The Real Deal February 2013 by The Real Deal

Cuomo’s real estate record

The 57th Street building boom

Rebranding blitz for NYC firms

Is the rental slowdown real?

113

Brokers hobnob at Fashion Week

THEREALDEAL

www.TheRealDeal.com

Changes at Citi Habitats

Inside the shake-ups at NYC’s biggest rental firm BY KATHERINE CLARKE Tongues have been wagging at Citi Habitats over a series of recent changes, including some high-level departures, the shift of the compaFEATURE STORY ny’s new development arm to its sister firm and a reduction in agents and offices. But execs at the rental behemoth say the changes are part of a strategic repositioning and are good for business.

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

Vol. 11 No. 2 February 2013 $3.00

Perils of going public In a controversial move, Tony Malkin is gearing up to issue an IPO for the city’s most iconic building. Can he pull it off? BY C.J. HUGHES The market for initial public offerings by real estate companies was hot in 2012. While this year is not expected to be as sizzling, there are some highly anticipated IPOs planned. The most buzzed-about is the portfolio that includes the Empire State Building, which is controlled by Malkin Holdings and which SPECIAL REPORT has already received SEC approval. But before the IPO can be issued, company head Tony Malkin must clear a hurdle — getting approval from the building’s other investors.

See story on page 64

A surprisingly big pipeline of projects Applications jump 55% for new Manhattan buildings BY ADAM PINCUS A TRD analysis shows a lot more construction coming down the pike than has been previously reported. Manhattan building applications jumped 55 percent in 2012, hitting their highest level since 2007. See story on page 60

Plaintiffs unite Class-action cases with real estate ripple effects

Gary Barnett, beyond One57

Who owns New York’s residential brokerages? From families to corporate parents, a look at the

BY ADAM PINCUS Gary Barnett has received a lot of media attention lately, most recently for his über-luxe, under-construction One57 condo and hotel. But that’s far from his only project. He has at least 11 active Manhattan projects that total nearly 6 million square feet— more than any other developer in the borough.

BY KATHERINE CLARKE New York City’s real estate firms may seem similar on the surface. But behind the scenes even firms of similar sizes and reputations can have vastly different ownership structures. This month, TRD shined the spotlight on different brokerages — from giants like Douglas Elliman to family firms like Stribling to private partnerships like Terra Holdings — to see who holds the purse strings, how decisions are made and what

See story on page 40

See story on page 44

Developer has more active projects than any rival

PHOTO CREDITS ARE HERE

AT A GLANCE Not-for-sale by owner Call it “investigative brokering.” As residential inventory has plummeted in recent months, more New York City buyers’ brokers have sought to find and persuade homeowners to sell, even if they have no intention of moving. See page 30.

Price relief for Midtown South? Brokers say a recent megabuilding purchase could bring price relief to office tenants in Midtown South. They predict that the new buyers will be aggressively looking to fill vacant space. See page 24. 345 West 14th St.

Malkin Holdings president Tony Malkin is planning a $1 billion IPO for a portfolio that includes the Empire State Building.

See story on page 48

See page 114.

Invesco Real Estate had virtually no presence here two years ago. Since then, however, it has been involved in a dozen NYC deals worth about $2 billion. See page 56.

See story on page 36

BY HAYLEY KAPLAN Recently, plaintiffs have banded together to file Hurricane Sandy-related lawsuits against TF Cornerstone and Extell Development, and to take on real estate website Zillow and Goldman Sachs. Inside: a rundown of the suits that could have a ripple effect in the industry.

Ofer Yardeni on shaving his head

FACT

decision makers and purse-string holders at local firms

it all means for daily operations.

Owners at NYC firms and their stakes Elliman: Vector Group 50% Warburg: Fred Peters 51% Bellmarc: Neil Binder 65% Stribling: Elizabeth Stribling and daughter 100%

Meatpacking condo exudes elegance DDG Partners’ 345 West 14th Street made a splash this summer with its construction shrouding by Japanese artist Yayoi Kusama. Critic James Gardner says that while the condo will not have the same visual pizazz, it will have its own quiet elegance. See page 66.

Burger on a roll BHS super-broker John Burger is on a hot streak — with $88 million in sales in one month. See page 52.

www.TheRealDeal.com

MALKIN PHOTOGRAPH BY SEAN LEE; YARDENI PHOTOGRAPH BY MARC SCRIVO; MEATPACKING DISTRICT PHOTOGRAPH BY DEREK ZAHEDI

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Congratulations to this Yearâ&#x20AC;&#x2122;s Winners

2012 Broker of Year

2012 Agent of Year

2012 Listing Broker

Ney York / New Jersey

Connecticut

Company Wide

Richard Orenstein

Nancy Dauk

Brian Lewis

2012 Most Sales Deals Closed Connecticut

Eileen Hanford

2012 Broker of Year

Louise Phillips Forbes

Brian Lewis

Richard Orenstein

Kervin Vales

Terrence Le Ray

Park Avenue

West Side

SOHO

East Side

Brooklyn

2012 Broker of Year

2012 Agents of Year

2012 Broker of Year

The Boland Team

Jeremy Bolger and Neal Young

Matt Brown and Peter Cossio

Tito Ghose

Village

Development Marketing

New Jersey

Commercial

PRODUCERS COUNCIL Top 5% Grossing Agents

Joanna Benigno I Jeremy Bolger I Lauren Cangiano I Maria Cangiano I Peter Cossio I Nancy Dauk I Dean Feldman I Christopher Finlay Amelia Gewirtz

Barbara Godson

Charles Homet

Eloise Johnson

I I

S. Christopher Halstead Enid Katze

Fern J. Hammond

Susan Kennedy

Emma Kerins

I I

Eileen Hanford

Ari Harkov

Lisa Holland-Davis

Michelle Kim

Sandra M. Lauer

Brian Lewis

Warner M. Lewis I Becky Munro I Suzanne Okie I Richard Orenstein I John Parsegian I Andrew Phillips I June Phillips I Louise Phillips Forbes Astrid Pillay I Monica Podell I Pat Publik I Richard Rosenthal I Perry Roth I Dina Scheinman I Anna Shagalov I Barry Silverman I Laurie Silverman Dorothy Somekh I Lawrence F. Sullivan I Jeffrey Tanenbaum I Elaine Tross I Kervin Vales I Victoria Vinokur I Janet Weiner I Barbara Wilson Pamela Wolfe I Neal Young * Halstead Property Company-wide

Meet these agents at halstead.com/agents

Congratulations to this Yearâ&#x20AC;&#x2122;s Winners

2012 Highest Sale Deal of Year

Company Wide

2012 Most Rental Deals Closed

Christine Saxe

S. Christopher Halstead

Senad Ahmetovic

New York / New Jersey

2012 Highest Rental Deal of Year

Jeremy Bolger and Neal Young

2012 Most Sales Deals Closed

Company Wide

2012 Broker of Year

2012 Agent of Year

DeAnna Rieberm

Amela Kadric

Mary Stapleton

Jennifer Linick

Nancy Dauk

2012 Agent of Year

Lawrence F. Sullivan

Christopher Finlay

Diane Eliades

Helen Cusa

Ann Lineberger

Upper Manhattan

New Canaan

Riverdale

Greenwich

Hudson Valley

Stamford

Hamptons

Westport

Darien/Rowayton

Wilton

Diamond club Individual transactions over $10M Thomas Brophy I Todd Buchanan I Don Correia I Nancy Dauk I Mindy Diane Feldman I Dean Feldman I Christopher Finlay I Louise Phillips Forbes I Mark Friedman Barbara Godson I S. Christopher Halstead I Fern Hammond I Pat Harbison I Eloise Johnson I Jill Jordan I Emma Kerins I Brian Lewis I Florean Mader Becky Munro I Christine Oâ&#x20AC;&#x2122;Neal I Richard Orenstein I Judy Oston I John Parsegian I Monica Podell I Nancy Rapp I Richard Rosenthal I Dina Scheinman Lisa Schuller I Bruce Silverman I Laurie Silverman I Dorothy Somekh I Jill Sloane I Joseph Truglio I Kervin Vales I Linda VanderWoude I Arlene Weidberg Pamela Wolfe I Ethan Woods I Joyce Yan Zhang

Meet these agents at halstead.com/agents

Highlights NURSERY SCHOOL

F E B R U A R Y

2 0 1 3

early spring for brokers 16 An So much for a winter slowdown: Demand for apartments is high despite the cold.

taxman cometh 18 The After a rush to close deals in 2012, the fiscal cliff deal now seems more likely to chill sales.

spec tower game 20 The What does Microsoft’s new lease mean for 11 Times Square — and how are other spec office towers holding up?

11 Times Square

‘The Dodgers saved my life’ Kalmon Dolgin, the head of the eponymous family business, talks outer-borough deals and the importance of the Brooklyn Dodgers. Kal Dolgin in his Brooklyn office

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

words 26 InThistheir month’s funniest and most

insightful real estate–related comments.

Transforming design into reality

Day in the life Time Equities’ CEO Francis Greenburger not only puts together real estate deals, he also hobnobs with famous authors like Dan Brown.

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

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

Governor Andrew Cuomo

Francis Greenburger

Not-for-sale by owner

Spotlight on Cuomo

With scarce inventory, buyers’ brokers convince owners to sell.

A breakdown of the governor’s real estate ties, from his policies to his big industry donors.

makes it official 34 Catsimatidis Grocery mogul and real estate developer John Catsimatidis finally launches his mayoral bid. Malkin Holdings president, Tony Malkin

IPOs on the horizon

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

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

A look at real estate companies going public in 2013 — including the Malkins’ highly anticipated offering, which includes the Empire State Building.

www.TheRealDeal.com March 2012 00

2012 Closings S ince 2005, we have invested in excess of $1 billion in the origination and acquisition of commercial mortgage loans collateralized by multifamily, retail, office and light industrial properties throughout the United States. $23,500,000

$22,000,000

$21,550,000

$12,750,000

Distressed Note Acquisition Multifamily Property Brooklyn, NY October 2012

New Loan Origination Multifamily/Retail Property Soho - New York, NY September 2012

Distressed Note Acquisition Multifamily Property Brooklyn, NY May 2012

Note Financing Multifamily Property Brooklyn, NY December 2012

$12,640,000

$9,950,000

$7,023,000

$7,000,000

Distressed Note Acquisition Multifamily Property Staten Island, NY May 2012

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

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

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

$6,375,000

$6,340,950

$5,750,000

$5,660,000

Distressed Loan Pool Acquisition Multifamily Properties Brooklyn, NY June 2012

Distressed Note Acquisition Multifamily Property Brooklyn, NY September 2012

Note Financing Multifamily Property Queens, NY December 2012

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

$5,428,638

$5,400,000

$5,450,000

$3,850,000

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

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

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

Distressed Loan Pool Acquisition Multifamily Properties Manhattan, NY July 2012

$3,750,000

$2,950,000

$1,870,000

$1,470,000

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

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

Distressed Note Acquisition Industrial Property Brooklyn, NY May 2012

Distressed Note Acquisition Multifamily Property Brooklyn, NY September 2012

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

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

Highlights continued

COURT ROOM

Gary Barnett: beyond One57

Who owns NYC’s brokerages?

The developer has, of course, been making waves for a while, but he’s now got more active sites than any of his rivals.

A look at who controls the purse strings — from family members to corporate parents — at the city’s residential firms.

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

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

Frederick Peters is the majority owner of Warburg Realty.

Plaintiffs united

Burger on a roll

A branding bonanza

A rundown of the class-action lawsuits that are expected to have a real estate ripple effect.

BHS superbroker John Burger is on a hot streak — with $88 million in sales in a single month.

Experts weigh in on some of the residential world’s newest looks.

Invesco’s big NYC investment The Dallas-based firm did seven big deals in 2012 and isn’t slowing down.

than meets the eye 60 More Exclusive TRD analysis finds dramatic spike in the number of planned construction projects.

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

Changes at Citi Habitats A behind-the-scenes look at the recent changes at the rental behemoth — and why company execs say it’s good for the bottom line.

Some 2,200 people turned out for the trade group’s annual banquet.

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

National Market Report

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

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

108

Calendar of Events Check out this month’s activities.

112

New REBNY chairman Rob Speyer and Mayor Michael Bloomberg

Cohen, a.k.a. “the Big ‘O’ ” 114 Ofer The Stonehedge CEO, on shaving his head and the celebrity of real estate.

10 February October 2012 10 2013 www.TheRealDeal.com www.TheRealDeal.com

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

Reports from around the country on significant developments and trends.

REBNY’s red carpet

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

Residential Market Report

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

113

We Heard

A lighter look at industry buzz.

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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

Rosewood Realty Group would like to extend our thanks to all of our clients & friends for helping us achieve another unprecedented year. Aaron Jungreis & his brokerage team are pleased to announce the following results:

IN 2012

$1,580,000,000 125 TRANSACTIONS CLOSED CONSISTING OF 240 PROPERTIES TOTALING 7,802 RESIDENTIAL UNITS AND 195 COMMERCIAL UNITS

WE ARE PROUD OF OUR PROFESSIONAL TEAM

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, Hayley Kaplan CONTRIBUTORS C.J. Hughes, David Jones, Adam Piore EDITORIAL OPERATIONS MANAGER Linden Lim WEB PRODUCERS Zachary Kussin, Christopher Cameron, Hiten Samtani PHOTOGRAPHERS Chris Martin, Marc Scrivo DIRECTOR OF MARKETING OPERATIONS Yoav Barilan ASSOCIATE SALES DIRECTOR Ross Fox

AARON JUNGREIS

DIRECTOR OF DIGITAL MARKETING AND STRATEGY Amir Talai

DAVID BERGER BILLY BILLITZER JONATHAN BIRNBAUM JAKE BLATTER DEVIN COHEN MICHAEL GUTTMAN SAMUEL KOORIS MICHAEL KERWIN RYAN PERKOSKI DAVID SCHEER DOV TEPPER

ADVERTISING SALES Eran Evron, Abi Laoshe, Nick Mascaro, Robert Stearns, Jennie Durkovic

WE LOOK FORWARD TO A GREAT 2013! ROSEWOOD REALTY GROUP 38 East 29th Street • New York, NY 10016 • 10th Floor 212 - 359 - 9900 www.rosewoodrealtygroup.com

12 February 2013 www.TheRealDeal.com

DEPUTY MANAGING EDITOR Candace Taylor

WEBMASTER Nima Negahban FINANCE DIRECTOR Kenneth Cyrus ADMINISTRATOR Junaid Zahid ADMINISTRATIVE ASSISTANT Virginia Durso 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 © 2013. Call 212-2601332 or e-mail news@therealdeal.com. Warning: It is illegal to photocopy or reproduce any part of The Real Deal without express written consent. For reprints and duplication rights, call 212-260-1332. Principal office: 158 West 29th St., New York, NY 10001. The Real Deal is published monthly. Annual subscriptions cost $95. Send check or money order to 158 West 29th St., New York, NY 10001.

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EDITOR’S NOTE

A page turner

elcome to the February issue, our biggest of the year. Between the regular monthly edition you are holding in your hands and our annual Data Book, we’ve got nearly 230 pages of New York real estate to gorge yourself on. This year’s Data Book, our eighth edition, pulls together the key market facts and statistics that real estate pros need to stay ahead of the game. It also covers the biggest transactions and the most active players throughout 2012 and provides a bird’s-eye view of what’s going on in the market overall. And, like the print issue beginning last month, it is now available on the iPad for the very first time. Here are the CliffsNotes for the Data Book: The residential market is on solid footing in Manhattan, led by luxury sales, and the development sector is continuing a comeback. The commercial market, meanwhile, saw office leasing and sales down in 2012 and retail flat overall, though there were certainly bright spots along some rapidly rising corridors. In the development portion of the Data Book, we examine nearly 100 condo projects in the pipeline in Manhattan as well as projects that have hit the market in the last several years. It’s the most comprehensive published list of condo developments out there. And with inventory tightening considerably, knowing which new developments are hitting the market is key for brokers looking to find homes for their clients. Of course, the biggest standout project on the market right now is developer Gary Barnett’s One57 on West 57th Street, which is the tallest residential tower in the city, and which looks likely to set a new price record for a New York City apartment when a unit in contract for more than $90 million closes. The fact that Barnett is planning to build another tower just down the block that would be even taller is testament to his seemingly boundless ambition, which we examine in a profile in this issue on page 40. The story, by reporter Adam Pincus, also

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14 February 2013 www.TheRealDeal.com

looks at how Barnett is currently constructing more projects and square footage in the immediate pipeline than any other developer — beating out public companies, real estate dynasties and other firms that have been around many decades longer than he has. Does the former diamond-trader-turned-developer possess a vision that he is able to carry out thanks to a steel will, or is it about a reckless disregard for risk? Maybe it’s both. “His risk tolerance is off the charts,” one executive at a rival development firm told us, pointing out that Barnett began building One57 with no construction loan in place, which insiders say is almost unheard of. In addition to looking inside the world of Barnett, we also take a look behind the curtain at some of New York City’s top residential brokerages, examining their ownership structure, in a story starting on page 44. Most residential firms in the city are not part of public companies, and while it’s easy enough to discern their ostensible leaders, from CEOs to senior vice presidents, who actually owns the company is another matter. It’s something that may not even be apparent to a company’s employees (and for those readers, knowing who you are making money for should make for a particularly interesting read). What reporter Kathy Clarke found runs the gamut — from a firm like Warburg Realty, where senior brokers have an ownership stake, to franchise models like Rutenberg Realty, where investors unconnected to the day-to-day running of the brokerage control a large portion themselves. We also take an in-depth look this month at one brokerage in particular, Citi Habitats, in a story starting on page 64. The behemoth firm, which has long been the top company for rentals in the city, has seen a contraction of late, with fewer employees and offices, the departure of some key personnel and the absorption of its new development division by sister company the Corcoran Group. Finally, we take a look at the real estate companies that will see initial public offerings this year. Last year was a banner year for IPOs, and it remains to be seen how 2013 will shake out. The most interesting (and one of the most contentious for some time) is an IPO that would take the Empire State Building public. Check out the story on page 36, and enjoy the (big) issue.

Stuart Elliott

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For brokers, an early spring

January felt more like March for busy agents, who expect the increased activity to carry through the normally slow winter BY HAYLEY KAPLAN o much for a winter slowdown. Even as the mercury dipped in January, demand for apartments was high. Driving the fast-moving market, experts said, were plunging inventory and low-interest financing. “Limited inventory options and increased demand will definitely push prices higher this winter,” said Lisa Strobing, an executive vice president at Bellmarc Realty, noting that January was as busy as springtime and saw “solid traffic.” The higher end of the market, which has been outpacing the rest of the market for some time, proved particularly strong in January, according to the Olshan Luxury Market Report. During the week ending Jan. 20 alone, some 19 contracts over $4 million were signed, with the majority of those pricey properties situated on Manhattan’s Upper East Side. By comparison, during the best week of January 2012, only seven deals over $4 million were signed, according to Olshan’s data. Last month followed a similarly busy December. As TRD has reported, in the

fourth quarter of 2012, sales in Manhattan spiked a dramatic 29.2 percent yearover-year to 2,598 closed deals, according to Douglas Elliman’s market report, which is prepared by appraisal firm Miller Samuel. The early spring of sorts is, of course, good news for brokers. Tom Stuart, a broker at Bond New York, said January kept him “really, really busy.” “[Starting the] second week of January, my phone has been ringing like crazy,” said Stuart. Andrew Barrocas, CEO of MNS, agreed, adding, “I’m surprised to see how quickly things are moving for January.” He predicted that an influx of new inventory — particularly new development — would flood the market by the end of the year, and continue to come online through 2015. Roberta Axelrod, the director of residential sales and leasing for Time Equities, said she expects the strong market demand to continue through the generally faster-paced spring season. “I think the period of reduced prices is nearing the end,” she said. “Interest rates are still attractive,

Southern Boulevard Portfolio, Bronx

[and] people are willing to come back into the market.” And that is good news for sellers, who “are sticking to their guns and asking aggressive prices as inventory is depleted,” said Daniel Hedaya, the president of Platinum Properties. But the tight market can be downright exasperating for apartment hunters. In 2012’s fourth quarter, the number of for-sale Manhattan co-ops and condos dropped to 4,749 units — the lowest level since 2000, according to Miller Samuel’s market report (see related story on

outbid on the well-priced properties.” Such bidding wars have become increasingly common, particularly for studio and one-bedroom units in the middle and lower ends of sales markets, sources told TRD. Stuart recently sold a studio co-op at 140 East 40th Street between Lexington and Third avenues for $345,000 — $6,000 over the asking price. Within 24 hours of hitting the market, the unit saw two competing bidders, he said. “When something good comes on the market, we’re getting a huge rush of inter-

“I’m surprised to see how quickly things are moving for January.” ANDREW BARROCAS, MNS page 30). Listings website StreetEasy’s fourth-quarter market report similarly showed that the average number of new listings per week in Manhattan declined 13.9 percent year over year to just 231 from 268. “Frustrated buyers have few options to choose from when looking for a New York apartment this year,” Strobing said. “They are surprised to find that they are being

West 116th Street Portfolio, Central Harlem

est,” Stuart said. “When [buyers] lose out on an apartment or two, they’re willing to go up above the asking price to get what they want.” Much of the interest in smaller units is, unsurprisingly, coming from first-time homebuyers, said Miller Samuel’s president, Jonathan Miller. “[In] the rent-versus-buy decision, the Continued on page 102

62-64 East 34th Street, Midtown Manhattan

95 Properties Closed in 2012

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Terms, conditions and fees of accounts, programs, products and services are subject to change. This is not a commitment to lend. All loans are subject to credit and property approval. Certain restrictions may apply on all programs. Offer cannot be combined with any other mortgage offer. 1 SureStart is a registered service mark of Citigroup Inc. Final commitment is subject to verification of information, receipt of a satisfactory sales contract on the home your client wishes to purchase, appraisal and title report, and meeting our customary closing conditions. This offer is not a commitment to lend and is subject to change without notice. There is no charge for the SureStart pre-approval, but standard application and commitment fees apply. 2 If your client is purchasing a home, we guarantee to close by the date specified in the purchase contract, unless prohibited by federal law*, and further provided that the date is at least 30 days after the application date and the date of the purchase contract. If the loan fails to close on time due to a delay by Citibank, your client will receive a credit towards closing costs of $1,500. Offer not available for refinance loans, co-ops, unapproved condos, residences under construction, community lending loans, and government loans. In Texas, the credit may not result in your client receiving cash back. (*Federal law requires certain disclosures be delivered to the borrower at least 3 business days before consummation. The guarantee to close does not apply if such disclosures are required and the closing is delayed due to the 3 business day waiting period.) 3 Eligible buyers receive .50% of the loan amount as a credit, which can be used to lower the interest rate by paying points or for other closing costs. For example, on a loan amount of $400,000 the credit is $2,000. The offer cannot be used to obtain cash from the transaction. Offer available on purchase transactions only, not refinance. This is a limited time offer. Citibank reserves the right to suspend, change and terminate the offer and promotion. Customer must apply and lock in rate by the offer end date to qualify. © 2013 Citibank. Citibank, N.A., Equal Housing Lender, Member FDIC. NMLS# 412915. Citi, Citibank, and Citi with Arc Design are registered service marks of Citigroup Inc.

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The taxman cometh After a rush to close deals in 2012, the fiscal cliff deal could now chill sales

BY TOM ACITELLI nyone who’s picked up a newspaper or logged onto the Internet in the last month knows that lawmakers cut a last-minute deal to avoid the so-called fiscal cliff, narrowly avoiding widespread tax increases and deep spending cuts. But now New York real estate investors and home buyers — along with their accountants — are watching closely to see how that deal will affect the residential and commercial markets here. The major impact for New York real estate, observers said, could come from increases in federal capital gains rates, as well as from a Medicare surcharge tied to President Barack Obama’s Affordable Care Act. Some speculate that the capital gains increases (which range from 5 percent to 8.8 percent on the margin) could cause a drop-off in the number of properties traded, as well as an increase in asking prices for residential and commercial real estate.

capital gains tax rates will rise from 15 to 20 percent for individuals making more than $400,000 in adjusted gross income, or AGI. For married couples, the threshold is $450,000. Investment income, including capital gains through real estate trades, is now subject to a 3.8 percent Medicare surcharge, depending on various modified AGI thresholds, including $250,000 for married couples filing jointly. These changes could translate into fewer properties changing hands in 2013, industry experts said. In fact, as The Real Deal and others have reported, there was a rush among homeowners to unload property before the end of 2012 in anticipation of tax changes. According to data from Miller Samuel Real Estate Appraisers, Manhattan apartment sales spiked 29.2 percent year-over-year in the fourth quarter, traditionally the slowest time of the year for sales. Manhattan sellers who did not unload their properties last year may now try to

“To the extent that the tax burden on me as a seller is greater … I’m less motivated to sell.” Receiver for New York State Supreme Court Directs Immediate Sale via Public

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FRANCIS GREENBURGER, TIME EQUITIES While experts said they don’t expect to see a “property cliff ” to follow the fiscal one, industry insiders forecast something of a chill. (See related story on page 34.) “If you’re a seller, you look at what you’re getting for the transaction, you look at what taxes you have to pay and you look at what’s left,” said Francis Greenburger, chairman and CEO of Time Equities, which owns 20 million square feet of property worldwide. “To the extent that the [tax] burden on me as a seller is greater … I’m less motivated to sell.”

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In the past, federal tax changes have significantly impacted the real estate market. Changes in 1986, for example, did away with major tax shelters for real estate investors, including the deduction from their gross incomes of losses from property investments. As a result, property values plummeted as investors fled the real estate market. The stock market nosedived, too, the following year. So far, at least, “that hasn’t happened” this time around, said Mitch Roschelle, head of the U.S. real estate advisory practice at PricewaterhouseCoopers. Observers noted, however, that the real estate market could see some impact from the fiscal cliff deal, which stipulated that

make up the difference through higher asking prices. “Are sellers going to try to recover? Of course they are,” said Jennifer Johnsen, executive sales director at brokerage MNS. Or in the words of Joel Rosenfeld, who teaches real estate finance and taxation at New York University’s Schack Institute of Real Estate: “You raise corporate taxes and the next you thing you know, you’re paying more for toothpaste.” Many investors, from individual homeowners to large-scale landlords, also moved property through gifts or transfers to trusts as 2012 wound down. “I had a lot of clients doing — or contemplating doing — significant gifts because they didn’t know what was going to happen, and they didn’t find out until January,” said Kenneth Weissenberg, a tax attorney and head of real estate client services at the accounting firm EisnerAmper. For those who didn’t make tax-related changes in 2012, accountants are now advising them to move profits from commercial real estate sales into other properties via a 1031 exchange. That allows sellers to defer taxes if they invest the profits from one real estate trade into another property within six months of the closing. “I will say the majority of those sellers will continue to use the like-kind exContinued on page 102

www.TheRealDeal.com March 2010

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1/29/13 12:49 PM

By the NumBers

The spec tower game Compiled by Christopher Cameron

Microsoft finds a home

Super spec tower

Russian restaurant

In the red?

Minskoff Downtown

Macklowe on Madison

Gem Tower 11 Times Square

UPPER EAST SIDE BY THE NUMBERS

Microsoft inked a 230,000-square-foot lease at the spec office tower 11 Times Square in December after construction forced it to leave its Manhattan headquarters at 250 West 55th Street. The tech giant negotiated a below-market rent in the low $60s per square foot at its new home. (Wall Street Journal) The deal with Microsoft may signal a new chapter for 11 Times Square, developed by SJP Properties. The 40-story, $1.2 billion tower has struggled to find tenants. While anchor tenant Proskauer Rose signed a 405,000-square-foot lease in 2010, the 1.1 million-square-foot building was only 40 percent occupied until Microsoft signed on. (New York Times) The 55,000 square feet of retail space at 11 Times Square sat empty for three years, until Global Food International, a Russian restaurant company, leased half of it in May 2012. The owners of 11 Times Square face a hefty annual tax bill of nearly $20 million. That, plus mortgage payments, means the building likely operates in the red, the New York Times reported. And while Proskauer pays $32 million per year in rent, it got 11 months free at the start of its lease, according to CompStak. Developer Edward Minskoff is constructing a 12-story, 400,000-square-foot spec office building at 51 Astor Place. Minskoff told TRD last year that he expects the project to cost north of $300 million, with asking rents ranging from $80 to $100 per square foot. Spec towers have a mixed record in Manhattan. The 30-story office tower at 510 Madison Avenue was completed in 2009 by developer Harry Macklowe, but remained almost entirely vacant for years. After narrowly avoiding foreclosure, Macklowe sold the 350,000-square-foot building in 2010 to Boston Properties. Since then, the tower has signed on 16 tenants to occupy nearly 280,000 square feet. Extell Development’s partially speculative Gem Tower, a 748,000-square-foot commercial condo and office rental building in the Diamond District, topped out in March 2012. Some 65 percent of the condos have either sold or are in contract, and Gary Barnett told TRD he’s in talks with an office tenant.

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PHOTOGRAPH FOR THE REAL DEAL BY MAX DWORKIN

This pencil drawing of Ebbets Field has an actual slice of the Dodgers’ former stadium affixed to it. Dolgin bought the drawing as a birthday present for his late father, Israel. Izzy, as he was called, died in 2005 after running Kalmon Dolgin for decades, at which point Kal moved into his office, leaving many of his father’s possessions in place. Izzy “worked every day until he was 92,” his son recalled.

Dolgin’s son Joshua made this drawing, dated 1979, in elementary school. It reads: “I want to be a real estate salesman because I want to work with my father.” Joshua, the only one of Dolgin’s three children to join the family company, is now a vice president and manages some of KDA’s larger assets.

or four generations, the Dolgin family has run Kalmon Dolgin Affiliates, a commercial brokerage and property owner founded in 1904. The Brooklyn-based company, which specializes in industrial properties, owns and manages “several million square feet of space” in the New York City area and across the country, according to copresident Kalmon “Kal”

the

Desk

of:kAlmon

Dolgin

The Dolgin brothers have offices next to each other; conflicts inevitably arise in a family business. “Sometimes you find you have to sublimate your ego,” Kal said. But the brothers get along well overall, and play a weekly golf game with their sons.

Dolgin, 69. “We are old-fashioned investors,” said Dolgin, who is named after his grandfather. “We buy and we hold.” Dolgin, who joined the family business as a broker in his twenties, now runs the company with his brother, copresident Neil Dolgin. Their office is at 101 Richardson Street, a modest single-story warehouse the company owns in Williamsburg. B y G uelda V oien

This photo, taken 13 years ago, shows members of the Dolgin family outside their Richardson Street office. “It was all manufacturing when we moved here” in 1972, said Dolgin, and the brokerage inked numerous industrial leases in the area. Now high-rise condominiums and coffee shops dot the neighborhood, and much of the firm’s business has moved to East Williamsburg and Bushwick.

This glass statuette in the shape of an oversized pill bottle was given as a memento to all the brokers — in including Kal, Neil and Joshua — who worked on KDA’s $125 million purchase of 17 medi medical buildings across the country in 2004.

This photo of Dolgin was taken at the L.A. Dodgers’ spring training camp. Brooklyn-born Dolgin credits the team with saving his life. When he was 11 and overweight he developed an eating disorder and dropped 38 pounds. As an inducement to eat, a family friend offered him tickets to a Dodgers game, where famed catcher Roy Campanella took him aside and said he’d have to eat if he wanted to become a pro player — Dolgin’s dream at the time. “I went home and had my first full meal in a year,” Dolgin recalled.

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Price relief for Midtown South? Brokers say the recent purchase of St. John’s Center could inject badly needed office space into the market BY ADAM PINCUS he recent sale of a hulking, threeblock-long office building straddling the border of Soho and the Meatpacking District may provide relief to tenants priced out of the famously tight Midtown South leasing market. That’s because the buyers — a partnership of Fortress Investment Group, Atlas Capital Group and Westbrook Partners who purchased the property from longtime investor Eugene Grant — could get more aggressive about wooing new tenants in with competitive leasing prices. The 1.3 million-square-foot St. John’s Center at 550 Washington Street has the largest floor plates in the city at 250,000 square feet each. It also clocks in as Manhattan’s largest block of office space — 700,000 square feet — on the market for the longest period of time, since 2006, a year before the building’s largest tenant, Merrill Lynch, vacated. But in the intervening years, few tenants seriously considered leasing there, industry insiders said, because of its tough leasing terms and Class C designation. But the December deal — which city records show valued the building at $540 million — could change all that. St. John’s Center should have no trouble attracting tenants. Two other millionsquare-foot buildings on the Far West Side of Manhattan — the Starrett-Lehigh building at 601 West 26th Street and the Terminal Stores building at 261 11th Avenue — have leased well and have low vacancies. John Lizzul, managing director at Newmark Grubb Knight Frank, said the St. John’s Center “should be able to compete” with both of those megabuildings. “The new ownership will certainly want to make deals [at St. John’s],” he said. Elsewhere in Manhattan, financial firm Jefferies & Company inked a large renewal lease for 450,000 square feet at 520 Madison Avenue in the Plaza District. That deal and others are “a fairly [positive] sign that we are going to have good activity this year,” said Dirk Hrobsky, managing director of the New York office for brokerage DTZ. Despite the Jefferies deal and other transactions, the overall Manhattan availability rate — which tracks space that is vacant now or is listed for lease at any time in the future — rose slightly last month to11.6 percent compared to the end of last year, according to preliminary figures from commercial brokerage Colliers

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Manhattan office stats AVAILABILITY RATE

AVG. ASKING RENT

Jan. ’13 4Q ’12

Manhattan 11.6% 11.5%

$56.00 $56.17

Jan. ’13 4Q ’12

Midtown 12.2% 12.0%

$66.56 $66.66

Midtown South 8.4% $47.04 8.0% $47.36

Jan. ’13 4Q ’12

Downtown 15.2% 15.4%

Jan. ’13 4Q ’12

$44.10 $45.49

Source: Colliers International

International. At the same time, the average asking rent in Manhattan dipped last month to $56 per foot.

Midtown For years now, technology firms have been looking beyond Midtown South’s Silicon Alley because of tight supply and high prices. Gaming and entertainment provider Alloy Digital is the latest example of this trend. According to CoStar Group, the firm is negotiating to sublease 29,416 square feet in Midtown on the 19th floor at 498 Seventh Avenue, a 936,611-squarefoot office building at 37th Street, far to the north of Silicon Alley. Joseph Mangiacotti and Chris Levinson of CBRE Group, who represent the sublease space, declined to comment. While Alloy Digital is looking to lock in space, the advertising media agency Initiative is planning to leave its offices at 1 Dag Hammarskjold Plaza at 885 Second Avenue, between 47th and 48th streets. The building’s owner, the Lawrence Ruben Company, last month listed 138,582 square feet of space spread over six floors, including the Initiative space. Initiative, a division of the global Interpublic Group, has a lease at the building that runs until the end of 2014, CoStar data showed. Despite the churn, Midtown’s office stats remained fairly flat last month. The average asking rent there fell by 10 cents per foot in January to $66.56 per foot, while the availability rate rose by 0.2 points to 12.2 percent, according to Colliers. Continued on page 100

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In their words...

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

“Liquidity is like beer at a frat party: Once you run out of it, there is no party.”

“I took the first apartment that a broker from Corcoran showed me. ... It is small and cramped and I hate it. I feel like I live in a dungeon. It is in Chelsea, east of Eighth Avenue, the neighborhood equivalent of a dungeon.”

Eastern Consolidated’s David Schechtman telling TRD about the flurry of fourth-quarter deals, which he attributed to widely available debt and equity in the lead-up to the fiscal cliff deadline in Washington.

Best-selling author Elizabeth Wurtzel, on her current Manhattan apartment. (New York Magazine)

“Obviously, if it were built today, there would be a pet-washing room. Pet-washing rooms are the new rooftop terrace.”

“Anybody want to buy a church?”

“What’s the world coming to when nobody will pay upwards of $5 million for a 4,600-square-foot carnival fun house staged terrifyingly with ventriloquist puppets and a huge bearskin rug?”

Bond New York senior vice president Jesse Buckler, on the amenities at 71 Nassau Street, which was converted to condos in 2006.

A Tweet by indie-rock group Arcade Fire after listing the Quebec church where its albums “Neon Bible” and “The Suburbs” were recorded.

Curbed.com writer Jeremiah Budin, on an elaborately decorated penthouse that has been on the market since 2007.

“People say that I’m buying houses all the time that I’m not buying. … Every time the press thinks I like a guy, they say I am buying a house next to them.” Singer Taylor Swift, in response to reports she purchased a $4.5 million house across from the Kennedy family compound in Hyannis Port after beginning a relationship with Conor Kennedy. (El Hormiguero) 26 February 2013 www.TheRealDeal.com

“It is a spiritual thing. I wanted to be at one with the tiger.” Former Bond New York agent David Villalobos, explaining to police why he jumped into a tiger den at the Bronx Zoo. (Associated Press)

“Dating and selling are similar. The dynamic is similar.” Halstead Property general sales manager Jim Gricar, explaining his theory on why brokers should dress as though they’re going on a date when preparing to meet a client. (Wall Street Journal)

“I just saw the most absurd ad campaign for a brokerage which included a hamburger recommendation and a dog (not a hot one). What next? Real estate brokers offering advice on fashion tips?” Core CEO Shaun Osher, via Facebook. www.TheRealDeal.com August 2006 00

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Francis Greenburger

ton Square Park. I wake up early [without an alarm] at around 5, though if I’m anxious I might get up as early as 3. I use that time for the e-mail avalanche and to process whatever paper mail I have from the day before. I don’t do e-mails during the day. 7:45 A.M. I eat every day at the same

The 63-year-old Time Equities chief executive was a child business prodigy. Now, he juggles new condo projects and famous writers.

time. I don’t eat bread and things like that for my weight, so my breakfast is always pretty much the same: fresh fruit mixed in a bowl with orange juice. Years ago, someone told me to try orange juice instead of milk in cereal. I will also have a little bit of cheese with jam, which I 55 Fifth Avenue, which is Time Equities’ headquarters

learned from my father, Sanford Green-

2 P.M. Every afternoon or so, I meet with my director of develop-

burger, who was a diabetic. He died of a

ment to talk about 50 West Street, a new condo we’re building in

stroke when he was 67, lying on a couch.

the Financial District. In 2005, I decided to develop it, but it was a long process. By the time we started to dig the foundation, the world fell apart. So we decided to close down the site and wait. But

8:45 A.M. I have the unfortunate burden Greenburger has a car and driver

of having a car and driver. As the family

[we predicted that the] better part of the condo inventory would

needs ebb and flow, there’s less for him

burn off by 2012. And with the World Trade Center development

to do, and I feel guilty, so I often ride

coming along, we felt there was a confluence of events in our fa-

with him to the office. I usually leave for the office just before 9.

vor. So here we are. We still have to finalize the financing. And we

Time Equities founder Francis Greenburger

reconceived the project by deciding not to build a hotel section. It will just be 200 units.

9 A.M. My days are pretty much booked. Today I had my weekly meeting with my asset managers at 9 to talk about various projects, like a shopping center in Nova Scotia. A discount department store wanted to buy out its lease. We also talked about a building we’ve made an offer on in Greenwood Heights, Brooklyn. It’s a rental, but it could become a condo some day. Our asset manager spent two or

Author Dan Brown, who is represented by Greenburger’s late father’s publishing firm

4:30 P.M. I try to work out twice a week and play tennis once a week. I haven’t played with that many real estate people in a few years, but I try to convert tennis pros to real estate people. Javier Lattanzio was an Argentine champion who now works for us as a broker. He has also taught tennis to Harry Macklowe and

three hours exploring the area; one of his indices was if there are

Tom Elghanayan. Last night, I went home at 4:30 to work out

no tattoo and piercing shops, then it’s not gentrifying. But there

at the gym in my home for an hour, then spent some time with

were some.

my daughter Claire [one of four of his children] before going back to the office.

NOON I usually eat lunch around noon. Last Wednesday, I had lunch at 12:30 with Heide Lange, a literary agent with Sanford J. Green-

6 P.M. Last night, I had to return to the office around 6 to review

burger Associates. It’s my dad’s old firm, located in this office. My

applications for Art Omi International, an artist colony I found-

dad mostly focused on European writers like Kafka, though today

ed in Ghent, N.Y., near one of my country houses. We had 1,000

we represent Dan Brown and Nelson Demille. I worked at my father’s

Greenburger plays tennis weekly

applications for 20 spaces. I’m not an artist myself, but I collect

agency part-time after school when I was 12. I was sort of a business

it and support it. My own family, frankly, was too poor to be very

prodigy as a kid. I managed two rock bands and then started Time

philanthropic. Their line when somebody came knocking on the

Equities in 1964. The first rental I bought was 23 Barrow Street,

door was always, “We gave at the office.”

and in 1979, I converted my first co-op, on Bethune Street. Since 8 P.M. I came home after [reviewing those applications] and

then, I’ve probably converted 10,000 units in 100 buildings. Anyway, I originally met Heide when we were teenagers at Washington Irving Evening High School, which is where I went after I dropped

Gotham Bar and Grill, where Greenburger has a regular table

ate dinner with my wife, Isabelle Autones. I typically record the “NewsHour” on PBS and try to watch some of it before we go to

out of Stuyvesant at 15. But I didn’t have Heide’s phone number.

bed at 9:30 or 10. This is my circadian rhythm: I’m not good too

So I called every Lange in Queens. Seven people hung up and the

late at night, but I can wake up in the morning and be ready to go.

eighth was her house. Anyway, we ate at Gotham Bar and Grill [on

By C. J. Hughes

East 12th Street]. I had my typical drinks: The waiter brings me a glass of flat water, a Diet Coke and an Arnold Palmer.

28 February 2013 www.TheRealDeal.com

Greenburger watches the news program daily

*Interview has been edited and condensed.

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

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Not-for-sale by owner

In a market with scarce inventory, buyers’ brokers convince homeowners to sell

By Leigh Kamping-Carder he couple’s budget was reasonable: a one-bedroom apartment in a doorman building on the Upper East Side for about $650,000. But they didn’t want to face a brick wall, take on major renovations or pay more than $2,000 a month in maintenance costs. And after several months of hunting, they had come up empty-handed. “We were stuck — there wasn’t anything there,” their broker, Bond New York’s Margaret Garvey, told The Real Deal. So Garvey took a somewhat unconventional step: She sent about 100 letters to apartment owners whose units matched the couple’s criteria. Before long, she’d visited about six potential homes for her clients, and one of them fit the bill. The couple ultimately paid $618,000 for a one-bedroom at the Plymouth House, a postwar building at 235 East 87th Street. The sale closed on Dec. 20. “I thought I was just going to do something a bit different to try and see if I could shake out a property for them,” Garvey said. And she isn’t the only broker contacting the owners of unlisted homes. More and more agents these days are seeking to persuade homeowners to sell, even if they initially have no intention of moving. Call it a scavenger hunt or “investigative brokerage,” as one veteran put it. The strategy is one that brokers have used for years to satisfy clients looking for those needle-in-ahaystack properties. (This is in contrast to “whisper listings,” where homeowners are looking to sell but have not publicly listed their homes.) But as inventory has shrunk in the last year — and plummeted in recent months — it’s a tool that brokers are employing more often these days, insiders said. And rather than searching only for rare gems in exclusive buildings, brokers are now also looking off-market for even run-of-the-mill homes, provided they have a desirable mix of amenities and a good location. “These are fundamentally off-the-market transactions,” said Ray Schmitz, a broker at Rutenberg Realty who has several of these deals in progress. “And unless you pay attention and really dig, you might just not notice how much this is going on.”

Unearthing listings In the fourth quarter of 2012, the number of Manhattan co-ops and condos listed for sale plunged to 4,749 units — about a third fewer than the same period the year before, and the lowest level since 2000, according to the most recent market report from appraisal firm Miller Samuel. The dearth of inventory is partly the result of an ongoing shortage of new construction 30 February 2013 www.TheRealDeal.com

since the credit crunch, compounded more recently by a burst of winter sales in advance of the fiscal cliff deadline. Faced with these conditions, brokers are employing a host of strategies to unearth off-market apartments for their clients: mailing letters, making phone calls, tapping social networks and seeking tips from

already lived in the Upper East Side co-op but wanted a larger unit there. (Another of Erickson’s clients, real estate investor Stephen Meringoff, ultimately paid $21 million for the spread. Erickson declined to discuss the transaction, citing confidentiality agreements.) Gea Elika, whose firm, Elika Real Es-

was willing to sell, she said, and her client ended up buying the apartment. Rutenberg’s Schmitz, meanwhile, prefers to use the phone. After doing some hunting for a phone number online, he calls the potential seller at work or the office. “This is not random prospecting for anybody that wants to sell,” he noted. “It’s very, very targeted.”

“If you don’t have the inventory, then you have to find it.” Kirk Henckels, Stribling & Associates

Bond New York’s Margaret Garvey at the Plymouth House at 235 East 87th Street, where she found an off-market apartment for her clients

From left: The Verona, where Sotheby’s International Realty broker Roger Erickson convinced financier Jeffrey Sobel to sell his penthouse; Gea Elika of Elika Real Estate said he sends personalized letters to homeowners he hopes to convince to sell, sometimes with a note from the client; Town Residential’s Dana Power, who recently sold a Fifth Avenue apartment after writing a letter to the seller.

building residents and staff (who may know of recent divorces, deaths or job transfers). “What you do as a broker, if you’re good at what you do, is you start digging,” said Kirk Henckels, the director of private brokerage at Stribling & Associates. “If you don’t have the inventory, then you have to find it,” he added. In a recent high-profile example, Sotheby’s International Realty broker Roger Erickson reportedly convinced financier Jeffrey Sobel to sell his penthouse at the Verona after mailing a request on behalf of a client who

tate, works exclusively with buyers, said he sends personalized letters to homeowners he hopes to convince to sell. He said he typically includes details on the would-be buyer, such as their financing situation and time line for moving, as well as a personal note from the client himself. A follow-up call is sometimes a second step. Town Residential’s Dana Power used this strategy recently to get a deal done. On behalf of her client, she mailed a letter to the owners of all eight units in an exclusive Fifth Avenue building. A “prominent billionaire”

Not surprisingly, homeowners react differently to these requests: Some jump at the chance to make a quick buck, while others hang up the phone. Schmitz said that he often calls 20 people before getting a bite. But the most prevalent reaction is skepticism — with good reason. It’s somewhat common for brokers to target homeowners, promising a ready and willing buyer, when in fact no such buyer exists — they are simply “fishing” or “farming” for listings, insiders said. This technique is generally considered Continued on page 100 PHOTOGRAPH OF GARVEY FOR THE REAL DEAL BY CHRIS MARTIN www.TheRealDeal.com March 2012 00

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Spotlight on Cuomo

A breakdown of the governor’s record on real estate

overnor Andrew Cuomo has been front-and-center in the fight for billions in federal funding to rebuild in the wake of Hurricane Sandy, much of which will trickle into the real estate industry in New York City. But that crusade — which he’s waged along with Mayor Michael Bloomberg and New Jersey Governor Chris Christie — is not his only connection to the real estate industry. In fact, the gover-

Bedford or bust

nor’s real estate ties date back to his post as U.S. Secretary of Housing and Urban Development under President Bill Clinton. Today he counts powerful real estate players like Rob Speyer and Leonard Litwin among his political supporters. This month, The Real Deal tracked Cuomo’s real estate record, from the initiatives he’s pursued to his personal properties. B y G uelda V oien

Rob Speyer

During his first gubernatorial campaign in 2001, Cuomo raised eyebrows for claiming a Mount Kisco address, when in fact the house he and then-wife Kerry Kennedy Cuomo had bought for just under $1 million was technically in the pricier town of Bedford, the New York Times reported. While the Times described Westchester as a “bewildering overlay of jurisdictions,” some noted that living in a less-wealthy town was more politically amenable for Cuomo, a Democrat.

The Aqueduct racino

Affordable housing

Cuomo is widely credited with turning around HUD during his tenure there from 1997 to 2001. But since the 2008 financial crisis, he has come under fire for the homeownership programs he expanded while at the federal agency. “Cuomo was pushing mortgage bankers … basically saying you have to offer a loan to everybody,” former Fannie Mae executive Edward Pinto told the Buffalo News, even going as far as to blame Cuomo for the subprime crisis. Cuomo remains committed to affordable housing in general, though. Last month, he pledged to steer $1 billion toward low- and middle-income housing in New York City.

Leonard Litwin

King of New Castle?

Now that he’s governor, Cuomo is involved in a similar fracas. Cuomo and his girlfriend, celebrity chef Sandra Lee, live in a mid-century colonial home in Westchester County. Lee bought the four-bedroom abode for $1.22 million in 2008, according to the Times. But in 2011, the paper reported that the house, which the couple says is located in Mount Kisco, is actually in the far-wealthier adjacent town of New Castle. The house lies within New Castle’s borders, but has a Mount Kisco mailing address, the Times said.

Sandy repairs

Cuomo initially lobbied Congress for roughly $40 billion in federal funds for Sandy cleanup. But two bills passed last month by Congress have allotted about $60 billion for Sandy relief; New York State will receive about half of that in installments over the coming years, according to news reports.

Andrew Cuomo Barry Gosin

Real estate donors

Real estate figures have been generous to Cuomo’s 2014 reelection campaign. Developer Leonard Litwin, whose Glenwood Management has built many residential buildings in Manhattan, donated $500,000 to Cuomo through his businesses in the last three years, according to the Associated Press. Barry Gosin, of Newmark Grubb Knight Frank, contributed $50,000. And the construction, real estate and gambling lobbies have all given Cuomo significant campaign contributions.

Committee to Save New York

As TRD has reported, the Committee to Save New York, a nonprofit founded by Rob Speyer, has raised millions to support Cuomo’s agenda through TV commercials and the like. Speyer, who is president of real estate giant Tishman Speyer and the newly elected head of the Real Estate Board of New York, personally pledged $1 million to the effort, the Times reported. The nonprofit has already received significant contributions from a group of building trade unions.

Sandra Lee

$1 billion on infrastructure

Last March, Cuomo announced the New York Works Task Force, which will raise and invest billions of dollars in infrastructure statewide. The task force announced plans to rebuild state roads, bridges and parks, and create tens of thousands of jobs, according to reports. Part of the funding will go to the Metropolitan Transportation Authority for major capital projects, like the Second Avenue subway.

32 February 2013 www.TheRealDeal.com

Property taxes

Cuomo proudly signed legislation to cap property taxes in 2011. Supporters praise the cap, which limits tax hikes to 2 percent per year or the rate of inflation, for bringing financial relief to homeowners and businesses. But some local elected officials have charged the governor with stepping on their toes, saying the move has strained their budgets.

Cashing in on casinos

In his State of the State speech last month, the governor pushed for three new casinos to be built upstate. This was a reversal for Cuomo, who had previously supported a deal to build a $4 billion convention center with a casino in Queens, next to the Aqueduct racino. The initially controversial racino has been lauded as one of the city’s most successful large-scale developments in years, reportedly creating an estimated 1,750 jobs and grossing $23 million in its first two weeks of operation.

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REGULATING REAL ESTATE

‘Cliff’ deal’s housing bonus Compromise bill revives two key housing tax benefits

BY KENNETH HARNEY lthough it wasn’t a total win for homeowners and sellers, the patchwork legislation that emerged from the fiscal cliff fracas on Capitol Hill came pretty close. In fact, it even reached back and resuscitated two key tax benefits for housing that had expired more than a year ago. Now homeowners will be able to take deductions on their upcoming 2012 tax returns that they assumed were no longer available. Here’s a quick tally sheet on what the new legislation could mean for buyers, sellers and owners (see related story on page 18). Millions of Americans pay mortgage insurance premiums or guarantee fees on an FHA, VA, Fannie Mae, Freddie Mac or Rural Housing loans. The American

provement incentive that lapsed in 2011. Five hundred bucks may not sound huge, but remember: It’s a credit, not a deduction, so it means $500 off the bottom line of their federal tax return. The new legislation reauthorized the Mortgage Forgiveness Debt Relief Act that had been scheduled to terminate Dec. 31, and spares potentially punitive federal taxes on the amount forgiven. Had the debt relief exception in the tax code not been renewed, large numbers of underwater owners participating in short sales — where banks agree to accept less than the full amounts owed on a loan as part of a sale to a new buyer or investor — would have faced taxation on the full amount forgiven as if it were regular income.

ital gains taxes for high-income sellers with big gains that exceed current federal exclusion limits of $250,000 (single tax filers) and $500,000 (married joint filers). Under the new legislation, single filers earning more than $400,000 or married joint-filers earning more than $450,000 can expect to pay 20 percent on capital gains. So if they sell a principal residence this year and the gain on the sale is $750,000, the capital gains tax on the $250,000 excess above the $500,000 exclusion limit will be at 20 percent rather than 15 percent. Sellers with income below the $400,000 threshold will still pay capital gains taxes at 15 percent, and earners at the two lowest tax brackets will pay zero on capital gains. Another negative: The fiscal

Some homeowners would have had to file for bankruptcy — or go to foreclosure — had Congress not renewed the debt forgiveness law. Taxpayer Relief Act — the fiscal cliff compromise bill — allows them to write off the insurance premiums they paid during 2012 along with their mortgage interest, provided the household income does not exceed $110,000. Legal authorization for this deduction expired at the end of 2011. But the new bill retroactively permits write-offs for all of 2012 and 2013 for qualified borrowers. Homeowners who did energy efficiency renovations during 2012 — installing insulation, energy-saving windows, doors, roofing material, nonsolar water heaters and the like — or are thinking about doing a little green rehab in 2013 may be able to claim up to a $500 tax credit, thanks to the revival of a home energy im-

Lenders and real estate brokers say thousands of financially distressed homeowners would have been devastated by the expiration. Alexis Eldorrado, a Chicago-area real estate specialist in short sales, said she has five clients who are underwater on their mortgages by an average of $100,000 and awaiting short sale closings in the coming weeks. They probably would have had to file for bankruptcy — or go to foreclosure — had Congress not renewed the debt forgiveness law, she said, because none of them could afford to pay taxes on $100,000 they never actually received. What’s in the legislation that some buyers or sellers might not like? Start with steeper cap-

cliff deal limits deductions for mortgage interest, property taxes, charitable donations and other write-offs for single-filing taxpayers with adjusted gross incomes above $250,000 and married joint-filers above $300,000. The formula it uses is complex, but it could amount to about $1,000 in additional tax liability for a couple with an income around $400,000, according to housing industry estimates. All in all, not so bad. Then again, major tax reform efforts are coming this spring, with mortgage interest and other real estate write-offs prominent among the targets. So enjoy the fiscal cliff bill results — at least for a little while. Kenneth Harney is a syndicated real estate columnist.

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GOVERNMENT BRIEFS House approves Sandy relief bill After fierce lobbying by politicians, the U.S. House of Representatives last month approved a $50.7 billion emergency aid bill for Hurricane Sandy victims. The Senate is expected to pass the measure, and President Barack Obama has voiced support for it, the New York Times reported. The $50.7 billion — along with nearly $10 billion in Subway damage caused by Sandy aid that Congress approved earlier in January — would help home and business owners whose property was damaged. The measure would also reinforce shorelines, repair subway and commuter rail systems, fix bridges and tunnels and reimburse local governments for emergency costs. Though the package does not cover the entire $82 billion in damage identified by the governors of New York, New Jersey and Connecticut, leaders from the region expressed relief over the action.

Bank of America settles with Fannie Mae Bank of America agreed to pay more than $10 billion to Fannie Mae last month to settle a dispute over mortgages that soured during the financial crisis, the New York Times reported. The bank said it will pay the federally backed housing giant $3.6 billion, and will spend an additional $6.75 billion to buy back mortgages from Fannie Mae at a discount from their original value. Most of the loans at issue were originated by Countrywide Financial, which Bank of American acquired in 2008. “These agreements are a significant step in resolving our remaining legacy mortgage issues, further streamlining and simplifying the company and reducing expenses over time,” Bank of America Bank of America CEO Brian Moynihan CEO Brian Moynihan said in a statement. The bank also disclosed that the settlement hurt its performance in the fourth quarter; the bank made $367 million in the last three months of 2012, down from $1.6 billion in the same period a year ago, CBS News reported. In a separate arrangement also made last month, Bank of America, JPMorgan Chase and Citibank agreed to pay a combined $8.5 billion to settle government allegations that they had wrongfully foreclosed on struggling homeowners.

Catsimatidis launches mayoral bid with check Supermarket mogul and real estate developer John Catsimatidis last month announced his New York City mayoral campaign, kicking it off with a $1 million investment of his own money, the New York Post reported. Catsimatidis, the president, chairman and CEO of both the Red Apple Group and the Gristedes supermarket chain, is eying the Republican nomination. He had planned to run for mayor in 2009, but withdrew.

Cuomo switches sides on casino In his 2013 State of the State address last month, Governor Andrew Cuomo withdrew his support for the New York City casino he had previously championed and is now eying locations north of the city, Crain’s reported. In last year’s speech, Cuomo discussed plans to build a $4 billion convention center in Queens, next to the Aqueduct racino. This year, however, he said city casinos would thwart the state’s goal of luring tourists upstate. Instead, he is backing plans to build three caGovernor Andrew Cuomo delivering his State of the State sinos in economically depressed readdress gions upstate. Cuomo also proposed flood-proofing New York City’s subway system and a buyout program for Hurricane Sandy–affected homeowners, the New York Daily News reported. Compiled by Zachary Kussin

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Real Estate Investment Trusts

IPOs on the horizon Will 2013 live up to 2012 when it comes to new public offerings?

By C. J. Hughes he market for initial public offerings by real estate companies was hot in 2012. Companies like the real estate website Trulia, the private equity firm the Carlyle Group and Realogy — the largest residential brokerage franchiser in the world and the owner of the Corcoran Group and Citi Habitats — all made headlines by issuing blockbuster IPOs. Indeed, it was a good time to turn to Wall Street to raise money from the public markets, as the above-mentioned companies did, or to continue to reap the rewards of cash infusions as a real estate investment trust, or REIT. In 2012, REITs alone raised a bestever $73.3 billion, through both the sale of equity shares and the issuance of debt. That was a hefty 12 percent increase over 2011, when $51.3 billion was collected, according to data from the National Association of Real Estate Investment Trusts. While this year is not expected to be as sizzling as 2012 — partly because so many firms are already listed on the stock exchange, and partly because firms are having more luck drumming up capital without turning to Wall Street as the cost of debt comes down — observers predict some real estate IPO activity. Analysts say the real estate industry can expect to see IPOs from less-obvious real estate firms, including storage and outdoor billboard advertising companies. But the most anticipated real estate IPO of the year, sources say, could be a portfolio that includes Manhattan’s landmark Empire State Building. The Empire State Realty Trust, whose 19-property portfolio in New York and Connecticut includes the Art Deco landmark, is looking to raise $1 billion, according to the Malkin family, which has controlled the Empire State Building through Malkin Holdings since 2002. But before that IPO can happen, the Malkins must clear a big hurdle — getting approval from the building’s other investors. That’s because in 1961, when Lawrence Wein (father-in-law to Malkin Holdings’ patriarch, Peter Malkin) and Harry Helmsley purchased the nearly 1,500-foot tower for $65 million, they brought in thousands of small-time investors in a syndicate deal. The Malkins, which have gradually increased their control in the building over the years, now need approval from investors who own 80 percent of those syndicated shares. According to some sourc-

36 February 2013 www.TheRealDeal.com

es, many of these investors live off their monthly dividends, and believe that going public will dilute their earnings because it will lump the Empire State Building in with underperforming suburban properties. They also argue that the REIT market is starting to cool, so the stock price of the new public entity could suffer, too.

Meanwhile, last month, some investors attempted to block the $55 million settlement, claiming it doesn’t go far enough. Tony Malkin, the president of Malkin Holdings, declined to comment, citing Securities and Exchange Commission rules mandating a “quiet period” before a possible IPO. But a spokesperson for

Billboards and iron bars The Malkins aren’t the only ones that will be attempting to create a REIT in 2013. With the stock market soaring at the beginning of the New Year, REITs, which must hold at least 75 percent of their assets in real estate and draw the same amount from real estate–related sources Tony Malkin, the president of Malkin Holdings, which is looking to issue an IPO for a portfolio that includes the famed Empire State Building

In the most anticipated real estate IPO of the year, the Empire State Realty Trust is looking to raise $1 billion, but before that can happen the Malkin family must get approval from the building’s other investors. Last year, a few of those disgruntled investors sued the Malkins to stop the deal; the suit was reportedly settled for $55 million in the fall, although the deal still requires approval from a judge, according to sources. “As much as, in the beginning, we thought it was a lousy deal, we have the actual numbers to show an investor will make far more money maintaining the status quo,” said Richard Edelman, who owns 10 shares that his grandfather, Max, an escalator salesman, bought on a tip from a neighbor. (According to an estimate by the Malkins that was cited in a recent Businessweek story, each share is worth roughly $330,000.)

Malkin did address the attempt to block the settlement, saying “this motion contains numerous false allegations and misleading statements.” And, in late December, the SEC gave the Empire State Realty Trust the green light on the IPO, which means it could take place in the next few months. But for the family, the IPO might be a way to gain greater control of the building and to unwind its complex ownership structure. Indeed, in 2010, the Helmsley Charitable Trust announced that it wanted to sell its stake in the building and, soon after, the Malkins began exploring the REIT idea, which could allow them to buy out the trust.

like rent, are expected to remain popular for new firms. But the companies looking to become REITs aren’t the typical New York real estate players — such as SL Green Realty, Vornado Realty Trust, Boston Properties and Brookfield Office Properties — that industry pros likely think of when they think of REITs. For one, a string of outdoor advertising companies that hold their own kind of precious and valuable real estate in New York are gearing up to go public. To wit: CBS Corp. is planning to spin off its CBS Outdoor billboard unit as a REIT, according to news reports. (Its billboards and other outdoor advertisements

PHOTOGRAPH SEAN 25 LEE www.TheRealDeal.com JanuaryBY 2011

Real Estate Investment Trusts plaster the city’s subway entrances, buses and trains.) Likewise, Lamar Advertising, which has a range of similar products, and whose clients have included McDonald’s and Verizon, has filed paperwork with the IRS to seek REIT status. (The IRS will determine if a billboard qualifies as real estate; a decision is expected this winter.) And Clear Channel — a media company whose billboards, posters and busshelter signs are also ubiquitous in New York — could also take its outdoor division public, according to news reports. Of a much different stripe is the GEO Group, a Florida-based company that owns roughly 100 detention centers and prisons globally, including a prison on 150th Avenue in Jamaica, Queens. In January, the company, which rents out the facility to local and federal governments, received IRS approval to go public as a REIT, though doing so will require it to break apart the company and group its nonreal-estate–related health-care assets into a separate business. Company officials have said that REIT status will lower the costs of capital for expansion and streamline the firm’s operating structure. Analysts say that, in many cases, in addition to raising money from investors, companies are often prompted to become REITs because the business structure offers something of a tax sanctuary. That type of thinking might be increasingly prevalent because many firms believe their tax loads will spike with the new Congress in Washington, sources said. (REITs benefit from major tax breaks, but have to distribute most of their annual profits to investors; while other public companies are required to pay corporate income taxes, though they get to pocket their returns.) However, there is resistance in some industry circles to becoming a public REIT because it requires pulling back the curtain on details that have been long kept under wraps. Once a company is public, for example, it has to open its financial books and reveal its strategic plan for buying and selling assets. “You might have to reveal the secret sauce,” said Kevin Imboden, a senior analyst at Real Capital Analytics, the research firm.

A slower pipeline Though the REIT business structure was created in the 1960s, it didn’t take off in popularity until the 1990s, when federal tax laws changed. Among the first out of the gate was the Kimco Realty Corporation, a national strip mall operator, in 1991. Today, it controls 10 properties in New York City, including four in Brooklyn — the Mill Basin Plaza mall among them — five in Staten Island and one in Queens. In that era, private financing was in short supply, and the real estate market was sluggish,

PHOTOGRAPH TOLL www.TheRealDeal.com FOR THE REAL DEAL BY HUGH HARTSHORNE 28 MarchOF 2012

prompting interest in REITs from an array of players, analysts say. In fact, some of the usual suspects in New York went public soon after, including Vornado (1993), Simon Property Group (1993) and Boston Properties (1997).

Analysts say the fact that the IPO got scuttled may point to a shift in the rental market — even though in New York rents have taken a breather from their dramatic increases (see related Q&A on page 73.) REITs, sources say, are like canaries

The Empire State Building is part of a 19-building portfolio that the Malkin family is looking to turn into a REIT.

got pummeled during the recession, they are now experiencing a resurgence. Toll Brothers, a publicly traded homebuilder (though not a REIT), is a case in point. Late last month, its stock price matched its high from September 2011, Robert Toll, the head of luxury homebuilder Toll Brothers. Last month, the company’s stock matched its fiveyear peak.

Several billboard companies with strong presences in New York, including Clear Channel and CBS Outdoors, are gearing up to go public.

For all the apparent newfound appeal in REITs, the recent years have been comparatively lean. In 2004, for example, there were 29 REIT offerings, versus eight in 2011 and the same number in 2012, NAREIT data shows. Until recently, one of the most highly anticipated real estate IPOs for 2013 was the expected $3.5 billion splashdown of Archstone Partnerships, a landlord of rental buildings nationwide. But in November, before Archstone could go public, the tag team of Equity Residential and AvalonBay Communities — both REITs themselves — swooped in and bought Archstone’s portfolio from the now-defunct investment bank Lehman Brothers for $16 billion in cash and debt. In New York, Equity ended up with Archstone’s residential buildings at 250 West 50th Street, 500 West 53rd Street and 377 East 33rd Street, while AvalonBay took five other properties: four in Manhattan and one on Long Island.

in a coal mine, anticipating changes in market fundamentals before they fully come to fruition. “This was sort of a come-back-toEarth year for multi-family, [nationally and locally],” said Jason Lail, a senior analyst with SNL Financial, a research firm. “If there are more people looking to buy homes, then obviously those people aren’t renting.” Indeed, AvalonBay, which owns complexes on East Houston and East First streets, saw its stock dip last month — to $138 — since hitting a five-year high of $151 in July. In 2011, the company also abandoned five-year-old plans to build a 700-unit complex in Midtown between 11th and 12th avenues. However, not all public real estate companies are created equally. Analysts note that the market creates advantages (and disadvantages) for companies depending on their focus. For example, while homebuilding companies

at $36, which marked a five-year peak. The historically suburban luxury homebuilder, has, of course, pushed aggressively into New York City in recent years. Its latest project is the Touraine, a 22-unit Upper East Side condo; three of 22 units have sold, according to listings website StreetEasy. This winter, Toll — which is headed by Bob Toll nationally and David Von Spreckelsen in New York — also bought two development sites, one at First Avenue and East 52nd Street and one on King Street in Soho. In the end, the success of a real estate company in the public markets, whether it’s already there or eying an entrance in 2013, will likely come down to the nuts and bolts of its portfolio, said John Stewart, a senior analyst with Green Street Advisors, a real estate research firm. “If there is an interesting enough story, REIT investors will listen,” he said, “but it has to be very compelling to have a successful deal.” TRD

www.TheRealDeal.com February 2013 37

Real Estate Investment Trusts

A REIT rundown A

By C.J. Hughes fter a frenzy of buying and selling in the face of declining stock prices, 2012 ended on an up-note for many of the real estate investment trusts with notable New York holdings. And while the companies’ stock prices have still not reached their pre-boom highs, many analysts are still bullish on the firms, arguing that most of them have deployed the billions they have raised in savvy, strategic ways. In a sense, that rosy outlook marks a sharp reversal in a short span of time. Indeed, just a few months ago, some analysts were guessing that some of the most active New York REITs — including SL Green Realty, Vornado Realty Trust and Boston Properties — might buy up their own stocks in a bid to prop up the trading prices. But now, that added boost doesn’t seem necessary. Indeed, sources say that as REITs signed more office leases in the fourth quarter and renovated existing space, investors flocked back to their stocks. In most cases, the influx rescued prices from recent lows. “You had a pretty strong fourth quarter after the summer swoon,” said Robert Stevenson, an analyst with Macquarie Securities in Midtown. “If you buy smartly and create value, your stock price should move, which is what we saw.” For example, SL Green, the city’s largest commercial landlord, saw its stock price jump from $71 a share at a recent low in November to $81 late last month. That may be below its recent 2007 peak of $146, but Stevenson said he believes it’s on target to hit $95 a share in the next 12 months. If the still-soft Midtown leasing market improves (according to Cushman & Wakefield data, leasing volume declined in the area by 31 percent between 2011 and 2012), these REITs could see more upside going forward, other analysts noted. “There is valuation upside here,” Stevenson said. Among the most active New York REITs, SL Green appears to have been the most aggressive in 2012. That may have been part of a plan to counter its volatile stock price, which was up and down for much of the year, but took some sharp hits last spring and saw more gradual declines in the fourth quarter. The firm not only snapped up office buildings in 2012 — including 10 East 53rd Street for $257 million last February and 304

38 February 2013 www.TheRealDeal.com

While stocks are not up to pre-boom levels, analysts are more optimistic than they were a few months ago

town building for 195 Broadway in the Financial District. In a conference call with investors in mid-2012, CEO Marc Holliday had this to say: Stock prices “are kind of steady or eroded, while the property markets have moved ahead.” An SL Green spokesman declined to comment further for this story.

Stabilizing the slide

From top: SL Green’s Marc Holliday, Vornado’s Mike Fascitelli and Boston Properties’ Mort Zuckerman.

Park Avenue South for $135 million in June — it also shed assets. Firm president Andrew Mathias said in a statement at the time of the 304 Park Avenue South deal: “It’s a classic SL Green investment — off-market, potential repositioning and creating value upon acquisition for both the company and the seller.” In fact, the 53rd Street deal was ripe for repositioning even before the deal’s ink was dry: Late last month, publishing giant HarperCollins, a longtime tenant, announced that it was leaving the Mid-

What dragged on REIT values last year was news about investment banks’ laying off employees, creating the impression among investors that parts of the Manhattan office market remain weak, analysts say. Plus, a rise in the office availability rate — which measures space that is available now or will be in the next 12 months — in Midtown has made some analysts worry that the office market may be slightly overbuilt. But the moves to stabilize declining share prices did not work as well for other firms as they did for SL Green. Indeed, Vornado’s stock price remained fairly flat at about $85 late last month, largely unchanged since its fall low. (The company’s stock rocketed to almost $134 a share during the boom year of 2007, though it sunk to around $29 in March 2009.) In response to questions about his company’s sluggish stock price, Mike Fascitelli, Vornado’s CEO, said in an August earnings call that, “we constantly look at the value of our shares. We’re not very happy with the value that is really below the net asset value.” (The company’s stock price on the day of the earnings call was $83.59.) The company declined to comment for this article. Nonetheless, Vornado was aggressive in 2012. In its heftiest deal of the year, it famously paid $708 million for one of the two retail condos at 666 Fifth Avenue; it also grabbed a majority share at Tribeca’s Independence Plaza, a rare residential play by the firm. (The sale price of the three-tower, 1,328-unit complex at 40 Harrison Street was $855 million. Stellar Management retained a minority stake.) But Vornado shed some assets in 2012, too. Most notable was the $751 million sale of Brooklyn’s Kings Plaza shopping center, in which Vornado had a stake. This came after having zero dispensations in 2011. “They have been very opportunistic,” said John Stewart, a senior analyst with the research firm Green Street Advisors.

Much of that might be explained by Vornado’s stated goal of simplifying its business model and transforming from a largely retail landlord to more of a mixed-use one, said Brad Case, a senior vice president with the National Association of Real Estate Investment Trusts. “They are now thinking about the portfolio they want to have going forward,” Case said. However, Vornado is getting out-hustled by SL Green, said James Sullivan, an analyst at Cowen and Company, who has given a “neutral” rating to the firm’s stock. “They’re off their highs,” he noted.

Not just acquisitions All told, publicly traded and privately held REITs shelled out more than $5 billion for acquisitions, which, though down from $12 billion in 2011, was higher than the $3.1 billion in 2010, according to research firm Real Capital Analytics. Continued on page 100

The stock price pendulum SL Green Realty Last month: $81.52 January 2012: $73.97 Recent peak: $146.58 (Jan. 2007) Recent low: $10.80 (Mar. 2009) Vornado Realty Trust Last month: $85.17 January 2012: $81.02 Recent peak: $133.99 (Feb. 2007) Recent low: $29.31 (Mar. 2009) Boston Properties Last month: $108.83 January 2012: $104.24 Recent peak: $126.09 (Jan. 2007) Recent low: $35.03 (Mar. 2009) Brookfield Office Properties Last month: $16.61 January 2012: $17.47 Recent peak: $31.42 (Jan. 2007) Recent low: $4.48 (Mar. 2009) Equity Residential Last month: $58.15 January 2012: $59.63 Recent high: $63.31 (July 2012) Recent low: $16.99 (Mar. 2009)

www.TheRealDeal.com January 2011 25

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PR O F I L E

Barnett’s big buildout While Gary Barnett has been making waves for a while (and setting records recently), he’s now working on more Manhattan projects than any other developer

BY ADAM PINCUS sk most people in the industry today and they’ll tell you Gary Barnett is the most aggressive of the large real estate developers in Manhattan. His appetite for risk among his peers is second to none. But given how many projects he has in the works — his firm, Extell Development Company, is currently working on roughly a dozen, including building two of the tallest residential buildings in the Western Hemisphere — and with the level of media attention he gets, you might think he would be more frenetic and in-your-face. But in a rare sit-down interview last month, there was no media handler on hand at Extell’s Midtown office where Barnett talked to The Real Deal for nearly an hour. He was relaxed, and wasn’t frantically checking his e-mail or phone messages. It was a departure from Barnett’s usual media policy — although he will generally talk about projects, he rarely grants lengthy interviews. “My father always told me, the less you say, the better it is,” said Barnett, who declined to have a fresh photo taken for this article. Still, Barnett has become harder and harder to ignore these days. Though that’s been true for several years, he’s currently pursuing more projects in Manhattan than any other developer. The standout is, of course, One57, the Christian de Portzamparc–designed, 1,050-foot-tall überluxury hotel and condo he’s building at 157 West 57th Street. That project has garnered most of the media attention he’s received lately, with its record pricing and a recent crane mishap (see related story on page 42). However, there are at least 11 projects with a total of nearly 6 million square feet that he’s currently working on in New York City, including his “other” 57th Street project : a 1,550-foot- tower at 225 West 57th Street, between Broadway and Seventh Avenue. Barnett filed plans with the city’s Department of Buildings in November 2012 that call for 233 residential units at the 1.2 million-square-foot structure. The building will also include the city’s first Nordstrom at its base. In addition, he’s expected to close this quarter on a $150 million to $200 million purchase of a 1 million-square-foot residential site formerly occupied by a Pathmark grocery store on the Lower East Side.

40 February 2013 www.TheRealDeal.com

“I don’t know how he can manage so much at once. We could never do that,” said Thomas Elghanayan, CEO of TF Cornerstone, who has been an active developer of residential and commercial properties for decades. Driving all of that activity is, of course, Barnett, who’s known as a steel-nerved risk-chaser. “His risk tolerance is off the charts,” said one executive at a rival development firm, noting that Barnett began building One57 with no construction loan in place, which insiders say is almost unheard of.

Puzzle pieces Barnett, a rabbi’s son who grew up on the Lower East Side, worked in the diamond industry in Belgium before getting into New York City real estate.

ment company — at least in terms of the number of employees and geographic scope of the firm. “I think that it is unlikely that we would ever get as big as, [for example], Tishman Speyer. I don’t aspire to get to that kind of size,” Barnett said, noting that he’s wary of “the headaches” that come with a much larger firm. “Right now, we are not really looking outside of New York. We live here, and it is a nice place to be focused,” he added.

Gary Barnett is building more than just One57.

Extell’s in-the-works Manhattan development projects ADDRESS

SQUARE FEET

STATUS

225 West 57th Street

1.2 million

Under development

227 and 235-247 Cherry Street

1.1 million

Under contract

One57 (157 West 57th Street)

850,000

Under development

International Gem Tower (50 West 47th Street)

748,000

Under development

547 10th Avenue

725,000

Permit under review

Hyatt Times Square (135 West 45th Street)

266,090

Permit under review

Unidentified site

200,000

Recently purchased

Carlton House (680 Madison Avenue)

200,000

Under development (residential portion)

1687-1693 Third Avenue

125,000

Recently finalized assemblage

10-12 West 48th Street

90,372

Being marketed for redevelopment

225 West 58th Street

50,000

Permit under review

Extell is currently working on at least 11 Manhattan projects with a total of more than 6 million square feet, including its “other” 57th Street project: a 1,550-foot-tower at 225 West 57th Street. He founded the firm in 1989, and partnered with developer Ziel Feldman in the early ’90s to buy apartment buildings and convert them to condos. Part of Barnett’s job was to bring the money, tapping into his overseas connections — a skill that still comes in handy today. But Barnett said he doesn’t aspire to turn his midsize firm, now with between 125 and 150 employees, into a behemoth develop-

In recent years, however, he’s followed in the footsteps of his main rival, Midtown-based Related Companies, by broadening Extell’s expertise. For example, he snagged Dan Tubb and Jeannie Woodbrey, two former residential sales agents from the Corcoran Sunshine Marketing Group, to run sales at One57. Barnett said he did that, in part, to scale back on commission payments

to an outside marketing firm, but also to maintain more oversight on transactions. “We wanted a little better control of the team,” he said, noting that when he’s worked with outside sales teams in the past they’ve sometimes lost focus after the bulk of the sales have been made and the building becomes increasingly sold out. Barnett’s stance is, perhaps, not sur-

www.TheRealDeal.com January 2011 25

PR O F I L E prising. He’s never taken a standard approach to real estate. In fact, he prides himself on going after sites and deals that his rivals are either unwilling to pursue or simply not aware of. His two large 57th Street towers — One57 and 225 West 57th Street — both sit on properties assembled over the years, many by company executive vice president Dov Hertz, who joined the firm in 2003. For example, the first property acquired for One57, at 157 West 57th Street, was a 49-year lease inked on behalf of Extell by Feldman. “I always liked doing puzzles,” said Barnett. “It’s kind of fun to sort out the pieces and put it together.” Just buying a property and developing it, “what’s exciting [about that?]” he asked. In addition, Barnett said that if his firm had not assembled the 20 parcels that make up the One57 site, he doesn’t think anyone else would have. “If we had not gotten it done, no one else would have,” he said. “It never would have gotten done.” He said the assemblage strategy provides a leg up because it widens the options of potential development sites to choose from. In order to acquire contiguous sites, however, Barnett sometimes offers a property seller a stake in the development. While Barnett is far from the only developer to successfully assemble Manhattan parcels, developer Douglas Durst, whose company, the Durst Organization has historically been a leading assemblage firm, called his rival “one of the best” at it. Barnett contrasted the complexity of putting a site together with other types of acquisitions in the city. “If you look at the run-of-the-mill sites in Midtown or the Upper East Side, they pop up almost like ready-made parcels that you can buy and build. It is much easier,” he said.

tion or in-active-development projects total at least 6.2 million square feet, which does not include its 1.7 million-square-foot One Hudson Yards, which is waiting to score a tenant before moving forward.

By comparison, it’s closest rival in terms of square feet and number of deals is Related, which currently has eight active developments in Manhattan totaling 4.6 million square feet. Although Related

Major developers’ in-the-works Manhattan projects DEVELOPER

NO. OF PROJECTS SQ. FEET

NOTES

Extell Development Company

5.7 million

Square footage is distributed at wide variety of sites in Manhattan.

Silverstein Properties

5.6 million

Majority of square footage is located at World Trade Center site.

Durst Organization/Durst Fetner

4.7 million

Majority of square footage is located at World Trade Center site.

Related Companies

4.6 million

Square footage is distributed at wide variety of sites in Manhattan.

Source note: Projects include active construction sites, recent purchases, sites where building permits have recently been filed and sites being marketed for development. Projects from public records, sources and news reports. A number of Related’s large Hudson Yards towers and Extell’s One Hudson Yards were not included because they are not expected to be underway in 2013.

From left: Barnett’s most highly publicized project, One57: the Carlton House hotel at 680 Madison Avenue, which Extell is redeveloping with Angelo, Gordon & Co.

A different league Real estate pros regularly compare Extell to firms such as Related, Durst and Silverstein Properties in both the number and variety of deals in New York. While each of those firms is developing approximately the same number of square feet as Extell in Manhattan, what sets Extell apart is the sheer number of deals it’s working on at the moment, including sites that have taken him years to assemble. Barnett’s rivals are each working on, at most, eight projects in the borough, while Extell is working on almost a dozen. In addition, Extell is one of the city’s most active sellers, unloading $550 million in potential development sites and projects over the past 12 months, an analysis of data on Real Capital Analytics showed. The firm’s currently under-construc-

From left: Jeff Blau, CEO of the Related Companies, Extell’s main rival; Steven Roth, the head of Vornado, which is fighting with Extell at 220 Central Park South.

From left: 225 West 57th Street, the future site of Barnett’s “other” 57th Street tower; the under-construction International Gem Tower at 50 West 47th Street; 220 Central Park South, where Barnett is battling with Vornado.

PHOTOGRAPH BLAU www.TheRealDeal.com FOR THE REAL DEAL BY CHRIS MARTIN; PHOTOGRAPH OF 225 WEST 57 STREET AND CARLTON HOUSE FROM PROPERTYSHARK 28 MarchOF 2012

expects to develop millions of additional square feet in the coming years at Hudson Yards, TRD did not include many of those buildings in its tally because those towers are not likely to get underway in 2013. (And while Extell is focused almost entirely on Manhattan, Related is also heavily invested in the outer boroughs with projects like the housing development Hunter’s Point South in Queens and the megamall Gateway II in Brooklyn, and around the world.) Meanwhile, Durst and Silverstein each have more square footage in development than Related, according to TRD’s tally, but the bulk of their projects are at the World Trade Center site. Those towers have been going on for years and do not signal a significant uptick in development plans. Still, while Extell’s large 57th Street projects have been widely reported, the company has other significant deals all over Manhattan. Barnett’s 34-story, 748,000-squarefoot International Gem Tower at 50 West 47th Street in the Diamond District was one of the few developments to move forward in the downturn. The building has a base of commercial condominiums and office space for lease above that. Barnett said the firm is talking with a company that might lease the entire rental space, but he declined to disclose further details. Extell has not made an announcement about a condo sale in the building since late 2011, when the firm reported that it was 65 percent in contract. But Barnett said sales have continued, and he expects the condo portion of the building to be sold out by the end of the year. While backed by city and state financial assistance, the development has generated criticism from some other Diamond District landlords. Despite Barnett’s promise of attracting new office tenants, they feared that he would poach their office tenants on 47th Street “If you can’t bring in new people, and that’s what you were promising, it’s disappointing,” said Kenneth Kahn, executive manager of the World Diamond Tower at 580 Fifth Avenue and 47th Street. “I don’t know that it’s disappointing because he didn’t try … but it didn’t happen.” Barnett disputed that, saying he did land condo buyers who will bring new jobs to the city, which he noted was a condition of his receiving city assistance. Elsewhere, Extell is partnering with private equity firm Angelo, Gordon & Co. to redevelop the Carlton House hotel at 680 Madison Avenue into condominiums and is marketing a garage building at 10 West 48th Street to lease to a retail tenant for redevelopment. There’s also an approximately 725,000-square-foot development site at 547 10th Avenue, where in 2011 BarContinued on page 101

www.TheRealDeal.com February 2013 41

Battling skyscrapers on 57th Street

In the wake of One57, developers are working on a slew of residential projects in Manhattan’s newest hotbed of development

BY YASMEEN QURESHI ith its birds-eye views of Central Park, Extell Development’s One57 is setting new records for residential sale prices in the city. But Extell isn’t the only developer seeking to cash in on the area’s potential. A number of new skyscrapers are springing up along 57th Street, from Durst Fetner Residential’s pyramid-shaped condo project on the far West Side to 250 East 57th Street, a 59-story residential tower at Second Avenue. Fifty-Seventh Street is now one of the most active corridors of new residential development in the city, boasting some of the city’s tallest towers and most buzzed-about architecture. Why is the street having such a moment? Brokers and developers attribute that to a unique confluence of factors, including demographic change, zoning that allows very tall buildings and proximity to the park. The gradual development of Hudson River Park in stages over the past 13 years has helped rejuvenate the previously desolate West 50s, making the area a more desirable residential neighborhood, said Jordan Barowitz, Durst’s director of external affairs. The area has “great views of the

625 West 57th Street Durst Fetner has started excavation work on the Bjarke Ingels–designed architectural showstopper overlooking the Hudson River. When completed, the glass pyramid will have some 750 conDouglas Durst, chairman of Durst Fetner, the developer of 625 West 57th Street

river and southern Manhattan,” he noted. And high-end shopping at the Time Warner Center has brought more residential amenities to the neighborhood. (With a Whole Foods at the Time Warner Center and a new one on 57th between Second and Third avenues, the street is now bookended by the pricey natural food market.) Fifty-Seventh Street, in particular, is attractive to devel-

opers because of its location in a special Midtown zoning district with no height restrictions. (Height restrictions begin at 58th Street.) That means developers can build high enough to capture the sought-after Central Park views that very wealthy buyers crave, explained Michael Stern of JDS Development Group. When it comes to netting the highest possible prices for

Extell’s $1.5 billion, 1,050-foot-tall One57. The under-construction tower is perhaps best-known for an apartment that is reportedly in contract for over $90 million (and, of course, for the construction crane that dangled above the site for days after Hurricane Sandy). The 92-unit tower is now about 70 percent sold, according to Extell’s Gary Barnett.

107 West 57th Street This slender new condo tower is being developed by JDS Development Group and Property Markets Group, the team behind well-received condo conversion Walker Tower. Located on a vacant lot on

dos and 60,000 square feet of retail space. The project recently won approval from the City Planning Commission, and is in the process of seeking final approval from city council. If approved, it is scheduled to be completed within three years.

157 West 57th Street (One57) Between Sixth and Seventh avenues stands 42 February 2013 www.TheRealDeal.com

57th Street just west of Sixth Avenue, the 700-foot-tall, 52-story building will have around 30 units, Stern said, many of them duplexes. Plans call for roughly 10,000 square feet of retail on the first and second floors. Construction is slated to begin this quarter and be completed in 2014.

432 Park Avenue Developed by Macklowe Properties and CIM Group on the site of the former Drake Hotel, this 1,397-square-foot, 95-story

condominium, 15 Central Park West.

250 East 57th Street New development on 57th Street extends all the way east to Second Avenue, where developer World Wide Group has partnered with the Educational Construction Fund on a 1 million-square-foot mixeduse project. When finished, the $700 million project will include two new schools, a 59-story residential tower with rental and condo units, and 78,000 square feet of retail. A Whole Foods has already opened on the site, and construction for the residential tower is underway. TRD

Harry Macklowe and a rendering of 432 Park Avenue

225 West 57th Street Extell is developing this tower on 57th Street between Broadway and Seventh Avenue. When completed in 2018, the project will house 233 luxury condos, a hotel and the city’s first Nordstrom department store. Moreover, it will stand at more than 1,500 feet, eclipsing Extell’s own One57 to become the city’s tallest residential tower. To design the tower, Extell has tapped Adrian Smith + Gordon Gill Architecture; Smith was the lead designer on the world’s tallest tower, the 2,717-foot Burj Khalifa in Dubai.

Manhattan condos, “it’s all about park views,” said Stern, who is in the process of developing a new condo tower at 107 West 57th Street. So many projects are rising at once, he said, because banks are now more willing to finance new condominiums, after a four-year lull following the financial crisis. And developers like him are seizing the moment, while housing supply is low and the real estate market is picking up steam. “There’s an imbalance between supply and demand coming out of the recession,” he said. And of course, the sky-high prices at nearby buildings like the Time Warner Center, One Beacon Court and One57 — the New York Observer last month dubbed 57th Street “the Billionaires Belt” — have not escaped developers’ notice. “Developers are looking at the success [in the neighborhood] and saying, ‘The highest return is to build condominiums,’” said Donna Olshan, president of the brokerage Olshan Realty. Read on for a rundown of the new projects rising on 57th Street.

Michael Stern of JDS Development Group, the codeveloper of 107 West 57th Street

condo project is slated to surpass One57 to become Manhattan’s tallest residential skyscraper. (That is, until 225 West 57th Street gets off the ground.) The multimillion-dollar condos in the building aren’t officially on the market yet, though some units have reportedly been previewed by potential buyers, and completion is expected in 2015. Sales are being handled by former Brown Harris Stevens agent Richard Wallgren. Now Macklowe’s executive vice president of sales and marketing, Wallgren is known for heading up sales at the city’s most successful new

Victor Elmaleh, chairman of the World Wide Group, and a rendering of the planned residential tower at 250 East 57th Street

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

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

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www.dsllp.com 101 Park Avenue, 11th Floor, New York, New York 10178 Attorney advertising. Prior results do not guarantee a similar outcome.

W HO OWNS Inside

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NYC’S REAL ESTATE FIRMS? In city brokerages, a look at who controls the purse strings, from family firms to corporate parents

By Katherine Clarke o outsiders, it may be hard to distinguish between New York City’s big real estate firms. But behind the scenes, even firms of similar sizes and reputations can have vastly different ownership structures. Many of the city’s residential brokerages, for example, have long been privately owned by families. Others have large, publicly traded corporate parents. Still other owners have silent parents, or offer their brokers the opportunity to own a piece of the firm. These structures dictate, to a large extent, how firms operate, make decisions and divvy up the profits. Individual owners, for example, tend to have more control over the company but less cash-flow, while firms with large corporate parents may have the opposite. This month, The Real Deal looked at New York City firms with a variety of different ownership structures to see who controls the purse strings and what that means for getting deals done.

Douglas Elliman

ouglas Elliman (formerly known as Prudential Douglas Elliman) is one of the city’s largest residential firms, and has one of its most complex ownership structures. Fifty percent of the firm is owned by chairman Howard Lorber’s Florida-based Vector Group, a publicly traded company best-known for its association with tobacco giant the Liggett Group. In 2011,

44 February 2013 www.TheRealDeal.com

to Prudential Douglas Elliman. New Valley reportedly increased its ownership stake to more than 50 percent by investing an additional $1.4 million between 2002 and 2004. Elliman declined to comment on its ownership structure. So what does this ownership arrangement mean for operations at Elliman? With Prudential no longer involved, the buck now stops with Lorber, sources said. There are still some shareholders through Vector, but “being that Howard is From left: Elizabeth Stribling and her daughter, Elizathe majority shareholder, Dottie is beth Ann Kivlan, the owners of Stribling & Associates really answering to Howard,” said while, is said to own approximate- a source familiar with the firm’s ownerly 30 percent of the company. And ship structure. Dropping the affiliation with Prudenuntil recently, the Prudential franchise owned 20 percent of the com- tial has removed some of the bureaucrapany, but Herman and Vector have cy, sources said. Previously, both Herman dropped that affiliation and report- and Lorber had to answer to the franchise edly bought out Prudential’s stake in leadership to some extent, and “there were the company. a lot more board meetings,” the source New Valley’s association with said. Herman began in 2000, when it Herman takes the lead on day-to-day operations at the firm, the source added, paid $1.7 million for a 37.2 percent ownership stake in Herman’s B&H but “when it comes to any major deciDouglas Elliman chairman Howard Lorber, whose Vector Associates of NY, formerly known as sions, anything having to do with money, Group owns about 50 percent of the firm Prudential Long Island Realty, ac- it’s Howard” who takes charge. Vector — which owns its stake through a cording to the stockholder’s report. subsidiary called New Valley — reported Then, in 2003, the partners bought In- Stribling & Associates a pre-tax income of $16.6 million from its signia Douglas Elliman, as it was thenlizabeth Stribling founded her eponinterest in Elliman, according to a stock- called, for a reported $72 million. Followymous brokerage in 1980 with a busiholder’s report. ing the franchise agreement with Pruden- ness partner, Connie Tyson. But Stribling Elliman CEO Dottie Herman, mean- tial, the new company changed its name bought out Tyson in 1991, and now owns

PHOTOGRAPHS FOR THE REAL DEAL BY MAX DWORKIN www.TheRealDeal.com January 2011 25

Inside the firm with her daughter, Elizabeth Ann Kivlan. Kivlan, previously the firm’s director of marketing and business development, took over for her mother as president last year. Now Kivlan manages the firm’s dayto-day operations, business expansion and development, though as chairman, Stribling is still an active part of the firm’s management team. Kivlan said her mother has received many unsolicited offers to purchase the company, but has always declined. “We prefer to remain a family-owned company,” she said. That structure allows the motherdaughter duo to “turn on a dime and make quick decisions,” Kivlan said, without having to “answer to others who may not have a complete understanding of the business.” Stribling COO Christopher Wilson agreed, noting that getting approval from the owners for expenses or new initiatives is a speedy process. “They’re sitting right behind me,” he quipped. “All I have to do is swivel.” Like other forms of ownership, family-run companies have their pros and cons. Wilson said he’s lucky to work for “very nice people” with whom he shares a vision; but at other such firms, philosophical disagreements with the owners can be difficult to resolve. “In a corporate environment, you can always go one level higher,” he said. But in a family-owned firm, the owner’s word is law. “The buck stops there, let’s face it,” he said.

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opening new offices. If a disagreement occurs, the issue is put to a vote. Binder insisted on the operating agreement, he said, because he didn’t want an arrangement where the minority equity holders “could be accepting my orders while not necessarily agreeing with me,” he said. “That’s how businesses fail.” The trio regularly has creative differ-

come part-owners along with him. “I felt that there would be no better way to permanently connect my top people to the organization than to give them a share in it,” he said. As a result of this unique genesis, Peters now owns a 51 percent stake in the company, and the rest is owned by brokers Jane Bayard, Linda Reiner, Lisa Deslauri-

Warburg Realty CEO and majority shareholder Frederick Peters, with fellow shareholders (from left) Linda Reiner, Judith Thorn, Wendy Greenbaum, Jane Andrews, Jane Bayard, Ronnie Lane and Bonnie Chajet. Not pictured: Lisa Deslauriers.

The Bellmarc Group

eing a firm’s sole owner isn’t for everyone. Neil Binder and Marc Broxmeyer cofounded Bellmarc Realty in 1979, and when Broxmeyer retired in 2010, Binder found that he did not like being at the helm by himself. “I hated it,” he said. “You don’t know if what you’re doing is right, people agree with you all the time even when you’re wrong and you don’t have anyone bouncing dynamic ideas off of you, so you’re basically deluding yourself.” He set out to sell some of Broxmeyer’s 50 percent stake in the firm, and Bellmarc last year absorbed residential and commercial real estate brokerage AC Lawrence Real Estate. The consolidated company, known as the Bellmarc Group, has three equity partners, Binder said: Binder owns 65 percent, while AC Lawrence cofounders Anthony DeGrotta and Larry Friedman own a combined 35 percent. While Binder is the company’s majority owner, an operating agreement put in place last fall gives equal control to all three parties. In other words, Binder, DeGrotta and Friedman all have an equal say in strategic decisions at the Bellmarc Group, including decisions on hiring and

company’s profits, they have an added incentive to work hard. Another advantage to this structure, Peters said, is “that I don’t have a boss. I can figure things out in consultation with my management team and implement them quickly. All my agents have access to me. If there’s something they think is or isn’t working, [they can tell me].”

From left: Eddie Shapiro, who owns Nest Seekers International with a silent partner; Eric Hadar of Allied Partners.

ences — they sometimes have to resort to a vote — but Binder said that’s “the sign of a good business.”

Warburg Realty

adison Avenue–based brokerage Warburg Realty, meanwhile, has a somewhat unusual ownership structure, explained CEO Frederick Peters. In 1991, as Peters was contemplating purchasing a brokerage called Albert B. Ashforth, he approached several of the firm’s star brokers and invited them to be-

PHOTOGRAPH OF WARBURG REALTY FOR THE REAL DEAL BY JAMES CHANG; PHOTOGRAPH OF SHAPIRO BY CHRIS MARTIN 64 March 2012 www.TheRealDeal.com

ers, Bonnie Chajet, Ronnie Lane, Wendy Greenbaum, Jane Andrews and Judith Thorn. (All but Deslauriers and Bayard were Ashforth agents.) “Every shareholder is a working member of the Warburg team,” Peters said. As the majority owner, Peters has the final word on all of the company’s strategic decisions, but all those with a piece of the company are kept up to speed on the day-to-day operations of the firm and their advice is frequently sought out. And since these broker-owners share in the

Nest Seekers International

est Seekers International was founded in 2002 by Eddie Shapiro, its CEO and majority owner. Shapiro told TRD that he owns the company with one silent investor, who he declined to name. But sources told TRD this fall that Nest Seekers’ investor is Yudel Kahan, the vice president of Hawthorne, N.J.-based Churchill Furniture, one of the largest furniture rental suppliers in the tri-state area. Although the exact financial ties between the companies are not public, records show that Churchill Furniture is affiliated with Churchill Corporate Services, a corporate relocation firm where Shapiro worked in the early 2000s. Shapiro and Kahan are also cofounders of Lev Group, an investment and development firm which has been involved in condo projects such as the 505 in Hell’s Kitchen and the Sage House in Queens. Shapiro told TRD last month that he personally controls the company’s strategy and direction. “I make 100 percent of the decisions, 100 percent of the time,” he said. And while he’s received offers from other investors to partner with him or buy a stake in the firm, he said he has declined because he doesn’t want to jeopardize his existing partnership. “Anytime an idea like this came up, it was out of the question because of the

www.TheRealDeal.com February 2013 45

Inside depth of our relationship,” said Shapiro, noting that he views his business partner as “family.”

Halstead Property and Brown Harris Stevens

rokerages Halstead Property and Brown Harris Stevens are both owned by Terra Holdings, a private partnership headed by Swig Equities president Kent Swig, investor David Burris, developers Arthur Zeckendorf and William Lie Zeckendorf, and Eric Hadar of Allied Partners. Terra was initially formed by the partners to purchase BHS from an ailing Harry Helmsley for an undisclosed amount in 1995. A few years later, the partners bought Halstead from its founder, Clark Halstead, who is now chairman of the company. A source told TRD that the Zeckendorf brothers own a combined one-third of the company, Swig and Burris own another third, and Allied Partners owns the remaining third. (All five Terra partners declined to comment, and a company spokesperson disputed this breakdown.) The Zeckendorfs, Swig and Burris all participate in the day-to-day operations of both firms and hold the title of cochairmen, a source said; they receive salaries and a portion of the firm’s profit overrides in exchange for working a required number of hours on Terra business. Hadar, meanwhile, takes a purely advisory role, does not receive a salary and does not hold the cochairman title. Sources said there are at least two other minority investors in Terra Holdings: real estate investor Arnold Penner, who is a co-owner of the Midtown restaurant P.J. Clarke’s and a director at investment and management company United Capital, and Lawrence Friedland, a Manhattan-based attorney. When contacted by TRD, Penner confirmed that he holds a minority stake in the company but declined to elaborate. Friedland did not respond to requests for comment. Neither Halstead president Diane Ramirez nor BHS president Hall Willkie hold equity in the companies, a spokesperson for Terra confirmed.

Corcoran and Citi Habitats

he Corcoran Group was owned by its founder, Barbara Corcoran, until she sold the company to real estate company NRT for a reported $66 million in 2001. Corcoran then acquired Citi Habitats, founded by Andrew Heiberger, in 2004. (See related story on page 64.) NRT is owned by the publicly traded real estate giant Realogy Holdings, which also franchises Coldwell Banker, Coldwell Banker Commercial, Better Homes and Gardens Real Estate, Sotheby’s, Century 21 and ERA. Apollo Global Management

46 February 2013 www.TheRealDeal.com

the

Top Brokerages

is Realogy’s largest single investor. Realogy issued its IPO in October 2012, offering 46 million public shares priced at $27 each. The stock price has since increased substantially; by the first week of last month, it was valued at 55 percent above its IPO price. The company’s market capitalization was last reported at over $6 billion. Working under a giant corporate

any Citi Habitats executives hold any stock in the company.

Rutenberg Realty

here is always risk attached to having multiple investors in a company, as a recent lawsuit at Rutenberg Realty makes clear. Charles Rutenberg Realty is a real estate franchise originally operated in Florida by the Krug family. There’s also a Long Island branch of the franchise, headed for the Krugs by broker Joseph Moshe. Rutenberg opened in Manhattan in 2006 after investor Richard Friedman was inspired by Larry Krug, his old army buddy, to open a New York City office of the franchise. Friedman then brought his son-in-law, Jeffrey Markowitz, on board. The duo originally considered launching the business citywide, but when Friedman approached real estate industry veterans Paul Purcell and Kathy Braddock about the idea, the foursome formed a partnership and settled on launching in Manhattan. Moshe, who controls the family trust that owns all rights to the Charles Rutenberg name in New York State, also became a part-owner. According to court documents, Moshe owns a third of the company’s New York City division, while Friedman, Markowitz, Purcell and Braddock each own one-sixth. All partners but Moshe have voting rights on management issues, and Moshe cannot undertake any action on behalf of the New York company without the prior consent of the other four owners, according to court records. From top: Paul Purcell and Kathy Braddock, who own a combined While Friedman and one-third of Rutenberg Realty; Joe Cayre, co-owner of CORE. Markowitz have voting umbrella can slow down strategic deci- rights, they largely take a back seat to Pursion-making, industry experts told TRD. cell and Braddock. And at publicly owned companies, there “Paul and I are the working partners, are strict requirements on reporting all simply because we have the real estate decisions to stockholders, along with an knowledge,” Braddock told TRD. “Richie increased pressure to consistently perform and Jeff do not have their licenses.” well financially, Bellmarc’s Binder said. She declined to comment further on He added that owners at publicly trad- the ownership structure at the firm. ed companies “are not as intimately conMoshe’s lawsuit, which made headnected to the business as the operators. lines in October 2012, asserts that Pur… They’re connected to the return on in- cell and Braddock exercise “complete dovestment.” minion and exclusive control of the monCiti Habitats president Gary Malin ey, property, affairs, books and records” declined to comment on whether he or belonging to the company. The suit ac-

cused Purcell and Braddock of improperly siphoning funds from the New York Rutenberg office and competing against the firm with their own consulting company, Braddock + Purcell. Purcell and Braddock have denied the claims.

CORE

ORE, the boutique brokerage bestknown for its association with HGTV’s “Selling New York,” is a privately held company owned by CEO Shaun Osher and investors Joe Cayre and his son Jack. The Cayres are principals of Midtown Equities, a real estate investment firm that owns some 100 properties. The three men became partners in 2005, after Osher marketed an Upper East Side residential project developed by the Cayre family. (CORE stands for “Cayre Osher Real Estate.”) While Osher declined to reveal his specific equity share in the company, he said it “wouldn’t be wrong” to call the venture a fifty-fifty partnership. “They’re actively involved,” he said. “I work very closely with Jack. We speak daily and meet all the time.” Osher said he and the younger Cayre have equal input on all decisions relating to the direction of the firm, from new offices to new hires. The benefit of having so few partners, he said, is that “we don’t have anyone looking over our shoulders or dictating to us,” he said.

Town Residential

ix years after selling Citi Habitats to NRT, Andrew Heiberger again made headlines in the real estate world by launching a new brokerage, Town Residential. Then in 2011, he formed a strategic partnership with Joseph Sitt, the head of investment and development firm Thor Equities. Since Sitt became involved, Town has grown rapidly, opening a number of well-appointed offices. “I needed a major amount of capital to execute the business plan,” Heiberger said. “I had always planned to bring on a partner.” Heiberger and Sitt have an equal financial stake in Town, according to a spokesperson for the firm, and Town is completely separate from Thor Equities. It is not clear whether the company has other investors. Sitt and Heiberger have been partners before. The duo formed a joint venture in 2005 to purchase 88 Greenwich Street, which they transformed into a luxury condo project. (Town now has an office in the building.) Sources said Sitt takes an active role in the company’s operations, consulting with Heiberger on business development and strategic decisions relating to the firm. He has little involvement with day-to-day operational decisions such as hiring or firing, however. TRD

PHOTOGRAPH OF PURCELL AND BRADDOCK FOR THE REAL DEAL BY MICHAEL TOOLAN; PHOTOGRAPH OF CAYRE January BY HUGH HARTSHORNE www.TheRealDeal.com 2011 25

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REAL ESTATE LAWSUITS

Plaintiffs united

A look at the industry’s class-action lawsuits — from Hurricane Sandy litigation to the Stuy Town case — that are expected to have a real estate ripple effect

BY HAYLEY KAPLAN he epic class-action lawsuit between the residents of Stuyvesant Town and Peter Cooper Village and their former landlords began in 2007. But a November settlement of nearly $150 million in the suit — in which the residents claimed the owners illegally deregulated thousands of rent-stabilized apartments — has brought the case back into the spotlight. Indeed, tenants in other residential buildings are now filing similar lawsuits against their landlords, citing the landmark case. But the Stuy Town case isn’t the only class-action lawsuit to significantly affect the New York City real estate industry. In fact, plaintiffs have banded together to file lawsuits against Goldman Sachs, developers TF Cornerstone and Extell Development, the real estate data website Zillow and a number of other real estate players. Observers have noted that those suits will all have their own ripple effect within the industry. “Whatever the result [of a class-action case], it’s going to make an impact because it’s several hundred or thousands of people,” said real estate attorney Adam Leitman Bailey. “[Certain class-action lawsuits have] caused developers to change the way they [will] build their next building.” This month, TRD looked at several significant, industry-related class-action lawsuits that are currently in play and how they will impact the real estate world in the coming years.

Amy Roberts v. Tishman Speyer and MetLife

fter a five-year battle, the dramatic lawsuit involving Stuy Town, the massive Manhattan rental complex, is finally wrapping up. Indeed, a November settlement reached between residents, current owner CWCapital Asset Management and former owners MetLife and Tishman Speyer is expected to be officially approved by the New York Supreme Court in early April. Resident Amy Roberts filed the action on behalf of the tenants in 2007, seeking $215 million in rent overcharges. The residents argued MetLife and Tishman Speyer — which paid $5.4 billion for the

48 February 2013 www.TheRealDeal.com

“Whatever the result [of a class-action case], it’s going to make an impact because it’s several hundred or thousands of people.” ADAM LEITMAN BAILEY, ADAM LEITMAN BAILEY, P.C. complex in 2006 — improperly deregulated the rent-stabilized apartments while simultaneously taking J-51 tax benefits. (Landlords can only receive J-51 breaks if they are providing rent-stabilized housing.) The settlement calls for the approximately 6,160 current and former tenants who lived in the 4,311 improperly deregulated apartments in question to receive approximately $146.85 million for rent overages. And as part of the settlement, CWCapital, which took control of the complex after the owners defaulted on their debt,

agreed to keep the apartments rent-stabilized through June 2020 — when the development’s J-51 tax benefits expire. The settlement concluded nearly 18 months of negotiations between the parties. TRD and others have closely covered the lawsuit, a landmark case at a massive and iconic New York housing development, that was also expected to have broader impact on the industry. That impact is evidenced by the “copycat” suits that have followed.

For example, in one recent copycat case, Kathryn Casey v. Whitehouse Estates, tenants at the 137-unit apartment building at 350 East 52nd Street are essentially making the same claims that their counterparts at Stuy Town did. They argue that Whitehouse, the owner, improperly deregulated 72 of the building’s units beginning in 1993 when it started taking J-51 tax benefits. The suit — which is seeking an unspecified amount in damages — cited Stuy Town’s 2009 Court of Appeals decision,

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

REAL ESTATE LAWSUITS which stated all apartments in buildings receiving J-51 tax benefits are subject to rent-stabilization laws. Still, some industry experts said the Stuy Town case hasn’t had as pronounced an impact as they expected. “I think the case has had a dramatic impact, but in a much smaller sphere than it could have,” said Alexander Schmidt of the law firm Wolf Haldenstein Adler Freeman & Herz, who represented the residents in the Stuy Town case. So far, he said, there have been “only a handful” of similar J-51 lawsuits, despite the fact that many landlords are in violation of J-51 regulations. Schmidt said prior to Stuy Town most landlords believed that taking J-51 benefits while deregulating apartments was legal. That, he said, was because the law was unclear before the Roberts decision. Still, sources say the decision has meant lower offers by investors in some cases for pre-1974 buildings, which are primarily affected by J-51. “Every deal is different, but it will impact an offer,” said Timour Shafran, a managing partner at real estate investment firm Citicore.

Evan Richards, Jose Hernandez-Ortiz and Kevin Sardelli v. TF Cornerstone

f the many class-action suits filed since Hurricane Sandy, few are as bitter as the battle being waged by tenants at the TF Cornerstone–owned buildings 2 Gold Street and the adjacent 201 Pearl Street, which were badly damaged by the storm. Residents in both buildings have so far been told they won’t be able to move back into their apartments until March 1. On Nov. 19, tenants led by Michael Cashwell and David Barker (who have since been replaced by Evan Richards, Jose Hernandez-Ortiz and Kevin Sardelli) filed a class-action suit in New York Supreme Court alleging that TF Cornerstone was negligent because it failed to adequately secure the buildings before and after Hurricane Sandy. According to the attorney for the tenants, Hunter Shkolnik, the group of plaintiffs now includes upwards of 500 residents from both buildings. The lawsuit alleges that TF Cornerstone, which is headed by brothers Thomas Elghanayan and Frederick Elghanayan, ignored the National Hurricane Center and the city’s repeated warnings about the storm. The suit argues that the landlord failed to use sandbags and take other proactive measures to prevent damage, despite the fact that there had been flooding in the buildings in the past.

PHOTOGRAPH RICHARDS FOR THE REAL DEAL BY CHRIS MARTIN 64 March OF 2012 www.TheRealDeal.com

Residents also alleged in court documents the company’s employees abandoned the properties — which have 650 and 189 units, respectively — after the storm, which led to looting at both buildings. Late last month, Shkolnik’s firm — Napoli Bern Ripka Shkolnik — also filed a class-action case against the Moinian Group and Douglas Elliman Property Management on behalf of an undisclosed number of residents at Ocean Luxury Residences, a rental at 1 West Street in the Financial District. The plaintiffs, who are being led by resident Yin Hou, outlines similar allegations as the TF Cornerstone suit regarding the lack of hurricane preparedness. Although the building reopened on Nov. 30, the tenants noted in court documents that there have been two fires since and complained of power outages and the smell of diesel fuel, which they believe is caused by the generators powering the building. The Moinian Group declined to comment, and Douglas Elliman did not respond to requests for comment. Shkolnik said he hopes the two cases will set a new precedent in regards to what landlords in flood zones must do to prepare for future storms. “Other landlords in the flood zone will take steps to protect their buildings in a greater fashion [as a result of the lawsuits],” he predicted. “You’re not going to see garages with open space entryways without sandbag protection.” Bailey — who is not involved with this case, but said he’s been retained by several landlords for storm-related cases since Sandy — noted that the lawsuit will determine what preventative measures property owners must take during a natural disaster. He added that he will be keeping tabs on the case because it could impact other Sandy-related suits. “Any ruling that a judge makes [in the TF Cornerstone case] will have an impact on other cases,” he said. TF Cornerstone did not respond to requests for comment.

Jonathan Reinschmidt v. Zillow

n Nov. 6, Zillow’s stock plunged 39 percent — a dramatic drop that spurred a class-action lawsuit from investors in the online real estate company. A group of those who purchased Zillow’s common stock between Feb. 15 and Nov. 6 of last year are alleging that the company made false and misleading statements about its finances and business practices. The group — which is being led by investor Jonathan Reinschmidt and has not

yet disclosed how many members it has or how much it’s seeking in damages — is contending that Zillow’s stock was traded at artificially inflated prices, reaching as much as $46.17 a share in September.

With the stock at its apex, Zillow employees, including some of its executives, sold off some 3.1 million of their personal shares, worth about $115 million, according to court documents. The stock price collapsed on the heels of Zillow’s release of its third-quarter earnings, which were lower than analysts had anticipated. In addition, the company at that time revealed that it had lost a major advertiser on its website. For Zillow, a class-action case means diverting limited resources away from the company and into the lawsuit, which could distract it from running its business, explained Terrence Oved, of the Manhattan-based law firm Oved & Oved, who is not involved in Zillow’s case. In addition, a class-action may end up depressing the company’s stock price, he said. Zillow’s story could be a cautionary tale for other real estate From top: Stuyvesant Town, where tenants just start-ups looking to go public, reached a settlement agreement with the buildsaid Doug Perlson, CEO of oning’s former owners over rent overcharges; Amy Roberts, the lead plaintiff and one of the former line brokerage and listings conowners; Rob Speyer. sultant RealDirect. “If [companies are] lucky enough to get to the public markets, then you need to be very careful about disclosures and how you describe your business to the public,” he said. “Whether you’re a start-up or a more established company, you’re going to need to manage your investors carefully, and you want to be as open and transparent about your business as you can possibly be.” Oved agreed that the class-action case against Zillow could impact other real estate websites. Evan Richards, one of the lead plaintiffs suing For real estate websites that TF Cornerstone for failing to prepare 2 Gold and 201 Pearl streets, both residential buildaren’t publicly traded, like, say, ings, before Hurricane Sandy. listings website StreetEasy and data provider PropertyShark, Oved said the Zillow case could deter them from opting to go public because it highlights the intensity of providing disclosures to investors. David Walton of the law firm Robbins Geller Rudman & Dowd, who is representing the plaintiffs, stressed that the more transparency the better. “If [companies] gave out as much information as they had to [their] investors, you’re going to see less dramatic stock movements, and investors wouldn’t have anything to complain about.” “The allegations in the [Zillow] complaint are that the in-

www.TheRealDeal.com February 2013 49

REAL ESTATE LAWSUITS vestors weren’t given the full story,” he added. Zillow, which is headed by CEO Spencer Rascoff, declined to comment on the case. Lawyers at Perkins Coie, which is representing Zillow, also did not respond to phone calls seeking comment. In recent months, Zillow’s IPO has put it in acquisition mode — with the firm purchasing three companies during October and November: home search and sharing website Buyfolio, the mortgage software company Mortech and, for $16 million cash, the map-based real estate search website HotPads. (The terms of the Mortech and Buyfolio deals were not disclosed.) “For a newly public company, they’re executing on a time-proven strategy to use newly public stock as a currency to acquire [other] businesses,” Perlson explained. Zillow was founded in 2005 by former executives at the travel website Expedia, formerly an arm of Microsoft. Zillow began trading on the NASDAQ in July 2011. As to whether the case against Zillow will hold up in court, Oved said it is too early to predict. However, he said, cases like these are often filed with the intention to settle quickly.

From top: The heads of TF Cornerstone, Thomas Elghanayan and Frederick Elghanayan

NECA-IBEW Health & Welfare Fund v. Goldman Sachs

everal class-action lawsuits filed against mortgage companies after the 2008 financial crisis have recently wrapped up following landmark settlements. However, one case has seen a major court victory recently, which could impact future mortgage lending in the real estate market. In 2008, investors in 17 mortgage-backed securities — led by a pension fund of electrical workers called NECA-IBEW Health & Welfare Fund — sued Goldman Sachs, which underwrote the investment. The investors claimed that they were given false and misleading information about the guidelines of the mortgage loan originators before deciding to invest. That information, they claimed, influenced their decisions to invest. The case was dismissed by a New York district court judge in 2010, but an appeals court panel overturned that decision this past September. Under the leadership of CEO Lloyd Blankfein, Goldman Sachs is taking an aggressive stance and now petitioning the U.S. Supreme Court to hear the case. If the court sides with the investment bank, it would avoid the fate of settling a massive suit for millions of dollars. Such a

50 February 2013 www.TheRealDeal.com

ruling could also embolden other banks. The investors allege that the loan originators in this case — which included Countrywide Home Loans, Wells Fargo and Washington Mutual, among other banks — issued loans without determining whether the homeowners who were borrowing money from them could repay it, court documents said. Those actions, the plaintiffs alleged, put their investments in serious jeopardy. The decision could have a significant impact on the future of mortgage-backed securities pools of residential real estate loans. “Litigation is harmful to any business, including this business, to the extent that it makes [securitizing] more risky,” said Charles Davidow of the law firm Paul, Weiss, Rifkind, Wharton & Garrison, who represents NECA. He said the suit could impact all mortgage lenders. “[The lawsuit] can depress securitization [further], which in turn can mean less funds available to lend,” he said. And since the appeals and district court reached different decisions in the case, the law, in regards to what needs to be revealed to mortgage-backed securities investors, is currently murky. “That kind of uncertainty, where the law’s unsettled, is certainly bad for the market, it’s bad for plaintiffs, it’s bad for everybody,” Davidow said. Lawyers at Robbins Geller Rudman &

Dowd, who represent Goldman Sachs, de- der-construction condo One57, currently Manhattan’s tallest residential tower. clined to comment on the case. But in the last year, several other major For six days, the crane “hovered like mortgage companies have settled class-ac- a dagger over 57th Street,” according to tion lawsuits over post-2008 mortgage se- a class-action lawsuit filed by local busicurities investments. ness owners and residents against Extell, Bank of America, for example, reached construction contractor Lend Lease and a massive $2.43 billion settlement in Sep- crane operator Pinnacle Industries II. tember with several pension funds that The three-block area around the invested in the bank’s mortgage-backed One57 construction site was evacuated, securities between September 2008 and and residents and business owners were January 2009. The investors alleged that not allowed to return until Nov. 4. BofA made false statements in connection The class-action case was filed in with the bank’s $50 billion purchase of November by dentists Barry Musikant now-defunct rival Merrill Lynch. and Caroline Stern. The group of plainMelissa Cohn, an executive vice tiffs — which so far has more than 100 president at mortgage lender Guar- members and is seeking more than $5 anteed Rate, explained that BofA pretty much pulled out of the mortgage-lending market after the class-action case was filed in 2009. However, she said, the bank is getting back into the mortgage game. “Obviously, when you pull out of a lending channel, it’ll mean the brokers [and investors] have fewer venues to go to,” she explained. Meanwhile, in June, a New York judge approved a $75 million settlement between former mortgage lender Wachovia — now owned by Wells Fargo — and class members (including several New York pension funds) who purchased its common stock Zillow CEO Spencer Rascoff between May 2006 and September 2008. The stockholders alleged the bank weakened its credit quality by selling nontraditional mortgage loans to buyers with low credit scores. Bruce Maasbach, the managing director of the Manhattan division of mortgage bank Luxury Mortgage, explained that a lot of mortgage banks, like BofA, take themselves out of the mortgage game after settling a class-action suit. The banks are then replaced by new mortgage lenders, which can cause problems industry-wide, he explained. “When you have new players replacing some of the lenders that got burned, they drive your [borrowers] Goldman Sachs CEO Lloyd Blankfein crazy,” Maasbach said, noting that new lenders often have more stringent require- million in damages — alleges that the ments because they are learning the ins evacuation caused local businesses and local buildings to delay in reopening afand outs of the market. “To have new lenders replace seasoned ter the hurricane. That, they argue, led lenders is not apples to apples,” he said. to substantial losses of income for the businesses and substantial out-of-pocket expenses for the residents, who needed to find (and pay for) alternative accommodations. However, some sources noted that most companies have business interruption insurance that would cover these sorts of expenses. Indeed, Alfred Tobin, managing principal at insurance brokerage Aon, said t’s one of the most enduring images of business interruption insurance usually Hurricane Sandy: On Oct. 29, a crane kicks in a day or two into an evacuation. collapsed at Extell Development’s unContinued on page 104

Musikant Deutsch and Caroline Stern v. Extell Development, Lend Lease Construction and Pinnacle Industries II

www.TheRealDeal.com January 2011 25

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PR O F I L E

Burger on a roll J

BY CANDACE TAYLOR ohn Burger spends a lot of time walking through Central Park. The Brown Harris Stevens superbroker specializes in the grand apartment buildings located on the leafy thoroughfares bordering the park, and he prefers to travel between them on foot.

his professionalism and intimate knowledge of top Manhattan buildings, the longtime broker also holds a trump card: Sources said he has, for years, been the residential broker of choice for his boss’s boss, the überwealthy developer William Lie Zeckendorf. Representing Zeckendorf —who is co-owner of BHS’s parent compa-

Burger is one of the brokers listing a duplex at 55 Central Park West for $35 million.

Journalist Mike Wallace’s duplex at 730 Park Avenue, which is on the market with Burger for $17.95 million.

Brown Harris Stevens’ super-broker John Burger is on a hot streak — with $88 million worth of sales in a single month

2012 — all of them over $30 million. And the fourth quarter of 2012 was the strongest fourth quarter ever for the firm. Burger attributed the uptick in luxury sales to wealthy homeowners’ attempts “to lock in preferential capital gains” tax rates before changes slated for this year took effect. He, of course, had already been at the top of his game for some time. In 2005, he handled media mogul Rupert Murdoch’s $44 million purchase at 834 Fifth Avenue, setting a record for the highest price ever paid for a New York City co-op. In 2008, he topped that by selling poet Georgia Shreve’s duplex penthouse at 1060 Fifth Avenue for $46 million. The buyers were hedge funder Scott Bommer and his wife, Donya. In both 2010 and 2011, the Wall Street Journal named Burger Manhattan’s top broker by closed transaction volume. In the most recent ranking, he was credited with nearly $254 million in sales. But he’s had a particularly hot streak lately. In addi-

dential brokerage Stribling & Associates. Burger “is a gentleman, and a knowledgeable one,” said Henckels, who recently represented the buyer in Burger’s $18.2 million deal at the Brentmore. Unlike other top brokers, who often have teams of agents, Burger works with only one longtime assistant, agent Kristin

John Burger has been at Brown Harris Stevens since 1988.

“I do a lot on Central Park West and a lot on Fifth and Park avenues, so I shuttle back and forth,” said Burger. “I try to walk as often as possible, even in the middle of January, because it can be very beautiful and very peaceful.” Lately, he’s been getting a lot of exercise. In 2012, the Manhattan luxury market saw an unprecedented burst of activity, and Burger — a 29-year industry veteran who focuses on high-end properties — reaped the benefits. In December alone, he sold some $88 million worth of Manhattan real estate, including a $50 million coop at 944 Fifth Avenue reportedly owned by NorthStar Realty’s David Hamamoto. On Central Park West that same month, Burger sold a corner apartment at the twin-towered San Remo for $20 million, and an $18.2 million combination unit at the Brentmore. “John has probably sold more apartments on Central Park West than any other agent,” said his boss, BHS president Hall Willkie. While fellow agents praised Burger for

52 February 2013 www.TheRealDeal.com

Burger’s big deals

ny, Terra Holdings — Burger has handled lucrative deals such as the $34.6 million sale of the developer’s co-op at tony 927 Fifth Ave- 944 Fifth Avenue: $50 million co-op nue. And being in the good graces 145 Central Park West (The San Remo): $20 million co-op of the company’s owner, brokers said, yields untold benefits. 88 Central Park West (The Brentmore): $18.2 million combination co-op “If you’re going to pitch a listing and you can say, ‘I’m the personal brotion to closing deals at 944 Fifth Avenue, Clark (though he does sometimes partker for the owner of the company,’ that’s the San Remo and the Brentmore in De- ner on individual deals with fellow BHS helpful,” said a broker who has done deals cember, Burger’s $29.6 million three-bed- brokers). with Burger, but requested to remain room listing at the Dakota — owned by “It’s just the two of us,” Burger said. anonymous. Bruce Barnes, the head of the building’s “Quite frankly, sometimes that means that co-op board — reportedly went into con- we are not able to accept every client that tract that month. comes our way.” Posh clientele The famed Dakota, overlooking CenBHS, founded in 1873, has long focused on And that’s fine with Burger. “I don’t Manhattan’s elite. With some 352 full-time tral Park West, is one of the buildings want it to be a factory of listings,” he said. brokers, Willkie said, the firm hires mostly where Burger has made his mark over the “I want to take wonderful listings that I experienced agents rather than industry years. BHS’s sister company Brown Har- believe in, usually from clients that I myris Steven Residential Management pre- self have put into those listings. We’re very newcomers. viously managed the Dakota, and during selective.” “We really dominate the high end of the Currently, Burger is marketing Calvin market and we have for a long time,” Willkthat time Burger was the firm’s “broker ie asserted. specialist” there. He no longer has an of- Klein’s former penthouse at 55 Central That focus has recently yielded enorficial relationship with the building, but Park West for $35 million as a co-exclusive mous dividends for the venerable firm. “still does more business there than any- with Douglas Elliman brokers Raphael De BHS brokers, the company said, listed four body else,” said fellow industry veteran Niro and Howard Margolis. And with his of the five most expensive properties sold in Kirk Henckels, a vice chairman at resiContinued on page 101

www.TheRealDeal.com January 2011 25

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A brand reboot

Experts review the new faces of the residential brokerage world By Christopher Cameron hat coffee mug with the company logo from last year’s holiday party? It may already be a historical artifact. In the last half of 2012, a plethora of New York City residential real estate firms revamped their images: Citi Habitats changed its logo, Douglas Elliman dropped the “Prudential” from its name and the Corcoran Group introduced the world to Marcel, an apartment-hunting French bulldog. Why the rush to rebrand? Recent changes in technol-

ogy combined with deeper pockets post-recession, made 2012 the year of image makeovers for New York’s residential firms, said David Schimmel, president and creative director at the design firm And Partners, which has worked with firms like Corcoran, Stribling and Halstead Property. For example, many consumers now use iPads and other digital technology to search online for property listings, Schimmel said, so firms want to ensure their websites are optimized for those devices. “Digital channels, including mobile/tablet apps, have become the most visible and important expressions of a

AC Lawrence

Citi Habitats

Branding team: Ammirati Last rebranding: 2007

Branding team: Freelancers Last rebranding: 2010 New Logo

Old Logo

real estate brand,” Schimmel said. “A quality digital experience ensures relevance and fosters brand loyalty.” It doesn’t come cheap, however. While the total rebranding price tag depends on a litany of variables, Sherman Advertising’s Ron Nelson estimated that the cost of redesigning logos and branding strategies can range from $10,000 to $50,000. Website design, meanwhile, can range from around $10,000 for a basic site to more than $100,000. This month, The Real Deal asked a panel of experts to weigh in on some firms’ new looks.

Concept: Late last year, the sales and rental firm A.C. Lawrence was acquired by the Bellmarc Companies. Since then, it has tweaked its name from “A.C. Lawrence” to “AC Lawrence” and launched a new branding effort, which aims to maintain a distinctive identity while blending seamlessly into Bellmarc, said AC Lawrence cofounder Anthony DeGrotta. Expert opinion: The new look is “certainly more modern and memorable than the previous logo,” Nelson said. And including “A Bellmarc Company” as part of the logo allows the firm to “strike a balance between being a boutique/hands-on firm” and having “the backing of one of New York’s larger firms.” He also said that the name AC Lawrence “is much cleaner without the full stops,” but it’s not clear if the change will matter to consumers.

New Logo

Old Logo

Concept: Citi Habitats has undergone an extensive rebranding, with a new logo, color scheme, office signage, window displays and iPhone app. “We wanted to create a whole new visual image for our company,” said Citi Habitats president Gary Malin. The firm also changed its slogan from “More broker per square foot” to “Sales and rentals, knowledge and guidance.” “We feel as though ‘knowledge and guidance’ are what the public is looking for when they choose a real estate firm,” Malin explained. Expert opinion: Citi Habitats has long tried to shake the perception that it is a rentals-only firm. The new logo helps refresh the firm’s image, Schimmel said, and is “effective in showcasing its strengths in both rentals and sales.” (See related story on page 64.)

MNS

Recent changes in technology, combined with deeper pockets post-recession, made 2012 the year of image makeovers for New York’s residential firms.

Old Logo

Branding team: In-house Last rebranding: 2011

New Logo

Concept: Fresh from a 2011 rebranding, MNS has changed its logo and colors once again.

Douglas Elliman

Branding team: AgencySacks and the Affluence Collaborative Last rebranding: 2011 Old Logo

New Logo

“The new MNS look is a little cleaner; we made the logo softer and used more whites,” explained MNS CEO Andrew Barrocas. The firm has in-house marketing and web development divisions, he said, so it’s easy to change branding elements. “We will monitor how they are perceived and will update things as needed,” he said. Expert opinion: “The new logo is more distinctive and easier to read than their previous effort,” Nelson said. “I love the simplicity and clean look.”

The Corcoran Group

Branding team: Rogue Productions, freelancers Last rebranding: 2005

Concept: Douglas Elliman officially removed the “Prudential” from its name in November

Concept: Corcoran isn’t doing a full-blown rebranding, but has made a splash recently

2012, a move that severed its ties with the Prudential Real Estate and Relocation Services network. The company changed its logo to reflect the new name and created a new website, AskElliman.com, which allows users to ask questions and receive answers from a team of real estate experts. The goal is to create brand loyalty by offering “real-time advice through an interactive digital platform,” said Camilla Papale, Elliman’s chief marketing officer. Expert opinion: By introducing a new graphic but keeping the font and founding year, Elliman appears “modern/cutting edge, while giving homage to their historic identity,” Nelson said. “I think they did it well.”

with the launch of its new website and advertising campaign. The company’s first-ever TV commercial stars Marcel the bulldog, who is shown getting a massage, dining out and using Corcoran’s website to look for an apartment. “Through Marcel, we see how the new Corcoran.com takes you beyond the home to see what it is really like to live in each neighborhood,” explained Corcoran chief marketing officer Christina Lowris Panos. Expert opinion: The Marcel ads “appeal to us on a visceral and human level, while maintaining a premium positioning,” said Schimmel, who has worked with Corcoran in the past, but not on this campaign. TRD

54 February 2013 www.TheRealDeal.com

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PR O F I L E

Invesco’s NYC spree

The Dallas-based firm did seven big deals in 2012 and shows no sign of slowing down now

BY JEREMY HERRON nstitutional investors have long coveted New York real estate, but as with most aspects of life in the city, the rules here are different. Prices are generally higher and deals move quickly, making it difficult for newcomers to break into the market. But some outside real estate firms have cracked the code. Just ask Invesco Real Estate. Two years ago, the Dallas-based investment firm had effectively no presence in New York City. Since then, however, Invesco has been involved in a dozen deals here worth about $2 billion. And it is planning to transact deals worth up to $1.5 billion this year. Last fall alone, the company paid $195.8 million for a majority stake in a retail condominium in the former Knickerbocker Hotel at 1466 Broadway, and purchased the Madison Belvedere apartment building at 10 East 29th Street on behalf of a client. Invesco “made a decision in late 2009, early 2010 to be much more aggressive in New York,” said Andrew Scandalios, senior managing director at the mortgage banking firm HFF, who has done several deals with Invesco. “They know what they want, and they have been successful in going after it.” What Invesco wants is a little bit of everything, from retail to multi-family to office, according to Greg Kraus, managing director and head of acquisitions for the firm. “We had been significantly underweight to the New York market, so we made a conscious effort to grow our portfolio,” Kraus told The Real Deal.

nomic downturn, late in 2009. At the time, Invesco executives felt that the market might soon rebound, he said, and the firm had

QUICK COMPANY FACTS FIRM NAME: Invesco Real Estate HEADQUARTERS: Dallas REAL ESTATE ASSESTS UNDER MANAGEMENT: $49.6 billion DIRECT HOLDINGS: $30 billion NYC DEAL VOLUME SINCE 2011: $2 billion

Greg Kraus, managing director and head of acquisitions at Invesco Real Estate

From left: The former Helmsley Building at 230 Park Avenue, where Invesco completed a $750 million recapitalization; the Madison Belvedere apartment building at 10 East 29th Street.

Local experience

Early investors Invesco Real Estate is a unit of the publicly traded mutual fund giant Invesco, which was founded in 1983 and has 17 locations around the world. At the end of September, Invesco Real Estate had $49.6 billion under management in its real estate portfolio, nearly $30 billion of which was tied up in direct holdings, with the balance invested in real estate securities. From February 2001 through November 2007, Invesco was involved in just six real estate transactions in Manhattan, according to data from Real Capital Analytics. And during the financial crisis, it abandoned the city for three years, not unlike many of its competitors. But the timing and scope of its recent activity here has turned heads. “They were probably the earliest among institutional investors to recognize the market was turning,” said Scandalios. “The others weren’t too far behind, but Invesco was first.” Kraus said the decision to double down on New York was made in the thick of the eco56 February 2013 www.TheRealDeal.com

transactions in New York in the past year, typically spending $100 to $300 million on each purchase. The company has targeted areas that had been under-represented in many institutional investor portfolios, like multi-family properties in Brooklyn and lower Midtown. It has also taken on properties that require renovation, including 100 Fifth Avenue, which it bought in a bankruptcy auction with M &T Bank as a lender on the deal. In targeting such a wide swath of the market, Invesco has been somewhat unique, brokers said. “I don’t know anyone who’s been as active as they’ve been across a broad range of categories,” said Will Silverman, a senior managing director at Studley who brokered Invesco’s deals at the Madison Belvedere and 100 Fifth.

Invesco paid $195.8 million for the majority stake in a retail condo at the former Knickerbocker Hotel last fall.

capital on hand to make moves they hoped would put them ahead of their competitors. Despite its size and corporate backing, Invesco still had to prove itself in the city. “We’re a Dallas firm, and even though we had long-standing relations in New York, we needed a local presence,” Kraus said. In the summer of 2010, Invesco hired Todd Bassen as head of acquisitions for the greater New York area. Bassen satisfied the local-knowledge requirement: He’s a 17-year city veteran with stints at both Vornado Realty Trust and at RREEF Real Estate, the real estate investment business of Deutsche Asset Management. “Todd is one of the smartest guys in the business,” said Adelaide Polsinelli, senior director at Manhattan-based Eastern Consolidated. Six months after Bassen joined the company, Invesco completed its first New York

transaction in three years, refinancing the Brill Building at 1619 Broadway, which it had purchased with Stonehenge Partners for $151 million in 2007. Then, in December 2010, Invesco made its first New York City purchase since the Brill, paying $55 million for 512 Broadway, a retail property in Soho. The company also made forays into the office and multi-family markets. Invesco completed a $750 million recapitalization of the former Helmsley Building at 230 Park Avenue for owner Monday Properties; spent $122.5 million to buy the Elektra, a residential rental building at 290 Third Avenue; and partnered with the Kaufman Organization to purchase the 17-story, 270,000-square-foot office tower at 100-104 Fifth Avenue for $93.5 million, or $340 per square foot. In all, Invesco has participated in seven

Bassen, who has three New York staffers and a Dallas-based closing team working under him, said his local experience has helped Invesco compete for deals in the crowded New York marketplace. “It’s a very difficult market to acquire assets in,” Bassen said. “You have the local families, the REITs, established institutions and the foreign capital that all want to be here.” Polsinelli said Invesco’s ability to beat out other firms for deals is due largely to Bassen. “His industry relationships are solid,” she said. “He’s one of the first calls most brokers will make.” It also helped that Bassen had “a lot of capital availability,” as Kraus put it, thanks to Invesco’s desire to ratchet up its New York holdings. Kraus would not say how much Invesco has available for New York business, but said the firm intends to do between $1 and $1.5 billion in deals here this year. Kraus said Invesco won’t slow down in 2013, even though many sectors of the market have tightened. In particular, he said Invesco may look to do more multi-family and retail deals in Manhattan. “The team loves, in particular, the multi-family and retail sectors in New York,” he said. TRD www.TheRealDeal.com January 2011 25

Flatiron District

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Tom Brady of Town specializes in the sale and acquisition of mixed-use & multi-family properties and can help you successfully close on your next asset. He also maintains an efficient and highly effective residential team dedicated to delivering 100% occupancy with well-qualified tenants at top-dollar rents. Secure and strengthen your NOI; put Tom’s team to work for you.

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Town Residential LLC is a partnership with Thor Equities LLC. Town Residential LLC is a licensed real estate broker and proud member of REBNY. We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. We encourage and support an affirmative advertising and marketing program in which there are no barriers to obtaining housing because of race, color, religion, sex, handicap, familial status, or national origin. All information is from sources deemed reliable but is subject to errors, omissions, changes in price, prior sale or withdrawal without notice. No representation is made as to the accuracy of any description. All measurements and square footages are approximate. Exact dimensions can be obtained by retaining the services of an architect or engineer.

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NEW DEVELOPMENT

More building than meets the eye TRD analysis finds dramatic spike in number of planned construction projects Holdings, the parent company of Brown Harris Stevens and Halstead Property. Builders filed plans for more than 12 million

BY ADAM P BINCUS Y ADAM PINCUS

hile any New Yorker can see cranes dotting the Manhattan skyline and recognize that developers are back to building, an analysis by The Real Deal shows that there is a lot more construction coming down the pike than meets the eye. While market analysts often cite U.S. Census data as the industry standard when talking about upcoming residential construction in New York City, those figures, which show an anemic level of activity, look at the number of residential building permits approved for Manhattan. However, TRD’s analysis — which looked at permit applications and is therefore one step ahead of the Census figures — revealed a surprising (and hidden) surge in planned development. Indeed, real estate firms filed more new Manhattan building applications last year — as measured in square feet — than at any time since 2007, seeding a wave of development that could continue rolling out for the next couple of years. When residential brokers, who have been itching for more inventory to sell, find out about the additional planned projects, they will be asking, “Where is this inventory, and when can I sell it?” said Gregory Heym, executive vice president and chief economist for brokerage Terra

60 February 2013 www.TheRealDeal.com

ed in 2007 when developers filed plans in Manhattan for more than 19 million square feet. During 2012, residential builders such as the Related Companies, Extell Development and Dermot Company filed plans to construct more than 4,600 new residential units in Manhattan. Meanwhile, their commercial counterparts filed plans for about 2,000 new hotel rooms. Plans for standard, nonacademic office towers were limited, with the exception of a 1.7 million-square-foot Hudson Yards building by Related. But sources say the question now is whether these numbers represent the right amount of new construction to sate demand, especially in the residential sector — or whether building this much could create another glut of inventory. New development firm Corcoran Sunshine Marketing Group estimated that in Manhattan south of 96th Street,

of 3,896 rental units would hit the market each year. But with the spate of planned projects, developers may begin looking over their shoulders and feel pressure to race against competitors to get their product on the market. Still, sources say given the mix of residential construction planned, they are not worried about developers going overboard just yet. “Clearly there has been an uptick, but I think that is somewhat tempered because a lot of the building is going to be heavily weighted on the rental side,” said Jonathan Miller, CEO of appraisal and analysis firm Miller Samuel.

Who’s building? Most of the developers on TRD’s ranking had just one or two big buildings that put them on the list. That was the case with Related. While the firm has at least eight major Manhattan projects in various stages of development, many of them residential, its above-mentioned plans for a 1.7 million-

Manhattan developers who applied for the greatest square footage of new buildings, 2012 DEVELOPER

TOTAL SQ. FT.

NO. RES. UNITS NO. PROJECTS

ADDRESSES OF PROJECTS

Related Companies

1.9 million

107

501 West 30th Street (office); 460 Washington Street (residential)

Extell Development

1.2 million

233

225 West 57th Street (mixed-use)

Dermot Company

662,309

616

21 West End Avenue (residential)

Rudin Management

581,708

200

1 Seventh Avenue (residential)

New York-Presbyterian Hospital

568,801

none

1283 York Avenue (hospital)

Fisher Brothers*

532,973

428

22 Thames Street (residential)

World Wide Group

497,249

270

252 East 57th Street (residential)

Ian Schrager and Witkoff Group*

341,648

388

215 Chrystie Street (hotel)

Glenwood Management

289,908

257

175 West 60th Street (residential)

NYC Dept. of Housing Preservation & Development

285,286

306 West 128th Street and four others (residential)

New York University

275,450

none

435 East 30th Street (academic)

Lalezarian Developers

269,584

321

507 West 28th Street (residential)

L+M Development Partners

237,906

192

23 West 116th Street (residential)

Equity Residential

198,068

225

170 Amsterdam Avenue (residential)

Zeckendorf Development

178,578

45 East 60th Street (residential)

Source note: TRD reviewed 2012 new building permit applications available through the city’s Department of Buildings. *The Fisher Brothers and Ian Schrager/Witkoff Group purchased their respective sites from the original applicants.

square feet of new commercial and residential construction last year — a 55 percent rise from 2011, an analysis of city Department of Buildings data showed. That’s the highest it’s been since the market peak-

an average of 2,234 new condominium units will hit the market annually through the end of 2015. That is below the 11-year average of 2,791 units per year. During the same period, it projected that an average

square-foot Hudson Yards office building put it at the top of this list. The 47-story tower at the corner of 30th Street and 10th Avenue — which will be the corporate home base to leather-

www.TheRealDeal.com January 2011 25

NEW DEVELOPMENT goods designer Coach — helped Related shoot to the top of TRD’s ranking, with two DOB applications for a combined 1.9 million square feet of construction. While TRD’s profile of Extell (see related story on page 40) found that the development company is currently constructing more than any other developer in terms of number of projects and square footage, our ranking of DOB applications looked only at new building applications filed in 2012. In that category, Extell ranked second behind Related with its application for a 1.2 million-square-foot tower at 225 West 57th Street that will have retailer Nordstrom at its base and cost approximately $2 billion. Initial plans call for 233 residential units, but the firm said the number of apartments has not been finalized. Gary Barnett, president of Extell, said the building will not impact sales of his One57 condo tower just a block away — because he expects One57 to sell out by the end of this year. “We see it as sequential, having one build on the success of the other. We won’t sell the new product for at least one or two years,” Barnett said. Ranking No. 3 on the list is the Midtown-based Dermot Company, led by CEO William Dickey. It filed plans to build a roughly 662,000-square-foot, 616-unit, 43-story rental tower at 21 West End Avenue. The building, which will be co-owned with the AFL-CIO Building Investment Trust, was the largest rental project applied for in 2012. Other developers among the top 10 included Rudin Management, New YorkPresbyterian Hospital/Weill Cornell Medical Center, Fisher Brothers, the World Wide Group, hotelier Ian Schrager and the Witkoff Group, Glenwood Management and the city’s Department of Housing Preservation and Development. Rudin, No. 4 on the list, filed plans in September for a residential tower at 1 Seventh Avenue, on the former grounds of a St. Vincent’s Hospital building. The application is pending. For its part, New York-Presbyterian Hospital/Weill Cornell Medical Center sought approval for a new 15-story building with operating rooms and a maternity facility at 1283 York Avenue, between 68th and 69th streets. And Fisher Brothers — which purchased 22 Thames Street in Lower Manhattan for $87.5 million from investors Allan Fried and Michael Steinhardt in September — is currently awaiting approval to build a 56-story residential building with 428 units. (The application for that project was actually filed by the sellers of the site.) Another large project is in the works from World Wide Group, which filed plans for a 57-story residential high-rise at 252 West 57th Street on a stretch that’s experiencing an enormous burst of development. Developers filed plans for five proj-

28 March 2012 www.TheRealDeal.com

ects on 56th and 57th streets between Second and Eighth avenues (see related story on page 42). Cammeby’s International, led by investor Rubin Schron, filed plans in March to build a controversial residential and hotel project (the largest hotel applied for last year) at 215 Chrystie Street, between Houston and Stanton streets. Schron won the backing of the local community board in September after several contentious meetings where he agreed to a complicated arrangement that included scaling back the project to 25 stories and 376 hotel and apartment units. But in December, he sold the site to hotelier Ian Schrager and developer Steven Witkoff for approximately $50 million, according to news reports.

Residential leads the pack The vast majority of the new construction applications filed with the DOB in

cation for a 257-unit rental building last year. The project, which won approval from the DOB last month, will rise at 175 West 60th Street in Lincoln Square, and will likely start renting in late 2014. Gary Jacob, company executive vice president, said while the 2012 building application numbers may show improvement, those 4,600 units applied for last year don’t come close to what developers were building in the 1980s. Available data seems to back that recollection up: For example, in 1985 there were more than 12,000 residential permits issued, Census figures showed. In terms of inventory, Jacob said he was not concerned about a possible glut, noting that if there were too many rental buildings in the pipeline it would be harder to get construction financing from the federal government. Yet financing remains available for rental construction, Jacob said.

as of late last month.) Excluding Related’s Hudson Yards tower, there were only a handful of new permits sought for offices, including New YorkPresbyterian’s hospital building and a proposed 15-story New York University science building at 435 East 30th Street. While the DOB applications showed that developers were seeking approval for projects spread around Manhattan, there were some areas that attracted more attention than others. For example, there were no applications for projects filed between 68th and 96th streets on the West Side. And Rudin’s new building in the West Village was the only new project filed in a large area bounded by Houston and 14th streets west of Broadway to the Hudson River. Likewise, no plans were filed in Gramercy Park. Other areas attracted a great deal of interest.

Applications for new building permits soar in 2012

2012 were, not surprisingly, for residential buildings. While rentals make up many of the large projects, developers filed condominium plans as well, including Extell’s 225 West 57th Street. For several years now, it has, of course, been easier for a developer to get a construction loan for a rental project than for a condo. That’s largely because of the hot rental market and the tough mortgage environment for condo buyers. While lending has loosened up for buyers, it’s still easier for a builder to get a development loan for a rental project. Glenwood Management, which specializes in rental construction and ranked No. 9 on TRD’s list, filed a building appli-

Michael Slattery, senior vice president at the Real Estate Board of New York, agreed. “I think people are more optimistic about the market, the limited inventory and rising rents,” he said. Still, he noted: “There are all the kinds of indicators you would like to see [to spur new development] and the permit applications may represent that.” On the commercial front, hotel developers filed plans for 2,177 hotel rooms in 2012. That’s an uptick from the year before when they filed plans for approximately 1,700 units, TRD’s analysis showed. In addition to the Schrager site, Raber Enterprises filed plans for a 239-unit residential and hotel building designed by architect Peter Poon. (The application was pending

For example, the growing Penn Station and NoMad District, from about 23rd to 29th streets between Broadway and Eighth Avenue, drew applications for seven new projects, including the 23-story residential tower at 215 West 28th Street, with 154 units proposed by the American Development Group, based in West Hempstead, L.I. Still, sources say the number of applications could be even higher if there were more available development sites in Manhattan. “The issue is, are there enough sites that can [support] large enough buildings to [fill in the lack of supply]?” Heym said. “Any way you look at it, you are still way below where you where before [the collapse] of Lehman Brothers.” TRD

www.TheRealDeal.com February 2013 61

Make Our Success Your Success! BSD Realty had a banner year!

And we'd like to add you to our growing family of satisfied clients. We dig deep to get you want you want. So you get the highest return on your investment. Here are just a few of our accomplishments this year: Commercial: 516 West 174 Street (1 bldg) - $2,000,000 22 Bradhurst Avenue (1 bldg) - $1,600,000 515-519 West 156 Street (1 bldg) - $5,525,000 508 West 136 Street (1 bldg) - $3,350,000 510-512 West 134th Street (2 bldgs) - $6,000,000 513 West 134 Street (1 bldg) - $2,000,000 243 West 135 Street (1 bldg) - $2,225,000 18 West 137 Street (1 bldg) - $3,050,000 2363 ACP BLVD (1 bldg) - $8,375,000 408-412 West 129 Street (2 bldgs) - $10,000,000 Residential: 45 East 89th Street $3,000,000.00 (off the market sale) 20 East 69th Street $4,250,000.00 (over asking price) 301 West 57th Street $1,000,000.00 (off the market sale) 308 East 72nd Street (two apartment short sale) 330 East 75th Street 181 East 65th Street (off the market $6.7M sale) 160 West 66th Street 310 West 52nd Street We are also proud to announce that we also received assignment to manage the following properties; 516 West 174 Street 22 Bradhurst Avenue 515-519 West 156 Street 508 West 136 Street 510-512 West 134th Street 513 West 134 Street 243 West 135 Street 118 West 137 Street 2363 ACP BLVD 408-412 West 129 Street

This year, join our growing family of clients who think small and dream big. And let's add your name to our list of successes.

Charles Glatter, CEO & Founder BSD Equities I 174 Fifth Avenue, I 301 New York, NY 10010 O: 212-367-7200 C: 917-612-7222l Charles@BSDequities.com Visit our website at: www.bsdequities.com Follow us on Twitter: @BSDequities 62 February 2013 www.TheRealDeal.com

TH I S M O N T H I N

R EAL E STATE H ISTORY A look back at some of New York City’s biggest real estate stories

1967: NYC’s first $1B construction budget

eflecting the booming local economy (and population), City Hall proposed New York’s first $1 billion construction budget, 46 years ago this month. Mayor John Lindsay presented the historic budget — which spanned the fiscal year beginning in July 1967 — to the Board of Estimate and city council. The dollar figure was an astounding 61 percent above the prior year’s budget of $667 million. Most of the increase was to be offset from a large rise in federal funding, according to reports in the New York Times. Lindsay directed the biggest slice of the pie to the Board of Education, which was allocated $175 million for new school construction. He also included $109 million for transit, as well as $66.5 million Mayor John Lindsay for hospitals and $25 million for housing redevelopment in neighborhoods like Harlem, the South Bronx and central Brooklyn. The Board of Estimate and city council approved the capital budget with minor changes in March. The rest of the city’s budget — the $5.2 billion expense budget — was passed in June.

1933: New city housing authority proposed

lans to create what would become the New York City Housing Authority were unveiled 80 years ago this month. Indeed, the New York State Housing Board sought to create the new city agency that would have broad powers to construct apartment buildings in poor areas of the five boroughs. The redevelopment effort was known as “slum clearance” at the time. Mary Simkhovitch, the founder of the National Public Housing Conference, a leading affordable housing organization, backed the plan, giving it instant credibility. The new city authority was given the power to purchase and condemn areas considered unfit for habitation and then redevelop the land for affordable housing using both public and private financing. The proposal tapped into newly created mechanisms of federal funding. In January 1934, the Municipal Housing Authority (later renamed the New York City Housing Authority) was created Affordable housing advocate Mary Simkhovitch by the newly sworn-in Mayor Fiorello LaGuardia. The next month, the new agency received $25 million for the effort from the federal government’s Public Works Administration, an agency formed as part of the New Deal in 1933.

1909: Trinity Church to sell residential holdings

he Trinity Corporation, the landlord for Trinity Church, announced plans to exit the residential ownership business on the west side of Lower Manhattan, 104 years ago this month. Under pressure from the media and city government, Trinity — which held commercial and residential properties valued at about $30 million around the time — had been criticized for more than a decade for owning small residential properties in slum conditions in the area. News reports dating back to 1894 detailed the poor quality of the living conditions discovered by the city in Trinity’s buildings. Those conditions included the lack of running water to upper floors of its residences. Varick Street, where Trinity Corporation owned property Trinity denied that it owned low-quality buildings and said many of the poorly maintained properties were leased to other owners who didn’t repair them. Nonetheless, Trinity said it would sell — or convert to commercial buildings — the mostly one- and two-family residential buildings on about 700 parcels it owned in the area between Christopher and Vestry streets and Washington and Sullivan streets. The church first acquired the properties as part of a 215-acre land grant in what is now Manhattan’s Hudson Square area from Queen Anne of England in 1705. Today, Trinity Real Estate owns a 6 million-square-foot office portfolio on 15 acres in the neighborhood. Compiled by Adam Pincus

Linda F. Stillwell Senior Vice President, Director Licensed Associate Real Estate Broker lstillwell@bhsusa.com 212-452-6233

c: 646-483-9843

We Are Pleased To Welcome Linda Stillwell And Her Team

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Tate R. Kelly

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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.

Pr o f i l e

Changes for Citi

A behind-the-scenes look at the recent shake-up at the rental behemoth — and why company execs say it’s good for the bottom line Bullish beginnings

Citi Habitats president Gary Malin

By Katherine Clarke ongues wagged in the industry last month when Gordon Golub, a top executive and 18year veteran at residential real estate brokerage Citi Habitats, left the firm for the tech start-up Urban Compass. His departure is the latest in a series of significant changes at Citi Habitats, one of Manhattan’s largest firms and its most dominant rental company. Citi’s head of new development marketing, Clifford Finn, left for Douglas Elliman this fall, and his division was moved over to Corcoran Sunshine, the new development arm of the Corcoran Group, which acquired Citi Habitats in 2004. Also in the last year, Citi launched a rebranding campaign and saw Realogy — its parent company — issue a muchhyped IPO. Citi also announced the closures of offices at 27 East 22nd Street and 32 East 22nd Street, bringing its total office count to nine, down from 17 at its peak. These changes appear to be having an impact on the firm. The number of Citi Habitats agents dropped to roughly 630 agents as of

64 February 2013 www.TheRealDeal.com

last month, down from 673 in 2011 and 816 in 2008, according to The Real Deal’s most recent ranking of the city’s largest firms. And while Citi has made a push in recent years to establish itself in the sales arena, the company has seen its exclusive sales listings fall from 228 in May 2011 to 130 last month.

cent reduction in office space means it can’t accommodate as many agents right now. “We’re in the process of reinvigorating our company in terms of its offices,” he said. “When you reduce the number of offices and look to secure much larger offices, there’s going to be a gap between what you are today and what

“Some people would say that [Citi is] a victim of its own success in rentals.” Pamela Liebman, the Corcoran Group But in a sit-down interview with TRD last month, Corcoran Group CEO Pamela Liebman and Citi Habitats president Gary Malin dismissed the drop in listing volume, noting that Citi had a “banner” year in sales for 2012. (The company declined to provide a dollar figure for its sales in 2012.) Plus, they said Citi has consistently maintained its roughly 50 percent market share in rentals. As for the drop in agent numbers, Malin attributed that to the normal “ebb and flow” of the real estate business. He added that the company’s re-

you’re going to be tomorrow.” Still, real estate industry insiders said the loss of managers and topproducing agents can’t help but hurt Citi Habitats’ bottom line and market position in the long run. That’s especially true because the departure of high-ranking veterans from real estate firms often “has collateral damage that comes along with it,” said rental industry veteran Anthony Lolli, CEO of Rapid Realty. “When one of these senior people decides to leave, it really opens up the door for others to follow.”

Citi Habitats was famously founded in 1994 by Andrew Heiberger, now the CEO of brokerage Town Residential. Heiberger initially stayed on as Citi Habitats president after the company’s acquisition by Corcoran, but left after a year. Malin, an attorney and Heiberger’s college roommate, was promoted to president of Citi in 2008. During their interview with TRD last month, Malin and his boss seemed at ease, with Liebman quipping that Malin still lets her win at golf. Citi Habitats started out by focusing on young professionals renting New York City apartments, Malin recalled. The premise, he said, was that happy rental consumers would eventually return to Citi as homebuyers. Citi also started a new development division to take advantage of the mid-2000s housing boom, taking on exclusive marketing contracts for projects such as Silverstein Properties’ massive rental complex Silver Towers and the Forest City Ratner rental tower New York by Gehry. The firm grew quickly, making its way to the top of the city’s brokerage heap. In a 2007 TRD ranking of Manhattan rental firms, Citi was by far the largest. It has since retained that position; the firm said Citi Habitats does the most rental transactions of any firm in the city and has the most exclusive rental listings. Top brokers there include sisters Tracie Hamersley and Elizabeth Hamersley, Caroline Bass and Jason Saft, who recently made headlines when Yankees slugger Derek Jeter checked out his listing for a $25,000-per-month rental at 129 West 20th Street. By the time it was sold to Corcoran, Citi Habitats had more than 800 agents and 17 Manhattan offices, plus two spaces for SóLOFTS, an offshoot of Citi Habitats focusing on loft and home sales. The deal with Corcoran, which is owned by NRT, was reportedly valued at $49.6 million. (Liebman told TRD the figure was inaccurate, but declined to provide the correct amount.) NRT is a subsidiary of Realogy, the parent company of national franchises such as Coldwell Banker, Coldwell Banker Commercial, Better Homes and Gardens Real Estate, Sotheby’s, Century 21 and ERA (see related story on page 44.) The marriage of Corcoran and Citi Habitats seemed like a match made in real estate heaven, bringing together one of the city’s largest sales firms with its biggest rental firm. But while the ini-

www.TheRealDeal.com January 2011 25

Pr o f i l e tial transition appeared to be smooth, sources told TRD that the two companies soon began stepping on each other’s toes. Heiberger declined to comment for this piece, but sources said he viewed the merger as a means to accelerate Citi’s growth as a sales firm. It had been agreed, for example, that Corcoran would appoint experienced sales managers to help train agents at Citi

er firms in the top five grew. In fact, Bond New York, a sales and rental company founded by Citi Habitats alumni, saw its ranks swell by some 12 percent between 2011 and 2012, while Citi’s dropped by roughly 7 percent, according to TRD’s rankings. High-profile managers also left Citi Habitats. In 2010, for example, former Citi Habitats director of sales Greg Young departed after 10 years at the company.

son so many top agents and managers have left. Rado Varchola, who was Citi’s top individual broker by overall production and top individual broker in sales for 2011, cited lack of support as the reason he departed the company last year for Nest Seekers International. “NRT is a huge corporation,” Var-

was expecting a tremendous amount of support and it wasn’t delivered,” he added. Malin downplayed the significance of departures like Varchola’s. “Just because an agent was a top agent in 2010 doesn’t mean necessarily that in 2011 or 2012 he or she will be that top agent again,” Malin said.

Citi Habitats “doesn’t know what it wants to be. It started out as a strong rental company and then it tried to get into the sales side. It gave mixed messages to the market, and that impaired it.” Neil Binder, the Bellmarc Group Habitats. But sources with knowledge of the firm’s inner workings said that never happened. In fact, Liebman and Malin told TRD last month they had no knowledge of any promise relating to the installation of managers from Corcoran. Meanwhile, the SóLOFTS offices were rebranded as Corcoran locations. “Citi Habitats was selling more and more apartments, and Corcoran didn’t particularly like it,” said one former manager at Citi. “They wanted it to be a rental company that did some sales.” In fact, multiple sources close to the firm said, especially in the early days of the merger, Corcoran tried to limit Citi’s growth in the sales market to prevent it from competing with the older firm. Liebman and Malin strongly denied that claim. Indeed, Citi Habitats’ newly unveiled logo emphasizes its focus on both rentals and sales. “As well as being president of Corcoran, I’m a senior regional vice president for NRT,” Liebman said. “In that capacity, I am as invested in Citi Habitats’ success as I am in Corcoran’s success.”

Personnel changes When Malin took the company’s reins in 2008, he spoke publicly of his desire to increase Citi’s presence in the sales arena. And at first, the plan seemed to have worked, even during the recession: Between 2008 and 2011, Citi’s exclusive sales listings grew from 156 to 228, according to TRD’s rankings. But during that same period, the firm’s agent count dropped, falling from 816 in 2008 to 630 in 2012. While many firms lost agents during the financial crisis, according to TRD’s data, Citi is the only one of Manhattan’s five largest firms to shrink in size between 2011 and 2012, a period when the city’s rental market was booming. All the oth-

28 March 2012 www.TheRealDeal.com

Young, or “G-Money,” as he was nicknamed, had created a well-regarded rental training program at Citi, meeting with each agent at the company a few times a year to review their progress. Young, who left to start a real estate training and consulting company called Broker Heaven NY, declined to comment for this piece. In 2011, Sara Rotter, Citi’s director of sales for the Gramercy, Flatiron, Chelsea and West Village offices, left the firm to join Halstead Property, along with top-producing broker Dina Cohen. They also declined to comment on the reasons for their departure. And when Heiberger founded Town Residential (after his noncompete clause with Citi had expired), a number of Citi brokers and staff went to work there. Those who defected to Town included Citi Habitats managers Matthew Van Damm, Juliet Clapp, Eric McCarthy, Itzy Garay, and Chris Reyes, Citi’s former director of information technology. Former Citi Habitats top producers now at Town include Jimmy Brett, Cord Stahl, Evan Rosenfeld and Danny Davis, who was named Citi’s top-grossing agent for sales and rentals in 2010. Liebman said the existence of Town has not significantly impacted Citi Habitats, however. “If Andrew didn’t open his firm and somebody wanted to leave, there are 20 other companies they would have gone to,” she said. “We don’t look at Town any differently. There’s a thing in this business called “the shiny penny.” He was the shiny penny for a while because he was brand-new.” Many New York City agents switched brokerages during the recession and most firms took steps to cut costs. Indeed, multiple sources cited limited resources at Citi Habitats — stemming from the financial crisis — as one rea-

From left: Former Citi Habitats head of new development marketing Clifford Finn, Pamela Liebman and Gary Malin.

From left: Former Citi Habitats rental director Gordon Golub; Peter Sobeck, executive vice president and chief operating officer at the firm

Silverstein Properties’ Silver Towers rental complex, where Citi Habitats was the exclusive leasing agent

chola said. During the housing downturn, “they were losing money nationwide. There were many cuts, and the company just didn’t have the resources to show me the support I was looking for.” “After being named No.1 in 2011, I

And Liebman told TRD that no cost-cutting has been done at either company since 2009, when Citi Habitats offices were shuttered on West 57th Street and in the Financial District. In fact, overall expenditures have actually Continued on page 104

www.TheRealDeal.com February 2013 65

ARCHITECTURE REVIEW

JA M E S G A R D N E R

An architectural crew cut

DDG’s 345Meatpacking is one of the better buildings in the neighborhood

his past summer, those who made it to the western-most portion of 14th Street were likely to be dazzled (and perhaps confounded) by the sight of an enormous 11-story box, covered in what must surely have been the most expensive wrapping paper in human history. The wrapping — actually construction netting designed by famed Japanese artist Yayoi Kusama — was a convoluted affair of snakelike, black branches against a yellow background. The site would be immediately familiar to anyone who visited Kusama’s contemporaneous retrospective at the Whitney Museum. Now, the building that lay hidden underneath finally stands revealed. As good as it is, this all-but-completed structure at 345 West 14th Street (a.k.a. 345Meatpacking) will never surpass what Kusama had wrought in terms of drama and pure visual pizazz. In fact, its aesthetic ambitions are precisely contrary to those conceived by Kusama when she devised the covering for the building. Whereas the latter offered endless curvature amid striking chromatic effects, 345Meatpacking is a strictly rectilinear monolith, clad across most of its surface in gray brick. And yet, the resulting austerity conveys its own quiet elegance, and 345Meatpacking is one of the better buildings to go up in the neighborhood, which has already seen the completion of such estimable projects as the Gansevoort and Standard hotels. The building, developed and designed by DDG Partners, contains 37 new condo units. With prices starting at $1.1 million, the units went on sale with Corcoran Sunshine Marketing Group this fall. According to DDG, the building is already 70 percent sold. In-house architects at DDG designed both the interiors and the exterior. The firm was also responsible for the recently completed 41 Bond Street, the latest architectural trophy to appear on that increasingly distinguished street. At 345Meatpacking, the interiors have been cast in a tone of gleaming and pristine Modernism, with little trace of

66 February 2013 www.TheRealDeal.com

matic variation. And yet the building hardly feels dull, since the architects at DDG have found subtler ways of investing the project with interest. Despite its severe geometry, 345Meatpacking manages to fit in with the prewar brick buildings that abound in this stretch of Manhattan through the use of its elegantly punched windows, which improbably transmute the warehouse aesthetic of the Meatpacking District into the stuff of luxury. There are also other details A rendering of DDG’s 345 West 14th Street, a.k.a. 345Meatpacking. Insets, from top: that gently mitigate the severArchitect Enrique DDG Norten CEO Joseph McMillan, Jr.; the partially completed building contains 37 new condo ity of the façade. The Kolumba units, which went on sale with Corcoran Sunshine last fall; the construction netting bricks are arrayed lengthwise, designed by Japanese artist Yayoi Kusama that covered the building’s façade last summer. rather than in the more typical Flemish Bond rows seen in most brick buildings throughout the five boroughs. Meanwhile, along the corners of the new building, every third brick is laid at a slight angle so as to create indentations that succeed in looking very stylish. Finally, above and below each window, the bricks are set head-first, in a subtle but effective alteration of the rhythms of the rest of the building. The biggest variant of all, surely, is the penthouse area, a three-story affair that is slightly recessed from the rest of the building. Here, stolid brick walls yield to a thin modular construction formed of the same gleaming brass as the windows on the lower floors. This is the only element of the project that could vaguely be seen as Deconstructivist in so far as the shape would hardly have occurred without the lessons of a decade of such projects throughout the city. Overhanging the entrance is a long canopy designed to be covered with ferns and fronds. The renderings also promise touches of greenery along much of the penthouse, which would further tion a soaking tub in the same materiself-imposed rectilinear constraints. In- mitigate the severity of the façade. als, as well as Villeroy & Boch sinks with deed, the blockishness of the building Together with 41 Bond Street, this Hansgrohe fixtures, and Duravit sinks amounts almost to a polemic: Its tonso- new addition to the far West Side is rial equivalent would be a well-groomed yet another testament to the enduring with Dornbracht fixtures. The kitchen, meanwhile, can claim such de rigueur crew cut, evoking the straight-shooting power of brick to adorn a façade with touches as Absolute Black granite counintegrity of an earlier age. style. In some respects, the use of brick tertops and monolithic backsplashes, Furthermore, the severely monochro- at 345Meatpacking is less daring than Sub-Zero refrigerators and wine coolmatic façade is entirely lacking the sort of the futuristic flashiness 41 Bond Street. ers, Wolf ovens and Bosch dishwashers. tacked-on ornament without which most But the high-minded austerity of the In recent years, such amenities have becontemporary architects — whatever building, with its slightly archaic purity come commonplace in the high-end New their style — seem to feel that a building and its resonant chasteness, possesses is left naked and exposed. The brass sur- its own considerable artistic justificaYork City condo market. One of the things rounding each window is its only chro- tion. TRD that distinguishes 345Meatpacking, the subtle contextualism that is so conspicuous, a part of the building’s handsome brick exterior. These interiors go out of their way to boast the sort of touches that quicken the pulse of design types: Among the party favors on the developer’s fact sheet are handcrafted Moroccan floor tiles in the bathrooms and shower stalls decked out in Spanish travertine, not to men-

however, is that the Europhile fun continues onto the exterior. The façade has been decked out in handmade Kolumba bricks from Denmark, while the oversize bronze windows were fabricated in Italy and the floors of the entrance are arrayed in Austrian white oak. It’s striking how unapologetically boxy the exterior of the building is. It occupies its allotted cubic envelope with pride, and seems in no rush — unlike many contemporary structures — to break free of its

BUILDING PHOTOGRAPH FOR THE REAL DEAL BY DEREK ZAHEDI; PHOTOGRAPH OF MCMILLAN BY MAX DWORKIN

YOUR NEW WAY HOME.

citihabitats.com

VITAL STATS NAME: Brenda Rosen AGE: 45 TITLE AND COMPANY:

Executive Director, Common Ground HOMETOWN:

Roosevelt Island CURRENTLY LIVING IN:

Astoria, Queens BUILDING BLOCKS Common Ground is not a traditional landlord. What’s the organization’s mission? The mission is to end homelessness for New Yorkers. We do that through the development and operation of housing for the low-income [population] and those with special needs. Anywhere from 40 to 50 percent of our tenants are formerly homeless with mental illness or have substance abuse issues or HIV/AIDS. There are no requirements for sobriety. You come in with the baggage you had on the streets. How many buildings does Common Ground own? We own 12 buildings and manage an additional four. The ones we own are in Manhattan, the Bronx and Brooklyn, as well as upstate New York and Connecticut. Overall, we oversee about 3,200 units. Our smallest building is about 60 units. It’s in Jamaica, Queens. Our largest is 650 units at 249 West 43rd Street. The average building is around 200 units. How did Common Ground get started? We started in the 1990s by rehabilitating former hotels in the Times Square area. The first generation of what Common Ground did was rehabilitating existing buildings, but over the last several years, we have focused on new development. How did you get into real estate? When I was 10, my family moved to Roosevelt Island. A week after moving there, there was a fire in our building. If it weren’t for the kindness of neighbors, we would have been homeless. But because they advocated for us, we [were able to] sleep on the floor of another vacant apartment. That experience made me decide that somehow I was going to work in a field that had to do with housing and helping people. I ended up going to law school and working as assistant general counsel for the Department of Homeless Services before joining Common Ground in 1999.

LANDLORD LIFE What’s been your strangest tenant experience? We have a lot of tenants that have pets. A tenant in our Times Square building had a pet monkey. He [made headlines in 2009] after sneaking it through security at LaGuardia Airport. ... Now we have a tenant at the Prince George building on East 28th Street who has a dog, a cat and two parrots. The dog always has to have sneakers on. He walks the dog and the cat together with a parrot on each shoulder. What are the joys of the job? There are people our staff has worked with that lived under an underpass for years and now they’re stable. There’s no day that you don’t think that it’s worthwhile.

68 February 2013 www.TheRealDeal.com

THE BOTTOM LINE Where does your capital come from? Tax-exempt bonds, capital subsidies from city and state sources and funds raised from the sale of low-income housing tax credits. It’s a complex puzzle that’s pieced together. What are the biggest challenges of your job? Ensuring funding. Every year we have to advocate more strongly to ensure budgets are not cut. Every time the state budget is being put together and the federal government is doing its budget, we wonder whether services and Section 8 subsidies are going to be cut. How much rent do Common Ground tenants pay? The rents are capped at no more than 30 to 35 percent of a tenant’s income. A low-income rent, depending on the area the building is in, can range anywhere from $490 to $700 a month. Are communities ever resistant to your buildings opening in their neighborhoods? When they first hear we want to come in and build a property that will house formerly homeless individuals, the reaction can be, “No, that’s okay, we don’t need you here.” But we focus very strongly on design.

Robert A.M. Stern was the architect at a building we opened in Connecticut last year. We opened a building in Brownsville, Brooklyn, last year that was designed by COOKFOX. We have a reputation for wanting to make sure that our buildings are cutting edge and sustainable. We want to be good neighbors. Since you took the reins at Common Ground, how have the company’s plans changed? We realized we had to expand further into working with families. We also realized that there’s a great need in New York for plain old affordable housing. … We’re also looking to work with for-profit developers to rent up and manage their low-income units. We’re working with the Gotham Organization right now. They’re doing a project on West 44th Street. We’re working to rent up the low-income portion of that building. On the development side, are you looking at targeting particular neighborhoods? We’re looking to focus on the South Bronx, Brownsville and East New York. We’re hoping to break into Queens as well, but there’s definite community resistance. By Katherine Clarke

PHOTOGRAPH FOR THE REAL DEAL BY DEREK ZAHEDI

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Real Deal - February 2013 - updated.indd 1

1/30/13 2:24 PM

On the red carpet with REBNY

From left: Steven Spinola and Burton Resnick

Mary Ann Tighe

Some 2,200 people turned out for the trade group’s annual banquet

he mood was decidedly upbeat at the Real Estate Board of New York’s 117thannual banquet and gala, held last month at the New York Hilton Hotel in Midtown. The $1,000-per-plate dinner, the first under newly minted REBNY chair-

man Rob Speyer, attracted some 2,200 people, about 10 percent more than last year. This year’s honorees included Donald Zucker, chairman of the Donald Zucker Company;

From left: Sen. Charles

Mike Fishman of the Service Employees International Union; Douglas Elliman pres-

Schumer and Hal Fetner

ident and CEO Dottie Herman; Studley’s Woody Heller; Dick Concannon, senior vice From left: Jonathan Mechanic and Rob Speyer

president at Rudin Management; and William Montana, managing director at Studley. In addition to industry heavyweights like Larry Silverstein, Douglas Durst and William Rudin, the event was attended by politicos Mayor Michael Bloomberg, Senator Charles Schumer, Representative Carolyn Maloney and Department of City Planning director Amanda Burden, along with mayoral candidates Joe Lhota and John Catsimatidis. By Leigh Kamping-Carder

Laurence Gluck

From left: Mitch Rudin, Bill Thompson, Bill Rudin, Carolyn Maloney and Scott Stringer

Faith Hope Consolo and Joseph Aquino

Where are the best opportunities for investors right now?

“There are some good opportunities for long-term owners. You can’t be a short-term player in this market. New Jersey, especially, offers a value opportunity we don’t see in New York.” Neil Rubler, Ceo of VANTAGE PROPERTIES

Paul Massey

From left: Rob Speyer and Mayor Michael Bloomberg

Mary Ann Tighe and David Levinson 70 February 2013 www.TheRealDeal.com

From left: Ray Kelly and Bill Rudin

Larry Silverstein and Leslie Wohlman Himmel ALL PHOTOS BY MARC BECKER, EXCEPT FOR NEIL RUBLER PHOTO (BY ZACHARY KUSSIN)

From left: Faith Hope Consolo and Dottie Herman

From left: Douglas Durst and David Greenbaum

Have you seen a slowdown in activity this winter?

“We closed 17 deals in the last 10 days for over $500 million. There were a couple of quiet days after the New Year, and then we were right back into it.” PETER HAUSPURG, CHAIRMAN AND CEO, EASTERN CONSOLIDATED

From left: Leonard Boxer and Jerry Speyer

From left: Leonard Boxer and Larry Silverstein

Jed Walentas

From left: Nathan Halegua, Joel Herskowitz and Bruce Mosler

From left: Hector Figueroa and Jeffrey Gural

From left: Ryan Slack and Adam Leitman Bailey

From left: Adelaide Polsinelli, David Schechtman, Lipa Lieberman, Ronald Solarz and Daun Paris Donald Zucker

How do you think a new mayor will impact real estate?

“Under Bloomberg, they rezoned 40 percent of New York. [I doubt] we’ll see anything like that happen again. It’s hard to think that any mayor can keep that up.” James Nelson (center), partner,

Woody Heller

Massey Knakal

From left: Mark Murphy, Larry Silverstein and Alan Wiener www.TheRealDeal.com February 2013 71

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Q&A

Renter fatigue?

While the Manhattan rental market is still strong, brokers weigh in on whether New Yorkers have reached a tipping point on sky-high prices BY MELISSA DEHNCKE-MCGILL here’s been a lot of buzz in the industry lately about the long-hot Manhattan rental market finally taking a breather from its constant rent increases. Indeed, while the rental market is still up about 5 percent year-over-year, it saw a dip in prices between the third and fourth quarters of 2012. This month, The Real Deal talked to rental brokers, firm heads and market analysts to gauge what they’re seeing on the ground and what they make of the recent softening. Most noted that the market is still incredibly strong and argued that the recent weakness was nothing more than a seasonal downshift. Others said it still remains to be seen whether renters have maxed out on their willingness to pay increased prices. Citi Habitats’ Gary Malin said he would be watching to see whether 2013 brought “renter fatigue,” meaning renters had hit a tipping point. One telling sign is the dynamic at work between the boroughs. Market analyst Jonathan Miller noted that the difference in median rent between the

Gary Malin

president, Citi Habitats For the last few years Manhattan rents were continually going up, but recent reports show that the market is now softening slightly. What are you seeing in terms of prices for Manhattan rentals? During the fourth quarter of 2012, we saw Manhattan rents decrease by a relatively small amount. The shift can largely be attributed to the time of year. And rents have actually increased by an average of 5 percent year-over-year and are nearly 15 percent higher than they were two years ago. So they still remain at near-recordhigh levels. It remains to be seen just how much of the recent rent drops are seasonal, versus signs of “renter fatigue” — my term for the point where renters just can’t afford to pay the asking prices anymore. If we see continued declines into 2013, it could be a sign of the latter. The most recent market reports also show that inventory ticked up. What are you seeing in terms of inventory compared to six months ago, a year ago and two years ago? Six months ago was the peak of the summer renting season, so there is more inventory on the market now than there was during that extremely active period. The vacancy rate is also up slightly from one year ago. In December 2012, it was 1.37 percent, up from 1.27 percent the year before. But it’s important to keep in mind that these rates are extremely low compared to the national standard. TRD and others have reported that some 76 January 2013 www.TheRealDeal.com

first-time buyers have been pushed into the sales market because rental prices have gotten so high. What are you seeing on that front, and how is that impacting your firm? Our agents have transitioned a lot of rental clients into the sales market. The studio and one-bedroom market on the sales side is currently very active. … However, strict lending standards and an uncertain economy mean that many New Yorkers will remain in the city’s rental market — by choice or necessity. Which Manhattan neighborhoods have seen the biggest price drops and inventory increases as part of this rental market softening? In terms of rent declines across all apartment sizes from November to December of 2012, the biggest drops occurred in Midtown West. When examining vacancy rates for the same period, the largest jump in the number of available apartments occurred on the Upper East Side. Which Manhattan neighborhoods have held up the strongest since the softening began? Downtown areas have continued to perform extremely well — areas like Soho, Tribeca and the West Village. One reason is the lack of inventory. You don’t see many [giant] high-rises in these neighborhoods, and that’s part of their charm. We’ve reported that many renters are opting out of the pricey Manhattan market and are looking for rentals in Brooklyn and Queens instead. What are you seeing on that front? During 2012, our firm worked on several new residential buildings in Downtown Brooklyn and in Long Island City and Astoria, Queens. All these developments have performed exceptionally well. Rent-

Manhattan and Brooklyn markets has “compressed” slightly in the last year. Some say that may be because an increased number of Manhattanites are turning to the outer borough for more affordable apartments. But he noted that the “more modest” rental growth in Manhattan is a good thing. “Anytime you have out-of-control growth that doesn’t self-regulate, it always ends badly,” Miller said. Others noted that while some renters attempted to flee the rental market recently to buy instead, they are now back because qualifying for a purchase is still difficult. “The same customers who might have fled the rental market at the beginning of 2012’s fourth quarter are now returning to our rental offices in search of another year’s lease,” said Douglas Wagner of Bond New York Properties. For more on which rental price points are performing best, what’s going on with rental development and what’s happening with concessions from landlords in the rental market, we turn to our panel of experts. ers can find new luxury rental properties that are trading at a 25 to 30 percent discount to equivalent properties across the river.

Adina Azarian

president, Adina Equities at Keller Williams NYC For the last few years Manhattan rents were continually going up, but recent reports show that the market is now softening slightly. What are you seeing in terms of prices for Manhattan rentals? The winter months are always slow. I think it’s very possible that once [we move beyond the off-season] it will be more clear that any softening was just really normal fluctuation. Prices have gone up on average about 20 percent in the last two years. Sources say that the upper end of the rental market has done far better than

Do you expect the softening of the market to have any sort of impact on whether developers continue to build new rental buildings? I think the rental market is still too strong to have that impact. However, I have had conversations with developers and investors who recognize the lack of new construction and see the demand. So they are thinking “condo” again.

Bahar Tavakolian senior vice president, Stribling & Associates

Recent reports show that the market is now softening slightly. What are you seeing in terms of prices for Manhattan rentals? Yes, that seems to have been the trend. It appears that we peaked in the summer. Prices have softened just slightly, [but] some owners and agents are not keeping up with market changes and are

“Anytime you have out-of-control growth that doesn’t self-regulate it always ends badly. Think about the housing boom in the middle of last decade.” JONATHAN MILLER, MILLER SAMUEL the middle and lower ends. Is that what you’re seeing? I agree. The luxury market is very tight. The three-bedroom-and-up luxury apartment is just hard to come by, and the rents are through the roof. In general, there’s been a major slowdown in new construction, especially for large luxury apartments that investors used to buy and rent. That slowdown has definitely caused a lack of luxury rental inventory.

insisting on asking rents of the peak period. These listings tend to stay on the market. Which Manhattan neighborhoods have seen the biggest price drops and inventory increases as part of this rental market softening? FiDi has always had a rather large inventory of rental properties. Midtown West with MiMa and large residential buildings www.TheRealDeal.com February 2013 73

Q&A on and around West 42nd Street also has a large inventory of rental units. Is the upper end of the rental market doing better than the middle and lower ends? Absolutely. It’s all about inventory, and there’s a serious lack in the upper end.

Douglas Wagner

executive director of leasing, Bond New York Properties Are you seeing more renters move into the sales market because rents have gotten too high? Some renters have turned to the sales market because of high rents, lack of choice and low interest rates. [But] we’re finding that some consumers have become turned off by bidding wars, lack of choice in the sales market and the arduous qualification process for mortgages. The same customers who might have fled the rental market at the beginning of 2012’s fourth quarter are now returning to our rental offices in search of another year’s lease. Which Manhattan neighborhoods have seen the biggest inventory increases and price drops as part of the rental market softening? Vacancies in Midtown West and the Upper West have increased by approximately 15 percent since December 2011. The only neighborhood that shows lower prices this year over last is the Upper East Side, where some of the most affordable inventory in the city can be found. The studio and one-bedroom market starts at about 2 percent cheaper than last January. Which Manhattan neighborhoods have held up the strongest since the softening began? The West Village maintains the highest value and the lowest vacancy rate. Prices have barely changed in this neighborhood in two years, although there is about 12 percent more inventory this January. Time will tell if landlords have to adjust their historically high prices to see these apartments absorbed. What’s going on with concessions in the rental market? Developers [continue to offer customary concessions] on new construction. There are also some landlord concessions at the highest price point of each size category. For example, the $3,500 studios and $4,500 one-bedrooms sometimes offer some free time or a partial broker fee in buildings with large inventories. 74 February 2013 www.TheRealDeal.com

What are the most surprising trends you’re seeing in the Manhattan and New York City rental market today? Landlords with mid-market apartments in walk-up and mid-rise elevator buildings have spent much of the past year renovating ordinary apartments in order to be competitive with the higher-tier properties. We’re seeing some well-designed and highly finished tenement-style apartments pricing like doorman units. What are the most positive trends you’re seeing in the Manhattan rental market today? We look forward to the forthcoming changes to real estate advertising regulations, which should take effect by the spring. Brokers will become more accountable for representing themselves transparently to consumers. Rental agents who misrepresent themselves on Craigslist as owners will find no tolerance and big penalties under the new laws. What are the most troubling or worrisome trends? There are fewer choices than ever for economically limited renters. What sorts of trends are you expecting to see in the rental market in the coming months? We anticipate prices will remain high. Whatever seasonal build-up of inventory we might experience in the first quarter will be absorbed in the second quarter … [and] vacancy rates will remain at crisis levels during 2013.

Jonathan Miller

president/CEO, Miller Samuel What are you seeing in terms of prices for Manhattan rentals compared to six months ago, a year ago and two years ago? The rental market has continued to rise on a year-over-year basis, but the pace of growth has been easing over the past three months. The median rental price is up 0.8 percent from the same period last year, up 11.3 percent from the same period two years ago, but down 1.6 percent, or $50, from six months ago. Of course, that’s a seasonal decline. What are you seeing in terms of renters opting out of Manhattan because it’s become too pricey and renting in Brooklyn and Queens instead? We have been seeing this trend evolve over the past year. [But] the difference in median rent for Manhattan and Brooklyn has compressed over the past year as demand rises in Brooklyn. The difference in median rent between Manhattan and

Brooklyn for December compared to a year ago went from $525 to $513. Not a large change, but it shows how Brooklyn has been rising a bit faster than Manhattan has. What differences are you seeing between the higher and lower ends of the rental markets? The lower end of the rental market has seen more competition with the sales market as first-time buyers consider buying and move into the purchaser market. We are not seeing the same activity in the larger-apartment market. How are landlords, particularly those who have new development buildings that they are still looking to lease up, reacting to the changes in the rental market? I don’t think the rental market will be about falling rents over the next year. Employment has risen and mortgage rates have fallen. … Rents will remain elevated for a while, whether or not they rise or fall a bit going forward. [But] I think we will see more use of landlord concessions going forward. The period we are in now without much use of concessions is the outlier. What are the most positive trends you’re seeing in the Manhattan rental market today? A more modest pace of growth is always a positive trend. Anytime you have outof-control growth that doesn’t self-regulate it always ends badly. Think about the housing boom in the middle of the last decade. What are the most troubling or worrisome trends? That we have no cohesive economic policy vision coming out of Washington and that the banks really aren’t all that solvent. Also that the rise in rents, not just in New York City but in the U.S., was a function of tight credit and that the entire boom in multi-family development was predicated on rising rents. It just makes me nervous.

Javier Amor

salesperson, City Connections How is the Manhattan rental market doing these days? In the last week and a half, people have been asking for up to $100 off the asking price of an apartment. In most cases, my fiduciary responsibility is to the landlords and we try to get the landlords as much as we can, but we have had to come down $50 in most cases from the asking price.

How long are Manhattan rental apartments staying on the market? I am seeing the apartments on the market a little longer, but historically speaking, we are going to see a dip in the market right after the holidays, all the way through to the middle or end of February. Which Manhattan neighborhoods have held up the strongest since the softening began? The West Village, Tribeca and Chelsea have kept their pricing. What are you seeing in terms of renters opting out of Manhattan because it’s become too pricey and renting in Brooklyn and Queens instead? What I see the most is people moving from Midtown West to the Hudson Heights and Washington Heights area. They are blown away by the amount of space they can get. The psychology is that it is still in Manhattan. Which price ranges in Manhattan are seeing the most softening now? I think it would be right around $1,900 to $2,200. The apartments are sitting a little longer than we would like and usually we have to adjust downward. How are landlords, particularly those who have new development buildings that they are still looking to lease up, reacting to the changes in the rental market? At one point, they were no longer paying commissions. Recently, I have seen that come back with some of the buildings informing us that they are paying brokers commissions until a certain date. I haven’t seen any other concessions like free rent. What are the most surprising trends you’re seeing in the Manhattan and New York City rental market today? My past customers are asking what it would take to buy a home. They’re asking me what it would cost for them to own an apartment that’s similar to the rental that they are living in now. What sorts of trends are you expecting to see in the rental market in the coming months? I think we are going to start seeing a bit more of people wanting a better deal. I think they will become a bit more aggressive in their offers if they find a comparable [rental] two blocks away. What are the biggest challenges to renting apartments in the current market? For some people it is just qualifying. For the landlords I represent, I have to make sure I am bringing a qualified tenant, and more often than usual there have been clients whose credit has taken a hit. That’s my least favorite part of the job. TRD www.TheRealDeal.com January 2013 79

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

name the buyer or seller, but the New Castle tax-assessment roll lists the previous owner as James Rubin of Carmel. “We are incredibly excited,” Houlihan Lawrence cord set in 2003, when billionaire senior vice president Anthony George Soros paid $19 million to Cutugno told the Journal News. buy a house in Katonah from au- “Obviously in this price range, there aren’t that many transactions.” He noted that the influx of foreign buyers into New York City is starting to spill into the northern suburbs. Devon“The Devonshire” estate shire’s eight-bedroom thor Michael Crichton. Houlihan Georgian manor has some 21,000 Lawrence, which handled both square feet of interior space, the sides of the transaction, would not Bedford Daily Voice reported. The

property also has equestrian stables and buildings for staff and guests.

TRI-STATE BRIEFS WESTCHESTER

Devonshire sets new price record A 101-acre compound in New Castle sold for $21.5 million in late December, becoming the most expensive sale ever recorded in Westchester County, the Journal News reported. Known as “the Devonshire,” the estate was acquired by an undisclosed international buyer. Listed at $26.5 million, it had been on the market since 2007. The deal topped the re-

LONG ISLAND

LI sales down 56 percent from 2005 Home sales activity on Long Island has plummeted 56 percent in the past eight years, while the number of foreclosures has doubled, according to a Newsday analysis. The number of home sales fell from nearly 49,000 in 2005 to 21,487 in the first 11 months of 2012, the paper reported. Sales volume has declined every year since 2005, despite a brief uptick in 2010. Long Island reported 13,132 foreclo-

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CONNECTICUT

Glimmers of hope for Connecticut market The pace of falling Connecticut home prices has slowed, the Hartford Courant reported. Hartford County asking prices in 2012 fell 1.6 percent from 2011, according to the real estate website Trulia.com, but that’s an improvement from 2011’s 3.4 percent drop from the prior year. Similarly, New Haven County asking prices in 2012 fell 2.2 percent from the previous year, in contrast to a 5.5 percent yearon-year decline between 2011 and 2010. The year-over-year slide in Fairfield County was 1.6 percent in 2012, compared with 3.6 percent in 2011. Still, Connecticut is lagging behind improvements in the rest of the nation; according to Trulia, national asking prices rose 5.1 percent in 2012 compared to the previous year. The number of sales of single-family houses in the Greater Hartford area, meanwhile, posted double-digit gains in 2012, but the average sale price is still de-

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clining. In 2012, there were 8,711 closed sales in the Hartford area, up nearly 21 percent from 7,255 in the previous year, according to data from the Greater Hartford Association of Realtors. But the median sale price for the area was $218,000 in 2012, down 1.6 percent from $221,500 in 2011. “Although the closed sales numbers are encouraging, I will feel even better about the housing market recovery when prices stabilize or increase,” Jeff Arakelian, the association’s president and CEO, told the Courant. Compiled by Andrea Cetra

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

NATIONAL MARKET REPORT

Psy

Los Angeles South Korean mu-

sician Psy, of “Gangnam Style” fame, closed on a Westwood condo for $1.2 million, the Los Angeles Times reported. The two-bedroom is located in Blair House, a high-rise development in the Wilshire Corridor neighborhood of Los Angeles and has a saltwater swimming pool and a tennis court. Jane Siegal and Holly Davis of Coldwell Banker had the listing.

A rendering of an apartment listed for $55 million in Miami

Miami A penthouse at the Trump Group’s under-construction Mansions at Acqualina development hit the market last month for $55 million, becoming one of the most expensive condos for sale in the U.S. and the most expensive condo on the market in Miami, the Miami Herald reported. Michael Goldstein of Acqualina Realty has the listing for the so-called Palazzo D’Oro, a 15,000-square-foot duplex with six bedrooms and eight bathrooms. The unit, furnished by Fendi Casa, has a pool overlooking the ocean, stadium-style movie theater, 25-foot waterfall, wine cellar and 5,000-square-foot outdoor terrace. According to the listings website Movoto, Miami’s median condo asking price was $275,900 last month. That’s up 35 percent from the same time in 2012. The city has an inventory of 2,820 condos, an 18 percent drop from the same month of last year.

Minneapolis The Twin Cities’ suburban office market is still struggling in the wake of the recession, the Star Tribune reported last month. The vacancy rate in the Southwest Metro suburban office market only improved marginally in 2012, falling to 17.2 percent from 17.7 percent in 2011, according to figures from Cushman & Wakefield/NorthMarq. Several large chunks of office space remain available, such as the former offices of Delta Air Lines and Blue Cross Blue Shield in Eagan, Alliant Techsystems in Eden Prairie and State Farm Insurance in Woodbury. Best Buy is planning to sublease about 200,000 square feet of its corporate campus in Richfield, and Supervalu plans to vacate more than 150,000 square feet of its office space in Chanhassen this year. The former Lockheed Martin office complex in Eagan, meanwhile, is now slated to become a lifestyle shopping center. But commercial brokers said there are signs the office market is beginning to improve. “You’re starting to see companies renewing [leases] for lon78 February 2013 www.TheRealDeal.com

ger terms like five years,” said Mark Stevens, an associate vice president at Cassidy Turley. “For the past three years, people were asking for one-year, even six-month renewals because they were so uncertain about the future.”

Malibu Billionaire investment manager Howard Marks sold his 9.5acre Malibu estate to a Russian couple for roughly $75 million, the Wall Street Journal reported last month. The deal is the most expensive sale on record in Malibu and is among the highest price ever paid in the U.S. for a single-family house. The eight-bedroom home, which had been quietly shopped for around $125 million but was never officially listed, is one of the largest pieces of oceanfront property in Malibu. In addition to the 15,000-square-foot main house, the property contains two guesthouses, a gym and a swimming pool. Marks, chairman of Los Angeles–based Oaktree Capital Management, and his wife Nancy completed a renovation of the property in 2008 with Michael Smith, the designer who redid the White House Oval Office a few years ago. Fred Bernstein of Westside Estate Agency represented the sellers, who bought the home in 2002 for $31 million.

Carrie Underwood’s former home in Franklin, Tenn.

Nashville Country music star

Carrie Underwood sold her modest home in the Nashville suburb of Franklin for $372,500, ABC News reported. The “American Idol” winner purchased the 2,956-square-foot custom home for $384,000 in 2005, according to CMT News. But Underwood and her husband, Mike Fisher, bought a 400-acre plot of land in Nashville in 2011 for $3.2 million, where they reportedly plan to build their dream home.

Iowa Along with a group of investors, Baseball Hall-of-Famer Wade Boggs has purchased the Iowa baseball field and farmhouse immortalized in the movie “Field of Dreams,” the New York Daily News reported. The group, dubbed Go the Distance Baseball LLC, paid $3.4 million to buy the famous 193acre farm from the family that had owned it. The original listing price for the Dyersville property two years ago was $5.4 million. The new owners plan to construct a youth baseball and softball complex on the site while preserving the farmhouse and other parts of the property featured in the movie. Construction is slated to begin later this year.

The house Rihanna purchased for $12M

Pacific Palisade Singer Ri-

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ON THE MARKET UES conversion opportunity asking $40M A 25-foot-wide, 11,000-squarefoot Upper East Side building is on the market for $40 million, and is offering the possibility of a single-family conversion. Massey Knakal Realty Services is exclusively marketing the five-story building, located at 18 East 64th Street between Madison and Fifth avenues. The property currently consists of office and residential space with ceiling heights ranging 18 East 64th Street from eight to 13 feet. “As far as where a billionaire would want to live, this is second to none,” Massey Knakal’s Guthrie Garvin, who has the listing, recently told the New York Observer. “This is one of the most desirable townhouse blocks in the city.”

Citi Field–area development site on the market A development site with “extremely permissive zoning” has hit the market in the Willets Point area of Queens, listing broker David Schechtman of Eastern Consolidated told The Real Deal last month. The 112-21 Northern Boulevard site — which has about 350,000 buildable square feet and is just down the road from the Mets baseball stadium, Citi Field — is asking $21 million. A hotel, residential or retail development could be built on the 73,000-squarefoot parcel, which is currently triple-net leased to Di Blasi

Commercial properties recently placed on the market

Ford, a car dealership. The lot can be delivered vacant in November or leased back to the current owner while future development plans are sorted out.

Plaza District mixed-use building on the block A six-story commercial and residential property at 113 East 60th Street is on the market with an asking price of $13.5 million. The first two floors of the 10,460-square-foot elevator building consist of a duplex commercial space with additional finished basement space approved for commercial use. A two-bedroom, three-bathroom residential duplex apartment 113 East 60th Street occupies the third and fourth floors, while a three-bedroom, three-bathroom duplex with a private roof deck occupies the fifth and sixth floors. The property is currently zoned for mixed use, but may be restored to full residential use. Ryan Sherman of Upper East Side–based Metropolitan Commercial is handling the sale.

Crown Heights multi-family building for sale A 28,724-square-foot apartment building at 285-291 Eastern Parkway in the Crown Heights section of Brooklyn is for sale with an asking price of $12.69 million. The property, located between Franklin and Classon avenues

285-291 Eastern Parkway in Brooklyn

a few blocks from Prospect Park and the Brooklyn Botanic Garden, consists of 33 apartments, 24 of which are free-market units. The building has about 19,000 square feet of available air rights for a potential future conversion into condos. TerraCRG is marketing the building.

Bronx Rite Aid building on the market A 12,368-square-foot retail building occupied by a Rite Aid drugstore at 925 Soundview Avenue in the Bronx is on the market with an asking price of $6.67 million. The tenant has a leasehold ground lease on the property that runs through 2027, with two five-year options to renew. The property, built in 2006, is located at the corner of Story Avenue in the borough’s Soundview neighborhood. A sale at the asking price would represent a capitalization rate of 8 percent and a price-per-square-foot of $539. Marcus & Millichap is marketing the property. Compiled by Linden Lim

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Deal Sheet summary

The Deal Sheet, on pages 84 to 94, covers transactions from 12/11/12 through 1/10/13. Please submit future deals to deals@therealdeal.com.

Sales

Overview

By type

Property sales

Development

Deals Dollars

Hotel

28.30

Industrial

69.00

Mixed-Use

232.60

Multi-family

943.00

Office

1006.98

Retail

630.79

Financing Aggregate value

438.78

Industrial

$3,349,450,000

Buildings

Development

Hotel

106

Transactions

By dollar volume (in millions)

$471,850,000

Leases Office

Retail

Total

Leases square feet Office

1,058,037

Retail

245,411

Total

1,303,448

Office leases Office leases by industry Industry

Office leases sf by industry Leases

Industry

Advertising & Marketing

Architecture & Design

Consulting

Education Entertainment

Top tenant reps for office leasing by sf

Square feet leased

Tenant representative

Square feet leased

8,250

Jones Lang LaSalle

238,270

Architecture & Design

1,700

CBRE Group

197,000

Consulting

4,947

Studley

110,237

Education

17,670

Jud Leasing Corp.

72,500

Entertainment

7,200

Newmark Grubb Knight Frank

66,000

Fashion*

6,306

Colliers International

37,153

Financial

52,200

Adams & Co.

18,507

Home Furnishings

45,165

Walter & Samuels

14,374

Legal

290,736

Manhattan Commercial Realty

13,360

Media

40,000

Medical

Other

22,698

Locations Commercial Real Estate

8,950

Real Estate

32,378

Right Time Realty

6,400

Retail

197,000

Cast Iron Realty

5,881

Science & Technology

313,425

NY Citi Group Realty

5,200

Savitt Partners

5,000

Retail Science & Technology

Textiles

8,800

Textiles

9,562

Norman Bobrow & Co. UGL Services

12,715 10,000

Retail leases Top tenant reps for leasing by sf

Retail leases by industry

Broker

Automobiles

25,000

91,000

Discount

20,000

Ripco Real Estate

34,452

Fashion

18,500

Lee & Associates

25,000

Food & Beverage

124,175

NAI Friedland Realty

20,542

Other

40,184

Douglas Elliman

15,000

Sporting Goods

17,552

CBRE Group

Square feet leased

NYCRS

8,800

Cushman & Wakefield

4,212

Haber Realty

3,400

Square Foot Realty

2,430

Lansco Corp.

1,500

KGW Associates

1,075

ABS Partners

850

Adams & Co.

550

(*includes showroom space)

Retail leases sf by industry

www.www.TheRealDeal.com February 2013 83

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 12/11/12 to 1/10/13. Please submit future deals to deals@therealdeal.com.

Office leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

11 Times Square

230,000

Microsoft / Lisa Kiell, Jones Lang LaSalle

SJP Properties; Prudential Real Estate Investors / M. Konsker, P. Glickman, D. Biasotti, Jones Lang LaSalle

The tech giant signed a long-term lease. The building is now more than 70 percent leased. Other tenants at the building include law firm Proskauer Rose, which occupies more than 400,000 square feet, and Global Food International Corporation, which has a long-term lease on 25,000 square feet of the tower’s retail space.

250 West 55th St

217,028

Kaye Scholer / n/a

Boston Properties / P. Turchin, J. Power, C. Harle, CBRE

The law firm signed a 21-year lease for the third through 12th floors, the New York Post reported. The tenant has an option to renew for two additional 10year terms.

1440 Broadway

197,000

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

Monday Properties / Represented inhouse

The department store signed a lease renewal and expanded, giving it occupancy of the sixth through 10th and 13th floors of the office building, the New York Observer reported. The 11-year expansion lease gives the tenant an additional 31,700 square feet of space, while the renewal is for 165,300 square feet and also runs for 11 years.

32-00 Skillman Ave (Queens)

45,165

Prop N Spoon / Jarod Stern, Studley

Stellar Management / Lawrence Smith, Sholom & Zuckerbrot

The props and furniture supplier for TV and movies signed a lease, the New York Post reported.

1271 Sixth Ave

40,000

Sandow / D. Falk, J. Greenstein, Newmark Grubb Knight Frank

Rockefeller Group / n/a

The multiplatform media company signed a lease at the Time-Life Building.

125 Broad St

35,681

Holwell Shuster & Goldberg / L. Lemle, N. Zarnin, Studley

Sedgwick LLP / Greg Taubin, Studley

The law firm signed a sublease.

229 West 43rd St

29,391

10gen / G. Taubin, G. Marans, Studley

Blackstone Group affiliates / Represented in-house

The technology firm signed a lease.

152 West 57th St

25,312

Grubman, Indursky, Shire & Meiselas P.C. / T. Rotante, M. Cohen, Colliers International

TF Cornerstone / Matthew Leon, Newmark Grubb Knight Frank

The entertainment law firm signed a five-year lease renewal on the 30th through 32nd floors of the building, known as Carnegie Hall Tower.

450/460 Park Ave South

22,400

Merchant Cash and Capital / Ira Rovitz, Newmark Grubb Knight Frank

The Moinian Group / Represented in-house

The small business loan provider signed a long-term lease to expand in the building. The tenant is now the property’s second largest tenant.

1412 Broadway

14,374

Grind LLC / Gregory Postyn, Walter & Samuels

1412 Broadway HG Associates LP / n/a

The workspace provider signed a lease for the entire 22nd floor.

One Grand Central Pl

12,715

Davidson, Dawson & Clark LLP / Norman Bobrow, Norman Bobrow & Co.

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

The law firm signed a lease renewal.

One Grand Central Pl

11,841

ServiceNow / J. Abarta, B. Given, S. Gohil, Colliers International

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

The technology firm signed an expansion lease.

40 Wall St

10,000

PiYi Investment Limited / Chase MacLeod, UGL Services

n/a / n/a

The financial services company signed a 10-year, five-month lease for the entire 52nd floor. Gary Goodman and Andrew Weiner of SNR Denton provided legal counsel to the tenant.

450/460 Park Ave South

8,270

Fusion Learning Inc. / D. van der Hayden, N. Savage, Jones Lang LaSalle

The Moinian Group / Represented in-house

The tutoring facility signed a long-term lease.

415 Madison Ave

8,012

HBE Solutions LLC / A. Novoa, A. Arvay, Murray Hill Properties

n/a / n/a

The software company signed a five-year lease for part of the 13th floor.

142 West 36th St

7,500

Keff NYC / Guya Rai, Manhattan Commercial Realty

36 Equities Inc. / Alan Sinovsky, Sinovsky Realty Services

The textile firm signed a 10-year lease for a full floor. The reported asking rent was $32 per square foot.

3044 Coney Island Ave (Brooklyn)

7,500

Renaissance Adult Day Services / Nick Zweig, Locations Commercial Real Estate

n/a / Nick Zweig, Locations Commercial Real Estate

The community center signed a lease to relocate its offices.

40 Exchange Pl

7,200

Terramor Inc. / Charles Beyda, Jud Leasing Corp.

40 Exchange Corp. / Charles Beyda, Jud Leasing Corp.

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

40 Exchange Pl

7,200

Evan Jaffee, Ellman Realty / Charles Beyda, Jud Leasing Corp.

40 Exchange Corp. / Charles Beyda, Jud Leasing Corp.

The film, TV and commercial music licensing company signed a long-term lease. The reported asking rent was $36 per square foot.

40 Exchange Pl

7,200

TRS Inc. Professional Suites / Joey Friedman, Adams & Co.

40 Exchange Corp. / Charles Beyda, Jud Leasing Corp.

The office suites company signed a long-term lease.

81 Apollo St (Brooklyn)

6,400

Copart USA / R. Tinio, J. Ibrahim, Right Time Realty

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

The automobile Internet sales company signed a lease on the fourth floor for its first New York City call center.

315 Hudson St

5,881

TED Conferences / Kim Skarvelis, Cast Iron Realty

Jack Resnick & Sons / Represented in-house

The Internet video and conference company signed a lease for another office, which will be located across the street from an existing office, the New York Observer reported.

15 West 39th St

5,860

SLC Conference Centers & Ivy Real Estate Education Centers / Robert Bielsky, Manhattan Commercial Realty

n/a / Phillip Silverstein, NAI Global Realty

The conference and education center operator signed a 10-year office lease. The reported asking rent was $34 per square foot.

40 Exchange Pl

5,200

Infinite Solutions Training Corp. / Charles Beyda, Jud Leasing Corp.

40 Exchange Corp. / Charles Beyda, Jud Leasing Corp.

The computer training services company signed a 10-year lease. The reported asking rent was $36 per square foot.

40 Exchange Pl

5,200

Red Ten NYC / Charles Beyda, Jud Leasing Corp.

40 Exchange Corp. / Charles Beyda, Jud Leasing Corp.

The marketing firm signed a long-term lease. The reported asking rent was $36 per square foot.

40 Exchange Pl

5,200

S.I.T.C. Corp. / Charles Beyda, Jud Leasing Corp.

40 Exchange Corp. / Charles Beyda, Jud Leasing Corp.

The financial company signed a long-term lease. The reported asking rent was $32 per square foot.

40 Exchange Pl

5,200

Horizon Business Funding Group LLC / Charles Beyda, Jud Leasing Corp.

40 Exchange Corp. / Charles Beyda, Jud Leasing Corp.

The business funding group signed a long-term lease. The reported asking rent was $36 per square foot.

40 Exchange Pl

5,200

Revenue Cycle Associates Inc. / John Kourtis, NY Citi Group Realty

40 Exchange Corp. / Charles Beyda, Jud Leasing Corp.

The medical billing company signed a new lease. The reported asking rent was $36 per square foot.

40 Exchange Pl

5,200

College Summit / Charles Beyda, Jud Leasing Corp.

40 Exchange Corp. / Charles Beyda, Jud Leasing Corp.

The educational guidance company signed a long-term lease. The reported asking rent was $32 per square foot.

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Office leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

40 Exchange Pl

5,200

ECM Acquisitions / Charles Beyda, Jud Leasing Corp.

40 Exchange Corp. / Charles Beyda, Jud Leasing Corp.

The business brokerage company signed a long-term lease. The reported asking rent was $36 per square foot.

260 West 39th St

5,000

SUNO / Marc Schoen, Michael Schoen, Savitt Partners

n/a / Michael Orbach, Orbach & Associates

The fashion label signed a lease, the New York Post reported. The tenant is relocating from a smaller, 3,000-square-foot space at 242 West 38th Street. The asking rent for the companyâ&#x20AC;&#x2122;s new space was $35 per square foot, according to the Post.

22 Little West 12th St

4,700

The College Bound Network / John Oliveri, STL Realty

The Infinity Group / Represented inhouse

The education Internet company signed a lease for the entire third floor, the New York Post reported.

40 Exchange Pl

4,500

Northstar Consulting Corp. / Charles Beyda, Jud Leasing Corp.

40 Exchange Corp. / Charles Beyda, Jud Leasing Corp.

The business consulting firm signed a long-term lease. The reported asking rent was $36 per square foot.

40 Exchange Pl

4,200

Factor Plus Inc. / Charles Beyda, Jud Leasing Corp.

40 Exchange Corp. / Charles Beyda, Jud Leasing Corp.

The business factoring company signed a long-term lease. The reported asking rent was $36 per square foot.

40 Exchange Pl

4,200

I-Mentor Inc. / Charles Beyda, Jud Leasing Corp.

40 Exchange Corp. / Charles Beyda, Jud Leasing Corp.

The educational company signed a long-term lease. The reported asking rent was $32 per square foot.

40 Exchange Pl

4,200

Tele-automation Corp. / Charles Beyda, Jud Leasing Corp.

40 Exchange Corp. / Charles Beyda, Jud Leasing Corp.

The office computer planning company signed a new lease. The reported asking rent was $36 per square foot.

40 Exchange Pl

3,600

Siren Management Inc. / Charles Beyda, Jud Leasing Corp.

40 Exchange Corp. / Charles Beyda, Jud Leasing Corp.

The real estate company signed a long-term lease. The reported asking rent was $36 per square foot.

40 Exchange Pl

3,600

Integra Partners Inc. / Newmark Grubb Knight Frank

40 Exchange Corp. / Charles Beyda, Jud Leasing Corp.

The network manager for the medical industry signed a lease. The reported asking rent was $36 per square foot.

40 Exchange Pl

3,600

Communications Outsourcing Inc. / Charles Beyda, Jud Leasing Corp.

40 Exchange Corp. / Charles Beyda, Jud Leasing Corp.

The business communications company signed a long-term lease. The reported asking rent was $36 per square foot.

902 Broadway

3,200

Tri Play Inc. / Michael Hymowitz, Adams & Co.

H3 Hardy Collaboration Architecture LLC / Tyler McNeil, C&W

The multimedia sharing platform company signed a new three-year lease. The reported asking rent was $40 per square foot.

317 Madison Ave

3,050

BoxTop Media / L. Biller, I. Norris, Kaufman Organization

SL Green / Represented in-house

The advertising firm signed a five-year lease renewal. The reported asking rent was $45 per square foot.

40 Exchange Pl

2,600

Genius Computer Solutions Inc. / Charles Beyda, Jud Leasing Corp.

40 Exchange Corp. / Charles Beyda, Jud Leasing Corp.

The computer technology company signed a long-term lease. The reported asking rent was $36 per square foot.

636 Broadway

2,000

AdMobius Inc. / J. Genicoff, P. Kane, Real Estate Investors Group

Victor Trager LLC / n/a

The technology company signed a lease for its flagship New York office. The reported asking rent was $48 per square foot.

1407 Broadway

2,000

WTL America Inc. / Michael Hymowitz, Adams & Co.

1407 Broadway Real Estate LLC / Y. Chong, J. Kosaric, Kaufman Organization

The tenant signed a new three-year lease. The reported asking rent was $45 per square foot.

503 Fifth Ave (Brooklyn)

1,450

Services for the Underserved Renaissance / Nick Zweig, Locations Commercial Real Estate

n/a / Nick Zweig, Locations Commercial Real Estate

The nonprofit signed a lease to relocate one of its offices.

10 West 33rd St

1,344

Bon-Bini LLC / David Levy, Adams & Co.

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

The property management firm signed a new three-year lease. The reported asking rent was $42 per square foot.

463 Seventh Ave

1,306

Regal Wear Inc. / David Levy, Adams & Co.

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

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

110 West 40th St

1,070

Winnitex America Inc. / D. Levy, B. Maslin, Adams & Co.

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

The textile company signed a two-year lease renewal. The reported asking rent was $42 per square foot.

110 West 40th St

992

Black Cloth LLC / D. Levy, B. Maslin, Adams & Co.

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

The textile company signed a three-year lease renewal. The reported asking rent was $48 per square foot.

110 West 40th St

948

Coyle Contracting Corp. / D. Levy, B. Maslin, Adams & Co.

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

The construction firm signed a three-year lease renewal. The reported asking rent was $42 per square foot.

34 West 35th St

900

White Camel Inc. / Rebekah Metz, Metropolitan Residential Partners

Orencel S.A. / O. Ousmanova, A. Gavios, Square Foot Realty

The graphic design company signed an eight-year lease. The reported asking rent was $36 per square foot.

11 Park Pl

800

SWA Architecture / J. Famularo, R. Idnani, NYCRS

n/a / Michael Berger, Colliers International

The architecture firm signed a lease.

110 West 40th St

447

Pyramid Consulting Group / D. Levy, B. Maslin, Adams & Co.

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

The consulting firm signed a new seven-year lease. The reported asking rent was $42 per square foot.

Retail leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

501 Gateway Dr (Brooklyn)

90,000

ShopRite / G. Goldstein, Related Retail; A. Arancio, Wakefern Food Corp.; J. Hanlon, CBRE

Related Companies / Ripco Real Estate

The supermarket chain signed a lease for a location at the Gateway Center retail development slated to open in 2014.

619 West 54th St

25,000

Maserati of Manhattan / Lee & Associates

Grainger / CBRE

The luxury car dealership signed a sublease for showroom space in the 326,000-square-foot commercial building. The property is owned by Taconic Investment Partners.

3524 Third Ave (The Bronx)

16,000

Abdel Awawdeh / R. Stassa, S. Lorenzo, NAI Friedland Realty

Park Avenue Holding Corporation / R. Stassa, S. Lorenzo, NAI Friedland Realty

The tenant signed a retail lease.

520 Broadway

15,000

Michael Kors / G. Dana, A. Kramer, Douglas Elliman

Tahl Propp Equities / Represented inhouse

The fashion house signed a lease for a new flagship store.

420 Fifth Ave

14,452

Golfsmith / P. Ripka, A. Mandell, R. Skulnik, Ripco Real Estate

Heritage Realty Services / George Constantin, Heritage Realty Services

The golf club, apparel and accessories chain signed a 12-and-a-half-year lease. The space consists of 2,000 square feet on the ground floor and 12,000 square feet on the second floor. The reported asking rent for the ground-floor space was $280 per square foot, while the second floor asked $100 per square foot.

155 Bay St (Staten Island)

10,000

Fine Fare Marketplace / n/a

Meadow Partners / n/a

The supermarket signed a lease to occupy the retail space at new luxury condo building the Pointe.

301 West 145th St

10,000

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

Langston Retail LLC / R. Smith, T. Jung, Winick Realty

The discount chain signed a seven-year lease for a second-floor, corner location.

206 Spring St

10,000

n/a / n/a

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

A restaurant signed a lease for space that was previously occupied by Italian eatery Fiama.

280 Saint Nicholas Ave

10,000

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

HUSA Management Co. LLC / B. Cohen, J. Pennington, Ripco Real Estate

The discount chain signed a 10-year lease for a lower-level location.

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Retail leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

20 Pine St

8,300

n/a / n/a

n/a / D. Gelin, M. Tabibnia, Azad Property Group

A boxing and jujitsu school signed a 10-year retail lease.

16 West 36th St

6,000

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

n/a / D. Levy, N. Zagar, Adams & Co.

A restaurant group signed a 10-year lease.

21 East 1st St

4,212

TD Bank / Joanne Podell, C&W

BFC Partners / John Oliveri, STL Realty

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

110 West End Ave

3,100

Toga Bike Shop / n/a

n/a / David Chkheidze, Massey Knakal

The bicycle shop signed a lease renewal.

214 Sullivan St

2,000

n/a / n/a

n/a / Brendan Gotch, Massey Knakal

A dermatology office leased retail space.

43 West 33rd St

2,000

Djenero’s / Steven Haber, Haber Realty

n/a / Steven Haber, Haber Realty

The clothing chain signed a 10-year lease for another location.

417 Riverdale Ave (The Bronx)

1,850

Oaks Pharmacy / Lou Klein, NAI Friedland Realty

SRB Properties / Lou Klein, NAI Friedland Realty

The drugstore signed a lease.

776 Nostrand Ave (Brooklyn)

1,700

n/a / n/a

n/a / Andrew Clemens, Massey Knakal

The furniture retailer signed a lease.

2510 Westchester Ave (The Bronx)

1,592

EMET Royal Pharmacy Inc. / Steve Lorenzo, NAI Friedland Realty

Hutch Management LLC / Steve Lorenzo, NAI Friedland Realty

The drugstore signed a lease.

27 Prince St

1,500

Han Kjøbenhavn / Aimee Claps, Lansco Corp.

n/a / James Famularo, NYCRS

The Danish accessories retailer signed a 15-year lease.

333 Lenox Ave

1,500

Lenox Lounge / n/a

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

The jazz club signed a lease.

443 East 78th St

1,200

B. Wellness Center / J. Famularo, R. Idnani, NYCRS

Icon Realty / n/a

The wellness center signed a five-year lease.

110 First Ave

1,100

Bonada / I. Donath, H. Demetrious, NYCRS

New Street Realty / n/a

The sushi restaurant signed a 15-year lease.

852 Eighth Ave

1,100

Gotham Pizza / Olga Ousmanova, Square Foot Realty

852 Eighth LLC / Olga Ousmanova, Square Foot Realty

The pizza chain signed a 15-year lease for another location. The reported asking rent was $273 per square foot.

839 Prospect Ave (The Bronx)

1,100

Dunkin’ Donuts / R. Herko, D. Scotto, NAI Friedland Realty

Franciacorta Properties LLC / R. Herko, D. Scotto, NAI Friedland Realty

The coffee and donuts chain signed a lease for another location.

132-134 East 125th St

1,075

Lexington Pizza & Hot Dog / H. Weiss, F. Klein, KGW Associates

Lexington 125 LLC / WRA Properties 1 Inc.

The eatery signed a 15-year lease.

464 Ninth Ave

1,000

Pie Face / Robert Bonicoro, CBRE

Noam Corp. / Julia Maksimova, Square Foot Realty

The Australian meat pie restaurant signed a 10-year lease. The reported asking rent was $120 per square foot.

450 Ninth Ave

1,000

Albano Salon LLC / Julia Maksimova, Square Foot Realty

Noam Management / A. Gavios, H. Aaron, Square Foot Realty

The beauty salon signed a 10-year lease. The reported asking rent was $120 per square foot.

530 Second Ave

850

Vanguard Wine Bar / D. Valentino, J. Einbender, M. Tergesen, ABS Partners

n/a / A. La Centra, J. Siegelman, Winick Realty

The wine bar signed a 12-year lease.

88 Reade St

700

Nish Nosh / Steven Haber, Haber Realty

n/a / Steven Haber, Haber Realty

The salad eatery signed a lease.

14 John St

700

Go Go Curry / Steven Haber, Haber Realty

n/a / Steven Haber, Haber Realty

The curry restaurant signed a lease.

106 University Pl

550

Bamboo Tori / Michael Hymowitz, Adams & Co.

Garage Management Corp. / Ina Donath, NYCRS

The Japanese restaurant signed a new seven-year lease. The reported asking rent was $350 per square foot.

1392 Madison Ave

500

Jewelers on Madison / Ravi Idnani, NYCRS

Sassouni Management / James Famularo, NYCRS

The jewelry store signed a 10-year lease.

500 West 42nd St

330

Palace Valet / Olga Ousmanova, Square Foot Realty

Clinton Housing Development Company / A. Gavios, H. Aaron, Square Foot Realty

The dry cleaner signed a 10-year lease. The reported asking rent was $120 per square foot.

Buys Address

Size

Buyer / Representative

Seller / Representative

Notes

1440 Broadway

740,000 sf office bldg

Rockpoint / n/a

Prudential Real Estate / D. Harmon, A. Spies, Eastdil Secured

An 80 percent stake in the building sold for $282.4 million. The transaction recapitalizes the 25-story Times Square South tower at around $350 million, the New York Post first reported. The remaining stake in the 740,000-square, foot tower is owned by Monday Properties, which also manages and leases the building.

680 Madison Ave

35,000 sf retail space

Joseph Sitt / n/a

Extell Development; Angelo, Gordon & Co. / n/a

The corner retail space sold for $277 million, the Wall Street Journal reported. Vornado Realty Trust had offered to pay $280 million for the space, but negotiations fell apart, allowing Joseph Sitt to step in and purchase the property, according to the paper.

1466 Broadway

40,000 sf retail condo

Invesco / n/a

Crown Acquistions; Highgate Holdings / A. Spies, D. Harmon, Eastdil Secured

The majority stake in the retail condo sold for $195.8 million. Crown Acquisitions and Highgate Holdings will continue to hold minority stakes in the property, with Crown continuing to operate a part of the retail space.

Manhattan and Bronx portfolio

10 apt. bldgs

The Parkoff Organization / Aaron Jungreis, Rosewood Realty

Dermot Property Associates / S. Kohn, H. Hwang, M. Ehlinger, N. Rockett, K. Wiedenmann, S. Sarkar, S. Vankayala, C&W

The package of five Manhattan and five Bronx buildings sold for $158 million, the New York Observer reported. The Manhattan properties are located at 201 and 207 West 11th Street, 229 East 12th Street and 71 and 81 Orchard Street. The Bronx properties are located at 2131 and 2132 Wallace Avenue and 2146, 2162 and 2182 Barnes Avenue.

344 West 72nd St

139-unit apt. bldg

HFZ Capital Group; BSG Real Estate Ltd. / n/a

Family of Lenore Dean / n/a

The Chatsworth sold for $150 million, the Wall Street Journal reported. About half of the apartments are rent stabilized, according to the paper.

16 Richman Plaza (The Bronx)

Apt. complex, 1,654 units total

Omni New York / n/a

Harlem River Park Houses; River Park Associates; Empire State Development Corporation affiliates / n/a

The residential complex in the Morris Heights section of the Bronx sold for $137 million. The apartments are comprised of below-market-rate rentals.

551 Madison Ave

17-story office bldg

n/a / Cornerstone Real Estate Advisors

LaSalle Investment Management / D. Stacom, B. Shanahan, P. Gillen, CBRE

The boutique office property sold for about $125 million, the New York Post reported.

245 and 249 West 17th St

2 office bldgs

Savanna Partners / Brian Ezratty, Eastern Consolidated

Atlas Capital / Brian Ezratty, Eastern Consolidated

The properties sold for $120 million.

104 West 40th St

210,000 sf office bldg

Princeton International Properties / n/a

Savanna / A. Spies, K. Donner, Eastdil SEcured

The property sold for about $100 million, the New York Observer reported. Rents in the building run from the low $50s to the $70s per square foot.

88 February 2013 www.TheRealDeal.com

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Buys continued Address

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321 West 44th St

228,268 sf office bldg

East End Capital; GreenOak Real Estate / n/a

Jared Kushner / Darcy Stacom, CBRE

The property sold for $95 million, the New York Post reported. The New York Observer occupies the building’s sixth floor.

8 Spruce St

100,000 sf school

New York City School Construction Authority / n/a

FC Beekman Associates LLC / n/a

The first five stories of New York by Gehry sold for $76.4 million. The space will continue to house the PS 397 Spruce Street School.

21 West End Ave

Development site

The Dermot Cos.; AFL-CIO Building Investment Trust / n/a

Extell Development; Carlyle Group / Andrew Scandalios, HFF

The Building 2 site at the Riverside Center mixed-use development sold for $70 million, the New York Post reported. The $420 million development calls for apartments, retail and a grade school, which will be built by Tishman Construction and then turned over to the School Construction Authority, which will finish the interior, the Post said.

953-961 First Ave

Development site

Toll Brothers / n/a

Alexico Group / C&W

The stalled development site sold for $64 million. The buyer plans to develop the site as a condominium. The project was previously designed as a rental building by Alexico Group.

311 West 43rd St

185,000 sf office bldg

Atlas Capital Group / n/a

Zuberry Associates / Brian Ezratty, Eastern Consolidated

The property sold for $62.4 million. The building’s retail space is leased to upscale Chinese restaurant Hakkasan.

1511 Third Ave

4-story retail bldg

TIAA-CREF / n/a

Related Companies / B. Knakal, T. Gammino, Massey Knakal

The property sold for $60 million. The building is fully leased to two retail tenants: the Gap on the ground floor and basement and Equinox on the upper three floors. The New York Observer reported that the buyer was TIAA-CREF and that the seller was the Related Companies.

78-86 King St

200,000 buildable sf development site

Toll Brothers / HPNY

n/a / HPNY

The single-story, block-through parking garage sold for $56.5 million.

13-17 Laight St

6-story, 80,000 sf mixed-use bldg

Whitestar Advisors / R. Ortiz, A. Miller, Eastern Consolidated

Mazda Realty Associates / R. Ortiz, Eastern Consolidated; A. Grumet, DY Realty Services

The building known as the headquarters of the Tribeca Film Festival sold for $56 million. The buyer hopes to expand and repurpose the property as luxury condos, sources told The Real Deal. The elevator building has three retail tenants on the ground floor, one of which is Tribeca Cinemas, and 22 mixeduse tenants above. Nine of the upper-floor units are residential, with one rentstabilized tenant among them.

27-35 West 24th St

11-story, 115,000 sf office bldg

Kaufman Organization / n/a

n/a / T. Gammino, J. Ciraulo, Massey Knakal

The property sold for $55 million, Crain’s reported.

215 Chrystie St

Development site

Ian Schrager; Steve Witkoff / n/a

Ruby Schron / n/a

The property sold for about $50 million, the Wall Street Journal reported. The buyers plan to build a 25-story hotel and apartment building on the site, according to the paper.

546 West 44th St

Development site

Crimson Real Estate Fund; USAA Real Estate Co. / n/a

Pasha Group LLC / n/a

The site sold for $50 million. The buyers plan to develop 298 units of marketrate and affordable housing at the site.

256 West 38th St

118,200 sf office bldg

American Realty Capital New York Recovery REIT Inc. / n/a

East End Capital; GreenOak Real Estate / Studley

The property sold for $48.6 million, or $400 per square foot, the New York Post reported. The building last traded a year and a half ago for $30 million, or $250 per square foot.

43-22 Queens St (Queens)

320,820 sf industrial bldg

43-22 Queens Street LLC / n/a

Kraupner Group affiliate / n/a

The industrial building sold for $48 million.

2410-2418 Broadway

12-story apt. bldg, 46 units total

n/a / A. Avital, P. Garcia, A. Miller, Eastern Consolidated; A. Doshi, Besen & Associates

M.E. & A. Realty Co. LLC / A. Avital, P. Garcia, A. Miller, Eastern Consolidated; A. Doshi, Besen & Associates

The property sold for $47 million.

198-200, 202, 204-206 and 208-210 Elizabeth St

2 office bldgs and 2 apt. bldgs.

S.W. Management / n/a

Ozi Management / n/a

The four properties sold for $45.2 million, the New York Observer reported.

309 West 57th St

75,000 sf apt. bldg, 102 units total

Imperium Capital; Bronstein Properties / n/a

n/a / n/a

The property sold for $42.5 million.

72-76 Greene St

5-story, 38,000 sf mixed-use bldg

L3 Capital; ASB Capital Management / A. Polsinelli, R. Khodadadian, Eastern Consolidated

BSJ Soho / A. Polsinelli, R. Khodadadian, Eastern Consolidated

The property sold for $41.5 million, or $1,186 per square foot.

178 Canal St

3-story, 10,620 sf office bldg

BLDG Management / n/a

Landmark Realty LLC / Lance Steinberg, Raber Enterprises

The property sold for $40.8 million. A Chase bank branch occupies the retail space and is the property’s largest tenant.

71 Smith St (Brooklyn)

27,582 sf development site

Carlyle Group / n/a

Hamlin Ventures; Time Equities / N. Rockett, H. Hwang, K. Wiedenmann, S. Kohn, C&W; E. Israel, JRT Realty

The former parking lot sold for $38.5 million. The buyer is considering a hotel and high-end residential development for the site.

23-01 42nd Rd and 23-10 Queens Plaza South (Queens)

2 development sites, 42,120 sf total

Property Markets Group; Vector Group; Hakim Organization / n/a

The Kraupner Group / n/a

The two lots sold for $37 million. The buyers plan to construct a 410-unit rental building on the site.

245-259 West 25th St

6-story apt. bldg

The Naftali Group / n/a

The Haruvi family / n/a

The rental building sold for $37 million, or about $500 per square foot, Crain’s reported.

260, 262, 264, 266 and 268 Elizabeth St

Five 5-story apt. bldgs, 46 units total

Elizabeth Stone LLC / Edmond Levy, Cornerstone Real Estate Investments

Raj Elizabeth St LLC / Edmond Levy, Cornerstone Real Estate Investments

The package sold for $33.5 million, or $868 per square foot. The price represents a gross rent multiple of 16.8.

Queens portfolio

4 apt. bldgs

Douglaston Realty / Aaron Jungreis, Rosewood Realty

Dermot Property Associates / S. Kohn, H. Hwang, M. Ehlinger, N. Rockett, K. Wiedenmann, S. Sarkar, S. Vankayala, C&W

The package sold for $32.5 million. The properties are located at 21-80 and 2181 38th Street and 23-05 and 23-15 30th Avenue.

59-61 West 36th St

17,380 sf parking garage

Hidrock Realty / n/a

n/a / n/a

The garage sold for $28.5 million, the New York Observer reported. The site allows for 86,900 square feet of usable space.

215, 217-219 and 221 West 28th St

80,000 sf development site

American Development Group / Edmond Levy, Cornerstone Real Estate Investments

215-217-219 West 28th Street LLC / Buchbinder & Warren

The development site at 215 and 217-219 West 28th Street and the air rights from 221 West 28th Street sold for $28 million.

30 East 92nd St

5-story, 6,018 sf apt. bldg

The Nightingale-Bamford School / n/a

Carnegie Hill Properties; Salon Realty; KH 753 9th Ave Associates / n/a

The Nightingale-Bamford School purchased an adjacent building for $21.9 million.

300 West 145th St

50,000 sf retail bldg

Ben Ashkenazy / n/a

Emmes Properties / B. Knakal, J. Hageman, Massey Knakal

The retail property sold for $21.5 million. Tenants include a Pathmark supermarket, Carver Federal Savings Bank and a local nursery school operator.

92 Vandam St

6-story, 14,700 sf office bldg

92 Vandam Partners LLC / n/a

Sandro La Ferla / n/a

The commercial building sold for $21.3 million.

220 West 71st St

9-story, 38,463 sf apt. bldg, 37 units total

Franpearl / n/a

Weinreb Management / Paul Smadbeck, Massey Knakal

The elevator building sold for $21.25 million, or $550 per square foot. The residential units consist of 29 one-bedrooms and eight two-bedrooms. Of these units, 16 are rent stabilized, six are rent controlled and 15 are market rate.

239-247 West 21st St

Three 5-story apt. bldgs, 60 units total

n/a / HPNY

The walk-up buildings sold for $21.2 million.

www.TheRealDeal.com February 2013 89

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47 East 91st St

Commercial condo

Prudential Insurance Company of America / n/a

Aegon USA Realty Advisors / Represented in-house

The commercial condo at the base of a luxury condo building sold for $20.3 million. The William Rockwell窶電esigned building has eight full-floor apartments and a duplex penthouse, as well as a Citibank branch.

77 Bowery

8-story, 40,051 sf office bldg

Keystone Equities LLC / n/a

n/a / n/a

The property sold for $20 million.

98 Greenwich St

5-story, 22,600 sf mixed-use bldg

Jiten Hotel Management / n/a

Sam Chang / n/a

The property sold for $19 million. The site is slated for the development of a 24-story, 180-room boutique hotel, measuring roughly 70,000 square feet, according to previous reports.

157 Suffolk St

6-story apt. bldg, 35 units total

157 Suffolk Street JV LLC / David Scheer, Rosewood Realty

157 Suffolk Street Investors LLC / Aaron Jungreis, Rosewood Realty

The property sold for $18 million.

136 West 44th St

8-story hotel

Douglas Durst / n/a

Steven Silberberg / N. Sroka, V. Santoro, S. Kremer, Douglas Elliman

The hotel sold for $18 million, the New York Post reported.

211 West 34th St

3-story retail bldg

Riese Organization / Barry Farchi, Azad Property Group

n/a / Eric Patino, Azad Property Group

The property sold for $17.5 million.

85-87 Mercer St

3,571 sf retail co-op

n/a / K. Kemp, D. Graff, Corcoran

n/a / L. Puopolo, A. Furst, Douglas Elliman

The retail co-op sold to Chinese investors for $15.2 million, or $3,622 per square foot, the New York Post reported.

318 Nevins St (Brooklyn)

25,000 sf warehouse bldg

Property Markets Group / n/a

n/a / n/a

The warehouse sold for $14 million, DNAinfo reported. The building is occupied by Verizon, which has leased the property since 1977. The buyer plans to rent out the building for the time being, according to the news site.

152 Spring St

Mixed-use bldg

Private investor / P. Von Der Ahe, S. Sjurset, Marcus & Millichap

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

The property sold for $12.7 million. The ground-floor retail space was previously occupied by restaurant Boom, which was forced to shut due to damages caused by Hurricane Sandy.

800 10th Ave

14,274 sf retail condo

Heskel Group / Daniel Rahmani, Venture Capital Properties

Alchemy Properties; Jamestown Properties / Robert Gibson, C&W

The retail condo sold for $11.3 million. The two-level space is leased for 25 years to drugstore chain CVS.

19 Beekman St

6-story, 25,039 sf office bldg

Ronnie Oved / n/a

n/a / D. Schechtman, B. Tapper, A. Kassin, Eastern Consolidated

The property sold for $11.2 million. The building comes with 46,160 square feet of air rights, making it ripe for further commercial development.

123 East 82nd St and 117 East 89th St

2 apt. bldgs, 40 units total

n/a / HPNY

The walk-up buildings sold for $10.9 million.

226-228 West 25th St

Two 5-story apt. bldgs, 40 units total

n/a / HPNY

The walk-up buildings sold for $10.5 million.

560 Amsterdam Ave

5-story hostel bldg

201 West 87th Street LLC / Wulf Lueckerath, Corinthian Group

Jazz Hostels Inc. / Steven Haber, Haber Realty

The Jazz on Amsterdam Avenue hostel sold for $10.3 million. The seller acquired the building for $7.9 million in January 2011.

152-154 Leroy St

27,980 buildable sf development site

n/a / Elaine Tross, Halstead

n/a / James Nelson, Massey Knakal

The commercial development site sold for $10.25 million, or about $366 per buildable square foot.

575, 579, 583 and 587 West 177th St

Four 5-story apt. bldgs, 87 units total

n/a / Raphael Toledano, Weissman Realty

n/a / Aaron Jungreis, Rosewood Realty

The properties sold for $9.4 million.

206 Spring St

5-story, 15,000 sf comm. bldg

Private investor / James Famularo, NYCRS

n/a / B. Mendelson, A. Schmerzler, C&W

The office and retail building sold for $8 million.

1212 Grand Concourse (The Bronx)

6-story apt. bldg, 61 units total

MMF 1212 Assoc. LLC / Aaron Jungreis, Rosewood Realty

1212 Grand Concourse Owner LLC / Aaron Jungreis, Rosewood Realty

The elevator building sold for $7.85 million.

311-313 West 47th St

Two 5-story apt. bldgs, 20 units total

n/a / George Niblock, FriedmanRoth Realty

The contiguous properties sold for $7.6 million.

77 Warren St

5-story mixed-use bldg

n/a / n/a

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

The loft building sold for $7.6 million.

210 Bowery

4-story, 9,200 sf retail bldg

Acadia Realty Trust / A. Polsinelli, R. Khodadadian, G. Meese, Eastern Consolidated

Robert Balter / A. Polsinelli, R. Khodadadian, G. Meese, Eastern Consolidated

The property sold for $7.5 million, or $815 per square foot.

199-203 East 4th St

Three 4-story apt. bldgs, 66 units total

Local investors / Aaron Jungreis, Rosewood Realty

195 East 4th Street LLC / Aaron Jungreis, Rosewood Realty

The properties sold for $7.2 million.

2055 Anthony Ave (The Bronx)

6-story apt. bldg, 79 units total

2055 A LLC/The Morgan Group / Aaron Jungreis, Rosewood Realty

2055 Anthony Ave. Owner LLC / Aaron Jungreis, Rosewood Realty

The elevator building sold for $7.15 million.

1420 Noble Ave (The Bronx)

6-story apt. bldg, 79 units total

1420 Noble Ave LLC / Samuel Kooris, Rosewood Realty

1420 Noble LLC / Aaron Jungreis, Rosewood Realty

The property sold for $7.05 million. The price represents a gross rent multiple of 7.4.

852-854 Amsterdam Ave

5-story apt. bldg

GWB Amsterdam LLC / Aaron Jungreis, Rosewood Realty

Frixos Realty LLC / Aaron Jungreis, Rosewood Realty

The walk-up building sold for $7 million.

60-62 John St

4-story warehouse bldg

n/a / n/a

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

The property sold for $7 million, or about $205 per square foot.

2828 and 2885 Valentine Ave (The Bronx)

2 apt. bldgs, 84 units total

n/a / Marcel Fridman, Barcel Group

The properties sold for $6.5 million. The price represents a gross rent multiple of 6.

26 Vandam St

21-unit apt. bldg

Stellar Management / P. Von Der Ahe, J. Koicim, D. Lloyd, Marcus & Millichap

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

The property sold for $6.1 million. The price represents a capitalization rate of 4.1 percent.

172-174 East 106th St

5-story mixed-use bldg

Private investors / Jeffrey Tanenbaum, Halstead

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

The property sold for $6 million, or about $340 per square foot.

164 East 61st St

5-story, 5,800 sf mixed-use bldg

Ira Lifshutz / n/a

n/a / Clint Olsen, Massey Knakal

The property sold for $5.9 million, or $1,017 per square foot.

418 East 89th St

8,500 sf apt. bldg, 23 units total

Vickers Realty Ltd / n/a

n/a / n/a

The property sold for $5.85 million, or $683 per square foot. The price represents a gross rent multiple of 14.5.

249 East 37th St

6-story apt. bldg, 53 units total

n/a / Barak Jacobov, GFI Realty

The elevator building sold for $5.65 million. The price represents a gross rent multiple of 8.7.

31 West 26th St

6-story, 11,094 sf office bldg

Ira Lifshutz / M. Yawitz, G. Saffioti, Eastern Consolidated

JYN LLC / Ari Schwartz, Eastern Consolidated

The commercial loft building sold for $5.6 million, or about $500 per square foot.

110 and 112 North 6th St (Brooklyn)

2 comm. bldgs, 18,000 sf total

North 6th Property LLC / CPEX Real Estate

110 N. 6th Street Inc. / S. Kelly, C. Sendogdular, M. Dzbanek, S. Burk, A. Sigourney, M. Sinyakov, CPEX Real Estate

The contiguous properties sold for $5.3 million, or $284 per square foot.

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Buys continued Address

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Buyer/ Representative

Seller / Representative

Notes

Bronx portfolio

4 apt. bldgs, 88 units total

n/a / Alex Horn, HPNY

n/a / Ivan Hakimian, HPNY

The package of walk-up buildings sold for $5.25 million. The properties are located at 1040, 1045, 1053 Boynton Avenue and 1820 Grand Concourse.

350-356 Neptune Ave (Brooklyn)

Mixed-use development site

n/a / n/a

n/a / Brian Hanson, Massey Knakal

The property sold for $5 million. The site has a total buildable square footage of 73,640.

25 Fort Washington Ave

6-story apt. bldg, 48 units total

n/a / Amit Doshi, Besen & Associates

John Blaser Tic LLC / Amit Doshi, Besen & Associates

The elevator building sold for $5 million, or $116 per square foot. The price represents a capitalization rate of 4.4 percent and a gross rent multiple of 11.

341 Lexington Ave

4-story, 3,800 sf apt. bldg, 5 units total

Private investor / A. Del Guercio, Itzhaki Properties

The walk-up building sold for $5 million. The price represents a capitalization rate of 4.4 percent.

33-39 and 33-45 Murray St (Queens)

4-story apt. bldg, 32 units total

n/a / Greg Corbin, Besen & Associates

H. Bonuck / Greg Corbin, Besen & Associates

The property sold for $4.85 million. The price represents a capitalization rate of 4.7 percent and a gross rent multiple of 10.3.

449 West 206th St

5-story apt. bldg, 23 units total

n/a / Michael Guttman, Rosewood Realty

n/a / Aaron Jungreis, Rosewood Realty

The property sold for $4.84 million.

83 East 7th St

4-story apt. bldg

83 East 7th Realty LLC / Jake Blatter, Rosewood Realty

83 East 7th Street LLC / Jake Blatter, Rosewood Realty

The walk-up building sold for $4.32 million.

434 West 52nd St

5-story apt. bldg, 14 units total

n/a / Glenn Raff, Besen & Associates

Cape Islands Company / Glenn Raff, Besen & Associates

The walk-up building sold for $4.3 million, or $463 per square foot. The price represents a capitalization rate of 4.5 percent and a gross rent multiple of 12.

166 Suffolk St

5-story apt. bldg, 19 units total

n/a / Kevin Esh, HPNY

n/a / Ivan Hakimian, HPNY

The walk-up building sold for $4.3 million.

51-53 West 19th St

2 comm. bldgs, 13,500 sf total

n/a / Bart Zimmerman, Barcel Group

The properties sold for $4.1 million.

2183-89 Third Ave

45,323 buildable sf development site

n/a / n/a

East Harlem developer / M. Tortorici, S. Shkury, V. Sozio, D. Tropp, Ariel Property Advisors

The property sold for $3.78 million. The transaction included the transfer of 8,800 square feet of air rights from the adjacent 2191 Third Avenue.

407 East 6th St

5-story apt. bldg, 5 units total

Clear Davinci LLC / Anand Melwani, ARM Real Estate Group

Julie F. Beckman / D. Herzberg, B. Gernandt, Corcoran

The walk-up building sold for $3.61 million. The new owner will renovate the units and rent them out as full-floor apartments. The ground floor will have a backyard and the second-floor unit will have a terrace.

22 Spring St

5-story apt. bldg, 18 units total

n/a / George Niblock, FriedmanRoth Realty

The property sold for $3.35 million.

238.5 East 83rd St

4-story brownstone, 2 units total

n/a / S. Handwerker, P. Ahjar, Marilyn Korn Real Estate

n/a / Lydia Rosegarten, Leslie J. Garfield & Co.

The property sold for $3.2 million.

500 West 213th St

5-story apt. bldg, 22 units total

500-502 West 213th Street Heights Associates LLC / Michael Guttman, Rosewood Realty

Local investors / Aaron Jungreis, Rosewood Realty

The property sold for $3.17 million.

170 East 17th St (Brooklyn)

5-story apt. bldg, 29 units total

Local investor / Aaron Jungreis, Rosewood Realty

170 East 17th St. Realty Corp. / Samuel Kooris, Rosewood Realty

The property sold for $3.08 million. The price represents a gross rent multiple of 10.

35-11/15 Linden Pl (Queens)

4-story, 12,000 sf apt. bldg, 18 units total

n/a / n/a

n/a / Stephen Preuss, Massey Knakal

The property sold for $2.93 million.

523B East 85th St

5-story apt. bldg, 9 units total

n/a / Glenn Raff, Besen & Associates

Kandel Richard / David Davidson, Besen & Associates

The property sold for $2.85 million.

253 East 181st St (The Bronx)

6-story apt. bldg, 37 units total

n/a / Amit Doshi, Besen & Associates

Anita Blaser Tic LLC / Amit Doshi, Besen & Associates

The property sold for $2.8 million.

119 Chambers St

1,500 sf retail condo

Local investor / A. Polsinelli, R. Khodadadian, Eastern Consolidated

The retail condo sold for $2.5 million, or $1,666 per square foot.

438 and 440 Atlantic Ave (Brooklyn)

2 mixed-use bldgs

n/a / Lindsay Barton Barrett, Corcoran

n/a / Laura Scariano, Ideal Properties Group

The properties sold for $2.5 million.

561 West 186th St

5-story apt. bldg, 21 units total

n/a / Michael Guttman, Rosewood Realty

n/a / Aaron Jungreis, Rosewood Realty

The property sold for $2.48 million.

143 West 29th St

5,000 sf comm. co-op

TSL Designs / Murray Hill Properties

29th Street Realty LLC / Suraj Advaney, Triboro Realty & Management

The third-floor commercial co-op sold for $2.28 million.

307-311 Union Ave (Brooklyn)

15,000 buildable sf development site

n/a / n/a

n/a / M. Lively, B. Maddigan, Massey Knakal

The development site sold for $2.25 million, or $150 per buildable square foot.

136 West 22nd St

2,600 sf retail condo

Skowhegan School of Painting and Sculpture / R. Khodadadian, A. Polsinelli, Eastern Consolidated

Spyro Avdoulos / P. Carillo, A. Erdos, Eastern Consolidated

The vacant, ground-floor retail condo sold for $2.19 million, or about $840 per square foot.

502 West 213th St

5-story apt. bldg, 26 units total

500-502 West 213th Street Heights Associates LLC / Michael Guttman, Rosewood Realty

Local investors / Aaron Jungreis, Rosewood Realty

The property sold for $2.17 million.

925 St. Marks Ave (Brooklyn)

4-story apt. bldg, 20 units total

n/a / Shlomo Antebi, GFI Realty

The walk-up building sold for $2.16 million. The price represents a gross rent multiple of 8.8.

201 West 136th St

5-story apt. bldg, 9 units total

n/a / David Scheer, Rosewood Realty

n/a / Ryan Perkoski, Rosewood Realty

The property sold for $2 million.

88-40 144th St (Queens)

4-story, 15,450 sf apt. bldg, 18 units total

Private investor / Darryl White, Cornerstone Property

Theresa Fabian; Angelina Militana / n/a

The estate sale was completed at a price of $1.94 million.

412 Sterling Pl (Brooklyn)

3-story townhouse, 2 units total

n/a / K. Hall, N. Adamson, Brown Harris Stevens

n/a / J. Rhodes, E. Serras, Ideal Properties Group

The townhouse sold for $1.72 million.

28 Scholes St (Brooklyn)

3-story apt. bldg

n/a / n/a

n/a / M. Lively, B. Maddigan, Massey Knakal

The property sold for $1.4 million, or about $373 per square foot.

563 Amboy St (Brooklyn)

4-story apt. bldg, 12 units total

Local investor / Joseph Landau, GFI Realty

RTC Realty Inc. / Shlomo Antebi, GFI Realty

The walk-up building sold for $1.35 million.

1049 Glenmore Ave (Brooklyn)

4-story apt. bldg, 19 units total

n/a / Lev Mavashev, Besen & Associates

Caleb 18 LLC / Jacob Aranov, Besen & Associates

The walk-up building sold for $1.13 million, or about $78 per square foot. The price represents a capitalization rate of 7.2 percent and a gross rent multiple of 6.6.

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∙ Video doorman & package room ∙ Common roof deck with wide open views ∙ Certificate of occupancy ∙ On-site indoor parking with private ∙ ∙

storage included Beautiful, modern, glass and bamboo lobby Bosch washer/dryer

3751 Riverdale Avenue, Riverdale NY 10463 Tel: 718.878.1771 or email BolandTeam@halstead.com www.fieldstonlofts.com The complete offering terms are in an offering plan available from sponsor. File No. CD 11-0127. Equal Housing Opportunity

Financing Address

Size

Borrower / Representative

Lender / Representative

Notes

56 Leonard St

New construction condo bldg

Alexico Group / n/a

n/a / n/a

A $350 million construction loan was secured for the 830-foot condo project. The development stalled following the financial crisis but restarted in October 2012. A sales effort led by Corcoran Sunshine Marketing Group is set to begin this quarter.

8925 Avenue D (Brooklyn)

277,907 sf retail center

Cole Real Estate Investments / K. Mackenzie, M. Tepedino, HFF

PNC Bank / n/a

A $75 million loan was provided to acquire the Canarsie Plaza shopping center. The fixed-rate loan was provided over a 10-year term.

75 Livingston St (Brooklyn)

95-unit apt. bldg

Heights 75 Owners Corp. / n/a

NCB / n/a

A $9 million first mortgage and a $1 million line of credit were arranged for the building.

79-10 34th Ave (Queens)

146-unit apt. bldg

The Terrace View Owners Inc. / n/a

NCB / n/a

A $5.5 million first mortgage and a $1 million line of credit were arranged for the building.

111 Fourth Ave

178-unit apt. bldg

Fourth Avenue Owners Corp. / n/a

NCB / n/a

A $5 million first mortgage and a $200,000 line of credit were arranged for the building.

755 West End Ave

47-unit apt. bldg

755 West End Housing Corp. / n/a

NCB / n/a

A $4.5 million first mortgage and a $500,000 line of credit were arranged for the building.

233 East 86th St

56-unit apt. bldg

Park East Apartments Inc. / n/a

NCB / n/a

A $3.5 million first mortgage and a $500,000 line of credit were arranged for the building.

1100 Grand Concourse (The Bronx)

70-unit apt. bldg

1100 Concourse Tenants Corp. / n/a

NCB / n/a

A $3.3 million first mortgage and a $400,000 line of credit were arranged for the building.

210 East 63rd St

68-unit apt. bldg

210 East 63rd Owner Inc. / n/a

NCB / n/a

A $2.7 million first mortgage and a $500,000 line of credit were arranged for the building.

4295 Webster Ave (The Bronx)

78-unit apt. bldg

4295 Webster Avenue Owners Corp. / n/a

NCB / n/a

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

2106 Honeywell Ave and 12 Clifford Pl (The Bronx)

Two 5-story apt. bldgs, 31 units total

n/a / Angela Ortiz, Besen Capital

n/a / n/a

A $2.25 million acquisition loan was provided.

1095 Park Ave

67-unit apt. bldg

1095 Park Avenue Corp. / n/a

NCB / n/a

A $1.5 million line of credit was arranged for the building.

148 East 84th St

18-unit apt. bldg

148 East 84th Street Owners Corp. / n/a

NCB / n/a

A $1 million first mortgage and a $200,000 line of credit were arranged for the building.

2 Horatio St

242-unit apt. bldg

2 Horatio Owners Corp. / n/a

NCB / n/a

A $1 million line of credit was arranged for the building.

3 East 69th St

32-unit apt. bldg

3/69 Owners Corp. / n/a

NCB / n/a

A $1 million line of credit was arranged for the building.

Other Deals Chetrit Group to buy Sony HQ for $1.1B Sony will sell its New York City headquarters at 550 Madison Avenue to the Chetrit Group for $1.1 billion, Bloomberg News reported. The electronics giant will remain in the building that bears its name for about three more years, and will generate around $770 million in cash with the sale, when debt and transaction costs are accounted for. “It makes sense for Sony, as it’s no longer a cash-rich company,” Keita Wakabayashi, an analyst at Tokyo-based Mito Securities, told Bloomberg News. (The deal was announced after the deadline for the Deal Sheet.)

Thor closes on Scoop building for $96.44M A year-end deal for the Scoop building, owned by billionaire grocery magnate and newbie real estate investor Ron Burkle, closed for $96.44 million, according to public records filed with the city last month. The deal represents a $30 million mark-up over what the California-based tycoon paid for the five-story, 61,000-square-foot building at 428 West 14th Street one year previously. Sources told The Real Deal that Burkle, who has an ownership interest in tenant Scoop, made the deal more attractive to Thor by modifying the terms of the retailer’s lease. Scoop extended its lease in one portion of the building and shortened it in another, the source said. (The deal was announced after the deadline for the Deal Sheet.)

Lightstone pays $63M for Lower Manhattan development site

Setai developer pays $53M for Lower Manhattan office building

The Lightstone Group purchased a cluster of three buildings on Fulton Street in Lower Manhattan, as well as air rights for three adjacent properties owned by Time Equities, according to city records posted last month. The deal is worth roughly $63 million, sources familiar with the transaction told The Real Deal. Moreover, Lightstone has permission to demolish the three buildings, one source said, and may develop a mixed-use property. According to The Real Deal’s calculations, the development could exceed 300,000 square feet. (The deal was announced after the deadline for the Deal Sheet.)

A Lower Manhattan office building sold to an Italian real estate development firm for $53 million, according to records filed with the city last month. Bizzi & Partners, a Milan-based developer, nabbed the 12-story building at 350 Broadway, situated between Leonard and Franklin streets, from a company identified as Hampstead LLC in another last-minute trade before the end of 2012. The building was previously owned by Extell Development, which sold the 114,000 square-foot office space to Hampstead for $39.5 million in 2006. (The deal was announced after the deadline for the Deal Sheet.)

U.S. Census leases 40,000-sf at 32 Old Slip

LES building that sparked a fierce bidding war trades for $11.3M

A blow dealt by Hurricane Sandy was not enough to stop 32 Old Slip from attracting its second major tenant in less than 30 days last month. The U.S. Census Bureau will take over more than 40,000 square feet at the building, located along the East River near the South Street Seaport, Crain’s reported. The Bureau will occupy the entire ninth floor of the building, as well as some space on the eighth floor at a cost of somewhere in the low $40s per square foot. Early last month, construction management and consulting firm Hunter Roberts took over the entire 10th floor at 32 Old Slip. (The deal was announced after the deadline for the Deal Sheet.)

Jefferies Group snubs World Trade Center towers, renews at 520 Madison

JDS and PMG secure $45M financing for condo project in Hell’s Kitchen

Jefferies Group renewed its 450,000-square-foot lease at 520 Madison Avenue, putting rest to speculation that the investment bank would move to a new location in Midtown West or at the World Trade Center site, Crain’s reported last month. The renewal adds 15 years to Jefferies’ lease in the 43-story, 1 million-square-foot tower, which is owned by Tishman Speyer. Jefferies will occupy two spaces in the tower: a large block of space on floors two through 13 and a smaller, higher-priced space on floors 16 to 20. (The deal was announced after the deadline for the Deal Sheet.)

JDS Development Group and Property Markets Group secured $45 million in financing for their luxury condominium development in the former Verizon building in Hell’s Kitchen, indicating that banks are becoming more receptive to condo projects, the Wall Street Journal reported last month. The partnership, which acquired the upper floors of the Ralph Thomas Walker–designed telephone building at 435 West 50th Street for over $25 million in 2011, aims to convert the upper floors into 71 luxury condos, as The Real Deal previously reported. (The deal was announced after the deadline for the Deal Sheet.)

94 February 2013 www.TheRealDeal.com

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A six-story Lower East Side walk-up, known as the Mayflower, sold in a heated bidding war for $11.3 million to a Long Island investor, the New York Observer reported last month. Massey Knakal arranged the auction of the 21,309-square-foot mixed-use building, located at 221-223 East Broadway on the southeast corner of East Broadway and Clinton Street, on behalf of Red Brick Properties. Just a block south of the Seward Park Mixed-Use Development Project, Red Brick plans to hold the Beaux-Arts building and eventually convert its affordable housing units to market-rate rentals. (The deal was announced after the deadline for the Deal Sheet.)

Accountant society takes full-floor space for headquarters at 14 Wall Street The New York State Society of CPAs will be moving its headquarters from 3 Park Avenue in Midtown to a less expensive home at 14 Wall Street in the Financial District, Crain’s reported. The NYSSCPA, one of the country’s largest accounting organizations with almost 30,000 members, will take over an entire 37,000-square-foot floor at the property at a cost of somewhere between $40 and $50 per square foot. It is a ten-year lease. (The deal was announced after the deadline for the Deal Sheet.) TRD

ON THE MOVE Rental Training: The Way to Success A conversation with Frank Sanchez, EVP and Director of Rentals, AC Lawrence AC Lawrence, a member of The Bellmarc Group, is one of the premier real estate companies focusing primarily on rentals in New York City. In this interview, Frank Sanchez, Executive Vice President and Director of Rentals, discusses the company’s training program with Olinda Turturro, the Director of Recruiting for The Bellmarc Group. OLINDA: I understand that AC Lawrence has developed a training program different from others. Would you tell me a bit about what is involved? FRANK: Our rental training consists of nine two-hour training modules. The modules are designed to demystify the entire process—developing a relationship with the client, showing properties, the application and lease process and bringing transactions to closing. Members of the AC Lawrence management team also participate by discussing social media and time management. We like to have our agents engage in business right away, with supervision.

OLINDA: What kind of support do agents receive? FRANK: Our management team has years of experience in dealing with every conceivable possibility. They know all the landlords and management companies and their qualification requirements. We have experts in the listing department. We have managers with over thirty years of experience. We have experts in accounting. We have experts in legal. We have experts in marketing and promotion. We also have the active involvement of Anthony DeGrotta, Larry Friedman and Neil Binder who are hands-on owners. Beyond these participants, the company has made an ongoing commitment to technology and we have in-house computer specialists consisting of programmers and support staff. We also have an in-house publicist and a public relations professional; we have a creative director and designer as well as a social media director. We are truly committed to cov-

OLINDA: How do you teach an agent about customer service? Is it important that they have a sales background? FRANK: Providing exceptional customer service can make all the difference in an agent’s ability to generate income. This is why our training includes strategies that seek to exceed the customer’s expectations. Our agents know their product and listen to their clients’ needs. This is a fundamental component to creating a positive experience. Having sales experience might be helpful but it is not essential. What is more important is to ask the right questions and to listen to the client’s answers, and then to interpret their needs into a constructive course of action that meets the clients’ goals. Our team of experts supports the agent to ensure that appropriate expertise is there when issues arise. That’s the role of management: to support and serve the agents.

THE

www.aclawrence.com

OLINDA: What would you say is the single most important thing that an agent in training should learn? FRANK: There must be an expectation for success. I believe that the key to successful performance is in having passion for what you do. You also must have confidence and technique. You are who you hope to be if you commit yourself to getting there. I think if the agents learn this from training, the technical aspects will be easily achieved; the agents will know that by understanding the business, they have met a crucial component to achieving their expectation for success. OLINDA: Do you provide ongoing training and/or mentoring? FRANK: iAbsolutely. We hold on-going

Frank Sanchez reveals the secrets of his successful training approach to Olinda Turturro.

rental meetings including all aspects of the business and advanced sales seminars. We also invite agents to work with a mentor or a team leader if they choose. This all happens organically. Once they spend a bit of time in the office they will probably find someone who shares their point of view and who they want to work with. We are happy to help an agent with this in any way he or she may want. OLINDA: Why is there such an emphasis on training? FRANK: We are in one of the most competitive industries in New York City. An agent must be able to distinguish himself or herself. Customers have a right to choose an agent who provides the best service and that can only be attained when the broker is deeply committed to training their agents. Training is an ongoing effort. We are always learning and always growing because the market is dynamic. You either lead or follow, and a firm that is committed to building a reputation understands that training is a fundamental. Welltrained salespeople make money and those who are not well trained will make less. OLINDA: Do you think that everyone should start in rentals and then add sales? Can I do both? FRANK: The advantage of being in the rental business is that you can generate income much more quickly than in sales. For some people this is essential since the length of time for a sales transaction to occur can be months, while a rental deal can be done in a matter of days. Each business has a lot to offer an agent. We are dedicated to providing rental training and sales training because we believe the more the agent knows the better he or she will be in either forum. A well-trained rental agent who knows sales is a better rental agent; however, I don’t think that one area is better than another. It’s just a different forum; the beauty of our company is that we can offer agents the very best of both.

BellmarcGROUP

AC LAWRENCE RENTALS

ering all the elements that make for a great experience for the agent, the client and the customer 24 hours a day, seven days a week.

SALES | BELLMARC www.bellmarc.com

BELLMARC BELLMARC

Development updates LEASING UPDATE

Long Island City

The View

27 on 27th 27-03 42nd Road Leasing has launched at the 142-unit rental building, developed by Heatherwood Communities. The 27-story building is comprised of studio, one- and two-bedroom residences. Units range in size from 491 to 1,026 square feet, and monthly rents range from $1,873 to $3,413. Building amenities include a concierge, roof deck, fitness center, recreation room, movie screening room, children’s playroom, storage units and on-site parking. Aptsandlofts.com is the agent. Contact: www.27on27th.com. SALES UPDATE

Carroll Gardens

Midtown South

Sackett Union 291 Union Street

Twenty9th Park Madison 39 East 29th Street The 142-unit condominium, developed by Espais and designed by H. Thomas O-Hara Architect, is now 100 percent sold, with an average sale price of $1.32 million per unit. Apartments in the building range from studio to two-bedroom units, and building amenities include a 24-hour doorman, concierge, fitness center, adjacent parking garage, cold storage for food deliveries and roof deck. Warburg Realty is the agent. Contact: www.twenty9th .com.

Sackett Union

The 32-unit condominium, developed by Alchemy Properties and designed by Rogers Marvel Architects, is now 85 percent sold. The two-, three- and four-bedroom apartments range in size from 855 to 2,210 square feet, and are priced from $1.52 million to $2.15 million. Building amenities include a roof deck, children’s playroom, fitness center, 24-hour attended lobby and on-site parking. Contact: www.sackettunion.com.

Greenpoint 48 Box Street Sales have launched at the six-unit boutique condominium, developed by HM Ventures Group. Units in the building include one-, two- and three-bedroom apartments ranging from 1,002 to 1,631 square feet and in price from $635,000 to $899,000. Building amenities include a fitness center and on-site indoor parking. Aptsandlofts.com is the agent. Contact: www.aptsandlofts.com.

Long Island City The View 4630 Center Boulevard The 184-unit condominium, developed by TF Cornerstone and designed by Handel Architects, is now 90 percent sold. The building has 18 two- and three-bedroom units remaining, ranging up to 1,879 square feet in size and priced from $1.1 million. Building amenities include a 2496 February 2013 www.TheRealDeal.com

hour doorman, concierge, garage, fitness center, billiards room, roof deck and spa. Modern Spaces is the agent. Contact: www.livingtheview.com.

Upper West Side 101 West 87 101 West 87th Street Sales have relaunched at the 62-unit, 12 story condominium, which is now being developed by Bazbaz Development, Fisher Brothers and BlackRock Investment Management. Available units include one-, two-, three- and four-bedroom homes, and one five-bedroom penthouse. One-bedroom units range in size from 650 to 750 square feet and are priced from $790,000 to $1 million. Two-bedrooms range from 975 to 1,450 square feet and are priced from $1.2 to $1.7 million. Three-bedroom units range from 1,450 to 2,300 square feet and are priced from $1.8 to $3.9 million. Four- and five-bedroom units range from 2,000 to 3,000 square feet, and in price from $3.3 million to $7 million. Building amenities include a 24hour doorman, garden, lounge, roof deck, children’s playroom and fitness center. Corcoran Sunshine Marketing Group is the agent. Contact: www.101w87.com. Compiled by Andrea Cetra

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1/25/13 9:42 AM

RESIDENTIAL DEALS Financial District $670,000 71 Nassau Street, #3B

One-bedroom, one-bath, 685-square-foot unit in a condo conversion, the Croft; building has doorman, roof deck, gym; unit has eat-in kitchen, washer/dryer; common charges $835 per month; taxes $280 per year; asking price $699,000; 40 weeks on the market. (Brokers: Jesse Buckler and Tom Stuart, Bond New York)

TAKE YOUR PLACE IN THE FUTURE OF NYC REAL ESTATE.

“The listing was a referral from a friend. The seller wanted a larger apartment. We decided it would be easier [ for him to] sell and then move to a rental, because at this point you can’t make a sale contingent on another sale. We ended up doing a direct deal when the buyer came to an open house and didn’t have a broker yet. I was shocked at how many investors [showed interest], but this was a single individual. When he saw it, he said, ‘I am going to buy this.’ One thing that put the co-op board off was the age of the buyer — he was younger. But he is fully able financially to pay for the apartment. He got a traditional mortgage and put a substantial amount down. The closing went well. In fact, the furniture was being moved in during the closing.” Jesse Buckler, Bond New York

Soho $5.65 million 104 Wooster Street, #2N

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LINKING REAL ESTATE WITH REAL LIFE.™ 98 February 2013 www.TheRealDeal.com

Three-bedroom, three-bath, 3,100 sf condo; building has doorman; unit has keyed elevator, exposed wood beams, central A/C; common charges $2,182 per month, taxes $2,072 per month; asking price $5.59 million; 11 weeks on the market. (Brokers: Jason Saft, Citi Habitats; Jason Karadus, Town Residential) “The sellers were looking to change scenery and locations; it was more convenient for them to be Uptown. I put the apartment

on the market in late October. … I had the world’s greatest stager. She chose great furniture and she really made you want to sit in the space, and I think that’s really key. You don’t want to walk through [3,100] square feet of blank space. Contracts were being drafted with a family who had toured the apartment a number of times, [when] I got a call from [another bidder’s] agent. They wanted it, and could close in two or three weeks. The other buyer couldn’t match the offer. It was practically a record for the building. The buyers were all cash, and board approval was submitted and approved in seven days.” Jason Saft, Citi Habitats

Upper East Side $520,000 250 East 87th Street, #29J

One-bedroom, one-bath, 650 sf unit in a doorman co-op, the Newbury; building has roof deck, pool, gym; unit has hardwood floors, granite countertops; maintenance $992 per month; asking price $539,000; two years on the market. (Brokers: Robin Portnoy, Maxwell Jacobs; Sarah Buff, Halstead Property) “I live in this building. When it came time for the seller to list, I was a known entity as an agent in the building, and she called me. She’s a psychologist for a school system outside of Manhattan and that was why she wanted to move. One major obstacle [to selling the apartment] was that the bedroom is very small. A king-size bed would not be feasible. It’s an interesting building that doesn’t really have great comps because the building has lots of amenities [like a pool and a gym] that people don’t really need when they are looking for a starter home. So many people who came to see the apartment got larger apartments for the same price in buildings that were considerably less fancy. We were having difficulty selling. … We found someone, but it took two years! She is a first-time buyer, so to satisfy the board it did require a gift to make sure the liquid assets were there. But I knew, because I have access to the board, what was going to work and what wasn’t going to work. Once the board package was submitted, it took probably two weeks.” Robin Portnoy, Maxwell Jacobs Compiled by Guelda Voien

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Commercial market

from page 24

Midtown South Interpublic Group is planning additional moves in Manhattan as well. This year, it’s leaving three floors at 28–40 West 23rd Street, a mid-block Flatiron District building. Colliers, which represents the landlord, placed a 98,000-square-foot block (over four floors) on the market last month, according to CoStar. Interpublic’s lease does not end until October, and listing broker Andy Roos, a vice chairman at Colliers, said he expected the space to be leased by then. “We are seeing media tenants, new media and traditional advertising agencies” tour the space, he said. The space is listed for $62 per square foot, above last month’s Midtown South average asking rent of $47.04 per foot. (The availability rate in Midtown South, meanwhile, grew 0.4 points to 8.4 percent, the biggest jump of any of the submarkets, according to Colliers.) Brokers said it was unclear what the near-term impact of the sale of the St. John’s Center building would have on Midtown South leasing. The four-story building, which is home to a division of Bloomberg L.P., has had nearly 694,485 square feet — more than half the

building — available for 87 months, according to data from CoStar. That is currently the longest time any block of space larger than 200,000 square feet has been on the market in Manhattan, a review of CoStar data shows. And insiders predicted that the new owners would aggressively market the property for leasing. “That whole West Side, Lower West Side and Tribeca area will only continue to thrive,” Hrobsky said. “For the last seven years, I bet until a year or so ago, you would not have said, ‘I want to be in that building as a bigfloor-plate user.’ That probably [began] just after Google [took] over the whole of 111 Eighth Avenue.”

Downtown Downtown is gearing up to welcome another new media tenant to its ranks. HarperCollins, a longtime Midtown tenant at 10 East 53rd Street, is moving to Lower Manhattan: The book publisher inked a deal last month at 195 Broadway, where it plans to move in 2014. The company signed a 15-year lease for 185,000 square feet, according to news reports.

Downtown brokers said they’re hoping other Midtown-based companies will follow suit. The deal demonstrates that “Downtown is a viable option for a Midtown tenant,” said James Delmonte, a vice president and head of research for the New York office of commercial firm Avison Young. With an eye to landing such a tenant, CBRE recently brought to market a block of space just over 100,000 square feet on five floors at 156 William Street. The space, which is currently occupied by the city’s Department of Youth and Community Development, has an asking rent of $37 per square foot, according to CoStar. “We are hoping to attract tenants priced out of Midtown South and Midtown,” said Bradley Gerla, an executive vice president at CBRE, who is listing the space along with CBRE’s Jonathan Cope. “We are also talking with some medical tenants and [with others] as a possible office for some schools.” The average asking rent Downtown last month was $44.10 per foot, a decline of $1.39 per foot from the end of 2012, the Colliers data showed. The availability rate Downtown fell 0.2 points last month to 15.2 percent. TRD

Secret listings from page 30 unethical, not least because it involves lying to potential clients. So how can brokers avoid having homeowners mistake their intentions? Industry veterans recommend targeting only the homes that fit the buyer’s needs and budget, researching those units in depth and communicating specific information about the buyer to potential sellers. “You need to try to make this not a cold call,” Henckels said. “You need to try to establish your credibility because you’re only going to get one conversation.” If brokers are lucky, they’ll stumble upon someone who is already contemplating moving — the kids are at college, or the commute has changed. Sometimes a recent death or divorce can help a broker’s cause. For example, Schmitz had one Chinese client who found the perfect Murray Hill co-op, but was unwilling to live on the unlucky fourth floor. He called owners with units on the fifth floor and above, and within 24 hours had arranged

a deal with the son-in-law of a recently deceased resident. And if all else fails, it’s worth remembering one real estate rule: “Everything is always for sale at the right price,” Power said.

Tricky deals Convincing an owner to part with their apartment is only the beginning. Once a broker finds a homeowner willing to sell, the deal becomes similar to a for-sale-by-owner transaction, which can be more complex than a broker-on-broker deal. Negotiations can be difficult, brokers said, because the seller may have no idea what comparable properties are worth. And though buyers often pay a premium in these situations, some sellers get the impression that they will be willing to pay any sum for their dream home and adapt their bargaining strategies accordingly. Another tricky point is the question of broker representation, which can be confusing for sellers who don’t have a

listing agent. The broker working with the buyer is required by law to explain up front that they are solely representing the interests of their client, the buyer, and working on the seller’s behalf. Once this is explained to them, some homeowners decide to have their attorneys represent them, while others hire a broker to negotiate the deal. That can complicate the transaction, especially if the new broker convinces the seller that putting the unit on the market and advertising it to a bigger audience would fetch a better price, experts said. For all these reasons, brokers recommended evaluating the potential seller as closely as his or her apartment before making an offer. Garvey suggested asking questions like: “Is this person realistic? What kind of money are they asking for their unit? Are they going to be able to handle the transaction? “If they’re not,” she added, “they need to have an attorney or another agent handle it.” TRD

REITs from page 38 Yet some companies sat on their hands. Boston Properties — whose stock was at about $110 late last month, off its $116 high last fall, but higher than its recent $100 low in mid-November — didn’t buy or sell a single asset in 2012. That was also true for normally active New York REITs like Brookfield Office Properties, General Growth Properties, iStar Financial, Apollo Commercial Real Estate Finance and Gramercy Capital, according to Real Capital. But the inactivity was not necessarily a bad thing. In the case of Boston Properties, a firm which hit a stock peak of $126 a share in January 2007, some analysts say that company investors could be taking a positive view of the leasing activity at 250 West 55th Street. The new high-rise near Times Square has recently signed leases with two law firms (Kaye Scholer as well as Morrison and Foerster), according to news reports. In general, Boston Properties’ buildings, which tend to be well-known structures in core areas, have impressive occupancy rates. Its 125 West 55th Street, for example, has a rate in the mid-90 percent range, analysts pointed out. Others, though, say Boston Properties, which is head100 February 2013 www.TheRealDeal.com

ed by Mort Zuckerman, still has room to grow. “We have them as underperforming slightly, which was a surprise, since they are the blue chip of the office REIT sector,” said Stewart. Sam Zell’s Equity Residential, meanwhile, seems to have suffered a bit despite buying, along with AvalonBay, a large portion of Archstone’s rental portfolio in a multibillion-dollar deal late last year (see related story on page 36). Equity Residential’s stock price was around $58 late last month, basically unchanged from a year ago, and below its recent high of $63 in summer 2012.

Niche REITs In many ways, the hotel industry has cottoned to the REIT structure more than any other type of property owner. An analysis by The Real Deal in the fall found that 7 of the 15 largest hotel owners south of 96th Street in Manhattan are REITs. And while there were few major moves in terms of trading properties among the big hotel players last year, they did spend considerable capital repositioning. For example, Host Hotels & Resorts — which, accord-

ing to TRD’s recent analysis, is the biggest hotel owner south of 96th Street, with properties including Times Square’s hulking 1,967-room Marriott Marquis — spent 2012 rebranding the former Helmsley Hotel on East 42nd Street. The image campaign may be helping. Late last month, the company’s stock price was around $17 — a steep spike from a recent low in fall 2011, when it was trading at about $10. While the old guard generally locked in gains, to some extent, it was the nontraditional REITs whose bold moves were rewarded most. Over the summer, the publicly traded REIT CubeSmart, a national storage company, completed its acquisition of 22 properties formerly owned by Storage Deluxe, most of them in New York City, for $560 million. In breaking into the difficult New York market, CubeSmart has become a major force in that industry and is continuing to aggressively expand. Still, overall, Sullivan said he thinks there will be “more of the same” on the REIT front going forward “until we have a clearer path forward [with] better conditions in financial services and government.” TRD www.TheRealDeal.com January 2012 00

Barnett from page 41 nett signed a 99-year ground lease with the estate of Sol Goldman, and last summer he bought air rights from the neighboring Roman Catholic Church. And the firm is assembling a smaller site at 1687–1693 Third Avenue between 94th and 95th streets. The roster doesn’t end there. There’s another megadeal coming down the pike on the Lower East Side. Extell — a long-rumored buyer — is in contract to acquire a 1.1 million-square-foot development site at 227 Cherry Street for approximately $150 million to $200 million, insiders confirmed. The seller was advised by Eastern Consolidated. Extell had been in contract to buy the site for $87 million in 2007, but backed out when the market collapsed and, according to court records, sacrificed its $6 million down payment. (The site is blocks from Barnett’s childhood home at 1 Pike Street.) The firm also has a number of development sites in mothballs. At One Hudson Yards, a site at 560 West 34th Street on 11th Avenue with 1.7 million square feet, Extell has hired commercial firm Jones Lang LaSalle to secure an office tenant before construction begins. Barnett also bought a collection of garages from Central Parking System in 2011. Insiders believe those are potential

seeds for assemblage or simple development sites.

Not one-upmanship While Barnett is still looking to buy more properties, he also was one of the city’s biggest sellers. And he has more sites on the market to sell, which could net him millions more. “We sold stuff last year for a combination of several reasons. One is to raise cash; two is it was a good time to sell because of the tax treatment; and three, they are just nonstrategic,” Barnett said. While he often buys properties as quietly as possible, he’s also been known to bite into a project — especially a strategic purchase or legal filing — and hold on, causing headaches and delays for rival developers. In 2001, Barnett began an unsuccessful fight with Bruce Ratner to develop the New York Times headquarters tower at 620 Eighth Avenue. He also very publicly tussled with Donald Trump when he purchased a parcel on the Upper West Side from Trump’s Chinese investment partners. And he fought with Forest City Ratner again over the Atlantic Yards project in 2005 in Brooklyn, where Extell submitted what was considered by some to be a spoiler bid. More recently, he scored a victory against Related, which

is headed by Jeff Blau and Stephen Ross, when he landed the Nordstrom deal. (Related, which declined to comment on Extell for this story, and others had spent years wooing the department store as an anchor tenant for the retail mall at its massive Hudson Yards project.) But Barnett denies that besting other developers in the pursuit of deals is personal. “It’s not really about competition. I imagine some people have that feeling, that it is one-upmanship. But I totally don’t think like that, and people who know me, I think, realize that,” he said. For example, at 220 Central Park South he’s engaged in an ongoing dispute with Steven Roth’s Vornado Realty Trust, which owns the building and wants to demolish it and construct a new tower. (Barnett, whose 1780 Broadway is directly across the street, controls the building’s garage and has refused to relinquish the leasehold.) When pressed later on what would happen with the standoff, he scrunched up his face and mischievously said: “Who knows? I cannot predict the future. … I have no clue. I truly do not know what will happen.” Then after further reflection, he said, “No one would say real estate in New York is not a competitive field.” TRD

Burger from page 52 BHS colleague Fritzi Kallop, Burger has the listing for the late newsman Mike Wallace’s duplex penthouse at 730 Park Avenue for $17.95 million.

Floor-plan fiend Like many of his wealthy clients, Burger dislikes talking to the press about his personal life. “I’m a very private person,” he told The Real Deal. “I don’t want to start talking about my summer house and this and that. That’s none of anybody’s business.” (According to public records, Burger owns a home in Water Mill on the East End.) Burger did say that he’s the son of German immigrants and was born at Doctors Hospital — ironically, now the site of high-end condominium 170 East End Avenue — in the traditionally German neighborhood of Yorkville. Burger speaks German as well as Spanish, which he learned while living in Chile for a year with his parents as a child. He still lives on the Upper East Side, though he declined to name his building. In his early twenties, just out of college, Burger started working at a small Upper East Side real estate firm that he said is no longer in the residential brokerage business. In 1984, he did his first deal, selling a two-bedroom on East 77th Street for $112,500. At the time, listing information was stored on index cards, and fledging brokers were expected to memorize the floor plans of units in the city’s best buildings. “When I started, you had to understand each and every building and each and every layout very well,” Burger recalled. “You had to study it and commit it to memory because you couldn’t just whip out an iPad.” In particular, Burger focused on the work of J.E.R. Carpenter and Rosario Candela, whom he called “the two great architects of prewar New York.” That turned out to be good training. He’s currently marketing a full-floor apartment at the Carpenter-designed 640 Park Avenue for $26 million, and has a $20 million listing for a five-room spread at Candela’s 765 Park Avenue. And thanks to all that memorization, Burger said he can often match clients with the right apartment without having to search online. “Today, most people need the computer in order to make the match,” Burger said. “I can make the match in my head.” It took a while for that knowledge to pay off, however. In

1988, Burger was hired at BHS, which then had only around 30 brokers. “I’m certain that during the first 10 years, there were secretaries at Brown Harris Stevens that made more money than I did,” he said with a laugh. But over time, small deals led to bigger deals. “We all started at lower price points and, along with our clientele, we graduated to higher price points,” Burger said. “The apartment that today is $15 million, when I started, was $2 million.” Case in point: Burger’s very first client — the one who bought that two-bedroom on 77th Street — is planning to put his Park Avenue penthouse on the market with Burger in April for $14 million. And the 944 Fifth Avenue apartment he sold in December for $50 million? “I’m very proud that, 14 years ago, I was able to find that apartment for that seller,” Burger said, though a confidentiality agreement prevents him from talking about the specifics of the recent megadeal. “I recommended that he buy it, and it turned out to be a superb investment.” Willkie noted that Burger has a knack for earning — and keeping — clients’ loyalty. “They talk to their friends and say, ‘You’ve gotta do John Burger.’ ” Willkie said. “That’s what happens over time with a professional, very talented broker,” he added. “It really snowballs.”

A powerful patron Snowball or not, most brokers don’t have William Lie Zeckendorf in their Rolodex. Zeckendorf is best-known as the codeveloper, with his brother Arthur Zeckendorf, of the undeniably successful 15 Central Park West, which famously sold $2 billion worth of condos, more than any other development in the city’s history. But he’s also one of the owners of Terra Holdings, which acquired BHS in 1995. And more recently, he made headlines with an epic series of personal property flips: In 2010, Zeckendorf sold his penthouse at 15 Central Park West for a record-setting $9,940 per square foot, or $40 million, then bought a full-floor apartment from the estate of the late financier Bruce Wasserstein at 927 Fifth Avenue for $29.1 million. A short time later, Zeckendorf listed the 927 Fifth apartment with Burger. It sold for $34.6 million to the Bommers,

who Burger had worked with at 1060 Fifth. Zeckendorf then paid $27 million for a 17th-floor apartment at Candeladesigned 740 Park Avenue, a deal in which sources say Burger represented him, though Burger declined to comment specifically on any of Zeckendorf ’s personal transactions. Burger did say, however, that Zeckendorf has been a client of his for “many years, even before he was the principal of our firm.” Sources noted that Zeckendorf does not work exclusively with Burger. For example, broker Richard Wallgren, who was director of sales at 15 Central Park West during its initial sell-out, listed Zeckendorf ’s penthouse there. (Wallgren was a BHS broker at the time; he is now an executive vice president for sales at Macklowe Properties.) Still, brokers said Burger is viewed as the Zeckendorfs’ “favorite,” not only handling their deals but being recommended for other plum listings. In recent years, Burger’s “relationship has improved with the Zeckendorfs,” said one broker, speculating that the connection is one reason Burger has so many more big-ticket deals than other brokers. “I think John’s a great broker, but there are other brokers just as capable.” “When you have a certain level of seniority and perspicacity, very often people seek you out for the level of experience you bring to the transaction,” said Burger is response to such statements. “That’s probably one of the reasons I’ve had the good fortune of being successful.” He added: “Brown Harris Stevens has been very good to me.” TRD

Follow The Real Deal on Twitter: twitter.com /trdny www.TheRealDeal.com February 2013 101

Residential market

from page 16

majority of decisions have swung towards the purchase market,” he said, pointing to falling mortgage rates and rent increases. In the rental market, Citi Habitats’ fourth-quarter market report noted that the average Manhattan renter paid 5 percent more for a rental in 2012 than at the same time the year before, with rents increasing to $3,412 from $3,248. However, despite the yearly increases, pric-

es in the rental market softened slightly compared to the third quarter, as TRD previously reported. Indeed, average Manhattan rents were down 3 percent from the third quarter. Meanwhile, Brooklyn rents rose, with median prices increasing 1.4 percent in December 2012 from December 2011 to $2,637 from $2,600, according to Miller Samuel’s data.

Inventory also remains a problem on the rental side, the Citi Habitats report found. “While there are several large rental developments in the planning stages, there is little new product in the pipeline for this coming year,” the report said. “This is likely to further increase demand on an already tight marketplace.” TRD

“I think the question becomes, what other alternatives do individual investors have?” said Roschelle. “If they want to invest in a dividend-gaining stock and they decide they like REITs because of the predictability of dividends — versus an industrial company, where dividends might not be as predictable — I think they’re still going to gravitate toward REIT stocks.” Meanwhile, despite talk last year of ending the tax break on primary-home sales, profits of up to $500,000 (depending on marital status) from those sales remain tax-free. Plus, for commercial owners, the 15-year write-off

for physical improvements on properties was extended for properties coming online through 2013 and made retroactive to include 2012 improvements as well. Ultimately, the implications of the fiscal cliff deal pale in comparison to previous major tax changes, especially those in 1986, experts said. “I don’t see a major shift in behavior or a sentiment shift away from the real estate asset class because individual investors are paying marginally higher taxes,” Roschelle said. “I don’t mean to trivialize 5 percent,” he added, “but I don’t think it’s a big enough tax reform to change behavior.” TRD

Are you religious? I’m very religious. I keep kosher, but I don’t go to temple because it doesn’t fit in my schedule. I’m very spiritual. I pray every morning. I have the bible in my car and at my house. I have on my phone a chapter from Tehillim [a Hebrew book of Psalms].

derstand them when they happen. What we see right now is only a chapter. The truth will come and everybody will understand. … I was sad to hear the stories, but inside I believe in the rabbi.

Taxes from page 18 change rules to defer their taxes,” said Shahab Moreh, head of real estate services at accounting firm WeiserMazars.

Too small for change In other areas of real estate, however, tax changes may have little impact. Like other dividend-producing stocks, earnings on real estate investment trusts, or REITs, are subject to the higher capital-gains rates, so some investors might pull back to avoid the higher rates. But analysts said the singledigit-percentage increases will likely not dissuade many from investing in REITs (see related story on page 36).

Closing from page 114 How did you meet your Stonehenge partner, Joel Seiden? I met him when I was a broker. I brought a buyer to a deal and he was the seller. He was a big owner in New Jersey. One year later, I was walking down the street and I ran into him. He was coming out of his Rolls-Royce. He said to me, “Hey, Ofer, what are you doing?” I said, “I’m going to open my own company.” He said, “Let’s do it together.” I don’t think with Joel it’s a matter of money. He’s a wonderful human being, and we’d connected very much on a spiritual level. The fact that we’ve made a lot of money only helps.

You were one of Rabbi Yoshiyahu Pinto’s well-known followers. What was that relationship like? I loved the rabbi dearly. Other than my wife and my partner Joel, he was the person who helped me be where I am. … He helped me become a better husband, a better father and a better leader in my community and in my company. In my early 40s, when I was making so much money, I started to think I was God’s gift. … The rabbi was able to show me that the most important thing in my life was my wife, and the reason I succeeded was because of my wife.

What was your first acquisition? I bought the note on 240 West 72nd Street for $400,000 [in 1995.]. It was a small building that was being foreclosed on. I kept it for a long time, but decided to sell in 2003. I wanted to show everybody that worked in my organization that you don’t fall in love with real estate. I didn’t want to be too attached. I sold the building for $3.5 million, which was a great return. But I must admit that the day after I sold it, I called the buyer and asked if he’d sell it back to me.

How do you feel about his arrest? Sometimes there are things that happen and we don’t un-

Who are your heroes? There are two people who’ve influenced my life who I’ve never met: Michael Jordan and Madonna. Michael Jordan was able to achieve the highest levels in basketball. Madonna is my age and look how she was able to transform herself from one style to another style to another style. Thank God I never met them. If I met them, I would see all their flaws and realize they’re the same as you and I. What hobbies do you have? In the summer, I cycle. I will go out and ride 20, 30, 40, 50, 60 miles with groups of 10 or 20 guys. I play golf sometimes, but I recently decided that I’m only playing up to 80 strokes. I reach 80 shots and I leave. Why would I play more than 80? For me, there is life more than just chasing a ball. By Katherine Clarke

C O R R E C T I O N S A N D C L A R I F I C AT I O N S January story “Retail records” incorrectly stated that Nord- Swift owns homes in St. Barts and in the Hamptons. She

The Real Deal mistakenly included the apartment build-

strom had signed on to take space at Extell Development’s vacations in those places, but does not, in fact, own homes

ing at 208 West 96th Street in last month’s “On the

residential tower One57. In fact, the company will take retail there. In addition, The Real Deal incorrectly reported that

Market” section. In fact, the property is no longer on

space at 225 West 57th Street, another mixed-use project Swift had represented the buyer in a deal for three units

the market.

by Extell. In addition, the story and chart failed to note that at 965 Fifth Avenue. In fact, she represented the seller. the retail deals included were for transactions below 96th

In the November story “Who rules in hospitality?” The Real

Street on major corridors tracked by Cushman & Wakefield In the January story “Does it pay to give?” The Real Deal

Deal incorrectly stated that Pebblebrook Hotel Trust was

and the CBRE Group. Also, The Real Deal incorrectly stated incorrectly stated that Brown Harris Stevens broker Kyle

the fifth-largest hotel owner in Manhattan south of 96th

the value of Vornado’s deal for a retail condo at 666 Fifth Blackmon was previously a member of the board of Carn-

Street. The credit for Pebblebrook’s hotel rooms should

egie Hall. In fact, he is a member of and donor to Carnegie

have gone to Denihan Hospitality Group, the company’s

Hall who has been involved in the organization’s Real Estate

partner, according to TRD’s methodology. The two are also

Avenue. The correct figure is $707 million.

In the January story entitled “The Closing with Michele Klei- Council, but he has never been on the board.

partners on several other hotels that have been added to

er,” The Real Deal incorrectly stated Kleier’s address as

the story. With the exception of the Surrey, Pebblebrook An article in last month’s issue titled “Blu realty gets new

technically has a 49 percent stake in all of Denihan’s listed

division” incorrectly stated that a new development Blu Re-

hotels, though it does share control and decision-making

In the January issue story “A ‘Swift’ takeover,” The Real alty Group is marketing in London will have 12 units. The

with Denihan equally. The story and chart have been updat-

Deal incorrectly stated that Douglas Elliman broker Joan building is in fact slated to have 248 units.

ed online to reflect that.

1120 Park Avenue. In fact, she lives at 1125 Park Avenue.

102 February 2013 www.TheRealDeal.com

www.TheRealDeal.com January 2012 00

Lawsuits from page 50 (It’s unclear whether the plaintiffs in this case had the insurance.) The suit claims that Extell, Lend Lease and Pinnacle failed to properly prepare and secure the crane before the storm, as well as to safely maintain and operate it. It cites numerous city fines issued in the months leading up to the incident. In April, Pinnacle was fined twice for operating the crane in an unsafe manner and for failing to safeguard the property. Then, in August, Pinnacle was fined again because the crane was leaking hydraulic fluid, court documents said. The complaint said that the crane collapse forced the office to close for the first time in 30 years. It did not specify how much business was lost. Court documents also state that Musikant’s personal hotel bill at the New York Athletic Club totaled $3,400

because he was also forced to evacuate his nearby home. Joseph Marchese of the law firm Bursor & Fisher, who represents the dentists, said that although the case is still in its early stages, he believes the real estate industry will follow it closely. James Fenniman, an executive vice president at Bollinger Insurance, said these kinds of lawsuits “put more pressure on the insurance market [because] it blows away underwriters’ willingness to participate [in future construction projects involving cranes].” Insurance carriers, he explained, become hesitant to cover crane operators and contractors when cases are filed. That, in turn, means that contractors have to take “very high deductibles” at the outset of their projects to ensure that they have adequate coverage, he said. And insurance costs are already very high, Fenniman explained. On con-

struction sites, insurance costs for cranes can cost millions of dollars, he said. However, Fenniman said developers, contractors and crane operators won’t necessarily see insurance rates rise because of the One57 incident. There would have been more of an impact on insurance rates industry-wide if the incident had happened on “a dry, clear day,” Fenniman said. Bailey — who has no connection to this case — said the case against One57 is “ridiculous” and “gives a bad name to lawyers.” He predicted it would settle quickly and the insurance companies, not the developers, would end up eating the settlement payment. Lend Lease declined to comment on the lawsuit, while Extell and Pinnacle did not respond to requests for comment. TRD

it with Corcoran Sunshine. (Finn did not return calls for comment.) The consolidation was prompted by the lack of new rental product coming online in the next few years, Liebman said. Citi had very little new development business remaining when the division was discontinued, with the majority of its projects already leased up, Malin added. “The rental pipeline in New York City has drastically changed,” Liebman said. “The decision was made moving forward that we probably needed to look at having one division. There is not a need for a large-scale new development division at Citi Habitats at this time.” She and Malin declined to comment on Citi Habitats’ new development revenue in 2012, but said volume was down significantly from 2011. “The division was scheduled to lose money,” Liebman said. Citi does not plan to hire new people to fill any of the 10 spots emptied by the closure of its new development arm, Liebman said, and the firm has already seen an “immediate, direct positive impact” to its bottom line as a result of the consolidation. Malin also cited a trend toward developers marketing rental projects in-house. “Related does its own business, Glenwood does its own business, Rose Associates hires itself,” he said. But other new development marketers said they are doing more rental business, not less. Stephen Kliegerman of Terra Development Marketing said he was not familiar with Citi Habitats’ strategy, but noted that Terra is seeing an increase in rental business. “We’re more active in rentals than we have been in the last seven years,” said Kliegerman, who said Terra is in discussions to bring more than 2,000 rental units to the market over the next two years. “We’re actually beefing up our rental presence.” When it came to new developments, Citi had a unique model that may have impacted its ability to attract new business, sources said. Citi landed development marketing contracts by charging developers lower upfront fees than other firms, said Andrew Barrocas, a former Citi Habitats agent who is now CEO of the brokerage MNS, which has competed with Citi for new development marketing projects. Citi was able to make up the difference by

spreading the word about these projects primarily to their in-house agents, then benefiting from a steady flow of commissions. “What they were taking jobs for was far less than what we were able to take them for and have it make sense,” Barrocas said. But paying those brokers’ fees could be costly for developers, he noted. “They’re able to go in a little bit less expensive on the front end, but it ends up costing the developer more in the long run,” Barrocas said. Malin declined to comment on Citi’s fees for new development marketing.

Citi Habitats from page 65 been on the rise at both firms, she said. In regards to the two recently closed Citi Habitats offices, Liebman called that move a “strategic business decision” and said the company is already looking to replace them with new, larger spaces in other locations. She noted that it made little sense to have two retail locations in such proximity to Citi’s corporate headquarters at 250 Park Avenue South.

“It’s not a plan that we would ever follow again, opening small offices in street-level locations,” Liebman said. “Financially, it simply doesn’t work. You need a certain mass of people, and you can’t get that in these small retail locations.” Insiders agreed that consolidating the spaces is likely a smart financial move, but also speculated that the decision may have been prompted by the rush to show “short-term profitability” in the run up to Realogy’s IPO. Malin denied that the IPO impacted the decision, however. For his part, Golub said he left his position as Citi’s rental director “on great terms,” and his departure was motivated simply by a desire for a change of scenery. “If you were to talk to 100 people,” said Golub, “how many do you think would have been at the same company since college? Not many. I’d be one of them.” But the departure of longtime veterans like Golub can have something of a snowball effect, industry insiders said. Some former Citi brokers said they’d felt loyal to Golub and that he was a big reason they stayed at the company as long as they did. Now that he’s gone, “there have to be some Gordon loyalists who now don’t have much reason to stay,” said one source. Liebman and Malin said they were saddened by Golub’s departure, and that the door is always open for him to return to Citi.

New development Citi underwent another major shift in October, when Finn and his team of nine agents left to join Douglas Elliman. Liebman said their departure followed a decision to eliminate Citi’s new development team and consolidate 104 February 2013 www.TheRealDeal.com

Dual identities In addition to these shifts, Citi has tweaked its image several times. Aiming to change its rentals-only reputation, Citi Habitats in 2010 renamed its sales division, calling it “CitiSales” — but that name no longer appears to be in use. And last fall, Citi unveiled a new logo and branding materials, ditching its longtime blue-andwhite color scheme for black and white with touches of yellow, with the slogan “Sales + Rentals. Knowledge + Guidance.” Liebman said the rebranding is an attempt to emphasize Citi Habitats’ dual focus. “Some people would say that [Citi is] a victim of its own success in rentals,” she said. “Part of our rebranding campaign was bringing to more people’s attention that Citi is not just the city’s top rental company; it is a company that is successful in both sales and rentals.” Ultimately, industry insiders said, that duality may be at the core of the firm’s problems. Citi Habitats has “an identity problem,” said Bellmarc Group President Neil Binder. “It doesn’t know what it wants to be. It started out as a strong rental company and then it tried to get into the sales side. It gave mixed messages to the market, and that impaired it.” Ramping up sales at Citi Habitats is also a priority for Golub’s successor, Peter Sobeck, who previously led a training and coaching program for sales managers at NRT. Sobeck told TRD he plans to leverage Citi’s “heavily weighted rental platform” to increase the company’s sales. Meanwhile, Malin said he isn’t worried about the direction of the company, which has just come off its strongest sales year in history and a busy year in rentals. “We transact with more people in New York every year than any other firm by a landslide,” Malin said. “Those facts speak for themselves.” TRD www.TheRealDeal.com January 2012 00

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The Historic District Council presents a “Monday Morning Coffee Talk” with Elizabeth De León, a deputy commissioner at the New York City Department of Small Business Services. Discussion topics will include the creation of business improvement districts and the Avenue NYC Program, which provides funding to nonprofit economic development organizations. The Neighborhood Preservation Center, 232 East 11th Street. 8:30 to 10 a.m. Free. Information and registration: www.hdc.org.

3 4 5

The Association of Real Estate Women hosts a luncheon featuring guest speaker Rob Speyer, president and co-CEO of Tishman Speyer and chairman of the Real Estate Board of New York. Club 101, 101 Park Avenue. 11:30 a.m. to 2 p.m. Fee: Free for AREW members, $100 for other CREW chapter members, $120 for nonmembers. Information and registration: www.arew.org.

The Platypus Affiliated Society presents “Ruins of Modernity: The Failure of Revolutionary Architecture in the Twentieth Century,” with speakers Peter Eisenman, design principal of Eisenman Architects; Reinhold Martin, associate professor of Architecture at Columbia University; Joan Ockman of the University of Pennsylvania School of Design; and architect Bernard Tschumi. New York University Kimmel Center, 60 Washington Square Park. 7 to 10 p.m. Free. Information and registration: newyork.platypus1917.org.

7 8 9 10

Professional Women in Construction hosts a “Developer’s Forum” moderated by New York Post columnist Lois Weiss. Speakers will include Faith Taylor, senior vice president of Wyndham Worldwide, and Brett Mehlman, COO of Senior Care Development. General Society of Mechanics & Tradesmen of the City of New York, 20 West 44th Street. 8 to 10 a.m. Fee: $75 for members, $85 for nonmembers. Information and registration: www.pwcusa.org.

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New York University’s Schack Institute of Real Estate hosts its sustainable real estate conference, “Big Data and Disruptive Innovation: Is the Real Estate Industry Next?” Speakers will include Jed Kolko, chief economist and head of analytics for Trulia, and Claudio Silva, professor of computer science and engineering at NYU. New York University Kimmel Center, 60 Washington Square Park. 8:45 a.m. to 4 p.m. Fee: $85. Information and registration: www.scps.nyu.edu.

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CapRate Events presents a “Gold Coast Investment Summit,” focusing on office, retail, multi-family, industrial, hotel and mixed-use opportunities. Guest speakers will include Mitchell Hersh, president and chief executive officer of Mack-Cali Realty Corporation, and Kurt Eichler, executive vice president at LCOR. Maritime Park, 84 Audrey Zapp Drive, Jersey City. 7:45 a.m. to 1:10 p.m. Fee: $185. Information and registration: cre-events.com/goldcoast.

Real Estate Weekly presents a “Women’s Forum” with keynote speakers Mary Ann Tighe, CEO of the New York Tri-State region for CBRE, and Trepp CEO Annemarie DiCola. McGraw-Hill Conference Center, 1221 Avenue of the Americas. 7 a.m. to 4:30 p.m. Fee: $349. Information and registration: www.rewomensforum.com.

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CapRate Events hosts its second-annual “Greater New York Data Center Summit & Expo,” featuring 10 panel discussions aimed at informing executives with the necessary market intelligence and networking opportunities for new business development in today’s environment. Speakers will include Brian Doricko of Digital Realty Trust and John Sabey, president of Sabey Data Centers. New York Bar Association, 42 West 44th Street. 7:30 a.m. to 4:45 p.m. Fee: $199. Information and registration: cre-events.com.

Green Pearl Events presents the “Marcus & Millichap Multi-family Forum New Jersey,” focusing on the acquisition, disposition, financing and management of multi-family properties in the greater New Jersey area, with a special emphasis on the political environment, trends in rents and operations, as well as a discussion of cap rates, financing and interest rates. The keynote speaker will be David Barry, president of Ironstate Development. Hilton Parsippany, 1 Hilton Court, Parsippany, N.J. 8:30 a.m. to 4:30 p.m. Fee: $395. Information and registration: www.marcusmillichap-multifamilyforum.com.

108 February 2013 www.TheRealDeal.com

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The Real Estate Board of New York hosts a “Residential Management Leadership Breakfast,” where the awards for Residential Management Executive of the Year will be presented. The Roosevelt Hotel, 45 East 45th Street. 8:30 to 10 a.m. Fee: $75. Information and registration: www.rebny.com.

27 28 www.TheRealDeal.com August 2006 00

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One of the brokers listing Russell Simmons’s penthouse at 114 Liberty Street for $11 million, David ____ One of the brokers who sold Kiefer Sutherland’s townhouse on Greenwich Street, ____ Blumstein Investors don’t like to ___ a property to the bank Snap up, as in a good real estate deal Halstead’s Eva Penson wore one designed by Wolford in a recent WSJ photo shoot for a story about fashion at the firm ___ venture ___ King Blues Club & Grill A soon-to-open library branch in Queens recalls this architect’s Modernist style, TRD critic James Gardner says A requirement of the Domino Sugar redevelopment plan: 3.2 acres of ____ space An expected increase in capital gains ____ led to a spike in sales volume in late 2012 A North Carolina vacation destination,

Ocean ____ Beach 21 Douglas Elliman broker who has the listing for the Upper West Side “Kleeberg Residence,” David ____ 24 A much anticipated rezoning is being debated for the eastern portion of this area, ____ town 26 Hedge-funder who bought Oprah Winfrey’s penthouse at 207 East 57th Street, Mark ___ 27 Type of kitchen (2 words) 29 Zip ___ 31 Recently leased the former Mars Bar space on the Lower East Side, ___ Bank 32 Broker listing Alicia Keys’ Soho triplex, Eric ____ of Sotheby’s 35 News anchor who purchased a 30-acre horse farm in Water Mill, N.Y. (last name) 37 Rental contract 38 Ancient architectural style 39 Hip-hop star who listed his $8.5 million apartment last year 40 The real estate company that paid $158 million to Dermot Property Associates for a 10-building portfolio

Down Actor who sold his West Village townhouse at 14 Saint Luke’s Place 2 Name of the Englewood, N.J., estate previously owned by Eddie Murphy (2 words) 3 The Douglas Elliman team that brokered the sale of “Real Housewives of New York” star Kelly Bensimon’s East Hampton home 4 NYC time 5 Attorney letter start 6 First name of 35 across 7 Home to Nassau and Suffolk (abbreviation) 8 Tech giant that secured new office space at 11 Times Square 11 Retail stand in a mall 12 Deutsche Bank CEO, Anshu ___, who recently purchased a $7.2 million apartment at One Beacon Court 14 East Village developer and landlord, ___ Shaoul 1

17 “Law & Order” star who put his Park Imperial home on the market last year 19 Roman 12 22 One of the Sotheby’s brokers who colisted Jessica Chastain’s co-op at 250 Mercer, Rachel ____ 23 The Big Apple or Gotham 24 One of the Sotheby’s brokers listing Sarah Jessica Parker’s Greenwich Village townhouse, Stephen ____ 25 Prevent 28 Nickname of one of the Beastie Boys who sold his Soho townhouse for $5.5 million 30 As well as 32 One of 2012’s priciest residential sales, a $31.5 million apartment at 1030 Fifth Avenue that has two _____s’ rooms 33 Green certification 34 Hardwood tree 36 Bathroom with no shower To see the solution, visit www.TheRealDeal.com.

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COMINGS & GOINGS Brick&Mortar becomes latest firm to tap Williamsburg market

n aptsandlofts.com alum has struck out on his own, opening a new firm in Williamsburg. Residential and commercial brokerage Brick&Mortar opened its doors last month in a 1,250-square-foot space at 135 North 7th Street, “a stone’s throw” from the Bedford L train stop, the epicenter of life in the hipster haven, founder Rolan Sereny told The Real Deal. The nine-agent firm will focus on retail leasing and residential sales and rentals, Sereny said. In the coming months, he expects to expand the firm to 16 agents. Sereny, who worked for six years in the Williamsburg office of new development marketer aptsandlofts.com, owns Brick&Mortar with his father, Peter Sereny. The younger Sereny decided to start his own firm, he said, to take advantage of the bevy of new projects currently under construction in the neighborhood. “There are 37 new-construction projects in Rolan Sereny at Brick&Mortar’s new office in Williamsburg Williamsburg,” he said, noting that he is already in talks to become the exclusive marketer of one such development. Sereny said he hopes to set the new firm apart from other companies by creating a relaxed climate in the office. “We wanted to flip the script on how real estate offices are set up,” he said. “Instead of sectioning off the agents, we [gave it] an open loft, living room feeling. It’s very warm and inviting.” Already, the firm has done deals such as the $1.18 million sale of a penthouse at the Lucent condo on North 11th Street. By Guelda Voien

Empire building with I&I New York

am here to build an empire,” said Eyal Amir, the Israel-born founder of new brokerage I&I New York Real Estate. Indeed, his newly launched, eight-agent commercial and residential firm has a militaristic bent. Amir, a veteran of the Israeli army, said that experience informs how he trains his agents. All new recruits are subject to I&I Boot Camp, an intensive training program that emphasizes punctuality, neatness and dependability. For example, he said, “listing brokers will work according to our schedule, not their schedule.” Amir first arrived in New York five years ago, initially making ends meet by tending bar. He worked at Miron Properties and at the rental firm Metropolitan Property Group before launching From left: I&I’s Aviad Cohen, director of leasing; Danielle I&I late last year. The name expresses the “one is Rantapaa, managing director; and Eyal Amir, principal broker and all and all is one” ethos of the company, Amir said. managing director I&I specializes in buying and selling off-market multi-family properties, an asset class that has seen growing demand in recent years, Amir said. In particular, I&I will look to court international buyers, with whom Amir said he has existing relationships. The firm, which Amir hopes will expand to 50 agents by the end of the year, will also handle residential sales and rentals. The company’s first office is a 750-square-foot space at 419 Lafayette Street in Manhattan. By Guelda Voien

Mark David winds down its business, founders join Town Residential

ith its founders joining Town Residential, the boutique real estate firm Mark David & Company said last month it will wind down its business. The cofounders, CEO Mark David Fromm and COO Claudia Saez-Fromm, have joined Andrew Heiberger’s expanding brokerage as senior vice presidents. Heiberger told The Real Deal that the married duo had sought out a partnership with Town in order to better leverage their firm’s sales acumen. Mark David has primarily been known as a rental brokerage, he said. “This is a decision of strength,” he said, “not of weakness.” Town director of operations Matthew Van Damm said the firm will meet with each of Mark David’s agents to “determine the best course of action.” Some agents will be recruited to Town, while others, particularly those who are interested in Mark David Fromm and Clau- specializing in rentals, will be assisted in their search for spots at other firms. dia Saez-Fromm Fromm will be based out of Town’s Astor Place office, while Saez-Fromm will work out of the company’s Flatiron District office. By Katherine Clarke 112 February 2013 www.TheRealDeal.com

BROKER EXCHANGE Residential Brown Harris Stevens Linda and Dennis Stillwell joined the firm from the Corcoran Group. Both were hired with the title of senior vice president and director. Their team member, Tate Kelly, joined the firm as a real estate salesperson.

Citi Habitats Elisabeth Foriel joined the firm from Town Residential as a senior associate and salesperson. Ashley Ungerleider was hired as a salesperson from Mark David & Company.

Commercial Avison Young Anthony LoPresti joined the firm as a senior vice president from the CBRE Group, where he served as an associate. Cassidy Turley Rod Bailey was hired as senior managing director of brokerage services from Colliers International, where he was executive managing director. Drew O’Connor joined the firm as managing director of property management. He was previously managing director and senior portfolio manager at Cushman & Wakefield. Coldwell Banker Commercial Alliance April Michelle Simmons joined the firm as marketing director. Previously, she was a client support specialist for Lexis Law Firm Marketing Solutions. Evan Elias was hired as a senior financial analyst. He previously held the same position at Cushman & Wakefield. DLA Piper Joseph Philip Forte joined the firm’s real estate practice as a partner in New York. Previously, he was a partner in the global finance and debt products group at Alston & Bird. Duane Morris New York partner Chester Lee has been named cochair of the firm’s national real estate practice group, along with Philadelphia-based partner George Kroculick. GFI Management Services Jeffrey Adler has been appointed president. He was previously chief property operations officer at AIMCO, a Denver-based apartment REIT. The Heller Organization Nicholas Nakos joined the firm as vice president of investment sales. Previously, he was director of acquisitions at Napco Holdings. Houlihan Lawrence Garry Klein joined the firm as an associate broker in the company’s newly established commercial real estate group. He was previously at Prudential Rand Realty. Stonehenge Partners Ofer Yardeni, previously managing partner at the firm, is now cochairman and CEO. Eyal Reggev joined the company as strategic advisor to the CEO. Previously, he served as CEO of the Habas Group.

Compiled by Andrea Cetra

Become a fan of The Real Deal on Facebook: www.facebook.com / TheRealDealMagazine

Turtle power

Nightlife impresario Eric Goode to host Bowery Hotel benefit for endangered species

Goode’s in Ojai, Calif., that now serves as a captive breeding and management facility for over 700 endangered turtles and tortoises.

Eric Goode at the Behler Chelonian Center in Ojai, Calif.

This past year in particular, Goode said his conservation work has taken up much of his time and he’s had to lean heavily on his business partners, Richard Born, Sean MacPherson and Ira Drukier. (While he was tight-lipped

Real estate pros work it at Fashion Week Runway shows provide opportunities for exposure, networking

or many New Yorkers and out-of-town visitors, this month’s Mercedes-Benz Fashion Week is a chance to mingle with celebrities and scope out the hottest red-carpet looks for the fall. But for some real estate brokers, the Lincoln

Elliman broker Lawrence Rich with designer Betsey Johnson at a fashion event

Center–based event is an important source for business leads. “I’ve gone balls to the wall each [Fashion Week] for the last few years,” said Ryan Serhant, a Nest Seekers International broker and star of “Million Dollar Listing New York.” Serhant currently has a $3.95 million listing at 61 West 62nd Street across from Lincoln Center, and he’s planning to host a Fashion Week–themed party there. The glitz and glamour of Fashion Week is helpful for marketing properties, he said. “Anyone who has a listing near Lincoln Center who is not utilizing [Fashion Week] for exposure is a moron,” said Serhant, who also did a stint as a runway model last year during Nolcha Fashion Week, a showcase for independent designers. Runway shows are also good places to network, brokers said. Jeff Gardner, a Corcoran Group broker who previously worked as a stylist and photographer, said he has a number of clients who work in the fashion industry. To keep up those

A broker who listens differently Deaf Elliman agent featured in new book

hen Jackie Roth, then an actress and public relations consultant, decided to try real estate seven years ago, she approached a manager at a large city residential brokerage. He told her that she simply wasn’t cut out for the business. Sure, Roth was whip-smart, a hard worker and a skilled communicator. But, the manager reasoned, she was also deaf. “I said, ‘I have ways to overcome that — I have technology, tools and I’m good at what I do,’ ” recalled Roth, who reads lips and speaks with only a hint of an accent. The manager still discouraged her, but Roth was undeterred. In 2005, she joined another brokerage, Douglas Elliman, where her recent successes include the $2.9 million sale of a three-bedroom condo at 200 Chambers Street in Tribeca. Roth is also among those featured in “Far from the Tree,” a new book by author Andrew Solomon. The book

PHOTOGRAPH OF GOODE BY KATE SIMON

WE HE AR D

▼

s the owner of hip hotels, nightclubs and restaurants in New York City, Eric Goode is used to being in the limelight. But it took him years to come out of his shell about a personal passion for turtles and tortoises. “Ever since I was a child, I’ve had a love affair with the natural world, and especially with cold-blooded creatures,” said Goode, who is co-owner of the Jane, Bowery and Maritime hotels and also the founder of the Turtle Conservancy, a nonprofit organization that aims to protect endangered turtles and tortoises. After nudging from supporters, Goode has agreed to throw the Turtle Conservancy’s first-ever benefit this month at the Bowery Hotel. Dubbed “the Turtle Ball,” the star-studded event will be emceed by comedian and actress Sandra Bernhard. Organizers include bold-face names like Graydon Carter and Gretchen Mol. “We’re going to make turtles supercool,” laughed Goode, who made a name for himself in the 1980s with the Downtown Manhattan nightclub Area. Goode, who has been involved in conservation for years, founded the Turtle Conservancy in 2005. The group runs the Behler Chelonian Center, a former vacation home of

about upcoming real estate projects, Goode confirmed that the partners’ long-delayed 185-room hotel project at 180 Ludlow Street is well underway.) But Goode said his conservation work has a positive effect on his business. The Turtle Conservancy’s “Tortoise” magazine is distributed at his hotels; “It’s amazing how many e-mails I get from people who stay there and like that the owners are conscientious,” Goode said. And there is some overlap between real estate and conservation. Goode is currently looking to buy and conserve a large parcel of land in North Central Mexico, an area that is home to many endangered tortoises and turtles. A number of real estate industry players are expected to attend the Turtle Ball, including hoteliers Vikram Chatwal and Ian Schrager and developer Aby Rosen. Goode said he’s been pleasantly surprised by the outpouring of support from colleagues. “I’m really appreciative,” he said. “I honestly never thought I’d be bringing people from the real estate world into my turtle world.” By Lucy Cohen Blatter

explores raising children with appreciable differences due to deafness, mental illness or other reasons. In the book’s section on deafness, Solomon chronicles Roth’s upbringing as the daughter of two deaf parents who felt limited by their hearing impairment. If her now-deceased parents “knew what I was doing today,” Roth said, “they would never have believed it possible.” Solomon has known Roth since the early 1990s, when she provided him entrée into the deaf community for a New York Times Magazine story Elliman’s Jackie Roth he was writing. Of Roth’s career in real estate, Solomon told The Real 112 May

relationships and to cultivate more, he makes sure to go backstage at a couple of runway shows each year. “Business cards are passed within 10 seconds,” Gardner said. “It’s an easy form of networking for me, and it’s enjoyable.” Of course, Fashion Week also gives real estate brokers ideas for their personal wardrobes, which is important in a sales-based business. Douglas Elliman’s Kane Manera, formerly an actor on TV’s “Guiding Light,” can regularly be found in the front row at runway shows. “Real estate is sales, and sales revolve around presentations, and that’s looking good,” said Manera, whose go-to look is a suit by Ralph Lauren, Zegna or Canali, complemented with a Hermès tie. Douglas Elliman senior vice president Lawrence Rich, the former cohead of the Rich Levy fashion label, said he attends as many shows as his schedule permits. He’s met a number of potential clients at fashion events, he said, but Fashion Week is also a fun way to keep in touch with old friends. “Once you’re a fashion person,” Rich said, “you’re always a fashion person.” By Zachary Kussin

Deal, “Jackie has so much self-confidence that she has the courage to go into a field that might have looked closed to her. I really do think it’s her personal warmth and intelligence that capture people; she could sell me the Brooklyn Bridge, and I’d leave a happy guy.” And Roth said that her hearing impairment can actually be an advantage in the real estate business. For one thing, her deafness has heightened her ability to read people visually. “When I do open houses, when someone walks in who really, really loves the space, I know that,” Roth said. “Their face, their eyes — they don’t have to say anything.” By Gabrielle Birkner www.TheRealDeal.com February 2013 113

THE CLOSING

WITH OFER

YARDENI Ofer Yardeni is the cochairman and CEO of Stonehenge Partners, a Manhattan-based real estate company that owns and manages 27 residential buildings and commercial properties in New York valued at roughly $2.2 billion. Yardeni formed the company 18 years ago with his business partner, Joel Seiden. But the company has been especially active lately. Last spring, Stonehenge partnered with SL Green Realty and retail mogul Jeff Sutton to buy a $416 million retail and residential property portfolio that includes eight prime Upper East Side properties. More recently, Stonehenge bought a residential building at 103 East 86th Street for $76 million in November. The company is also converting a former staff-housing site at St. Vincent’s Hospital into a 180-unit luxury residential building at 555 Sixth Avenue.

What’s your full name? Ofer Jacob Yardeni, but my wife calls me “the Big ‘O.’ ” What’s your date of birth? March 6, 1960. I’m a Pisces. Do you believe in star signs? Absolutely. [Pisces] is the only sign that has two animals; it’s two fish. For me, it’s about being able to … move and go with the flow [like a fish]. When I meet people, I always ask them when they were born. Where did you grow up? In Israel in a town called Bat Yam. It’s on the Mediterranean, south of Tel Aviv. It’s like Queens to Manhattan. What did your father do? He was a steelworker. If you asked my kids, they would say, “You were poor,” but growing up, I felt I was the richest boy in the world. I did not miss anything. I had my ocean. My mother made me cakes and the best food. We felt we were the happiest, best family in the world. I talk to my dad once or twice a day still. He lives in Israel. My mother passed away. Did you finish high school? [Yes, but] I was kicked out. The reason was that in the morning on my way to school, the school was to the right and the beach was to the left. I used to go to the beach. I had a bathing suit in my school bag. The new school I went to was like the reject school. On the first day, my mother, who was a professor, cried. But I thought it was the happiest school. Why did you decide to move to the United States? I was studying history at Tel Aviv University. When I was getting ready to graduate, I realized that I would have to work, but I wasn’t ready. I was watching a movie called “Animal House,” and I saw the life of American students on campus. I said, “That’s where I want to go.” I came to study Middle Eastern Studies at NYU. I thought I would just come to the United States and have some fun and then go back to Israel and become a teacher or a professor.

114 February 2013 www.TheRealDeal.com

You were in the Israeli army. What was that like? I was in the army for three years. I think that it was the best thing that could have happened to me at that moment of my life. It took a kid like me — I don’t know if I was mischievous, but I was a contrarian — and showed me discipline. A lot of things that I have today are because of the training I got in the army. It put me in line. How did you get into real estate? Completely by default. I was single in New York and every woman that I met, her parents were in real estate. Very early, I realized real estate in New York is like the celebrity in L.A. We are consumed by it. People wake up in the morning and talk about real estate. When they have sex, they talk about real estate. Even if you have only a cheap apartment, you talk about real estate. How did you get your first real estate job? I started taking business courses at NYU, and it came easy to me. I was introduced to a broker at LB Kaye. I went in to interview with a woman. It was almost like we were dancing the tango. It was a sexual flirtation. She gave me the job, and I became a broker at the firm. I met my wife [who was an assistant to the brokers] there. We got married in 1989. What did she see in you? I had beautiful wavy, curly hair. I would always play

with it, but I started to get headaches. I cut it shorter and shorter, and then started shaving it 20 years ago. I felt liberated. I’m the opposite of [the Biblical figure] Samson. If I have hair, I feel like I don’t have the same strength. Where do you live? On Long Island, in Upper Brookville. It’s 30 miles from Manhattan. I’ve lived there 16 or 17 years. Do you have any other homes? We have a place in the city in one of our buildings, the Olivia, which was named after my daughter. We rarely stay there because we love our bed at home. I also have a place in Beaver Creek, Colo. It’s in the Ritz-Carlton. Do you ski? I love skiing. Usually there is a bet in the office on whether I’ll survive the season. For the last seven years, almost every year I broke something: I’ve broken my leg once and my shoulder twice. How many children do you have? I have three beautiful kids. Max is almost 21, Josh is finishing high school and Olivia is 14. Continued on page 102

PHOTOGRAPH FOR THE REAL DEAL BY MARC SCRIVO00 www.TheRealDeal.com July 2006

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