The Real Deal July 2012 by The Real Deal

TRD nabs ﬁve national awards

Thinking like a real estate CEO

Vantage digs out of distress

‘Pinball’ units trick buyers

105

Art bubble fueling real estate sales?

THEREALDEAL

www.TheRealDeal.com

Mortgage giant grows in NYC

Wells Fargo ups market share as rivals pull back

BY LEIGH KAMPING-CARDER As many banks have shied away from residential mortgage lending, Wells Fargo, the nation’s largest lender, has SPECIAL REPORT taken the opposite tack. That’s especially true in NYC where Wells is dominating, partly by lending in buildings that rivals are avoiding. But is too much market share a bad thing? See story on page 56

Cashing in on Canal Street

Big names snap up retail, hoping for a Soho spillover

BY ADAM PINCUS Retail players are beginning to bet that gritty Canal Street is on the cusp of transformation, fueled by a spillover from thriving Soho. Vornado recently purchased a property there and others are snifﬁng around. But the street has some unique real estate challenges. See story on page 44

Faux pas with foreign buyers A guide to cultural pitfalls BY KATHERINE CLARKE Call it Foreign Buyers 101. Experts weigh in on what agents need to know when dealing with global buyers — from Chinese tax law to the Russian commodities market. See story on page 62

N EW YO RK R E AL E S TAT E N E W S

NYC’s new condo wave

See page 106.

Extell’s Gary Barnett

AT A GLANCE Russian roulette for apartment sales

BY KATHERINE CLARKE

New development condos have been in the spotlight lately. That’s thanks in part to Extell Development’s One57, the city’s new tallest residential tower, which has already hit $1 billion in sales and topped off last month. Extell President Gary Barnett said the lack of new construction in the last few years has FEATURE STORY boosted demand for his project. “For the next couple of years, we’re probably the only game in town — especially for that kind of quality,” Barnett claimed. But there are lots of other projects on the drawing board now. We mapped out Manhattan and Brooklyn condo buildings on the market, and looked at the new projects in the pipeline. See story on page 49

More listings with $20 millionand-higher price tags are coming on the market. But some say high-end sellers are testing their luck and being unrealistic, chasing a few record sales earlier this year. See page 16.

Finding fortunes in foreclosures A TRD analysis found a cottage industry of firms buying distressed outer borough homes and flipping them, sometimes doubling their money in the process. See page 28.

Crunching numbers on Barclays Center As Brooklyn’s $1 billion, underconstruction Barclays Center prepares to open in September, a breakdown of the economics of the project on everything from naming rights to retail space. See page 20.

A new start for Naftali

Burger takes ﬁrst place in TRD’s annual ranking of top 75 Manhattan listing agents, sets new record

Ex-Elad CEO Miki Naftali is racking up new projects

BY LEIGH KAMPING-CARDER Brown Harris Stevens broker John Burger earned the No. 1 spot on TRD’s annual ranking of Manhattan’s top listing agents for the ﬁrst time. He more than doubled his volume of listings Top Manhattan brokers from a year ago to an impressive (by listing volume) $411.7 million — setting a new bar John Burger (BHS): $411.7M for the ranking. In addition, several Carrie Chiang (Corcoran): $316.2M brokers are appearing in the top 10 Paula Del Nunzio (BHS): $293.8M for the ﬁrst time, partly due to some Dolly Lenz (Elliman): $255.1M extremely high-priced trophy prop(Sotheby’s): $198.9M Serena Boardman erties on the market.

BY CANDACE TAYLOR Miki Naftali is in good spirits. A year after launching his own ﬁrm, the former Elad Properties CEO — and face of the controversial Plaza Hotel renovation — has already purchased eight NYC properties, including four development sites. And he says he’s relieved to be done running a mega ﬁrm.

See story on page 34

FACT Multifamily buildings in the Bronx sold for an average of $90 a square foot in the ﬁrst part of the year, one-ﬁfth the price seen in Manhattan. See page 65.

A close-up on the new construction projects on the market and in the pipeline

All-star agents

Seth Pinsky on life after Bloomberg

Vol. 10 No. 7 July 2012 $3.00

See story on page 40

Barclays Center

Biggest U.S. ﬁrms A new report ranks the largest residential real estate brokerages in the nation. TRD looks at how some New York-area firms fared. See page 52.

www.TheRealDeal.com

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Highlights SPACE LIFT

J U LY

2 0 1 2

Russian roulette

Getting Frank

Barclays Center number crunch

High-end NYC sellers take a gamble with $20 million-plus listings.

Industry pros weigh in on how DoddFrank is changing the real estate rules. A stats breakdown on the $1 billion Nets arena that’s getting ready for its September opening in Brooklyn.

Rapper and Nets minority owner Jay-Z

At the desk of Gene Kaufman The proliﬁc architect has a birdhouse that may be NYC’s most expensive piece of real estate and mementos from his days running a B&B.

Gene Kaufman in his Soho ofﬁce

words... 26 InThistheir month’s funniest and most insightful comments. Since its construction in 1982, the Jacob K. Javits Center has been one of the world’s leading examples of spaceframe design. But the I.M. Pei & Partners-designed exhibit space needed updating to put its best face forward for the 3.5 million visitors it receives each year. So owners engaged Epstein Global and FXFowle Architects, who developed the recladding program that is dramatically increasing the building’s transparency and energy efficiency. Targeting

Foreclosure fortunes Investors reap big paydays by ﬂipping distressed homes in outer boroughs.

a real estate brain 30 Inside A look at what residential brokerage

CEOs really think about, from broker inﬁghting to which new technologies to invest in.

LEED Silver with a glazing system that will enable the building to exceed energy code requirements by 25 percent, the new face of Javits proves that being old doesn’t have to mean retiring.

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

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

new “Vantage” point 31 AVantage Properties unloads multiple

Vantage CEO Neil Rubler

Pinball wizard

All-star agents

Why are brokers intentionally overpricing homes to lure new buyers?

This year’s top 75 Manhattan listing agents get a boost from a ﬂood of ultra-pricey properties on the market.

Architect: Epstein Global, FXFowle Architects Photographer: Enclos

8 July 2012 www.TheRealDeal.com

distressed NYC properties with an eye toward picking up new sites elsewhere.

Miki Naftali

Carrie Chiang once again snags a top spot on TRD’s ranking.

Small ﬁrm, big mission

Introducing: The Naftali Group

A look at the tiny, independent residential ﬁrms that ﬂy under the radar but play in the big leagues.

Former Plaza developer Miki Naftali in his ﬁrst extensive interview since striking out on his own a year ago.

Highlights continued

LAWN AND ORDER

42 44

Cashing in on Canal

Justin Elghanayan quietly becomes president of post-split Rockrose.

Big names snap up retail on the gritty stretch hoping for a spillover from thriving Soho.

Structural steel Right for any application

new condo wave 49 NYC’s A close-up on the new

construction projects on the market and in the pipeline.

Extell’s Gary Barnett is breaking records with condo sales at One57.

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

Rockrose’s H. Henry Elghanayan (left) and his son Justin

Justin time

Wells Fargo-go-go

From Canada, with love

The big fish A look at the largest national residential brokerages — and how the biggest NYC-area firms fit in.

As others pull back, bank ups NYC mortgage market share.

Newbie NYC commercial ﬁrm Avison Young is racking up brokers, and now it’s looking to close deals.

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

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

From left: Avison Young’s Arthur Mirante, Mark Rose and Greg Kraut

Foreign Buyers 101 A broker’s guide to avoiding cultural pitfalls.

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

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

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

Calendar of Events Check out this month’s activities.

100

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

Developments Updates

105 How NYC property sellers are

Art bubble meets real estate

looking to capitalize on the hot art market to make deals.

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

10 July 2012 www.TheRealDeal.com

Pinsky, on life at EDC The city’s top development guru talks about pending fatherhood and his post-Bloomberg plans.

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

104

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

105

We Heard A lighter look at industry buzz.

THE REAL DEAL N E W YO R K R E A L E S TAT E N E W S PUBLISHER Amir Korangy EDITOR-IN-CHIEF Stuart W. Elliott MANAGING EDITOR Jill Noonan DEPUTY MANAGING EDITOR Candace Taylor EXECUTIVE DIGITAL EDITOR Gabrielle Birkner ART DIRECTORS Ronald Gross, Derek Zahedi SENIOR REPORTER Adam Pincus REPORTERS Leigh Kamping-Carder, Katherine Clarke WRITERS C.J. Hughes, David Jones, Adam Piore PRODUCTION MANAGER & RESEARCHER Linden Lim WEB PRODUCER Adam Fusfeld EDITORIAL ASSISTANTS Guelda Voien, Zachary Kussin ILLUSTRATORS David Cole, Yishai Minkin PHOTOGRAPHERS Max Dworkin, Marc Scrivo DIRECTOR OF MARKETING OPERATIONS Yoav Barilan ASSOCIATE SALES DIRECTOR Ross Fox ADVERTISING SALES Eran Evron, Abi Laoshe, Joseph Paci, Robert Stearns, Michael Stern WEBMASTER Nima Negahban ACCOUNT COORDINATOR Kenneth Cyrus ADMINISTRATOR Junaid Zahid CIRCULATION Paul Destanko DISTRIBUTION Mitchell Newman, Michael Presto VIDEOGRAPHER Toni Comas ATTORNEY Barry J. Friedberg Trachtenberg Rodes & Friedberg ACCOUNTANTS William T. McCallum, CPA, P.C., Christine Wang The Real Deal is a registered trademark of Korangy Publishing Inc. Copyright © 2012. Call 212-2601332 or e-mail news@therealdeal.com. Warning: It is illegal to photocopy or reproduce any part of The Real Deal without express written consent. For reprints and duplication rights, call 212-260-1332. Principal ofﬁce: 158 West 29th St., New York, NY 10001. The Real Deal is published monthly. Annual subscriptions cost $95. Send check or money order to 158 West 29th St., New York, NY 10001.

12 July 2012 www.TheRealDeal.com

EDITOR’S NOTE

Show me the money

TRD nabs ﬁve national awards by following the cash

ollow the money. The maxim, uttered by the source Deep Throat, is said to have originated in the screenplay for the film “All the President’s Men” about Carl Bernstein and Bob Woodward’s reporting on Watergate for the Washington Post. Last month marked the 40th anniversary of the break-in that reshaped American politics and journalism. While it might sound highfalutin, it’s also the guiding principle that helped us win more awards than any other publication in a national contest last month, recognizing the best in real estate journalism. The National Association of Real Estate Editors (NAREE) named The Real Deal tops in five categories. (NAREE is the only association of writers, editors, columnists and freelancers that covers residential and commercial real estate; highly esteemed publications such as the Washington Post and Wall Street Journal also entered the competition.) We won the prize for the Best Real Estate-Focused Website in the country, and, for the second year in a row, won top honors for the Best Commercial Real Estate Trade Magazine in the nation. We also won prizes for three stories we ran last year. Senior reporter Adam Pincus won first place for the Best Commercial Real Estate Story by a Trade Magazine for his “Penciling out 737 Park,” about Harry Macklowe’s Upper East Side building purchase at that address. The story took an in-depth look at the costs (including the costs to displace current residents) behind the largest condo conversion in the city since the bust. For her story, “Tumult at Nouvel Tower,” on allegations of corner-cutting at a glamorous (and high priced) residential tower designed by starchitect Jean Nouvel, deputy managing editor Candace Taylor won Best Residential Story by a Trade Magazine. In the same category, Pincus took second place for his story “Reassessing REBNY,”

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which provided a first-ever look into the finances behind the powerful trade organization the Real Estate Board of New York. (The Real Deal has won awards in the only two competitions it’s ever entered, so I guess we need to enter more.) When it comes to Manhattan real estate, “follow the money” could not be more relevant. And it doesn’t only apply to investigative journalism. You need to follow the money to understand how the city works generally. If you don’t understand how money works in New York City, you don’t understand New York City. And, more importantly, if you don’t understand the visceral impulse that most in New York’s business world have to make money (for survival, greed, prestige or any other reason), you also don’t get one of the main engines that makes New York run. While reporters aren’t primarily motivated by money themselves — usually — they are taught here (like at other reputable publications) to understand that impulse and to follow the money to find the story. By following that trail, we try to provide transparency to an industry that has little, and provide a level playing field in terms of information. The strangest thing to me, especially as we near the presidential election, is the role politics plays in our lives compared to the role that money-making and capitalism plays. If democracy and capitalism are supposed to be the twin pillars of the society we live in, most of us (except those who do work for the government) have little-to-no involvement with democracy in any meaningful way aside from maybe voting every few years. Think of the amount of time most people spend reading about politics or talking about it versus acting on it. Much of our news is political sound bites and posturing, and much of what unfolds we have little participation in. Not that more of us shouldn’t be politically involved. But capitalism is actually what dominates most people’s workaday lives, which also makes following the money that much more important, from Watergate-level reporting down to the local economy to the apartment selling next door. In this issue, we continue to follow the money. We track the rise in new developments occurring in the city, profile the nation’s largest mortgage lender and rank the top agents in Manhattan residential real estate by dollar volume of the properties they are listing, among other stories. Enjoy the issue!

Stuart Elliott 14 July 2012 www.TheRealDeal.com

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BY LEIGH KAMPING-CARDER etween the lion’s head doorknocker, ornate stone ﬁreplaces and pastel-colored parlor, the mansion at 973 Fifth Avenue looks like something out of an Edith Wharton novel. But its $42 million contract price, reported late last month after the home spent a year on the market with Brown Harris Stevens’s Paula Del Nunzio, is decid-

Russian roulette

High-end sellers take a gamble with $20 million-plus listings

edly contemporary. The deal is the latest in a string of eye-popping sales in the last quarter that, some brokers say, has prompted sellers at the high end to test their luck with listings priced above $20 million — whether the properties are worth it or not. “There is a marked increase in the number of $20 million-plus listings, but it seems that many lack the appropriate ‘trophy property’ status necessary to justify the

hefty price tag,” said Mickey Conlon, a senior vice president at the brokerage Core. “It appears as if many owners who don’t necessarily need to sell are recklessly trying their luck at unrealistic prices. Would it be unfair to call it Russian roulette?” This phenomenon is surfacing even as year-over-year Manhattan home sales have remained ﬂat, and entry-level apartments have gained a greater share of the

“Many owners who don’t necessarily need to sell are recklessly trying their luck at unrealistic prices.” MICKEY CONLON, CORE market, according to the latest ﬁgures from Prudential Douglas Elliman.

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In the second quarter of 2012, there were 2,647 sales of Manhattan condos and co-ops — a 14.5 percent increase over the previous quarter, but unchanged from the same period last year. The median price dropped 2.5 percent, to $829,000, from the second quarter of 2011. Appraiser Jonathan Miller of Miller Samuel, who prepared the Elliman report, attributed the drop in prices to the high volume of entry-level units and co-ops — which tend to fetch lower prices than condos — that sold in the last three months. “More first-time buyers moved into the housing market seeking relief from rising rents and taking advantage of falling mortgage rates,” Miller said. That characterization is unlikely to surprise many brokers, given the oft-cited influx of buyers last season who were willing to jump on available properties. “People understand that the market is heating up, the inventory is drying [up] and the deals are harder to come by,” said Yukyong “Kianna” Choi, a vice president with Bond New York. At the high end, the flurry of headlines devoted to mega-deals, combined with the perception of money pouring into the Manhattan housing market from overseas, has given some sellers an even greater sense of confidence. “Sellers and their agents are recognizing this demand [for high-end residences] and are aggressively targeting numbers previously unseen in the market,” said Corcoran Sunshine Marketing Group’s Loretta ShanahanBradbury, the director of sales at Manhattan House. She noted that there are currently seven listings on the market in Manhattan for more than $50 million, up from three at this time last year. Among the pricey listings to hit the market in June were art collector John de Neufville’s West VilContinued on page 94

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16 July 2012 www.TheRealDeal.com

3/29/12 2:09 PM

Getting Frank BY GUELDA VOIEN hough signed into law nearly two years ago, the Dodd-Frank Act — the federal statute drafted in the wake of the ﬁnancial crisis to increase regulations over ﬁnancial institutions — is still being debated by the many government agencies responsible for its implementation. Indeed, a slew of new DoddFrank rules have not gone into effect yet, and some are still being

codiﬁed. But the 2,300-page document, a political hot potato, has already begun to impact the actions and mind-sets of many New York City real estate players. In general, many in the industry are worried that the more restrictive lending rules it calls for, which will force banks to put more skin in the game, will increase borrowing costs. Still, there is a recognition, even among those who have concerns, that some of these measures could

Real estate pros weigh in on the impact of the Dodd-Frank — now and in the months to come

help prevent the next economic bubble. “It’s a good idea to make someone other than a credit ratings agency underwrite the risk of the loan,” said Robert Ivanhoe, a partner at law ﬁrm Greenberg Traurig, referring to banks. But restricted lending, real estate players including Ivanhoe argue, could be particularly problematic when it comes to the many commercial owners whose ﬁveand seven-year mortgages were originated near the market’s crest

and are now coming due. That’s because those borrowers are not likely to lock in the same favorable loan terms — and may even need to put more equity into their deals — when they attempt to reﬁnance. “The real question is, is the cost of improving disclosure and capital standards worth the reduction in lending when we have $1.2 trillion to reﬁnance before 2017?” said Mike Flood, vice president of policy and research at the Commercial Real Estate Finance Council, an industry

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group based in Washington, D.C. Proponents of the law say that these are the kinds of regulations needed to ensure that big banks don’t run afoul of the system again. And many say the rules don’t go far enough. Below is a breakdown of some of the Dodd-Frank measures that real estate players are paying attention to.

Changes to Investment Advisers Act One piece of Dodd-Frank legislation that has already been enacted is a revision to the Investment Advisers Act of 1940. The amendment has been interpreted by some to mean that private funds with real estate assets must register as “investment managers” and be regulated accordingly. Once funds are labeled with this new classification, they have to follow Securities and Exchange Commission laws. They would have to create a “code of ethics,” hire a compliance officer and “review their trades” said Stephen Cohen, a partner with law firm Loeb & Loeb. Making these changes will be “a major cost burden,” said Ivanhoe, who noted that the change could raise the cost of operations for a given fund by about 1 percent a year. Another effect for companies required to register under the law will be a dramatic change in how those at the helm can be compensated. Real estate funds frequently give “carried interest” — often called a “promote”— to a general partner in a development or a building purchase. The promote is a financial interest in the long-term capital gain of a development. Much like hedge-fund managers, developers are compensated this way because then they cannot realize the gain until after the project is complete. If a project doesn’t do well, the developer may never realize that profit, but if it does, the money is taxed as a capital gain, not income. “The carried interest is the bedrock of most real estate deals that I have seen,” explained Peter Hauspurg, CEO of Eastern Consolidated. But if real estate funds comply with this revision, this sort of performance-based compensation will be limited for “managers” of funds whose clients have invested less than $1 million or have a net worth less than $2 million. Continued on page 84

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The Bulletin Board

Barclays state of mind Compiled by Russell Steinberg

Stadium seating

Complex controversy

Brooklyn’s $1 billion, 675,000-square-foot Barclays Center — which is jointly owned by Forest City Ratner and Russian billionaire Mikhail Prokhorov — is set to open in September. The arena will seat up to 18,103 fans for Brooklyn Nets basketball games. When it is reconFIgured for hockey, it will seat 14,500, and for concerts, Barclays Center 19,000.

The arena is, of course, the centerpiece of the controversial $4.9 billion Atlantic Yards complex, which will also include two ofFIce buildings and 6,430 apartments. Critics say the project will create chaotic trafFIc and drastically alter the low-rise neighborhood. Forest City hopes to break ground on the FIRst tower sometime this summer.

Legal battles

For years, the Atlantic Yards project was stalled by legal battles. In 2008, community groups unsuccessfully tried to block construction. In 2009, a judge dismissed an eminent domain suit that would have prevented Forest City from seizing private property near the complex. And last year, workers FIled a suit against the developer to recover unpaid wages for construction work. That case is ongoing. Forest City Ratner head Bruce Ratner

True Beliebers

The arena’s FIRst scheduled sporting event will be an Islanders vs. Devils hockey game on Oct. 2. Teen sensation Justin Bieber will perform on Nov. 12, with ticket prices already fetching up to $10,000 on the secondary market, while Barbra Streisand’s October concert has tickets listed for $34,000 on StubHub. In total, there are 13 performers scheduled in the next year.

A ‘suite’ deal

The name game

In 2007, the British bank Barclays agreed to pay the Nets nearly $200 million over the next 20 years for naming rights to the arena. The recordbreaking deal surpassed the $185 million that Royal Philips Electronics paid for naming rights to what is now known as the Philips Arena in Atlanta, according to the New York Times.

Inaugurating an arena

Rapper and Brooklyn Nets minority owner Jay-Z will perform AT the arena’s inaugural concert on Sept. 28. Jay-Z will also open a 9,000-squarefoot, 350-seat restaurant and sports bar called 40/40 in the arena, according to the New York Post. The club will only be open during arena events and will only be accessible Jay-Z to ticket holders.

The arena will include about 100 luxury suites. Eleven of those, known as “the Vault,” cost $550,000 to lease for a year, and come with eight tickets to all Barclays Center Events, access to an exclusive champagne bar, personalized concierge service and VIP parking.

Getting there

In late May, the number of parking spots at the arena was chopped from 1,000 to just 541, according to WNYC, in order to reduce trafFIc and encourage visitors to use public transportation. Located at Atlantic Terminal, the arena has access to nine subway lines and the Long Island Rail Road. Eleven bus lines will also stop near the center.

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22 July 2012 www.TheRealDeal.com

PHOTOGRAPH FOR THE REAL DEAL BY CHRIS MARTIN

This Mexican artifact, which is over 2,000 years old, was used by indigenous peoples to grind food. “I like this piece because the form is very functional, but it’s also archetypal and almost anthropomorphic,” Kaufman says.

Kaufman bought this novelty book, “Why Do Architects Wear Black?” at a museum in Berlin.

This birdhouse was designed by Robert Siegel and Charles Gwathmey, the heads of Gwathmey Siegel & Associates Architects. The birdhouse is a prototype, but a replica sold at auction for $4,000. “I call it the most expensive real estate in New York City, because it [went] for $16,000 per square foot” Kaufman jokes.

This figurine of an architect leaning over a drafting table was a gift from Kaufman’s parents. Kaufman, who received a degree in architecture from Cornell in 1981, recalls the back pain architects commonly suffered before the profession switched to computers.

the

Desk

of:Gene

kAufmAn

This ceramic octopus is a memento from the Green Octopus bed and breakfast, which Kaufman and his wife operated out of their West Village townhouse until 2000. The couple borrowed $400,000 from a client to buy the house in the early 1990s, then opened a B&B there to help pay him back.

For Kaufman, this tribal figurine from early 20th-century Papua New Guinea serves as inspiration. “I think that any good designer finds inspiration wherever they look, but obviously, something more interesting is more conducive to that,” he says.

This aluminum hard hat, which Kaufman bought at a flea market, is from the 1940s. He notes that Andy Warhol was also known to scavenge for urban treasures at the same flea market on Sixth Avenue in Chelsea.

This teapot comes from China, where Kaufman’s firm recently formed a joint venture with Li Yuan, an architecture firm based in the burgeoning city of Wuhan. Kaufman is currently taking Mandarin lessons.

This Chetrit Group project, rising at 500 Metropolitan Avenue in Williamsburg, is one of many Kaufman has done in the trendy neighborhood, an area whose earlier blight he remembers vividly. “I walked around Williamsburg when I was first interested in doing something there, in, say, 1982, and I watched a guy steal a fire hydrant,” he says.

from Cornell University, then launched Gene Kaufman Architects when he was 28. A year ago, he bought Gwathmey Siegel & Associates Architects, though he still operates his eponymous firm, and now boasts a combined 60 architects working from his airy, loftlike Soho office. His designs have at times been panned by critics, to which Kaufman said: “The best artists and the leading innovators frequently engender the most opposition. … If you don’t get any criticism, you aren’t trying hard enough.” By Guelda Voien

During a rough patch for his fledgling firm, Kaufman “moved my office, with my three employees at the time, into my house,” he says. “That’s when the firm was at its bottom.” His uncle custom-built this desk, with its sharply slanted edges, to fit into the house. He’s kept it as a reminder of how his firm struggled in the past.

ene Kaufman, one of New York City’s most prolific architects, has designed numerous hotels and residential projects, including the Hotel Williamsburg and the revamp of Manhattan’s famed Chelsea Hotel. He is currently at work on new hotels at 120 West 57th Street and 1414 Avenue of the Americas, and recently took over for Costas Kondylis as the architect on two 50-story residential and hotel towers planned for Jersey City. Born and bred in New York, Kaufman worked for Raphael Vinoly Architects after graduating

MD_RD_july_2012_v1_Layout 1 6/19/12 10:40 AM Page 1

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Summer doldrums

Preliminary stats show that June may be 2012’s slowest office leasing month for Manhattan BY ADAM PINCUS anhattan office leasing volume has whipsawed back and forth during the first six months of the year. Continuing that trend, last month saw a sharp pullback of activity. Preliminary leasing totals for June show only about 1.4 million square feet of office space was leased in Manhattan’s three major markets. That’s far below the 4.9 million registered in April and the 3.5 million in May, data from commercial firm Cassidy Turley showed. Depending on the final tally for June, it may be the slowest leasing month in 2012 — behind January, which saw 1.6 million square feet leased. “The market’s been a little choppy,” said Kenneth Salzman, a senior managing director with commercial brokerage Lee & Associates. “There is still a fair amount of uncertainty in the market. There are a lot of short-term [approximately three-year] renewals being done in lieu of expansion.” In fact, the largest relocation lease signed last month was for only for 68,000 square feet, Cassidy Turley figures showed. That was the City University of New York’s School of Professional Studies taking several floors at 116 West 32nd Street between Sixth and Seventh avenues. In a sign that the figures may represent a bona fide (albeit slight) slowdown, the overall Manhattan availability rate — which measures the amount of space available now or in the next 12 months — rose by 0.2 points to 10.5 percent in June compared with May, according to Cassidy Turley. Yet despite that softness, asking rents rose by $0.49 per foot to $54.70 per foot.

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Even as the overall Manhattan office leasing market was tepid, landlords and tenants in Midtown seemed to be holding steady. In fact, the total number of available blocks of 100,000 square feet or more — a metric often used to gauge the health of the market for large tenants — has remained about flat in Midtown over the past two years. In May 2010 there were 43 blocks on the market. That number dropped to 39 just 12 months later. And this past May, there were 40, Cassidy Turley figures revealed. According to Cassidy Turley, the largest available space in Midtown is 712,000 square feet at the Durst Organization’s 4 Times Square, which is being vacated by publishing powerhouse Condé Nast in 2014. The firm is, of course, moving to 1 World Trade Center.

Manhattan ofﬁce stats AVAILABILITY RATE

AVG. ASKING RENT

June ’12 May ’12

Manhattan 10.5% 10.3%

$54.70 $54.21

June ’12 May ’12

Midtown 11.2% 10.9%

$62.70 $62.29

June ’12 May ’12

Midtown South 8.6% $45.91 8.5% $45.71 Downtown 10.6% 10.8%

$38.28 $38.07

Source: Cassidy Turley

Elliot Bogod, president of commercial and residential ﬁrm A&I Broadway Realty, said the slowdown might just be summer doldrums. “We saw a lot of deals in May, but in June there has been a little bit of a slowdown,” he said, referring to Manhattan overall. The availability rate in Midtown rose by 0.3 points to 11.2 percent in June, yet the asking rent rose by $0.41 per foot to $62.70 per square foot during the same time, Cassidy Turley data showed.

Midtown South Although Midtown South’s availability rate rose by 0.1 points to 8.6 percent, it remained the tightest in Manhattan. In an example of the types of deals getting done last month, an expanding marketing agency called Pulse Creative signed a five-year lease for 5,000 square feet on the third floor of 267 Fifth Avenue, an 11-story building at the corner of 29th Street. Gregory Cohen, president of the Cohen Group at the commercial and residential firm Rutenberg, represented the landlord and tenant in the deal. He said approximately 10 to 15 companies came to look at the space over a month and a half, including hedge funds, advertising firms and apparel companies. But not all of them made strong enough offers. “We received about five offers, a lot were lowball,” he said. “We asked for $47 per foot, then went to $40. We ask high then get people in and then we start negotiating.” That rent range is in the ballpark for the Midtown South area, where average asking rents rose by $0.20 to $45.91 per square foot last month from May. Continued on page 85

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In their words...

The month’s funniest and most insightful comments from real estate pros

“There are parts of Brooklyn where if you stop walking for a second, someone is going to chain their bike to you.” DOT commissioner Janette Sadik-Khan, on requests for more stations in the city’s new bike-share program. (Wall Street Journal)

“Like reality television, construction projects often entail nail-biting suspense and gruesome hissy fits.” Simon Doonan, author and creative ambassador for Barneys New York, on renovating his Shelter Island home. (Architectural Digest)

“ ‘East Williamsburg’ isn’t a thing. Neither is ‘MiMa.’ And if a realtor says ‘Park Slope South’ to you, punch them and run.” Twitter feed for NYC.com.

“A, they’re not authentic, B, they don’t give much light, and C, they waste energy. They just look silly.” John Casson, a member of Park Slope Civic Council’s Landmarks Committee, on antique gas lamps in the neighborhood that were installed in the 1960s. (DNAinfo)

“I would always see highend female brokers coming to my showings with a very expensive purse dangling off their wrist. I call it their ‘b---h bag.’ ”

Brian Lewis, an executive vice president at Halstead Property, on stressful real estate transactions. (New York Times)

“She also told us to marry orphans. Or at least marry people from out of town.” Samantha Kleier Forbes, recalling mom Michele Kleier’s attempts to maximize time with her children. (New York Family)

Citi Habitats vice president Jason Saft. (Daily News)

“ always wear my yel“I yel low socks. I’ve become famous for my yellow socks, so I can’t not wear my yellow socks. Sometimes on the weekend, though, I go crazy and wear blue ones.” Architect Robert A.M. Stern. (New York Times)

26 July 2012 www.TheRealDeal.com

“I understand that buying or selling a home is an emotional thing. When you add that emotion to the kind of money we’re dealing with, you get a perfect storm of crazy.”

“I said, ‘Can’t you figure out a way not to raise the taxes on these people or tell them it was a mistake or send them a letter or something?’ ” Governor Andrew Cuomo, on asking Mayor Michael Bloomberg to renew a property tax abatement for condo and co-op owners in New York City. (New York Times) www.TheRealDeal.com August 2006 00

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Foreclosure fortunes Investors reap big paydays by flipping distressed homes in outer boroughs BY ADAM PINCUS hile much attention has been paid to the buying and selling of trophy Manhattan properties as the market recovers, some outer-borough real estate players are reaping enormous returns on a different kind of investment: They’re buying formerly distressed homes and quickly flipping them. According to an analysis of city property records by The Real Deal, these New York City– and Long Island–based firms are, in many instances, doubling their money in just a few short months by scooping up underwater one- and two-family homes. The foreclosed or otherwise distressed

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ence between the purchase price and the sale price — of more than $8 million. (The firm may have had even more transactions that were listed under a different company name in public records.) Badkobeh could not confirm TRD’s figures, but said his company was not as profitable as the numbers suggest, in part because the analysis does not count money spent to rehabilitate and sell the homes. “We can state that the gross profit you set forth is certainly far in excess of our net profit, which, of course, is far more relevant. Moreover, we have done numerous projects over the years which have lost money,” Badkobeh said.

NO. HOMES BOUGHT/SOLD

TOTAL GROSS PROFIT

Residential Development Group

$8.6 million

Barca Development

$5.3 million

Yavne Management

$5.1 million

Ambassador Investors Group

$3.4 million

Daniel Group

$3.3 million

BCNY Properties

$1.5 million

295 Northern Boulevard LLC

$1.2 million

Source: The Real Deal analysis of city property records for sales between June 2010 and June 2012. Total gross proﬁts were calculated by subtracting the purchase price from the sale price and do not factor in how much capital the company invested into the property.

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properties are producing average gross margins of about 75 percent, or about $160,000 per home, according to our analysis, which covered the last 24 months. Some of the investors are stringing together dozens of these property flips and likely making millions. (Though, without knowing exactly how much money these investors are pouring into the homes in capital improvements, and what they’re spending to market the properties, it’s impossible to say how much net profit they’re seeing.) Most of the 20 firms that TRD identified as players in this universe fly under the radar. Indeed, the vast majority of them do not have websites and are not known to many real estate insiders. In addition, many use multiple names for their acquisitions so it is difficult to track the total activity each firm has done. One of the most active companies was also the most transparent. Residential Development Group, an investment company headed by Kamran Badkobeh and based in Ozone Park, has a website, www.buyallcash.com, with properties for sale and under contract. TRD identified 48 properties that the company sold over the past two years, with a gross profit — which we calculated as the differ-

Other firms flipping distressed outerborough properties include the Jamaica, Queens–based Barca Development, headed by Yizhaq Ben-Shabat, which sold at least 31 properties with an average spread between purchase and sale price of $164,000 per home, and the Kew Gardens–based Daniel Group, which sold at least 20 such properties at an average spread of $173,000. The Daniel Group appears to be run by Joseph Cohen and Yehuda Cohen. Another dominant player is Richmond Hills–based Yavne Management, whose president is Menachem Heller. The firm did at least 31 deals with an average spread of $166,000 per home over the past two years. The majority of the properties that the above-mentioned companies snapped up were either REOs (properties owned by a bank), homes owned by another investor who previously bought it from a lender after it went into distress or properties purchased from an underwater homeowner at a steep discount. One of the smaller firms on this scene is Retained Realty, a company affiliated with Howard Milstein’s Midtown-based Emigrant Savings Bank. The named firms all either declined to Continued on page 89

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Inside the real estate brain

TRD looks at what makes the chiefs of residential firms tick By Guelda Voien

eading a residential real estate brokerage can be a lot like parenting: Firm heads spend

hours worrying about getting their agents to behave and, later, hours wondering if agents’ mistakes are their fault. This month, TRD polled

the heads of city residential firms to find out what keeps them up at night and what they focus on to ensure financial success.

Agent ethics

Other firms

The economy

Technology

Top executives at real estate brokerages said they spend a lot of time fretting about their agents’ ethics: Are they properly disclosing fees? Are they being fair to other brokers? Brokers’ bad behavior not only reflects poorly on the firm, but can also lead to lawsuits. One CEO said her biggest concern is: “How do I get my agents to take the high road?”

“I’m always looking at the competition,” said one firm head. Of course, they don’t always like what they see. One CEO said he “sees a lot of companies trying to grow as quickly as possible, but it is more important to me to maintain quality of brokers.” Others said they worry about how their firms are perceived by other agents in the tight-knit brokerage community.

A major concern, CEOs said, is how the economy is impacting Wall Street bonuses. The more money Wall Streeters have available — and how much is paid out in cash versus restricted stock — directly impacts rents and sales prices across the city. Still, most CEOs said they try not to obsess over the ups and downs of the economy and the stock market. After all, there’s nothing they can do about it. One CEO suggested a simple maxim: “Focus on who is buying, not who isn’t.”

Companies need to be on top of new technology, but they don’t want to be a slave to trends. Firm heads struggle with questions like how much to spend on Twitter and Facebook, since they don’t want to waste funds on mastering platforms that will soon be stale. And it’s hard to get agents to use new tools. “We developed an iPhone app for our brokerage, but the agents didn’t understand its use and impact, so it was hard to justify the cost,” said one CEO. “I can never be sure if we are up-to-date on information technology,” said another. “I’m always wondering if we could do more.”

Broker infighting A certain amount of healthy competition between agents can help pad the bottom line by motivating brokers to bring in more business, firm heads said. But too much acrimony damages workplace morale and impacts productivity. It’s hard for CEOs to know which is which.

Work-life balance

Marketing/branding

While most CEOs have enough work to fill their days and nights, almost all of them emphasized setting rules so that work doesn’t overtake their lives. “You have to have strict boundaries,” said one firm head. “I have two kids, and I am always with them from Friday at 6 p.m. on.” One even said he does not prioritize money in the work-life balance equation. “Many CEOs are out shmoozing, but I don’t do that,” he said. “I am at home with my kids. [The other CEOs] will make more money, but I’ll enjoy life more.”

Several CEOs named marketing as their primary concern, and said they spend more time thinking about branding — what the website looks like, for example — than day-to-day financials. “The message needs to resonate with our clients,” said one CEO. “Whether you do it with a TV show or a banner ad, the most essential element is the brand.”

Mortgages During the worst of the downturn, the credit crunch weighed heavily on CEOs’ minds. Now, that has improved somewhat. “I think about lending a whole hell of a lot less than I did last year,” one firm head said. In part, that’s because many real estate firms have now hired teams of specialists to help their clients get mortgages. Company heads said they’ve also developed relationships with certain mortgage firms to get financing done in a pinch.

30 July 2012 www.TheRealDeal.com

Bottom Line At smaller firms in particular, financials are always at the forefront of CEOs’ minds. One said he worries about agents’ productivity. “Agents only have two things of value, their time and their information,” he said, “and they often give a lot of both away for free.” Another said: “I’m thinking of changing my business model, because you have to do whatever it takes to stay ahead of the pack.”

PR O F I L E

A new“Vantage”point Vantage Properties unloads troubled NYC buildings with an eye toward picking up new properties elsewhere

BY DAVID JONES fter years of financial turmoil at Savoy Park, an 1,800-unit Harlem apartment complex, Vantage Properties and Area Property Partners finally unloaded the troubled development for more than $210 million last month. The sale allows the two firms to pay off the outstanding balance on the senior mortgage that’s been looming over them for years. While Vantage and Area are still fighting foreclosure suits on several properties in New York City, the mega-sale came just three weeks after the partnership managed to sell off a portfolio of eight distressed Harlem and Washington Heights buildings for $65 million, far less than the original purchase price of $87.7 million. Analysts say the sale of Savoy Park to the New York Affordable Housing Preservation fund — created by Citigroup and L+M Development — is likely to help Vantage CEO Neil Rubler overcome his firm’s considerable struggles and reposition the company in a market where multifamily properties are showing strong investor interest. “In general, people in this industry have very short memories,” said Ben Thypin, director of market analysis at research firm Real Capital Analytics. Indeed, the firm — which was among a handful of investors to buy rent-stabilized multifamily buildings during the boom with the intention of making big returns by raising rents — has already begun a fresh start with new acquisitions outside of New York. Last year, Vantage partnered with private equity firm Angelo Gordon & Co. to buy a massive portfolio of 2,200 apartment units in central New Jersey. Vantage immediately sold three buildings in the portfolio to a firm called Lighthouse Properties, but held onto about 1,700 units under its new Candlewood Management subsidiary. And the firm has just agreed to buy — and upgrade — three additional rental properties from AIG in Belleville, Garfield and Highland Park, N.J., totaling 109 units, according to sources familiar with the deal. Joseph Brecher, executive vice president at Gebroe Hammer, a Livingston, N.J.–based brokerage, said the rental market in central New Jersey and other suburban markets is more conductive to these types of investments. That, he said, is because there is higher tenant turnover, which allows owners to raise rents faster than they can in New York. “Because of the turnover and vacancy rate in New Jersey, it makes it easier,” Bre-

Vantage CEO Neil Rubler

unload its troubled properties just a year before the loans on those properties were scheduled to come due. But the Long Island City– based ﬁrm still has plenty of distress on its plate.

A struggling portfolio Within the last four months, Dallas-based Lone Star Funds has filed at least four foreclosure suits against Vantage alleging it defaulted on loans at various rental buildings in New York City. In March 2012, Lone Star filed a $57 million foreclosure suit against Area and Vantage on a 10-building portfolio in Harlem, Inwood and other neighborhoods. It also filed a separate $37 million suit in March to foreclose on a fourbuilding Washington Heights portfolio owned by Vantage and New Jersey–based Normandy Real Estate. Then in May, a state Supreme Court judge appointed a receiver at 344 Fort Washington Avenue, a 48-unit walk-up rental in Washington Heights. At that site Vantage and Area defaulted on a $5.4 million loan with Anglo Irish Bank, which later sold all of its distressed U.S. assets to Lone Star. That same month, Lone Star filed a lawsuit alleging that the partners defaulted on the Beaumont at 730 Riverside Drive in Harlem in 2010. The lender said the partners, who acquired the building for $20.5 million in 2007, left a $15.3 million mortgage balFrom left: Vantage and Area Property Partners sold their troubled Savoy Park apartment complex last month for $210 milance on the historic 11-story lion. The Beaumont at 730 Riverside Drive; lenders filed a suit claiming that Vantage and Area defaulted on their loan. rental building, which was cher told The Real Deal. “If you execute your of distress, and renting them out, sources once home to famed author Ralph Ellison and opera legend Marian Anderson. game plan you get a cash return much faster familiar with the developer said. Bradley Marks, an attorney and courtthan in New York City.” Some industry observers said they were Meanwhile, sources familiar with Van- surprised that Vantage is starting to regain appointed receiver at the Beaumont, urged tage say the firm is “very interested” in Flor- its footing after a tumultuous six years in the court to approve a new building manida, a market undergoing a recovery after a New York. But the firm seems to be doing ager to oversee the daily operations, citing steep recession-related collapse. so by targeting recovering markets outside concerns about years of “neglect,” according Vantage is also exploring a somewhat of the city. to court records. Marks declined to comambitious move of working with several In addition, analysts say Vantage is ben- ment beyond the court filings. private equity firms to buy single-family efitting from the fact that the multifamily Rubler and other Vantage executives homes that are in foreclosure or some state market is recovering in New York, helping it Continued on page 90

Analysts say the sale of Savoy Park ... is likely to help Vantage CEO Neil Rubler overcome his ﬁrm’s considerable struggles and reposition the company in a market where multifamily properties are showing strong investor interest.

PHOTOGRAPH OF 730 RIVERSIDE BUILDING FROM PROPERTYSHARK.COM

www.TheRealDeal.com January www.TheRealDeal.com July2011 2012 25 31

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Pinball wizard Real estate agents use overpriced homes as a negative example to sell similar homes nearby BY KENNETH HARNEY hey’re known as “setups” or “pinball” homes, and this spring’s improving conditions in some markets could be stimulating more of them. A setup or pinball property is a home listed with an unrealistically high asking price that pulls in lots of visits by agents and shoppers, but no offers. The problem is this: Real estate agents, including even the listing agent, are using the overpriced house as a negative example to sell other, similar homes nearby that carry lower asking prices. “It’s like a pinball machine,” said Debbie Cook, an agent with

“We’re deﬁnitely seeing it,” said Sandy Nichols Acevedo, an agent at Prudential California Realty in Oxnard, Calif. “Some people think they can go higher now because the market seems to be doing better.” Joe Manausa, owner-broker at Century 21 First Realty in Tallahassee, Fla., who wrote about the phenomenon on Active Rain, a Seattle-based industry blog with more than 220,000 members, offered this hypothetical example: “If two very similar homes are near each other with one priced at $250,000 and the other at $280,000, the higher-priced home is often shown ﬁrst. Then

Wash., said some sellers in the mid-to-upper price brackets in his area “are exuberant that we’re ﬁnally out of it [the recession] now,” and are tempted to disregard agents’ more sobering recommendations on pricing. What happens to such listings? “Unless we’re using it for a setup,” Cornell said in an interview, “we stop showing it” until the seller agrees to reprice to a sensible number. But as a matter of principle and ethics, should real estate agents accept listings from homeowners who refuse to listen to reason? Manausa is adamant that they

As a matter of principle and ethics, should real estate agents accept listings from homeowners who refuse to listen to reason? Long & Foster Real Estate in Silver Spring, Md. The “setup” is the foil — the home that agents show clients in order to make other, more realistically priced listings look better. Maybe the seller — encouraged by reports of rising sales and low mortgage rates — insisted on the aggressive asking price and wouldn’t list for anything less. Or maybe the seller’s agent didn’t fully brief them about what the property could command in today’s conditions rather than lose the listing. Whatever the specifics, pinball homes tend to see heavy traffic, but go nowhere until the seller drops the asking price, usually by significant amounts. Before then, however, they may be used without sellers’ knowledge to market other homes. Since no one seriously expects them to sell at their original asking price, agents are happy to exploit the overpricing to facilitate other sales.

the real estate agent says, ‘If you like this home at $280,000, you are going to love the home down the street at $250,000!’” Bill Gillhespy, an agent in Fort Myers Beach, Fla., has a real life example: He currently has a listing on the 14th floor of a luxury condominium project overlooking the Gulf of Mexico. The asking price is $450,000. There’s a unit on the same floor with similar views, similar square footage and layout, but with a more updated decor, that is listed for nearly $150,000 more. When Gillhespy is asked by another agent or a prospective buyer to see his unit, he often says, “Let me first show you a unit just down the hall. It’s one of the nicest in the entire building.” The higher-priced model shows well, but shoppers immediately remark on the $150,000 difference “and they can’t see how it’s justified.” Perrin Cornell, a broker at Century 21 Exclusively in Wenatchee,

should not. “If you list a property at a price you know will not sell,” he said, “you are misleading the seller. Effectively you are saying, ‘I don’t think it will sell, but I’ll put my name on anything hoping to get paid.’ ” Acevedo agrees that agents have a fiduciary duty to educate even the most headstrong owners about sobering market realities, but has a compromise solution: Take the listing but require the seller to sign a contractual agreement requiring an automatic price reduction to a specified level if the home doesn’t sell in the first two to three weeks. Bottom line here: Sure, sellers can try to push a little on price, but if they go overboard, they seriously risk becoming the unwitting setup, the pinball, the out-of-touch competition everybody else loves to visit. Kenneth Harney is a syndicated real estate columnist.

�� Aqueduct Convention Center plan falls through Plans for Genting to build a $4 billion convention center and casino in Queens have fallen through, Governor Andrew Cuomo said last month. Genting, a Malaysian company that opened a gaming “racino” at the Aqueduct racetrack in October, had planned a 3.8 million-square-foot facility in Queens to replace Manhattan’s Jacob K. JaAqueduct race track vits Center. Cuomo said he’s discussing plans for a convention center and casino with other companies, however. Next year, the state legislature will send voters a constitutional amendment that would allow Las Vegas–style casinos in New York.

Freddie Mac: Mortgage rates hit record low The average interest rates on 15- and 30-year fixed mortgages hit record lows last month. The average interest rate on a 15-year mortgage fell below 3 percent, to 2.97, for the first time ever, while the average rate for a 30-year loan dropped to 3.75 percent, hitting its lowest point since the long-term mortgages were instituted in the 1950s. In part because of these low rates, refinancing now accounts for some 78 percent of residential mortgage activity, according to the Mortgage Bankers Association.

Zoning changes for DoBro to “rationalize” parking The city’s Department of City Planning has proposed zoning changes that would reduce the number of parking spots required for new Downtown Brooklyn residential buildings in an effort “to better reﬂect actual parking demand,” Crain’s reported. Last month, the city sent the proposed amendment to Brooklyn Community Board 2 and Brooklyn Borough President Marty Markowitz for review. Developers are currently required to build four parking spaces for every 10 residential units, which has driven up costs and caused a surplus of parking spaces in many Marty Markowitz buildings, according to Crain’s. City Planning proposed requiring only two parking spots for every 10 units and eliminating parking minimums in buildings that include affordable housing. The public would also be able to park in unused residential parking garages on an hourly or daily basis, rather than just weekly or monthly. “Our goal is to rationalize parking requirements for Downtown Brooklyn,” commissioner Amanda Burden said. The city has said that it is also considering changes for other neighborhoods in Brooklyn and Queens.

City begins online lottery for affordable housing The city for the ﬁrst time last month began allowing residents to submit applications for affordable housing online, the New York Times reported. Would-be residents seeking to live in two new developments — the Westwind Houses at 45 East 131st Street in East Harlem and Richmond Place in Queens — can now submit applications via a new website: www.nyc. gov/housingconnect. The site will expand this fall to include all new affordable housing development projRichmond Place ects in the city. The city currently receives about 160,000 applications each year for about 4,000 affordable units, which usually sell or rent at below-market rates. Applicants, who must meet certain income requirements to qualify, are selected via lottery. Until now, applicants have had to complete a paper application and mail it to the developer of each building they were interested in applying for. With the new system, however, users can use the same application to enter multiple lotteries. But for now at least, paper applications will still be accepted. Compiled by Russell Steinberg

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TOP AGENTS

The all-star team This year’s top 75 Manhattan listing agents see their totals boosted by ultrapricey listings

BY LEIGH KAMPING-CARDER ohn Burger has had a good year. Not only did the Brown Harris Stevens broker earn the No. 1 spot on The Real Deal’s annual ranking of Manhattan’s top listing agents, he also more than doubled his dollar volume of listings from a year ago to $411.7 million. That number sets a new bar for the ranking, which is based on dollar volume of active Manhattan residential listings,

gathered from Online Residential in midJune. Last year, the top agent, Brown Harris Stevens’s Paula Del Nunzio, had $358.4 million in listings. This year, she ranked No. 3, with $293.8 million. That tally includes an exclusive for the Woolworth Mansion at 4 East 80th Street, which has been included in Del Nunzio’s total since it was listed in March 2011 for $90 million. Rounding out the top ﬁve are the

Corcoran Group’s Carrie Chiang at No. 2 with $316.2 million in listings, Prudential Douglas Elliman’s Dolly Lenz at No. 4 with $255.1 million and Sotheby’s International Realty’s Serena Boardman at No. 5 with $198.9 million. Collectively, the 75 agents with the highest dollar volume of listings had more than $6.34 billion worth of properties on the market, up 8 percent from last year’s total of about $5.96 billion. Burger — who employs one full-time

assistant but otherwise works alone — chalks up his success to the network of clients he has built over a 28-year career. “Those people have fortunately come back to me over the years for all of their real estate needs and the needs of the next generation,” he told TRD during a phone interview from London, where he was attending a birthday party for a friend and client. A Manhattan native, Burger was 22 years old when he obtained his real es-

Top Manhattan agents 2012 RANK

NAME

FIRM

APTS

TOWNH0USES LISTING $ VOLUME

NOTES

John Burger

Brown Harris Stevens

$411,679,500

Listings include a full-ﬂoor co-op at 944 Fifth Avenue for $50 million.

Carrie Chiang Team

Corcoran Group

$316,192,524

Listings include exclusive marketing assignment for Cassa NY at 70 West 45th Street.

Paula Del Nunzio

Brown Harris Stevens

$293,769,000

Listings include the Woolworth Mansion, on the market for $90 million.

Dolly Lenz

Prudential Douglas Elliman

$255,073,000

Listings include a three-bedroom unit at 15 Central Park West for $35 million.

Serena Boardman

Sotheby’s International Realty

$198,890,000

Listings include a ﬁve-bedroom at 2 East 67th Street for $30 million.

Elizabeth Sample and Brenda Powers

Sotheby’s International Realty

$162,920,000

Listings include 80 Columbus Circle, 77B, for $42.5 million.

Noble Black Team

Corcoran Group

$135,080,999

Listings include the penthouse at 785 Fifth Avenue for $65 million.

Sharon Baum and David Enloe

Corcoran Group

$127,465,000

Listings include 828 Fifth Avenue for $72 million.

Kleier Team

Gumley Haft Kleier

$127,453,000

Listings include 158 East 61st Street for $13.5 million.

10 Leonard Steinberg

Prudential Douglas Elliman

$127,269,000

Listings include exclusive marketing assignment for the Arman at 482 Greenwich Street.

11 Deborah Grubman and

Corcoran Group

$125,469,000

Listings include 828 Fifth Avenue for $72 million.

12 Shlomi Reuveni

Brown Harris Stevens

$124,175,000

Listings include exclusive marketing assignment for Reade57.

13 Thomas Guss

New York Residence Inc.

$123,830,500

Listings include exclusive marketing assignment for the Centurion at 33 West 56th Street.

14 Alexa Lambert

Stribling & Associates

$122,730,000

Listings include 828 Fifth Avenue for $72 million.

15 Ryan Serhant and Nick

NestSeekers International

$114,413,000

Listings include the 12th-ﬂoor loft at 252 Seventh Avenue for $22.5 million.

16 Lauren Muss

Corcoran Group

$104,219,000

Listings include 25 Columbus Circle for $50 million.

17 Bonnie Pfeifer Evans

Corcoran Group

$103,500,000

Listings include 785 Fifth Avenue penthouse for $65 million.

$100,360,000

Listings include an 11-room condo at 817 Fifth Avenue for $23 million.

Group

David Dubin

Jabbour

18 Ilan Bracha

Keller Williams NYC

John Burger

34 July 2012 www.TheRealDeal.com

Carrie Chiang

Paula Del Nunzio

Dolly Lenz

Dolly Lenz’s listing at 15 Central Park West

PHOTOGRAPH OF CHIANG BY MARC www.TheRealDeal.com January 2011SCRIVO 25

TOP AGENTS tate license, lured by the chance to work with both investment assets and people. “It’s sales and marketing, like many other forms of sales and marketing, but the end of the pipeline is somebody’s home, and that’s a very meaningful process to be involved in,” he said. But this year has been a particularly successful one for Burger, thanks to eightﬁgure transactions like the $34.6 million sale of William Lie Zeckendorf ’s co-op at 927 Fifth Avenue, and listings like a private investor’s full-ﬂoor co-op at 944 Fifth Avenue, priced at $50 million. In addition, there are outside factors contributing to Burger’s — and other agents’ — jump in dollar volume of listings this year. With the presidential election looming, homeowners may have a heightened sense of urgency to sell before new capital gains tax rates take effect, Burger said. He

has also noted a “newfound confidence” in the Manhattan market. Burger listed the unit at 944 Fifth, which comes with 70 feet of Central Park frontage and a separate guest apartment, on June 1. He declined to say whether the seller had received any offers since, but said interest in the home was “very strong.” At another of Burger’s listings at 907 Fifth Avenue — a combination of three apartments that can be reconfigured back to architect J.E.R. Carpenter’s original 18-room layout — the seller bumped up the asking price to $29 million in May. It first went on the market for $25 million in January.

Trophy listings This year, several brokers are appearing in the top 10 for the ﬁrst time, due in part to the presence of several extremely highpriced trophy properties on the market.

NAME

$38.5 million. But despite a longstanding interest in real estate, Black almost didn’t join the profession: He was intimidated by staking his livelihood on commissions. Then, while he was working at a law ﬁrm, the producers of “The Apprentice” approached the handsome young New Yorker about auditioning for the reality show. He didn’t get the part, but he did land a brief consulting gig with the production company. Then, instead of returning to his legal career, he reevaluated his professional life and decided to give real estate a shot. That decision appears to be paying off: Black said he is now making more money than the partners at his ex-ﬁrm. So would Black ever return to law? “Oh, God no,” he said. Coming in one spot below, at No. 8, is real estate veteran Sharon Baum, di-

A listing at 785 Fifth Avenue, on the market with Noble Black and Bonnie Pfeifer Evans for $65 million

Noble Black

Brenda Powers (left) and Elizabeth Sample RANK

Landing just one of these ultraexpensive listings can propel a broker into the top echelon of Manhattan listing agents. Consider Noble Black, a former securities lawyer who joined Corcoran in 2005. Black has never ranked on TRD’s top 75 list, but this year he is No. 7 with $135.1 million in listings. In January, he and Corcoran colleague Bonnie Pfeifer Evans listed songwriter Denise Rich’s penthouse at 785 Fifth Avenue for $65 million. (Evans, who frequently teams up with Black on listings, is a personal acquaintance of Rich’s.) Billed as the largest-ever penthouse offered on Fifth Avenue, the 20-room apartment is the third most expensive home on the market, according to StreetEasy. Black is also listing a townhouse at 101 East 63rd Street — formerly the home of the late fashion designer Halston — for

FIRM

APTS

TOWNH0USES LISTING $ VOLUME

19 Kathy Sloane

Brown Harris Stevens

$99,245,000

Listings include the second ﬂoor at 640 Park Avenue for $23.5 million.

20 Raphael de Niro, the De

Prudential Douglas Elliman

$96,750,000

Listings include the penthouse at 31–37 North Moore Street for $19.95 million.

Prudential Douglas Elliman

$94,654,750

Listings include co-exclusive marketing assignment for Trump Soho at 246 Spring Street.

22 Leighton Candler

Corcoran Group

$91,640,000

Listings include 828 Fifth Avenue for $72 million.

23 Daniel Neiditch

River 2 River Realty

$91,277,990

Building specialist at the Atelier at 635 West 42nd Street.

24 Darren Kearns

Corcoran Group

$88,245,000

Listings include the penthouse at 145 Hudson Street for $48 million.

25 Andrew Anderson Team

Prudential Douglas Elliman

$83,675,000

Listings include exclusive marketing assignment for 400 Fifth Avenue.

26 Louise Beit

Sotheby’s International Realty

$83,099,995

Listings include 120 East 70th Street for $35 million.

27 Brett Miles and Susan

Town Residential

$80,570,000

Listings include 45 East 74th Street for $33 million.

28 Lisa Lippman

Brown Harris Stevens

$78,867,999

Listings include two remaining units at 535 West End Avenue.

29 Scott Moore

Brown Harris Stevens

$77,968,000

Listings include two remaining units at 535 West End Avenue.

30 Michelle Grifﬁth

Trump Sales and Leasing

$71,197,000

Listings include a penthouse at Trump Park Avenue for $35 million.

31 Eva Mohr

Sotheby’s International Realty

$70,395,000

Listings include a ﬁve-bedroom at Millennium Tower for $27 million.

32 Heather McDonough

Prudential Douglas Elliman

$67,790,000

Listings include the penthouse at 145 Hudson Street for $48 million.

33 Ariel Cohen, the Ariel

Prudential Douglas Elliman

$64,071,000

Listings include exclusive marketing assignment for 75 Wall Street.

34 Mary Rutherfurd

Brown Harris Stevens

$62,900,000

Listings include two units at 907 Fifth Avenue for a combined $31 million.

35 Nikki Field

Sotheby’s International Realty

$62,349,000

Listings include the chapel unit at 455 Central Park West for $10 million.

36 Robert Browne Team

Corcoran Group

$60,889,000

Listings include the 14th ﬂoor at Superior Ink for $35.75 million.

37 Roger Erickson

Sotheby’s International Realty

$59,265,000

Listings include 57 East 74th Street for $15 million.

Niro Group Fredrik Eklund and John Gomes

NOTES

Green

and Henry Hershkowitz Cohen Group

64 March 2012 www.TheRealDeal.com

www.TheRealDeal.com July 2012 35

TOP AGENTS rector of Corcoran’s exclusive properties division, with $127.5 million in listings. Despite her long history in Manhattan real estate, Baum is making her first appearance on TRD’s top 10 list. (She did not appear on the 2011 ranking, and was No. 22 in 2010.) Baum is one of four brokers sharing a $72 million co-exclusive listing at 828 Fifth Avenue. The spread is actually made up of three units: a duplex maisonette off the lobby; a triplex apartment spanning the second, third and fourth floors; and a penthouse on the sixth floor. The apartments previously belonged to the skyscraper developer Howard Ronson. The other brokers on the listing include Corcoran’s Deborah Grubman and

Leighton Candler, who occupy TRD’s No. 11 and No. 22 spots, respectively, as well as Stribling & Associates broker Alexa Lambert, who landed at No. 14. “Do we like having it to ourselves better? Sure,” Baum said of sharing the listing with Stribling. “[But] we’re fine working with Alexa, because she’s terrific.” Baum estimates that about 90 percent of her deals take place on Fifth Avenue, Park Avenue and Central Park West, plus the “great side streets” in the area. A former banking executive who was a member of the first Harvard Business School class to include women, Baum works with her younger brother, David Enloe, and three other team members. Today’s market is unlike any other in

her experience — not a seller’s market, not a buyer’s market and not quite a changing market either, Baum said. “In a changing market, nobody’s right,” Baum said. “In today’s market, for the ﬁrst time that I’ve ever seen it, I feel that everybody’s right.” In other words, both buyers and sellers stand to beneﬁt from market conditions, such as low interest rates, off-peak prices and a shortage of good properties. To be sure, measuring brokers by dollar volume of listings — itself a moving target — does not give a complete picture of a broker’s abilities, since it eliminates important factors such as buyer’s side representation and closed deals — data that can’t be obtained in a comprehensive

way presently. The ranking also excludes certain properties, such as a $65 million townhouse at 7 West 54th Street, which is zoned commercial, noted Brown Harris Stevens’ Del Nunzio, who has the listing. Del Nunzio, a townhouse specialist, told TRD she got into real estate “through a love of architecture and its transformation of space and light.” There are a number of other brokers this year with listings above $50 million. Sotheby’s duo Elizabeth Sample and Brenda Powers have a $60 million listing at the Time Warner Center. After TRD collected the data, however, they took the property off the market for the slow summer months; the owner hopes to get

“Across the board, there are some record-breaking numbers — record-breaking dollars per square foot — and there is extremely limited inventory because there is such strong demand again.” ELIZABETH SAMPLE, SOTHEBY’S INTERNATIONAL REALTY

RANK

Michele Kleier, Sabrina Kleier Morgenstern and Samantha Kleier Forbes

A $72 million listing at 828 Fifth Avenue

Sharon Baum NAME

FIRM

APTS

TOWNH0USES LISTING $ VOLUME

38 Jed Garﬁeld

Leslie J. Garﬁeld & Co.

$59,200,000

Listings include 12 East 96th Street for $30 million.

39 Stephen McRae

Sotheby’s International Realty

$58,580,000

Listings include the penthouse at 60 Warren Street for $28 million.

40 Leila Stone

Sotheby’s International Realty

$57,850,000

Listings include 765 Park Avenue, 8B, for $27 million.

41 Giampiero Rispo

Domus Realty

$56,915,000

Listings include a combination unit at the Plaza for $55 million.

42 Tamir Shemesh

Corcoran Group

$55,805,000

Listings include 80 Columbus Circle, 73C, for $25 million.

42 Kyle Blackmon (tie)

Brown Harris Stevens

$55,805,000

Listings include the penthouse at Trump World Tower for $19.8 million.

44 Kirk Henckels and

Stribling & Associates

$53,940,000

Listings include the 12th ﬂoor at 810 Fifth Avenue for $27.5 million.

45 Sidney Whelan

Brown Harris Stevens

$53,180,000

Listings include exclusive marketing assignment for the Dillon at 425 West 53rd Street.

46 Tom Postilio

Core

$52,485,000

Listings include exclusive marketing assignment for One Museum Mile at 1280 Fifth Avenue.

Modlin Group

$52,126,000

Listings include 11 Gramercy Park South for $25 million.

48 Richard Nassimi

Corcoran Group

$51,384,500

Listings include exclusive marketing assignment for the Residences at the W New York Downtown.

49 Deanna Kory

Corcoran Group

$51,218,000

Listings include 27 West 72nd Street, PHB, for $7 million.

50 Daniela Kunen Team

Prudential Douglas Elliman

$51,085,000

Listings include four units at 1185 Park Avenue for a combined $38.7 million.

51 Matthew Gulker and

Prudential Douglas Elliman

$50,050,000

Listings include 144 Duane Street for $49.5 million.

52 Ann Jeffrey

Brown Harris Stevens

$49,530,000

Listings include 834 Fifth Avenue, 3/4C, for $23 million.

53 Ileen Schoenfeld

Brown Harris Stevens

$49,100,000

Listings include a duplex at 211 Central Park West for $29.8 million.

54 Cornelia Zagat Eland

Stribling & Associates

$48,950,000

Listings include 998 Fifth Avenue, 1W, for $20 million.

55 David Greczek and

Prudential Douglas Elliman

$48,125,000

Listings include exclusive marketing assignment for the Azure at 333 East 91st Street.

56 Sara Gelbard and Paul

Corcoran Group

$47,975,000

Listings include 18 West 11th Street for $11 million.

(tie)

NOTES

Jennifer Callahans

47 Adam Modlin and Marisa Sargent

John Musso

and Emily Hanna

Ammanda Espinal Kolbusz

36 July 2012 www.TheRealDeal.com

KLEIERS PHOTOGRAPH BY MICHAEL TOOLAN www.TheRealDeal.com January 2011 25

TOP AGENTS a better price for the unit in September, Sample said. “He is willing to wait for the market to catch up to where he wants to sell his apartment,” she added. Sample and Powers are also listing a 4,825-square-foot unit at the Time Warner Center for $42.5 million. All told, Sample and Powers had $162.9 million in listings, pushing them up to the No. 6 spot, a signiﬁcant jump from their No. 19 position last year when they were still at Brown Harris Stevens. In 2010, they were No. 5. Sample attributed their success in part to the strength of the luxury market. “Just across the board, there are some record-breaking numbers — recordbreaking dollars per square foot — and there is extremely limited inventory because there is such strong demand again,” she said.

Multiple ways to the top Of course, marketing one or two trophy

properties is not the only way to pull in hundreds of millions of dollars in listings. Corcoran’s Chiang, for example, works on new developments as well as individual homes. Currently, she and her team are managing sales for the Cassa NY Hotel & Residences at 70 West 45th Street, where 39 units are on the market, ranging from about $951,000 to $20.3 million. (Chiang and Boardman, of Sotheby’s, both declined to be interviewed for this article.) Chiang took over the marketing of Cassa from Ilan Bracha, founder of Keller Williams NYC, in February after Chinese ﬁrm HNA Property Holding Group acquired the building from an afﬁliate of Assa Properties. Bracha is No. 18 on TRD’s ranking, with $100.4 million in listings. Meanwhile, the Kleier team — made up of Michele Kleier and daughters Sabrina Kleier Morgenstern and Samantha Kleier Forbes — ranked No. 9 with 20

New condo Reade57, where Shlomi Reuveni of Brown Harris Stevens Select is handling sales

properties on the market. Their $127.5 million in listings range from a junior one-bedroom for $459,000 to a six-story mansion at 158 East 61st Street asking $13.5 million. The trio, which appears on HGTV’s “Selling New York,” debuted on the top 10 for the ﬁrst time this year after coming in at No. 25 in 2011 and No. 51 in 2010. Elliman’s Lenz seems to take a similarly diverse approach to listings. Her exclusives include a three-bedroom unit at 15 Central Park West priced at $35 million — which Lenz called a “bargain” during an appearance on Bloomberg TV in the spring — and fashion designer Karl Lagerfeld’s three-bedroom apartment at 50 Gramercy Park North, now asking $4.95 million. Ranked at No. 10 is Elliman’s Leonard Steinberg, who works closely with Hervé Senequier and seven other team members. The Leonard Steinberg Group has a total of $127.3 million in listings, includ-

A penthouse at the Arman, listed by Leonard Steinberg and Hervé Senequier

Leonard Steinberg

ing the $11.5 million triplex penthouse and two other units at the Arman, an eight-unit condo building at 482 Greenwich Street where they are overseeing sales. The group is also listing 54 East 81st Street, a 7,500-square-foot townhouse that is undergoing a gut renovation, available for $17.95 million. “If you don’t have a product to sell, you have to create it,” said Steinberg, a former fashion designer. He realized long ago that he’d rather be involved in the conceptual stage of new developments, he said, rather than merely executing a developer’s vision. In the next few months, Steinberg plans to start marketing 150 Charles Street, a 98-unit West Village condo conversion developed by the Witkoff Group. Steinberg called the project the “most exciting” one he has ever worked on. “It is shrouded in a veil of secrecy,” he said, “but when the veil is revealed, it will be beyond anything anyone’s ever expected downtown.” TRD

A penthouse at 60 Warren Street, listed for $28 million with Stephen McRae of Sotheby’s

RANK

NAME

FIRM

APTS

TOWNH0USES LISTING $ VOLUME

Leslie Mason and Kevin Landers

Prudential Douglas Elliman

$47,775,000

NOTES

Listings include 78 West 12th Street for $10.9 million.

58 Frances Katzen, the

Prudential Douglas Elliman

$47,277,350

Listings include the 11th ﬂoor at 485 Park Avenue for $9.95 million.

59 Sabrina Saltie 60 Tim Cass

Prudential Douglas Elliman

$47,083,900

Listings include a penthouse at 485 Park Avenue for $19.5 million.

Corcoran Group

$45,694,000

Listings include 50 Gramercy Park North, 11A, for $13.7 million.

61 Joan Swift

Prudential Douglas Elliman

$45,400,000

Listings include the penthouse at 419 Broome Street for $25.5 million.

62 Melanie Lazenby and

Prudential Douglas Elliman

$44,409,999

Listings include 188 East 78th Street, 26FLR, for $14.95 million.

63 Karen Kelley

Corcoran Group

$43,589,000

Listings include three units at 455 Central Park West for a combined $20.15 million.

64 Vickey Barron

Core

$42,970,000

Listings include 38 Bethune Street for $14.95 million.

65 Eric Malley

Sotheby’s International Realty

$41,859,000

Listings include a triplex penthouse at 30 Crosby Street for $18 million.

66 Carmen Marques Perez

Corcoran Group

$41,350,000

Listings include 101 East 63rd Street for $38.5 million.

67 Patricia Vance, the

Prudential Douglas Elliman

$41,190,000

Listings include 27 West 72nd Street, 1410, for $11.4 million.

68 Pauline Evans

Sotheby’s International Realty

$41,078,000

Listings include a ﬁve-bedroom at 2 East 67th Street for $30 million.

69 Guthrie Garvin

Massey Knakal Realty Services

$40,400,000

Listings include 7 East 69th Street for $20 million.

70 Bertrand Buchin, Buchin

Prudential Douglas Elliman

$40,101,000

Listings include exclusive marketing assignments at 300 East 23rd Street and 481 Washington Street.

Nelson and Lisa 71 Paige Verdi

Sotheby’s International Realty

$40,000,000

Listings include 34 East 62nd Street for $40 million.

Gross and Diane 72 Felise Abrams

Brown Harris Stevens

$39,925,000

Listings include 249 Central Park West for $25 million.

73 Patrick Lilly

Corcoran Group

$38,942,000

Listings include 110 Central Park South, 7A, for $6.5 million.

74 Siim Hanja

Brown Harris Stevens

$38,174,000

Listings include the 11th ﬂoor at 810 Fifth Avenue for $21.5 million.

75 Jim St. Andre

Peter McCuen & Associates

$36,500,000

Listings include 66 Leonard, PH, for $27.5 million.

Katzen Group

Dina Lewis

Patty Vance Team

Raida Team

Source: Data comes from Online Residential Inc., and includes Manhattan residential sales listings (apartments and townhouses with no commercial/retail component) that were active between June 11 and June 14 and had been updated within the previous 15 days. Listings that did not also appear on the ﬁrm’s website were not included. Known teams or partnerships are counted as a single entity. Listings shared by two or more agents are counted as a full listing for both agents. On-site agents who work exclusively for a developer have not been counted. However, if an agent works for a brokerage ﬁrm, he/she has been included on this list, and new development listings were included in agents’ totals.

64 March 2012 www.TheRealDeal.com

www.TheRealDeal.com July 2012 37

Bigger isn’t always better Independent high-end brokers see beneﬁts from the luxury market

BY KATHERINE CLARKE hen The Real Deal sat down last month with Horacio LeDon, the Manhattan real estate broker had just returned from the Cannes International Film Festival, where he attended a party on rapper Diddy’s $33 million yacht. Cannes is “the second-most-important film event in the world” after the Oscars, said LeDon, a former Starwood Capital executive who founded his eponymous residential real estate brokerage in January. “And yet everyone was more interested in New York City real estate.” LeDon is one of several highend New York City real estate brokers who operate primarily on their own, or with a few carefully selected employees. More so than other brokerages, these tiny, exclusive firms — including Peter McCuen & Associates, the Modlin Group and Mercedes/Berk — operate under the radar. And they depend heavily on social and professional connections for their livelihoods, courting high networth clients who prefer working with friends or acquaintances to browsing the websites of large companies. While a number of independent brokers joined forces with bigger brokerages when the recession hit, many of those who stuck around are now seeing business increase, due to the upswing in the luxury market. “The pool of luxury buyers gets bigger every day,” said Noel Berk, a principal of Mercedes/Berk, an eight-agent firm with several high-profile listings, including a $26 million property at 15 Central Park West. In the last few months, Berk said her firm has seen an increase in requests for apartments ranging in price from $15 to $50 million. “We have clients who are ready to pay cash for their ideal apartment and are realistic about the market price for these units,” she said.

Knowing the right people The business model for very small ﬁrms works best when agents specialize in selling high-end homes, brokers said. “It’s very hard for a person to be a broker on their own, to maintain a ﬁrst-class operation unless they sell expensive property,” Berk said. For one thing, high-end deals provide large infusions of cash that help offset the 38 July 2012 www.TheRealDeal.com

overhead costs needed to keep the ﬁrm running. “The deals in New York in the luxury market are big deals,” said Adam Modlin, founder of the six-agent Modlin Group, whose current listings include a $25 million home at 11 Gramercy Park South. “If you’re consistently selling apartments for between $5 and $10 million, and once in a while you’re selling a house for $30 million,

month, he said his firm had done six major deals in the previous 10 days. “That is more than normal,” he said. Meanwhile, the two-agent firm Peter McCuen & Associates is currently listing a $35 million townhouse at 85 Jane Street and a $27.5 million penthouse at 66 Leonard Street. The heads of these mini-firms say that some very wealthy clients gravitate toward

To ensure access to high-end buyers, agents at micro-brokerages need to have the right social connections. Clients on the very high end “want to feel that you’re a friend of theirs,” said LeDon, who recently represented the buyer of a $13.5 million apartment at the Touraine at 132 East 65th Street. “You take advice from the people who are most like you, and with whom you share the same aesthetic sensibilities and social circles.”

Horacio LeDon at 165 Charles Street, where he recently represented the buyer of a $7.73 million apartment

“You take advice from the people who are the most like you.” HORACIO LEDON there’s really no issue with health insurance or operating expenses.” Luckily for him, Manhattan’s luxury market has seen a recent uptick in activity. According to a StreetEasy market report, the number of luxury sales — deals above $2.93 million — in the ﬁrst quarter of 2012 increased by 20 percent from the previous quarter, and 10.2 percent from the same period of last year. The Modlin Group has seen the dollar volume of its listings rise in the last year. As of May, it had some $48 million in active Manhattan residential listings, according to The Real Deal’s annual ranking of boutique brokerages. That’s up from $31.9 million at the same time last year. When Modlin talked to The Real Deal last

them because they’re more confident that their secrets will be kept. Top brokers at major firms like Prudential Douglas Elliman or the Corcoran Group pride themselves on confidentiality and, obviously, have their own star-studded client rosters. But at smaller firms, LeDon noted, “there’s not a whole lot of room for information dissemination.” So far, LeDon has hired only one other agent to work at his firm: Colleen Newland, a former CitiGroup executive. He is considering hiring one other person, but that’s it for now. Modlin said one reason he keeps his numbers small is to help keep big deals quiet. “I don’t like to have lots of strangers working on highly confidential deals,” he said.

LeDon is a former screenwriter, so he tends to socialize with people in the entertainment business. In early May, for example, he jetted to London for a party thrown by rapper Jay-Z at the Piccadilly nightclub District, then headed to Los Angeles for a stay at the We Care spa, a juice-fasting and spiritual retreat frequented by celebrities. At Starwood, LeDon oversaw sales at various properties in Los Angeles, but decided to leave in July 2011 because so many of the condo projects he was working on went rental and his commission potential decreased substantially. He thought he could earn more by striking out on his own. So far, the strategy has paid off: Since January, he said he has put more than $50 million worth of property in contract, $32.5 million of which has closed. Like LeDon, Modlin has also parlayed his connections into real estate success. Thanks to a previous career in fashion, Continued on page 86 PHOTOGRAPH FOR THE REAL DEAL BY CHRIS MARTIN www.TheRealDeal.com March 2012 00

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Introducing: The Naftali Group A year after leaving Elad and striking out on his own, Plaza developer Miki Naftali has eight projects brewing and is looking for more Miki Naftali seems excited to be free of the trappings of running a big company like Elad.

BY CANDACE TAYLOR rew, you’re tired, huh? You had a rough night?” Miki Naftali, founder of the year-old Naftali Group, is teasing his 26year-old director of development, Drew Popkin. Popkin is a good sport. “It was a long night,” he replies from his seat in the windowed conference room of the firm’s new 5,000-square-foot office at 1700 Broadway. “You’ll tell me after this [interview] what happened last night,” his boss says with a laugh. Naftali is in good spirits. Best known to New Yorkers as the public face of the controversial Plaza hotel condo conversion, the former CEO of Elad Properties left his post at the company a year ago to start his own development firm. Since its launch in July 2011, the Naftali Group has purchased eight properties in Brooklyn and Manhattan — four multifamily rental buildings and four development sites — and is looking for more. Already, the nine-person firm has plans for four new-construction residential buildings, including a new boutique condo on the 40 July 2012 www.TheRealDeal.com

“For me today, at this stage of my career, I really want to come to the ofﬁce and enjoy, to feel good. It’s not only about compensation, it’s about feeling good about what you do.” MIKI NAFTALI, THE NAFTALI GROUP Upper West Side and a 30-story tower in the Financial District — neither of which have been made public until now. “We’ve gotten a great response from the market, from the lenders, from our equity partners, from the brokerage community,” said Naftali, in his ﬁrst extensive interview since leaving Elad. “So it’s great, we’re doing well.” Naftali himself acknowledges that the company has been “media-shy,” since its launch. There’s a good reason for that: From the moment Elad purchased the iconic Plaza hotel in 2004, the project was a public relations debacle that spawned lawsuits, protests and unfavorable comparisons to the nearby condominium 15 Central Park West. And as the right-hand

man of Elad’s owner, Israeli billionaire Isaac Tshuva, Naftali found much of the ire directed at him; last year, the Observer called Naftali “the man many people blame for the Plaza’s shortcomings.” Lightning rod though it was, the Plaza conversion was a moneymaker for Tshuva, with its condo units selling out for some $1.4 billion. And Elad is now in the process of selling its stake in the hotel to Sahara India Pariwar for a reported $575 million. The same cannot be said for the company’s 2007 purchase of the Frontier Hotel in Las Vegas for $1.24 billion. Partnering with Israeli tycoon Nochi Dankner, Elad demolished the hotel with plans for a Plaza-themed resort. But the project never got off the ground, leading to a reported

haircut of 45 to 60 percent for Tshuva and Dankner. But Naftali said he’s been received well by lenders because of his history of completing Elad projects in New York. Naftali said his track record is what’s enabled the fledgling firm to find three different equity partners and secure over $140 million in construction debt for its 400,000-square-foot New York City portfolio, at an overall portfolio debt rate of around 2.5 percent. “That rate, for that amount of debt, is very rare,” Popkin said. Alan Miller, an executive managing director at Eastern Consolidated, agreed that “sub-three construction money is quite low.” www.TheRealDeal.com January 2011 25 PHOTOGRAPH FOR THE REAL DEAL BY CHRIS MARTIN

aftali seems excited — and relieved — to be out on his own, free of the trappings of running a big company. “For me today, at this stage of my career, I really want to come to the ofﬁce and enjoy, to feel good,” he said. “It’s not only about compensation, it’s about feeling good about what you do.”

The hunt Naftali is fond of saying that he left Elad on June 30 and founded the Naftali Group on July 1. The newborn ﬁrm didn’t even need to move from its ofﬁces at 575 Madison Avenue; those who were staying with Elad

PR O F I L E looking for equity partners. Within a few months, the company had purchased four small existing apartment buildings, all with “some type of distress or situation [where] we thought we could really create value,” Naftali said. The first building, 65 Maspeth Avenue in Williamsburg, had been developed as a condo but “during the financial crisis, they had real issues,” Naftali said. He bought the 21-unit building from the original developer, though Naftali declined to specify how much he paid. Even though the project was nearly completed, “we upgraded, because he didn’t finish it to the standard that we thought was the right standard.”

tial rental units and 10,000 square feet of retail space in Greenpoint. Naftali hired the brokerage aptsandlofts.com to handle leasing for the properties. All four are now leased out for rents in the “upper $40s” per square foot, according to David Maundrell, head of aptsandlofts.com. But Naftali wasn’t just looking for existing rental buildings — he was also gunning for development sites. The team found a stalled development site at 267 Sixth Street, on the corner of Fourth Avenue in Park Slope, and purchased the note for $10.7 million. Together with Chicago-based Pearlmark Real Estate Partners (formerly known as Tran-

with investment management advisor AEW to buy a 90,000-square-foot development site at 316 Bergen Street on Third Avenue in Boerum Hill. According to public records, the partners paid $6.72 million for the site in a deal that closed in May. They plan to build an 85-unit rental property there, designed by ODA Architecture. Maundrell said the units are expected to rent in the low $50s per square foot. He also noted that he admires Naftali’s foresight in purchasing development sites at a time when many other developers were shying away from ground-up construction. He said that land values in the area have already risen since the ﬁrm snapped up the two development sites.

484 Humboldt Street in Williamsburg, a rehabbed school that the ﬁrm purchased. Condo conversion 250 West in Tribeca, which Naftali worked on while at Elad.

The team (from left to right): Eva Malachi, Victor Sigoura, Miki Naftali, Drew Popkin and Michael Witek.

316 Bergen in Boerum Hill, where the Naftali Group is planning an 85-unit rental.

The Plaza, a project that was controversial yet ﬁnancially successful.

simply moved from the 23rd to the 22nd floor. (At the time, Naftali owned a 49 percent stake in Elad Properties, a New York subsidiary of Tshuva’s Elad Group. Elad Properties has now been dissolved.) In March, the Naftali Group moved to 1700 Broadway. Naftali took with him a small team, most of whom had been working with him for years: Victor Sigoura, the Naftali Group’s chief investment officer, had been at Elad for six years. Other Elad veterans include Popkin; Michael Witek, the Naftali Group’s vice president of construction; and Eva Malachi, the firm’s vice president of operations. The firm started looking for deals immediately, cold-calling building owners in targeted neighborhoods, Sigoura recalled, and spreading the word that they were PHOTOGRAPH OF GROUP FOR THE REAL DEAL BY CHRIS MARTIN

Then, across the street “we saw a building that was just vacant with plywood on the windows,” Naftali recalled. “I asked Drew who owns the building, and sure enough, we found there was a foreclosure process on the building.” Originally planned as a 24-unit condo, 64 Maspeth was nearly complete but had sat vacant for three years. Naftali negotiated with the lender to buy the note, took title to the building and secured a bridge loan. Within five months, his firm had completed the project, leased out all of the units and refinanced the deal. Also in Williamsburg, the firm purchased 484 Humboldt Street, a rehabilitation of a former schoolhouse. And in an off-market deal with the same seller in late 2011, it purchased 200 Franklin Street, a 12-story tower with 19 residen-

swestern Investment Company) they’re in the process of building a $39 million, 104unit ground-up rental, which is slated for completion in 14 months. The project had already been fully designed by the architect Karl Fischer, but the Naftali Group worked with him to rejigger the layouts to better target the Park Slope market. They also hired designer Andres Escobar to create “really cool spaces,” including a gym, residents’ lounge and a roof deck with cabanas, Naftali said. Based on comps from nearby Arias Lofts, he said he’s hoping to rent out the units for around $55 per square foot, or more. Adam Hess, a partner at Brooklynbased TerraCRG, said for new construction buildings in Park Slope, “we’re in an era where we’re over $50.” The Naftali Group has also partnered

Naftali “knows what is valuable and what is not,” Maundrell said. “He’s not buying Brooklyn because it’s cool. He understands what’s going on here very, very well.” According to a May report by the brokerage MNS, average rents in Brooklyn are up 10 percent from the same period of last year and 40 percent in Park Slope. The average one-bedroom in the neighborhood now rents for $2,356 per month. Naftali said his ﬁrm is aiming to take advantage of the current high demand for rentals in the area. Even if the white-hot rental market slows down a bit, Sigoura said, “we’re in at a good-enough basis that if the market were to turn a bit, we’d still be more than ﬁne.” Continued on page 88

www.TheRealDeal.com July 2012 41

PR O F I L E

Justin time S

Henry Elghanayan’s son quietly becomes president of post-split Rockrose

BY JAKE MOONEY tanding on the unfinished 30th H. Henry Elghanayan, left, and floor of 43-10 Crescent Street his son Justin in Long Island City last month, Justin Elghanayan could see his family history laid out before him. The site where he was standing — soon to become a 42-story rental apartment building called Linc LIC — was purchased 25 years ago by his father and uncles, the founders of Rockrose Development. The under-construction building, which is to have 709 residential units, is slated for occupancy in the spring of 2013. Nearby sprawls the 22-acre East Coast project, where Rockrose acquired the site of a former Pepsi plant in 2003 and began constructing residential towers two years later. Now, six of the seven building sites there are owned by Justin’s uncles K. Thomas and Frederick, who in 2009 formed a new company called TF Cornerstone. Thirty-four-year-old Justin, who quietly became the president of Rockrose in April, knows he has big shoes to fill. “Lucky for me,” he said, “being a leader turns out to be really fun.” His father, Rockrose CEO H. Henry teacher in a troubled city high school and to Legal Aid Society lawyer Alexa Cato, he Elghanayan, said he has full confidence in spending a year at Yale Law School. said, the time seemed right for the proJustin is the first president of the newly motion. his son, especially when it comes to Justin’s first big challenge: overseeing the compa- reconstituted Rockrose (before the split, the As The Real Deal and others have reny’s $750 million worth of planned ported, however, his ascendevelopment in the Court Square Rockrose residential rental properties dance, and the events leading area of Long Island City. up to it, came at a cost to the ADDRESS UNITS In fact, the elder Elghanayan larger Elghanayan family. Sev110–114 Horatio Street 154 said his own hands-off approach eral years ago, Henry moved to 219 at the Court Square project — the Midwest Court, 410 West 53rd Street divide the family business and centerpiece of the company’s new- The Archive, 666 Greenwich Street branch off from his younger 479 est efforts — is a reflection of that brothers Tom and Fred. 100 Jane Street 148 confidence. Henry famously sought the “This is the first time I’ve ever Tribeca Pointe, 41 River Terrace split — which he said his broth340 been here,” Henry said as he looked ers opposed, and which came 200 Water Street 576 around the 30th-floor observation very shortly after the death of 324 deck at Linc LIC, which will have 22 River Terrace their parents — largely to clear a grocery store in its ground-floor 4705 Center Boulevard the path of succession for Jus394 retail space. Besides Linc LIC, the tin. Linc LIC, 4310 Crescent St. (under construction) 709 Court Square project includes two Neither of Justin’s two brothadditional towers on a neighbor- Source: Rockrose ers are in real estate; one is a ing lot that will add another 1,100 philosophy professor and one Rockrose commercial properties units. On a third lot, a steak house is a law student. But given that SQ. FEET from the owners of the Queens- ADDRESS other young family members based restaurant M. Wells will 300 Park Avenue South worked for Rockrose, Henry 180,000 said he feared disaster would open this fall. 180,000 Justin is “one of the smartest 1150 18th Street, NW (Washington, D.C.) ensue when it was time to depeople I know,” said Henry, who, at 1776 Eye Street, NW (Washington, D.C.) termine the next generation of 225,000 70, now focuses mostly on the comleadership at the company. Source: Rockrose pany’s commercial acquisitions, fi“I said, ‘This is going to get nance and human resources. “He’s complicated,’ ” Henry recalled. a hard worker.” position was held by his uncle Tom). The “It was almost like identifying a torpedo option of moving into that slot had been coming at you. It’s very far away, and you Some scars available to him for some time, he said, but can see it coming, and you say, ‘I’d better Justin Elghanayan joined the family busi- he first wanted to gain experience in lower- do something before it gets here.’” Justin added, in a separate interview: ness seven years ago after studying Eng- level jobs in the company, especially in conlish literature at Princeton, working as a struction. Then, after his March wedding “For us, the decision really had to do with, 42 July 2012 www.TheRealDeal.com

‘Look, as much as I love my cousins, this is going to be too many personalities, too many people. Too many cooks are going to be in that kitchen.’ ” The brothers began the difﬁcult task of divvying up Rockrose’s property. Henry retained use of the Rockrose name and three development sites in the Court Square section of Queens, among other properties; TF Cornerstone’s holdings include the East Coast sites and Manhattan rentals like 505 West 37th Street and 2 Gold Street. In the aftermath of the split, Henry said, “There are some scars. You can’t do this without scars.” Still, with projects geographically close to one another, Rockrose and TF Cornerstone share the common goal of seeing those areas succeed, Justin said. “If you’re building in the same neighborhood,” he said, “your competitors are your friends.”

Leaving in a box Rockrose’s priorities now include acquiring commercial properties in New York and Washington, D.C., Justin said, and ﬁnding residential sites in Brooklyn, Manhattan and Long Island City. At a site the company owns at 37th Street and 11th Avenue in Manhattan, across from the Jacob K. Javits Convention Center, Rockrose is planning 300,000 square feet of residential development and another 700,000 square feet of commercial space, to coincide with the opening, at an undetermined date, of the second phase of the Hudson Yards project’s park. Justin, who lives in a non-Rockrose building in Boerum Hill, Brooklyn, said outside of work, he maintains an interest in educational policy and a desire to stay involved with that cause, perhaps philanthropically. “He’ll do it,” his father said. “When Justin puts his mind on something, he does it.” One thing he will not do anytime soon, though, is take over as CEO. That job, both Elghanayans said, is taken for the foreseeable future. “He loves what he does, and I think he intends to do it as long as he possibly can,” Justin said of the man he calls “Henry” in work-related conversations and “Dad” on personal matters. Henry was more blunt. “They’re taking me out in a box,” he said. “As far as I’m concerned, you retire, you die.” TRD www.TheRealDeal.com January 2011 25 PHOTOGRAPH FOR THE REAL DEAL BY MAX DWORKIN

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Cashing in on Canal

Retail landlords brave vacancies in hopes of higher-quality tenants on grungy stretch

Shoppers jostle on a crowded Canal Street just west of Centre Street last month.

BY ADAM PINCUS “It’s another part of New York City that roperty owners are betting that is going through positive gentrification,” Canal Street, long a mishmash Sitt said. of counterfeit handbag stores Retail sources say the reason these and small-electronics purvey- bigger real estate players are starting to ors, is on the cusp of a real estate trans- pay attention to Canal is a direct result of formation. what’s happening just to the north in Soho Vacant storefronts and construction — one of the city’s most active retail zones, plywood has popped up on the noisy, where vacancies are tight and rents are bustling seven-block stretch from West booming. Brokers and owners say large, Broadway to Centre Street. Much of the and perhaps national, tenants are beginbuild-out is being done speculatively, ning to believe that they can capitalize on some by new owners like high-profile in- the spillover from Soho. In fact, as brovestor Vornado Realty Trust, which re- kers pitch Canal Street to tenants, they cently picked up a small property there. say they’re highlighting the proximity to But established owners on high-end condos and hothe street are also rehabtels like the Soho Grand and Soho Mews. bing storefronts and looking to add to their hold“Canal Street is the next frontier,” said Alings. bert Laboz, a princiIn addition, landlords have recently seen an uppal at United American tick in calls from potential Land, which controls buyers, and some of the more buildings than any city’s top retail owners are other landlord on this United American Land’s Albert eyeing potential acquisi- Laboz. The firm owns more buildings stretch of Canal. “I see it tions on the gritty, chaotic on Canal between West Broadway as an extension of lower thoroughfare. For example, and Centre than any other landlord. Broadway, but edgier. Joe Sitt, the CEO of Thor Equities, an ac“I think the retailers are starting to tive buyer in prime shopping districts like get it.” Fifth Avenue and Broadway, told The Real Canal Street, however, does have some Deal that he’s looking to make his first Ca- unique challenges. Unlike many of the city’s iconic shopnal Street acquisition. 44 July 2012 www.TheRealDeal.com

“What is Canal Street? Is it a tourist destination? Is it an extension of Broadway? Is it banks, fashion — is it food? That is what people have to figure out.” JASON PRUGER, NEWMARK GRUBB KNIGHT FRANK RETAIL ping thoroughfares where investors often own clusters of buildings, Canal has more than 40 owners among the 72 parcels from West Broadway to Centre Street. And it’s dotted with a slew of tiny shops, which give it a chaotic look. In fact, United American Land — which owns 10 buildings (and controls an eleventh with a longterm lease) and roughly a fifth of the frontage — is one of only two firms that own more than two buildings on the stretch. “The fractured element definitely makes it tougher to put things together,” said Jason Pruger, executive managing director at Newmark Grubb Knight Frank Retail, who has several listings on the stretch. It’s also made it difficult to predict what personality the retail there will take on. “What is Canal Street? Is it a tourist

destination? Is it an extension of Broadway? Is it banks, fashion — is it food? That is what people have to ﬁgure out,” he said.

Canal commerce Today’s Canal streetscape harkens back to an earlier time in New York when large stores competed with street vendors, and tiny shops were festooned with merchandise clinging to their walls and hanging from the ceilings. The name of the street itself — which was the site of a thin canal between 1811 and 1819 — recalls its history. Unlike many of the city’s other highly trafﬁcked shopping districts where there are sizable retail spaces owned by large landlords, small individual frontages are still the name of the game on Canal. The bulk of the storefronts — nearSTREET SCENE PHOTOGRAPH FOR THE REAL January DEAL BY DEREK www.TheRealDeal.com 2011ZAHEDI 25

COMMERCIAL ly 1,100 linear feet of the approximately 2,750 feet of frontage on the north and south side of Canal — is occupied by small shops selling discount-price bags, jewelry and perfume. In fact, many of the 25-footwide stores are divided into even narrower 12-foot frontages for their small handbag and jewelry tenants. Another 600 feet is occupied by more stable (but still local) retailers, while just 380 feet of frontage is occupied by national stores and banks, known in the industry as “credit tenants.” Although often dull for retail, they provide economic stability to landlords. Meanwhile, roughly 450 feet is vacant. The balance of space is occupied by the U.S. Post Ofﬁce and a local nonproﬁt. Surprisingly, those discount retailers pay rents on Canal that are as high as rents paid in many parts of Soho, with landlords getting $300 to $400 per square foot, several insiders said. They attribute that to the

Joe Sitt is looking to buy his ﬁrst Canal Street property.

sive) streets. For example, the mega-convenience store 7-11 was eyeing a space on Canal last year, but ended up leasing on

sons, including what they considered to be unrealistic expectations on rent,” said Michael Glanzberg, a principal with Soho-

Some of Canal Street’s priciest for-sale properties OWNER

ADDRESS

ASKING PRICE

ABS Partners and partner

250 Canal

$30 million

Michael Marvisi

326, 332 Canal

$23.5 million

Lau family

251 Canal

$21 million

Source: PropertyShark, The Real Deal. Only includes properties between West Broadway and Centre Street.

Canal Street retail quick facts # OF PROPERTIES

FRONTAGE (FEET)

TOTAL RETAIL SPACE (SF)

2,750

222,933

Source: Acris, PropertyShark, The Real Deal. Only includes properties between West Broadway and Centre Street.

Canal Street owners with the most retail frontage LANDLORD

# OF PROPERTIES

FRONTAGE (FEET)

United American Land

412

Trans World Equities

189

King Fook

116

Chong family

100

Benjamin Partners

100

Source: Acris, PropertyShark, The Real Deal. Only includes ownership between West Broadway and Centre Street.

cash economy that many of the handbag and electronic retailers work in, as well as the premium landlords can charge for accepting higher-risk, month-to-month tenants. In fact, rents are so high on Canal that some national chains have opted to take space on other nearby (and less expen-

on the street — McDonalds, Burger King, Starbucks, AT&T, Verizon, Sleepy’s, TD Bank and Bank of America — are concentrated on the portion of Canal from Centre to Broadway. Those stores, not surpris-

Lafayette Street instead for about $150 per square foot, said one broker, who asked to remain anonymous. Others said that situation was not unique. “I am aware of banks who have evaluated Canal Street corners, but who ultimately decided against it for a variety of rea-

based brokerage Sinvin Real Estate. Meanwhile, the fried-chicken chain Popeye’s vacated 327 Canal Street to take a location nearby at 96 Walker Street because the rents on Canal were too high, according to one insider. The national tenants that are currently

The retail space in the mixed-use 265 Canal

United American Land also owns 309 Canal, which

Street is being rehabbed, despite the fact that

has Citibank — one of the few “credit tenants” cur-

there’s no tenant lined up. The Chong family,

rently on the stretch —

which owns the building, says it’s in negotia-

as a tenant. Other

tions with a tenant for the 13,000-square-

national tenants

foot, ground-

are expected to dis-

ﬂoor space.

place existing dis-

Vornado’s Wendy Silverstein said the ﬁrm will “continue to look for opportunities” on Canal.

ingly, are located in the buildings owned by the major landlords. In addition to Laboz — who owns about 40 properties in Manhattan and Brooklyn, and developed Soho Mews — other wellknown retail owners include the estate of Sol Goldman, the Gindi family (which owns the department store Century 21) and Vornado. The Goldman estate owns 335 Canal Street, while Vornado quietly bought 334 Canal through a foreclosure auction. After Laboz, the second-largest owner on the stretch is Trans World Equities — a Midtown-based real estate firm that owns five buildings. Most of the other buildings in the area have long been held by low-profile owners such as the Katz, Lippman and Roth families. Despite the proximity to Chinatown, however, only 16 of the buildings are owned by landlords with Asian-soundContinued on page 89

Vornado Realty Trust quietly bought 334 Canal for $8.2 million at a foreclosure auction in September. The REIT is now rehabbing the retail space in the building.

count tenants soon.

t e e r t S l Cana United American Land is looking for new retail tenants in the National City Bank building at 296 Canal, which is now home to a hodgepodge of discount shops. Newmark Grubb Knight Frank Retail is marketing the space — one of the longest retail frontages on the street. SITT PHOTOGRAPH FOR THE REAL DEAL BY MAX DWORKIN

This low-rise brick building at 312–322 Canal, which is owned by Trans World Equities, is occupied by discount retailers selling merchandise like handbags and perfume. Landlords currently charge cash-economy tenants that occupy small stores Soho-like rents because they’re riskier to do business with. www.TheRealDeal.com July 2012 45

��

� �� 1985: RECORD FINANCING ANNOUNCED FOR ROCK CENTER

n investment group owned by members of the Rockefeller family announced plans 27 years ago this month to reﬁnance Rockefeller Center — a move that ultimately raised a record-breaking $1.3 billion. The Rockefeller Group, a company owned by descendants of John D. Rockefeller, Jr., said in July 1985 that it would create a publicly traded real estate investment trust called Rockefeller Center Properties Inc. and raise $1.1 billion through a stock offering. That fall, the REIT, which was headed by David Rockefeller until 1992, ultimately raised $1.3 billion, making it the largest real estate ﬁnancing to date, according to a Goldman Sachs executive quoted in the New York Times. The trust spent $400 million to repay debt that the family had David Rockefeller used to buy the land under Rockefeller Center a few months earlier from owner Columbia University. It spent another $400 million to pay Rockefeller family members, while the balance was retained for future acquisitions. The Rockefeller REIT, which held the mortgage to Rockefeller Center, sold a controlling interest in the property in 1996 to a group led by Goldman Sachs and Tishman Speyer Properties.

1949: NY HIGH COURT BACKS SEGREGATION AT STUY TOWN

he state’s highest court, the New York Court of Appeals, ruled 63 years ago this month that the Metropolitan Life Insurance Company could ban black applicants from living in its newly opened complex, Stuyvesant Town. The judges voted four to three to uphold lower court decisions that threw out a lawsuit brought by three black war veterans who wanted to live in the complex. The suit was supported by the National Association for the Advancement of Colored People, the American Civil Liberties Union and the American Jewish Congress. The president of MetLife at the time, Frederick Ecker, was quoted saying, “Negroes and whites do not mix.” The insurance company received government help through partial tax exemptions and assistance through eminent domain to acquire the properties used in the massive 110-unit complex, which ﬁrst opened in 1947. At the time, it was not illegal for private developers in New York to discriminate against applicants based on race Former MetLife president — but it was illegal in public housing. In June 1950, the U.S. Frederick Ecker Supreme Court declined to hear the case, but the City Council passed a law in 1951 barring discrimination. That opened the path toward integration in the complex in the following years, although slowly.

General Star-A Berkshire Hathaway Company, a highly rated carrier with many years of experience providing Errors & Omissions coverage for Real Estate Professionals.

46 July 2012 www.TheRealDeal.com

1901: STATE LAW BANS PROSTITUTION IN TENEMENTS

law aimed at curbing prostitution in residential apartment buildings in Manhattan took effect 111 years ago this month, giving authorities the power to install a government-appointed receiver if even one illegal incident was discovered. The sanctions were part of the sweeping Tenement House Law, a landmark piece of progressive-era legislation that sought to improve living conditions for the working class and poor living in tenement buildings. The portion related to prostitution levied fines of up to $1,000 against landlords if they were aware of the prostitution. The fine was recorded as a lien, and the law allowed the state to install a receiver to manage a building’s rent if $1,000 or more in liens was filed against a property. The chief proponent of the law was a group called the Committee of Fifteen, which was created in 1900 to weed out prostitution and gambling in the city. In 1901, the committee reported Tenements on the LES that prostitution was taking place in 290 apartment units within 237 tenement Manhattan buildings. The committee focused on the borough’s poorer regions, such as the Lower East Side, Yorkville, East Harlem and Hell’s Kitchen. While the law’s supporters conceded that it would be difficult to eliminate prostitution in the city, they wanted to remove it from the apartment buildings where families lived. Compiled by Adam Pincus

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MANHATTAN NEW DEVELOPMENT

Counting condos A breakdown of NYC condos now on the market — and those coming down the pike

by listings aggregator StreetEasy. Contract activity and median sales prices for new homes in Manhattan and Brooklyn also increased year-over-year, the report said. This month, The Real Deal mapped out all of the major Manhattan and Brooklyn for-sale buildings with at least ﬁve sponsor units still on the market. We found around 55 buildings in Manhattan, and roughly 20 in Brooklyn. We also took stock of the projects currently in the pipeline and slated to hit the market in the next several years. The condos on our list came from StreetEasy, which often receives advance information about upcoming new developments, as well as from brokers, developers and news reports. It’s tricky to pin down exact ﬁgures about units in the pipeline, since developers often keep details under wraps when a project is in the planning stages. But TRD’s analysis found more than 50 new condo buildings — roughly half in Manhattan and half in Brooklyn — some with hundreds of new units on the drawing board. The Marketing Directors put the number of condo units expected to hit the market in the next sev-

PROJECTS LAUNCHED THIS YEAR

The Citizen (29 units)

124 West 23rd Street Chelsea

ales launched in early April at the Citizen, a 16-story doorman condo building developed by Anbau Enterprises. But Anbau told The Real Deal last month that sales at the building had been temporarily suspended in order to complete construction at the property over the summer. Iva Spitzer, an executive vice president at the Corcoran Group, which is handling sales at the property, said it was difﬁcult to market the building with no units to show prospective buyers. Sales will relaunch in September, a spokesperson for the developer said, with prices ranging from $650,000 to about $4 million. The project is currently 45 percent sold, according to Stephen Glascock of Anbau.

The Abingdon (10 units) 607 Hudson Street West Village

lank Architects purchased this former nursing home for $33.3

ILLUSTRATION FOR THE REAL DEAL BY KATHRYN RATHKE

PROJECTS LAUNCHED THIS YEAR OR PROJECTS WITH SPONSOR UNITS STILL ON MARKET PROJECTS IN THE PIPELINE

MANHATTAN

BY KATHERINE CLARKE ew development condos have been in the spotlight recently, thanks in part to the success of Extell Development’s One57. In May, Extell announced that the building (after hitting the market six months earlier) had sold 50 percent of its units, and had reached a milestone of $1 billion in sales. The 90-story glass tower, which topped off last month, also announced that one of its penthouses had sold for somewhere between $90 and $100 million, a new high mark for condo prices in New York City. Extell president Gary Barnett told The Real Deal that the lack of new construction in the last few years has helped drum up demand for his project. “For the next couple of years, we’re probably the only game in town — especially for that kind of quality,” he said. But One57 isn’t the only new development in the city doing well. The median listing price for new development condos in Manhattan grew by 10 percent in May to $1.49 million, up from the same period of last year, according to a report released

eral years at about 5,580. In contrast, around 7,500 new condo units per year are absorbed in the city annually, according to the ﬁrm. As a result of this inventory shortage, prices are expected to rise for all condos, new and old. “There’s not a whole lot of people going crazy [building new developments,]” Barnett added. “It’s not easy to get projects done. It’s not easy to get ﬁnancing. The leverage levels are way down.” Extell, he noted, has several projects in the pipeline, including the 68-unit Helmsley Carlton House, a former hotel property set to return as a luxury condo in 2013. Read on for a closer look at the Manhattan and Brooklyn buildings that hit the market in 2012, and a sneak peak at what’s coming down the pike.

million last January and converted it into condos. Two penthouses, priced at $21 million and $19.5 million, hit the market in April, and six of the building’s other units came on the market last month. The decision to bring the top-tier apartments to the market ﬁrst was made to allow prospective penthouse buyers to customize their apartments (and possibly combine units) before other buyers came in, according to Tim Crowley, managing director at Flank. The two penthouses are both in contract for close to their asking prices, Crowley said. The remaining condos, which are nearing completion, are all larger than 3,200 square feet. The smallest, which is 3,263 square feet, is asking $8.75 million. The largest, which is 3,537 square feet, is on the market for $10.75 million. Meanwhile, two ground-ﬂoor units at the base of the building will hit the market this fall, Crowley said.

end of last month. Sales in the 51-unit building so far have averaged approximately $1,396 per square foot, for a total of $31 million, according to Corcoran Sunshine, the exclusive marketing agent for the property. Construction is currently underway, with occupancy slated for fall 2013. Developed by Alfa Development — the team behind the fast-selling, 36-unit Village Green at 311 East 11th Street — the project is comprised of one-, two- and three-bedroom apartments, in addition to a four-bedroom penthouse with a private roof terrace. In March 2011, Alfa bought the land — which included the four brownstones that used to sit on the site — and development rights from Extell for $17.14 million. The property has incorporated green technology into its designs, including energy-efficient dishwashers and water-conserving faucets.

Chelsea Green (51 units)

The Arman (8 units)

151 West 21st Street Chelsea

helsea Green, a 14-story condo, hit the market in late May and was already 50 percent sold by the

482 Greenwich Street Soho

ales launched in February at the Arman, a boutique nine-story condo under construction on the site

www.TheRealDeal.com July 2012 49

MANHATTAN NEW DEVELOPMENT of what was previously the studio of the late painter and sculptor Arman. The eight-unit, Karl Fischer–designed building now has only three units remaining, according to developer Ben Shaoul of Magnum Real Estate Group. The building, which is scheduled for occupancy in the fall, features full-ﬂoor, three-bedroom units of approximately

2,470 square feet. The remaining units are priced from $3.9 to $6 million. According to the Wall Street Journal, Arman’s wife gave Magnum the land in 2005, a year after the artist’s death, in exchange for several residences at the building as well as a parking space. The building is being marketed by Leonard Steinberg and Hervé Senequier

PROJECTS WITH SPONSOR UNITS STILL ON THE MARKET IN MANHATTAN

Name

Neighborhood

Total units

Manhattan House, 200 East 66th Street

Upper East Side Midtown

581 580 442

The Shefﬁeld, 322 West 57th Street 99 John Street Trump Soho, 246 Spring Street

Financial District Soho

391

Financial District Upper East Side

349 330 319

225 Rector Place

Financial District Battery Park City

289

The Rushmore, 80 Riverside Boulevard

Lincoln Square

271

The Visionaire, 70 Little West Street

Battery Park City Financial District Battery Park City

246 223 174

Upper West Side Central Harlem

161 160

Financial District Lincoln Square

159 150

Yorkville Flatiron

128

Upper Carnegie Hill Tribeca Gramercy Park Clinton

116 106 98 95

75 Wall Street 515 East 72nd Street William Beaver House, 15 William Street

123 Washington Street 1 Rector Park, 333 Rector Place The Apthorp, 390 West End Avenue 5th on the Park, 1485 Fifth Avenue The Setai Wall Street, 40 Broad Street The Aldyn, 60 Riverside Boulevard Azure, 333 East 91st Street 254 PAS at 254 Park Avenue South One Museum Mile, 1280 Fifth Avenue 250 West Street Tempo, 300 East 23rd Street Grifﬁn Court, 800 10th Avenue One57, 157 West 57th Street 845 West End Avenue 2280 Frederick Douglass Boulevard Reade57, 57 Reade Street The Dillon, 425 West 53rd Street

Midtown Upper West Side Central Harlem Tribeca Clinton

123

92 91 89

of Prudential Douglas Elliman. (See related story on page 34.)

225 Rector Place

(289 units)

Battery Park City

merging from years of controversy, the 289-unit condo conversion at 225 Rector Place returned to the market in May after a three-year hiatus. Approximately 180 units are now on the market, priced between $475,000 and $1 million, with 12 more penthouses being held back till the fall. The Related Companies ﬁrst constructed the property in 1985 as a rental, then in 2005 sold it to developer Yair Levy, who planned to convert it to a condo. But Levy defaulted on his loans and the condo buyers there sued him over incomplete construction. As has been widely reported, Related bought the building out of foreclosure last summer for $82.8 million. As The Real Deal previously reported, a state Supreme Court judge ordered Levy last August to pay $7.4 million in restitution to the condominium, and permanently banned him from selling real estate in New York State after he was found guilty of spending millions of dollars of the building’s reserve fund money on personal and general business expenses. Under Levy, 25 percent of the units in the building were sold. In the month since Related restarted sales, the company has sold an additional 10 percent of

84 83 76 68

151 West 21st Street Chelsea Modern, 447 West 18th Street

West Chelsea

51 47

93 Worth Street

The Centurion, 33 West 56th Street River Ridge, 78 Ridge Street

Midtown Lower East Side

47 46

250 East 57th Street

2130 Adam Clayton Powell Boulevard

Central Harlem

Observatory Place, 353 East 104th Street

Isis, 303 East 77th Street

East Harlem Midtown Chelsea Central Harlem Upper East Side

46 41

124 West 23rd Street

Chelsea

42 West 120th Street

Central Harlem Chelsea

Lower East Side Odell Clark Place I, 2373 A. Clayton Powell Blvd. Central Harlem Flatiron 323 Park Avenue South West Chelsea 422 West 20th Street Odell Clark Place II, 108 West 138th Street Central Harlem Spice Warehouse, 481 Washington Street Soho Central Harlem 411 Manhattan Avenue

24 18 16 15 15 11

Soho Mews, 311 West Broadway 1200 Fifth Avenue 1212 Fifth Avenue Walker Tower, 212 West 18th Street

Cassa Hotel and Residences, 70 West 45th Street

422 West 20th Street The Morellino, 159 West 118th Street

Carriage House Chelsea, 159 West 24th Street

115 Norfolk Street

607 Hudson Street The Mark, 25 East 77th Street 523 Canal Street 52 Laight Street

West Village Upper East Side Soho Tribeca

63 53 50

37 36 35 32 29 24

10 10 9 8 7

Source note: Data is from StreetEasy and from The Real Deal research. Only condo projects with at least ﬁve units for sale on StreetEasy were included. Includes projects launched so far this year.

50 July 2012 www.TheRealDeal.com

422W20 (36 units) 422 West 20th Street Chelsea

t press time, there were only six units remaining at 422W20, the 36-unit condo developed by the Brodsky Organization, according to Corcoran Sunshine, the exclusive marketing agent for the building. The project — which is just two blocks from Brodsky’s Chelsea Enclave — hit the market in March. The building, which was most recently used as a dormitory for married General Theological Seminary students, is slated to be ready for occupancy by the end of the summer. The project includes one- to threebedroom units ranging from $640,000 to $2.1 million. It has been selling quickly, thanks in part to its relatively affordable prices compared with other developments in the High Line–adjacent neighborhood, according to recent news reports. Outside of this project, there are currently only 10 one-bedrooms on the market in Chelsea priced for less than $750,000, according to StreetEasy.

Walker Tower (50 units) 212 West 18th Street Chelsea

Continued on page 85

PROJECTS IN THE PIPELINE IN MANHATTAN

Turtle Bay Soho Upper Carnegie Hill Upper Carnegie Hill Chelsea Chelsea

The Alexander, 250 East 49th Street

the units, to reach a total of 35 percent sold, a spokesperson for the developer said.

Total units

Name

Expected sales launch

1107 Broadway

TBA 2016

145 128

Summer 2012 2012 2012 2012

110 98

50 East 57th Street The Madison Jackson, 371 Madison Street

150 Charles Street 101 West 87th Street 221 East 13th Street Helmsley Carlton House,680 Madison Avenue

11 Second Avenue 35 West 15th Street 200 East 79th Street 345 West 14th Street The Charles, 1355 First Avenue 250 Bowery 455 West 20th Street The Chocolate Factory, 325 West Broadway

11 North Moore Street 508 West 24th Street 67 Liberty Street 290 West Street 227 East 7th Street 213 Sullivan Street 552 West 24th Street 135 East 79th Street 241 Fifth Avenue Printing House, 421 Hudson Street

96 95

TBA Spring 2013

93 82

2013 2013 September 2012 Fall 2012

68 64 58 45

2013 2013

37 32

Summer 2012 2012 2012 TBA

24 23

Fall 2013 Summer 2012 TBA Summer 2013

20 20 15 14 13 6

2012 January 2013 2012

TBA TBA TBA

2012 2012

TBA TBA

Source note: Data is from StreetEasy and from The Real Deal research. Only projects expected to have at least ﬁve total units were included.

B R O O K LY N N E W D E V E LO P M E N T PROJECTS IN THE PIPELINE IN BROOKLYN

PROJECTS WITH SPONSOR UNITS STILL ON THE MARKET IN BROOKLYN

Name

Neighborhood

The Edge – North, 34 North 7th Street

Williamsburg Brooklyn Heights

One Brooklyn Bridge Park, 360 Furman Street

Oro, 306 Gold Street BellTel Lofts, 365 Bridge Street Toren, 150 Myrtle Avenue

Downtown Brooklyn Downtown Brooklyn Downtown Brooklyn Cobble Hill

Total units

Name

Expected sales launch

565 437 303

500 Metropolitan Avenue

2014

388 Bridge Street

250

367 Wythe Avenue

240 180

202 8th Street

Spring 2013 Summer 2012 Summer 2013 September 2012

The Bradford, 1560 Fulton Street

Total units 234 144 105 84 51

83 67

91 Grand Avenue

The Waterfalls on Ocean, 1130 Ocean Avenue

Bedford-Stuyvesant Ditmas Park

September 2012 September 2012

29 MacDonough Street

2013

205 Water Street

Dumbo

503 Flushing Avenue

133 Water Street

Dumbo Bushwick Dumbo

52 49 45 38

260 North 9th Street

TBA TBA 2013 Summer 2012 Summer 2012

23 20 18 18

251 Columbia Street

33 28

251 South 3rd Street

21 19 10

199 South 1st Street

2013 TBA TBA TBA

Cobble Hill Towers, 419 Hicks Street The Shelton, 775 Lafayette Avenue

The Knick, 314 Knickerbocker Avenue Kirkman Lofts, 37 Bridge Street Love Lane Mews, 9 College Place 20 Henry Street The Venetian, 447 Avenue P

Brooklyn Heights Brooklyn Heights

122 Adelphi Street

Midwood Clinton Hill Crown Heights Fort Greene

29 Montrose Avenue

Williamsburg

The Carlton, 82 Irving Place Collection Apartments, 904 Paciﬁc Street

Source note: Data is from StreetEasy and from The Real Deal research. Only condo projects with at least ﬁve units available for sale on StreetEasy were included. Includes projects launched so far this year.

PROJECTS LAUNCHED THIS YEAR

20 Henry (38 units) 20 Henry Street Brooklyn Heights

eveloper Urban Realty Partners and its equity partner, insurance giant AIG, started converting this former candy factory to condominiums in 2007. But Urban defaulted on its loan from Bank of New York, and AIG collapsed during the ﬁnancial crisis. Then in 2010, Canyon-Johnson Urban Fund, the development team that includes NBA legend Magic Johnson, bought the stalled project, according to public reports. Bank of New York sold the note to Canyon-Johnson at a roughly 25 percent discount off the unpaid loan balance. It is not clear exactly how much Canyon-Johnson paid. But sales started in February and, at press time, 25 of the project’s 38 units were in contract, according to Stribling & Associates, which is handling sales in the building. The project is slated for completion later this year, with closings expected to begin in late summer. “Current sales are averaging more than $1,000 per square foot, and four of the six penthouses are in contract,” said Michael Chapman, an executive vice president at Stribling.

Fino 122 (19 units) 122 Adelphi Street Fort Greene

ew Fort Greene condo Fino 122 launched sales in February. The 11-story property is comprised of one-, two- and three-bedroom units with price tags ranging from $295,000 to $3.3 million.

The building, developed by Fort Greene resident and Venezuela native Antonio Calvo, is more than 15 percent sold, according to Halstead Property Development Marketing, which is handling the sales. The project features private, keyed elevator access to all apartments, parking, a private roof terrace and a ﬁtness and recreation room. The project is Calvo’s fourth in Fort Greene. He told TRD that he ﬁrst acquired the site in 2005, but spent three years acquiring surrounding air rights before starting construction. The development was held up for another year because of an error on a document he submitted to the city Department of Buildings, he said.

290 Sackett Street

154 North 7th Street The Warren Lofts, 335 Warren Street 910 Union Street

145 McGuinness Boulevard 194 22nd Street 125 Waverly Avenue 76 North 6th Street 112 South 2nd Street 123 Fort Greene Place 217 Court Street 248 Dufﬁeld Street

32 30

15 10 10 8

2013 TBA

7 7

Fall 2013 TBA

TBA Summer 2012 January 2013

7 5 TBA

Source note: Data is from StreetEasy and from The Real Deal research. Only projects expected to have at least ﬁve total units for sale on StreetEasy were included.

decade after it was ﬁrst planned, the Venetian condo in the Midwood section of Brooklyn ﬁnally came on the market in May. As The Real Deal has reported, Sitt Asset Management (no relation to developer Joe Sitt) assembled the necessary parcels for the project in 2002 and 2003, with plans to bring a 54,000-square-foot project to the site. But due to a slow market during the recession, the developers delayed bringing

The Venetian (33 units)

447 Avenue P Midwood

BROOKLYN

PROJECTS LAUNCHED THIS YEAR OR PROJECTS WITH SPONSOR UNITS STILL ON MARKET PROJECTS IN THE PIPELINE

the project to market until now. The property, which was designed to look like a European Renaissance building, is being marketed by Elliman’s Avi Voda and Rachel Medalie. Interiors are by architect Costas Kondylis. According to Voda, there are contracts out on a couple of units, but none of them have closed yet.

29 Montrose Avenue (10 units) Williamsburg

partments at 29 Montrose Avenue started coming on the market last month. The condos range from a 507-square-foot one-bedroom asking $365,000, to a 1,061square-foot two-bedroom asking $659,000. The project — which is being developed by the investment fund Pros Management — was stalled for more than two years, due in part to ﬁnancing difﬁculties that arose from the debt crisis. It’s being marketed by aptsandlofts.com. David Maundrell, president of aptandlofts.com, said Pros Management had also developed 189 Greenpoint Avenue and 121 Kingsland Avenue, both in Brooklyn. Maundrell added that 50 percent of 29 Montrose is already in contract.

SELECTED PROJECTS IN THE PIPELINE

388 Bridge Street

(144 condos, 34 rentals)

Downtown Brooklyn Continued on page 85

www.TheRealDeal.com July 2012 51

TOP FIRMS

The Big Fish

BY C. J. HUGHES very year, The Real Deal publishes its much-anticipated ranking of the largest (and most prolific) residential real estate firms in New York City. But how do those firms, along with New York’s premier suburban brokerages, stack up on the national stage? This month, TRD examined a recently released ranking of the country’s 500 largest residential brokerages — published by the research company Real Trends — and came up with a detailed breakdown of how the New York–area firms on the list performed. Real Trends’ ranking, which used 2011 sales volume along with several other metrics, confirmed the often-repeated refrain that New York was spared the crushing fate the rest of the country met during and after the recession. But New York and its suburbs have continued to struggle, as lulls in activity have followed bursts of improvement. Consequently, the area’s largest firms have also seen their fortunes wax and wane. The New York region, and especially the New Jersey submarket, “slowed down like everyone else,” said Steve Murray, president of Real Trends. “They just don’t want to admit it.” Indeed, most of the major firms in the metropolitan area saw revenues decline in 2011 (albeit slightly), compared with 2010, according to Real Trends’ analysis. Many of the marquee firms in the area made the list, including NRT, the parent company to the Corcoran Group, Citi Habitats, Sotheby’s International Realty, Coldwell Banker and

1. CORCORAN GROUP: $12.7 BILLION

RT, Corcoran’s parent company, had a higher sales volume than any other ﬁrm in the country — even if its numbers were down from 2010. The mega company did $108.9 billion in sales in 2011 versus $112.8 billion the year before.

52 July 2012 www.TheRealDeal.com

And its darling brokerage, Corcoran, had a higher sales volume than any of its New York rivals, with $12.7 billion in sales in 2011 — about 11 percent of NRT’s total. But that, too, was a dip of 2 percent over its $12.9 billion haul in 2010, according to a breakdown provided to TRD by Real Trends based on Realogy data. (Figures

A look at the largest national residential brokerages, and how the biggest NYC-area ﬁrms ﬁt in

Century 21, among others. Prudential Douglas Elliman, William Raveis Real Estate and Houlihan Lawrence are also represented. But the ranking relied on companies to voluntarily submit their data, and some of New York’s biggest firms did not participate. For example, Terra Holdings — parent of Brown Harris Stevens and Halstead Property — opted out. Others, who looked less likely to make the list here — including Rutenberg Realty, Bond New York, NestSeekers, Town Residential, Bellmarc and Stribling & Associates — either declined to participate or told TRD that were never contacted by Real Trends. All of those New York firms that were not included declined to provide TRD with their 2011 sales volume figures or didn’t respond to our requests for comment. According to TRD’s own biggest-firms ranking last month, those brokerages all had a significant dollar volume of listings. For example, BHS had $2.7 billion in listings, Sotheby’s had $1.5 billion, Halstead had $845 million and Stribling had $584 million, to name a few. Also noteworthy is that the Real Trends list did not fold individual brands — such as Prudential, Keller Williams and RE/MAX — under one umbrella. Instead, it looked at their individual franchises. Of those who did participate, many said their fortunes have improved in the first six months of 2012 after last year’s declines. Below is a look at some of the most active New York City and metro-area firms that made the list.

for NRT’s other ﬁrms, including Citi Habitats and Sotheby’s, were not available.) “We’re excited to be at the top of the list,” said Pam Liebman, the president of Corcoran, which has 2,000 agents and 45 ofﬁces in New York City, the Hamptons and Florida. NRT is a subsidiary of Parsippany,

N.J.–based Realogy, which was involved in 26 percent of all national home sales in 2011. However, Realogy has had a mixed track record since the ﬁnancial crisis. Domus Holding Corp., the arm of Apollo Global Management that owns Realogy, along with hedge fund Paulson

www.TheRealDeal.com January 2011 25

TOP FIRMS & Co. has reported net losses every year since 2008. (Apollo, a leveraged buyout firm, bought Realogy at the beginning of the downturn for $6.6 billion and took it private. It also saddled itself with debt in the process.) Those losses at Domus continued into this year, according to news reports. J.P. Morgan Securities reported last month that the company was spending $360 million a year on interest payments to service its debt. Still, relief may be in sight. Domus filed the paperwork last month required to take Realogy public, a move that might raise $1 billion. That could retire some of Realogy’s debt and provide capital to allow the firm — and perhaps Corcoran — to grow, James Krapfel, an equity analyst with research firm Morningstar, told The Real Deal. And although the IPO market is weak at the moment, the actual offering will likely not be issued until the fall, when the climate could improve, Krapfel added. That IPO could lower Realogy’s monthly expenses by $300 million a year, J.P. Morgan’s report stated. But investors need to like the stock, and “the appetite for debt-laden companies is low,” Krapfel said. Investors tend to view such debt as “a bit of a red flag, implying that [the company’s] valuation won’t get much better,” he added.

Elliman brand is so well-established, it doesn’t need a national parent to boost business. And the ﬁrm will also no longer have to pay the fee (reported to be 6 percent of all transactions) that being a franchisee requires, which could help cushion

2. PRUDENTIAL DOUGLAS ELLIMAN: $11.1 BILLION

ast year, this Westchester-focused firm hauled ZipRealty $3.3 billion in $3.3 billion, versus $3.4 billion the previous year, a 3 Houlihan Lawrence $3.3 billion percent drop. Coldwell Banker Bain & Coldwell Banker Seal $3.3 billion Why? Home prices sank, by up to 10 percent, and Baird & Warner $3.1 billion the firm simply did not sell Better Homes and Gardens Real Estate Mason-McDuffie $2.9 billion enough homes to cover the difference, said Chris MeyAllen Tate Companies $2.7 billion ers, a principal of the Bronxville-based firm. *Source note: NRT is the parent company to Corcoran Group, Citi Habitats, Sotheby’s International Realty, Coldwell Banker and Century 21, among others firms. Corcoran logged $12.7 billion in sales volume in 2011, But Meyers said “the according to a breakdown provided to TRD by Real Trends based on Realogy data. market has really picked up considerably” since the numbers were collected last year, noting that prices have shot up 15 percent in the last six months. Meyers — who with his brother and sister bought the firm from the Lawrence Pam Liebman Dottie Herman Bill Raveis Chris Meyers family in 1990 — said the any blows if the housing market continues place finisher (see below), clocked a mas- company has 24 offices and 1,000 agents, its mixed performance, sources said. sive $1.7 billion in listings. about 30 of whom were added in the last While some firms became austere in year. Dottie Herman, Elliman’s president, the face of the recession, William Raveis The firm has shown that it dominates declined to comment. doubled down, increasing its agent head in Westchester. As mentioned above, ac3. WILLIAM RAVEIS REAL count from 2,200 in 2009 to 3,000 in cording to a TRD ranking in March 2011, ESTATE: $4.5 BILLION 2011, according to Bill Raveis, the firm’s the firm bested its competitors with $1.7 aveis, which has 35 offices in Con- founder. billion in listings — far more than the secThat was despite the fact that the cost ond-place firm, which had roughly $550 necticut and seven in Westchester, plus much of New England, was a rare to maintain those agents has been rising, million. bright spot in 2011, posting $4.5 billion in he said, noting that the company pays for Unlike Raveis, an emerging rival, Hourevenue. That was up from $4.4 billion in its brokers’ Internet marketing. (Brokers lihan generally has no goal to blitz other counties with new offices, Meyers said. 2010, a 3 percent uptick. cover their own direct mailing costs.) The success seems to have come mostRaveis added that a key to his firm’s Continued on page 94

rudential Douglas Elliman saw $11.1 billion in sales last year, though that was down from $11.5 billion in 2010 — a 3 percent dip. That loss came in a year of transition for the firm, which has 60 offices in New York City, Long Island, Westchester and Florida. A few of its top agents decamped for other firms in 2011, including Ilan Bracha and Efraim Tessler, who went to Keller Williams, and Tamir Shemesh, who went to Corcoran. Elliman saw a drop in listings and in dollar volume of listings in May 2011, when TRD conducted its annual top firm’s spread. But in this year’s top firms spread, it saw its listing totals increase by 13 percent and the value of those listings increase by 22 percent to $3.2 billion. (While the firm is a franchise, it’s an independent company and its sales volume figures do not include other Prudential franchises.) And as TRD reported last month, one move in particular is widely expected to boost the company’s fortunes further. According to sources close to the company, the firm will soon shed its affiliation with Prudential, ending a decade-old partnership. In giving up the “Prudential” part of its name, Elliman will relinquish a national agent network that’s said to generate leads from people relocating to New York. But many analysts say the Douglas PHOTOGRAPH MEYERS BY BRIAN BOULOS 28 MarchOF 2012 www.TheRealDeal.com

ly on the strength of the Fairfield, Conn.based firm’s non-Westchester business. Indeed, a TRD ranking of top Westchester firms last year put Raveis at No. 10 in the county with just $104 million in listings. By comparison, Houlihan Lawrence, the first-

success is an emphasis on mobile gadgets, like a new app for Android phones and iPhones that makes it easy for clients to navigate Raveis’s website, which the firm claims gets 10 million users per year. Also, he’s now redesigning his offices with fewer desks and more benches, “so it will look like a sort of Apple-store-meets-Kinko’s,” he said. The idea is to give agents a comfortable place to charge their smartphones Brokerages were among 500 the research company ranked and trade tips. “The chemistry of the real FIRM SALES VOLUME 2011 estate branches is changing,” said Raveis, a former NRT LLC (includes the Corcoran Group and other firms)* $108.9 billion systems analyst who foundHomeServices of America $31.2 billion ed the firm in 1974 above a Fairfield grocery store. The Long & Foster Companies $20.1 billion Plus, his firm wants to Prudential Douglas Elliman Real Estate $11.1 billion build on its recent push into Westchester with offices in Alain Pinel Realtors $7.2 billion Brooklyn and Manhattan, Prudential Fox & Roach Realtors $6.5 billion though a deal to buy Manhattan firm Bellmarc colHanna Holdings $5.4 billion lapsed last spring. William Raveis Real Estate $4.5 billion “We have a long-term view of being in the indusFirst Team Real Estate $4.2 billion try,” he said, “and reinvesting Coldwell Banker United, Realtors $4.2 billion back in the company is very important to us.”

Real Trends’ top 20 ﬁrms nationally — based on 2011 closed sales

Ebby Halliday Real Estate

$3.8 billion

Crye-Leike Realtors

$3.5 billion

Intero Real Estate Services

$3.4 billion

John L. Scott Real Estate

$3.3 billion

4. HOULIHAN LAWRENCE: $3.3 BILLION

www.TheRealDeal.com July 2012 53

8 BR, 7 BATH WEB ID: 707846

60 EAST 66TH STREET - TH

2 BR, 2.5 BATH WEB ID: 726385

28 LAIGHT STREET

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277 WEST END AVENUE

$19.25 M

3 BR, 2.5 BATH WEB ID: 400805

155 FRANKLIN STREET

$4.1 M

1 BR, 1.5 BATH WEB ID: 112881

32 MORTON STREET

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110 Fifth Avenue New York, NY 10011 212.633.1000

730 Fifth Avenue New York, NY 10019 212.242.9900

88 Greenwich Street New York, NY 10006 212.269.8888

45 Horatio Street New York, NY 10014 212.604.0300

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Launching March 2012!

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

8 BR, 7 BATH WEB ID: 707846

60 EAST 66TH STREET - TH

2 BR, 2.5 BATH WEB ID: 726385

28 LAIGHT STREET

3 BR, 3 BATH WEB ID: 239306

277 WEST END AVENUE

$19.25 M

3 BR, 2.5 BATH WEB ID: 400805

155 FRANKLIN STREET

$4.1 M

1 BR, 1.5 BATH WEB ID: 112881

32 MORTON STREET

$8,500

$3.595 M

2 BR, 2 BATH WEB ID: 785272

88 GREENWICH STREET

$4,900

$16,500

We define our neighborhoods as much as they define us.

110 Fifth Avenue New York, NY 10011 212.633.1000

730 Fifth Avenue New York, NY 10019 212.242.9900

88 Greenwich Street New York, NY 10006 212.269.8888

45 Horatio Street New York, NY 10014 212.604.0300

26 Astor Place New York, NY 10003 212.584.6100

Launching March 2012!

PROFILE

Wells Fargo-go-go

The nation’s largest mortgage lender is aggressively trying to increase its share of the NYC market

BY LEIGH KAMPING-CARDER f you’ve recently helped a New York City homebuyer lock in a mortgage, there’s a good chance you worked with Wells Fargo. As the largest mortgage lender in the United States, Wells Fargo has recently attained an unprecedented grip on the home loan business, originating 33.9 percent of all mortgages in the country in the ﬁrst quarter of 2012, according to widely cited ﬁgures from the trade publication Inside Mortgage Finance.

based investment bank Tangent Capital Partners. That engine is also powering New York City, where Wells Fargo’s dominance is arguably even more pronounced. While local data on mortgages is hard to ﬁnd, some estimate that the bank now accounts for as much as 50 percent of the residential mortgage market here. (A Wells Fargo executive said that estimate seemed “very high,” but that the company could not provide its own alternative estimate.) Not only has the bank forged partnerships with some of

That’s more than triple the share of its closest competitor, JPMorgan Chase, which accounted for 10 percent. Nationwide, as competitors bruised by the subprime mortgage crisis have curtailed their home loan activities, Wells Fargo has embarked on an aggressive lending strategy to generate revenue for shareholders. Among U.S. banks, Wells Fargo is “the engine right now for real estate,” said Christopher Whalen, a columnist for the real estate publication Housing Wire and senior managing director of Manhattan-

New York City’s biggest brokerages in recent years — including Prudential Douglas Elliman, Brown Harris Stevens and Halstead Property — it has also marshaled its vast balance sheet to lend at “nonwarrantable” buildings, which often scare away lenders because they do not meet Fannie Mae guidelines for mortgage purchases. “Everybody says ‘Wells Fargo’ — they’re on the tip of everybody’s tongue,” said Howard Morrel, a senior vice president with Brown Harris Stevens who often works with the bank, noting that it has

56 July 2012 www.TheRealDeal.com

“[Wells Fargo is] the engine right now for real estate.” CHRISTOPHER WHALEN, TANGENT CAPITAL PARTNERS a reputation for having the lowest interest rates available. Partly because of low rates on jumbo loans, Manhattan Mortgage managing director Debra Schultz estimated that Wells funds about half the mortgages she arranges. Indeed, sources said that Wells Fargo can undercut its competition by half a percentage point because of the large pool of funds it has from depositors with lowinterest savings accounts. Wells is “using [its] funding advantage and the need to generate revenue [for shareholders] as a big hammer in the marketplace today,” Tangent’s Whalen added. Still, in the aftermath of the subprime lending crisis, some observers are wary of any “too big to fail” ﬁnancial institution gaining

fourth-largest bank in the country after Chase, Bank of America and Citibank, according to news reports and SEC filings. However, while Wells was founded in San Francisco in 1852, it’s actually a relative newcomer to the New York City retail banking scene, although its homeloan operations have been here since 1998 when it merged with Norwest Corp. The lender established its first New York City branches in 2009, when it bought the failing bank Wachovia, along with its 22 locations in Manhattan and the Bronx. Wells now employs 96 mortgage lending professionals in New York City, led by Eric Gotsch, who oversees the bank’s retail home loan business in New York and Connecticut. Gotsch’s team funded more than $2 billion in home loans locally in the first half of 2012 — about 40 percent for home purchases and 60 percent for refinanc-

a stranglehold over the marketplace — particularly an institution so heavily invested in the housing market. “It’s never good when one company has too much,” said Rolan Shnayder, director of new development lending at H.O.M.E., a mortgage bank that writes its own home loans, but sells some of those to bigger lenders, including Wells. “That’s not good for anybody.”

ings, he said. That puts it on track to surpass 2011’s $3.4 billion in home loans by the end of the year. Statewide, Wells originated about $5.7 billion in the ﬁrst quarter, up from $5.1 billion a year ago, according to the bank. By contrast, BofA’s local mortgage operation employs 50 people, according to Bob Donovan, the bank’s regional mortgage executive in New York. Citibank’s local branches employ 65 home loan specialists, although the bank has partnerships with an additional 50 mortgage professionals, a spokesman said.

On the books Headed by CEO John Stumpf, Wells has $1.3 trillion in assets, making it the

www.TheRealDeal.com January 2011BONO 25 ILLUSTRATION BY PETER

PROFILE Donovan declined to comment on the volume of BofA’s mortgage originations in the city, although nationally the bank issued $15.2 billion in home loans in the first quarter of 2012, according to its most recent quarterly financial report. Citibank also could not provide regional volume figures. Nationally, Wells funded $129 billion worth of first mortgages in the first quarter of this year, according to its most recent financial report. The bank also reported that income from mortgage banking had reached $2.87 billion, up 42 percent from the same period last year. Of course, some of that growth is the result of an industry-wide increase in mortgage lending and conditions (historically low interest rates and historically high rents) that favor home purchases. Additionally, Gotsch attributed some of the growth of Wells Fargo’s mortgage origination business to its focus on encouraging referrals and converting depositors to borrowers. But the bank has also taken what Gotsch called an “in-depth approach to new construction condominiums,” working with developers and condo boards to turn buildings into better prospects for lending to homebuyers. In recent years, Fannie Mae has stepped up enforcement of guidelines determining what it considers to be a safe investment. However, these federal rules are often an odd fit for New York City, where otherwise financially sound buildings could be deemed risky if, for example, a commercial space takes up more than 20 percent of a building. In some cases, lenders will work with developers in the early stages of new construction to ensure a project will eventually be “warrantable.” “Wells Fargo, in particular, was very aggressive in going into new developments,” said Robert London, a private mortgage broker at Manhattan-based lender Thomas Funding Group, which issues both residential and commercial loans. Lenders — such as Bank of America, H.O.M.E and Astoria Federal Savings Bank — will also determine whether older, nonwarrantable buildings are financially sound in order to issue mortgages to buyers, regardless of whether the building meets Fannie Mae’s checklist. Indeed, BofA recently announced that it would no longer sell loans to Fannie Mae. But in this arena, Wells Fargo has earned a reputation for being more flexible than its big-bank peers, sources said. For example, Metropolitan Tower does not meet Fannie Mae’s requirement that buildings set aside 10 percent of common charges each year for a reserve fund, according to Brown Harris Stevens’s Morrel and his colleague, Leslie Hirsch, who frequently broker deals in the 235-unit condo building at 146 West 57th Street. Wells Fargo is footing the bill for an evaluation BANK PHOTOGRAPH BY ANDREA CETRA

28 March 2012 www.TheRealDeal.com

so the bank can waive that requirement and start lending there, they said. “When you have an active lender like that, it’s fantastic, because they actually go out and try to get these developments

Loans division will continue servicing existing loans). Wells Fargo has “ﬁlled the void” left by the disappearance of these lenders, said Jonathan Miller, president of appraisal

with customers. The move followed a similar announcement by BofA in 2010 and from Chase in 2009. Banks are somewhat hesitant to work with mortgage brokers, whose reputations have taken a beating in the wake of the housing crash, sources said. Plus, closing down those channels may avoid red tape and allow them to focus on finding borrowers among their existing clients. Chase did not return a request for comment. But ending relationships with mortgage brokers also shuts off a method of reaching customers, sources said. After all, to get a home loan, many borrowers start by calling a mortgage broker, Whalen noted. In October, BofA took the additional step of cutting off ties with correspondent lenders — smaller lenders who issue mortgages themselves, but then sell the loans to other, bigger lenders. Since then, BofA’s mortgage originations have dropped 73 percent year-over-year, according to the bank’s most recent quarterly financial report. “The more channels that banks have to originate business from, the more business that they’re going to get,” said H.O.M.E.’s Shnayder, estimating that as a correspondent lender he sells about 30 percent of his loans to Wells, amounting to roughly $5 billion over the years. Meanwhile, Wells loaned $68 billion through its wholesale and correspondent lending channels in the first quarter of 2012, nearly double what it did in the same period last year, according to its last financial report. It loaned $61 billion through its retail channel, or about 24.5 percent more than a year ago. Despite its competitors’ moves, Wells remains “commitTop: Depositors have helped fuel Wells Fargo’s mortgage business. Bottom, from left: Eric Gotsch oversees Well Fargo’s ted” to its wholesale and correretail home loan business in New York; Wells Fargo CEO John Stumpf; and Wells Fargo investor Warren Buffett. spondent lending business, a compliant,” said Orest Tomaselli, CEO of firm Miller Samuel. He added that in a bank spokesperson said in a statement. At the same time, Wells has made alWestchester-based National Condo Ad- short period of time, Wells went from bevisors, which helps ensure buildings are ing “not a factor” in New York to becom- liances with local residential brokerages, compliant with federal guidelines. Toma- ing “a dominant player in the market.” including a “marketing relationship” with Described by experts as an aggressive Terra Holdings, which owns Halstead and selli has worked with a number of New but careful lender, Wells is also keeping Brown Harris Stevens. Both the firms and York City developments. its relationships with mortgage brokers Wells declined to comment on specifics, Rivals on the retreat intact at a time when other big banks but sources told TRD that brokers get Wells has also benefitted from a market- — some of which suffered steeper sub- informational presentations from Wells place that consolidated during the eco- prime losses — are shutting them down, bankers, while the bank no doubt benefits nomic crash, when rivals like Country- sources said. from referrals, as well as having its logo wide Financial and the Independent NaIn February, Citibank said it would displayed on the firms’ websites. Coincidentally, Halstead’s executive tional Mortgage Corp., better known as shutter its wholesale lending division, efIndy Mac, fell apart. fectively ending its work with mortgage director of development marketing, SteAdditionally, this year the insurer brokers, to focus on retail and other chan- phen Kliegerman, is married to a private MetLife Inc. left the mortgage origina- nels, “which have the highest opportuni- mortgage banker at Wells. Kliegerman tion business (although its MetLife Home ty of increasing long-term engagement” Continued on page 90 www.TheRealDeal.com July 2012 57

ARCHITECTURE REVIEW

JA M E S G A R D N E R

Frozen in time

Envisioning the future of New York is “more of the same”

here is a certain building on East 79th Street — I will not single it out by name, but it’s closer to the East River than to Central Park — that is so ugly as to fill all decent and sensitive souls with a feeling of reflexive loathing. Doubtless it is pleasant enough to inhabit, largely because, as long as you are inside it, you cannot see the unlovely exterior of the building. It is also in a good and desirable location. The problem is that it will stand there, a hulking high-rise, more or less forever. Perhaps in a billion years or so, the great world will split asunder, and the primeval ooze will reassert its dominion over the Eastern seaboard, taking all of Manhattan with it, including that high-rise. Beyond that eventuality, however, it is hard to see how any force of God or man — or any urbanistic development or legal or financial instrument — will bring down that appalling late Modernist slab. The reason for this is obvious. The building is a condo with hundreds of units. In order for it to be replaced with something bigger or better, you would have to secure the compliance of every last one of those hundreds of owners, and that unanimity, surely, is never going to happen. For this reason, that tasteless structure, which was so thoughtlessly raised as a rental back in the 1970s — when co-op conversion was really only getting started — will remain there as long as its material condition allows. Such inflexible longevity was not always a given. It used to be that (notwithstanding the permanence of structures in Europe or the Middle East, by which I mean the Colosseum or the Great Pyramids) in North America, and especially in Manhattan, each building came with an implicit, albeit invisible, expiration date. Many a new building rose over the vanquished ghosts of one, two or even three earlier structures. The architect and the developer of any new building, therefore, could expect that even their latest development would be coming down in the fullness of time. And given the eagerness of New York developers to build ever higher, especially during the middle years of the last century, this expectation seemed to be a very plausible prospect. Indeed, as columnist Christopher Gray recently wrote in the New York Times, 58 July 2012 www.TheRealDeal.com

there was even talk, in the early 1960s, of tearing down the Dakota — which was a rental at the time — in order to build something as big and awful as the Mayfair Towers, that ugly building that arose just west of it at 15 West 72nd Street. Today, of course, that could never happen — and not only because of the existence of the Landmarks Preservation

does arise will ever be replaced. All of this brings us to several rather dismal conclusions. First, while urban planners and sci-ﬁ novelists have conjured up phantasmagoric visions of how the cityscape will look, the future of New York is not, or should not be, a mystery to anyone. It will look a lot like what it is today. Between the land-

standing a few well-placed and incremental changes that are ongoing — the overall cast of the city has been immobilized in the style of an earlier era and will not change. The unique challenge that New York faces is that its buildings are, for the most part, very different from those of Paris or Venice. The charm that attaches to

Commission. There are too many stakeholders in any sizable condo or co-op building in Manhattan for it ever again to be likely that such a structure, once up, will be taken down. (Even if all the residents are renters, the prospects of change to a large existing tower — especially one subject to rent stabilization — would be very slight.) In addition, thanks to present zoning laws and to the nature of the real estate market — both of which, in theory, could change — most buildings have reached their maximum allowable height, which means that even if they could be torn down, there would be limited incentive to do so. That is the case with many buildings along Manhattan’s major avenues, while the row houses and brownstones on side streets are increasingly being landmarked. For such reasons, among others, it is becoming increasingly unlikely that a large building, whether residential or commercial, will be coming down soon or that, hereafter, any such building that

marking of smaller residential buildings, and the collective ownership of the larger ones, most of what you see now will still be standing a century on. It may be that because of the inevitable repairs that will be required, buildings will be reclad to reﬂect a more updated style. We have seen this already with the laborious conversion across the Upper East Side of white-brick buildings of the postwar period to somewhat more contextual and historicist buildings clad in red brick. It is also possible that owners will be allowed to add a few penthouse stories to existing buildings. And it does, indeed, occur on occasion that existing structures are torn down. But these types of changes are incremental and bear little resemblance to the wholesale architectural transformation that seemed to wash over Manhattan at generational intervals up until perhaps the 1990s. From now on, Manhattan’s building stock is more apt to recall that of Paris and Venice, where — notwith-

the older buildings of those two cities will never apply to ours, first because our buildings are mostly drabber than theirs, and then because the great majority of our buildings — at least south of 86th Street — are Modernist and Modernistinspired. And buildings in that style — I believe uniquely in the history of architecture — are vitiated rather than improved by the passage of years. If there is any good news in all of this, it is that Manhattan is nowhere near the saturation point in regards to new developments. There are many spaces throughout the city (especially in places like the Far West Side, Inwood and the Lower East Side, not to mention the outer boroughs) that are comparatively underdeveloped. Even in midtown, there are parking lots that are being transformed or will be soon. The problem is not finding lots for new development: The problem is the increasing difficulty of pulling down anything that has ever gone up. TRD ILLUSTRATION FOR THE REAL DEAL BY PETER BONO

© 2012 BRER Affiliates Inc. An independently owned and operated broker member of BRER Affiliates Inc. Prudential, the Prudential logo and the Rock symbol are registered service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide. Used under license with no other affiliation with Prudential. Equal Housing Opportunity.

In today’s real estate world, influence and access to the best resources are essential for success. As New York’s most trusted real estate brand with the largest global network, our brand-new, state-of-the-art location at 774 Broadway will offer the industry’s most innovative tools and a beautiful work environment for those looking to take their real estate career to new heights. Contact Gary Cannata for a confidential interview: gcannata@elliman.com or 212.995.5357.

PR O F I L E

From Canada,with love

Newbie NYC commercial ﬁrm Avison Young is racking up brokers; now it’s looking to close some deals

BY ADAM PIORE reg Kraut’s Park Avenue ofﬁce isn’t your typical executive suite. The rented space is about the size of a small restaurant coat-check room, and Kraut shares it with a secretary and his ofﬁce manager. When the 36-year-old commercial broker left a secure position at CBRE to

ing for ﬁnal approvals on the deal.) And it looks like he’s going to need the extra space. Between April and June, Avison Young’s New York City staff ballooned from three to 24 (14 of whom are brokers). Kraut said he expects the head count to reach 50 by the end of the year. For months, however, the ﬁrm conducted its hiring largely under the radar,

QUICK COMPANY FACTS HEADQUARTER LOCATION: Toronto, Canada CEO: Mark Rose TOP NYC HIRES: Greg Kraut, Arthur Mirante NUMBER OF U.S. LOCATIONS: 13 NUMBER OF NYC STAFFERS: 24 (including 14 brokers)

From left: Avison Young’s Arthur Mirante, Mark Rose and Greg Kraut are building the company’s New York City ofﬁce.

open up Avison Young’s New York City headquarters last fall, he was the only local employee for the Canadian firm. So he rented space on a hallway of tiny temporary offices teeming with start-ups. On a recent morning, a lawyer could be heard conducting business via cell phone in a men’s bathroom stall. Down the hall, a team of staffers were fielding calls for a dating service. But a few years from now, Kraut insists, these humble beginnings will be the stuff of company lore. The fast-talking New Jersey native with salt-and-pepper hair — sporting Avison Young cuff links and a lapel pin — said he’s already close to securing long-term space for his rapidly growing team. (At press time, Avison had signed a sublease for a full floor at 623 Fifth Avenue, but was wait60 July 2012 www.TheRealDeal.com

refusing to publicly discuss its plans. Then in April, Avison hired former Cushman & Wakefield CEO Arthur Mirante to serve as tri-state president. Only then did the firm churn out its first local press release touting the official “opening” of the New York office. Mirante — who led Cushman for two decades and then did a stint as the firm’s president of global development — moved into an office down the hall from the dating service. His secretary set up a desk in Kraut’s closet-sized office. “Now [brokers looking to jump ship] are calling us,” Kraut said. “I meet with maybe 10 people a day. I take maybe one out of 50.” “We are here for the long run,” he added. “We will be a top firm in New York. It is not an option — it has to happen.”

A crowded field Avison Young was formed in 1996, when Graeme Young & Associates, which was founded in 1978, and Avison & Associates, founded in 1986, merged to form Canada’s largest independently owned commercial firm. For many years, however, the firm still consisted of three largely independent entities in British Columbia, Alberta and Ontario, owned and operated by three sets of partners. Then in 2008, the umbrella firm hired veteran U.S. real estate executive Mark Rose as CEO, and the 53 partners and 290 employees pooled their resources and merged into a more tightly integrated union with the goal of funneling the firm’s profits into a company expansion. Indeed, Rose launched an aggressive

push in 2009 to open outposts in the U.S. and build the firm into a global force. While he would not reveal exact figures, “Our revenue is already way over nine figures, or $100 million,” he said. And he insisted that number will continue to grow as the New York operation and other new offices across the country gain ground. But Avison is by no means the only bright-eyed commercial firm with big growth plans. Among those in expansion mode in New York are Lee & Associates, which opened its first New York office last November; investment sales firm Stan Johnson Company, which arrived in Manhattan last September; Brookfield Financial, which lured two long-time brokers from Eastern Consolidated to open an investment sales business in September; and www.TheRealDeal.com January 2011 25 PHOTOGRAPH FOR THE REAL DEAL BY CHRIS MARTIN

PR O F I L E Texas-based Transwestern, which opened up shop last February. Meanwhile, other existing ﬁrms are going through their own shake ups. Newmark Grubb Knight Frank was just refashioned after BGC bought Newmark Knight Frank and Grubb & Ellis. And Colliers International recently saw a leadership overhaul. Industry experts say the drop-in commissions that resulted from the down market has provided the best opening in

they must also distinguish their pitches from one another. In an interview with The Real Deal a little more than a year ago, Mark Jaccom — who was then the CEO of Colliers, but who stepped down late last year — touted his efforts to poach veteran brokers from rivals by distinguishing his ﬁrm’s culture and approach. “We weed out assholes,” said Jaccom, who joined the brokerage Cresa last month. He also stressed the ﬁrm’s well-

centive to operate as free agents. “We wanted a company where there was complete alignment — where [clients] are being served by people with ﬁnancial, reputational risk,” he said. “The cultural fabric is all about the partnership — we don’t have disputes over fees. [A broker’s] need for winning their percentage of the deal is mitigated by the fact that the year-end distribution and the increase in the equity value really dwarf people’s current compensation.”

Some of Avison’s hires...

David Eyzenberg, formerly of NewOak Capital

Justin Piasecki, formerly of the Carlton Group

Amy Levenson, formerly of Goldman Sachs

Michael Gottlieb, formerly of Grubb & Ellis

Martin Cottingham, formerly of Grubb & Ellis

Vincent Carrega, formerly of Grubb & Ellis

“We think that CBRE and JLL are too big. They have between 40,000 and 60,000 people, and everybody’s territory is so small right now and there is so much internal competition. That is not our model.” MARK ROSE, AVISON YOUNG years to lure top talent away from other firms. Also driving the upheaval is the growing number of foreign corporations opening New York offices, along with the continued proliferation of private equity firms and other financial players, said Dan Fasulo, managing director of Real Capital Analytics. “A lot of foreign capital flows through New York to other destinations around the U.S.,” Fasulo said. “As clients have gotten increasingly global, a lot of them are making [decisions about how to run U.S. divisions] in Manhattan. Brokerage companies want a beachhead in New York. They realize that to be a player, you have to have one.” But as these commercial brokerages attempt to establish themselves in the city, not only do they have to compete with the mega-firms that have more resources,

financed Canadian backer FirstService. Avison’s principals also play up their firm’s wealthy Canadian mother ship, which they said has zero debt, as well as their positive corporate culture. In fact, Kraut has a plastic cover over a chair in his office with the word “asshole” printed inside a red circle with a line through it. In a phone interview with The Real Deal, Rose mentioned his firm’s emphasis on “honesty” and “integrity” so many times, it would seem brokers at rival firms had been recruited out of prison. Both Rose and Kraut, however, insist it’s more than just lip service. They point out that Avison is run by its principals — a structure, they said, that ensures employees are invested in working together for the company’s overall fortunes. Rose argued that at firms owned by shareholders or outside investors, brokers have an in-

The case against As of press time, Avison’s New York office had not closed any deals. It had, however, been hired to represent several tenants looking for spaces ranging in size from 20,000 to 60,000 square feet, Mirante said, predicting that the firm would be closing those deals by midsummer. The firm has hired six office leasing brokers (who will handle both the tenant and agency sides of deals), and a ninemember investment sales team from Grubb & Ellis. Mirante said all of the brokers are currently in various stages of their initial deals. They have not yet hired any retail brokers, but are actively interviewing candidates, he added. Despite the lack of closed deals, many established New York brokers are watching the firm with interest. Still, they are hardly convinced Avison will

soon be a top player here. “There is nothing to think at this point,” said retail broker Bradley Mendelson, an executive vice president at Cushman. “They don’t have a very large presence, they don’t manage anything, they’re looking for brokers. If they are looking to lure powerhouses out of firms that are making money, they are going to have to pay a lot of money.” Still, he said, “Arthur Mirante is a smart guy; I wouldn’t discount anything. It all depends on who they can get.” Patrick Robinson, who opened Transwestern’s northeast regional office in New York a little more than a year ago, said that unlike Avison, his company already has solid U.S. roots. Avison has “no U.S. base of operations,” said Robinson, who founded and ran Staubach’s New York operations for 10 years before it merged with Jones Lang LaSalle in 2008. He has hired some 30 Transwestern brokers, but would not reveal revenue numbers for the privately held company. “We are a company that has had a national presence in the U.S. for 33-plus years, and we have a large existing client base.” Avison Young, he said, “is starting from ground one.” (According to the National Real Estate Investor, Transwestern did $6.5 billion in investment sales and leasing globally in 2011, while Avison did $2.8 billion.) But Avison is growing fast. Since its first foray into the U.S. in June 2008, it’s opened 13 locations in cities including Atlanta, Chicago, Dallas, Houston, Los Angeles, Reno, San Francisco and Washington, D.C. Yet some argue there’s only room for a few newbie commercial firms in New York. Cushman managing director Sandy Monaghan, who heads the firm’s capital markets group, noted that the New York market is “large enough that there is probably room for some new entrants,” but added that they are all “clearly jockeying for top talent” and not all will prevail. Even if some do, he still believes that firms like JLL, Cushman and CBRE have the edge. “The money flows through New York, but a lot of times it originates in Asia or Europe,” Monaghan said. “Global firms have a clear advantage.” In addition, Jeffrey Gural, chairman of Newmark Grubb Knight Frank, noted that the startup costs facing Avison may be prohibitively expensive. “It’s hard to start up a new company because the amount of infrastructure you need today to back brokers is very expensive,” he said. “Research and tech cost millions of dollars. That’s one of the reasons we haven’t really seen any of these smaller companies for the last few years make a big splash, with the exception of JLL, which had access to capital markets and Continued on page 86

www.TheRealDeal.com July 2012 61

RESIDENTIAL

Foreign buyers 101

Experts share secrets on avoiding cultural and ﬁnancial pitfalls when working with foreign buyers

BY KATHERINE CLARKE ith Europe’s debt crisis mounting, foreign interest in New York’s ultraluxury real estate is increasing yet again. Russian billionaire Dmitry Rybolovlev’s $88 million purchase of a 15 Central Park West penthouse is now the stuff of Manhattan real estate legend, while a Chinese buyer reportedly purchased four separate units at Extell Development’s One57 for $20 million apiece. International buyers contributed $82.5 billion, or 8.9 percent, of the $928 billion spent on residential real estate in the United States for the year ending in March, according a survey released last month by the National Association of Realtors. That’s a 24 percent jump from the previous year.

CHINA

hinese buyers have been among the most active groups of international purchasers in New York in recent years, due partly to the growing number of Chinese millionaires and the strength of the yuan. New York real estate appeals to these buyers, in part, because in China there’s no private land ownership, explained Bill Seto, principal broker at Flushing-based Fultonex Realty and president of the Chinese American Real Estate Association. Instead, residents obtain land leases, usually of up to 70 years. Still, Chinese buyers face unique obstacles to purchasing U.S. property. For example, Chinese citizens are only allowed to transfer $50,000 out of the country each year because of government restrictions. As a result, in order to buy properties here, many Chinese buyers ﬁnd friends, family or acquaintances in China who are willing to send $50,000 to the U.S. to help them make the purchase. (The buyer reimburses them in yuan at home.) The process is normally kept from brokers, one of whom said that it was better to be kept in the dark about it. While the practice is not technically illegal, they said, it’s frowned upon by the Chinese government. Buying property in the U.S. is easier for Chinese citizens who already have businesses or investments abroad, from which they can withdraw funds. Perhaps for that very reason, some one-third of Chinese citizens worth over $1.58 million have overseas investments, according to a recent Bank of China estimate. When working with Chinese buyers, American brokers should also be cognizant of certain cultural differences, brokers said. For one thing, feng shui — the

62 July 2012 www.TheRealDeal.com

While New York real estate agents have long been focused on international purchasers, they’re now scrambling more than ever to add foreign buyers to their client rosters. But that’s often easier said than done: Depending on which country the buyers hail from, doing deals with foreign purchasers can require a working knowledge of everything from tax laws to feng shui. Plus, navigating cultural differences can be a mineﬁeld, and if brokers aren’t careful, one misstep can end a client relationship before it’s even begun. This month, TRD looked at the dos and don’ts of working with some of the most active groups of international buyers: Russian, Chinese and Brazilian purchasers, as well as those from Western Europe and the Middle East.

Chinese practice of creating harmonious surroundings — is often dismissed as superstition by American brokers. But it is taken very seriously in China, and can indeed make or break a deal. Tristan Harper, a European-born Prudential Douglas Elliman broker, recently had a Chinese cli-

sociated with good fortune. Other cultural differences also come into play for brokers with Chinese buyers. New York brokers may know far more about real estate here than their clients, but to avoid coming across as rude, Seto said, they should be careful not to voice their views too strongly.

who ent was about to go into contract on an apartment, but pulled out at the last minute. It turned out the apartment’s views of a nearby domed church are considered bad feng shui. Seto, whose ﬁrm is in the process of setting up a website allowing U.S. brokers to advertise properties to the Chinese market, said he instructs all brokers at his company to take at least an introductory course in feng shui. Brokers should also be aware that in Chinese culture, the number four is considered a bad omen; in regional Chinese dialects, the word is almost homophonous to the word for death. As a result, Harper said, “one of my purchasers wouldn’t even consider 74th Street, although the apartment was perfect for her.” The number eight, by contrast, is as-

“You have to be careful how you’re putting your thoughts across,” he said. “You should always let them ﬁnish what they’re saying and agree with them. If you disagree, it’s best to say, ‘I understand. However ...’ ” Likewise, Seto said, when Chinese buyers say they’ll consider your thoughts on a given subject, it generally means they disagree.

FORMER SOVIET UNION W

hen former Citigroup chairman Sandy Weill found a buyer late last year for his $88 million 15 Central Park West penthouse, the real estate commu-

nity was less than shocked when the buyer turned out to be Russian. Thanks to a commodities boom and other factors, the number of billionaires in Russia and the Ukraine has more than tripled since 2009, according to Forbes. And many of these wealthy buyers have been putting their money into real estate: Russians have purchased more than $1 billion worth of U.S. residential real estate in the last four years, according to a recent New York Times report. But buyers from the former Soviet Union often have an especially cautious approach to dealing with brokers and attorneys. Accustomed to rampant corruption in post-Communist Russia, these buyers are often unwilling to trust even their own agents or attorneys, brokers said, and will sometimes attempt to circumvent them and deal directly with the seller. “Because there’s so much corruption overall in Russia, people are more skeptical in general — and more careful,” said Angela Rapoport, a Corcoran Group broker who is originally from Estonia. To help ease the process, Rapoport suggested that brokers introduce prospective Russian buyers to an American attorney even before looking for apartments, so that they have a good working relationship by the time money transfers occur. And in today’s difficult lending climate, it’s common for New York brokers to ask detailed financial questions early on in the home search. But that strategy can backfire with Russian buyers, who don’t consider it appropriate to ask what someone does for a living — or how much money they make — on the first meeting, Rapoport said. “If it’s a very corporate job, they may tell you upfront, but if a person is more entrepreneurial, they don’t like to discuss what they do or how much they earn,” she said.

GRAPHIC BY DEREK www.TheRealDeal.com January 2011ZAHEDI 25

RESIDENTIAL Edward MermDmitry Rybolovlev elstein, a Ukrainian-born real estate attorney, agreed that Russian buyers tend to be very private, even secretive, when it comes to ﬁnancial information. As a result, he said, they are often unprepared for the detailed board packages now required by co-ops and even condos, especially when it comes to showing proof of income.

Lang LaSalle cited by the Wall Street Journal. The process of doing a real estate deal in cities like London, Paris and Berlin tends to be similar to how it’s done in New York, said Alex Karalanian of Citi Habitats, whose parents were born in France and Romania. So unlike other groups of international purchasers, for example, Western Europeans are no strangers to the idea that New York sellers want offers close to the asking price. But when scheduling closings, brokers

“Typically, a RusEdward Mermelstein sian’s income will be derived from various off-shore entities, of which there may be multiple layers,” he said. To aid in the buying process, he said he advises all Russian clients to open an American bank account as soon as they begin the home search, so they can start building a credit history while they look for properties to buy.

should be aware that wire transfers from European banks can take up to three weeks, Karalanian said, especially if the buyer is relying on a local bank based in their home country, as opposed to an international bank like HSBC. “If you don’t plan for it,” he said, “it can hold up the deal.” Karalanian is proficient in French and Romanian, but said most European buyers speak enough English to get them through the home-buying process. Still, language can be an obstacle when it comes to conveying technical real estate terms, so he frequently turns to Google Translate to make sure he’s using the right phrases.

WESTERN EUROPE

estern Europeans have long made up a crucial segment of New York real estate buyers. But now more than ever, European purchasers — faced with economic turmoil at home — are attracted to the relative security and stability of the U.S. residential real estate market, brokers said. European investors bought $1.6 billion worth of commercial and residential real estate in the U.S. in 2011, more than twice the $700 million they invested in 2010, according to data from Jones

MAP DEREK 2012 ZAHEDI www.TheRealDeal.com 28 BY March

BRAZIL

esidents of this South American economic powerhouse, who have been actively buying up property in Manhattan for the last five years, tend to demand a much higher level of service than New York brokers are used to, said Brazilian-born Elliman broker Marcos Cohen. That’s partly due to the fact that in Brazil, even the middleclass commonly employ cooks, cleaners and maids. As a result, they often expect concierge-level attention from

their brokers. “I’ve been asked for doctors, dentists and all kinds of referrals,” Cohen said. “It becomes more than a broker-client relationship. You become more like a family friend.” Town Residential broker Christian Benites, who spent time growing up in Brazil, said he’s spent almost as much time browsing through Gucci and Hermès stores with Brazilian clients as he has showing them apartments. And while American buyers may find it reassuring to have a family

sell their homes for close to the asking price. It’s up to brokers to “convey to them that properties will have less room for negotiation,” he said.

MIDDLE EAST R

ecent reports of Middle Eastern investment in the United Kingdom — Middle Eastern buyers made up 16 percent of prime central London residential sales in the last quarter of 2011, according to CBRE — have, to some extent, overshadowed such news in New York, particularly on the residential side. Still, New York has seen its fair share of Middle Eastern interest in both residential and commercial properties. Saudi Prince Alwaleed Bin Talal’s Kingdom Holdings, for example, owns a stake in the Plaza hotel. And in May, Qatari Prime Minister Hamad bin Jassim bin Jaber Al Thani made an offer to buy two of the late heiress Huguette Clark’s apartments at 907 Fifth Avenue, but was rebuffed by the co-op board. (Brown Harris Stevens’ Mary Rutherfurd, the units’ listing member or friend recommend a bro- broker, did not respond to a request for ker, many Brazilians — who tend to comment.) Town Residential’s Terry Naini is an be focused on maintaining their privacy — can be turned off when brokers Iranian-born broker who has worked mention the names of their other cli- with a number of Middle Eastern clients, thinking that means the broker ents, particularly purchasers from Saudi will blab about them to others, Cohen Arabia. She said many Middle Eastern said. buyers prefer to stay under the radar, When it comes to financing, many often buying with LLCs and looking for Brazilian buyers would rather go with- the utmost discretion from brokers. And out, Cohen added. The mortgage mar- like other groups, Middle Eastern buyket in Brazil was almost nonexistent ers prefer to avoid the topic of money. until a few years ago, due to In fact, Naini said she massively high interest rates, ﬁnds that it’s best to not even ask for the he explained; residential mortbuyer’s price range, gages have only become combut rather to show monplace in the last few years. While attitudes toward financthem a few differently priced properties and ing are beginning to change in Brazil, the old guard still pregauge their interest fers to pay all cash. accordingly. “Brazilians don’t have the The Qatari Prime mortgage mentality,” Cohen Qatari Prime Minister Hamad Minister’s attempt to said. “They say they wouldn’t bin Jassim bin Jaber Al Thani buy a co-op was unbe able to sleep at night.” usual, she added, since Luckily, there are few restrictions Arab buyers often prefer townhouses or on moving cash from Brazil to the U.S., free-standing houses. That’s especially Cohen said. true because wealthy Middle EasternLike Chinese buyers, Brazilians also ers are used to having luxurious gardens tend to bid low with expectations of and open courtyards in their homes, so they often want the same thing in New haggling, Benites said. “Their culture is one of negotiating,” York. “If a property doesn’t have outdoor he said. That can backfire in the New York market, where sellers expect to space, forget it,” Naini said. TRD

www.TheRealDeal.com July 2012 63

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Q&A

The Bronx’s new burn Parts of the long-blighted borough are starting to produce sparks with real estate investors, especially on the retail front

BY MELISSA DEHNCKE MCGILL t’s been a long time since the Bronx was actually burning. But these days, parts of the long-blighted borough are catching ﬁre — or at least producing sparks — with real estate investors. The market is still not back to its pre-recession levels, and sources say investments in the borough are far riskier than they are in other parts of the city. But brokers and developers interviewed for The Real Deal’s Q&A this month said that development, especially on the large-scale retail front, is on the rise. For example, a 780,000-square-foot mall recently broke ground at the intersection of the Hutchinson Parkway and I-95. And the former Stella D’oro cookie factory is also being converted into a shopping center. Those projects join the Related Companies’ highly publicized (and now highly successful) mega Gateway Center, which opened in 2009. And retail is not the only sector that’s buzzing in the Bronx. Developer Jonathan Rose recently opened the Via Verde, a low- and moderate-in-

Shimon Shkury

president, Ariel Property Advisors What types of projects are developers generally going after in the Bronx these days? Since the Bronx is under-retailed, several planned developments will provide much-needed retail services. Developers recently broke ground on the 780,000-square-foot enclosed Mall at Bay Plaza at Hutchinson Parkway and I-95, which will have a new Macy’s and an existing JCPenney. A 162,000-square-foot shopping center is planned for the former Stella D’oro factory and a 61-room Bronx Opera House Hotel is planned for East 149th Street in the

rents — to $45 to $50 a square foot. But in most areas of the borough, retail rents aren’t changing much and continue to hover around $20 to $30 a square foot. Jonathan Rose’s firm recently launched sales at a new Bronx residential development called Via Verde and Gifford Miller’s Signature Urban Properties recently got the green light on a $350 million mixeduse development. Do those projects represent a new confidence in the Bronx among developers? We’re seeing private investment in large retail developments and public investment in affordable housing developments in the Bronx. Incentives from the city and possibly tax credits are providing the financing needed to support affordable housing and development. In addition to

“The Bronx has seen growth in all areas because it was a borough that had blight throughout. I call the Bronx the Wild West because the area is wide open for anybody to come in and potentially make a lot of money.” NEIL DOLGIN, KALMON DOLGIN Hub shopping district, a commercial corridor [that] continues to attract the interest of retailers. We’ve also seen ofﬁce development around the Grand Concourse, Yankee Stadium and the courthouse area. How are prices for commercial leasing and for building purchases holding up in the borough? We’re seeing a slight increase in the value for mixed-use buildings. Most of the retail in the Bronx is still mom-and-pop operations, however. In strong areas along major corridors we’re seeing a big jump in 74 May 2012 www.TheRealDeal.com

[those two projects], the Crotona Park Apartments, a 64-unit, low-to-moderateincome project recently opened, and developers recently broke ground on La Preciosa, an affordable housing project in the Morrisania section of the Bronx. Which investors are active in the Bronx these days? Multifamily investors that have traditionally invested in real estate in Queens and Brooklyn are now looking for product in the Bronx. Large, family-owned operators and syndicators looking for yield are ac-

come co-op/rental hybrid. And former City Council speaker Gifford Miller got the green light late last year to move forward with a $350 million project that calls for 10 mixed-use buildings, including 1,325 units of housing in the Crotona Park East/West Farms sections of the borough. Meanwhile, Fresh Direct recently made headlines when it announced plans to build a new headquarters in the South Bronx rather than in New Jersey. (The city and state threw in $127 million in incentives to sweeten the deal.) Still, brokers say development and investment is limited to certain sectors and to targeted geographic areas, largely in the South Bronx. And while the Bronx is experiencing an increase in multifamily building sales, for example, the prices for those properties are substantially lower than prices in other boroughs. For more on which investors are becoming more active in the Bronx, which areas have seen the most growth and what kinds of government incentives developers are taking advantage of, we turn to our panel of experts.

tive in the Bronx market. These are investors willing to take on buildings that are management intensive. Which areas of the Bronx have seen the most growth in recent years? [In] the six months that ended on April 30, the neighborhood of Bedford Park was by far the most active market with 13 buildings that traded for $53.5 million. Overall during this period, the Bronx had 65 building [trades] valued at $249 million. Mott Haven, Melrose, Longwood, Highbridge, the Hub, White Plains Road, Grand Concourse and North Broadway are [also] active. Are there any statistics that illustrate what’s going on with Bronx real estate? The Bronx captured 20 percent of the multifamily buildings sold in the city, but only 11 percent of the city’s multifamily dollar volume in April 2012. Our research also shows that multifamily buildings in the Bronx were selling for an average of $90 per square foot in the six months that ended on April 30 — up from $75 a square foot from the beginning of 2011. That’s far lower than Manhattan below 96th Street, which was at $504. [It’s also lower than] Northern Manhattan ($177), Brooklyn ($186) and Queens ($160). Who are the most active residential buyers and renters in the Bronx right now? The U.S. Census has some interesting data regarding the Bronx. One study showed that between 2005 and 2009, more than 16,000 people left Manhattan for the Bronx, and that in the 15 months that ended on July 1, 2011, the Bronx added more residents than Nassau or Suffolk counties. We have reports of middle-class professionals moving into buildings along

the Grand Concourse where affordable co-ops are available for under $300,000. A yoga studio, farmers’ market and art galleries are opening to serve the new residents in the Grand Concourse area. Also, artists began moving into the Mott Haven section in 2002, a trend that has continued. And Kingsbridge is now being touted in the local media as an affordable and desirable neighborhood.

Robert Nelson

president, Nelson Management Group How are prices for commercial leasing and for building purchases doing? [Prices] took a big hit in 2008–09 like the rest of the country, but they are coming back. The rent-roll multiples, the price per square foot and the cap rates all took a big hit, but they are [also] starting to come back. I don’t think they are at the same level as where they were before. I think that is going to take some time. What’s going on with residential sales? The residential sales side is probably not going to get a jump start until banks are ready to jump in and stop scrutinizing buyers’ credit to the nth degree. Rentals are doing quite well. What are the biggest challenges to working in real estate in the Bronx today? When you are a landlord of large apartment complexes and you decide to invest in your properties by putting in capital improvements, whether it be new windows, elevators, hallways or lobbies, the biggest challenge is getting the tenant base to respect the property they live in www.TheRealDeal.com July 2012 65

Q&A and recognize that this isn’t 10, 15 and 20 years ago where, when vandalism took place, the owner would just let it sit like that. Your hope is that when you put money into your properties that your tenants take care of it, respect it.

Neil Dolgin

co-president, Kalmon Dolgin Are you seeing a new conﬁdence among developers in the Bronx? A lot of the new housing that you are seeing up there is affordable housing. I’m not sure that’s going to be an asset for the rest of the area. [But] it does take away the blighted neighborhoods. It does put in new development. They are not going to build the projects of yesteryear; they are going to build affordable housing, which will be low-rises, which gives a much better appearance and security for the neighbors as well as for the tenants who occupy the property. ... If you ask everybody who has bought in the residential market, it is the only thing making money. That is the only thing that is trading right now continuously throughout all the boroughs, because everybody needs a roof over their heads. What types of projects are developers generally going after in the borough? You are not seeing new buildings being built because the demand has to catch up with the outstanding supply. I do see the transformation of some of the loft buildings, which there’s an abundance of on the Bruckner on the way to Yankee Stadium. They are being transformed into ofﬁce space and even hospitals are taking over some of that space. Healthcare is ever increasing and hospitals are expanding to a lot of those buildings, which were vacant before. Storage facilities have [also] taken over a lot of these buildings. Boutique hotels are very popular [in both] good and bad areas. In industrial areas, developers are now throwing a hotel in an older loft building and doing conversions. They don’t have to build new — it seems boutique hotels are affordable and with the transient groups that we have coming into New York City year-round from all parts of the world, they tend to land in a cheaper neighborhood, but a good protected area so [developers] are putting these hotels wherever they can. Which investors are more active in the Bronx these days? Simone has been very active. His name is synonymous with the Bronx itself, and Sepco for the affordable housing in the southeast Bronx — they keep expanding. Which areas of the Bronx have seen the most growth in recent years? 66 July 2012 www.TheRealDeal.com

The Bronx has seen growth in all areas. You can go from the South Bronx to the Grand Concourse to Riverdale and see growth because it was a borough that had blight throughout. I call the Bronx the Wild West because the area is wide open for anybody to come in and potentially make a lot of money. There’s a risk-reward factor there. It might be more risk than in some of the other boroughs, but it has much greater reward if you develop it correctly and take it slowly. Which areas are seeing the most commercial activity? Zerega, Bathgate, South Bronx, Bruckner and the Yankee Stadium area — they are viable. The new Columbia University development in Harlem has taken place and there are quite a few businesses that are moving into the Bronx [as a result] and buying property there.

Jerry Welkis

president, Welco Realty Inc. Which investors are active in the Bronx these days? For years, the Bronx had many family and smaller operator-type investors. More recently, larger developers and REITs have [brought] their capital into the Bronx. Mall Properties ... has done major releasing of their retail stores, bringing new chains into the Parkchester area. Vornado bought the Bruckner Plaza Shopping Center anchored by Kmart and Toys “R” Us. Forest City built their retail development across from Bruckner Plaza. And, of course, Related made a major investment in the Bronx with its Gateway development. Fresh Direct recently announced plans to build a new headquarters in the South Bronx. What impact do you think its presence will have on the Bronx market? Major companies like Fresh Direct putting in a new headquarters in the South Bronx will, of course, help bring in new jobs and will encourage other major corporations to consider the Bronx for their headquarters. I think Fresh Direct must see a tremendous potential employee pool that they can tap into, and the strong public transportation and highway system must have also been a factor in their decision. What are the biggest challenges to working in real estate in the Bronx today? Being a retail commercial specialist who represents both tenants and landlords, I have found that, in the major retail hubs of the Bronx, there is such strong demand for retail space that many of the tenants have had to look at vertical merchandising, which would include two-level stores or stores on a second ﬂoor.

Gifford Miller

managing member, Signature Urban Properties Do projects like your company’s planned $350 million development represent a new confidence in the Bronx among developers? The reality is that the Bronx is a great place to live and work, and I think there is a growing recognition that the transit, educational and recreational infrastructure in the Bronx support new development opportunities. What impact do you think Fresh Direct will have on the Bronx market? Bringing Fresh Direct to the Bronx is a great show of confidence in the borough as a terrific place to do business. Hopefully, other major employers will follow suit. Certainly, for businesses with logistical needs, the South Bronx makes an enormous amount of sense.

Phillip Morrow

president/CEO, South Bronx Overall Economic Development Corp. Do the latest projects by Jonathan Rose and Gifford Miller represent a new conﬁdence in the Bronx among developers? I think so. Via Verde was an RFP issued by the city that we applied for ourselves. They did a beautiful project there with low- and moderate-income housing that is for both ownership and rental. It has the advantage of being in the South Bronx, so it’s very accessible to everything in the city. It’s rounding out a major revitalization of new construction to the Hub and the Morrisania area. Next to it there are 650 units at St. Ann’s — a new 800-unit campus at Boricua College. So it’s a whole new neighborhood. I think it will keep going. What types of projects are developers generally going after in the Bronx these days? [Among other projects, there’s] a move toward residential along the Harlem River where there were a lot of illegal loft conversions that can be legalized because the zoning has been changed. There are some buildings that I think are going to be large residential developments in the next eight to 10 years — these underutilized warehouse buildings and manufacturing buildings along the Harlem River. How are prices for retail/ofﬁce leasing and for building purchases holding up? Fairly well. There was a little decline for a

while. Right now in the Hub, they are asking $50 to $100 per square foot for retail space. It’s bouncing all over the place, but the rents are coming back, the business is here. The city recently did a study that said there are 250,000 people a day who go through the Hub. Which areas of the Bronx have seen the most growth in recent years? It’s been the South Bronx, Mott Haven and Morrisania, where unit after unit has been built and a lot of the vacant land has almost disappeared. All of the South Bronx has been developing like mad, particularly the area around the Hub. There are thousands of new housing units built. Who are the most active residential buyers and renters in the Bronx right now? Generally speaking, they are pretty much the people who already live in the Bronx. It isn’t like there is a great gentriﬁcation happening. The only place where you might see that happening is along the Bruckner Boulevard area. If you go south of Bruckner, you have singles and yuppies moving in.

Karl Brumback

director of sales, Massey Knakal Realty Services Is there a new confidence in the Bronx among developers? There are a number of projects that point to confidence: the Mall at Bay Plaza will be the first indoor shopping center built in New York City in 40 years; the 225th Street Target is one of the chain’s top producers and will soon be joined by new retail centers at the former Stella D’oro factory and at the Economic Development Corporation lot on 230th Street. The Throggs Neck Shopping Center will add almost 300,000 square feet of retail, and the Hutch Metro Center is adding a new tower. What are you seeing in terms of investor interest in the Bronx? There’s plenty of interest and not enough inventory. Investment property turnover in the Bronx is very low — just over one percent of our target investment properties trade every year. That number is down from over three percent from 2006 through 2008. Which areas of the Bronx have seen the most growth in recent years? The Broadway corridor between 225th Street and Manhattan College has seen a surge in retail-oriented development. And the Webster Avenue–Bedford Park up-zoning is reaping benefits as a number of school and residential projects are underway or planned along Webster Avenue between Bedford Parkway and East Gun Hill Road. TRD www.TheRealDeal.com May 2012 75

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

Pequot Tribe, which owns Foxwoods, initially announced in February that Gordon would develop an upscale outlet mall on the site. The facility is slated to be the first “convertFoxwoods Resort Casino ible” mall in the country, meaning it will have a retractable roof to allow for outdoor shopping in good weathcording to Sheldon Gordon, de- er. The tribe, which would lease velopment partner for the proj- the necessary land to the developect. The roughly 320,000-square- ers, said ground-breaking would foot, 85-store shopping center take place this spring. Meanwhile, will be called the Tanger Outlets last month the state of Connectiat Foxwoods. The Mashantucket cut backed a plan for the Pequots’

��

CONNECTICUT

Tanger shopping mall coming to Foxwoods North Carolina–based Tanger Factory Outlet Centers, which owns and operates dozens of shopping centers across the country, will partner on the development of a mall at Foxwoods Resort Casino, the New London Day reported. Tanger, a publicly traded real estate investment trust, will build, manage and co-own the mall, ac-

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tribal police department to become the leading law enforcement agency inside Foxwoods. The Pequots, who are struggling with some $2 billion in debt, had requested the change to reduce the amount of money they pay the state each year for security.

HUDSON VALLEY

Combined MLS debuts An eight-county listing service for residential real estate debuted last month with the completed merger of the Empire Access Multiple Listing Service, based in White Plains, and the Greater Hudson Valley Multiple Listing Service in Goshen. The newly formed Hud-

son Gateway Multiple Listing Service has some 24,000 properties in its listings database, and includes more than 1,500 real estate ﬁrms in the Bronx, Westchester, Putnam, Dutchess, Rockland, Orange, Sullivan and Ulster counties. It is one of the 50 largest multiple listing services in the U.S. HGMLS is owned by the 9,000-member Hudson Gateway Association of Realtors, which was formed late last year by the merger of the Westchester Putnam Association of Realtors, the Rockland County Board of Realtors and the Orange County Association of Realtors. “The new HGMLS will provide a broader view of the organization’s role for real estate agents and the general public in the area,” HGMLS president Gary Leogrande said in a statement. “Our agents will now be able to access listings in eight counties through the lower Hudson Valley, providing even more choices for homebuyers.”

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Online retail giant Amazon.com has announced plans to open two sales distribution centers in New Jersey in 2013, the Associated Press reported. Locations have not yet been selected for the warehouses, which are expected to be about 1 million square feet each and cost a total of $130 million. Amazon.com also agreed to collect 7 percent sales tax on purchases made in New Jersey, starting next summer. The collection of sales taxes, which online retail-

Chris Christie

ers are not currently required to do, will bring the state an estimated $30 million to $40 million a year in new revenue, according to New Jersey Governor Chris Christie, who announced the deal with Amazon executive Paul Meisner. Trenton mayor Tony Mack said last month that he will try to lure Amazon.com to the capital city by creating an economic development committee tasked with “starting a dialogue” with Amazon and helping scout sites for the warehouses, the Times of Trenton reported. Compiled by Russell Steinberg

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Los Angeles

Casa Casuarina

The onetime home of the late fashion designer Gianni Versace hit the market last month for $125 million, making it the most expensive home for sale in the nation. Versace purchased the 10-bedroom home, called Casa Casuarina, in 1992 for $10 million. But in 1997, he was shot to death on the doorstep of the mansion. Now a boutique hotel, the house is listed with Coldwell Banker’s Jill Eber and Jill Hertzberg. MIAMI BEACH

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Providence

he landmarked Providence Biltmore, a 292-room hotel, has sold for $16 million, the Providence Journal reported. The

new owner, Boston-based Finard Coventry Hotel Management, is planning a $10 million renovation slated to begin this summer. Earlier this year, a Superior Court judge approved the sale of the Biltmore, which had been pushed into state receivership by lenders looking to recoup $25.3 million from the previous owners of the property. The overhaul is slated to include a new roof and a face-lift for the hotel’s ballrooms, meeting rooms, lobby, guest rooms and hallways. The work is expected to be completed within two years, and the hotel — originally constructed in 1922 — will remain open during the renovation.

Los Angeles

he South Park neighborhood of downtown Los Angeles is getting its ﬁrst new construction project since 2008, with a new

440-unit luxury rental apartment complex, Commercial Property Executive reported. The two-phase development, known as Avant, is a $170 million joint venture between Fiﬁeld Companies and Cypress Equity Investments. The ﬁrst phase includes two seven-story residential towers at 1340 South Figueroa and 1355 South Flower

traded hands in May, the Times reported, up 9.3 percent from April and 17.6 percent from May 2011. The state’s median home price hit $270,000, rising 8.4 percent year-over-year.

Chicago

he 89th-ﬂoor penthouse at Trump International Hotel and Tower hit the market last month for $32 million, Forbes reported,

making it Chicago’s priciest residential listing. The 14,620-squarefoot home is listed with Chezi Rafaeli of Coldwell Banker. Chicago’s

luxury real estate market has seen an uptick in activity this year, Forbes reported, with 10 homes priced at $6 million and higher hitting the market since February, and nearly half of those now sold.

Meat Loaf

“Sales have lead to a limited amount of inventory in high-end properties, and the market has picked up so the seller believes this is the best time to sell the penthouse,” Rafaeli told Forbes. According to Trulia.com, the median Chicago home sale price in May was $180,000, down 2.7 percent from the same month of last year.

Washington, D.C.

ashington, D.C., mayor Vincent Gray and congressman Darrell Issa want to ease the city’s federally mandated building

height limits, the Wall Street Journal reported last month. Buildings

streets, with 11,000 square feet of retail space on the ground level.

in the district can be no taller than 130 feet, but Gray and Issa want to

The apartments are expected to hit the market in November 2013,

give developers of ofﬁce and residential properties the option of add-

with rents ranging from $1,350 to $3,500 per month, according to

ing an extra 15 feet, or one ﬂoor. Washington’s population has risen 8

the Los Angeles Times. The second phase, slated to begin construc-

percent since 2000, but new development sites are in short supply,

tion in early 2013, is a 194-unit building at 1500 South Figueroa

the Journal said. According to an April 2012 report from the broker-

Street. In downtown Los Angeles, some 2,700 apartment units were

age M Squared Real Estate, the number of new residential listings

under construction and 3,900 were planned in the ﬁrst quarter of

in the city was down 19.7 percent year-over-year, while closed sales

this year, according to a report by Marcus & Millichap Real Estate.

rose 6.9 percent. The median sales price was $404,500, up 12 percent

In California as a whole, 41,790 new and previously owned houses

from the same month of last year. Compiled by Zachary Kussin

70 July 2012 www.TheRealDeal.com

rity couple Kim Kardashian and Kanye West have quietly listed their homes amid rumors the two are moving in together, E! Online reported. Two years after buying her Tuscan-style Beverly Hills mansion for $3.4 million, Kardashian listed the ﬁve-bedroom home for close to $5 million. West, meanwhile, has reportedly pocket-listed his 4,214-squarefoot Hollywood Hills home for just under $4 million.

AUSTIN The Texas-born musi-

cian Meat Loaf and his wife have purchased a newly constructed home outside of Austin for $1.48 million, the Real Estalker reported. The 5,200-square-foot home has four bedrooms, ﬁve and a half bathrooms and heated marble ﬂoors in the master bathroom. The couple previously owned a 7,142-square-foot, seven-bedroom home in Calabasas, Calif., but sold it in May 2011 for just over $3 million.

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Two midtown buildings ripe for conversion come online Marcus & Millichap nabbed exclusive marketing rights for two 12-story ofﬁce properties on 33rd Street, GlobeSt .com reported last month. The buildings — which are located at 10 and 12 East 33rd Street between Madison and Fifth avenues — total 56,274 square feet and have a combined asking price 12 East 33rd Street of $35 million. They can be converted into residential towers or hotels. “They are currently 100 percent leased to a diverse group of tenants at below-market rates,” Brian Hosey, a Marcus & Millichap associate who’s marketing the properties, told GlobeSt.com, “but one or both of them could be converted into condominiums, high-end apartments or a boutique hotel.” Public records show that the owner is Adee Associates.

Kips Bay redevelopment site for sale A 77,000-square-foot building and adjacent lot at 407 First Avenue are on the market and expected to sell for upwards of $30 million, the New York Post reported. The building, located on the southwest corner of East 24th Street, is owned by the International Center for the Disabled, a nonproﬁt organization with ofﬁces on site. It is being marketed by a Jones Lang LaSalle team consisting of Glenn Tolchin, Jon Caplan and Yoav Oelsner. Together with the 4,200-square-foot lot, the building can support a new residential development of about 110,000 square

feet, according to the Post, or can be left as is and occupied by a medical tenant or institutional user.

Harlem residential portfolio on the market A package of eight multifamily buildings in East and Central Harlem is on the market with an expected sales price of about $29 million, according to Ariel Property Advisors, which is marketing the properties. Ariel brokers Shimon Shkury, Victor Sozio and Michael Tortorici are handling the portfolio sale. The ﬁve- and six-story buildings are located at 88 East 111th Street, 1661 Park Avenue, 524 East 119th Street and 265-73 West 146th Street. With approximately 110,920 gross square feet, the portfo1661 Park Avenue lio includes 197 apartments — most of which are rent stabilized — consisting of 142 one-bedrooms, 37 two-bedrooms, 16 three-bedrooms and two studios. In addition to the apartments, the properties have three retail units.

No. 22 Renwick hits the block The ﬁnal chapter of a long saga at No. 22 Renwick — a boutique condominium developed by Orange Management and Helix Partners at 22 Renwick Street in Manhattan’s Hudson Square neighborhood — seems ﬁnally to be coming to a close. The developers’ interest in the embattled project, where buyers sued after construction stalled, will

be sold by Eastern Consolidated brokers David Schechtman and Alan Miller following a foreclosure judgment against the developers for nearly $25 million, Eastern told The Real Deal last month. Construction at the 19unit condo project was put on hold during the recession, and the condo is now about 80 per22 Renwick Street cent built. The foreclosure judgment and lender’s related right, title and interest are now being marketed by Schechtman and Miller for $24.76 million, the pair said.

Trevor Day lists UES townhouse for $22.5M The Trevor Day School is selling the Upper East Side townhouse where its childhood education program is currently located. This move is part of Trevor Day’s effort to consolidate its properties, according to Matthew Pravda of Leslie J. Garfield & Co., who is a listing broker, along with Jed Garfield. Originally built in 1912, the six-story, 25-foot-wide mansion at 11 East 89th Street is currently configured as classrooms and offices and has two outdoor playgrounds. The asking price is $22.5 million. While the building, which will be delivered vacant, lends itself to a more institutional use — a school or foundation, perhaps — Pravda noted that the 13,770-square-foot property could also be converted into a single-family home. Compiled by Linden Lim

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Deal Sheet summary

The Deal Sheet, on pages 74 to 82, covers transactions from 5/11/12 through 6/10/12. Please submit future deals to deals@therealdeal.com.

Sales

Overview

By type

Property sales

Development

Deals Dollars

49 $1,083,130,000

Financing

By dollar volume (in millions) Development

Hotel

Industrial

Mixed-Use

Mixed-Use Multi-family

102.89 97 10.85 137.4

Multi-family

270.99

Transactions

Office

430.9

Buildings

Retail

33.1

Aggregate value

$313,000,000

Leases Office

Retail

Total

104

Leases square feet Office Retail Total

2,406,967 262,668 2,669,635

Office leases Office leases by industry Industry

Office leases sf by industry Leases

Industry

Advertising & Marketing

Construction

Entertainment

Top tenant reps for office leasing by sf

Square feet leased 53,272 8,268 12,730

Tenant representative

Square feet leased

Newmark Grubb Knight Frank

1,211,133

CBRE Group

581,665

Cushman & Wakefield

193,363

Jones Lang LaSalle

107,746

Fashion*

144,822

Financial

1,727,675

Dakota Realty Group

40,899

Fine Arts

10,900

Rosenhaus Real Estate

28,478

Food & Beverage

12,200

Rice & Associates

24,800

Government

Murray Hill Properties

23,861

Home Furnishings

10,500

Studley

12,764

Legal

43,779

Brentler

12,730

Medical

Adams & Co.

10,272

10,000

9,275

100,135

NGO

22,454

Prudential Douglas Elliman

Other / n/a

34,176

CBC Hunter Realty

9,275

Publishing

21,219

Cornerstone Real Estate

8,268

Real Estate

77,510

Peter McCuen & Associates

8,100

Science & Technology

Kenneth Zund Realty Associates

5,000

NGO

118,052

Retail leases Top tenant reps for leasing by sf

Retail leases by industry

Broker

Fashion

97,000

Financial

23,104

Square feet leased

Retail leases sf by industry

CNS Real Estate

70,000

Financial

Ripco Real Estate

36,000

Food & Beverage

82,028

CBRE Group

27,000

Health & Beauty

9,286

Colliers International

25,000

Other

33,750

Transportation

17,500

Right Time Realty

17,536

A.C. Lawrence

14,650

NYCRS

11,450

Newmark Grubb Knight Frank

8,234

NAI Friedland Realty

4,800

Adams & Co.

4,588

SRS Urban

3,800

Besen Retail

3,550

Sinvin Real Estate

2,660

(*includes showroom space)

Transportation

www.www.TheRealDeal.com July 2012 73

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 5/11/12 to 6/10/12. Please submit future deals to deals@therealdeal.com.

Office leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

One New York Plaza

1,153,000

Morgan Stanley / B. Gosin, B. Waterman, R. Canete, Newmark Grubb Knight Frank

Brookfield Office Properties / Represented in-house

The investment bank renewed its sublease for 782,000 square feet with Wells Fargo and signed a direct lease renewal and expansion with the landlord for 371,000 square feet, Commercial Property Executive reported.

601 Lexington Ave

500,000

Citigroup / Robert Alexander, CBRE

Boston Properties / F. Doyle, P. Riguardi, Jones Lang LaSalle; A. Levine, Boston Properties

The bank signed a lease renewal, the Commercial Observer reported. The company will consolidate seven of its Midtown offices into the building.

350 Hudson St

80,000

Tory Burch / D. Preate, J. Katcher, C&W

Trinity Real Estate / M. Packman, C. Laginestra, Trinity Real Estate

The fashion company signed a 10-year lease for office space on the fifth and sixth floors, GlobeSt.com reported.

One Pierrepont Plaza (Brooklyn)

75,060

Mount Sinai Brooklyn Heights Medical Group / D. Malawer, J. Serko, C&W

Forest City Ratner / M. Tighe, K. Caggiano, CBRE

The medical group signed a 15-year lease on the 17th and 18th floors, the Commercial Observer reported.

101 Fifth Ave

60,405

LivingSocial / B. Needleman, A. Schultz, CBRE

n/a / n/a

The Internet firm signed a three-year lease renewal for the entire fifth floor.

601 Lexington Ave

60,000

Merrill Lynch / n/a

Boston Properties / F. Doyle, P. Riguardi, Jones Lang LaSalle; A. Levine, Boston Properties

The wealth management subsidiary of Bank of America signed a lease renewal for floors 46 and 47.

256 West 38th St

43,050

CachĂŠ / Jones Lang LaSalle

EEGO West 38 Fee LLC / Michael Frantz, Newmark Grubb Knight Frank

The apparel company signed a new lease for office space.

32 Sixth Ave

32,862

Dentsu Holdings USA / A. Chudnoff, S. Vinett, Jones Lang LaSalle

Rudin Management / Robert Steinman, Rudin Management

The holding company for advertising services firms signed an expansion lease for part of the 24th floor and the entire 25th floor.

747 Third Ave

28,478

Regus / Richard Rosenhaus, Rosenhaus Real Estate

The William Kaufman Organization / M. Lenchner, Sage Realty; F. Doyle, A. Tener, Jones Lang LaSalle

The office work space provider signed a 15-year lease on the ground floor, second floor and mezzanine level.

500 Fifth Ave

27,872

Lankler Siffert & Wohl / R. Kass, W. Cohen, Newmark Grubb Knight Frank

500 Fifth Avenue Inc. / H. Blair, S. Kearns, C&W

The law firm signed a lease renewal for 22,753 square feet on the 33rd and 34th floors and expanded by 5,119 square feet on the 35th floor.

14 Penn Plaza

27,321

Virgo Business Centers / Jay Futersak, Dakota Realty Group

n/a / Ephraim Elavary, Dakota Realty Group

The executive office company signed a lease for the entire ninth floor, the New York Post reported.

1441 Broadway

21,711

Jay Suites / Rick Doolittle, Murray Hill Properties

LH Charney Associates / Rick Doolittle, Murray Hill Properties

The executive office company signed a lease for a flagship location.

1400 Broadway

14,307

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

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

The electronic payment technology company signed a lease for the entire 32nd floor.

32 Sixth Ave

13,793

Stroz Friedberg / D. Zimbaro, G. Markman, C&W

Superstructures Engineers & Architects / John Brierty, Newmark Grubb Knight Frank

The forensic computer investigators signed a sublease on the 13th floor, adding to its existing 40,000 square feet on the fourth floor, the New York Post reported.

50 Broad Street

12,730

Half Yard Productions / Paul Bostrick, Brentler

n/a / J. Searl, B. Weinstabel, C. Adham, C&W

The entertainment development company signed a 10-year lease on the ninth floor.

257 Park Ave South

12,280

Team Detroit / Sacha Zarba, CBRE

The Feil Organization / B. Feil, R. Fisher, The Feil Organization

The division of communications services group WPP signed a new lease for the entire top floor, including the rooftop, which is being renovated as a garden deck for use exclusively for the tenant.

352 Park Ave South

12,200

OTG Management / Elie Reiss, Rice & Associates

The Carlisle Group / S. Hecht, R. Phlen, Colliers International

The food and beverage operator signed an office lease.

52 Duane St

12,017

Oâ&#x20AC;&#x2122;Dwyer & Bernstien LLP / R. Sattler, M. McKenna, Newmark Grubb Knight Frank

Benjamin Partners / Represented inhouse

The law firm signed a lease renewal.

229 West 36th St

11,492

Goldman Copeland Associates Engineers PC / A. Chudnoff, S. Vinett, Jones Lang LaSalle

n/a / C. Meagher, S. Zarba, CBRE

The engineering firm signed a 10-year, 11-month lease for the entire seventh floor.

747 Third Ave

11,219

Practical Law Company / n/a

The William Kaufman Organization / Michael Lenchner, Sage Realty

The legal publishing company signed a nine-year expansion lease.

641 Lexington Ave

11,076

North Shore-Long Island Jewish Health System / B. Waterman, B. Ozarowski, Newmark Grubb Knight Frank

Rudin Management / Represented in-house

The nonprofit healthcare system signed a 10-year lease on the second floor for its IT division, the New York Post reported.

140 Grand St

10,900

Peter Freeman Inc. / n/a

Melebar Holding Company / Robert Neborak, PBS Real Estate

The art gallery signed a 10-year lease for loft gallery and office space on the ground floor and lower level.

1295 Fulton St (Brooklyn)

10,500

The Family Center / Carri Lyon, C&W

Ash Unlimited Inc. / T. King, D. Mueseel, N. Hector, CPEX Real Estate

The mental health clinic signed a lease for an expanded office.

313 West 37th St

10,000

Advance Publications Inc. / Anita Grossberg, Prudential Douglas Elliman

n/a / Tom Pfingst, Kenneth Zund Realty Associates

The publishing firm signed a lease for the entire second floor.

747 Third Ave

9,275

The Permanent Mission of Senegal to the United States / Richard Gottlieb, CBC Hunter Realty

The William Kaufman Organization / M. Lenchner, Sage Realty; A. Tener, F. Doyle, C. Wasserberger, Jones Lang LaSalle

The Mission signed new a three-year lease.

192 Lexington Ave

8,268

RC Dolner Construction / E. Levy, S. Greene, Cornerstone Real Estate

Cres / Bruce Weinberg, Cassidy Turley

The construction firm signed a 10-year lease on the third floor.

22 West 19th St

8,100

Fort Street Studios Inc. / Jim St. Andrew, Peter McCuen & Associates

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

The silk carpets company signed a 10-year lease. The reported asking rent was in the high 30s to low 40s per square foot.

One Bryant Park

7,168

TriOaks Capital Management LP / Daniel Madison, Newmark Knight Frank

Marathon Asset Management LP / A. Chudnoff, L. Kiell, D. Turkewitz, Jones Lang LaSalle

The alternative asset manager signed a six-year lease for part of the 39th floor.

For the best deal visit our website: www.TheRealDeal.com 74 July 2012 www.TheRealDeal.com

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Office leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

14 Penn Plaza

7,000

The Abacus Group / Jay Futersak, Dakota Realty Group

n/a / Ephraim Elavary, Dakota Realty Group

The executive search firm signed a 12-year lease to relocate and expand to the 14th floor, the New York Post reported.

14 Penn Plaza

6,578

The Combined Coordinating Council / Jay Futersak, Dakota Realty Group

n/a / Ephraim Elavary, Dakota Realty Group

The nonprofit signed a lease on the 13th floor, the New York Post reported.

641 Lexington Ave

6,512

New York Presbyterian Hospital / I. Schuman, D. Carlos, K. Handschumacher, Studley

Rudin Management / Represented in-house

The hospital signed a lease on the 25th floor for its minimally invasive new technological program, the New York Post reported.

747 Third Ave

6,252

Toppan Printing Company America Inc. / Key Otomo, Studley

The William Kaufman Organization / M. Lenchner, Sage Realty; A. Tener, F. Doyle, C. Wasserberger, Jones Lang LaSalle

The printing company signed a five-year lease to relocate to the building.

292 Madison Ave

6,035

QlikTech / Jones Lang LaSalle

Marciano Investment Group / William Cohen, Newmark Grubb Knight Frank

The business intelligence software company signed a lease for the entire 18th floor.

10 West 33rd St

5,791

PLV Studio LLC / David Levy, Adams & Co.

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

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

628 Broadway

5,500

Tibi / Carri Lyon, C&W

628 Broadway LLC / Tricia Rosen, Rosen and Jacobs Realty

The apparel company signed a lease for part of the third floor.

1411 Broadway

5,000

Apparel Ventures/Manhattan Beachwear / Tom Pfingst, Kenneth Zund Realty Associates

n/a / n/a

The swimwear company signed an expansion lease on the 31st floor, adding to its existing 8,500 square feet in the building.

281 Park Ave South

4,800

Points of Light Foundation / Carri Lyon, C&W

Federation of Protestant Welfare Agencies / Edward Kent, Cassidy Turley

The nonprofit signed a lease for the entire sixth floor.

599 Broadway

4,620

ThinkMap / Laurence Roberts, Arch Brokerage

n/a / ABC Properties

The software company signed a six-year lease for part of the ninth floor. The reported asking rent was $52 per square foot.

99 University Pl

4,500

Unpakt LLC / David Nouhian, Metropolitan Property Group

n/a / T. Pfingst, J. Zund, Kenneth Zund Realty Associates

The transportation technology company signed a lease for the entire seventh floor.

399 Lafayette St

4,443

Prodject / Greg Kim, Tarter Stats Oâ&#x20AC;&#x2122;Toole

n/a / n/a

The luxury and fashion events producer signed a six-year lease for part of the sixth floor. The reported asking rent was $57 per square foot.

3 West 18th St

4,200

Fjord Digital Marketing Company / Elizabeth Juviler, Rice & Associates

3-5 West 18th LLC / Ismael Padua, Yitzhak Loria Management

The marketing company signed a lease.

747 Third Ave

3,930

Group Gordon Inc. / Jared Silverman, CBRE

The William Kaufman Organization / M. Lenchner, Sage Realty; A. Tener, F. Doyle, C. Wasserberger, Jones Lang LaSalle

The communications agency signed a new eight-year lease.

20 West 55th St

3,874

LVMH / n/a

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

The luxury products group signed a long-term lease. The reported asking rent was $42 per square foot.

50 Broadway

3,710

PlayLab LLC / Carri Lyon, C&W

50 Broadway Realty Corp. / Stephen Bellwood, Cassidy Turley

The tenant signed an office lease for the entire 28th floor.

747 Third Ave

3,563

Advanced ICU Care Inc. / Jared Freede, CBRE

The William Kaufman Organization / M. Lenchner, Sage Realty; A. Tener, F. Doyle, C. Wasserberger, Jones Lang LaSalle

The provider of intensive care unit programs signed a new five-year lease.

130 West 42nd St

3,500

Dynamic Neuromuscular Rehabilitation / Curtis Woodside, Rice & Associates

American Properties / Nicholas Gattas, American Properties

The physical therapy office signed a lease.

747 Third Ave

3,197

GeoCapital LLC / n/a

The William Kaufman Organization / Michael Lenchner, Sage Realty

The investment manager signed a one-year lease renewal.

1180 Sixth Ave

2,675

Rosenfeld & Kaplan LLP / Abe Labaton, Vicus Partners

1180 AoA Member LLC / G. Varricchio, B. Varricchio, J. Tamborlane, Murray Hill Properties

The law firm signed a 10-year lease for part of the 19th floor. The reported asking rent was $55 per square foot.

747 Third Ave

2,560

John Hsu Capital / Gregg Espach, UGL Equis

The William Kaufman Organization / Michael Lenchner, Sage Realty

The investment advisor signed a five-year lease renewal.

134 West 18th St

2,400

Lefroy Brooks / Douglas Rice, Rice & Associates

Dutchess Bingo LLC / Conquest Advisors

The bathroom fixtures and furnishings firm signed a lease.

277 Fifth Ave

2,150

Wilfredâ&#x20AC;&#x2122;s Tailoring / Daniel Lolai, Murray Hill Properties

Mirsal L. / E. Groh, T. Jacobs, Rice & Associates

The tailor signed a lease for office space.

19 West 34th St

1,800

Flair 360 Ltd / Nancy Washburn, Jonathan Barry Associates

PRD Realty Corp. / Represented inhouse

The jewelry and accessories company signed a new three-year lease for showroom space on the eighth floor. The reported asking rent was $34 per square foot.

747 Third Ave

1,775

Otsuka Chemical Co. Ltd. / Kenyu Iso, REDAC Inc.

The William Kaufman Organization / Michael Lenchner, Sage Realty

The chemical company signed a lease renewal.

17 Battery Place South

1,750

Fordham Financing Management / Thomas Reilly, Thomas P. Reilly & Co.

CCMTG / Curtis Woodside, Rice & Associates

The investment bank signed a lease.

75 Maiden Ln

1,685

Royalty Travel / Taso Hatzimichael, RedRock NYC

AM Properties / Represented in-house

The travel agency signed a five-year lease. The reported asking rent was $33 per square foot.

37 West 39th St

1,500

Help with a Smile / Matthew Kurzban, Rice & Associates

BWW 39 Co. / David Winoker, Winoker Realty

The IT services company signed a lease.

747 Third Ave

1,487

M. Ginsberg & Dexter Assoc. / Robert Baraf, CBRE

The William Kaufman Organization / Michael Lenchner, Sage Realty

The tenant signed a three-year lease renewal.

10 West 33rd St

1,428

George R. Chaby Inc. & Rain Tech LLC / Brett Maslin, Adams & Co.

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

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

747 Third Ave

1,400

Interpolis Network Inc. / n/a

The William Kaufman Organization / Michael Lenchner, Sage Realty

The interactive technology and services firm signed a two-year lease renewal.

747 Third Ave

1,215

DeCampo Diamond & Ash / n/a

The William Kaufman Organization / Michael Lenchner, Sage Realty

The law firm signed a one-year lease renewal.

10 West 33rd St

1,135

Daniel M. Friedman & Associates / David Levy, Adams & Co.

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

The fashion-accessory designer signed a new lease. The reported asking rent was $42 per square foot.

10 West 33rd St

1,135

Cutie Pie Baby / David Levy, Adams & Co.

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

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

262 West 38th St

1,000

First Care of NY / Jeffrey Anderson, Rice & Associates

Palobueno NV / Carlos Silberman, Falcon Properties

The home health care services provider signed a lease.

76 July 2012 www.TheRealDeal.com

Office leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

285 West Broadway

1,000

Melet Mercantile / Nathan Stange, Susan Penzer Real Estate

285 West Broadway Associates LP / Joshua Salon, Salon Realty

The vintage clothing company signed a lease to relocate its corporate offices. The reported asking rent was $41 per square foot.

10 West 33rd St

783

Fashion Land Inc. / Brett Maslin, Adams & Co.

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

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

Retail leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

100 West 125th St

70,000

Burlington Coat Factory / Cliff Simon, CNS Real Estate

Jeff Sutton / Wharton Properties

The outerwear retailer signed a 15-year lease for three levels of space at a new shopping center currently under development, the New York Post reported.

1552 Broadway

27,000

Express / David LaPierre, CBRE

Jeff Sutton; SL Green / Wharton Properties

The apparel retailer signed a 15-year lease for a new store, the New York Post reported. Slated to open in fall 2013, the four-story building will be reconfigured into three stories to allow for higher ceilings, according to the paper.

11 Times Square

25,000

Global Food International Corp. / James Emden, Colliers International

Prudential Financial; SJP Properties / n/a

A Russian restaurant company signed a lease for space on the ground floor and mezzanine level, the Wall Street Journal reported. The space will be occupied by a new restaurant and feature international cuisine, according to the paper.

1701 Bedford Ave (Brooklyn)

18,500

TD Bank / R. Senior, I. Shabot, Ripco Real Estate

1715 Bedford LLC / R. Senior, I. Shabot, Ripco Real Estate

The bank signed a 20-year ground lease.

749 Wyckoff Ave (Queens)

17,500

Autozone Stores / E. Bukai, R. Senior, Ripco Real Estate

749-773 Wyckoff Ave LLC / E. Bukai, R. Senior, Ripco Real Estate

The auto-parts store signed a 15-year ground lease for another location.

240 West 52nd St

14,300

Lucky Cheng’s / J. Bates, H. Vinik, D. Rosen, A.C. Lawrence

n/a / Victor Menkin, Menkin Realty

The restaurant signed a 10-year net lease for the entire building.

70-30 80th St (Queens)

13,500

Turtle & Hughes / Joe Ibrahim, Right Time Realty

Atco Properties & Management / n/a

The electrical supplier signed a five-year retail lease at the Atlas Terminals.

140 Washington St

11,200

Mortons Steakhouse / n/a

Cedar and Washington Associates LLC / Mark Kapnick, SRS Urban

The steakhouse signed a lease.

4 New York Plaza

5,500

CCLC / Jonathan Krivine, Newmark Grubb Knight Frank

Harbor Group International / L. Block, D. Rubens, Winick Realty

The tenant signed a lease to open its second Manhattan early childhood education and care center. The landlord at the time of lease signing was Harbor Group International, but the building has since been sold to a partnership between HSBC Alternative Investments Ltd. and Edge Fund Advisors.

153-50 89th Ave (Queens)

5,000

City Rib / n/a

The Dermot Company / n/a

The Poulakakos family signed a lease to open an eatery at the Moda Residences apartment building, the New York Post reported.

1178 Flatbush Ave (Brooklyn)

5,000

Hua Supermarket Inc. / n/a

HSRE LLC / Harold Sherr, HSRE

The supermarket signed a lease. The reported asking rent was $50 per square foot.

10 West 33rd St

4,588

Bean Tree Corp. / David Levy, Adams & Co.

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

The coffee shop signed a new lease. The reported asking rent was $244 per square foot.

Cooper Ave and 80th St (Queens)

4,036

CrossFit NYC / Joe Ibrahim, Right Time Realty

ATCO Properties & Management / Neil Adamson, ATCO Properties & Management

The fitness studio signed a lease.

113 East 60th St

3,400

Liz Russell Organics / n/a

n/a / Jill Lovatt, Massey Knakal

The salon signed a lease.

114 Liberty St

3,300

Liber-Tees Gifts and Electronics / Mark Kapnick, SRS Urban

EPIC LLC / Mark Kapnick, SRS Urban

The gift shop signed a 12-year lease.

388 East Fordham Rd (The Bronx)

3,000

Lava New York Inc. / Rick Stassa, NAI Friedland Realty

B & G Sportswear / Rick Stassa, NAI Friedland Realty

The tenant signed a retail lease.

104 East 30th St

2,660

n/a / Steve Rappaport, Sinvin Real Estate

n/a / H. Demetrious, I. Donath, NYCRS

The restaurant signed a lease.

10 Downing St

2,500

Green Apple Group / K. Brandman, A. Bichoupan, NYCRS

Stonehenge Partners / K. Brandman, A. Bichoupan, NYCRS

The restaurant signed a lease.

12 East 52nd St

2,404

Community National Bank / P. Davidson, M. Moorin, Newmark Grubb Knight Frank

G. Constantin, A. Lawrence, P. Zimmar, Heritage Realty Services / n/a

The Long Island-based bank signed a lease, the New York Post reported. The asking rent was $170 per square foot, according to the Post.

1174 Flatbush Ave (Brooklyn)

2,200

Liberty Income Tax Services / n/a

HSRE / Harold Sherr, HSRE

The tax preparation services provider signed a lease. The reported asking rent was $50 per square foot.

367 Seventh Ave

2,000

Natraj Gandham / M. Mager, E. Dweck, Besen Retail

Arthur W. Greig, Receiver / M. Mager, E. Dweck, Besen Retail

The tenant signed a lease for a gift shop.

791 Broadway

2,000

Yoogle / Anita Grossberg, Prudential Douglas Elliman

n/a / Ken Brandman, NYCRS

The frozen yogurt shop signed a lease.

125 Fulton St

1,800

H & H Bagels / James Famularo, NYCRS

n/a / Stevie Haber, Haber Realty Group

The bagel shop signed a lease for another location.

306 East 49th St

1,800

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

n/a / Ross Berkowitz, RKF

The restaurant signed a lease.

3706 Third Ave (The Bronx)

1,800

Little Caesar’s Pizza / R. Herko, D. Scotto, NAI Friedland Realty

Royal Farms Inc. / R. Herko, D. Scotto, NAI Friedland Realty

The pizza chain signed a lease for another location.

511 West 20th St

1,500

n/a / n/a

n/a / Brendan Gotch, Massey Knakal

The yoga studio signed a lease

377 Park Ave South

1,500

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

The pizza restaurant signed a lease.

1172 Flatbush Ave (Brooklyn)

1,400

Boost Mobile / n/a

HSRE LLC / Harold Sherr, HSRE

The mobile services retailer signed a lease. The reported asking rent was $50 per square foot.

76 West 85th St

1,300

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

n/a / Rafe Evans, Walker Malloy

The dog groomer and trainer signed a lease.

167 West 81st St

1,250

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

The speech pathologist leased retail space.

1176 Flatbush Ave (Brooklyn)

900

U.S. Armed Forces / Karen Cohen, M.C. O’Brien

HSRE / Harold Sherr, HSRE

The U.S. military signed a lease for a recruitment center. The reported asking rent was $50 per square foot.

4875 Broadway

800

Fairy Tale Dreams Inc. / M. Mager, E. Dweck, Besen Retail

Hawthorne Gardens / M. Mager, E. Dweck, Besen Retail

The furniture store signed a lease.

1774 Amsterdam Ave

800

n/a / Elaine Perry, Perry & Associates

n/a / H. Demetrious, I. Donath, NYCRS

The tenant signed a lease for a variety store.

www www.TheRealDeal.com July 2012 77

Retail leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

118 West 168th St (The Bronx)

750

Lopez Corner Bakery / M. Mager, E. Dweck, Besen Retail

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

The bakery signed a lease.

1713 First Ave

700

n/a / H. Demetrious, I. Donath, NYCRS

The deli signed a lease.

508 East 12th St

600

Raclette / Ken Brandman, NYCRS

n/a / Ken Brandman, NYCRS

The French sandwich shop signed a lease.

2508 Broadway

500

Pinkberry / Mark Kapnick, SRS Urban

Housing Services Inc. / Mark Kapnick, SRS Urban

The frozen yogurt chain signed a 15-year lease for another location.

310 East 23rd St

350

Lotus Skin Care Boutique / H. Vinik, D. Rosen, A.C. Lawrence

n/a / Josh Singer, Winick Realty

The skin care company signed a 10-year lease for a new boutique. The reported asking rent was $102 per square foot.

523 Amsterdam Ave

330

Tasti-D-Lite / Stu Morden, Newmark Grubb Knight Frank

175 West 85 Realty LLC / M. Mager, E. Dweck, Besen Retail

The ice cream shop signed a lease.

Buys Address

Size

Buyer / Representative

Seller / Representative

Notes

4 New York Plaza

1.1 million sf office bldg

HSBC Alternative Investments Ltd.; Edge Fund Advisors / n/a

Harbor Group International / D. Stacom, B. Shanahan, CBRE

The office building sold for $270 million, Bloomberg News reported. Harbor Group International bought the property from JPMorgan Chase in January 2010 for $107 million.

130 Prince St

88,000 sf office bldg

Invesco / n/a

Waterman Interests LLC; JPMorgan Asset Management / A. Spies, D. Harmon, K. Donner, Eastdil Secured

The property sold for $140.5 million. The selling partnership originally acquired the building in 2007 for $112 million.

525 Broadway

8-story, 45,000 sf mixed-use bldg

JPMorgan Chase / W. Heller, W. Silverman, Studley

Familes of Isidor Green and Samuel Skura / Alan Cohen, ABS Partners

The property sold for $87.5 million. The 5,000-square-foot retail space has long been occupied by a Chase branch.

410 East 92nd St

226-room hotel bldg

RLJ Lodging Trust / n/a

Madison 92nd Street Equities / Thomas McConnell, C&W

The hotel sold for $82 million, or about $363,000 per room, Crain’s reported. The buyer purchased the building out of bankruptcy.

Manhattan portfolio

8 apt. bldgs, 459 units total

Sentinel Real Estate; Alma Realty; Onex Real Estate Partners / n/a

Vantage Properties; Area Property Partners / P. Hauspurg, D. Schechtman, L. Lieberman, Eastern Consolidated

The package of Upper Manhattan residential buildings sold for $65 million. Sentinel bought 80 Fort Washington Avenue, 86 Fort Washington Avenue, 6672 Fort Washington Avenue and 884 Riverside Drive; Alma and an unnamed partner acquired 3885 Broadway, 4455 Broadway and 3915 Broadway; and Onex, which had been a holder of mezzanine debt, took title to the 64-unit 3900 Broadway.

111 Kent Ave (Brooklyn)

62-unit apt. bldg

American Realty Advisors / n/a

Stellar Management; Largo Investments / W. Heller, W. Silverman, E. Negrin, D. Parker, Studley

The luxury rental building sold for just under $56 million, or about $900,000 per unit. Cooper Square Realty will take over management of the building from Stellar Management. Stellar and Largo Investments purchased the property in March 2010 for $24.6 million.

105 West 57th St

Development site

JDS Development Group / n/a

Starwood Capital / n/a

The majority interest in the development site sold for $40 million. The buyer plans to break ground on a new 100,000-square-foot, mixed-use retail and luxury residential project in the spring or early summer.

2505 Bruckner Blvd (The Bronx)

14-screen movie theater

The Lightstone Group / n/a

Kbt Theatres LLC / n/a

The Whitestone Multiplex Cinemas theater sold for $30 million.

19 East 82nd St

5-story comm. bldg

Cy Twombly Foundation / Meg Siegel, Sotheby’s International

Warren Adelson / Judson Realty

The mansion sold for $27.75 million, the Wall Street Journal reported. The buyer, a foundation set up by the late artist Cy Twombly, plans to turn the building into an education center and museum.

35 West 64th St

68-unit apt. bldg

Astoria Realty Partners; Mornos Realty / J. Smith, N. Haque, Friedman-Roth Realty

n/a / Jude Dayani, Orsid Realty

The property sold for $26 million. The building has housed the Michelinstarred restaurant Picholine on the ground floor since 1993.

204 Huntington St (Brooklyn)

3-story, 62,404 sf apt. bldg, 60 units total

n/a / n/a

n/a / S. Palmese, B. Knakal, Massey Knakal

The property sold for $24.5 million.

385 Union Ave (Brooklyn)

6-story, 53,000 sf apt. bldg, 47 units total

Madison Realty Capital / n/a

City National Bank / n/a

The defaulted note on the property sold for $21.55 million. The original developers planned to sell the residential units as condominiums, but they defaulted on their loan in 2009, and the bank filed to foreclose the following year. City National had taken over the loan from the original lender, a failed bank, through the Federal Deposit Insurance Corporation, city records show.

40 Rector St

48,000 sf office condo

The China Institute in America / n/a

Philips International / Newmark Grubb Knight Frank

A two-level office space on the ground and second floors sold for $18.3 million.

290 West Street

Development site

VE Equities / n/a

Exxon Mobile / n/a

The development site sold for $15.46 million. The buyer is planning a luxury residential development on the site.

36-20 Bowne St (Queens)

6-story, 78,000 sf apt. bldg, 87 units total

Frey Management / Josh Orlander, GFI Realty

36-20 Bowne LLC / Shlomo Antebi, GFI Realty

The elevator building sold for $14.38 million. The price represents a gross rent multiple of 10.5.

131-137 Emerson Place (Brooklyn)

176,600 buildable sf development site

n/a / n/a

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

The development site sold for $13 million, or $74 per buildable square foot.

42 East 76th St

Comm. townhouse

The Hewitt School / n/a

n/a / n/a

The townhouse sold for $11.2 million, the Wall Street Journal reported. The purchase will allow the Hewitt School to expand its space by 25 percent.

218-220 Bowery

4-story, 17,000 sf hotel bldg

Alessandro Zampedri; Andrea Venturelli / n/a

n/a / Robert Burton, Massey Knakal

The property sold for $11 million. Formerly known as the Prince Hotel, the building has 13,000 additional square feet of air rights for future development.

Bronx portfolio

4 institutional bldgs and 5 vacant lots

Tuck-It-Away Self Storage / n/a

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

The package of Bronx properties sold for $10.85 million. The buildings and lots are located at 930, 950, 969-973 and 998 University Avenue.

900 Riverside Dr

6-story, 93,184 sf apt. bldg, 72 units total

900 Riverside Drive LLC / Aaron Jungreis, Rosewood Realty

900 Riverside Associates / Aaron Jungreis, Rosewood Realty

The property sold for $10.02 million. The building has two retail spaces: one occupied by a grocery store and the other vacant.

7 West 44th St

7-story, 15,740 sf vacant bldg

n/a / n/a

Kameda International / Peter Acocella, Prudential Douglas Elliman

The vacant property sold to a “Middle Eastern entity” for $9.75 million, the New York Post reported. The buyer plans to convert the property into a luxury hotel.

310 North 7th St (Brooklyn)

70,000 buildable sf development site

Private developer / David Behin, MNS

American Development Group / A. Smilovici, M. Fuller, GreinerMaltz

The property sold for $9.45 million.

78 July 2012 www.TheRealDeal.com

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Buys continued Address

Size

Buyer/ Representative

Seller / Representative

Notes

14 East 11th St

5,436 sf townhouse

n/a / J. Gomes, F. Eklund, Prudential Douglas Elliman

n/a / James Nelson, Massey Knakal

The property sold for $8.95 million, or about $1,646 per square foot.

155 Bleecker St

4-story, 7,200 sf apt. bldg, 3 units total

Trevi Retail / n/a

Avj Aurora LLC / n/a

The property sold for $6.97 million. The building has a bar on the ground floor with market-rate apartments above.

1045 Union St (Brooklyn)

5-story, 34,910 sf apt. bldg, 32 units total

Brooklyn Investment Fund / Samuel Kooris, Rosewood Realty

USH Associates / Aaron Jungreis, Rosewood Realty

The walk-up building sold for $5.3 million.

2505 Bedford Ave (Brooklyn)

6-story, 37,920 sf apt. bldg, 48 units total

n/a / Aaron Jungreis, Rosewood Realty

2505 Bedford LLC / Aaron Jungreis, Rosewood Realty

The elevator building sold for $5.2 million.

567 West 125th St

6-story apt. bldg, 22 units total

n/a / Eric Roth, Friedman-Roth Realty

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

The walk-up property sold for $5 million. The building has two retail spaces.

55 Ludlow St

5-story, 9,420 sf apt. bldg

n/a / Janine Young, Bond New York

Ludlow Tower Corp. / Janine Young, Bond New York

The loft building sold for $4.6 million. The property has a store on the ground floor.

51 and 53 Monroe St

Two 5-story apt. bldgs, 35 units total

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

The walk-up buildings sold for $4.4 million, or $228 per square foot. The price represents a gross rent multiple of 11.1.

4706-4712 Fourth Ave (Brooklyn)

Two 4-story apt. bldgs, 24,080 sf and 32 units total

n/a / n/a

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

The adjoining brick buildings sold for $4.4 million, or $174 per square foot.

96 Wadsworth Terrace

35,470 sf apt. bldg, 43 units total

96 Wadsworth LLC / Amit Doshi, Besen & Associates

n/a / Amit Doshi, Besen & Associates

The property sold for $4.38 million, or $123 per square foot.

124 West 16th St

4-story, 4,000 sf SRO bldg

n/a / n/a

n/a / P. Smadbeck, B. Emmetsberger, Massey Knakal

The former rooming house sold for $4 million, or $355 per buildable square foot. The sale of the property, which was delivered vacant, included 7,250 buildable square feet of air rights.

1711-1719 Carroll St (Brooklyn)

4-story, 33,616 sf apt. bldg, 42 units total

Local investor / David Scheer, Rosewood Realty

1717 Rochester LLC / Aaron Jungreis, Rosewood Realty

The walk-up building sold for $3.9 million. The property has four stores.

30 Henry St (Brooklyn)

Development site

n/a / n/a

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

The property sold for $3.5 million, or about $209 per buildable square foot.

1413-1425 Fulton St (Brooklyn)

Development site

Stath Realty Corp. / B. Leary, S. Kelly, C. Sendogdular, M. Dzbanek, CPEX Real Estate

Shiloh Realty Corp. / B. Leary, S. Kelly, C. Sendogdular, M. Dzbanek, CPEX Real Estate

The property sold for $3.3 million, or $76 per buildable square foot. The lot measures 10,247 square feet, and permits 43,037 square feet of buildable space as of right, or up to 57,391 square feet with inclusionary housing.

2207 Adam Clayton Powell Blvd

11,700 sf retail bldg

n/a / n/a

n/a / B. Leary, D. McCabe, T. Conan, CPEX Real Estate

The property sold for $3.1 million.

408 West 58th St

3,700 sf bldg

Claremont Hotel Inc. / n/a

Caribbean Cultural Center African Diaspora Institute / n/a

The townhouse sold for $2.5 million, the Wall Street Journal reported. The property, which was being used as a cultural center, will be converted into residences.

2556 Colden Ave (The Bronx)

5-story, 28,520 sf apt. bldg, 30 units total

n/a / Giuseppe Inglese, FriedmanRoth Realty

n/a / George Niblock, FriedmanRoth Realty

The walk-up building sold for $2.2 million.

137-139 West 25th St

6,000 sf office space

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

Sony / Brock Emmetsberger, Massey Knakal

The office space formerly occupied by Jive Records sold to the celebrity caterer for $2.1 million. The fourth-floor space will be used for a full kitchen, design studio and event space.

2229 Creston Ave (The Bronx)

5-story, 23,570 sf apt. bldg, 33 units total

Local Bronx investor / Samuel Kooris, Rosewood Realty

2229 Creston Partners LLC / Aaron Jungreis, Rosewood Realty

The walk-up building sold for $2 million.

906 East 180th St (The Bronx)

3-story, 15,228 sf mixed-use bldg

906 Holdings LLC / Samuel Kooris, Rosewood Realty

906 East 180th Street LLC / Aaron Jungreis, Rosewood Realty

The elevator building sold for $2 million. In addition to the residential units, the property has three office spaces and five stores.

1024 Gates Ave (Brooklyn)

Development site

n/a / Daisy Okas, Besen & Associates

The site sold for $1.9 million. The property, which has a four-story, 19,500square-foot bank building, has 85,765 buildable square feet.

11-13 St. Marks Pl (Brooklyn)

12,991 buildable sf development site

n/a / n/a

n/a / TerraCRG

The property sold for $1.65 million, or $127 per buildable square foot.

2475 Hughes Ave (The Bronx)

15,000 sf apt. bldg, 20 units total

KPP Hughes Avenue LLC / n/a

n/a / n/a

The property sold for $1.53 million. The price represents a capitalization rate of about 8.1 percent and a gross rent multiple of about 5.9.

1818-1824 Bath Ave (Brooklyn)

10,000 sf apt. bldg, 6 units total

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

The property sold for $1.4 million. The building has three stores and a parking lot with eight spaces.

976 Fulton St (Brooklyn)

16,800 buildable sf development site

n/a / n/a

n/a / Stephen Palmese, Massey Knakal

The property sold for $1.25 million, or about $75 per buildable square foot. The site consists of a single-story retail building.

2044-2048 Nostrand Ave (Brooklyn)

Two 6-story apt. bldgs, 12 units total

n/a / n/a

n/a / E. Gevinski, N. Mahedy, Massey Knakal

The two multifamily buildings sold for $1.16 million.

329 Pleasant Ave

Development site

n/a / n/a

n/a / R. Shapiro, T. Donovan, Massey Knakal

The development site sold for $1.13 million, or about $75 per buildable square foot.

617 Flatbush Ave (Brooklyn)

4-story apt. bldg, 13 units total

n/a / Marcel Fridman, Barcel Group

The property sold for $1.1 million.

Financing Address

Size

Borrower / Representative

Lender / Representative

Notes

500 West 30th St

386-unit apt. bldg

The Related Companies / n/a

New York State Housing Finance Agency / n/a

A $240 million loan was provided for the construction of the 32-story residential development, which will include 77 permanently affordable homes, as well as 7,293 square feet of retail space, Crainâ&#x20AC;&#x2122;s reported.

25 Sutton Place South

310-unit apt. bldg

Cannon Point North Inc. / n/a

NCB / n/a

A $17 million first mortgage and a $2 million line of credit were arranged for the building.

5 West 14th St

429-unit apt. bldg

5 West 14th Owners Corp. / n/a

NCB / n/a

An $11 million first mortgage and a $2.5 million line of credit were arranged for the building.

110-118 Riverside Drive

168-unit apt. bldg

110-118 Riverside Tenants Corp. / n/a

NCB / n/a

An $8 million first mortgage and a $1 million line of credit were arranged for the building.

155 East 76th St

120-unit apt. bldg

Queen Anne Apartment Corp. / n/a

NCB / n/a

A $5.3 million first mortgage was arranged for the building.

42-45 Kissena Blvd (Queens)

144-unit apt. bldg

Park Hill Owners Inc. / n/a

NCB / n/a

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

80 July 2012 www.TheRealDeal.com The

Announces the Acquisition of

1150 Avenue of the Americas 150,000 Square Foot Development Site

Morris Moinian of Fortuna Realty Group would like to thank

Eastern Consolidated for its role as broker in this transaction: Peter Hauspurg, Chairman and CEO Stuart Gross, Principal, Executive Managing Director Azita Aghravi, Principal, Senior Director

Real estate investment services

Financing continued Address

Size

Borrower / Representative

Lender / Representative

Notes

49 West 72nd St

78-unit apt. bldg

49 West 72 Owners Corp. / n/a

NCB / n/a

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

114 East 84th St

34-unit apt. bldg

Park 84 Owners Corp. / n/a

NCB / n/a

A $3.7 million first mortgage and a $500,000 line of credit were arranged for the building.

130 East End Ave

46-unit apt. bldg

130 East End Avenue Tenants Corp. / n/a

NCB / n/a

A $3.6 million first mortgage and a $500,000 line of credit were arranged for the building.

4315 Webster Ave (The Bronx)

78-unit apt. bldg

4315 Webster Owners Inc. / n/a

NCB / n/a

A $2.4 million first mortgage and a $300,000 line of credit were arranged for the building.

15 West 11th St

45-unit apt. bldg

15 Tenant Stockholders Inc. / n/a

NCB / n/a

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

68-20 Selfridge St (Queens)

88-unit apt. bldg

Thornton Tenants Corp. / n/a

NCB / n/a

A $1.3 million second mortgage and a $500,000 line of credit were arranged for the building.

215 West 105th St

29-unit apt. bldg

215 West 105th Street Owners Corp. / n/a

NCB / n/a

A $1.2 million first mortgage and a $200,000 line of credit were arranged for the building.

Other Deals Equity enters $250M contract for Beatrice, as apartment building prices surpass peak Sam Zell’s Equity Residential last month entered contract to purchase the 301-unit Beatrice apartment complex on Sixth Avenue for nearly $250 million, according to Crain’s. The transaction will mark the latest in a series of big apartment deals struck in recent months for record-high prices. The Beatrice, completed two years ago by J.D. Carlisle Development, is composed of 28 floors of rental units that sit above the 25-story Eventi Hotel at 835 Sixth Avenue near West 29th Street. The deal comes on the heels of a record quarter for Manhattan apartment trades. (The deal was announced after the deadline for the Deal Sheet.)

buy the Domino Sugar Factory site on the Williamsburg waterfront for $185 million, the New York Times reported. The deal, previously reported to be in the works for $160 million, gives new life to the planned $1.4 billion development of 2,200 housing units that was once thought to be dead. Developer Community Preservation Corp.’s financial difficulties stalled the development and threatened the inclusion of 660 affordable housing units and a waterfront esplanade it had originally planned to win local support. But years of real estate speculation during the boom pummeled CPC and forced it to default on the loans. (The deal was announced after the deadline for the Deal Sheet.)

SL Green’s 100 Church Street is 82 percent full, amid major lease renewal

Genome Center nears big lease at 101 Sixth Avenue

Once the butt of jokes, 100 Church Street is now completely stabilized under the stewardship of SL Green Realty, according to the New York Post. SL Green last month landed an early, 20-year renewal from the city’s Law Department for 372,520 square feet at the 1 million-square-foot-plus building, between Park Place and Barclays Street. In addition to bringing the tower to 82 percent occupancy, SL Green also refinanced the building with a 10-year, $230 million fixed-rate loan. (The deal was announced after the deadline for the Deal Sheet.)

After losing out to Cornell-Technion in its bid to build a technology campus on city-owned land, the New York Genome Center last month was close to signing for 150,000 square feet at Edward Minskoff ’s 101 Sixth Avenue in Soho, the Wall Street Journal reported. The center is a group of universities, medical centers and labs that conducts DNAsequencing research. The Journal said the group could help the city catch up in the field of genomic science, which involves using machines to analyze blood samples and decode a person’s entire DNA sequence. It is expected to create 2,000 new jobs in the next five years.

Swig Equities announces $161.5M refinancing of 110 William Street Kent Swig, the embattled president of Swig Equities, last month announced the refinancing of 110 William Street, a 900,000-square-foot office property located between John and Fulton streets in the Financial District. The total amount of the loan is $161.5 million, which was led by a $141.5 million first mortgage provided by UBS Real Estate Securities and Barclays Capital. In addition, Pearlmark Real Estate Partners provided a $20 million mezzanine loan, according to a release from Swig. (The deal was announced after the deadline for the Deal Sheet.)

Spanish tile company pays $40M for historic Madison Square Park building A Spanish kitchen and bathroom tile company purchased a historic Madison Square Park building for its U.S. headquarters last month. According to the Wall Street Journal, Porcelanosa paid $40 million for the 15,000-squarefoot building at 202 Fifth Avenue, between 25th and 26th streets. The building is engraved with a Commodore Criterion sign. The signage was a remnant of its former tenant, the Commodore Manufacturing Corp., which recently moved its headquarters to Brooklyn. (The deal was announced after the deadline for the Deal Sheet.)

Two Trees signs contract for Domino site Two Trees Development last month signed a contract to 82 July 2012 www.TheRealDeal.com

Waterman repositions Park Avenue tower following Syms departure Waterman Interests has proven successful in its stated goal of transforming the former Syms space on Park Avenue into a home for financial firms. The New York Post reported that Los Angeles-based City National Bank inked a 45,000-square-foot lease for retail and office space at 400 Park Avenue last month. The 15-year deal includes a renewal of CNB’s 15,000 square feet on the seventh floor, and includes a 5,400-square-foot ground-floor retail space, 15,000 square feet on the second floor and concourse space. (The deal was announced after the deadline for the Deal Sheet.)

Bloomberg officially unveils Related, Sterling’s Willets Point plan After spending two years cleaning up 23 acres of Willets Point, the Related Companies and Sterling Equities will start developing the site with a hotel and retail development just east of Citi Field on 126th Street, Mayor Michael Bloomberg announced last month in officially unveiling the plans for the 50-years-in-the-making, $3 billion project. The developers will start with $100 million in capital funds from the city to demolish faulty infrastructure, clean contaminated lands and build permanent improvements that form the groundwork of the project. Once complete, they’ll begin construction on a 200-room hotel and 30,000 square feet of retail and restaurants.

Home of U.S. Open to get $500M facelift The home of the U.S. Open, the National Tennis Center in Queens, is set to get a $500 million facelift, Crain’s reported last month. The renovation plans include the reconstruction of two stadiums and the addition of seating for the annual Grand Slam. The U.S. Tennis Association hopes to start construction in 2013 and complete all the upgrades by 2018. Construction will help accommodate an extra 10,000 people per day during the two-week Grand Slam on top of the current average total attendance of 700,000.

Five floors of Madison Avenue offices nets $60.8M for the New York Public Library The New York Public Library last month sold five floors of a Madison Avenue building for $60.8 million, according to the New York Post. The third through seventh floors of the Science, Industry and Business Library at 188 Madison Avenue near East 34th Street was purchased by the Church Pension Group, which will use the space as its headquarters. The space comprises 140,000 square feet and only the fifth floor is currently occupied. CPG, which handles investments for employees and clergy of the Episcopal Church, plans to sublease its existing offices at 437 and 445 Fifth Avenue upon moving into the Madison Avenue property. (The deal was announced after the deadline for the Deal Sheet.)

Third Avenue could get office boost from Salesforce.com

Once-stalled boutique hotel back on track

Third Avenue’s slumping office market looks like it might finally catch a break. Salesforce.com last month was on the verge of signing a lease for 100,000 square feet at 685 Third Avenue, Crain’s reported. The near-vacant, 650,000-square-foot office building, between East 43rd and East 44th streets, was formerly Pfizer’s headquarters. TIAA-CREF bought the building for $190 million in 2010 and flipped a 49.99 percent stake a year later to Australia’s Future Fund Board of Guardians for $100.3 million. (The deal was announced after the deadline for the Deal Sheet.)

Plans for a new, 260-room hotel at 11 East 31st Street are back on track, thanks to a cash injection from a Londonand Hong Kong-based alternative investment firm, an investor in the project told The Real Deal last month. Cube Capital purchased the 2,156-square-foot site from Geolo Capital for $13.5 million last month in partnership with developer Simon Development Group, according to public records filed with the city June 20. Minority investors in the deal include Eagle Point Hospitality Partners and KSNY. (The deal was announced after the deadline for the Deal Sheet.) TRD

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Dodd-Frank

from page 18

In addition, sources say, the change will result in a reduced incentive for some developers to take risks on new buildings. Nabbing a share of the upside is “the only way to get compensated,” according to Hauspurg. Adding to the uncertainty around these changes is that, like other parts of Dodd-Frank, it’s not yet clear exactly which companies will be deemed “funds” and thus impacted. The Volcker rule was originally proposed by Paul Volcker, a former Federal Reserve chairman who President Barack Obama also appointed to a panel of economic advisors. The rule — which is designed to prevent banks from making speculative bets — is scheduled to go into effect this month and bans “proprietary trading,” meaning that banks can no longer invest their own capital in funds they operate. Proponents say the Volcker rule will prevent banks from becoming “too big to fail,” by eliminating some of the riskiest trades, which only became legal after the repeal of the Glass-Steagall Act in 1999. They note that Volcker is meant to prevent banks from needing additional bailouts on the taxpayer’s dime. Still, that could mean the closure or selling off of many private equity and hedge funds that invest in real estate funds operated by banks, sources explained. As a result, funds like Goldman Sachs’ Whitehall and Morgan Stanley’s MSREF would need to be sold, dissolved or spun off into separate companies with no formal relationship to the bank. Nonbank fund sponsors — such as the Blackstone Group, Apollo, the Carlyle Group and Colony Capital — could end up buying that business. “It could create a consolidation in the market,” explained Evan Levy, a partner at Skadden, Arps, Slate, Meagher &

Flom. Or another new ownership structure could be invented to fill the vacuum, Levy said. He noted that there are exemptions for real estate in the Volcker rule, and banks are in the process of investigating whether their funds can qualify for them. A major element of concern for real estate pros is DoddFrank’s impact on construction lending. The law puts new restrictions on “high volatility commercial real estate loans,” which may be interpreted to include certain construction loans, experts explained. The rules are intended to force banks to assess risk more carefully. While not all construction loans will be deemed high volatility — and the definitions are still in flux — a speculative office building will almost certainly be put in the category, while a preleased warehouse, for instance, will not, experts said. Instead of the 8 percent reserve banks now must hold on their books for each loan they issue, when these rules go into effect next year banks will be required to hold 12 percent. The idea is that they’ll avoid loans that are too risky in favor of more conservative loans because they’ll have more money on the line. But Richard Podos, president of New York–based Lance Capital, a real estate finance company, argued that the requirement could cause capital to dry up for developers. The lack of capital would not only hurt real estate developers, but community banks for whom small-to-midsize construction loans are the bulk of business as well, Podos said, adding that nationwide, community banks do 40 percent of construction lending. The change could also mean less development in New York’s outer boroughs, where smaller developers, who are

more reliant on construction lending, tend to do business, he said. Large REITs, like Brookfield, for instance, will do “whatever they need to do to make sure their construction loan is not deemed high volatility,” Podos said. Perhaps most significant in its ramifications for real estate are the new constraints that Dodd-Frank will create for the commercial mortgage-backed securities market. CMBS currently help facilitate the cost of commercial lending, traditionally for projects and building purchases outside of the “trophy range.” But new restrictions on CMBS could cause tighter lending for deals where loans are repackaged and resold, experts said. Dodd-Frank requires mortgage originators to retain 5 percent of any loans they repackage and sell off. That means investment banks will “likely be knocked out of the CMBS game,” said Stuart Eisenberg, a partner at BDO, an accounting firm with a substantial corporate real estate practice. Investment banks “don’t want to accept the low yield for the high risk” that CMBS will present once risk retention goes into effect, he explained. Martin Schuh, assistant vice president for government affairs of the CRE Finance Council, said risk retention rules will likely be finalized in the third or fourth quarter of 2012, and won’t be implemented until 2013. Greenberg Traurig’s Ivanhoe said legislators’ hearts are in the right place with new requirements, but implementation could mean more pain for the industry. While he believes the new rules help eliminate moral hazard, they could also inhibit real estate lending. “It could be devastating for the economy and growth,” he said. “Most people would say they have gone too far.” TRD

Whitestone Realty Group, Inc (212) 662-1300

We are aggressively looking to purchase off market multifamily large or small apartment and ofﬁce buildings in the 5 boros of NYC and NJ • Top Dollar Paid • No Mortgage Contingency / Quick Closing • Brokers Welcome Nathan Blatter Head of Acquisitions handled the following transactions that signed or closed in the last 60 days in 2012:

MANHATTAN

BROOKLYN

NORTH BRONX

MANHATTAN

BROOKLYN

QUEENS

$20,000,000 Midtown-Development Site Signed April 2012

$84,000,000 Package of prime buildings of non-performing notes Signed May 2012

84 July 2012 www.TheRealDeal.com

$19,000,000 2-6 story pristine elevator buildings in upper class neighborhood Contract signed April 2012 $9,000,000 6-story pristine elevator building Contract signed March 2012

$2,000,000 20 unit building in upper class neighborhood Closed March 2012 $10,000,000 6-story pristine elevator building in prime upper class neighborhood Contract signed March 2012

$6.6 Million Pristine 6 story elevator building Contract signed 4/16/12

$10,000,000 Pristine elevator building Signed Feb 2012

www.TheRealDeal.com October 2009 95

Commercial market

from page 24

Downtown Downtown — which has been the weakest market among the three for much of the past several years — got a lift last month. Indeed, it played host to Manhattan’s two largest deals. Both of those leases were renewals inked by the City of New York. The ﬁrst was for 373,000 square feet at SL Green Realty’s 100 Church Street and the second was for 208,000 square feet at 75 Park Place, owned by Jack Resn-

ick & Sons. Smaller ﬁrms — including some real estate players — contributed to the Downtown leasing totals, too. Bogod’s A&I Broadway Realty, for example, signed a lease for 2,000 square feet at 150 Broadway, relocating from 170 Broadway, which was sold in December 2011 and is being converted to a hotel. (A&I was forced out of two other Downtown locations — one of which was converted to condos, the other

which was demolished for a new development.) The brokerage’s new space is on the eighth ﬂoor at 150 Broadway, and had an estimated rent of $33 per foot, ﬁgures from CoStar showed. Overall, June was a positive month for the Downtown market, with the availability rate declining by 0.2 points to 10.6 percent and the average asking rent rising by $0.21 per foot to $38.28 per foot. TRD

don & Co. purchased this converted rental property — a former industry printing house — for $67.6 million from Mountbatten Equities. The purchase included the roughly 105 rental units in the 183-unit building. Mountbatten had previously sold the remaining units as condos. The January sale came shortly after Mountbatten and Taconic Investment Partners settled a lengthy legal battle over the property. Taconic claimed it had a deal to buy the apartments for $77.25 million in 2010, but that Mountbatten reneged and was only using the company as a “stalking horse” to find a rival bidder. The new owners, who ended up paying nearly $10 million less than what Taconic was supposed to pay, are now ready to sell the remaining units as condos. They’ve hired rental-tocondo conversion specialist Myles Horn, principal of MJH Birchwood, and sales are set to begin in September. Ninety-five of the apartments in the building will be upgraded, and some will be combined to form larger units, The Real Deal has reported. It is unclear exactly how many units will be hitting the market in total, however. Tricia Cole of Corcoran Sunshine is advising the owners on sales and marketing strategy. However, Corcoran Sunshine is not officially handling sales at the building yet.

store in the area earlier this year by arranging ﬁnancing for the retailer who was having trouble making rent payments.

345Meatpacking (37 units), 345 West 14th Street, Chelsea

150 Charles Street (98 units), West Village

New development from page 50

his conversion of the Verizon building in Chelsea, designed in 1929 by architect Ralph Walker, came on the market last month, with 50 condo units priced between $3,000 and $10,000 per square foot. Units range in size from 1,350 to 6,500 square feet. The project is a joint venture between Michael Stern’s JDS Development and the acquisition and development firm Property Markets Group. It was financed in part by Barry Sternlicht’s Starwood Capital. Core brokers Vickey Barron and Emily Beare are heading up sales. Architecture firm Cetra/Ruddy oversaw the conversion of the building to condos. Verizon, which previously used the 24-story building to store copper wire for landlines, is retaining ownership of the second through seventh floors, which it will use as offices.

SELECTED PROJECTS IN THE PIPELINE 250 East 57th Street (320 rentals/condos), Midtown

his $700 million, 1 million-square-foot, mixed-use project is currently rising at 250 East 57th Street and Second Avenue. It’s a partnership between the WorldWide Group, headed by Victor Elmaleh, and the Educational Construction Fund, a government fund that encourages development that includes new schools. ECF, which owns the land, in 2006 selected World-Wide to develop the 1.5-acre site. The project is slated to include a Whole Foods Market, two new schools, a 59-story residential tower with 320 rental and condo units and an additional 78,000 square feet of retail. The new, 38,000-square-foot Whole Foods is scheduled to open in the fall, while the residential units will be completed in a second phase of development beginning by the end of the year. Stribling Marketing Associates has been tapped to head up sales. A spokesperson for World-Wide said it was not immediately clear when sales would begin.

211 East 13th Street (82 units), East Village

ew Jersey–based Ironstate Development is partnering with developers Charles Blaichman, Abram Shnay and Shnay’s son, Scott, on this condo building, which is slated for completion next year. The developers bought the lots that comprise the site for $33.2 million last October from Builtgross Associates, which had owned them since 1986. The project, designed by BKSK Architects, will feature a mix of studios and one-, two- and three-bedroom apartments, plus 4,500 square feet of ground-ﬂoor retail space on East 14th Street. The Marketing Directors will handle sales at the building, which is slated to break ground this summer. Sales will launch in the spring of 2013, according to the sales team. Ironstate was not immediately available for comment.

The Printing House (TBA units), 421 Hudson Street, West Village

n January, a group led by real estate investment fund Belvedere Capital and private equity ﬁrm Angelo Gor-

hirty-seven luxury condos are slated to be built at the site where rapper Jay-Z and hotelier Andre Balazs tried and failed to build a hotel. After the investors defaulted on the property’s $52 million senior loan in August 2009, Jay-Z reached a settlement with the lenders and deeded the property back to them for the value of the senior mortgage. DDG Partners, the developer of 41 Bond Street, then acquired the project’s loan at a discount from Capital Source Finance and took control of the site in 2010. The condo units are slated to come on the market by the ﬁrst quarter of 2013, according to Joe McMillan, CEO of DDG.

The Toy Building (145 units), 1107 Broadway Flatiron

he Witkoff Group is working on a highly anticipated condo conversion of this former International Toy Center building, but it’s not clear when the units will hit the market. Witkoff, which acquired the 16-story property from the now-defunct Lehman Brothers in a one-day auction last September, will reportedly convert the building to 145 condos. The company, headed by Steven Witkoff, reportedly paid $190 million for the building, and is planning to plow another $100 million into renovations. According to news reports, a Morgan Stanley real estate fund is providing ﬁnancing for the conversion. The building has been vacant since 2007. It was previously owned by Tessler Developments, but was returned to Lehman, its lender, when Tessler defaulted on its loan in 2010 — two years after Lehman declared bankruptcy. (Lehman emerged from bankruptcy last year and is now in the process of liquidating its assets.) Witkoff did not respond to requests for comment.

n the next few months, Elliman agents Leonard Steinberg, Raphael De Niro and Darren Sukenik will start marketing a new condo conversion at 150 Charles Street. The conversion, also a Witkoff Group project, will have 98 units. Pricing has not yet been released. The property was formerly the Whitehall Storage building. The new Cook + Fox–designed building, which retains the warehouse’s old three-story façade, is slated to add up to 20 stories, according to news reports. Not surprisingly, Witkoff has faced criticism from the local community over the proposed height. Neighbors argue that the addition will block light in their buildings. Plans also call for a series of waterfalls cascading from the roof to the street level of the building.

The Madison Jackson (110 units), 371 Madison Street, Lower East Side

Brooklyn from page 51

ales at Michael Bolla’s 110-unit condo project were supposed to launch this spring, but were bumped back to the summer, according to a spokesperson for Bolla, who did not respond to a request for comment on the reason for the delay. A managing director at Elliman, Bolla — who had previously restored a historic townhouse in Chelsea — partnered with the Sung family on this Lower East Side project. The six-story building, which was formerly home to a school, will offer loftlike units ranging from 700 to 1,600 square feet. There are also plans for a 7,000-square-foot penthouse. Prices are slated to start at $542,000. As previously reported, the building will be designed to appeal to the Orthodox Jewish community with 24-hour kosher and vegan food service, and a pool with designated single-gender swimming hours. Bolla also stepped in to save a Judaica

he Stahl Organization broke ground earlier this year on a 590-foot residential tower at 388 Bridge Street. The SLCE Architects–designed skyscraper is slated to include 34 rental units and 144 condos. The $265 million project has been in the planning stages for several years, with the developer painstakingly assembling batches of air rights. According to news reports, a loan from an investment group led by M&T Bank at the end of last year ﬁnally allowed the development to move forward. Upon completion in 2013, the building will be the tallest in the borough, but not for long: Just across the street at 88 Willoughby, AvalonBay Communities is planning a 596foot, 860-unit rental tower. Construction on that project is not slated to begin until the end of the year. Stahl did not immediately respond to a request for comment. TRD

www.TheRealDeal.com July 2012 85

One-man band

from page 38

Modlin’s client list is said to include Fortune 500 CEOs as well as celebs like Christy Turlington, Will Smith and Alex Rodriguez (though Modlin is notoriously famous for declining to identify his clients). In order to get new clients, Modlin said he relies almost exclusively on “warm introductions” from high-profile contacts and associates; he almost never represents walk-ins or strangers. To make sure there are plenty of these introductions incoming at all times, Modlin said he accepts almost every social invitation he receives. “In a business that relies on finding new clients, it’s up to you to put yourself in a setting where you can meet people and be introduced,” he said. “You want to spend your time in places that attract the right kind of person. Is it the bar at the Four Seasons hotel? Is it a private club? Is it a museum benefit?” Even off the clock, it’s important to look the part, said Modlin, who often sports a Rolex watch and clothes by de-

signer Tom Ford. “Your image and how you present yourself are everything,” he explained. “You can bump into anyone in New York, and you should be prepared.”

The downside Having a very small firm has some downsides, of course. It’s harder for independent brokers to get the exposure for their listings that large firms can provide, brokers said. “We definitely don’t touch as many people or as many deals as larger companies have the capability to do,” Modlin said. Joanna Cutler, a former model who now heads Joanna Cutler Real Estate, readily admits that when it comes to marketing properties to the widest audience possible, she occasionally relies on help from friends at the city’s major firms, like Prudential Douglas Elliman and the Corcoran Group.

“I feel fortunate enough to have a very friendly business relationship with [the Corcoran Group’s] Carrie Chiang and [Brown Harris Stevens’] Paula Del Nunzio,” Cutler said. “If I think they can help, I’ll sometimes invite them to do a coexclusive,” she said. The leaders of tiny firms also end up doing more administrative tasks than brokers at large companies. When asked why she sticks with Elliman rather than going out on her own, Joan Swift, the firm’s No. 1 broker last year, told The Real Deal that she values the administrative support that comes with being part of a larger operation. “They handle all the administrative stuff, so I have more time to concentrate on what I really need to do,” she said. For top brokers at big firms, the feeling of being top dog is also attractive, LeDon said. “There’s an element of them being a star in that environment,” he said. By contrast, “no one’s clapping for me — I’m alone all day long.” TRD

Avison from page 61 bought another company.” These critiques are all challenges Avison’s principals insist they’re well aware of. Certainly, Rose is no neophyte to the real estate big leagues. He was Grubb & Ellis’s CEO from 2005 to 2008, and both chief operating officer and chief financial officer of the Americas operation at JLL, where he spent 12 years. And brokers elsewhere in the U.S. appear to have responded to his pitch. In his four years at the helm, he’s also grown the company from 300 to almost 1,000 real estate professionals. Rose said Avison is investing much of its profit (he declined to reveal numbers) to finance its current expansion. He said the company also tapped its original 53 partners and 290 employees to put up their own funds, adding an additional $10 million to the pot. The amount of money each partner and staffer put up varied, with each receiving ownership shares proportional to their investments. In October 2011, Avison also agreed to sell a minority stake in the company to the Vancouver-based private equity firm Tricorp Pacific Capital, raising upwards of $40 million. (Employees and partners still own about 73 percent of the firm.) Rose — who said he and his team have “literally handpicked all of the [new U.S.] partners” — noted that he’s not trying to replicate what the existing commercial firms are doing. “We don’t want the scale of the two largest companies — we think that CBRE and JLL are too big,” he said. “They have between 40,000 and 60,000 people, and everybody’s territory is so small right now and there is so much internal competition. That is not our model.”

Manhattan expansion Kraut, an established, mid-level broker, said he was happy at CBRE when he was put in touch with a friend-of-a-friend who had recently signed on in Avison’s Washington, D.C., ofﬁce. Kraut — whose big deals include representing Time Warner Cable for 37,000 square feet at 1633 Broadway in 2010, along with David Hollander, and working on Siemens’s 50,000-square-foot deal at 498 Seventh Avenue last year — said he wasn’t looking to move. But after a lengthy conversation with the tenant rep broker (a newly minted partner), he began to consider it. “I said, ‘You know what? This is going to work,’ ” Kraut recalled thinking. He signed on last September and set to work selling oth-

86 July 2012 www.TheRealDeal.com

ers on Rose’s vision. Avison initially focused on setting up a New York infrastructure that would quickly put the company in the commercial leasing game with analysis, marketing and financing expertise to back up brokers. One of his first hires was Jim Delmonte, vice president of research at JLL, and his team. Soon after, he recruited Elliot Baum, former head of marketing at Colliers. He hired capital markets experts David Eyzenberg, former head of commercial real estate at NewOak Capital, and vice president of investment banking at Madison Capital Group; Justin Piasecki, a senior vice president at investment bank Carlton Group; and Amy Levenson, a Goldman Sachs veteran. Other hires include two high-powered Grubb & Ellis brokers, Michael Gottlieb and Martin Cottingham. But it’s Mirante who may make the biggest difference, most agree. A number of brokers and executives in the industry said his arrival added a sheen of credibility to Avison’s local efforts. During his 20 years as Cushman CEO, Mirante grew the company’s revenue from $100 million to almost $1 billion, according to published reports quoting his company’s chairman. Mirante also played a key role in selecting his successor Bruce Mosler, after grooming him for the position. (The two joined forces to form a brokerage team in early 2011, after Mosler stepped down as CEO.) Rose contacted Mirante in early April. The two had met when Mirante was Cushman’s CEO and Rose was heading up JLL. They met for drinks at the Metropolitan Club. “Frankly, I was part of a 13-person brokerage team at C&W, and we were doing very well, working on Manhattan West, probably the most significant leasing agency for Brookfield,” Mirante said. “I wasn’t looking to move. But I listened very carefully to [Rose’s] vision. I was very intrigued.” Mirante said Avison’s partnership structure reminded him of the way Cushman was structured before it was bought by an Italian parent company, Exor. And he was also impressed by the other prominent executives who joined Avison offices in Chicago, Washington, Houston and San Francisco. The idea of building a tri-state operation “as I once did a long time ago” was “pretty exciting for me,” he said — especially with an energetic young partner to help carry much of the load.

Playing for equity Rose, Mirante and Kraut would not say how much they are

paid — or how much the company is paying to lure brokers over. “I would say it’s competitive,” Mirante said. “The bonuses are intended to make up for the lost income that the brokerage professional is going to have to expect by changing firms. But I can assure you, we’re not paying people any more than they could get anywhere else.” Hires are “not coming on board here for the cash,” Kraut said. “They’re coming on board for [the] culture and for the equity. We’re building a business. You can make current comp anywhere you go, but with equity you have the chance to make real money for your family for the next couple of generations.” During the first two years of his five-year expansion plan, Rose said, the firm’s original partners have done extremely well. In addition to earning a normal commission split of about 56 percent, they have received an undisclosed portion of the company profits through cash disbursements. The value of the shares they own in the company, meanwhile, has skyrocketed as the company’s size and revenues continue to grow. Taken together, these cash disbursements and paper equity profits more than double the amount the average Avison broker has made on commissions, Rose said. Overall, of the firm’s almost 1,000 employees, about 140 are now partners, Rose said, another 30 to 50 have partner shares, and the other 80 percent have the chance to become a partner. And the goal in the next five years is to be “many multiples of our size in terms of people and revenue,” he said. Currently, Avison has about 10 principals in New York, a total that will likely reach as high as 30 in the next two years. Mirante said the firm’s capital markets group recently won the assignment for a job finding a joint venture partner for a $75 million-plus, four-acre residential development site on the East River in Astoria, Queens. Meanwhile, Avison’s note-sales group has been hired by seven banks to sell debt on properties ranging from $5 to $40 million. And the investment sales team has the exclusive agency for three sellers on New York office buildings ranging from $30 to $100 million. Rose said he hopes to grow the company as a whole to revenues of upwards of $500 million by 2013 or 2014. And Mirante said they’re looking to build the company’s tri-state revenue to above $100 million over the next five years. “We got a shot at being number four or five in the market,” said Mirante. TRD

www.TheRealDeal.com January 2012 00

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Naftali

from page 41

Another likely reason for the emphasis on rentals, sources noted, is that it’s currently easier for developers to finance rentals than condos, where lenders want 40 to 50 percent equity, compared to 5 or 10 percent in the past. Still, the Naftali Group does have at least one upcoming condo project in the works. With equity partner Praedium, the company recently closed on a deal to build a boutique condo at 176 West 82nd Street, at the corner of Amsterdam Avenue. Stribling, the brokerage that marketed the Plaza, has been tapped to handle sales of the building’s 12 to 14 units, said Naftali. The team is “really excited” about the project, Naftali said, because there’s very little new condo product on the Upper West Side. Or, in the words of Stribling founder Elizabeth Stribling, new condos in the neighborhood are “as scarce as hens’ teeth.” The team is currently determining the appropriate unit mix for the project, she said. The Naftali Group is also slated to close this month on a deal to build a 150,000-square-foot, 30-story tower in the Financial District, but Naftali said he could not yet disclose details. The firm is also working on creating a platform to do deals outside New York City, he said, most likely multifamily properties along the East Coast. And it isn’t wedded to doing residential deals. “If tomorrow we find an opportunity in office space, we have the experience, we know how to do it, we’ll go after it and we’ll do it,” Naftali said.

Plaza problems A native of Tel Aviv, Naftali started working as a property manager to pay his bills while in college at the University of Southern California. He worked with Tshuva for 21 years before launching his own company. Bespectacled and seemingly mild-mannered, Naftali is “disciplined and energetic and a workaholic,” said Dana Pecorella of the brokerage Cantor-Pecorella, who has worked with Naftali on a number of projects over the years. While at Elad, Naftali developed many New York condos, including the 215-unit Link at 310 West 52nd Street, the Grand Madison at 225 Fifth Avenue, the O’Neill at 655 Sixth Avenue and the 50-unit 21 Astor Place. Naftali “was absolutely integral to Elad’s emergence in the U.S. real estate market,” said Thomas Elliott, executive vice president of sales and marketing at Elad US, who worked with Naftali for 10 years. He added that Naftali is “one of the smartest guys out there.” (Elad declined to comment further for this piece.) But Naftali’s best-known — and most controversial — project was the Plaza. As The Real Deal and others have reported, problems quickly arose after Elad purchased the beloved centuryold hotel and announced plans to convert it to condominiums. When Elad attempted to ﬁre the Plaza’s 900 hotel workers, it locked horns with the hotel workers’ union, which helped launch a high-proﬁle “Save the Plaza” campaign. Celebrities like Matthew Broderick and Liza Minnelli got involved, and Mayor Michael Bloomberg publicly pledged to help Plaza employees keep their jobs. Eventually, Elad agreed to scale back its plans, limiting the number of condos to 180 and keeping 282 hotel rooms. Then came the much-chronicled lawsuits, with unhappy buyers — like Russian billionaire Andrey Vavilov — claiming the apartments weren’t up to snuff.

And in 2011, the Plaza’s storied Oak Room bar and restaurant announced that it would close, following a bitter rent dispute with Elad. Naftali left the company shortly thereafter, leading to widespread speculation that troubles with the Oak Room and other retail vacancies at the Plaza had led to his ouster from Elad. All along, Naftali has firmly denied that version of events. “This is so ridiculous, about the retail or the Oak Room,” he said. “I don’t know who invented that story. Look, I left.” He’d long wanted to start his own company, he said, but felt he had to wait until the Plaza and 250 West, the Tribeca condo conversion, were on firm footing. “I didn’t want to leave and to basically create a situation where they [were] not ready,” he said. And while he acknowledged the challenges at the Plaza, he emphasized that the development was hugely profitable. “There is no one opinion, definitely not on something like the Plaza,” he said. “But on the business side, on the development side, on what we achieved there, the fact that we got it done — all that is a great success.” The numbers don’t lie. Elad put some $1.1 billion into the Plaza, between buying it for $675 million, converting it to condos and restoring public spaces like the Palm Court. Some 51 hotel-condo units were then sold for around $200 million. When the condos hit the market in 2005, they quickly sold out for what Naftali says was as high as $7,000 per square foot. If Sahara India Pariwar pays, as expected, $575 million for Elad’s stake in the hotel and retail, that’s a total revenue of some $2 billion, netting Elad around $1 billion. “Yes, some people might say, ‘Oh, we don’t like the interior design,’ ” Naftali said, careful to note that he himself did not design the interiors. (That duty fell to Tshuva’s 35-yearold daughter Gal Nauer, who worked on the project with the prolific architecture firm Costas Kondylis.) “But financially, it was an amazing deal.” Still, the Plaza was not the only boom-time Elad Properties project to see lawsuits related to construction complaints. In 2008, a penthouse buyer at the Grand Madison at 225 Fifth Avenue sued Elad for $6.4 million, claiming fraud and breach of contract because the unit was supposed to have “breathtaking” views, but the windows were blocked by a wall. (Elad called the suit baseless.) And in 2009, the owner of the penthouse at the O’Neill Building sued the building’s condo board, saying the unit was “plagued by leaks” and that “the unit and the building have been overrun by mice and rodents.” Still, lenders and equity partners seem willing to give Naftali the benefit of the doubt, especially since he has a history of completed projects. The Plaza “was a fancy deal, but he did other deals where they bought, built, sold, made money and paid back the lenders,” noted Miller. “That’s very important.” Lenders these days are also very interested in “surety of closing,” he said, which the Naftali Group also seems to have in spades. Naftali is “lining up the money, he’s got the expertise and they’re getting cheap money,” Miller added.

Back to development Some in the real estate community say that Naftali — and Elad — have been unfairly blamed for problems at the Plaza. The Marketing Directors’ Andrew Gerringer noted that

the constant comparisons to the Zeckendorfs’ massively successful 15 Central Park West are somewhat flawed: That condo was a new, ground-up project, while the Plaza was a conversion of a historic building, which makes construction notoriously difficult. “With a conversion, you don’t know what’s lurking behind the walls,” said Gerringer, who added that he’s had similar experiences at projects like 260 Park Avenue South. “So many things can come up in a building. You don’t know what’s going to happen. Before you buy it, you can’t open up every wall.” Pecorella, who worked as a marketing consultant at the Plaza, said the building was in disrepair when they bought it, and that Elad preserved as many original details as possible. “I don’t think they got the credit that they deserved,” she said, noting that “everything that was salvageable was salvaged.” She added that she was “heartbroken” during the controversy. Naftali, too, seemed heartbroken — and angry — during the hue and cry over the Plaza. In a 2009 Vanity Fair article, he said of Vavilov: “Personally, I’m really upset with that because not only that he doesn’t close, he also ruined my reputation, our reputation, and frankly he ruined the value of the penthouse.” Now, however, he seems much more at peace with the situation. His office is adorned with artifacts from the original hotel, images of Eloise, the Plaza’s famous fictional inhabitant, and a black-and-white photo of the building under construction in 1906. When asked if he felt he was unfairly blamed for problems at the Plaza, Naftali said, “I don’t know if it is unfair. When you are in the position where ... everyone sees you as the one who makes each and every decision, you have to be open to be criticized. ... The reality is you’re not making all the decisions; you’re not making all the decisions that relate to design, for example. But that’s okay; that’s part of being involved.” His job at Elad also involved “a lot of things that were not really part of what I like to do.” In 2010, for example, he took Elad Canada public, spending a year on the IPO process. Now he’s free to focus on his first love: development. “I’m very passionate about developing things, working with the team, creating a vision and getting it done,” he said. “When you have such a big organization, there are so many other things that you need to deal with that are not necessarily related to the development side. That’s why it’s great here. At the end of the day, what we do is what we really like to do.” To keep it that way, he wants to keep his current company small and efficient. “I have no vision right now to have 200 people here,” he said. “It [would be] too big and complicated, and political. Who needs it?” TRD

C O R R E C T I O N S A N D C L A R I F I C AT I O N S The “At the desk of” feature in the June issue of The Real Deal incorrectly stated that the Carlyle Group is a client of Herrick, Feinstein’s. A story in the June issue of The Real Deal, “Doing deals in pajamas,” mistakenly used the address 202 Chambers Street in citing deals done by Prudential Douglas Elliman’s Laura Cao. The correct address is 200 Chambers Street.

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Flipping

from page 28

comment or did not respond to requests for comment. Meanwhile, lenders such as Deutsche Bank or Credit Suisse’s DLJ Mortgage Capital, as well as government-supported enterprises such as Fannie Mae, sold many of these outer-borough properties to these investors. Other sellers include financial firms like the now-defunct GRP Financial Services, which was acquired by Sallie Mae in 2005 and liquidated at the end of 2009. Douglas Lombardo — a former GRP employee who now has his own real estate firm called Stone Bay Realty Services in the Bronx — said GRP hired local brokers to market the properties. He estimated that it spent roughly $60,000 on average getting them in shape to sell to homeowners. “In the New York area, it was very rare that a foreclosed property was in good shape,” he said.

How it works The ability to buy these distressed outer-borough homes in bulk appears to be aided by insider-baseball-type connections to lenders, a deep knowledge of home values and access to equity and debt. After acquiring the title from the lender or distressed homeowner, the investment ﬁrm can either take out a loan on the property or, far more frequently, keep it as an all-cash investment. Either way, the investors generally pay between $170,000 and $250,000 for each home and hold them for between four and 10 months, according to TRD’s review. It is unclear how much capital these companies are spending on home renovations to prepare them for a higher-priced resale. One industry player, who asked not to be

identified, put the figure somewhere between $40,000 and $100,000, plus “the closing costs are close to 6 percent, and we typically pay about a 6 percent [brokerage] commission.” A review of several dozen of the hundreds of flips TRD found reveals investors filed very few permits with the city Department of Buildings. Also, TRD’s analysis only found one firm that was frequently obtaining mortgages. Yavne Management often received loans from groups such as Bayport Funding, based in Great Neck. A look at one Queens property offers a window into the outer-borough flipping sector. It started way back in April 2006, when a female buyer paid $400,000 for 148–20 112th Avenue, a 1,600-squarefoot, single-family home in South Jamaica, a bit more than a mile north of John F. Kennedy Airport, data from PropertyShark shows. At the same time, she took out two mortgages totaling $400,000. She defaulted, and the lender — Fremont Investment & Loan — filed to foreclose in 2008. In 2009, Fremont transferred the loan to Colorado-based Residential Mortgage Solutions. Then, in late 2010, the house was put up for sale at an auction with a lien of $444,808, but RMS took it back, turning it into an REO. Just over a year later, in January 2012, RMS sold the property to Barca Development for $181,000. That’s when the flipping opportunity ripened: five months later, Barca sold the home for $356,500, city records show. The flip yielded Barca a gross profit of $175,500.

DOB does not show any permits ﬁled over the past 10 years on the house, so it is unclear how much Barca spent, if anything, on rehabilitating the home.

Not without controversy The local distressed-home market was tainted with a scandal nearly two decades ago. Twenty-five brokers and investors admitted to rigging bids at Queens foreclosure auctions between 1986 and 1997. Some housing advocates say the high margins on today’s flips could be a red flag indicating manipulation of the market, or could simply be an indication that the properties need a lot of work. Meanwhile, academics are studying the REO market and its impact on residential neighborhoods. New York University’s Furman Center for Real Estate and Urban Policy published a report in May that found only three firms purchased more than 10 REO properties in 2010 and 2011 in the outer boroughs. That suggests that most of the purchases were made by smaller companies. However, the study did not analyze the individual investment firms buying and selling the homes that were often achieving the hefty markups. “It definitely warrants further research. It does seem like either the banks are trying to get them off their books and the investors are putting in the necessary work, or perhaps Fannie [Mae] and Freddie [Mac] are not marketing their properties quite as aggressively as they could,” said Furman Center research analyst Max Weselcouch. TRD

Canal Street from page 45 ing last names, a review of city record shows. The Chong family, which is Chinese American, is rehabbing the retail space in the mixed-use 265 Canal Street despite not having a signed tenant. “You see a shift. The change is coming from the west,” said Philip Chong. His family, which bought the building in 2000, is in negotiations with a tenant for the 13,000-square-foot, ground-ﬂoor space, he said. With 100 feet of frontage on Canal, it’s one of the largest spaces on the stretch and is the largest undergoing a remodeling now. Laboz is also doing construction at 257 Canal.

Change is coming Historically, owners on Canal have rarely put their properties on the market. But that is starting to change, opening the door for larger owners. Certainly, the surprise move by Vornado — which normally goes after far bigger buildings — to plunk down $8.2 million to buy the 26-foot-wide, five-story building at 334 Canal at a foreclosure auction in September 2011 caught the attention of many in the industry. Some investors, such as the former owners of Vornado’s building who overpaid during the boom, may be forced to sell, while others may just want to profit off the eager buyers in today’s market. For example, 250 Canal, which is jointly owned by ABS Partners and one other investor, is on the market with an asking price of $30 million. In addition, Michael Marvisi, who owns the neighboring five- and six-story buildings at 326 and 332 Canal (next to Vornado’s 334 Canal), is in contract to sell them for $23.5 million, according to a listing from Town Residential. Storefronts at 322, 324 and 340 Canal, sharing the block with Vornado’s building (where the retail space is under construction), boast “for rent” signs. In some areas of the city, that would signal a downturn. But here, it appears the landlords are preparing for a cultural shift in the street, emptying old 86 January 2012 www.TheRealDeal.com

tenants and looking for new ones. Even as landlords get rid of the souvenir and discount tenants to prepare for national stores, insiders believe the city could play an important role in how quickly Canal Street evolves. “I think it is slowly starting to change. But I think the city cracking down on the illegal sales [of knockoff products] is going to be the biggest driver,” said Ariel Schuster, executive vice president at retail brokerage RKF (formerly Robert K. Futterman & Associates). The city ramped up a crackdown on counterfeit goods on Canal Street in 2008 and 2009. On some stretches, “Almost every store was shuttered,” recalled Robert Fischer, an electronics specialist who’s worked on Canal for decades installing audio equipment in cars. One landlord, who asked not to be identified in talking about a potential deal, said he’s looking to bring a higherquality, quick-service restaurant such as Panera Bread to one of his buildings. In addition, there are a few new buildings, such as the 21story Sheraton, which opened a few years ago at 370 Canal. Wendy Silverstein, executive vice president and cohead of acquisitions and capital markets at Vornado, said the firm is continuing to look in the area. “Canal is a little more cutting edge than Soho, but we like that. We will continue to look for opportunities,” she said. But she noted that the area will not have a quick makeover. “That retail,” she noted, “is not going to change overnight.” While some say the smart money is betting on Canal, there are plenty of naysayers. Many real estate observers note the exhaust fumes from the trucks and automobiles (which rumble across Canal from New Jersey to Brooklyn) and the heavy foot traffic from bargain-hungry shoppers and say “no dice.” Sinvin’s Glanzberg acknowledged that some retail-fo-

cused landlords want to buy on Canal and “are kicking tires at potential acquisitions.” But he doesn’t view that as a good move yet. He and others believe that the higher-paying customers won’t want to mix with the discounted and knock-off merchants on Canal. “From the standpoint of someone who represents upperend and high-end retail, Canal Street really holds no place for those folks,” Glanzberg said. “It is the merchandise. There is a demographic and a shopper on Canal Street that is drastically different from what you find even a block north in Soho.” One of the city’s top retailers, who spoke on the condition of anonymity, echoed that point, saying luxury tenants don’t want to be near the fake merchandise. Highlighting the difficulties, an apparel tenant that was a pioneer in the Meatpacking District looked at Vornado’s 334 Canal and turned it down, one retail insider said. Another insider, who attended the foreclosure sale where Vornado picked up the property, said, “What the hell does Vornado want with a little building there?” Detractors also note that it’s easier to make changes in a lightly populated neighborhood such as the Meatpacking District, than to attempt to redefine an existing crowded environment. But despite the naysayers, most think it’s not a matter of “if ” Canal will go more upscale, but only “when.” Some say “in the next few years,” while others think it will take a decade. “Canal is changing,” one longtime handbag seller originally from Senegal, who only identified himself as Ken, told The Real Deal. He sees it happening now, with fewer discount shoppers and more stores shuttered. Laboz, for his part, said he sees a creeping evolution. He said he doesn’t expect many more banks to take space, but does expect higher-end food tenants and lower-priced apparel to be part of the next wave of change. Soon, he said, “there will be a tipping point. “You will have certain tenants going in as pioneers, and they will get it and they will do well,” he said. TRD www.TheRealDeal.com July 2012 89

Vantage

from page 31

declined to comment on the record, but Vantage officials downplay the significance of these actions. They noted that the properties were in their portfolio for longer than normal and have largely been taken over by Area. Indeed, in 2011, Vantage gave control of much of its multifamily portfolio back to Area while working to sell the remaining stakes. For example, in November of that year, Area took full control of a majority of the Queens portfolio and then named Cooper Square Realty and Bronstein Properties to replace Vantage as the new property managers. Thypin from Real Capital said Vantage got lucky that it found buyers for its troubled multifamily investments when it did. “At some point, it made sense for Vantage to get out because Vantage was not going to get paid [because it was under water],” Thypin said. “Given their investment horizon, they don’t usually hold things for seven years, and it’s been five already.” Lone Star and Area officials declined to comment.

Rubler’s rise Rubler — who graduated from Cornell University and earned an MBA from the University of Pennsylvania’s Wharton School of Business — originally came on the scene as an investment banker at the now-defunct Donaldson, Lufkin & Jenrette. But in 2000 he joined the Olnick Organization, which owns a number of high-profile commercial and residential complexes, including Lenox Terrace, the 1,700-unit residential complex in Harlem, and 130 Fifth Avenue. Rubler went on to serve as executive vice president and chief operating officer at Olnick, where his father-in-law, Richard Lane, was president and later became chairman. Under Rubler’s tenure, the company angered Harlem tenants for allegedly targeting long-time, rent-stabilized tenants in favor of market-rate tenants at many of its properties. But around 2004, when Rubler was still COO, it allowed Harlem Rep. Charlie Rangel, a prominent tenant at Lenox Terrace since 1989, to lease three additional rent-stabilized apartments at the complex, which he used as campaign office space. Other Olnick tenants complained about the arrangement, which imploded in 2008, when Rangel was investigated for tax fraud and other issues. Rangel’s office did not return inquiries on the matter. A 2010 Congressional probe found that Rangel had been put on a list by Olnick for “special handling.” In government filings related to the probe, Rubler — who

left the company in 2005 to start Vantage with several other Olnick executives — denied ordering anyone to set up the apartments for the congressman. In his new role at Vantage, Rubler’s plan was to acquire properties in underserved neighborhoods and rehabilitate them for working-class families. He approached a number of potential partners and got repeatedly rejected by those who considered the deals too risky, according to sources familiar with the firm. But he soon found an interested investor in James Simmons III, an Apollo partner who previously worked as chief investment officer and interim CEO of the Upper Manhattan Empowerment Zone, a nonprofit that encouraged private investment in Harlem and Washington Heights. Apollo and Vantage embarked on a plan to acquire neglected properties and turn them into profitable investments. One of their first major deals was their 2006 purchase of Delano Village from owners Axelrod Management for $175 million. The purchase of the complex, which was later renamed Savoy Park, took place around the same time that Stuyvesant Town and the Riverton Houses, two high-profile Manhattan rental complexes, were sold to investors also looking for opportunistic returns. (Those blockbuster deals, of course, would later implode and become emblematic of the downturn.) According to Securities and Exchange Commission filings, Vantage promised investors it could raise rents by up to 20 percent at Savoy Park by investing millions of dollars to renovate vacant apartments and then leasing to new, higherpaying tenants at market rates. Savoy Park was not the only multifamily complex Vantage acquired. All told, it snapped up more than 9,500 rental apartments across the city between 2006 and 2008, centered in largely immigrant-dominated neighborhoods such as Sunnyside and Corona in Queens, and Harlem, Washington Heights and Inwood in northern Manhattan. They “had a fair degree of optimism that rents would continue to climb,” said a source familiar with Vantage. However, fierce resistance from tenants — and a limited ability to control operating expenses — tempered those plans. In addition, the recession slowed the company’s ability to turn over new apartments, while the rising debt service and operating expenses at the properties added a considerable financial strain. In the end, Vantage emerged as one of the biggest casualties of the downturn, with thousands of apartments either in foreclosure or severe distress. “They were trying to evict tenants in a number of ways,”

recalled Valerie Orridge, a retired nurse and president of the Savoy Park Tenants Association. “The worst thing was the primary tenancy, claiming that this was not their primary residence.” These tactics caused Rubler to run afoul of authorities. In 2010, then-Attorney General Andrew Cuomo ﬁled suit against Vantage alleging it had harassed hundreds of tenants by refusing to cash legitimate rent payments and illegally challenging their primary residencies based on little to no evidence. Cuomo reached a $1 million settlement with Vantage, which agreed to reform its practices, but did not admit to any wrongdoing. Sources close to Vantage defend the company, saying that it was simply exercising its rights and ensuring that tenants were not taking advantage of rent-stabilization laws by claiming their apartments were primary homes when they were not. To be fair, Vantage wasn’t the only New York landlord accused of engaging in aggressive practices. Pinnacle Group and Praedium Group, two of Vantage’s main competitors during the boom, snapped up thousands of rent-regulated units in Harlem and other neighborhoods and rapidly boosted rental income by turning vacated apartments into marketrate units. A group called Buyers and Renters United to Save Harlem helped launch a groundbreaking lawsuit against Pinnacle under federal RICO statutes, resulting in a $2.5 million settlement with Pinnacle tenants in September 2011.

More seriously, in its most recent financial report, Wells disclosed that the U.S. Department of Justice believes it could bring civil claims against the bank in connection with mortgage origination practices that allegedly violated fair lending laws. Wells contested this assertion in the filing. In the past, SunTrust Banks and Countrywide have settled lawsuits with the DOJ over similar claims. Like other banks, Wells also has nonperforming first mortgage loans on its books — about $10.7 billion worth, as of the first quarter of this year — although that number has been steadily declining. All told, Wells’s troubled assets account for about 3.5 percent of its total loans. Still, concerns over Wells’s market control may be overblown, considering how tough federal guidelines are, observers said. In other words, even if Wells tightened or loosened its mortgage lending standards, Fannie Mae and Freddie Mac would still hold the biggest sway over the market. And the bank’s biggest investor, Warren Buffett, remains bullish, having increased his stake in the company several times in the last year. A larger danger for Wells may be its deep concentration

of real estate investments during a time when the market is still unpredictable, sources said. While Wells may be insulated from the riskier securities sold on Wall Street, it relies heavily on mortgage originations (as well as loan sales to Fannie Mae and Freddie Mac), Whalen said. A rise in home loan defaults is a less likely prospect in New York City than the rest of the country, but if the level of defaults starts to creep up, Wells could take a hit, he said. Even loans to borrowers with high credit scores who put 20 percent down could “turn to dust,” or lose their value, several months from now if the market takes another downward turn, Whalen said. But Wells shows no signs of slowing down its mortgage originations. In January, the bank held a Wild West–themed event for about 500 of its mortgage bankers at a hotel outside San Francisco, according to a Bloomberg News report from last month. In an apparent nod to the bank’s market share, the invitation read: “40% or BUST!!” TRD

Learning lessons Analysts say Vantage and Area have been taught a serious lesson about trying to ride the wave of a boom with a plan that could only work in a perfect investment climate. “The biggest problem with Vantage and Apollo’s strategy was the time they thought they could do this in,” said Thypin. After the stinging criticism during the Cuomo investigation, Vantage says it has taken a number of steps to improve relations with tenants, spending millions to repair its properties, adding a multilingual response line to its property management company and posting a daily blog with regular information updates. Dan DeSloover, of the Urban Homesteading Assistance Board, which has worked to organize tenants in several Vantage buildings, said it’s unclear whether these changes are mere window dressing or a sincere overhaul. “In terms of what their overall intent is, those are the things we don’t [yet] know,” he said. TRD

Wells Fargo from page 57 declined to comment. Additionally, in 2007, a Wells Fargo afﬁliate teamed up with Prudential Douglas Elliman to form DE Capital Mortgage, a home loan originator that works with the brokerage’s customers and others. DE Capital did not respond to a request for comment.

Too big? Not everyone welcomes Wells Fargo’s market dominance, especially in these post-crash times, when memories of once-sound ﬁnancial institutions toppling are still fresh. In addition to the market disruption of an institution of Wells’s size faltering, some observers argue that bank consolidation limits choices for consumers. “Any time you have an environment that doesn’t encourage competition, the consumer loses,” Miller said. One lender said that a few months ago, he began to hear complaints from borrowers and real estate agents about loan processing times at Wells Fargo, where the huge volume of loans was apparently bumping up turn times to two weeks, after a three- to four-week underwriting process. 90 July 2012 www.TheRealDeal.com

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www.TheRealDeal.com July 2012 93

Residential market

from page 16

lage townhouse, listed for $20 million; a full-ﬂoor co-op at 944 Fifth Avenue for $50 million (see story on page 34); ﬁnancier Eyal Levya’s Millennium Tower combination unit for $27 million; and real estate developer Edward Baron Cohen’s Upper East Side townhouse for $20 million. But not all properties are worth the eyebrow-raising price tags, brokers said. “I haven’t seen an increase in $20 million listings. I have seen an increase in $13 million listings that think they are $20 million listings,” quipped Julia Hoagland, a senior vice president with Brown Harris Stevens. “Everyone wants to meet their Russian fertilizer soul mate.” That, of course, is a reference to Dimitry Rybolovlev, the Russian fertilizer kingpin who famously closed on Sanford Weill’s 15 Central Park West penthouse for the $88 million asking price. The deal wiped out previous Manhattan

price records. But other ultraexpensive transactions have followed, from the $52.5 million spread at 740 Park Avenue that became the most expensive Manhattan co-op sale on record in April, to casino mogul Steve Wynn’s $70 million purchase in May of a palatial pad at the Ritz-Carlton Residences. These deals have skewed what sellers see as legitimate asking prices, brokers said. “The media frenzy surrounding the high-end market has many convinced that there are an inﬁnite number of ultrawealthy [individuals] who are ready, willing and able to drop whatever is asked of them to snap up these properties,” said Doug Heddings, founder of Heddings Property Group. “That just isn’t the case.” Plus, as summer ofﬁcially kicks off, the high end of the market is likely to slow down — a trend that is already ap-

parent in the number of contracts signed for luxury properties. In the last full week of June, there were 11 contracts signed for Manhattan homes listed at $4 million or more, down from 15 the week before and 17 the week before that, according to market reports from residential brokerage Olshan Realty. “Summer’s here, and the predictable seasonal slowdown seems to be upon us,” Olshan Realty president Donna Olshan noted in her latest report. Elizabeth Sample, a luxury broker at Sotheby’s International Realty, said she would never list an ultrapricey residence in July, when potential billionaire buyers are focused on relaxation, not real estate. “They’re in Monte Carlo,” she said. “They’re in the Hamptons.” TRD

sales volume tumbled 8 percent over that time frame, according to Real Trends. The continuing woes of the suburban markets may have dogged the firm, whose 30 offices — which include some operating under the banner of Julia B. Fee Sotheby’s and Litchfield Hills Sotheby’s — are spread across Connecticut as well as Westchester County. It has 1,100 agents. But the battlefront may be in Westchester, which it entered in 2010 with the acquisition of four nonfranchised Sotheby’s offices in Scarsdale, Rye, Larchmont and Chappaqua. (William Pitt became a Sotheby’s franchise in 2005. Around the same time, it also brought in an equity partner). The climate in terms of competition for listings and buyers also seems increasingly fierce in Fairfield, where William Raveis, Douglas Elliman and Warren Buffett’s HomeServices are all competing for a piece of the Connecticut residential sales market. As a result, William Pitt may have another tough year on its hands, according to news reports. But the firm, which was founded in 1949, seems to be making a renewed push for the luxury market. This spring, it unveiled a partnership with PlanOmatic, a web design company, to improve the tools on its website for high-end listings. There will now be floor plans and property photos along with an option to virtually stage furniture in the listing. Paul Breunich, the firm’s chief executive, was traveling and unavailable for comment, a spokesman said.

there’s also been an increase in bidding wars. She pointed to a gut-rehabbed, five-bedroom 1928 house in Plandome, which was listed for $2.675 million, but sold for $2.8 million 10 days later. Being relatively small gives the firm flexibility in deciding to, say, implement new content management systems for agents, she said. “We can make small changes without having to go to Parsippany to ask permission, if you will,” O’Connell joked, in a nod to Realogy.

Biggest national firms from page 53 In fact, it has closed or combined some recently. In 2009, the firm shuttered its Harrison office, and around the same time merged several smaller offices into larger ones. For example, the Cross River and South Salem offices were folded into the Katonah and Pound Ridge offices, respectively. “A small office does not create the buzz of a large office,” said Meyers, by way of explanation. Rather than expanding, he said Houlihan’s competitive edge will come from investing in and focusing on the communities where the firm already exists. And that strategy is boosting market share — in 2007, the firm claimed 25 percent of the sales volume in Westchester; now it has 40 percent, Meyers said.

5. Prudential Connecticut: $2.5 billion Through the stop-and-start recovery of the last few years, two suburban markets have been particularly hard-hit, brokers say: Connecticut and New Jersey, especially in the luxury segment (see related story on page 56). Perhaps unsurprisingly, then, Prudential Connecticut Realty, a 1,400-agent, 51-office firm whose listings are mostly focused in Fairfield, Hartford and New Haven counties, took a big hit. In 2011, it did $2.5 billion in business, down from $2.9 billion in 2010, or a 14 percent drop, according to the Real Trends figures. That was among the sharpest sales drops in the region. Whether its business improves in 2012 might depend on who’s at the helm. In April, the independently owned firm was sold by chief executive Peter Helie to HomeServices of America, mogul Warren Buffet’s real estate company. HomeServices — a subsidiary of Buffet’s Berkshire Hathaway — is making its first foray into the Northeast with the purchase. The terms of that acquisition weren’t disclosed. HomeServices, which is based in Minnesota, operates in 20 states and has 16,000 agents. In addition to new ownership, gains in the New York suburbs could also help. “Business has picked up, pending sales are higher than the same period last year at this time,” Helie told the Connecticut Post in April. “Our biggest barometer is our salespeople. They’re busy and a lot happier.” Candace Adams, the firm’s president, was traveling overseas and was not available for comment, a spokesperson said.

6. William Pitt Sotheby’s International Realty: $2.3 billion Last year, this Stamford, Conn.–based ﬁrm took in $2.3 billion. But in 2010, its haul was $2.5 billion, meaning its 94 July 2012 www.TheRealDeal.com

7. Daniel Gale Sotheby’s: $1.6 billion Daniel Gale — which was founded in Huntington, Long Island, in 1922 — did $1.6 billion in sales in 2011, which was on par with its previous year. Unlike some of its peers, the firm proudly strikes a decidedly less-is-more approach, even though it has almost 600 agents and 21 offices scattered around Long Island. While the firm does have listings in Queens, the majority of its business is concentrated in affluent North Shore towns like Manhasset. It has managed to keep its business healthy in part due to an influx of Asian buyers, who are now snapping up Long Island residences as investments, agents say. In a recent deal, for example, a Taiwanese buyer from Bayside purchased a Manhasset property for his sister in Taiwan, who wants her daughter to go to school here, said Deirdre O’Connell, a senior vice president at Daniel Gale Sotheby’s. Coaxing from agents has also prompted clients to cut their prices, which has helped move inventory, offsetting dips in prices, O’Connell explained. But at the same time,

8. Better Homes and Gardens Rand Realty: $1.2 billion By one measure, it’s been a tough couple of years at Better Homes and Garden Rand Realty; sales volume fell 10 percent from $1.32 billion in 2010 to $1.18 billion in 2011, Real Trends data shows. But in many ways, that belies a notable expansion at the 28-year-old firm, which has 25 offices and 800 agents. Focused mostly in Rockland (where they claim 35 percent market share) and Orange counties, the firm also entered New Jersey six months ago. Why? Because “we were losing transactions because of people who are looking at homes in Rockland and Jersey, but using other agents there,” said Joseph Rand, the family-owned firm’s managing partner, who likened Rand’s foray there to Manhattan firms’ hanging up their shingles in Brooklyn a few years ago. All told, Rand has added eight new offices since 2007, at the onset of the recession, Rand said. Though perhaps unknown on this side of the George Washington Bridge, Better Homes is a growing brand with national appeal, which is why Rand became one of its franchisees in 2009. “There are advantages to be associated with a wellknown brand” that dates to the 1920s, when the Better Homes and Gardens magazine was launched, said Rand. Rand, who has a law degree from Georgetown, noted that the while the firm is independently owned, Better Homes and Gardens is a Realogy brand. Rand’s brokers take a 50 percent commission split until they have $25,000 in their pocket, then 80 percent until they earn $150,000 and then 90 percent for everything above that. The firm covers the marketing costs for its agents. That’s in contrast to other models that are now popular, like Keller Williams, for example, which gives its agents full commissions, but generally lets them fend for themselves. “Agents need a support system,” said Rand, who estimates he’s on track to do $1.5 billion in business this year. TRD

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The American Institute of Architects hosts a book talk with John Hill, author of the “Guide to Contemporary New York City Architecture.” Hill, an architect, blogger and adjunct professor at the New York Institute of Technology, will highlight some of the book’s 200 featured residential, corporate, institutional, academic and commercial structures. The Center for Architecture, 536 LaGuardia Place. 6 to 8 p.m. Fee: Free for members, $10 for nonmembers. Information and registration: cfa.aiany.org.

The Brooklyn Chamber of Commerce hosts the 12th-annual Building Brooklyn Awards ceremony and cocktail reception, honoring 12 new residential, educational and energy-efficient construction projects. The event will be chaired by Caroline Pardo, director of leasing for Two Trees Management. Honorees include Michelle de la Uz, executive director of the Fifth Avenue Committee, and David Von Spreckelsen, a division president at Toll Brothers City Living. The Liberty Warehouse, 260 Conover Street, Brooklyn. 6 to 9:30 p.m. Fee: $150 for members, $175 for nonmembers. Information and registration: www.buildingbrooklynawards.com.

C A L ENDA R 1

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The Council of New York Cooperatives & Condominiums presents a seminar entitled “Limiting Smoking in Co-ops and Condos.” Attorney Stuart Saft, cochair of the New York Real Estate Practice Group at Holland & Knight, will share advice on implementing and enforcing no-smoking policies in co-ops and condos, and discuss how they impact resale value. Location TBA. 7 p.m. Fee: Free for members, $50 for nonmembers, $65 at the door. Information and registration: workshops@cnyc.coop or (212) 496-7400.

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The Young Men’s/Women’s Real Estate Association of New York presents its seventh-annual kayaking event. Attendees will kayak from Long Island City to Roosevelt Island, Dumbo and Brooklyn Bridge Park. Long Island City Community Boathouse, 46-01 5th Street, Long Island City, Queens. 8 a.m. to 3:30 p.m. Fee: $75. Information and registration: DAB@BrauseRealty.com or Lindsay .Ornstein@transwestern.net.

The Museum of the City of New York hosts a gallery tour of the exhibit “Reimagining the Waterfront.” Curator Andrea Renner will host a guided tour of the exhibit, which features eight prize-winning designs for the redevelopment of the East River Esplanade. 1220 Fifth Avenue. 3 p.m. Free with museum admission. Information and registration: www.mcny.org.

The New York State Association for Affordable Housing hosts its Summer Cocktail Reception, a networking event. The Princeton Club, 15 West 43rd Street. 6 to 8 p.m. Fee: $135 for members, $195 for nonmembers. Information and registration: www.nysafah.org.

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The Council of New York Cooperatives & Condominiums presents “Three Challenges to Effective Board Performance: Gender, Generation, Gentrification.” Attorney Phyllis Weisberg, a partner at Montgomery McCracken Walker & Rhoads, discusses how gender, age and economic issues such as gentrification pose challenges to successful board functioning, and suggests methods for overcoming these obstacles. Location TBA. 7 p.m. Fee: Free for members, $50 for nonmembers, $65 at the door. Information and registration: workshops@cnyc.coop or (212) 496-7400.

96 July 2012 www.TheRealDeal.com

The American Institute of Architects presents “Conversations in Context” at the Philip Johnson Glass House. Glass House director Henry Urbach and Robert A.M. Stern, dean of the Yale School of Architecture and founder of Robert A.M. Stern Architects, will guide visitors on a tour of the property. A discussion and reception will follow. 199 Elm Street, New Canaan, Conn. 5:30 to 8 p.m. Fee: $150. Information and registration: www.philipjohnsonglasshouse.org.

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The High Line Program and the Hamptons Institute host a panel discussion, “Perspectives on New York as a 21st-Century City.” Panelists include Robert Hammond, cofounder and executive director of Friends of the High Line; Joe Rose, a partner at the Georgetown Group and former chairman of the New York City Planning Commission; and Leslie Koch, president of the Governors Island Development Corporation. Guild Hall Auditorium, 158 Main Street, East Hampton, N.Y. 2:30 to 4 p.m. Free. Information and registration: www.thehighline.org.

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The Municipal Arts Society of New York presents “Down by the River: Greenwich Village and Gansevoort.” Architectural historian and author Matt Postal will lead a walking tour of the first section of Hudson River Park, discussing the decline of waterfront commerce in the 1960s, and pointing out new residential developments by Asymptote, Julian Schnabel and FLAnk. The tour will end in the Gansevoort Market Historical District near the construction site of the new Whitney Museum of American Art building, designed by Renzo Piano. Location TBA. 11 a.m. Fee: $15 for members, $20 for nonmembers. Information and registration: www.mas.org.

Professional Women in Construction hosts “The Transportation Forum: A Regional Transportation Update.” Guest speakers include James Weinstein, executive director of NJ Transit; Patrick Foye, executive director of the Port Authority of New York and New Jersey; Joan McDonald, commissioner of the New York State Department of Transportation; and Nuria Fernandez, chief operating officer of the Metropolitan Transportation Authority. William Fife, a principal at the Fife Group, will moderate the event. General Society of Mechanics & Tradesmen, 20 West 44th Street. 8 to 10 a.m. Fee: $80 in advance for members, $90 in advance for nonmembers, $95 at the door. Information and registration: www. pwcusa.org.

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Financier Eyal Levy listed his apartment last month for $27 million with Sotheby’s brokers Eva Mohr and Serena ____ Vornado head Steven Roth’s 2011 compensation included $227,000 for a car and ____ Park, for one An apartment that ____ the park fetches a price premium Corporate parent of Brown Harris Stevens and Halstead Lie in the sun on LeFrak’s Long Island City “urban beach,” for example Steve Wynn is reportedly investing $4 billion to build a gambling mecca in this Chinese territory The new Alamo Drafthouse theater will include a dinner menu with a movie ____ __- friendly construction Make changes in a company’s financial structure Turf

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Important code for real estate brokers Hackensack is __ of Manhattan Negative vote Site of luxurious villas for rent in France, Cap-d’___ Sold a bigger place for a smaller one Colliers International’s __ Tristate CEO, Mark Jaccom, joined Cresa last month Top agents have it At the mike at a party Chain that recently opened its first Brooklyn location, __ Pain Quotidien Dottie Herman’s business partner, first name A planned $40 million Times Square upgrade will add new benches and ____ ___ the corner The footbridge to this NYC island has now reopened Landlord’s warning Tech giant looking for rental space in NYC Lease conditions

Down A penthouse in the _____ building where Heath Ledger died just hit the market for $25M (2 words) 2 212 is the main one in the Big Apple 3 Top residential agent at Brown Harris Stevens, Paula _____ 4 Starwood Hotels brand with locations in New York 6 Minority owner of the Nets 7 ___ got an interesting offer for you ... 8 JDS Development spearheaded the recent conversion of this building on West 18th Street 9 Real estate company that filed to raise $1 billion in its initial public offering 12 Starwood Capital Group CEO Barry ___ 15 Before noon 17 A Manhattan private equity firm investing in real estate, ___ Investment Group 1

21 Closely watched statistic, the unemployment ____ 24 A negative architecture review 28 Philosophy 29 What EDC is seeking for a development site at 2040 Frederick Douglass Boulevard 30 “Wow!” 31 It moves up and down 32 The Real Deal’s Editor-in-Chief, last name 35 Related Companies spokesperson, ____ Rose 39 Trade publication headquartered at 711 Third Avenue 41 Starchitect Richard _____ 42 Design details 43 Mortgage type 44 Sold __-is 46 Name of the Ring brothers’ father 48 Well enough To play this puzzle online, and see the solution, visit www.TheRealDeal.com.

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Chelsea Green 151 West 21st Street Alfa Development’s 51-unit condominium is now 50 percent sold. The remaining units include one-, two- and three-bedroom apartments, as well as a four-bedroom penthouse with a private roof terrace. Units are sized from 640 to 3,110 square feet, and prices range from $995,000 for one-bedrooms to $8.38 million for the penthouse. Corcoran Group Marketing is the agent. Contact: www.151w21.com.

Harlem 5th on the Park 1485 Fifth Avenue The 158-unit condominium, developed by 5th on the Park Condo LLC, is now 85 percent sold. Remaining units in the 28story building include studios and twoand three-bedroom apartments, ranging in size from 768 to 2,386 square feet. Prices range from $429,000 to $1.73 million. Building amenities include a gym, indoor pool, residents’ lounge and 24-hour concierge. Halstead Property Development Marketing is the agent. Contact: www.5thonthepark.com. The Park Lane Condominium 118 West 112th Street The 24-unit condominium is now 70 percent sold. Remaining units include one-, two- and three-bedroom apartments sized from 576 to 1,037 square feet. Prices start at $325,000. Building amenities include a ﬁtness room, furnished patio garden and children’s playroom. The developer is 116–118 West 112th Street Associates LLC. Warburg Realty is the agent. Contact: www.warburgrealty.com.

The 167-unit condominium is now 60 percent sold. The Bizzi & Partners–developed, 60-story tower offers one- to six-bedroom residences. Available homes range from 776 to 6,883 square feet. Prices start at $1.48 million. Amenities include home catering, valet parking and housekeeping. Douglas Elliman Development Marketing is the agent. Contact: www.400ﬁfthavenue. com.

Union Square 123 Third Avenue The 48-unit condominium is now 95 percent sold, with just two homes remaining. A three-bedroom, 2,123-square-foot penthouse is priced at $3.78 million, while a 2,334-square-foot duplex penthouse is listed at $4.53 million. Amenities include a ﬁtness center and doorman. Orange Management and F&T Group are the developers. Corcoran Sunshine Marketing Group is the agent. Contact: www.123third.com.

Upper East Side The Laurel 400 East 67th Street With 19 homes remaining, the 128-unit condominium is now 85 percent sold. Available units in the building include studios, starting at 635 square feet, and two- and three-bedrooms, starting at 1,773 square feet. Prices start at $850,000. Amenities include a triathlon training center, pool, game room and private function room with a catering kitchen. Alexico Group is the developer. Corcoran Sunshine Marketing Group is the agent. Contact: www.laurelcondominium.com.

Upper West Side Linden78 230 West 78th Street

Long Island City L Haus 11-02 49th Avenue The 122-unit condominium has hit the 90 percent sold mark, with just 14 units remaining. Available apartments include two- and three-bedroom units, with prices starting at $820,000. Sizes range from 1,198 to 1,832 square feet. Amenities in the Stahl Organization–developed project include a media room and yoga room. Modern Spaces is the agent. Contact: www.lhauslic.com. 100 July 2012 www.TheRealDeal.com

The 33-unit condominium is now sold out, with all of its units in contract. Building amenities include a roof deck, ﬁtness center, children’s playroom and 24-hour attended lobby. Urban Residential is the developer. Town Residential is the agent. Contact: www.linden78.com. TRD

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102 July 2012 www.TheRealDeal.com

One-bedroom, one-bath, 715 sf prewar condo unit in the Kiehl’s Building; apartment has private roof deck, washer/dryer, security system; common charges $448 per month, taxes $474 per month; asking price $949,000; one week on the market. (Brokers: Jon Amundsen, the Corcoran Group; Cindy Scholz, Citi Habitats) “I represented myself in this deal. I was looking for a condo, and the condo market is really tight. I had shown this apartment to clients three years ago, [when it was listed for] $1.3 million. When it came back on the market listed at $949,000, I asked if I could see it that day, and the broker said, “You have to come to the open house.” It’s an old loftstyle unit with a huge private roof deck, and definitely the private roof space is what got me. The maintenance was low, too. Everyone at the open house was on the phone with their parents, their significant others. I said right away, ‘I’ll take it,’ and I paid a couple grand over ask. ... The building did have a couple issues, like a low cash-reserve fund, which meant I had to put 35 percent down. The mortgage process took over two months, and with having to put a large amount down, the whole situation was extremely stressful. The amount of paperwork they requested was really just unreal. The seller was patient. He was in a lot of financial trouble, so he just had to let this apartment go.” Cindy Scholz, Citi Habitats

Noho $636,000 308 Mott Street, Apt. 1D

One-bedroom, one-bath, 750 sf unit in a prewar co-op; apartment has eat-in kitchen, washer/dryer, custom closets; common charges $1,618 per month; asking price $669,000; 16 weeks on the market. (Broker: Bridget Schuy, Bond New York) “The buyer called me on the fly, and I just happened to be in the apartment. ... The buyer is a bachelor in the finance industry and he had been looking about three months. He fell so in love with the apartment, he was like, “Can I buy the furniture?” The sellers were a couple who were quite attached to the apartment. They had worked on it together, put it all together carefully, including some custom furniture and some very tasteful art. So when they knew the buyer shared their aesthetic sense and appreciated the custom furnishings, it endeared him to them. The sellers were moving out of state, [and] the buyer wound up getting all the customized furniture. As far as financing, the buyer used Wells Fargo — he was preapproved, even — but it was cumbersome. There were a lot of tedious documents.” Bridget Schuy, Bond New York

Upper East Side $1.9 million 327 East 82nd Street, Apt. 2

Three-bedroom, two-bath, 1,830 sf duplex condo unit in a prewar townhouse; apartment has private garden, eat-in kitchen, fireplace; common charges $500 per month, taxes $600 per month; asking price $1.6 million; three and a half weeks on the market. (Brokers: Susan Kane and Jaarmel Sloane, Sloane Square NYC; Evelyn Katz, Fox Residential Group) “The unit is the parlor floor and first floor of a four-story townhouse, plus a basement. When it came on the market, there were about 150 people calling. There aren’t many condo townhouse properties, and this one has a private garden. The seller had paid about $2.2 million; they bought it five years ago. It was first shown on a Sunday, and by midweek we had an accepted offer. But then it was retracted because people were bidding it up. ... [My buyer] said, “I will outbid [the highest bidder] by $100,000.” There were a few issues, like work permits that weren’t closed out by the city from the prior owner doing renovations. But my [client] closed fast for all cash.” Evelyn Katz, Fox Residential Interviews by Guelda Voien PHOTOGRAPH OF 308 MOTT STREET FROM PROPERTYSHARK.COM

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COMINGS & GOINGS

BROKER EXCHANGE

Quinn veteran Rosnowski starts new ﬁrm

Residential

uzanne Rosnowski, formerly the partner in charge of real estate at public relations firm Quinn & Co., is striking out on her own. The veteran publicist has launched a new firm, Relevance New York, which provides advisory services in addition to traditional public relations. The new company has already signed its first major client, investment sales brokerage Eastern Consolidated, for whom it will work on “big-picture positioning,” said Rosnowski. Rosnowski was with Quinn — which specializes in food, real estate and travel PR — for nearly a decade and oversaw all real estate clients. “It was a very amicable parting,” said company founder Florence Quinn. “For her happiness, she had to have something of her own, and I understand because I did it myself when I was her age.” Rosnowski said her departure was not timed to any particular personal or professional change, but that it “just felt right” to start her own business now. Relevance isn’t the only new PR firm in town. Last year, Rubenstein Suzanne Rosnowski Associates’ Robin Dolch launched her own real estate-focused firm, Hundred Stories Public Relations. But Rosnowski said her firm’s emphasis on branding gives it a slightly different focus than Hundred Stories. Relevance’s approach is also different from that of some larger PR firms, Rosnowski said, in that she will work to craft a custom campaign for each client. “As any business gets bigger there is a tendency to repeat” previous strategies, she said, but with her small firm, she hopes to avoid using “templates.” So far, Rosnowski has one full-time employee in addition to herself, she said, as well as some part-time help. Relevance’s new office, at 349 Fifth Avenue, is small, but Rosnowski said the lease has an option to expand. “We do want to grow, but want to keep our boutique sensibility,” she said. By Guelda Voien

Kevin Kelly joined as director of corporate relocation from Town

Citi Habitats Residential, where he held the same position. Danny Cohen, an agent, also joined the ﬁrm from Town. Fay Curtis was hired as an agent from Manhattan Apartments. City Connections Realty Lynda Deppe was hired as an associate broker and senior vice presi-

dent. Prior to joining the firm, she was an independent broker and founder of Site Realty Partners. Halstead Property Barak Realty founder Barak Dunayer joined the firm as an executive vice president. His wife, Yael Dunayer, joined the firm as an agent. Bob Manzari, Bonnie McCartney and Dianne Weston were hired as executive vice presidents. They were previously senior vice presidents at the Corcoran Group. Keller Williams NYC Ricardo Caceres joined the firm from Corcoran, where he was an

agent. Weichert, Realtors — The Franzese Group

Feldman plays matchmaker for Hamptons

Vince Blandino was promoted to branch manager of the ﬁrm’s of-

his month, East Hampton real estate agent Barbara Feldman will launch HamptonsBrokerMatchup .com, an online referral service designed to match buyers and sellers with brokers. For the past six years, Feldman has sold real estate in the Hamptons, independently and at several firms, including Prudential Douglas Elliman. In that time, she said, she noticed that buyers in the area have an especially hard time finding the right broker, given the wide variety of different price ranges and property types in the Hamptons. “In the Hamptons, there are so many different kinds of properties,” Feldman said. As a result, “a broker really has to know their stuff in order to estimate a sale value.” However, she said, many people in the Hamptons pick brokers at random, often hiring the “top agents who just sold a top property” rather than someone who specializes in the area or type of house they’re looking for. The resulting mismatches are what she hopes HamptonsBrokerMatchup.com will help to avoid. “We’re trying to make a good fit,” she said, to “save everybody time, money and energy.” Brokers can join HamptonsBrokerMatchup.com for free, but they must provide references and complete a questionnaire detailing their listings, recent sales and geographic areas of expertise. Buyers and sellers pay a $250 membership fee, and they, too, complete a questionnaire about the type of house and location they want. Based on that information, Feldman sets up meetings between clients and the brokers she feels will be a good fit. If they end up working together and a deal gets done, Feldman receives a 20 percent referral fee. Feldman has hired only one sales and marketing person so far, but said she will bring more people on board as the business expands. By Andrea Cetra

of the commercial division. Kevin Wong was hired as a broker.

BlackRock launches new real estate team

nvestment management giant BlackRock last month hired Aviva Investors’ Sherry Rexroad to head its new real estate investment team. Rexroad, who previously served as Aviva’s senior portfolio manager of real estate investment trusts for the Americas, is now heading the new BlackRock Global Real Estate Securities platform. The Manhattan-based group will invest in real estate investment trusts and real estate operators across the globe, Rexroad told TRD, adding that it will be “a marriage of a fundamental equity team and a real estate team.” This will be the first time BlackRock offers publicly traded real estate securities. Both retail and institutional funds would invest in the new securities, the company said. Rexroad, who will build the platform from the ground up as chief investment officer, said she is currently looking to hire portfolio managers for each of the group’s main regions of focus — the U.S., Europe and Asia. Over the next 18 to 24 months, Rexroad said the new group will hire 16 to 18 people. “We need to find the right people and grow our business intelligently,” said Rexroad, who has an MBA from the Wharton School at the University of Pennsylvania. “We need people who really understand these assets, because a real Sherry Rexroad estate company is just a gathering together of what we think are quality assets, and providing good access to capital.” Before moving to Aviva, Rexroad worked with both ING Clarion Real Estate and AEW Capital Management. By Guelda Voien 104 July 2012 www.TheRealDeal.com

ﬁce at 2671 86th Street in Brooklyn. He previously served as head

Commercial Invesco Real Estate Timothy Bellman joined the ﬁrm as head of global research from

ING Real Estate Management, where he was the global head of research and strategy. Claiborne Johnston was hired as client portfolio manager from Morgan Stanley Real Estate. Meridian Capital Group Peter Steier joined the ﬁrm as director and head of equity capital

markets from the Carlton Group, where he was a managing director. Terry Baydala was hired as executive president and head of structured ﬁnance. He was previously senior vice president of commercial real estate banking at Anglo Irish Bank. Murray Hill Properties Joe Friedman joined the ﬁrm as senior managing director from

Adams & Company. Abe Labaton was hired as managing director. He was previously a director at Vicus Partners. Plaza Construction Ed Zelazy joined the ﬁrm from the Frank McBride Company, as

chief estimator. Philip Townsend, formerly of PTA, was hired as a senior estimator. Randall Mahncke was hired as a project estimator from GTL Construction, and Paul Dispensa was hired from HDG Consulting as mechanical estimator. Savanna Justin Oates joined the ﬁrm as an analyst from Eastdil Secured.

Compiled by Andrea Cetra

Follow The Real Deal on Twitter: twitter.com /trdny

Move over, MoMA With a hot market for art,

brokers increasingly use exhibits to lure buyers

velopers are now especially eager to tap into the growing market of high-end art buyers. More than ever before, they are opening up their ofﬁces, lobbies and model apartments

From left: Artist Carrie Sunday and Elliman CEO Dottie Herman at the “Study in Meditation” party

to artists, usually kicking off these exhibitions with gallerystyle receptions. Today’s hot art market is “part of the popular culture of luxury and celebrity,” said Amy Cappellazzo, chairman of

Flags for the Fourth North Fork broker plants 2,000 American ﬂags along Route 25

his July 4th, a four-mile stretch of Route 25 on Long Island’s North Fork will be looking particularly patriotic, thanks to a local real estate broker. Kate Carpluk (center) and two of her ﬂag volunteers

WE HEARD

▼

t 4 p.m. on a Thursday afternoon last month, the Prudential Douglas Elliman location at 980 Madison Avenue resembled your average real estate brokerage office. But by 6 p.m., desks and computers were gone, 16 abstract canvasses by the artist Carrie Sunday hung on the walls and guests were arriving for a party honoring Sunday’s exhibit, “Study in Meditation,” which will be displayed in the office through the end this month. Elliman CEO Dottie Herman was inspired to host the exhibition, she said, because “I like putting strong brands together. Carrie is just so talented, and I hope I’m part of her success.” The Elliman/Carrie Sunday event is just one of a growing number of collaborations between artists and real estate marketers. In addition to the Elliman event, last month saw Unframed 2012, an art auction held in a $32-million penthouse at new condo 400 Fifth Avenue and a contemporary art opening at the Upper East Side’s “Waterfall Mansion,” which is currently on the market for $31 million. Real estate pros have long used contemporary art to liven up sales offices and help market homes. But with art houses reporting record-breaking sales figures, brokers and de-

postwar and contemporary development at Christie’s. “It’s good for the sex appeal of the real estate market.” By collaborating with artists, brokers and developers hope to attract wealthy collectors, who may very well be looking for pricey homes in which to display their purchases. “It’s all about reaching out to a certain clientele,” Karen Mansour of Douglas Elliman Development Marketing, which is handling sales 400 Fifth Avenue. At the recent Unframed event, some 250 guests bid on artwork displayed throughout the building’s six-bedroom penthouse, and a Chris Levine piece called “Lightness of Being” was sold for $17,000. In designing the “Waterfall Mansion,” developer Kate Shin said she speciﬁcally made sure the house was well-suited for displaying art. Now that it’s on the market, Shin is displaying some 50 pieces of work by nine contemporary Korean artists in the house, and held an opening-night reception in honor of them. “Art is an effective strategy to communicate with my buyers,” she said. By Lucy Cohen Blatter

Kate Carpluk, an agent in the Mattituck office of Town & Country Real Estate, spent several evenings last month installing nearly 2,000 American flags along the road from Aquebogue to Laurel. It took Carpluk and two volunteers several days to plant the 18- by 12-inch flags (all made in America, of course). Carpluk, who has been decorating Route 25 with flags every year for the last decade, said she views the annual task as a way to show her gratitude to those in the armed forces while also decorating the North Fork — a popular vacation spot for city dwellers — for the holiday. “It’s a nice welcome for people,” she said, adding: “We want it to look patriotic.” Town & Country founder Judi Desiderio commended Carpluk’s efforts. “My hat is off to her for doing this,” Desiderio said. “It’s her way of giving back to the community.”

Carpluk started the tradition years ago, planting the stars-and-stripes in small neighborhoods on her way to property showings. She has since moved on to decorating main roads, she said, so that more people can enjoy the flags. Once Independence Day passes, she encourages homeowners to take the flags, and use them to decorate their gardens or flower pots. Carpluk has been with Town & Country Real Estate for two years, and previously worked for C21 Albertson. She does the “planting” in the evenings after work, which makes for some very long days for her and her helpers. Luckily, their work does not go unnoticed: Carpluk says that it is common for passersby to wave or honk their approval while she is installing the flags. One year, she was planting flags when she was surprised to see a well-known local veteran racing towards her. “I got a little nervous because, I didn’t know what he was going to do,” she recalled. As it turned out, “he actually wanted to give me a big hug.” Carpluk called it one of the most special moments that she has ever experienced. “It made my year,” she said. By Russell Steinberg

“The Slope” creators to make full-length movie Brooklyn nabe and its stores provide fodder for comedy

on Stewart isn’t the only one poking fun at Park Slope. The popular comedic web series “The Slope” — inspired by the businesses and people of the pricey Brooklyn neighborhood — recently wrapped its second season and is now being adapted into a full-length feature. The movie, which will be ﬁlmed in Park Slope and is being made with the London-based Parkville Pictures, is scheduled to go into production next spring, and be completed by late 2013, series creators Desiree Akhavan and Ingrid Jungermann told The Real Deal. In creating the series, Brooklyn residents Akhavan and Jungermann drew on the family-friendly neighborhood’s most popular (and easily ridiculed) retail venues — the Park Slope Food Co-op, the Tea Lounge and second-hand boutique Beacon’s Closet among them. Footage of these and other local haunts appeared in the series, and will also play a prominent role in the forthcoming movie, they said. PHOTOGRAPH OF “THE SLOPE” STARS BY GRACE CHU

From left: Ingrid Jungermann and Desiree Akhavan

“Park Slope writes its own jokes,” said Jungermann, who is 35 and lives in the neighborhood. “You don’t have to look hard to ﬁnd things to make fun of.” The Co-op, for example, recently drew national attention — including a segment on “The Daily Show with Jon Stewart” — for its proposed boycott of Israeli food products. 112 May

In the Park Slope depicted on “The Slope” — all 16 episodes can be seen at www.theslopeshow.com — characters attend bring-your-own-Swiss-chard parties, confront snooty Beacon’s Closet employees and beg to be allowed into the Co-op. There’s something about the famously liberal, brownstone neighborhood —where J.Crew president Jenna Lyons recently sold her Garﬁeld Place townhouse for $4 million — that lends itself to mockery, the creators said. “Just walking around Park Slope, you can see pretty quickly which places are stereotypical Park Slope,” said Akhavan, a 27-year-old Bedford-Stuyvesant resident. “The Slope” premiered online in August 2011. The show, and spin-off movie, center on the lives of on-again, off-again girlfriends Desiree and Ingrid, the alter egos of the creators, who also write and star in “The Slope.” Both Akhavan and Jungermann are graduate ﬁlm students of NYU. The women were dating each other when they developed the idea for the series. They have since broken up, but remain friends and collaborators, they said. By Gabrielle Birkner www.TheRealDeal.com July 2012 105

THE CLOSING

WITH SETH

PINSKY As president of the New York City Economic Development Corporation, Seth Pinsky has worked on projects like the $2 billion CornellNYC Tech applied sciences campus on Roosevelt Island, the redevelopment of Willets Point and the new Yankees and Mets stadiums. Pinsky, who joined the EDC in 2003 as a vice president, was chosen five years later by Mayor Michael Bloomberg to head the agency. A graduate of Columbia College and Harvard Law School, Pinsky previously worked as an attorney in the real estate practice at Cleary Gottlieb Steen & Hamilton and as a financial analyst at the investment and advisory firm James D. Wolfensohn Inc.

What is your full name? Seth William Pinsky. What’s your date of birth? September 11, 1971. I was celebrating my 30th birthday when the World Trade Center was attacked. At some point, somebody remembered that it was my birthday and gave me a cupcake with a candle in it. September 11 also inspired you to go into the public sector. I would sit in my office [at Cleary Gottlieb] and watch the recovery efforts at Ground Zero. They would put the remains onto a golf cart, which had a stretcher on the back, and then they would cover it with an American flag and everyone would stop working. They would line the ramp out of the pit and would salute as the golf cart went up. And watching this, over time I said to myself, “I talked a good game about wanting to go and do public service. If I’m ever going to do it, now is the time to do it.” Where did you grow up? Until I was five years old, my family lived in Great Neck on Long Island. Then we moved to New Jersey, and then when I was 10, we moved to Minneapolis. Why did you move so much? My father is a rabbi, so he moved to different congregations, and we followed. But from the minute that we crossed the St. Croix River into Minnesota, I knew that as soon as it was my decision, I was moving back to the East Coast. Are you religious? This is dangerous. Can I plead the Fifth on this? I am religious in my own way. ... I don’t eat pork, I don’t eat shellfish. I belong to a synagogue; I attend that synagogue from time to time. How did you end up at the EDC? In early 2003, I was talking to [Maria Gotsch, the president and CEO of the New York City Investment Fund] and she said, “Well, have you ever thought about EDC?” And my response was, “No, because I’ve never heard of EDC.” So she put me in touch with some people here and that was finally what got me into public service. You became EDC president when you were 36 years

106 July 2012 www.TheRealDeal.com

old. Has anyone called you too young for the job? People may have thought [that]. Nobody said that to me.

another apartment in Park Slope. We’re going to totally change scenery and move about a block and a half away.

Last July, you married Angela Sung, a senior vice president at the Real Estate Board of New York. Do you talk about real estate all the time? No, we try not to talk too much about work. I certainly am very careful about things that we’re working on that involve REBNY members, and I think she’s very careful about things that she’s working on that involve city matters. We both overlap with a lot of the same people, which makes it interesting.

Do you own any other homes? No, we don’t. We’ll be lucky if we can afford our new home.

You went to Sudan and Egypt for your honeymoon, but she wanted to go to Hawaii. Yes, she still wants to go to Hawaii! Our deal is that we alternate trips, and the honeymoon happened to be a “Seth trip.” That being said, we worked in a number of more typical honeymoon-like elements to our vacation, including a Nile cruise and a couple of nights at a Red Sea resort. You’ve also traveled to Iran, Colombia, Armenia, Moscow and through central Asia ... It sounds like the “Seth trips” can be difﬁcult. Yeah, they’re often not relaxing. [laughs] One night on our honeymoon, when we were in a waterproof — and, therefore, very hot — tent in the middle of the desert at about one in the morning, we had sand blowing into our tent. I think that was where maybe Angela had reached the limit of her tolerance. Where do you live now? We live in Park Slope. We’re in the process of moving to

Do you have kids? No. We’re expecting [at the end of November]. I haven’t told a lot of people, so this is my way of letting everyone know. Do you know if it’s a boy or a girl? No. My preference would be not to find out. Angela’s preference would be to find out. And, as I’ve come to learn very quickly, in a tie, the mother’s vote is the one that counts. So we’ll find out in a couple weeks. What are your other hobbies? I really enjoy classical music, listening to it, going to concerts. I enjoy photography — taking [photos] and going to photography exhibits as well. When Bloomberg’s term ends in 2013, are you out of a job? The tradition is that the mayor appoints the president of the EDC. So my expectation is that at the end of the mayor’s term that the next mayor will want to appoint someone else. What will you do next? I have no plans. By Leigh Kamping-Carder

PHOTOGRAPH FOR THE REAL DEAL BY MARC SCRIVO

No. These aren’t our listings. 550 Park Ave

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It’s our resumé. Since 1990, The Renovated Home has become NYC's premier design-build firm by under-promising and over-delivering on our projects at some of the city's most prestigious residences. Always on time and on budget.

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1477 third ave

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his meticulously renovated 4,200 sq. ft. Pre-War duplex features a private entrance and impeccable details throughout. From the brilliant mosaic floors to the magnificent marble staircase and classic crown moldings, no detail has been overlooked. Enjoy views of the fabled Apthorp courtyard and full-service condo-style living from your own private townhouse.

212. 707. 8188