The Real Deal December 2012 by The Real Deal

Record deals: London vs. NYC

The history of NY’s ‘It’ buildings

Go-to brokers for foreigners

Rockaways market after the storm

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Feng Shui taken to the next level

THEREALDEAL

www.TheRealDeal.com

What’s on tap for next year?

A look at key NYC real estate issues to watch out for in 2013

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

Vol. 10 No. 12 December 2012 $3.00

Players hit hardest by Sandy

Who’s recovering, and who stands to reap the most during rebuilding

BY TOM ACITELLI If 2012 was a year of continued recovery for NYC real estate, 2013 might be SPECIAL REPORT a year of uncertainty. The industry faces a number of unknowns, from the “fiscal cliff” to the mayoral election. Inside, a look at the projects and issues to watch in the New Year.

Falling off the cliff Manhattan’s luxury residential market is in limbo as speculation over the “fiscal cliff ” heats up in Washington. While some are rushing to close in-motion deals before capital gains taxes rise on Jan. 1, those still considering a sale or purchase are holding off. See page 18.

NYC’s next real estate billionaire Ruby Schron has quietly become an industry force

Holiday gift expected for New York retail

BY ADAM PIORE Investor Ruby Schron still lives in the same Brooklyn house he’s been in for decades, even as his fortune has swelled into the hundreds of millions of dollars. But despite eschewing the limelight, Schron is getting too hard to ignore. One source predicted he’ll be NYC’s next real estate billionaire.

Black Friday receipts came in at a record $59 billion nationally, and real estate pros expect a strong holiday shopping season to help the Manhattan retail market — but only in prime retail corridors. See page 20.

See story on page 36

A rendering of 135 East 79th St.

Start-up squad

BY LEIGH KAMPING-CARDER Silicon Valley take notice. NYC has a new generation of entrepreneurial whiz kids starting residential firms (many with a techlike feel) and proving they’re more than just a flash in the pan. See story on page 50

Building owners slammed by Sandy (from top left clockwise): TF Cornerstone’s Thomas Elghanayan, Joseph Moinian, Savanna’s Christopher Schlank, and Bill Rudin.

how the storm has impacted the real estate industry — from the landlords who were hit hardIt’s been more than a month since Superstorm est to the brokers who’ve found displaced residents new homes to the developers Sandy hit NYC, but the aftermath FEATURE STORY who are most likely to cash in on the is far from over. While much of the coverage has (rightfully) centered on the storm rebuilding efforts. See stories beginning on page 40 victims, this month TRD took a close-up look at BY ADAM PINCUS, KATHERINE CLARKE, GUELDA VOIEN AND C.J. HUGHES

Simone says 2012’s most profitable deals

Developer is ‘transforming’ Bronx with mega-projects

Doug Steiner: people think I’m a bike messenger See page 114.

The construction industry makes up 10% of GDP, according to some estimates, so rebuilding from Sandy could provide a big economic boost. See page 46.

AT A GLANCE

See story on page 54

The entrepreneurs shaking up residential brokerage

FACT

BY GUELDA VOIEN While many developers avoid the Bronx, one firm has become the biggest fish in that small pond. Simone Development is currently working on several of the largest developments there. Not only is it building the first brand-name luxury hotel (a Marriott), it’s also constructing a new mall and signing national tenants like Target. One source said the firm is “transforming” the borough. See story on page 62

A first-ever ranking of big Manhattan building sales by rate of return for sellers

BY ADAM PINCUS Typically investment sales deals are ranked by the sale price, but that emphasis on size hides the figure that real estate players truly care about: how much money the deal made. Indeed, the number that real estate investors brag about, at the end of the day, is their return on equity. So this month, for the first time, TRD ranked Manhattan’s Top Manhattan building sales $100-million-or-greater commerby return on equity cial building sales for 2012 by their 724 Fifth Avenue: 215% estimated return. “These are numSt. Regis retail: 167% bers everybody wants to hear, but nobody wants to give up,” said Dan 1370 Broadway: 158% Fasulo of Real Capital Analytics. 4 New York Plaza: 123% See story on page 74

Brodsky’s UES condo upgrades 79th Street The Brodsky Organization’s under-construction condo at 135 East 79th Street is the first ground-up project architect William Sofield has designed. And the results are impressive, says critic James Gardner. Plus, it’s a major upgrade over the site’s last building. See page 70.

NYC’s secret streets In NYC, privacy is the ultimate luxury. This month, TRD looked at tucked-away streets that are in serious demand. See page 68.

www.TheRealDeal.com

STEINER PHOTOGRAPH BY MARC SCRIVO; SANDY GRAPHIC BY WARREN GEBERT

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Highlights NURSERY SCHOOL

D E C E M B E R

Falling off a cliff

Hopes for the holidays

London leads

2 0 1 2

How negotiations in Washington are impacting NYC’s housing market.

Initial stats for the shopping season look good. What does it mean for NYC retail? The record real estate deals in NYC’s sister city are blowing sales here away.

Big Ben in London

Lolli lives it up Anthony Lolli isn’t shy about spending money, as evidenced by his Rolex and Rolls-Royce. But the Rapid Realty CEO has had recent success to pay for those riches. Rapid Realty’s Anthony Lolli

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.

Transforming design into reality 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

words... 30 InThetheir month’s funniest and most insightful real estate–related comments.

Jay Neveloff: A day in the life The Kramer Levin partner on everything from working for high-profile clients like the Carlyle Group to attending evening art auctions.

Jay Neveloff, a partner at Kramer Levin

the roots 34 Reliving A look back in time at the history of

the CIM Group’s high-profile 432 Park site — from the cow pastures to the railroad tracks to the Drake Hotel.

modest mogul 36 The Investor Ruby Schron has quietly become one of the city’s most prolific (and wealthiest) landlords, but he still eschews fancy suits. Developer and investor Ruby Schron

ad crackdown 38 Mortgage The Fed is targeting the housing industry for putting out misleading, too-good-to-be true ads.

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

hits industry hard 40 Sandy An overview of how the storm impacted

40 Mayor Bloomberg surveys the destruction on Staten Island.

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

NYC’s real estate industry, from the landlords who suffered most to the brokers dealing with dead deals. www.TheRealDeal.com March 2012 00

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Highlights continued start-up generation 50 The The entrepreneurs launching new

COURT ROOM

NYC residential firms: They’re not your mother’s brokers.

ahead for 2013? 54 What’s The biggest issues, projects and trends that will be at the forefront of the industry in the New Year.

50 Modern Spaces’ Williamsburg office.

NYC’s It buildings A look at how the city’s hottest towers have continued to attract New York’s most elite residents.

says 62 Simone The Bronx developer is the big

62 Simone execs, from left: Joseph Deglomini Jr., Joseph Simone and Joseph Kelleher.

Off the grid NYC’s little-known (and highly coveted) tucked-away streets.

A rendering of 135 East 79th Street

Residential Market Report

Inside man comes outside

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.

Structural steel Right for any application

fish in a small pond, with some of the borough’s most important projects on its docket.

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

On East 79th Street, an interior designer breaks into the architecture world with force.

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

National Market Report

Reports from around the country on significant developments and trends.

2012’s biggest money makers The sellers who saw the highest rate of return on their Manhattan building trades this year.

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

113

Platinum Properties’ 2012 holiday party.

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

Development Updates

It’s holiday party time! Publisher of Metals in Construction 211 E 43 ST | NY, NY 10017 | 212-697-5553 | www.siny.org

Brokerages go full-steam ahead with seasonal bashes in hopes of a morale boost.

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

108

Calendar of Events Check out this month’s activities.

112

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

10 12 December October 2012 2012www.TheRealDeal.com www.TheRealDeal.com

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The stories behind the latest job moves and company announcements.

Steiner’s outsider status The developer is sometimes mistaken for a messenger when he shows up for big Midtown meetings without a suit or blazer.

113

We Heard A lighter look at industry buzz.

www.TheRealDeal.com March 2012 00

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THE REAL DEAL N E W YO R K R E A L E S TAT E N E W S PUBLISHER Amir Korangy EDITOR-IN-CHIEF Stuart W. Elliott MANAGING EDITOR Jill Noonan DEPUTY MANAGING EDITOR Candace Taylor EXECUTIVE DIGITAL EDITOR Gabrielle Birkner DEPUTY WEB EDITOR Leigh Kamping-Carder ART DIRECTORS Derek Zahedi, Ronald Gross SENIOR REPORTER Adam Pincus REPORTERS Katherine Clarke, Guelda Voien CONTRIBUTORS C.J. Hughes, David Jones, Adam Piore PRODUCTION MANAGER & RESEARCHER Linden Lim WEB PRODUCERS Zachary Kussin, Christopher Cameron

ROSEWOOD R E A LT Y

G R O U P

Rosewood knows New York We are pleased to announce that through November of 2012, Rosewood has completed total sales of $1,054,132,500 in New York, which include:

PHOTOGRAPHERS Chris Martin, Marc Scrivo DIRECTOR OF MARKETING OPERATIONS Yoav Barilan ASSOCIATE SALES DIRECTOR Ross Fox DIRECTOR OF DIGITAL MARKETING AND STRATEGY Amir Talai ADVERTISING SALES Eran Evron, Abi Laoshe, Nick Mascaro, Robert Stearns, Jennie Durkovic WEBMASTER Nima Negahban FINANCE DIRECTOR Kenneth Cyrus ADMINISTRATOR Junaid Zahid

Manhattan: Aggregate sales of

$554,097,000 - 61 Buildings / 1594 Residential units / 41 Commercial units

Brooklyn: Aggregate sales of

$278,868,000 - 34 Buildings / 1494 Residential units / 35 Commercial units

Bronx: Aggregate sales of $159,942,500 - 42 Buildings / 1858 Residential units / 37 Commercial units Queens: Aggregate sales of $61,225,000 - 7 Buildings / 270 Residential units / 7 Commercial units

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

The Real Deal is a registered trademark of Korangy Publishing Inc. Copyright ÂŠ 2012. Call 212-2601332 or e-mail news@therealdeal.com. Warning: It is illegal to photocopy or reproduce any part of The Real Deal without express written consent. For reprints and duplication rights, call 212-260-1332. Principal office: 158 West 29th St., New York, NY 10001. The Real Deal is published monthly. Annual subscriptions cost $95. Send check or money order to 158 West 29th St., New York, NY 10001.

14 December 2012 www.TheRealDeal.com

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What you liked in 2012

massive hurricane that brought the city to its knees notwithstanding, 2012 was a pretty good year for New York City real estate. The strong market compared to years past is reflected in our annual most-read stories list below. Indeed, 2012 was a year in which the luxury home market was white hot, fueled by foreign currencies from Russian rubles to Brazilian reals, and where the rental market was incredibly tight. It was also a year where the amount of new condo development grew — even if blockbuster commercial deals were few and far between and the lending spigot was hardly wide open. Whether 2013 will continue on this path remains to be seen. In a story starting on page 54, we look at some of the big issues that will be at play in the New Year. They include what the real estate fallout will be if the nation goes over the so-called fiscal cliff — which could happen if Congress doesn’t hammer out a deal on a number of tax and spending policies — and the potential election of a less real estate-friendly mayor (which looks like a given at this point). In 2013, we’ll also see whether some of the excitement surrounding the überluxury market was just hype. That’s because closings will finally begin at the new condo project One57, which reportedly scored a record $90 million sale this year. In addition, several trophy office towers with asking prices of more than $1 billion are on the block, and if they fetch those sticker prices they’ll be bellwethers for the commercial market. We’ll also see the impact of thousands of fashionistas descending on Lower Manhattan when Condé Nast opens up offices at One World Trade, which could quickly transform the less-than-exciting area into something more dynamic. And of course, we’ll see the net effect of Hurricane Sandy going forward — the havoc it has wreaked in certain areas of the city versus the boon to the real estate industry that rebuilding and broad infrastructure overhaul could provide (see story on page 46). For a moment, though, let’s look back at 2012. Topping our list of most read stories in 2012 was “NYC’s new condo wave,” a look at new residential development on the drawing board in Manhattan and Brooklyn. The topic of that story was a welcomed change compared to 2010, when our two most-viewed stories were about foreclosures at new condo developments and stalled projects. (The most-viewed list in 2011 showed a market on much better footing.) Other stories on the list this year include several first-ever reports. Deputy web editor Leigh Kamping-Carder did a first-ever look at the best residential firms to work for, as well as an in-depth study on the monthly cost of renting versus owning in different neighborhoods. Senior reporter Adam Pincus, who is continually devising new and novel ways to examine the market, looked at tax records to figure out the Manhattan commercial landlords whose portfolios are throwing off the most cash in “NYC’s skyscraper kings.” (In this issue, check out his story on page 74 on the building owners who sold for the biggest equity returns this year.) Meanwhile, reporter C.J. Hughes wrote our first-ever in-depth look at executive pay in nearly all areas of New York City real estate in “Paycheck Confidential.” Finally, a story on Jeff Blau, who was recently named CEO of the Related Companies, was our most read profile of 2012. The 44-year-old is part of a group of fortysomethings taking the reins at the top of the profession — the selection of Rob Speyer as head of REBNY, the industry’s leading trade group, is another example of this trend. The only story from last year to stay on the top-read list this year was “Moguls in the Making,” which also highlighted young gunslingers on the rise. So if you liked those two pieces, make sure to check out this month’s story on page 50 about residential brokerage heads who are building the firms of tomorrow. You never know, they could be establishing the next Corcoran or Elliman. Here are the most viewed magazine stories of 2012: 1. NYC’s new condo wave (July) 2. The best brokerage firms to work for (September) 3. Renting vs. owning: Breaking down the monthly nut (May) 4. NYC’s skyscraper kings (June) 5. Related’s Jeff Blau: The ‘development’ of a CEO (October) 6. Manhattan’s top residential firms (June) 7. Paycheck confidential (June) 8. Moguls in the making (April 2011) 9. Burkle’s billions (May) 10. Lutnick’s big hedge (March)

Josef Yadgarov, Licensed Real Estate Salesperson 212.836.1097 · jyadgarov@corcoran.com Vaneide Giacobe, Licensed Real Estate Salesperson 212.893.1730 · vgiacobe@corcoran.com

16 December 2012 www.TheRealDeal.com

C-Corcoran Wexler • 32589_CorcoranWex_TheRealDeal · 4.625x6.375

Stuart Elliott

Re s i d e n t i a l Ma r k e t By Katherine Clarke anhattan’s luxury residential real estate market will remain in limbo for the remainder of the year as speculation continues over how negotiations on the nation’s fiscal policy play out in Washington, brokers say. While some buyers and sellers are rushing to close on deals already in motion in order to avoid an inevitable rise in capital gains taxes, brokers said, consumers still considering a sale or purchase are holding off. They are waiting until Congress agrees on a plan to

Stuck in limbo

How fiscal policy negotiations in D.C. are impacting NYC’s housing market

deal with a confluence of fiscal issues, including the expiration of the Bush-era tax cuts, spending cuts and the national deficit. If the government does not reach a solution by Jan. 1 — the date that the nation goes over the so-called “fiscal cliff ” — capital gains could reportedly go from 15 to 20 or 25 percent, while taxes on dividends may go as high as 43 percent from 15 percent for the wealthiest Americans. Wealthy Manhattanites looking to gift their children pricey properties may also be in trou-

ble: If Congress fails to act, a lifetime gift-tax exemption allowing the transfer of assets worth up to $5.2 million, in place since the beginning of 2011, is set to revert to just $1 million on Dec. 31. That would mean all transfers over $1 million could be taxed as high as 50 percent. Sotheby’s International Realty broker Nikki Field said she’s seeing hypermotivated sellers flood the market, with the aim of closing on pricey properties before the end of the year. “The talk of a fiscal cliff is ac-

celerating, rather than slowing down, sales at the high end,” she said. “Some sellers are concerned because the possibility of the [tax] rise reduces their profit margin significantly, while a few are even willing to discount prime properties for a quick close before the end of the year.” She said her team has recently worked on several deals in which the seller accepted the buyers’ offer on the condition that the deal close by the end of 2012. Indeed, real estate attorney Bruce Cohen, of the Manhattan

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law firm Cohen & Frankel, said he didn’t plan a December vacation this year precisely so he could deal with the volume of clients looking to close in the last quarter. Some of the superpricey transactions that have recently closed include last month’s purchase by Susan Weber Soros, ex-wife of billionaire George Soros, of a townhouse at 116 East 70th Street near Park Avenue for its full $22.5 million asking price. Also last month, media mogul David Geffen paid $54 million for a penthouse duplex owned by socialite Denise Rich at 785 Fifth Avenue. In the current climate, buyers are able to take advantage of sellers’ eagerness to sell before the end of the year, said Michael Graves, a broker at CORE. “The fiscal cliff and capital gains tax could negatively affect property values next year, and that volatility is heavy ammunition” for the buyer, he said. Another factor working in buyers’ favor is that condo inventory is on the rise. According to a report issued by the real estate website StreetEasy last month, the number of apartments for sale in new development projects in Manhattan has risen 10.2 percent in the last six months. However, those high-end buyers who don’t already have deals in the works are sitting back for the moment. That’s because most buyers are also under-the-gun to sell their own property before they buy another home and will end up getting hit with the capital gains tax on that end of their transaction. “The probability of a tax increase on the wealthy may cause some high-end buyers hesitation,” said Patricia Levan of Levan Real Estate. “However, when the expected tax compromise comes through, most buyers will feel relieved, and this will increase demand.” Factoring in both the political situation in Washington and the impact Superstorm Sandy has had on closing volume in November, Jonathan Miller, CEO and president of real estate appraisal firm Miller Samuel, said he predicts a slightly slower fourth quarter than seasonal expectations normally suggest. According to preliminary data Continued on page 98

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Hope for the holidays By Jeremy Herron ith parts of the city still damaged in the wake of Hurricane Sandy, it’s a little hard to get into the holiday spirit this year. Still, real estate professionals said they expect a strong holiday-shopping season — bolstered by locals and tourists alike — to push Manhattan retail rents higher and shrink availability, at least in the city’s prime retail corridors. “I think all of us in retail have

a lot of confidence coming into the holiday season,” said Joanne Podell, executive vice president in retail at Cushman & Wakefield. That confidence is not unfounded. New York City private-sector employment rose sharply in October, growing 2.9 percent, according to the New York State Department of Labor. Some sectors, like financial services, continue to struggle, but the overall data show a fast-growing economy. “We are

looking at a diverse and dense customer base,” Podell said. “And they are out there shopping.” In addition, early holiday re-

Hot retail areas continue to sizzle, with Black Friday sales boding well for the Christmas shopping season

giving weekend, according to a National Retail Federation poll. Specific data for Manhattan was not available, but national figures

higher average bill per shopper. So far this holiday season, Manhattan’s Fifth Avenue retail corridor has seen “a pretty stunning

“Sandy won’t do too much [to retail] in Manhattan. People still want to come to New York to see the beautiful displays.” Amira Yunis, CBRE Group turns look good. Black Friday receipts came in at a record $59.1 billion nationwide over the Thanks-

show an increased spending appetite, with more shoppers in stores and online than a year ago and a

amount of traffic, and [shoppers] weren’t just buying for themselves,” said Amira Yunis, executive vice president at the CBRE Group. Faith Hope Consolo, chairman of the retail group at Douglas Elliman, said she expects purveyors of gadgets and clothing accessories to fare well this holiday season, along with one-stop-shopping locations such as Macy’s. Discounters hocking this year’s popular hot toys should also see high traffic. Brick-and-mortar electronics retailers, though, likely will continue to struggle as consumers step-up online purchases, brokers said. Except, of course, for Apple. “They are going to do fantastic with the new iPad mini,” Yunis said. Most brokers said they don’t expect Superstorm Sandy to have a significant impact on the overall health of the retail sector this winter. “Sandy won’t do too much [to retail] in Manhattan,” especially among tourists, Yunis said. “People still want to come to New York to see the beautiful displays.” While shoppers who suffered property damage might cut back on holiday spending this year, they’ll still be in stores, Podell said. “People are not going to not buy,” she said. Some shoppers might feel “awkward” about making ostentatious purchases with so many communities nearby still struggling to recover, said Consolo. As a result, she said, jewelers may see a decline in business. And individual areas and businesses could struggle, especially in neighborhoods that saw severe damage from Sandy. “Damage could slow sales and leasing on the Lower East Side,” an area that had been “picking up momentum” before it was dealt a blow by the hurricane, Consolo said. But Consolo does not expect retail in the Financial District — the Manhattan area hardest hit by the storm — to suffer too much, since Continued on page 98

20 December 2012 www.TheRealDeal.com

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London’s lead Compiled by Christopher Cameron

London listings

2-8a Rutland Gate

Like NYC, the Big Apple’s sister city, London, is also seeing record-breaking real estate deals. A $100 million penthouse at CitySpire is currently NYC’s priciest listing. But that’s only one-fourth the cost of London’s most expensive available home: In September, a Hyde Park mansion at 2-8a Rutland Gate hit the market for £300 million, or about $476 million, becoming London’s priciest-ever listing.

A new world record

Foot for foot

In August, London developer Nick Candy sold a six-bedroom duplex in his One Hyde Park complex in Knightsbridge for £140 million, roughly $222 million — the world’s biggestever single-unit residential sale. The sale is more than double New York’s priciest deal, a duplex at One57 that’s reportedly in contract for more than $90 million.

For townhouses, too, London’s overall property values have outpaced NYC’s. The 21,000-square-foot Cornwall Terrace mansion in London’s Regent’s Park hit the market last month asking £100 million, or about $7,400 per square foot. That’s more than New York’s priciest townhouse listing, the Woolworth mansion at 4 East 80th Street, which is asking $90 million, or roughly $4,511 per square foot.

One Hyde Park complex

Cornwall Terrace Mansion

brokers cross the pond

High taxes

Candy land

New York’s real estate pros are taking note of London’s überpricey sales. Stribling & Associates in 2010 began a partnership with London-based Savills, and in October, Manhattan boutique firm Horacio LeDon Real Estate opened a small ofFIce in London’s Chelsea neighborhood.

For New Yorkers and other overseas buyers, however, there are some drawbacks to investing in London real estate. Britain recently increased its transaction tax for properties over £2 million from 5 percent to 7 percent. By comparison, New York’s “mansion tax” is 1.425 percent for properties over $1 million.

Rising taxes have reportedly prompted NICK Candy to look for investments outside the U.K. According to Bloomberg News, he is currently shopping for prime development sites in Manhattan. In March, Nick’s younger brother, Christian, scooped up a $25.9 million penthouse in the Plaza Hotel, while London resident and Deutsche Bank CEO Anshu Jain last month paid $7.2 million for a One Beacon Court pied-àterre, according to the New York Christian Candy and Nick Candy Observer.

Horacio LeDon

24 December 2012 www.TheRealDeal.com

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PHOTOGRAPH FOR THE REAL DEAL BY CHRIS MARTIN

The keys to Lolli’s roughly 15 investment properties, which are in Park Slope, Dumbo, Williamsburg and Bay Ridge, Brooklyn. He began buying up properties roughly 15 years ago and has redeveloped all of his buildings. He hopes to eventually fill this entire nook with keys from additional properties.

“I’m all about [being] rapid,” Lolli said — which seems appropriate given his company’s name. The hourglass takes 15 minutes to empty, so Lolli can keep track of the length of a call or other interactions. This calendar is, of course, designed to track the date, but Lolli uses it to tally how many Rapid offices he has (60, currently). The company has been averaging about two new offices per month, he said.

This brick is from the first building Lolli bought — a twofamily building at 681 Fourth Avenue in Park Slope — when he was 21 years old. “I was broke, so I had to really figure out how to produce income,” he recalled.

This article in Interior New York magazine featured Lolli’s three-story single-family home, where he’s allotted an entire floor for his mother. The spiral staircase that leads to his third-floor office was inspired by a similar staircase in a Louis Vuitton store in Europe, Lolli said. There has only been one incident where someone fell from the staircase, which has no railings, but “that guy was drunk,” according to Lolli.

the

Desk

of:Anthony

LoLLi

Lolli often takes trips with the owners of Rapid Realty franchises and their brokers. On one planned trip to Dubai, Lolli arrived at the airport to discover that his passport was expired and had to turn around and go home. His director of operations brought him back this bottle of sand from the desert city.

Lolli appeared on the Internet show “What’s Cooking in Real Estate?” Producer Judy Sahagian invented a drink named for him — the Lolli — that’s supposed to taste like a lollipop. Ingredients include St-Germain, vodka, Malibu rum and peach schnapps.

Rapid Realty was named one of Inc. magazine’s 5,000 fastest-growing small companies in 2012. When the tally was taken earlier this year, many of the Rapid offices were leased but were not yet producing revenue, Lolli explained. So he aims to place even higher on the ranking next year (this year, they were in the 4,000s). “We are hoping next year to be on the 500 list,” he said.

Lolli’s white Rolls-Royce Ghost, which he bought about three months ago (the license plate says “Mr. Lolli”). Another collectible is his condo in Ecuador. Lolli — who is half Ecuadoran, half Italian — bought the condo years ago, but gave it to his Ecuadoran grandmother in 2005.

Some of these books by Donald Trump have been signed by the author himself. Still, Lolli said he does “not really agree” with The Donald’s politics.

ven by real estate standards, Anthony Lolli’s home, office and personal appearance are flashy, from his Rolex watch to his Rolls-Royce. Luckily, the 35-year-old CEO of Rapid Realty — a franchise brokerage with 60 offices in New York City, New Jersey and Philadelphia — has had the recent success to pay for those riches. Lolli initially opened his rental-focused brokerage in 1998, but it wasn’t until three years ago that he converted the company to its unorthodox franchise format. Since then, Rapid has expanded, well, rapidly. Today, Rapid has more than 1,000 agents in New York, and Lolli’s goal is to “become the household name in rentals across America.” Lolli, a bachelor, works out of his Bay Ridge home, which has been featured on reality TV shows like “Open House” and used to film a commercial for an energy drink. B y G uelda V oien

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Office market chugs along

Despite Sandy, end-of-year deals and leasing are on pace with years past in Manhattan market By Adam Pincus n a weird twist, Hurricane Sandy made no measurable impact on November’s office leasing numbers. That’s despite the storm rendering nearly 20 million square feet of office space unusable as of late last month.

Just after the storm hit, brokers worked feverishly to find alternate spaces for their clients, unsure how long they would be out of their offices. But instead of signing new leases, many large companies moved to their firm’s own satellite offices, used spaces borrowed from friendly

business associates or clients — or had employees work remotely. “What we found was that the vast majority of [displaced tenants] used contingency plans that they [would] put in place for any disruption,” said John Wheeler, managing director at

commercial firm Jones Lang LaSalle. “I think some things slowed down, but I don’t see any of the major activity disrupted, and it feels relatively typical for the year end, when you get a disproportionate amount of the leasing done,” Wheeler said. Overall, Manhattan leasing figures remained steady in November, preliminary statistics from commercial firm Cassidy Turley showed. Meanwhile, the availability rate — which tracks space vacant now or that will become available in the next six months — remained at 10.3 percent last

Manhattan office stats AVAILABILITY AVG. ASKING RATE RENT

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month, unchanged from October. And the average asking rent rose by just $0.02 per square foot during that same time, to $56.84 per foot. “[The broad market] is still flat right now,” said Jeremiah Larkin, a senior vice president at Downtown’s largest landlord, Brookfield Office Properties. But he added that he’s negotiating deals that could close before the end of December or January. “Since Labor Day, we have seen an uptick of activity, including space tours and proposals,” he said. After a month of feverish repair work in the wake of the late October storm, the amount of shuttered Lower Manhattan office space fell to 20 million square feet from 35 million square feet as of Nov. 26, according to JLL. That is out of a total 101 million square feet of office space Downtown. Many more Downtown buildings are expected to return to service this month (see related story on page 42), but some could be unusable for months, according to news reports. Speaking to why there weren’t more short-term leases, insiders said it generally doesn’t make sense to relocate a major operation for only a few weeks. That’s partly because sometimes the move itself can take a month. One long-term impact of working in borrowed spaces during the Sandy fallout could be that more firms latch onto the popular trend of moving employees into a smaller footprint, brokers said. Indeed, coping with Sandy has given some executives looking to save on rent an opportuContinued on page 100

28 December 2012 www.TheRealDeal.com Video Doorman

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In their words...

The month’s funniest and most insightful comments on real estate “I found [Frank Lloyd] Wright in college, when looking for a lazy two-point credit to get out of French.” Actor Brad Pitt, on the inspiration for the furniture line he launched last month. (Architectural Digest)

“He is a flaming “This place has raised asshole, [and] four kids. We beat the out of it.” I hope Macy’s hell Michael J. Fox, on the decision to hire dumps him!” designers to revamp his family’s Upper East Cher, in a tweet about real estate mogul Donald Trump, a longtime spokesperson for Macy’s.

“To be honest, I’ve hated every home I’ve ever had. … The word home to me at this point, it’s just a place to order Chinese food, sharpen knives and shower. … The only thing in my fridge is swag from the food bags I get at events.” David Chang, founder of Momofuku restaurant group. (Wall Street Journal)

“For the first time, I think the South Street Seaport may really sink.” Faith Hope Consolo, chairman of Douglas Elliman’s retail group, on Hurricane Sandy’s impact on the seaport. (Wall Street Journal)

“Armpit-high water in that Frank Gehry lobby, and all the tech screwed up by the flooded basement. Staff were scattered all over the city, with about one in three e-mails arriving every two days — which caused its own special chaos.”

“Congress requires a 2.0 upgrade.”

The Daily Beast and Newsweek Editor-In-Chief Tina Brown, on how her IAC Building office fared during Hurricane Sandy. (New York Magazine)

Jason Haber, CEO of Rubicon Property, speaking to The Real Deal about how he would vote on Election Day.

“Even in the middle of the storm, I had what I always have: a [cheese] omelet with two sausage patties. It’s what I eat every morning. … I don’t put shit in [the omelet]. It’s all protein, no carbs for breakfast, and that’s the only thing I eat until dinner time.” Joseph Lhota, chairman and CEO of the MTA, when asked by the New York Observer about his diet during Hurricane Sandy. 30 December 2012 www.TheRealDeal.com

Side apartment. (Architectural Digest)

“Most residential real estate offices are not known for their beauty, and I think the concept began long ago where you take your client out [to a restaurant in order to avoid the office].” Broker Royce Pinkwater, Sotheby’s International Realty. www.TheRealDeal.com August 2006 00

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A DAY IN THE LIFE:

Jay Neveloff Jay Neveloff at the offices of Kramer Levin Naftalis & Frankel at 1177 Sixth Avenue

The high-profile lawyer — a partner at Kramer Levin — walks TRD through a typical day, from working out on the elliptical to attending high-priced art auctions

6:30 a.m. I wake up at 6:30 on those weekdays when I stay

I don’t return his phone calls instantly, he calls his mother. He

in our loft in Greenwich Village. We spend weekends at our

finds [real estate] deals for a very wealthy guy, Daniel Straus,

house in Westchester and usually drive back in on Monday

who made his money in health care. David recently brought

morning.

him a deal to buy six brownstones owned by the Whitney MuThe New York Times

seum on East 74th Street for $95 million. It probably helped

7 a.m. We have a gym in our building, but I prefer to go to the

that Bill Maloney, the project director for the new Downtown

New York Sports Club nearby. I go with my wife, Arlene, and

Whitney, was at David’s bar mitzvah. The brownstones will

do the elliptical machine, and weights and crunches. I like the

be unified into a single 12-unit condo. Community Board 8

elliptical because I can read the New York Times on it. Then I

didn’t like the rooftop additions and rejected the proposal,

go home, have some orange juice and vitamins. I usually take the F train to work, or a taxi if I’m pressed for time.

F Train

but we have a great land-use group here, and changed the plan to make it presentable to Landmarks. I also spend part of my days talking to another son, Kevin, a real estate law-

8:15 to 9 a.m. I usually grab something fattening on my

yer with Holland & Knight. One of his clients is Marriott. We

way into the office, like a bagel, and eat it at my desk. Then

sometimes talk about concepts, but we are very mindful of

I go through all my e-mails and the papers in my briefcase.

potential conflicts.

9 a.m. to Noon I start to map out the day. What clients do

Bagel

6:15 to 7:30 p.m. We are out most weeknights for work

I have to call? Is this a deal that should get done? Sometimes

events, sometimes more than one. I think these nights out

I will do that by myself or with one of my colleagues. [There

[help] generate leads, but I also enjoy seeing people, and my

are] 23 lawyers in my real estate practice, but there could be

wife enjoys it. It’s fun. The other night I walked to the Waldorf

others involved in the deal, like tax experts. I’m a deal junkie.

Astoria, where I met my wife. There was an annual benefit for

I know everything that is going on in every single one of [my]

the Phipps Houses Group, the affordable housing developer.

deals. And I’ve been busy lately: I represented CIM Group in

If we don’t have an event, I usually leave the office by 7:30 or

its purchase of 200 Lafayette Street with Jared Kushner for

so. And we usually don’t go to restaurants; we’ll have a home-

$50 million. I also repped CIM in their purchase of 737 Park

200 Lafayette Street

cooked meal.

Avenue — a condo conversion with Harry Macklowe — a $253 million deal. Other clients include the Carlyle Group, Center-

7:30 to 9:15 p.m. Sometimes there are multiple evening

bridge Partners and Fortress Investment Group. I usually

events. For example, after the Waldorf, we went to Sotheby’s,

have a daily call with Vincent Ponte of Ponte Equities, which

which was having a contemporary art auction. … When you

owns an incredible amount of real estate in Tribeca.

walk through a museum, you don’t ever really know the price Club 101 at 101 Park Avenue

of paintings, but at auctions you can see that, wow, a Rothko

12:30 to 1:30 p.m. I try to have lunch. Today, I went to Club

is worth $50 million! I’ve done work for Sotheby’s, so we were

101, a private restaurant at 101 Park Avenue, with Richard

led through the back of the house to the floor of the auction,

Kalikow, president of Manchester Real Estate, and Jim Law-

just in time for the Rothko bidding [it ultimately sold for

rence, an executive vice president at Valley National Bank.

$75.1 million].

Richard’s cousin, Peter Kalikow, the president of H. J. Kalikow 9:15 to 10 p.m. And then from the auction we went back

& Company, which built the building, came over and said hello. I had a chicken Caesar salad with water and a cappuccino. My wife says, “No red meat,” [so] I have to back off the burg-

Peter Kalikow, president of H.J. Kalikow & Company

to the Phipps dinner, though it was mostly over. They were presenting awards. We took the car home at about 10 p.m.

ers. I also saw Marty McLaughlin, a public relations executive

Since we didn’t have time for dinner, I made some scram-

I know from work I did with Westbrook Partners a few years

bled eggs.

ago on the attempted sale of Starrett City, the affordable housing complex in Brooklyn. It was very important to keep the

10:30 to 11:15 p.m. The TV is usually on, but whether I

story out of the press — with all due respect — and he helped

watch it or not … every 15 minutes, I’ll ask my wife, “What hap-

minimize the coverage.

pened?” The shows that Arlene likes are “The Good Wife” and “Homeland.” And we usually watch the lead-in to the news.

2 to 6 p.m. Once my day starts, I’m in gear. One of my favorite clients is my oldest son, David. He’s a very tough client. If 32 December 2012 www.TheRealDeal.com

Mark Rothko’s “No. 1 (Royal Red and Blue),” which sold for $75.1 million at Sotheby’s last month

But then it’s lights out. By C.J. Hughes Interview has been edited and condensed.

March 2012 00 PHOTOGRAPH OFwww.TheRealDeal.com NEVELOFF FOR THE REAL DEAL BY MICHAEL TOOLAN

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

432 Park: New project,old site From cow pastures to railroad tracks, a short history of the spot where CIM and Harry Macklowe are building a much-hyped new condo

according to the New York Times. The only large structure nearby was the so-called Deaf and Dumb Asylum, according to an early map of the city. Early steam rail cars created noise and pollution, so living alongside the tracks was not desirable, explained New York City historian Warren Shaw. In fact, that’s how the avenue got its current name: A grass park was built along Fourth Avenue between 34th and 40th Streets, leading locals to call the road “park avenue.” The nickname caught on, and by the end of the 19th century, Park Avenue became the official name for most of the roadway — even though the northern portions were anything but a park. “The name was aspirational … let’s put it that way,” Shaw said.

By Andrew Klappholz n September, CIM Group and developer Harry Macklowe broke ground on 432 Park Avenue, one of Manhattan’s most-hyped new condo projects. The 1,395-foot-tall residential tower, on Park Avenue between 56th and 57th streets, is slated to be the tallest residential building in the city. But the area where the under-construction tower is located wasn’t always a sought-after residential neighborhood. This month, TRD took a tour of the site’s past lives, from Native American hunting ground to cow pasture to glamorous hotel.

P re -1600 s : L enape hunting lands

hat is now the East 50s was once a lush forest about 60 feet above sea level, according to Eric Sanderson, an ecologist for the Wildlife Conservation Society at the Bronx Zoo and the author of “Mannahatta: A Natural History of New York City.” Before Europeans arrived in the 1600s, the area was full of mammals and about 50 species of birds, including hawks and bald eagles, said Sanderson. The Lenape, Native American tribe that once inhabited much of present-day United States and Canada, first settled in the region after the last Ice Age. They used what they called “Mannahatta” island and its strategic waterways for hunting and gathering. But most of the Lenape trails didn’t stray far from the coastline, Sanderson said, so the area that is now Park Avenue was mostly used for hunting rather than for Lenape settlements.

The Drake Hotel, which was built in 1926 and demolished in 2007

“What is now the East 50s was once a lush forest about 60 feet above sea level.” Harry Macklowe, who purchased the Drake hotel in 2006 for $440 million, then announced plans for a new skyscraper

1600 s to early 1800 s : cow pasture

n 1626, the Dutch East India Company “bought” Manhattan from the Lenape for 60 guilders — about $1,100 today — and Dutch settlers claimed ownership of the entire island. At the time, only the southern tip of the island was developed for commerce, while everything north of present day Wall Street was mostly farmland. By1664, when the English conquered the island and renamed it New York, the area that’s now the East 50s contained pasture land for cows, which roamed freely over the island (and provided beef for residents). Those fields remained largely undisturbed until the early 1800s, when plans emerged to develop the island with a gridbased system of roads. Fourth Avenue — the path that eventually became Park Avenue — was one of the earlier thoroughfares to be built.

1830 s : N ew Y ork and H arlem R ailroad

n 1834, the New York and Harlem Railroad — now known as Metro North — was extended north along Fourth Avenue from 32nd Street to Yorkville, running alongside what is now the 432 Park Avenue construction site (see story on page 58). Since the area was hilly, Sanderson said, building the railroad required horses, steam engines and tons of dynamite. “There were ridges there that they had to blow up,” he said. “It’s remarkable how much the topography has changed.” At the time, the East 50s were relatively undeveloped; there was “little but tenements and flats along that stretch,”

34 December 2012 www.TheRealDeal.com

n the early 1870s, noise and steam from the trains drew complaints as northern sections of the city became more densely populated. At the urging of citizen groups, the New York and Harlem Railroad sank and covered many of its tracks. Then when the railroad converted from steam to electricity just after 1900, the railroad rearranged its tracks to support a large steel deck holding new buildings and a new Park Avenue. “Private owners, whose properties began at 50th [Street], were quick to capitalize on a Park Avenue without steam and cinders,” wrote the New York Times. In 1907, the 12-story Mayfair apartment house was built at the corner of 57th and Park, right up the block from the 432 Park Avenue site. Grand Central Terminal opened in 1913, and apartments, hotels and offices filled in the surrounding blocks, according to the Times.

An early photo of Park Avenue

The New York and Harlem Railroad

L ate 1800 s to early 1900 s : P ark A venue building boom

1926 to 2007: D rake H otel

uilt in 1926, the Drake was one of many hotels to pop up along Park Avenue during the economic prosperity of the Roaring Twenties, according to Shaw. The Drake stood at 21 floors with 495 rooms. When it opened, it offered state-of-the-art amenities such as automatic refrigeration. Guests included some of the most popular stars of the era from actress Lillian Gish to Frank Sinatra. During the post–World War II building boom, the corridor was largely transformed into a strip of modern office buildings, but the Drake remained. From the 1950s to the 1980s, the hotel continued to flourish, hosting the likes of Led Zeppelin and Jimi Hendrix. “The Drake was one of the survivors of the old era,” said Shaw. But in 2006, the Drake was bought by Macklowe for $440 million. Macklowe demolished the aging hotel, acquired two other adjacent lots, and announced plans for a record-setting skyscraper. But before finalizing the plans, he defaulted, prompting CIM Group to purchase the $510 million debt on the property. Macklowe remains involved in the project despite the default. The two have since hired architect Rafael Viñoly to design 432 Park Avenue, where the 147 condos are reportedly selling for an average asking price of $5,800 a square foot. Already, more than 10 units are reportedly in contract or close to a contract signing. TRD

www.TheRealDeal.com March 2012 00

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Pr o f i l e

The modest mogul R

By Adam Piore uby Schron is not the type of real estate mogul who has racks of shiny suits spilling out of his closet. Associates of the septuagenarian investor describe him as “the opposite of pretentious” and “anything but glitzy” — a man so careful with his money that he still lives in the same single-family home in Brooklyn where he raised his eight children, even as his fortune has swelled into the hundreds of millions of dollars. In fact, Schron was floored when he walked into luxury department store Barney’s several years back with David Lichtenstein, CEO of the Lightstone Group. The two were considering buying the building, at 660 Madison Avenue. “We’re walking through there, and Ruby looked at the price of one of the suits — and he almost died,” recalled Lichtenstein, who has collaborated with Schron on several “nine-figure” deals. “He said, ‘David, I would never pay this much for a suit!’ ” Schron didn’t buy the building either. But the anecdote speaks to the character of the man who has grown Cammeby’s International Group into a real estate empire. The firm has tens of thousands of apartments across the city, a piece of one of the city’s most iconic skyscrapers (the Woolworth Building) and a roster of assets in 14 states in the residential, office and industrial sectors. Despite his bulging portfolio, Schron “doesn’t spend a lot of money” in his personal life, said Steve Witkoff, who has partnered with Schron on 12 deals, including the Woolworth Building. “It’s not his thing. He takes the money that he’s got and buys real estate with it. He doesn’t buy stocks, he doesn’t buy fancy vacation homes. “He is a humble, self-effacing guy who doesn’t ever talk about himself, doesn’t brag, doesn’t extol his own virtues,” said Witkoff. “He just quietly amasses real estate like a lot of the old-line owners.” It’s that attitude, Witkoff and other associates insist, that accounts for Schron’s reputation in the media as mysterious. Dubbed “one of the city’s most secretive landlords” by the New York Observer, Schron actively ducks the spotlight and is never available for interviews. (In keeping with that reputation, Schron declined to be interviewed for this article.) Even so, it’s been hard not to notice the latest activities of the low-profile mogul.

36 December 2012 www.TheRealDeal.com

Hard to ignore Schron is currently pushing to win city approval for a controversial 25-story hotel and residential complex on Chrystie Street on the Lower East Side. It’s one of the last undeveloped properties in the Cooper Square Urban Renewal Area (the 11 blocks between Bowery, Second Ave-

Investor Ruby Schron could quietly become the city’s next billionaire landlord, despite eschewing glamour and a place in the spotlight

now hired an environmental lawyer to fight the project, according to the Wall Street Journal. Meanwhile, Schron and partner Abraham Fruchthandler are in the process of renovating and rebranding a 6.5 million-square-foot, 16-building complex in Sunset Park now known as Industry City.

an investment group led by developer Alchemy Properties, plans to transform the space into 40 luxury condos. Witkoff and Schron — who bought the building in 1998 for $137.5 million — will continue to own and lease the bottom 28 floors as offices. In light of that deal, Forbes editor Luisa Kroll told The Real Deal this fall that Schron would likely be the next New York City real estate mogul to crack Forbes’s list of the 400 richest Americans. (The cutoff to make the list this year was $1.2 billion, and Kroll said Forbes pegged Schron’s net worth at around $900 million after the Woolworth deal.) But Schron’s upside from the Woolworth deal is dwarfed by another recent victory, which has little to do with real estate (and which Kroll said Forbes had not even considered when estimating his wealth). In September, a New York State Supreme Court ruled that Schron has the right to take control of a nursing home company called SavaSeniorCare that operates more than 183 facilities in 27 states, with annual revenues that have been estimated at upwards of $1.4 billion.

A quiet life

Investor and developer Ruby Schron is known as one of the city’s most secretive landlords.

“When you meet [Schron], you think, ‘That is what it was like in the olden times.’ He drives a simple car. He doesn’t have a secretary with an English accent. He’s the kind of guy you would like to have as a father-in-law.” David Lichtenstein, the Lightstone Group nue, Stanton and East Fourth streets) and one that some residents believe is out of context with the neighborhood. In order to gain community board approval, Schron agreed in September to extend rent regulations by 20 years at 10 Stanton Street, a building he owns next door to the site. Still, the owners of the nearby Sperone Westwater Gallery have

Schron also owns and is actively leasing a portfolio of 3.5 million square feet of industrial properties scattered across Long Island. But the deal that has earned Schron more headlines than any other took place this summer, when he and Witkoff inked a $68 million deal to sell the top 30 floors of the Woolworth Building. The buyer,

A devout orthodox Jew who reportedly has eight children and some 50 grandchildren, Schron started out in real estate on the Lower East Side in the years after World War II, according to the Wall Street Journal. Reportedly, after one of his brothers died of war-related injuries, the family used a $5,000 government payment to buy a small apartment building on Delancey Street. The first sizable properties Schron himself purchased were a “building or two in the Bronx,” Lichtenstein said. “He managed and was careful and he took care of his tenants and refinanced the buildings, and it was inch by inch.” Schron founded Cammeby’s in 1967. By 2007, he was managing real estate assets of about $1 billion on behalf of himself and investment groups and partnerships. A list of transactions from just the past eight years provided by the real estate research firm Real Capital Analytics runs to some 10 pages with close to 200 transactions (including sales, purchases and refinancings). Mark Kronman, a former real estate attorney who first met Schron in the 1980s and later invested with him, said Schron’s success is not dumb luck. “He’s smart and he always had a lot

www.TheRealDeal.com January 2011 25

Pr o f i l e of partners,” Kronman said. “He did not get big overnight. He worked hard and he understood the market. Lenders trust him. Investors trust him. He’s nice to do business with.” According to Lichtenstein, Schron, is “the type of person who when you meet him, you think, ‘That is what it was like in the olden times.’ He drives a simple car. He doesn’t have a secretary with an English accent. He’s the kind of guy you would like to have as a father-in-law.” Yet despite his unassuming demeanor, Schron has done plenty of big deals in recent years. In 2003, an investment group led by Schron paid $600 million for a portfolio of about 6,000 outer-borough apartments from the family of Donald Trump. He has also, over the decades, acquired a huge portfolio of Mitchell-Lama apartment buildings, which have exploded in value as the government affordable housing program has ended and the rents have reverted to market rates. In 2007, he sold almost 4,000 units of former Mitchell-Lama properties in five separate complexes scattered across Harlem and Roosevelt Island for $940 million in what was then the second-largest residential portfolio sale in Manhattan history. The buyers were residential landlord Urban American Management and its private equity partner, City Investment Fund. More recently, in 2011, Schron sold the Lionel Hampton Houses in Harlem to real estate investor Israel Weinberger for $32.5 million. Schron has also hit his share of speed bumps — some in recent months. Since April, at least 19 properties he’s affiliated with have been foreclosed on in Minnesota, Colorado, Michigan, Arizona, North Carolina, Georgia and elsewhere, according to RCA. However, a source said that Schron has only a small, noncontrolling minority stake in those projects, which are all part of one commercial mortgage-backed securities pool, and that the decision to walk away rather than refinance was made by the majority owners. In New York, Schron appears to have been able to hold onto most of his apartments through the recession, refinancing at least 26 properties in the tri-state area since 2010 — including his Long Island industrial properties and Industry City.

ing empires spread out across more than two dozen states. Schron saw an opportunity in the real estate, but had little interest in getting into the nursing home business. He agreed to a plan that would split the companies into two new entities, one of which would hold the real estate and the other of which would hold the nursing homes. According to the plan, Schron and his investors would own the property com-

lions of dollars in lease payments from the nursing homes each year. The partnership soon soured, however. As part of the deal, Schron reportedly believed he had the ability to raise rents if interest rates rose and his financing costs spiked. But in 2007 when he told Grunstein he needed to do so, Grunstein said that he did not have the right, according to court documents. Then in 2009, the Department of Justice filed a complaint accusing

The Woolworth Building, where Schron and Witkoff sold the top 30 floors for $68 million.

Schron sold the Lionel Hampton Houses in Harlem for $32 million in 2011.

A “toilet paper” agreement In the 1980s, Schron began working with an attorney named Leonard Grunstein, who soon became a trusted real estate advisor. The two spoke almost every day and were close enough that Grunstein attended the weddings of some of Schron’s children, according to a lawsuit Schron later filed against Grunstein. Starting in 2002, Grunstein convinced Schron to buy two large nursing home and health-care businesses. The companies consisted of sprawl-

28 March 2012 www.TheRealDeal.com

In the wake of that lawsuit, Schron attempted to buy Grunstein and his partners out of SavaSeniorCare, the nursing home business — a right he thought he could exercise for $100 million as part of the initial agreement. A bitter two-year court battle ensued. According to the litigation that soon followed, Grunstein told Schron that he could use the agreement as “toilet paper,” and that if the dispute went into litigation, he would make sure the company was worthless over time.

From left: Steve Witkoff, who has partnered with Schron on 12 deals; the Lightstone Group’s David Lichtenstein, who’s also partnered with Schron.

pany and collect lease payments from the nursing home properties, which would be run by Grunstein and a banker named Murray Foreman. Schron raised almost $1.4 billion to finance the transactions and ended up with a company that had more than 18,000 patients. After splitting off the real estate assets, he was soon collecting tens of mil-

Schron, Forman, Grunstein and a number of others of arranging a $50 million kickback — in violation of Medicare laws — from a company that wanted to continue providing pharmacy services to the nursing homes. Eventually, Schron and his fellow defendants settled the complaint for $14 million, without admitting wrongdoing.

In court documents, Schron claimed Grunstein routinely “shouted at, cursed and threatened Schron.” According to court transcripts, Grunstein’s lawyer, who estimated the company’s revenue at $1.4 billion in 2010, complained that Schron “got even richer off this transaction — $92 million in rent a year since 2004. This man hit a geyser. For him to come in and complain about Mr. Grunstein or Mr. Forman is simply an outrage.” Attorneys for Grunstein did not return calls seeking comment. Finally this fall, a judge ruled that Schron did indeed have the right to acquire the properties. If Grunstein is unsuccessful in convincing an appellate court to grant an emergency stay, the deal could close as early as the first quarter of next year — and would make Schron, the real estate investor from Brooklyn, one of the largest nursing home operators in the nation. But he won’t be buying expensive suits anytime soon. TRD

www.TheRealDeal.com December 2012 37

REGULATING REAL ESTATE

Fiscal cliff hits home Housing-related benefits at risk in Washington BY KENNETH HARNEY ith the House and Senate back on Capitol Hill for the lameduck session, preliminary negotiations aimed at keeping the country from careening off the “fiscal cliff ” began in earnest last month. The macro issues — how to reduce federal spending and how to raise federal revenues — are getting the bulk of the attention. But buried away in the discussions are breadand-butter questions that could affect millions of homeowners and buyers. Will the biggest housingrelated tax benefits — for mortgage interest, property taxes and

likely that a still-fractious Congress will be able to pull off a major rewrite of the tax code during the lame-duck session. As a result, the big-ticket housing preferences such as the mortgage interest deduction — a nearly $100 billion-a-year revenue drain for the Treasury — would not be an action item in the coming several weeks, although agreements in principle could be forged to limit them in some way, with details to be worked out in 2013. But cutting back on housing preferences will be a bruising fight on Capitol Hill, where powerful groups such as the National Association of Realtors and the Na-

ers will walk away” — or file for bankruptcy, she said. Under the tax code, most forms of forgiven debt are treated as ordinary income — with the temporary exception of mortgage debt on principal residences — unless the borrower is insolvent. Carrie Johnson, senior policy counsel for the nonprofit Center for Responsible Lending, said allowing an expiration “would be inconsistent” with other ongoing efforts, including Fannie Mae and Freddie Mac’s new short sale program, the $25 billion “robo-signing” settlement with major banks and private loan modification programs run by lenders, all of which

Will the biggest housing-related tax benefits — for mortgage interest, property taxes and home-sale capital gains exclusions — be on the chopping block in the coming weeks? home-sale capital gains exclusions — be on the chopping block in the coming weeks? Or will these popular, multibillion-dollar annual supports for homeownership be deferred for the big game — the “grand bargain” negotiations involving a wholesale transformation of the tax code in 2013? Could Congress fail to extend the Mortgage Forgiveness Debt Relief Act before its expiration on Dec. 31, potentially exposing large numbers of owners who receive cancellation of unpaid principal balances on their loans to punitive income taxes on the amounts forgiven? Will smaller-scale deductions for mortgage insurance premiums, energy-conserving home improvements and tax credits for builders who construct energy-efficient new houses be renewed? Or could they become poker chips that “pay” for other concessions to real estate interests? Though strategies and timing could change in the House or Senate, the betting among lobbyists and other analysts is that it’s un-

tional Association of Home Builders view them in almost existential terms. Plus any changes to the write-offs — even in a grand reform where every special interest gets dinged — would need to be phased in over an extended period of time, given the important role that housing plays in the economy. Renewal of the mortgage debt forgiveness legislation may well be the most time-sensitive issue affecting homeowners during the lame-duck session. If it expires at the end of the year, owners who receive principal reductions through loan modifications, short sales or foreclosures by lenders next year could face painful tax bills: The IRS would treat their debt cancellations as ordinary taxable income. Michelle Adams, an attorney in Rockville, Md., with a large practice assisting distressed borrowers, said that “for some homeowners the amount forgiven is a couple of hundred thousand dollars.” If Congress lets the provision lapse, “the amount [owed in taxes] will be so prohibitive that many own-

encourage principal cancellations. With several bills pending in the House and one in the Senate that would extend the program for another year or two, lobbyists say there is a slightly better-than-even chance Congress will extend the debt forgiveness provisions, unless the entire fiscal cliff negotiations implode. Could some of the other housing issues — energy-conservation and mortgage insurance premium deductions especially — get sidetracked during the lame-duck session? Absolutely. Though the Senate Finance Committee approved a bipartisan bill to renew these and dozens of other tax code preferences in August, it never came to a vote in the full Senate and its fate is uncertain. Since neither of the housing extensions is weighty enough to pass on its own, they will need to be included in a much larger omnibus bill. If they don’t make it onto the bus in the final rush, they probably won’t survive the session. Kenneth Harney is a syndicated real estate columnist.

www.facebook.com / TheRealDealMagazine 38 December 2012 www.TheRealDeal.com

GOVERNMENT BRIEFS Fannie, Freddie see profits in third quarter Government-sponsored mortgage backer Freddie Mac posted a $2.9 billion profit in the third quarter, the Wall Street Journal reported, enabling it to make a dividend payment of $1.8 billion to the U.S. Treasury for its taxpayer-financed bailout. That marks Freddie’s fourth-consecutive quarterly gain, and stands in stark contrast to its loss of $4.4 billion in the third quarter of last year. It’s also the second consecutive quarter in which Freddie has not needed any assistance from the government. Fannie Mae, meanwhile, posted a $1.8 billion profit in the third quarter and paid $2.9 Susan McFarland billion in dividends to the Treasury, Reuters reported. The profit compares with a loss of $5.1 billion a year ago. For both GSEs, the gains were prompted by stabilizing home prices and stronger demand for housing. “We continue to see home prices improve again in the third quarter, albeit not nearly at the level they did in the second quarter. That is the single biggest driver in the results,” Susan McFarland, Fannie Mae’s chief financial officer, told Reuters.

Gair to head post-Sandy housing recovery in NYC In the wake of Superstorm Sandy, Mayor Michael Bloomberg last month appointed Brad Gair, former deputy commissioner at the New York City Office of Emergency Management, as the city’s director of Housing Recovery Operations. Gair’s primary responsibility is to create an inventory of temporary housing for New Yorkers displaced by the storm. Gair previously served as recovery offi- Brad Gair cer for the Federal Emergency Management Agency after the attacks of Sept. 11, according to Newsday.

Feds crack down on mortgage ads The Consumer Financial Protection Bureau and Federal Trade Commission last month announced a crackdown on mortgage advertisements, the Wall Street Journal reported. The agencies sent out warning letters about problematic ads to dozens of lenders, home builders, advertisers and brokers, and launched investigations in cases that raise more significant concerns. After scrutinizing some 800 mortgage ads, regulators found that some firms with no affiliation to the government added “Government Loan Department” to their return addresses. The regulators said they also found too-good-tobe-true promises of low interest rates and ads that falsely suggested that consumers had been preapproved to receive large sums of cash.

Cuomo: No hurricane deductibles for New Yorkers The New York State Department of Financial Services informed the insurance industry last month that “hurricane deductibles” would not be triggered by Superstorm Sandy, the Daily News reported. Because the storm did not have sustained hurricane-force winds when it hit in New York, Gov. Andrew Cuomo announced, homeowners will not have to pay hurricane deductibles, which often amount to 1 to 5 percent of a home’s value. The insurance industry in New York is state regulated, Reuters reported, so insurance policy language on hurricane provisions must be approved by the Department of Financial Services. “That Andrew Cuomo is good news for New Yorkers,” New York State Superintendent of Financial Services Benjamin Lawsky told the Daily News. “It means they will have to pay less out of pocket.” But New Yorkers whose homes were flooded by Sandy face larger problems: Homeowners insurance typically covers damage from wind, but not flooding. Compiled by Zachary Kussin

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In Sandy’s Wake

Surveying the destruction Mapping out the New York area’s real estate and property damage left in Sandy’s wake By Guelda Voien n the weeks since Superstorm Sandy, the media has vigorously documented the devastation wrought by the hurricane and its accompanying storm surge. That destruction — which includes the out-

New Jersey

.12

Long Island

Manhattan

Bronx

er-borough communities where families are still not back in their homes and Lower Manhattan buildings that are still empty because their mechanical systems were ruined — will cost billions to fix. This month, The Real Deal looked at some of the hardest-hit areas of the New York region to find out how much property was lost and what will go into rebuilding.

Queens

Red Hook

20.

54%

32% 26.

Brooklyn

Staten Island

oughly 300,000-square-feet of property — including at least 50 businesses — in this industrial-waterfront-area-turned-hipster-hub was damaged in the storm, according to Greg O’Connell, one of the area’s largest landlords. According to community housing group the Red Hook Initiative, damage to the neighborhood could total $50 million. The popular grocery store Fairway, in a building owned by O’Connell on the water, was among the hardest hit. The 52,000-square-foot store, which is still closed, took in five or six feet of water. Joe Sitt, who owns a 660,000-square-foot parcel next to furniture giant IKEA, also incurred property damage. O’Connell said he is offering concessions to tenants in some of his commercial buildings, including free rent and help rebuilding, on a “case-by-case basis.”

Hoboken, New Jersey

n the days after the storm, Hoboken Mayor Dawn Zimmer equated the city to a bathtub filled with water. Indeed, over 1,000 commercial and residential properties were impacted by the storm, according to a spokesperson for Zimmer’s office, adding that those building stats are preliminary and the final count “could be 5,000.” One Hoboken city official estimated that Hoboken saw at least $1 billion in damage, at least 80 percent of which was incurred at residential buildings. And of the approximately 140 residential Hoboken properties listed for sale before the storm, an estimated 56 percent were flooded or damaged, according to news reports. Applied Development Company, Ironstate Development and Toll Brothers were among the Hoboken landlords whose buildings were damaged.

40 December 2012 www.TheRealDeal.com

In Sandy’s Wake

Fire Island

s many as 100,000 homes and businesses on Long Island were destroyed or badly damaged in the storm, according to the New York Times. Two of the region’s barrier islands took the biggest hit. On Fire Island, the summer vacation mainstay, 80 percent of homes were reportedly damaged, and about 12 had been completely demolished or were washed out to sea. Fire Island “has been devastated,” Suffolk County executive Steve Bellone told Newsday. Meanwhile, Long Beach, the barrier island off Long Island’s south coast that was severely damaged and saw a number of homes completely destroyed, was being referred to in the past tense on Twitter.

The Hamptons

number of homes — including the residence of cosmetics baron Ronald Lauder in Wainscott — were damaged by Sandy. But the East End’s famed beaches and dunes took the brunt of the storm. The cost of repairing those dunes is “hundreds of thousands of dollars,” according to luxury developer Jeffrey Colle. On the commercial side, the Beach Barge restaurant at the Gurney’s Inn in Montauk was entirely destroyed, according to published reports. The oceanfront eatery had just been renovated, following damage from Hurricane Irene. Restaurants Gosman’s Clam Bar, Salivar’s and Duryea’s Lobster Deck also sustained considerable damage, according to the East Hampton Star, as did the Montauk Marine Basin, a yacht club. As for the impact that Sandy could have on the market, Douglas Elliman powerbroker Dolly Lenz told the New York Times that a client backed out of a $1 million year-round Hamptons rental after the storm, deciding to opt for something more affordable farther inland.

Rockaways

ne of the most tragic results of the storm was the widely reported fire that ripped through the Breezy Point section of the Rockaway peninsula and burned down roughly 110 homes. In addition, in other parts of the Rockaways, such as Belle Harbor and Rockaway Park, nearly every home was impacted, said Lisa Jackson of local brokerage Rockaway Properties. The federal and city governments are expected to contribute financially, but much of the rebuilding could be left up to individual owners. Jackson predicted that some reduced-cost homes may come on the market. “There are some older people who will probably [sell and] take a significant loss just to move on,” Jackson said. Homes that are reconstructed, meanwhile, may be built on pilings as a precaution against future storms.

Lower Manhattan

f the 183 Class A and Class B office buildings in Lower Manhattan, 49 were closed for at least a week following the storm, and 25 remained closed as of Nov. 21, according to brokerage Jones Lang LaSalle. The area also saw damage to some of its residential buildings, including 2 Gold Street and 88 Greenwich Street —which may not be inhabitable for months. While exact dollar estimates for the destruction in the area do not exist yet, it could be an entire year before the repairs at Boston Properties’ 4 New York Plaza are complete, according to news reports. Landlords Brookfield Properties, Rudin Management, Time Equities and TF Cornerstone also suffered damage at their buildings. “The Water Street buildings took the worst of it,” one source said.

Staten Island

taten Island was the site of 22 storm-related deaths and thousands were rendered homeless by Sandy, at least temporarily. According to published reports, about 14,000 homes were destroyed or damaged. A preliminary inspection by the city about a week after the storm found that 87 homes were completely uninhabitable and at least 227 were badly damaged but livable. Those numbers are expected to rise. As of mid-November, 16,714 Island residents had applied for FEMA aid, and more than $53 million in aid had been dispensed, according to an agency spokesperson.

Jersey Shore

pended boardwalks and destroyed amusement parks on the Jersey Shore provided some of the most dramatic images of Hurricane Sandy. But sources say the vast majority of damage in the area was residential, especially in hard-hit towns like Seabright, Mantoloking, Lake Como, Seaside Heights and Belmar. According to news reports, the damage exceeded $1 billion. As of late last month, FEMA had dispensed $235 million in assistance to New Jersey residents. Still, the rebuilding efforts will be complex, as each municipality decides whether to rebuild in areas close to the ocean. “A lot of people won’t rebuild,” said Eric Anton, an executive at Brookfield Financial whose summer home in Interlaken was spared by the storm.” There are a lot of people with no insurance and ... the question becomes, ‘Do we rebuild in an area where this can happen again?’ ” Meanwhile, Long Beach Island, a narrow barrier island off the shore’s coast, sustained some of the worst damage — at least $700 million worth, according to published estimates. In the Ship Bottom neighborhood, more than 80 percent of homes were still underwater days after the storm. And in Atlantic City, about 800 homes were destroyed, with damage upwards of $7 million, according to an estimate by Tom Foley, the Emergency Management Coordinator for the city. “Approximately everybody” in the city was impacted, he said. www.TheRealDeal.com December 2012 41

In Sandy’s Wake

Landlord losses

Snapshots of some of the building owners hit hardest by the storm

By Adam Pincus here are lots of Sandy-related stats out there — from the number of people who lost their homes to the number of meals served to storm victims to the amount of property damage the state incurred (Gov. Andrew Cuomo puts it at $42 billion). But there are two figures that haven’t gotten very much attention amid the flurry of numbers: the $8.6 billion that Mayor Michael Bloomberg estimated private owners sustained in property damage, and the $4.5 billion worth that the city government suffered, including the hundreds of public housing complexes and commercial buildings it owns. While hundreds of property owners suffered power outages and mechanical damage from corrosive salt-water flooding, some landlords were luckier than others. Indeed, as of late last month, the city said 95 percent of all residential buildings in the five boroughs with more than six stories had restored services and were back in business. Steady progress was made on the commercial front last month as well. For example, on Nov. 5, about 34 million square feet of office space (out of about 101 million square feet) in Lower Manhattan was closed. But three weeks later on Nov. 26, that figure had fallen to 19.9 million square feet in 23 buildings, according to brokerage Jones Lang LaSalle, which has been tracking the situation. Still, those landlords whose buildings are not yet reopened are dealing with mounting bills for both repairing the damage and for compensating their tenants in the form of rent abatements. Insiders expect “business interruption” insurance, which many owners carry, to cover such losses. But the possible loss of cash flow mixed with the financial squeeze from paying for repairs before insurance reimbursements come in can mean serious problems for owners. This month, The Real Deal looked at some of the landlords and managers who were most impacted by the storm — in many cases at more than one building.

City of New York The City of New York is one of the biggest landlords in the five boroughs, and as such, it suffered more property damage to its real estate portfolio than any commercial owner, according to a survey of news reports and sources by TRD. For days, more than 79,000 residents in 402 buildings were unable to return to their

42 December 2012 www.TheRealDeal.com

New York City Housing Authority apartments because they did not have electricity. While most had power restored within a week, more than 10,000 residents in developments such as Red Hook East and Red Hook West in Brooklyn and Redfern Houses in Far Rockaway were unable to return to

ter to reopen by the end of January. While the city has not issued a breakdown of the storm’s impact by agency, losses to NYCHA will be enormous — both for repairs and millions of dollars in rent abatements residents will receive for days they were without essential services.

its insurance company) will likely have to pay for repairs to its buildings’ water-damaged electrical and mechanical systems. On top of that, two tenants — one from each building — joined forces to file a lawsuit against TF Cornerstone last month. The suit seeks class-action status for an unspecified amount of damages they claim to have suffered through the storm because of alleged negligence in preparing for flooding and even the building design on the part of the properties’ owners. TF Cornerstone, through a spokesperson, said the lawsuit lacked merit and expected that it would be dismissed. “Our management team took all appropriate precautions in preparing for the storm, including installing the flood gates and advising tenants to evacuate as per [Mayor Bloomberg’s] order,” the statement said.

UDR

Building owners slammed by Sandy (from top left clockwise): TF Cornerstone’s Thomas Elghanayan, Joseph Moinian, Savanna’s Christopher Schlank, and Bill Rudin.

their homes until the middle of last month. In addition, the storm impacted other city-owned properties. For example, the Brooklyn Navy Yard Development Corporation, which operates the city-owned Navy Yard on the East River in Brooklyn, said in a statement that it suffered “significant damage” to its electrical infrastructure and had to bring in steam generators from Illinois to restore service to its 275 commercial tenants. Meanwhile, the city also suffered damage in buildings where it rents space. Indeed, Melohn Properties’ 509,000-squarefoot 180 Water Street, leased entirely by the city’s Human Resources Administration, remains closed. The agency is planning to relocate a large number of employees to 470 Vanderbilt Avenue in Brooklyn, where HRA already leases a large chunk of space, one insider said. An HRA spokesperson would not confirm the Brooklyn move, but said the agency expects 180 Wa-

TF Cornerstone The residential development firm — which is run by brothers Thomas Elghanayan and Frederick Elghanayan — is one of the few unlucky landlords that ended up with severely damaged apartment buildings in Lower Manhattan. In an unusually frank estimate, the company said it expects the 650-unit 2 Gold Street and the 189-unit 201 Pearl, both rentals, to be out of service until at least March 1. That means residents will be out of the buildings for four months. Based on an average rental rate of roughly $3,500 per month for the last 50 units listed at 2 Gold on real estate website StreetEasy, TF Cornerstone will end up losing an estimated $11.7 million in rent. The company also released residents in both buildings from their leases, though it’s unclear how many residents took the firm up on its offer. Those rental expenses, of course, do not include the millions more that the firm (or

The Denver-based residential real estate investment trust UDR, which owns 55,000 apartments nationally, has been the most transparent company about its financial losses. That’s in part because it’s a public company bound to report material impacts on its finances. It is the only firm that’s issued a statement estimating its financial damages from the storm so far. On Nov. 12, the company said its damages might be as much as $32 million for its three New York residential rental properties: 95 Wall Street, 10 Hanover Square and Rivergate at 401 East 34th Street. Tenants who had been evacuated after the late October storm were not able to return to Rivergate and 10 Hanover Square until Nov. 12, and 95 Wall a few days later. The firm said it has insurance that covers flood damage and business interruption, and it expects the carrier to cover all of its expenses, even though it has a $1.5 million deductible.

Edge Funds Advisors and HSBC Alternative Investments One of Lower Manhattan’s biggest storm causalities has been 4 New York Plaza. Images of giant hoses pumping water out of the building have accompanied news stories and blogs posts for the last month. The building is also home to some high-profile tenants, including the New York Daily News and U.S. News & World Report — both owned by Mort Zuckerman — and JPMorgan Chase. The owners of the 1.1 million-square-

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

In Sandy’s Wake

A sampling of high-profile ManhAttan buildings that remain closed post-Sandy Address

Owner

Type

Size

Estimated total time closed

4 New York Plaza

Edge Fund Advisors/ HSBC Alternative Investments

Office

1.1 million sf

One year

2 Gold Street and 201 Pearl Street

TF Cornerstone

Residential

839 units

Four months

South Street Seaport

The Howard Hughes Corporation

Retail

285,000 sf

Eight weeks or more

199 Water Street

Jack Resnick & Sons

Office

1.2 million sf

Eight weeks or more

180 Water Street

Melohn Properties

Office

509,000 sf

Six to eight weeks

80 Pine Street

Rudin Management

Office

993,000 sf

Six weeks

400 West 12th Street (Superior Ink)

Residential condominium

Residential

53 units

Six weeks

17 Battery Place North and South

The Moinian Group

Office

874,000 sf

Six weeks

40 Rector Street

Commercial condominiums

Office

575,187 sf

Unclear

125 Maiden Lane

Commercial condominiums

Office

368,900 sf

Unclear

Source: News reports, landlord statements and TRD reporting.

From left: TF Cornerstone’s 2 Gold will not reopen until at least March 2013; 4 New York Plaza is expected to be closed for a year.

From left: Savanna’s 80 Broad Street is still closed, but is expected to reopen before the end of the month; the city rented space at 180 Water Street, which will be closed until the end of January.

foot tower — Washington, D.C.-based Edge Fund Advisors and HSBC Alternative Investments, a division of the London-based HSBC — had the unlucky fortune of buying the property in May, just five months before the storm. They purchased it from Harbor Group International for $270 million (see related story on page 74). Now they are dealing with heavy damage from flooding. While they have not publicly commented on the situation, Zuckerman said it would be a year before his company could return to the building, the Observer reported.

BUILDING PHOTOS FROM COSTAR

28 March 2012 www.TheRealDeal.com

His two publications lease just under 100,000 square feet combined (on floors six and seven), figures from CoStar Group show. JPMorgan, the building’s largest tenant, leases nearly 800,000 square feet.

Cooper Square Realty

Midtown-based Cooper Square Realty, one of the largest residential management firms in the city, said the storm caused “extensive damage” to approximately 40 of the New York City buildings it manages. As a manager, and not an owner, Cooper Square is not on the hook for the damage.

Still, the firm is potentially exposed in another way: litigation. And it’s responsible for getting its buildings operational again — a time-consuming process that eats into the company’s productivity. Cooper Square is a subsidiary of the Florida-based FirstService Residential Management (the firm’s Toronto-based parent company, FirstService, owns Colliers International). Some of the buildings it manages include Forest City Ratner’s rental 8 Spruce Street; the Downtown Club, a condominium at 20 West Street developed by the Moinian Group; and the condominium Greenwich Street Residences at 88 Greenwich Street, developed by Thor Equities and Buttonwood Real Estate. Since the condos that Cooper Square manages are sold out, the developers are not as exposed. But the same can’t be said for Cooper Square. One condo owner at 88 Greenwich, which is expected to reopen early this month, claimed in a $35 million lawsuit that the company and the condo board were unprepared for the storm. Adam Leitman Bailey, founder of the law firm with the same name, said it was unusual for a plaintiff to file a lawsuit so quickly, when damages are likely not well understood. “Whether building owners [and managers] should have taken more actions to prevent the consequences to their buildings from Sandy will take years to be answered in many courts of law,” Bailey said. Cooper Square did not respond to a request for comment. But FirstService said it would provide $10 million in loans to owners of the properties it manages in New York through Cooper Square as well as in New Jersey to speed up repairs in buildings where insurance payouts can take weeks or months.

Savanna The real estate investment fund has snapped up distressed properties all over Manhattan during the past several years,

including four in Lower Manhattan. Two of those — the 410,000-squarefoot 80 Broad Street and the 480,000-square-foot 100 Wall Street — remained closed as of late last month. Brokers in Lower Manhattan, who did not want to be identified discussing individual buildings, said they expected 80 Broad to reopen before the end of December. It’s unclear when the second building will reopen, and a spokesperson for the firm declined to comment. The smaller 80 Broad takes in about $1 million per month in rental revenue, while 100 Wall brings in about $1.5 million, city Department of Finance records show. An administrator at FGI Finance, a tenant at 80 Broad that provides business loans and other services, said Savanna kept the company posted on developments with several e-mails over the past few weeks, but noted that more communication about when the building would reopen would have been better. “It would have been nice, so we could have prepared a little better,” said Christine Casale, who worked remotely all of last month.

Rudin Management The family-owned development firm owns five large office buildings in Lower Manhattan. While several were closed temporarily, such as the 405,211-square-foot 1 Whitehall Street, two of them remain out of operation. Those two are the 993,000-squarefoot 80 Pine Street (with tenants including law firm Cahill Gordon & Reindel) and the 292,627-square-foot 110 Wall Street, which is home to trading firm Toussaint Capital Partners. One Downtown broker speculated that 80 Pine would reopen before the end of the year. It was unclear, however, when 110 Wall would reopen. Each month that a building is closed, the monthly gross income is put at risk, of course. At 80 Pine, for example, that inContinued on page 96

www.TheRealDeal.com December 2012 43

IN SANDY’S WAKE

Brokering after Sandy A look back at the post-storm fallout in Manhattan, where rentals boomed and sales slowed

BY KATHERINE CLARKE urricane Sandy — the worst storm to hit the Northeast U.S. in decades — sent Manhattan’s residential real estate brokers into a tailspin. In addition to lost power, water and heat at home, brokers were inundated with calls and texts from clients seeking to be relocated in the wake of the storm. The disruption in Manhattan pales in comparison, of course, to the devastation in parts of Brooklyn, Queens and Staten Island, where tens of thousands of homes were destroyed or damaged. But the storm’s effect on the Manhattan real estate market was dramatic nonetheless. While closings effectively ground to a halt across the borough — even on the Upper East and Upper West sides, which saw little impact from the storm — rental activity shot through the roof, particularly for short-term leases. By press time, just 43 closings citywide had been recorded for the week immediately after the storm, down from 662 the previous week, according to data provided to The Real Deal by listings website StreetEasy. In Manhattan, just 17 closings from that week have been recorded, compared with 238 the week prior. Scheduled closings were canceled or postponed “largely due to challenges in power and transit,” said Corcoran Sunshine sales director Gordon Hoppe, who estimated that his firm saw nearly 80 percent fewer closings than usual in the week following Sandy. Due to power outages and flooding Downtown, “anyone that had an office below 39th Street didn’t have an office,” explained Rolan Shnayder, director of new development lending at the mortgage bank H.O.M.E, whose office is just north of Union Square at 215 Park Avenue South. As a result, “If you had a closing that was scheduled for that week, you were not closing,” he said. “There are so many people involved in a transaction, including the title company, the mortgage company, the buyer, the seller, both lawyers and both brokers,” Shnayder said. “Somebody in that equation was bound to be out of commission.” Many of those closings were rescheduled for the weeks after the storm, however. Most Manhattan sales brokers said they expect to feel a slight pull on their wallets in the next few weeks due to the temporary lull in business, but should be-

44 December 2012 www.TheRealDeal.com

gin to recover now that transactions have resumed. “Closing activity picked up dramatically as the city began to recover,” Hoppe said. “In the two weeks after Sandy, we actually saw an average increase of over 60 percent as compared to the eight weeks leading to the storm.” But some in the industry saw significant financial repercussions from the slowdown in sales immediately after the storm. Shnayder said he lost three deals with clients who called him to start a transaction during the after-

math of the storm. Without power or a working phone line, he explained, he simply could not take on the work. A refinancing deal he had lined up in Montauk also stalled after his client’s basement flooded.

Short-term deals For some Manhattan brokers, however, the uptick in leasing activity after the storm was something of an economic boon. In the immediate aftermath of the storm, quick rental finds were in high demand and short supply. Brokers told TRD they were busy identifying short-term housing for clients who were displaced from Downtown homes. Any broker who was able to do Manhattan rental deals in the wake of the storm likely made “a ton of money,” said Julia Bryzgalina, director of sales and leasing at the Wall Street branch of Platinum Properties, which was temporarily closed after the storm.

In the two weeks after Sandy hit, Bryzgalina estimated, Platinum Properties saw a 250 percent spike in inquiries about short-term rentals and almost a five-fold increase in phone calls about long-term Financial District apartments, prompted by area residents who needed to relocate immediately but still wanted to stay in the neighborhood. For six days after Sandy, Town Residential’s Danny Davis had

numbers on lampposts in the Financial District, especially in and around hardhit rental buildings such as 2 Gold Street. While trying to pick up new customers during a natural disaster might initially appear “scavenger-like,” many storm victims were grateful to be pointed in the direction of someone who might help them find a home, Bryzgalina said. “We were getting parents [of the residents in 2 Gold] saying, ‘My daughter was moved out and I saw your listing. I was wondering if she could see it today,’ ” said

no heat, water or electricity. Still, he was kept busy “relocating anyone displaced,” he said. To do that, Davis said he approached former clients and business contacts to see if they could provide short-term housing. “I reached out to many customers to whom I’d sold pieds-à-terre to see if they would be open to allowing short-term rentals,” he said. “I also went to different landlords I know to see if they would consider a short-term lease instead of the one-year minimum.” Using those strategies, he found at least one displaced client a $45,000-permonth temporary rental at 42 Wooster Street, the building where “Homeland” actress Claire Danes once lived. To get in touch with residents lacking an Internet connection, many brokers posted flyers with their names and phone

Bryzgalina. (Residents of the TF Cornerstone building were released from their leases following the storm after the building was deemed inhabitable.) Of course, completing rental deals after the storm wasn’t easy. “I had to say that the majority of the apartments in my ads were not available temporarily,” Bryzgalina said. “We’d even get calls asking about 2 Gold Street, since it took us a few days to remove our listings.” Finding available apartments was more difficult than normal, because many landlords in hard-hit areas did not update their rental databases in the wake of the storm, said Cecil Weeks of Miron Properties. As of late last month, he said he still could not fully trust databases and search results. “We’re having to take extra steps to be sure we’re not showing apartments that

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

In Sandy’s Wake have already rented or have pending applications,” Weeks said, noting that one solution was to focus on landlords located in neighborhoods not severely impacted by Sandy. But Sandy-related disruptions were not limited to Downtown. The day after the storm, AC Lawrence agent Holden Sherman awoke in his Upper West Side apartment to find that a car windshield outside his building had been shattered by falling debris. And Miron Properties’ Sandra Falus actually moved a client — referred to her through a family friend — into her own Upper East Side apartment. The client’s ground-floor rental at 555 East 78th Street had been flooded in the storm. “FEMA was overwhelmed and took their time to process everything,” Falus said. “In the meantime, this poor woman needed a place to live.” After housing the client in her apartment for a week, Falus eventually found her another rental on a higher floor at 555 East 78th Street.

Hard-hit areas Despite this temporary rental uptick, the real estate markets in hard-hit neighborhoods face daunting challenges ahead. Sales listings in Manhattan’s Zone A — areas evacuated before Sandy hit — have dropped dramatically since the hurricane, New York Magazine reported last month. In the two weeks following the storm, just 22 apartments were sold in Zone A — less than half the number for the same two weeks in 2011, according to StreetEasy data cited by New York Magazine. A total of 69 apartments in Zone A were pulled from the market as a temporary measure following the storm. Bond New York’s Larry Dusseau was forced to stop showing listings at the Citylights cond-op on 48th Avenue in Long Island City, where he also lives, when the lobby was flooded with water during the storm. He couldn’t start showing again until the water receded, and the building’s elevators had started working again. The Corcoran Group’s Richard Nassimi, director of sales at the W Downtown, said he joined workers in the week after the storm pumping water out of the building’s lobby and basement. The staff could not show apartments in the building for at least a week, “because no one could access the building,” he said. Nassimi said it took two to three weeks to fix the damage to the lobby and the building’s systems. As a result of the storm, a number of Manhattan buildings are “completely shut down or condemned,” Weeks said. Some buildings, like 88 Greenwich Street, were deemed unsafe and unin-

Above: Flooding at the Citylights building in Long Island City. Below: Fallen debris outside AC Lawrence agent Holden Sherman’s Upper West Side apartment the day after Sandy hit.

Town Residential’s Danny Davis approached former clients and business contacts to see if they could provide short-term housing for Sandy victims.

LIC PHOTO BY SASCHA REINKING PHOTOGRAPHY; UWS PHOTO BY HOLDEN SHERMAN

28 March 2012 www.TheRealDeal.com

Rolan Schnayder, of mortgage bank H.O.M.E., said he lost three deals with clients who called him to start a transaction during the storm’s aftermath.

habitable by the Department of Buildings, prompting Kleier Residential and Douglas Elliman to pull listings there from the market in early November. Residents of the Greenwich Street building, who will be unable to return to their homes until March at the earliest, filed a $35 million lawsuit against the property’s condo board and management company last month, citing a lack of precautions against flooding. Those displaced from 2 Gold Street also filed suit against TF Cornerstone. Young Moon, an agent at New York Residence with a $599,000 deal in contract at 88 Greenwich, said the sale is now “up in the air,” with the buyer on the fence about whether to proceed. “[The buyer] is waiting to see how fast [the situation] can be corrected,” said Moon. “They cannot indefinitely wait around. “Everybody is having a difficult time — the seller, buyer, brokers and attorneys,” he added. “We don’t know exactly what the time frame is.” Even once these damaged buildings come back online, it may take some time for sales to recommence. Sandy reportedly left many mortgage lenders nervous about storm-related damage to properties currently listed for sale or under contract. In response, a number of lenders are requiring that all properties be reinspected prior to closing. This could delay transactions, causing buyers to pull out of their contracts, brokers said. Potential buyers are also worried about the solidity of their investment and are putting their offers on hold, said Bryzgalina, who lost some rental deals at 2 Gold Street. And buildings Downtown will likely have to lower their rents and grapple with heightened vacancies as they recover from the damage incurred during the storm, meaning slightly lower commissions for brokers. When buildings such as 2 Gold Street come online, landlords will be faced with large amounts of vacancy following the departure of clients who broke their leases, Weeks said. “The effect of the storm will still mean a major increase in vacancies within affected neighborhoods,” he said. “The influx of inventory will create very stiff competition for the surrounding buildings and landlords in the form of lower rents and incentives.” Still, buyers don’t seem to be shying away from Lower Manhattan because of the possibility of future storms, said Nassimi, who said showings at the W have surged in recent weeks. “Buyers know that [Sandy] was something called an act of God,” he said. “It’s not like New York is in a seismic area where they’re going to have an earthquake every two weeks. They’re realistic about the situation.” TRD

www.TheRealDeal.com December 2012 45

In Sandy’s Wake

A storm’s silver lining?

Sandy’s devastation could bring a boom to the construction and real estate industry First wave of repairs

Mayor Bloomberg surveying Sandy destruction in the wake of the storm.

By C.J. Hughes he New York City area is very much still in recovery mode from Superstorm Sandy, which devastated the city and its suburbs in late October. Debris is still being cleaned. Public transportation is not yet fully restored. And as of press time, many are still homeless. Plus a pall of mourning is present for the nearly 100 people who died from the disaster, many by drowning in their basements. Yet the deadly storm has a scrap of a silver lining for the real estate industry. That’s because rebuilding after the hurricane — not to mention preparing for future megastorms — will require an effort of Marshall Plan proportions. That effort, which is expected to run into the tens of billions of dollars, could have benefits across the board for the real estate industry, from the developers who are being brought in to reimagine new infrastructure to the contractors who will nail together the boards to the brokers who will be involved in relocating homeowners and tenants. “Our building industry, our landscaping industry, our retrofitting industry … they will have work for the next decade,” said Ron Shiffman, a professor of urban

46 December 2012 www.TheRealDeal.com

A stretch of destroyed retail on Rockaway Beach Boulevard in Queens.

planning at Pratt Institute and a former member of the City Planning Commission. “If we really take seriously the lessons of Sandy, it will kick-start a whole new economy.” Of course, not all of the real estate industry is feeling rosy — many landlords are still grappling with office and apartment buildings that have mechanical systems destroyed by flooding (see related story on page 42). But there is a consensus that a storm that so severely damaged, flattened or wiped out entire communities can’t help but stimulate the building and development businesses.

The Bloomberg administration had already spent $150 million or so on storm cleanup and meals through the middle of last month. And while many are reluctant to publicly comment on the upside of the storm, more state and city funds are likely to be available soon, much of it flowing into the hands of the real estate and construction industries. “The construction industry is 10 percent of the GDP, so this is going to affect a wide spectrum of people,” said attorney Sarah Biser, who heads up the construction group at law firm McCarter & English. “Everybody in the food chain is going to benefit.”

Many of the initial post-storm construction jobs were handled by the city. The city’s initial $150 million layout included about $22 million to the Department of Transportation. That money went to repair the Battery Park Underpass, the mini-tunnel at the tip of Lower Manhattan that connects the East and West sides, and to fix the Whitehall and St. George Staten Island Ferry terminals, including damage to the electrical systems that lift the boats’ ramps. The city has also set aside another $500 million for repairs to the 23 damaged schools and the hospitals and health-care facilities that were hit, including NYU Langone Medical Center on First Avenue in Murray Hill and nearby Bellevue Hospital, which took on 17 million gallons of water, according to news reports. Both had to evacuate patients because of severe flooding. A spokesman for NYU Langone, which is estimated to have suffered as much as $1 billion in damage, did not return a call for comment. Fixing those health-care facilities will no doubt create construction and real estate jobs. There will also be openings for construction firms through NYC Rapid Repairs. The new $500 million program, which is a joint effort between the city and the Federal Emergency Management Agency, is an attempt to ease the burden of the rebuilding process by paying for the cost of repairs. To curb fraud, homeowners first must qualify and register with FEMA, through the website DisasterAssistance.gov. By Thanksgiving, 6,000 New Yorkers had done so, city officials said. (The program is targeted to fixing homes that have not seen severe structural damage — the 891 buildings and homes that have been slapped with “red tags” by the city’s Department of Buildings, indicating they are currently unsafe to enter, are off-limits.) Brad Gair, who Bloomberg appointed as director of Housing Recovery Operations after the storm, said the program was key to getting people back in their homes. “One way to limit the number of temporary housing needed is to get homeowners back in the places they already live — this program will let us do that quickly and efficiently,” Gair said in a news release. Tishman Construction was selected by the city to conduct assessment visits with qualified owners. By Thanksgiving,

PHOTOGRAPH OF ROCKAWAYS FOR THE REAL DEAL BY ADAM PINCUS; PHOTOGRAPH OF BLOOMBERG BY EDWARD REED VIA THE MAYOR’S www.TheRealDeal.com January 2011OFFICE 25

In Sandy’s Wake 134 Tishman-led teams, including carpenters, electricians and plumbers, had performed assessments at 1,700 houses, according to Bloomberg’s office. Tishman is being compensated for the work by the city, a source confirmed, but the exact amount is unknown. After Tishman’s assessment, a city-provided contracting team will make the necessary repairs, though the city has not yet selected which private construction firms will be brought on to do that work. In the middle of last month, it put out a call for interested firms to submit proposals. Nine proposals have been submitted, including from Turner Construction Company, Skanska, Sciame, Tutor Perini Corporation and E. W. Howell, according to sources close to the process. Between six and eight firms will be selected, sources said. City officials had actually expected to receive more submissions — around 15, said Louis Coletti, president of the construction trade group Building Trades Employers’ Association of New York City. “The interest is not as high as the city thought it would be,” said Coletti, who has spoken to the mayor’s office about the plan. The mayor’s office didn’t return several requests for comment. One concern that construction firms have is that the city will not pay the repair teams a competitive wage, Coletti explained. And it’s not like those companies are hurting for work — landlords in Lower Manhattan have them working round the clock to repair their damaged buildings, Coletti said. But while interest may have been somewhat weak among general contracting firms, it’s been robust among subcontractors, who’ve also been encouraged to sign up for the Rapid Repairs program, Coletti said. Indeed, 1,800 members from the BTEA had registered with the city as of the fourth week of last month, Coletti said; plus, another 1,500 companies who are not members had signed up through a website set up by the association. Meanwhile, the DOB announced last month that it will raze 200 unsalvageable (and dangerous) red-tagged homes in hard-hit parts of Queens, Staten Island and the Bronx. And, the agency said, another 500 could come down later. If New York or other states decide that hard-hit areas are too vulnerable — consider that Breezy Point in the Rockaways, which sits on a narrow spit of land and which has lost 110 of the 200 homes destroyed citywide — it could pursue the somewhat radical action of preventing homeowners from rebuilding. However, any move like that is bound to be highly controversial, analysts said, and it remains unclear how homeowners would be compensated. In that sense, there could be thousands

of displaced people in need of housing with money to pay for it, a situation that could have direct upsides for the real estate industry, sources said, though likely not immediately. In addition, huge strips of the boardwalks in Queens and Brooklyn were ripped apart by Sandy and need to be replaced. For example, retail businesses like Tatiana,

ing and, in some cases, reducing a house to its framing — pay between $3,000 and $5,000, though other builders are charging $10,000 a house. Since most homeowners have not yet received insurance money to cover their losses, many are paying out of pocket, hoping they’ll be reimbursed later, Scarinni added. A large portion of insurance proceeds

Moody’s projects will give a slight bump to the national economy by early next year. And Scarinni, like others, said the rebuilding effort hasn’t even begun in earnest. Once it does, it will be massive, he said, noting that there might be a shortage of contractors to go around. That sentiment is echoed by Donna Olshan, owner of Olshan Realty, a luxury

An overview of the 110 Breezy Point homes that burned down during the storm.

Governor Cuomo unloading water for storm victims.

President Obama touring storm damage on Staten Island last month.

A destroyed home on Staten Island.

a popular Brighton Beach restaurant, lost its façade. And famed hot dog mainstay Nathan’s in Coney Island is closed until the damage it sustained is repaired.

Picking up the pieces Some homeowners will, of course, stay and rebuild, like in New York’s hard-hit outer boroughs and the coastline communities of neighboring states. Perry Scarinni, a homebuilder based in Holmdel, N.J., said he had three times more business last month than he usually has in November. In waterfront communities like Monmouth Beach and Sea Bright, where the Atlantic breached a sea wall of 15 feet, Scarinni has already repaired dozens of homes, he said. His jobs — which have required removing soggy and (possibly contaminated) dry wall, ripping out wood floor-

OBAMA PHOTO 2012 BY SPENCER T. TUCKER VIA THE MAYOR’S OFFICE; CUOMO PHOTO FROM THE GOVERNOR’S OFFICE 28 March www.TheRealDeal.com

— which FEMA caps at $250,000 for flood repairs, plus another $100,000 for water-damaged belongings — will likely be spent on contractors like Scarinni, meaning that more work will undoubtedly be directed their way. That’s because many lenders, in order to protect their investment, hang onto insurance payouts until a house is repaired, tucking the money into an escrow account. In other words, homeowners can’t just pocket a check and retire to Mexico. Lenders “don’t want the market to crash,” Scarinni said. Economists say these types of construction jobs go a long way toward stimulating the economy. They typically pay better than other blue-collar jobs and also typically lead to spending on building materials at stores like Lowe’s and Home Depot — a trend that rating agency

real estate brokerage in Manhattan (see related story on page 44). She’s worried about the heating systems in many highrise condos and co-ops that Sandy rendered useless. Not only do those industrial-grade boilers need to be manufactured, but specialists also need to be found to install them. As a result, anybody in that line of work will likely be busy for months. Lawyers, too, say legal services will be required, especially if there’s a rush to rebuild. “When things are done quickly, there are usually lawsuits,” Biser said. As of late last month, two lawsuits had been filed by residents for negligence at a pair of Lower Manhattan apartment buildings: 88 Greenwich Street, a 452unit condo, and 2 Gold Street, a rental owned by TF Cornerstone. Continued on page 100

www.TheRealDeal.com December 2012 47

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1984: CITY ANNOUNCES $340M METROTECH CENTER DEAL

ayor Ed Koch and other city officials unveiled an agreement with Forest City Enterprises and the Polytechnical Institute of New York to build a $340 million office, retail and research complex in Downtown Brooklyn 28 years ago this month. The City Hall announcement identified Cleveland-based Forest City as the main developer for the MetroTech Center project, which received a 99-year lease and 22 years of tax abatements as part of the deal. In addition, Polytechnical was selected to build a $12.4 million library. Steven Spinola, now president of the Real Estate Board of New York, helped negotiate the agreement with Forest City. At the time, he was president of the city’s Public Development Corporation (now the Economic Development Corporation). The project was planned with 1.7 million square feet of commercial space, but more than 6 million was ultimately constructed at a cost of $1 billion. Mayor Ed Koch Forest City Ratner, the company’s local subsidiary, began construction on the first of the office buildings in 1989. The last office tower to be constructed was 12 MetroTech Center, which opened in 2004.

1957: CITY IS FIRST IN NATION TO BAN BIAS IN PRIVATE HOUSING

he New York City Council passed the nation’s first fair housing legislation targeting bias in private housing 55 years ago this month. The law banned discrimination in privately owned apartment buildings and some homes on the basis of race, religion or national origin. Mayor Robert Wagner signed the bill into law Dec. 30, 1957. The Fair Housing Practices bill — which was also known by its sponsors’ names as the Sharkey-Brown-Isaacs Law — took effect April 1, 1958. The law expanded on antidiscrimination laws in the city that already barred bias in public housing and in publicly financed housing. The new law, which covered multiple dwellings with three or more units, was highly controversial at the time. A spokesper- Mayor Robert Wagner son for the city’s leading industry trade group, REBNY, which opposed the law, said, “We believe that it violates the fundamental rights of the owner of private property.” New York was ahead of much of the country in terms of passing legal measures targeting discriminatory housing practices. The national Fair Housing Act, which banned housing bias nationally, was not signed into law until 1968.

1912: MAYOR APPOINTS BILLBOARD AD COMMISSION

ew York City Mayor William Gaynor appointed a seven-person commission in response to a public outcry against the proliferation of billboards in Manhattan, 100 years ago this month. Gaynor created the Billboard Advertising Commission to investigate and analyze the unpopular and rapid expansion of outdoor advertising. A city study released a few months before the commission was formed found there were 4,600 billboards with a total of 3.8 million square feet displayed around Manhattan. Meanwhile, an article published in American City magazine said there were 41 billboards around Central Park alone, with some as tall as 30 feet. The commission came about as a reBillboards in Times Square sult of the urban advocacy movement called City Beautiful. Supporters saw public ads as a blight. A year after the commission was created, it issued a wide-ranging report, generally seeking to ban large signs from parks, squares, public buildings and major thoroughfares. But real estate interests, including REBNY, objected to several of the proposals. At the time, most of the recommendations were considered too extreme, but a historic 1916 zoning resolution clamped down significantly on billboards, including banning them in residential districts. Compiled by Adam Pincus

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Residential Brokerage

The start-up generation The 40-and-under entrepreneurs who are bringing new strategies to residential real estate and shaking up the brokerage industry in the process

Blu Realty founders, from left: David Tobon, Moshe Balalo, Alon Chadad, Michael Arcos and Andy Kim

By Leigh Kamping-Carder he entrepreneur has had something of a moment lately, with both Presidential campaigns heaping praise on small businesses in addition to self-employment looking increasingly attractive after the corporate bankruptcies and mass layoffs spurred by the economic crisis. But before you think Silicon Valley has cornered the market on entrepreneurial whiz kids, take a look closer to home: New York City real estate has seen a bevy of new residential firms in recent years. Opening a real estate firm requires relatively little capital, and in the past 10 years, online listing portals (such as OnLine Residential and StreetEasy), smartphones and search engines have made it easier than ever to open an office and get just as much exposure as brand-name brokerages. Around a decade ago, a batch of new Manhattan residential brokerages appeared and has since proved they could take on the city’s established players. This wave of entrepreneurs included Core’s Shaun Osher, Bond New York’s Bruno Ricciotti and Noah Freedman, the Modlin Group’s Adam Modlin, Rapid Realty’s Anthony Lolli, Nest Seekers International’s Eddie Shapiro and aptsandlofts.com’s David Maundrell. Maundrell, 38, started aptsandlofts

50 December 2012 www.TheRealDeal.com

“A lot of people have lost the respect for the business, in my opinion. … It’s not just making the deal, it’s how you make the deal.” Alon Chadad, Blu Realty

Waterfall mansion

.com in a 550-square-foot office in an industrial section of Williamsburg in late 2002 with just $8,000 of savings while also suffering from credit card debt. Last year, the firm had the second-highest number of new development projects

in the city, according to The Real Deal’s 2011 ranking. The firm now has about 60 agents, Maundrell said, and last month opened its second office, a 43-desk space in Cobble Hill, Brooklyn. Likewise, Shapiro, 37, founded Nest

Seekers in a tiny office in 2002, using computers he bought off eBay for $200 each and enlisting a computer programmer to ensure a steady stream of traffic to the firm’s website. With 11 offices and more than 400 agents spread across New York City and the Hamptons, the firm is one of the largest residential brokerages in Manhattan and on the East End. But now, a new generation of young New York City brokers is attempting to follow in the footsteps of these pioneers, starting their own residential firms and ushering in a different approach to the business of marketing homes. This month, TRD looked at the under-40 entrepreneurs who’ve recently founded their own residential firms and have proven that they are more than a flash in the pan. Many of the young executives we’ve spotlighted here share certain traits: They opened in unproven neighborhoods, such as Williamsburg or the Financial District; they balked at christening their firms with

www.TheRealDeal.com January 2011 25

Residential Brokerage their own surnames; they built websites that were just as important as their brickand-mortar offices; and they bristled at what they saw as the “stuffy” corporate cultures of the city’s established firms. Miron Properties founder Jeff Schleider, for example, started his own company in part because there was “no

cha opened the Manhattan franchise of the Texas-based Keller Williams in 2011. And last month, Donald Trump opened a residential brokerage Trump International Realty, installing his three children — Donald Jr., Eric and Ivanka — in senior executive positions. While many of those on TRD’s list have

Platinum Properties cofounders, from left: Dezireh Eyn, Khashy Eyn and Daniel Hedaya

The Modern Spaces office in Williamsburg

Eric Benaim of Modern Spaces

Andrew Barrocas, CEO of MNS

place that you could go into work in jeans and still expect a high level of professionalism from the people around you,” he said. Not all young executives or new firms made our list. Some are making waves in the brokerage world through an affiliation with a larger firm. For example, Ilan Bra-

small firms, they are growing — expanding their agent rosters and offices, building relationships with developers and marketing pricier listings. “Usually, innovation comes not from the biggest, but the smaller, more creative firm that can really experiment with new

64 March 2012 www.TheRealDeal.com

things,” said Rubicon Property CEO and cofounder Jason Haber. The Ad Man

Andrew Barrocas, MNS

f you’ve seen the ad, you can probably quote the tagline: “I don’t remember his name, but his apartment …” The risqué campaign, which debuted in August 2011, is the brainchild of the in-house marketing team at MNS, the brokerage created out of the 2009 merger of the Real Estate Group New York and the Developers Group, which were founded in 2005 and 2003, respectively. “We’re more than happy to go out on the edge and try things that are new, that are memorable, that have a personality to them,” said Andrew Barrocas, 33, who became CEO of MNS in 2010. An MNS campaign for the Edge condominiums in Williamsburg winked at the neighborhood’s gritty past (“Grit meets glamour”), while another cheekily boasted of a new development’s larger unit sizes (“Ours is bigger than yours”). MNS campaigns sometimes result in baffled calls from Barrocas’s mother, he said, but the ads have helped sell units faster and fetch higher prices than the competition. He claimed the Edge’s marketing campaign added $200 per square foot to the building’s sales prices. A former Citi Habitats agent, Barrocas left after that firm was sold in 2004, and then helped launch the Real Estate Group New York, which focused on resales and rentals in Manhattan. The Brooklyn-based Developers Group, cofounded by Highlyann Krasnow, specialized in new developments, so a merger was natural, Barrocas said. Krasnow is now a partner in MNS and heads up the new development division. Rechristened MNS — a short, memorable name, Barrocas said — in 2011, the firm now has about 100 agents in Manhattan and Brooklyn and is poised to open its fourth location, an on-site office at the Edge. Barrocas said he always wanted to follow in the footsteps of his father, a self-employed garment manufacturer, and open his own business. “You go to work in a large company and one day, at 50-something-years old, you get a knock on the door and they’re replacing you with someone who’s a 10th of the cost,” Barrocas said. Luckily, “I didn’t have to wait until I was 40 years old to be steering the ship,” he said. T h e C h a r i t y Ca s e

Jason Haber, Rubicon Property

aber, 35, has never shied away from voicing his principles. In his twenties, Haber ran unsuccessfully for New York City Council and worked on the campaign to elect Scott Stringer as

Manhattan Borough President. Then, as a young broker at Douglas Elliman, Haber grabbed headlines by refusing to rent an Upper East Side apartment to the now-deceased Libyan dictator Muammar Gaddafi. Accolades poured in from around the country (one admirer in Texas offered to send Haber a gun) and convinced the young broker that his private real estate career could further his public sector ideals. “I don’t have to be the richest dude on the street, I just want to help people,” Haber said. “And I can do that through real estate.” Along with his brother Cory, Haber opened Rubicon’s first office in 2010 at 14 Wall Street, followed this past April by a 500-square-foot storefront at 451 Columbus Avenue. From its founding, Rubicon has partnered with the nonprofit called charity: water to bring clean drinking water to developing countries. The firm sponsors a rig that digs water wells across Ethiopia and every 90 days donates $5,000 — the cost of a well. Although Haber acknowledges that many clients are indifferent to the firm’s charity work, it has served to differentiate the fledging company in a field crowded with other start-ups. Early on, Rubicon won the exclusive listing for a pair of townhouses priced at $14.3 million at 123-125 East 10th Street because the sellers, Kathy Cerick and Charles Fitzgerald, are supporters of wetlands conservation. One of the townhouses sold to investment banker Olivier Sarkozy, the half brother of former French president Nicolas Sarkozy. Olivier now lives there with his girlfriend, actress/ fashion mogul Mary-Kate Olsen. And Cerick is now a Rubicon agent herself. Rubicon now has 20 agents, about nine of them full-time. T h e Da p p e r D e a l ma k e r s

Blu Realty founders

he five founders of Blu Realty — Alon Chadad, 27; Moshe Balalo, 28; Michael Arcos, 32; David Tobon, 34; and Andy Kim, 41 — met while working together at Nest Seekers International. In early 2011, they decided to start their own firm, employing one of the new high-commission-split business models that have become popular in Manhattan in recent years. Agents at Blu Realty start out with a 70 percent split; later, they can qualify for an 85 percent split. Despite its unconventional commission-split model, Blu maintains a handson approach with agents, and is in some ways more old-fashioned than its fellow start-ups. As at Nest Seekers, agents must follow a dress code, and the firm’s founders are known for posing for pictures in matching outfits. Plus, every piece of marketing must be approved by the company to cultivate a professional image. “A lot of people have lost the respect for

www.TheRealDeal.com December 2012 51

Residential Brokerage the business, in my opinion,” Chadad said. “It’s not just making the deal, it’s how you make the deal.” With 64 agents and two offices (at 1674 Broadway in Midtown and Trump Place at 120 Riverside Boulevard), the firm has recently started nabbing pricier listings, including a 15 Central Park West rental priced at $59,000 per month and a townhouse at 170 East 80th Street on the market for $31 million. Before Blu got the townhouse listing, the property was marketed by Brown Harris Stevens super broker Paula Del Nunzio. The Google Guru

Jeff Schleider, Miron Properties

an Google’s business philosophy apply to real estate? To 33-year-old Schleider, the answer is yes. A former Corcoran Group agent,

Noho, one in Greenpoint and another in Tenafly, N.J. “We have our quirks and we embrace them — as opposed to trying to pretend to be just the corporate entities that everyone else is,” Schleider said. T h e O u t e r - B o r o u g h M ayo r

Eric Benaim, Modern Spaces

ric Benaim, 34, boasts that his nickname is “the Mayor of Long Island City” and that half the people who live in the up-and-coming Queens neighborhood are there because of him. The Queens native moved there in 2006, and opened the Long Island City–based Modern Spaces two years later. In addition to its two locations in Long Island City, the firm now has branches in Astoria and Williamsburg and is in the midst of construction on an office in Chel-

said the first eight units sold in one day. Since opening, the company has marketed $500 million in new developments, Benaim said. T h e yo u n g s t e r

Khashy Eyn, Platinum Properties

hen the three cofounders of Platinum Properties — Khashy Eyn, 31; his sister, Dezireh Eyn, 28; and his friend, Daniel Hedaya, 26 — opened their first office on Wall Street, their overhead costs included one unexpected item. To get clients to visit their office, the three young brokers routinely had to pay for taxis to the neighborhood, which was then considered an undesirable residential location. These days, New Yorkers are less wary of the Financial District, but Platinum Properties still likes to see itself as catering to the new, the young and the hip. Last year, the firm opened an office in Midtown West, another commercial neighborhood poised to welcome a wave of residential development. Platinum ranked No. 9 on TRD’s list of top boutique firms in June, thanks

largely to the $16.5 million listing for the penthouse at 200 Chambers Street. In 2008, the firm started a two-agent office in Paris. The company also operates a property management division that specializes in managing investors’ single-home investment properties. The brokerage’s offerings tend to appeal to younger buyers, the founders said. “If they walk into our office, they can relate to us,” Khashy said. He estimated that the average age of Platinum’s 65 agents is under 30, and the firm’s office at 30 Wall Street features prints by blockbuster artist Takashi Murakami and a beaded black chandelier. The three founders were working at residential brokerage Urban Sanctuary when the energetic Khashy hatched a plan to launch a new company. “It was just a matter of time,” Hedaya said. “Khashy’s an entrepreneur. He’s always had that vision.” Although Khashy conceded that he could make more money as an individual agent, he said that down the line, the start-up approach is designed to pay off. “Your sweat and tears and blood are going into something that’s yours,” Hedaya added. TRD

Where are the women?

oung entrepreneurs are making a mark on New York City’s residential real estate industry, but there is a curious gender disparity when it comes to the founders of new firms, sources noted. In decades past, women like Barbara Corcoran, Elizabeth Stribling and Barbara Fox made names for themselves by launching eponymous brokerages. Likewise, Diane Ramirez helped launch Halstead Property with Clark Halstead, and Michele Kleier cofounded Kleier Residen-

A $16.5 million listing at 200 Chambers Street marketed by Platinum Properties

Schleider launched his own company in 2009 and frequently cites Google maxims — which include “Focus on the user and all else will follow,” and “You can be serious without a suit”— as inspiration for the way he runs his firm. From the start, he embraced a notion familiar to the Internet generation, as well as media companies, tech giants and, increasingly, real estate firms: Give away information for free, and a certain percentage of users will come back as customers. For example, Miron’s social media marketing has attracted some 2,400 Twitter followers, a comparatively high number for the firm’s size, and its blog posts are often armed with quirky content. (A sample headline from January reads: “Questions to ask before signing a lease: Does it look like I’m walking into a crack den?”) Schleider cultivates a start-up-like feel in the offices, where music plays, agents battle each other on the foosball table and many clients come from the tech world. (In fact, last month the brokerage challenged TRD to a foosball showdown.) In the last two years, Miron has grown to 52 agents and has three offices: one in

52 December 2012 www.TheRealDeal.com

sea, its first Manhattan location. Before opening Modern Spaces, Benaim was working for Nest Seekers in Long Island City, but he was unsatisfied. Rather than join a competitor, Benaim opted to start his own company, with the goal of running a more youthful and less bureaucratic operation, where the only dress code was (and still is) a prohibition against suits. Benaim said he invested about $500,000 — cobbled together from savings, credit cards, second mortgages and family loans — in the new company, about half of which went to the website, which relies on a sparse, gallerylike aesthetic. “That was our image — how we wanted to portray ourselves as a young, cool, edgy company,” Benaim said. The company’s Williamsburg office — which is shared with the coffee shop Sweetleaf — features graffiti-themed art, a wooden railing reclaimed from an old courthouse and a pillar decorated like a column from the Bedford L-train stop. Modern Spaces now has about 50 agents and hopes to double that number by next spring, he said. The firm is currently marketing the 48-unit Vista condos in Long Island City, where Benaim

tial (formerly Gumley Haft Kleier). To this day, a number of Manhattan’s biggest and oldest firms have women at the helm. Consider Dottie Herman, CEO of Douglas Elliman; Kathryn Korte, CEO of Sotheby’s International Realty; and Pam Liebman, CEO of the Corcoran Group. In addition, Stribling, Ramirez and Kleier continue to head up their firms. And unlike male-dominated fields such as finance or law — where the majority of bankers and attorneys continue to be men — plenty of residential real estate agents are women, including many of the city’s top brokers. (New York’s Department of State does not compile data on the gender of licensed agents.) Despite all this, the majority of new real estate firms are being launched by men. Some newer firms were started by women: Dezireh Eyn cofounded Platinum Properties, Highlyann Krasnow cofounded one of the two firms that became MNS, Adina Azarian opened rental firm Adina Equities about a decade ago and Kathy Braddock cofounded Rutenberg Realty with Paul Purcell in 2006. But when it comes to the executives launching the newest generation of firms, the list is heavy on testosterone. The reason for this, some speculated, could lie with broader demographic changes to the industry. In decades past, the majority of New York City residential brokers were women, many of whom entered the field because the flexible hours made it easier to work outside the home while raising children. “It gave a woman the flexibility to either be a more ‘traditional’ wife, stay-at-home mom or whatever … and still be able to create the jewelry money or the school tuition or the vacation money,” Braddock said. While both men and women still choose real estate for the flexibility, New York City real estate prices have grown by leaps and bounds over the past 20 years. Meanwhile, reality shows cast the job in a glamorous light, and technological advances have taken the business round-the-clock. The field now attracts ambitious young people of both genders, who view it as a lucrative alternative to a career in law, technology or finance, insiders said. It may be that these shifts have altered real estate demographics, causing the gender breakdown at the executive level to more closely resemble the rest of the business world, where male heads of firms vastly outnumber their female counterparts. (Among the CEOs of Fortune 500 companies, only 20 are women.) “There’s no reason the real estate business should look different on the face of it than any business in America,” Braddock said. “If it did, I think that would be more unusual.” LKC

www.TheRealDeal.com January 2011 25

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2013 What’s Ahead

What’s ahead in

A rundown of some of the biggest NYC real estate issues — and most impactful projects and trends — on tap for the New Year

By Tom Acitelli f 2012 was the year of recovery for New York City’s real estate industry, 2013 might be the year of uncertainty. New York City real estate faces a number of unknowns heading into 2013, from post-Sandy devastation to the upcoming “fiscal cliff.” The year will also see the city’s mayoral race heat up — another subject that brings nail-biting anxiety to real estate professionals. In this end-of-the-year issue, The Real Deal looked at these and other key issues that will impact the real estate industry in 2013.

Fiscal Cliff/Tax Changes

he so-called fiscal cliff is being feverishly debated in Washington right now, but the situation also has the New York real estate community on pins and needles as it gears up for 2013.

Unless elected officials take action by Jan. 1, Bush-era tax cuts will expire and a slew of deep government spending cuts will kick in (see related stories on pages 18 and 38).

54 December 2012 www.TheRealDeal.com

“Uncertainty is never good for the market,” one commercial broker said. And the tax changes set to take place — especially a capital gains increase that could boost the rate from 15 to 20 or 25 percent — may impact investment sales, real estate sources say. Brokerage Massey Knakal projects that Manhattan’s investment-sales market will end 2012 with 3.3 percent of buildings trading hands for the year — only the fifth time since 1984 that the rate has exceeded 3 percent. That could be due to a strong market — or, perhaps more likely, to sellers rushing to finalize deals to beat the tax-policy changes. Massey Knakal chairman Robert Knakal argued that New York could see an investment sales slump in 2013 if the tax changes kick in. “If cap gains go up to the extent [they are] likely to go up, discretionary sellers are going to need to take a while to adjust to the new reality,” he said, noting that the adjustment could take two or three years. It’s not just what the federal government is doing that’s creating uncertainty in the market — it’s what

it’s not doing. For example, in September, the Federal Reserve announced that until further notice, it would continue quantitative easing, which will keep interest rates low and inflation at bay. “They basically said we’re going to keep interest rates low through 2015 because we don’t like what we see,” said Jonathan Miller, president and CEO of appraisal firm Miller Samuel. The Fed action, Miller added, has spooked already rattled banks by suggesting the economy is unsettled and that consumers should hold off on any home-buying because rates will remain low for the near future.

Mayor’s Race

or nearly 20 years, starting with Rudy Giuliani and through the three terms of current Mayor Michael Bloomberg, the New York real estate industry has felt it had a strong ally in City Hall. But as Bloomberg finishes his final term, some in the industry are worried that there’s no true developer-friendly candidate waiting in the wings to replace him when he hands over the reigns at the end of 2013. Real estate pros said the Bloomberg administration’s policies — including myriad zoning changes that have paved the way for residential development — have benefited the real estate community and reshaped the city, from the Williamsburg waterfront to Manhattan’s far West Christine Quinn Side. Real estate players need only look at Bloomberg’s would-be successors to be concerned, said one industry executive who asked not to be named. The source noted that mayoral wanBill de Blasio nabes city comptroller John Liu and public advocate Bill de Blasio have both called for higher taxes on higher-income New Yorkers — a move that many in the real estate world are against. On the other hand, city John Liu council speaker Christine Quinn, another contender, has not called for higher taxes and has been a more reliable friend to the industry. Earlier this year, after much speculation, she pleased the real estate world somewhat when she cut the number of workers covered by the socalled living wage bill, which required developers with projects subsidized by the city to pay workers higher than the minimum wage. Still, Bloomberg, whose veto was overridden by the city council, is suing in Manhattan Supreme Court to overturn the law entirely. And Quinn is viewed as more of a wild card for the industry. For now, though, the parlor game in real estate is pining for four more years of the current mayor. “I really wish Bloomberg could be elected for a fourth term,” Ofer Cohen, president of commercial brokerage TerraCRG, said with a laugh.

www.TheRealDeal.com January 2011 25

WHAT’S AHEAD

MANHATTAN APARTMENT RENTS

One World Trade Center

Vogue editor Anna Wintour

Vanity Fair editor Graydon Carter

The New Yorker editor David Remnick

ONE WORLD TRADE CENTER/ CONDÉ NAST MOVE

ondé Nast made waves in the Lower Manhattan office market last year when it signed a lease for 1.1 million square feet at One World Trade Center. But in 2013, the magazine publisher will actually move 5,000 employees into the 3.5 million-square-foot building, which is expected to top out next year, too. The company is expected to relocate from its Times Square headquarters by the end of 2013 and the tower is scheduled to be completed shortly thereafter. The move is expected to have a significant impact on the entire surrounding area, which has long strived (and struggled) to become a 24-hour community. “I think now that you’re going to be adding media to the mix, it’s going to be more of a 24-hour, multidimensional neighborhood,” said Keith Lipstein, a managing director at commercial firm ABS Partners Real Estate, who does commercial leasing and sales Downtown. The very presence of all of those Condé Nast employees from magazines like The New Yorker, Vanity Fair, Vogue and a slew of women’s glossies will upend the usual financial services–insurance–real estate dynamic that fuels downtown leasing (the so-called FIRE sectors), according to Lipstein. That could entice other, non-FIRE firms from Midtown and Midtown South. With that, of course, may come higher rents. The average Class A asking rent for Downtown was $47.14 a square foot in the third quarter of 2012, according to Colliers International. Condé Nast is reportedly paying around $60 a square foot (about what it pays at 4 Times Square now). With the Condé Nast move and the completion of One World Trade, such figures could become the new normal. “If I were a tenant,” Lipstein said, “it’s like, ‘Do a deal Downtown now because now’s the time to get it while it’s cheap.’”

PHOTOGRAPH OF ONE www.TheRealDeal.com WORLD TRADE CENTER FOR THE REAL DEAL BY DEREK ZAHEDI 64 March 2012

n the fourth quarter of 2006, Manhattan’s median apartment rent hit a peak of $3,265, according to Miller. But in 2013, the median is expected to easily surpass that. Indeed, for those who thought 2012 was the year the Manhattan rental market went through the roof, experts predict 2013 will be even crazier. The main reason that rents are likely to continue soaring in 2013, Miller said, is that tight credit is keeping would-be first-time homebuyers in rentals. At the same time, interest rates will remain low through 2013, leaving little motivation for buyers to act with urgency. Meanwhile, the city keeps adding jobs — 92,600 in the 12 months ending September — which helps drive demand. And while rental development has been steadier in the outer boroughs, in Manhattan, only 2,596 units are expected to have come online in 2012, according to Gary Malin, president of Citi Habitats. That’s the lowest total in the seven years that Citi Habitats has been tracking rental development (rental construction peaked in 2009, when 3,966 units came online, while 3,607 were added in 2011). Therefore, Manhattan’s scorching rental market should get even hotter in 2013, with leasing activity continuing unabated despite the higher rents. “It feels weird,” said David Schlamm, CEO of City Connections Realty, “but people would rather overpay — they should be buying right now!”

WORLD FINANCIAL CENTER

rookfield Office Properties is expected to complete its sweeping, $250 million upgrade and expansion of the retail portion of its World Financial Center next year. The changes could spur an uptick in retail rents for the surrounding neighborhood — but they were done in large part to bolster the office space upstairs. The project will add 177,000 square feet of revamped

A rendering of the new retail shops at the World Financial Center.

retail space back to the market. That’s enough for more than three dozen higher-end stores and a 25,000-squarefoot gourmet food marketplace as well as up to six restaurants spread over 40,000 square feet. There will also be a glass pavilion along West Street at the street level, as well as underground passageways connecting the center to both the planned World Trade Center and Fulton Street transit hubs. Construction started at the site in October 2012. In 2011, Dennis Friedrich, president and chief investment officer of Brookfield, was quoted in Crain’s saying that the upgrades could boost Downtown retail rents by anywhere from 50 to 100 percent. (The average retail asking rent in the Financial District is $152 a square foot, according to a fall 2012 report from the Real Estate Board of New York.) Others are not buying the idea that rents will spike be-

cause of the World Financial Center upgrades. “In terms of what’s going to happen in the rest of the Downtown area, I would say not much,” said Benjamin Fox, executive vice president of retail leasing at Massey Knakal. Fox said he sees the World Financial Center as geographically separate from other Downtown retail corridors, like Broadway as well as Wall and Fulton streets. Plus, it’s too soon, he said, to gauge the effects of any connectivity to the transit hubs now under construction. Faith Hope Consolo, the chairman of the retail leasing and sales division at Douglas Elliman, said brokers are watching to see who Brookfield bags for the space. “I think they need to sign not just a deal, but a game-changer,” Consolo said. In the end, though, the retail impact might be felt in Brookfield’s backyard. The company has said that the revamp was designed, in part, to entice office tenants upstairs. Rental agreements expire in 2013 on 4.6 million square feet of office space in 2 and 4 World Financial Center occupied by Merrill Lynch. While Brookfield did sign more than 600,000 square feet of leases this year with tenants like OppenheimerFunds and Commerzbank AG, there are still millions of feet to fill, which could have an impact on the Downtown office market. Brookfield did not respond to requests for comment.

BARCLAYS CENTER RETAIL

he long-anticipated opening of Brooklyn’s Barclays Center in September has already prompted increasing commercial real estate prices in the area. But as deals negotiated in 2012 start to close and new retail and office tenants begin to move into the area, the impact on the surrounding commercial market is expected to be even greater in 2013. “We’ve just seen an influx of institutional investors looking to take advantage of this market,” said Cohen, whose office sits across the street from the arena on Pacific Street. For retailers, the demand will come from “the realization that 18,000 people are going to be here 250 nights a year” with money to spend, Cohen said. His firm’s research shows that asking retail rents along Flatbush, between Dean Street and Atlantic Avenue, are now $200 to $250 a square foot. South of Dean, they run from $150 to $175. Meanwhile, asking retail rents along nearby Fourth Avenue are $100 to $125 a square foot. All are up around three-fold from before the arena’s opening. In fact, in 2013, $200 a square foot should become the new baseline for prime retail spaces near

Retail rents are expected to continue to rise in 2013 around Brooklyn’s Barclays Center.

www.TheRealDeal.com December 2012 55

What’s Ahead the arena. And more tenants will compete for those spaces. “There are people crawling all over the area,” said Christopher Havens, director of commercial property at the brokerage aptsandlofts.com. “There are way more tenants than there is space.” Havens estimated that as many as five to 10 tenants will be competing to secure each available space in 2013 in the area around the arena. As for investment sales, the triangular-shaped 182 Flatbush, across from the arena, traded in September for $4.1 million (or $856 a square foot), a record for a vacant three-story building in Brooklyn. The buyer, an investment group, plans to renovate the interior of the 4,791-square-foot building and market it toward retail tenants in 2013. “By the end of the summer, you’re probably going to see a completely different neighborhood,” said Cohen, who added that the area around the arena is on its way to becoming “a little of a Times Square.”

One57 CLOSINGS

xtell Development’s under-construction condo One57 got more than its share of newspaper ink in 2012 as word of record-setting apartment sales leaked to the press. And while the 90-story tower is not expected to be complete until the start of 2014, it’s the next year that could have the largest impact for the building and for what it means to the residential luxury market, sources say. That’s because the megadeals that have been the talk of the town will finally begin closing in 2013. Indeed, while the building is expected to open by 2014 (despite a partial crane collapse there during Hurricane Sandy), closings, according to sources, are expected to start in the summer, providing official market data and likely setting new benchmarks for the luxury market. Like with 15 Central Park West five years ago,

Apartments are slated to begin closing at One57 in 2013.

56 December 2012 www.TheRealDeal.com

One57’s sales prices will alter not only the statistics of the marketplace, but sellers’ perceptions of it as well, brokers say. A duplex in One57 — which has 95 units and is located at 157 West 57th Street — is reportedly in contract for $90 million, along with several of the 11 full-floor units for at least $53 million. The highest price paid so far in One57’s closest luxury ancestor, 15 Central Park West, which opened in 2008, was $88 million. “It could potentially sway the average up artificially,” said Douglas Elliman managing director Leonard Steinberg of One57. “That’s not a good thing,” Steinberg added, “because then people think their apartment is worth so much more when maybe it isn’t.” As news outlets inevitably report on One57’s closings in 2013 (more than half the units in the building are already under contract), brokers may have to talk luxury sellers out of inordinately high asking prices, sources say. “High prices always have an effect on sellers because they, too, feel they are entitled to a very high price, especially if they have a very good property,” said Paula Del Nunzio, a managing director at Brown Harris Stevens, speaking generally about the higher-end market.

Mega Building Deals

he city’s residential market isn’t the only sector poised for high-priced sales in 2013. Two of the biggest building sales in New York history could be on tap for next year. George Comfort & Sons and RCG Longview put their 1.8 million-square-foot Worldwide Plaza on the market in August, and it’s now expected to sell for roughly $1.2 billion — roughly twice the $600 million the partners bought it for in 2008. Meanwhile, the Sapir Organization and CIM Group are looking to sell their 2.3 million-squarefoot 11 Madison Avenue. Their asking price? More than $1.5 billion. If either breaks the $1 billion marker, they would be in an elite class in Manhattan: Fewer than 20 single buildings have ever sold for more than $1 billion, according to an analysis of Real Capital Analytics figures by TRD. The last such sale was in late 2010, when Google acquired 111 Eighth Avenue for $1.9 billion. Indeed, New York investment sales have been on the smaller side in 2012. The average price of a property sold in the city through the first three quarters of 2012 was about $9.3 million, according to Knakal. And, while office properties comprised more than one-third of all dollar volume, most of those trades were for under $100 million. “The trading in big-office has really been lagging,” Knakal said. Worldwide Plaza could sell for Worldwide Plaza and 11 roughly $1.2 billion. Madison could change that quickly, motivating other owners to list their larger trophies. Either property’s sale would also signal the general strength (or weakness) of the investment-sales market after the expected federal tax changes set to take effect in the New Year, brokers said. “Keeping up the momentum for sales, especially large iconic properties, will send a strong message for investors that the confidence factor is strongly bullish on Manhattan real estate,” Adelaide Polsinelli, a senior director at Eastern Consolidated, said in an e-mail.

From top: 11 Madison Avenue could sell for more than $1.5 billion; the Sapir Organization’s Alex Sapir, who owns the building with the CIM Group.

The properties’ owners as well as the listing brokers — Doug Harmon and Adam Spies of Eastdil Secured for Worldwide Plaza, and Darcy Stacom of the CBRE Group for 11 Madison — did not respond to requests for or declined to comment.

Sandy Impact

uperstorm Sandy wreaked its havoc in 2012, but the dollars needed to repair its damage and the headaches it’s caused (both financial and logistical) will be a serious real estate issue for New York City in 2013, sources say. In addition to the destruction the storm caused in the outer boroughs, where thousands of people were left homeless, Sandy impacted 29.8 million square feet of commercial space in 41 buildings Downtown, according to a report from Cushman & Wakefield. That chopped the submarket’s usable inventory from more than 85.2 million square feet to 55.4 million (see related story on page 42). Residential real estate was impacted, too. The city deemed 19 residential buildings unsafe for occupancy. And it may take until February — or later — before all the buildings are usable again, according to the Cushman report. As the calendar turns from 2012 to 2013, many commercial brokers and building owners are holding their breath to see when exactly tenants will be able to get back into their offices — not to mention when they can start showing available office space for leasing and for those looking to sell buildings. The financial cost of Sandy to Downtown landlords and tenants, many of whom relocated, will continue to mount through 2013 as they negotiate with insurance companies, pay for temporary office space and see an overall decline in profitability because they are out of their headquarters. In addition, the damage has thrown the real estate industry a serious emotional curveball. “People never thought about this before,” said Lipstein. “[Only] a few people probably looked at a map and said, ‘Oh, my building is in Flood Zone A, my building is in Flood Zone B, my building is in Flood Zone C.’ “People are going to think twice in the future about being so close to the water,” Lipstein said. TRD

PHOTOGRAPH www.TheRealDeal.com OF SAPIR FOR THE REAL DEAL BYJanuary MICHAEL TOOLAN 2011

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NYC’s It buildings — past and present

A look at what sets apart the buildings that the wealthiest call home

By Jane C. Timm and Candace Taylor very few years, an over-the-top new Manhattan apartment building emerges bigger, better and pricier than the rest. The city’s elite rush to take up residence in these buildings, forming clusters of wealth within their luxurious walls. Since 2007, for example, the Zeckendorfs’ 15 Central Park West has been the most sought-after (and expensive) address in the city, with resale prices soaring even through the downturn. But some brokers now say that 15 Central Park West may be on the verge of losing its top-dog status. After several years when the city saw very little new development, several überluxurious buildings — like Extell Development’s One57 — are now coming online and threatening 15 CPW’s dominance. Nikki Field, a senior vice president at Sotheby’s International Realty, said she’s shown apartments at One57 to 15 CPW owners, some of whom are looking to sell before the older building loses its cachet. At 15 CPW, she said, “I believe there could be a growing exodus and cash-out there before it’s replaced — and literally in the shadow of — the more coveted, new billionaires’ club rising at One57.” When completed, the 90-story One57 will be the tallest residential building in the city and is on track to set a new record for the city’s most expensive apartment sale. But a few blocks away, the CIM Group and Harry Macklowe are planning an even taller building on the Drake Hotel site at 432 Park Avenue. As developers battle to build the next billionaire-friendly blockbuster residence, The Real Deal looked at some of the hottest New York buildings of years past, and what it takes to get to the top of the heap. (Hint: It helps to have a connection to Jackie O.)

largest penthouse was sold for $205,400 — around $2.66 million in today’s dollars. Unlike most apartment buildings of the time, 740 Park was entirely clad in expensive limestone and had two entrances — not one — each with large marble halls and ornamental ceilings. Amenities included a chauffeurs’ waiting room. 15 Central Park West is home to Sting, among many other celebrities.

to 740 Park. A list of past and present residents reads like a who’s who of the city’s rich and powerful, from John D. Rockefeller to Stephen Schwarzman. The building’s co-op board has become so tough that celebrities Joan Crawford, Barbara Walters and Barbra Streisand have all been rejected in attempts to purchase there. Thanks to the Great Depression, 740 Park remained “the pinnacle” of luxury New

to New York and “didn’t want to buy in the many full-disclosure co-ops,” Stribling explained. Onassis was right. When Olympic Tower opened, allowing buyers to pay with cash and keep a “lower profile,” Stribling said, wealthy international buyers snatched up units. In 1976, for example, Saudi Arabian 740 Park Avenue, the childhood home of Jacqueline Kennedy Onassis.

Olympic Tower and early buyer Adnan Khashoggi.

740 Park Avenue

bevy of grand apartment buildings were constructed in Manhattan in the 1920s as wealthy New Yorkers transitioned from townhomes to luxurious apartments. And 740 Park Avenue, the 19-story co-op at the corner of 71st Street, may be the grandest of them all. Constructed in 1929, the building “was built to be the ultimate trophy house,” said Michael Gross, the author of the book “740 Park: The Story of the World’s Richest Apartment Building.” The building was developed by James Lee, the grandfather of Jacqueline Kennedy Onassis, who lived there as a child and, of course, went on to become first lady. Construction costs totaled $2.23 million — the highest amount per square foot ever spent on a residential building in the city, Gross wrote in “740 Park.” According to the book, the building’s

60 December 2012 www.TheRealDeal.com

Designed by famed architect Rosario Candela, most of the apartments had between 10 and 13 rooms, with ceilings more than 12 feet high. They were advertised as “the most spacious rooms and galleries ever designed for a New York apartment,” according to Gross’s book. Even today, units at 740 Park are “exceptionally large,” explained real estate appraiser Jonathan Miller, the CEO of Miller Samuel. And while units in some other prewar luxury buildings have been chopped up into smaller apartments over the years, 740 Park Avenue retains its original layouts. That’s part of what has added to the building’s value over time, Miller said. Earlier this year, a 30-room duplex at the building sold for $52.5 million. From the beginning, the city’s elite flocked

York apartment living for decades, Gross said, since residential construction slowed drastically during the Depression and had almost entirely stopped by World War II. In Gross’s opinion, in fact, “nothing like it was built again, until the last 10 years.”

Olympic Tower

hen Olympic Tower’s 51 stories rose at 641 Fifth Avenue in 1975, wealthy New Yorkers almost exclusively lived in coops. At the time, even brokers “didn’t know what a condo was,” recalled industry veteran Elizabeth Stribling. “We didn’t think anyone would want to live there!” But Greek shipping magnate and developer Aristotle Onassis (best known for marrying the former first lady) bet that international buyers were eager to move

billionaire Adnan Khashoggi reportedly paid $1.45 million (about $5.6 million today) for an 18,000-square-foot, five-bedroom duplex in the building. His unit reportedly had a swimming pool, indoor gardens, a ballroom and a sauna. Situated between East 51st and 52nd streets, the tower was also one of the city’s first mixed-use condo buildings, with retail and office space as well as residential units. The building, “one of the early Midtown glass residential towers,” was quickly “considered one of the elite new buildings,” Miller said. Olympic Tower remained one of the city’s hottest buildings throughout the ’70s and ’80s, but the building boom of the ’80s soon created new buildings that competed for the spotlight, including the first Trump Tower www.TheRealDeal.com March 2012 00

at 725 Fifth Avenue and Museum Tower at 15 West 53rd Street. These days, Olympic Tower doesn’t boast the stratospheric prices of 740 Park Avenue or 15 Central Park West, but is still one of the city’s most expensive buildings. Khashoggi reportedly sold his apartment there in 2000 for $12 million, and this August, a three-bedroom in the building sold for $14 million.

A rendering of One57 and buyer Silas Chou.

Time Warner Center

ew York saw a severe lull in new construction during the recession of the early 1990s. But in the late ’90s and early 2000s, high-end new buildings again began to appear, including the Related Companies’ the Chatham at 181 East 65th Street and the Zeckendorfs’ 515 Park Avenue. But the Time Warner Center eclipsed them all, brokers said. Developed by Related at Columbus Circle, the Time Warner Center was the most sought-after condo in Manhattan from the moment sales began in 2001 to 2007, when 15 CPW hit the market, brokers said. Related alum Susan de França, who’s now at Prudential Douglas Elliman, explained that the developer was aiming to “raise the bar in terms of superluxe lifestyle.” The project’s two 80-story residential towers, completed in 2004, sit atop a megaproject that includes office space, restaurants, high-end retail and a hotel. The Mandarin Oriental hotel provides services to both residents and guests, and the towers’ massive height provides birdseye Central Park views. Part of the allure was that the Time Warner Center “brought all these great things together,” said the Marketing Directors’ Andrew Gerringer. “The Mandarin Hotel, the restaurants, parking; it’s got the whole package.” Buyers apparently agreed. New York’s priciest condo sales in 2003, 2005, 2006 and 2009 were all at the Time Warner Center, including a $43 million sale in 2003 and a $37.5 million sale in 2009. Athletes, billionaires and musicians — from Jay-Z to Tom Brady — bought penthouses there. Fifteen Central Park West has now surpassed the towers in price: While some Time Warner Center units now fetch an impressive $6,000 per square foot, units at 15 CPW go for $7,000 to $10,000. But the Time Warner Center “is still highly sought after,” Miller said.

Time Warner Center and NFL star quarterback Tom Brady.

A rendering of 432 Park Avenue.

15 Central Park West

esigned by starchitect Robert A.M. Stern, 15 Central Park West is widely considered “the most successful building ever built,” said Gerringer. The 202-unit limestone building has made good on all the hype, making a mint for the Zeckendorfs and for buyers who purchased units early on. Brokers say most apartments there are reselling for double or triple their original prices. Sandy Weill’s unit famously set a record when it sold for $88 million, or more than $13,000 per square foot, late last year — while only two years ago, a $40

winner Christian de Portzamparc, sales have already exceeded the $1 billion mark, according to Extell’s Gary Barnett. A 10,923-squarefoot duplex penthouse is reportedly in contract for more than $90 million. If the deal closes, it will surpass the Weill sale to become the most ever paid for a New York City apartment. De França said One57 has “the views, the central location and the credible developer” to become the city’s next It building. Like Time Warner, One57 will have a ritzy hotel on its bottom floors — the Park Hyatt — to amp up service. One57 has several advantages over 15 Central Park West, sources say. First, it’s taller, which means it will “certainly have great views,” Gerringer said. And it’s newer: Brand-new apartments tend to fetch 5 to 10 percent more in price than comparable resales, Miller said. “A large portion of buyers … want something that hasn’t been lived in before,” he said, adding that they are “prepared to pay a premium for that.” But unlike 15 Central Park West, which sits directly on the park, One57 is located a few blocks away. “It’s not the same as being right on the park,” Gerringer said. And some say the collapse of a crane at the tower’s construction site during Hurricane Sandy could impact sales. “I suspect there will be demands to cancel One57 contracts, followed by lawsuits, a slowdown in further sales that will eventually pick up again,” wrote Gross for the Daily Beast last month. Only time — and closed sale prices — will tell if One57 will be as successful as 15 CPW. “Right now, it’s all hype,” said Gross. “You can’t say the king is dead yet because 15 CPW is still king.”

million unit in the building topped citywide condo sales. Owners at 15 CPW have included mega celebrities and finance titans, including Sting, Lloyd Blankfein and Denzel Washington. Its amenities include a 75-foot pool, a private dining room with a full-time chef and a billiard room. But the building’s true advantage lies in its location on Central Park, where new construction buildings are rare, industry experts said. “They just had undoubtedly the best development site in the city” Gerringer said. In

PHOTOGRAPH OF THE TIME www.TheRealDeal.com WARNER CENTER FOR THE REAL DEAL BY CHRIS MARTIN 00 November 2012

addition, the Zeckendorfs “did the right-size homes, they used the right architect, they did everything right.”

One57

ne57, which is under construction at 157 West 57th Street, doesn’t have a sales office, but its buyers already include billionaires like fashion moguls Lawrence Stroll and Silas Chou, both of whom have reportedly signed contracts for $50 million apartments in the building. At the tower, designed by Pritzker Prize

432 Park Avenue

hen Harry Macklowe and CIM complete their 147-unit condo at 432 Park Avenue in 2015, it will surpass One57 as the city’s tallest residential tower. Details about 432 Park have been kept under wraps, but some units have reportedly already sold. Broker Donna Olshan, founder of the boutique brokerage Olshan Realty, recently got a sneak peak at the building’s plans, which she called a “home run.” Olshan predicted that when finished, 432 Park will likely steal demand from One57 and other upscale projects. “It’s really going to be the ultimate in luxury,” Olshan said. The top 10 floors will be penthouses with five or six bedrooms. And units will range from 1,400 to 8,400 square feet, costing a blended average of $5,800 per square foot, Olshan said. But the over-the-top amenities are what prompted Olshan to describe 432 Park Avenue as the “building of tomorrow.” The tower will have a landscaped sculpture garden, valet parking and wine cellars designed by high-end winery Sherry-Lehmann. It will also reportedly feature a private restaurant on the 12th floor with a terrace, as well as a fitness center, pool, sauna, steam room, library and conference and screening rooms. TRD Additional reporting by Andrew Klappholz www.TheRealDeal.com December 2012 61

Pr o f i l e

Simone says I

By Guelda Voien n the Bronx — where interest in development is meager when compared with Manhattan and Brooklyn — one company has repeatedly wagered its capital and has become what many sources say is the borough’s most dominant developer. Simone Development Companies owns more than 100 commercial properties, many of which are in the Bronx. In the past five years, its portfolio has expanded by 1 million square feet. The firm is currently knee-deep in several of the largest development projects underway in the Bronx. Last month, the company struck a deal with Montefiore Medical Center on a new $142 million ambulatory surgery center. The hospital is building out the 280,000-square-foot facility itself, but Simone will own it and lease it back to Montefiore for 16 years. At the end of the lease, Montefiore will have the option to buy the building. That project will be located at Simone’s 42-acre Hutchinson Metro Center complex — a project that opened in 2008, providing the borough with its first Class A office space in more than 10 years. Many say the complex is having a transformative impact on the Ferry Point section of the Bronx. Simone is also in the process of developing a 125-room Marriott hotel there. The Marriott, which is slated to open in 2014, will be the borough’s first brandname luxury hotel, sources said. “Much like Condé Nast’s lease [at One World Trade Center] was transformational for Downtown, the Hutchinson Metro Center was transformational for the Bronx,” said Cushman & Wakefield’s Tara Stacom, who handled leasing at the first office tower built at the complex. As if that weren’t enough, Simone also just inked a deal for 43,000 square feet with L.A. Fitness at the Metro Center Atrium, the latest building going up at the Hutchinson Metro Center campus. And sources say Simone’s Hutchinson project has spurred strong interest from investors — both domestic and international — in the surrounding area. “I brought some [international investors who have EB-5 visas] from China past Yankee Stadium, and they weren’t interested [in the area],” said Marlene Cintron, president of the Bronx Overall Development Corporation, a cityrun group that works to spur developments in the borough. “I took them to the Hutchinson, and they were impressed.”

62 December 2012 www.TheRealDeal.com

Bronx roots Joseph Simone, the current head of the firm, launched the company with his father, Pat, in the late 1980s. The business got off the ground when the elder Simone, who worked as an ice delivery boy in the Bronx as a kid, began buying up real estate for the small salvage and truck business he owned. He ultimately dropped that business and became a commercial landlord full time.

With medical, hotel and retail projects, Bronx developer is the big fish in a small pond

“Nobody thought that anyone would rent a nice office in the Bronx, but [Simone] took a risk, and that paid off,” said the source. “They have a strong cash position — they are smart, but gutsy.” City council member James Vacca agreed. “[Simone] has done something we never thought possible with that site,” said Vacca. Meanwhile, last year, Simone and

the $40-per-square-foot range — slightly discounted because T.J.Maxx will serve as a “junior anchor,” said Joseph Simone, although he noted that rents will increase over the course of the lease. Sources say while Simone is in the business of making money, it is also committed to bringing the underserved Bronx up to par with the four other boroughs. While the firm will build, finance, lease and manage properties, it won’t work on

From left: Joseph Deglomini Jr., principal at Simone Development; Joseph Simone, president of Simone; and Joseph Kelleher, president of the Hutchinson Metro Center.

“We’re here to try and serve a niche. When we find an area that’s underserved, we feel that spells an opportunity — and we try and up the use.” Joseph Simone, Simone Development Companies Then in the 1980s, he began developing. But in the last 10 years, the firm has dramatically increased its stake in the Bronx, sources say. “His father was in the business before him and they go by the old model: You buy and you hold,” Cintron said. (Simone continues to keep it all in the family, grooming his daughter, Patricia, to take over the family business.) But working in the Bronx has required the company to take risks. For example, when it began plans for the Hutchinson Metro Center in 2001, “It was considered a risky proposition,” said one well-connected Bronx political source who asked not to be identified.

Manhattan-based developers Aaron Malinsky and Paul Slayton also bought a former U.S. Post Office in the Throggs Neck neighborhood for about $35 million. They then struck a deal to sell Target a retail condominium, which makes the discounter the anchor tenant at the site, which they’ve dubbed the Throggs Neck Shopping Center. Last month, Simone, the lead developer on the project, inked deals with the restaurant chain Applebee’s and Metro Optics Eyewear for 6,640 square feet and 4,131 square feet, respectively. And it locked in clothing retailer T.J.Maxx to a 29,000-square-foot, 25-year lease. Rents in the latter transaction were in

anything more than a 60-minute drive from its Westchester Square offices, Simone said. “They are cash-rich and are able to buy these large complexes that are antiquated for industrial uses and create centers out of them,” said Neil Dolgin, president of commercial brokerage Kalmon Dolgin, which is active in the Bronx, but has not worked directly with Simone. Simone completes deals with its own equity in combination with some debt financing, a source said. On some deals it brings in additional equity investors but is known for having its own cash to spend. Continued on page 102

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FOREIGN BUYERS

The international squad A look at go-to NYC brokers specializing in different countries around the world

BY KATHERINE CLARKE oreign interest in New York real estate is at an all-time high, thanks in part to the continuing debt crisis in Europe and growing wealth in countries such as Brazil. But for foreigners, navigating the New York City market alone can be daunting. Instead of going it alone, international buyers often enlist New York brokers with ties to their home countries to help in their search for the perfect

property. Brokers say many buyers prefer to work with a professional who speaks their language, knows their customs and understands how business is done both at home and in the U.S. In July, The Real Deal looked at the dos and don’ts of working with some of the most active groups of international buyers. This month, we look at some of the new New York City brokers who have become go-to agents for specific groups from around the globe.

C H I NA SHERRI XIAOLAN AND M ICHAEL C HEN

hen it comes to dealing with Chinese buyers, no broker is better known than the Corcoran

Group’s Carrie Chiang. Chiang, a Shanghai native fluent in all major Chinese dialects, famously arranged the $100 million financing with a Hong Kong consortium that enabled Donald Trump to purchase the land for his Trump Riverside South project. But several other brokers have been looking to follow Chiang’s example, including Douglas Elliman’s Sherri Xiaolan and Bond New York’s Michael Chen. They are both carving out a niche among Chinese buyers, who reportedly spend $9 billion on residential real estate in the U.S. each year. Xiaolan first came to New York to become an opera singer 18 years ago after studying at the Chinese Conservatory of Music in Beijing. “I had the dream of singing opera at the Metropolitan Opera House,” she told TRD, but found that “there was too much competition.” Michael Chen

Xiaolan, who is flu-

ent in Mandarin and Cantonese, started as a rental agent and commercial broker at Dwelling Quest, the

she said. After the purchase, Xiaolan procures a tenant

cial, and roughly two years ago he switched to the resi-

to rent the unit. “I am a full-time nanny,” she joked.

dential side of the business.

Meanwhile, Taiwan-born Chen has been busy de-

These days, he travels to Asia regularly and hosts

brokerage that merged with Century 21 New York

veloping Bond’s connections to Asian buyers. Last

groups of Asian apartment hunters in New York to

Metro in 2006, but soon began concentrating on

year, he spearheaded the launch of a Chinese-language

drum up business. He recently closed a deal for a

residential sales. She joined Elliman three years ago.

section on the brokerage’s website and embarked on

two-bedroom apartment at 322 West 57th Street on

Today, over 90 percent of her clients are Chinese.

a campaign to introduce the brokerage and the New

behalf of a Chinese buyer for slightly over $2 million.

Xiaolan said she has connections to some wealthy Chinese buyers. Her former music school

York market to Chinese-speaking buyers overseas. comes from Asian clients, the majority of whom are Chi-

who took over as China’s new leader last month. Her

nese.

buyers often purchase apartments in bulk, she said.

Chen came to the U.S. in the 1980s when he was in his

She has done deals with Chinese buyers at the

early twenties. For six years, he packaged mortgages on be-

Setai Fifth Avenue at 400 Fifth Avenue and at the

half of housing lender IndyMac to sell to small-size banks

Sheffield on West 57th Street, where some of her cli-

and mortgage brokers.

ents have purchased several units. A lot of the buyers she’s represented are investors who don’t even show up for the closing. “I take a picture and send them the floor plan,”

64 December 2012 www.TheRealDeal.com

I TA LY

As a result, Chen said 70 percent of his business now

classmate is Peng Liyuan, the wife of Xi Jinping,

Then he was approached by a friend who runs a real estate firm in the city and “was looking for a bilingual Asian to work with him to capture the Asian market,” Chen said. But in 2008, Chen moved to Coldwell Banker Commer-

RICHARD NASSIMI, LUCA PACI AND S OFIA FALLERONI

ne broker widely known for his Rolodex of Italian clients is Corcoran’s Milan-born Richard

Nassimi, the head of sales at the W Downtown and the son of a well-known Italian diamond trader. When Nassimi first came to New York 15 years ago, he worked in the diamond business, “selling pieces to www.TheRealDeal.com January 2011 25

Foreign Buyers

“A lot of my clients are from Europe, and espe-

“It’s a small community, and I proved myself. I get phone calls from people I’ve never heard of saying, ‘We’re in town, what can you show us?’ ”

cially from Italy,” he said. “A lot of people in the stock

Gilad Azaria, Douglas Elliman

Cartier and to Bvlgari and Tiffany,” he recalled. And since he started in real estate in 2007, Nassimi said his family’s wealthy Europeans contacts have proved useful.

market or in the government know me and know my father.” Nassimi — who is marketing the 21 available

for two years. Last year she joined Town. Falleroni esti-

Like Cohen, Elliman’s Gisela Vergara also grew

mates that around 20 percent of her clients are Italian.

up in Rio. She was a trader in equities and derivatives

apartments at the W at 123 Washington Street as

“I travel to Italy a lot,” she said. “When I travel, I do

(working the financial markets both in Brazil and the

well as several apart-

road shows. I set up appointments to meet with [Ital-

U.S.) before becoming a real estate broker at Elliman

ments at the Cipriani

ian] attorneys, financial planners, accountants, CPAs,

10 years ago. She moved to the U.S. in 1996 after her

Club Residences at 55

wealth managers — people who could potentially have

then-boyfriend, a hedge-fund chief, was transferred

Wall Street — said he

access to investors.”

to New York.

frequently hosts groups

Commerce on Fifth Avenue. She recently closed deals

in the last year has come from Brazil, thanks to the

New York.

with Italian clients at 106 Central Park South for $1 mil-

booming economy in the South American country. “I

lion and at 147 West 142nd Street for $340,000.

sell to a lot of people who have worked in the financial

planning these visitors’

markets,” she said. “They either used to be my clients

New York itinerary and,

or they were friends of my clients.”

Brazil

of course, making purchases, he said, “My

Marcos Cohen, Gisela Vergara and D aniela S assoun

team organizes everything, from A to Z — every single detail.” Luca Paci, an Italian native and former management consultant, is

Luca Paci

And when it comes to Brazilian clients, it helps that she speaks Portuguese. “You speak the same language, you share the same culture, you maybe went to the same school or university,” she said. Vergara recently sold two three-bedroom apart-

ighteen-year Elliman broker Marcos Cohen, who

ments at 2 River Terrace to Brazilian families for

originally hails from Rio de Janeiro, said Brazilian

$2.29 million and $2.3 million apiece.

clients make up 50 percent of his business. But unlike

Meanwhile, at Corcoran, Daniela Sassoun leads

a more recent arrival to

other brokers who specialize in international clients, Co-

the pack in dealing with Brazilian clients, the firm

international sales.

hen rarely travels for work.

said. The São Paulo–born broker moved to the U.S. at

In 2010, Paci, who

“I don’t believe in trav-

was born just outside

eling abroad [to meet cli-

Florence, joined Man-

ents,]” he said. “When they

In private banking, Sassoun helped clients de-

hattan-based firm Do-

come to New York, they’re

cide which investments were worth their attention,

mus Realty, which has

in the right frame of mind

including the purchases of homes all over the world.

a reputation for repre-

for buying. You can’t go into

Then in 2005, she decided to take up residential bro-

senting international

somebody else’s environ-

kerage full time. Brazilian clients account for approxi-

clients.

ment and offer a product

mately 40 percent of her business.

In July, Paci left DoSofia Falleroni

Approximately 70 percent of Vergara’s business

of buyers from Italy in When it comes to Richard Nassimi

She also networks at the Italy-America Chamber of

that is not immediate. You

mus to establish his own

can go to plant a seed, but

firm: Platinvm.

sales don’t get made over-

The Manhattan-based brokerage, which currently has just three agents, deals primarily with Ital-

Marcos Cohen

his long-standing network of Brazilians based in New

and dollars. Paci is deeply connected to a network of

York.

While Sassoun doesn’t host buyers’ groups from Brazil in New York, she’s given presentations and helped host seminars for prospective buyers in Brazil, she said. Sassoun is currently listing a one-bedroom apartment at Chelsea’s London Terrace Towers owned by

“At the beginning of my

regularly be found lunching and networking with

career, there were a lot of

Italian-born attorneys and CPAs, who also work

diplomats that were being

with Italian buyers.

relocated, a lot of bankers,”

“I didn’t go out specifically to get Brazilian clients,” she said. “It just happened.”

Instead, Cohen relies on

and Italian, and gives all asking prices in both euros

In the last year, Paci has represented Italian cli-

zerland.

seas.”

ian buyers. Its website displays in English, Spanish

wealthy Italians planting roots in New York and can

age 18 before doing a stint in private banking in Swit-

Brazilian journalist and publishing magnate Joyce Pascowitch. The unit is asking $965,000. Gisela Vergara

Israel

he said. “That was the main [source of ] business. Now,

ents at 75 Wall Street, the Edge in Williamsburg and

all classes of Brazilians want to have an apartment in

the Jade condo on East 29th Street. These purchas-

America because of the currency exchange. The Brazil-

ers often fork over significant cash for down pay-

ian market is so big that now even American brokers deal

ments, he said, regularly buying multiple units. Pa-

with Brazilians.”

ci’s current listings range from a $715,000 loft at 15

Indeed, brokers say Brazilian interest in New York

Broad Street in the Financial District to a $3.95 mil-

real estate is at an all-time high. In one recent high-pro-

lion pad at Trump World Tower.

file deal, Brazilian-born business man Silvio Luiz Re-

Gilad Azaria and Ariel Tirosh

here is no shortage of Israeli brokers in New York who work with buyers from the Land of Milk and

Honey. For example, Israeli super broker Ilan Bracha

ichert bought Yankee shortstop Derek Jeter’s bachelor

two years ago spearheaded the high-profile launch of

from a similar background. She moved to the U.S.

pad at Trump World Tower. (It was not immediately clear

the first New York City franchise of Keller Williams.

from Florence eight years ago, after brokering deals

who represented Reichert in the deal.)

Town Residential broker Sofia Falleroni comes

for short-term Italian villa rentals on behalf of American tourists. She started her New York brokering career in

While Cohen would not comment on any specific

a name for themselves when it comes to working with

deals he’d done, the real estate listings website StreetEasy

Israeli clients, including Elliman’s Gilad Azaria, a for-

shows he brokered the $8.1 million sale in 2007 of 238

mer partner of Bracha.

2008 at Manhattan Apartments, but was later re-

East 62nd Street, the former home of deceased Brazilian

cruited to Brown Harris Stevens, where she worked

art collector Eduardo Paulo Klabin.

64 March 2012 www.TheRealDeal.com

A roster of young brokers have more recently made

Israel-born Azaria, now 37, moved to the U.S. at age 21 after serving in the Israeli army. He worked as a www.TheRealDeal.com December 2012 65

Foreign Buyers motorcycle mechanic and later owned a car dealer-

New York, where she met

ship before becoming a broker 10 years ago.

her husband. After marry-

and client base via a newsletter in which he talks

ing and moving to the city,

about New York’s theater and art offerings as well

funct Queens firm called Enterprise and then

Burke started a career in

as real estate.

moved to MLBKaye, the firm where Elliman star

real estate. Now, she told

Dolly Lenz cut her teeth, before joining Elliman in

TRD, Australian clients

2004.

constitute almost 75 per-

He started his real estate career at the now-de-

In addition, Azaria also develops single-fami-

Cass keeps in contact with his Australian friends

F ran c e

cent of her business.

ly homes in Israel. He has built eight houses in the

Edward Johnston III and C harlie A ttias

Burke previously served

last three years, which he rents out with the help of

Kane Manera

his parents. A large portion of Azaria’s listings are owned by

as a board member for the American Australian Association, a networking orga-

ome of the New York brokers who work most frequently with French clients are not French

Israeli clients, including a three-bedroom home at

nization founded by Keith

Trump World Place asking $6.75 million, a $4.53

Murdoch, father of News

million spread at Trump Place and a three-bed-

Corporation mogul Rupert

room home at the Ritz Carlton on the market for

Murdoch. She can also be

south of France regularly while working for a New

$7.4 million.

spotted at events hosted by

York–based textile company. During that time, he

AAA’s hipper equivalent,

cultivated a network of contacts that he’s drawing

the not-for-profit Advance

on now that he’s a broker at Brown Harris Stevens.

Global Australian Profes-

French clients constitute up to 15 percent of his

sionals. At least once a year,

business, he said.

“It’s a small community, and I proved myself,” Azaria said. “I get phone calls from people I’ve never heard of saying, ‘We’re in town, what can you Tim Kass

show us?’ ” Jerusalem native Ariel Tirosh is also a motorcycle lover. He and his best friend rode their motorcycles across the U.S. in

ers at the Australian consulate in New York. “I’m always connecting with Australians,” she said,

the ’90s after complet-

noting that her countrymen tend to be “great travelers,

ing their service in the

always ready to move and relocate to America or have a

Israeli army.

home here,” she said.

Post-trip, Tirosh

Burke is not the only New York City broker running in

Edward Johnston III traveled to Paris and the

Johnston studied at a French school in Villefranche-sur-Mer and can “get by” speaking French, though most of his clients speak a good amount of English, he said. Johnston is an active member of the Alliance Française, a not-for-profit organization promoting French arts and culture in New York. He is currently listing a 25-foot-wide former

became a rental agent

Aussie circles. Perth native Kane Manera recently hosted

with the now-defunct

a breakfast at the Mark Hotel for a group from Australia.

carriage house on East 64th Street. Asking $17.4

Checkers Realty.

While the group came to New York to buy art, Manera

million, it is owned by a client who lives in France,

took the chance to plant a property-buying seed, too.

he said. He is also marketing a five-bedroom con-

“It was open list-

Ariel Tirosh

Burke conducts a seminar for prospective property buy-

themselves.

do at Chelsea’s Prairie

ings,” he said. “Back

Manera can also be found mingling at alumni func-

then, some manage-

tions at the Harvard Club. The Ivy League university is

Lofts, asking $10.25

ment companies said

a sister school to the University of Western Australia,

million.

that the first person to come with the full package

Another broker with

Manera’s alma mater.

— checks and signed leases and all the credentials

Manera, who now works on a team with Herve Sene-

French connections is

— gets the apartment. The competition was pretty

quier and Leonard Steinberg at Elliman, started his U.S.

Corcoran’s Charlie At-

fierce. You ran your butt around the city. It was the

career as an actor, starring in the soap opera “Guiding

tias. Originally from

best way to learn the business.”

Light.”

Morocco, Attias’s first

Tirosh later moved on to Peter Ashe Real Estate, then in 2007 to Elliman, where he now works out of the company’s Madison Avenue office. Up to 20

language is French and,

“I was on it the year it got canceled,” he said. “It was the beginning and end of my acting career.”

Edward Johnston III

as such, a large majority of his clients are

But he decided to stay in New York after a pigeon defe-

percent of his business comes from Israeli clients

cated on his head at a Yankee game. He took it as a sign —

from Europe’s three

he meets through connections in Jerusalem. He

and a positive one at that. He got into real estate in 2009,

French-speaking coun-

also works regularly with U.S.-based Israelis.

and his Australian connections have served him since.

tries: France, Belgium

Israel is “not a big country, but relative to the population, there’s a lot of them here,” Tirosh said.

Australia Elissa Burke, Kane Manera and T im K ass

and Switzerland. Attias

“There are only 22 million of us [in Australia.] Friends, acquaintances, people I went to college with will

studied math and com-

pass my information along to people they know,” he said.

puter science in France

“I also try to go through Sydney every year to meet with

and Israel before finally moving to New York

clients.” At the Corcoran Group, Australia native Tim Cass is considered the resident expert on the land Down Under. An Australia native, Cass has lived in the U.S. for

Charlie Attias

to become a financial

trader. He has been a broker since 2000. Attias regularly travels around Europe to meet

hen Australia-born Halstead Property broker

23 years. Before becoming a residential broker in 2002,

with clients. He also conducts presentations for

Elissa Burke walks into an apartment for the

Cass was a bartender and then a partner in a retail fash-

buyers at conferences organized by French banks

first time, she can tell right away if it’s owned by a fel-

ion business. He spent 18 months at Citi Habitats before

and attorneys. He is currently listing seven apart-

low Aussie.

joining Corcoran.

ments at the Upper East Side condo conversion

“I always look at the bookshelves, and there are

Cass is perhaps best known for brokering the sale

1200 Fifth Avenue, totaling more than $13 million.

always at least two books that every Australian has,”

of Icelandic businessman Jon Asgeir Johannesson’s 15

she told TRD. “One of them is Robert Hughes’s ‘The

Gramercy Park North spread for $22 million last year,

Fatal Shore.’”

but he said at least 15 percent of his business comes

“I have some investors who are buying one or

from Australian clients. He recently represented an

two properties every six months to a year,” he said.

Burke worked in her native Queensland as a research

Australian seller in a transaction for a Tribeca pent-

“We hold the whole portfolio for them and rent

pharmacist for companies such as Bayer HealthCare,

house at 48 Laight Street, which was asking $4.25 mil-

them out and do the management for them. If they

Sanofi and Sterling Winthrop. The job took her to

lion.

decide to sell, we will sell them for them.”

Before transitioning into real estate in 2005,

66 December 2012 www.TheRealDeal.com

Attias said a large chunk of his business comes from French-speaking investors.

TRD

www.TheRealDeal.com January 2011 25

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Residential

I t ff

By Gabrielle Birkner n New York City, privacy is the ultimate luxury. So it makes sense that the demand for historic homes on New York’s secluded mews streets — often nestled off side streets, behind gates or old growth — would far succeed the supply.

“They come at a premium and they sell rather quickly because of the unique-

ness — and because they come up so rarely,” Nest Seekers’ Natalie Weiss said about homes on Pomander Walk, the Upper West Side hideaway where she grew up and has brokered deals for nine co-op apartments. Meanwhile, Jeff Wachtenheim, a salesperson with Town Residential, compared buying a home on a little-known New York street to buying a piece of artwork. “These are not cookie-cutter apartments in your typical glass-andsteel construction buildings,” he said. “There’s a lot of charm and Old World cachet to them.”

A look at N ew Y ork C ity ’ s little known ( and highly coveted ) tucked - away streets

Sniffen Court hides between Lexington and Third avenues in Murray Hill.

Mu r r ay H i l l

B r o o k ly n H e i g h t s

S n i f f e n C o u rt

L ov e L a n e / C o ll e g e Pl ac e

he 10 carriage houses on Sniffen Court appear better-suited to London’s fashionable Notting Hill neighborhood than to New York’s post-collegiate mecca of Murray Hill. Situated between Lexington and Third avenues, the 115foot street was designed in the 1860s as a way to keep the smell of horse manure off of the area’s main streets. Today, the stables have since been converted into exclusive — and coveted — single-family homes. In 2008, the Hewlett-Packard scion Arianna Packard and her husband, Christopher Martell, purchased a 4,900-square-foot home, a combination of No. 7 and No. 9, for $4.75 million. A year earlier, No. 8, roughly 3,080 square feet, traded for $4.1 million. And one of Britain’s most popular talk-show hosts, Graham Norton, bought the 2,223-squarefoot No. 6 in 2003 for $3 million.

68 December 2012 www.TheRealDeal.com

hese intersecting Brooklyn Heights streets — both fewer than 500 feet long — may not have the name recognition of nearby Henry and Hicks streets, but they are home to some of the neighborhood’s most coveted housing stock. Love Lane Mews, the 38-unit prewar condo conversion of four adjacent buildings on College Place, launched marketing in early 2011. All but nine units at the full-service development have sold or have signed contracts out, said Carole Bloom, vice president of sales and marketing at Manhattan Skyline Management, which is marketing the property in partnership with Sterling Equities. Prices for the available units range from $1.5 million for a 1,433-squarefoot two-bedroom to $4.7 million for a 3,000-square-foot four-bedroom pent-

This month, The Real Deal explored some off-the-grid streets — looking at developments new and old, recent deals and available properties — to get a sense of how the market differs for these tucked-away corridors.

house. Bloom said that Love Lane Mews has attracted a wide range of buyers, from young couples to empty nesters who have sold their homes in the suburbs. The attraction: “There’s very little pedestrian traffic. It’s so peaceful and so quiet that you have no idea that you’re anywhere in New York City,” she said. Across the street, the 25-foot-wide townhouse at 14 College Place, a turnof-the-century commercial building converted to fit in with the old carriage houses that surround it, is asking $5.2 million — and went into contract last month. The newly renovated home features 11-foot ceilings, a gas fireplace and a private terrace. Corcoran’s Lindsay Barton Barrett, Debra LaChance and Denise LaChance have the in-contract listing. They also sold the adjacent townhouse at 12 College Place (situated in the same structure and renovated at the same time) for $4.9 million in August.

Up p e r E a s t S i d e

Henderson Place

estled off East 86th Street, between East End and York avenues, is a short cul-de-sac home to six tall and narrow Queen Anne–style row houses. Now prime Upper East Side real estate, the homes were built at the turn of the 20th century for working-class families. No. 10 Henderson Place hit the market in July, asking $4 million. Last month, the five-story, 3,000-square-foot house was in contract at a negotiated price that was “close to asking,” listing broker Maureen McCarron, a vice president with Stribling & Associates, told TRD. “People like the privacy, that they don’t have to pass a [co-op] board and, architecturally, it’s what they want in a house,” McCarron said. The Henderson Place townhouses

were among the early commissions of the architecture firm Lamb & Rich, which would go on to design Theodore Roosevelt’s Long Island mansion Sagamore Hill as well as Brooklyn’s Pratt Institute. Last year, another home on the culde-sac, No. 12, was placed on the market, asking $3.9 million. It has since been delisted and rented out for $12,500 a month, according to listings website StreetEasy.

Upper West S ide

P o m a n d e r Walk

his quaint Upper West Side development bears the name of a romantic comedy that came to the New York stage in 1910. And if it weren’t for the highrise apartment buildings that surround it, a passerby might mistake the string of attached Tudor-style properties for a village in the English countryside. The brainchild of early 20th-century restaurateur Thomas Healy, Pomander Walk — once home to Humphrey Bogart, according to reports — rose on a vacant plot connecting West 94th and 95th streets, between West End Avenue and Broadway.

The carriages on College Place in Brooklyn Heights.

www.TheRealDeal.com January 2011 25

Residential

The 34 homes dubbed Warren Place Mews in Cobble Hill were originally developed as workmen’s cottages.

Today, the 27 houses with access to the private walk have been divided into 63 coops, most of which are small two-bedroom homes, said Nest Seekers’ Weiss. Weiss had the listing for a two-bedroom co-op there that traded in June for $710,000. And in August 2010, a three-bedroom unit sold for $1.6 million, 7 percent above its list price. A one-bedroom co-op, listed at $399,000, is currently in contract, according to Weiss, who is marketing the property.

C obble Hill

Wa r r e n Plac e

here’s a lot to be said for the Warren Place Mews townhouses in Brooklyn’s Cobble Hill. “They are private, they are adorable, they are fairy-tale,” said Ellen Gottlieb, an associate broker with Brooklyn Bridge Realty. And the townhouses can be had for less than $1.5 million, a bargain in a neighborhood where single-family homes regularly sell for upwards of $3 million. But there’s a rub: They’re tiny. The 34 homes that comprise Warren Place Mews were developed as workmen’s cottages. Designed in the 1880s by builder Alfred Tredway White, most of the brick row houses measure just 1,050 square feet. “Everyone wants it, everyone loves it,” said Gottlieb, who lives on Warren Place and who in May sold another home on the street, No. 1, for $1.3 million. “The only thing that keeps people from going forward is the size. … It’s hard to put a family of four in them.” Last year, No. 12 sold for $1.2 million to Simon Rich, the 28-year-old author and “Saturday Night Live” writer. The LaChance sisters marketed the property for Corcoran.

The Tudor-style properties on the Upper West Side’s Pomander Walk.

the borough’s priciest real estate. Fifteen condominiums at 60 Collister, formerly the American Express Carriage House, hit the market in February, after VE Equities purchased the sponsor units at the then-troubled building. Marketed by Fredrik Eklund and John Gomes of Douglas Elliman, the project sold out in seven weeks — with one notable exception: the 9,200-square-foot triplex apartment known as the Marble House. Named for the copious amounts of Carrera marble lining its interior, the Marble House — the brainchild of designer and film producer Stuart Parr, who is the owner-investor of the triplex — has been on and off the market since February 2009, when it was listed for $24.5 million. Once sales at the building were relaunched by Eklund and Gomes, the apartment came online again for $19.9 million; it has since undergone three price cuts, and is now listed for $14.9 million. It includes all the amenities of the full-service 60 Collister, in addition to a heated indoor pool and a 1,000-bottle wine cellar. The only other availability in the development is No. 1AB, two apartments being marketed together for $15.9 million. Those apartments, purchased in August by an LLC, have a combined 7,000 square feet of interior space, seven bedrooms and seven bathrooms. Zach Vella, a cofounder of VE Equities, said that 60 Collister’s location on a little-known street has been part of its allure. “It’s more residential, more private,” he said. “You can pull your car over there, and no one seems to bother anyone. In the morning you’ll see four or five [drivers] on the street, waiting for tenants.” In May, Elliman’s Raphael De Niro purchased a corner loft at 60 Collister for $3.53 million.

Tribeca

B rooklyn Heights

C o l li st e r Str e et

G r ac e C o u rt A lley

ollister Street, connecting Laight and Beach streets in Tribeca, is among Manhattan’s tiniest blocks. But it houses some of

28 March 2012 www.TheRealDeal.com

uilt in the early 19th century, Grace Court Alley’s stables once served the Remsen family, a prominent Dutch mer-

cantile clan, and other wealthy Brooklyn Heights residents. In November, a carriage house — this one built from the ground up in 1995 — was rented for its full $11,500 asking price. Brian Lehner, a senior vice president at Brown Harris Stevens, marketed the property. Lehner also had the listings for the two most recent townhouse sales on Grace Court Alley. He brokered the deals for No. 6, which sold for $2.7 million in 2011 and for No. 8, which sold for $2.65 million 2010. He noted that house hunters like the dimensions of the two-story carriage houses, which have layouts that are more horizontal and open than the average prewar row house. “They do come at a premium,” he said. “There is a very limited number of them in a very prime location. They don’t come up every day.”

Washington Heights

Sylva n T e r r a c e

wenty almost identical wooden row houses line this narrow cobblestone street, connecting St. Nicholas Avenue and Jumel Terrace in Washington Heights. Before the homes were built in 1862, Sylvan Terrace was an artery for horsedrawn carriages, leading to the Morris-Jumel Mansion, which George Washington used as a base during the Revolutionary War. (More recently, the street served as a backdrop for the HBO series “Boardwalk Empire.”) While still a relative value for a single-family home in Manhattan, prices for Sylvan Terrace properties are on the rise. No. 18, a 1,425-square-foot three-bedroom home, is on the market for $859,000. Corcoran’s Nancy Brennan has the listing. Four years ago, the same property traded for about half of its current listing price. Another townhouse on the block, No. 10, sold for $730,000 in July. TRD

Out of sight: Some of NYC’s other secret streets Beekman Place (Midtown) Connects East 49th and East 51st streets, between First Avenue and the FDR Drive Charles Lane (West Village) Connects West and Washington streets, between Perry and Charles streets Cherokee Place (Upper East Side) Connects East 76th and East 77th streets, adjacent to John Jay Park Hunts Lane (Brooklyn Heights) Off of Henry Street, between Remsen and Joralemon streets Jones Alley (Noho) Off of Lafayette Street, between Bleecker and Bond streets MacDougal Alley (Greenwich Village) Off of MacDougal Street, between Washington Square North and West 8th Street Patchin Place (Greenwich Village) Off of West 10th Street, between Greenwich Street and Sixth Avenue Rutherford Place (Gramercy Park) Connects East 15th and East 17th streets, adjacent to Stuyvesant Square Park Staple Street (Tribeca) Off of Jay Street, between Greenwich and Hudson streets Stuyvesant Street (East Village) Connects Third Avenue and East 10th Street, crossing East 9th Street Sylvan Court (Harlem) Off of East 120th and East 121st streets, between Lexington and Third avenues Weehawken Street (West Village) Connects West 10th and Christopher streets, between West and Washington streets

www.TheRealDeal.com December 2012 69

ARCHITECTURE REVIEW

JA M E S G A R D N E R

The inside man

With 135 East 79th, interior designer William Sofield breaks into exterior architecture with force

or most the past four decades, the entire block along 79th Street between Park and Lexington avenues has been blighted by the Hunter College School of Social Work. But the building, which was erected in 1972, was razed two years ago to make way for a luxury condominium: 135 East 79th Street. The main problem with the Hunter building was its woeful inadequacy to its context: amid the Upper East Side’s turn-of-the-century gentility of Georgian classicism, Art Deco and a few surviving townhouses, here was a sudden (and clamorous) barrage of 1970s Modernism. The building might have made a bit more sense in Midtown, but here on East 79th Street, it radiated a tremor of menace, even sleaze, in all directions. If that was the problem, the new building that’s rising quickly on the site, and that should be ready for occupancy in September 2013, is surely the solution. The nearly topped out condo, which is 19 stories tall, is being developed by the Brodsky Organization. It will include 32 two- to five-bedroom units, ranging in price from $8.125 million to $23 million. A typical unit is a half-floor with a private elevator landing, while some are duplexes. Although earlier reports had listed SLCE Architects as the designer, with William Sofield of Sofield Architects as the creator of the interior spaces, a spokesman for the Brodsky Corporation confirmed that Sofield is now the architect of the entire project. This fact is striking because 135 East 79th Street is the first building that Sofield, usually known as an interior designer, has designed from the ground up — with the possible exception of a few boutiques abroad. Mostly, he’s known for his services to the fashion industry: He has designed an astonishing 400 boutiques for Gucci, in addition to stores for brands like Yves Saint Laurent, Bottega Veneta and Boucheron, which were acquired by the Gucci Group. Before this, his biggest project in New York had been the Soho Grand Hotel, whose interiors he designed in 1996. However, Sofield’s credentials as an interior designer seem to have been put to good use in the creation of this latest project. According to the Brodsky Organization’s website, the building’s exterior will boast “carved stone, custom-pigmented hand-laid brick, hand-cast ironwork and oversized, fully customized window systems.” The interiors, meanwhile, will

70 December 2012 www.TheRealDeal.com

way, more experimental in its use of volumes, including balconies, recessions and beveled corners. In this respect it resembles the top floors of the taller, recessed half of 15 Central Park West that aligns Broadway, with the key difference that it avoids the jarring asymmetries that mar the summit of that building. However, a key Rendering of 135 East 79th Street, which is slated to open next fall difference between 135 East 79th and its aesthetic antecedents on the Upper East and Upper West sides Developer Daniel Brodsky of the of Manhattan is that, Brodsky Organization whereas they occupy either an entire block or a corner of their own blocks, this newcomer is a mid-block building. As such, it must address issues of compatibility that are not present — or that are less present — in the others. Specifically, it has Georgian structures on either side: the 15-story 139 East Architect William Sofield 79th to the east and a townhouse two plots wide at 123 East 79th Street to the west — both brick with limestone accents. Although the new arrival is of a slightly different palette, it fits in perfectly with its neighbors because of the general similarity of its architectural language, certainly in comparison with the now-demolished Hunter College building. For example, the stone accents at street level rise to the base of the third floor, where they are perfectly flush with the similar articulation of 139 East 79th Street. The effect is entirely graceful and harmonious. As a consequence of this building’s projected completion in less than a year, East 79th Street will look decidedly better than it ever has before, especially when to dominate its exterior. Although the by I. N. Phelps Stokes in 1926. In this new building, as in those ear- one factors in the recent completion of East 79th Street building has setbacks lier examples, the grand entrance, punc- two other condo buildings: 300 East 79th and shallow terraces on its 14th and 18th floors, it presents to the world a strikingly tiliously centered, is announced by a Street and 200 East 79th Street, at the soaring two-story arch with a mullioned southeast corners of Second and Third planar façade. According to the rendering, the building will be dominated by window on the second floor. Flanking the avenues. In the meantime, the Hunter School five bays of single or double windows, entrance at the ends on either side are of Social Work — now known as the Lois the second and fourth bays being slightly two slightly narrower arches of a similar height. V. and Samuel J. Silberman School of Sorecessed from the street wall. I believe that a further echo of 15 Cen- cial Work at Hunter College — has reloIt appears that the bulk of the building tral Park West can be seen in the handling cated to Third Avenue between 118th and will be clad in gray brick, accented along the sides with pale granite or limestone of the building’s summit, which, start- 119th streets, where it inhabits a slightthat continues up into the fifth floor, afing at the 14th floor, becomes decidedly ly more contextual building designed by ter which the gray brick takes over. At more varied — and, in a slightly hesitant Cooper, Robertson & Partners. TRD have “solid herringbone patterned wood floors” and “ bespoke millwork kitchens.” Viewed in the context of Sofield’s previous career, the entirely pleasant exterior of 135 East 79th Street makes perfect sense: It seems to have been conceived less in architectonic terms — with bold volumes and setbacks and such — than in terms of interior décor turned inside out until the aims of that discipline came

ground level, the building looks especially promising. It’s a kind of homage to the great prewar buildings surrounding Central Park. Clearly it has been inspired in part by Robert A.M. Stern’s legendary 15 Central Park West, completed in 2009, but even more by 927 Fifth Avenue, designed by Warren & Wetmore in 1917, as well as 956 Fifth Avenue, designed

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11/2/12 9:38:23 AM

VITAL STATS NAME: Arik Lifshitz AGE: 31 TITLE:

CEO, DSA Property Group HOMETOWN:

Rockland County, N.Y. CURRENTLY LIVES IN:

BUILDING BLOCKS

Englewood, N.J.

How many buildings do you currently own? We currently have about 40 buildings. We’re Manhattan based, but we’ve recently made a push into Queens and Brooklyn. In Manhattan, a large portion of our portfolio is in the East Village, but we also have holdings on the Upper East Side, the Financial District, Midtown and Harlem. We have a building Downtown at 11 Maiden Lane with 70 units. That’s currently our largest. How did you get into real estate? My grandfather was a Holocaust survivor and then a schoolteacher. He saved every penny he had so he could buy a small brownstone on the Upper West Side. He was eventually able to retire off of the income from that one building. My father decided to get into real estate in the mid-’80s, but he didn’t have much capital. Yet he and my uncle were able to put together a couple of buildings [in the East Village]. I was brought up in the business, doing construction work and odd jobs when I was in high school. Later, I was working in real estate finance, underwriting Fannie Mae loans, when my father said he was interested in semiretiring and moving to Israel. He’s still involved, but [I took over] in 2004. What are the biggest challenges of your job? Dealing with the legal environment is definitely our biggest challenge. Whether it’s nonpayment cases or being sued for a trip-and-fall type of thing, the system is stacked against us. It comes with the territory. The other challenge is finding acquisitions. There are so few good deals and so much capital out there. It seems like everyone’s source of funds is getting cheaper and cheaper. I wish I knew where to find those funds.

312 East 93rd Street

324-6 East 13th Street

sponded. It’s the biggest joke. There was more to the story. We have other tenants who have asked the same thing of us and we’ve complied. [The tenant] wasn’t living there. She was renting out all the rooms as a hotel.

LANDLORD LIFE

Did the story affect your business in any way? Yeah, it did. I had a deal that fell apart right around that time. It was such a nice and friendly deal, and all of a sudden it just turned sour. [The seller] gave me a parting shot in an e-mail, saying, “Come on, give her the lease already.” I was like, “Seriously, really?” We also received harassing phone calls from anonymous individuals. The callers left long-winded messages poking fun at my Jewish faith. I guess they felt my religious beliefs were behind my unwillingness to give the tenants what they wanted.

What are the tools of the trade you could not live without? Good supers. A good super is the key to the success of any building.

THE BOTTOM LINE

What’s been your strangest experience as a landlord? I was doing a renovation in an apartment [during my summer vacation in high school] and the cops came to the unit. They wanted to use the apartment to stake out a drug dealer who was in the park across the street. Two weeks later, I see 20 cop cars chasing this guy on the street. It was a totally different time. We were always in court testifying against drug dealers who lived in our buildings. What’s your tenant horror story? We had a tenant at 700 East 9th Street named Daniel Rakowitz, a.k.a. the butcher of Tompkins Square Park. He sacrificed his girlfriend to the devil. He chopped her up [boiled her remnants into a soup] and fed her to the homeless people in the park. Do you still own that building? Yes. I don’t think the current tenants know much about the history. Earlier this year, DSA was accused of denying a lesbian tenant the right to add her same-sex spouse to her lease. What’s your side of the story? My first response to reporters was “no comment,” but I should have re-

72 December 2012 www.TheRealDeal.com

How did the recession impact your business? Rents came down about 25 or 30 percent. We had a huge amount of turnover as people unfortunately lost their jobs and had to rethink their situations. But rents came back after a year or two. How did Hurricane Sandy affect you? We were ground zero in Alphabet City and with our Financial District properties. But we escaped relatively clean. We had our problems, but we fixed them. For years, our insurance broker was forcing us to get flood insurance, and I always tried to see if we could get out of it. That was my first phone call [after power came back], to thank her. What’s your current strategy for acquisition? We’ve always been long-term buy-and-hold owners. The real estate game was always a slow business, but now we’re just finding it even slower. With prices where they are, it just takes much longer to recoup your initial investments. We’ve found that we have to alter our approach. That means buying properties with an eye toward selling, which is a new concept for us. It’s the same outlook, just a different exit strategy. By Katherine Clarke

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INVESTMENT SALES

2012’s biggest money makers

A ranking of this year’s Manhattan building sales by the highest rate of return for their sellers

BY ADAM PINCUS ypically, investment sales deals are ranked by the sale price, but that emphasis hides the figure that real estate players truly care about most: how much money the deal made. Indeed, the number that real estate investors brag about at the end of the day is their return on equity. That figure reveals how effectively an investor deployed his or her money. So for the first time, this month The Real Deal ranked Manhattan’s top commercial building sales for 2012 by their estimated return on equity. “These are numbers everybody wants to hear, but nobody wants to give up,” said Dan Fasulo, managing director at commercial data firm Real Capital Analytics. Most institutional investors look for annual returns of about 10 to 20 percent; many of these deals, however, have netted much higher figures. The TRD data included only full building sales above $100 million that closed and were available in city property records as of the middle of last month. Some deals did not make the cut because they have not yet closed. For example, the retail condo sale at 666

Seller: David Frankel Realty Address: 724 Fifth Avenue Total profit: $279.9 million Annual return on equity: 215 percent

ome deals are not enormous in absolute numbers, but are still seriously profitable for the sellers. The sale of David Frankel’s 724 Fifth Avenue, home to high-fashion retailer Prada since 1998, is one of those deals. A partnership led by Frankel’s father acquired the 56,400-square-foot office-and-retail building located between 56th and 57th streets in 1947. Although the purchase price was not disclosed, Frankel’s father took out a mortgage of nearly $600,000 when he bought the building. Based on typical loan-to-value ratios at the time,

Fifth Avenue was not included, but is still expected to be a big moneymaker for its sellers. In our analysis, we estimated the returns by dividing the net profit from the sale of the property, along with annual gains and losses, with the total cash invested and the number of years owned. We calculated the figures using city Department of Finance records of income and expense, taxes and mortgage debt on the properties, as well as similar data from mortgage tracking firm Trepp where available. The deals were done by a remarkably small group of brokers. Eastdil Secured’s Doug Harmon and Adam Spies handled six of the deals, while the CBRE Group’s Darcy Stacom and William Shanahan represented the sellers on two. The final two did not have brokers. While several of these sales generated outsized returns in just a few years, Fasulo noted that there will be more recovery-fueled deals next year. “Some who purchased in 2010 or 2011 have hit their five-year return levels already in 18 or 24 months,” Fasulo added. “At some point, they will be tempted to sell.” Read on for TRD’s ranking of the top 10 owners who saw the biggest returns on their property sales in 2012.

it, the building generated an estimated $279.9 million for Frankel.

Sellers: Crown Acquisitions, Lloyd Goldman, Feil Organization, others Address: 2 East 55th Street, 697 Fifth Avenue Total profit: $271.2 million Annual return on equity: 167 percent

he New York investors who partnered to buy the retail at the St. Regis hotel barely had to lift a finger to increase the value of their investment, one insider said. The cash outlays that increased the value of the 24,800 square feet (spread between a retail condo at the St. Regis and an adjacent five-story building) were

“These are numbers everybody wants to hear, but nobody wants to give up.” DAN FASULO, REAL CAPITAL ANALYTICS that suggests the purchase price was likely between $1 million and $2 million. The property got a shot in the arm when Prada recently extended its lease, which now expires in approximately five years. Frankel sold the building for $223 million in late January to a partnership of Jeff Sutton and SL Green Realty, who together own the neighboring building at 720 Fifth Avenue. The deal was the most profitable $100 million-plus sale of the year. According to TRD’s analysis, the building generated positive returns annually — the most debt it ever had was $9 million. Indeed, when factoring in the sale price and the money it threw off annually during the time that he owned

74 December 2012 www.TheRealDeal.com

minimal, the source said. He joked that the investors paid for a couple of airline tickets to Europe to woo tenants and potential buyers. Beyond that, “not even a paint job,” he said. Whatever the tactics, they worked. The investment group bought the property for $117 million in November 2009, with an in-place capitalization rate of about 5 percent, meaning the property had a net income of about $6 million annually. That barely budged over the three years they owned it. However, a steep increase in investment pricing along Fifth Avenue led Swiss luxury retailer Richemont to pay $380.6 million for the space. The result? An annual return on equity of 167 percent.

724 Fifth Avenue was Manhattan’s most profitable $100 million-plus sale of 2012.

530 Fifth Avenue, right, sold in January for $390 million. Sellers Joe Moinian, above, and Joe Chetrit.

PHOTOGRAPH OF MOINIAN FOR THE REAL January DEAL BY MARC SCRIVO www.TheRealDeal.com 2011 25

INVESTMENT SALES

Manhattan sellers who saw biggest equity returns in 2012 SELLER

ADDRESS

PURCHASE PRICE

SALE PRICE

RETURN ON EQUITY

David Frankel Realty

724 Fifth Avenue

$1 million

$223 million

215%

Crown Acquisitions, Lloyd Goldman, Feil Organization, others

2 East 55th Street, 697 Fifth Avenue

$117 million

$380 million

167%

Sitt Asset Management and Carlton Associates

1370 Broadway

$57.2 million

$123.8 million

158%

Harbor Group International

4 New York Plaza

$107 million

$270 million

123%

Moinian Group, Chetrit Group, David Werner

530 Fifth Avenue

$210 million

$390 million

114%

Savanna and Monday Properties

386 Park Avenue South

$44.2 million

$111.5 million

105%

Walter & Samuels and individual investors

304 Park Avenue South

$18 million

$135 million

72%

Property Group Partners

148 Lafayette Street

$59 million

$126 million

34%

Cariplo Pension Fund

10 East 53rd Street

$58.4 million

$252.5 million

29%

Waterman Interests and JPMorgan Asset Management

130 Prince Street

$112 million

$140.5 million

15%

Source: Purchase and sale prices are from city records reported on Acris, except for the purchase price for 724 Fifth Avenue, which TRD estimated to be $1 million to $2 million based on a mortgage in 1947 of $600,000. The return on equity figures were calculated by subtracting the purchase price from the sale price, adding in annual profit and loss figures based on city tax documents, and dividing by equity invested and then by number of years held.

Sellers: Sitt Asset Management, Carlton Associates Address: 1370 Broadway Total profit: $68.9 million Annual return on equity: 158 percent

he third most profitable Manhattan building sale of the year was not a flashy Fifth Avenue deal. Instead, it involved a bread-and-butter investor simply buying a property ahead of the market’s curve. In July 2003, Sitt Asset Management and Carlton Associates — the family that launched the Duane Reade drugstore chain — purchased the 275,055-squarefoot office building 1370 Broadway at 37th Street for $57.2 million. That was just under the wire, before the boom in investment sales volume and value began the following year. Getting in at such a low price point allowed the Sitt brothers (Eddie, Ralph and David), along with Carlton, to cash out when they took a $60 million mortgage in 2006, city records show. However, because they spent money on upgrades and build-outs for tenants as well as brokerage fees, and saw what appears to be a slim annual profit margin, TRD estimated that $5 million of equity remained tied up with the building. With such little equity in the building, the sellers yielded the extremely high annual return on equity of 158 percent when they sold the property in April to Normandy Real Estate Partners for $123.8 million.

Seller: Harbor Group International Address: 4 New York Plaza Total profit: $155.9 million Annual return on equity: 123 percent

arbor Group International, a private real estate investment group headquartered in Norfolk, Va., took a risk in January 2010 when it paid JPMorgan Chase $107 million for the 1 million-

28 March 2012 www.TheRealDeal.com

Above: The retail at the St. Regis, top, sold for $380.6 million. Insets from left: Sellers Haim Chera of Crown Acquisitions, Lloyd Goldman and Jeffrey Feil.

Sitt Asset Management got a 158 percent annual return on equity when it sold 1370 Broadway.

square-foot Lower Manhattan office building. The firm got in at a low price — just over $100 per square foot — as the economy was in the doldrums, investors were nervous and building sales were only just beginning to recover from the near-col-

386 Park Avenue South sold for $111.5 million in September.

lapse of the market in 2009. Harbor put $30 million of cash into the deal and received a loan for $77 million. The company outlaid another $25 million in tenant improvements, brokerage fees and upgrades (which includes the lobby), Harbor chairman and CEO

Jordan Slone told TRD. Those improvements helped attract new tenants such as tabloid publisher American Media Inc. to fill the building’s yawning vacancies, said Slone, who declined to comment on the company’s estimated returns. But Harbor’s purchase of the building — which counts JPMorgan, the Daily News as well as American Media Inc. as tenants — paid off. By 2011, building prices began to surge. And after owning 4 New York Plaza for just 28 months, Harbor sold it for $270 million in May. That yielded an annual return on equity of 123 percent — or $155.9 million in profit — on the $55 million of cash the firm invested in the deal. Slone said Harbor’s expectations going into the deal in 2010 were much more modest. “We anticipated a holding period of about five years and anticipated an [annual return] in the high teens or low 20s,” he said. And while the firm had done deals with higher return rates, he believed it was Harbor’s most profitable deal in pure dollars. The sale’s timing was fortuitous in another way: In late October, just five months after that sale, 4 New York Plaza was heavily damaged by flooding from Superstorm Sandy (see related story on page 42).

Sellers: Moinian Group, Chetrit Group, David Werner Address: 530 Fifth Avenue Total profit: $183.1 million Annual return on equity: 114 percent

hile the Moinian Group has struggled — along with many other developers — because of purchases it made during the market’s run up, the company and its partners did well on the sale of 530 Fifth Avenue. Moinian, the Chetrit Group and inContinued on page 101

www.TheRealDeal.com December 2012 75

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Q&A

Brokers in hard-hit areas take pause As residents cope without basics like electricity, the real estate market is ‘almost nonexistent’ in neighborhoods that were ground zero for the storm

BY MELISSA DEHNCKE-MCGILL or some residential real estate brokers, when Hurricane Sandy hit, the deals stopped. And they have not yet picked up. Indeed, while much of the city and surrounding area has gotten back to business as usual, there are a handful of communities where, of course, that is not the case. This month, as part of The Real Deal’s broader coverage of Sandy, we talked to brokers from three of those areas — the Rockaways in Queens, Staten Island and Hoboken in New Jersey — to see how they rode out the storm and how the hurricane has impacted their business in the last month. What we discovered is that, along with the residents the storm left homeless and the damage it did to property and infrastructure, it also put the kibosh on the real estate market. Indeed, in areas like Breezy Point in the Rockaways, where 110 homes burned to the ground during the storm and in some of the low-lying waterfront neighborhoods on Staten Island, the market has ceased to exist. “The residential sales volume in the affected areas is almost nonexistent,” said Mimi Neuhaus, founder of the Staten Island brokerage Neuhaus Realty.

THE ROCKAWAYS

Lisa Jackson

president, Rockaway Properties Did you have properties or listings in the Rockaways that were damaged or destroyed by the storm? Every home was damaged by varying degrees. We are currently regrouping with our clients to assess the market and each client’s immediate needs. From a business perspective, what is the greatest challenge you’ve faced in the wake of the storm? Lack of electricity? Property damage? Transportation? All of the above and difficulty communicating with our clients. What long-term impact do you think Sandy will have on the real estate market in the Rockaways? What factors will come into play? We think there will be a period of uncertainty and some price reductions as we move forward … [but] we have a very stable community, and most of the buyers and sellers are committed to staying and rebuilding in the Rockaways. Over the next few months, what do you think will be the biggest challenges to selling or renting residential property in the Rockaways? A challenge for renting might be we do not have the inventory to house owners while they wait until their homes are rebuilt. Are you seeing investors or developers already starting to look at buying

or developing property in the area to take advantage of the post-Sandy market? We have been approached by investors and buyers looking to purchase distressed properties and renovate these homes with a quick turnaround. We are here to help those looking to sell and, in turn, restore and rebuild our community.

Robert Tracey

broker/owner, Tracey Real Estate How did your office in the Rockaways fare during the storm? The office in Gerritsen had five feet of water. Did you have properties or listings in the Rockaways that were damaged or destroyed by the storm? My clients in Breezy Point [where 110 homes were destroyed by a fire] and the Rockaways were obviously very affected. So many homes were destroyed or burnt down. Right now the emotional level is still so high. We are waiting. It is too soon. In most of the Rockaways, there is light and heat. Breezy Point is still not up and running. Probably in the next four to six weeks. Do you think the storm will deter homeowners from staying in the area? People who want to live by the water know the hazards of wind, rain and surf. The community will come back stronger. There are some families that have been there 60, 70, 80 years. All in all, [the community] may lose 10 percent of the snowbirds [who] might say they are not going to wait for another storm.

Not only have buyers backed out of deals and closings been put on hold, but until homes are rebuilt there is little reason to believe that the market will restart. There are two exceptions to that. The first exception is investors who have started sniffing around distressed homes with the intention of renovating and selling. The second is displaced families who are looking for short-term rental housing. But the latter is already proving to be a challenge. “We do not have the inventory to house owners while they wait until their homes are rebuilt,” said Lisa Jackson of the residential brokerage Rockaway Properties. Other longer-term concerns center on whether buyers will reconsider purchasing property in vulnerable waterfront areas and whether flood insurance will be available if they do. Meanwhile, in Hoboken, which saw major flooding, the market seems to have bounced back quicker. The market there has picked up after a few slow weeks. But there, too, brokers have to deal with finding displaced residents’ rentals and have undergone a shift in thinking about the risk of flooding in ground-floor apartments. For more, we turn to our panel of experts.

From a business perspective, what is the greatest challenge you’ve faced in the wake of the storm? Lack of electricity? Property damage? Transportation? A little bit of everything in the wake of the storm was affected. The shutdown of gas was an unforeseen problem. Also, how to help those displaced people who need a place to live but don’t know how long they need it, and then finding them a shortterm place to live. What long-term impact do you think Sandy will have on the real estate market in the Rockaways? Will flood insurance be available? Can they afford to live there if it isn’t? Some people have lived there for 50 years and maybe won’t rebuild or they will sell the land. In Breezy Point, it’s a question as to whether they will be allowed to build right next to each other again. Mandated changes by the city will be made to new construction to make houses safer. How is overall residential sales and rental volume in the Rockaways now? Nonexistent, but it will come back strong. Everyone is active repairing what they can. Any properties that were affected in Brooklyn or the Rockaways has to have a mandatory property inspection. What impact do you think the destruction of the Rockaways’ boardwalk will have on the overall real estate market — specifically the retail market — in the area? It will definitely affect the retail. It depends on how fast they can rebuild the shore. A lot of owners weren’t required to have flood insurance, but they can apply for loss of business income.

Over the next few months, what do you think will be the biggest challenges to selling or renting residential property in the Rockaways? Getting everyone to believe this isn’t going to be a common occurrence. STATEN ISLAND

Mimi Neuhaus

founder/broker, Neuhaus Realty What did you personally do to ride out Superstorm Sandy? Did you evacuate or stay in the neighborhood? My home is located in an area where the storm surge was not a concern, so I was able to stay home during the storm. I did advise the agents in the office to remove all signs from the listings. I advised those clients located in the dangerous areas to heed the warning of the officials and evacuate as advised. Did you have properties or listings in Staten Island that were damaged or destroyed by the storm? What are you doing to market these properties and others that were not damaged? Several office listings which were located in the low-lying beach areas of Staten Island were damaged or flooded in the storm. The damaged homes will not be marketed until the damage is completely evaluated and the necessary repairs made to make the home habitable. The condemned properties will obviously be off the market until they are rebuilt. The homes that were not damaged will continue to be marketed as usual. www.TheRealDeal.com December 2012 77

Q&A What is the state of mind among Staten Island residents? Are they anxious to leave the neighborhood, or do they want to rebuild? Many of the Staten Island residents whose homes were destroyed or damaged are planning to rebuild. Amazingly, when you speak to these residents, they are extremely hopeful and grateful for the ability to rebuild and for the assistance and support from the local community.

selling or renting residential property in Staten Island? There will be challenges ahead to selling or renting in the areas most affected by the storm. Some contracts have fallen through and buyers have backed out of some deals. Buyers will certainly be more cautious about purchasing a home in the vulnerable waterfront areas. The rental market could potentially decrease as well.

What long-term impact do you think Sandy will have on the real estate market in Staten Island? The real estate market on Staten Island will likely stabilize in the long term. I believe most property values will return to prestorm figures. Those properties in the most heavily affected areas will likely see a decrease in values. Buyers in this area will likely become more sensitive to a particular property’s elevation. Insurance rates are likely to rise in this area, and in certain elevations insurance may not even be attainable. The Department of Buildings is currently evaluating the construction codes in the heavily affected area. There may be some changes in the requirements for new construction as well as updating the codes for preexisting homes. Some lots may be deemed unbuildable.

HOBOKEN

How is overall residential sales and rental volume in Staten Island now compared to just before the storm? What do you expect to happen to sales volume along the vulnerable waterfront? Residential sales [throughout Staten Island] have been steady since returning to business as usual. But the residential sales volume in the affected area is almost

In the wake of the storm, what are you doing to market these properties and others that were not damaged? We were back on Nov. 5 with no flood damage to the office, but activity was slow [at first]. [Then it shot up] to previous pre-Sandy levels, but Hoboken has nothing on the market. There are less than 140 total properties available

Eugene Cordano

director of sales, metro New Jersey, Halstead Property What impact did the storm have on your properties and listings in Hoboken? They are minor repairs [related to the flooding]. There is also a bottleneck of closings — the banks are delaying because they are reinspecting everything. They are sending an appraiser or inspector to make sure there is no physical damage before they allow a sale to close. But the impact is temporary. A couple of deals may go south.

“Every home was damaged by varying degrees. We are currently regrouping with our clients to assess the market and each client’s immediate needs.” LISA JACKSON, ROCKAWAY PROPERTIES nonexistent. Rental volume has increased dramatically. Many families are displaced due to damaged homes and devastated neighborhoods. The rental inventory has not been able to keep up with demand.

on the MLS. The market is strong. The storm gave pause, and the people that were displaced are snatching up what was available in rentals, which tightened the market.

What kinds of discounts off asking prices were being seen in the area before the storm? Do you expect more discounts now because of more devastation in the area? Sellers can expect to receive an average of 5 to 7 percent off the asking price for a property. I do not expect this expectation to change because of the storm.

From a business perspective, what is the greatest challenge you’ve faced in the wake of the storm? Transportation is the biggest challenge. The Hoboken PATH station is still closed. Buses and ferries cannot absorb the traffic. There are people that are traveling three hours on the bus through the Lincoln Tunnel. The property damage is not detrimental enough to be permanent. There was no catastrophic flooding like at the shore.

Over the next few months, what do you think will be the biggest challenges to 78 December 2012 www.TheRealDeal.com

What long-term impact do you think Sandy will have on the real estate market in Hoboken? Right now, I think the impact is that it puts everyone on notice that this could happen again, and that will change how spaces are used, with the [location of utilities especially]. Hoboken was in demand before, so I don’t think it will hurt our market. I think some good will come out of it with improvements to designs … but it remains to be seen. How is overall residential sales and rental volume in Hoboken now, compared to just before the storm and a year ago at this time? It is very strong year over year, [but] there haven’t been enough closings. Last month, many closings did not take place that might have. There are a number of things on the market that we cannot show because they are being cleaned up and are put on hold. We are taking names and numbers of buyers or renters. As soon as we are cleared, we can move quickly to put them back on the market. The average time a house is on the market is below 55 to 60 days. We may see that tick up a little as units clear inspection.

Rehanna Gallagher

founder & president, Prudential Castle Point Realty What did you personally do to ride out Superstorm Sandy? Did you evacuate or stay in the neighborhood? I stayed in my house that was flooded and had no electricity. I had water in the ground-floor apartment. I’m in the process of trying to dry it out and fix it now. But none of my listings were [damaged]. How big of an issue was the flooding for the Hoboken real estate market, and what sort of long-term impact do you think it will have on the market? The biggest problem we had was the flooding and with that came the property damage. All of the ground-floor apartments, where some people lived for 5060 years — all of that has been washed away. That’s the major issue here. You can live with a storm that knocks down a tree or your electricity, but when your basement is floating away, that’s difficult to take. If you were in a ground-floor apartment, you were out of your house because it was more than likely you had water in your home. We have people who just bought homes and have damage to their kitchen and dining room. They are now looking for temporary housing. … It’s going to be a little more difficult right now to convince someone to buy a low-

er-level or ground-level apartment even though you have a garden and the things people want. Do you think demand for real estate will wane in Hoboken because of the storm? We have not seen any buyers scared off from Hoboken. I’m not expecting it to have a huge negative impact because, as is, we are very light on inventory. Just before Sandy, anything that came on the market was in a bidding war. There are going to be people that will say, no, they don’t want to live on the ground floor. But I think we will be fine. How is overall residential sales and rental volume in Hoboken now, compared to just before the storm and a year ago at this time? Inventory is less than it was a year ago. Rentals are pretty much at a premium here because we have no inventory. Our absorption rate is maybe 12 weeks, which is crazy. What’s going on with residential prices and rents in Hoboken now? Do you expect any changes in price because of Sandy? I don’t expect changes in prices. Before Sandy our prices were going up, definitely. I don’t see anything changing in the short-term because we still have buyers out there who are getting shut out of places. … It’s more of a wait-and-see until the beginning of the year. What kinds of discounts off asking prices were being seen in the area before the storm? Do you expect more discounts now because of the storm damage? In the last six months or year, we haven’t had any discounts. If something was listed at $450,000, it sold at $459,000 or $510,000. We have 14 things that came on the market in the last week for sale in Hoboken with prices from $200,000 to $1.7 million. One unit sold in six days with a listing price of $585,000. Another listed today and went under contract today. Over the next few months, what do you think will be the biggest challenges to selling or renting residential property in Hoboken? The biggest challenge is going to be inventory because we have more families staying than leaving. It used to be a big turnover, three to five years. Now people are moving from one-bedroom condos to two-bedrooms. More often they are moving from a condo to a home. So the homes and brownstones have gone up in value. It’s a challenge. That’s why something like a Toll Brothers project will sell out very quickly; we don’t have that much room in this town. We don’t have more land that’s vacant to keep building on. TRD

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

NATIONAL MARKET REPORT

Minneapolis

Usher’s Georgia mansion

AtlantA The musician Usher listed his 12,544-square-foot Georgia mansion for $3.2 million last month, the Huffington Post reported. In 2007, Usher paid $3 million for the six-bedroom home, which is located in the Atlanta suburb of Roswell. It has been occupied by his ex-wife Tameka Raymond since their 2009 divorce. Leonardo DiCaprio

Minneapolis In a deal that would mark the priciest Minneapolis office building sale since 2007, San Francisco–based Shorenstein Properties is set to acquire one of the city’s tallest skyscrapers for just over $200 million, the Wall Street Journal reported. Shorenstein is on track to acquire 33 South Sixth Street City Center from Brookfield Office Properties. The 50-story City Center building is 94 percent occupied, with much of its office space leased to Target. Built in 1983, the tower was designed by Skidmore, Owings & Merrill and is centrally located on the Nicollet Mall, a popular shopping area. The base of the tower contains about 382,000 square feet of retail space, which has struggled to compete with suburban malls, the Journal said. Vacancy in the Minneapolis office market in the third quarter was 18.2 percent, down from 19.8 percent in the same period two years ago. Effective annual office rents, which include landlord concessions, rose 1.9 percent in the third quarter to $16.86 per square foot from the same period of last year.

San Francisco The San Francisco Planning Commission gave developers permission to move forward with a 61-story, 1.4 million-square-foot office building, which would be the tallest building on the West Coast, Commercial Property Executive reported. A joint venture of Hines and Boston Properties is expected to finalize a $190 million acquisition of the land, located in downtown San Francisco, in the first quarter of 2013. Hines is also developing the nearby $4 billion, 1.3 millionsquare-foot Transbay Transit Center. Christopher Roeder, international director at Jones Lang LaSalle, told CPE that San Francisco’s commercial market has absorbed nearly 3.5 million square feet in the past two years.

Los Angeles Los Angeles’s famed El Royale apartment building, which is known for its celebrity tenants, has traded hands for $29.5 million, the Wall Street Journal reported last month. New York–based landlord Kamran Hakim and California real estate attorney Farhad Eshaghpour bought the 56-unit rental building from a family trust after winning a bidding war. Current renters in the 83-year-old Art Deco building include “Girls” creator Lena Dunham and talk show star Kathie Lee Gifford. Previous residents have included Uma Thurman, Katie Holmes and Clark Gable. Since the former owner, Martha Scott, died in 2009, the El Royale has reportedly fallen into some disrepair and 82 December 2012 www.TheRealDeal.com

faced staff shortfalls. The new owners told the Journal they aim to make the building “a better place to live” and plan a roof deck facelift, new paint for the lobby and landscaping the grounds. “We don’t have any plans to sell it, ever,” Hakim told the Journal. Rents in the building range from $2,350 for an 830-square-foot one-bedroom to $8,800 for a duplex penthouse. The median asking rent in Los Angeles is $1,900 per month, according to Zillow.

Phoenix A Frank Lloyd Wright–designed house seems to have narrowly avoided demolition, the New York Times reported. Wright built the four-bedroom Phoenix home for his son David in 1952, and it was sold by Wright’s great-granddaughters for $2.8 million in 2009. This spring, Steve Sells and John Hoffman, partners at the development company 8081 Meridian, purchased the house for $1.8 million. They obtained a permit to demolish it, with plans to split the lot and build two new homes. In response, the Chicago-based Frank Lloyd Wright Building Conservancy asked the city of Phoenix to landmark the home, preventing its demolition. Meanwhile, an anonymous buyer stepped in, agreeing to purchase the house for $2.4 million in cash, though the deal hasn’t yet closed. The city is set to vote on the landmark designation Dec. 5, according to the Phoenix Business Journal.

Malibu Actor Leonardo DiCaprio listed his beachfront Malibu estate last month for $23 million, the Los Angeles Times reported. The oceanfront estate had been listed for rent this summer at $75,000 per month. It contains a four-bedroom main house overlooking the ocean, a two-bedroom guest house and a loft space with an office and a gym.

Las Vegas In the largest sale of a Las Vegas multi-family development since 2007, the 840-unit Renaissance Villas Apartment Community complex traded hands last month for $74.75 million, or about $89,000 per unit, GlobeSt reported. The owner, Southern Nevada Income Properties, sold the 95 percent-occupied property to Riverview Development XVIII LLC. The 281,744-square-foot property was built in 1989, CoStar reported. The 200 one-bedroom and 640 two-bedroom units command asking rents between $650 and $935 per month. Lloyd Sauter and Patrick Sauter of NAI Sauter Companies, a Las Vegas investment real estate brokerage, represented both the buyer and seller in the transaction. According to GlobeSt, Las Vegas saw 40 apartment complexes sell in the first six months of 2012, totaling 4,561 units, a total of $153.5 million. That’s an 81 percent increase in transactions over the second half of 2011. The average price per unit also increased about 32 percent during the same period, from $25,500 to $33,654. Compiled by Zachary Kussin

The Naples home of Jack Connors

Naples Advertising executive Jack Connors put his Naples, Fla., compound on the market for $22.9 million, Curbed reported last month. The five-bedroom home comes with a tennis court and sits atop 1.6 acres in the Port Royal neighborhood. Connors purchased the home in 2006 for $16 million.

ON THE MOVE News from the Bellmarc Group The combination of Bellmarc Sales and AC Lawrence Rentals creates a new dynamic in the marketplace. The company is bullish on future prospects. As part of its growth strategy, Bellmarc has acquired AC Lawrence, one of the most prominent names in Manhattan rentals. The two companies will operate as independent entities under a new umbrella company, The Bellmarc Group. With this transaction, both companies benefit from additional market share and expanded technology, training, management and ancillary services. According to Neil Binder, principal of The Bellmarc Group, “AC Lawrence creates a wonderful synergy with Bellmarc’s sales operation.”

High Profile Offices The company has six storefront locations throughout Manhattan. The flagship office for AC Lawrence is a newly renovated 13,000-square-foot store located at 936 Broadway. Bellmarc has expanded to a new sales storefront at 48 West 22nd Street. The other offices are strategically located in the West Side, East Side, Midtown and Greenwich Village. The new offices are highlighted by elegant interiors that are templates for planned renovation for the other offices.

will now be applied to both AC Lawrence and Bellmarc. This is an awesome opportunity for both of us.”

In-Depth Training Bellmarc has historically been known for its sales training program, which has been adapted for the AC Lawrence rental agents. The program has been thoroughly redesigned to accommodate the needs of those agents so they can engage in sales training while they are still actively working on rental transactions. According to Binder, who conducts training himself, the program is intensive, including 15 modules, with classes offered three mornings a week. Separate workshops are available as needed.

active in day-to-day affairs. DeGrotta and Larry Friedman, also a co-founder of AC Lawrence and a principal of the new company, are also immersed on a full-time basis. The remaining sales and rental managerial staff have an average tenure of over 15 years. As DeGrotta noted, “It is a real honor to have so many experienced managers who are devoted to their jobs and know what they have to do. We are dedicated to keeping the ratio of managers to agents at low levels so that an agent feels really supported.”

Seasoned Management

A Future of Growth and Commitment to Excellence

The two companies have a well-tested management team. Binder, who started Bellmarc is 1979, remains

Principals Larry Friedman, Neil Binder and Anthony DeGrotta; two of the newly designed sales and rental offices.

Innovative, Custom Technology The combined company has computer systems that are highly customized to meet the special needs of the Manhattan market. AC Lawrence’s database holds a large number of high-quality rental listings and Bellmarc’s system includes an exclusive license for Selection Portfolio, the patent-pending business methodology that permits agents to compare listings to best match a purchaser’s buying formula. In addition, both companies are undertaking major web site upgrades that are going to greatly augment the companies’ positions in this important medium. According to Anthony DeGrotta, a co-founder of AC Lawrence and a principal of the new company, “The web is the essence of our future in this business. We have been working on important changes that

THE

“The key is confidence and technique,” he said. “An agent must truly be able to understand all aspects of the business, from qualifying buyers and board packets to selling and negotiating strategy. When an agent completes the program, there is no doubt in my mind that he or she will be a top-flight professional sales agent.” Binder will continue offering his accelerated program to agents who wish to go directly into sales; however, expanded rental training will also now be provided.

BellmarcGROUP

The Bellmarc Group now exceeds 400 agents and the company is currently planning for an additional three new locations within the near future to accommodate anticipated growth. The company has developed programs that provide superior support to both rental and sales agents, and offers unique compensation schedules. According to Friedman, “We believe our business model is unique. There is no other company that has both defined rental and sales companies under one umbrella. There are many agents who are eager to join us from other firms, either because the rental company they are associated with doesn’t offer effective sales training or because the sales company they belong to treats rentals as an inferior component of the business. “By having real strength in both areas, we offer greater flexibility and earnings power. Bellmarc already has one of the highest commission programs in the industry and we intend to maintain this philosophy. We are prepared to pay commissions that exceed industry standards for experienced agents who display a yearning to be committed to the business and to their clients. Our mission is rather simple: to build an exciting, inventive company that provides dedicated support to its agents and top quality service to our customers and clients.”

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

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

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

NATIONAL MARKET REPORT

Minneapolis

Usher’s Georgia mansion

The Naples home of Jack Connors

ON THE MARKET Meatpacking District’s Milk Building could fetch $300 million Stellar Management founder Laurence Gluck is preparing to sell the Milk Building, a 281,000-square-foot office property bordering the High Line, he said last month while speaking at the Young Jewish Professionals real estate summit at Cooper Union. Gluck, one of the city’s biggest landlords, has enlisted the help of commercial brokers Doug Harmon and Adam Spies of Eastdil Secured to sell the property, which will likely come to market next year. Sources told The Real Deal that the building at 450 West 15th Street could trade for up to $300 million. Gluck purchased the eight-story Meatpacking District property for $161 million in 2008, according to public records.

Tribeca mixed-use loft building on the block A six-story mixed-use property at 13-17 Laight Street is on the market with an asking price of $60 million. Also known as 52-58 Varick Street and 20-2 St. John’s Lane, 13-17 Laight Street the 80,000-square-foot loft building occupies the entire blockfront on Laight Street between Varick Street and St. John’s Lane. 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

84 December 2012 www.TheRealDeal.com

residential, with one rent-stabilized tenant among them. The property is being marketed co-exclusively by Eastern Consolidated’s Roberto Ortiz and DY Realty Services’ Aaron Grumet.

Bushwick converted warehouse building asking $20 million A 19th-century warehouse at 260 Meserole Street in Bushwick that was converted into a beer hall and entertainment venue is on the market with an asking 260 Meserole Street price of $20 million, the New York Observer reported. The five-story red-brick building is occupied by a brewery known as the Well, a performance space called the Wick, music-supply retailer Bushwick Supply and music studio Danbro Studios. The 72,000-square-foot property also has vacant spaces that are expected to be filled by a pizzeria and possibly a hostel or hotel, according to the paper. Halstead Property’s Eric Karmitz, John Goldman and Tito Ghose are marketing the building on behalf of the owner, Danenberg Brothers.

Greenwich Village townhouse on the market A five-story townhouse at 27 East 11th Street is on the market with an asking price of $11.95 million. The 7,050-square-foot property, located between University Place and Fifth Avenue, is currently configured as

Commercial properties recently placed on the market four free-market units but remains vacant. Originally built in 1844, the Greek Revival structure has high ceilings on the parlor and garden floors. The owner has begun restoring the building. Massey Knakal’s James Nelson, Mitchell Levine, Caroline Hannigan, Matthew Nickerson and Matt Bowman are marketing the property.

Astoria medical office building for sale A two-story medical office building at 23-22 30th Avenue in Astoria is for sale with an asking price of $5.8 million. The 9,540-square-foot 23-22 30th Avenue property, built in 1930, underwent a gut renovation in 1999, which included the installation of a full-service radiology unit in the basement. The building is fully occupied with medical tenants Metropolitan Specialty Physicians, a radiology office; Mahmoud and Tsioulias M.D., an oncology office; Dr. Panagitotis Manolas, a surgeon; and internists Gustavo Depetris M.D. and Richard Desmond M.D. The building is located one block from Mount Sinai Medical Center, the hospital the tenants are affiliated with. Rolfe Haas of Besen & Associates is marketing the property. Compiled by Linden Lim

Deal Sheet summary

The Deal Sheet, on pages 86 to 92, covers transactions from 10/11/12 through 11/10/12. Please submit future deals to deals@therealdeal.com.

Sales

Overview

By type

Property sales Deals Dollars

44 $955,350,000

Financing Buildings Aggregate value

Development

Hotel

Industrial

Mixed-Use

Mixed-Use Multi-family

Transactions

By dollar volume (in millions) 0

Multi-family

122.34 68.80 5.69 293.37

Office

78.25

Retail

386.90

$55,380,000

Leases Office

Retail

Total

104

Leases square feet Office

529,436

Retail

338,204

Total

867,640

Office leases Office leases by industry Industry

Office leases sf by industry Leases

Industry

Top tenant reps for office leasing by sf

Square feet leased

Tenant representative

Square feet leased

Advertising & Marketing

Architecture & Design

Communications

Construction

Capstone Realty Advisors

27,742

Fashion*

23,359

Adams & Co.

26,228

Financial

20,220

Cushman & Wakefield

23,021

Fine Arts

7,949

Schuckman Realty

15,000

Government

11,598

Erik Goldschmidt & Associates

12,715

Health & Beauty

26,196

Metropolis Real Estate of Manhattan

11,598

Legal

34,342

Benchmark Properties

11,250

Media

13,449

Lee & Associates

11,196

Other

28,322

M.C. Oâ&#x20AC;&#x2122;Brien

11,100

Cornerstone Real Estate Investments

8,268

Real Estate

16,149 7,866 34,000 9,938

Newmark Grubb Knight Frank

121,276

Jones Lang LaSalle

115,843

CBRE Group

99,493

Real Estate

Science & Technology

166,479

CBC Hunter Realty

6,569

Staffing

41,526

Right Time Realty

5,000

Talent Agency

75,328

BNSK Real Estate Group

3,852

12,715

Retail leases Top tenant reps for leasing by sf

Retail leases by industry

Broker

Arts and Crafts

46,875

Square feet leased

Retail leases sf by industry

SCG Retail

78,000

Discount

18,600

Jack Terzi Real Estate

69,500

Fashion

40,000

Ripco Real Estate

38,564

Food & Beverage

119,859

Kassin Sabbagh Realty

22,400

Health & Beauty

72,450

Norman Bobrow & Co.

19,740

Susan Penzner Real Estate

9,600

Other

40,420

Lavitt Real Estate

9,564

Open Realty

9,000

Bernstein Real Estate

6,500

M.C. Oâ&#x20AC;&#x2122;Brien

5,652

Rice & Associates

5,520

NYCRS

3,110

HSRE

2,500

(*includes showroom space)

Other

www.www.TheRealDeal.com December 2012 85

Deal Sheet

Commercial deals in New York City Deals are listed from largest to smallest in square feet leased or bought. The Deal Sheet covers transactions from 10/11/12 to 11/10/12. Please submit future deals to deals@therealdeal.com.

Office leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

350 Hudson St

100,000

Medidata Solutions / Lisa Kiell, Jones Lang LaSalle

Trinity Real Estate / Represented inhouse

The provider of cloud-based medical data signed a lease for three full floors.

405 Lexington Ave

74,550

CAA / N. Golden, R. Perlman, L. Brodsky, Newmark Grubb Knight Frank

Tishman Speyer / Represented inhouse

The artist agency signed a lease for the entire 18th through 20th floors of the Chrysler Building, the New York Post reported.

350 Fifth Ave (Empire State Building)

40,781

LinkedIn / Sacha Zarba, CBRE

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

The professional networking website signed an expansion lease for the entire 23rd floor, bringing its total occupancy to more than 72,523 square feet. The company originally leased 31,742 square feet on the 25th floor in 2011.

125 Park Ave

38,026

Robert Half International / H. Stein, N. Goldmacher, Newmark Grubb Knight Frank

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

The specialized staffing firm signed an 11-year lease for the entire fourth floor and parts of the third floor, the New York Observer reported.

3 Columbus Circle

34,000

Brand Union / M. Tighe, G. Tosko, CBRE

The Moinian Group; SL Green / B. Waterman, S. Klau, Newmark Grubb Knight Frank

The global brand agency signed an expansion lease, the New York Post reported. The asking rent was $70 per square foot, according to the paper.

885 Third Ave

19,270

Goulston & Storrs / Stuart Eisenkraft, CBRE

IRSA / S. Klau, E. Harris, Newmark Grubb Knight Frank

The law firm signed a lease to relocate to the entire 18th floor from 750 Third Avenue, the New York Observer reported.

350 Fifth Ave (Empire State Building)

15,072

Clifton Budd & DeMaria LLP / W. Fressle, F. Speyer, C&W

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

The law firm signed a lease. The company is moving from 420 Lexington Avenue.

2412 Church Ave (Brooklyn)

15,000

CareMore Medical Enterprises / Schuckman Realty

2412 Church LLC / M.C. O’Brien

The health and wellness company for seniors signed a lease.

One Grand Central Place

12,715

Stark Business Solutions / Erik Goldschmidt & Associates

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

The office suites provider signed an expansion lease.

815 Second Ave

11,598

The Consulate General of Haiti and The Permanent Mission of Haiti To The United Nations / Thomas Ripellino, Metropolis Real Estate of Manhattan

Episcopal Church Center / Jared Freede, CBRE

Haiti’s Consulate General and Permanent Mission to the UN signed a 15-year lease to consolidate its offices on the entire sixth floor.

34 West 33rd St

11,250

Handcraft Manufacturing Corp. / Michael Beyda, Benchmark Properties

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

The maker of children’s apparel and accessories signed a 10-year lease. The reported asking rent was $35 per square foot.

660 Madison Ave

10,443

LionTree LLC / A. Chudnoff, D. Turkewitz, Jones Lang LaSalle

n/a / P. Amrich, N. King, S. Zarba, CBRE; P. Dweck, JSRE

The advisory and investment firm signed a 10-year, 10-month lease on part of the 15th floor.

49 West 27th St

8,700

Codecademy / Bernard Weitzman, Newmark Grubb Knight Frank

Jonathan Wiener / Mark Furst, Cassidy Turley

The coding instructional website signed a new lease.

192 Lexington Ave

8,268

RC Dolner / Edmond Levy, Cornerstone Real Estate Investments

Cres Inc. / Bruce Weinberg, Cassidy Turley

The construction firm signed a lease for the entire third floor.

242 West 30th St

8,000

Broadstreet Productions / M. Jaffee, J. McLaughlin, Capstone Realty Advisors

n/a / David Berger, Bernstein Real Estate

The media company signed a lease for the entire second floor.

250 West 57th St

7,949

Distinguished Concerts International / n/a

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

The musical talent incubator signed an expansion lease.

48 West 37th St

6,777

Murphy Burnham & Buttrick LLP / David Levy, Adams & Co.

Forty Eight Thirty Seven Associates / David Levy, Adams & Co.

The architecture firm signed a 10-year lease renewal. The reported asking rent was $37 per square foot.

350 Fifth Ave (Empire State Building)

6,569

OpTier / M. Okun, P. Sabesan, M. Piccirillo, CBC Hunter Realty

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

The analytics firm signed a lease.

244 East 84th St

5,598

Bio Fitness Center / Gabe Isaacs, Lee & Associates

84th & 2nd Ave Corp. / Gabe Isaacs, Lee & Associates

The fitness studio signed a 10-year lease renewal.

244 East 84th St

5,598

Eastside Sports Physical Therapy / Gabe Isaacs, Lee & Associates

84th & 2nd Ave Corp. / Gabe Isaacs, Lee & Associates

The physical therapy office signed a five-year lease renewal.

501 Seventh Ave

5,449

nuvoTV / Jamie Katcher, C&W

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

The media company signed a lease.

350 Fifth Ave (Empire State Building)

5,442

Recommind Inc. / Lauren Smith, CBRE

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

The eDiscovery company signed a lease.

32 Court St (Brooklyn)

5,400

AXA Equitable Life Insurance Company / M.C. O’Brien; Jones Lang LaSalle

Eighteen Associates LLC / Chris Havens, Creative Real Estate Group

The global insurance company signed a lease.

260 West 39th St

5,000

RGM Group / Jarad Winter, Capstone Realty Advisors

Two Friends Realty / Joe McLaughlin, Capstone Realty Advisors

The media and digital advertising firm signed a lease for part of the fourth floor.

47-09 5th St (Queens)

5,000

Counter Intelligence / J. Ibrahim, R. Tinio, Right Time Realty

n/a / J. Ibrahim, R. Tinio, Right Time Realty

The supplier of granite countertops signed a four-year sublease.

110 West 40th St

4,856

Woods, Witt, Dealy & Sons / D. Levy, B. Maslin, Adams & Co.

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

The advertising agency signed a lease renewal and expansion. The reported asking rent was $41 per square foot.

149-18 Jamaica Ave (Queens)

4,500

QUEST / M.C. O’Brien

Jamaica Plaza LLC / M.C. O’Brien

The tenant signed a lease.

463 Seventh Ave

3,852

Key Apparel / BNSK Real Estate Group; Sinovsky Real Estate

The Arsenal Company / David Levy, Adams & Co.

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

630 Ninth Ave

3,506

Roaring Fork Films / Brian Wilson, Capstone Realty Advisors

n/a / Matthew Mandell, Newmark Grubb Knight Frank

The film production company signed a lease for part of the 11th floor.

100 Pennsylvania Ave (Brooklyn)

3,500

Center for Community Alternatives / Premier Properties

2634-2640 Atlantic Avenue Realty Corp. / M.C. O’Brien

The nonprofit signed a lease.

370 Lexington Ave

3,500

The Phoenix Group Advisors Inc. / n/a

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

The staffing agency signed an expansion lease on the second floor.

350 Fifth Ave (Empire State Building)

3,160

Digital Capital Advisors / Elie Censor, Norman Bobrow & Co.

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

The financial company signed a lease.

86 December 2012 www.TheRealDeal.com

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Office leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

311 West 43rd St

2,500

Verse Marketing / Andrew Weinstein, C&W

Cooper, Robertson & Partners / G. Isaacs, F. Discolo, Lee & Associates

The online marketing company signed a sublease on the 14th floor.

12 East 44th St

2,500

Julie Lindsay LLC / Chelsea Merrifield, Capstone Realty Advisors

n/a / D. Someck, M. Kunikoff, Lee & Associates

The tenant signed a lease for the entire fifth floor.

237 West 35th St

2,449

Star Healthcare / R. Thomas Murtha, Capstone Realty Advisors

n/a / Michael Kaufman, Kaufman Organization

The healthcare marketing firm signed a lease for part of the sixth floor.

10 West 33rd St

2,234

The Adoni Group / David Levy, Adams & Co.

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

The tenant signed a new five-year lease. The reported asking rent was $37 per square foot.

333 West 39th St

2,100

Optitex / Chelsea Merrifield, Capstone Realty Advisors

n/a / Neil Joffee, Newmark Grubb Knight Frank

The software solutions provider signed a lease for part of the third floor.

231 West 39th St

1,783

Made 2 Fade Technology / Capstone Realty Advisors

231/249 West 39 Street Associates / James Buslik, Jeff Buslik, Adams & Co.

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

231 West 39th St

1,598

Olga Fontanillas / n/a

231/249 West 39 Street Associates / James Buslik, Jeff Buslik, Adams & Co.

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

110 West 40th St

1,493

Krisjesshel Inc. / Michael Hymowitz, Adams & Co.

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

The tenant signed a new lease. The reported asking rent was $40 per square foot.

110 West 40th St

1,488

New Leaf Literary & Media Inc. / D. Levy, B. Maslin, Adams & Co.

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

The literary agency signed a new lease. The reported asking rent was $39 per square foot.

231 West 39th St

1,444

The Dolan Group / James Buslik, Jeff Buslik, Adams & Co.

231/249 West 39 Street Associates / James Buslik, Jeff Buslik, Adams & Co.

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

10 West 33rd St

1,366

Every Toe Covered Inc.; RWS Legwear Group Inc. / Stacey-Robins Realty Corporation

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

The accessories companies signed a new five-year lease. The reported asking rent was $40 per square foot.

110 West 40th St

1,344

Athlon Sports Communications / D. Levy, B. Maslin, Adams & Co.

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

The sports publishing and marketing company signed a lease renewal. The reported asking rent was $40 per square foot.

259 West 30th St

1,250

Smarter Sign / Chelsea Merrifield, Capstone Realty Advisors

n/a / Joe McLaughlin, Capstone Realty Advisors

The digital signage software company signed a lease for part of the fifth floor.

352 Seventh Ave

1,217

Greenberg & Brennan, CPA / M. Kabiri, W. Stein, Manhattan Commercial Realty

n/a / Nathan Wasserman, AM Property Holding Corp.

The accounting firm signed a seven-year lease with a five-year renewal option on the second floor.

110 West 40th St

1,210

Agencia International Inc. / Red Real Estate

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

The consulting firm signed a new lease. The reported asking rent was $40 per square foot.

2275 Coleman St (Brooklyn)

1,200

Maracap Construction Industries / M.C. O’Brien

Kings Plaza Associates LLC / M.C. O’Brien

The construction firm signed a lease.

231 West 39th St

1,196

Cyn & Luca / James Buslik, Jeff Buslik, Adams & Co.

231/249 West 39 Street Associates / James Buslik, Jeff Buslik, Adams & Co.

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

110 West 40th St

1,185

MM Management LLC / Metropolitan Property Group

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

The tenant signed a new lease. The reported asking rent was $39 per square foot.

345 Seventh Ave

1,154

RankAbove / Jarad Winter, Capstone Realty Advisors

n/a / Peter Liptrot, Bernstein Real Estate

The tech firm signed a lease for part of the fifth floor.

110 West 40th St

1,089

W Design Studio Ltd. / D. Levy, B. Maslin, Adams & Co.

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

The design studio signed a lease renewal. The reported asking rent was $46 per square foot.

110 West 40th St

910

Logistics Inc. / D. Levy, B. Maslin, Adams & Co.

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

The tenant signed a new lease. The reported asking rent was $40 per square foot.

110 West 40th St

796

Shilav USA / B. Maslin, B. Harvey, Adams & Co.

One Ten West Fortieth Associates / David Levy, Adams & Co.

The tenant signed a new lease. The reported asking rent was $39 per square foot.

110 West 40th St

778

Fifi Oscard Agency Inc. / D. Levy, B. Maslin, Adams & Co.

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

The talent and literary agency signed a three-year lease renewal. The reported asking rent was $48 per square foot.

110 West 40th St

483

Vandis Inc. / D. Levy, B. Maslin, Adams & Co.

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

The Internet solutions provider signed a new lease. The reported asking rent was $40 per square foot.

110 West 40th St

470

Crafted Kitchen Inc. / D. Levy, B. Maslin, Adams & Co.

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

The home improvement contractors signed a five-year lease renewal. The reported asking rent was $48 per square foot.

10 West 33rd St

447

Kristino Handbags & Associates / David Levy, Adams & Co.

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

The handbag company signed a new three-year lease. The reported asking rent was $42 per square foot.

110 West 40th St

423

Eighteen Liana Trading Inc. / D. Levy, B. Maslin, Adams & Co.

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

The uniform wholesaler signed a new lease. The reported asking rent was $40 per square foot.

Retail leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

61-21 190th St (Queens)

45,000

Michael’s Arts and Crafts / n/a

Federal Realty Trust / Jeremy Isaacs, Ripco Real Estate

The arts and crafts retailer signed a lease at the Fresh Meadows Shopping Center.

100 West 125th St

39,000

Whole Foods Market / J. Klinger, C. Welles, SCG Retail

Wharton Properties / Represented in-house

The grocer signed a lease for another location, the New York Post reported.

1551 Third Ave

39,000

Whole Foods Market / C. Welles, J. Klinger, SCG Retail

Milstein Properties / Gary Alterman, RKF

The grocer signed a lease for another location.

815 Hutchinson River Pkwy (The Bronx)

29,000

T.J. Maxx / Miles Mahony, Ripco Real Estate

Simone Development / Miles Mahony, Ripco Real Estate

The clothing retailer signed a 25-year lease at the Throggs Neck Shopping Center.

407 West 14th St

19,740

Manon / D. Tordjman, N. Bobrow, Norman Bobrow & Co.

Estate of William Gottlieb / S. Rhulen, G. Tannor, CBRE

The restaurant signed a lease for a four-story space.

1623 Flatbush Ave (Brooklyn)

17,000

Retro Fitness / Jack Terzi, Jack Terzi Real Estate

n/a / n/a

The fitness chain signed a lease for another location, the New York Post reported.

325 Avenue Y (Brooklyn)

15,000

Retro Fitness / Jack Terzi, Jack Terzi Real Estate

n/a / n/a

The fitness chain signed a lease for another location, the New York Post reported.

252 Atlantic Ave (Brooklyn)

15,000

Retro Fitness / Jack Terzi, Jack Terzi Real Estate

n/a / n/a

The fitness chain signed a lease for another location, the New York Post reported.

166-07 Jamaica Ave (Queens)

13,600

Charlie’s / Morris Sabbagh, Kassin Sabbagh Realty

RAL Realty Corp. / Marc Durst, Sholom & Zuckerbrot Realty

The discount variety store signed a lease.

88 December 2012 www.TheRealDeal.com

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Retail leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

81 East 98th St (Brooklyn)

11,500

Retro Fitness / Jack Terzi, Jack Terzi Real Estate

n/a / n/a

The fitness chain signed a lease for another location, the New York Post reported.

23-85 Richmond Ave (Staten Island)

11,000

Retro Fitness / Jack Terzi, Jack Terzi Real Estate

n/a / n/a

The fitness chain signed a lease for another location, the New York Post reported.

Broadway and 238th St (The Bronx)

9,564

Buffalo Wild Wings Grill & Bar / J. Howard, Ripco Real Estate; H. Lavitt, Lavitt Real Estate

Metropolitan Realty Associates / T. Cooper, M. Mahony, Ripco Real Estate

The restaurant chain signed a lease for the entire second floor of a two-story, freestanding building that is being developed at the new Riverdale Crossing shopping center.

155 Fifth Ave

9,000

C. Wonder / Mark Masinter, Open Realty

n/a / J. Podell, B. Singer, C&W

The apparel and home décor retailer signed a lease, the New York Post reported. The space consists of 4,500 square feet on the ground level and 4,500 square feet on the lower level.

100 Park Ave

6,500

New York Golf Center / Peter Liptrot, Bernstein Real Estate

SL Green / J. Roseman, B. Birnbaum, Newmark Grubb Knight Frank; L. Swiger, SL Green

The golf store signed a long-term lease.

1766 Westchester Ave

6,000

Urban Health Plan / n/a

n/a / Kathy Zamechansky, KZA Realty Group

The community health center signed a 10-year retail lease with a five-year option.

32 Greene St

5,520

CITE / Doug Rice, Rice & Associates

Sorgente Group of America / Represented in-house

The tenant signed a lease.

165 East Burnside Ave (The Bronx)

5,000

JV 99 Cent Discount / M. Sabbagh, A. Manopla, Kassin Sabbagh Realty

Marchaz Realty Corp. / M. Sabbagh, A. Manopla, Kassin Sabbagh Realty

The discount variety store signed a lease.

909 Madison Ave

4,800

Dominique Levy Gallery / Susan Penzner Real Estate

Friedland Properties / Represented in-house

The gallery signed a 10-year, triple-net lease on the second, third and fourth floors.

909 Madison Ave

4,800

Emannuel Perrotin / Susan Penzner Real Estate

Friedland Properties / Represented in-house

The gallery signed a lease on the ground floor and lower level.

1407 Broadway

3,381

Spirit Halloween / n/a

The Lightstone Group / M. Gorman, J. Gettler, New Street Realty

The Halloween costume and accessories retailer signed a lease for a pop-up store.

148 West 125th St

2,500

McDonald’s / Harold Sherr, HSRE

The Jackson Group LLC / Jonathan Nachmani, The Jackson Group LLC

The fast-foot chain signed a long-term lease for another location. The reported asking rent was $150 per square foot.

1165 B Elton St (Brooklyn)

2,452

Gregory Khononov / M.C. O’Brien

Elton Owners I LLC / M.C. O’Brien

The Burger Ur Way franchise signed a lease for its sixth Brooklyn location.

3250 Westchester Ave (The Bronx)

2,166

Dr. Jennifer Lafontant / n/a

n/a / Kathy Zamechansky, KZA Realty Group

The medical office signed a 10-year retail lease with a five-year option.

1053 Flushing Ave (Brooklyn)

1,875

Bushwick Art and Shipping / n/a

n/a / Andrew Clemens, Massey Knakal

The art supply store signed a lease.

135 West 20th St

1,750

Barry’s Bootcamp / n/a

A&G Real Estate LLC / Doug Rice, Rice & Associates

The fitness studio signed a lease.

2328 Broadway

1,500

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

Mount Pleasant Management Corp. / n/a

The tenant signed a seven-year lease.

450 West 42nd St

1,400

Kava Café / n/a

Related Companies / n/a

The espresso bar signed a long-term lease for its second New York outpost. It will be located in MiMA, the luxury residential and mixed-use tower.

1407 Broadway

1,378

Pie Face / Robert Bonicoro, CBRE

The Lightstone Group / M. Gorman, J. Gettler, New Street Realty

The bakery and café signed a long-term lease for another location.

252 Seventh Ave (Brooklyn)

1,250

Just Salad / New Street Realty

n/a / Elaine Gay, Townsley & Gay

The salad eatery signed a lease for another location.

4202 Fifth Ave (Brooklyn)

1,200

Little Caesar’s Pizza / Isaac Arzt, Kassin Sabbagh Realty

4202 Save Holding Corp. / Isaac Arzt, Kassin Sabbagh Realty

The pizza chain signed a lease.

400 Bedford Ave (Brooklyn)

1,200

Edward Jones / M.C. O’Brien

Park Avenue Management / n/a

The financial services firm signed a retail lease.

2890 Nostrand Ave (Brooklyn)

1,200

RJB Marketing / M.C. O’Brien

Americo Pulini / M.C. O’Brien

The consumer electronics retailer signed a lease.

311 West Broadway

1,110

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

UAL / n/a

The tenant signed a 10-year lease.

977 Allerton Ave (The Bronx)

1,100

T.U. Liquors / n/a

n/a / Kathy Zamechansky, KZA Realty Group

The liquor store signed a five-year lease.

1318 Madison Ave

943

Second Time Around / n/a

n/a / Jill Lovatt, Massey Knakal

The resale boutique signed a lease.

410 Columbus Ave

900

Alexis Bittar / n/a

n/a / n/a

The fashion jeweler signed a lease, the New York Post reported.

3 East 33rd St

800

The Perfect Look / M. Sabbagh, A. Tawil, Kassin Sabbagh Realty

Bill Xie / M. Sabbagh, A. Tawil, Kassin Sabbagh Realty

The beauty salon signed a lease.

2021 Flatbush Ave (Brooklyn)

800

Leon Levy / M.C. O’Brien

Balaji Holdings LLC / M.C. O’Brien

The gold-buying store signed a lease for its third location.

321 Bleecker St

600

Jeremy Argyle / Caleb Petersen, RKF

Manoucher Hedvat / Bertrand de Soultrait, SCG Retail

The apparel retailer signed a sublease for its second location.

371 Third Ave

600

Subway / Morris Sabbagh, Kassin Sabbagh Realty

201 East 25 LLC / David Abrams, RKF

The sandwich chain signed a lease.

1507 Flatbush Ave

500

Verizon / Abraham Kassin, Kassin Sabbagh Realty

1585 Flatbush Ave Associates / n/a

The telecommunications company signed a retail lease.

215 West 83rd St

500

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

n/a / Mark Tergesen, ABS Partners

The clothing store signed a lease.

1524 Kings Hwy (Brooklyn)

400

Perfect Brows / Albert Manopla, Kassin Sabbagh Realty

Maverick Management / Albert Manopla, Kassin Sabbagh Realty

The beauty salon signed a lease.

434 Sixth Ave

375

Elixir Juice Bar / n/a

Harran Holding Corp. / Charles Rapuano, Winick Realty

The juice bar signed a lease.

39 John St

300

Prince Bubble Tea / Albert Manopla, Kassin Sabbagh Realty

Galb Realty Associates / Charles Gengler, David M. Baldwin Realty

The café signed a lease.

Buys Address

Size

Buyer / Representative

Seller / Representative

Notes

2 East 55th St

24,800 sf retail condo

Richemont North America / n/a

Crown Acquisitions; Goldman Properties; The Feil Organization / n/a

The retail condo inside the St. Regis New York hotel sold for $380 million, or $15,100 per square foot, Real Estate Alert reported. Richemont owns luxury brands Cartier, Van Cleef & Arpels, Piaget and Montblanc, among others.

90 December 2012 www.TheRealDeal.com

www

Buys continued Address

Size

Buyer/ Representative

Seller / Representative

Notes

103 East 86th St

48-unit apt. bldg

Stonehenge / n/a

n/a / Aaron Jungreis, Rosewood Realty

The property sold for $76 million, or about $850 per square foot.

229 West 36th St

149,000 sf office bldg

American Realty Capital New York Recovery REIT / n/a

n/a / n/a

The fee-simple interest in the property sold for $65 million.

421 Kent Ave (Brooklyn)

92,000 sf development site

Xinyuan Real Estate / n/a

Richard Kalikow / n/a

The parcel sold for $54.2 million. The site will accommodate about 506,000 gross square feet of buildable residential development.

325 West Broadway

61,416 sf development site

DDG / n/a

Lehman Brothers Holdings subsidiary / A. Scandalios, J. Cruz, J. Julien, K. O’Hearn, HFF

The development site sold for $38.35 million. The current plan for the development, to be located at 325-329 West Broadway and 23-25 Wooster Street, calls for a two-building, 24-unit condo with ground-floor retail.

551 West 21st St

4-story industrial bldg

SR Capital / n/a

n/a / n/a

The property sold for $34 million, the New York Post reported.

530-540 East 169th St and 480 East 188th St (The Bronx)

2 apt. bldgs.

n/a / n/a

n/a / R. Knakal, D. Simone, Massey Knakal

The defaulted $36.5 million loan on the Robert Fulton Terrace and Fordham Towers sold for $31 million. The two properties were appraised at $47.3 million in 2007, but documents available on the website of the loan’s special servicer LNR Partners, show the appraised value was reduced by $17.8 million on Aug. 7 of this year — yielding a new appraised value of $29.5 million.

385 Gerard Ave (The Bronx)

12-story, 410,000 sf industrial bldg

n/a / n/a

n/a / B. Knakal, D. Simone, Massey Knakal

The property sold for $28.5 million.

Brooklyn portfolio

4 apt. bldgs., 381 units total

David Spira; Robert Wolf / n/a

Brookdale University Hospital and Medical Center / GA Keen Realty Advisors

The package of residential buildings sold for $22 million. The properties are located at 7 Hegeman Avenue, 660 East 98th Street, 505 Rockaway Parkway and 525 Rockaway Parkway.

87 Chambers St

Development site

CB Developers / n/a

Fishman Holdings North America / n/a

The property sold for $22 million. The site will be redeveloped as condos, according to the seller.

Bronx portfolio

6 apt. bldgs., 317 units total

n/a / n/a

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

The package of residential properties sold for $20.75 million. The price represents a capitalization rate of 6.4 percent and a gross rent multiple of 7.1. The buildings are located at 1685 Selwyn Avenue, 1254 Sherman Avenue, 1231 Fulton Avenue, 615 East 168th Street, 1340 Merriam Avenue and 818 East 149th Street.

8831 Fort Hamilton Pkwy (Brooklyn)

6-story apt. bldg, 122 units total

Private family / Jake Blatter, Rosewood Realty

Mallouk Realty / A. Jungreis, M. Guttman, Rosewood Realty

The property sold for $19.8 million.

156 Prince St

6-story, 15,000 sf apt. bldg, 24 units total

First Atlantic Real Estate / n/a

Real Estate Equities Corporation / n/a

The residential building sold for $19.15 million. The seller acquired the property last year for $7.8 million.

1623 Kings Highway (Brooklyn)

4-story, 19,960 sf office bldg

n/a / n/a

n/a / Brian Hanson, Massey Knakal

The property sold for $13.25 million, or about $664 per square foot. Verizon Wireless occupies the ground-floor retail space, a karate studio occupies the second floor, and Interborough Developmental and Consultation Center occupies the third and fourth floors as well as part of the basement.

113-115-117 Elizabeth St

3 apt. bldgs., 30 units total

Kalbridge Associates / Edmond Levy, Cornerstone Real Estate

113-117 Realty LLC / Edmond Levy, Cornerstone Real Estate

The properties sold for $12.63 million, or $454 per square foot. The price represents a capitalization rate of 6 percent.

7-11 Brightwater Ct (Brooklyn)

6-story apt. bldg, 55 units total

Pasem Realty LLC / Jake Blatter, Rosewood Realty

Mallouk Realty / A. Jungreis, J. Blatter, Rosewood Realty

The elevator building sold for $9.6 million.

102-10 Queens Blvd (Queens)

35-unit apt. bldg

n/a / Barry Farchi, Azad Property Group

Rossmoregate USA / Entrepreneur Properties

The condo sold for $8.2 million. The price represents a gross rent multiple of 12.8.

111 West 17th St

6-story, 9,140 sf apt. bldg

n/a / n/a

n/a / J. Ciraulo, C. Waggner, B. Emmetsberger, Massey Knakal

The property sold for $7.25 million, or $793 per square foot. The price represents a capitalization rate of 5.1 percent. The property has an additional 1,918 square feet of unused air rights.

354 Cathedral Pkwy

6-story, 20,412 sf apt. bldg, 30 units total

Lighthouse Cathedral LLC / Aaron Jungreis, Rosewood Realty

354 Cathedral Partners LLC / Aaron Jungreis, Rosewood Realty

The walk-up building sold for $7.1 million.

414 East 73rd St

6-story apt. bldg, 21 units total

n/a / Rolfe Haas, Besen & Associates

n/a / A. Doshi, L. Blumberg, Besen & Associates

The elevator building sold for $7 million, or about $500 per square foot. The price represents a capitalization rate of 4 percent.

3058 Hull Ave and 353 and 359 Mosholu Pkwy (The Bronx)

68-unit apt. bldg

n/a / Marco Lala, Marcus & Millichap

Private investor / Marco Lala, Marcus & Millichap

The property sold for $6.89 million. The price represents a capitalization rate of 5.8 percent and a gross rent multiple of 8.49.

252 Newport St and 507 Osborn St (Brooklyn)

2 industrial bldgs, 138,000 sf total

Tuck It Away Newport I LLC/Tuck It Away 2 LLC/Tuck It Away Osborn LLC / N. Dolgin, G. Dolgin, N. Fertile, Kalmon Dolgin Affiliates

Imperial Paper Box Corporation / N. Dolgin, G. Dolgin, N. Fertile, Kalmon Dolgin Affiliates

The industrial properties sold for $6.3 million.

3472 Knox Pl (The Bronx)

6-story, 54,000 sf apt. bldg, 62 units total

Raphael Properties LLC / Samuel Kooris, Rosewood Realty

3472 Knox Place / Aaron Jungreis, Rosewood Realty

The walk-up sold for $5.7 million.

311 West 29th St

19-unit apt. bldg

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

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

The property sold for $4.25 million. The price represents a capitalization rate of 5.3 percent.

611 Academy St

5-story, 35,000 sf apt. bldg, 48 units total

n/a / Aaron Jungreis, Rosewood Realty

611 Academy LLC / Aaron Jungreis, Rosewood Realty

The walk-up sold for $4.05 million.

208 Fifth Ave

3,700 sf retail co-op

Local investor / Iris Rossano, Besen & Associates

n/a / Hilly Soleiman, Besen Retail

The three-unit retail co-op sold for $3.9 million, or $1,054 per square foot.

1409-1415 St. Johns Pl (Brooklyn)

Two 4-story apt. bldgs., 40 units total

Local investor / Yosef Katz, GFI Realty

Local investors / Shulem Paneth, GFI Realty

The contiguous walk-up buildings sold for $3.65 million. The price represents a gross rent multiple of 7.5.

368 Eighth Ave

23-room SRO bldg

n/a / Jim Mann, Friedman-Roth Realty

n/a / n/a

The property sold for $3.04 million, or about $500 per square foot. The price represents a capitalization rate of 5 percent.

2630 Frederick Douglass Blvd

39,968 buildable sf development site

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

The property sold for $3.03 million. The lot has 39,968 buildable square feet as of right or 64,498 buildable square feet with a community facility bonus.

152 Sherman St

5-story, 23,700 sf apt. bldg, 42 units total

Black Spruce Partners V LLC / Aaron Jungreis, Rosewood Realty

152 Sherman LLC / Aaron Jungreis, Rosewood Realty

The walk-up sold for $3 million.

194 Orchard St

1-story retail bldg

n/a / Hilly Soleiman, Besen & Associates

n/a / Bobby Khurana, Besen & Associates

The property sold for $3 million, or $325 per buildable square foot. The property, which is being delivered vacant, has 9,220 buildable square feet.

505 West 161st St

21,732 sf apt. bldg, 30 units total

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

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

The walk-up building sold for $2.9 million.

304 West 151st St

6-story, 16,158 sf apt. bldg, 25 units total

n/a / Morris Arlos, Besen & Associates

n/a / Greg Corbin, Besen & Associates

The walk-up sold for $2.75 million, or $170 per square foot. The price represents a capitalization rate of 6.8 percent and a gross rent multiple of 7.6.

www.TheRealDeal.com December 2012 91

Buys continued Address

Size

Buyer/ Representative

Seller / Representative

Notes

61 Village Rd North (Brooklyn)

7-story apt. bldg, 11 units total

61 VM Realty / Aaron Jungreis, Rosewood Realty

Zeborex Partners / Aaron Jungreis, Rosewood Realty

The property sold for $2.7 million.

1035-1049 Morris Park Ave (The Bronx)

10,000 sf mixed-use bldg

n/a / Giuseppe Inglese, FriedmanRoth Realty

n/a / Giuseppe Inglese, Friedman-Roth Realty

The property sold for $2.65 million.

645-651 Union St (Brooklyn)

Development site

n/a / n/a

n/a / Kenneth Freeman, Massey Knakal

The package of four lots sold for $2.5 million, or $132 per buildable square foot. The properties contain approximately 19,000 buildable square feet.

606 West 191st St

5-story, 17,365 sf apt. bldg, 21 units total

606 West 191st St LLC / Michael Guttman, Rosewood Realty

Pinstripe Group LLC / Aaron Jungreis, Rosewood Realty

The walk-up sold for $2.45 million. The price represents a gross rent multiple of 8.

40 Cumberland St (Brooklyn)

4-story, 8,268 sf apt. bldg, 12 units total

n/a / n/a

n/a / S. Palmese, M. Amirkhanian, Massey Knakal

The property sold for $2.2 million, or about $266 per square foot. The building contains nine two-bedrooms and three one-bedrooms, including a unit on the ground floor that has rear-yard access.

85 Fairview Ave

4-story, 15,141 sf apt. bldg, 24 units total

n/a / Amit Doshi, Besen & Associates

The property sold for $2 million, or $132 per square foot. The price represents a capitalization rate of 7.1 percent and a gross rent multiple of 7.2.

108 West 116th St

5-story, 9,240 sf apt. bldg, 7 units total

108 West 116th Residences LLC / Michael Guttman, Rosewood Realty

108 Realty LLC / M. Kerwin, S. Kooris, Rosewood Realty

The walk-up sold for $2 million. The price represents a gross rent multiple of 9.

411 Myrtle Ave (Brooklyn)

4-story, 4,620 sf apt. bldg, 3 units total

n/a / n/a

n/a / S. Palmese, G. Garvin, Massey Knakal

The property sold for $1.45 million, or about $308 per square foot. The property has an additional 1,038 square feet of air rights.

403 Macon St (Brooklyn)

4-story, 14,240 sf apt. bldg, 16 units total

Local investor / Shlomo Antebi, GFI Realty

Local investor / Yisroel Pershin, GFI Realty

The property sold for $1.4 million. The price represents a gross rent multiple of 8.

155 Berry St (Brooklyn)

4,000 buildable sf development site

n/a / n/a

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

The property sold for $1.16 million, or about $289 per buildable square foot.

15-19 West 119th St

10,815 buildable sf development site

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

Private developer / V. Sozio, M. Tortorici, S. Shkury, Ariel Property Advisors

The vacant lot sold for $1.1 million.

Financing Address

Size

Borrower / Representative

Lender / Representative

Notes

201 East 66th St

256-unit apt. bldg

20166 Tenants Corp. / n/a

NCB / n/a

A $7.6 million first mortgage and a $2 million line of credit were arranged for the building.

387 Franklin Ave (Brooklyn)

28-unit apt. bldg

n/a / n/a

Arbor Commercial / n/a

A $7.4 million loan was provided to refinance the property. The 10-year mortgage amortizes over a 30-year schedule.

210 East 15th St

188-unit apt. bldg

210 East 15th Street Tenants Corp. / n/a

NCB / n/a

A $5 million first mortgage and a $1 million line of credit were arranged for the building.

9437 Shore Rd (Brooklyn)

108-unit apt. bldg

Shore Ridge Apartment Corp. / n/a

NCB / n/a

A $5.5 million first mortgage and a $500,000 line of credit were arranged for the building.

69 West 9th St

120-unit apt. bldg

69 West 9 Owners Inc. / n/a

NCB / n/a

A $4 million first mortgage and a $1 million line of credit were arranged for the building.

221 East 78th St

53-unit apt. bldg

221 East 78th Tenants Corporation / n/a

NCB / n/a

A $3.2 million first mortgage and a $250,000 line of credit were arranged for the building.

35 West 81st St

60-unit apt. bldg

81st Dwellers Inc. / n/a

NCB / n/a

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

355 Stockton St (Brooklyn)

12-unit apt. bldg

n/a / n/a

Arbor Commercial / n/a

A $2.62 million loan was provided to refinance the property. The 10-year mortgage amortizes on a 30-year schedule.

55 Knolls Crescent (The Bronx)

251-unit apt. bldg

The Knolls Cooperative Section #2 Inc. / n/a

NCB / n/a

A $1.5 million first mortgage and a $1 million line of credit were arranged for the building.

131-11 Kew Gardens Rd (Queens)

83-unit apt. bldg

Kew Manor Owners Corporation / n/a

NCB / n/a

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

185 Houston St

61-unit apt. bldg

Western Houston Equities Inc. / n/a

NCB / n/a

A $1.9 million first mortgage and a $500,000 line of credit were arranged for the building.

110 Martense St (Brooklyn)

28-unit apt. bldg

n/a / n/a

Arbor Commercial / n/a

A $1.8 million loan was provided to refinance the property. The 10-year mortgage amortizes on a 30-year schedule.

495 Claremont Pkwy (The Bronx)

18-unit apt. bldg

n/a / n/a

Arbor Commercial / n/a

A $1.51 million loan was provided to refinance the property. The 10-year mortgage amortizes on a 30-year schedule.

179 Putnam Ave (Brooklyn)

6-unit apt. bldg

n/a / n/a

Arbor Commercial / n/a

A $1.4 million loan was provided to refinance the property. The 10-year mortgage amortizes on a 30-year schedule.

Other Deals Ivanhoe Cambridge nabs Blackstone’s interest in 1411 Broadway for over $360 million

Spanish bank Santander sells Midtown office building for $120 million

Joe Sitt nabs Ron Burkle’s Meatpacking District building for $100 million

Ivanhoe Cambridge, a Montreal-based property management and development company, last month announced its acquisition of a 49.9 percent ownership interest in 1411 Broadway for over $360 million, according to the firm. Ivanhoe now has a managing interest in the 40-story Class A property, which it owns in a joint venture with the Swig Company. Both parties will shell out a “significant investment” toward building upgrades, including physical improvement and energy efficiency, the statement said. (The deal was announced after the deadline for the Deal Sheet.)

A Midtown office building owned by the Spanish banking giant Santander traded hands for $120 million, according to public records filed with the city last month. Santander began shopping the 113,000-square-foot building at 45 East 53rd Street to potential buyers in March, it was previously reported. Despite its institutional status, it was said to be marketing the building in-house as opposed to bringing on a brokerage firm. The 20-story property, built in 1991, was constructed specifically to house the European bank’s New York operations. (The deal was announced after the deadline for the Deal Sheet.)

Grocery and private equity tycoon Ron Burkle has flipped his Meatpacking District property — he owns a majority interest in the building, which houses such retailers as Scoop boutique — for close to $100 million to Joe Sitt of Thor Equities, the New York Post reported. Eastdil Secured’s Douglas Harmon, Adam Spies and Kevin Donner brokered the deal for the brick loft building at 430 West 14th Street, the Post said. Burkle bought it for $65 million last year, as previously reported. Sitt will likely buy out the leases of the retailers currently in the building, the Post said. (The deal was announced after the deadline for the Deal Sheet.) TRD

92 December 2012 www.TheRealDeal.com The

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DEVELOPMENT UPDATES CONSTRUCTION UPDATE

East Village

Jupiter 21 21 East 1st Street

GROW. WISELY. EisnerAmper’s Real Estate Services Group provides a wide array of audit, tax and advisory services to the real estate community, including REITs and real estate opportunity funds. Our goal is to help our clients structure sound transactions and examine each aspect of operations to help maximize potential returns and build future success. And as a leading service provider for financial service companies as well as family offices, EisnerAmper is uniquely positioned to create synergies that help our real estate clients grow their businesses. TM

Let’s get down to business.

. J.D., LLM Kenneth Weissenberg, CPA, Partner 212.891.4070 kenneth.weissenberg@eisneramper.com

Independent Member of PKF International

Aaron Kaiser, CPA Partner 212.891.8084 aaron.kaiser@eisneramper.com

NEW YORK | NEW JERSEY | PENNSYLVANIA | CALIFORNIA | CAYMAN ISLANDS

www.eisneramper.com

EisnerAmper LLP Accountants & Advisors

Director of Leasing Established (1925) Owner/Developer Assets on East Coast Midtown location Salary-Benefits-Bonus potential

SEEKING:

Individual with minimum of 5 years of experience in retail leasing of Urban and Shopping Center Properties. Heavy experience with Urban Leasing and National Tenants a plus! Must be honest, intelligent, organized and ready to hit the ground running.

REPLY:

Please reply with resume and list of leases consummated over the past 24 months. All replies will be treated as confidential

applicant729@gmail.com 94 December 2012 www.TheRealDeal.com

BFC Partners’ 65-unit residential development has topped off. The project, designed by GF55 Partners, will feature 13 residential condo units, 52 market-rate rental units and two commercial condos. Amenities include a 24-hour doorman, private storage and a bicycle room. Construction will be completed in the spring of 2013. The Corcoran Group is the agent. Contact: www.corcoran.com.

Turtle Bay 50 United Nations Plaza Zeckendorf Development and Global Holdings have started construction on an 87-unit residential condominium designed by Foster + Partners. Residences will include 1,100-square-foot one-bedroom apartments, 50 UN Plaza two-bedrooms ranging from 1,600 to 2,600 square feet, three-bedrooms starting at 3,000 square feet and 6,000-square-foot full-floor units. The project also offers a 10,000-square-foot duplex penthouse. The tower will include 5,000 square feet of commercial space and is slated for completion by 2014. Zeckendorf Marketing is the agent.

cle storage. Corcoran Sunshine Marketing Group is the agent. Contact:www.345meatpacking.com.

Park Slope Park Union 910 Union Street Sales have launched at American Development Group’s seven-story, 15-unit condo conversion of a building originally constructed in 1914. The project offers one-, two- and three-bedroom homes. Units range in size from 735 to 1,905 square feet and in price from $799,000 to $2.3 million. Building amenities include an attended lobby, furnished common roof terrace, children’s playroom, fitness room and bicycle storage. Halstead Property Development Marketing is the agent. Contact: www. parkunionps.com. Park Union

Upper East Side The Laurel 400 East 67th Street The 128-unit condominium developed by the Alexico Group is now 90 percent sold. Remaining units range in size from 496 to 646 square feet with prices starting at $695,000. Amenities include onsite parking, a 24-hour doorman, fitness center, pool, residents’ lounge, screening room and children’s play area. Corcoran Sunshine Marketing Group is the agent. Contact: www.laurelcondominium.com.

SALES UPDATE

Battery Park City 1 Rector Park 333 Rector Place The 174-unit condominium developed by River Rose LLC is now 86 percent sold. Remaining units include three-bedrooms priced at $1.8 million and a two-bedroom, 1,966-square-foot townhouse with private parking for $1.85 million. Amenities include a children’s playroom, business center, fitness center, bicycle storage and parking garage. Corcoran Sunshine Marketing Group is the agent. Contact: www.1rectorpark.com.

Chelsea 345meatpacking 345 West 14th Street Sales have launched at the 37-unit condominium developed by DDG Partners. Apartments range from 690-squarefoot one-bedrooms to 2,100-square-foot three-bedrooms, plus one 3,700-squarefoot penthouse, with prices averaging $2,300 per square foot. There will be five penthouse residences with private terraces. Building amenities include a fitness center, roof terrace, rainwater collection and irrigation system, private storage and bicy-

515 East 72 515 East 72nd Street The 330-unit condominium developed by River Terrace Apartments is 70 percent sold. The remaining one-, two-, three- and four-bedroom residences range in size from 611 square feet to 5,390 square feet, and prices range from $699,000 to $12.99 million. Amenities include a pool, spa, entertainment lounge, fitness center, 24-hour attended lobby and on-site parking. Corcoran Sunshine Marketing Group is the agent. Contact: www.515e72.com.

Upper West Side 752 West End Avenue Sales have launched at the 179-unit condo conversion, developed by Clipper Equity and Cachet Management. Originally built in 1931 as the Paris Hotel, the building offers one-, two- and three-bedroom homes sized from 493 to 1,362 square feet. Prices range from $630,000 to $1.4 million. Amenities include a 24-hour doorman and fitness center with indoor pool. Douglas Elliman Development Marketing is the agent. Contact: www.752westend.com. Compiled by Andrea Cetra

New York’s Premier Residential Real Estate Law Firm

KATZ & MATZ p.c. 1350 Avenue of the Americas, 3rd floor New York, NY (212) 244-4630 www.katzmatz.net PROUDLY CLOSING LOANS ON BEHALF OF CITIBANK, WELLS FARGO BANK, T.D. BANK, HSBC, FIRST REPUBLIC BANK, BANK OF AMERICA AND OTHER PRESTIGOUS LENDING INSTITUTIONS

Sandy: Landlords THE

from page 43

come is estimated by the city’s Department of Finance at about $3 million.

E ,I

ROCKAWAY PARK RETAIL STRIP

. .

A devastating fire sparked by utility wires the night Sandy hit destroyed 17 low-rise commercial and residential buildings stretching for more than two blocks on the north side of Rockaway Beach Boulevard, between Beach 113th and Beach 116th streets, in Rockaway Park, Queens. The buildings were valued at more than $20 million, an analysis of city Department of Finance records show. The owners on the scrappy blocks — whom CoStar identifies as individuals including Yaron Kayan, Owen Baxter and Emerald Rock — generally own a building or two, a review of property records show. Tenants in those one- and two-story properties included a barber shop, a medical center and a shoe repair store. Kayan — whose two-story building 114-20 Rockaway Beach Boulevard was destroyed — said he has not yet thought about replacing it or selling the parcel. City records estimated the building’s market value at nearly $1 million, but such figures are often far lower than true market pricing. “I am not thinking about that yet,” he said. “I am busy taking care of buildings that survived the storm.”

CWCAPITAL

x143

Despite being in evacuation Zone B, where the city did not require residents to clear out, many buildings in Stuyvesant Town and Peter Cooper Village suffered flood damage. That was especially true on the eastern edge of the complex, which is closer to the water. While most of the residents in the 11,200-unit complex were able to return to their homes within a week, some lacked elevators or hot water for longer. And since the property owner, CWCapital, offered rent abatements for residents without essential services, and repairs for flooded mechanical equipment, the total lost revenue will likely add up to millions of dollars. CWCapital did not respond to a request seeking an estimate of damage. In addition, the landlord was requiring tenants to sign a waiver if they wanted to retrieve their belongings from storage in the flooded basements of the complex. The waiver released CW from any damage liability and injury connected to going into the storage area. But CW is not alone in its waiver requirement. Many landlords of storm-damaged properties have also required visitors to sign waivers if they enter a yet-to-be-opened building.

MOINIAN GROUP

Success is a done deal.

$15,000,000

$7,400,000

Cinemas 123

Loehmann’s Plaza

MOVIE THEATER NEW YORK, NY

212,134 SF EAST BRUNSWICK, NJ

LENDER: REGIONAL BANK

LENDER: LIFE COMPANY

Capital Markets northmarq.com 33 offices coast-to-coast Capital Services East/Westchester 914.683.3710

Long Island 516.333.4034

96 December 2012 www.TheRealDeal.com

New York Metro 212.904.1994

New Jersey 973.538.2330

The Moinian Group, headed by CEO Joseph Moinian, has one of the largest commercial and residential holdings in Lower Manhattan. Eight of Moinian’s properties — totaling more than 2 million square feet — were damaged in some way by the hurricane. The company, after coming under fire from tenants for sending out rent bills days after the storm (which many other property owners did as well), announced on Nov. 6 that it would provide rent credits for the days that all its commercial and residential tenants were unable to use their space. A company spokesperson declined to provide an estimate for how much that would be. Following repairs, just three of the firm’s buildings remained closed as of the last week in November. The office towers 17 Battery Place North and South — which city records show have an estimated combined annual pretax net operating income of $13 million — are not expected to reopen to commercial tenants until Dec. 15, a company spokesperson said. The buildings are home to tenants such as the nonprofit jobs placement firm Wildcat Service and will soon be home to the New York Film Academy. The other closed property, 1 West Street, a residential building, was expected to reopen the last week in November.

ALMA REALTY Single-family homeowners suffered extraordinary hurricane-related losses in the Rockaways, but apartment landlords were also hit with mechanical damage and potential lost income through rent abatements. The Long Island City–based Alma Realty, which CoStar shows to be one of the largest owners of residential apartment buildings in the Rockaways, was one of those property owners. The company owns Surfside Park Apartments (also known as Surfside Houses) — a complex of three large buildings with a total of 770 units in the neighborhood. The complex had no power for 12 days, resident Carol Albert told TRD. Albert said the firm left tenants in the dark, providing no communications about when the building would reopen again. It finally did on Nov. 10, but the next day she received her monthly rent bill, which made no mention of the storm or of a rent abatement for the time she could not stay in her apartment. As of late last month, she still had not been notified of any abatement. Alma did not respond to a request for comment nor provided an estimate of the damages. TRD www.TheRealDeal.com March 2012 00

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Compensation paid quarterly. Marketing Agent Program is available in limited Time Warner Cable service areas. Owners of buildings with 50 or more units may contact Time Warner Cable’s New Market Development/MDU Department to discuss eligibility and program requirements. All rights reserved. Time Warner Cable and Time Warner Cable logo are trademarks of Time Warner, Inc. © 2012 All rights reserved. realdeal_12.1_mdu_map2_10.5x14.5

In re The Arc Building LP Case No. 11-46388 (JF) U.S. Bankruptcy Court, Eastern District of New York

Bankruptcy Auction Sale Property located at 117-119 West 21st Street, New York, NY. Ideal for mixed-use high-end development. Bidding starts at $12.2 million, all cash, no contingencies, free and clear of all claims, liens, taxes and encumbrances. Approved DOB Plans utilizing the existing building envelope and Development Plans for further expansion of the building are also being offered for additional consideration to any interested party.

Auction Date/Location:

December 18, 2012 at 10:00 A.M. United States Bankruptcy Court for the Eastern District of New York, 271 Cadman Plaza, Courtroom 2554, Brooklyn, New York Competing offers due prior to December 11, 2012.

Interested parties contact: Goldberg Weprin Finkel Goldstein LLP, Attention: Kevin J. Nash, 212-301-6944 E-mail: knash@gwfglaw.com Eastern Consolidated Attention: Alan P. Miller, 646-658-7328 E-mail: amiller@easternconsolidated.com The Arc Building LP Attention: Johanna Francis, 203-652-0504 E-mail: tab@etienneestates.com Consult website at thearcbuilding.com for additional information, including requirements for submitting a competing offer.

Real estate investment services

Residential market

from page 18

provided to The Real Deal by StreetEasy, just 43 closings that took place citywide in the week immediately after the storm have been recorded so far, compared with 662 closings the previous week. In Manhattan, only 17 closings had been recorded by press time, compared with 238 the week prior. However, the dip is not expected to be catastrophic in the long term. A greater concern, Miller said, is what will happen to the housing markets if Congress doesn’t hammer out a compromise before Jan. 1. “The betting money says that if we do go fully into this fiscal cliff, we’re going into a recession,” he said. “That means rising unemployment and easing demand for housing. We would see the default rate rise and another heavy foreclosure cycle.” TRD

Holiday retail

from page 20

availability there is already tight. “My problem Downtown is finding enough space available,” Consolo said. She expects that to change, of course, when large spaces open in the World Trade complex and nearby. And some restaurants in affected areas are still reeling from lost business after the storm. “They can never make up the lunches and dinners they couldn’t serve,” Podell said. Some stores Downtown remain shuttered and may never open again, but the vast majority are back in business, according to the Alliance for Downtown New York, a coalition that advocates for the neighborhood’s businesses and property owners.

Rental irregularities Manhattan as a whole has seen a decline in retail rents over the past few months. The average asking rent in the borough slipped to $110 per square foot, down 4 percent from the spring and 2 percent from the same time last year, according to data from the Real Estate Board of New York. That was the lowest average in the twice-yearly tally since the spring of 2007. The median asking price also slid to $77 per square foot, down 7 percent from a year ago. Most of the major retail corridors tracked by leading brokerages and research firms showed strong growth in asking rents, though several locations slumped. Among the laggards were the Upper West Side and the Meatpacking District, both of which saw asking rents drop from the second quarter, according to CBRE’s market report for the July-to-September period. But despite that slippage, most prime areas are going strong. According to Cushman’s third-quarter Manhattan retail report, Fifth Avenue between 42nd and 49th streets has seen asking rents jump 63 percent from a year ago to $942 per square foot. The tonier area to the north, up to 57th Street, had flat average asking rents at $2,067 per square foot. A block east, on Madison Avenue between 57th and 72nd streets, asking rents rose by 28 percent year on year to $1,106 per square foot, Cushman said. And availability in the area fell to 10.2 percent after third-quarter deals like Kate Spade’s lease for a flagship store at the old David Webb space at 789 Madison and Canali taking over the former Baccarat space at 625 Madison. The Times Square submarket, defined as Broadway from 42nd to 47th streets, also saw higher rents. The area’s average asking rent in the third quarter was $2,013, more than double the year-ago tally, despite an increase of 60,000 square feet of available space, according to the Cushman report.

Caution ahead

Happy Holidays from JOSHUA STEIN PLLC www.joshuastein.com 98 December 2012 www.TheRealDeal.com

New York City tourism — the prime driver for retail sales in the city — has been on the upswing for some time now, and before Sandy, tourism was on pace through October to set a new annual record. Meanwhile, consumer confidence, seen as a predictor of spending, last month reached its highest level of the year, according to the Conference Board, a global business research organization. Podell called tourism “paramount” to the city’s rising retail rents. “Some of the increase in asking rent is clearly a result of that increase,” she said. Still, modest U.S. economic growth, although buoyed by an increase in personal consumption, gives Cushman’s chief economist, Ken McCarthy, some cause for concern. He said U.S. economic conditions likely won’t improve meaningfully until late 2013, leaving consumers and businesses “risk averse” in the face of political and fiscal uncertainty. Locally, the financial services sector, which has an outsize impact on New York’s economy, lost 10,000 mostly high-paying jobs last quarter, Cushman said. That’s bad for spending and income and could be a drag on the rate of economic expansion, McCarthy said. None of that data sours the brokers. “People believe in this market,” Podell said. TRD www.TheRealDeal.com March 2012 00

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Commercial market

from page 28

nity to turn to staff who doubled up in space, and say, “‘We survived, it wasn’t so bad,’” said David Hoffman, executive managing director at Cassidy Turley. Although, he added, some may have disliked the close quarters. Another impact the storm is having on the market is that build-outs for tenants who are constructing or reconstructing space are getting delayed and costs are rising, said Gordon Ogden, a broker and principal at the Midtown-based real estate firm Byrnam Wood. The reason? Contractors have been tied up with Sandy repairs. “The demand for labor contributed to some slower [build-outs] and is increasing costs for those installations,” he said. In addition, tenants (and potential tenants) are more closely scrutinizing where mechanical systems in buildings are located. “Tenants are asking, ‘What are you doing to make sure it does not happen again?’ ” Brookfield’s Larkin said.

Midtown Even as some Downtown firms squeezed into shared Midtown spaces because their regular offices were shuttered, a few firms inked temporary deals. For example, the New York Daily News, which is headquartered in 4 New York Plaza, a building that may be closed for a year, put several dozen of its advertising employees in a month-to-month lease. The temporary 3,000-square-foot space is at 1441 Broadway and was leased through the executive suite firm Jay Suites, said one real estate professional familiar with the Broadway building. Non-Sandy deal-making in Midtown continued as well. What appears to be the largest lease of the month was a bit of an anomaly, however. It was a sale-leaseback transaction in which Spanish lender Banco Santander International sold its 113,000-square-foot building at 45 East 53rd Street for $120 million to a Florida-based company, as The Real Deal reported last month, and then inked a 20-year lease to remain in the building. In addition, several large blocks of sublease and direct space hit the market. “It feels like more space is coming online than is be-

ing taken offline,” said Hoffman. “And when that happens, and tenants know it is happening, they lose their sense of urgency to complete leases.” The largest was financial firm AllianceBernstein listing 203,756 square feet of sublease space at 1345 Sixth Avenue. There was no published asking rent. Meanwhile, Aby Rosen’s RFR Holding listed 189,647 square feet at 350 Madison Avenue, according to Cassidy Turley’s figures. Data from CoStar Group shows an availability rate of 54 percent in the building — far higher than the Midtown average. Indeed, the overall availability rate in Midtown jumped by 0.2 points to 11.3 percent from 11.1 percent in October. Average asking rents fell by $0.29 per square foot last month to $64.21 per foot.

Midtown South

Though not hit as hard as Downtown, most of Midtown South was left without power for a week after the storm, and tenants scrambled to find office space for that period. But by the first full week in November, most office buildings had their lights back and real estate professionals were back to work. For instance, Newmark Grubb Knight Frank brokers listed 255,000 square feet in two adjacent buildings that investment firm Savanna acquired in November at 245249 West 17th Street. Also, as TRD reported last month, Westchester-based computer giant IBM signed a sublease in Midtown South in late October. The company will take 54,045 square feet (the entire eighth floor) at 63 Madison Avenue, between 27th and 28th streets. CBRE Group brokers represented both the sub-landlord, WestPoint Home, a company that makes home products like pillows and sheets, as well as IBM. IBM is moving from a larger space in 11 Madison Avenue, information from CoStar shows. Sources said the lease, which runs through June 2019, starts at $32 per square foot and includes six months of free rent but just $10 per foot in construction costs. The average asking rent in Midtown South rose by $0.62 per square foot in November to $49.35 per foot, while the availability rate declined by 0.1 point to 7.8 percent.

Downtown Brokers say, despite the fact that many buildings are currently out of commission because of Sandy, there won’t be a long-term impact on the Downtown market. “The demise of Downtown has been greatly exaggerated again,” said Brookfield’s Larkin, referring to damage from Sandy. Brookfield has 12.8 million square feet in Lower Manhattan yet suffered little damage — except at 1 New York Plaza, which was closed for several weeks but reopened last month. Others said the relatively low rental rates in Lower Manhattan will continue to attract tenants. Marc Shapses, an executive managing director at commercial firm Studley, said with concession packages, tenants can sign leases with effective rents under $20 per square foot. That’s often lower than the rent would be at an equivalent building in Midtown or Midtown South, he said. “Downtown already is the best value for quality buildings in the city,” Shapses said. “[Tenants] will continue to think of Downtown as an option.” Average asking rents in the area are nearly $10 below the average in Midtown South and nearly $25 below Midtown. But the average asking rent Downtown did creep up last month by a slight $0.11 per foot, to $39.95 per foot, Cassidy Turley statistics revealed. During the same period, the availability rate remained steady at 10.4 percent. Despite the noise and confusion from generators, hoses and vents snaking out of Lower Manhattan buildings to deal with the Sandy aftermath, tenants still inked new leases in the area. A Studley team of David Goldstein and Greg Taubin represented law firm Sedgwick, which inked a deal to sublease the 39th floor of 125 Broad Street to another law firm, Holwell Shuster & Goldberg. Holwell is currently located on the ninth floor of 335 Madison Avenue. In addition, the 38th floor, which Sedgwick also occupied, was returned to the owners of the commercial condo space, law firm Sullivan & Cromwell. That law firm occupies much of 125 Broad. TRD reported in August that Sedgwick inked a deal to relocate to 43,374 square feet at 2 World Financial Center. TRD

Sandy: developer opportunities from page 47 The big prize The big prize for real estate industry players will likely be found in sweeping infrastructure projects, like seals for subway entrances, say, or new types of bulkheads to lessen the blow of future surges. But the amount of work for those types of projects won’t be known in a couple of months. Gov. Andrew Cuomo has requested $42 billion in federal aid for New York State, including $7 billion for the bridges, tunnels and rail tracks used by the subway system, Metro-North Railroad and Long Island Rail Road. The governor also wants $9 billion of the total to be spent on building protective infrastructure for future storms. Meanwhile, of the $42 billion in state aid, Bloomberg is seeking $15 billion for the city. Politicians in Washington will need to approve the relief money before anything happens. But there is some

confidence that a huge chunk of change will wind up here. Under the federal Stafford Act, Washington usually covers up to 75 percent of the cost of storm-damaged infrastructure like roads and power lines. And that largesse is freed up when a President declares a federal disaster area, which has already happened. Meanwhile, New Jersey’s Gov. Chris Christie has requested $37 billion in federal aid for rebuilding efforts in his state, which lost boardwalks, amusement parks, dunes, roads and homes. Separately, city council speaker Christine Quinn, an expected mayoral candidate, has called for possibly building a storm-surge barrier across the city’s harbor, to block future storms from flooding the city. The barrier might cost $16 billion, she said in a speech last month. Much of the work that would go into building such a barrier would probably be performed by the Army

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Corps of Engineers, but there would be ancillary jobs created for builders, designers and engineers. Architect Lance Jay Brown, a disaster relief specialist, said if 2011’s Tropical Storm Irene was a wake-up call, Sandy should be a call to action. He expects the response to be similar to what happened in New York in the early 1800s, when a fire destroyed Lower Manhattan. In its wake, fire codes were established, which led to the manufacturing and installation of fire escapes, creating a new industry. Many expect Sandy to also lead to changes in building codes, particularly when it comes to whether mechanical systems will be permitted in basements. “The evolution starts off with a crisis, but slowly gets normalized,” Brown said, adding, in terms of its effect on the region’s built environment, “I think this will have greater longevity than 9-11.” TRD

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Best deals

from page 75

vestor David Werner purchased the building in 2004 for $210 million and sold it in January for $390 million. That generated the fifth-highest return of the year at 114 percent. So how’d the investment trio score such a ripe deal? When they bought the building, retail on lower Fifth Avenue (from 42nd to 49th streets) was going for just a few hundred dollars per square foot. Prices there have nearly doubled over the past several years, and asking rents now average $942 per square foot, Cushman & Wakefield reported in the third quarter. Still, the buyers — a group including Crown Acquisitions, Murray Hill Properties, Jamestown Properties and Rockwood Capital — are also betting that there’s more value to squeeze out of the tower’s retail. About 26,000 square feet of the 50,000 square feet of retail space is available (much of the remaining space is leased to Chase). In addition, the new owners are asking $1,200 per square foot for the ground-floor retail. Some observers say, however, that such an ask is too high for the market.

Sellers: Savanna and Monday Properties Address: 386 Park Avenue South Total profit: $39.4 million Annual return on equity: 105 percent

he wily opportunistic investment fund Savanna, founded in 1992 and led by comanaging partners Christopher Schlank and Nicholas Bienstock, purchased 386 Park Avenue South in 2010, when many investors were too cautious to make a move. They bought the debt on the 300,000-square-foot, 20-story office building for about $44.2 million and then poured in another estimated $30 million to rehabilitate and lease it up. Today, it’s home to tenants like the lifestyle and entertainment group Sugar Publishing and retail tenant JPMorgan Chase. Yet through all that, Savanna quickly obtained a $58 million loan, limiting its equity in the deal to $17 million for most of the short 28 months it owned the property. In September, Savanna sold the building to William Macklowe Company and Pacific Coast Capital Partners for $111.5 million, generating a profit of about $39.4 million. Speaking on an industry panel in September, Schlank said that Macklowe thought he could achieve higher rents than Savanna was able to sign. “The drivers are there. That’s the tightest market in the country. Billy thinks he can get 10 bucks a foot more than we were getting, and that’s great,” Schlank told the audience. Schlank declined to comment for this article, citing a policy not to discuss rates of return.

Sellers: Walter & Samuels and individual investors Address: 304 Park Avenue South Total profit: $108.1 million Annual return on equity: 72 percent

nother of 2012’s most profitable transactions was Walter & Samuels’ sale of 304 Park Avenue South. Longtime Manhattan real estate player David Berley, chairman of the board at Walter & Samuels, was part of a group that purchased an interest in the 215,000-squarefoot Midtown South office building in the 1980s in a partnership with General Electric Capital, a onetime active lender.

But in 2004, Berley and his partners bought out GE’s approximately 50 percent stake for an unspecified amount and took out a $32 million loan. Based on an analysis of public records, TRD estimated the value of the property to be about $50 million at the time, including $18 million in equity. Three years later, the owners refinanced again with a $73.4 million loan, removing their remaining equity in the deal. But at the same time, the heavy debt load made the property cash negative or cash neutral for several years, TRD’s analysis showed. The owners sold the building in June (although Berley is keeping a small stake for himself ) to SL Green for $135 million. The sales price was boosted by rental rates in Midtown South, which have outperformed the rest of the city over the past year. “We had a very low basis,” Berley said. “But it was the old story: They made an offer we could not refuse.” While Berley declined to discuss the intricacies of the deal or comment on TRD’s figures, he said his co-investors, who bought into the deal in 2004, achieved returns of 50 to 1 on their equity.

Seller: Property Group Partners Address: 148 Lafayette Street Total profit: $41 million Annual return on equity: 34 percent

roperty Group Partners, formerly the Louis Dreyfus Property Fund, acquired the 150,314-square-foot Soho office-and-retail building during the peak of the real estate market, in February 2007, for $59 million and injected an estimated $21 million to rehabilitate it. Despite buying at the then-peak, Soho values — unlike much of the city — continued to rise. In addition, after upgrading the building, they lured fashion tenant Dolce & Gabbana to locate its U.S headquarters there in 2009. Then, in May 2012, Epic UK, a London-based real estate investment company headed by Steven Elghanayan, paid $126.5 million for the building, yielding an annual return of 34 percent for Property Group Partners. A spokesperson for the firm declined to comment. Elghanayan is a member of the well-known real estate family that owns residential-focused firms TF Cornerstone and Rockrose Development.

Seller: Cariplo Pension Fund Address: 10 East 53rd Street Total profit: $316.7 million Annual return on equity: 29 percent

he Italian pension fund Cariplo purchased the 37-story office building in 1993 for $58.4 million, and in February sold the 388,000-square-foot building to SL Green Realty for $252.5 million. The fund made an eye-popping $198.6 gross profit on the sale, but the sale yielded an annual return of just 29 percent because the fund held the property for so long. Cariplo had planned to buy a number of buildings in New York during the downturn of the early 1990s, but only acquired this one, home to publisher Harper Collins. The TRD analysis of city tax and income records for the building shows it generated a steady annual return, which in recent years was approximately $9 million. Although Cariplo had no debt, one industry insider said

the firm decided it was time to sell and reached out to Hines, a global real estate owner and operator, to manage the building toward a sale. Hines, in turn, hired CBRE Group to market the property. Cariplo also likely paid millions over the years in expenses such as tenant improvement and brokerage fees, which would further erode the rate of return, but those expenses could not be determined.

Sellers: Waterman Interests and JPMorgan Asset Management Address: 130 Prince Street Total profit: $33.1 million Annual return on equity: 15 percent

aterman Interests — headed by former Reckson Associates executive Philip “Tod” Waterman — and JPMorgan Asset Management together acquired the 73,950-squarefoot Soho retail-and-office building in the midst of the frothy real estate market in June 2007 for $112 million. While many investors swallowed losses or turned over the keys, this partnership managed to eke out a healthy 15 percent annual return, an analysis of sales information and data from mortgage tracking firm Trepp revealed. In part, they were saved by a conservative loan-to-value ratio. In 2007, the purchasers took out a $70 million loan, borrowing just 63 percent of the purchase price. Despite that, the $70 million mortgage secured by the building was the only one among the 10 top deals that was put on a distressed watchlist by the loan’s servicer in 2009, indicating the servicer was concerned that loan payments could be interrupted. Notes from the servicer, Capmark, blame the decline in financial health on money spent to secure a tenant. But the finances were stabilized with a new lease signed by M.A.C, a division of the makeup giant Estée Lauder. M.A.C now occupies 86 percent of the building’s office space; retail tenants include apparel stores True Religion and Lacoste. Waterman and JPMorgan sold the property for $140.5 million in late May to Atlanta-based institutional investor Invesco. TRD 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 In the November issue story, “Condos in context,” TRD incorrectly stated that a master bedroom in a $2.99 million apartment at Philip House at 141 East 88th Street was seven feet wide. The bedroom is, in fact, slightly more than 10 feet wide. In the November issue story, “A day in the life: Joseph Moinian,” TRD incorrectly stated that 605 West 42nd Street was a condo. It is, in fact, a rental. In the November issue story, “Who rules in hospitality?” TRD ran the wrong photo of Ira Drukier of BD Hotels. The photo was removed from the website when it was brought to TRD’s attention. In a November issue story, TRD incorrectly stated that New York Community Bank had $18.2 million in multi-family loans on its books. The bank actually holds $18.2 billion in multi-family loans on its books.

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Simone

from page 62

That’s not to say that Simone doesn’t have competition from other developers. The Lightstone Group, a privately held real estate owner and manager with assets in Texas and California, recently bought the Whitestone Multiplex Cinema site in Castle Hill for $30 million. It’s planning to redevelop the site as the borough’s first outlet mall. And earlier this year, Prestige Properties broke ground on the Mall at Bay Plaza adjacent to Co-op City, the first new suburban-style mall in New York City in the past 40 years. (The Throggs Neck Mall is still being redeveloped.) But as Simone put it: “Our advantage is that we can move quickly. That is what separates us from the institutional players. “We’re here to try and serve a niche,” Simone said. “When we find an area that’s underserved, we feel that spells an opportunity — and we try and up the use.”

Big fish, small pond For Simone, there are significant benefits to being a big fish in a small pond. For one, politicians in the Bronx are often more welcoming toward developers than they might be in other boroughs, Vacca said, explaining that many of his council colleagues in Manhattan are looking to prevent new projects rather than start them. But Vacca and other Bronx politicians greet developers with open arms because they “bring disposable income” to the borough. In addition, Simone has maintained a solid reputation. “There are a lot of people up there who are sneaky, but not him,” said Dolgin. “People know him.” Stacom said she didn’t “really know Joe” before working on the Hutchinson site, but praised him and described him as a hands-on developer who was personally involved in the project — from the big-picture vision down to the commuter shuttle from the No. 6 subway. She and others also underscored that he delivers his spaces on time. “If I have an opportunity to bring a tenant to the Bronx, my first call will be to Joe,” Stacom said. Even when a deal doesn’t pan out, the company has been accommodating. Cintron recalled when the city’s Economic Development Corporation approached Simone a few years ago to submit a bid for the 149th Street corridor, a project now known as the Hub. Cintron said Simone met with EDC to express interest in the project, though the company said it never formally submitted a bid. Despite the fact that another developer — Queens-based Triangle Equities — was awarded the project, Simone allowed Cintron access to his buildings, which are adjacent to state-owned properties, so that she could show the space to investors. “It took him a little while to simmer down … but he realized what the community needed,” she said. TRD

With $3.8 million sale, Lower East Side sees priciest deal since 2008 crash Norfolk Street condo deal may signal the start of a return to boom-era prices

he sale of a penthouse at new condo 115 Norfolk Street marks the most expensive residential sale recorded in the Lower East Side since the housing bust in late 2008, according to Douglas Elliman’s Ariel Tirosh, who is handling sales at the building. The project’s developer, Lokshin + Vinbaytel, sold the three-bedroom, three-bathroom penthouse for $3.8 million, or $1,953 per square foot, said Tirosh, a senior vice president at Douglas Elliman. It had been listed for $3.95 million. Tirosh, who also represented the buyers, said they were a couple, but declined to reveal their identity. The sale is the priciest in the neighborhood since 2008, when a penthouse at 15 Rivington Street sold for $5.09 million, according to StreetEasy. Ariel Tirosh of Douglas Elliman Sales launched at the 24-unit low-rise building in late 2010. There are now two units left, Tirosh said. The penthouse features a 2,000-square-foot private outdoor space and a parking spot. “With the revival of this neighborhood as the times come out of crisis, we are starting to rebuild price levels,” said Tirosh. The penthouse at 115 Norfolk Street He said similar sales prices could be achieved soon at VE Equities’ 250 Bowery, a 24-unit condo building, and at 100 Norfolk Street, a project by Brooklyn-based Urbanscape. TRD www.TheRealDeal.com March 2012 00

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Let’s make a meal

Brokers dish on the city’s best spots to take clients when a deal is on the table By Katherine Clarke and Guelda Voien or New York’s savviest residential brokers, wining and dining clients is not just an enviable perk of the job, but an essential part of expanding one’s business and ensuring referrals.

Fred’s at Barneys, the Upper East Side eatery inside the famed department store, others revealed some less obvious gems downtown and beyond. Brokers should pick a restaurant or bar that provides a feeling of luxury, said Town

The Metropolitan Club at 1 East 60th Street. Inset, Nikki Field of Sotheby’s International Realty.

or vegetarians, and often find the white-hot spotlights of the hottest of-the-minute establishment to be a turn off.”

Upper East Side Sotheby’s International Realty broker Nikki Field, who is currently listing a $25 million townhouse at 14 East 82nd Street, said she often hosts clients for cocktails or dinner at the Metropolitan Club, a private social club on 60th Street off Fifth Avenue. Original members of the club, famously founded by J.P. Morgan in 1891, include William Vanderbilt and James Roosevelt. The old world–style meeting place features a regal dining area. “No press, no photographers, no cell phones permitted,” Field said. “The privacy that the club provides is appropriate for relaxed, confidential conversations without any concern that our meetings may trigger unwanted rumors.” Meanwhile, Fred’s is still a popular venue for broker meetings. While the elevators — always swarming with bargain-hunting tourists — may frustrate in-a-hurry brokers, Fred’s affords decent food and a modicum of privacy for conversation, although it also serves as a place to see and be seen. “They give me this great table that is in the center of everything,” said Royce Pinkwater, also of Sotheby’s, “but it has a big privacy factor.”

Midtown

From left: The Crosby Hotel dining room; Elliman broker John Gomes.

But identifying the right place to take a client to lunch or dinner — and which spots are conducive to deal-making — can be difficult, considering the sheer number of New York City restaurants out there and the everevolving tastes of moneyed New Yorkers. The Real Deal asked some well-known city brokers which restaurants and bars they favor for meals with clients. While many cited longtime beloved hangouts such as 104 December 2012 www.TheRealDeal.com

Residential’s David Salvatore, but the definition of luxury has changed in recent years as client bases have evolved and people working in creative industries have joined finance executives as a key group of buyers. “It’s no longer about spending vast amounts of money,” Salvatore said. “It’s about personal connections and the specific attention you give your clients. Many of my clients in the technology field happen to be vegans

Bustling Midtown is perpetually buzzing with brokers making deals. Michael’s restaurant at 24 West 55th Street, for instance, is a longtime venue for commercial brokers and developers to discuss deals, while the iconic Plaza hotel is a favorite of almost everyone. For years, the lobby bar at the Four Seasons hotel at 57 East 57th Street has also been a popular deal-making venue for residential brokers. By virtue of being in one of the most luxurious city hotels, it affords a sense of exclusivity while serving snacks, afternoon tea, wine and champagne by the glass, as well as cocktails and cigars. Also popular is the Core Club at 60 East 55th Street, which has become a haven for New York elites from all industries, including Blackstone Group president Stephen Schwarzman, architect Richard Meier, football legend Dan Marino and Hollywood talent agent Ari Emanuel. Warburg Realty executive managing director Richard Steinberg is a founding member of the invitation-only club and said it affords privacy for client meetings.

As previously reported, the club features a facialist, a massage parlor, a gym, a library, a screening room and famous artworks hanging from the walls — all for a $50,000 initiation fee and $15,000 in annual dues. Elliman broker Michael Lorber, son of company chairman Howard Lorber, regularly checks in at the club on Foursquare, according to his Twitter page. Field said her favorite venue for a closing celebration is nearby Le Cirque, restaurateur Sirio Maccioni’s eatery at One Beacon Court. The iconic French Italian bistro is “always festive and perfect for champagne toasting,” Field said.

Tribeca Sonia Stock, a Douglas Elliman broker who specializes in Tribeca, said she tends to seek out eateries in the neighborhood with great food — and a low decibel count. “There are so many restaurants out there that are great — they’re packed and hip, but they’re too loud,” said Stock, who is listing a $3 million loft at 161 Hudson Street. “You can’t hear what your client is saying.” Stock recommends the Odeon at 145 West Broadway as a meet-up spot for brokers and their clients because “it’s busy, but the tables are set apart so you can talk openly with your client.” The longstanding neighborhood brasserie has been a favored haunt of late night diners and serves staples such as homemade pasta and steak tartar. City Hall, a grand American steakhouse at 131 Duane Street, is also a favorite of Stock’s. The marble checkerboard-floored eatery has top cuts and a well-stocked raw bar.

Soho In nearby Soho, Elliman’s John Gomes recommends the Crosby Hotel at 79 Crosby Street. “We actually have a standing weekly breakfast meeting there with one of our developers,” Gomes told TRD. “It’s a happy room that was thoughtfully designed by Kit Kemp, who is the master of using color, patterns and texture. It’s easy to be inspired there.” As for the Crosby’s clientele, Gomes said it’s a creative mix, which makes for great people-watching. “The dining room has a comfortable feeling to it that reminds you of home,” he said, “which is always a good feeling to have when you’re trying to close a deal.” Also popular with brokers and other real estate pros is the Mercer Kitchen, the restaurant in the basement of the Mercer Hotel at 99 Prince Street. Famed chef Jean-Georges Vongerichten is at the helm of the operation. The Mercer Kitchen serves anything from scallops to designer hot dogs, as well as custom cocktails. Lastly, Warburg’s Steinberg said Soho mainstay Balthazar is his favorite spot for finalizing a sale. While the popular bistro is “far too crowded” to hash out early negotiations, he said, it’s a great spot for ironing out the last few details. “I usually take people there to fine-tune a deal,” Steinberg said. TRD www.TheRealDeal.com March 2012 00

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 FRANK

     

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Run your ad in print issue and in digital edition Contact: Robert Stearns rs@therealdeal.com 212-991-5047 www.TheRealDeal.com December 2012 107

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The Historic District Council hosts a “Coffee Talk” with Robert LiMandri, commissioner of the New York City Department of Buildings, who will answer questions from the audience on a wide range of topics. Neighborhood Preservation Center, 232 East 11th Street. 8:30 to 10 a.m. Free. Registration required. Information and registration: www.hdc.org.

C A L E NDA R 1

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3–4

The International Council of Shopping Centers hosts the “New York National Conference & Deal Making.” Speakers include Michael Kercheval, president and CEO of ICSC, and Brad Hutensky of Hutensky Capital Partners. Sheraton New York Times Square Hotel, 811 Seventh Avenue. Dec. 3, 7:30 a.m. to 7 p.m.; Dec. 4, 8 a.m. to 4 p.m. Fee: $490 for members in advance, $555 at the door; $590 for nonmembers in advance, $670 at the door; $50 for student members in advance, $55 at the door. Information and registration: www.icsc.org.

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The Real Estate Board of New York presents a “Commercial Holiday Luncheon” with guest speaker Adam Leventhal, chairman and CEO of Beacon Capital Partners. The Waldorf Astoria Hotel, 301 Park Avenue. Noon to 2 p.m. Fee: $95. Registration required. Information and registration: www.rebny.com.

The American Institute of Architects hosts a lecture entitled “U.S.–Cuban Collaboration on the Restoration of Hemingway’s Finca Vigia.” William Dupont, an expert in heritage conservation and director of the Center for Cultural Sustainability at the University of Texas at San Antonio, will discuss the ongoing restoration of Finca Vigia, Ernest Hemingway’s home in Cuba. The Center for Architecture, 536 LaGuardia Place. 6 to 8 p.m. Fee: free for members, $10 for nonmembers. Information and registration: www.aiany.org.

The Council of New York Cooperatives & Condominiums presents a seminar entitled “A Code of Ethics for Board Members.” CNYC vice president and attorney Arthur Weinstein will present his original code of ethics for board members. Location TBA with purchase of tickets. 7 p.m. Fee: free for CNYC members/subscribers, $60 for nonmembers in advance, $75 for nonmembers at the door. Registration required. Information and registration: www.cnyc.com.

The New York Metropolitan Chapter of the Appraisal Institute hosts its annual “Installation Dinner and Holiday Party,” featuring a farewell speech by Theresa Nygard, outgoing president of the Appraisal Institute. New officers and board of directors will also be sworn in. Dream Downtown Hotel, 355 West 16th Street. 6 to 10 p.m. Fee: $225. Information and registration: www.aimetrony.com.

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The New York Commercial Real Estate Women’s Network presents its “NYCREW Holiday Gala,” celebrating the end of 2012 and the start of NYCREW’s 12th year. Awards will be presented and hors d’oeuvres and cocktails served. Columbus Citizens Foundation, 8 East 69th Street. 6:30 to 8:30 p.m. Fee: $120 for members, $150 for nonmembers, $165 for walk-ins. Information and registration: www.nycrew.org.

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The National Association of Professional Women in Construction presents its “Holiday Dinner Dance.” Stephanie Dawson, acting chief operating officer of the Port Authority of New York and New Jersey, is the honored guest. The Stan Rubin Orchestra will perform. The Yale Club, 50 Vanderbilt Avenue. 7 p.m. Fee: $385. Information and registration: www.pwcusa.org.

The Real Estate Lenders Association hosts a “RELA New York Breakfast” featuring William Rudin, president of Rudin Management Company, one of New York’s oldest real estate companies. The Yale Club, 50 Vanderbilt Avenue. 8 to 9:30 a.m. Fee: $50. Information and registration: www.rela.org.

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108 December 2012 www.TheRealDeal.com

The New York Building Congress presents its “New York Building Foundation Annual Theater Benefit,” honoring chairman Frank Sciame of F.J. Sciame Construction Co., past chairmen John Hennessy III of Turnstone Energy Solutions, Richard Tomasetti of Thornton Tomasetti and Dominick Servedio of STV Group. A reception and dinner will be followed by Broadway performances of “Glengarry Glen Ross,” “The Mystery of Edwin Drood” and “Once.” Barbetta Restaurant, 321 West 46th Street. 5:30 p.m. Fee: $1,000, $1,250 for prime seating. Information and registration: www.buildingcongress.com.

O P P O R T U N I T I E S A R E I L L U M I N AT E D W H E N C O N D I T I O N S A R E E X A C T LY R I G H T The Aurora Borealis - The Northern Lights occur when highly charged ions trapped by the Earthâ&#x20AC;&#x2122;s magnetic field interact with molecules, releasing energy as visible light.

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WeiserMazars LLP is an independent member ďŹ rm of Mazars Group.

A C C O U N T I N G

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T A X

Exactly Right.

A D V I S O R Y

11/12/12 12:46 PM

T h e R e a l D e a l C r o s s w o rd

From sales reps to Sandy By Myles Mellor

Home may mean different things to different people, but you can ﬁnd the right thing for all of them. One of Europe’s leading manufacturers, ALNO provides awardwinning kitchens and support from initial design to installation and beyond.

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Across ALN52-015-12_B2B_The_Real_Deal_117,475x161,925_4c_4.indd 1

27.11.12 12:01

1. 6 10 11 12

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Xerox exec who recently bought a $4.5 million spread at Ian Schrager’s 50 Gramercy Park, Anne ____ High-end Hamptons developer, _____ Collé Take legal action What a landlord does with new renters Many are now getting rent abatements after being evacuated because of Hurricane Sandy Miami is at the southern ___ of Florida Russian billionaire with homes in New York, Dubai, Monaco, Paris and Geneva, ____ Rybolovlev Over the past two years, the Midtown South office market has seen

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Interior Architecture, Planning, Design Workplace Strategy & Owner/Tenant Services

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110 December 2012 www.TheRealDeal.com

T: 212. 922. 1313 C: 917.674.0818 wmarcus@theswitzergroup.com www.theswitzergroup.com

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the city’s ____ decline in availability Amasses commissions (two words) Times Square billboard ____ package, pay plus benefits Makeover for an historic building Williamsburg luxury building ____ Village Ending for many company names A top agent with Keller Williams NYC, Jason ____ First name of Giants co-owner now moving into Donny Deutsch’s old apartment Cuomo, e.g. CitySpire Center has one Flooding here led to the closure of many buildings after Sandy hit

Down Changed residences BGC Partners CEO Howard ____ George and John Tint or shade Tokyo cash Corcoran broker who often partners with Carrie Chiang, ____ Wang 7 _____ Brothers, buyers of the American Stock Exchange site and a neighboring site for $150 million 8 A top agent with Brown Harris Stevens, Mary _____ 9 Go on and on 16 An outdoor space can ___ an apartment’s value 17 Having a rent-controlled apartment 1 2 3 4 5 6

is ____ 18 Demand for this type of rental has been up post-Sandy (two words) 19 “Russian Paris Hilton” who paid $9 million for a Time Warner penthouse in 2004, Anna ___ 21 Police _____ 23 Stretched across the globe 27 Machinery damaged by the storm at One57 28 _____ house 29 Molding at the bottom of a baseboard, base ____ 31 Employment To play this puzzle online, and see the solution, visit www.TheRealDeal.com.

COMINGS & GOINGS

BROKER EXCHANGE

Bellmarc expands space following acquisition

Residential

Neil Nerich has been hired as listing director. He was previously

n need of more space after acquiring A.C. Lawrence, the Bellmarc Group will open a new office at 48 West 22nd Street in Chelsea this month, firm head Neil Binder told The Real Deal. Bellmarc Group, the parent company of Bellmarc Realty, absorbed fellow brokerage A.C. Lawrence in October. The merged company now has a total of 400 agents in its five offices. Especially crowded is Bellmarc Realty’s office at 936 Broadway, which now has 150 agents crammed into it, Binder said. Roughly 45 agents will move from there to the new, 2,500-square-foot storefront space. Lisa Strobing, executive vice president and manager of sales of the Broadway office, will manage the new office, he added. The two firms, both members of the Bellmarc Group, will maintain separate names — though AC Lawrence has dropped the periods between its initials — and forge a symbiotic relationship, Binder said. Bellmarc Realty will continue to focus primarily on residential sales, but begin inching into the rental space, while AC Lawrence will do the opposite. The two companies will train their A mosaic wall at Bellmarc’s new Chelsea office agents together. All of the agents moving to the new space will be from Bellmarc Realty rather than AC Lawrence, Binder said. “I am anxious to maintain the separation because they have different cultures,” he said of the two firms. The new storefront space was slated to open early last month, but was delayed due to Hurricane Sandy, Binder said. The location of the new space was a strategic choice, Binder noted, since Bellmarc hopes to expand its business in Chelsea. “We felt it would broaden us to touch the Chelsea market a little more,” Binder said, adding, “Chelsea is a very cool market.” By Guelda Voien

Commercial firm Salmon & Marshall splits

he commercial real estate firm Salmon & Marshall has split in two, with cofounder Matthew Marshall, 30, launching his own company. The new firm, called Marshall Real Estate, will focus on the asset class where Marshall made his name as well as where he said buyers are increasingly frothing to invest: retail condos. “There are certain types of investors and buyers who look at Manhattan retail,” but not many brokers who specialize in it, Marshall said. “I am trying to fill that void.” For now, Marshall’s former partner, Kevin Salmon, who has a broader focus that includes multi-family buildings, will continue to do business as Salmon & Marshall. But Salmon said he plans to launch a new firm, called Khizer Salmon Real Estate Professionals, in January. Salmon and Marshall, both formerly of Marcus & Millichap, Matthew Marshall launched their firm in 2009 in response to the downturn in hopes of gaining market share through distressed deals. But Marshall said he has remained steadfastly centered on retail condos since that time. Recently, he said investor interest in retail condos in Soho and its environs, where retail prices have risen precipitously over the past few years, has grown into a “feeding frenzy.” Recently, Marshall sold a Soho retail space at 151 Wooster to investor Yaron Jacobi for $25 million. His goal is for Marshall Real Estate to become the “go-to source” for buyers in the retail condo area, he said. Marshall, who is currently working with only one other employee, a marketing person, said he plans to add three or four brokers to his roster in the coming year. By Guelda Voien

AC Lawrence at Bond New York. Bond New York Theresa Vitanza and Mourad Bessioud joined the firm from Citi Habitats; Stephanie Sulaiman and Chris Gingold were hired from Douglas Elliman; Kevin Maher joined from the Corcoran Group; and Sharon McGrail joined from Town Residential. Douglas Elliman Eleonora Srugo and Ryan Stenta, previously of Keller Williams New York City, joined the firm’s Sroka Worldwide Group. Also joining the group is Jeff Crisalli, previously of JDB Management and Blue Diamond Realty. Keller Williams New York City Eran Elhanani joined the firm as senior vice president, and Cindy Van Dorn was hired as vice president. Both were previously at Halstead Property.

Commercial Adams & Company Bradley Cohn was hired as associate director from Studley, where he was a junior broker assistant. Cresa New York Harold Kahn joined the firm as managing principal of operations and administration. Previously, he was president of Gravitas Business Consulting. The Heller Organization Joshua Singer joined the firm as director of retail leasing. Previously, he was associate director of retail leasing at Winick Realty Group. Seyfarth Shaw Miles Borden joined the company as partner in the firm’s New York real estate department. He was previously a partner at Troutman Sanders. Tishman Technologies Corporation Matthew Giddings was hired as business development manager. Prior to joining Tishman, he served in a senior business development role for Integrated Design Group. Wachtel Masyr & Missry Michael Waters joined the firm’s real estate development depart-

Town to open Soho, Gramercy locations

own Residential will open its seventh and eighth Manhattan offices in Soho and Gramercy Park early next year, the brokerage announced last month. Town has remained-tight lipped about the exact addresses of the new offices, but said the new Soho location will fully occupy a two-story landmark building on a “prime corner” in West Soho and will have outdoor seating. Sales and leasing codirectors Ari LeFauve and Lyon Porter will manage the 35-agent location, which is slated to open in January. Town’s new Gramercy Park office is scheduled to open in the spring of 2013, the firm said. Town founder and CEO Andrew Heiberger said in a statement: “We will remain hyperfocused on Manhattan Town’s office at 110 Fifth Avenue in 2013, which we anticipate will be a banner year for the firm.” Town currently has Manhattan offices at 730 Fifth Avenue, 239 East 79th Street, 45 Horatio Street, 110 Fifth Avenue, 88 Greenwich Street and 26 Astor Place. By Christopher Cameron 112 December 2012 www.TheRealDeal.com

ment from Dickstein Shapiro, where he was counsel in the real estate department. Anthony Bonan was hired as an associate in the firm’s real estate department from Gibson, Dunn & Crutcher, where he served as an associate. Compiled by Andrea Cetra

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Keeping spirits bright Brokerage holiday parties aim to boost morale after Sandy

Above: Last year’s Platinum Properties holiday party at Cipriani Downtown. Below, from left: MNS’s Andrew Barrocas, Highlyann Krasnow and Ryan McCann at the firm’s holiday party at the Gansevoort Park Avenue hotel last year.

Bless this house Long Island City condo takes the feng shui craze to the next level

n a recent Monday morning, the gentle peals of a ceremonial bell could be heard over the noise of construction at the new Vista condo in Long Island City. A small group of buyers in contract to purchase units at the building were gathered at the Purves Street site, along with the Vista’s feng shui consultant Laura Cerrano, to bless their future home before it reaches completion. For the past few years, it’s become increasingly popular for apartment buyers in New York to use the ancient Chinese practice of feng shui to evaluate potential apartment buys. But the Vista is taking the feng shui craze to

According to building marketer Modern Spaces, the first 11 homes at the Vista sold in only 25 minutes after the “soft” sales launch in September. the next level: The building is one of the only new condos in the city to be designed fully in accordance with feng shui principles, which aim to change a space’s energy through blessings and placement of rooms and furniture. Cerrano advised the developers on every facet of the building. For example, the Vista does not have a fourth floor — since the number four can be considered bad luck — and the apartment entrances are configured to avoid FENG SHUI PHOTOGRAPH BY ZACHARY KUSSIN

WE HE AR D

▼

t’s that time of year again, when New Yorkers dust off their dancing shoes, brush up on small talk and head to the company holiday party. For real estate brokers, these soirées take on a particular significance: As independent contractors, many agents spend little time with their coworkers, so holiday parties offer a rare bonding opportunity. “Real estate can be a very lonely business,” said Kathy Braddock, cofounder of Rutenberg Realty, which is throwing a bowling/cocktail party at Lucky Strike to celebrate the season. “Part of our job is to lend emotional support.” That’s especially true after the roller-coaster ride of the past month. While some firms said party plans were delayed or scaled back due to the devastation of Hurricane Sandy, most said there’s a greater need than ever for brokers to unwind after a difficult few weeks. “I always think when something bad happens, it’s nice to go to something happy,” said Fox Residential founder Barbara Fox, who is throwing her annual holiday party this month for clients and brokers at her Upper East Side apartment. “It’s a very warm and inviting thing to have people into your home after such a tragedy.” Braddock said Rutenberg chose bowling for its holiday party in hopes that the activity would be fun and foster team-building. Plus, she said, the venue provides “enough space to socialize.” Other firms opt for more glamorous locations. Platinum Properties held its holiday party last year at Cipriani Downtown, serving cake and champagne, and the venue was such a hit that this year’s party will also take place at the Soho hot spot. Brooklyn-based MNS is throwing its party this year at the King & Grove Williamsburg hotel, relocating from

Manhattan’s equally trendy Gansevoort Park Avenue hotel, where the soirée was held last year. MNS selected the Brooklyn venue in part because “we’re opening up a new office in Williamsburg and have done a tremendous amount of business there in 2012,” said CEO Andrew Barrocas. Of course, brokerage holiday parties can be more than just an opportunity for too much punch. These fiestas provide opportunities for schmoozing clients, cementing business relationships or bolstering a firm’s image. Town Residential this year is throwing a combination holiday party and birthday celebration at the Meatpacking District’s swanky Dream Downtown hotel. The party, which is expected to draw over 1,000 brokers, staff and clients, will take up the entire hotel, from lobby to roof. “Town Residential has a lot to celebrate,” said Andrew Heiberger, Town’s founder and CEO. “This is a time to show our sincere appreciation for those who have helped us in our rise to the top.” Last year, two-year-old brokerage Blu Realty had a dinner in a small restaurant, according to managing partner Vince Rocco. But this year, with nearly 70 employees in total, Blu is planning a larger cocktail party at Bar Basso at 235 West 56th Street in Manhattan. Festive holiday parties are “even more important for a new company,” Rocco said. “We want to show people — both our brokers and others in the industry — that we’re solid and we’re sound,” he added. By Lucy Cohen Blatter

marketer Modern Spaces, the first 11 homes at the Vista sold in only 25 minutes after the “soft” sales launch in September. A number of these early purchasers are interested in feng shui, said Jennifer Dorfmann, executive vice president and director of sales at Modern Spaces. For feng shui enthusiasts, the Vista is “like the motherland,” she said. Jennifer Villani, who attended last month’s ceremony, said the Vista’s feng shui pedigree was one reason she de-

facing other interior doors, which is believed to allow energy to escape. Craig Axelrod of the Emmy Companies, which is developing the 48-unit building along with Lions Group, said he doesn’t know of any other buildings that have gone so far to incorporate feng shui into their design. At last month’s ceremony, Cerrano wore a hard hat while she scattered rice and burned sage at the construction site and asked buyers to write down their intentions for a new beginning in the building. Axelrod, who attended and helped organize the blessing, said he felt the building’s feng shui emphasis would be attractive to potential buyers and help make the Vista stand out from other Feng shui consultant Laura Cerrano, right, collecting buyers’ intentions at the Vista construction site last month. new condos. “The newer generation of buyers … is more enthused cided to buy a fifth-floor unit there. about” feng shui, Axelrod said. “I thought it was some“Your home is your domain, it’s your safe place,” she thing that was fun and different for people.” said. “So to be able to have good energy surrounding that So far, it seems to be working: According to building is great.” By Zachary Kussin www.TheRealDeal.com December 2012 113

THE CLOSING

WITH DOUG

STEINER

Douglas Steiner is the president of Steiner Equities Group, a development, management and leasing firm based in Roseland, N.J., specializing in office, industrial and retail development nationwide. He is also head of Steiner NYC, the development firm behind the 50-unit condominium at 58 Metropolitan Avenue in Williamsburg and an upcoming 52-story, 720-unit rental building in Downtown Brooklyn. Steiner also wears another professional hat. He’s chairman of Brooklyn-based Steiner Studios, the largest film and TV production complex on the East Coast. He is currently working on expanding the 300,000-square-foot facility by 328,000 square feet to bring new stages, media offices and classrooms for Brooklyn College students studying film and entertainment. “Spider-Man,” “Sex and the City” and “Boardwalk Empire” are just a few of the productions that have filmed there.

What is your full name? Douglas Steiner. My middle name is Craig. What’s your date of birth? 1960. I don’t want to give you my date of birth. Then you’re going to ask me for my passwords. I’m paranoid. Where did you grow up? South Orange, N.J. Do you still live in New Jersey? I raised my kids in New Jersey, so I used to split my time between Short Hills, N.J., and New York City. My kids have moved on now, so I’m fully in New York. Where in the city do you live? I’m moving to Williamsburg in six to nine months. I’m going to get rid of [my place in the East Village]. I’m also getting ready to sell my home in Short Hills. I’m looking forward to living in one place. I want all my kids to have a room and feel like they have a home. Do you have any other homes? I have a place in Cape Cod. I’ve been going to the same town there for 24 years, and I finally bought a house there in the fall. What were you like as a kid? Painfully shy. I always felt — and still sort of feel — like an outsider. Where did you go to college? Stanford. My degree is in English and creative writing. I didn’t give much thought to picking a major, but there were a lot of books I thought I had to read to feel educated. In hindsight, I probably should have majored in something else; I don’t like literary criticism and that’s most of what being an English major is. Steiner NYC was founded by your father in 1996. Did you go straight into the family business after college? When I graduated, I moved to Paris to become a novelist, but I figured out that I like reading a lot more than writing. I was living a trustafarian’s life, supported by my father.

114 December 2012 www.TheRealDeal.com

After about six months, I was just dying to start working. I came back and started to work [in the family business] the next day. Do you still use your French from time to time? Pas du tout [not at all]. Have you ever had a job outside of the family business? I worked as a gardener in college for a while, and I was the editor of [Stanford’s] humor magazine, the Stanford Chaparral. It’s like the Harvard Lampoon, but very funny. I also worked for Cushman & Wakefield in Oakland one summer. What’s it like to work so closely with your dad? When it’s good, it’s great. When it’s bad, it’s really bad. We got along fantastically for many years, and there was a little rough spot with Steiner Studios opening and me dividing my attention between the real estate and the studios. [The studios] were really my baby. But we’ve gotten back to our old thing, and I can rely on him for anything, and he can rely on me for anything. You got divorced in 2000. Do you still have a friendly relationship with your ex-wife? I got married in ’88 and separated in ’99. It was a five-anda-half-year divorce. It was grueling, [but] I get along fine with my ex. How old are your kids? My kids are 22, 18 and almost 17. Two boys and a girl. My son George, the 22-year-old, started his own business called TheHockeyNetwork.com. My son Neil just started at Middlebury College and my daughter Isabel is at boarding school. We named the commissary [at Steiner Studios] after her, Café Isabel. Are you dating anyone? Pass. What are your hobbies? Photography. I like [taking pictures of ] the urban, industrial landscape. I also play poker once a month with my high school friends. It ranges from Indian No Peekie to Seven Card Stud to Guts. I don’t know if you’ve played Indian No Peekie — you don’t look at your cards, you just hold them up like a headdress and you’re laughing at everyone else. Are you a film buff? I like a great film like I like a good novel. My dream some day would be to write a novel and make it into a movie and direct it. I heard you also collect art. I like weird, disturbing or strange art. I have art by Gary Panter, Suzan Pitt and Jane Dixon. I get a lot of pleasure from looking at it. But I don’t spend [a lot of money on art]. I’m cheap. Do you still get starstruck when you run into celebrities at Steiner Studios? Rarely. [But] I recently saw Paul Simon at a political function and I was totally starstruck. I left him alone. I try to stay out of [celebrities’] way — they come to Steiner Studios so they don’t have to meet people like me. You’re well-known in the industry for dressing casually. Do you not like suits? I try to avoid wearing suits or blazers. I like to be comfortable. Sometimes I go for a big real estate meeting in a Midtown building and they think I’m the bike messenger, which is totally okay with me. By Katherine Clarke

PHOTOGRAPHS FOR THE REAL DEAL BY MARC SCRIVO00 www.TheRealDeal.com July 2006

TheRenovated Home T H E R E N O V A T E D H O M E .C O M

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New Year. New Direction. Are You Ready For Something New? Dianne Weston

2012 Listing Volume: Over $100M

Photography by: Adrian Jones

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Peter Acocella

“Deadly Serious... About Real Estate”

Ivan Prochko

iGroup Founder, Luxury Loft Authority

Julie Kang 10-year Industry Veteran

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11/29/12 3:24 PM