The Real Deal March 2014 by The Real Deal

Brokers double dip to get deals

www.TheRealDeal.com

More rentals ask $100K a month

A look at murdered landlord Stark’s assets

Investment sales brokerages ranked

N ew York R eal E state N ews

124

Book dishes on 15 CPW

Vol. 12 No. 3 March 2014 $3.00

Social media’s new status How social media has gone from bit part to central marketing player in NYC’s brokerage world p38

André Balazs, the (hotel) giant

After his blockbuster sale of the Standard High Line, hotelier expands to other side of pond p34

Town’s top guns go head-to-head

As Heiberger and Sitt battle for control of company, firm’s finances come into focus p46

Real estate’s rising stars

The 35-and-under crowd that’s making waves across the industry in NYC p66

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Upper East Side

Retail Opportunities Lincoln Square/Upper West Side

SIZE Ground: Mezzanine: Lower Level: Total:

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80 Carmine Street

West Village LOCATION Corner of Carmine Street & Varick Street SIZE Ground: Lower Level: Outdoor Patio/ Glass Enclosure: Total:

SUBWAY PROXIMITY within 2 blocks

±3,050 SF ±4,955 SF ±1,000 SF ±9,005 SF

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

For Leasing Information Please Contact:

AJ Levine • alevine@aacrealty.com • 646.214.0245

1991 Broadway

SUBWAY PROXIMITY within 5 blocks

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

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LOCATION On Broadway between 67th & 68th Streets

LOCATION Located on Lexington Avenue between 88th & 89th Streets SUBWAY PROXIMITY within 2 blocks

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Contents M A R C H

REFLECTING PRESENCE

2 0 1 4

Battling for boutique condos

Brokers go double dipping

High hopes in the Hamptons

Agents vie for small-condo projects as inventory continues to tighten.

Fox News commentator Bill O’Reilly recently purchased a home in Montauk.

Residential and commercial brokers cross sectors to pick up more deals. Despite NYC blizzard season, East End market begins to warm up.

At the desk of: Andrew Barrocas The CEO of MNS on keeping his office stocked with beef jerky and booze, hiring former Harlem Globetrotters to help win basketball games — and the 40 projects his brokerage represents. MNS CEO Andrew Barrocas

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

In their words... The funniest and most insightful real estate comments.

André the giant After last month’s blockbuster sale of the Standard High Line, Balazs debuts new London hotel and prepares for expansion. Hotelier André Balazs

Transforming design into reality

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

How social media has gone from bit player to central marketing component for NYC’s residential brokerages in the last few years.

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

Prices rising at end of tunnel

Architect: Snøhetta Photo: Snøhetta

12 March 2014 8 October 2012 www.TheRealDeal.com www.TheRealDeal.com

Second Avenue Subway progress gives bump to Upper East Side property values. A station rendering. The first phase of the Second Avenue Subway is on track to open in 2016.

www.TheRealDeal.com March 2012 00

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Contents continued out of Town 46 Kicked As dispute between Town’s two top

ASTOR TURF

guns rages on, firm’s struggling finances come into sharper focus.

temporary digs 50 Top-dollar High-end rental market sees sixfigure deals and glut of listings with price tags of $100,000-plus.

Greenpoint

Williamsburg East Williamsburg

Andrew Heiberger and Joe Sitt are battling over Town Residential.

Blasio picks gets 52 De industry thumbs-up Carl Weisbrod, Vicki Been among latest appointees.

Bedford-Stuyvesant Bushwick

Crown Heights Prospect Park

Northeast Flatbush

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

A map of Menachem Stark’s properties

In wake of murder, a tally of the developer’s properties — and his rise and fall.

Building sales boost for brokers

Knakal’s new game plan

TRD’s annual investment sales ranking finds some firms struggling and others surging, amid an increase in sellers using brokers overall.

After longtime focus on small deals, commercial broker Bob Knakal goes after higher-priced assignments.

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

Commercial Market Report

Real estate’s rising stars The 35-and-under crowd that’s making waves in the industry.

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

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

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

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

The Deal Sheet A roundup of office and retail leases, building buys and financing. Jason Meister, 31, of Avison Young, has done north of $500 million in sales during his short career.

104

Development Updates

124

Michael Gross’s 15 CPW tome hits shelves

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

106

Residential Deals

New book details A-Rod sexcapades, plus Weill & Buffet lunching.

10 14 March October 2014 2012www.TheRealDeal.com www.TheRealDeal.com

An insiders’ look at how home sales really happen.

120

Calendar of Events

126 Bill Rudin talks about rollerblading Rudin on rollerblades

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

Menachem Stark’s portfolio revealed

through Central Park, poodle puppy love, and his buildings.

Check out this month’s activities.

124

We Heard A lighter look at industry buzz.

www.TheRealDeal.com March 2012 00

RECENT TRANSACTIONS S ince 2005, we have invested $1.6 billion in the origination and acquisition of commercial mortgage loans collateralized by multifamily, retail, office and light industrial properties throughout the United States.

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Distressed Note Portfolio Acquisition Multifamily Properties Brooklyn, NY January 2014

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Loan Origination Townhouse Manhattan, NY January 2014

Loan Origination Residential Development Hamptons, NY February 2014

Loan Origination Development Site Brooklyn, NY January 2014

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Note Acquisition Multifamily Greenwich, CT December 2013

Loan Origination Townhouse Manhattan, NY January 2014

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

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

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

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

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15 Buildings / 681 Residential Units / 1 Commercial Unit Bronx: Aggregate sales of

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10 Buildings / 614 Residential Units / 23 Commercial Units

16 March 2014 www.TheRealDeal.com

Photographers Chris Martin, Marc Scrivo Director of mARKETING OPERATIONS Yoav Barilan ASSOCIATE SALES DIRECTOR Ross Fox Advertising Sales Eran Evron, Abi Laoshe, Nick Mascaro, Robert Stearns, Nicki Chadi, Sigalit Levi DIGITAL TRAFFic MANAGER Junaid Zahid WebmasterS Nima Negahban, Andrew LoCascio Finance director Kenneth Cyrus OFFICE MANAGER Virginia Durso Circulation Paul Destanko Distribution Mitchell Newman, Patricia Hofmann, Forero Express ATTORNEY Barry J. Friedberg Trachtenberg Rodes & Friedberg LLP Accountants William T. McCallum, CPA, P.C., Christine Wang

The Real Deal is a registered trademark of Korangy Publishing Inc. Copyright © 2014. Call 212-2601332 or e-mail news@therealdeal.com. Warning: It is illegal to photocopy or reproduce any part of The Real Deal without express written consent. For reprints and duplication rights, call 212-260-1332. Principal office: 158 West 29th St., New York, NY 10001. The Real Deal is published monthly. Annual subscriptions cost $95. Send check or money order to 158 West 29th St., New York, NY 10001.

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EDITOR’S NOTE

micro-unit 6

Open season on landlords

t appears to be open season on landlords. Since the beginning of the year there have been three high-profile murders (or attempted murders) of building owners in the New York area. The first was Menachem Stark, the Hasidic developer from Williamsburg whose burned corpse was found in a dumpster after he was abducted from his office in January. Police are still trying to figure out who killed the 39-year-old father of seven, but suspect it may have to do with his real estate dealings. In this issue, we look at Stark’s holdings, zeroing in on the dozens of properties he acquired in the run-up during the boom (see page 54). Our story paints a picture of a small-time investor, who, along with partner Israel Perlmutter, may have gotten in over his head during the loose lending of the last decade. Thanks to scoring a few key loans, they amassed 37 properties throughout the borough. But they later became victims of the downturn, facing foreclosure lawsuits starting in 2009, and finally, after a four-year-selling spree, losing control of all but eight of their properties. While the downturn wasn’t directly responsible for Stark’s murder, it may have set the stage for soured relationships and deals gone bad. Meanwhile, less than a week after Stark’s murder, Ditmas Park landlord Mahuddin Mahmud was murdered by one of his tenants. Mahmud was found with his throat slit and face burned because the 57-year-old landlord had “humiliated and teased” the tenant for being poor, police sources said. The 27-year-old tenant was nabbed trying to board a plane at JFK Airport. Finally, in another grisly scene, prominent developer and Long Island political powerbroker Gary Melius was shot in the head at point-blank range last month by a masked gunman. Incredibly, the 69-year-old developer survived because the bullet hit him in the forehead but didn’t pierce his skull. The shooting occurred outside his posh

The reaction to the deadly attacks highlights the lack of sympathy for landlords in some circles.

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Oheka Castle, an opulent château featured in the classic movie “Citizen Kane,” which serves as an event space and home to Melius’s famous poker games. Police suspect that the shooting may be related to an earlier political scandal on Long Island. While no one is suggesting there is a link between these attacks, it does highlight the fact that there is a distinct lack of sympathy for landlords in some circles. Perhaps that’s not surprising given the public perception of landlords, and the strength of tenant advocacy in a renter-dominated city. As we reported on our website, the city’s tabloids had a field day with Stark’s murder. The New York Post ran a front-page story under the headline, “Who didn’t want him dead?” that chronicled a long list of Stark’s alleged enemies. Meanwhile, an op-ed titled “Death of a ‘Slumlord’ a Teaching Moment” that chronicled Stark’s numerous failings as a landlord was published on the website the Jewish Press, but was removed shortly after publication. The coverage ties into a long history of negative portrayals of landlords. One of my favorites was the network drama “666 Park Avenue,” which aired a few years ago, where the landlord was literally the devil incarnate (not just metaphorically the devil). If you want to find an exception to this stereotype, though, you don’t have to look farther than developer André Balazs, who we also profile in this issue. Balazs, who has made some big moves of late in unloading his Standard High Line hotel and embarking on new hospitality ventures in London, is one of the classiest developers in the city. Like Ian Schrager or Aby Rosen, he seems to care about the bottom line and quality in equal measure, which is instantly evident in the cutting-edge style of his projects. See our profile on page 34. Meanwhile, back on the blood-sport front, we delve into the dispute at Town Residential, the city’s fast-growing brokerage. Firm founder Andrew Heiberger and investment partner Joe Sitt are locked in a dramatic court battle for control of the firm. As The Real Deal was going to press, Heiberger had just won a temporary restraining order to prevent Sitt from locking him out of the firm. Check out the story on page 46. And last but definitely not least, check out our cover package on social media by reporter Hiten Samtani. There’s tons of good information about how social media went from a faddish afterthought for real estate brokerages a few years ago to a central part of their businesses today (page 38). Enjoy the issue!

18 March 2014 www.TheRealDeal.com

Stuart Elliott

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Re s i d e n t i a l Ma r k e t By Katherine Clarke ecord-low residential inventory is driving competition among myriad brokers for exclusive assignments to market new boutique condominium projects, many of which will hit the market in the coming months, brokers told The Real Deal. But developers of these proj-

Boutique condo projects spark broker battles With inventory tight, agents vie for marketing assignments

ects look to be sticking to tried and tested teams with experience in the new development arena, despite the horde of young agents vying for their attention. Securing such an assignment would be a major boon to a resale broker’s personal bottom line, which, for some, is suffering in this product-deprived market.

“With the inventory so scarce in the current market, competition has just gone up to a whole new level. Successfully executing on one of these is a huge stepping stone.” Genna Cole, Douglas Elliman Inventory fell to a 14-year low in the fourth quarter, to just 4,164 units in Manhattan, meaning there are fewer listings per broker than

ever before. “Every independent broker is looking for these opportunities,” said Genna Cole, a broker

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at Douglas Elliman who has been seeking to secure new development assignments. “With the inventory so scarce in the current market, competition has just gone up to a whole new level. Successfully executing on one of these is a huge stepping stone.” These projects, which often have fewer than 10 units, are becoming more popular thanks to the shrinking availability of Manhattan land and increasing luxury prices. They are different beasts than larger new development projects, however, since they don’t require an inhouse sales team and can’t rely on major marketing budgets to help unload units, sources said. With such buildings, there’s no hiding behind a marketing platform or a compelling narrative about the building thought up by advertising professionals. That means established names in the business with Rolodexes full of prospective buyers are still the best bet for marketing these small collections of homes. The majority of boutique new development offerings have been awarded to big-name brokers in recent months. The Corcoran Group’s Charlie Attias was selected to market the Chetrit Group’s most recent residential building at 738 Broadway, an eight-unit project, and last month developer Erez Itzhaki tapped Shlomi Reuveni of Brown Harris Stevens Select to market his newest Chelsea development, Modern 19, located at 138 West 19th Street. The latter project has six floor-through units and a duplex penthouse. “I love small buildings,” said Elliman stalwart Leonard Steinberg, an experienced boutique new development marketer who recently secured exclusive assignments to market condos at 560 West 24th Street, 27 Wooster Street and 7 Harrison Street. “You can take a few more risks, be a little more inventive, and more than likely, you don’t have to go through 20 different decision-makers to get stuff done in these buildings.” Marketing these projects is completely different than marketing a major new development tower Continued on page 110

22 March 2014 www.TheRealDeal.com Video Doorman

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Breaching the divide Residential and commercial brokers increasingly crossing sectors to drive more deals By Guelda Voien ew York City real estate historically upheld a sacrosanct division — call it “church and state” — that separated residential and commercial brokerage. But these days, that divide is quickly eroding as brokers increasingly do business in both worlds. Despite the traditional gulf between the industry sectors,

there has been a convergence recently. As prices for residential real estate soar, brokers are scrambling to create inventory anywhere they can. Not only do many agents team up with a counterpart on the other side, but some are also double-dipping, brokering sales of investment properties, private residences, and even retail space simultaneously.

Another factor driving the trend: Buyers increasingly have access to the same information that brokers do, making it more important for agents to bring something unique to the table. “StreetEasy has been the great equalizer,” said James Nelson, a commercial broker with brokerage Massey Knakal, who specializes in building sales. But the West Village specialist now also brokers sales

for single-family townhouses, like 146 Waverly Place, which recently went for $10.2 million. That’s partly because there is less need to refer business to someone else if you can find a buyer yourself — a reality that StreetEasy has helped engineer by creating a listing platform that members of the public and industry professionals can access. While in the past residential brokers were required to be members of the Real Estate Board of New York to access listings databases, StreetEasy allows all brokers, and other users, to get the same data for $10 a month. But it’s not just better

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information that’s driving the change. Transactions have also become increasingly complex, with facets of a residential transaction, such as air rights or “loft law” considerations, giving commercial brokers an edge. As a result, sellers are increasingly tapping commercial brokers to sell residential spaces, and some residential brokers are seeking partnerships with commercial brokers, sources told TRD. Many properties, like 124 West Houston Street, which Eastern Consolidated’s David Schechtman and Warburg Realty’s Gordon Roberts listed together in October, present zoning “opportunities,” Schechtman said. The massive, 16,000-square-foot residence was being converted from multi-family into a single-family home, in a landmarked district. The nuances of a property like this require both a commercial and a residential expert, he said. Nelson pointed to a townhouse at 164 Perry Street that was on the market three years ago, asking $3 million. “We realized there was value in the air rights,” he said. He nabbed the listing after telling the owner that it was worth more like $4.5 million. In the end, the air rights were sold to the owner of an adjacent building for $1.5 million, he said, and the building itself fetched $3.4 million.

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In addition, both potential homeowners and investors have had to broaden their scope in terms of what properties they want to buy, said Robert Dankner, a broker with Prime Manhattan Residential. “When inventory is so tight, you have to be a little more ingenious about what you do to take care of a client’s interest,” he said. And the lack of residential inventory lends itself to creativity, with brokers looking to carve new residential spaces out of commercial areas. “I developed an investmentoriented business by accident,” said Dankner, noting that he finds sites with a “commercial entry and residential exit.” For example, at 60 Beach Street, a Tribeca mixed-use building protected by the loft law, Dankner tapped his commercial skill set to help the new owner, HFZ Capital, do a workout on the distressed property. The property was partially converted to residential units and partially sold to a private equity group, according to HFZ founder Ziel Feldman. Continued on page 110

24 March 2014 www.TheRealDeal.com

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By the Numbers

16.6%

Jump in Hamptons/North Fork home sales in 2013 from previous year. Sales are, however, still down from the boom year of 2007.

$9,000

Approximate monthly cost of docking a 50-foot yacht in Sag Harbor.

High hopes in the Hamptons Even in the midst of NYC’s blizzard season, East End market begins to warm up

Average monthly rent for a Manhattan apartment in 2013.

Bill O’Reilly

The most expensive East End listing currently on the market, the Villa Maria. The 22,000-square foot Southampton house is owned by fashion entrepreneur Vince Camuto.

$75 million

The sale price of Wooldon Manor in Southampton, which was also owned by Camuto and which closed at the end of 2013. The property was the most expensive home ever sold in the Hamptons. The house sold for $137,000 in 1941.

$1.57 million Average Hamptons’ sales price in 2013’s fourth quarter. By comparison, the average sales price in 2000 was $548,308.

$1.3 million

hile the polar vortex put the chill on New York City last month, the Hamptons real estate market was just warming up. “Things are looking pretty good even in the middle of a blizzard. You’re going to see a very, very strong first quarter in the Hamptons market, and through 2014,” said Corcoran Group power broker Susan Breitenbach. Among the recent buyers: Actress Scarlet Johansson, who reportedly plunked down $2.2 million for an Amagansett home, and Fox News commentator Bill O’Reilly, who purchased an historic Montauk home in January, which he plans to replace with a larger one. This month, as New Yorkers are dreaming of summer, The Real Deal looked at what’s happening in the East End market. B y S asha von O ldershausen

New Listing By the Numbers

$3,905

$69 million

The amount the priciest Hamptons’ rental is asking from Memorial Day to Labor Day. The 18,000-square-foot home is located on 10 acres in Southampton Village.

$120,000

Final sale price of a one-foot-wide piece of land that two Manhattan financiers fought over in a bidding war. The minuscule plot offers the exclusive right-of-way to both of their Napeague oceanfront properties. The initial asking price for the plot was $10.

$245,000

Current cheapest asking price for a house in the Hamptons. The 1,095-square-foot house sits on a 0.09-acre lot.

Wooldon Manor

$103 million

The price financial mogul Ron Baron paid in 2007 for a 40-acre parcel of land. The purchase was the all-time priciest Hamptons’ land sale.

$62 million

The price that SAC’s Steve Cohen paid last year for the East Hampton home he’s now looking to unload. The embattled hedge funder also owns another Hamptons’ home valued at $18.5 million.

$43.5 million

Price that Hamptons’ developer Joe Farrell rejected to sell his Sandcastle House, which he’s planning to live in with his family instead. In August 2012, music power couple Jay-Z and Beyoncé rented the house for $400,000 for one month. Sources: www.hamptons.com, Sag Harbor Launch + Moorings, MNS, Bloomberg News, The East Hampton Star, New York Times, Curbed, Douglas Elliman, New York Daily News, People, Wall Street Journal, HREO

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Compiled by Yaffi Spodek

Sotheby’s International Realty and the Sotheby’s International Realty logo are registered (or unregistered) service marks used with permission. Operated by Sotheby’s International Realty, Inc. 03-14Field.indd 1

26 March 2014 www.TheRealDeal.com

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The DeMatteis Organizations

: f o s

Kids’art

Barrocas’ two daughters, Cayden and

Ella, are 5 and 2, respectively. He said

they don’t believe it when he promises

to put their artwork up on his wall, so he texts photos of his desk to his wife, Rachel, to prove it to them.

Andrew Ba r r o c a s

ndrew Barrocas, 35, grew up expecting to go into his father’s business, manufacturing menu covers and accessories for women’s clothing. But Joel Barrocas wanted his son to experience another line of work first, so Barrocas headed to Citi Habitats in 2001, after graduating from Arizona State University. There, he discovered a niche, marketing new developments Downtown in the wake of the Sept. 11 attacks. Just four years later, he founded his own company, the Real Estate Group of New York, which merged with Brooklyn-based marketers the Developers Group in 2009. In 2011, the company settled on the less-generic name MNS. Today, MNS has more than 80 agents across four offices in Manhattan and Brooklyn and Barrocas, as CEO, oversees a small residential empire. The firm currently represents 40 projects — about 3,500 units planned or under construction. Last month, TRD checked out Barrocas’ Flatiron District digs. B y G uelda V oien

Sculptures These ceramic sculptures are modeled after the iconic photograph

Skiing

“Lunch Atop a Skyscraper,” which was taken during the

Barrocas is an avid skier, preferring

construction of Rockefeller Center in 1932. The figures have fallen

to ski out west in Utah. When he

off their ledge a few times since Barrocas bought them in Soho about 10 years ago. He even shipped them to a ceramics specialist to have them repaired once. “They’ve taken quite a beating.”

skies on the East Coast, where he

One Way Sign

often takes his daughters for a day

Barrocas’ father found this sign near his Bronx factory shortly after his

on the slopes, he goes to Thunder

son launched his firm in 2005. He framed it as a gift to “indicate there

Ridge, in Westchester County, or

is only one way, which is up,” Barrocas said. When Barrocas opted not

Windham, in the Catskills.

to work for his father, it was only because after one year in real estate, he was making six times the starting salary his father offered him, he said.

“Big Moose” jerky One of Barrocas’ biggest clients, Douglaston Development scion Ben Levine, is a fan of this beef jerky called Big Moose Road Kill. During a trip with

Shofar

Levine to Vermont, the pair discovered

This traditional Jewish shofar was presented to Barrocas when he

the snack being sold by a roadside meat

won the Young Jewish Professionals’ “Real Estate Entrepreneur

purveyor. Now, Barrocas orders the jerky

Award,” in 2011. Barrocas, a YJP member, pointed out that the

several times a year so that he’s stocked up

group honors many non-Jewish achievers in business as well. “Joe

for meetings with Levine.

Basketball trophy This trophy, for winning the 2012 Hooperstown Basketball Championship, was costly – and not emotionally or physically. Barrocas and some friends joined a basketball league that year, but realized they were outclassed after losing their first game by almost 60 points. So they hired several highly skilled players, including a couple of former Harlem Globetrotters. Barrocas won’t say how much they paid the ringers, but his team won the 10-game series.

McMillan of [DDG Partners] got one once,” he said.

Liquor This booze collection helps MNS brokers relax after a taxing day. But it’s hard to keep it in stock, because Barrocas lets anyone on staff come in and have a drink whenever they want. “The nicer the bottle, the quicker it goes missing,” he said.

Run DMC

Nets Barrocas is a season ticket holder for both the

Barrocas is a big fan of the

Brooklyn Nets and the New York Knicks. He

pioneering hip-hop group

grew up an ardent fan of the latter, so becoming

Run DMC. One of his agents

a Nets fan was “a little controversial

bought him this figurine of

for me. A lot of my friends give me

the group, which he keeps on

crap about [it],” he said.

his desk.

28 March 2014 www.TheRealDeal.com

PHOTOGRAPH OF ANDREW BARROCAS FOR THE REAL DEAL BY CHRISTIAN FERNANDEZ

Commercial Ma r k e t

Unusual pricing upends market

With Midtown South’s popularity, older and less central buildings can actually cost more

By Adam Pincus he way office-leasing tenants value the two most basic variables for space in Manhattan, location and the vintage of the building, is undergoing a sea change, creating unpredictable results in pricing, brokers say. The change has been creeping in over several years, in part driven by rents in the core of Midtown South eclipsing rents in much of Midtown, and by the popularity of other pricey submarkets. Several recent lease deals underscored the vagaries in the market for Howard Grufferman, vice chairman of the New York office of commercial brokerage Colliers International. He pointed to two leases, both in large, traditional office buildings, one along Third Avenue a block from Grand Central Terminal and another on Broadway two blocks south of Times Square, in the heart of the Garment District. By any traditional method, the Grand Central space would typical-

ly command a higher rent, but instead it was in the mid-$50s, while a deal in the once-stodgy Garment District was in the $70s, he said. “It used to be we could scale the rents relative to geography,” Grufferman said. The highest rents would traditionally be in the central business district. “That does not work anymore,” he said. “I have never seen it so disjointed.” Overall, the average asking rent for Manhattan was up last month to $62.91 per square foot, from $60.57 per foot in January, information from Colliers showed. The availability rate, which measures space that is available now or will be available in the next 12 months, tightened by 0.1 point to 11 percent.

That was driven in part by space with above-average asking rents that hit the market, including large blocks at the Durst Organization’s 4 Times Square. Condé Nast is slated to move to 1 World Trade Center later this year, and more than 800,000 square feet at the 1.8 million-square-foot tower was listed, brokers said. The asking rent starts at $83 per square foot. A Durst spokesperson declined to comment on the listing. Other new spaces included blocks at Solow Management’s Plaza District tower, 9 West 57th Street, with asking rents as high as $200 per foot, Colliers statistics showed. That was far higher than the average asking rent in Midtown last month, which rose by $3.04 per foot in February over the prior month, to $73.25 per square foot, while the availability rate declined by 0.2 points to 11.5 percent, the Colliers figures revealed. “We saw late in the month some

declines in asking [rent] in base floors in lesser-quality buildings. However, tower floors really saw an increase in asking [rents],” said Peter Kozel, head of research for Colliers’ New York office. However even as the asking rents ticked up, some brokers said rents are being supported by longer free-rent periods and more money given to tenants to build out their space, known as work letters. Landlords want a higher rent on paper to hit numbers required by their lenders, they said.

Midtown South

Our Approach / Investment Sales & Investment Research

While Downtown is providing steep competition to Midtown South on a price-per-squarefoot basis, landlords are facing an ever-increasing competition from Brooklyn’s Dumbo neighborhood. Prospective tenants hungry for the Midtown South creative vibe, but priced out of the area, are searching Downtown for cheaper alternatives. But some find Lower Manhattan lacking in the sought-after spirit, and instead are turning to Dumbo, said Dirk Hrobsky, managing director of the New York office of commercial brokerage DTZ. Hrobsky declined to identify which technology clients he’s representing. “Some of the high-tech [clients] would like to be in Manhattan, but we have ended up having our focus in some part directed to Brooklyn, because it is hip and a good alternative to Midtown South,” Hrobsky said. Generally in Dumbo, the average asking rent for space he is considering is about $45 per square foot. That is significantly below the average asking rent in Midtown South, which was $55.79 per square foot last month, up $1.08 per foot from January. The market continued to tighten, with the availability rate falling by 0.2 points last month to 8.4 percent, the Colliers data showed.

People and relationships are at the heart of every real estate transaction. We’re committed to providing clients with unmatched value by combining our relationship-driven investment sales operation with superior research and market knowledge.

Downtown

Midtown Even as some buildings in the core of Midtown are seeing modest rents, the average asking rent for the market overall rose substantially last month, Colliers data showed.

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While some tech firms are heading across the river, others continue the march to Lower Manhattan. San Francisco-based tech

Manhattan office stats AVAILABILITY AVG. ASKING RATE RENT

Manhattan Feb ’14 11.0% $62.91 Jan ’14 11.1% $60.57 Midtown Feb ’14 11.5% $73.25 Jan ’14 11.7% $70.21 Midtown South Feb ’14 8.4% $55.79 Jan ’14 8.6% $54.71 Downtown Feb ’14 13.8% $49.88 Jan ’14 13.6% $48.22 Source: Colliers International

teaching institute Dev Bootcamp signed a short-term sublease for a 14,200 square foot space in Swig Equities’ 48 Wall Street, data from leasing database CompStak revealed. The programming school, which also has a school in Chicago, was founded in 2012 and is growing quickly. A Lee & Associates team of Dennis Someck, Mitchell Kunikoff and Justin Myers represented Dev Bootcamp in the lease signed in early 2014 with an asking rent of $35 per foot. The group had a tight deadline to find space for the school, which is slated to open later this month. They focused their search in Lower Manhattan not only because of the lower rents, but also because of its growth as a tech center, Someck said. “We did not have time for a big build out, and this really fit the bill,” Someck said. Dev Bootcamp took space currently occupied by shareholder governance analysis firm Glass, Lewis & Co., which is moving to 44 Wall Street, CompStak reported. Glass, Lewis did not respond to requests for comment. Studley brokers Greg Taubin and Gabe Marans represented the firm. While Lower Manhattan continues to be a lower-priced alternative to points north, rents are rising. The average asking rent last month ticked up to $49.88 per foot, from $48.22 per foot in January. Downtown’s availability rate rose by 0.2 points to 13.8 percent last month, the only market to see an increase, the Colliers statistics showed. TRD

In their words...

The funniest and most insightful comments on real estate

“There’s always been a certain ‘ressentiment,’ as the French would say, of the people who do well.” Boston Properties chairman Mort Zuckerman, channeling his Montreal roots to talk about the perception of the 1%. (Colbert Report)

“[The buyer] was in the penthouse less than five minutes and said ‘I’ll take it.’ ” Douglas Elliman broker

Vickey Barron, on the $50.9 million, record-setting deal for the Walker Tower penthouse Downtown. (Wall Street Journal)

“The format will be something new, which is why we’re schlepping around Italy.” Restaurateur

Shelly Fireman, on his plans for a new Italian eatery at 225 Park Avenue South. (New York Post)

32 March2014 www.TheRealDeal.com

“We are discontinuing our marketing efforts and respecting the letter of intent.” Brown Harris Stevens superbroker John Burger, on the deal for the River House private club that put an end to his sky-high $130 million listing.

“We have no plans for a property tax increase.” Mayor Bill de Blasio, making good on a promise he made on the campaign trail. (Wall Street Journal)

“Mr. Rosen has previously referred to the Picasso curtain as a ‘schmatte,’ the Yiddish word for rag.” The New York Landmarks Conservancy, in a lawsuit it filed to block Aby Rosen’s removal of Pablo Picasso’s “Le Tricorne” from the Four Seasons Restaurant lobby. (DNAinfo)

“He suddenly found himself in the middle of the terrible, terrible downturn, and it was almost impossible not to get crushed.”

“I don’t know if Durels is that good.” A tongue-in-cheek Marc Holliday, on whether leasing director Steve Durels would be able to make SL Green’s ambitious goal of leasing 500,000 square feet per quarter.

Larry Silverstein, on the fall of real estate developer Kent Swig. (New York

“It was a wellbehaved llama.” Justin Moore-Lewy, an executive at advertising firm HeLo, on producing a Super Bowl spot starring Arnold Schwarzenegger and a llama at 4 World Trade Center. (Wall Street Journal)

“It’s the Johnson & Johnson strategy of getting in when they’re young!” Tech guru Jack Hidary, on why brokers should build relationships with startups working in shared office spaces.

don’t judge a book by its cover... ...unless it’s ours. We know how to market and sell residential real estate. We bring more creativity, more talent, more insight, more experience and more success to the table than you will find anywhere. Period. Simply put, we conceive, create, brand, promote and sell better than anyone in the market. This is accomplished through our unprecedented marketing insight, veteran sales team and innovative solutions to complex problems. Don’t believe us? What if we told you that over the course of our 30-year history we have achieved $30 billion in sales, won over 200 industry awards, piloted 275 developments in New York City alone and currently have 62 active projects? Shouldn’t yours be number 63?

go ahead. judge us.

2.28.14 • TMD • Real Deal • magazine trim: 10.5 x 14.5 • mechanical size: 10.75 x 14.75 - NOTE: mechanical size includes bleed

Pr o f i l e

André the giant

After last month’s blockbuster sale of the Standard High Line, Balazs debuts new hotel in London

Hotelier André Balazs says he’s “not interested in cutting corners to build a hotel and then selling it to some other guy for a ton of money.”

By C. J. Hughes ver the course of a long career, André Balazs has been known to keep a tight grip on his hotel portfolio, which is bedazzled with see-and-be-scene properties in Los Angeles, Miami and New York. But lately, his grip has been loosening a bit. In the last year, the hotelier has whittled his portfolio in a pair of blockbuster moves. The boldest of those deals came last month, when he sold the real estate behind his signature New York property — the 330-room Standard High Line — for more than $400 million, in what’s believed to be one of the highest prices ever paid for a hotel of its size in the city. The buyer was the Standard International, the management company and creative force that he’s also an investor in, and which operates the Standard’s five properties — two in New York, two in Los Angeles and one in Miami. Analysts say that Balazs, a pioneer on the boutique hotel scene, is likely to receive a windfall through the sale of the Standard High Line given that he was one of the owners of the real estate on the property.

34 March 2014 www.TheRealDeal.com

“There is such banal product in the hotel industry. It used to be that the discount hotels were known for their sameness and lack of innovation. But now it’s the highest-end chains that have the same problem.” André Balazs, hotelier Sources say he’s likely entitled to between a 10 and 20 percent cut of the profits, but his ownership stake is unclear. The sale comes on the heels of another related mega-deal. In September, Balazs, 57, sold 80 percent of his management company, now known as Standard International. Balazs said he thinks about more than making money when negotiating a deal. “I’m not interested in cutting corners to build a hotel and then selling it to some other guy for a ton of money,” Balazs told TRD during a phone interview last month. “When I create these things, I think about what kind of experience I would have if I were sitting at a table in the restaurant on a Wednesday

night a few years down the road.” Still some are buzzing about his real estate conquests, noting that Balazs has historically owned more of his hotel real estate than other operators do. “Everything he has ever touched has turned to gold,” said Bradley Burwell, a vice president at commercial brokerage CBRE Group, who specializes in hotel sales but has not been involved in any of Balazs deals. “And selling the Standard was perfect timing,” because the investment sales market is so strong right now. Balazs’s moves undoubtedly free up critical capital at a time when the developer is in the midst of pursuing several other projects, including two in London, his first outside the U.S.

In the Standard sale, the hotelier and his institutional partners Dune Capital Management and Greenfield Partners collected about $1.2 million per room in a deal brokered by Eastdil Secured’s Doug Harmon on both sides. While Balazs’s equity position is unclear, Dune and Greenfield have far bigger stakes, possibly up to a combined 90 percent, sources said. That makes it one of the priciest deals in New York since the W Union Square sold for $285 million, or more than $1 million a room at the peak of the last boom, in 2006, to Dubai World, a sovereign wealth fund. At the Standard, Dune and Greenfield had invested $240 million over the years, sources said. Balazs told TRD that while Greenfield was his longtime partner, he

www.TheRealDeal.com February 2014 49

Pr o f i l e brought Dune in halfway through the project to “spread the risk.” According to sources close to the deal, Greenfield and Dune needed to sell now because they had deadlines looming to pay back investors in some of their funds. Neither firm returned calls. While most analysts call Balazs’s maneuvering shrewd, a source close to the deal took a more skeptical view of Balazs, saying his two recent sales were less about financial prowess and more about saving face. The source said Balazs likely sold his stake in the Standard International as a way to distance himself from the operating company because he knew Dune and Greenfield were about to force a sale and he didn’t want to be left operating the hotel if another high-profile owner stepped in and planted a flag there. Balazs vehemently denied that charge. “It’s silly. It makes no sense. If that were the case, I would have sold the whole stake and been done with it,” he said. In fact, Balazs said despite his Standard Internation sale, he hopes to expand the management arm of his business into more markets without adding new real estate holdings. He said the move would bring the brand more in line with companies like Marriott and the W. And if Balazs was desperately searching for an exit strategy in the Meatpacking District, other analysts added, he set himself up nicely with expansion plans already in the works, both in New York and in London. And he seems confident he hasn’t lost his touch. “We are interested in going where people who we know — who are the types attracted to our hotels and made them such unique places — want to be,” Balazs said. “There is such banal product in the hotel industry,” he added. “It used to be that the discount hotels were known for their sameness and lack of innovation. But now it’s the highest-end chains that have the same problem.”

pany from Balazs’s father for $700 million, according to news reports. But back in the 1980s, when the Downtown clubbing scene was in full force, Balazs was living in Soho. In 1985, he married Katie Ford, whose family founded the Ford Modeling Agency. (The two divorced two decades later.) Since splitting up with his wife, Balazs has been linked to a string of high-profile girlfriends, including Uma Thurman,

He showed a deft financial touch with the Mercer, said Paul Stern, a managing director of Wharton Equity Partners who handles hotel investments for the firm. The $33 million redevelopment of the Mercer required a large loan from a Japanese bank, which Balazs and Platt defaulted on when the economy turned, analysts say. But with the bank panicking, Balazs eventually bought back his loan for a mere $3 million.

The Standard High Line, which sold last month for $400 million

Still in the mix

The Chateau Marmont in Los Angeles, which Balazs bought in the 1990s

The Balazs backstory Born to Hungarian émigrés who fled their country during World War II, Balazs spent much of his childhood in Cambridge, Mass. His father, Endre, was an ophthalmologist known for, among other things, extracting a natural Botox from rooster combs, according to news reports; his mother, Eva, was a psychologist. After high school at the elite Buckingham Browne and Nichols, Balazs shipped off to Cornell University, where he got bitten by the writing bug and launched newspapers and magazines, he said. He then went to Columbia University’s Graduate School of Journalism, where “I was taught by some of the last greats of the Watergate era.” But his first job, in the 1980s, was with Biomatrix, a New Jersey–based biotech company he founded with his father. Years later, in 2000, Genzyme bought the com-

28 March 2012 www.TheRealDeal.com

His hotels are not large — some have less than 100 rooms — but like Ian Schrager hotels, most of them have been hot trendsetters with coveted restaurants and bars like the so-called Boom Boom Room at the top of the Standard High Line. But Balazs is not immune to market downturns. A deal to build a hotel in the Meatpacking District with a group of investors that included hip-hop star Jay-Z and developer Abe Shnay flamed after the group defaulted on their loan, according to news reports. It wasn’t the first Balazs hotel that failed to launch. The post-Sept. 11 downturn in 2001 forced him to abandon a hotel project at Kenmare Square in Soho, as well as at 40 Mercer. But Balazs reversed his fortunes by turning both into successful condos. He wasn’t as lucky at the 47-story ground-up William Beaver House in the Financial District, which he and partner SDS Investments defaulted on, and lost, in the midst of the recession. The private equity firm CIM Group swooped in in 2010, refashioning the condo as rental in the process. The 300-unit building is now reportedly going condo again. “I wish I still had it,” Balazs said.

Balazs teamed up with architect Campion Platt, left, on the Mercer Hotel and Chateau Marmont. Right: Google’s Eric Schmidt, a partner on Balazs’s new London hotel.

Pippa Middleton and Chelsea Handler. Balazs first began dabbling in the hospitality business in 1988, with MK, a club on Fifth Avenue, where he partnered with Eric Goode of the Bowery, Maritime and Jane hotels. “I was more of a passive investor,” Balazs said. Then in the early 1990s, teaming up with architect Campion Platt, Balazs bought two properties that put him on the map: The Chateau Marmont, a rundown Hollywood property, and the Mercer Hotel, a six-story former warehouse near his Soho apartment.

Later, Richard Born, a principal of BD Hotels, stepped in to get the project across the finish line. The 75-room hotel opened in 1997, and the pair still own it today. “It was not just staying with the project,” Stern said. “It was having the confidence to convince other people that they should stay in.” Today, Balazs’s empire still includes those two properties, as well as the five Standard hotels, plus Sunset Beach, on Shelter Island, down the road from one of his many homes. However, he no longer owns the real estate in L.A. and Miami.

But the hotelier is not hurting for business. And Balazs, whose soup-to-nuts, detail-oriented approach to his properties is industry legend, will not be disappearing from the Standard High Line, either. He still owns a small stake in Standard International, and now serves as its chairman and creative director. Balazs said that the investors who bought his Standard International stake last year include David Heller, a former Goldman Sachs trader. Heller, who is an investor in the Philadelphia 76ers, according to his LinkedIn profile, also holds a stake in the Standard East Village, according to Balazs. Heller, Balazs and other investors bought the property, then known as the Cooper Square Hotel, in 2011 for $90 million. Heller’s Goldman Sachs connection isn’t surprising. The bank was one of Balazs’s partners in the mid-2000s on his 40 Mercer Street condo. Likewise, Dune’s CEO, Daniel Neidich, founded Goldman’s first Whitehall Street real estate fund, a private equity fund that was at the forefront of real estate investment in the early 1990s. And while Balazs and his partners have sold the Standard High Line, neither the name nor the hotel’s services are expected to change, Balazs told TRD. In addition, since 2011, he’s ventured into a new business: seaplanes. His StndAIR airline whisks passengers from the heliport at East 23rd Street to posh destinations like East Hampton ($525 one way.) And now Balazs is expanding his real estate empire overseas. He told TRD he just won a bid to develop Continued on page 112

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REGULATING REAL ESTATE

A helping hand on mortgages Families step in to help young people buy homes despite heavy student debt By Kenneth R. Harney arents, grandparents and young adults know the problem only too well: Heavy student-debt loads, persistent employment troubles stemming from the recession, plus newly toughened mortgage-underwriting standards, are all standing in the way of vast numbers of potential first-time homebuyers in their 20s and 30s. But are there effective techniques that family members, friends, even employers can use to bridge the generational gap by offering a helping hand, without hurting their own finances in the process? You bet. First, some sobering numbers: • Citing Census Bureau data on homeownership by age, demographer Chris Porter of John Burns Real Estate Consulting calculates that Americans who were 30 to 34 years of age in 2012 — those born between 1978 and 1982 — had the lowest homeownership rate of any similarly aged group in recent decades, 47.9 percent. By contrast, Americans born between 1948 and 1957 had a 57.1 ownership rate by the time they hit the 30 to 34 bracket. This is despite record low mortgage

the financial pieces to make it feasible. So what are some of the solutions available to help bridge the gap? The most popular is also the oldest: Growing numbers of relatives are stepping in with gift money to help defray the down payment and the closing costs — 27 percent of first-time purchasers last year, according to one industry estimate. Down-payment gifts do not address the crucial debt-to-income ratio problem, but for young buyers who can get close to the 43 percent mark for conventional loans (Fannie Mae and Freddie Mac) or slightly higher at the more flexible FHA or VA, they can be extremely important. Rules on gifts vary among funding sources, but there are some shared basics: The money cannot be disguised as a gift if it is actually a loan; there needs to be a formal gift letter that spells out the purpose of the gift and the specific transaction for which it is to be used; the source of the funds and the capacity of the gift-giver to provide the money need to be documented. For down-payment help outside the family tree, check

Americans 30 to 34 years of age have the lowest homeownership rate of any similarly aged group in recent decades. rates and bumper crops of bargain-priced foreclosures and short sales. • Debt-to-income ratios increasingly are mortgage application killers for would-be first-timers. Adoption nationwide last month of a new federal 43 percent maximum debt-to-income ratio for “qualified mortgages” is particularly poorly timed for young purchasers. Because of large student debts, which average $21,402 but sometimes balloon into six figures, they may not be able to meet the 43 percent standard for years. Typically they’re paying out large amounts on credit cards, auto loans or leases and their student debt — about 30 percent of current monthly income for those 21 to 30 years of age as of 2012, according to a new research report from research economist Gay Cororaton of the National Association of Realtors. Factoring in the monthly cost of a typical mortgage for an entry-level purchase, the debt-to-income ratio as of 2012 for these individuals exceeded 60 percent, Cororaton estimates. Even with a 5 percent increase in income per year, they will not be able to qualify under the 43 percent debt-to-income test until 2019. That’s a long time to postpone a purchase. Yet consumer research consistently finds that the overwhelming majority of Americans in their 20s and 30s would like to own a home, once they’re able to put together

out www.downpaymentresource.com. An increasingly important and fast-growing resource is also turning the gift concept on its head: Rather than simply handing over their cash with no repayment arrangements, family members are becoming mini-lenders themselves. With a little professional assistance, they are providing either second mortgages or first mortgages that are custom-designed to deal with whatever financial hurdles their young relatives are confronting, including paying off student loans to reduce debt-to-income ratios. Properly structured, these loans provide annual returns to family members well in excess of money-market funds or bank deposits, and open the door to homeownership for their kin. The largest player in the field, National Family Mortgage (www.nationalfamilymortgage.com), has structured and serviced more than $155 million of intra-family transactions in the past two years and is on track, according to founder and CEO Tim Burke, to do $150 million in volume during 2014. “There is a lot going on” in this field that can help entry-level buyers strapped with student-loan debt, says Burke. Check it out. Kenneth Harney is a syndicated columnist.

Like The Real Deal on Facebook: www.facebook.com / TheRealDealMagazine 36 March 2014 www.TheRealDeal.com

GOVERNMENT BRIEFS Queens Beep backs preserving NYS Pavilion Queens Borough President Melinda Katz has joined the effort to save the New York State Pavilion. In February, just months before the pavilion’s 50th anniversary, Katz vowed support for the building’s preservation, alongside the activist group People for the Pavilion, and announced plans to assemble a task force to bring civic leaders and officials together to work on ways to save the “Tent of Tomorrow” and the iconic towers alongside it. Salmaan Khan, a representative of the People for The New York State Pavilion the Pavilion told The Real Deal, “This was the first time we heard a solid vow of support for the structure from political leadership, and her support is critical to the success of this cause.” Designed by architect Philip Johnson, the historic pavilion was erected in 1964 for the World’s Fair in Flushing Meadows-Corona Park. It was later used as a roller skating rink, but in recent years it has fallen into disuse and disrepair. The Parks Department estimated that demolition would cost the city $14 million, while full restoration could run the price tag up to $50 million.

Psych ward to become affordable housing An affordable housing complex is slated to replace the former psychiatric ward at Kings County Hospital in Crown Heights. The project is headed by CAMBA, the Brooklyn-based nonprofit developer responsible for CAMBA Gardens, a housing complex that is converting another vacant building at the hospital. The replacement for the psych ward is the second phase of this development, and will include 293 units encompassing 97,000 square feet. Lead architect John Woelfling of Dattner Architects said they considered converting the existing building, but the floor plan was not appropriate for adapting it. The project is slated to finish in 2016.

State to sell women’s prison in Chelsea The state is moving forward with plans to sell the Bayview Correctional Facility in Chelsea to developers. State officials expressed hopes to find a project that will stimulate Bayview Correctional Facility job growth in the community, despite interest from developers who want to turn the 108,000 square feet of space into luxury condominiums, and Community Board 4’s hopes to convert the former medium-security prison into affordable housing units. The facility, which is next door to a Jean Nouvel–designed high rise, hasn’t housed any inmates since they were evacuated shortly before Superstorm Sandy in 2012. The storm sent water from the Hudson River rushing in, damaging electrical equipment and destroying boilers. The deal is part of Gov. Andrew Cuomo’s plan to sell several state prisons. Officials are slated to select a developer this spring.

BID plan would join Chelsea, Meatpacking District A proposed business improvement district that would merge the Meatpacking District Improvement Association and the Chelsea Improvement Company aims to beautify and enhance public safety in the areas bordered by Horatio Street and West 17th Street, from Eighth Avenue to the Hudson River. If the BID is approved, commercial propThe Meatpacking District erty owners will be required to pay 21.5 cents per square foot each year to contribute to the $1.6 million-a-year plan, DNAinfo reported. The BID would be comprised of property owners and tenants, as well as public officials. New York City currently has 68 BIDs, the most comprehensive network of such organizations in the nation. Compiled by Sasha von Oldershausen

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Real Estate

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Social Media

NYCRealEstate How social media has gone from bit player to central marketing component for NYC’s residential brokerages in the last few years

By Hiten Samtani n July, Halstead Property broker Jill Sloane wrote a post on the brokerage’s popular Tumblr page titled “10 things you didn’t know about the Ansonia.” Sloane compiled a list of historical tidbits about the Upper West Side condominium, including its status as the first airconditioned hotel in the city and its cameo in Woody Allen’s Oscar-winning film, “Hannah and Her Sisters.” A prospective buyer came across the post and reached out to Sloane. The two are now working together to find a unit, according to Matthew Leone, director of web marketing and social media at Halstead parent Terra Holdings. “Real estate companies should be like politicians and act as ambassadors of the community,” Leone said, pointing to social media — a blanket term for online community-focused tools such as Facebook and Twitter — as a powerful tool to achieve this goal. In the last three years, social media has gone from being a bit player in New York real estate to a central component of a firm’s marketing and branding strategy. Most of the city’s top residential brokerages have made big bets on social platforms, hiring dedicated teams to run social media operations, brainstorming ways to stand out with their content

38 March 2014 www.TheRealDeal.com

and training their brokers in the art of engagement. And the ones who haven’t are catching up fast. Commercial firms have been slower to the draw, but they too are now racking up followers across many social platforms. Warburg Realty president Frederick Peters, who pens a weekly blog about his views on real estate, said the posts are a strong driver of business for his agents. “It provides the firm with a particular kind of credibility,” he said, noting that the

“There are actual transactions coming through,” he said. “People will comment on a post [showcasing a listing] saying, ‘This is perfect for us!’ and then they tag their husband or wife.”

Older and wiser In their early experiments with social media, brokerages treated it as a one-way platform, simply pushing out their own content and listings. But they are now using social tools

“I don’t care about how many followers I have. I want my followers to be willing to engage in my product. To like it, share it, care about it. That is telling me how well I’m doing my job.” Matthew Leone, Terra Holdings four-year-old blog gets about 1 million page views per year. Individual brokers who build a social media brand can also reap rewards. Douglas Elliman broker and “Million Dollar Listing” star Fredrik Eklund, who has about 200,000 followers across Facebook, Twitter and photo-sharing app Instagram, estimates that social media is responsible for almost a quarter of his business.

in a more participatory manner, engaging followers in debate, asking them to submit their own content, and giving them useful tips on everything from restaurants to weekend activities. At Halstead, social media began as an extension of marketing efforts that may not have reached young and tech-savvy audiences, Leone said. But it has evolved, he said, “into a viable medium for spreading valuable information to the masses at

Real Estate all our target-age levels.” Firms have also learned what kind of content works on each social media platform. “Facebook drives engagement and is a one-stop shop for focus grouping,” said Elizabeth Kosich, director of marketing and digital strategy at Core. “Twitter is really effective for sharing news and driving traffic, and Instagram is great for visual content,” such as listings.

Measuring friendships What makes social media a bit of a gamble, however, is that its results aren’t directly quantifiable. It’s tough, for example, to say what 1,000 Facebook “likes” means for a company’s bottom line. As a result, firms take a range of approaches to measuring the efficacy of their efforts. Corcoran, for example, conducts post-sales interviews with clients to see what sparked their interest. “However, that process is a little foggy,” said Corcoran’s former director of interactive marketing Matthew Shadbolt in a June “Inside Social Media” podcast, “because it’s like trying to remember the first time you had a Coke.” Shadbolt — who in January became the director of real estate product at the New York Times — stressed, however, that there is a direct connection between social media effectiveness and performance on search engines, both for agents and companies. Warburg’s director of marketing, Lori Levin, said that although it’s difficult to gauge social media’s return on investment, “it’s a great place to initiate and cement relationships.” Facebook, Twitter and online visual pinboard Pinterest all rank among the top 10 sources of Halstead’s web traffic, according to Leone. Social isn’t about direct lead generation, he said, but more of a brand-building tool that ensures that “when a Halstead business card gets handed” to a potential client, “they will know us.” The largest demographic for Halstead’s social media followers is women aged between 35 and 45, he added. Halstead tries to gear its content toward its followers’ interests, which include New York City, home décor, architecture and luxury, but Leone declined to specify how the firm does that. Though it may be tough to draw a straight line from social media to sales, it is possible to assess how engaged followers are. The most popular tool to do this is Klout, which analyzes data from platforms such as Facebook, Twitter, Foursquare, LinkedIn and Instagram, evaluates metrics such as total follower count and unique mentions and assigns users a score ranging from 1 to 100. Klout also identifies a page’s most active followers.

Pay to play Having a large social media following is now a big factor in winning business, several sources said. Because of this, some brokers and firms buy advertisements for their pages on social media platforms to gain more followers, rather than organically winning them, according to Elliman’s Eklund. “Because we are using it in pitches, some of my competitors are buying followers,” he said. “You can see that they have 100,000 followers and 16 likes per post.” Organically grown social media accounts tend to have more comments, likes, shares and retweets, while those built through advertising can boast big overall numbers, but don’t command the same kind of follower engagement. The social media strategy for Eddie Shapiro’s Nest Seekers International, for example, appears to be largely advertisingdriven. Its Facebook page has over 275,000 page likes, far and away the most of any of the New York–based firms, and it also leads the pack with over 54,000 Twitter followers and more than 40,000 Instagram followers. But rarely do the posts on its Facebook page garner more than a handful of likes. In contrast, Corcoran’s Facebook page, which has just over 113,000 page likes, can rack up hundreds of likes per post.

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The social media scorecard A look at how the five biggest residential firms stack up By Hiten Samtani ot all social media efforts are created equally. This month, TRD evaluated the city’s five largest residential brokerage firms, looking at the size of their social media communities and how effectively firms engaged with them. Here’s a look at our scorecard.

The Corcoran Group Corcoran is widely acknowledged as an industry leader in social media. The firm has built a strong presence across major platforms such as Twitter and Facebook and successfully experimented with newer platforms like Instagram and Pinterest. Corcoran’s Klout score is 77, the highest among the city’s residential brokerages, and among the top 10 percent of all users tracked by Klout, including companies and individuals. On Facebook, Corcoran has over 113,000 likes and posts at least three times a day, sharing listing photos, swiftly replying to comments with pricing information, and sharing tips on the housing market and New York City living. Occasionally, CEO Pamela Liebman will post a video responding to questions posed by Facebook and Twitter followers. On Twitter, rather than simply pushing out its own listings, Corcoran actively engages its more than 16,000 followers in conversation on everything from neighborhood attractions to interior design and homeownership, amplifying their voices through retweets. And on location-based social network Foursquare, where the firm has over 21,000 followers, Corcoran has left over 3,000 “insider tips.” These run the gamut from what to order at an Upper East Side French restaurant to the faster route from Westchester to Long Island. Corcoran uses online service IFTTT, which responds to “triggers” such as the weather on a certain day, to help it share appropriate content. If it rains in Manhattan, for example, Corcoran’s followers will automatically see lists of the best things to do indoors. “When it snows, you’ll find agents recommending wonderful hot chocolate venues,” Matthew Shadbolt, Corcoran’s former director of interactive marketing, told TRD in November. The context-specific approach, Shadbolt said, had proven to be “very powerful in interacting with customers.” While Shadbolt was responsible for a large part of Corcoran’s social media success during his eight-year stint, the firm has “a history of innovation that predates Matthew,” Warburg’s Peters said. Corcoran declined to comment for this story, and a LinkedIn job posting seeking a replacement for Shadbolt was recently removed.

Halstead Property Like Corcoran, Halstead engages with its followers in a way that drives traffic to its website and strengthens its brand. It has over 32,000 Twitter followers and 20,000 Facebook page likes, but what stands out is how widely its content is shared. On Facebook, Halstead’s total reach — the total number of impressions for its page — for the second week of February was over 212,000 users, and over the last three months, each post received an average of 213 likes. Halstead’s Klout score is 70, second to Corcoran. “I don’t care about how many followers I have,” said Leone, who oversees Halstead’s social media efforts. “I want my followers to be willing to engage in my product. To like it, share it, care about it. That is telling me how well I’m doing my job.” All of Halstead’s social media initiatives are executed inhouse, split among a 26-member marketing and technology team, Leone said. “We have 1,100 foot soldiers in the form of agents,” he added, saying that training brokers to use social media well has amplified Halstead’s reach. Halstead may also experiment with video-sharing tools such as Twitter’s Vine and Instagram’s video feature, which allow users to post very short videos (6.5 seconds and 15 seconds, respectively) and share them with their followers. Leone said, however, using the apps would require a break from the firm’s strategy of only putting out professionally produced videos with high production value.

Citi Habitats Citi Habitats has a relatively small presence on the major social media platforms — it has less than 14,000 Facebook page likes and under 2,000 Twitter followers. But it’s taken an interesting approach, focusing more on being a New York City guide than on publicizing its listings. Its pages often discuss tips on where to dine, share city-related trivia and aggregate real estate and neighborhood-related news. Its Klout score is 45, and it has just started establishing a presence on Pinterest. In December, Citi Habitats partnered with apartment-search marketplace RentHop. The move allowed renters to see the real-time locations of Citi brokers and property managers who are available to show apartments. A spokesperson for Citi Habitats declined to comment.

Douglas Elliman Compared to industry leaders Corcoran and Halstead, Elliman is a laggard when it comes to social media. The firm has developed a large following on Facebook, with over 33,000 likes, but posts less frequently than Halstead and Corcoran, and gets considerably less interaction in the form of likes, comments and shares. On LinkedIn, it has close to 12,000 followers, but doesn’t post daily. Meanwhile, on Twitter, it has less than 4,000 followers, and its tweets consist mostly of publicizing its own listings, news about the firm and media mentions. Elliman’s Klout score is 54. Over the last two years, Elliman had prioritized expanding the business into new national markets and growing its new development arm under Susan de França, Elliman spokesperson Ashley Murphy said. “We do feel that a strong social media presence is integral to our overall marketing strategy, but we want to ensure that our overall marketing and branding efforts for the entire company drive our social media, and not vice-versa,” Murphy said. “Now that we’ve got some other things in place, we’re really hunkering down and putting down some serious resources on social media.” In April, Elliman hired former Citi Habitats marketing executive Joshua Ferris to be its first dedicated director of social media, but he left for real estate technology company Nestio just four months later. Murphy declined to comment on Ferris’s departure but said the firm is close to hiring his replacement.

Coldwell Banker Bellmarc Group Out of the five biggest firms, Coldwell Banker Bellmarc currently has the smallest presence on social media, with just over 1,650 followers on Twitter and less than 800 Facebook fans. Its Klout score is 33, and its content consists mainly of its own listings. To be sure, it’s only been a few months since the Bellmarc Group became a part of the national Coldwell Banker franchise and acquired rental firm AC Lawrence, a merger that made it one of the city’s five biggest firms. Anthony DeGrotta, co-CEO of the newly merged firm, said that its new website, which will launch this month, “would be totally engaged with social media platforms.” Agents will have video biographies on the site, which can be sent to potential clients, DeGrotta said. The site will also feature a “meet the neighbors” section, where neighborhood residents will be able to share their own videos.

www.TheRealDeal.com March 2014 39

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“Facebook drives engagement and is a one-stop shop for focus grouping. Twitter is really effective for sharing news and driving traffic, and Instagram is great for visual content,” such as listings. 10 real estate–related Twitter accounts to follow By Hiten Samtani If used correctly, Twitter can be an important way to share real estate news and trends while building one’s brand. Here are 10 accounts that get it.

@BobKnakal Robert Knakal, chairman of Massey Knakal Realty Services Insight into the commercial market from one of the city’s top multi-family brokers. @JedKolko Jed Kolko, chief economist at Trulia Tweets about the national real estate landscape and shares market trends and original research. @reneefishman Renee Fishman, Halstead Property broker Tweets on real estate trends. Has the highest Klout score among Halstead brokers. @1adriannoriega Adrian Noriega, Core broker Tweets on real estate news, new development, market trends. @StanHumphries Stan Humphries, chief economist at Zillow Tweets on housing market trends. @realcapital Real Capital Analytics Tweets on commercial property investment trends, shares original market research. @IDollyLenz Dolly Lenz, super-broker Tweets on national market trends and luxury real estate. @VishaanNYC Vishaan Chakrabarti, partner SHoP Architects, real estate professor at Columbia University Tweets on architecture, urban planning, affordable housing. @stevecuozzo Steve Cuozzo, real estate columnist for the New York Post Tweets on New York commercial real estate news. @kyedki Kyle Kimball, president of New York City EDC Tweets on city planning issues, startups and politics.

40 March 2014 www.TheRealDeal.com

Elizabeth Kosich, Core “Social media engagement seems to me a very moody exercise,” said Shapiro, who acknowledged that the firm has tried various strategies to boost its audience, including advertising. “We posted about everything real estate under the sun and have had at times 300 likes per share and at times none,” he said. “It’s very unpredictable and very inconsistent.” Shapiro said that Nest Seekers is shifting from building a following to increasing engagement. “We are currently developing interactive campaigns and producing original content that will be released on social media to further engage our following,” he said. It’s likely that most of the major firms supplement their organic growth with advertising, but have higher levels of engagement than Nest Seekers.

Law and order The state Department of State’s new guidelines for advertising, which kicked in at the start of this year, make it trickier for firms and brokers to engage in social media. Each advertisement — Facebook and Twitter posts fall under the DOS’s definition of advertising — now requires a lot of legal disclosure. But the limited space afforded by social media channels, like the 140 characters per tweet allowed on Twitter, makes it difficult. “It’s really kind of been a head-scratcher for firms to figure it out,” Core’s Kosich said. Core has come up with an interesting solution: a link with all the required disclosure information that’s attached to every tweet. Kosich said the link complies with the new regulations, while still staying faithful to the spontaneous and snappy nature of social media. Other firms, such as City Connections Realty, are doing “spot checks” of agents’ Twitter and Facebook accounts, City’s CEO David Schlamm told TRD in June. And Rutenberg Realty has hired employees to check every social media page associated with the firm, according to co-founder Kathy Braddock.

Search over social? Though several residential brokerage sources ranked social media among their top marketing priorities for 2014, Jared Seeger, founder of real estate marketing firm Knightsbridge Park, said that for new luxury development projects, returns on social media simply don’t justify the investments. Seeger’s clientele, which includes top-drawer developments such as Tribeca’s 56 Leonard, 345 Meatpacking, 432 Park Avenue and the West Village’s Printing House, often “make a concerted effort to not do something with social,” he said. “They’re just not convinced from a branding perspective that it’s a good way to go,” Seeger said. He added that “search marketing,” or ensuring that projects hit the top of searches on search engines like Google, offers a better financial return. Data from Knightsbridge Park provided to TRD on 20 of its clients’ high-end projects shows that Internet searches accounted for over 47 percent of web traffic, compared with only 0.83 percent from social media. In addition, searches accounted to 53 percent of “conversions” — defined as a user requesting further information about a project — while social media only accounted for 3.7 percent. At Printing House, search marketing generates about 75 percent of total website visits, while social media marketing brings in about 0.2 percent. “Liking Hermès or Louis Vuitton on Facebook is a tenuous link to being in the market for a multimillion-dollar condo,” Seeger said. “Search is about making yourself as visible as possible, so it’s much less obtrusive. There’s more trust in people being able to find you, versus delivering a pitch.” But Nicole Oge, a senior vice-president of marketing at Town Residential, said regardless of whether people are currently able to afford to buy a luxury home, it is worth engaging them because they may become a buyer in the future. “Exclusivity should not be synonymous with luxury,” she added. TRD

Commercial firms get social LinkedIn is platform of choice for top commercial shops

By Hiten Samtani ommercial firms are embracing social media at a slower pace than their residential counterparts, and tend to focus their efforts on different platforms when they do log in. CBRE Group, Jones Lang LaSalle, Cushman & Wakefield and Newmark Grubb Knight Frank, the four biggest commercial leasing brokerages in New York City, all maintain a presence on Facebook and Twitter, but LinkedIn is the platform of choice for the firms, reflecting its more professional focus. CBRE, for example, has over 133,000 followers on LinkedIn, compared with about 10,000 likes on its Facebook page. Jones Lang LaSalle has more than 137,500 LinkedIn followers, but just a little over 3,200 on Facebook. Cushman has upwards of 75,500 followers on LinkedIn

but under 2,900 on Facebook. Newmark has just under 7,000 followers on LinkedIn and about 1,100 on Facebook. Cushman started its social media efforts in 2009 with a single Twitter account, and now has more than 60 Twitter accounts for its offices around the globe, multiple Facebook pages, and a YouTube channel, along with its LinkedIn page. All of its social media accounts are managed by its global marketing team, said Cushman spokesperson Cara Chodash. CBRE shares mostly industry news and its own research and analysis. Jones Lang LaSalle likewise posts market trends and industry news, but also shares more general content. Before the Super Bowl, for example, Jones Lang LaSalle executive chairman and former NFL player Roger Staubach posted a video on Facebook with his predictions for the game. TRD

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Real Estate

and

Social Media

Social media’s

office space blitz A ranking of the tech firms — from Twitter to LinkedIn — that have inked the biggest Manhattan office leases

Which social media companies tOOK the most NYC office space IN THE PAST YEAR? rank

Tenant

1 2 3 4 5 6 7 8

Street Address

Sq. Ft. Leased

Effective Rent

245-249 West 17th Street

144,000

Low $60s

770 Broadway

98,570

Low $60s

200 Fifth Avenue

57,691

Low $50s

125 Park Avenue

52,481

Low $50s

620 Sixth Avenue

51,958

Low $50s

114 Fifth Avenue

38,580

Low $60s

350 Fifth Avenue

37,186

Low $40s

35 East 21st Street

20,000

Low $60s

Source: Data from CompStak. Includes Manhattan office leases, subleases and expansions that occurred between January 2013 and mid-February 2014.

By Chris Cameron ere is something to tweet about: tech and social media office leasing took off in 2013, with the top five Manhattan deals for social media adding up to more than 400,000 square feet. Established social media brands led the way, with Twitter and Facebook inking deals estimated to be worth more than $150 million combined, according to real estate data provider CompStak. Tech and social media companies “are not looking for the perfect glass-and-steel building,” said Newmark Grubb Knight Frank’s vice chairman Brian Waterman, who represented the Blackstone Group in one of last year’s biggest tech deals, with Yahoo. “They want to be located in neighborhoods where their employees will be happy spending long hours.”

The top three It is no surprise, then, that all of 2013’s top social media deals took place in the café-, bar- and restaurant-heavy neighborhoods of Chelsea, the Flatiron District and Noho. The biggest deal came from Twitter, which leased 144,000 square feet in private equity firm Savanna’s 245-249 West 17th Street, between Seventh and Eighth avenues in Chelsea. In 2012, Savanna paid $76 million for the pair of buildings, which total 284,000 square feet. Announced in January 2014, the 10-year lease for the micro-blogging site, is worth an estimated $86 million, according to CompStak. The deal was a big win for Savanna because Twitter was also reportedly considering Edward Minskoff ’s new spec tower 51 Astor. However, in late December, IBM’s Watson Group — the tech giant’s incubator for 42 March 2014 www.TheRealDeal.com

entrepreneurs and developers — nabbed the space Twitter was considering at 51 Astor, taking 118,435 square feet worth approximately $92 million. “I think what we are seeing in this sec-

The third-largest deal in the sector last year came from Buzzfeed. The promulgator of quirky news and memes signed a 57,691-square-foot deal in tech-dense Midtown South. The firm’s new space, located

accommodate an expansion or one that has a good amount of tenant turnover. For instance, when the social-media-news blog Mashable upgraded its office space early this year, it took just over 38,000 square

tor is that supply is getting very tight,” said Newmark’s David Falk, a member of the team that represented Savanna in the Twitter deal. “There is a finite supply of tech-friendly buildings in Midtown South and small tech companies that you have never heard of are taking 30 to 40,000 square feet.” Among that wave of tech firms with little brand recognition, AppNexus, Mediaocean, Adap.TV, Infor and xAd all signed sizable

at 200 Fifth Avenue between 23rd and 24th streets, is a two-year sublease from high-end jewelry retailer Tiffany. Buzzfeed previously occupied about 24,000 square feet at 54 West 21st Street, a building owned by Olmstead. Meanwhile, the socially integrated digital-music-streaming platforms Spotify and Pandora also inked big deals in Manhattan. Spotify expanded by 51,958 square

feet at L&L Holding’s 114 Fifth Avenue in Chelsea — a building with approximately 240,000 square feet still available for lease. The website, which was founded in 2005, moved from 304 Park Avenue South. “Social media companies tend to have highly aggressive growth strategies, so finding a property where there is room for expansion is just as important as rent,” Newmark’s Falk said. “Ideally, social media firms want outdoor recreational and lounge space, some kind of branding on the building, and a neighborhood where their employees can interact with employees from other firms. But the key to leasing social media clients is having an orderly growth plan in a building.” Falk added that some firms will lease additional space and then sublease it, so they can manage their growth. Other firms will go so far as to lease excess space and warehouse it in anticipation of future expansion. On the smaller end of the leasing spectrum, LinkedIn and Tumblr also signed deals in Manhattan last year. LinkedIn expanded its operations in the Empire State Building by roughly 37,000 square feet, bringing its total space up to nearly 110,000 square feet. And the blogging site Tumblr expanded its lease by approximately 20,000 square feet, for a total footprint of 50,000 square feet in Centaur Properties’ 35 East 21st Street, in Midtown South. Some in the industry had speculated that Tumblr might move to Yahoo’s offices, fol-

“Social media companies tend to have highly aggressive growth strategies, so finding a property where there is room for expansion is just as important as rent.” David Falk, Newmark Grubb Knight Frank leases in Manhattan last year, according to CompStak data. And sources told The Real Deal that several desirable, publicly traded tech brands like Google and eBay are still on the hunt for Manhattan office space. Meanwhile, the second largest social media deal of last year came from perhaps the most ubiquitous firm in the game: Facebook. Facebook, which had also been eying 51 Astor, took 98,570 square feet for 10 years in Vornado Realty Trust’s 15-story 770 Broadway in Noho. The value of the deal is estimated at $67 million, according to CompStak.

feet in RXR Realty’s 620 Sixth Avenue, for a total of 123,000 square feet. Pandora signed a slightly bigger 52,481-square-foot lease in the Grand Central area at 125 Park Avenue. The two deals were valued at $31 million and $27 million respectively, CompStak data shows.

Small, but growing Most social media start-ups are, of course, looking to become the next Twitter or Facebook. As a result, sources say many of the smaller social media firms shopping for space are looking for a building that can

Continued on page 116

www.TheRealDeal.com March 2012 00

Real Estate

and

Social Media

Getting socially smart

Four innovative ways NYC real estate pros have used social media

By Hiten Samtani s firms get more fluent in using social media, some are getting creative, moving beyond simple posts of listings and self-promotion. Here are four examples of New York City real estate firms making innovative use of social media.

Look up New York: Town Residential For three months last year, Town released a daily photo of an iconic New York City building, such as the Dakota at 1 West 72nd Street, with some trivia about it. The firm hired a professional photographer who took more than 90 photographs of wellknown buildings, including shots of the architectural detail. Town’s followers contributed by submitting photos through Twitter and Instagram using the hashtag #LookUpNY. The photos were then tagged on an interactive map and entered into a contest, and the winning amateur photo was featured in a New York Magazine advertisement. Nicole Oge, Town’s senior vice president of marketing and the creator of the campaign, said the firm wanted to teach New Yorkers “something new about their city.” Overall, the firm said the campaign collected over 4,000 photos from more than 3,000 people and generated 3 million impressions across Instagram and Twitter. It also increased traffic to Town’s website by 26 percent over the course of the campaign.

Insta-selling: Eklund & 11 North Moore Douglas Elliman broker and “Million Dollar Listing” star Fredrik Eklund launched sales for the luxury condos at 11 North Moore in October not with a press release, but with a single photo on Instagram. “HERE WE GO!” read the caption below the rendering of the 18-unit building. “The most iconic new building in Tribeca and sales start … NOW!” He said 50 percent of the building sold in less than a week “directly from it.” Eklund took a similar approach with the VE Equities’ 24-unit condo project at 250 Bowery. And he said he sold the penthouse at 101 Warren from a Facebook post before it actually was listed. The Elliman broker has over 75,000 Instagram followers, who he described as “high-net-worth-bicoastal viewers of the show,” making them the perfect target demographic. Eklund does not shy away from mixing personal and professional posts on Instagram. He often posts photos of himself traveling with his husband, alongside photos of projects he’s selling. “Social media is sharing experiences,” he said. “If it’s not truthful, it’s just a mess.”

The industry elder blog: Frederick Peters Four years ago, Peters started writing a weekly blog on Warburg’s website in which he opines on New York’s real estate industry. Peters often discusses recent books he’s read or personal

experiences and ties them to real estate lessons. “I just saw that there was an opportunity in the marketplace to try to provide some kind of consistent, non-self-promotional insight,” he said. The blog now racks up about 1 million page views per year. And apart from the respect and credibility it gives Peters and Warburg, it has business benefits. “It has absolutely led to business for my agents. They all send it out,” he said. “It also keeps us fairly high up there with Google.”

Guide for New Yorkers: Bond New York In advance of Valentine’s Day, Bond posted an entry on its Bond Magazine blog titled “How to date like a New Yorker.” Bond agent Sara Kyle interviewed experts from online dating websites Match.com and PlentyofFish.com to come up with some best practices on how to approach online dating in the city. The brokerage has also tackled topics like “How to Feng Shui your home like a New Yorker,” part of a series of posts with tips on various topics. Kelly Kreth, who handles PR and social media for Bond, said “we try to gear what we’re saying on social media to what’s trending” on Twitter. The firm tries not to push its listings on platforms such as Twitter and Facebook, Kreth said. Its “how to” series accounted for the most page views since its blog was launched six months ago. TRD

Standout social media start-ups Some new social media–driven real estate companies making waves

By Hiten Samtani t’s not just brokerages that are cashing in on social media. A whole ecosystem of startups is emerging to meet the needs of the real estate industry, and many of them are able to generate significant revenue and raise enough funds to be taken seriously. Here are four standouts:

BuzzBuzzHome

Founded in 2009, BuzzBuzzHome has information on every new residential development in New York, according to Cliff Peskin, a company co-founder. Similar to Facebook or Twitter, BuzzBuzzHome visitors can “follow” a new development to get pricing updates, new renderings, construction milestones, and other information. “Crowdsourced reviews help people make a decision before buying a $2 million condo,” Peskin said. For a $900 monthly fee, developers can feature a building in a prominent place on the website. The self-funded, Torontobased company has revenue in the $5 million range, Peskin said. “It takes the pressure off the developers to maintain a Facebook page or a Twitter account for the building,” said Jared Seeger, founder of Manhattan-based digital marketing firm Knightsbridge Park. “They’re taking social and layering it on top of the new development directory.”

CO Everywhere CO Everywhere connects mobile devices with a wealth of neighborhood information from big data and social media.

App users can create a real-time hyperlocal newsfeed based on more than 1,000 sources — including Facebook and Instagram posts, Groupon deals, data on crime and schools, Eventbrite events and Yelp reviews — as well as real estate–specific data from websites like Trulia and Zillow. “You get to see what’s really happening in the block,” founder Anthony Longo told TRD in August. “We will give you the ultimate experience by pooling in every social event.” In January, the Boston-based company raised $6 million from investment firmMorningside Group. It previously raised money from investors including Stephen Kliegerman, the president of Terra Development Marketing, which oversees sales and marketing of new developments for Halstead Property and Brown Harris Stevens. Halstead and BHS have no ties to CO Everywhere.

MyCoop MyCoop is a social network exclusively available to residents of a particular building. The Manhattan-based site even vets phone numbers and billing addresses before granting access. It currently hosts more than 150 buildings citywide, including the Ansonia at 2109 Broadway. Alex Norman, who launched the site in November, said it helps residents communicate with their neighbors — whether to organize social events like potluck dinners or to solve building issues such as bedbugs and poor maintenance. Norman plans to monetize the site in coming months by offering subscriptions for landlords and property managers

looking to interact with tenants. Landlords who sign up will be able to nip building issues in the bud, he said, and will also be saved the hassle of routine inquiries, as residents step in to counsel each other on the network. MyCoop also hopes to land advertisers like retailers Ikea and Home Depot. Real estate agents and brokers may also soon be able to post to the network, for a fee. He said the company has raised about $175,000 from investors so far.

Honest Buildings Launched in March 2012, Manhattan-based Honest Buildings is an online network that connects developers and landlords with engineers, architects, designers and other vendors. CEO Riggs Kubiak described at as a “LinkedIn for the real estate industry.” To use the network, a developer or landlord submits project details into the “HB Match” online platform, along with criteria for what they’re looking for in a vendor. The site then searches for matches based on those criteria, and produces a short list of possible vendors. Analysts check the references of those on the list, and then introduce them to the client to kick off the bidding process. Over $85 million in business has been generated in the New York area through the platform, Kubiak said. Honest takes a commission, typically between 3 and 5 percent, from vendors if they’re hired. The company has raised just under $11.5 million, from investors including Joshua Kushner’s Thrive Capital. TRD www.TheRealDeal.com March 2014 43

Prices rising at the end of the tunnel Second Avenue subway progress gives bump to Upper East Side property values By Tom Acitelli n mid-2013, Elaine Diratz, senior managing director of Corcoran Sunshine Marketing Group, noticed that the one-bedroom condos at 515 East 72nd Street, formerly known as Miraval Living, were selling briskly. There were more than 70 closings between summer 2012 and summer 2013 — about half the building’s 142 one-bedrooms. Diratz, whose firm was handling the marketing of the 329-unit conversion near the East River for developer Acheson Doyle Partners, soon put her finger on the reason behind the quick pace of sales: major milestones in the construction of the Second Avenue Subway, a little more than two blocks away. The milestones included some of the last subterranean blasts for the first phase of the project, from 63rd to 96th streets, which is scheduled to debut by the end of 2016. Sales were lagging behind until it became clear the subway was really getting closer to completion, Diratz said. “I think the savvy one-bedroom buyers recognize the potential for the appreciation for these one-bedrooms by having that Second Avenue line there.”

44 March 2014 www.TheRealDeal.com

The MTA says the first phase of the new Second Avenue Subway is on track to start up by December 2016.

The Second Avenue Subway — which will eventually run 8.5 miles from 125th Street to Hanover Square — has been on the drawing board for decades, variously championed by politicians, transit advocates and urban planners. Commuters, tired of crowding onto the overstrained Lexington Avenue line, the only other subway serving the Upper East Side, were among the most vocal in pushing for the new “T” line, as it’s dubbed. And the real estate industry, of course, has a vested interest in the project coming

to fruition. For the first time, developers and brokers are reporting a spike in buyer and investor enthusiasm for developments east of Third Avenue, because of the recent progress on the Second Avenue Subway. They say property values on and around Second Avenue, as well as prices for condos and coops, could increase more than 20 percent because of the new line. Prices on the Upper East Side east of Third Avenue have traditionally lagged those west of the avenue and closer to Central Park. The

lack of a subway line hasn’t helped. “The whole problem with Second Avenue traditionally is that it’s been too far away from the subway — that’s why buyers have shied away,” said Richard Steinberg, a broker at Warburg Realty who is doing deals along the corridor. This dearth of a subway has not only translated into traditional buyer reticence: It’s meant lower condo and co-op prices for the Upper East Side east of Third Avenue. In 2013, the average sales price of an Upper East Side condo from Third eastward was $1.57 million, according to an analysis from Pete Culliney at real estate data provider CityRealty. Meanwhile, for the Upper East Side overall, what Culliney calls “core East Side,” it was $2.34 million. The average price differences were just as pronounced for co-ops. The first phase of the subway will undoubtedly close the gap, brokers and developers say. While it’s unlikely Second Avenue — or avenues even farther east — will ever overtake swanky Fifth and Park in terms of price, they could more rigorously compete Continued on page 112

www.TheRealDeal.com March 2012 00

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Brokerage Battles

Kicked out of Town? A look at the dispute between Town Residential’s two top guns, Andrew Heiberger and Joe Sitt, as they battle for control of the brokerage

VS Andrew Heiberger, left, and Joe Sitt are battling over the direction of Town

By Katherine Clarke hile the leading residential brokerages like Douglas Elliman and the Corcoran Group held low-key holiday parties in 2013, three-year-old firm Town Residential went all out with a glitzy 800-person bash at the sleek new Meatpacking District restaurant Tao Downtown, where guests helped themselves to an open bar and passed hors d’oeuvres. The party was just the latest in a string of upscale events hosted by Town. Renting the space for an evening can cost in excess of $150,000, depending on the time of year and the number of guests. Indeed, for the last three years, the firm, headed by founder Andrew Heiberger, has been the cool new kid on the real estate playground. It’s opened 10 state-of-the-art Manhattan offices, all in prime locations, and recruited agents from other firms with generous commission splits. It’s also offered concierge services, health insurance and even free candy for its brokers, served in each office’s communal areas known as “town squares.” Other companies simply have not been able to keep up with the flashy offerings at

46 March 2014 www.TheRealDeal.com

“It’s commonly known in the industry, and Thor is well aware, that it takes between 18 and 36 months for an office to stabilize. Until the office stabilizes, it will drag on cash flow. In 2014, the company is at a tipping point. The company was about to make millions and millions of dollars in profit in 2014.” Andrew Heiberger

“We will not be distracted by Mr. Heiberger’s wrong-headed and selfish litigation, and will stay focused on Town’s ascent to the top of the residential brokerage business.” Sitt spokesperson the new firm, sources said. “For the first time in history, we all had to deal with the nuisance of a competitor that seemed to not need to be profitable,” said one chief of another brokerage about Town’s rise. “I’m sure this has been a stone in every firm’s shoe since they opened.” In recent months, however, cracks have surfaced behind the firm’s shiny façade, as Heiberger and Town’s equity partner Joseph Sitt of international real estate investment and development firm Thor Equities have publicly locked horns. In late January, the situation came to a head when Sitt refused to renew Heiberger’s contract as CEO. Sitt claimed that Heiberger had failed to meet the financial

targets the two agreed to when Thor first invested in 2011, and that he had not seen any return on his investment to date. Heiberger didn’t waste any time before heading to court. And late last month he was awarded a temporary restraining order, preventing Sitt from locking him out of Town’s office, making business decisions without him, and selling his 50 percent stake in the firm. Sitt allegedly claimed the right to sell Heiberger’s stake at “book value,” which would presumably be far less than what the company would sell for on the open market. As of press time, however, Heiberger’s dismissal as CEO still stood. That will likely be decided in court. The two sides

will be back in front of a judge on April 8, if they don’t reach a settlement sooner. While the sudden upheaval at the company appears to have shocked many at Town, others said the showdown was inevitable. They attributed it to the fact that revenues were lagging behind the cash being plowed into the company to fund its rapid growth and flashy amenities. “I’m surprised that people are surprised,” said Eric Barron, CEO of Keller Williams NYC. “That’s a company that’s surely not leading with revenue. They’re attempting to buy the market. The car looks sexy, but once you look under the hood … what’s real and what’s not real?” Continued on page 48

PHOTOGRAPH OF SITT FOR THE REAL January DEAL BY MAX DWORKIN www.TheRealDeal.com 2011 25

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Brokerage Battles The economy of Town Heiberger launched Town with a bang in 2010, predicting that it would become the city’s largest residential firm, overtaking market leaders like Corcoran and Elliman. And just three years after Town launched, the company has 600 brokers and its 10 offices. In addition, the firm claims it closed $1.5 billion in sales in 2013. When the firm launched, Heiberger’s bravado could not be discounted. In 1994, he founded rental giant Citi Habitats, selling it 10 years later to NRT, Corcoran’s parent company, for a reported $49.6 million. He’s also developed residential projects, having partnered with Sitt on the Greenwich Club Residences at 88 Greenwich Street in the Financial District, a new construction condo, and with another partner at One Rector Park, a 174-unit condo conversion in Battery Park City. The Rector Park project was one of the fastest-selling new developments of 2012. In 2011, a year into his new venture, Heiberger enlisted Sitt as an investor to help capitalize Town’s rapid growth model. At that point, Town already had four offices and Heiberger had invested around $3 million of his own money in the company, according to legal documents he filed last month. Sitt committed to investing $8 million over time. In a termination letter issued to Heiberger in January, Sitt claimed to have invested $10.4 million so far. Heiberger, meanwhile, contributed $5.87 million, according to his court documents. Beyond his friendship with Heiberger, it’s unclear why Sitt wanted to be involved in residential brokerage, which is generally considered a low-margin business in comparison with the giant commercial investment deals Sitt has traditionally been involved in. Sitt may have seen the brokerage business as a potential — and moderately profitable — hobby, sources said. “Some people look at owning a real estate brokerage firm as fun, like owning a restaurant or a sports team,” said Donna Olshan, CEO of boutique brokerage Olshan Realty. The high end of the business does have a glamorous element, with celebrity homes and sleek new condos generating buzz. “Who cares about commercial space in terms of cocktail conversation?” said Paul Purcell, co-founder of Rutenberg Realty. “Have you ever been to a party where someone said, “‘Oh, did you hear? Citibank just took 100,000 square feet on this floor of a building?’ No!” Initially, Sitt had expected to recover his capital investment within three years, but later extended that time frame after he and Heiberger revised their growth goals, according to Heiberger’s claims. But Sitt still expected to see distributions within the three-year time frame, according to his termination letter to Heiberger.

48 March 2014 www.TheRealDeal.com

“It’s commonly known in the industry, and Thor is well aware, that it takes between 18 and 36 months for an office to stabilize,” Heiberger told TRD. “Until the office stabilizes, it will drag on cash flow. In 2014, the company is at a tipping point. The company was about to make millions and millions of dollars in profit in 2014 before all of these problems. We projected revenues in excess

coordinate move-ins. In addition, Town contributes $150 a month toward brokers’ health insurance premiums. Unlike at some other firms, brokers are not required to pay desk fees. The company also went all out on its office space. In September, it opened its 10th outpost at 446 West 14th Street in the Meatpacking District, inking a 15year deal for the 7,100-square-foot space,

brokers (see related story on page 66.) But the company never attracted as many mega-brokers as Elliman and Corcoran have, and Price and LaRocco have since departed for Elliman. In addition, the firm may have offered especially favorable commission splits to reel in the mega-brokers they did get, sources said, hoping that they would serve as a draw for other high-production agents. “They did as well as you could hope to do, coming in as a new name,” said one brokerage head who declined to be named. “They recruited some high-profile agents, but they are loss leaders that were bought and paid for. The firm retains small margins on those agents, and those agents are doing the majority of the business.”

Cash crunch

Town’s Wendy Maitland. Right, Town’s new president and COO, Jeff Appel.

Patty LaRocco left Town for Elliman last month. Right, Reid Price also left Town for Elliman.

of $101 million in 2014.” A spokesperson for Sitt, however, said that Heiberger’s termination was more than justified. “Mr. Heiberger knows full well that his agreement provided for his termination in numerous events — many of which occurred — and it is unfortunate that he has chosen to go down this path,” he said. “We will not be distracted by Mr. Heiberger’s wrong-headed and selfish litigation, and will stay focused on Town’s ascent to the top of the residential brokerage business.”

Unprecedented perks From its founding, Town has aimed to attract the crème de la crème of New York City brokers with unheard-of perks, such as nutritionists, florists and reimbursements for gym memberships. The firm also provides brokers with access to a concierge called Luxury Attaché — the same company that caters to Google employees and to the residents of trophy residential tower One57 — to help set up transportation for apartment hunting, arrange catering for open houses, and

which has a private roof deck. Its corner storefront at 337 West Broadway in Soho features what the brokerage calls an “international water bar” — with bottled water from around the world. The vast spending that has come to light through the court documents has shocked some in the industry, particularly since Town didn’t have a property management platform, or any other sources of revenue beyond sales and rentals. “They’ve been spending money like drunken sailors, and that’s not necessarily a bad thing,” Purcell said. “Anyone that wants to build a brand has to have so much in start-up costs, and then a projection as to when they expect to break even. It could be five years, or even 10 years, if someone’s in it for the long haul.” Town succeeded in attracting some significant talent, including Wendy Maitland and Reid Price, formerly of Brown Harris Stevens; Danny Davis, a longtime Citi Habitats star; Patty LaRocco and Robert Dvorin, two Elliman power brokers; and Ari LeFauve and Lyon Porter, two of MNS’ most highly ranked resale

Cash-flow problems appear to have surfaced at the firm in recent months. The need for repeated cash infusions may have resulted in tension between Sitt and Heiberger, sources said. “I think their plan was to be able to aggressively pursue opening up a large number of offices and create a network, and that they pushed the envelope a little bit to do it with capital provided by Mr. Sitt,” said Neil Binder, a principal at Coldwell Banker Bellmarc. “Now the problem is that they’ve set up the environment, and now what do they do?” In February 2013, the firm allegedly had only $106,678 in available cash, while it had $1.94 million in accounts payable, according to a cash-flow summary included in legal documents last month and sent to Heiberger by Town’s controller. In order to satisfy those expenses, which included $400,000 in payroll, Heiberger claimed that Sitt issued a capital call for $3 million, giving him 10 days to raise his share. He said he raised the money, but that the move was an attempt by Sitt to push him to default and force him to relinquish part of his stake in the firm. Sitt denied that, saying it was Heiberger who issued the call unnecessarily because payroll had already been met. In his termination letter to Heiberger, Sitt also alleged that the former CEO paid for unapproved expenses, including a personal driver he charged the company for retroactively without permission. He also accused him of making financial commitments to employees, brokers and vendors without Thor’s approval, and making plans to open new offices without informing Sitt. Heiberger denied Thor’s accusations, arguing that he made all financial information available to Thor. The duo’s initial agreement had called for Sitt to contribute 80 percent of the cash for capital calls, with Heiberger ponying up just 20 percent. But when the Continued on page 114

www.TheRealDeal.com December 2012 47

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

Top-dollar deals,temporary digs

High-end rental market sees six-figure deals and glut of listings with price tags of $100,000 a month

NYC’s priciest rental deals in the past year Rank

Address/type

Price per mo.

Broker/Firm

1 TIE

520 Park Avenue, Trump Park Avenue (PH20)

$100,000

Michelle Griffith, Trump International Realty

1 TIE

520 Park Avenue, Trump Park Avenue (PH21)

$100,000

Michelle Griffith, Trump International Realty

100 East 50th Street, Towers of the Waldorf Astoria (31H and 31T)

$92,500

Margaret Bay, Brown Harris Stevens

10 East 75th Street (townhouse)

$80,000

Heather Sargent, Corcoran Group

132 East 62nd Street (townhouse)

$75,000

Audrey Adams, Trump International Realty

6 TIE

55 Warren Street (PH)

$60,000

Robert Dvorin, Ian Wolf, Eben MacNeille and Young Lee, Town Residential

6 TIE

1 Central Park South, The Plaza (1801)

$60,000

Ido Berniker, Mercer-Partners

6 TIE

70 West 45th Street, Cassa Hotel & Residences (PH1)

$60,000

Ashley Teitel, Nest Seekers

6 TIE

70 West 45th Street (PH3)

$60,000

Eleonora Srugo and Neal Sroka, Douglas Elliman

15 Central Park West (8B)

$59,000

Vince Rocco and Denise Rosner, BLU Realty Group

151 East 58th Street (34B)

$58,000

Victoria Shtainer and Gabriel Zapata, Douglas Elliman

807 Park Avenue (PH)

$57,500

Tim Desmond and Alexa Lambert, Stribling & Associates

6 West 9th Street (townhouse)

$55,000

Patty LaRocco, Town Residential

50 Gramercy Park North (PH)

$50,000

Tim Cass, Corcoran Group

131 East 66th Street (10D)

$45,000

Debra Harounian Peltz and Kim Harounian, Sotheby’s International Realty

Source note: Data was provided by StreetEasy and checked by TRD on Real Plus and with brokers. Deals took place between Jan. 1, 2013, and Feb. 7, 2014.

By Julie Strickland he tight inventory of for-sale residential properties, along with a glut of high-end homes going unused by their owners, is fueling a growing supply of luxury rental units in trophy buildings with prices of $100,000 per month or more. Not only is the high-end rental inventory available, but the activity in the sector is also robust — even if not all of the units are achieving their listing prices. That rental activity, sources say, is tied to the recent action in the high-end sales market, where record deals include last month’s closing of the $50.9 million sale of the penthouse at Walker Tower, and last year’s $42 million condominium purchase at 18 Gramercy Park by Houston Rockets owner Leslie Alexander. “There is a certain ebb and flow” between the sales and rental markets, said Jonathan Miller, president and CEO of appraisal firm Miller Samuel. “If you see record high-end activity in the purchase market, then you’re going to very likely see record high-end activity in the rental market. They don’t operate in a vacuum,” he said. This month, The Real Deal compiled a list of Manhattan’s 15 priciest rentals for all of 2013 and through the beginning of this year. Using data from listings website StreetEasy, Real Plus and from brokers, what we discovered was that amid record-shattering co-op and condominium prices recently, the rental market was nearly as staggering. While no deals matched 2012’s priciest rental, at $135,000 per month, 2013 scored

50 March 2014 www.TheRealDeal.com

two six-digit rentals and a third deal which nearly hit that mark at $92,500 a month. In addition, as TRD reported in its latest Data Book, 2013 saw more than 10 Manhattan rental listings for over $100,000 per month, with the priciest asking $150,000 for a townhouse at 4 East 80th Street. However, only two ultimately rented for those six-figure prices. Both were

means there are limited options for properties to buy. Next are those who have the $70 million to spend on a new condominium in a building like 15 Central Park West, but would rather spend a lesser amount, preferring the stock market or other types of investment to real estate. And finally, there are the out-of-town-

One of two penthouses at Trump Park Avenue that rented for six figures

penthouse units at Trump Park Avenue at 502 Park Avenue, priced at $100,000 per month and listed by Trump International Realty’s Michelle Griffith. Each one has seven bedrooms and over 7,000 square feet. The ultra-high-end renters who opt for such properties, brokers said, generally belong to one of three camps. First are discerning homebuyers who need a temporary, yet suitably glamorous, crash pad while they look for a more permanent home. Many of those renters are being steered to lease for now because the inventory squeeze in the sales market

ers (both international and domestic) who spend a limited amount of time in New York, but want to live and entertain in the grandest possible style while they’re here. Many of the other top rental deals on the list were in trophy buildings. Those buildings included the Towers of the Waldorf Astoria, the Plaza at 1 Central Park South, and 15 Central Park West. “I think that the properties being rented are unique, and unique space is part of the math,” Miller said. “They’re not just paying these high numbers because they can afford to pay it

— they’re paying high numbers for unique properties that typically aren’t in the rental market.” On the flip side, Miller said pricey rentals offer luxury homeowners a lucrative cash flow source, particularly when the apartments are pieds-à-terre that are seldom occupied. He said those owners simply want their money parked in New York real estate but that the rental income serves as a bonus. Meanwhile, many high-end renters also come to New York for medical care and in other short-term rental scenarios, according to Margaret Bay, a longtime high-end rental agent for Brown Harris Stevens. Her $92,500 rental deal at the Waldorf was the third highest on the ranking. Bay said at the top of the market, renters are also often waiting for renovations to be complete on their permanent homes, relocating to New York to get their children into schools, or coming to New York for just a few months to spend time with their families. “I still think people are willing to spend it as long as the unit gives them what they need,” said Emily Beare, a CORE broker who had one of the year’s priciest rental listings with a $125,000-per-month five-bedroom at 15 Central Park West, a deal that came close but did not ultimately close. “When you have something very limited and unique, the value is there and people will spend it,” she said. TRD www.TheRealDeal.com January 2014 35

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By C. J. Hughes ousing advocates and nonprofit leaders praised Mayor Bill de Blasio’s latest batch of real estate–related appointees last month, saying they would start the march toward fulfilling his affordable housing campaign promises. Sources said the four new hires — Carl Weisbrod as chair of the City Planning Commission; Shola Olatoye as chair the New York City Housing Authority; Vicki Been, as commissioner of the Department of Housing Preservation and Development and Gary Rodney as head of the Housing Development Corporation — were strong picks to carry out de Blasio’s goal of creating 200,000 affordable units in a decade. “We’re optimistic that there’s Carl Weisbrod going to be a real plan, with real goals and a real commitment,” said Ted Houghton, the executive director of the nonprofit coalition Supportive Housing Network of New York. “It will be a challenge, but it’s eminently achievable.” Weisbrod, an industry vet with both public and private sec- Shola Olatoye tor experience, will have the most influence among the new hires on market-rate developers. That’s because City Planning shapes the city, through selling city land, granting approvals for development projects and rezonings. Under Mayor Edward Koch, Vicki Been Weisbrod, who co-chaired de Blasio’s transition team, headed the 42nd Street Redevelopment Project. He later led the city’s Economic Development Corp., the Downtown Alliance and Trinity Real Estate. He most recently served as a Gary Rodney partner at real estate consulting firm HR&A, whose clients include the Related Companies, Young Woo & Associates and SL Green Realty. Weisbrod starts his new job this month, a spokeswoman said. Meanwhile, as head of NYCHA, Olatoye — who most recently served as a top executive at Enterprise Community Partners, a nonprofit that syndicates tax credits for affordable housing developments — is inheriting an organization rife with financial problems. NYCHA, which oversees 400,000 tenants and 178,000 apartments, reportedly has a $60 million budget shortfall and needs $16 billion in capital repairs for its aged towers. Olatoye also previously worked at HR&A, serving as director. “Public housing helped people in my family. I want it to do the same in the future for others,” Olatoye said. Vicki Been, de Blasio’s pick as HPD

commissioner, is the former director of the Furman Center for Real Estate and Urban Policy at New York University. The agency administers the programs that pay for and build affordable housing. Been, who earned a law degree at NYU and clerked for Justice Harry Blackmun at the U.S. Supreme Court, is considered a landuse expert. Finally, de Blasio appointed Gary Rodney to preside over the Housing Development Corporation, the city’s affordable-housing financing arm. The son of Haitian immigrants, Rodney comes to City Hall from Omni New York, the firm co-founded by retired baseball slugger Mo Vaughn. Rodney previously worked at BFC Partners. Don Capoccia, a managing principal with BFC, declined to comment on Rodney’s hiring, but said de Blasio’s entire team “will do phenomenal work.” “If anybody can execute 200,000 units over 10 years, it’s them,” he said. If market-rate developers are uncomfortable with City Hall’s new affordable housing emphasis, a fear expressed during the campaign, they are not showing it. The Real Estate Board of New York, the industry’s trade group, is publicly backing the latest appointees. “This continues a string of exceptionally talented and knowledgeable individuals who will work with the mayor to steer our city moving forward,” REBNY said in a statement. “We look forward to working with [the appointees and] creating more affordable housing and an environment that will result in more good jobs.” The only major positions with direct bearing on the real estate industry that are still open are the commissioner of the Department of Buildings and the Landmarks Preservation Commission chair. Developers are closely watching to see who gets picked for both spots. Sources say Ronda Wist of the Municipal Art Society of New York, the design watchdog group, is being considered for the LPC position. Current Chair Robert Tierney has been at the helm since 2002. Capoccia said any delays making appointments will be overshadowed by actual changes the mayor makes in the city. “De Blasio will be judged largely by the physical improvements he brings about in the city,” Capoccia said. “I think he sees and understands that.” TRD www.TheRealDeal.com March 2010

PROFILE

Menachem Stark’s portfolio revealed In wake of murder, a tally of the developer’s properties — and his rise and fall Greenpoint

Menachem Stark, who was murdered in January Williamsburg East Williamsburg

239 Banker Street 69 units

Menachem Stark and Israel Perlmutter bought this Greenpoint manufacturing building in 2005 and converted it into residential rentals. Lenders sued to foreclose in 2009. The partners sold it in 2012 for $9 million.

Bedford-Stuyvesant Bushwick

Crown Heights Prospect Park

Northeast Flatbush

100 South 4th Street 74 units

315 Seigel Street 51 units

In one of their first buys, Stark and Perlmutter acquired this East Williamsburg property in 2001, but in 2009, lenders there sued to foreclose. However, a company affiliated with Stark and Perlmutter still owns the building.

Stark and Perlmutter converted this former

Williamsburg manufacturing

946 Bushwick Avenue 53 units

building into a residential rental. Their holding company,

The duo purchased this Bushwick building in 2005 for $3.6 million, but it fell into foreclosure. The deed was transferred in 2011 for no

which owns the building, is now in bankruptcy and the lender is claiming at least

$1.7 million is missing from a

money to a company controlled by

checking account the partners controlled.

Locations of properties owned by Stark and Perlmutter at market peak in 2008

By Adam Pincus wo months after the burned body of Brooklyn developer Menachem Stark was found at a gas station in Great Neck, L.I., the motive behind his murder remains opaque. Now law enforcement officials and lawyers are looking to the real estate portfolio Stark amassed during the last boom for clues. Sources say Stark and partner Israel Perlmutter owned around 1,000 apartment units. For this story, The Real Deal combed through city property records and the real estate database PropertyShark and identified 832 of those existing or planned units by address at 37 locations. The two bought most of those units and the development sites they sit on between 2000 and 2008 for more than $61 million, according to TRD’s analysis. The pair started selling and transferring most of those properties beginning in 2009, many of them to associates. In the immediate wake of his murder, investigators suggested Stark may have been involved in dubious foreclosure transactions with people he knew. But the NYPD did not respond to requests for comment last month. The largest apartment building that remains in the Stark-Perlmutter portfolio, 100 South 4th Street, a 74-unit Williamsburg rental, is at the center of a bankruptcy court dispute. The lender is alleging that more than $1.7 million is missing from a checking account that the pair controlled. The 39-year-old Stark was married with seven children and a member of the close-knit Satmar Hasidic Jewish community. He was abducted on Jan. 2 outside his Williamsburg office and his body was discovered the next day in a dumpster. As of late last month, police had not publicly identified any suspects. While members of the Hasidic community defended Stark,

Stark’s associate Abraham Bernat.

a slew of property violations quickly emerged, leading some media to depict him as a slumlord. Other sources told TRD he was simply a developer in over his head in a challenging market and a number of his properties had significant violations when he acquired them. Insiders told TRD that Stark and Perlmutter had a threepronged real estate strategy of buying old residential properties and fixing them up; buying industrial properties and converting them to residential rentals, and developing groundup apartment buildings. The duo, sources say, was one of roughly 20 small non-institutional groups who own at least 1,000 apartment units in Brooklyn. These groups typically buy, manage and resell properties with a combination of their own equity along with equity from friends, family and some larger investors. Stark and Perlmutter began slowly. They bought their first six properties between 2000 and 2003, including the 51-unit

Gallant and Jack Sternklar, is well-known in the Brooklyn multi-family world. Sources say that loan undoubtedly helped them acquire more financing. Between 2006 and 2008, they snapped up 17 properties for a combined $39 million, the most prominent of which was a package of buildings along North 9th Street in Williamsburg, TRD’s analysis found. However, Stark and Perlmutter became quick victims of the downturn. The two fell behind on mortgage payments and in 2009, lenders began filing foreclosure lawsuits. TRD’s review found nine foreclosure cases filed against at least 17 of their properties. To stave off those foreclosures, they filed for bankruptcy protection through their holding companies in at least six of those cases, the analysis found. After a four-year selling spree, only eight of their 37 properties remain under the direct control of partners, which now includes Stark’s estate, TRD found. (For a full list, see the story online.) However, an associate, and according to multiple sources, Stark’s brother-inlaw, Abraham Bernat, picked up at least 12 of those properties for $29.3 million, including 120 South 4th Street, a 20unit Williamsburg rental that he bought out of bankruptcy for $11.7 million, city records show. Bernat, who did not return a call seeking comment, served as an officer on several of Stark’s properties. Perlmutter could not be reached for comment. But Abraham Katz, an engineer who knew Stark for 15 years and who city records show lent him money on several buildings, said he was “a great guy and a sweetheart.” “In ’04, ’05, ‘06, everybody was ‘buy, buy, buy,’ ” Katz said. “They got caught by the banks. He was typical, it happened to all the big guys, but he was a little guy. He was a lovely guy.” TRD

TRD created a list of the dozens of properties Stark acquired in the run up to the boom. Police are now investigating whether his real estate was connected to his death.

54 March 2014 www.TheRealDeal.com

315 Seigel Street in East Williamsburg. In the next two years, however, they ramped up, diving into a hot market and acquiring 12 properties for more than $18 million combined. They also picked up a 20-year lease on an industrial building converted into residential units in East Williamsburg. In a move that likely boosted their credibility, in 2005 they obtained a $1 million loan from Galster Funding. The private lender, which is owned by veteran investors Stanley

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Top Firms

The big broker boost

TRD’s annual ranking of investment sales firms and commissions finds some brokerages surging ahead and others stumbling

By Adam Pincus n the last year, the number of New York City buildings sold with the help of a broker shot up significantly, according to an exclusive analysis conducted by The Real Deal. While the vast majority of prime Manhattan deals have historically been sold through brokers, that was not the case in the outer boroughs, where owners often sell through word of mouth. But in 2013, the portion of buildings sold using a broker rose to 86 percent citywide, from an estimated 65 percent the year before, TRD found. That was despite the fact that the total dollar volume of buildings sales declined slightly in 2013 from the prior year.

Top: CBRE brokers Darcy Stacom and William Shanahan. Above: The Park Lane Hotel at 36 CPS, which CBRE sold for $660 million.

This month, TRD reviewed more than 1,200 transactions (not including minority-interest sales) to determine which 30 firms brokered the highest dollar volume of deals in the city, and benefited the most from the shift toward more brokers. We also estimated how much each firm netted in gross commissions and, for the first time, looked at where firms concentrated their activity, as well as who dominated which boroughs. To do that, TRD compiled data provided by brokerages and obtained from

56 March 2014 www.TheRealDeal.com

NYC’s top investment sales firms, 2013 Rank

Brokerage

Dollar Volume

% Change from ’12

Est. Commission (in millions)

Eastdil Secured

$10.6 billion

51%

$50 to $55

CBRE Group

$6.8 billion

95%

$28 to $32

Massey Knakal Realty Services

$2.47 billion

14%

$50 to $55

Rosewood Realty Group

$2.22 billion

61%

$25 to $30

Jones Lang LaSalle

$1.9 billion

-8%

$10 to $12

Cushman & Wakefield

$1.8 billion

41%

$15 to $18

HFF

$1.3 billion

51%

$10 to $12

Newmark Grubb Knight Frank

$1.2 billion

70%

$15 to $17

Eastern Consolidated

$802 million

-40%

$18 to $20

Marcus & Millichap

$688 million

18%

$20 to $23

Studley

$576 million

-31%

$5 to $7

Ariel Property Advisors

$523 million

189%

$10 to $12

Brookfield Financial

$366 million

n/a

$6 to $8

Besen & Associates

$324 million

-33%

$10 to $12

RKF

$318 million

611%

$6 to $8

Carlton Group

$284 million

-3%

$1 to $1.5

GFI Realty Services

$280 million

21%

$8 to $10

Corcoran Group

$235 million

-20%

$4 to $6

Westwood Realty Associates

$230 million

-38%

$4 to $5

TerraCRG

$186 million

113%

$7 to $8

Friedman-Roth Realty Services

$178 million

41%

$5 to $7

Pinnacle Realty of New York

$173 million

13%

$5 to $7

HPNY

$148 million

-57%

$2 to $3

Colliers International

$131 million

-65%

$2 to $3

Highcap Group

$130 million

-38%

$2 to $3

Hodges Ward Elliott

$113 million

n/a

under $1M

Citicore

$90 million

n/a

$2 to $3

Itzhaki Properties

$84 million

-13%

$2 to $3

CPEX Real Estate

$71 million

25%

$1 to $2

Avison Young

$64 million

n/a

$1 to $2

Top: Eastdil Secured power brokers Doug Harmon and Adam Spies. Above: 650 Madison Avenue, which Eastdil sold for $1.3 billion.

Source note: TRD analysis of NYC building sales that closed in 2013. Data provided by firms and obtained through Real Capital Analytics. Only majority-interest transactions included. Data incomplete for Staten Island. Commission levels vary based on size and type of deal each firm does.

property database Real Capital Analytics. The uptick in brokered deals was especially good news for Eastdil Secured, CBRE Group, Massey Knakal Realty Services and Rosewood Realty Group, the top four firms on TRD’s ranking. All saw their deal volume rise significantly. “We are surprised it did not happen sooner,” said Massey Knakal’s CEO Paul

market, but others said some of those firms may have been squeezed by the tight inventory. Will Silverman, corporate manag-

Massey, referring to the increased ratio of deals handled by real estate agents. But at the same time, several veteran sales firms, including Eastern Consolidated, Studley, and Besen & Associates, saw a steep drop in sales. Each saw double-digit declines year-over-year. Several insiders speculated that those drops were just the result of a volatile

ing director at Studley, said the firm had some deals under contract in late 2013 that would close this year. Real estate insiders said the low level of for-sale inventory is increasingly inducing sellers to turn to brokers to try and get the highest possible price on the sale. In part, that’s because brokers are calling owners, suggesting they sell. “The majority of sellers today are more likely than not to put their properties on the market [with a broker], as they believe a broker will attain the highest and best sales price,” said Jared Epstein, vice president at Aurora Capital Associates, which sold an interest in a retail unit at 100 West 57th Street in Midtown last year. The competition is not all good for sellers, Epstein added. “The quantity of and competition between investment sales brokers in this overheated market has many of them over promising, which in many cases leads to under delivering and ruins the opportunity for a reasonable transaction to have taken place,” he said.

PHOTOGRAPH OF STACOM FOR THE REAL DEAL BY HUGH HARTSHORNE www.TheRealDeal.com January 2011 25

Top Firms The big dogs

LaSalle, which brokered $1.9 billion in sales, down 8 percent from the prior year. Those deals brought in an estimated $10 million to $12 million in commissions. Other firms that grew substantially included Cushman & Wakefield (No. 6), HFF (No. 7), Newmark Grubb Knight Frank (No. 8) and Ariel Property Advisors (No. 12), which each saw a jump of more than 40 percent. Ariel Property President Shimon Shkury said his firm’s growth can be at least partially attributed to going after relatively larger deals. The firm, which was founded in 2011, added additional agents and researchers last year as well. “Our professionals are growing [in experience], so we can service [larger] deals,” he said.

Midtown-based Eastdil Secured, a division of banking giant Wells Fargo, maintained its top position in the investment sales ranking for the third consecutive year. The New York sales group, led by Doug Harmon and Adam Spies, recorded $10.6 billion in sales, a significant 51 percent increase from the prior year. The duo represented the Carlyle Group and others in the $1.3 billion sale of 650 Madison Avenue to a joint venture that included Vornado Realty Trust and the hotel-focused investment firm Highgate Holdings. The firm raked in an estimated $50 million to $55 million in commissions for its sales, according to TRD’s estimates. Ranking second was CBRE, which completed $6.8 billion in investment sales,

of the year’s growth was in the outer boroughs. Daun Paris, president of Eastern Consolidated, acknowledged that the company’s numbers were down, but said over the past two years the firm has averaged $1.1 billion in sales. In addition, she said de-

Left: Rosewood Realty founder Aaron Jungreis, whose firm did $2.27 billion in sales last year. Right: Eastern Consolidated head Daun Paris, whose firm saw a drop in sales business.

New York City Investment sales stats, 2013 Total brokered deals in city

$32.4 billion

Total sales volume in city

$37.6 billion

Total estimated commissions

$350 million to $400 million

Source note: Total sales volume from a Massey Knakal report. For other figures see primary chart.

Top investment sales firms for NYC’s outer boroughs, 2013 Brokerage

OUTER BOROUGH Dollar Volume

brooklyn

queens

THE bronx

Rosewood Realty Group

$1.1 billion

$337 million

$460 million

$348 million

Massey Knakal Realty Services

$434 million

$245 million

$137 million

$52 million

Marcus & Millichap

$283 million

$113 million

$98 million

$72 million

CBRE Group

$238 million

$28 million

$76 million

$134 million

Eastdil Secured

$216 million

$82 million

$134 million

Source note: See primary chart.

nearly doubling its 2012 total and bringing in an estimated $28 million to $32 million in commissions. The investment sales team at the firm is led by Darcy Stacom and William Shanahan. The two sold the Park Lane Hotel at 36 Central Park South for the estate of Leona Helmsley for $660 million to a joint venture including the Witkoff Group and, again, Highgate Holdings. Those two giants were followed by firms that focus on smaller deals: Massey Knakal and Rosewood. Massey Knakal, which is led by Massey and Chairman Robert Knakal, completed $2.47 billion in sales, up 14 percent from 2012 (see related story on page 59). That brought in estimated commissions of $50 million to $55 million. The firm’s broker revenue was on par with Eastdil’s and CBRE’s because commission rates are generally higher on smaller deals. In fourth place was the much smaller Rosewood, founded by company president Aaron Jungreis. With just 15 brokers and agents, including Jungreis, the firm completed $2.22 billion in sales — up 61 percent from 2012 — yielding an estimated $25 million to $30 million in commissions. And in fifth was global firm Jones Lang

Left: Woody Heller of Studley, which saw sales fall. Right: Newmark president James Kuhn, whose firm has recently hired a batch of new brokers.

The greatest dollar-volume increase among the top 30 firms went to RKF, the retail-focused firm. The company saw a six-fold jump to $318 million, driven by pricey sales including the $62 million 434 Broadway, where it represented the buyer. On the flip side, Eastern Consolidated, which focuses on complex, mid-market deals in Manhattan, saw dollar volume decline by 40 percent to about $802 million. Meanwhile, Studley, whose investment sales office in Manhattan is led by the veteran broker Woody Heller, saw a 31 percent decline, and Besen, which focuses on smaller deals, saw a 33 percent drop. One possible explanation for Eastern Consolidated’s dip is that the firm primarily focuses on Manhattan, but most

spite 2013’s lower sales figures, the company has four times as many deals under contract now, at the beginning of 2014, than it did at the start of 2013. “We expect to have a very big year in 2014,” said Paris, adding that the company has more than 55 brokers, up from 30 a few years ago. She also noted that it launched a retail leasing division.

Turning to brokers The fact that some 86 percent of the dollar volume of all deals was done through brokers in 2013 may be the result of brokers canvassing building owners aggressively to sell. That’s largely because of the lack of inventory on the market. In Manhattan, the use of brokers is the highest, at more than 90 percent. While insiders said sophisticated sellers typically tap brokers — either formally or informally through an off-market deal — there are times when they simply do a deal directly with a buyer. That tends to be the case if, for example, the buyer and seller have already done business together. For many deals in the outer boroughs, that remains the norm. In Brooklyn — which according to

PHOTOGRAPH JUNGREIS FOR THE REAL DEAL BY ADAM PINCUS; PHOTOGRAPH OF PARIS BY HUGH HARTSHORNE; PHOTOGRAPH OF KUHN BY MARC SCRIVO 28 March OF 2012 www.TheRealDeal.com

Massey Knakal saw a total of $3.6 billion in transactions in 2013 — just $1.4 billion of the deals involved a broker, or 40 percent, according to TRD’s analysis. In Queens, about 56 percent of the $2.3 billion in deals was done with a broker, and in the Bronx, the number was about 74 percent, the TRD analysis found. The rankings do not include sales in Staten Island, where comprehensive data was not available. The outer boroughs are “an area of major opportunity for everybody,” Massey said. To get more of the brokered business in the outer boroughs, however, firms are going to have to compete with Rosewood, which dominates in Brooklyn, Queens and the Bronx. The firm, which specializes in multi-family sales, brokered $337 million in Brooklyn, $348 million in the Bronx and $460 million in Queens. Rosewood remains an anomaly among the top firms. It has taken on far more established firms like Massey Knakal, which has about seven times as many investment sales brokers and agents, along with national and international public companies. While TRD has written about Rosewood and Jungreis as the firm gobbled up an increasing share of the investment sales pie over the last few years, the numbers show its growth continues to outpace the competition. Jungreis handles large portfolio sales — for example the approximately $350 million sale of former Vantage Properties buildings in Queens to affiliates of A&E Real Estate — as well as individual buildings. He told TRD his goal is to spread his business throughout the boroughs, a contrast to the traditional model where a firm zeroes in on one geographical area. Only two other firms, Massey Knakal and Marcus & Millichap, had more than $50 million in each of Brooklyn, Queens and the Bronx. But the outer boroughs are in for a shake-up in 2014. A batch of new hires in recent years helped boost Newmark’s totals last year, and is helping that firm start 2014 strong. Newmark President James Kuhn pointed to Carol Ann Flint, an associate director, who left Besen to join Newmark in 2011. She brokered an approximately $260 million multi-family portfolio in the Bronx that reportedly went into contract earlier this year. “We have been trying to find, and have found, some rising stars that are able to go out and bring business that we have been able to execute,” Kuhn said. “So I think 2014 will be a vibrant year for investment sales. I don’t know what happens in ’15,” he said. Massey said, “Our outer-borough focus is starting to yield fruit. We are throwing the kitchen sink at the outer boroughs,” to gain more market share. TRD

www.TheRealDeal.com March 2014 57

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Pr o f i l e

Knakal’s new game plan After a longtime focus on small deals, Bob Knakal goes after higher-priced assignments

Bob Knakal said he expects to do $2 billion in deals this year, a personal record.

By Adam Pincus obert Knakal calls his move into the realm of mega-deals “a slow and steady progression.” Slow and steady is a wild understatement for Knakal, co-founder and chairman of the city’s largest local commercial services firm, Massey Knakal Realty Services. Knakal, 51, is by general industry consensus among an elite group of investment sales brokers. But unlike many of his successful counterparts, Knakal got there mostly by selling smaller buildings priced under $50 million. His one big breakout sale, a $179 million, 345-unit residential portfolio for developer Harry Macklowe in 2004, was a professional anomaly, not a launching pad. Now, however, under pressure from the frenetic Aaron Jungreis, who far surpassed him in sales last year, Knakal is going after more pricey property and portfolio sales. And so far this year, he’s on something of a roll. Last month, he had three simultaneous assignments to sell properties or portfolios of $100 million and above. “It is easy to pigeonhole someone into a specific niche, and sometimes it’s difficult to break that stereotype,” Knakal said. “But we are working hard to demonstrate what we can do.”

The $10 billion man Knakal told The Real Deal that he and his now 13-member team have closed more than $10 billion in sales at nearly 1,500 properties since the firm launched more than 25 years ago. While those figures cannot be inde60 March 2014 www.TheRealDeal.com

pendently verified because accurate records do not go back that far, others acknowledge that Knakal has likely sold more buildings than any other broker in the city with the possible exception of Jungreis, president of the much smaller Rosewood Realty Group (see related story on page 56.) However, a handful of institutional-level brokers have sold far more in terms of dollar volume over the years, including Eastdil Secured’s Doug Harmon and Adam Spies, who did more than $10 billion in 2013 alone, and CBRE Group’s Darcy Stacom,

fident that I will do over $2 billion this year.” Nelson, who has his own 10-member team, the second largest at the firm behind Knakal, said, “We are definitely handling larger, institutional-grade assignments.” He noted that while the deals the pair worked on in the past were at lower dollar amounts, they set the duo up well for moving into a higher price range. “When we are meeting with an owner, especially when taking an assignment over $100 million, clients want to know your track record,” Nelson said.

2005 or 2006, he and Massey considered hiring someone to specialize in larger deals. “We talked to a couple of people. [But] we did not find a good fit, and felt that the natural progression the company was on would bring us to even larger transactions. And that has played out,” he said. There is a potential downside to vying for the larger deals, insiders say. Big firms like CBRE and Cushman & Wakefield, which currently feed Massey Knakal leads on smaller deals, would likely stop doing that, said one broker at a large firm. But,

“It is easy to pigeonhole someone into a specific niche, and sometimes it’s difficult to break that stereotype. But we are working hard to demonstrate what we can do.” Bob Knakal, Massey Knakal Realty Services who sells $10 billion every couple years. Still, over the past year, Knakal has ramped up his large listings. In January, he and company partner James Nelson announced the listing for a 1.2-million-square-foot site in Hudson Yards owned by the Rosenthal family that is likely to sell for about $200 million. And, along with Thomas Donovan and Jason Preuss, Knakal was hired to sell a 53-building portfolio in Kew Gardens, Queens, for Hudson Realty Capital, which is likely to fetch more than $225 million. “I have been focused on and wanted to do larger deals in the past two years,” Knakal said. “I did over $1 billion [last year], and based on $400 million done already [in 2014] and $1.7 billion in listings, I feel con-

Even before the Macklowe portfolio closed in 2004, Knakal was well positioned to land pricier deals. In 2003, he was marketing an 11-building package of Manhattan multi-family properties for the South Carolina–based asset management firm Greystar Real Estate Partners. Real Estate Finance and Investment reported that year that the portfolio of East Side residential buildings was in contract to sell for $320 million. But despite being just a few million dollars apart, the deal collapsed and the package was recapitalized, Knakal said. Two years later, with new decision makers overseeing the portfolio, the investment company HFF was hired, and sold the buildings in several pieces over seven years. Knakal said in about

the source said, it might only be one or two referrals a year. Plus, company co-founder Paul Massey noted that because the firm sends business back to other firms, “I can’t imagine that stopping.”

Getting territorial Knakal grew up in Maywood, N.J., the son of a school principal and stay-at-home mother. His grandfathers, who were both from Prague, were small businessmen, and provided him with an entrepreneurial streak. In 1981, he began in commercial real estate as a summer research analyst at Coldwell Banker Commercial, a precursor to CBRE Group. Two years later he got his liwww.TheRealDeal.com March 2014 59

Pr o f i l e

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cense, and in 1984, teamed up with Massey to form a property group at the firm. The pair struck out on their own in 1988, launching Massey Knakal and exclusively representing sellers. Although they co-founded the firm, they play different roles in day-to-day operations, with Massey focusing on managing the business and Knakal on developing deals. They also adapted Coldwell Banker’s territory structure. Under Massey Knakal’s system, which is still in use today, every broker is assigned to one of 54 regions in the city and New Jersey. The company is the only brokerage in the city that uses such a system today. One advantage is that the brokers end up with a block-by-block understanding of their territory, forcing them to know virtually every owner and generating constant leads. That has helped the company, which has 104 investment sales brokers and agents, sell more buildings than any other firm in the city over the past decade. But some outsiders say the downside is that the territory system limits agents’ knowledge to their one area. In addition, commercial and multi-family portfolio owners, who often have buildings scattered geographically, typically prefer tapping brokers with broader experience. That leaves Massey Knakal vulnerable to competition for large portfolio sales. In recent years, Jungreis has had an edge in the market for the $100 million-plus, multi-family deals. Knakal, whose own territory includes Hudson Yards, Midtown West and Penn Station, often gets listings outside that range. But like any other broker at the company, when that happens, Knakal is required to work with the territory’s broker and split the commission, even if he’s the lead on the deal. Knakal, who sits in a cubicle in the firm’s open bullpen layout, declined to disclose what percent he or any other broker is paid when a commission is shared. Some industry players criticize the practice of firm heads, including Knakal, acting as both a broker and an owner, arguing that it presents a conflict of interest. For example, if Knakal approaches a junior broker about a commission split, he has the upper hand. Knakal said the structure of the firm prevents that sort of abuse of power, saying he is incentivized to give a decent split to a junior broker, because that broker might have a deal in his territory at some point. In addition, some criticize the practice of owners heading up large company teams, saying it provides them with an unfair advantage over junior brokers at the firm. Knakal defended the practice, though, noting that he is generating enough business to support that system. Nelson added that Knakal’s relationships are incredibly beneficial to the firm. “Bob, with his contacts, brings in a lot of institutional-style business. For a newer agent, they might not have that access. For Bob to bring in those opportunities is a great

thing for the firm,” Nelson said. Knakal is also adamant that he does not invest in real estate, saying it’s a conflict of interest. It is a sensitive point in the industry, because many brokers quietly invest in deals as minority partners, but few admit to it, insiders said. Last year, he told the New York Times that he doesn’t invest in real estate. But last month he told TRD he had made passive investments in a few deals, although he would not say when or where. Through a search on real estate database PropertyShark, TRD identified at

Top, company co-founder Paul Massey. Bottom, Massey Knakal’s James Nelson has worked on several big deals with Knakal.

least two properties Knakal had a stake in: The 10-unit rental building 2112 Honeywell Avenue in the Bronx, which was purchased in 2004 for $585,000 and sold in 2007 for $980,000, and the six-unit 18-11 Linden Street in Queens, purchased in 2002 for an undisclosed amount and sold in 2012 for $895,000. He declined to confirm either address. Other than his personal residences, he said he never purchased an investment property on his own. “I have made a few passive investments, always with other partners who sourced the opportunities, and viewed them more as helping a friend than making an active, hands-on real estate investment,” he said.

Numbers man Knakal, who is married and has a 5-yearold daughter, is meticulous when it comes to keeping records and setting goals. “I get hired 31 percent of the time that I do Continued on page 112

www.TheRealDeal.com March 2014 61

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7 70 OVER

A look at some of the longest-serving elder statesmen and women of NYC real estate

Management, Litwin still owns and operates 23 buildings throughout Manhat-

By Kerry Murtha

outh may be crucial for the immediacy of the digital start-up world,

tan, with 4,200 high-end rental units.

but maturity and experience can make a big difference in real estate.

Then there’s Merle Ginsburg, a pioneer in commercial real estate and founder of

Those who have survived and thrived for decades in this cutthroat in-

the Association of Real Estate Women, who has kept her hand in the industry into

dustry agree that old-fashioned hard work and strong relationships are

her 70s by continuing to mentor young women in the field.

the bedrock upon which they’ve built their reputations, clientele and businesses.

There is a confidence and an even greater drive that comes with age, according to

And many of these seasoned players continue pounding the pavement well into

85-year-old Jonathan Miller, an executive managing director at the commercial real

their senior years.

estate firm Lee & Associates. “When you’re older than 70, you’re working because you

Veterans like Leonard Litwin, who turns 100 this year, were trailblazers when

really want to, not because you have to, and that speaks volumes,” he noted.

they entered the industry more than a half-century ago. Litwin built the city’s

While most everyone in the industry knows the 70-plus mega-players like Silverstein

largest high-rise luxury apartment complex on the East Side in the 1960s. And

Properties’ Larry Silverstein and Related Companies Stephen Ross, the following seven

while he no longer takes part in the day-to-day operations of his firm Glenwood

industry stalwarts are also still buying, selling, brokering deals and appraising properties.

G ene W arren

n December, 90-year-old Gene Warren helped broker a deal he considers the best of his career. “Reebok is now part of the family,” said Warren, referring to the lease the sporting goods company signed for 11,600 square feet at 1 Union Square West, a nine-story building owned by Warren’s company, Buchbinder and Warren. Warren, with his partner and friend Norman Buchbinder, founded the residential and commercial brokerage and property management firm in 1958. Today, the comGene Warren pany, which is headquartered a few stories above Reebok’s new space at 1 Union Square, has 40 employees, manages over 100 buildings throughout Manhattan, and is involved in approximately 500 residential and commercial rental transactions annually. To what does Warren credit his success? “It all comes down to being a man of your word,” said Warren, who noted that he and his late partner never had a written agreement between them in the 45 years they worked together. “A simple handshake was all we needed,” he said.

M artin S anders

everal months ago, 79-year-old Martin Sanders purchased a three-story building on the western end of Canal Street for $2.2 million. “I call it my little souvenir,” said Sanders, the president of Sanders Investments. The property is the latest in the investor’s portfolio of more than 15 mostly residential buildings in Manhattan — a collection he’s accrued since the early 1980s. Sanders boasts that all of his buildings are profitable, noting that one property’s annual net income at $1 million is MARTIN SANDERS

62 March 2014 www.TheRealDeal.com

25 percent higher than its purchase price. The newest property, currently residential lofts, abuts the new hotel at 2 Renwick Street, a sign of the up-andcoming neighborhood. “I look for a good location that has not yet matured, so the profit potential is great,” said Sanders. Also a collector of German art, the real estate investor likens each of his properties to children. “Each requires something different,” he said, noting that possibilities for his newest addition include a $1 million conversion to a private townhouse, the selling of air rights for an additional floor, and amenities for tenants like a media room.

R obert S hapiro

great ride” is how 77-year-old Robert Shapiro describes his 53-year career. And it shows no sign of slowing down. In the past six months alone, Shapiro, the president of City Center Real Estate, a brokerage that specializes in land assemblage and development rights, was involved in the sale of more than 1 million square feet of air rights for major players like Harry Macklowe, Host Marriott and the Zeckendorfs. Recently, he acquired 25,000 square feet of air rights from the Algonquin Hotel on berobert shapiro half of Morris Moinian of Fortuna Realty Group for a planned $140 million five-star luxury hotel that will soon rise 37 stories at 1150 Avenue of the Americas. Shapiro has assembled parcels for notable projects such as Macklowe’s Drake Hotel, the Crowne Plaza Hotel in Times Square and the former Bertelsmann building in Times Square. He also brokered the first sale of a site owned by Trinity Church, a property that became the first residential conversion in Tribeca in 1984.

M imi N euhaus

imi Neuhaus was a married mother of two young children with no sales experience when she sold her first house on Staten Island for $100,000 in 1969. At 72, the real estate veteran has come a long way. Her most recent sales include a $3.6 million home in Bay Ridge and a $1.6 million property in Todt Hill, Staten Island’s most affluent neighborhood. “I sold the first house I showed and I haven’t stopped since,” said Neuhaus, owner of Neuhaus Realty, which has grown to three offices on Staten MIMI NEUHAUS Island, Brooklyn and New Jersey. Combined, they had 800 transactions in 2013. Neuhaus was a founding member of the Staten Island Board of Realtors and still serves as the director of its Multiple Listing Service. Neuhaus said her inspiration for real estate came from her mother, who in 1946 was a single parent and the first woman on Staten Island to receive a mortgage from the former Staten Island Savings Bank, which she used to purchase a two-family home.

R obert V on A ncken

he challenge to be ironclad when it comes to appraising properties is what appeals to 74-year-old Robert Von Ancken, chairman of Landauer Valuation & Advisory, a division of Newmark Grubb Knight Frank. Within the last year, he completed 15 appraisals, putting his total at more than 8,000 throughout his over 45-year career, among them for icons such as the Empire State Building, the Chrysler Continued on page 116

robert von ancken

Relationship Driven. Execution Focused. Financing Transaction Highlights

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Real estate’s young guns

Real estate’s rising stars The 35-and-under crowd that’s making a splash on the residential, commercial, new development and start-up fronts

By Hiten Samtani t takes time to earn your chops in New York real estate. The learning curve is steep, and the market demands both skills and connections. Most of the industry’s household names, on both the residential and commercial side — with the exception of real estate scions like Jared Kushner, Justin Elghanayan and a handful of others — are at least well into their 40s. But there are always ambitious young guns rising to the top of the industry. This month, The Real Deal talked to dozens of sources to get a sense of who in the 35-and-under crowd is making waves in the industry. In 2011, we featured the young “Moguls in the Making,” such as Douglas Elliman’s Oren Alexander and Benchmark Real Estate Group’s Jordan Vogel and Aaron Feldman in a similar feature. But now there’s a new batch of players to choose from, so we once again sorted through the prospects and came up with a fresh crop of hotshots. Read on to find out who they are, and what makes them stand out.

“It was a tremendous asset to me to come out in that time period — you don’t see the world in a rosy picture,” he said. When Naftali left Elad to form his eponymous development firm in 2011, Popkin moved over with him. Now he is a top executive at the Naftali Group, overseeing acquisitions and development and reporting directly to chief investment officer Victor Sigoura. At 28, he’s one of the youngest people in the industry in his position, sources say. And he’s overseen about $500 million worth of real estate acquisitions,

Group is planning an 18-story condo, and the purchase of a $57 million assemblage on West 25th Street, where the firm is building a 12-story condo. Popkin also helped orchestrate the purchase of 33 Beekman Street, where the Naftali Group is building a 34-story dorm for Pace University in partnership with the Harel Group and SL Green Realty. Joseph Koicim, a broker at Marcus & Millichap who represented the sellers on the assemblage deal, said that Popkin’s “intensity level is unmatched.” “It was a complicated deal that also included air rights transactions,” Koicim said. “But Drew is very specific in terms of what he needs.” Popkin started his career at age 18, when he received his real estate license and joined Citi Habitats as a rental agent. And when he’s not at work, he’s working on building a networking group called EmPiRE for young industry professionals that he co-founded with Taconic Investment Partners’ 26-year-old Spencer Pariser. Naftali said that while he makes the final call on an acquisition, he defers to Popkin on a lot of key decisions. “Anything from market research, to bringing the deals, to underwriting a deal, I give him the floor.” Popkin’s thick skin and determination, Naftali said, continue to impress him. “There were many times I threw him out of my office, telling him, ‘Raise your eyes from the Excel sheet. Feel the deal, understand the neighborhood.’ What’s really great about Drew is that he went back, he took the feedback and tried to do better,” Naftali added.

“[Popkin] just spent a couple of years learning everything. He was willing to do everything and anything just to be successful.”

Drew Popkin, 28, the Naftali Group After graduating from the University of Wisconsin-Madison in 2008, Drew Popkin wrote to Miki Naftali, then the CEO of Elad Properties, a subsidiary of the Israeli giant Elad Group, and asked for a job. Popkin said he was drawn to Elad because he wanted to work with Naftali, considered by many to be one of the savviest deal-makers in the market. “Miki is very much a ‘you eat what you kill’ kind of guy,” Popkin said of his mentor. “Being able to have him mold and shape me is tremendous.” But it took persistence to land the gig. He was turned away more than once. “He was a pain in the back,” Naftali joked. “He kept coming and kept coming, and eventually we had to hire him.” Three months after he wrote to Naftali, Popkin began working at Elad full-time, while taking graduate classes in real estate finance at night at New York University. Because he arrived at Elad as an acquisitions and development associate as the recession began, Popkin got to work on complex restructuring deals. 66 March 2014 www.TheRealDeal.com

Miki Naftali, the Naftali Group and nearly $1 billion in debt and equity transactions since starting out in 2008. “He just spent a couple of years learning everything,” Naftali said, adding that it was very rare for anyone to rack up such numbers at such a young age. “He was willing to do everything and anything just to be successful.” Those deals include the $55.5 million purchase of 206-210 West 77th Street on the Upper West Side, where the Naftali Drew Popkin, 28, who oversees acquisitions and development for the Naftali Group

Nick Romito, 31, View the Space Hanging on the wall in the entrance of View the Space’s office on West 30th Street is a signed picture of surfing legend Kelly Slater. A few feet away is another, of supermodel Cindy Crawford. The office is mostly filled with baseball-cap-clad young men, many of them avid surfers, including Nick Romito, who regularly chases waves on the Jersey Shore. But that casual vibe belies the fact that the cloud-based leasing portfolio management company that Romito launched in 2011 is one of the hottest start-ups in PHOTOGRAPH OF jason Meister by jeremy williams, PHOTOGRAPH OF nick romito by zachary kussin

Real estate’s young guns the New York commercial real estate world today. Romito started his career as a broker at Murray Hill Properties, representing both tenants and landlords. In 2009, he co-founded commercial real estate firm Titan Global Advisors with AM-Property. While there, Romito felt there was a way to bring the world of big data to the leasing business. With a team of coding geeks, Romito built View the Space, which creates online video tours of office spaces and provides landlords, brokers and property managers with data-tracking services, including how often a space is visited online and even which configurations of the space get the most visits from potential clients. Those numbers help landlords and brokers reconfigure their spaces to meet tenant demand, track leasing activity across their portfolios in real-time and develop relationships with viewers who’ve already expressed interest in the space. Romito said the firm will also be rolling out its mobile platform later this month. Romito now has 27 employees, and View the Space has more than 1,500 office buildings in 14 major markets on its platform, with a large chunk of them in New York. Clients in New York City include SL Green, which was its first major commercial client, as well as Blackstone Group’s Equity Office portfolio, asset manager TIAA-CREF and Boston Properties. View the Space also handles trophy towers such as RFR Realty’s Seagram Building and the Empire State Building. “It’s one thing when you’re getting sold products from people who are more IT-focused,” said Kevin Smith, the head of asset management for TIAA-CREF’s North Region. “There’s skepticism that they may not truly understand your business.” Romito’s background as a broker, Smith said, “lends a lot more credibility to the conversations.” Smith, who oversees a total of about 20 million square feet nationwide, is considering implementing View the Space across his portfolio. TIAA-CREF already has five Manhattan buildings on the system, including 685 Third Avenue and 475 Fifth Avenue. Smith said it lets him track leasing trends across the buildings, even if they are being managed by multiple brokerages. “I can pull all the information into one place and get a sense of what’s happening,” Smith said. “Nick really gets what’s on a landlord’s mind.” Romito has raised about $7.2 million for the company from big players in the real estate technology space, including Greg Waldorf, who is on the board of directors at Trulia, and Thomas Byrne, the former president of commercial real estate marketplace LoopNet. Projected revenue for 2014 is in the mid-to-upper single millions, Romito said. The company is upgrading from its 2,000-square-foot space at 360 Seventh Avenue to a 7,400-square-foot-space at 142 West 36th Street.

sale of the St. Vincent’s Hospital building at 555 Sixth Avenue to Ofer Yarden’s Stonehenge Partners for $67 million. In 2011, Meister’s team at Grubb represented WorldWide Holdings in the sale of Tribeca’s 93 Worth Street, a commercial property that Izaki Group Investments bought for just shy of $50 million and converted into a 92-unit condominium. The team also sold a 127-unit residential building in the Bronx’s Riverdale neighborhood for L&M Development Partners to Columbia University for $69 million. In total, Meister said he’s sold north of $500 million worth of property during his career. But he may eventually make his way back into residential development, he said, noting that he sometimes misses the thrill of completing a construction project. “When the house is [completed] and you’re sitting on the roof deck and looking out at the water, that to me is really exciting,” he said. Meister is adept at staying in the limelight; he’s regularly quoted in the press and makes frequent appearances on Fox Business to discuss topics such as the housing market and foreign buyers. He declined to comment on the Empire State Building bids, citing ongoing litigation.

Jason Meister, 31, a broker and vice president in Avison Young’s Capital Markets Group.

Jarrod Randolph, 30, Core

Jarrod Randolph, 30, a broker at Core

Jason Meister, 31, Avison Young When real estate bigwigs Joseph Sitt and Rubin Schron made separate $2 billion plays for the Empire State Building last year, they didn’t turn to industry veterans with decades of experience. Instead they were represented by 31-year-old Jason Meister, a broker and vice president in Avison Young’s Capital Markets Group. Meister, the son of high-profile real estate attorney Stephen Meister, grew up in Midtown and moved to Nantucket, Mass., after college to get his feet wet in real estate. In Nantucket, he formed his own venture to build modular construction spec homes, and also worked as a residential broker, selling homes to heavy hitters such as Lee Iacocca, the former CEO of Chrysler. He returned to New York in 2008 to join now-defunct commercial firm Grubb & Ellis. There, at age 28, he was part of the six-person team that brokered the high-profile

Nick Romito, 31, founder of View the Space

The term “square footage” has been part of Jarrod Randolph’s lingo since he was 16, when he took an internship at a residential real estate brokerage in his Pennsylvania hometown. After earning his undergraduate degree in real estate finance at NYU, he put in seven years at new development firm the Sunshine Group, now Corcoran Sunshine, and then did a stint at Brown Harris Stevens before jumping to Core in 2012. At 30 years old, he estimates that he’s sold about $600 million worth of New York property in the last decade, a combination of new development units and resales. That puts him near the top of the pack in his age group, although he’s still a fair distance behind heavyweights like Brown Harris Stevens’ Kyle Blackmon, who was featured in 2011’s “Moguls in the Making.” “This is all I know,” Randolph said. “I can basically work at Starbucks, and I can work in real estate.” He recently sold two sponsor unit penthouses at Extell Development’s 151 East 85th Street, for $19 million and $15.8 million. Prior to that, he helped sell out developments such as Extell’s Ariel East and West, as well as Shaya Boymelgreen’s River Lofts in Tribeca. In February, he snagged his biggest-ever listing, a $25 million half-floor condo at Trump World Tower belonging to a prominent plastic surgeon. And he said he’s now working on bagging a prestigious new $300 million development project Downtown, but declined to give further details. To find buyers for those eight-digit properties, Randolph said his five-person team compiles a meticulous dossier on high-net-worth individuals, including intimate information such as where their children go to school, where they like to shop and even whether “they have a fishing license in Alaska.” “There are only 1,000 or so individuals in the world who can afford the product we’re selling,” he said, “and it’s my job to know everything about them.” Randolph employs a full-time “cultural attaché,” whose job is to court such buyers by getting them tickets to sporting events, chartering their flights and offering dozens of other services. In addition, he’s working with investors who he said are each looking to pump at least $50 million into the New York residential market, and is going on a 10-day trip to Hong Kong next month to talk to three large banks that manage funds for wealthy investors there. He was recently named to Forbes “30 under 30” in the www.TheRealDeal.com March 2014 67

Real estate’s young guns real estate category, and is a frequent contributor to Fox Business’ “Spare Change” segment, where he weighs in on current business affairs.

Silvershore Properties’ David Shorenstein, 33, and Jason Silverstein, 29

Melissa DiBella, 29, TerraCRG Brooklyn had a record $5 billion in commercial real estate sales last year, and Melissa DiBella, of commercial brokerage TerraCRG, said those numbers are only going up in 2014. “There’s such an obvious demand right now,” said DiBella, who was TerraCRG CEO Ofer Cohen’s first hire when he left Massey Knakal in 2008 to start the firm. “International investors, architects and developers have reached out to us. All this interest is going to raise the dollar volume,” she said. Over the last eight years, DiBella handled the marketing and sales for about $500 million worth of properties in Brooklyn. As Brooklyn’s stars have aligned, TerraCRG’s own business has transformed. The firm started in 2008 doing mostly loan modifications, short sales and foreclosures, DiBella said, but is now selling a slew of development sites, and recently became active in selling retail sites. DiBella was made a partner in the firm last year. She and Cohen jointly manage a team within the 16-employee firm that’s sold about 1.2 million buildable square feet since 2008, she said. The team recently sold a 12,690-square-foot site at 470 Fourth Avenue in Park Slope for $20 million, and is now marketing a $23 million site in East Williamsburg at 100-120 Union Avenue that allows for a residential development of up to 130,000 square feet. DiBella said more developers are now targeting neighborhoods such as Prospect Lefferts Gardens, Prospect Park South and Flatbush. Her firm, she said, tries to stay on their radar by publishing market reports that break down each Brooklyn neighborhood by asset class — data that’s more standard in Manhattan but less common in the borough. “We’re in tune with what’s happening,” she said, so “for many newcomers, their first point of entry into Brooklyn is through us.” Boaz Gilad, a co-founder of development firm Brookland Capital, which is active in Crown Heights, Bushwick and Bedford-Stuyvesant, said DiBella “thinks like a developer.”

Melissa DiBella, 29, was made a partner at TerraCRG last year.

Jack Srour, 27, and Juda Srour, 25, Jay Suites

David Shorenstein, 33, and Jason Silverstein, 29, Silvershore Properties David Shorenstein and Jason Silverstein met when they were brokers at Marcus & Millichap in the mid-2000s. Shorenstein had already brokered $250 million in sales at the firm by the time Silverstein came on board in 2006. They struck out on their own in 2008, launching the investment firm Silvershore Properties. Silvershore has since amassed a $175 million portfolio of 40 residential and commercial buildings and is one of the most active mid-market investors in both Manhattan and Brooklyn. While they often buy, reposition and then

in New York.” They sold that building for $200,000 during the same year they launched. Starting out, Manhattan deals were beyond their reach, and so the firm stuck mostly to Brooklyn, where in June 2010 it purchased a Clinton Hill building for $290,000. Silvershore was recently offered $2.3 million for the property, the partners said. They’ve since upped both the volume and price of their purchases. In 2013, the company bought 20 buildings,

Silvershore’s first buy was a $90,000 retail property in Jamaica, Queens. It’s since upped both the volume and price of its purchases. In 2013, the company bought 20 buildings, worth about $41 million. sell properties, they hold on to those that have a significant upside, Shorenstein said. If there are existing retail leases in a building, for example, the partners “might wait them out” before selling. Their first buy was a $90,000 retail property in Jamaica, Queens that Silverstein described as “the smallest building 68 March 2014 www.TheRealDeal.com

“We have a good base of people that we work with,” Silverstein said. “They get more comfortable with every deal that we do.” “We’re kind of teaching ourselves as we go,” Shorenstein added. Silvershore recently put a Lower East Side rental and retail building at 101 Delancey Street on the market for $20.5 million. They paid just $7 million for the property in 2012. Besides carrying out an extensive renovation of the building, Silverstein said, “the retail play was where we saw the upside,” referring to the fact that leases for the building’s five ground-floor retail spaces are set to expire in the coming months. The firm hopes to get into ground-up development as well as acquire commercial towers. “Our goal,” Silverstein said, “[is] to look at the New York skyline and say, ‘That’s one of our buildings.’”

worth about $41 million, including 63 Spring Street in Soho for $6.4 million and a 25-unit building at 219 13th Street in Park Slope for $5.25 million. Their capital comes from a small pool of investors, including high-net-worth individuals and at least one group of foreign buyers, a source familiar with their operations said.

Jay Suites, which was founded by the Srour brothers in 2009, is one of the market leaders in the hot commercial sector of shared office space, with a 150,000-square-foot footprint in Manhattan. Current and former clients include Mayor Bill de Blasio, who rented space from the company for his campaign operations, and the New York Daily News, which set up temporary camp in a Jay Suites office while its headquarters were shuttered in the aftermath of Hurricane Sandy. The company is among the five biggest shared office space providers in the city, along with Regus, WeWork, Corporate Suites and Virgo Business Centers. Jack and Juda followed their father, Faraj “Freddy” Srour, into the business. The elder Srour owns several properties in the city, including 361 Lexington Avenue and 2 West 46th Street. Juda started out as an intern at residential brokerage Metropolitan Property Group, while Jack was earning a master’s degree in real estate finance at NYU. When a client asked Juda to help him find a furnished office space, he sensed an opportunity. “I realized what a demand there was for such spaces,” he said. The brothers are the youngest major players in the shared office market. (WeWork’s founder Adam Neumann is in his mid-30s.) The company has six locations in the city and is in talks to lease additional spaces of between 20,000 and 30,000 Continued on page 108

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R EAL E STATE H ISTORY A look back at some of New York City’s biggest real estate stories 1983: Unpopular “Cuomo tax” on capital gains becomes law

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ov. Mario Cuomo signed legislation enacting a new 10 percent tax on capital gains from the sale of real estate worth $1 million or more 31 years ago this month. The tax, a revised attempt at collecting fees from large property sales after a similar 1981 law was repealed the following year, was expected to bring the state about $100 million annually. Known as the “Cuomo tax,” the levy was imposed on the difference between the purchase price and the purchase price plus capital expenses put into the property. It was a major revenue source for the state during the decade’s real estate boom, bringing in $792 million at its peak in 1987. But it became increasingly unpopular with the early 1990s recession. The real estate industry criticized the tax from the beginMario Cuomo ning, in part because it did not take into consideration soft costs like broker commissions or marketing expenses that eat into an owner’s profit. Gov. George Pataki signed the law’s repeal in July 1996.

1940: Hitler, Stalin named in Brooklyn foreclosure

dolf Hitler of Germany and Joseph Stalin of the Soviet Union were included as defendants in a foreclosure lawsuit brought by Dime Savings Bank in Brooklyn State Supreme Court, 74 years ago this month. The bank identified the dictators as owners of the four-story rental building 541 Clinton Street in Carroll Gardens because the former owners, Martin Auslander and Julius Freilocher, transferred title to Hitler and Stalin two months earlier in an effort to embarrass the bank, the New York Times reported that year. The stunt made foreclosure more difficult for Dime, because the court required a lender to prove it had served all the owners by mail at their “home addresses” and by publication. The estimated cost to place overseas ads at the time was $225, and added nine weeks to the proceedings. The six-unit building, built in 1900, had a $3,300 mortgage. The bank said it would send foreclosure papers to Hitler at Adolf Hitler his Bavarian Alps residence at Berchtesgaden, and to Stalin at the Kremlin in Moscow. The embassies of both Germany and the Soviet Union also told the bank they had no knowledge of owning a Brooklyn property. Following the nine-week process, Dime purchased the building back in a June auction for a bid of $1,000. It still stands, and city records show the De Gennaro family has owned it since the 1970s.

1907: Columbia “Upper Estate” takes commercial turn

ollowing the slow progression uptown of Manhattan’s business districts, the first reports emerged that Columbia University trustees had decided to allow commercial uses within a large tract of land filled with residential buildings in Midtown 107 years ago this month. In 1814, the state granted the school most of the land between 48th and 51st streets and Fifth and Sixth avenues, known as the Upper Estate. It leased lots on which homes were constructed. The area at the time was largely residential, with commercial activity concentrated on 42nd and 59th streets. Among the area’s high-profile residents were the Vanderbilt family, who owned several mansions, including at 1 West 57th Street and 660 Fifth Avenue. In a first hint of change, Columbia, in the month prior, inked several leases along Fifth Avenue between 50th and 51st streets that for the first time included provisions allowing the tenFifth Avenue between 48th and 49th Sts. ants to sublet to a commercial user. However, no comprehensive redevelopment of the estate was undertaken until John D. Rockefeller signed an 87-year lease on Jan. 22, 1929 with the school, paying an average of $3 million per year in rent. Over several years, he redeveloped the area into Rockefeller Center. Compiled by Adam Pincus

70 March 2014 www.TheRealDeal.com

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DAY IN THE LIFE OF:

Emily Beare The top-producing CORE broker talks about a new wave of South African investors, predawn Central Park strolls and planning two weddings

CORE Group’s Emily Beare cooks dinner at home, giving her a chance to catch up with her husband after a hectic day

owerbroker Emily Beare joined CORE

there. My husband is South African, and

on your radar, or meet a client you weren’t even thinking of.

Group when the company launched

interestingly, there have been a lot more

in 2005. Among her notable deals are a

people from South Africa looking to invest

$50 million co-op purchase at 944 Fifth

and buy here lately. I also check in with my

5:00 p.m. I make sure to reach out to a

Avenue as well as a deal for the Rothschild

son [David]. He works for our sister com-

couple of past clients every day, or [get]

mansion at 41 East 70th Street, which sold

pany, Midtown Equities. He was a CORE

a new listing out there so everybody knows

for $25 million last year. In both sales she

broker, but decided commercial was more

what I’m doing.

represented the buyer. She also juggles a

his thing.

number of celebrity clients, who have included South African party planner Colin

10:00 a.m. If I do come into the office

Cowie and celebrity interior designer Nate

early, it’s to get myself prepared for show-

Berkus. Here is a look at her typical day.

ings. I may be taking a client out from 10

Beare studied photography and still enjoys it. Here, a shot she took during a trip to South Africa.

4 to 5:30. Normally, the first thing I do is check my email. I have international clients, who by that point have already started their day.

5:45 a.m. My husband and I started this new routine. We leave the house a little before 6 and walk to Central Park, and try to do about five miles. There’s something so tranquil about New York in the early morning. I studied photography in college, so often that’s the time that I’ll do some photos, just with my phone.

7:30 a.m. After our walk, I make myself a quick breakfast then jump in the shower. I have three sisters, and we speak almost every morning, so there will be an email or a quick phone call just to check in.

a charity called the Lalela Project, which brings the arts into South African townships. My day could end if there’s a meeting for Lalela. If that’s the case, I finish my extra

to 12. I like to do showings myself as much

4:30 a.m. I wake up anytime between

6:00 p.m. I sit on the advisory board of

work at home. But if I’m finishing up a deal,

as I can. But I do have a good support team.

I may be in the office until 8:00.

1:00 p.m. I have the most amazing assistant, Michelle, who will usually have

8:00 p.m. I go home and cook dinner

lunch waiting for me in the office. Some-

around 8. My husband does the food shop-

times it will be as late as 2:00, but I’ll al-

ping. While I’m cooking, he comes into

ways make sure I have a little something

the kitchen and we catch up. Then while

to eat.

With clients in London and elsewhere overseas, Beare checks her email very early each morning.

he’s cleaning, I finish up my last-minute emails. It’s a good system.

2:00 p.m. My daughter [Elizabeth, a CORE broker] is getting married, and my

9:00 p.m. Usually, I’m finished by 9. I

son is as well. So we will sometimes run off to

used to work until like 11:00, but I found

meet with Colin Cowie, who’s doing her wed-

that it wasn’t really fair to my husband —

ding. We’ve been friends for over 27 years,

or to myself. So I’ll use the time to catch up

and he’s also referred a lot of clients to me

on one of the three shows we like, “Down-

[and been a client himself]. She’ll say to me,

ton Abbey,” “The Good Wife” and “Mad

“Mom, come and see this makeup person,” or we’re running out looking for wedding dress-

Another of Beare’s photos, taken during her daily walk in Central Park

Men.” I’ll also catch up on my reading and peruse design books and blogs or Architectural Digest. Or some juicy article in

es or going to listen to a band after work.

Vanity Fair.

3:00 p.m. After lunch, it’s either more showings, or open house tours. If there’s a

11:00 p.m. I usually am in bed by 11. I

8:30 a.m. On the way to the office is usu-

townhouse tour in the Village or on Fifth

like to watch Jon Stewart and Stephen Col-

ally a good time to check in with interna-

or Park Avenue, it’s a good opportunity to

bert, and now that Jimmy Fallon’s going to

tional clients. I have a lot of connections in

see multiple properties. That usually takes

be on the “Tonight Show” I’ll probably be

London, and my husband’s family was in

an hour or two, but it’s worthwhile because

Hong Kong for 50 years, so I also have some

you might see something that wasn’t even

72 March 2014 www.TheRealDeal.com

watching that. I’m a big Jimmy Fallon fan. New “Tonight Show” host Jimmy Fallon is a favorite.

By Julie Strickland

PHOTOGRAPH OF EMILY BEARE FOR THE REAL DEAL BY JEREMY WILLIAMS

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Architecture Review

Ja m e s G a r d n e r

A neoclassical high-rise will give Lexington a lift

Demure 16-floor condo project on UES has roots that harken back to Sir Christopher Wren

n its demure and quiet way, a new development at 151 East 78th Street looks to be one of the more promising projects in the city, even though its actual construction has not yet begun. I stress its virtues because I fear that, since it falls squarely within the classical vernacular style associated with Robert Stern, it will not get the respect it deserves. That is because it does not aspire to be boldly original, but rather simply competent and attractive in an idiom that no longer enjoys the blessings of the academy. Also significant is the fact that 151 East 78th Street, developed by Spruce Capital Partners, is among the few high-rises in New York, and perhaps anywhere else, designed by Peter Pennoyer, one of the leaders of the next generation of the neoclassical style. Pennoyer is better known for his work on townhouses and interiors, as well as for his sumptuous and scholarly volumes on early 20th-century American classical architects like Delano & Aldrich, Warren & Wetmore, and Grosvenor Atterbury. If these long dead architects, who did so much to adorn the city, have any living heirs, Pennoyer is surely one of them. Just two doors east of one of the more clamorous stretches of Lexington Avenue, the 16-story 151 East 78th Street promises to fit in with its neighbors as well as could be hoped, given that these include two seven-story buildings just west, and a line of three-story townhouses on the other side. When completed, 151 East 78th Street will contain 14 full-floor condominiums in its 16 stories, two of them duplexes. Each unit will offer between three and six bedrooms and occupy between 3,000 and 7,000 square feet. The new building will rise over, or near, a part of Lexington that could surely use its help. Lexington is, after all, one of the lumpier and most uneven avenues in the city. Notwithstanding unflattering influence of the subway at 77th Street and Lexington, the tall and highly visible building at 151 East 78th should greatly enhance the entire neighborhood. The aesthetics of the building owe a great deal to Sir Christopher Wren’s designs for Hampton Court, with a tasteful use of red brick enlivened by limestone accents, as well as by three round windows, or oculi, at the summit of the building. The same British monument was the inspiration for Robert Stern’s Chatham, at Third Avenue and 65th Street. Like many buildings conceived in the neoclassical style, 151 East

74 March 2014 www.TheRealDeal.com

78th Street aspires to look like a century-old Park Avenue building. The Park Avenue prewar building, as opposed to the older and more idiosyncratic structures on Fifth Avenue and Central Park West, tends to present a somewhat flatter

pattern, adorned with small balconies at the second and 15th floors. Especially Park Avenue–esque is the building’s central entrance way, with its sober-looking canopy protruding from a façade that manages, within the space of

Rendering of 151 East 78th Street. Inset, architect Peter Pennoyer.

façade, with less ostentatious ornament and with less boldness in the manipulation of volumes. And that aesthetic is certainly borne out in Pennoyer’s latest project. What will perhaps be most striking about the building is the use of limestone accents, which will be especially evident at street level. In that portion of the building, 151 East 78th Street presents itself as a sustained expanse of rusticated limestone, rising two stories. Its punched windows are arranged in the classic six-over-six

10 feet, to include a broken pediment, a mullioned window and a voluted keystone that leads to the predominantly brick passages beginning at the third floor. In the building’s central portion, which rises from the third to the 11th floor, the oversize windows are paired at the ends and surrounded by brick, followed by single windows framed in limestone, and then, in the center, an interesting sequence of tripartite windows. Starting at the 12th floor, the building’s summit becomes more interesting in

terms of its volumes. Most of it continues on as a setback that rises over a terrace for an additional five stories, before culminating in three delightful oculus windows. To the east, a three-story pavilion emerges, with a curving, complicated bay that recalls the Georgian or Federalist style that inspired some of Pennoyer’s townhouse designs. At the very top, according to the renderings, a series of pale classical urns will adorn the roof, an adornment rarely used in New York City, even in classicizing prewar buildings. I have one complaint with the building, though it has nothing to do with Pennoyer. On both sides of the structure, a sheer and nearly windowless brick wall serves to create a vast surface area which Pennoyer has had the thankless task of adorning with lime-stone traceries. This is all in the hope of softening the municipally mandated ugliness that is necessarily entailed by such an uninterrupted expanse of brick, a fire-code consideration that prohibits windows directly above the roofs of contiguous buildings. The use of the pale limestone over the dark red brick creates a striking visual pattern, and it is probably the best that the architect could have done in the circumstances. But it is unfortunate that Pennoyer, and so many other designers of high-rises around the city, should be straight-jacketed by such structures, which pretty much condemn their projects to imperfection. No matter how elegant Pennoyer’s façade, there is, through no fault of his, a built-in inadequacy on at least two of the building’s four sides. In an age when it could be expected that a row of roughly commensurate high-rises would flank the building, such strictures were less offensive. But it is unlikely today that any such thing will happen on either side of 151 East 78th Street. And so, for the next 100 years, or however long the new building remains standing, New Yorkers will have to endure a rather unsightly sidewall. Here, once again, is an example of the city interfering, for no very clear or good reason, with the interests of architecture and urbanism, to say nothing of the developers. This complaint in no way detracts from my appreciation of Pennoyer’s design, which will considerably enhance a corner of the Upper East Side that could surely use it. TRD

Takk Yamaguchi Investment Specialist

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Q&A

The Queens craze

Lower land costs are expected to draw even more developers to Long Island City and Astoria; will Jamaica be next? By Sasha von Oldershausen

hile Brooklyn has rapidly gentrified in the last decade and become the trendiest of the outer boroughs, it looks like Queens is going to be next. “The East River used to be the ‘widest river in the world,’ ” said Justin Elghanayan, president of Rockrose Development. “But something has shifted, and now crossing the river is accepted.” Indeed, it is not only accepted to cross the East River, but developers are now setting their sights on Queens. With the recent opening of Kaufman Studio’s outdoor film set, the ever-popular MoMA outpost PS1, the extension of the 7 line, buzzed-about restaurants and new residential towers springing up, Queens is having something of a moment. In this month’s Q&A, The Real Deal asked developers and brokers to weigh in on the Queens residential market — which projects will be

Justin Elghanayan

president, Rockrose Development Corp. We know developers have been more focused on rentals than condos in Queens. But are you seeing that change at all? Part of the reason you’re seeing so many rentals is that many of the sites being developed are very large, and larger sites are often more suitable as rentals than condos. I would expect more condos as the neighborhoods develop. As this population matures, there will be a greater and greater demand for condos. What are you seeing in terms of residential rental rates? Are they up or down compared to the last few years? Rental rates have increased dramatically in Long Island City. And now that we have solid comps, it is easier for banks to get comfortable with making stronger loans. How much are prices for new development condos in Queens and how much is that up or down by compared to the last few years? Condos in Court Square are selling for north of $900 per square foot, with individual units easily breaking $1,000 per square foot. Which new projects do you think have the ability to be market makers in Queens? And which projects in Queens do you think are most exciting in general? Hunter’s Point South is going to have an enormous influence on the waterfront area of Long Island City. It’s going to add 76 March 2014 www.TheRealDeal.com

a large population that will fuel an already vibrant retail strip along Vernon Boulevard. We opened Linc LIC, a rental building, this past year. That added 709 luxury apartments to the inventory in Court Square, and we have an additional 1,800 apartments planned for the area. Tishman Speyer’s future phases of Gotham Center will have a huge positive impact on the Queens Plaza and Court Square areas. Who are the most typical buyers and renters of new development Queens’ projects today and have those demographics shifted in the last few years? Young people are more adventurous and are attracted to the amenity-rich, masstransit-heavy projects in Long Island City, as well as the diverse array of arts and culture. Now those people are marrying and are opting to stay in the neighborhood rather than move out to the suburbs when the kids come along. The more established a neighborhood becomes, the more expensive and generally the older the renters/buyers become.

David Maundrell

founder/owner, aptsandlofts.com What are you seeing in terms of residential development in Queens today, and how does that compare to the last few years? Queens has become as popular as ever. This is mainly due to Brooklyn prices soaring through the roof and a steady influx of residents from Brooklyn and Manhattan moving

market makers, which demographic groups are crossing over to the other side, which neighborhoods are getting the most attention (in addition to Long Island City), and the biggest challenges developers face as they turn to Queens. As TRD reported in its October issue, the borough has some 60 large residential projects in the pipeline. But the majority of those are rentals because lenders are still not comfortable with issuing loans for condos. In addition, this month some sources told TRD there are not enough big, family-sized apartments for the young professionals flocking to Queens now to grow into later. But both of those things may be changing soon. For more on how pricing is holding up in Queens, what sorts of returns developers are achieving, and which new neighborhoods are likely to develop next, we turn to our panel of experts.

to Queens over the past five years for better value. There is a base there to create a comp set in many marketplaces. Other than Long Island City, where are you seeing the most new residential development in Queens these days? What started as mainly Manhattan developers looking at areas like Long Island City and Astoria have moved further in along the 7 train, to Woodside, Jackson Heights and Sunnyside. Another area with growing attention is Jamaica. Jamaica [has] some large pieces of land there, not to mention great transportation. What is the most surprising thing about development in Queens today? ‘Why did it take so long?’ is really the

in areas that are not only a great place to live and raise a family, but also close to Manhattan and possibly close to family who already live in Queens.

Andrew Barrocas

CEO and founder, MNS What are you seeing in terms of residential development in Queens today, and how does that compare to the last few years? There’s a little over 9,000 units being planned in Long Island City alone. You have a lot of demand right now in that marketplace. There’s definitely a great means of transporta-

“Developers are leaning more toward rentals — there’s just less risk involved. The area is still growing. I anticipate once the infrastructure develops, you’ll see the condo market grow.” Andrew Barrocas, MNS question. If you follow Real Estate 101 and develop along major public transportation routes, it’s had a long time coming. Mainly because it’s not viewed as “hip” as Brooklyn is today. Who are the most typical buyers and renters of new development projects in Queens today? Drivers of today’s marketplace are young professionals, some with families or just new couples who are looking to invest

tion into Manhattan, and you have a lot of Manhattan and even Brooklyn developers looking into parts of Queens. It’s really created a great rental market, where you can still buy properties for somewhere in the $150 to $200 per foot range. You see a lot of retail being filled in. Obviously, the developments that the Elghanayans have done have certainly caused a very nice reaction to other parts of Long Island City, as well. Continued on page 78

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Q&A We know developers have been more focused on rentals than condos in Queens. But are you seeing that change at all? Are lenders becoming more willing to issue loans for condos? Since the majority of projects are rentals, there’s definitely a demand for condos. But people are leaning more toward rentals — there’s just less risk involved. The area is still growing. It’s definitely under-amenitized. I anticipate once the infrastructure develops, you’ll see the condo market grow. Which developers are you most surprised to see coming in and what is their financial calculus for moving into Queens? You can buy land below $200 a foot. You can get rents in the mid-$50s, which is very appealing. There’s nobody who’s not looking in Long Island City, from the biggest developers to some of the newer ones. Everyone has their eyes on Long Island City. There’s the proximity to the city, the views, it being a safe area. Related is obviously doing the Hunter’s Point project. And if Related is there, everyone wants to be there. Which new projects do you think have the ability to be market makers in Queens? And which projects in Queens do you think are most exciting in general? The most exciting project that’s going to happen — hands down — is 5Pointz. It’s gotten a tremendous amount of publicity. The developers are people who are long-time holders and really market makers, so I think that project is really exciting and has a lot of potential to change that marketplace. What are the biggest challenges to developing projects in Queens today, and how does that compare to the recent past? The biggest challenge is really getting [developers] over the hump of doing condos as opposed to rentals. People want to stick a flag in that area but there is a shortage of condo inventory. You have homeowners who want to purchase, there’s just no inventory there. In addition, Long Island City doesn’t really have three-bedroom apartments to really grow into, creating a situation where people are outgrowing their two-bedrooms, and there’s just nothing that exists.

Mitchell Hochberg

president, Lightstone Group What are you seeing in terms of residential development in Queens today, and how does that compare to the last few years? We’re seeing an exponential increase in residential de78 March 2014 www.TheRealDeal.com

velopment in Long Island City over the past few years. The focus is primarily for multi-family. And because the waterfront is mostly built out, the development is starting to gravitate more inland. What are the biggest challenges to developing, selling and renting residential projects in Queens today? The biggest challenge is still that Queens is not Manhattan. That is being substantially ameliorated by the growth of restaurants and retail and the establishment of communities like Long Island City. What sort of returns are developers expecting on a Queens condo or rental today, and how does that compare to the recent past? Rental developers are building to a mid-6 percent return untrended, when previ-

enough momentum in the market. That’s probably true in Astoria, as well. It’s really a function of the fact that they’ve done so many trades supporting pricing that it’s given lenders more comfort in the condo market. What sort of returns are developers expecting on a Queens condo or rental today, and how does that compare to the recent past? I think developers are typically looking for mid-20s returns, and they’re looking to double their return within three or four years. If anything, they’re willing to take some lesser returns for some more mature institutional markets. If you’re building in Queens, you want to build to a 7 percent cap rate. In Williamsburg, you’re lucky if you can get a 6 percent cap rate. And these are in more primary-related markets.

“If you look at land prices in Queens versus Brooklyn, Queens is cheap while Brooklyn has run up substantially. Queens is also running up now but not at the numbers you have in Brooklyn.” Josh Zegan, Madison Realty Capital ously they were looking for at least 100 basis points more. What is the most surprising thing about development in Queens today? The pace of absorption has now matched or exceeded Manhattan projects.

Josh Zegan

co-founder, Madison Realty Capital Why are so many developers who have traditionally stuck to Manhattan moving into Queens? If you look at land prices in Queens versus Brooklyn, Queens is cheap while Brooklyn has run up substantially. Queens is also running up now but not at the numbers you have in Brooklyn. For example, two years ago, in Williamsburg, you had $150 to $200 per foot for land. And Queens was $100 a foot. Now, it’s $350 to $400 per foot in Williamsburg. And the Queens market is around $200. Things have increased for both, but things have increased faster in Brooklyn. We know developers have been more focused on rentals than condos in Queens. But are lenders becoming more willing to issue loans for condos? I think there is comfort in certain markets for condos, like in Long Island City. I think lenders are becoming more comfortable with demand and feel there is

We’ve written about the shortage of one-bedroom Manhattan apartments. What mix of apartments are developers building right now in Queens? It’s so diverse. If it’s Long Island City, you have ones and twos. If you’re talking about Flushing, a lot of people like smaller apartments. It just depends on where you look. What sector of the residential market in general is struggling most right now in Queens? There were some areas where during the downturn [Queens] was more jobless than other places. In Jamaica, there definitely was a problem with people losing houses, and foreclosures. In some of the poorer areas, you had that problem, but now with the economy improving, that’s been improving, too. What are the most exciting non-residential additions to Queens that are attracting newcomers to buy and rent there today? In Astoria, there’s Kaufman Studios. There’s the Museum of the Moving Image. Things like that are kind of exciting. The Paper Factory is a brand new hotel in Long Island City — really it’s on the border of Long Island City and Astoria. Also, a lot of big retailers are moving to the boroughs. It’s happening in Brooklyn, it’s happening in Queens. H+M just moved out to Jamaica. In Long Island City, you see the impact of new, interesting restaurants.

Rick Rosa

executive vice president/managing director, Douglas Elliman What are you seeing in terms of residential rental rates in Queens today? The residential rental rates are north of $50 per square foot in both the waterfront and the Court Square area. What’s interesting is that there isn’t a large differential in those markets. How is the new development market in Queens doing compared to the resale market? New development is what’s shaping the market. It’s leading the price per square foot in both the rental and sales arena. The resale market is a hair below. What mix of apartment types are developers building right now in Queens? In the condo arena, there is a shortage of three-bedrooms in an area with growing families. The three-bedroom homes in recent developments are on the small side [as a way to make them more affordable], but they need to be larger. What are the most exciting non-residential additions to Queens that are attracting newcomers to buy and rent in Queens today? The Cliffs Rock climbing gym in Long Island City, the M. Wells Restaurant in Long Island City, and the Hunter’s Point South waterfront. The absorption is stronger then ever because of the increased demand. TRD

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NATIONAL MARKET REPORT

Chicago The Chicago City Council approved the sale of six vacant city-owned lots in the Humboldt Park neighborhood on the city’s west side for $1 apiece. Developer L&MC Investments plans to build affordable housing on the lots, which were appraised for a collective value of $316,000. A City Council statement said the units will be available to households earning up to 120 percent of area median income — approximately $88,300 for a family of four — and construction is slated to start in spring. Each two-story, 1,840-square-foot home will feature three bedrooms and two-and-a-half baths, and will be priced at $199,000, the statement said. The sale’s approval coincided with Mayor Rahm Emanuel’s announcement of a five-year plan that sets aside $1.33 billion for the construction, rehabilitation and preservation of more than 40,000 residential units.

New Jersey

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Whitney Houston’s 12,600-squarefoot Morris County, N.J., mansion has returned to the market at $1.5 million, 60 percent of its original asking price. The singer, who died in 2012, listed the five-bedroom house at $2.5 million in 2009.

Chicago Mayor Rahm Emanuel

Hamptons California

renderings of the improved neighborhood. Among these items The number of million-dollar homes sold in California rose to its are major transit initiatives, including the introduction of a new highest level in six years in 2013. A report published by real estate Metro station, a streetcar service and even a gondola aerial lift that data firm DataQuick found a total 39,174 homes sold for $1 mil- would carry passengers over the Potomac, designed to increase transportation options between Georgetown and greater Washington. The BID already took the first steps to enact the plan, and is finalizing a partnership with the National Park Service to raise funds for a new canal barge and education program. The BID also requested installation of a floating dock on the canal by spring for use with canoes and kayaks.

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lion or more last year, up 45 percent from 26,993 in 2012. That’s the highest number recorded in The Golden State since 2007, when 42,506 million-dollar homes sold. The most expensive 2013 sale was a 9.5-acre Malibu estate that sold for $74.5 million and included a 15,000-square-foot main house, two guest houses, a gym and swimming pool. The upward trend in luxury home sales points to a recovering economy, as well as to the continued rise of home prices. However, the boom also highlights the growing disparity between California’s rich and poor. The Los Angeles Times reported that while luxury housing recorded highs, statewide sales slipped 0.6 percent from 2012. And sales of new and resale houses and condos in the state in December dropped 12.1 percent from December 2012. Of the 8.8 million houses in California, 270,591 are valued at more than $1 million, DataQuick said.

University of Texas researchers found that the Dallas Area Rapid Transit commuter rail system has generated almost $4 billion in real estate projects near its stations. This includes $751 million in multi-family residences, $393 million in retail projects and $224 million in office projects. The Dallas light-rail system is the longest in the country, and between 2002 and 2013 expanded to 61 stations from 34 stations. One of the biggest developments is a 1.5 million-square-foot State Farm Insurance campus that will

Scarlett Johansson

Actress Scarlett Johansson dropped $2.2 million on a 3,500-square-foot Hamptons beach house — 20 percent less than the original asking price. The house features four bedrooms, including a master bedroom with a fireplace and balcony, fourand-a-half bathrooms and a swimming pool.

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Georgetown waterfront

84 March 2014 www.TheRealDeal.com

The Georgetown Business Improvement District, a group of property owners and merchants, released details of its Georgetown 2028 Action Plan, which outlines steps the group considers necessary for the preservation and renovation of the neighborhood. The plan contains 75 action items, as well as artists’

Khloe Kardashian Dallas DART

house thousands of workers near the Bush Turnpike Station, the Dallas News reported. The mixed-use development will include a hotel, medical facility and 92,000 square feet of retail, restaurant and entertainment space. In January, DART kicked off construction of its last 2.6 mile extension, which will extend the system to 93 miles. Compiled by Sasha von Oldershausen

TV personality Khloe Kardashian sold her $5.49 million home to “Big Bang Theory” star Kaley Cuoco. Kardashian and soon-to-be ex-husband Lamar Odom bought the 8,400-square-foot house for $3.95 million in 2009. It sold just weeks after going on the market on Jan. 10.

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Oral representations cannot be relied upon as correctly stating representations of the developer. For correct representations, make reference to the documents required by section 718.503, Florida statutes, to be furnished by the developer to a buyer or lessee. Obtain the property report required by federal law and read it before signing anything. No federal agency has judged the merits or value, if any, of this property. We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing throughout the Nation. We encourage and support an affirmative advertising and marketing program in which there are no barriers to obtaining housing because of race, color, sex, religion, handicap, familial status or national origin. This ad does not constitute an offer to sell or a solicitation of an offer to buy a unit in the condominium. No solicitation, offer or sale of a unit in the condominium will be made in any jurisdiction in which such activity would be unlawful prior to any required registration therein.

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ON THE MARKET $250M Queens rental portfolio up for grabs A large Queens portfolio of rental apartments worth up to $250 million has hit the market, at a time when more big developers are looking to the borough for investment opportunities. (See related story on page 76.) Hudson Realty Capital is looking to offload 53 buildings — comprising 1,270 apartments — in the Kew Gardens neighborhood in eastern Queens. Hudson Realty has tapped Massey Knakal Realty Services to market the portfolio, which largely contains rent-regulated apartments. Massey Knakal chairman Bob Knakal confirmed to Crain’s that he was handling the sale along with colleagues Tom Donovan and Stephen Preuss. Knakal added that interest in Queens and other outer boroughs had “picked up significantly” and that the trend would continue in 2014.

LIC development site hits market for $50M A V-shaped development site at 29-37 41st Avenue in Long Island City is on the market asking $50 million. The site has a total buildable square foot29-37 41st Avenue age of 204,938 and comes with plans for a 30-story, 242-unit condominium tower with 29 parking spaces, according to Buzzbuzzhome. Under the current plan, the “Maiestas” condo project would have 197,356 square feet of residential and 7,582 square feet of commercial space. There’s also

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Commercial properties recently placed on the market

the possibility of an as-of-right 15-year tax abatement, the website said. The Address Group is marketing the site. As The Real Deal previously reported, Queens developer Steve Cheung paid $8.3 million for the vacant site in October 2011.

Zionist group looks to sell HQ for $40M-plus The Zionist Organization of America tapped commercial brokerage CBRE to market its New York City headquarters at 3 East 34th Street, The Real Deal has learned. The organization has owned the property since 1973, city records show. Ed3 East 34th Street ward Midgley, Daniel Kaplan and Michael Kadosh of CBRE are marketing the building. While an official asking price was not available, sources said the Zionist Organization wants more than $40 million for the six-story property. The 29,162-square-foot mixed-use building comprises 24,162 square feet of office space and 5,000 square feet of retail, according to data from PropertyShark. Development rights at the site exceed 52,000 square feet. The retail space appears to be occupied by clothing retailer Bolton’s.

Midwood multi-family pair on sale for $36M Two multi-family properties in Midwood, owned by trusts linked to diamond dealer Michael Nektalov, hit the market for a combined $36 million, The Real Deal has learned. The buildings, at 1106 and 1201 Avenue K, are being mar1

12/28/13

6:00 AM

keted by Ben Weiss and Jackie Himmelstein of commercial brokerage Besen & Associates. The properties total 125,000 square feet and comprise 140 apartments, two offices and 1201 Avenue K two units for community facility use. They apartments are comprised of four studios, 80 one-bedroom units, 46 two-bedroom units and 10 three-bedroom units. A buyer could expand the existing buildings by adding one to three stories on top, according to a spokesperson for Besen, who said the buildings come with 30,000 square feet of additional air rights.

Landlord asks $20M for Downtown Brooklyn church A Brooklyn landlord has listed an historic Downtown Brooklyn church, at 360 Schermerhorn Street on the corner of Third Avenue, for sale as a development site. Experts say it could garner as much as $20 million due to heightened demand for residential units in the borough. The two-story red brick church houses the Recovery House of Worship and was built in 1894. The plot is the second property on the block to hit the market recently, following 233 Schermerhorn Street in December. With Brooklyn apartment prices at a high due to dwindling inventory, landlords are taking advantage of the value of their properties and are cashing them in while they can, according to Crain’s. Ofer Cohen of commercial brokerage TerraCRG is offering the property. Compiled by Linden Lim

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Steven Matz, Esq. Senior Partner

Rosalind Ting, Esq Associate

Larry Trinkwald, Esq Rosalind Ting, Esq. Associate

Jonathan Helfer, Esq. Junior Partner

Scott Goldman, Esq Associate

Bonnie Jerro, EsqEsq. Kacey Rosemberg, Associate

Ron Sanon, Esq Karen Masuko, Esq. Associate

KATZ & MATZ,

P.C.

1350 Avenue of the Americas, 3rd Floor, NYC 10019 212-244-4630 • www.KatzMatz.net

Deal Sheet summary

The Deal Sheet, on pages 90 to 102, covers transactions from 1/11/14 through 2/10/14. Please submit future deals to deals@therealdeal.com.

Overview Property sales

Financing

Leases (# of deals)

Leases (square feet)

Deals

Transactions

Office

1,316,923

Dollars

$631,550,000

Aggregate value

$22,700,000

Retail

158,964

Total

118

Total

1,475,887

Sales By dollar volume (in millions)

By type

Retail Development Mixed-use Hotel

Industrial

0 2.0

Mixed-use

2 $2

Hotel Industrial

Development

.5 0 0

Retail

Office

$40.7

Office

Multi-family

0 .6 2 $9

Office leases Office leases by industry

Office leases sf by industry

Industry

Leases of deals

Top tenant reps for office leasing by sf

Industry

Leases square feet

Broker

Leases square feet

16,841

Cushman & Wakefield 282,922

Entertainment 2

Entertainment 17,000

CBRE Group 261,980

Fashion* 7

Fashion* 95,052

Jones Lang LaSalle 174,590

Financial 10

Financial 372,132

Newmark Grubb Knight Frank

Government 1

Government 233,000

DTZ 130,357

Legal 6

Legal 91,775

Colliers International 75,059

Media 1

Media 120,721

EVO Real Estate Group

59,388

NGO 1

NGO 46,175

Adams & Co.

22,133

Other 45

Other 254,942

Bernstein Real Estate 18,759

Science & Technology 2

Science & Technology 69,285

Studley 17,065

Advertising & Marketing

150,829

Retail leases by industry

Retail leases sf by industry

SCG Retail 30,830

Food & Beverage

Winick Realty 22,444

Education

Ripco Real Estate 14,139

Fashion

9,100

Other

RZ Retail Advisors 7,350

Pet Store

Music

7,000

Adams & Co.

6,817

(*includes showroom space)

46,476 8

Kalmon Dolgin Affiliates

Pet Store

6 ,7

Sinvin Real Estate 7,350

Other

CBRE Group 7,600

Fashion

30 ,

SRS Real Estate Partners

Music

Education

15,000 13,720

Eastern Consolidated 11,000

22 2

12,400

Leases square feet

Top tenant reps for retail leasing by sf Broker

Retail leases

www.www.TheRealDeal.com March 2014 89

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 1/11/14 to 2/10/14. Please submit future deals to deals@therealdeal.com.

Office leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

30-30 Thomson Ave (Queens)

233,000

New York City Department of Design and Construction / R. Desi-Jain, D. Holowink, M. Lee, J. Morrill, J. Reinertsen, K. Thompson, S. Wilson, CBRE

Feil Organization / Represented inhouse

The city’s government agency signed a 15-year lease renewal and expansion. The tenant renewed its existing 210,000 square feet and expanded by an additional 23,000 square feet.

199 Water St

143,297

Allied World Insurance Company / P. Ippolito, J. Zona, NGKF

Jack Resnick & Sons / J. Cefaly, R. Constable, C&W

The insurance company signed a new lease.

757 Third Ave

130,357

Grant Thornton LLP / M. Christian, G. Espach, DTZ

n/a / A. Chudnoff, M. Konsker, JLL

The professional services firm signed a 15-year, 10-month lease for the entire second, third, fourth and ninth floors and part of the fifth floor. The tenant is relocating from 666 Third Avenue.

1180 Sixth Ave

120,721

Scripps Networks LLC / Samuel Clark III, C&W

n/a / G. Varricchio, B. Varricchio, J. Tamborlane, Murray Hill Properties

The media company signed a 10-year lease.

110 East 59th St

65,322

Aramis / Christopher Kraus, JLL

Jack Resnick & Sons / n/a

The tenant renewed its lease.

423 West 55th St

62,761

Carlisle Etcetera / D. Rosenbloom, E. Weber, R. Nocom, C&W

Winter Organization / Represented in-house

The women’s fashion company signed a 10-year lease for its corporate headquarters.

200 Liberty St

59,323

Richards Kibbe & Orbe LLP / Ted Rotante, Colliers International

Brookfield Office Properties / Represented in-house

The law firm signed a lease renewal for the entire 28th and 29th floors.

40 Wall St

46,175

Hadassah, The Women’s Zionist Organization of America / D. Green, C. Lyon, J. Herman, C&W

Trump Organization / J. Lichtenberg, F. Cento, S. Silverstein, C&W

The nonprofit signed a 20-year lease for the entire eighth floor and part of the seventh floor.

330 Hudson St

38,000

TripAdvisor / Columbia Group; C&W

Beacon Capital Partners / R. Alexander, D. Maurer-Hollaender, B. Surry, CBRE

The travel website signed a 10-year lease for full-floor space.

757 Third Ave

37,453

Berkley Insurance Company / C. Kraus, B. Higgins, JLL

n/a / A. Chudnoff, M. Konsker, JLL

The reinsurance company signed an 11-year, one-month lease for the entire 10th floor and part of the 11th floor. The tenant is consolidating its offices at 317 Madison Avenue and 14 Wall Street.

1114 Sixth Ave

31,285

Sybase Inc. / A. Chudnoff, S. Vinett, JLL

n/a / Duncan McCuaig, Brookfield Properties

The enterprise software and services company signed a one-year, three-month lease renewal for the entire 32nd floor.

60 Madison Ave

18,759

Tapad Inc. / Peter Liptrot, Bernstein Real Estate

n/a / E. Zar, D. Lolai, R. Doolittle, Murray Hill Properties

The tenant signed a five-year lease.

132 West 36th St

16,213

Red Payments / E. Lieberman, EVO Real Estate Group; M. Dylan, Inceptum Inc.

Kaufman Organization / Represented in-house

The merchant services firm signed a lease renewal.

295 Madison Ave

15,875

Sontag Advisory LLC / Howard Epstein, EVO Real Estate Group

Tahor 26 Owner LLC / David Greene, Murray Hill Properties

The financial services firm signed a lease for the entire fifth floor. The tenant is moving from 261 Madison Avenue.

485 Madison Ave

15,736

Bevmax Office Centers / M. Cohen, P. Amarante, Colliers International

Jack Resnick & Sons / n/a

The shared office space provider signed a new lease.

30 Broad St

14,880

Lucas & Mercanti LLP / Steve Eynon, CBRE

n/a / R. Doolittle, J. Howard, Murray Hill Properties

The law firm signed a 10-year lease.

1071 Sixth Ave

14,000

Sharp Entertainment / David Levy, Adams & Co.

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

The entertainment production agency signed a 10-year lease. The reported asking rent was $59 per square foot.

1407 Broadway

13,729

Land’s End / Francine Oro, CBC Hunter Realty

Lightstone Group / A. Bokman, P. Turchin, G. Rothkin, B. Fastenberg, R. Zimablist, L. Cross, CBRE

The lifestyle brand signed a 10-year office lease for the entire 27th floor. The tenant is relocating from a smaller space at 530 Seventh Avenue.

One Grand Central Pl

12,723

3i Debt Management US LLC / A. Chudnoff, D. Turkewitz, JLL

Empire State Realty Trust / R. Kass, Empire State Realty Trust; W. Cohen, J. Christiano, NGKF

The private equity, infrastructure and debt management services provider signed a new 10-year, five-month lease for the entire 41st floor.

860 Broadway

12,500

Silver Line / n/a

Embark / Gregory Rogers, Rice & Associates

The tenant subleased the fifth-floor space.

555 Fifth Ave

10,153

Jewels by Star / Avi Ben-Ishay, Norman Bobrow & Co.

ATCO Properties & Management / Represented in-house

The jewelry designer and manufacturer signed a 15-year lease for part of the seventh floor.

80 Broad St

10,100

Mekanism Inc. / S. King, G. Miovski, CBRE

Savanna / H. Stein, T. Stracci, A. Leshowitz, NGKF

The creative agency signed a 10-year lease for the entire 35th and 36th floors.

501 Madison Ave

8,939

Design Republic Partners / n/a

KRW Realty Advisors LLC / R. Freedman, A. Jinishian, S. Hecht, T. Pond, Colliers International

The architecture firm signed a 10-year lease.

373 Park Ave South

8,732

Recruiting Resources LLC / C. Berman, R. Herzich, Joseph P. Day Realty

Atco Brokerage Services / Represented in-house

The market research firm signed a lease.

295 Fifth Ave

8,300

Sunwin Global Industry Inc. / E. Lieberman, B. Bernstein, EVO Real Estate Group

Manhattan Properties / Represented in-house

The home furnishings company signed a lease for showroom space. The tenant is relocating from 7 West 34th Street.

530 Fifth Ave

7,803

Athyrium Capital Management / D. Posy, J. Roberts, Studley

Jamestown Properties; Rockwood Capital; MHP Real Estate Services; Crown Acquisitions / D. Falk, E. Cagner, D. Levine, Newmark Grubb Knight Frank

The investment adviser signed a five-year lease for the entire 25th floor.

24 Hillel Pl (Brooklyn)

7,500

M Power Energy / John Oliveri, STL Realty

Northfield Bank / John Oliveri, STL Realty

The tenant signed a 10-year lease.

To view more deals visit our website: www.TheRealDeal.com 90 March 2014 www.TheRealDeal.com

Business Meets Luxury The Duplex Penthouse at 214 West 39th Street

Duplex 2nd Level

Duplex Penthouse on the 13th and 14th Floors

For More Information Contact: Ernest Vallorano 212-221-3200

• • • • • • • • • • •

Accessed by four (4) lobby elevators Private elevator between the 13th and 14th floors All new construction on the 14th floor Ceiling heights on 13/14th floor are 16’ Five (5) large domed skylights. Kitchen All new Solarban windows 2,500 square feet of lighted and decked outdoor terraces. Acceptable uses: Garment / Professional Offices / Tech Term: 10 years plus options Hours of access: 24/7 – 363 days

Office leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

330 Seventh Ave

7,000

Ahava North America / Elliott Klein, EVO Real Estate Group

Supernova LLC / Mike Dreizen, NGKF

The skincare company signed a lease. The tenant is relocating from 411 Fifth Avenue.

880 Third Ave

6,655

Beech Hill Securities / Lisa Kiehl, JLL

Jack Resnick & Sons / n/a

The full-service broker/dealer signed a lease renewal.

590 Madison Ave

6,246

GenNx360 Management Company / A. Chudnoff, B. Wunsch, JLL

n/a / Jeffrey Sussman, Edward J. Minskoff Equities

The private equity firm signed a five-year, four-month lease for part of the 27th floor.

One Exchange Pl

6,000

Stewart Occhipinti LLP / Corey Abdo, EVO Real Estate Group

Broad Street Development / Represented in-house

The law firm signed a lease. The tenant is relocating from 65 West 36th Street.

230 West 38th St

6,000

MM & R Inc. / Barry Bernstein, EVO Real Estate Group

3738 West LLC / J. Caseley, D. Breiman, ABS Partners

The apparel firm signed a lease for the entire 17th floor. The tenant will maintain its showroom nearby on Seventh Avenue, while 230 West 38th Street will house its design, sales and accounting departments.

830 Third Ave

5,980

Sixpoint Partners LLC / R. Eisenberg, J. Brustein, NGKF

AEW Capital Management LP / D. Neye, R. Abend, JLL

The boutique investment bank signed a five-year lease for part of the eighth floor.

485 Madison Ave

5,743

Olympus Capital Management / Gary Greenspan, C&W

Jack Resnick & Sons / n/a

The hedge fund signed a lease renewal.

1180 Sixth Ave

5,722

Whatley Kallas LP / Scott Weiss, Studley

n/a / G. Varricchio, B. Varricchio, J. Tamborlane, Murray Hill Properties

The law firm signed a five-year lease.

75 Broad St

5,590

De Cecco USA / Kenneth Beilin, Beilin Commercial Real Estate

JEMB Realty / Frank Cento, C&W

The USA subsidiary of the Italian pasta company signed a lease on the fourth floor. The reported asking rent was in the mid-$30s per square foot.

48 West 37th St

5,052

Marais / Benchmark Group New York

Forty Eight Thirty Seven Associates / David Levy, Adams & Co.

The fashion accessories company signed a new 10-year lease. The reported asking rent was $39 per square foot.

18 West 21st St

5,000

Vector Media / Jack Cohen, Skylight Leasing

GAM Real Estate LLC / Doug Rice, Rice & Associates

The tenant signed a lease.

100 Wall St

4,318

Apex Systems Inc. / John Moxley, JLL

Savanna / M. Konsker, S. Cahaly, K. Young, JLL

The IT staffing firm signed a new seven-year lease for part of the second floor.

501 Seventh Ave

4,191

Ion Marketing / Paul Ferraro, JLL

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

The marketing and promotion agency signed a new lease.

135 West 20th St

4,123

Pay Perks / Bob Brody, Synergy Realty

A & G Real Estate LLC / Elissa Groh, Rice & Associates

The tenant signed a lease.

29 West 35th St

4,100

Law Firm of Stuart Weiss P.C. / Harlan Cygielman, Manhattan Realty Advisors

Empire State Equities / J. Gosin, H. Kessler, NGKF

The law firm signed a 10-year lease.

833 Broadway

4,000

Olah Inc. / Jeffrey Lovell, C&W

Levo League / James Costello, Sinvin Real Estate

The fashion company signed an eight-year, four-month lease for space on the fifth floor.

112 West 27th St

4,000

Melainie Rogers Nutrition / Jeff Sharon, CBRE

Miklos Real Estate / Doug Rice, Rice & Associates

The tenant signed a lease.

830 Third Ave

3,647

Constellium / Adam Haber, JLL

AEW Capital Management / D. Neye, R. Abend, JLL

The aluminum manufacturer signed a lease for part of the ninth floor.

188 Montague St (Brooklyn)

3,569

Jeff J. Mollins / Kraig Silver, Treeline Companies

Treeline Companies / Represented in-house

The chiropractor signed a lease.

80 Broad St

3,540

Spain-U.S. Chamber of Commerce / Stephan Steiner, Studley

Savanna / H. Stein, A. Leshowitz, T. Stracci, NGKF

The transatlantic business organization signed a 10-year lease for part of the 21st floor.

80 Broad St

3,485

NYSSCOA / David Kahane, DAK Commercial Realty

Savanna / H. Stein, T. Stracci, A. Leshowitz, NGKF

The association of supreme court officers signed a new 10-year lease for part of the 12th floor.

109 West 27th St

3,350

Instinctif / Nicholas Griffin, aptsandlofts.com

Silvia Braun Trust / Ioannis Kourtis, NY Citi Group Realty

The tenant signed a three-year lease.

350 Fifth Ave (Empire State Building)

3,272

RKY Services (USA) Inc. / Ethan Silverstein, C&W

Empire State Realty Trust / W. Cohen, S. Ursini, NGKF; R. Kass, Empire State Realty Trust

The logistical services provider signed a new lease.

175 Remsen St (Brooklyn)

3,085

New York University School of Medicine / P. Wexler, J. Yadgarov, Corcoran

The Treeline Companies / n/a

The school signed a new lease for office space.

220 East 23rd St

3,000

Passion Pictures / R. Zimmerman, A. Udis, I. Weiss, ABS Partners

Elk Investors Inc. / R. Zimmerman, A. Udis, I. Weiss, ABS Partners

The independent production company signed a five-year lease.

109 West 27th St

2,750

Artifex Press / Benjamin Casper, JLL

Silvia Braun Trust / Ioannis Kourtis, NY Citi Group Realty

The tenant signed a five-year, two-month lease.

153 West 27th St

2,650

Design Communications / J. Buslik, S. Godnick, Adams & Co.

Justin Management / Represented in-house

The manufacturer of architectural specialty products signed a new five-year lease. The reported asking rent was $39 per square foot.

220 East 23rd St

2,550

Crystal McKenzie Inc. / Mike Pinney, Signature Partners

Elk Investors Inc. / R. Zimmerman, A. Udis, I. Weiss, ABS Partners

The marketing communications firm signed a five-year lease.

121 West 27th St

2,510

Black Lapel Custom Clothiers / D. Someck, J. Myers, Lee & Associates

Barnum Designs LLC / Represented in-house

The suit designer signed a two-year sublease for part of the 12th floor.

220 East 23rd St

2,400

Unique Care / Bert Rosenblatt, Vicus Partners

Elk Investors Inc. / R. Zimmerman, A. Udis, I. Weiss, ABS Partners

The home care provider signed a seven-year lease.

220 East 23rd St

2,250

Experiment Publishing / Dan Dâ&#x20AC;&#x2122;Agnes, C&W

Elk Investors Inc. / R. Zimmerman, A. Udis, I. Weiss, ABS Partners

The book publisher signed a five-year lease.

110 West 40th St

2,217

Alchemation LLC / Savitt Partners

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

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

40 Rector St

2,160

Appco Group US Inc. / C. Berman, R. Herzich, S. Irlander, Joseph P. Day Realty

Time Equities / Represented in-house

The customer acquisitions agency signed a sublease.

109 West 27th St

2,047

UnSpace / Antoine Williams, City Realty Services

Silvia Braun Trust / Ioannis Kourtis, NY Citi Group Realty

The tenant signed a seven-year, two-month lease.

132 Nassau St

1,750

Fort Law Offices / Henry Fuentes, Manhattan Commercial Realty

JW Realty Co. / Heller Properties

The law firm signed a new three-year lease.

161 William St

1,552

Pace University / David Falk, NGKF

Jack Resnick & Sons / n/a

The university signed an expansion lease.

109 West 27th St

1,250

Laura Oâ&#x20AC;&#x2122;Loughlin and Sharyn Levine / Ioannis Kourtis, NY Citi Group Realty

Silvia Braun Trust / Ioannis Kourtis, NY Citi Group Realty

The tenant signed a five-year lease.

110 West 40th St

1,233

Salem Straits / D. Levy, B. Maslin, Adams & Co.

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

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

92 March 2014 www.TheRealDeal.com

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Office leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

1133 Broadway

1,200

Socratic / Gregory Rogers, Rice & Associates

Kew Management / Represented inhouse

The tenant signed a lease.

169 Kent St (Brooklyn)

1,000

n/a / Richard Hittman, City Connections

n/a / n/a

A medical tenant signed a 15-year lease.

135 West 29th St

1,000

Circle Showroom / Henry Fuentes, Manhattan Commercial Realty

MFM Properties / n/a

The fashion company signed a lease.

110 West 40th St

833

Primary New York LLC / D. Levy, B. Maslin, Adams & Co.

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

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

110 West 40th St

814

Biederman Redevelopment Ventures Corp. / D. Levy, B. Maslin, Adams & Co.

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

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

1 East 28th St

800

Petal by Pedal / Jonathan Isbitt, Sinvin Real Estate

Chartwell Manhattan Realty Inc. / Represented in-house

The floral business signed a one-year lease for office space on part of the fifth floor. The reported asking rent was $47 per square foot.

110 West 40th St

800

Michael J. Mason & Company Inc. / D. Levy, B. Maslin, Adams & Co.

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

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

1123 Broadway

700

Bockify / Gregory Rogers, Rice & Associates

Kew Management / Represented inhouse

The tenant signed a lease.

110 West 40th St

538

European Textile Trading Corp. / D. Levy, B. Maslin, Adams & Co.

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

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

110 West 40th St

497

Valcur International Inc. / D. Levy, B. Maslin, Adams & Co.

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

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

110 West 40th St

488

Gerri Tobias Inc. / D. Levy, B. Maslin, Adams & Co.

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

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

167 Madison Ave

350

CarpetsNY / M. Kabiri, W. Stein, Manhattan Commercial Realty

n/a / Katy Silberman, Tamar Properties

The tenant signed a two-year office lease.

110 West 40th St

280

CRT Restaurant Inc. / D. Levy, B. Maslin, Adams & Co.

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

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

Retail leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

218 West 44th St

29,600

Guitar Center / Bruce Shepard, SCG Retail

Africa Israel Group / n/a

The musical instrument retailer signed a 15-year lease.

815 Hutchinson River Pkwy (The Bronx)

11,000

Petco / B. Schuster, M. Mahony, Ripco Real Estate

MD Hutch Plaza Associates 3 LLC / B. Schuster, M. Mahony, Ripco Real Estate

The pet supply store signed a lease.

750 Columbus Ave

11,000

Upper Valley Preschool / J. Famularo, R. Idnani, Eastern Consolidated

n/a / Brad Cohen, SCG Retail

The preschool signed a lease for its flagship location.

63-14 Queens Blvd (Queens)

9,100

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

CBCS Queens Blvd LLC / C. Chan, D. Zhou-Chan, T. Kontis, Harvest International

The discount chain signed a lease for a new location.

515 Seventh Ave

7,755

Hestia Marketplace / Richard Smith, Winick Realty

515 Seventh Avenue / Gerard Collins, GRB Real Estate Services

The market signed a lease.

2-02 50th Ave (Queens)

7,697

Harvest Market / Aaron Fishbein, Winick Realty

50-01 2nd Street / Aaron Fishbein, Winick Realty

The market signed a lease.

76 Greene St

7,350

Joseph UK / C. Owles, Sinvin Real Estate; R. Zendell, RZ Retail Advisors

ABS L372-76 Greene Street LLC / Chris Schwart, C&W

The fashion retailer signed a lease for 3,400 square feet on the ground floor and 3,950 square feet on the selling lower level. The reported asking rent on the ground floor was $353 per square foot.

206 Union Ave (Brooklyn)

7,000

Brooklyn Harvest / Louie Hamdan, Kalmon Dolgin Affiliaites

Lindsay Park Housing Corp. / Louie Hamdan, Kalmon Dolgin Affiliaites

The food market signed a lease.

135 West 50th St

6,370

Menâ&#x20AC;&#x2122;s Wearhouse / Gary Alterman, RKF

n/a / James Tamborlane, Murray Hill Properties

The menswear retailer signed a 10-year lease.

10 West 33rd St

5,432

Smash Burger / David Levy, Adams & Co.

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

The burger chain signed a new lease. The reported asking rent was $191 per square foot.

2710 Broadway

5,300

CityMD / Ben Birnbaum, NGKF

n/a / Brad Cohen, SCG Retail

The urgent care provider signed a long-term lease.

585 Fifth Ave

4,500

Lao Feng Xiang Jewelry / S. Sjurset, C. Durand, D. LaPierre, CBRE

TSW 33 Realty Corp. / Joseph Isa, Winick Realty

The jeweler signed a lease.

433 West Broadway

4,500

Birchbox / M. Seigel, S. Taylor, Thor Retail Advisors

Jordan Wooster Street Associates LLC / C. Owles, S. Shannon, Sinvin Real Estate

The personal shopping retailer signed a lease for 2,200 square feet on the ground floor and 2,300 square feet on the selling lower level. The reported asking rent was $262 per square foot.

205 West 88th St

4,000

Kidville / n/a

n/a / David Chkheidze, Massey Knakal

The childrenâ&#x20AC;&#x2122;s activities center signed a long-term lease.

524 West 19th St

3,637

Shchukin Gallery / Earl Bateman, Rice & Associates

Condominium 520 West 19th Street / Anne Siriois, Art State LLC

The gallery signed a lease.

1006 First Ave

3,100

Le Pain Quotidien / A. Yunis, B. Daniels, M. Krell, CBRE

400 Plaza Owners Corp. / Joseph Isa, Winick Realty

The bakery signed a lease for a new location.

1147 First Ave

3,100

Sutton Veterinary Hospital / Michelle Styer, Rice & Associates

Condominium St Tropez / Jack Chandler, FAR Realty Associates

The veterinary hospital signed a retail lease.

5100 Flatbush Ave (Brooklyn)

2,500

Chipotle Mexican Grill / K. Hochhauser, D. Boutross, Winick Realty

Brooklyn Kings Pl / n/a

The Mexican restaurant chain signed a lease.

551 Amsterdam Ave

2,300

Pain Perdu Restaurant & Bakery / P. Braus, R. Kave, Lee & Associates

Rudd Realty Management / Michelle Ball, Rudd Realty

The restaurant signed a 12-year lease. The reported asking rent was $125 per square foot.

440 East Fordham Rd (The Bronx)

1,918

Starbucks / M. Mahony, P. Ripka, Ripco Real Estate

Chase Enterprises / M. Mahony, P. Ripka, Ripco Real Estate

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

140 East 46th St

1,800

Diamond 47th Nail / Richard Smith, Winick Realty

140 East 46th Street / Richard Smith, Winick Realty

The nail salon signed a lease.

212 Bowery

1,500

Model Fit / A. Stupak, J. Sandlofer, TASK Realty

n/a / Jean King, NYC Homes

The fitness studio signed a lease.

94 March 2014 www.TheRealDeal.com

Office listings

Retail listings

Residential sales and rentals

Property information & ownership search

Retail leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

3660 Broadway

1,500

Covo Trattoria / J. Kaufman, J. Gettler, M. Gorman, New Street Realty Advisors

BSD Equities / n/a

The restaurant signed a lease.

1428 Lexington Ave

1,400

Pet Central Lexington / Josh Siegelman, Winick Realty

93 Lexco LLC / Jill Lovitt, Massey Knakal

The pet shop signed a lease.

10 West 33rd St

1,385

Dunkin’ Donuts / David Levy, Adams & Co.

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

The coffee chain signed a new lease.

648 Broadway

1,300

Christian Duvernois Landscape/ Gallery / R. Milliken, S. Penzner, Susan Penzner Real Estate

n/a / Gabe Isaacs, Lee & Associates

The art gallery signed a lease.

98 Smith St (Brooklyn)

1,250

Eleven / n/a

n/a / R. Condren, K. Triglia, G. Danut, CPEX Real Estate

The tenant signed a retail lease.

300 West 23rd St

1,230

Starbucks / David Firestein, SCG Retail

Charles Washington LP / n/a

The coffee chain signed a five-year lease renewal.

440 East Fordham St (The Bronx)

1,221

ABC Pharmacy / Miles Mahony, Ripco Real Estate

One Fordham Plaza LLC / Miles Mahony, Ripco Real Estate

The pharmacy signed a 10-year lease.

452 East 78th St

1,167

Hunan Delight / H. Goldfarb, S. Lindenfeld, Lee & Associates

AIMCO / H. Goldfarb, S. Lindenfeld, Lee & Associates

The restaurant signed a 10-year lease. The reported asking rent was $150 per square foot.

162 Eighth Ave

1,100

Amorino Corporate / Matt Cohen, Lansco Corp.

162 Eighth Ave LLC / Steve Rappaport, Sinvin Real Estate

The gelato café signed a 15-year lease. The reported asking rent was $224 per square foot.

135 Seventh Ave South

1,100

Prime 135 / n/a

HM Village Realty / T. Brady, G. Rand, Town

The restaurant signed a 10-year lease.

800 Sixth Ave

1,000

Blo Dry Bar / D. Hildreth, J. Loren, Global Realty Advisors

Equity Residential / Brad Cohen, SCG Retail

The hair salon signed a 10-year lease.

163 West 10th St

1,000

Mezzrow / n/a

HM Village Realty / T. Brady, G. Rand, Town

The jazz lounge signed a 10-year lease.

369 West 34th St

900

Pitopia / A. Fishbein, S. Baker, Winick Realty

369 West 34th Street / A. Fishbein, S. Baker, Winick Realty

The restaurant signed a lease.

833 Franklin Ave (Brooklyn)

900

Owl & Thistle / n/a

n/a / T. King, R. Condren, K. Triglia, G. Danut, CPEX Real Estate

The general store signed a lease.

265 Lafayette St

750

Aurélie Bidermann / K. Allen, D. Harroch, Thor High Street Advisors

n/a / B. Cohen, D. Firestein, SCG Retail

The jewelry designer signed a long-term lease.

345 East 9th St

510

Universal Realty Group LLC / n/a

Sanicola Property / T. Brady, S. Falcone, Town

The real estate company leased retail space for five years.

820B Washington Ave (Brooklyn)

400

Brooklyn Flavors / n/a

n/a / T. King, R. Condren, K. Triglia, G. Danut, CPEX Real Estate

The tenant signed a lease.

220 East 42nd St

392

Coffee Break by Scotto / Lee Block, Winick Realty

SLG 22 News Owner / J. Roseman, N. Danziger, NGKF

The coffee shop signed a lease.

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Buys Address

Size

Buyer / Representative

Seller / Representative

Notes

10 Columbus Circle

1.1 million sf office condo

Related Companies; Abu Dhabi Investment Authority; GIC / n/a

Time Warner / D. Harmon, A. Spies, K. Donner, Eastdil Secured

The Time Warner Center sold for $1.3 billion. The new owners of the building will lease the space back to Time Warner for approximately five years, at which point the media giant will move to an 80-story skyscraper planned for Related Companies’ Hudson Yards, according to a report from Bloomberg News.

511 West 35th St

414,750 buildable sf development site

n/a / n/a

n/a / B. Knakal, S. Palmese, A. Posil, D. Kalish, Massey Knakal

The property sold for $88 million, or $212 per buildable square foot.

240 West 40th St

159,774 sf office bldg

AEW Capital Management / n/a

Sitt Asset Management / R. Baxter, J. Caplan, S. Latham, Y. Cohen, S. Shapiro, JLL

The property sold for $63 million.

540 West 21st St

Development site

Casco Development Corp. / n/a

The Atlantic Foundation / Denham Wolf Real Estate

The property sold for $50 million.

140 West 28th St

144,876 buildable sf development site

n/a / n/a

Sovereign Partners / A. Scandalios, J. Cruz, J. Julien, K. O’Hearn, K. Patel, HFF

The property sold for $42.8 million.

424 Bedford Ave (Brooklyn)

66-unit apt. bldg

East End Capital Partners; KBS / n/a

n/a / n/a

The property sold for $39.75 million.

120 West Broadway

14,000 sf retail bldg

Acadia Realty Trust / n/a

120 West Broadway Associates / n/a

The master lease for the property sold for $37 million.

217-219 Thompson St

25,000 sf mixed-use bldg

n/a / HPNY

The property sold for $24 million.

970 Boston Rd (The Bronx)

4 apt. bldgs, 250 units total

Albert Goodman Housing Development Fund / A. Doshi, L. Blumberg, S. Mehra, Besen & Associates

The Improvement Council Housing Company LP / A. Doshi, L. Blumberg, S. Mehra, Besen & Associates

The properties sold for $23.8 million, or $81 per square foot. The price represents a capitalization rate of 6.5 percent and a gross rent multiple of 7.4.

160 and 178 East 117th St

Two 8-story apt. bldgs

n/a / L. Lieberman, D. Schechtman, G. Saffioti, Eastern Consolidated

Moshe Gold, East Harlem Developers / L. Lieberman, D. Schechtman, G. Saffioti, Eastern Consolidated

The properties sold for $23.15 million.

207, 209 and 211 East 34th St

49,375 buildable sf development site

n/a / n/a

n/a / John Ciraulo, Massey Knakal

The property sold for $21 million, or $425 per buildable square foot.

Bronx portfolio

3 apt. bldgs, 180 units total

POKO Partners LLC / S. Shkury, S. Hirschfield, V. Sozio, M. Tortorici, J. Gold, Ariel Property Advisors

Property Resource Corporation / S. Shkury, S. Hirschfield, V. Sozio, M. Tortorici, J. Gold, Ariel Property Advisors

The package of multi-family buildings sold for $18.55 million. The properties are located at 2431 Belmont Avenue, 2476 Hughes Avenue and 2404-16 Crotona Avenue.

131 Duane St

5-story mixed-use bldg

Duane 131 LLC / n/a

Duane Street Realty LLC / B. Tapper, M. Jones, Eastern Consolidated

The property sold for $18.5 million.

56 Walker St

6-story apt. bldg

Six Sigma A NY Corp. / Monica Novo, Corcoran

n/a / K. Heyman, T. Doyle, Sotheby’s International Realty

The property sold for $18 million in a bankruptcy 363 sale.

1151 Third Ave

12,250 sf office bldg

1151 Third Avenue LLC / Brian Segall, RKF

201 East 67th Street LLC / Gregg Slotnick, HelmsleySpear

The property sold for $18 million.

334-336 West 46th St

Two 4-story mixeduse bldgs

n/a / D. Schechtman, L. Lieberman, Eastern Consolidated

The properties sold for $9.5 million.

2229-2259 Dix McBride Ave (Queens)

5 apt. bldgs, 132 units total

Cobb Realty LLC / Lev Mavashev, Besen & Associates

JPMorgan/CIBC / Lev Mavashev, Besen & Associates

The elevator buildings sold for $9.4 million.

453 West 152nd St and 465467 West 152nd St

2 apt. bldgs, 52 units total

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

The properties sold for $9.25 million.

154 East 23rd St

15,783 sf office bldg

Omnia Group / Alan Miller, Eastern Consolidated

Xavier Society for the Blind / P. Hauspurg, D. Schechtman, Eastern Consolidated

The property sold for $9 million, or $562 per square foot.

500 West 28th St

Development site

311 10th Ave Associates / Greg Corbin, Besen & Associates

CD Kobsons Inc. / Greg Corbin, Besen & Associates

The property sold for $7.8 million.

357 Avenue P (Brooklyn)

53-unit apt. bldg

357 Avenue P Capital LLC / J. Blatter, A. Jungreis, Rosewood Realty

Vim Realty LLC / J. Blatter, A. Jungreis, Rosewood Realty

The property sold for $7.3 million.

158 Rivington St

6-story apt. bldg, 9 units total

n/a / n/a

n/a / Michael DeCheser, Massey Knakal

The property sold for $6.48 million, or $944 per square foot.

215 Sterling St (Brooklyn)

32,120 sf mixed-use bldg

n/a / L. D. Bestreich, L. Sproviero, Marcus & Millichap

n/a / L. Sproviero, D. Bestreich, Marcus & Millichap

The property sold for $4.98 million, or about $155 per square foot.

107 Greenwich Ave

4-story mixed-use bldg

n/a / n/a

n/a / J. Nelson, D. Shalom, Massey Knakal

The property sold for $4.75 million, or $1,417 per square foot.

1414-1416 Wythe Pl (The Bronx)

5-story apt. bldg, 57 units total

93 Fairview LLC / Amit Doshi, Besen & Associates

744 Coster Realty LLC / Amit Doshi, Besen & Associates

The property sold for $4.6 million.

269-271 Fourth Ave (Brooklyn)

Development site

n/a / n/a

n/a / TerraCRG

The property sold for $4.4 million.

155 Noble St (Brooklyn)

13,238 sf apt. bldg, 7 units total

n/a / n/a

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

The property sold for $4.1 million, or $310 per square foot.

21-34 Broadway (Queens)

2-story mixed-use bldg

n/a / George Niblock, FriedmanRoth Realty

n/a / Jason Au, Brick Capital Group

The property sold for $3.81 million.

204 Park Pl (Brooklyn)

5-unit apt. bldg

n/a / D. Bestreich, L. Sproviero, R. Hunter, Marcus & Millichap

n/a / R. Hunter, L. Sproviero, D. Bestreich, Marcus & Millichap

The property sold for $3.61 million, or $649 per square foot.

28-22 Astoria Blvd (Queens)

Development site

George Elliot; Bell Realty / Tom Bouklis, Bouklis Group

n/a / Tom Bouklis, Bouklis Group

The property sold for $3.52 million.

288 Sixth St (Brooklyn)

4-story apt. bldg, 19 units total

DSA 288 Sixth LLC / Lev Mavashev, Besen & Associates

288 Sixth LLC / Glenn Raff, Besen & Associates

The property sold for $3.5 million.

69 Clinton St

16-unit apt. bldg

Nazarian Property Group / n/a

New Angle Realty Corp. / n/a

The property sold for $3.5 million.

115 Atlantic Ave (Brooklyn)

5,370 sf mixed-use bldg

n/a / S. Riney, P. Colbern, Marcus & Millichap

n/a / S. Riney, J. Koicim, P. Von Der Ahe, Marcus & Millichap

The property sold for $3.4 million, or $843 per square foot.

98 March 2014 www.TheRealDeal.com

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Buys continued Address

Size

Buyer / Representative

Seller / Representative

Notes

324 East 31st St (Brooklyn)

25-unit apt. bldg

n/a / D. Bestreich, L. Sproviero, Marcus & Millichap

n/a / L. Sproviero, D. Bestreich, Marcus & Millichap

The property sold for $3.3 million, or $158 per square foot.

331 Hicks St (Brooklyn)

4-unit apt. bldg

Silvershore Properties / n/a

n/a / n/a

The property sold for $3 million.

87-01 Midland Pkwy (Queens)

30 apts. and 3 comm. units

Benedict Realty Group / G. Corbin, D. Bess, Besen & Associates

BMJA Associates / G. Corbin, D. Bess, Besen & Associates

The package of unsold co-op sponsor units sold for $2.98 million.

1900 Park Ave

17,986 buildable sf development site

n/a / n/a

n/a / Lev Kimyagarov, Massey Knakal

The property sold for $2.73 million, or about $152 per buildable square foot.

567 Vanderbilt Ave (Brooklyn)

4,864 sf mixed-use bldg

n/a / D. Bestreich, S. Riney, Marcus & Millichap

The property sold for $2.6 million, or $535 per square foot.

1018 Park Pl (Brooklyn)

4-story apt. bldg, 17 units total

n/a / Jacob Aronov, Besen & Associates

1018 Park Place LLC / Jacob Aronov, Besen & Associates

The property sold for $2.55 million, or $215 per square foot. The price represents a capitalization rate of 4.3 percent and a gross rent multiple of 10.6.

281 Clifton Pl (Brooklyn)

11-unit apt. bldg

n/a / S. Riney, D. Greenblatt, Marcus & Millichap

The property sold for $2.3 million, or $208 per square foot.

934 Sterling Pl (Brooklyn)

8-unit apt. bldg

n/a / D. Bestreich, S. Riney, Marcus & Millichap

n/a / S. Riney, D. Bestreich, Marcus & Millichap

The property sold for $2.05 million, or $273 per square foot.

1029-1035 Cortelyou Rd (Brooklyn)

3,578 sf retail bldg

n/a / n/a

n/a / T. Gammino, P. Massey, Massey Knakal

The property sold for $2 million, or $559 per square foot.

679 Grand St (Brooklyn)

10,000 buildable sf development site

n/a / n/a

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

The property sold for $1.8 million, or $180 per buildable square foot.

149 Driggs Ave (Brooklyn)

8-unit apt. bldg

n/a / M. Salvatico, S. Riney, J. Saros, Marcus & Millichap

n/a / S. Riney, J. Saros, M. Salvatico, Marcus & Millichap

The property sold for $1.8 million, or $327 per square foot.

204 and 206 West 132nd St

2 apt. bldgs, 16 units total

n/a / David Gerstel, Friedman-Roth Realty

n/a / David Gerstel, FriedmanRoth Realty

The property sold for $1.72 million.

251 Bushwick Ave (Brooklyn)

6,350 sf mixed-use bldg

n/a / Said Boukhalfa, Marcus & Millichap

n/a / n/a

The property sold for $1.7 million.

580-582 Fifth Ave (Brooklyn)

3,380 sf retail bldg

n/a / J. Nowak, M. Rosenzweig, Marcus & Millichap

The property sold for $1.65 million, or $489 per square foot.

23-25 Astoria Blvd (Queens)

14-unit apt. bldg

n/a / Tom Bouklis, Bouklis Group

The condo development sold for about $1.5 million.

597 Park Pl (Brooklyn)

8-unit apt. bldg

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

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

The property sold for $1.48 million, or $247 per square foot.

382-384 Macon St (Brooklyn)

3-unit apt. bldg

n/a / n/a

n/a / Matthew Cosentino, TerraCRG

The property sold for $1.43 million.

18-02 College Point Blvd (Queens)

3-story mixed-use bldg

n/a / n/a

n/a / Stephen Preuss, Massey Knakal

The property sold for $1.3 million, or $265 per square foot.

128-20 14th Ave (Queens)

7,200 sf office bldg

Central Home Care / Jeffrey Unger, Kalmon Dolgin Affiliates

Manuptown Realty / Right Time Realty

The property sold for $1.25 million.

1259 St. Johns Pl (Brooklyn)

3-story, 7,109 sf apt. bldg, 4 units total

n/a / n/a

n/a / Michael Amirkhanian, Massey Knakal

The property sold for $1.2 million, or $169 per square foot.

180 Malcolm X Blvd (Brooklyn)

7,280 sf mixed-use bldg

n/a / E. Lundberg, E. Eckhardt, Marcus & Millichap

The property sold for $1.07 million, or $146 per square foot.

Financing Address

Size

Borrower / Representative

Lender / Representative

Notes

159 Madison Ave

118-unit apt. bldg

159 Madison Owners Corp. / n/a

NCB / n/a

A $6.5 million first mortgage and a $500,000 line of credit were arranged for the building.

141-05 Northern Blvd (Queens)

126-unit apt. bldg

NB Owners Corp. / n/a

NCB / n/a

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

142-15 Franklin Ave (Queens)

72-unit apt. bldg

The Franklin Owners Corp. / n/a

NCB / n/a

A $2.8 million first mortgage and a $500,000 line of credit were arranged for the building.

170 East 88th St

37-unit apt. bldg

168-176 East 88th Street Corporation / n/a

NCB / n/a

A $2.5 million first mortgage and a $500,000 line of credit were arranged for the building.

2866 Marion Ave (The Bronx)

68-unit apt. bldg

2866 Marion Avenue Owners Inc. / n/a

NCB / n/a

A $1.7 million first mortgage and a $400,000 line of credit were arranged for the building.

36 West 15th St

11-unit apt. bldg

36 W. 15th St. Owners Corp. / n/a

NCB / n/a

A $935,000 first mortgage and a $500,000 line of credit were arranged for the building.

332 and 334 West 19th St

10-unit apt. bldg

Chelsea Court Equities Inc. / n/a

NCB / n/a

A $750,000 first mortgage and a $250,000 line of credit were arranged for the building.

230-240 East 30th St

37-unit apt. bldg

23830 Owners Corp. / n/a

NCB / n/a

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

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

100 March 2014 www.TheRealDeal.com

APRIL th 6

COURT ORDERED SALE*

AUCTION MINIMUM BID $2.5 MILLION

RITZ-CARLTON NEW YORK RESIDENCES 10 WEST STREET, UNIT 29A BATTERY PARK CITY

1,944 Square Foot 3-Bedroom/3.5 Bath Luxury Residence Spectacular Views Of The Statue Of Liberty & Hudson River Gourmet Kitchen With High End Appliances

For Open House Dates And Times Please Visit RitzCondo.SheldonGood.com The Public Auction will be held at the Ritz-Carlton Battery Park Hotel on April 6th at 11:00am

Broker Participation Welcome Refer to Broker registration requirements.

RITZCONDO.SHELDONGOOD.COM Sheldon Good & Company • 488 Madison Avenue, Ste. 201 • New York, NY 10022 •

Ryan Cuticelli, Broker of Record Lic.#10491203577 •

800-516-0015 Jonathan P. Cuticelli Licensed Auctioneer # 1387302

*The property will be sold via court ordered public auction sale. Initial deposit $250,000 (increased to 10% of purchase price within 3 business days). Closing within 30 days of auction sale. In the matter of Jenzack Partners, LLC v. REMI Capital, Inc., et al., N.Y. Sup. Ct., Index No. 109286/2011. Counsel to the Receiver: Mitchell B. Rieter, Esquire, Goldberg & Connelly, 66 North Village Avenue, Rockville Centre, NY; Counsel to Jenzack Partners, LCC: Barry G. Braunstein, Esquire, Riemer & Braunstein LLP, Seven Times Square, New York, NY. Feel free to contact him at 212-789-3132. The information contained herein is subject to inspection and verification by all parties relying on it. No liability for its inaccuracy, errors, or omissions are assumed by the sellers, their representatives or auctioneer. ALL SQUARE FOOTAGE, ACREAGE AND DIMENSIONS IN THIS BROCHURE ARE APPROXIMATE. This offering is subject to prior sale and may be withdrawn, modified, or canceled without notice at any time. This is not a solicitation or offering to residents of any state where this offering is prohibited by law. ©Sheldon Good & Company, LLC, 2014. All Rights Reserved.

Other Deals Youngwoo delivers plan to turn Bronx post office into market

Brookfield’s 450 West 33rd Street to get $200M overhaul

Youngwoo & Associates is among developers in talks to redevelop the landmarked Bronx General Post Office, which the U.S. Postal Service intends to sell despite an outcry from residents. Youngwoo is proposing to use the site to build a marketplace, much in the vein of its ambitious plan for the Kingsbridge Armory in the Bronx. The winning Armory proposal called for the world’s largest indoor ice center. The Bronx post office, Young Woo located at 558 Grand Concourse, is a 175,000-squarefoot building. Officials at the federal agency are seeking other offers from possible buyers. “We cannot overlook the decline of letter mail volumes and the growth of online services, particularly for the postage for packages,” a spokesperson for the U.S. Postal Service told the New York Times. “Both factors reduce foot traffic at post offices like the Bronx and others all around the country.”

Brookfield Office Properties has officially decided to give its 1.7 million-squarefoot tower at 450 West 33rd Street a $200 million renovation. The upgrade will include a pleated glass façade and a deck over the Lincoln Tunnel entrance to better integrate the 16-story building with the developer’s $4.5 billion Manhattan West project on the Far West Side, Bloomberg News reported. Brooklyn architecture firm REX was hired to handle the renovations. Josh Kuriloff and Bruce Mosler of Cushman & Wakefield are serving as exclusive leasing agents on Manhattan West. Once complete, the five-acre site near the High Line is slated to hold two office towers, one condominium as well as retail space and a more than two-acre park. TRD

4 World Trade Center

4 WTC is a high-end party venue — for now

Larry Silverstein’s 4 World Trade Center has been buzzing with activity — just not of the leasing variety. While the 978-foot Fumihiko Maki-designed tower has only leased about half of its 2.3 million square feet, it has been serving as a high-end event venue, playing host to cocktail parties, film shoots and fashion shows. And Silverstein Properties has been able to charge a daily fee of $50,000 per floor for the privilege. Recently, a Super Bowl commercial starring Arnold Schwarzenegger, Don Cheadle and a llama was filmed at the tower. Once tenants began filling the building — The Port Authority of New York and New Jersey and the city of New York have committed to large spaces but are yet to move2/25/14 in — the 10:19:18 events will 16460_RELaw_9.5x6.75.eps AM be discontinued, a spokesperson for Silverstein Properties told the Wall Street Journal.

450 West 33rd Street

Vacant retail spaces line Eighth Avenue in Chelsea

Google’s Chelsea headquarters on Eighth Avenue

More than 12 businesses along Eighth Avenue between West 14th and West 23rd streets shuttered last year and early this year as retailers struggle to pay rising rents. The result is many empty storefronts lining the Chelsea stretch. The bar Rawhide at 212 Eighth Avenue, clothing shop Camouflage at 139 Eighth Avenue and Pinkberry at 170 Eighth Avenue are gone. Rawhide’s rent jumped to $27,000 per month from $15,000 per month, leading the owners in March 2013 to leave the space, which has not yet been filled. Pizza chain Project Pie was in talks to replace Rawhide, but plans were dropped. “The neighborhood is indoctrinated with tourists, people visiting the High Line and Google,” Camouflage owner Norm Usiak told DNAinfo. “They don’t come to small stores, they want to go to chains, places they know.” TRD

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Tribeca

710 Riverside Drive

Reade Chambers 71 Reade Street

Harlem

Sales have launched at the rentalturned-condo building developed by Tahl Propp Equities. Eighteen of the building’s 36 units have been converted into condominium apartments, while the rest remain rentals. The one-, two- and three-bedroom apartments range in size from 687 to 1,319 square feet, and in price from $425,940 to $817,780. Building amenities include a fitness center, kids room, outdoor seating area, bike storage, and sky terrace. The building offers views of the Hudson River and is adjacent to Riverside Park. Warburg Realty is the agent. Contact: www.warburgrealty.com.

Sales have launched for four units of the 17-unit boutique condominium, developed by CBSK Ironstate and designed by architect Annabelle Selldorf. The available units include one-, two-, three- and four-bedroom apartments that range in size from 991 to 3,035 square feet, and in price from $1.7 million to $5.63 million. Building amenities include a 24-hour doorman, fitness center, landscaped roof garden, private on-site parking garage and children’s playroom. Douglas Elliman is the agent. Contact: www.readechambers.com.

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540West 540 West 49th Street

The Lara 113 Nassau Street

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Sales have launched at the 114-unit residential building, developed by Fortis Property Group and Wonder Works Construction Corp. Residents are expected to move in by late 2014. The studios, one- and two-bedroom apartments, duplex units, and penthouses range in size from 501 to 1,625 square feet, and in price from $745,000 to $3.5 million. Building amenities include a doorman, fitness center, two landscaped roof decks, a 6,000 square-foot courtyard with a reflecting pool, an openair movie theater and a pet spa. Halstead Property Development is the agent. Contact: www.540west.com.

Leasing has launched at the 168-unit residential building, developed by Ann/Nassau Realty LLC, and designed by SLCE Architects. The building features studio, one- and two-bedroom units. Monthly rents start at $2,450 for studios, $3,100 for one-bedrooms and $5,900 for two-bedrooms. The building includes 10,000 square feet of indoor and outdoor amenity space, including a fitness center, media/ game room and a roof terrace. Triumph Property Group is the agent. Contact: www.thelaranyc.com.

Long Island City

Upper West Side

The View 4630 Center Boulevard The 184-unit condominium project first sponsored by Rockrose Development and now TF Cornerstone — two segments of the Elghanayan real estate family — is sold out. Sales launched in 2008 and reached the 50 percent mark in 2011. The 18-story building features one-, two- and three-bedroom units up to 1,879 square feet, at an average price of $1,067 per square foot. The building includes the most expensive condominium unit ever sold in Queens, a duplex penthouse for $3.1 million. Building amenities include floor-to-ceiling windows and private balconies or terraces, a 24-hour doorman and concierge and a garage. Modern Spaces is the agent. Contact: www.livingtheview.com

The Larstrand 227 West 77th Street

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104 March 2014 www.TheRealDeal.com

LEASING UPDATES

Lower Manhattan

The 181-unit luxury residence developed by Friedland Properties and designed by SLCE Architects is now more than 50 percent leased. The studio, one-, two- and three-bedroom units range in size from 434 to 1,735 square feet. Rents start at $3,175 for studios and $16,950 for three-bedrooms. Building amenities include an indoor lounge and bar, fitness center, children’s playroom and a 5,400 square-foot rooftop terrace. Rose Associates is the leasing and managing agent. Contact: www.thelarstrandnyc.com. TRD

RESIDENTIAL DEALS Tribeca $2.65 million 288 West Street, Apt. 2W

Two-bedroom, one-bath, 1,850-squarefoot unit in a co-op building built in 1856. The building was once a spice warehouse. The apartment has 12-foot beamed ceilings, exposed natural brick throughout, sound-insulated pine columns and open kitchen with poured-concrete countertops. Building has newly renovated lobby, 1,000-square-foot roof deck with views of the Hudson River, Statue of Liberty and the Woolworth building; common charges $2,768 per month; asking price $2.7 million, 1 month on the market. (Brokers: Erin Stabb, Town; Maria Manuche, Corcoran) “The apartment has more of a rustic, masculine feel, yet the new buyer and two previous owners were all independent female professionals. I was impressed by this pattern, as it embodies a snapshot of the NYC female professional of the 21st century. The property received strong interest and sold in less than 4 weeks. The biggest challenge was that it was a two-bedroom with one bath. But everyone who came in liked it. Inventory is still at record lows, putting sellers at the advantage.” Erin Stabb, Town

Kips Bay $2.68 million 121 East 23rd Street, Apt. 18A

Three-bedroom, two-and-a-half bath, 1,743-square-foot unit in a 2005-built condominium building, Crossing 23rd; apartment has triple exposure and two private balconies; building has doorman and concierge; common charges $2,675 per month; taxes $1,277 per month; asking price $2.6 million; 10 days on the market. (Brokers: Lee Lewis, City Connections; Anna Lin Weichert, Mazzeo Agency) 106 March 2014 www.TheRealDeal.com

“The apartment went very quickly; we had fully executed contracts within 10 days. I showed it to around 70 people in three days. We had a crush of interest, and the buyer was willing to pay $75,000 over the list. It was a good, solid deal. The great thing about this unit is it’s on the 18th floor, so it clears all the other buildings around. There are amazing southern, eastern and northern views from this apartment. It’s especially fantastic at night because you can see the Empire State Building and Chrysler Building. The other cool thing is that it has two private balconies — one off the living room, and the other one off the second bedroom.” Lee Lewis, City Connections

Times Square $3.1 million 1600 Broadway, Apt. PH3C

Two-bedroom, two-and-a-half-bath unit in a newly constructed condo building; apartment has views to Times Square, the Freedom Tower and the Hudson River; building has gym, virtual putting green, conference center, billiards room, 24-hour doorman and concierge; common charges $2,225 per month; taxes $1,584 per month; asking price $3.195 million; 47 days on the market. (Brokers: Nicole Gary, Keller Williams; Bradley Christie, Demsker Realty) “My client had purchased the unit a little over a year ago, and when he walked in the apartment, he loved it. He bought it for $2.55 million last December. Since then, he made a couple of changes — new floor, new lighting. He decided he didn’t really use it so he called me up and asked what we could get for it. The market has really changed in the past year, so we put it up for $3.195 million and we sold it for $3.1 million. The buyer never actually saw the apartment. Her broker came and took a video, and she bought it sight unseen.” Nicole Gary, Keller Williams

Compiled by Sasha von Oldershausen

Follow The Real Deal on Twitter: twitter.com/trdny

Rising stars

from page 68

square feet in the Columbus Circle and Union Square areas, Juda told TRD. It’s also considering developing a 44,000-square-foot building in Downtown Brooklyn, on Willoughby Street. Jay Suites would enter a partnership with the landlord and hold a significant equity stake in the building, Juda said. Because Jay Suites uses Freddy’s contractors to build out its office spaces, Juda said the firm can undercut its competition by up to 30 percent. And there’s a simple system to how it chooses where to locate. “We really look at where Regus is located, and we try to open the next door,” Juda said, referring to the shared office titan. Shared office space providers are among the city’s fastest-growing tenants. The five largest providers have a combined footprint of over 2.8 million square feet across all major Manhattan submarkets, a TRD analysis found.

Lyon Porter, 33, and Ari LeFauve 34, Town Residential Lyon Porter and Ari LeFauve have more than a few things in common. They both grew up in rust-belt cities on Lake Erie, wore the number 14 on their jerseys when they played college sports, and have young sons. And LeFauve’s first name, Ari, means “lion” in Hebrew. They’re also successful business partners, having done about $500 million in deals since teaming up several years ago. While they don’t specialize in top-of-the-market trophy listings — their priciest condo sold for around $8.5 million — they have racked up big overall numbers by closing a high volume of deals. They moved to Town Residential in 2012 from MNS, where they were the firm’s top-ranked resale brokers. Now

Lyon Porter, 33, and Ari LeFauve, 34, who team up at Town Residential

they manage Town’s Greenwich Village and Soho office, overLuciane Serifovic, seeing more than 2,000 rental units. They’re also getting 32, was recently named director of their feet wet in the new development business, with sales rentals at Douglas in developments such as Chelsea’s 420 West 25th Street Elliman. and Williamsburg’s 190 Conselyea Street. “We’re pitching more new developments than ever before,” Porter said. “But we’ve never forgotten about our rental business.” The duo is also managing a portfolio of 500 townhouses in the metropolitan area, including about 100 units in Manhattan and Brooklyn, for Australian real estate investment trust Dixon Advisory, LeFauve said. The majority of the town55259 homes are beingJob converted PAUTH into single-family rentals, Real Deal 1/4 Porter pg and LeFauve and 4.625” x 6.375” are involved in all aspects 2.28.14 p2 of the design, consulting and leasing. They recently received a letter of intent for a sale at 582 Second Street at $1,400 per square tats in 2003. For her interview with Gordon Golub, now a foot, which is a price-per- top executive at Urban Compass, Serifovic, then 20, wore The Port Authority of New York and New Jersey is seeking to identify square-foot record for a glasses to appear more mature. firms interested in responding to a Request for Proposals (RFP) for the “I could barely see him during the interview,” she said. walk-up in the borough, sale of land and development rights on Dyer Avenue and 33rd Street. Until 2007, she worked out of Citi Habitats’ Upper Porter said. East Side office as a manager, which she said became the RFP #36900 is available on-line at: http://www.panynj.gov/businessfirm’s top-producing office in the city during her time Luciane opportunities/bid-proposal-advertisements.html. Addenda to the RFP, Serifovic, 32, there. She then ran the firm’s 250 Park Avenue South if any, will be posted at this site. Monitor the advertisement on the Douglas office, which she told TRD became the top-producing web site to ensure your awareness of any changes. Elliman office per desk. If you have any technical problems accessing the documents online, A native of Rio de Janeiro, Serifovic joined Elliman as a vice president in the propemail us at askforbids@panynj.gov or call (201) 395-3405 for assistance. Serifovic’s first job in the erty management division in July 2013. And last month Your e-mail should include the RFP number, your firm name, email U.S. at age 18 was making she was promoted to a higher-profile position at Elliman: address, contact person, mailing address, and telephone number. Joint cappuccinos in an Italian director of rentals. Ventures/teams are acceptable. coffee shop. She didn’t She will now oversee the firm’s New York rental operations speak much English at the and provide support for Elliman’s other national markets. It is currently anticipated that proposals shall be due by 2:00 PM on time, and would trip up In 2013, Elliman did nearly 9,000 rental transactions in May 1, 2014 or as otherwise indicated in the RFP documents. Proposals on simple orders. But she the city, she said. The firm acts as the exclusive rental agent must have the RFP Number and full legal firm name clearly indicated mastered the language in for major landlords, and also does property management on the outside of the package. about eight months, she for mega-landlords such as the Moinian Group. Send Proposals(s) to: The Port Authority of NY & NJ, Attn: RFP said, and went on to earn She’s already revamped Elliman’s agent training proCustodian, Procurement Department, 2 Montgomery Street, 3rd Floor, her real estate license in gram, she said, coming up with the idea for an app that alJersey City, NJ 07302. 2002. lows agents to register for classes with their iPhone. After a yearlong stint at “I don’t think they know my age,” Serifovic quipped, alA VALID PHOTO ID IS REQUIRED TO GAIN ACCESS INTO THE residential firm Citysites luding to the fact that she’s one of the youngest people in BUILDING, IF YOU ARE HAND DELIVERING YOUR PROPOSAL. Realty, she joined Citi Habi- top management at the firm. TRD

THE PORT AUTHORITY OF NY & NJ REQUEST FOR PROPOSALS FOR SALE OF LAND AND DEVELOPMENT RIGHTS ON DYER AVENUE AND 33RD STREET (RFP # 36900)

108 March 2014 www.TheRealDeal.com

PHOTOGRAPH OF porter and lefauve by max dworkin

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Residential market

from page 22

from an economic perspective, said Tim Crowley, a managing director at development company Flank, which specializes in boutique condos. Brokers are still charged with coming up with a catchy word-of-mouth campaign for the property, but the budget allocated to that effort is much slimmer. Typically, on large projects, the marketing budgets are based on a percentage of how much the building is forecast to bring in when it’s sold out, Crowley said. “It ranges between 1.5 and 2 percent or perhaps even 2.5 percent. In that case, you’re managing a marketing budget that includes myriad components like advertising, sales centers, iPad apps, you name it. “With a very large new development, there’s an ability to craft a message about what the building is going to be,” he continued. “You can use that building to create a real estate destination.” Because boutique buildings are smaller,

“you may be highlighting a block, but it’s probably not going to be transformational in terms of what it does to the real estate around it.” Selling a boutique condo can actually be a lot like selling a few re-sales, Itzhaki said, and there are no specific guidelines for doing it well. Indeed, Itzhaki said he will not commission a website for Modern19 and will not even be producing brochures. The release of the units, whether it be all at once or a few at a time, is also primarily the broker’s decision, as opposed to being part of a larger, precisely planned strategy that allows for pricing amendments based on market demand. A good broker will often already have a long list of prospective buyers lined up before a building even comes online. Last year, Fredrik Eklund and John Gomes of Elliman had a 16-unit condo at 11 North Moore Street 50 percent sold out after only 72 hours on the market, thanks to spreading

the word about the project using social media (see related story on page 43). Crowley said Flank likes to release units approximately six months before buyers can close on their purchases. “It puts them in a place of comfort in regard to dispensing their primary real estate and getting their affairs in order,” he said. Even newbie brokers can have the instincts required to market these projects successfully, Steinberg said, but developers want established track records, meaning the best bet for those without new development experience is to join an existing team where they can develop that experience. “The competition is brutal,” he said. “Everyone is competing with us these days. Developers are automatically attracted to brokers who have experience doing this, which is unfair to the younger or new brokers who might be very good at it but won’t get the chance.” TRD

es, he said. But it’s helpful to have a broader business — a lesson he and many brokers learned during the lean times in 2009 and 2010. While some brokers are simply expanding their repertoire to include the other side, others are incorporating brokers with other specialties into their team. Town Residential has made a name as a firm where residential brokers can dip into commercial listings, and agents and brokers can form novel teams for transactions that involve multiple uses. Tom Brady and Martin Newman of Town work together, with Brady often selling a multi-family investment property that Newman then fills with tenants. They hooked up because they realized that they could miss out on listings if

they didn’t broaden their scope. For example, Martin represented the seller of 133 Mulberry Street, a commercial property. The seller later tapped Newman to rent out units at some of his other buildings, 116 and 118 Macdougal Street. They credit a collaborative environment at Town for helping them set up their successful partnership. “For us, team work is [needed] because of the sheer volume” it creates, said Newman. “Exactly,” echoed Brady. “I’d be missing out,” without the cross-pollination the partnership provides, he said. Together, they have been able to cull enough business to stay more than afloat. “Listings beget listings,” Brady said. “Of whatever type.” TRD

Double dipping from page 24 Broader business Some brokers have even found themselves drawn into retail brokerage from the residential side. For instance, Joe Robinson at Bond New York sold the owner of the popular German restaurant Wechsler’s Currywurst in the East Village his coop at 136 East 51st Street a couple years ago. “He mentioned he wanted to open a restaurant and asked if I could help,” Robinson said. “My first reaction was ‘no.’ ” But Robinson held his tongue and ended up helping his client locate the spot for Wechsler’s Currywurst. As a result, he formally expanded his business into retail, which he says is far more taxing than residential brokerage. “It’s a painstakingly long process,” to rent out retail spac-

Elliman to add sales firepower to 432 Park

Brought in as co-sales agent for tallest residential building in Western Hemisphere By Hiten Samtani acklowe Properties and CIM Group officially brought Douglas Elliman Development Marketing on board last month to help with sales and marketing efforts at 432 Park Avenue.

When complete in 2015, 432 Park Avenue, at 1,396 feet, will be the tallest residential building in the Western Hemisphere

Elliman was serving as a consultant on the luxury condominium project from the outset, but will now be its co-exclusive sales agent, a spokesperson for 432 Park told The Real Deal exclusively. Elliman’s “evolving and expanding role will be an asset 110 March 2014 www.TheRealDeal.com

to us as we complete the sellout of this fantastic building,” Richard Wallgren, 432 Park’s director of sales, said in a statement. Wallgren will continue to oversee sales at the tower, which is located between 56th and 57th streets. Already one of the city’s 20 tallest towers, when it’s complete, the building is slated to rise to a height of 1,396 feet, which will make it the tallest residential building in the Western Hemisphere. The 96-story Rafael Viñoly–designed tower, is a “truly unique property of architectural distinction that will forever change the Manhattan skyline,” said Douglas Elliman Development Marketing chief executive Susan de Franca. “We look forward to our continued collaboration on 432 Park Avenue and to being part of its tremendous success story.” Recent sales efforts at the project, which Harry Macklowe has referred to as the “culmination” of his career, included sending sales representatives to Moscow’s Ritz-Carlton hotel, which is reputedly a popular hangout for Russian oligarchs. Over half of the tower’s 104 units have already sold, according to a project spokesperson, though half-floor apartments, starting at $17.25 million, and fullfloor penthouses, starting at $74.5 million, are still up for grabs. The decision to bring Elliman on at 432 Park continues

a recent shift away from developers marketing big-ticket projects completely in-house. In November, the Related Companies announced a $5 billion partnership with Corcoran Sunshine, the new development marketing wing of the Corcoran Group, to handle the sales of the residential component of its Hudson Yards project as well as other New York City projects. 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 In the February magazine story “Jared Kushner, the accidental CEO,” TRD incorrectly stated one of the charges that Charles Kushner had been arrested for. He was arrested on charges of tax evasion, illegal campaign donations and witness tampering. In the February magazine feature “In their Words,” a comment from Donald Trump was incorrectly attributed. It came from his Facebook page. In the February magazine’s Q&A, “Affordable housing: poised for de Blasio boost,” Donald Capoccia’s name was misspelled. In the February magazine story “Sam Boymelgreen, clearing his family name?” TRD misstated the location of a condominium building Boymelgreen is developing. The building is rising at the corner of Washington and Fulton avenues, in Brooklyn.

www.TheRealDeal.com January 2012 00 RENDERING BY DBOX FOR CIM GROUP AND MACKLOWE PROPERTIES

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Balazs

from page 35

an historic government building in the Camden neighborhood of London, near Google’s new headquarters there. Likely to be called the Standard London, the property will have 280 rooms, said Balazs, who will be an operator and is partnering with London-based Crosstree Real Estate Partners. In addition, last month, Balazs opened another hotel, a renovated 1886 former firehouse in the Marylebone section of London. The 28-room project is called Chiltern Firehouse. It was developed in partnership with Harry Handelsman, a British developer; Renzo Rosso, founder of the Diesel apparel company; and Eric Schmidt, executive chairman of Google. Balazs also has an ownership stake in the real estate there. Meanwhile, in New York, Balazs also recently unveiled a redesign of the Standard East Village, which is on the Bowery. In addition to Balazs and Heller, Ironstate Development is also an owner. Fortress Investment Group is the lender. Whatever the reason, changes are afoot at the property. The centerpiece, a tall curvaceous glassy tower, will no longer serve as the entrance. Guests will now enter through a former tenement building on the site in a bid to make the hotel better fit into its historic neighborhood. Before, the property “looked like it belonged in Dubai,” Balazs said. And that is not the only recent change. In January, Narcissa, a farm-to-table restaurant, opened there. Some 40 percent of what ends up on the plates at the restaurant will come from Balazs’s 20-acre spread at Locusts-on-Hudson, his house/event space near Rhinebeck, N.Y. Narcissa, he said, is named for his favorite cow there. Analysts say asserting that much control over the

ment, a spokesperson said. “More control of the product gives you a larger share of the profits,” said hospitality consultant and hotel investor Steven Kamali. “He continues to control the quality, he controls the success, he maintains a flag on the brand.” Kamali also noted that Balazs’s sale of the Standard to a

company he’s still an investor in was the best of all possible outcomes. “Nothing could be better for him, because he stays in the driver’s seat,” he said. While Balazs is in the thick of his London projects, he’s also working on more projects stateside. Though still years away from completion, he’s creating a spa at the so-called SuperPier, which is being pioneered by Young Woo in the Meatpacking District. Part of a sweeping retail project, the spa will resemble Balazs’s Standard Spa Miami Beach, he said, but won’t bear the Standard name. Other efforts to diversify Balazs’s business line, however, have not panned out. In September, Balazs was tapped to redevelop the former TWA terminal at JFK Airport, a 1962 Jet Age landmark. Empty since 2001, the iconic Modernist structure is owned by the Port Authority of New York and New Jersey. The Standard Flight Center was to have a restaurant, spa and museum inside, as well as two new hotel towers. But in late January, Balazs unexpectedly pulled out, citing bureaucratic hurdles. “As much as that building is iconic, dealing with the Port Authority became too much and too slow-going for us,” he said. Hotel developer Morris Moinian said Balazs’s decision to focus on his existing projects was a smart one. Overseas, “he will be building a brand that will take some time to become a household name,” said Monian, principal of Fortuna Realty Group, a real estate investment firm focused on hospitality that has competed with Balazs for deals. “But he can put a box on dirt and make it the sexiest box anywhere.” TRD

63rd Street, a condo conversion with six floor-through units less than half a block from Second Avenue. A penthouse there went into contract earlier this year asking over $4 million, and after a bidding war that included an outfielder for the New York Yankees, according to Steinberg, the broker representing the developers. The winning bidder, Steinberg said, bought with the subway in mind. So did the recent buyer of 230 East 63rd’s second-floor unit, which went to contract earlier this year for “very close” to its $3.14 million asking price, Steinberg said. “In both cases,” he said, “they felt that the Second Avenue Subway was an untapped

resource that they were going to plan on. They think that the property values are really a diamond in the rough there.” Buyers are not the only ones. Michael D’Alessio, whose firm Michael Paul Enterprises LLC is developing 230 East 63rd, said he picked the early 20th-century building for a condo conversion in part because of the subway. He says sites like his proximate to Second Avenue could go up 20 to 25 percent in value as the subway rumbles to life. “I think it’s one of the things that’s driving the interest in our condo,” D’Alessio said. Buyers “feel like they’re getting in at the ground floor.” TRD

“He is very disciplined and receptive,” Santomassimo said. Jungreis credits Massey Knakal’s analytic approach to brokerage with revolutionizing the local industry in the 1980s. Massey Knakal, Jungreis said, brought a corporate and professional model that forced other brokers to retool. Comparing Knakal with Tiger Woods, Jungreis said at first other golfers thought Woods was a wunderkind who could not be copied. Then they realized his strength lay in a better form of training, and other golfers saw they could emulate that, improving the overall quality of the sport. “He took real estate brokerage to such a refined level, he made the bar so much higher,” Jungreis said. “He made everyone around him better.” Now, however, Jungreis estimates that he’s sold 1,500 New York City buildings or more. Jungreis is also well on his way to matching Knakal’s $10 billion figure, which for brokers who focus on smaller deals, remains a significant achievement.

Just last year, Jungreis sold more than 300 individual buildings for a total of more than $2 billion, compared with Knakal, who sold 87 buildings for about $1 billion. Jungreis has grown his firm through large assignments of the sort that Knakal is vying for. Earlier this year, Jungreis landed the exclusive for two massive apartment buildings owned by Urban American that could sell for a combined $500 million. And last year, he sold a Queens portfolio for $367 million and a Manhattan portfolio for $247 million. “I admire Aaron very much. I think he is a good broker. He works his tail off,” Knakal said. But, Knakal added, “I will do everything I can to make sure he does not catch up to me.” But as Knakal pushes to close more than $2 billion in 2014, he will have competition from all sides. Nonetheless, the number of buildings sold and the dollar volume of sales are not the final goal. “What it really boils down to is how much money you make,” he said. “Ultimately how much money you make is what you are in business for.” TRD

André Balazs with former girlfriend Chelsea Handler

The Mercer Hotel

supply chain is rare in the hotel industry. Even hotelier Ian Schrager, who is often considered the boutique hotel’s inventor, outsourced his food and beverage operations, sources note. Schrager was traveling and unavailable for com-

Subway from page 44 with Third and Lexington avenues. The statistics suggest that the gap is already closing. The average sales price per square foot for condos on Third Avenue and eastward increased 11.4 percent in 2013 from the previous year, according to CityRealty. That was slightly above the 10.4 percent increase for the whole area, though less than the 14.3 percent rise for core Upper East Side. As for co-ops, the average price per square foot was up 7.7 percent for Third eastward — above both the 5.3 percent jump for the entire area and the 4.4 percent rise for the neighborhood’s core. Those increases are playing out at places like 230 East

Knakal from page 60 a valuation,” said Knakal, who can rattle off the number of weekly business pitches he’s made over the past year. He aims to call his top five prospects for listings each week, and pitch new business five times a week. He also keeps stats on how many days a week he goes to bed by 10:30 p.m. (he shoots for four) and how often he drinks green juice. He tracks all of the results on a multi-year “scorecard.” Ever since his days as a Little League Baseball pitcher, when he began keeping personal data records, he’s “been a nut for statistics.” The range of figures has ramped up exponentially since 2011, when he hired a professional coach, Rod Santomassimo, president of the North Carolina–based consulting firm the Massimo Group. Knakal went from recording a handful of stats in a ledger to using a giant spreadsheet. Santomassimo said most brokers he advises look at 10 to 20 metrics, compared with Knakal’s 130. The two check in every Monday. 112 March 2014 www.TheRealDeal.com

www.TheRealDeal.com January 2012 00

REAL ESTATE IS MORE THAN A BUSINESS OF BUILDINGS, ADDRESSES AND SALES. IT’S A BUSINESS OF PEOPLE, RELATIONSHIPS AND COMMUNITIES.

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Town

from page 48

company required additional capital in 2011, 2012 and 2013, Sitt allegedly insisted Heiberger up his contribution to 35 percent and Thor lower its contribution to 65 percent, according to Heiberger’s claims. Thor reiterated late last month that the company is on solid footing. In an email sent to Town managers Feb. 28, Thor CFO Michael Schurer said: “I can assure you that the company remains financially sound, that it has a ready and sufficient source of new capital to ensure all of its obligations and commitments can be met without concern.”

walk out the door, your bottom line is significantly hit.” Industry insiders speculated that an acquisition offer likely came from a firm looking to make an entrée into the New York market, rather than an established firm with offices already in the city. Sitt and Heiberger declined to identify the interested party.

Uncertain future

New development Town’s failure to gain significant traction in the new development marketing space may also have impacted revenues, sources said. “New development does more than just add to the bottom line, it adds a tremendous amount of exposure,” said Stephen Kliegerman, head of Halstead Property Development Marketing. “It also provides your brokers with better opportunities to access new development inventory.” Town is currently marketing just one major new development condo: The Charles, a 29-unit condo at 1355 First Avenue developed by Bluerock Real Estate and Victor Homes. Sales are being led by Town’s Jason Karadus and Ginger Brokaw. Only four units remain, according to real estate listings website StreetEasy. Besides the Charles, Town has signed on only smaller, boutique condos, such as V33, a seven-unit condo at 33 Vestry Street, a five-unit project at 55 Warren Street, and 70 Greene Street, a three-unit condo. The firm was handling several rental buildings for the Moinian Group in Lower Manhattan, but that arrangement ended in December 2012, possibly because of damage some of the buildings sustained in Hurricane Sandy. Kliegerman said the reason for Town’s slow start in new development may have been a lack of an experienced team. “New development is a chicken-and-an-egg game,” he said. “In order to get good people, you need to have the projects. In order to get projects, you need good people.” The new development team at Town took a big hit in 2013 when Price departed for Elliman, sources said. But Town fought back, suing Price in October, claiming he owes the firm nearly $500,000 in profit-sharing loans and that he breached a non-compete agreement. Price declined to comment. While representatives for Bluerock and Victor Homes did not respond to requests for comment, Town’s Karadus told TRD that the sponsors were not scared off by the dispute. “At every firm I’ve worked at, including Corcoran and Elliman, there were power struggles,” he said. “This one, unfortunately, was maybe just a little more public. I don’t think the sponsors are rattled any more than we are.”

The Charles at 1355 First Avenue, a new development Town is currently marketing

A nine-figure sale?

Sitt and Heiberger do appear to have suffered some investor fatigue in recent months. And to recoup their capital contributions and loans, in 2012 and 2013, they allegedly agreed to find alternative sources of financing. The company negotiated to secure a loan of up to $7 million from Valley National Bank last year, according to court documents. Heiberger claimed, however, that while he personally guaranteed the loan per Sitt’s instructions, Sitt failed to do the same, and the loan application was rejected. Sitt also allegedly refused to allow Heiberger to transfer his interest in the company, or any of his equity in the firm, to new investors, the documents said. Heiberger alleged that he and Sitt entered into negotiations with an unidentified “leading international brokerage firm” in 2012 and 2013 to sell Town for a “nine-figure number.” But Sitt said he would only agree to sell the company

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Town’s headquarters at 33 Irving Place.

if he received substantially more than his fair share of the profits, Heiberger claimed. “Sitt and Thor have no one to blame but themselves for their failure to obtain the full return of their capital and loan contributions,” Heiberger stated in court documents. Industry sources were dubious that a nine-figure sum had been offered for Town. “That would be astronomical for a start-up without a great balance sheet,” Purcell said. Determining a sale price for Town could prove to be difficult, sources said. “The problem with figuring out what a real estate firm is worth is that the value of the company goes up and down in the elevator every night,” Olshan said. “If big producers

Town is so closely identified with Heiberger, it’s tough to imagine the shape of the brokerage without him. While he’s sidelined, mortgage-banking veteran Jeff Appel, who was appointed president and COO of the company in September, is leading Town’s operations. When Appel took over, he said the firm was looking to slow its growth and make operations more efficient. “The company has been moving at the speed of light for three years,” he said at the time. “At this point, it’s time to reorganize and plan for the future. We need to optimize those offices.” In other words, one brokerage CEO said, Appel was saying “we’re going to cut expenses back so that we can make this into a real company that makes money, as opposed to something that just looks pretty in order to recruit a lot of people.” The dispute between Heiberger and Sitt has led to uncertainty among the ranks at the company, brokers told TRD. With each day that the litigation continues, more top agents may consider departing, said people close to the situation. Indeed, while Town’s agent numbers remained steady last month, in the wake of the legal battle, one key agent, LaRocco, defected back to Elliman with her five-member team. LaRocco has listings for several high-profile properties — including a $10.75 million townhouse at 5 Centre Market Place in Nolita owned by Gregory Soros, an artist and son of hedge fund mogul George Soros, and a $35 million apartment at 115 Central Park West owned by Susan Soros, George Soros’ ex-wife — that she’s taking to Elliman. While LaRocco declined to comment on the ongoing litigation, she noted that Elliman offered her a “stable infrastructure.” A Town spokesperson denied any suggestion that the company might be suffering as a result of the lawsuit. He said Town hired an employee per day last month and noted that revenues were up 40 percent year-over-year in January. However, those revenue figures were before news of the lawsuit hit. But the spokesperson said Town also signed $78 million worth of sales exclusives, and $250,000 in rental exclusives in the two weeks ending on February 23. While some industry insiders expressed skepticism that Appel would fill Heiberger’s shoes, others said the mortgage veteran could surprise everyone. “Jeff Appel is a terrific guy,” Purcell said. “He was a successful mortgage broker, why can’t he be a successful person in this position?” However, Appel may find himself in an awkward position, trying to streamline the business against a backdrop of the Thor/Heiberger dispute. “He can’t just run the firm,” Purcell said. “He now has to deflect all the nonsense that goes along with it. It’s the white noise that comes from the industry. This is kind of like Page Six for our industry.” While some in the industry may be “dancing on the grave” of Town already, said top-producing Elliman broker Leonard Steinberg in a recent blog entry, they may not be wise to write off the company just yet. “I say ‘press the pause button,’ ” Steinberg wrote. “Joe Sitt is a very rich guy who has the capacity to weather big storms. … I would suspect he is not going to let this go without a fight. Regardless, I think it’s rather tacky to celebrate the misery of others.” TRD

www.TheRealDeal.com January 2012 00

FULL FLOORS At Grand Central. On Park Avenue. Beyond Expectation.

E N T I R E

2 6 T H

F L O O R

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F L O O R

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E N T I R E 1 6 T H F L O O R - 2 4 , 5 0 6 R S F Q U A L I T Y P R E B U I L D S A L S O AVA I L A B L E F R O M 3 , 2 1 6 - 1 4 , 2 0 6 R S F For leasing i n f o r m a ti o n , pl eas e c o nt ac t : Paul N. Glickman | Paul.Glickman@am.jll.com | 212.418.2646 Diana L. Biasotti | Diana.Biasotti@am.jll.com | 212.812.5751 Harley G. Dalton | Harley.Dalton@am.jll.com | 212.812.5838 Copyright ÂŠ Jones Lang LaSalle IP, Inc. 2014. All rights reserved. No part of this publication may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of Jones Lang LaSalle IP, Inc. Jones Lang LaSalle Brokerage, Inc., California license # 01856260. Jones Lang LaSalle Americas, Inc., California license # 01223413.

Tech tenants

BUILDINGS meet SERVICES

IN A NEW YORK

MINUTE Well, let’s give it a day

from page 42

lowing its $1 billion acquisition by the search engine in May. (In mid-2013, Yahoo moved to Blackstone’s 229 West 43rd Street, signing a 176,201-square-foot lease — the biggest lease of the year by a major tech brand.) But sources said Tumblr was eager to keep its own space, in order to maintain a separate identity. While the big deals are eye-catching, the most interesting tech and social media deal of the year may be one of the smallest. Google, whose social media arm, Google+, has struggled to take off, expanded in the Chelsea Market by 7,658 square feet, giving it over 300,000 square feet in the building. But sources close to the transaction told TRD that Google, which famously purchased 111 Eighth Avenue for its New York headquarters for nearly $2 billion in 2010, is already looking to expand into other buildings after struggling to push out tenants with long-term leases. However, at press time a deal was nearly done at Related Companies’ 85 10th Avenue for as much as 360,000 square feet, sources said. “What’s unique about tech and social media companies is the extent to which they value quality,” said Falk, who represents Chelsea Market and is involved in the 85 10th Avenue deal. “They like large floor plates … but equally as important is the quality of life, both in the building and on the street.” TRD

7 over 70

from page 62

Building and Rockefeller Center. He is also noted for establishing the value of the World Trade Center, prior to the terrorist attacks, on behalf of the insurance companies, and for more than 500 appearances as an expert witness in a variety of disputes. More recent projects include the new Fulton Street subway station in Manhattan for the Metropolitan Transportation Authority and the Barclays Center in Brooklyn for Forest City Ratner. He describes his career as “active as ever,” given the demands of the field. “Market data must be flawless and stand up to a detailed scrutiny of a judge,” said Von Ancken. “It demands your best for every case.”

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S idney R osenthal

idney Rosenthal says the only way his career will end is if “they take me out feet first.” A principal and executive managing director for Lee & Associates, Rosenthal, 80, has had a long and varied career. He’s assembled more than 30 building sites in Manhattan, including for 9 West 57th Street, which has some of the highest asking rents in Manhattan, as well as for the Sony Building and Park Avenue Tower. He’s also represented Meyers Brothers Parking Corporation and Kinney Parking as a consultant for site locations and acquisitions. Most recently, Rosenthal sold two parking garages on the Upper East Side — a total of 235,000 square feet at a cost of $75 Sidney Rosenthal million — to two private schools that plan to expand on those sites. “I’ve done it all,” he said. Other major transactions include the $17.5 million sale of a 8,600-square-foot mansion on Beekman Place to the government of Luxembourg in 2008, and the marketing of a site at 871 UN Plaza to the government of Germany. The result was an arrangement whereby the site owners sold the land to the German government and built a 100,000-square-foot building to house the German embassy and consulate.

J erome H aims

erome Haims, 80, opened Jerome Haims Realty Inc. in 1968. The real estate appraiser and consultant often values properties on behalf of city and state government agencies. Among the most recent cases in the more than 5,000 he’s prepared are the expansion of Penn Station, which began two years ago, the Queens West project and most recently Hudson Yards, the $15 billion, 15-structure mini-city rising on 360 acres on Manhattan’s West Side, for which Haims represented the MTA. What has piqued his interest most throughout his 45-year career? Defending his findings in court. “It’s stimulating and gets your competitive juices flowing when you’re up against an opposing appraiser who has a differing viewpoint,” Haims said. Now his son Eric is following in his footsteps, serving as seJerome Haims nior vice president of the firm. But Haims is not yet ready to give up his chair as president. “Why would I want to sit home?” Haims said. “I have it all right here.” TRD www.TheRealDeal.com March 2012 00

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www.TheRealDeal.com March 2014 119

MA r c h

CALENDAR

The Association of Real Estate Women luncheon program features guest speaker MaryAnne Gilmartin, president and CEO of Forest City Ratner Companies, who will speak about high-profile developments for which she has served as the point person. 11:30 a.m. to 2:00 p.m. Club 101, 101 Park Avenue. Fee: $100 for members of other CREW chapters and NYBC Council of Industry Women’s Organizations, $120 for nonmembers. Information and registration: www.arew.org.

CapRate Events presents “The New Jersey Gold Coast Investment Summit.” Featured speakers include Timothy Lizura, New Jersey Economic Development Authority president. Topics include a review of the state Economic Opportunity Act 2013 and Sandy relief updates. 7:30 a.m. to 4:15 p.m. Maritime Parc, 84 Audrey Zapp Drive, Jersey City. Fee: $225. Information and registration: www.cre-events.com/njgoldcoast2014.

7-8

The Center for Architecture, in collaboration with MUSE Film and Television, presents its fifth annual “Architecture on Screen.” The series features a selection of international productions on architecture from the 2013 Festival of Films on Art, as well as a panel discussion and reception. 3 p.m. to 8:30 p.m. The Center for Architecture, 536 LaGuardia Place. Fee: $10 for members, $15 for nonmembers per day. Information and registration: www.aiany.org.

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

The Institute of Real Estate Management presents the “IREM Asset & Property Management Symposium.” Featured speakers include Francis Greenburger, founder and CEO of Time Equities; and Michael Rudin, vice president of Rudin Management; as well as over 40 others. 8 a.m. to 4:30 p.m. New York Academy of Sciences, 7 World Trade Center. Fee: advanced registration $299 plus $6.97 registration fee, full rate $399 plus $7.95 registration fee. Information and registration: www.iremams.com.

20 21 22 23 24 25

The Storefront for Art and Architecture presents its 2014 spring benefit, “On the Fringe (of Fundamentals).” The benefit will celebrate the launch of OfficeUS, an experimental project that investigates the contributions of US architecture offices over the last 100 years. On the Fringe will honor composer and filmmaker Meredith Monk and Danish-Icelandic artist Olafur Eliasson. 6:30 p.m. to 9 p.m. Capitale, 130 Bowery. Fee: $250 per guest. Sponsorship registration available. Information and registration: www.storefrontnews.org.

26 27

The Council of New York Cooperatives and Condominiums in conjunction with Solar One presents “Intro to Green for NY Co-ops and Condos in 2014.” Workshops include quick and easy ways to reduce energy costs; complying with the city’s “Green Laws;” and strategies for engaging shareholders and unit owners in the process. 7 p.m. Location TBD. Fee: free for members, $30 for nonmembers. Information and registration: www.cnyc.com.

19-20

Buildings NY presents an exhibition featuring hundreds of products and services for New York buildings. Exhibitor categories include marketing and leasing; back office and building automation; environmental; maintenance and operations; security; design and construction; restoration and renovation; energy and energy management, and disaster relief. 10 a.m. to 5 p.m. on March 19, 10 a.m. to 4 p.m. on March 20. Javits Convention Center, 655 West 34th Street. Fee: Free with advance registration and for CNYC members, $50 on-site. Information and registration: www.buildingsny.com.

21-24

Architectural Digest presents “The Architectural Digest Home Design Show.” Margaret Russell, editor-in-chief of Architectural Digest, is the keynote presenter. Event includes design seminars, cooking demonstrations, and tabletop displays organized by Design Industries Foundation Fighting AIDS. 11 a.m. to 7 p.m. on March 21–23, 10 a.m. to 6 p.m. on March 24. Pier 94, 12th Avenue at 55th Street. Fee: Free for registered interior designers and licensed architects with preregistration; $30 for general admission online, $35 at the door. Information and registration: www.architecturaldigest.com.

The Manhattan Association of Realtors presents the “Global Real Estate Symposium.” Featured speakers include Steve Brown, president of National Association of Realtors; Lawrence Yun, chief economist for NAR; Kyle Kimball, president of the New York City Economic Development Corporation; Michael Samuelian, vice president of Related Companies; and Chris Smith and Austin Allison, technology experts. 9 a.m. to 5 p.m. McGraw Hill Conference Center, 1221 Avenue of the Americas. Includes lunch and cocktail party. Fee: $49 for members, $99 for nonmembers. Information and registration: www.manarrealtor.com.

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120 March 2014 www.TheRealDeal.com

The WX New York Women Executives in Real Estate presents its WX March Breakfast Meeting. Darcy Stacom, vice chairman of CBRE Group, will be the featured speaker. 8 a.m. to 10 a.m. The Harvard Club, 27 West 44th Street. Fee: Free for members and scholarship recipients, $40 for nonmembers. Information and registration: www.wxnyre.com.

The Building Owners and Managers Association presents the “9th Annual Cigar Night.” Includes dinner, cigars, open bar, and DJ set. RSVP required. 6 p.m. to 11 p.m. Rossini’s Restaurant, 108 East 38th Street. Fee: $260 per person. Information and registration: www.bomany.org. 0

COMINGS & GOINGS Carlton Group hires former Kushner exec

Kevin Swill

idtown-based real estate investment banking firm the Carlton Group tapped Kevin Swill, the former president of a financing arm of the Kushner Companies, to serve as its first chief operating officer. Swill will oversee the day-to-day operations of the company, and will be in charge of expanding the equity syndication and investment sales operations. Previously, he was president of Westminster Capital Associates, a part of Kushner Companies, where he helped with acquiring and recapitalizing roughly 13,000 units. He previously worked at Deutsche Bank, CIBC, Citibank and Merrill Lynch. Last fall, Carlton Group Chairman Howard Michaels announced the formation of a new investment sales team. By Mark Maurer

Top programmer, co-founder exits StreetEasy

Movers and shakers Carolyn Sebba joined Douglas Elliman Development Marketing as vice president of sales and marketing. A veteran of Manhattan’s real estate market since 1989, she has closed transactions totaling over $1 billion. She was previously a director of sales at the Marketing Directors.

Carolyn Sebba

ebastian Delmont, a co-founder and the top programmer at StreetEasy, last month became the last of a group of seven senior executives to be replaced or leave the website since it was acquired last year by the publicly traded Zillow. Delmont, whose title was chief technology officer, departed around the same time the company launched its second redesign since Zillow paid $50 million for the then 34-person company in August. Former colleagues credited him with developing the architecture of the popular website, most importantly a platform that understood New York City’s high-rise apartment buildings, a challenge that befuddled other national listings firms and led to Zillow’s purchase of StreetEasy. Since the acquisition, the entire senior staff has turned over. Robin Allstadt, former COO; Sofia Song, head of research and communications; Neeta Vallab, head of marketing; John Darby, head of product management; and Daniel Sultan, head of business development, resigned or were forced out. In addition, Michael Smith, company co-founder and CEO, was Sebastian Delmont replaced in September with Susan Daimler, the general manager of Zillow New York. “I decided to leave Zillow/StreetEasy,” Delmont told The Real Deal. “I enjoyed my time at Zillow/StreetEasy and wish them all the best.” By Adam Pincus

William Zeckendorf, Jr. dies at 84

eveloper William Zeckendorf, Jr., a real estate pioneer who built Worldwide Plaza and the Zeckendorf Towers overlooking Union Square, died Feb. 12 at Cristus St. Vincent Regional Medical Center in Santa Fe, N.M. He was 84. The son of William Zeckendorf, Sr., who put together the site for the United Nations Building, the younger Zeckendorf created a number of projects in New York City, Washington, D.C. and other cities. Born and raised in New York, he joined his father’s company in 1953, following 18 months of U.S. Army service in Korea. The elder Zeckendorf went bankrupt in 1965, but managed a comeback with a new firm in which his son also worked. Zeckendorf, Jr. similarly suffered a number of setbacks in his real estate career, hobbled by the early ’90s banking slump and making front-page news in March 2000 when collection attorneys broke into his penthouse apartment in the Delmonico Hotel to search for assets. His sons, William Lie and Arthur Zeckendorf, joined their father’s real estate business after college and now have their own firm, which developed 15 Central Park West and 50 United Nations Plaza. The family is considered among the real estate dynasties of New York City. William Zeckendorf, Jr. Zeckendorf, Jr. was a major player in changing the face of the once-seedy West Side and Times Square area into a modern office district, with projects such as Worldwide Plaza and the Crowne Plaza Hotel, at 1605 Broadway. Broker Robert Shapiro, who worked with Zeckendorf in assembling properties for projects such as Crowne Plaza, said, “he knew what he wanted and he ran after it.” “He was a pioneer of Eighth Avenue, [a place] that was known at the time as the Minnesota Strip; it was all pornography,” Shapiro recalled to The Real Deal. “We cleaned up more adult entertainment than [Mayor] Rudy Giuliani ever did.” By Julie Strickland and Adam Pincus

Greg O’Brien

Greg O’Brien was named chief executive officer of Jones Lang LaSalle’s Americas markets. O’Brien previously served as JLL’s CEO of markets solutions, leading businesses responsible for more than 60 percent of the Americas revenue. Before that, he served as CEO of brokerage. John Gates succeeded O’Brien as the CEO of markets, and will oversee the firm’s brokerage, capital markets, project and development services, property management, and retail businesses. John Curtis was appointed principal of CetraRuddy. He was previously vice president at Arquitectonica’s New York office, and held senior positions at Singapore-based firms Timothy Seow Group Architects and DP Architects Pte.

Mary Anne Fusco joined Town Residential as an associate broker. With 16 years in the business, she has more than 1,000 transactions to her credit totaling over $400 million in sales. She previously worked at Douglas Elliman, and prior to that, at Coldwell Banker Hunt Kennedy. Dennis Duden is now general manager for Empire State Properties, a new position at the company. He previously served as the Northern California general manager for Marriott’s corporate housing brand. Kenji Ota was hired as executive director of Cushman & Wakefield’s retail team. He was previously a managing director at Newmark Grubb Knight Frank.

Also on the move Toku Saito joined the Treeline Companies as its budget and compliance manager. He previously served as a quantity estimator at Petracca & Sons. … Michael Duff was hired as a manager of residential marketing for Rose Associates after consulting for the company for eight months. … Jason Marin was hired as an associate director of Eastern Consolidated. He previously worked at Studley Inc. in Philadelphia. … Lou Grassi was elected board chair of Moore Stephens North America.

Announcements Jason Meister, a vice president of investment sales at Avison Young who represented Joe Sitt and Ruby Schron in their unsuccessful bids for the Empire State Building, and his wife, Brooke, are expecting their first child, a daughter, in May.

Follow the Real Deal on Twitter: twitter.com/trdny 122 March 2014 www.TheRealDeal.com

Kenji Ota

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Michael Gross takes on 15 Central Park West WE H E A RD

New book on iconic condo details A-Rod sexcapades, plus Mrs. Blankfein’s problems and Weill & Buffet lunching

▼ An inside look at 15 Central Park West by best-selling author Michael Gross, right, will be released this month.

ichael Gross, real estate historian/ gossip monger extraordinaire, sat down with The Real Deal last month to talk about his latest book: “House of Outrageous Fortune: Fifteen Central Park West, the World’s Most Powerful Address.” The 372-page tome is due out this month. The New York Times best-selling author has also published books on the so-called “Platinum Triangle” of Bel Air, Holmby Hills and Beverly Hills in Los Angeles, the Metropolitan Museum of Art and, mostly famously, the exclusive co-op 740 Park Avenue. His latest book on 15 Central Park West — the lavish Zeckendorf brothers condo tower designed by Robert A.M. Stern — offers an inside look at the influential roster of owners at the building, from hedge fund mangers to TV personalities to sports icons.

Gross: I don’t believe so. The old real estate adage is “location, location, location,” but 15 CPW, while it didn’t create this location — Trump and the Time Warner Center did — 15 CPW sealed the deal. It dragged the center of gravity of Manhattan to the west.

TRD: So what’s the difference between 15 CPW and 740 Park? Michael Gross: 15 CPW is very different than what Tom Wolfe called “the good buildings.” It redefines “good building.” It is a condo, not pre-war, on the West Side. And, of course, the other difference is how much [the units] sell for.

Gross: Mrs. Blankfein caused some real problems with the developers of the building. I don’t want to give it away, because it comes at the end of the book, but the relationship with Goldman Sachs, which was one of the building’s backers, along with Eyal Ofer … there were issues between the bank and the Zeckendorfs all along, and they culminated in a fascinating fight with Mrs. Blankfein.

TRD: And why do you think they sell for so much?

TRD: So who is the most intriguing resident of 15 CPW?

Gross: The appeal is to own the ultimate trophy. In particular, it combines many of the attributes of the old world co-op, like gracious layouts, masonry buildings, an oldschool sensibility, with, as the ads used to say, “all mod cons.” Six years after people started taking possession, it is still the building.

Gross: Someone, I can’t remember who, said the most interesting thing is to go to the restaurant, because it’s the celebrities who are impressed when [former Citigroup chairman] Sandy Weill is sitting with Warren Buffet. I am far more interested in the people who run the world than I am in the people who distract the world from the people who run it. By Guelda Voien

TRD: And you don’t think its cache will fade, as other once-premiere buildings have?

With a name that sweet...

TRD: You assert in the book that New York Yankee Alex Rodriguez came home with “two hookers.” Do you worry about getting sued? Gross: No. It was reported. I got that from multiple sources. Things that you aren’t sure about don’t make it to print. TRD: And what about Laura Blankfein, the wife of Goldman Sachs CEO Lloyd Blankfein?

(Interview edited for content and clarity.)

Christian (left) and Nick Candy

Candy brothers look to license theirs to developers

andy & Candy, the design firm side of the Candy brothers’ real estate development business, said last month it will license its name to projects globally, much the way Donald Trump lends his brand to developments around the world. The brothers, who developed the mega-successful One

The firm said the licensing venture will seek “strategic developer and hotelier partners” across the globe, including in Dubai, Singapore, Hong Kong, St. Petersburg and the U.S. Hyde Park condominiums in London — a home to sheikhs that remains shrouded in mystery — have set their sights on New York of late. But brothers Nick and Christian have yet to work on another project as large or high–profile as One Hyde Park, which premiered in 2007. “There is no reason why we can’t do the next 432 Park Avenue or One57,” Nick Candy told The Real Deal in October. 1124 March 2014 www.TheRealDeal.com

The firm said the licensing venture will seek “strategic developer and hotelier partners,” across the globe, including in Dubai, Singapore, Hong Kong, St. Petersburg and in the U.S. A spokesperson declined to identify any potential partners. “We are announcing something in Dubai in March, a very large project,” Candy said last month. He declined to give any further detail on that venture. The brothers are also still on the lookout for a New York partner, and met with Stephen Ross, chairman of Related Companies, who toured One Hyde Park recently. “I’d love to partner with Stephen,” Candy said. “I think we have mutual respect.” He pointed to the partnership between Related and the Mandarin Oriental at 80 Columbus Circle, part of the Time Warner Center development, where Related built the project under the Mandarin Oriental brand, as the sort of relationship he would like to emulate. But he said no specific plans have been set. Candy said the business’ trajectory was not unlike that of the Trump Organization, which licenses its brand to projects from New York to Israel, often without providing the actual capital. “We want to team up with the best talent locally,” Candy said. He said his scouting for land and partners hasn’t led

to anything concrete yet, because the plots have been “too small or not the right location.” The Candys bought an Upper East Side townhouse at 19 East 70th Street for $35 million last summer, which they will remodel and flip. But that project is small change compared to what they envision in coming years. The firm is also looking at three other U.S. markets: San Francisco, Miami and Los Angeles. Nick Candy lives in Los Angeles’ Holmby Hills area, he said, while his brother, who owns a penthouse at the Plaza, spends about half his time in New York City. The Candys are also looking at additional projects in Beverly Hills, Nick said. “The [developer] I admire most is the Zeckendorfs,” Nick said, saying he believes his company can bring projects of the quality of their 15 Central Park West, or better, to the cities across the globe where there is demand for ultra luxury. And despite his admiration, he insists “nothing yet comes close in quality to One Hyde Park.” By Guelda Voien www.TheRealDeal.com January 2013 113

Honoring 2013 Top Producers We pay tribute to these agents who exemplify the standards of excellent and expertise for which our company is known. East Side Brokerage Serena Boardman

Lisa Maysonet

Kevin B. Brown

Melinda G. Nix

J. Roger Erickson

Stan Ponte

Nikki Field

Austin B. Schuster

Epo I. Manning

Valerie Sherman

Downtown Brokerage Mara Flash Blum

Torsten Krines

Keith Copley

Stephen McRae

Karen Heyman

Meg Siegel

Joshua Judge

The Stein Team

Debbie Korb

Joshua Wesoky

East Side Manhattan Brokerage 38 East 61st Street | New York, NY 10065 | +1.212.606.7660 Downtown Manhattan Brokerage 149 Fifth Avenue | New York, NY 10010 | +1.212.431.2440

sothebyshomes.com/nyc Agents are listed by office in alphabetical order. The above individuals are all licensed associate brokers or salespeople associated with Sotheby’s International Realty, Inc. Sotheby’s International Realty and the Sotheby’s International Realty logo are registered (or unregistered) service marks used with permission. Operated by Sotheby’s International Realty, Inc.

NYC_RD_0314_v2.indd 1

2/25/2014 9:25:40 AM

THE CLOSING

WITH BILL

RUDIN Rudin is the CEO of Rudin Management Company, a business started by his grandfather, Samuel Rudin, in 1925, and previously run by his father, Lew Rudin. The firm’s portfolio is comprised of 10 million square feet of commercial space at buildings such as 3 Times Square, 345 Park Avenue and 80 Pine Street, and 20 luxury apartment buildings, including 1085 Park Avenue and 945 Fifth Avenue. The company’s current projects include the Greenwich Lane, a collection of 200 condominiums across 10 buildings at the former site of St. Vincent’s Hospital in the West Village. (Sales at the project are being headed by Corcoran Sunshine Marketing Group.) Rudin also recently tapped architecture firm Skidmore, Owings & Merrill to redesign the lobby of another of its office buildings, 560 Lexington Avenue.

Name: WILLIAM CRAIG RUDIN Born: APRIL 20, 1955 Hometown: MANHATTAN Marital status: Married SINCE 1983 Children: SAMANTHA, MICHAEL What were you like as a kid? I was not the greatest student in the world. I loved sports and I had a lot of friends. Did your dad involve you in the business from a young age? There’s a picture of me in the late 1950s. My dad and my grandfather took me down to 80 Pine Street, where they were excavating the site. That was my first trip to a construction site. Did you always want to be in real estate? There was a moment after I graduated from college where I worked in the film industry. I was a production assistant for a couple of movies, like “The Deep” with Jacqueline Bisset, Robert Shaw and Nick Nolte. My stepfather was in the movie business [so he helped get me the job]. I then realized that the real estate business was where my heart was. Your dad was a huge New York personality. What was it like to grow up with such a well-known father? It was always fascinating. He would hold court on Sundays at P.J. Clarke’s, and it would be a revolving door of people in politics, entertainment and sports. We were invited once to dinner at Gracie Mansion with John and Mary Lindsay when I was 14. That was pretty cool. Your father was very civically involved, starting during the fiscal crisis. He understood early on that our real estate was tied into the health of the city. His father, my grandfather, didn’t want him to get so engaged. He wanted him to focus on the business. But my father said, “Pops, what I’m doing is our business.” They named the street your office is on “Lew Rudin Way.” What would he think of that? That was his favorite corner. He would say, “You could walk from the Four Seasons to [The] 21 [Club] on 52nd Street,

126 March 2014 www.TheRealDeal.com

and the world would pass you by.” You won a New York Emmy Award for a documentary you helped make about your dad. How did that happen? My dad wanted to do an oral history. We started to do interviews on tape. Then, he got ill. There were probably five or six hours of audio. Each one, you could hear him getting a little weaker. When he passed away, it took me probably six months to listen to the tapes. It was just unbelievable, the things he talked about, but it wasn’t enough to tell his story. So I used that and other interviews [for the documentary]. Where did you go to school? I went to Dalton and the University of Arizona for two years. Then I came back to NYU. How did you meet your wife, Ophelia? At NYU, in Finance 101. It was September 1977. I noticed her right away, but she was always surrounded by friends, so it took me a little while [to approach her]. Finally, I knew she was taking an evening course, so I arranged to be walking near the building she’d be coming out of with one of my dogs so I could bump into her. Do you have grandchildren? Yes. Samantha is married, with an 18-month-old daughter named Elle. Michael got married last June. Where do you live? In one of our buildings on the Upper East Side. Do you have any other homes? We have a home in Bridgehampton. We love it out there.

What do you do for exercise? I rollerblade in the morning. I try to get in two lower loops of Central Park. I get all my pads on and my helmet and use that time to think about things I need to do, or strategize on a deal we’re working on. Ophelia and I swim a lot together, too. What’s your vice? Eating too much, probably, whether it be melons, hamburgers or Mezzaluna pizzas. When did you join the family company? I had worked for the company on and off over summers. One of my first jobs was in the mail room, and then I worked for the building manager at 345 Park Avenue. Your sister Beth DeWoody is a well-known art collector. Do you also collect? Yes, we like the sculptor Ugo Rondinone, we have a couple of [pieces by sculptor] Anish Kapoor and [painter] David Hockney, but we’re nowhere near my sister’s level. You’re a dog lover, right? I’ve had a dog in my life since I was 14 years old. That’s probably one of the reasons my wife fell in love with me, because of my brown standard poodle, Smitty. You have to be pretty comfortable with your masculinity to have a poodle. He was a big poodle. I was not a small-poodle person until after Smitty II passed away. Ophelia and I have two dogs, Sebastian and Biriba. Samantha has Mocha and Michael has Hoppy, who’s a half-brother of Biriba. Elle loves dogs too. By Katherine Clarke

PHOTOGRAPH FOR THE REAL DEAL BY MARC SCRIVO00 www.TheRealDeal.com July 2006

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For more information about the Marcum Real Estate Group contact:

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Oral representation cannot be relied upon as correctly stating the representation of the developer for correct representations, references should be made to the documents required by section 718.503, Florida Statutes to be furnished by a developer to a buyer or lessee. This offering is made only by the prospectus for the condominium and no statement should be relied upon if not made in the prospectus. This is not an offer to sell, or solicitation of offers to buy, the condominium units in states where such offer or solicitation cannot be made. Prices, plans and specifications are subject to change without notice. Actual improvements may vary from renderings and are used solely for illustrative purposes. Actual views may vary and may not be available in all units. Views cannot be relied upon as the actual view from any particular unit within the condominium. The developer does not guarantee the future view from the property or from a specific unit and makes no representation as to the current or future use of any adjacent property. We are pledged to the letter and spirit of the US policy for achievement of equal housing opportunity throughout the nation we encourage and support an affirmative advertising and marketing program in which there are no barriers to obtaining housing because of race, color, religion, sex, handicap, familial status or national origin. Designed by creativesoldier.com