The Real Deal January 2014 by The Real Deal

More brokers cut commission

www.TheRealDeal.com

Chinese investors: ‘the new Russians’

Witkoff: the savvy strategist

N ew Yo r k R e a l E s tat e N e w s

The unglamorous $40 million buyers

120

Dealmaking at courtside seats

Vol. 13 No. 1 January 2014 $3.00

p35

Tallying 2013’s Frank McCourt: Bracing for benchmarks A new ballgame de Blasio More office building sales soar over $1B marker, while closed residential deals see surprising drop at top. p52

Ex-L.A. Dodgers owner says West Side land buy is just the start of a larger Big Apple portfolio. p30

With limited options for closing budget gap, a real estate tax hike could be likely as mayor takes office. p20 ILLUSTRATION BY D. Studio

INTIMATE. ELEVATED. NEW YORK.

Full Floor Condominium Residences, Priced From $11M Interiors Designed by Yabu Pushelberg Over 10,000 SF of Exclusive Amenities & Services By Appointment Only | 212.230.1130 | onemadison.com

THE COMPLETE OFFERING TERMS ARE IN AN OFFERING PLAN AVAILABLE FROM SPONSOR. FILE NO.CD06-0603. SPONSOR: MADISON R/A SUB, LLC.

Date: December 30, 2013

File Name: OMP_RealDeal_140101_FP_HR.pdf

Project: One Madison

For approval, please sign and date below Art:

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Copy:

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GD: Publication: Real Deal Magazine Spell check: Issue: 2014 January issue Call source: n/a Specs: Single Page 4C Trim Size: 10.5 in × 14.5 in

ASHKENAZY

ACQUISITION

1991 Broadway

Premier Manhattan Lincoln Square/Upper West Side

LOCATION FRONTAGE SIZE On Broadway between 67th & 68th Streets Ground: Over 55’ of prime glass ±3,000 SF frontage on Broadway Mezzanine: ±2,000 SF SUBWAY PROXIMITY Lower Level: ±2,500 SF within 5 blocks Total: ±7,500 SF INFORMATION • D irectly adjacent to the Apple store at Lincoln Center • D irectly across from the World Famous Lowes Theater and only 3 blocks from Lincoln Center for the Performing Arts

80 Carmine Street LOCATION Corner of Carmine Street & Varick Street

SIZE Ground: ±3,050 SF Lower Level: ±4,955 SF Outdoor Patio/ Glass Enclosure: ±1,000 SF Total: ±9,005 SF

LOCATION Corner of Chambers Street & Church Street SUBWAY PROXIMITY at foot of building within 5 blocks

LOCATION Northeast Corner of Church & Leonard Streets

SUBWAY PROXIMITY within 1 block

second level

TriBeCa

±1,400 SF ±1,885 SF ±1,837 SF ±5,122 SF

FRONTAGE Over 85’ of frontage

INFORMATION • Excel lent access to transportation in a central, highly accessible location • D irectly opposite 56 Leonard, the largest residential development in TriBeCa • 14’ ceiling heights designed for a first class restaurant with two additional below grade levels

4168 Broadway

145 Greene Street

Upper Manhattan LOCATION FRONTAGE Corner of Broadway & West 177th Street ±103’ on Broadway

SIZE Lower Level: Ground: INFORMATION Second Level: • Located one bl ock south of the George Washington Bridge Third Level: Terminal which serves over 4 Million passengers annually Fourth Level: • The George W ashington Bridge Terminal is undergoing a Fifth Level: $183.2 million renovation with an array of first class national and Sixth Level: local retail and will quadruple in size to 120,000 SF Total:

±14,441 SF ±14,024 SF ±13,996 SF ±14,148 SF ±14,148 SF ±14,148 SF ±14,148 SF ±99,053 SF

SoHo LOCATION Corner of Greene Street and Houston Street

SIZE Ground: Lower Level: Total:

±1,970 SF ±960 SF ±2,930 SF

FRONTAGE Over 124’ of frontage along Houston Street

INFORMATION • Features i nclude high ceilings and extraordinary frontage • N eighboring retail includes: Chanel, Louis Vuitton, Club Monaco, Ralph Lauren, Burberry, Dior • A t the cross-roads of SoHo, NYU, Greenwich Village, and NoHo

For Leasing Information Please Contact:

AJ Levine • alevine@aacrealty.com • 646.214.0245

ACQUISITION Philip House (1311-1337 Lexington Avenue) SUBWAY PROXIMITY within 2 blocks

INFORMATION • Situated at the base of Philip House, a classic 12-story prewar condominium conversion containing 71 luxury residences • Located in the heart of Carnegie Hill, home to some of the world’s wealthiest residents

LOCATION Corner of Delancey & Clinton Streets, at the foot of the Williamsburg Bridge

FRONTAGE ±1,946 SF Over 100’ of highly ±1,956 SF visible frontage ±3,902 SF* along Church & *Up to 5,848 SF with proposed Chambers Streets

SIZE Ground: Cellar: Sub Cellar: Total:

SIZE Multiple Retail Opportunities

SUBWAY PROXIMITY within 2 blocks

INFORMATION • The C hambers Street subway station is the 14th busiest station in New York City with an average of 54,000 people passing through weekly • One block from City Hall, five blocks from the World Trade Center

249 Church Street

LOCATION Located on Lexington Avenue between 88th & 89th Streets

Lower East Side

TriBeCa

SIZE Ground: Lower Level: Total:

Upper East Side

West Village

INFORMATION • Turn-key restaurant opportuni ty with 1,000 SF of outdoor patio; all uses considered • N eighboring tenants include: HSBC, CitiBank, Soul Cycle, Equinox, NY Sports Club

148 Church Street

Retail Opportunities

ASHKENAZY

SIZE Ground: Up To:

FRONTAGE Over 100’ of frontage along Delancey Street

±2,725 SF ±5,250 SF

156 Delancey Street

INFORMATION • Be seen by over 111,189 vehicles and over 200k people traveling the bridge each day • Directly across from the newly approved Seward Park Development, a 1.65M SF mixed use project including 1,000 new housing units

TriBeCa LOCATION Southeast Corner of Church Street & Leonard Street

SIZE Ground: Cellar: Sub-Cellar: Total:

±934 SF ±3,178 SF ±13,236 SF ±17,348 SF

FRONTAGE ±17’-3” on Church Street

241 Church Street

INFORMATION • Located at the base of the premier residential building in TriBeCa and directly across the street from 56 Leonard, the largest residential development in TriBeCa (145 units over 60 stories) • Central, highly accessible location situated between Wall Street and the Financial District to the South and the West Village and SoHo to the North

TriBeCa LOCATION Southeast corner of Church Street & Franklin Street

SIZE Ground: ±1,308 SF

FRONTAGE Over 75’ of frontage along Franklin & Church Streets

257 Church Street

INFORMATION • Located 1 block north of 56 Leonard, the largest residential development in TriBeCa • One of NYC’s most active neighborhoods with several new projects completed and underway • Surrounded by great restaurants and hotels, all in the heart of TriBeCa

Upper Manhattan LOCATION Northeast Corner of Broadway & West 146th Street SUBWAY PROXIMITY within 1 block within 2 blocks

SIZE Ground: Second Level: Third Level: Lower Level: Mezzanine: Total:

±7,947 SF ±7,869 SF ±7,220 SF ±8,847 SF ±2,567 SF ±34,450 SF

FRONTAGE ±100’ on Broadway ±151’ on W 146th Street

3560 Broadway

INFORMATION • Within walking distance of the Columbia University’s Manhattanville campus, a 17 acre development with 6.8 Million SF of housing & facilities • Ability to develop ±70,000 SF of retail by combining with adjacent lot

Chelsea LOCATION Corner of 6th Avenue and 20th Street in the heart of the Ladies’ Mile

Limelight (656 Avenue of the Americas)

SIZE Ground: ±4,649 SF

INFORMATION • Co-tenants Include: David Barton Gym, Grimaldi’s, Chateau • Redesigned floor plates; this iconic structure represents a spectacular opportunity that would be unachievable in an average building • Surrounded by exceptionally high-volume retail tenants including Bed Bath & Beyond, Marshalls, Trader Joes, Burlington Coat Factory and Home Depot

Daniel Iwanicki • diwanicki@aacrealty.com • 646.214.0251

ASHKENAZY

ACQUISITION

1991 Broadway

Premier Manhattan Lincoln Square/Upper West Side

80 Carmine Street LOCATION Corner of Carmine Street & Varick Street

SIZE Ground: ±3,050 SF Lower Level: ±4,955 SF Outdoor Patio/ Glass Enclosure: ±1,000 SF Total: ±9,005 SF

LOCATION Corner of Chambers Street & Church Street SUBWAY PROXIMITY at foot of building within 5 blocks

LOCATION Northeast Corner of Church & Leonard Streets

SUBWAY PROXIMITY within 1 block

second level

TriBeCa

±1,400 SF ±1,885 SF ±1,837 SF ±5,122 SF

FRONTAGE Over 85’ of frontage

4168 Broadway

145 Greene Street

Upper Manhattan LOCATION FRONTAGE Corner of Broadway & West 177th Street ±103’ on Broadway

±14,441 SF ±14,024 SF ±13,996 SF ±14,148 SF ±14,148 SF ±14,148 SF ±14,148 SF ±99,053 SF

SoHo LOCATION Corner of Greene Street and Houston Street

SIZE Ground: Lower Level: Total:

±1,970 SF ±960 SF ±2,930 SF

FRONTAGE Over 124’ of frontage along Houston Street

For Leasing Information Please Contact:

AJ Levine • alevine@aacrealty.com • 646.214.0245

ACQUISITION Philip House (1311-1337 Lexington Avenue) SUBWAY PROXIMITY within 2 blocks

LOCATION Corner of Delancey & Clinton Streets, at the foot of the Williamsburg Bridge

FRONTAGE ±1,946 SF Over 100’ of highly ±1,956 SF visible frontage ±3,902 SF* along Church & *Up to 5,848 SF with proposed Chambers Streets

SIZE Ground: Cellar: Sub Cellar: Total:

SIZE Multiple Retail Opportunities

SUBWAY PROXIMITY within 2 blocks

249 Church Street

LOCATION Located on Lexington Avenue between 88th & 89th Streets

Lower East Side

TriBeCa

SIZE Ground: Lower Level: Total:

Upper East Side

West Village

INFORMATION • Turn-key restaurant opportuni ty with 1,000 SF of outdoor patio; all uses considered • N eighboring tenants include: HSBC, CitiBank, Soul Cycle, Equinox, NY Sports Club

148 Church Street

Retail Opportunities

ASHKENAZY

SIZE Ground: Up To:

FRONTAGE Over 100’ of frontage along Delancey Street

±2,725 SF ±5,250 SF

156 Delancey Street

TriBeCa LOCATION Southeast Corner of Church Street & Leonard Street

SIZE Ground: Cellar: Sub-Cellar: Total:

±934 SF ±3,178 SF ±13,236 SF ±17,348 SF

FRONTAGE ±17’-3” on Church Street

241 Church Street

TriBeCa LOCATION Southeast corner of Church Street & Franklin Street

SIZE Ground: ±1,308 SF

FRONTAGE Over 75’ of frontage along Franklin & Church Streets

257 Church Street

Upper Manhattan LOCATION Northeast Corner of Broadway & West 146th Street SUBWAY PROXIMITY within 1 block within 2 blocks

SIZE Ground: Second Level: Third Level: Lower Level: Mezzanine: Total:

±7,947 SF ±7,869 SF ±7,220 SF ±8,847 SF ±2,567 SF ±34,450 SF

FRONTAGE ±100’ on Broadway ±151’ on W 146th Street

3560 Broadway

Chelsea LOCATION Corner of 6th Avenue and 20th Street in the heart of the Ladies’ Mile

Limelight (656 Avenue of the Americas)

SIZE Ground: ±4,649 SF

Daniel Iwanicki • diwanicki@aacrealty.com • 646.214.0251

bespokemillwork ∙ premieredesign/build ∙ construction management

TheRenovated Home

New York

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TheRenovated Home

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est.1991

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O N E S O T H E B Y ’ S I N T E R N AT I O N A L R E A LT Y | D E V E L O P M E N T D I V I S I O N

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Highlights J A N U A R Y

REFLECTING PRESENCE

2 0 1 4

low can you go? 18 How In inventory-starved market, brokers’

latest tactic is lowering commissions.

Blasio’s ‘taxing’ choices 20 De With limited options for closing the budget gap, NYC’s new mayor may eye changes to real estate taxes.

Chinese cash 22 Counting Investors from China poured a stunning $3 billion into NYC in 2013.

Mayor Bill de Blasio could raise taxes.

24 Daniel Blanco takes the ‘broad’ view The Broad Street Development principal talks about his superhero obsession, the “OCD” organization system he uses at work — and his real estate. Daniel Blanco co-founded Broad Street in 2004.

As the only building officially on memorial grounds, the National September 11 Memorial Museum Pavilion must echo the somber dignity of its WTC environs while admitting thousands of visitors to its exhibits each day. To achieve these diverse goals, Snøhetta teamed with consultant Front Inc. to design an enclosure that both maximizes the building’s security and mirrors its placid surroundings. Through the changing days and seasons, it offers museumgoers a setting for reflection on the past while looking to the future.

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

Frank McCourt’s new ballgame The ex–L.A. Dodgers owner and Boston real estate mogul’s NYC acquisition may be just the start of a larger Big Apple portfolio. Real estate mogul Frank McCourt

in Coney Island? 32 Concerts The City Council approved the

renovation of the neglected Childs building into a 5,000-seat music venue.

build up equity 32 Homeowners The U.S. market rebound puts more Publisher of Metals in Construction 211 E 43 ST | NY, NY 10017 | 212-697-5554 | www.ominy.org

Americans in the black on their homes.

up the register 35 Ringing The top owners, brokerages and deals in NYC’s fast-growing retail sector.

44 The Chelsea Hotel unmasked ‘Inside the Dream Palace’ provides poignant background, but leaves out crucial real estate history. Architect: Snøhetta Photo: Snøhetta

Sherill Tippins’ book on the famed hotel came out last month.

10 January2012 2014 www.TheRealDeal.com www.TheRealDeal.com 8 October

www.TheRealDeal.com March 2012 00

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Offices also in : Chicago, IL

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Highlights continued 46

ASTOR TURF

Witkoff: the savvy strategist The developer, who has $1.5 billion worth of projects under construction, selects partners that help keep his options open.

Steven Witkoff is one of NYC’s most active developers.

top deals 52 2013’s A look at the priciest residential sales, the biggest building buys and the largest office leases.

$40 million buyers... 56 NYC’s They’ve often made fortunes in obscure fields like screw-andbolt manufacturing.

59 InThememoriam landmarked sites that NYC The buyers of NYC’s priciest homes don’t always make their money in well-known fields.

lost last year to the wrecking ball — or will lose soon.

in the life: Nikki Field 64 Day The high-powered Sotheby’s broker In Manhattan’s East Village, a neighborhood known for passionately independent movements, 51 Astor coolly shows it belongs. Designed to attract a diverse range of tenants by Maki and Associates for Edward J. Minskoff Equities, it links two huge volumes on a full city block yet manages to appear different from each angle. The building’s structural steel acrobatics ensure flexibility to serve this market long-term while coalescing with a neighborhood master plan to connect community through public space—a restrained composition in an unrestrained neighborhood.

Residential Market Report

on her Chinese buyers, her CNNreporting daughter and cold calling.

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

A building with broad shoulders Related’s new Robert A.M. Stern–designed rental looks like it’s always been there, critic James Gardner says. 500 West 30th Street, which abuts the High Line.

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

Commercial Market Report

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

Government Briefs How the federal, state and local government impact real estate.

120

National Market Report

Courtside deal making

Reports from around the country on significant developments and trends.

The front row of MSG and the Barclays Center have become hot spots for real estate wheeling and dealing.

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

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

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

TerraCRG’s Ofer Cohen at a Nets game at the Barclays Center.

122 Architect: Fumihiko Maki, Maki Associates Structural Engineer: Ysrael A. Seinuk Photo: Richard Ginsberg

10 12 October January 2014 2012 www.TheRealDeal.com

Residential Deals An insiders’ look at how home sales really happen.

Jimmy Kuhn: Howdy Doody all grown up The Newmark president is a retired fencer with a rock ’n’ roll band, a Jeep Wrangler and a $50 watch.

120

We Heard A lighter look at industry buzz.

www.TheRealDeal.com March 2012 00

$500,000,000 Closed in 2013 Recent 4th Quarter Transactions

$38,000,000

$37,000,000

$35,000,000

Loan Origination Mixed-Use Conversion Queens, NY December 2013

Loan Origination Multifamily Brooklyn, NY October 2013

Loan Origination Hotel Development Site Manhattan, NY September 2013

$27,000,000

$18,100,000

$17,440,000

Loan Origination Queens / Brooklyn Mixed-Use October 2013

Distressed Note Portfolio Acquisition Brooklyn & Bronx, NY November 2013

Note Financing Multifamily Properties Bronx, NY December 2013

$15,000,000

$12,500,000

$9,600,000

Loan Origination Mixed-Use Brooklyn, NY November 2013

Loan Origination Land Manhattan, NY December 2013

Construction Loan Origination Multifamily Brooklyn, NY November 2013

$7,400,000

$6,250,000

$4,150,000

Distressed Note Acquisition Mixed-Use Queens, NY November 2013

Loan Origination Multifamily Queens, NY December 2013

Loan Origination Land / Predevelopment Miami, Florida December 2013

$3,175,000

$2,450,000

$1,000,000

Distressed Note Acquisition Medical Office Queens, NY November 2013

Distressed Note Acquisition Multifamily / Mixed-Use Queens, NY November 2013

Distressed Note Acquisition Mixed-Use Brooklyn, NY November 2013

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

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

The Real Deal N e w Yo r k R e a l E s tat e N e w s Publisher Amir Korangy Editor-IN-CHIEF Stuart W. Elliott Managing Editor Jill Noonan DEPUTY Managing Editor Eileen AJ Connelly Web Editor Leigh Kamping-Carder

Whether you need to buy or sell a building having a real estate broker that knows the local players is key - the buyers and the sellers. You need an intensely dedicated broker who is still on the job long after the lights have gone out elsewhere.

You need Rosewood Realty Group

ASSOCIATE WEB Editor Guelda Voien Art Directors Ronald Gross, Keziah Makoundou Senior ReporterS Adam Pincus, Katherine Clarke Reporter Hiten Samtani SOUTH FLORIDA BUREAU CHIEF Eric Kalis Contributors C. J. Hughes, David Jones, Adam Piore EDITORIAL OPERATIONS MANAGER Linden Lim Web Producers Mark Maurer, Julie Strickland, Zachary Kussin

212.359.9900

www.rosewoodrealtygroup.com

Rosewood Knows New York

We are pleased to announce that for the year ending December 31st 2013,

Rosewood has completed total sales of $2,262,402,000 which include: Manhattan: Aggregate sales of

$1,077,800,000

135 Buildings / 3,795 Residential Units / 104 Commercial Units Brooklyn: Aggregate sales of

$331,649,000

79 Buildings / 2,657 Residential Units / 34 Commercial Units Bronx: Aggregate sales of

$347,678,000

63 Buildings / 3,436 Residential Units / 51 Commercial Units Queens: Aggregate sales of

$460,525,000

53 Buildings / 2,508 Residential Units / 10 Commercial Units Tri-State Area: Aggregate sales of

$44,750,000

14 January 2014 www.TheRealDeal.com

Photographers Chris Martin, Marc Scrivo Director of mARKETING OPERATIONS Yoav Barilan ASSOCIATE SALES DIRECTOR Ross Fox Advertising Sales Eran Evron, Abi Laoshe, Nick Mascaro, Robert Stearns, Jennie Durkovic, Nicki Chadi, Sigalit Levi, Leora Brinkley DIGITAL TRAFFic MANAGER Junaid Zahid Webmaster Nima Negahban Finance director Kenneth Cyrus Administrative Assistant Virginia Durso Circulation Paul Destanko Distribution Mitchell Newman, Patricia Hofmann, Forero Express ATTORNEY Barry J. Friedberg Trachtenberg Rodes & Friedberg LLP Accountants William T. McCallum, CPA, P.C., Christine Wang The Real Deal is a registered trademark of Korangy Publishing Inc. Copyright © 2014. 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.

Equal Housing Opportunity.

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EDITOR’S NOTE

Retail’s redemption

t wouldn’t have been difficult to imagine a couple of years ago, when bookstores and record chains were closing en masse, that online shopping could seriously cripple the New York City retail world. It’s so easy to buy things online these days, that a lot of New Yorkers don’t bother trekking to the grocery store or even the corner bodega for necessities like toilet paper or toothpaste. They just order online from Amazon Prime and wait for it to be shipped to their doorstep, free of charge. It sometimes seems there are only a few things you have to do in person these days — like, say, a colonoscopy. Or a haircut. So it’s surprising, in some ways, that good old-fashioned brick-and-mortar New York City retail is as hot as it has ever been, which we examine in a series of stories starting on page 35. We take a look at the biggest retail leases of 2013, the top brokerage firms doing deals, the biggest investors, and the largest projects. Surveying the 20 biggest deals in Manhattan for the year, two-thirds were gyms and organic supermarkets (like Whole Foods) — which makes sense, given that it’s hard (if not impossible) to browse fresh produce and work out online. (These leases also show how much healthier many of us must be living these days —Nanny Bloomberg would have been proud, and maybe Mayor Bill will be too, as he takes office this month.) Whatever the type of store, retail space is a major draw for investors today, and maybe the major draw in commercial real estate. Retail has become such a driving force in the purchase of the city’s largest office buildings that the office space is almost an afterthought for some. When investors purchased the 27-story office building at 650 Madison Avenue for $1.3 billion several months ago in one of the biggest buys of the year, they said they purchased it because

It’s so easy to buy things online these days, whether it’s toilet paper or toothpaste. So it’s surprising, in some ways, that good old-fashioned brick-and-mortar New York City retail is as hot as it has ever been.

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they believed the retail on the ground floor alone was worth $1 billion, never mind the rest of the building. Indeed, median rents on upper Fifth Avenue passed $3,000 per square foot in 2013, a new benchmark (making it the second priciest thoroughfare in the world), with Times Square looking to follow suit soon. Of course the good times aren’t confined to retail. This month, we also looked at the top office leases of 2013, in a story on page 54, and examined the top residential deals, on page 52. (Surprisingly, the prices paid at the top of the luxury residential market didn’t match the hype surrounding that sector, though that was largely due to new development sales that haven’t closed yet.) The million- (or, actually, billion-) dollar question is whether this market has legs. Given that there hasn’t been a massive expansion of lending, some say we’re in the opening innings of an up market. Others say there’s already a bubble. For predictions about where the market’s headed in the New Year, see page 71. Elsewhere in the issue, we looked at Steve Witkoff, one of the most active developers in New York today (page 46), and examined former L.A. Dodgers owner and Boston real estate mogul Frank McCourt, who only has a toehold in New York now, but is looking to build his portfolio here (page 30). Finally, I’d like to congratulate several members of The Real Deal team for their recent promotions. Hiten Samtani has been elevated to reporter, Kathy Clarke to senior reporter, Guelda Voien to associate web editor, and senior reporter Adam Pincus has earned the additional title of research manager for his tireless data digging. I’d also like to welcome Eileen AJ Connelly, formerly of the Associated Press, as TRD’s new deputy managing editor, and Lisa Keys, who was previously at the New York Post, as the new managing editor of Luxury Listings NYC. And on a sad note, I’d like to remember one of our salespeople, Leora Brinkley, who passed away this past month at her South Florida home. Leora had a great attitude and was incredibly warm and hardworking. She brought a great deal of sunshine to our operations in the Sunshine state. She will be sorely missed. Enjoy the issue.

Stuart Elliott

CMY

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

By Katherine Clarke he Manhattan residential inventory crisis is forcing brokers into a tight corner when it comes to negotiating commissions and terms of exclusive agreements with sellers, brokers told The Real Deal. With brokers competing for work thanks to the overwhelming shortage of exclusive product, savvy sellers are pitting agents against each other in an attempt to secure advantageous arrangements. Some of the things these sellers are after? Paying lower commissions, of course, and shorter exclusive arrangements (often three, instead of six, months.) “They’ll say ‘X, Y and Z broker offered to go as low as this,’ ” said Ryan Fitzpatrick, director of sales at residential brokerage CORE. “ ‘Can you match that?’ ” Brokers who are hungry for listings, particularly those without long track records or with smaller firms, are agreeing to those terms in order to break into the deal stream, sources said. But that, in turn, is putting pressure on the residential brokerage community at large. “The brokers that are desperate are using that angle to get work,” said Mara Flash Blum, a broker at Sotheby’s International Realty who recently pitched against a broker willing to take a lower commission. “I said ‘I’m sorry, I can’t do that,’ ” she said. The inventory crunch shows little sign of letting up. In the fourth quarter of 2013, inventory dropped to 4,164 co-op and condominium units, a 12.3 percent dip from the fourth quarter of 2012, according to brokerage Douglas Elliman. That’s the lowest inventory level since Elliman began tracking the data in 2000. The drop was even more pronounced

18 January 2014 www.TheRealDeal.com

Broker vs. broker: How low can you go? In inventory-starved market, sellers push agents to reduce commissions

for new development units, whose availability fell 19.6 percent year-over-year. The situation was much better on the luxury end of the market — the top 10 percent of all units — where the listing count was 1,190, a 24.9 percent increase over the same period in 2012. At the same time, turnover of product in the market is still happening at a fast pace. The absorption rate in the fourth quarter was 3.8 months, nearly two months faster than the 5.5-month pace in the prior-year quarter. “There are a lot of agents competing for a

Indeed, at a recent panel event, Elliman CEO Dottie Herman spoke out against the practice. “If the only thing you think about is who’s the cheapest, and you couldn’t care less about the service, then I’m not really even going to have a conversation with you, because there’s nothing to talk about,” she said. “Good luck to you.” Meanwhile, smaller companies, like Miron Properties, have more wiggle room for discussion. “We have certainly been able to pick up

count. Most sellers understand that taking a discount agent is akin to jumping over dollars to reach for pennies.” CORE’s Fitzpatrick agreed. “We’re not a discount brokerage. We’re not going to enter a race to the bottom,” he said. “If you go into three plastic surgeons, you’re not going to barter on price. It’s about the results,” he quipped. “You want the broker that’s going to get you the highest price for your apartment. Many sellers respond to that once they understand where we’re coming from. Not everyone, but many do.”

“They’ll say ‘X, Y and Z broker offered to go as low as this,’ ” said Ryan Fitzpatrick, director of sales at residential brokerage CORE. “ ‘Can you match that?’ ” small number of listings,” said Fitzpatrick. “It makes for a very intense playing field. Most sellers are savvy. They realize they have options. They realize that they can call the shots in some respects.” The standard commission for a deal is 6 percent — 3 percent for the seller’s broker and 3 percent for the buyer’s — while for luxury properties, it can inch down depending on the price of the unit. One broker told TRD that he’d been competing for an exclusive against a broker who offered a commission of less than 2 percent on a $2 million property, but he declined to provide specifics. For brokers at large corporate firms like the Corcoran Group and Douglas Elliman, undercutting on commissions is strongly discouraged, if not tacitly banned.

listings where the corporate firms haven’t, because we were able to be creative with fee structures,” said Jeff Schleider, managing director at Miron. “If there’s some special circumstance, like the client is going to be selling and buying with us, we’ll of course work with them on commissions. Before I started Miron, I worked at Corcoran, and agents would lose deals all the time because [they wouldn’t drop their commissions]. Six percent doesn’t always work.” But many warn that giving up too much on commissions is a slippery slope and, from a broker’s prospective, sets a dangerous precedent for future deals. “There is a clear value in the work of a professional broker,” said Michael Graves, a broker at Elliman. “A skilled agent will deliver results far beyond the percentages of any dis-

Sellers are also increasingly asking to reduce the length of exclusive agreements to less than six months, because they think that’s plenty of time to sell a well-priced unit in today’s quick market. But experienced brokers said that despite market conditions, three months is rarely enough time to complete a deal. “The perception is that things are flying off the shelf. But unless it’s new construction, it’s not flying off the shelf,” said Flash Blum. If a broker is going to invest the time and, in some cases, their own money in preparing the apartment for sale and securing advertising and media exposure for their exclusive, they can’t run the risk of losing the exclusive after just three months, Flash Blum said. “I don’t like to take a three-month exclusive,” she said. “You lose the first two weeks just getting the apartment ready for sale.” TRD

www.TheRealDeal.com March 2012 00

The complete offering terms are in an offering plan available from sponsor. File No. CD11-0242.

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20 January 2014 www.TheRealDeal.com

De Blasio’s ‘taxing’choices With limited options for closing revenue gap, NYC’s new mayor may eye changes to real estate taxes

By C.J. Hughes ayor Bill de Blasio’s campaign pledge to pay for universal preschool by hiking income taxes on the wealthiest New Yorkers is likely to come up against election-year politics, with Gov. Andrew Cuomo and the entire state legislature on the 2014 ballot. But unlike income taxes controlled by Albany, de Blasio has a bigger say on other levies — particularly those imposed on real estate. Former Mayor Michael Bloomberg twice convinced the City Council to cover budget shortfalls by raising property taxes, including a record 18.5 percent jump in 2002, when typical co-op owners saw their tax bills climb by about $500 a year. That hike brought the effective tax rate on co-ops and condos to 13 percent of assessed value, from about 11 percent, experts say. The rate came down briefly during the

in part because some co-ops also have rental units — has long been seen as a fundamental problem with the city’s system. But significantly changing it would require legislation from Albany. And with those single-family homes typically located in middle-class or even poor areas, any effort to make the people who live there shell out more taxes would, for many, be politically unpalatable. Property tax bills also climbed under Bloomberg because assessed values rose sharply, in step with the city’s hot real estate market, after a long period in the Giuliani years when values were relatively stagnant. De Blasio faces a $2 billion hole in the city’s $70 billion budget, and contrary to popular belief, there’s little room to cut, because about 75 percent of that total is mandated spending, experts say. So the new mayor might be tempted to push the City

“New York’s property taxes are without a doubt some of the most complex, opaque property taxes of any major jurisdiction.” George Sweeting, Independent Budget Office boom years of the last decade, but the recession prompted another hike of 7 percent in 2008. That increase tacked on another several hundred dollars a year for those same co-op owners, effectively putting the rate back to where it stood after the 2003 jump, at around 13 percent. It remains at that level today. Although the amount that each residential and commercial asset class pays fluctuates based on changes in property values, the ratio each pays is more or less static. That’s because it’s politically difficult to tweak the ratios and ask, say, a single-family homeowner in Queens to shell out extra so that their share is closer to that of a Fifth Avenue co-op. At current rates, Class 1 properties, or single-family homes, pay 78 cents for every $100 in market value of the property, while Class 2 homes, which include condos and co-ops, pay as much as $3.83 for every $100, experts say. “There is tremendous variability,” said Charles Brecher, the research director for the Citizens Budget Commission, an independent budget watchdog group. The mayor and City Council have the power to make across-the-board increases to the nominal tax rate. They can also slice up the pie a bit differently, so that one type of property pays more or less than another, as long as no one slice rises by more than 5 percent in a year, experts say. The imbalance — which exists because tax law treats co-ops like rental buildings,

Council to bump up that underlying 13 percent rate for co-ops and condos to drum up more money. As with many tax changes, however, there could be blowback. “Administratively, this would be an easy thing to do,” said George Sweeting, of the city’s Independent Budget Office, a non-partisan watchdog agency. “Politically, it would be very hard.” There are other taxes that could be tweaked to boost revenue without Albany’s approval, like the hotel room tax. For much of 2013, this tax stood at 5.8 percent, which would have generated $521 million dollars, according to the city Office of Management. But bowing to pressure from the hotel industry, which says the tax hurts tourism, the City Council let the rate drop to 5 percent at the end of November, which means the city will now collect $70 million less in revenue, Sweeting said. For his part, de Blasio believes tourism will be fine even if the tax rate returns to 5.8 percent, and he supports reinstating the higher rate, according to news reports. Then there’s the city’s real estate transfer tax, which sellers pay and which flows mostly back to the city. It currently tops out at about 1.4 percent for sales over $500,000. De Blasio might consider creating a new rate for luxury homes that sell for more than $5 million, for example, in line with the state’s mansion tax, sources say. The new mayor has not raised this idea publicContinued on page 100 www.TheRealDeal.com March 2010

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By the Numbers

$3 billion

The value of Chinese investment in U.S. commercial properties in 2013, more than 142 times the $21 million invested in 2008.

83 percent

Counting Chinese cash Investors from China poured $2.5 billion into NYC in 2013, more than any other group

t’s not headline news that Chinese investors are parking their cash in New York City real estate, but the magnitudes of those investments is. In 2013, investors from China for the first time poured more money into bricks and mortar in New York City than their counterparts from any other country in the world. Those investments included a $1.4 billion stake in the high-profile GM Building, the $725 million purchase of 1 Chase Manhattan Plaza, and a 70 percent share of Forest City Ratner’s Atlantic Yards development in Brooklyn. And that’s not to mention all of the highpriced residential properties Chinese buyers are snapping up. Indeed, residential powerbroker Dolly Lenz recently called Chinese buyers “the new Russians,” on CNBC: “It used to be when you said, ‘I have a Russian client, I Wang Jianlin want to see the apartment, I want to schedule an appointment,’ you know the Red Sea parted … and now that’s true for the Chinese.” Below is a look at how Chinese real estate investments stack up. By Jill Noonan and Eileen AJ Connelly

The percent of the $3 billion deployed in NYC in 2013. That $2.5 billion made China the top foreign investor in the city for the year.

Average age of a Chinese billionaire, about 12 years younger than the average billionaire age in the U.S.

Number of China’s richest 100 that made their fortunes in real estate.

$2 trillion

The combined net worth of the 515 billionaires in the U.S., compared with the $384 The ranking of the billion that China’s GM Building as 157 billionaires are the most valuable worth. However, a Zhang Xin office property in recent survey by Wealth-X, a the country, at $3.4 billion, wealth research firm, found after Chinese real estate that billionaire wealth is developer Zhang Xin and growing faster in Asia than Brazilian banking magnate anywhere else in the world. Moise Safra paid $1.4 billion for a 40-percent stake in the property.

$3,017

Cost of rent per square foot at Hong Kong’s Causeway Bay, the most expensive retail location in the world in 2013. By comparison, NYC’s Fifth Avenue ranked second, with retail rents at $2,500 per square foot.

$1.12 trillion

The total value of real estate development that took place in China in the first 10 months of 2013, compared with $908 billion in the U.S.

$14.1 billion

The net worth of Wang Jianlin, the real estate mogul who ranked No. 1 on Forbes list of Chinese billionaires in October. By comparison, New York’s richest real estate billionaire, Richard LeFrak, is worth $5.6 billion.

22.3

The ratio of housing prices to annual household income in Beijing, illustrating the steep cost of housing in the city. By comparison, the ratio is 6.2 percent in New York. Sources: Real Capital Analytics, Cushman & Wakefield, International Business Times, Forbes, International Monetary Fund.

The Field Team Wishes You A Successful 2014

NIKKI FIELD Senior Global Real Estate Advisor, Associate Broker | 212.606.7669 | nikki.field@sothebyshomes.com | www.nikkifield.com

Compiled by Yaffi Spodek

East Side Manhattan Brokerage | 38 East 61st Street, New York, NY 10065 Operated by Sotheby’s International Realty, Inc. Sotheby’s International Realty® is a registered trademark. 01-14_Version-2.indd 1

22 January 2014 www.TheRealDeal.com

12/18/2013 4:14:37 PM

Behind every successful Building Owner is a host of incredibly talented Brokers and steadfast Tenants. Jack Resnick & Sons thanks the following Firms and the Brokers who represented them, as well as our existing Tenants that renewed their commitment to New York City in 2013. City University of New York 255 GREENWICH STREET represented by: Stephen Siegel, David Hollander & Richard Levine of CBRE, Inc.

Fairway GS LLC 255 GREENWICH STREET represented by: Allen Cooperman of Welco Realty & Jason Pruger of Newmark Grubb Knight Frank

NYCHSRO Medical Review, Inc. 199 WATER STREET represented by: Mark Ravesloot & William Iacovelli of CBRE, Inc.

Lenox Hill Hospital/North Shore-Long Island Jewish Health Systems, Inc. 110 EAST 59TH STREET represented by: Brian Waterman & Brent Ozarowski of Newmark Grubb Knight Frank

Olympus U.S. Management LLC 485 MADISON AVENUE represented by: Gary Greenspan, Jonathan Serko, Mitchell Barnett, Barry Zeller, David Malawer & Andrew Ross of Cushman & Wakefield Made Man Barbershop, Inc. 170 WEST 23RD STREET represented by: Matt Cohen of The Lansco Corporation Panthera Corporation 8 WEST 40TH STREET represented by: James Saunders & Earle N. Cutler of Newmark Grubb Knight Frank Braun & Goldberg 110 EAST 59TH STREET Quick Park Chesapeake LLC 401 EAST 80TH STREET Neil Kaplan, D.D.S. 133 EAST 58TH STREET

The Weisscomm Group, Ltd. 199 WATER STREET represented by: Robert Yaffa & Wayne Van Aken of Cassidy Turley Applegreen LLC 485 MADISON AVENUE represented by: Shawn S. Harooni & Norman Bobrow of Norman Bobrow & Co., Inc. First Southwest Company 485 MADISON AVENUE represented by: Michael Moorin of Newmark Grubb Knight Frank Microdot LLC 133 EAST 58TH STREET Ninepeaks Capital Management, LP 880 THIRD AVENUE Ban’s Custom Tailor 401 EAST 80TH STREET

UMG Recording, Inc. 1755 BROADWAY represented by: Scott Gottlieb of CBRE, Inc. Epsilon Data Management LLC 199 WATER STREET represented by: Stephen Bellwood & John Boyle III of Cassidy Turley Bloom Real Estate Group LLC 485 MADISON AVENUE represented by: Scott M. Bloom of Bloom Real Estate Group An American Craftsman, Inc. 205 WEST 57TH STREET represented by: Francine Kayden of Midtown Commercial Real Estate First Avenue Liquors, Inc. 1516 FIRST AVENUE represented by: Shannon McAlister of SLMC Corp. Beech Hill Securities, Inc. 880 THIRD AVENUE represented by: Lisa Kiehl of Jones Lang LaSalle Zibro Family Management 485 MADISON AVENUE represented by: John Brod & Laura Pomerantz of PBS Real Estate

Escape Nail Spa, Inc. 401 EAST 80TH STREET

United States of America 315 HUDSON STREET

Cubit Corporation 133 EAST 58TH STREET

Garden of Eden 170 WEST 23RD STREET

Parkstar Clean Corp. 401 EAST 80TH STREET

Manhattan Sports Performance LLC 133 EAST 58TH STREET

Martin Kent, D.D.S. 133 EAST 58TH STREET

Carl Meese, D.D.S 133 EAST 58TH STREET

La Crosta Pizza Restaurant 430-36 EAST 72ND STREET

Definitions Personal Fitness, Inc. 133 EAST 58TH STREET

New York Public Library 110 EAST 59TH STREET

Knickerbocker 72, Inc. 430-436 East 72nd St.

Wells Fargo Bank, N.A. 1755 BROADWAY

Cynthia R. Gomez, D.D.S. 133 EAST 58TH STREET

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

Proud to be a member of

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12/27/13 11:19 AM

At the Desk of: Daniel Blanco

aniel Blanco had just started focusing on Lower Manhattan real estate when the area was decimated by the World Trade Center attacks in 2001. For years after that, business was slow going. But now Blanco, a principal at Broad Street Development — which develops, owns and manages properties — is bullish on Downtown. Blanco — who cut his teeth with legendary commercial broker Ed Gordon — co-founded Broad Street in 2004 with Raymond Chalmé. And as the

company name suggests, their portfolio is indeed broad. The firm behind projects like Maison East on the Upper East Side and 184 Thompson in Greenwich Village is now building 25 luxury condos at 209 Sullivan Street, the former home of the Children’s Aid Society. It also owns commercial properties, including 55 and 61 Broadway. This month, the devout Catholic and self-described “obsessive compulsive” showed TRD around his office at 61 Broadway. B y G uelda V oien

1 This framed artwork by Blanco’s older daughter, Amanda, 11, reads “I love you dad. My heart breaks when you aren’t around.” Blanco said his kids (his younger daughter, Josephine, is 9) are great at manipulating him. “They get whatever [they] want,” he said. “I don’t even fight.”

2 This photo of then-Gov. George Pataki with

during his childhood — reading the dictionary.

Blanco in front of 75 Broad Street was taken

Blanco, who grew up in Middle Village, Queens,

in 2003. The governor was announcing that

said that he thinks his dyslexia helped him become

Millennium High, a public school, would move

a successful entrepreneur. “They doubt you; [they]

to the 35-story office building, which was owned

think you are stupid,” he said. “It drives you.”

by JEMB Realty, where both Blanco and Chalmé

worked before launching Broad Street. But Blanco

6 Blanco keeps correspondence on each of

said the governor’s announcement jumped the gun

his ongoing projects in piles around his desk.

because “there was no contract or lease signed.”

He also has 5,500 subfolders in his email and

cause after Chalmé’s father died of the disease a few

multiple cell phones, he said. “I have such bad

years ago, just weeks after being diagnosed.

3 Blanco is a huge fan of comic book action movies as these figurines attest to. Superman, Pitt, the Tasmanian Devil and the Hulk are posed next to a statue of Spartan King Leonidas I, who was the Greek hero depicted in the movie “300,” which was adapted from a comic book. Blanco saw last summer’s blockbuster comic book flick “The Avengers,” three times.

OCD (obsessive-compulsive disorder) that I make piles,” he said. “But I find everything.”

8 This 2003 photograph of Blanco with former New York Archbishop Cardinal Edward Egan

7 Blanco has numerous plaques for philanthropic

was taken at an event for Teach NYS. Blanco, who is

work he’s done with the nonprofit Uniting Against

Catholic, and Chalmé, who is Jewish, participate in

Cancer. He got involved with the

the interfaith education charity. While he considers

Lung

himself devout, Blanco said he doesn’t always make it to church. “I sin a lot, unfortunately.”

4 This signed photograph of rapper Jay-Z was a gift from a close friend who knows the rap artist, Blanco said. He is a devotee of the Brooklyn-born musician as well as of fellow rapper Kanye West.

5 This “word of the day,” calendar is a vestige of the treatment for dyslexia that was widely used 24 January 2014 www.TheRealDeal.com

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Commercial Ma r k e t

Manhattan office leasing ends 2013 with a bang High-profile deals were signed in all three major markets

By Hiten Samtani ecember was a robust month for office leasing in Manhattan, with high-profile deals signed in all three major markets of Midtown, Midtown South and Downtown. As of Dec. 27, a total of 9.1 million square feet of office space was leased in Manhattan in 2013’s fourth quarter, according to data from commercial brokerage Colliers International. That’s up sharply from 6.31 million square feet in the previous quarter and 4.97 million square feet in 2012’s fourth quarter. Colliers chief economist Peter Kozel said that the final fourth-quarter numbers may even be slightly higher, given the likelihood of deals in the very final days of the year.

It was “another good quarter in Manhattan,” Kozel said. “Asking rents were up and availability rates were down or flat.” Indeed, average Manhattan asking rents rose steadily throughout the second half of 2013, and increased to $60.41 per square foot in December, up by $1.12 from November, according to Colliers data. The availability rate — an indicator of space currently vacant or available within the next 12 months — dropped by 0.2 points to 11.3 percent in December, from 11.5 percent in November, the Colliers data show. The uptick in leasing activity indicates a thriving business landscape and “a high level of confidence” in the market, said Richard Bernstein, a

Manhattan office stats AVAILABILITY RATE

AVG. ASKING RENT

Manhattan Dec ’13 11.3% $60.41 Nov ’13 11.5% $59.29 Midtown Dec ’13 11.3% $69.73 Nov ’13 11.6% $69.49 Midtown South Dec ’13 9.1% $55.18 Nov ’13 9.2% $53.98 Downtown Dec ’13 14.3% $48.60 Nov ’13 14.4% $47.51 Source: Colliers International

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Going forward, Bernstein was bullish about the office leasing market. “I think we might see rents rising a little bit more aggressively in 2014,” he said. The services sector, including the financial, legal and marketing industries, had been cautious about growing their office footprints despite consistent revenue growth, but “they’re now poised to take on additional space as they continue to expand.”

Midtown Boston Properties received a shot in the arm last month when it leased a nearly 100,000-square-foot chunk of its long-struggling spec office tower at 250 West 55th Street to billionaire George Soros’ investment fund. The firm will pay rents north of $100 per square

foot at the 1 million-square-foot building. Hanley Advisors’ principals Jim Coleman and Steve Kaufman represented Soros’ Fund in the deal, while Boston Properties was represented inhouse by Andrew Levin working in concert with a team from CBRE Group. The real estate investment trust is also in talks with Qatari media giant Al Jazeera to take 50,000 square feet in the building, according to news reports. The company launched its U.S. television station, Al Jazeera America, in August. Even the Midtown submarkets thought to be vulnerable, such as Sixth Avenue, have “demonstrated a lot of resilience,” Bernstein said. A number of notable leases were signed there last month, including pubContinued on page 98

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In their words...

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

“You come

to a REBNY board meeting with me and I guarantee you everyone in that room is richer than they are smart.” Two Trees Management’s Jed Walentas, expressing his disdain for the powers that be. (New York Law School real estate forum)

“Land is back up to stupid levels again.” Scott Alper, principal at the Witkoff Group, on the price of land in the city today. (Panel discussion by Haute Living)

“I’m very close to retirement. I’m done.” McSam Group’s Sam Chang, talking for the umpteenth time about calling it quits while continuing to strike deals.

“New York is characterized by a kind of hysterical NIMBY-ism. I’ve seen a lot of Whole Foods go in, with no deleterious effects.” Former Parks Commissioner Adrian Benepe, talking about the opening of the supermarket in Gowanus and the “Not In My Backyard” mentality of some city residents. (Wall Street Journal) 28 January 2014 www.TheRealDeal.com

“The sculptural

antenna is the comb-over of architecture.” Radio host Peter Sagal, talking about One World Trade Center being named America’s tallest building. (NPR)

“We will never get what you would get in a traditional host city.” King & Grove hotel executive Jim Zito, on how New York’s glut of hotel rooms won’t translate into the same bounce that hotel owners in other cities normally see during the Super Bowl. (Wall Street Journal)

“He was rather — frugal. And I said, ‘I need to buy it.’ ” Noted sex therapist Dr. Ruth Westheimer, on how her husband’s concerns didn’t stop her from purchasing her Washington Heights apartment when it went co-op. (New York Times)

“In this business, “Tax expenditures you can die at your should not be used to desk, unless you get benefit individuals Alzheimer’s. Even if with limited economic you do get Alzheimer’s, commitment to they’ll probably let the city.” you keep going as long A recent Independent Budget Office as you have a bank report, calling for the end of 421a account.” abatements on pieds-à-terre owned by foreigners. (Crain’s)

Peter Fine of Atlantic Development. (Massey Knakal multifamily conference)

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WIC 6'2'' x 6'7''

MASTER BEDROOM 14'11'' x 13'3''

BEDROOM 2 12'8'' x 11'5''

3 BEDROOMS 3 BATHROOMS POWDER ROOM TOTAL AREA 2,021 SQ. FT.

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Renderings are for illustration purposes only. Prospective purchasers should not rely upon these depictions and are advised to review the complete terms of the offering plan for further detail as to type, quality and quantity of materials, appliances, equipment and fixtures to be included in the units, amenity areas and common areas of the condominium. The complete offering terms are in an offering plan available from the sponsor. File No. CD13-0040. Sponsor: MS/WG 1107 Broadway Owner LLC, P.O. Box 1644, New York, NY 10150; Property location: 10 Madison Square West, New York, NY 10010. Equal Housing Opportunity.

Pr o f i l e

Frank McCourt’s new ballgame Recent deal-making by the ex-Dodgers owner and real estate mogul may be just the start of a larger Big Apple property portfolio With $550 million in hand, Boston real estate mogul Frank McCourt is looking to build up a property portfolio, and NYC is in his crosshairs.

By Katherine Clarke os Angeles Dodgers owner Frank McCourt’s face was splashed all over the L.A. newspapers in the summer of 2011. The Boston-born real estate mogul’s two very public fights — to retain ownership of the baseball team, and his messy and expensive divorce — made for eye-grabbing headlines. In June 2011, the Dodgers filed for bankruptcy, bringing to a head the battle between McCourt and Major League Baseball Commissioner Bud Selig. Selig vetoed a 17-year TV-rights deal between the Dodgers and Rupert Murdoch’s News Corp. worth about $3 billion, leaving McCourt exposed to the team’s mounting debt and struggling to meet his hefty payroll. Meanwhile, news outlets blamed the McCourts allegedly extravagant lifestyle — including their private jet and L.A. compound — for the team’s financial troubles.

30 January 2014 www.TheRealDeal.com

“Being able to hit that reset button and grow a business in exactly the way you want to grow it [is great]. When I built the business the first time, I didn’t have all the capital in the world, and I loved those times — but I love these more.” Frank M c Court, M c Court Partners “During that apocalyptic time, when everyone seemed to be piling on him … you’d never want to read the paper,” recalled Peter Wilhelm, former Dodgers CFO and a senior managing director at the McCourt Partners, the mogul’s real estate investment and development company. “It was as though this guy was the second coming of the devil.” Two years later, McCourt is making headlines for different reasons. In August, his real estate firm acquired a development site on Manhattan’s Far West Side for $167 million. That was more than triple the price paid for

the site in 2011 by the previous owners, a partnership between Sherwood Equities and Long Wharf Real Estate Partners. The deal is McCourt’s first major commercial transaction since the 2012 sale of the Dodgers for $2.15 billion — and his first-ever in New York. For McCourt, who long ago sold his Boston property, the real estate transaction marks a fresh start and the beginning of what he hopes will be a global expansion for his company centered on real estate, sports and media. McCourt Partners — a joint-venture between McCourt Global, a company

formed in 2007 by McCourt with his sons Drew and Travis, and financial services firm Guggenheim Partners, which now co-owns the Dodgers — is armed with more than $550 million in assets and capital. It’s recruited a team in New York and plans on making more strategic investments in Manhattan in the coming months, McCourt told The Real Deal. Sherwood CEO Jeffrey Katz said McCourt chose his first New York property wisely, adding that he was smart to get on the industry’s radar. “You come to New York, you want to have a presence. If you buy a mid-block

www.TheRealDeal.com JanuaryFERNANDEZ 2011 25 PHOTOGRAPH FOR THE REAL DEAL BY CHRISTIAN

Pr o f i l e infill site on the Upper East Side to build a 12-story apartment house, it’s hardly noticeable,” Katz said. “This will be very high-profile and will get him into the deal stream. People want to do business with people who are active.” Starting with a clean slate is a “great feeling,” McCourt said, speaking from his new 43rd-floor office at 888 Seventh Avenue, which has a sprawling view of Central Park. “Being able to hit that reset button and grow a business in exactly the way you want to grow it [is great.] When I built the business the first time, I didn’t have all the capital in the world, and I loved those times — but I love these more.”

lated an impressive collection of personal homes, including a $16 million Brookline mansion, a Cape Cod estate and a condo in the ski town of Vail, according to published reports.

late 1800s,” McCourt said.

The Dodgers years In the early years of his Dodgers ownership, McCourt and his wife, Jamie, were

Boston boy McCourt, 60, grew up in the Boston suburb of Watertown, the place that drew national attention during the manhunt for the Boston Marathon bombers. His family legacy: building and baseball. His grandfather was an owner of the Boston Braves, while his great grandfather, an immigrant from Northern Ireland, started the John McCourt Company, a road-building business, in 1893. The company eventually became a major public works contractor, building the road that was replaced by the Big Dig, the infamous Boston tunnel and highway project, and working on Logan Airport. McCourt’s brother Richard now heads McCourt Construction, an off-shoot of that company. “Most of the infrastructure in Boston we have touched more than one time over the course of 120 years,” McCourt said. “I knew from early on that I wanted to build things. I learned that at the knee of my dad. I used to love going to work with him and having him put me on a bulldozer or a front-end loader.” In the late 1970s, after graduating from Georgetown University, McCourt jumped into the Boston real estate game himself. In his most high-profile deal, he bought up several lots on an abandoned waterfront rail yard in the 1980s. For years, McCourt hyped the area as a new frontier for Boston development. But he didn’t end up developing it. Instead, he used the 24-acre site as collateral for a $145 million loan from News Corp. to buy the Dodgers — along with their stadium and 260 acres of Los Angeles land — for $421 million in 2004. McCourt would also be granted future media rights to the team as part of the deal, a valuable commodity which would allow him to make a deal with a TV network. Two years later, McCourt turned the Boston land over to News Corp. to satisfy the loan. News Corp. then sold it to developer John Hynes III and Morgan Stanley for $203.7 million. The site is now being turned into a $3 billion mixed-use project. McCourt profited handsomely in the meantime — reportedly pulling in around $86 million from deals made with the state for use of his land as a construction staging area during the Big Dig. He also accumu-

28 March 2012 www.TheRealDeal.com

356 10th Avenue, the vacant site where McCourt is planning to construct at 730,000-square-foot mixeduse building. Below, McCourt sold the L.A. Dodgers in 2012 for $2.15 billion. Inset, Major League Baseball Commissioner Bud Selig.

“The whole Dodgers saga is not the Frank McCourt I’ve seen. He’s cordial and he’s warm, but he’s tough when he needs to be. When he says no, it’s no.” Robert Ivanhoe, Greenberg Traurig “Where I think we were most effective with the actual land was cleaning it up and then methodically developing the narrative that this area could be the next great area of Boston, much like the Back Bay was in the

seen as saviors. The team had struggled on and off the field, sitting out the playoffs for most of the prior decade and reportedly losing around $50 million a year. Under McCourt, the team made it to

the postseason four times, and fans were willing to overlook increased ticket prices as a result of $150 million in improvements to Dodger Stadium. However, McCourt’s reputation in L.A. soon soured as reports emerged that he was struggling to pay the team’s $95 million payroll in the wake of Selig’s TV deal veto. With his divorce, ultimately the costliest in California’s history, playing out on the gossip pages, the press homed in on the lavish lifestyle of McCourt and his wife as the cause of the financial straits. McCourt maintains that it was the loss of the lucrative TV deal that threw the Dodgers into short-term financial disarray. Selig was quoted as saying the deal “would have the effect of mortgaging the future of the franchise to the long-term detriment of the club and its fans.” “I made decisions during the course of the eight years that I wouldn’t have made if I knew I was going to be blocked from making a $7 billion [media deal],” McCourt told TRD. In the end, McCourt sold the team, the stadium and the accompanying land for a record $2.15 billion to principals of Guggenheim, along with retired basketball star Magic Johnson, former Atlanta Braves and Washington Nationals President Stan Kasten and other investors. The deal laid the groundwork for McCourt’s real estate comeback. As part of the complex sale, Guggenheim put the 260 acres of land, plus an additional $400 million in equity, into a joint venture with McCourt. That joint venture, which purchased the Far West Side site, is now managed by McCourt, who receives a management fee (reportedly $5.5 million in year one). The profits arising from the use of the 260 acres of land by Dodger Stadium as a parking facility remain with the joint venture until the land is sold, at which point McCourt and Guggenheim will split the distribution evenly. Meanwhile, McCourt maintains the option of buying back a portion or portions of the 260 acres from the joint venture for sports-related enterprises at any time, and for an agreed upon price. McCourt’s role in the joint venture is to source and originate transactions, while Guggenheim vets and ultimately approves each deal. “We’ve got patient capital,” Wilhelm said of the fund. “It can be rescue capital, long-term capital, whatever-we-want-it-to-be capital. It’s almost every color of money.” Indisputably, McCourt has succeeded in creating a great deal of wealth out of notably few transactions. Some, such as his attorney Robert Ivanhoe, the head of real estate at law firm Greenberg Traurig, said that shows that he “has a measured and sober way of taking on risk.” But others described him as a poster Continued on page 104

www.TheRealDeal.com January 2014 31

REGULATING REAL ESTATE

U.S. housing values soar in 2013, boosting owners’ equity stake As housing market sees a record rebound, more than 3 million owners move to positive equity status By Kenneth R. Harney he biggest story in American real estate in 2013 hasn’t gotten the attention it deserves, so let’s shout this out: Homeowners’ net equity holdings soared by $2.2 trillion between the third quarter of 2012 and the third quarter of last year, according to new data collected by the Federal Reserve. This is a record rebound for a 12-month period. And it’s crucially important in personal financial terms for hundreds of thousands of owners who’ve been underwater on their mortgages for years. They now have options they didn’t have before: They can sell their homes and not have to bring money to the closing. They may be able to borrow against their equity to help pay for college tuitions, home improvements and other purposes. They may be able to refinance their mortgages without having to use a government-aided program. Home equity is the difference between the mortgage debt outstanding on a residence and the current market value of the home. If a house is worth $300,000 and the owners owe the bank $150,000 —

Logic, a real estate and mortgage data firm, estimated that 791,000 homes moved from negative to positive equity status during the third quarter of 2013 alone, and more than 3 million did so since the first nine months of last year. Though 6.4 million homes continue to be underwater on their mortgage debt — 13 percent of all homes with a mortgage — that is down from 7.2 million (nearly 15 percent) as recently as the end of the second quarter of this year. CoreLogic researchers found that among the states that experienced the most severe property devaluations during the bust and have recovered impressively, some continue to have persistent hangovers of negative equity. In Nevada, nearly a third of all homes are underwater, despite price gains. In Florida, nearly 29 percent are still in negative equity, and in Arizona it’s nearly 23 percent. In California, which suffered deep equity losses in non-coastal areas between 2007 and 2010, home values roared back in the past two years. Now the state has just a 13 percent negative equity rate —

Owners have now seen their equity stakes grow by more than $3.2 trillion from the post-bust low point in the first quarter of 2011. whether from a single mortgage or multiple loans — they have $150,000 in equity. If mortgage debt totals $350,000 on a $300,000 house, they have $50,000 in negative equity. Equity generally grows in several ways: Borrowers lower their debt by making payments to the lender, the value of the house increases because market conditions improve or they raise the home’s sales value by remodeling or upgrading it. Growing home equity not only signifies widespread recovery in household personal wealth, but it also provides an important boost for the ongoing economic recovery. Consumers who have a cushion of equity in their homes are more likely to spend money on goods and services than those who don’t. The latest Fed “flow of funds” calculations show that owners have now seen their equity stakes grow by more than $3.2 trillion from the post-bust low point in the first quarter of 2011. During the financial crisis of 2008–11, millions of American owners fell into negative equity positions as the sale value of their homes plummeted. With the recovery that took hold in 2012, values began to turn upward again — dramatically so in some of the hardest-hit areas where prices had fallen fastest. A new research study released this week by Core-

significantly lower than Ohio (18 percent), Michigan and Illinois (both 17.7 percent), Rhode Island (16.6 percent) and Maryland (15.6 percent). The states with the highest rates of homeowner equity: Texas and Alaska, where 96.1 percent of all owners with mortgages are in positive territory, Montana (95.8 percent), North Dakota (95.7 percent) and Wyoming (95.4 percent). Other findings from the CoreLogic study: — People with higher-priced homes are somewhat more likely to have positive equity than owners of lower-cost houses. While 92 percent of all mortgaged homes in the country valued at more than $200,000 have positive equity, 82 percent of homes valued at or below $200,000 do. — Though homeowner equity wealth increased rapidly in 2013, 10 million homeowners still have only modest equity stakes — less than 20 percent — and that puts them at risk should property values tumble again. But another bust is nowhere in sight, thanks to tougher underwriting and regulatory oversight. So whether you’re one of the recent arrivals to positive equity status, or you’ve enjoyed it all along, the new year looks encouraging. TRD

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GOVERNMENT BRIEFS Council backs plan for Coney Island amphitheater The City Council approved former Borough President Marty Markowitz’s plan to convert the landmarked 60,000-square-foot Childs Restaurant Building in Coney Island into a restaurant and 5,099seat music arena for use as a summer concert venue. The former beep said the project, dubbed the Seaside Park and Community Arts Center, will benefit the The Childs Building in Coney Island impoverished community by providing jobs and infrastructure upgrades. Opponents argued that the $50 million needed to transform the derelict building into an amphitheater would be better spent fixing existing problems such as chronic heat and power outages and storefronts shuttered since Hurricane Sandy. Construction should be completed by the end of summer 2015, and the theater should be operating in the summer 2016.

Court clears Silverstein in 9/11 collapse of 7 WTC A federal appeals court ruled last month that Larry Silverstein’s company could not be held responsible for the collapse of 7 World Trade Center after the twin towers were struck in the 9/11 terrorist attacks, the New York Daily News reported. A group of plaintiffs led by Con Edison and its insurance companies sued Silverstein Properties, arguing that the 47-story building fell because of structural deficiencies. The 2nd Circuit U.S. Court of Appeals in Manhattan ruled it is “simply incompatible with common sense and experience to hold that defendants were required to design and construct a building Larry Silverstein that would survive the events of Sept. 11, 2001.” After 7 WTC fell, it crushed a Con Ed power station below the building.

Fannie Mae, Freddie Mac fee hike put on hold A hike to certain fees charged by mortgage-finance giants Fannie Mae and Freddie Mac was put on hold by Met Watt, the new director of the firms’ regulator, the Federal Housing Finance Agency. The increases, set to take place in March, would be offset in most states by eliminating other fees, but lenders in New York, New Jersey, Connecticut and Florida were not going to see the offsets, which could lead to higher borrowing costs in those states. The states were missing out on the offsets because they have the longest foreclosure delays, which cause Fannie and Freddie to lose more money on repossessions. Watt told the Wall Street Journal he wanted to evaluate the impact on Fannie and Freddie’s risk exposure, the cost and availability of credit and other factors before going ahead with the hikes.

City Council OKs Bronx armory ice rink conversion The City Council gave the go-ahead to a project to convert a long-vacant armory in the Bronx into the Kingsbridge National Ice Center. Approval of the $320 million project was secured after City Council Member Fernando Cabrera switched his stance at the 11th hour and voted for it, according to the New York Times. The 750,000-squarefoot facility will eventually include nine ice-skating rinks, a 5,000-seat arena, and 50,000 square feet of community space. Kingsbridge National Ice Center The project is being developed by KNIC Partners, which counts former Ranger star Mark Messier as an executive. Borough President Ruben Diaz Jr. was quoted in Crain’s saying it was the first time a developer of a city project has agreed to provide “wall-to-wall living wage jobs for local workers,” along with opportunities for minority- and women-owned businesses, free ice time for local schools and other programs that benefit the community. Compiled by Sanna Chu

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Retail

he genie is long out of the bottle on the money-making potential of New York City’s white-hot retail market. But what better time to assess the state of the market than right after the sector’s crucial holiday shopping

season? Plus, investors, brokers and retailers are just coming off the International Council of Shopping Centers’ New York National Conference, which The Real Deal live blogged from last month. At the event, Michael O’Neill, a retail broker with Cushman & Wakefield, told TRD that retail brokers are being thrust into the spotlight, as the value of retail has become more of a driving factor in major office building acquisitions. “Five years ago, retail was an afterthought,” he said. “It was where you put the services for the office tenants. Now retail has become the asset of choice for major institutional investors.” This month, TRD looked at the players, firms and deals at the top of the New York City retail game. First we looked at the tight-knit group of Syrian Jewish retail investors — including Jeff Sutton, Joe Sitt and Stanley Chera — who are making the most aggressive retail plays in Manhattan today. The interwoven community of investors, many of whom are related to each other and working on deals together, make headlines almost daily. But they each have different business models and geographic areas they specialize in when it comes to their retail investments. We examined those models and how much revenue each of their firms brings in annually. Then we looked at the top retail brokerages in the city. While other brokerages in the city’s commercial sector have consolidated, it seems more and more companies are launching retail leasing divisions. Eastern Consolidated, which has been doing investment sales, just launched a retail division late last year. In addition, some firms, like Massey Knakal, which started a retail leasing arm a few years ago, have now cracked TRD’s ranking for the first time. Next, we checked in with a project that is going to transform the West Side of Manhattan: Hudson Yards. The 26-acre mixedused mega-development will include about 750,000 square feet of pricey retail space. The Related Companies, which is building the site, told TRD it will formally start construction and marketing on the retail space this month. In advance of that milestone, we looked at the kinds of tenants and rents Related is shooting for and its strategy for making that happen. Finally, we examined the top 20 retail deals in Manhattan for 2013. The biggest was H&M’s nearly 63,000-square-foot lease at the Herald Center at 34th Street and Sixth Avenue. The new store will be H&M’s largest in the city. Find out who else made the cut.

36: The Syrian retail touch 38: It’s getting hot in here: The top brokerages in NYC’s sizzling retail sector 40: Hudson Yards retail gets underway 42: Retail’s ‘crystal’ ceiling: The top deals of 2013 34 January 2014 www.TheRealDeal.com

www.TheRealDeal.com January 2014 35

Retail

The Syrian retail touch An inside look at the Syrian Jewish investors dominating NYC retail — from Sutton to Sitt, including how much revenue they’re pulling in

By Adam Pincus f you trace the origins of the most aggressive retail deals in the last dozen years in Manhattan’s high-profile shopping districts, most lead back to Brooklyn. On Upper Fifth Avenue in 2002, American Girl Place transformed a stodgy building into a retail destination. In Times Square in 2007, American Eagle Outfitters struck a record $300 million lease. Then three years later, and several blocks north that was matched by Uniqlo’s lease at 666 Fifth Avenue. And more recently, in May, luxury retailer Valentino inked a deal at 693 Fifth Avenue, where despite its small floor plates, it broke through the $3,000-per-square-foot barrier. Each of these deals, along with other record breakers, has one thing in common: a member of the tight-knit Syrian Jewish community had an ownership stake in the property. The leaders of the community — including Jeff Sutton, Joe Sitt and Stanley Chera — make headlines in the real estate press almost daily and have made fortunes for themselves and others. They are the stars that a younger generation of investors is now emulating. They are the landlords that rival companies complain are paying too much for properties, and are making Fifth Avenue look like just another mall. The Syrian Jewish community, which informally refers to itself as SYs, is a major owner of apparel and other retail companies. The interwoven community of investors, many of whom are related to each other, sometimes work on deals together, as well. Yet despite the community’s Brooklyn hub — many of its members live around Ocean Parkway in Flatbush and Gravesend — and their seaside enclave in Deal, N.J., its members employ remarkably different strategies for creating wealth. Indeed, some buy and hold, some reposition and sell, and some buy and flip. A few have also turned to earning brokerage or management fees. And they all tap partners and investors in different ways. To be sure, not every market-making retail deal is in a property owned by a Syrian. But in recent years, the Syrian Jewish retail community has dominated. The SYs, which first settled in New York in the early 20th century, have been the most aggressive Manhattan players in the last 10 years, insiders say. And during that time, Manhattan retail has exploded, with average asking rents in some districts doubling and even tripling or more. In 2001, asking rents on Upper Fifth Avenue were $700 per 36 January 2014 www.TheRealDeal.com

TRD examined the structure of their firms, their business strategies and their assets, and, in a firstever analysis, estimated each firm’s Manhattan retail revenue. square foot, according to data from Cushman & Wakefield. In July, Prada renewed its lease at 724 Fifth Avenue for about$4,000 a square foot on the ground floor — more than five times that. Insiders credit the community’s success to its deep understanding of the retail business. “I think there is a connection through being able to speak their language,” said Ralph Tawil, president of Centurion Realty and an SY. “[Retailers] come out of a meeting surprised about how much insight you have in their business, and that puts you on a separate playing field.” Even as the community is viewed with respect, there are critics who complain some SYs use the courts to tie up deals. And within the community, as with any band of brothers, there are rivalries. But for every complaint, there are dozens of partners, including major real estate and finance players like SL Green Realty, the Carlyle Group, Lloyd Goldman’s BLDG Management, and Oxford Properties Group who’ve gotten a piece of the action on some of the aggressive SY deals. In addition, there is a farm team of younger SY investors, including Jack Terzi, who founded JTRE in 2008, now beginning to amass portfolios. They closely watch these senior players, like rookie basketball recruits once watched Michael Jordan or Kareem Abdul-Jabbar glide past opponents to the basket. This month, The Real Deal looked at some of the big players in the SY community, examining the structure of their firms, their business strategies and their assets. In addition, TRD estimated each firm’s Manhattan retail revenue through a first-ever analysis of income from 2012 tax appeal records compiled by Genesis Computer Consulting, as well as city tax records, industry sources and news reports. Most firms declined to comment or provide any financial information, and TRD was able to obtain more updated lease information for some owners than for others. Nonetheless,

below is a first-ever snapshot of where these big retail players stand.

Investor: Jeff Sutton Firm: Wharton Properties Manhattan retail revenue: $220M

eff Sutton, 53, is the undisputed king of the hill in the retail sector. He has amassed a fortune with a net value of about $3 billion in New York City retail.

Jeff Sutton, who has amassed nearly $3 billion in New York City retail assets

Jeff Sutton’s 2002 American Girl Place deal at 609 Fifth Avenue turned a stodgy building into a retail destination.

Of his 100-plus properties, 51 are located in Manhattan. Those include 717 and 724 Fifth Avenue, which are home to Armani and Prada, respectively, and combined are worth more than $1 billion. Sutton typically owns 100 percent of his properties, although he has joint ventures, for example with SL Green on several major buildings. Sutton began his real estate career after graduating from the Wharton School of the University of Pennsylvania in 1981. He’s employed a similar business model since he began investing in the late 1980s, when he would buy retail leases in the Bronx and then find a tenant to pay him more than the current rent. The difference, of course, was his profit. His primary strategy is to buy, add value and then hold, which is unlike some others investors who sell after upgrading their properties. In his building buys with SL Green, the REIT typically puts up all (or most) of the equity. Then Sutton brings in a retailer, often in a creative fashion, like he did at 1552 Broadway, where the partners paid the over-market price of $136.6 million. Sutton then struck a deal with Newmark Holdings at the adjacent 1560 Broadway to convert office space and less-valuable side street retail to highly coveted retail space with Broadway-grade rents. Then he lured in Express as a high-paying tenant, thus earning his stake in the deal. In addition, Sutton and SL Green generally structure performance benchmarks that provide for Sutton to purchase SL Green’s stake once they are hit. Sutton’s Manhattan retail properties yield an estimated $220 million per year, far more than any others ranked here, TRD’s analysis found. (That figure could be as much as $254 million, depending on how revenue from his leases is counted.) Sutton’s Wharton Properties, along with its affiliated brokerage arm NYC Prime Realty, is a small operation, with fewer than a dozen employees located at 500 Fifth Avenue.

Investor: Bobby Cayre Firm: Aurora Capital Associates Manhattan retail revenue: $74M

n the 1980s, brothers Stanley, Joseph and Kenneth Cayre, made the family’s fortune through their company GoodTimes Entertainment, which produced and sold videos to retail giant Wal-Mart. That fortune was used to build the family’s real estate business.

Retail Stanley’s son Robert “Bobby” Cayre, followed in his family’s entrepreneurial footsteps and launched Aurora Capital Associates in 2001, in close partnership with his uncle, Alex Adjmi, who is also an SY and is in his 50s. (Bobby’s family now owns a major apparel firm, the Cayre Group, which Aurora shares office space with at 1407 Broadway.) Aurora has stakes in at least two-dozen properties in Manhattan, Brooklyn and the Bronx, city property records show, as well as dozens more nationwide. The 17 Manhattan retail properties TRD identified generate annual revenue of about $74 million. Insiders said most of the properties are co-owned with Adjmi, who with his brothers runs A&H Acquisitions. Cayre, who’s in his mid-30s, often uses a heavy value-add business model. He typically buys underperforming properties and repositions them through major construction. For example, in partnership with the Adjmi family and the Sigfeld Group, Aurora purchased a development site at 301 West 125th Street in Harlem, and constructed a 100,000-squarefoot shopping center with DSW as a major tenant, that opened in 2013. Along with the Adjmis, Aurora is also constructing 242 Bedford Avenue in Williamsburg, which is slated to open this year and to be anchored by Whole Foods. The two companies operate a construction arm together that’s headquartered at 1412 Broadway and has about 20 employees, according to sources. “What is little known about Aurora is the fact that we have over 1.5 million square feet of ground-up construction in various stages of development,” said Jared Epstein, a vice president at Aurora. “We have quickly become one of the largest commercial developers in [New York].” Aurora’s other properties are home to major retailers including Victoria’s Secret, Hollister and Levi’s. The company, which has fewer than a dozen employees, co-owns 21-27 Ninth Avenue in the Meatpacking District, where the cosmetic chain Sephora has a large store, and the restaurant Catch is above. Next door, at 9-19 Ninth Avenue, the firm is partnered with William Gottlieb Real Estate and is reconfiguring the retail long occupied by the restaurant Pastis.

Investor: Joe Sitt Firm: Thor Equities Manhattan retail revenue: $51M

oe Sitt, 49, has gone the farthest, fastest in terms of the breadth of his business. He started as many other Syrians did, in the apparel business. His father Jack Sitt was a wholesaler with Baby Togs, selling children’s clothing to Wal-Mart and others. The younger Sitt started in his 20s, launching the urban brand Ashley Stewart. But by 2000 he had sold most of his interest in that business to focus on real estate. Thor Equities, which Sitt founded in 1986 and is now CEO of, has grown rapidly in the last decade. It is now a global property and brokerage business with investors and assets worldwide, based in 25 West 39th Street. Photograph of bobby cayre by PATRICKMCMULLAN.COM

Bobby Cayre, the head of Aurora Capital Associates, with his wife

Stanley Chera’s Crown has gotten more aggressive in the last few years.

Crown was part of the team that sold the retail at the St. Regis Hotel for $380 million three years after buying it for $117 million.

Joe Sitt, whose firm Thor Equities is a major owner on Lower Fifth Avenue

Despite the community’s tight ties, its members employ remarkably different strategies. Some buy and hold, some reposition and sell, and some buy and flip. A few have also turned to earning brokerage or management fees. And they all tap partners and investors in myriad ways. At 9-19 Ninth Avenue, Aurora and its partner are reconfiguring the retail long occupied by the restaurant Pastis.

In July, Prada renewed its lease at Sutton’s 724 Fifth Avenue for $4,000 a square foot on the ground floor.

While all of the other companies on this list are small operations or family run, Thor has expanded far beyond its local roots, and is now owned by a wider group of partners who, other than Sitt, are not connected to the SY community at all. In fact, the majority of his partners are not even Jewish, according to sources. In addition, Thor is the most institutional of the firms on TRD’s list. The company owns a stake in at least 44 New York City properties, according to its website, with the bulk of its properties concentrated on Fifth Avenue and in Soho in Manhattan. The properties bring in an estimated $51 million annually, according to TRD’s analysis. However several of Thor’s largest assets, including 837 Washington Street in the Meatpacking District and 520 Fifth Avenue, are under redevelopment, and are currently earning no income. Thor’s business model offers a direct contrast to Sutton’s. Indeed, while Thor does hold and manage properties, it’s more active in development and sells more frequently than Sutton. That’s because Thor’s Urban Property Funds has backing from institutional investors — including pension funds, investment banks, college endowments, and foundations — that typically want to sell assets within five or seven years. Thor also operates a brokerage division and has expanded into residential development. Thor occasionally unloads a building before it’s executed a specific business plan, but after it’s appreciated in value substantially. For example, at 129 West 29th Street, it bought for $26 million in 2007 and sold in 2012 for $54 million. So far the firm has kept away from the center of Times Square, but Sitt announced over the summer that the company would buy the retail at the Milford Plaza at 700 Eighth Avenue on the edge of that district for $65 million. And in the past three years, Sitt’s been the city’s most aggressive buyer on Lower Fifth Avenue, which has seen a nearly 100 percent increase in asking rents. In addition to 520 Fifth, Thor is in contract to buy 562 and 564 Fifth and has stakes in 445, 590 and 597 Fifth, which are all currently listed with available space, suggesting the company is looking to cash in on the rising rents. One of Thor’s most notable deals was a lease last year at 693 Fifth Avenue, known as the Takashimaya building. It paid an eye-popping $142 million for the 20-story tower in 2010, and started shopping the retail space while it was occupied by a temporary tenant. Sitt aimed to get at least $2,000 per square foot at a time when asking rents had barely passed that number. Defying skeptics, he sat tight, and finally landed Valentino in May, which is paying a reported $16 million per year, or upwards of $2,600 per square foot on the ground floor. Thor, which insiders say employs hundreds of people, is also a significant owner and developer in Chicago, London, Paris, Mexico City, and other locations. Continued on page 108

www.TheRealDeal.com January 2014 37

Retail

It’s getting hot (and crowded) in here A look at the top brokerages in NYC’s sizzling retail sector — and the new firms getting into the fray

By Adam Pincus ven as firms consolidate in New York City’s commercial brokerage industry, the subset of Manhattan retail is growing increasingly fractured as more players try to get a piece of the ever-hot market sector. Indeed, The Real Deal identified more than 50 companies actively involved in third-party retail brokerage in Manhattan — some with deep brokerage roots here, and others that have only launched in the last few years. “Retail is the hottest sector,” said Jeffrey Roseman executive vice president at Newmark Grubb Knight Frank Retail. That strength is encouraging firms to open retail divisions and individuals to join the fray. “There are a lot of people chasing it, like in any business or industry when it is a good time,” he said. This month, to get a handle on the rapidly changing Manhattan sector, TRD ranked the big retail firms by number of square feet brokered. To do so, we compiled a list of more than 850 new and renewal lease transactions in Manhattan from 125th Street and south that were completed in 2013. The deals totaled nearly 3.5 million square feet. With no reliable public or industry-wide database of retail leases, we assembled data from CoStar Group and CompStak as well as from firms and news reports. As a result, firms that did not cooperate were likely undercounted, and some yet-to-be publicly announced deals at destinations like the World Trade Center and Brookfield Place were not included. Nonetheless, TRD’s exclusive figures, which we last compiled in 2012 as the retail sector was ramping up, showed that in 2013 Newmark Grubb Knight Frank remained at the top in terms of square footage leased, with more than 696,000 square feet and 113 deals. The firm was followed by RKF, which had more deals (134), but only 591,412 square feet. Following on the heels of those brokerages were CBRE Group (nearly 394,000 square feet), Cushman & Wakefield (nearly 353,000 square feet), Ripco Real Estate (about 261,000 square feet) and Winick Realty Group (about 231,000 square feet). None of the top six firms officially cooperated; however, TRD was able to identify more of Newmark and RKF’s deals through industry sources. While the top of the list looks similar to TRD’s last retail ranking, a lot has changed since 2012.

Newmark Grubb Knight Frank Retail’s Jeffrey Roseman, left, and Jason Pruger in front of 101 Seventh Avenue in Chelsea. Roseman represented high-end department store Barneys in the lease it inked there last month.

Top Manhattan retail brokerages for 2013 Rank

Firm

Total Deals

Total Sq. Ft.

Newmark Grubb Knight Frank

113

696,191

RKF

134

591,412

CBRE Group

393,684

Cushman & Wakefield

352,999

Ripco Real Estate

261,038

Winick Realty Group

231,151

Sinvin Real Estate

173,290

Douglas Elliman

131,593

Crown Retail Services

123,750

SRS Real Estate

110,566

SKH Realty

110,090

Lansco

105,162

Lee & Associates

98,632

Charter Realty & Development

97,857

SCG Retail

92,542

Massey Knakal Realty Services

91,374

New on the scene

ABS Partners Real Estate

78,928

A number of new players in the New York retail sector, including some who were just getting off the ground in Manhattan in 2012, have now cracked the top firms list. Those brokerages include Crown Retail Services, Massey Knakal Realty Services and Charter Realty & Development.

McDevitt Company

77,730

NYCRS

64,411

Tarter Stats O’Toole

44,265

38 January 2014 www.TheRealDeal.com

Source: TRD conducted an analysis of new and renewal leases signed in 2013 on Manhattan properties on 125th Street and south. The analysis used data from CoStar, CompStak, TRD’s database, industry sources and the firms, totaling 850 deals. Some firms did not participate. Companies who repped both sides of a deal were given credit for each side on the below charts, but only once here.

Crown, the brokerage arm of the Chera family’s Crown Acquisitions, did 12 deals in the borough south of 125th Street, totaling more than 123,000 square feet and ranking ninth on TRD’s list. The company was founded in January 2010 (see related story on page 36). Meanwhile, Lee & Associates, which launched in Manhattan in 2011, had nearly 99,000 square feet and 35 deals, placing it 13th in the ranking. Charter Realty & Development, which is based in Connecticut, completed about 98,000 square feet of transaction through seven deals, ranking 14th. (It handled a handful of major deals for discount gym Blink Fitness.) In addition, Massey Knakal — a major player in the investment sales arena, which only entered the retail fray in January 2011 — has carved out a strong book of business in only two short years. The company’s retail division, which is headed by Ben Fox, brokered 56 deals in 2013, totaling 91,347 square feet and placing it 16th on our ranking. Other firms did not make the cut in 2013, but industry sources said they deserve to be watched in 2014. For example, TRD did not identify any Manhattan deals completed last year by Dallas-based Open Realty Advisors, which represents tech giant Apple, but retail sources said they expect the firm to sign a deal for a Brooklyn location this year. Also, long-time investment sales firm Eastern Consolidated launched a retail leasing division at the end of 2013. That company just lured James Famularo, an active broker with NY Commercial Realty Services, to help jump-start the new leasing division along with several other leasing brokers. A few smaller firms that did not make the list each completed more than 30,000 square feet of deals, including Midtown-based Kassin Sabbagh Realty and PD Properties

‘Healthy’ market One major theme for last year was health and fitness. Indeed, several of 2013’s largest deals were inked by health clubs (see related story on page 42), including: three from Blink Fitness; four from Planet Fitness, and deals from New York Health & Racquet Club, Equinox and others. In fact, gym deals accounted for more than 281,000 square feet of the top 40 deals, which totaled about 1 million square feet. “The health and fitness section was enormously active this past year, and I see that continuing into 2014,” said Peter Levine, a retail broker with Charter Realty & Development, who represented Blink in its three Manhattan leases. “You will probably see a greater numbers of deals [this] year.” Since health clubs can only open in areas with special zoning, there is often more than one gym vying for the same spot, Levine said. Planet Fitness, a chain of discount gyms www.TheRealDeal.com January 2014 35 PHOTOGRAPH FOR THE REAL DEAL BY MAX DWORKIN

Retail

Top Manhattan retail brokerages, landlord side Rank

Firm

Landlord Deals

Landlord Sq. Ft.

RKF

376,934

Newmark Grubb Knight Frank

347,964

CBRE Group

256,342

Ripco Real Estate

215,966

Cushman & Wakefield

155,009

Winick Realty Group

125,044

Sinvin Real Estate

120,074

SKH Realty

110,090

Douglas Elliman

106,359

SRS Real Estate

101,366

Massey Knakal Realty Services

91,374

ABS Partners Real Estate

74,928

Lansco

47,172

Tarter Stats O’Toole

44,265

NYCRS

37,350

Lee & Associates

26,965

Crown Retail Services

10,000

18 (tie)

Charter Realty & Development

18 (tie)

SCG Retail

18 (tie)

McDevitt Company

Source: See primary chart on page 38. Firms were first ranked on primary chart, and then by landlord deals.

Top Manhattan retail brokerages, tenant side Rank

Firm

TENANT Deals

RKF’s Joshua Strauss and Taryn Talmadge in front of 583 Broadway in Soho, where they represented the landlord in a lease with sport-clothing firm Under Armour

TENANT Sq. Ft.

Newmark Grubb Knight Frank

382,156

RKF

272,724

Cushman & Wakefield

199,827

CBRE Group

137,342

Crown Retail Services

123,750

Winick Realty Group

110,752

SKH Realty

110,090

Charter Realty & Development

97,857

Sinvin Real Estate

97,595

SCG Retail

92,542

Massey Knakal’s head of retail leasing, Ben Fox, center, along with other retail brokers from the firm

Lee & Associates

84,666

McDevitt Company

77,730

Ripco

65,072

Lansco

57,990

NYCRS

55,311

ABS Partners Real Estate

36,522

Douglas Elliman

35,184

SRS Real Estate

12,052

19 (tie)

Massey Knakal Realty Services

19 (tie)

Tarter Stats O’Toole

represented by Crown, signed four deals in Manhattan south of 125th Street, for a total of more than 89,000 square feet, including at 423 West 55th Street in Hell’s Kitchen and at 25 Broadway Downtown. Organic, vegetarian and vegan restaurants were also hot tenants in 2013, insiders said — although those firms took smaller spaces. For example, Lyfe Kitchen, a health-food restaurant that focuses on sustainable and locally sourced food, inked a deal in January for just over 3,400 square feet at the base of Boston Properties’ new tower at 250 West 55th Street. Other health-food chains that expanded in New York last year were Dig

Source: See primary chart on page 38. Firms were first ranked on primary chart, and then by tenant deals.

PHOTOGRAPH OF2014 STRAUSS AND TALMADGE FOR THE REAL DEAL BY CHRISTIAN FERNANDEZ 34 January www.TheRealDeal.com

Inn, Chickpea, and Little Beets. Meanwhile, Santa Monica, Calif.-based Veggie Grill is hunting for space here, insiders said. Full-service healthy restaurants are also expanding. For example, the popular East Village vegetarian restaurant Dirt Candy inked a lease for a larger space, at 86 Allen Street, for about 2,600 square feet. Some said that both these trendy healthful retailers and the new retail brokers would not all survive. “But like anything else — like the [frozen] yogurt business or the hamburger business — it will sort of condense, and the cream always rises,” Newmark’s Roseman said. TRD

www.TheRealDeal.com January 2014 39

Retail

Hudson Yards retail gets underway Related’s sprawling plan for the Far West Side hits new milestones, with construction and marketing of store space set to begin this month

By Guelda Voien bout 750,000 square feet of pricey retail space is hitting the market in the next few weeks, as the Related Companies formally starts its search for tenants at its Hudson Yards project. A year after construction started on Manhattan’s Far West Side, and with two major office tenants signed on to the gargantuan project — purse purveyor Coach and cosmetics giant L’Oreal — Related declined to say whether any retail tenants are signed on other than the already-touted Fairway Market. But brokers say Related, which is partnered with Oxford Properties on the $4 billion venture, is in talks for an anchor tenant such as a department store, and possibly a 60,000- to 80,000-square-foot movie theater. And Related said construction and marketing will begin on the retail space this month. The goal is for the pricing and mix of retailers to resemble those at Related’s other Manhattan retail behemoth, the Time Warner Center, brokers and Related said. Like Time Warner, which transformed Columbus Circle from an open-air head shop to a glassy mall when it debuted in 2003, brokers say Related wants Hudson Yards to do the same for the Far West Side. But replicating that feat on the desolate block between 10th and 11th avenues is a much bigger challenge. Some say even Related, perhaps the most respected developer of shopping centers of this scale and type “in the western hemisphere,” as one broker put it, may be in over its head. Forbes magazine recently dubbed Hudson Yards “the largest real estate project in U.S. history.” “It’s a push,” said one retail broker who asked not to be identified. He noted that the most popular New York City shopping corridors — like Fifth and Madison avenues — have remained the same for years. “It’s only a couple [of areas], like the Meatpacking District, that have arrived in recent years,” he said. The broker was bullish on the residential and office aspects of the Hudson Yards project, but wasn’t sure tourists would make it all the way to 10th Avenue to shop, even though the megaproject sits in between the final section of the High Line and the new extension of the 7 subway line. “Obviously, it’s a bit early,” to herald the area a new shopping destination, said Jeffrey Roseman, a broker with Newmark Grubb Knight Frank, who said he was approached by Related to look at the retail spaces. Roseman has represented retailers such as Urban Outfitters and Kenneth

40 January 2014 www.TheRealDeal.com

Cole in the past, but he declined to say which tenants he was approached about. Of course, Hudson Yards is not the only ambitious retail project on the horizon. Both Brookfield Place and the World Trade Center complex are aiming to bring more luxury retail to Lower Manhattan and have begun leasing efforts in the last year or two. And developer Young Woo is at work on his SuperPier, a 560,000-square-foot retail complex protruding into the Hudson River from 11th Avenue at 15th Street, near Chelsea Piers. He hopes to bring together an international assortment of artisans in a $200 million floating “curated” mall.

A diverse tenant mix

Ten and 30 Hudson Yards will flank a 750,000-square-foot retail complex that the developer Related is calling a “podium.” A lounge featuring cocktails selling for up to $30 each is planned for its rooftop.

Kenneth Himmel and R. Webber Hudson are leading the leasing effort for the Hudson Yards retail space.

Related has adopted an “if you build it, they will come,” approach, brokers said. A recent exhibit at the Time Warner Center — where renderings of some of the 17 planned Hudson Yards towers are on display — marked the first step in Related’s push to publicize the space, which will not be complete until 2018. “Everybody is doing a cursory look [at the Hudson Yards retail], but I think until the anchors are announced, you won’t be hearing any household names,” Roseman said. One major possibility Related is supposedly considering as the anchor tenant is fine art and antiques auction house Sotheby’s, which is also parent to the residential real estate brokerage of the same name, said Faith Hope Consolo, head of Douglas Elliman’s retail division. Sotheby’s would take retail, office and showroom space if a deal can be worked out, Consolo said. The auction house put its Upper East Side headquarters, at 1334 York Avenue, on the market in the fall. Roseman, who is not working with Sotheby’s, has also heard that “Sotheby’s is in the market.” A Sotheby’s representative told TRD, “Sotheby’s continues to explore real estate options, but no decisions have been made.” Related’s Kenneth Himmel as well as R. Webber Hudson, who seems aptly named, are spearheading the retail leasing effort for Hudson Yards. They have not signed an exclusive with any brokerage to represent them, but they have not ruled out the possibility, Hudson told TRD. No one could offer specifics, but a number of brokers said the Hudson Yards team is actively chatting with the entire brokerage community about the retail — though not necessarily about hiring them. Most important to Related is that Hudson Yards achieves a diverse mix of retail tenants, said Joanna Rose, a spokesperson for the developer. “We don’t want

PHOTOGRAPH OF HIMMEL AND HUDSON FOR THE REAL DEAL BY January CHRISTIAN2013 FERNANDEZ www.TheRealDeal.com 00

Retail [anything] to be just high-end or just mass-market,” she said. “We will have a great representation of global luxury, contemporary fashion,” Hudson added. “But we are looking at being very accessible in our offering.” The tenants are expected to trend toward things suited to the target demographics, of course — “very health-conscious and a lot of women,” said Brad Schwarz, a broker with the commercial firm Lee & Associates, who said he has worked in the neighborhood, but not yet talked with Related in connection with the Hudson Yards space. Richard Hodos of CBRE Group said he spoke with Related on behalf of more than one client. While he would not specify which ones, he said he represents Limited Brands, which owns Henri Bendel, Bath & Body Works and Victoria’s Secret, as well as GCD Consultants, the retail real estate advisers for L.L. Bean and fashion designer Tory Burch. “If you look at Time Warner Center, I think all of those tenants are extremely successful,” Hodos said. “It’s likely you would see most of those tenants at Hudson Yards as well.” But there is a catch. The sales agreement for Coach’s 740,000-square-foot office condominium stipulates that none of its direct competitors take space in the megaproject’s retail or office portions, as the Wall Street Journal reported in September. That would mean no J. Crew, which has a large second-floor space at the Time Warner Center, according to the Journal, as well as no Polo Ralph Lauren or Burberry — and likely no Henri Bendel.

Fairway Market is the only retailer that’s been identified as signing a lease at Hudson Yards so far.

Big numbers The bulk of the retail that doesn’t go to an anchor will fill out the balance of the seven floors of what Related is calling a “podium,” between 10 and 30 Hudson Yards, located along 10th Avenue between 30th and 33rd streets. Construction has started on 10, but work on 30 has not begun, Rose said. Those spaces will go to smaller, non-anchor retailers looking for 30,000 square feet or less, a source said. CBRE’s Hodos estimated the total retail for non-anchor tenants in the podium at about 290,000 square feet, but Related would not confirm that figure, insisting that plans are still up in the air. Related executives said the fashion retailers in the podium would be “sorted by sensibility,” meaning there would be an area where luxury retailers are clustered, and perhaps one for retailers focused on teens. Dining options, which will also be in the podium, are likewise expected to run the gamut. A concept modeled after celebrity chef Mario Batali’s massive Flatiron District Italian market Eataly, called the Kitchens, will offer prepared foods from different providers, Rose said. At

44 November 2012 www.TheRealDeal.com

A seven-story podium will have retail that’s grouped together by style.

Hudson Yards will feature retail space for shops and a variety of restaurants along 10th Avenue.

least one very upscale restaurant is also being sought — think “Bouchon or Per Se,” she said — although no leases have been signed. Hudson said the food and beverage offerings would focus on local favorites, but wouldn’t name which high-profile New York chefs he has spoken with, beyond a confident, “All of them.” Hodos said he believed Related to be mulling a concept like Stone Rose — a swanky lounge at the Time Warner Center — that would take about 75,000 square feet, probably at the top of the podium. Hodos estimated the dining terrace, an outdoor space at the podium, and the Kitchens would take 36,000 square feet or so. In addition, there will be retail in the base of the Coach tower, at the southwest corner of 30th Street and 10th Avenue, but only about 10,000 square feet, Rose said. Under the High Line, along the walk up 10th Avenue to the shiny shopping center, will be Fairway, occupying 48,000 square feet, Hudson said. Although the space is expected to be lucrative, whoever leases there will have to shell out big money. “They are going to push the envelope as much as they can with rents,” Hodos said. Rents on par with those at the Time Warner Center would put the ask at $800 to $1,200 per square foot, a hefty sum for 10th Avenue, Hodos said. Lee & Associates’ Schwarz said retail rents at nearby Silver Towers are about “$60 to $70 a square foot” while rents for retail in the World Trade Center reportedly run between $500 and $600 per square foot. “This is an expensive building, so there will be some big numbers to hit,” Hudson admitted. And, Hudson said, prospective retail tenants should expect to participate in a “percentage rent,” a common lease provision whereby a retailer gives a percentage of sales revenue over a certain amount to the landlord. While certain retailers — famously Apple — refuse such deals, most retailers looking at Hudson Yards know that Related generally requires percentage rent in its deals. Hudson predicted the center would probably attract between 20 million and 25 million visitors a year. In 2011, Crain’s reported that the average tenant at the Time Warner Center was producing $1,600 per square foot per year for Related — the national average under such an agreement is $1,200, it said. But if Related achieves its vision, the entire Far West Side of Manhattan will become “a city unto itself,” Schwarz said. Hodos said he believes Related will be phenomenally successful, as they have been with many retail projects across the nation. “It’s like if Steven Spielberg calls,” and wants you to work on his film, Hodos said. “You just say, ‘Where do I sign?’” TRD

www.TheRealDeal.com January 2014 41

Retail

Retail’s ‘crystal ceiling’ International clothing brands, gyms and high-end supermarkets make up top 20 leases as rents soar

W By Guelda Voien

ith record numbers of residents and tourists filling the streets, New York City retail rents cracked what might be called the “crystal ceiling” in 2013, when asking rents for the city’s most sought after strip, Upper Fifth Avenue, topped a median price of $3,000 per square foot. New York remained the second priciest market in the world for retail rents last year, trailing only Hong Kong, where data from CBRE Group show rents topping over $4,000 per square foot in the poshest areas. The growing value of New York retail can be seen in the Carlyle Group’s high-profile sale in June of 650 Madison Avenue to Crown Acquisitions and Highgate Holdings for $1.3 billion, or a record per-square-foot price of $2,166, according to CBRE. The deal hinged

from Cushman & Wakefield. By August, the While none of 2013’s leases matched median had breached the $3,000-a-squareNordstrom’s announcement in 2012 that it foot marker on Fifth, according to reports. Madison, asking prices shot to a median would lease 285,000 square feet in Mid- On $1,351 per square foot from $1,098 last year. While many factors drove rents, certain town, last year saw two retailers ink deals types of tenants were clear stars in 2013’s for their largest New York City stores to date, retail landscape. International clothing brands like H&M, and four deals over 50,000 square feet. Prada and Hermès joined domestic clothiers mostly on the prime retail frontage along Madison Avenue, between 59th and 60th streets — not the tower full of prestigious office space looming above it, executives at Crown told The Real Deal at the time. “We think the retail [alone] will be valued at $1 billion,” within five years, said Haim Chera, a principal with Crown. Manhattan retail rents continued to surge last year, as low crime drew more tourists,

redevelopment boosted neighborhoods and a slew of major global brands sought to hang their shingles on Fifth and Madison avenues. With upwards of 54 million visitors spending nearly $40 billion in the city last year, rents on Fifth between 49th and 60th streets shot up 33.5 percent, to a median ask of $2,760 per square foot in the April-to-June period, from $2,067 in 2012’s second quarter, according to the most recent data available

like Ralph Lauren and Urban Outfitters as some of the biggest consumers of Manhattan space. Discount gyms also saw a boost in activity, with Blink Fitness and Planet Fitness taking large spaces, while stalwart full-service gyms like Equinox were also active. And grocery stores like Fairway and Whole Foods helped fill out the top spots for the year’s big retail leases. Continued on page 106

Manhattan’s biggest retail leases in 2013 Ranking

Tenant

Total SF

Address

Landlord Brokerage

Tenant Rep Company

H&M

62,923

Herald Center

CBRE Group

Cushman & Wakefield

Room & Board

60,919

249 West 17th Street

Newmark Grubb Knight Frank

CBRE Group, Kampler Advisory Group & Tegra Group

Urban Outfitters

59,301

1333 Broadway

CBRE Group

McDevitt Company

Barneys New York

57,000

101 Seventh Avenue

n/a

Newmark Grubb Knight Frank

Fairway Supermarket

52,252

255 Greenwich Street

Jack Resnick & Sons

Newmark Grubb Knight Frank

Fairway Supermarket

48,875

Hudson Yards

CBRE Group

n/a

Ralph Lauren

45,814

711 Fifth Avenue

Jones Lang LaSalle

CBRE Group

Equinox

35,000

2 World Financial Center

Brookfield Properties

McDevitt Company

Whole Foods

32,000

1095 Sixth Avenue

SRS Realty

SCG Retail

Equinox

30,000

120 West 42nd Street

SRS Realty

Charter Realty

Planet Fitness

29,500

423 West 55th Street

Winter Organization

Crown Retail Services

Planet Fitness

28,576

25 Broadway

CBRE Group

Crown Retail Services

Blink Fitness

27,832

132 West 31st Street

Newmark Grubb Knight Frank

Charter Realty RKF

Fairway Supermarket

26,000

766 Sixth Avenue

Rose Associates

15 (tie)

Jubilee Supermarket

25,000

5 East 17th Street

Acadia Realty

n/a

15 (tie)

Le District

25,000

2 World Financial Center

Brookfield Properties

n/a

Crunch Fitness

21,709

2 Cooper Square

CBRE Group

Newmark Grubb Knight Frank

New York Health & Racquet Club

21,262

28 Avenue A

n/a

Fidelity Investor Center

21,240

11 Madison Avenue

RKF

CBRE Group

Señor Frogs

20,977

11 Times Square

RKF

SCG Retail

Source: Deals reported between Jan. 1 and Dec. 19, 2013 in Manhattan on 125th Street and below. Data from Cushman & Wakefield, CBRE Group, TRD research and published reports. Only new Manhattan leases, not renewals, were included.

H&M signed a deal for its largest NYC store, at Herald Center.

42 January 2014 www.TheRealDeal.com

Urban Outfitters inked a deal for space at 1333 Broadway.

Room & Board signed a lease for space on West 17th Street.

TheRealDeal_Final.indd 1

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Book review: Chelsea Hotel unmasked

‘Inside the Dream Palace’ provides poignant background, but leaves out crucial real estate history

By Leigh Kamping-Carder he Victorian hulk of the Chelsea Hotel looms over West 23rd Street, as imposing a façade as it is a symbol of New York City’s cultural legacy. In its 129year history, the illustrious structure has housed Jackson Pollock, Allen Ginsberg, Janis Joplin, Dennis Hopper, Bob Dylan and dozens of other notables. But if the structure at 222 West 23rd

44 January 2014 www.TheRealDeal.com

Street, between Seventh and Eighth avenues, is a cultural landmark, it is also a touchstone in the history of New York real estate — an early experiment in communal living in a money-obsessed town. This fascinating tale is the subject of author Sherill Tippins’ “Inside the Dream Palace: The Life and Times of New York’s Legendary Chelsea Hotel,” published last month. An accomplished writer with an earnest but evocative style, Tippins easily makes the case that the Chelsea is “like nothing else on the planet.” Still, real estate-obsessed readers may notice a couple of holes in her account, as she glosses over the Chelsea’s recent history and barely discusses longtime manager Stanley Bard. Constructed in 1884 by architect Philip Hubert, the 175-foot-high, 80-unit Chelsea Association Building was the largest apartment building in the city. Hubert was already known for his “Home Club Associations,” proto-co-ops where residents split the construction and monthly costs to afford higher-quality homes. The Chelsea went a step further, mixing New Yorkers of different social strata, where old-money aristocrats

had 12-room suites next to Bohemian types renting one of 30 short-term rooms. Hubert was steeped in the writings of Charles Fourier, a French philosopher who

genial tastes’ sprang not from their similar wealth, cultural backgrounds, or education, but from their shared tastes for novelty, social interaction, intellectual stimulation and

A sketch of the old Chelsea Hotel, built in 1884 by architect Philip Hubert. Right, a rendering of the modern Chelsea Hotel, which was closed to guests in 2011.

advocated creating communes of 1,620 residents known as phalansteries. Indeed, Hubert chose the parcel on West 23rd in part because it would attract “a group whose ‘con-

creative work,” Tippins writes. It’s a compelling backgrounder, not least of all because it shows how ascending real Continued on page 102

www.TheRealDeal.com March 2012 00

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Pr o f i l e

Witkoff:the savvy strategist The developer’s plan for juggling $1.5 billion in projects involves turning on a dime

Developer Steven Witkoff currently has about $1.5 billion worth of projects under construction, mostly in New York.

By Adam Piore t was the kind of chance encounter Steven Witkoff could only have dreamt about back when he was a young attorney pulling 90-hour workweeks at Dreyer & Traub in the late 1970s. Back then, the firm’s swashbuckling clients included Peter Kalikow, Donald Trump, Arthur Cohen, and — the standout in Witkoff ’s eyes — Howard Lorber, who cruised around in a cream-colored Rolls Royce convertible with the top down smoking a cigar. Decades later, in the early 2000s, Witkoff, then a developer, was driving on Fifth Avenue when he spotted the straighttalking, Bronx-born Lorber outside the GM Building, carless in the rain, and unable to get a cab. Witkoff, the CEO of the Witkoff Group, picked him up, thus striking up a friendship. Eventually that friendship would cross over into business when in 2011 Witkoff recruited Lorber to partner with him on a $190 million bid for the former International Toy Center building at 1107 Broadway. The 380,000-square-foot building, which they renamed 10 Madison Square West, has since been converted into 125 condos, where current listings range from $3.5 million to $18.5 million.

46 January 2014 www.TheRealDeal.com

“A lot of times, people think it’s a very complicated procedure to work with partners, and sometimes it is,” said Witkoff. “But sometimes you get fortunate enough to have a relationship like I have with Howard, and it becomes not complicated at all.” The deal was the first of many between the two moguls and is illustrative of the business model that the 40-person Witkoff Group has employed on many of its projects. It’s currently spending roughly $1.5 billion on construction costs alone at projects it has underway, mostly in New York.

Witkoff ’s charisma and outsized personality is a key component of his business success. Jonathan Mechanic, chairman of the real estate division at the law firm Fried Frank, said that while Witkoff has a “broad array of talents and is knowledgeable in multiple areas,” he’s especially skilled at establishing long-term relationships with potential business partners. “He often partners in particular circumstances with people who have a special experience that might be beneficial to

“He’s a rich dude, but when you are getting into the size deals he is working on, you’re not going to risk your entire net worth on one development. You are certainly going to want to take on partners,” said Dan Fasulo, managing director of RCA.

Keeping options open The fact that Witkoff ’s chance car ride with Lorber developed into a valuable business relationship does not come as much of a surprise to anyone who knows the 57-year-old Witkoff.

“We like to be able to execute on a deal in many different ways. That is the way to buy real estate.” Steven Witkoff, Witkoff Group Unlike other mega-players like Extell Development, Silverstein Properties or the Related Companies, the Witkoff Group almost always teams up, not just with equity partners, but with other industry figures who bring specialized expertise to its deals. In addition to the Vector Group, the firm is currently working with Fisher Brothers, the Macklowe Group, Ian Schrager, and a slew of others. Multiple sources told The Real Deal that

the partnership,” said Mechanic, who has helped Witkoff engineer deals with major players like Goldman Sachs. “And he plays in enough different spaces that he does it more than others.” Witkoff ’s partnerships, of course, also reduce his own financial exposure and allow him to pursue multiple projects at once. (According to Real Capital Analytics, he currently has at least nine New York City projects in the works.)

Peter D’Arcy, the regional president for New York City at M&T Bank, who has provided Witkoff with hundreds of millions of loans over the past decade, said Witkoff ’s people skills “pretty much help him in all circumstances,” noting that Witkoff “prides himself on being relatable to not just his peers, but … to the guys on the construction site.” Witkoff and Lorber, along with Winthrop Realty Trust, joined forces to buy

www.TheRealDeal.com January 2011 25

Pr o f i l e the highly coveted 701 Seventh Avenue in the heart of Times Square and replace it with a 39-story mixed-use development anchored by a roughly 200,000-squarefoot Marriott Edition Hotel with five floors of retail. The planned development will be one of the biggest in the area in the last 25 years. (TRD was told in the fall that

“We like to be able to execute on a deal in many different ways. That is the way to buy real estate,” Witkoff said. At the moment, he’s keeping his options open at one of his splashiest deals: the Helmsley Park Lane Hotel at 36 Central Park South. A Witkoff-led partnership — other investors include Lorber,

fael Viñoly-designed condo with Fisher Brothers, which specializes in construction and development. The tower will be one of the tallest residential buildings in Lower Manhattan. Witkoff and Lorber also partnered with Fisher in the spring to do a deal on Murray Street, buying a 145,000-square-

What’s on Witkoff’s plate?

A look at the developer’s most high-profile NYC projects Project

Plans

Park Lane Hotel

Hotel operation to continue (possible condo conversion in future)

701 Seventh Avenue

Ground-up 39-story retail-and-hotel development

1107 Broadway (10 Madison Square West)

Condo conversion (nearly 90 percent sold out)

101 Murray Street

Residential conversion

22 Thames Street

Ground-up 400-plus-unit condo

215 Chrystie Street

Ground-up 25-story hotel-condo

357 West Street

Ground-up residential tower

515 East 72nd Street

Debt takeover of 180 condo units

150 Charles Street

Condo conversion (sold out)

Source: Projects from Real Capital Analytics and news reports.

From left: Witkoff is partnering with hotelier Ian Schrager on two Manhattan projects. Investor Ruby Schron and Howard Lorber are regular Witkoff partners. One of Witkoff’s most buzzed about projects: The Helmsley Park Lane Hotel at 36 Central Park South.

Unlike other mega-players, the Witkoff Group almost always teams up with other industry figures that bring specialized expertise to its deals. the transaction was valued at $2 billion.) “A lot of people looked at the deal,” Witkoff said. “The key was getting a Marriott Edition to come here.… Now we have a roughly 500-room hotel in a hotel submarket that has perhaps the highest occupancy in New York City.” Witkoff ’s proclivity for teaming up with different partners on projects that require different expertise fits perfectly with another key component of his approach — an emphasis on executing deals in many different areas of the market. Witkoff learned the value of having that flexibility early on, when he purchased 10 Hanover Square from the Helmsley family in 1996 for $15 million, intending to convert it to residential, but famously changing course and leasing the entire building to Goldman Sachs. In 2005, Witkoff ultimately did convert the 23-story building into residential and then, in 2011, sold it for $260.8 million.

28 March 2012 www.TheRealDeal.com

Macklowe Properties, Highgate Holdings, and Jynwell Capital — closed on the $660 million deal in late November after securing $525 million in acquisition financing from Wells Fargo Bank and Criterion Real Estate Capital. And while rumors abound about how the investors might convert the property into luxury condos, Witkoff has said that for now, the property will remain a hotel. (Highgate specializes in the luxury hospitality.) “Right now, the whole business plan is centered around running it as a hotel,” Witkoff said. “We have the option of keeping it as a hotel and fixing up the rooms. We have the option of converting a portion … to condominiums. We have the option of buying some air rights and filling in around the hotel.” Meanwhile, the developer has a slew of other recent deals. Downtown at 22 Thames Street, Witkoff is partnering on a 400-plus-unit Ra-

foot building from St. John’s University; they plan to do high-end residential there. And, in June, the duo partnered with Ian Schrager to buy property on West and Leroy streets, where they will construct another residential tower. Witkoff Group Principal Scott Alper said, “we know what we know, and we know what we don’t know.” He noted that Schrager is “obviously the father of the boutique hotel,” and brings design and operational savvy. Lorber, of course, also owns Douglas Elliman, which is “very helpful on the residential marketing front,” Alper said. For his part, Lorber said, “I’m not a developer, so all I can really do is guide them on what the pricing will be for a condo.” “They believe me because I am putting money in, and that is why it works so well,” he said. The firm is also not afraid to step away from a development and simply cash out

if the circumstances are not right. For example, last year Witkoff and partner Ruby Schron, who together bought the famed Woolworth Building for $146 million in 1998, sold the upper 30 floors for $68 million to a group led by Alchemy Properties. Originally, the pair and their investors had intended to redevelop the project as residential themselves, said Schron. But the market tanked, and by the time residential came back in vogue, many of the partners involved were no longer available. “Some passed away and we were dealing with estates, some are not in America anymore,” Schron said. “We did not have a full team … so we thought it was better off to sell it and let someone else try.”

‘Psychology Today’ moment A native of Baldwin Harbor, Long Island, Witkoff got his start in real estate by chance. It was the late 1970s, and he had just graduated Hofstra Law School. His sister was working for the real estate firm Integrated Resources Inc., and referred her brother to Dreyer & Traub, the law firm representing her employer. Soon Witkoff was hired as an associate and working in the firm’s Park Avenue offices. It was there that he met an ambitious young lawyer named Laurence Gluck. The two were doing a lot of work for clients who were buying properties with loans backed by the government-sponsored Federal Home Loan Mortgage Corporation, Freddie Mac. They soon began discussing how they might do such deals themselves. Gary Jacob, executive vice president of Glenwood Management Corporation, worked with Witkoff in those early years, and remembers him being a “very good lawyer, with loftier goals and ambitions.” “I just knew that wasn’t the life he wanted — looking at documents,” Jacob added. “We spoke about that. He was always very curious about the stuff we were working on, and what we were thinking.” Soon enough, Witkoff was asking lenders where they were looking to do deals. They responded with the Northwest Bronx and Washington Heights. Gluck and Witkoff began making forays Uptown to look at property after work and on the weekends. The two lawyers made their first buy in 1986, when Witkoff was just 29. The building at 164 Sherman Avenue in Washington Heights cost $240,000 and required a $50,000 down payment. To come up with his half, Witkoff approached his father, who worked in the garment industry, for a $15,000 loan. It was an intimidating ask — the loan amounted to at least half of his father’s liquid savings, and Witkoff expected to get turned down. Instead, his dad said: “If you believe in it, I believe in it,” Witkoff recalled. Continued on page 100

www.TheRealDeal.com January 2014 47

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egendary redevelopment foe Jane Jacobs led a group of neighborhood activists to convince the city to reject a plan to demolish and rebuild much of the western portion of Greenwich Village, 52 years ago this month. The City Planning Commission voted to formally abandon the proposal to remake a 14-block area bounded by West 11th Street, Hudson, Christopher, Washington, Morton and West streets. About 600 families lived there, alongside commercial uses. At the same time, the city body cleared its designation of the portion of the West Village as “blighted.” The designation was used to justify the urban Jane Jacobs in 1961 redevelopment project, which would have demolished some low-rise buildings, rehabilitated some and replaced others with middle-income apartment buildings. Jacobs, chairman of the Committee to Save the West Village, was considered a major voice in preventing the project. Her group rallied neighborhood residents and businesses against the plan. Mayor Robert Wagner, who initially advocated for the proposal, ultimately changed his mind in the face of the vocal opposition. At the time of the vote, he urged that the project be abandoned.

1930: Depression puts breaks on construction plans

he city reported 83 years ago this month that apartment building plans for 1930 declined dramatically from the prior year, illustrating that the Great Depression was putting the brakes on the once-heady residential construction market. Developers filed plans to build 583 apartment buildings with a total of 27,012 units in 1930, figures from the city’s Bureau of Buildings showed. That compared with 1929, when builders submitted applications to construct more than 62,676 new apartment units in the five boroughs. The level fell again in 1931 to 25,105 units for all of New York City, and nearly came to a standstill in 1932, when plans for just 2,572 units were filed for the entire city. The number of units began creeping back up in subsequent years. The New York Times reported that overall construction in 1936 jumped 45 percent over the prior year.

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teel magnate Charles Schwab bought the first parcels that ultimately made up an entire city block between Riverside Drive and West End Avenue on the Upper West Side 112 years ago this month. There, he constructed what is considered the grandest mansion ever built in Manhattan. It was a contrarian move for Schwab, then head of United States Steel, to select the Upper West Side as the location Charles Schwab’s to build his 75-room dream home, mansion, “Riverside” designed in an amalgam of French Château styles and featuring grand views of the Hudson River. At the time, most of the rich were constructing mansions along Fifth Avenue, on the east side of Central Park. Schwab signed contracts in 1901 to buy the parcels between Riverside Drive, West End Avenue and 73rd and 74th streets from the New York Orphan Asylum. He took title to the first parcel in January 1902 and the rest later that year. He completed the mansion known as Riverside in 1906 at a cost of $6 million. Despite its grandeur, the home stood for little more than 40 years. During the Depression, Schwab asked Mayor Fiorello La Guardia if the city would buy it for the mayoral residence, but was rebuffed. Schwab died in 1939, and the structure was sold to Prudential Insurance in 1947. The following year, it was demolished and replaced by the 658-unit Schwab House, at 11 Riverside Drive, completed in 1950. Compiled by Adam Pincus

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Residential

Year in Review

A drop at the top

2013’s priciest closed residential deals surprisingly pale in comparison to 2012’s

By Katherine Clarke ith the New Year underway, it’s time for a post-mortem on last year’s residential market. And in an unusual twist, industry insiders who normally rely on statistics to understand the ins-and-outs of the market are saying that it’s best to avoid the numbers when gauging how the uppermost echelon did in 2013. That’s because while the luxury market got all the buzz last year, some of the numbers tell a different story. Indeed, 2013’s top five Manhattan residential deals totaled $162.13 million, a 47 percent drop from 2012’s $306.5 million. In addition, the highs weren’t so high: the most expensive closed sale was the $42 million purchase of a sponsor unit at 18 Gramercy Park,

buyer pool,” said Tim Crowley, a broker with Flank Brokerage, the brokerage arm of the development and architecture firm by the same name, who sold the third priciest deal of the year. “There have been contracts signed this year in mega Midtown projects like One57 [at 157 West 57th Street] and 432 Park Avenue that prove this point.” Those Midtown contracts, which are set to close this year and into 2015, will provide the true and final accounting of how well the market performed in both 2012 and 2013, Crowley noted. (Some of the pending sales at One57 went into contract in 2012.) Still, not everyone is confident that the demand for units priced above $5,000 per square foot, the norm at towers like One57 and 432 Park Avenue, will continue at the level needed to absorb the supply. Indeed, developers, encouraged by the appetite for those units in the last two years, have brought more of those high-priced residences to market in the last year than in recent memory. Despite the overall inventory shortage, there were nearly twice as many units that came to market asking above $5,000 a foot in 2013 than in 2012, according to data from CityRealty. “Developers are using One57 and 432 Park as benchmarks for 2014, but it’s difficult to know how deep that market is,” said Emily Beare, a luxury broker at CORE. “One building in a neighborhood does not necessarily make a market.” Beare, whose $70 million listing at 15 Central Park West was taken off the market in the fall, noted that the $88 million sale last year at 15 Central Park West, the record-setting condo project developed by Arthur and William Lie Zeckendorf, had created an irrational frenzy in the market. “Once sellers realized that the sale did not truly reflect the market, prices [for comparable listings] came down as much as 25 percent. The sale was an example of the right buyer at the right time,” she said. But while 2013’s top five closed deals maybe not have matched the deals that went into contract the prior year, they were not shabby, either. Read on for a closer look at which units made the cut.

The top five Manhattan residential deals in 2013 totaled $162.13 million, a 47 percent drop from 2012’s $306.5 million. The most expensive closed sale was for $42 million, compared with an $88 million sale in 2012. compared with the $88 million sale of financier Sanford Weill’s apartment at 15 Central Park West in 2012. Considering this data, it may seem as though the residential market took a dip last year. However, most of the year’s priciest sales — including a transaction reportedly in excess of $90 million — won’t actually close until well into 2014, brokers told The Real Deal. Those deals are expected to break records. The reason that they’re slow to hit the tape? Those priciest deals are predominantly in new-development condominiums in which closings have not yet begun. So, with the exception of the $42 million deal, most of 2013’s top deals were resales, which are traditionally less pricey than brand-new product, or condominiums that hit the market in 2012. It is also symptomatic of the lack of available high-end properties, brokers said. “I would have to assume that the [drop in the numbers] is a function of available inventory and does not necessarily represent a shift in buyer motivation or an exhaustion of the

18 Gramercy Park, PH17 Closing date:

Aug. 14, 2013 Price:

$42 million

For the second consecutive year, the priciest closed sale was in a building developed

by the Zeckendorfs. The most expensive sale of 2013 was the duplex penthouse at the brothers’ 18

snapped up the unit for the full asking price of $42 million, setting a record for priciest condo sale Downtown. Still, that record may not hold up for long. There are units in contract at buildings like Walker Tower, the former Verizon tower at 212 West 18th Street — which was converted to luxury condos by JDS Development and

Houston Rockets owner Leslie Alexander’s $42 million purchase at 18 Gramercy Park South was the priciest closed sale of 2013. Inset: Douglas Elliman broker Melanie Lazenby, who represented Alexander in his $42 million purchase.

Gramercy Park South, a 16-unit luxury condo conversion launched in 2012. Leslie Alexander, the billionaire owner of Houston Rockets basketball team,

52 January 2014 www.TheRealDeal.com

Property Markets Group — and the much ballyhooed Herzog & de Meuron–designed 56 Leonard Street for more than $50 million and $47 million apiece, respectively, according to news reports. The 18 Gramercy Park South listing was handled by Zeckendorf Marketing, while Alexander was represented by Douglas Elliman broker Melanie Lazenby. “For the buyer, it felt like an unusual opportunity to be able to buy something that’s pre-war on the only private park in New York City,” Lazenby told TRD. “That’s an opportunity that never comes up. Gramercy Park was fashionable 100 years ago and will be fashionable 100 years from now, so it just felt like a very safe investment.” Lazenby, who met Alexander in the elevator at her building Superior Ink in the West Village, said the sports mogul had been looking for something turn-key this time around. He pulled off a successful flip at Superior Ink in 2010 with the $31.5 million sale of his unfinished penthouse, which he’d purchased as raw space. He was one of the first buyers at the Gramercy Park building, after looking at floor plans for the penthouse unit at a

meeting in the Gramercy Park Hotel. The 6,000-square-foot, five-bedroom pad, which takes up the full 16th and 17th floors of the pre-war conversion, has 2,000 square feet of outdoor terraces, an outdoor pool and a fireplace. The property, of course, also came with a highly coveted key to Gramercy Park. Alexander was especially attracted to the outdoor space because he has a dog, Lazenby said. A century-old townhouse Closing date: once owned by June 18, 2013 famed landPrice: scape architect $34.35 million Ellen Biddle Shipman ranked as Manhattan’s second-most-expensive residential deal of

21 Beekman Place

BHS broker Paula Del Nunzio represented an estate in the sale of 21 Beekman Place.

www.TheRealDeal.com January 2013 00

Residential

Year in Review

TRD

Manhattan’s priciest closed residential sales for 2013 Rank

Address

Listing Broker

Seller Name

Buyer Name

Sale Price

18 Gramercy Park South, PH17 (condo)

Zeckendorf Marketing

Zeckendorf Development

Leslie Alexander

$42 million

21 Beekman Place (townhouse)

Paula Del Nunzio, BHS

Estate of Peter Novello

State of Qatar

$34.35 million

607 Hudson Street, #9 (condo)

Tim Crowley, Flank Brokerage LLC

Flank

Abingdon Property NYC, LLC

$29.78 million

15 Central Park West, #33D (condo)

Kyle Blackmon, BHS

Zachary Jared Schreiber and Lori Schreiber

Mussik Capital Corporation

$29 million

12 East 76th Street (townhouse)

Sami Hassoumi, BHS

Luca Orlandi

Mou LLC

$27 million

45 East 74th Street (townhouse)

Brett Miles, Jason Karadus, Robson Zanetti, James Cox, Jr., Town

Antarctica LLC

Galaxy Silver Limited 74th Street LLC

$26 million

15 Central Park West, #7C (condo)

Nora Ariffin, Christopher Kromer, Halstead

Jeff Gordon

Mossullo LLC

$25 million

720 Park Avenue, #16A (co-op)

Betsy Messerschmitt, Corcoran

Lawrence T. Babbio Jr., and Sheri Babbio

Michael and Leah Weisberg

$24 million

40 Bond Street, 8A (condo)

Leonard Steinberg, Herve Senequier, Douglas Elliman

William Kriegel

Minm LLC

$23.5 million

607 Husdon Street, #2 (condo)

Tim Crowley, Flank Brokerage LLC

Flank

Hudson Heights Holdings Inc.

$23.4 million

11 (TIE)

640 Park Avenue, #8FLR (co-op)

Serena Boardman, Sotheby’s

Estate Of Sue Erpf van De Bovenkamp

Stanley and Frieda Cayre

$23 million

11 (TIE)

720 Park Avenue, #9A (co-op)

John Burger, BHS

Peter A. Aron

Steven Tananbaum

$23 million

106 East 71st Street (townhouse)

Carrie Chiang, Janet Wang, Corcoran

135 LLC

Hash Bass LLC

$22.9 million

607 Hudson Street, #10 (condo)

Tim Crowley, Flank Brokerage LLC

Flank

Abingdon Investment LLC

$22.4 million

950 Fifth Avenue, #5/6 (co-op)

Cindy Kurtin, Jessica Vertullo Maher, Stribling

Jerome and Joan Serchuck

Jie Trust

$22 million

1 Central Park West, #PH48A (condo)

Howard Margolis, Jamie Mitchell, Douglas Elliman

Elizabeth Ross Johnson

Unit 48a Cpw LLC

$21.9 million

17 (TIE)

3 East 77th Street, #10/11B (co-op)

Roderick Waywell, Charles Rutenberg

Charles Lazarus

Carlos Rodriguez-Pastor

$21 million

17 (TIE)

733 Park Avenue #PH (co-op)

Barbara Fox, Brad Loe, Fox Residential Group

Estate Of Ethel S. Allen

Park Avenue Family Trust

$21 million

775 Park Avenue, #11B (co-op)

John Burger, BHS

Zoe Cruz and Ernesto Cruz Jr.

Christopher Errico

$20.9 million

48 East 74th Street (townhouse)

Paula Del Nunzio, BHS

Harold Prince and Judith Prince

48 East 74th Street LLC

$19.1 million

Source: Data from StreetEasy and CityRealty.

A peek inside the townhouse at 21 Beekman Place, which sold for $34.35 million last year.

2013. The home at 21 Beekman Place in Turtle Bay was also the most expensive townhouse sale. The deal set a price-per-square-foot record for a Manhattan townhouse, at $4,754 a foot. The previous record was held by a townhouse at 14 East 94th Street, which sold for $24 million, or

44 November 2012 www.TheRealDeal.com

$4,380 per square foot, in 2012. Still, while the property — which Shipman inhabited between 1919 and 1946 — sold for $34.35 million, that was significantly less than the $43 million asking price. The buyer was the State of Qatar, the sovereign Arab emirate, and according to news reports, the home will

likely serve a diplomatic purpose going forward. A representative for the embassy of the State of Qatar in Washington did not respond to a request for comment. The 6,740-square-foot home was sold by the estate of the late financier Peter Novello, who acquired it in 2008 for $10.8 million, but died in 2012. Novello completed an extensive renovation of the property after the previous owner, a Florida businessman named William Rupp, added ornamental embellishments to the exterior of the property and built a wall atop the home to block neighbors’ views. Novello also replicated the oak floors and rebuilt the library and riverfront conservatory that had existed when the home was owned by Shipman, whose clients included New York’s elite, such as Robert Vanderbilt, J.S. Rockefeller, and Vincent Astor. The Qatari government liked the No-

vello’s period furnishings so much that it acquired them with the home — which is at East 50th Street and is surrounded by a wrought-iron gate — for an additional $650,000. Brown Harris Stevens broker Paula Del Nunzio represented Novello’s estate. She did not respond to requests for comment. It was not clear if the buyer had representation. The April launch of the Abingdon, a collection of Closing date: May 6, 2013 10 residencPrice: es converted $29.78 million from a former 200-bed nursing home at 320 West 12th Street in the West Village, generated multiple high-priced deals in 2013, in-

The Abingdon at 607 Hudson St., #9

Continued on page 104

www.TheRealDeal.com January 2014 53

Commercial

Year in Review

The office building comeback

Buoyed by revival of leasing, commercial buildings dominate 2013’s top 10 investment sales list

Five building sales topped $1 billion in 2013, while in 2012 none reached that level. In addition, there were several sales of equity stakes in office towers like the GM Building and One Worldwide Plaza, which valued those towers at several billion dollars a pop. “Fundamentals within the office sector have improved enough that buyers are able to make compelling offers to get sellers to sell,” said Robert Knakal, chairman of investment sales brokerage Massey Knakal Realty Services. “That, and an increase [in

By Katherine Clarke ncreased availability of debt and an uptick in office rents drove demand for large Manhattan office towers in 2013. The top 10 priciest building sales of the year included nine office buildings — a threefold increase over the three office towers that cracked the top 10 list in 2012. Those sales were driven in part by the recovery of the Manhattan office leasing market, which rebounded in 2013 after a 2012 drop-off. Last year at this time, The Real Deal was writing about that falloff, as major office tenants shied away from committing to large blocks of space. A year later, however, the market has stabilized. The uptick is evident in the latest office market stats. In the third quarter of 2013, the vacancy rate for Manhattan office space dropped to 11.5 percent, from 12 percent the year earlier, according to data from commercial firm Colliers International. The office recovery, coupled with perceived economic stability following several years of anxiety about the European markets, spurred investors to plow cash into the commercial office sector.

The aggregate value of the 10 priciest Manhattan investment sales deals for 2013 was $9.3 billion — up from $4.8 billion in 2012. activity] in the commercial mortgage-backed securities market, has allowed for larger transactions to occur more easily.” Below is a rundown of Manhattan’s priciest building trades for 2013 (as recorded by Real Capital Analytics) and of the biggest office leases (as collected by The Real Deal through data provider CoStar Group, and through news and brokerage reports).

2013’s priciest Manhattan building sales Rank

Address

Size/Type

Price

Buyer

Seller

Listing broker

650 Madison Avenue

600,496 sf (office)

$1.35 billion

Oxford Properties, Vornado, Crown Acquistions, Highgate Holdings

Carlyle Investment Management LLC and Century Plaza

Eastdil Secured

2 (tie)

10 Columbus Circle

1.1 million sf (office)

$1.3 billion

Related Companies

Time Warner

Eastdil Secured

2 (tie)

30 Rockefeller Plaza

1.3 million sf (office)

$1.3 billion

Comcast

General Electric

CBRE Group

4 (tie)

550 Madison Avenue

716,660 sf (office)

$1.1 billion

Chetrit Group

Sony

Eastdil Secured

4 (tie)

237 Park Avenue

1.2 million sf (office)

$1.1 billion

RXR Realty, Walton Street Capital

Lehman Brothers Holdings

Jones Lang LaSalle

1211 Sixth Avenue

1.9 million sf (office)

$850 million

Ivanhoe Cambridge

Beacon Capital Partners

Eastdil Secured

425 Lexington Avenue

700,034 sf (office)

$750 million

JP Morgan Asset Management

Hines

Eastdil Secured, CBRE

One Chase Manhattan Plaza

2.2 million sf (office)

$725 million

Fosun

JPMorgan Chase

CBRE Group

36 Central Park South

370,000 sf (hotel)

$660 million

Witkoff Group

The estate of Leona Helmsley

CBRE Group

1440 Broadway

743,000 sf (office)

$528.6 million

American Realty Capital

Rockpoint Group, Monday Properties

Eastdil Secured

Source: Building sales were researched in public property records and through data provider Real Capital Analytics. TRD only included sales where the buyer purchased more than 50 percent of the property. At 1211 Sixth Avenue, the buyer purchased a 51 percent stake. All other purchases were for full (or nearly full) ownership.

Manhattan’s priciest minority-stake building sales, 2013 Address

Price

Percent Buyer

Seller

Listing Broker

GM Building, 767 Fifth Avenue

$1.4 billion

Zhang Xin, Moise Safra

Boston Properties

CBRE Group

One Worldwide Plaza

$1.3 billion

48.9

Amercian Realty Capital

George Comfort & Sons, DRA Advisors, RCG Longview, Ramius Capital

Eastdil Secured

1345 Sixth Ave and 605 Third Ave

$1.1 billion

49.5

Rockpoint Group

Estate of Daniel Ludwig

Eastdil Secured

7 Times Square

$684 million

Norges Bank

Boston Properties

Eastdil Secured

375 Park Avenue

$224 million

RFR Holdings

Harry Lis

none

Big building sales The aggregate value of the 10 priciest Manhattan investment sales deals for 2013 was $9.3 billion — up from $4.8 billion in 2012, an analysis by TRD found. The priciest full-building sale of the year (TRD looked at minority interest

54 January 2014 www.TheRealDeal.com

and equity stake sales separately) was the $1.35 billion sale of an office tower at 650 Madison Avenue to a joint venture comprised of Oxford Properties, Steven Roth’s Vornado Realty Trust, Crown Acquisitions, Highgate Holdings and a group of institutional investors advised by

J.P. Morgan Asset Management. A close second was the $1.3 billion sale of the 1.1 million-square-foot Time Warner Center at Columbus Circle, to the Related Companies. Related, whose chairman is Stephen Ross, bought the complex from Time Warner and then leased it

back to the media giant, which is slated to relocate to Related’s under-construction Hudson Yards site in a few years. Tied for second was the $1.3 billion sale of 30 Rockefeller Plaza to communications giant Comcast. (That deal was part of Comcast’s $16.7 billion purchase

www.TheRealDeal.com January 2013 00

Commercial

Year in Review

2013’s biggest Manhattan office leases Rank

Address

Tenant

Square feet

Tenant Brokerage

Landlord/Landlord rep

Terms

388 and 390 Greenwich Street

Citigroup

2.7 million

CBRE Group

SL Green Realty

Renewal

550 Madison Avenue

Sony Corporation of America

798,420

None

Chetrit Group

Renewal

11 Penn Plaza

Macy’s Merchandising Group

646,434

CBRE Group

Vornado Realty Trust

Renewal

425 Lexington Avenue

Simpson, Thatcher & Bartlett

595,799

CBRE Group

Hines

Renewal

520 Madison Avenue

Jefferies & Company

458,000

Cushman & Wakefield

Tishman Speyer

Renewal

1 North End Avenue

CME Group

449,000

NGKF

Brookfield Office Properties

Leaseback

501 West 30th Street

L’Oreal

407,482

CBRE Group

New

250 Vesey Street

Jones Day

330,210

Studley

Brookfield Office Properties

New

1633 Broadway

Warner Music Group

288,250

CBRE Group

Paramount Group

New

420 Lexington Avenue

Metro-North

265,903

Cushman & Wakefield

SL Green Realty

Renewal and expansion

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

In the priciest building sale of 2013, 650 Madison Avenue (left) was sold for $1.35 billion to a venture that included Vornado, which is headed by Steven Roth.

of a 49 percent stake in NBC Universal from General Electric.) The only non-office building to make the 2013 list was the sale of the Helmsley Park Lane Hotel at 36 Central Park South to the Witkoff Group and its majority backer Jynwel Capital, a Hong Kong–based private equity investor (see related story on page 46). That property sold for $660 million in late November. By contrast, while the top deal of 2012 was the $720 million sale of an office building, 450 Lexington Avenue, the rest of that list was mostly residential, retail and hotel buys. Brokers attributed the rise in dollar volume of Manhattan transactions in 2013 to the availability of debt and equity financing, especially since foreign sovereign wealth and private equity funds have become increasingly bullish on New York as a so-called “safe haven” for investment.

rates inched up further. “A lot of [sellers] were taking some chips off the table because they feel like we’re approaching the top of another bubble,” said J.D. Parker, first vice president at commercial brokerage Marcus & Millichap. “Certainly, anytime you have government influencing interest rates and manipulating the market, there’s always the chance that another bubble is forming.” Are those fears unfounded? “I think we have a ways to go,” Parker said. “I don’t think anything’s going to pop just yet, but I do think many people believe we may be nearing the top of another cycle.”

Meaty ‘stakes’ Several of Manhattan’s more high-profile investment sales deals in 2013 were not outright building sales. Instead, they were the sales of equity stakes in

“There is more new leasing activity compared to last year. Renewals have dropped off a little bit. [That new activity] is a sign that tenants are looking to make a bigger investment in their location.” Donald Noland, Cushman & Wakefield The sale of 40 percent of the GM Building (above), which sold for $1.4 billion in June, was the largest building stake sale of 2013.

30 Rockefeller Plaza (above) sold for $1.3 billion to communications giant Comcast, a tie for the second priciest deal of 2013.

The Time Warner Center (left) sold for $1.3 billion to the Related Companies, whose chairman is Stephen Ross.

PHOTOGRAPH OF BLAU FOR THE REAL DEAL BY CHRIS MARTIN 44 November 2012 www.TheRealDeal.com

“Coming out of the recession, the residential market was so strong early on … so those deals got done first,” said Eric Anton, managing partner at commercial brokerage Brookfield Financial. “Lenders got comfortable with residential and then they got comfortable with office.” For office building sellers, rising rents and increased values in 2013 presented either a long-awaited opportunity to exit their investments with strong returns, or generated concern that the market was exhibiting the same frothiness it did in 2007 before the financial collapse, sources said. The concern about an over-heated market was compounded by the continued role of the Federal government in controlling interest rates through bond-buying, some sources said. As a result, some owners opted to sell before the

large office buildings. As a result, TRD is also publishing a ranking of those priciest five deals. In the biggest deal for a minority building stake, the family of Zhang Xin (CEO of office landlord Soho China), and a company controlled by Brazilian banking magnate Moise Safra bought a 40 percent piece of the GM Building for $1.4 billion from a group of Middle Eastern sovereign wealth funds. The remaining 60 percent is owned by Boston Properties. The transaction valued the entire building at a stunning $3.4 billion. Boston Properties and the Middle Eastern group bought the building for $2.8 billion from developer Harry Macklowe in 2008, the highest amount ever paid for a U.S. office building. Continued on page 102

www.TheRealDeal.com January 2014 55

Year in Review

By Christopher Cameron orget fame and glamour: The buyers of Manhattan’s most costly real estate are often not the boldfaced names that appear in the gossip pages. Those spending $40 million or more on a home are seldom bankers, starlets, tech billionaires or Russian oligarchs and their children, brokers say. Instead, these big spenders often tend to have roots in the working classes, making their fortunes from manufacturing, inventions and sales. “Everyone expects buyers at this price point to be extremely glamorous, but really they are the minority,” said Leonard Steinberg, who leads the luxury brokerage team at Douglas Elliman. “Ninety percent of buyers in the $40 million-plus range are just extremely clever people that have invested wisely, or invented something extraordinary.” Steinberg is currently marketing a 7,250-square-foot condo penthouse at the Elad Group’s 250 West Street, for $39.5 million. And despite the apartment’s hefty price tag so far, the potential buyers coming to view the property have been largely under-the-radar players with unrecognizable names. And while Steinberg stressed the growing influence of highly cosmopolitan foreign billionaires on the New York market —from places like China, Russia and Western Europe, as well as new wealth emerging in countries like Nigeria, South Africa and Mexico — he said Americans are still the primary buyers of this type of home. For example, one potential buyer who recently viewed the property was a towel manufacturer. But the buyer’s fortune was not built on a recognizable name brand of bath or beach towel, nor through sales at big retail chains. Instead, she produced towels distributed exclusively at wholesale centers — hardly haute couture. “You have to think, who invented the technology in your keyboard? Who manufactured the screws and hinges in the products all around you? Who innovated the latest medical device?” Steinberg asked. “Buyers in this market usually aren’t people who got rich raping the system. They tend to be either ingenious or rather lucky.” While Wall Streeters, technology millionaires, heirs and TV, movie and sports stars obviously have millions to spend, brokers say those buyers usually top out below the $40 million price point. There are, of course, exceptions — like Leslie Alexander, the billionaire owner of Houston Rockets, who snapped up a $42 million unit at 18 Gramercy Park South last year (see related story on page 52). But more often than not, the $40 million-plus buyers work in obscure fields. Indeed, while senior executives at the big global banks often earn total compensation packages that come in around $20 million, in many cases much of that headline number isn’t in cash. Typically, half or even twothirds of their total will come from restricted stock awards or options that vest over time, making their fortunes less liquid. There are, of course, exceptions — hedger

56 January 2014 www.TheRealDeal.com

The unglamorous $40M buyers

Buyers in NYC’s highest price ranges are often not bold-faced names, but millionaires in ﬁelds like nut-and-bolt manufacturing funder Bill Ackman and a group of investors are reportedly in contract for a $90 million unit at Extell Development’s One57 — but there are also more than a few New York City trophy homes listed above $40 million. In fact, approximately 30 homes in the city are currently on the market for $40 million or more, according to real estate listings website StreetEasy. Sotheby’s International Realty’s Elizabeth Sample, who along with partner Brenda Powers has four properties listed at $50 million or above, added that there are currently at least another five off-market “whisper” listings in the same price range. But don’t expect Hollywood glitterati or high-visibility TV and music personalities to

chase those properties. Stars typically buy at lower price points. Case in point: Judy Sheindlin, better known as “Judge Judy,” is the highest-paid TV personality in any genre, grossing $47 million a year, according to TV Guide magazine. Yet, as The Real Deal previously reported, the no-nonsense justice spent $8.5 million on her four-bedroom co-op at 14 Sutton Place South in 2013. Other notables such as Yoko Ono, Lance Bass and Norah Jones all sold Manhattan apartments in 2013 with asking prices ranging from $2.14 million to $8.9 million. And this fall, actress Rosie O’Donnell spent $6.4 million on a Saddle River, N.J., estate. Another misconception is that the titans

of Silicon Valley are spending their hundreds of millions on urban domiciles. But think again: Steinberg says that while older tech billionaires do on occasion buy at this level, many prefer to live more organically, in smaller and more sustainable luxury homes. As for heirs and heiresses, brokers agreed that there is often a sense of humility that keeps richly bequeathed children from spending too much all at once. Yes, there are twentysomethings like Ekaterina Rybolovleva who settled on an $88 million apartment in the exclusive 15 Central Park West. (Her father, fertilizer magnate Dmitry Rybolovlev, reportedly bought it for her.) But many of those who inherit their fortunes tend to be more modest — and guilt-ridden about spending too much money. “[Overall,] the common thread with buyers at this level is that they are often extremely humble,” said Vickey Barron, associate broker at Douglas Elliman and director of sales at JDS Development and Property Markets Group’s Walker Tower in Chelsea, which is currently listing a full-floor penthouse for $47 million. “These buyers are not wound up. They tend to be gentle souls that just happen to be very successful entrepreneurs, which is refreshing and lovely to see.” Barron said a more accurate portrait of the apartment hunter with more than $40 million to spend is a salt-of-the-earth businessperson. Sample added that in many cases, the broker is better dressed than the client, sometimes leading to embarrassing mix-ups with owners. “If you just saw them in a coffee shop, you wouldn’t know they were rich.” Barron said. “These people care about quality, not glitz. They want to fly under the radar; they can even be a little artsy.” Barron recounted one recent case at Walker Tower involving a T-shirt-and-jeanswearing apartment hunter interested in one of the building’s lavish penthouse units. When she learned the origins of her client’s fortune, Barron said she was embarrassed to have never heard of the company or the product it sold. “Their business is crazy successful, but I had no idea what in the world it was,” Barron said. “Later, I learned that it was an expensive product that you wear from a brand that does absolutely no marketing, yet sells over a million dollars worth of product each month.” The common denominator uniting this demographic of high-end buyer is that they are self-made, according to Emily Beare, a broker at CORE. “These buyers aren’t Harvard Business School graduates with millionaire parents. They are very savvy and very street smart,” said Beare, who listed 15 Central Park West’s first combination unit for $70 million and represented the same seller, steel magnate Leroy Schecter, in his purchase of the Rothschild Mansion on the Upper East Side for $25 million in 2012. “They like to stay low-key and they don’t want to flaunt their wealth.” Beare even remembered one client who made a fortune manufacturing machines like the ones used to cook hot dogs in baseball parks and street carts. TRD www.TheRealDeal.com January 2014 35

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Year in Review

In memoriam : Sites New York

lost in 2013 — or will soon lose S Redevelopment in various forms takes down a number of recognizable buildings

By Mark Maurer ome owners caved to the pressures of widespread redevelopment — and others found their properties literally caving in. A variety of factors were involved as a number of notable landmarked buildings and other long-standing real estate in the New York City area fell in 2013. Read on for a look back at some of the sites that disappeared — or are set to vanish.

5Pointz at 22-44 Jackson Avenue in Long Island City

Hoffman Auto Showroom, Midtown In April, Midwood Investment & Management and Oestreicher Properties demolished the historic Frank Lloyd Wright–designed Hoffman Auto Showroom at 430 Park Avenue near East 56th Street, paving the way for the construction of a TD Bank branch. About two weeks earlier, the Landmarks Preservation Commission had expressed interest in designating the showroom a landmark. Luxury-car mogul Maximilian Hoffman had the spiral car dealership office commissioned in the 1950s. The adjoining 19-story office structure still stands.

Building 877, Governors Island More than the others, this building went out with a boom. In June, an 11-story apartment building built in 1968 that once housed the families of Coast Guard officers was imploded with more than 250 pounds of explosives, DNAinfo reported. Building 877 — one of the biggest on Governors Island — was destroyed to make way for a 38-acre space for sports fields and a new park, as part of the city’s ongoing redevelopment of the island. The debris pile from the implosion was later recycled. The last time the city imploded a building was in 2003, DNAinfo said.

Mary Help of Christians Catholic Church, East Village Developer Doug Steiner razed the Mary Help of Christians Catholic Church at 436-440 East 12th Street in August, with plans to build a residential complex. The city Department of Buildings, however, rejected his proposal to build a seven-story, 157,800-square-foot building with 158 units. Steiner paid $41 million for the site last year. The church opened its doors in 1917.

Left, Hoffman Auto Showroom at 430 Park Avenue in 1955; right, 54 MacDougal Street

The 1820 Ludlow -Weeks House, West Village An 1820s-era house at 54 MacDougal Street — best known as part of Vice President Aaron Burr’s onetime estate and as the jewelry shop in “Men in Black” — was torn down in July. Ajax Investment Partners, which paid $4.3 million for the property last year, sold the now-vacant land for the same price to New Canaan, Conn.–based Drum Hill Partners in October, property records show. Ajax had filed plans to build a five-story, four-unit residential building on the site.

5Pointz, Long Island City The graffiti haven in Long Island City lost much of its soul in November when owners Jerry and David Wolkoff whitewashed the street art decorating its walls. The warehouse-like building at 22-44 Jackson Avenue remains, but not for long. A federal judge’s ruling allowed the Wolkoffs to proceed with demolition of the structure to make way for two residential towers. The City Council approved the plans in October, after the Wolkoffs agreed to build and staff the buildings with 100 percent union workers. The opposition, led by the artist community, lost a bid for a court order halting development.

5POINTZ PHOTOGRAPH: COURIER/TWITTER; MACDOUGAL STREET: GREENWICH VILLAGE SOCIETY FOR HISTORIC PRESERVATION 62 January 2014 QUEENS www.TheRealDeal.com

Roseland Ballroom, Midtown The death knell has sounded for the Roseland Ballroom. The historic entertainment venue — which has hosted everyone from Fred Astaire to the Rolling Stones — will hold its final round of concerts in March and April, with Lady Gaga bringing the house down. Shortly after that, Algin Management will literally bring it down, in an effort to build a 50-plus-story, 450,000-square-foot mixed-use building. Roseland arrived in New York in 1919, at 1658 Broadway, then moved to 239 West 52nd Street, where it occupies a full block. Continued on page 102

www.TheRealDeal.com January 2014 59

Year in Review

Records shattered as listings get pricier

New York and nation saw new superlatives in pricing, size and height in 2013

By Julie Strickland he adage says that records were made to be broken, and 2013 proved that in real estate, with a series of new standards set, from the priciest listings in Manhattan and Brooklyn to the tallest building in the country. Here’s a tally: City’s priciest listing: A whopping 62,000 square feet of space at the storied River House, long in use as a private club, became the city’s priciest listing ever, with a $130 million price tag. Listed in October by Brown Harris Stevens superbrokers Kyle Blackmon and John Burger, the five-story private home at 447 East 52nd Street includes an 82-foot swimming pool, tennis court, screening room, wine cellar, full spa and gaming room. The River House property wasn’t the first to set a record last year. In fact, the listing unseated the penthouse at the Pierre Hotel, which Barbara Digan Zweig, widow of financier Martin Zweig, first listed in March for $125 million. (The price was later cut to $95 million.) Days after, hedge fund founder Steve Cohen’s One Beacon Court penthouse listed for

The River House on East 52nd Street was the city’s priciest listing ever at $130 million.

1WTC was awarded the designation of tallest building in the U.S. in November. Right, The Copper Beech home and estate in Greenwich, Conn., is the nation’s most expensive residential listing at $140 million.

$115 million. And Steven Klar’s triplex penthouse at CitySpire at 150 West 56th Street in Midtown returned to the market with the same $100 million price tag as before, but with Klar marketing the home himself instead of going with a broker. Previously, the condominium was listed with Douglas Elliman’s Raphael De Niro. City’s priciest townhouse listing: A 40-foot-wide townhouse at 12 East 69th Street on the Upper East Side is asking $114 million, and with that price tag is the most expensive townhouse yet to come on sale in New York City. Listed by Paul Anand and Gabriella Dufwa of the Corcoran Group, the 19-room home was built in 1883 and sprawls across 20,000 square feet of interior space and 2,500 square feet of outdoor space. A threetiered roof, heated indoor saltwater pool and limestone façade are among the luxury property’s other perks. Most expensive Downtown condominium sale: Though the penthouse at 56 Leonard in Tribeca is in contract for $47 million and Walker Tower’s penthouse in Chelsea is in contract for more than $50 Continued on page 98

NYC agent count surges

Brooklyn leads way with fastest growth in the past year, followed by Manhattan

By Guelda Voien ew York City real estate had an active 2013, to say the least, so it should come as no shock that the number of agents and brokers licensed in the five boroughs increased. The jump was concentrated in Manhattan and Brooklyn. In Manhattan, headlines about mega-luxury apartments and reality shows about the high-flying brokers who sling them prompted many to get into the business, while in Kings County the continuing tide of gentrification (and its attendant rising rents) may have brought on the nearly 10 percent increase in licensed agents. The number of licensed real estate salespeople in New York City grew by 7.2 percent, to 29,503 in 2013, from 27,530 in 2012, data from the New York State Department of State provided to The Real Deal show. In Manhattan alone, the number was

60 January 2014 www.TheRealDeal.com

15,798, up 7.4 percent from 14,708 in December 2012. In Brooklyn, the ranks of salespeople ballooned 9.2 percent, to 5,210 from 4,772, the data show. In the Bronx, there were 54 new agents

fewer than 50 new licensees joined the ranks, to reach a total of 1,408 salespeople in Richmond County. The volume of licensed brokers citywide ticked up slightly as well, to 23,690

2013 growth in licensed agents in NYC Borough

2013

2012

change

Brooklyn

5,210

4,772

9.2 percent

Manhattan

15,798

14,708

7.4 percent

Queens

5,887

5,538

6.3 percent

Bronx

1,200

1,146

0.4 percent

Staten Island

1,408

1,366

0.3 percent

Total citywide

29,503

27,530

7.2 percent

Source: Information provided by the New York State Department of State.

licensed with the state last year, bringing the total in the borough to 1,200. In Queens, the ranks swelled 6.3 percent, to 5,887 from 5,538. And on Staten Island,

from 23,134 in 2012, an increase of 2.4 percent. Agents are typically greener salespeople, while licensed brokers must have at least two years of industry expe-

rience and pass a licensing exam to earn the designation. While the state figures do not distinguish residential from commercial brokers, anecdotal evidence suggests that the bulk of agents are in the residential sector. Yet while commercial leasing had an upand-down year and may have even shed brokers, the commercial sales industry thrived, said David Behin, head of investment sales at commercial and residential brokerage MNS. MNS’s commercial team is “actually going to be growing significantly,” by 15 brokers this year, up to about 25, Behin said. In the two years since MNS launched its investment sales division in 2011, his firm has grown from a solo shop to nine brokers. The uptick in commercial brokers was driven at least partly by the bevy of overseas investors looking to park cash in New York City real estate, he said. Continued on page 106

www.TheRealDeal.com January 2013 65

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A Partnership of Buttonwood Residential Brokerage, LLC and Thor Equities, LLC. Town Residential LLC is a licensed real estate broker, proud member of REBNY, and abides by equal housing opportunity laws . 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. This is not intended to solicit property already listed.The number of bedrooms listed above is not a legal conclusion. Each person should consult with his/her own attorney, architect or zoning expert to make a determination as to the number of rooms in the unit that may be legally used as a bedroom.

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DAY IN THE LIFE OF:

Nikki Field

The high-powered Sotheby’s broker talks about working with Chinese buyers, watching her daughter on CNN and cold calling clients

Sotheby’s International broker Nikki Field starts her day extra early so she can get on the phone with clients in China.

Sotheby’s International broker Nikki Field

I’ve already emailed to him, but we both

[Extell’s] One57 that way. I called my

is a 20-year industry vet with a slew of

know that’s going to change 12 times. He’ll

clients first, said this is what’s happening,

notable deals under her belt, including the

get me to the hairdresser, another daily

soon we’re going to be able to show it and

sale of a full-floor unit at Extell’s Stanhope

thing that takes about 20 minutes.

you need to come to town the first week of

at 995 Fifth Avenue for roughly $30 million and the $48 million sale of former Tommy Hilfiger CEO Joel Horowitz’ Tranquility estate in Lake Tahoe. Here’s a look at her typical day, in her words. 4:00 a.m. Sometime between 4:00 and 4:15, eyes still closed, I start to prioritize my day. By 4:15 a.m. I’m drinking coffee and doing my emails.

schedule is about showing. That’s my first priority. You can’t sell it unless you get the customer’s schedule.

Brown.

12:00 p.m. Find me a broker who goes

6:00 p.m. I have a block in every day that

out for lunch in Manhattan, and that’s

I’m calling people who have no idea they’re buying or selling right now. They haven’t

a dilettante broker. Lunch is our most properties. If I don’t do lunch showings

hours opposite, so I must do it before 9 in

every day, I’m not getting my message

the morning or after 9 at night.

out. People are not seeing this property

Brazilian fitness instructor. I’ll follow that

5:30 p.m. I head back to the office for my daily meeting with my partner, Kevin

time is spent talking to China. It’s 12 or 13

I have a trainer, Claudia, my fabulous

the year, and five of them bought. Field’s daughter, CNN reporter Alexandra Field

people in, and you have to work around

precious time. Right now, I have 14

and I go to David Barton [gym] nearby.

me during 10 days in the first two weeks of

showing by 9:15 or 9:30. Religiously, my

5:15 a.m. A tremendous amount of my

6:00 a.m. I [live] on Park and 87th Street,

January. In 2012, I had 11 billionaires visit

9:15 a.m. I’m generally at my first

Field begins each morning with a workout at David Barton Gym.

called me, they haven’t emailed me [but I contact them]. 6:30 p.m. Almost every day I’ll either meet a client at my club [the Metropolitan

and I’ve got to send more email blasts,

Club at 1 East 60th Street], or another

call more brokers. So lunch is generally a

broker, and then my husband will meet us .

hard-boiled egg in the office or granola bar in the car.

with the treadmill. I monitor my daughter

1:00 p.m. I will get into the office between

Alexandra [a reporter at CNN] while I

showings and have a team meeting. And

do that. I always try to catch one of her

as I’m leaving a showing or waiting for the

morning stories. Then I email or text her

next one, I’m often emailing my client —

and critique her makeup, which she hates.

the seller is always anxious to know how a

7:30 p.m. Then we’ll have dinner. I don’t

Advance viewings of One57 helped Field sell five of the tower’s units.

do a lot of work over dinner, because by then, my mind is pretty fried. My favorite dinner spots are the Metropolitan Club, the new Bilboquet, and we are regulars at Le Cirque.

showing went.

9:30 p.m. Rod delivers us home, where

7:15 a.m. I head home, and while I’m getting ready, I will have Alex on TV

3:25 p.m. I call my husband Stephen to

and FaceTime with my other daughter,

check in. We speak at least six times a day.

I tackle more emails. When I’m done, my

Field typically stops at the Metropolitan Club as her day winds down.

husband and I will watch CNN again and try to catch an Alexandra spotting.

Amanda, in Florida, where her husband is doing a cardiology fellowship in St.

4:00 p.m. A lot of my sales, particularly

10:00 p.m. Do not call me after 10.

Petersburg. They just had a baby.

to international people, are new

I won’t shut down if there’s a deal in

development. Developers will often give

negotiations or if I’m still on the line with

8:45 a.m. My driver Rod comes every day

personal invitations to brokers, and I really

China. But if there’s no work, in order to

at 8:45, unless I have an 8:30 showing.

like to take advantage of that because it’s

We’ll review the schedule for the day, which 64 January 2014 www.TheRealDeal.com

an early introduction. … I sold a lot of

get up by four, I’ve got to be to asleep by 10. Field often resorts to a quick lunch of a hard boiled egg.

By Julie Strickland

PHOTOGRAPH OF Nikki Field FOR THE REAL DEAL BY Christian Fernandez

BRITISH GLAMOUR

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A r c h i t e c t u r e R e v i e w | Ja m e s G a r d n e r

A building with broad shoulders

Related and Robert A.M. Stern take modest look to new extreme at High Line rental

By James Gardner obert A.M. Stern has long been associated with the historicist strain of contemporary architecture. But he would likely insist that his goal is contextualism — the creation of buildings that harmonize with the environment into which they are set. This distinction is especially pertinent in regards to one of his latest New York City projects: 500 West 30th Street, which is being developed by the Related Companies. Related — which is headed by CEO Jeff Blau and is, of course, developing the massive Hudson Yards site nearby — is planning to have the nearly 390-unit tower ready for occupancy this spring. The building, which as of my visit last month had already topped out and been mostly clad, is by any standards an historicist building, in the sense that, to superficial inspection, it looks as though it was built in an earlier age (sometime in the 1920s, perhaps). And yet it avoids the more overtly ornamental feeling that we usually associate with Stern’s historicist style, whether in the vaguely mannerist details at the base of 15 Central Park West, or in the Anglophile idiom, derived from the royal palace of Hampton Court in London, that marks the red brick Chatham at 181 East 65th Street, with its fastidious accents in white limestone. That may be because, unlike those other buildings, 500 West 30th is a rental and is located in the gritty (though gentrifying) area around Hudson Yards. In addition, it aspires to resemble the general building stock in its vicinity on the Far West Side. At 500 West 30th Street Stern invokes commercial and industrial buildings of the early 20th century, and those buildings were conceived in a rather spartan style. But because of the dominant aesthetic of those times, such buildings do not display the denuded functionalism that would come to define post-war architecture. At Stern’s West 30th Street building, he seems to strive to reproduce, and to make a virtue out of, that pared-down language of early 20th century functional architecture, even though that functionalism did not preclude a few classical flourishes. It may be that the grittiness invoked here is an artificial construct, but it remains the dominant aesthetic and one of the main selling points of this part of Manhattan. And 500 West 30th Street is a 32-story monument to that aesthetic. It

66 January 2014 www.TheRealDeal.com

is a broad-shouldered building, with little of the self-conscious refinement of the Chatham or 15 Central Park West. In some respects, it recalls Stern’s more recent Harrison at 350 Amsterdam

At ground level is about 7,200 square feet of retail space surmounted by a two-story passage characterized by the spare geometry of vents and regularly protruding bricks. Above that are three

Related’s under-construction rental at 500 West 30th Street. Insets: top, architect Robert A.M. Stern; bottom, Related’s Jeff Blau.

Avenue. But whereas that building’s aesthetic remained one of residential architecture, this new building, despite being residential, is inspired by the functional language of commercial and manufacturing buildings. The volumes of the West 30th Street building, especially on the south-facing

floors of mullioned windows that charmingly recall, once again, an office or an institutional building rather than a residential structure. These, in turn, are topped by somewhat medieval-looking merlons (vaguely recalling a rook in chess), an ingenious touch since this is precisely the sort of “historicist” detailing that might have

But if Stern is famously a student of architectural history — his nearly 1,100page book “Paradise Planned: The Garden Suburb and the Modern City” was just published — he has always been somewhat idiosyncratic in his use of earlier vernaculars. This is seen at various points in the treatment of windows in the new building, especially along the northern side. Almost without warning, even arbitrarily, darker metallic frames appear around four clustered windows at a time. And as so often with Stern’s buildings, the result somehow succeeds in looking traditional, even though it is without any real architectural precedent. It’s difficult to look at Stern’s latest building without marveling yet again at the revolution in taste that it represents, together with all the other luxury residential buildings that are planned for this neighborhood or that have already been completed. As recently as 15 years ago, maybe even 10, few people, if any, would have chosen to live in this part of Manhattan. What is now the High Line was the rusting and defunct remains of an elevated rail track. Then, with the opening of the park, what had been an eyesore became a thing of exemplary beauty, and some of the most adventurous architecture of the past decade (if not necessarily the best), clamored to rise up around it. Of these new buildings — such as Neil Denari’s HL23 and South African architect Lindy Roy’s 519 West 23rd — few, if any, occupy as privileged a position as 500 West 30th Street, which stands over the point where the tracks curve sharply westward to form the loop that ends at 34th Street. Indeed, the yet-to-open third phase of the High Line includes plans for a small bowl-shaped amphitheatre of sorts called “the Spur,” covered in lush plants, at the point on 30th Street where the tracks take a brief and sudden detour to the east. This striking addition will lie at the base of Stern’s new building, and there is every reason to suppose that, in their striking contrast, they will play well together. Indeed, 500 West 30th Street is not a striking building that attracts attention

Stern’s 500 West 30th Street is not a striking building that attracts attention to itself, as some of Stern’s other buildings do. Rather, it aspires more modestly to appear as though it had always been at the corner where it now rises. side, are extremely spare and simple — and only a little more complex on the north side. The building rises over a six-story base, which is perhaps the most self-consciously designed part of the project.

shown up on a building of this type and in this place a century ago. The windows are the best part of the design, and continue from the base all the way to the top of the building, which is crowned by a perforated and decorative brick summit.

to itself, as some of Stern’s other buildings do. Rather, it aspires more modestly to appear as though it had always been at the corner where it now rises, and with regard to that more modest ambition, it has succeeded. TRD

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Created by INNOVART.US Portrait MARIA GALLI

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info@biscaynebeachresidences.com | www.BiscayneBeachResidences.com NOW SELLING AT PRE-CONSTRUCTION PRICES | PRIVATE PRESENTATIONS: 305.521.0985

ORAL REPRESENTATIONS CANNOT BE RELIED UPON AS CORRECTLY STATING THE REPRESENTATIONS OF THE DEVELOPER. FOR CORRECT REPRESENTATIONS, MAKE REFERENCE TO THIS BROCHURE AND TO THE DOCUMENTS REQUIRED BY SECTION 718.503, FLORIDA STATUTES, TO BE FURNISHED BY A DEVELOPER TO A BUYER OR LESSEE. OBTAIN THE PROPERTY REPORT REQUIRED BY FEDERAL LAW AND READ IT BEFORE SIGNING ANYTHING. NO FEDERAL AGENCY HAS JUDGED THE MERITS OR VALUE, IF ANY, OF THIS PROPERTY. All images and designs depicted herein are artist’s conceptual renderings, which are based upon preliminary development plans, and are subject to change without notice in the manner provided in the offering documents. No guarantees or representations whatsoever are made that existing or future views of the project and surrounding areas, are or will be as depicted, or that any other features, amenities or facilities depicted by any such artist’s conceptual renderings or otherwise described herein, will be provided or, if provided, will be of the same type, size, location or nature as depicted or described herein. These materials are intended to be an offer to sell, or solicitation to buy a unit in the condominium. Such an offering shall only be made pursuant to the prospectus (offering circular) for the condominium and no statements should be relied upon unless made in the prospectus or in the applicable purchase agreement. In no event shall any solicitation, offer or sale of a unit in the condominium be made in any state or country in which such activity would be unlawful. We are pledged to the letter and spirit of U.S. Policy for the achievement of equal housing throughout the nation. We encourage and support an afﬁrmative advertising, marketing and sales program in which there are no barriers to obtaining housing because of race, color, sex, religion, handicap, familial status or national origin. This project is being developed by Biscayne Miami Partners LLC, a Florida Limited Liability Company, which was formed solely for such purpose. Eastview Development and GTIS Partners are afﬁliated with this entity, but neither of them is the developer of this project.

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Q&A

Lowering expectations for 2014 Real estate pros make predictions on everything from de Blasio’s first term to prices, but agree that market can’t keep up with last year’s pace

By Melissa Dehncke-McGill ure, nobody knows what’s actually going to happen in the New York City residential real estate market in the New Year. But it’s still fun to guess. In this month’s Q&A, The Real Deal asked residential brokerage heads, market analysts and developers to give us their best educated guesses on everything from residential pricing to how the beginning of Mayor Bill de Blasio’s term in City Hall will impact the market. Most seemed to be in agreement on at least one thing: the 2014 market will not be able to sustain the pace of the 2013 market. But, they said, that’s more a function of the record-setting pace of nearly every metric in 2013 than it is of the coming year. “It’s unrealistic to expect deal volume to compete with what we just experienced, so I would lower my expectations on the future pace of contract activity and ultimately price action for 2014,” said Noah Rosenblatt, the founder of brokerage and research platform UrbanDigs.

Shaun Osher

founder and CEO, CORE NYC’s residential market has strengthened beyond what many could have anticipated a year ago. What are you expecting to see in the New Year? Where do you expect the market to be a year from now? A year from now I think we will be in a more stabilized place and I don’t think there will be the rate of appreciation in property value that we have seen over the last 12 months. We have actually seen a bit of a slowdown in appreciation on values and a little bit of a slowdown on some absorption.

I expect the dynamic to change slightly because buyers feel that value has reached a threshold. Buyers are going to start saying no to irrationally exuberant values. So I think we are going to see a more stabilized market where the momentum will go more to the buyer and there will be more equilibrium. Sales volume hit the second-highest level in Manhattan in 24 years in 2013’s third quarter. What are you expecting when it comes to deal volume in the coming year? It’s going to have to slow down at some point, but I don’t see that happening over the next 12 months because of the short-

While Rosenblatt and others said a shortage of inventory will continue into the New Year and will lift prices, some said buyers have hit their limit on price increases. That’s partly because much of the inventory that is coming on the market is being “posited toward the ultra-luxury buyer,” said Core CEO Shaun Osher, who noted that the “affordable luxury” sector —between $1.5 million and $3 million — is still seeing a void of quality product. He said anything listed in that price range this year will do well. In addition, several sources said they didn’t expect de Blasio’s first year in office to impact market conditions immediately, partly because it will be hard for him to get anything passed in Albany because of the state elections this year. But they said, depending on what the new mayor does this year, his presence could impact the pipeline of residential product more long-term. For more on which areas of the city are expected to do best and worst, what developers are looking out for, and what to anticipate in terms of a residential bubble, we turn to our panel of experts. Which sectors of the market do you expect to perform well in NYC this year? The market that has the largest void is the affordable housing in the luxury segment — anything priced between $1.5 million and $3 million. There is a void of good quality product in that category. Anything at that price point should do better than any other segment of the market. Which geographic areas do you expect to struggle most in NYC in the coming year? Anywhere that is too pioneering, where they are demanding prices that are too high for the neighborhood. It will be in-

I think that the luxury sector of the market is going to feel some pressure ... . Any developer that is expecting prices in The residential inventory shortage is obviously one of the big factors driving mar- a neighborhood that won’t command them ket conditions right now in NYC. What will be caught with their pants down.” are you expecting on the inventory front in the coming year? There is not much of a pipeline of new product coming on the market in terms of numbers. We are still historically low with respect to inventory. There are less than 5,000 available units on the market right now. We are at 50 percent of where we should be. There are a number of new projects coming on the market, but in total unit numbers, it’s going to have an insignificant impact on inventory. I think there is going to be a housing shortage and I think the shortage is going to be exacerbated by the fact that a lot of the inventory that we are going to see coming on the market is going to be posited toward the ultra-luxury buyer. Residential sellers had the upper hand in 2013. Do you expect that to continue in 2014 or do you expect that dynamic to change? 64 July 2013 www.TheRealDeal.com

Shaun Osher, Core

age. Absorption on market-rate properties will be very quick. Good product in a strong market will always sell very quickly. The luxury market obviously did extremely well in 2013, but some have expressed concerns that developers are now paying too much for land and banking on getting per-square-foot prices that are unrealistic. What do you expect from the luxury sector in the coming year? I agree with that statement and I think that the luxury sector of the market is going to feel some pressure, especially where developers need to meet certain prices because of the land cost and construction cost. Any developer that is expecting prices in a neighborhood that won’t command them will be caught with their pants down.

teresting to see what Hudson Yards does, but I am very bullish on West Chelsea and Tribeca and the fringe areas around those neighborhoods. The neighborhoods that could be disappointing would be Hell’s Kitchen and pockets of the Far East side. What are your thoughts on a residential bubble? Do you have concerns about that in the coming year? I think certain segments are in a bubble. There is always a concern about an unforeseen event that is going to initiate a correction or adjustment. What new, big residential projects (other than One57 and 432 Park) do you expect to generate the most buzz in the NYC residential market in the coming year? Larry Silverstein’s Four Seasons [hotel

and condo] project in the Financial District will be one to pay attention to because it’s uncharted territory where prices have not been tested. What impact, if any, do you think the new mayoral administration will have on the residential market in the coming year? In the next 12 months, almost none. But it will have an impact into the pipeline of product for the next five years.

Noah Rosenblatt

founder, UrbanDigs LLC Where do you expect the NYC residential market to be a year from now? When we look at deal volume and year-over-year price action, 2013 was certainly a record year, but I am unsure the market can sustain that pace for another year. It’s unrealistic to expect deal volume to compete with what we just experienced, so I would lower my expectations on the future pace of contract activity and, ultimately, price action for 2014. At the moment, I think conservative price gains, in the 4 percent to 7 percent [range] is a safer assumption looking ahead the next 12 months. That would put us on a pace that is roughly half of the record-setting pace of 2013. What are you expecting to happen with the inventory shortage this year? Buyers have been dealing with declining supply since early 2009, the height of the credit crisis here in Manhattan. Only recently are we starting to see a ‘tick up’ in new monthly supply, but nothing that would move the markets in a noticeable way. As long as there is a continued lack of fear in the marketplace and pressure on www.TheRealDeal.com January 2014 71

Q&A trade-up buyers, I think inventory trends will continue to favor the sell side. By trade-up buyers, I mean those apartment owners who need to sell their smaller apartment and then immediately upgrade to a larger property. These buyers realize very quickly how tight inventory is and how leverage has shifted to the sell side. While market forces help them sell their smaller unit quickly, they may find themselves with very few options — or priced out of the higher price points. Therefore many of these would-be sellers are deciding to remain out of the markets altogether, further limiting supply. Are you expecting sales activity to continue quickening or to slow down soon? Given how furious contract activity was in 2013, I just can’t buy into a repeat of that pace. That doesn’t mean prices are going to fall, it simply means that I believe the pace we saw in 2013 to be unsustainable. An interesting way to look at it is that if we slow down 30 percent from 2013’s record levels of deal volume and price action, that would still put us on par for a solid 2014. I would put myself in that camp. Do you have concerns about a residential bubble bursting in the coming year and what warning signs will you be looking for? I have a hard time believing it’s a bubble if there is no widespread credit expansion. Yes lending standards opened up a bit after tightening up big time in 2010, but from where I am standing, banks have not loosened [too aggressively] over the past two to three years as policy-driven markets reflated. Who knows how long markets will react positively to federal policies. We all are wondering where prices would be without all these policies. The warning signs will likely first appear in credit spreads and then equities and bond markets will react. That’s how it started last time, in 2007, so that is where I’ll be looking again. The hard part is figuring out whether a minor blip is just that, a blip on a longer-term positive trend line, or if it’s a true warning of some bigger event.

Steven Goldschmidt

senior vice president, Warburg Realty What are you expecting on the inventory front in the coming year, and how do you expect that to impact market dynamics? Inventory will continue to fall short of demand. We don’t expect any major increase in inventory in the coming year, except perhaps in Harlem. New mega-developments, such as Hudson Yards, and the new towers along 57th Street, are still years away from coming to market. And smaller, trendy boutique [projects] won’t have much of an effect on inventory. 72 January 2014 www.TheRealDeal.com

What do you expect from the luxury sector in the coming year? The price per buildable square foot paid [by developers] for some locations is a cause for some hesitation, and luxury buyers are especially [price] savvy. Developers must still build the right building with the right amenities in the right location to achieve optimum pricing. Which geographic areas do you expect to perform well in NYC in the coming year? We expect to see significant activity in Harlem as well as parts of Brooklyn and Queens. Some properties in Bed-Stuy are being listed for as much as $1 million to $2 million … and we recently sold a townhouse in Long Island City for $2 million. Which geographic areas do you expect to struggle most in NYC in the coming year? Parts of the Upper East Side, especially high rise “cookie cutter” apartments, will continue to lag behind other neighborhoods. What do you expect the biggest challenges to be in the coming year? The lack of inventory remains the toughest challenge in terms of satisfying demand for apartments instead of driving buyers to outlying suburban areas. What aspects of the current political environment do you think will impact the market in the coming year? With the economy on the upswing and in a midterm election year, there will be pressure to avoid any major increase in mortgage interest rates. Many New Yorkers are anxious to see how Mayor de Blasio acts on his many campaign promises and how they affect real estate. What new, big residential projects do you expect to generate the most buzz in NYC in the coming year? Attention will certainly be focused on the new towers along West 57th Street, and the start of construction at Hudson Yards and a number of Downtown boutique projects. The industry will be watching these projects to detect any sign of weakness in the marketplace. What trends will you be watching out for in the coming year? New mortgage rules, including the new “Qualified Mortgage” rule will be important to monitor in terms of its effects on borrowing. The QM rule is designed to protect consumers from risky loans. That’s a good thing. But the new law will also establish some hard limits for debtto-income ratios. Borrowers with too much debt may have trouble qualifying for a mortgage in 2014, when the new lending rules take effect. Lenders will continue to be risk averse, and the new Qualified Mortgage Rules will only make lenders more careful.

Noah Freedman

principal, Bond New York Where do you expect the market to be a year from now? I expect continued strength. There is nowhere for the demand to go and our micro-economy is strong and diversified. We will end the year at a higher price point than where we begin. Sales volume hit the second-highest level in Manhattan in 24 years in the third quarter. What are you expecting when it comes to deal volume in the coming year? It cannot sustain that level because there just is not the inventory, but it should be healthy. What do you expect from the luxury sector of the market in the coming year? That is hard to say. There is so much foreign demand for trophy buildings.… Developers take big risks for big rewards — that is the name of the game. Do you have concerns about a bubble? I think we are a long ways off from a residential bubble burst. It takes years to build, and we are in the first inning of this thing. That being said, it is a bubble, it’s always a bubble, timing the bubble is everything. What trends will you be watching out for in the coming year? I think it is the ever-expanding role of the international buyer. I was just in China, and the demand for New York City real estate is unprecedented. What are you expecting out of lenders — either for NYC homebuyers or for NYC developers — in the coming year? I expect them to continue to loosen standards as the market proves itself over time. As always, lenders favor those who don’t need loans. What big brokerage developments are you predicting for 2014? I expect more of the smaller players to be shaken out. You need to be very big or very very small.

Barbara Fox

president, Fox Residential Group Where do you expect the market to be a year from now? I believe the residential market will continue to remain strong until inventory loosens up. Resale inventory is at an all-time low. Fine pre-war co-ops are at a premium, and well-renovated, wellpriced units are selling quickly and with multiple offers.

What do you expect the biggest challenges to be in the coming year? As a broker, we are continually dealing with product shortage and competition among the ever-expanding residential brokerage industry. With inventory low, the biggest hurdle will be getting into properties early in the game and convincing buyers to step up to the plate quickly and forcefully. Securing new exclusives will become increasingly difficult. This also drives home the need for constructive cooperation among those in the brokerage community. Relationships and fair dealing among brokers become paramount.

David Kramer

principal, Hudson Companies Where do you expect the NYC residential market to be a year from now? Never listen to anyone who offers any hint of certainty about what’s going to happen in the market. Our proformas typically show rent growth of 3 percent annually in rentals, and we don’t expect price growth for condos. We try to be reasonably bullish without being exuberantly optimistic. We’re certainly hoping that some of the neighborhoods where we’re developing will have great upsides, but you can’t count on it in any given 12-month period. Some have expressed concerns that developers are now paying too much for land and banking on getting per-square-foot prices that are unrealistic. What do you expect from the luxury sector of the residential market in the coming year? Depending on location, it’s a legitimate concern. I’d like to see more comps with unabated taxes to get a little more comfortable with condominium prices in a post421a landscape. What do you expect the biggest challenges to be in the coming year in the NYC residential market? We’re back in an environment where land prices are escalating, construction costs are escalating, equity is enthusiastic, and yet, as a developer, you have to stay focused and disciplined about the projects you take on and create reasonable expectations. What impact, if any, do you think the new mayor will have on the market? So far, de Blasio has made fantastic appointments [for] the first slots for transition team chairs, first deputy mayor and police commissioner. I expect he will continue the good work and help keep the residential marketplace robust, dynamic and revenue producing. If he ends up doing something about the outrageous tax disparity for new rentals and condos, that would be a plus, too. TRD

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*If closing does not occur before expiration of the conditional approval, credit report and other documents may need to be updated. Results of the mortgage affordability estimate/prequalification are guidelines; the estimate is not an application for credit and results do not guarantee loan approval or denial. All home lending products are subject to credit and property approval. Rates, program terms and conditions are subject to change without notice. Not all products are available in all states or for all amounts. Other restrictions and limitations apply. Home lending products offered by JPMorgan Chase Bank, N.A. ©2013 JPMorgan Chase & Co. 21244 0828

SOUTH FLORIDA

Real estate news in the Sunshine State TheRealDeal.com/miami

REPORT

Macy’s, Bloomingdale’s ink Worldcenter leases The developers behind two of the largest mixed-use projects in Greater Downtown Miami, Brickell CityCentre and Miami Worldcenter, are fiercely competing to attract strong retail tenants. Worldcenter, a massive development with a planned 750,000 square feet of retail space, notched a major victory by signing Macy’s and Bloomingdale’s as anchors. Combined, they are set to

occupy 315,000 square feet. For Bloomingdale’s, the transaction represents its first foray

Rendering of Bloomingdale’s at the Miami Worldcenter

into downtown. Macy’s has an existing Downtown location on East Flagler Street. The lease raises

questions about that store’s future. The nine-square-block Worldcenter site is positioned between Brickell CityCentre and Midtown Miami, and is experiencing a wave of residential development. CityCentre developer Swire Properties has partnered with the Whitman family, which built and owns the Bal Harbour Shops, for the retail component of the $1.1 billion project in the financial district. No retail tenants have been announced, but recent reports in-

dicate Mario Batali’s Eataly market is set to sign a lease there.

Real estate industry mobilizes for Art Basel South Florida developers and brokers hustled to promote their residential projects and existing buildings to wealthy patrons of Art Basel Miami Beach, which drew tens of thousands of art enthusiasts to Miami last month. Recognizing the potential for making contacts that could lead

to sales, more than 20 real estate events were held throughout Miami-Dade County alongside the official Art Basel gatherings. Industry professionals bounced from party to party to chat up potential buyers. Real estate brokerages Douglas Elliman and EWM hosted exclusive receptions at the two largest Art Basel locations. Elliman promoted its Miami and New York developments at the VIP Collectors Lounge inside the Miami Beach Convention center. EWM and affiliates at Christie’s International Real Estate sponsored Art Miami 2013 in Midtown and hosted an invite-only reception. Faena Miami Beach developer Alan Faena also took the A-list route, hosting a private dinner Faena House Miami Beach

party at the Collins Avenue site of the $1 billion mixed-use project. Guests included acclaimed director Baz Luhrmann and his Academy Award-winning wife Catherine Martin, who are working with Faena to reposition the former Saxony Hotel as part of the broader development. Leonardo DiCaprio and film mogul Harvey Weinstein also attended the bash.

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Soccer legend David Beckham’s attempt to bring a Major League Soccer franchise to Miami took several turns last month. Beckham’s investor group, Beckham Brand Limited, identified the southwest section of Biscayne Bay seaport PortMiami as a potential MLS stadium location. He asked Miami-Dade County officials to consider a 25,000-seat stadium, marina and waterfront promenade for the 25-acre site. A group of commissioners gave initial approval to plans for the PortMiami zoning district that would allow private development, but they do not include a stadium. Nevertheless, the county was ready to begin talks with Beckham on a site. “We hope to send a strong message to MLS and Beckham’s group to bring them here,” Mayor Carlos Gimenez said. By Eric Kalis

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

NATIONAL MARKET REPORT

The longtime headquarters of the Washington Post is selling for $159 million to Carr Properties.

Ohio Barry Sternlicht’s Starwood Capital Group acquired a $1.6 billion majority interest in seven regional malls — three in Ohio, two in California, one in Indiana and one in Washington State — from the Westfield Group in late November, Starwood said. The seven malls contain 7.9 million square feet of retail space and have an average occupancy of approximately 96 percent. Westfield kept a 10 percent common equity interest in the properties. In Ohio, Starwood now has majority interest in Belden Village Mall in Canton, Franklin Park Mall in Toledo, and Great Northern Mall in North Olmsted. In California, the company will now operate Parkway Plaza in El Cajon Barry Sternlicht and Plaza West Covina in West Covina. The deal also included Southlake Mall in Merrillville, Ind., and Capital Mall in Olympia, Wash. “Over the last 18 months, we have assembled a portfolio of 19 high-quality regional malls and retail centers with an aggregate purchase price in excess of $3.2 billion,” Starwood Retail Partners CEO Scott Wolstein said in a statement. “We believe that regional shopping malls offer an attractive value proposition for our partners.” The company is also on the hunt for additional properties.

Washington D.C. The longtime headquarters of the Washington Post is being sold to Carr Properties by the newspaper’s former parent, Graham Holdings, for $159 million, the newspaper reported. The Post, which was recently sold to Amazon.com founder Jeff Bezos, will continue to rent space in the building at 15th and L streets NW until it finds a new location. The building, which has served as the Post’s headquarters for 63 years, could be redeveloped as a mixed-use project. The price-per-foot on the deal, which is expected to close in March, approaches record levels for downtown property, according to John Sikaitis, a senior vice president at Jones Lang LaSalle. “The Post site is a little bit off the beaten path by a block or two, but you could argue that [the Carrs] have the opportunity to kind of create a Main and Main there,” Sikaitis said. “They will create a destination, which that area does not have right now.” Carr Properties plans to expand its real estate holdings to $1.5 billion from about $800 million ahead of a potential initial public offering.

Los Angeles

Barry Bonds slashed the asking price for his LA home to $23.5 million.

Former MLB slugger and suspected steroid user Barry Bonds chopped the price of his home in Beverly Park to $23.5 million from $25 million, Zillow reported. He purchased the home in 2002 for $8.7 million. The roughly 17,000-square-foot home includes a 12-person theater, a 2,100-squarefoot sports court and a guesthouse.

Boston district are underway. Houston, home to a number of major oil and energy companies, is now one of the top cities in the U.S. for foreign investors. “Houston has gained broad acceptance as a top-tier market,” Greg Kraus, the managing director at Atlanta-based Invesco told Bloomberg News. The city’s commercial market is also doing well. Greenway Plaza, a 4.4 million-square-foot, Class A office complex, sold in September to affiliates of Cousins Properties for an undisclosed amount, in what was reportedly one of the largest real estate transactions in Houston’s history. It is 92 percent leased with tenants including Occidental Oil & Gas, Invesco, Transocean Offshore and ExxonMobil Corp.

Chicago Ivanhoé Cambridge picked up the twin office buildings 10 and 120 South Riverside Plaza in Chicago’s West Loop early last month for about $361 million. The deal was the priciest office deal to close in The twin office buildings at 10 and 120 South Riverside Plaza sold for $361 million.

Tom Brady and Gisele Bundchen

In order to get their new home in the Boston suburb of Brookline completed by July, New England Patriots quarterback Tom Brady and model Gisele Bundchen are employing around 100 workers a day, TMZ reported. The roughly 14,000-square-foot mansion will reportedly be equipped with a spa, wine cellar and yoga studio.

New Jersey

Houston The condo market in Houston is booming, according to a study published by the Real Estate Center at Texas A&M University. The study found that sales increased by 25 percent in the first nine months of 2013. There were 5,067 condos sold between January and September, with the median price rising 7 percent year-

Houston condo sales jumped 25 percent in the first nine months of 2013.

over-year to $140,000. Reflecting the increased demand, projects like the four-story, 36-unit condo called Morrison Midrise in the Heights area and a 26-story, 46-unit luxury high-rise in the uptown 76 January 2014 www.TheRealDeal.com

2013, according to research firm Real Capital Analytics. The 1.4 million-square-foot buildings, which span two full city blocks and are 89 percent leased, were sold by the Dallas-based real estate investment trust TIER REIT. “Chicago is one of the key U.S. cities we’ve set our sights on in order to build a solid national high-quality office building platform,” Ivanhoé Cambridge executive vice president Adam Adamakakis told the publication Multi-Housing News. While the Riverside Plaza deal was the priciest of 2013, the pending sale of the Citigroup Center at 500 West Madison Street to KBS REIT III is expected to have an even bigger price tag of $425 million. That deal has not yet closed.

Rosie O’Donnell paid $6.4 million for a Saddle River, N.J., mansion.

TV personality Rosie O’Donnell recently closed on a $6.4 million mansion in Saddle River, N.J., Realtor.com reported. O’Donnell’s new 5,200-squarefoot, five-bedroom home has seven fireplaces, a wood-paneled library, wine cellar and elevator. The grounds also include a grotto, hot tub and pool house.

new year, new home NEW YORK CITY, TRIBECA DRAMATIC LOFT | $16,500/month | Web#9067682 Richard Orenstein 212.381.4248

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TRIPLEX PENTHOUSE | $35,000,000 | Web#9419759 Stephen McArdle 212.521.5753 | Robin Schneiderman 212.521.5790

COUNTY ESTATE | $5,895,000 | Web#99044570 Patti Feiber 203.979.8320

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LANDMARK ESTATE | $2,249,000 | Web#9297741 Christine Lane 201.478.6735

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happy new year from the halstead family Halstead Property, 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 and all information should be confirmed by customer. All rights to content, photographs and graphics reserved to Broker.

ON THE MARKET Clarion selling stake in Apple’s Meatpacking building International investment firm Clarion Partners has put up for sale its minority interest in the three-story building in the Meatpacking District that houses the Apple Store, insiders told The Real Deal last month. Clarion, headquartered in Midtown, owns just 401 West 14th Street under 50 percent of the 60,000-square-foot building at 401 West 14th Street, at the corner of Ninth Avenue. The sale is expected to value the entire building at about $175 million to $200 million, insiders said. Clarion partnered with Taconic Investment Partners to purchase the building in December 2005 from the Plymouth Beef Company for $34.55 million, city records show. Eastdil Secured’s Douglas Harmon and Adam Spies are representing Clarion in the recapitalization of the property, which includes selling Clarion’s stake

Midtown East development site asking $55M

11 Park Avenue

A development site with up to 63,195 buildable square feet at 11 Park Avenue is on the market with an asking price of $55 million. The property, located on the east side of Park Avenue between 34th and 35th streets, is currently configured as an eight-story, 150-space parking ga-

78 January 2014 www.TheRealDeal.com

rage, and can be vacated with 180 days’ notice. Zoned C53, the site can support either a commercial development of 63,195 square feet or a residential development of up to 50,556 square feet by taking advantage of an inclusionary housing bonus. Massey Knakal’s Robert Knakal, John Ciraulo, Jonathan Hageman, Craig Waggner and Charlotte Myers are handling the sale.

Rare Borough Park portfolio hits market asking $50M A portfolio of apartment buildings in Borough Park, Brooklyn, has hit the market with an asking price of $50 million, the brokers representing the seller told The Real Deal. Gabe Saffioti and Nicole Rabinowitsch of Eastern Consolidated are marketing the four buildings, which hold 193 rent-regulated units and are located between 45th and 47th streets and 12th Avenue. A family investor masked by LLCs has owned the portfolio for more than 30 years, the brokers said, and is looking to exit in order to focus on other projects. The family did not want to be identified, Saffioti said. The units are all rent-stabilized, with the exception of five rent-controlled units. Three commercial spaces, which house a doctor, a dentist and an unrelated real estate management company, are also located in the buildings.

Children’s Aid Society asks $20M for UES townhouse The Rhinelander Children’s Center, an Upper East Side townhouse owned by the nonprofit Children’s Aid Society,

Commercial properties recently placed on the market has officially hit the market for $20 million. Cushman & Wakefield brokers Helen Hwang and Karen Wiedenmann are sharing the listing for 350 East 88th Street with the Tavivian Sporn team at Douglas Elliman. The four-story, 15,405-square-foot site is 50 feet wide. School pro350 East 88th Street grams have included preschool, summer camp and after-school care, but they will wrap up in June, the Wall Street Journal reported.

LES apartment building owner tries for quick profit Keller Williams Realty Empire, based in Brooklyn, is marketing a five-story multi-family building on the bustling Lower East Side for $13 million. The 281 Grand Street property, purchased by Flushing-based LLC Jacob Re last year for $8.5 million, includes eight large loft-style apartments ranging from 12,000 to 16,000 square feet, according to the listing. Ground-level 281 Grand Street retail totaling 23,000 square feet is also on offer, and the property includes basement storage. The building is next to 283-285 Grand Street, which was demolished following a massive fire in 2010. Compiled by Linden Lim

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Deal Sheet summary

The Deal Sheet, on pages 82 to 92, covers transactions from 11/11/13 through 12/10/13. Please submit future deals to deals@therealdeal.com.

Sales

Overview

By type

Property sales Deals

Dollars

$682,640,000

Financing 11 11

Buildings Aggregate value

Development

24.88

Hotel

0.00

Industrial

0.00

Mixed-use

10.53

Multi-family

244.23

Office

400.00

Retail

3.00

Multi-family

Transactions

By dollar volume (in millions)

Office Retail

$299,725,000

Leases Office

Retail

Total

Leases square feet Office

949,410

Retail

607,293

Total

1,556,703

Office leases Office leases by industry Industry

Leases

Office leases sf by industry

Top tenant reps for office leasing by sf

Industry

Tenant representative

Square feet leased

Advertising & Marketing

21,100

Cushman & Wakefield

293,962

Education

178,237

Jones Lang LaSalle

233,709

Fashion*

273,430

Colliers International

218,000

Financial

50,721

CBRE Group

183,212

Health & Beauty

10,093

Newmark Grubb Knight Frank

64,627

Home Furnishings

8,321

Adams & Co.

45,226

Internet

6,571

Norman Bobrow & Co.

32,708

Legal

48,487

Lee & Associates

24,566

Media

600

ABS Partners

11,165

Medical

7,000

M.C. O'Brien

9,782

NGO

222,370

Sinvin Real Estate

6,200

Other

18,829

Cassidy Turley

4,071

Public Relations

1,400

SKH Realty

3,763

Real Estate

47,520

Susan Penzner Real Estate

1,598

Science & Technology

51,846

Textiles

2,885

Retail leases Top tenant reps for leasing by sf

Retail leases by industry

Broker

Department Store

165,000

Discount

36,000

Square feet leased

Retail leases sf by industry

Ripco Real Estate

193,200

Discount

SCG Retail

156,650

Fashion

27,754

CBRE Group

60,126

Food & Beverage

46,321

Julius M. Feinblum Real Estate

26,000

Home Furnishings

239,126

Winick Realty

17,753

Other

93,092

Lee & Associates

14,350

Newmark Grubb Knight Frank

12,600

SRS Real Estate Partners

11,000

Sinvin Real Estate

7,350

BCD

5,442

RKF

3,656

STL Realty

3,300

Gotham City Group

2,500

(*includes showroom space)

www.www.TheRealDeal.com January 2014 81

Deal Sheet

Commercial deals in New York City Deals are listed from largest to smallest in square feet leased or bought. The Deal Sheet covers transactions from 11/11/13 to 12/10/13. Please submit future deals to deals@therealdeal.com.

Office leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

501 Seventh Ave

223,616

PVH Corp. / M. Konsker, M. Astrachan, Jones Lang LaSalle; S. Bauer, C&W

Empire State Realty / H. Blair, S. Kearns, K. Mekles, C&W

The clothing company signed a long-term lease renewal and expanded. The tenant will occupy all of the 10th through 15th floors and parts of the third, fifth and ninth floors.

80 West End Ave

218,000

United Cerebral Palsy of New York City / M. Berger, R. Getreu, Colliers International

Kushner Companies / Represented in-house

The nonprofit signed a 30-year lease for the entire building. The tenant recently sold its existing building at 122 East 23rd Street, and is scheduled to relocate to its new facility in the fourth quarter of 2014.

255 Greenwich St

167,072

City University of New York / S. Siegel, D. Hollander, R. Levine, CBRE

Jack Resnick & Sons / n/a

The university signed a lease.

635-641 Sixth Ave

49,246

Infor / B. Mosler, M. Mandell, D. Etzioni, E. Silverstein, C&W

SL Green / P. Glickman, D. Biasotti, B. Bass, J. Fanuzzi, Jones Lang LaSalle

The business application software company signed a long-term expansion lease.

114 West 47th St

36,000

Axinn, Veltrop & Harkrider LLP / G. Linder, M. Weiss, R. Eisenberg, Newmark Grubb Knight Frank

Durst Organization / Represented in-house

The law firm signed a lease renewal.

1185 Sixth Ave

27,508

Solil Management / N. Bobrow, D. Badner, Norman Bobrow & Co.

Hess Corporation / A. Fox, S. Romanoff, C&W

The real estate firm signed a sublease for the entire 10th floor.

463 Seventh Ave

27,177

J. Mendel / n/a

The Arsenal Company LLC / Adams & Co.

The luxury fashion company signed a 10-year lease renewal for the entire ninth floor and part of the eighth floor. The reported asking rent was $40 per square foot.

360 Madison Ave

24,566

The Seaport Group / D. Someck, M. Kunikoff, Lee & Associates

Stawski Partners / E. Goldman, D. Ades, CBRE

The investment bank signed a lease renewal for 12,283 square feet and expanded by 12,283 square feet. The reported asking rent was $75 per square foot.

401 Park Ave South

21,100

xAd Inc. / Jon Mayeske, C&W

Meringoff Properties / M. Stein, J. Vacker, Meringoff Properties

The mobile advertiser signed a 10-year lease for the entire 11th floor.

1071 Sixth Ave

17,545

David Peyser Sportswear Inc. / David Levy, Adams & Co.

Ten Seventy One Associates / David Levy, Adams & Co.

The apparel company signed a new lease for 3,545 square feet and renewed for 14,000 square feet. The reported asking rent was $56 per square foot.

452 Fifth Ave

16,140

Tilden Park Capital Management / B. Friedland, S. Petriello, CBRE; D. Madison, Newmark Grubb Knight Frank

PBC USA Real Estate LLC / A. Popper, PBC USA Real Estate; C. Reicher, H. Fiddle, J. Ackerson, Z. Freeman, S. Li, G. Maurer-Hollaender, CBRE

The asset management firm signed a long-term lease for the penthouse.

600 Lexington Ave

12,487

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

n/a / n/a

The law firm signed a lease for the entire ninth floor.

11 Broadway

11,165

Flatiron School / A. Maxson, D. Regal, ABS Partners

n/a / Mendy Braun, Braun Management

The school signed a lease.

42 Broadway

11,000

TKO Suites / A. Spitalnick, E. Warren, Kaufman Organization

Broadway Owners LLC / Tom Hettler, Lawrence Group

The office suites provider signed a 10-year lease. The reported asking rent was $32 per square foot.

120 West 45th St

10,093

Proctor & Gamble Hair Care LLC / Patrick Heeg, Jones Lang LaSalle

SL Green / P. Glickman, F. Doyle, M. Liebersohn, D. Biasotti, D. Kleiner, Jones Lang LaSalle

The beauty products company signed a 10-plus-year lease for the entire third floor.

1115 Broadway

8,835

C Wonder / James Buslik, Jeff Buslik, Adams & Co.

Eleven Fifteen Associates / James Buslik, Jeff Buslik, Adams & Co.

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

16 Court St (Brooklyn)

5,412

ELH Mgmt. LLC / M.C. O’Brien

SL Green / Ingram & Hebron

The real estate management firm signed a lease.

6 East 32nd St

5,200

Boyar Asset Management / Joshua Berger, Norman Bobrow & Co.

Meringoff Properties / Represented in-house

The investment advisory services provider signed a four-year lease for part of the seventh floor.

2275 Coleman St (Brooklyn)

5,000

VTA / n/a

Kings Plaza Associates / William O’Brien, M.C. O’Brien

The tenant signed a lease.

1115 Broadway

4,810

YG Kitchen & Bath Inc. / James Buslik, Jeff Buslik, Adams & Co.

Eleven Fifteen Associates / James Buslik, Jeff Buslik, Adams & Co.

The kitchen and bathroom products company signed a lease renewal. The reported asking rent was $100 per square foot.

241 37th St (Brooklyn)

4,370

CAMBA / M.C. O’Brien

Industry City Associates / n/a

The nonprofit signed a lease.

100 Wall St

4,071

Limelight Networks Inc. / S. Bellwood, J. Weiss, Cassidy Turley

Savanna / M. Konsker, S. Cahaly, Jones Lang LaSalle

The digital presence management firm signed a new lease for part of the fifth floor.

370 Lexington Ave

3,763

KnowVera / Kat Hwang, SKH Realty

Sherwood Equities / Kat Hwang, SKH Realty

The financial software company signed a lease.

9 White St

3,600

HFZ 11 Beach Street LLC / C. Owles, J. Costello, Sinvin Real Estate

Bryan Hunt / S. Penzner, N. Stange, T. Mahl, SPRE Realty LTD

The real estate firm signed a lease.

2275 Coleman St (Brooklyn)

3,500

Maimonides Medical Center / n/a

Kings Plaza Associates / M.C. O’Brien

The medical center signed a lease.

108 Kenilworth Pl (Brooklyn)

3,500

Dr. Rodriguez / n/a

L C Property of NY / M.C. O’Brien

The medical practice signed a lease.

285 West Broadway

2,600

Cureatr Inc. / R. Kornblatt, T. Etienne, Sinvin Real Estate

285 West Broadway LLC / Joshua Salon, Salon Realty

The technology firm signed a lease.

18 West 27th St

2,500

FunnyorDie.com / n/a

n/a / Tungsten Properties

The comedy website signed a two-year lease for the entire eighth floor.

110 West 40th St

2,266

Esti Studio Inc. / D. Levy, B. Maslin, Adams & Co.

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

The textile design studio signed a lease renewal. The reported asking rent was $42 per square foot.

11 East 26th St

2,216

Exemplis Corp. / James Buslik, Adams & Co.

East Twenty Sixth Associates / James Buslik, Adams & Co.

The furniture company signed a lease renewal for office and showroom space. The reported asking rent was $45 per square foot.

110 West 40th St

2,051

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 lease. The reported asking rent was $46 per square foot.

336 West 37th St

1,900

Sundance Shoes Inc. / n/a

n/a / Tungsten Properties

The wholesale shoe company signed a three-year lease.

To view more deals visit our website: www.TheRealDeal.com 82 January 2014 www.TheRealDeal.com

www.TheRealDeal.net December 200

METRO 1 IS SHAPING NEIGHBORHOODS WYNWooD | miami DesiGN DistriCt | Upper eastsiDe | DoWNtoWN & more

THE WYNWOOD GATEWAY COMPLEX WYNWOOD: 2825 NW 2 AVE | M1 DEVELOPMENT JOIN ANCHOR TENANT DUCATI - RETAIL/ SHOWROOM | CAFE/RESTAURANT FOR LEASE

FULL CITY BLOCK DEVELOPMENT OPPORTUNITY WYNWOOD: 1950 NW 1 AVE FOR SALE | $10,900,000 || 2.49 AC

PHASE II WYNWOOD GATEWAY COMPLEX WYNWOOD: 166 NW 29 ST | M1 DEVELOPMENT RARE MICRO RETAIL SPACES FOR LEASE AVAILABLE SPRING 2014

*Picture is not actual property

UNDER CONTRACT

HIGH VISIBILITY CORNER BUILDING DESIGN DISTRICT: 3801 N MIAMI AVE FOR SALE | $4,600,000 || 4,211 SF

TWO DEVELOPMENT SITES AVAILABLE BISCAYNE CORRIDOR: 7460, 11620 BISCAYNE BLVD FOR LEASE/SALE | PRICES UPON REQUEST

RENOVATED FLEX CREATIVE WAREHOUSE WYNWOOD: 2049 N MIAMI AVE FOR SALE | $2.5 M || 6,163 SF

DESIGN DISTRICT: 70-74 NE 40 ST FOR SALE | $9 M LEASE | $125 PSF NNN

3 ADJACENT STREET-TO-STREET WAREHOUSES WYNWOOD: 43-65 NW 23 ST FOR SALE | $5.99 M || BLDG 23,434 SF, LOT 31K SF

FREE STANDING CORNER RETAIL DESIGN DISTRICT: 3600 N MIAMI AVE || 6,001 SF FOR LEASE/SALE | PRICES UPON REQUEST

PRIME STREET RETAIL / WILL BUILD TO SUIT DESIGN DISTRICT: 4030 N MIAMI AVE FOR LEASE | $65 PSF NNN

PRIME DESIGN DISTRICT RETAIL

CREATIVE RETAIL LOFT SPACE DESIGN DISTRICT: 3819 N MIAMI AVE FOR SALE / LEASE | UPON REQUEST || 5,635 SF

5 CUSTOMIZABLE RETAIL SPACES DOWNTOWN: 1657 N MIAMI AVE FOR LEASE | $25 PSF NNN || 1,074-7,339 SF

PRIME CORNER LUXURY RETAIL DESIGN DISTRICT: 101 NE 40 ST FOR LEASE | PRICE UPON REQUEST || 5,000 SF

No oNe sells or leases more properties iN miami’s UrBaN Core thaN metro 1. Completing more than $400 million in sales transactions, 300+ deals and more than 2 million square feet in the past 3 years alone. ®

METRO 1 IS MIAMI’S URBAN REAL ESTATE LEADER VisiT METRO1.COM fOR a COMplETE lisT Of MORE THaN 130 ExClusiVE lisTiNgs. TONY CHO, president/ceo | 305.571.9991 | info@metro1.com | metro1.com

Office leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

231 West 39th St

1,598

Solid & Striped LLC / Susan Penzner Real Estate

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

The apparel company signed a lease renewal. The reported asking rent was $40 per square foot.

231 West 39th St

1,594

Richie Tailor Inc. / Seth Godnick, Adams & Co.

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

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

104 West 27th St

1,400

Diffusion Inc. / n/a

n/a / Tungsten Properties

The public relations firm signed a three-year lease for part of the 11th floor. The reported asking rent was $42 per square foot.

110 West 40th St

1,344

Beitin Associates / D. Levy, B. Maslin, Adams & Co.

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

The tenant signed a new lease. The reported asking rent was $46 per square foot.

11 East 26th St

1,295

Noreen Seabrook Marketing Inc. / James Buslik, Adams & Co.

East Twenty Sixth Associates / James Buslik, Adams & Co.

The rug company signed a lease renewal. The reported asking rent was $45 per square foot.

110 West 40th St

1,052

Bharat R. Magdalia / D. Levy, B. Maslin, Adams & Co.

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

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

110 West 40th St

656

Ralph Gindi / D. Levy, B. Maslin, Adams & Co.

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

The tenant signed a lease renewal. The reported asking rent was $44 per square foot.

110 West 40th St

619

Jovid Fabrics Inc. / D. Levy, B. Maslin, Adams & Co.

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

The textile company signed a new lease. The reported asking rent was $42 per square foot.

85 Fifth Ave

600

i.tv LLC / n/a

Iridium Consulting / Tungsten Properties

The media company signed a one-year sublease.

110 West 40th St

517

Sung Shin Trading USA Inc. / D. Levy, B. Maslin, Adams & Co.

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

The tenant signed a lease renewal. The reported asking rent was $49 per square foot.

110 West 40th St

426

Books Crossing Borders Inc. / D. Levy, B. Maslin, Adams & Co.

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

The tenant signed a lease renewal. The reported asking rent was $49 per square foot.

Retail leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

Lafayette Ave and Hutchinson River Pkwy (The Bronx)

165,000

Target / Ripco Real Estate

Simone Development Companies / Ripco Real Estate

The department store signed a lease for a new location at Throggs Neck Shopping Center.

55 Water St (Brooklyn)

153,000

West Elm / Chase Welles, SCG Retail

Midtown Equities / Mark Finkelstein, Retail Strategies

The furniture retailer signed a 20-year lease to become the anchor tenant at the Empire Stores commercial development in Dumbo. The company will relocate its headquarters, West Elm store and West Elm market store from elsewhere in Dumbo.

249 West 17th St

60,126

Room & Board / CBRE

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

The furniture shop signed a lease for multilevel space. The reported asking rent was $110 per square foot on the ground level, $70 per square foot on the second floor and $75 per square foot on the third floor.

1755 Broadway

29,902

Quick Park Broadway Garage LLC / n/a

Jack Resnick & Sons / n/a

The parking garage signed a lease.

168-53 Jamaica Ave (Queens)

26,000

Raymour & Flanigan / D. Lucas, F. Feinblum, Julius M. Feinblum Real Estate

J.W. Mays / Ralph Chera, Chera Realty Group

The furniture retailer signed a lease.

171 230th St (The Bronx)

25,000

TJ Maxx / P. Ripka, E. Bukai, Ripco Real Estate

n/a / P. Ripka, E. Bukai, Ripco Real Estate

The discount fashion retailer signed a lease.

724 Fifth Ave

15,540

Prada / n/a

SL Green; Jeff Sutton / n/a

The luxury shoes and accessories brand signed a lease renewal for its flagship store.

131-09 101st Ave (Queens)

11,000

Dollar Tree/Deal$ / Erin Grace, SRS Real Estate Partners

131 Street Realty Associates / Sol Dweck, NYC Prime Realty Corp.

The discount retailer signed a lease.

5 White St

10,350

n/a / Brad Schwartz, Lee & Associates

Nur Ashki Jerrahi Community / Steve Rappaport, Sinvin Real Estate

The restaurant signed a sublease.

82 Third Ave

10,000

Westside Market / Stu Morden, Newmark Grubb Knight Frank

n/a / RKF

The supermarket signed a lease. The reported asking rent was $200 per square foot.

333 East 14th St

8,440

United States Postal Service / n/a

Feil Organization / n/a

The postal service signed a 10-year sublease for retail space.

131 Greene St

8,200

n/a / n/a

131 Greene Street Owner / M. Glanzberg, M. Talapar, Sinvin Real Estate

The tenant signed a retail lease.

166 Spring St

6,600

n/a / n/a

402 West Broadway LLC / Christopher Owles, Sinvin Real Estate

A fashion retailer signed a lease.

14 Wooster St

6,600

n/a / Sarah Shannon, Sinvin Real Estate

14-16 Wooster Street Realty LLC / M. Glanzberg, M. Talapar, Sinvin Real Estate

The tenant signed a retail lease.

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84 January 2014 www.TheRealDeal.com

THANK YOU FOR DEALS DONE IN 2013! Abramson Brothers, ABS Partners, BLDG Management Braun Management, Cassidy Turley, Colliers International Corcoran Wexler Healthcare, Cushman & Wakefield DAK Commercial Realty, Douglas Elliman, Eastgate Realty Gabriel J. Bullaro & Associates, Granite Management Greystone Management, Guy A. Plush Realty, JEMB Realty Jones Lang LaSalle, Joseph P. Day Realty, Kew Management Newmark Grubb Knight Frank, Olmstead Properties Rudin Management, Solil Management, Solow Organization Texwood Investments, U.N.Y.P.O., William S. Hocking Realty

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All information furnished herein is from sources deemed reliable. No representation is made by Ann/Nassau Realty, LLC and/or Triumph Property Group, Ltd. nor is any to be implied as to the accuracy thereof and all information is submitted subject to errors, omissions, change of price, prior lease, or withdrawal without notice. All dimensions are approximate. For exact dimensions, please hire your own architect or engineer.

OMG5636_LaraAd_v2(10.5x14.5)_12.16.13.indd 1

EQUAL HOUSING OPPORTUNITY

12/24/13 12:59 PM

Retail leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

295 Park Ave South

5,100

European Wax Center / Hal Shapiro, Winick Realty

Abington Holding / S. Baker, M. Gleicher, Winick Realty

The salon signed a lease for a two-level space.

24 Fifth Ave

4,453

24 5th Ave LLC / Charles Rapuano, Winick Realty

24 5th Owners Inc. / Max Talapar, Sinvin Real Estate

The restaurant signed a lease.

1460 Second Ave

4,300

Boqueria / Alex Turboff, BCD

n/a / J. Lack, J. Hafen, Newmark Grubb Knight Frank

The restaurant signed a lease. The reported asking rent was $168 per square foot.

245 West 17th St

3,656

Flywheel / RKF

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

The fitness studio signed a lease. The reported asking rent was $110 per square foot.

104 Reade St

3,600

Reade Street Prep / D. Rubens, L. Block, Winick Realty

Ascend Group / D. Rubens, L. Block, Winick Realty

The high-end preschool signed a retail lease.

788 Southern Blvd (The Bronx)

3,500

Top Choice Medical PC / Represented in-house

Levitan Associates LLC / Peter Levitan, Lee & Associates

The medical supplies company signed a retail lease. The reported asking rent was $27 per square foot.

165 Chambers St

3,445

n/a / n/a

Greenwich Street LLC / M. Glanzberg, M. Talapar, Sinvin Real Estate

The tenant signed a retail lease.

2875 Veterans Rd West (Staten Island)

3,300

New York Community Bank / John Oliveri, STL Realty

Charlston Place LLC / John Oliveri, STL Realty

The bank signed a lease.

833 Manhattan Ave (Brooklyn)

3,200

Pro Health / R. Senior, I. Shabot, Ripco Real Estate

833 Manhattan Avenue LLC / R. Senior, I. Shabot, Ripco Real Estate

The urgent care medical group signed a lease.

298 Graham Ave (Brooklyn)

2,500

NYCPet.com / V. Sweeney, T. Dow, Gotham City Group

n/a / V. Lopez, J. Wadler, Kalmon Dolgin Affiliates

The pet food and accessories store signed a lease.

3 Madison St

2,372

Deb’s Catering / n/a

n/a / C. Swartz, D. Mouzakitis, Suzuki Capital LLC

The catering company signed a 20-year retail lease.

210 East 86th St

2,214

Claire’s Boutique / Richard Cohan, RACohan Commercial Real Estate

Perlbinder Realty Corp. / S. Asch, C. Rosenbloom, City Connections

The fashion boutique signed a 10-year lease. The reported asking rent was $315 per square foot.

104 South 4th St (Brooklyn)

2,000

Randolph BK / Peter Levitan, Lee & Associates

Southside House LLC / Peter Levitan, Lee & Associates

The restaurant signed a lease. The reported asking rent was $55 per square foot.

193 Grand St

2,000

Robert James / Peter Levitan, Lee & Associates

Grand Street Gallery LLC / Marsha Pels, Corcoran

The men’s wear designer signed a retail lease. The reported asking rent was $80 per square foot.

277 Bleecker St

1,970

Kryolan Corp. / David Baker, Isaacs & Co.

277 Bleecker LLC / Steve Rappaport, Sinvin Real Estate

The cosmetics retailer signed a lease.

162 Eighth Ave

1,900

n/a / Lansco Corp.

162 Eighth Avenue LLC / Steve Rappaport, Sinvin Real Estate

The tenant leased retail space.

1185 Third Ave

1,800

Starbucks / David Firestein, SCG Retail

Empire State Realty Trust / n/a

The coffee chain signed a 10-year lease for a new location.

1074-1076 Rutland Rd (Brooklyn)

1,800

n/a / Steve Stern, NY Standard Realty

Nite Realty / Steve Stern, NY Standard Realty

A beauty supply store signed a 10-year lease.

95 Chambers St

1,650

European Wax Center / Hal Shapiro, Winick Realty

Ascend Group / D. Rubens, L. Block, Winick Realty

The salon signed a lease for a new location.

3200 Broadway

1,600

Chase Bank / Cory Zelnik, Zelnik & Co.

Five Star Management / A. Gavios, H. Aaron, Square Foot Realty

The bank signed a 10-year lease. The reported asking rent was $125 per square foot.

83 Murray St

1,600

Juice Press / J. Pruger, A. Cukier, Newmark Grubb Knight Frank

n/a / J. Gilbert, J. Hafen, Newmar Grubb Knight Frank

The juice bar signed a lease.

581 Hudson St

1,500

Doppio / S. Davis, M. Strombelline, SKH Realty

Neil Bender / S. Davis, M. Strombelline, SKH Realty

The restaurant signed a lease.

2409 Broadway

1,500

European Wax Center / Winick Realty

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

The salon signed a lease.

325 Hudson St

1,434

Just Salad / M. Gorman, J. Gettler, New Street Realty Advisors

Jamestown Properties / n/a

The salad chain signed a lease for a new location.

1440 Broadway

1,142

Mexicue / BCD

n/a / B. Birnbaum, J. Roseman, Newmark Grubb Knight Frank

The restaurant signed a lease for a new location.

Broadway and Dyckman St

1,100

Starbucks / David Firestein, SCG Retail

n/a / Gary Trock, CBRE

The coffee chain signed a lease.

208 East 14th St

1,070

Dunkin’ Donuts / n/a

n/a / J. Roseman, M. Leber, Newmark Grubb Knight Frank

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

122 East 42nd St

1,000

Juice Generation / B. Birnbaum, M. Cohen, Newmark Grubb Knight Frank

n/a / Michael Hoffman, Cassidy Turley

The juice bar signed a lease. The reported asking rent was $300 per square foot.

430-436 East 72nd St

819

Knickerbocker 72 Inc. / n/a

Jack Resnick & Sons / n/a

The dry cleaner signed a lease.

88 Third Ave

800

Funkiberry / Josh Siegelman, Winick Realty

n/a / J. Lack, J. Hafen, Newmark Grubb Knight Frank

The frozen yogurt shop signed a lease. The reported asking rent was $315 per square foot.

56th St and Eighth Ave

750

Starbucks / David Firestein, SCG Retail

Fred Posniak, Malkin Properties / Joanne Podell, C&W

The coffee chain signed a 10-year lease.

65 Mercer St

750

Cremieux / Sarah Shannon, Sinvin Real Estate

n/a / Stephen Tarter, Tarter Stats O’Toole

The fashion retailer signed a lease.

253 Columbus Ave

650

Big Drop / Charles Rapuano, Winick Realty

Parkway East Properties LLC / Represented in-house

The women’s clothing store signed a lease.

271 Amsterdam Ave

650

n/a / n/a

n/a / David Chkheidze, Massey Knakal

A wine and liquor shop signed a lease.

218 Madison Ave

410

Hair Bar NYC / Abie Zarif, Kassin Sabbagh Realty

n/a / Annie Yao, Buchbinder & Warren

The hair salon signed a 10-year lease.

To view more deals visit our website: www.TheRealDeal.com 86 January 2014 www.TheRealDeal.com

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This unique block of space can accommodate as small as approx. 6,000 RSF for one-level retail, approx. 10,000 RSF for two-level retail (Lower Level and Ground Floor, or as large as approx. 28,000 RSF for three-level retail or office (Lower Level, Ground Floor and Entire Second Floor). LOW E

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Very high floor to slab ceilings at all 3 levels • Ground Level - approximately 18 ft. • Lower Level - approximately 14 ft. • 2nd Floor - approximately 14 ft. 2nd Floor possibility affords additional avenue window frontage for signage, natural light, and/or display purposes, and a large non-columned area in one section.

For rental opportunities please call: 212-807-7664 or email retailinquiry@hrccorp.com www.hrccorp.com 156 Fifth Avenue, New York, NY POTENTIAL STOREFRONT RENDERING Disclaimer: All information supplied is from sources deemed reliable and is furnished subject to errors, omissions, modifications, removal of the listing from sale or lease, and to any listing conditions, including the rates and manner of payment of commissions for particular offerings imposed by HRC Corporation or principals, the terms of which are available to principals or duly licensed brokers. This information may include estimates and projections prepared by HRC Corporation with respect to future events, and these future events may or may not actually occur. Such estimates and projections reflect various assumptions concerning anticipated results. While HRC Corporation believes these assumptions are reasonable, there can be no assurance that any of these estimates and projections will prove to have been correct. Therefore, actual results may vary materially from these forward-thinking estimates and projections. Any square footage dimensions set forth are approximate.

Buys Address

Size

Buyer / Representative

Seller / Representative

Notes

625 Madison Ave

17-story, 563,000 sf office bldg

Ashkenazy Acquisition Corporation / n/a

625 Ground Lessor LLC / B. Corcoran, H. Hwang, S. Kohn, F. Liantonio, M. Nakleh, N. Rockett, K. Wiedenmann, S. Sarkar, C&W

The ground lessor’s position at the building sold for $400 million. The price represents a going-in yield of 1.15 percent based on contractual ground lease payments through June 2022. The ground lease expires in June 2054.

3489 Broadway, 519 West 143rd St, 610 West 163rd St and 548 West 164th St

4 apt. bldgs, 205 units total

n/a / n/a

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

The properties sold for $45 million, or $185 per square foot.

60 Avenue B, 159, 161 and 195 Stanton St and 343 East 8th St

5 apt. bldgs, 121 units total

60 Avenue B LLC; 159-161 Stanton LLC; 193-195 Stanton LLC; 343 East 8th LLC / Aaron Jungreis, Rosewood Realty

Rusty Realty Associates LLC; 159 Eluji Associates LLC; 195 Phesten Associates LLC; 343 East 8th Street Associates LLC / Aaron Jungreis, Rosewood Realty

The properties sold for $40.1 million.

4240 and 4300 Broadway

2 apt. bldgs, 95 units total

Crest Realties / Cignature Realty Associates

Heights Equities Inc. / Cignature Realty Associates

The properties sold for $23.69 million.

143-145 West 4th St

Two 6-story apt. bldgs

n/a / n/a

Silverstone Property Group / P. Von Der Ahe, J. Koicim, Marcus & Millichap

The properties sold for $19.2 million.

556-562 West 126th St

2 apt. bldgs, 39 units total

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

The properties sold for $15 million.

117-119 East 7th St

28-unit apt. bldg

Benchmark Real Estate Group / n/a

n/a / n/a

The property sold for $13.7 million. The price represents a capitalization rate of 5 percent and a gross rent multiple of 13.5.

138-142 North 10th St

Development site

132 Bedford LLC / A. SmiloviciLangsner, M. Leben, M. Langsner, Delta CRE

Apple Restoration Co. / A. Smilovici-Langsner, M. Leben, M. Langsner, Delta CRE

The property sold for $12.7 million.

1520 and 1526 St. Nicholas Ave

Two 5-story apt. bldgs, 41 units total

1520-26 S T Nicholas Holding LLC / Aaron Jungreis, Rosewood Realty

1520 S T Nicholas Avenue Realty In C / Michael Kerwin, Rosewood Realty

The properties sold for $10.3 million.

48 St. Nicholas Pl

6-story apt. bldg, 41 units total

n/a / David Scheer, Rosewood Realty

Nicholas Place LLC / David Scheer, Rosewood Realty

The property sold for $8.04 million.

228 Avenue B

6-story apt. bldg, 13 units total

n/a / Lynda Blumberg, Besen & Associates

228 Avenue B LLC / A. Doshi, R. Cohen, Besen & Associates

The property sold for $7.6 million, or $600 per square foot.

67 First Ave

5-story apt. bldg, 16 units total

n/a / Eric Lupo, Friedman-Roth Realty

The property sold for $7.45 million.

Entech_Ad_9half_x_6threequarters_TRD_Color_Final.pdf

CMY

88 January 2014 www.TheRealDeal.com

12/28/13

6:00 AM

CP & Associates Construction Corp. Tel: 212.796.6901 | Fax: 646.291.8986 www.cpassociatesnyc.com

Manhattan based construction services firm CP & Associates bridges cultural differences to complete Minamoto Kitchoan’s exquisite East Coast flagship boutique on Madison Avenue. When Minamoto Kitchoan, a purveyor of Japanese sweets known as Wagashi made the decision to move its Fifth Avenue boutique, they did so knowing they had assembled an international team dedicated to creating a collaborative work environment. The new location at 509 Madison Avenue presented the Wagashi purveyor with a unique opportunity to situate itself in an area that has become one of Manhattan’s sweetest retail corridors; Minamoto counts European chocolatiers Leonidas, Neuhaus, and Neuchatel as its neighbors. The project team consisted of the Minamoto’s representative Kajima Building & Design Group, Inc., Kaneko Architects, P.C. and the construction firm of CP & Associates. Although the bi-level flagship, which features a walk-in freezer, a product preparation area and an executive office totals just over 2,000 sf, the project presented numerous challenges that had to be overcome. Collectively the trio immediately established an approach that would enable them to plan for and manage issues before they would affect the project’s expedited timeline. Minamoto tasked the team with completing their flagship in 10-weeks; delays were out of the question. In conjunction with Kajima and Kaneko, CP devised a trade schedule that dovetailed with Kajima’s master project schedule, enabling the construction firm to maximize trade performance. On any given day, five to eight subcontractors worked simultaneously within the confines of the new boutique. To ensure that the teams remained on the same page and were working with the latest directives communicated from Japan, a fluid model of communication was established. Daily site meetings and numerous calls were conducted between team members to make certain that Minamoto’s expectations were crystal clear to all parties. “On such a high-end project, there is no such thing as over communicating,” said Phillip Pignatelli, principal at CP & Associates. “We had to check and re-check every project detail to ensure nothing would be lost in translation.” To say CP & Associates took extra special care when installing finishes would be an understatement. The majority of finishes were one-of-kind works, hand crafted by Japanese artisans. Minamoto’s flagship features light-boxes faced with Washi paper, Juraku wall coverings and light coves faced with Shikkui, a lime plaster that actively improves indoor air quality. Meticulous attention was paid to their handling and installation. For each, after the manufacturer’s instructions were translated from Minamoto’s native Japanese, a CP principal remained onsite during the installation process to ensure that the intended design aesthetic was achieved. In addition, the flagship also boasts locally sourced finishes such as a Stone Source porcelain tile floor, Luminii LED lighting and handcrafted white oak retail showcases. The final product, a luxuriously crafted boutique that echoes Minamoto’s brand DNA, elevates and showcases the Wagashi purveyor among its neighboring European Chocolatiers. The project also serves as an example of how companies from opposite sides of the world are capable of creating a successful work environment. “When dealing with non-US clients, you must be committed to understanding and respecting the cultural differences that exist between the project teams,” said Pat Acocella, founder of CP & Associates. “You have to develop a model of project management that overcomes those differences. We did that.”

CP & Associates Construction Corp. (“CP & Associates”) is a construction services ﬁrm headquartered in New York, NY. CP & Associates specializes in the construction of commercial, residential and institutional interior and ground-up projects for leading private and public ﬁrms. Since being established in 2008, CP & Associates have completed over million square feet of project space throughout New York, New Jersey and Connecticut.

Buys continued Address

Size

Buyer / Representative

Seller / Representative

Notes

1041 Nelson Ave (The Bronx)

6-story apt. bldg, 56 units total

Brown Hill First Realty Assoc LLC / Amit Doshi, Besen & Associates

1041 Nelson LLC / A. Doshi, L. Blumberg, Besen & Associates; A. Jungreis, Rosewood Realty

The property sold for $5.6 million, or $97 per square foot.

635 East 6th St

5-story apt. bldg, 9 units total

635 E 6 LLC / Aaron Jungreis, Rosewood Realty

635 East 6TH Street Realty Company LLC / David Scheer, Rosewood Realty

The property sold for $5.5 million.

853 St. Nicholas Ave

25-unit apt. bldg

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

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

The property sold for $5.48 million.

64 East 1st St

Development site

n/a / Michael Ferrara, Highcap Group

The property sold for $5.4 million.

113 and 145 Kenilworth Pl (Brooklyn)

24 res. units

n/a / n/a

n/a / N. Mahedy, M. Amirkhanian, Massey Knakal

The apartment building at 113 Kenilworth Place and an 11-unit apartment package at 145 Kenilworth Place sold for $5.2 million.

2245, 2259 and 2285 Adam Clayton Powell Jr. Blvd

3 mixed-use bldgs, 32,025 sf total

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

The properties sold for $4.23 million.

450 East 184th St (The Bronx)

5-story apt. bldg, 46 units total

n/a / Michael Kerwin, Rosewood Realty

450 E 184 Owner LLC / Aaron Jungreis, Rosewood Realty

The property sold for $4.05 million.

1198-1206 Nostrand Ave (Brooklyn)

5 mixed-use bldgs

n/a / O. Cohen, M. DiBella, D. Marks, P. Matheos, M. Hernandez, TerraCRG

The adjacent properties sold for $3.65 million, or $233 per square foot. The price represents a capitalization rate of 7.3 percent.

86-21 112th St (Queens)

3-story apt. bldg, 32 units total

Auburn Realty LLC / Daniel David, Realty Executives Today

Estate of Kruck / Ann Folan, Folan Real Estate Group

The property sold for $3.65 million, or $92 per square foot.

646 President St (Brooklyn)

4-story apt. bldg, 12 units total

646 President Street Associates LLC / Aaron Jungreis, Rosewood Realty

646 President Street Realty LLC / Michael Kerwin, Rosewood Realty

The property sold for $3.25 million.

515 West 23rd St

2,500 sf retail condo

Chamber NY Inc. / Andrew Baran, NSNYRE

23 Highline LLC / Roxanne Betesh, Sinvin Real Estate

The retail condo sold for about $3 million.

54 Cumberland St (Brooklyn)

8-unit apt. bldg

n/a / M. Fotis, A. Abuaf, Marcus & Millichap

n/a / M. Fotis, S. Riney, Marcus & Millichap

The property sold for $2.9 million.

2682 Creston Ave (The Bronx)

5-story apt. bldg, 33 units total

n/a / Aaron Jungreis, Rosewood Realty

2682-2684 Creston Ave Owner LLC / Aaron Jungreis, Rosewood Realty

The property sold for $2.8 million.

125-127 Evergreen Ave (Brooklyn)

4-story apt. bldg, 16 units total

n/a / n/a

n/a / Matthew Cosentino, TerraCRG

The property sold for $2.65 million.

615 East 189th St (The Bronx)

14,000 sf mixed-use bldg

n/a / Marco Lala, Marcus & Millichap

The property sold for $2.65 million.

21 West 131st St

5-story apt. bldg, 10 units total

n/a / Jonathan Birnbaum, Rosewood Realty

21131 LLC / Michael Guttman, Rosewood Realty

The property sold for $2.63 million.

545-555 East 82nd St (Brooklyn)

3-story apt. bldg, 26 units total

n/a / Aaron Jungreis, Rosewood Realty

545 East 82ND LLC / Aaron Jungreis, Rosewood Realty

The property sold for $2.46 million.

545-555 East 82nd St (Brooklyn)

3-story apt. bldg, 21 units total

Wine Realty LLC / Lev Mavashev, Besen & Associates

545 East 82nd Street LLC / L. Mavashev, Besen & Associates; A. Jungreis, Rosewood Realty

The property sold for $2.4 million, or $130 per square foot.

811 Classon Ave (Brooklyn)

3-story apt. bldg, 12 units total

n/a / Joseph Friedman, Besen & Associates

811 Tegas Realty Corp LLC / Kevin Hakimian, Besen & Associates

The property sold for $2.4 million, or $492 per square foot.

347 East 105th St

4-story, 7,467 sf apt. bldg

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

The property sold for $1.68 million.

616 Halsey St (Brooklyn)

3-story, 6,746 sf apt. bldg, 7 units total

n/a / n/a

n/a / Matthew Cosentino, TerraCRG

The property sold for $1.5 million.

579 Courtlandt Ave (The Bronx)

9,368 sf development site

New York Psychotherapy and Counseling Center / Kathy Zamechansky, KZA Realty Group

Legal Services NYC / Kathy Zamechansky, KZA Realty Group

The property sold for $1.5 million.

702 Grand Concourse (The Bronx)

6,890 sf development site

Upper Manhattan Development Corp. / Kathy Zamechansky, KZA Realty Group

MPS Parking / Kathy Zamechansky, KZA Realty Group

The property sold for $1.45 million.

1282 Shakespeare Ave (The Bronx)

12,685 sf development site

Post Graduate Center for Mental Health / Kathy Zamechansky, KZA Realty Group

Higinio Caballero / David Simone, Massey Knakal

The property sold for $1.43 million.

991 Ocean Ave (Brooklyn)

23,254 buildable sf development site

n/a / J. Berman, M. Spinelli, D. Tropp, Ariel Property Advisors

The property sold for $1.25 million.

2065 Walton Ave (The Bronx)

46,011 buildable sf development site

n/a / n/a

n/a / David Simone, Massey Knakal

The property sold for $1.15 million, or $25 per buildable square foot.

Financing Address

Size

Borrower / Representative

Lender / Representative

Notes

220 East 42nd St

37-story, 1.2 million sf office bldg

SL Green / S. Kohn, D. Karson, A. Hernandez, C. Moyer, J. Spreitzer, C&W

Wells Fargo / n/a

A $275 million senior mortgage loan was provided for the property.

2665 Homecrest Ave (Brooklyn)

157-unit apt. bldg

2665 Homecrest Avenue Owners Corp. / n/a

NCB / n/a

A $4.3 million first mortgage and a $500,000 line of credit were arranged for the building.

200 Mercer St

28-unit apt. bldg

200 Mercer St. Apartment Corp. / n/a

NCB / n/a

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

90 Hudson St

36-unit apt. bldg

Hudson Street Owners Corp. / n/a

NCB / n/a

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

90 January 2014 www.TheRealDeal.com

Financing continued Address

Size

Borrower / Representative

Lender / Representative

Notes

144-30 Sanford Ave (Queens)

118-unit apt. bldg

Imperial Sanford Owners Corp. / n/a

NCB / n/a

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

176 West 87th St

88-unit apt. bldg

176 West 87th St. Owners Corp. / n/a

NCB / n/a

A $2 million line of credit was arranged for the building.

325 East 80th St

48-unit apt. bldg

325 East 80th Apartment Corp. / n/a

NCB / n/a

A $1.6 million first mortgage and a $300,000 line of credit were arranged for the building.

204 West 78th St

20-unit apt. bldg

204 W. 78th St. Housing Corp. / n/a

NCB / n/a

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

240 West 102nd St

27-unit apt. bldg

2669 Owners Ltd. / n/a

NCB / n/a

A $1 million first mortgage and a $500,000 line of credit were arranged for the building.

477 Central Park West

29-unit apt. bldg

477 Central Park West Owners Ltd. / n/a

NCB / n/a

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

336 East 50th St

24-unit apt. bldg

336 East 50th Street Tenants Corp. / n/a

NCB / n/a

A $675,000 first mortgage and a $500,000 line of credit were arranged for the building.

Other Deals Citigroup inks $1B Greenwich Street deal It’s official: Citigroup is moving its global banking headquarters to Lower Manhattan. The financial institution signed a deal worth more than $1 billion to renew its 2.7 million-square-foot lease in a two-building complex at SL Green Realty’s 388 and 390 Greenwich Street, between Hubert and North Moore streets. Though the bank had already occupied the space, the deal pulls Citi’s headquarters away from 399 Park Avenue at East 53rd Street, where it has centered its operations for years. The site was considered a frontrunner in Citi’s long search for a new nerve center, beating out contenders at 2 World Trade Center and Hudson Yards. (The deal was announced after the deadline for the Deal Sheet.)

Gotham, DT Salazar get $278M in city funding for rental tower Developers the Gotham Organization and DT Salazar secured $278 million in financing for the construction of a 586-unit, 52-story residential tower on a vacant Downtown Brooklyn site formerly owned by the city, according to the city Department of Housing Preservation and Development. The department, under Mayor Bloomberg’s New Housing Marketplace Plan, is providing full funding of the FXFOWLE-designed project at 250 Ashland Place. Of the total units, which range from one- to three-bedrooms, 282 will be affordable. There will also be 8,000 square feet of office space and 10,200 square feet of retail space along Fulton Street, a release said. (The deal was announced after the deadline for the Deal Sheet.)

Thor Equities purchases 545 Madison Avenue Thor Equities has closed on the leasehold for 545 Madison Avenue, an office and retail tower between East 53rd and East 54th streets. LCOR, a national investment, management and development company that previously held the building’s leasehold, was quietly shopping for a buyer since earlier last year, as The Real Deal reported. LCOR acquired the ground lease to the property from Marx Realty & Improvement Company in 2006, and the land lease is valid through 2081. (The deal was announced after the deadline for the Deal Sheet.)

Forest City says Greenland will invest $200M in Atlantic Yards Shanghai-based Greenland Group is making a contribution of roughly $200 million in exchange for a 70 percent equity interest in Forest City Enterprises’ Atlantic Yards development, not including the Barclays Center and B2, the project’s first residential building. The two companies will be sharing the development risk related to their ownership shares, including costs related to infrastructure and vertical construction for phases one and two moving forward, GlobeSt.com reported, citing a disclosure from Forest City. 92 January 2014 www.TheRealDeal.com

Edward Minskoff snags university tenant at 51 Astor Place St. John’s University has inked a deal for 71,000 square feet at Edward Minskoff ’s 51 Astor Place. The space will house the university’s School of Risk Management, which includes a library, according to St. John’s. A spokesperson for the school declined to disclose the brokers on the deal or the agreed-upon rent per square foot, telling The Real Deal only that “the terms of the lease were very favorable because a portion of the building was zoned for educational purposes.” Peter Riguardi, Paul Glickman, Mitchell Konsker and Cynthia Wasserberger of Jones Lang LaSalle previously represented the landlord in negotiations with St. John’s. (The deal was announced after the deadline for the Deal Sheet.)

Meadow Partners pays $72 million for Greenpoint rental property Midtown-based Meadow Partners last month acquired a 130-unit rental building at 110 Green Street in Greenpoint for $72 million, adding to a New York City portfolio that has grown over the past year. In another example of that change, Meadow closed Dec. 17 on the $200 million purchase of 866 United Nations Plaza from Vornado Realty Trust. An earlier acquisition plan included United Realty Partners as a co-buyer, but ultimately Meadow bought the office tower alone, several industry sources said. (The deal was announced after the deadline for the Deal Sheet.)

NYC newcomer Pantzer lands Upper West Side rentals for $35.8M An affiliate of New Jersey investment firm Pantzer Properties acquired a 31,125-square-foot rental building on the Upper West Side for $35.8 million, according to property records filed with the city last month. The fivestory property at 370 Columbus Avenue, near 77th Street and across from the American Museum of Natural History, hit the market for $36 million in August. Massey Knakal Realty Services brokers Robert Knakal, Thomas Donovan and Paul Smadbeck represented the seller, Midtown Westbased development and management firm Vintage Group. No broker represented Pantzer in the deal. (The deal was announced after the deadline for the Deal Sheet.)

New 183-room hotel to rise on Williamsburg’s Wythe Avenue Hotel developer Zelig Weiss is bringing a new 183room hotel to Wythe Avenue in Williamsburg. The 150,000-square-foot project will be located at 55 Wythe Avenue, between North 12th and North 13th streets, just a block down from the popular Wythe Hotel. The site currently holds a one-story warehouse. The planned 20-story building will have retail space on the first floor and offices on floors five through nine, according to Department

of Buildings records spotted by BuzzBuzzHome. The hotel section of the building will begin on the 11th floor, and will feature a rooftop deck and restaurant. Weiss and partner Zalman Glauber are also behind the Condor Hotel at 56 Franklin Avenue, according to BuzzBuzzHome.

Long Island firm grabs Queens rental building for $28.5M Suffolk County-based real estate management firm Fairfield Properties has made its first Queens purchase: a 114,000-square-foot rental building in Douglaston, one of the borough’s more affluent areas, for $28.5 million, according to property records filed with the city last month. Fairfield Manor at Douglaston, located at 43-60 Douglaston Parkway at Church Street, holds 148 units. The building was constructed in 1963 and is almost fully leased. Sellers Gary Grossman and Judith Katten, listed collectively as East Rockaway-based Guildford Associates in property records, appear to have owned the building for about 38 years. (The deal was announced after the deadline for the Deal Sheet.)

Thor grabs first Noho site, with 30 Bond Street retail Thor Equities is moving onward and upward from the popular domain of Soho, with its first acquisition in Noho. The Joseph Sitt-led firm snatched up a retail site at 30 Bond Street, between Bowery and Lafayette Street, for $3 million. The ground-floor space covers 2,200 square feet, as well as an extra 800 square feet in the basement. Earlier in Soho, Thor paid $16.4 million for a retail condominium at 115 Mercer Street, The Real Deal reported last month. The 7,088-square-foot condo, between Prince and Spring streets, houses the clothing boutique 3.1 by Phillip Lim. In 2012, Thor nabbed a 27,750-square-foot mixed-use retail and residential property in Soho at 21 and 25-27 Mercer Street, where the retail tenant is Nike, from East End Capital for $34 million. (The deal was announced after the deadline for the Deal Sheet.)

Brause’s 52 Vanderbilt adds Beekman investment firm as tenant Brause Realty has signed global property management firm Beekman Real Estate Investment Management to a fiveyear lease at its 21-story Midtown East office building at 52 Vanderbilt Avenue. Beekman REIM currently occupies an office at 655 Third Avenue, also near Grand Central Terminal. Transwestern managing director John Grotto represented the firm in the deal. Other tenants in the 190,000-square-foot tower, between 44th and 45th streets, include song-identification app Shazam Media Services and social media optimizer SocialFlow. Shazam signed for more than 9,000 square feet in September, while SocialFlow took roughly the same-size space in June, as The Real Deal reported. (The deal was announced after the deadline for the Deal Sheet.) TRD

Development updates SALES UPDATES

Upper West Side One Morningside Park 321 West 110th Street The 54-unit condominium project developed by 110 Manhattan Equities LLC and designed by GF55 Partners topped off at 22 stories. Sales launched in the fall, and construction is slated to be completed next spring. The one-, two- and three-bedroom residences range in size from 661 to 2,144 square feet, and in price from $925,000 to over $4 million. Building amenities include a 20-year tax abatement, a fitness center, doorman, package delivery and a terrace with an outdoor kitchen. Brown Harris Steven’s SELECT is the agent. Contact: onemorningsidepark.com.

Prospect Heights 355 Saint Marks Sales are slated to launch at the two-unit building this month. Original wood was salvaged from the 1931 building and repurposed on the sustainable site with the help of developer Greenstone. The 1,700 square-foot third-floor apartment starts

at $1,725,000, and the 2,400 square-foot penthouse unit on the fourth floor starts at $2,395,000. Building amenities include Viking and Wolf appliances in both units. Sotheby’s Warren Lewis is the agent. Contact: bkgreenstone.com.

Brighton Beach Bright n’ Green 67 Brighton First Lane Sales have launched at the six-unit sustainable condominium building. The studio and two-bedroom apartments range in size from 405 square-feet to 1,329 squarefeet and, in price from $325,000 to $850,000. Building amenities include a bicycle room with space for two bicycles per apartment; a furnished and landscaped roof deck with hot tub, barbeque and birdhouses; low-flow toilets; super-efficient induction cook-

tops; light-maximizing windows; LED energy-efficient lighting in all public spaces, mechanical rooms, and commercial spaces; and a sustainable 150-foot-long fresh air and water purification and distribution system. Alexander Marketing is the agent. Contact: brightngreen.com. LEASING UPDATES

South Slope

603 Fourth Leasing has launched for the six residential units. One-bedroom apartments range in price from $1,700 to $2,000 per month, and start at $2,800 for two-bedroom residences. Building amenities include a roof deck and private outdoor space within each unit. Ideal Properties Group is the marketing and leasing agent. Contact: 603fourth.idealpropertiesgroup.com.

er and dryers, central heat and air conditioning, and large skylights on the site’s upper levels. Ideal Properties Group is the agent. Contact: www.150broadway.idealpropertiesgroup.com. Williamsburg Social 250 Bedford Avenue The 72-unit luxury residence developed by the Magnum Real Estate Group and SL Green Realty and designed by Paris Forino is now 100 percent leased. The studio, one, two, and three-bedroom units range in size from 436 square-feet to 849 squarefeet and in price from $2,488 to $6,277.

Williamsburg 150 Broadway The five-unit pre-war building developed by Greenwich Village restaurateur Vittorio Antonini has launched. The studio, one, two, and three-bedroom units range in price from $2,800 to $5,950 per month. Building amenities include in-unit wash-

The building’s 7,500 square-feet of amenities space includes a resident lounge, two courtyards, two common roof decks, a concierge, a package room and onsite parking. Aptsandlofts.com is the marketing agent. Contact: aptsandlofts.com. TRD

Eliot Spitzer pays $88 million for Hudson Yards development site Parcel could allow for construction of a tower of up to 415,000 square feet By Hiten Samtani ealing with divorce doesn’t seem to be slowing Eliot Spitzer down. The former New York governor’s family-run development firm Spitzer Enterprises bought a block-long development site at Hudson Yards from Alloy Development for $88 million, according to city records filed Dec. 26. The 17,281-square-foot site is located at 511 West 35th Street between 10th and 11th avenues, and runs through to West 36th Street, according to an offering memorandum from Massey Knakal Realty Services. It offers 75 feet of frontage on West 35th Street and 100 feet on West 36th Street. The site is currently leased to a trucking company, but the lease contains a termination clause provided the tenant is given six months notice, according to the memorandum. Spitzer Enterprises could build up to 172,000 square feet as of right now, but with the purchase of additional air rights through the Eastern Rail Yard and a district improvement bonus, the company could go as big as 415,000 square feet, said Massey Knakal’s Bob Knakal, who represented both sides of the deal with his colleague, Stephen Palmese. Just under 104,000 square feet is zoned for residential use. The sale closed Dec. 19.

94 January 2014 www.TheRealDeal.com

Eliot Spitzer (left) and Bob Knakal. Below, 511 West 35th Street.

“It’s one of the great growth opportunities in Manhattan,” Spitzer told The Real Deal, referring to Hudson Yards. He is still brainstorming the best possible use for the site, whether “mixed-use, fully commercial, or hotel,” he said, declining

to comment further. Alloy paid $24 million for the site in 2007, city records show. Jared Della Valle, Alloy’s president, said that the company had “enjoyed seeing the neighborhood mature since our acquisition,” and was now focused on “new neighborhoods in a new administration.” The site was expected to fetch about $75 million. “This transaction reflects the tremendous demand of the Hudson Yards district, sure to become the most dynamic neighborhood in the city in years

to come,” Knakal said. The Related Companies, which is spearheading the Hudson Yards development along with Oxford Properties (see related story on page 40), was thought to be one of the potential bidders on the site. Related owns the property next door at 517 West 35th Street, and a deal for 511 West 35th Street would have allowed it to build a tower just shy of a million square feet. Since leaving Albany in disgrace following a prostitution scandal, Spitzer has been instrumental in several high-profile deals for Spitzer Enterprises’ roughly $1 billion property portfolio. He worked on the $25.5 million acquisition of the retail condominium at 350 West Broadway in Soho in February, and recently met with Eastern Consolidated chief Peter Hauspurg to discuss the acquisition of development sites. Real estate and media obligations – including stints as a talk show host at Current TV and CNN – have taken up the lion’s share of his time since leaving office, a Spitzer spokesperson told TRD in August. He also launched a bid to return to public office last year, with an unsuccessful campaign for New York City comptroller. Spitzer has lately been in the news for rumors that he is dating a spokesperson for Mayor Bill de Blasio and for the end of his marriage to Silda Wall Spitzer. TRD

RESIDENTIAL DEALS West Village $1.76 million 15 Charles Street, Apt. 18A

One-bedroom, one-bathroom, 712- squarefoot unit in a postwar condo building; apartment has 500-square-foot terrace; full-service building with concierge and doorman; common charges $1,076 per month; taxes $508 per month; asking price $1.49 million; four weeks on the market. (Broker: Elaine Mayers, Citi Habitats) “The seller contacted me because I have sold a lot of apartments in this building. The location is in high demand, and this particular apartment is located on the 18th floor and has 360-degree views. The buyer had been patiently waiting for an apartment in this building for quite a while. The first open house attracted more than 40 people, and the very next day we had seven offers at [asking price] or above. By the end of the week, we accepted an offer for more than $260,000 above the asking price; all of the

offers that were considered were all-cash. The seller lived in the apartment for a long time, but the time had come to retire and relocate. The unit required a gut-renovation, but the views, enormous outdoor terrace, and prime location were worth the renovation expense for the buyer. The seller was a complete gentleman, who honored the accepted offer, even when other, higher offers were put on the table. Buyers and brokers alike were hounding me and making higher offers, even after we were in contract.” Elaine Mayers, Citi Habitats

Gramercy Park $1.74 million 61 Irving Place, Apt. 4A

“I met the buyers at an open house. They liked the location, the exposed brick, high ceilings and new finishes, as well as the built-in features. The apartment is located on a lovely small street a block from Gramercy Park and across the street from Pete’s Tavern, the oldest continuously operating restaurant and bar in New York City. [My clients] had been looking for about four months and originally wanted a condo, but they fell in love with this apartment and the neighborhood. The previous owners wanted a bigger apartment because they are expecting another child. The negotiations were fine, but my clients were traveling, so there was a lot of FedEx involved.” Lisa Borsa, Keller Williams NYC

Upper West Side $439,000 11 Riverside Drive, Apt. 3GE

Three-bedroom, two-bathroom unit in a postwar co-op building, the Gramercy; apartment has loft-like living room with exposed brick, 12-foot ceilings, granite countertops, new appliances and breakfast bar; building has doorman and elevator; asking price $1.75 million; 43 weeks on the market. (Brokers: Stephanie Kanner and Alexis Mintz, Fox Residential; Lisa Borsa, Keller Williams NYC)

Alcove studio measuring 570 square feet in a postwar co-op building, the Schwab House; apartment has walk-in closet, sep-

arate kitchen and large living room; building has doorman, bike storage, roof deck, playroom; maintenance $1,016 per month; asking price $439,000; four months on the market. (Brokers: Dean Feldman, Halstead Property; Michael Chadwick and Robert Rodriguez, Bond New York) “The buyer was a repeat rental customer of Robert’s. She had three months until her lease was up and had won a bidding war in the spring [on another apartment] but backed out. She liked that this apartment faced southeast overlooking a garden, the proximity to Riverside Park and the roof deck for practicing Tai Chi. The fact that her monthly maintenance would be nearly a third of what she was paying in rent was also attractive. The price was extremely competitive and we all knew that it would not stay available long because it was just reduced from $450,000. This was one of the fastest closings in history; on the day of the closing, we were done in approximately 30 minutes. When the treasurer of a co-op board tells you, ‘In my time of service on this board, we have never seen an applicant with a credit score as high as yours,’ that’s a very good sign. Our buyer moved in just two months from the day we submitted our offer.” Michael Chadwick, Bond New York

Compiled by Evan Bleier

GM vacates iconic tower that still bears its name

Automaker subleases out last of its space at 767 Fifth tower to Grosvenor Capital By Guelda Voien .S. automaker General Motors apparently no longer retains a single foot of office space in the Midtown trophy tower that bears its name. GM put three remaining floors at the pricey GM Building, at 767 Fifth Avenue, on the market in 2012. Last month, financial firm Grosvenor Capital Management inked a deal for the last remaining portion of that space, the 14th floor, The Real Deal learned from CompStak. Grosvenor, a leading “fund of funds” for fellow hedge funds, signed a seven-year lease for 38,100 square feet of space, CompStak data show. Grosvenor is currently located at 540 Madison Avenue, according to its website. It was not immediately clear who brokered the deal, and Grosvenor declined to comment. GM once leased a hearty portion of the building, which is now owned by Mort Zuckerman’s Boston Properties, along with Zhang Xin, co-founder of Chi-

Michael Sacks, CEO and chairman of Grosvenor Capital Management (left), and Mort Zuckerman, CEO and chairman of Boston Properties

GM once leased a hearty portion of the building, but over the years the automaker’s presence dwindled. In July 2012, it put the last 114,000 square feet on the sublease block. nese real estate developer Soho China, and Brazilian banking titan Moise Safra (see related story on page 54).

Over the years, the automaker’s presence dwindled, and in July 2012 it put the last 114,000 square feet — floors 14, 15

and 16 — on the sublease block, according to published reports. In the past, a Jones Lang LaSalle team of Peter Riguardi and Lloyd Desatnick represented GM, but it was unclear if they were involved in this deal. JLL, Boston Properties and GM did not immediately return requests for comment. The 2 million-square-foot tower commands some of the city’s priciest office rents. Other tenants at the 50-story property, between 58th and 59th streets, include Macklowe Properties, Estee Lauder Companies and Icahn Enterprises. The rent was in the low $80s per square foot, according to CompStak. In October, agribusiness conglomerate Continental Grain Company signed a 38,100-square-foot, seven-year sublease for the entire 15th floor. In September, GM sublet the entire 16th floor of the property to investment firm Reservoir Capital, as TRD reported. TRD

Follow The Real Deal on Facebook: www.facebook.com /TheRealDealMagazine 96 January 2014 www.TheRealDeal.com

Relationship Driven. Execution Focused. 2013 Financing Transaction Highlights

Milford Hotel

The Aire

Steinway Hall

625 Madison Avenue

Hotel Property 1,331 Rooms

Mixed-Use Property 310 Units

Condo Development Acquisition Loan

Office and Retail Property Fee Position

$250,000,000

$230,000,000

$275,000,000

New York, NY

The Monterey

Paramount Building

616 First Avenue

Multifamily Property 522 Units

Office and Retail Property 788,000 Square Feet

Multifamily Development Site Land Loan

New York, NY

980 Madison Avenue Office and Retail Property 131,000 Square Feet

$155,000,000

$160,000,000

$195,000,000

New York, NY

$130,000,000

$128,000,000

New York, NY

Flatotel

Columbus Circle

Seventh Avenue

Bedford Avenue

Condo Conversion

Office and Retail Property

285,500 Square Feet

225,700 Square Feet

Office and Retail Property 164,500 Square Feet

Retail Development 133,000 Square Feet

$55,000,000

$115,000,000

New York, NY

New York Office

1 Battery Park Plaza 26th Floor New York, NY 10004 Tel: 212-972-3600 Fax: 212-612-0100

$48,800,000

New York, NY

$45,000,000

Brooklyn, NY

New Jersey Office

Florida Office

Illinois Office

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2385 Executive Center Dr. Suite 400 Boca Raton, FL 33431 Tel: 561-367-0005 Fax: 561-367-0099

8170 McCormick Blvd. Suite 110 Skokie , IL 60076 Tel: 773-439-1200 Fax: 773-439-1299

2029 Century Park East Suite 1400 Los Angeles, CA 90067 Tel: 310-867-2300 Fax: 310-867-2350

2173 Salk Ave. Suite 250 Carlsbad, CA 92008 Tel: 858-964-0300 Fax: 212-201-5141

7600 Wisconsin Ave. Suite 800 Bethesda, MD 20814 Tel: 240-507-1919 Fax: 410-504-5748

7150 East Camelback Rd. Suite 444 Scottsdale, AZ 85251 Tel: 212-612-0175 Fax: 212-201-5175

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Commercial market from page 26 lisher Hachette Book Group’s deal to take 137,000 square feet at Vornado Realty Trust’s 1290 Sixth Avenue. Hachette will fill a large chunk of the void left behind by Microsoft, which is relocating to the spec office tower 11 Times Square. Moving further east, SL Green Realty signed Metro-North Railroad Co., a unit of the Metropolitan Transportation Authority, to a 20-year, 265,903-squarefoot lease renewal and expansion at 420 Lexington Avenue, better known as the Graybar Building. Rents paid in the building range from the mid-$40s to the low $50s per square foot, according to data from commercial real estate information firm CompStak. By comparison, the average asking rent in Midtown rose to $69.73 per square foot in December, up $0.24 from November, Colliers data show. The availability rate, meanwhile, dropped 0.3 points to 11.3 percent.

Midtown South The evolution of the garment industry hub into a hip cluster for tech mavens continued yet again last month. Blogging platform Tumblr, acquired by Yahoo for $1.1 billion in May, expanded further at Centaur Properties’ 35 East 21st Street. It now holds about half of the

100,000-square-foot property. Centaur was represented by Newmark Grubb Knight Frank’s Danny Levine and David Falk, while Tumblr worked on the deal in-house. Asking rents at the building are $55 per square foot. Levine told Crain’s that Tumblr created a space that “incorporates everything from an internal cafeteria, to meeting rooms, to open-plan bench-style work seating, to a private elevator, to outdoor space.” The average asking rent in Midtown South rose to $55.18 per square foot last month, up by $1.20 from the prior month, while the availability rate dipped by 0.1 points to 9.1 percent, the lowest of the three major Manhattan markets by some distance.

Downtown Lower Manhattan was the standout of the quarter, Colliers’ Kozel said, with a series of massive leases signed. First, Citigroup opted to stay at its 2.7 million-squarefoot offices at SL Green’s 388-390 Greenwich Street, in a renewal and gut renovation deal that is valued at over $1 billion (see related story on page 54). Citi was represented by a leasing team from CBRE and by a legal team from the law firm Fried Frank. Also in the area, media agency GroupM announced

at the end of last month that it had committed to anchor Larry Silverstein’s 3 World Trade Center in a 20-year, 516,000-square-foot deal. CBRE brokers Lauren Crowley Corrinet, Gregory Tosko, Brendan Herlihy, and Mary Ann Tighe represented the tenant. Silverstein’s Jeremy Moss represented the landlord in-house. Financial terms weren’t disclosed. On the smaller side, healthcare records provider eClinicalWorks took 12,893 square feet at 140 Broadway on part of the 50th floor, and will pay rents starting in the low $50s per square foot over a 10-year term, according to data from CompStak. Even as the area is inundated with new office stock, including 3 and 4 World Trade Center, space in older buildings continues to come onto the market. At 55 Water Street for example, the entire 61,304-square-foot third floor is up for grabs, according to CoStar. The space is being marketed by CBRE’s Howard Fiddle, Evan Haskell and Bradley Gerla. The brokers declined to comment about the asking rents, but CoStar data show that the building’s average rent is $45 per square foot. The average asking rent in Downtown jumped by $1.09 to $48.60 in December, while the availability rate dropped by 0.1 points to 14.3 percent. TRD

Records from page 60 million, the penthouse at 18 Gramercy in Gramercy Park currently holds the record for the highest price ever paid for a Manhattan apartment south of 59th Street. Houston Rockets owner Leslie Alexander picked up the digs for $42 million following Zeckendorf Development’s refashioning of the building into 16 luxury condos (see related story on page 52). The cheapest is currently on the market for $14.7 million. Brooklyn’s priciest listing: Booming Brooklyn, increasingly home to property prices that go toe-to-toe with their glitzy Manhattan counterparts, is now home to a townhouse asking $16 million, located at 177 Pacific Street — a record for a single-family listing in the borough. Several other listings are hot on its heels, with a house at nearby 104 Willow Street asking $12 million. The home is said to have once housed writer Truman Capote. Also near the top are the 50-foot-wide Tracy Mansion at 105 Eighth Avenue, which is asking $15 million, and a seven-bedroom pad at 45 Montgomery Place with a $14 million price tag. Most expensive listing in the U.S.: The Copper Beech home and estate in Greenwich, Conn. remains the most expensive residential listing in both the greater New York City region and the entire country, despite a $50 million price chop in September to $140 million. Rumors have been swirling that an interested buyer is in the midst of negotiations to buy the home, which belongs to timber mogul John Ruddey. But industry observers continue to snicker that the property remains wildly overpriced. The 12-bedroom, 15,000-square-foot mansion dates to the 1890s, and the estate also boasts a 75-foot heated pool, 4,000 feet of water frontage and two offshore islands. Country’s priciest office tower: Chinese real estate developer Zhang Xin’s family, along with Brazilian banking magnate Moise Safra, picked up a 40 percent stake in the General Motors Building at 767 Fifth Avenue this summer, valuing the office property at about $3.4 billion — the highest in the country. The building takes up a full block across the street from the Plaza Hotel between Fifth and Madison avenues and 58th and 59th streets, with the Apple store located at street level. The sale closed on May 31 (see related stories on page 54 and 96), with Zhang’s relatives and the Safra family’s

98 January 2014 www.TheRealDeal.com

Tracy Mansion (above); Willis Tower in Chicago (below)

New York–based investment arm Safra & Co. purchasing the stake through an entity dubbed Sungate Trust. Zhang is the founder and CEO of development firm Soho China, which is based in Beijing. Largest apartment building: A 40-story tower at 606 West 57th Street, to be developed by TF Cornerstone, is slated to become the city’s largest apartment building by units upon completion, with a total of 1,189 rentals. Designed by Miami-based Arquitectonica, which also dreamed up the Westin Times Square Hotel and the Bronx Museum of Arts, the building will also include 42,000 square feet of ground-floor retail and a 500-car garage. However, an alternative plan would not quite make the bar for a record. That one calls for only 848 units, along with a 177 Pacific Street 285-room hotel, plus more than 60,000 square feet of retail space, according to the environmental impact statement filed with the city. Tallest building in the U.S.: The Durst Organization and the Port Authority of New York and New Jersey’s 1 World Trade Center was officially named the country’s tallest building in November, according to a ruling from the height committee of the Council on Tall Buildings and Urban Habitat, an international body that ranks the height of buildings. The Lower Manhattan tower’s 1,776-foot height was hotly debated. Some thought the number owed to its 408foot steel mast, which detractors called an antenna, rather than a part of the structure of the building. But the Council on Tall Buildings ultimately accepted the argument that it is a “spire,” and thus part of the building’s architecture. One World Trade unseated the 1,450-foot Willis Tower in Chicago, formerly known as the Sears Tower. TRD

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De Blasio from page 20 ly, however, and it is another reordering that would require a green light from the state legislature. Some have suggested removing exemptions to the city’s commercial rent tax, which a tenant pays for office space. The tax, which drums up about $680 million a year, according to the IBO, is around 4 percent of an annual lease. Under current rules, tenants with rents of less than $250,000 a year, along with those based north of 96th Street or in the Financial District, are exempt. “It bothers the heck out of some tenants, especially when they come from another city and are not used to it,” said Arthur J. Mirante II, the president of the tri-state region for commercial brokerage Avison Young.

If it pays to keep the streets clean and funds other services, the rent tax, in its current form, should be retained, Mirante said, adding, “$680 million is a pretty staggering amount or money. I don’t think there’s any chance in hell you can tinker with that.” Any move to remove the exemptions or raise the rate would also require approval from Albany. Sources also pointed to rental building taxes — the ones that effect co-ops and condos — as ripe for reform, though de Blasio has not even hinted that he will take up the issue. Rentals are taxed in the same steep category as condos and co-ops, a cost landlords say they often shoulder themselves, rather than pass along to tenants.

“It’s basically an unfair system to rental owners,” said Gary Jacob, an executive vice president with developer and landlord Glenwood Management Corp. And it’s gotten worse over time, between increases to the tax rate and the boost in assessments, he said. More than 30 percent of Glenwood’s rent rolls are taxed today, up from 20 percent three decades ago, Jacob said. “No other city has a burden anywhere near that,” he added. De Blasio might simply focus on making the city’s property tax code easier to understand. “New York’s property taxes are without a doubt some of the most complex, opaque property taxes of any major jurisdiction,” Sweeting said. “There’s room for improvement.” TRD

in 1994, they heard that a 250,000-square-foot, foreclosed office building at 156 William was for sale for $4 million — less than $20 a square foot — they partnered with a fellow tenant at 135 William to buy it. “Initially, the business plan was ‘we’ll take office space across the street and make an investment out of the deal,’” Witkoff said. “Nobody wanted it. So we bought it and fixed it up and learned the office business.” More office buildings followed, at 1 Broadway, 33

since his death,” Witkoff said.

Witkoff from page 47 “It was almost as if my father had read some sort of Psychology Today story about how to have a rapprochement with your son,” he said. “This was a big moment in our lives. It was such a boost for me.” Within three or four years, Witkoff and Gluck had left behind the law and set up a shingle in a 150-square-foot office on Park Place in Lower Manhattan. The room was so small that the static electricity, which kicked up when the partners walked on the carpet, shorted out their phones. They called their company “Stellar Management,” for “Steve and Larry.”

Entrenched in it Initially, Gluck and Witkoff considered themselves “deal guys,” who bought and flipped properties. But they were forced to modify their plans when the downturn hit in 1989. By then, they owned nine or 10 properties. With rents coming in slow and the resale market suddenly gone, the two hunkered down and tried to keep down costs. “Looking back, we just didn’t have a clue as to how to run property,” Witkoff recalled. “We didn’t understand at first that these properties needed a lot of work, they were maintenance machines.… The toilets and plumbing were breaking down. And all the capital systems needed upgrading.” Those days, Witkoff said, were “the defining moment in my life.” “We had very little capital and financial cushion, I was forced to really get out there and learn how to operate real estate,” he said. “We were there every day entrenched in it.” The pair recruited a crew of Albanian and Czech supers and maintenance men, and carried beepers. Witkoff spent New Year’s Eve 1991 in the basement of a building on 124th Street and Madison Avenue helping his plumber with a sewage backup. Soldering copper pipes wasn’t the only skill Witkoff acquired. He also learned to use a gun — which he sometimes carried in his gym bag. “They were very difficult days up there, and I had a lot of scares,” he recalled. “We owned a building on 143th and Broadway and it was a very, very rough neighborhood in those days, tremendous heroin dealing and cocaine dealing, and multiple times we were in situations where we heard gunshots or we were inside a building and we were threatened.” It was during this time that Witkoff began forging new relationships with some of the real estate figures he would later recruit as partners. Indeed, around 1990, Schron, a former legal client, helped Stellar secure its first $250,000 line of credit. Armed with their new financing and a growing stable of collaborators, Witkoff and Gluck became active buyers of foreclosed Freddie Mac properties. They also got their first opportunity to buy office buildings. By then they had moved their own office to 135 William Street. And when 100 January 2014 www.TheRealDeal.com

701 Times Square, which Witkoff bought with the Vector Group and others. The group plans to build a 39-story development, anchored by a Marriott Edition Hotel.

Maiden Lane and 10 Hanover Square. Many of these properties, Witkoff recalled, were bank owned and still being managed by institutional management firms, which were bloated and inefficient. Given their cost-cutting experience during the recession, Witkoff and Gluck thought they could do it better. “If we were looking at a 10 percent leverage return, we would know that we could almost instantaneously turn that into a 15 percent return,” he said. Gluck and Witkoff split in 1997 in part because Witkoff was focusing on office buildings, while Gluck was concentrating on multi-family, Witkoff said. But looking back, Witkoff said he’s never forgotten his early lessons, and believes those early years “made me a more evolved person.” “Because I met people from a milieu and a socioeconomic world that I had never met before,” he said, “it gave me context about how lucky my life was. It made me have a tremendous, tremendous appreciation for what other people go through, and how difficult their circumstances can be.” In 2011, when his own son Andrew died of an Oxycontin overdose, he drew on those lessons. “When I look at tough circumstances in my life, the loss of a son — I’m not sure I could imagine a tougher circumstance — I think about what other people go through, and that is sort of what gave me the strength on my journey

Optionality: a big word Witkoff was able to emerge from the most recent recession in relatively good shape in part because of the foundation he created with his early buys, he said. “We bought the Daily News building [at 220 East 42nd Street] for 80 bucks a foot!” he said, citing the 1997 purchase as an example. “That set me up in a really good fundamental way.” Witkoff, noted Lorber, “has an unbelievable track record and has never given up a property.” “He was one of the first guys after the recession to get a financial institution to back him,” Lorber said. When Witkoff made his first big buy post-recession with Lorber at 1107 Broadway, many in the industry suggested that he had vastly overpaid. But in hindsight, the move looks prescient. Witkoff and his partners originally expected to sell the converted condos at about $1,750 a square foot, Lorber said. But with almost 90 percent of the building sold, they’ve been getting a “shade under $3,000,” he added. “At the time, everybody was saying that he ‘overbid’ for the asset,” said RCA’s Fasulo. “But that acquisition for a condo conversion was probably the most timely acquisition I have seen this cycle. It seems like only months after that purchase, the condo market started to explode.” Witkoff, Fasulo added, has “been doubling down ever since.” Witkoff is also developing a hotel-condo project with Schrager on Chrystie Street, and is working on a 15-story, 98-unit condo conversion at 150 Charles Street, among other projects. Though the project is sold out, a group of West Village residents have been trying to derail it, citing zoning violations. Last month, they announced plans to file a lawsuit alleging that a connecting parking lot would violate the Clean Air Act. Still, it’s the project on Central Park South that has industry insiders buzzing most. Witkoff said he expects the property as a hotel to generate an unlevered cash flow of around 4 percent of the purchase price. Sources unconnected to the company say the Witkoff partnership has been poking around, attempting to acquire adjacent land. “The layout is a little bit awkward for condos,” said the source. “But if they can get one or two more sites adjacent to it, it could be one of the best development sites on Earth.” Witkoff insisted the partnership has not yet decided how to proceed. “We just like the optionality, and it’s very, very rare, and that’s a big word for us,” Witkoff said. “It doesn’t have a longterm management contract, so there are many different ways we can go.” TRD www.TheRealDeal.com January 2012 00

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Book review from page 44 estate prices have long sculpted the streetscape and city life. Indeed, by the 1920s, the Chelsea was struggling financially, and never quite recovered. In 1939, an investment group led by hotelier David Bard purchased the hotel out of foreclosure (it was rumored he won it in a poker game), and his accountant son, Stanley, took over management after his death. By Tippins’ own account, Stanley made the Chelsea what it was — at least as much as the string of Beat poets, Abstract Expressionists, punk rockers and avant-garde gurus who lived there (many of whom have had gallons of ink spilled over their lives). It was Stanley who allowed artists to swap paintings for rent, who would “scurry from floor to floor, providing drop cloths for these artists, looking after their children, and mediating disputes,” causing playwright Arthur Miller to wonder whether “somehow the

impressionable young manager had become convinced that the artists at the Chelsea were normal and that the people outside its doors the strange ones,” Tippins writes. And yet, Stanley is a near-silent figure in “Inside the Dream Palace.” Questions proliferate: Who is this man? What was his life like? Why did he become so invested in the hotel and its residents? Throughout the book, Tippins uses a handful of Chelsea residents — novelist and critic William Dean Howells, composer Virgil Thomson, rocker Patti Smith and others — to tell a story about New York’s artistic history. And yet, a deep dive into the Chelsea’s ownership structure and descent into squalor this is not. For Tippins, the last major event on the Chelsea’s time line is the murder of Nancy Spungen, the girlfriend of Sex Pistols bassist Sid Vicious, who died soon after at the age

of 21 from a heroin overdose. That was in 1978. Tippins concludes her history two years later, meaning the book is frustratingly quiet on the ouster of Bard as manager in 2007, the Chetrit Group’s purchase of the hotel in 2011 (when it was closed to guests), and the future of the iconic property, now in the hands of Ed Scheetz’s King & Grove hotels. With tenant lawsuits settled, Scheetz has vowed to bring peace and diversity to the Chelsea; he is reportedly considering adding retail and a bar to the hotel, where rooms would go for $200 to $1,000 a night. “We want young people that don’t have a lot of money to be able to experience it and interact with somebody who may have the greatest suite in the hotel,” Scheetz told the New Yorker recently. The sentiment sounds similar to Hubert’s intention for the hotel over a century ago. If only “Inside the Dream Palace” had more to say on it. TRD

Top commercial deals from page 55 That building stake sale was followed by deals at One Worldwide Plaza, 1345 Sixth Avenue and 605 Third Avenue. Real estate investment trust American Realty Capital bought a 48.9 percent stake in One Worldwide Plaza from a consortium of investors led by George Comfort & Sons, while the Rockpoint Group bought a 49.5 percent stake in the other two towers from the estate of billionaire Daniel Ludwig for a combined $1.1 billion. Knakal attributed the rise in building stake sales to a fundamental shift in the way the capital stack was structured in the wake of the recession. “In 2006 and 2007, an investor could put just 5 or 10 percent equity in a deal and completely finance the rest of the purchase,” he explained. “In the last few years, we’ve seen that level of financing is not available, so the operator that’s going to run the building needs to go out and get equity investors.” Often, the objectives of the equity investors and the operating partners clash. As a result, an increased number of equity investors have wanted out, prompting partial stake sales, he said. Others said the rise in stake sales was the result of an uptick in the number of foreign investors active in New York. Foreign companies, rushing to get capital into New York, can avoid taxes by acquiring a non-controlling stake of a property. As outsiders, they may also want to partner with an experienced local player in order to maximize their return on investment. “When you’re buying a non-controlling interest in the building, all you’re really doing is placing your capital to work,” said Michael Cohen, president of the tri-state region at Colliers. “It’s pure capital flight and has nothing to do with investing to reposition. It’s a step above buying stock in a real estate investment trust. It’s a pure capital play.”

Leasing woes subside Manhattan’s office leasing experienced a revival heading into the spring, but leveled out by the third quarter. Cushman & Wakefield regional research director Donald Noland told TRD that he expected new office leases,

7 Times Square was the fourth priciest building stake sale last year at $684 million.

not including renewals, to exceed 25 million square feet for 2013 once all the numbers are in. That’s a nearly 8 percent jump over the 23.2 million square feet seen by the commercial brokerage in 2012. Average asking rents in 2013’s third quarter were $63.55 per square foot, up 12.4 percent from $56.52 year over year, and up 2.3 percent from $62.13 from the second quarter, according to data from Cassidy Turley. Of the 10 largest Manhattan office leases in 2013, there were three new leases and six renewals and one leaseback. In 2012, however, there was just one new lease. “The big thing to note is that a lot of this is new leasing activity,” Noland said. “What that means is that renewals have dropped off a little bit over the past year. [That new activity is] a sign that tenants are looking to make a bigger

investment in their location.” Still, some said tenants remain antsy that the market might not be able to sustain the recent wave of growth. “So many tenants are concerned that we are on a peak,” said Newmark Grubb Knight Frank principal Mark Weiss. In the biggest lease of the year, which was valued at more than $1 billion, financial services giant Citigroup renewed its 2.7 million square feet of space at 388 and 390 Greenwich Street. The complex is owned by SL Green Realty, which is headed by Marc Holliday. Sony Corporation of America had the second biggest office lease of 2013 with a 798,420-square-foot leaseback deal from the Chetrit Group at 550 Madison Avenue. Sony sold the building to a Chetrit-led consortium of investors for $1.1 billion last January, but inked a deal to lease back the premises for three years. Other high-profile deals included Macy’s Merchandising Group, a division of Macy’s department store, taking 646,434 square feet at 11 Penn Plaza, and the law firm Simpson Thacher & Bartlett snapping up 595,799 square feet in a deal at 425 Lexington Avenue. For the Downtown Manhattan leasing market, the year was particularly favorable, brokers said. In addition to 523,000 square feet of positive net absorption in the third quarter, the area saw leasing volume jump by 2.8 percent in October, the most recent month for which data was available, compared with a year ago. Meanwhile, the average asking rent during that time ticked up by 14.8 percent, to $45.66 per square foot, according to information provided by Cushman & Wakefield. The activity has been driven in large part by non-financial tenants jumping ship from Midtown and Midtown South. “Registering more than a half of a million square feet of positive absorption during the third quarter is remarkable,” said Tara Stacom, a Cushman & Wakefield executive vice president. “For perhaps the first time in its history, Downtown is increasingly being seen as a tenant’s most desired option.” TRD

In memoriam from page 59 701 Seventh Avenue, Midtown Pre-demolition began last month on two buildings at 701 Seventh Avenue, near 47th Street in Midtown, to be replaced by a Marriott Edition hotel. Steven Witkoff and Michael Asner paid $2 billion for the 120,000-squarefoot property late last year (see related story on page 46). Community Board 5 unanimously endorsed an air rights transfer for the 39-story, 270,000-square-foot hotel proj102 January 2014 www.TheRealDeal.com

ect, which will include 66,360 square feet of retail.

Inisfada, Long Island Despite protests from preservationists, this 72,000-squarefoot, Elizabethan-Tudor-style mansion named Inisfada (Gaelic for ‘Long Island”) on a 33-acre estate in North Hills is in the process of being dismantled. The doors, windows and mantels were removed after the village issued a dem-

olition permit earlier this month, Newsday reported. Developer Manhasset Bay Group acquired the land from the Jesuit order of Catholic priests in July for $36.5 million. It had served as a house for religious study and retreat since being donated to the Society of Jesus (the Jesuits) by Genevieve Brady, widow of industrialist Nicholas Brady, in 1937. Plans call for a gated community of high-end single-family homes, officials told the newspaper. TRD www.TheRealDeal.com January 2012 00

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McCourt from page 31 boy for over-leveraging. “On the one hand, he’s an absolute genius because he was able to buy the team for just a few hundred million dollars with virtually no cash and then sell it for over $2 billion,” said one person familiar with the situation. “Or, one could argue that he’s everything that’s wrong with the system. He basically played the system really well.” While the lean, white-haired McCourt has a charming demeanor, he’s also a tough negotiator, sources said — though not the villain portrayed in the papers. “The whole Dodgers saga is not the Frank McCourt I’ve seen,” Ivanhoe said. “He’s cordial and he’s warm, but he’s tough when he needs to be. When he says no, it’s no.”

The new venture McCourt decided New York should be the global headquarters for his new fund, inking a deal for his 10,000-squarefoot Manhattan office early last year. “From a business perspective, with one of our focuses being real estate, we feel this is the city to be in,” he said. “This is a great base to be operating from when you’re thinking from a global perspective.” He also personally relocated to the city, snapping up a trophy apartment. Public records show he acquired a $50 million six-bedroom co-op at 944 Fifth Avenue from David Hamamoto, the CEO of NorthStar Realty Finance. The broker on the deal, John Burger of Brown Harris Stevens, declined to comment. After months of deliberation on the fund’s direction, McCourt scooped up the vacant site at 356 10th Avenue in August. No brokers were involved in the transaction. “We were trying to figure out, do we want to become more of a development company or more of a buy-andhold real estate company?” Wilhelm explained. “Frank

kept coming back to sexy development deals and the idea of building important buildings. There were some trophy assets that we were looking to do on a buy-and-hold basis in big cities, which also peaked his fancy, but these mixeduse developments, which had residential up top and office and retail at the bottom became a recurring theme.” Indeed, the transaction was sexy, especially since the land was valued so much higher than the $42 million that the Sherwood partnership paid British banking giant Barclays for it in 2011. (Barclays wrested control of the site earlier from developer Gary Barnett.) But according to Sherwood’s Katz, McCourt paid market rate. “It wasn’t that the price he paid for it was so high. It was that the price we bought it for was so low,” Katz said. “We bought it when the market was in the doldrums.… Hudson Yards hadn’t started yet and, in that environment, people didn’t know if it would ever happen. So we got a heavy double discount.” McCourt plans to construct a 730,000-square-foot tower that will include residential condominiums on top and retail on bottom. What’s in between is still undecided; the fund is debating between office and hotel use, McCourt said. Once that’s set, McCourt may solicit submissions from potential architects. A construction start date has not yet been determined. McCourt and his partners have identified development as their best chance at success. “Returns are going to have to be in projects which have a development aspect to them, whether it’s from the ground up or value-add,” said Henry Silverman, global head of real estate at Guggenheim. “Buying a completed office building net-leased to a credit tenant at a 2or 3-percent cap rate is, in our opinion, a recipe to lose

money, and it’s a view that McCourt shares with us.” McCourt agreed: “Just competing on price for existing product isn’t going to be where we’ll succeed.” So far, McCourt has not hired any brokers in New York. But, he said, a number of brokerages have approached him with prospective deals. Meanwhile, he has assembled a team of about 30 professionals in his New York and L.A. offices to handle all of his interests, including real estate. Ten of those staffers are actively sourcing deals in New York, L.A. and other major urban markets. But those hires are not former brokers or execs from New York development firms — and some are straight out of business school. A limit has not been set on how much of the company’s capital will be deployed in any given market, a spokesperson said. At press time, negotiations were underway for another New York site, said McCourt, who declined to offer any specifics. The team has already passed up on two significant New York deals, said Greenberg Traurig’s Ivanhoe, pointing to their fussiness as a potential sign of future success. “This market is so crazy that a lot of investors, particularly non-New Yorkers, want to plow ahead in order to invest here no matter what, and so they don’t always do their homework or they hold their nose through the problems to win competitive bids,” he said. “Frank has a much more thoughtful and sober approach. He passed on two hairier deals before he settled on this one, which was probably the right decision.” While McCourt is keeping mum about his next deal, he’s bullish on New York. “If you can’t get excited about New York looking out that window, there’s something seriously wrong with you,” he said as he stared out at Central Park. TRD

one year after Schreiber and his wife Lori Fisher Schreiber snapped up a six-bedroom co-op at 1030 Fifth Avenue. The 15CPW unit was listed with Kyle Blackmon of Brown Harris Stevens two years before the sale, but was not publicly listed at the time of the deal. Blackmon declined to comment on the deal. The buyer was listed in public records as Mussik Capital Corp. The Schreibers acquired the unit in 2008, for $11.19 million, public records show. According to news reports, the corner living and dining rooms have floor-to-ceiling windows with views of the Central Park reservoir and a 16-foot bay window, while the tiger-striped maple-paneled library has built-in shelving. The home also has a formal dining room with a fireplace. The Robert A.M. Stern–designed building has, of course, garnered headlines as one of the world’s most exclusive condos, and has been home to celebrities such as Yankee slugger Alex Rodriguez and actor Denzel Washington. But of the top 20 deals of the year, just two were at 15 Central Park West, the same number as in 2012. The other major deal at the storied building was the sale of NASCAR star Jeff Gordon’s pad for $25 million in October. The Schreibers bought the Fifth Avenue unit from cellular communications mogul George Blumenthal for $31.5 million in 2012.

Nigerian-born supermodel Oluchi Onweagba, bought the home for $12.35 million in 2008. The property was purchased by an LLC named Mou, public records show. Sami Hassoumi of Brown Harris Stevens represented the seller of the property, which was not listed on the market. Rather, it sold after three private viewings scheduled for just before the listing went online. “We were about to list it but this whole thing happened so fast,” Hassoumi told TRD. “In the 24 years I’ve been selling properties, I’ve never seen a house selling so fast.” When Orlandi bought the five-story, 7,056-square-foot building, which has an outdoor garden and terrace, it had been owned by the same family since 1954 and was divided into two apartments with a doctor’s office on the ground floor. Its period details had been removed during a previous renovation. The fashion mogul rebuilt the property from scratch, replacing its red-brick façade with classic limestone. The resulting five-bedroom, six-bathroom residence has two wood-burning fireplaces, an elevator and a rooftop garden. “He ripped everything inside out,” Hassoumi said. “That property was the ugliest building on the block and it became the prettiest.” Orlandi eventually decided to sell the property because his wife preferred the apartment lifestyle, Hassoumi explained. The couple moved to a penthouse in the Gramercy Park area, he said. TRD

Top residential deals from page 53 cluding the $29.78 million sale of the building’s second penthouse unit. The 8,400-square-foot unit was purchased by Abingdon Property LLC, but the buyer behind the LLC is unclear. The purchase price was 53 percent higher than the $19.5 million asking price because the buyer combined a 5,295-square-foot-penthouse unit with a 3,200-square-foot unit below to make the giant spread spanning three floors. Crowley of Flank Brokerage represented the sponsor in the deal. He declined to comment on the identity of the buyer, quipping only that the person obviously had “great taste in real estate.” The Georgian building was constructed in 1906 and was converted into 10 apartments by Flank in 2011. The developer snapped up the former nursing home for $33.3 million. Residents of the doorman building have access to a gym, a sauna and private storage rooms. The building’s 10 units are each larger than 3,200 square feet. The cheapest was $8.75 million. The last unit at the property, a $10.5 million unit on the seventh floor, is now in contract, according to StreetEasy. “With the Abingdon, it’s all about location,” said Michael Graves, a broker with Douglas Elliman who had toured a unit at the building but not seen the penthouse. “You’re right in the heart of the West Village, where everyone wants to be.”

15 Central Park West, #33D Closing date: July 10, 2013, Price: $29 million Zachary Jared Schreiber, a founder and the chairman of hedge fund Pointstate Capital, sold his 3,173-square-foot, 33rd-floor condo at 15 Central Park West for $29 million during the summer. The deal, the fourth-priciest closed sale of 2013, came 104 January 2014 www.TheRealDeal.com

12 East 76th Street Closing date: March 28, 2013, Price: $27 million Italian designer Luca Orlandi, owner of fashion label Luca Luca, sold off his Upper East Side townhouse at 12 East 76th Street for $27 million in March in a notably quiet deal. The Milan-born fashion guru, who is married to

C O R R E C T I O N S A N D C L A R I F I C AT I O N S In the December magazine story, “The skinny on SHoP’s new skinny tower,” TRD misstated the width of the building. It is 60 feet wide. www.TheRealDeal.com January 2012 00

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Retail deals from page 42 “The retail market is exploding in New York, with so many retailers from all over the world looking for space,” said Faith Hope Consolo, chairman of Douglas Elliman’s retail group. “Retailers are coming from nearly every continent.” While Manhattan rents are traditionally highest on Fifth and Madison, Times Square emerged as a competitor. Times Square will be next to breach the $3,000-per-square-foot average mark, said Jeffrey Roseman, a founding partner of Newmark Grubb Knight Frank’s retail division, who predicted that benchmark will be surpassed this year. Indeed, rents in the submarket spiked 17.3 percent, to a median ask of $2,170 per square foot in the second quarter, from $1,850 last year, Cushman said. This month, TRD looked at the biggest Manhattan retail leases — at 125th Street or below — of 2013. While none of 2013’s leases matched Nordstrom’s announcement in 2012 that it would lease 285,000 square feet in Midtown, this past year saw two retailers ink deals for their largest New York City stores to date, and four deals over 50,000 square feet — up from two in 2012.

Meanwhile, gyms took spaces all over the city, with five of the top 20 leases belonging to fitness facilities. Discount gyms made their mark for the first time, as New Yorkers looked to save money on membership fees and supplement their workouts with trendy classes at places like CrossFit and SoulCycle, said Roseman, who represented Blink Fitness in its lease for 27,832 square feet at 31 Penn Plaza, which clocked in at No. 11 in 2013.

Blink, which offers membership for as little as $20 per month, is planning to open between five and 10 Manhattan locations this year. “The trend in the fitness world has been to a less expensive model,” Roseman said, so that gym-goers can “still go to your SoulCycle or spin class and it won’t break the bank.” Nevertheless, Blink’s parent company, Equinox, a subsidiary of the Related Companies, signed leases for two large spaces, including 35,000 square feet at 2 World Financial Center — the eighth largest retail lease inked in 2013 — and a Bryant Park deal at the new retail project called “the Cubes.” Patrick Smith of SRS Real Estate Partners represented landlord Equity Office at the Cubes at 120 West 42nd Street. He said the deal, which had an asking rent of $2 million per year, was just one of many slated for the Cubes, a glassy 75,000-square-foot retail project at the base of 1095 Sixth Avenue, an office tower. “Bryant Park has never really had a retail infrastructure,” said Smith. “Equinox was the first transaction to really get the ball rolling; we have activity on every single space.” (Whole Foods also reportedly signed a lease at the Cubes as well, while Blink is said to be in talks for 20,000 square feet there. Smith declined to comment on either deal.) Other notable deals in the top 20 were the 45,814-squarefoot lease by Ralph Lauren at 711 Fifth Avenue, where according to published reports, the space will serve as a flagship for the company’s Polo brand; a 25,000-square-foot renewal at 575 Broadway by Prada, and a 21,738-square-foot re-up by Hermès at 691 Madison. Representatives on both sides either declined to comment or did not return calls. Meanwhile, CVS took 25,000 square feet at 3 Columbus Circle, while grocer Jubilee Marketplace inked a deal for 25,000 square feet at 5 East 17th Street, in the Union Square area. And chain restaurant Señor Frogs signed on for 20,977 square feet at SJP Properties’ 11 Times Square in February, according to published reports. Brokers are optimistic about 2014. “We’re seeing huge flagships opening around Manhattan, long before Nordstrom’s planned 2018 opening,” said Consolo, referring to the department store’s seven stories being built at the base of Extell Development’s 225 West 57th Street. That opening, she said, will spur even more interest in prime Manhattan retail. Expect more “Eataly-type concepts,” as well as a British Invasion — Primark, the United Kingdom’s version of Target, is looking to open and Topshop is looking to expand, said Roseman. He also predicted continued expansion from Inditex, the parent company of Zara and Massimo Dutti, who “have obviously been extremely aggressive.” TRD

“Clearly when times are tight in the regular job market, more people gravitate towards the real estate profession,” said Gary Malin, president of Citi Habitats, Manhattan’s fourth-largest brokerage by agents. “We had a very robust hiring year.” But Malin underscored that there are high rates of attrition in residential real estate. “A lot of people come into

this industry for all the wrong reasons,” he said. When people are not prepared, with resources like a healthy Rolodex, they will often find the business more difficult than expected. “They don’t necessarily comprehend how difficult being a real estate professional is,” Malin said. “There’s a learning curve.” TRD

more on “lifestyle” products than the retailer’s other locations, which mainly sell clothing. Wade McDevitt and Keith Fencl of the McDevitt Company represented Urban Outfitters, but did not respond to calls. Andrew Goldberg and Matt Chmielecki of CBRE represented Malkin, but declined to comment. In mid-December, Barneys New York announced it would open a Downtown flagship on Seventh Avenue, stretching from 16th to 17th streets, where it had previously had a massive outpost. It relinquished the space in 1997 when it sought bankruptcy protection. Roseman represented the tenant, who reportedly took 57,000 square feet at the building, owned by retail developer and owner Equity One. Equity One did not

Rankings revealed The largest retail deal of the year was not at any of the conspicuous Fifth Avenue or Madison Avenue spots. It was H&M’s 62,923-square foot lease at Herald Center, the humble shopping mall at 34th Street and Sixth Avenue. While she declined to comment on the lease details, CBRE’s Susan Kurland, who represented landlord JEMB Realty, said the biggest obstacle to getting the deal done was the fact that some potential tenants had a psychological barrier about the location. “The most important piece of the transaction,” she said, was “getting the message out to the market about the transformation of that street.” With Macy’s nearby flagship undergoing a renovation, retail along 34th Street is set to improve dramatically, she said. The new store will be H&M’s largest in the city. Construction is underway, and the store will open in the fall. JEMB will also renovate the center’s facade before the retailer arrives. “It’s going to look like a brand-new building,” Kurland said. The second-largest deal of the year was furniture purveyor Room & Board’s lease for 60,919 square feet at 249 West 17th Street in Chelsea. The deal was signed in October, and Room & Board will open in the summer. “Literally, they walked into the space and said, ‘We want this deal,’ ” said Newmark’s Roseman, who represented landlord Savanna. “There was none of the usual grandstanding.” Roseman declined to disclose the taking rent, but the asking price was $125 per square foot on the ground floor, and $70 per square foot on the second and third floors. Ranking third on the list of 2013’s largest deals was Urban Outfitters’ 56,730-square-foot lease at Malkin Holdings’ 1333 Broadway. The building at 36th Street is blocks from the massive H&M. The 15-year lease had a blended rent of $6.5 million per year, according to published reports. “This store will be a huge catalyst for this retail and office neighborhood extending north of Herald Square,” said Anthony Malkin, president of Malkin Holdings, when the lease was announced in June. Urban Outfitters took possession of the space in September. The outpost will reportedly focus

The Whole Foods Market in Union Square

respond to a request for comment. The fifth-largest lease signed last year was by the ever-popular grocer Fairway, which leased 52,252 square feet for 20 years at Jack Resnick and Sons’ 255 Greenwich Street in October. Newmark’s Jason Pruger and Alan Cooperman of Welco represented Fairway in the complex deal, which involved buying out a number of office and retail tenants for the two-story space, Pruger said. The market is slated to open by the third quarter, he said. Fairway’s lease created a ripple effect, Pruger said, with chains like Juice Press signing leases for space nearby. Asking rents were $250 per square foot for Fairway’s 11,358 square feet on the ground level and $100 per square foot for the 40,894 square feet above that, Pruger said. Calls to Jack Resnick and Sons were not returned. Fairway also leased 48,875 square feet at the massive Hudson Yards project (see related story on page 40).

‘Exercising’ leases

NYC agents from page 60 “People need some place to invest their money. New York City real estate has proven to be a great place for that,” Behin said, adding that in the next year, he will be ramping up his Queens presence, with his investment sales team increasingly pushing into Astoria and Long Island City. But the majority of the growth in real estate pros was almost certainly on the residential side, experts said. 106 January 2014 www.TheRealDeal.com

www.TheRealDeal.com January 2012 00

Syrian retail from page 37 Investor: Stanley Chera Firm: Crown Acquisitions Manhattan retail revenue: $49M

From left: Jason and Albert Laboz

Last month, it also sold 414 West 14th Street — which it partnered to reposition with the Carlyle Group — for $94 million. The buyer was an affiliate of the Spanish apparel firm Inditex, which owns Zara.

he Chera family also started in the apparel business, investing in the buildings that housed its chain of children’s clothing stores known as Young World, which patriarch Isaac launched. By the late 1980s, Isaac’s son Stanley was investing in major Manhattan real estate, teaming up with another SY, Morris Bailey, to snag a piece of the Herald Center. Chera, who’s now in his early 70s, launched Crown Acquisitions, but has handed much of the daily operations to his sons Haim, Isaac (Ike) and Richard. Crown, based in the GM Building, typically sells its properties after repositioning, so publicly available records do not show it to be a major Manhattan landlord today. But the 14 Manhattan retail properties that TRD identified Crown as owning a stake in bring in an estimated $49 million per year. The firm also derives significant revenue from negotiating leases for other companies through its brokerage arm, Crown Retail Services, and from asset management fees. When Stanley Chera first began investing, he was typically a junior partner to other players, like Bailey or the Feil Organization. But in the mid-2000s, the company began getting more aggressive. In 2008, for example, it partnered with the Carlyle Group and Kushner Companies to pay $525 million to acquire and reposition the retail at 666 Fifth Avenue. Over four years, the trio transformed it into two commercial condominium units that then sold for more than $1 billion, although Crown owned only a small equity stake, insiders said. The firm struck two similar high-profile deals last year. The first was with Oxford Properties and the Onassis Foundation to reposition the retail at the Olympic Tower on Fifth Avenue; the second was with Oxford, Vornado and others, at 650 Madison Avenue, where the group paid more than $1.3 billion and is planning to revamp or rebuild. It was also part of a large partnership that included Feil Organization and BLDG Management, which sold the retail at the St. Regis Hotel at 2 East 55th Street in 2012 for $380.6 million three years after buying it for $117 million. When the company, like Thor — Stanley is actually Sitt’s uncle — expanded into third-party brokerage and launched Crown Retail Services in 2011, it hired two senior brokers from the now-defunct brokerage Madison Retail Group to run it. The firm now has major clients such as the rapidly expanding gym Planet Fitness and Spanish sandwich chain 100 Montaditos.

Investors: Al, Jody and Jason Laboz Firm: United American Land Manhattan retail revenue: $25M

T Centurion Realty bought 103 Prince Street with partners for $70.9 million. The property is home to the Apple store.

The Takashimaya building at 693 Fifth Avenue, where Thor landed Valentino as a retail tenant last year

Investor: Ralph Tawil Firm: Centurion Realty Manhattan retail revenue: $20M

Investors: Eddie, Ralph and David Sitt Firm: Sitt Asset Management Manhattan retail revenue: $28M

he Sitt brothers — Eddie, Ralph and David — own a stake in at least 10 retail properties in Manhattan, with a concentration on Soho, where their firm Sitt Asset Management has five. Those five include 113 Spring, which houses the shoe store Frye; 138 Spring, which has eyewear retailer Ilori; as well as 145 and 169 Spring and 450 Broadway. The firm’s largest investment by far is 2 Herald Square, which it controls through a long-term lease with the ground owner, SL Green. In addition, in a joint venture with Ashkenazy Acquisition, Sitt Asset, based in One Penn Plaza, closed late last month on the $47 million purchase of 711 Madison Avenue, a five-story building with fashion retailer Roberto Cavalli on the ground floor. Its Manhattan retail properties bring in an estimated $28 million in revenue annually. The Sitt Asset brothers are distant relatives of Joe Sitt. The company’s focus is on buying and re-leasing. It rarely engages in ground-up construction.

108 January 2014 www.TheRealDeal.com

he family firm — run by brothers Al, Jody and Jason Laboz — owns about three dozen retail properties in New York City, predominately clustered south of Houston Street in Manhattan as well as in Brooklyn. Indeed, the company is by far the largest owner of retail frontage on Canal Street between West Broadway and Centre streets, with 11 properties that include roughly 400 feet of frontage. Some of the units are leased to national tenants, including Bank of America, but many are leased to local operators. The firm, based at 430 West Broadway, has a total of 30 Manhattan retail properties that bring in an estimated $25 million in revenue a year. In addition to Canal Street, the company also is a major retail owner on lower Broadway and West Broadway. Those properties stand to benefit from rising prices in the heart of Soho, which are breaking $1,000 per square foot. In Brooklyn, the company owns the retail space in the borough’s Municipal Building at 210 Joralemon Street, where it just renovated the ground floor and installed Sephora, and 505 Fulton Street, among a handful of others. But the company hasn’t focused exclusively on retail. It has developed residential condos in Manhattan and Brooklyn, as well. The trio’s father Jack acquired many of the properties in the 1970s and 1980s.

In Brooklyn, Laboz owns the retail space in the borough’s Municipal Building at 210 Joralemon Street, where it just renovated the ground floor and installed Sephora.

alph Tawil, 38, founded Centurion Realty in the late 1990s. He had expected to enter the family’s garment manufacturing business after graduating from college but stumbled into real estate while trying to find billboard tenants for a property the family owned south of Times Square, he told TRD. Centurion’s most valuable property is 103 Prince Street, which is home to the Apple store. The firm partnered with Crown and Imperium Capital to buy the property in 2011 for $70.9 million. Indeed, the firm’s assets are concentrated in Soho, where nine of its 18 properties are located. But it’s been buying actively over the past year, largely because the company made a windfall as a minority partner along with Crown, the Safra Group (an internationally based SY family) and others on the $380 million sale of St. Regis retail in 2012. In July, it made two Soho purchases. It partnered with Bethesda, Md.–based institutional investor ASB Capital Management to pay $41 million for 413 West Broadway, a retail-and-office property, and then again with Crown and Imperium to pay $19.6 million for 120 Prince Street. Tawil said he expects the ties between institutional funds and retail investors to grow in the coming years. “We are learning a lot from the institutions, and they are learning from us,” he said. For example, some institutional investors are recognizing the advantage that smaller, nimble firms have when it comes to deploying capital fast. Centurion’s Manhattan retail assets bring in an annual estimated revenue of $20 million, according to TRD’s estimate. The company, which manages properties as well, has about 30 employees, and is located at 512 Seventh Avenue, which is also the headquarters for Tawil’s family’s apparel company. TRD www.TheRealDeal.com January 2012 00

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New York Commercial Real Estate Women presents “Global Real Estate Trends in 2014.” Featured speakers include Heidi Learner, chief economist at Studley; Jonathan Woloshin, co-head of fundamental research at UBS Financial Services; and Dennis Yeskey, chairman of the MIT Center for Real Estate. 6 p.m. to 8 p.m. UBS Financial Services, 1285 Avenue of the Americas. Fee: $75 for members, $90 for members of other CREW chapters; $110 for nonmembers. Information and registration: nycrew.org.

The American Institute of Architects presents, “Creating Resilience: Transformation of Urban Infrastructure.” Susannah Drake, founding principal of dlandstudio architecture + landscape architecture pllc, will be the featured speaker. Topics to be discussed include how to anticipate impacts of global climate change in urban and suburban infrastructure systems, and the connections between buildings, infrastructure and ecology. 8 a.m. to 10 a.m. The Center for Architecture, 536 LaGuardia Place. Fee: free for members, $10 for nonmembers. Information and registration: www.aiany.org.

The New York Building Congress in conjunction with Lend Lease, Parsons, Sciame, STV, and Weidlinger Associates Inc. presents its Annual Membership Meeting & Construction Industry Luncheon Forum. Speaker TBA. 11:30 p.m. Mandarin Oriental, 80 Columbus Circle at 60th Street. Fee: $250 for members, $300 for nonmembers. Information and registration: www. buildingcongress.com.

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Real Estate Connect presents the 18thannual “Real Estate Connect NYC 2014.” Featured speakers include Arianna Huffington, president and editor-in-chief of the Huffington Post Media Group; Brad Inman, founder and publisher of Inman News; Adi Tatarko, CEO & co-founder of Houzz; Robert Reffkin, founder & CEO of Urban Compass; Tami Pardee, owner and principal broker of Pardee Properties; Mark Willis, CEO of Keller Williams Realty; Amy Wu, an investor at IA Ventures; Shaun Osher, founder and CEO of CORE; and Susana Murphy, founder & CEO of ALANTE Real Estate. Seminar topics include leadership skills; the art of Internet conversation; what matters most for business success; what drones might mean for real estate; real estate start-up companies; what technology top-producing agents are using; and the globalization of real estate. 9 a.m. to 6 p.m. each day. The Grand Hyatt New York, 109 East 42nd Street. Fee: $1,199 at the door. Information and registration: www. inman.com.

The Council of New York Cooperatives & Condominiums hosts “How to Provide Seamless Access for All Residents.” Architect Eric Cohen will be the featured speaker. The seminar will provide methods for integrating accessibility requirements elegantly and seamlessly into a site. 7 p.m. Location TBA with purchase of ticket. Fee: free for members, $50 for nonmembers if paid in advance. Information and registration: www.cnyc.com.

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The Association of Real Estate Women presents its annual Winter Networking Cocktail Reception. The open bar reception will feature cheese and vegetable stations, passed appetizers, and networking opportunities with AREW colleagues. 6 p.m. to 8 p.m. Stone Rose Lounge at the Time Warner Center, 10 Columbus Circle. Fee: $110 for members; $120 for members of other CREW chapters and NYBC Council of Industry Women’s Organizations; $130 for nonmembers. Information and registration: www.arew.org.

The Institute of Real Estate Management presents its Annual Awards Dinner. Jodi Pulice, founder and president of JFT Realty Group, will receive the Real Estate Person of the Year award; Gail Duke, senior vice president of New York Life Investment Management, will be awarded Certified Property Manager of the Year; Timothy Stapleton, senior property manager at NAI Long Island, will be named Accredited Residential Manager of the Year; and Richard Silver, president of American Pipe & Tank, will receive the Industry Partner of the Year award. Black tie optional. 6:30 p.m. cocktails, 7:30 p.m. dinner. The Water’s Edge, the East River at 44th Drive, Long Island City. Fee: $200. Information and registration: www.iremnyc.org.

The Real Estate Board of New York presents its Annual Benefit Fair. Vendors that take part in REBNY’s Benefit Reward Program will offer guidance to REBNY members on the services and products they offer. 10 a.m. to 1 p.m. REBNY Mendik Education Center, 570 Lexington Avenue (lower level). Fee: Free for members. Information and registration: www.rebny.com.

Professional Women in Construction hosts a “Developers Forum.” Lois Weiss, real estate columnist for the New York Post, will moderate. Featured speakers include David Belt, executive director and founder of Macro Sea; Colleen Wenke, vice president of Taconic Investment Partners; Laurie Golub, COO and general counsel for HFZ Capital Group; and Melissa Burch, senior vice president of Forest City Ratner. 8 a.m. to 10 a.m. General Society, 20 West 44th Street. Fee: $80 for members, $95 for nonmembers. Information and registration: www.pwcusa.org/NY.

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The American Institute of Architects presents the “AIANY Lower Manhattan and Brooklyn Loop Boat Tour.” Features include an exploration of planning for reclaiming the post-industrial waterfront, including greater access allowed by new parks and recreation piers; short term and long term post-Sandy planning operations; and an exploration of post-WWII renewal and public housing along the Lower East Side waterfront. 11 a.m. to 12:30 p.m. Classic Harbor Line, Chelsea Piers Roadway #103. Fee: $41 for members, $46 for nonmembers. Information and registration: www. aiany.org.

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Flatiron Hotel owners move to block $31M DelShah deal By David Jones The owners of the Flatiron Hotel asked a judge to dismiss a lawsuit filed by a DelShah Capital affiliate that aimed to enforce a purported $31 million purchase of the property, contending the deal was a “sham.” The suit is the latest in a tangle of legal spats. At issue are two apparent sales of the property at 1141 Broadway, between 26th and 27th streets: DelShah’s alleged purchase in May and a sale to Robert “Toshi” Chan that was scheduled to close Dec 4. Chan was running the property through his company, Smart Apartments.DelShah, led by Michael Shah, which acquired the debt on the property in May after the owners defaulted on an $8 million loan, filed suit on Nov. 25 to block the Chan deal. However, one of the hotel’s current owners, Jagdish Vaswani of Main Team Hotel, claimed that DelShah did not deal with an authorized representaMichael Shah tive of the hotel.

HFZ flips $130M retail in Westbrook portfolio purchase By Adam Pincus Midtown-based investment fund Madison Capital paid $130 million last month for two retail assets — one on the Upper West Side and another in Hell’s Kitchen — owned by Westbrook Partners, as part of a transaction that included HFZ Capital Group, sources told The Real Deal. Ziel Feldman’s HFZ inked a contract last summer Ziel Feldman to buy the Astor and Metro and two other apartment buildings from Westbrook for about $610 million. Before the deal closed, HFZ arranged to have Westbrook transfer the retail portion of the Astor and Metro to Madison. The acquisitions closed Dec. 19. The more valuable retail, insiders said, is the approximately 19,000 square feet at the base of the Astor. The 212-unit apartment building at 235 West 75th Street has frontage along Broadway, as well as on 75th and 76th streets. Tenants include apparel retailers Barneys New York and Lululemon and makeup store L’Occitane en Provence.

114 January 2014 www.TheRealDeal.com

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