgage, were in the national foreclosure inventory as of August of this year. That’s down from 1.4 million, or 3.4 percent, in August of last year.

Hollywood Musician Sheryl Crow listed her 11-acre Hollywood Hills estate for $15.95 million, TMZ reported. The property includes a 5,437-squarefoot Spanish Revival main house, as well as another three-bedroom house and a 1,334-square-foot cottage. The estate also has an infinity pool, hiking trails and a campsite. The Real Estalker reported that Crow purchased the homes in two separate transactions in 1998, buying the main house for $1.8 million and purchasing the rest a few months later for $3.3 million.

Chicago A new 60-story rental tower will soon rise at 111 West Wacker Drive in the Loop neighborhood of Chicago, the Wall Street Journal reported. With a $115 million construction loan from Bank of America and U.S. Bank, the Related Companies will soon resume construction on a half-built tower that has stood incomplete for four years. The project, originally developed by Ivan Dvorak, was slated to become a 90-story hotel and condominium, but stalled during the recession. A Related distressed fund paid $5 million in cash last year for a controlling stake in the project, though Dvorak retains an interest in the project. The building will have a total of 504 units, the Chicago Tribune reported, and Related said it aims to get monthly rents above $3 per square foot at the building. The property could face some stiff competition from other projects, however, with 1,000 new units of housing slated to debut in the Loop in 2013, the Journal said. That’s up from 338 new units this year. Compiled by Zachary Kussin

A replica of Disneyland’s Haunted Mansion

D u l u t h , G a . A replica of Disneyland’s Haunted Mansion in Duluth, Ga., is listed on eBay for $873,000, the Daily Mail reported last month. The four-story, 10,000-square-foot property was built by Disney contractor Mark Hurt. Along with seven bedrooms and six bathrooms, the house has a “haunted mirror” in which a ghost appears while music plays and lights flicker. There’s also a two-story library with a gas-burning fireplace, a roof deck, a second-floor terrace and an elevator.

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Eastdil to market Sony’s Madison Avenue tower Eastdil Secured beat out the CBRE Group, Cushman & Wakefield, Jones Lang LaSalle and Newmark Grubb Knight Frank to get the listing for electronic giant Sony’s 36-story building at 550 Madison Avenue last month, the New York Post reported. Sony has been considered selling the 800,000-square-foot property 550 Madison Avenue since the beginning of the summer, when the company posted a nearly $6 billion loss during the last fiscal year. As previously reported, the Sony U.S. headquarters could be worth between $700 million and $1 billion. If the building is sold, the company could move west to Hudson Yards, Downtown to the World Trade Center or to the Time Warner Center at Columbus Circle, according to the Post. The tower now houses Sony’s music and movies divisions as well as its corporate offices.

Brookfield to market $50 million portfolio Brookfield Financial was named the exclusive broker for the $50.1 million Decathalon Portfolio, a group of 10 multi-family buildings in Upper Manhattan. The portfolio was put on the market after lenders filed to foreclose on the owner, Vantage Properties. The portfolio includes 474 prewar apartments in Washington Heights and Inwood, of which 116 are renovated. After acquiring the distressed loans last year, Lone Star Funds, the Dallas-based real estate firm, filed a $50 million-plus lawsuit against Vantage

and its partner, Apollo Real Estate (now AREA Property Partners), who bought the property together in 2007. Lone Star alleged that the two failed to pay the interest on their loans since May 2011. The properties, which are only available as a group, range geographically from 248 Sherman Avenue near 207th Street on the northernmost end down to 961 St. Nicholas Avenue at 158th Street.

Astoria apartment building on the market A four-story multifamily property at 27-37 27th Street in Queens is for sale with an asking price of $11.5 million. Located between 30th and Newtown avenues in 27-37 27th Street in Queens the borough’s Astoria neighborhood, the 30,572-square-foot elevator building contains 40 residential units and 18 parking spaces. The buyer would have the opportunity to add a full-floor addition to the building. A sale at the asking price would represent a capitalization rate of 6.5 percent and a gross rent multiple of 11.1. Massey Knakal’s Evan Daniel, James Nelson and Mitchell Levine are marketing the property.

Penn Station–area development site for sale A 2,940-square-foot development site at 138 West 32nd Street is for sale with an asking price of $10 million. Located half a block from Penn Station, the site is ideally

suited for a hotel, condominium, apartment or office redevelopment, according to the listing. Under the current C6-6 zoning for high-bulk office districts, the property has a floor-area ratio of 15 and can accommodate a 15-story building totaling about 44,100 square feet. A building of about 6,000 square feet, which can be demolished, currently exists on the site. A Portland, Maine–based firm named Lux Realty Group is handling the assignment.

LIC commercial building on the block A 14,000-square-foot commercial property at 35-11 Queens Boulevard in Long Island City is on the market with an asking price of $8.5 million. The single-story building sits on a corner lot measuring 100 by 140 feet and has 100 feet of frontage along Queens Boulevard. Several retail tenants occupy the property, including a Laundromat called Queens Cleaners Depot; Hanac NYC Taxi Academy, a test preparation center for taxicab driver’s licenses; D&D Restaurant Food Supply, a restaurant sup35-11 Queens Boulevard in Long Island City ply distributor; and an auto repair shop. Under the site’s current zoning, a commercial and industrial development of up to 28,000 square feet is allowed. Eran Elhanani of Keller Williams NYC is handling the sale. Compiled by Linden Lim

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Deal Sheet summary

The Deal Sheet, on pages 88 to 98, covers transactions from 9/11/12 through 10/10/12. Please submit future deals to deals@therealdeal.com.

Sales

Overview

By type

Property sales

Development

Deals Dollars

46 $1,171,010,000

Financing Buildings Aggregate value

Development

290.12 298.40

Hotel

Industrial

Mixed-Use

Mixed-Use Multi-family

Transactions

By dollar volume (in millions)

1.21 16.80

Multi-family

143.68

Office

406.25

Retail

14.55

$54,750,000

Leases Office

Retail

Total

104

Leases square feet Office

757,493

Retail

313,742

Total

1,071,235

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

26,000

Jones Lang LaSalle

238,156

Communications

Fashion*

27,809

Newmark Grubb Knight Frank

139,822

Financial

Global Trading

Health & Beauty

Legal

83,231

Trident Commercial

Media

21,222

Kenneth Zund Realty Associates

27,969

Medical

Rosenhaus Real Estate

25,246

NGO

32,200

Colgate Real Estate Advisors

18,500

Other

25,716

RM Bradley

18,478

Real Estate

77,996

The Vortex Group

16,000

Science & Technology

44,534

Garth Organization

16,000

Security

22,000

Rice & Associates

15,072

Telecommunications

A.C. Lawrence & Co.

12,663

Travel

109,842 95,901 122,500 7,000

7,500

13,194 40,848

Cushman & Wakefield

87,672

CBRE Group

55,070

Winoker Realty

40,848

Studley

37,378

Adams & Co.

28,000

9,832

Retail leases Top tenant reps for leasing by sf

Retail leases by industry

Broker

Automobiles

110,000

Discount

29,031

Sholom & Zuckerbrot

45,000

Fashion

24,925

Ripco Real Estate

44,031

Food & Beverage

29,269

NAI Friedland Realty

12,730

Home Improvement

47,730

Other

65,822

CBRE Group

Square feet leased

Pliskin Realty

6,965

RKF

6,300

Cushman & Wakefield

6,225

Manhattan Commercial Group

5,500

Newmark Grubb Knight Frank

5,500

NY Retail Group

5,200

JTRE

5,000

Rice & Associates

3,850

NYCRS

3,630

(*includes showroom space)

Other

Retail leases sf by industry

16 2 25

116,965

www.www.TheRealDeal.com November 2012 87

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 9/11/12 to 10/10/12. Please submit future deals to deals@therealdeal.com.

Office leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

655 Third Ave

122,500

Mitsubishi International Corp. / C. Kraus, E. Reimer, Jones Lang LaSalle

Durst Organization / Represented inhouse

The general trading company signed a lease to consolidate and expand its offices in the building, the New York Post reported. The tenant will retain floors two through five and add the sixth floor, while giving up space on the eighth, ninth and 21st floors.

530 Seventh Ave

57,500

Perry Ellis International / R. Martin, M. Astrachan, A. Chudnoff, B. Lane, Jones Lang LaSalle

Savitt Partners / Represented in-house

The fashion company signed a lease for 39,000 square feet for office and showroom space and signed for another 18,500 square feet in the building for its Rafaella division. The leases allow Perry Ellis to consolidate its women’s wear business into one location.

1345 Sixth Ave

41,819

Peter J. Solomon Company / Neil Goldmacher, Newmark Grubb Knight Frank

Alliance Bernstein / n/a

The independent investment banking firm signed a long-term sublease for the entire 31st floor. The tenant is relocating from a full floor of 23,411 square feet at 520 Madison Avenue.

135 West 50th St

40,848

Fareportal / C. Abdo, K. Park, Winoker Realty

AllianceBernstein / B. Alexander, C. Mansfield, J. Mangiacotti, S. Bogetti, CBRE

The online travel website signed a seven-year, four-month sublease on the fifth floor. The tenant is relocating from 213 West 35th Street.

32 Old Slip

38,750

Sentry Centers LLC / J. Freede, R. Laginestra, M. Wellen, CBRE

Old Slip Properties / R. Alexander, D. Lehman, D. Maurer-Hollaender, B. Surry, CBRE

The provider of dedicated conference centers signed a lease for its third Manhattan location. The new space will open in December after a $3.6 million renovation at what was previously used by Goldman Sachs as an internal training and conference center. The company has two other branches at 750 Third Avenue and 810 Seventh Avenue.

131 West 33rd St

28,000

New York State Nurses Association / Peter Olans, Trident Commercial

n/a / Brandon Medeiros, Time Equities

The nonprofit signed a lease on the third and fourth floors, the New York Post reported. The tenant is relocating from 120 Wall Street.

1370 Sixth Ave

27,000

VCS / J. Rosenblatt, R. Lissio, Newmark Grubb Knight Frank

Principal Investors / P. Amrich, P. Meagher, K. Powers, CBRE

The footwear company signed a lease for the entire eighth and 15th floors and part of the ninth floor.

11 West 19th St

26,000

LBi / J. Katcher, F. Coco, C&W

n/a / Bob Savitt, Savitt Partners

The marketing and technology agency signed an expansion lease, bringing its total occupancy in the building to 78,000 square feet.

555 Madison Ave

25,246

HQ Global Workspaces / Richard Rosenhaus, Rosenhaus Real Estate

Rodney Corp. / R. Baraf, M. Mandell, E. Silverstein, C&W

The office-space provider signed a lease for the entire fifth floor, the New York Post reported. The asking rent was $59 per square foot, according to the paper.

100 Sixth Ave

23,969

Two Sigma Investments / Jeffrey Zund, Kenneth Zund Realty Associates

Trinity Real Estate / Represented inhouse

The finance and technology firm signed an expansion lease for the entire 14th floor. The tenant is increasing its occupancy to 138,784 square feet on the fourth, seventh, eighth, 14th, 15th and 16th floors.

757 Third Ave

22,809

NTT America Inc. / S. Vinett, Jones Lang LaSalle; T. Kono, Newmark Grubb Knight Frank

n/a / A. Chudnoff, M. Konsker, M. Ginberg, Jones Lang LaSalle

The business communications services provider signed a 10-year, 10-month lease for the entire 14th floor. The company is relocating from 101 Park Avenue.

417 Fifth Ave

22,000

Temco Service Industries / D. Stockel, P. Van Duyne, J. Picco, A. Weisz, C&W

Murray Hill Properties / Represented in-house

The provider of building maintenance and security services signed a lease to relocate its offices from One Park Avenue, the New York Post reported.

150 East 52nd St

21,222

Fujisankei Communications / F. Smith, O. Farooq, C&W

Princeton International Properties / Represented in-house

The global media company signed a lease renewal for the building’s top three floors.

1400 Broadway

21,000

On Deck Capital / Paul Ippolito, Newmark Grubb Knight Frank

W&H Properties / Scott Klau, Newmark Grubb Knight Frank

The technology firm signed a lease for the entire 25th floor.

2 Rector St

18,900

Barry McTiernan & Moore LLC / M. Shapses, E. Schmall, J. Messina, Studley

Savanna / Scott Cahaly, Jones Lang LaSalle

The law firm signed a lease renewal for the entire 14th floor.

1430 Broadway

18,500

Abrams Garfinkel Margolis Bergson LLP / Larry Haber, Colgate Real Estate Advisors

n/a / K. Kronstadt, R. Kramer, Newmark Grubb Knight Frank

The law firm signed a lease.

666 Third Ave

18,478

Robinson & Cole / G. Taubin, C. Lemle, Studley; A. Filler, RM Bradley

Tishman Speyer / Represented inhouse

The law firm signed a lease for the entire 20th floor of the Chrysler Building. The tenant is relocating from a smaller, 11,864-square-foot space at 885 Third Avenue next spring.

551 Fifth Ave

16,000

Schoeman, Updike & Kaufman LLP / R. Marek, The Vortex Group; K. Friedland, Garth Organization

Feil Organization / Represented inhouse

The law firm signed a lease on the 12th floor, the New York Observer reported. The tenant is relocating from 60 East 42nd Street.

1400 Broadway

14,307

VeriFone / B. Peters, S. Black, Jones Lang LaSalle

W&H Properties / S. Klau, E. Harris, N. Rubin, A. Sciacca, Newmark Grubb Knight Frank

The electronic payment technology firm signed a new 10-year lease on the 32nd floor.

450/460 Park Ave South

14,000

OfficeLinks / Jonathan Tootell, Newmark Grubb Knight Frank

The Moinian Group / Represented in-house

The provider of office suites signed a long-term lease. The asking rent was $49 per square foot, according to Crain’s.

757 Third Ave

13,194

NTT Docomo USA / S. Vinett, Jones Lang LaSalle; T. Kono, Newmark Grubb Knight Frank

n/a / A. Chudnoff, M. Konsker, M. Ginberg, Jones Lang LaSalle

The Japan-based mobile communications operator signed a 10-year, 10-month lease for the entire 16th floor. The company is relocating from 101 Park Avenue.

601 West 26th St

11,000

Firefly Value Partners / S. Petriello, M. Affronti, CBRE

RXR Realty / Represented in-house

The investment management firm signed a lease on the 15th floor.

34 West 33rd St

9,832

Kids with Character LLC / David Levy, Adams & Co.

Arcade Building Associates / David Levy, Adams & Co.

The sportswear manufacturer and designer for children signed a lease renewal on the 10th floor. The reported asking rent was $39 per square foot.

100-104 Fifth Ave

9,500

Timberland / D. Preate, J. Katcher, C&W

n/a / G. Greenspan, M. Kaufman, Kaufman Organization

The footwear and apparel company signed a 10-year lease for showroom space. The reported asking rent was $60 per square foot.

1325 Sixth Ave

7,846

C.T. Development America Inc. / A. Chudnoff, D. Turkewitz, Jones Lang LaSalle

n/a / J. Fitzsimons, D. Direnzo Jr., C&W

The company signed a four-year lease for part of the 12th floor.

3044 Coney Island Ave (Brooklyn)

7,500

Renaissance Home Care / Nick Zweig, Locations Commercial Real Estate

n/a / Nick Zweig, Locations Commercial Real Estate

The home care services provider signed a lease to relocate its offices.

1629 First Ave

7,000

Fastbreak Kids / G. Alterman, A. Stern, RKF

The Kibel Companies / G. Alterman, A. Stern, RKF

The sports training company signed a lease in the space formerly occupied by a movie theater.

88 November 2012 www.TheRealDeal.com

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Office leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

14 Wall St

6,603

Pegasus Legal Funding LLC / Lily Lin, A.C. Lawrence & Co.

ROZA 14W, LLC / Jonathan Cope, CBRE

The personal injury financing provider signed a five-plus-year lease. The reported asking rent was $32 per square foot.

240 West 35th St

5,320

Carrier Northeast / Jason Frazier, CBRE

Hidrock Realty; Meritage Properties / Robert Kaplan, Hidrock Realty

The HVAC solutions company signed a lease for the entire top floor.

370 Lexington Ave

5,031

CME Group / Holly Duran, Real Estate Partners

Sherwood Equities / A. Weissleder, J. Burrowes, Sherwood Equities

The risk management firm signed a lease for five years and eight months on part of the second floor. The reported asking rent was $52 per square foot.

72 Madison Ave

5,000

LDPR / Marc Ellman, Ellman Realty

The Moinian Group / Represented in-house

The public relations firm signed a long-term lease renewal. The company has been a tenant in the building for more than 15 years.

180 Varick St

4,973

Payvision / Elizabeth Juviler, Rice & Associates

180 Varick St. Corp. / Steven Martin, Olmstead Properties

The global card processing services provider signed a lease.

145 East 57th St

4,750

John Silberman Associates PC / Carri Lyon, C&W

MIP 145 East 57th Street LLC / Barrett Stern, Newmark Grubb Knight Frank

The law firm signed a 10-year, five-month lease for the entire eighth floor.

711 Third Ave

4,727

ITRS Group / L. Biller, M. Kaufman, Kaufman Organization

SL Green / Represented in-house

The software management firm signed a five-year lease. The reported asking rent was $54 per square foot.

444 Madison Ave

4,560

Sessa Capital / Lily Lin, A.C. Lawrence & Co.

Outsource Partners International Inc. / Scott Bogetti, CBRE

The hedge fund signed a 29-month sublease on the third floor. The reported asking rent was $40 per square foot.

350 Fifth Ave (Empire State Building)

4,549

CB Alliance / Elie Reiss, Rice & Associates

W&H Properties / Ryan Kass, Newmark Knight Frank

The boutique private equity firm signed a lease on the 76th floor.

231 Front St (Brooklyn)

4,500

Casserole Labs / Represented in-house

Meir Moore Inc. / Christopher Havens, aptsandlofts.com

The tech company signed a five-year lease on the third floor, Crain’s reported. The firm is relocating from 568 Broadway. The asking rent for the new space was $32 per square foot, according to the news site.

341 West 38th St

4,200

Students for Education Reform / D. D’Agnes, C. Lyon, O. Hane, C&W

n/a / R. Zimmerman, A. Udis, ABS Partners

The nonprofit signed a three-year lease for the entire 11th floor.

32 East 31st St

4,000

Creative Photographers / Jeffrey Zund, Kenneth Zund Realty Associates

n/a / Mark Furst, Cassidy Turley

The photography company signed a lease to expand and relocate to the entire second floor.

220 East 23rd St

3,250

Hudson TG / Elizabeth Juviler, Rice & Associates

Elias Kalimian / Josh Dionne, JMD Realty Advisors

The political consulting, fundraising and government relations firm signed a lease on the eighth floor.

366 Fifth Ave

2,900

Bueno of California / Rick Brickell, NYAE

Joseph P. Day Realty / Rick Brickell, NYAE

The handbag maker signed a seven-year lease extension. The reported asking rent was $45 per square foot.

28 East 22nd St

2,300

Nelson, Byrd, Woltz Landscape Arquitects / Elissa Groh, Rice & Associates

ASA Lofts Inc. Co-Op / Evan Algier, ABS Partners

The architectural firm signed a lease on the second floor.

2328 Broadway

1,500

n/a / J. Famularo, R. Idnani, NYCRS

Mount Pleasant Mgmt Corp. / n/a

The school signed a seven-year lease.

214 West 39th St

1,500

Renoir Fashion / Lily Lin, A.C. Lawrence & Co.

214 West 39th Street / Ernie Vallorano, Granite Management

The menswear company signed a three-year lease on the 10th floor. The reported asking rent was $35 per square foot.

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East Brunswick, NJ $6,090,909

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Office leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

65 Fort Washington Ave

1,500

RedStream Technology / Ravi Idnani, NYCRS

n/a / James Famularo, NYCRS

The recruiting firm signed a seven-year lease.

311 West Broadway

1,110

Aksel Group / J. Famularo, R. Idnani, NYCRS

UAL / n/a

The fashion company signed a 10-year lease.

215 West 83rd St

500

Avivya Clothing / J. Famularo, R. Idnani, NYCRS

n/a / Mark Tergesen, ABS Partners

The fashion company signed a lease.

Retail leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

629 West 54th St

110,000

Chrysler Group LLC / M. Kadosh, J. Nero, CBRE

The Friedland Estate / n/a

The auto dealership signed a lease for showroom space. The company will be occupying the space formerly used by Audi.

2295 Forest Ave (Brooklyn)

45,000

Harbor Freight Tools / Doug Weinstein, Sholom & Zuckerbrot

Forest Associates / R. Condren, K. Triglia, CPEX Real Estate

The tool shop signed a lease.

991 Second Ave

15,000

Petco / A. Mandell, R. Skulnik, Ripco Real Estate

n/a / J. Roseman, J. Mauer, Newmark Grubb Knight Frank

The pet store signed a lease for the entire three-story building, the New York Post reported.

1501 Pitkin Ave (Brooklyn)

10,890

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

Poko Partners LLC / Peter Levine, Charter Realty & Development

The discount store signed a lease.

8925 Avenue D (Brooklyn)

10,125

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

Acadia Trust Realty / Represented inhouse

The discount retailer signed a lease.

271 Madison Ave

10,000

FC USA Inc. / Geene Meer, NAI Friedland Realty

n/a / Robert Mehlman, Regency Realty Advisors

The parent company of Liberty Travel signed a long-term lease for the ground floor, basement and mezzanine.

837 Washington Ave (The Bronx)

8,016

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

L & M Equities / Represented in-house

The discount retailer signed a lease.

182-20 Jamaica Ave (Queens)

6,965

Advance Auto Parts / Mervin Hartman, Pliskin Realty

Calmark Properties / R. Condren, K. Triglia, CPEX Real Estate

The auto-parts retailer signed a lease.

One Dekalb Ave (Brooklyn)

6,500

A|X Armani Exchange / n/a

Acadia Realty Trust; Washington Square Partners; Aaron Malinsky; Paul Slayton / n/a

The apparel retailer signed a lease for corner space at the City Point retail project. Armani Exchange will be the development’s first tenant when it opens in November.

868 Broadway

6,225

Dr. Martens / Christopher Schwart, C&W

n/a / Andrew Epstein, Easy Street Properties

The British footwear retailer signed a long-term lease for space on the ground floor, basement and second floor.

1359 Broadway

5,500

Fresh & Co. / Jared Lack, Newmark Grubb Knight Frank

W&H Properties / Jared Lack, Newmark Grubb Knight Frank

The health food chain signed a lease for its sixth Manhattan location.

285 West Broadway

5,000

Canal Room / n/a

285 West Broadway Associates LP / Joshua Salon, Salon Realty

The live music venue signed an eight-year lease at the Brunner Building.

63 West 38th St

4,200

Parker and Quinn / James Rainey, Manhattan Commercial Group

Refinery Hotel / James Rainey, Manhattan Commercial Group

The restaurant signed a 15-year lease.

125 Fifth Ave (Brooklyn)

3,800

New York Kids Club / Gary Alterman, RKF

Three Kings LLC / R. Condren, K. Triglia, CPEX Real Estate

The children’s enrichment center signed a lease for its second location in Brooklyn and its eighth overall in New York.

430–434 West Broadway

3,600

Just Cavalli / Joel Isaacs, Isaacs & Co.

United American Land / Karen Bellantoni, RKF

The fashion retailer signed a lease for its New York City flagship, the New York Post reported.

673 Madison Ave

3,500

CORE / n/a

n/a / n/a

The boutique residential real estate brokerage signed a 10-year retail lease for space on the second and third floors of the brownstone.

386 Atlantic Ave (Brooklyn)

3,500

n/a / Murray Hill Properties

Stuart Venner / R. Condren, K. Triglia, CPEX Real Estate

A real estate firm signed a long-term lease.

418-420 Fifth Ave (Brooklyn)

3,300

Premier Care / n/a

416-424 Realty Corp. / R. Condren, K. Triglia, CPEX Real Estate

The medical center signed a lease for its sixth location in the New York metro area.

425 Park Ave South

3,000

Fresh & Co. / Albert Sultan, JTRE

n/a / William Abramson, Buchbinder & Warren

The health food chain signed a 10-year lease with a five-year option for another location. The space consists of 2,200 square feet on the ground floor and 800 square feet on the mezzanine level.

2901 White Plains Rd (The Bronx)

2,730

Allerton Glass Company / S. Kaufman, S. Lorenzo, NAI Friedland Realty

Daleber LLC / S. Kaufman, S. Lorenzo, NAI Friedland Realty

The window retailer signed a lease.

490 Fulton St (Brooklyn)

2,500

Swarovski / Robert Cohen, RKF

Crown Acquisitions; Perella Weinberg Partners Fund / Represented in-house

The crystal retailer signed a lease for its first Brooklyn location, the New York Post reported.

1030 Third Ave

2,450

Lobel’s Kitchen / G. Dana, R. Dana, A. Kramer, Prudential Douglas Elliman

The Trump Organization / Represented in-house

The butcher and prepared foods shop signed a 15-year lease at Trump Plaza for its second Manhattan location.

277 Fifth Ave

2,350

The Hair Shop / Elissa Groh, Rice & Associates

Mirsal L. / Elissa Groh, Rice & Associates

The hair salon signed a lease for second-floor retail space.

3 East 115th St

2,300

Lada Pharmacy Inc. / Shmuel Elhadad, Global Realty Opportunities

YUCO Real Estate Company / KZA Realty Group

The pharmacy signed a lease.

123 Fifth Ave

2,300

Vince Camuto / Laura Pomerantz, PBS Real Estate

The Torkian Group / G. Gropper, J. Gilbert, Newmark Grubb Knight Frank

The shoe company signed a lease for another store. The asking rent was $275 per square foot, according to the paper.

1462 Second Ave

2,000

The Meatball Shop / R. Braha, JTRE

The Daten Group / n/a

The eatery signed a lease for its fifth New York location.

242 West 14th St

1,800

Wines and Liquors / M. Esposito, R. Bergman, NY Retail Group

240-242 LLC / M. Esposito, R. Bergman, NY Retail Group

The liquor store signed a 12-year lease.

1126 Third Ave

1,700

L’Occitane / Chris DeCrosta, Crown Retail Services

n/a / Jason Maurer, Newmark Grubb Knight Frank

The health and beauty products retailer signed a lease.

311 West Broadway

1,500

Pamela Gonzales / R. Idnani, J. Famularo, NYCRS

United American Land / n/a

The fashion retailer signed a 10-year lease. The asking rent was $150 per square foot, the New York Post reported.

101 Seventh Ave South

1,500

House of Cupcakes / Jerry Welkis, Welco Realty

Linda Libock / R. Condren, K. Triglia, CPEX Real Estate

The cupcake shop signed a lease. The reported asking rent was $150 per square foot.

615 Manhattan Ave (Brooklyn)

1,500

High End Brewery & Tapas Bar / n/a

n/a / Jordan Malken, N.C. Pepe Corp. Real Estate

The bar signed a lease. The reported asking rent was $64 per square foot.

84 Orchard St

1,500

Artifact Gallery / Earl Bateman, Rice & Associates

Citrich Realty Corp. / Shane Davis, Steven Kamali

The art gallery signed a lease.

288 Atlantic Ave (Brooklyn)

1,400

SUPRA / M. Yadgard, N. Mastrangelo, Maxwelle NY

Stuart Venner / R. Condren, K. Triglia, CPEX Real Estate

The shoe retailer signed a lease for its first Brooklyn location.

92 November 2012 www.TheRealDeal.com

www

Retail leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

2159 Broadway

1,400

L’Occitane / Chris DeCrosta, Crown Retail Services

n/a / Steven Soutendjik, C&W

The health and beauty products retailer signed a lease.

4918 Church Ave (Brooklyn)

1,400

Boost Mobile / n/a

n/a / W. O’Brien, K. Cohen, M.C. O’Brien

The mobile communications retailer signed a long-term lease for another location.

251 Fifth Ave

1,300

Comebuy / James Rainey, Manhattan Commercial Group

n/a / Bullaro Properties

The bubble tea shop signed a 10-year lease.

29 West 8th St

1,293

n/a / n/a

n/a / Brendan Gotch, Massey Knakal

The tenant signed a lease.

47 Fifth Ave (Brooklyn)

1,250

Duke of Montrose / May Lu, M Properties Group

Bergen LLC / R. Condren, K. Triglia, CPEX Real Estate

The bar signed a lease. The reported asking rent was $145 per square foot.

1649 Park Ave

1,200

n/a / n/a

n/a / D. Chkeidze, L. Kimyagarov, Massey Knakal

A pizzeria signed a 15-year lease.

550 Nostrand Ave (Brooklyn)

1,200

Boost Mobile / n/a

n/a / W. O’Brien, K. Cohen, M.C. O’Brien

The mobile communications retailer signed a long-term lease for another location.

1590 Lexington Ave

1,100

Rosenthal Wine Merchant / M. Esposito, R. Bergman, NY Retail Group

P&G Lex / M. Esposito, R. Bergman, NY Retail Group

The wine retailer signed a lease. The tenant is moving from its East 84th Street location.

1094–1112 Madison Ave

1,040

LUMAS Galleries / Jill Lovatt, Massey Knakal

n/a / F. Consolo, J. Aquino, Prudential Douglas Elliman

The art gallery signed a 10-year lease, the New York Post reported. The asking rent was $525 per square foot, according to the paper.

152 East 118th St

1,019

Triumph Physical Therapy / n/a

The Bluestone Organization / New Street Realty Advisors

The physical therapy office signed a lease for ground-floor retail space.

167 West 81st St

1,000

BookNook / Ravi Idnani, NYCRS

n/a / James Famularo, NYCRS

The Children’s learning center signed a 10-year lease.

641 10th Ave

1,000

Hell’s Chicken / Olga Ousmanova, Square Foot Realty

Giaimo & Giaimo / A. Gavios, H. Aaron, Square Foot Realty

The Asian fried chicken restaurant signed a 10-year lease for its first location, Crain’s reported. The asking rent was $110 per square foot, according to the news site.

643 Second Ave

1,000

The Uniform Store / M. Esposito, R. Bergman, NY Retail Group

636 Assets / M. Esposito, R. Bergman, NY Retail Group

The hospital uniform specialty store signed a 10-year lease.

1501 Pitkin Ave (Brooklyn)

989

Subway / n/a

n/a / Charter Realty & Development

The sandwich chain signed a lease.

186 Ninth Ave

950

Enoteca Pastai / Alex Hall, Winick Realty

n/a / William Abramson, Buchbinder & Warren

The Italian restaurant signed a 12-year lease to open its second location in Chelsea.

3836 Dyre Ave (The Bronx)

800

Foodz to Go / Elliott Dweck, Besen Retail

3830 Jeromi LLC / Matt Mager, Besen Retail

The restaurant signed a lease to relocate from a block away.

379 Third Ave

730

Fuel Grill & Juice Bar / R. Idnani, J. Famularo, NYCRS

n/a / D. Satterwhite, W. Abramson, Buchbinder & Warren

The restaurant signed a 10-year lease for its fourth Manhattan location.

78 Fifth Ave (Brooklyn)

700

Eddies Barber Shop / Michael Esposito, NY Retail Group

78 Fifth LLC / Michael Esposito, NY Retail Group

The barber shop signed a lease for a new location.

1590 Lexington Ave

600

All Washed Up / M. Esposito, R. Bergman, NY Retail Group

P&G Lex / M. Esposito, R. Bergman, NY Retail Group

The laundry pick-up service provider signed an 11-year lease for another location.

856 Nostrand Ave (Brooklyn)

500

Boost Mobile / n/a

n/a / W. O’Brien, K. Cohen, M.C. O’Brien

The mobile communications retailer signed a long-term lease for another location.

2655 Frederick Douglass Blvd

500

Lassine Diaby / M. Mager, K. Schunk, Besen Retail

Castellan Real Estate Partners / M. Mager, K. Schunk, Besen Retail

The income tax office signed a lease.

253 East 78th St

400

Simply the Best Clothing / n/a

n/a / Jill Lovatt, Massey Knakal

The apparel store signed a lease.

252 Mott St

400

Wendy Nichol / J. Famularo, R. Idnani, NYCRS

n/a / Alexa Baumol, Sinvin Realty

The tenant signed a lease.

1371 First Ave

320

Bark Place / n/a

n/a / Jill Lovatt, Massey Knakal

The dog spa signed a lease.

Buys Address

Size

Buyer / Representative

Seller / Representative

Notes

790 Seventh Ave

665-room hotel

Rockpoint Group; Goldman Sachs Real Estate Principal Investment Area; Highgate Holdings / n/a

Starwood Hotels & Resorts / n/a

The Manhattan at Times Square Hotel sold for $275 million, the New York Observer reported.

635 and 641 Sixth Ave

2 office bldgs, 267,000 sf total

SL Green / n/a

Atlas Capital Group / n/a

The two buildings sold for $173 million, or $648 per square foot. The 635 Sixth address was previously home to Apex Technical School, and 641 Sixth has tenants such as Google.

86 Trinity Pl and 22 Thames St

Office bldg and development site

Fisher Brothers / n/a

Michael Steinhardt; Allan Fried / n/a

The former home of the American Stock Exchange and a neighboring development site sold for $150 million. The sellers acquired the properties in February 2011, paying $17 million for 86 Trinity Place and $48 million for 22 Thames Street. They had planned to develop a hotel and a residential building on the site.

386 Park Ave South

270,000 sf office bldg

William Macklowe Co.; Principal Real Estate Investors / n/a

Savanna; Monday Properties / Eastdil Secured

The property traded for a price in the range of $110 million to $113 million, according to the New York Post. The buyers plan to renovate the base of the building, with a new lower façade, entrance and lobby, and will have pre-built spaces from 11,000 to 15,000 square feet, the paper said.

125 Maiden Ln

18,200 sf office condo

SCPG Property / n/a

Empire State Development Corporation / Michael Rudder, Rudder Property Group

The 14th-floor office condo sold for $61.5 million, the New York Observer reported.

425 Third Ave

66,103 sf apt. bldg, 101 units total

Benchmark Real Estate Group LLC / n/a

n/a / n/a

The property sold for $44 million. The price represents a capitalization rate of 5 percent.

509 Fifth Ave

60,000 sf office bldg

Chabad; Jeff Sutton; Aurora Capital; Alex Adjmi / n/a

Norman Sturner / B. Ezratty, P. Hauspurg, Eastern Consolidated

The property sold for $39.75 million, the New York Post reported. The buyers acquired the building as a tenants-in-common entity, a form of joint ownership of property. The group plans to redevelop the building into a Class A office and retail property after current tenant Israeli Discount Bank’s lease for the upper nine floors runs out at the end of the year, according to the paper.

100 Vandam St

40,435 sf loft bldg

n/a / n/a

n/a / J. Nelson, R. Burton, Massey Knakal

The property sold for $27.5 million. The site is being marketed as a redevelopment opportunity.

541–545 West 37th St and 540–548 West 38th St

Development site

Joe Chetrit / n/a

Fortress / Robert Knakal, Massey Knakal

The four industrial lots sold for $26.5 million, the New York Post reported. The buyer plans to develop a hotel with residences above at the site, which can be developed to 373,275 square feet through the use of bonus air rights, according to the paper.

www.TheRealDeal.com November 2012 93

Buys continued Address

Size

Buyer/ Representative

Seller / Representative

Notes

494 Broadway

4-story, 9,200 sf office bldg

Thor Equities; Jenel Management / n/a

Premier Equities / n/a

The commercial building sold for $22 million. Thor Equities will own 89 percent of the property, while Jenel Management will own 11 percent. Premier Equities acquired the building in October 2004 for $6.1 million.

115 East 97th St

15,137 sf development site

Marymount School of New York / T. Sheehan, E. Midgley, D. Kaplan, CBRE

1625 West LLC / P. Wolf, S. Powers, Denham Wolf Real Estate

The lot sold for $21 million. The school plans to build its future campus on the site. It will be used as playing fields for its 677 students in the meantime.

94 Willoughby St and 383 Bridge St (Brooklyn)

Development site

AvalonBay Communities / n/a

United American Land / n/a

The two three-story buildings with more than 42,000 square feet of development rights sold for $17.6 million. The acquisition will allow AvalonBay Communities to build an 861-unit rental apartment building, which, when completed, is expected to be the tallest residential tower in Brooklyn.

180 10th Ave

Conference center bldg

The Brodsky Organization / n/a

General Theological Seminary / n/a

The Desmond Tutu Conference Center sold for $16 million, Curbed reported.

41-06 Delong St (Queens)

96,000 sf development site

Storage Deluxe / Theo Kontis, Harvest International

Delong Realty Company / Theo Kontis, Harvest International

The parcel sold for $14.3 million, Crain’s reported. The buyer plans to develop a seven-story storage facility with 160,000 square feet of storage space and more than 26,000 square feet on the ground floor for retail space or industrial-flex-use space, according to the news site.

9720 Kings Highway (Brooklyn)

6-story, 113,398 sf apt. bldg, 118 units total

Local investors / Joseph Landau, GFI Realty

n/a / Josh Orlander, GFI Realty

The property sold for $11.1 million.

139 Emerson Pl (Brooklyn)

6-story, 50,000 sf apt. bldg, 50 units total

n/a / n/a

n/a / S. Palmese, W. Clifford, Massey Knakal

The affordable housing building sold for $11 million, or $274 per square foot. The price represents a capitalization rate of 6.7 percent.

58 Washington Sq South

10,000 sf institutional space

Archdiocese of New York / n/a

New York University / n/a

The institutional space within the five-story, 92,000-square-foot building sold for $10 million, the New York Observer reported.

Brooklyn portfolio

6 apt. bldgs, 84 units total

n/a / Marcel Fridman, Barcel Group

The package sold for $9.9 million. The price represents a gross rent multiple of 8.5. The buildings are located a 608–612 Flatbush Avenue, 2210 Cortelyou Avenue, 1016 President Street and 219 East 17th Street.

8300 Fourth Ave (Brooklyn)

6-story, 50,000 sf apt. bldg, 68 units total

n/a / Jake Blatter, Rosewood Realty

8300 Fourth Avenue LLC / Aaron Jungreis, Rosewood Realty

The elevator building sold for $9 million.

350 East Houston St

43,000 buildable sf development site

n/a / n/a

The Seiden family / Alen Horn, HPNY

The 6,000-square-foot lot sold for $8 million.

440–450 Audubon Ave

68-unit apt. bldg

Mont York Associates LP; Quantum Equities / Yitzie Pretter, Quantum Equities

Blair Ventures LLC / P. Von Der Ahe, S. Edelstein, S. Glasser, Marcus & Millichap

The distressed property sold for $7.81 million. In addition to the residential units, the building has three commercial spaces.

1444 Third Ave and 176-178 East 82nd St

26,050 buildable sf development site

n/a / Iris Rossano, Besen & Associates

n/a / A. Tayar, O. Hazan, Besen & Associates

The two buildings sold for $7.5 million, or $288 per buildable square foot.

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Buys continued Address

Size

Buyer/ Representative

Seller / Representative

Notes

385 McDonald Ave (Brooklyn)

4-story, 51,521 sf bldg

n/a / n/a

The Lightstone Group / TerraCRG

The property sold for $7.4 million, or $144 per square foot. The price represents a capitalization rate of 8.3 percent.

161–165 East 179th St (The Bronx)

6-story apt. bldg, 83 units total

Morgan Group / Aaron Jungreis, Rosewood Realty

161-165 East 179th Street / Aaron Jungreis, Rosewood Realty

The elevator building sold for $7.3 million.

199–12 112th Ave (Queens)

3-story, 52,300 sf institutional bldg

New York City School Construction Authority / n/a

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

The property sold for $6.8 million. The building was most recently leased to New Chapter Academy, an independent religious school. The city’s School Construction Authority will return the property to its original use as a school.

494–504 Sterling Pl (Brooklyn)

Development site

500 Sterling Investors LLC / n/a

n/a / Ofer Cohen, TerraCRG

The property sold for $6.8 million, or $157 per buildable square foot.

2121 Matthews Ave (The Bronx)

7-story, 56,000 sf apt. bldg, 62 units total

212 Matthews LLC / Aaron Jungreis, Rosewood Realty

DSEB LLC / Aaron Jungreis, Rosewood Realty

The elevator building sold for $6.8 million.

915–919 Second Ave

6,700 sf retail condo

n/a / n/a

n/a / J. Nelson, C. Olsen, Massey Knakal

The second-floor retail condo sold for $6.25 million, or $934 per square foot. The price for the retail space, located at the Alexander Condominium, represents a capitalization rate of 7.4 percent.

2288 Mott Ave (Queens)

6-story, 51,000 sf apt. bldg, 60 units total

n/a / Ben Weiss, Besen & Associates

n/a / Lev Mavashev, Besen & Associates

The elevator building sold for $5.9 million, or $116 per square foot. The price represents a capitalization rate of 7.6 percent and a gross rent multiple of 7.6.

30–25 Northern Blvd (Queens)

Vacant lot

Storage Deluxe / n/a

Margaret and Terence P. Toal / Steven Hornstock, ABS Partners

The lot sold for $5.75 million. The buyer plans to redevelop the site, current leased to a parking lot operator, into a 110,000-square-foot storage facility with 2,000 units of storage space.

239 Mulberry St

2 apt. bldgs, 16 units total

239 Mulberry LLC / Inbal Himelblau, Eastern Consolidated

YF Family Ventures LLC / R. Ortiz, G. Saffioti, Eastern Consolidated

The property sold for $4.6 million.

3136 Perry Ave

6-story, 50,000 sf apt. bldg, 48 units total

The Morgan Group / Aaron Jungreis, Rosewood Realty

3136 Perry Avenue / Aaron Jungreis, Rosewood Realty

The elevator building sold for $4.5 million.

109 Madison St

6-story, 9,480 sf apt. bldg, 22 units total

Local investor / Roni Abudi, GFI Realty

Harling Chan / Jeremy Curtin, GFI Realty

The walk-up property sold for $4.5 million.

546 West 29th St

2-story retail bldg

546 West 29th Highline Group / Yaron, Zohar, Zohar Properties

Doy & P Holding LLC / Yaron, Zohar, Zohar Properties

The property sold for $4.2 million.

182 Flatbush Ave (Brooklyn)

3-story, 4,790 sf retail bldg

Redsky Capital LLC / n/a

n/a / n/a

The Triangle Sports building sold for $4.1 million, or $911 per square foot. Triangle Sports has occupied the property since 1914.

815 West 180th St

5-story, 23,400 sf apt. bldg, 25 units total

Tal Realty / L. Sternhell, P. Vanderpool, Cignature Realty Associates

IB West 180 LLC / L. Sternhell, P. Vanderpool, Cignature Realty Associates

The walk-up building sold for $3.97 million. The price represents a gross rent multiple of 10.

East Village package

Development site

Rash LLC / Tamir Daniel, Daniel T Enterprises

n/a / n/a

The package of lots sold for $3.6 million. The properties are located at 55 Avenue D and 746 and 748 East 5th Street.

350 East 19th St

5-story, 4,975 sf apt. bldg, 8 units total

n/a / Lily Ren, Friedman-Roth Realty

n/a / E. Lupo, J. Mann, Friedman-Roth Realty

The walk-up building sold for $3 million.

16 Dean St (Brooklyn)

4-story, 7,624 sf apt. bldg, 16 units total

n/a / O. Cohen, M. DiBella, P. Matheos, M. Hernandez, A. Hess, J. Colleran, TerraCRG

16 Dean St Realty Corp / O. Cohen, M. DiBella, P. Matheos, M. Hernandez, A. Hess, J. Colleran, TerraCRG

The property sold for $2.65 million, or $348 per square foot. The price represents a capitalization rate of 5.9 percent.

238 8th St (Brooklyn)

4-story, 6,400 sf apt. bldg, 8 units total

n/a / n/a

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

The walk-up building sold for about $1.8 million. The price represents a capitalization rate of 5.8 percent.

34–21 37th St (Queens)

4-story apt. bldg, 8 units total

Blue Sky Entity LLC / n/a

34–21 37th Street LLC / Falco Isak Realty

The property sold for $1.75 million, or $194 per square foot. The price represents a capitalization rate of 5.8 percent and a gross rent multiple of 11.2.

2486 Morris Ave (The Bronx)

5-story, 16,145 sf apt. bldg, 21 units total

n/a / Amit Doshi, Besen & Associates

The walk-up building sold for $1.65 million, or $102 per square foot. The price represents a capitalization rate of 8.9 percent and a gross rent multiple of 5.6.

1280 Dekalb Ave (Brooklyn)

36,000 sf development site

Tab Max LLC / n/a

Santiago Distributors Inc. / Joe Ibrahim, Right Time Realty

The property sold for $1.57 million.

160 West 141st St

14-unit apt. bldg

n/a / Bart Zimmerman, Barcel Group

The property sold for $1.35 million. The price represents a gross rent multiple of 8.5.

941–953 Longfellow Ave (The Bronx)

Industrial bldg

n/a / n/a

n/a / Nick Burns, Massey Knakal

The property sold for $1.21 million, or $68 per square foot.

386 and 388 Harman St (Brooklyn)

2 apt. bldgs, 12 units total

Local investor / n/a

n/a / W. O’Brien, K. Cohen, M.C. O’Brien

The multi-family properties sold for $1.1 million.

Financing Address

Size

Borrower / Representative

Lender / Representative

Notes

50 East 69th St

Medical bldg

n/a / n/a

n/a / Morris Betesh, Massey Knakal

An $8 million non-recourse loan was provided to refinance an existing balance of about $6.5 million. The loan was provided at a fixed rate of 3 percent for ten years, with the first two years interest only. Excess proceeds from the loan were used to invest in new equipment and general building upgrades.

419 East 57th St

91-unit apt. bldg

419 Apartment Corp. / n/a

NCB / n/a

A $5.8 million first mortgage and a $500,000 line of credit were arranged for the building.

83–33 Austin St (Queens)

105-unit apt. bldg

83–33 Gardens Corp. / n/a

NCB / n/a

A $4.4 million first mortgage and a $500,000 line of credit were arranged for the building.

110¬20 71st Rd (Queens)

179-unit apt. bldg

110–20 71st Road Apartments Inc. / n/a

NCB / n/a

A $4.8 million first mortgage was arranged for the building.

3260 Cruger Ave (The Bronx)

99-unit apt. bldg

Oak Drive Mutual Housing Co. Inc. / n/a

NCB / n/a

A $3.8 million first mortgage and a $500,000 line of credit were arranged for the building.

1165 Park Ave

57-unit apt. bldg

1165 Park Avenue Inc. / n/a

NCB / n/a

A $3.4 million first mortgage and a $500,000 line of credit were arranged for the building.

84–49 168th St (Queens)

119-unit apt. bldg

84–49 Owners Corp. / n/a

NCB / n/a

A $3.8 million first mortgage was arranged for the building.

96 November 2012 www.TheRealDeal.com

The Real Deal Ad (Oct).pdf

CMY

9/28/12

4:07 PM

Financing continued Address

Size

Borrower / Representative

Lender / Representative

Notes

20 East 74th St

102-unit apt. bldg

20 East 74th Street Inc. / n/a

NCB / n/a

A $3.2 million first mortgage and a $500,000 line of credit were arranged for the building.

37–16/20 83rd St (Queens)

83-unit apt. bldg

Windsor Equities Owners Inc. / n/a

NCB / n/a

$2.3 million first mortgage and a $250,000 line of credit were arranged for the building.

2530 Independence Ave (The Bronx)

68-unit apt. bldg

2530 Independence Avenue Owners Corp. / n/a

NCB / n/a

A $1.6 million first mortgage and two lines of credit, for $500,000 and $400,000, were arranged for the building.

20–40 89th St (Brooklyn)

73-unit apt. bldg

Verrazano Residents Inc. / n/a

NCB / n/a

A $2.3 million first mortgage was arranged for the building.

36 West 35th St

36-unit apt. bldg

36 West 35th Apartment Corp. / n/a

NCB / n/a

A $1.5 million first mortgage and a $200,000 line of credit were arranged for the building.

327 West 83rd St

24-unit apt. bldg

325 West 83 Owners Corp. / n/a

NCB / n/a

A $1.3 million first mortgage and a $250,000 line of credit were arranged for the building.

3636 Greystone Ave (The Bronx)

91-unit apt. bldg

3636 Greystone Owners Inc. / n/a

NCB / n/a

A $1.3 million line of credit was arranged for the building.

234 West 16th St

20-unit apt. bldg

236 West 16th Street Owners Corp. / n/a

NCB / n/a

A $900,000 first mortgage and a $200,000 line of credit were arranged for the building.

4–10 Bogardus Pl

35-unit apt. bldg

4–10 Bogardus Corp. / n/a

NCB / n/a

An $800,000 first mortgage and a $250,000 line of credit were arranged for the building.

221 East 50th St

47-unit apt. bldg

221 East 50th Street Owners Inc. / n/a

NCB / n/a

An $800,000 first mortgage and a $200,000 line of credit were arranged for the building.

Other Deals Investor group closes on 701 Seventh Avenue, considers hotel for site

Chinese firm picks up large Williamsburg development site in first-of-its-kind deal

A venture between Steven Witkoff and Michael Ashner has purchased 701 Seventh Avenue in Times Square, Businessweek reported. The investor group bought the property for $375 million, or about $430 million after closing costs and other expenses, Witkoff told Bloomberg News last month. The venture, which also includes Miami-based investment partner the Vector Group, aims to replace the two existing buildings, totaling 120,000 square feet, with “85,000 square feet of prime retail space and 24,000 square feet of LED signage,” according to Michaels’ release. The partnership is being led by a Vector-owned entity named New Valley LLC. (The deal was announced after the deadline for the Deal Sheet.)

A Chinese company purchased a Brooklyn development site in a $54.2 million deal last month that represents a first of its kind by a Chinese firm in the U.S., Businessweek reported. The Beijing-based developer, Xinyuan Real Estate, took control of the 2-acre site at 421 Kent Avenue in Williamsburg last month — the first time a Chinese company has bought a U.S. development site planned for more than a few units, according to data from Real Capital Analytics cited by Businessweek. The site had been slated for 216 condo units and marketed to Hasidic Jewish families before the acquisition. It is unclear whether Xinyuan will stick to the original site plans or present new designs. (The deal was announced after the deadline for the Deal Sheet.)

Inside the St. Regis, retail condo trades for $375M

432 Park project lands $400 million loan from charitable fund

A 24,800-square-foot retail condominium at the St. Regis hotel has traded for $375 million, more than triple what it last sold for in 2009, Real Estate Alert reported. Swiss luxury retailer Richemont bought the space from a partnership that includes Crown Acquisitions, the Feil Organization and Goldman Properties, Real Estate Alert said. The price represents a value of more than $15,000 per square foot. The space, on Fifth Avenue near 55th Street, is currently occupied by retailers such as South African diamond purveyor DeBeers and Italian leather goods retailer Bottega Veneta. Globe Street surmised that Richemont, parent company of rival diamond seller Van Cleef and Arpels, intends to open a retail store in part or all of the space once the leases are up. (The deal was announced after the deadline for the Deal Sheet.)

A plan to build the tallest residential tower in the United States, at 432 Park Avenue — with an estimated price tag of $1.25 billion — last month scored an important financial backer. The Children’s Investment Fund Foundation, famous for donating a portion of its profits to charity, will lend $400 million to Los Angeles–based real estate investors CIM Group and Harry Macklowe, the project’s developers, according to the Wall Street Journal. When completed, the Rafael Vinoly–designed project, dubbed 432 Park, will rise 1,395 feet in Midtown Manhattan. (The deal was announced after the deadline for the Deal Sheet.)

With $110M deal, Taconic bets on Far West Side The Far West Side above 50th Street has been somewhat overlooked by investors, but Taconic Investment Partners is betting on its success with the $110 million acquisition of an office building at 619 West 54th Street, the New York Observer reported. The 326,000-square-foot deal between Taconic and seller KBS Realty Advisors closed Oct. 17. It was handled by a sales team at Jones Lang LaSalle led by vice chairman Richard Baxter. “Go all the way up the West Side,” Paul Pariser, Taconic’s co-CEO with Charles Bendit, said. “Tribeca is fabulous, Hudson Square is great, the Meatpacking District and Chelsea are booming, then there is the High Line and Hudson Yards, and north of that there has been tons of residential development.” (The deal was announced after the deadline for the Deal Sheet.) 98 November 2012 www.TheRealDeal.com

Tribeca development site trades for $22M The Tribeca land where Fishman Holdings had planned to build a luxury hotel sold for $22 million to Charles Blaichman’s CB Developers, records filed last month with the city show. The site will be redeveloped as condominiums, according to the seller. After struggles with Landmarks Preservation Commission approvals, plans for 24 condo units were approved in August, according to records filed with the Department of Buildings. CB Developers will move ahead with the development as Fishman planned it, Fishman executive vice president Yehuda Mor said. (The deal was announced after the deadline for the Deal Sheet.)

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Alfa Development buys Chelsea site for $14.7M Flatiron-based Alfa Development paid $14.65 million for a once-stalled Chelsea development site two blocks from the Meatpacking District, the seller’s broker told The Real Deal last month. The price is approximately twice the $7.5

million the seller paid to purchase the defaulted note about a year and a half earlier. Alfa bought the site at 245 West 14th Street, between Eighth and Ninth avenues, Oct. 18, from an investment group led by developer Offir Naim, his broker, David Behin, president of investment sales at brokerage MNS, said. The site is a vacant lot with a partial foundation, and has about 30,895 square feet of development rights, data from PropertyShark.com shows. (The deal was announced after the deadline for the Deal Sheet.)

Goulston & Storrs inks deal for former Bernard Madoff space International law firm Goulston & Storrs inked a 19,270-square-foot deal last month for a floor located inside the Lipstick Building that has a bit of a past. The New York Observer reported that the 18th floor, which the firm will occupy, previously served as the computer and filing floor for Bernard Madoff ’s massive Ponzi scheme. The owners of the property — located at 885 Third Avenue — made a push to rent out the building’s empty spaces with a $15 million infusion in new capital and a lobby redesign. (The deal was announced after the deadline for the Deal Sheet.)

Related nabs $400M financing for Hudson Yards office tower Related Companies reached a preliminary agreement last month to get roughly $400 million in construction financing for a Hudson Yards office tower, Crain’s reported. The lenders include Bank of America and JP Morgan Chase. The loan is considered the last hurdle in developing the 1.7 million-square-foot tower, which will kick off the Hudson Yards project with luxury goods retailer Coach as an anchor tenant. The building does not have an address yet, but it will be located at 30th Street and 10th Avenue. (The deal was announced after the deadline for the Deal Sheet.)

Montefiore inks lease for 280K feet at Simone’s Bronx development Montefiore Medical Center reached an agreement with owner and developer Simone Development to build out and occupy a new, 11-story tower in the Bronx, according to a statement last month from Simone. The 280,000-squarefoot building will be part of Simone’s Hutchinson Metro Center and should be complete by the third quarter of 2014, according to the statement. The new tower will include an ambulatory surgery center, an advanced imaging center, an onsite laboratory and pharmacy, and primary and specialty care practices, the statement said. (The deal was announced after the deadline for the Deal Sheet.) TRD

Thor Equities

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New York 25 W. 39th Street New York, NY 10018 +1 (212) 529-5055

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Development upDates CONSTRUCTION UPDATE

SALES UPDATE

211 East 13th Street Construction has started on the 83-unit, eight-story residential condo conversion. The development will offer one-, twoand three-bedroom apartments ranging from 500 square feet to 1,880 square feet. Amenities will include a 24-hour attended lobby, residents’ and business lounges, a fitness room and a library. The developers are Ironstate Development Company, Abe Shnay, Scott Shnay and Charles Blaichman. The Marketing Directors is the agent. Contact: www .themarketingdirectorsinc.com.

2280 FDB 2280 Frederick Douglass Boulevard The 89-unit condominium is now 90 percent sold. Remaining homes at the 12-story development include two- and three-bed2280 Frederick Douglass Boulevard room units as well as two penthouses with private outdoor spaces. Pricing begins at $1.12 million. Amenities include a roof deck with fireplace and children’s play area, 24-hour doorman services, on-site parking, outdoor recreation space and a garden terrace. RGS Holdings is the developer. MNS is the agent. Contact: www.2280fdb.com.

East Village

GROW. WISELY. EisnerAmper’s Real Estate Services Group provides a wide array of audit, tax and advisory services to the real estate community, including REITs and real estate opportunity funds. Our goal is to help our clients structure sound transactions and examine each aspect of operations to help maximize potential returns and build future success. And as a leading service provider for financial service companies as well as family offices, EisnerAmper is uniquely positioned to create synergies that help our real estate clients grow their businesses. TM

Let’s get down to business.

. J.D., LLM Kenneth Weissenberg, CPA, Partner 212.891.4070 kenneth.weissenberg@eisneramper.com

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Aaron Kaiser, CPA Partner 212.891.8084 aaron.kaiser@eisneramper.com

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Riverdale Fieldston Lofts 3751 Riverdale Avenue Construction is complete at the new 10unit condominium and a certificate of occupancy is now in place, with moveins slated to begin by the end of 2012. Available apartments in the seven-story building include three- and four-bedroom homes ranging in size from 1,849 to 2,164 square feet and priced from $899,000 to $1.059 million. Amenities include on-site indoor parking, private storage units, a common roof deck and a virtual doorman. The developer is Builders New York Holdings IV LLC. Halstead Property Development Marketing is the agent. Contact: www.fieldstonlofts.com.

Williamsburg 487 Keap Street Construction is underway at the 51-unit rental building, an adaptive reuse of an abandoned factory building by Design AIDD Architects. The Chetrit Group is the developer. Construction is slated to finish in early 2013. The six-story building will offer studios sized from 500 square feet, one-bedrooms starting at 795 square feet and two-bedrooms starting at 944 square feet. Amenities will include a landscaped roof terrace, fitness center, tenant storage bins, bicycle storage room and 36 on-site parking spaces. aptsandlofts.com is the agent. Contact: www.aptsandlofts.com.

Harlem

Long Island City The Industry LIC 21-45 44th Drive The 75-unit condominium is now sold out. Developed by brothers Alan Suna and Stuart Match Suna, the building has a mix of studios and one-, two- and three-bedroom units. Amenities include a rooftop terrace, courtyard, fitness center and an attended lobby. Modern Spaces is the agent. Contact: www.theindustrylic.com.

Upper East Side 200 East 79th Street Sales have launched at Skyline Developers’ 39-unit condominium. Designed by the architecture and interior design firm CetraRuddy, units at the 19-story project range from 1,920-square-foot three-bed200 East 79th Street

LEASING UPDATE

Long Island City

Happy Holidays from JOSHUA STEIN PLLC www.joshuastein.com

4615 Center Boulevard The 367-unit rental building is now fully leased, after starting rentals in March. One of six buildings at TF Cornerstone’s East Coast project, the 41-story building is comprised of studios and oneand two-bedroom apartments ranging in size from 515 to 1,295 square feet. Monthly rents start at $2,265 for studios, $2,730 for one-bedrooms and $3,620 for two-bedrooms. Contact: www .eastcoastlic.com.

rooms to 5,100-square-foot five-bedroom penthouses. Homes range in price from just under $3 million to over $14 million. Amenities include a fitness center and residents’ lounge. Occupancy is slated for the third quarter of 2013. Stribling Marketing Associates is the agent. Contact: www.200e79.com. Compiled by Andrea Cetra

www.TheRealDeal.com 100 November 2012 www.TheRealDeal.com

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A D V I S O R Y

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RESIDENTIAL DEALS Midtown East $2.35 million 250 East 53rd Street, Apt. 2401 Two-bedroom, 2.5-bath, 1,560 sf condo in the Veneto; unit has hardwood floors, washer/dryer, marble bath; building has doorman, concierge; common charges $1,462 per month; taxes $369 per month; asking price $2.49 million; 15 weeks on the market. (Brokers: Joan Brothers, Manhattan Global Properties; John Carapella and Rory Nichols, Town Residential) “My colleague and I had a listing at 80 Park Avenue — it was one of those apartments where we had multiple offers within the week. That’s how I met the buyer. It didn’t work out with that transaction, but he ended up working with us. His focus initially was on condos, and we looked all over Midtown. He wanted to stay close to the 42nd Street area, so 53rd Street was not too big a compromise. It had as much space as he wanted — a 32-foot living room and views from every room. [The transaction was] all cash, so financing was not an issue. He is from Hong Kong originally. It was a quick turnaround — offer accepted, and three weeks later it closed. The seller had bought the apartment as an investment property and it had been rented to the same tenant since it was built. We had to go up in budget to get what we were really looking for. Ultimately, the price per square foot was similar [to what he initially wanted at 80 Park]. It was an older building, but the apartment had been renovated.” John Carapella, Town Residential

CMY

Park Slope $465,000 556-558 Fifth Avenue, Apt. 3A

One-bedroom, two-bath, 700 sf prewar condo with elevator and roof deck; unit has eat-in kitchen and hardwood floors; common charges $275 per month; asking price $469,000; six weeks on the market. (Brokers: Shantal Cooper, A.C. Lawrence, and Katherine Barron, A.C. Lawrence. The brokers represented both the buyer and seller.) 102 November 2012 www.TheRealDeal.com

“I got the listing from one of my colleagues. At the first open house, we had 25 groups waiting outside. We had some offers on the table and decided on one at $465,000 — the buyer was a dentist and owned a bar on the corner. … There were a lot of issues with the financing. He was closing on his house in Bay Ridge and he never told us [that his financing] was contingent on selling the other house. The contract took five or six weeks to get signed, and in the meantime, we had higher cash offers, but these sellers were very ethical and said, ‘You know, we will give this guy some time.’ [The buyer] had used Wells Fargo in the past, so he thought he would have no trouble with financing, but he did. The mortgage broker kept saying, ‘Trust me, trust me.’ The buyer liked the location because his bar was down the block. The numbers worked out really well because there was no condo in the area that was [at his price point].” Shantal Cooper, A.C. Lawrence

Greenwich Village $330,000 24 Cornelia Street, Apt. 1

A 320-square-foot studio in a prewar co-op; building has live-in super, courtyard, bike storage; unit has high ceilings, fireplace; maintenance $733 per month; asking price $335,000; 36 weeks on the market. (Brokers: Stephen Dore, Bond New York; Philip Tabor, Prudential Douglas Elliman) “I represented the seller. It was a referral through my sister-in-law. It’s very small — 350 square feet tops. It had an old kitchen, this eating counter, which made the living space even smaller, and they [originally] had an agent who just was not proactive. So they renovated the apartment, after which I got the listing. But it was still on the market for about six months — the size just did not work for some people. We listed it at $340,000 and thought we might be stretching ... but the market seemed to be improving, and we ended up closing at $330,000. The buyer made the offer on a Wednesday and had required that the contract be executed by a Friday. We got the package together really fast, but the board took three or four weeks to get back to us. [The buyer] had wanted to move toward the beginning of September. We just closed this week; she moved in [Oct. 19].” Stephen Dore, Bond New York

Interviews by Guelda Voien

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World Trade Center from page 46 to data from Jones Lang LaSalle. Another factor that could help boost the Downtown market is interest from foreign firms like Beijing Vantone Industrial Company — the Chinese real estate investment firm that signed for floors 64 through 69 at One World Trade in 2009 — brokers said. The Trade Centers and Wall Street hold cachet for them because of their international recognition. Chinese firms “still think Wall Street is Wall Street,” said Hrobsky, referring to an assumption that the actual Downtown street and the financial services industry are synonymous.

Hurry up and wait

TAKE YOUR PLACE IN THE FUTURE OF NYC REAL ESTATE.

NOW HIRING AGENTS, MANAGERS,

Still, leasing Downtown is generally in a holding pattern. Sources say some tenants are waiting for the retail Downtown to bloom and for the construction at the Fulton Street Transit Center and at the World Trade Center site to be completed. Plus, the vacancy rate Downtown is set to double by 2015, as Merrill Lynch vacates 1.9 million square feet at the World Financial Center, 4 World Trade Center adds 1.2 million square feet of space to the market and One World Trade tries to lease up its remaining 1.1 million square feet. But brokers say that when the retail — promised at spaces like the nearby World Financial Center, where popular grocery story Fairway Market is rumored to be poking around — comes online, the region will be transformed. “If you bring restaurants, hotels and good retail, you create an environment where companies want to bring their employees,” said Cassidy Turley’s Stephen Bellwood. “I’m certainly drinking the Kool-Aid.” TRD

Harney from page 32 agent who listed the house for sale. If they refuse to move out, they’re evicted, though in some areas of the country, this can take extended periods of time. Robert Hagberg, Freddie Mac’s associate director of fraud investigations, said in an interview that foreclosure rental scams are becoming a significant problem, in part because of the sheer number of foreclosed properties on the market for sale. Freddie Mac had more than 53,000 houses — spread from California to the East Coast — listed for sale, under contract or being readied for sale as of June 30. Hagberg estimated that there have been “dozens” of houses recently affected by foreclosure rental scams. During the past few months alone, he added, there have been more frauds of this type than were reported in all of 2011. Another reason why foreclosure scams are becoming more commonplace: In the backwash of the worst economic downturn since the 1930s, rental markets are unusually hot and competitive in many cities. People who would have purchased or owned homes in previous years are now shopping for deals on rental houses and condos. When they check out what appears to be a legitimate listing online — there are color photos and detailed property descriptions, plus a bargain rent — they bite. For consumers shopping for rental homes and condos who want to avoid getting ripped off, here’s what Freddie Mac recommends: • Check to make sure the property is not already listed for sale. Google the house address and drive by to see if there are for-sale signs posted. You can also check Freddie Mac’s foreclosure listings at www.homesteps.com. • If you discover that the “rental” is already listed for sale, notify the listing agent immediately. • Under no circumstances should you submit online lease applications, including personal credit data, until you have verified that the house is a bona fide rental. Otherwise, you risk not only losing upfront deposits and rent payments to swindlers, but your financial identity as well. Kenneth Harney is a syndicated real estate columnist.

LEASING DIRECTORS, AND OFFICE STAFF

WWW.LINKRENYC.COM SOHO

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LINKING REAL ESTATE WITH REAL LIFE.™ 104 November 2012 www.TheRealDeal.com

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First Prize REAL ESTATE BOARD OF NEW YORK Residential Sales Deal of the Year 2012

445 Park Avenue

1121 Madison Avenue

790 Madison Avenue

1926 Broadway, Mezz

2 Fifth Avenue

43 North Moore

129 Montague Street

100 Seventh Avenue

All information is from sources deemed reliable but is subject to errors, omissions, changes in price, prior sale or withdrawal without notice. All rights to content, photographs and graphics reserved to Broker. Equal Housing Opportunity Broker.

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from page 16

Part of that is because in 2008 Chase bought Washington Mutual, which, until the crash, was one of the most active real estate lenders in the area. “They’re being as aggressive [as Washington Mutual was], but still maintaining a smarter risk-reward ratio than WaMu,” he said. Jason Pendergist, the east regional head of commercial term lending at Chase, said the New York City market has been a huge focus for expansion for the bank in recent months. The commercial-term lending team has tripled its staff in the last 18 months and, leveraging WaMu’s platform, has increased its loan production this year by 100 percent, he said. The bank is primarily seeking opportunities to invest in stabilized cash-flow assets, which do not require specially constructed deals. And Pendergist said Chase is happy to allow regional lenders to dominate in customized deal-making. “[The community banks] are really good at the unique deals,” Pendergist said. “They can get a lot more hands-on than our model allows. Our strength is not in customizing deals. Contrary to Mermelstein’s assertion that deals are getting hairier, Pendergist said he sees the opposite trend. “Prior to the recession, every deal required a little structure,” he said. “Now it feels as though there are an infinite number of [stabilized cash-flow deals to choose from]. Value-added [deals] have become a much smaller piece of the equation.” While community banks’ rates can often be slightly higher than those of larger institutional lenders — usually no more than 0.25 percent — the value of the relationship with their lender often outweighs the difference in rates for borrowers, Orefice said. “[Larger banks have] got to focus on relationships now, and the community banks just do that a heck of a lot better. This is our backyard,” he said. “A guy with a couple of million dollars in our bank is somebody we pay a lot of attention to. I’m 100 percent sure that that level of attention does not happen at the bigger banks. “They’ll not even know your name for that balance.” Mermelstein agreed: “I know the chief lending officer and I know the president [of Signature Bank],” he said. “I know that I can call any of these guys and say that I need something and, as long as it’s reasonable, they’re going to do their best to work something out for me. One of the only competitive advantages I have over the next guy is that I’m able to say I can close a deal in six days. That’s because of the relationship I have with my bank.” 14:03 Roni Abudi, a managing director at commercial brokerage GFI Realty Services, said he hasn’t been that surprised at community banks’ post-recession staying power. “I’m getting a lot of calls from other banks right now because everyone’s trying to get a piece of the cake, but when you already have a relationship with one bank, why should you start all over again?” he told TRD. Abudi, who has dealt mostly with Investors since the bank entered the New York market, said he sticks with the lender because he now has personal relationships with decision-makers at the bank. “If I have an issue with a loan, I can call someone and get an answer right away,” he said. “I don’t have to wait for a committee of people to sit down and make a decision.”

Customized agreements In one of its largest transactions this year, Investors provided $42 million in financing to the Kushner Companies, which purchased two multi-family properties in Hasbrouck Heights, N.J. Together, the properties have 338 units. Kushner did not respond to a request for comment. Meanwhile, earlier this year, Treetop closed on a portfolio of 17 upper Manhattan buildings in a deal valued at $52 million. Mermelstein said he secured a customized loan from community bank Signature for the transaction. The nine-year deal had three different rates starting with 3.25 percent for the first three years and increasing by one percentage point for the second and third three-year terms. “We look at it as a six-year deal with a three- year insurance policy,” Mermelstein said, indicating that the company will likely refinance the property before the nine years are up. This customized agreement is typical of community banks, which typically lend only for fixed periods. On the flip side, community banks will generally lend only for a period of up to 10 years, while larger banks will offer a hold of up to 30 years. However, the willingness of community lenders to work around the quirks of a specific deal and even invest in more untraditional and upcoming locations can be appealing and engender future loyalty, sources said. “Signature Bank is not a bank known to lend in urban New Jersey, such as Newark and East Orange, but they go outside of their box and have lent to me [there]. I’m probably the only borrower that they have in East Orange. I don’t think Chase would be willing to go out of their comfort zone like that in order to please a client,” Mermelstein said. TRD www.TheRealDeal.com March 2012 00

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Brooklyn mansions from page 60 The house boasts a heated driveway, an elevator and two kosher kitchens. There’s also a marble foyer with twin curving stairways. The exterior is somewhere between Mediterranean and Colonial in style, with brick, stucco and an emerald-colored terracotta roof.

staircase with glass etching. “It has a 1980s look to it, but it was very well built,” said Lombardo. She added that the asking price for the 5,250-square-foot house is appropriate for Bay Ridge, where even tear-downs go for $2 million. “The going rate is $1,000 per square foot in that area,” she said.

8381 Shore Road: Bay Ridge Shore Road, which overlooks the water, is a sought-after section of Bay Ridge, brokers said. This five-bedroom freestanding house is currently listed for $4.7 million by Laura Lombardo of Neuhaus Realty, a Staten Island–based firm. The house has an in-ground heated pool and views of the Narrows. Built in 1991 after the original 1920s-era home was torn down, it’s now in need of substantial updating, however: The home features gray marble floors and a mauve Jacuzzi tub in the master bathroom. There’s also a three-story spiral oak

2805 Ocean Pkwy (PH): Brighton Beach

The 4,100-square-foot interior has five bedrooms, each with an en suite bath and one with a sauna. The living room, which is lined with elaborate molding, stretches up two stories and is topped with three long dramatic chandeliers. Three balconies, with a combined 2,100 feet of outdoor space, provide water views. And, according to the listing, all of the rooms are soundproof and monitored by video.

The penthouse at 2805 Ocean Parkway in Brighton Beach was built for developer Benjamin Move, who completed the condo building in 2007 and outfitted the penthouse to his exacting specifications. It’s currently listed with Elliman’s Shtainer for $4.6 million. The developer “kept the crème de la crème for himself,” said Shtainer, who focuses primarily on properties in Manhattan, but does deals in South Brooklyn “when there’s something very special.”

Harbor View Terrace: Bay Ridge

“It matters a lot that it’s staying,” said Justin Elghanayan, the president of Rockrose Development, which owns several properties in the area. One of the sites Rockrose owns is an entire-block parcel along West 39th Street off 10th Avenue by the new boulevard, a site that can accommodate 420,000 square feet of

residential development and 1 million square feet of commercial development under the current zoning. That latter commercial piece has been marketed for a 1,200-room hotel, Elghanayan said, though that kind of project, which would be a first for Rockrose, would require a partner. However, Elghanayan and other developers expressed concern that because many parcels in the area are large, hotels aren’t an ideal use. That’s because they would have more rooms than current demand can support. Plus, hotels are “not beneficial for us from a tax perspective,” said Jared Della Valle, president of Alloy Development, which owns a 500,000-square-foot parcel along the boulevard. Indeed, the payment in lieu of taxes program (PILOT), which gives Hudson Yards developers a reduced property tax bill for 30 years, is not available to builders of hotels, he said. Still, Alloy, which mostly develops boutique condos, has not ruled out the idea; it’s currently teamed with Mort Zuckerman’s Boston Properties, which has built hotels, to explore all options for the site, Della Valle said.

This classic brick center-hall Colonial, listed for $4.19 million with Brown Harris Stevens’s Noonan, is just off Shore Road. According to the listing, it has a white marble foyer and dining room, four bedrooms and two recreation rooms in the basement. There’s also an in-ground heated pool set in a landscaped garden, complete with a small pool house and a detached four-car garage. Noonan could not be reached for comment and the listing

does not include a street address.

125 Oceana Drive East (PH2A): Brighton Beach Brighton Beach is known as a Russian enclave. As such, its housing is attractive to both international buyers seeking investment properties and Eastern European immigrants who want to live in the area, brokers said. This 3,500-square-foot penthouse in a newly built condo building on the ocean is currently listed for $3.9 million. The current owner is based in Manhattan and uses the property as a beach getaway, said listing agent Peter DeStefano of Elliman, who lives in Marine Park. “Every inch of the apartment is imported,” he said. “There’s nothing from the States except for the Sheetrock.” DeStefano said the study’s “matched mahogany”— all the grains in the wood are aligned — alone cost $250,000. TRD

Hudson Yards from page 56 For a while, a proposal by Governor Andrew Cuomo to raze the Jacob K. Javits Convention Center at West 34th Street threatened to put hotel plans on hold. (The hotel’s conventions draw visitors looking for rooms.) However, the idea was shelved last summer when a plan to build an alternative convention hall in Queens unraveled.

175-77 E. 3rd Street 310 E. 18th Street 60 W. 22nd Street 246 E. 48th Street 218 E. 61st Street 221 E. 62nd Street 134 W. 3rd Street 312 E. 18th Street 408 W. 22nd Street 554 W. 48th Street 219 E. 61st Street 223 FOR SALE E. 62nd Street 125 E. 10th Street 310 E. 19th Street 114 E. 30th Street 348 E. 51st Street 11-13 E. 62nd EAST STREET Street 244 E. 62nd Street 27 E. 11th11 Street 316 E.89TH 19th Street 120 E. 30th Street 318 E. 53rd Street 12-18 E. 62nd Street 369 E. 62nd Street 34 W. 11th Street 320 E. 19th Street 122 E. 30th Street 20 W. 56th Street 35 E. 62nd Street 14 E. 63rd Street 224 E. 18th Street 534-36 W. 21st Street 217 E. 48th Street 129 E. 61st Street 215 E. 62nd Street 167 E. 63rd Street 303 E. 18th Street 550 W. 21st Street 219 E. 48th Street 136 E. 61st Street 217 E. 62nd Street 10 E. 64th Street 308 E. 18th Street 551 W. 21st Street 233 E. 48th Street 206 E. 61st Street 219 E. 62nd Street 16 E. 64th Street 177 E. 64th Street 38 E. 68th Street 35 W. 70th Street 120 E. 73rd Street 211 E. 77th Street 3 E. 82nd Street 180 E. 64th Street 41 E. 68th Street 41 W. 70th Street 161 E. 73rd Street 231 E. 77th Street 9 E. 82nd Street 184 E. 64th Street 50 E. 68th Street 111 E. 70th Street 167 E. 73rd Street 105 W. 78th Street 18 E. 82nd Street 59 E. 66th Street 39 W. 69th Street 123 E. 71st Street 61 E. 75th Street 5 E. 80th Street 314 W. 83rd Street 158 E. 66th Street 52 E. 69th Street 127 E. 71st Street 172 E. 75th Street 49 E. 80th Street 315 W. 84th Street 432 E. 84th Street 162 W. 88th Street 112 E. 91st Street 138 E.92nd Street 131 E. 94th Street 158 E. 95th Street 435 E. 84th Street 22 W. 88th Street 117 E. 91st Street 5 E. 93rd Street 133 E. 94th Street 160 E. 95th Street 437 E. 84th Street 58 W. 88th Street 119 E. 91st Street 9 E. 93rd Street 135 E. 94th Street 166 E. 95th Street 91 Central Park West 127 MacDougal Street 1125 Fifth Avenue 1 Minetta Lane 79 Horation Street 1075 Park Avenue 17 Commerce Street 692 Madison Avenue 93-95 Franklin St. 18 Minetta Lane 90 W. Houston Street 1085 Park Avenue 26 Commerce Street 714 Madison Avenue 41 Grove Street 20 Minetta Lane 167 Hicks Street 1211 Park Avenue 1457 Lexington Ave. 58 White Street 433 E. 85th Street 57 E. 90th Street 16 E. 92nd Street 66 E. 93rd Street 1460 Lexington Aveue 15 Williams Street 436 E. 86th Street 59 E. 90th Street 18 E. 92nd Street 130 E. 93rd Street 90 MacDougal Street 400 West Street 14 E. 95th Street 19 W. 96th Street 16 E. 95th Street 21 E. 96th Street 175-77 E. 3rd Street 310 E. 18th Street 60 W. 22nd Street 246 E. 48th Street 218 E. 61st Street 221 E. 62nd- Street W. 3rdfoot Street 312 E. 18th Street 408 W. 22nd Street 554 W. 48th 13,500134square Street 219 E. 61st Street 223Upper E. 62nd East StreetSide 125 Private E. 10th Street 310 E. 19th Street 114 E. 30th Street 348 E. School 51st Street 11-13 E. 62nd -Street 244renovated E. 62nd Street 27 E. 11th Street 316 E. 19th Street 120 E. 30th Street Newly 318 E. 53rd Stree 12-18 E. 62nd Street 369 E. 62nd Street 34 W. 11th Street 320 E. 19th Street 122 E. 30th - ADA Compliant Elevator Street 20 W. 56th Street 35 E. 62nd Street 14 E. 63rd Street 224 E. 18th Street 534-36 W. 21st Street 217 - Outdoor space E. 48th Street 129 E. 61st Street 215 E. 62nd Street 167 E. 63rd Street 303 E. 18th Street 550 W. 21st Street 219 E. 48th Street 136 E. 61st Street 217 E.FOR 62nd Street 10 E. 64th Street 308 E. 18th Street 551 W. 21st MORE INFORMATION: GARFIELD Street 233 E. 48th Street 206 E. 61st StreetJED 219 H. E. 62nd Street 16 E. 64th Street 177 E. 64th Street 38 E. (212) 68th Street 35 W. 70th Street 120 E. 73rd Street 211371-8200 E. 77th Street 3 E. 82nd Street 180 E. 64th Street 41 E. 68th Street 41 W. 70th Street 161 E. 73rd Street 231 E. 77th Street 9 E. 82nd Street 184 E. 64th Street 50 E. 68th Street 111 E. 70th Street 167 E. 73rd Street 105 W. 78th Street 18 E. 82nd Street 59 E. 66th Street 39 W. 69th Street 123 E. 71st Street 61 E. 75th Street 5 E. 80th Street 314 W. 83rd Street 158 E. 66th Street 52 E. 69th Street 127 E. 71st Street 172 E. 75th Street 49 E. 80th Street 315 W. 84th Street 432 E. 84th Street 162 W. 88th Street 112 E. 91st Street 138 E.92nd Street 131 E. 94th Street 158 E. 95th Street 435 E. 84th Street 22 W. 88th Street 117 E. 91st Street 5 E. 93rd Street 133 E. 94th Street 160 E. 95th Street 437 NYC'S #1 BOUTIQUE FIRM E. 84th Street 58 W. 88th Street 119 E. 91st Street 9 E. 93rd Street 135 E. 94th Street 166 E. 95th Street 91 Central Park West 127 MacDougal Street 1125 Fifth Avenue 1 Minetta Lane 79 Horation Street 1075 Park Lesliejgarfield.com Avenue 17 Commerce Street 692 Madison Avenue 93-95 Franklin St. 18 Minetta Lane 90 W. Houston Street 1085 Park Avenue 26 Commerce Street 714 Madison Avenue 41 Grove Street 20 Minetta Lane 167

108 November 2012 www.TheRealDeal.com

Scuttled projects revived? Whether the new interest in hotels will revive scuttled plans for old hotel projects remains to be seen. The state, which owns the land facing the Javits Center, has been pushing for a hotel there since the convention facility was built in 1986. But no hotel has ever been built. In 2008, after many delays, three developers — Extell Development, the Moinian Group and FaulknerUSA — submitted bids to build on the site. But state officials ended up returning their money as concerns mounted over the fate of the Javits, which was also in need of a massive renovation.

But that $463 million renovation is nearing its 2013 completion. And the site, which is where workers are installing a vent for the No. 7 train, will be empty again once the new subway station opens in 2014. “There’s always the possibility in the future to do a hotel there,” said Barbara Lampen, president of the New York Convention Center Development Corp., which owns the land. Lampen added that there’s a state-owned (and similarly empty) parcel that might be desirable for a hotel south of Javits, too. The site of a truck parking lot, it’s a skinny lot located between West 34th and West 35th streets from 11th to 12th avenues. Those types of smaller lots can be advantageous, said Ryan Nelson, a vice president at Sherwood Equities, the developer that’s planning a 700,000-square-foot hotel for a corner lot at 360 10th Avenue at West 30th Street. The 50-story hotel, which is still in the design stages and has not yet been permitted, could have up to 500 rooms and also may contain offices, said Nelson. The building “should” be completed in 2016, he said. Sherwood, which developed the Renaissance New York Times Square Marriott, bought the site in 2011 from Barclays Bank, which took control from previous owner Extell. In the end, hotels will go where tourists go, which is in part why Sherwood is taking its plunge. Its site is served by a spur of the High Line, the popular railroad-turned-park that loops through the area. In fact, the hotel could be the first since the Standard Hotel in the Meatpacking District opened in 2009 to offer direct access to the High Line. And “from a tourism perspective, we are just two blocks from Penn Station,” Nelson said. “It just makes sense that [this area] is where the growth will take place.” TRD

NIMBY

from page 63

District Extension I, which stretches from West 79th to West 87th streets, in an area between Riverside Drive and Broadway. If fully approved, the district will cover some 800 buildings. The organization expects the whole district to be approved within the next year, before Bloomberg leaves office, said the group’s founder, Richard Emery. In the meantime, the Society has turned its attention to promoting the community’s history and culture, with plans to install benches and plaques and to hold walking tours and community events. “We hope to actually be, in some sense, a conduit to elected officials and other city agencies to solve problems,” Emery said. A Manhattan litigator, Emery is best known for challenging the legality of New York City’s Board of Estimate, a government agency that made budget and land-use decisions until the Supreme Court ruled it was unconstitutional in 1989.

The YIMBYs Friends of the High Line Headquarters: Chelsea Staff: 62 Annual budget: $13 million (2010 figures from Guidestar) Founded: 1999

he inspiration for the High Line dates back to 1999, when two Chelsea residents, journalist Joshua David and artist Robert Hammond, began efforts to turn the unused rail yards snaking along the West Side of Manhattan into an elevated park. Now known as Friends of the High Line, the nonprofit they started maintains the High Line and provides more than 90 percent of its operating budget under a license with the New York City Department of Parks & Recreation. Together with the rezoning of West Chelsea in 2005,

their efforts have helped transform the neighborhood. “Nonprofits focused on benefiting communities and changing city policy can be very influential,” said New York YIMBY’s Fedak. “Friends of the High Line is a great example as they’ve been paramount in converting the High Line into one of the most popular parks globally, boosting all of the Meatpacking [District] and West Chelsea in the process.” The first portion of the park opened in 2009, and groundbreaking on the third and final portion took place this past September. Friends of the High Line has pledged to raise $20 million of the $90 million needed to finish the park. But the organization is now embroiled in the controversy over Jamestown Properties’ bid to build a nine-story office tower and 90,000-square-foot hotel atop the Chelsea Market, a converted Nabisco factory that houses retail shops and offices. Jamestown sought approval for the project through a city program that gives Chelsea developers a larger footprint in exchange for financial and infrastructure contributions to the High Line. Jamestown pledged to build public restrooms for the park and donate almost $16 million to the fund. The nonprofit has said that the funding from Jamestown is “critical” to make capital repairs in the coming years. At the first city council hearing on the proposal last month, David cautioned that “if the city does not have the funds to meet its obligations, the High Line could fall into disrepair.” However, other community groups, including the Greenwich Village Society, contend that the addition will destroy the Chelsea Market’s character and increase traffic in the area. In September, the City Planning Commission approved a modified proposal that limits the building height and blocks the hotel. The commission also urged Jamestown to set aside 30 percent of its High Line contribution to an existing affordable housing fund, which David said his group supported. The city council is currently reviewing the proposal.

Alliance for Downtown New York Headquarters: Financial District Staff: 50 full-time Annual budget: $16.9 million Founded: 1995

f any group exemplifies the growing influence of business improvement districts on residential neighborhoods, it is the Alliance for Downtown New York, which focuses on attracting and retaining commercial tenants in Lower Manhattan. The neighborhood is home to about 57,000 people, and about 310,000 work there. “Everything we do is designed to make Lower Manhattan competitive and attractive to investors and tenants,” said the group’s president, Elizabeth Berger, a 30-year resident of the neighborhood. The city’s largest BID, the Downtown Alliance assesses owners of commercial properties about 18 cents per square foot. Residential property owners are assessed only $1 per lot, and noncommercial owners (such as the Port Authority of New York and New Jersey) do not pay assessments. The group is currently researching strategies to lure technology firms and start-ups to Lower Manhattan, where about 500 tech firms already operate, Berger said. Also, two commercial thoroughfares are in the BID’s crosshairs. The Downtown Alliance is working to revitalize a half-mile stretch of Water Street that boasts 19 million square feet of Class A and Class B–plus office space. A significant amount of space will be up for lease within the next five years, according to the Alliance, and the strip is largely quiet on evenings and weekends with few retail and dining options and underused public spaces. The group released a planning study in 2010, and its vision includes everything from adding street signs and public art to luring retail tenants to rethinking the zoning of the area’s privately owned public spaces, or POPs. The Downtown Alliance also wants to capitalize on the future of Greenwich South: Once the World Trade Center construction is complete, the north and south halves of Greenwich Street will be joined up again, offering “millions of square feet of latent development potential,” the group said. TRD

Rabbi Pinto from page 70 granted power of attorney from Pinto’s wife in 2006. Suky and Joseph Ben Moha, codevelopers of the Mave Hotel at 62 Madison Avenue, threw the property into bankruptcy in March after their mezzanine lender was about to foreclose on the debt. Textron Financial, a Providence, R.I.–based lender, had originally filed suit in 2010 after the developers defaulted on $16.5 million in loans at the property. Charles Ira Epstein, an attorney for several investors at the hotel, alleged in court documents that his clients were repeatedly harassed and threatened by Moha and Suky after requesting financial records of the hotel. Sources told TRD that Pinto also made threats and that those threats were disclosed to federal investigators. Epstein declined to comment when contacted by TRD. Court records obtained by TRD show that lenders rejected a reorganization plan for the hotel and that the property will be auctioned off to maximize its value in a sale. The New York office of London-based Savills has been retained to market the property pending approval of the U.S. Bankruptcy Court. Neither Kelly Griffin, an attorney for Suky, nor Moha was immediately available for comment. There are additional troubled properties tied to the Pinto aide. Suky and investor Yossi Zaga are facing multiple lawsuits at a Yorkville property — a condo conversion called the

Duplex at 215 East 81st Street. In 2009, they were sued after defaulting on a $14 million loan from Marathon Asset Management that was used to convert the 37-unit rental building to condos. The investors failed to fund the building’s reserve fund and missed monthly mortgage payments; the loan was later sold to new investors. The property was in such poor physical condition that a receiver was appointed after Suky and Zaga failed to repair millions of dollars of construction defects and code violations ranging from nonworking cellar drains to rotting cellar doors and faulty fire exits, according to court documents. Suky and Zaga also failed to pay tens of thousands of dollars in common charges at the building, according to court documents. Victor Metsch, an attorney for apartment owners at the building, said this case involved a “perfect storm” of a defaulting sponsor, unpaid contractors and lenders foreclosing on the debt. “This trifecta of claims and disputes has victimized the owners who purchased their units in a good-faith belief that they were buying into a properly built, well-organized and functioning condominium,” he said. Eric Anderson, the court-appointed receiver at the building, said last month that about 30 units in the building have been sold, with about 10 remaining.

Anderson said that current code violations at the building are being corrected, and the building is working on getting Fannie Mae and FHA approval.

In the family As TRD and others have reported, Pinto’s wife Debora Rivka Pinto reportedly attempted to commit suicide last month shortly after her husband was arrested and just before she was scheduled to speak to investigators in Israel. Israeli newspapers reported that she survived her overdose attempt and was expected to recover. She, too, was involved in a New York real estate transaction. Suky and Debora Rivka Pinto were sued earlier this year by the Bank of New York after allegedly defaulting on a loan at an apartment that they jointly owned at the Cielo, a 27-story luxury condo at 450 East 83rd Street. They allegedly defaulted on more than $5,000 in monthly payments starting in June 2011, after previously defaulting on more than $17,000 in common charges. Sources familiar with the property say the apartment was being rented out to a tenant. It remains unclear what the longterm impact of the latest arrest will be on the Pinto family. Sources familiar with Pinto say the rabbi is a victim of people trying to take advantage of his considerable influence. Others see a cloud hanging over everyone connected to him. TRD

www.TheRealDeal.com November 2012 109

Music venues from page 30 Buzio, Jr., whose family had owned the space for decades. A woman who answered the phone at Buzio’s New Jersey home confirmed the sale but did not provide additional details. Southpaw owner Matt Roff — who created the space out of a 99cent store and had been leasing it — also owns Public Assembly (a club in Williamsburg) and Franklin Park Bar and Beer Garden (in Crown Heights). He did not respond to requests for comment but told the New York Times last year that his business was suffering. “I don’t think any place in New York for live music is really bringing in enough revenue these days,” he said. The Park Slope location will be the ninth for New York Kids and a 10th and 11th will also open soon in Williamsburg and Tribeca. As for the building purchase in Park Slope, “We just believe that

area is exploding,” said Wolf, who also owns parking garages around the city. “If the business cycle ever changes, and this type of enrichment business is no longer in vogue, we will have a great rental space,” he said.

his fall, Patagonia will open a new surf-themed clothing store at 313 Bowery, the former home of CBGB Gallery, which, for decades, hosted acoustic shows and dance parties adjacent to CBGB. Since 2006, when both CBGB (which hosted harder rock shows) and CBGB Gallery closed, the latter 8,300-square-foot space housed a pop-up store for Riff, a Tommy Hilfiger brand, and an East Village outpost of the Morrison Hotel, the Soho art gallery.

Both CBGB spaces are owned by Bowery Residents’ Committee, an affordable housing group. CBGB, which was paying $19,000 a year in rent, left because BRC wanted to raise the rent to $35,000, according to public reports. In a complicated deal, Patagonia is subletting No. 313 from the Max’s Kansas City Company, a for-profit organization initially created to save CBGB, but is now involved in various real estate deals, like a rock-and-rollthemed hotel. Patagonia declined to disclose the rent. Similarly tight-lipped was Elliott Azrak, a Kansas City principal, saying just that Patagonia would be there “longterm.” However, Azrak hinted that the company might host surf-rock concerts there, similar to the occasional music events staged at the

Last year, developer Edward J. Minskoff Equities scrapped plans to develop a 635-room dorm at a 19-story property in Long Island City and sold the building to Alma

Realty for $21.5 million. “The site was so large, 1,600 beds, too big for anyone college,” said Jeffrey Sussman, executive vice president at Minskoff Equi-

CBGB: 313 Bowery

CBGB-turned-John Varvatos store next door. In fact, Azrak, a Brooklyn native, previously turned down offers from other tenants because they had no plans to celebrate the space’s legacy. “Merging cultural history with real estate is something we feel passionate about,” he added.

Tonic: 107 Norfolk

x-venues can seem to be a tough fit for tenants. Indeed, Tonic, which showcased experimental music at 107 Norfolk Street on the Lower East Side, sat empty for five years after closing in 2007. Its closure was also prompted by soaring rent rates, according to published reports, which also noted that several restaurants appeared close to signing deals for the 4,800-square-foot two-level

space, which is owned by William Gottlieb Real Estate. No deals were ever finalized, however. Neither the firm nor Ripco broker Jason Pennington, who is repping the space for Gottlieb, responded to calls for comment. The single-story brick building was a kosher wine distributor before Tonic took over. Today, it is squeezed between two highrise luxury condos — Blue at 109 Norfolk and Switch Condo at 105 Norfolk — which went up before Tonic left. In March, gallery owner Lisa Cooley, whose showroom had been based at 34 Orchard Street since 2008, opened in the ground-floor space in a 10-year lease. For Cooley, who used to see music at Tonic, the chance to revive an old venue was attractive. “You feel very lucky to take over a space with such interesting provenance,” she said. TRD

Dorms from page 68 where we can deliver that dormitory product quickly and efficiently,” Herschenfeld added. Not all would-be dormitory projects are slam dunks, either.

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ties, in an e-mail. “That was one of the issues.”

More in the pipeline Developers looking to get in on the dorm-building action will have a handful of new projects to vie for in the coming years — in addition to other higher-education projects. This summer, the city council approved NYU’s revised expansion plan to develop 2 million square feet of classrooms, dorm rooms and office space just south of Washington Square Park. Construction on the expansion is slated to begin in 2014, but no developer has been disclosed. Cornell University is, of course, also planning a major expansion on Roosevelt Island for its new engineering and applied science graduate school. The project will also create more than 2 million square feet of academic buildings and student housing by 2037. The project’s campus is scheduled to break ground in

2014 with the first building to open three years later. Cornell didn’t respond to e-mails or calls asking about the selection process for developers. Meanwhile, the City University of New York is considering plans to develop a hotel in Long Island City on Skillman Avenue to expand its hospitality program. Crain’s reported in August that the university hired Cushman & Wakefield to review the site’s zoning and possibly choose a developer. For its part, SL Green has been approached by a handful of other universities about future construction, Herschenfeld said. He said he can envision that leading to a new development platform for the company. “We love the product. The ability to develop to a specific use with a user in place is every developer’s dream,” said Herschenfeld. “This is something we want to repeat over and over again.” TRD

C O R R E C T I O N S & C L A R I F I C AT I O N S In October’s Development Updates section, TRD stated that Chelsea Green has a 24-hour concierge and spa. In fact, the project has a 24hour attended lobby, not a concierge, and a “wellness center.” In an October story entitled “CitySites launches management group,”

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110 November 2012 www.TheRealDeal.com

TRD wrongly stated that CitySites Real Estate Group is owned by the Hakim family. In fact, the brokerage firm is owned by Scott Hakim, a member of the Hakim family, but the two companies are separate.

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Tech leasing

from page 43

That money gets split, with about 50 percent going to the brokerage and the rest divided among the team of tenant brokers on the deal. But the commission is much lower on a short deal. For instance, on a two-year lease, the broker will get approximately a third of what’s earned on a standard deal. In the short lease, the tenant broker collects about 10 percent of the first year, or in the above example about $80,000. There are some advantages for brokers who close shorter leases. Unlike a megadeal, which can involve a half-dozen people or more, a smaller deal is often managed by just one or two brokers, allowing them to keep more of the fee. Still, for landlords, the shorter leases can be unsettling. That’s because many of them like to have tenants locked in for long periods of time. Bonnie Shapiro, director of commercial leasing at Allied Partners, the landlord for location-based social networking site Foursquare and medical appointment booking site ZocDoc in Soho, said landlords “want to keep some diversification” in the tenant mix. In addition, she said while the tech sector is stronger this time around than it was during the dot-com boom in the 1990s, there are still some concerns about whether firms in this sector can sustain the amount of office space they’re taking. “The tech people seem to want a lot of space, and I don’t know if they really need that much,” she said.

Winning business While brokers obviously compete fiercely to win clients in other large sectors like finance and apparel, today sources say they are most aggressively pushing to get tech firms as clients. That is partly because other industries such as finance are retrenching rather than expanding. “With so much action with the tech firms, now larger companies are trying to do deals [in Midtown South],” said Joseph McLaughlin, principal with Capstone Realty Advisors, who represented online wine retailer Lot18 and YouTube challenger Dailymotion. But brokers also say there is a different culture among the tech firms that encourages this degree of aggressive courting. For one, the owners are younger, and so younger brokers — who are on the hunt for accounts and to prove themselves — feverishly network to get business or make cold calls and hope that they strike gold. The fast turnover of leases, meanwhile, creates more opportunities for brokers to pitch business. Many brokers follow changes in management like hawks as well as funding news out of the venture capital world in order to find out which tech companies are newly flush with cash. That, of course, gives them an idea of which firms to target in their pitches. (New York metro venture capital funding fell over the past year by 20 percent to $1.8 billion, compared with the prior 12-month period. Still, funding is at higher levels than it’s been at since 2001, figures from PricewaterhouseCoopers showed.) “In the downturn, I started tracking venture capital money investment and identifying firms in the rapid growth mode,” said Jack Petrie, president of the brokerage Office Leasing Center and former president of Cresa. In his role at Cresa, Petrie represented Amazon in 2009 in its 20,100-square-foot renewal and expansion at 1350 Sixth Avenue, data from the CoStar Group shows. Cresa also represented designer clothing site Gilt Groupe.

A new way of thinking The smaller tech firms tend to crowd more people into open spaces, averaging as little as 100 square feet per person. The companies are also open to sharing space, not only with foosball tables and bean bags, but with other companies. “The coworking space, the coworking concept five years ago that did not exist,” Petrie said. “Now shared environments are very common.” In some instances, changes in funding and changes in corporate leadership lead to a shift in business. Miyad’s Rouzenrouch represented Tumblr in its 10,000-square-foot lease at 35 East 21st Street in 2010. But when the company renewed in 2012, it turned to CBRE. Rouzenrouch speculated that new VC funders might have pushed Tumblr to switch to the larger firm. Miyad isn’t the only firm that’s lost business in this cutthroat universe of tech leasing. Newmark CEO Barry Gosin and broker John Lizzul represented video-gaming firm Take-Two Interactive Software in 2002 when the public company leased 48,000 square feet at 622 Broadway, starting at about $31 per foot, lease records filed with the U.S. Securities and Exchange Commission showed. But when the company renewed in 2012 — taking a total of 64,000 square feet — it was under new management, which had hired CBRE instead. Meanwhile, JLL won Foursquare from Studley. Brokers will undoubtedly continue to fight for tech tenants, and those tenants will likely be a rotating cast of characters. “Over the next 24 to 36 months, some of the companies will remain on track,” said Taubin of Studley. But he added that not all the tech firms will make it for the long haul. “I don’t think some will be here.” TRD 112 November 2012 www.TheRealDeal.com

www.TheRealDeal.com March 2012 00

Hotels

from page 55

The big squeeze Rather than aggressively expand, many of the biggest hotel owners in Manhattan have used the rosy conditions of the last few months to shore up finances, renovate buildings and reconfigure layouts to wring a handful of new rooms out of existing properties. Like other large owners in the city, Pebblebrook — which owns 1,733 rooms at six Manhattan properties south of 96th Street, all of which are operated by Denihan Hospitality Group — is one of the companies that has recently been on a renovating spree. It spent $24 million reconfiguring its Affinia Manhattan, at 371 Seventh Avenue near Penn Station, by shrinking rooms. In doing so, it increased its room count by 92 to 618 rooms, Martz said. Using a similar strategy, the company plans to carve 41 more rooms out of the Affinia 50 next year at 155 East 50th Street, which currently has 210 rooms, he said. Similarly, the Hudson Hotel, which is located inside a former YWCA at Columbus Circle, recently added 30 new rooms from within its own walls as some longtime residential tenants left, which boosted its total room count to 866 from 836, according to industry sources. That hotel is owned by Morgans Hotel Group — No. 13 on TRD’s ranking. Midtown’s 1924 Roosevelt Hotel also just wrapped up a renovation of its 1,015 rooms, including new carpets, furniture and fixtures, as well as an upgrade of the Madison Club Lounge with a new granite bar, a spokeswoman confirmed. The historic property, which is located at 45 East 45th Street near Grand Central, is owned by the government of Pakistan, which came in at No. 14 on the TRD list with that single property. It should not come as a huge surprise that many hotel owners are renovating rather than building anew (or converting office buildings). With land costs on the rise and sellers suddenly savvy about what they can charge based on the uptick in demand for hotel rooms, it can be a costly proposition to buy a property, according to analysts. In the second quarter of 2012, a hotel cost an average

of $478,790 per room to purchase, according to figures prepared by Real Capital Analytics. That figure marks the culmination of an increase in cost, year over year, for the last few years. In the second quarter of 2010, for example, the average price per room was $302,454. As costs of buying a hotel have climbed, activity has slowed. In the second quarter of 2012, there were $379 million in hotel sales in Manhattan, versus $1.67 billion in the third quarter of 2011, which was the recent high peak, according to the RCA data. “Values were depressed a few years ago. People were buying assets in all locations,” NYU’s Hanson said. “But as occupancy returns to 85 percent, buyers have become more selective” because prices have gone up.

The aggressors While most major players have been in retrenchment mode, some owners are aggressively blazing ahead. Foremost among them might be Hyatt, which is opening new high-profile properties across the country, including in Manhattan. (Hyatt, which is headed by Mark Hoplamazian, ranked No. 4 on TRD’s top 15 list.) Two of its Andaz lines, on Fifth Avenue and Wall Street, also recently had ribbon cuttings, but what is perhaps more significant is what lies ahead, like the Hyatt Times Square, with 487 rooms, that is now going up at 135 West 45th Street and is set to open mid-2013. Also, the 210-room Park Hyatt, its upscale brand, will debut at One57, the record-setting new condo from Extell Development Company. However, because those projects won’t open for months — One57 is currently under construction at 157 West 57th Street — their rooms weren’t included in TRD’s totals. Similarly, the McSam Hotel Group, the prolific development company headed by Sam Chang, also didn’t make the list. The company usually sells its properties quickly after building them, meaning that its actual count of owned rooms is low. In addition to the Hyatt properties, there are other planned hotels that will add hundreds of new rooms to Manhattan.

Last month, an investment group including Steven Witkoff, Howard Lorber’s Vector Group and Michael Ashner’s real estate investment trust, Winthrop Realty Trust, purchased 701 Seventh Avenue in Times Square, with plans to build several levels of retail with a 475room hotel on top. Witkoff said last month at an industry gathering in Midtown that he anticipated it would cost about $200 million to develop the hotel, or less than $500,000 per room. Hotel developer Barry Sternlicht’s Starwood Capital Group and Starwood Property Trust provided up to $475 million in financing for the purchase and development. However, Witkoff also said that he could go forward with the retail portion of the project even without the hotel rooms and then simply add the hotel later. But despite those examples, what’s helped lift the market this year is that relatively few new rooms have been added to the overall inventory, allowing 2011’s ample supply to be absorbed by burgeoning demand. Indeed, 2011 saw the opening of several thousand rooms, including massive properties like the 670-room Yotel at 570 10th Avenue. And though hotels have debuted in 2012, they are mostly smaller boutiques, which means they have a few hundred rooms at most. That hasn’t been enough to change the supply dynamic. In fact, just 1,151 rooms were added to the Manhattan supply in the first half of 2012, compared with more than 2,000 rooms in the same period of 2011, the CBRE figures show. So what’s ahead? The market in 2013 is not expected to see huge deal-making totals, said John Fox, a senior vice president with PKF Consulting, which serves the hotel industry. In 2011, “there was a great rate of acceleration, which gave people an impetus to jump in,” said Fox, adding that as prices have climbed in 2012, deals have slowed. As for next year, he said, “I see it as a continuation of what we had this year: a moderate number of deals and continued strong fundamentals.” TRD

Commercial market from page 22 In a near parallel of the broader Manhattan market, Midtown saw very little change in market measures in October, Cassidy Turley figures show. The average asking rent rose by a scant $.04 per foot to $64.50 per foot, while the availability rate remained steady at 11.1 percent, the firm reported.

Midtown South The submarket most popular with tech firms will likely get several hundred thousand more square feet of office space, after getting a nod from a city council subcommittee. Indeed, Jamestown, which owns Chelsea Market at 75 Ninth Avenue, won approval from the council’s zoning and franchises subcommittee to construct a 300,000-square-foot addition on top of the landmarked building, once home to Nabisco.

Like much of Midtown South, the Chelsea submarket is in demand with inventory tight and the online behemoth Google looking for more office space. (That’s even after Google purchased the 2.9 million-squarefoot 111 Eighth Avenue across the street from Chelsea Market.) The firm is trying to grow by taking more space in its Eighth Avenue building, but longterm tenants there are hemming it in, insiders said. Last month, Google, represented by CBRE, took 94,000 square feet at Chelsea Market, giving it a total of 202,000 square feet in that building. Jamestown was represented by Newmark Grubb Knight Frank. The average asking rent in Midtown South did slightly better than it did in Manhattan on the whole. In October, it rose by $0.99 per foot to $48.73 per foot, while the availability rate declined slightly by 0.1 point to 7.9 percent.

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Downtown Even as large leases have been rare in Midtown, Downtown has shown some activity. The City of New York signed a new lease last month for 131,946 square feet at SL Green’s 100 Church Street. In that deal, a CBRE team represented the city, and brokers from Newmark and SL Green represented the owner. In September, media company Nielsen leased more than 116,000 square feet of executive and administrative space at 85 Broad Street, a building Jones Lang LaSalle represents. Despite that activity, Downtown, where millions of square feet are expected to be added to the market in the coming months, saw a modest increase in availability rate, up 0.1 points to 10.4 percent. At the same time, the average asking rent ticked up slightly, by $0.46 per foot, to $39.84 per square foot, Cassidy Turley showed. TRD

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Residential market

from page 14

Soros, who is asking $29.5 million. A duplex penthouse at 885 Park Avenue with an asking price of $35 million also came onto the market. Meanwhile, one owner who had been considering putting his penthouse on the market for the last four years chose last month to do so; the long-vacant 12-room unit at 55 Central Park West was once owned by Calvin Klein and is also listed for $35 million. On the new development front, brokers say the lack of supply is stoking the market. “Buyers are acutely aware that there is not a lot of new product coming to market, which is creating a sense of urgency, particularly for those shopping in new development,” said Gordon Hoppe, director of sales at new development marketing firm Corcoran Sunshine. “Developers and sellers are

thrilled with the heated market and are assigning bold price tags to new ultra-luxury listings.” Stribling’s Chapman agreed. “We haven’t had to negotiate on any pricing all year,” he said. “We’ve even raised prices on listings that have been on the market for a while.” According to data from Corcoran Sunshine, approximately 1,500 new development units will be introduced to the market annually from 2012 to 2015. However, about 2,000 new development units were sold in the past 12 months alone. “It’s evident that new development demand is outpacing supply,” Hoppe said. “Prices are increasing, negotiability is narrowing and the average time on the market for desirable listings continues to decrease. Newly intro-

duced developments like [the Brodsky Organization’s] 135 East 79th Street are successfully selling from floor plans.” (See related story on page 50.) By contrast, midsize apartments are not selling quite so quickly, thanks in part to the reluctance of banks to lend to homeowners hoping to trade up to two- or three-bedroom apartments. “Many [of these kinds of buyers] have loaded negative equity,” Miller said, “so they can’t trade up. Pre-recession, credit standards were much easier; there was always a way. Now there’s been an overcorrection in underwriting standards and [banks are] more risk-averse.” While the middle of the market is not weak in and of itself, it is lagging relative to the strength of the higher and lower ends of the spectrum, he said. TRD

to be taken advantage of,” she said. “Everyone expects Russians to come in and overpay. I would say before Lehman, they might just come in and overpay to secure the property. But that is not the case anymore.”

options: opening a U.S. bank account, using a power of attorney to make the purchase or setting up a corporate LLP with all its attendant tax ramifications. According to brokers and other industry insiders, efforts to get money out of Russia without paying taxes have become increasingly difficult since Putin resumed the presidency last May, which has delayed some real estate deals in New York.

Russian buyers from page 59 and her partner Brenda Powers, who work at Sotheby’s International Realty, were widely reported to have acted as Vavilov’s brokers — both on the ill-fated Plaza deal and in his later purchase of a Time Warner Center penthouse for $37.5 million in 2009. Sample would not discuss those deals, but did speak generally about Russian buyers. Sample met her first Russian clients, a couple, while selling a penthouse at the Pierre on East 61st in 2006. That led to a chain reaction of referrals among their friends and families, to whom she has since sold more than $125 million worth of real estate. Most of her clients, Sample said, arrive by private jet (many have several jets). Most also have purchased vehicles that stand ready to pick them up at the airport and ferry them around New York. They include Bentleys and Range Rovers that are fully equipped with satellite TVs and refrigerators, all the way up to cars from Germany luxury manufacturer Maybach, which makes the $1.35 million Landaulets sedan. Sample said the entourages of her Russian clients usually number no more than five, which includes bodyguards, drivers and assistants (though others say their clients sometimes arrive with as many as 10 in tow). In general, she will send ahead a detailed analysis of what’s on the market, complete with square footage, dollar per square foot and desirability of the building. “It’s not always the price that is the most important, it’s more the prestige of the property,” she said. “Many Russian clients know what the buildings are; they know what the top condominiums are.” After showings, Sample will often meet her clients for dinner — Cipriani and Per Se are client favorites — or a subsequent breakfast where she can receive her marching orders. “Honestly, there is no vodka,” she said. “Surprisingly, a lot of them don’t drink at all. These guys and women did not get this money by drinking all night.” Most of the deals, Sample said, close quickly. One Russian couple, Sample recalled, lost an apartment at the Time Warner Center and flew back to London “very upset.” When a similar apartment came on the market at 25 Columbus Circle, they engaged in an aggressive bidding war for the apartment “sight unseen,” and eventually won the right to buy the property for around $19 million. In general, however, even if another broker tells Sample that they have “three bids for $40 million” on a space, Sample said, “we would always bid lower to see if that is the case. “Because here you have someone who can close and wants the apartment and, like anyone else, does not want 114 November 2012 www.TheRealDeal.com

Getting money out To arrange the financial aspects of the deal, most buyers rely on attorneys. Edward Mermelstein, a Ukrainianborn real estate attorney, said he’s handled more than 500 deals for Russians over the years, with 150 in just the last three years. Though Russians from Moscow first began inquiring about high-end New York real estate as far back as the 1990s, it wasn’t until 2000 or 2001 that the group began buying in great numbers. In the last year and a half, buyers have begun appearing from the outer regions of Russia. Mermelstein estimated that funds leaving Russia for New York are “significantly north of the $100s of millions” in primarily residential properties. For him, the process usually begins even before his clients have met brokers. Many of his clients, he said, have already identified the properties they intend to bid on before they come to the U.S. “The Russians that are coming to New York — especially in the last couple of years — are typically high-profile individuals,” he said. “The types of properties they are looking at reflect that — everything from Time Warner to 15 Central Park West to the Plaza. They jump from one building to the next just because it’s the flavor of the year.” To avoid road bumps that could delay an apartment closing, Mermelstein goes over the process for getting the money out of Russia carefully with his buyers or their representatives long before they arrive, using flow charts and other graphic aids when necessary. “It’s never been a problem getting money out of Russia. The problem is typically how the money is made in Russia,” Mermelstein noted. “In order to move money out of Russia, you need to prove that taxes have been paid on those funds. And it’s not a country where people like to pay taxes,” Mermelstein said, adding that he only deals with clients who actually pay their taxes. Still, “problems occur when you have made a lot of money in Russia and now you are interested in investing out of Russia because you have to disclose you have made the money and paid taxes on it,” he explained. “It’s a question of whether they want to do that because you are exposing yourself to prying eyes.” Many are also unfamiliar with the idea of transferring money to an attorney’s escrow account (which is standard procedure here). Mermelstein advises the client on their

Homegrown tactics Nonetheless, money is, for the most part, the least challenging component of working with Russian clients. “Because they are extremely wealthy, sometimes they land here and call you and say, ‘I want to see properties within the hour,’ ” noted Elliman’s Jacky Teplitzky, who said she’s done about 10 deals worth about $50 million with Russian buyers, including several at the Time Warner Center. “You cannot say, ‘No.’ You can’t say, ‘Sorry, I have another appointment,’ or, ‘Sorry, I can’t find the other broker.’ If you do, it’s a problem. They will not wait for you. They will run.” Shtainer said most of her clients are among the smartest and best-prepared she has dealt with. She recalled taking one client to see an apartment at 15 Union Square West. He knew which days the farmers’ market was out front and how that would affect the view. “You have to understand who you are,” she said. “You are the gatekeeper and the authority, and you better know your information front and back because they will ask you about every building and every floor plan. They like information and sometimes they will know it before you.” As many brokers and industry figures have discovered, some of these high-achieving buyers aren’t reticent about importing the same techniques in New York that they used to get ahead back home. A little less than a year ago, for instance, one of Mermelstein’s clients purchased a new condo for $7 million and asked Mermelstein to use his banking contacts to help him refinance the mortgage on the property. Mermelstein found bankers willing to do so if the client agreed to open an investment relationship with the same bank. The client agreed. Then the day the deal closed, the client called to say that his financial situation had changed and he would not honor the investment relationship. “These are very savvy individuals that are used to taking advantage of the system from which they are coming,” said Mermelstein. “Unfortunately, whenever they have the opportunity to take advantage of the situation, they take advantage of the situation. And sometimes they take advantage of people. “The flip side is everyone wants to deal with them because they have the money,” he said. TRD www.TheRealDeal.com January 2012 00

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∞

United Decorators

1486 Coney Island Ave Brooklyn NY 11230 M-Th: 8:00-5:00, F: 8:00-3:00 Closed Saturday Sunday 11-3 by appointment 718-253-9300 or 212-644-6500 uniteddecorators.hdwfg.com

∞ 58,000 SF Building ∞ 2 story covered parking ∞ .5 mile from the LIE at exit 33 ∞ .5 mile away from LIJ Community Drive campus

Exterior improvements: Building façade, landscaping and parking lot Interior improvements: Lobby, common areas, bathrooms, HVAC systems and elevators

90% FINANCING AVAILABLE! – (516) 773-0010 – Evan@NamdarRealtyGroup.com Kelly Koukou – (516) 677-1744 – Kelly.Koukou@CBRE.com

Follow Us At Facebook or Twitter * Manufacturer’s rebate offer valid for qualifying purchases made 9/15/12 – 12/15/12. A qualifying purchase is deﬁned as a purchase of any of the product models set forth above in the quantities set forth above. If you purchase less than the speciﬁed quantity, you will not be entitled to a rebate. All rebates will be issued in U.S. dollars, in the form of an American Express® Prepaid Reward Card. This rebate offer may not be combined with any other Hunter Douglas offer or promotion. © 2012 Hunter Douglas. All rights reserved. All trademarks used herein are the property of their respective owners.

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The American Institute of Architects New York Chapter presents the Around Manhattan Official NYC Architectural Boat Tour. Tour highlights include One World Trade Center, Frank Gehry’s 8 Spruce Street, Jean Nouvel’s 100 11th Avenue condos, the Standard Hotel, the Woolworth Building, the Brooklyn Bridge and the Harlem River bridges. Chelsea Piers, Pier 62. 2 to 4:45 p.m. Fee: $75. Information and registration: www.aiany.org.

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The Building Owners and Managers Association of New York hosts a dinner dance entitled “Sail Under the Stars.” This networking event, held on the Hornblower Hybrid yacht, will feature cocktails, dinner and dancing. Pier 40, 353 West Street. 5:30 to 11:00 p.m. Fee: $375. Valet parking included. Information and registration: www.bomany.org.

The Real Estate Board of New York hosts its annual Fall Benefit Fair. Participating vendors include Liberty Mutual, longterm care and health insurance representatives, elder care lawyers and more. Mendik Education Center, 570 Lexington Avenue. 10 a.m. to 1 p.m. Free. Information and registration: www.rebny.com.

The Council of New York Cooperatives & Condominiums hosts its 32nd-annual Housing Conference, with classes and exhibits focused on the interests and needs of New York co-ops and condos. Topics include leadership skills for board presidents, managing reserve funds and co-op admission policy and procedures. Baruch College, 55 Lexington Avenue. 8 a.m. to 4:30 p.m. Fee: Free for CYNC member buildings, $85 for CNYC subscribers, $185 for nonmembers. Information and registration: www.cnyc.com.

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Massey Knakal Realty Services presents Massey Knakal Multifamily Summit & Operations Academy 2012. Jeff Blau, CEO of the Related Companies, will give the keynote address. Other speakers will include Hal Fetner, president and CEO of Durst Fetner Residential; Francis Greenburger, chairman and CEO of Time Equities; and Edward Kalikow, president of the Kalikow Group. McGraw-Hill Conference Center, 1221 Sixth Avenue. 8 a.m. to 4:30 p.m. Fee: $345. Information and registration: www.mkmultifamilysummit.com.

The Institute of Real Estate Management hosts its annual awards dinner. Honorees include Hector Pinero, senior vice president at Related Management Company, and Bob Friedrich, president of Glen Oaks Village. The Water’s Edge, 401 44th Drive, Long Island City. 6:30 p.m. Fee: $200. Information and registration: www.iremnyc.org.

The Real Estate Lenders Association hosts a “New York Breakfast Meeting” with guest speaker Arthur Mirante II, a principal and tri-state president of Avison Young. The Yale Club, 50 Vanderbilt Avenue. 8:30 to 10 a.m. Fee: $50. Information and registration: www.rela.org.

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The New York State Association for Affordable Housing hosts its first Fall Awards Reception. The keynote speaker is Martin Dunn, founder and president of Dunn Development. The Yale Club, 50 Vanderbilt Avenue. 5:30 p.m. Fee: $350 for members, $450 for nonmembers. Information and registration: www.nysafah.org.

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The Association of Real Estate Women presents a luncheon entitled “Changing New York’s Skyline, One Building at a Time.” Tommy Craig, senior managing director for Hines’ New York tri-state region, will be the guest speaker. Club 101, 101 Park Avenue. 11:30 a.m. to 2 p.m. Fee: Free for AREW members, $90 for CREW Chapter members, $120 for nonmembers. Information and registration: www.arew.org.

CAPRATE Events presents the New Jersey Apartment Summit & Expo. Speakers will include Michael Fasano, vice president and regional manager at Marcus & Millichap, and Ronald Ladell, senior vice president at AvalonBay Communities. Panel topics range from multi-family investment to development and leasing. Hamilton Park Hotel & Conference Center, 175 Park Avenue, Florham Park, N.J. 8 a.m. to 4 p.m. Fee: $299. Information and registration: cre-events.com/njas2012.

The New York Building Congress presents its Industry Recognition Dinner. Honorees include Peter Marchetto, president of Americas, Tishman Construction Corporation; and George Pierson, president and CEO of Parsons Brinckerhoff. Former Lieutenant Governor Richard Ravitch will receive the George A. Fox Public Service Award. Grand Hyatt New York, 109 East 42nd Street. 6 p.m. Fee: $1,200 for priority seating, $850 for general tickets. Information and registration: www.buildingcongress.com.

The New York Society of Architects hosts its 106th-annual Awards Dinner Dance. Honorees will include John di Domenico, president of di Domenico + Partners; Dolly Williams of A. Williams Construction; Thomas Hanrahan, dean of Pratt Institute’s School of Architecture; Elliott Glass, president of Glass and Glass Architects; and Anthony Morali of Morali Architects. Tribeca Rooftop, 2 Desbrosses Street. 6:30 to 10:30 p.m. Fee: $250 for individual members, $450 for couples, $300 for nonmember individuals, $550 for nonmember couples. Information and registration: www.nysarch.com.

The American Institute of Architects hosts “Mexican Architecture Now: A Dialogue with Mauricio Rocha-Iturbide.” Rocha-Iturbide, a provocateur known for adapting design to distinct environments, will discuss the relationship between design, building and usage processes in his own work. The Center for Architecture, 536 LaGuardia Place. 6 to 8 p.m. Fee: Free for members, $10 for nonmembers. Information and registration: www.aiany.org.

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10/24/12 5:53 PM

Web hits: The month in review Steven Witkoff

ONLINE

COMMERCIAL SALES OFFICE LEASES RETAIL LEASES

THE CLOSING THE DATA BOOK EVENTS

MAGAZINE

MULTI-MEDIA

Joan Swift

701 Seventh retail JOB BOARD

TIPS

SOUTH FLORIDA

By Adam Pincus Real estate developer Steven Witkoff said the retail portion of 701 Seventh Avenue would bring in about $50 million a year from rent and signage rights. “I believe the rental numbers in Times Square will far outstrip rents on Fifth Avenue,” Witkoff said last month. Witkoff, CEO of the Midtown-based Witkoff Group, was part of a large group including Howard Lorber’s Vector Group and Michael Ashner’s Winthrop Realty Trust that purchased the site for $375 million. The buyers plan to develop 701 Seventh Avenue the site with retail on the lower levels and a hotel above. Barry Sternlicht’s Starwood Capital Group and Starwood Property Trust provided up to $475 million in financing. But one retail critic said he doubted Witkoff would be able to get $50 million because rents are slightly lower just outside the Times Square Bowtie and because Witkoff may not get as much income as he expects to from the signage.

Elliman nabs Citi Habitats’ new development chief By Katherine Clarke Clifford Finn, Citi Habitats’ head of new development marketing, is departing the brokerage to join Prudential Douglas Elliman’s new development marketing arm, Elliman announced last month. His team of nine will join him in the switch to Elliman. Following Finn’s departure, Citi Habitats will partner with Corcoran Sunshine Marketing Group in all its new development endeavors, Citi Habitats president Gary Malin told TRD in a statement. Finn, who spent more than eight years at Citi Habitats, spearheaded the marketing for notable rental properties as well as condos, including Silverstein Properties’ Silver Towers, Forest City Ratner’s New York by Gehry and Extell’s the Ashley and the Aldyn. Finn’s departure comes at a pivotal time for the city’s largest rental firm. As TRD has reported, it’s closing its Gramercy-area offices in an effort to consolidate its presence in the neighborhood and expand elsewhere. It is also set to unveil a new website in the Clifford Finn coming months.

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