The Real Deal March 2012 by The Real Deal

A history of reality TV and real estate

Rental brokers get ditched

Private equity: who’s ahead

112

One57 buyers become renters

112

Manhattan comes to Miami

THEREALDEAL

www.TheRealDeal.com

Lutnick’s big market hedge Can BGC make real estate derivatives work here?

N EW YO RK R E A L E S TAT E N E WS

Vol. 10 No. 3 March 2012 $3.00

Power behind the throne The lieutenants pulling the strings for NYC’s top real estate chiefs

banks to cough up more money in NY per borrower than in any other state. See page 20.

AT A GLANCE Spring sales surge The unusually balmy weather is already translating into springlike activity in Manhattan’s residential market. And the city’s currently low housing inventory is expected to rise, which could further pave the way for an increase in sales. See page 16.

See story on page 54

Hamptons ﬁrm racks up nearly $1B in listings

BY LEIGH KAMPING-CARDER Just three years after opening, Andrew Saunders’ East End brokerage has almost $900 million in exclusives. As the Hamptons season gets started, a close-up on a ﬁrm straddling the mom-and-pop and corporate worlds. See story on page 34

The recent $26B mortgage settlement requires ﬁve mega-

BY ADAM PINCUS Howard Lutnick’s BGC Partners said last month it would buy distressed commercial ﬁrm Grubb & SPECIAL REPORT Ellis. That was mere months after it closed on its buy of Newmark. But neither of those deals compare to Lutnick’s big plan to bring derivatives to NYC’s real estate industry. Still, past attempts have failed, and others are now racing to do the same.

Saunders stakes his beachhead

FACT

Right-hand man: Janno Lieber (forefront), Silverstein Properties’ president, with company head Larry Silverstein.

On the waterfront

BY C.J. HUGHES consummate inside operators are well-known powThe real estate industry in New York is famous for its er players to a small circle of insiders, but the rest outsized personalities. But for every of the industry rarely hears about F E AT U R E S T O R Y them. Inside, The Real Deal looks at boldface frontman, there’s a behindthe-scenes wizard who is running day-to-day opera- some of the top wingmen in the business. tions or shaping the direction of the company. These See story on page 60

Developers citywide — including Young Woo and Related— are taking advantage of government sweeteners to ﬁnally build on long-dormant sites. In the process, they’re remaking the city’s waterfront. See page 30. Gem Tower rendering

Agency blood battles Delays worsen at DOB

Ranking the Big Six commercial ﬁrms on wooing landlords

Developers say slowdowns are hurting their projects

BY ADAM PINCUS In the NYC office leasing world, battles to represent buildings are a blood sport. This month, TRD conducts a first-time ranking of which firms won the most assignments last year and estimates how much those wins are See story on page 66 worth in potential commissions.

BY KATHERINE CLARKE The city’s Department of Buildings has never been known for its speedy response times. But recently, developers say, delays have worsened, due in part to procedural changes dating back to the crane collapse aftermath See story on page 18 and the Robert Scarano scandal.

Lazenby’s 007 moment Bond kid, Elliman broker comes out guns blazing

Billy Macklowe on his ‘outlaw’ in-laws See page 114.

BY CANDACE TAYLOR Until recently, Elliman broker Melanie Lazenby was best known as the daughter of a one-time James Bond actor. But she’s recently taken the residential world by storm with a $31.5-million, record-breaking sale and the priciest-ever Manhattan rental listing. Still, it’s been a long and challenging road for this Bond girl. See story on page 26

Survival of the fittest

Examining the job market for brokers in New York, including who’s earning what and who’s switching firms BY LEIGH KAMPING-CARDER Jobs, jobs, jobs: for months, even years now, the topic has been front and center in the minds of Americans. Yet for NYC real estate brokers, getting an accurate picture of their corner of the job market is difficult, since most brokers operate more like small businesses than employees. This month, TRD dissects the city’s real estate labor force, from the latest brokers to switch firms to changes in incomes and employment rates during the boom, bust and recovery. See stories beginning on page 43

NYC’s bling building The Skidmore Owings Merrill-designed International Gem Tower, which is rising in the Diamond District, is a dull structure architecturally, but it has a jazzy surface, critic James Gardner says. The Extell building is set to be complete this year. See page 68.

Charity cases More ﬁrms and sellers — like Sandy Weill — are using philanthropy to help them stand out from the crowd. Does it impact pricing? See page 50.

www.TheRealDeal.com SILVERSTEIN-LIEBER PHOTOGRAPH BY JOE WOOLHEAD; MACKLOWE PHOTOGRAPH BY MARC SCRIVO

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Highlights M A R C H

2 0 1 2

Climate change

Delays at DOB

Big banks cough up $26B

With warm weather, NYC brokers report an early spring activity bump.

The DOB is safer, but builders are upset about slowdowns in the outer boroughs. A look at last month’s mega-mortgage settlement. What does it mean for NY?

President Barack Obama

Ilan Bracha

Bracha’s breakaway move Ilan Bracha, who left Elliman nearly a year ago to start up Keller Williams NYC, follows the market like a Wall Street trader.

Lazenby. Melanie Lazenby.

In their words...

Bond daughter, and Elliman broker, comes out guns blazing, breaking records to boot.

This month’s funniest and most insightful comments.

Down by the river

Cinema crunch

Establishing a beachhead

The foreclosure bogeyman

Curbing retail on the UWS

Melanie Lazenby

Developers jump on government deals, staking fortunes on waterfront.

Niche theaters replace multiplexes in NYC’s pricey real estate market.

Andrew Saunders’ East End ﬁrm has quickly become a Hamptons force.

National home builders are ﬁnally confronting foreclosures head-on.

In bid to help small businesses, the city wants to limit the size of storefronts.

Andrew Saunders, founder of Saunders & Associates

Substance over style Today’s must-have condo features are less sexy and more functional.

bites 40 Reality With two new real estate shows debuting From left: Ryan Serhant, Michael Lorber and Fredrik Eklund

8 March 2012 www.TheRealDeal.com

this month, a look at the long history of real estate and unscripted TV.

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Highlights continued of the ﬁttest 43 Survival NYC’s real estate labor force, from how much money

brokers make to who is defecting to new ﬁrms.

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cases 50 Charity Can philanthropy help sellers and ﬁrms boost their bottom lines?

Meet the landlord Ed Kalikow puts out tenant ﬁres, literally — well, almost.

Lutnick’s big hedge With two new ﬁrms under his control, Howard Lutnick’s BGC Partners looks to launch a property derivatives market — and he is not alone.

Howard Lutnick

The power behind the throne ��

The most inﬂuential real estate players you’ve never heard of.

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

Forest City Ratner’s Bob Sanna at Atlantic Yards.

64 A rundown of the latest (and soon The real estate bookshelf

-to-be-released) industry tomes.

66 Which commercial ﬁrms are The agency blood battle

winning over the most landlords? The Gem Tower

��Metals in Construction ��

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

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Residential Market Report

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

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

100

Calendar of Events

70 NYC’s bling building Extell’s Gem Tower: A jazzy surface, not so jazzy a structure.

Check out this month’s activities.

106

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

110

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

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10 March 2012 www.TheRealDeal.com

— Billy, that is. 114 Macklowe The younger Macklowe breaks out of his father Harry’s shadow.

112

We Heard A lighter look at industry buzz.

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N E W YO R K R E A L E S TAT E N E W S PUBLISHER Amir Korangy EDITOR-IN-CHIEF Stuart W. Elliott MANAGING EDITOR Jill Noonan DEPUTY MANAGING EDITOR Candace Taylor WEB EDITOR Lauren Elkies ART DIRECTORS Ronald Gross, Derek Zahedi SENIOR REPORTER Adam Pincus REPORTER Leigh Kamping-Carder WRITERS Catherine Curan, Melissa DehnckeMcGill, Ken Harney, C.J. Hughes, David Jones, Adam Piore

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PRODUCTION MANAGER & RESEARCHER Linden Lim EDITORIAL ASSISTANTS Adam Fusfeld, Katherine Clarke, Guelda Voien ILLUSTRATORS David Cole, Yishai Minkin PHOTOGRAPHERS Max Dworkin, Michael Toolan, Marc Scrivo

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

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y now, it seems like most New Yorkers in the business world have read Walter Isaacson’s biography of the late Apple founder Steve Jobs or know someone who is reading it. I just finished it up. Jobs was a mercurial genius, and also, frankly, could be an ass. Notorious for thinking the rules didn’t apply to him, he would park in handicap spots at the company’s headquarters. Most ideas presented to him at Apple got a standard reaction from him: “It’s shit.” But with the Macintosh computer, and later the iPod, iPhone and iPad, Jobs revolutionized personal computing, as well as the music, phone, tablet computing and digital publishing industries. He also made significant innovations in the world of retail real estate. The big debate that has emanated from the biography is: could Jobs have been as successful without being such a jerk? Whether radical innovation goes hand-in-hand with ruffling feathers is an important question, and it’s as pertinent for the real estate industry as it is for the technology sector. One contentious player who is looking to revolutionize commercial real estate is Howard Lutnick, who we write about in this issue. Check out the story by reporter Adam Pincus starting on page 54. Lutnick announced last month that his firm BGC Partners — a spin-off of Cantor Fitzgerald —would buy distressed brokerage Grubb & Ellis, four months after closing on a deal to buy brokerage Newmark Knight Frank. Lutnick recently boasted on Bloomberg

Whether radical innovation goes hand-in-hand with ruffling feathers is an important question, and a pertinent one for real estate. Television that he hoped to eventually capture “25 percent of the [commercial real estate] market share.” But it’s a plan to create a property derivatives market that could change the industry. Property derivatives are something of a holy grail in the commercial real estate world, enabling tenants and landlords to hedge against swings in rent. There are many skeptics who doubt whether such a market can thrive, but Lutnick has proved in the past that he can come up with innovative new financial products. Following Sept. 11, which famously devastated Cantor — three out of every four people who worked in New York for Lutnick that day died, 658 people in all, including his brother Gary — he rebuilt a shattered bond brokerage into an electronic trading powerhouse. In doing so, he revolutionized the bond business by replacing human brokers with computers. He’s also expanded his firm into credit derivatives, future trading, running sportsbetting operations and other ventures. A ruthless competitor who has made many enemies, Lutnick has, at the same time, been reviled for cutting off paychecks to the families of his employees just four days after the Sept. 11 attacks. And he’s been involved in brutal battles for control of his company. As his mentor, Bernie Cantor, lay dying in the mid-1990s, Lutnick reportedly fought with Cantor’s wife, Iris, over control of the company and was accused of moving to get his former boss declared incapacitated. He was later barred from the funeral, according to a profile in the New York Times. But — and maybe this is a key for innovators — Lutnick has kept his eyes on the longterm prize, despite the collateral damage, including to those he cared about. (At the time he cut pay following Sept. 11, for example, he promised Cantor would give employees’ families 25 percent of its profits over the next five years, a pledge he carried out, with many spouses later saying Lutnick did right by them.) With such a rough-and-tumble history, Lutnick may be well poised for his foray into a real estate derivatives market. It pays to think big, or as the famous Apple campaign said, “Think Different.” Of course, every temperamental visionary needs a right-hand man or woman to help them execute their ideas — think of the unflappable Apple CEO Tim Cook to Steve Jobs. In our main cover story this month, we look at the key players behind the throne at some of the biggest real estate companies in the city. From Bob Sanna at Forest City Ratner to Dov Hertz at Extell, these are name you might not know —but if you consider yourself a real estate insider — you should.

Stuart Elliott 14 March 2012 www.TheRealDeal.com

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Climate change With warm weather, brokers report an early spring activity bump

BY LEIGH KAMPING-CARDER hen Adina Azarian ﬁrst opened her boutique rental firm, Adina

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Equities, in 2003, a veteran broker called to wish her luck and offer a key piece of advice.

“He told me that February is just an awful month for rentals,” recalled Azarian, who still runs her eponymous ﬁrm and also works at Keller Williams NYC as its “cultural ambassador.” He recommended that she take an annual vacation during the cold, dreary days of the year’s shortest month. But this year, she didn’t take

that holiday. And lo and behold, Adina Equities had the highest number of deals closed and new exclusives signed than during any other year in its history, she said, adding, “I will take it as a good sign.” The ﬁrm’s strong performance was due in large part to the muchdiscussed boom in the rental market that has continued almost un-

abated through the usually sluggish winter months. But another reason for the activity was last month’s warm temperatures. On all but four days in February this year, temperatures were higher than their historical averages, according to AccuWeather, a

mate affecting market activity. “With the unusually warm weather that we’re experiencing, we’re seeing a lot of homebuyers coming to the market before they normally would,” said Daniel Hedaya, president of Platinum Properties. “Typically, winter is a tough

“With the unusually warm weather that we’re experiencing, we’re seeing a lot of homebuyers coming to the market before they normally would.” Daniel Hedaya, Platinum Properties national meteorological service. Some other brokers have also noticed the relatively balmy cli-

time for buyers to look at properties, with snow and cold. However, the warmth has brought them out earlier than anticipated.” Furthermore, acceptances to the city’s elite private schools began to come out early last month. As a result, “we are seeing increased activity among buyers for large residences,” compared to the previous month, said Beth Fisher, the senior managing director of Corcoran Sunshine Marketing Group. While Punxsutawney Phil may have seen his shadow on Groundhog Day, forecasting six more weeks of winter, brokers anticipate the mild weather will contribute to a springtime surge in activity. “There is going to be a boom in the spring,” predicted Ariel Cohen, a senior vice president at Prudential Douglas Elliman. “The weather change is going to make an impact on the morale of the market.” Brokers said that other factors portend a more-than-seasonal uptick in activity this spring. For one, the city’s (currently low) inventory levels are expected to rise, perhaps dramatically, possibly paving the way for an increase in sales as buyers are confronted with more options. When it comes to newly constructed condominium buildings, this may already be taking place. In StreetEasy’s inaugural monthly report on the Manhattan condo market, the listings provider found that among new developments, inventory was up 36 percent between January 2011 and January 2012. But inventory for all condos was down 3.2 percent in the same period. James Malone, an agent at Bond New York, explained that more favorable economic news — for example, better jobs numbers and stock market growth reported in recent weeks — increases sellers’ hopes for getting a return on Continued on page 96

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Delays at the DOB The department has become more thorough, but developers complain about slowdowns

BY KATHERINE CLARKE the past few years. Commissioner Robert t was four years ago this month that sev- LiMandri, who replaced Patricia Lancaster en people were killed in a crane collapse after she stepped down during the crane on East 51st Street. Since then, the New collapse controversy, has made concerted York City Department of Buildings — un- efforts to increase the department’s safety der fire for lax oversight of building plans regulations. The agency has implemented — has taken steps to improve its safety pro- more than 25 new construction safety laws cedures. since 2008, according to news reports. And But some real estate professionals say in 2009, the first modernization of the city’s the pendulum may have swung too far Building Code since 1968 took effect, exin the other direction; the agency is now panding requirements for fire protection, taking so much time to scrutinize plans structural integrity and work-site accountand permit applications, they say, that ability. So far, the department’s increased emit’s leading to project delays — forcing developers to push back their timelines phasis on safety appears to be working. for commercial and residential projects There were 128 construction-related incitywide. In particular, residential developers said delays in obtaining temporary certificates of occupancy, or TCOs — which indicate that a building is safe for its designed use — and other permits are slowing 2011 7,044 down closings on condominiums. 2010 7,672 That, in turn, puts financial pressure on developers who are staring 2009 9,219 down deadlines to pay back their construction lenders. 2008 11,307 Delays are more pronounced in the outer boroughs, expeditors and Source note: Mayor’s Management Report, 2011. developers said, in part because the Data is collected by fiscal year. DOB is now being more scrupulous in its inspection of applications in the wake of the scandal surrounding prolific Brooklyn architect Robert Scarano, who falsified DOB documents. Mayor Michael Bloomberg even acknowledged the delays recently. “We have all heard horror Barry LePatner, stories about delays in the conLePatner & Associates struction process,” Bloomberg said at the October launch of the agency’s new juries in fiscal year 2011, down from 206 digital plan review system, which aims to in fiscal year 2010 and 223 the prior year, speed up the process of evaluating build- according to the Mayor’s Management Reing plans. port, or MMR. With the new system, “those delays, we But city statistics also show that the think, are going to be reduced dramatically, agency has recently issued fewer certificates from months to minutes,” Bloomberg said. of occupancy than in the past. Only 2,202 certificates of occupancy (or “No more endless back and forth, no shuffling between agencies.” CofOs) were issued in the first four months of But real estate professionals said the this fiscal year, down from 2,511 in the same platform is not yet in widespread use, and period of the prior year, according to the prethey are still dealing with slowdowns on liminary MMR for fiscal year 2012. Throughprojects that started before the new system out fiscal year 2011, there were a total of 7,044 went into effect in October. certificates issued, down from 7,672 the prior “I’m dealing with [delays] on multiple year and 9,219 in fiscal year 2009. projects right now,” said Deborah Rieders, Overall, the department completed a senior vice president at the Corcoran 48,186 construction inspections (includGroup, who is marketing several new de- ing inspections for CofOs) in the first four velopment projects. “Closings that should months of the fiscal year, down 24 percent have happened in 2011 have now been from the same period of the prior year. The pushed to 2012.” MMR, which acts as a kind of report card for city agencies, attributed that decline to Keeping score “reduced field hours resulting from staff The DOB has seen momentous change over Continued on page 95

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The Bulletin Board

Big banks cough up $26

Compiled by Russell Steinberg

Big bank payout

The U.S. government and five major banks — Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial — last month agreed to a $26 billion mortgage settlement for wrongful mortgage servicing practices. The money will be paid out to about 1.75 million Americans.

Individual aid

New York’s cut

Victims of wrongful foreclosure will receive checks for $1,500 to $2,000. Funds will also be allocated for loan modifications and legal assistance for underwater borrowers. President Barack Obama said in a speech that the deal “will begin to turn the page on an era of recklessness.”

NYS will receive roughly $136 million — the settlement’s largest per-borrower cut of the 49 states that signed on. The federal government estimates that more than 46,000 borrowers in New York w ill benefit from the deal, with around 21,000 getting a reduction in the debt owed on their mortgages.

Good timing

Imperfect plan

New York AG Eric Schneiderman was critical of the deal, saying it let banks off too easy. The settlement will only impact loans serviced by the nation’s biggest lenders, or about 55 percent of all mortgage holders, though the government hopes to eventually strike a deal with nine additional banks. (Wall Street Journal)

Past due

Nationally, the number of late mortgage payments increased in 2011’s fourth quarter, the second straight quarter of increases after nearly two years of declines. Indeed, 6.01 percent of mortgage holders were at least 60 days late on their payments, compared to 5.88 percent in the third quarter. (Associated Press)

Dolly Her tz Andrew Gust Helen Marcos

20 March 2012 www.TheRealDeal.com

New York State currently faces a record 100,000 impending foreclosure cases, with tens of thousands still potentially to come. NYC saw 996 first-time foreclosures in 2011, but thousands more were notified last year that they’re in danger of losing their homes. (NYT, Daily News)

Lawsuit pending Schneiderman filed a separate suit last month against three of the banks included in the settlement, alleging fraudulent use of the electronic mortgage database MERS, which he claims made it easier to improperly foreclose on homes. He said MERS filed more than 13,000 foreclosures in the Empire State.

Jeanne Bucknam

Z o e H ay d o c k

Nikki Field

Ke v i n B . B r o w n

Bloomberg’s new bill

Last month, Mayor Michael Bloomberg signed a bill requiring banks to notify the city’s Department of Housing Preser vation and Development at least 15 days before beginning foreclosure proceedings on a home. Banks will face a penalty of up to $1,000 for each week they fail to comply. (WNYC)

Gillian Friedman Chloe Ren

Craig George

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PHOTOGRAPH FOR THE REAL DEAL BY JAMES CHANG

“The Millionaire Real Estate Investor” by Keller Williams cofounder Gary Keller. The book’s tips about how to build a real estate team in seven steps was a blueprint for the creation of the Bracha Group, the 12-person team Bracha created at Elliman and moved to Keller. “I like to read about opportunity and business,” Bracha says.

These types of framed news articles highlight Bracha’s successes at Elliman. So far, his firm has about 350 NYC listings. By comparison, Elliman has thousands. But Bracha is convinced Keller Williams will ultimately be a rival.

A tennis player since childhood, Bracha still swats the ball around once a week at indoor courts on West 43rd Street, though he plays outside in the spring.

Ilan with his late father Jacob Bracha, who lived in their native Tel Aviv. The older Bracha, who worked as an ironworker making tables and gates, also dabbled in development, specifically small apartment buildings.

t wasn’t quite the equivalent of Babe Ruth ditching the Red Sox to play for the Yankees, but top-producing broker Ilan Bracha caused a stir last year when he left Prudential Douglas Elliman to launch the first Keller Williams franchise in New York City. Eleven months later, Bracha, the chairman, has assembled a deep bench of brokers, many of whom have defected from established firms. True, he may not hit his stated goal of 250 agents by his one-year anniversary next month, but he’s getting close — the firm has 160 brokers, with more expected in the upcoming weeks, Bracha says. This winter, he cut the ribbon on a new 25,000-squarefoot headquarters at 425 Park Avenue, though Bracha, 37, will continue to work out of the firm’s former headquarters at 725 Fifth Avenue, Trump Tower. B y C. J. H ugHes

At the

Desk

of:IlAn

which is now in its 18th year. While the event is about showcasing new talent, Suna explained, it also helps boost the off-season economy of the Hamptons, where he owns a home.

BrAchA

An oil painting by Mati, Bracha’s wife, who used to teach art at an elementary school in Israel but is now a full-time painter. She recently sold her first painting for $1,000 at a nearby West 57th Street gallery.

This 27-story condo-hotel was planned for 16-18 West 57th Street, on a site that Bracha’s development firm, B&B Investment Group, bought for $60 million in 2007 before losing it to lender Petra Capital Management. Extell Development Group bought the note on the property for $80 million in October.

A pair of trendy Beats headphones, designed by Dr. Dre. They’re for grooving to U2 but also for listening to sales lessons from real estate coaches like Mike Ferry, a favorite.

Bracha likens his job to that of a Wall Street trader. That’s why he has three computers going at all times. Condo and co-op sales, he says, should be monitored on a daily basis. “Things aren’t moving as fast as the stock market,” Bracha admits. “But it’s all about keeping up with the deals.”

Foreign buyers made up 60 percent of Bracha’s clients last year, which is partly why he has international clocks on his wall. Some of those overseas clients are Chinese and often prefer condos in Midtown: “They are buying what they see in the movies,” he says.

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square feet near Herald Square. The slow activity in 2012’s first quarter does not come as a surprise. Insiders like Bruce Mosler, chairman of global brokerage at Cushman & Wakefield, predicted at the end of 2011 that the New Year would start sluggishly. But some real estate professionals are pointing to other metrics that suggest a turnaround could be underway in the coming months. Robert Billingsley, vice chairman of commercial firm Cassidy Turley, acknowledged that large companies have been reluctant to sign deals lately, but he remained optimistic about office leasing activity for the rest of the year. “We thought it would pick up more in February than it has. It’s like the consumer sentiment is going along at 50-to60 miles per hour, but the real tangible things you see [like lease deals] are going along at 40 miles per hour,” Billingsley said. “[But] our marketing projections and our business plan is that things are going to get better.” Market statistics reflected that static sentiment. The average asking rent for Manhattan remained nearly flat in February, falling just a penny to $52.05 per square foot compared with January. Meanwhile, the availability rate (measuring space vacant now or space that will be available over the next 12 months) rose by 0.1 points last month to 10.4 percent. Marc Holliday, CEO of the city’s largest office landlord, SL Green Realty, said on the company’s earnings call Jan. 31 that activity at his firm was solid, even as “market activity may be slowing somewhat as reported by several New York brokers.” In addition, he expected private-sector employment to grow by 24,000 this year, further boosting the market. Robert Sammons, vice president for research at Cassidy Turley, said it was too soon to call the overall flat numbers in February the start of a downward trend. “My thinking is there will be some ebb and flow for a few months as some additional availability hits from financial

Manhattan ofﬁce stats Manhattan

Availability Average rate asking rent

Feb’12 Jan ’12

10.4% $52.05 10.3% $52.06

Midtown

11.1% $59.23 10.9% $59.30

Feb’12 Jan ’12 Midtown South

8.8% 9.1%

Feb’12 Jan ’12

$43.12 $43.13

Downtown

10.4% $38.29 10.1% $38.25

Feb’12 Jan ’12 Source: Cassidy Turley

services firms, especially in Midtown,” he said.

Midtown Even as the activity of office leasing deals remained slow in Midtown, some brokers reported an increase in interest among tenants, noting that leading indicators such as phone calls and space showings were up. Robert Kaplan, director of leasing at landlord Hidrock Realty, said last month that “activity picked up in terms of offers and showings.” Last month, he put a pair of spaces on the market in a 12-story loft-style building at 35 West 36th Street between Fifth and Sixth avenues, asking $35 per square foot and $36 per square foot. In a tacit acknowledgment of the quiet period, Hidrock is offering brokers prizes such as a dinner and a Broadway show for two, or golf lessons, through quarterly raffles to draw activity to all of its properties. For the overall Midtown market, the average asking rent dipped last month by $0.07 per foot to $59.23 per square foot compared to January. The availability rate rose by 0.2 points to 11.1 percent during the same period, Cassidy Turley statistics showed. But in another positive sign, Billingsley said he’s seeing an increase in interest from foreign companies looking to sign new leases or expand in Midtown. “A trend we are seeing in our buildings is there are a lot of tenants with headquarters outside the U.S. that are placing bets on the U.S. economy and are doing things with their occupancy plans here,” he said.

Midtown South Midtown South has generally fared betContinued on page 95

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PROF I L E

Lazenby. Melanie Lazenby.

Melanie Lazenby in Penthouse A at 260 Park Avenue South, which she is listing for $12.5 million

Bond actor’s daughter — and Elliman broker — comes out guns blazing, breaking sales and rental records along the way BY CANDACE TAYLOR n the fall of 2010, real estate broker Melanie Lazenby was riding the elevator at the West Village condominium Superior Ink when a stranger started asking her questions. “I had no idea who he was,” recalled Lazenby, an executive vice president at Prudential Douglas Elliman. “He asked me, ‘Do you know if there are any apartments for sale in this building?’” She did know. Not only is Lazenby a topranked broker at Elliman, she lives at Superior Ink, the über-expensive condo conversion at 400 West 12th Street. When she rattled off available units in the building, the stranger, who was testing her, told her she “really knew her stuff ” and handed her his card. He turned out to be billionaire Leslie Alexander, who was already the owner of Superior Ink’s 6,300-square-foot penthouse, which he had placed on the market the year before priced at $39.5 million. When Lazenby said she might have a buyer for the unit, he asked her to show the buyer the apartment — he’d leave the keys with the doorman. Lazenby’s client, South African entrepreneur Mark Shuttleworth, was indeed interested in purchasing the penthouse, and the deal closed a month later for $31.5 million — the highest price ever paid for a con-

26 March 2012 www.TheRealDeal.com

do in Downtown Manhattan, with Lazenby representing both buyer and seller. “I thought I was going to die!” said the bubbly 38-year-old Lazenby, whose priciest deal up until that point had been $13.1 million. “It was just really exciting.” Ending up in the elevator with Alexander — the owner of the Houston Rockets — was both an obvious stroke of good luck and the result of careful strategy. Several years earlier, Lazenby sold her 49 West Ninth Street

her visibility, she has a difﬁcult relationship with her father, and in 2008 made headlines for testifying in court about the years of abuse she allegedly experienced at his hands. In the past few years, however, Melanie Lazenby has gained fame for her real estate accomplishments, starting with the recordbreaking sale at Superior Ink. That deal brought her career “to the next level,” said Howard Lorber, Elliman’s chairman. “She had done stuff before, but that

nished by designer Steven Gambrel. Last month, Lazenby was named Elliman’s No. 2 individual broker for gross commission income, and received a Pinnacle Club award for earning over $1 million in 2011. But it’s been a difﬁcult road for Lazenby. In addition to the troubled relationship with her father, she lost a brother to cancer and suffered from dyslexia. But overcoming obstacles has made her career success even sweeter.

“For a girl who had gotten straight Ds in school ... to then have sold the most expensive piece of property in Manhattan ever below 23rd Street — it was just incredible.” Melanie Lazenby, Prudential Douglas Elliman co-op for $1.85 million and bought a smaller unit at Superior Ink, believing that living in the luxury doorman building would help advance her career. “I thought it would help me in business,” she said, “and it certainly has.” Lazenby started in New York residential real estate 12 years ago, but until recently, she was perhaps best known as the beautiful blond daughter of actor George Lazenby, who starred as James Bond in the 1969 ﬁlm “On Her Majesty’s Secret Service.” The connection has been both a blessing and a curse; while the connection sometimes helps raise

surely gave her more recognition.” Lazenby and her longtime business partner, Dina Lewis, followed that up in August, by breaking the price-per-squarefoot record for a West Village co-op with the $12.5 million sale of a penthouse at 2 Horatio Street. And in December, the pair broke another record when they put the Astor Suite at the Plaza on the rental market for $165,000 per month — the highestever asking rent for a New York City apartment. Owned by German billionaire Jurgen Friedrich, the apartment has been fully fur-

When the Superior Ink deal closed, a grinning Lazenby reﬂected, “for a girl who had gotten straight Ds in school and never won a single award, to then have sold the most expensive piece of property in Manhattan ever below 23rd Street — it was just incredible.”

License to sell When you ﬁrst meet Melanie Lazenby, it’s not surprising that she is the daughter of a movie star. A tall, wisp-thin blonde, Lazenby’s carefully styled locks ﬂow halfway down PHOTOGRAPH FOR THE REAL DEAL BY JAMES CHANG

PROF I L E her back, and her high-heeled Louboutins barely slow her down as she darts around a 4,000-square-foot penthouse at 260 Park Avenue South. The Chrysler building is visible from the living room window of the apartment, which Lazenby and Lewis have listed for $12.5 million. But as she settles herself on the couch to pose for a photo, Lazenby automatically reaches over to adjust the already-perfectlooking pillows. It’s force of habit, she explains: Before a showing, she and Lewis arrive hours early to make sure everything is ship-shape. Gucci and heels notwithstanding, “we will get on our hands and knees and clean if

fortune. Born in London, Lazenby lived in Sydney until she was nine, when the family moved to Santa Monica, Calif. “My parents were obsessed with moving,” recalled Lazenby. “One of the family hobbies was going ‘open-housing’ every Sunday.” She also had an early interest in design. “I’ve had a subscription to Architectural Digest since I was 12 years old,” the broker said. While in college at Chaminade University in Hawaii, Lazenby studied interior design and communications. When she moved to New York in 2000 after a stint doing PR for Ralph Lauren in Paris, becom-

their ﬁrst big paychecks, and they didn’t have brokers that they had used. ... Once I linked in with that group of guys, it was great.” Within a year and a half, Lazenby and Lewis were doing some of the priciest deals at CBHK. In 2002, the duo moved to Elliman, where they’ve been ever since. Lazenby and Lewis have done some $1.2 billion in sales over the years, Lazenby said. But they’ve largely ﬂown under the radar until now, especially when compared to Elliman super-brokers like Dolly Lenz (who had previously listed Alexander’s Superior Ink penthouse; the exclusive expired before Lazenby met Alexander, and was technically an “open listing” when the deal closed). Pam Shriver

for 2010, and now No. 2. (Lewis and Lazenby share all their listings, but work with buyers separately.) “It’s been a slow and steady climb,” Lazenby said. Another helpful factor, fellow brokers noted, is that Lorber has recently become a mentor to Lazenby, bringing her into an inner circle that over the years has included super brokers like Raphael De Niro. Lorber attributed Lazenby’s success in part to her upbeat personality. “They’re very ‘up’ type of people, her and Dina,” Lorber said. “They’re happy, they love what they do. People see that, and their clients stick with them.” That was certainly the case at Superior Ink: Lazenby knew Shuttleworth was interested in the penthouse because she’d sold him another apartment at Superior Ink the year before. “I knew he hadn’t done anything yet with his ﬁfth-ﬂoor apartment, so I thought there was an opportunity there,” she recalled.

Tomorrow never dies

George Lazenby

Superior Ink

Leslie Alexander

The Astor Suite at the Plaza

The Penthouse at 2 Horatio Street

we have to,” Lewis explained later by phone. “Whatever it takes.” Lazenby in particular is “an absolute perfectionist,” Lewis said. “A normal broker would go in and ﬂuff up the pillows maybe, nothing special. Melanie will go in, she’ll bring the ﬂowers, move the furniture around, she’ll bring her own pillows from home. ... She puts so much care into what she’s doing, it always ends up being so much more than what anybody expected.” Lazenby’s exposure to real estate started early on. Her famous father is Australian, but her mother, Christina Matser, is American, an heiress to the Gannett newspaper

ing a residential real estate broker seemed like a natural choice. She met Lewis, a New Jersey native, on the first day of training at Coldwell Banker Hunt Kennedy, and the two rookie agents decided to work together. They are still partners today, as well as close friends who love watching Bravo while on the phone together and unwinding over drinks at the Four Seasons. It helped that, when the two were first getting started, New York was flooded with newly rich, young investment bankers. “A lot of guys that were two years out of college were getting paid these mega-bonuses,” Lazenby recalled. “They were getting

Dina Lewis

Until recently, Lazenby said, “I wasn’t doing these crazy big deals. I was doing a lot of medium-sized deals, $2 to $3 million apartment sales. Those don’t make the papers.” And unlike other top brokers, Lewis and Lazenby don’t have a team of assistants working with them. “It’s just us,” Lazenby said. “We do every board package, every showing, every pitch, and we make every photocopy.” After years in the trenches, however, Lazenby’s hard work has ﬁnally earned her industry recognition. She was named Elliman’s No. 5 individual broker for gross commission income for 2009, then No. 4

Unlike her Elliman colleague De Niro — who is rarely mentioned in the press without a reference to his Oscar-winning father — Lazenby said having a celebrity parent hasn’t significantly impacted her career. In part, that’s because “my father is the least-famous James Bond of all the James Bonds,” she said with her characteristic expansive laugh. An actor and model, Lazenby did only a single 007 film, and 1969’s “Secret Service” is his best-known work. Still, “people get excited about the title,” his daughter said. “It’s something cool for a couple of minutes, and then I move on.” The association does sometimes help attract publicity, Lorber said. “She’s got that interesting little tidbit of a story, that her father was James Bond for one movie,” said Marc Lawrence, a principal at the title agency American Land Services, who worked with Lazenby when he was a broker at Corcoran. “There are 1,200 Douglas Elliman brokers who are basically offering similar services. ... Anything that you have that can distinguish yourself you from your colleagues” is helpful. In fact, Lorber said that he didn’t know who Lazenby was until “someone told me that we had a broker whose father was the second James Bond.” But despite outwardly idyllic appearances, Lazenby’s childhood was difficult. When she was 11, her younger brother Zachary was diagnosed with a malignant brain tumor. After years of punishing illness, he died at age 19. Her parents, devastated by the long struggle, divorced almost immediately afterward. From early on, Lazenby was “the stronger kid, the one who could take care of herself,” she recalled. As a result, she grew up “highly independent.” “I did everything myself,” she said. “My parents didn’t have time to go and get a Continued on page 98

www.TheRealDeal.com March 2012 27

In their words...

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

“I don’t tell Jay-Z to do anything. ... He tells me what to do. Listen, when it comes to our engagement, let’s just say he’s the CEO.” Brett Yormark, the CEO of Barclays Center and the Nets, on the rapper’s involvement at the arena. (Wall Street Journal)

“We walked with the clients — a proper older couple — into a Beekman Place apartment around lunchtime to find the seller in the bedroom with a hooker. … Lesson: Always knock.” “If you’re still living with your folks, you’re dead-on-arrival for dating.” Michael Corbett, a spokesperson for Trulia, in response to a survey showing that more than a third of women and 18 percent of men would much rather date a homeowner than a renter. (CNNMoney)

“When I was young, I lived like an old woman, and when I got old, I had to live like a young person.” Designer Diane von Furstenberg, about her Meatpacking District penthouse at 874 Washington Street, a building that also houses her company’s corporate headquarters. (Architectural Digest) 28 March 2012 www.TheRealDeal.com

Bond New York Senior Vice President Mary Lou Currier, describing her craziest on-the-job experience. (Daily News)

“You bet I’m a fat cat.” Kenneth Langone, financier and foundfound er of the home im im-provement chain Home Depot. (New York Magazine)

“Architects tend to treat the [suburbs] as a backward, inhospitable wilderness.” Architecture critic Justin Davidson, in a review of the exhibit “Foreclosed: Rehousing the American Dream” at the Museum of Modern Art. (New York Magazine)

“On day one, we didn’t know we were going to end up in Zuccotti Park. We were mobile. We were going to try to take the bull, but the bull was already occupied. By the police.” Vlad Teichberg, one of the leaders of the Occupy Wall Street movement. (Vanity Fair)

“Everyone wants to do TV shows about it. … I don’t really care if I sell it. Brokers pursue me ad nauseam.” Interior designer Christopher Hyland, whose Chelsea apartment is listed for $22.45 million and has appeared on “Selling New York.”

“I hitched my wagon to the most incredible group of dreamers you’ll ever imagine, including the dreamiest dreamer of all, the mayor of this city, Mayor Bloomberg.” Architect Frank Gehry, at the opening of Pershing Square Signature Theater, which he designed for Related’s residential project MiMA. (Observer)

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DEVELOPMENT

Down by the river

Developers take advantage of government deals, staking fortunes on revival of city waterfront BY JAKE MOONEY

n real estate, waterfront views are gold. But for decades, much of New York City’s waterfront has been home to industrial sites that have been inaccessible to the general public — and to real estate developers. That’s changed a lot under the Bloomberg administration, which has put waterfront development at the top of its agenda. Indeed, hundreds, if not thousands, of units of housing abutting the city’s waterways have come online in recent years — some at private development sites and some that

the city or state have helped nudge along. Today, developers throughout the city are taking advantage of assistance or sweeteners from the government to build (and plan) projects on longdormant sites. Below is a look at some of the developers who have projects in the works — projects that could be both ﬁnancially lucrative for them and go a long way toward remaking the city’s waterfront.

Brooklyn Bridge Park’s Pier 1, where seven developers are vying to build a hotel, a restaurant and residential units.

passenger ship terminal at Pier 57. His ﬁrm, Youngwoo & Associates, beat out Related Companies and the Durst Organization. The pier — which is on 15th Street and the Hudson River in the shadow of the High Line — will include a 170,000-square-foot open-air market, to be housed in recycled shipping containers and managed by Urban Space Management, the company that runs the Union Square holiday market. The $210 million-project will also include a permanent outdoor venue for the Tribeca Film Festival and a 90,000-squarefoot entertainment and cultural center on the ground ﬂoor, as well as a restaurant. The now-empty terminal is listed on the National Register of Historic Places, and the city and developers are seeking state and federal historic tax credits — the latter of which can be used to pay 20 percent of approved restoration costs. The Hudson River Park Trust has estimated the total cost of the project at $210 million, though neither the trust nor Youngwoo would say how much the developer is spending.

Basketball City/Pier 36 M A N H AT TA N

Pier A Developer: The Poulakakos family and the Dermot Company

he three-story, Victorian-era building on the 125-year-old pier adjacent to Battery Park has been vacant for years. But it’s now undergoing $36 million in cityfunded repairs. Once those are done, the developers will pay to retroﬁt the 39,000-square-foot building to include restaurants, entertainment venues and an outdoor public plaza. The Battery Park City Authority last March approved a 25-year lease for the Dermot Company and restaurateurs Harry and Peter Poulakakos — who already own a slew of eateries Downtown, including Harry’s Steak and Financier Patisserie. According to the New York Times, the partners are planning an oyster bar and beer garden for the ground ﬂoor, and a high-end restaurant along with an event space upstairs. The cost is still up in the air. “We’re still working our budgets out, but restau30 March 2012 www.TheRealDeal.com

rants aren’t cheap to build these days,” Peter Poulakakos told The Real Deal. And solidifying the pier has taken longer (and has cost more) than ofﬁcials originally predicted. Indeed, the latest estimate from the authority, which took over the pier in 2008, is that structural repairs won’t be done until late this year. At that point the developers can start their work, which is projected to take about another year. Dermot and the Poulakakoses are also teaming up at the nearby Battery Maritime Building.

Battery Maritime Building Developer: The Poulakakos family and the Dermot Company

n 2007, the NYC Economic Development Corporation chose the developers to carry out a $110 million interior renovation of this landmarked structure, a century-old Beaux-Arts ferry terminal with an ornate metal façade. The EDC has already spent $60 million renovating the exterior of the city-owned building, which stands next to the Staten

Island Ferry terminal at the tip of Lower Manhattan and still serves as the terminal for ferries to Governor’s Island. But now the developers are preparing to renovate the interior, which is set to include a boutique hotel, a specialty foods market and a 10,000-square-foot rooftop restaurant. As at Pier A, the Poulakakos family would operate the restaurant. Under the agreement with the EDC, the developers are leasing the building for 49 years with ﬁve 10-year renewal options. Peter Poulakakos said the project is still in the design phase, adding that no operator has yet been selected for the hotel, which will have about 50 or 60 rooms. The developers hope to start construction soon, he said, but the process will take about two and a half years.

Pier 57 Developer: Youngwoo & Associates

he Hudson River Park Trust, which oversees the Hudson River Park on the West Side, in 2009 granted developer Young Woo the right to develop the long-unused

Developer: Basketball City

he sports and entertainment company — which was forced to leave its old home at Pier 63 on the West Side in 2006 because of the construction of Hudson River Park — is moving across town into a renovated, city-owned warehouse at Pier 36 on the waterfront just north of the Manhattan Bridge on the FDR Drive. The company will have about 70,000 square feet of space, and be home to adult and youth basketball leagues and summer camps. The facility, designed by the architecture ﬁrm Cetra/Ruddy, will also be available as an event venue, including for corporate events, according to its website. Basketball City, which kicked in $10 million for the development, got $2.7 million in city funding in addition to federal New Market Tax Credits, which are loans at favorable interest rates designed to spur development activity. Bruce Radler, Basketball City’s president, would not say how much the credits were worth. He said the project is “almost complete,” though he declined to be more www.TheRealDeal.com 2011 PHOTOGRAPH FOR THE REAL DEAL January BY DEREK ZAHEDI

DEVELOPMENT speciﬁc. Extensive work on the pier, he said, had already taken longer than expected — about a year and a half.

South Street Seaport/ Pier 17 Developer: Howard Hughes Corp.

etails are scant, and the appropriately named Howard Hughes Corporation has kept a low proﬁle, declining to comment. The company, though, is reportedly planning a redeveloped and bigger mall, with some open public space. Because the seaport is in a historic district, the plans would require the approval of the city’s Landmarks Preservation Commission.

Lower Manhattan’s Pier A, which will be converted into a space for restaurants, entertainment venues and an outdoor public plaza.

Riverwalk on Roosevelt Island Developer: Hudson Companies and Related Companies

hen completed, the project will include a stunning 2,000 units of housing — a combination of rental and condo units along with dormitory-style housing for employees at New York University, Memorial Sloan Kettering Cancer Center and Weill Cornell Medical College. The units will be spread across nine buildings along the island’s Main Street, near the Queensborough Bridge. The developers, who have invested a total of $800 million, started construction in 2002, and six buildings, with 1,200 units, have already been ﬁnished. The completed rental buildings on the site — Riverwalk Crossing and Riverwalk Landing — are fully leased, said David Kramer, a principal at the Hudson Companies. Of the completed condo buildings, he said, Riverwalk Place is fully sold and another, Riverwalk Court, is 85 percent sold. The seventh building, Kramer said, could start construction within the next year. That building will likely be a combination of open-market rentals and institutional housing, he said. Meanwhile, in August, the developers took over operation of all the island’s retail properties. The state-controlled Roosevelt Island Operating Corporation spent $4.56 million on infrastructure for the site, Kramer said, noting that the developers also contributed some infrastructure costs. B R O O K LY N

Brooklyn Bridge Park Pier 1 Developer: To be determined

rooklyn’s waterfront has a long history of industrial use. But in recent years, the piers adjacent to Brooklyn Heights and Dumbo have been awaiting construction of this 85-acre park. Its ﬁrst sections, on Piers 1 and 6, opened in 2010. The government-controlled Brook-

Manhattan’s Pier 57 will have an open-air market, an outdoor venue and an entertainment and cultural center.

lyn Bridge Park Development Corporation is evaluating proposals from seven developers to build two buildings adjacent to Pier 1, which is located just south of the Brooklyn Bridge. The buildings would include a 170to-225-room hotel, plus 150 to 180 residential units, and a restaurant. Some of the biggest and most well-known developers in the city, including Related Companies, Hines, Two Trees, the Dermot Company and TF Cornerstone, are vying for the job. A source, who is not involved with the project but has been briefed on it, said last month that the BBPDC is negotiating with three ﬁnalists and plans to choose one of them based on how talks progress. Ellen Ryan, the BBPDC’s vice president of strategic partnerships, declined to comment on the details, but said that the organization is “in the midst of negotiations,” adding, “We hope to wrap up the process in the spring.” The development is intended to help pay for long-term maintenance of the 85-acre park. The selected developer will pay rent under a long-term lease, along with so-called “payments in lieu of taxes,” which will be earmarked for park upkeep. (One Brooklyn Bridge Park — the condo conversion which went on the market a few years ago and is just south of Pier 1 — does the same now.) Though there are no direct public subsidies for the development, the site offers a unique opportunity for developers, said Chris Havens, founder of the Brooklynbased Creative Real Estate Group. “It’s on the water, on a park — these things don’t happen every day,” Havens said. The selected developer will enter into a longterm lease with the BBPDC.

Domino Sugar factory Developer: CPC Resources Once redeveloped, the Battery Maritime Building will include a boutique hotel, a specialty foods market and a rooftop restaurant.

A rendering of Hunter’s Point South in Long Island City, which will ultimately include 5,000 units of housing.

The former Staten Island Naval home port will soon have 885 units of rental housing and 30,000 square feet of retail.

he redevelopment of the 1882 refinery, a city landmark on the Williamsburg waterfront, will include 2,200 units of housing — 30 percent, or 660, of which will be affordable. Current plans, approved by the City Council in 2010, call for the housing to be spread throughout the original refinery’s three buildings, and four new towers, two at 30 stories and two at 34 stories. The project is also slated to include 274,000 square feet of retail and community space and 99,000 square feet of offices, plus parks and a waterfront esplanade. CPC Resources, the for-profit development arm of the nonprofit Community Preservation Corporation, reportedly plans to invest $1.5 billion to $2 billion (the developer declined to say exactly how much it would cost). It’s estimated that construction of the full project will take until 2021, with only one building, on Kent Avenue, being built in the first phase. “There will be government subsidies to achieve affordable housing,” said Lloyd Kaplan, a spokesman for the developer. Continued on page 94

www.TheRealDeal.com March 2012 31

Cinema crunch As the number of movie screens declines in NYC’s pricey real estate market, niche theaters replace multiplexes BY CATHERINE CURAN hen a movie theater dies in New York City, fans don’t let it go easily. Witness the rise of Washington Heights Arts & Movies. The 600-person volunteer movement is dedicated to convincing owner Lloyd Goldman of BLDG Management to reopen the Coliseum Cinemas in Washington Heights, which closed at the end of 2011. “We see the Coliseum’s potential to become an economically viable, world-class cinema,” said Jeff Hoppa, a Washington Heights resident and cinephile who kicked off the movement with a “Save the Coliseum!” Facebook page late last year. The group is working on a proposal to present to BLDG Management, which did not respond to a request for comment. There’s a reason New Yorkers like Hoppa fight so hard for their movie theaters: NYC lost 22 percent of its cinemas between 2001 and 2010, according to the U.S. Bureau of Labor Statistics. Manhattan was hit especially hard, losing 11 of its 41 theaters — a 27 percent decline. The movie business is suffering nationwide, but New York City’s drop is far steeper than the average decline of about 10 percent nationally in the same time period, according to the bureau’s data. These days, theater operators are getting squeezed from all sides — by distributors, by competition from streaming video on computers and mobile devices, and by a lingering recession that’s crimping consumer spending. And New York City theaters are especially vulnerable, because pricey real estate here tempts owners to sell and developers to convert cinemas to more profitable uses. At the landmarked RKO Keith’s Theater in Flushing, Queens, for example, developer Patrick Thompson recently received city approvals to turn the 83-year-old property — which closed in the ’80s — into a 17-story, 357-unit residential rental building. (Development plans by a prior owner, Shaya Boymelgreen, fell through.) And in January, Long Island developer the Parkoff Organization bought the Chelsea Clearview Cinemas building on West 23rd Street for $35 million, according to public records. Parkoff hasn’t yet said what it plans to do with the building, though the theater is continuing to operate for now. Meanwhile, there hasn’t been a highprofile deal for a new large multiplex in Manhattan since Magic Johnson Theaters brought stadium seating — and nine screens for first-run movies — to Harlem’s 125th Street in 2000. The theater, which is now part of AMC Theaters, anchors the $66 million, 275,000-square-foot Harlem USA

32 March 2012 www.TheRealDeal.com

retail complex that also houses retailers Old Navy, Nine West and Modell’s. “It’s not like nobody’s tried,” said David Firestein, managing partner of the New York division of Atlanta-based retail brokerage Shopping Center Group, who

to provide unobstructed screen views. But there has been activity across the city in recent months, centering on somewhat smaller neighborhood theaters like the seven-screen, 22,000-square-foot Williamsburg Cinemas now under construc-

Creative Real Estate Group, a Brooklyn real estate brokerage. When they do splurge on a movie, New Yorkers are seeking a truly ﬁrst-rate experience, he said, either with the latest, cutting-edge digital technology, or higher-quality food than the standard popcorn and nachos. “The future is entertainment where you get better concessions, beer and food,” added Havens.

A rendering of Williamsburg Cinemas

Nitehawk, a new cinema that opened in Williamsburg in June.

Chelsea Clearview Cinemas

There hasn’t been a high-profile deal for a new large multiplex in Manhattan since Magic Johnson Theaters brought stadium seating — and nine screens — to Harlem’s 125th Street in 2000. helped bring AMC to Times Square with a 25-screen multiplex in 2000. “A bunch of deals have gotten close, but in 10-plus years, they haven’t gotten one done.” The lack of new multiplexes speaks to the unique challenges for movie theaters in New York City, where’s it’s difficult to find a large-enough space at a rent low enough to turn a profit. Theaters also have the extra challenge of requiring column-free spaces

tion at Driggs Avenue and Grand Streets. Other new ventures provide more than just movies, like Nitehawk, a new 8,000square-foot, three-screen theater in Williamsburg. The cinema, which opened in June, serves dinner to patrons while they watch ﬁlms. These days, “it’s very hard for movie theaters to make money [simply] showing ﬁlms,” explained Chris Havens, CEO of

Sources said other, smaller entrants into the market — including an independent movie theater operator from Italy, another watch-and-dine concept, and a specialized 3-D theater where patrons would not have to wear 3-D glasses — have been scouting Manhattan and Brooklyn. Manhattan may also get a new movie theater at Riverside Center, the southernContinued on page 96

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PROFILE

Establishing a beachhead With $850 million in listings, Hamptons’ brokerage founder Andrew Saunders is taking on his corporate-owned East-End rivals

BY LEIGH KAMPING-CARDER or Andrew Saunders, founder of the Hamptons residential brokerage Saunders & Associates, it’s impossible to have an anonymous lunch at the Bridgehampton bistro, Pierre’s. Over French onion soup and poached salmon, Saunders points out Alice Bell, a senior vice president at competing brokerage Sotheby’s International Realty. He congratulates a diner at the next table on the half-marathon she recently finished. And he spots a former senior partner at Allan Schneider & Associates, acquired by another competitor, the Corcoran Group. Sure, it’s a small town, but by the end of the meal, the run-ins are enough for Saunders to jokingly compare the eatery to Rick’s Café Américain, the preferred hangout of scoundrels in the movie “Casablanca.” Saunders, 49, has been developing properties in the Hamptons since the mid-1990s, but it is his growing residential brokerage that has made him if not exactly a household name, then at least a prominent figure in East End real estate circles. Saunders opened the brokerage in October 2008, aiming to combine the flexibility and boots-on-the-ground management of local ownership with the lavish offices and costly advertising spreads of a deep-pocketed corporate firm. So far, the strategy appears to be taking hold. Saunders started with two agents and a property in Bridgehampton that he bought and converted to his first brokerage office, using money he made building and selling Hamptons residences. Now, the firm holds $850 million in exclusive sales listings, plus an additional $150 million in co-exclusives, Saunders said. The firm has gotten a reputation for focusing on the high end — of the deals that come into the office every week, Saunders estimated, about half are under $5 million, with the rest ranging from $5 million to $20 million and up. Most of the firm’s current listings are rentals, such as the Norman Jaffe-designed five-bedroom in Southampton, which is asking $400,000 for the summer. The firm has 80 agents, about twothirds of whom are in Bridgehampton, with the remainder in Saunders’ second office, a 3,300-square-foot space in Southampton, which opened this past May. He’s planning to open a third lo-

34 March 2012 www.TheRealDeal.com

cation in East Hampton in 2013, with at least 40 agents, including some from the Southampton office. He is also considering expanding into Westhampton. “It was remarkable to me how quickly Andrew Saunders built a major player of a firm in the Hamptons,” said Douglas Heddings, president of the Heddings Property Group, which opened its first Hamptons office last April.

a universal multiple listing service. But unlike the city, it also lacks a far-reaching trade group like the Real Estate Board of New York, which goes some way toward establishing standards of conduct and enforcing rules. Still, bigger outside ﬁrms have all planted their ﬂags there. Prudential Long Island Realty, which was owned by Dottie Herman — now CEO

Andrew Saunders, founder of Saunders & Associates, in his Southampton ofﬁce last month.

Saunders has been developing properties in the Hamptons since the mid-1990s, but it is his growing residential brokerage that has made him a prominent ﬁgure in East End real estate circles. “I don’t know what he’s offering his agents, but he also took a lot of agents away from the two big ﬁrms out there,” he said, referring to Corcoran and Prudential Douglas Elliman.

Timing a launch Saunders was fortunate to open at a time when the Hamptons brokerage industry — which is sometimes likened to the Wild West because of the lack of transparency and information sharing about listings — was vulnerable to change. Like New York City, the Hamptons lacks

of Prudential Douglas Elliman — had already opened five offices in the area by the end of the 1990s, starting with a storefront in East Hampton. And by the early 2000s, corporateowned real estate firms such as Corcoran and Sotheby’s, both owned by real estate giant NRT, and the Terra Holdings–owned Brown Harris Stevens took advantage of what was a decentralized but extremely profitable local industry, opening new offices or acquiring homegrown operations. By that time, the local “mom-and-pops” in the Hamptons were facing increasing

technology costs and a pressure to maintain a steady volume of transactions to help weather market fluctuations, according to Diane Saatchi, a Saunders & Associates broker. Saatchi ran Dayton-Halstead, a firm that was partnered with New York City’s Halstead Property, until it was acquired in 2004 by Corcoran, where she worked until joining Saunders in early 2010. For its part, Elliman went on to open nine offices in the Hamptons and the North Fork, while Brown Harris Stevens and Sotheby’s now manage seven and four offices, respectively. Meanwhile, Corcoran’s buying spree extended to encompass not only Dayton-Halstead and Allan Schneider, but also the Hamptons staple Cook Pony Farm Real Estate. When the real estate market started to falter in 2007, Saunders saw an opportunity to start a firm that would close the gap between the behemoths and the mom-and-pops, and also to recruit scores of agents dissatisfied with the new world order. At the time, he was working as a broker for Sotheby’s, which he had joined in 2001, about a year after moving to the Hamptons full-time from New York City. There, he focused primarily on selling residential investment properties to developers, and he said he witnessed firsthand how firms began trimming costs. “They started cutting splits, they stopped investing in the offices, they basically marginalized the broker,” Saunders said, recalling how he would bring clients to the cozy Golden Pear café in Southampton rather than his office. One day he spotted a Bridgehampton furniture store for sale: He bought it for $5 million in January 2008, partly with a mortgage, and converted it into his first office. Several months later, he brought on Gary Nolan, an alumnus of Allan Schneider who was heading up Corcoran’s Hamptons marketing operations after the acquisition. Nolan became Saunders’ impressively titled “director of brand and technology fulfillment” and, with a second Corcoran broker who has since married and left the firm, Saunders & Associates opened for business. Like Nolan, Saatchi was also adjusting to a new rulebook. After waiting out

PHOTOGRAPH BY JIMMY KELLOGG

PROFILE her ﬁve-year non-compete agreement at Corcoran, she jumped over to Saunders — one of several ﬁrms that were courting her. In the last year, her deals have included a $23 million sale of land in Bridgehampton and a $12 million land sale in Sagaponack.

colored hair gelled neatly in place, wearing a V-neck sweater, dark slacks and shiny black dress shoes, Saunders has the air of a relaxed businessman. Which is exactly what he is — despite his 100-hour workweeks. He is also a numbers guy, with the prices of long-ago trades at his ﬁngertips, and a

A rendering of 36 Pointe Mecox Lane in Bridgehampton, which Saunders broker Terry Cohen is listing for $24.995 million.

Saunders broker Diane Saatchi

Saunders broker Jay Flagg

92 Crestview Lane in Sagaponack, which Saunders broker Diane Saatchi is listing for $9.6 million.

38 Dayton Lane in East Hampton, which Saunders broker Krae Van Sickle is listing for $3.15 million

“His timing was exquisite,” Saatchi said. “You can call that brilliance or luck — or a combination.”

Not a ‘training ground’ On a recent weekday, with his pewter-

respect for statistical versus anecdotal evidence. “If you want to make a point, what’s your data? That’s what I always ask,” he said. So it’s no surprise that he’s been deliberate about growing his ﬁrm and its brand,

built on plush offices, coordinated marketing techniques and investments in broker services. At the Southampton office, oversize windows — free of the clutter of property listings common to many storefront brokerages — spill light onto cream-colored sofas, a corridor of tables flanked by desks of Apple computers, and a vaulted ceiling. The décor of the Bridgehampton office is nearly identical, down to the pots of white orchids and the soft drinks in the kitchen. The firm employs an eight-person advertising team, headed up by Nolan, a professional photographer who worked in the art department of Hamptons Magazine before joining Allan Schneider and Corcoran. Saunders said he spent $100,000 on the brokerage’s website domain name, HamptonsRealEstate.com. The soft-spoken Nolan has an almost obsessive reverence for good photography, and regularly books a plane to take East End property shots. For the past three years, he said, he’s taken aerial shots of every Hamptons waterfront property, so that when potential clients walk through the door, he can include pictures of their homes in listing pitches. The marketing team maps out a plan for each property, down to when and where ads will run, and covers the advertising costs upfront, deducting the expense (when a property sells) from gross commissions. This handling of advertising stands in contrast to many other firms, which allocate quarterly advertising budgets based on an agent’s performance in the previous quarter. If Saunders & Associates does not sell the home, the firm eats the marketing costs. Saunders and Nolan consider their system of planning a more equitable one, as well as a time-saver for agents. But it also gives the firm a greater degree of control over how properties are advertised, as well as a chance to promote the brokerage itself. (All marketing materials prominently display the firm’s chocolate brown and robin’segg blue logo.) However, not all of Saunders’ marketing techniques have been successful. Saunders’ purchase of thousands of Internet domain names related to Hamptons real estate — which included local street names, as well as the names of Corcoran powerbroker Susan Breitenbach and top Elliman broker Michaela Keszler — led to accusations of “cyber piracy” in early 2011. The issue garnered some unwanted press attention, including in The Real Deal, and Elliman sued Saunders & Associates in July 2011, alleging the rival schemed to siphon clients from its website. According to Saunders, he bought www. MichaelaKeszler.com under the impression that Keszler was planning to come work for him. An attempt to settle the lawsuit failed,

Saunders said, but he noted that he has not yet been served with the complaint, meaning the case technically never got off the ground. (A spokesperson for Elliman said the firm does not comment on pending litigation.) In the case of Breitenbach, Saunders said that an employee bought www.Su sanBreitenbach.com without his knowledge. He said he’s since reprimanded the employee; the domain name now routes to Breitenbach’s website. Some local brokers say Saunders’ greatest strength is marketing, rather than devising innovative ways to sell Hamptons homes. “I don’t know why everybody’s thinking that there’s some kind of miracle happening,” said Paul Brennan, Elliman’s Hamptons regional manager, who largely declined to comment on Saunders. “We all get up in the morning and put on our shoes and sell real estate. He’s not doing anything differently.” At least one industry veteran claims Saunders is merely copying the Sotheby’s model, focusing on high-end properties and a small number of retail storefronts in key markets. (The firm does market commercial properties, including an East Hampton hotel priced at $30 million, although this sector makes up only a fraction of the current listings.) Saunders has also said that transactions under $2 million are a critical part of his business. Like Saunders & Associates, Sotheby’s has offices in Southampton and Bridgehampton, in addition to East Hampton and Sag Harbor, and covers agents’ advertising costs up front. John Gicking, a Sotheby’s manager in East Hampton, declined to comment specifically on Saunders, but said in an email he welcomed “healthy competition.” One broker disputed Saunders’ claim that his firm was the first to come up with a much-touted postcard-size property flipbook, now a popular format in the Hamptons. In fact, Saunders was not the first broker to address the gap between the corporate players and the mom-andpops. In 2007, Judi Desiderio founded Town & Country Real Estate, opening five offices right out of the gate. The brokerage has since expanded to seven offices and about 125 agents, only one of whom has left for Saunders & Associates, she said. Desiderio has taken a more “bricks and mortar” approach than Saunders, she said. The firm does have agents onsite in more East End locations. But she approvingly noted that the two firms give customers more options in the area. “For the general public, when you deal Continued on page 94

www.TheRealDeal.com March 2012 35

Home builders confront the foreclosure bogeyman BY KENNETH HARNEY ome builders are switching tactics and confronting head-on one of their biggest nemeses: foreclosed houses that not only lure buyers away with deeply discounted prices, but simultaneously depress the appraisal values of newly built homes. At a packed session at the International Builders’ Show last month in Orlando, Fla., consultants and builders said that with gluts of foreclosures in major markets around the country — and more forecast to arrive in the next two years — the time has come to stop being passive and to begin aggressively educating buyers about the often hidden costs of buying foreclosures. In Phoenix, one large builder, Fulton Homes, has put together the equivalent of an online truth squad — an interactive “foreclosure cost calculator” that allows shoppers to estimate the expenses they’re likely to encounter if they opt for a foreclosure. The calculator uses what the company’s vice

president, Dennis Webb, said are commercially available expense averages for acquiring, repairing and outﬁtting foreclosed houses of varying sizes, conditions and price levels in the area. Say you’re shopping for a home to live in, rather than to rent out as an investment. You locate a number of foreclosures at low listing prices. You’re also aware of newly constructed homes that appear

pliances and other improvements — would add another $32,288 to the price. Likely expenses include an estimated $1,063 in appliances, $2,125 in electrical upgrades, $3,613 in windows, $5,525 for ﬂooring and carpeting, $5,695 for cabinets, $1,913 in plumbing, $1,488 for drywall, $1,399 for the roof, $683 for interior cleaning and a long list of others. The cal-

Head-to-head comparison efforts — newly built versus foreclosures — are a strong new marketing trend. to carry higher prices for similar sizes and square footage. The cost calculator prompts you to input the size, price and physical condition of the foreclosures. Say one of them is listed for $110,000 with 2,125 square feet of living space. Based on a driveby, you estimate the overall condition to be fair — not terrible, but not great either. For that foreclosure, according to Fulton’s data, the typical post-acquisition costs — the repairs, new equipment, ap-

culator also identiﬁes possible legal fees, such as $1,500 in eviction costs if the property is still occupied, plus lawyers’ bills for title and lien complications. Next to the calculator — here comes the big sell — Fulton offers a look at some of its own newly built homes that are in the same general price range. They come with none of these add-on costs and instead have extended warranties on construction, appliContinued on page 97

Government briefs Report calls Port Authority ‘dysfunctional’ The Port Authority of New York and New Jersey is rife with poor management and needs a “top-to-bottom overhaul,” according to an audit released by its board last month, Bloomberg News reported. The report called the agency “a challenged and dysfunctional organization suffering from a lack of consistent leadership.” In particular, the cost of the World Trade Center project, which the Port The Port Authority Bus Terminal Authority is redeveloping, has grown to $14.8 billion from the $11 billion estimated in 2008, the audit found. The Port Authority also oversees the Port Authority Bus Terminal and PATH commuter rail line as well as tunnels, bridges and airports in the region. New York Governor Andrew Cuomo and New Jersey Governor Chris Christie asked the agency to perform the audit this summer, when they backed a Port Authority plan to raise tolls on its bridges and tunnels. “This record of historic failure must be reversed,” Cuomo and Christie said in a joint statement. “Steps have already been taken in the last two years, but much more must be done.”

Obama outlines plan to help struggling homeowners President Barack Obama last month detailed his plan — first proposed in his State of the Union address — to allow underwater homeowners to refinance their mortgages with low-interest, Federal Housing Administration–backed loans. To fund the plan, he is seeking congressional approval to tax large banks, a measure Congress has twice rejected in recent years. In addition to the refinancing plan, Obama proposed a Homeowners Bill of Rights, which does not require Congressional approval and which he said would simplify mortgage forms and improve disclosure on costs and fees. But many Republicans denounced Obama’s proposals, making them difficult to pass, the Wall Street Journal reported.

City ends rent subsidies for former homeless In a move some fear could send thousands back into shelters, New York City last month stopped rent subsidies to some 9,000 households of formerly homeless individuals. The state Supreme Court ruled that the Bloomberg administration could terminate the payments after the city lost state and federal funding for the so-called “Advantage” program last year, according to the Wall Street Journal. The Advantage program was intended to help Seth Diamond families make the transition from the shelter system to permanent housing by providing two years of rent subsidies. Seth Diamond, commissioner of the city’s Department of Homeless Services, said in a statement that the subsidy has become too expensive to maintain, but he would “work aggressively to prevent and end homelessness in the absence of state and federal assistance.”

Retail limits proposed for Upper West Side Aiming to help small businesses, the New York City Department of City Planning has proposed limiting the size of retail storefronts on the Upper West Side. If approved, the plan would limit new ground-ﬂoor stores to 40 feet wide and banks to 25 feet, according to the New A Bank of America and Duane Reade at 200 York Times. Putting such West 72nd Street limits in place would discourage banks and chain stores like Duane Reade from occupying space that could be taken by smaller, unique shops, the Times reported. The proposal is currently being evaluated by the neighborhood community board. Compiled by Russell Steinberg 36 March 2012 www.TheRealDeal.com

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The DeMatteis Organizations

Pickier purchasers

With buyers more attuned to construction shortcomings, new condos opt for substance over style in their amenities BY LUCY COHEN BLATTER hile New York’s new development condo market is improving, most developers are not quite ready to bring sexy back. That’s because, unlike boom-time buyers, those in the market for new development units today are more concerned about functionality than flashy amenities. During the flush times of the mid-2000s, new condo buyers sought out brand-name, high-end appliances, along with jaw-dropping amenities and niche details. Now, they are much more intent on making sure fixtures actually work the way they’re supposed to. And because today’s buyers are more educated than ever, they can easily spot the difference between flash and substance. Thomas Elliott, executive vice president at El-Ad Group, the developer of Tribeca condo 250 West Street, said potential buyers are “picking apart” everything from appliances to “sound attenuation.” This pickiness is due not only to the recession, but to the myriad, well-publicized lawsuits that have hit new condos in recent years — a prime example is prolific developer Shaya Boymelgreen, who built more than 2,400 apartments during the boom only to face some 30 lawsuits from buyers complaining of shoddy construction. Buyers are well-versed in these lawsuits, experts said, and are now paying close attention to features like flooring and insulation. “I’ve gotten exponentially more calls over the past year or two years, checking up on new condos,” said attorney Steve Sladkus, who has represented disgruntled buyers in numerous Boymelgreen buildings. “More people are hearing about these nightmare stories, so their antennae are up.” This month, The Real Deal asked experts what’s changed inside new rental and condo buildings since the market crashed. Below, the features today’s buyers view with skepticism, and how developers have re-imagined them to make their projects more appealing.

Flooring fixation These days, many New York City developers are “doing 100 percent, all-hardwood floors,” said Nancy Ruddy, founding principal of the architecture and interior design firm Cetra/Ruddy. That may not sound revolutionary, but it’s a significant change from the mid2000s, when pre-engineered floors — made primarily of plywood and topped with only a thin layer of hardwood — gained popularity due to their lower price and speedy installation process. Those floors spawned hundreds of lawsuits against developers when they started cupping, buckling and shrinking. 38 March 2012 www.TheRealDeal.com

“Sometimes one half of the floor doesn’t match the other one, or the floors are not straight, or they cup,” said Attorney Adam Leitman Bailey, who has represented a number of building residents in lawsuits against developers, including renters at the Moinian Group’s 90 Washington Street, where loose floorboards were among the many complaints. (The developer and renters eventually settled.)

stalled heating and air-conditioning systems in which two rooms shared one pump, Ruddy said. But most buyers didn’t realize that such systems make it easy for sound to travel from one room to another, she said. “Any good architect would tell their client that two rooms should never share one unit,” she said. Now, developers simply can’t get away with two-for-one heating systems, she said,

Now, buyers are more interested in getting the most for their money. “It’s really more about the experience and the quality,” he said. While brands that became popular in the mid-2000s — like Viking and Miele — are still expected in many new condo kitchens, Ruddy said she’s seen fewer “auxiliary appliances,” like vegetable steamers built into countertops, and more “basic” ones instead. “A lot of people just don’t use these niche kitchen appliances,” she said, adding that many buyers are no longer willing to pay a premium for them. Meanwhile, there is more demand for the appliance “column,” a method used to consolidate small appliances such as cof-

“It’s nice to have places within the apartment with floor-to-ceiling windows. But too much is like a whole meal of foie gras.” Dan Kaplan, FXFOWLE Sladkus pointed out that “a lot of newly constructed or gut-renovated buildings have leaking problems ... which causes flooring to buckle and become discolored.” In fact, floors have become such a hotbutton issue that Ruddy said she now tells her developer clients to hire special flooring consultants. And while walnut and other “exotic” woods were popular during the boom, buyers have now discovered that “in the Northeastern climate, the best wood to use is oak, which is harder than others,” Ruddy said. Nowadays, she said, developers are using oak more often, and experimenting with different plank widths, finishes and patterns rather than different types of wood.

Getting heated During the boom, many developers in-

because buyers know to look out for them. Meanwhile, it’s becoming more common to install humidifiers along with air-conditioning and heating units. “People in New York complain about dry heat, and humidifiers help that,” she said, noting that she’s currently working on a residential project involving humidifiers. The details are still under wraps, she said, but the project will come to market in the second quarter of this year.

The kitchen sink When it comes to kitchen appliances, labels are declining in importance, said Eran Chen of Manhattan-based ODA Architecture. “Luxury brands were all the rage during the boom,” he said. “It was all about the name-dropping.”

fee “systems” in one tall space-saver, rather than dispersing them throughout the kitchen, she said.

Washer/Dryers Unvented washer-dryers became the norm in many luxury condo projects in the mid-2000s. These appliances, which run on electricity instead of gas, were popular because they’re inexpensive for developers and stackable (a good space-saving touch). But unvented dryers also take much longer to actually dry a load of clothes, and therefore require more energy, Ruddy said. As a result, buyers quickly became disenchanted with them. These days, home-seekers demand traContinued on page 94 ILLUSTRATION FOR THE REAL DEAL BY PETER BONO

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Reality bites

With two shows starring NYC brokers debuting this month, a look at the history of real estate on unscripted TV

W BY JANE C. TIMM

hen MTV’s “The Real World” premiered in 1992, few could guess that reality shows would eventually come to dominate prime-time TV, with monster hits like “The Bachelor” and “Jersey Shore” boosting networks’ ratings. Manhattan real estate is a cutthroat business often involving big dollar signs, so it’s no surprise that New York brokers have made their way onto a slew of reality shows since then. At ﬁrst, real estate agents tended to be bit players on these shows — like

when Citi Habitats’ Karla Kupiec rented Khloe Kardashian an apartment on “Keeping Up with the Kardashians.” Others took breaks from the real estate business in pursuit of becoming the next “Apprentice” or winning “Survivor.” But networks are now producing shows focused explicitly on New York real estate, starting, of course, with HGTV’s “Selling New York” in 2010. And March will see the premiere of two new real estaterelated reality shows on Bravo — “Million Dollar Listing New York” and “Love Broker.” This month, The Real Deal traced the evolution of New York real estate brokers on reality TV.

Survivor, 2002 After two seasons on “Survivor,” Manhattan isn’t the toughest island Corcoran’s Shii Ann Huang has worked on. The first Asian-American to appear on the CBS show, Huang was on the Thailand season in 2002 and again on the “all-stars” season in 2004, when she was the 11th player voted off the island and won a car. Huang started her real estate career shortly after her second “Survivor” stint. “I called up Barbara Corcoran and said, ‘I was on ‘Survivor,’ give me a job!’ ” Huang recalled. Now a Corcoran senior vice president, she is currently listing a $615,000 apartment at the Novo condominium in Brooklyn and a $9,500-per-month rental at 108 Waverly Place in Greenwich Village. It turns out “Survivor” was good training for real estate, she said, because they both have “a lot of different personalities and a lot of big egos.” Huang is not the only “Survivor” real estate alum in New York. Corcoran Group agent Matthew “Sash” Lenahan was one of the final three contestants on “Survivor: Nicaragua” in 2010. According to a Corcoran spokesperson, he left the firm in 2011; it’s not clear where he’s now working.

The Bachelor, 2004 Real estate pros are often selected for reality-show stardom based on their romantic potential, not just their business acumen. In 2004, for example, Halstead Property agent Jay Overbye appeared on ABC’s “The Bachelor,” competing against Nevada ﬁsherman Byron Velvick for the starring role on the show. Overbye was eliminated, leaving Velvick to continue the season, but the Halstead executive vice president said he has no regrets, and even got a townhouse listing as a result of his participation. The daughter of a potential client ”recognized me from the show,” he said, “and that was my in.” Would he be a “Bachelor” again? “I’m living with my girlfriend,” he said, “so no!” J Companies Construction Manager J.P. Rosenbaum had 40 March 2012 www.TheRealDeal.com

From left: Ryan Serhant, Michael Lorber and Fredrik Eklund in “Million Dollar Listing New York”

better luck in 2011 on “The Bachelorette,” when star Ashley Herbert chose him to win the show — and her hand in marriage. The two are now planning their wedding, and as The Real Deal reported, recently moved into a rental apartment at the Atlas New York on 38th Street in Manhattan.

The Apprentice, 2004 Jennifer Crisafulli made headlines in 2004, when Donald Trump and Prudential Douglas Elliman both ﬁred her in the same week. While appearing on NBC’s “The Apprentice,” Crisafulli complained that she lost a challenge due to bad reviews from “two old, Jewish fat ladies ... the pinnacle of the New

York jaded old bags.” The Donald ﬁred her shortly thereafter, and Elliman, reportedly offended by her comments, did the same. Crisafulli moved back to her native upstate New York after getting married in 2005, and has stayed under the radar since. Her LinkedIn page describes her as a “Producer and Editor of Photography/Public Speaker/ Graphic Illustrator.”

Date Patrol, 2004 For Bond New York’s Jodi Rothman, TLC’s “Date Patrol” was a crucial step on her way to a career in commercial and residential real estate. In 2004, the show followed a mid-20s Rothman, who worked in marketing at the

time, around New York for a month. On the show, she worked with communication, style and body language coaches to improve her dating prospects. “Using the skills I learned, I met my husband a year later,” she told The Real Deal. “He was the one who told me to get into real estate!”

House Hunters, 2005 In 2005, Coldwell Banker Hunt Kennedy’s Edward Joseph appeared on an episode of HGTV’s “House Hunters,” helping a client find a fixer-upper apartment. It was a fitting choice: Before he worked in real estate, Joseph was an actor who appeared on soaps like “One Life to Live.” Now at Brown Harris

“MILLION DOLLAR LISTING NEW YORK” PHOTOGRAPH COURTESY OF BRAVO

Stevens, Joseph said he loved being back on camera. “Everyone was really professional,” he said. Heddings Property Group Senior Vice President Michelle Churchill also appeared on the show in 2008, while at Elliman.

Tim Gunn’s Guide to Style, 2008 Fashion designer Tim Gunn gave Citi Habitats Senior Vice President Caroline Bass a style makeover on his show in 2008, after she responded to a producer’s search for a real estate agent. “It was a little harsh to hear some things,” Bass said — the famously blunt Gunn called her style “frumpy” and “outdated.” Still, the appearance was a “great experience” overall, she said, adding: “Who could not have better style after Tim Gunn?” She repaid the favor a few months later, when she helped Gunn purchase a $1.5 million, twobedroom condo on the Upper West Side.

ers a week, according to HGTV. And unlike some reality TV, it is never sensational, said series regular Deborah Luppard of Warburg. “We’re not egging people on to do stupid things,” she said. “It just feels like someone following me around while I do my job.” Warburg President Frederick Peters said the show has been incredibly beneﬁcial for business. Meanwhile, the dog-toting Kleier Jennifer Crisafulli

busy enough with a Manhattan-based design ﬁrm and seven kids, they signed on to star in the Bravo reality show “9 by Design” in 2010. It was shelved last year, but HGTV picked up a new show about the couple, which premiered last summer. Called “Home by Novogratz,” this iteration focuses more on the design business and less on the Novogratz offspring. Currently ﬁlmCorcoran’s Shii Ann Huang

Sweet Home Alabama, 2011 Bond New York’s Michael Chadwick ﬁnished in the top 10 last year on “Sweet Home Alabama,” a dating reality show on Country Music Television. In addition to renting apartments in Midtown West and the Upper West Side, Chadwick is an actor who recently starred in an off-off Broadway production entitled “The Stranger Inside.” To him, “Sweet Home Alabama” felt like a “paid vacation,” he said. Back in New York, Chadwick’s acting chops are good for business — he recently started showing apartments to a paparazzo he met on the red carpet.

Jennifer Zucher (right) and Lori Zaslow with a client on “Love Broker”

Keeping Up With the Kardashians, 2009 The cost of New York City real estate can be shocking — even for the luxury-loving stars of E!’s “Keeping Up with the Kardashians.” Citi Habitats agents Carla Kupiec and Tim Drucker learned that the hard way in 2009, when Khloe Kardashian (before her marriage to basketball star Lamar Odom) hired them to ﬁnd her an apartment for a temporary stay in New York. As the cameras rolled, the two agents showed the California native everything from a $20,000-per-month townhouse on Greene Street to a $1,500 basement apartment in the East Village, as she gaped at city prices and tiny studio apartments. “We walked into a room and I said, ‘This is called a studio,’” Kupiec recalled. “And she goes, ‘So, I eat in the same room that I sleep?’” After ﬁlming the episode, the team eventually found her a two-bedroom downtown for around $5,000 per month.

Love Broker, 2012 (premieres March 5) After a decade of ﬁnding people homes, real estate broker Jennifer Zucher wanted to help them ﬁnd love, too. So Zucher, a principal at the Upper East Side boutique brokerage Plaza Real Estate Group, started the matchmaking company Project Soulmate with her best friend, Lori Zaslow. Three years later, as The Real Deal reported, Bravo has selected them as the stars of its new reality show, “Love Broker.” Plaza Real Estate is a family business, run by Zucher’s husband and her mother, and Zucher specializes in high-end condo sales. While matchmaking has been a very successful venture, she said she’s “not ready” to give up real estate.

The Real Housewives of New York City, 2010 In 2010, Citi Habitats agent Jason Saft appeared on “The Real Housewives” while looking for an Upper West Side apartment for cast member LuAnn de Lesseps, a.k.a. Countess LuAnn. His appearance was brief — “it’s fun to see a 12-hour day edited down to 2.5 minutes,” he said. While the Countess didn’t end up renting an apartment with him, choosing instead to move in to her Hamptons house full-time, Saft said constant reruns of the show have helped him get clients. He even reconnected with distant relatives, who recognized him on the show and contacted him via Facebook. As for the Countess, who often appears prickly on TV: “She’s very funny, very direct and very charming,” he said.

Selling New York, 2010 The success of “Selling New York” — which features brokers from New York ﬁrms Gumley Haft Kleier, Core and Warburg Realty — proved that a show purely about Manhattan real estate could ﬁnd a loyal viewership. The show now garners roughly 2 million view“LOVE BROKER” PHOTOGRAPH COURTESY OF BRAVO

“Richisms” (“I’m like the George Clooney of Brooklyn”). Awn said he enjoys hamming it up on the show: One scene showed him gardening in a kimono, while sipping Kombucha out of a cocktail glass. He was even proud to be lambasted by Joel McHale, host of “The Soup” on E! “I was picked on by Joel McHale,” he told The Real Deal. “That is next to godliness!” When he’s not on TV, he focuses on rentals in Greenpoint, Brooklyn, which surprises some clients. “I was working with a customer who had seen the show,” Awn said, “and it dawned on them halfway through the appointment.”

Caroline Bass

“Selling New York” cast members from Core

Matthew “Sash” Lenahan on “Survivor: Nicaragua”

Bond New York’s Michael Chadwick

clan (comprised of matriarch Michele Kleier and daughters Samantha and Sabrina) even scored a HarperCollins book deal thanks to their newfound fame. Their novel, “Hot Property,” came out in September.

Home by Novogratz, 2011 As if Bob and Cortney Novogratz weren’t

ing its second season, the show will return next month.

Why Am I Still Single? 2011 Miron Properties’ Rich Awn has appeared twice on VH1’s matchmaking show “Why Am I Still Single?” and he has already earned a healthy 15 minutes of fame for his

Million Dollar Listing New York, 2012 (premieres March 7) Unlike the more sedate “Selling New York,” “Million Dollar Listing New York” focuses on the big egos and behind-the-scenes drama of New York real estate. In one scene, a snake is delivered to the ofﬁce of Nest Seekers’ Ryan Serhant, with an anonymous note that says, “Saw this and thought of you.” A spin-off of the California-based “Million Dollar Listing,” the New York show stars 27-year-old Serhant, Swedish adult ﬁlm star-turned-broker Fredrik Eklund and real estate royal Michael Lorber, the son of Elliman Chairman Howard Lorber. Asked whether the show could deter potential clients, Serhant said he’s not worried. “You can’t please everybody,” he said. Overall, Serhant said the show is a crucial way to set him apart from competitors. “Everyone’s advertising, everyone knows people, and everyone works all the time,” he said. “But not everyone has ‘Million Dollar Listing’ on Bravo.” TRD www.TheRealDeal.com March 2012 41

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THE BROKERING BUSINESS

Occupational hazards

Susan De Franca

A close-up on NYC’s real estate labor force, from how much money brokers are making to who is defecting to new ﬁrms

obs, jobs, jobs: For months, even years now, the topic has been front and center in the minds of many Americans, not least of all President Barack Obama and his Republican presidential rivals. Yet for New York City real estate brokers, getting an accurate picture of their corner of the job market is difﬁcult, since most brokers operate more like small businesses than employees, and make a living based

on commissions, not regular paychecks.

This month, The Real Deal dissects the city’s real estate labor force, from the major broker moves of the past year to the rise and fall of incomes and employment rates during the boom, bust and recovery. Because they are independent contractors, real estate brokers and agents are somewhat insulated from the mass layoffs that occur in other industries when the economy suffers. But they do suffer from lost earnings. For the majority of agents and brokers — those who are not on staff and don’t own their own firms — commission splits and deal volume are the key variables that determine how much money they make. That, of course, leaves them vulnerable to fluctuations of activity in the sales and rental market. While newbies eager to profit from the overheated market tried their hand as real estate agents during the mid-2000s, the financial collapse forced those agents to take flight. But more-experienced brokers have survived — and even thrived. “There are a lot of people who get broker’s licenses and then when the economy slows down, when the sales

Vickey Barron

activity slows down, they just stop functioning [as brokers],” said James Brown, a labor market analyst with the New York State Department of Labor.

MiMA

Another potential threat to brokers’ earnings is coming from an unexpected source: the rapidly improving rental market. In the past few months, some customers have begun to balk at the city’s increasing rents and disappearing concessions. As apartment-hunters look to save money, fewer of them are enlisting rental brokers to help find them homes. And thanks to the prevalence of real estate websites and large new luxury buildings with on-site leasing offices, it’s easier than ever before for New York renters to do research on their own. Economic malaise, as well as the presence of several large new brokerages that are aggressively recruiting in the city, has led a number of high-profile real estate pros to hop from firm to firm. This month, The Real Deal charted roughly 30 of the biggest personnel moves of the last year in the brokerage industry. BY LEIGH KAMPING-CARDER

44 Survival of the ﬁttest 46 Movers and shakers 48 Are renters ditching brokers? All stories by Leigh Kamping-Carder www.TheRealDeal.com March 2012 43

THE BROKERING BUSINESS

Survival of the ﬁttest Brokers beat out agents in an evolving market

BY LEIGH KAMPING-CARDER obody really grows up saying, ‘I want to be a real estate agent,’” said Fanny Montalvo, managing director of sales at residential brokerage A.C. Lawrence & Co. and a former information technology recruiter. Still, “a couple years ago everybody was getting their real estate license,” she said. “Today, those people are no longer in the business.” This, of course, has been one of the central narratives of the real estate boom-andbust: the surge of inexperienced agents profiting off quick-selling properties, followed by a reorganization of the industry that flushed out newer and less-skilled agents. This month, The Real Deal took a closer look at this oft-repeated truism, examining the state of New York City’s real estate labor force. Data shows that during the downturn, the number of agents (technically called salespeople, agents are the lowest rung on the real estate sales ladder) fell sharply. During the same time period, however, the number of brokers — who have more experience and training than agents — held steady and, in some years, increased. That suggests that the industry did indeed see a survivalof-the-fittest purge of lessexperienced professionals. Plus, data shows that during the downturn, the earnings gap between agents and brokers widened. Now, rookies have begun returning to real estate, but this time around, they are having a much harder time making money, while seasoned brokers continue to reap the biggest rewards. And while compensation is more volatile in the real estate business than it is in other industries, employment in the industry fell less during the recession than in New York City as a whole. Overall, the result of the recent boomand-bust has been that “the rich got richer and the poor got poorer,” said Chris Peters, director of sales at Prudential Douglas Elliman.

ing. That includes 12,073 residential and commercial brokers and 13,600 agents. While the state does not break down which side of the industry those brokers and agents are on, the vast majority are assumed to be residential. To become a licensed real estate salesperson in New York State, individuals must take a 75-hour training course. Licensed brokers must have two years of experience as a salesperson or three years of experience in the industry, and take an additional 45 hours of training. A broker’s license is required to open a brokerage, and it can also communicate prestige or knowledge, but it doesn’t entitle someone to a higher commission split or more earnings than a salesperson. Top residential producers John Burger of Brown Harris Stevens, Carrie Chiang of Corcoran and Raphael De Niro of Prudential Douglas Elliman, for example, are all associate brokers; that means they have

“You had people just drop out of the profession,” said Jonathan Miller, CEO of appraisal ﬁrm Miller Samuel. In comparison, the number of brokers fell only 3.2 percent between 2007 and 2009, from 12,715 to 12,309, and has stayed in the same ballpark since. The number of agents has started climbing again, increasing 7.6 percent between 2010 and 2011, though there are still notably fewer than before the crash. And, enrollment at the New York Real Estate Institute in early 2012 was up 12 percent over the same period the previous year, according to the real estate school’s marketing manager, Marina Tokar. That’s partially because, as The Real Deal has reported, the industry is now seeing an inﬂux of people who have been laid off from other jobs. “They think, ‘Why not? I’ll try this. I don’t have to get hired by another employer,’” said Karin Posvar Picket, a senior vice

dwarfs the number of transactions occurring. There were 13,815 licensed brokers and agents in Manhattan in 2011, but only 10,161 sales of co-ops and condos in the borough, according to appraisal firm Miller Samuel. While those figures don’t include rentals or townhouse sales, it’s clear that many of these new agents cannot be making a living in the business. “You’ve had a surge in new agents ... in a market that isn’t seeing a significant increase in sales activity,” Miller said. “So that’s taken some of the edge off the income potential, simply because there are more agents.” Not only did agents leave the industry, but the ones who stayed made significantly less money than their broker counterparts — and have not bounced back as readily, even in a recovering market. (Since the majority of agents and brokers are independent contractors, their income comes from commissions, rather than salaries.)

“It’s Darwinism at its best.” Eric Barron, Keller Williams NYC

‘Darwinism at its best’ There are now some 25,673 licensed real estate professionals in New York City, according to ﬁgures from the New York State Department of State, which handles licens44 March 2012 www.TheRealDeal.com

the extra training but are not the sponsoring brokers, or brokers of record, for their firms. (Technically, that person is the only one who can be called “a broker,” although those rules are rarely observed in common parlance.) In recent years, the number of agents has fluctuated far more wildly than the number of brokers, suggesting that brokers hung on to their positions in the real estate business, while agents fled the industry. During the financial crisis, the number of agents plummeted, falling nearly 30 percent from 16,928 in 2007 to 11,947 in 2009.

president at the Corcoran Group and 18year real estate veteran.

Income potential But that doesn’t mean these newly minted agents will be able to make a living. In the last year, employment in the New York City commercial and residential real estate industries has been growing at a modest 1 percent, said Jason Bram, a Manhattan-based senior economist with the Federal Reserve Bank of New York, citing state labor department ﬁgures. On the residential side, the number of licensed real estate agents and brokers

Between May 2007 and May 2010, the most recent ﬁgures available, average earnings for brokers in the New York City metropolitan area grew more than 9 percent, from $128,850 to $140,810, according to the U.S. Bureau of Labor Statistics. Average earnings for agents, however, dropped 6 percent during that time, from $84,450 to $79,300. (Since the data include counties in the suburbs, the compensation ﬁgures are likely on the low side for Manhattan.) It’s counterintuitive that anyone’s earnings would increase with the market in a tailspin, but industry experts said because of the hurdles of selling a home during the www.TheRealDeal.com January 2

THE BROKERING BUSINESS downturn, clients placed a premium on brokers’ experience and their expertise. At Elliman, the top 30 percent of brokers made more money the year after the crash than they did the year before, Peters said, “because everyone wanted to hire the best brokers.” Plus, with so many leaving the industry, the remaining brokers beneﬁted from a relative lack of competition. “How many ways can you cut up a pie?” Miller said. “If you have fewer people, everybody gets a bigger slice.” Cathy Taub, an executive vice president at Stribling & Associates, got her associate broker’s license in 2002. Though she conceded that her 2009 sales were down because of slower activity in late 2008, she said that 2010 and 2011 were “very strong years.” “I do think that is due in part to being established in the industry,” she said. “In a challenging market, sellers and buyers feel more secure working with experienced agents and referral business has been quite important.” Meanwhile, the so-called armchair agents, who were used to selling homes with little effort, ﬂoundered in a tougher market, insiders said. “It’s Darwinism at its

Wagner, executive director of leasing at Bond New York. “With experience come long-term relationships. I really believe that in this town especially, the brokers that control the property are the ones that make the most money.”

Number of NYC real estate pros YEAR

R E A L E S TAT E P R O F E S S I O N A L S

2005

120,600

The wider industry

2006

121,700

The real estate industry as a whole accounts for a relatively small slice of New York City’s labor pool, but it can be particularly susceptible to outside economic factors, economists said. As of this past December, 117,500 people worked in real estate in New York City, up from a six-year low of 114,600 in January 2011, according to the federal labor statistics, which count commercial and residential brokers, landlords and others in the tally. Home purchases can be deferred when economic times get tough, unlike grocery shopping or car repairs. Real estate professionals are “not like auto mechanics, where the demand for their services is

2007

123,000

2008

122,100

2009

118,600

2010

116,200

2011

117,500

Source: The U.S. Bureau of Labor Statistics. Numbers include commercial and residential brokers, landlords, appraisers, property managers and others.

Licensed NYC brokers and agents YEAR

BROKERS

AGENTS

2005

11,605

16,062

2006

12,050

16,548

2007

12,715

16,928

2008

12,859

13,456

2009

12,309

11,947

2010

12,139

12,638

2011

12,073

13,600

Source: New York State Department of State, as of December of each year.

Average broker and agent pay YEAR

BROKERS’ PAY

AGENTS’ PAY

2005

$89,830

$71,640

2006

$100,340

$83,990

2007

$128,850

$84,450

2008

$131,130

$87,870

2009

$151,380

$85,490

2010

$140,810

$79,300

Source: The U.S. Bureau of Labor Statistics. Data was collected in May of each year and covers New York City, plus Rockland, Westchester, Bergen, Hudson, Passaic and Putnam counties.

best, isn’t it?” quipped Keller Williams NYC CEO Eric Barron. The brokerages themselves may be partly to blame for the widening gulf in income between brokers and agents, sources said, as some firms focused on filling desks during the boom, without properly vetting newcomers’ abilities. “Many firms believed, ‘Let’s hire and let’s worry about weeding out after the fact,’” said Barron. On the residential rental side, veterans benefited from enduring relationships with building owners, which gave them the ability to “control the listings,” said Douglas

much more inelastic,” said James Brown, a labor market analyst with the state Department of Labor. Economic ﬂuctuations have far more “dramatic” impact for real estate than other industries, he said. But unlike other professions, a drop in sales doesn’t necessarily spell layoffs in real estate, because most brokers and agents are independent contractors, not employees. Instead, “what happens is real estate brokers get paid less,” the New York Fed’s Bram said. New York City real estate has also fared better than real estate nationwide, in terms of sales, prices and its job market. Across

the U.S., employment in the industry declined about three times as steeply as the local rate between early 2008 and 2010, Bram said, citing state and federal labor statistics. That is partly thanks to the high number of rental transactions in the city, compared to the rest of the country, experts said. Not only has the rental market taken off, but rental transactions lend themselves to newbie agents, while experts can fall back on them if they need to, sources said. In a 2009 report, the New York City Labor Market Information Service — a research collaboration between the New

York City Workforce Investment Board and the Center for Urban Research at the Graduate Center of the City University of New York — projected that the number of city agents would grow by 5.8 percent and the number of brokers would grow by 2.4 percent by 2018. “We’re going to be reading over the next several years about the economy increasing, improving, getting better, unemployment coming down, but slowly,” Miller said. “However, housing has the legacy of bad lending practices hanging over it that keeps it from being in lockstep with the economy, until it gets ﬁxed.” TRD www.TheRealDeal.com March 2012 45

The Business

Brokering

The Brokering Business

Movers and shakers

The Real Deal charts 30 of the biggest residential broker moves of the last year By Leigh Kamping-Carder hen it comes to switching firms, some real estate brokers really get around. There is an array of reasons — from a desire for better branding to even a chance to appear on a television show — that drive brokers to jump ship for a new company.

On the recruiting side of things, some brokerages — such as Keller Williams NYC and Town Residential — have a seemingly single-minded focus on growth, prompting numerous personnel shake-ups. But the itch to move companies also depends on how much a broker earns, of course.

A survey released last month by Inman News, which polled nearly 1,370 brokers from across the U.S., found that half of middle-income earners (defined as those making between $30,000 and $50,000 per year) deemed a bigger commission split as the main reason to seek out a new place to hang their license. For high-income earners (those who

make more than $100,000 per year) splits were less important than other concerns, particularly a firm’s technology, support and culture, the survey found. Below, The Real Deal looks at the past year of broker moves, providing a snapshot of 30 of the most high-profile defections and additions in New York City’s residential brokerages.

From: Prudential Douglas Elliman To: Keller Williams NYC Dawn Doherty: The former vice president of strategic development at listing website StreetEasy, Doherty joined Elliman to become its chief digital officer this past May. But she left in December to start her own broker coaching firm and last month joined Keller Williams to become its head of productivity coaching.

From: Leslie J. Garfield & Co. To: Wind Analytics Francis O’Shea: Shortly after selling a $23 million Upper East Side townhouse this past summer, O’Shea decided to quit the real estate business altogether and pursue his longtime interest in renewable energy. TRD reported last month that he snagged a business development position at a wind power software start-up.

From: Corcoran Group To: Prudential Douglas Elliman Madeline Hult Elghanayan: The wife of TF Cornerstone chairman Thomas Elghanayan and a 20-year real estate veteran, Hult Elghanayan joined Elliman as a senior vice president last month. She had started at Corcoran when the brokerage giant acquired the Sunshine Group, a new development marketing firm, in 2002.

From: Core To: Prudential Douglas Elliman Lawrence Rich: Rich has had a zigzag of a year. He left Elliman for Core in August, only to head back to his former firm five months later. Elliman, he said, was more “like a family.” Core CEO Shaun Osher also said Rich wasn’t a good fit for the firm’s boutique culture. “[Rich’s] departure from Core was a benefit to all sides,” he said.

Mark Ripka: Ripka parted ways with Core in November, and was quickly replaced by new hire Reba Miller. But he landed at MNS last month, where he took over as the president of brokerage services. At the time, Ripka said the new gig would give him a bigger say in the vision of the firm.

From: Fox Residential To: Keller Williams NYC Rob Taub: Comedian, news pundit and real estate broker Taub left Fox Residential for Keller Williams in October, apparently to take advantage of the latter firm’s more flexible branding opportunities, although the 70 percent commission splits may have been some enticement.

From: Trump Sales & Leasing To: Keller Williams NYC Rana Hunter Williams: Williams spent 19 years at the Trump Organization’s residential brokerage arm, but last month moved to Ilan Bracha’s Keller Williams, bringing three team members with her, for an executive director post leading the firm’s brand new luxury homes division.

From: Argo Residential To: Keller Williams NYC Zhann Jochinke: Jochinke had apparently planned to open his own New York City franchise of Keller Williams before Bracha beat him to it. Instead, Bracha hired the Argo broker in December as his chief operations officer, overseeing the firm’s day-to-day operations.

From: Brown Harris Stevens To: Halstead Property Trish Martin: Martin didn’t go far in June, when she left her post as a vice president and director at Brown Harris Stevens, leaving to manage several Brooklyn offices at the firm’s sister company, Halstead, which is also owned by Terra Holdings.

From: Halstead Property To: Blu Realty Group Vince Rocco: A former senior vice president at Halstead, Rocco was tapped in January to head up Blu’s second office, a newly opened 12,000-square-foot location on Riverside Boulevard. He brought his business partner, Shane Shimon, with him.

From: Core To: MNS

46 March 2012 www.TheRealDeal.com

From: Barak Realty To: Halstead Property

Jeffrey Tanenbaum: Barak Realty’s top producing sales agent, Tanenbaum became a senior vice president at Halstead in June. A trained surgeon, he’s continued to focus on residential sales, as well as commercial medical properties.

From: Prudential Douglas Elliman To: Town Residential Robert Dvorin: Dvorin, a top-ranking Elliman agent, brought a five-person sales team with him to Town in March 2011, making him one of the earliest headlinegrabbing hires to come aboard Andrew Heiberger’s newest start-up.

The Brokering Business

From: THINK Properties To: Stribling & Associates Jaclyn Boulan: Boulan joined Stribling as a vice president in January after serving as president of sales at THINK Properties, a Miami- and Manhattan-based brokerage.

From: Keller Williams NYC To: Nest Seekers International Regis Roumila: Roumila joined Nest Seekers with two other team members in July, in part to appear on the firm’s “Blend” television show on Cablevision’s Plum TV channel.

From: Citi Habitats To: Halstead Property Sara Rotter: Rotter, who managed several of Citi Habitats’ Downtown offices, decamped for a position as director of Downtown sales at Halstead in November.

From: A.C. Lawrence & Co. To: Bond New York Dean Dunbar: Dunbar was hired to lead A.C. Lawrence’s relocation division in July. But he’s since moved back to Bond, leading the Dunbar Group.

From: New York Institute of Real Estate To: Keller Williams NYC Eric Barron: Barron, formerly a managing director at NYREI, was hired in November to replace Adina Azarian, Keller Williams NYC’s inaugural CEO, in part for his experience with broker education.

From: Bond New York To: Barak Realty Brian Dusseau: In the span of a year, Dusseau moved from Keller Williams to Bond to Barak Realty, where he was hired in November as the director of rentals as that firm expands its rental offerings.

From: Related Companies To: Prudential Douglas Elliman Susan De Franca: Formerly a top sales executive at developer Related, De Franca joined Elliman in September as president and CEO of the firm’s new development marketing arm.

From: Stribling & Associates To: Town Residential Dennis Cusack: Cusack joined Town as a vice president in August but quickly got a promotion when he replaced Paula Busch as director of sales after her exit in January.

From: Prudential Douglas Elliman To: Core Vickey Barron: Barron, a onetime Real Estate Board of New York Rookie of the Year, left Elliman in March 2011 for a managing director post at the boutique Core, on the heels of a couple of other high-profile Elliman defections.

From: R.P. Miller & Associates To: Core Reba Miller: Miller sold her eponymous brokerage, which she founded in 1998, to Core, and came on in November to the firm to replace Mark Ripka as the managing director of sales. The acquisition price was not publicly announced.

Ivana Tagliamonte: Tagliamonte spent just two months at Core before returning to her ex-firm, Halstead, in December. Core’s Osher said she explained her personal reasons for leaving the firm, and “we completely understood.”

From: Prudential Douglas Elliman To: Keller Williams NYC Michael Shapot: Veteran broker Shapot, formerly of Elliman, who closed nearly 80 transactions last year, brought a six-agent team with him to Keller Williams last month, although some of his team members opted not to follow him.

From: Stribling & Associates/Elliman To: Brown Harris Stevens Siim and Rudi Hanja: The fatherand-son team had never worked together as brokers, although son Rudi, who came over from Elliman, had worked as a bookkeeper at his father’s now-defunct firm, Independent Brokers Circle, more than a decade ago. The pair reunited at Brown Harris Stevens in June.

From: Town Residential To: N/A Paula Busch: Busch has faced some upheaval this past year. Formerly a senior-level manager at Corcoran, she left in April to become the director of sales at Town. But in January, she left Town under mysterious circumstances. Town would only say the departure had to do with “personal reasons,” and it was not clear what Busch had decided to do.

From: Adina Equities To: Keller Williams NYC Adina Azarian: In March 2011, Azarian folded her own boutique rental firm Adina Equities into Keller Williams to assume a position as CEO of the local franchise. But in November, she stepped down to a more junior position, taking the title “cultural ambassador,” and Eric Barron took over the top executive post.

From: Prudential Douglas Elliman To: City Connections Realty Linda De Niro: De Niro is the cousin of the actor Robert and the daughter of Jack, the founder of the defunct residential brokerage JC De Niro. She was reportedly working for Robert’s powerbroker son, Raphael, on his team at Elliman. However, in December, she switched to an associate broker post at City Connections.

* Note: In some cases, moving dates refer to the month when the move became public.

From: Core To: Halstead Property

www.TheRealDeal.com March 2012 47

THE BROKERING BUSINESS

Are renters ditching brokers? With rents up, some tenants, especially 99 percenters, do their own research to save on broker fees

BY LEIGH KAMPING-CARDER s New York City homeseekers well know, vacancy is low and rents are rapidly rising from their financial-crisis depths, while many landlords are no longer offering the generous concessions of the past few years. Ironically, this is actually bad news for rental brokers, some industry insiders say. Today’s rapidly improving rental market has caused some customers to balk at higher rents and disappearing OPs, or “owner paid” broker commissions, sources said, although not all renters fall into this category, particularly at the higher end. As apartment hunters look to save money, fewer of them are enlisting rental brokers to help find them homes. “Many, many people decide they’re better off taking a little more time doing the research themselves and organizing their own tour of buildings, rather than writing that other check [to a broker],” said Nancy Packes, a development consultant and head of the brokerage Nancy Packes Inc. There are no statistics available on exactly how many of those New York renters used brokers. But Packes said at luxury buildings marketed by her firm, 25 or 30 percent of rental transactions involve brokers. That’s down by more than half from 60 percent in the months after Lehman Brothers crashed, she estimated. She attributed that drop to the disappearance of incentives — such as a month or two of free rent and the halt of landlords paying brokers commission. In the second half of 2011, the number of rental deals that came with concessions dropped by nearly half, to 7 percent of all transactions, down from 13 percent in the first half of the year, according to market data compiled by Packes. Without these giveaways, a substantial number of renters will sacrifice the services of a broker to save money in these cash-strapped times, she said. New York renters may also be prompted to forgo a broker because there are more options than ever before when it comes to finding an apartment without one. There are rental search websites like Naked Apartments, which

48 March 2011 www.TheRealDeal.com

Naked Apartments CEO Joe Charat (left) and Jay Signorello

MiMA (above) and New York by Gehry both have on-site leasing ofﬁces that make it easy for renters to come in without brokers.

was founded in 2010, and InsideDigs, where tenants can share information about units that will soon hit the market. That’s in addition to StreetEasy, Property Shark, Craigslist and the individual websites of landlords and buildings. Urban Edge, a two-year-old website where property managers like Related Companies and Equity Residential post no-fee listings, recently clocked 1 million annual visitors, twice as many as the previous year. “There is a larger trend where people are doing their own research and going direct,” said Urban Edge cofounder Don Tallerman. According to Naked Apartments CEO Joe Charat, the number of consumers looking for “no-fee” apartments has increased since the fall. The site gets 5,000 to 10,000 daily searches, he said. In late October, about 9 percent of those were for no-fee units, he said. That ﬁgure has been climbing since then, hitting 11.1 percent in late January. Charat said the current disappearance of incentives appears to be one reason renters are less apt to use brokers. “As those go away,” he said, “renters start to question, ‘Can I do this on my own?’”

No broker required Renters looking for doorman buildings have a plethora of new units to choose from, no broker required. Consider Related’s MiMA or Forest City Ratner’s New York by Gehry: Both developments put hundreds of apartments on the market in the last year, using splashy ad campaigns and onsite leasing ofﬁces that accept walk-ins. Of course, these new luxury towers also welcome brokers, who help publicize their buildings and qualify tenants. And in order to encourage the speedy lease-up of their buildings, they still advertise “nofee” apartments and simply pay the brokers themselves, rather than asking renters to do it. Even so, more and more potential renters are now arriving

without brokers, insiders said. Packes, for example, said she has recently advised her developer clients to cut expenses by not offering OPs for the cheapest units at new lease-ups, since those renters aren’t likely to use brokers anyway. “Those homes will be rented by people coming to us through our other marketing outreaches,” she said. Soﬁa Estevez, an executive vice president at TF Cornerstone who oversees leasing operations, said about half as many renters have brought brokers with them to the company’s buildings — which include 2 Gold Street and 505W37 — since December. (She should know — she approves their commission checks.) One reason for this, she said, is that there are fewer new buildings in Manhattan competing for tenants, so developers can rely on advertising and signage to lure residents, rather than depending on brokers to spread the word.

A changing client base As a result of renters’ apparent distaste for paying brokers’ fees, some real estate agents said their clientele has shifted toward more affluent individuals — those who prefer to pay a fee rather than take the time to hunt for apartments themselves. In early January, Barak Realty’s Doreen Fuentes started noticing that more of her rental clients were professionals with “money in the bank.” She said she closed four deals early last month, and noticed that in every case, the newly minted tenant was making a high five- or six-figure salary. Two were former homeowners who had decided to rent, she said. But Gary Malin, president of the mammoth brokerage Citi Habitats, disputed the idea that economic factors are prompting consumers to use brokers less often. At buildings where Citi Habitats is handling leasing, such as New York by Gehry, between 40 and 60 percent of clients visit with a broker, a percentage that has remained fairly consistent in the last few years, the firm said. And while listing information is now readily available online, Malin added, it’s not always as timely or accurate as information direct from brokerages or their agents. In some ways, renters need brokers even more now that inventory is tight and units are being leased at lightning speed, brokers said. “Nobody wants to pay, but what they discover is that through using a broker, a lot of times they’ll find a better deal,” said Brian Dusseau, the director of rentals at Barak Realty. TRD

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Charity cases

Philanthropy can help sellers and firms stand out from the crowd, but it’s not always easy to execute BY BILL WEISBROD house deal is by far the highest price ever hen retiree Helene Berger de- paid for a New York City apartment, reportcided to put her 143 East 18th edly some 66 percent higher than the previStreet townhouse on the mar- ous record-holder. ket last spring, she wasn’t sure how to pick Still, real estate experts said Weill’s offer a real estate broker. to donate the proceeds to charity likely did Then she read a New York Times profile not influence the sky-high sales price. Veteran broker Jacky Teplitzky, a manabout Jason Haber and his two-year-old aging director at Prudential Douglas Ellibrokerage, Rubicon, which donates part of its fee from every sale to a nonprofit orga- man, said she does not believe that “charnization called “charity: water.” ity had anything to do with the amount” of The group’s mission of building clean the sale. water wells in developing countries appealed to Berger’s philanthropic side, and she decided to reach out to Rubicon. After meeting Haber, she was also impressed with his real estate acumen, and decided to list the property with him for $5 million. It sold in December for $4.77 million, after six months on the market. If she hadn’t read the story, Berger said, she never would have contacted Haber. “Frankly, I wouldn’t have known he existed,” she said. Haber is not the only New Yorker mixing philanthropy and real estate. Sandy Weill, former chief executive officer and chairman of Citigroup, made headlines last month by selling Former Citigroup chair Sandy Weill sold his condo at 15 Central Park West his penthouse at 15 Cenfor a record-breaking $88 million, donating the proceeds to charity. tral Park West for a recordbreaking $88 million, after announcing Teplitzky, who was not involved in the that he would donate proceeds to charity. Weill sale, attributed the massive price to And several other new New York City real the fact that the buyer (Russian billionestate firms — including Good Property aire Dmitry Rybolovlev, who purchased and Miron Properties — have committed the penthouse for his daughter Ekaterina) to making regular philanthropic contribu- “wanted a trophy apartment,” and had a tions part of their business models. virtually unlimited budget. High premiums for units at 15 Central Philanthropy is obviously not a new thing for the real estate industry; broker- Park West are not surprising, said Noel ages have donated money and time to chari- Berk, a principal at the boutique brokerty for years. But the trend is currently on the age Mercedes/Berk Private Real Estate who upswing, industry insiders said, especially also lives in the building. at new brokerages, which are likely looking “There are no other new condominiums to set themselves apart from the competi- on Central Park West,” Berk said. “The vast tion in a difficult market. majority are co-ops and they’re old buildFirm heads said charitable giving boosts ings. This has all the attributes.” morale and promotes workplace bonding. She added that prices at 15 Central Park But it can also raise firms’ visibility to help West have doubled in value from the origiget the attention of clients like Berger. nal pre-construction pricing in the mid“Nobody signs an exclusive with us be- 2000s. cause of charity,” Haber said, but “it gets us Weill’s offer of charitable giving may not in the door.” have impacted the final price of the unit, It’s difficult to measure the impact of but it likely helped draw more attention to charitable giving on real estate transac- the listing. tions. When Weill put the penthouse on the For example, the $88 million Weill pentContinued on page 96

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“Nobody signs an exclusive with us because of charity ... but it gets us in the door.” Jason Haber, Rubicon

www.TheRealDeal.com March 2010

all our buildings. This was a city law; it’s to prevent water from the building from contaminating the city’s water supply. These systems are laudable, but they can cost a building anyCompany: President, Kaled Management where from $20,000 to $50,000, and they reduce the water pressure, so we had to go Age: 58 out and get booster systems. We manage Hometown: Forest Hills, Queens properties all over the country, and New York is probably the most difficult place to Currently living in: Old Westbury, manage properties.

Vital Stats:

Name: Ed Kalikow

By Jane C. Timm

Long Island

Building blocks How many buildings do you own? In New York, we currently own and manage 20 buildings with 2,000 apartments — mostly six-story structures in Queens. We also do third-party management for 4,500 units in all the boroughs, Nassau and Suffolk. The buildings range from 50 to 300 units. Our smallest is our newest purchase, 113-117 Elizabeth Street in Little Italy, with 30 units. Our largest is Briarwood Gardens, with 295 units. We also own land and about 1,500 rental apartments outside the New York area.

Family Affair How are you related to developers Peter and Richard Kalikow? The business was started by my grandfather Joseph. Joseph had three sons: my father Sidney, Peter’s father Harold and Richard’s father Nathan. The three brothers were in business together until 1968. Everyone decided they wanted to go their separate ways, and we split up the holdings.

When did you get started in the family business? I started out from the womb! No, I started working actively with my father in 1978 after I graduated from Hofstra Law School. I also spent summers working construction on buildings we developed in Queens and we still own — I’ve seen them from holes in the ground to where they are today. … Today, my son Gregory is in the business — he’s the fourth generation.

If you knew you were going into real estate, why did you go to law school? I wanted the ability to think like a lawyer, and also to be able to review documents and understand the concepts without having to solely rely on the professionals we hire.

What’s the best thing? It’s a difficult business, but if you do it well and with honesty and integrity, it pays the bills and you make a couple dollars.

Strangest request a tenant has ever made? We’re being sued right now because we tried to keep a dog out of a build building. The tenant is suing as a human rights complaint because he was apparently sick or sad, and the dog cheered him up. He lived in a petfree building and snuck the dog in. It’s an ongoing case.

Tenant horror story? A few years ago at a building in Elmhurst, a tenant had a space heater [which fell over] and set the building on fire. It was a five-alarm fire, and we had to vacate 66 families the day after Christ Christmas. I was on vacation in Puerto Rico, watching my building on fire on the news. There’s nothing that makes you feel more helpless.

The bottom line How has the recession impacted your business? We’ve done apartment projects, mixed-use, condo projects and land developments in the Carolinas and Florida, and we’re doing a lot less of it [recently].

Tell us about your newest purchase, 113117 Elizabeth? [It was] our first New York acquisition in over 20 years. It was a good choice for us because it was a property that needed a little more aggressive man management and some renovations. We are definitely in acquisition mode, but there’s just so little product on the market. This was an off-market deal. We’d buy more buildings, if the right deal came around. We had no difficulty getting a loan — multifamily is the fair-haired investment; it’s the easy thing to get financed.

— Kalikow’s New York properties

Landlord life Tools of the trade you can’t live without? There are a lot more tools today than when I started out. I think the most effective is the ability to monitor our properties 24/7 — the boilers, the water, security systems. We can adjust the boilers from our home computers! We also have a program that whenever a violation is put up on the city’s website, it notifies us — long before the city does — and that helps us stay on top of these things. There’s no substitute for kicking the tires, but it’s a really useful tool.

What’s the most challenging part of owning an NYC building?

113 Elizabeth Street

Trying to stay on top of the everchanging regulations. We recently had to change the pressure valves in

52 March 2012 www.TheRealDeal.com RealDeal.com

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PROFILE

Lutnick’s big hedge With two new firms under his control, Howard Lutnick’s BGC Partners looks to launch property derivatives market — and he is not alone BY ADAM PINCUS oward Lutnick’s announcement last month that his firm BGC Partners would buy distressed brokerage Grubb & Ellis through a Chapter 11 bankruptcy moves the conversation from why he’s getting into the commercial real estate game to how big a company he wants to build. The purchase announcement came four months after the financial brokerage bought real estate services firm Newmark Knight Frank, and just weeks after Lutnick boasted on Bloomberg Television that he hoped to someday capture “25 percent of the [commercial real estate] market share.” While executives at the three firms are no doubt strategizing behind the scenes on how to combine the companies into one, Lutnick, BGC’s chairman and CEO, has another, more revolutionary scheme in mind: real estate derivatives. BGC — which spun off from investment bank Cantor Fitzgerald in 2004 and made its name as an intermediary in wholesale financial markets — has been tight-lipped about the details of that plan, one of the most anticipated aspects of BGC’s foray into commercial real estate. “What you do is you create a Wall Street-type product, but not a big trading index or a futures exchange,” he said earlier this year during the television interview, referring to his alternative type of derivatives market. (Derivatives are contracts between parties that allow them to hedge or place bets on changes in prices on everything from the price of oil to office asking rents.) The purchase of the Midtown-based Newmark Knight Frank — which operates in the United States but is a partner with the global, London-based commercial and residential brokerage Knight Frank — closed in October for around $100 million, including $63 million in cash and the rest in stock. Whatever Lutnick’s goal with Newmark — which is headed by veterans Jeffrey Gural and Barry Gosin — and Grubb, his plan to create a real estate derivatives platform to be used in New York City and nationwide is no doubt a tall task. And, he’s not the only one racing to profit from derivatives. Several of the most prominent indices that could be used for derivative trades are rushing

54 March 2012 www.TheRealDeal.com

to revamp their systems. Derivative trading in the U.S. pegged to local and national commercial real estate has failed in the past, and commercial real estate brokers in the trenches remain skeptical about the prospects for it now. But some financial brokers are more confident that these types of derivatives are coming to New York, sooner rather than later. “With more realistic expectations from Wall Street, I think that [tenants, landlords or investors] will be somewhat more receptive to using derivatives to gain exposure or hedge it,” said Stephen Gould, senior vice president of real estate derivatives at Wall Street brokerage firm Vyapar Capital Market Partners. “And it is that end-user receptivity which will reboot the product.”

mercial ﬁrms like Cushman, Newmark and Staubach Company (which was bought by Jones Lang LaSalle in 2008) were working on data to feed into a derivatives market. Many in the industry have assumed that any derivative platform to come to the market would be based on a property index

Holy grail Property derivatives are something of a holy grail in the commercial real estate world, promising to protect landlords and tenants from ﬂuctuations in rents. That’s because derivatives have the ability to revolutionize the way tenants and landlords hedge against swings in the market. While Lutnick declined to be interviewed for this story,

market, and a spokesperson could not elaborate. While it’s unclear how Lutnick will construct derivatives without using an index, there are three basic ways these types of ﬁnancial products can work with one, experts say. One of those indices is pegged to the net incomes generated by the pool of buildings in a property index. The second is similar, but is based on asking rents in a pool of buildings. And, the third is based on changes in property values. In the rental scenario, a tenant with a lease expiring who wants to protect against a market upswing would negotiate a futures or an options contract. In simple terms, such a contract, negotiated through a brokerage with a counterparty such as a hedge fund, would mature in a set period of time; for example, three years. If the actual rental rate came in above the agreed-upon price when the contract

BGC Partners CEO Howard Lutnick

Property derivatives are something of a holy grail in the commercial real estate world. They have the ability to revolutionize the way tenants and landlords hedge against swings in the market. he has recently publicly said that derivatives allow a tenant who’s worried about a rent spike when its lease expires a few years out to buy a sort of insurance against that. Conversely, it allows landlords to mitigate their losses if the market erodes. The market swings can certainly be dramatic: Cushman & Wakeﬁeld data, for instance, shows Manhattan average ofﬁce asking rents rose by nearly 70 percent between 2005 and 2008. During the boom, many of the top com-

such as the one compiled by the Chicagobased National Council of Real Estate Investment Fiduciaries or the REBOR indices, which are published by a company called Rexx Index. Economist Paul Frischer is president of Rexx. But Lutnick said he would create custom derivatives without using an index, with each trade an individual negotiation. Lutnick has not provided a thorough explanation of how the trades would be made, or if they could be sold on the secondary

expired, the tenant would receive money from the counterparty, which would help cover costs of the higher rent. Conversely, if the rent came in below the contract price, the tenant would pay the counterparty, although the tenant would also receive a break because its rent would be lower than expected. Some brokers don’t see this kind of real estate derivatives market working here because a lease transaction is more complicated to hedge against

PROFILE than, say, the price of oil. Nonetheless, Lutnick’s plan to market derivatives to clients comes just as some commercial real estate analysts are predicting that Manhattan asking rents will spike in the coming years. Cushman researchers wrote in January that

the three major U.S. real estate indices that might be used to trade property derivatives are quietly tinkering with their systems.

Derivative doubters Even as property derivatives were taking off in London in the middle of the last de-

ing platform in Europe. Spokespersons at Cushman and BGC were unable to say last month if the initiative was still active. Also, in March 2011, just a few weeks before announcing its plans to buy Newmark, BGC trumpeted that it was partnering with a division of Jones Lang LaSalle to provide

Commercial Property Price Index. The third, Frischer’s REBOR, was launched in 2006 and uses asking rent data from Cushman and Newmark. It, too, never caught on with traders, but it continues reporting data quarterly. Frischer said he recently received a patent for a method of trading real estate derivatives. Other attempts to launch indices include Staubach’s partnership with the University of Pennsylvania’s Wharton School, which was active during the boom. With no action in the U.S., the only active commercial real estate derivatives trading today is in Europe. It is being done through the London-based Investment Property Databank, known as IPD, an index that is pegged to property values. IPD reports that the total outstanding value of derivative contracts in the United Kingdom at the end of 2011 was £4.2 billion, or about $6.6 billion.

Back in the game

Newmark CEO Barry Gosin

From left to right: Rexx Index’s Paul Fisher, Newmark Chairman Jeffrey Gural and Real Capital Analytics president Robert White.

they expected Midtown Class A rents to jump by 30 percent in the next three years. That’s just the kind of spike a tenant would want to protect against. Today, with no commercial real estate derivatives market in the U.S., tenants and landlords have only the oldfashioned ways to hedge against rent fluctuations in large leases — primarily termination and expansion clauses and renewal options. A derivatives market would radically change that by allowing third parties to place bets on commercial leases. Of course, the first firm to successfully launch a derivative product would have an enormous advantage. That’s why two of

PHOTOGRAPH OF GOSIN FOR THE REAL DEAL BY MAX DWORKIN

cade, no one could get the needed traction in the U.S. to make a comparable system work here. BGC got into the action, as did Newmark and virtually all the major commercial firms, by providing data to different derivative indices attempting to get off the ground. “It was back in the ’07 era. It was the Index Wars,” said Robert White, president of the data research firm Real Capital Analytics, which is in the midst of retooling its own property derivative index. “Everyone was fighting for what index would become dominant.” Indeed, in 2006, BGC announced a partnership with Cushman to develop a trad-

clients property derivatives capabilities in the United Kingdom. It is also unclear if that initiative remains in place. For a brief period during the boom, three major indices did gain attention here. One of them, which was pegged to investment returns of core properties, was developed by the above-mentioned National Council of Real Estate Investment Fiduciaries. Investors did make trades based on that index, but by 2008 that had ended when the market collapsed. NCREIF continues to generate the index, however. A second index — which is based on property values through repeat sales — is run by Moody’s using data ﬁrm Real Capital Analytics, and is called Moody’s/REAL

Of course, any new effort by BGC Partners and Newmark to push into derivatives will require a lot of groundwork. Even so, a top New York executive at Newmark Knight Frank, speaking on condition of anonymity, said he was not talking with BGC about derivatives. Instead, he said, they were focusing on the basics of merging the two firms together. Even those plugged into the derivatives world are not privy to what BGC is up to. “I have not heard anything,” said White. “I reached out to Lutnick and got stonewalled.” Last month, in BGC’s first earnings report since the Newmark acquisition closed, BGC reported Newmark’s revenues at $54.4 million in the fourth quarter. That would put Newmark, which is a major player in the Manhattan office market, far behind rivals such as CBRE Group, with revenues of $1.1 billion in the Americas in the fourth quarter, and JLL, with about $509.5 million, also in the Americas in the same period. Newmark even lags far behind the struggling Grubb & Ellis, which reported revenues of $128.7 million in the third quarter of 2011. (BGC’s agreement to purchase the company is contingent on nobody else coming in with a higher bid and on approval from bankruptcy court.) But Lutnick has a lofty goal. “I think [that business] can grow dramatically. I mean, Newmark is [a] platform type of company. I think we could grow to 25 percent market share in real estate,” he said during the Bloomberg Television interview in January. He’s said the derivatives will help grow the overall commercial real estate business. Continued on page 93

www.TheRealDeal.com March 2012 55

THIS MONTH IN

REAL ESTATE HISTORY The Real Deal looks back at some of New York’s biggest real estate stories 1967: CHASE INKS NYC’S PRICIEST OFFICE LEASE EVER

hase Manhattan Bank signed a $200 million lease — Manhattan’s most expensive lease until that point — 45 years ago this month. The lease was for 22 floors in the 50-story 1 New York Plaza slated to rise across the street from the Staten Island Ferry Terminal. In signing the 30-year 1.06 million-square-foot lease, the bank decided to consolidate many employees there, but to keep its headquarters in the nearby 1 Chase Manhattan Plaza. The 2.5 million-square-foot 1 New York Plaza, which is located along South Street between Whitehall and 1 New York Plaza Broad streets, was completed in 1969 by developers Sol Atlas and John McGrath, who at one time controlled much of what is now the South Street Seaport area. Cushman & Wakefield broker Anthony Peters — who also negotiated the secondlargest office lease at that time for First National City Bank at 111 Wall Street, where it took 879,000 square feet in 1966 — negotiated the Chase lease. Chase remained at 1 New York Plaza until 1989, when it consolidated several offices at MetroTech Center in Brooklyn. The bank’s headquarters now is at 270 Park Avenue. Brookfield Office Properties owns 1 New York Plaza today.

1930: MACY’S, THE WORLD’S LARGEST STORE, EXPANDS RHE_RealDealAD_11-2011.pdf

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epartment store R.H. Macy & Co. announced plans to expand its Herald Square location in a move that enlarged its retail space to more than 2 million square feet, 82 years ago this month. In September 1930, New York’s mayor, Jimmy Walker, attended a ceremony laying the cornerstone for the $3 million, 20story addition. Exactly a year later, the new annex was opened. It was the second major expansion since Macy’s opened its flagship store at Broadway and 34th Street in 1902. In 1924, the company opened an addition known as the West Building, Macy’s expanded Herald which increased its retail space to 1.5 million square feet. Square location in 1930 Then in September 1929, the store announced that it purchased a 16-story loft building and a three-story commercial building on Seventh Avenue between 34th and 35th streets for the expansion. Because of existing long-term leases, the buildings could not be completely demolished. Instead, everything above the third floors of both buildings was knocked down and rebuilt up to 20 floors. The retailer was not able to buy the two-story building at 461 Seventh Avenue, at the corner of 35th Street, which along with the small building at Broadway and 34th Street remain the only properties on the entire block not part of Macy’s today.

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he for-proﬁt Hudson and Manhattan Railroad Company announced 109 years ago this month that it had incorporated to develop a passenger rail tunnel under the Hudson River to connect Lower Manhattan with Jersey City. Future U.S. Treasury Secretary William McAdoo was president of the company, which was known as H&M and was already building a similar rail tunnel to connect Hoboken and Herald Square. Speculators operating on rumors of a tunnel project drove up activity in land sales and options to buy that were needed for the project, the New York Times reported at the time. The total value of the real estate near the Lower Manhattan site was estimated at between $1 million and $2 million. Months earlier, H&M purchased property that’s now part William McAdoo, president of H&M of the World Trade Center footprint on Church Street from Cortlandt to Fulton streets. In 1908, the railroad company opened what was then the largest ofﬁce complex in the world there, comprised of two 22-story towers called the Hudson Terminal Buildings at 30 and 50 Church Street that also served as the commuter station. Passenger rail service began on July 19, 1909. The Hudson Terminal Buildings were demolished in phases and were completely gone by 1973 to make way for additional towers at the trade center site. The Hudson tubes are still in operation as part of the Port Authority Trans-Hudson system, known as PATH. Compiled by Adam Pincus

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PROFILE

The power behind the throne The largely unknown players pulling the strings for NYC’s top real estate chiefs

BY C. J. HUGHES he real estate industry in New York is famous (or infamous) for its outsized personalities, who make headlines not only for their property deals, but also for their head-to-head battles, art collections and White House aspirations. For every boldface frontman, however, there’s a behind-the-scenes wizard who is running day-to-day operations or shaping the direction of the company. These top lieutenants often decide what buildings will look like, how they’ll be marketed and who will sell them. The consummate inside operators, they’re wellknown power players to a small circle of insiders in their own real estate universe, but the rest of the industry rarely hears about them.

For instance, Larry Silverstein is, of course, the face associated with highprofile construction at Ground Zero. But behind-the-scenes, it’s Janno Lieber, the company president and Silverstein’s right-hand man, who is responsible for ensuring that the buildings actually get leased up and construction stays on schedule. Similarly, the city’s tallest-ever condo-hotel One57, from Extell Development Company, is an obvious feather in the cap for Gary Barnett, the company’s president. But he might not have had as much success assembling its centrally located Midtown parcel without the expertise of acquisitions chief Dov Hertz. Below, The Real Deal pulls back the curtain on these and other wingmen.

Bob Sanna

land and building acquisitions for the hardcharging ﬁrm. His latest coup is stitching together the seven parcels, plus two buildings’

Forest City Ratner (executive vice president)

At Forest City Ratner, decisions about where to locate a building — on Spruce Street in the case of New York by Gehry, or at Atlantic Yards in Brooklyn for the under-construction Barclays Center — are made by Bruce Ratner, chairman, and MaryAnne Gilmartin, vice president. But figuring out what the building will cost, how much time it will take to build and what it will look like are the responsibilities of Bob Sanna. While Ratner and Gilmartin are the faces of the company, Sanna, an architect by training, is the construction manager and point person for all the company’s high-profile projects. Since 1988, he’s completed 40 projects for the firm, including the New York Times headquarters on Eighth Avenue; Metrotech, the 11building Downtown Brooklyn office complex; and Regal’s United Artists cinema at 100 Court Street. Few other development firms give the in-house construction manager as much sway in decision-making as Sanna, who oversees an 18-member team. Too-soft soil under the Frank Gehrydesigned 8 Spruce Street, for example, prompted Sanna to retool the building’s underground parking. Along with Gehry and others, Sanna was also involved in other design changes at the building in 2006. At the time, the company, hedging against the market, decided to eliminate the condos units (they were originally planned for the top floors) and make it entirely rental, as well as make other tweaks to rein in development costs Sanna said his regrets, so far, are few, like wishing that the Atlantic Center mall in Brooklyn, for instance, had more windows. But when it was constructed in the late 1990s, Forest City capitulated to the demands of their big-box retail tenants, who were convinced that only replicas of their suburban stores would work. “Poor Bruce was being forced to conform to lease requirements of these subur60 March 2012 www.TheRealDeal.com

ban stores,” said Sanna, who prefers what Home Depot did on West 23rd Street in ﬁtting their store to an existing, more traditional space. “It’s a whole different level

Forest City Ratner’s Bob Sanna in front of the ﬁrm’s Atlantic Yards stadium project last month. Inset, company head Bruce Ratner.

of sophistication.” Still, the two adjoining complexes, which have more than 400,000 square feet, in many ways opened the doors for the company’s nearby Atlantic Yards project. And the retail complexes have their fans. “They did a really lovely job creating a vibrant area,” said Noel Caban, a broker with CB Richard Ellis who has done deals in Atlantic Center and who also lives in Boerum Hill. Caban added those malls were “a game-changer.” “They stretched out the whole retail market all the way to Downtown,” he said.

worth of air rights, needed for One57, a 90story condo-hotel at 157 West 57th Street that will be the country’s tallest residence when it’s completed in 2013. Barnett has already sold 30 percent of the under-construction building and has a penthouse on the market for $115 million (see related story on page 112). But Extell

Dov Hertz

Extell Development Company (executive vice president) In New York, assembling the parcels of land needed for a large high-rise requires navigating a mineﬁeld of complicated issues, like rent-regulation, air rights and zoning codes. Extell is known as one of the companies that’s mastered this art of assemblage, thanks in large part to Hertz, who handles

Extell Development Company’s Dov Hertz Inset: Company head Gary Barnett

began collecting air rights for the building 13 or 14 years ago. Hertz, who joined the firm in 2003, spearheaded the purchase of air rights over two five-story apartment buildings on West 58th Street, which allowed for an increased building height, he said. “Putting together assemblages in New York is particularly difficult and time-consuming,” said Bob Knakal, chairman of Massey Knakal Realty Services, who estimates he’s sold 25 properties to Extell in the past 15 years. “Dov is one of the smartest guys in the business.” Knakal confirmed what other sources said — that without Hertz, getting One57 out of the ground would have been difficult, if not impossible. Similar accomplishments include the new Gem Tower, a 34-story commercial tower in the Diamond District (see related story on page 68), as well as Ariel East and West, both Upper West Side condos. There was also 535 West End Avenue, which required five lots and called for relocating tenants, Hertz said. The Lucida on the Upper East Side needed four parcels. And a planned Hyatt at 135 West 45th Street needed seven lots and air rights. “I think I just get it done in the end,” Hertz said. Hertz, whose first name rhymes with “cove,” isn’t a lifer at Extell, which Barnett founded in 1989. In the 1990s, he worked as a commercial broker for Eastern Consolidated for two years before joining Everest Broadband during the dot-com boom, when his Rolodex of landlords became useful in wiring office buildings with Internet service. In total he wired 200 million square feet nationally, he said. Afterward, it was back into real estate, courtesy of a one-year stint with the Lawrence Group, where his Rolodex continued to swell. In fact, that deep roster of contacts, sources said, is one of the reasons Extell came calling.

PHOTOGRAPH OF RATNER BY MAX DWORKIN; PHOTOGRAPH OF HERTZ BY CHRIS MARTIN; PHOTOGRAPH OF SANNA BY MARC SCRIVO

PROFILE Jim Gricar

Janno Lieber

Halstead Property (general sales manager)

Silverstein Properties (president)

While some new-kid-on-the-block brokerages are trying to reinvent the wheel with unprecedentedly large commission splits, the old guard is sticking to a more triedand-true formula, boosting their brick-andmortar presence in a bid to win clients. Halstead Property, which was founded in 1984, is one of those firms. The firm — which doubled the size of its headquarters last year, relocating to the 14th and 15th floors of 499 Park Avenue — is hanging its shingle on new offices in suburban and second-home markets in the Hudson Valley, New Jersey and Connecticut. Many of the expansion duties fall to Gricar, who last spring left his job as manager of the West Side office of Brown Harris Stevens (he also put in seven years with Corcoran) to fill a post created just for him. The new post makes Gricar the de facto No. 2 executive at the company, behind firm president Diane Ramirez. “The owners felt that with the growth of the firm, another layer of management was required,” he explained. Since coming on board, Gricar said he’s worked “hand in glove” with Ramirez. He has considerably boosted payrolls at 499 Park: In the last 10 months, the office’s size has swelled from 60 to 120 agents. And, he said, he’s planning to bring that number up to 150. “The name of the game is recruiting and retention,” he noted. Even though BHS and Halstead share the same corporate parent in Terra Holdings, the move to hire Gricar was somewhat surprising, as the two brands are distinct, and lateral moves are rare. With Halstead’s growth in the past few years — it has 950 agents in 21 offices across three states, versus about 450 in 10 offices in one state in 2006 — “it was imperative to bring on a talented and seasoned executive who would work closely with me,” Ramirez said in an e-mail, adding that his efforts teaching in-house training programs have been “wildly successful.”

Heading up World Trade Center redevelopment for Silverstein Properties is the real estate equivalent of being the star pitcher for the Yankees. The job — the most im-

Halstead Property’s Jim Gricar Inset: Company head Diane Ramirez

in the city, “we are confident of hitting that mark by 2013,” he said. This angling for tenants comes as Brookfield, which owns the nearby World Financial Center, is on the hunt for major corporate tenants itself (see below), though Lieber said his buildings are an easier sell. Brookfield’s “buildings are great but they’re

Janno Lieber (left), president of Silverstein Properties, with company head Larry Silverstein.

portant at the development firm — falls to Janno Lieber, who leads the firm’s so-called World Trade Center Properties division. Lieber, 50, who’s been with Silverstein since 2003, oversees construction, public relations and leasing of the three towers, Nos. Two, Three and Four, that Silverstein is attempting to build at Ground Zero — the most high-profile (and most complicated) construction project in the country. The process, which has seen major headway in the last year after long delays, has been fraught with controversy about what would be built on the site, and who would pay for it. On the plus side, Tower Four, which has added windows to about 60 percent of its 72-story frame, has inked deals with the city and the Port Authority and is now 50 percent leased. But with asking rents reportedly in the $80-a-foot range — about double the average for Lower Manhattan — filling the rest of the building with private-sector tenants may be challenging. And in order for some key financing to come through, Tower Three needs a big tenant to commit to a 400,000-squarefoot chunk of space. Silverstein has publicly threatened to cap the structure at seven stories if it can’t get a tenant. Lieber pointed out that this possibility was part of the 2010 deal that got the project moving again so it wasn’t a big surprise. Plus, with so many leases now turning over

PHOTOGRAPH OF LIEBER AND SILVERSTEIN BY JOE WOOLHEAD; PHOTOGRAPH OF RAMIREZ FOR THE REAL DEAL BY HUGH HARTSHORNE

a little bit older,” he said. Other comparable projects, like Manhattan West, also from Brookﬁeld, and Hudson Yards, from Related, will be completed long after the World Trade Center is, he added. Lieber’s resume includes a stint as assistant secretary for policy at the U.S. Department of Transportation during the Clinton Administration, when he worked on JFK’s AirTrain project with the Port Authority. Later, he was employed by Ruben Companies, a commercial and residential developer, where he helped put together the deal with Vornado that almost got a high-rise built atop the Port Authority Bus Terminal, before the Sept. 11 attacks scuttled it, he said. Together, those jobs gave Lieber the chops needed to navigate competing public and private interests, sources said. Lieber despises the characterization of himself as some sort of one-man band who makes many of the decisions without Larry Silverstein. Silverstein is a constant presence, he explained. “His relentless optimism and determination has fueled our work,” Lieber said. But Lieber may be demurring. “He is smart but not abrasive, and works well with government ofﬁcials at all levels,” said Mitchell Moss, a professor of urban planning at NYU Wagner. “He is probably one of the most insightful players in shaping Lower Manhattan.”

Bruce Flatt

Brookfield Asset Management (CEO) He’s worked for the Canadian Brookfield Asset Management for more than two decades, and has been a front-and-center dealmaker in New York for that entire period, but Bruce Flatt flies so far under the radar as to be almost invisible. Much of the industry views Ric Clark, the CEO of Brookfield Office Properties, as the face of the company. But since BOP is actually a spin-off of Brookfield Asset Management, where Flatt is the CEO, Flatt is technically Clark’s boss. In a profile of Brookfield in The Real Deal last month, one insider close to the firm called Flatt the “wizard” behind the scenes. In addition, sources said he’s been hands-on in New York City for years; he was instrumental in beginning negotiations to buy the World Financial Center out of bankruptcy in 1993, and led an effort to purchase Lehman Brothers’ interest in one of Brookfield’s WFC towers for just $128 per square foot in 2002, months after the Sept. 11 attacks. “Bruce Flatt — that is the guy you make a big deal with,” one leading leasing broker said. But a new aggressiveness by both Brook-

Brookﬁeld’s Bruce Flatt Inset: the company’s more visible Ric Clark

field divisions could substantially elevate this low-key executive’s public profile. First, Flatt embarked on a $200 million retail makeover of the World Financial Center, the company’s signature address, to add new restaurants and shops. Upstairs at the site, Flatt is marketing millions of square feet of office space in a direct challenge to the World Trade Center, which is www.TheRealDeal.com March 2012 61

PROFILE under construction across the street. Simultaneously, Brookfield Office Properties is breaking ground on Manhattan West, an ambitious two-block project at Ninth Avenue and West 31st Street, with four towers containing homes and offices. And, treading into perhaps controversial waters, Brookfield is teaming up with tenants on a bid to buy Stuyvesant Town, the 80-acre middle-class enclave, with plans to turn its rental units into condos. (Tishman Speyer and BlackRock Realty, the previous owners, tried to convert the complex into a luxury property. They failed in part because of fierce resistance from tenants, and ultimately defaulted on $4.4 billion in loans.) Flatt cultivates a low-key mien in part because the firm is international with holdings outside of New York, which keeps it out of the media glare, analysts say. “If you Google them, you don’t come up with as much as if you Google ‘Related,’ but they are just as active,” said a broker who has advised Brookfield. “I think this has worked to their advantage.”

David Greenbaum Vornado Realty Trust (New York president)

Greenbaum started his career as a tax attorney, but then jumped to Mendik Realty, where he was running the company when Vornado came knocking. Indeed, in 1997, Vornado’s Steven Roth snagged the company for $654 million, picking up Greenbaum with the purchase. (Vornado also absorbed the company’s sizeable Madison Square Garden portfolio in the process.) With Roth, the chairman, and CEO Michael Fascitelli staying above the fray, Greenbaum, the president of Vornado’s New York division, is often the one getting his hands dirty with nitty-gritty details, sources say. A case in point: his appearances in 2010 before the City Council to urge the approval of 15 Penn Plaza, a controversially tall, 1,216-foot tower that would visually com-

Vornado’s David Greenbaum Inset: Company head Steven Roth

pete with the nearby 1,250-foot Empire State Building. In fact, the Malkin family, which owns the Empire State Building, launched an aggressive offense against the tower, which it argued 62 March 2012 www.TheRealDeal.com

would blight the iconic skyline. To sweeten the deal, Greenbaum dangled $150 million in subway improvements. Those improvements would connect the Garden’s subway trains — namely, the 1, 2, 3, A, C and E lines — to Herald Square, a block east, by reopening a defunct tunnel under the current Hotel Pennsylvania, which sits on the land where 15 Penn is to be built. In the end, the Council backed the project in a 47-1 vote. (The development, lacking an announced major tenant, now appears to be on hold.) This type of grind-it-out project is Greenberg’s specialty, sources said. And they have helped turned Vornado into one of the country’s top-rated real estate investment trusts, which means Greenbaum enjoys a privileged orbit in New York’s real estate universe. Greenbaum “has been around a long time, and he’s a real pro,” one commercial broker said. “He can pull together big, thought-provoking projects that don’t have long lead times.”

Bob Zorn

Red Apple Group (executive vice president) The development arm of the company that owns the Gristedes supermarket chain, Red Apple is the province of colorful billionaire John Catsimatidis, who flirted with running for mayor in 2009 and may do so again in the next election. Zorn, who is relatively press-shy and almost impossible to track down, seems to be Catsimatidis’s polar opposite, which suits him fine. “I’m happy to have a low profile,” said Zorn, a longtime banker. (The two met when Zorn was with Bankers Trust, though he also later served as executive director of White Rose Food, one of Gristedes’ suppliers.) Zorn started working for Red Apple in 2007. For his part, Catsimatidis calls Zorn an invaluable right-hand man who brings a healthy dose of down-to-Earth thinking to Red Apple’s ventures. (Bob Palermo is another influential lieutenant who handles day-to-day operations for the firm.) “You don’t need dreamers in charge of development projects, because then you get into unrealistic scenarios,” Catsimatidis said. “He’s an ex-banker, so he adds stability and reality to the process.” Zorn’s duties at Red Apple, which is more aggressively branching into groundup residential and retail development in the city, are substantial. For one, he oversaw the construction of the Andrea, a 95-unit rental with a pharmacy and supermarket at 218 Myrtle Avenue in Brooklyn. The project is now fully occupied, and Zorn plans to break ground this summer on 160 Myrtle, another rental. Two other residential towers are slated for a two-block site there. At the same time, he’s spearheading

Red Apple’s Bob Zorn Inset: Company head John Catsimatidis

Ocean Dreams, a threetower, 400-unit waterfront project to be located at the western end of Coney Island’s boardwalk. That project, which will include grocery stores and a beachside restaurant, is the biggest residential project this part of Coney Island has seen in decades. (Muss Development’s mega Oceana project is in nearby Brighton Beach.) In addition, there are plans afoot for projects with the medical school at Columbia University, Catsimatidis said.

Bill Cunningham

The Corcoran Group (executive managing director) Sometimes an executive’s position on a company’s totem pole can be misleading. Cunningham, for instance, is not ofﬁcially a member of Corcoran’s executive team, according to the ﬁrm’s website. But those employed there said his reach is formidable as the powerful top manager

The Corcoran Group’s Bill Cunningham Inset: Company head Pam Liebman

at 660 Madison Avenue, where 394 agents, plus a few dozen support staff, toil across three floors in Corcoran’s largest office — the nerve center of the über firm. Specifically, Cunningham, who works closely with Corcoran CEO Pam Liebman, must come to the defense of brokers when, say, clients try to force them to reduce their standard commission rates. He also has to step in on behalf of besieged brokers if sellers try to impose ulti-

matums about giving their listings away to other firms if the Corcoran agents can’t sell them fast enough. “You need time to get your advertising in line,” Cunningham said he explains to clients. More commonly, though, he must play peacemaker, brokers say, settling any broker-on-broker disputes with agents from other firms. Disputes often arise, for example, when a broker leaks a client’s name even though a non-disclosure agreement prohibits it. “People mean well, but a lot of times there is a misunderstanding,” said Cunningham, who worked as a broker and real estate investor in Florida and Texas before becoming an assistant in Corcoran’s West Side office in 2001. He worked his way up from there. One Corcoran broker said he does a good job of stepping up to bat for his colleagues. “If you come to him with an issue, he definitely finds a solution. He’s very good,” the source said.

Marcos Alvarado Starwood Capital Group (vice president)

Hired in 2008 (soon after leaving the imploding Lehman Brothers, where he worked in the real estate group), Alvarado has wasted little time asserting himself at his new Connecticut-based firm, which is headed by Barry Sternlicht and focuses largely on hospitality projects. Alvarado is not the No. 2 at the firm — that’s Jeffrey Dishner, who oversees real estate acquisitions globally for 10 offices in six countries. In fact, Alvardo is not listed as part of the firm’s executive committee. But at 32, he is regularly a presence at the table where deals are being cut, especially for New York properties, according to those who have worked with him. Indeed, Alvarado, who graduated from Dartmouth in 2003, is the point person on many New York deals, sources say. He’s played a major role in at least nine local deals that have recently closed or are in the works. And he has a good chunk of change to play with: The company has $2.8 billion in its latest two funds, with another being raised now. Though Alvarado declined to comment, his recent New York City deals include the $72 million purchase of 1414 Sixth Avenue from Murray Hill Properties, as well as the $67 million acquisition from the New York Public Library of 20 West 53rd Street, where Starwood and Tribeca Associates are planning on building a 120-room Starwood condo-hotel. Partnered with Joseph Moinian, Alvarado is also busy with 237 West 54th Street, a Midtown West development. “I think he is smart and focused and very tough but very fair,” said Bill Brodsky, a principal at Tribeca. “For a guy that age, he has a lot of responsibility.” TRD PHOTOGRAPH OF CATSIMATIDIS BY MAX DWORKIN

BOOKS

ATRDlook at recent real estate reads examines the books on — and soon to be on — industry pros’ nightstands BY GUELDA VOIEN

t this time of year, many industry professionals are jetting off to sun-soaked locales. What better time to keep your skills sharp with a little real estate–related reading?

HISTORY The Brooklyn Heights Promenade Henrik Krogius THE HISTORY PRESS; NOV. 23, 2011

his volume chronicles the planning and construction of one of Brooklyn’s most-loved features: the Brooklyn Heights Promenade. Krogius, a historian and the editor of neighborhood newspaper the Brooklyn Heights Press, has studied the Promenade for years. The result of exhaustive research in the U.S. and abroad, the book reconstructs the history of the Promenade through interviews, newspaper archives and public records. The work depicts the almost serendipitous fashion in which World War II, Robert Moses and the Brooklyn Heights Association collided to create the Promenade as it stands today. A unique “marriage of motorists’ and pedestrians’ interests,” Krogius writes, the Promenade is “a feature beyond duplication.” The book also recounts the later struggle to properly assign credit for the Promenade’s successful design and completion.

The Greatest Grid: The Master Plan of Manhattan, 1811-2011 Hilary Ballon, Editor COLUMBIA UNIVERSITY PRESS; JAN. 3, 2012

erhaps more than any other feature of New York City, the grid system — wherein streets are numbered and intersect avenues at right angles — has set the city apart from others, argues “the Greatest Grid.” The book was released to coincide with an exhibition at the Museum of the City of New York, on view until April, which celebrates the bicentennial of the 1811 Plan of Manhattan, New York City’s “foundational act of city planning,” as Ballon describes it. Ballon is deputy vice chancellor of New York University, Abu Dhabi, and author of “Robert Moses and the Modern City,” the book accompanying another critically acclaimed exhibit at the museum. For this work, she brings together texts by 17 different contributors, including Mayor Michael Bloomberg and New York City Planning Commission Chair Amanda Burden. The grid was not always popular. Frederick Law Olmstead — widely considered the father of landscape architecture — thought the grid’s straightforward utility would make architectural innovation difﬁcult, Ballon notes. But architect Rem Koolhaas has long been on the record as endorsing it. “The grid made the history of architecture and all previous lessons irrelevant,” Koolhaas wrote in 1978. “It forces Manhattan’s builders to develop a new system of formal values, to invent strategies for the distinction of one block from another.”

High Line: The Inside Story of New York City’s Park in the Sky Joshua David and Robert Hammond

FARRAR, STRAUS AND GIROUX ORIGINALS; OCT. 11, 2011

reelance writer Joshua David and Robert Hammond, an artist, met at a community board meeting in 1999. Both residents of Manhattan’s West Side, they were concerned about the impending demolition of the High Line, a long-abandoned, elevated train track running through West Chelsea to the Meatpacking District. Eventually, they co-founded Friends of the High Line, the organization which proved instrumental in transforming the structure into the park it is today. In “High Line: The Inside Story,” David and Hammond relate their unlikely tale; neither had experience in planning or politics and the project required ten years of persistence from inception to completion. In the end, “a crucial court ruling, an inspiring design contest [and] the enthusiasm of Mayor Michael Bloomberg” 64 March 2012 www.TheRealDeal.com

This month, The Real Deal peeked inside the newest batch of real estate books, some of which have already been released, and others you’ll need to pre-order on Amazon.com. came together to allow their vision to take physical shape, they write. The book includes hundreds of pictures of Manhattan’s Far West Side.

PHOTOGRAPHY New New York

By Jake Rajs THE MONACELLI PRESS; OCT. 25, 2011

ajs, a longtime photographer for the likes of Time and National Geographic, is best known for architectural and landscape imagery. This book, with an introductory essay by architecture critic Philip Noble, celebrates New York’s newest landmarks, including the Time Warner Center, the High Line and even Citi Field. Aiming to make profound the city artifacts that New Yorkers often view as mundane, Rajs includes a two-page spread of the concrete balcony at the New Museum; shots of Goldman Sachs’ new headquarters at 200 West Street from every angle; and close-ups of the Citigroup building in Long Island City.

ARCHITECTURE The Heights: Anatomy of a Skyscraper Kate Ascher PENGUIN PRESS; NOV. 10, 2011

kyscrapers, both commercial and residential, are taller, and their support structures more intricate, than ever before. In “The Heights,” author Kate Ascher sets out to make readers understand “what it takes to sustain life high in the sky.” The book presents a graphic tour of the systems required to build and maintain the grand towers where many city-dwellers spend years of their lives — from the glamorous concerns of architecture and design to far grittier issues, such as how best to clean a skyscraper. Ascher has plenty of industry chops: An alumna of both Vornado Realty Trust and the city’s Economic Development Corporation, she currently manages the U.S. practice of Happold Consulting and teaches at Columbia’s Graduate School of Architecture, Planning and Preservation. With carefully illustrated explanations, she answers questions such as: “Why do elevators use so little energy?” “How do skyscrapers deﬂect lighting?” and “Why do very tall buildings sway ever so slightly in the wind?” The book also explains building design decisions that often perplex outsiders. For instance, there’s the AT&T Long Lines Building at 33 Thomas Street, which amNewYork in 2008 named to its list of the Top 10 Ugliest New York City Buildings. But the tower’s Brutalist design was a calculated security decision, based on its function as a telecommunications hub, Ascher explains.

ECONOMICS Fixing the Housing Market: Financial Innovations for the Future Franklin Allen, James Barth, Glenn Yago WHARTON SCHOOL PUBLISHING-MILKEN INSTITUTE SERIES ON FINANCIAL INNOVATIONS; FEB. 24, 2012

ince the ancient Greeks invented “horoi,” or mortgage stones, financial innovations have helped people own homes — but also backfired spectacularly. At least, that’s the argument espoused by the authors of “Fixing the Housing Market:” Franklin Allen, a professor of finance and economics at the Wharton Continued on page 93

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OF F I C E MA R K E T

The agency blood battle Who’s up and who’s down among the Big Six commercial ﬁrms when it comes to winning over landlords?

BY ADAM PINCUS n the Manhattan commercial leasing world, the battles to represent buildings are a blood sport won and lost in the corner offices and conference rooms of owners and landlords. While there are no official scorecards tallying which commercial brokerages win — and which lose — the assignments are collectively worth tens of millions of dollars and can make a serious difference in a firm’s bottom line. However, the competition itself — which involves aggressively pitching the landlord — attracts scant publicity unless the building is a mega-project such as the World Trade Center site or Hudson Yards. That’s because in the interconnected world of commercial leasing, brokerages alternatively compete with and work with competitors on various deals so there is little incentive to trumpet a win over a rival. As a result, there is no clear record of the shifting fortunes of the firms and what potential financial impact the changes have on them. For example, with little fanfare, Jones Lang LaSalle picked up the landlord leasing assignments, or agencies, for nearly 20 existing office buildings in the past year. The turnover was mostly from competitors like CBRE Group and Cushman & Wakefield.

Related’s 6 million-square-foot project, Hudson Yards

80 Broad Street

JLL’s Paul Glickman

Cushman’s Bruce Mosler

CBRE’s Bob Alexander

Which big brokerages gained and lost the most agency commissions overall in 2011 FIRM

BUILDING WINS

PROJECTED COMMISSION GAIN

BUILDING LOSSES

PROJECTED COMMISSION LOSS

NET COMMISSION GAIN/LOSS

Cushman & Wakeﬁeld

$37.75 million

$5.5 million

$32.26 million

Jones Lang LaSalle

$28.07 million

CBRE Group

$45.05 million

$21.9 million

$23.16 million

Newmark Knight Frank 24

$12.18 million

$2.03 million

$10.15 million

Cassidy Turley

$636,177

Colliers International

$977,155

$1.13 million

-$150,598

Source: The Real Deal analysis of CoStar Group data. The estimated potential gross commission was calculated based on a 35 percent override on a 10-year lease. The rent was either an average market rent or a reported average rent in the building. New development projects Hudson Yards and Manhattan West were estimated at half the standard override, based on information from sources.

At the same time, those two firms snagged the assignments for the two largest new construction projects out there. To look at how these agency competitions are shaking out, this month The Real Deal ranked Manhattan’s Big Six firms by total square feet they represent. Then we took it a step further, doing a first-time analysis of which firms won the most assignments (in terms of buildings and square footage) last year and, and more importantly, estimated how much those wins are worth in potential commissions. While commissions for agency representation are often only about a third of what a tenant-representative broker gets, it’s more consistent work. A tenant leasing assign66 March 2012 www.TheRealDeal.com

ment may involve one deal for a client every 10 years. Agency work on the other hand offers a consistent stream of potential revenue and repeat business, as multiple ﬁrms come and go in a building. Indeed, The Real Deal determined that landlords paid about $150 million to $200 million in commissions last year to landlords’ agents, the vast majority of that going to the six ﬁrms ranked. Insiders noted that last year was a particularly active one when it came to landlords shifting building representation, in part because more buildings traded hands, which often leads to an agency change. “There was a lot of movement last year,” said Joseph Harbert, COO of the tri-state

region of Cushman & Wakeﬁeld. “The last half of 2011 was the busiest time I’ve seen in the last 15 years for building pitches.”

Big wins, big strikeouts When it comes to agency representation, most of the city’s big ﬁrms had a year marked by both signiﬁcant successes as well as failures. CBRE, for example, snagged 22 new agencies worth an estimated $45 million, including the largest new assignment awarded last year, for Related Companies’ Hudson Yards. But at the same time, it lost agencies in 11 buildings worth an estimated $21.9 million, putting it in third place in net gain.

The next biggest winner was Cushman, which also picked up 22 buildings, worth an estimated $37.8 million in potential agency revenue, including Brookfield Properties’ Manhattan West. At the same time, however, rival firms picked off 10 buildings with a total of 5.4 million square feet last year, worth an estimated loss of $5.5 million. Between wins and losses, Cushman had the biggest net gain of the six firms. The second biggest positive net change went to Jones Lang LaSalle, which took over agencies in 19 existing buildings worth an estimated $28 million in commissions, and did not lose a single agency. On the other hand, JLL failed to win either of the mega new construction assignments that went to PHOTOGRAPH OF MOSLER FOR THE REAL DEAL BY BEN BAKER

OF F I C E MA R K E T Cushman and CBRE. Newmark won the agency for 24 existing buildings, but most of them were smaller, Class B properties, worth a potential $12.2 million in commissions. Still, it lost ﬁve properties worth an estimated $2 million in potential commissions. Among Manhattan’s top six ﬁrms, the two smallest, Colliers and Cassidy Turley, barely saw their agency representations budge. Colliers won three agencies worth about $1 million, while Cassidy Turley succeeded in grabbing four for a total of about $636,000.

first-year rent payment on a 10-year deal.) Most of JLL’s wins were a result of a large team of brokers led by Mitchell Konsker and Paul Glickman, who left Cushman for JLL in January 2011, and brought over many of their assignments. But others were competitive, such as the 425,000-square-foot 101 Sixth Avenue, which developer Edward Minskoff is gut-renovating, and which JLL snagged from CBRE. JLL also won two notoriously difficult agencies from CBRE that appear extremely valuable. The first is to represent the mercu-

high-profile deal there. Likewise, Cushman, which lost a number of valuable agencies to JLL in 2011, won last year’s second biggest development project with a team led by Bruce Mosler: Brookfield’s Manhattan West, which could be worth more than $22 million in gross commissions if the entire space is leased, sources said. It’s those new projects where JLL fell flat. Sources said the firm made it to the final round at Manhattan West, but didn’t make the cut. Market veteran Peter Riguardi, presi-

Leasing agency totals by year for the biggest brokerages 4Q 2009 FIRM

4Q 2010

of its agency representation over the past three years. It’s down from about 14 million square feet three years ago to about 10 million square feet in the last quarter, data from CoStar revealed. Meanwhile the three ﬁrms representing the most space — CBRE, Cushman and Newmark — have remained relatively static in the total amount of space leased, even as they have won and lost large numbers of buildings over that time. CBRE, the city’s largest commercial services ﬁrm, maintained its position as the 9 West 57th Street

4Q 2011

# OF BUILDINGS

SQUARE FEET

# OF BUILDINGS

SQUARE FEET

# OF BUILDINGS

SQUARE FEET

CBRE Group

104

55.5 million

113

63.6 million

112

64.7 million

Newmark

201

45.7 million

187

42.5 million

190

50.3 million

Cushman

39.2 million

38.1 million

43 million

JLL

12.5 million

13 million

20.8 million

Colliers

14.8 million

12.8 million

9.7 million

Cassidy Turley

8.9 million

8.8 million

9.3 million

Source: Data from CoStar Group and The Real Deal. JLL said it had 30 million square feet for 2011.

Largest building assignment wins in 2011 WINNING FIRM

ADDRESS

SQUARE FEET AVAILABLE

POTENTIAL GROSS COMMISSION

CBRE Group

Hudson Yards

6 million

$25.2 million

Cushman & Wakeﬁeld

Manhattan West

5.4 million

$22.68 million

Jones Lang LaSalle

9 West 57th Street

496,000

$6.94 million

Jones Lang LaSalle

11 Times Square

675,294

$5.43 million

Newmark Knight Frank

3 Columbus Circle

600,000

$4.7 million

CBRE Group

280 Park Avenue

586,659

$4.68 million

Cushman & Wakeﬁeld

101 Park Avenue

572,048

$4.6 million

CBRE Group

685 Third Avenue

526,931

$4.23 million

Newmark Knight Frank

229 West 43rd Street

515,249

$4.14 million

CBRE Group

7 Bryant Park

450,000

$3.62 million

Brookﬁeld’s 5.4 million-square-foot project, Manhattan West

While JLL has nearly doubled the amount of space it represents over the past three years, it still lags behind the city’s largest firms, CBRE, Cushman and Newmark, in overall representation. Each of those firms represents between 40 million and 65 million square feet, while JLL represents only about 20 million. The Real Deal estimated the potential commission an agency in each building could generate by multiplying the current availability rate at the building — which measures office space available for rent now or in the next 12 months — by the average asking rent, and then applying a standard agency commission rate. (Commissions for brokers who represent the landlord average about 35 percent of what the tenant broker receives, which is about 32 percent of the

rial landlord Sheldon Solow and his 9 West 57th Street. The other is for Stephen Pozycki’s 11 Times Square, a speculative office tower that has been difficult to lease up. Skeptics wonder if it’s worth the headache, but JLL’s Scott Panzer has already inked a few deals at 9 West 57th Street, which CoStar shows has a large 35 percent availability rate. CBRE, meanwhile, is far from licked. The firm’s Robert Alexander won the competition for one of the most prized new development assignments in Manhattan — the 6 million-square-foot office plan at Hudson Yards, which The Real Deal estimates could bring the firm about $25 million. Mary Ann Tighe, chairman of the New York tri-state region for CBRE, represented designer Coach in the project’s very first

dent of the New York region at JLL, noted that there is no foolproof strategy for winning business. “If we had the answer to what the special sauce is that allows us to win, then we would never lose,” he said. “One of the things about this business, I tell guys all the time, is we don’t win a division by 10 games. There’s always a close battle.”

Building agencies JLL has seen big agency increases over the last three years, jumping 67 percent, from about 12 million square feet at the end of 2009, to just over 20 million feet at the close of last year, CoStar ﬁgures show. The ﬁrm that lost the most amount of space relative to its size was Colliers International, which has lost about 28 percent

leader in representing the most ofﬁce space in Manhattan last year. As of 2011’s fourth quarter, the company represented landlords in 112 buildings plus Hudson Yards, with a total of about 64.7 million square feet, according to The Real Deal’s analysis. That’s about the same as in 2010, but is up from the same point at the end of 2009. CBRE declined to participate in this article, but issued a statement saying: “CBRE partners exclusively with landlords who share our view about adding value to properties. ... That has always been our agency strategy and it will continue to be as we seek to continually produce the highest and best value for our clients’ properties.” Cushman declined to comment and Cassidy Turley did not respond to requests for Continued on page 97

www.TheRealDeal.com March 2012 67

James Gardner | Architecture Review

The bling building

A jazzy surface — but not architectural form — will distinguish the International Gem Tower

idtown is hardly the loveliest part lion in tax breaks later, the cladding is being of Manhattan, and few parts of added to the six-story base of the tower as Midtown are quite as unlovely well as to the 28-story setback. as the stretch of 47th Street between Fifth The $750 million, 750,000-square-foot and Sixth avenues. This corner of creation is building, which has already secured the Anknown worldwide as the Diamond District twerp-based Eurostar and the Gemologiand, with the possible exception of the city cal Institute of America as tenants, will inof Antwerp in Belgium, it’s home to the big- clude commercial condos for diamond and gest diamond emporium in the world. jewelry industry businesses on the first 20 Indeed, if you’ve been on this dreary street at all, there’s a good chance you’ve Construction at Extell’s International Gem Tower on West 47th Street been buying or selling gems. The entire recently topped out. Inset, David block is a hive, an ecosystem in which diChilds, the lead architect at Skidmore amond buyers and stone cutters interact Owings and Merrill. with wholesalers, shippers and security firms to create New York City’s fabled diamond trade. But it’s quite paradoxical that although a diamond’s main purpose is to be an object of lustrous beauty, its industry’s headquarters are located on a street where there doesn’t seem to be the slightest effort to achieve beauty — or even any visual distinction to speak of. As with so much of Midtown, the block is a crude hodgepodge of late-19th-century row houses that have somehow survived, several more-ambitious-than-successful buildings from the 1920s and 1930s, and a few half-hearted efforts from the late 1970s that are not only crude in themselves, but clash with everything around them. Into this mix now comes A rendering of the tower the International Gem Tower, a 34-story colossus designed by Skidmore Owings and Merrill that has just topped out, and is scheduled to be completed by the end of this year. Just about the biggest structure on the street, it brings a blast of contemporaneity to this tired and superannuated part of the city. The form is dully conventional, but the jazzy surface treatment may yet achieve the distinction that is floors. (Those condos promised in the renderings. are reportedly 65 perAlso known as 50 West 47th cent sold.) Above the Street, the International Gem condos will be comTower has been a long time in mercial space availthe making. able for other office Gary Barnett’s Extell Develtenants to lease. opment Company — the develIn erecting the tower, Barnett is oper behind the project — and SOM unveiled the plans for the building clearly aspiring to supplant the nearby 580 some five years ago, but the project suffered Fifth Avenue, which sits at the corner of numerous delays. While it’s no secret that 47th Street, and has long been viewed as the real estate and development industries the center of New York’s diamond trade. were hit hard by the recession, so was the di- (Known as the World Diamond Tower, the amond business — a double whammy that older building, like the Gem Tower, is 34 put the project on hold for several years. stories.) But Barnett, a former diamond dealWhat will ultimately distinguish the er, started up construction on the tower newcomer is not its form, but rather the around April of last year. Now, $46.9 mil- jazzy treatment of those surfaces. In terms

of form, the architects have made no effort whatsoever to venture beyond the most conservative reenactment of a setback tower upon a base — which has been standard fare in Midtown for the past half-century. Indeed, the form is so undistinguished that its very commonality, one suspects, is part of an aesthetic ruse to draw all of the viewer’s attention to the surface.

SOM, which was and remains one of the most prolific firms in Manhattan and beyond. Buildings from Lever House to the Time Warner Center are a product of its never-idle architecture studios. Once, nearly half a century ago, the firm created apartment complexes and banks with much distinction. Since then, under its leading architect, David Childs, it appears neither to have sought nor to have been solicited to create museums, the sort of commissions that, if nothing else, tend to call for a certain measure of creativity and originality. Although SOM’S activity extends to many domains, it tends to specialize in office buildings and education centers, as is attested in the soon-tobe-topped-out One World Trade Center as well as at 7 World Trade, which was finished several years ago. In a sense, SOM may well be the most grownup architectural office in the city, which is not necessarily a compliment, since it also suggests a hesitancy toward taking risks. That said, the august firm has made some efforts and has seen some success in casting off its generational torpor. In the case of One World Trade Center, whose present form is largely a revision of Daniel Libeskind’s original version, the firm has exhibited a certain dexterity in honing the original, Deconstructivist forms into a kind of resonant order. For the most part, however, after a brief flirtation with Classicism in the former Bear Stearns Building at 383 Madison Avenue, the firm’s vocabulary has returned to a general Modernism, but with a few flourishes like those seen at the International Gem Tower. Whether the sense of surface treatment in the renderings of the Gem Tower will be fully borne out in the building remains to be seen. It’s certainly clear that the building, however fanciful, will not harmonize with the rest of the Diamond District, which will require more than baubles on an old-fashioned setback form to make it look good. TRD

Just about the biggest structure on the street, it brings a blast of contemporaneity to this tired part of the city.

68 March 2012 www.TheRealDeal.com

In this respect, SOM seems to have taken a page from the Swiss architectural team of Herzog & de Meuron, another ﬁrm that is known more for their surfaces than their forms. In the present case, the steel-andglass surfaces of the Gem Tower bristle with regular, yet zigzagging, patterns in two shades that are presumably supposed to resemble the diamonds sold within. Those patterns create a curious effect upon the eye and their ultimate success will be known only when the building is completed. As for the base, it is more regular, but there is still a syncopated funkiness to the design. In both cases, the eye experiences an almost tactile appreciation of the change in the surface. The type of Midtown ofﬁce tower to which this new building conforms was largely invented in the postwar years by

PHOTOGRAPH OF TOWER FOR THE REAL DEAL BY DEREK ZAHEDI; PHOTOGRAPH OF CHILDS BY MARC SCRIVO

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Q&A

Funding for themselves NYC real estate private equity players weigh in on where they’re raising capital and what kinds of investments they’re eyeing this year BY MELISSA DEHNCKE-MCGILL n real estate private equity, the word “rich” is a relative term. But within that universe, the wealthiest, most-established funds are the ones having the most success raising capital for new investments and, well, getting wealthier. In this month’s Q&A, The Real Deal talked to the New York City players who are working and running these funds as well as to the analysts and brokers who are following them. One source we talked to said, “it’s the larger, more sophisticated funds” — like the Blackstone Group, CIM and others — “that have all the access to capital.” He said that the capital-raising environment for funds has loosened up a bit, but that there are still a lot of “soft commitments out there,” and that some have outright canceled their efforts to raise cash. Part of that is because getting investors that have been “badly burned” to participate in future funds is a major challenge, another source said.

Dan Fasulo

managing director, Real Capital Analytics Blackstone recently closed a $6 billion distressed property fund and others are doing the same on a smaller scale. How is fund-raising going for them now compared to last year, two years ago and after the market collapsed? It’s obviously a great sign that the equity funds are able to raise capital again. The caveat is that it’s basically the larger, more sophisticated funds that have access to all the capital. In the middle of the last decade — from ’05 to ’07 — everyone and his brother was raising a fund. Those days are over. While the capital-raising environment has improved for the bigger players, in this phase it is still very difficult for the smaller shops. From what I hear, the big boys are hitting their targets, [but even that] is still difficult. There are a lot of soft commitments out there and some people aren’t hitting their targets. And there are still a handful of folks that have canceled their efforts because it was too difficult. It’s a mixed bag. Where are these funds going to raise the bulk of their money? Are there any new sources of capital they’re going after? Maybe some of the countries where foreign capital was coming from has changed a little bit in the last few years. There is certainly a lot more money coming out of China than there ever has been. Some have pulled back, like the Australians. We’ve certainly seen more high-net-worth money out of Europe for obvious reasons. The investment sales market has obviously been competitive and cap rates in 70 March 2012 www.TheRealDeal.com

New York have been dropping. Has that prompted funds to shift the types of investments they’re looking at? Of course the funds have return requirements. The lower the yields get, the more challenging it becomes to make investments. A couple of years ago, Blackstone was buying buildings in New York almost directly. But now the market has gotten so aggressive [here] that if they were going to do something, they would do something non-traditional — [like] buying a stake in a trophy, which they did recently when they bought a 25 percent stake at 2 World Financial Center. The problem with Blackstone is that their last couple of funds got really big [so] they have to do bigger deals. They can’t keep going around doing $50 million deals. That’s why they have gone after big portfolios.

Steven Kohn

president, Cushman & Wakefield Sonnenblick Goldman Are there still many cases where these funds cannot find investments? There seems to be more capital available for investment than there are investment opportunities. However, with the amount of debt maturing over the next few years, many expect this dynamic to change. The issue for the funds will be pricing. Given an improving economy and low interest rates, values could improve at a significant pace across the country, as they already have in the major markets. What sort of returns do investors want on distressed assets today, and have those expectations changed from a year or two ago? Target returns will vary depending on the

But there is still more capital to pick up investments than there are investment-worthy properties — especially here in New York, where the market has bounced back and prices are higher, which makes it harder to pencil out returns. As a result, funds are trying new and creative tactics to get control of properties. In some cases, rather than attempting to buy the loan and foreclose on the property, they’re teaming up with existing distressed borrowers and then approaching the lender. In other cases, they are going after tax liens or aggregating so-called TIF bonds to take hold of a property. But with a lot of the short-term loans that were issued at the peak of the market in 2007 coming due this year, private equity funds are likely to see an increase in opportunities in 2012. For more on what kinds of returns investors are expecting from funds, how funds have restructured fees in the last few years and where they are going for capital (yes, China is on the list), we turn to our panel of experts. quality and stability of the property. Core asset target returns are in the 6-to-8 percent unlevered IRR [individual rate of return] range; core-plus returns are in the 9-to-12 percent range; value-add returns

Real Estate Advisors and how they only closed $135 million in their fund and have additional co-investors, which [leaves] them south of $500 million. For a powerhouse like Apollo to struggle I think it’s

“Getting investors that have been badly burned to participate in future funds after their money has been lost is a challenge, to say the least.” Nicholas Bienstock, Savanna are in the 13-to-16 percent levered IRR range; and opportunistic return targets are above that level.

Steve Coyle

chief investment officer, Global Realty Partners What’s going on with opportunistic private equity real estate funds? There are fewer opportunities in NYC today than two or three years ago, but there is still plenty of distress outside of New York, in markets like San Francisco, that have had a relatively strong recovery. What’s going on with fund-raising for real estate funds these days? Right after the market collapsed there was nothing. No one could raise capital. We started to see capital raising come back in 2010. ... I think it turned much more difficult in the second half of 2011. And, it remains difficult today. That’s not to say it’s impossible, but only those with strong track records are getting a lot of traction. ... Blackstone is a fund-raising machine in a class pretty much by itself. Most others in the market have struggles. For example, there was an article in the Wall Street Journal talking about Apollo

somewhat indicative of the market today. ... In terms of the number of funds we are tracking globally, more than 1,100 funds are trying to raise capital. It’s the highest that we’ve ever seen. Are there still many cases where these funds cannot find investments? The flow is starting to increase. It’s still not a flood, but it’s been increasing steadily. Last year it was roughly about $15 billion of workouts and liquidations in the CMBS market — up from roughly $10 billion the year before and $2 billion the year before that. Our view is that it will continue to increase; we’ll see the banks [and] special servicers continue to unload distressed properties over the next year or two. New York has recovered quite a bit so some of that distress ends up fixing itself because the market has bailed it out. However, that’s not the case [in some other markets such as] the office markets in New Jersey or Connecticut. What sort of returns do investors want on distressed assets today? Most funds out there still seem to quote an 18-to-20 percent magical return. I think that’s fairly unrealistic. ... I think the reality is that investments will take longer to work out than they have in the past. Instead of taking three years to work out, most will take five years, and that internal rate of return will most www.TheRealDeal.com May 2006

Q&A likely be in the low-to-mid teens. How many more real estate professionals are working with funds in NYC compared to two or three years ago? Net, there are fewer people actively working today than there were even two or three years ago. We continue to see people leave the industry. A lot of folks have been waiting for the opportunity to arrive and for capital to ﬂow back. For some, the timelines are starting to run out. It took time for reality to set and for shops to start to downsize. Other than Blackstone, which real estate funds are most active today? Related is a fund that recently raised a lot of capital. They just had their ﬁnal close in January raising $825 million. While they are a player that’s been around a long time, they are new to the fund market. Savanna [also] raised quite a bit of capital.

Nicholas Bienstock

managing partner, Savanna What’s going on with fundraising? While established players are getting money raised, they’re getting squeezed on terms. It’s practically impossible to raise a ﬁrst-time fund in this market. Institutional investors are trying to do business with proven local operators who do deals directly in order to access local “sharpshooter” talent and to avoid a double layer of fees and promotes. The fund-raising challenges are greater for allocators who don’t bring that level of expertise and whose business model involves double layers of fees. Only the smartest, most credible and established allocators, including Angelo Gordon, Westbrook, Rockpoint, Area, etc., are raising money successfully in scale.

Are there still many cases where funds cannot ﬁnd investments? Lenders are being more proactive about addressing their problems and less willing to “extend and pretend.” That may be because they’ve recapitalized their balance sheets and are in a position to take the hit now that would have put them out of business three years ago. Or it may be that the regulators are [putting] more pressure on them to address their real estate exposure. What are the most challenging realities funds are dealing with today? Many funds that raised money at the peak of the market got totally crushed. Getting investors that have been badly burned to participate in future funds after their money has been lost is a challenge, to say the least. Those LPs that come back to the table often demand much tougher terms.

Which funds either based in New York or buying properties here are most active today? Savanna, CIM, Jamestown, Rockpoint and Thor are some of the more active funds in NYC. Other folks that are active that aren’t in a fund structure include Taconic, Comfort, Murray Hill and Crown. And, of course, there are the big public REITs like Vornado and SL Green.

Justin Metz

managing principal, Related Fund Management Other than the Middle East, Asia and Canada, where are funds turning to for money today? There is definitely global appetite for U.S. real estate. There are pension funds in the U.S. and abroad, both corporate and government pension plans, that are interested in real estate. The only other market I would add is Australia, which is starting to get interested in the U.S. real estate market. There is a large number of large international investors that historically haven’t always been large players in the U.S., like Korea and Norway, and over a period of time they are going to become larger players here. What other strategies (such as bankruptcy, loan-to-own) are you seeing funds use to control properties? Bankruptcy and loan-to-own [are both being used]. The other thing we are seeing is a number of funds will team up with an existing borrower so that they have access to the deal and access to the information, and then try to make a deal with the lender. You create a partnership with the borrower first and then buy the loan second. This is an alternative to buying the loan and trying to foreclose. We’ve also seen a couple of funds raised where the fund managers are actually the loan servicers so they have access to a large amount of information about the loans they service, where the servicer is trying to get control of the property. How many more real estate professionals are working with funds in NYC these days compared to two or three years ago? I would guess that there are less people working in the field than two years ago ... because there are fewer funds around. A lot of the bank-sponsored funds have cut back a little bit in their investing [because] there have been regulations like Dodd Frank and others about how much of their capital they can invest. CitiGroup had a big fund management platform that they sold. Deutsche Bank had one that they are in the process of selling. We have seen a lot of them trade.

John Wilcox

managing director, Savills Are you seeing more real estate funds or fewer today compared to a few years ago? Blackstone has a couple of different funds for which they’ve been raising money. One just announced that they have a new backer, NPS (National Pension Service), which is the South Korea pension fund. Their target is something like $13 billion. That would be the single largest private equity real estate fund ever if it reaches that level. ... In the last 12 to 18 months things have changed and people have gone back to their existing investors to talk about re-upping. There was a lot of talk early in the cycle about the denominator effect — [meaning that] when stock pricing and valuation has gone down then real estate valuation on an allocation basis has gone up ... so they can’t make any additional commitments. Now that the stock prices have come back up that pressure has been relieved a bit. Where are real estate funds going to raise the bulk of their money? It’s been almost impossible to raise capital in Europe except for the very largest U.S. funds. That’s changed a little — we’ve started to see groups that didn’t have allocations in U.S. funds begin to make them. We have placement teams that sit in London and Tokyo where we represent U.S.-based funds as placement agents for the purposes of investing in funds in the U.S. ... Asia has been a huge focus. There’s also a focus on that next tier of either pension funds or corporate pension funds and even extremely high-net-worth individuals who are essentially institutions. Have funds shifted the types of investment properties they’re looking at because of the new market landscape? Despite very low cap rates, multifamily continues to be very high up on the list of strategies. It’s interesting that [funds] haven’t moved away from it. It feeds into what they think is a positive rent growth, particularly in the markets where there is demand-supply imbalance. ... A lot of the people we talk to believe that the multifamily sector has legs to grow quite a bit more. People also deﬁnitely have hospitality on their radar in the top markets. There are still people who are hospitalityonly players who want to continue that, but what I’m hearing from the PE guys is that unless it’s an unusual opportunity, the time to get in was a year ago or before. There are probably fewer people chasing hospitality than there were a year ago. What new strategies are funds using to

get control of properties? We’ve seen some groups that are willing to go after tax liens. It’s not new and creative, but it’s something that people weren’t talking about a couple of years ago. I think everybody sort of assumed it was the mezz or the mortgage that you’d use to get into the property. There are people who are going after TIF [Tax Increment Financing] bonds and aggregating them and trying to use them as a way of getting access to the real estate, or some of the municipalities have auctioned off tax liens. What’s going on with fees at real estate private equity funds? There was a trend in ’08, ’09 and somewhat ’10 to shrink fees. Sometimes it was you don’t start charging the fee the minute the commitment is made, but instead once it’s deployed. Sometimes it was simple reduction in the percentage of the management fee and the promote once returns started coming in. The funds that have been most successful fund-raising have had the least necessity of changing their fund structure. That’s something we’ve heard a lot less of in the last 12 months. With the second-tier groups there has clearly been fee pressure.

Enoch Lawrence

senior vice president, CBRE, Capital Markets NY office Are you seeing more funds or fewer than you were a few years ago? I don’t necessarily see more of them. I think a lot of the same firms that operated in the space are going back to raise funds again. A lot of the maturity dates of the recent round of funds are coming to a head so they are out on the market raising new capital. There doesn’t seem to be a slowdown. That’s driven by the idea that there will be investment opportunities on the horizon given that the peak of aggressive lending was in 2007 and a lot of those short-term and interest-only facilities were fiveyear terms. Those are all coming due this year, so there’s a tremendous overhang of assets that are technically underwater. That is viewed as an opportunity and that’s something they’re selling when they are out raising funds. What sort of returns do investors want? They have moderated, mid-teens today as opposed to high-teens and low 20s, and that’s definitely different from a year or two ago. Investors have accepted it so far. I think it’s unique to New York. Once you get outside of New York you go back to the conventional return range that investors have expected for the last several years. TRD www.TheRealDeal.com March 2012 71

Tri-state briefs the Danbury News-Times. The website Itsrelevant.com was the ﬁrst company to sublease space in the center.

CONNECTICUT

Stamford gets ‘iCenter’ in long-vacant Old City Hall The Stamford Innovation Center, the city’s ﬁrst business development collaborative, ofﬁcially launched last month, signing a 10-year, 16,000-square-foot lease in Stamford’s Old City Hall, the Hartford Courant reported. The ornate Beaux Arts building, built in 1905, was used by the city until 1987, and has been vacant since then. The new “iCenter,” which

LONG ISLAND

Developers plot Nassau Hub overhaul Stamford’s Old City Hall

aims to encourage new business in Stamford, offers desk space and business services for start-up companies. Entrepreneurs can rent a desk and access to meeting rooms for $250 a month, according to

Four of Long Island’s top developers are working on plans to redevelop the 77-acre site surrounding the Nassau Coliseum hockey arena, Newsday reported. The group — developers Vincent Polimeni, Jan Burman, Ed Blumenfeld and Mark Hamer —met with County

Executive Edward Mangano last month and said they are crafting a plan to revamp the 16,250-seat Coliseum. Nicknamed “the Nassau Hub,” the arena is home to the NHL’s New York Islanders. Last year, voters rejected a $400 million, publicly funded plan to renovate the facility, and Mangano has said he would produce a new proposal in the coming weeks. Islanders owner Charles Wang has pushed for improvements to the Coliseum, one of the smallest and oldest arenas in the NHL, and has said he does not plan on keeping the

team at the Hub past 2015. Last week, the team announced it will play a preseason game at the new Barclays Center in Brooklyn. Nassau County will seek state funding for Hub infrastructure improvements, Mangano said, and Gov. Andrew Cuomo has encouraged Nassau to submit a proposal for a state Regional Economic Development Council grant.

NEW JERSEY

Under the Boardwalk, improvements to come The state’s Casino Reinvestment Development Authority, with backing from Gov. Chris Christie, last month approved an “Atlantic City Tourism District Master Plan” to spruce up the gaming destination. The plan calls for new pavilions along the famous Boardwalk for entertainment and exhibits, USA Today reported, while Paciﬁc Avenue will get new cafes, bars and nightclubs,

The Revel casino in Atlantic City

and beautification projects along the street and sidewalks. Atlantic Avenue will see street furniture, better landscaping and beautified storefronts. “We now have an ambitious, visionary road map that will transform Atlantic City and lead its comeback,” Christie told the Wall Street Journal. The news comes at a pivotal time for Atlantic City, the Journal said, with casino revenue plummeting due to a poor economy and increased competition from surrounding states. Meanwhile, Atlantic City’s newest casino, Revel, is slated to open on April 2. With 1,900 hotel rooms, the $2.4 billion facility will be the first casino to open in Atlantic City since the Borgata Hotel Casino & Spa in 2003. And the Press of Atlantic City reported that a three-year, $100 million renovation of the city’s Steel Pier is underway, including new amusement rides, arcade games, food outlets and party areas. This summer will also see the return of the legendary diving horse act, one of the pier’s focal points in the past. TRD 72 March 2012 www.TheRealDeal.com

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National market report

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

cording to CNNMoney. In 1995, Simpson was acquitted in the high-proﬁle slayings of his ex-wife, Nicole Brown Simpson, and her friend, Ronald Goldman, but a civil jury in California later ordered him to pay $33.5 million for Goldman’s wrongful death. “It O.J. Simpson

Las Vegas Las Vegas home prices could tumble for another six months, and likely won’t recover until the existing “shadow inventory” of bank-owned homes hits the market, the Las Vegas Review-Journal reported. “I don’t think we’re going to see any drastic improvement in the resale median [price],” Home Builders Research President Dennis Smith told the Review-Journal, reviewing ﬁgures from data provider CoreLogic. “We have to see what happens when that spigot of bank-owned homes gets turned back on.” Nearly 257,000 homeowners are at risk of default in the Las Vegas metropolitan area, Smith said, and negative equity for most homeowners in the area is between $50,000 and $100,000. Home Builders Research reported 48,822 resale closings in 2011 at a median price of $110,000, down 7.6 percent from 2010, while new-home sales fell to 3,894 last year, the lowest level since 1988. Smith projected that new home sales in the Las Vegas metro area won’t grow until 2015 or 2016, and that pricing will remain depressed into 2013. Meanwhile, in nearby Henderson, construction on a $650 million, 750,000square-foot sports arena will begin later this year, Fox5 News reported. The project, slated to be called Silver State Arena, will be developed by a joint venture between Chris Milam, CEO of Texas-based International Development Management, and China-based China Security and Surveillance Technology. The parties have signed a memorandum of understanding to construct and ﬁnance the project, which should be completed by mid-2014.

Austin Texas native Matthew McConaughey picked up a large piece of real estate in his home 74 March 2012 www.TheRealDeal.com

state’s trendiest stomping grounds, Curbed National reported. The actor, along with ﬁancée Camila Alves, reportedly grabbed a nine-acre estate in Austin’s upscale Rivercrest subdivision. The three-story, 10,800square-foot home, built in 1997, has seven bedrooms, a courtyard with a fountain, a stone guesthouse with its own covered porch, and seven boat slips on Lake Austin. According to property records, the home was ﬁrst listed at $6.6 million in 2008, but the price was later dropped to $4 million.

Matthew McConaughey

Boston Bank of America Corp. has reached a tentative deal to sell its largest Boston property, the iconic 37-story tower at 100 Federal Street, to Boston Properties for about $600 million, the Boston Globe reported. Cushman & Wakeﬁeld reportedly represented the seller. The 1.13 million-squarefoot ofﬁce tower is the sixth-tallest building in Boston and has “long been a symbol of Boston’s strength in banking,” the Globe said. Bank of America has unloaded billions of assets over the past few years, and last month announced plans to sell three high-rises in New York and Charlotte, N.C. “We are looking at streamlining our opera-

tions,’’ Bank of America spokesperson Kelli Raulerson told the Globe. “Real estate is not a core business of Bank of America.’’ Previously, 100 Federal Street was the headquar100 Federal Street

ters for Bank of Boston, and later FleetBoston Financial. Bank of America took over Fleet and the property eight years ago. Boston Properties, a real estate investment trust, owns more than 50 buildings in the Boston area, including the city’s two tallest ofﬁce towers: the John Hancock Tower and the Prudential Building.

was just a matter of time before he would lose the house,” Goldman’s attorney, David Cook, told the AP. Simpson is currently serving a nine-to-33-year prison sentence in Nevada stemming from a 2007 armed confrontation with sports memorabilia dealers in Las Vegas.

Houston Noble Energy, a Texas-based oil and gas company, has leased 497,000 square feet of office space at 20555 State Highway 249, CoStar News reported. The company will move its global headquarters to the 10-story property in Houston’s Northwest submarket, and the lease includes a nearby land parcel for later development, to accommodate Nobel’s anticipated further expansion. The company will relocate in 2013, and the building will undergo a capital renovation program in the meantime, CoStar said. The property was sold by Hewlett Packard last year to a joint venture of real estate company Trammell Crow and partner Principal Real Estate Investors. Houston’s office market saw a net absorption of 3 million square feet during the first three quarters of last year, according to a report from Delta Associates, and was on track to end 2011 with 4 million square feet of absorption, outpac20555 State Highway 249

Miami JPMorgan Chase has ﬁled to foreclose on O.J. Simpson’s home at 9450 SW 112th Street near Miami, according to the Associated Press. Simpson’s attorney has since ﬁled a motion to dismiss the case. The nowimprisoned former NFL star bought the 4,233-square-foot, four-bedroom home in Kendall, Fla., for $575,000 in 2000. Its current assessed value is $478,401, but Simpson reportedly owes more than $700,000, including penalties and fees, and has not made a mortgage payment since 2010, ac-

ing recovery in other major U.S. markets, according to the Houston Business Journal. Delta projected 4 million square feet of net absorption in each of the next two years, bringing the overall vacancy rate in Houston to 9.8 percent. “It would be the lowest vacancy rate ever reported in Houston,” said Delta CEO Greg Leisch. Compiled by Guelda Voien

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A 410,036-square-foot loft building in the Mott Haven section of the Bronx is on the market with an asking price of $45 million. The 12-story, mixed-use property, located at 385 Gerard Avenue at 144th Street, is situated between the Major Deegan Expressway and Grand Concourse, and has large 385 Gerard Avenue ﬂoor plates suitable for continued light industrial and warehouse use, or conversion to ofﬁces. Robert Knakal, David Simone, Jonathan Hageman and Matthew Abreu of Massey Knakal are marketing the property.

The 42-key Hotel East Houston at 151 East Houston Street is for sale with an asking price of $21 million. The 14,554-square-foot building, located at the southeast corner of East Houston and Eldridge streets, was converted into a hotel in 2007. “The hotel has performed extremely well in the past four years, with occupancy 151 East Houston Street rates that have consistently hovered around 85 percent,” Eastern Consolidated’s Marion Jones, who is handling the sale with colleagues David Schechtman, Gary Meese and Philip Huang, said in a news release. The six-story property is owned by Soho New York Lodging LLC.

A five-story, mixed-use property at 62-64 East 34th Street is on the market for $14 million. The 18,680-square-foot elevator building, located between Madison and Park avenues, has three leased retail spaces — two on the ground floor and one on the second floor — and 13 apartments, including 10 free-market units and three rent-stabilized units. The zoning district allows for the possibility of adding 34,315 square feet to the building for hotel, residential, commercial or com62-64 East 34th Street munity use. Shimon Shkury, Michael Tortorici and Victor Sozio of Ariel Property Advisors are marketing the property.

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A seven-story ofﬁce building with street-level retail at 7 West 44th Street is on the market with an asking price of $16 million. The 15,741-square-foot property, located between Fifth and Sixth avenues, was built in 1926 and last renovated in 1956. There may be an opportunity to expand the building, due to the property’s 14,382 square feet of unused air rights for future development. The seven-unit building is owned by Kameda International Inc., according to PropertyShark.com. Prudential Douglas Elliman’s Peter Acocella and Michelle Zitwer are handling the assignment.

A six-story multifamily property at 522-524 East 11th Street is for sale, asking $7.99 million. The 13,476-squarefoot building has 23 residential units, including 12 onebedrooms, four two-bedrooms, four three-bedrooms and three four-bedrooms. Thirty percent of the apartments at the property, located between Avenues A and B, are rent stabilized. The average monthly rents for the one- and two-bedrooms are below market value: $1,588 per month for the one-bedrooms, and $1,667 per month for the twobedrooms. Marcus & Millichap is handling the sale. Compiled by Linden Lim

UES multifamily townhouse asking $26M A five-and-a-half-story, 10-unit townhouse at 16 East 73rd Street is on the market for $25.95 million. The 10,500square-foot building, located between Fifth and Madison avenues, was built in 1910 and last renovated in 1945. The building’s architectural details include limestone window enframements, a segmented arch entrance, French windows on 16 East 73rd Street the first floor, and an iron balcony on the second floor. The property will be delivered vacant. Massey Knakal’s Guthrie Garvin is handling the assignment.

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Deal Sheet summary

The Deal Sheet, on pages 80 to 92, covers transactions from 1/11/12 through 2/10/12. Please submit future deals to deals@therealdeal.com.

Sales

Overview

By type

Property sales Dollars

Development

Hotel

Industrial

Mixed-Use

Development

Deals

57 $1,767,620,000

Financing

By dollar volume (in millions)

Mixed-Use Multi-family

209 4.6 11.95

Multi-family

108.32

784.46

Transactions

Office

521.8

Buildings

Retail

127.49

Aggregate value

$195,500,000

Leases Office

110

Retail

Total

151

Leases square feet Office Retail Total

1,482,323 175,771 1,658,094

Office leases Office leases by industry Industry

Office leases sf by industry Leases

Advertising & Marketing

Industry

Top tenant reps for office leasing by sf

Square feet leased 191,277

Tenant representative

Square feet leased 344,404

Advertising & Marketing

Architecture & Design

Studley

313,932

Broadcasting

215,923

The CBRE Group

247,069

Construction

19,818

Feld Real Estate

107,308

Education

72,659

Jones Lang LaSalle

70,902

Entertainment

98,496

Miyad Realty

62,450

Fashion*

75,840

Adams & Co.

61,443

Financial Services

155,712

NAI Friedland Realty

47,792

16,815

Cushman & Wakefield

45,902

Fashion*

Financial Services

17,375

Newmark Knight Frank

Health & Beauty

Internet

54,186

Rice & Associates

24,307

Legal

25,100

Grubb & Ellis

16,852

Medical

95,742

Okada & Co.

11,655

NGO

179,370

Colliers International

9,664

Other

95,939

Walter & Samuels

9,000

48,786

CBC Hunter Realty

8,000

Prudential Douglas Elliman

8,000

Real Estate

Science & Technology

119,285

Retail leases Top tenant reps for leasing by sf

Retail leases by industry

Broker

Drugstore

44,438

Square feet leased

Retail leases sf by industry

Winick Realty

58,884

Entertainment

22,500

Ripco Real Estate

34,546

Financial Services

25,046

Andrew Tishman Real Estate

22,500

Food & Beverage

44,483

9,000

Health & Beauty

17,700

Other

21,604

BCD KZA Realty Group

7,550

NYCRS

5,800

JK Ventures

5,350

Tarter Stats Oâ&#x20AC;&#x2122;Toole

5,000

NAI Friedland Realty

4,200

Realty Artes

3,600

Newmark Knight Frank

3,021

A.C. Lawrence & Co.

2,717

Prudential Douglas Elliman

2,650

(*includes showroom space)

www.www.TheRealDeal.com March 2012 79

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 1/11/12 to 2/10/12. Please submit future deals to deals@therealdeal.com.

Office leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

1221 Sixth Ave

130,000

SiriusXM / M. Goldman, M. Barlow, Studley

n/a / n/a

The satellite radio company signed a lease renewal for floors 19, 36 and 37, the New York Post reported.

22 Cortlandt St

126,000

Municipal Credit Union / B. Rosner, S. Schofel, Newmark Knight Frank

n/a / Barrett Stern, Grubb & Ellis

The credit union signed a new 15-year lease.

488 Madison Ave

107,308

TBWA Worldwide / Lee Feld, Feld Real Estate

The Feil Organization / Represented in-house

The international advertising agency signed a lease renewal for floors four through seven.

1633 Broadway

86,000

Digital Generation / CBRE

Paramount Group / CBRE

The digital technology services provider signed a lease, the New York Post reported.

5 Penn Plaza

85,923

SiriusXM / M. Goldman, M. Barlow, Studley

n/a / P. Turchin, E. Deutsch, CBRE

The satellite radio company signed a lease renewal, the New York Post reported.

622 Broadway

69,000

Take-Two Interactive / S. Siegel, H. Stevens, CBRE

Yuco Management / W. Cohen, M. Weiss, Newmark Knight Frank

The publisher, developer and distributor of video games signed a 10-year lease renewal.

750 Third Ave

57,364

Endurance Reinsurance Corporation / R. Masiello, P. Riguardi, Jones Lang LaSalle

Condé Nast; SL Green / D. Kaufman, D. Amsterdam, SL Green; G. Tosko, D. Hollander, J. Frazier, CBRE

The reinsurance firm signed a 10-year sublease for 40,500 square feet and a 10-year direct lease with the landlord for 16,864 square feet.

400 East Fordham Rd (The Bronx)

47,792

Paraprofessional Healthcare Institute / E. Benedek, C. Silbergleit, NAI Friedland Realty

Fordham Place Office LLC / E. Benedek, C. Silbergleit, NAI Friedland Realty

The medical office signed a lease.

601 West 26th St

47,144

McGarryBowen / D. Hollander, S. Zarba, CBRE

RXR Realty / Represented in-house

The advertising firm signed an expansion lease to add to its 130,000 square feet of space at the building, GlobeSt.com reported.

405 Lexington Ave

43,000

Memorial Sloan-Kettering Cancer Center / Mark Weiss, Newmark Knight Frank

Tishman Speyer / Represented inhouse

The hospital signed a long-term direct lease with the landlord for the entire third floor, the New York Post reported. The tenant had been subleasing from Wachovia.

100 William St

42,000

Odyssey Re Holding Corp. / H. Stein, N. Goldmacher, T. Stracci, Newmark Knight Frank

Mitsui Fudosan / S. Sloves, J. Cope, M. Ravesloot, CBRE

The reinsurance and specialty insurance underwriter signed a long-term lease for the entire fourth and fifth floors. The reported asking rent was $36 per square foot. The tenant is relocating from 17 State Street.

40 Wall St

36,921

Harry Fox Agency / Studley

n/a / J. Horowitz, J. Lichtenberg, A. Peretz, C&W

The music licensing and rights management firm signed a lease to relocate to another building, GlobeSt.com reported. The tenant was previously located at the Starrett-Lehigh Building at 601 West 26th Street.

417 Fifth Ave

35,000

CafeMom / David Dusek, Studley

n/a / Roxana Girand, Murray Hill Properties

The online community for moms signed a 10-year lease to relocate and expand its New York City headquarters to the entire seventh floor. The company is moving from a smaller, 18,000-square-foot space at 401 Park Avenue South.

156 William St

32,707

Pace University / D. Falk, K. Ciminelli, Newmark Knight Frank

Capstone Equities / Brad Gerla, CBRE

The school signed a lease for the entire fifth floor and a portion of the eighth.

501 Seventh Ave

29,702

Carolina Herrera / Matthew McBride, CBRE

W&H Properties / L. Smith, G. Kamenetsky, CBRE

The fashion design firm signed a lease renewal for 18,509 square feet on the 17th floor and added 11,193 square feet on the 16th floor.

95-25 Queens Blvd (Queens)

25,000

New York Life Insurance Company / Mitti Liebersohn, C&W

LeFrak Organization / Roy Chipkin, CBRE

The life insurance company signed a 10-year lease for the entire fourth floor, the New York Post reported. Mitti Liebersohn began negotiating the lease on behalf of the tenant while he was with Cushman & Wakefield, but he is now with Jones Lang LaSalle.

425 Park Ave

25,000

Keller Williams Realty / Jeffrey Rosenblatt, Newmark Knight Frank

Lebhar Friedman / Jeffrey Rosenblatt, Newmark Knight Frank

The residential brokerage signed a sublease on the sixth floor. The building is owned by L&L Holding Company.

463 Seventh Ave

23,785

Consolidated Children’s Apparel / Joseph Friedman, Adams & Co.

The Arsenal Company LLC / David Levy, Adams & Co.

The children’s apparel company signed a seven-year lease. The reported asking rent was $32 per square foot.

One Whitehall St

21,000

Lifespire Inc. / Barry Goodman, Newmark Knight Frank

n/a / Adam Rappaport, C&W

The nonprofit signed a 14-year sublease.

120 West 45th St

19,397

DeVry College of New York / Erica Rubenstein, Newmark Knight Frank

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

The school signed a 10-year lease expansion and extension.

519 Eighth Ave

16,000

Global Education New York / A. Bonett, N. Zagar, Adams & Co.

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

The school signed a 10-year lease. The reported asking rent was in the high $30s per square foot.

625 Broadway

16,000

jumP / H. Kesseler, J. Gosin, Newmark Knight Frank

n/a / H. Kesseler, J. Gosin, Newmark Knight Frank

The creative editorial boutique signed a lease renewal for 8,000 square feet and expanded by 8,000 square feet.

575 Fifth Ave

15,475

Navillas Tile Inc. / Daniel Woods, Grubb & Ellis

L’Oreal USA Inc. / Jason Frazier, CBRE

The construction company signed a four-year sublease.

1400 Broadway

15,088

Hatch Mott McDonald / D. Goldstein, J. Schroeder, Studley

W&H Properties / S. Klau, E. Harris, Newmark Knight Frank

The engineering firm signed a new lease.

48 Wall St

13,650

Situs Holdings LLC / J. Fabrizi, W. Overlock, C&W

Swig Equities / Jonathan Dean, Swig Equities

The real estate advisory firm signed a new lease for the entire 14th floor.

245 Fifth Ave

12,724

The Institute for Integrative Nutrition / Thomas Jacobs, Rice & Associates

Universal Music Group / S. Gottlieb, D. Wilpon, B. Dooley, CBRE

The health coach training company signed a sublease.

350 Broadway

12,000

Coen Brothers / Michael Rouzenrouch, Miyad Realty

n/a / n/a

The film company signed a lease.

800 Third Ave

11,300

Michelman & Robinson LLP / R. Silver, S. Brown, Newmark Knight Frank

Joseph P. Day Realty / Represented in-house

The law firm signed a new lease to relocate its offices.

152 West 57th St

11,000

CQS US / P. Revson, Z. Holzman, Studley

TF Cornerstone / Matt Leon, Newmark Knight Frank

The asset management group signed an expansion lease on the 40th floor, the New York Post reported. The tenant is relocating from a smaller space on the 41st floor.

134 West 29th St

10,000

AICH / A. Saks, M. Rouzenrouch, Miyad Realty

n/a / Jonata Dayan, Winoker Realty

The nonprofit signed a lease.

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Office leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

419 Park Ave South

9,000

Co: Collective / J. Gladstone, G Postyn, Walter & Samuels

Walter & Samuels / David Berley, Walter & Samuels

The brand consultancy signed a lease.

1411 Broadway

8,736

Travelclick / n/a

n.a / R. Alexander, R. Stillman, B. Weitzman, Z. Freeman, B. Hay, CBRE

The online hotel service provider signed a lease on the 26th floor.

61 Broadway

8,250

Public Health Solutions / Robert Corbi, Jones Lang LaSalle

Broad Street Development / n/a

The nonprofit signed a new lease on the 22nd floor.

625 Broadway

8,000

Studio One Networks / Mike Okun, CBC Hunter Realty

n/a / H. Kesseler, J. Gosin, Newmark Knight Frank

The Internet content syndication company signed a new lease.

625 Broadway

8,000

n/a / Dawn Frojen, Prudential Douglas Elliman

n/a / H. Kesseler, J. Gosin, Newmark Knight Frank

The real-time information services and analytics provider signed a new lease.

625 Broadway

8,000

Manic / H. Kesseler, J. Gosin, Newmark Knight Frank

n/a / H. Kesseler, J. Gosin, Newmark Knight Frank

The graphic design company signed a lease renewal.

516 West 25th St

7,849

Imaginary Forces / n/a

Tan Holding / Pamela Title, Murray Hill Properties

The entertainment and media company signed a four-year lease. The reported asking rent was $42 per square foot.

38 West 21st St

7,000

Autodesk / Greg Wang, Colliers International

Jack Vogel Assoc. / Doug Rice, Rice & Associates

The 3D design software company signed a lease renewal.

242 West 36th St

6,700

New York City Housing Partnership Development Corporation / Grant Greenspan, Kaufman Organization

Kaufman Organization / B. Raskob, M. Heaner, Kaufman Organization

The nonprofit signed a 10-year lease. The reported asking rent was $33 per square foot.

104 West 40th St

6,610

RDA Ventures / Marc Miller, Winoker Realty

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

The investment firm signed a lease for the entire 19th floor.

100 William St

6,411

Priceline / Richard Levine, CBRE

Mitsui Fudosan / S. Sloves, J. Cope, M. Ravesloot, R. Wizenberg, CBRE

The commercial website for travel-related discounts signed a six-and-a-halfyear lease to expand in the building, the New York Pos reported. The tenant will occupy a total of 18,094 square feet.

1411 Broadway

6,394

Wild Tangent Inc. / n/a

n/a / R. Alexander, R. Stillman, B. Weitzman, Z. Freeman, CBRE

The gaming company signed a lease on the 12th floor.

120 West 45th St

5,877

Horton Point LLC / Jordan Mandel, The Vortex Group

SL Green / P. Glickman, F. Doyle, D. Biasotti, D. Kleiner, J. Tootell, Jones Lang LaSalle

The quantitative investment firm signed a new five-year lease on the fourth floor.

30 West 24th St

5,625

Licensing Company North America Inc. / J. Buslik, A. Bonett, Adams & Co.

Twenty Three R.P. Associates / J. Buslik, A. Bonett, Adams & Co.

The brand licensing company signed a two-year lease renewal. The reported asking rent was $35 per square foot.

5 Hanover Sq

5,600

Tompkins & Davidson LLP / Andrew Stein, Vicus Partners

n/a / Todd Korren, Savanna

The law firm signed a five-year lease renewal.

80 Maiden Lane

5,500

Gallant Management / Michael Rouzenrouch, Miyad Realty

n/a / James Graham, Winslow & Co.

The real estate firm signed a lease.

39 West 38th St

5,400

Jed Root / Matt Bergey, CBRE

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The fashion agency signed a lease on the sixth floor. The reported asking rent was $28 per square foot.

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Office leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

39 West 38th St

5,400

Archadia Group / David Youngworth, Living Real Estate

n/a / C. O’Toole, S. Moore, Tarter Stats O’Toole

The tenant signed a lease on the ninth floor. The reported asking rent was $28 per square foot.

61 Broadway

5,288

Xerox / D. Neye, B. Reiver, Jones Lang LaSalle

Broad Street Development / n/a

The global document management company signed a lease on the 17th floor.

225 Broadway

5,000

Brainjuicer / Michael Rouzenrouch, Miyad Realty

n/a / Braun Management

The marketing firm signed a lease.

461 Park Ave South

4,775

Bunk1/Ackercamps.com / n/a

Rosehill Property Associates Inc. / Randy Sherman, Murray Hill Properties

The Internet firm signed a six-year lease. The reported asking rent was $40 per square foot.

250 West 57th St

4,758

AFE Consulting / Andrew Braver, C&W

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

The economic consulting and expert services firm signed a lease on the ninth floor.

15 West 39th St

4,555

Be Fluent / Ken Lerner, Okada & Co.

n/a / Phil Silverstein, NAI Global

The language school signed a lease. The reported asking rent was $27 per square foot.

134 West 29th St

4,500

Partnership for Innovative Comprehensive Care / Jean Bates, A.C. Lawrence & Co.

Sitasons International / Suraj Advaney, Triboro Realty and Management

The nonprofit signed a 10-year lease on the top floor of the 12-story office building.

359 Broadway

4,500

Barbarian Group / Michael Rouzenrouch, Miyad Realty

n/a / n/a

The fashion company signed a lease.

55 Fifth Ave

4,091

Cosnova / Doug Rice, Rice & Associates

Time Equities / Brandon Medeiros, Time Equities

The cosmetics company signed a lease.

61 Broadway

4,029

Wall Street Strategies / n/a

Broad Street Development / n/a

The independent stock market research company signed a lease renewal on the 14th floor.

62 Williams St

4,000

Bernstein and Solomon / M. Rouzenrouch, A. Saks, Miyad Realty

n/a / n/a

The law firm signed a lease.

256 West 36th St

3,500

JCPenney / Paul Popkin, Popkin Group

n/a / C. O’Toole, E. Eckstein, Tarter Stats O’Toole

The department store company signed a lease for seventh-floor office space. The reported asking rent was $35 per square foot.

1133 Broadway

3,259

Rice & Associates / Doug Rice, Rice & Associates

Kew Management / Represented inhouse

The real estate brokerage signed a lease.

516 West 25th St

3,253

Black Frame / n/a

Tan Holding / Pamela Title, Murray Hill Properties

The entertainment and media firm signed a four-year lease. The reported asking rent was $42 per square foot.

461 Park Ave South

2,825

Park Urologic / n/a

Rosehill Property Associates / Randy Sherman, Murray Hill Properties

The medical office signed a four-year lease. The reported asking rent was $40 per square foot.

915 Broadway

2,823

DeAgostini Publishing / Elizabeth Juviler, Rice & Associates

915 Broadway Assoc. / Carol Sacks, ABS Partners

The publishing firm signed a lease.

61 Broadway

2,765

JAD Consulting / Toby Banta, UGL Equis

Broad Street Development / n/a

The FDA regulations and standards specialist signed an expansion lease on the fifth floor.

39 West 38th St

2,700

Send the Trend / Peter Rosenlow, Winslow & Co.

n/a / C. O’Toole, S. Moore, Tarter Stats O’Toole

The technology firm signed a lease on the third floor. The reported asking rent was $27 per square foot.

61 Broadway

2,664

X-Change Financial Access / Jack Shulman, Colliers International

Broad Street Development / n/a

The trade execution services firm signed a new lease on the 11th floor.

256 West 36th St

2,500

Yumiko / Ken Lerner, Okada & Co.

Albert Malekan / C. O’Toole, E. Eckstein, Tarter Stats O’Toole

The fashion company signed a lease. The reported asking rent was $32 per square foot.

256 West 36th St

2,500

Moss Furniture Group / Hiro Iwata, Okada & Co.

Albert Malekan / C. O’Toole, E. Eckstein, Tarter Stats O’Toole

The design company signed a lease on the 10th floor. The reported asking rent was $32 per square foot.

351 Broadway

2,500

n/a / Michael Rouzenrouch, Miyad Realty

n/a / n/a

The law firm signed a lease.

61 Broadway

2,494

Spector & Associates / Gabe Whitman, C&W

Broad Street Development / n/a

The public relations firm signed a lease on the 10th floor.

10 West 33rd St

2,428

Midway Industries America Inc. / David Levy, Adams & Co.

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

The fashion accessories company signed a three-year lease renewal. The reported asking rent was $42 per square foot.

16 West 36th St

2,312

DSJS Inc. / CBRE

Beach Plaza Corporation / D. Levy, N. Zagar, Adams & Co.

The tenant signed a three-year lease. The reported asking rent was $36 per square foot.

40 West 38th St

2,100

The Productive LLC / Hiro Iwata, Okada & Co.

n/a / Matt Feigen, Newmark Knight Frank

The animation studio signed a lease.

401 Broadway

2,000

Gotryiton Inc. / Michael Rouzenrouch, Miyad Realty

n/a / Jay Caseley, ABS Partners

The technology firm signed a lease.

25 Division St

2,000

C41 Media / Michael Rouzenrouch, Miyad Realty

n/a / n/a

The production firm signed a lease.

414 Broadway

2,000

Skaags Design / Michael Rouzenrouch, Miyad Realty

n/a / n/a

The design company signed a lease.

70 Lafayette St

2,000

Coursekit / Michael Rouzenrouch, Miyad Realty

n/a / n/a

The technology firm signed a lease.

61 Broadway

1,920

New York Committee for Occupational Safety and Health / Amy Lawrence, Denham Wolf Real Estate

Broad Street Development / n/a

The nonprofit signed a new lease on the 17th floor.

10 West 33rd St

1,915

Expressions NYC Inc. / David Levy, Adams & Co.

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

The fashion accessories firm signed a five-year lease. The reported asking rent was $39 per square foot.

10 West 33rd St

1,852

Active Footwear Inc. / David Levy, Adams & Co.

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

The footwear company signed a five-year lease. The reported asking rent was $42 per square foot.

110 Greene St

1,850

Naked Communications / A. Saks, M. Rouzenrouch, Miyad Realty

n/a / Goldman Properties

The marketing company signed a lease.

16 West 36th St

1,820

Biatta Intimates / Joshua Nolan, NSNYRE

Beach Plaza Corporation / D. Levy, N. Zagar, Adams & Co.

The underwear company signed a five-year lease. The reported asking rent was $36 per square foot.

16 West 36th St

1,678

My Credit Specialist Inc. / D. Levy, N. Zagar, Adams & Co.

Beach Plaza Corporation / D. Levy, N. Zagar, Adams & Co.

The credit repair and credit restoration company signed a two-year lease renewal. The reported asking rent was $36 per square foot.

11 Broadway

1,587

Oraiko Corp. / M. Kabiri, W. Stein, Manhattan Commercial Realty Corp.

n/a / Mendy Braun, Braun Management

The software company signed a two-year lease.

110 West 40th St

1,578

Insight Investments LLC / Centric Real Estate Advisors

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

The technology consultancy signed a two-year lease. The reported asking rent was $42 per square foot.

84 March 2012 www.TheRealDeal.com

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Office leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

1071 Sixth Ave

1,563

Joseph Industries Inc. / D. Levy, J. Schwartz, Adams & Co.

Ten Seventy One Associates / D. Levy, J. Schwartz, Adams & Co.

The industrial remanufacturing company signed a one-year lease renewal. The reported asking rent was $49 per square foot.

183 Madison Ave

1,512

n/a / J. Buslik, S. Goodman, Adams & Co.

Rigby Realty / S. Kearns, H. Blair, C&W

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

305 Church St

1,500

Tutor Spree / Michael Rouzenrouch, Miyad Realty

n/a / n/a

The technology firm signed a lease.

19 West 21st St

1,410

Casting Network / Doug Rice, Rice & Associates

Fifth Ave, Partners / Hudson Realty Enterprises

The Los Angeles-based software company signed a lease.

700 Washington St

1,400

CLJDesign LLC / L. Khalili, M. Pinsky, Affinity Commercial

n/a / n/a

The interior design company signed a three-year lease.

40 Wall St

1,377

Real Estate Resource Group / Ilan Hoffman, Grubb & Ellis

40 Wall Street LLC / n/a

The real estate services firm signed a five-year lease.

330 West 58th St

1,325

Dr. Dana Cohen / Betty Posner, NYCRS

Park Towers South Company LLC / Brett Obletz, Goldfarb Properties

The medical tenant signed a five-year lease.

285 West Broadway

1,300

Lisa Shin Photography LLC / Sam Reifel, Oxford Properties

285 West Broadway Associates LP / Joshua Salon, Salon Realty

The photographer signed a six-year lease.

11 Broadway

1,300

Matthew Cohen Creative LLC / Michael Rouzenrouch, Miyad Realty

n/a / Braun Management

The production company signed a lease.

15 Maiden Lane

1,300

Poch and Lukow / Michael Rouzenrouch, Miyad Realty

n/a / n/a

The law firm signed a lease.

285 West Broadway

1,200

Imagemme LLC / Sam Reifel, Oxford Properties

285 West Broadway Associates LP / Joshua Salon, Salon Realty

The branding and design agency signed a new three-year lease.

110 West 40th St

1,154

Richard Backer CPA PC / D. Levy, B. Maslin, Adams & Co.

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

The accounting firm signed a three-year lease renewal. The reported asking rent was $39 per square foot.

61 Broadway

1,100

Proship Inc. / Jonathan Cope, CBRE

Broad Street Development / n/a

The boat dealer and broker signed a lease renewal on the 30th floor.

34 West 33rd St

1,050

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

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

The tenant signed a five-year lease renewal. The reported asking rent was $39 per square foot.

12 East 33rd St

1,000

Village Health Works / Michael Rouzenrouch, Miyad Realty

n/a / n/a

The nonprofit signed a lease.

928 Broadway

1,000

Ronin Management / Michael Rouzenrouch, Miyad Realty

n/a / n/a

The financial company signed a lease.

10 West 33rd St

891

Alfa Travel Gear / David Levy, Adams & Co.

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

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

110 West 40th St

825

Splash Ltd. / D. Levy, B. Maslin, Adams & Co.

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

The textile and graphic design studio signed a five-year lease. The reported asking rent was $39 per square foot.

580 Broadway

800

Tribeca Digital / R. Plikh, A. Saks, M. Rouzenrouch, Miyad Realty

n/a / n/a

The digital creative firm signed a lease.

580 Broadway

800

Medical Aesthetics / Michael Rouzenrouch, Miyad Realty

n/a / n/a

The medical tenant signed a lease.

10 West 33rd St

718

Amrapur Overseas Inc. / David Levy, Adams & Co.

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

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

611 Broadway

600

Siikim / Mayer Jotkowitz, Miyad Realty

n/a / n/a

The fashion tenant signed a lease.

10 West 33rd St

447

Latique Handbags and Accessories Inc. / David Levy, Adams & Co.

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

The fashion accessories firm signed a nine-year lease. The reported asking rent was $39 per square foot.

401 Broadway

400

Dropzone International / Mayer Jotkowitz, Miyad Realty

n/a / n/a

The production company signed a lease.

401 Broadway

400

Eric Ervin / Abe Saks, Miyad Realty

n/a / n/a

The law firm signed a lease.

Retail leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

605 West 48th St

22,500

La Boom Inc. / Andrew Tishman Real Estate

605 West 48th Street LLC / A. Weisman, D. Cekolis, S. Siegel, Grubb & Ellis

The Latin night club signed a lease.

434 86th St (Brooklyn)

18,438

Duane Reade / Diana Boutross, Winick Realty

86 Blue LLC / Diana Boutross, Winick Realty

The drugstore signed a lease.

244-05 Northern Blvd (Queens)

14,000

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

East River Petroleum Realty / R. Senior, I. Shabot, Ripco Real Estate

The bank signed a 20-year lease for a corner location.

37-80 Junction Blvd (Queens)

12,000

Duane Reade / Zach Mishaan, Winick Realty

Crown Acquisitions / Zach Mishaan, Winick Realty

The drugstore signed a lease for another location.

261-267 West 125th St

9,500

Red Lobster / B. Cohen, T. Rettaliata, Ripco Real Estate

Grid Properties; the Gotham Organization / B. Cohen, T. Rettaliata, Ripco Real Estate

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

604 Union St (Brooklyn)

9,000

Dinosaur Bar-B-Que / A. Moger, J. Korris, BCD

USM Partners LLC / Gary Mayzlin, Kalmon Dolgin Affiliates

The barbecue restaurant signed a 15-year lease with three five-year options for another location.

1498 York Ave

8,238

Duane Reade / Jeff Winick, Winick Realty

York Towers Inc. / Craig Hantigan, Signature Properties

The drugstore signed a lease for another location.

860 East 161st St

7,550

Variety & Beauty Supply / Kathy Zamechansky, KZA Realty Group

Longwood Gardens LLC / Kathy Zamechansky, KZA Realty Group

The beauty supply store signed a five-year lease.

1373 Fulton St (Brooklyn)

7,046

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

957 Marcy Ave LLC / R. Senior, I. Shabot, Ripco Real Estate

The bank signed a 20-year lease for a corner space.

9 East 19th St

5,350

n/a / Julie Kang, JK Ventures

G.A.M. / Doug Rice, Rice & Associates

A salon signed a lease.

1477 Third Ave

4,800

Exceed Fitness / A. Shinn, L. Block, Winick Realty

The Garth Organization / Represented in-house

The fitness studio signed a lease.

371 East 149th St

4,000

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

N&L East 149 Street LLC / R. Senior, I. Shabot, Ripco Real Estate

The bank signed a 15-year lease for another location.

86 March 2012 www.TheRealDeal.com

Real Deal 55 Retail March2012_Real Deal 2/16/12 6:29 PM Page 1

FINANCIAL DISTRICT’S #1 RETAIL OPPORTUNITY

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The Location • 5+ million tourists a year • Access to over 300,000 employees

An Amazing Flagship Opportunity Just Blocks From Wall Street

• One of the fastest growing residential areas with over 55,000 residents • 2nd largest business district in the city

For additional information or lease inquiries please contact: Ramona Huegel or David M. Israni

212.609.3700 WWW.55BROADWAY.COM

GREAT SERVICE IS ALWAYS GOOD BUSINESS

• One of the wealthiest neighborhoods in NYC • Home to the biggest names in retail • Surrounded by exceptional restaurants • Tremendous foot traffic • Close proximity to the 4, 5, 1, 2, 3, R, J, M & Z subway lines, PATH and ferries to Brooklyn, Staten Island & New Jersey

“We're earning the right to be your next landlord.” Daniel M. Blanco

Raymond Chalmé

Retail leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

614-618 Castle Hill Ave (The Bronx)

3,640

Mannam Medical / Alex Hill, Winick Realty

R.A. Real Estate / Alex Hill, Winick Realty

The medical office signed a lease.

1611 Broadway

3,600

Caffe Bene / Suzy Byun, Realty Artes

Riese Organization / Represented inhouse

The South Korea-based coffee chain signed a lease for its first U.S. flagship store.

625 Broadway

3,021

Gonzalez y Gonzalez / Jordan Gosin, Newmark Knight Frank

n/a / H. Kesseler, J. Gosin, Newmark Knight Frank

The Mexican restaurant signed a lease.

852 Second Ave

2,762

Duane Reade / Michael Gleicher, Winick Realty

Envoy Tower Associates / Michael Gleicher, Winick Realty

The drugstore signed a lease for another location.

205 Lexington Ave

2,717

New York Doctors Walk-In Urgent Care Center / Jean Bates, A.C. Lawrence & Co.

205-215 Lexington Avenue Associates / A. Shinn, D. Rubens, Winick Realty

The walk-in medical clinic signed a 12-year lease on the ground floor of the 18-story building.

504 Sixth Ave

2,500

n/a / Ravi Idnani, NYCRS

n/a / James Famularo, NYCRS

A European espresso bar signed a lease.

466 Broome St

2,500

Tahari / Catherine O’Toole, Tarter Stats O’Toole

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

The fashion designer signed a retail lease.

250 West 39th St

2,500

Kibala Retail Group / C. O’Toole, J. Mines, Tarter Stats O’Toole

n/a / C. O’Toole, J. Mines, Tarter Stats O’Toole

The tenant signed a retail lease.

315 East 86th St

2,400

NYC Guitar East LLC / Joshua Salon, Salon Realty Corp.

315 Realty Associates LLC / David Goldberg, Living Real Estate Group

The guitar school signed a lease for its fourth New York location.

261 11th Ave

2,200

M. Teixeira Soaptones Inc. / Isaac Kashanian, Metropolitan Property Group

n/a / R. Betesh, K. McCann, Sinvin Realty

The soapstone distributor signed a 10-year lease for ground-floor space.

277 Fifth Ave

2,200

American Icon NYC / Hal Shapiro, Winick Realty

Mirsal LLC / Hal Shapiro, Winick Realty

The gift shop specializing in American collector’s items signed a lease for its second Manhattan location.

9 Central Park North

2,000

Wholesome Foods / F. Consolo, J. Aquino, A. Maglio, Prudential Douglas Elliman

n/a / F. Consolo, J. Aquino, A. Maglio, Prudential Douglas Elliman

The health food products market signed a long-term lease for its second Manhattan location.

1646 Second Ave

1,800

Duane Reade / Michael Gleicher, Winick Realty

85th and Second Avenue / Michael Gleicher, Winick Realty

The drugstore signed a lease for another location.

7 Hanover Square

1,650

Robusta Espresso / R. Smith, T. Jung, Winick Realty

MB Real Estate / R. Smith, T. Jung, Winick Realty

The coffee shop signed a lease.

184 Thompson St

1,605

High Heat Grill - Oven - Tap / n/a

n/a / M. Gorman, J. Gettler, M. Lu, New Street Realty Advisors

The restaurant signed a lease.

46-15 Center Blvd (Queens)

1,557

Sweetleaf LIC / S. Baker, J. Singer, Winick Realty

TF Cornerstone / S. Baker, J. Singer, Winick Realty

The coffee and espresso bar signed a lease for its second location.

2756 Broadway

1,550

n/a / n/a

n/a / David Chkheidze, Massey Knakal

A restaurant signed a lease.

15 East 167th St

1,500

Little Caesars Pizza / R. Herko, D. Scotto, NAI Friedland Realty

15 E 167th St. Realty / R. Herko, D. Scotto, NAI Friedland Realty

The pizza chain signed a lease.

961 East 174th St

1,500

Little Caesars Pizza / R. Herko, D. Scotto, NAI Friedland Realty

Ashkenazy Acquisitions Corp. / R. Herko, D. Scotto, NAI Friedland Realty

The pizza chain signed a lease.

1434 Lexington Ave

1,500

Subway Real Estate Corp. / n/a

1434 Lexington Avenue LLC / J. Salon, A. Soto, Salon Realty

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

338 Eighth Ave

1,300

n/a / Abe Bichoupan, NYCRS

A deli operator signed a 12-year lease for another location.

318 East 6th St

1,300

n/a / Abe Bichoupan, NYCRS

n/a / Jason Turner, Zelnik & Co.

A restaurateur signed a 10-year lease for another location.

1384 Boston Rd (The Bronx)

1,200

Crotona Pharmacy Corp. / S. Lorenzo, J. Rivera, NAI Friedland Realty

1394 B.P.R. Realty Corp. / S. Lorenzo, J. Rivera, NAI Friedland Realty

The pharmacy signed a lease.

175 Seventh Ave

1,099

Depi 4 Ever / Cosmo Montemurro, Winick Realty

Chelsea Warren Co. / Alex Hill, Winick Realty

The fashion retailer signed a lease.

610 Fifth Ave

881

Longchamp / n/a

Tishman Speyer / n/a

The French accessories company signed a lease, the New York Post reported.

645 Madison Ave

817

Dodo / Andrew Kahn, C&W

TF Cornersteon / n/a

The Italian jeweler signed a lease for its first New York City location.

100-21 Queens Blvd (Queens)

700

Subway / Cosmo Montemurro, Winick Realty

Achs Management / Ralph Hanan, Metropolitan Skyline Realty

The sandwich chain signed a lease for another location.

667 Lexington Ave

700

Arnon Magal / H. Demetrious, I. Donath, NYCRS

n/a / Haber Realty

The restaurant owner signed a 10-year lease to open another location.

1223 Madison Ave

650

Pink Chicken / F. Consolo, J. Aquino, Prudential Douglas Elliman

n/a / F. Consolo, J. Aquino, Prudential Douglas Elliman

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

Buys Address

Size

Buyer / Representative

Seller / Representative

Notes

Upper West Side portfolio

5 apt. bldgs, 710 units total

UDR; MetLife / n/a

Stellar Management; the Chetrit Group / Doug Harmon, Eastdil Secured

The Columbus Square complex sold for $630 million. The buildings are located at 801 Amsterdam Avenue, 775 Columbus Avenue, 795 Columbus Avenue, 805 Columbus Avenue and 808 Columbus Avenue.

530 Fifth Ave

26-story, 500,000 sf office bldg

Wafra / n/a

Joseph Moinian; Joseph Chetrit / D. Harmon, A. Spies, Eastdil Secured

The property sold for $390 million, or $780 per square foot, the New York Post reported.

42nd St and Broadway

330-room hotel

FelCor Lodging Trust Inc.; Highgate Holdings LLC / n/a

n/a / n/a

The site of the former Knickerbocker Hotel sold for $115 million. The new owner plans to re-open the hotel, which will serve as its flagship, in late 2013.

226 West 52nd St

480-room hotel

Apollo Global Management; Chartres Lodging Group / n/a

Accor Group / n/a

The Novotel Times Square sold for about $94 million. The seller will continue to manage the hotel.

103-107 Prince St

3-story retail bldg

Crown Acquisitions; Centurion Realty / n/a

n/a / n/a

The site of the city’s first Apple store sold for $70.85 million, the New York Post reported.

428 West 14th St

5-story, 47,300 sf office bldg

The Yucaipa Companies / n/a

Blackrock Realty Advisors / R. Baxter, J. Caplan, S. Latham, R. Cohen, Jones Lang LaSalle

The property sold for $65 million. The building, which has 9,460 square feet of retail space, is 100 percent occupied by office and retail tenants.

200 Lafayette St

7-story, 90,000 sf office bldg

Kushner Companies; CIM Group / n/a

John Zaccaro Sr.; John Zacarro Jr. / Robert Burton, Massey Knakal

The office tower sold for $50 million. The buyers are planning a $20 million renovation to upgrade the building.

88 March 2012 www.TheRealDeal.com The

Buys continued Address

Size

Buyer/ Representative

Seller / Representative

Notes

Washington Heights portfolio

5 apt. bldgs, 217 units total

Coltown Properties; Phoenix Capital / n/a

Elise Rodino; Mary Rodino / T. Shafran, G. Algan, Citicore

The package of elevator buildings sold for $31 million. The properties are located at 75 Fort Washington Avenue, 3880 Broadway, 3820 Broadway, 545 West 162nd Street and 540 West 157th Street.

152-168 Bleecker St

27,000 sf retail space

Private equity fund / Steve Geller, Berko & Associates

n/a / Angel Ramos, Berko & Associates

The retail space at the base of the Atrium Building sold for $30.6 million. The asset is anchored by Chase Bank, CVS and La Poasson Rouge, among others.

332 West 44th St

44,564 sf parking garage

Extell Development / n/a

Central Parking System / n/a

The garage sold for $29 million. The site is just two blocks away from Extell Developmentâ&#x20AC;&#x2122;s 50-story hotel project at 131-139 West 45th Street, which Gary Barnett, the companyâ&#x20AC;&#x2122;s president, said last year would go ahead despite the company having sold off 11 adjacent commercial property lots in Midtown for approximately $125.16 million, including the hotel site, in July. He told The Real Deal the transaction was primarily a strategy to get an equity partner involved with the hotel project.

5-9 Avenue D and 306-310 East 2nd St

130,000 sf development site

Kahen Properties / n/a

Manhattan Beer Distributors / J. Smith, G. Nowak, J. Radmin, Friedman-Roth Realty

The six assembled lots sold for $21 million, or about $190 per buildable square foot. The buyer plans to spend another $30 million to develop the site into a luxury rental building.

445 West 20th St

Development site

The Brodsky Organization / n/a

General Theological Seminary / n/a

The property sold for $18.5 million, Curbed reported.

430 and 434 West 37th St and 429 West 36th St

3 development sites

Extell Development / n/a

Central Parking System / n/a

The properties sold for $15 million. The three sites include a four-story, 17,702-square-foot garage with 12,711 square feet of usable floor area, which is zoned as commercial overlay within a residential district, an adjacent 4,937square-foot vacant lot, and a 9,890-square-foot garage respectively.

50 Trinity Pl

Hotel development site

n/a / n/a

Sam Chang / Ivan Hakimian, HPNY

The stalled development site sold for $15 million, the New York Post reported.

888 Lexington Ave

2-story, 5,658 sf office bldg

BLDG Management / n/a

Alrose Group / Aaron Jungreis, Rosewood Realty

The property sold for $13.25 million. The site has an additional nearly 20,000 square feet of development rights.

12 Fifth Ave

10-story apt. bldg, 33 units total

United Fifth LLC / n/a

Mar-Mart Realty Co. / Marcus & Millichap

The elevator building sold for $12.5 million, GlobeSt.com reported.

66-70 West 109th St

Two 6-story apt. bldgs, 48 units total

n/a / Orly Hazan, Besen & Associates

Omnia Group LLC / Orly Hazan, Besen & Associates

The walk-up properties sold for $11.35 million. The price represents a gross rent multiple of 10.

Harlem portfolio

8 apt. bldgs, 125 units total

Madison Realty Capital / D. Scheer, A. Jungreis, Rosewood Realty

Capital One Bank / D. Scheer, A. Jungreis, Rosewood Realty

The note for the eight-building package sold for $10.3 million in a deed-inlieu-of-foreclosure transaction. The properties are located at 220-222 West 149th Street, 528-538 West 159th Street and 2546-2548 Seventh Avenue. The price represents a gross rent multiple of 6.07.

2146, 2158 and 2166 Nostrand Ave (Brooklyn)

3 retail bldgs, 50,000 sf total

Jackson Group; Aurora Capital; A&H Acquisitions / n/a

Flatbush Federal Savings Bank / n/a

The adjacent properties sold for $10.14 million.

38-70 Junction Blvd (Queens)

22,500 sf retail bldg

Crown Acquisitions / n/a

n/a / n/a

The property sold for $10 million, the New York Post reported.

42-25 Hampton St (Queens)

7-story apt. bldg, 78 units total

n/a / Ami Efrati, Entrepreneur Properties

The property sold for $10 million.

950-958 and 957-963 Woodycrest Ave (The Bronx)

2 apt. bldgs, 113 units total

954 Woodycrest Ave. LLC / Samuel Kooris, Rosewood Realty

950 Woodycrest LLC / Aaron Jungreis, Rosewood Realty

The properties sold for $9.6 million.

3940 Bronx Blvd (The Bronx)

7-story apt. bldg, 92 units total

3940 Bronx Blvd Owner LLC / Amit Doshi, Besen & Associates

3940 Bronx Blvd Realty LLC / Aaron Jungreis, Rosewood Realty

The elevator building sold for $8.75 million, or $103 per square foot. The price represents a capitalization rate of 7.8 percent and a gross rent multiple of 7.3.

31 Kosciusko St (Brooklyn)

12-story apt. bldg, 23 units total

Gaia Real Estate / n/a

n/a / n/a

The property sold for $8.6 million. The building contains two studios, three duplex units, 16 two-bedrooms and two penthouses homes.

9302 Ridge Blvd (Brooklyn)

6-story, 43,600 sf apt. bldg, 46 units total

n/a / D. Cohen, A. Jungreis, Rosewood Realty

9302 Ridge Owners LLC / D. Cohen, A. Jungreis, Rosewood Realty

The elevator building sold for $7.5 million. The price represents a gross rent multiple of 13.

680 Manhattan Ave (Brooklyn)

24-unit apt. bldg

n/a / Marcel Fridman, Barcel Group

n/a / n/a

The property sold for $7.1 million. The price represents a gross rent multiple of 11.5.

New York portfolio

4 bldgs

n/a / n/a

n/a / R. Knakal, L. Kimyagarov, E. Gevinski, M. Lively, Massey Knakal

Four senior notes for two properties in Harlem and two buildings in Brooklyn sold for $5.7 million. The package includes a four-story residential walk-up at 173 East 117th Street; a five-story walk-up at 217 West 115th Street; a threestory commercial building at 1300-1304 Flatbush Avenue; and a mixed-use building at 283-285 Graham Avenue.

130 Lenox Rd (Brooklyn)

6-story, 51,914 sf apt. bldg, 59 units total

Local Brooklyn investor / Erik Yankelovich, GFI Realty

Patrick James / Yosef Katz, GFI Realty

The property sold for $5.1 million. The price represents a gross rent multiple of 8.5.

112 Fulton St

5-story, 10,000 sf mixed-use bldg

Lam Group / Christopher Okada, Okada & Co.

n/a / Jasper Socia (independent broker)

The property sold for $4.4 million.

3291 Hull Ave and 308 East 209th St (The Bronx)

2 apt. bldgs, 53 units total

n/a / Luca Capin, Capin & Associates

Citicore / T. Shafran, G. Algan, Citicore

The adjacent properties sold for $3.9 million, or about $79 per square foot. The price represents a capitalization rate of 8 percent.

765 Manhattan Ave (Brooklyn)

10,000 sf retail bldg

Crown Acquisitions / n/a

n/a / n/a

The property sold for $3.5 million, the New York Post reported.

Know your Market

ERGPA.com www.TheRealDeal.com March 2012 89

Buys continued Address

Size

Buyer/ Representative

Seller / Representative

Notes

1402 and 1408 Sterling Place (Brooklyn)

Two 4-story apt. bldgs, 40 units total

Fortress FS LLC / Aaron Jungreis, Rosewood Realty

1402 Sterling LLC / Aaron Jungreis, Rosewood Realty

The contiguous walk-up buildings sold for $3.41 million. The price represents a gross rent multiple of 8.

364 East 170th St

56-unit apt. bldg

n/a / David Warren, Barcel Group

n/a / Marcel Fridman, Barcel Group

The property sold for $3.35 million. The price represents a gross rent multiple of 5.

347 East 54th St

4-story, 4,800 sf apt. bldg, 5 units total

n/a / n/a

n/a / T. Gammino, C. Olsen, Massey Knakal

The property sold for $2.7 million. The building has a restaurant on the ground floor, a floor-through unit on the second floor and two studios each on the third and fourth floors.

90 Clermont Ave (Brooklyn)

7-unit apt. bldg

Abraham Equities / Josh Rahmani, Venture Capital Properties

Eastern Capital / O. Cohen, M. DiBella, P. Matheos, M. Hernandez, TerraCRG

The property sold for $2.6 million.

1662 First Ave

4-story apt. bldg, 5 units total

n/a / Abraham Aderet, Besen & Associates

The walk-up building sold for $2.5 million, or $417 per square foot. The price represents a capitalization rate of 4.25 percent and a gross rent multiple of 13.3.

810 River Ave (The Bronx)

Development site

n/a / n/a

n/a / N. Burns, P. Massey, G. Garvin, Massey Knakal

The development site sold for $2.5 million. The lot has a two-story, 40,000square-foot commercial building, which currently houses a bowling alley and a restaurant.

2110 Frederick Douglass Blvd

5,231 sf retail condo

Private investment group / n/a

BRP Development Corp.; Goldman Sachs Urban Investment Group / M. Tortorici, V. Sozio, S. Shkury, Ariel Property Advisors

The retail condo sold for $2.4 million.

414 West 45th St

3-story, 7,419 sf office bldg

n/a / n/a

n/a / B. Knakal, C. Brodhead, Massey Knakal; D. Noonan, Newmark Knight Frank

The property sold for $2.35 million. There is a garage on the ground floor and commercial spaces above.

1466 Beach Ave (The Bronx)

30-unit apt. bldg

Beach Ave LLC / n/a

Ronald Hunt / Sharone Sohayegh (independent broker)

The walk-up property sold for $2.3 million. The price represents a capitalization rate of 7 percent and a gross rent multiple of 6.4.

280 Manhattan Ave

12,610 sf apt. bldg, 10 units total

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

The walk-up building sold for $2.28 million, or about $180 per square foot.

2260 Grand Ave (The Bronx)

26-unit apt. bldg

NYC investor / T. Shafran, G. Algan, Citicore

n/a / F. Benelyahou, L. Capin, Capin & Associates

The property sold for $2.25 million, or about $83 per square foot. The price represents a capitalization rate of 9.8 percent.

300 East 149th St (The Bronx)

4,300 sf industrial bldg

300 East LLC / Peter Cokin, NAI Friedland Realty

149 Street Rizing / Peter Cokin, NAI Friedland Realty

The property sold for $2 million.

402 East 136th St (The Bronx)

6-story, 17,701 sf apt. bldg, 20 units total

Sobro 402 Realty LLC / Maurice Arlos, Besen & Associates

Dacon & Associates / Alan Zucco, Besen & Associates

The property sold for $2 million, or $113 per square foot. The price represents a capitalization rate of 8.9 percent and a gross rent multiple of 6.1. The building has three stores at street level.

1804 Third Ave

5-story, 8,500 sf mixed-use bldg

Private investor / n/a

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

The walk-up building sold for $1.85 million, or $218 per square foot.

446-48 West 167th St

26,089 buildable sf development site

HAP Investments / n/a

BDN NY Management / V. Sozio, M. Tortorici, S. Shkury, Ariel Property Advisors

The vacant lot sold for $1.67 million.

195 Smith St (Brooklyn)

3-story, 3,535 sf apt. bldg, 2 units total

n/a / n/a

n/a / Kenneth Freeman, Massey Knakal

The building sold for $1.64 million, or about $464 per square foot. The property has a retail unit on the ground floor with apartments above.

750-751 Fifth Ave (Brooklyn)

Development site

Green-Wood Cemetery / n/a

McGovern Florist / B. Leary, S. Kelly, C. Sendogdular, CPEX Real Estate

The property sold for $1.63 million.

56-58 West 129th St

Development site

n/a / n/a

Institutional investor / Michael Tortorici, Ariel Property Advisors

The property sold for $1.57 million. The buyer plans to build condominiums on the site.

2409 Beaumont Ave (The Bronx)

23-unit apt. bldg

n/a / Kelly Lin, Besen & Associates

Samn Holdings Corp. / Kelly Lin, Besen & Associates

The property sold for $1.45 million.

336 Meeker Ave (Brooklyn)

6,100 sf warehouse bldg

Chun Hong Tang / Bill Chang, Kalmon Dolgin Affiliates

Frost Collision Body Shop/ Michael Curcio / Joseph Nicholas, Kalmon Dolgin Affiliates

The property sold for $1.4 million.

1140 River Ave (The Bronx)

17,300 sf parking lot

Mp River LLC / Amit Doshi, Besen & Associates

Shree Ganesh Bronx LLC / Ronnie Shaban, Besen & Associates

The lot sold for $1.25 million, or $72 per square foot.

683 Fourth Ave (Brooklyn)

Development site

Ioannis Glyptis; Nick Malafis / n/a

683 4th Ave. LLC / O. Cohen, P. Matheos, TerraCRG

The vacant lot with approved plans for a 16-unit residential building sold for $1.2 million, or $80 per buildable square foot.

79-85 Georgia Ave (Brooklyn)

15,000 sf industrial bldg

n/a / n/a

n/a / J. Berman, J. Deutch, Ariel Property Advisors

The property sold for $1.2 million.

240 President St (Brooklyn)

8-unit apt. bldg

n/a / Marcel Fridman, Barcel Group

n/a / n/a

The property sold for $1.2 million. The price represents a gross rent multiple of 11.

800 Second Ave

1,805 sf comm. condo

n/a / Ken Lerner, Okada & Co.

n/a / Jonata Dayan, Winoker Realty

The office space sold for $1.2 million.

Financing Address

Size

Borrower / Representative

Lender / Representative

Notes

70 West 45th St

165-room hotel

HNA Property Holding Group Co. / n/a

Pacific Coast Capital Partners / n/a

A $65 million senior loan was provided for the acquisition and repositioning of Cassa Hotel. The loan is secured by the lower 24 stories and basement levels of a 45-story tower, with floors 25 through 45 consisting of residential condo units that are not collateral for the loan. The hotel will be managed by Viceroy Hotel Group.

430 West 14th St

5-story, 61,000 sf office bldg

n/a / Cary Pollack, Meridian Capital Group

160,000 sf office bldg

n/a / Allan Lieberman, Meridian Capital Group

East 45th St and Second Ave

90 March 2012 www.TheRealDeal.com

house adGlobal Markets Inc.; Citigroup SL Green / n/a Local savings bank / n/a

A $55 million financing package was arranged for the acquisition of the building. A $44 million mortgage was arranged to recapitalize the property. The sevenyear loan features a rate of 4.375 percent and interest-only payments for the first year.

MRC Investors New Jersey & Pennsylvania

The Related Companies, L.P.

The Dermot Company

Chicago, IL

Brooklyn, NY

Silverstein Properties Subscription Financing

Extell Development Company

Alfieri Co., Inc. Morristown & Red Bank, NJ

New York, NY

$40,000,000

$100,000,000

$90,000,000

$170,000,000

$36,000,000

$700,000,000

December 2011

August 2011

January 2011

April 2011

October 2011

Hotel Acquisition Facility

Multifamily Construction Financing

Credit Enhancement of HFA Bonds

Revolving Credit Facility

Office Term Financing

Hotel & Residential Condominium Construction Financing

Sole Lender

Administrative Agent, Sole Bookrunner & Sole Lead Arranger

Participant

Applied/ Ironstate Development Company

TF Cornerstone

Edward J. Minskoff Equities

Bon Aviv Investments

New York, NY

Long Island City, NY

New York, NY

National Retail Portfolio

Sole Lender

Administrative Agent, Joint Bookrunner & Joint Lead Arranger

Angelo Gordon & Co.

Building & Land Technology

New York, NY

Stamford, CT

$20,750,000

$90,000,000

$165,000,000

$40,000,000

$24,485,000

$70,000,000

October 2011

December 2011

November 2011

December 2011

June 2011

October 2011

Land Acquisition Financing

Multifamily Construction Financing

Office Construction Financing

Office/Retail Acquisition Financing

Multifamily Term Debt Facility

Sole Lender

Administrative Agent, Sole Bookrunner & Sole Lead Arranger

Senior Secured Revolving Credit Facility Sole Lender

Sole Lender

Administrative Agent, Sole Bookrunner & Sole Lead Arrangerr

Building financial relationships with New York real estate clients that span county lines and state borders. In a year that saw challenging markets throughout the U.S., we are proud to have helped our New York real estate clients achieve new goals. Providing market insight, access to capital and tailored financial solutions.

Learn more at bankofamerica.com/CommercialRE

“Bank of America Merrill Lynch” is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., member FDIC. Equal Housing Lender . Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp., both of which are registered broker-dealers and members of FINRA and SIPC, and, in other jurisdictions, by locally registered entities. Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured  May Lose Value  Are Not Bank Guaranteed. ©2012 Bank of America Corporation

Financing continued Address

Size

Borrower / Representative

Lender / Representative

Notes

118-17 Union Turnpike (Queens)

205-unit apt. bldg

Park Lane North Owners Inc. / n/a

NCB / n/a

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

895 Park Ave

44-unit apt. bldg

Park Seventy Ninth Street Corp. / n/a

NCB / n/a

A $5 million first mortgage and a $1.8 million line of credit were arranged for the building.

63-61 Yellowstone Blvd (Queens)

287-unit apt. bldg

Aero Owners Inc. / n/a

NCB / n/a

A $5.2 million first mortgage and a $300,000 line of credit were arranged for the building.

160 West 87th St

38-unit apt. bldg

160 West 87th Street Corp. / n/a

NCB / n/a

A $2.4 million first mortgage and a $500,000 line of credit were arranged for the building.

110-07 73rd Rd (Queens)

77-unit apt. bldg

Wakefield Owners Corp. / n/a

NCB / n/a

A $2.3 million first mortgage and a $500,000 line of credit were arranged for the building.

29-37 41st Ave (Queens)

Development site

E Home Real Estate / n/a

Emerald Creek Capital / Joe Stafford, Emerald Creek Capital

A $2 million first-mortgage bridge loan was provided for the purchase of the lot. The borrower intends to construct a 230-unit condo project on the site, which has 170,000 buildable square feet as of right.

3033 Godwin Terrace (The Bronx)

42-unit apt. bldg

n/a / Ed Graf, Houlihan-Parnes Realtors

n/a / n/a

A $1.5 million first-mortgage refinancing was arranged for the building. The fixed-rate loan was placed for a seven-year term with a 30-year amortization schedule.

44 White St

5-unit apt. bldg

Rue Blanc Corp. / n/a

NCB / n/a

A $1 million first mortgage was arranged for the building.

Other Deals Westbrook Partners buys CPS Ritz-Carlton stake for $105 million Westbrook Partners purchased a stake in the Ritz-Carlton hotel at 50 Central Park South, the International Business Times first reported. Seller Millennium Partners recouped $105 million for the 256-room hotel it first purchased for $88.8 million in 2006 from Macklowe Properties. Millennium still owns the Ritz-Carlton in Battery Park City. The hotel was redeveloped from the St. Moritz, and the top 12 floors of the 33-story structure were converted into condominiums known as the Residences at the Ritz-Carlton, which are separately owned. (The deal was announced after the deadline for the Deal Sheet.)

Avalon hotel trades for $48.3 million The 100-room Avalon hotel near Herald Square sold for $48.3 million, according to records filed with the city last month. The price for the 12-story, 71,250-square-foot building, at 16 East 32nd Street, comes out to about $483,000 per key, or $678 per square foot. The buyer is a corporation called 16 East 32 that shares an address with Armani Exchange’s U.S. headquarters. The company’s press department did not immediately respond to a request for comment. (The deal was announced after the deadline for the Deal Sheet.)

Sovereign pays $22M for Chelsea parking lot The Midtown-based development firm Sovereign Partners led by Darius and Cyrus Sakhai paid $21.5 million for a Chelsea parking lot at 140 West 28th Street, where developer Benjamin Shaoul struggled and ultimately failed to raise a mixed-use building. Sovereign signed a contract

with property owner 140 West 28th Street Associates in November 2011, and closed on the purchase in February, city property records published last month show. (The deal was announced after the deadline for the Deal Sheet.)

First SL Green, Stonehenge UES portfolio purchase hits public records for $109M The first closed sale related to SL Green Realty, Stonehenge Partners and investor Jeff Sutton’s recent purchase of the David Frankel Realty property portfolio has hit public records. The sale of the 290,480-squarefoot residential rental tower at 1026 First Avenue was recorded for $109 million last month; it makes up over a quarter of the total $416 million spent on the portfolio, which also includes properties at 724 Fifth Avenue, 752 Madison Avenue, 19 East 65th Street, 21 East 65th Street, 762 Madison Avenue, 44 West 55th Street and 400 East 58th Street. (The deal was announced after the deadline for the Deal Sheet.)

Another Jehovah’s Witnesses building sells A second building in the Jehovah’s Witnesses-owned Brooklyn Heights collection sold, for more than $3 million less than the original asking price, Curbed reported. The property, at 165 Columbia Heights Street, between Clark and Pierrepont streets, was asking $7.2 million in 2008, but sold for a mere $4.1 million, according to city records, Curbed said. The Jehovah’s Witnesses are selling off five Brooklyn Heights properties, which have a combined asking price of $18.8 million, in preparation for a move to Warwick, N.Y. (The deal was announced after the deadline for the Deal Sheet.)

Waterbridge Capital bets on Barclays Arena Real estate investment firm Waterbridge Capital last month completed its purchase of a 105-year-old Brooklyn industrial facility at 700 Atlantic Avenue for $7 million, the Wall Street Journal reported, close to the site of the new Barclays Center sports arena. The company may be planning to transform the building into a retail center, sources told the Journal, in an effort to capitalize on the rapid evolution of the area leading up to the opening of the arena. “Up until a year ago, people didn’t know if they could finish” the arena, said Ofer Cohen, president of TerraCRG, who was not familiar with the Waterbridge transaction. “It’s going to unfold in the next couple of years … and people want to take advantage of it.” (The deal was announced after the deadline for the Deal Sheet.)

Moinian, Starwood Capital pay $6M for air rights at Theater District hotel site, source says Developer Joseph Moinian and partner Starwood Capital Group paid $6.125 million to the Shubert Organization for 25,000 square feet of air rights that will be used for the development of a hotel at 237 West 54th Street, a source familiar with the deal said. The additional air rights are needed to increase the size of the project, located between Broadway and Eighth Avenue, to 34 stories, from the 27 approved stories the city’s Department of Buildings has issued permits for. On Feb. 9, Moinian and Starwood closed on the purchase of air rights for about $245 per square foot from the Shubert’s Booth Theater at 222 West 45th Street, the insider said. (The deal was announced after the deadline for the Deal Sheet.) TRD

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Lutnick

from page 55

While there are obviously naysayers, some look at this as the perfect time to create a derivatives market given the extreme uncertainty about whether office rents will spike in the coming years. Another wildcard that may generate interest in derivatives is the proposed changes to regulations set by the Financial Accounting Standards Board, a non-government business board that sets financial standards for the industry and may be changing its policy on leases. Under a proposal being reviewed now, lease obligations for tenants would be classified as liabilities. If that new standard is adopted, it could be a boon for the derivatives market, some say. According to White and others, that’s because large companies might want to shorten lease periods from, for example, 20 years, to 10 years or even five years, but then employ derivatives to hedge against rental price changes. To prepare for the expected interest, firms are getting back in the game and retooling operations, both on the data and trading sides. On the trading side, BGC has competition, too. Other firms, including the Wall Street firm Vyapar Capital Market Partners, are looking to trade derivatives. The firms hope to execute trades on behalf of clients such as Goldman Sachs, Merrill Lynch or a hedge fund on one side of the deal, and the tenant or landlord on the other. In the past, the problem with creating a successful model here was both the complex nature of most lease deals and the inability of the Wall Street firms to create interest and liquidity among their investors in making bets on U.S. property derivatives. In addition, potential investors viewed ask-

ing rents and property values as too vague a criterion. But on the leasing side, the net effective rents — which measure the actual rent paid when free rent and landlord contributions are factored in — is too hard to obtain. (Such data, while quietly shared among the city’s biggest commercial ﬁrms, is not public.) Also, those betting on the market want to make sure the indices they are trading against are closely aligned with reality. For example, a bet on Midtown South Class A rents would apply to both the rehabilitated 200 Fifth Avenue and the super-modern 51 Astor Place, now under construction, but an index might not be able to account for that. Frischer said the asking rent index he created is solid and said that — despite the fact that traders did not use it — it has accurately tracked the market with data going back to 1996.

Custom design So what will Lutnick’s derivative market look like without an index? It will be a custom-structured deal that is “just the kind of derivative that’s individual, [that’s] one-to-one and that is going to make the Newmark guys better at talking to clients and doing business.” In other words, very tailored contracts between parties. Critics said that approach was less valuable to the market, because it would be harder to re-sell such a contract in the secondary market. Some said the success of this next batch of derivative markets may depend on whether big pension funds, institutional investors or even hedge funds would want to invest

in such products. “I think the only people who will find any interest will be the huge institutions that have the math of scale,” said David Eyzenberg, a principal with the New York office of commercial firm Avison Young. But he added smaller entities could play in the market. “I could see a hedge fund as the counterparty.” A big question is whether pension funds would be interested, or even allowed by their investing rules to buy real estate derivatives. But some don’t see big, publicly traded companies like SL Green Realty or Vornado Realty Trust making any bets. As one real estate professional, speaking on the condition of anonymity, said, “Can you imagine what would happen to their share price if SL Green or Vornado took a short position on Manhattan office rents?” Frischer, who is also an executive managing director at Newmark (he spoke to The Real Deal for this story only on behalf of Rexx, not Newmark), said this time around firms and investors will want to use hedging tools such as derivatives, in part because of a recognition over the past few years that uncertainty and volatility are now looked at as permanent characteristics of commercial real estate, which investors had traditionally thought of as a stable asset. “When the sky was falling there was nothing you could do,” Frischer said. “Now that the market has come into some sort of equilibrium, there is confidence out there to manage that volatility. [If ] you bring a product to market that they can hedge with, people now will be inclined to use that product.” TRD

Bookshelf from page 64 School of the University of Pennsylvania, and James Barth and Glenn Yago, who are fellows at the Milken Institute, an economics think tank. “Real estate as an asset class is associated with financial crises,” they write. The book sketches a history of financial products over the centuries, leading up to the Lehman Brothers crisis. It also assesses housing finance in emerging economies such as Brazil, India, and China, pointing out, for example, that slums are the currently the world’s fastest-growing housing stock. Finally, it suggests innovations to facilitate a more stable and sustainable financing system for housing. Among the authors’ recommendations: fewer zoning ordinances, government-supported credit enhancement for housing consumers, shared-equity ownership, and lease-to-purchase mortgages.

HOTELS Built to Last: 100+ Year-Old Hotels in New York Stanley Turkel AUTHORHOUSE PUBLISHING; OCTOBER 17, 2011 In “Built to Last,” Stanley Turkel — a lecturer at NYU’s Tisch Center for Hospitality, Tourism and Sports Management — recounts the history of 32 centenarian hotels in New York City. These structures, many of which have since been converted to co-ops or condos, have “deﬁed the passage of time for a variety of reasons, many explicable, some beyond explanation,” he writes. The six “classics,” in Turkel’s mind, are the Aberdeen Hotel, the Hotel Albert, the Algonquin Hotel, the Hotel Belleclaire, the Ansonia Hotel and the Hotel Bossert. The Bossert, in Brooklyn Heights, in particular

seems to exemplify the economic extremes of New York’s last century. Built in 1909, it earned the moniker “the Waldorf-Astoria of Brooklyn.” In 1955, the Brooklyn Dodgers’ World Series victory was celebrated in its lobby. But by the 1970s it had fallen into disrepair, and in 1984 it was purchased, with many other buildings in the area, by the Jehovah’s Witnesses. Ownership by the religious group, once thought to be a harbinger of the building’s demise, actually helped it, Turkel argues, since the Witnesses renovated the building and began using it as housing for their staff, and even allowed long-time rent-stabilized tenants to remain. The church, which in the process of moving its operations upstate, was reportedly close to selling the building in 2008 for $100 million, but it is not currently on the market, according to the Costar Group.

rooms and suites, and newly minted public spaces, such as the Oak Room and Oak Bar. Morehouse calls the Plaza’s current state “more resplendent now than ever before.” In one chapter, he sits down with developer Miki Naftali, the former CEO of the El-Ad Group, which purchased the Plaza for $675 million in 2004. Naftali, whom Morehouse describes as an “enthusiastic human steamroller,” described the Plaza’s unmatchable cachet. “You can sit in Paris with your friends,” he said, “and you can deﬁnitely say, ‘Oh, I own a bit of the Plaza.’”

Inside the Plaza: An Intimate Portrait of the Ultimate Hotel Revised and Updated

Gross is well-known in New York real estate circles as the author of “740 Park: The Story of the World’s Richest Apartment Building,” which details the history of the überexclusive co-op where Jacqueline Kennedy Onassis was raised. In his last book, “Unreal Estate,” Gross ventured to Los Angeles, chronicling buying and selling in the so-called Platinum Triangle (Brentwood, Bel Air and Holmby Hills.) Now, he returns to New York to look at another city apartment building that has shattered sales records: 15 Central Park West. “The rise of 15 CPW fascinated me,” Gross told The Real Deal, he said, but noted that the brand-new, amenity-laden condominium is very different from 740 Park, a classic pre-war co-op with an impenetrable board. Fifteen Central Park West “may be the same genus,” as 740 Park, he added, “but it’s clearly a different species.” TRD

Ward Morehouse III APPLAUSE BOOKS; MARCH 1, 2012 (REVISED EDITION) Since it opened its doors in 1907, the Plaza Hotel has been one of New York’s most glamorous destinations. Among its guests: F. Scott Fitzgerald, Frank Lloyd Wright, the Beatles, and journalist Ward Morehouse III, who lived at the Plaza as a young boy. In this book, ﬁrst published in 2001, Morehouse details the hotel’s history, from architectural tidbits to accounts of Truman Capote’s masked balls. In this new edition, he describes the hotel’s recent $450 million transformation, with its 181 luxury condo residences, 282 guest

Become a fan of The Real Deal on 96 January 2012 www.TheRealDeal.com

UPCOMING

BOOKS

House of Outrageous Fortune Michael Gross THE FREE PRESS, SIMON & SCHUSTER; 2013

Facebook www.facebook.com TheRealDealMagazine /

www.TheRealDeal.com March 2012 93

Waterfront

from page 31

QUEENS

Hunter’s Point South (Phase 1) Developer: Related Companies, Phipps Houses and Monadnock Construction

he $360 million ﬁrst phase of this mega-project, which sits on the waterfront in Long Island City, includes 925 units of affordable rental housing units and 20,000 square feet of retail space. (The ﬁnal project will take years to build out and developer proposals have not yet been solicited by the city.) The development will ultimately include 5,000 units of housing — 60 percent for affordable to moderate- and middle-income families — and is said to be the largest affordable project since Starrett City in the 1970s. The city bought the land, which Mayor Bloomberg once envisioned as the future site of New York’s Olympic Village, in 2009 for $100 million from the Empire State Develop-

ment Corporation and the Port Authority. The developers were selected in February 2011 from seven bidders who responded to an RFP, in what city officials described as a highly competitive process — one with an enormous payoff. Financing for the deal also involves tax-exempt bonds from the city Housing Development Corporation and federal low-income housing tax credits — though the exact amounts are still being negotiated. City officials expect to close on the project’s financing this summer, with construction to start soon after. The construction of the first phase is expected to take two years.

S TAT E N I S L A N D

Staten Island Home Port Developer: Ironstate Development Company

he redevelopment of this 35-acre former home port for U.S. Navy ships on Staten Island has been in discussion for years. At one point, it was even being considered as the site for a movie studio spearheaded by actor Danny Aiello and a group of investors. But in 2009, the city chose the Hoboken, N.J.-based developer Ironstate to develop 885 units of rental housing and 30,000 square feet of retail space. Ironstate, which is spending $150 million on construction, bought the site from the city in November for $11 million, and Greg Russo, the company’s principal, said he expects to break ground in late summer. Demolition of the existing structures there has already begun. Construction will proceed in two consecutive 18-month phases, Russo said. The 500 housing units in the ﬁrst phase and 385 in the second will range from studios to one-bedrooms, with projected rents between $1,100 and $2,000 per month. The city is spending an additional $33 million on road improvements and a new waterfront esplanade. TRD

Saunders from page 35 with the owner-operators [rather than corporate owners], it’s a better situation for everyone,” she said. Saunders has poached some top brokers, including Saatchi and Jay Flagg, who was reportedly ousted as Elliman’s Southampton manager over an ad he ran that didn’t conform to company guidelines. Last month, Corcoran’s Krae Van Sickle, who once reportedly helped Dick Cavett sell a massive 77-acre tract of oceanfront land, joined the firm. Other Corcoran recruits include Terry Cohen — who came on board in October 2008 and is marketing a 2.5-acre plot of land, priced at nearly $25 million, where an eight-bedroom house is under construction — and veteran broker Laura White. Saunders said he offers between 50 percent and 70 percent commission splits, and of the 100 or so agents he has seriously attempted to recruit, only about 20 have declined to join the firm. About half a dozen of his brokers are former Sotheby’s colleagues, he said. The firm’s model is not cheap, Saunders said, and the brokerage sticks to recruiting experienced agents with their own contacts and listings. “It’s not a training ground,” Saunders said.

Profiting off Shangri-La On a sparkling afternoon last month, Saunders pointed out celebrity homes on a drive through pricey Sagaponack. In addition to Billy Joel, the celebrities noted included more than one Goldman Sachs executive, New York City real estate developer William Rudin and Loews Corp. co-chairman Jonathan Tisch.

But Saunders never planned to be a real estate broker. A native of Englewood Cliffs, New Jersey, Saunders studied finance at Georgetown University in Washington, D.C. He also minored in Kabbalah, a mystical branch of Judaism, which he said taught him not to take himself too seriously. After graduating in 1985, Saunders planned to return for law school, but a last-minute job offer from Goldman Sachs rerouted him to Manhattan. He didn’t enjoy the workaholic pressures of the finance world, and eventually he also tired of New York City’s “dirt and noise.” So in 2000, he and his wife, Colleen, who now works in the firm’s marketing department, moved to the Hamptons full-time. “You come out here,” Saunders said, “and this is the Shangri-La.” But Saunders also had a financial motive. He had discovered a way to profit from Shangri-La, after a one-off land purchase in the mid-1990s inadvertently turned him into a minor residential real estate developer. Saunders bought his first Hamptons property in 1996, a $400,000 piece of land in Water Mill on which he later built a house, selling the package for $3.5 million in 1999, he said. Several similar deals followed, culminating in the $19 million sale in July 2008 of a home he built on a $4.25 million plot of land in Sagaponack. Earlier, he had also obtained his broker’s license, initially to get better access to listings. In 2001, with some free time on his hands, he approached his Sotheby’s broker, who had helped him buy and sell his proper-

ties, about joining the firm. With his focus on selling to investors like himself, Saunders was able to land at No. 43 on the Wall Street Journal’s nationwide ranking of sales agents in 2007. These days, Saunders rarely brokers deals himself, although his developer’s impulse appears to be alive and well. Recently, he and his family — he has two sons, 11 and 8, and a daughter, 6 — were supposed to move out of their Bridgehampton rental and into a house he built for them in Sagaponack. “And then of course the sickness of constantly selling everything took over, we sold [the Sagaponack house], and the kids were really upset,” Saunders said.

washer-dryers. The Ascend Group’s newly constructed Georgica condominium on the Upper East Side, for example, has laundry/utility rooms with side-by-side Bosch washer-dryers.

Kaplan, a senior partner at architectural ﬁrm FXFOWLE. “And in the winter, glass isn’t as good an insulator as solid materials, so you have to use more heat.” As a result, New York City is seeing fewer new developments with wall-to-wall windows, and more opaque and glazed areas, according to Kaplan. “It’s nice to have places within the apartment with floor-to-ceiling windows,” he said. “But too much is like a whole meal of foie gras.” Developers are paying a lot of attention to windows in general these days, said El-Ad’s Elliott. “We make sure we have sophisticated, soundproof windows,” he said. “At 250 West, we have triple-panes on the windows facing the West Side Highway.” TRD

New players To Saunders and other local brokers, this February has been markedly more promising than the previous one, with a steady pace of high-end deals and a rental market that is already taking off. Perhaps it’s not surprising then that new players are once again sniffing around the East End. Last April, Nest Seekers International acquired the Bridgehampton and East Hampton offices of the German brokerage Engel & Völkers. In October, Halstead reentered the Hamptons market when it merged with the East Hampton brokerage Devlin McNiff. Will these new players affect Saunders’ business? At the very least, it might be harder to get a table at Pierre’s. TRD

Amenities from page 38 ditional, vented washer-dryers. “They always request them,” said David Maundrell, president of the brokerage aptsandlofts.com. Traditional dryers require a vent and vertical ducts that take up ﬂoor space in an apartment. Ventilation ducts also must be carried up through the building to the roof, which means they’re costlier for developers and buyers. Still, an increasing number of high-end developers are now putting vented washer-dryers in their new condos, Ruddy said. And with larger apartments increasingly common as families choose to stay in the city rather than move to the suburbs, Ruddy said she now frequently sees separate laundry rooms within apartments, with side-by-side 94 March 2012 www.TheRealDeal.com

Windows Floor-to-ceiling windows were a well-known signature of boom-time condos. But the buyers of these apartments quickly realized that there are downsides to this chic, glassy look: Floor-to-ceiling windows mean apartments get hotter in the summer, and colder in the winter. “Even if it’s a super-high-performance glass, when you have sunlight on your skin, it feels hotter, which means you have to run the A/C higher in the summer,” said Dan

DOB

from page 18

vacancies and a more extensive training program.” The DOB now has 1,061 personnel, according to the MMR, compared to 1,094 in fiscal year 2011 and 1,174 in 2010. In addition, sources noted, the reduced number of certificates issued could be a result of fewer projects requiring them since the bursting of the real estate bubble. DOB spokesperson Tony Sclafani declined to comment specifically on how many projects have applied for TCOs, but issued the following statement: “Temporary Certificates of Occupancy are issued after an applicant satisfies all of the necessary safety requirements for a construction project, and those requirements depend on the complexity and scope of that project. In order to speed up the overall approval process, we are now accepting digital plans at the NYC Development Hub so permits can be issued faster than ever before.” But multiple industry sources said the decreased number of building permits being issued is, at least in part, a result of slower DOB response time. In the wake of the crane collapse and Scarano scandal, the agency takes longer to review applications and permits, especially in the outer boroughs, expeditors and developers said. Hudson Companies’ new Third + Bond condominium in Carroll Gardens, for example, waited for several months after construction was completed to get its TCO, according to Sally Gilliland, Hudson’s director of architecture. One reason for the delay is that “we ended up having to go through a process that was new,” Gilliland said. In the past, she said, TCO paperwork could be submitted directly to the DOB’s “Certificate of Occupancy Room,” but this time, the deputy borough commissioner was required to personally review the documents before they could be submitted. “We had to sit down and meet with him,” Gilliland said of the deputy commissioner, John Gallagher, who is now acting borough commissioner. “His time was limited, so it was difficult to get access to him in a manner that was timely for us.” Irene Berzak, an expeditor who works regularly with the DOB to streamline the application process for developers and property owners, explained that in Manhattan, TCOs can be renewed directly with the “Certificate of Occupancy Room.” In Brooklyn and Queens, however, TCOs must first be approved by the borough commissioner. “It’s very time consuming,” she said. Hudson had anticipated that Third + Bond would be ready for move-ins in 2010, but it didn’t receive its TCO until early 2011. That inconvenienced the buyers, who had planned to move in months before. “A lot of them had to find temporary housing,” Gilliland said. Berzak said she’s having similar problems at one of her projects, a newly built assisted-living facility at 137-47 45th

Avenue in Queens, where the TCO recently expired. Getting it renewed, which the law requires since the building is now occupied, has taken longer than expected, she said. “We’re having horrific problems in Queens,” Berzak said. Because her team has to run back and forth from the borough manager to borough commissioner for necessary permissions and approvals, a staffer has spent several days camped out at the DOB. “We’ve had someone sitting in the office for five days straight,” she said. Sclafani denied that there were any DOB delays at Third + Bond or 137-47 45th Avenue, but declined to go into more detail. “There were no delays on the department’s behalf,” he said. Meanwhile, it takes the DOB an average of 24 days to respond to email correspondence, compared to eight citywide, according to the MMR. Louis Greco, head of development company SDS Procida, which built On Prospect Park and Be@Schermerhorn in Brooklyn, said delays “have been a burden on any number of projects around the city,” he said. They are especially problematic in the current market, he added, where developers need to be able to green-light buildings for closings as quickly as possible. “Immediate delivery is a top priority in sales today,” he said. “Nobody is pre-purchasing apartments. They’re afraid to get into bed with a deal that has question marks on it. It’s a lot easier to say, ‘We have the TCO and move-ins have begun.’” The delays can also hurt the market, brokers said, because if closings get pushed back, neighborhoods appear to have less sales activity. “It makes the value of certain neighborhoods seem less than they actually are,” Reiders said. Greco said he doesn’t have any direct experience with TCO delays, but construction permit delays have been a problem at a single-family house he’s developing in Brooklyn Heights. The site, which was acquired 18 months ago, is still vacant, he said. “I have someone on staff that works with the expeditors, but it’s still problematic,” Greco said. While the house is “not a simple project,” he said, “we’ve been in the approval process for 14 months. It should take six months.” He added that it’s often difficult for developers to know exactly what the DOB wants from them in order to hurry the process along. In his view, the agency should aim to “clearly define what it is they want, and set out systems that can expedite that.” One expeditor, Scott Schnall, told The Real Deal that there has been an “onslaught” of new paperwork and procedural changes in recent years at DOB, which he attributed to hyper-vigilance prompted by the recent scandals. In 2011, the

DOB barred Scarano from filing documents to the agency, after a judge found that the architect knowingly made false and misleading statements to the city on documents relating to several Williamsburg projects, in order to get illegal or oversized buildings approved. Since then, the department has cracked down: since 2008, a total of 26 licensed professionals have lost their filing privileges with the department, LiMandri said in October. “Since Scarano lost his [right to file plans,] they’ve tightened up,” Schnall said. “They’re making us pay for what he did.” At one project Schnall recently worked on, a daycare center at 3212 Church Avenue in East Flatbush, Brooklyn, the owner waited for eight months to obtain a TCO. The delay, he said, stemmed from an error the DOB allegedly made in a filing when it stated that one of the floors in the building was safe to be occupied by up to “3.0 children” — it meant to write 30 children. Sclafani also denied that there were any DOB delays at that project.

In Midtown South, the average asking rent declined by a penny to $43.12 per square foot in February, while the availability rate fell by 0.3 points to 8.8 percent, Cassidy Turley ﬁgures showed.

from making large commitments. But he anticipated they would re-engage now. “Some of the strategic planning, and some things that we might have seen in October and November, those are things that we’ve now been seeing in January and February and have scheduled into March.” Brookﬁeld Ofﬁce, which owns the World Financial Center, has about 3.1 million square feet available for lease in space that has leases expiring in 2013. “We are in discussions with [potential tenants for] about half of the space that we have here,” Clark said. Asking rents Downtown rose by four cents to $38.29 per square foot in February, and at the same time the availability rate rose by 0.3 points to 10.4 percent, according to Cassidy Turley stats. TRD

Safer but slower Certainly, the DOB has made moves to try to reduce delays. The new digital plan review system is designed to accelerate the approval process for construction projects, by allowing architects and engineers to submit plans and resolve issues online. And industry pros acknowledged that delays aren’t always the DOB’s fault; developers and their staff sometimes fail to comply with requirements in a timely fashion. “I truly think that people are too fast to say, ‘It’s taking the DOB forever,’” said Frank Fortino, president of expediting and consultancy firm the Metropolis Group. “If you really isolate and inspect the issues closely, there have been delays on everyone’s part.” And, he noted that the increased DOB vigilance is likely making the city safer for the public. “A few years ago, everything was moving so fast and no one was really checking what was going on,” he said. Attorney Barry LePatner, founder of construction law firm LePatner & Associates, agreed. “With the downturn and the end of the building boom in New York City, the DOB is certainly paying greater scrutiny than previously to applications,” he said. He added: “It’s hard to say that greater review won’t benefit the public. The clients we represent would like the process to happen faster, but doing it right and doing it quickly are different. Maybe there’s a middle ground somewhere in the future.” TRD

Commercial market from page 24 ter than Midtown or Downtown with a tighter leasing market recently, and last month was no different. While the other markets saw increases in their availability rate, Midtown South’s overall availability rate fell again — which was welcome news for landlords. As a sign of the tight market, Thomas Campenni, president of the firm bearing his name, represented the office building 95 University Place in a 20,000-square-feet lease for ninth-floor space formerly occupied by St. Vincent’s Medical Center. The floor was leased late last month to a technology firm, for just below an asking rent of $42.50, he said. “I rented that in six days. We had multiple offers. It all depends on where you are and what is going on. I would not say things have gotten any worse or that there is even a pause,” he said.

Downtown The top office landlord Downtown expects activity to pick up over the year. Ric Clark, CEO of Brookfield Office Properties, said during the company’s fourth-quarter earnings call last month that “I don’t think the market is quite as slow as the press has been reporting, at least not from the level of our discussions.” Mitch Rudin, the president and CEO of U.S. Commercial Operations for Brookfield, said that last year major tenants with leases expiring a few years down the line stepped back

www.TheRealDeal.com March 2012 95

Residential market

from page 16

their original property investment. “This, coupled with the pent-up desire for a new apartment, could produce a really lively spring selling season,” he said. Additionally, some brokers said that banks are beginning to loosen their purse strings, which could help boost activity in the spring.

“Financing is more readily available and people will be looking to take advantage of that,” Platinum’s Hedaya said. As a result, deals without mortgage contingencies have begun to appear again, and are even “once again ﬁnding a place of prominence,” said Tom Postilio, a managing director at Core.

As far as Azarian is concerned, she plans to follow up a busy February with a busy March. “I am growing my agent roster again in preparation for the coming months of spring [and] summer renting madness,” she said. “I have every intention of taking full advantage of the market.” TRD

who’s searched for a Manhattan location for a major theater chain without success for several years. While rents vary based on location, Abrams said, theaters look to pay $20 to $30 per square foot for lower-level spaces. While Abrams noted that cinemas might go up to $40 or even $50 a foot if projected revenues are high enough to support that rent, movie theaters are facing new competitors for their historically desired spaces. In the past, a movie theater was considered a valuable tenant for a lowerlevel space, as well as an anchor that could bring traffic to restaurants in a retail complex. But over the last five to 10 years, big-box and fashion tenants have inked deals for large multi-level spaces. These users, Abrams noted, can pay higher rents than theaters, and don’t require 50-foot ceilings or column-free space. In the past “there weren’t a lot of takers” for multi-level spaces, said Abrams. “They now can do two floors of retail where they would have done one floor of theaters, based on ceiling heights.” Abrams said that, for her current theater client, she looked at spaces on 86th Street, and at 57th and Second Avenue, where Whole Foods opened. Her client, she found, could not compete with other players. The requirements for a cinema location are so specific, and suitable space so scarce, Abrams said she has even looked at offbeat ideas such as enclosing a rooftop in a bub-

ble to add a theater. But with such complex build-outs, “a landlord really has to be motivated to do a theater,” she said. Luckily, these ironclad requirements are loosening a bit as technology changes from projected film to digital, allowing for smaller spaces with lower ceilings, brokers said. Another option, of course, is that movie theaters can build their own facilities. Harvey Elgart, who runs Brooklyn’s Cobble Hill Cinemas, which is housed in a 100-year-old building, is teaming up with developer Blue Zees to create Williamsburg Cinemas. A three-story, seven-screen theater with some 1,000 stadium seats, the facility cost $10 million for land and construction, and is set to open in June. Elgart said he feels he can make money because there is very little competition in the neighborhood. “There hasn’t been a true movie theater in Williamsburg in about 10 years,” he said. Nitehawk owner Matthew Viragh declined to provide detailed numbers, but said his theater’s food offerings — including a street-level cafe with cocktails and gourmet concessions, as well as table-side food and beverage service during each film — helps bring in more money per person than a typical theater would. In fact, he said, business is so strong that he’d like to expand throughout the five boroughs. “Hopefully we can do a few more around the city,” he said. “It really is the future of how people want to experience movies.” TRD

“Whenever you have a windfall, it’s a great opportunity to give to charity, as long as you don’t need all the money,” Weltman said. The buyer in such an arrangement is not entitled to any tax deduction, she said. But for Weill, a greater concern may have been public relations. Named by Time as one of the 25 people to blame for the crash of 2008, he has kept a low profile in recent years. When he put the penthouse on the market, he told the Journal that he and his wife were “down-sizing,” and that it is “a pretty good time” for wealthy Americans “to be quiet.” Representatives from Brown Harris Stevens, which handled the sale for Weill, declined to comment. Firms like Rubicon and Good say they do not view charitable donations as something they do on the side or as a way to get publicity, but rather as part of their business models and corporate identity. Donating to charity “has always been part of our structure,” said Josh Gurwitz of Good. Good started in the Miami area three years ago and recently expanded to New York City. Anytime the firm does a commercial deal with a nonprofit, or a residential deal with an employee of a nonprofit, it donates 10 percent of its fee (post tax, after the transaction has closed) back to that organization. It also makes its own donations to charities, and plans to hold several benefit events in the coming

year, Gurwitz said. But there are some risks to publicly supporting a specific charity. Endorsing groups with certain political or religious affiliations could deter potential clients. “What if you pick the wrong one? You don’t want to offend anyone,” Purcell said. Still, these new brokerages have found that incorporating philanthropy into their business models isn’t as easy as it appears. Donating percentages of individual sales or rentals can add yet another layer of legwork to already difficult transactions, so many send lump sums on a recurring basis instead. Miron Properties, for example, sends payments at the end of each year to charities such as Kiva, which gives micro-loans to entrepreneurs in developing countries. “We were looking at giving a percentage of every transaction,” but decided against it, said Jeffrey Schleider, Miron’s managing director. “It adds a lot of moving parts. We have brokers that are renting 10 to 15 apartments a month, so that adds a lot of paperwork.” Teplitzky concurred. Giving a lump sum at the end of the year or every few months is a “cleaner” transaction for a firm, she said. From Berger’s perspective, unloading her property and giving to charity at the same time was a win-win. “I wound up finding out about a new charity,” she said. “I think it’s a great thing.” TRD

Movie theaters from page 32 most portion of Extell’s Riverside South development, which is slated to include entertainment, shopping and a landscaped plaza. Extell has obtained approval for a theater, but a company spokesperson could not confirm whether a theater will be part of final plans for the site, at 59th Street and West End Avenue. Some local theaters are trying to hang on in the current tough marketplace by renovating. Ben Kasash, the president of Pavilion Theater on Prospect Park West in Brooklyn, has spent $1.8 million upgrading concession stands and seats since April 2011, when he took over. The Pavilion, which opened in 1928, is a neighborhood staple that’s been in desperate need of a face-lift. Kasash is a veteran movie house operator, with other theaters in New Jersey, Connecticut and Rhode Island. The theater, though, still draws a steady stream of gripes in online reviews. Kasash said he’s addressed problems, including a torn screen, and will pour another $1 million into additional improvements. Whether the owner is renovating or building from scratch, the movie theater business requires tremendous capital. Firestein said stadium seats — which customers have come to expect — can jack up the price of a build-out by 50 percent. Theaters typically like 40-to-50-foot ceiling heights and 50,000 square feet or more of space, said Robin Abrams, executive vice president at the real estate firm Lansco Corp.,

Charity from page 50 market in November, he invited a Wall Street Journal reporter to his office to emphasize that “the proceeds of what we get will go to what we can give away to try to help make the world a better place,” the Journal reported. He didn’t specify which of his philanthropic endeavors would benefit from the sale of his penthouse, but noted that he and his wife actively support Carnegie Hall, Alvin Ailey American Dance Theater, the Weill Cornell Medical College and the National Academy Foundation. When it comes to marketing property, involvement in such causes “allows you to be in front of more people,” said real estate consultant and Rutenberg Realty cofounder Paul Purcell. He added: “Would it raise prices? Absolutely not. I wouldn’t buy something just because there’s a charity involved. Would I look at it favorably? Yes. But it’s not a deciding factor.” From a seller’s perspective, meanwhile, there are tax incentives to donating the proceeds of a real estate sale to charity, especially for the wealthiest of homeowners, said Barbara Weltman, a Westchester-based tax attorney and author of the book “J.K. Lasser’s Small Business Taxes.” Property sales are usually taxed at the capital gains rate, but any donation that is made from the sale proceeds is deducted from the seller’s taxes at the end of the year. So for someone like Weill, who is in the highest tax bracket, the proceeds would yield a significant write-off.

More real estate news at www.TheRealDeal.com 96 March 2012 www.TheRealDeal.com

Harney

from page 36

ances and equipment, plus independent third-party inspections. Webb said in an interview that the calculator has been “amazingly effective” in opening the eyes of home shoppers to the “dark side” of foreclosures, and has helped the company rack up rising sales in a market where 46 percent of local listings are foreclosures. Jay McKenzie, vice president of BDX, an online information site for the industry, said his firm recently had conducted a survey of builders in different parts of the country, and found that head-to-head comparison efforts — newly built versus foreclosures — are a strong new marketing trend. Among the key arguments builders are using in their campaigns: •New homes are far more energy-efficient and “green,” with highly rated windows, roofs, insulation and appliances. They also come with the wiring and spaces needed for most consumers’ high-tech information and entertainment preferences. The vast majority of foreclosures offer little or none of this. •Newly constructed homes allow the buyer to “choose what you want” in floor plans, equipment, landscaping and amenities, “rather than inheriting someone else’s choices.” Foreclosures never do. •Closing-cost and upgrade incentives. Most builders are willing to help with settlement costs, unlike banks unloading foreclosures. So what to make of marketing pitches like these? To begin with, buyers considering foreclosures should take the time to check out the potential downside risks. The builders have a point: The costs of their houses are all built into the price. Buyers often have no idea what their final expenses will be with a foreclosure because they buy them “as is,” typically with no professional inspection, and they can’t be totally sure where that might take them. On the other hand, don’t ignore the potential upsides of foreclosures — the pricing and locational advantages can be huge for smart shoppers. Do your own comparisons, and you’re more likely to end up making an intelligent choice. Kenneth Harney is a syndicated real estate columnist.

Agency

from page 67

comment. Two ﬁrms disputed the ﬁgures: JLL said it represented 52 buildings with 30 million square feet; and Colliers did not respond to requests for comment about fourth-quarter data. (Colliers said it had 85 buildings with 12.3 million square feet in the third quarter.) Meanwhile, Newmark represented 50.3 million square feet in 190 buildings, while Cushman represented 43 million square feet of existing buildings in 94 properties, including Manhattan West, according to The Real Deal analysis. Cassidy Turley had 42 properties and 9.3 million square feet in the fourth quarter in 2011.

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Beauty contest To select an agent, landlords often conduct a request for proposals, commonly referred to as a “dog-and-pony show” or “beauty contest” in the industry. These are high-pressure meetings where the firms come in to pitch themselves for the job. The teams pitch landlords, laying out how they plan to position the building. In other instances, landlords make a gut decision based on their own experience or intuition. “We occasionally meet with more than one group, but everyone is busy and we don’t want to waste people’s time. So we try to avoid having too many girls at the dance,” said Nicholas Bienstock, managing partner with office landlord Savanna. Last year his firm selected a Newmark team led by Hal Stein to represent their building at 80 Broad Street. The competition for these agency assignments is fierce and some of the top names in Manhattan leasing are landlord agents, such as CBRE’S Alexander; Tara Stacom, a vice chairman at Cushman & Wakefield; and JLL’S Glickman. Some said the industry, often driven by big personalities, is shifting more to larger teams composed of members hand-picked to land assignments. Savanna spreads the business around its 3.4 million, 11-building Manhattan portfolio, with firms such as Cushman, Newmark, JLL and CBRE representing its properties. “We generally find there are one or two brokerage teams that are the standouts in the submarket. They know the product backwards and forwards and know every deal that has been done. We try to go straight to them,” Bienstock said. TRD C O R R E C T I O N S A N D C L A R I F I C AT I O N S A story in the February issue entitled “New faces for ‘Selling New York’” incorrectly stated that Citi Habitats broker Lucie Holt was paid for appearing on the show “Selling New York.” In fact, she was not paid for her appearance. In February’s “Residential Deals,” Piero Massimino of Vivaldi Real Estate was named as the buyers’ broker in a transaction at 1 Wall Street Court. In fact, it was Guido Pompilj of Vivaldi Real Estate who represented the buyer.

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www.cre-events.com/northernmetro www.TheRealDeal.com March 2012 97

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SELECT LISTINGS

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Lazenby

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from page 27

Christmas tree. If I wanted one, I had to go buy one and put it up.” Meanwhile, a dyslexic Lazenby struggled academically. At boarding school at the all-girls Westover School in Connecticut, she spent much of her time on academic probation. The problems went even deeper, however. Lazenby has a close bond with her mother, who is now remarried and living in Europe — in fact, she’s in the process of helping her find a New York City pied-à-terre. But the Bond actor was an alcoholic who beat and emotionally abused his wife and daughter, Lazenby told a Los Angeles Superior Court judge in 2008. At the time, her father and his second-wife, onetime tennis star Pamela Shriver, were divorcing and battling for custody of their three young children. Lazenby and her mother agreed to testify on Shriver’s behalf. In court, Lazenby described both physical and verbal attacks from her father, and told the judge that she feared for the safety of her step-siblings, according to news reports from the time. (The actor denied the allegations.) “I thought I was doing the right thing for these children,” Lazenby said of the painful episode. “It wasn’t a revenge thing. I care a lot about my dad, I love him. I think he’s a really incredible, unique person, but he’s also an artist and he has demons and flaws, and maybe he’s not the best person to be taking care of three toddlers.” Lazenby said she never thought her statements would be made public. But detailed accounts of her testimony ended up “going everywhere” in the press, which was not only emotionally traumatic, but stressful from a professional standpoint. It’s difficult to assess how much the coverage has impacted her career, she said. “You never know, because people read things about you online and they don’t tell you that they’ve read it,” she said. “They don’t tell you, ‘I’m not going to look at apartments with you because I read this thing about you.’” Lazenby said she’s had little contact with her father since the court case. But when contacted by The Real Deal, the actor, who now has joint-custody of his children, said through a spokesperson that he “wishes Melanie all the success in the world.” For better or worse, Lazenby said her professional accomplishments stem in part from her struggles growing up. “If my childhood had been super easy,” she said, “I don’t think I would have been as driven to success as I’ve been.” In particular, her academic difficulties made her “terrified of failure,” she said. “I didn’t think I was ever going to be great at anything, because I couldn’t succeed in school.” So when she discovered a knack for real estate, she took it and ran. “She wasn’t some super-scholar,” Lewis said. “She’s so beautiful that everyone kind of looks at her and says, ‘well, find your husband and be done with it.’ ... The expectation of Melanie was not that she was going to be a self-sufficient, independent success. When she started to see it happening, she just said, ‘Oh my God, where can I take this?’” As for a husband, Lazenby said she’s single, and that she’s too busy with work and friends to think much about it, though she allowed that her “type” is embodied by newscaster Brian Williams. “I just haven’t found the right guy,” she said. In the meantime, “I have a lot to be grateful for,” said Lazenby, in her typically upbeat fashion. “I’m in great health, I have really nice friends, I live in a beautiful home, I do well at work.” “You really can’t be defined by your past,” she added. TRD

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Buying, Selling or Referring .. FRANK can assist you with ALL your real estate needs.

Security Consulting & Design KC Security Solutions analyzes your areas of exposure and designs a Security Master Plan that integrates three elements: Architectural (doors, locks, glazing, lighting) Operational (staff, training, procedures) Electronic (CCTV, Alarms and Access Controls Systems) Call us to learn how we can help protect your property: Telephone: (914) 912-4361 security@kcsecuritysolutions.net www.kcsecuritysolutions.net

00 May 2011 www.TheRealDeal.com

www.TheRealDeal.com March 2012 99

MAR C H 1

Crain’s New York Business hosts a panel, “First Look: After Javits,” focusing on whether Gov. Andrew Cuomo’s plan for the Aqueduct Racetrack/ Racino is feasible, how much it would cost, who would pay for it, and how it can succeed amidst declining demand for conventions. Panelists will include Christian Goode, senior vice president at Genting Americas, and Robert Yaro, president of the Regional Plan Association. 8 to 9:30 a.m., the Essex House, 160 Central Park South. Fee: $80. Information and registration: www.crainsnewyork.com.

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The New York chapter of the American Institute of Architects presents “Over-cladding: The Double Skin-Façade Modernization of the Peter Rodino Federal Building.” This seminar will look at the Rodino building in Newark, N.J., as a case study of thermal performance. Members of the project team will give a presentation on the double-skin façade at the building and discuss lessons learned. 6 to 8 p.m., Center for Architecture, 536 LaGuardia Place. Fee: $10 for AIA members, $20 for non-members. Information and registration: cfa.aiany.org.

The Real Estate Board of New York hosts a members’ luncheon and panel entitled, “New York’s Economic Development Leaders.” Moderated by Charles Bagli of the New York Times, the event will feature Kenneth Adams, president of the Empire State Development Corp.; Patrick Foye, executive director of the Port Authority of New York and New Jersey; and Seth Pinsky, president of the New York City Economic Development Corp. 11:45 a.m. to 2 p.m., Hilton Hotel, 1335 Avenue of the Americas. Fee: $90. Members only. Information and registration: www.rebny.com.

The Greenwich Village/Chelsea Chamber of Commerce presents a breakfast with City Council Speaker Christine Quinn. Quinn will discuss her nine-point jobs plan and field questions from audience members. 8:30 to 10 a.m., Elmo, 156 Seventh Avenue. Fee: $35. Information and registration: www.villagechelsea.com.

12-13

The Institute of Real Estate Management presents a seminar, “Human Resource Essentials for Real Estate Managers,” focusing on how to hire, manage and evaluate on-site staff and operate a seamless human resources function. 8 a.m. to 5 p.m., Knickerbocker Plaza, 1751 Second Avenue. Fee: $590 for premier members, $680 for classic members, $735 for non-members. Information and registration: www.iremnyc.org.

The Institute of Real Estate Management hosts its fifth annual Asset Management Symposium. The keynote speaker will be Anthony Malkin of Malkin Holdings. Other speakers include Peter Riguardi, president of the tri-state region for Jones Lang LaSalle; and James Kuhn, president of Newmark Knight Frank. 8 a.m. to 4 p.m., McGraw-Hill Conference Center, 1221 Avenue of the Americas. Fee: $395. Information and registration: www.iremams.com.

100 March 2012 www.TheRealDeal.com

The Association of Real Estate Women hosts a luncheon featuring guest speaker Joseph Moinian of the Moinian Group, who will discuss the state of the market, tourism and development projects, with a focus on Lower Manhattan and the Far West Side. 11:30 a.m. to 2 p.m., Club 101, 101 Park Avenue. Fee: Free for AREW members; $100 for members of Commercial Real Estate Women; $120 for non-members. Information and registration: www.arew.org.

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CoreNet Global NYC hosts its annual dinner, a networking event for commercial real estate professionals. 6:30 to 10:30 p.m., American Museum of Natural History, 200 Central Park West. Fee: $650 for members, $850 for nonmembers. Contact: info@corenetglobalnyc.org or (212) 867-7660.

The Council of New York Cooperatives and CondomIniums presents “Three Challenges to Effective Board Performance: Gender, Generation, Gentrification.” In this session, Attorney Phyllis Weisberg will lead a discussion of how gender differences, generational perspectives and economic issues can be barriers to harmonious board functioning, and present suggestions for overcoming these challenges. 7 p.m., location TBA. Fee: Free for members, $50 for non-members in advance or $60 at the door. Information and registration: www.cnyc.com.

The Building Managers and Owners Association of New York presents a seminar, “Energy Action Day,” on how to generate revenue from green programs. The keynote speaker is Jeffrey Brodsky, president of Related Management, who will discuss overcoming financial hurdles to create environmental benefits for buildings. 8 to 10 a.m., Club 101, 101 Park Avenue. Fee: $220 for members, $290 for nonmembers. Information and registration: www.bomany.org.

12-13

Information Management Network presents its third annual Bank and Financial Institutions Special Asset Executive Conference on Real Estate Workouts. Speakers include William Procida, president of Procida Funding; Richard Pulido, principal at Prudential Mortgage Capital; and Attorney Jeffrey Lenobel, chair of the real estate department at Schulte Roth & Zabel. 7:15 a.m. to 7:15 p.m., Marriott New York Downtown, 85 West Street. Fee: $1,795. Information and registration: www.imn.org.

The Metropolitan Council on Housing presents its 2012 annual assembly. Topics to be discussed include efforts to pass the Tenants’ Bill of Rights Law and reforms to existing rent-regulation laws in 2012. 7 to 8:30 p.m., Goddard-Riverside Community Center, 593 Columbus Avenue. Free, no registration required. Information: www.metcouncil.net.

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