The Real Deal June 2014

20

Sunset Park vs.

Garment District

www.TheRealDeal.com

40

Broker backlash for selling apts too fast

43

Musical chairs for mega-tenants

64

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

Buying frenzy on the Far West Side

122

Stephen Ross on getting fired

Vol. 12 No. 6 June 2014 $3.00

s n o t p m a H ssue I E H T

s e g a r e k o r b p o t , s l 2 a 3 e p d s t t s o e i p c s i t r o p h e l i h a T t e r w e n d n a

Luxury properties stuck on the block

A look at the posh NYC homes that have lingered the longest unsold, despite a sizzling market p55

Bill de Blasio’s Goldman girl

The big-biz credentials of Alicia Glen, the new housing czar, are allaying fears her boss is anti-real estate p48

Lawyers who pull in $1,000 an hour The Manhattan real estate attorneys who charge the most, and what you get for the money p58

ILLUSTRATION BY D. Studio

ASHKENAZY

ACQUISITION

249 Church Street

Premier Manhattan TriBeCa

NEW TO OUR PORTFOLIO

SIZE Ground: Cellar: Sub Cellar: Total:

SUBWAY PROXIMITY within 1 block within 3 blocks within 4 blocks

±1,561 SF ±1,556 SF ±1,463 SF ±4,580 SF

FRONTAGE Over 85’ of frontage

SoHo LOCATION Corner of Greene Street & Houston Street

SIZE Ground: Lower Level: Total:

±1,865 SF ±811 SF ±2,676 SF

FRONTAGE Over 124’ of frontage along Houston Street

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

SIZE Ground: Lower Level: Total:

TriBeCa

FRONTAGE ±1,913 SF Over 100’ of highly ±1,988 SF visible frontage ±3,901 SF* along Church & *Up to 5,848 SF with proposed Chambers Streets second level

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

1991 Broadway

200 Central Park South

NEW TO OUR PORTFOLIO

LOCATION Southwest Corner of 5th Avenue & 116th Street

INFORMATION • Extraordi nary frontage in SoHo • N eighboring retail includes: Chanel, Louis Vuitton, Club Monaco, Ralph Lauren, Burberry, Dior • A t the cross-roads of SoHo, NYU, Greenwich Village, and NoHo

148 Church Street

Upper Manhattan

LOCATION Northeast Corner of Church & Leonard Streets

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

145 Greene Street

Retail Opportunities

Lincoln Square/Upper West Side FRONTAGE LOCATION SIZE Over 55’ of prime glass On Broadway between 67th Ground: ±4,600 SF frontage on Broadway Mezzanine: ±1,965 SF & 68th Streets Lower Level: ±2,074 SF SUBWAY PROXIMITY Total: ±8,639 SF within 5 blocks INFORMATION • D irectly adjacent to the Apple store at Lincoln Center • D irectly across from the World Famous Lowes Theater and only 3 blocks from Lincoln Center for the Performing Arts

Columbus Circle LOCATION SIZE FRONTAGE The entire city block of 7th Avenue ±31,249 SF of retail space Over 475’ of between 58th Street and Central Park wraparound frontage South, this building also includes SUBWAY PROXIMITY frontage on both 58th Street and within 2 blocks Central Park South. within 3 blocks INFORMATION • 4 R etail Units & 17 Professional Units • C urrent tenants include Le Pain Quotidien, Faust Pianos, Allegro Pianos and SBR Multi Sports

For Leasing Information Please Contact:

AJ Levine • alevine@aacrealty.com • 646.214.0245

ASHKENAZY

ACQUISITION

1400 Fifth Avenue

FRONTAGE ±45’ on Fifth Avenue ±119’ on 116th Street

SIZE Available ‘A’: ±3,295 SF* Available ‘B’: ±2,444 SF* Total: ±5,739 SF *can be combined

INFORMATION • 13’ average ceiling heights • At the base of Harlem’s first sustainably constructed condominium building

Philip House (1311-1337 Lexington Avenue)

Upper East Side LOCATION Located on Lexington Avenue between 88th & 89th Streets

SIZE Up to ±4,000 SF

SUBWAY PROXIMITY within 2 blocks

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

Lower East Side LOCATION Corner of Delancey & Clinton Streets, at the foot of the Williamsburg Bridge SUBWAY PROXIMITY within 1 block

SIZE Ground: ±2,725 SF Up To: ±5,250 SF* *with proposed 2nd level

FRONTAGE Over 100’ of frontage along Delancey Street

156 Delancey Street

INFORMATION • Be seen by over 111,189 vehicles and over 200k people traveling the bridge each day • Directly across from the newly approved Essex Crossing Development, a 1.9M SF mixed use project including 1,000 new housing units

TriBeCa LOCATION Southeast Corner of Church Street & Leonard Street

SIZE Ground: Cellar: Sub-Cellar: Total:

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

FRONTAGE ±17’-3” on Church Street

241 Church Street

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

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

Limelight (656 Avenue of the Americas)

SIZE Ground: ±4,649 SF

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

Daniel Iwanicki • diwanicki@aacrealty.com • 646.214.0251

ASHKENAZY

ACQUISITION

249 Church Street

Premier Manhattan TriBeCa

NEW TO OUR PORTFOLIO

SIZE Ground: Cellar: Sub Cellar: Total:

SUBWAY PROXIMITY within 1 block within 3 blocks within 4 blocks

±1,561 SF ±1,556 SF ±1,463 SF ±4,580 SF

FRONTAGE Over 85’ of frontage

SoHo LOCATION Corner of Greene Street & Houston Street

SIZE Ground: Lower Level: Total:

±1,865 SF ±811 SF ±2,676 SF

FRONTAGE Over 124’ of frontage along Houston Street

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

SIZE Ground: Lower Level: Total:

TriBeCa

FRONTAGE ±1,913 SF Over 100’ of highly ±1,988 SF visible frontage ±3,901 SF* along Church & *Up to 5,848 SF with proposed Chambers Streets second level

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

1991 Broadway

200 Central Park South

NEW TO OUR PORTFOLIO

LOCATION Southwest Corner of 5th Avenue & 116th Street

INFORMATION • Extraordi nary frontage in SoHo • N eighboring retail includes: Chanel, Louis Vuitton, Club Monaco, Ralph Lauren, Burberry, Dior • A t the cross-roads of SoHo, NYU, Greenwich Village, and NoHo

148 Church Street

Upper Manhattan

LOCATION Northeast Corner of Church & Leonard Streets

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

145 Greene Street

Retail Opportunities

Lincoln Square/Upper West Side FRONTAGE LOCATION SIZE Over 55’ of prime glass On Broadway between 67th Ground: ±4,600 SF frontage on Broadway Mezzanine: ±1,965 SF & 68th Streets Lower Level: ±2,074 SF SUBWAY PROXIMITY Total: ±8,639 SF within 5 blocks INFORMATION • D irectly adjacent to the Apple store at Lincoln Center • D irectly across from the World Famous Lowes Theater and only 3 blocks from Lincoln Center for the Performing Arts

Columbus Circle LOCATION SIZE FRONTAGE The entire city block of 7th Avenue ±31,249 SF of retail space Over 475’ of between 58th Street and Central Park wraparound frontage South, this building also includes SUBWAY PROXIMITY frontage on both 58th Street and within 2 blocks Central Park South. within 3 blocks INFORMATION • 4 R etail Units & 17 Professional Units • C urrent tenants include Le Pain Quotidien, Faust Pianos, Allegro Pianos and SBR Multi Sports

For Leasing Information Please Contact:

AJ Levine • alevine@aacrealty.com • 646.214.0245

ASHKENAZY

ACQUISITION

1400 Fifth Avenue

FRONTAGE ±45’ on Fifth Avenue ±119’ on 116th Street

SIZE Available ‘A’: ±3,295 SF* Available ‘B’: ±2,444 SF* Total: ±5,739 SF *can be combined

INFORMATION • 13’ average ceiling heights • At the base of Harlem’s first sustainably constructed condominium building

Philip House (1311-1337 Lexington Avenue)

Upper East Side LOCATION Located on Lexington Avenue between 88th & 89th Streets

SIZE Up to ±4,000 SF

SUBWAY PROXIMITY within 2 blocks

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

Lower East Side LOCATION Corner of Delancey & Clinton Streets, at the foot of the Williamsburg Bridge SUBWAY PROXIMITY within 1 block

SIZE Ground: ±2,725 SF Up To: ±5,250 SF* *with proposed 2nd level

FRONTAGE Over 100’ of frontage along Delancey Street

156 Delancey Street

INFORMATION • Be seen by over 111,189 vehicles and over 200k people traveling the bridge each day • Directly across from the newly approved Essex Crossing Development, a 1.9M SF mixed use project including 1,000 new housing units

TriBeCa LOCATION Southeast Corner of Church Street & Leonard Street

SIZE Ground: Cellar: Sub-Cellar: Total:

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

FRONTAGE ±17’-3” on Church Street

241 Church Street

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

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

Limelight (656 Avenue of the Americas)

SIZE Ground: ±4,649 SF

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

Daniel Iwanicki • diwanicki@aacrealty.com • 646.214.0251

IF

YO U ’R E

A BO U T

TO

SPEN D

$1, 000, 000 OR M ORE ON A RENOVATI ON

AND THINK THE SO LUTIO N IS AN ARC HITEC T, A G C , A KITC H EN D ESIG N ER, A PRO JEC T M A N A G ER, A M ILLW O RK DESIG NER, A TILE & STO NE DESIG NER, A FLO O RING SPECIALIST, AN A/V CO NSULTANT.....

GETREADY TO PAY TONsI N PERCENTAGES

OURPROVEN, COHESI VEPROCESSELI MI NATESALLTHELAYERS, ALLTHEEXCUSES, ANDALLTHEWASTEDEXPENSE.

AtTheRenovated Home, wea r ed e s i g n e r swh obu i l dwh a t wed e s i g n , wi t h ou t t h en on s e n s eof bu d g e t sd ou bl i n g , s c h e d u l e sbe c omi n gu n h i n g e da n de l i mi n a t i n gt h ea n t i q u a t e da n dt r i a n g u l a t e da p p r oa c h wh e r ec on t r a c t or bl a me sa r c h i t e c t , a r c h i t e c t bl a me sc on t r a c t or a n dy ou ’ r ei nt h emi d d l e .

PERHAPSW ESHOULD DI SCUSSYOUR UPCOMI NG PROJECT.

TheRenovated Home th eren o vated h o m e.co m

est.1991

IF

YO U ’R E

A BO U T

TO

SPEN D

$1, 000, 000 OR M ORE ON A RENOVATI ON

AND THINK THE SO LUTIO N IS AN ARC HITEC T, A G C , A KITC H EN D ESIG N ER, A PRO JEC T M A N A G ER, A M ILLW O RK DESIG NER, A TILE & STO NE DESIG NER, A FLO O RING SPECIALIST, AN A/V CO NSULTANT.....

GETREADY TO PAY TONsI N PERCENTAGES

OURPROVEN, COHESI VEPROCESSELI MI NATESALLTHELAYERS, ALLTHEEXCUSES, ANDALLTHEWASTEDEXPENSE.

AtTheRenovated Home, wea r ed e s i g n e r swh obu i l dwh a t wed e s i g n , wi t h ou t t h en on s e n s eof bu d g e t sd ou bl i n g , s c h e d u l e sbe c omi n gu n h i n g e da n de l i mi n a t i n gt h ea n t i q u a t e da n dt r i a n g u l a t e da p p r oa c h wh e r ec on t r a c t or bl a me sa r c h i t e c t , a r c h i t e c t bl a me sc on t r a c t or a n dy ou ’ r ei nt h emi d d l e .

PERHAPSW ESHOULD DI SCUSSYOUR UPCOMI NG PROJECT.

TheRenovated Home th eren o vated h o m e.co m

est.1991

7M X Y eX I h M r 1 erleX X er存 W Q SW X M GSrM G neighborhood, steps from Fifth avenue and the Plaza hotel, 22 Central Park South is an intimately-scaled offering of just six full-floor two bedroom residences and one duplex penthouse. overlooking picturesque Central Park, 22 Central Park South offers expertly crafted interiors and state-of-the-art infrastructure. exclusive privileges from renowned retailer Bergdorf Goodman.

Full Floor Condominiums from $6.7MM Duplex Penthouse with three terraces $24.91MM ARTIST RENDERING

model residence, kindly contact

Denise S. andereya, Director of Sales Corcoran Group Marketing 212.369.0022 Denise@22CentralParkSouth.com www.22CentralParkSouth.com

2 2 C e n t r a l Pa r k S o u t h

For an appointment to view our on-site

The complete offering terms are in an offering plan available from the Sponsor. File no. CD13-0111.

Property address: 22 Central Park South, New York, NY 10019. Sponsor Name: 22 CPS Owner LLC. Sponsor Address: 575 Madison Avenue, 22nd Floor, New York, NY 10022. Equal Housing Opportunity.

22 CPS RD Spread 21x14.5 14A191050790_V2.indd 1

5/30/14 3:00 PM

7M X Y eX I h M r 1 erleX X er存 W Q SW X M GSrM G neighborhood, steps from Fifth avenue and the Plaza hotel, 22 Central Park South is an intimately-scaled offering of just six full-floor two bedroom residences and one duplex penthouse. overlooking picturesque Central Park, 22 Central Park South offers expertly crafted interiors and state-of-the-art infrastructure. exclusive privileges from renowned retailer Bergdorf Goodman.

Full Floor Condominiums from $6.7MM Duplex Penthouse with three terraces $24.91MM ARTIST RENDERING

model residence, kindly contact

Denise S. andereya, Director of Sales Corcoran Group Marketing 212.369.0022 Denise@22CentralParkSouth.com www.22CentralParkSouth.com

2 2 C e n t r a l Pa r k S o u t h

For an appointment to view our on-site

The complete offering terms are in an offering plan available from the Sponsor. File no. CD13-0111.

Property address: 22 Central Park South, New York, NY 10019. Sponsor Name: 22 CPS Owner LLC. Sponsor Address: 575 Madison Avenue, 22nd Floor, New York, NY 10022. Equal Housing Opportunity.

22 CPS RD Spread 21x14.5 14A191050790_V2.indd 1

5/30/14 3:00 PM

Contents J U N E

INSIDE OUT

2 0 1 4

17

Sellers ditch brokers

18

Deal sweeteners, in pockets

20

Sunset Park on the rise

20

More NYC homeowners opt against agents and for off-market deals.

Hot rental market aside, some landlords still pay commissions.

The Industry City mega-development in Sunset Park.

The Brooklyn neighborhood is seeing new real estate action.

22

Gale International head Stan Gale Sr.

At the Desk of: Stan Gale Sr. After his hopes of playing pro soccer were dashed, Gale joined the family business. Now his firm is building a $45 billion mini-city in South Korea. Mementos from both worlds collide in his office.

Want to know what goes on at the New School? Passersby need only glance at the institution’s new University Center in Greenwich Village to understand that progressive design education happens here. The building by Skidmore, Owings & Merrill expresses the school’s interdisciplinary approach through a brass-shingled facade crisscrossed by a series of glass-enclosed stairways that highlight a vivid tableau of students circulating within. The unique system encourages collaboration—and a new dialogue between campus and community that is sure to be conversation for decades to come.

Transforming design into reality

26

In their words...

28

Brooklyn’s old-school investors

30

Cash-outs back in vogue

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

32

Murdered developer Menachem Stark was just one of the borough’s low-key players. Inside: a look at the others.

More owners are refinancing, but lenders are enforcing tight controls.

Developers Nick (left) and Christian Candy

32

What’s hot in the Hamptons?

The biggest brokerages, priciest deals and trendiest spots you need to know about before heading east this season.

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

43

Barry Rosenstein bought 60 Further Lane in East Hampton for $147 million.

fast sale = too cheap?

40 Does NYC brokers face backlash from sellers if their homes get bought too fast.

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

office space shuffle 43 The With mega-tenants opting for new The Time-Life Building is losing Time Inc. as a tenant.

buildings, a slew of NYC properties have big empty blocks to fill.

46

Party hopping in Vegas Photo highlights from last month’s ICSC retail conference — from the convention floor during the day to the party circuit at night.

Architect: Skidmore, Owings & Merrill Photograph: Tex Jernigan

Newmark’s party at the Cosmopolitan hotel.

10 June 2014 8 October 2012www.TheRealDeal.com www.TheRealDeal.com

www.TheRealDeal.com March 2012 00

Recent Transactions

$10,000,000

$1,400,000

$9,500,000

Note Acquisition Development Site Manhattan, NY May 2014

Note Acquisition Multifamily Brooklyn, NY May 2014

Note Acquisition Mixed Use Manhattan, NY May 2014

$23,500,000

$13,000,000

$8,600,000

Loan Origination Development Site Brooklyn, NY April 2014

Loan Origination Townhouse Manhattan, NY April 2014

Loan Origination Multifamily Manhattan, NY April 2014

825 Third Avenue 37th Floor New York, NY 10022

(646) 472-1900

www.madisonrealtycapital.com

Includes deals closed by Sullivan Realty Capital, LLC, an investment adviser registered with the Securities and Exchange Commission doing business as Madison Realty Capital, and its afďŹ liates. Past performance does not guarantee future results. It should not be assumed that the recommendations made in the future will be proďŹ table or will equal the performance of the securities listed. Holdings are subject to change.

Contents continued 48

NEW TWIST

Deputy mayor Alicia Glen

Alicia Glen: City Hall’s Goldman girl De Blasio’s new housing czar is already allaying concerns that the administration is anti-real estate.

lingerers 55 Luxury The priciest Manhattan homes that aren’t selling.

real estate’s 58 NYC highest-paid lawyers A look at the sky-high hourly rates charged by the industry’s top attorneys.

55

64

Feverish investment for Far West Side A guide to the properties changing hands and new buildings going up in Manhattan’s last real estate frontier.

17

66

The new ideas that poured into Lower Manhattan’s rebuilding resulted in a stronger infrastructure—and some architectural gems. A key piece in the undertaking is Pelli Clarke Pelli’s new Pavilion at Brookfield Place, a public space serving the 35,000 commuters who use the PATH system daily. Because the system’s track network runs underneath, the pavilion’s soaring roof and hanging glass curtain wall could only be supported at two points. Thornton Tomasetti met the challenge with a pair of 54-foot-tall “basket” columns, each gathering its loads in an expressive weave of lightweight, brightly painted twisting steel tubing that spirals down to plaza level in an ever-tightening array. It is innovative design, with a twist.

Structural Steel Right for any application

Residential Market Report

Showing up for the showcase

Developer Steve Witkoff, one of the event’s panelists

TRD’s New Development Showcase brought out big crowds and top-notch panelists.

72

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

The real estate scion squeezes in exercise time in the ‘Pain Cave’ at Fisher Brothers’ Midtown office.

Reports from around the country on significant developments and trends.

87

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

100

Fisher during a recent triathlon

Development Updates

74

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

Getting a ‘Handel’ on UWS A new cross-hatched tower from Handel Architects is its best work in the area, says critic James Gardner.

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

A rendering of 170 Amsterdam Avenue

10 12 June October 2014 2012 www.TheRealDeal.com www.TheRealDeal.com

Commercial Market Report

National Market Report

Winston Fisher, the health guru

122

24

82

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

Architect: Pelli Clarke Pelli Architects Structural Engineer: Thornton Tomasetti Photograph: Tex Jernigan

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

102

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

118

Calendar of Events Check out this month’s activities.

Ross on getting fired The Related chief talks about losing two jobs, his dad’s coffee vending patent and more.

120

We Heard A lighter look at industry buzz.

www.TheRealDeal.com March 2012 00

We Finance New York We are a veteran-owned, federally chartered bank with a focus on educating our customers about the mortgage process and providing opportunity for home ownership. Our products include: super jumbo, jumbo, conventional conforming, FHA, VA., Coop, Condo, multi-family, and mixed use. We have complete control of the entire lending process. We originate, process, underwrite, close, and fund each and every loan. Our industry-leading technology platform allows for streamlined communication between departments, providing the highest level of service for your clients.

Long Island

Manhattan

560 Broadhollow Road Mellville, NY 11747

120 Broadway, 29th Floor, Suite 2950 New York, NY 10271

(516) 430-5555

(646) 568-3600

LAKEWOOD

401 Madison Ave, Third Floor Lakewood NJ 08701

(732) 719-8750

Copyright 2014 Š The Federal Savings Bank | All rights reserved | www.thefederalsavingsbank.com

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

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

You need Rosewood Realty Group

Art Directors Ronald Gross, Keziah Makoundou Senior Reporter Adam Pincus ReporterS Hiten Samtani, Rich Bockmann SOUTH FLORIDA BUREAU CHIEF Eric Kalis Contributors C. J. Hughes, David Jones, Adam Piore EDITORIAL OPERATIONS MANAGER Linden Lim Web Producers/REPORTERS Mark Maurer, Julie Strickland, Zachary Kussin, Claire Moses SOCIAL MEDIA COORDINATOR Kerry Barger Editorial Assistant Sasha von Oldershausen

212.359.9900

www.rosewoodrealtygroup.com

Rosewood Knows New York

We are pleased to announce the following results for the year-to-date May 31st 2014, Rosewood has completed total sales of

$1,000,354,000 which include:

Manhattan: Aggregate sales of

$322,293,000

37 Buildings / 903 Residential Units / 49 Commercial Units Brooklyn: Aggregate sales of

$225,590,000

35 Buildings / 1,539 Residential Units / 9 Commercial Units Bronx: Aggregate sales of

$213,841,000

40 Buildings / 1,884 Residential Units / 46 Commercial Units Queens: Aggregate sales of

$238,630,000

19 Buildings / 1,336 Residential Units / 12 Commercial Units

© Copyright 2012 Rosewood Realty Group. All rights reserved.

14 June 2014 www.TheRealDeal.com

Interns Juan Zielaskowski, Inga Ryabchikova, Maurice Mayfield Photographers Chris Martin, Marc Scrivo Director of mARKETING OPERATIONS Yoav Barilan ASSOCIATE SALES DIRECTOR Ross Fox Advertising Sales Eran Evron, Abi Laoshe, Nick Mascaro, Robert Stearns, Nicki Chadi, Sigalit Levi, Marcus Guest, Chris Cuomo DIGITAL TRAFFic MANAGER Junaid Zahid WebmasterS Nima Negahban, Andrew LoCascio Finance director Kenneth Cyrus OFFICE MANAGER Virginia Durso Circulation Paul Destanko Distribution Mitchell Newman, Patricia Hofmann, Forero Express ATTORNEY Barry J. Friedberg Trachtenberg Rodes & Friedberg LLP Accountants William T. McCallum, CPA, P.C., Christine Wang The Real Deal is a registered trademark of Korangy Publishing Inc. Copyright © 2014. Call 212-2601332 or e-mail news@therealdeal.com. Warning: It is illegal to photocopy or reproduce any part of The Real Deal without express written consent. For reprints and duplication rights, call 212-260-1332.

Principal office: 158 West 29th St., New York, NY 10001. The Real Deal is published monthly. Annual subscriptions cost $95. Send check or money order to 158 West 29th St., New York, NY 10001.

call 212.421.1800 - info@poliformusa.com - www.poliformusa.com Poliform and Varenna Contract Division – custom made production for turn-key projects

EDITOR’S NOTE Guilt-free condos in the gilded age

T The Rothschild Team & Engel & Völkers NYC Nataly Rothschild and Julie Zelman operated the sophisticated boutique Rothschild Realty Associates, advising high-end domestic and international real estate clients. Nataly and Julie each have strong track records, and together they represent over 25 years of diverse real estate experience.

Now Nataly and Julie have joined our growing team. We’re very fortunate and very pleased to welcome them.

The Rothschild Team, Licensed Associate Real Estate Brokers Engel & Völkers NYC 430 Park Avenue • 11th Floor • New York • NY 10022 +1 646-757-2522 Nataly.Rothschild@evusa.com Julie.Zelman@evusa.com ©2014 Engel & Völkers. All rights reserved. Each brokerage independently owned and operated. Engel & Völkers and its independent License Partners are Equal Opportunity Employers and fully support the principles of the Fair Housing Act.

Nikki Beauchamp & Engel & Völkers NYC Nikki was recently named one of the 100 Most Influential Real Estate Leaders by Inman News. A native New Yorker and member of the International Real Estate Federation, she has been a trusted real estate resource for local and global clients for over 10 years.

Now Nikki has joined our growing team. We’re very fortunate and very pleased to welcome her.

Nicole A. Ramos Beauchamp, Licensed Real Estate Salesperson Engel & Völkers NYC 430 Park Avenue • 11th Floor • New York • NY 10022 +1 646-757-2521 Nicole.Beauchamp@evusa.com

©2014 Engel & Völkers. All rights reserved. Each brokerage independently owned and operated. Engel & Völkers and its independent License Partners are Equal Opportunity Employers and fully support the principles of the Fair Housing Act.

16 June 2014 www.TheRealDeal.com

he number of super-luxury condo projects keeps increasing in Manhattan, and that means the amenity wars are back in full swing.

Like toothpaste companies that come up with new ways to market their nearly identical products on what feels like a monthly basis (whitening being the latest fad), developers need to differentiate their buildings with bells and whistles.

Doormen, concierges, gyms, pools, rooftops, kid’s playrooms and bike storage are essentially prerequisites now at a certain price range. But that’s not to say there aren’t standouts among the 70 new Manhattan condo projects on the market today. As part of TRD’s New Development Showcase last month — which featured panel discussions and dozens of booths where sponsors showed off their projects and products — the magazine produced a 100-page guide to all Manhattan new condos. (The guide was passed out to the 3,000-plus attendees, but is still available at TheRealDeal.com in case you missed it.)

Top prize for the most outrageous amenities has to go to the Delos Living project at 66 East 11th Street, where Leonardo DiCaprio and Deepak Chopra have reportedly bought units. The apartments come with a range of “wellness” features, including Vitamin C–infused showers, purified air and water, posture-supportive flooring, a kitchen herbarium and “dawn simulation provided by a proprietary circadian lighting design.” Herbs and clean air don’t come cheap though: remaining apartments there are going for $45 million and $50 million a pop.

Other projects with standout amenities include 515 East 72nd Street, which has the largest on-site private park in New York City at 20,000 square feet; 560 West 24th Street, where apartments are specifically outfitted for art collectors; and 12 East 13th Street, which comes with a “robot” parking system.

The project’s “locally sourced” flooring could come from trees in Fort Tryon Park. And apartment temperatures could automatically adjust to offset any rises in the average temperature of the planet.

But with green and wellness all the rage (and rightly so, given the recent studies showing that global climate change has already taken place), why not take it a step further? I’m proposing the first condo of this new Gilded Age that will allow wealthy residents to live completely guilt free. It’s a perfect counterpoint to the extreme fortunes being amassed today and might even count as charity work. It would allow foreign buyers with ill-gotten cash to “clean” their money in a socially responsible fashion, and it might appeal to the eco-sensitive Brooklyn crowd too.

Such a condo would have kitchen countertops and bathroom sinks made with hand-selected Italian marble that comes from a village where everyone is happy and has universal health care. And there would be locally sourced flooring, from trees in Fort Tryon Park, felled by workers enrolled in a New York City jobs program.

Additionally, apartment temperatures at this project would automatically adjust to offset any changes in the average temperature of the planet. And, of course, no materials would come from a Brazilian rainforest or play a part in melting any ice caps.

And finally, instead of a “dedicated lifestyle consultant” — which buyers can get at the Carlton House on 61st Street — to make reservations and travel plans, there would be an “environmental consultant” who would help residents reduce their carbon footprint. All of these things would go a long way in making buyers feel good about their purchases.

And they seem pretty reasonable and useful compared with Vitamin C–infused showers.

If that’s enough bells and whistles for you, we’ve got a lot of meat and potatoes in the issue too (forgive my apples-to-oranges metaphor.)

In time for summer, we take a look at the biggest Hamptons brokerage firms, priciest Hamptons deals, and trendy new retail on the East End, starting on page 32.

On page 64, we examine the huge level of property trading and development taking place on the Far West Side — much of which has been spawned the massive Hudson Yards and Manhattan West projects. Big companies and individuals, from Tishman Speyer to Frank McCourt to Rockrose to Chetrit to Eliot Spitzer are all making moves there that are helping transform the area into an entirely new neighborhood.

Finally, check out our piece on high-end Manhattan homes that have lingered longest on the market (page 55) and our breakdown of the eye-popping hourly rates charged by New York’s top real estate lawyers (page 58).

Enjoy the issue and the summer!

Stuart Elliott

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

By Mark Maurer he so-called “whisper listing” is a longtime staple among New York City sellers looking to quietly unload a high-priced luxury residential property.

Sellers, of course, choose to sell their properties without ever officially listing them for a variety of reasons. Sometimes they are in financial distress, other times they are celebrities or public figures hoping to keep news (and photos) of their properties off the Internet and away for voyeuristic eyes.

But new market conditions in Manhattan mean that off-market deals are becoming more common among the masses and are no longer limited to the top-end of the market, brokers say.

Douglas Elliman broker Jacky Teplitzky and other industry insiders said that these days, off-market deals are happening for homes priced as low as $1 million.

While brokers saw a rise in “whisper listings” in 2009, many of those properties were being sold by wealthy owners who had been hit by the financial crisis and needed to sell to recoup their cash.

Today’s sellers are going off market for a different reason: To take advantage of strong demand in a hot market, while avoiding dealing with the hassle of advertising their property to the public and also sometimes cutting out listing brokers.

In short, New York’s ongoing residential inventory shortage is empowering sellers to take more control by selling their apartments, whatever the price point, without ever bringing on a listing broker or putting them on the open market.

In these scenarios, the doormen and superintendent often (literally) hold the key to connecting a buyer to a seller, by spreading the word about an owner’s plan to move.

“Doormen know everything happening in the building,” Teplitzky said.

Teplitzky said in some scenarios a broker will meet with a seller to pitch them on getting a listing, but then never hear back only to discover that the seller already found a buyer and made a deal without an agent. To be sure, many of these deals do involve

T

‘Whisper’ listings make more noise With inventory tight, more owners are selling without marketing their home

buyers’ brokers.

Teplitzky said she was in talks last month to list an Upper East Side two-bedroom co-op with an option to convert a dining area into a third bedroom. It “was supposed to go for about $1.5 million,” she noted. Teplitzky said it went into contract for $1.4 million two weeks later without a listing agent.

“We know the quiet deals are happening more and more,”

Teplitzky added. “It’s a huge problem.… A way of solicitation was once just getting a listing.”

But some owners believe that

showings. They feel it’s “not worth the headache,” Teplitzky said.

Brokers argue that listing the property will mean selling it at

“The only way to maximize your selling price is by exposing the apartment to the maximum number of buyers,” Teplitzky said.

“We know the quiet deals are happening more and more. It’s a huge problem.”

Jacky Teplitzky, Douglas Elliman they can sell at a good price, while also avoiding paying a broker or dealing with the hassle of daily

a higher price, a fact that is especially important to owners of lower-priced homes.

Sellers may also not want to list because they are fearful of signing Continued on page 104

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www.TheRealDeal.com June 2014 17

Landlord incentives persist — in pockets

Despite strong rental market, owners are paying commissions in areas with lots of new projects

By Mark Maurer ith record-high rents and extra-tight inventory, fewer Manhattan property owners are dangling incentives to lure renters and brokers to their buildings. But the practice persists in certain neighborhoods — predominantly Midtown — where competition to fill rental units is fierce.

Even as Douglas Elliman data shows overall average monthly rents hit a five-year high of $3,247 in April, brokers said that owner-paid commissions, or OPs, linger in select locations. OPs, of course, allow owners to advertise their rentals and “no fee” apartments to tenants because they are footing the brokers’ commission fee.

Brokers say despite rising rental rates, the practice, which is generally used when the market is softer, is nevertheless being employed at the newest and biggest rental buildings in Midtown.

Glenn Lawrence, a broker at Town Residential, said he is largely seeing OPs stick in Midtown West, especially in buildings such as the Gotham Organization’s Gotham West, Rose Associates’ the Helux,

W

18 June 2014 www.TheRealDeal.com

Roseland Properties’ Riverbank West; Silverstein Properties’ River Place and Silver Towers, and Durst Fetner’s the Helena.

These six developments have a combined 4,433 units. More than 2,000 of them, at Gotham West and Silver Towers, hit the market over the past several years, creating a temporary glut.

Officials at Gotham and Rose declined to comment, while officials at Silverstein,

cies, especially in new rental buildings where a large number of units need to be leased up quickly.

“Any big rental building entering the market is bound to soften it a little,” said Yuval Greenblatt, an executive vice president at Elliman, “but it is a very temporary softening.”

Anthony Lolli, CEO of brokerage Rapid Realty, pointed to Avalon Midtown West

neighborhoods, the trend is largely on the decline.

On the whole, the use of OPs and other incentives dropped to 9 percent of all Manhattan rental deals in April, according to a monthly report from brokerage Citi Habitats. By comparison, in January, the share of general move-in incentives in Manhattan was 13 percent. The numbers are far below those during the recession

Brokers say landlords are still paying commissions at the newest and biggest rental buildings in Midtown.

Durst Fetner and Roseland did not respond to requests for comment.

In addition, Lawrence said landlords east of Second Avenue, in some buildings in the Financial District, and in small pockets through the Upper West Side and the Upper East Side continue to offer incentives. “I am seeing some [owner-paid commissions] linger, but only in the areas where the buildings absolutely need to,” Lawrence said.

Brokers say the commissions serve as a valuable tool for efficiently filling vacan-

at 250 West 50th Street among other locations where OPs are lingering. Some management companies offer OPs on a month-to-month basis, often to the chagrin of brokers, Lolli noted. A spokesperson for Avalon could not be reached for comment.

“They turn it on and off like a faucet, whenever they expect vacancies,” Lolli said. “It drives brokers crazy.”

The good news, for landlords at least, is that while they need to offer incentives to fill units in some select buildings and

in 2009, however, when these incentives averaged 52 percent of all Manhattan rental deals.

But not all brokers are seeing a rollback of concessions in their daily rental business.

Platinum Properties sales and leasing director Sang Oh said the spring “is usually the time where landlords become more confident in their ability to control vacancies and take away concessions.”

But he added that while some landlords Continued on page 114

www.TheRealDeal.com March 2012 00

By the Numbers A space at Industry City

$1,700 Median residential rent in Sunset Park. The median rent in the five boroughs is $2,800. “There’s a lot of upside there. It’s going to start to rise,” said David Maundrell, president of aptsandlofts.com.

$295,000 Median sale price for a Sunset

Park condo, nearly 70 percent below the $975,000 in Manhattan.

By comparison, the median in Bushwick is $360,000. In Park Slope, it is $868,000. In Dumbo, condos go for well over $1 million.

Sunset Park is rising

With Industry City reviving the area, the undervalued Brooklyn neighborhood is seeing new real estate action

A

recent spate of interest and investment in Sunset Park is shining a light on real estate in the newly hot Brooklyn neighborhood. Dubbed “Brooklyn’s Chinatown,” Sunset Park now has more Chinese residents than any other area of New York City — including Chinatown in Lower Manhattan. And it remains one of the least expensive (read: most undervalued) Brooklyn neighborhoods for renting or buying residential property, spurring interest among both gentrifiers and investors, according to brokers. In addition, at the newly repositioned 6 million-square-foot Industry City, an influx of fashion and design tenants are breathing new life into Sunset Park’s commercial real estate and positioning it as an eventual rival to Manhattan’s Garment District. This month, TRD looked at the rapid transformation of Sunset Park and what that means for the future of the real estate market there.

B y S asha von O ldershausen

73 Number of commercial and multi-

family buildings sold in Sunset Park in 2013, for an aggregate dollar volume of $105 million.

By comparison, in 2009, 23 such buildings sold for an aggregate $27 million.

out over 30 sites in Brooklyn, Manhattan and Jersey City first.

$35 million Amount the city invested to convert

a 1.1 million-square-foot building into an industrial center, now called Liberty View Industrial Plaza.

Since leasing began in February, a warehouse-style electronics retailer called Micro Center has opened a 30,000-square-foot space there.

11,600 Square footage that fashion

company Steven Alan is renting in Industry City. There are now 20 to 25 fashion-related tenants at the complex, including Malia Mills, Little Hip Squeaks and Lana Stepul.

A number of those designers moved from Manhattan, positioning Industry City as a potential Garment District rival.

45% Rise in average price of commercial properties sold in Sunset Park to $1.76 million in 2014, from $1.21 million in 2009.

6 million Total square footage of Sunset

Park’s Industry City, a 16-building former industrial warehouse complex that’s been repositioned as a buzzing hive of artists and start-up entrepreneurs, some of whom say they can no longer afford the rising rents there. By comparison, One World Trade Center is half that size.

49.9% The stake that Jamestown

Properties, owner of Chelsea Market, acquired in Industry City last year from majority owners Ruby Schron and the Fruchthandler family in a deal estimated to be worth at least $150 million. Jamestown has said it will pour another $100 million into renovating the aging complex.

$50 million Cost of the Brooklyn Nets’ training facility being built at Industry City. The team reportedly checked

71% Increase of the Chinese population in Sunset Park from 2000 to 2011, bringing the total number of Chinese residents to 34,000, the most of any New York City neighborhood. By comparison, Chinatown’s Chinese population dropped 17 percent in those years.

364 The number of new hotel rooms

slated to come online in Sunset Park.

That includes an 88-room hotel at 833 39th Street and a 70-room hotel at the nearby 457 39th Street. Both hotels will be designed by Michael Kang Architects.

$155 Average cost of a Sunset Park hotel room on a weeknight. The average daily rate boroughwide is $165. In Manhattan, it’s $281.

Sources: New York Daily News, Zillow, Massey Knakal Realty Services, Crain’s, Kalmon Dolgin Affiliates, CPEX, aptsandlofts.com, Miller Samuel, New York Times, Lodging Advisors

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20 June 2014 www.TheRealDeal.com

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D e h t t

A

S

Stan Gale Sr.

tan Gale Sr.’s first love was soccer. After a broken ankle, however, his dream of playing professionally was derailed.

Instead, in 1974 he joined the family business: Daniel Gale Realty, a Long Island–based residential brokerage founded by his grandfather in 1922 that’s now part of Sotheby’s International Realty.

But after less than five years, he switched gears and flipped to the commercial side of the business, starting at Grubb & Ellis. Then in 1985 he started a company focused on the suburban commercial market. In 2001 he launched his current development firm, Gale International, and in 2006 he sold his suburban business to Mack-Cali in a $545 million transaction.

Gale International has 20 employees in New York, more than 100 in South Korea and China and two in California.

Among the feathers in its cap is Songdo City — a massive environmentally conscious “mini-city” being erected outside Incheon, South Korea, at an estimated cost of more than $45 billion. Closer to home, there’s a condo project at 21 West 20th Street, where units priced up to $35 million hit the market in December. Last month, Gale showed TRD around his Madison Avenue office. B y J ulie S trickland

Arsenal team logo

Travel

During college, Gale studied abroad in London

Although he makes frequent trips to South Korea

for a semester in 1970. Two years later, he began

for work, Gale’s real love is for coastal destinations

avidly following London’s Arsenal soccer team

like the Maldives. “I want to go see Eastern

after they won the national championship.

Europe, the Mediterranean coast,” he said. “I love anything ocean-oriented.”

Long Island map Time capsule When Songdo opens, a time capsule from the original construction site in 2004 will be unsealed. The metal casing encloses timepieces from Gale’s Seoul office, signed notes from the day construction began and

Tower model

This historic map of the Gale

The Northeast Asia Trade

family home on the North Shore

Tower, a work in progress in

of Long Island sits behind his

Songdo, will be South Korea’s

desk. He estimates that the

tallest building, at 68 stories,

map, a gift from his parents, is

upon completion this year. “It’s

between 75 and 100 years old.

the welcoming beacon from the

“My grandfather marketed the

brand new, beautiful airport,”

area up by the water here, where

Gale said.

my 92-year-old mother lives

other items of the day.

today,” he said.

Brother’s catamaran

Cosmos soccer ball Gale’s passion for soccer began in grade school. In 1971 he

All the Gale children grew

attended the U.S. Olympic regional tryouts at Emory University.

up on the water, clamming,

He also tried out for the New York Cosmos in 1973, but didn’t

fishing and sailing. His

make either team.

brother’s boat, a catamaran, is named Wild Whiskers.

Whale sculpture Fashioned by a Korean artist, the whale sculpture is a model

Korean medals

of a larger version in Songdo’s

Central Park, which

replicates the slightly more famous

New York park. The

sculpture combines the whale —

Gale International built Songdo City in partnership with Posco,

of the Gale family business

a multinational steel company, and the Korean government. The

historical emblem of Posco —

partners spent five years planning the city, which will officially

steelworks that symbolize how

open in 2018, when South Korea hosts the Winter Olympics.

companies “came together

Gale received this presidential award and honorary citizenship

through the seas.”

a symbol and

a

along with the two

at Incheon after Songdo was designated a United Nations Green Fund City in 2012.

22 June 2014 www.TheRealDeal.com

PHOTOGRAPH OF Stan Gale Sr. FOR THE REAL DEAL BY Christian Fernandez

575 Madison Avenue, NY, NY 10022. 212.891.7000 | Š 2014 Douglas Elliman Real Estate.

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Commercial Ma r k e t

Asking rents drop sharply Downtown Gap between asking rents and actual rent paid grows

By Adam Pincus espite large leasing deals such as Time Inc. relocating to Lower Manhattan last month, the average asking rent in all three Manhattan markets ticked down in May, the first time that has happened in at least a year.

Some leasing executives took the decline in stride, explaining that it was the result of expensive space being taken off the market. But others saw it as part of a broader trend underscoring a relative weakening of the landlord’s position in the Manhattan leasing game.

In the market’s most high-profile price cut, the Durst Organization and the Port Authority of New York and New Jersey cut the asking rent for large tenants eyeing mid-tower space in One World Trade Center by about 10 percent to $69 per foot. The 3.1 million-square-foot skyscraper is just 55 percent leased.

The overall asking rent in Manhattan, impacted heavily by that price cut, fell by 81 cents to $63.78 per square foot last month, from $64.59 per foot in April.

At the same time, the availability rate, which measures space vacant now and space that will be available in approximately 12 months, tightened in Manhattan, declining to 11.2 percent last month from 11.3 percent in April, figures from commercial firm Colliers International showed.

Even so, landlords of Midtown’s modern Class A buildings face some more sobering economic news. The spread between the asking rent and the actual rent paid to the property owner — known as the net effective rent — grew to its highest level since the third quarter of 2009, according to data from commercial firm JLL. While asking rents have steadily trended up since 2010, the net effective rent took a nose dive over the last year. As recently as the second quarter of 2013, the difference was just over $5 per square foot.

Yet through the first quarter of this year, JLL figures showed, it tripled, to more than $15 per foot in Midtown’s Class A buildings.

“The delta between the asking rents and the net effective rent, that is growing,” said Scott Panzer, a landlord and tenant representation broker for JLL. He said he executed four deals in the last 24 months in which the net effective rent is about the same as it was three or four years ago.

The spread grew in recent months because the asking rent steadily increased, while the net effective have declined.

“The asking rents are up, but the net effective rents after amortization of concessions have been roughly the same,” Panzer said. “Three years ago the spread was less, because the asking rents were lower.”

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Manhattan office stats AVAILABILITY RATE

AVG. ASKING RENT

May ’14 Apr ’14

Manhattan 11.2% $63.78 11.3% $64.59

May ’14 Apr ’14

Midtown 11.6% $74.00 11.6% $74.40

May ’14 Apr ’14

Midtown South 9.1% $55.89 9.2% $56.15

May ’14 Apr ’14

Downtown 13.3% $48.53 13.8% $50.99

Source: Colliers International

Midtown A large space occupied by one of Manhattan’s longest running tenants, DC Comics, hit the market last month. The creators of superheroes from Batman to Wonder Woman will be moving closer to the movie industry — Burbank, California — from the 699,000-square-foot 1700 Broadway just south of Columbus Circle.

The space is part of a block in the building on floors 5 through 9 that has a total of 118,789 square feet being marketed by a Newmark Grubb Knight Frank team of David Falk, Peter Shimkin and Daniel Levine, information from CoStar Group shows. DC Comics, a division of Time Warner, moved to 1700 Broadway in the mid-1990s, according to CoStar, but the publisher has been a fixture in Manhattan since it was launched in 1934.

At the same time, Time Inc., the magazine division of Time Warner that is set to be spun off on June 6, inked a deal to leave Midtown for Lower Manhattan last month.

Other big tenants stayed put in Manhattan’s largest market, such as the Blackstone Group, which renewed and expanded, taking 489,495 square feet at 345 Park Avenue.

The average asking rent in Midtown fell last month by 40 cents to $74.00 per foot from $74.40 per foot, while the availability rate remained flat at 11.6 percent, Colliers figures revealed.

“There does seem to be optimism in the market, and deals are getting done, even those with lease expirations two to three years out,” said Chemerie Cheng, managing director of research and consulting for Colliers’ New York office. Yet she added, “Grand Central and Sixth Avenue continue to be a bit softer than other segments.” Even so, she said in an email that Sixth Avenue Continued on page 110

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In their words...

“The number of trees that I am responsible for killing as a result of my practice is tremendous.”

Real estate attorney Stuart Saft, on the massive amount of paperwork generated by condo offering plans

“It’s a lot of money and a lot of time and it can be a crapshoot.”

Corcoran Group’s Deborah Rieders, on why trying to secure preapprovals for major construction before selling a luxury home may not be worth the effort.

“If they repealed the Urstadt Law, New York City would look like Havana.”

Former state housing commissioner Charles Urstadt, speculating about possible rent hike freezes if oversight of rent regulation is given back to the City Council.

26 June 2014 www.TheRealDeal.com

“We’re not going to tell them how to run their business.

They run it bloody well.”

Savills CEO Jeremy Helsbly, on the British giant’s $260 million acquisition of tenant rep firm Studley.

The funniest and most insightful comments on real estate

“I guess better to be associated with buyertigue than twerking!”

Warburg Realty’s Jason Haber, Tweeting about coining a new phrase to describe buyers’ frustration with low inventory levels.

“When the facts change, the only right thing to do as a public-serving institution is to take a look with fresh eyes.”

New York Public Library president Tony Marx, on the library’s decision to cancel its plans to carry out a controversial renovation after costs skyrocketed.

“I wish we could put it on the market and get some money and finish this already.”

Serbian consul general Mirjana Zivkovic, on the difficulties of selling a 13-room Park Avenue co-op whose ownership is now fractured between Yugoslavia’s five successor countries.

“I do not have funds to pay the accountants.”

Developer Shaya Boymelgreen, on how over $50 million in judgments against his company have left him hard-pressed for cash.

“What I know about hospitals I’ve learned in the past 30 days.”

Larry English, attorney and partner in Brooklyn Health Partners, following his failed bid to buy the Long Island College hospital redevelopment site.

Sources: The New York Times, Twitter, Crain’s, The Wall Street Journal, New York Daily News.

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JODY KRISS

Brooklyn’s old-school investors A look at the other players inside the real estate world of murdered Williamsburg developer Menachem Stark

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By Adam Pincus he behind-the-scenes wrangling that has played out over the past two years to control 49 Dupont Street, the massive development site in Greenpoint, is not so different from the white-knuckle deal-making common in Manhattan.

In the jockeying over the Brooklyn property, one low-key investor named Joseph Brunner inked a contract in 2012 to buy the site for $23.3 million. In a complicated and opaque fashion — and with other suitors competing to get in on the action — the deal took until last month to finally close. And in a twist, Brunner has now found another investor to flip it to for almost double what he paid: $48.5 million.

But unlike in Manhattan, where the buy-

T

test markets in the city.

“They are not all over the press like SL Green or Extell Development, but they are extremely well-known in the development community in Brooklyn,” said Sean Kelly, a managing director at Brooklyn-based commercial firm CPEX Real Estate.

Berel Nagel, a salesperson with the Brooklyn-based commercial brokerage Kalmon Dolgin Affiliates, echoed that point.

“They are not trying to be secretive or trying to be non-corporate,” he said. “It is just the way they do business. It is the hamish way of doing things,” he continued, using the Yiddish word for homey.

This month, The Real Deal looked at some of the most active, yet under-publicized players in the market who have amassed portfolios estimated at tens of millions of dollars and more.

The corporate creep By all measures, the development and sales market is on fire in Brooklyn. Massey Knakal Realty Services shows that the total investment sales dollar volume in the borough in the first quarter was up 213 percent from the same period a year ago, to $1.67 billion, including $327 million in development sales alone.

“They are not trying to be secretive or trying to be non-corporate. It is just the way they do business. It is the hamish way of doing things.”

Berel Nagel, Kalmon Dolgin Affiliates 49 Dupont Street in Greenpoint

DEFENDANTS: Akerman Senterfitt, LLP (Jody Kriss’ father‘s law firm) Martin Domb Nixon Peabody Adam Gilbert Roberts & Holland, LLP Elliot Pisem Morgan Lewis & Bockius, LLP Kelly Moore Duval & Stachenfeld, LLP Bruce M. Stachenfeld Craig L. Brown U.S. Attorney’s Office Todd Kaminsky Dogan & Associates Mel Dogan

iStar Financial CIM Group The Trump Organization Donald Trump Ivanka Trump Beys, Stein & Mobargha, LLP Felix Sater Nader Mobargha Michael Beys Satterlee Stephens Burke & Burke, LLP Walter Saurack Salomon & Company, PC Alex Salomon Jerry Weinrich Stephen Jacobs

Alston & Bird, LLP Alexander S. Lorenzo Bayrock Group Bayrock Group Bayrock Whitestone Bayrock Spring Street Bayrock Camelback Bayrock Merrimac David Granin Michael Samuel Salvatore Lauria Tevfik Arif Julius Schwarz Brian Halberg National Union Fire Ins. Co.

FIND OUT AT WWW.JODYKRISS.COM 28 June 2014 www.TheRealDeal.com

ers and sellers are often household names in the real estate industry, the players in this Brooklyn deal and many others are largely unknown to the broader New York City real estate industry. In many ways, the murder of Menachem Stark, the Brooklyn landlord and investor, has shined a light on this under-the-radar coterie. Many had never heard of him until he was kidnapped and killed. But his death illustrated what an active real estate world he was part of.

Like Stark, many in the group are also members of the borough’s large Hasidic Jewish community. While these players may prefer to operate in relative obscurity, they now find themselves in one of the hot-

But in contrast to the last boom in Brooklyn, this time institutional money has joined the fray. Firms with hundred-million-dollar funds like Meadow Partners, Kushner Companies and SL Green have all poured cash into Brooklyn.

As a result, these corporate entities are now sometimes buying from, and interacting with, these low-profile players. And despite the entry of the institutional buyers into the market, these old-time Brooklyn players — who often do not come to the table with fancy degrees and MBAs — still regularly do deals through ad-hoc arrangements. For example, Stark, who along with his partner Israel Continued on page 104

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

REGULATING REAL ESTATE

Cash-outs stage a comeback Homeowners use loans to consolidate debt or invest, not to splurge on fancy cars or take big vacations

By Kenneth Harney he name itself conjures up images of ATMs: cash-outs. Many may associate the term “cashout refinancing” with the frothy and dangerous days of the real estate boom, when some owners turned their hyperinflating houses into money mills, leveraging their equities to the hilt. That didn’t end up too well for a good number of them.

But now that equity holdings in homes are surging again, cash-out refinancings are coming back into vogue — this time under much tighter controls by lenders and used for saner purposes by borrowers than they were last decade.

Giant mortgage lender Quicken Loans estimates that about one-quarter of new refinancings are cashouts. Federally chartered investor Freddie Mac reports that cash-outs grew to 17 percent of all refinancings in the first quarter of this year, compared with 14 percent during the same period in 2013.

A cash-out refi means that the homeowner extracts more money in a replacement mortgage than the current balance, rather than simply lowering the rate and keeping the principal amount the same as it was before the transaction.

Say a homeowner has an existing loan with a $200,000 balance. Thanks to rising home values, the property is worth $400,000. If the homeowner has

T

Bob Walters, chief economist for Detroit-based Quicken Loans, said his firm is seeing “a lot of debt consolidation” using cash-out refinancings.

The same is true at Insignia Bank in Sarasota, Fla. CEO and Chairman Charles Brown III said “sophisticated” borrowers concerned about rising interest rates are consolidating high-cost credit card, mortgage and other floating-rate debt into fixed-rate home loans. The replacement mortgages often carry 30-year rates anywhere from the low 4 percent range to just below 5 percent, depending upon the borrowers’ credit and income profiles.

Cyndee Kendall, Northern California regional mortgage sales manager for Bank of the West, said a typical cash-out refi client today has a floating-rate second mortgage or equity credit line, plus a first mortgage with an above-market rate and wants to roll those debts into a single, fixedrate jumbo mortgage. They do it, she said, to better manage their cash flow and protect against anticipated interest-rate increases as the Federal Reserve tapers its Treasury securities purchases.

Paul Skeens, president and owner of Colonial Mortgage Co., a lender in Waldorf, Md., is seeing another frequent use of cash-outs: Recession-era real estate investors now cashing in their chips.

A typical cash-out refi client today has a floatingrate second mortgage or equity credit line, plus a first mortgage with an above-market rate, and wants to roll those debts into a single, fixed-rate jumbo mortgage.

Cyndee Kendall, Bank of the West a need for cash and good to excellent credit scores, it might be possible to negotiate a refinancing into a $250,000 or $300,000 new fixed-rate mortgage. Putting aside transaction costs, the owner would end up with roughly $50,000 to $100,000 in cash at closing for whatever use desired.

During the height of the boom years, Freddie Mac data show that borrowers opted to pull out some cash in 80 percent or more of all refinancings. Freddie defines a cash-out refi as one where there is an increase in the principal balance of at least 5 percent over the previous balance. In the wake of the bust and recession, when owners in this country lost close to $6 trillion in equity, cash-outs have been far fewer and tougher to obtain.

Even this spring they’re just a fraction of total refinancing volume, but the purposes that borrowers plan for the cash they’re extracting have changed dramatically. Whereas a decade ago people were pulling out extra money to pay for consumer spending — cars, boats, vacations — bankers say today they’re focused on more financially sound uses.

People who bought a house for little or no cash at bargain prices during the recession, and who have built up equity during the past few years through loan amortization and property appreciation, now want to extract cash to make new investments.

A recent client, for example, did a $170,000 cash-out refinancing on a house he purchased with a 3.5 percent FHA-backed mortgage in 2011.

The client paid off the $147,000 FHA loan balance and took out a new conventional mortgage of $170,000. After transaction costs, he walked away from the refi with about $20,000 in cash, which he plans to use for a down payment on another investment house. The rate on the new loan: 4.875 percent for 30 years.

Cash-out refis aren’t the right financial option for everybody, of course. A home equity line of credit may be more flexible and cheaper. But for fixed-rate debt consolidation or pulling money out of a successful investment, a cash-out refi is worth a serious look.

Kenneth Harney is a syndicated columnist.

Like The Real Deal on Facebook: www.facebook.com /TheRealDealMagazine 30 June 2014 www.TheRealDeal.com

GOVERNMENT BRIEFS Cuomo, Christie partner for Port Authority panel New York Gov. Andrew Cuomo and New Jersey Gov. Chris Christie are teaming up on the creation of a joint panel to determine the future of the Port Authority. The panel will assess the future role of the bi-state agency, and review its management and governance as it approaches its 100-year anniversary. It will be comprised of two Port Authority board members from New York, as well as former New Jersey Attorney General John Degnan, Gov. Chris Christie Christie’s nominee for chairman of the agency; Richard Bagger, a current board member from New Jersey and the vice-chairman of a special oversight committee created after the George Washington Bridge scandal; along with Christie counsel Christopher Porrino; and Cuomo counsel Mylan Denerstein.

Gov. Andrew Cuomo The panel is to issue a report by mid-July.

New York Public Library nixes renovation plan

The New York Public Library

The New York Public Library abandoned its controversial renovation plan to replace the research book stacks below the building’s main reading room with a new circulating library. The plan was terminated following a study that found the cost of renovation would be double the $150 million budget it was allotted under the Bloomberg administration — $9 million of which the library already paid to renowned British architect Norman Foster for his firm’s design plans.

Other factors leading to the decision included opposition from the public, as well as the change in city government. Mayor Bill de Blasio voiced concerns with the renovation plan during his mayoral campaign.

The library plans to redirect the funds elsewhere in the library.

Ridgewood site gets Superfund designation

Small businesses now occupy the tainted site of a former chemical company.

An industrial site in Ridgewood, Queens, that was formerly home to the Wolff-Alport Chemical Company, has been designated a Superfund site due to “higher-than-normal” levels of radioactivity. The company, which operated there from the 1920s until 1954, dumped thorium – a radioactive byproduct of its operations – into the sewage system, according to the Environmental Protection Agency.

The EPA first investigated the site in 1988, and found the contamination level was below the allowable limit, but standards were since tightened. The agency now concludes the radioactive materials could result in a number of health problems, including cancer and liver damage. Several small businesses now occupy the parcel, which is in a densely populated area. The New York Times reported that the EPA has not yet determined if the businesses will need to be dismantled. A public school and private day care center are nearby, but were not included in the designation. The Times said the school, which already had some mitigation, and the day care center will be investigated further.

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Hamptons

Big Hamptons brokerages beef up

A ranking of the largest East End firms reveals that companies are adding agents to capitalize on active market

A

By C. J. Hughes s spring turns to summer, and East End sales prices and activity increase like traffic on Route 27, the Hamptons’ top residential brokerages are making sure that they’re along for the ride.

Building on their gains from last year, these firms continue to pad their ranks with new agents, to a degree not seen in years.

In fact, nine of the 10 largest firms added agents in 2014, according to The Real Deal’s annual ranking of the East End’s largest residential brokerages — which includes the Hamptons on the South Fork, as well as the North Fork and Shelter Island.

All told, the 10 largest firms in the second-home destination, whose fortunes largely rise and fall in tandem with New York City’s, now have 1,421 real estate agents — up from 1,277 in 2013, an 11 percent increase.

32 June 2014 www.TheRealDeal.com

By comparison, between 2012 and 2013, the totals increased from 1,230 agents to 1,277, a rise of 4 percent. (TRD tallied agent counts from the firms’ websites and from company sources.)

For many, boosting head counts is an expression of rising confidence in a market where median sales prices have jumped nearly 20 percent in a year, according to some market reports.

“I can honestly say that everybody was holding on tight after the recession, but we’re starting to exhale now,” said Judi Desiderio, the founder and president of Town & Country Real Estate, the third-largest firm on TRD’s ranking with 147 brokers, up from 130 last year.

Gold rush Douglas Elliman, which has nine offices in the area, ranked as the largest East End firm, just as it had in 2013. In this year’s tally, it had 370 agents, up from 337 in 2013.

One reason for Elliman’s big headcount bump is that the firm is staffing up a planned office in Greenport, which will be its second on the North Fork after Mattituck. The office will be located across the street from the iconic carousel in the compact waterside village.

“It’s like Sag Harbor was 10 years ago,” said Paul Brennan, Elliman’s regional manager for the Hamptons. “Europeans really like that they can walk everywhere.”

Elliman’s Southampton office is also getting bigger, going from 2,000 to 3,000 square feet; the same goes for its Bridgehampton address, Brennan said.

But Brennan acknowledged that head counts are only one metric in evaluating the strength of firms.

“It doesn’t mean these agents are setting the world on fire right away. Good agents have to build momentum, year after year,” he told TRD, striking a philosophical tone.

In fact, about two-thirds of them are novices, he said. “Everybody thinks there’s gold in them thar hills.”

To strike it rich, brokers may not have to look that far perhaps. In 2014’s first quarter, the median sales price on the South Fork was $880,000, a 19 percent year-over-year increase, according to an Elliman market report.

At the same time, there were 528 closed deals, up from 347 in the same period in 2013, or a 52 percent hike, the report shows. The report, however, also points out that the year-ago quarter was a bit quiet after a big home buying rush at the end of 2012 as purchasers scurried to avoid tax increases connected to the “fiscal cliff.”

And the sanguine news can’t mask that there still are pockets of softness in the market, with inventory increasing.

In addition, some ultra-highend properties are struggling. For

www.TheRealDeal.com May 2014 51

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Hamptons

2014

2013

Douglas Elliman

370

337

2

The Corcoran Group

342

325

3

3

Town & Country Real Estate

147

130

4

4

Brown Harris Stevens

138

125

5

5

Saunders & Associates

128

104

another big New York City firm, Sotheby’s International Realty, took the seventh spot. It has 101 agents, roughly the same as last year’s 100 and up from 87 in 2012.

But in a reminder that it’s not always the largest firms that have a hand in the top deals, Sotheby’s saw a large number of sales — 32 to be exact — over $10 million this past year, according to a firm spokeswoman. In addition, the highend firm was involved in the $75 million mega-sale of shoe designer Vince Camuto’s Southampton estate. The property went into contract last August and closed in December, said Corcoran’s Tim Davis, who had the co-exclusive along with three other brokers.

Sotheby’s flat growth in agent count is partly because the firm, which has four offices, experienced a 15 percent turnover in the past year, said John Gicking, Sotheby’s Hamptons’ manager, who attributed the churn to normal newbie attrition.

But expansion may be on the horizon.

Gicking said that Sag Harbor, where there is already a small office, “has become a priority in terms of recruiting.”

6

7

Nest Seekers International

106

49

Condos and rentals

7

6

Sotheby’s International Realty

101

100

8

8

Daniel Gale Sotheby’s International Realty

48

41

9

10

Halstead Property

36

30

10

9

Century 21 Albertson Realty

28

36

This year, Sag Harbor, the waterfront village and former whaling port, welcomed Watchcase, a conversion of a factory into 64 condos. The project was three-quarters sold out as of last month, despite the fact that construction is not finished. (The project was marketed by Corcoran Sunshine, which was not included in TRD’s tally because it exclusively does new development.)

Though Sag Harbor limits the number of units per project and requires affordable housing, the condo market there is considered untapped.

Indeed, a half-built condo project on West Water Street, first proposed in 2006, is being reborn now as Harbor’s Edge after a gut renovation. The project has 15 two- and three-bedroom units, plus three penthouses.

Halstead Property, the ninth-largest firm on TRD’s ranking, will handle sales, which are to start within weeks.

“Logically, as the population grows older and people downsize, they will be looking for homes like that,” Gicking said, adding that he is hopeful that the Panoramic View Resort and Residence in Montauk will trade hands and also go condo, now that the former owner Brian Callahan has pleaded guilty to a $96 million Ponzi scheme designed to keep it afloat.

Meanwhile, the Hamptons rental market is unusually soft this year (see related story on page 37) and some are concerned that the conditions may have an effect on the sales market.

Sources said that buyers used to plunk down for trophy homes knowing that they could recoup much of their investment capital through summer leases. But that hasn’t been the case this year.

Nest Seekers International’s Geoff Gifkins

Corcoran’s Ernest Cervi

Town & Country’s Judi Desiderio

The Hamptons’ biggest firms Rank 2014

2013

Firm

1

1

2

Number of Agents

Source: Agent numbers are from firms’ websites and from company officials as of late last month. Figures do not include managers and administrative personnel.

Saunders & Associates’ Andrew Saunders

example, the eight-bedroom, 20,000square-foot home on Mecox Bay in Water Mill that Brennan is listing for $58.5 million with other Elliman brokers is still sitting, more than a year after coming onto the market.

The home, which is one of the area’s most expensive, is owned by investor Andrew Borrok, and was originally listed in 2010 at the same price with Sotheby’s.

For his part, Brennan said that properties in the ultra-luxury bracket are mostly one-of-a-kind and don’t always conform to market trends. “A lot of these guys don’t really have to sell, so they don’t have to lower their prices,” he added.

But the high end is hardly flat overall.

34 2014 www.TheRealDeal.com www.TheRealDeal.com 52 June May 2014

Douglas Elliman’s Paul Brennan

There were 37 sales at or above $5 million in the first quarter, the fourth-highest total since 2006, the Elliman report said.

And a recent $147 million sale set an alltime price record for the Hamptons — and for the U.S. (see story on page 36).

Still, Brennan said that the hottest price category at the moment is from $1 million to $5 million.

Meanwhile, the second-largest East End firm, the Corcoran Group, had 342 agents, up from 325 last year. Ernest Cervi, who manages Corcoran’s 10 Hamptons offices, said a number of those agents are new hires. While most of those new hires have no real estate experience, Cervi said the company’s extensive referral network

Sotheby’s John Gicking

would give them a leg up.

He also said the firm is tentatively planning to open an 11th office on the South Fork in 2015.

From concrete to sand Elliman and Corcoran are not the only powerhouse New York City firms that have replicated their big footprints in the Hamptons.

Brown Harris Stevens, for instance, ranked fourth by agent headcount with 138 agents, up from 125 in 2013. A company spokesperson referred calls to Aspasia Comnas, who manages the firm’s nine Hamptons offices but did not respond to requests for comment. Similarly,

Continued on page 108

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Hamptons

Pricey Hamptons homes shatter records

A breakdown of the area’s most expensive sales and listings — this year with extra-large price tags

T

By Julie Strickland op-dollar Hamptons sales and listings are nothing new, but the past 12 months commanded especially impressive prices in Long Island’s bastion of billionaires.

The priciest deal of the last year shattered not only the Hamptons’ own lofty

Andrew Gordon, died last year, according to the New York Post. Gordon himself had been left the property by his late partner Christopher Browne of the investment firm Tweedy, Browne Company.

Few details are known about the house itself because Rosenstein’s purchase transpired in an off-market deal, but the

hedge-funder Scott Bommer, who went into contract on the purchase of three oceanfront parcels in East Hampton on Lily Pond Lane for $93.9 million in late March.

And in a strange twist, Bommer was also the buyer of the third priciest deal of the year: the $75 million pur-

mansion is set on 5.5 acres. In addition to the standard luxury amenities — swimming pools, pool houses and tennis courts are practically prerequisites for that price — the house also has formal gardens and a gazebo green house.

“If it’s something special, it can happen,” Davis said of the speedy sale,

The 10 priciest sales in the Hamptons

A ddress

L I S T I N G B ro k er ( S )

P rice

1

60 Further Lane, East Hampton

n/a

$147 million

2

93 Lily Pond Lane, East Hampton

Frederick Butti & Ed Petrie (Sotheby’s)

$93.9 million

3

16 Gin Lane, Southampton

Tim Davis & Peter Huffine (Corcoran), Pat Petrillo & John McHugh (Sotheby’s)

$75 million

4

52 Further Lane,East Hampton

Ed Petrie (Sotheby’s)

$62.5 million

5

29 Spaeth Lane, East Hampton

off market

$32.5 million

6

19 Robertson Drive, Sag Harbor

Peter Turino (Brown Harris Stevens), Harald Grant (Sotheby’s)

$31.6 million

7

209 Dune Road, Water Mill

n/a

$31 million

8

408 First Neck Lane, Southampton

Don Gleasner & Tim Davis (Corcoran)

$28 million

9

1260 Meadow Lane, Southampton

Tim Davis (Corcoran), Harald Grant (Sotheby’s)

$25 million

10 (tie)

322 Ocean Road, Bridgehampton

Dana Trotter (Sotheby’s)

$23 million

10 (tie)

140 Meadow Lane, Southampton

Raymond Smith (Douglas Elliman)

$23 million

Source: Zillow and news reports. Includes sales and in-contract deals from June 2013 to May 2014.

19 Robertson Drive in Sag Harbor, which sold for $31.6 million

Top, Barry Rosenstein. Bottom, Hedge-funder Scott Bommer bought three oceanfront parcels in East Hampton for $93.9 million.

Hedge-funder Barry Rosenstein paid $147 million for an 18-acre beachfront spread at 60 Further Lane in East Hampton.

records, but also managed to snag the heftiest price tag for a residential property in the entire country.

Early last month, news broke that Barry Rosenstein, founder of hedge fund Jana Partners, paid $147 million for an 18-acre beachfront spread at 60 Further Lane in East Hampton. The property hit the block after the owner, architect

36 June 2014 www.TheRealDeal.com

pair reportedly spent years building elaborate gardens over the property’s three adjacent lots and constructing a new seaside mansion.

That was just one of the properties The Real Deal culled together this month on a ranking of the priciest Hamptons sales and listings since June 2013.

The second priciest sale came from

chase of 16 Gin Lane in Southampton, which he bought from shoe mogul Vince Camuto. Brokered by the Corcoran Group’s Tim Davis and Peter Huffine, the Camuto house went into contract in August for $27 million over the initial ask of $48 million, and after only six weeks on the market. The nine-bedroom, 10,000-square-foot English Tudor–style

adding that listing the waterfront property, known as Wooldon Manor, during the Hamptons high season of July also didn’t hurt. “They’re in season, they’re here, and they’re engaged. Other times, they’re maybe in Aspen or Florida — if you list something in November or December, you may not have the audience Continued on page 106

www.TheRealDeal.com May 2014 51

Hamptons

Ritzy rentals lag on East End

Demand for the most expensive homes was slowed by the long winter, with market now playing catch-up

T

By Janna Herron he summer Hamptons rental market didn’t heat up until temperatures rose.

Local brokers said demand for the priciest rental properties on Long Island’s East End froze as snowy days and a chilly spring kept potential summer renters away. By last month, interest was beginning to thaw, they said. But the sparse number of the most exclusive and coveted rental properties — those priced above the $600,000 mark for the season — may catch some über-wealthy renters by surprise this year.

“People weren’t thinking ‘Hamptons’ until it got nicer out,” said Saunders & Associates’ Terry Cohen, one of several brokers marketing 396 Meadow Lane, an oceanfront residence in Southampton asking $900,000 for the summer.

“So, I think we’re going to see a very big last-minute rush. The inventory for very high-end is always limited, but this year,

The 10 priciest Hamptons properties available for summer rental P ropert y

T ow n

R a te

1

The Sandcastle, 612 Halsey Lane

Bridgehampton

$1 million*

2

Linden Estate, 160 Ox Pasture Road

Southampton

$950,000

3

396 Meadow Lane

Southampton

$900,000

4

The Rose Hill Estate, 76 Rose Hill Road

Water Mill

$895,000

5 TIE

The Grand Estate in Water Mill, Cobb Road

Water Mill

$800,000

5 TIE

Cobb Road house

Water Mill South

$800,000

6 TIE

Pheasant Field, 385 Great Plains Road

Southampton

$750,000

6 TIE

535/553 Flying Point Road

Water Mill

$750,000

6 TIE

Meadow Lane house

Southampton Village

$750,000

6 TIE

Glass house

East Hampton

$750,000

Source: Hamptons Real Estate Online and news reports. In cases where properties are listed at several prices, highest price is cited. *$1 million reflects price per month, but renters are limited to only one month each. Rentals are for Memorial Day through Labor Day with the exception of the Sandcastle property.

it’s especially low.”

Cohen and other sources attributed that limited amount of high-end

inventory to a hot sales market and to renters who renewed last fall, well before the cold spell hit.

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As of late last month, there were 20 Hamptons properties listed for $600,000 or more for the summer season, traditionally Memorial Day to Labor Day, according to Hamptons Real Estate Online, which compiles rental and sales data for the area, and news reports. While numbers for properties at that price point were not available for previous years, anecdotally, sources said inventory at this level is down this year.

Still, the 10 priciest rentals on the market last month will cost a pretty penny. They were listed for between $750,000 and $1 million (see accompanying chart).

One super-luxury rental, Bridgehampton’s 612 Halsey Lane, more commonly known as the “Sandcastle,” is being offered for a cool $1 million per month, but only for July or for August, not both.

The house is asking a slightly more affordable $550,000 for a short-term, twoweek rental.

“We’ve already done three television spots on the property. It’s gorgeous,” said Gary DePersia, a broker with the Corcoran Group who shares the 612 Halsey listing with Main Street Properties. The residence was featured on the local NBC show Open House NYC, on a local CBS show called Living Large and on Yahoo’s weekly video profiles of large estates.

While the owner, Hamptons homebuilder Joe Farrell, hasn’t found any takers for either month, big offers to rent the residence for both July and August have been turned down, DePersia said.

The property was on the sales block for $43 million, but was delisted after Farrell decided to keep it for his family, said DePersia.

Continued on page 106

www.TheRealDeal.com June 2014 37

Hamptons

The newest batch of Hamptons’ hot hangouts The buzz-worthy hotels, restaurants and stores debuting this summer on the East End

Gurney’s Inn in Montauk has been upgraded and just reopened as Gurney’s Montauk Resort & Seawater Spa.

T

By Christopher Cameron he Hamptons summer season is officially underway, and this year’s East End pleasure seekers will soon become acquainted with the new hotspots born during the off season — from upscale apparel pop-up shops to new restaurants to trendy hotels and hangouts.

While attention directed at Hamptons’ real estate typically focuses on the glamorous properties changing hands, this month The Real Deal broke down the commercial deals that took place while most of the industry was bundled up in the city.

iest destination for the New York City hipster crowd — and real estate entrepreneurs — in the last few years. Indeed, investors like Bowery Hotel owner Sean MacPherson and boutique hotel firm King & Grove (newly rebranded as Chelsea Hotels) have all opened see-and-be-seen inns there in recent years with a bohemian chic vibe.

Hotel happenings

“Montauk’s surf scene and ‘un-Hampton’ attitude has made it a destination for investors from Manhattan’s financial sector and for restaurateurs,” said Robert Kohr, a Douglas Elliman commercial broker based in the firm’s East Hampton office.

Kohr noted that old-time hotel and motel owners have been cashing out, capitalizing on the millions they can make by selling to New York City-based investors looking to come up with the next hot bou-

The Hamptons haven’t seen a new construction hotel in decades because of zoning restrictions that limit the number of rooms and keep buildings under two stories.

However, several older hotels have traded hands and are undergoing renovations.

Not surprisingly many of those renovations have been in Montauk, which has morphed into one of the East End’s trend-

ing the deal — not even the identity of the buyer — have emerged. What is known is that the hotel is being taken high-end by its new management, with a possible rebranding as a private surf club in the works. There is no word yet on exactly when it will reopen.

Initially, there were reports that the

“They are buying these places that have been around for decades, taking them upscale and making them appeal to younger clientele from Manhattan.”

Robert Kohr, Douglas Elliman

The iconic East Deck Motel in Montauk has a mystery buyer likely to take it upscale.

438 June 2014 www.TheRealDeal.com

tique venue.

“They are buying these places that have been around for decades, taking them upscale and making them appeal to younger clientele from Manhattan,” Kohr said.

According to Kohr, Montauk room rates have increased astronomically over the last five years, to roughly $300-to-

$1,000 a night, from $100-to-$300 a night. The highest rates, however, are coming from only one or two large hotels, including real estate mogul Andrew Farkas’ Montauk Yacht Club, where a 2009 renovation pushed room rates as high as $980 a night.

And the redevelopments are not slowing down.

For instance, the iconic East Deck Motel sold in October for approximately $15 million. Since then, few details regard-

buyer of the 30-room motel, which dates back to the 1950s and is adjacent to the Ditch Plains beach, was Vitaminwater billionaire Mike Repole. But representatives for the buyer, ED40 LLC, denied that Repole is the new owner.

Among those hotel plans with more clarity, the former Gurney’s Inn is newly upgraded this season and reopened on Memorial Day weekend as Gurney’s Montauk Resort & Seawater Spa. Continued on page 114

The Topping Rose House opened last year after a renovation. It’s expected to be a draw again this season.

www.TheRealDeal.com May 2014 51

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What do you mean,“sold?”

Brokers face backlash from sellers who say they sold them short

P

By Sasha von Oldershausen ricing property sometimes seems like trying to hit a moving target.

For brokers, determining an appropriate asking price boils down to a combination of factors: Understanding the market, knowing the characteristics and trends of the neighborhood, and figuring out how the unit compares to the competition.

Still, there is no one-size-fits-all formula for pricing property.

“Pricing is not a science,” said Donna Olshan, the president of Olshan Realty, which specializes in the high-end market.

“It’s an art.”

Yet in the current residential market, which is characterized by a shortage of inventory and an abundance of demand, some sellers are questioning their brokers’ artistic abilities.

An overpriced property will languish on the market. But a unit that sells immediately

begs the question: Was it priced correctly, or was it underpriced?

Generally speaking, a property that is appropriately priced should receive an offer within a couple of months. On average, properties in the top 10 percent of all condo and co-op sales were on the market for 131 days, or about four months, before going to contract in the first quarter, while lower-priced properties moved in 115 days, or about three-and-a-half months, according to appraisal firm Miller Samuel.

But in the current market, sellers may receive offers at their asking price within days of listing.

“It’s the same story, whether it’s a $1 million or $50 million property,” said Lauren Muss, a broker at the Corcoran Group, who noted that nearly every one of her exclusive listings in the last year received offers at the asking price or above. “I set a price, and when we get an offer, or several offers, at or close to the asking price within the first few

Lauren Muss

Donna Olshan

Noel Berk

Barbara Fox

SOLD $39,000,000 by Ariel Property Advisors East Harlem Pathmark, 142-96 East 125th Street

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weeks, there are certain sellers who take the quick offers to mean the property was priced too low.”

“This has happened for listings I’ve had all over Manhattan,” Muss said.

It is a common tale. Noel Berk, co-founder of the boutique firm Mercedes/Berk, was representing a buyer who wanted to make an offer on a unit in a super-luxury building. The listing broker said he would only take the asking price of $35 million, not a penny less.

But when Berk’s buyer offered the asking price, the seller — worried that the property was underpriced — withdrew the apartment.

In these situations, Berk said that brokers on both the buying and selling end can face backlash. While the seller might question the listing broker’s price, a buyer might wonder if their broker mishandled the negotiation process. “It puts the buyer’s broker at a disadvantage, too. Now the buyer wants to know, ‘Why did you offer the full asking price?’ ” she said, even though those were the terms the seller prescribed.

In this particular situation, Berk said her buyer refused to pay more and walked away. “Instead of thinking that the broker set it too low, the seller should realize that they hit it just right,” Berk said.

“It’s what every broker dreads,” said Barbara Fox, president of the boutique real estate firm Fox Residential Group. “My theory is that a seller should be just over-the-moon happy that they got taken off the hook so quickly. But generally, the consensus is that ‘if anyone is willing to pay it, then it’s too inexpensive.’ And that’s a fallacy.”

For a seller to gripe about alleged underpricing is certainly not a new phenomContinued on page 110

40 June 2014 www.TheRealDeal.com

www.TheRealDeal.com January 2014 35

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THE BIG

SHUFFLE

With major tenants opting for new buildings, a bevy of Manhattan landlords must now fill giant empty blocks

A

By Rich Bockmann n array of Midtown’s large office buildings are working to backfill mega-blocks of space slated to be left vacant when tenants with hundreds of thousands of square feet move out. And they’re doing so on the precipice of a supply boom the Manhattan market has not seen in a quarter of a century.

The challenge comes after several years during which office buildings have been essentially shuffling the deck as large tenants’ leases rolled over.

“Basically what you’ve had is a lot of moving around in Midtown recently,” said Peter Kozel, a principal and consulting director at commercial brokerage Cresa, which represents tenants.

“When you look at it, you don’t really have any net absorption of space in Midtown,” Kozel said. “The availability rate has been basically flat for the last year and a half.”

Indeed, Midtown’s availability rate — which measures space available or that will become available in the next 12 months — dropped only .6 points to 11.8 percent in 2014’s first quarter year-over-year, according to Colliers International.

Meanwhile, a flurry of high-profile lease deals in the past few years have drawn tenants to new projects in Lower Manhattan and the Far West Side.

Time Warner’s plan to leave its eponymous tower for Hudson Yards and Condé Nast’s imminent move from its Times

43 June 2014 www.TheRealDeal.com

225 Park Avenue South, left, will be largely empty when the Port Authority moves out later this year and heads to 4 World Trade Center, right.

Square headquarters to One World Trade Center are just a few examples of office space swaps filling floors in one building at the expense of another.

In addition, the office-building boom

construction will be delivered to the Manhattan market, according to Cushman & Wakefield, with more than 6.5 million square feet coming online this year — the most in a year since 1989.

“It’s certainly kind of like musical chairs.

We’re all out there competing for the same tenants at the end of the day.”

Thomas Bow, Durst Organization means there will be more new projects luring in mega-office tenants, who will in turn be exiting more space. Over the next four years, 12 million square feet of new office

In the case of a tenant that’s locked into a long-term lease at the bottom of the market, a rollover can present a landlord with the opportunity to secure a higher-paying

tenant. But when a giant tenant leaves, it can also be a pressure-filled situation for the landlord, who has to lure in one of the few mega-tenants on the hunt for space, a process that can sometimes take several years. Illustrating those high stakes, late last month, the Durst Organization and the Port Authority of New York and New Jersey dropped the asking rents below the 65th floor at One World Trade Center from $75 a square foot to $69, citing a weak market and robust competition.

Deals signing tenants to hundreds of thousands of square feet are typically done years in advance, and only time will tell how Midtown’s aging office towers will fare against the new competition, Kozel said.

“We’re kind of in a period where we haven’t really seen the impact of these bigspace users moving,” he said, explaining that only some of the new product has been put on the market so far. “It’s something that’s going to be happening over the next two years.”

Below is a look at how some towers with large vacancies are positioning themselves to lure new tenants.

4 Times Square Three years after Condé Nast inked a deal to anchor One World Trade Center, Durst has yet to find a taker for the magazine publisher’s approximately 817,000-squarefoot space at 4 Times Square — roughly half of the building.

Condé signed a lease in 2011 for 1.2 million square feet at One World Trade

www.TheRealDeal.com June 2014 43

Commercial Center. The Port Authority is the majority owner of the trade center building, but Durst has a small stake in the tower and helped to negotiate the deal.

As part of the negotiations, the Port Authority agreed to assume the remainder of Condé’s Times Square lease, which runs through April 2019. The Port Authority will also share the costs of marketing the space as well as improvements made for the new tenants.

With Condé slated to move Downtown later this year, Durst is showing the 4 Times Square space regularly, a company spokesman said.

At a relatively young 15 years old, the tower is undergoing only minor upgrades and is in large part being shopped to potential tenants as is.

“We’re now in the process of backfilling their space. Obviously, at 800,000 square feet, there are only so many” potential tenants, said Durst’s head in-house broker Thomas Bow, who oversees the company’s 13-million-square-foot Manhattan office portfolio. “It’s certainly kind of like musical chairs. We’re all out there competing for the same tenants at the end of the day.”

Asking rents for Condé’s space, which occupies the fourth through 23rd floors, are in the $85- to $95-persquare-foot range, Bow said. Condé was paying around $75 a square foot, though that price was based on economic incentives provided to the anchor tenant that are no longer available, Bow said.

The block will be available early next year, by which time Durst could be looking at replacing the 1.8 million-squarefoot building’s other large office tenant: Skadden, Arps, Slate, Meagher & Flom.

The international law firm has more than 640,000 square feet on a lease expiring in 2020, according to real estate database CoStar Group.

Skadden reportedly issued a request for proposals earlier this year seeking 450,000 square feet of space. Among those receiving the RFP, according to the New York Post, were Silverstein Properties, developer of four towers at the World Trade Center site, and Brookfield Office Properties, which is building Manhattan West in Midtown and repositioning the former World Financial Center in Lower Manhattan, now known as Brookfield Place.

Skadden did not respond to a request for comment.

last month that it signed Time Inc. to a 700,000-square-foot lease at 225 Liberty Street, which is part of its five-building Brookfield Place campus.

ler Group said Time’s decision to move was not a surprise and that it would undertake a “major capital improvement program” to reposition the tower as a

The Time-Life Building at 1271 Avenue of the Americas, left, will be repositioned when Time Inc. decamps for 225 Liberty Street, right, in three years.

225 Park Avenue South

Left, Condé Nast will soon move from 4 Times Square to One World Trade Center. Right, Douglas Durst’s eponymous firm is a partial owner of One World Trade and owns 1155 Avenue of the Americas.

Time-Life Building For the first time since it was built in 1959, the Time-Life Building at 1271 Avenue of the Americas will be repositioned as a multi-tenant building. In a little more than three years, its namesake leaseholder will decamp for Lower Manhattan, leaving nearly 2 million square feet empty in Rockefeller Center.

The Rockefeller Group, the building’s owner, plans to overhaul the iconic building following Brookfield’s announcement

44 June 2014 www.TheRealDeal.com

imately 1.9 million square feet of some of Manhattan’s most efficient and well located office space,” the statement said.

Brookfield’s Downtown coup was the latest move in its campaign to fill the gaping hole left by Bank of America/Merrill Lynch, which opted not to renew its longterm lease in October.

Amid a $250 million upgrade of the campus’ retail and common spaces scheduled to wrap up next year, Brookfield said 3 million of the 4.2 million square feet left behind by the bank’s departure is now released. Brookfield officials said 60 percent of the square footage leased in the last 18 months has come from companies relocating from Midtown and Midtown South.

In November the company signed law firm Jones Day to 330,000 square feet at the complex’s 250 Vesey Street.

The law firm will consolidate space spread out across three properties, including its headquarters at 222 East 41st Street, where it is the largest tenant in the 390,000-square-foot property.

That building’s owner, Columbia Property Trust, did not respond to a request for comment.

Left, 75 Rockefeller Plaza, left, will get a “soup to nuts” renovation later this year when Time Warner’s master lease expires and the building empties out. Right, Durst’s 1155 Avenue of the Americas will have a large hole when law firm White & Case departs.

Time occupies almost all of the 1.97 million square feet in the 47-floor Rockefeller Center tower.

In a statement to TRD, the Rockefel-

“multi-tenanted building.”

“Given Time’s lease runs through 2017, we are looking forward to the opportunity to renovate and bring to market approx-

Another landlord looking to fill a giant hole is Orda Management, which will have a nearly empty 225 Park Avenue South on its hands when the Port Authority leaves behind some 377,000 square feet later this year as it heads to 4 World Trade Center.

Newmark Grubb Night Frank is already shopping about 480,000 out of the total 506,365 square feet combined at 225 and 223 Park Avenue South. Orda plans to connect the two adjacent buildings with an interior staircase and upgrade them in the hope of landing tech, media, advertising and information tenants, often collectively referred to as TAMI firms.

Newmark would not comment on what the Port Authority was paying, but said Orda is asking for rents in the mid$80s.

“To a certain extent, a lot of these older buildings are very much in demand,” with tech tenants, said Newmark’s Brian Waterman. (Other than the tech giants, many companies in this world seek out Class B office space because they prefer the character of older buildings. However, some said that they may sign on for older space simply because it’s more affordable.)

Waterman said he is targeting tenants from Fortune 500 companies to smaller tech and media firms, citing Sony’s decision to move from the building that bears its name at 550 Madison Avenue for the Art Deco 11 Madison Avenue, built in 1932, as a case study in demand for older buildings.

“To a large extent, a lot of tenants are looking at these types of headquarters Continued on page 110

PHOTOGRAPH OF DURST FOR THE REAL DEALJanuary

BY HUGH HARTSHORNE www.TheRealDeal.com 2014 31

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ICSC Retail Convention

What happens in retail Deals started at ICSC convention don’t stay in Vegas, but have potential for big impact in New York City

By Adam Pincus bout 2,000 real estate players from New York attended the massive International Council of Shopping Center’s annual RECon conference in Las Vegas last month. The event, which drew 33,500 people, included myriad opportunities to meet and greet, from booths on the convention floor to party hopping. Below are some of the highlights:

A

The Feil Organization’s Brian Feil, left, and his father, Jeffrey Feil

• Kickoff day for ICSC found more real estate pros hanging out poolside than in the convention hall. Lounging in cabanas at Wynn Las Vegas, for example, were retail moguls Jeff Sutton and Alex Adjmi and brokers such as Bob Knakal, Jason Pruger, Adelaide Polsinelli and others.

• A slew of New York-based firms hosted mega-parties, which were among the 60-plus ICSC-related fetes. They included RKF’s bash at Cabo Wabo overlooking the Las Vegas Strip, SCG Retail’s cocktail party at the Grand Ballroom in the Four Seasons and Newmark Grubb Knight Frank’s popular event at the Cosmopolitan’s Marquee Nightclub.

• The Related Companies debuted a virtual reality tour, which used spaceage 3D goggles, to provide a sneak peak of its Hudson Yards site, including the 750,000-square-foot retail space. The mall is expected to generate about $2,000 per square foot in sales annually, Kenneth Himmel, CEO of Related Urban, told TRD. • A TRD analysis of New York attendees found that NGKF and RKF flew out the highest number of pros from NYC-based offices — with 50 and 40 respectively.

5Points Group’s Alan Miller, left, and Massey Knakal’s Ben Fox

Douglas Elliman’s Faith Hope Consolo and Joseph Aquino on the floor of the Las Vegas Convention Center Brookfield Office Properties’ Ed Hogan

Westfield Group’s David Ruddick Newmark Grubb Knight Frank’s James Kuhn, left, and Barry Gosin

RKF’s Ariel Schuster displaying a photo of his baby daughter Cushman & Wakefield’s Joanne Podell and David Greene

46 June 2014 www.TheRealDeal.com

CBRE Group’s David LaPierre and Amira Yunis

CPEX Real Estate’s Tim King, left, and Chase Abstract’s Avi Popack

ICSC Retail Convention The crowd at a party hosted by Newmark Grubb Knight Frank at the Marquee Nightclub in the Cosmopolitan hotel

From left: RKF’s Robert Futterman and Patricia Garcia and TriStar Capital’s David Edelstein

Knightwood’s Ian Smith, left, Whole Foods’ Norah Smith and SCG Retail’s Chase Welles

Massey Knakal’s Robert Knakal, left, and Paul Massey, at Charlie Palmer’s Aureole at Mandalay Bay for a party thrown by their firm and Fidelity National Title Simon Ziff of Ackman-Ziff Real Estate Group

From left: Kriss & Feuerstein’s David Kriss, Massey Knakal’s Thomas Gammino, Thor Equities’ Morris Bailey and Eastern Consolidated’s David Schechtman

From left: HPNY’s Ivan Hakimian, CBRE Group’s Annika Riphagen and Namdar Realty Group’s Evan Rafinia

Massey Knakal’s Preston Flammang, left, and Robert Shapiro From left: BakerHostetler’s Nicholas Melillo and Dennis Russo, Jennifer Djurkovic of Massey Knakal and Michael Pappert of BakerHostetler

From left: KAM Management’s Kenneth Mandelbaum, CBRE Group’s Lon Rubackin and Fairway’s Aaron Fleishaker

From left: SCG Retail’s Geoffrey Bailey and David Firestein, Guss Firestein of General Growth Properties and Fred Posniak of Empire State Realty Trust Crown Acquisitions’ Jordan Barker, left, and Massey Knakal’s James Nelson

Avison Young’s Jedd Nero at a party thrown by the firm at the Foundation Room at Mandalay Bay

From left: Premier Equities’ Yoron Jacobi, JLL’s Yoav Oelsner, Premier’s Uzi Ben Abraham and Meridian Capital’s Cary Pollack at NGKF’s party in the Cosmopolitan hotel Newmark Grubb Knight Frank’s Jeffrey Roseman, left, and Marc Frankel

From left: HFZ Capital Group’s Laurie Golub, CBRE Group’s Gary Trock and Hartz Mountain Industries’ Emanuel Stern

Acadia Realty Trust’s Joel Braun, left, and RKF’s Jeff Fishman

www.TheRealDeal.com June 2014 47

Pr o f i l e

City Hall’s Goldman girl: Alicia Glen

The new housing czar’s big business credentials are allaying fears that de Blasio is anti-real estate view with The Real Deal at City Hall last month. “But this is certainly the most ambitious plan by a city ever.”

The administration’s 200,000-unit target is 35,000 units more than what Mayor Michael Bloomberg achieved. It calls for preserving 120,000 affordable units and building 80,000 new ones at a cost of $41 billion, which will be paid for partly with $8.2 billion of city funds and about $30 billion in private capital.

“The challenge for us whenever we’re spending a dollar of the city’s money is to make sure we are appropriately filling the gap,” she said. “We feel pretty strongly that given where equity and debt markets are, we should be able to leverage our dollars significantly more than at other points in history.”

Developers, she said, will also be asked to “put a little more skin in the game,” noting that the private funds will include equity investments from developers and commercial debt from the lenders.

In her role as deputy mayor, Glen is overseeing 26 city agencies, boards and authorities and will have a key say on issues ranging from rezonings to deciding which megaprojects the city takes on.

And there’s certainly precedent for playing an outsized role. Daniel Doctoroff, Bloomberg’s longest-serving deputy mayor for economic development, oversaw the creation of 130 million square feet of real estate, and became something of a household name for his spirited — though ultimately unsuccessful — push for a football stadium on Manhattan’s Far West Side.

Alicia Glen’s biggest challenge yet may be executing de Blasio’s ambitious affordable housing plan.

Second City Hall dance Glen, 47, was born in Manhattan into a family entrenched in the public sector.

D

By Hiten Samtani avid Belt of development firm Macro Sea was struggling last year to put together a deal for an 84,000-square-foot hightech manufacturing center at the Brooklyn Navy Yard. Belt needed to take advantage of a historic tax credit in order to make the project, dubbed the New Lab, pencil out financially.

After repeatedly hitting roadblocks, he approached one of his several partners on the deal, Goldman Sachs’ Urban Investment Group, headed at the time by Alicia Glen — the city’s new deputy mayor for housing and economic development.

Goldman “helped me create a struc-

48 June 2014 www.TheRealDeal.com

“We want the markets to say hot. The more people want to build, the more there is to talk about the percentage of affordable housing, and the more the industry is happy to engage in these conversations.”

Alicia Glen, deputy mayor for housing and economic development ture that would allow the tax credits to flow into my projects and allow me to complete my capital stack,” Belt said.

They “rolled up their sleeves and did it,” he said.

Now, Glen is tasked with what many say could be her biggest challenge yet: Executing Mayor Bill de Blasio’s goal of cre-

ating 200,000 units of affordable housing over the next decade — a cornerstone of his campaign promise to address inequality.

“Someone is going to go back and find a tablet from Moses saying there was a more ambitious plan out there,” Glen said with characteristic wit during an inter-

Her father, Jeffrey Glen, was a special assistant corporation counsel at the Law Department under Mayor Ed Koch and her mother, Kristin Booth Glen, was a state Supreme Court judge. Her stepmother, Rosina Abramson, led both the Roosevelt Island Operating Corp. and the Department of City Planning.

www.TheRealDeal.com February 2014 49

Pr o f i l e

th

“All of those formative experiences bubble up and make me an unusual person, but that’s why being in the public sector feels pretty homey to me,” said Glen.

And while she may be best known now for her work at Goldman Sachs, her first brush with the real estate industry came during a post-college stint in the public sector.

After graduating magna cum laude from Amherst College in 1988, Glen worked as an aide to then-Manhattan

sion within the bank that invests in urban development projects and other initiatives that have a “social impact.” Under her leadership, the group arranged and financed more than $5 billion in low and middle-income development, primarily in New York City and northern New Jersey.

It invested more than $80 million in the restoration and expansion of the historic 83,000-square-foot Loew’s Kings Theatre in Flatbush, which will be the largest indoor theater in Brooklyn. It’s also a partner

vestment if the program reduces the reincarceration rate by 10 percent. If rates fall further, Goldman stands to make over $2 million in profit.

It also invested $42 million in the bike-sharing program Citi Bike, a sum it aims to recover through naming rights payments from Citibank as well as through usage fees.

“You think of Citi Bike really as a transportation play, but it’s also a huge economic development and job creator,”

Forest City Ratner CEO MaryAnne Gilmartin, one of several real estate players Glen has met with since coming into City Hall.

Mayor Bill de Blasio has tapped Glen to oversee 26 city agencies, boards and authorities.

law firm Nixon Peabody who frequently collaborated with the Urban Investment Group, said that while at Goldman, Glen “was willing to look at some deals that perhaps other investors were more squeamish about.”

VanAmerongen recalled a project involving the conversion of an industrial building in Rochester, N.Y., into a 71-unit supportive housing project. As the team was getting close to closing, an investor pulled out. Glen’s team stepped in as a white knight and rescued the project, VanAmerongen said.

Glen said her transition into City Hall was helped by her years of straddling the private and public sectors. “Being able to really see every side of this and understand all the different stakeholders, because I’ve sat in each one of those chairs, has been an unbelievable blessing.”

Though several sources spoke highly of her credentials, some expressed concern that Glen’s hard-charging management style might cause friction within City Hall.

“At Goldman there were some pretty mixed reviews about how she fit in culturally,” said a source who served on the board of an affordable housing nonprofit with Glen. “I’m not sure they were totally heartbroken [by her leaving].”

City Hall spokesman, Wiley Norvell, rebutted: “It takes someone tough to drive hard bargains and move the mountains needed to build and preserve 200,000 affordable units.”

Industry street cred

Boston Properties head Mort Zuckerman, one of several real estate bigwigs Glen has served on boards with.

A rendering of Domino Sugar, where Glen’s City Hall team struck a deal to add more affordable units.

Borough President David Dinkins. In 1993, after earning her law degree at Columbia University, she worked as an attorney at Brooklyn Legal Services, which provides free legal assistance to low-income families, before joining the law firm Fulbright & Jaworski as an associate.

But she didn’t stay in the private sector long. After three years at Fulbright, she left to serve as the assistant commissioner for housing finance at the Department of Housing Preservation & Development under Mayor Rudolph Giuliani. Speaking about Glen, Richard Roberts, who was HPD commissioner at the time, said “there are some lawyers, who when they work on deals kind of understand everything about them — the legal, the zoning, the land use, the finance. I think she was particularly good.”

Goldman Sachs noticed the same. In 2002, Glen was picked to head the firm’s Urban Investment Group, a unique divi-

28 March 2012 www.TheRealDeal.com

De Blasio, however, seems thrilled to have her on board. The chemistry between the duo was on display at an April breakfast hosted by the Association for a Better New York, a pro-business group. The pair’s exchanges sat well with the crowd, according to two real estate players who were present.

“It was a strong initial performance

“Imagine being the person who every day walks into City Hall and greets the smiling mayor who says: ‘how are you doing on the 200,000 units of affordable housing?’ That’s Alicia’s job, but she rises to the challenge — never seen her sweat.”

Bill de Blasio, New York City Mayor in 1000 Dean Street, a 150,000-squarefoot Crown Heights office-and-retail project developed by Brownstoner publisher Jonathan Butler and BFC Partners and geared toward Brooklyn’s emerging technology and media tenants.

But the group’s investments outside real estate also shed light on how Glen might get creative when it comes to funding the mayor’s housing plan, sources said. It pumped nearly $10 million, for example, into a program to reduce recidivism among young men at Rikers Island jail. Goldman will recoup its entire in-

Glen said. “So one of the things we worked very hard on at Goldman and at the city was to make sure the people who were being employed at Citi Bike were going to be coming out of the [city’s] workforce development programs.” The program will create 170 new jobs and generate $36 million in economic activity during its first year, according to the city’s Economic Development Corp. But it’s been struggling to make a profit and is seeking city approval to raise rates.

Deborah VanAmerongen, a policy advisor on affordable housing at the

for the business community,” said Richard Anderson, president of the New York Building Congress, which represents the city’s construction industry. “She handled herself well, and bringing the mayor as a surprise was a nice twist.”

Sources said Glen’s Goldman Sachs credentials are already helping allay fears that the new mayor is unsympathetic to business interests.

Glen said that like other New York business leaders, she faced some of the public backlash against big business Continued on page 112

www.TheRealDeal.com June 2014 49

New Housing

Affordable development darlings With de Blasio’s housing push underway, a new crop of developers will move into the limelight

I

By Christopher Cameron t seems like only yesterday that bigtime luxury developers were the darlings of City Hall. Under Mayor Michael Bloomberg, firms like the Related Company, Vornado Realty Trust, Tishman Speyer and Extell Development Company flowered, negotiating some of the biggest development deals New York City has seen in half a century.

Those firms are not going anywhere, especially given the megaprojects they currently have underway, including Related’s Hudson Yards site. But now, with a new (non-billionaire) mayor in office, the discussion at City Hall has shifted away from gleaming luxury condos to affordable housing for the city’s working class. And as a result, there’s a new crop of developers that, while already active, are likely to be in the spotlight even more.

That’s because Mayor Bill de Blasio has pledged to develop or maintain some 200,000 units of affordable housing — creating 80,000 new units and preserving 120,000 existing units. That commitment to affordable housing could mean big money for a few established developers with the city earmarking $8.2 billion in public funds over 10 years. And the sheer amount of building being proposed means that in addition to the large established players, that smaller developers could also be tapped for big projects built over the next decade.

While many developers have expressed concern about increased affordable housing requirements that the administration is planning to implement, saying they will stymie construction, affordable housing advocates argue otherwise.

And for some developers, increasing affordable housing requirements means more bread-and-butter work.

This month, The Real Deal looked at which of those big affordable housing developers, sources say, are expected to move more squarely into the limelight under the new City Hall team.

Jonathan Rose says opportunities for affordable housing developers will increase under the new mayor.

L+M CEO Ron Moelis.

(Below) L+M is one of the partners on the massive Seward Park Urban Renewal Settlement on the Lower East Side.

Jonathan Rose Companies

S

L+M Development Partners

L

+M Development Partners, an employee-owned private developer, has long played a major role in the development of affordable housing in New York City.

It’s taken on some of the biggest subsidized projects in the city, and was selected at the end of Bloomberg’s administration as one of the developers — along with BFC Partners, Taconic Investment Partners and Grand Street Settlement — on the long-anticipated

50 June 2014 www.TheRealDeal.com

partment of Housing Preservation and Development, as well as Lisa Gomez, a former staffer at the city’s Housing Development Corporation, to help navigate city bureaucracy.

But the firm could see its influence grow in the coming years.

Moelis has a long working relationship with Alicia Glen, de Blasio’s deputy mayor for housing and economic development (see related story on page 48).

Glen formerly sat on the board of the Moelis Institute for Affordable Housing Policy, an organization founded by Moelis within New York University’s Furman Center for Real Estate and Urban Policy.

As head of the Goldman Sachs Urban Investment Group, Glen partnered with Moelis on several projects, including the restoration of Newark’s 400,000 square-foot Hahne & Company building and Brooklyn’s 11 Broadway, a 160-unit mixed-income project.

Moreover, de Blasio’s new HPD commissioner, Vicki Been, also has ties to L+M. She ran NYU’s Furman Center from 2004 until her recent City Hall appointment. During that time, the Moelis Institute donated some $2 million to the Furman Center.

“L+M has been able to very effectively associate themselves with the city and with the growth of affordable housing generally,” said Ismene Speliotis, executive director of the Mutual Housing Association of New York, a nonprofit affordable housing group.

Moelis did not return calls for comment. But de Blasio spokesperson Wiley Norvell disputed any suggestion that connected developers would get favored, noting that developers of city-owned property are selected through a “highly-competitive process, including RFPs.” “Decisions are made on the merits of the proposals and qualifications of the developer,” he said.

mixed-income redevelopment of the so-called Seward Park Urban Renewal Area in the Lower East Side. The project, known as Essex Crossing, will house 1.9 million square feet of commercial, community and residential space, including 1,000 units of housing, half of which will

be affordable.

And the firm knows the ins-andouts of how the government’s affordable housing development system works.

During the Bloomberg era, L+M CEO Ron Moelis hired Rafael Cestero, the former commissioner of the city’s De-

ince its inception in 1989 as a sustainable developer, Jonathan Rose Companies has completed more than $1.5 billion in projects, making it one of the largest affordable developers in New York.

Those opportunities are only expected to grow and become more high profile now.

“We think that opportunities for all affordable housing developers are going to increase under de Blasio,” company head Jonathan Rose said. “At the same time, our firm has been growing its focus on mixed-income housing, and we think that is an area that will grow under this

www.TheRealDeal.com February 2014 49

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New Housing administration [too].”

Currently the firm is developing Harlem RBI, on 104th Street and Second Avenue, a $78.5 million project that includes 89 affordable housing units along with office space and a charter school.

And like L+M, the company is well connected to City Hall. The firm’s managing director, Paul Freitag, has taught alongside Glen at Columbia University’s Paul Milstein Center for Real Estate, as has Moelis, according to the university’s website.

Moreover, Freitag has sat on the board of the Citizens Housing Planning Council, a nonpartisan policy research organization focusing on housing and economic development, with Glen and other major real estate players.

But Rose also said connections alone mean very little compared to a developer’s ability to get the job done and do it well.

“For the last 12 years, under the Bloomberg administration, there was a real sense that the development process was fair … and that the administration was always trying to pick the best, while also making an effort to spread the affordable housing around to make sure that everybody got a fair shot,” Rose said.

“I hope that will continue under this administration.”

Phipps Houses CEO Adam Weinstein. (Below) Phipps Houses is one of the partners on the first phase of Hunter’s Point South, which includes more than 900 units of affordable housing in Long Island City.

Phipps Houses

A

s the cost of developing affordable housing has ballooned in recent years, some developers have been pushed to the side, lacking the cash to score major development projects from the city without pooling resources. But Phipps Houses is an exception to that rule: Sources say the firm is one of the only nonprofit developers in the city with the resources needed to build on its own.

The firm — a 110-year-old organization that develops, owns and manages affordable housing — generates tens of millions in revenue annually, according to public records, and has deployed that money to develop 8,000 units of affordable housing. It’s retained ownership of about 6,000 of those units and currently has 1,100 units under construction.

In partnership with Related and Monadnock Construction, the firm was selected by the Bloomberg administration to develop the first phase of Hunter’s Point South, with two mixed-use buildings consisting of more than 900 units of affordable housing in Long Island City.

“What has happened over the years is that the bar, financially speaking, for developing affordable housing has been raised,” said president and CEO Adam Weinstein.

He pointed out that because the government uses fewer taxpayer dollars per unit to generate resources for affordable housing, the initial capital a firm needs to take on a project is much higher than

52 June 2014 www.TheRealDeal.com

BFC’s managing principal, Don Capoccia

“The de Blasio administration is going to cast a really wide net across the whole spectrum of builders in New York City because they have to basically double production of ground-up affordable housing.”

Don Capoccia, BFC Partners it once was. As a result, the pool of developers able to compete for projects has been limited to the largest and most well-financed firms, he said.

But, he added, the huge amount of affordable housing being developed and preserved under de Blasio will allow smaller firms to get in on the action again. Smaller nonprofits, which lack the liquid resources to compete with

large private firms, will become major players in specific submarkets and neighborhoods, since they have long-established relationships with communities, he said.

Nonetheless, Weinstein said: “The RFP process is going to be more competitive than it has ever been, because the city is really looking to maximize its resources for affordable housing.”

BFC Partners

O

ver its 30-year history, BFC has developed more than 4,500 units of affordable housing, including Toren, a 240unit mixed-use, mixed-income project in Downtown Brooklyn and the Rail, a 99,000-square-foot, 92-unit building on Staten Island.

Currently, the firm is handling the ground-up, mixed-income development of 250 units of housing at the first tower of Downtown Brooklyn’s City Point, a mammoth 1.8 million-square-foot residential and commercial development at 70 Fleet Street. It is also working on deals to preserve a total of 250 units of affordable housing in the Bronx and another 550 units on Staten Island.

And that’s not to mention the firm’s plan to redevelop the St. George waterfront on Staten Island, with the world’s tallest Ferris Wheel, a 340,000-squarefoot retail complex and a 200-key, 130,000-square-foot hotel.

Under the new city leadership the company is expected to gain even more name recognition.

BFC’s managing principal, Don Capoccia, predicted that winning affordable housing projects under de Blasio would come down to land.

“You have to have land in your portfolio, which we do, and you have to be on the hunt for acquisition opportunities where you see potential for rezoning and affordable housing,” he told TRD. “That is what best positions yourself with any administration.”

Capoccia stressed that because the HPD and the city’s Economic Development Corp. have very specific requirements for each project, developers will have to qualify to compete — regardless of who they know in the administration.

“I think the de Blasio administration is going to cast a really wide net across the whole spectrum of builders in New York City because they have to basically double production of ground-up affordable housing,” he said. “They will need to include as many players as possible.”

Dunn Development

M

artin Dunn, the head of Dunn Development, met de Blasio for the first time at the April ground breaking of Livonia Commons, a 278-unit affordable housing development in East New York, Brooklyn.

“Martin Dunn’s been a great partner in this effort, and his focus on community hiring is something I particularly commend,” de Blasio told the crowd, which also included Glen.

But he and his firm are likely to be in more regular contact with the administration from here on out.

Dunn Development was founded in 1998, and since that time it has developed thousands of units of affordable Continued on page 108

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Luxury lingerers

Residential is that all of these properties are selling before brokers even get their listing photos loaded online, that is not accurate.

On average, luxury properties, which Miller Samuel defines as the top 10 percent of all condo and co-op sales, were on the market for 131 days before selling in the first quarter, versus 115 days for lower-priced listings.

“The luxury market is targeting a much narrower portion of the buyer pool, and those buyers aren’t panicking or overpaying for these properties, so they tend to sit,” said Jonathan Miller, founder and CEO of Miller Samuel. “The product is also less

Street, which has been on the market for 1,351 days; the $22 million penthouse at 975 Park Avenue at 997 days; a $25 million multi-floor apartment at the Atelier at 635 West 42nd Street at 764 days; and the $25 million apartment 73C at the Residences at the Mandarin Oriental at 80 Columbus Circle, which has been on the market for 750 days.

Only one of the brokers representing those five units responded to requests for comment.

But sources said they were not surprised to see properties sitting, despite the hot market.

“Today’s buyers are 180 degrees oppo-

O

S AR KET E 4 Y MAR HE NT

The penthouse at 60 Warren Street has been on the market for nearly four years.

S AR ET E 2 Y ARK / 1 2 M HE T ON

The penthouse at 975 Park Avenue has been on the market for over two and a half years.

A look at the 10 Manhattan properties priced over $20 million that are taking the longest time to sell — despite the sizzling market

E

By Janna Herron ven in a hot market, some properties just go cold. While prices of über high-end Manhattan apartments are skyrocketing and inventory is tight, not every luxury property ends up in a bidding war. In fact, hundreds of million dollar and multi-million dollar properties are lingering on the market, sometimes for years.

Some say the problem is sellers who are trying to chase the eye-popping new construction luxury market.

“I think everybody started seeing these remarkable prices for high-end develop-

42 May 2014 www.TheRealDeal.com

ments, from $10,000 to $12,000 a foot, so they thought that was the whole market,” said Kirk Henckels, vice chairman and director of private brokerage at Stribling & Associates, which specializes in luxury residential sales. “So, you had resale condos, townhouses and co-operatives whose owners thought that applied to them. And that was not the case.”

In 2014’s first quarter, the median price for luxury Manhattan properties soared 43.3 percent over last year, according to the latest market report from appraisal firm Miller Samuel. But while the perception of many in the industry

homogenous and tends to be more highly priced by the sellers initially.”

More than 350 properties have been on the market for more than 180 days, including 49 residences listed at $20 million or more, according to data from listings website StreetEasy compiled for The Real Deal. (StreetEasy’s “on-themarket” counter continues ticking if a listing is removed but then relisted in less than 180 days.)

This month, TRD looked at the 10 properties listed above $20 million that have lingered on the market longest (see accompanying chart.) The properties ranged in price from $21.5 million to $95 million and have sat for between 521 days and 1,449 days.

Coming in at No. 1 is the penthouse at 60 Warren Street in Tribeca, which has been on the market for 1,449 days and is listed at $24.5 million. That was followed by a $30 million townhouse at 12 East 96th

site from what they were pre-Lehman. Back then, that buyer was showing their money and didn’t care about quality,” said Henckels. Now, they are “extremely quality-oriented,” he said. “So, if you don’t have what they want, they won’t buy it.”

Shooting for the moon Take the full 18th-floor apartment at the Sherry-Netherland at 781 Fifth Avenue, a co-op listed for $95 million, which ranked No. 9 in terms of days on the market on TRD’s list. The property — which has been listed for 597 days, or roughly 18 months — has gone through a revolving door of high-profile brokers.

It was originally co-listed with powerbroker Dolly Lenz when she was with Douglas Elliman and Kathy Sloane of Brown Harris Stevens for $95 million. When Lenz left Elliman to start her own firm in June 2013, Elliman’s Lisa Simonsen took over

www.TheRealDeal.com June 2014 55

Residential for her. In October, Simonsen and Sloane cut the price to $88 million. Then, in January, Elliman’s Oren Alexander and his team took over the listing from Simonsen and increased the listing price back up to $95 million. Alexander and his team still share the listing with Sloane.

Alexander acknowledged the high price tag, but said he was encouraged by

brokers of high net-individuals. His team also started advertising in Candy magazine, a luxury publication distributed to affluent individuals and high-end hotels in London. Alexander said he is confident the 15-room penthouse, which sits on the corner of Central Park at 59th Street and Fifth Avenue, would find a buyer soon, given the location and the size — 7,000

prevented their sellers from getting to the closing table.

For example, unit 77B at 80 Columbus Circle, which has been stuck on the market for 705 days, ranked No. 6 on TRD’s list, clocking in just after the above-mentioned unit 73C. The condo at the Residences at the Mandarin Oriental atop the North Tower of Time Warner Center was

The 10 longest-listed NYC properties at $20 million or more Address

Price

Days on Market

1

60 Warren Street (PH)

$24.5 million

1,449

2

12 East 96th Street (Townhouse)

$30 million

1,351

3

975 Park Avenue (PH)

$22 million

997

4

635 West 42nd Street (#23, 24, 25 AK)

$25 million

764

5

80 Columbus Circle (#73C)

$25 milion

750

6

80 Columbus Circle (#77B)

$50 million

705

7

11 East 89th Street (Townhouse)

$22.5 million

700

8

20 East 10th Street (Townhouse)

$25 million

606

9

781 Fifth Avenue (18FL)

$95 million

597

10

969 Fifth Avenue (11-12FL)

$21.5 million

521

Source: StreetEasy. The website’s “on the market” counter keeps ticking if a listing is removed, then relisted within 180 days.

YS E T A RK 6D 60 E MA TH N O

O

YS E T A D RK A 0 75 E M TH N

YS E T A D RK 0 A 70 E M TH N O

From left: The townhouse at 20 East 10th Street, listed for $25 million, has been on the market for 606 days; unit #73C at 80 Columbus Circle, listed for $25 million, has been on the market for 750 days; and the townhouse at 11 East 89th Street, listed for $22.5 million, has been on the market for 700 days.

the activity garnered by the late Edgar Bronfman’s penthouse at the prewar 960 Fifth Avenue nearby. After being listed at $65 million, a bidding war erupted over the full-floor co-op. It reportedly went into contract for $70 million in April after roughly four weeks on the market. If it closes at that price, it will be the most expensive Manhattan co-op sale on record.

“That unit needed a gut renovation,” said Alexander of 960 Fifth Avenue.

“Yes, I’m asking $25 million more, but 781 Fifth is turn-key. If you consider the time value of money, then it’s a good deal.”

Alexander is targeting foreign buyers for 781 Fifth, which he said may have been overlooked by previous brokers because the property is a co-op. Foreign buyers, of course, often flock to condos, because many Manhattan co-ops have strict rules that make it harder for them to purchase.

But 781 Fifth is more lenient, allowing pied-á-terres and not requiring buyers to document all of their assets for approval.

To help hasten a sale, Alexander has traveled to Qatar, Dubai, London and Geneva to meet with financial advisers and

56 June 2014 www.TheRealDeal.com

square feet of indoor space and 2,170 square feet of outdoor space.

“You’re seeing trophy properties like this selling left and right [elsewhere in the world],” Alexander said. “This will sell

originally listed at $42.5 million in February 2012. It was delisted that December and came back on the market at $50 million in February 2013.

The challenge for 77B, according to

“I think everybody started seeing these remarkable prices for high-end developments, from $10,000 to $12,000 a foot. … So, you had resale condos, townhouses and co-operatives whose owners thought that applied to them.

And that was not the case.”

Kirk Henckels, Stribling & Associates soon and it will break the record for most expensive co-op to sell in the city.”

Problems other than price In other instances, some of the residences on TRD’s luxury lingerers list have unique challenges — other than price —that have

listing agent Elizabeth Lee Sample of Sotheby’s International Realty, is that the condo has been rented several times while it’s been on the market. “So, it’s only for an investor or user that will wait for the lease to expire,” she said, adding the current lease has approximately a year left.

Other agents representing some of the priciest units that have failed to sell quickly are running into fickle sellers, they said.

For example, the townhouse at 20 East 10th Street — No. 8 on TRD’s list — has spent 606 days on the market at $24.99 million, because the owner had been on the fence about selling it, said Sotheby’s Stephen McRae, who shares the listing with Sotheby’s colleague Debbie Korb. The owner bought the Greenwich Village property in March 2011 for nearly $19 million and, since listing it in September 2012, has not lowered the asking price.

“The owner loves the house,” McRae said. “It’s a special house and hard to replicate.”

Korb noted that the seller had received “good offers” in the past, but was undecided at the time about whether to move.

“As of now, they have decided to sell, but the house is empty so it does not show at its best,” she said by email. “That said, it’s beautifully proportioned, a 25-foot wide house with a deep, south facing garden in a blue chip location. We now have interest from several parties.”

One of McRae’s other listings, the penthouse on 60 Warren Street in Tribeca and No. 1 on TRD’s list, has been on and off the market since March 2010, or for 1,449 days, according to StreetEasy. It was originally listed at $28 million, but the owner dropped the price in September 2012 to $24.5 million, where it stands today.

According to past reports, the penthouse owner, Edward Bazinet — the retired founder of “Snowbabies” collectibles company Department 56 —tried selling the penthouse in 2006, but pulled it off the market the following year because construction on the Smyth hotel next door discouraged buyers. The hotel was more than just a noise nuisance; it also blocked the penthouse’s north-facing view of the Empire State Building, a hit to the property’s value.

That’s not the only challenge the penthouse faces. While it has received many offers, some of which were close to full asking price, the parties couldn’t agree on a closing date because the seller had to move large pieces of art out, which is a complicated process, said McRae. “The artwork that must be removed is not simply a painting on a wall,” he said.

One of the pieces is on a terrace and requires a crane for removal. Another sculpture must be removed from the marble slab it’s installed upon and reinstalled in a replacement that includes radiant heat flooring. A third, 28-foot-high piece is mounted on a wall and will require wall repairs after removal.

“All of this takes coordination, scheduling, insurance, et cetera,” McRae said by email. “If a buyer wants to close within 30 days, it is a challenge to say the least, especially in Manhattan.”

It’s also enough to derail a luxury sale, even in a hot market. TRD

www.TheRealDeal.com January 2014 31

Real Estate

and

Law

Who charges the most per hour, and when does it make sense to shell out for them?

W

By Adam Pincus

hen the $1.1 billion sale of the Sony Building at 550 Madison Avenue closed last year, a slew of lawyers from a handful of firms were scattered around Manhattan in their offices listening in on speakerphone.

Like most pressure-cooker Manhattan real estate transactions, hundred of millions of dollars needed to be approved and wired in a highly orchestrated electronic dance in order to ensure that the Sony Building changed hands smoothly.

Not surprisingly, many of the attorneys who were involved in that high-profile deal are among the most elite real estate minds in the city.

But those legal services don’t come cheap.

Real estate lawyers at the top of the game in New York charge $1,000 to $1,250 an hour, sources told The Real Deal.

That is far higher than the $200 to $600 that the bulk of partners and associates bill per hour within the broader New York City real estate industry, insiders said.

Members of this elite group of high-paid lawyers are generally loath to discuss their rates. Yet sources said they can charge amounts this high because they are usually so intimately familiar with the ins-and-outs of complex real estate transactions, and so well-connected, that they can sometimes do something seemingly small that saves a client millions of dollars. For example, one key phone call to an opposing lawyer on a deal, or one crucial piece of legal strategy, might be the lubricant to grease a sale or prevent the firm from spending hours of billing time researching a moot point.

Stuart Saft, a partner at Holland & Knight who specializes in putting together condominium plans for top developers, said he recently developed a strategy for a client that did just that.

“What the client wanted was extra-complicated and would

58 June 2014 www.TheRealDeal.com

require a lot of actions to occur at the same time,” said Saft, who declined to discuss specifics. He drafted a plan over a weekend designed to persuade the other side to accept the terms and move the deal forward. A less-experienced attorney, he noted, might have taken far longer.

“You are paying a little bit more, but there is value added that comes with the higher price,” he said.

Still, not every client who uses New York’s highest-paid attorneys does so on every case. A New York City development firm might only tap a top firm for a particularly complex deal,

Real estate lawyers at the top of the game in New York charge more than $1,000 an hour. That is far higher than the $200 to $600 that the bulk of partners and associates bill per hour. while opting for a cheaper law firm on its more meat-andpotatoes transactions.

But when hundreds of millions — or billions — of dollars are on the line, the pricey lawyers are generally the go-to advisors.

TRD was able to identify several making around $1,000 or more per hour. They include high-profile lawyers such as Fried, Frank, Harris, Shriver & Jacobson’s Jonathan Mechanic at $1,110; Kramer Levin’s Jay Neveloff at about $1,075; Greenberg Traurig’s Robert Ivanhoe at $1,010; and Weil Gotshal & Manges’ Phil Rosen at about $1,000.

But the circle also includes big-time real estate lawyers who tend to get less press coverage, like Allen & Overy’s Kevin O’Shea; Cleary Gottlieb Steen & Hamilton’s Steven Horowitz; Debevoise & Plimpton’s Peter Irwin; Fried Frank’s Stephen Lefkowitz and Skadden, Arps, Slate, Meagher & Flom’s Harvey Uris. Other firms with attorneys billing above $1,000 per hour include Simpson Thacher & Bartlett; Schulte Roth & Zabel; Gibson Dunn & Crutcher; and Paul, Weiss, Rifkind, Wharton & Garrison, sources said.

This month, TRD delved into the world of elite (and highpaid) lawyers, talking to sources at more than two dozen of the city’s white-shoe firms, as well as to developers and investment-firm sources who use them. We not only inquired about which real estate lawyers charge top rates, but also about when it’s worth shelling out the money to hire them.

Hiring decisions In some cases, the lawyer on one side of a transaction is getting paid upwards of $1,000 an hour, while the lawyer on the other side of the deal is charging about half that.

For the lower-fee lawyers, it can be a point of pride to both sit across the table from a big-named attorney and to provide services at a far lower rate.

Nicholas Donovan, the named partner at Donovan LLP, represented the REIT American Realty Capital in its purchase of a 48.9 percent stake in Worldwide Plaza (although he declined to comment on the transaction) in October 2013 for $220 million. He also represented investor Maurice Mann’s group in its purchase of the Apthorp at 2211 Broadway for $426 million in 2007.

His billing rate is $550 per hour, but he regularly deals with other attorneys on similar deals from white-shoe firms that are likely billing up to double that rate.

“At the highest level, practicing law is like anything else.

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Real Estate guy plays the same position and makes $1 million,” Donovan said. “Is one better than the other? Not always.”

He also noted that while $1,200 an hour for a lawyer might sound like a lot, in some cases the principals or investment bankers on the deals they’re working on are making millions of dollars on the transaction, while the lawyers are just earning their hourly rate.

“The lawyers may be the lowest-paid person in the room,” he quipped.

Those principals turn to the city’s priciest attorneys for a variety of reasons.

For players who are not based in New York, these lawyers and firms often provide a brand name and level of comfort.

Local players, on the other hand, might hire these firms when they have a particularly hairy deal, where they need an attorney with a unique real estate sub-specialty.

The Sony deal, which closed in March 2013, was one of those deals. For starters, it was the largest loan that the REIT SL Green Realty had ever arranged. In addition, SL Green was not only originating the $950 million loan, but it was also selling most of it off to buyers, including the Bank of China, which snapped up the largest piece. SL Green tapped Allen & Overy’s O’Shea to handle that transaction.

Areas of expertise Saft cited land-use as an example of a real estate specialty that only certain lawyers are truly qualified in.

“You have a limited number of people who have been educated to do zoning work, and who have the requisite contacts in the land-use community to be successful,” said Saft, who told TRD in statement that he bills under $900 an hour. “You can’t just say you want to be a zoning lawyer.”

However, a good zoning lawyer can identify an obscure zoning rule that may save a client millions of dollars in preparing a variance application. On the flip side, a mistake or a lack of knowledge can have the opposite impact.

Yet sources at one real estate family firm said they could manage typical transactions in-house or with a mid-market attorney.

For a client who knows the industry well, or for a simple, vanilla transaction, the mid-priced firms get the job done just as well, sources said. In addition, there are specialties within the real estate business where attorneys rarely charge stratospheric rates.

Adam Leitman Bailey, whose billing rate is $625 per hour, said that when it comes to landlord and tenant work, his firm can only bill about $425 per hour.

“I have to follow the market,” he said.

60 June 2014 www.TheRealDeal.com

Law

In other instances, lawyers cap fees, or negotiate a flat rate, or even simply discount the final total if the fee got out of hand.

“Some clients negotiate to get a discounted rate, although that is not something we love to do,” Donovan said.

For example, large public companies have a policy that requires some level of discount, he said.

In an email to TRD, Ivanhoe said his “standard” hourly rate is $1,010, but noted that the rate “represents a range because … real-life transaction pricing involves much more than an hourly rate.”

vest otherwise. Also, there is no central database that tracks them, even among legal trade publications.

Other than Ivanhoe, all of the attorneys whose rates TRD cited either declined to discuss their rates or did not return calls for comment.

Some in the industry were surprised that Mechanic, who is often cited as the industry’s premier attorney, didn’t charge even more.

“Jon is kind of a humble guy,” said one attorney who has worked with him. “He is the kind of guy who adamantly does

“Like in baseball, a guy is worth $20 million a year, and another guy plays the same position and makes $1 million.”

Nicholas Donovan, Donovan LLP He explained that the firm “routinely works with clients to provide a pricing solution” based on a client’s timing and budget.

He cited the $191 million February purchase of a multistate real estate portfolio that Greenberg Traurig worked on for Starwood Capital. That deal came on the heels of a Starwood deal, “a complex, 26-state, 65-property bidding process” in which 60 Greenberg Traurig employees participated.

“What we were able to achieve in the time frame allotted would normally otherwise require multiple law firms at a significantly higher cost, which would have ultimately reduced the value of the transaction for the client, and would have required far greater coordination on their part,” Ivanhoe noted.

Billing benchmarks Despite the fact that lawyers give out billing rates to potential clients on a daily basis, they hold them close to the

not want to have the highest rate.”

While lawyers’ rates are tightly held, there are some other windows into firm’s pricing — in particular bankruptcy filings.

For example, in 2008, as part of the Lehman Brothers’ bankruptcy proceedings, Weil Gotshal reported its top-billing rate was $950 per hour. A source at the firm said that rate is now “about $1,000.”

Other sources, including the legal website Above the Law, reported earlier this year that nine of the top 10 firms in New York City charged rates of between $1,120 and $1,250 per hour for all legal specialties. The site reported one firm, Gibson Dunn, with a top rate of $1,800 per hour, in a league of its own.

But there is a ceiling, even at the top.

“Because the higher you go, the more narrow the number of clients,” Saft said. TRD

What do the industry’s top legal eagles make?

Per Hour

Jonathan Mechanic

$1,110 Jay Neveloff

$1,075

The discount dance Legal insiders noted, however, that just because an attorney’s standard hourly rate is $1,000-plus doesn’t mean that’s always what clients pay.

In many cases, New York City’s top real estate attorneys, like all attorneys, will tweak that price, although several partners told TRD they sought to avoid it.

“A lawyer’s experience and working well with the client up front can lead to better efficiency so that the ‘hourly rate’ is not the only factor, by any means, in the ultimate legal fee,” said Ivanhoe.

Nonetheless, attorneys who spoke to TRD differed on whether, and how, attorneys discounted their rates.

“I don’t think top lawyers discount their rates,” said one top-billing source. “I don’t discount my rate. But I don’t necessarily bill a lot of hours [either].”

Another lawyer said partners shoot to have a high “realization” rate, which measures the percent of billed dollars that was actually paid by the client. The average is in the 80 to 90 percent range, but many lawyers shoot for the mid-90s, the source said.

and

Robert Ivanhoe

$1,010

Phil Rosen

$1,000

Stuart Saft

$900 $0 Note: Figures from TRD sources.

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110 Fifth Avenue 212.633.1000

26 Astor Place 212.584.6100

730 Fifth Avenue 212.242.9900

239 East 79th Street 212.929.1400

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446 West 14th Street 212.604.0300

33 Irving Place 212.557.6500

TOWN Residential LLC is a partnership with Buttonwood Residential Brokerage, LLC and Thor Equities, LLC. No representation is made as to the accuracy of any description. This is not intended to solicit property already listed. The number of bedrooms listed above is not a legal conclusion. Each person should consult with his/her own attorney, architect or zoning expert to make a determination as to the number of rooms in the unit that may be legally used as a bedroom. TOWN Residential LLC is a licensed real estate broker, proud member of REBNY, abides by federal and state equal housing opportunity laws and owns the following subsidiary licensed real estate brokers: TOWN Astor Place LLC; TOWN Fifth Avenue LLC; TOWN Flatiron LLC; TOWN Gramercy Park LLC (“TOWN Gramercy”); TOWN Greenwich Street LLC (“TOWN Financial District”); TOWN Greenwich Village LLC; TOWN Soho LLC; TOWN West Village LLC; and TOWN 79th Street LLC (“TOWN Upper East Side”).

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441 EAST 57TH STREET

4 BR, 5 BATH • WEB ID: 990936 • $12.75 M VALERIE JEAN GARDUNO 646.790.2607 DEBRA STOTTS 646.300.6052

227 CLINTON STREET - TH

6 BR, 5 BATH • WEB ID: 615917 • $35,000 MONTH TERRY NAINI 917.841.1826

We define our neighborhoods as much as they define us.

33 Irving Place 212.557.6500

137 FRANKLIN STREET

2 BR, 2 BATH • WEB ID: 155673 • $4.75 M ANDREW AZOULAY 646.738.2655 WYATT BERTZ 646.998.7489

110 Fifth Avenue 212.633.1000

26 Astor Place 212.584.6100

730 Fifth Avenue 212.242.9900

239 East 79th Street 212.929.1400

337 West Broadway 212.924.4200

530 LaGuardia Place 212.557.5300

88 Greenwich Street 212.269.8888

446 West 14th Street 212.604.0300

33 Irving Place 212.557.6500

TOWN Residential LLC is a partnership with Buttonwood Residential Brokerage, LLC and Thor Equities, LLC. No representation is made as to the accuracy of any description. This is not intended to solicit property already listed. The number of bedrooms listed above is not a legal conclusion. Each person should consult with his/her own attorney, architect or zoning expert to make a determination as to the number of rooms in the unit that may be legally used as a bedroom. TOWN Residential LLC is a licensed real estate broker, proud member of REBNY, abides by federal and state equal housing opportunity laws and owns the following subsidiary licensed real estate brokers: TOWN Astor Place LLC; TOWN Fifth Avenue LLC; TOWN Flatiron LLC; TOWN Gramercy Park LLC (“TOWN Gramercy”); TOWN Greenwich Street LLC (“TOWN Financial District”); TOWN Greenwich Village LLC; TOWN Soho LLC; TOWN West Village LLC; and TOWN 79th Street LLC (“TOWN Upper East Side”).

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$3.1 M

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195 HUDSON STREET

4 BR, 3 BATH • WEB ID: 516079 • $27,500 MONTH ADAM TAYLOR 646.588.4052 WILBUR GONZALEZ 646.738.6937

Commercial

Feverish investment for Far West Side The Hudson Yards and Manhattan West megaprojects lead to a slew of other properties changing hands and new buildings going up

T

By C. J. Hughes he redevelopment of the Hudson Yards site by the Related Companies into a massive hodgepodge of 17 million square feet of new commercial, residential, retail and open space is well underway. So is Manhattan West, a sweeping mixeduse complex from Brookfield Office Properties facing Ninth Avenue.

But those megaprojects have spawned a bevy of other investors and developers rushing into the area.

Over the last few years, developers have gobbled up land in the areas bound by West 28th to 41st streets, west of Ninth Avenue — which until now has been a mishmash of train yards, warehouses and parking lots.

3

While developments haven’t all followed immediately — many of those players are waiting for the new 7 train subway stations to open before starting construction — the preparation is feverish. Analysts say the activity is largely driven by investors looking to capitalize on a market with big potential, before prices get too high.

“If Hudson Yards and Manhattan West are already online and in full leasing mode, you are probably too late [to buy],” said Ben Thypin, director of market analysis at research firm Real Capital Analytics, which provided The Real Deal with much of the data for this story.

On the other hand, some current owners may look at the market there and say, ‘Wow, demand is so strong, I might as well sell this [rather] than develop it myself,’” he noted.

Below is a rundown of some of the activity at major sites from 2011 to spring 2014.

451 10th Avenue

A fence-ringed parking lot, this parcel was leased

by Joy and Maddd in April for 99 years for $62 million. The site is zoned for mixed-use and can accommodate 400,000 square feet of construction, but Weiss said the partners have not yet determined whether to build a commercial or residential tower.

and Joy Construction purchased this parking lot for $26

“ If Hudson Yards and Manhattan West are already online and in full leasing mode, you are probably too late.”

million. The team will spend another $89 million on a 12-story,

Ben Thypin, Real Capital Analytics

1

411 West 35th Street In November 2012, a joint venture of Maddd Equities

186-unit market-rate rental with studio to two-bedroom apartments (rendering above). The project will break ground by fall, said Eli Weiss, Joy’s director of development. It will also include 12,000 square feet of stores for middle-class residents, he said. “As this neighborhood evolves, there needs to be retail that’s not just Hermes,” Weiss said.

2

515 West 29th Street

In September, the Bauhouse Group paid $24 million for this site, owned by the Jangana family.

Bauhouse also purchased air rights in three other transactions, including one from Related. The company — whose principals include Joseph Beninati, one of the founders of Antares, a troubled Connecticut development company — has teamed up with an unnamed overseas investor on the project. The northeastern corner of the site, which is next to Related’s Abington House, is right under the High Line, where it curves to the west. Bauhouse will spend another $75 million on a condo tower, with stores downstairs, according to a news release. The Corcoran Group will handle sales, which are expected to launch this fall.

64 June 2014 www.TheRealDeal.com

4

532 West 30th Street

In September, Related bought this narrow lot, which is home to a seven-story brick 1920s office, for $9 million. Related, which also owns the adjacent parcel, is planning a 300,000-square-foot, 31-story rental with about 180 units, according to company officials, who said construction will start this fall. The firm is teaming up with Abington Properties — which it also partnered with at the nearby 300-plus-unit rental on the High Line known as the Abington House on West 30th Street.

5

511-515 West 35th Street

Elliot Spitzer, the former New York governor and real estate scion, paid $88 million for this swath of parking lots in December. That was a significant markup from when the parcels traded for $22 million in April 2013. An office or hotel is reportedly planned for the site. A spokeswoman for Spitzer Enterprises declined comment.

6

517 West 35th Street

7

470 11th Avenue

In September, Related signed a contract to buy the $75 million dusty lot from HLM Realty of Pelham, N.Y. The deal has not yet closed, according to city records, and Related has not yet revealed its plans for the site, which sits near the Hudson Park and Boulevard, a planned four-acre mid-block open space. A Related spokeswoman declined comment.

In April, Black House Development, a Manhattanbased firm that’s been active in the area, teamed up with an unnamed Chinese private equity firm to buy this parking lot for $115 million. A 320,000-square-foot glassy, boxy tower (rendering above) will reportedly open by 2017 at the site, which faces the Javits Convention Center, according to news reports. It will reportedly house 51 apartments and a 410room hotel. Ashwin Verma, a Black House principal, did not respond to a request for comment.

8

509 West 34th Street/435 10th Avenue

In a blockbuster deal, these adjacent sites, which contain a parking garage and parking lot, were purchased in April for the lump sum of $438 million by Tishman Speyer from Sherwood Equities and the Rosenthal family.

If Tishman obtains extra air rights, it can build a massive 2.6-million-square-foot tower.

Zoning allows for multiple uses, but Tishman Speyer is

Commercial

15

7 10

12

6 3

5 13

8

16

11

1

Hudson Yards 4

Manhattan West

9 2

558-572 West 34th Street

14

526 West 28th Street

15

528-534 West 39th Street

In July 2013, Related acquired this site from Extell for $168 million. As part of the deal, it also picked up a $45 million site Extell co-owned with Boston Properties at Eighth Avenue and West 45th Street. The 34th Street site, once home to an incarnation of the famed Copacabana nightclub, sits atop the new 7 train station. Before Related stepped in, Extell was planning to build a 57-story, 1.7-million-square-foot mixed-use tower there called One Hudson Yards, which would have competed with the office towers Related is building on the main rail yards site.

In July 2013, Centaur Properties bought this site for $45 million from RN Realty. The site, which was once home to the Mansion dance club, could support a 144,000-square-foot office or apartment building, according to news reports. Centaur, which could not be reached for comment, previously built 305 West 16th Street, a cond-op at Eighth Avenue.

In August 2012, developer Rockrose bought this site for $30 million, the last piece in an adjacent assemblage owned by the firm, said Justin Elghanayan, the firm’s president. In total, Rockrose now has a 75,000-square-foot site, which could support 1 million square feet of commercial space and 400,000 square feet of residential. Elghanayan called it “one of the largest floor plates in the Hudson Yards.”

He added that so far, Rockrose is planning to build 530 apartments there, plus retail, though no timeline has been established. An office or hotel could also be built at a later date.

14

expected to construct an office building. “[We] found this to be the perfect time, development site and opportunity to participate in establishing Hudson Yards as the world’s next great commercial district and neighborhood,” said Tishman Speyer co-CEOs Jerry Speyer and Rob Speyer in a statement.

9

13

358 10th Avenue

In August, Frank McCourt, the former owner of the Los Angeles Dodgers, bought this parcel across from the Hudson Yards for $167 million from Sherwood Equities and Long Wharf Real Estate Partners. McCourt is planning a 730,000-square-foot mixed-use tower at the site, which runs the full block between Dyer Avenue and West 31st Street, as TRD has reported. Matthew Rose, a spokesman at McCourt Global, did not return a call for comment. McCourt sold the Dodgers in 2012 for more than $2 billion and recently opened a New York office.

452 11th Avenue

10 In August, investor David Marx bought this 10,000-square-foot site across from the Javits Center from Lehman Brothers for $35 million. It marked something of a turnaround, as Marx had lost the same property to Lehman in 2011. Marx initially bought the property in 2007 for $45 million with plans for a 210,000-square-foot hotel, which he is expected to try again now, according to news reports.

An attempt to track down Marx was unsuccessful.

445 West 35th Street

11 Joy and Maddd also closed on a 99-year lease for the parking lot at 445 West 35th Street in December 2012 for an undisclosed price. They plan another rental there — this one 12 stories and with 115 studio to two-bedroom units. (rendering above.) The project will cost $50 million, the company said. The site, by an entrance ramp to the Lincoln Tunnel, will have 5,000 square feet of retail, either a store or a gym, Joy’s Weiss said. Construction should begin by fall.

12

541-545 West 37th Street

In December 2012, the Chetrit Group, led by Joe Chetrit and others, paid $27 million for these parcels, which sit next to the planned Hudson Park and Boulevard and near the Javits Center. According to news reports, the site, which houses an auto body shop, will soon see a new hotel. Chetrit could not be reached for comment.

444 10th Avenue

16 This summer, Joy and Maddd will break ground on an 18-story, 151-room hotel (rendering above) on this 10th Avenue site, which contained a parking lot and has been leased since 2012. All told, the project will cost $38 million, Joy’s Weiss said. Four Points Hotel by Sheraton is tapped to operate the hotel, which is slated to open in spring 2016. TRD www.TheRealDeal.com June 2014 65

Spotlight

on

New Development

Bigwigs bring A-game

Top developers, brokers, architects break down market trends from condo and land prices to the best investments at TRD’s New Development Showcase

The illusive oligarch (from left): Leonard Steinberg, a top Douglas Elliman broker; Richard Steinberg, executive managing director of Warburg Realty; Stephen Kliegerman, president of Halstead Property Development Marketing; and Adam Modlin, president of the Modlin Group, agreed it’s a mistake to imagine a collective “foreign buyer” who will swoop in to pay $100 million for an apartment.

N

ew York City’s real estate community came

From left: TRD’s Stuart Elliott, editor-in-chief; James Gardner, architecture critic; and Amir Korangy, publisher, served as moderators.

out in force last month for The Real Deal and Luxury Listings NYC’s New Development Showcase at the Altman Building in Chelsea.

The all-day event — which included three panel

discussions headlined by industry bigwigs including developers Steven Witkoff, Miki Naftali and Michael Stern; brokers Adam Modlin and Leonard Steinberg; and architect Bjarke Ingels — drew more than 3,300 industry players on a rainy New York day.

The discussions offered up insightful, and sometimes funny, comments about the current state of the residential market. And the conversations continued into the exhibit hall, where more than 25 sponsors, led

by JDS Development and Douglas Elliman, showed off their latest projects.

Here are some the best of the photos and sound bites from the day.

On ever-rising prices:

The panels drew overflow crowds.

66 June 2014 www.TheRealDeal.com

Naftali Group CEO Miki Naftali: “At the end of the day, if someone thinks that prices tomorrow or six months from now will continue to grow at the same pace, it’s a mistake.” tktktkttktktk

From left: Eric Schneider, Julia Spillman and Ariel Cohen of Douglas Elliman

Spotlight

on

New Development

tktkttktk

Lost connections: Developers who use separate designers for a building’s exterior and interior miss a big opportunity, TRD’s architecture panel agreed. “There is sort of a lobotomy where the connection [is lost] between the floor plans and the envelope. It’s almost like two different projects,” said starchitect Bjarke Ingels, far right. The discussion also featured, from left, Betram Beissel of Ateliers Jean Nouvel; Paul Whalen of Robert A.M. Stern Architects; Gene Kaufman of Gene Kaufman Architect; and John Cetra of CetraRuddy.

On brokers who avoid social media:

Miki Naftali, left, and Michael Stern were among the panelists.

Warburg Realty exec Richard Steinberg said anyone who ignores such a presence has essentially adopted an “out of sight, out of mind” business strategy.

Steve Witkoff

Citi’s Brian Gallagher, left, and James Dorcely of EverBank

Jonathan Miller, left, and Warren Friedman of Friedman Consulting

Robin Vrba of Bond New York

From left: John McDonough, Jim Stevens and Joseph Farina

Joe McMillan of DDG Partners, second from left, and Shlomi Reuveni of Town New Development, right Attorney Cynthia Fareed, left, and Melissa Young

Hudson Companies’ David Kramer

On LAND PRICES:

The Real Deal’s Yoav Barilan, left, with Efraim Tessler of Keller Williams

Michael Stern, JDS’s development managing partner: “People are stretching boundaries and convincing themselves that subpar locations are going to do the same thing as [prime locations like] the West Village.” www.TheRealDeal.com June 2014 67

Spotlight

on

New Development

The show after the showcase Industry players schmooze and booze during after-party at the Griffin in the Meatpacking District

Top tweets from TRD’s New Development Showcase

The NYC real estate industry packed the house at the Griffin.

From left: Guerrero Arcienne, Bob Kaul, Jasmine Ducker and Derek Haff

@bbhNYC “Architecture has to be the bones of the building ... not just the skin.” @BjarkeIngels laying down truth at #TRDForum

@erinlryder Wealthy international community buy new development real estate the same way they buy art - strong investment in a stable economy.

@resourcfurnitur #Condos that also offer complete interior design are being sold much quicker

@DanielGershburg And, lastly, I apologize for introducing myself as Gary Barnett. I meant no harm & I was surprised when the @Bondny rep fainted. #TRDForum

@StuartwElliott 3k a square foot is the new 1500 a square foot says jonathan miller #trdforum

Ilan Bracha of Keller Williams

Lolita Skvortsova and Anthony Arciniaga of Douglas Elliman

From left: Berry Arnette, Brittany Jensen and JJ Acosta

@1adriannoriega Michael Stern: higher barriers of entry for new development makes prices go up. #TRDForum #realestate

The Meatpacking District hotspot drew a crowd.

There were many new faces throughout the day.

BrickUnderground @BrickU When you build a tall, glass building with glass that’s too thin it looks like plastic, says Paul Whelan of Robert A. M. Stern Architects

@jonathanmiller What was best line at @trdny?

Paraphrased: “built home depot shed in backyard, so I’m a builder”

Guests gather at the after-party.

68 November June 2014 2006 www.TheRealDeal.com 00 www.TheRealDeal.com

Corcoran’s Tamir Shemesh, left, and Yigal Greenblatt of Douglas Elliman

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TH I S M O N T H I N

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

Dream Jerusalem Live Jerusalem

1970: CITY TAKES POSSESSION OF BROOKLYN NAVY YARD

T

he City of New York made a down payment of $2.6 million and formally took ownership of the 300-acre Brooklyn Navy Yard 44 years ago this month.

The commissioner of the city’s Real Estate division handed over the check to the federal government as a deposit on the total price of $22.5 million.

The once-bustling shipbuilding district founded in 1801 had seen the industry decline, from as many as 20,000 workers during World War II to several hundred at the time of the sale. The federal government closed the yard in 1966. It reopened as an industrial park in 1969, managed by the nonprofit Commerce Labor and Industry in the The Brooklyn Navy Yard County of Kings. In 1981, that group was replaced by the Brooklyn Navy Yard Development Corp.

At the time of the transfer, the city anticipated employment would return to peak levels at the reconfigured industrial park. But that never occurred. Today, about 7,000 people work there in a range of businesses from Steiner Studios to Brinks armored service.

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USA: +1-718-732-3609 sales@sun-chen.co.il 70 June 2014 www.TheRealDeal.com

1946: POST-WAR REAL ESTATE CAPS BRING EVICTIONS

combination of regulations drafted under the economic pressures of World War II and a post-war priority toward residential housing led to evictions of small office tenants in Midtown, 68 years ago this month.

That month, the local committee of the U.S. Civilian Production Administration, which regulated building, cut the weekly total of non-residential construction for the region. The agency was under a directive from Washington to reduce commercial construction in New York by 18 percent, because the federal government wanted to direct scarce building materials to housing construction, the New York Times reported.

The commercial building restrictions, combined with office rent caps, squeezed growing companies that could not lease more space.

Instead, some companies purchased buildings, giving them the right to terminate leases.

Midtown Manhattan in 1946 For example, that month, California Texas Oil Company, a joint venture of the predecessors of Texaco and Chevron, acquired 6 East 45th Street. A few months earlier, the brokerage John J. Reynolds purchased 16 East 49th Street for its own use. Because of the nearly zero vacancy rate, smaller tenants faced shutting down operations when they could not find new space. One broker described the situation as dire: “Something has to explode soon.”

A

1924: THIRD MADISON SQUARE GARDEN SITE ACQUIRED

boxing promoter in partnership with circus owner John Ringling and others purchased a former streetcar barn on the West Side 90 years ago this month, where they built the third incarnation of Madison Square Garden. This was the first of four arenas bearing the name to be built outside of Madison Square Park.

George “Tex” Rickard led the group that paid $2 million to the Eighth Avenue Railway Company for the parcel along Eighth Avenue between 49th and 50th streets, in a deal arranged by a Douglas Elliman broker.

The new structure opened in November 1925, with seating for about 17,000 people.

The original Madison Square Garden opened in 1879, the second in 1890, both adjacent to the park. The second was designed by famed architect Stanford White and was a striking example of the rich Beaux-Arts style, The third incarnation of Madison Square Garden but property owner New York Life Insurance demolished it in 1925 to make way for its iconic gold-pyramid topped office tower.

The Eighth Avenue structure was demolished in 1968, when MSG’s latest incarnation opened above Pennsylvania Station. Developer William Zeckendorf Jr. purchased the third Garden site in 1984 for what would become Worldwide Plaza.

Compiled by Adam Pincus

DAY IN THE LIFE OF:

Winston Fisher, 41, is the youngest partner at Fisher Brothers, the third-generation New York real estate dynasty.

Winston Fisher

The third-generation real estate scion talks about biking across the U.S., playing video games with his son and working out in the ‘Pain Cave’

A

t 41, Winston Fisher is the youngest partner at Fisher Brothers, the third-generation New York real estate dynasty. Along with his cousins Kenneth and Steven, he oversees day-to-day operations regarding design and financing of properties in New York and Washington, D.C. The firm is currently developing six projects in the two cities, including the Rafael Viñoly-designed 22 Thames, a soaring 71-story rental; a 37-story rental complex at 222 East 40th Street; and an 860-foot-high condo at 101 Murray Street. It also owns and manages 6 million square feet of commercial space. Much of Fisher’s day is spent at the firm’s Midtown office in meetings.

But the fitness buff — last month he competed in the St. Croix Triathlon — also manages to squeeze gym time into his busy day.

6:00 a.m. I go for a five-mile morning run.

I either work out in the gym downstairs or have the housekeeper come in and watch my kids while I run along the East River. I do a two-hour run on weekends. My goal is to get at least 24 miles in every week.

7:00 a.m. I wake up my [10-year-old] daughter Kaia, get her ready for school and take her down to the bus. Depending on the day, either my ex-wife [Jessica Eckle] or I will drop my [8-year-old] son Andrew at school. I make a smoothie for breakfast. It has almond milk, banana, blueberries, strawberries, aloe vera, flax seeds and spinach. A lot of spinach.

8:30 a.m. I arrive at the office at 299 Park Avenue and return phone calls. I also read the Wall Street Journal in print and the New York Times on my iPhone.

9:00 a.m. I attend several project meetings, mostly in the office. …We also tour other buildings to really understand what the competition is doing. I recently toured 56 72 June 2014 www.TheRealDeal.com

4:30 p.m. I’m a trustee of Syracuse Uni-

Leonard and MiMA. Also, I just toured a potential space for the 101 Murray sales office.

10:30 a.m. We meet with capital markets brokers to discuss construction loans and the optimal capital structure for projects we’re working on. We have a lot going on in Washington, D.C., where we’re seeking financing for [a second building at] Station Place [a three-building, 1.5-million-square-foot office site]. We just hired a broker and we’re going out to market to find debt.

Architect Rafael Viñoly, who is designing 22 Thames

5:30 p.m. Almost daily, I check in on Civic Builders, another charity which I’m on the board of. They build high-performing charter schools in New York and Rhode Island.

1:00 p.m. I always have a lunch meeting, with friends in the industry, brokers and business associates. Sometimes I go with Jim Flaum [of Morgan Stanley], [developer] Steve Witkoff and [Silverstein Properties CEO] Marty Burger. My go-to restaurants are the Four Seasons and Sushi Yasuda. At the Four Seasons, I love the grilled Dover sole with no sauce and steamed spinach. I start with the spinach-and-artichoke salad with no meat. I do my best to avoid the bread, but it’s my weakness.

The Four Seasons, one of Fisher’s favored lunchtime spots

2:00 p.m. We have partner meetings, because we have partners on most of our projects. I deal with Steve Witkoff, Marty Burger and Rockpoint Group.

6:00 p.m. I get into training mode again.

We have set up a room upstairs, in a part of the office that’s not being used, called the Pain Cave. At least twice a week for two hours, I do intense interval training on my bike with anyone at Fisher Brothers who is a biker, doing Race Across America, or gearing up for a triathlon. It’s not a fancy room, but it does the trick.

8:00 p.m. I take a car to my home on the Upper East Side. I make sure I cook dinner for my children. I love making Cajun salmon.

My son and I play the video game “Clash of Clans.” I help my kids with their homework and wrestle with them. They love to wrestle.

3:00 p.m. I am involved with multiple charities. One of the big things we’re doing right now is the Race Across America, a bike race that starts in California outside San Diego and ends in Annapolis. We’re raising money for the Fallen Heroes Fund, which supports military families. Our fundraising goal is $500,000. For at least one hour a day, I’m on the phone with our coach, triathlete Jimmy Riccitello, dealing with logistics. I’m the team captain. The family charity has been part of my day since I’ve been a kid. We consider ourselves fairly blessed, so we like to help other people if we can.

versity, and a member of the facilities and academic affairs committees. We just opened up the Fisher Center, an academic center on campus. Every day I call the university staff to see if there are any major leases to be approved. I’m involved in all major facility decisions. If you’re in real estate, you’re always working on ways to continually improve buildings.

Fisher after competing in the St. Croix Triathlon last month

9:00 p.m. I read a book with my children, recently “Divergent” with Kaia and “Diary of a Wimpy Kid” with Andrew. They are asleep by 9:30.

9:30 p.m. I spend an hour searching the Internet.

10:30 p.m. I get into bed and read an athletic book. I am reading “The Rise of Superman: Decoding the Science of Ultimate Human Performance.” I just finished “Iron War.” Fisher is a trustee at Syracuse University.

By Mark Maurer

PHOTOGRAPH OF Winston Fisher FOR THE REAL DEAL BY max dworkin

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Architecture Review

|

Ja m e s G a r d n e r

Getting a ‘Handel’ on the UWS

The new cross-hatched tower from Handel Architects is the best of the three projects it has designed on the Amsterdam Avenue stretch

F

ew areas of Manhattan have been as fundamentally transformed over the past few years as the stretch from the west side of Amsterdam at 66th Street to the point where that avenue meets Broadway at 72nd Street. Only one of these blocks, from 70th to 71st, remains entirely unaffected.

On the block just to the south of that, the mod, travertine-clad Lincoln Square Synagogue, designed by Hausman & Rosenberg, now stands shuttered. Its congregation has moved one street south, to a new, and far larger building whose undulating façade was ably designed by CetraRuddy.

The three biggest developments along this stretch, however, share the curious distinction of having three different developers all working with the same design firm, Handel Architects.

That the same architectural firm designed all three projects is especially odd considering how radically different each of them is from the others. The first of these developments (and by far the worst) is the Corner, so named because it occupies the southwest corner of Broadway and 72nd Street. Developed by the Gotham Organization, its façade is vaguely historicist in the way in which the Art Deco configuration of its upper floors recalls the summit of the Chrysler Building.

And yet, the blatant cost cutting and value engineering of the façade make all too evident the degree to which the result falls short of its apparent intentions.

Five blocks to the south, however, and some three years later, the firm revealed that it had improved greatly over time at Aire, developed by A & R Kalimian Realty. Gone was all trace of historicist reference, and in its place emerged a polished and competently professional tower. The whole structure, rising from a horizontal base, appears to be well made. The main problem it suffers from is that, although it looks like an office tower, it’s actually residential: you would think it had migrated from Midtown and decided to settle on the Upper West Side, a part of the city that’s been emphatically residential since the 19th century.

One block up, however, an entirely new building, developed by Equity Residential, has topped out and is nearing completion at 170 Amsterdam Avenue.

This building, much of whose curtain wall is already in place, could not be more different from Handel Architects’ previous two developments along the stretch.

If the Corner, with its echoes of the Chrysler Building, was vaguely historicist, Aire could be described as Neo-Modern in its

74 June 2014 www.TheRealDeal.com

general adherence to symmetry and modularity. This latest project, however, is Deconstructivist, and is surely the best of the three.

When completed, 170 Amsterdam, a 20-story, 185-foot-tall building, will contain 239 residential units. Sam Zell’s Equity Residential has not yet announced whether it will be rental or condo, but in A rendering of 170 Amsterdam Avenue. Inset, the under-construction building.

ter-designed Hearst Building, completed in 2006, at the corner of Eighth Avenue and 57th Street. But whereas the diagonals of the Hearst Building are strictly regular and modular, and although they were fashioned from steel that lay fairly flat against the surface of the building, the diagonals at 170 Amsterdam rise in fairly high relief from a more convention-

Handel Architects’ Frank Fusaro, the lead designer on the project.

Equity Residential’s Sam Zell

the past the firm has generally favored rentals.

The most obvious and dominant formal motif of the façade is surely the diagonal cross-hatchings, made of reinforced concrete, that are arrayed somewhat irregularly across the façade on all four sides. The most obvious source of inspiration for the tower is the Sir Norman Fos-

al matrix of glass curtain wall. In addition, there’s an almost willful variety in the modulation of each of the points of intersection at the new tower.

Above all, the effect of these diagonals creates a sense that the building — which is otherwise conventional looking — has been wrapped in the concrete equivalent of string. Along the eastern and western façades, the stories have been divided by coursing lines that protrude from the sur-

face and are interrupted by the diagonals as they lie flat against the surface of the building.

Other elements of the façade shore up Handel’s Deconstructivist credentials.

One of the most effective design conceits is the way in which the diagonals seem to rise directly out of the sidewalk and shoot up the entire surface of the building. There is no attempt to structure the building according to the traditional divisions of base, shaft and summit, or at least base and shaft, that is the rule of thumb in most traditional and Modernist buildings.

At other points, most conspicuously on the northern and southern exposures, where the western or back portion of the building comes to an end around the 13th floor, the diagonals seem to trail off into dead ends that are left stranded or suspended above the city. At the same time, over the main east-facing part of the structure, the lines of the diagonals collect in a complicated dance above the building in a way that could almost read as an homage to an early monument of Deconstructivism, Peter Eisenman’s Wexner Center on the campus of Ohio State University. In fact, that building, despite obvious differences, might seem to have exerted a less immediate, but more profound, influence on 170 Amsterdam than even the Hearst Building. And yet, in Handel’s project, the strings have lost the philosophical pretensions of Eisenman’s original. They freely avow their decorative inspiration, and the result is a far more responsible and appealing structure.

In short, 170 Amsterdam is a most unconventional building for the Upper West Side. Almost all of the most recent residential buildings have tended to be historicist or vernacular — and, if not, to be dutifully Neo-Modernist, like Cesar Pelli’s tower on the Fordham campus.

Also, this newest development is conceived as a slab, rather than as a tower.

There is surely abundant precedent for this, especially on the Upper West Side.

The buildings immediately to the west of 170 Amsterdam offer a good example of this. But in more recent years, this has been a far rarer typology south of 110th Street.

It’s always pleasant to see anyone improving, and so, with this latest project under its belt, and certainly with Aire thrown in as well, Handel Architects has gone a long way to redeeming itself for the sins committed in the design of the Corner. TRD Rendering courtesy of handel architects llc

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Q&A

Hitting the hotel sweet spot Will an oversupply of rooms and competition from Airbnb create profitability problems for hospitality players?

By Sasha von Oldershausen

T

he New York City hospitality industry has been in the spotlight lately — and not just for the fancy new hotels going up all over Manhattan. It has, of course, also been locked in something of a war with the apartment-sharing website Airbnb, which New York State Attorney General Eric Schneiderman has been investigating for failing to comply with several local laws.

In this month’s Q&A, The Real Deal talked to hoteliers, analysts and a source from Airbnb about how the website is really impacting the industry and about how the hospitality sector is performing on the whole.

Some expressed concerns about a saturation of hotels in Midtown, an oversupply of hotel rooms in general and about the possibility of room rate reductions.

But while New York City’s hotel industry dipped slightly in the early part of 2014, the numbers show the sector — which took a severe, albeit shortterm, hit in the wake of the recession — is still performing relatively well.

Not only is tourism at an all-time high, with a total of 54.3 million visitors in 2013, occupancy is “finally starting to stabilize back to peak levels,” said

Gilda Perez-Alvarado of Jones Lang LaSalle Hotels.

In addition, industry players say they expect several high-profile luxury hotels such as the Park Hyatt at One57, the Baccarat and 5 Beekman to drive luxury hotel demand even higher in New York City, which they say has a shortage of luxury rooms compared to other international cities like London and Paris.

Sources agreed that Airbnb was most significantly impacting the lower end of the market.

Sean Hennessey, the CEO of Lodging Advisors, estimated that Airbnb is reaching 4-to-5 percent of New York City’s tourist trade. “But the number is growing,” he said.

A spokesperson for Airbnb said the overwhelming majority of the website’s listings are outside of Midtown Manhattan, where over half of the city’s hotel rooms are located.

For more on the foreign capital flowing into the city, what to expect with room rates and which other projects are being eyed as possible industry game-changers, we turn to our panel of experts.

Bradley Burwell

that now every brand is already represented multiple times over. Every concept is a rehash of what somebody else did. I think that one challenge for new hotels is distinguishing themselves. And for old hotels, it’s not getting lost in this slew of new

vice president, CBRE Group The hotel industry has gotten a lot of attention lately because of its battle with Airbnb. What is the state of the hotel industry in NYC? How does activity compare to the recent past?

Airbnb is the topic du jour in the hotel industry. To tell you the truth, the numbers [showing a slightly weaker market] are a bit skewed [because] there has been a good amount of hotel rooms added to the market. I think that most experts would agree that [the numbers are] a result of the lodgings industry, and not as much of an impact by Airbnb … Within New York City, a quarter of people coming in are group-related. Of the other 75 percent, it’s about 6040 between corporate and leisure tourism.

Airbnb only appeals to that leisure-oriented guest. And that guest is constantly squeezed by the improving economy. The people who are typically pushed out to Brooklyn and Long Island City, even New Jersey, I assume that a lot of the Airbnb supply is absorbing that kind of demand.

Revenue per available room, or RevPar, rebounded strongly in the wake of the downturn. What are you seeing on the RevPar front in New York City now?

As of March, in New York City as a whole, RevPar was down 2.1 percent from last year. This is a result of the new supply.

The new supply not only adds rooms, but

it also comes in at a lower rate. In Manhattan, RevPar for the city increased 4 percent. As you’d expect, luxury had the greatest rate increase, at 4.6 percent, but it didn’t change in occupancy. I think that it really is indicative of the amount of de-

“You’re going to see a tremendous saturation of hotels throughout Midtown. There’s just been so much built that now every brand is already represented multiple times over.”

Bradley Burwell, CBRE Group mand there is for New York … 5 million additional visitors a year takes up another 15,000 to 18,000 hotel rooms, so that new supply is absorbed pretty quickly.

What trend in the NYC hotel industry concerns you most right now?

One concern I would say is going to be in the long term — accessibility into the city.

Our airports only have so much capacity; our subways only have so much capacity; our rail and our highways only have so much capacity. I have not seen an analysis on this, but I would be curious to know, at what point do we tap out? At what point, from an infrastructure perspective, can the city not handle it anymore?

What do you expect the biggest challenges to be in the coming year for the NYC hospitality sector?

One is that you’re going to see a tremendous saturation of hotels throughout Midtown. There’s just been so much built

product. The Plaza will always be the Plaza. The St. Regis will always be the St. Regis. But there are a lot of hotels, especially between 18th and 40th streets, that are small and boutique and that aren’t particularly unique.

There are a lot of planned hotels coming online, including the Park Hyatt at One57, and the Baccarat. Which new hotels do you think are most exciting and which do you think have the potential to be game changers?

You don’t see a lot of hotels in the Plaza District, but those that do exist there have to be special. The Park Hyatt is going to be that. Would I say that it’s going to be a game changer? No. I think 5 Beekman has the opportunity to be a true game changer. It’s going to do what the Ace and the Gansevoort did. This could make that whole Nassau Street a destination in itself.

Are you seeing any new types of inves-

tors getting into the hotel game?

The big thing that everybody loves to talk about is the amount of foreign capital that continues to play a part in this market. A lot of the most prominent hotels were either sold to foreign capital or foreign capital was a participant. The obvious example is the Plaza, which was owned by a Saudi, sold to an Israeli, who sold it to an Indian. If that’s not global cooperation, I don’t know what is. I think there’s foreign capital now in the smaller, less iconic hotels. In the Middle East, for example, there are a lot of people worth $100 million [that can invest] — not just billionaires. And we’re seeing this burgeoning group of the truly affluent in China, who are not going after the $50 million investments, they’re going after the $20 million ones.

Ira Drukier

co-founder/owner, BD Hotels What impact is Airbnb having on the hotel industry in the five boroughs?

It simply adds to the number of available rooms.

Like any competitive marketplace, more availability tends to lower the returns.

Do you think there’s room for hotels and apartment sharing websites like Airbnb in NYC? Airbnb provides a service at the lower end of the market. … However, there are regular hotels that provide rooms at those www.TheRealDeal.com June 2014 77

Q&A prices as well. Since I haven’t used Airbnb, and I have no real basis of comparison, I can only assume that guests believe they are getting ‘more for their money’ from these rentals. There is, however, a real problem with Airbnb. Firstly, it presently is not legal to rent an apartment for daily use without the owner in occupancy. … Secondly, residential apartments have much less life safety provisions than hotels do. … And lastly is the issue of New York City taxes. New York City is missing out on all the Airbnb unreported income in the buildings that are being used for hotel guests.

in the branded budget/select service space — which explains why overall rate growth has remained somewhat muted. With the recovery of the group and corporate segment, we will start to see significant ADR growth in the mid-range and full-service sector. … On the luxury side, we are very bullish about the opening of the Park Hyatt and the Baccarat. We expect these two hotels will have a positive impact on ADR and induce further luxury demand into the market. When compared to cities like London, Paris and Singapore, New York is the most under-supplied market in terms of luxury product.

The hotel construction boom is expected to bring roughly 11,000 new hotel rooms to the city over the next three years. Are you concerned about an oversupply?

It’s easy to do the math. If we have the same number of visitors, it will reduce the RevPar. So on average, these rooms will lower rates and occupancies. However, it will be the older, more generic hotels that suffer the most.

What trend in the NYC hotel industry concerns you most right now?

Rising labor costs and their implication on service and product offering.

What’s the most surprising trend in the NYC hotel industry?

Everyone who owns a piece of land not zoned for residential use thinks they can develop a hotel. They aren’t all right.

Gilda Perez-Alvarado executive vice president, Jones Lang LaSalle Hotels We wrote a few months ago that hotel occupancy was at 87 percent.

Where is it now and how much has this number varied compared to the last few years and during the boom?

Occupancy is finally back to peak levels, reaching nearly 85 percent in 2013, compared with 84 percent in 2007. April occupancy was down 1.5 percent from last year to 79 percent, which was off-set by a 1.5 percent increase in [Average Daily Rates or ADR.] Occupancy was challenged during the first quarter of the year compared to the same time period in 2013 due to the lack of the Sandy-effect, which brought extended stay-business, a very tough winter season and also potentially the amount of supply that entered the market.

Which sectors of the NYC hotel industry are doing best?

In general, all sectors are doing relatively well. [Still], while all of the new supply has been absorbed, as evidenced by the growth in occupancy, [room rate] growth has not been in the double-digit range. It is also important to note that most of the new supply that has entered the market is 78 June 2014 www.TheRealDeal.com

Sean Hennessey

CEO, Lodging Advisors What impact is Airbnb having on the hotel industry in the five boroughs?

My estimates indicate Airbnb is capturing about 4-to-5 percent of New York’s tourist trade, both in terms of demand and revenues. But the number is growing. My count of Airbnb listings during the first quarter of this year indicated annualized growth of more than 20 percent.

What is going on with hotel occupancy in NYC? Occupancy is at or near an all-time high.

For many years, hotel occupancy levels in New York have been hampered more by capacity constraints than by any other factor. Finding guests who want to visit New York is one problem we don’t have.

If occupancy is that high, then will Airbnb and other apartment-sharing websites really hurt the industry?

While hotels have plenty of customers, room rates are still $22 below where they were in the fall of 2008. There are many reasons for this, but certainly the introduction of competition like Airbnb is a factor. The impact on hotels is more pronounced than it might initially appear.

Because New York hotels face high operating costs, traditional hotels are much less profitable than they once were. Traditional full-service hotels saw their operating profit margin decline from 30 percent in 2007 to 13 percent in 2012. This decline has forced many hoteliers to make do with fewer employees and amenities, damping the beneficial effect the recovery would otherwise have exhibited.

The hotel construction boom is expected to bring roughly 11,000 new hotel rooms to the city over the next three years. Are you concerned about an oversupply?

My primary concern is that new supply will force hotels to compete by lowering prices. This will dampen not only profitability at the hotels, but also the economic impact that is generated by a successful business operation. Every hotel should have a plan to differentiate itself from competitors with service, style, image, design or some such combination. Rampant discounting will lead to ruinous competition.

Are you seeing any new kinds of investors getting into the hotel game?

We are seeing interest from Chinese investors who are in the early stages of building their knowledge base of the local hotel real estate market. I anticipate that the Chinese will make several blockbuster deals over the next few years.

Geoffrey Mills

board chairman, Hotel Association of New York City What impact is Airbnb having on the NYC hotel industry in the five boroughs?

New York City is just now awakening to its own problems with Airbnb. Roughly 44,000 of Airbnb’s listings are in New York City. A recent analysis of Airbnb listings in New York City by the New York State Office of the Attorney General found that roughly two thirds of NYC-based listings on Airbnb are illegal pursuant to the state’s laws governing short-term rental of permanent residences. … With rising rents, growing concerns about safety, and loss of tax revenue, illegal hotels are causing serious problems for NYC neighborhoods.

tel rooms in New York City are located in Midtown Manhattan, 87 percent of Airbnb’s listings are outside of that district.

Many of our hosts are in neighborhoods where people want to stay, but where operating a big hotel just isn’t feasible.

City and state officials, along with some in the hotel industry, have cited concerns about Airbnb following current laws and regulations. How do you strike the balance between abiding by these rules, while still pushing for innovation?

Airbnb and the sharing economy are new, but we know that everyone can appreciate the enormous economic and social benefits that sharing platforms can provide. In New York, a study found that Airbnb generated $632 million in economic activity in one year alone. We are absolutely committed to working on solutions that protect the public interest and embrace these kinds of innovative ideas.

Which geographic areas of the city are you seeing the most Airbnb rentals in?

In one year, Airbnb generated $104 million in economic activity outside of Manhattan: 16,200 guests used Airbnb to stay in Queens and local businesses in the Bronx earned $1.6 million. trd

Download The Real Deal‘s free mobile app

Do you think there’s room for both hotels and apartment-sharing websites like Airbnb?

Yes, as long as they comply with the law and are regulated for compliance to similar health, fire and ADA regulations like hotels. There’s always room for competition.

Nick Papas spokesperson, Airbnb

Do you think there’s room for hotels and apartment-sharing websites like Airbnb to coexist?

Since Airbnb got started in 2008, hotels have continued to thrive in New York and around the world. We strongly believe that Airbnb makes it possible for more people to travel and we know that cities like New York are more than big enough for a vibrant hotel industry and companies like Airbnb. While over half of the ho-

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SOUTH FLORIDA

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

REPORT

First post-bust condo development sells out The first condo project completed in Miami’s financial district since last decade’s real estate collapse has sold out just four months after construction ended.

Related Group sold all 192 units at the colorful MyBrickell building. The Jorge Perez-led company collaborated with prominent New York-based interior designer Karim Rashid on the project.

Related began construction of the

ing MyBrickell’s completion. “[Some] were able to buy land and pay for construction at much cheaper costs.”

Downtown land prices spike as supply drops Jorge Perez

27-story building in early 2012.

“Builders are benefitting from the upswing,” Perez told The Real Deal during a recent event mark-

With vacant land in the downtown Miami area at a premium, investors are making aggressive offers for the few available sites.

Some property owners are on the verge of banking huge returns on their investments. Real estate

firm CBRE received nine-figure offers for two such sites in the first month of marketing them.

Bids approached $200 million for 18 acres that Miami developer Alex Vadia wants to sell in the city’s Midtown neighborhood, which is located between Wynwood and the Design District. Vadia’s Midtown Opportunities spent about $57 million assembling 22 acres in Midtown three years ago.

CBRE also has two offers exceeding $100 million for 300 East,

A bird’s eye view of 300 East

a waterfront property adjacent to downtown’s EPIC Hotel & Residences. More than 90 groups expressed interest in the 1.25-acre parcel, which is owned by EPIC developers Ugo Colombo and Diego Lowenstein.

Both sites have zoning that allows for large-scale development.

On the buying side, Russian oligarch Oleg Baybakov spent more than $37 million for land in the Edgewater neighborhood north of downtown over the last three months. Baybakov is also assembling property in the city’s financial district.

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Eduardo Costantini’s Consultatio received a whopping $332 million construction mortgage for the luxury Oceana Bal Harbour condo project. An HSBC-led group of lenders gave the Argentine developer the loan for the 240-unit allglass tower. Consultatio is building Oceana on the former site of the Bal Harbour Beach Club.

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Consultatio is reportedly pursuing additional projects in Miami and New York. It is close to finishing its first U.S. project, Oceana Key Biscayne.

Other recent construction financing transactions include a $39 million mortgage from Florida Community Bank for Melo Group’s Bay House condo tower in Edgewater, and a $19 million loan from BCI Miami for condo Le Parc at Brickell, being built by ALTA Developers and Strategic Properties Group. By Eric Kalis

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Snapshots of real estate residential real estate news briefs news from from around the U.S. around the U.S.

REPORT

DENVER

New Mexico

The emergence of a legal marijuana industry in Colorado has paved the way for a burgeoning real estate market in cities like Denver, where companies are rushing to snatch up industrial buildings for their pot-growing operations. Denver is in one of the only counties in the state that allows its manufacturing buildings to be used for marijuana cultivation, which has led to a spike in real estate prices there.

“Some of these buildings on a good day are worth $60 or $70 a square foot and we are getting a $20 to $30 premium,” Aaron Valdez, a broker for Cassidy Turley, told Bloomberg News. The marijuana market has been so profitable – with growers reportedly paying $450 to $1,100 a pound to grow, and selling at retail for $11,000 a pound – that growers have reportedly had no trouble paying the extra rent.

Sales of marijuana for recreational use started in the state on Jan. 1.

Shirley MacLaine

Actress Shirley MacLaine listed her 7,450-acre Plaza Blanca Ranch retreat in Abiquiú, New Mexico for $18 million.

The “Terms of Endearment” Oscar winner has owned the 9,000-square-foot, nine-bedroom house for 20 years. The property also features a horse barn, yurt, guesthouse, green house, a wind generator, swimming pool and two ponds.

Marijuana legalization has led to a boom for industrial space in Colorado.

Los Angeles

LOS ANGELES

Meryl Streep

Los Angeles released details of its bid to host the 2024 Summer Olympics, which positions a revamped Los Angeles Memorial Coliseum and Exposition Park at the center of the plan. LA’s Exposition Park – just south of the University of Southern California’s main campus – would provide the site for the proposed Olympic Park.

And the Coliseum, which was also the focal point of the 1932 and 1984 Olympics, would be renovated into an 80,000-capacity “world-class athletics facility,” reported Inside the Games, a website devoted to Olympics news. Additionally, a proposed 20,000-seat soccer stadium would host the aquatic events, while LA Live, home of the Staples Center, would be the site of gymnastics and handball. Other venues included in the plan are the Frank Gehry-designed Walt Disney Concert Hall, to be utilized for taekwondo, and the Griffith Observatory, for some cycling events. Los Angeles is one of seven cities – including Boston, Dallas, Philadelphia, San Diego, San Francisco and Washington D.C. – vying for the American bid.

and Sustainability. Houses typically cost between $40,000 and $120,000 to build before permits, real estate appraiser Taylor Watkins told the television station. And many who invest in the tiny homes build them alongside their own houses – as accessories – for visiting family members to stay in, or to rent, the New York Times reported. Portland has changed its laws to accommodate the buildings, and offers financial incentives by waiving new development fees. Unlike many other cities, owners are not required by law to live on site, which limits the construction of tiny homes elsewhere.

AUSTIN Charles Schwab is mulling a move to Texas.

It already has a large office center near Austin.

Too-many-to-count Oscar winning actress Meryl Streep listed her 3,500-square-foot Los Angeles estate for $6.75 million. Streep purchased the four-bedroom, four-bath for $4.5 million just a year ago. The house, built in 1954, features interiors designed by Xorin Balbes, and a pool.

Hollywood Hills

PORTLAND Portland, Ore., is downsizing. The Rose City has welcomed “accessory dwelling units” – houses that range in size from approximately 200 to 800 square feet – and the tiny houses have taken Portland by storm. Nearly 25 percent of single-dwelling Charles Schwab is considering moving its headquarters out of development permit applications in the city are for A.D.U.’s, San Francisco, and Dallas-area real estate developers and broaccording to KOIN News, citing the city Bureau of Planning kers say the financial services giant is scoping out North Texas.

The discount brokerage already has a large office center in suburban Austin. While company officials have previously remarked that Texas is on their list of potential locations, a spokesperson for the firm said no decision was yet made. Schwab said late last year it will likely move roughly 2,700 employees from the Bay Area to either Denver or Texas, citing lower operational costs and taxes, Dallasnews.com reported. Schwab could join a list of companies from California, Illinois and New York making the move to Texas for similar reasons. Most notably, in April, Toyota Motor Corp. said it would shift its Southern California headquarters to Plano in North Texas, along with about 3,000 jobs.

Tiny houses are big in Portland, Ore.

82 June 2014 www.TheRealDeal.com

Compiled by Sasha von Oldershausen

Zac Efron

Actor Zac Efron sold his 2,424-squarefoot Hollywood Hills pad for $2.78 million. The “Neighbors” star listed the two-bedroom, three-bathroom house for $2.85 million in March. He purchased the home, which features glass walls and an infinity pool, for $2.35 million in December 2008.

Commercial properties up for sale in NYC Tribeca Film Festival HQ lists at $105M The 80,000-square-foot headquarters of the Tribeca Film Festival is be13-17 Laight Street ing shopped around for $105 million, after trading for just $56 million at the end of 2012, The Real Deal has learned. Eastern Consolidated’s David Schechtman is marketing the six-story mixeduse property at 13-17 Laight Street on behalf of the owners, investment advisory firm Whitestar Advisors and development firm VE Equities, headed by Zach Vella and Justin Ehrlich. Several of the building’s commercial leases are set to expire in 2014 and 2015, according to CoStar Group, which would allow the building to be repositioned. It also has nine residential units, all but one of them market-rate. The property comes with unused air rights, which could allow for construction of more units.

Drug-treatment site in Hell’s Kitchen could fetch $40M A local investment company that has for decades owned a building housing a drug treatment facility has put the property on the market. Some in the industry think it could sell for $40 million or more. The owner of 500 West 57th Street — home to the A.R.E.B.A. Casriel

potential as a retail store. The nonprofit’s lease expires at the end of 2015. The two-agent firm CSRE Real Estate Advisors, founded by broker Christopher Snyder in 2012, won the exclusive after several years of conversations started by CSRE’s Bryan Winter, an architect and salesperson there.

Seven-building East Flatbush rental complex asks $35M Real estate investment firm KMG Partners is asking $35 million for a seven-building apartment com5407-5413 plex occupying a full block in East Kings Highway Flatbush, TRD has learned. The 195,000-square-foot Clarendon Gardens site at 54075413 Kings Highway in Brooklyn holds 224 rent-stabilized apartments and 97 parking spots. The deal would also include 23,790 square feet of unused air rights. The units are housed in five three-story buildings and two two-story buildings. The site underwent $4 million in renovations, including new roofing and a new gas system, over three years, ending in 2011. Shallini Mehra and Amit Doshi of Flatiron District-based brokerage Besen & Associates are marketing the property.

500 West 57th Street

addiction abatement center — put the building up for sale after talking with brokers who suggested it had untapped

$25M West Harlem portfolio up for grabs

2492 Adam Clayton Powell Jr. Boulevard

Israeli real estate investor Yoram Nissim is looking to sell a three-building rental portfolio in West Harlem for just shy of $25 million, TRD

has learned. The buildings, located on West 145th Street and Adam Clayton Powell Boulevard, total 68,120 square feet and contain 99 rent-stabilized and free-market units as well as retail space, according to an offering memorandum from Marcus & Millichap.

The nine retail tenants in the buildings, which are located at 2492 and 2498 Adam Clayton Powell Boulevard and 215-219 West 145th Street, account for 12 percent of the buildings’ gross income, according to the memo. Marcus & Millichap’s Peter Von Der Ahe is marketing the portfolio along with colleagues Seth Glasser, Scott Edelstein and Jonathan Schwartz.

Queens development site asking $24M A corner development site at 88-18 Justice Avenue in the Elmhurst section of Queens is on the market with an asking price of $24 million.

The 44,748-square-foot lot, 88-18 Justice Avenue which has about 298 feet of frontage on Justice Avenue and 226 feet on 55th Avenue, has 271,148 square feet of unused air rights for future development. The property is located a block away from Queens Boulevard, one of the borough’s most active retail corridors, directly across the street from the Queens Place Mall. Massey Knakal’s Stephen Palmese and Thomas Donovan are handling the assignment.

Compiled by Linden Lim

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84 June 2014 www.TheRealDeal.com

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Deal Sheet summary

The Deal Sheet, on pages 88 to 98, covers transactions from 4/11/14 through 5/10/14.

Please submit future deals to deals@therealdeal.com.

Overview Property sales

Financing

Leases (# of deals)

Leases (square feet)

Deals

47

Transactions

6

Office

31

Office

537,242

Dollars

$1,129,440,000

Aggregate value

$15,450,000

Retail

50

Retail

212,288

Total

81

Total

749,530

Sales

6

Office

Multi-family Office

2

Retail Industrial

Industrial

5

Mixed-use

Mixed-use

Development site

Retail Development site

3 289.9

Hotel

25

Hotel

$503.

15

$

6 $22

9 1 $

.3

3 8.

$40.2

4

Multi-family

$75.5

5

By dollar volume (in millions)

By type

Office leases Office leases by industry

Office leases sf by industry

Industry

Leases of deals

Top tenant reps for office leasing by sf

Industry

Leases square feet

Broker

Leases square feet

Consulting 2

Consulting 6,622

Newmark Grubb Knight Frank

Fashion* 7

Fashion* 53,643

Cassidy Turley 33,000

359,431

Financial 5

Financial 388,910

CBRE Group 20,987

NGO 1

NGO 9,750

DTZ Americas 17,922

Other 5

Other 12,556

Adams & Co.

Production 3

Production 15,286

Cushman & Wakefield 10,924

Real Estate 3

Real Estate 27,357

Denham Wolf Real Estate

Technology 2

Technology 11,614

ABS Real Estate 8,938

Textiles 2

Textiles 5,352

EVO Real Estate Group

7,777

Transportation 1

Transportation 6,152

Redwood Property Group

7,143

16,718

9,750

Retail leases Retail leases by industry

SRS Real Estate Partners

15,600

RKF 12,704

Education

Jones Lang LaSalle 10,435

Discount

Gluck Realty 9,500

Food & Beverage

EVO Real Estate Group

7,100

Platinum Property Group

6,800

19

Other

00

2

Financial

62,8 01

Education

17 9

Discount Food & Beverage

00

Financial

2

,7

Winick Realty 17,851

Health & Beauty 1

19,3

Other

20,970

15

Health & Beauty

Newmark Grubb Knight Frank

2

Ripco Real Estate 55,895

Retail leases sf by industry

02

Leases square feet

39 ,

Top tenant reps for retail leasing by sf Broker

0

17,84

57,

625

Gotham City Group 6,600

(*includes showroom space)

www.www.TheRealDeal.com June 2014 87

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 4/11/14 to 5/10/14. Please submit future deals to deals@therealdeal.com.

Office leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

1290 Sixth Ave

355,000

Neuberger Berman / Neil Goldmacher, NGKF

Vornado / J. Kuriloff, B. Mosler, F. Speyer, M. Nahmias, C&W

The investment management firm signed a new 20-year lease for its headquarters. The tenant is relocating from 605 Third Avenue.

500 Fifth Ave

33,000

Vince / N. Heryet, S. Bellwood, Cassidy Turley

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

The fashion retailer signed a long-term office lease on the entire 19th and 20th floors.

521 Fifth Ave

20,987

RKF / Brad Gerla, CBRE

SL Green / n/a

The retail real estate brokerage signed an expansion lease for office space.

120 West 45th St

17,922

Curex Group Holdings LLC / Dirk Hrobsky, DTZ Americas Inc.

SL Green / Represented in-house

The financial technology company signed a lease renewal on the 22nd floor and expanded onto the 23rd floor.

462 Seventh Ave

9,750

Echoing Green / Amy Lawrence, Denham Wolf Real Estate

S.I.K. Associates LLC / S. Kaufman, B. Raskob, Y. Chang, Kaufman Organization

The nonprofit signed a 10-year lease.

501 Madison Ave

8,938

MBS Value / J. Brod, R. Neborak, ABS Real Estate

501 Madison-Sutton LLC; 501 Madison Avenue LLC / A. Jinishian, S. Hecht, Colliers International

The investor relations firm signed a lease for an entire floor. The company is relocating from 424 Madison Avenue.

463 Seventh Ave

8,763

OSP Group LP / David Levy, Adams & Co.

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

The apparel company signed a new lease. The reported asking rent was $44 per square foot.

32 Mercer St

8,600

Percolate Industries / n/a

Man Yun Real Estate Corp. / R. Kornblatt, T. Etienne, Sinvin Real Estate

The technology company signed a 14-month lease on the eighth floor.

350 Fifth Ave (Empire State Building)

6,152

Qatar Airways / G. Markman, J. Cirone, C&W

Empire State Realty Trust / R. Kass, F. Posniak, ESRT; W. Cohen, J. Tootell, S. Ursini, NGKF

The airline signed a lease.

145 West 28th St

5,286

Fancy Pants Group / Eli Somack, Redwood Property Group

The Kash Group / Elliott Klein, EVO Real Estate Group

The digital production studio signed a lease.

120 Wooster St

5,000

Spring Studios / Esteban Gomez, Town

120 Wooster LLC / C. Owles, J. Costello, Sinvin Real Estate

The production studio signed a six-month lease. The reported asking rent was $75 per square foot.

100 West 14th St

5,000

The Alchemical / Annie Yao, Buchbinder & Warren

n/a / Annie Yao, Buchbinder & Warren

The rehearsal studio rental company signed a lease for loft office space.

499 Seventh Ave

4,800

LM Mignon LLC / Howard Epstein, EVO Real Estate Group

n/a / E. Zellinger, B. Neugenboren, Savitt Partners

The fashion company signed a lease.

80 Broad St

4,765

Brand Learning Inc. / Seth Hecht, Colliers International

Savanna / H. Stein, T. Stracci, A. Leshowitz, NGKF

The marketing consultancy signed a new seven-year lease for part of the 21st floor.

355 Lexington Ave

4,000

Eastern Consolidated / n/a

Rudin Management / n/a

The commercial real estate brokerage signed an expansion lease on the fifth floor, adding to the 15,000 square feet it already occupies on the 11th floor.

44 Court St (Brooklyn)

3,887

Hair Club for Men / Ken Ruderman, Studley

n/a / Craig S. Berman, Joseph P. Day Realty

The hair loss solutions provider signed a lease.

463 Seventh Ave

3,852

J + D Textile Inc. / David Levy, Adams & Co.

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

The textiles company signed a new lease. The reported asking rent was $44 per square foot.

350 Fifth Ave (Empire State Building)

3,778

Taurasi Capital Management / Jeff Hersch, Prime Manhattan Realty

Empire State Realty Trust / R. Kass, F. Posniak, ESRT; W. Cohen, J. Tootell, S. Ursini, NGKF

The hedge fund signed a lease.

350 Fifth Ave (Empire State Building)

3,272

RKY Services (USA) Inc. / E. Silverstein, B. Zoubek, C&W

Empire State Realty Trust / R. Kass, F. Posniak, ESRT; W. Cohen, J. Tootell, S. Ursini, NGKF

The hedge fund signed a lease.

45 West 34th St

3,014

Roku / Jessica Luciere, Fountain Realty

n/a / EVO Real Estate Group

The tech company signed a lease.

350 Fifth Ave (Empire State Building)

2,897

BioSynthema / E. Zar, Murray Hill Properties; L. Politi, Corcoran

Empire State Realty Trust / R. Kass, F. Posniak, ESRT; W. Cohen, J. Tootell, S. Ursini, NGKF

The pharmaceutical firm signed a lease.

463 Seventh Ave

2,737

Planet Motherhood Inc. / David Levy, Adams & Co.

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

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

247 West 35th St

2,400

William Gilbey Inc. / Richard Price, EVO Real Estate Group

Adams & Miller / Represented inhouse

The fashion company signed a lease. The tenant is relocating from 499 Seventh Avenue.

15 West 26th St

2,370

Hirshmark Capital / Ryan Gessin, NGKF

Mesa Realty Associates / C. Catuogno, A. Gamberg, Mesa Realty Associates

The real estate private equity investment firm signed a lease for its first New York office.

45 West 34th St

2,255

TUP NY / N. Nagata, M. Morishige, Sumitomo Real Estate

34th Street Commercial Properties / D. Moskowitz, R. Price, EVO Real Estate Group

The executive search firm signed a lease. The tenant is relocating from 100 Park Avenue.

45 West 34th St

2,061

Five O’Clock Club / Corey Borg, NGKF

34th Street Commercial Properties / D. Moskowitz, R. Price, EVO Real Estate Group

The national outplacement and career counseling network signed a lease. The tenant is relocating from 16 West 16th Street.

276 Fifth Ave

1,857

AK-PE / Michael Robins, Redwood Property Group

n/a / Elliott Klein, EVO Real Estate Group

The consulting engineers signed a lease.

276 Fifth Ave

1,500

Breteuil / Joshua Goldman, C&W

n/a / Elliott Klein, EVO Real Estate Group

The fabric finishing company signed a lease.

237 West 35th St

1,456

Smarttix Entertainment Services Inc. / Michael Kaufman, Kaufman Organization

n/a / C. Catuogno, R. Frischman, EVO Real Estate Group

The event/theater ticket agency signed a lease. The tenant is relocating from 312 West 36th Street.

463 Seventh Ave

1,366

Y & Z World Development Inc. / David Levy, Adams & Co.

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

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

152 Madison Ave

577

National Mill Industry / H. Epstein, B. Bernstein, EVO Real Estate Group

n/a / H. Epstein, B. Bernstein, EVO Real Estate Group

The undergarment distributor signed a lease renewal.

88 June 2014 www.TheRealDeal.com

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John Gardner Sponsor: MCP SO Strategic 56 LLP, c/o Green Investments, 160 Varick Street, 2nd Floor, New York, NY 10013. This is for informational purposes only. The complete offering terms are in an Offering Plan available from the sponsor. File No. CD07-0132. This is not an offer to sell condominium units in any jurisdiction which requires prior registration and in which the Condominium is not registered. We are pledged to the letter and spirit of US 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.

Retail leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

150-32-46 Northern Blvd (Queens)

18,500

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

Milamin Associates / Represented in-house

The bank signed a 20-year ground lease.

292 Court St (Brooklyn)

15,700

The LePort Schools / Jordan Gosin, NGKF

n/a / R. Condren, K. Triglia, G. Danut, CPEX Real Estate

The school leased retail space.

40-07 73rd St (Queens)

12,000

Central Parking Garage Corp. / Mark Kapnick, SRS Real Estate Partners

73 Woodside Owner LLC / Mark Kapnick, SRS Real Estate Partners

The parking garage operator signed a 10-year lease.

2294 Nostrand Ave (Brooklyn)

9,840

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

2294 Nostrand Holdings LLC / E. Bukai, M. Mahony, R. Senior, Ripco Real Estate

The discount chain signed a lease for a new location.

290 Baychester Ave (The Bronx)

8,603

Olive Garden / Tom Rettaliata, Ripco Real Estate

Prestige Properties & Development Co. Inc. / Welco Realty

The restaurant signed a 10-year lease.

112-02 Jamaica Ave (Queens)

8,000

Family Dollar / Zack Baumgarten, Gluck Realty

Daniel Melamed / n/a

The discount retailer signed a lease.

290 Baychester Ave (The Bronx)

7,652

Joe’s Crab Shack / Tom Rettaliata, Ripco Real Estate

Prestige Properties & Development Co. Inc. / Welco Realty

The restaurant signed a lease.

50-01 2nd St (Queens)

7,590

Urban Market / H. Shapiro, A. Fishbein, Winick Realty

Lightstone Group / H. Shapiro, A. Fishbein, Winick Realty

The market signed a lease at Gantry Park Landing, a luxury rental building.

148 Lafayette St

7,100

Five Points Academy / Rob Frischman, EVO Real Estate Group

EPIC Lafayette LLC / C. Owles, M. Talpalar, Sinvin Real Estate

The fitness studio signed a lease for 2,600 square feet on the ground floor and 4,500 square feet on the lower level. The reported asking rent on the ground level was $95 per square foot, and the asking rent on the lower level was $25 per square foot.

120 East 56th St

6,800

Asanda Aveda / L. Paci, S. Romoli, Platinum Property Group

120 East 56th Street LLC / J. Maksimova, M. Watts, Keller Williams NYC; W. Becker, D. Dynak, First Pioneer Properties

The spa and salon signed a long-term retail lease for the entire second floor.

43 South 3rd St (Brooklyn)

6,600

Brooklyn Market & Den / V. Sweeney, T. Dow, Gotham City Group

n/a / n/a

The workspace and coffee shop hybrid signed a lease.

54 West 14th St

5,700

Dairy Queen / Jeremy Modest, Ripco Real Estate

Fab 14 LLC / Adam Langer, Zelnik & Co.

The ice cream and fast food chain signed a lease for a new location.

26 Greene St

5,700

Lazzoni USA / n/a

n/a / RKF

The furniture retailer signed a lease.

222 East 34th St

5,600

Brooklyn Styles / Zach Nathan, Ripco Real Estate

Rosebud Associates / J. Siegelman, H. Shapiro, Winick Realty

The salon signed a lease.

1535 Third Ave

5,400

Maison Kayser / D. Berke, P. Berkman, JLL

Olnick Organization / M. Krell, A. Yunis, CBRE

The bakery signed a 15-year lease.

34 West 33rd St

5,256

33 Captain Claws LLC / D. Levy, B. Maslin, Adams & Co.

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

The restaurant signed a lease.

30 Flatbush Ave

5,035

United HealthCare / Aileen McFarlane, JLL

AGNL-CAP Venture / D. Boutross, M. Schuss, D. Rubens, Winick Realty

The healthcare company leased retail space.

2 Gold St

5,000

SoulCycle / n/a

TF Cornerstone / n/a

The cycling studio signed a lease for its 10th New York City location.

28 East 4th St

4,350

Mile High Run Club / n/a

n/a / RKF; Home Work People II LLC

The studio for runners signed a lease.

50-01 2nd St (Queens)

4,270

North Shore-LIJ / NGKF

Lightstone Group / H. Shapiro, A. Fishbein, Winick Realty

The hospital signed a lease at Gantry Park Landing, a luxury rental building.

228 Court St (Brooklyn)

4,200

CityMD / Kristina Triglia, CPEX Real Estate

n/a / R. Condren, G. Danut, CPEX Real Estate

The urgent-care center signed a lease for a new location.

38 West 39th St

3,700

Cuban Star / RKF

n/a / n/a

The tenant leased retail space.

4714 16th Ave (Brooklyn)

3,232

Duane Reade / Louis Eisinger, Winick Realty

n/a / R. Condren, K. Triglia, G. Danut, CPEX Real Estate

The drugstore chain signed a lease for a new location.

302 Bleecker St

3,100

Paali Enterprises / Josh Siegelman, Winick Realty

ELK 300 Bleecker / Josh Siegelman, Winick Realty

The restaurant signed a lease.

257 Pacific St (Brooklyn)

3,037

Bar Method Brooklyn / Sean Phillips, Zelnik & Co.

n/a / R. Condren, K. Triglia, G. Danut, CPEX Real Estate

The fitness studio signed a lease.

108 Wooster St

3,000

Bucketfeet / M. Kapnick, B. Stiegler, SRS Real Estate Partners

108-112 Wooster St. Corp. / M. Kapnick, B. Stiegler, SRS Real Estate Partners

The shoestore signed a lease.

150 Amsterdam Ave

2,900

Elite Light & Living / n/a

n/a / RKF

The home furnishings retailer signed a lease.

1407 Broadway

2,500

Graham Shoe Corp. / Richard Smith, Winick Realty

1407 Broadway Rea / H. Shapiro, K. Hochhauser, Winick Realty

The shoe store signed a lease.

518 Broadway

2,500

Dune / RKF

n/a / n/a

The interior design company leased retail space.

261 11th Ave

2,500

Manhattan Wine Co. / R. Betesh, K. McCann, Sinvin Real Estate

WFNY I LLC / R. Betesh, K. McCann, Sinvin Real Estate

The wine shop signed a 10-year lease. The reported asking rent was $54 per square foot.

125 Wooster St

2,320

Woolrich / David Baker, Isaacs & Co.

Invesco / A. Schmerzler, C. Schwart, S. Soutendijk, C&W

The outdoor clothing retailer signed a lease for its flagship store.

220 36th St (Brooklyn)

2,306

The Fashion Chef / RKF

n/a / n/a

The bakery signed a lease.

350 Hudson St

2,161

Gregory’s Coffee / J. Gettler, M. Gorman, New Street Realty Advisors

Rector, Church-Wardens and Vestrymen Of Trinity Church / C. Owles, R. Kornblatt, J. Isbitt, Sinvin Real Estate

The coffee shop signed a lease for 1,076 square feet on the ground floor and 1,085 square feet on the mezzanine level. The reported asking rent on the ground floor was $200 per square foot.

142 West 23rd St

2,100

Naftali Group / Tom Brady, Town Real Estate

Greenhorn Development LLC / J. Pennington, Z. Nathan, Ripco Real Estate

The developer signed a lease for showroom space for a new condo building.

8-10 Avenue B

2,000

United Security NYC / David Tordjman, Norman Bobrow & Co.

Lower East Side Housing Association / Yesim Ak, Misrahi Realty

The hardware store signed a 10-year lease.

170 West 23rd St

1,600

Cookston Enterprises Inc. / n/a

Jack Resnick & Sons / n/a

The tenant signed a lease renewal.

110 East 59th St

1,600

R.A. 110 East 59th Street Operating Corp. / n/a

Jack Resnick & Sons / n/a

The tenant signed a lease renewal.

795 Columbus Ave

1,500

Yogurtland / Cindy Gluck, Gluck Realty

Chetrit Group / n/a

The frozen yogurt shop signed a lease.

90 June 2014 www.TheRealDeal.com

Retail leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

236 Third Ave

1,350

Amaaya / R. Kempner, M. Tergesen, K. Lipstein, ABS Partners

n/a / R. Kempner, M. Tergesen, K. Lipstein, ABS Partners

The jeweler signed a five-year lease.

79 Third Ave

1,200

GNC / RKF

n/a / n/a

The nutritional products retailer signed a lease.

272 Broadway

1,200

Dunkin’ Donuts / Jonathan Banayan, Winick Realty

Sidor Realty Comp. / n/a

The coffee-and-donut chain signed a lease for a new location.

50-01 2nd St (Queens)

1,059

Beans, Grapes and Leaves / Manhattan Commercial Group

Lightstone Group / H. Shapiro, A. Fishbein, Winick Realty

The coffee, tea and wine shop signed a lease at Gantry Park Landing, a luxury rental building.

27 Bedford St

1,000

ChikaLicious / RKF

n/a / n/a

The dessert shop signed a lease.

202 Elizabeth St

1,000

coop & spree / G. Schwartzman, G. Graf, NGKF

n/a / n/a

The women’s apparel and accessories retailer signed a lease for its first store.

189 Amsterdam Ave

1,000

Vanguard Wine Bar / G. Alterman, H. Abramowitz, RKF

Ogden CAP Properties / G. Alterman, H. Abramowitz, RKF

The wine bar signed a 12-year lease for its second Manhattan location.

2541 Broadway

998

Filicori Zecchini / RKF

n/a / n/a

The café signed a lease.

2285 Adam Clayton Powell Jr. Blvd

900

Brazilian Babes / Jon Kamali, Besen Retail

ABJ Properties / Jon Kamali, Besen Retail

The waxing salon signed a lease.

2423 Adam Clayton Powell Jr. Blvd

800

My Way Tax / Tenisha Davis, Exit Realty

n/a / R. Condren, K. Triglia, G. Danut, CPEX Real Estate

The tax preparer signed a lease.

501 Fifth Ave

600

Zibetto Espresso Bar / M. Kapnick, B. Stiegler, SRS Real Estate Partners

Abramson Brothers / M. Kapnick, B. Stiegler, SRS Real Estate Partners

The espresso bar signed a 10-year lease.

575 Seventh Ave

229

Muska Milano / Charles Rapuano, Winick Realty

Lechar Realty Corp. / M. Miller, K. Gedinsky, Winick Realty

The accessories retailer signed a lease.

Buys Address

Size

Buyer / Representative

Seller / Representative

Notes

110 William St

32-story, 928,000 sf office bldg

Savanna; KBS Capital Advisors / L. Grasso, S. Saslow, C. Schwatz, Hunton & Williams

Swig Equities; Dubai Investment Group / D. Harmon, A. Spies, Eastdil Secured

The property sold for $261.1 million, or $281 per square foot.

435 10th Ave

Development site

Tishman Speyer / n/a

n/a / R. Knakal, J. Nelson, Massey Knakal

The Hudson Spire development site sold for $238 million. The block-through site runs from 501-507 West 34th Street to 510-528 West 35th Street. Combined with the adjacent sites Tishman Speyer purchased from Sherwood Equities for $200 million (see below), a building of about 2.3 million square feet can be constructed.

Hudson Yards package

2 development sites

Tishman Speyer / n/a

Sherwood Equities / n/a

The properties sold for $200 million. The sites are located at the southeast corner of West 34th Street and Hudson Yards Boulevard and at West 35th Street and 10th Avenue. Sherwood Equities acquired the properties in the 1980s for $8.1 million.

29-26 Northern Blvd (Queens)

Development site

Quadrum Global; Simon Baron Development / n/a

Rabsky Group / n/a

The property sold for $54 million. A 45-story residential rental building will be developed on the site.

Construction is slated to begin later this year.

Bronx portfolio

11 apt. bldgs, 331 units total

n/a / Michael Guttman, Rosewood Realty

Mohegan Crotona Associates / A. Jungreis, M. Kerwin, Rosewood Realty

The properties sold for $40 million. The price represents a gross rent multiple of 7.4. The buildings are located at 2078 and 2074 Crotona Parkway; 2132 and 2140 Daly Avenue; 1895 Belmont Avenue; 2146 Vyse Avenue; 968, 984 and 990 Bronx Park South; and 2075 and 2079 Mohegan Avenue.

142-96 East 125th St

64,363 sf retail bldg

160 East 125th LLC / V. Sozio, S. Shkury, M. Tortorici, Ariel Property Advisors

East Harlem Abyssinian Triangle Limited Partnership / S. Shkury, V. Sozio, M. Tortorici, Ariel Property Advisors

The property sold for $39 million.

136, 140, 144 and 148 West 111th St

4 apt. bldgs, 66 units total

n/a / Aaron Jungreis, Rosewood Realty

n/a / Aaron Jungreis, Rosewood Realty

The properties sold for $24.25 million. The price represents a gross rent multiple of 13.

Upper Manhattan portfolio

3 apt. bldgs, 97 units total

n/a / P. Vanderpool, L. Sternhell, Cignature Realty Associates

n/a / P. Vanderpool, L. Sternhell, Cignature Realty Associates

The properties sold for $19.5 million. The properties are located at 1616 Amsterdam Avenue, 3694 Broadway and 561 West 144th Street.

150 52nd St (Brooklyn)

123,785 sf industrial bldg

n/a / n/a

150 52nd Street LLC / J. Nowak, H. Patel, Marcus & Millichap

The property sold for $19.5 million, or $157 per square foot.

40 Wooster St

6-story office bldg

Northwind RE LLP / Paul Popkin, The Popkin Group

40 Wooster Street Realty Corp. / K. Skarvelis, B. Chase, D. Barreto, Cast Iron Real Estate Co.

The property sold for $16.35 million, or $1,200 per square foot.

Brooklyn and Staten Island portfolio

3 retail bldgs

Crown Acquisitions / n/a

n/a / n/a

The properties sold for $15 million. The buildings are located at 2007 86th Street and 441 Rockaway Parkway in Brooklyn and 603 Forest Avenue in Staten Island.

160 West Kingsbridge Rd and 3004, 3011 and 3030-3040 Heath Ave (The Bronx)

4 apt. bldgs, 154 units total

n/a / Mike Stern, NY Standard Realty

n/a / M. Guttman, A. Jungreis, Rosewood Realty

The properties sold for $14.55 million.

161 Bowery

Mixed-use bldg

Caspi Development / Jeffrey Znaty, Kassin Sabbagh Realty

n/a / n/a

The property sold for $12.7 million.

79-89 Avenue D

1-story retail bldg

L&M Development Partners / n/a

The Fried Family / N. Tran, A. Miller, Eastern Consolidated

The property sold for $12.5 million.

1588 Amsterdam Ave

5-story, 38,381 sf apt. bldg, 45 units total

n/a / A. Doshi, S. Mehra, Besen & Associates

1588 Amsterdam Avenue LP / A. Doshi, S. Mehra, Besen & Associates

The property sold for $9.3 million, or $242 per square foot.

529 East 235th St (The Bronx)

7-story apt. bldg, 53 units total

n/a / J. Orlander, A. Taub, GFI Realty

n/a / J. Orlander, A. Taub, GFI Realty

The property sold for $9.29 million, or $175,000 per unit.

62-76 Woodhaven Blvd (Queens)

3 retail bldgs, 21,210 sf total

Woodhaven Capital LLC / A. Aderet, M. Slonim, Besen & Associates

Concetta Holdings LLC / Abraham Aderet, Besen & Associates

The properties sold for $9 million, or $424 per square foot.

90 Chambers St

5-story mixed-use bldg

Claude Castro LLC / A. Polsinelli, L. Lieberman, Eastern Consolidated

90 Chambers Street Realty LLC / A. Polsinelli, L. Lieberman, Eastern Consolidated

The property sold for $8.5 million, or $906 per square foot.

92 June 2014 www.TheRealDeal.com

B:10.75” T:10.5” S:10.25”

Round #: 1

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APPROVAL SIGNOFFS

WRM-14-021-Lions-RD-Mag_OTL.indd

Buys continued Address

Size

Buyer / Representative

Seller / Representative

Notes

3210 Broadway

6-story apt. bldg, 20 units total

3210 Broadway Associates LLC; Bcb 3210 Broadway LLC / Glenn Raff, Besen & Associates

3210 Broadway Holdings LP / A. Doshi, S. Mehra, Besen & Associates

The property sold for $8.5 million, or $431 per square foot. The price represents a gross rent multiple of 17.3.

585 West 204th St

5-story apt. bldg, 30 units total

585 West 204th LLC / Shallini Mehra, Besen & Associates

Ae 585 LLC / Amit Doshi, Besen & Associates

The property sold for $7.95 million, or $191 per square foot. The price represents a capitalization rate of 4.3 percent and a gross rent multiple of 11.8.

163 West 80th St

5-story apt. bldg, 5 units total

Yu Far Realty / n/a

Delshah Capital LLC / H. Raber, R. Modell, S. Hisrchfield, Ariel Property Advisors

The property sold for $7.65 million.

57 West 38th St

Office condo

Rigo Holdings LLC / J. Dayan, J. BenDayan, EVO Real Estate Group

57 West 38th Street Holding LLC / J. Dayan, J. Ben-Dayan, EVO Real Estate Group

The eighth- and ninth-floor office condos sold for $7.5 million.

1546 Selwyn Ave (The Bronx)

6-story apt. bldg, 69 units total

n/a / Josh Orlander, GFI Realty

n/a / Daniel Shragaei, GFI Realty

The property sold for $7.2 million, or $104,000 a unit.

2487 and 2497 Grand Ave (The Bronx)

Two 5-story apt. bldgs, 78 units total

n/a / Mike Stern, NY Standard Realty

n/a / M. Guttman, A. Jungreis, Rosewood Realty

The properties sold for $7 million.

1634 Lexington Ave

4-story mixed-use bldg

Latin Harlem Properties LLC / N. Oron, D. Chernoff, Itzhaki Properties

1634 Lexington Avenue Realty Corporation / N. Oron, D. Chernoff, Itzhaki Properties

The property sold for $7 million.

65 Nassau St

10-story mixed-use bldg

Sutton Equity LLC / n/a

Century 21 / Massey Knakal

The property sold for $6.4 million.

189 East 3rd St

6-story apt. bldg, 16 units total

189 East 3 LLC / David Scheer, Rosewood Realty

189 East 3rd Street LLC / Aaron Jungreis, Rosewood Realty

The walk-up sold for $6.2 million.

413 East 72nd St

4-story apt. bldg, 11 units total

41372 LLC / Jackie Himmelstein, Besen & Associates

9 South First Avenue LLC / Dan Shapiro, Besen & Associates

The property sold for $6.1 million, or $605 per square foot. The price represents a gross rent multiple of 20 and a capitalization rate of 1.5 percent.

361 First Ave

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

n/a / A. Doshi, I. Chhabra, Besen & Associates

n/a / Shoy McKen, Besen & Associates

The property sold for $5.6 million.

2232-2234 Davidson Ave (The Bronx)

5-story apt. bldg, 54 units total

Magen David Mgmt LLC / Amit Doshi, Besen & Associates

Prana Associates Twenty One LP / Amit Doshi, Besen & Associates

The property sold for $5.5 million, or $108 per square foot. The price represents a capitalization rate of 6.5 percent and a gross rent multiple of 7.6.

3121 Ocean Ave (Brooklyn)

Development site

Chestnut Realty / n/a

n/a / Denis Abayev, Commercial Acquisitions Realty Services

The property sold for $5.4 million.

57 West 38th St

Office condo

Rigo Holdings LLC / J. Dayan, J. BenDayan, EVO Real Estate Group

SVD Enterprises LLC / J. Dayan, J. Ben-Dayan, EVO Real Estate Group

The seventh-floor office condo sold for $3.95 million.

533 Bergen St (Brooklyn)

4-story apt. bldg, 8 units total

Brooklyn Standard Properties / n/a

n/a / n/a

The property sold for $3.25 million.

3003-3009 Ocean Pkwy (Brooklyn)

28,275 buildable sf development site

n/a / n/a

n/a / A. Svetlakou, B. Knakal, Massey Knakal

The property sold for $3.25 million, or $115 per buildable square foot.

Riverdale Funding RD closings.pdf

94 June 2014 www.TheRealDeal.com

1

5/23/14

4:12 PM

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“A New Species of School”

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“Equipping pupils to prosper in the global economy is at the core of the Avenues curriculum.”

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Other Deals Lightstone buys 130 William St. for $60M

Apple store in the works for 940 Madison Avenue A new Apple Store is headed to the Upper East Side. The electronics giant will set up shop in a 12,580-square-foot property at 940 Madison Avenue, on the corner of East 74th Street, the New York Daily News reported. The spot will mark the city’s sixth Apple store, and boasts 95 feet of frontage along Madison Avenue and includes the building’s original bank vault. Apple would not confirm the plans to the Daily News, and real estate executive Khedouri Ezair, who owns the building, declined to comment. But Bohlin Cywinski Jackson, the Philadelphia architecture firm behind the Apple store’s Fifth Avenue glass cube, filed plans to demolish a portion of the building’s interior last month.

Anthony Malkin

Empire State Realty Trust picks up ground leases for $734M

The Lightstone Group paid $60 million for a 12-story, 142,000-square-foot distressed office building at 130 William Street in Lower Manhattan, according to property records filed with the city last month. The property, located between John and Fulton Streets, is more than half vacant, according to CoStar, and could be ripe for a conversion to condominiums. Tenants include Duane Reade and insurance service provider Compass Rose Services. Triangle Assets owned the distressed property, which went into receivership in 2012, according to state Supreme Court documents.

Early last month, Triangle settled in court with their 130 William Street lender, East West Bank. Triangle must make a payment to the bank by May 30, according to the agreement. (The deal was announced after the deadline for the Deal Sheet.)

MAC cosmetics inks pricey lease in Union Square

853 Broadway

Anthony Malkin’s Empire State Realty Trust has purchased the ground and operating leases for two Midtown properties. The REIT exercised its option to purchase the ground and operating lease for 112 West 34th Street and the ground lease at 1400 Broadway for $734 million in cash, common stock and operating partnership units, GlobeSt.com reported. The two acquisitions are expected to close this summer. Under the terms of the option agreements, Empire State will acquire 112 West 34th Street’s leaseholds and fee title to a contiguous property for approximately $423.6 million, and 1400 Broadway’s leasehold for roughly $310 million, according to GlobeSt.com. (The deal was announced after the deadline for the Deal Sheet.)

The cosmetics company MAC signed a new 15-year lease for a portion of the ground floor in the Feil Organization’s 853 Broadway, fronting on Union Square South. One person familiar with the deal said would it be a record rent for the park area. MAC, represented by Robert Cohen of RKF, inked the lease last month, taking 1,600 square feet on the ground floor and a small piece of mezzanine space, a source close to the transaction said. MAC previously signed a then-record $2,700 per foot rent on Upper Fifth Avenue at 689 Fifth Avenue in 2012.

Fast-fashion retailer H&M was expected to take multiple floors in the building, but that deal collapsed last year. (The deal was announced after the deadline for the Deal Sheet.)

Friedland Properties to raze building on UES retail site

Gural-run Flatiron building adds private school

22 East 63rd Street

Landlord Friedland Properties filed plans last month to tear down a vacant, one-story commercial building as part of its Upper East Side retail project, according to Department of Buildings records.

Friedland is moving forward with its two-story expansion of its site at 702 and 706 Madison Avenue.

The neighboring structure at 22 East 63rd Street — a portion of the existing bank structure — will be demolished to make room for a single retail store. The tenant has not yet been announced. The property at 22 East 63rd Street is located in the rear of the bank, adjacent to a courtyard. The two Madison Avenue buildings, which will be connected, are slated to collectively hold 40,000 square feet in addition to outdoor space, Rick Friedland, principal at Friedland Properties, told The Real Deal.

514-518 West 24th Street

Harch Group to buy Chelsea loft building for $35M

Developer Harry Jeremias of the Harch Group is in contract to buy a three-story loft building with 49,288 residential buildable square feet for $35 million in an off-market deal, The Real Deal has learned. If the deal closes for $775 per buildable square foot, it will be one of the priciest of its kind in Chelsea. A private, out-of-state family affiliated with HDA Corporation LLC owned the property at 514-518 West 24th Street, between 10th and 11th avenues, for more than 30 years, sources said. A joint venture between JDS Development Group and Largo Investments was said to be considering buying 510-514 West 24th Street, Crain’s had reported. But the building at 514-518 West 24th Street had already entered contract with another buyer, sources told The Real Deal. (The deal was announced after the deadline for the Deal Sheet.)

Eric Gural

Private school Ecole Internationale de New York inked a 30-year lease for 15,000 square feet at a fivestory Flatiron District building operated by the Gural family. Asking rent for the space was $60 per square foot, Crain’s reported. Jones Lang LaSalle broker Sean Black represented the tenant. David Wexler, head of watch brand Tourneau, owns the building at 206 Fifth Avenue, between 25th and 26th streets. The Gural family leases the entire site, and recently extended for 75 years at the time of the lease talks with the school.

Eric Gural told Crain’s his family intends to kick off a $500,000 renovation of the building. (The deal was announced after the deadline for the Deal Sheet.)

Leasing of gym space climbs in Manhattan

To view more deals visit our website: www.TheRealDeal.com 98 June 2014 www.TheRealDeal.com

Planet Fitness

Demand for gym and workout studio space in Manhattan grew last year as the number of leases more than doubled to 22 from nine the previous year, according to Cushman & Wakefield data.

Planet Fitness, Equinox Holdings and SoulCycle were among the companies to grab space last year throughout the borough. The city’s Board of Standards and Appeals has also been granting more permits to fitness businesses. Last year, a total of 37 were approved, including 21 in Manhattan. The year before that, the city approved 24 permits for the companies. “It’s all expanding from Chelsea, Flatiron, Union Square and it mushrooms out,” Gregory Tannor of Cushman & Wakefield told the Wall Street Journal. TRD

Brooklyn’s Most Coveted Address Expansive, townhome-style condominiums in world-class Brooklyn Bridge Park.

Starting from $2 Million.

PierhouseNY.com | 718.246.4205

This advertisement is not an offering. It is a solicitation of interest in the advertised property. No offering of the advertised units can be made and no deposits can be accepted, or reservations, binding or non-binding, can be made until an offering plan is filed with the New York State Department of Law.This advertisement is made pursuant to Cooperative Policy Statement No. 1, issued by the New York State Department of Law. Sponsor: Brooklyn Pier 1 Residential Owner, L.P. 75 Broad Street, Suite 2100 New York, NY 10004. CPS-1 File No. CP113-0019

DEVELOPMENT UPDATES SALES UPDATES

NoMad

241 Fifth Avenue

Welcome to HAP Town New York Come visit our project sites in NYC

7 HAPSeven N.Y

4 HAPFour N.Y by

98 apartments, retail and office spaces

59 apartments and office spaces

3 HAPThree

N.Y

39 apartments and community facility space

10 HAPTen N.Y

Long Island City 4610 Center Boulevard The 46-unit condominium building, designed by Eran Chen of ODA-Architecture, and developed by Victor Homes, has sold out in 12 months.

The building features one-, two- and three-bedroom apartments and two floors of penthouses. Prices ranged from $820,000 for a one-bedroom to $8.15 million for the 20th-floor penthouse.

Building amenities include a 24-hour doorman, rooftop terrace, fitness center and a yoga and meditation room. CORE is the agent. Contact: www.241fifth.com.

LEASING UPDATES

Boerum Hill

316 Bergen Street

12 floor building with 105 apartments

2 HAPTwo N.Y 30 apartments and commercial space

9 HAPNine N.Y 27 apartments, commercial and community facility space

5 HAPFive N.Y by

20 apartments in a Karim Rashid Pleasure Signature Building

6 HAPSix NY by

19 apartments and commercial space with the Karim Rashid’s Diamond Signature

1 HAPOne N.Y 6 floor building with 8 apartments

8 HAPEight N.Y by

130 luxurious apartments and commercial space in Chelsea, Manhattan's trendiest location

$3,300, respectively. Building amenities include a 24-hour doorman and concierge, rooftop residents’ lounge, a fitness center, storage units, bicycle storage and on-site parking. Citi Habitats New Developments is the agent. Contact: www.packardsquare.com.

Leasing has launched at the 84-unit residential building, developed by the Naftali Group and AEW Capital Management.

The eight-story building features studios, one- and two-bedroom apartments ranging in size from 421 to 945 square feet. Rents start at $2,123 per month for studios, $2,536 for one-bedrooms and $3,520 for two-bedroom apartments.

Building amenities include a full-time doorman; landscaped roof deck with cabanas, private dining areas, outdoor showers and a BBQ; a fitness center with an outdoor workout space and yoga deck; and a media lounge. Aptsandlofts.com is the agent. Contact: www.316bergen.com.

Leasing has begun at the 26-story, 584unit residential building, developed by TF Cornerstone and designed by architecture firm Arquitectonica. The building consists of studios, one-, two- and three-bedroom apartments. Monthly rents start at $2,200 for studios, $2,800 for one-bedrooms, $3,890 for two-bedrooms and $5,705 for three-bedroom apartments. Building amenities include a 24-hour concierge, private garden, fitness center and resident club with a landscaped terrace. Marketing is being handled in-house. Contact: www.tfc.com.

Morningside Heights 1080 Amsterdam

Long Island City No. 3 at Packard Square

HAPTower NJ Coming soon!

HAP Investments LLC +1.646.559.5732 | +1.646.559.5733 347 Fifth Avenue, Suite 906 New York, NY 10016 www.hap-ny.com

100 June 2014 www.TheRealDeal.com

Leasing has started at the 88-unit luxury rental building, developed by the Ciampa Organization. The 12-story building features studio, alcove studio, one- and two-bedroom apartments with rents starting at $1,775, $2,125, $2,525 and

Leasing has launched at the 95-unit luxury rental tower, developed by Stonehenge Partners and SL Green Realty Corp., and renovated by Steven Kratchman Architects. The building features studio, oneand two-bedroom apartments that range in size from 550 to 1,200 square feet, as well as a 1,300-square-foot penthouse.

Monthly rents range from $2,500 to $12,000. The building includes a 24hour attended lobby, fitness center, media lounge and bike storage. Stonehenge is the agent. Contact: www.1080amsterdam.com. TRD

DON’T SHY AWAY FROM CONDO BUYERS. WELCOME THEM.

TEAM OF EXPERTS Tony Clintock Northeastern Divisional Manager tony.clintock@everbank.com NMLS ID: 837683 Mark Wenitzky Northeast Regional Manager mark.wenitzky@everbank.com NMLS ID: 837726 Neil Bader Area Sales Manager neil.bader@everbank.com NMLS ID: 1005678 James Dorcely Retail Branch Manager, Manhattan james.dorcely@everbank.com NMLS ID: 460196

At EverBank, we offer a dedicated team that’s focused on condo and co-op financing, with the authority to originate loans that are as original as your clients.1 EVERBANK HOME BUILDER ADVANTAGE® PROGRAM • Presale requirements as low as 35% • Will consider higher concentration limits of up to 100% EVERBANK PREFERRED PORTFOLIOSM LOANS • Mixed-use projects with up to 35% mix of commercial to residential use • Annual budgets with less than 10% reserves • Single-entity ownership limits as high as 25% We also offer buyer financing that may close prior to the project being 100% complete.

Contact Mark Wenitzky to learn more

Call 1.917.674.0199

1. Each Loan is subject to EverBank review. Qualification is individually determined for each application.

Loan applications cannot layer risk on-top of risk.

14ERM0081. NMLS ID: 399805 © 2013-2014 EverBank. All rights reserved.

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Four-bedroom, five-bath, five-story, 3,700-square-foot single-family townhouse; building features 900 square feet of exterior space, including a private garden and rooftop terrace; fully renovated building features modern amenities and radiant floors. Taxes $18,123 annually. Asking price $8.995 million; seven months on the market. (Brokers: Emily Beare and David Beare, CORE; Janice Chang, Douglas Elliman) “This was a multi-family house that was then renovated into a single-family home. They kept the façade, but then the rest of the house was a complete gut renovation. They completely recreated the space. They built in a skylight and then they put in a beautiful open staircase that looks like a work of art in the middle of the house. The light just flows down throughout the entire house. The workmanship was beautiful, as well as the materials used. Everything was very organic; it just felt very natural. And even though it was very modern, it had a very warm feel to it. It was a nice juxtaposition of having this old façade with a modern feel. I think that was a unique balance to achieve. Sometimes, in the West Village, you have these small houses that tend to be dark. But here, you walk in, and the space is completely filled with light. It was absolutely beautiful — a lot of light and air.”

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Four-bedroom, three-bath, 3,360-squarefoot pre-war building built in 1921; building features two apartments upstairs, a commercial space at ground level and two-car garage; taxes $8,200 annually; asking price $3.299 million; four months on the market.

(Brokers: Dari Litchman and Erik Serras, Ideal Properties Group)

“The building itself has a really interesting history.

It belonged to a very well known artist – Leo Bates – and his wife. The artist passed, and his wife was selling the property.

The building contains a commercial space that hadn’t been occupied as such in almost 40 years. The reason was because it was being used as a studio and storage facility by the artist. But it became sort of a legendary building in the neighborhood, and people wondered why the gates were always down.

Also, the building has a large two-car garage in the back that was used as a wood shop by a woodworker, who was good friends with the artist. The buyer was a private investor from the neighborhood who wanted to rent out the building.” – Erik Serras, Ideal Properties Group

Upper West Side $2.25 million 200 Riverside Blvd, Apt. 46D

Two-bedroom, two-bath, 1,220-square-foot unit in a condominium building, Trump Place. Apartment has panoramic protected views of Central Park, Manhattan skyline and Hudson River; building features a fitness center, 50-foot pool, on-site garage, children’s playroom, bike storage, valet service, 24-hour doorman and concierge. Common charges $1,191 per month, taxes $2,005 per month. Asking price $2.35 million; 15 weeks on the market. (Broker: Victoria Rong Kennedy of Citi Habitats represented both the buyer and the seller.)

“The seller bought the property in 2000, and since then, they never renovated anything, so the interior is very outdated. It’s Trump Place, so it’s got that style of the white marble kitchen with white cabinets. But the view is very dramatic — it has that ‘wow’ factor. We have western, southern and eastern exposure, so you can see Central Park, and in the southwest corner, you can see downtown, the Freedom Tower and Hudson River. The buyer is a doctor who works in Long Island. He saw the unit in the first week that we listed it. He liked it for the view but didn’t think it was right for him because he works long hours at the hospital and didn’t think he would have time to renovate. But four months later, after seeing everything else, he realized that the view was really special, so he went for it.”

– Victoria Rong Kennedy, Citi Habitats

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Residential market

from page 17

an exclusive agreement with a broker or are concerned that a six-month commitment to a broker is too long, said Ryan Fitzpatrick, director of sales at CORE. They may also be afraid that, even in this market, their property could languish on the market for 60 to 90 days without selling, he added.

“It’s another manifestation of this very tight inventory,” Fitzpatrick said. “Sellers realize they have a lot of sway, where there is such strong demand.”

Fitzpatrick recalled a CORE broker who was contacted by two sellers at the same Upper East Side co-op building.

One seller wanted to downsize from a two-bedroom, and the other wanted to upgrade from a one-bedroom. They sought pricing advice from the broker, but then met with

potential buyers through the doorman, cutting out the broker. Both ultimately went into contract with buyers outside of the building they found without listing their properties.

Buyers, of course, have only upside when it comes to finding a whisper listing. It allows them to dodge the competition and to avoid a bidding war.

“On the buyers’ side, there is a perception they are getting a special opportunity: a one-shot deal in which they can get in and get out, and lock it up. And they’re willing to pay a premium for it,” Fitzpatrick said.

Tamir Shemesh, a broker at the Corcoran Group, said he recalls two examples in the past month in which sellers opted not to list their units: unrelated Greenwich Village condominiums worth roughly $3 million, and $5 million,

respectively.

Shemesh said that while sellers believe they can be successful doing their own deals because of the market’s lack of inventory, brokers often still provide pricing guidelines.

“Sellers are getting high offers,” Shemesh said. “But when they price the apartment way too high, they get resistance. If they overprice an apartment, it will not sell.”

Monique Silberman, a Town Residential broker, estimated she receives about five phone calls a week from prospective buyers that she is representing who are looking for off-market listings. She said the majority of off-market deals continue to occur on those ultra-luxury properties.

“It’s sort of serendipitous the way it all works out,” Fitzpatrick said. TRD

vest equity in the site.

Zhu, who is most active in Manhattan and Queens, is also involved in another Brooklyn project, at 29 Ryerson Street in Clinton Hill. At that site he’s teaming up with Miller, who is a member of the Hasidic community and based out of Borough Park. The pair is developing hotel, office and retail space in industrial buildings.

Sources said that Miller was also gunning to buy the Dupont site. However, it’s unclear whether he has a stake in it.

The investor-developer, sources said, often finds his way into deals through the purchase of a contract, a defaulted note, or bidding on hospitals as they’re shuttering. His most high-profile effort to date was his almost-successful attempt to buy the Long Island College Hospital site in Cobble Hill for $250 million. Miller’s group was originally chosen by the State University of New York, which owns the site, but the deal collapsed. Nevertheless, Miller remains optimistic his group will prevail there, a source close to him said.

Miller, who has also acquired properties in Manhattan and Queens, launched his own firm after working with a long-time developer, Abraham Leser of the Leser Group, which sources said he still has ties to.

nitely takes time to get to know [them]. They like to work amongst themselves.”

Indeed, few have formal corporate offices. Stark and Perlmutter, for instance, for years registered their properties at a P.O. box at 199 Lee Street in Williamsburg.

A young property owner and Stark’s brother-in-law, Abraham Bernat, has a P.O. box at the same address now.

Bernat, now a major property manager himself, acquired about a dozen properties from Stark and Perlmutter between 2010 and 2013, a review by TRD found.

Another investor, Williamsburg-based Isaac Jacobowitz, has amassed a collection of nearly a dozen properties, a search of city records shows.

For example, in 2011 he snapped up 421 Union Avenue, a 29-unit rental building in Williamsburg for $10.2 million.

Stark from page 28 Perlmutter amassed a portfolio of Brooklyn buildings that at one time had about 1,000 units, played multiple roles in his various deals from moneyman to project manager. And the same holds true for others.

Three of those other players — Brunner, Bo Jin Zhu, and Chaim Miller — had a hand in the 49 Dupont Street deal in Greenpoint.

Brunner, a nimble Williamsburg-based developer, inked a contract in 2012 with Joseph Folkman, the then-owner, to buy the 10 parcels that together have about 360,000 square feet of development potential, real estate sources told TRD. Although sources connected to the deal declined to identify any of the involved parties, when the sale closed last month for $23.3 million, the title transfer revealed Brunner as the buyer.

By way of background, Brunner is not just a developer, but also a lender, providing Stark and Perlmutter $1.5 million in 2007 for the redevelopment of 100 South 4th Street in Williamsburg, which they converted into a 73-unit rental building.

And he partnered with Chaim Gross and Martin Friedman to buy 110 Green Street in 2010 for $58.2 million, where they completed construction and sold it three years later for $72 million to Meadow Partners. Brunner also owns several other buildings, including the rental 619 Hancock Street in Stuyvesant Heights and the industrial building 390 Liberty Avenue in East New York.

In addition, Zhu, a Queens-based developer, was also identified as part of the Dupont deal. Lending documents show him as an “authorized signatory” in the purchase, suggesting that he may be buying it from Brunner for what sources said was $48.5 million.

Insiders said the enigmatic Zhu, who is originally from mainland China, either has bought or plans to in-

Insular operations Insiders point out that many of these active Brooklyn developers have deep roots in their neighborhood, with several large Hasidic groups headquartered in and around Williamsburg.

And many of these players have owned land in the borough and done deals with one another for decades.

“It’s a world that once you are in, once a couple guys trust you,” you can participate, one broker source noted. “But it defi-

Morphing into titans Some of these developers are getting so large that they’re beginning to make waves in the broader real estate community.

One such developer is Simon Dushinsky, who heads up the Rabsky Group. The firm still does not have a website, but has completed buildings and filed plans for a number of big projects in Brooklyn, Queens and Manhattan.

In addition, there are some under-the-radar titans, such as Ruby Schron, David Bistricer and the Chetrit brothers, who have all come from similar worlds and managed to grow into mega-investors and developers while remaining low profile.

Shay Zach, a broker with Soho-based Epic Commercial Realty, likes to work with off-the-radar properties and developers.

“I think it’s honorable to do things without putting your name on everything. To go to work, and work, and not boast about everything you do,” he said. TRD

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Priciest Hamptons sales

from page 36

for it, particularly at the high end.”

Davis is likely hoping for something special again. That’s because Bommer put 16 Gin Lane back on the market with him — this time for $98 million — after purchasing the Lily Pond Lane property.

Price premiums Even the sixth-ranked sale, a $31.6 million deal at 19 Robertson Drive in Sag Harbor, sold by Peter Turino of Brown Harris Stevens and Harald Grant of Sotheby’s International Realty, far exceeded the priciest deals of 2012. That year, the top-dollar sale was for $28.5 million, for 322 Meadow Lane in Southampton, according to a Town & Country Real Estate report.

According to brokers, prices are soaring and top-dollar properties are moving quickly, as inventory at the top of the market is limited.

“Prices have been going up, multi-million dollar houses are being sold left and right,” said Douglas Elliman’s Margaret Stankevich, who has an $85 million listing for 9.4 acres of unbuilt oceanfront land at 2012 Montauk Highway in Amagansett. “The market is good right now, but there’s not much inventory, so if someone sees something they want, they buy.”

Owners of the priciest Hamptons estates tend to hang onto properties for a long time, generally looking to sell later in life when they’re ready to downsize or unload one of their many properties, brokers told TRD. “Sometimes people own properties for a long time and lose the passion for it,” said Anthony Cerio, a Bridgehampton-based broker with Brown Harris Stevens.

And in the highest echelons of the luxury market, sellers

can often afford to be choosy.

“When you’re trying to buy from a billionaire, they don’t need the money — it’s only really about a lifestyle change: trading up or down, or sideways,” said Davis.

While an increasing number of international buyers are active in the Hamptons residential market, all roads still lead through Manhattan, brokers told TRD. And most of those paths stem from hedge fund heavyweights, according to Paul Brennan, Elliman’s Hamptons regional manager.

“Most of the people all have ties to New York,” Brennan said. “They might be from other countries, but they are based in New York on some level. Rarely do I get a call from Moscow asking me what’s going on in the Hamptons — international buyers go to New York first and then come here.”

Still, the international buyers flocking to Long Island’s poshest corner are coming from an increasing array of countries. The Hamptons have become a destination for buyers from all over the world, both for investing and for the lifestyle, Davis said.

“I would say it’s changed in the last three or four years, the diversity,” he said. “We’ve become a destination for the world. It’s safe, it’s clean, and it’s not like other resort communities around the world.”

Luxe listings Not surprisingly, Bommer’s $98 million Gin Lane property was the priciest listing on the market in the Hamptons last month.

And the $85 million aforementioned Amagansett listing — which has been on the market for two years — ranked as the second priciest.

Elliman’s Stankevich and Scott Bartlett got the listing in December 2012, after the owner tried to sell the property off-market. At the time they took over, it was priced at $100 million.

Rounding out the top five on the listing front are a $58.5 million Water Mill estate, the $55 million Two Trees Farm in Bridgehampton, and a $30 million 19-acre farmhouse dubbed the “Sagaponack on Reserve.”

The eight-bedroom, 20,000-square-foot Water Mill home is listed by Elliman’s Brennan, Michaela Keszler and Oren Alexander, and has been on the market for more than a year at the same price. The seller, a real estate investor, listed the property because of the strong market and because the family doesn’t spend a great deal of time in the Hamptons, Brennan said. Set upon Mecox Bay and Hayground Cove, the property spans four acres — an unusually large spread for the spot.

Meanwhile, the Two Trees Farm, an equestrian estate owned by developer David Walentas of the Dumbo-based Two Trees Management Company, is an open listing that first went on the market in June 2010 asking $95 million.

The price was reduced to the current $55 million later that year. Set upon 115 acres, the spread — which is known for hosting the Mercedes Benz Polo Challenge — includes a polo field, paddocks and two farmhouse residences, according to the listing.

Of course, the ins and outs of successfully unloading a pricey property can depend on just how high maintenance on a home is, too.

Two Trees, a “humongous horse farm,” as Brown Harris Stevens’ Cerio described it, requires a “horse person with super deep pockets.” TRD

Priciest Hamptons rentals from page 37 Beachfront just the beginning These fantasy residences, which are often on the beachfront, not surprisingly offer a host of outlandish amenities.

For example, the “Sandcastle” — which has reportedly been rented in past summers by mega-celebrities like Beyoncé and Jay-Z and the Hanson brothers — has a total of 31,000-square-feet between the main and pool houses. The main house includes a screening room with a planetarium-like ceiling; a 1,500-square-foot master suite with an outdoor shower; a sports court with a moveable wall and a retractable hoop that can be used for squash, racketball or basketball; a two-lane bowling alley; an indoor half-pipe; a model train room; a children’s dance studio with a stage; and an eight-car garage with hydraulic lifts.

Similarly luxurious is the Linden Estate on Ox Pasture Road in Southampton, which is listed for $950,000 for the season. The 12-bedroom house spans 18,000 square feet on 10 acres. The estate has staff quarters, an outdoor pool, an indoor pool with slide, a spa, a grass tennis court, a paddle court, two pavilions with full kitchens and two four-car garages. It’s also for sale — for $45 million.

These kinds of properties draw wealthy families from all corners of the globe, said DePersia. They hail not only from New York City and its swankiest suburbs, but also from California, Florida and Chicago and as far as Europe, Russia, China and South America.

Timothy Hafstel, a broker with Halstead Property who is also marketing 396 Meadow Lane, said he relies on his brokerage’s network in New York City to funnel prospects, from Wall Street executives to rich foreigners, to his Hamptons listings.

This year, he said he’s noticed that many renters are interested in one or two months, rather than the full season.

“I think the last few summers, June has been kind of

106 June 2014 www.TheRealDeal.com

a bust, unseasonably cold, so they think, ‘Why waste the money, especially since the kids are still in school,’ ” he said.

“But I’ve been really busy with just July and August deals.”

summer rentals are open listings, so there is not just one listing agent. That means whoever nabs the renter gets the 10-percent commission that comes with it.

Slim pickings

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Still, there is not a lot for moneyed renters who began looking late in the season and are willing to shell out hundreds of thousands of dollars this year. Part of the reason is that many repeat renters and some aggressive first-timers made deals in the fall and early winter, before the renting season really began.

But the biggest factor hurting the inventory of priciest rentals is the hot East End sales market, most brokers said.

“The sales market was so strong this year, and because of that, the inventory of rentals has gone down,” said Erica Grossman, a broker in Douglas Elliman’s Southampton office.

“Some new owners are not putting them back on the market this year,” added Grossman, who is also marketing 396 Meadow Lane.

The average sales price for luxury properties in the Hamptons jumped 56 percent in the first quarter to $7.4 million over the same period in 2013, according to data from the appraisal firm Miller Samuel. The number of sales also leapt 58 percent from the year before.

Now that some of the rental inventory has been lost to sales, well-heeled renters must compete with each other for the thin rental offerings. That means they have little negotiating room when it comes to price this summer, said Saunders & Associates’ Cohen. Most of the high-end rental deals done this year are close, if not at, the listing rental price. “They’ve had to pay up to get them,” Cohen said.

The competition isn’t just a renter issue, either. The brokers are battling it out, too. As customary, most Hamptons

While rentals at the priciest end of the spectrum are in short supply for this time of the year, there’s a slew of properties “in the middle” of each price range that are still available, said Cohen, who declined to specify a price range.

“These are properties with three to four bedrooms in a good, but not great location. They may be a little older, with more personal stuff in them,” she said. “People aren’t coming out for those.”

One reason could be that many towns are cracking down on local laws on summer renting, keeping some potential renters from qualifying. For example, East Hampton and Southampton have long barred group rentals, or share houses, and required brokers to register their closed rental deals to make sure the local codes are being followed, said Elliman’s Mary Lappin Marmorowski. This year, Montauk is doing the same.

“We had someone from the town code enforcement stop by to make sure it’s being followed,” she said. “And most owners don’t want groups anyway. You see it all the time on the computer: ‘No groups.’ ” Another reason for slower demand for the more reasonably priced rentals is that there is no post-Hurricane Sandy boom like last year, said Halstead’s Hafstel. In 2013, vacationers who typically summered at the Jersey Shore or on Fire Island couldn’t book rentals at those beaches because of the storm damage, and instead overwhelmed the Hamptons, taking up the more affordable rentals there.

“We don’t have the feeding frenzy as last year,” he said.

“It will be interesting how it nets out this year.” TRD

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Hamptons’ biggest brokerages For instance, Gicking said a client recently bought a $3.5 million home in Amagansett with plans to rent it for $250,000 for 10 weeks this summer. While in past summers that rental price would have been attainable, it’s not a sure thing this year, he said.

Without the guarantee of that cushion, Gicking added, some sales could be jeopardized.

Impressive indies For all the advantages a city brand can convey, some independent local firms also showed they could go toe to toe with the bigger players. Joining Town & Country in the top five on TRD’s ranking was Saunders & Associates, the fifth-largest firm.

Town & Country’s Desiderio said that a looser approach can stimulate entrepreneurship.

“Certain agents really thrive in a hyper-structured environment, and so they should stay with the corporates,” she said. “Our motto is ‘less is more.’ It’s not about cubicles here.”

Unlike, say, Elliman, Town & Country also doesn’t recruit many neophytes: Only three of the 17 agents Desiderio hired this year are first-timers. That’s because they usually have an 80 percent dropout rate, she said.

But a slight increase was necessary in part to meet the demand for homes priced for less than $1 million on the North Fork, where the firm has two of its eight offices, Desiderio said.

Meanwhile, Saunders & Associates added 24 agents this year, bringing it up to 128. Company founder and head Andrew Saunders said that measuring firms by their agents alone is limiting. He maintained that in the middle of last month the firm had 353 exclusives worth about $1.15 billion.

from page 34

Relative Hamptons newcomers also made inroads this year.

Nest Seekers International opened its first Hamptons office in 2011. This year, it charts at sixth place, around where it has hovered for the last few years. But its roster of agents has expanded sharply, with 106, up from 49 last year, for the biggest spike on the list.

Some of those new agents were needed to staff a new Westhampton office that opened in January. That office joined the firm’s Bridgehampton outpost, which cut its ribbon last winter.

Geoff Gifkins, Nest Seekers’ regional manager, said the Westhampton office would be key to increasing business because the area is seeing an uptick in interest, with properties there relatively undervalued. He said Westhampton’s oceanfront Dune Road is primed for new development.

Plus, as complaints mount about traffic on Route 27, Westhampton’s closer proximity to Manhattan — it’s about 80 miles away to East Hampton’s 100 — has become a huge selling point, he said.

Gifkins added that having just two Hamptons offices is a blessing, because the company, unlike some larger firms, won’t be saddled with the debt of underperforming offices.

“All our offices are profitable,” he said.

Halstead, another relative East End newcomer, meanwhile, also upped its headcount slightly, to 36 in 2014, from 30 in 2013.

Halstead, which has a major presence in New York City, first put down roots in the Hamptons in 2011 with the purchase of Devlin-McNiff, a local firm. It has a pair of offices on the South Fork, in Southampton and East Hampton.

In addition, Daniel Gale Sotheby’s International Realty, which has four North Fork offices, increased its headcount. The Long Island-based Sotheby’s franchise claimed eighth place this year with 48 agents, up from last year’s 41.

Daniel Gale was also responsible for more than 40 percent of the market share of properties priced at $2 million and up in the past year on the North Fork, claimed Carol Tintle, its regional manager.

Most North Fork buyers want to be on Peconic Bay, added Tintle, who lives on the South Fork, but she said that Greenport fixer-uppers are trading, too.

As some firm grew in size, some clearly lost ground.

Century 21 Albertson Realty, another North Fork specialist, continued its slide, from 36 agents in 2013 to 28 in 2014, after a dip in 2012. A message left for Tom Scalia, its owner, was not returned.

But with gains at the other nine top firms, the summer buying and selling seasons is looking strong, said Anthony DeVivio, Halstead’s Hamptons director.

“Prices are close to last year and holding,” he said. “It’s a nice, orderly market.” TRD

he said. “A lot of what this new administration has been talking about is stuff we pioneered, so we think that we are in a good position.”

Specifically, Dunn has developed projects for formerly homeless individuals, those with special needs and workforce housing, as well as mixed-income housing. Most recently, the firm completed King Garden Seniors, a 59unit low-income senior housing project in Brownsville,

Brooklyn, for both residents with severe medical conditions and healthier elderly residents.

Dunn noted that de Blasio has proposed so much new construction — 8,000 new units a year —that there will be plenty of room at the table for affordable developers of all sizes.

“We’re not looking to grow,” Dunn said. “So, how have I been preparing? I’m not. We are already doing what this mayor has been articulating as his vision.” TRD

Saunders, which has two offices, is now planning a third, in East Hampton — a 5,200-square-foot space at 26 Montauk Highway — this fall. Eleven more agents will likely join around then, he said.

Saunders noted that homes priced for less than $2 million in the woodsy Springs section of East Hampton are popular.

In general, he said the spec-home market has rebounded nicely, adding that his firm has a 10-person team dedicated to marketing them.

But trophy homes are still selling for below asking prices, though the discount has narrowed to 10 percent now, versus 50 percent in 2009, he said.

Newcomers coming up

Affordable housing from page 52 housing throughout the five boroughs. It currently has nearly 1,000 units under construction.

When asked how he is positioning his firm to get a piece of the coming wave of new-construction affordable housing, Dunn said, “we’re doing what we have always done: We’re buying land and assembling sites.”

“When I founded the firm, part of our mission was to create new models of affordable and supportive housing,”

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Commercial market

from page 24

has seen recent activity that could presage a shift. “In general there is upward pressure on pricing but it is not dramatic…yet.”

Midtown South The average asking rent over the past year has been more volatile in Midtown South than the other two Manhattan markets. It declined last month by 26 cents per foot, to settle at $55.89 per square foot. That was the fifth time the asking rent declined over the past 12 months, following a pattern of rising substantially, then retreating a bit, then rising again, as part of an 8.5 percent increase in asking rents over the past year.

Meanwhile the availability rate tightened by 0.1 point to 9.1 percent in the past month, the Colliers figured showed.

Yelp was poking around for a sizable block of space in the market, which could further tighten the area. The online reviews site was eyeing a 140,000-square-foot lease for two floors at 11 Madison Avenue, between 24th and 25th streets, The Real Deal reported.

Following a flurry of new listings in April, very little in the way of large spaces hit the Midtown South market last

month, a review of information in CoStar showed.

The largest new space was for 43,000 square feet, available on a portion of the fifth floor at the 561,271-square-foot office building 28 West 23rd Street, located between Fifth and Sixth avenues, as a sublet from tech firm AppNexus, according to CoStar. A Newmark team has the listing.

“Midtown South’s rents and availability rates remained steady,” Cheng said.

Even as Durst and the Port Authority were cutting asking rents at 1 World Trade, indicating weak demand for the area, Brookfield Office Properties snagged Time Inc. for about 691,000 square feet at 225 Liberty Street, known as 2 Brookfield Place.

The result in the leasing statistics was mixed. The average asking rent declined sharply, by $2.46 per foot to $48.53 per foot last month, the largest monthly drop in at least a year, Colliers figures showed.

But at the same time, the availability rate declined sharply, in part because of the Time lease, falling by 0.5 points to 13.3 percent, the lowest it has been since 2011.

“It is not a simple narrative,” David Cheikin, vice president of leasing for Brookfield Office Properties, said. “We believe we have created a real amenity package to differentiate ourselves from the rest of the market.”

The Downtown market was attracting both large and small creative tenants. A music-recording firm for the television and advertising world, Man Made Music, inked a long-term lease recently for 10,533 square feet in the penthouse floor at 50 Broad Street, a 272,260-square-foot tower, information from CoStar revealed. CoStar showed the deal was made with the rent at $45 per square foot.

Man Made Music, represented by Murray Hill Properties’ Pamela Title, will relocate from a smaller Midtown space in 16 West 46th Street. The tenant needed large column-free space that was quiet, which was a challenge to find, even in the market’s most modern buildings, Title said. In fact, often the older buildings have the right conditions.

“The Downtown buildings are not cookie-cutter buildings,” Title said, and that was good for tenants like hers, offering opportunities to find spaces that work for them, like the penthouse at 50 Broad, built in 1913. TRD

because they lost a bidding war, or waited too long to make an offer. If a property sells quickly, and the seller thinks that means it was mispriced and should have been priced higher, “I say to the seller, ‘Trust me, your property was priced right, and that is the main reason it sold. Quick sales velocity does not mean your property is worth $300,000 more,’ ” she said.

The properties Muss sold in the last year were listed for one to three weeks, she said, while her overpriced listings sold only once they were reduced to the “correct” price.

Brokers agreed that as long as agents do their homework, underpricing should not be a factor, especially since it is in the best interest of both the seller and the listing broker to

maximize the price of a property.

Still, underpricing does occasionally occur, either because a broker is inexperienced, or as a result of extenuating circumstances. “I’ve seen [a property] go for millions of dollars less than it deserved. And the seller was sophisticated, and the only thing I could think of was that they needed to sell it immediately,” Olshan said.

Ultimately, it is the market that determines the price.

“It’s a difficult situation because pricing is very arbitrary, and we really never know at what price something will sell,” Fox said. “It’s an instinctive kind of feeling, and we’re not always right.” TRD

Downtown

Upset sellers from page 40 enon. But complaints are becoming more commonplace, because in today’s market, many properties are sold days after they are listed — a function of educated buyers dealing with short supply.

“The reality of pricing in today’s market is that proper pricing will generally lead to a fast, quick sale,” Muss said. “That is how buyers purchase properties today. They don’t wait to make decisions, because they will lose, and yet at the same time, buyers will not overpay in this market.”

In fact, Muss said her experience shows the most serious buyers are consistently the ones who act first. Familiar with the terrain, many have either lost out on a property before,

Office shuffle from page 44 buildings,” he said, “not necessarily glass and steel.”

Sony sold its building to the Chetrit Group last year for $1.1 billion and signed a lease for nearly 548,000 square feet at 11 Madison.

75 Rockefeller Plaza

Scott Rechler’s RXR Realty is starting from the ground up at 75 Rockefeller Plaza. The company is shopping for tenants to fill its entire 623,000-square-foot building, which will be empty once Time Warner’s master lease at the 33-story tower rolls over in July.

RXR signed a 99-year leasehold last year with the building’s owner, Egyptian billionaire Mohamed Al Fayed, and will shell out more than $100 million to reposition the property for higher rents.

“It’s a major renovation of the asset, well in excess of $130 million in capital improvements,” said William Elder, RXR’s executive vice president and managing director of its New York City division. “Basically 110 June 2014 www.TheRealDeal.com

Above, Mitch Rudin, a top executive at Brookfield Office Properties, which owns 225 Liberty Street. Below, Egyptian billionaire Mohamed Al Fayed owns 75 Rockefeller Plaza.

there won’t be anything remaining except for the façade, which has landmarked status.

New windows, soup to nuts.

It’s going to be a full redevelopment delivered to market for tenants up and running for the first quarter in 2016.”

Time Warner left the building in the early 2000s when construction on its Columbus Circle headquarters was completed. The company has managed the Rockefeller Center property since 1993 and subleases to a number of tenants, including the Warner Music Group, which last year inked a deal to take 288,250 square feet two blocks west, at the Paramount Group’s 1633 Broadway.

Warner Music was paying rents at Rockefeller Plaza in the $40s, according to news reports. Elder said it was premature to talk about asking rents, and added RXR is eye-

ing large tenants whose leases are expiring in competitors’ buildings before focusing on signing smaller leases.

“We’re in the market right now targeting larger tenants. It will be a bit of time before we can start the renovation, which will take 15-plus months,” he said. “The planning stage for a move of multi-hundred-thousandfoot occupancy by requirement is something that takes years to plan for. It’s not something that just happens overnight.”

1155 Avenue of the Americas Another Sixth Avenue property that will have a large void on its hands is Durst’s 790,000-square-foot tower at 1155 Avenue of the Americas.

The building’s largest tenant, the white-shoe law firm White & Case, signed a 440,000-square-foot lease early last month four blocks north at Rockefeller Group’s 1221 Avenue of the Americas, otherwise known as the McGraw-Hill Building.

White & Case has about 280,000 square feet at 1155, according to Costar, and the building currently has roughly 37,000 square feet available.

The McGraw-Hill Building itself struggled to replace a large tenant when the French bank Société Générale signed a deal in 2010 to decamp to the Brookfield’s 245 Park Avenue. The company signed its lease for about 442,000 square feet on Park Avenue, leaving behind a 500,000 square foot empty block before McGraw Hill landed White & Case. TRD www.TheRealDeal.com January 2012 00

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Alicia Glen

from page 49

during the financial crisis, when Goldman Sachs became the poster child for everything wicked about Wall Street.

“There were some dark days,” she said, “when you come home and the doorman looks at you like you’re an evil squid.”

But Glen’s kinship with the business world and her relationships with several top real estate leaders will allow her to put together deals and raise money to meet the administration’s development agenda, sources said.

Before moving to City Hall, Glen was a trustee of Citizens Budget Commission, a nonprofit group that focuses on the city and state budget, along with a list of industry heavyweights including Larry Silverstein, Related Companies’ Bruce Beal Jr., and Brookfield Office Properties’ Dennis Friedrich, according to information services platform RelSci. Vornado Realty Trust’s David Greenbaum is a member of the commission’s executive committee. And Glen and Boston Properties’ chairman Mort Zuckerman both serve on the board of directors of the nonprofit Fund for Public Schools.

Those who have worked with Glen said she was a skilled problem solver who would be able to deal with the constraints of working in the public sector.

“She looks at how to tackle some of these problems with limited public funds,” said Rick Lazio, a former congressman who now heads the affordable housing practice at law firm Jones Walker and served with Glen as a trustee at Enterprise Community Partners, a nonprofit housing finance organization. “She is an assertive person, so she won’t hesitate when she needs something from the private sector.”

For his part, de Blasio told the ABNY crowd that Glen “set the pace already with extraordinary energy.”

“Imagine being the person,” he continued, “who every day walks into City Hall and greets the smiling mayor who says, ‘How are you doing on the 200,000 units of affordable housing?’ That’s Alicia’s job, but she rises to the challenge — never seen her sweat, I can tell you that much.”

It’s unclear who else was on the mayor’s short list for the deputy mayor position. On the flip side, de Blasio may not have been Glen’s first choice for mayor. In December 2012, she donated $1,000 to Bill Thompson’s mayoral campaign, campaign finance records show. Six months later, Glen coughed up just $250 for de Blasio.

“I didn’t officially support anybody,” Glen said. “I know a lot of people who knew Billy, and I know a lot of people who knew the mayor. I’ve been in Democratic politics my whole life.”

She’s also been a staunch supporter of city comptroller Scott Stringer, with over $7,700 in donations to him over the last 25 years. Glen is now in talks with Stringer, she said, to figure out how the city’s pension funds, which the comptroller oversees, can be useful to the mayor’s housing agenda.

She said her decision to take the new job was made easier by her previous experience in the public sector. “I knew what I was getting into,” she said.

Managing industry pushback A central component of the administration’s affordable housing plan is, of course, mandatory inclusionary zoning, a proposal that many in the development community are concerned about because it requires new residential developments in rezoned areas to include some affordable housing.

For example, Real Estate Board of New York president Steven Spinola has suggested that the policy could stymie development. “It is unreasonable to assume builders will continue to build regardless of growing costs and difficulties,” Spinola wrote in a December op-ed in Real Estate Weekly.

In addition, affordable housing developer Jonathan 112 June 2014 www.TheRealDeal.com

Rose, a Glen supporter, said, “The problem with relying on mandatory inclusionary zoning is that only the hottest neighborhoods get affordable housing.”

He suggested that developers pay into a fund in lieu of building affordable units, a system similar to the one used during the development of Battery Park City. That fund, Rose said, allowed for a large amount of affordable housing development in the outer boroughs.

While that policy isn’t up for negotiation, Glen has been trying to make clear her intent to work with the industry.

In March, she invited several top developers to City Hall, including Extell Development’s Gary Barnett, Durst

vying to buy it and thus maintain its affordability.

Meanwhile, of the top executives under Glen’s jurisdiction, Kimball is one of the few that survived the transition from the Bloomberg administration. The ouster of Marc Jahr, the former president of the Housing Development Corp., was particularly contentious, according to a recent report by political website City & State. Jahr was widely thought of as both smart and easy to get along with, sources told TRD. Despite protests from several members of de Blasio’s transition team, Glen made the decision to remove him, City & State reported. Jahr was replaced by Gary Rodney of affordable housing developer Omni New York.

But Glen insisted that there was “nothing unusual about turnover at the top of an agency,” noting new hires such as Vicki Been at HPD and Carl Weisbrod at the City Planning Commission.

“As the mayor likes to say, ‘there was an election,’ ” she said.

A 10025 lifer

Citi Bike was another major Goldman investment under Glen’s watch.

Organization’s Douglas Durst and Tishman Speyer’s Rob Speyer to discuss the implications of the new housing plan on their business. And in April, Glen met with Forest City Ratner CEO MaryAnne Gilmartin to discuss the possibility of additional housing subsidies for affordable units at Atlantic Yards, according to the New York Times.

Glen also said the City Planning Department launched a study early last month to determine which areas are ripe for rezoning, and is expected to report back in three months.

Razor-sharp transactor Glen’s agency portfolio includes the City Planning Commission, the New York City Housing Authority, the EDC, the Landmarks Preservation Commission and the Office of Media and Entertainment.

“It’s helpful for those at each of these agencies to speak to someone who can marry the holistic view with getting things done,” said EDC president Kyle Kimball. While at Goldman, Glen was “central in getting many of our projects across the finish line,” he said. “She is a razor-sharp transactor, but she can also see the big-picture policy agenda.”

Kimball said that since landing at City Hall, Glen had been “instrumental” in getting the EDC $100 million from the city’s budget to build 500,000 square feet of industrial manufacturing space at the Brooklyn Army Terminal in Sunset Park.

Shortly after taking office, Glen and her team — her chief of staff is Goldman alum James Patchett — also initiated talks with Two Trees Management over their redevelopment of the Domino Sugar Factory in Williamsburg.

The new administration cut an 11th-hour deal with the developer to include 40 more permanently affordable housing units.

Glen’s latest challenge is trying to broker a deal between lenders and tenants at Stuyvesant Town–Peter Cooper Village, which has thousands of rent-stabilized apartments. CWCapital, which represents a series of trusts that hold a $3 billion first mortgage on the property, appears to be gearing up for the sale of the complex to a new owner, although the tenants’ association has been

Glen lives in a 1910 prewar building on West End Avenue with her husband, attorney Daniel Rayner, and her two children.

“I wonder sometimes if this is going to make me seem really uncool,” a grinning Glen said. “But I was born in 10025, and I live in 10025.”

“I lived in Tribeca before anybody lived in Tribeca, so I’m not a complete nerd,” she added, noting that she lived in the neighborhood for a year after college.

While she said she can’t see herself leaving the Upper West Side, she is “jealous of new construction and central air.”

But if she did want to move to Tribeca, say, the very real estate forces that she’s working on in City Hall would come into play. Many of the neighborhood’s new condos are going for north of $3,000 per square foot, partly due to the skyrocketing price of land across the city and especially in Manhattan, where dirt can cost up to $800 a foot.

These prices force developers looking for a decent return to eschew rentals and instead build condos, which are trickier to subsidize as affordable housing units. But Glen said that from the administration’s point of view, spiking land prices aren’t a bad thing, and can even help it meet its housing goals.

“We want markets to stay hot,” Glen said. “That’s good for us. The more people want to build, the more there is to talk about the percentage of affordable housing, and the more the industry is happy to engage in these conversations. Right now, what appears to be the insatiable appetite for New York real estate is something we completely embrace.” TRD CORRECTIONS A N D C L A R I F I C AT I O N S In the May magazine story “Big firms, big listings,” TRD incorrectly stated the name of a firm. The correct name is Coldwell Banker The Bellmarc Group.

In the May magazine story “Shaking up the middle,” TRD mistakenly excluded DJK Residential from the ranking.

According to On-Line Residential, the firm had 11 listings worth $9.8 million on March 30 and had 57 brokers. In addition, TRD had the incorrect number of listings and dollar volume of listings for Warburg Realty. The correct number of listings is 65, and the correct dollar volume is $166 million.

In the May “At the Desk of” feature, the creator of the “Queen of the Night” show at the Paramount Hotel was misidentified. His name is Randy Weiner. www.TheRealDeal.com January 2012 00

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have started to scale back concessions, in the buildings he handles, some of them large rentals, “many more have kept concessions on the table, and leasing activity within those buildings is far greater than those without.”

“Buildings are now releasing inventory much further out than they used to,” Oh said, noting that it may be an indication that landlords are nervous about the market. “Most buildings release inventory with move-ins from immediate to one month out. Now buildings are releasing inventory out to August and September. That’s something new.”

In addition, the owners of those buildings are offering concessions on the later move-in dates, he added.

“Every summer these incentives tend to go away, but it doesn’t appear to be occurring as quickly this year,” Oh said last month. “It’s worth keeping an eye on.”

“It becomes rolled into the cost of doing business, as opposed to lowering rent,” Oh added.

One area where there is a sharp drop in OPs from just a few months ago is the Financial District, because landlords there believe demand is strong enough to avoid the incen-

tives route, sources said.

Oh said he expects more landlords to do away with OPs in the coming months, as many already do much of their marketing in-house. He noted that he would prefer a more traditional leasing market in which “fee versus no-fee is not even a question.”

“If you work with a broker anywhere else in the world, [the tenant] will pay that broker a commission for their work,” Oh said. “If OPs didn’t exist, the question of ‘fee or no-fee’ wouldn’t even come up. I honestly believe that’s where the majority of the negativity toward brokers comes from.” TRD

Hamptons hotspots from page 38 Last summer, the resort, which dates back as far as the 1920s and most recently operated as a timeshare, was purchased for $25 million by New Jersey developer and president of Metrovest Equities, George Filopoulos.

Filopoulos quickly brought on Jennifer Oz LeRoy, of Russian Tea Room fame, to open the Seawater Grill at Gurney’s Montauk, with chef Seth Levine, and began renovations.

(The hotel’s previous restaurant, which was on the beach, was destroyed during Hurricane Sandy.)

Filopoulos renovated 38 of the resort’s 109 guest rooms, which range in price from about $300 a night for a studio to $950 a night for a private cottage, in time for this season, and plans to continue upgrades until he sells the property.

At the time of the purchase, Filopoulos said he wanted to sell in 2018.

The renovation frenzy in Montauk reflects earlier moves in other parts of the Hamptons, albeit on a more opulent (and less secretive) level.

Early in 2013, for example, the luxurious 22-room Topping Rose House opened in Bridgehampton after a $12 million renovation, with room rates ranging from about $950 to $3,000 per night. Backed by investors like Bill Campbell, a senior adviser to JPMorgan Chase CEO Jamie Dimon, former Cartier head Simon Critchell, and celebrity chef Tom Colicchio, who runs the hotel’s restaurant, the spot is expected to be a big draw again this season.

Few other East End hotel deals closed in the last year.

But several properties recently hit the market, so there are some potential deals being primed in the pipeline.

For example, TRD reported in December that a portfolio of three Southampton hotels — the 32-room Capri Hotel, the 62-room Atlantic Hotel and the 40-room Bentley Hotel — hit the market with hopes of fetching as much as $20 million.

A partnership between hotel investor Steven Kamali, the former owner of Montauk’s trendy Surf Lodge, plus David Edelstein and Jackie Mansfield, the owners of the W South Beach, put the trio of hotels on the market with the commercial brokerage HFF. But the sellers are still hunting for a buyer.

Restaurant debuts In the Hamptons, restaurateurs and hoteliers, of course, often wear the same hat — or at the very least operate together — like at the Topping Rose, where Colicchio is an investment partner, and Gurney’s, where Filopoulos opened the Seawater Grill with LeRoy. But this season, small stand-alone restaurants in Sag Harbor are also commanding the big rent premiums. On Main Street in Sag Harbor, they are going for about $60 a square foot, compared to $40 to $50 a square foot last season, according to broker Hal Zwick of Town & Country’s East Hamptons office.

This spring, Zwick handled leasing for the owner of Madison and Main there. The 2,500-square-foot space went to Doppio East, an Italian restaurant, which has three

114 June 2014 www.TheRealDeal.com

Top, The high-tech spin studio Peloton opened in Tiffany’s old space on Main Street in East Hampton. Bottom, Gourmet market Citarella in Southampton just off Main Street is new this season.

other locations in New York City, Long Island and Connecticut. Zwick declined to reveal the exact rent.

Other new eateries to open this season include Westlake Fishhouse in Montauk, by chef Larry Kolar, and a second incarnation of Midtown Manhattan’s Harlow by restaurateur and former Nobu partner Richie Notar, in Sag Harbor.

Zwick said that the restaurant market remained strong over the last year, adding that “the economy has improved and people feel comfortable investing money again.”

Retail riches Main Street in both East Hampton and Southampton remain the top shopping districts in the Hamptons, and both strips are seeing a slew of new shops.

Perhaps the most interesting and unusual East Hampton retail lease this season came from the high-tech spin studio Peloton, which uses video cameras to beam exercise instructors into the homes of customers following along on their own Peloton bikes.

The exercise studio took the 2,900-square-foot former Tiffany’s storefront on Main Street for the summer, beating out Apple and J. Crew in a bidding war, sources said. Previous reports stated that landlord David Fink was asking $425,000 per year, but a broker close to the deal said that the ask dropped to $375,000 — or roughly $130 a square foot. The source said that Fink did not use a broker.

But Zwick said that this season has been “incredibly strong.”

“We have retailers lining up to open here, lots of longterm leases and we are even seeing some bidding wars,” he said.

That was not the only tony retail to turn over in East Hampton this past off season.

The town saw cashmere retailer Christopher Fischer close shop. The boutique is being replaced by an outpost from designer Lisa Perry, who has a flagship store on Madison Avenue. Perry paid $270 a square foot for the 1,860-square-foot shop, according a broker familiar with the deal.

In addition, the 1,500-square-foot Juicy Couture on Newtown Lane in East Hampton has become a Kate Spade.

However, since the two brands were until recently owned by the same umbrella company, the lease did not need to be renegotiated. Sources say the company is paying as little as $100 per square foot.

Just down the street, fashion designer Catherine Malandrino has been replaced by Zimmermann, a high-end swimwear boutique. Zwick negotiated the lease, which another source said went for approximately $160 per square foot.

Zwick also saw something new for the East Hampton retail market: Newtown Lane is pulling in prices nearly as high as Main Street. “Something new is happening in East Hampton,” Zwick said. “People are calling me, and the first thing they ask for is space on Newtown Lane.”

He added that the popularity of Newtown Lane is being driven by a cluster of hip designers, drawing the younger crowd off of Main Street.

Meanwhile, in Southampton — where asking rents average about $70 to $125 per square foot on Main Street — the Kardashians of reality TV fame signed a 600-foot lease for their designer clothing store Dash on Jobs Lane.

Restaurateur and local landlord Irma Herzog, who runs the nearby American bistro Driver’s Seat, leased the space to sisters Khloé and Kourtney — much to the disdain of Southampton’s press-sensitive locals.

But a much larger and more significant deal went down in Southampton just off Main Street this spring, also without a broker. The gourmet market Citarella converted an 11,000-square-foot mini-mall into a high-end grocery. Citarella purchased the building from unnamed owners. The sale has not yet hit public records.

Meanwhile, in Water Mill, home-furnishing retailer West Elm is opening its first Hamptons outpost this month.

The 7,120-square-foot store was Citarella’s former home in the Mill, previously known as the Water Mill Shoppes.

Retail brokerage Ripco Real Estate handled the deal and has recently partnered with shopping center developer RD Management to manage the site.

Zwick added, however, that while a lot of great leases have been signed this year, few of them had “the ‘wow factor’ ” of previous years. TRD

www.TheRealDeal.com January 2012 00

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Professional Women in Construction hosts “Meet the Real Estate Industry,” a business networking event. Guests include Margie Russell, executive director at New York Association of Realty Managers; Ira Meister, president of Matthew Adam Properties; Carl Chastain, director of market development at Honest Buildings, and John Janis, property manager at Stillman Property Management. A buffet dinner is included and a cash bar is available. 5:30 p.m. to 8 p.m. Club 101, 101 Park Avenue. Fee: $85 for members, $95 for nonmembers, $100 at the door. Information and registration: www.pwcusa.org/ny.

9

The Center for Architecture presents the fifth part of its professional practice series, “ALT_Finance: From Crowd Funding to VC for Architecture.” Amanda Schachter, a principal of SLO Architecture, will be the speaker. 6 p.m. to 8 p.m. The Center for Architecture, 536 LaGuardia Place. Fee: Free for members, $15 for nonmembers, $5 for guest of another registrant. Information and registration: cfa.aiany.org.

10

The Real Estate Board of New York hosts its Residential Brokerage Division’s Owner/Manager Luncheon. Steve Cuozzo, real estate columnist for the New York Post, will moderate a panel discussion, “The New NY: Streetscapes to Skylines.” Panelists include Bruce Eichner, founder and chairman of the Continuum Company; David Picket, president of Gotham Organization and CEO of Gotham Developers; Daria Salusbury, senior vice president of the Related Companies, and Michael Stern, founder of JDS Development. 11:45 a.m. to 2 p.m.

New York Athletic Club, 180 Central Park South. Fee: $40. This is a members only event. Information and registration: www.rebny.com.

12

The Center for Architecture presents an opening night reception for its latest exhibition, “Open to the Public: Civic Space Now.” The exhibition focuses on the importance of public space in urban life, and considers the impact of global and digital communication, as well as political demonstrations, on the purpose of public space.

The exhibition will also explore issues of management, control, and surveillance. 6 p.m. to 8 p.m. The Center for Architecture, 536 LaGuardia Place. Fee: Free. Information and registration: cfa.aiany.org.

17

The New York Building Congress hosts its Construction Industry Breakfast Forum.

Featured speakers include Joan McDonald and Polly Trottenberg, commissioners of the New York State and City Departments of Transportation, respectively. 8 a.m. New York Hilton Midtown, 1335 Avenue of the Americas. Fee: $85 for members, $150 for nonmembers. Information and registration: buildingcongress.com.

118 June 2014 www.TheRealDeal.com

CALENDAR 1 2 3 4 5 6 7

17

New York Passive House hosts the NY14 Passive House Conference and Expo. The event will showcase presentations of high-performance and low-energy construction, with a focus on apartment buildings, schools, shops and office buildings by leading practitioners from across the globe. 8 a.m. to 6:30 p.m. Metropolitan Pavilion, 125 West 18th Street. Fee: $195. Information and registration: nypassivehouse.org.

17

The Real Estate Lenders Association presents its year-end New Jersey social and wine tasting.

6 p.m. to 9 p.m. Meadow Wood Manor, 461 Route 10 East, Randolph New Jersey. Fee: $100. Information and registration: www.rela.org.

8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

18

The Real Estate Board of New York’s Residential Brooklyn Committee hosts the REBNY Brooklyn Cocktail Party. Evening includes two drinks with purchase of ticket, hors d’oeuvre, music and networking. 6 p.m. to 9 p.m. Brooklyn Winery, 213 North 8th Street. Fee: $25, members only. Information and registration: www.rebny.com.

19

The Association of Real Estate Women presents its tri-state CREW inter-chapter dinner, “Networking Across State Lines.” Event includes a cocktail reception and full dinner. 6 p.m. to 8:30 p.m. Vermilion Restaurant, 480 Lexington Avenue. Fee: $110. This is a members only event. Advance registration by June 15 is required. Information and registration: www.arew.org.

26

CapRate Events hosts the New York Summer Apartment Summit. Speakers include Ryan Severino, senior economist and associate director of research at Reis Inc.; Matthew Baron, president, Simon Baron Development; Rob Neiffer, asset manager, Invesco; Joseph Cohen, principal and cofounder, East River Partners; Nicholas Kotsonis, managing member, the Kotsonis Organization; Adam Mermelstein, managing member, Treetop Development, and Mitchel Maidman, CEO of Townhouse Management. Topics include multi-family investment, development and financing and burgeoning submarkets in Manhattan, Brooklyn and Queens. 7:30 a.m. to 3:30 p.m. The Loeb Central Park Boathouse, East 72nd Street and 5th Avenue. Fee: $395. 25 percent discount for registration of two or more. Information: cre-events.com.

26

The Institute of Real Estate Management Greater NY Chapter and BOMA-Long Island host a Joint Annual Golf Outing. Event includes brunch, a shotgun tee-off and cocktail reception and dinner. 11 a.m. to 6 p.m. Harbor Links Golf Course, Port Washington. Fee: $275 as an individual golfer, $100 for dinner only.

Sponsorship opportunities available. Information and registration: www.iremnyc.org.

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WE H E A RD

Broadway sleeps in Upper Manhattan

Performers moving north get a helping hand from brokerages dominated by actors

▼

W

hen the curtains go multiple roles for absent cast members — and as an unBohemia, a brokerage that handown each night on derstudy for Apollo Creed. Gibson and a roommate took a dles sales and rentals from Inwood two-bedroom pad in April.

Broadway, it’s exit, stage north. to the Upper West Side, has swelled to LaMagna, who studied with Gibson at the Boston Con- 68 agents from 42 in January, and 49 of That’s because a rising number of New York’s performers are calling Upper servatory , said actors need a break from cramped theaters those agents have theater backgrounds.

Manhattan home, helped by a collection of in noisy Midtown. “Up here, there are a bunch of parks,” Bohemia’s agents aren’t the only ones brokers who share stage backgrounds. she said. “It just feels more open, and you have a little more who’ve donned greasepaint, nor are they New York’s Broadway scene is “a very tight- breathing room.” alone luring Broadway talent Uptown. knit community,” said Brian Letendre, an agent Bohemia co-founder Sarah Saltzberg, who made her City Connections Realty broker and former at Bohemia Realty and a stage veteran, Broadway actor Whitney Osentoski has with roles in “Urban Cowboy,” “Moving sold at least five units in a West 138th Out” and “Mary Poppins” in his reperStreet condo to cast members from toire. “Actors help actors, always.”

“Wicked.”

Letendre helped John Michael FiBohemia’s Michaela Morton, an unumara and Ryan Breslin, both in the derstudy in Ballybeg Theatre’s “The “Newsies,” ensemble, find rentals in Taste Of It,” recently helped an actor Washington Heights. “I was really tight friend, Nathaniel Claridad, find a pad with the cast,” he said. “They needed in Washington Heights. Claridad, Kathleen LaMagna Sarah Saltzberg Brian Letendre somebody they could go to who they who had a role in the Public Thecould trust .” ater’s “Here Lies Love,” reached out Bohemia salesperson Kathleen Broadway debut in the Tony Award–winning “The 25th to Morton about the Uptown market.

LaMagna found a Harlem rental for Annual Putnam County Spelling Bee,” said artsy types are “He was really excited by what he saw Bradley Gibson, who’s treading the heading Uptown because it hasn’t yet been completely gen- up here ... you can have closets withboards in “Rocky,” as a swing — the- trified. “As Harlem and Upper Manhattan have started to be- out living in them.” ater speak for a performer who covers come developed ... it’s only become more attractive,” she said. By Zachary Kussin

Scions debut on the Strip

Fresh out of college, a new batch of real estate heirs make rounds in Vegas

T

Joseph Sutton, left, took to Twitter when he and his father, retail titan Jeff Sutton, center, met boxing champ Floyd Mayweather in Vegas last month.

here’s a new group of real estate scions on the industry scene.

Last month’s International Council of Shopping Centers’ RECon in Las Vegas brought out the prominent heirs to some of New York’s mega real estate fortunes for their first time there since they graduated from college and entered the business full time.

For example, Steven Gurney-Goldman, the grandson of legendary investor Sol Goldman, graduated from Vanderbilt University last year and is now officially an employee of his family’s Solil Management. Incidentally, Gurney-Goldman, is also known for his poker-playing skills — he’s netted close to $90,000 in tournament play, according to one online poker database. In a profile last year, The Real Deal estimated his family’s property assets in the city to be worth about $6 billion.

Also spotted making the rounds at the party-filled ICSC convention was Joseph Sutton, the eldest son of

retail titan Jeff Sutton, who took a job with the commercial mortgage brokerage giant Meridian Capital Group after graduating from the University of Pennsylvania’s Wharton School last year. He tweeted several photos from Vegas, including one of himself and his father with boxing champ Floyd Mayweather. The elder Sutton, also a Wharton alum, owns an estimated $3 billion of net retail assets concentrated in New York City.

And, finally, Jack Joseph Sitt, son of Thor Equities CEO Joseph Sitt, made his first ICSC appearance since founding a new investment firm called Colt Equities, which is located at his father’s Midtown firm. After graduating last year from George Washington University in Washington, D.C., the younger Sitt worked at private equity real estate firm Savanna before launching his firm in January. The new company has already partnered with a Canadian firm to buy a ground lease covering 335 Canal Street out of bankruptcy on April 30 for $13.5 million. By Adam Pincus

Vickey Barron snags a Walker Tower condo for herself Exclusive broker for record-setting Chelsea building pays $2.3 million for unit

V

ickey Barron doesn’t just sell condo units as the exclusive broker for the Walker Tower in Chelsea, she’s also moving in herself.

Barron bought a one-bedroom, two-bathroom unit in the building for around $2.29 million last month, city property records show. The ninth floor apartment measures 1,350 square feet, according to PropertyShark, which translates to $1,697 per square foot.

The sale is the cheapest to date at Walker Tower. A 1,730 square foot unit on the same floor was sold to Florida-based Jha Holdings LLC for $4.07 million in March, or $2,354 per

120 June 2014 www.TheRealDeal.com

square foot, according to PropertyShark.

Neither Barron nor a Douglas Elliman spokesperson for Walker Tower responded to requests for comment.

Barron will be sharing the converted 1929 building at 212 West 18th Street with stars like Cameron Diaz, Harrison Ford, Katie Holmes and Nicole Kidman, all of whom reportedly bought units there, along with cosmetics line owner Laura Mercier, who purchased a 16th floor unit late last year for $5.9 million.

Walker Tower’s Penthouse One sold for $50.9 million earlier this year to Hakkasan CEO Neil Moffitt, setting

a residential Downtown sales record. Barron initially handled sales and marketing for the building on behalf of CORE, but JDS Development and Property Markets Group jumped agencies following Barron’s move to Elliman last year.

By Claire Moses

Vickey Barron

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THE CLOSING with Stephen

Ross

Billionaire developer Stephen Ross is the chairman of the Related Companies, the firm behind Hudson Yards, the mega-project on Manhattan’s Far West Side. The $20 billion project will include 16 skyscrapers and total 17.4 million square feet of office, residential, retail and community space. The firm has also developed over $22 billion in real estate and has a $15 billion portfolio nationwide, including 6,000 luxury rental units, 9 million square feet of commercial properties and 45,000 affordable and workforce housing units.

In New York City, the company has built massive projects like the Time Warner Center and a slew of high-end residential and mixed-use properties.

Ross, who also owns the Miami Dolphins, founded Related in 1972.

Name: Stephen Michael Ross Born: May 10, 1940 Hometown: Detroit Marital status: Married Children: 4 What were you like as a kid?

I was a free spirit. I was in trouble a lot. School was kind of secondary. The principal told my parents, “He has a strong personality. You’ve got to discipline him, but don’t break him.”

What did your parents do?

My dad was an inventor. He was a hard worker, so I didn’t see him much, probably about as much as my kids see me.

He was very creative, but he wasn’t a good businessman, and he didn’t have much success economically.

What did he invent?

The coffee vending machine was probably the first big 122 June 2014 www.TheRealDeal.com

thing he invented. He had patents for it and sold them. But he went with the wrong company. By the time he found out [the company] wasn’t successful, other companies had already caught up.

Why did you move from Detroit to Miami Beach?

We moved for my dad to manage a hotel my grandfather owned. It was hard; it was the middle of freshman year [in high school], and I’d just established myself at a new school.

Didn’t you always want to go to the University of Michigan but didn’t get in at first?

My parents took me to a football game in Ann Arbor when I was about eight years old. I was so enamored.… I started at the University of Florida, but worked hard because I knew it was my last chance. I ultimately got high enough grades to transfer.

When did you come to New York?

I came to New York after law school [at Wayne State University] to get a master’s in tax law at NYU. It was really the first time I’d spent any time in New York. Being single and looking to really work hard and play hard, there was no greater city in the world.

Where do you live now?

In the Time Warner Center, which I built.

You work there, too. Are there days you feel like you never leave the building?

When the weather’s bad, I’ve gone for two or three days without going outside. I eat at the restaurants and go to Dizzy’s [the nightclub at Jazz at Lincoln Center].

Do you have other homes?

I spend weekends at our home in Palm Beach, and I have a place in Southampton.

How long have you been married?

I first got married when I was 40, and that lasted for 11 years. This time? Twelve years.

You left marriage until late in life then.

I was enjoying single life, but more importantly, I was intent on establishing a career and building a company.

How did you meet your wife, Kara?

On a blind date. She was a jewelry designer and had her own company.… Since then, she’s really built a brand, and she sells in Bergdorf ’s and other great retailers. She has a

store now on 60th Street, just off Madison.

How many kids do you have?

Four. I have two girls, and she has two. I’m way outnumbered.

How did you get your start in real estate?

I got fired from two jobs, at Bear Stearns and [investment bank] Laird all within a two-year period. You had all these young people vying for the top. Everyone thought they were the masters of the universe. At Bear Stearns, the person I was working with had an inferiority complex. He wanted me to be totally subservient and that didn’t work for me. I knew I couldn’t go back for another interview so I made a business plan.

What was the business plan?

I started in affordable housing so I could learn the business using my skills as a tax attorney. Meanwhile, I was selling the tax shelters that accompanied the projects to wealthy investors. The financial arm eventually became the largest supplier of debt and equity for affordable housing.

The likelihood of success without money or a family history in real estate must have seemed slim.

I look back and see where I am today and I can’t believe it.

I have to pinch myself.

When did you know that you’d made it?

I don’t know that I’ve made it yet.

Has it been hard to watch what’s happening in Detroit with the bankruptcy?

I was there recently and it brought tears to your eyes to see how much it deteriorated. That was the same time that we had the harassment issue with the Dolphins. It all shows you what racism can do to this country.

What are your hobbies? Do you collect anything?

I took up golf about 10 years ago. I play with an old friend from Boston and with [Bloomberg L.P. CEO and onetime deputy mayor] Dan Doctoroff. [We also go] out on our boat in the Hamptons. It’s a 38-foot speedboat. I also have a modern outdoor sculpture collection.

What kind of car do you drive?

A Maserati. It’s dark blue.

Did you like cars as a kid?

My parents tell me the first word I ever learned was “car.”

By Katherine Clarke PHOTOGRAPH FOR THE REAL DEAL BY July STUDIO SCRIVO00 www.TheRealDeal.com 2006

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THE MARCUM R E A L E S TAT E G R O U P

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For more information about the Marcum Real Estate Group contact:

Daniel Vitulli

Partner-in-Charge of the National Real Estate Group 212.485.5575 daniel.vitulli@marcumllp.com

Discover the Dierence www.marcumllp.com ASSURANCE

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From Visions to New Skyline Views Helping Finance the Future of New York City

U.S. Immigration Fund partners with leading real estate developers and industry leaders to give rise to landmark projects through EB-5 financing.

1.855.EB5.USIF I WWW.USIFNY.COM To encourage immigration through the EB-5 category, Congress created the EB-5 Regional center (Pilot) Program in 1990. Regional Centers are considered to be any government approved entity, organization or agency which focuses on a specific geographical area of the United States and that seeks to promote economic growth, increased regional productivity, job creation and domestic capital investment. This advertisement is intended for general information purposes only. This does not represent an offer or solicitation to buy or sell any security. Investments are available only to qualified investors via a confidential offering memorandum.