The Real Deal August 2012 by The Real Deal

Summer in the city — poolside

Nasty divorce battles, and who gets the house

Romney’s real estate

Inside BofA’s big NYC lending bets

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Getting a listing video to go viral

THEREALDEAL

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Tallying who won at 666 Fifth Ave. Ranking winners, losers as record deal clears hurdle

BY ADAM PINCUS Vornado’s pending deal to buy the last part of the retail condo at 666 Fifth Avenue for $707 million caps SPECIAL REPORT off a tumultuous few years for investors at the tower, where the Kushners set a record in 2007 with their $1.8 billion purchase. This month, TRD looks at how much each investor walked away with.

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

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Caught in the web As NYC ﬁrms pump money into websites, what’s working and what’s not

Big demand for small Manhattan rentals New York’s frenzied rental market is seeing big price increases for small apartments. Rent hikes for studios are far outpacing those for larger units. See page 14.

Where NYC’s moguls weekend A look at the second homes of city real estate players

Presidential politics delays ofﬁce leasing

BY KATHERINE CLARKE In the summer, most NYC real estate bigwigs leave the city’s blistering heat behind. Inside, TRD looks at the second homes of players from Elizabeth Stribling and Dottie Herman to Jeff Sutton and John CatsiSee story on page 38 matidis.

What will going public mean for local brokerages?

BY ADAM PINCUS Realogy’s plan to go public could have big ramiﬁcations for the ﬁrms it owns here, including Corcoran and Citi Habitats. Some say it will mean more cost-cutting, while others argue that it’ll translate into more resources for expansion. See story on page 40

Overall home sales have increased in Long Island, Westchester and Fairﬁeld County, but luxury sales there have declined. See page 64.

AT A GLANCE

See story on page 43

Realogy’s IPO

FACT

While Manhattan ofﬁce leasing has been stuck in neutral for a while, real estate pros say the situation is intensifying as tenants hold off on making decisions until after the presidential election. See page 22.

BY LEIGH KAMPING-CARDER digital brands. But now, firms are grappling with how Consumers have become more demanding when it best to quantify the benefits of these major investcomes to what they expect when searching for prop- ments of time and money — and how to size up their erties online. In response, many of rivals’ efforts. New York City’s residential firms This month, TRD looks at how EATURE TORY have overhauled their websites in firms are navigating the challenges recent years, with the goal of attracting more eye- of Web 2.0. We also analyzed one firm’s award-winballs to listings and boosting the amount of business ning website to see what works and what doesn’t, and their agents do. got our smartphones out to review residential apps. But these endeavors don’t come cheap: Some bro- See which ones worked best. kerages have spent up to seven figures remaking their See story on page 32

Baccarat New York doesn’t sparkle The planned $400 million Baccarat New York, named after the famed crystal, may be a case of branding gone awry, says critic James Gardner. The Skidmore Owings & Merrill-designed hotel-condo is less sparkling than its name suggests, he says. See page 62. Baccarat rendering

Top of Hamptons heap Young gun As market stabilizes, East End ﬁrms get bigger

Harald Grant on dating women his own age See page 106.

BY LEIGH KAMPING-CARDER It’s been a rocky few years for the real estate market on Long Island’s East End. But now that the worst of the downturn has passed, the region’s major residential firms are actuBiggest East End Firms ally increasing their agent headC ORCORAN : 327 agents counts. This year, the 10 biggest firms in the Hamptons, Shelter IsE LLIMAN : 326 agents land and the North Fork had 1,248 B ROWN H ARRIS S TEVENS : 132 agents agents — up 8.6 percent from last T OWN & C OUNTRY : 119 agents year, according to TRD’s annual S AUNDERS & A SSOCIATES : 88 agents ranking of East End firms. But so far, the 10 most expensive sales of 2012 — which, of course, involved boldface New York names — don’t compare to prices seen last year. See story on page 50

in spotlight Developer Michael Stern racks up condo projects BY KATHERINE CLARKE Michael Stern was only 29 when he bought the former Verizon building in Chelsea. Now condos at the project, dubbed Walker Tower, are selling fast. But Stern’s JDS Development is just getting warmed up: It’s planning another condo and a big mixed-use project, both in the West 50s, plus several other buildings. See story on page 58

Agent health hazards A look at how the Supreme Court’s health-care ruling affects brokers, who work as independent contractors. See page 16.

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Highlights SPACE LIFT

A U G U S T

2 0 1 2

Real estate’s “micro” wave

The health of the industry

Poolside real estate — in the city

Mayor Bloomberg, brokers see big demand for small residential units.

What does the Affordable Care Act mean for NYC’s real estate brokers and agents? A roundup of where to swim in NYC if you can’t escape to the beach.

The McCarren Park Pool reopened this summer after a 30-month renovation.

If it’s being built, Richard Wood... Will come. And the Plaza Construction president has the mementos in his Midtown Manhattan ofﬁce to prove it.

Plaza Construction’s Richard Wood

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

Transforming design into reality

In their words...

For richer or for poorer

Tracing Romney’s real estate TRD breaks down the presidential candidate’s real estate ties, from his numerous homes to his investments.

NYU’s expansion plan: It’s a go

A “taxing” issue

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The school wins ﬁnal approval for its controversial and massive proposal in Greenwich Village.

A new 3.8 percent surtax on investment income for high earners could impact some real estate sales.

28 Mitt Romney reportedly has $18 million in real estate holdings.

Caught in the ’Net

Apps on the map

8 August 2012 www.TheRealDeal.com

In wake of the TomKat split, a look at the real estate in some of NYC’s biggest divorces.

Tom Cruise and Katie Holmes aren’t the only ones dividing mega real estate holdings due to divorce.

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

Architect: Epstein Global, FXFowle Architects Photographer: Enclos

This month’s funniest and most insightful real estate–related comments.

NYC ﬁrms pour time and capital into revamping websites, but must grapple with how to quantify the results.

TRD gets out its smartphone and reviews ﬁve residential real estate mobile applications.

Highlights continued lush getaways 38 Moguls’ A peak inside the vacation homes

of some of NYC’s best-known real estate players.

LAWN AND ORDER

Realogy 40 Reinventing A look at what the giant company’s pending IPO will mean for its NYC brokerages.

666 Fifth Avenue

The 666 Fifth Avenue scorecard

From top: Haim Chera; Jared Kushner

Now that Vornado has purchased the trophy’s remaining retail condo for $707 million, a look at who won and who lost.

of the Hamptons heap 50 Top TRD’s annual ranking of brokerages shows a jump in the number of agents employed on the East End.

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

Bank of America’s Steven Kenny has put the lender’s name behind big NYC projects when others have shied away. Find out why.

Steven Kenny heads commercial real estate banking for New York and New Jersey at BofA.

62 Branding gone too far?

A rendering of the Baccarat New York

The planned Baccarat New York hotel may be a marketing overreach, critic James Gardner argues.

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

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

Calendar of Events Check out this month’s activities.

100

Developments Updates

105

Rowing for real estate

Braving the East River in a kayak to see the skyline with new eyes.

Grant’s 106 Harald Never Never Land

10 August 2012 www.TheRealDeal.com

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

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

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

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

Commercial Market Report

Structural steel Right for any application

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Residential Market Report

The top Hamptons broker talks about wooing billionaires, trophy girlfriends and his casual dress.

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

104

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

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We Heard A lighter look at industry buzz.

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THE REAL DEAL N E W YO R K R E A L E S T A T 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 ART DIRECTORS Ronald Gross, Derek Zahedi SENIOR REPORTER Adam Pincus REPORTERS Leigh Kamping-Carder, Katherine Clarke WRITERS C.J. Hughes, David Jones, Adam Piore PRODUCTION MANAGER & RESEARCHER Linden Lim WEB PRODUCER Adam Fusfeld EDITORIAL ASSISTANTS Guelda Voien, Zachary Kussin ILLUSTRATORS David Cole, Yishai Minkin PHOTOGRAPHERS Chris Martin, Marc Scrivo DIRECTOR OF MARKETING OPERATIONS Yoav Barilan ASSOCIATE SALES DIRECTOR Ross Fox ADVERTISING SALES Eran Evron, Abi Laoshe, Robert Stearns, Michael Stern WEBMASTER Nima Negahban ACCOUNT COORDINATOR Kenneth Cyrus ADMINISTRATOR Junaid Zahid CIRCULATION Paul Destanko DISTRIBUTION Mitchell Newman, Michael Presto VIDEOGRAPHER Toni Comas 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 © 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.

12 August 2012 www.TheRealDeal.com

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EDITOR’S NOTE The trials of owning a second home

or the past month, we’ve been focusing on summer vacations. Not ours, mind you, but those of very rich people and the houses they inhabit during those vacations.

We have cover stories in this issue on the getaway homes of real estate moguls,

a package on the top Hamptons residential sales of this year, a look at the biggest brokerages on the East End and a story on Mitt Romney’s real estate holdings (mostly vacation homes). For those unfortunate souls who can’t get out of the city, we also have a story devoted to NYC pools (see page 18). If you are one of those people sticking around the city, don’t get upset: There are lots of “rich people problems” that come with owning a second home. (Full disclosure: I am renting a modest home on the North Fork for part of the summer.) The first rich-person problem, of course, is the pain of getting there. Hamptons traffic is notoriously bad. Sure, you can spend a few thousand dollars on a helicopter, but after a while that can get boring. Real estate developer and hotelier Andre Balazs (who owns the Sunset Beach hotel and restaurant on Shelter Island) has a more stylish solution: He takes his seaplane from East 23rd Street in Manhattan, flying low over the water out to the East End, then touches down gently 75 feet from shore, rolls up his pants and wades his way to the Shelter Island beach. Getting around in such a fashion, I guess it’s not surprising that Balazs — who co-owns a seaplane company — also has a hip take on real estate. A bigger rich-person problem is deciding which home to go to in the first place. On page 28, we look at Mitt Romney’s real estate. The Republican presidential hopeful has had a lot of choices of where to vacation over the years — with homes in California,

Looking at the challenges the überwealthy face — from which vacation home to stay at to losing track of beach books. New Hampshire, Utah and Ontario, Canada. I’m sure all of his homes are nice and that just being home is a luxury when he’s normally out on the road campaigning — as long as he remembers not to leave that dog strapped to the top of the campaign bus. (That now-famous Romney gaffe was like a scene out of the Chevy Chase movie “National Lampoon’s Vacation.” And pundits are now saying that Romney has followed that up with his own version of “European Vacation” after his Olympics gaffe in London.) Another serious problem for those with vacation homes is that you have to buy two of everything. Two copies of every book you’re reading, two pairs of eyeglasses, two of each item in your wardrobe; otherwise, the moment you need something, you realize it’s in the other house. Surely, a personal concierge company could launch a service that replicates the contents of your primary residence for your vacation home as part of its business plan. (Whoever actually does this ﬁrst can send me a check at the address listed on the masthead.) Finally, having a personal driver is sometimes a pain. There is lots of coordination that has to happen and sometimes a cab is easier. I ran into World Trade Center developer Larry Silverstein and his wife at the baggage claim at Newark

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International Airport last year as they were waiting for a car, which got held up in

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trafﬁc. I hopped on the taxi-stand line and left in a second. I felt terrible. Obviously, being enormously wealthy can be tough. But enough of these (faux) summertime blues. On a more serious note, elsewhere in the issue, we have a package on what real estate brokerage ﬁrms are doing right — and wrong — online, in terms of luring clients. We also have a story on 666 Fifth

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Avenue, which the Kushners bought at the height of the market for a record $1.8 billion. It looked like a dicey deal for a while, but we detail the turnaround and estimate what each investor earned. We also look at the landscape for residential brokers — who, of course, are classiﬁed as independent contractors — when it comes to health insurance, and how things might change as a result of the Supreme Court’s big health care decision. Mitt

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Romney might disagree, but it seems like you shouldn’t need to be a very rich person to see a doctor when you get sick. EQUAL HOUSING

OPPORTUNITY

Stuart Elliott www.TheRealDeal.com August 2012 13

RE S I D E N T I A L MA R K E T

BY LEIGH KAMPING-CARDER ew York City is famous for its cramped — and pricey — living spaces. That’s truer than ever this summer, with the busy rental market continuing its frenzied pace. But tenants looking for smaller units are feeling the worst of the pain, as rent increases for studios and one-bedrooms outpace the market overall, according to a Prudential Douglas

The “micro”wave

In the Manhattan rental market, big demand for small units

Elliman quarterly market report released last month. In fact, in the second quarter of 2012, rents for these small homes were at their highest levels in at least four years, according to appraiser Jonathan Miller, who prepared the Elliman report. In New York City, there’s always demand for these entrylevel apartments, which are popular with students, early career professionals and pied-à-terre

seekers. And while studios and one-bedrooms dominate the rental stock in Manhattan — making up 70 percent of rental transactions in the second quarter, according to the Elliman report — there aren’t enough of them to go around. Mayor Michael Bloomberg recently cited statistics showing that there are 1 million studio and one-bedroom apartments in New York City, and 1.8 million one- and two-person households.

In the second quarter of 2012, rents for these small homes were at their highest levels in at least four years. While demand is always highest in the summer, it seems to be particularly intense this year, brokers said. Some renters may be downsizing after getting

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hit with lease renewals lacking the rent breaks and concessions that became common during the recession, experts said. Others may be unable to secure mortgages to buy apartments in the tight lending environment. The median rent for a Manhattan home in the second quarter of 2012 rose 7.9 percent year-over-year, to $3,125, the Elliman report said. But the median rent for studios rose nearly twice as much, by 15.4 percent to $2,395 per month, nearing the peak established in the second quarter of 2008. For one-bedrooms, the median rent rose 8.5 percent to $3,250, tying records set in the third quarters of 2007 and 2008. Whatever the reason, demand has gotten so ﬁerce that Bloomberg last month proposed his own plan to meet the need for entry-level apartments: “micro” units. The city’s current zoning regulations require newly built apartments to measure at least 400 square feet. Promising to waive these rules, the mayor invited developers to submit plans for a Kips Bay rental building where at least three-quarters of the units would be only about 300 square feet in size. The competition has provoked a vociferous response, both from average New Yorkers and real estate industry insiders. Author Fran Lebowitz decried the mayor’s suggestion that renters make do with even less space. “There is a reason there are laws against apartments that are too small,” she said to the audience at a book launch for a compilation of essays by NYU professors last month. But Steven Spinola, president of the Real Estate Board of New York, said the initiative could become “one of the more enduring aspects of the Mayor’s housing legacy,” by addressing New York City’s persistent housing shortage. Politics aside, brokers said Continued on page 93

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The health of the industry What does the Affordable Care Act mean for brokers? BY JAKE MOONEY ew York City real estate agents have long been classiﬁed as independent contractors rather than employees of the ﬁrms they work for. But since the U.S. Supreme Court ruled in late June in favor of the Affordable Care Act, President Obama’s health-care reform, that distinction has become more crucial than ever. The law’s much-discussed “individual mandate,” slated to

take effect in 2014, will require all Americans to have health insurance or pay a fine. It also requires businesses with more than 50 employees to provide coverage or pay a similar fee — but while full-time employees of brokerages count toward that number, brokers don’t. The Court’s decision, then, will have significant ramifications for the brokerage community in New York City. Indeed, going without insurance, as many agents cur-

rently do, will be much more difﬁcult come 2014. The real estate industry here is sorting through exactly what the law will mean for brokers and ﬁrms, and what sorts of new options for buying insurance will be made available to agents. And the presidential and congressional elections this fall could determine whether, and in what form, the law survives. “Sadly, it’s not all really set yet,” said Diane Lazowsky, a Manhat-

tan insurance broker at the ﬁrm Professional Group Marketing. “Even the insurance companies are not really sure yet.” Under the current system, without employer-provided insurance, agents who aren’t covered by their spouses’ plans can either pay steep premiums for individual coverage or choose to go without insurance. “It’s been very difﬁcult and expensive for real estate agents to get health insurance,” said Klara Madlin, owner of Manhattan brokerage Klara Madlin Real Estate, which has 15 sales brokers. Madlin said she personally paid $550 a month for individual

coverage last year, and her premiums were slated to rise by 17 percent. (Luckily, Madlin is now old enough to qualify for Medicare, which brings her costs down to about $200 a month. “The only good thing, other than halfprice transit, about getting old,” she joked.) She said her agents have similar individual coverage plans.

Assessing the options There are no figures tracking the number of uninsured brokers in New York — those who will have to buy insurance or pay the fine. But there are 51,805 real estate brokers and salespeople in the five boroughs, according to the New York Department of State. The National Association of Realtors says that nationwide, about 28 percent of its members go without health insurance. Applied to New York, that means there could be 14,000 brokers in the city without coverage. One option for New York City brokers who want coverage is to buy health insurance through the Real Estate Board of New York, the industry’s largest trade association. REBNY said more than 4,800 of its members — both residential and commercial brokers — are insured through the various plans the board offers. The discounted group plans are provided by such carriers as Oxford, Empire Blue Cross and Blue Shield, Aetna and EmblemHealth. Prices range from $246 per month for individual plans with very high deductibles to well over $2,000 per month for family coverage. A spokesperson for REBNY said because insurers haven’t yet fully modified their plans to account for the new law, the range of options for customers beginning in 2014 is unclear. As such, she said, the board hasn’t yet seen an increase in enrollment in its plans. Other options for real estate salespeople include an association plan — typically with a high deductible — like those available through the Freelancers Union or Einsurance.com. There is also a low-cost, bare-bones plan available through the National Association of Realtors — though the association cautions that it is no substitute for a major medical plan, which covers large expenses. Marcia Salkin, managing director of legislative policy at NAR, said that under the new law, there Continued on page 94

16 August 2012 www.TheRealDeal.com

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7/26/12 4:40 PM

By the NumBers

Summer in the city — poolside Compiled by Russell Steinberg

Public swimming

Reviving McCarren The 1.1 million gallon McCarren Park Pool on the Greenpoint-Williamsburg border reopened this summer after a 30-month, $50 million renovation. Originally opened in 1936 and bankrolled by the Works Progress Administration during the Great Depression, it was shut down in 1984 after falling into disre disrepair. (New York Times)

For New Yorkers who can’t escape to the beach this month, hitting up one of NYC’s pools may be a next-best option. Indeed, the city runs 34 outdoor pools, 12 indoor pools and 19 smaller, portable “minipools.” They are open from late June through Labor Day. Not surprisingly, Manhattan has more pools than any other borough, with 19. (NYC Depart Department of Parks and Recreation)

A rough start

The McCarren Park Pool, which accommodates 1,500 swimmers at a time, had a controversial opening. Several fIghts broke out and arrests fanned fears that the pool might create unrest among different groups in the rapidly gentrifying neighborhood, where new condos have sprouted in recent years. (New York Times)

Park Avenue pool party Neighbors aren’t happy about the recent parties atop the pricey Gansevoort Park Avenue, the East 29th Street hotel, where the cheapest rooms typically go for north of $350 per night. Building code allows 54 people on the roof, but neighbors say there are sometimes up to 300. The loud music, neighbors say, literally rattles the windows of nearby buildings. (New York Post)

Swimming in the “Dead Sea” The new Lower East Side condo conversion at 371 Madison Street has dubbed its Olympic-size saltwater pool the “Dead Sea Pool.” The 110-unit, six-story condo, which has several features aimed to appeal to Orthodox Jewish buyers, has single-sex swimming hours. Sales started at the building, which was developed by Elliman broker Michael Bolla and the Sung family, in early July. Prices start at around $500,000. (New York Times)

18 August 2012 www.TheRealDeal.com

King-sized Pool The King & Grove hotel, which opened last year in Williamsburg, is home to a saltwater swimming pool with 4,800 square feet of deck space, according to the hotel’s website. Guests can use the pool on a first-come, first-serve basis, while non-guests are charged a $45 fee. Standard rooms go for between $250 and $300 per night.

Pop-up pool

The city installed a pop-up pool at PIER 2 in Brooklyn Bridge Park last month. It will be open through Labor Day. The pool, which cost $700,000 to build, holds 60 people and is 50 feet long and 3.5 feet deep. The free pool also has a man-made beach with 25 lounge chairs, a deck, 10 picnic tables, concession stand and restrooms. (WNYC)

Poolside reading The Sapir Organization’s Trump SoHo — where hotel rooms often start between $400 and $500 per night, according to the website — is providing guests at the buildbuild ing’s 6,000-square-foot -square-foot pool with a unique amenity. Poolgoers can now borrow a Kindle Touch loaded with magazines to read poolside, the hotel tweeted.

MD_RD_august_2012_v2a_mccd_Layout 1 7/26/12 10:18 AM Page 1

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20 August 2012 www.TheRealDeal.com

PHOTOGRAPH FOR THE REAL DEAL BY CHRIS MARTIN

Wood is a big Yankees fan; this picture of Yankees legends Babe Ruth and Yogi Berra has a certificate of authenticity. Since construction is “full of characters,” Wood says, he “always thought Yogi Berra would have had a field day in the construction industry — his Yogiisms would have been priceless.”

This sledgehammer is from the 2003 groundbreaking of the Elevated Acre at 55 Water Street. The public park, which Plaza constructed, is located 40 feet in the air.

Wood purchased this block of shredded U.S. currency at the Federal Reserve in Lower Manhattan seven or eight years ago, paying “under $10” for the $100,000 worth of bills. He uses it as a doorstop.

This anchor is mounted on a piece of wood from the Intrepid, the famed World War II aircraft carrier. It was a gift from the Intrepid museum in recognition of Wood’s charity work with the Fishers, who played a role in bringing the Intrepid to Manhattan.

the

Desk

WooD

This clock, originally from a bank safe, was given to Wood as a gift by the General Society of Mechanics & Tradesmen. Wood helped the society raise money to renovate its building.

At a charity auction, Wood unintentionally ended up with a truck that had appeared on the reality show “American Chopper.” “I was trying to support [the charity] and people weren’t really bidding, so I figured I would jump in … and I got stuck,” Wood explains. He eventually gave the truck to a coworker, but kept this box, which came with it.

In the military, officers hand out coins to fellow soldiers they want to recognize. Though not a veteran himself, Wood received these coins from veterans he knows through charities. One was given to him by an Iwo Jima survivor.

This plaque signified the 2007 topping out of SJP Properties’ office tower 11 Times Square, which Plaza built with a “core first” technique that had never before been implemented in New York City. Wood is personal friends with SJP’s Steve Pozycki.

In Wood’s view, the level is not the most important construction tool; in fact, “all you need is a puddle of water” to tell if a space is flat, he says. But this antique level was a gift from a senior manager at Plaza. “It represents, not necessarily quality,” he chuckles, but “the pursuit of quality.”

or the past 15 years, Richard Wood has been the president of Plaza Construction , a national company headquartered at 1065 Avenue of the Americas in Manhattan. One of the largest construction firms in New York City, Plaza has worked with developers like Rose Associates, Jack Resnick & Sons, the Related Companies, Milstein Properties and SJP Properties. Along with its sister company, Fisher Brothers, Plaza is involved in many of the city’s most high-profile projects, including 11 Times Square and the $1.4 billion Fulton Transit Center planned for Lower Manhattan. But Wood’s office is full of reminders of his pursuits outside of construction. B y G uelda V oien

A set of keys from the Bronx Detention Center, which Plaza demolished to make way for the new Bronx Terminal Market. Wood discovered them about five years ago while touring the site just before demolition. “I opened up a box,” he says, “and it held all the keys to the cells.”

of:RichARD

This piece of aluminum is inscribed with the words Not if we can but when we do, a piece of advice Wood gave an employee who was sent to China to track down a missing shipment of aluminum. The employee gave it to Wood after he secured the shipment.

This photo, which shows two soldiers helping an injured comrade out of a building, reminds Wood “that we are living a pretty cushy life.”

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Presidential politics delay leasing Real estate pros say upcoming election is making tenants more hesitant to pull the trigger on deals BY ADAM PINCUS hile the Manhattan office-leasing market has been stuck in neutral all summer and has been dealing with Wall Street’s shrinking footprint, real estate professionals say it’s also suffering because of the uncertain outcome surrounding November’s presidential election. Marc Holliday, CEO of the city’s largest office landlord SL Green Realty, told analysts late last month that Manhattan tenants are holding off on leasing decisions until voters decide whether to give President Barack Obama four more years in the White House or replace him with GOP contender Mitt Romney, the former governor of Massachusetts. That is, he said, despite growth in New York City office employment. “Tenants seem to be taking a more cautious approach right now, and I think this will remain the case, certainly for the next several months, until we clear the election,” Holliday said. Despite the broad sense of a stalled market, the overall Manhattan availability rate — which measures space available now or in the next 12 months — fell by 0.2 points last month to 10.3 percent in July, while the average asking rent ticked up by $0.25 per square foot to $54.95 at the same time, figures from commercial firm Cassidy Turley showed. Still, the Bloomberg administration also expects the office leasing market to remain weak. But it has an alternate reason for its thinking: the more efficient use of space. Indeed, the city’s Office of Management and Budget said in a report released at the end of last month that while the number of office workers rose by 93,000 over the last two years, the amount of available office space only fell by 9.3 million square feet. That came to about 100 square feet per person, “which is below the rule of thumb of 225 [to] 250 square feet per employee,” the report said. “Firms may be shifting their practice toward a more efficient use of office space, even as economic conditions improve,” it continued.

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Midtown tenants have been focusing on more efﬁcient use of space since the downturn. In one recent example, the large nonproﬁt Practising Law Institute [sic] inked a deal for around 69,000 square feet at Silverstein Properties’ 1177 Sixth Avenue last month. The organization — which

Manhattan ofﬁce stats AVAILABILITY RATE

AVG. ASKING RENT

July ’12 June ’12

Manhattan 10.3% 10.5%

$54.95 $54.70

July ’12 June ’12

Midtown 11.1% 11.2%

$62.74 $62.70

July ’12 June ’12

Midtown South 8.2% $46.42 8.6% $45.91 Downtown 10.4% 10.6%

$38.50 $38.28

Source: Cassidy Turley

provides continuing legal education for attorneys — signed a lease for space on floors two, three and four in the 921,637square-foot office tower located between 45th and 46th streets. (The lease was for around 11,000 square feet less than the nonprofit currently occupies.) A Jones Lang LaSalle team including Paul Glickman, Frank Doyle and Cynthia Wasserberger represented Silverstein. PLI was represented by Ira Schuman, Patrick Gardner, Howard Poretsky and David Goldstein, all of Studley. According to one industry source, the rent for PLI starts at $59 per square foot and rises to $71 per foot over the course of the 15-year lease. JLL did not respond to requests for comment. The PLI rent was just a bit below the average asking rent in Midtown in July, which was $62.74 per foot, up 4 cents from June. Victor Rubino, president of PLI, said the organization visited about 10 buildings in the late spring and selected the building in part because Silverstein configured the nonprofit’s space more efficiently on three floors instead of five. He declined to confirm the rental figures, but said rental payments start “in the $50s” and rise over time. He said the company is moving its staff from 80,000 square feet at SL Green’s 810 Second Avenue — where it’s been located since 1973. Shrinking the company footprint “was a motivating factor,” Rubino said. Citigroup is looking at a similar consolidation. Last month the bank put 238,021 Continued on page 93

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In their words...

The month’s funniest and most insightful comments on NYC real estate “Back in the day, if you were broke, you could still get by in New York. [And if] you had a million dollars — that was some money. Not today, man. You got a million dollars, that’s just the down payment.” Director Spike Lee (New York Magazine)

“The property is all about the animals who live here. We have raccoons, geese, deer, a family of ot otters — and a musk muskrat, who has a winter nest under the house, a spring and fall con condo on the island and a summer home near the waterfall.” “It begins at Penn Station. You grab a little breakfast and then you start boozing. I don’t want to get out there completely sober and everybody is already crunked up at the pool.” Wynn Mazey, a commercial broker at ABS Partners Real Estate, on taking an early Saturday morning train to the Hamptons. (New York Times)

Sandra Lee, in an Elle Décor feature on the Westchester home she shares with Gov. Andrew Cuomo.

“Obviously, this is not a Mount Vernon or a Monticello.” Zak Kneider, one of the Citi Habitats brokers listing the walk-up apartment at 142 West 109th Street where President Barack Obama once lived. (Wall Street Journal)

“I want to build some something that is environ environmentally forwardthinking. I’m not building a satellite dish so I can watch the Knicks game.” Actor Alec Baldwin on his plans to erect a 120-foot-tall wind turbine on his Amagansett property. (Wall Street Journal)

24 August 2012 www.TheRealDeal.com

“There is one similarity between cooking Swedish meatballs and making it in New York City: You need a lot of balls.” Prudential Douglas Elliman broker (and native Swede) Fredrik Eklund (Twitter)

“It sounds callous, but once the check clears, I don’t care what they do. I would be upset if it were the Francis Xavier massage parlor, but otherwise I am much more interested in what we can do to serve the blind community than what happens to this building.” Father John Sheehan, chairman of the board of the Xavier Society for the Blind, which is selling its building at 154 East 23rd Street. (Wall Street Journal)

“It’s costing the city $40 million to clean up the mess it made with Times Square’s butt-ugly pedestrian plazas.” New York Post columnist Steve Cuozzo, in a piece about Mayor Michael Bloomberg’s proposal to turn Vanderbilt Avenue into a pedestrian mall.

“Overheard at [Jonathan Adler headquarters]: ‘You guys, I am having an emergency. What color am I going to paint my kitchen?’ ” Designer Jonathan Adler (Twitter)

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RESIDENTIAL

For richer or for poorer

In the wake of TomKat split, TRD looks at the real estate involved in some of the city’s best-known divorces

Holmes and Cruise are only the latest in a long line of high-profile couples facing the BY KATHERINE CLARKE hen news broke last month that Katie Holmes had filed to divorce Tom question of who gets which home when ending a marriage. Divvying up real estate is among Cruise, the first round of speculation centered on what would happen to the most contentious issues couples face in a divorce, said Manhattan divorce lawyer Nancy their daughter, Suri. But questions about TomKat’s real estate holdings Chemtob. “You can’t replace that piece of property that you love,” she said. “It’s your home.” were not far behind. The celebrity couple, who were married in Not surprisingly, New York has played host to 2006, own extravagant homes in California, a slew of epic divorce battles over the years, Katie Holmes Tom Cruise New York and Telluride, Colo. Their holdwith multimillion-dollar apartments and ings include a 10,286-square-foot Bevertownhouses taking center stage. ly Hills estate with a tennis court, which And exclusive Manhattan co-ops they bought for $30.5 million, and an — which are not only pricey, but se8,100-square-foot brownstone at 42 lective — often result in the nastiest West 12th Street in Manhattan. The disputes, said matrimonial and family pair paid $15.1 million for it in April law attorney Ira Garr, who has repre2009, according to public records. sented high-profile clients such as Ivana Holmes vacated the brownstone early Trump. last month and rented an apartment in the Apartments in high-end co-ops often Chelsea Mercantile at 252 Seventh Avenue. represent “a high percentage of a person’s net worth,” Garr said. And homes like these are irThe actress is expected to get the couple’s 9,477square-foot property in Montecito, Calif., accordreplaceable, especially for spouses who would ing to the terms of the pair’s prenuptial agreement, likely not get co-op board approval on their own in a similar building, Garr said. some details of which have been leaked. At press This month, The Real Deal looks at some of the most contentime, it wasn’t clear who would get the Beverly Hills mansion or 42 West 12th Street the Manhattan brownstone. tious past and present divorces, and who went home to what.

The Rybolovlevs and the Nazarbayevs

s The Real Deal has reported, money from the former Soviet republics has ﬂooded into Manhattan real estate recently. And two high-proﬁle divorce battles are currently playing out among those wealthy purchasers. Left: Dmitry Rybolovlev (right) with his estranged wife Elena. Below: The $88 million penthouse at 15 Central Park West.

Kazakhstan, sued Maria and his step-son in April, alleging that they conspired to steal his 4,000-square-foot, $20 million apartment at the Plaza. The two tricked him into giving them power of attorney by presenting it to him as “being different from what it really was,” according to Bolat’s lawyer, New York–based attorney John Snyder. Maria’s Brooklyn-based attorney, Russ Nazrisho, ﬁled a response to the complaint last month, denying the majority of the allegations. And in a recent interview with the New York Post, Maria denied all of the allegations against her and her son, and said she and Bolat were still married and in love. The unit is currently on the rental market, listed for $68,000 a month with Prudential Douglas Elliman’s Efraim Nasirov.

A Russian billionaire Dmitry Rybolovlev is one of them. He made headlines this year with his record-breaking $88 million purchase of Sandy Weill’s 15 Central Park West penthouse. The deal raised even more eyebrows when his wife, Elena, sued him in March, claiming that he bought the apartment to hide assets from her during their divorce proceedings. The lawsuit also alleges that Dmitry used trusts to make other pricey purchases — buying a Palm Beach mansion, Maison de L’Amitie, for $95 million in 2008 from Donald Trump, for example, as well as an interest in a Monaco soccer club — to tie up his assets and keep the money from her. The case is ongoing. Meanwhile, Kazakh millionaire Bolat Nazarbayev and his wife Maria are going through their own bitter real estate divorce battle. Bolat, the brother of the president of 26 August 2012 www.TheRealDeal.com

Simon and Chana Taub

n epic six-year divorce battle between sweater mogul Simon Taub and his wife, Chana, came to a head in 2007, when the couple installed a court-ordered Sheetrock divider in their Borough Park brownstone after both refused to move out. Simon Taub had renovated From left: Simon Taub, Chana Taub. Below: the Taubs’ Borough Park brownstone on 49th Street.

the 49th Street home — which has five bedrooms and two garages — in the 1980s, when the couple was first married. When Chana filed for divorce in 2005, both continued living in the home as they duked it out in court. The Daily News nicknamed the high-profile case “The War of the Roses,” in reference to the 1989 movie starring Michael Douglas and Kathleen Turner. The Taubs reportedly spent more on attorney and litigation fees than the house is worth, and nearly had to foreclose on the property. In 2011, when a divorce settlement was finally reached, a judge ruled that the house must be sold and the profits split. Chana has filed several appeals, all of which have been struck down, according to Simon’s Manhattan-based attorney, Abe Konstam. At press-time, the home had not yet been sold, according to Konstam. Neil Lovino, Chana’s attorney, was not available for comment.

Nicholas and Cordula Bartha

n July 2006, Dr. Nicholas Bartha famously committed suicide by blowing up his townhouse at 34 East 62nd Street, while in the midst of a messy divorce from wife Cordula. The incident came after a court ordered that the house, which had been appraised at $5 million, be The site of Nicholas Bartha’s townsold and that Cordula re- house at 34 East 62nd Street after ceive half of the proceeds. the explosion. Needless to say, Nicholas — whose family purchased the house in 1980 for $395,000 — did not take the news well. Garr, who represented Nicholas until shortly before the explosion, recalled that the doctor’s “work and his house were his whole life.” After his death, Russian developer Janna Bullock purwww.TheRealDeal.com March 2012 00

RESIDENTIAL chased the vacant lot for $8.35 million, according to listings aggregator StreetEasy. She is planning a new-construction, $40 million townhouse there, according to listing broker Lisa Verdi of Sotheby’s International Realty. Construction on the new townhouse will begin once a buyer is found, Verdi said. Cordula, who initiated the divorce in 2001, did not immediately respond to a request for comment.

Nelson and Tod Rockefeller

n 1961, New York Governor Nelson Rockefeller and his wife, Mary “Tod” Rockefeller, sent shock waves through the city when they announced their separation. Their subsequent divorce, and the governor’s speedy second marriage to Margaretta “Happy” Murphy, is said to have doomed his later attempts to win the Republican presidential nomination. (He later served as U.S. vice president under Gerald Ford, however.) Despite their scandalous divorce, Nelson and Tod didn’t stray far from one another. Tod kept the top two floors of the couple’s triplex at exclusive co-op 810 Fifth Avenue, while Nelson remained on the first floor. The two had purchased the apartment in the 1930s, eventually expanding it into a 30-room triplex by buying the floors above and below. Nelson hired modern architect Wallace Harrison to renovate the apartment and commissioned avant-garde designer Jean-Michel Frank to fill the 47-foot-long oval living room with cutting-edge furniture and art, including murals by Matisse and Leger. The governor reportedly considered the apartment home, so much so that he didn’t move out after his divorce. In the split, Tod received the top two floors — including a 1,200-square-foot wraparound terrace — and he kept the 12th floor, which contained the oval living room. When Nelson and Happy were married, they stayed on the 12th floor and expanded it by purchasing an adjacent apartment in a new building going up next door, at 812 Fifth Avenue. A half-flight of indoor stairs was installed to bridge the gap between the two buildings. After Nelson’s death in 1979, Happy separated the units and lived on the 812 Fifth side, selling the 810 Fifth apartment. The current owner has listed it for $27.5 million with Kirk Henckels of Stribling & Associates. Henckels said the 810 Fifth spread has exceptional views. “It’s extremely rare to find a preeminent prewar co-op on Fifth with big picture windows over the park,” he said. Left: Nelson Rockefeller, former governor of New York, and his first wife, Mary “Tod” Rockefeller. Below: The Rockefeller apartment at 810 Fifth Avenue.

Michael and Susan Bloomberg

nlike some other high-profile breakups, the 1993 divorce of New York City Mayor Michael Bloomberg and his wife, Susan, was amicable. So amicable, in fact, that when the pair split after 17 years of marriage, they both continued to live, with their daughters, in the family’s fivestory limestone townhouse at 17 East 79th Street. Then, in 2002, the mayor built a four-bedroom Colonial farmhouse for his ex-wife on a 20-acre horse farm in Westchester County’s North Salem. The entire Bloomberg clan, including the mayor’s longtime girlfriend, Diana Taylor, reportedly celebrates Thanksgiving together on the farm, called Gotham North. Though Susan reportedly now lives primarily in North Salem, she also maintains a place in the city — with hizzoner’s help. In 2006, she purchased a five-bedroom apartment in the André Balazs–designed condo One Kenmare Square, then sold it in 2011 for $11.5 million. While she was

R waiting for the deal to close, however, her ex-husband reportedly gave her a bridge loan of $500,000 to buy a new downtown apartment, according to tax returns he released earlier this year. The mayor has a history of generosity when it comes to ex-partners: He also gifted a Park Avenue apartment

64 August 2012 www.TheRealDeal.com

Donald and Ivana Trump

eal estate mogul Donald Trump and his blonde bombshell wife, Ivana, were among the best-known couples of the 1980s. But Ivana, a former model who had three children with “the Donald,” ﬁled for divorce in 1991, amid rumors that her husband was cheating with actress and socialite Marla Maples. Ivana negotiated a settlement of approximately $20 million, according to Garr, who represented her in the divorce along with other attorneys. Donald also gave her a $10 million certiﬁed check soon after negotiations were completed, Garr said. That check was to be followed by another for $4 million once she moved out of the couple’s triplex apartment at Trump Tower on Fifth Avenue, where Donald still lives with his current wife, Melania. Ivana was also reportedly awarded the couple’s $10 mil-

Clockwise from top left: Mayor Michael Bloomberg; his ex-wife, Susan; and One Kenmare Square.

to girlfriend Mary Jane Salk when their relationship ended in 2000, according to news reports. He had bought the apartment earlier that year for $3.75 million. The mayor, of course, has no shortage of real estate. He and Taylor live primarily in his Upper East Side townhouse, which he has expanded over the years by acquiring four of the six apartments in the building next door, at 19 East 79th Street. He reportedly owns a total of 11 real estate properties, including a Bermuda mansion and a home in Vail, Colo. And last year, he paid $20 million for a mansion at 119 Whites Lane in Shinnecock Hills in the Hamptons.

Tod died in 1999. Her duplex was sold to record executive David Geffen, and then to Blackstone Group founder Pete Peterson, who paid $37.5 million for it in 2007. At the time, it was the second most expensive co-op sale in New York City history.

East 52nd Street. But Bruce fought back, and the ensuing battle for rights to the apartment spanned 18 years, according to news reports. In 2007, the State Court of Appeals granted Arlene permission to sell the 14-room co-op after the court rejected Bruce’s final challenge. Arlene then listed the unit for River House $15 million, though the price eventually dropped to $10.95 million. The unit, which has a paneled library and staff quarters, was taken off the market in 2010.

Bruce and Arlene Farkas

epartment store heir Bruce Farkas (uncle to real estate mogul Andrew Farkas) became a ﬁxture in New York headlines in the mid-1990s when Bruce’s wife Arlene ﬁled for divorce, claiming he was a bigamist. For over a decade, she said, Farkas — who had reportedly been her childhood sweetheart — had been illegally married to both her and his former secretary Dolores D’Oca. The double life was only uncovered, Arlene said, when his children with both women began attending the same Manhattan private school. In 1996, a court awarded Arlene the couple’s $3.2 million apartment at the exclusive River House co-op at 435

Clockwise from top left: Donald Trump, Ivana Trump and Donald Trump’s primary residence at Trump Tower on Fifth Avenue.

lion estate in Greenwich, Conn. She also received an apartment at Trump Plaza on Third Avenue between 61st and 62nd streets, and access for one month a year to the Trump family’s 118-room Mar-a-Lago mansion in Palm Beach (not to be confused with Maison de L’Amitie, the Palm Beach mansion that the Donald recently bought, renovated and sold to Rybolovlev). The Trumps’ daughter, Ivanka, mentioned the Mar-a-Lago mansion in a 2007 interview with Marie Claire, saying her bathroom, one of 33 in the house, had been decorated with tiles hand-painted by Walt Disney. The residence has since been converted into a private club and resort. TRD www.TheRealDeal.com August 2012 27

Romney’s real estate W

hen it comes to business, Republican presidential candidate Mitt Romney is primarily known for his time as CEO of the private equity firm Bain Capital. But he and his family also own a variety of real estate in both the U.S. and Canada. Ac-

La Jolla beach house

Mitt and Ann Romney regularly visit the vacation home in tony La Jolla, Calif., that they bought four years ago for $12 million, according to published reports. But some of the Romneys’ neighbors there have complained about their plans for extensive renovations. To accommodate their five children and 18 grandchildren, the Romneys want to expand the home from 3,000 square feet to 11,000.

cording to Forbes, Romney’s net worth of around $230 million includes an estimated $18 million in real estate. This month, The Real Deal took a closer look at Romney’s property investments and his connections to the industry. B y Guelda Voien

Stephen Ross

Romney sons

Of Romney’s five sons, three followed him to Harvard Business School. One of those sons, Matt Romney, is currently senior vice president of capital markets for Excel Trust, a San Diego–based, retail-focused REIT formed in 2009. He previously worked for Excel Realty Holdings, a subsidiary of the company. Excel recently purchased malls in Arizona and California, for $42 and $24 million, respectively. Another son, Josh Romney, formed the real estate development company Romney Ventures in 2005. The company is focused on developing properties in the west, but doesn’t appear to have closed a notable deal yet.

Romney’s La Jolla home

Matt Romney

Josh Romney

Lakeside New Hampshire house

Oaktree real estate venture

Mitt and Ann have another vacation home on Lake Winnipesaukee, in Wolfeboro, New Hampshire. They bought the three-story, six-bedroom home for about $3 million in 1997, according to Zillow, which estimates that the 11-acre estate is now worth about $10 million.

In 2010, Bain Capital formed a $1 billion investment fund with Oaktree Capital Management, a Los Angeles–based investment manager. The fund was formed to invest in furniture showrooms, which Bain and Oaktree reportedly believe are depressed due to the downturn, and thus ripe for opportunistic investment. So far, the fund has bought 18 furniture display properties in Las Vegas and North Carolina, according to reports.

Romney’s Wolfeboro home

Bain’s real estate partnership

Boston home

Romney left Bain in 1999 (or 2002, depending on which presidential campaign you believe). But Mitt and Ann still reportedly receive income from Bain funds. While it’s unclear which funds the Romneys have a stake in, Bain has recently partnered with several notable real estate players. In 2005, it joined forces with Vornado Realty Trust on a $5.7 billion deal to buy out Toys “R” Us. The same year, it teamed up with the Carlyle Group on a $2.4 billion deal to buy Dunkin’ Donuts. And in 2007, it paired with Carlyle again to buy out Home Depot for $8.5 billion, in one of the largest private equity transactions in history. Bain Capital did not respond to requests for comment.

For years, the Romneys’ primary residence was a seven-bedroom estate in Belmont, Mass., a quiet Boston suburb near the local temple of the Church of Jesus Christ of Latter-Day Saints. The colonial home, which the couple purchased for $890,000 in 1989, sits on 2.44 acres. But with their children grown, they decided to downsize in 2009, selling the house for a tidy profit of $3.5 million. The next year, they paid $895,000 for a 2,000-square-foot, twobedroom townhouse in the same town.

Mitt Romney

Real estate donors

Several high-profile real estate players are backing Romney’s White House bid. According to campaign finance records, Related Companies CEO Stephen Ross gave $100,000 to Restore Our Future, the PAC supporting Romney. Meanwhile, Starwood Capital Group CEO Barry Sternlicht hosted a fund-raiser for the GOP candidate at his Nantucket residence last month. Manhattan attorney Philip Rosen, cochair of the real estate practice at Weil, Gotshal & Manges, is currently on a trip to the United Kingdom, Israel and Poland with Romney’s finance committee. And Donald Trump endorsed Romney in May.

28 August 2012 www.TheRealDeal.com

Ontario cottage

Romney grew up in Michigan, but his family regularly spent summers in Ontario, Canada. The family’s cottage on Lake Huron is inside the gated Beach O’ Pines community, and was the destination of the infamous 1983 trip during which Romney strapped the family dog to the roof of his car. Mitt’s father, George Romney — the one-time governor of Michigan — purchased the cottage in 1950 for $31,900, published reports say, and the real estate remains in the Romney family.

Park City ski cabin

In 1999, Mitt and Ann bought a seven-bedroom ski cabin on 11 acres in Park City, Utah. At the time, Romney was head of the organizing committee for the 2002 Winter Olympics in nearby Salt Lake City. In 2009, Romney sold the house for slightly under the $5.25 million ask, according to Zillow.

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Health care and housing: A taxing issue for sellers

New 3.8 percent surtax on investment income for high earners could impact some real estate sales BY KENNETH HARNEY hen the Supreme Court upheld the health-care reform law on federal tax grounds, it restoked a housing issue that had been relatively quiet for the past year: The alleged 3.8 percent real estate tax on home sales beginning in 2013 that is buried away in the legislation. Immediately following enactment of the health-care law, waves of e-mails hit the Internet with ominous messages aimed at

you’re married ﬁling singly) — including some of their real estate transactions. But it’s not a transfer tax. Sellers with an income greater than these thresholds might not be hit with the 3.8 percent tax unless they have certain types of investment income targeted by the law, speciﬁcally dividends, interest, net capital gains and net rental income. Sellers whose income is solely earned — salary and other compensation derived from active

with the property — including settlement or closing costs, such as title insurance and legal fees — that increase the seller’s tax “basis” in order to lower capital gains. Since the health-care law targets capital gains, sellers could ﬁnd themselves exposed to the 3.8 percent levy on the sale of their home next year. Here’s an example provided by the tax staff at the National Association of Realtors. Say a seller has an adjustable gross in-

It will be more important than ever for sellers to pull together documentation on the capital improvements they’ve made and expenses connected with the property that increase the seller’s tax “basis” in order to lower capital gains. homeowners. A sample: “Did you know that if you sell your house after 2012 you will pay a 3.8 percent sales tax on it? When did this happen? It’s in the health care bill. Just thought you should know.” Once litigation challenging the law’s constitutionality surfaced in federal courts, the e-mail warnings subsided. But with the law scheduled to take effect less than six months from now, questions are being raised again: Is there really a 3.8 percent transfer tax on real estate coming in 2013? Does it preempt the existing $250,000 and $500,000 capital gains exclusions for single-filing and joint-filing home sellers as some e-mails have claimed? Here’s a quick primer. Yes, there is a new 3.8 percent surtax that takes effect Jan. 1 on certain investment income of upper-income individuals — those who have an adjusted gross income of more than $200,000 as a singlefiling taxpayer, or $250,000 for couples filing jointly ($125,000 if

participation in a business —have nothing to worry about as far as the new surtax. Where things can get a little complicated, however, is when a home sells for a substantial profit, and the seller’s adjusted gross income for the year exceeds the $200,000 or $250,000 thresholds. The good news: The surtax does not interfere with the current tax-free exclusion on the first $500,000 ( joint filers) or $250,000 (single filers) of gain sellers make on the sale of their principal home. Those exclusions have not changed. But any profits above those limits are subject to federal capital gains taxation and could also expose sellers to the new 3.8 percent surtax. Julian Block, a tax attorney in Larchmont, N.Y., and author of “The Home Seller’s Guide to Tax Savings,” said it will be more important than ever for sellers to pull together documentation on the capital improvements they’ve made and expenses connected

come (AGI) of $325,000, and sells a home at a $525,000 profit. Assuming they qualify, $500,000 of that gain is wiped off the slate for tax purposes. The $25,000 additional gain qualifies as net investment income under the healthcare law, giving them a revised AGI of $350,000. Since the law imposes the 3.8 percent surtax on the lesser of either the amount the revised AGI exceeds the $250,000 threshold for joint filers ($100,000 in this case) or the amount of the taxable gain ($25,000), the seller ends up owing a surtax of $950 ($25,000 times .038). The 3.8 percent levy can be confusing and can bite deeper when taxable capital gains are far larger or homeowners sell a vacation home or a piece of rental real estate, where all the profits could subject them to the investment surtax. Definitely talk to a tax professional for advice on specific situations. Kenneth Harney is a syndicated real estate columnist.

Become a fan of The Real Deal on Facebook:

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30 August 2012 www.TheRealDeal.com

�� City Planning proposes Midtown East rezoning The Department of City Planning last month unveiled a long-awaited plan for a widespread rezoning of Midtown East. The plan — aimed at encouraging modern ofﬁce development —would allow building owners to build as high as 900 feet in the area immediately surrounding Grand Central Terminal. Outside this core area, towers of 700 feet would be permitted. The plan must be approved by the City Council. “It is critical that East Midtown’s stature as one of the premier business addresses in the world be maintained over time,” said Amanda Burden City Planning Commission chairwoman Amanda Burden. “We are therefore pursuing ways to incentivize over the next 20 years the development of a handful of state-of-theart ofﬁce buildings.”

Albany to address tax increase Gov. Andrew Cuomo and state lawmakers last month said they plan to prevent a scheduled tax increase for owners of co-ops and condos in New York City, the New York Times reported. Homeowners complained when, in late June, lawmakers adjourned the year’s session without extending the city’s J-51 and tax abatement programs. But Cuomo, the Assembly and the Senate reached an agreement on “landmark” tax relief legislation last month that will be signed into law when legislators return to Albany later this year. Under the terms of the agreement, lawmakers would increase tax breaks for middleclass owners of condos and co-ops, but would phase out the breaks for owners whose apartments are not primary residences.

Hallets Point project could break ground this fall A $1 billion residential and retail project proposed for the Astoria waterfront has cleared its last hurdle and could break ground as early as this fall, the New York Daily News reported. In late June, the state legislature transferred ownership of a seven-acre site along the East River to the New York City Housing Authority, paving the way for the proposed Hallets Point project, which would create about 2,200 units of housing, a supermarket and a park. Developer Lincoln Equities Group wants to build a mix of condos and rentals (including some affordable housing units) in seven residential buildings, A rendering of the proposed Hallets Point project as well as a waterfront esplanade and bike paths, and possibly even a water taxi stop, DNAinfo reported. The City Council will have to approve the rezoning before the development can move further.

N.Y.U.’s expansion plan gets final approval New York University won final approval last month for its massive Greenwich Village expansion plan, the New York Times reported. By a 44-to-1 vote, the City Council approved a series of zoning amendments, permits and map changes that will allow the university to erect four buildings — housing classrooms, dorm rooms and office space — on a 12-block parcel south of Washington Square Park. Work is not slated to begin until 2014, and construction could last 20 years. Some 50 of the plan’s opponents watched the proceedings from a balcony overlooking the Council chamber. When the vote on the expansion neared, several opponents shouted out, “Shame!” After warnings, security cleared the balcony. Council speaker Christine Quinn said while she understood residents’ concerns, “I think this plan appropriately balances the need of an important university to grow and expand — which is good for our city — with the historic neighborhood it’s in.” Compiled by Russell Steinberg

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Caught in the’Net NAVIGATING

THE

WEB

NYC ﬁrms pour time and capital into revamping websites, but must grapple with how to quantify results

BY LEIGH KAMPING-CARDER his month, the Manhattan-based franchise of Keller Williams is set to launch a beta version of a new website that, for the first time, will connect its site to the vast online network of the national firm. Founded by Ilan Bracha, Keller Williams NYC had been the only one of the firm’s 700 offices to have a completely separate website, said Keller Williams NYC chief operating officer Zhann Jochinke. The old site — designed with a more Manhattan-friendly aesthetic and dominated by large photographs — had worked for about 15 months, he said. But now Keller Williams NYC is aiming to tap into the highly trafficked site of its Texas-based franchisor, as well as take advantage of the firm’s 50-person technology team, he said. And Keller Williams NYC is not the only local brokerage investing in a digital makeover. “Many of us launched our initial websites around the same time,” said Elizabeth Ann Kivlan, the director of marketing and business development at Stribling & Associates. “As technologies have changed, and consumers look at things in a different way, the time had come to present listings and our agents in a different manner.” Stribling spent “well over $1 million” on rebranding efforts launched in February that covered everything from new stationery to a restyled website, Kivlan said. The new site earned its designer, the digital agency Canvas, a Webby nomination in 2012. In theory, the rebranding will also earn the firm more business — more sellers listing properties with Stribling and more buyers connecting with those sellers. For its part, the in-house team at the national Keller Williams entity is investing untold hours in the Manhattan website’s overhaul: If the firm had to hire an outside developer, the project could cost hundreds of thousands of dollars, Jochinke estimated. As part of a transformation that established a separate commercial division, the New York and New Jersey brokerage DJK launched a new website last month that lets users connect to five multiple-listing services and a virtual office website. Phyllis Pezenik, DJK’s vice president of brokerage services, pegged the cost at tens of thousands of dollars. She expects the efforts will increase the firm’s real estate business by more than 30 percent. Additionally, Brown Harris Stevens revamped its site several months ago, furnishing its agent-profile pages with dapper new head shots. And in 2010, Prudential Douglas Elli32 August 2012 www.TheRealDeal.com

What was once considered the go-to metric to quantify a website’s usefulness — hits on a home page — has proven too blunt a tool to measure success. man unveiled a new version of Elliman.com that cost $1 million. While conventional wisdom says an attractive, user-friendly website is crucial to marketing a real estate ﬁrm, brokerages are grappling with how best to quantify the beneﬁts of these major investments of time and money. An oft-quoted statistic, from the National Association of Realtors, says that 88 percent of buyers in the U.S. used the Internet in their home search in 2011 — a number that has only been growing over the years. Further adding to the pressure today to invest capital online is that real estate consumers expect a wealth of property information up front, and brokerages that fail to give up the goods risk coming off as relics of an earlier age. But what was once considered the go-to metric to quantify a website’s usefulness — hits on a home page — has proven too blunt a tool to measure success, sources said. (Hits are generated anytime a user calls

up a file, such as a graphic, on a webpage. Since most pages contain numerous files, it’s a misleading and subjective way of tracking web traffic, experts said. Visits, on the other hand, are generated anytime someone surfs onto a website. Separate users who visit sites are called “unique visitors.”) Brokerages are “no longer [only] interested in getting giant numbers to their sites,” said James Cahill, Halstead Property’s chief information and technology officer. Rather, the right question is not: “How much traffic do you generate?” according to Gregg Larson, president of Clareity Consulting, a Scottsdale, Ariz.-based real estate information technology consultancy. It’s: “How do you measure the value of that traffic?” Most say that the main function of a brokerage’s website is not just to establish a “brand,” but to generate leads — by capturing visitors’ contact information to turn them from web surfers to clients. However, that system is problematic in

an industry comprised of independent contractors who own their client lists. In many cases, brokers do not have to share the leads they get online, sources said. Additionally, most home hunters bypass a firm’s home page altogether, first experiencing its Internet presence by clicking through to a specific listing from an online hub such as StreetEasy or Zillow, according to brokerage web experts and independent website developers. “There are a lot of brokerage firms that have very pretty websites,” said Doug Perlson, CEO of Real Direct, the online brokerage and listings consultant. But, he added, websites are better used for functional purposes, including generating leads and communicating with clients. “If you’re looking for the web to give yourself a presence,” he said, “then you’re not thinking about the web in the right way.”

Trafﬁc lights Web trafﬁc is not a useless tool, sources said. ILLUSTRATION FOR THE REAL DEAL BY ROBERT www.TheRealDeal.com March 2012PIZZO 00

NAVIGATING It’s still closely monitored by brokerages, since it means more eyeballs on listings. Plus, web traffic numbers are sometimes cited in listing pitches or used as a means to recruit new agents, and are generally good numbers to publicize to less sophisticated outsiders, sources said. “For a seller, for them to see that the traffic is there — they would overlook a lessthan-user-friendly or attractive website,” said Jochinke. With the Keller Williams NYC redesign, the firm is hoping that kwnyc.com will become the fourth or fifth most-trafficked real estate brokerage site in the city, he said. Yet, while web traffic is a useful metric in some areas, it is an antiquated, outdated tool for measuring whether a website is bringing in more clients and, ultimately, more transactions, sources said. “It’s really only the first step in ultimately [bringing in] a client and using your website in a way that’s beyond just providing information about your listing,” Perlson said. For one, the number of hits or visitors to a site is largely a function of how many listings are there, Perlson said. Plus, inexpensive rental listings will no doubt generate far more clicks than mid-range sale properties, sources said. Real estate firms can now measure the minute details of how visitors use their websites with the help of free software like Google Analytics or by hiring companies like Alexa, Experian Hitwise and Quantcast. Those programs can track everything from the number of page views per visit to the amount of time users spend on a site to the users’ location to the sites they click on before and after visiting a brokerage’s home page. That information helps firms decide where to invest marketing dollars, how to target certain types of consumers and whether new website features are effective. Using Google Analytics, Stribling found that 3 percent of online visitors came from Facebook — both from clicking on new paid advertisements and the company’s fan page — while the remaining traffic came from StreetEasy, the New York Times and other sources, Kivlan said. Overall, the rebranding has increased the number of visitors by about 10 percent, Kivlan added. In addition, earlier this year, the firm found that visitors were spending 44 percent more time on its website. But one of the big challenges the industry is facing is that this kind of detailed web traffic data is not public, nor are brokerages required to certify the accuracy of the data they cite in marketing materials. Accordingly, brokerages can (and do) claim unverified or irrelevant web traffic numbers, sources said, leaving sellers and competitors who care about traffic to piece together estimated data themselves. Indeed, as the Internet has brought transparency to many parts of the residential real estate business — allowing consumers to access listings directly or making comparable sale records widely available — the information on web traffic has largely stayed behind 64 August 2012 www.TheRealDeal.com

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Manhattan’s biggest ﬁrms: Facebook ‘likes’ FIRM

FACEBOOK ‘LIKES’

Corcoran Group

54,038

Nest Seekers International

7,679

Citi Habitats

4,513

Prudential Douglas Elliman

3,033

Halstead Property

3,018

Bond New York

2,042

Bellmarc Realty

608

Keller Williams NYC

544

Town Residential

466

Stribling & Associates

395

Rutenberg Realty

292

Sotheby’s International Realty (NYC)

290

Brown Harris Stevens

Manhattan’s biggest ﬁrms: Twitter followers FIRM

TWITTER FOLLOWERS

Corcoran Group

10,568

Halstead Property

6,406

Nest Seekers International

5,655

Bellmarc Realty

1,321

Keller Williams NYC

1,243

Citi Habitats

871

Prudential Douglas Elliman

681

Sotheby’s International Realty (NYC)

591

Stribling & Associates

558

Rutenberg Realty

261

Town Residential

251

Brown Harris Stevens

232

Bond New York

136

Source note: Figures taken from firms’ official Facebook fan pages and Twitter accounts on July 16, 2012. Biggest firms determined by a survey in the June 2012 issue.

DOUG PERLSON, CEO OF REAL DIRECT

STRIBLING’S ELIZABETH ANN KIVLAN

closed doors. “I would love to see it transparent,” Jochinke said. “I don’t think it’ll ever happen.” That doesn’t mean there aren’t data providers aiming to ﬁll this gap.

MIRON PROPERTIES’ JEFFREY SCHLEIDER

KELLER WILLIAMS NYC’S ZHANN JOCHINKE

Hitwise provided The Real Deal with a breakdown of the number of visits that Manhattan’s biggest brokerages received in June — the same data it would provide to paying customers — but reserves more comprehen-

sive trafﬁc breakdowns for clients. Quantcast provides only limited data publicly for sites that have agreed to release additional information. Public data from Alexa, meanwhile, is widely seen as unreliable because it only closely tracks companies that install a special toolbar on their websites. (Representatives for Quantcast and Amazon, Alexa’s parent company, did not return requests for comment.) Perhaps it’s not surprising, then, that the companies come up with different ﬁgures, since they all have different subscribers and different methods of collecting data. For example, according to Hitwise, Corcoran received 236,256 visits in June. Quantcast found that the site had 154,148 visitors between early June and early July. Alexa does not release this number. Corcoran’s head of online marketing declined to be interviewed for this story.

Acknowledging aggregators Yet to some extent, it’s more important for brokerages to drive potential clients to listings, not home pages, Halstead’s Cahill said. “Real estate [firms] tend to think they are badass and have great web sites because they spend hundreds of thousands on them per year — and many have nice sites,” Larson said. “However, they are not where the bulk of the traffic is going.” Instead, homebuyers and renters are seeking out listing aggregator sites, such as national providers like Trulia, Zillow and Realtor.com, as well as the Manhattan-based StreetEasy. In May, 130,000 unique visitors (as opposed to overall visits) from the New York metropolitan area came to Corcoran’s website — the most of any New York City brokerage, according to figures obtained by The Real Deal from comScore, another web traffic data subscription service. By contrast, the aggregators received much more; StreetEasy received 216,000 such visitors, and Zillow received 978,000 from the New York area. Web users also spent longer on aggregator sites. Visitors spent an average of 2.8 minutes on Corcoran’s site, compared to 3.5 minutes on StreetEasy and 6.6 minutes on Zillow, the data show. However, even though visitors may spend more time with aggregators, once a consumer is on a firm’s website, Larson noted, they are more likely to engage the firm, meaning that visitors to the brokerage’s website represent the “highest-quality traffic.” And, brokerages try to maximize the “stickiness” of their sites with useful information and teasers for other listings. Keller Williams NYC aims to retain users with help from a tab that shows similar listings and a function that lets users save properties to third-party websites, Jochinke said. The firms are on the lookout for minimizing their “bounce rate,” or the rate at which visitors come to a site and then quickly leave, sources said. “If you say you’ve got a million visitors, but Continued on page 92

www.TheRealDeal.com August 2012 33

NAVIGATING

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WEB

“Home”page Dissecting one firm’s website to analyze how residential brokerages think about their Internet personas BY LEIGH KAMPING-CARDER ow that the vast majority of homeseekers start their hunt on the Internet, a real estate brokerage’s website and its online listings are often the first chance a firm has to interact with potential customers. But what makes a successful site? To find out, this month The Real Deal examines Halstead Property’s website: www.halstead.com. Why did we choose Halstead’s site to examine? Largely because the firm’s site has

been singled out for its success. In 2011, the 1,000-agent brokerage was awarded an Outstanding Website honor from the Web Marketing Association, a volunteer group of Internet marketing professionals that recognizes exceptional web design. The ﬁrm has been “in the forefront of website development,” said David Elgrabi, owner of web design ﬁrm RealtyMX, which has crafted websites for Halstead’s competitors Bond New York and Keller Williams NYC.

Home page navigation bar

n contrast to some brokerage websites, the navigation bar at the top of the home page is “pared down,” said Sarah McCormick, the engagement director at digital agency Canvas, who helps oversee clients’ digital strategies. McCormick and her colleagues helped design the website for Halstead competitor Stribling & Associates, which was nominated for a Webby Award in 2012, but her company is not involved in Halstead’s web design. The Halstead navigation bar lists only ﬁve options — Properties, Developments, Areas & Towns, Agents and

About Us — and above that, the geographic areas where the ﬁrm operates. That’s about the same number of options as Prudential Douglas Elliman’s website, but fewer than some others such as the Corcoran Group (10 options), Citi Habitats (nine) and Rutenberg Realty (eight). Since residential ﬁrms cater to disparate audiences — from apartment hunters to developers to new brokers — this can often be a tricky feature to get right. Firms often err on the side of including too many options, experts said. Halstead’s site used to be more complicated, Elgrabi recalled. “I remember several versions of this website,” he said. “It’s much cleaner now.”

Mobile site

he need for companies to create a mobile site — a version of their website that’s created for viewing on smartphones and tablets — is becoming increasingly necessary as more users access the Internet through these devices rather than computers.

34 August 2012 www.TheRealDeal.com

To polish its interface, Halstead employs a 26-person, in-house marketing and technology team (shared with sister brokerage Brown Harris Stevens) that reassesses its online offerings at the start of every year — a relatively frequent reevaluation for a big ﬁrm — to tweak less popular features and add new capabilities. One issue they must keep in mind is that while in most industries a company’s home page is like its front door — or entrance to the rest of its website — in real estate, many users reach a brokerage’s on-

Mobile sites are still rare in the New York City brokerage world. Like many of its peers, Halstead’s site appears in the same format on a smartphone as it does on a computer, unlike some that offer users a streamlined version. However, Halstead’s site is “mobile-ready,” meaning that its features work and its pages display clearly on mobile devices, a spokesperson for the ﬁrm said.

line profile through the “side door.” That’s because they often get there by clicking on a specific listing on aggregator sites, such as StreetEasy, Trulia or Zillow. “The site was designed with the consumer in mind,” said James Cahill, Halstead’s chief information and technology officer. The company wanted to make the site as intuitive and simple as possible, he said, while offering features — such as a room painter that lets users test out different paint colors on listings — that are not available elsewhere.

Home page–featured property

alstead’s website caters to visitors from its four main markets — New York, New Jersey, Connecticut and the Hamptons — by automatically showing featured properties from the user’s location, using custom software and other tools. For example, if a visitor is based in Hoboken, N.J., she will see a greater mix of New Jersey properties in the large, central photograph on the site. Unlike some other firms, however, the home page does not feature a slideshow of multiple properties. The firm also tries to highlight listings (which are submitted by the firm’s agents, executives and marketing experts as potential featured properties) from a range of different price points, underscoring the way Halstead’s listings run the gamut of prices. But most importantly, Halstead’s web team selects properties that are visually appealing.

N av i g at i n g

Listing photos

t’s no surprise that photos feature prominently on brokerage home and listing pages, including Halstead’s. When McCormick was researching what consumers want from real estate websites, there was one response she heard over and over again: “We want pictures and we want them big!” Not only are listing photos integral to attracting renters and buyers, they also play a role in securing the listings in the first place. “The goal is to have the seller say, ‘This is a beautiful representation of my property, and this is why I want to sell with this firm,’ ” McCormick noted.

Web

One misstep on Halstead’s site is that the photos that accompany individual listings, as opposed to the featured property on the home page, are relatively small, experts said. Nor do they expand when you click on them, and there is no easy way for users to click through all the photos on a listing, like a slideshow, experts said. “When I click on the photo, it should expand immediately,” Elgrabi said. Instead, users can hover over thumbnails to view larger images, a Halstead spokesperson noted, and properties with “distinctive images” are accompanied by full-screen photos.

Listing page

the

partment hunters can be pretty particular about what they want in a home, so brokerages often include a great deal of information about properties and neighborhoods on listings pages. In some cases, this prompts companies to pile on more and more features like mortgage calculators, neighborhood guides, links to restaurant reviews and other additions that serve as distractions, McCor-

mick said. “There’s this mentality that if [a rival’s] site has it, we need to have it,” she said. Halstead’s marketing experts acknowledged that there is a danger in piling on too many features, confusing users. But, like McCormick, they noted that the key is to organize the information in a logical hierarchy, as it is on Halstead’s most expensive listing, a $14.8 million penthouse at 120 East 87th Street (pictured above).

While Halstead’s listing pages have many of these extra features, crucial elements such as the price, neighborhood and agent contact details are prominently placed in the upper left and right corners. Less important information, such as links to nearby restaurants, are “below the fold,” at the bottom of the page. “Some people say that more information is not good,” said Matthew Leone, Halstead’s director of web marketing and social media. “More information that is not useful is not good.”

Halstead ProperTV

n 2008, Halstead launched a dedicated website called Halstead ProperTV to showcase its now-extensive video offerings. While many brokerage websites contain audiovisual components, Halstead has embraced video with a rare commitment to scope, including property tours and press clips as well as agent biographies, event coverage, neighborhood guides and market report interviews. To date, the firm has created about 1,200 videos that have been viewed a collective 5 million times, Cahill said.

Agent video bios

bout 80 Halstead brokers have created short video biographies, made by in-house staff, which are posted on their agent profiles and on the firm’s home page. Part listing pitch and part recruiting tool, the videos feature agents discussing their work philosophy and experience, as

Agent profile

ne of the trickier aspects of crafting a brokerage website is to balance the goal of marketing the company, while also featuring dozens or hundreds of brokers, all of whom have their own brands and businesses. “A lot of real estate websites, they’re just all about the property,” McCormick said. “And there’s so much in real estate that has to do with the broker you’re

From Leone’s perspective, the videos are one of the most effective ways to communicate — second only to in-person contact, he said. Users spend about 30 to 40 times more time with a video than with a traditional listing, Cahill noted. And agents say they help spark interest from buyers, particularly those who live outside New York. To observers, Halstead’s videos score points for their high production values, short lengths (most are well under five minutes), and the fact that they feature real, live human beings, rather than shots of empty living rooms and kitchens.

well as the reasons they chose to work at Halstead. In many of them, past clients appear on camera to describe an agent’s brokering style. The goal is to give potential customers a way to interact with brokers and get a sense of their personalities before meeting them. “We create products for them to help promote themselves,” Leone said.

working with.” At Halstead, like at most firms, the home page is viewed as a corporate site, while agents’ pages are seen as their own, officials said. Most agent pages, including one for top broker Richard Orenstein (pictured here), include standard features such as contact info and current listings. Brokers can also include news stories, languages spoken, client testimonials, past closings, links to social media profiles and other items. TRD

www.TheRealDeal.com August 2012 35

N AV I G AT I N G

WEB

Apps on the map THE

TRD gets out its smartphone and reviews ﬁve residential real estate mobile applications

BY LEIGH KAMPING-CARDER hese days, there are mobile applications for everything from ﬁnding pay phones to proposing marriage. So it should come as no surprise that a bevy of apps exist to let home-hunters browse property listings on the go. After all, is there a better place to look up details on a Soho rental than from the cobblestoned streets of the neighborhood itself? But not all apps are created equal. This month, TRD tested out ﬁve free mobile apps aimed at New York City renters and buyers.

Citi Habitats

Available at: APPLE APP STORE

peatedly suggested Japadog in Noho, Fred’s at Barney’s on Madison Avenue and Chorus, a Midtown West karaoke bar. HANDY FEATURE: Rental listings include a “You Could Buy” button that shows properties for sale in a similar price range.

Corcoran

Available at: APPLE APP STORE, GOOGLE PLAY

DESCRIPTION: The Citi Habitats app allows users to ﬁnd properties near their current location through GPS technology. Other highlights of the rental giant’s app include an easy-to-use search function with criteria such as price, number of bedrooms and location; a “Featured Properties” section; a mortgage calculator; market information; and guides on how to rent and buy in New York City. PROS: For homeseekers open to living in various parts of the city, this app has a checklist tool that allows for searching in multiple neighborhoods and boroughs at once. Users can also save searches without registering. On listing pages, agent information is prominent (and includes an agent photo); one swipe opens up full-screen property shots. CONS: The “What’s Near Me” feature — which shows rental and sale listings, restaurants, shopping and nightlife options on Google Maps — returns results from across the city, not in proximity to the user. At the bottom of every listing, a sampling of “Things to Do Near Here” returned the same results for every property: The app re36 August 2012 www.TheRealDeal.com

We started with ones offered by three local brokerages: the Corcoran Group, Citi Habitats and Sotheby’s International Realty — the only major New York City ﬁrms that have them. (All three ﬁrms are owned by the real estate conglomerate NRT, with the exception of some Sotheby’s franchises.) We also looked at two listings aggregators: Seattle-headquartered Zillow and the New York–based StreetEasy. All of these apps can be downloaded through Apple’s App Store, while some can be downloaded for BlackBerrys through BlackBerry App World, or for smartphones that run Google’s Android operating system through Google Play.

of which is yellow and gray. Notices about new developments, local retail and companies like Foursquare pop up frequently, in some cases obscuring listing information. Search results come up in a seemingly random order, not organized by price or proximity. HANDY FEATURE: Listings with upcoming open houses show up in a separate menu — a convenient tool for homeseekers who plan to check out properties on-the-go.

Sotheby’s International Realty Mobile Available at: APPLE APP STORE, GOOGLE PLAY, BLACKBERRY APP WORLD

DESCRIPTION: Not surprisingly, the Corcoran app provides information about the firm’s listings in its three geographical markets: New York City, the Hamptons and South Florida. But it also comes chockfull of Corcoran-related features, such as monthly market reports based on signed contract data. Users can also visit the firm’s Facebook fan page, YouTube channel and Twitter feed without exiting the app. PROS: The listings are loaded with buttons that link to additional information, such as floor plans, lists of nearby restaurants and retail, Google Maps satellite views and listing pages on Corcoran’s website — all of which is particularly useful for out-oftowners unfamiliar with New York City real estate. They also feature large photos that are easy to scroll through with a swipe. CONS: The black background, while striking, makes it difficult to read the text, some

DESCRIPTION: The Sotheby’s app is focused on the luxury market, so will be more useful for brokers or homebuyers shopping at the high end. The app, designed by the global real estate behemoth and not the New York City afﬁliate, brings up listings from Anchorage, Alaska, to Wilson, Wyo. — and all points in between, including New York City. Instead of a downloadable app, the New York City afﬁliate created a mobile website that is accessed through smart-

phone browsers. It has the added benefit of updating automatically, among other advantages, a Sotheby’s spokesman said. PROS: The no-frills interface is easy to navigate. Listings information is presented in an intuitive and clear way, and includes figures on estimated monthly mortgage costs. CONS: Unlike the other apps on this list, users have to accept the terms of service before using the Sotheby’s app. There is no neighborhood search, so those who do not want to use GPS — such as when a Brooklyn apartment seeker is searching from her Manhattan office — must look up listings by address or zip code. The app turns up relatively few listings, which are sourced from local multiple listing services (which would not apply in New York) and other companies owned by NRT’s parent company, Realogy. For example, a search for rentals in the 10001 zip code — which covers parts of Chelsea, Midtown South and Clinton — yielded no results. Likewise, listings in the outer boroughs were thin: A search for Brooklyn properties turned up homes in Queens. HANDY FEATURE: The advanced search function lets users look up properties by their Multiple Listing Service identification numbers, which is helpful for brokers.

StreetEasy Real Estate

Available at: APPLE APP STORE DESCRIPTION: For those who frequently use StreetEasy’s website, the mobile experience of the New York City listings provider will feel familiar and is ideal for those independent home hunters keen to research properties sans broker. The app has ﬁve Continued on page 88

www.TheRealDeal.com March 2012 00

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Moguls’non-Manhattan mansions A peek inside the vacation homes of big real estate players

BY KATHERINE CLARKE n the dog days of summer, most New York City real estate moguls leave the city’s blistering heat behind. Many head for the East End of Long Island. Developer Billy Macklowe, for example, has a home in Sagaponack, top broker Mary Ann Tighe owns in Southampton and developer Joseph Moinian is known for throwing elaborate parties at his nine-bedroom waterfront

Elizabeth Stribling founder, Stribling & Associates

PARIS AND OPIO, FRANCE

lizabeth Stribling is a self-described Francophile, and when it comes to vacation homes, she’s put her money where her mouth is. Stribling owns not one, but two, homes binson, at sband, Guy Ro ling and her hu Elizabeth Strib Opio, France. their home in

compound on Dune Road in Quogue. Others choose more exotic locations; Elizabeth Stribling heads to the French Riviera every summer. This month, The Real Deal took a peek inside the vacation homes of well-known New York real estate personalities to see how they decompress when they’re away from the city.

in France, she told The Real Deal. Aside from a triplex maisonette on the Île de la Cité in Paris, one of two remaining natural islands in the Seine, she owns a four-bedroom home in Opio, a small village on the French Riviera. Stribling bought the Opio home — which overlooks the bay of La Napoule and has a pool — in 1987, paying just $375,000 for the property. The home, she said, is now worth “a few million dollars.” “I have been going to this area since 1974,” she said, describing how she used to take cooking classes at the nearby home of French cookbook author Simone Beck, who cowrote “Mastering the Art of French Cooking” with Julia Child. Stribling’s daughter, Elizabeth Ann Kivlan, was christened in a local village church in the hamlet of Plascassier. The house also has an herb garden and olive trees on the property, which come in handy when Stribling — who has “a passion” for cooking — throws dinner parties. When Kivlan was growing up, the family used to spend six weeks of the summer in Opio as well as winter vacations. Now, Stribling said she tries to spend at least a couple of weeks there in the summer. And it’s not just Stribling who enjoys Opio: Every year, she invites her company’s management team there for a few days for annual reviews. The tradition halted for two years after the ﬁnancial crisis hit in 2008, but has since recommenced.

Dottie Herman

president & CEO, Prudential Douglas Elliman

S OUTHAMP TON

hen Dottie Herman purchased her Hamptons home in 1992, the country was in the midst of a recession. “No one was going anywhere near real estate,” she said. “I didn’t tell anyone I was buying it. People would have 38 August 2012 www.TheRealDeal.com

The pool at Do ttie Herman’s Southampton house.

thought I was crazy.” But Herman, a Long Island native who had visited the Hamptons with friends since childhood, Dottie Herman had her heart set on a home there. After a year of house-hunting, she purchased a ﬁve-bedroom spec house half a mile from Southampton Village and a short bike ride from the ocean. She fell in love with it immediately, she said. “I just walked into it and knew it was my own.” Herman declined to reveal how much she paid, but did www.TheRealDeal.com March 2012 00

say she didn’t initially commit to buying it since it was out of her price range. Still, she kept the property in mind, succumbing to its charms months later. “I can’t explain it,” she said. “It was just beautiful.” Herman’s instincts were dead-on. While the property was considered pricey at the time, it has appreciated substantially since then. “I took a leap,” she recalled. “I always believed in the Hamptons.” The house is adorned with Herman’s collection of small china shoes. She even commissioned a local artist to paint portraits of shoes, which hang on the walls. She said she spends at least two weeks at the property every summer, as well as occasional weekends. While staying at the house, Herman said she loves to bike to the beach with a cup of fresh-brewed coffee. She also mixes business with pleasure, thanks to the eight ofﬁces her ﬁrm now operates in the Hamptons. And she doesn’t mind running into business associates on the beach. “People are in a different mode when they’re there,” she said.

Stephen Ross CEO, Related Companies

P ALM B EACH , F LORIDA “The Reef” es

tate in Palm Be

ach, Fla.

is keen to keep the custom alive. His kids — 12-year-old Zoe and 10-year-old Zachary — have no complaints. “It’s tradition,” Malin said. “Of all the places I’ve taken A view of Ogun

quit, Me., from

the Anchorag

e by the Sea re

sort.

them, if you asked my kids where they want to go, they’ll still say Maine.” Ogunquit, which is around 90 minutes from Boston, offers a variety of activities. Gary’s wife, Rachel, and Zoe often go antiquing, he said, while he and Zachary play sports. The family also goes boating in the harbor and takes walks on the Marginal Way, one of New England’s only paved, public shoreline footpaths. Malin may not rent forever, though: The company head said he would consider purchasing a property in the town once his kids get a little older. “I could easily see my kids getting jobs there and spending the whole summer when they’re older,” he said.

Elie Hirschfeld

president, Hirschfeld Properties

E AST H AMP TON AND S UN V ALLEY , I DAHO

hen Related’s Stephen Ross needs a break from Manhattan, he retreats to his oceanfront mansion in Palm Beach, Fla. The landmarked 1937 property, dubbed “The Reef,” was designed by famed Stephen architect Maurice Fatio. The Ross spread, located at 702 North County Road, totals 11,000 square feet. Ross, who is also co-owner of the Miami Dolphins, declined to comment on the house. But according to news reports, he acquired the property in an off-market deal in 2007, buying it from New York media magnate Stuart Subotnick for $31.86 million. The house is a few blocks from the Palm Beach Country Club. In January, Ross and his wife, Kara, hosted a $2,500per-plate campaign fund-raiser for presidential candidate Mitt Romney at the home.

211 Lily Pond

Lane

n January, New York City retail investor Jeff Sutton paid $22.6 million for a landmarked home in the New Jersey seaside resort of Deal, according to news reports. This is the second home in Deal for Sutton, a member of the town’s well-established Syrian Jewish community. Sutton, head of the commercial real estate Jeff Sutton ﬁrm Wharton Properties, declined to comment on the purchase. Sutton’s new 12,000-square-foot house reportedly has seven bedrooms on 5.3 acres, including 350 feet of private beach space. The home had been listed for sale for $35 million with Bruce Germinsky of New Jersey–based BG Realty Services. Sutton’s broker was Steven Scheer of G & G Realtors.

president, Citi Habitats

64 August 2012 www.TheRealDeal.com

D EAL , N EW J ERSEY

CEO, Red Apple Group

O GUNQUIT , M AINE

t’s fitting that Gary Malin, president of the city’s largest rental brokerage, doesn’t own a home in his favored summer location: Ogunquit, Me. Instead, the Malin family rents a three-story home by the water, paying approximately $3,500 per week, Malin told The Real Deal. The 1,800-square-foot house has a master suite that spans the entire third floor. Malin, who spends a week in Maine with his family every August, rented the house for the first time last year, and will stay there again this year. Some years, though, the family stays in a resort called Anchorage by the Sea. The family’s association with Ogunquit — a beach town in York County famed for its wooden seafood shacks and picturesque harbor — dates back to Malin’s childhood. A Long Island native, Malin vacationed in Maine as a kid, and

Jeff Sutton

founder & president, Wharton Properties

John Catsimatidis

Gary Malin

Hirschfeld, whose Manhattan projects include the Grand Sutton co-op and the Crowne Plaza hotel, actually purchased the historic shingled property in 1996. He then embarked on a major interior renovation, putting in new wiring and plumbing, but working to maintain the home’s “original beach-cottage feel and historic context,” he said. The 12,000-square-foot, eight-bedroom home sits on 1.2 acres of land, with a pool and beach access. The home is currently on the market for $19.95 million with Sotheby’s International Realty agents Bettie Wysor and Ed Petrie. Meanwhile, Hirschfeld’s ﬁve-bedroom house in the skiresort town of Sun Valley, Idaho, has also housed celebrities, including Bill Gates and Steve Jobs. This year, for the fourth year in a row, AOL CEO and chairman Tim Armstrong rented the house for the annual Allen & Company Sun Valley Conference.

Former President Bill Clinton (center) with Elie Hirschfeld (right) and Alex Glouchkov (left), Hirschfeld’s construction manager.

eveloper Elie Hirschfeld made headlines last year when Bill and Hillary Clinton rented his East Hampton home at 211 Lily Pond Lane for a week. Hirschfeld declined to comment on how much the Clintons paid, but said that during their stay, the former president reorganized the library by subject matter.

E AST Q UOGUE

ohn Catsimatidis, owner of the Gristedes grocery store chain, bought a 5,000-square-foot East Quogue estate at 93 Dune Road in 2006. He reportedly paid $7 million for the house, which sits on 2.5 acres. Catsimatidis did not respond to a request for comment on the home. But he told the New York Observer at the time that “my wife talked me into it. We John looked at it La- Catsimatidis bor Day weekend and we both liked it. My wife said, ‘You’re not getting any younger. When are you going to pull the trigger?’ ... I said, ‘You’re right — I’m not getting any younger.’ ” Ultimately, it was the ocean views that made up his mind. “When you look at the view, it makes you glad you’re alive,” Catsimatidis told the Observer. Catsimatidis is said to have embarked on a massive renovation of the home, expanding it to 9,500 square feet. TRD www.TheRealDeal.com August 2012 39

PR O F I L E

Reinventing Realogy Will the mega company’s IPO mean belt tightening or more resources for its NYC brokerages?

BY ADAM PINCUS ealogy — the largest residential brokerage franchisor in the world and the owner of Manhattan-based firms Corcoran Group and Citi Habitats — filed documents in June announcing that it planned to raise as much as $1 billion through an initial public offering. Now, as the IPO looms, many in the industry are wondering what the stock sale will mean for the company’s New York City brands. According to the prospectus that Realogy filed with the U.S. Securities and Exchange Commission in preparation for the IPO, the deal would reduce the company’s debt loads by some $3 billion and cut interest payments by an anticipated $350 million per year. That could free up money to plow back into the brokerages — or to provide returns for stockholders. Some say Realogy’s decision to spend money in New York or other areas will be driven by where it expects to get the most bang for its buck. The big question now: Where is that? “In a risk-reward perspective, it is market-by-market,” said Philip Martin, director of REIT strategy at investment research firm Morningstar. “[They] are looking in their portfolio at the markets with exposure and looking where best to invest their dollars.” Realogy, which is based in Parsippany, N.J., said it could not discuss any aspects of the pending IPO — which does not have a date set — per SEC rules. In addition to Corcoran and Citi Habitats, Realogy owns some Sotheby’s International Realty, ERA and Coldwell Banker offices through its NRT division. Meanwhile, another division of Realogy also franchises Coldwell Banker, Coldwell Banker Commercial, Better Homes and Gardens Real Estate, Sotheby’s, Century 21 and ERA offices. In total, the company owns 156 offices in the New York metro area out of the 725 it owns nationally — plus its many franchises. Through the offices it owns and franchises, it has more than 241,000 sales associates in 13,800 offices in 103 countries, the firm’s website says. While the IPO generated headlines the day it was announced, there has been very little discussion about how life could change for agents and brokers if Realogy actually goes public. In fact, some agents contacted by TRD were only vaguely aware that Realogy had proposed the IPO. Peter Sabesan, principal at Coldwell Banker Commercial Hunter Phoenix, a 40 August 2012 www.TheRealDeal.com

Manhattan franchisee, said ofﬁcials at Realogy had not reached out to him to discuss it. But he expected the public offering would be a positive.

back out. In 1999, NRT ﬁled to go public, but bowed out because the stock market was soft during that period. Adding pressure to the situation now

ment team surely has considered the potential consequences of being public versus private,” said Heiberger, who founded the brokerage Town Residential in 2010.

Realogy could soon be traded on the public markets.

Some observers say Realogy as a public company would be more aggressive in cutting costs, while others say there may be more money for expansion.

Realogy CEO Richard Smith

“I think it will make Coldwell Banker a stronger company, and it will probably have a parent with deeper pockets, which will ﬁlter down,” he said, adding that going public could mean better hires and improved technology for franchisees. As TRD reported last month, many have questioned the timing of Realogy’s latest IPO because of the weak stock market. And, indeed, the company could still

Citi Habitats head Gary Malin

Corcoran head Pamela Liebman

is that Realogy has lost money every year since 2008. Still, some say it could be a good move. Andrew Heiberger — who founded Citi Habitats in the 1990s and sold that brokerage to NRT in 2004 for a reported $49.6 million — said he thinks the IPO will have an impact on the market. “Realogy is the most experienced player in the ﬁeld. Its knowledgeable manage-

“The company has the potential to share in the fruits of a rising housing market on a local level here in Manhattan — and on a national level.”

Potential impact Although the name Realogy is relatively new, its predecessor has been around since the 1990s, and for much of the time it’s Continued on page 89

www.TheRealDeal.com January 2011 25

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Deal

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A 666 Fifth scorecard

Now that Vornado is purchasing the trophy’s remaining retail condo for $707 million, a look at who won and who lost By Adam Pincus hen Kushner Companies paid a record $1.8 billion for the aluminum-clad office building 666 Fifth Avenue in 2007, located between 52nd and 53rd streets, the market was still booming. But less than two years later, Lehman Brothers had collapsed, and that 10-digit price tag seemed to be an outrageous reminder of a bygone era. Yet company CEO Jared Kushner continued to believe that the retail portion alone could be worth $1 billion. Today — after a roller-coaster ride that’s included bringing in partners and selling various pieces of the building — he’s finally been proven right. Indeed, last month Vornado Realty Trust agreed to pay $707 million for the last part of the retail condo in the building. That came a little over a year after Kushner —

Jared Kushner

Kushner Companies Retail: Estimated profits of about $100 to $120 million Office: Estimated current loss (also described as new equity) of more than $200 million he Kushner Companies, headed by 31-year-old CEO Jared Kushner, had the most to lose when it paid a record $1.8 billion for the 1.45 millionsquare-foot office-and-retail tower 666 Fifth Avenue at the height of the market. But the family-owned firm believed the retail could be worth $1 billion alone. An analysis by The Real Deal estimated that the firm made a roughly $100 to $120 million profit on the sale of the retail condos (where it was a 51 percent owner). The profit would have been even higher, but sources said Carlyle lent Kushner as much as $60 million at a high interest rate.

along with the joint venture retail partners he brought in, the Carlyle Group and Crown Acquisitions — sold the other retail condo to Spanish clothing company Inditex for $324 million. In light of the latest sale to Vornado — which bought Carlyle and Crown out of the investment entirely — The Real Deal created a scorecard estimating how much in profits

And despite turning a profit on the retail, it appears the firm is not out of the woods yet at the building. That’s because the office portion of the tower has an operating loss of more than $200 million accrued over the past five years, according to a TRD analysis of financial data from special servicer LNR Partners and of city tax records (though sources also describe that $200 million as additional equity that Kushner put into the building). Part of the problem stemmed from crushing debt payments that were once as high as $78 million annually. The building also struggled with a net cash flow, which records from LNR show declined from $57 million in 2007 to $28 million in 2011, as revenues plunged from $106 million to $78 million when the firm lost a few big office tenants (including law firm Orrick, Herrington & Sutcliffe), and vacancy in the building rose. But after a December 2011 recapitalization with an $80 million cash infusion from Vornado, Kushner was able to cut its near-term debt payments by more than half to below $30 million per year. Although that will jump down the road, Kushner — whose stake in 666 Fifth now only consists of 51 percent of the office portion of the building — is on much more solid footing compared to last year at this time. Rather than bleeding cash, it appears to be breaking even and may be profitable if it can sign some new office tenants.

(or losses) all of the parties involved in 666 Fifth Avenue have walked away with. TRD calculated profit figures based on purchase and sale price — and also factored in income and expense figures, estimates of mortgage payments, broker fees, lease buyouts, mortgage tax numbers, property taxes and other financial metrics, which were all provided either by sources or by review-

ing public records. The figures were shared with the three investors, who each declined to comment. Several sources at the firms disputed the accuracy of the numbers, but would not provide their own figures. We also created a time line of the recordsetting purchases to give you a ticktock account of how the investment played out on the ground. Turn the page for that.

Sources say, all told, Carlyle may have kicked in somewhere around $200 million. According to TRD’s analysis, it appears that Carlyle made that back, and possibly another $200 million to boot. The firm earned money both as a percentage of the preferred equity it laid to cover ongoing expenses and received a return through a complex “waterfall” structure that allocates part of its sale profits to Crown, sources close to the deal said. David Rubenstein

Carlyle Group Retail: Estimated profits of $200 to $230 million he Washington, D.C.–based global investment firm appears to be the biggest winner out of the three investors in 666 Fifth Avenue. The firm took home the lion’s share of the profits through the ownership and sale of the two retail condos in the building. Sources say the firm — which partnered with Crown and Kushner in July 2008 to buy the retail portion of the building for $525 million — laid out the most cash of the three partners. While there’s no breakdown publicly available, Carlyle reportedly put in more than Kushner, which also contributed cash to the deal. Together, they spent $65 million for the initial retail condo acquisition and millions more for expenses such as mortgage payments and lease buyouts for tenants like Brooks Brothers and Hickey Freeman.

Haim Chera

Crown Acquisitions Retail: Estimated profits of $25 to $50 million rown Acquisitions had the least to lose — at least financially speaking — of the three retail partners. The company didn’t put money into the purchase of the retail condo and, other than earning brokerage and other fees, could only

Continued on page 89

www.TheRealDeal.com August 2012 43

Behind

the

deal

Unraveling a record deal

A ticktock accounting of how the blockbuster, top-of-themarket 666 Fifth Avenue buy dodged going belly-up By AdAm Pincus uring the recent recession that battered the Manhattan commercial real estate market, insiders pointed to overleveraged acquisitions like Kushner Companies’ 2007 purchase of 666 Fifth Avenue for

$1.8 billion as likely foreclosure candidates. But instead of failing, the building, aided by a surging retail market on upper Fifth Avenue, has weathered the storm. The office portion was stabilized by a recapitalization thanks to Vornado Realty Trust. And the retail

was sold in two pieces — the most recent of which went into contract last month for $707 million with Vornado as the buyer. Those two retail condo sales went for a combined $1 billion, earning tremendous returns for the trio of retail investors. This month, The Real Deal created a time line that follows all of the major developments at the building over a tumultuous five and a half years.

• April 2010 The joint venture hires Eastdil Secured to bring the retail condo to market. (Marketing is suspended several months later, but it’s unclear exactly when.)

• July 2010 Vornado Realty Trust buys a stake in LNR, providing it with an insider’s advantage in buying distressed assets, including properties such as the office portion of 666 Fifth.

• April 2010 • November 2010 Hollister opens in mid-block portion of retail condo.

• February 25, 2011

• March 4, 2011 In a blockbuster deal brokered by investment firm Savills, Spanish company Inditex, the parent firm to fashion chain Zara, buys the smaller 36,473-square-foot condo for $324 million. At $8,300 per square foot (on a blended basis), it was the highest price ever paid for any commercial property larger than 10,000 square feet in New York, Real Capital Analytics data shows. The purchase accounts for nearly half of the joint venture’s space, but leaves it with two-thirds of the prized ground floor.

In preparation to sell the former NBA space as a condo, the retail owners split the existing retail into two separate units. The newly created retail condo on 52nd Street totals 36,473 square feet, according to city records. The other unit — which houses Hollister, Uniqlo and, later, watch retailer Swatch — is 40,742 square feet.

In a huge coup, Japanese retailer Uniqlo signs a lease valued at $300 million over 15 years for the space formerly occupied by Brooks Brothers (Hollister agrees to take a mid-block space instead of this space). Uniqlo agrees to pay $13.6 million in the first year of its lease, which rises at about 2 percent a year to $18.4 million. Uniqlo also leases 60,000 square feet of office space on the building’s third floor to increase the size of its store, paying a rent starting at about $3 million a year and rising.

• March 4, 2011 The joint venture refinances the remaining retail condo with $300 million in debt from Morgan Stanley, and pays off the SL Green mezzanine loan and the Barclays loan.

• March 21, 2011 Swatch inks a 15-year lease deal valued at $80 million for 2,000 square feet on the ground floor between Hollister and Uniqlo.

• June 2, 2011 While the retail portion of the building is going strong, the office portion appraises at $820 million, a 59 percent drop from its $2 billion underwritten value in March 2007.

44 August 2012 www.TheRealDeal.com

Behind

the

deal

• Early 2008

START

About a year later, Kushner signs a contract to sell off the retail part of the building as a condo for $525 million to a joint venture that includes his own company along with Washington, D.C.–based investment firm The Carlyle Group and the Chera family’s Crown Acquisitions. Before the retail condo sale closes, Kushner also strikes a deal to pay Brooks Brothers to leave the 53rd Street corner space six years early. The Kushner-Carlyle-Crown partnership also quickly starts hustling to get new, higher-paying tenants in, and opens negotiations through tenant-side broker Laura Pomerantz of PBS Real Estate with clothing retailer Abercrombie & Fitch.

• March 17, 2008 Abercrombie signs a pre-crash, 15year lease for about 20,000 square feet in the space, then occupied by Brooks Brothers. Rent on the deal begins at about $15 million and progresses to about $18.5 million by the end of the lease, a source said.

• January 11, 2007 Kushner Companies pays $1.8 billion for the 1.45 million-squarefoot 666 Fifth Avenue, at the time a record sale price for a single office building in the U.S. The new owner takes out $1.215 billion in financing for the purchase and plans to reposition the retail — occupied at the time by Brooks Brothers, the NBA Store and men’s clothing designer Hickey Freeman. Kushner anticipates that the stores might be able to bring in $50 million per year in rents, rather than the roughly $10 million they have been earning.

• July 1, 2008

• January 31, 2009 • March 3, 2010 With the office market in decline, and revenues down sharply in the office portion of 666 Fifth, Kushner’s $1.215 billion office loan is sent to special loan servicer LNR with the intention of loan modification.

• June 4, 2009 To clear out the midblock section of the retail condo, Kushner and Carlyle pay Hickey Freeman $11.96 million to buy its lease.

With a $47.71 million lease buyout payment in hand from the equity members of the joint venture (Kushner and Carlyle), Brooks Brothers officially vacates its space. In doing so, it makes way for the higher-paying Hollister (a division of Abercrombie).

In preparation for the closing of the retail sale, Kushner formally converts the building into a condo with two units — a 1.45 million-square-foot office condo and a 78,000-square-foot retail condo. The July 1 sale gives Carlyle and Crown a combined 49 percent stake in the joint venture. Kushner, meanwhile, gets a 51 percent share. The joint venture takes out a $325 million loan from lender Barclays and a $135 million mezzanine loan from SL Green Realty. The partners put in the remaining $65 million in equity, with the money coming from Kushner and Carlyle — who gets a controlling interest despite its minority stake.

Steven Roth

• Today

• December 15, 2011 In a deal that helps Kushner’s chances of recouping value down the line from its office investment, Vornado buys a controlling 49.5 percent interest in the office condo from Kushner, pledging $80 million for leaseup and other costs. At the same time, Kushner pledges to put in another $30 million derived from selling off its “air and light” easement to neighbor Starwood Capital Group. Vornado’s recap, along with a refinancing with LNR, cuts the building’s nearterm debt payments in half, temporarily slashing the interest rate on the loan from 6.35 percent to 3 percent. It also creates a “hope note,” meaning that if the Vornado-Kushner partnership ever sells the building above a certain price, Kushner could see a payout.

• July 5, 2012 In a deal brokered by a CBRE Group team led by Darcy Stacom, Vornado signs an agreement to buy the remaining 40,742-square-foot retail condo for $707 million from the Kushner-Carlyle-Crown joint venture. The closing is expected in the fourth quarter. The price values the property at $17,353 per square foot on a blended basis. However, using another industry metric that breaks down values by what floor the space is on, the ground-floor retail yields an astounding value of $35,000 per square foot. The deal also includes 75,000 square feet of space in the office condo that retail tenants occupy.

Although it appears Kushner is still in the hole on its investment, it’s in a far better position than other high-flying firms like Tishman Speyer Properties and Macklowe Properties that made big purchases during the peak and then lost billions of dollars worth of real estate when the economy tanked. And Kushner’s partners came out well. There is even a sense of poetic financial symmetry to the deal: While most commercial properties purchased in 2007 are still under water, this one has clawed its way back to the same value it started at. Indeed, the combined $1 billion it made on the sale of the two retail condos and the $820 million appraised value for the office portion now values the building at a bit more than $1.8 billion — just about what Kushner originally paid.

www.TheRealDeal.com August 2012 45

��

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HARALD GRANT

�� 1984: MERRILL SIGNS LARGEST LEASE IN NYC HISTORY all Street investment firm Merrill Lynch & Company signed a lease-and-purchase agreement for 3.9 million square feet in two towers at the under-construction World Financial Center in Lower Manhattan 28 years ago this month. Merrill signed a deal with Canadian developer Olympia & York to occupy 2 World Financial Center and 4 World Financial Center, as well as purchasing a 49 percent interest in each building. The deal was the largest lease-and-purchase agreement in the city’s history — a record it still holds. The company’s president William Schreyer (who the following year was named CEO), said the move would assure that “Merrill Lynch will remain a major corporate presence in New York City for years to come.” The firm planned to consolidate 10,000 local employees in the towers beginning in 1986. But Merrill quickly found it had bitten off more than it could chew, and put 500,000 square feet on the market that year, hoping to get $35 per foot. By 1990, Former Merrill Lynch presreports said it had never even occupied about 400,000 square ident William Schreyer feet of 2 World Financial Center even though it paid $42 per square foot for the space. It’s unclear exactly what happened to all of the space, but Merrill acted as a landlord for years, subleasing out much of it to companies, including Nomura Holdings and Oppenheimer Funds. But last year, Merrill, now part of Bank of America, signed a lease for about 750,000 square feet spread between the two buildings with Brookfield Office Properties, which purchased the four World Financial Center buildings in the 1990s.

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igns of the impending postwar Manhattan office construction boom emerged even before the fighting was over as one major land owner filed plans for several skyscrapers, 68 years ago this month. The City Bank–Farmers Trust Company — a predecessor to Citigroup — filed plans for four towers with the city, valued at $20 million and totaling nearly 3 million square feet. Together the filings represented the biggest bump in construction planning in more than 10 years, 650 Madison Avenue the New York Times reported. Despite the symbolic importance of the plans, it appears the four buildings were not built as proposed. For example, the bank sought to construct a 35-story office building at 650 Madison. Instead, it sold the property, and in 1957 Commercial Investment Trust (now known as the CIT Group) built an eight-story office building there. In 1987, 19 floors were added on top of the building. Ultimately, developers constructed approximately 19 million square feet of office space in Manhattan during the 12-year, postwar boom that kicked off in 1945 at the end of World War II.

HARALD GRANT SVP, ASSOCIATE BROKER

Cell 516.527.7712 harald.grant@sothebyshomes.com SOUTHAMPTON BROKERAGE

sothebyshomes.com/hamptons

50 NUGENT STREET, SOUTHAMPTON, NY 11968 T 631.283.0600 F 631.283.0921 Sotheby’s International Realty, Inc. is operated by Sotheby’s International Realty, Inc.

46 August 2012 www.TheRealDeal.com

1944: SIGNS OF POSTWAR BUILDING BOOM EMERGE

1925: ROCKAWAY LAND RUSH

eal estate investment in the Rockaways exploded with millions of dollars worth of properties trading hands in the ﬁrst hot days of August 87 years ago this month. The trades followed reports that New York City was planning on building a new ninemile boardwalk along the beach. Thousands of investors and speculators poured Rockaway Beach in into Rockaway Park in Queens, where curb aucthe mid-1920s tions — with buyers and sellers writing deals on pieces of paper — sprung up. Police were brought in to manage the crowds. Reports said the land rush started after a Harlem theater owner named Joseph Weinstock read an article in May about the city’s boardwalk proposal and began buying property. Within weeks, thousands of others caught on. Two local real estate ﬁrms each reported about $2 million in trades on Saturday, August 1, alone. “Throngs of shouting, gesticulating men surged about in shirt sleeves, hatless, their brows streaming with perspiration,” news reports said. Compiled by Adam Pincus

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

L SO

Bridgehampton $40,000,000

L SO

Southampton $38,000,000

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Sagaponack $9,600,000

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East Hampton $8,000,000

Bridgehampton $16,995,000

L SO

Sagaponack $7,995,000

the most effective brokerage in the hamptons

Bridgehampton $7,950,000

L SO

A selection of sold properties during the first half of 2012. Prices noted are last listed.

Amagansett $7,900,000

L SO

East Hampton $5,900,000

L SO

East Hampton $2,995,000

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Southampton $5,900,000

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Amagansett $4,000,000

L SO

Southampton $2,995,000

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East Hampton $5,200,000

L SO

Sagaponack $3,775,000

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Southampton $6,500,000

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Market Share

Sagaponack $4,495,000

Water Mill $3,475,000

L SO

Within just 3½ years our distinctive and highly effective model has attracted 91 agents that are empowered to create and enable deals.

Sagaponack $3,395,000

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Montauk $2,995,000

Wainscott $2,695,000

Based on residential sales during the first half of 2012 from Southampton to Montauk.

saunders.com | hamptonsrealestate.com 14 main street, southampton village, new york (631) 283-5050 2287 montauk highway, bridgehampton, new york (631) 537-5454

“Saunders, A Higher Form of Realty,” is registered in the U.S. Patent and Trademark Office. Equal Housing Opportunity.

L SO

Bridgehampton $40,000,000

L SO

Southampton $38,000,000

L SO

Sagaponack $9,600,000

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Bridgehampton $19,750,000

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East Hampton $8,000,000

Bridgehampton $16,995,000

L SO

Sagaponack $7,995,000

the most effective brokerage in the hamptons

Bridgehampton $7,950,000

L SO

A selection of sold properties during the first half of 2012. Prices noted are last listed.

Amagansett $7,900,000

L SO

East Hampton $5,900,000

L SO

East Hampton $2,995,000

L SO

Southampton $5,900,000

L SO

Amagansett $4,000,000

L SO

Southampton $2,995,000

L SO

East Hampton $5,200,000

L SO

Sagaponack $3,775,000

L SO

Southampton $6,500,000

L SO

Market Share

Sagaponack $4,495,000

Water Mill $3,475,000

L SO

Within just 3½ years our distinctive and highly effective model has attracted 91 agents that are empowered to create and enable deals.

Sagaponack $3,395,000

L SO

Montauk $2,995,000

Wainscott $2,695,000

Based on residential sales during the first half of 2012 from Southampton to Montauk.

saunders.com | hamptonsrealestate.com 14 main street, southampton village, new york (631) 283-5050 2287 montauk highway, bridgehampton, new york (631) 537-5454

“Saunders, A Higher Form of Realty,” is registered in the U.S. Patent and Trademark Office. Equal Housing Opportunity.

THE HAMPTONS

Top of the Hamptons heap

As the residential market stabilizes, East End brokerages get bigger

An aerial shot of Sagaponack, which has been in strong demand with Hamptons buyers in the last few years.

BY LEIGH KAMPING-CARDER t’s been a rocky couple of years for the real estate market on Long Island’s East End. But now that the worst of the downturn has passed, the region’s major residential firms are seeing a slight increase in size compared to the last two years. This year, the 10 biggest brokerages in the Hamptons, Shelter Island and the North Fork collectively had a total of 1,230 agents — up 7 percent from 1,149 in 2011, according to The Real Deal’s annual ranking of the biggest East End firms. While that is not a huge jump, it is the second year that the agent headcount has gone up. In 2010, the 10 biggest firms had a total of 1,140 agents. “There are enough brokers out here to choke a horse,” said Paul Brennan, Prudential Douglas Elliman’s Hamptons regional manager, laughing. The Corcoran Group was the largest firm on TRD’s list this year, taking the No. 1 position from Elliman for the first time since 2009, although the firms are currently about the same size, with 327 and 326 agents, respectively. Both have grown slightly since last year, according to TRD’s count. At No. 3, Brown Harris Stevens dropped slightly from last year, from 146 agents to 132 agents. While size is not the only marker of a firm’s success, it does shed light on how

50 August 2012 www.TheRealDeal.com

Biggest East End ﬁrms RANK

FIRM

2012

2011

NUMBER OF AGENTS 2012

2011

The Corcoran Group

327

312

Prudential Douglas Elliman

326

319

Brown Harris Stevens

132

146

Town & Country Real Estate

119

Saunders & Associates

Sotheby’s International Realty

N/A

Nest Seekers International

N/A

Daniel Gale Sotheby’s International Realty

Century 21 Albertson Realty

Devlin McNiff Halstead Property

Source: Agent numbers are from ﬁrms’ websites. Research was done by The Real Deal in early July.

“There are enough brokers out here to choke a horse.” PA U L B R E N N A N , P R U D E N T I A L D O U G L A S E L L I M A N ﬁrms attract and retain talent. Lately, however, industry watchers described a sense of stability in the Hamptons brokerage world, underscored by less broker turnover than in the years immediately following the recession.

“For the most part, I don’t see [dramatic] movement anymore,” said veteran broker Judi Desiderio, founder of Town & Country Real Estate. She added: “Usually when the market gets better and people start to make money and have business,

it’s more difﬁcult for them to move.” According to TRD’s data — which was compiled by counting agents listed on brokerage websites, not including those who are solely in management or administrative positions — Town & Country is

AERIAL SAGAPONACK PHOTOGRAPH COURTESY OFJanuary WWW.SAUNDERS.COM www.TheRealDeal.com 2011 25

THE HAMPTONS the fourth largest brokerage in the area. It has 119 agents, the same number as last year. But the firm is in the midst of opening an additional 1,600-square-foot office in East Hampton to house management and support staff, as well as a handful of new agents. It’s also moving into a new 2,000-square-foot building near its current location in Southampton, Desiderio said. Rounding out the top five is Saunders & Associates, the 88-agent brokerage that developer and broker Andrew Saunders

once a broker. Sotheby’s dropped to No. 6 with 87 agents. And Saunders said he added several brokers in the weeks since TRD gathered its data. Additionally, he said, a number of agents have committed to joining Saunders in his new East Hampton ofﬁce, set to open in 2013. He also noted that his agents had found the buyers for three properties — 171 Great Plains Road, 329 Highland Terrace and 95 Surfside Drive — that appear on TRD’s list of the biggest East End sales

of the high-end brokerage, has also grown on the North Fork, doubling its agent count in its four offices there to 44 agents. However, the bulk of its 600 agents are still spread across its other 18 locations. (The firm did not return requests for comment.) North Fork–based Century 21 Albertson Realty was the ninth-largest firm on TRD’s ranking with 42 agents. And finally, Halstead Property, which hasn’t had a presence in the Hamptons for some time, acquired East Hampton

in Manhattan and Brooklyn, and largely operate as wholly separate entities, spokespeople for the ﬁrms pointed out. But there are far fewer listings and agents in the Hamptons, and competition is already ﬁerce, some brokers said.

Action areas Even with these new ﬁrms on the scene, the East End brokerage industry is not facing the kind of upheaval of recent memory, brokers said. That stability is partly the result of

Top 10 priciest listings on the East End RANK

LISTING PRICE

PROPERTY LISTING

BROKER(S)

$65 million

351 Bridge Lane, Sagaponack

Julie Briggs and Debbie Loefﬂer, Corcoran Group

$55 million

Two Trees Farm, Bridgehampton*

Open listing

3 TIE

$49 million

Poxabogue estate, Southampton

David Saland, Nest Seekers International

3 TIE

$49 million

160 Ox Pasture Road, Southampton

Tim Davis and Felicitas Kohl, Corcoran; Mitch Natter and Tony Cerio, Brown Harris Stevens

$44.9 million

249 Further Lane, East Hampton

John Healey, Town & Country Real Estate

$43.5 million

612 Halsey Lane, Bridgehampton

Christopher Burnside, Brown Harris Stevens; Gary DePersia, Corcoran

$40 million

Waterfront estate, North Haven

Peter Turino, Brown Harris Stevens

8 TIE

$35 million

Studio townhouse, East Quogue

Lynn November, Prudential Douglas Elliman

8 TIE

$35 million

Normandy House estate, Southampton

Donald Gleasner, Corcoran

$34 million

Oceanfront estate, Southampton

Tim Davis, Corcoran

Source: StreetEasy listings available as of July 9, with additional information from brokers and ﬁrms. *Two Trees Farm is being marketed by Harald Grant of Sotheby’s International Realty, Jay Flagg of Saunders & Associates, Nancy McGann of Town & Country, and Mitch Natter and Tony Cerio of Brown Harris Stevens. 612 Halsey Lane in Bridgehampton, which is listed for $43.5 million

351 Bridge Lane in Sagaponack, which is listed for $65 million

Stuart Epstein, manager of Devlin McNiff Halstead Property

Judi Desiderio, founder of Town & Country Real Estate

The Normandy House in Southampton, which is listed for $35 million

Elliman’s Paul Brennan, regional manager for the Hamptons

opened in October 2008. Overall, the industry is made up of fewer — but larger — brokerages than in the past, since many of the smaller ﬁrms closed or were acquired by bigger companies, noted Aspasia Comnas, executive managing director of Brown Harris Stevens of the Hamptons. Brennan agreed. “The big ﬁrms have come, and they’ve sort of taken over,” he said. “I don’t know how much room there is for more companies.”

New strategies Several ﬁrms have recently made aggressive moves to expand their presence in the Hamptons — notably Saunders & Associates, Nest Seekers International at No. 7 and Devlin McNiff Halstead Property at No. 10. Saunders continued to increase its ranks in 2012, overtaking Sotheby’s International Realty, where Saunders was

28 March 2012 www.TheRealDeal.com

so far this year (see page 52). Meanwhile, the Manhattan-based Nest Seekers swelled in May 2011 when it took over the floundering local franchise of Germany’s Engel & Völkers, a global luxury brokerage that had offices in Southampton and East Hampton. Along with the firm’s facilities, Nest Seekers — which was founded by Eddie Shapiro in 2002, and has operated in the Hamptons for several years — scooped up many of its agents. Nest Seekers now has 26 agents in Southampton, 17 in East Hampton, two in Water Mill and one in Bridgehampton, according to TRD’s data. The firm’s pricier Hamptons listings include a six-bedroom Water Mill home, asking $24 million, and a 40-acre swath of land in Sagaponack on the market for $49 million. At No. 8, Daniel Gale Sotheby’s International Realty, a Long Island franchise

brokerage Devlin McNiff this past October. Despite the merger, the firm now has 19 agents, slightly less than Devlin had last year. But Stuart Epstein, Devlin’s managing director, said the partnership “gives us a strategy for the future and a path forward.” The newly merged firm plans to open additional offices in the bigger Hamptons markets, Epstein said, although he declined to reveal specifics. The relationship with Halstead “gives us the horsepower and the back-up and the capital and the marketing and the technology to do so,” he said. However, competitors described the partnership as “mystifying” and “weird,” given that Brown Harris Stevens, which is also owned by Terra Holdings, already has an established presence in the Hamptons. The sister companies already compete

a market that is showing signs of more sales activity, brokers said. As a mild winter gave way to spring, brokers said they saw more homeseekers, bids and accepted offers than last year. In the second quarter of 2012, there were 414 sales in the Hamptons, a 9 percent increase over the same period last year, but the median sale price slid 14.3 percent to $900,000, according to Town & Country. Some have seen that activity continue through July: Saunders noted that there was no Standard & Poor’s downgrade of U.S. debt this year to throw off a nascent recovery. But Elliman’s Brennan said he had seen activity slow down since the end of the ﬁrst quarter. “It’s been busy, but not to that extent,” he said. Others are seeing increasing demand in particular areas. Continued on page 92

www.TheRealDeal.com August 2012 51

The Hamptons

The East End’s biggest hits The year’s top 10 priciest sales (so far) in the summer-home hot spot By Leigh Kamping-Carder he 10 most expensive sales on Long Island’s East End so far this year range from a $28.5 million sale on Southampton’s ultra-ritzy Meadow Lane to the $13 million sale of the “Windmill house” in Bridgehampton. Those eye-popping figures still don’t quite compare to the priciest sale of 2011: Florida billionaire Jeffrey Greene’s $36 million purchase

T 1

of the 55-acre Tyndal Point. In fact, the top 10 sales of last year all exceeded $20 million. And 2012 is not over yet. Below, TRD examines the most expensive residential deals to close in the first six months of this year, based on our own research and an analysis of records from Internet data providers StreetEasy, PropertyShark and Hamptons Real Estate Online.

3 Marc Rowan Terry Cohen

$28.5 million: 322 Meadow Lane (Southampton)

$27.5 million: 43 Surfside Drive (Bridgehampton)

he $28.5 million sale of finance bigwig Marc Rowan’s six-bedroom home, which closed in February, is the most expensive deal on the East End in 2012 to date. Marcella O’Callaghan, a senior vice president at the Corcoran Group, had the listing. Rowan, who cofounded Apollo Global Management, bought the Southampton estate for $16.3 million in 2005, public records show. He first listed it in late 2008, although he took it on and off the market in the intervening years; the last asking price was $34 million, according to StreetEasy. The 9,000-square-foot home, situated on a 2.3-acre oceanfront parcel, has floating staircases and panoramic ocean views, according to the listing. The buyer was reportedly fellow financier Carlos Alejandro Pérez Dávila, a managing director of investment advisory firm Quadrant Capital Advisors.

ivorce lawyer Irving Shafran, his wife, book editor Judith Shafran, and their daughter, restaurateur Pamela Schein, quietly began shopping their vacation home at 43 Surfside Drive in March, with the aid of Saunders & Associates broker Terry Cohen, according to the firm’s founder, Andrew Saunders.

The

Despite the hush-hush listing, the 11-bedroom residence sold for $27.5 million three weeks later, making it the third-most-expensive trade of 2012 so far, public records show. The buyer was an anonymous LLC. The Shafrans bought the oceanfront Bridgehampton estate for $13.8 million in 2005, according to public records. In another one of the biggest deals of 2012 (see No. 10), Schein purchased a home down the road.

3 10 John Pickett, Jr.

4 Tim Davis

$28 million: 174 Further Lane (East Hampton)

isted with Corcoran’s Tim Davis, this seven-bedroom contemporary mansion sold for $28 million in March. It originally went on the market in 2011 for $38 million. Davis declined to identify the seller or buyer, other than to say that they both work in finance. According to public records, the seller bought the property for $9.85 million in 2004, then enlisted New York design firm Fox-Nahem Associates to renovate and enlarge the home, bringing it up to 7,500 square feet. The buyer purchased the 3.5-acre estate while the renovation was still in progress, said Davis, who represented both parties. “This person came along and said, ‘I’ll take it right now from you,’” he said. “There are so few oceanfront properties that ever come on the market for sale in East Hampton.”

52 August 2012 www.TheRealDeal.com

$24 million: 171 Great Plains Road (Southampton)

he so-called “Beechwood” estate in Southampton sold for $24 million in March —another coup for Corcoran’s Tim Davis, who had the exclusive. Sellers Robin and John Pickett, Jr. — the latter best known for owning the New York Islanders NHL team in the 1980s and 1990s — spent three years constructing the house.

The home is a 17,000-square-foot, nine-bedroom, 11.5-bathroom mansion. It was intended to host the whole Pickett brood, but proved too large when one of their children moved to the West Coast and another bought his own Hamptons abode. “It didn’t make any sense to own a house of this size,” Davis said. So the couple purchased a smaller home nearby, and Beechwood was listed for $38 million. The purchaser works at Deutsche Bank, according to Davis.

The Hamptons

$20 million: 89 Lily Pond Lane (East Hampton)

$17.6 million: 1360 Meadow Lane (Southampton)

estchester office developer Lowell Schulman sold his eight-bedroom vacation home at 89 Lily Pond Lane in February for $20 million. To sell the property, he hired his daughter, Ami Schulman, of Manhattan-based brokerage William B. May. The 9,000-square-foot mansion dates back to 1912, when the well-known New York City surgeon John Erdmann used it as a vacation home, the listing said. Its grounds feature English-style gardens and two guest cottages. Of the buyer, listed as a Boulder, Colo.–based entity, Ami Schulman would only say they were “a well-known person.”

eller Judy Rosenberg’s six-bedroom, six-bathroom contemporary house traded in May for $17.6 million. It was listed for $24.5 million in early 2011 and sold in May to an entity called Sheshin LLC. The home is the third listing from Corcoran’s Davis to appear in the top 10, although this one was a co-exclusive with fellow power broker Harald Grant, a senior vice president at Sotheby’s International Realty (see Closing interview on page 106). The residence, designed in the 1970s by the late architect Ward Bennett, overlooks acres of dunes and the ocean, Davis said.

$13.75 million: 186 Crescent Avenue (Water Mill)

lso on Mecox Bay, this property sold for $13.75 million in January. The buyer was an entity based in Valhalla, N.Y, called River Rock Structured Capital LLC. The four-bedroom house belonged to John Sargent, the former president of Doubleday & Co., who died this past February at the age of 87. Sargent put the home on the market before he died, listing it for an ambitious $40 million in July 2010 with Corcoran’s Jason Schommer. Several dramatic price cuts, the most recent of which slashed $6 million off the ask, brought the price tag just below $20 million, according to StreetEasy. In the end, the sale was a “direct deal” without brokers, a Corcoran spokesperson said.

Hamptons 5

10 8

$13 million: 95 Surfside Drive (Bridgehampton)

$18.5 million: 329 Highland Terrace (Bridgehampton)

n May, an anonymous buyer purchased a Bridgehampton spec home known as the Edgefield estate for $18.5 million. James Michael Howard, an interior-design firm based in Atlanta, Ga., and Jacksonville, Fla., built the 11,000-square-foot house, putting it on the market for $19.75 million in June 2011 while it was still under construction. Corcoran’s Gary DePersia and Brown Harris Stevens’ Martha Gunderson had the co-exclusive. The house, situated on 2.6 acres, has seven bedrooms, two staff suites, a wine cellar and exercise and massage rooms, the listing said.

$15.1 million: 200 Bay Lane (Water Mill)

his $15.1 million Water Mill sale closed in April. The listing was a co-exclusive between Sotheby’s Grant and Corcoran brokers Susan Breitenbach and Peter Huffine. The seller, an LLC, first listed the property for $21.5 million in 2009, but the final asking price was closer to $18 million, according to PropertyShark. The buyer was an entity called One Nineteen LLC. Pop star Jennifer Lopez reportedly checked out the property, but was not the buyer. The eight-bedroom mansion sits on a two-acre parcel that tapers into Mecox Bay.

his Bridgehampton home is nicknamed “Windmill house,” for the prominent windmill in the driveway. Pamela Schein, who is married to celebrity chef Marc Murphy, paid $13 million for the estate in April, records show. The seller was Elliman agent Allison Diana, who marketed the house with Vincent Horcasitas, a former Elliman agent now at Saunders. Diana did not respond to calls for comment. The home, which has 140 feet of ocean frontage, was rented by the Clintons for a month in 2010. Diana put it up for sale in 2009, asking almost $15 million, and increased the price in 2011 to about $17 million, according to StreetEasy. At press time, it was available as a rental, asking $180,000 through Labor Day.

www.TheRealDeal.com August 2012 53

5 BR, 6 BATH WEB ID: 491333

21 EAST 84TH STREET - TH

$17.9 M

4 BR, 3.5 BATH WEB ID: 509460

532 WEST 22ND STREET - PH

$30,000

6 BR, 9 BATH WEB ID: 802410

407 EAST 75TH STREET - TH

$12.5 M

2 BR, 3 BATH WEB ID: 763464

10 WEST STREET - PH

$15,000

2 BR, 2.5 BATH WEB ID: 547994

55 CENTRAL PARK WEST

$4.65 M

2 BR, 2 BATH WEB ID: 301654

303 GREENWICH STREET

$8,000

We define our neighborhoods as much as they define us.

110 Fifth Avenue New York, NY 10011 212.633.1000

730 Fifth Avenue New York, NY 10019 212.242.9900

88 Greenwich Street New York, NY 10006 212.269.8888

45 Horatio Street New York, NY 10014 212.604.0300

26 Astor Place New York, NY 10003 212.584.6100

239 East 79th Street New York, NY 10075 212.929.1400

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

5 BR, 6 BATH WEB ID: 491333

21 EAST 84TH STREET - TH

$17.9 M

4 BR, 3.5 BATH WEB ID: 509460

532 WEST 22ND STREET - PH

$30,000

6 BR, 9 BATH WEB ID: 802410

407 EAST 75TH STREET - TH

$12.5 M

2 BR, 3 BATH WEB ID: 763464

10 WEST STREET - PH

$15,000

2 BR, 2.5 BATH WEB ID: 547994

55 CENTRAL PARK WEST

$4.65 M

2 BR, 2 BATH WEB ID: 301654

303 GREENWICH STREET

$8,000

We define our neighborhoods as much as they define us.

110 Fifth Avenue New York, NY 10011 212.633.1000

730 Fifth Avenue New York, NY 10019 212.242.9900

88 Greenwich Street New York, NY 10006 212.269.8888

45 Horatio Street New York, NY 10014 212.604.0300

26 Astor Place New York, NY 10003 212.584.6100

239 East 79th Street New York, NY 10075 212.929.1400

A new land of milk and honey

Israeli investors ramp up purchases of New York City development sites ith land prices on the rise, Israeli investors have emerged as one of the most active groups of real estate buyers in New York City. Due to factors like recent changes in the E-2 Treaty Investor visa program, players with principals — and funding — from Israel have increased their deal-making efforts. That’s especially true when it comes to buying sites for residential development, particularly for Manhattan and Brooklyn condos, sources say. While Israeli investors have long been attracted to New York, major players like the Elad Group — which entered the New York market in 2000 and handled the redevelopment of the Plaza Hotel — have recently been joined by smaller players like Izaki Group Investments (IGI). And, sources say, Israeli investors have expanded their presence in the crowded New York City market in recent months, carving out an identity as a group that has both cash to spend and a willingness to take risks. Brokers say even Israel-born developer Shaya Boymelgreen, who disappeared from New York’s real estate scene in 2009 after a series of high-profile foreclosures and lawsuits, is back in the game, actively bidding on properties. (Boymelgreen could not be reached for comment.) “There are numerous established Israeli companies, both small and large, as well as first time entrants from Israel looking aggressively for a foothold in Manhattan and Brooklyn,” Eastern Consolidated’s Alan Miller said. He added that they have stepped up acquisitions of — and attempts to acquire — development sites in recent months. “They are outbidding everyone,” he said. The current group of active Israeli buyers includes the newly formed Naftali Group, which has purchased four existing properties and four development sites in recent months, including a 90,000-square-foot site in Boerum Hill, Brooklyn, where it will build an 85-unit luxury rental building. Tel Aviv native Miki Naftali founded the firm last year after leaving his post as the CEO of Elad Properties, the New York subsidiary of the Elad Group. Meanwhile, Fishman Holdings — a subsidiary of Tel Aviv–based telecom giant the Fishman Group — bought 950 Second Avenue, a Manhattan development site, in December. It is also in contract to sell the stalled condo project 5 Franklin Place for $44.75 million to Elad, according to Fishman Executive vice president Yehuda Mor. Elad said it plans to complete the building, and start condo sales in January of 2013. 56 August 2012 www.TheRealDeal.com

And Keystone Group, an acquisition and development company formed by Erez Itzhaki, an Israel native who previously headed the brokerage Itzhaki Properties, last month nabbed Tribeca’s 391 Broadway, with plans to convert it to luxury condos. And that’s not all. IGI took control of a development at 15 Renwick Street in Soho in partnership with real estate investment ﬁrm Glacier Global Partners, following a foreclosure auction on the property last month. They plan to build condos on the site. IGI is also converting 93 Worth Street from a commercial building into luxury condos. In addition, Israeli developer Moshe Shuster’s Victor Homes bought 241 Fifth Avenue out of foreclosure last year, with plans to build a 40-unit condo building. Israeli billionaire Eyal Ofer recently signed on to help with the Zeckendorf brothers’ long-stalled condo project at 18 Gramercy Park, where the development duo has been trying to build since 2007. Sales are expected to launch this fall. And that could be only the beginning. Sources say these Israeli players — and others — are actively searching

Tabibnia said. “[It’s] mind-blowing, of course, because everyone said they’d learned their lesson.” The ﬁrm is currently searching for development sites for clients in Hell’s Kitchen, Soho and brownstone Brooklyn, Tabibnia said.

Flight of capital New York City’s ﬁrst signiﬁcant wave of Israeli real estate investors, including Elad

and AfricaIsrael (which is headed by UzbekiIsraeli billionaire Lev Leviev) began buying up New York properties a decade ago. Barons like diamond magnate Leviev and Nochi Dankner of Israel’s IDB Group, which is involved in everything from insurance to biotech, were “millionaires in business, but became billionaires in real estate,” Farchi said. Their success, combined with recent improvements in the New York market and Israel’s strong economy, has helped prompt the recent boom in development site purchases by their compatriots. “Our success has been a great impetus for them; they are envious of the returns,” Elad’s Thomas Elliott said. “On top of that, there is a sense that prices have bottomed out, and a realization that inventory is low.” In addition to those factors, industry insiders say there’s a “ﬂight of capital” of Israeli money from Europe, which is currently experiencing more severe economic weakness than New York. (Israeli investors have also sought out investments in Florida and on the West Coast, sources said.) Many of the Israelis investing in New York real estate are moguls or companies from other industries — notably, Israel’s booming technology sector — looking to park some capital outside of Europe for a while as a means of diversifying their in-

MA NH AT TA N

W BY GUELDA VOIEN

for more sites. In fact, the market feels almost like it did ﬁve or six years ago, when deal volume was high and many investors overpaid, said Mansour Tabibnia of Azad Property, the Manhattanbased commercial brokerage he and fellow Israeli Barry Farchi founded together this year. “Developments and conversions are getting back into the market in a strong way,”

vestments. Of course, the formula may not be so simple. “I’d caution them that there is more to it than plugging money into a development,” Elliott said. Other companies have accumulated capital from investors in Israel, and need to invest it in a timely fashion — meaning that they want to move quickly, brokers said. “For the right product, especially if it’s a fund that has to put their money somewhere, they will act,” Farchi told The Real Deal. Miller agreed that Israeli investment vehicles currently seem eager to close deals quickly. “[Israelis] aren’t paying more” than other investors, he said, “They are just getting it done.” Another factor is recent changes to the federal E-2 visa program, which allows foreign investors to live in the U.S. while investing a certain amount of capital in U.S. businesses. Earlier this year, the Obama administration changed the rules to allow Israelis to qualify for the program, which requires them to invest as little as $100,000 in a U.S. entity in order to gain a visa, according to Jacob Sapochnick, a California-based immigration lawyer who works with many Israelis. This has made the E-2 visa a favorable alternative to the EB-5 Immigrant Investor Program, which requires an investment of $1 million. While the Israeli government has not yet signed off on the rule change, its anticipated approval of the law has sent investors scurrying to buy property in the U.S., said Sapochnick. He added that the EB-5 program is “much more complicated” than E-2, which takes only around 90 days to push a visa through.

More hands on Sources say the current crop of Israeli investors tends to take a different approach than other investors in the marketplace. Often, they don’t want an interest in an existing building, or to partner with a local operator — they want to build from the ground up. Perhaps due to a higher risk tolerance, Israelis in the market right now “are more willing to do actual development work here than others,” said Andrew Gerringer, managing director of new business development at the Marketing Directors. “Without categorizing or stereotyping a group, Israelis tend to be more aggressive when it comes to real estate,” said David Schechtman, a top investment sales broker with Eastern Consolidated. “They are agContinued on page 90

www.TheRealDeal.com March 2012 00 GRAPHIC BY DEREK ZAHEDI

PR O F I L E

Beyond WalkerTower

The former Verizon building could be just the beginning for the young founder of JDS Development Michael Stern at Walker Tower

The view from Walker Tower

The soon-to-be-converted Verizon building at 435 West 50th Street

BY KATHERINE CLARKE wenty-nine-year-old Michael Stern was riding the elevator in a Verizon-owned building at 212 West 18th Street when he found out that Lehman Brothers had ﬁled for bankruptcy. Stern’s company, JDS Development, wasn’t actively acquiring properties at the time, and he’d been dragged “kicking and screaming” by a broker to check out the prewar building, which Verizon was using as storage for copper wire. But once Stern saw the views from the upper ﬂoors of the Art Deco tower, he knew he wanted to turn it into residential condos. Luckily for the up-and-coming developer, the Lehman Brothers collapse — and its subsequent devastation — discouraged others from bidding on the building, giving him the opportunity to buy it with partner Property Markets

58 August 2012 www.TheRealDeal.com

Group for just over $25 million. Other industry pros thought he was crazy, he said. It was risky, especially in the midst of a ﬁnancial crisis, and the commercially zoned building did not look ripe for residential conversion. “A lot of people couldn’t understand how I’d make this building work as a residential building,” Stern recalled, “but I knew the bones were great.” Four years later, it looks like Stern made the right move. The conversion of what is now known as Walker Tower (after its architect, Ralph Walker) is complete, and it’s one of the only new development condos currently on the market. Stern, now 33, is working with residential brokerage Core to sell the building’s 50 units, some of which have already traded for up to $3,400 per square foot, he said. Despite having just hit the market in June, the building is already more than

25 percent sold. “That deal is a total grand slam,” said Robert Knakal of Massey Knakal Realty Services, who has done deals with Stern but was not involved in the Walker Tower deal. Walker Tower has, to some extent, propelled JDS into the spotlight, particularly in New York City, where Stern previously focused mostly on lower-profile, outer-borough projects. And Walker Tower isn’t the only project JDS is doing with PMG, the Manhattan-based real estate acquisition and development firm where Extell’s Gary Barnett cut his teeth. JDS and PMG now have plans to develop a 70-unit condo at 435 West 50th Street, another Verizon building and a 100,000square-foot retail and residential project at 105 West 57th Street. John Cetra of architecture firm Cetra/ Ruddy, which oversaw the conversion of

Ziel Feldman

Walker Tower, said Stern may be able to build on his current momentum. If Stern “is able to keep that going, with the right properties, the right location, the right timing,” Cetra said, “he could be a real player.”

On deck JDS, working alongside PMG, is currently one of the city’s most active development firms, brokers said. Last year, JDS and PMG paid just over $20 million for 101,000 square feet of the West 50th Street Verizon building, including the penthouse, lobby and the 10th through 17th floors. The 70-unit condo, also designed by Cetra/Ruddy, is slated to hit the market in the spring of 2013. Perhaps JDS’s highest-profile project with PMG, however, is at 105 West 57th Street, where the partners in May paid Continued on page 91

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

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PR O F I L E

Risky business T

BY ADAM PIORE here have undoubtedly been less fraught times to be a banker approving construction loans far north of $100 million. But back in the summer of 2010, when Steven Kenny was promoted to head up commercial real estate banking for New York and New Jersey at Bank of America, the world of lending was even darker. That year, Kenny estimates he was still spending 50 percent of his time dealing with distressed loans, and the bank’s commercial lending unit, as one market participant put it, was “very much out of it.” But in the two years since assuming the job, the softspoken Long Island native with rimless glasses and saltand-pepper hair has hardly sat still. In recent months, he’s put BofA’s name behind two of the most high-profile speculative projects in the city: a $165 million loan at Edward Minskoff ’s 51 Astor Place, a flashy 400,000-square-foot, 13-story office tower in the heart of Astor Place, and, perhaps most noteworthy, on a $700 million construction loan at Gary Barnett’s 90-story, under-construction condo-hotel One57. At the latter project, the bank signed on as the administrative agent — making it responsible for parceling out the funding after evaluating the project’s progress at each phase of development — and led the syndication on the loan. And, Kenny — whose official title is commercial real estate banking region executive for New York and New Jersey — says he is not done lending yet. “Make no mistake, we want to grow the balance sheet and we want to grow it smartly,” Kenny said in a rare sitdown interview. “The vision is relatively straightforward. First and foremost, we want to grow the book.” But while BofA is “growing the book,” Dan Fasulo of Real Capital Analytics noted that “most other banks are playing it safe.” When they do issue construction loans, Fasulo and other industry experts said, they are often doing so at projects where tenants are already in place and a certain degree of cash flow is locked down for the long term.

60 August 2012 www.TheRealDeal.com

Only a small group of banks have the capital and the risk appetite to do speculative lending in today’s environment, industry experts say. In addition to BofA, that select club includes regional banks like New York Community Bancorp and M&T Bank,

Steven Kenny at Bank of America has put the lender’s name behind some high-proﬁle NYC projects, but he says they’re not as risky as some in the industry may think

be facing the most challenging legacies from the subprime crisis. BofA, said Paul Miller, an analyst at FBR Capital Markets & Co., an Arlington, Virginia–based investment bank, is a “dysfunctional bank,” trying to get out of several lines of business.

This year, the bank announced it would not seek to buy back stock or increase its dividend, focusing instead on building capital and absorbing mortgage-related losses. These efforts appeared to pay off in March when the bank passed a federal stress test, conﬁrming

Steven Kenny, who heads commercial real estate banking for New York and New Jersey at Bank of America, said, “We want to grow the balance sheet and we want to grow it smartly.”

“I’m not surprised that people do view the [One57] transaction as risky. What I always say to people is, ‘I know all of the details,’ and ... we did our due diligence. We gathered the facts.” STEVEN KENNY, BANK OF AMERICA along with bigger industry players like JPMorgan Chase and — perhaps the most active participant — Wells Fargo, which The Real Deal proﬁled in last month’s issue. But some argue that of all of those banks, BofA has the most to lose. That’s because its loans were issued at a time when other areas of the bank still remain in relative disarray. Indeed, along with Citigroup it is widely recognized to

He noted that BofA was hit particularly hard in the residential market thanks to its ill-timed acquisition of mortgage giant Countrywide Financial, among other things. Unlike JPMorgan and Wells Fargo, the bank has been unable to issue a signiﬁcant dividend or buy back stock in recent months. In 2011, the Federal Reserve rejected a modest dividend increase requested by CEO Brian Moynihan, a stinging embarrassment.

that it had signiﬁcantly improved its capital levels. But when the Fed considered a hypothetical worst-case scenario — that included a spike to 13 percent unemployment nationally — it found that BofA stood to lose the most through 2013 out of all 19 banks it analyzed. (Citigroup was second.) In addition, Moody’s downgraded BofA in June, a move that could hit the bank with a reported $2.7 billion in extra borrowing costs and collateral requirements when it secures derivative positions — though Citigroup, Goldman Sachs, JPMorgan and Morgan Stanley also saw their ratings cut.

In the game Still, commercial lending remains a growth area for lenders. It hit $300 billion nationally at the end of 2010 and $314 billion at the end of 2011, Miller noted. According to a BofA spokesperson, the bank issued $39 billion in loans na-

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

PR O F I L E tionally in 2009, $45 billion in 2010, $36.5 billion in 2011 and $8.9 billion through the first quarter of this year. New York numbers were not available, but the bank has been involved in a number of high-profile deals in the city in addition to One57 and 51 Astor Place during the past few years. It was behind a $467 million loan to Google, which helped the tech firm purchase its office building 111 Eighth Avenue in December 2010 (the total price was about $1.7 billion, making it the largest deal of the year), along with loans at

greater number of less risky term debt. “If you look at our portfolio now, it’s a little inverted,” Kenny said. “We are a signiﬁcant construction lender, and we’re going to continue to be a very active and big construction lender, but we will balance that more wisely with term debt. We will look to balance our portfolio with more bridge, opportunistic term debt and complement that with construction lending.” That sort of risk analysis is arguably more essential than ever. And Kenny has plenty of experience in that arena.

BofA was the lead bank on One57’s $700 million syndicate loan.

BofA issued a $165 million construction loan for 51 Astor Place.

Developer Edward Minskoff

BofA CEO Brian Moynihan

510 Madison Avenue and at other buildings. In addition, the bank has financed “at least half-a-dozen ground-up multifamily construction transactions,” and has even financed two large land purchases, which some consider the most speculative type of deal. But Kenny would not release the location or any other specifics. It’s also backed several residential term deals in Manhattan and Fairfield County, Conn., as well as office and retail deals. Those deals involve more traditional loans for preexisting assets, where all of the money is lent on Day One and interest begins accumulating immediately — instead of being doled out piecemeal as construction benchmarks are met in riskier speculative projects. In the months ahead, Kenny said, the bank will continue to finance construction projects, but also intends to “originate and balance our portfolio” with a

28 March 2012 www.TheRealDeal.com

More importantly, he said, the experience taught him about risk. With his boss, Kenny helped write new policies and recruit staff to make sure the bank performed more stringent due diligence on both clients and the projects they hoped to ﬁnance, he said. In 1997, he left for Bank of New York to work as a lender, focusing mostly on income-producing commercial real estate assets from $2 to $60 million. There, he rose to become risk manager for all new deals. In that job, as well as in his current

Forged by crisis Kenny got a big break during the savings-and-loan crisis. The son of an elevator mechanic and a nurse, he grew up in Holtsville, Long Island, majored in accounting at SUNY Plattsburg, and after a stint doing auto ﬁnance, took a job reviewing the books at a small Brooklynbased thrift bank in 1986. One Monday morning, he arrived back from vacation to discover that all but one of the bank’s lending staff had been dismissed, and that the bank had been served a cease-and-desist order by the FDIC. The bank needed somebody to produce a comprehensive report for regulators. Kenny, then 27, volunteered. It took him several months to analyze the bank’s 200 problem loans. But in the end, he made a presentation to the senior executives of the company that won him attention, and ensured he would remain in the center of the bank’s efforts to recover.

Developer Gary Barnett

one, the factors Kenny and his team consider before lending aren’t especially surprising: client selection, location, business plan and amount of cash or equity the borrower is putting into the deal. But Kenny remembers that during the S&L crisis, “many of [those] things were not done.” Some of the properties bankrolled by the bank’s lending ofﬁcers, he suspected, had never been inspected. How else to explain assets located off major highways, but nowhere near an off-ramp? “If you couldn’t access it off of Hempstead Turnpike, how valuable was that?” Kenny said. Those jobs, and another that followed at Fleet, drove home the importance of the fundamentals. “[In lending,] the facts will generally lead you to the right decision,” he said. “So you have to do your due diligence, and that takes time.” “There are times when all of us have

made lending decisions and lent money where we thought we had all the facts — and we did have all the facts and we still made the wrong decision,” he added. “That’s part of the nature of lending money. It’s not a business where people bat a thousand and we all recognize that. But it goes back to the fundamentals: If you choose your client well, they will likely work with you when you’ve made that mistake.”

Working with the known In keeping with that philosophy, most of the clients BofA is backing on speculative properties today are long-time clients with strong track records, Kenny noted. That was certainly the case at Barnett’s One57, where public records show at least two loans issued on the project — a $536 million building loan to pay for construction, and a $163 million project loan to pay for other costs, such as purchasing development rights from neighboring properties. As the syndicate leader, BofA retained an undisclosed portion of the loans on its balance sheet, but also sold portions of the loan to the New York branch of Banco Santander, S.A.; Abu Dhabi International Bank; Capital One; and the Bank of Nova Scotia, according to news reports. Kenny said the deal made sense once the loan terms were hammered out. “We had been talking to the developer partner for a long period of time, trying to give them advice on how we thought the transaction could get done,” Kenny said. “We felt like we could continue to advise them on what structure could make sense in the marketplace, and mitigate the risk to ourselves by putting that structure in place.” “I’m not surprised that people do view the transaction as risky,” he said, adding that, “What I always say to people is, ‘I know all of the details,’ and ... we did our due diligence. We gathered the facts.” In addition to closely evaluating the marketplace and the location, Kenny said, the bank was reassured by deals worked out between the borrowers and those committed to run the hotel portion of the development. Those factors and others reduced the risk that the project would fail to reach the levels needed for BofA to break even on the loan, and, in fact, left Kenny confident the bank would turn a healthy profit. Kenny would not release details of the deal, and Extell declined interview requests. But Gino Martocci, regional president for New York City and Long Island for M&T Bank, noted that the amount of equity lenders are requiring borrowers to put into speculative deals has increased significantly over the last five years. Back in 2006, the market would Continued on page 90

www.TheRealDeal.com August 2012 61

ARCHITECTURE REVIEW

JA M E S G A R D N E R

Branding gone too far?

The planned Baccarat New York hotel may be an overreach for both the architect and the marketing team

ust opposite the Museum of Modern Art, a new hotel and condominium is set to rise over the site of the former (and future) Donnell Library. The project is to be called the Baccarat New York. Following the lead of the Bulgari hotel chain, it seeks to invoke a storied name from luxury retail — in this case, one that has been synonymous with elegant crystal products since before the French Revolution. But the building, judging from a recently released rendering, promises little beyond its name to suggest the beguiling brightness that we associate with crystal. A partnership between Starwood Capital Group and Tribeca Associates, the project is scheduled to be completed and ready for business in 2014, to coincide with the 250th anniversary of the crystal maker’s founding in 1764. And yet, certainly there is a point beyond which branding can be stretched too far: Surely, the simple fact of sticking a name on the side of a building is not enough to establish any important connection between two domains as disparate as luxury crystal and luxury hotels. In any case, Barry Sternlicht, the CEO of Starwood Capital Group, and his partners have decided to give it a try. According to a news release issued by the developers, the factories that produce Baccarat crystal are so intent on attaining perfection that 60 percent of what they produce is melted down and recycled, even for the slightest irregularity. In much the same spirit, the developers claim, their new ultraluxury hotel, which is reportedly costing $403 million, will rise to an equally exacting standard. Indeed, to quote Sternlicht, Baccarat is an “iconic European luxury brand,” and the hotel will be “sensuous, luxurious and discreet.” The hotel will include a bar on a garden terrace that is to be heavily blinged out with crystal as well as an on-site store selling crystal from Baccarat, a brand that Starwood acquired in 2005, according to the Wall Street Journal. But it’s hard to imagine the crystal brand leaving much more of a mark on the project. The 605-foot-tall building, designed by Skidmore, Owings & Merrill, will rise 46 stories, with interiors by the high-concept French designers Gilles et Boissier, who are responsible for, among others things, the restaurant Buddakan in the Meatpacking District. The hotel — which will reportedly take up ﬂoors four through 12 — will 62 August 2012 www.TheRealDeal.com

contain 114 rooms and 26 suites. This being Manhattan in the new millennium, there will also be 64 luxury condos in the building. The condos, which will reportedly reside on the ﬂoors above the hotel, are scheduled to go on sale at the

Although the ﬁrm of Skidmore, Owings & Merrill was responsible for many new developments in Manhattan after World War II, and although it’s remained remarkably proliﬁc in more recent times, it has been known — with

Above: A rendering of the Baccarat New York, which is being developed by Starwood Capital Group and Tribeca Partners. Left: CEO of Starwood Capital, Barry Sternlicht.

beginning of 2013. At the base of the new building there will be a four-story public library, the inclusion of which was essential to acquiring the rights to build the Baccarat project. The new 29,000-square-foot Donnell Library will look very different from the original both inside and out. Up until it closed its doors in August 2008, the Donnell felt like a time warp from the 1950s. Designed by Aymar Embury II, — the court architect of Robert Moses — and opened to the public in 1955, its drab linoleum ﬂoors and free-ﬂowing spaces recalled, in the dreariest way imaginable, that stale end of postwar American Modernism that dominated American institutions for over a generation.

only a few exceptions — for its work on office buildings and the occasional bank. That SOM has at least some skill with residences and hotels was proved a few years back by its distinguished work on the Trump International Hotel and Tower in Chicago. Here in New York, however — with the exception of Manhattan House from 1950 and the mixed-use Time Warner Center (which has condos, a hotel, offices, retail and cultural venues) from half a century later — this firm has built precious few residences. It should come as no surprise, then, that their newest building looks like one of the square, remorselessly rectilinear office towers for which the firm is mainly known.

What the renderings for the Baccarat New York indicate is that, if ever there were an architectural firm that was square — in the sense of not being hip — that firm is SOM. They are square, not in the sense of being eagerly establishmentarian — as one might say of Robert Stern’s 15 Central Park West, which caters to the neo-stodgy aspirings of today’s plutocrats. Even when SOM throws in a few curves, like it did in the Time Warner Center or chamfers the corners, as at One World Trade Center, or attaches opalescent flanges to the façade, as at 300 Madison Avenue, the firm still seems distinctly uncomfortable any time it has to stray far from the safety of its Euclidian box. That is proved in SOM’s nearly completed office tower at Boston Properties’ 250 West 55th Street, as well as in the renderings for the Baccarat New York. In an earlier rendering, the entire façade looked dark and forbidding — almost as though its cladding were destined to resemble that of the Millenium Hilton Hotel, designed by Eli Attia, beside the World Trade Center, or the Trump World Tower at 845 United Nations Plaza, designed by Costas Kondylis. The latest rendering, however, mitigates that severity with what looks to be a clear glass curtain wall. But the sides and summit of the structure appear to have been surrounded by a severe black jacket that recalls, with differences, this firm’s work, over 30 years ago, at 9 West 57th Street and at the Grace Building on West 42nd Street. Even the division of the building into a base, a shaft and a summit recalls an earlier era. Near the top of the structure, one of the sidewalls has been perforated with an opening in an attempt to make the building seem a little less boring, but it is unlikely to help. In the past decade, any number of architects — from Jean Nouvel at 40 Mercer Street to Shigeru Ban at the Metal Shutter Houses to Kohn Pedersen Fox at the office tower 505 Fifth Avenue — have rediscovered the joys of Modernism, even as they have had the grace and the imagination to soften and energize the Modernist idiom. SOM, as well, despite their brief flirtation with historicism in the late 1990s at 383 Madison Avenue, has now returned with a vengeance to the Modernist fold. But if Nouvel, Ban and KPF are practicing a kind of neo-Modernism, an improved and more elegant Modernism, the architects at SOM, with some notable exceptions like 7 World Trade Center, are still designing as though it were the 1970s. TRD

icon.

The suburban squeeze In towns outside NYC, overall sales volume rises, but pricey houses struggle

A home at 1 Cross Road in Bedford, N.Y., currently on the market with Houlihan Lawrence for $2.07 million.

BY JANE C. TIMM ast year, Long Island real estate broker Maggie Keats worked with a young family looking for houses in Sands Point priced up to $2.5 million. But the family didn’t buy anything, and when they started looking again this spring, they’d changed their price point. “They came to me and said, ‘We’ve reevaluated our budget. If we’d bought last year we could have spent that much, but we just don’t feel comfortable doing that now,’” said Keats, who works in Prudential Douglas Elliman’s Manhasset office. In late June, her clients finally bought a Sands Point home, paying around $1.8 million for a slightly smaller house than they’d originally envisioned. After a prolonged real estate slowdown, housing markets in New York City suburbs are finally starting to see a recovery. But while luxury Manhattan homes are currently selling faster than more modestly priced properties, the opposite is true in many suburbs. While activity is on the rise for cheaper suburban homes, pricey houses in some of these areas — especially those with long commutes into the city — are sitting on the market, brokers said. Suburban homes priced between $2 and $3 million have seen “a clear drop-off in sales activity this year to date,” said Jonathan Miller, CEO of Miller Samuel Appraisers. That trend is particularly apparent on Long Island, which saw just 44 sales priced between $2 and $3 million from January 64 August 2012 www.TheRealDeal.com

Long Island home sales, 2011 vs. 2012

A home at 9 Tomney Road in Greenwich, Conn., listed with Prudential Connecticut for $2.69 million.

2011

2012

% CHANGE

Total sales

6,504

6,589

1.3%

Sales over $3M

-3.8%

Source note: Data is for single-family homes sold from January to mid-June 2012, versus the same period of last year. Data comes from Miller Samuel and the Multiple Listing Service of Long Island.

Fairﬁeld County home sales, 2011 vs. 2012

A $2.98 million listing at 16 Wayside Lane in Scarsdale, N.Y.

2011

2012

% CHANGE

Total sales

2,154

2,356

9.4%

Sales over $3M

-40%

Source note: Data is for single-family homes sold from January to mid-June 2012, versus the same period of last year. Data comes from Miller Samuel and the Greater Fairﬁeld County CMLS.

Westchester County home sales, 2011 vs. 2012

A home at 30 Lookout Circle in Larchmont, N.Y., on the market for $2.39 million.

to mid-June of this year, down from 61 in the same period in 2011, according to data compiled by Miller. Long Island, as well as Fairﬁeld and Westchester counties, have also had fewer properties priced over $3 million trade this year than last year, although the total number of transactions for all three areas has increased. One major reason for this trend is the

2011

2012

% CHANGE

Total sales

1,476

1,611

9.1%

Sales over $3M

-9.4%

Source note: Data is for single-family homes sold from January to mid-June 2012, versus the same period of last year. Data comes from Miller Samuel and Empire Access MLS.

continuing credit crunch. Many high-end buyers are young families moving from Manhattan, with one or both parents working on Wall Street. Five years ago, these buyers would have put a 10 to 15 percent down payment towards their purchase; today, they’re required to put down 30 percent, or even as much as 50 to 60 percent, brokers said. As a result, buyers who previously would

have stretched to buy a home priced above $2 million are now choosing to play it safe with slightly less expensive purchases. And those choices are having a noticeable impact on the housing market in some suburban communities. “A lot of the architects we work with have mentioned that they’re building houses between 4,000 and 6,000 square feet, versus Continued on page 90

www.TheRealDeal.com March 2012 00

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Building blocks:

By Katherine ClarKe

How many buildings do you own? Korman Communities has 26 total properties across the country, with 7,000 units. AKA [Korman’s extended-stay brand] has nine properties, including four in New York, with roughly 100 units per property.

How long has your family been in the real estate business? My great-grandfather started out developing land in Philadelphia — along with his two sons — and building homes. They built about 3,000 homes over about a 40-year period, and then my father and grandfather started developing multifamily residential buildings. How did you get into the family business? I started working in the summer from age 10, and then from age 16 every weekend and every summer. I was cleaning the toilets, doing the landscaping, picking weeds, learning how to change outlets and fix air-conditioning. How did Korman start operating extended-stay properties? My father developed a circular high-rise in Center City, Philadelphia, in the early 1960s. Due to the apartments’ pie-shaped floor plans [which made them unsuitable for tra-

Vital Stats: Name: Larry Korman Age: 49 Hometown: Philadelphia Title and Company: copresident of Korman Communities, president of AKA Currently living in: Fort Washington, Pa.

ditional layouts], he created the first luxury furnished short-term suites with hotel-like services. … In 1995, my brother, myself and my father wanted to take what we had established national. We started purchasing new apartment buildings in Delaware, Virginia, North Carolina and Georgia. ... When we got to New York [in 2005], we realized that in order to be very luxurious, our buildings had to have 100 suites or less. That was different from our traditional garden-style apartments, and therefore needed to be part of its own brand, AKA, which stands for A Korman Accommodation. Are you looking for more buildings? The next priority for AKA is definitely to open up a property in downtown Manhattan, in Soho or Tribeca. We might go with new construction, which we haven’t done, to build it exactly the way in which we envision it. We’ve been working on it for four years and we’ve identified some potential locations. We’re hoping to start by the end of this year. It could be two years until it opens.

Landlord life: What’s been your strangest tenant experience? A couple of years ago during the presidential election, the Secret Service for Barack Obama, Hillary Clinton and John McCain were staying with us all at the same time [in the Washington, D.C., AKA property]. We had our restaurant open 24 hours a day to meet the needs of the Secret Service coming in and out. And when Obama was elected, we had the governor of New York stay with us, Sting — a whole host of interesting celebrities. It was like a weeklong block party. We had a fleet of electric golf carts taking people out and about. Do you have a lot of celebrities staying in your properties? Throughout all of 2011, we had the entire production staff of “Men in Black 3” in our Central Park property. One of the odd requests we got was Will Smith asking if we could close our fitness center from about 7 p.m. till 9 p.m. so he and [then-wife] Jada could work out, even though they were the only members of the production not staying there. I said, “You’re absolutely welcome to use it, but … we don’t close anything off to any resident.” He ended up getting his own workout trailer. … The very first apartment Will Smith ever lived in was a Korman Suites building in Phil Philadelphia. I had just graduated college and I was in the office by myself when he and Jazzy Jeff came in. They had just purchased a gold BMW with gold wheels, and someone had just stolen all the wheels off of it. They were very upset. I remember thinking that Will was the one that was very flustered, Jazzy Jeff was very cool.

The bottom line: What do you charge in AKA buildings? AKA rates in New York City are approximately $295 per day for monthly stays, $495 per day for weekly stays and $695 per day for daily stays. Our rates fluctuate based on season and suite type.

AKA Times Square

66 August 2012 www.TheRealDeal.com

Are you raising or lowering rates across your portfolio? They were at their high in 2008, their low in 2009 and have been slowly coming back up in 2011 and 2012. They’re back to where they were in 2008 now. TRD

Manhattan

AKA’s New York properties —

PHOTOGRAPH FOR THE REAL DEAL BY CHRIS MARTIN

Will the CitySpire penthouse get its $100M ask?

Luxury brokers are skeptical of the record price Steven Klar’s Midtown triplex is seeking

BY KATHERINE CLARKE hen Long Island–based real estate developer Steven Klar listed his Midtown penthouse with Prudential Douglas Elliman’s Raphael De Niro late last month, many industry experts raised a collective eyebrow at the hefty $100 million asking price. The unit is currently the most expensive residential listing on the New York City market, and if it were to sell for that price, it would set a new record. Earlier this year, Sandy Weill’s 15 Central Park West spread became the most expensive Manhattan apartment ever sold when it closed for $88 million, and in May, a U.S.-based buyer reportedly paid more than $90 million for a spread at One57. But a handful of luxury property brokers told The Real Deal that Klar’s 8,000-squarefoot triplex unit, in the CitySpire condominium at 150 West 56th Street, does not warrant such an exorbitant price tag despite its panoramic Central Park views. Constructed in 1987, CitySpire is simply too old to compete with the likes of nearby 15 Central Park West, completed in 2007, or architect Christian de Portzamparc’s One57, currently under construction. “I haven’t seen the apartment, but based on the square footage, I would say it’s definitely overpriced,” said Frank Ragusa, an independent broker who has sold more than a dozen apartments at CitySpire, which is at 150 West 56th Street. “It’s probably closer to a $50 million listing.” Klar bought the 8,000-square-foot apartment, on the building’s 73rd, 74th and 75th floors, raw in 1993 from a lender that took control of the building from developer Bruce Eichner. He paid $4.5 million for the property, which is now listed by De Niro and his Elliman colleague Victoria Logvinsky. The building, designed by Helmut Jahn, has a 24hour doorman, a fitness center and a pool. “It was built in the ’80s and it was a great building in the ’80s, and it was even a great building in the ’90s,” Ragusa said. “But $100 million is a lot of money now for an apartment in the CitySpire.” Klar may be hoping that the spillover from Extell Development’s One57 will offer up a few potential buyers for the unit, speculated Nikki Field, a top-producing broker at Sotheby’s International Realty. “We can only hope that the recent stratospheric sales at One57 may have an overflow effect on CitySpire and the entire neighborhood,” she said. New York Residence’s Thomas Guss, who is currently listing a three-unit combination penthouse at the Centurion at 33 West 56th Street for $39 million, said he’s seen an uptick in interest in the listing since buyers bePHOTOGRAPH OF DE NIRO FOR THE REAL DEAL BY DEREK ZAHEDI

gan ﬂocking towards Extell’s 90-story tower at 157 West 57th Street. “Since One57, we have seen a lot more trafﬁc at the Centurion for the penthouse,” he said. “Suddenly, at $39 million, it looks like a steal. People who are purchasing something at this price point are of course comparing and exploring other options in the area.” Nonetheless, the CitySpire listing seems vastly overpriced, Guss said. “I can understand that someone who

town rivals. Guss’s Centurion unit may only be on the 19th ﬂoor, but it’s offering 9,098 square feet for $39 million, or $4,286 per square foot. The third priciest listing in Midtown, listed by Ryan Serhant and Nick Jabbour of Nest Seekers, is asking $21.94 million for 5,323 square feet of space, or $4,121 per square foot. The record per-square-foot closing price for a New York City residence was set by Weill’s apartment at $13,048 per

of your plate.” While neither Klar nor his broker De Niro were immediately available for comment, Klar told the New York Times in an interview earlier this week that he thought the unit deserved $100 million. “Art is what people are willing to pay for, and an apartment like this is like a piece of art,” he told the newspaper. In one exception, Nest Seek-

The $100 million CitySpire listing. Above, Elliman broker Raphael De Niro.

“If you have a penthouse on the 19th ﬂoor ... you can eat outside. On the 80th ﬂoor you could not, because ... the food would be blown off of your plate.” THOMAS GUSS, NEW YORK RESIDENCE owns a property like this wants to explore the market in light of recent transactions in the area,” he said. “But they will have to be aware that other new buildings are coming up, such as the new building on the site of the former Drake Hotel.” In order to sell the unit, Klar “will have to be more competitive” in his pricing, Guss added. Klar is asking $12,500 per square foot for his six-bedroom spread, almost three times as much per square foot as the nearest Mid-

square foot earlier this year. Brokers also noted that one of the CitySpire penthouse’s main selling points — its ultrahigh wraparound terraces — may not be as much of a draw as it seems. “No one wants a balcony that high in Midtown due to crazy wind,” one broker said in an e-mail, while Guss speculated: “If you have a penthouse on the 19th ﬂoor, like at the Centurion, you can eat outside. On the 80th ﬂoor you could not, because the air pressure would be so much that the food would be blown off

ers’ Serhant told The Real Deal he thought the price might be achievable. “It’s $12,500 per foot that you can move into today,” he said. “For a triplex penthouse that you don’t have to wait a year for, it could achieve that number.” The apartment may be an appealing prospect for a foreigner looking to invest their money in New York as a safe haven for investment, Serhant added. “We’re seeing a lot of people just looking to put their money here because they know it will hold.” TRD www.TheRealDeal.com August 2012 00 67 www.TheRealDeal.com March 2012

Q&A

Connecticut wants you Constitution State courts ofﬁce tenants with generous incentives and basks in big projects, though leasing market remains sluggish

BY MELISSA DEHNCKE MCGILL onnecticut’s commercial real estate market has long struggled to compete with its massive neighbor to the south, New York City. And the 2008 financial crisis dealt the state a massive blow from which it has yet to totally recover. In this month’s Q&A, The Real Deal checked in with brokers in Connecticut to find out how commercial real estate is holding up in Fairfield County, the area of the Constitution State closest to Manhattan. Generally, brokers say that activity has slowed down this year for both leasing and investment sales, but note that opportunistic buyers are finally starting to purchase buildings as lenders stop the practice of extending loans and allow buildings to fall into distress. Brokers say Greenwich — known for its hedge funds and tony retail strip — as well as Stamford and other cities closer to Manhattan are performing best, while northern Fairfield County is struggling most.

Christian Bangert

principal, RHYS Commercial How is the office market in Fairfield County holding up for both leasing and investment sales? Overall, last year was probably a little stronger and more active than I’ve seen in the first half of this year. The main thing is that deals in general — and office leasing especially — are taking twice as long as they did in the pre-2008 days, when some lease deals were done in three to six months. It now takes six to 12 months to do the same deals. Who’s in control of the office leasing market in the area right now — landlords or tenants? Tenants definitely have the upper hand, especially in the sense of the concessions — such as free rent and improvement allowances. It’s easier to retain a tenant than

seem to be at those lower rates. How is Stamford doing compared to other Fairfield County areas for investment sales? Stamford is one of the most active — if not the most active — of the larger cities. Stamford pulls more Class A tenants because it’s closer to Manhattan and has the major train lines. Danbury is still very sluggish and Norwalk is also fairly stagnant. Greenwich seems to still be doing very well. We still see a lot of action in the higher-end boutique markets like Westport, New Canaan and Darien. Last year, UBS contemplated moving back to Manhattan from Stamford. It decided to stay, but how much of a challenge is it to pitch Connecticut as an office location? UBS only agreed to stay for the next three to five years. The general belief is that the reason it had to get back into the city is that for picking true financial talent, you

“Harbor Point is one of the major projects on the East Coast and is creating a lot of buzz. A lot of those properties around the perimeter are being snatched up by other developers.” CHRISTIAN BANGERT, RHYS COMMERCIAL to get a new one, so if a tenant is looking to move, you see more aggressive offers from the building across the street than from their current landlord. Moving costs are part of the negotiation. Purely on rent, there has been very little change in the past one to three years. It dropped signiﬁcantly from ’08 to ’09 and has stayed level since. It varies from building to building, but 20 to 30 percent was the rent adjustment across the board in most markets, and they still 68 August 2012 www.TheRealDeal.com

have to be in the city. Not everyone lives in Stamford or wants to do the reverse commute. So we feel pretty strongly that we will probably see UBS slowly migrate out of Stamford back to the city and that will put a big chunk of ofﬁce space on the market. We’ve written about the $3.5 billion, mixed-use Harbor Point project in Stamford and the new Chelsea Piers outpost

Stamford, the site of UBS’s U. S. headquarters, has seen a burst of development activity lately. The developer Building and Land Technology is erecting a $3.5 billion mixed-use project called Harbor Point. The project has already drawn in businesses like Starwood Hotels, which moved its global headquarters there early this year, as well as high-end furniture store Design Within Reach and Fairway, the popular supermarket. Also in Stamford, a 400,000-square-foot Chelsea Piers Connecticut outpost opened last month. In addition, Connecticut Governor Dannel Malloy has not taken the soft market conditions lying down. He’s aggressively courted major companies with generous tax benefits and financial reimbursements for relocating to the state — a move that has brought in the likes of NBC Sports, ESPN and Cigna. For more on how office rents are holding up in Fairfield County, on what type of concessions landlords are offering and on whether Manhattan companies are sniffing around for cheaper space, we turn to our panel of experts.

there. What impact do you think those projects will have on the area’s commercial market? Harbor Point is everything from residential to large retail, [like] the Fairway market. With the marina they are doing, it’s one of the major projects on the East Coast and is creating a lot of buzz. A lot of those properties around the perimeter are being snatched up by other developers at lesser numbers than what was paid for them a couple years ago, with the hopes that it’s the up-and-coming place.

Paul Jacobs

executive vice president, CBRE Stamford How is the office market in Fairfield County holding up? All in all, the market is stagnant. There have been a number of tenants that have come out to look for large blocks of space, but there are a number of large blocks that continue to remain vacant, as evidenced by the second quarter of 2012 ending with negative net absorption of 322,000 square feet for Fairfield County. Where are asking rents for Class A office space these days, and how does that compare to the recent past? Asking rents continue to creep up slowly, even with the large blocks of availability. That’s due, in large part, to a couple of properties: 695 East Main Street in downtown Stamford, as well as 600 Steamboat Road, which have asking rents of $56 and $100 per square foot, respectively. So that brings the asking rental rates up because it is a weighted average. Class A rental rates have increased over the last year from $36.20 to $41.10.

What are the most surprising trends you’re seeing in the Fairfield County office market? We’re seeing a lot of smaller space requirements. In the first half of 2012, our statistics show about 57 percent of the overall leasing activity were transactions under 10,000 feet. Only two were over 50,000. There were no transactions over 100,000 feet. There’s also a continued consolidation and emphasis on cost cutting — all of our tenant rep assignments are 20 to 30 percent smaller space than the tenants currently occupy. What is the most telling statistic about the Fairfield County office market? Out of 14 blocks of available space over 100,000 feet, seven of them are in Stamford. Who are the office tenants looking to take space in Fairfield County? Most of the activity is in the financial sector. What is also important to note is that the entertainment/media sector is expanding, with NBC Sports, WWE and Blue Sky Studios expanding by 43,000 feet in Greenwich. Another sector continuing to grow is health care. What kinds of tax and other incentives are being offered to get companies to relocate or stay in Connecticut? Governor Malloy just finished what is known as the First Five incentive program. He had legislative approval for $200 million to give in incentives to the first five companies that guaranteed an increase of 200 new jobs. The program included low interest and forgivable loans, tax credits, reduced electricity rates and training grants. And with the success of the First Five, he’s continuing to the next five. Three of the first five companies that were recipients were NBC Sports, ESPN and Cigna. www.TheRealDeal.com May 2006

Q&A

Tim Rorick

senior managing director, Colliers International Connecticut Stamford How is the Fairfield County office market holding up for leasing and investment sales? In the leasing market, there is very little activity from new tenants. For the existing tenancy, the preference these days is for shorterterm renewals. Nobody feels like they want to lock into anything long term. With investment sales, there is not a lot happening because there is not a lot of product. For the product that is on the market, we are actually seeing some pretty good numbers. It seems there was a lot of pent-up demand, and there is a lot of money out there. Which commercial markets in Fairfield County are performing the best, and which are struggling? I would say Greenwich is, by far, holding up the best, but there are pockets within Greenwich such as the submarket of West Greenwich which are soft. Lower Fairfield County, Greenwich and Stamford have held up well relative to Norwalk and northern Fairfield County. The biggest struggle that I have seen is in leasing Class B product. I think tenants are using this [down] market to trade up in quality of building. So a lot of the Class B buildings from an activity standpoint are completely dead. A recent study found that Fairfield County was one of the most expensive places to locate a corporate headquarters. Are high prices deterring companies from moving there? Yes, but you have always got a critical mass of financial services companies, law firms, those types of companies that need to be in a market like Fairfield County. And it’s all relative. Fairfield County is expensive, but we are less expensive than New York, San Francisco and some of the other high-end markets in the country. What impact do you think the Harbor Point project is having on the area’s commercial market, and what other projects are you watching? I think that’s had a tremendously positive effect for the South End. What you had before was a Pitney Bowes warehouse and an old utility site. What you’ve got now is very high-end residential, a supermarket and Class A–plus trophy office space. The other development I’m watching is the 95/7 in Norwalk, which seems to have stalled somewhat, but I know that they are getting good activity there, as well as the Fairfield Metro Center, which was stalled [but] seems to be

getting a lot of activity as well. Are most of the ﬁrms that are in the market for ofﬁce space looking to relocate from Manhattan, or are they already located outside of the city? They are already located outside the city. That’s not to say that we won’t experience a very large corporate relocation. As the cost of doing business in New York goes up, we look more and more as a likely alternative. I predict we will see some sizable corporate relocations from New York in the near future.

Peter Gray

broker, Pyramid Real Estate Group How is the office leasing market in Fairfield County? Overall, for leasing, Stamford, New Canaan and Darien remain strong. Greenwich has been difficult, and Norwalk even more so. What kind of activity and prices are you seeing on the investment sales front? Product below $1.5 million seems to move fast, often purchased by first-time investors at low cap rates. I am also seeing the largest office buildings move anywhere from $200 per square foot for Class C to more than $400 for Class A. What are the most surprising trends you’re seeing in the Fairfield County office market? The number of gyms just keeps climbing, with no end in sight. I’ve put in six in the last five months alone. Hardly a day goes by that I don’t get at least one phone call from one type of fitness use or another.

Jim Fagan

senior managing director, Cushman & Wakeﬁeld What are you seeing in the Greenwich and Stamford ofﬁce markets? The Greenwich [central business district] is a very small market with high rents. In that area, 600 Steamboat Road, which is owned by Gen Re, a Warren Buffett company, is being renovated and will be leasing. It used to be occupied by Royal Bank of Scotland. ... When RBS built its headquarters in Stamford it vacated that building. So it’s been vacant for a while now. ... Those rents probably start in the high $80s and can go up to $100 a square foot. ... Meanwhile, in the Stamford

CBD, people are paying for the highestquality spaces. That’s somewhere in the $40s to $50s. Which commercial markets in Fairfield County are the strongest, and which are struggling? I think they are all in a kind of state of malaise, actually. The ones that are most robust are the Stamford, Greenwich and probably the Westport markets, but in none of those markets do the owners have an upper hand. What are the most surprising trends you’re seeing in the office market? Normally if the vacancy remains high, prices come down, but there is a fairly select group of buildings where the prices are going up. There’s been very little building since 1988; that’s 25 years. Those landlords that go the extra step and make their buildings that much nicer are going to capture significantly higher rents. What is the most telling statistic about the Fairfield County office market? The number of employed people. In Manhattan, employment has dramatically increased since 2009, [but] ours increased in the first half of 2010 and since then has dropped off.

James Ritman

managing director, Newmark Grubb Knight Frank How is the office market in Fairfield County holding up? Overall, Connecticut is doing very well on the leasing side. Investment sales have been very active. Over the last few years the banks and lenders have extended [loans] as opposed to taking possession of underwater properties. So some of the properties were readjusted and some now have gone onto the market either in debt sales or foreclosure sales. There have been pieces of mezz debt bought, positions have been taken by REITs or investment groups to foreclose and take possession of properties at a discount. A portfolio was recently bought for $24 million. The previous buyer bought it in ’08 or ’09 for about $55 to $60 million. Where are asking rents for Class A office space, and how does that compare to the past few years? In downtown Greenwich, asking rates for the top buildings are still over $100 a square foot. The range is generally $80 and $100. It almost rivals some of the rents in Manhattan. In Stamford on

the higher end, it’s $50 to $60 a square foot for the top buildings. Norwalk has suffered more than some of the other towns. Class A rents there are in the low to mid-$30s. For the last two years, the rents have been pretty much the same in all these markets for Class A buildings. They are off from where they were in 2008. In Greenwich, the top Class A building was getting $150 a square foot in ’08. That building is getting $85 to $90 per square foot today. Are high prices deterring companies from moving there? We are not seeing that. Starwood Hotels looked at [moving to] Florida, Texas, Georgia, New Jersey and New York, but Connecticut won the bid. I think people want to be around New York. People question Greenwich rents, which are a little higher. But the state incentives bring the overall deal down to a level playing field. Rents in Westchester County are significantly lower than they are in Fairfield County, [but] New York State is not doing as good a job at providing tax incentives. So Starwood pays a much higher rent per square foot in Stamford than if they had stayed in Westchester, but the state of Connecticut gave them a very large incentive package. What are your thoughts on UBS publicly considering moving back to Manhattan last year? UBS was looking at incredible incentives to move back to downtown Manhattan, and a lot of their workforce comes from New York City. It’s still cheaper to pay the rents here with state incentives than to stay in Manhattan, which is not giving any incentives unless you go Downtown. We are getting a lot of looks from bigger users in Manhattan. A number of years ago you didn’t see that. Once in awhile there was a UBS or an RBS, a monster deal. Now, groups in New York City that are looking for large blocks of space are thinking about Connecticut and Stamford. Are there any new types of office tenants looking to take space in Fairfield County? The big one is film. That is a whole new industry that has flooded the market and created jobs and tax revenue in the state and county. Who has the upper hand right now — building owners or tenants? While the landlords don’t have the upper hand, it’s not a for sale sign. ... With that said, a landlord is going to provide an incredible work allowance to a [big] tenant in order to lure them here. But they are going to keep the rents pretty strong compared to Westchester County or even New Jersey. TRD www.TheRealDeal.com August 2012 69

�� NEW JERSEY

DreamWorks strikes deal for Meadowlands theme park DreamWorks Animation last month announced a deal to bring Shrek and other animated movie characters to an amusement park at Triple Five’s planned American Dream entertainment and retail mall in the New Jersey Meadowlands, the New York Times reported. Jeffrey Katzenberg, chief executive of DreamWorks

Triple Five said, and the complex is not slated to open until September 2014. The New York Giants and New York Jets football teams, which both use the nearby

Animation, told the Times the indoor park would involve the studio’s “characters, storytelling and technology in a unique and innovative family entertainment experience,” including rides and a wave pool. The American Dream site will also include 1.7 million square feet of retail space, an indoor ski hill, indoor skydiving, bowling, an aquarium and a live theater. But $1.75 billion in ﬁnancing needed for the long-delayed project will not be secured until October,

�� N E W YO R K R E A L E S T A T E N E W

��

MetLife Stadium, have ﬁled lawsuits seeking to block construction of American Dream, saying the project would worsen trafﬁc in the already congested area. (Triple

A rendering of American Dream Meadowlands

Five moved last month to dismiss the suit.) Still, the DreamWorks deal was widely viewed as a muchneeded bit of good news for American Dream. “This is the ﬁrst really positive news we have had in some time regarding this project,” East Rutherford Mayor James Cassella told the Bergen Record.

CONNECTICUT

EDAC buys former Pratt & Whitney plant EDAC Technologies, a designer and manufacturer of components for the aerospace industry, last month said it paid $8.2 million to buy a 293,000-square-foot former Pratt & Whitney plant in Cheshire from United Technologies Corp., the Republican-American reported. EDAC said it will consolidate all of its Connecticut operations, currently housed in six separate buildings in Farmington and Newington, at the 50-acre site, located at 500 Knotter Drive. EDAC had previously purchased a building in Plainville that it had planned to renovate in order to move part of its operations there. But in the same announcement, EDAC said it has instead accepted an offer to sell the Plainville facility to a real estate development company, which intends to redevelop the site. WESTCHESTER COUNTY

Kawasaki to pay $25M for factory

��

Kawasaki Rail Car has agreed to pay $25 million for the Yonkers factory space it has leased since the 1980s, the Wall Street Journal reported last month. The Japanese manufacturer, which makes many of the cars for the New York subway system, agreed to buy the 239,000-square-foot factory from its landlord, National Resources, and to roughly double the amount of ofﬁce space it occupies in a nearby building in the same complex. Kawasaki is an anchor tenant in the nine-building complex, which was occupied for decades by Otis Elevator Co. until the early 1980s. Then, in 1999, National Resources purchased the complex and renamed it i.Park Hudson. Kawasaki had been mulling plans to relocate to Nebraska or New Jersey, but more than a year ago, Gov. Andrew Cuomo announced that the company would get a $500,000 state grant to stay in Yonkers, provided it retains 375 local jobs. But that grant has been held up while Kawasaki negotiated a deal to buy the factory. Compiled by Russell Steinberg

70 August 2012 www.TheRealDeal.com

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Washington, D.C.

Malibu

M A L I B U Blond bombshell Pa-

mela Anderson, of “Baywatch” fame, has put her Malibu home on the rental market for $50,000 per month, the Los Angeles Times reported. The three-bedroom home has roughly 2,750 square feet of living space, which includes a home theater, a rooftop deck and a swimming pool. Christopher Cortazzo of Coldwell Banker has the listing. According to public records, Anderson purchased the home in 2000 for $1.8 million. Peyton Manning’s new home

Washington, D.C. Vornado Realty Trust last month announced the sale of the Washington Office Center, a 420,125-square-foot office building, the Washington Business Journal reported. The property, located at 409 Third Street in Southwest Washington, D.C., sold for $186 million, or roughly $450 per square foot. The building was sold as part of a portfolio that also includes the Washington Design Center at 300 D Street. Vornado, which said it expects to post a net gain of $120 million on the sales, did not disclose the identity of the buyer. Vornado acquired both properties in 1998 as part of a $625 million, 5.3 million-square-foot portfolio sale. The REIT said it is also selling other assets that were part of that acquisition, including the Boston Design Center, the L.A. Mart and the Canadian Trade Shows. According to Jones Lang LaSalle, the Southwest Washington office market had a vacancy rate of 12.6 percent, or roughly 1,563,000 square feet, in the second quarter of 2012. The average asking rent in the area was $49.16 per square foot, slightly less than $50.40 in the city as a whole.

Atlanta Atlanta’s Regent Partners is in contract to buy the city’s iconic “King” and “Queen” skyscrapers, the Atlanta Business Chronicle reported. Regent formed a partnership with GEM Realty Capital, a private equity firm based in Chicago, to acquire Concourse Corporate Center, the 2.1 million-square foot, mixed-use development that’s home to the King and Queen buildings. Owner TIAA-CREF put the development on the market earlier this year. According to the Chronicle, Regent and GEM will buy the towers for around $300 million. Concourse was developed in the late 1980s and early 1990s, part of the first wave of suburban Atlanta office developments in what is known as the Perimeter District. According to Grubb & Ellis, the Perimeter saw significant leasing activity in the first quarter of 2012, with over 280,000 square feet of net absorption. That marks a significant rebound from 2011, when the area saw an annual net absorption of nega72 August 2012 www.TheRealDeal.com

tive 510,000 square feet. In the ﬁrst quarter, some 23.8 percent, or 5,430,000 square feet, of central Perimeter’s ofﬁce space was vacant, and the average rent for Class A space was $21.59.

Colorado Westfield Co., a Denver-based real estate investment company, announced last month that it has purchased the 461,438-square-foot Mountain View Corporate Center complex in Broomfield for $92 million, or $199 per square foot, according to the Boulder County Business Report. The seller was Hines VAF Mountain View LP, a fund owned by international real estate investment and development company Hines, which is building a nearby spec office building called Eos at Interlocken. The Mountain View Corporate Center, a Class A office property at 12002 Airport Way, is a four-building complex in Colorado’s “Outerlocken” area. Hines purchased the corporate center in 2006 for $71.5 million. The 27-acre site was 92 percent leased at the time of sale, with tenants including WhiteWave Foods and Time Warner Cable Inc.

D E N V E R Quarterback Peyton

Manning, who recently left the Indianapolis Colts for the Denver Broncos, last month paid $4.57 million for a seven-bedroom mansion in the Denver suburb of Englewood, TMZ reported. The 16,000-square-foot home has a seven-car garage and a panic room, as well as a heated indoor/outdoor kennel for the family dog.

Detroit An 11-bedroom historic mansion called Stone Hedge has sold for $395,650 in cash, the Detroit Free Press reported. The 9,638-squarefoot, English manor–style home, located at 700 West Boston Boulevard, was built in 1915 for the late Walter Briggs, an automobile mogul who owned the Detroit Tigers for 30 years before his death in 1952. Betty Warmack, a realtor at Real Estate One in St. Clair Shores, listed the home in March at $465,000. It was purchased by a couple with several children, she told the Free Press. According to Curbed Detroit, the house has nine ﬁreplaces, an elevator, a cold storage closet for furs and a solarium. Elsewhere in Detroit, the Wayne County Treasurer’s Ofﬁce last month put some 6,000 tax-foreclosed properties on the auction block, with starting bids for a house at $500, and $200 for vacant lots. TRD

Sandra Bullock

AUSTIN Actress Sandra Bullock,

who owns residences across the country, listed her home in Austin, Tex., for $2.5 million, Curbed reported. According to public records, Bullock purchased the home in 1997 for $575,000.

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��

St. Regis retail condo ﬁelding offers

Bronx multifamily buildings for sale

The partnership that owns the retail condo at the St. Regis Hotel has received offers of as much as $375 million, or $15,182 per square foot, for the space, the New York Post reported. The highest offer for the 24,700-square-foot space at 2 East 55th Street came from a “super-luxury” retailer that would like to purchase and control the space outright, sources told the newspaper. The partnership has been “barraged with offers,” owner Haim Chera of Crown Acquisitions told the paper, “but the group [which includes the Feil Organization and Lloyd Goldman] doesn’t know what it wants to do yet.”

A pair of apartment buildings in the Castle Hill and Hunts Point sections of the Bronx is on the market with a combined asking price of nearly $30 million. The ﬁrst property — an eight-story elevator building at 2025 Seward Avenue in Castle Hill — has 154 apartments and an asking price of $23.5 million. The second property, a six-story elevator building at 1314 Seneca Avenue in Hunts Point, has 60 apartments and two retail stores. It has an asking price of $6.25 million — or $5.35 million for the residential portion 2025 Seward Ave. only. The package is on the market on a co-exclusive basis between Ariel Property Advisors’ Shimon Shkury, Scot Hirschﬁeld, Victor Sozio and Michael Tortorici and Besen & Associates’ Amit Doshi and Greg Corbin. The properties can also be bought separately.

Bay Ridge retail building asking $42M A three-story retail building at 502-512 86th Street in Bay Ridge, Brooklyn, is on the market with an asking price of $42 million. The 39,000-square-foot property, located on the southeast corner of 86th Street and Fifth Avenue, is net leased to two tenants: Citigroup and discount apparel store T.J.Maxx. Citigroup, whose lease runs through September 2016, occupies 2,450 square feet on the ground floor and 2,500 square feet on the 502-512 86th St. lower level. T.J.Maxx occupies the remaining space on the ground floor plus all of the second and third floors. Its lease runs through February 2021. Robert Knakal, Stephen Palmese, Mark Lively, Brendan Maddigan and Winfield Clifford of Massey Knakal are marketing the property.

��

74 August 2012 www.TheRealDeal.com

East Village development site on the block An East Village site where a residential development could potentially rise 12 stories is for sale with an asking price of $22.5 million. The plot, at 79–89 Avenue D, is currently a one-story building with retail. It has an as-of-right ﬂoor area of about 72,000 square feet, according to Eastern Consolidated’s Nancy Tran, who is marketing the property with colleagues Alan Miller, Aliza Avital and Paul Nigido. The FAR can also be increased to approximately 96,000 square feet because the site qualiﬁes for an inclusionary housing bonus, an exemption available through a city program that permits a larger FAR in exchange for the cre-

�� ation or preservation of affordable housing, Tran said.

East Harlem development site for sale A block-front development site at 1381–1391 and 1399 Park Avenue is on the market with an asking price of $15 million. The properties, located between 103rd and 104th streets, can accommodate a development of up to 170,000 square feet, including 105,000 square feet of residential space and 65,000 square feet of community-facility space. The site has an 11,320-square-foot footprint, currently conﬁgured as one vacant three-story building, one vacant single-story building and three lots. The buildings can be demolished to make way for new development. Greg Corbin and Iris Rossano of Besen & Associates are handling the assignment.

UES townhouse asking $13 million A ﬁve-story multifamily townhouse at 53 East 67th Street is on the market with an asking price of $13 million. The nine-unit property, located between Park and Madison avenues, has a doctor’s ofﬁce renting for $10,161 per month. Built in 1910, the 7,000-squarefoot building sits on a lot measuring 20 feet by 100 feet and is built 20 feet by 85 feet deep. Under the current R10 residential zoning, the property has an additional 13,258 square feet of air rights for future development. Marcus & Millichap is marketing the property. 53 E. 67th St. Compiled by Linden Lim

��

Deal Sheet summary

The Deal Sheet, on pages 76 to 86, covers transactions from 6/11/12 through 7/10/12. Please submit future deals to deals@therealdeal.com.

Sales

Overview

By type

Property sales Deals Dollars

55 $910,350,000

Financing

By dollar volume (in millions)

Development

Hotel

Industrial

Mixed-Use

Mixed-Use Multi-family

145.38 0 2.30 7.45

Multi-family

578.41

Transactions

Office

162.94

Buildings

Retail

13.87

Aggregate value

$828,450,000

Leases Office

124

Retail

Total

175

Leases square feet Office Retail Total

1,642,811 233,219 1,876,030

Office leases Office leases by industry Industry

Office leases sf by industry Leases

Advertising & Marketing

Industry

Advertising & Marketing

Architecture & Design

Communications

Construction

Entertainment

Top tenant reps for office leasing by sf

Square feet leased 142,936

397,957

5,629

Cushman & Wakefield

264,125

17,186

Newmark Grubb Knight Frank

211,345

5,834

Jones Lang LaSalle

101,592

9,114

VIZA Group

33,200

Cresa Partners

24,707

Fountain Realty Group

24,180

Rice & Associates

18,697

Cogent Realty Advisors

15,030

Adams & Co.

10,686

Fashion*

41,338

Financial

318,965

Food & Beverage

Government

Health & Beauty

Legal

Medical

NGO

Other / n/a Real Estate

Other / n/a

Real Estate

Science & Technology

Square feet leased

CBRE Group

Fashion* Food & Beverage

Tenant representative

8,414 583,425 9,303 105,713

Schwimmer Realty

6,000

19,716

UGL Services

5,436

19,711

Rutenberg

5,000

JW Burke & Company

4,940

260,693 4,716 90,118

Redwood Property Group

4,765

Winslow & Co.

4,095

Retail leases Top tenant reps for leasing by sf

Retail leases by industry

Broker

Fashion

Square feet leased

Retail leases sf by industry 4

Fashion

23,350

RKF

68,535

Food & Beverage

102,470

SCG Retail

19,134

Health & Beauty

9,360

Besen Retail

13,650

Home Furnishings

19,200

Kalmon Dolgin Affiliates

11,500

Medical

25,504

Houlihan-Parnes Realtors

10,000

Other / n/a

53,335

Rice & Associates

8,736

Newmark Grubb Knight Frank

7,700

Winick Realty

7,000

Thor High Street

6,900

Cushman & Wakefield

6,200

Scopa CRE

6,200

Manhattan Commercial Realty

5,504

Esquire Properties

4,200

(*includes showroom space)

www.www.TheRealDeal.com August 2012 75

Deal Sheet

Commercial deals in New York City Deals are listed from largest to smallest in square feet leased or bought. The Deal Sheet covers transactions from 6/11/12 to 7/10/12. Please submit future deals to deals@therealdeal.com.

Office leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

100 Church St

372,520

The City of New York / M. Geoghegan, J. Morrill, CBRE

SL Green / Newmark Grubb Knight Frank

The City of New Yorkâ&#x20AC;&#x2122;s Law Department signed a 20-year lease renewal, effective November 2013, the New York Post reported.

75 Park Place

207,812

The City of New York / n/a

Jack Resnick & Sons / D. Brady, B. Greenberg, Jack Resnick & Sons

Several New York City agencies signed a 15-year, six-month lease renewal, the New York Post reported. The agencies are the Office of Management and Budget, the Office of the Actuary and the Department of Information Technology and Telecommunications. The asking rent was in the mid-$40s per square foot, according to the Post.

33 Whitehall St

180,500

Fitch Ratings / J. Cefaly, G. Field, C&W

Alex Stawski / E. Goldman, J. Capeman, CBRE

The global rating agency signed a lease renewal and expansion, the New York Post reported, adding 41,000 square feet to its existing space in the building. At the same time, the company is vacating 100,000 square feet at 1 State Street Plaza.

111 Eighth Ave

100,000

Deutsch Inc. / n/a

Google / n/a

The advertising firm signed a lease renewal, the Commercial Observer reported.

245 Park Ave

74,766

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

n/a / n/a

The investment advisor signed a lease renewal.

116 West 32nd St

70,000

CUNY School of Professional Studies / H. Kesseler, J. Kuhn, Newmark Grubb Knight Frank

Pan Am Equities / Jeffrey Rosenblatt, Newmark Grubb Knight Frank

The school signed a 15-year lease for floors one through four, the Commercial Observer reported.

1330 Sixth Ave

50,000

Knoll Inc. / M. Horner, S. Cahaly, Jones Lang LaSalle

RXR Realty / n/a

The home and office furnishings company signed a lease on the second, third and fourth floors for offices and showroom space.

666 Fifth Ave

48,000

Akerman Senterfitt / n/a

Kushner Cos.; Vornado / T. Costanzo, J. Solomon, G. Weiss, Vornado

The law firm signed a lease on the 19th and 20th floors, the New York Post reported. The tenant is relocating from a smaller, 40,355-square-foot space at 335 Madison Avenue.

400 Park Ave

45,000

City National Bank / L. Williams, D. Schlather, J. Welch, C&W

Waterman Interests / Represented in-house

The Los Angeles-based bank signed a 15-year lease for the entire second and seventh floors plus 5,400 square feet of retail space on the ground floor.

110 William St

30,230

Stack Exchange / n/a

Swig Equities / Jonathan Dean, Swig Equities

The Internet company signed a new 11-year lease for the entire 27th and 28th floors.

48 Wall St

27,300

Addison / n/a

Swig Equities / Jonathan Dean, Swig Equities

The brand strategy and communications design firm signed a new lease on the entire eighth and ninth floors.

315 Hudson St

24,822

Moda Operandi / Owen Hane, C&W

n/a / Brett Greenberg, Jack Resnick & Sons

The online fashion start-up signed a 10-year lease on the fifth floor, the New York Post reported. The company is relocating from 72 Madison Avenue.

1350 Sixth Ave

24,707

Amazon / J. Halpern, M. Reyner, Cresa Partners

SL Green / H. Tenenbaum, G. Rosen, SL Green

The online retail company signed an expansion lease, bringing its total occupancy in the building to 92,493 square feet, the New York Post reported.

7 Penn Plaza

24,150

ComScore Inc. / Clayton Kline, Jones Lang LaSalle

The Feil Organization / Represented in-house

The Internet marketing research firm signed a new lease on the 10th floor. The company is relocating from 5 Penn Plaza.

80 Broad St

22,085

McGivney & Kluger PC / J. Moran, F. Trump III, Newmark Grubb Knight Frank

n/a / n/a

The law firm signed a lease renewal.

104 West 40th St

16,884

Vox Media / S. Rotter, J. Fischer, Jones Lang LaSalle

Savanna / P. Amrich, M. Movshovich, N. King, CBRE

The website publisher signed a new lease for the entire ninth floor and part of the eighth floor.

225 Broadway

15,030

Yerman & Associates / Mitchell Waldman, Cogent Realty Advisors

225 Broadway Company LP / n/a

The law firm signed a lease. The reported asking rent was $32 per square foot.

116 West 32nd St

12,500

United Enterprises 116 LLC / n/a

n/a / Jeff Rosenblatt, Newmark Grubb Knight Frank

The tenant signed a lease extension.

810 Seventh Ave

11,007

SAVVIS Communications / n/a

n/a / Dennis Karr, Newmark Grubb Knight Frank

The communications firm subleased space.

1295 Fulton St (Brooklyn)

10,500

The Family Center Inc. / Carri Lyon, C&W

n/a / David Muessel, CPEX Real Estate

The nonprofit signed a 15-year lease for the entire third through fifth floors.

350 Fifth Ave (Empire State Building)

10,400

LinkedIn / Sacha Zarba, CBRE

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

The professional networking web site signed an expansion lease on the 24th floor, adding to its 32,000 square feet on the 25th floor.

1040 Sixth Ave

9,873

Macro Consultants / n/a

Skyline Developers / W. Cohen, R. Kass, Newmark Grubb Knight Frank

The consulting firm signed an expansion lease on the 15th floor, CityBiz reported. The asking rent was $49 per square foot, according to the web site.

1040 Sixth Ave

9,085

InterMedia Outdoors / B. Needleman, J. Silverman, CBRE

Skyline Developers / W. Cohen, R. Kass, Newmark Grubb Knight Frank

The sports media company signed a seven-year lease for part of the 12th floor, CityBiz reported. The asking rent was $49 per square foot, according to the web site.

48 Wall St

8,800

Conway, Farrell, Curtin & Kelly P.C. / Patrick Heeg, Jones Lang LaSalle

Swig Equities / Jonathan Dean, Swig Equities

The law firm signed a lease renewal for the entire 20th floor.

321 West 44th St

6,791

Levine Sullivan Koch & Schulz LLP / Allen Gurevich, Newmark Grubb Knight Frank

n/a / n/a

The law firm signed a lease extension.

495 Broadway

6,500

Launch Collective Partners / n/a

n/a / Neil Joffee, Newmark Grubb Knight Frank

The marketing company signed a new lease.

408 Jay St

6,000

Freelancers Union / Schwimmer Realty

ISJ Management / n/a

The nonprofit signed a 10-year lease for a medical office for its health-insured members.

134 West 29th St

6,000

CANY / Matthew Kurzban, Rice & Associates

Sitaisonâ&#x20AC;&#x2122;s International / Suraj Advaney, Triboro Realty

The drama therapy services company signed a lease.

110 West 40th St

5,814

Crumbs Holdings LLC / D. Levy, B. Maslin, Adams & Co.

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

The baked goods company signed a lease renewal and expansion for office space. The reported asking rent was $39 per square foot.

80 Broad St

5,790

Educational Networks / n/a

n/a / Hal Stein, Newmark Grubb Knight Frank

The Internet company signed a new lease.

76 August 2012 www.TheRealDeal.com

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Rosewood knows New York We are pleased to announce that through July of 2012, Rosewood has completed total sales of $560,648,500 in New York, which include:

Manhattan: Aggregate sales of

Bronx: Aggregate sales of

$310,903,000 - 37 Buildings / 961 Residential units / 31 Commercial units

$71,127,500 - 20 Buildings / 823 Residential units / 21 Commercial units

Brooklyn: Aggregate sales of

Queens: Aggregate sales of

$136,968,000 - 25 Buildings / 1044 Residential units / 20 Commercial units

$41,650,000 - 5 Buildings / 200 Residential units / 6 Commercial units

Office leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

35 East 21st St

5,685

1 Life Healthcare Inc. / n/a

n/a / Daniel Levine, Newmark Grubb Knight Frank

The network of healthcare providers signed a new lease.

450 Seventh Ave

5,436

Alcatel-Lucent USA Inc. / Gary Ceder, UGL Services Equis Operations Co.

Kaufman Organization / Barbara Raskob, Kaufman Organization

The networking and communications technology firm signed a five-year lease. The reported asking rent was in the mid-$40s per square foot.

18 East 41st St

5,200

NY Pelvic Pain and Minimally Invasive Gynecologic Surgery PC / Uriel Gandelman, VIZA Group

Walter & Samuels / Gregory Postyn, Walter & Samuels

The gynecologist inked a 15-year lease. The reported asking rent was $38 per square foot.

780 Third Ave

5,007

Goldberg Segalla LLP / K. Ciminelli, R. Eisenberg, Newmark Grubb Knight Frank

n/a / n/a

The law firm signed a new lease.

267 Fifth Ave

5,000

Pulse Creative / Gregory Cohen, Rutenberg

n/a / Gregory Cohen, Rutenberg

The marketing agency signed a five-year lease on the third floor.

1623 Kings Highway (Brooklyn)

4,940

Tiger Schulmannâ&#x20AC;&#x2122;s Mixed Martial Arts / Jonathan Burke, JW Burke & Company

RCG Longview / T. King, D. Muessel, CPEX Real Estate

The martial arts studio signed a lease for the entire second-floor office space.

31 Penn Plaza

4,765

Search Engine Marketing LLC / David Youngworth, Redwood Property Group

n/a / B. Gartner, J. Winslow, Winslow & Co.

The website management company signed a lease.

366 Fifth Ave

4,600

Majorica / n/a

n/a / Rick Brickell, NYAE

The pearl jewelry maker signed a 10-year lease renewal on the fifth floor.

298 Fifth Ave

4,500

JOOR / Scott Brown, Newmark Grubb Knight Frank

n/a / n/a

The wholesale marketplace for fashion signed a new lease.

400 Madison Ave

4,500

Round Hill Music / Represented inhouse

William Macklowe Co. / C. Wasserberger, R. Abend, A. Tener, Jones Lang LaSalle

The music publishing firm signed a five-year lease for the entire 18th floor. The company is relocating from 667 Madison Avenue.

90 Broad St

4,281

Professional Group Plans / Adam Leshowitz, Newmark Grubb Knight Frank

n/a / n/a

The agency for employment benefit plans signed a new lease.

1350 Broadway

4,136

Garrigan Lyman Group / n/a

n/a / R. Silver, N. Rubin, A. Sciacca, Newmark Grubb Knight Frank

The marketing company signed a new lease.

24 West 40th St

4,117

Everpower Wind Holdings Inc. / Erik Harris, Newmark Grubb Knight Frank

n/a / Erik Harris, Newmark Grubb Knight Frank

The wind power company signed a lease.

247 West 38th St

3,800

n/a / n/a

n/a / P. Wloch, J. Datri, Empire Properties

A security certification center signed a lease. The reported asking rent was $30 per square foot.

740 Broadway

3,793

Refinery 29 Inc. / Scott Brown, Newmark Grubb Knight Frank

n/a / Scott Brown, Newmark Grubb Knight Frank

The fashion web site signed a lease.

49 West 27th St

3,700

Red Commerce / Eric Cagner, Newmark Grubb Knight Frank

Drury LLC / Mark Furst, Cassidy Turley

The job recruitment company signed a sublease for part of the third floor.

1350 Broadway

3,675

WCD Group LLC / n/a

n/a / R. Silver, N. Rubin, A. Sciacca, Newmark Grubb Knight Frank

The project management and construction firm signed a new lease.

80 Broad St

3,515

Nirvana Solutions / n/a

n/a / Hal Stein, Newmark Grubb Knight Frank

The financial software company signed a new lease.

1001 Sixth Ave

3,514

Lumentus / Jeffrey Anderson, Rice & Associates

1001 Sixth Associates / Douglas Regal, ABS Partners

The communications firm signed a lease on the 22nd floor.

250 West 57th St

3,423

Laura and John Arnold Foundation / Erik Harris, Newmark Grubb Knight Frank

n/a / n/a

The philanthropic group signed a new lease.

400 Madison Ave

3,390

Duet Group / R. Feher, A. Smolyansky, CBRE

William Macklowe Co. / C. Wasserberger, R. Abend, A. Tener, Jones Lang LaSalle

The global alternative asset manager signed a five-year lease for part of the 16th floor. The company is relocating from 350 Madison Avenue.

212 West 35th St

3,303

Appway Inc. / Carri Lyon, C&W

Kaufman Organization / B. Raskob, S. Kaufman, Kaufman Organization

The financial software company signed a five-year lease for the entire 14th floor.

400 Madison Ave

3,095

Bergen Asset Management / Dan Schwartz, Winslow & Co.

William Macklowe Co. / C. Wasserberger, R. Abend, A. Tener, Jones Lang LaSalle

The asset management firm signed a lease for part of the 16th floor.

500 Fifth Ave

3,093

Consulate General of Ecuador / Barry Goodman, Newmark Grubb Knight Frank

n/a / n/a

The Consulate signed a new lease.

8-10 West 37th St

2,700

ICSC / Nick Zervis, Fountain Realty Group

n/a / Joe Mangiacotti, CBRE

The entertainment company signed a lease on the sixth floor.

1350 Broadway

2,698

Jay Jay Designerwear Inc. / n/a

n/a / R. Silver, N. Rubin, A. Sciacca, Newmark Grubb Knight Frank

The fashion company signed a new lease.

195 Bowery

2,665

Splendid Communications / Nick Zervis, Fountain Realty Group

n/a / Susan Penzer Real Estate

The communications firm signed a lease on the second floor.

110 West 40th St

2,639

WCA Technologies / Grubb & Ellis

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

The technology advisory firm signed a new lease. The reported asking rent was $39 per square foot.

45 Main St

2,600

Super Boise LLC / Jeffrey Anderson, Rice & Associates

Two Trees Management / Elizabeth Bueno, Two Trees

The gaming company signed a lease.

400 Madison Ave

2,562

Eastwind Global Partners / C. Reetz, Y. Tang, CBRE

William Macklowe Co. / C. Wasserberger, R. Abend, A. Tener, Jones Lang LaSalle

The equity fund signed a three-year lease for part of the 12th floor.

1410 Broadway

2,525

Broadway Chiropractic and Wellness / Max Vizgalin, VIZA Group

LH Charney Associates / Represented in-house

The chiropractor signed a seven-year lease. The reported asking rent was $50 per square foot.

16 Beaver St

2,500

RMGTD Corp. / Ilya Tsitron, VIZA Group

16 Beaver Street Corp. / Represented in-house

The florist signed a 10-year lease for the entire second-floor office space.

1630 Broadway

2,500

Oasis Spa / Renard Suggs, Fountain Realty Group

n/a / CBC Hunter Realty

The spa signed a lease on the second-floor office space.

253 Fifth Ave

2,500

Sonic Notify Inc. / David Gomez, Fountain Realty Group

n/a / James Bullaro, Bullaro Properties

The Internet firm signed a five-year lease on the sixth floor.

250 Park Ave South

2,471

Rubinstein & Ekelman / E. Cagner, J. Drummond, Newmark Grubb Knight Frank

The Feil Organization / Ron Fisher, The Feil Organization

The tenant signed a lease renewal for office space.

78 August 2012 www.TheRealDeal.com

Office leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

1560 Broadway

2,322

U.S. Security Associates / n/a

n/a / A. Steinberg, C. Granick, Newmark Grubb Knight Frank

The security guard company signed a new lease.

33 West 26th St

2,250

Loginaut / Javon Johnson, Fountain Realty Group

n/a / n/a

The Internet firm signed a five-year lease on the fourth floor.

33 West 26th St

2,250

IWD LLC / Javon Johnson, Fountain Realty Group

n/a / n/a

The tenant signed a lease on the fifth floor.

501 Fifth Ave

2,149

Bedford Investment Group / Uriel Gandelman, VIZA Group

Abramson Brothers / Billie Jean Hamel, Abramson Brothers

The financial services firm signed a five-year lease. The reported asking rent was $48 per square foot.

8-10 West 37th St

2,104

Domestic Wokers United / S. Ai, C. Cui, A.C. Lawrence

Sachsol Realty; Yaddi Group / Joseph Mangiacotti, CBRE

The organization of caregivers signed a seven-year lease on the fourth floor.

110 West 40th St

2,051

Citi Design Group Inc. / D. Levy, B. Maslin, Adams & Co.

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

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

377 Park Ave South

2,000

The Soft Serve Fruit Company / Eric Cagner, Newmark Grubb Knight Frank

n/a / Jared Lack, Newmark Grubb Knight Frank

The frozen dessert company signed a lease for office space on the fifth floor.

150 Broadway

2,000

A&I Broadway Realty / n/a

n/a / n/a

The real estate brokerage signed a new lease for space on the eighth floor. The reported asking rent was $33 per square foot.

295 Lafayette St

1,975

General Catalyst / n/a

n/a / D. Falk, J. Greenstein, Newmark Grubb Knight Frank

The private equity firm signed a new lease.

595 Madison Ave

1,954

Saffron Art / Doug Rice, Rice & Associates

Fuller Madison LLC / Ron LoRusso, Vornado

The online auction house for art signed a lease.

345 Seventh Ave

1,830

Gunn Landscape / Jeffrey Anderson, Rice & Associates

345 7th Avenue LLC / Peter Liptrot, Bernstein Real Estate

The architecture firm signed a lease.

74 Trinity Place

1,814

Big Management / Max Vizgalin, VIZA Group

Trinity Real Estate / Charles P. Laginestra, Trinity Real Estate

The entertainment industry management company signed a seven-year lease. The reported asking rent was $31 per square foot.

400 Madison Ave

1,800

MainFirst Securities / Represented in-house

William Macklowe Co. / C. Wasserberger, R. Abend, A. Tener, Jones Lang LaSalle

The financial services firm signed a lease extension for part of the 11th floor.

400 Madison Ave

1,758

Pacific Crest Securities / Ryan Masiello, Jones Lang LaSalle

William Macklowe Co. / C. Wasserberger, R. Abend, A. Tener, Jones Lang LaSalle

The investment bank signed a lease extension for part of the 12th floor.

214 West 29th St

1,700

LG Estates / Ilya Tsitron, VIZA Group

Walter & Samuels / Gregory Postyn, Walter & Samuels

The residential real estate brokerage signed a five-year lease. The reported asking rent was $30 per square foot.

545 Eighth Ave

1,659

Fritz-McDonald Company / Marie Hammoudi, VIZA Group

Eastgate Realty / Joe Pierotti, Eastgate Realty

The consulting firm inked a five-year lease. The reported asking rent was $32 per square foot.

285 West Broadway

1,650

One to World Inc. / n/a

285 West Broadway Associates LP / Joshua Salon, Salon Realty Corp.

The nonprofit signed a three-year lease.

274 Madison Ave

1,641

AV Management / Uriel Gandelman, VIZA Group

Abramson Brothers / Billie Jean Hamel, Abramson Brothers

The chiropractor inked a five-year lease. The reported asking rent was $40 per square foot.

160 Broadway

1,620

NBM Publishing / Ilya Tsitron, VIZA Group

Braun Management / Mendy Braun, Braun Management

The publishing company inked a five-year lease. The reported asking rent was $30 per square foot.

560 Broadway

1,600

Dorit International / Nick Zervis, Fountain Realty Group

n/a / n/a

The swimwear company signed a lease.

110 West 40th St

1,561

New York Youth Symphony Inc. / Denham Wolf Real Estate

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

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

110 West 40th St

1,457

Point of Sale Inc. / D. Levy, B. Maslin, Adams & Co.

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

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

594 Broadway

1,423

Shirley Madhere / Jean Bates, A.C. Lawrence

594 Broadway Associates LLC / Donna Vogel, Newmark Grubb Knight Frank

The plastic surgeon signed a five-year lease.

307 Seventh Ave

1,400

Casting Networks / Doug Rice, Rice & Associates

Comet Realty Corp. / Peter Liptrot, Bernstein Real Estate

The talent recruitment network signed a lease.

215 Park Ave South

1,399

CarryQuote / Elissa Groh, Rice & Associates

Dever Properties / Gary Rosen, SL Green

The financial data company signed a lease.

10 East 40th St

1,315

BFH Associates / Lisa Dresner, Fountain Realty Group

10 East 40th Street LLC / R. Brickell, R. Teichman, Joseph P. Day Realty

The cognitive behavioral therapy office signed a 10-year lease. The reported asking rent was $47 per square foot.

125 Maiden Lane

1,306

Touchbase Global / Max Vizgalin, VIZA Group

125 Maiden Equities / Nadja Galloway, Time Equities

The information technology company inked a three-year lease. The reported asking rent was $35 per square foot.

125 Maiden Lane

1,294

Capital Energy / Uriel Gandelman, VIZA Group

125 Maiden Equities / Nadja Galloway, Time Equities

The energy consulting company signed a five-year lease. The reported asking rent was $28 per square foot.

32 Court St (Brooklyn)

1,100

Bespoke Education / Marissa Harrison, CPEX Real Estate

n/a / Chris Havens, Creative Real Estate Group

The academic services company signed a lease.

347 West 26th St

1,100

OnSlot Creative Inc. / Elsa Gendall, Fountain Realty Group

n/a / n/a

The Internet firm signed a lease.

143 West 29th St

1,000

Two Tomatoes Records LLC / Fountain Realty Group

n/a / Devsons Realty Inc.

The record label signed a lease.

167 Madison Ave

1,000

Rubik Management / Jessica Luciere, Fountain Realty Group

n/a / Cathy Silberman, Tamar Properties

The entertainment company signed a lease.

285 West Broadway

1,000

Stuntman Public Relations / Dan Schwartz, Winslow & Co.

285 West Broadway Associates LP / Joshua Salon, Salon Realty

The public relations firm signed a lease. The reported asking rent was $41 per square foot.

648 Broadway

998

Agency Folio-ID / Marie Hammoudi, VIZA Group

n/a / Gabe Isaacs, Lee & Associates

The provider of worldwide syndication and licensing for photographers and directors signed a three-year lease. The reported asking rent was $42 per square foot.

26 West 23rd St

950

Raken Leaves / Javon Johnson, Fountain Realty Group

n/a / Cassidy Turley

The art studio signed a lease.

110 West 40th St

948

CNP Carpentry LLC / D. Levy, B. Maslin, Adams & Co.

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

The interior design and carpentry company signed a new lease. The reported asking rent was $39 per square foot.

315 Madison Ave

900

Browology / Javon Johnson, Fountain Realty Group

n/a / Abramson Brothers Inc.

The fashion company signed a lease.

450 Seventh Ave

861

Advance Relocation & Storage / n/a

Kaufman Organization / Barbara Raskob, Kaufman Organization

The moving company signed a five-year to expand into a larger space in the building. The reported asking rent was in the mid-$40s per square foot.

www www.TheRealDeal.com August 2012 79

Office leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

110 West 40th St

833

Primary New York LLC / Newmark Grubb Knight Frank

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

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

57 West 57th St

802

Midtown Dental PC / Uriel Gandelman, VIZA Group

n/a / Christel Engel, Colliers International

The dental office signed a 10-year lease. The reported asking rent was $58 per square foot.

325 West 38th St

800

Veronica MKW / Nick Gianinni, Fountain Realty Group

n/a / Carlos Silberman, Falcon Properties

The fashion company signed a lease.

545 Eighth Ave

742

Babel Fair / Marie Hammoudi, VIZA Group

Eastgate Realty / Joe Pierotti, Eastgate Realty

The fashion showroom inked a four-year lease. The reported asking rent was $32 per square foot.

315 Madison Ave

656

Hire Staffing / Ilya Tsitron, VIZA Group

Abramson Brothers / Billie Jean Hamel, Abramson Brothers

The high-end employment agency inked a five-year lease. The reported asking rent was $48 per square foot.

853 Broadway

650

Dian Fashion Co. / Elsa Gendall, Fountain Realty Group

n/a / Winslow & Co.

The fashion company signed a lease.

249 West 34th St

625

Barbara A. Bergier, LCSW / Uriel Gandelman, VIZA Group

Penn Metro Associates / Allen Gurevich, Newmark Grubb Knight Frank

The psychoanalyst signed a five-year lease.

249 West 34th St

600

Sioni & Partners / Uriel Gandelman, VIZA Group

Penn Metro Associates / Allen Gurevich, Newmark Grubb Knight Frank

The real estate investment sales firm inked a lease.

928 Broadway

600

Jaleo Management / Marie Hammoudi, VIZA Group

Grunberg Realty / Represented inhouse

The restaurateur inked a five-year lease for office space. The reported asking rent was $45 per square foot.

125 Maiden Lane

571

Seven Sages Capital / Max Vizgalin, VIZA Group

125 Maiden Equities / Nadja Galloway, Time Equities

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

32 Broadway

538

Shock Wave Associates / Alex Saharov, VIZA Group

32-42 Broadway Owner / Thomas Hettler, Lawrence Group

The nutritionist inked a five-year lease. The reported asking rent was $32 per square foot.

347 Fifth Ave

535

Colby Model Management / Chris Baker, VIZA Group

Regency Enterprise Partners / Neil Polon, Empire Management

The model management company inked a three-year lease.

142 West 36th St

500

Alba Carting and Demolition / Uriel Gandelman, VIZA Group

Office Park / Represented in-house

The construction company inked a lease.

249 West 34th St

500

Deborah J. Keith LP / Uriel Gandelman, VIZA Group

Penn Metro Associates / Allen Gurevich, Newmark Grubb Knight Frank

The psychoanalyst inked a five-year lease.

40 Broad St

485

KEJK Inc. / Dennis Karr, Newmark Grubb Knight Frank

n/a / n/a

The tenant signed a new office lease.

124 East 40th St

460

Nu Spirit US / Max Vizgalin, VIZA Group

Solil Management / Represented inhouse

The skin care studio inked a five-year lease. The reported asking rent was $40 per square foot.

108 West 39th St

450

Trudy Dawn Skin Care / Max Vizgalin, VIZA Group

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

The skin care studio inked a five-year lease. The reported asking rent was $39 per square foot.

110 West 40th St

416

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

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

The real estate brokerage firm signed a new lease. The reported asking rent was $39 per square foot.

11 Hanover Square

415

Top 5 Management / Max Vizgalin, VIZA Group

Mount Pleasant Management / John Cryan, Mount Pleasant Management

The beauty agency inked a five-year lease. The reported asking rent was $27 per square foot.

139 Fulton St

400

Roswell Studios / Max Vizgalin, VIZA Group

UNYPO / Michelle Galpern, UNYPO

The software development and graphic design company inked a lease. The reported asking rent was $39 per square foot.

1133 Broadway

400

Warren Red / Uriel Gandelman, VIZA Group

Kew Management / Represented inhouse

The interior design company signed a three-year lease. The reported asking rent was $46 per square foot.

Retail leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

542-580 Second Ave

42,000

Fairway Market / G. Alterman, R. Futterman, RKF

DFD Development LP / David Green, C&W

The grocery chain signed a long-term lease for another location. The new market is scheduled to open in November 2012.

345 Adams St (Brooklyn)

15,890

Bright Horizons Children’s Center / n/a

Muss Development / A. Schuster, B. Segall, RKF

The children’s learning center signed a retail lease.

641 Sixth Ave

15,584

Staples / Chase Welles, SCG Retail

Atlas Capital / G. Alterman, R. Berkowitz, R. Futterman, RKF

The office supplies chain signed a long-term lease for 4,696 square feet on the ground floor and 10,888 square feet on the lower level.

192 Seigel St (Brooklyn)

11,500

The Meatball Shop / Howard Darsi, Kalmon Dolgin Affiliates

Fay Da Bakery / Pinnacle Realty

The restaurant chain signed a long-term lease for another location.

825 East 233rd St (The Bronx)

10,000

Morris Heights Medical Group / R. Torres, P. DeGennaro, Besen Retail

825 E. 233rd LLC / R. Torres, P. DeGennaro, Besen Retail

The medical center signed a lease.

326 East 149th St (The Bronx)

10,000

St. Barnabas Hospital’s Southern Medical Group / J. Houlihan, J. Schwartz, M. McEvoy, HoulihanParnes Realtors

n/a / n/a

The medical group signed a 10-year lease for ground-floor space and a full basement.

140 Washington St

9,800

Morton’s the Steakhouse / n/a

n/a / n/a

The steakhouse signed a lease for 2,125 square feet on the ground floor and 7,675 square feet on the lower level, the New York Post reported.

20 West 57th St

7,700

Mackenzie-Childs / Jeffrey Roseman, Newmark Grubb Knight Frank

Solow Realty & Development Company / B. Eisenman, R. Futterman, RKF

The home furnishings and gifts retailer signed a long-term lease to relocate its store. It is currently located at 14 West 57th Street.

18 West 21st St

7,300

Décor Planet / Doug Rice, Rice & Associates

Marton Ventures / Doug Rice, Rice & Associates

The bathroom furnishing company leased retail space.

808 Columbus Ave

7,000

Rookie USA / Zach Mishaan, Winick Realty

n/a / Winick Realty

The children’s apparel retailer signed a lease, the New York Post reported.

716 Lexington Ave

6,900

Superdry USA / B. Dweck, C. DeCrosta, Thor High Street

Payless Shoe Source / A. Schuster, J. Fantasia, RKF

The apparel retailer signed a five-year sublease for multilevel space, the New York Post reported. This will be its fourth city location.

305 Bleecker St

6,250

WiNK / Z. Beloff, R. Futterman, B. Rosen, J. Strauss, RKF

BLDG Bleecker LLC / R. Goldman, T. Jacoby, B. Rosen, RKF

The women’s apparel retailer signed a lease.

80 August 2012 www.TheRealDeal.com

Retail leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

200 East 79th St

6,200

Charles Schwab & Co. / D. Green, S. Soutendijk, C&W; P. Spiegel, Scopa CRE

Skyline Developers / J. Roseman, G. Gropper, Newmark Grubb Knight Frank

The bank signed a long-term lease for ground-floor retail space.

821 Broadway

4,300

Pret A Manger / J. Strauss, J. Totolo, RKF

821 Broadway LLC / Represented inhouse

The sandwich chain signed a lease for 2,300 square feet on the ground floor and 2,000 square feet on the upper level.

68-72 East 131st St

4,239

Galaxy Medical PC / M. Kabiri, W. Stein, Manhattan Commercial Realty

n/a / Andrew McNee, 1916 Partners LLC

The medical office signed a six-year lease for retail space.

1491 Third Ave

4,200

Janovic Plaza / Craig Hantgan, Esquire Properties

M3 Holdings / J. Roseman, A. Zhen, Newmark Grubb Knight Frank

The paint and decorations shop signed a 13-year lease, the Commercial Observer reported.

31 Penn Plaza

4,000

Pennsylvania Six / n/a

Savanna / M. Frankel, A. Zhen, M. Cohen, Newmark Grubb Knight Frank

The restaurant signed a long-term lease.

875 Third Ave

3,600

1 Bite Mediterranean / F. Consolo, J. Aquino, D. Ferrer, Prudential Douglas Elliman

n/a / C&W

The restaurant signed a 10-year lease for another location.

141 West 20th St

3,500

Muze Salon / David Beare, Core

Marton Ventures / Doug Rice, Rice & Associates

The salon signed a lease.

1178 Lexington Ave

3,400

Bellmarc Realty / Dobbs Associates Inc.

n/a / Wallack Management

The real estate brokerage signed a 10-year lease for 2,000 square feet on the ground floor and 1,400 square feet on the lower level. The reported asking rent was $150 per square foot.

32 West 18th St

3,260

Lithe Method / Alan Bonett, Adams & Co.

n/a / J. Roseman, A. Zhen, Newmark Grubb Knight Frank

The fitness studio signed a lease. The reported asking rent was $75 per square foot.

434 West Broadway

3,200

La Perla / K. Bellantoni, B. Rosen, RKF

434 Associates LLC / K. Bellantoni, J. Ezra, RKF

The lingerie shop signed a lease.

1673 Macombs Ave (The Bronx)

3,150

American 99 Cent Store / n/a

LB Financial / Lou Klein, NAI Friedland Realty

The discount retailer signed a lease.

4 West 14th St

2,950

Off the Wall Frozen Yogurt / J. Strauss, Z. Winkler, RKF

4-6 West 14th Street LLC / n/a

The frozen yogurt shop signed a lease.

248 West 23rd St

2,800

Off the Wall Frozen Yogurt / J. Strauss, Z. Winkler, RKF

Chelsea Fudosan LTD / T. Gallina, A. Cukier, Newmark Grubb Knight Frank

The frozen yogurt shop signed a lease.

750 Eighth Ave

2,700

Satya Eastern Kitchen / n/a

Hersel Torkian / n/a

Real estate investor Mark Monasebian signed a lease for an Asian fusion restaurant, the New York Post reported. The asking rent was $250 per square foot, according to the Post.

2060-2064 Wallace Ave (The Bronx)

2,500

Green Star at Wallace Inc. / M. Mager, E. Dweck, Besen Retail

BLDG Management Co. Inc. / M. Mager, E. Dweck, Besen Retail

The day care center signed a lease.

604 Second Ave

2,300

Chipotle Mexican Grill / n/a

HKAL 34th Street LP / Gary Alterman, RKF

The Mexican chain signed a lease for another location.

1980 Third Ave

2,000

Kaiâ&#x20AC;&#x2122;s Hillside Deli & Grocery / H. Abramowitz, G. Covey, A. Schuster, RKF

Robert Kessner / H. Abramowitz, G. Covey, A. Schuster, RKF

The deli signed a lease.

122 Westchester Square (The Bronx)

1,800

MJ Brick Oven Pizza / NAI Friedland Realty

Chatham Management / NAI Friedland Realty

The pizzeria signed a lease.

825 Eighth Ave

1,685

Pret A Manger / J. Strauss, J. Totolo, RKF

Worldwide Plaza / Represented in-house

The sandwich chain signed a lease for another location.

1038 Bedford Ave (Brooklyn)

1,500

n/a / n/a

n/a / Andrew Clemens, Massey Knakal

A discount retailer signed a lease.

54 West 21st St

1,436

Sandra Arnold / Earl Bateman, Rice & Associates

5421 Equities Co. / Daniel Breiman, Olmstead Properties Inc.

The communications firm leased retail space.

942 Columbus Ave

1,400

n/a / n/a

n/a / David Chkheidze, Massey Knakal

An Indian restaurant signed a lease.

50 Lexington Ave

1,400

Starbucks / David Firestein, SCG Retail

The Hakimian Organization / S. Ferrigno, R. Gelber, RKF

The coffee chain signed a lease for another location.

1034 Third Ave

1,350

General Nutritional Center / A. Schuster, G. Covey, RKF

The Trump Organization / J. Podell, M. Siegel, I. Lerner, C&W

The nutritional products retailer signed a long-term lease for another location.

40 East 12th St

1,275

Dryden Gallery Inc. / n/a

The Hakimian Organization / S. Ferrigno, R. Gelber, RKF

The art gallery signed a retail lease.

111 Fourth Ave

1,265

Dr. Datikashvilli DMD / M. Kabiri, W. Stein, Manhattan Commercial Realty

n/a / Gregory Gang, JDF Realty

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

1301 Sixth Ave

1,200

Starbucks / n/a

Paramount Group / Eric Gelber, CBRE

The coffee chain signed a lease for another location.

1 South Elliott Place (Brooklyn)

1,200

n/a / n/a

n/a / E. Altschul, R. Condren, CPEX Real Estate

A bakery signed a 10-year lease.

776 Sixth Ave

1,135

Melt Shop / BCD

Chelsea New York Realty Company LLC / B. Spiegel, B. Bergman, Rose Associates

The eatery signed a 10-year lease with a five-year option. The reported asking rent was $100 per square foot.

135 John St

1,100

Starbucks / David Firestein, SCG Retail

Rockrose Development / Represented in-house

The coffee chain signed a lease for another location.

219 First Ave

1,050

Starbucks / David Firestein, SCG Retail

n/a / Jason Pruger, Newmark Grubb Knight Frank

The coffee chain signed a lease for another location.

1527 York Ave

1,000

Forte Caterers Inc. / G. Alterman, A. Stern, RKF

MGS Capital NY LLC / G. Alterman, A. Stern, RKF

The catering company signed a retail lease.

1412 Second Ave

1,000

Kids at Art / Victor Menkin, Menkin Realty Services

n/a / Victor Menkin, Menkin Realty Services

The art and party studio for children signed a 10-year lease to relocate from 431 East 73rd Street, the New York Post reported. The asking rent was $100 per square foot, according to the Post.

275 Seventh Ave

1,000

General Nutrition Center / A. Schuster, G. Covey, RKF

275 Seventh Avenue LLC / E. Gelber, P. Cannon, CBRE

The nutritional products retailer signed a long-term lease for another location.

2120 Nostrand Ave (Brooklyn)

900

n/a / n/a

n/a / Andrew Clemens, Massey Knakal

A pawn shop signed a long-term lease.

985 East 174th St (The Bronx)

900

Day Night Deli Grocery / M. Mager, E. Dweck, Besen Retail

985 East 174 LLC / M. Mager, E. Dweck, Besen Retail

The deli signed a lease.

65 Rivington St

650

Chris Miller / Julian Hitchcock, KAM Hospitality

Kuta Satay House / Christopher Fidel, Suzuki Capital

The restaurateur signed a lease for a new eatery and bar.

150 Fourth Ave (Brooklyn)

500

Finest Cleaner / n/a

n/a / E. Altschul, R. Condren, K. Triglia, CPEX Real Estate

The dry cleaners signed a 10-year lease.

77 Greenwich Ave

250

Aesop USA Inc. / M. Mager, E. Dweck, Besen Retail

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

The skin care shop signed a lease.

82 August 2012 www.TheRealDeal.com The

Buys Address

Size

Buyer / Representative

Seller / Representative

Notes

45 West 139th St

7 apt. bldgs, 1,800 units total

Citigroup; L&M Development Partners / n/a

AREA Property Partners LP; Vantage Properties LLC / n/a

The Savoy Park apartment complex sold for $210 million, Bloomberg News reported. The rent-regulated apartments will remain as affordable housing. AREA Property Partners and Vantage Properties acquired the properties for $175 million in 2006.

21 West 86th St

116,000 sf apt. bldg, 144 units total

Cornerstone / n/a

Rambleside Holdings / D. Stacom, P. Liebowitz, CBRE

The Brewster apartment building sold for $98 million, or $845 per square foot.

50 West 58th St

8-story, 60,500 sf office bldg

BOB 57 LLC / n/a

Hadassah / n/a

The Jewish womenâ&#x20AC;&#x2122;s philanthropic organization sold its headquarter building, known as Hadassah House, for $71.5 million, the Wall Street Journal reported.

71 Laight St

Residential development site

Taconic Investment Partners / Peter Hauspurg, Eastern Consolidated

Group Arranz Acinas / I. Himelblau, A. Miller, Eastern Consolidated

The property sold for $65 million. The site will be converted to 34 luxury residences.

188 Madison Ave

140,000 sf office condo

Church Pension Group / n/a

The New York Public Library / n/a

The office condominiums spanning floors three through seven sold for $60.8 million, the New York Post reported.

120 West 23rd St

48,539 sf apt. bldg, 42 units total

Aimco / n/a

Milan Associates / n/a

The Milan residential building sold for $39.25 million.

142 North 6th St (Brooklyn)

44-unit apt. bldg

Steiner Studios / David Behin, MNS

Read Property Group / David Behin, MNS

The rental building sold for $38 million, Crainâ&#x20AC;&#x2122;s reported.

Bronx portfolio

9 apt. bldgs, 371 units

Omni New York LLC / S. Shkury, M. Tortorici, S. Hirschfield, Ariel Property Advisors

Local multifamily operator / S. Shkury, M. Tortorici, S. Hirschfield, Ariel Property Advisors

The package sold for $33.25 million. The buildings are located at 737 Southern Boulevard and 663, 665, 712, 751, 766, 772-774, 775 and 784 Fox Street. The units consist of two studios, 87 one-bedrooms, 185 two-bedrooms, 62 threebedrooms and 35 four-bedrooms.

144 Spring St

Development site

Ralph Bartel / M. Glanzberg, C. Owles, Sinvin Real Estate

Centaur Properties / M. Glanzberg, C. Owles, Sinvin Real Estate

The empty corner development site sold for $30 million, the New York Post reported. The buyer plans to construct a multilevel retail building on the site, according to the Post.

133-135 Greenwich St

6,109 sf development site

Hidrock Realty / D. Schechtman, L. Lieberman, R. Khodadadian, A. Polsinelli, Eastern Consolidated

Sam Shapiro / D. Schechtman, L. Lieberman, R. Khodadadian, A. Polsinelli, Eastern Consolidated

The property sold for $27.9 million, or $182 per square foot.

50-58 East 3rd St

3 apt. bldgs, 78 units total

GRJ / n/a

n/a / n/a

The properties sold for $23.5 million.

21-23 Peck Slip

2 apt. bldgs, 20 units total

810-257 Water Street LLC / n/a

EDE Peck Slip LLC / Camelot Realty Group

The adjacent buildings sold for $16.8 million.

33 and 35 Crosby St

Two 7-story apt. bldgs, 24 units total

n/a / Ivan Hakimian, HPNY

The walk-up buildings sold for $13.75 million.

90 Meserole St (Brooklyn)

4-story apt. bldg, 32 units total

Springhouse Partners / n/a

9096 Meserole Street LLC / n/a

The rental building sold for $13.75 million, or $430,000 per unit.

11 East 31st St

Hotel development site

Cube Capital; Simon Development Group; Eagle Point Hospitality Partners; KSNY / n/a

Geolo Capital / n/a

The once-stalled boutique hotel development site sold for $13.5 million. Plans call for a 33-story, 260-room hotel with a 125-seat restaurant and rooftop bar. Construction is slated to begin in early 2013, with the hotel opening in 2014 or early 2015.

3572 and 3576 DeKalb Ave (The Bronx)

Two 6-story apt. bldgs, 140 units total

3572 GI LLC / Aaron Jungreis, Rosewood Realty

3572 DeKalb LLC / Aaron Jungreis, Rosewood Realty

The contiguous elevator buildings sold for $12.18 million. The apartments consist of 10 studios, 85 one-bedrooms, 24 two-bedrooms, 20 three-bedrooms and one four-bedroom.

172-174 Montague St (Brooklyn)

2-story, 8,150 sf retail bldg

Bh 1 Cd LLC / Lynda Blumberg, Besen & Associates

Robar LLC / David Davidson, Besen & Associates

The retail property sold for $12 million. The two retail spaces are occupied by a Hallmark store and pub, with leases expiring by July 2013. The property offers up to 60,000 square feet of air rights for future development.

521-523 East 12th St

Two 5-story apt. bldgs, 36 units total

n/a / Adelaide Polsinelli, Eastern Consolidated

n/a / R. Khodadadian, A. Polsinelli, Eastern Consolidated

The properties sold for $10 million, or about $476 per square foot. The price represents a capitalization rate of 4.4 percent.

155 West 46th St

7-story, 12,860 sf office bldg

SL Green; Jeff Sutton / n/a

Simplon Hosiery Mills / J. Ciraulo, B. Knakal, Massey Knakal

The property sold to the 50-50 partnership for $8.38 million, or about $652 per square foot. The buyers plan to demolish the building in order to expand the selling area at a large retail project they are developing next door. The purchase figures into the larger repositioning of the landmarked four-story I. Miller Building at 1552 Broadway, which will be combined with the lower floors of the neighboring office building at 1560 Broadway. Those buildings are adjacent to the newly acquired structure.

256 Fifth Ave

6-story, 12,960 sf office bldg

Mark Geragos / Giuseppe Inglese, Friedman-Roth Realty

Private investment group / E. Roth, J. Radmin, FriedmanRoth Realty

The building sold for $8 million, or $618 per square foot, to the attorney to the stars, which will use the property for the New York offices of his Los-Angeles based Geragos & Geragos law firm.

332 East 95th St

6-story apt. bldg, 41 units total

n/a / Orly Hazan, Besen & Associates

The property sold for $7.6 million, or $402 per square foot.

202 East 21st St

7-story, 15,000 sf apt. bldg, 30 units total

n/a / Ivan Hakimian, HPNY

The elevator building sold for $6.25 million.

212 East 49th St

4-story, 8,817 sf comm. bldg

n/a / n/a

n/a / J. Ciraulo, C. Olsen, C. Waggner, Massey Knakal

The property sold for $6.1 million, or $692 per square foot.

61 Park Place

16,100 buildable sf development site

n/a / n/a

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

The property sold for $5.75 million.

567 West 125th St

6-story apt. bldg, 22 units total

n/a / Eric Roth, Friedman-Roth Realty

n/a / N. Haque, P. Ragone, Friedman-Roth Realty

The walk-up building sold for $5 million.

146 Montague St (Brooklyn)

5-story mixed-use bldg

n/a / I. Glasman, O. Cohen, Itzhaki Properties

The property sold for $4.8 million.

48 Bedford St

5-story apt. bldg, 10 units total

Benchmark Real Estate Group / G. Niblock, J. Smith, Friedman-Roth Realty

n/a / n/a

The walk-up property sold for $4.48 million.

189-191 South 9th St (Brooklyn)

6-story, 24,900 sf apt. bldg, 30 units total

n/a / N. Haque, J. Smith, FriedmanRoth Realty

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

The walk-up building sold for $4.4 million, or about $176 per square foot. The price represents a capitalization rate of about 6.2 percent.

881-887 Fifth Ave (Brooklyn)

Two 4-story apt. bldgs, 34 units total

n/a / n/a

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

The properties sold for $4.32 million, or about $215 per square foot.

2411-2415 Prospect Ave (The Bronx)

Two 5-story apt. bldgs, 54 units total

n/a / n/a

n/a / Karl Brumback, Massey Knakal

The properties sold for $4.2 million, or about $100 per square foot.

203 East 14th St

5-story apt. bldg, 9 units total

n/a / Linda Koch, Friedman-Roth Realty

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

The property sold for $3.8 million.

www.TheRealDeal.com August 2012 83

Buys continued Address

Size

Buyer/ Representative

Seller / Representative

Notes

345 West 84th St

5-story, 5,295 sf apt. bldg, 10 units total

n/a / n/a

n/a / Hall Oster, Massey Knakal

The property sold for $3.2 million, or about $604 per square foot. The building has one two-bedroom, two one-bedrooms and seven studios. There are an additional 1,650 square feet of air rights for future development.

40 Peck Slip

4-story comm. bldg

n/a / Ron Cohen, Besen & Associates

n/a / Jackie Himmelstein, Besen & Associates

The property sold for $3.15 million, or $791 per square foot. The building has one store and three floor-through commercial lofts.

118 East 7th St

5-story apt. bldg, 12 units total

118 East 7 LLC / Glenn Raff, Besen & Associates

n/a / Bobby Khurana, Besen & Associates

The property sold for $3.05 million, or $449 per square foot.

3 Monroe Place (Brooklyn)

4,360 sf townhouse, 3 units total

n/a / n/a

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

The multi-family townhouse sold for $3 million, or about $567 per square foot.

70 West 106th St

5-story, 8,000 sf apt. bldg

n/a / Jeffrey Tanenbaum, Halstead

n/a / Hall Oster, Massey Knakal

The property sold for $3 million, or about $370 per square foot.

5905 Broadway (The Bronx)

20,000 sf comm. bldg

n/a / n/a

n/a / Karl Brumback, Massey Knakal

The property sold for $2.65 million, or $132 per square foot. The former factory and parking garage was the site of a Billiards hall before being converted to its current use as a church.

384 Court St (Brooklyn)

4-story apt. bldg, 6 units total

n/a / n/a

n/a / Kenneth Freeman, Massey Knakal

The property sold for $2.43 million, or about $362 per square foot.

206 East 75th St

4-story, 4,320 sf apt. bldg, 5 units total

n/a / n/a

n/a / G. Garvin, B. Knakal, Massey Knakal

The property sold for $2.33 million, or about $538 per square foot.

243 West 135th St

5-story, 9,695 sf apt. bldg, 8 units total

n/a / n/a

n/a / R. Shapiro, J. Lipton, Massey Knakal

The property sold for $2.3 million, or about $230 per square foot.

2556 Colden Ave (The Bronx)

5-story apt. bldg, 30 units total

n/a / Giuseppe Inglese, FriedmanRoth Realty

n/a / George Niblock, Friedman-Roth Realty

The property sold for $2.2 million.

137 West 25th St

5,940 sf office condo

Peter Callahan / C. Halliburton, B. Himmel, Corcoran

Sony / n/a

The fourth-floor office condo sold for $2.1 million, the New York Post reported. The purchaser, a celebrity caterer, will build out the office with a full kitchen, design studio and event space.

41 Seventh Ave South

3,412 sf retail condo

n/a / n/a

n/a / James Nelson, Massey Knakal

The commercial condo sold for $1.87 million. The multilevel space will be occupied by a hair salon.

95 Siegel St (Brooklyn)

4-story, 8,000 sf apt. bldg, 10 units total

n/a / M. Fridman, B. Zimmermann, Barcel Group

n/a / n/a

The walk-up building sold for $1.8 million. The price represents a gross rent multiple of 11.

2114 Daly Ave (The Bronx)

5-story, 21,355 sf apt. bldg, 28 units total

n/a / George Niblock, FriedmanRoth Realty

n/a / N. Haque, P. Ragone, Friedman-Roth Realty

The walk-up building sold for $1.73 million.

11-13 St. Marks Place (Brooklyn)

Development site

SGI International / B. Leary, T. King, CPEX Real Estate

n/a / TerraCRG

The vacant lot sold for $1.65 million, or $127 per buildable square foot. The buyer plans to construct a new, 13,000-square-foot building.

405-409 Johnson Ave (Brooklyn)

3 office and retail bldgs, 12,000 sf total

n/a / n/a

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

The commercial buildings sold for $1.6 million, or about $132 per square foot. Together, there are four commercial lofts, one office, a motorcycle shop and a bakery.

1653-1655 Madison Ave

Development site

n/a / n/a

n/a / L. Kimyagarov, P. Massey, Massey Knakal

The development site sold for $1.58 million. The property has approved plans in place for a 24,375-square-foot residential building.

171 15th St (Brooklyn)

4-story, 5,400 sf apt. bldg, 8 units total

Local investor / n/a

Polizzi Realty LLC / A. Hess, J. Colleran, TerraCRG

The building sold for $1.52 million, or about $281 per square foot. The price represents a capitalization rate of 5.3 percent and a gross rent multiple of 12.5.

38-40 Crescent St (Queens)

2-story, 5000 sf office bldg

n/a / n/a

n/a / Al Holloman, Massey Knakal

The property sold for $1.31 million, or $260 per square foot.

2330 Hoffman St (The Bronx)

10,000 sf industrial bldg

n/a / n/a

n/a / J. Houlihan, K. Houlihan, Houlihan-Parnes Realtors

The vacant warehouse building sold for $1.2 million.

359 12th St (Brooklyn)

4-story, 7,000 sf apt. bldg, 8 units total

n/a / Marcel Fridman, Barcel Group

n/a / n/a

The walk-up building sold for $1.15 million. The price represents a gross rent multiple of 13.

482-488 Seneca Ave (Queens)

8,750 sf industrial bldg

n/a / Shay Zach, Itzhaki Properties

The vacant warehouse sold for $1.1 million.

126-15/17 Liberty Ave (Queens)

2 apt. bldgs, 4 units total

n/a / n/a

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

The properties sold for $1.09 million, or about $194 per square foot.

874 Bergen St (Brooklyn)

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

Local investor / Shlomo Antebi, GFI Realty

Bergen Estates LLC / S. Antebi, J. Landau, GFI Realty

The property sold for $1.08 million.

Financing Address

Size

Borrower / Representative

Lender / Representative

Notes

452 Fifth Ave

865,000 sf office bldg

PBC Real Estate LLC / Shawn Rosenthal, Ackman-Ziff

JPMorgan Chase / n/a

A $400 million loan was provided to refinance the building. The refinancing consists of a $300 million senior loan and $100 million in mezzanine debt. The long-term, non-recourse loan is interest only for five years with a blended interest rate of 5.04 percent.

110 William St

900,000 sf office bldg

Swig Equities; Longwing / Silverpark Real Estate Partners

UBS Real Estate Securities; Barclays Capital; Pearlmark Real Estate Partners / n/a

A $161.5 million loan was provided to refinance the property. UBS Real Estate Securities and Barclays Capital provided a $141.5 million first mortgage, and Pearlmark Real Estate Partners provided a $20 million mezzanine loan.

420 Park Ave South

20-story hotel, 249 rooms total

n/a / A. Katz, M. Silbersher, R. Kimyagarov, Deerwood Real Estate Capital

Citigroup; Redwood Trust / n/a

A total of $160 million in loans were provided to refinance the Gansevoort Park Hotel, GlobeSt.com reported. Citigroup refinanced the first mortgage for $140 million, and Redwood refinanced the mezzanine debt in the amount of $20 million.

21 East 26th St

28,000 sf apt. bldg

Mitchell Holdings / n/a

Joseph Merrill Capital / n/a

A $26 million construction loan was provided to convert the building to condominiums. The building will have three full-floor condos and one duplex penthouse upon completion. Construction is slated for completion in December.

3905 29th St (Queens)

16-story hotel, 136 rooms total

Queens Plaza North LLC / B. Delitsky, K. Patel, J. Keller, HFF

552 Academy St

72-unit apt. bldg

Community League of the Heights; Alembic Community Development / n/a

n/a / n/a

A $21.1 million loan was arranged to fund the extensive rehabilitation of the building.

3135 Johnson Ave (The Bronx)

120-unit apt. bldg

3135 Johnson Tenant Owners Corp. / n/a

NCB / n/a

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

84 August 2012 www.TheRealDeal.com

n/a / n/a house ad

A $25 million loan was provided to refinance the Holiday Inn Manhattan View hotel in Long Island City.

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Financing continued Address

Size

Borrower / Representative

Lender / Representative

Notes

760 West End Ave

74-unit apt. bldg

760 West End Avenue Owners Corp. / n/a

NCB / n/a

A $4 million first mortgage and a $700,000 line of credit were arranged for the building.

100 Hudson St

44-unit apt. bldg

100 Hudson Tenants Corp. / n/a

NCB / n/a

A $3.5 million line of credit was arranged for the building.

143-30 Roosevelt Ave (Queens)

89-unit apt. bldg

Holiday House Owners Corp. / n/a

NCB / n/a

A $3.3 million first mortgage was arranged for the building.

220 East 73rd St

92-unit apt. bldg

220 East 73 Owners Corp. / n/a

NCB / n/a

A $3.2 million first mortgage was arranged for the building.

57 East 72nd St

20-unit apt. bldg

57 East 72nd Corporation / n/a

NCB / n/a

A $2.6 million first mortgage and a

346-352 West 56th St

79-unit apt. bldg

346-352 West 56th Street Residents Inc. / n/a

NCB / n/a

A $2.2 million first mortgage and a $200,000 line of credit were arranged for the building.

40-18 Hampton St (Queens)

59-unit apt. bldg

40-18 Hampton Street Owners Corp. / n/a

NCB / n/a

A $1.5 million first mortgage and a $250,000 line of credit were arranged for the building.

244-246 East 90th St

40-unit apt. bldg

244-246 East 90th Residents Inc. / n/a

NCB / n/a

A $1.4 million first mortgage was arranged for the building.

170 Second Ave

74-unit apt. bldg

170 Second Avenue Owners Corp. / n/a

NCB / n/a

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

145 West Broadway

5-unit apt. bldg

145 Upper Corp. / n/a

NCB / n/a

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

Other Deals $500M deal for Citi Tower slated to close The sale of Long Island City’s Citi Tower was scheduled to close last month for a little over $500 million, the New York Post reported. Sellers SL Green and JPMorgan squeezed more money out of the buyers, a group led by Brooklynbased real estate investor David Werner, in order to extend the closing date on the tower, also known as One Court Square, which is the tallest building in Queens, the Post said. The price for the building comes out to approximately $350 per square foot. (The deal was announced after the deadline for the Deal Sheet.)

Vornado acquires Carlton House retail for $280M Vornado Realty Trust last month entered contract to purchase all 33,389 square feet of retail space at 680 Madison Avenue, formerly the Carlton House Hotel, for $280 million, according to the New York Post. The retail is at the base of a condominium conversion planned by Gary Barnett’s Extell Development and Angelo, Gordon & Co. The deal works out to about $8,235 per square foot. About 13,000 square feet of the retail space has leases out, according to the Post, and asking rents were $1,500 per foot for the ground floor and $350 per foot for the second floor. (The deal was announced after the deadline for the Deal Sheet.)

Five years on, GSA signs 1 WTC lease About five years after the General Services Administration first began talks for a space at 1 World Trade Center, the agency last month signed a lease for 270,000 square feet at the landmark tower, the New York Post reported. The deal pushes the 3 million square-foot tower past 50 percent leased. Last August, the CSA signed a term sheet at a rent in the low $40s per square-foot. But by this spring no further progress had been made, and Senator Charles Schumer began pressing the GSA to get the deal done by Independence Day. (The deal was announced after the deadline for the Deal Sheet.)

El-Gamal sells 27th Street building for $65M The San Francisco-based Walnut Hill Group has purchased Sharif El-Gamal’s 12-story Chelsea office building at 31 West 27th Street. It was the second purchase by Walnut Hill in Manhattan. In February 2011, the company acquired the Holiday Inn Express hotel building at 15 West 45th Street in Times Square, in a joint venture with minority partner Magna Hospitality Group. El-Gamal, CEO of Soho Properties and the developer of the proposed Islamic cultural 80 2009 www.TheRealDeal.com 86 July August 2012 www.TheRealDeal.com

center, known as Park51, in Lower Manhattan, purchased the Chelsea building for $45.7 million in October 2009. At the time, critics said that El-Gamal overpaid for the property. (The deal was announced after the deadline for the Deal Sheet.)

327 and 329 East Houston Street for $8.4 million from the estate of William Gottlieb, which owns, and has begun selling, a large portfolio of Manhattan real estate. It also picked up 331 East Houston Street and 163 Ridge Street from Michael Albano for $4 million. (The deal was announced after the deadline for the Deal Sheet.)

Extell project pushes Sam Ash to 34th Street Fearing that Extell Development is preparing a new development for its West 48th Street storefronts, Sam Ash is leaving the thoroughfare, between Sixth and Seventh avenues, long dominated by music instrument and equipment shops. According to the New York Post, Sam Ash signed a lease for 30,000 square feet at SL Green Realty’s 333 West 34th Street, across from the Loews multiplex cinema. The company will move its six stores along West 48th Street to the new location, which comprises 20,000 square feet on the sidewalk and 10,000 more below ground. The space was formerly JPMorgan’s cafeteria. (The deal was announced after the deadline for the Deal Sheet.)

Hotel mogul Sam Nazarian finally plants flag in NYC

Praedium Group acquires UWS buildings for $17M

Brooklyn retail block trades for $18.5 million

A package of four apartment buildings on the Upper West Side sold for $17 million to private equity firm the Praedium Group, city records filed last month show. The five-story, mixed-use buildings are located at 176-182 82nd Street, at Amsterdam Avenue. The seller was a foreign entity called Navistone Amsterdam LLC, which bought the properties for $18.7 million in May 2008, with plans to convert the 30,000-square-foot property to condominiums. (The deal was announced after the deadline for the Deal Sheet.)

Former MF Global space at Park Avenue Plaza leased to Intercontinental Exchange MF Global’s former Park Avenue Plaza space at 55 East 52nd Street has been spoken for. Intercontinental Exchange, which provides market services and technology for trading commodities, will take the two-floor, 60,000square-foot space, the New York Observer reported last month. The new lease for Intercontinental Exchange (ICE) comes amid a consolidation effort to bring several of its Manhattan locations under one roof. (The deal was announced after the deadline for the Deal Sheet.)

Gottlieb properties sold as part of LES development site deal Four Lower East Side lots primed for development traded hands last month for $12.4 million, Lo-DownNY reported. An LLC created by Samy Mahfar’s SMA Equities bought

For nearly two years hotel mogul Sam Nazarian has been saying he wants to expand his empire to New York City. According to the Wall Street Journal, he’s finally doing just that in the red-hot area for hotels north of Madison Park at 444 Park Avenue South, on the corner of East 30th Street. Moin Development Corp. purchased the 14-story office building last August for $45 million and partnered with Nazarian to plant the SLS brand in the city. Together they plan to spend about $40 million to add five floors to the building, convert it into a hotel and open it in the second quarter of next year.

An LLC controlled by the Brooklyn real estate investor Isaac Shalom has purchased a block-long stretch of retail buildings — home to a Key Foods supermarket, Papa John’s and Subway franchises and 11 “mom and pop” stores — along Brooklyn’s Nostrand Avenue for $18.5 million, a source told The Real Deal last month. Emmes Asset Management, a Manhattan-based real estate investment firm, sold the Flatbush portfolio because it “got a good number,” the source said. The firm acquired the properties in 1997 for an undisclosed sum through an entity called NRP LLC, according to city property records. A representative for Emmes did not immediately return a call seeking comment. (The deal was announced after the deadline for the Deal Sheet.)

Dumbo conversion site enters contract A three-story Dumbo warehouse primed for residential conversion is in contract, Stephen Palmese, first vice president of Massey Knakal Realty Services, confirmed to The Real Deal last month. Brownstoner reported the price to be upwards of $30 million, but Palmese declined to comment on the exact price. The building, at 51 Jay Street, occupies the entire block between Plymouth and Water streets and is built to 80,000 square feet on a lot that is zoned up to 150,000 square feet. A developer might not be able to unlock all those buildable rights because the property is in the Landmarks Preservation Commission-governed Dumbo Historic District. (The deal was announced after the deadline for the Deal Sheet.) TRD

Easy money is within reach. Add a new revenue stream to your business when you become a Time Warner Cable Marketing Agent. Earn money when you sign residents up for TV, Internet and Home Phone serivce. You’ll earn money for new residents and for the existing Time Warner Cable customers in your building. You can even double your earnings when you sign up more residents. There’s nothing to lose – just a whole lot of money to be made. To find out more about earning easy money with Time Warner Cable, call 212.598.1761.

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_8.1_mdu_map2_10.5x14.5

Mobile apps

Columbus Circle Station Retail Plaza Master Lease Opportunity 11,500 Square Feet of Retail Space Eighth Avenue Mezzanine Level – 57th to 58th Streets The Metropolitan Transportation Authority has issued a Request for Proposals for a long-term master lease of its mezzanine level retail plaza at the newly-renovated Columbus Circle Station. The retail plaza comprises 13 retail spaces ranging from 550 to 1,750 square feet. Retail spaces may be combined or �� Columbus Circle Station is one of the busiest stations in New York City serving over 42 million passengers each year. You can get more information about this opportunity and download a copy of the Request for Proposals (RFP) on the Internet by going to: http://mta.info/mta/realestate/retail_leasing.html

TURN WRITEOFFS INTO REVENUE RECOVER RENT ARREARS, USE & OCCUPANCY, DAMAGE, MONEY JUDGMENTS & OTHER PAST DUE RECEIVABLES FROM PRIOR TENANTS NO COLLECTION - NO FEEIELS

from page 36

tabs, showing sale listings, rental listings, an address search and a “My Stuff ” folder. PROS: The interface is clean and straightforward. StreetEasy’s app pulls listings from numerous firms, so it’s more comprehensive than some of the other apps, at least when it comes to New York properties. It also lets users search by address and building name — a handy tool if an apartment seeker wants to look up property information in situ. Users with StreetEasy accounts can seamlessly transfer information between the app and the website, and saved properties load automatically. CONS: The search capabilities could be more user-friendly: To find the search function, users must press a confusingly labeled “Edit Search” button in the upper corner of the listings screen. Figuring out how to search by neighborhood or by GPS is a complicated, multistep process. But StreetEasy is in the midst of developing a new app, scheduled to launch in the next two months, which aims to fix some of these problems, said senior developer Zach Halbrecht. The team wants to broaden the GPS search, adding capabilities that will let users create saved searches based on their current location. HANDY FEATURE: Each listing page features a “Listing History,” showing dates when the property came on the market, switched brokers or had a price cut.

Zillow Real Estate Available at: APPLE APP STORE, GOOGLE PLAY, BLACKBERRY APP WORLD DESCRIPTION: The most popular real estate app around, Zillow Real Estate feels almost like a streamlined website. There’s even a home page–like opening screen, where users can navigate to a GPS-enabled listing search, mortgage rate information and other items. To access some of the features, though, users must have an account with Zillow. PROS: Zillow’s app has an exhaustive “Affordability” calculator that lets users input personalized information — mortgage loan terms, property taxes, homeowner association dues and so on — to determine monthly payments for speciﬁc properties. The Google Maps interface shows the price of listings, as well as their location, directly on the street grid; one tap calls up additional listing facts. And even though Zillow is a national website, the app features a wealth of New York listings, making it easy to compare prices block-to-block. CONS: Zillow is dependent on its varied listing sources for property information, producing a range of quality in the listings. For example, some listings lack full addresses, while others have poor-quality photos or lack photos altogether. One listing that appeared on the map in Midtown was actually a property in Bangkok. “We’re a marketing platform for brokerages and for agents,” just like a newspaper, said Amy Bohutinsky, Zillow’s chief marketing ofﬁcer. It’s up to brokers to provide the best listings possible for their properties, she said. HANDY FEATURE: In addition to providing real-time data on mortgage rates, the app lets users get custom loan rates based on income, credit score, zip code and other criteria. TRD

Columbus_Circle_ 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 Real Deal 4.625” x 6.375” In the July issue of The Real Deal, the “BlackRock launches new real estate team” story 7.10.12 incorrectly stated that Sherry Rexroad would head the BlackRock Global Real Estate Securities platform. In fact, Rexroad is the chief investment ofﬁcer and the team is headed by Mark Howard-Johnson. A story in the July issue of The Real Deal, “Feldman plays matchmaker for Hamptons,” incorrectly stated that buyers and sellers pay a fee to join HamptonsBrokerMatchup.com. In fact, the service is free.

One Old Country Road Carle Place, N.Y. 11590 For Collection Matters: Please Contact James Scully, Esq. at 516-338-7520 ext.3018 For Existing Tenant Issues, Co-op & Condo Related Matters, Closings or Other Real Estate Representation Please Contact: Fred Daniels, Esq., at 516-338-7520 x 3011 or George Norelli, Esq. 718-459-6000

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88 August 2012 www.TheRealDeal.com

In the July issue of The Real Deal, the “All-star team” story incorrectly omitted Halstead Property’s Richard Orenstein from the ranking of the top 75 listing agents. In fact, he is No. 32, with $64,689,999 in listings. In the July issue of The Real Deal, the story “NYC’s new condo wave” incorrectly stated that Corcoran Sunshine had not yet been officially tapped to market condominium units at the Printing House development at 421 Hudson Street. The brokerage had, in fact, been made the official sales and marketing team for the project. In the July issue of The Real Deal, the story “Biggest U.S. residential firms” said NRT was the parent company to Sotheby’s International Realty, Coldwell Banker and Century 21. In fact, NRT owns some Sotheby’s and Coldwell Banker offices, but others are franchises. In addition, all of its Century 21 offices are franchises.

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Realogy

from page 40

been operated as a public company under CEO Richard Smith. Smith took over as chief executive of the real estate services division of the public company Cendant (then known as HFS, Inc.) in 1996, the year it acquired Coldwell Banker for $640 million. The following year, Cendant and Apollo created NRT as a joint venture to own the Coldwell Banker offices. Then in 2001, Smith led the way as the company began a buying spree. That year, NRT acquired Corcoran for an estimated $70 million, and soon after Cendant bought out Apollo. A few years later, in 2004, NRT purchased Citi Habitats for a reported $49.6 million and bought Sotheby’s, which has offices outside of New York, for $100 million. But as the company grew bigger and broader, Wall Street investors wanted to see structural changes. So in 2005 and 2006, Cendant broke itself into four separate public companies: the Avis Budget Group, Wyndham Worldwide, Travelport and Realogy. Several months later, in April 2007, Midtown-based private equity firm Apollo Global Management (through its Domus Holdings) bought Realogy and took it private for a deal worth about $9 billion, a record in the industry. Given the company’s long history as a public company, the decision to consider an IPO doesn’t come as a complete surprise. But while many in the New York brokerage community expect it to have tangible impacts on the local brands, insiders differ on exactly what kind of constraints firms here will see. One New York City brokerage owner, who asked to remain anonymous discussing another firm, said a public owner would be more aggressive in cutting costs. In fact, the executive said Citi Habitats has already started trimming to prepare for the stock sale. “They are squeezing the shit out of the companies, and it is causing some dislocation,” the source said. “They are preparing [for the IPO] to drive the bottom-line revenue.” Yet the source added that the “cost savings have not done real harm.” That source viewed Citi Habitats’ announcement last

month to close two offices on Park Avenue South as evidence that the company was already belt-tightening in anticipation of the offering. Citi Habitats declined to comment for this story, but company president Gary Malin told The Real Deal last month that the closures were part of a rebranding campaign, and added that the firm would actually be expanding in Tribeca and Soho. “At the moment, we’re over-represented in certain parts of the city and under-represented in others,” he said. Meanwhile, a top broker at Prudential Douglas Elliman, who asked to remain anonymous, speculated that Realogy might be less generous with ad budgets or perks such as car service once it goes public. “Some brokers would not be entirely comfortable [working] under a public company,” the source said. In addition, some say the strength of the New York–centered firms — which are being buoyed by the relatively stable market in the city — may actually hurt their chances of seeing money trickle down from Realogy through the IPO. Martin, the Morningstar analyst, expected Realogy would look at each market, perhaps each zip code, with an eye to where it could grow the most. He said the company would likely allocate money to those locations that were ripe for the most growth — for example, regions that were crushed in the downturn, like Arizona or California. Not everyone agreed with that assessment, however. Some say the IPO could provide resources for NRT to buy companies in the New York area at discounted prices. “[NRT] would be happy to acquire additional firms if it could get them [for the right price],” said Neil Binder, cofounder and principal with residential brokerage Bellmarc Realty. Corcoran, which brokered $12.7 billion in sales in 2011, more than any other firm (according to a survey by research company Real Trends), declined to comment.

Challenges in New York Realogy is a dominant player nationally and is a force in Manhattan, but its top franchise brands — like Coldwell Banker, Century 21 and ERA — have not been able to gain traction here.

In fact, franchisees using two of Realogy’s successful national brands flopped in recent years in Manhattan. Coldwell Banker Hunt Kennedy closed in 2009, while Century 21 NY Metro shuttered in November 2010. While both were victims of the downturn, their failures underscore that the national names could not keep them afloat. Binder and others pointed to the extremely competitive market here, which makes paying a 5 or 6 percent franchise fee a burden that is often not worth the national brand recognition. (Prudential Douglas Elliman is a Prudential franchise, but it is expected to drop its affiliation with the company when its contract expires.) Furthermore, brands like Coldwell Banker and Century 21 are often viewed as suburban brands in the Manhattan market — even though they’ve proven successful in urban markets like Chicago and Miami. “The challenge for any franchise system coming into Manhattan is that there are a couple of very well established big companies, and that makes it a challenge to get a foothold,” said Joseph Rand, the managing partner at Better Homes and Gardens Rand Realty, a Realogy franchisee based in Rockland County, N.Y. But Coldwell Banker still has a toe in Manhattan. In January 2010, Sabesan and his partners launched a franchise called Coldwell Banker Commercial Hunter Phoenix. In addition to the obstacles to its franchises, there are other challenges for Realogy as a public company. Paul Purcell, partner and cofounder at Rutenberg Realty, spoke from experience to this point. Purcell was president of Douglas Elliman, first while it was a private company, and then for three years after it went public in 1999. He said the biggest change that took place when the company went public was the way the brokers looked at management. Once Douglas Elliman went public, brokers viewed all cutbacks or changes — even changes that would have occurred when the company was private — as the “big corporation” making life more difficult for them. “Perception is reality. If [brokers] think they are being disenfranchised, if the perception is that somehow [they] are not getting something because we are a public company, if I can’t keep them happy ... they can leave,” he said. TRD

666 Fifth from page 43 make money if the investment cleared a certain profitability hurdle, sources said. Still, it played a crucial role in making the deal happen and, according to TRD’s estimates, it walked away with $25 to $50 million (insiders vary on the exact amount). Plus, it won a big feather in its cap for bringing together the partners and retail tenants. The company, owned by the Chera family, helped bring in the big money investor, Carlyle, and acted as a broker in landing megaretail tenants like Japanese fashion chain Uniqlo, which agreed in 2010 to a 89,000-square-foot lease. “Our goal was to get the value over $1 billion. We paid $525 [million] plus costs, and we achieved our billion-dollar value, which is a successful business plan executed very well,” said Haim Chera, a principal with Crown. Crown earned several million dollars in brokerage and other fees, but the bulk of its money was in the form of a “promote,” which gave it a share of the profits after Carlyle made a certain amount of money. It’s unclear what the terms of the promote were, but sources said that Crown’s percentage would have increased at a rate faster than the profit. Some sources said Crown’s interest was approximately 12 percent of Carlyle’s share, but Chera disputed that.

Lenders Retail: Estimated interest payments of $113 million Lending money on the 666 Fifth Avenue deal was a profitable pursuit for those who did it. SL Green Realty — which issued a $135 million mezzanine loan to the retail partners in 2008 — made $54 million on the deal through annual interest payments of about $20 million per year, according to sources. The mezzanine loan was paid off in March 2011 when the investors sold the larger of the two retail condos to Spanish company Inditex. Barclays, meanwhile, made an estimated $43 million on its $325 million loan, according to a TRD analysis of the amount of money borrowed and an average interest rate on a commercial investment of this scale. In addition, Morgan Stanley will net an estimated $16 million on its $300 million loan, which has not yet been paid off because the Vornado retail purchase has not closed.

Brokers Retail: Estimated $7.5 million in commissions The CBRE Group and Lansco may come out on top in relation to brokers’ fees on the building’s retail condos. The investment sales team — led by Darcy Stacom — earned

a commission estimated to be as much as $3 million as the listing broker on the pending sale to Vornado, according to sources. Meanwhile, sources say the Uniqlo lease generated a total commission of between $6 and $9 million for all of the brokers involved. Under a standard commission split, Lansco’s Roger Eulau, who represented Uniqlo, would have earned half of that. Cushman & Wakeﬁeld — whose Bradley Mendelson represented the Kushner-Carlyle-Crown partnership — would have shared the other half with Crown. In addition, Laura Pomerantz of PBS Real Estate earned a commission for representing Abercrombie & Fitch in its lease, and Savills earned a commission on the sale of the retail condo for Zara. Commission estimates were not available for either of those transactions.

Tenants through buyouts Retail: Estimated $74.9 million for lease buyouts The original tenants who occupied the retail space at 666 Fifth Avenue walked away with handsome payouts to vacate their stores. Indeed, Carlyle and Kushner paid Brooks Brothers $47.7 million and clothing store Hickey Freeman $12 million, while Zara paid the NBA Store $15.2 million. TRD

www.TheRealDeal.com August 2012 89

Israeli buyers

from page 56

gressive because so many have come before and had successes in New York, and because there are other Israelis to call upon” for partnerships. That said, construction has not yet started on some of the sites recently picked up by Israelis, such as 950 Second Avenue and 15 Renwick, and brokers say the in-

vestors may sit on those sites for a while. Israeli investors are also looking for real estate outside of the condo sector. “A lot of Israelis are looking for income-producing rental buildings and retail,” Farchi said. For example, Brack Capital, the New York arm of a

company traded on the Tel Aviv Stock Exchange, is developing a 290-room hotel at 180 Orchard Street, according to published reports. During 2008 and 2009, Israeli investors “familiarized themselves with the markets,” Schechtman said. “Now they make them.” TRD

The outcome, said Minskoff, was “very, very close,” with more than one lender vying for the deal as the final hours ticked down. “We knew it was close,” Kenny said. “We needed to make a final decision on one or two key points and [Minskoff ] needed to make a final decision on key points. We were able to make the decisions that we felt were prudent and win the deal.” The “biggest drama,” he added, “was not an individual transaction. But if you go back to that point in time, we were working simultaneously on three or four major transactions, and they were all coming to a head.” BofA’s business drive might well pay off down the road. Real Capital’s Fasulo noted that many of the banks currently playing it safe may “later come to regret it,”

especially if interest rates rise, and their money is left tied in safer-term loan deals pegged to low-risk, lowinterest loans, rather than speculative constructive deals that tend to carry far higher profit margins for the lenders. Anthony Polini, an analyst at Raymond James & Associates, downplayed the speculative risks faced by BofA. “I would literally characterize the market as hot right now,” he said. “They definitely pulled back extensively on construction lending for a while [after the 2008 financial crisis]. But I don’t think this represents Bank of America ‘jumping in’ as a speculative lender. I think it’s more that the market has bounced back and it’s actually attractive. “Its capital position is much stronger than it was,” Polini said. TRD

cent down, and you’ve got to have a credit score of around 700. It’s changed.” Fears about the economy are also playing a role. “People are just more conservative,” Keats said. “I think everyone is very uptight, and very few people have that much job security.”

sold, compared to 32 last year. And northern Westchester towns like Bedford, North Salem and Chappaqua are suffering from “low demand” in the $2 to $3 million range, Meyers said. Mufﬁn Dowdle, a top broker at Ginnel Real Estate in Bedford Hills, said she’s now seeing fewer Wall Streeters with young families moving to the area. “That guy that was going to buy that 6,500-to-7,500-square-foot new house — he is waiting to make sure he still has his job and the stock market chills out,” she said. Brokers noted, however, that homes in towns like Rye, Port Chester and Scarsdale, which are only around 30 to 45 minutes by train from Manhattan, are faring better than those in Northern Westchester. As of mid-June, Houlihan Lawrence had 84 listings in Northern Westchester, but just 11 pending sales, Meyers said. By contrast, southern Westchester had 116 listings and 52 pending sales.

Kenny from page 61 have supported a deal with 80 percent senior debt, 10 percent mezzanine and 10 percent equity. Today it is 35 to 45 percent equity. In addition, personal guarantees — in which developers commit to finish the building on budget, on time, covering cost overruns and delays — are always required, Martocci said. “The art of lending is gauging the character and financial wherewithal of the individual to actually put money in, if push comes to shove,” Martocci said. “When you have got a track record with these guys, and they have done it in the past, you can make a pretty safe bet they’re going to do it in the future.” At 51 Astor Place, Minskoff, who’s received significant loans from BofA over the last 25 years, chose to find the lead lender by putting it out to bid.

Suburbs from page 64 8,000 to 10,000 square feet” during the boom, said Alison Bernstein, head of the Suburban Jungle Realty Group, which works with buyers leaving the city for suburbs in Connecticut, Long Island, New Jersey and other areas. “People are being more conservative with what they want to buy,” she added. “They don’t want to risk everything if something happens.” Lately, in particular, those fears have been stoked by the economic crisis in Europe. “Nothing breeds caution like uncertainty,” Miller said. “I think a lot of that has to do with the uncertainty in Europe.” The Manhattan real estate market is also impacted by weakness on Wall Street, but it’s not as vulnerable as the suburbs, brokers said, in part because of New York City’s appeal to international buyers. “The international rich believe that Manhattan real estate is — and will remain — a safe investment,” said Gary Malin, president of the Manhattan brokerage Citi Habitats. To get a sense of how high-end homes are faring in various communities, The Real Deal checked in with brokers in some of the city’s most sought-after suburbs.

Long Island On Long Island, sales of homes priced between $2 and $3 million have fallen nearly 30 percent year-on-year, despite an overall uptick in the number of sales in the area, according to Miller’s data. (He noted that his data comes from the Multiple Listing Service of Long Island, which focuses mostly on Nassau and Western Suffolk counties.) Keats, who is based in Nassau County, said she’s seeing healthy activity on homes listed below $2.5 million. But houses priced higher than that, she said, “just aren’t getting the viewings, they’re sitting on the market longer, and they are taking deeper price cuts.” A major reason for that, several other brokers reiterated, is that buyers can no longer borrow as much money as they did during the boom. Before the ﬁnancial crisis, “you could put 10 percent down — you were able to buy more house,” said Shawn Elliott, the founder of Shawn Elliott Luxury Homes and Estates in Woodbury, Long Island. “Today, you’ve got to have 30 per90 August 2012 www.TheRealDeal.com

Fairfield County In Connecticut’s Fairfield County, sales climbed 9.4 percent in the first six months of 2012, according to Miller. But average prices dropped 9.3 percent to $618,185, from $681,467 at this point in 2011. And the area has seen a steep drop in homes priced over $3 million, with 31 houses trading so far this year, down 40 percent from 52 in the first half of last year. In pricey Greenwich (which is excluded from Miller’s overall Fairfield statistics because it has a separate MLS), sales over $2 million are down 30 percent this year compared to the same period in 2011, according to Mark Pruner, a Prudential Connecticut Realty broker in Greenwich. By contrast, “the under-$2 million market is up 30 percent,” said Pruner, who blogs about real estate at GreenwichStreets.com. Many Fairfield County residents commute to Wall Street, he said, so changes in compensation for financial workers have had a significant impact on the area. Instead of paying bonuses in cash, “investment banks are giving out more of their bonuses in stock options, many of which will vest over the next three years,” he said, “and the value of those are just uncertain.”

Westchester County In Westchester County, the average price of a home sold so far in 2012 is $782,077, down from $802,414 at this time last year, according to Miller. That’s despite the fact that a total of 1,611 homes have traded this year, up from 1,476 in the first six months of 2011. “We’re sitting at the highest level of pending sales since 2005,” said Houlihan Lawrence COO Chris Meyers. “This is a full-fledged recovery, and the first time we can say that since Lehman Brothers.” And yet, sales of luxury homes have lagged behind. So far this year, 29 Westchester homes priced over $3 million have

Bergen County The $2 to $3 million market in New Jersey’s Bergen County is still struggling, though it seems to be faring a bit better than last year. So far in 2012, 29 homes in the $2 to $3 million range have sold, according to Dr. Ruth Miron-Schleider, owner and broker of Miron Properties in Bergen County. In the first half of last year, 24 properties in that price bracket were sold. Still, that’s far below the 39 that sold in the first six months of 2008. Buyers who, in the past, would have looked at homes priced between $2 and $3 million “are now generally looking for mid-$1 million houses,” Miron-Schleider said. In particular, Bergen County buyers are now very focused on how much they’ll be paying in maintenance charges and taxes, she said. Bergen has historically had one of the highest property tax rates in the country; last year, the average resident there paid around 8 percent of their annual income on property taxes — twice the national average. Miron-Schleider said she also sees clients running into problems getting mortgages. “The biggest stumbling block is the financing,” she said. TRD

JDS from page 58 Walker Tower

Starwood Capital Group $40 million for a majority interest in a development site. In conjunction with Starwood, which retained a stake in the property, JDS broke ground on a 50-story condo and retail tower last month. Completion is slated for 2014. Meanwhile, JDS is planning two other developments in Soho and on the Far West Side, but Stern said he couldn’t yet disclose details about them. JDS also has a number of projects in the outer boroughs. The company is ﬁnishing up construction of a 51-unit rental building at 202 Eighth Street in Park Slope, a site it bought for $5.8 million in early 2008. Leasing of the one-, two- and three-bedroom apartments, where asking rents will be $53 to $54 per square foot, is set to start in October. In addition, JDS and PMG are planning a 50-unit rental building at 50 North First Street in Williamsburg. Brooklyn developer Israel Gold had previously owned the property, where a construction mishap in 2009 caused a roof to collapse. Last year, JDS paid $8.75 million for the defaulted note on the property and another $1 million to take control of the deed. Construction is slated to be completed by the end of the year, with the units set to come online in January 2013. As if that weren’t enough, JDS is also ramping up its activities in Florida. With PMG, JDS recently launched a seven-residence development in Bal Harbour called 95th on the Ocean. The company also has plans for projects in nearby Aventura and Hollywood, Fla. Getting all these projects in the ground has kept Stern busy. “I don’t sleep very much,” said Stern, whose youth makes him a rarity in the world of New York City development. “If you look at the developers who have the most notoriety in town, they tend to have been in the market for a longer period of time than Michael,” Knakal noted.

A builder’s builder Still, it’s been a long road for Stern, who does not have a college degree and said his parents are “very much the opposite of wealthy.” He grew up in the village of Hewlett

Harbor on the south shore of Long Island. His father owned an auto body shop and his mother was a nursing executive. “Being a kid on Long Island, I just fell in love with the New York City skyline,” Stern recalled. “Heading into the city, I’d see the buildings rising in the distance, getting bigger as I got closer. I thought that if I could one day have an impact on that skyline, actually contribute to it, then I could look back and say I had a pretty good run.” He started out in real estate in Miami, volunteering his services as an assistant project manager with a residential development firm. Eventually, he was hired as a project manager. After only two years, he formed JDS and began building singlefamily homes and, later, multifamily projects in and around Miami. Those who work with Stern say he is unusually intense and focused. “He’s like a freight train: He just does, does, does,” said Kemper Hyers, the head of design at Starwood Capital Group, who worked closely with Stern on the interiors of Walker Tower. “Getting midnight e-mails from Michael is part of the experience,” Cetra added. In 2004, Stern turned his focus to New York, building low-rise apartment buildings in the boroughs. With funding from bank loans and institutional partners, Stern said, the firm grew quickly, and has since developed several hundred units in Brooklyn and Queens, mostly two-family houses in Rockaway and East New York, though he also bought and sold a few office properties in the Financial District. “It was very profitable at that time, before the market fell out,” said Stern. “The lending spigots were definitely open. Back then, I was a little too naïve to realize it was risky.” Still, by the end of 2007, Stern was concerned about high prices for New York properties, and the company had slowed down its activities. “Prices were too frothy for us,” he said. “We kind of bowed out of the market.” Instead of acquiring new properties, JDS focused on completing construction on projects it had already begun and sold off some of its land in Brooklyn.

Walker Tower was one of the first buildings JDS purchased after this hiatus. And it wasn’t easy: After going into contract on the building, Stern lost his financial partner (a large institution he declined to name), and was still looking for an investor four days before the deal was set to close. That’s where PMG came in. Now a national firm, PMG was founded in New York City in the 1990s by Kevin Maloney, along with Barnett and Ziel Feldman, who went on to form HFZ Capital Group. Maloney recalled the first time he’d ever heard of Stern. “A friend of mine called me and said, ‘There’s a guy who has a contract on [the Verizon building]. I know you’ve never met him, but his financial partner fell out of bed and he’s looking for a new one. We’re recommending you guys at PMG.’ ” In fact, PMG had already looked at the building, but decided against buying it after concluding that the square footage was smaller than advertised. But Stern, who had remeasured the space himself, convinced them otherwise. It was a risk to partner with a relative unknown, acknowledged PMG executive director Elliott Joseph. But, he said, “We were willing to take a chance, because we liked the property and we liked him.” Their bet seems to have paid off, with some help along the way from Starwood, which recapitalized Walker Tower in 2010, providing an equity injection. (Stern said Starwood “open[ed] up better financing

options at a time when construction lenders were not very active.”) Walker Tower is “one of the best new conversions I’ve ever seen,” said Robby Browne, a residential broker at the Corcoran Group who has shown units in the building to clients, but has no affiliation with Stern. Stern’s background as a builder has been evident at Walker Tower, associates said. Indeed, Stern insisted on moving every staircase and every elevator in the building, and punching new windows to bring more light in. This hands-on approach helped him wring the most possible value out of the building, Knakal said. “The things that he did to make that development successful are things that a lot of other people didn’t see,” Knakal said. “Remeasuring the space, figuring out ways to create additional FAR — he did a brilliant job of maximizing every square inch.” Of course, the project has also benefitted from the current lack of high-end condo inventory downtown, brokers said. JDS also has something of a unique approach among development firms in that it has an in-house construction division. That helps reduce tension between the construction manager, design team and owner, Cetra said. “There’s always a certain level of adversity between the three,” he said. “With that eliminated, the team feels much more cohesive. Everybody’s on the same page.” TRD

Laurence Rosenberg Director of New Business 317 Madison Avenue NY, NY 10017 lrosenberg@lincolnlandservices.com 212.759.3636 www.LincolnLandServices.com

www.TheRealDeal.com August 2012 91

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they’re just spending two seconds on your site, that’s a problem,” Cahill said.

Capturing leads Perhaps the most pressing concern for real estate brokerages — at least, those using their websites as a tool to generate business — is how many leads they capture online, sources said. Often, brokerage websites will have a “call to action,” a prompt for users to provide their contact information, in order to save properties or receive additional information, Larson said. The most involved example of this is the virtual office website, or VOW, a program set up by the Real Estate Board of New York in 2009 that lets users browse listings from many firms through one company’s website, provided they have formally registered with a broker or a firm and agreed to certain terms. However, convincing users to sign up is still an uphill battle for any website, and it’s an even more complicated process for real estate brokerages. Since brokers are independent contractors, any leads they generate are proprietary. Firms can track consumers, who register directly with the firm, but they cannot force brokers to hand over leads that may come through the website but go directly to individual agents, said Andrew Heiberger, the founder of Town Residential. And those numbers are already tiny. Jeffrey Schleider, founder of Manhattan brokerage Miron Properties, estimated that if 2 to 3 percent of visitors — out of an estimated 25,000 to 30,000 per month — fill out a registration form, the site is doing “phenomenally well.” If Keller Williams NYC can convince between 5 and 10 percent of unique visitors to register with the firm, Jochinke said, that is a success. With the new website, the overall traffic is expected to jump, but the rate at which visitors register will likely stay the same, he said. Even more difficult is tracking whether a website lead turns into a sale, RealDirect’s Perlson said. “It’s not quite as simple as selling iPad covers on Amazon, where we see the sale typically within minutes of acquiring the traffic,” he said. And not all websites focus on capturing leads. For example, Stribling allows users to register to get market report mailings and to save properties, but the firm does not have a goal for what percentage of users hand over their contact information, Kivlan said. A good website, according to Larson, should let users access the bulk of the information for free, but have enough premium content — such as saving searches or putting properties in “shopping carts” — to make visitors give up their e-mail addresses. “You provide information of utility to the general public without requiring them to be your customer,” Schleider said, “and a certain percentage will come back to work with you.” TRD

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from page 33

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Sotheby’s said it has seen more customer interest — and transactions — in Sag Harbor, leading the firm to turn its satellite location in the village into a full-fledged office. About five dedicated brokers who used to work from other locations will soon start working there full-time, said Debra Reece, manager of the firm’s Bridgehampton office. In other coveted areas — particularly south of Highway 27 in Sagaponack, Southampton, Wainscott and Bridgehampton — prices are up due to a lack of supply, a significant change from last year, Saunders said. If there is a more challenging corner of the market, it’s likely rentals, brokers said, since inventory has spiked as more homeowners list their properties for rent and for sale at the same time to hedge their bets. “Even new construction today is often staged with a dual purpose of having the new house show better to prospective buyers, and having it in furnished condition so that it can be rented prior to sale,” Comnas said. Continuing a trend from last year, realistic pricing is still the lynchpin of securing a speedy sale, brokers said. “You might think, ‘Well, that’s pretty obvious,’ but it was not really like that in 2005, 2006,” said Saunders, when desirable properties south of the highway sold above their asking prices. The story is somewhat different on the less-pricey North Fork and on Shelter Island. Sales at the high end of those markets — typically, properties above $1.5 million — have slowed down somewhat from this time last year, said Tom Scalia, the owner of Century 21 Albertson. Meanwhile, sales of properties at the low end — those priced between $400,000 and $500,000 — have picked up, he said. Scalia, who took over the family business from his father in 2010, theorized that buyers were reining in their purchases. “They’re settling for a walk to the beach instead of [a house] on the beach,” he said. TRD www.TheRealDeal.com March 2012 00

Residential market

from page 14

that renters are signing leases for smaller apartments at a blistering pace. Adina Azarian, founder of rental firm Adina Equities and a Keller Williams NYC broker, said that in the last month she has seen an “unprecedented amount of applications” for rentals, particularly for apartments priced under $2,500 per month. Higher-end rental listings — those asking around $10,000 per month — stayed on the market longer, she said. “With all the media attention on the hot rental market right now, some of those landlords may have unrealistic expectations of exactly how high of a rent they actually can get,” she said. Still, the perennial summertime spike in demand, combined with a shortage of newconstruction rentals, is creating an ultracompetitive market where landlords have their pick of tenants, brokers said. “There is new rental product coming into the marketplace all the time,” said Adrienne Albert, CEO of the Marketing Directors, which is currently marketing the Crescent Club, a 130-unit Long Island City rental tower. But, she said, it’s “not at a level that would significantly influence pricing.” Andrew Barrocas, CEO of brokerage MNS, said the lack of available inventory has been “hands down” the most difficult part of arranging rental transactions in the past month. He described his cousin’s search for a $4,000 two-bedroom in upper Chelsea: “The search took much longer than expected.” Looking ahead, those rents show no signs of falling, brokers said. “The inventory is tight,” said Jeffrey Schleider, founder of brokerage Miron Properties. “And with a fresh batch of recent graduates, we expect rents to stay at current levels at least through mid-September.” TRD

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Commercial market from page 22 square feet of sublease space at 666 Fifth Avenue on the market with a team that includes Neil Goldmacher, a vice chairman at Newmark Grubb Knight Frank. Citigroup has less than two years remaining on its lease. “This is part of our ongoing efforts to consolidate our real estate footprint in New York City in order to achieve greater operating efﬁciencies,” Mark Costiglio, a spokesperson for Citigroup, said in a statement. Sources said Citigroup is shifting staff to 399 Park Avenue and 601 Lexington Avenue, but Costiglio declined to comment on that.

Midtown South In another sign of its strength, Midtown South saw the steepest decline in availability among Manhattan’s three markets. The already tight market, which has outperformed its neighbors for the last year, saw its availability rate drop by .4 points last month to 8.2 percent. That’s down from 9.5 percent in August 2011, figures from Cassidy Turley showed. The average asking rent for the area rose by $0.51 per foot in July to $46.42. Among the space that was listed in the tech-firm-friendly market last month was the 9,000-square-foot-plus second floor of 26 West 17th Street, which CBRE Group brokers Sacha Zarba and Jared Isaacson represent. It’s unclear which tenant is looking to sublease the space, but the lease has just over a year left. A short time frame like that sometimes deters tenants, but the marketing material says the landlord would also do a long-term direct deal. However, Michael Moorin, senior managing director at Newmark, noted that some prospective tech tenants want the flexibility of a short-term lease because the tech industry is in regular flux. “There are short-term — one-to-two year — subleases that, if decently built, have value for tech tenants,” he said.

Downtown The rapidly expanding title company, TitleVest, signed a renewal-and-expansion lease last month in Lower Manhattan at 44 Wall Street, company president and CEO Bill Baron said. The company renewed about 17,000 square feet and added about 8,758 square feet on the ninth floor. The title insurance firm is also looking to take another 8,000 to 9,000 square feet to accommodate its growth, Baron said. Over the past year the company grew from 89 full-time staffers to 184, he said. The Downtown market is Manhattan’s most affordable, with average asking rents of $38.50 per foot in July, up $0.22, Cassidy Turley figures showed. At the same time, the availability rate was down by 0.2 points to 10.4 percent. TitleVest, which was represented by Studley’s Marc Shapses, looked around before inking the new deals, Baron said. “We looked at other buildings both Downtown and Uptown in Midtown, and we found Downtown still offered a better value as compared to similar quality space in the Midtown market,” Baron said. TRD 88 August 2012 www.TheRealDeal.com

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Health insurance

from page 16

will be exceptions to the mandate for individuals who demonstrate that they can’t find coverage that costs less than 8 percent of their income. In other words, they won’t face a penalty if they don’t buy insurance. Agents who do buy insurance and earn less than other thresholds can qualify for subsidies through state-operated insurance “exchanges” — mandated by the new law — that are still being set up. The details of the plans and subsidies, though, are unclear. But the good news, Salkin said, is that the subsidies available to individuals or families who participate in the exchanges will be fairly broad. Credits will be available at decreasing levels as income increases to people making up to 400 percent of the federal poverty level, she said. That could mean individuals with incomes up to $43,000 a year, or families of four earning up to $88,000 a year, could be able to buy subsidized insurance.

Risky business One thing that will remain difficult for real estate professionals, Salkin said, is forming groups to get insurance at a discounted rate. The problem, she said, is connected to the demographics among brokers. For example, insurance companies have been reluctant to write group plans for NAR, whose members are, on average, 56 years old, and predominantly female. Given the relatively high number of insurance claims among that demographic, she said, “the actuarial analysis doesn’t work.” Moreover, independent contractors aren’t considered by the insurance industry to be a good risk. That is, the companies believe people with health problems are more likely to buy insurance, and healthy people are more likely to forego coverage. Consequently, said Katherine Sayer, a health and life insurance broker who has clients in real estate, “the rates are very high for individuals, and I don’t know how that will change.” In theory, the creation of exchanges — as well as the new requirement for more people to get insurance — will lower these high rates. But it’s not yet clear how that will play out, experts said. And until the exchanges are created, Sayer said, individuals are left to fend for themselves. “There is coverage available — that’s the good news,” Sayer said. “The bad news is it’s expensive and it doesn’t cover as much.” Whatever happens with the new law, most agents will still not get insurance through their firms. Because brokers are independent contractors, firms that want to provide some form of coverage — or at least make it available — face complex rules and costs. “It’s an expense that no one will want to tackle or take on,” said Kathy Braddock, a cofounder of Rutenberg Realty. “[With] the margins for these firms, it’s just not possible.” Madlin explained that, due to the independent-contractor business model, she “can’t afford” to provide coverage for her agents. “They’d have to change the commission split or something, and nobody wants that.” Madlin said her agents will remain on their own after the new law kicks in, though she added that she hopes the new law will create more affordable options. Some firms do make attempts to help their brokers with health insurance. Town Residential offers its agents a $150 monthly reimbursement toward health insurance or gym benefits. And Bellmarc Realty administers insurance plans that agents can buy into at a group rate, though it doesn’t contribute to employees’ premiums. Neil Binder, Bellmarc’s president, said he doubts that more companies will administer group plans. “It’s too hard, it’s very involved,” said Binder, who is also a licensed insurance broker and accountant. “I had a unique skill set,” he added, “that other people who are real estate brokers may not have.” DSA Realty, a Manhattan-based residential and commercial brokerage founded in 2007, takes another approach. In addition to providing health insurance for its full-time staff, like most firms, DSA allows its 40 agents to buy into its group health plan, explained company president Jesse Rhinier. Agents who hit certain sales benchmarks are reimbursed either 35 or 70 percent of the cost of coverage, he said. Agents who don’t participate in the insurance, meanwhile, are eligible for cash bonuses or higher commission splits. Rhinier said the payments are a motivator that he hopes will keep agents at the company. Still, he said, he has agents who choose to forego coverage. Even if they hit the highest benchmarks, he noted, agents still must pay 30 percent of their insurance costs out-of-pocket, which can add up to around $1,500 a year. “Some people just aren’t willing to do that,” Rhinier said. He added that “a lot of agents, as scary as it sounds, would rather be paid more than have some of their money go to insurance.” TRD 94 August 2012 www.TheRealDeal.com

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AUGU S T

St. Francis Food Pantries and Shelters presents its annual Women of Valor Awards Tea, honoring women in real estate, fashion and finance for their philanthropic contributions. Event cochairs are Faith Hope Consolo, chairman of the Retail Group at Prudential Douglas Elliman, and Jeffrey Mann, publisher of Mann Publications. Television host Joan Lunden will be the keynote speaker. The Waldorf Astoria, 301 Park Avenue. 11:30 a.m. to 2 p.m. Fee: $350. Contact: Joseph Sano, (212) 279-6171.

C A L ENDA R 2 3 4 5 6

The Real Deal presents its second-annual Hamptons Golf Tournament. Join us for a full day of golf, networking, food and cocktails. Hamptons Hill Country Club, Westhampton Beach, N.Y. 11 a.m. to 5:30 p.m. Contact: Ross Fox, rf@therealdeal.com or (212) 254-7400.

7 8 9

7,14

The Council of New York Cooperatives & Condominiums hosts a seminar entitled “Introduction to Co-op Board Responsibilities: An Intensive Seminar for New Directors.” Instructors include attorney Mark Luxemburg and property manager Gregory Carlson, who will discuss all aspects of operating a co-op building. Location to be announced. 6 to 9:30 p.m. Fee: $125 for members of CNYC, ARV or FNYHC; $200 for nonmembers. Limited to co-op board members. Contact: (212) 496-7400 or workshops@cnyc.coop.

The Historic Districts Council presents Secret Lives Tour: Grand Central Terminal. Dan Brucker, media relations officer for the MTA Metro-North Railroad, leads a tour of the hidden twists and turns of Grand Central Terminal, including the Great Hall, Vanderbilt Hall, and rarely accessed spaces such as the operations control center and a special train platform used by President Franklin D. Roosevelt. Grand Central Terminal, 87 East 42nd Street. 10 a.m. Fee: $75 for members, $100 for nonmembers. Information and registration: www.hdc.org.

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21–22

The Real Estate Board of New York hosts a twoday “Certified Negotiation Expert” course. Instructor Marie Spodek will cover topics such as competitive hard bargaining and collaborative negotiating. 570 Lexington Avenue. 9 a.m. to 5:30 p.m. Fee: $124.50 for members for one day or $249 for both days, $149.50 for nonmembers for one day or $299 for both days. Information and registration: www.rebny.com.

21 22 23 24 25

Openhousenewyork presents the Other Islands Boat Tour. Sail up the East River on the Zephyr with journalists Sharon Seitz and Stuart Miller, coauthors of “The Other Islands of New York City: A History and Guide.” There are 42 islands within the boundaries of the city; hear about the ones that are famous (like Randall’s), infamous (like Rikers) and forgotten (like North Brother). South Street Seaport, Pier 16. 6:30 p.m. Fee: $36 in advance, $40 at the door. Information and registration: www.ohnyotherislandstour.eventbrite.com.

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96 August 2012 www.TheRealDeal.com

3,23

The American Institute of Architects hosts a guided tour of the gallery exhibitions “New Practices New York 2012” and “The Harlem Edge: Cultivating Connections.” New Practices New York, a biennial competition, recognizes new and innovative architecture and design firms. This year’s winners include Holler Architecture and Abruzzo Bodziak Architects. “Cultivating Connections” displays the four winning proposals for the redevelopment of the 135th Street marine transfer station. The Center for Architecture, 536 LaGuardia Place. Aug. 3 noon to 1 p.m., Aug. 23 6 to 7:30 p.m. Fee: $10. Information and registration: www.cfa.aiany.org.

The Brooklyn Historical Society hosts its quarterly luncheon series, “The Brooklyn Real Estate Roundtable.” Panelists include Manhattan borough president Scott Stringer; Regina Myer, president of Brooklyn Bridge Park; David Bistricer, a principal at Clipper Equities; and architect Alex Barrett of Barrett Design and Development. Brooklyn Historical Society, 128 Pierrepont Street, Brooklyn. Noon. Fee: $300. Information and registration: www.brooklynhistory.org.

The American Institute of Architects hosts a walking tour entitled the NYU Superblocks & Soho: Modernist Urban Renewal and More Recent Urban Inventions. The tour examines the architecture of the Robert Moses–era superblocks south of Washington Square, the proposed sites of the NYU 2013 campus expansion plan and new construction projects in Soho. The Center for Architecture, 536 LaGuardia Place. 10:30 a.m. to noon. Fee: $10 for members, $20 for nonmembers. Information and registration: www.cfa.aiany.org.

18–23

GLM Shows presents the N.Y. International Gift Fair. Drawing 35,000 attendees from 80 countries, the NYIGF is open to the trade only. The fair hosts 2,800 exhibiting companies showcasing lines across the home, lifestyle and gift spectrum. Jacob Javitz Convention Center, 655 West 34th Street, Piers 92 and 94. 9 a.m. to 6 p.m. Fee: Free for qualified members of the trade before Aug. 14, $60 on-site for qualified first-time attending buyers, $175 for suppliers to the trade. Information and registration: www.nyigf.com.

Professional Women in Construction presents “Meet the Architects & Engineers,” a networking event with exhibit tables. Attendees include Heidi Blau, partner at FXFOWLE; Anthony Baker, principle at ACB Architects; Scott Ceasar, senior vice president of Cosentini Associates; Beth Greenberg, principle at Richard Dattner & Associates; Brian Spence, cofounder and principle of BAM Architecture Studio; and Frank Pampalone, director of project design and management at Walmart Realty. Club 101, 101 Park Avenue. 5:30 to 8 p.m. Fee: $80 for PWC members, $95 for nonmembers, $100 dollars at the door. Information and registration: www.pwcusa.org.

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Across 1

4 10 11 13 14 15 17

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Broker who was No. 1 in TRD’s 2012 ranking of Manhattan’s top listing agents, John _____ Public housing Gehry and Calatrava Section of a large building Publicly traded, California-based residential builder, ___ Homes James ____, the CEO of ERG Property Advisors A marketing and leasing consultant who founded her own firm, ____ Packes Where Trump is planning a $24 million “Trump on the Ocean” restaurant and catering hall (2 words) Compass point Adjustable mortgage Type of listing

26 Hamptons’ insect barrier (2 words) 29 Part owner of Woolworth Building who’s planning a 25-story Lower East Side hotel and condo, Ruby _____ 30 The payout a shareholder gets from a REIT 31 A home listed with an intentionally high price to help sell lower-priced homes nearby is a “___ up” property 32 Moving mid-tier finance workers from NYC to cheaper office space around the country 34 Monthly ____ 36 “The Book of Mormon” star with an apartment at the Rushmore, Josh ____ 37 Alongside 38 What a NYC homebuyer now does before purchasing (2 words)

Down Corcoran’s Noble ____, No. 7 on TRD’s ranking of listing agents 2 Songwriter Denise ____, whose penthouse at 785 Fifth Avenue has been listed for $65 million 3 Imposing structures 5 Common at NYC construction sites: ___ infestation 6 Warner Music CEO Edgar Bronfman ___, who sold the Muppet Mansion for $23 million last year 7 Corcoran’s Carrie ____, No. 2 in TRD’s annual Manhattan agent listings 8 __ Harbor in the Hamptons 9 A deal to continue occupying a space after selling it 12 Charming, like a vacation cottage perhaps 16 A cul-de-sac in East Hampton, ___ Street 18 Expense of maintaining property 1

19 20 22 24 27

28 30 31

33 34 35

___ on the side of caution Gym, doorman, golf simulator HUD subject Founded by Shaun Osher and Jack Cayre Name of Moscow location and a Houston Street apartment building, ____ Square Shows off Multifamily agent at Marcus & Millichap, Peter Von __ Ahe The hot retail market in this neighborhood is starting to spill over to Canal Street What you do at Shake Shack Manhattan school Late billionaire ___ Forstmann’s Upper East Side penthouse sold for $40 million Town Residential broker ___ Poulsen

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Arabella 101 101 Avenue D

130 West 12th Street The 42-unit condo conversion, developed by the Rudin family, is now sold out after eight months of sales, and closings are underway. The building’s one- to four-bedroom units range from 869 to 3,875 square feet, with prices starting at $1.42 million. Building amenities include a rooftop terrace, ﬁtness center and a full-time concierge. Stribling Marketing Associates is the agent. Contact: www.130west12.com.

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Greenwich Village

Lower East Side Madison Jackson 371 Madison Street Sales have started at the 110-unit, sixstory condominium, developed by Thomas Sung. The building’s one- and twobedroom apartments range in size from 700 to 1,600 square feet. Prices start at $500,000. Building amenities include a health club, 24-hour doorman, landscaped garden and event space. Prudential Douglas Elliman is the agent. Contact: www.madisonjackson.com.

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The second phase of leasing has started at the 307-unit rental building, where 215 units were rented in the ﬁrst phase. The available units have two bedrooms and range in size from 1,385 to 1,460 square feet. Rents start at $5,900. Building amenities include a game room, ﬁtness center, golf simulator and yoga studio. LCOR is the developer. Contact: www.25broadnyc.com.

Long Island City 4540 Center Boulevard

Reade57 57 Reade Street The 84-unit condominium is now 55 percent sold. Developed by the John Buck Company, Reade57 contains one-, two- and threebedroom homes ranging from 713 to 1,863 square feet, priced from $1.06 million to over $3 million. Building amenities include a ﬁtness center, residents’ lounge and 24-hour doorman. Brown Harris Stevens Select is the agent. Contact: www.reade57.com.

Upper East Side

The 32-story rental building, developed by TF Cornerstone, is now 58 percent leased. The building has 345 units, including studios and one- and two-bedroom homes. Rentals start at $2,100 for studios, $2,615 for one-bedrooms and $3,080 for twobedrooms. Building amenities include a landscaped roof terrace and outdoor recreation space. Contact:www.eastcoastlic .com. 100 August 2012 www.TheRealDeal.com

515 East 72 515 East 72nd Street The 330-unit condominium is now 66 percent sold. Units in the 41-story building range from studios to four bedrooms, with a full-ﬂoor penthouse. Prices range from $699,000 to $12.33 million. The available residences range in size from 573 to 5,390 square feet. Building amenities include a private park, pool, ﬁtness center and spa. The sponsor is River Terrace Apartments LLC. Corcoran Sunshine Marketing Group is the agent. Contact: www.515e72.com. Compiled by Russell Steinberg

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One-bedroom, one-bath, 750 sf co-op unit; apartment has walk-in closet, home ofﬁce; building has live-in super; maintenance $1,301 per month; asking price $299,000; 13 weeks on the market. (Brokers: Victoria Hagman, Realty Collective; Myrel Glick, Prudential Douglas Elliman) “It had been on the market for a while, at a price that was too high. I got the listing in late November, which is a hard time [to sell], but we aggressively showed it until we got a buyer. The building was built as a commercial insurance building and converted to apartments, so it has higher ceilings and larger windows than traditional residential construction. But the unit had been rented, and needed a little TLC. I think the buyers were excited to get something in that neighborhood at that price point. It was parents buying for their daughter, actually. Financing was not a concern because we did a ﬁnancing contingency where they would have to buy it all cash if they didn’t get a loan. They had that ability.” Victoria Hagman, Realty Collective

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One-bedroom, one-bath unit in a prewar co-op; building has doorman, roof deck; apartment has Empire State Building views, granite countertops; maintenance $1,187 per month; asking price $449,000; 20 weeks on the market. (Broker: Javier Lattanzio, Time Equities) “I had an open house in the building, and as I was walking downstairs, this lovely couple saw the brochure for this unit,

and said, ‘Oh, that’s the same ﬂoor that we live on.’ They live right next door in a studio [and wanted to upgrade to a one-bedroom]. I gave them the keys so they could check out the apartment, since I was leaving. Although I never give my clients’ keys to anyone, I really had the feeling this would be good. They liked the apartment because of the views. It had also been renovated, which their other apartment had not been. So I end up making the deal, and also, they gave me their apartment to sell. They didn’t have any co-op board approval trouble because the one-bedroom was a sponsor sale. Now we are waiting for a board approval on the studio, and they are getting married in October, so it’s been a nice story to be involved with. The whole affair was a good reminder that you never know when the customer is going to show up.” Javier Lattanzio, Time Equities

Williamsburg $419,000 134-136 Powers Street, Apt. 2D

One-bedroom, one-bath, 713 sf condo unit in a new development, the Aria; building has roof deck, ﬁngerprint entry system; apartment has sleeping loft, sauna, hardwood ﬂoors, washer/ dryer; common charges $234 per month, taxes $396 per month; asking price $415,000; 27 weeks on the market. (Brokers: David Kazemi, Bond New York; David Berk, Pro Realty Team) “I originally had listed this apartment in April of 2011. There were a couple price decreases, and then I pulled it in December, and relisted in January. It went into contract in April for above asking price, actually, which is funny given how long it had been on the market. [The seller] has a sauna in her living room, and it takes up a lot of space. That was a deal-breaker for a lot of people. And the [hallway] to the loft has a clearance of 6’2’’, so, well, anyone who is tall wouldn’t have wanted to live there. I got to the point where I was asking people, ‘How tall are you?’ before they came to see it. As soon as we had one offer, we actually got two more. But then it took forever to close. The seller didn’t want to close because she hadn’t found another place to live. The lawyers were going back and forth for weeks and eventually her lawyer basically said, ‘You should really close.’ ” David Kazemi, Bond New York

Interviews by Guelda Voien

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COMINGS & GOINGS Fast-growing StreetEasy gets a new home on Crosby Street

ith a rapidly growing staff, New York real estate listings aggregator StreetEasy is moving this month to a bigger office. StreetEasy hired Christoff:Finio Architecture to design the new 7,500-square-foot space, which is located at 13 Crosby Street. The company is in the process of relocating there from its current 2,000-squarefoot office at 895 Broadway, where it’s been since its founding in 2006. The bigger space was much-needed, according to StreetEasy CEO Michael Smith, who said the site has seen year-over-year traffic growth of more than 40 percent, and now gets 20 to 25 million page views per month. Some 10,000 real estate agents now use StreetEasy on a regular basis, he said. As a result, StreetEasy has nearly doubled its staff over the last few months, growing from 13 to 23 employees. And Smith said he plans to hire at least a dozen more by the end of the year. With help from broker Janet Liff of J. Liff & Co., StreetEasy negotiated the lease almost a year ago, then waited for an existing tenant to vacate the space. Smith A rendering of StreetEasy’s new office at 13 Crosby Street, said the company is paying a rent “in the mid-40s.” with a custom bike rack. Christoff:Finio then tailored the new space to the company’s needs. One particularly notable feature is a custom-made bike rack to accommodate the 14 StreetEasy employees who bike to work each day. There is also a much bigger kitchen, which will allow the entire staff to eat lunch together — something that StreetEasy employees try to do at least a couple of days per week. “We always prefer a meal to a meeting,” Smith said. By Russell Steinberg

BROKER EXCHANGE Residential Leslie J. Garﬁeld & Co. Francis O’Shea has rejoined the ﬁrm after a stint at Wind Analyt-

ics, a Brooklyn-based start-up that develops software for windpower sites. MNS Virginia Incalcaterra and Robert Earl joined the ﬁrm as associate bro-

kers. Both were previously at Town Residential. Prudential Douglas Elliman Trish Goff, formerly a fashion model, joined as an agent in the Wa-

verly Place ofﬁce. Town & Country Real Estate Loretta Cahill joined the Westhampton Beach ofﬁce as a broker.

Warburg Realty Kate Meckler returned to the ﬁrm as senior managing director from

Sotheby’s International Realty, where she was also senior managing director. Cate Cahill, Marc Donnenfeld, Jamie Fedorko and Brit Holten also joined the ﬁrm as agents.

Commercial Duval & Stachenfeld Stephen Land joined the ﬁrm as head of the new tax practice group

Neighbors to the north nab one of NYC’s largest engineering ﬁrms

ne of New York City’s largest engineering firms, WSP Flack + Kurtz, is the latest New York City real estate player to be impacted by the influx of foreign buyers. In a deal set to close this month, the Canadian engineering consultancy Genivar is slated acquire the firm’s parent company, WSP. Founded in New York in 1969, Flack + Kurtz became part of the global WSP Group in 2001 and currently has around 300 employees here. The firm’s current New York City projects include the Barclays Center arena at Atlantic Yards and the renovation of the Javits Convention Center. Genivar made a $442 million all-cash bid for WSP in June, in a deal that is technically an acquisition, “but it is viewed a merger,” explained WSP WSP Flack + Kurtz president David Cooper Flack + Kurtz president David Cooper, who is based in Manhattan. “It’s a complimentary merger — Genivar has really no presence in the New York City area, so we only see opportunity to create better synergies and bring some of [Genivar’s] expertise” here, Cooper said. The merger will not cause the firm’s New York City office to make any personnel changes, he added. By Guelda Voien

Havens tapped to lead Aptsandlofts.com’s new commercial division

ptsandlofts.com, the Williamsburg-based sales and rental brokerage, last month tapped industry veteran Chris Havens to head its new commercial division. Havens is the founder of Creative Real Estate Group, a brokerage representing commercial landlords and tenants. He will now head a team of five commercial brokers at Aptsandlofts.com. His colleague, Francis DeCarlo, will also be joining David Maundrell’s firm. “I needed a bigger platform,” Havens told The Real Deal last month. “I’d been focusing on Downtown Brooklyn and Dumbo, so this helps me expand my territory into northern Brooklyn.” In his new role, Havens will be responsible for overseeing operations in the commercial division, developing the brokerage’s retail presence and expanding its reach within the Brooklyn office market. Havens added that Aptsandlofts.com will now be able to find tenants for the retail spaces in residential buildings it is marketing, so building owners won’t Chris Havens have to hire a separate commercial brokerage. “Most owners like one-stop shopping,” he said. Havens will be working out of the firm’s new office at 236 Court Street in Cobble Hill once it opens later this summer. By Katherine Clarke 104 August 2012 www.TheRealDeal.com

and a partner in the New York ofﬁce. He was the former head of the U.S. tax practice for Linklaters. Lee & Associates NYC Jonathan Miller, Sidney Rosenthal and Alan Weisman joined the ﬁrm as ex-

ecutive managing directors. All were previously with Grubb & Ellis. The Lightstone Group Christian Gabrielsen joined as president of the securities division

from Thompson National Properties, where he served as executive vice president. Also hired from Thompson National Properties were Greg McGowan as vice president of eastern sales; Josh Rubinger as vice president of national accounts; John Coon as regional vice president of southwest sales; Kimberly Barry Duran as director of marketing; Brendan McLaughlin as senior vice president of central sales; and Matt Peoples as vice president of national accounts. Rose Associates Edward Donnelly joined the ﬁrm as director of commercial and

technical services. He was previously a principal at Blumenfeld Development Group. Wentworth Property Management Cyndy Pirrera has joined the company as vice president of high-rise

operations, focusing on New Jersey high-rise clients. She was previously president of the Community Associations Institute, New Jersey Chapter. Compiled by Andrea Cetra

Follow The Real Deal on Twitter: twitter.com /trdny

Whatever ﬂoats your boat TRD kayaks with the Young Men’s/Women’s Real Estate Association of New York

say Ornstein, a principal at Transwestern. In addition to being a good networking opportunity, he said, the trip offers industry pros an opportunity to see New York City real

From left: Alexander Hill of Winick Realty and JPMorgan’s Scott Dauer (photo by David Brause)

estate from a new vantage point. The tradition began when the Long Island City Business Improvement District approached Brause, asking him how to connect with the business community. “YM/WREA was looking for new ways to look at real estate, and from a kay-

Lights, camera, real estate Developers and brokers take promotional videos to a new level

Tiana Von Johnson on the set of her promotional video

ast month, a North Carolina broker posted an elaborately choreographed version of “Call Me Maybe” on YouTube. Not to be outdone, New York real estate pros are also investing time and money in increasingly elaborate promotional videos. Developer Matthew Blesso, for example, last month released a video advertising his penthouse at 684 Broadway, which is on the market for $8.95 million. Set to cello music, the video shows yogis in various poses throughout

the home, and features interviews with architect Joel Sanders and Brooklyn Botanic Garden curator Caleb Leech. According to the blog Curbed, the video cost some $50,000 to make. Listing broker Bernice Leventhal said that figure isn’t correct, but declined to say how much it cost. She did say, however, that the intent of the video was to do something that “no one else has done.” She said Blesso, a yoga enthusiast, didn’t want the video to feel “too formal,” as many property tour films tend to be. Tiana Von Johnson, founder of the Manhattan brokerage Goldstar Properties, recently created a nearly fourminute promotional film showing footage of her posing for a glamorous photo shoot in a client’s apartment. Von Johnson, who worked as a producer and played several small roles in films before entering real estate, said she hoped the video would “take the edge off ” her sharp, go-getter image.

Beyond ﬂoor plans New software simulates walking through not-yet-complete buildings

uying an apartment or leasing commercial space from floor plans alone may soon be a thing of the past. Real5D, a Hungarian company hat makes multidimensional interactive models of buildings, entered the U.S. marketplace only a few months ago and has already received $1.2 million from the venture capital Fund DoubleRock. Now with a new office in California, the company is poised to make its mark in the States and eventually New York City, which Real5D’s Dan Canfield called “the mecca of real estate.” The company, founded in 2007 by Hungarian developer Balazs Farago and his brothers Peter and Daniel, has already made a name for itself by working with European companies like Skanska. Real5D’s models offer a more “immersive” experience than other products currently on the market, Canfield explained, allowing prospective buyers or tenants to create personal avatars who walk through the virtual property, riding elevators and even interacting with brokers. Real5D’s 112 May 2012 www.TheRealDeal.com

WE HEARD

ak seemed like a great way,” Brause said. Proceeds from the trip go to the nonprofit Long Island City Community Boathouse. This year’s participants hailed from companies like Trinity Real Estate, Winick Realty, Vornado Realty Trust and even the New York Post; real estate columnist Lois Weiss is a seasoned kayaker and has participated for the past several years. After about two hours on the river, the group arrived at Brooklyn Bridge Park and dined at Grimaldi’s Pizzeria, where brokers chatted about cap rates and the deals they are working on. “Kayaking is definitely a bonding experience,” said Michael Rudder of the Rudder Property Group, who was paired with Vornado’s Ron LoRusso. “You are spending hours with someone in a two-person kayak ... that definitely helps when conducting business in the future.” By Guelda Voien

▼

n recent years, the real estate industry has done its best to stay aﬂoat. The Young Men’s/Women’s Real Estate Association of New York, which provides networking opportunities for industry professionals, is taking that literally. On a Friday afternoon last month, the group hosted its annual daylong kayak trip down the East River, guiding about 25 brokers and managers from Long Island City to Brooklyn Bridge Park and back. Always glad to stay, uh, current, TRD went along for the ride. Departing at 8 a.m. from Long Island City, the group kayaked past the Domino Sugar Factory site, which developer Two Trees recently signed a contract to buy for $185 million. Led by the expert volunteers of the Long Island City Community Boathouse, they also paddled past Roosevelt Island to take a look at Four Freedoms Park, which is set to open this fall, as well as the site where CornellNYC Tech is slated to rise. The route is different every year, explained organizer David Brause of Brause Realty, who started the tradition seven years ago and now co-organizes the event with Lind-

technology has been used mostly for commercial buildings so far, but it can also be used for residential. Basically, the tool helps potential clients better visual-

ize the property, since “it’s really hard to imagine a building that’s not there,” Canﬁeld said. Last year, Real5D built a virtual model of a not-yet-completed mall in Poland for European development ﬁrm Trigranit, which had managed to lease only 65 percent of the

She promoted the film, which cost $10,000 to make, on Facebook and Twitter. Since then, she said, “I’ve received e-mails from all across the world from people telling me how inspiring I am, and requesting internships, and even from a few buyers, one of which actually led to a contract!” But brokers don’t have to spend thousands to make their videos stand out. Manhattan Spaces Managing Director Matthew Hars recently released a video for his listing at 201 Clinton Avenue in Fort Greene, which is on the market for $418,000. Reminiscent of a movie trailer, the short film opens with an explosion in the streets of New York City. But the clip cost only $50 or $60 to make, said Hars, who produced it in Final Cut Pro with the help of a colleague. And Hars said he has seen a significant uptick in visits to his firm’s site since the release of the video, while several brokers and potential clients have inquired about the listing. “The key is making it funny and creative and something that people will remember,” he said. By Andrea Cetra

building after a year of marketing. But within days of using Real5D’s model, the project shot up to 90 percent leased, Canfield said. Still, some tenants may be wary of signing a lease before the building nears completion for fear it may not look exactly as represented, said Adelaide Polsinelli, a senior director at Manhattan commercial brokerage Eastern Consolidated. “There is some reluctance to 100 percent rely on something that they haven’t physically walked,” she said. Still, she said, the tool will likely come in handy for New York industry professionals and their clients. “I think that they will probably use this to begin their A Real5D search and then make their final decision screenshot when they get closer to actually seeing the product,” she said. New York City developers have a little while to wait before they can make use of this newest technological tool, though: Canfield said the company wants to develop a strong California base before moving to the East Coast. By Katherine Clarke www.TheRealDeal.com August 2012 105

THE CLOSING WITH HARALD

GRANT Top Hamptons broker Harald Grant joined the Southampton ofﬁce of Sotheby’s International Realty in 1987. Since then, Grant has sold more than $1 billion in real estate, working with cultural and business titans such as Pink Floyd’s Roger Waters and Blackstone Group cofounder Peter Peterson. Last year, Grant was the No. 1 Hamptons broker and the No. 4 broker in the country, according to a Wall Street Journal and Real Trends ranking based on closed transaction volume. He currently has almost $338 million in sales listings, including a $32 million oceanfront beach house in Southampton.

What is your full name? Harald Grant, no middle name. What’s your date of birth? April 13, 1951. Where did you grow up? I’m from Norway. I moved here when I was seven. To Bay Ridge. Why did your parents move to the U.S.? My father fought in World War II — he joined the [U.S.] Merchant Marines when he was 10 years old as a mess boy. Because he was a Norwegian citizen but fought in the American army, he was given U.S. citizenship. After attending the University of Vermont, you worked as a model with Ford Models. What was that like? I did a lot of work with Cybill Shepherd, with Susan Dey, [and did] magazine covers for Seventeen, Glamour, GQ, Simplicity — all that stuff. I lived in Paris, modeling for a year. Then you sold computers for IBM. What did you do next? From 1980 to 1985, I worked in New York in construction. Then at a black tie party, I met a young lady, Wendy Norris, who came from an upper-crust family. She had a horse farm in the Hamptons that needed someone [to help run it], so I retired from the construction business and married her. How did you get into real estate? Wendy’s mother, Pat Patterson, was working for Sotheby’s. And she got me an interview.

out with me. I’m 60 years old. That’s not age-appropriate. Not that I’m not attracted to girls 28, or 30, or 32. Don’t get me wrong — there’s a youthfulness, there’s a vitality, and there’s an innocence. ... Women who are 45 or 50, there’s an anger-management deal. For my purposes, in order to go to these cocktail parties and socialize and have a signiﬁcant other, she’s gotta be age-appropriate. Because all these guys have wives. And I’m not going to walk in with some hot-looking girl like you who’s 28. The guys are going to go, “That’s great,” but the wives are going, “I’m not going to sell my house [with him].” Do you have any hobbies? Sailing. I have a Hinckley 52 sailboat I keep here and in the Bahamas. My getaway is, I go up to Sag Harbor, I sit in my cockpit, I put on Jimmy Buffett and I have a Corona. And I’m in Never Never Land.

Is it difﬁcult to work with ultra-wealthy clients? It’s very easy to work with them — because they want to cut to the chase. They don’t have time to play games. These guys that are making this money, they’re trading currencies in Europe at 5 o’clock in the morning. ... They’ll call me at 6, 6:30: “Hey, Harald, I’m on the computer, am I waking you?” And I say, “No.” Meanwhile, I gotta wake up.

What was your biggest professional gaffe? My biggest screw-up? I have a number of them. In 1988, [I was with] this very sophisticated French lady. ... We’re in this house, we’re walking around and I say, “C’mon, you don’t want to buy this house, it’s got a small kitchen.” And she looks at me and goes, “Don’t ever assume something from somebody. Because I happen to like small kitchens.” I turn red as an apple. And she says, “Learn to listen.”

You’re divorced now. Are you dating? Oh, I’d love to ﬁnd someone. My problem is, I don’t have the time to look. ... Girls your age [late 20s] want to go

What was the ﬁrst deal that put you in the big leagues? David Koch [the billionaire co-owner of Koch Indus-

106 August 2012 www.TheRealDeal.com

tries]. 1990. I sold him the most expensive home in the Hamptons at that time, for $7.2 million. How did you meet him? He came to me through my mother-in-law. He’s a 6-foot6 guy, and I took him down to the basement of this house. Crawling around in the basement. He says, “Harald, I don’t have time for this.” He’s got his G5 [Gulfstream V private jet] sitting at the airport. I’m crawling around to show him how the pilings weren’t only put in loose sand — they were in cement blocks — to show him the strength of the home because it’s on the beach. He’s going, “Harald, you’re right. Nobody’s ever taken me down here.” He liked the way I went into the nuts and bolts of the house. You dress casually, often in shorts. How do clients react to that? You have to be smart about it. I have a lot of repeat customers, and when you have repeat customers, you usually end up being friends. You can be somewhat more casual. Does that mean shorts and a polo shirt? Sure. When you’re going on a presentation to acquire a listing, that’s a special event, so you get dressed accordingly. That’s when I wear appropriate attire for that moment. I wear a summer suit or a sport jacket. Would you ever leave the Hamptons? There’s life beyond the Hamptons, but no. The grass is not always greener on the other side of the fence. By Leigh Kamping-Carder

PHOTOGRAPH BY KARL RIVENBURGH

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