20
‘Title hell’ sets in for brokers
22
Airbnb vs. NYC hotel industry
30
Hedge funds ink high-flying leases
62
Which market reports to rely on
81
How Jersey City finally became hip
TheRealDeal
www.TheRealDeal.com
Vol. 12 No. 11 November 2013 $3.00
Who has the tightest grip on NYC sales? A breakdown of which brokerages have the most listings in which neighborhoods — and where the fiercest battlegrounds are. p75
Zillow zaps StreetEasy
A leadership shake-up surprises the industry in wake of $50 million sale. p42
The meager rental supply
A roundup of the recovering, but still paltry, pipeline of NYC rental developments. p38
Dolly’s next act
Can the controversial super-broker maintain her success without the city’s largest firm behind her? p34
Brooklyn’s (new) heights
The borough is setting real estate records faster than you can say ‘farm-to-table.’ p48
Lining up behind the next mayor
Allegiances switch to de Blasio as industry players realize Lhota’s message may be too little, too late. p64
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Iconic Five Star, High Volume
Restaurant Opportunities
‘Bal Harbour’ Of The Pacific
`
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In The Heart Of Lincoln Center
Gateway to the Nation’s Capital
PROPOSED REDEVELOPMENT
THE BRAVERN BELLEVUE, WA
• Turn-Key Restaurant (Former ‘Artisanal’) Averaging $7M in Annual Revenue • Adjacent to a $10M Steakhouse •Only Luxury Shopping Destination InThe Pacific Northwest • Up To ± 10,243 SF Available • Co-Tenants Include:
UNION STATION WASHINGTON, D.C.
• 40 Million Visitors Pass Through Union Station Annually, including the #1 Wealthiest Train Travelers in the World • Current Food Sales in Union Station Averages $2,400/SF • Four Seasons Dining In The Glass Enclosed Atrium • ± 10,215 SF Available on the Main Level Of The Station
1991 BROADWAY NEW YORK, NY
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• Located On Broadway Between 67th and 68th Streets - Directly Adjacent To The Apple Store At Lincoln Center • ±7,500 SF Including Mezzanine And Cellar. Additional ±1992 SF Atrium Space • Over 55’ Of Prime Frontage On Broadway
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Highlights N O V E M B E R
REFLECTING PRESENCE
2 0 1 3
federal shutdown backlash 18 The As the government went dark, the
22
housing market suffered.
title hell’ sets in 20 ‘Broker Agents scramble for new designations in wake of state ruling.
vs. NYC 22 Airbnb The apartment-share site is the latest target of an illegal hotel crackdown.
The city and state are going after illegal hotel operators in force.
24
Jerry Swartz’s dual worlds The HKS Capital Partners founder may be securing capital for NYC real estate projects by day, but he also has a vast insect collection, an X-rated stuffed bear and goat bones in his office. Jerry Swartz launched HKS in 2011.
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
hysteria 30 Hedge-fund Boutique finance firms are locking in Midtown space at record prices.
34
Dolly Lenz formed her new firm after an abrupt departure from Elliman.
Dolly’s next act The super-broker’s new company already has $384 million in listings. But can she maintain her success without the city’s largest firm behind her?
for reflection on the past while looking to the future.
Transforming design into reality
are the rentals? 38 Where A look at the recovering, but still
42
meager, pipeline of new apartments for lease in Manhattan and Brooklyn.
For help achieving the goals of your next project, contact the Ornamental Metal Institute of New York.
zaps StreetEasy 42 Zillow A leadership shakeup and expansion Publisher of Metals in Construction 211 E 43 ST | NY, NY 10017 | 212-697-5554 | www.ominy.org
pullback shock industry in wake of $50 million sale.
48
StreetEasy’s onetime CEO, Michael Smith, has been replaced.
44
Raising the roof on the Jersey Shore One year post-Sandy, construction booms as owners elevate homes.
48
Brooklyn’s (new) heights
Architect: Snøhetta Photo: Snøhetta
10 November 2013 www.TheRealDeal.com 8 October 2012 www.TheRealDeal.com
As demand rises, the borough sets records for everything from townhouse prices to office space.
www.TheRealDeal.com March 2012 00
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Highlights continued in overdrive 56 EB-5 More NYC developers are tapping
ASTOR TURF
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.
56
the program for cheap capital.
in the life of: Eric Barron 58 Day The Keller Williams NYC CEO on brown-bagging his lunch and starting a kids’ ice cream line.
64
Bill de Blasio, left, and Joe Lhota
De Blasio and Lhota in the home stretch While Lhota’s views are more in line with the industry, de Blasio’s near-lock on the mayor’s race has attracted real estate backing from those who want a friend in City Hall.
68
Pier won
72
Party time for Luxury Listings NYC
Toll Brothers’ Brooklyn Bridge Park project is a boon for the waterfront, even with its mediocre design.
Stars of “Million Dollar Listing New York” mingle with brokers at a debut party for TRD’s sister magazine.
75
Tracking rents and vacancy figures in Manhattan’s three office districts.
86
National Market Report Reports from around the country on significant developments and trends.
91
The Deal Sheet A roundup of office and retail leases, building buys and financing.
110
Elliman heads Dottie Herman and Howard Lorber in Roaring ’20s attire
Development Updates
136
An update of the construction and sales status of projects around the city.
NYC industry pros go retro
128
Elliman hosts “Great Gatsby”themed bash at the Borgata in Atlantic City.
10 12 November October 2012 2013www.TheRealDeal.com www.TheRealDeal.com
Checking in with brokers to take the pulse of the apartment market.
Commercial Market Report
A breakdown of the residential firms that have the tightest grip on a slew of hot nabes.
For help achieving the goals of your next project, contact the Steel Institute of New York.
Architect: Fumihiko Maki, Maki Associates Structural Engineer: Ysrael A. Seinuk Photo: Richard Ginsberg
Residential Market Report
26
Neighborhood strongholds
Structural Steel Right for any application
Publisher of Metals in Construction 211 E 43 ST | NY, NY 10017 | 212-697-5553 | www.siny.org
18
Calendar of Events Check out this month’s activities.
134
Comings & Goings
from Leslie 138 Lessons Leslie Wohlman Himmel on going to the gym with A-Rod and breaking bread with Harry Helmsley.
The stories behind the latest job moves and company announcements.
136
We Heard A lighter look at industry buzz.
www.TheRealDeal.com March 2012 00
RECENT TRANSACTIONS S ince 2005, we have invested $1.4 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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Loan Origination Multifamily Property Queens, NY July 2013
Loan Origination Office Property Brooklyn, NY July 2013
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Loan Origination Mixed Use Brooklyn, NY October 2013
Loan Origination Multifamily Queens, NY August 2013
825 Third Avenue • 37th Floor • New York, NY 10022
(646) 472-1900 • www.madisonrealtycapital.com Includes deals closed by Sullivan Realty Capital, LLC, an investment adviser registered with the Securities and Exchange Commission doing business as Madison Realty Capital, and its affiliates. Past performance does not guarantee future results. It should not be assumed that the recommendations made in the future will be profitable or will equal the performance of the securities listed. Holdings are subject to change.
The Real Deal N e w Yo r k R e a l E s tat e N e w s Publisher Amir Korangy Editor-IN-CHIEF Stuart W. Elliott Managing Editor Jill Noonan DEPUTY Managing EDITOR Candace Taylor Editorial development director Melanie Gray
Whether you need to buy or sell a building having a real estate broker that knows the local players is key - the buyers and the sellers. You need an intensely dedicated broker who is still on the job long after the lights have gone out elsewhere.
Web Editor Leigh Kamping-Carder Art Directors Ronald Gross, Keziah Makoundou Senior Reporter Adam Pincus
You need Rosewood Realty Group
Reporters Katherine Clarke, Guelda Voien, Hayley Kaplan Contributors C. J. Hughes, David Jones, Adam Piore EDITORIAL OPERATIONS MANAGER Linden Lim Web Producers Hiten Samtani, Mark Maurer, Julie Strickland, Zachary Kussin
212.359.9900
Photographers Chris Martin, Marc Scrivo
www.rosewoodrealtygroup.com
Rosewood Knows New York
Director of mARKETING OPERATIONS Yoav Barilan
We are pleased to announce that for the year-to-date October 25 2013, th
Rosewood has completed total sales of $1,581,337,000 which include: Manhattan: Aggregate sales of
$835,980,000
128 Buildings / 3,216 Residential Units / 97 Commercial Units Brooklyn: Aggregate sales of
$311,679,000
71 Buildings / 2,539 Residential Units / 33 Commercial Units Bronx: Aggregate sales of
$325,553,000
57 Buildings / 3,193 Residential Units / 51 Commercial Units Queens: Aggregate sales of
$63,375,000
15 Buildings / 425 Residential Units / 5 Commercial Units
ASSOCIATE SALES DIRECTOR Ross Fox Advertising Sales Eran Evron, Abi Laoshe, Nick Mascaro, Robert Stearns, Jennie Durkovic, Nicki Chadi, Sigalit Levi, Leora Brinkley DIGITAL TRAFFic MANAGER Junaid Zahid Webmaster Nima Negahban Finance director Kenneth Cyrus Administrative Assistant Virginia Durso Circulation Paul Destanko Distribution Mitchell Newman ATTORNEY Barry J. Friedberg Trachtenberg Rodes & Friedberg LLP Accountants William T. McCallum, CPA, P.C., Christine Wang
Tri-State Area: Aggregate sales of
$44,750,000
9 Buildings / 492 Residential Units / 15 Commercial Units Š Copyright 2012 Rosewood Realty Group. All rights reserved.
14 November 2013 www.TheRealDeal.com
The Real Deal is a registered trademark of Korangy Publishing Inc. Copyright Š 2013. 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.
Representing Manhattan’s Finest Properties
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• One of Corcoran’s Top Agents
Charlie Attias
• Top 1% Brokers in NRT Incorporated - Nationwide (of 48,000 brokers)
Licensed Associate Real Estate Broker
• Member of 2007, 2008, 2009, 2010, 2011 & 2012 Multimillion Dollar Club
(o) 212.605.9381 charlie.attias@corcoran.com
Equal Housing Opportunity. The Corcoran Group is a licensed real estate broker located at 660 Madison Ave, NY, NY 10065. All dimensions are approximate.
EDITOR’S NOTE Unmasking real estate’s next culprit
H
istory can only be understood at a great distance, the historian David Halberstam once said. It may take years to clearly understand what’s going on in the world around us at any given moment — so complex are the social forces and so enmeshed are we in their day-to-day reality, where it’s hard to maintain perspective. I’m reminded of that observation all the time when reporting on the New York City real estate market. Last month, I sat around a table with about a dozen senior commercial brokers in Midtown, as we reporters and editors often do, to talk about market trends. There was rapid-fire discussion about recent deals where record prices had been paid by buyers, and where sellers — who had purchased the properties only a few years earlier — had seen outrageous profits. But when talk turned to the next possible bust, and what warning signs The Real Deal should watch for, the room fell noticeably silent. Interestingly, I don’t think that silence stemmed from the fact that brokers are often boosterish. In my view, it was more the inability to explain what might be the equivalent of subprime loans or CDOs (remember those?) in this economic cycle. While nobody in that room identified one, there will undoubtedly be a new culprit this time around, and the key question is: What’s it’s going to be? Of course, banks have remained conservative, so the lending spigot isn’t wide open right now. But the federal government is pumping money into the economy (by buying bonds to keep interest rates low). And foreign buyers are out there in force. But is either a potential smoking gun? Foreign buyers, for one, were around during the last cycle and still are only
After Yale economist Robert Shiller won a Nobel Prize last month for tracking booms and busts in the real estate and stock markets, it’s worth reminding ourselves during the good times that the busts are inevitable. responsible for 20 percent to a third of all Manhattan sales, according to estimates. One hopes, as always, that today’s growth is happening on solid footing. There may be more foreign money than meets the eye (it’s hard to see the “real” money behind an LLC), the result of emerging economies around the world that are producing more newly wealthy buyers, who are parking their money in safe investments in New York. And hopefully the money isn’t “funny” and is actually here to stay — for the long haul. And hopefully it won’t be too rocky a road for real estate when the government tapers its massive bond-buying program and lets the free market operate unfettered when it comes to interest rates. Even as the Dow has continued to shatter records — despite last month’s government shutdown — it’s worth reminding ourselves that both economic booms and busts are inevitable. Indeed, Yale economist Robert Shiller won a Nobel Prize last month for tracking those booms and busts in the stock and real estate markets (see page 134). Meanwhile, journalism has been described as the first draft of history — and that’s what we bring you in this issue, as we look at the strong market. From townhouse prices to office rents, we examine the records shattered in Brooklyn recently, as the borough continues to see unprecedented growth (see page 48). One reason those records are being broken, of course, is the limited supply of new projects coming on the market, including rental buildings. As developers and lenders increasingly gravitate toward building condos, the shortage of new rentals will grow even greater. We take a comprehensive look at new rental development in Brooklyn and Manhattan in a story starting on page 38. Our main cover story also looks at both Manhattan and Brooklyn, and it uncovers which residential brokerages dominate in which neighborhoods — a first-ever ranking of its kind. You can’t go five feet in Park Slope without hitting a Corcoran listing, for example. Reporter Kathy Clarke breaks down our findings starting on page 75. Finally, check out our profile of controversial super-broker Dolly Lenz, who recently (and abruptly) left mega-brokerage Douglas Elliman to start her own firm. We look behind the scenes at her departure and the prognosis for her new company, which has so far raked in nearly $400 million in listings (see page 34). Enjoy the issue. And enjoy the good times — while they last.
Stuart Elliott 16 November 2013 www.TheRealDeal.com
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Re s i d e n t i a l Ma r k e t By Hayley Kaplan uring last month’s 16-day government shutdown, the business of New York City real estate appeared to operate mostly as normal, with apartments being shown and closings taking place. Nonetheless, the crisis likely damaged the housing market — at least temporarily, industry experts told The Real Deal. The shutdown, stemming from
D
Government shutdown slows deal-making Congressional debacle created uncertainty, as another debt deadline looms
a showdown between Republicans and Democrats over health care legislation, began on October 1 and lasted until the early hours of October 17, when Congress voted to reopen the federal government and raise the nation’s borrowing limit. The decision came just in time to avert a financial default, in which the Treasury Department would have run out of money to pay the nation’s debt obligations.
Commercial Real Estate Lending Call today for a consultation on an acquisition or refinance*:
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Since the end of the shutdown, furloughed government workers have gone back to work, while government-run tourist spots have reopened. Many New Yorkers turned their attention to spotting the newest works by Banksy, the anonymous British graffiti artist who did a “residency” in New York last month. (While in town, Banksy also slammed the design of the new One World Trade Center, calling it
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a “shyscraper.”) But the effect of the stalemate — which took an estimated $24 billion out of the United States economy, according to the financial ratings agency Standard & Poor’s — on the housing market could be longer-lasting, sources said. First, the Congressional impasse caused credit to tighten as lenders proceeded with caution, fearing the economic results of the debacle.
$3,340,000 Construction Financing Condominium New York, NY 6 Residential Units
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Even before the shutdown, “many lenders [had] begun to move slowly,” said Lee Williams, a broker at Rutenberg Realty, adding that they were operating “from a place of uncertainty.” And while the immediate crisis has passed, the uncertainty isn’t over: Congress only raised the debt ceiling until February, and Williams said industry insiders are concerned about another battle occurring then. Uncertainty on the lenders’ part makes it more difficult for home buyers to get mortgages, which in turn could delay the housing market’s recovery by “a few quarters,” said Jonathan Miller, president of the appraisal firm Miller Samuel. He said federal litigation with large banks — such as JPMorgan Chase’s record $13 billion settlement over mortgage-backed securities — is further delaying the easing of credit. The national housing market is “already weak, and [these factors are] keeping the conditions weak,” he said. Closer to home, New York City real estate brokers said the drama in Washington slowed the pace of sales in October, with home seekers hesitant to buy and sellers reluctant to put their apartments on the market. “There is an expectation [among buyers] that a default would have a catastrophic effect on the global economy, and the New York City real estate market as an extension,” said Jeff Schleider, the founder of the brokerage Miron Properties. As a result, he said, several of his firm’s clients delayed putting in offers or signing contracts during the crisis. Luckily, there has been an uptick in deal volume at the firm now that government shutdown is over, he said. Michael Signet, the director of sales at Bond New York, said he witnessed a similar phenomenon. “This business is about perception,” he said, adding that the shutdown and possibility of the U.S. defaulting on its loans gave “the public the perception that the economy is heading in the wrong direction and that now is a good time to hunker down, hold onto their cash and wait it out.” With the crisis over, Signet said, that perception “vanished pretty quickly,” however. The full impact of how the slowdown impacted deal volume in the third quarter won’t be known until market reports comes out in January, Miller said. TRD
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‘Broker title hell’ sets in With corporate titles gone, agents scramble for new ways to distinguish their brands
By Hayley Kaplan ichard Steinberg is in what he describes as “broker title hell.” After 22 years at Warburg Realty, Steinberg had worked his way up to the rank of executive managing director. Then last spring, literally overnight, he became simply a “licensed associate real estate broker.” Steinberg is one of thousands of New York City real estate bro-
R
kers who had corporate titles until April, when the New York State Department of State ruled that brokers and agents can’t lay claim to any corporate title — such as managing director or senior vice president. The state said such corporate titles were misleading because brokers are independent contractors and do not have corporate duties. Now brokers can only hold one of three titles: “licensed
broker,” “licensed associate broker” or “licensed real estate salesperson.” These titles stay the same no matter how many years of experience the agent has or how much business they bring in. Now, six months after the ruling took effect, brokers say the change is still causing confusion among clients, while firms struggle to differentiate more experienced agents from those who are newer
to the field. Some companies have gotten creative, coming up with new internal titles. Agents, meanwhile, are looking for other ways to distinguish themselves, often by turning to continuing education. In the wake of the rule change, “everyone’s scrambling to find the next title of distinction,” said Warburg broker Steve Goldschmidt, one of founders of the Real Estate Board of New York Residential Specialist designation.
What’s in a name? In the past, Manhattan brokers earned corporate titles by completing a certain number (or dollar volume) of sales. Though
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benchmarks for reaching those titles were different for every firm, they helped convey a broker’s experience to the public. “I was disappointed that we were forced to dismiss our titles,” said Warburg’s Steinberg. “In previous years, based on our production you were elevated. It was a reward.” Since then, Steinberg said he has struggled to find other ways to signal his experience. For example, he’s changed his strategy when pitching potential clients. Now, instead of directing them to his website for information, he emails a list of his qualifications, including his highest-priced listings and significant deals. He’s not the only agent looking for new ways to establish credibility with clients. REBNY’s NYRS course has seen a significant uptick in interest from brokers since the rule change, Goldschmidt said. Since it was founded in 2007, the NYRS course has been offered twice a year — in February and in September — and the 35 slots for the 26-hour class have been slow to sell out. But once the title ban was issued, the September class sold out in just a few weeks, Goldschmidt said, noting that the class had a waiting list for the first time. In the past, “it was a struggle to fill all our seats,” he said. “The Department of State has done a favor for NYRS.” But the NYRS designation doesn’t come cheap, or easy. The course — which costs $495, plus $75 a year to keep the residential specialist designation — lasts for nine weeks, according to Shirley Hackel, co-chair of the course and an associate broker at Warburg. Even getting into the course takes a lot: a recommendation from a manager; the title of associate broker; five years of experience in the residential market, and at least 50 closed sales valued at $50 million. Lee Frankel, an associate broker at CORE who is currently enrolled in the NYRS program, said the loss of his former title — senior associate real estate broker — was one reason he decided to sign up for the course. He said he’s not sure how much the NYRS designation will actually impact his business, noting that he doesn’t believe the public really cares about titles. “Maybe it doesn’t help,” he said, “but it certainly doesn’t hurt.” Greg Young, the founder of the Manhattan-based real estate training firm Broker Heaven, said his company has never offered a forContinued on page 118
20 November 2013 www.TheRealDeal.com
Equal Housing Opportunity.
Equal Housing Opportunity.
© 2013 Douglas Elliman Real Estate. All material presented herein is intended for information purposes only. While, this information is believed to be correct, it is represented subject to errors, omissions, changes or withdrawal without notice. All property information, including, but not limited to square footage, room count, number of bedrooms and the school district in property listings are deemed reliable, but should be verified by your own attorney, architect or zoning expert. Equal Housing Opportunity.
© 2013. Douglas Elliman Real Estate.
© 2013 Douglas Elliman Real Estate. All material presented herein is intended for information purposes only. While, this information is believed to be correct, it is represented subject to errors, omissions, changes or withdrawal without notice. All property information, including, but not limited to square footage, room count, number of bedrooms and the school district in property listings are deemed reliable, but should be verified by your own attorney, architect or zoning expert. Equal Housing Opportunity.
© 2013. Douglas Elliman Real Estate.
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B y the N umbers
Illegal hotel crackdown heats up
Officials ramp up enforcement, but apartment-share websites fight back
$245
Median price of a hotel room in New York City.
$180
Median cost of an Airbnb apartment in New York City.
$504 million Amount of hotel tax revenue New York City collected last year.
$2.5 billion
Estimated value of Airbnb today.
90,000
Number of hotel rooms Manhattan is slated to have by the end of 2014.
225,000
I
t’s no secret that thousands of New Yorkers use websites like Airbnb, OneFineStay and VRBO to rent out their homes to tourists for short-term stays. But in doing so, they are violating a controversial 2010 state law that makes it illegal to rent out an apartment for less than 30 days when the owner is not home. And lately — with encouragement from the powerful hotel lobby — the state has stepped up its efforts to crack down on “illegal hotels.” Last month, for example, New York State Attorney General Eric Schneiderman subpoenaed data on about 15,000 New Yorkers who regularly rent out their apartments through the popular website Airbnb. But Airbnb is not turning over the names without a fight. It countered by attempting to block the subpoena in New York State Supreme Court and launching an online petition requesting the legalization of short-term apartment rentals in New York. It has since garnered almost 45,000 signatures. By Evan Bleier and Candace Taylor
Number of renters who use Airbnb in New York.
52 million
Number of New York City tourists in 2012.
87 percent
51
Number of illegal hotels citywide closed by the Mayor’s Office of Special Enforcement in 2011, the most recent year for which data is available.
316 percent
Increase in Airbnb listings worldwide between start of 2012 and last month. Listings jumped from 120,000 to 500,000 during that time.
$800 to $2,400 Range of fines for illegally renting out an apartment for short-term stays.
$1 million
Amount sought by NYC in punitive damages against short-term rental operator Smart Apartments. In February, a state judge barred the company from operating residential apartment units as hotel rooms. Sources: The New York Times, Wall Street Journal, Crain’s, New York Daily News, Bloomberg News, Priceonomics.com, Associated Press, CNET, Peers.org, Tech Crunch, CNN.
Hotel occupancy in New York City — the highest in the nation and one of the key factors driving up room rates in the city.
6,600
Number of violations the city has issued against illegal hotels since 2006, when Mayor Michael Bloomberg expanded enforcement of the issue.
NEw LIStING 1158 Fifth Avenue | Manor House on Central Park NIKKI FIELD Senior Global Real Estate Advisor, Associate Broker | 212.606.7669 | nikki.field@sothebyshomes.com | www.nikkifield.com
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At
the
Desk
of:
J
erry Swartz, 74, founded the Manhattan real estate finance firm Pergolis Swartz in 1975, after leaving the real estate investment banking specialist Sonnenblick Goldman. Then, in 2011, at an age when many of his peers were retiring in Florida, Swartz launched another new company, the advisory and financial brokerage HKS Capital Partners. HKS secures mezzanine and construction loans, among other financial services, for clients like condominium
1
J e r r y S wa r t z developer Grasso Holdings and hotel developer the Simon Group. In just two and a half years, HKS has grown from three to 25 people, relocating from a 300-square-foot space at 900 Broadway to its current 127 West 24th Street digs. Swartz is an avid naturalist and an adventurous traveler, and his office walls showcase his various interests — from interior design to dung beetles. B y G uelda V oien
This talking teddy bear is modeled af-
ter Ted, the star of the eponymous 2012 film starring Mark Wahlberg. The bear
8
comes in two models: G-rated and X-rated. Swartz, a huge fan of the movie, chose the latter. (The specifics of what Ted says are not printable).
6
2
5
7
Swartz and his second (and current) wife, Maxine, have five
sold the 529 West 42nd Street loft near Times Square he bought
grown children between them. This paperweight was made at age
in 1985. Aside from “very loud New Year’s Eves,” he said he enjoyed
five by Swartz’s now-47-year-old son, David.
living in the then-gritty area.
3
6
2
Swartz’s office is filled with the many artifacts he’s collected in
his travels. He found a goat skull and horns while hiking in Myko-
3
A model of a silver Bentley Gran Torino, the car that Swartz
owned until he traded it in for a newer version — this time in black.
nos, Greece.
4
Swartz collects insects, moths and butterflies. He often cap-
tures these creatures himself — he has specimens from Panama, Peru and even the backyard of a home he used to own in upstate New York — and euthanizes them. Then he pins them in the display cases that adorn his office walls. “They don’t live long anyway,” he said, noting that the lifespan of most moths and butterflies is
7
When Swartz left Sonnenblick Goldman after five years with
the company, he had earned just 21 cents through the firm’s profit-sharing account. After his departure, Sonnenblick mailed him this check for that amount — less than the cost of postage, Swartz recalled.
about two weeks.
8
5
Swartz’s homes have been featured in design magazines such
New Yorker. As such, he’s a fan of New York sports teams. He said
as House Beautiful and New York Spaces. The family currently
he’s loyal to the Giants, for example, despite this year’s abysmal
owns a place in East Hampton, a co-op in the East Village, and a
season.
4
9
Despite the fact that he was raised in Rhode Island, Swartz
moved to Manhattan in 1962 and considers himself a full-fledged
getaway in Sarasota, Fla., that Swartz says he bought to tempt his children and grandchildren to visit. Unfortunately, it didn’t work —
9
three of five kids live in California, with comparably sunny weather
served birds’ nests and beehives, cacti from the Arizona desert,
— so the Swartzes recently put the Sarasota property on the market
and dried sea anemones from Morocco. The scale on top is an
for $1.58 million. In another smart real estate deal, Swartz in 2004
antique his mother purchased 60 years ago.
24 November 2013 www.TheRealDeal.com
In this cabinet (at the bottom of the photo), Swartz displays pre-
PHOTOGRAPH OF Jerry Swartz FOR THE REAL DEAL BY Christian Fernandez
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Commercial Ma r k e t
The new buzz word: Diversification Property owners no longer relying on the usual industries to snap up space
By Adam Pincus rokers frequently give tech companies the credit for keeping the Manhattan office leasing market afloat at a time when financial and legal services are shrinking their footprints. But many of the larger deals inked over the past year have been in other industries altogether. In fact, over the past four quarters there’s been a much more diverse range of companies signing office leases of 100,000 square feet or more in Manhattan compared with the pre-recession year of 2007, according to a new analysis by commercial firm Jones Lang LaSalle.
B
In its analysis, JLL found that firms striking deals for more than 100,000 square feet in 2007 fell into just seven categories. Those included finance, legal, government and high-tech. In contrast, in the 12 months through September, JLL identified 15 major categories — including new ones such as health care, education, retail trade, business services and manufacturing — that firms looking for those large spaces fell into. “I think it’s clear we are getting a more diverse mix of large tenants,” said Derek Trulson, an international director at JLL who mainly focuses on tenant representation.
26 November 2013 www.TheRealDeal.com
Manhattan office stats AVAILABILITY RATE
AVG. ASKING RENT
Manhattan Oct ’13 11.5% $59.25 Sep ’13 11.5% $59.14 Midtown Oct ’13 11.7% $69.37 Sep ’13 11.6% $69.36 Midtown South Oct ’13 9.1% $54.56 Sep ’13 9.1% $53.08 Downtown Oct ’13 14.7% $47.37 Sep ’13 14.7% $47.48 Source: Colliers International
Indeed, financial services fell from nearly a third of all large deals in 2007 to under 13 percent over the past year, while legal services declined from almost a quarter to under 10 percent. Meanwhile, education, which did not appear on the list in 2007, represented roughly 10 percent of the deals in the last year, and health care accounted for 6.5 percent. For Manhattan overall last month, the average asking rent rose by $0.11 per foot to $59.25 per square foot compared to September. The availability rate — which measures the amount of office space that’s available or will become available over the next 12 months — was flat at 11.5
percent, data from commercial firm Colliers International showed.
Midtown At Mitsui Fudosan America’s 1251 Sixth Avenue in Midtown, a financial tenant may be on its way out. The space — which spans 62,400 square feet over floors 52 and 53 — is currently occupied by the hedge fund Moore Capital Management, but was listed last month with an occupancy date of August 2014, according to information from the data firm CoStar Group. Newmark Grubb Knight Frank, which handles leasing in the 2.4-million-square-foot tower, has the assignment. The firm did not respond to a request for comment. Continued on page 124
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In their words...
The month’s funniest and most insightful comments on real estate
“The idea of
affordable housing [built with] union construction is an oxymoron.” Richard Mack of AREA Property Partners, speaking about the high cost of union labor at Esther Muller’s Academy for Continuing Education Conference.
“I don’t want to piss Tony Malkin off.” RXR Realty’s Scott Rechler, on why he decided not to bid on the Malkins’ Empire State Building.
“When you go to an open house, you see lines out the door. It’s like they’re giving out cronuts.” Rubicon Property CEO Jason Haber on the manic demand in the high-end residential market. (Fox Business)
“I hang around architects mostly — people that wanna make things as dope as possible and by default make money from it.” Rapper
“It’s always nice to know you’ll have quiet neighbors.” Developer Jared Kushner, noting that his Puck Building penthouses overlook a cemetery. (The New York Times)
“When you build a whole bunch of brand-new buildings financed by banks and have, you know, a fuckload of debt service, you end up with a lot of Duane Reades.” Jed Walentas of Two Trees on the advantage of using the company’s own money for the Domino Sugar factory redevelopment in Williamsburg. (New York Magazine)
Kanye West, speaking about his design inspirations in an interview with BBC Radio 1.
“When you go buy “Next year I’ll go a Birkin bag at into the 85- to Hermès, you’re not 89-year-old age calculating how group, where the much you’re paying average age is for every inch of deceased.” Developer your bag.” Broker-turnedCharles Urstadt, founder of Urstadt developer Michael Shvo, when asked about the high prices at his forthcoming condo at 239 10th Avenue. (The New York Times) 28 November 2013 www.TheRealDeal.com
Biddle Properties, who is a world championship record holder in the breaststroke for 80- to 84-year-olds. (Wall Street Journal)
“Greed is always tempered by fear.” Douglaston Development chairman Jeffrey Levine on the company’s decision to go with the safer option of rentals instead of condos at the 510-unit 1 North 4th Place in Williamsburg. (Bloomberg) www.TheRealDeal.com August 2006 00
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Commercial
Behind hedge funds’ high-flying leases Even as big banks scale back, boutique financial firms are snapping up office space in Midtown’s priciest corridors B y G uelda V oien ven as big banks continue to suffer, some segments of the financial services industry are improving. The evidence of that can be found in the city’s priciest office leasing market, Midtown, and especially in the ritzy Plaza District. Indeed, 5.6 million square feet of office space was leased in the second quarter in Midtown — up from just over 2 million the previous quarter and the highest quarterly volume since 2007, according to numbers from commercial firm Colliers International. And sources said hedge funds, private equity firms, sovereign wealth funds, and other smaller financial firms are driving much of that improvement, with some leases even clocking in over a stunning $200 a square foot. Indeed, brokers pointed out that some of the priciest buildings in Midtown — the Seagram Building, 9 West 57th Street and the General Motors Building — have signed new boutique financial tenants in the last six months. But while the increase in activity among boutique financial firms is good news for landlords and brokers, it is no substitute for the activity that larger banks were posting in the area before they started scaling back, sources said. That’s because these smaller firms need far less space — and because they’re often picky about the type of space they want (sweeping views of Central Park is a common criteria.) As a result, they don’t jump at everything they’re shown, sources noted. “[Saving] money is not the key driver” in how these firms make leasing decisions, said Marisa Manley, president of Commercial Tenant Real Estate Representation, a real estate consultancy. “It’s prestige and personal preference.” The buildings that are coveted by these firms — especially those with internationally recognizable addresses on Fifth or Park avenues — are seeing pre-recession rents.
E
While the Plaza District — the area between Sixth and Third avenues from 47th to 65th streets — had the highest vacancy rate of any Manhattan submarket last year because of its dependence on banks, its fortunes have since reversed. The district, traditionally Manhattan’s priciest, saw leasing skyrocket 255 percent between this year’s first and second quarters. Meanwhile, rents grew 3.4 percent between 2012’s and 2013’s third quarters, to $77.59 per square foot, according to Colliers’ numbers. Other Midtown stretches in the higher price strata, such as the Fifth/Madison and Park Avenue submarkets, also saw numbers skyrocket, according to stats from Cassidy Turley. In the Fifth/Madison submarket, average asking rents grew 33.4 percent, to $106.59 in the third quarter, year-over-year; while on Park Avenue they jumped to $89.83, up 16.5 percent from last year at this time. And so far this year, 50 office leases in Manhattan with rents north of $100 per square foot were signed, compared to 41 in all of 2012, according to Colliers’ data. That means that those high-priced leases — which are virtually all clustered in Midtown — are on pace to nearly double this year. Nonetheless, some brokers warn that the uptick could be temporary, and that if the financial markets slide these firms could pull back their office space needs. “It is still a tenant’s market,” said Neil Goldmacher, vice chairman at Newmark Grubb Knight Frank, citing a vacancy rate in Manhattan overall hovering around 11 percent. And landlords are now finding themselves catering to the demands of hedge funders — who are used to getting their way, sources said. “It’s like, ‘We want what we want, and we want it now,’” said Manley, referring to renting space to powerful financial executives. Below is a look at some of the recent leases that hedge funds and other boutique financial firms have inked in Midtown.
Some of the most expensive buildings in Midtown — the Seagram Building, 9 West 57th Street and the General Motors Building — have signed new boutique financial tenants in the last six months.
a Corsair Capital
lished reports. Northern Trust, which had $97 billion in assets as of June, took the entire 21st floor; rents were not disclosed but are reported to be over $100 per square foot for many prime spots in the building. Gus Field of Cushman & Wakefield represented Northern Trust, while Howard Fiddle of CBRE negotiated on behalf of LeFrak. “We are delighted that yet another elite company has chosen 40 West,” LeFrak CEO Richard LeFrak said in a statement.
One of the country’s older private equity firms, Corsair, signed a 10-year, 16,500-square-foot renewal and expansion at 717 Fifth Avenue in July. Corsair now occupies the 23rd and 24th floors of the SL Green-owned tower. According to one source, rents in the building start at $110 per square foot.
b 400 Capital; Canada Pension Plan Inv. Board Both the $800 million New York-based hedge fund and the group of Canadian pension funds took full-floor spaces of about 10,000 square feet at 510 Madison Avenue in July. The glass tower, which Harry Macklowe lost to Boston Properties during the downturn, was once looking to get rents around $100 a square foot, said Goldmacher. That would have bumped the tower into an elite tier of Manhattan buildings that command three-digit rents. However, Boston Properties is currently asking rents in the upper $90s. CBRE brokers represented all of the parties involved.
c Northern Trust The LeFrak Organization signed massive Chicago-based investment manager Northern Trust to a 25,000-square-foot lease at 40 West 57th Street, according to pub30 November 2013 www.TheRealDeal.com
d Temasek Billionaire Leon Cooperman heads up hedge fund Omega Advisors. 40 West 57th Street, where investment manager Northern Trust leased 25,000 square feet
810 Seventh Avenue, where hedge fund Omega Advisors leased 17,000 square feet
Richard LeFrak, whose company owns 40 West 57th Street
This Singapore-based sovereign wealth fund leased a full floor at Aby Rosen’s Midtown trophy tower 375 Park Avenue (aka the Seagram Building) in August, as TRD first reported. The space, which spans the entire 14th floor, was on the market for $145 per square foot, said Goldmacher, who represented the fund. While that asking rent might seem high, Goldmacher noted that RFR “has been trying to get rents even above that on certain floors” at the tower. The new space measures a little more than 20,000 square feet, according to Property Shark. The office is Temasek’s first in New York City.
e Och-Ziff Capital MGMT In June, Sheldon Solow famously rented space at his 9 West 57th Street at more
Commercial
c
e a
f
b
h d
Hedge fund Contour recently doubled its space at 99 Park Avenue.
g i
Developer Harry Macklowe,, who lost 510 Madison Avenue to Boston Properties
than $200 per square foot — a benchmark some analysts were surprised to see so soon after the downturn. Och-Ziff Capital Management — one of the world’s largest hedge funds and one of very few publicly traded alternative asset managers — leased 95,000 square feet in a renewal and expansion, according to CoStar. That deal included a $100-per-square-foot transaction on the 13th floor and a $210-per-square-foot deal on the 39th and 40th floors, said John Ryan III, a principal at Avison Young, who was not involved in the deal. He said that only when “rent is not driving the decision” does such pricey trophy space make sense.
f Omega Advisors Billionaire hedge fund manager Leon Cooperman’s Omega Advisors’ lease at 810 Seventh Avenue, reported in July, actually seems like quite a deal when compared to some Manhattan leases by similar funds. Omega nabbed 17,000 square feet in a deal for the entire 33rd floor, facing Central Park, for rents in the low $60s per square foot, according to Goldmacher, who represented Omega. The firm, he said, lucked out, because the space was already configured for a trading floor and SL Green offered to pick up the tab for Omega’s further modifications. “It was a fortuitous situation for both landlord and tenant,” Goldmacher said. SL Green was represented by a team from Cushman & Wakefield.
g QFR
510 Madison Avenue recently secured two new financial tenants, the hedge fund 400 Capital and a group of Canadian pension funds.
When the Durst Organization first broke ground on the building that became the Bank of America tower at 1 Bryant Park, chairman Douglas Durst told the New York Post, “Our rents will have a ‘1’ in front of them.” In April, the company achieved this feat, leasing a renewal and expansion for hedge fund QFR, which, according to its website, specializes in investments in “non-G7 countries,” for about 43,000 square feet. A source with knowledge of
the deal said taking rent was “north of $100 per square foot.” With the deal, the building is now 99 percent leased, according to CoStar. Cushman’s Jared Horowitz represented QFR, while Tom Bow represented Durst in-house.
h Long Pond Capital; Meru Capital; Wunderlich Securities Three financial firms signed leases at Plaza District trophy 527 Madison Avenue in September. New York City-based hedge fund Long Pond Capital signed a four-year, 8,200-square-foot lease for the 15th floor of the Mitsui Fudosan-owned tower, while Memphis-based fixed-income brokerage and financial advisory Wunderlich Securities took 8,600 square feet on the 10th floor for five years. Meru Capital, a hedge fund, also signed an approximately 8,000-squarefoot lease, renewing its 17th-floor space for six years at $85 per square foot, according to CoStar. The three leases bring the vacancy in the approximately 200,000-square-foot building down to 5.9 percent, according to CoStar. “Full-floor layouts and city views” attracted the firms, said James Frederick, principal at Cassidy Turley, who, along with colleague Peter Occhi, represented the landlord in all three transactions. He declined to comment on rents.
The Seagram Building, where a sovereign wealth fund recently signed on as an office tenant
Developer Aby Rosen, who owns the Seagram Building
i Contour The hedge fund Contour doubled its space at 99 Park Avenue in September, to about 4,500 square feet on the 26-story building’s 15th floor. Asking rents in the Eastgate Realty-owned building are reportedly in the $50s per square foot. Contour signed a relatively short four-year lease. “You’re starting to see the boutique financial sector grow,” Newmark Grubb Knight Frank’s Eric Cagner, who represented the tenant, told Crain’s. “But after the last downturn, they’ve also figured out how to do more with less.” TRD
9 West 57th Street, where Sheldon Solow famously signed a financial tenant to more than $200 a square foot
www.TheRealDeal.com November 2013 31
GOVERNMENT BRIEFS
REGULATING REAL ESTATE
Leveling the playing field on closing costs Mortgage brokers seek to change ‘unfair’ rules on rebates By Kenneth Harney he government shutdown and the debt limit have dominated the headlines, but a behindthe-scenes fight over federal mortgage policy has been brewing, and it could affect buyers’ choices the next time they apply for a home loan. The issue concerns differing rules for different types of mortgage sources. Some mortgage brokerage firms have begun advertising that they offer substantial credits to their customers — often in the $2,000 to $5,000 range per loan, but sometimes more than $10,000 — that can be used to defray borrowers’ closing costs. A survey of 164 member firms of the National Association of Mortgage Brokers found that these companies provided more than $69 million in closing-cost credits to clients last year, and are on track to pay out the same or more this year. The group estimates that brokers nationwide rebated upward of $2 billion in 2012. To illustrate: Charles Berryman, a departmental chairman at Louisiana State University, closed on a $295,900 mortgage to purchase a home earlier this year. It carried a 3 percent fixed rate for 15 years. Essential
T
pay them a premium for the loan. When brokers do receive premiums, the extra money must be credited to the borrower. The rules are an outgrowth of abuses during the mortgage-boom years, when some brokers steered unsuspecting customers to higher-cost loans in order to fatten fees for themselves. Banks that lend their own money, by contrast, are under no such requirements on premiums. They have the option to offer an applicant a credit — or not — in connection with a given interest rate. In Berryman’s case, for example, the two banks he shopped quoted identical 3 percent rates even though they may have had the flexibility to sweeten the pot with a closing-cost credit. Like most mortgage customers, Berryman was not aware that they might have some flexibility, and never asked. The brokerage firm that he ultimately selected, on the other hand, actively advertises its credits and makes them a selling point with potential clients. So where’s the controversy, and what should mortgage shoppers do with this information? Here’s the issue: Brokers complain that they are treated un-
A survey of 164 member firms of the National Association of Mortgage Brokers found that these companies provided more than $69 million in closing-cost credits to clients last year. Mortgage Co., a large brokerage firm in his area, credited him $3,500 to defray his closing costs. In an interview, Berryman said he had shopped at two competing banks before making his choice. They offered the same attractive 3 percent fixed rate, he said, but no credits. The availability and size of the closing-cost money sealed the deal for him, he said. Plus, “it really surprised me,” he added, that one mortgage company could offer such a sweetener while competitors apparently would not or could not. Though no one explained it to him at the time, there was an important reason for the difference. The brokerage firm, Essential Mortgage, was required by federal rules to rebate the money to Berryman. The two competing banks were not. This is because under regulations issued by the Federal Reserve, brokers — who do not lend their own money but can shop among multiple creditors on behalf of borrowers — must disclose all their fees upfront to applicants. They are not permitted to earn any more than the disclosed amounts even if the funding source they choose for a buyer at a specific interest rate will
equally under current rules — they are forced to rebate money, thereby limiting their potential income on transactions, while competitors are not. Plus, they worry that new “qualified mortgage” rules scheduled to take effect in January that set a limit on total allowable fees in home loans will only make matters worse. They have protested to federal regulators and are pushing for Congressional legislation that would change the rules, but so far have been unsuccessful. What should mortgage applicants take away from all this? Most important, when they shop among competing banks and mortgage companies, they shouldn’t focus solely on interest rates. They should ask about the possibility of credits toward closing costs. If a lender is quoting the “posted” rate at the time of the inquiry, there may be credits toward closing expenses available at that rate or at another rate. Homebuyers should review the full range of rate scenarios, fees, monthly payments and cash needed to close with the loan officer. Like professor Berryman, they just might be surprised. Ken Harney is a syndicated columnist.
Midtown East rezoning heads to the City Council The City Planning Commission unanimously approved the Bloomberg administration’s Midtown East rezoning plan, Crain’s reported. The vote was a crucial Grand Central station step in the approval process for the controversial plan, which has drawn criticism from community groups and some public officials. The rezoning now faces its final test in front of the City Council, which is now holding public hearings on the plan and has until the end of this month to vote on it. The plan would upzone a large swath of Midtown to encourage the construction of new, modern skyscrapers. The city would sell air rights to allow that development, using the proceeds to pay for transit and pedestrian improvements around Grand Central station.
Sweetheart WTC naming deal scrutinized by AG’s office State Attorney General Eric Schneiderman has launched a probe to investigate a 1986 deal in which late Port Authority of New York and New Jersey executive Guy Tozzoli and his group, the World Trade Center Association, purchased the World Trade Center’s naming rights for just $10, the New York Post reported. While Tozzoli earned tens of millions by selling the rights to the name Guy Tozzoli to hundreds of companies, the Port Authority allegedly never saw a dime. Tozzoli, who oversaw the design and construction of the Twin Towers, died in February and has since been succeeded by Eric Dahl.
Two Trees wants to put Domino’s affordable housing across the street Two Trees Management wants to put nearly a third of the affordable housing at the Domino Sugar factory development across the street from the rest of the waterfront project, the Brooklyn Paper reported. Two Trees last month The Domino Sugar factory argued before the Department of Housing Preservation and Development that all the development parcels of the 2,284-apartment Williamsburg project should be treated as one large parcel, a move that would allow Two Trees to put many of the project’s affordable units into the first tower, on Kent Avenue between South Third and South Fourth streets, rather than spreading them evenly throughout the five planned towers. Some community members expressed concern that the plan amounts to a “separate-but-equal” approach, but Dave Lombino, head of special projects for Two Trees, said that isn’t the case. “Let’s be clear: Two Trees is 100 percent committed to ending the ‘poor door’ trend in Williamsburg,” he said. Compiled by Sanna Chu
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32 November 2013 www.TheRealDeal.com
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Dolly’snext act A
By Katherine Clarke t the top of the residential brokerage food chain, where agents regularly do deals over $20 million, firm-hopping is rare. When a mega-broker does jump ship, it’s usually to another major company. So the real estate industry was taken aback in June when Douglas Elliman’s Dolly Lenz — for years viewed as one of the most successful (if not the most successful) real estate brokers in the country — abruptly left New York City’s largest brokerage and went out on her own. By July, the 56-year-old Lenz had formed Dolly Lenz Real Estate and staffed it with her husband and nine other people. The firm already has a number of high-profile listings, including an $80 million exclusive on a four-bedroom penthouse at the Plaza belonging to fashion magnate Tommy Hilfiger, and a $50 million apartment at the boutique condominium 66 East 11th Street. Lenz also hosts her own TV show, “Secret Lives of
The super-broker’s new company already has $384 million worth of listings, but can she maintain her success without the city’s largest firm behind her?
been considering the departure for some time before it was announced, and had been consulting with brand strategists to strengthen her image before the break from Elliman. Lenz declined to be interviewed for this article, as did Elliman’s principals, chairman Howard Lorber and CEO Dottie Herman. But Paul Purcell — a principal at brokerage Rutenberg Realty who worked with Lenz in his former capacity as president of Douglas Elliman — said the circumstances of Lenz’s departure suggest that “something happened.” “This is not a woman that makes snap decisions,” he said, noting that he had no direct knowledge of those circumstances. “One day she’s there and the next she’s gone? That doesn’t smell right to me.” The move has not come without consequences for Lenz. Before leaving Elliman, she snagged a co-exclusive on one of the city’s highest-priced listings: a $95 million penthouse at the Sherry Netherland owned by former Liberty Travel CEO Gil-
“Something happened. This is not a woman that makes snap decisions. One day she’s there and the next she’s gone? That doesn’t smell right to me.” Paul Purcell, Rutenberg Realty the Super Rich,” which in September was picked up by CNBC for eight half-hour episodes. But Lenz’s star power and track record of deal-making don’t guarantee that she’ll be able to lead a successful brokerage firm — if that’s even her strategy. Rather than heading up a large major firm, Lenz may prefer to keep her new firm boutique, sources said. Lenz’s firm does not yet have a website or an office, although sources said it is likely to secure office space in the coming months. For now, the company’s address is listed on the New York State Department of State’s website as 230 West 56th Street — Lenz’s home at the Park Imperial condominium. Her personal website still lists her title as vice chairman of Douglas Elliman, and gives her Elliman email address. The new firm’s abrupt rollout has fueled rumors that Lenz’s departure from Elliman was not entirely amicable; that she was fired or quit after a falling-out with the company’s heads. Others disputed that account, saying Lenz had
34 November 2013 www.TheRealDeal.com
bert Haroche. When Lenz left the company eight months later, she lost that listing to Elliman’s Lisa Simonsen. Still, Lenz isn’t hurting for business. Her firm currently has exclusives on some $384 million worth of real estate, according to the listings website StreetEasy. That’s more than some of the city’s largest residential firms, including Nest Seekers International, Rutenberg, and Coldwell Banker Bellmarc, according to TRD’s most recent ranking of the city’s largest firms.
Flying solo Indeed, whether it was planned in advance or not, Lenz’s new firm seems to be off to a strong start. In addition to Lenz, there are the 10 brokers’ licenses registered to the new firm, according to the DOS website. That’s up from just six in July, when she first launched the company. The agents with licenses at Dolly Lenz Real Estate include the founder’s husband, Aaron Lenz, a former CPA who has assisted his wife on deals for years. The other agents at her firm are: Georgia Wood,
Dolly Lenz, founder of the newly launched Dolly Lenz Real Estate
www.TheRealDeal.com January 2011 25
Pr o f i l e Matthew Johnson, Tricia Johnson Reilly, Brett Forman, Deborah Chuk Jaroch, Adam Vanderbrook, Nicholas Polihros, Joe Wagner and Scott Musmanno. Sources said these agents are largely assistants to Lenz rather than brokers in their own right. According to StreetEasy, none of them currently have listings of their own, although a spokesperson for Lenz said they do sometimes have their own exclusives. As for Lenz herself, in addition to 66 East 11th Street and Hilfiger’s Plaza listing, she is currently representing a $25
tial Real Estate and Relocation Services network to become its newest franchisee. (Elliman severed its relationship with Prudential last year, leaving Prudential without a New York City-based partner.) A Prudential Real Estate spokesperson did not respond to a request for comment. But Lenz also has the option of keeping the firm as a boutique operation that revolves around her own exclusives. Whatever her plans, some industry insiders were not at all surprised that Lenz — whose clients have included celebri-
Delos’ new boutique condominium at 66 East 11th Street, which Lenz is marketing
Left, Elliman CEO Dottie Herman. Middle, spiritual guru Deepak Chopra, a former client of Lenz’s with whom she sits on the board of advisors at Delos. Right, Lenz has the exclusive on an $80 million, four-bedroom penthouse at the Plaza belonging to fashion magnate Tommy Hilfiger.
close. “It was inevitable she’d go out on her own. It was long overdue.” Lenz’s tendency to work alone dates back to the beginning of her brokerage career in the 1990s, sources said. That’s when she discovered that she didn’t fit it in with the Chanel-wearing crew of brokers who controlled the market for co-ops on the Upper East Side, industry veterans recalled. Unlike some of the brokers who work in Manhattan’s multimillion sphere, Lenz did not grow up with a silver spoon in her mouth. The child of Spanish parents, she was raised Idaliz Dolly Camino in Washington Heights. She studied accounting at Baruch College and worked as a financial auditor before moving into real estate. She started out at L.B. Kaye, a small firm in Manhattan, before joining Sotheby’s International Realty — and eventually Elliman in 1999. Unlike the high-society brokers who dominated the luxury market at the time, Lenz wore little makeup and did not fit then-widespread stereotypes about real estate brokers: moneyed, fur-coat-wearing divorcées. “In a business where image is everything, she sort of bucked the trend,” Purcell recalled. Lenz underwent an image transformation several years after joining Elliman — she reportedly slimmed down by running daily in Central Park, dyed her hair progressively blonder and started wearing designer clothes. (Still, her views on fashion have not entirely changed. “Am I the only woman who hates to shop?” Lenz Tweeted last month. “Who has the time anyway?”) Lenz quickly found her niche in the burgeoning condo market, at a time when other brokers focused on co-ops, colleagues recalled. Soon she was also a top
That reputation has persisted to this day. “She played everything very close to the chest,” said Elliman broker Frances Katzen, who has been at the firm for nine years but said she does not know Lenz well. “She didn’t play the same game as everyone else. She wasn’t social with the other brokers, but she knew everyone.” Katzen recalled Lenz approaching her several years ago at Elliman’s annual awards ceremony. “’You’re the dancer,’” Lenz said, referring to Katzen’s previous career as a professional ballerina. When Katzen asked how she knew about her background, Lenz replied: “’It’s my job to know.’” Lenz did befriend fellow Elliman broker Michael Shvo (who has recently reemerged as a developer). The duo famously teamed up for a short time during Shvo’s tenure at Elliman. But the affiliation was short-lived. The two parted ways after Lenz reportedly accused Shvo of attempting to steal her clients, according to Stephen Gaines’ 2006 book “The Sky’s the Limit: Passion and Property in Manhattan.” Lenz found crowbar marks on her office door, Gaines wrote, and claimed that Shvo had broken into her computer to download information on her clients. Shvo declined to comment for this story.
Tensions with Elliman Lenz’s competitors have long griped about her behavior, and she has been dogged for years by rumors that she’s stolen clients from other brokers. But a spokesperson for Lenz denied those allegations, calling them “false and malicious gossip coming from those who are clearly misinformed or merely spiteful.” Meanwhile, as of last month, there was one pending complaint against Lenz filed with the Department of State, according
Elliman principals were reportedly displeased with Lenz’s close association with Delos, the NYC-based “wellness real estate” company developing 66 East 11th Street.
The penthouse at 133 East 64th Street once owned by Bernie Madoff, which Lenz is now listing for $17.25 million
million maisonette at 817 Fifth Avenue and a co-op at 510 Park Avenue priced at $14.95 million. She’s also listing the $17.25 million Upper East Side penthouse once owned by confessed Ponzi schemer Bernie Madoff. And last month, Lenz listed 40 units at the Trump Soho Hotel Condominium as a co-exclusive with Forman. It’s unclear whether Lenz has plans to bring on more brokers and grow the firm. Sources said she approached the Pruden-
28 March 2012 www.TheRealDeal.com
ties like Barbra Streisand, Sean “Diddy” Combs, Billy Joel and Mariah Carey — launched her own company rather than joining another firm. Despite her long tenure at Elliman, she has a reputation for operating largely independently, and for creating drama. “Dolly has always been an entity unto herself,” said Elliman broker Leonard Steinberg, who characterized his relationship with Lenz as friendly but not
broker not just in New York City but in the Hamptons: In 2004, she set a record for the highest-price single-family home sale on the East End, when she sold an 18,000-square-foot estate in Wainscott to pharmaceutical mogul Stewart Rahr for $45 million. And in 2006, Lenz broke a building record at the famed Dakota on the Upper West Side, selling a $20.5 million unit to Philip Milstein, heir to the Milstein real estate fortune. But she rarely socialized with other brokers at Elliman, and fellow brokers complained that she didn’t return their calls or seem willing to co-broke deals. “People can be jealous of other people’s success,” Purcell said. “If you don’t dress the way the matrons do or play the way they play, it can breed resentment.”
to information released to The Real Deal in response to a Freedom of Information Law request. In response to the complaint, which alleged that Lenz conspired to “undermine a sale at a condominium project,” the DOS launched an investigation into whether she violated New York State Real Property Law. The agency declined to provide further details about the complaint, the building or the identity of the accuser, or reveal if anyone else was involved in the matter. The agency told TRD that the investigation had, however, been temporarily suspended pending review by another governmental entity earlier this year, and will be opened again. Lenz’s spokesperson said: “Ms. Lenz Continued on page 118
www.TheRealDeal.com November 2013 35
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Where are the rentals? A look at the recovering, but still meager, pipeline of new apartments for lease
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1. 250 North 10th Street in Williamsburg 2. The Gotham Organization’s Gotham West project on the Far West Side 3. Atelier II at 605 West 42nd Street 4. 363 Bond Street in Gowanus 5. 50 North 5th Street in Williamsburg 6. Landmark Park Slope at 267 6th Street in Park Slope 7. Williamsburg Social at 250 Bedford Avenue 8. 101 Bedford in Williamsburg 9. Chelsea Park at 260 West 26th Street in Chelsea 10. Crystal Green at 330 West 39th Street in Midtown West 11. The Nash at 222 East 39th Street in Murray Hill 12. The Larstrand at 227 West 77th Street on the Upper West Side 13. The Dylan at 309 Fifth Avenue in Midtown East 14. Strata @ Mercedes House at 554 West 54th Street 15. Dunham Place in Williamsburg 16. Acacia at 1560 Fulton Street in Bedford Stuyvesant 17. Landmark Park Slope at 267 6th Street in Park Slope 18. 125 North 10th Street 19. The Williamsburg at 373 Wythe Avenue in Williamsburg 20. Bloom 62 at 62 Avenue B in the East Village
A
By Hayley Kaplan fter the 2008 financial crisis, rattled New Yorkers pulled back on home-buying and started writing rent checks in force, while developers leased out condo units rather than selling them. Five years later, the rental market in the city is going strong, but for a different set of reasons. The pipeline of new rental units has massively shrunk in the past few years, part of the inventory shortage set in motion when new development across the city stalled during the recession. Since the late 1960s, Manhattan has seen an average of roughly 12,000 new development rental units hit the market each year, said Jesse Keenan, the research director at Columbia University’s Center for Urban Real Estate. But according to data from the brokerage Citi Habitats, only 15,723 new development rentals units came on the market from 2008 to 2012. The pipeline of new rentals is now beginning to recover from the recession. There are some 23,000 new development rental units slated to come on the market in Manhattan by the end of 2017, according to Citi Habitats. While that’s an improvement from the recession years, it’s still “pretty low in terms of historical trends,” Keenan said. And the supply of new rentals is not expected to swell any38 November 2013 www.TheRealDeal.com
time soon. With home prices sky-high and banks more open to construction lending, developers have started building condos again after several years of preferring to build rentals. And with land now so costly, many developers have determined that luxury condos are the best way to turn a profit. Because condo prices have “shot up so quickly,” said Andrew Barrocas, CEO of residential brokerage MNS, “there are very few rental projects being planned.” As a result, the few rental projects hitting the market now are seeing a frenzy of demand, with some generating waiting
The Real Deal compiled a list of the new rental developments in Manhattan and prime Brooklyn that have come on the market in the past year, and those currently in the pipeline.
The waiting game In the last year, some 22 large new-construction rental buildings (those with 15 or more units) have hit the market in Manhattan and prime Brooklyn, according to data from real estate database CityRealty and permits filed with the Department of Buildings. That figure — which includes 10
Many of the rental developments wending their way through the pipeline — such as the 2,200-plus-unit Domino Sugar site in Brooklyn — will have many more units than the projects that are on the market now. lists of up to 1,000 potential tenants, industry insiders said. And while most new rental developments on the market now are relatively small, many of the projects in the pipeline are massive, though the units themselves are smaller than in the past. Perhaps not surprisingly given the shortage of supply, rents for these new projects are on the rise. To get a handle on the construction of rentals in the city,
projects in Manhattan and 12 in Brooklyn — is significantly lower than in most years, sources said. “If you really look, there’s not that many rental buildings in the city right now,” said Andrew Gerringer, the managing director of new business development at the Marketing Directors. He noted that large new rental projects that started leas-
New Development
New development rental projects in the pipeline
Source: Data is from the Marketing Directors, CityRealty and TRD research. It includes only new development rentals projects with at least 15 units in prime Brooklyn and Manhattan below 96th Street.
Neighborhood
No. of Units
Developer
Domino Sugar, 316 Kent Avenue
Williamsburg
2,284
Two Trees Management Company
Atelier II, 605 West 42nd Street
Hell’s Kitchen
1,669
Moinian Group
Gotham West, 550 West 45th Street
Hell’s Kitchen
1,240
Gotham Organization
Name/Address
70 Pine Street
Financial District
1,000
Rose Associates
Manhattan West, West 33rd Street and Ninth Avenue
Hudson Yards
900
Brookfield Office Properties
Avalon Willoughby West, 88 Willoughby Street
Downtown Brooklyn
861
AvalonBay
616 First Avenue
Murray Hill
800
JDS Development and Property Management Group
The Hub, 333 Schermerhorn Street
Downtown Brooklyn
720
Steiner Family
West57, 625 West 57th Street
Midtown West
711
Durst Fetner Residential
Avalon Chelsea, 525 West 28th Street
Chelsea
700
AvalonBay
602 West 57th Street
Midtown West
700
TF Cornerstone
363-365 Bond Street
Gowanus
700
Lightstone Group
Greenpoint Landing and 77 Commercial Street
Greenpoint
700
Chetrit Group and David Bistricer
Hudson Yards, 11th Avenue and 30th Street
Hudson Yards
680
Related Companies and Oxford Properties Group
21 West End Avenue
Lincoln Square
616
Dermot Co.
537-551 10th Avenue
Hell’s Kitchen
600
Extell Development
BAM site, Rockwell Place, Fulton Street and Ashland Place
Fort Greene
600
Gotham Organization and DT Salazar
1 North 4th Place
Williamsburg
510
Douglaston Development, RD Management and L&M Development
111 Washington Street
Financial District
500
Pink Stone Capital
112-120 Fulton Street
Financial District
463
Lightstone Group
525 West 52nd Street
Midtown West
400
Taconic Investment Partners
500 West 30th Street
Midtown West
386
Related Companies and Abingdon Properties
Atlantic Yards, Phase 1
Prospect Heights
363
Forest City Ratner
BAM Tower, Flatbush Avenue, Ashland Place and Lafayette Avenue
Downtown Brooklyn
350
Two Trees Management Company
49-55 Amsterdam Avenue
Upper West Side
339
Glenwood
29 Flatbush Avenue
Downtown Brooklyn
327
Dermot Co.
101 West 31st Street
Midtown West
300
Durst Fetner Residential
155 West 60th Street
Upper West Side
250
Glenwood
205 East 92nd Street
Upper East Side
250
Related
170 Amsterdam Avenue
Upper West Side
235
Equity Residential
388 Bridge Street
Downtown Brooklyn
234
Stahl Organization
250 North 10th Street
Williamsburg
232
LCOR
204 Wythe Avenue
Williamsburg
229
Area Property Partners, Urban Development Partners and Mack Real Estate Capital
Oro 2, 311 Gold Street
Downtown Brooklyn
208
Ron Herscho and Dean Palin
Hudson Yards, 35th Street & 10th Avenue
Hudson Yards
200
Sherwood Equities
509 West 38th Street
Midtown West
200
Iliad Development
546 West 44th Street
Midtown West
198
DHA Capital
246-248 North 8th Street and 251-255 North 7th Street
Williamsburg
170
Silverstone Property Group
The Lara, 113 Nassau Street
Financial District
168
Anne/Nassau Realty
304 Fifth Avenue
Midtown East
165
Urban Development Partners
158-160 Madison Avenue
Midtown East
150
J.D. Carlisle Development
209-231 McGuinness Boulevard
Greenpoint
140
Paul Pullo
310 East 2nd Street
Lower East Side
135
Kahen Properties
261 North 9th Street
Williamsburg
120
Fortis Property Group
74-84 Third Avenue
East Village
114
YYY Third Avenue
146 South 4th Street
Williamsburg
113
Rabsky Group Related Companies
460 Washington Street
Tribeca
107
278 6th Street
Park Slope
107
278 6th Street LLC
223 North 8th Street
Williamsburg
95
Westbrook Partners
200 East 39th Street
Murray Hill
91
SK Development
40 North 4th Street
Williamsburg
86
Waterview Lofts LLC
The Union, 544 Union Avenue
Williamsburg
85
Heatherwood NYC
Steelworks Loft, 76 North 4th Street
Williamsburg
83
Jacob Toll and Cayuga Capital Management
500 Metropolitan Avenue
Greenpoint
81
Chetrit Group and Stellar Management
285 Broadway
Tribeca
81
Midwood Investment & Development
393 West End Avenue
Upper West Side
75
Simon Development Group
338 Berry Street
Williamsburg
65
Mona Gora
385 Fourth Avenue
Park Slope
52
278 6th Street LLC
101 West Street
Financial District
50
Davis Companies & Cayuga Capital
Triangle Court, 456 Grand Street
Williamsburg
50
The Triangle Court LLC
172-174 Montague Street
Downtown Brooklyn
45
Dayan, Stoll & Spinner
316 East 3rd Street
East Village
33
Brody/Amirian
800 Union Street
Park Slope
28
Midwood Investment & Development
141 East 96th Street
Upper East Side
18
Adam Rothberg
154 North 7th Street
Williamsburg
18
Jerry Lebedowicz
255 Berry Street
Williamsburg
18
Cheskel Strulowitz
www.TheRealDeal.com November 2013 39
New Development
New development rental projects on the market Name/address
Neighborhood
No. of units
Developer
101 Bedford, 101 Bedford Avenue
Williamsburg
351
Halcyon Management
50 North 5th, 50 North 5th Street
Williamsburg
229
Mack Real Estate Capital Group and Urban Development Partners
Chelsea Park, 260 West 26th Street
Chelsea
204
Artimus
Crystal Green, 330 West 39th Street
Midtown West
199
Glenwood
The Nash, 222 East 39th Street
Murray Hill
187
Atlas Capital Group
The Larstrand, 227 West 77th Street
Upper West Side
181
Friedland Properties
The Dylan, 309 Fifth Avenue
Midtown East
165
Urban Development Partners
Strata @ Mercedes House, 554 West 54th Street
Hell’s Kitchen
162
Invesco Inc.
Dunham Place, 15 Dunham Place
Williamsburg
160
L&M Development Partners
Acacia, 1560 Fulton Street
Bedford Stuyvesant
105
BRP Development
Landmark Park Slope, 267 6th Street
Park Slope
104
Naftali Group
The Williamsburg, 372 Wythe Avenue
Williamsburg
84
Wythe Properties
Bloom 62, 62 Avenue B
East Village
81
Magnum Real Estate Group
53 Broadway
Williamsburg
72
Adam America Real Estate
The Williamsburg Social, 250 Bedford Avenue
Williamsburg
72
Magnum Real Estate Group and SL Green Realty
Jupiter 21, 21 East 1st Street
East Village
65
BFC Partners
426 West 52nd Street
Hell’s Kitchen
55
Chetrit Group
487 Keap Street
Williamsburg
51
Chetrit Group
202 8th Street
Gowanus
51
JDS Development and Property Markets Group
184 Joralemon Street
Downtown Brooklyn
24
United American Land
93 Waverly Avenue
Clinton Hill
17
Caspi Development
167 Ludlow Street
Lower East Side
15
Magnum Real Estate Group
Source: Data is from the Marketing Directors, CityRealty and TRD research. It includes new development rental projects with at least 15 units in prime Brooklyn and Manhattan below 96th St. that began leasing between Oct. 2012 and Oct. 2013.
ing before or during the recession, such as the Beatrice at 105 West 29th Street and the Continental at 25 Third Avenue, have now been filled up. That’s contributed to new rental apartments coming on the market now getting snapped up at a never-before-seen pace. Until recently, leasing teams expected to collect a few hundred names of interested tenants before launching a new rental building, Gerringer said, although only around 20 percent of those typically actually sign a lease. But at LCOR’s 250 North 10th Street in Williamsburg, a 232-unit building where the Marketing Directors is handling leasing, he said he expects the waiting list to grow to nearly 1,000 potential tenants when the building hits the market in a few months. David Maundrell, founder of the Brooklyn-based brokerage Aptsandlofts.com, said the 229-unit rental 50 North 5th Street had a waiting list of around 1,000 names when it started leasing in August— something he said he’s never seen in his 11 years at the helm of the firm. There’s not much relief in sight. TRD identified 36 new rental projects planned to hit the market in Manhattan in the next few years, and 30 slated for Brooklyn. That relatively meager pipeline is a result of both rising land costs and shifting trends in construction financing, sources said. Immediately after the financial crisis, lenders were more willing to finance rentals than condos. But they’ve recently started warming up to condo lending again as market conditions have improved — new-construction condos now sell for upward of $2,200 per square foot, compared to $1,800 in 2006, according to Nancy Packes, founder of the eponymous marketing firm. That’s helped spur the construction of more for-sale residential units.
Howard Swarzman of Glenwood
David Walentas, co-founder of Two Trees Management
40 November 2013 www.TheRealDeal.com
Joe Chetrit of the Chetrit Group
oper could get the financing at the time, now going condo because the condo market is so strong.”
Supersized rentals
Joseph Moinian
Some major developers who have long focused on rentals are now turning their attention to condos. Sources cited Glenwood as a case in point. The Manhattan-based rental developer — responsible for buildings such as the 320-unit Regent at 45 West 60th Street, the 151-unit Tribeca Bridge Tower at 450 North End Avenue, and the
Many of the rental developments that are wending their way through the pipeline will, however, have many more units than the projects on the market now. According to TRD’s research, the 351-unit 101 Bedford in Williamsburg has the most units of any rental project to launch in the past year. By contrast, the Domino Sugar redevelopment, developed by David Walentas’ Two Trees, which is expected to break ground next year, is slated to have a stunning 2,284 rentals (although 660 of them will be set aside as affordable). And the Gotham Organization’s massive Gotham West project on the Far West Side is slated to have 700 market-rate rental apartments, plus 540 affordable units. Other new large rental projects in the pipeline include the Moinian Group’s under-construction Atelier II at 605
The supply of new rentals is not expected to swell anytime soon. With sales prices sky-high and banks more open to construction lending, developers have started building condos again after several years of focusing on rentals. 281-unit Stratford at 1385 York Avenue — is now reportedly building its first-ever condo, a 19-story project called 6 East 86. Glenwood, which is run by Howard and Steven Swarzman, the grandsons of founder Leonard Litwin, did not respond to requests for comment. “There’s a point where it no longer becomes feasible for a developer to do rental housing,” said Neil Helman, an investment sales broker at the commercial firm Avison Young. “Rents top out at a certain number, unlike condominium pricing, which just continues to escalate.” And if condo prices continue to increase, the leasing pipeline could shrink even more as projects slated to be rentals switch gears. That’s the reverse of what happened during the credit crisis, when failed condo projects started leasing out their units because buyers were scarce. “What I can see today,” Gerringer said, “is a building that was planned as rentals, because that’s was where the devel-
West 42nd Street. Due to be completed in 2015, the 61-story project is set to include 1,669 rentals, according to the most recent DOB filings. AvalonBay Communities’ Avalon Willoughby at 88 Willoughby Street in Downtown Brooklyn, meanwhile, will reportedly have 861 units. “These are all the mega-projects that weren’t going to happen during the recession,” Maundrell said. But there’s more to it than that, sources said. Packes said land costs these days are so high that the only way for developers to turn a profit is by outfitting their projects with condo-like amenities in order to charge high prices, and then packing in as many units as possible. “The frontier of competition has moved to massive amenities packages that need to be amortized over many units,” Packes said. New-construction rentals in Manhattan must now charge Continued on page 118
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OPPORTUNITY
Technology
O
By Adam Pincus n Sunday night, August 18, most of the 34 employees and executives of listings website StreetEasy gathered in the company kitchen for a game-changing announcement by CEO Michael Smith: Zillow, the $3 billion Seattle-based residential listings website, was acquiring the firm for $50 million. While the acquisition was not a surprise — employees had seen well-dressed strangers holed up with StreetEasy executives in hush-hush meetings for weeks — the buyer was. Since launching in 2005, StreetEasy has developed what’s widely considered the most accurate listing system for consumers in New York and one of the most, if not the most, comprehensive local website of its kind in the country. Meanwhile, Zillow, with 64 million unique visitors a month and counting, is the most widely used listings website nationally. But before its acquisition of StreetEasy it was considered something of a joke in New York, with inaccurate property information and low market penetration. Zillow CEO Spencer Rascoff acknowledged as much in an interview with The Real Deal shortly after the acquisition was announced: “Zillow had left something to be desired, and StreetEasy clearly remedied that,” he said. But the even bigger surprises didn’t come until after that first announcement. Six weeks later, on Monday, September 30, the employees again assembled in the kitchen, but this time the news was somber. Smith — described as a leader who aggressively pushed his staff while still managing to foster a relaxed work atmosphere — announced that he was out as CEO. Instead, he’d be taking the far less hands-on role of chairman. In addition, the firm’s recently hired chief operating officer, Robin Allstadt, would leave the company. (It’s unclear whether Smith negotiated his change in position as part of the purchase agreement.) In their place, a married couple with a tech start-up background — Susan and Matt Daimler —was installed to run the show. (Susan is now the general manager of Zillow New York, which includes StreetEasy; Matt is general manager of Zillow Pro Tools, a suite of online applications such as website AgentFolio, for the business world, as well as head of product for StreetEasy.) Days after the leadership announcement was made, news broke that StreetEasy would shutter its nascent sites in South Florida, Washington, D.C., and Philadelphia, throwing into question what strategy Zillow would be using to profit from StreetEasy’s successful model. To shed light on that, TRD spoke with more than two dozen people in the New York, Florida and Washington real estate communities to piece together an inside
42 November 2013 www.TheRealDeal.com
Zillow zaps StreetEasy In wake of Zillow’s $50 million purchase, the national listings website has carried out a series of unexpected, controversial moves that are surprising insiders.
look at the sale and Zillow’s endgame. Several of those sources declined to be named because they were not authorized to speak publicly on the matter. In addition, company officials said all employees signed a confidentiality agreement when the acquisition went through. In the short term, local insiders told TRD that consumers in Miami and D.C. will be worse off, because StreetEasy had access to 100 percent of the listings in both markets, while Zillow has about 80 percent, despite being the most-used site in those locations. “StreetEasy was regarded as a much better source of information, much more accurate,” said Alicia Cervera, managing partner at the large residential brokerage Cervera Real Estate in Miami. “I think Zillow has some challenges that create problems for the consumer and realtors alike.” While some had been hopeful that Zillow’s purchase would lead to greater transparency in urban markets around the country, the company has said it will not replicate StreetEasy’s model in other cities. “StreetEasy is our New York City brand, and Zillow is our national brand,” the company said in a statement to TRD. “We’re very excited about the massive opportunity to grow StreetEasy in New York City. StreetEasy has the number-one online real estate brand in New York City, while Zillow has the top online and mobile brand in every other major U.S. city.” The news came as a surprise to some who’ve been closely following StreetEasy since it launched. “I think they are leaving acquired technology on the table,” said Jonathan Miller, a top residential data-cruncher in the city, who prepares quarterly market reports for Douglas Elliman covering New York and South Florida. “Zillow is a national model whose strength is single-family properties, and it would benefit from the [StreetEasy] interface for high-rise properties in major urban markets,” he said.
Following the money
Zillow CEO Spencer Rascoff (left) and Michael Smith, StreetEasy’s cofounder
Zillow’s shuttering of StreetEasy’s sites in several cities and the removal of its popular CEO have not gone over well with some in the industry.
Before StreetEasy launched in New York, there was no dependable, consumer-friendly way to wade through residential listings, much less historical sales data. The go-to site at the time was the New York Times, said Noah Rosenblatt, founder of UrbanDigs, an analytics and consulting firm, and one of the city’s top apartment-tech gurus. “StreetEasy solved the problem of data transparency and data reliability,” Rosenblatt said. “Never before could you get an accurate listing history.” For example, he said, if an apartment had lingered on the market for months, the broker might simply resubmit it to the Times as a new listing to make it look fresh to potential homebuyers, he said.
www.TheRealDeal.com January 2011 25
Technology Recognizing the opportunity, Smith, along with fellow techies Nataly Kogan and Douglas Chertok, formed NMD Interactive (taken from their initials) in 2005. The following January, the company debuted StreetEasy’s website. Kogan and Chertok have since left the company. Investors took to the idea quickly, providing a total of $400,000 to the company in February 2006. Those early investors included executives at the consulting firm Global Strategy Group —StreetEasy’s original landlord at 895 Broadway — hedge fund Southpaw Capital Management and lender Sig Zises, among others, according to court records. Then, in August 2006, the Boston-based venture capital fund FA Technology Ventures invested $2.5 million, injecting the firm with cash and obtaining control of most of the firm’s preferred stock. While the exact ownership structure of the company is not public, court documents filed in connection with a lawsuit against Chertok, as well as Zillow’s contract to buy StreetEasy, which is available on the U.S. Securities and Exchange Commission website, offer clues. According to information from both of those sources, Smith was the largest stakeholder at the time the company launched, with about 64 percent of the company — or 6.45 million of the 10 million shares of common stock. (At the time, Chertok had about a 25 percent stake, a board member, Tony Schmitz, had a 9 percent stake, and Kogan had 2 percent.) By the time of Zillow’s purchase, there were nearly 10.48 million shares of outstanding common stock, according to the contract filed with the SEC. On top of that, there were nearly 6.7 million shares of preferred stock. The bulk of StreetEasy’s $50 million sale price was divided through an undisclosed formula among the company’s shareholders. While it’s unclear who all of those shareholders are, as of 2006, FA Technology owned 5.3 million shares of preferred stock, while the other early investors, including those from Global Strategy, owned 1.4 million shares. In addition, several million shares of stock and stock options were set aside for an incentive plan for the company’s employees. Calls to the investors, along with company board members, were not returned.
Parallel tracks StreetEasy was not alone in trying to corner the “real estate transparency” market at the time of its launch. Around the same time that Smith and company were getting their ducks in a row, in 2005, Richard Barton, founder of travel site Expedia, and Expedia alum Lloyd Frink founded Zillow. The site went live in early 2006, just days after StreetEasy.
28 March 2012 www.TheRealDeal.com
But the two companies had different business models and slightly different missions. Zillow, a public company, earns revenue through advertising and by selling brokers the right to place their name and contact information near property listings — often by the zip codes — even if they are not the listing broker. Earlier this year, the company predicted that it would end 2013 with revenue between $186 and $188 million. Meanwhile, its stock price has skyrocketed over the past year, from just over $45 per share in September 2012 to more than $83 per share late last month.
grate the urban landscape into their suburban-centric databases. Today, both firms have incomplete and often inaccurate data for Manhattan, a review by TRD shows. StreetEasy, on the contrary, “cracked the code,” as Rascoff said upon announcing the acquisition in August. It’s unclear why StreetEasy chose to sell now — its executives declined to comment — but with a strong stock and a generally improving housing market, market watchers said it seemed like a good time. In addition, FA Technology may have wanted out, considering the length of its investment.
Global Strategy’s office as a subtenant, took a five-year lease for a 7,500-squarefoot, second-floor space at 13 Crosby Street in Soho. “Flatiron had gotten too corporate [for Smith],” Liff said, referring to the company’s sublease location. “The culture was very important to him, to create a nice home for his employees.” The company was growing nationally as well, eyeing other so-called vertical cities that, like Manhattan, had complicated urban homeownership structures. First in South Florida, and then in D.C., and most recently in Philadelphia, the firm was on a march outward, with
The Zillow and StreetEasy teams at NASDAQ ringing the opening bell on Aug. 19, the day their deal was announced
“I think they are leaving acquired technology on the table. Zillow’s … strength is single-family properties, and it would benefit from the [StreetEasy] interface for high-rise properties in major urban markets.” Jonathan Miller, Miller Samuel StreetEasy, on the other hand, was a private firm with 1.2 million unique visitors a month. Its revenue was not disclosed, but according the contract filed with the SEC, it comes from its premier subscribers as well as from advertising. When the company first launched in Manhattan, which has no central Multiple Listing Service, StreetEasy “scraped” the data from the city’s large brokerage firms — a move initially met with ire. But in time, virtually all the brokerages saw the value of the website, and today more than 1,500 listings feeds provide listing information directly to StreetEasy, the company said. Firms such as Zillow and competitor Trulia found Manhattan’s confusing matrix of condos and co-ops difficult to navigate, brokers said. As a result, they never figured out how to smoothly inte-
Financial auditor and consultant Kevin Pianko, who had no inside knowledge of the transaction, said investors often expect to close funds within 10 years. The FA Technology fund was formed in 2001, so was considered “long in the tooth,” said Pianko, a partner at the WeiserMarzars accounting firm.
StreetEasy’s edge, blunted In 2012, with the real estate market heating up again, StreetEasy began a major hiring push, Smith told TRD in late 2012. He said the firm had grown from 13 to 23 employees in just a few months. By the time of the Zillow acquisition, it had nearly tripled to 34. Janet Liff, an independent commercial broker, represented StreetEasy in its search for more office space at the time. The firm, which had been crammed into
eyes on Chicago and then the West Coast, insiders said. While StreetEasy was entering markets that Zillow and Trulia were already in, the New York firm had an edge: its reputation for accurate information in a dense, urban market. The advantage played out in StreetEasy’s two-pronged approached to obtaining listings. Like Zillow and Trulia, it used ListHub, a West Virginia-based company that provides listing information nationwide gathered from local MLS databases. But in addition to that, StreetEasy also partnered with the local realtor feeds in the Miami area and D.C. to ensure that its listing coverage was even more comprehensive and up-to-date. StreetEasy’s reputation helped because some brokers and firms don’t perContinued on page 124
www.TheRealDeal.com November 2013 43
Raising the roof on the Jersey Shore
One year post-Sandy, construction firms see boom as homeowners elevate properties By Alex Ulam n the year since Hurricane Sandy slammed into the East Coast, construction companies have seen their business spike as homeowners tap them to rebuild, particularly on the hard-hit Jersey Shore. Among the key drivers fueling this business are existing Federal Emergency Management Agency requirements and the agency’s soon-to-be-finalized flood-zone maps. In particular, in some communities, the owners of homes that sustained more than 50 percent damage in Sandy are required to elevate their houses — literally raising them on pilings — or demolish or relocate them. Even some homeowners whose properties weren’t severely damaged are taking steps to protect against future hurricanes and to hedge against higher insurance premiums. In Long Beach Island — which is dotted with homes midway through reconstruction — a firm called David Construction LBI House Raising, for example, has seen a 50 percent increase in business since Sandy hit. To handle the extra work, the company has added several employees and doubled the number of subcontracting crews it uses. “If we could handle all the work and if we could grow that quickly, we would have 30 times the amount of business,” said Nancy Leon-
I
etti, co-owner of the firm. To get homes into FEMA compliance, Leonetti said, her firm is raising them a minimum of three to four feet above their existing height. She estimated that a two-story Cape Cod-style house, ranging from 1,400 to 1,800 square feet, can cost $50,000 to $55,000 to elevate. (In some densely packed communities, however, special pilings are necessary that can drive the cost up to $100,000.) That amount usually needs to be paid up front by the homeowner, who then gets reimbursed by the insurance company. But because hurricane-damaged interiors — including plumbing and flooring — are covered by flood insurance, many LBI homeowners are essentially getting “a brand-new house,” Leonetti said, even though they’re only paying $20,000 or $30,000, including the cost of elevating the home. Leonetti’s firm is not the only construction company seeing a boom in business. Wolfe House & Building Movers — a national home elevation company — has also seen business increase by more than 50 percent since Hurricane Sandy. Indeed, the company’s website has a section devoted to post-Sandy home elevation, which cites one Jersey Shore client in Ortley Beach whose home it raised 11 feet.
Robert Kaplan Paula Ingram Chris Lentz Mark Rutherford George Vail Paul Whalen 801 Arthur Godfrey Road Suite 201 Miami Beach, Florida 33140 (305) 503-1107 www.ackmanziff.com
Two of the many homes on Long Beach Island that are being raised to protect against future floods.
But Jersey Shore homeowners are dealing with a slew of rebuilding challenges. First, there’s a dearth of experienced home elevation contractors. Not only does that slow down rebuilding, but it’s also led to serious construction accidents, according to State Senator Bob Smith. “There are horror stories all over New Jersey,” Smith said. “The classic one was in Atlantic Highlands — [a house] flew off the jacks and crushed the adjacent home.” Smith is sponsoring a bill that would re-
quire home elevation contractors to have at least two years of training with a qualified professional, and $500,000 in specialized home-raising insurance. There are also disparities between communities. While residents of affluent LBI can typically afford the up-front costs of home elevation while awaiting reimbursement from insurance companies, homeowners in the nearby mainland communities, like Beach Haven West and Mystic Island, often can’t. Indeed, between June and September, 6,600 New Jersey homeowners applied for funding through the state’s Hazard Mitigation Grant Program, which is providing up to $30,000 toward elevating homes. In addition, many homeowners with flood insurance don’t realize that they have “Increased Cost of Compliance” coverage, which can also pay up to $30,000 toward the cost of a home elevation project, said Nathan Colmer, a realtor with the Van Dyk Group. He also noted that many homes in New Jersey’s flood-prone areas are at elevations that are safely above sea level and do not need to be raised to comply with the FEMA guidelines. “People think that every house has to be raised or they are going to be paying $20,000 a year in flood insurance,” Colmer said, “but that is absolutely not the case.” TRD
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Real Estate Records
Brooklyn’s heights As demand rises, the borough sets new records for everything from townhouses to office space
I
By Jane C. Timm t’s no secret that Brooklyn has changed dramatically in recent years, with hot new restaurants and an NBA basketball team to boot. These changes have brought significant price increases for real estate, especially now that housing demand is surging in the wake of the real estate downturn. Indeed, as neighborhoods like Brooklyn Heights, Williamsburg and Dumbo lure more Manhattanites across the river, Kings County has set a number of new real estate records. This year in particular, the ongoing inventory shortage has pushed Brooklyn prices to new highs, brokers said. “Since last January, [Brooklyn] prices have certainly escalated because of the lack of product,” said Rhea Cohen, a broker in the Brooklyn Heights office of Brown Harris Stevens. “Most co-ops and condos have been having multiple offers, and are going for higher than their asking prices.” Of course, even Brooklyn’s record-high prices still represent a significant discount to Manhattan. And there are key differences between real estate in the two boroughs. In Manhattan, it is the homes near Central Park that command the highest prices, while in Brooklyn, 48 November 2013 www.TheRealDeal.com
waterfront homes fetch the greatest premium. In addition, the most expensive properties in Manhattan are condos — with some now asking more than $100 million — but historic townhouses are Brooklyn’s priciest housing type. “The demand for these [Brooklyn townhouse] properties is voracious,” said Doug Bowen, a CORE broker who has worked in Brooklyn for nearly 15 years. Along with some enclaves in Southern Brooklyn, the Brooklyn neighborhoods closest to Manhattan, like Dumbo and Brooklyn Heights, have historically seen the highest home prices. But as the borough’s popularity grows, emerging neighborhoods like Bedford-Stuyvesant and Clinton Hill are seeing new highs. “Brooklyn is going through something really interesting,” said Joseph Cohen of Manhattan-based developer East River Properties. “It has incredible demand coming from Manhattan [and] from the suburbs, but basically no supply to speak of, and very little coming on the market. There really is very limited availability.” This month, The Real Deal took a close-up look at the Brooklyn records that have recently been broken.
A six-bedroom home at 104 Willow Street in Brooklyn Heights is on the market for $12 million, and could break a record if it fetches over ask.
Real Estate Records
Most expensive condo
The “14 Townhouses” project in Boerum Hill, which set a neighborhood record.
Brooklyn record: $7.8 million Manhattan record: $88 million
W A townhouse at 70 Willow Street in Brooklyn Heights, which set a new record when it traded for $12.5 million in 2012
Most expensive townhouse Brooklyn record: $12.5 million Manhattan record: $53 million
B
rooklyn’s highest-priced sales are generally townhouses, spurred by brownstone-loving buyers looking for original crown moldings and more space than they can afford in Manhattan. And with inventory so scarce these days, brokers said prices are climbing faster than usual in prime brownstone neighborhoods like Brooklyn Heights and Park Slope. “The townhouse market is in an uncanny place right now,” Bowen said. “The velocity of price increases — it’s better than I’ve seen in my 15 years in real estate.” Last January, for example, a seven-bedroom townhouse at 212 Columbia Heights in Brooklyn Heights sold for $11 million, setting a new record for the borough’s priciest home sale. The previous record was the 2009 sale of 2111 East Second Street in Gravesend for $10.26 million. But only a few months after the Brooklyn Heights sale, the record was shattered again by a townhouse around the corner, at 70 Willow Street. The house, where Truman Capote wrote “Breakfast at Tiffany’s,” traded for $12.5 million in March 2012. There are already a number of listings that could break that new record. The Tracy Mansion at 105 Eighth Avenue in Park Slope is on the market for $15 million. The 50-footwide former school is being listed by Halstead Property’s Marc Wisotsky and Jackie Lew. Still, it initially hit the market a year ago priced at $25 million, and has seen two price chops since then. Also in Park Slope, a seven-bedroom townhouse at 45 Montgomery Place hit the market for $14 million in late September with Douglas Elliman super-broker Raphael De Niro. That’s more than double the $6.05 million sale price the house last traded for in 2006, according to the real estate listings website StreetEasy. Late last month, a six-bedroom townhouse at 177 Pacific Street in Cobble Hill was listed for $16 million, while a gated Mill Basin compound with two houses in it hit the market for $30 million. And down the block from the Capote house, a six-bedroom home at 104 Willow Street hit the market for $12 million in late August. Halstead’s Cohen, the listing agent, said the property has been shown a few times, but has no offers yet. But she’s hoping that a recent renovation of the historic home will push it into record-breaking territory. “It was built in 1826 and it still looks like it’s 1826,” she said, “but everything is fresh and new — the piping, the beams.” Another of the borough’s priciest listings, 2134 Ocean Parkway, hit the market in May 2012 for $14 million. The 10,000-square-foot Gravesend mansion was just pricechopped, however, to $8.9 million. These prices may be new territory for Brooklyn, but they’re still far below the Manhattan record for the priciest townhouse: The Harkness Mansion at 4 East 75th Street sold for $53 million in 2006.
hen it comes to condos, the Dumbo waterfront has recently been a hotbed of record-setting prices. Buyers are willing to pay a premium for Dumbo’s waterfront views and close proximity to Manhattan, said Halstead broker Charles Homet, who often works in the neighborhood. In Dumbo, “nearly every sale we’re doing is breaking records,” Homet said. “We’re all astonished at how the prices keep moving up. We’re still cheaper than Manhattan, but it’s startling to see things trading at $1,500, $1,600 per square foot, when two years ago it was $800, $900 per square foot.” Dumbo grabbed headlines in 2010, when a 14th-floor, 3,208-square-foot penthouse at new development condo 1 Main Street sold for $7.8 million, or $2,431 per square foot, becoming the highest-priced Brooklyn apartment ever sold. And right upstairs, 1 Main Street’s famed Clock Tower penthouse is now listed for $18 million, making it the highest-priced condo on the market in Brooklyn. Visible from the Manhattan Bridge, the three-bedroom triplex penthouse has massive circular windows, floating staircases and an elevator. The 7,000-square-foot apartment is nearly double the size of its record-breaking downstairs neighbor — and that doesn’t even take into account the roof cabana and deck. The unit has, however, undergone significant price chops since it was originally listed for $25 million three years ago. It’s been priced at $18 million for the last six months, listed by Corcoran’s Aaron Lemma, Frank Castelluccio and Nicholas Hovsepian, who did not respond to requests for comment. “Eventually, it’ll find the right price and it’ll find a buyer,” Homet said. However, that price is anyone’s guess. “The right price is what that right person who wants that triplex will pay,” he said. “It’s completely spectacular, and it’s difficult to value because there’s nothing to compare it to.” In general, high-end Brooklyn condos can be snapped up for less than Brooklyn townhouses, and far less than all their Manhattan counterparts. In 2011, for example, an $88 million condo deal at 15 Central Park West set the record for the highest-ever Manhattan home sale, and units reportedly in contract for more than $90 million at Extell Development’s One57 may soon usurp that title.
In June, the penthouse at new condo 105 Lexington Avenue in BedStuy sold for $1.04 million, a record for an apartment in that area.
Neighborhood records Old Prospect Hts. record: $3.3 million New Prospect Hts. record: $4.3 million
N
ot surprisingly, many of Brooklyn’s emerging neighborhoods are also seeing record-breaking real estate trades. “People are being priced out of the more gentrified areas,” said Elliman broker Alex Maroni. “They’ll go from Brooklyn Heights into Prospect Heights into Crown Heights.” One area that’s seeing rapid price appreciation for that reason is Bedford-Stuyvesant. It’s now common for brownstones in the neighborhood to trade for seven figures, but brokers said the million-dollar mark was, until recently, a psychological barrier for apartment buyers in the area. But that changed in June, when the 1,559-square-foot penthouse at new construction condo 105 Lexington Avenue sold for $1.04 million — a neighborhood record, according to Maroni, the listing broker. Maroni attributed the high price to the apartment’s size. The three-bedroom penthouse, which has a roughly 650-squarefoot terrace and 13-foot ceilings, is “the size of a small house,” he said, making it “a very good alternative” to a brownstone. He added that it was only a matter of time before a BedStuy condo passed the million-dollar mark. “It was bound to happen — the market was already there,” he said, noting that in Bed-Stuy these days, “a brownstone is $1.5, even $2 million.” Another neighborhood that has broken records recently is Prospect Heights. In June, a townhouse at 206 Park Place sold for $4.3 million — the highest price ever paid for a house in the neighborhood. Broker Lynn Donawald of Park Slopebased Donawald Realty had the listing. The seller had owned the four-story house since 1976. According to the listing, the home has a two-level deck built out of Brazilian wood, a koi pond and a solarium. That deal follows on the heels of the May sale of 166 Prospect Place in Prospect Heights, a house that set a record for the neighborhood when it sold for $3.3 million. Prospect Heights is one of the few neighborhoods in Brooklyn www.TheRealDeal.com November 2013 49
Real Estate Records
Brooklyn’s tallest building Brooklyn record: 596 feet Manhattan record: 1,776 feet
K
In Williamsburg, a development site at 462-490 Kent Avenue is on the market for a record asking price of $210 million.
where the highest-priced home sale on record is a condo, not a townhouse. A 3,524-square-foot penthouse at the Richard Meier-designed new condo 1 Grand Army Plaza sold last year for $5.1 million. The project, directly across from Prospect Park, is one of the few examples of “starchitecture” in Brooklyn. In Boerum Hill, too, prices are on the verge of neverbefore-reached heights. The neighborhood’s priciest townhouse sale took place in 2011, when 267 State Street — a new construction townhouse developed by Time Equities as part of its 14 Townhouses project — sold for $3.4 million. But that 2011 record is on its way to being broken again. Two other townhouse units at the project, 307 State Street and 303 State Street, are both listed for $3.65 million, and are in now in contract, according to the listing agent, the Corcoran Group’s James Cornell. He declined to reveal the sale prices, however. Meanwhile, an 8,000-square-foot, 26-foot-wide townhouse at 374 Pacific Street is currently listed at $7.25 million by Elliman’s Maroni. In 2010, the home was in such a state of disrepair that it sold at auction for just $1.335 million. But when it hit the market in June of this year, it had been extensively gut-renovated, with a glass skylight atrium and landscaped backyard. The property has been discounted from its initial asking price of $7.9 million. But Maroni said he’s already gotten several offers “in record-breaking territory,” though the seller hasn’t yet accepted one. The house “will definitely be a record-breaker when it sells,” he said. Since it’s “nearly twice as large as the average house, on a price-per-square-foot basis we’re actually not asking that much over average.”
Priciest development site Brooklyn record: $185 million Manhattan record: $1 billion-plus
L
ast year, Two Trees Management bought the high-profile Domino Sugar factory site for $185 million, setting a new record for the borough’s priciest-ever development site, as TRD reported. Two Trees currently has plans to build some 2,284 apartments on the 11-acre site, in addition to converting part of the former factory to office space. A challenge to that record may come from a lesser-known 3.75-acre industrial site at 462-490 Kent Avenue in Williamsburg, which hit the market last spring for $210 million. The Kent Avenue site was approved for a zoning variance in 2010 that allows a developer to build up to 754 apartments, of which 226 must be affordable housing. Eastern Consolidated’s Peter Hauspurg and Gabe Saffioti have the listing. Over the summer, however, Saffioti told TRD that bids for
50 November 2013 www.TheRealDeal.com
the parcel had come in closer $150 million. Even the Domino Sugar site is small potatoes compared to Manhattan development sites, which have traded in the billions. In April, for example, Related Companies and Oxford Properties Group paid more than $1 billion to the MTA for a 99-year ground lease of the Long Island Rail Road train yards on the West Side of Midtown Manhattan, where they will develop 26 acres with a new neighborhood containing over 13 million square feet of office, retail, residential, cultural and hotel space for the Hudson Yards project.
ings County is also breaking new height barriers. For decades, the Williamsburgh Savings Bank Tower was the tallest building in the borough, standing 512 feet tall. But in 2008, the Brooklyner, a new construction rental tower at 111 Lawrence Street in Downtown Brooklyn broke that record: the 51-story building is 515 feet tall. But it’s already been surpassed by 388 Bridge Street, a condo/rental hybrid being developed by Avalon Bay, also in Downtown Brooklyn. The building, which topped out this spring, is slated to have 53 stories and be 590 feet tall. Soon after that, the 596-foot-tall Avalon Willoughby West at 88 Willoughby Street will edge past 388 Bridge. Just as in prices, Brooklyn’s towers are still relatively diminutive compared to Manhattan. The height record in Manhattan is currently held by the nearly completed One World Trade Center at 1,776 feet. The tallest Manhattan building with residences, meanwhile, is the under-construction One57, at 1,004 feet. TRD A rendering of Avalon Willoughby West, which will be Brooklyn’s tallest tower when completed.
Highest office rent
$
Brooklyn record: $40s per square foot Manhattan record: $200 per square foot
B
rooklyn is also seeing an uptick in office rents. When it comes to office leasing, “there’s more money than product” in Brooklyn right now, said Aptsandlofts.com director of commercial leasing Chris Havens. Until recently, office rents in Brooklyn topped out in the mid-$30s per square foot, brokers said. But in September, retailer West Elm signed a lease to take 150,000 square feet of office and retail space in the Empire Stores conversion project at 55 Water Street in Dumbo, where Midtown Equities is redeveloping seven historic warehouses to create 380,000 square feet of office, restaurant, retail and commercial space. Neighborhood sources said West Elm agreed to a rent of some $40 per square foot, becoming the first large Brooklyn office tenant to pay that amount. Now that that threshold has been crossed, “40 is the new 30” for Brooklyn office space, Havens said, particularly in buildings with water views. The director of commercial leasing for Two Trees, Thomas Conoscenti, agreed. “For a long time, [renting] above $40 a foot was like breaking a four-minute mile,” he said. “This is the year you’re going to see that change. There’s a lot more players in the market; there’s a lot more interest in Brooklyn.” And the new $40-per-square-foot marker is likely to be a temporary record too. Jared Kushner, RFR Realty and LIVWRK Holdings recently bought a six-property portfolio of Dumbo buildings from the Jehovah’s Witnesses. The developers are planning to revamp the buildings into a campus that includes office space with asking rents running into the mid-$50s per square foot, the Wall Street Journal reported. That’s still a bargain compared to Manhattan, where a few rare leases have passed the $200-per-square-foot barrier. And this year so far, 50 leasing deals with rents above $100 have been signed (see related story on page 30).
In 2008, the 515-foot-tall Brooklyner at 111 Lawrence Street became Brooklyn’s tallest building.
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R EAL E STATE H ISTORY A look back at some of New York City’s biggest real estate stories
1980: Olympia & York picked for mega project
T
he Toronto-based real estate firm Olympia & York beat out several of the city’s top developers 33 years ago this month to win the right to build 6 million square feet of office space in Battery Park City. The firm — which was owned by the Reichmann family — got the conditional nod after submitting a request for proposals to lease 14 acres of Battery Park City in 1982 the state-owned land for $189 million and build four office towers expected to cost more than $1 billion. Other bidders included Tishman Speyer, the Solow Building Corp., a joint venture of the LeFrak, Fisher and Olnick families, and developer Harry Helmsley. The development firm, the second largest commercial property owner in the city at the time, built the four towers that comprised the World Financial Center between 1982 and 1988. The global company was stretched thin during the recession that followed, however, and in 1992 filed for bankruptcy and lost the towers. In 1996, another Canadian company, Brookfield Office Properties, bought a stake in the towers and now owns them outright.
T 13.CP.2505_2.qxp_Layout 1 10/31/13 5:13 PM Page 1
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CP & Associates Construction Corp. Tel: 212.796.6901 | Fax: 646.291.8986 www.cpassociatesnyc.com 54 November 2013 www.TheRealDeal.com
1953: City tries to clean up Times Square
he city announced its first proposal to clean up Times Square 60 years ago this month. The Department of City Planning proposed changes to zoning regulations that sought to eliminate carnival-style freak shows, flea circuses, shooting galleries and similar tawdry businesses in Times Square. According to the New York Times, city officials said the businesses were depressing real estate values. The proposed changes followed years of pressure from local merchants and neighborhood groups looking to reverse the area’s decline. Times Square in 1953 Indeed, business organizations such as the Broadway Association and religious orders such as the Catholic Church had voiced objections to the “shadowy” culture in Times Square. The zoning proposal applied to the area bounded by 42nd and 57th streets and Eighth and Sixth avenues, and included banning outdoor cafes, wax museums and open-front stores. (Existing businesses were grandfathered in.) While the city’s Board of Estimate approved the plan in early 1954, illegal activities, from massage parlors to prostitution, only got worse. Efforts to reform Times Square continued for the next several decades, until Mayor Rudolph Giuliani led a push in the 1990s that is widely credited with cleaning up the neighborhood.
1924: Rhinelander heir seeks annulment
scion of one of Manhattan’s wealthiest real estate families filed to annul his marriage 89 years ago this month, claiming his wife had concealed the fact that she was biracial from him. Leonard Kip Rhinelander — an heir to a fortune concentrated on the Upper East Side that was estimated in 1908 to be worth about $50 million — married a domestic worker named Alice Jones. Rhinelander learned within weeks of the wedding through published reports that she was the daughter of a black cab driver and a white British woman. Under pressure from his father, less than Left, Leonard Kip Rhinelander; right, Alice Jones one month after the wedding, he filed for annulment, alleging Jones committed fraud by concealing her racial makeup. A jury — after a trial in which she was forced to expose her breasts so jury members could deduce her racial makeup — rejected his claim. However, in 1929, Jones agreed to a divorce in Nevada. That agreement was modified in 1930, giving her a lump-sum payment of $31,500 and $3,600 per year, for the rest of her life. As part of the deal, she waived any future claims on the family’s estate. Compiled by Adam Pincus
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Development
EB-5 in overdrive
A look at how NYC developers are going about getting cheap capital overseas
C
By Guelda Voien all it vis-à-visa financing: New York City developers, big and small, are increasingly tapping into the EB-5 program to secure capital from foreign investors. The federal program — which was created in 1990 but has grown in popularity since the recession — allows overseas investors to obtain a green card in exchange for providing at least $500,000 in financing for certain (qualified) projects. The demand for the program, sources said, is being fueled by banks’ diminished appetite for risk, along with the new stringent lending regulations mapped out in the Dodd-Frank Act. Those new barriers to financing have driven developers to hunt for alternative sources of affordable capital. “It’s a very low-cost way to fill out your capital stack,” said Manhattan-based real estate lawyer Joshua Stein. He said while mezzanine capital is risky, and therefore expensive to secure — “you might pay around 12 percent” — the interest rates for EB-5 loans are “in the low single digits.” Jordan Barowitz, a spokesperson for the Durst Organization, which has raised more than $150 million in EB-5 financing for various projects, said the program provides cheap capital, which in turn “frees up more equity.” “It allows us to pursue numerous projects simultaneously,” he said.
56 November 2013 www.TheRealDeal.com
But as with many federal programs, red tape and rules abound. For starters, EB-5 funds — which come from a slew of countries, including China, England, Vietnam, Mexico and a number of countries in South America — must be approved by the United States Citizenship and Immigration Services. And the amount of money a developer
a fee to help developers locate capital overseas, as TRD has reported. If unlicensed finders get paid for matching investors to developers, they’re subject to SEC and state fines and could be banned from future securities trading. That’s because brokering a financial transaction requires a broker/dealer license, said Kate Kalmykov, an attorney at Greenberg
a so-called regional center, a company that’s legally allowed to receive foreign money. Silverstein Properties, the Related Companies and Extell Development, which raised funds through its EB-5 regional center for its under-construction commercial condo project the International Gem Tower at 50 West 47th Street, have all gone this route. The head of Extell’s regional center, Shalom
“It’s a very low-cost way to fill out your capital stack.” Joshua Stein, Joshua Stein PLLC
can raise is determined by a complex formula involving the number of jobs the project will create. That equation usually works out to about 10 jobs for each green card issued to an investor, said David Soares, CEO of Lexden Capital, a Manhattan-based bridgeloan brokerage that has worked with foreign EB-5 investors. “To get $500,000, [the project needs to provide] 10 jobs,” he said. EB-5’s increasing popularity has also spurred some problems. The Securities and Exchange Commission, which enforces federal securities law, has been cracking down recently on unlicensed “finders” who charge
Traurig who specializes in EB-5. The rules are being “heavily violated,” she added. “There is a big misconception that this is fast money — it is not,” Kalmykov said. “There are a lot of hoops to jump through.” Despite those hoops, sources say there are three avenues a developer can take to using EB-5. Determining which is best is largely the product of a developer’s size and resources. Below is a look at each of those avenues, along with the pros and cons of each:
Setting up a regional center Option No. 1 for tapping into EB-5 financing is a big-league move: It requires setting up
Segelman, said the firm nabbed $75 million from foreign investors through the program for the tower, with the majority — 60 percent, he estimated — coming from China, but with funds also flowing in from India, the United Kingdom, France, Mexico and Vietnam. Segelman — who noted that Extell’s regional center is currently searching for capital for another project — said finding investors is not always easy. “These are sophisticated, high-net-worth individuals,” he said. He added that there is a misconception that you can arrive in China “and they will just hand you money.” Continued on page 116
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DAY IN THE LIFE OF:
Eric Barron, the CEO of Keller Williams New York City, said he aims to have 450 agents by the end of next year.
Eric Barron
The Keller Williams New York City CEO talks about brown-bagging his lunch and starting up a kids’ ice cream line
6:15 a.m. I wake up at 6:15 or 6:30 a.m. [For breakfast] I eat a ton of organic fruit and a Greek yogurt. I’m as organic-y as I can be. 6:45 a.m. Lia, my wife, would love to sleep till noon if she could, so I get the kids [Zachary, 6, and Jacqueline, 9] going. We live in the South Orange/Maplewood
area of New Jersey. Everyone from my area is a transplant from Park Slope or Manhattan. We moved out of the city two years ago, after 20 years — we lived on the Upper West Side for 10 years, then moved Downtown. We had to be within 30 minutes of the city and weren’t going to Long Island — nothing against Long Island.
efficiently as a team. 12:30 p.m. I have a business lunch about three times per week. Last week, I had a great lunch on 53rd Street at Hillstone — best tuna burger in the city — with a potential recruit, [an agent] who was looking to jump from making $12 to $15 million a year to $20 to $25 million a year. We did a business plan at lunch: “What are they going to do to be more of a listing agent?” No [other firms] are teaching business planning. Everyone works hard, but the question is, how efficiently do people work? If I’m not eating out, I’m bringing food back and eating out on the floor. We have a lunchroom, but I sit out in the training room. I send an email say-
guy, but we eat ice cream. We’re actually
7:30 a.m. I typically take a 7:34 a.m.
ing, ‘Hey guys, I’m brown-bagging it in
thinking about starting an ice cream
train, and by 8:20 a.m. I’m in the of-
the training room, come sit with me.’ And
line made for kids, by kids — it’s in the de-
fice at 425 Park Avenue. We don’t even
agents will come.
velopment stage right now. One of the flavors is called “Smash.” The concept is, you
think about [the fact that the building
take all the toppings and smash them into
will be demolished in 2015 by L&L Hold-
2 p.m. In the afternoon I have a lot of
ing to make way for a new office tower.
meetings with agents to talk about their
When that happens, the firm’s head-
business plans, and what are they doing
putting together their board of directors.
quarters] will stay in Midtown. And
to achieve their goals. I tell people I’m fo-
They’re each putting three of their friends
then we’re going to have four or five
cused on anything growth-related. If it’s
on the board. It’s hysterical. I’m big on kids
boutique offices. I’m looking at retail
not growth-related, don’t talk to me.
being entrepreneurs. My daughter makes
Barron’s preferred breakfast: Greek yogurt with organic fruit
the ice cream. Jacqueline and Zachary are
a fortune doing her lemonade stand.
space Downtown today. The first location is going to be south of 23rd Street,
4 p.m. I probably do, on average, five
and will be open in three to five months.
recruiting meetings a week. I’m typi-
“We have about 280 brokers now. Our goal is to end 2014 with around 450 agents.”
9 p.m. I go for a three- to five-mile run a couple nights a week. Or I go to the gym. Barron moved from Manhattan to Maplewood, N.J.
11 p.m. Lia and I will try to catch an hour of DVR. We religiously watch “Home-
land,” “The Good Wife,” “Dexter,” “Ray Donovan” and “The Newsroom.”
8:30 a.m. I check in with Zhann [Jochin-
cally spending most of my time meeting
ke], the COO, my left hand. I typically do a
higher-producing agents. We’ve recent-
quick walk of the floor. We have about 280
ly hired Leisa Aras from L.G. Fairmont
brokers now. Our goal is to end 2014 with
Group, a boutique firm Downtown, who’s
around 450 agents. I love to see who’s
started her own team here. She’s done
here early.
$10 million in sales since joining us two months ago.
10 a.m. I probably get about 250 emails
8:02 p.m. Every once in a while I’ll catch
a day from attorneys, agents, potential re-
a 5:18 p.m. train because I coach Zach’s
cruits, and our headquarters in Austin.
T-ball team. But I usually take an 8:02
I carve out a half-hour in the morning, a
p.m. train, which gets me home by 8:45
half-hour in the afternoon and a half-hour
p.m., and that gives me a few minutes with
in the evening to respond to them. We also
the kids. They’re probably going to bed
hold a lot of the leadership meetings in the
around nine, so I squeeze in a last-minute
morning. I make sure that we’re working
dessert with them. I’m not a big dessert
58 November 2013 www.TheRealDeal.com
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Buyers’ brokers prevail in commission ruling Insiders say decision is a ‘game changer’ for brokers who have been wrongfully boxed out of deals By David Jones New York State appeals court has issued a groundbreaking decision that lawyers said will protect buyers’ brokers when they are bypassed on commissions. The decision follows a decade-long lawsuit over the sale of a Brooklyn home. A New York State Appellate Division panel ruled in late September that Brooklyn-based Talk of the Town Realty was entitled to a commission for procuring the buyers of a Sheepshead Bay house, even though the buyers worked directly with the listing broker to close the sale. The 4–1 ruling overturned a 2011 decision in a state trial court. “This decision is a game changer for brokers trying to collect commissions when they have been blocked out of the final negotiations of a real estate deal and are not paid a commission,” attorney Marc Held,
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Schiglik that the initial listing period for showing the property had expired. Sellers Mario and Meredith Geneve, of Colts Neck, N.J., refused to close the sale unless the documents reflected that Fillmore was the only firm involved, despite the buyers telling them that Talk of the Town had shown them the home, court documents show. Talk of the Town sued the sellers in 2003, seeking $48,800, which included a commission of $43,000. The firm argued that the sellers acted in bad faith by purposefully cutting them out of the loop and withholding key information about the deal. The case wound through New York State Supreme Court for years, in part due to a change in the judge and a change in lawyers for the plaintiff, Held said. A representative for Fillmore and an at-
“It doesn’t seem just or equitable based on these particular facts for someone to show a property, have even the seller acknowledge he showed the property and get totally shut out from earning a commission.” Steve Sladkus, Wolf Haldenstein.
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a partner in Manhattan-based Held and Hines, who represented Talk of the Town, said in a statement. “For decades it was understood that the last broker standing was considered the procuring cause of a transaction.” The dispute dates back to 2001, when prospective buyers Mark Kotliar and Anna Schiglik hired Simon Yermash, a friend and broker at Talk of the Town, to find them a home. Yermash led them to 1880 East 22nd Street, which had been listed that April with Mary Nuccio Realty for $799,000. Yermash showed them the property, and Kotliar and Schiglik submitted an offer of $699,000. But after Yermash informed them that the offer was too low, they allegedly stopped taking his calls. A month later, they negotiated a deal to buy the property directly with Brooklyn-based Fillmore Real Estate, which the sellers had hired to replace Mary Nuccio. The couple agreed to pay $730,000, and they closed on the sale later that year. However, Talk of the Town was not listed as the broker of record at the closing because the Fillmore broker, who was not named in court papers, told Kotliar and
torney for the sellers said they had not read the decision and did not have any comment. Jeffrey Peldman, president of Talk of the Town, noted that the courts have never afforded this type of protection to brokers. “I’m very ecstatic to say the least,” Peldman said. “Finally the judiciary has come out with a ruling that really protects the hard work of the brokers. It’s long overdue.” Steve Sladkus, chairman of the real estate department at law firm Wolf Haldenstein, said that brokers often try to claim commissions when they refer clients to a particular property, but in this case Talk of the Town made a strong case that it actually entered direct talks on the deal. “It appears based on the facts that the broker who was stiffed has definitely raised a triable issue of fact to show that he was the procuring cause of the sale to take place,” Sladkus said. “It doesn’t seem just or equitable based on these particular facts for someone to show a property, have even the seller acknowledge he showed the property and get totally shut out from earning a commission.” A final decision on the award will be determined by a jury, Held said. TRD www.TheRealDeal.com March 2010
The market report era
Commercial brokerages are increasingly compiling data — but how good is it?
By Guelda Voien ith commercial market data now more readily available than ever, a broker can no longer bank on being the first person (or the only person) with information. Enter the era of the market report. “Information used to be one of a broker’s main tools,” said Peter Von Der Ahe, a vice president with Marcus & Millichap.
W
“Now part of the service a broker provides” is deciphering the onslaught of data. Along those lines, in the past
gun hosting quarterly breakfasts to tout their data. “If you’re in the leasing world and you don’t have market data, you
City brokerages, like CBRE Group and Cushman & Wakefield, that have been hosting events to debut their data for years.
Some say the bulk of this information is more akin to marketing materials than market data. two years, commercial brokerages — including Colliers International, Avison Young, Massey Knakal and Cassidy Turley — have all be-
can’t be a player,” said a prominent broker who asked not to be named. The above-mentioned firms join more established New York
But some say the bulk of this data is more akin to marketing materials than market data. “In reality, these are marketing piec-
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es,” said one broker, who asked to remain anonymous.
Clashing methodologies Indeed, the problem with this proliferation of data, sources said, is that it’s not all accurate. While some sources said more niche coverage can be useful for brokers, landlords and investors, others noted that even the established firms tolerate a surprisingly large margin of error — perhaps as high as 9 percent, said David Schechtman, an investment sales broker with Eastern Consolidated. Many brokerages pull data from third-party sources like CoStar Group, Loopnet, CompStak and Real Capital Analytics, and then cross-reference it with comps in their internal database, mostly self-generated by brokers. While most firms would not discuss their methodology in detail, some said that in the event of a discrepancy, they side with the information provided by their broker — even if the broker was not on the deal. Of course, brokers may have a financial incentive to make one subset of the market look good. For example, tenant brokers may try to minimize rents, while landlord brokers may inflate them. What’s more, despite all of these new reports, there are still major holes when it comes to key data points. For example, “a report that needs to exist is an industrial report for the outer boroughs,” said Ben Thypin, director of market analysis at Real Capital Analytics. However, the dominant industrial firms often sell buildings through word of mouth and may not need the publicity a report provides, he said. Brokerages also struggle to vet retail rents, brokers said. While Retail MLS, a website that tracks retail listings, provides strong asking rent data, sources said, comps for taking rents remain elusive. “Retail [leasing] is particularly opaque,” said Pam Murphy, senior vice president for global research at CBRE. “In some hot areas, there are two or three [comps],” added Nat Rockett, executive vice president at Cushman’s Capital Markets Group. “And that’s not really a market.” Yet those few data points are continually used to decide how much a landlord should ask and how much a tenant should pay. And every firm’s market report has its own style. For example, Colliers tends to take a stronger stance on market trends, recentContinued on page 116
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A tale of two de Blasios Is the Democratic mayoral candidate more pro-development than you think? Democrat Bill de Blasio out on the campaign stump. The mayoral frontrunner took on developers during the primary, but has since signaled that he’ll work with the industry.
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By Hiten Samtani t a gathering of some 800 New York City business leaders last month, real estate mogul Bill Rudin invited Bill de Blasio to the lectern. Slightly ill at ease in his 6’5’’ frame, de Blasio proceeded to outline a vision for New York City that included the end of “giveaways” to luxury housing developers, and pledged to end what he termed the “affordability crisis.” Needless to say, he wasn’t exactly pandering to the crowd. Still, the Public Advocate and mayoral front-runner received enthusiastic applause from the standing-room-only audience at the Association for a Better New York’s breakfast — a telling sign of both his dominance over GOP rival Joe Lhota and the scramble by the business and real estate communities to make nice before the mayoral guard changes in January. On the stump, de Blasio has played up his “Tale of Two Cities” narrative, repeatedly taking digs at the Bloomberg administration for coddling the real estate industry. Indeed, in an August interview with The Real Deal, he said that the “relationship between the city and its developer community needs a reset.” Such statements — combined with his calls for affordable housing and tax reform
64 November 2013 www.TheRealDeal.com
— have sent pangs of anxiety through the development community, which had been poised to deal with the ostensibly more sympathetic Christine Quinn. (She was leading in the Democratic primary polls until de Blasio rode an 11th-hour surge to victory.) But a closer look at de Blasio’s political track record suggests that he may be more
Born Warren Wilhelm, Jr., in Manhattan in 1961 to a World War II vet-turned-bureaucrat father and a labor-organizer mother, de Blasio was raised in Cambridge, Mass. But he attended two of New York’s most prestigious schools — New York University, where he completed his undergraduate work, and Columbia University, where he
1989 mayoral campaign. He then joined City Hall as an aide to Dinkins’ political guru, Bill Lynch. After Dinkins lost his reelection bid in 1993, de Blasio served stints in the U.S. Department of Housing and Urban Development and as campaign manager for Hillary Clinton’s successful U.S. Senate run. In 2001, he moved from the political
De Blasio’s positions have sent pangs of anxiety through the development community, which had been poised to deal with the ostensibly more sympathetic Christine Quinn. pro-development than many in the industry realize. “I have always said Bill de Blasio is someone we can work with,” Real Estate Board of New York president Steven Spinola told TRD. “As everyone has had the chance to talk to him and listen to his answers, more and more people became less concerned.”
De Blasio’s box of chocolates De Blasio has been a staple of New York City’s political scene for over two decades.
earned a master’s degree in international affairs. (De Blasio took his mother’s surname after college.) In a story that’s gotten regular play in the city’s dailies and has been used as fodder by Lhota, de Blasio made a trip to Nicaragua in 1988 to distribute food and supplies in a war between the ruling leftist Sandinista party — which he supported — and U.S.-backed rebels. Shortly after he returned, the activist got his first taste of city political life as a volunteer for David Dinkins’ successful
backrooms onto the stage when he was elected to the New York City Council in Brooklyn. And in 2010, he was elected to the citywide office of Public Advocate, where he gained notoriety among some property owners with his “NYC’s Worst Landlords” list, which singled out landlords with the largest number of unresolved building-code violations. Despite his deep roots in city politics, de Blasio wasn’t well known in business circles. So when he clinched the mayoral Continued on page 120
www.TheRealDeal.com October 2013 65
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Lhota: Too little,too late? With time running short, the GOP mayoral candidate tries to close a gap in fund-raising and support
Republican mayoral hopeful Joe Lhota, pictured here on the campaign trail, has sided with Mayor Bloomberg on a number of key pro-development policies.
L
By Hiten Samtani ate last month, a federal appeals court ruled that a political action committee supporting Republican candidate Joe Lhota could begin accepting contributions of any size. The ruling, which struck down an earlier $150,000 annual cap on donations, was a shot in the arm for Lhota, who, according to the city’s Campaign Finance Board, raised only $700,000 in the first three weeks of last month, compared to his rival Bill de Blasio’s $3.7 million. But it may be too little, too late. With de Blasio’s commanding lead in the polls, Lhota may be hard-pressed to find donors willing to back him, sources said. (See related story on page 64.) “Lhota has the sands of time running out, and he’s trying to get some traction,” said Bill Cunningham, a political strategist and former communications director for Mayor Michael Bloomberg. Indeed, for many in the real estate industry — traditionally a GOP stronghold — the writing is on the wall, and though Lhota may be more pro-development than his rival, his slim chance of winning has prompted them to switch allegiances. Magnum Real Estate’s Ben Shaoul, for example, gave Lhota $4,950 (the maximum permitted amount) in September,
32 January 2013 www.TheRealDeal.com
campaign finance records show. But in the following weeks, he spread his bets to de Blasio, making a $4,950 contribution. (Shaoul’s sister, Elizabeth, also donated $4,950 to the Democrat.) Perhaps sensing the need for a strategy change, Lhota took off the gloves during the second mayoral debate late last month, accusing de Blasio of committing a “civil wrong” by advocating for tax hikes. He also aggressively attacked him for not doing
can, getting elected on the GOP line is not easy in a city where registered Democrats outnumber their Republican counterparts six to one. “Republicans in New York City tend to get elected only during a crisis,” Sheinkopf said. “[Rudy] Giuliani was because of crime, and Mike Bloomberg was 9/11.” So far (and barring any late campaign surprises), there haven’t been any intensely divisive issues this election season for
with his views on real estate-related issues, should have translated into more high-profile industry support, sources said. Indeed, he’s pledged to continue many of Bloomberg’s key pro-development policies. Unlike de Blasio, who is pushing for “mandatory inclusionary zoning” — which would force (rather than incentivize) developers to build affordable housing at projects that require city approval — Lhota
Although Lhota may be more pro-development than his rival, his slim chance of winning has prompted many in the industry to switch allegiances. more for affordable housing at Forest City Ratner’s Atlantic Yards. And perhaps most provocatively, he said de Blasio’s “reckless” approach to policing would take New York City back to the time of “2,000 murders a year.” (By comparison, there were 418 murders in the city in 2012 and only 240 as of this September.) But veteran political strategist Hank Sheinkopf — who worked on Bloomberg’s successful 2009 reelection campaign as well as Bill Thompson’s mayoral campaign this year — said that despite the fact that New York’s last two mayors were Republi-
Lhota to capitalize on, Sheinkopf added. The city’s economy has been rebounding in the wake of the financial crisis, and crime is drastically down. And despite Lhota’s reputation as a fiscal conservative and social liberal, he has yet to gain traction.
Bloomberg, with tweaks Though Lhota does have the financial support of some real estate players — such as CBRE vice-chairman Kenneth Rapp, developer Edward Minskoff, and Rose Associates’ Daniel and Adam Rose — his vast experience in government, combined
signed on to Bloomberg’s “voluntary inclusionary zoning” stance. He’s even argued that de Blasio’s position is “unconstitutional,” saying that it’s tantamount to the government “taking” private property. In addition, Lhota told TRD that he would use the city’s tax structure to reward developers who create between 20 and 30 percent of their units as affordable, but didn’t elaborate on how he would do this. He has also endorsed an $8 billion proposal by a coalition of housing groups, which would preserve 150,000 affordable Continued on page 122
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A rush for approvals as Bloomberg’s clock ticks down With only two months until a new mayor comes in, developers push to get as many green lights as possible for their projects
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By Julie Strickland t’s no secret that the end of Mayor Michael Bloomberg’s 12-year term has far-reaching implications for the real estate industry. But it’s not just because his likely successor, Bill de Blasio, is viewed as less pro-development than the billionaire businessman. Regardless of who ends up in Gracie Mansion, an administration change means a strategy adjustment for developers, who have spent more than a decade getting used to Bloomberg’s taste in real estate projects as well as how his key appointees — from City Planning Commission Chair Amanda Burden to Department of Buildings Commissioner Robert LiMandri — operate. Now, they have to start from scratch. “As a developer, the last thing you want is uncertainty, and there is a great deal of uncertainty if you’re going from one administration to the next,” said David Von Spreckelsen, senior vice president at developer Toll Brothers City Living. So as the clock ticks down on the Bloomberg years, developers with projects in the planning stages are pulling out all the stops to tick off as many steps in the approval process as possible before a new mayor takes office. Of course, that’s easier said than done, especially as the current administration races to complete its own development agenda. Andy Gerringer, managing director of new business development at the Marketing Directors, said that accelerating the quest for approvals provides a badly needed sense of security for developers. “In order to have the certainty that they’re used to, I think everybody just tries to move things along faster,” he said.
Untangling ULURP The further along a new development is in the city’s land-use approval process, the less likely it is to be altered or even derailed when the new mayor comes in. Indeed, any project that needs city approval for a zoning change or variance must make it through a years-long process, starting with pre-certification through the Department of City Planning. During the pre-certification phase, City Planning gathers basic information about a new project to determine what type of land-use application and environmental analysis will be required. And since there is no set time frame for the pre-certification, it can sometimes drag on for years.
66 November 2013 www.TheRealDeal.com
“If you have a strong mayor and he wants to put the kibosh on a project, it doesn’t get very far.” Stuart Saft, Holland + Knight “The pre-certification process is the killer,” said Von Spreckelsen. He recalled that when Toll was planning a residential project at 363-365 Bond Street along the Gowanus Canal, the pre-certification phase took “something like four years.” Toll Brothers secured the rezoning, but walked away from the project in 2010 after the federal government designated the area a Superfund site. Toll Brothers currently has five projects in the planning stages, but all are as-of-right and don’t require city approval. Projects now in the early stages of the pre-certification process are “clearly going into the next adminis-
tration,” Von Spreckelsen said. And, sources agreed that applications spilling into the next administration could face delays if the new mayor has different priorities, or makes major staff changes. “It could be pretty hairy with a changing administration,” said David Wolkoff of G&M Realty, the developer of the proposed conversion of the graffiti-covered 5Pointz complex in Long Island City. “Will Amanda Burden be there with the next mayor? I don’t know. We’re all conditioned to how she does business.” The procedural changes that inevitably accompany new leadership “can really
slow somebody down if they have a big project on the drawing board,” Wolkoff said. Once a proposed project makes it through pre-certification, it can begin to go through the city’s Uniform Land Use Review Procedure, a seven-month process during which it is reviewed by the local community board, Borough President, City Planning Commission, City Council and, finally, the mayor. And while the mayor’s only official weigh-in comes at the end of ULURP, insiders said his support is crucial to shepherding a project through the entire process — especially getting it approved by the City Planning Commission, where the commissioner and six of the 13 members are mayoral appointees. “The mayor’s office is acting behind the scenes throughout the process,” explained Stuart Saft, a real estate attorney and partner of Holland + Knight. “If you have a strong mayor and he wants to put the kibosh on a project, it doesn’t get very far.” And when a project is a top priority to the mayor, it can suck up a lot of city staffers’ time. High on Bloomberg’s agenda right now, for example, is the Midtown East rezoning proposal, which would allow developers to build taller buildings after contributing to a fund earmarked for local pedestrian and transit improvements. Bloomberg staffers, sources said, are rushing to get the project approved by the council before the mayor leaves office on January 1. “It takes up a lot of bandwidth, there’s no doubt about that,” said Stephen Lefkowitz, partner and real estate development attorney with Fried Frank. “The administration is obviously very anxious to see the conclusion of East Midtown.” The council is expected to vote on the plan this month.
City Council’s blessing The Midtown East rezoning isn’t the only project clamoring for City Council approval before January. Many developers view council approval as the crucial step in making sure their vision will survive Bloomberg’s departure. Once a project has secured that, sources said, a veto by the mayor is unlikely. “It happens,” Saft said. “But by the time it gets to that point, a project has usually changed so dramatically and has incorporated and merged the thoughts of so Continued on page 122
www.TheRealDeal.com October 2013 65
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Ja m e s G a r d n e r
Toll Brothers’ Brooklyn Bridge Park project is a boon for the waterfront, even with a mediocre design
he problems visited upon the area while, will have 193 rooms. Constructer is accentuated by the stepwise pronow occupied by Brooklyn Bridge tion is underway and sales are set to begression of trees and greenery clumped Park go back far more than a cen- gin this fall. Once built, the project detogether at various intervals. There is probably some successful way to intetury, to the completion of the Brooklyn sign is projected to generate, through Bridge itself in 1883. That landmark ren- revenue from the hotel and the sale of grate greenery into architecture above dered largely obsolete the ferry services the condominiums, just under $120 ground level, but I am not sure that anythat once occupied this part of the water- million, and the proceeds will go to one has figured out exactly how, and I am front. Seventy years later, the area suf- Brooklyn Bridge Park. confident that (in this instance at least) If the truth be told, however, neither Rogers Marvel has not. fered the further indignity of the BrookAs it is, the trees here, as in most caslyn Queens Expressway, which, like so the hotel nor the condo design is especiales, seem to serve no other purpose than many infrastructure developments by ly successful. First of all, both structures Robert Moses, severed the comA rendering of Pierhouse at Brooklyn Bridge Park munity from the waterfront. Finally, with the so-called container revolution of the 1970s and ’80s, the cargo trade that had sustained the many piers in the area moved away to places like New Jersey, leaving this stretch of waterfront largely abandoned. But recently there have been hopeful signs. Over the past 30 years, parts of the New York City waterfront have been reclaimed in the name of leisure and domesticity, and the latest evidence of this trend is the selection of a development team to build a 550,000-square-foot hotel and residential complex just behind Brooklyn Bridge Park. The project is to be a collaborative effort between Toll Brothers City Living and Starwood Capital Group, two firms that had formerly been competitors for the project. Contrary to that newfound harmony, Robert Rogers and Jonathan Marvel, the two principles of Rogers Marvel Architects, the firm that designed the project, announced this summer that they are going to symbolically suggest their separate ways. (That decision is not the environmental aspiexpected to affect this project, however.) rations of the building, Toll Brothers and Starwood beat out which, as the developers six other firms competing for the projare proud to proclaim, ect: Extell Development, Two Trees Manwill be LEED-certified. agement Company, RAL Companies & The hotel and resiAffiliates, SDS Procida and the Dermot dences are hardly unLeft, Robert Rogers, who recently left Rogers Marvel Architects to Company. sightly, and the charm launch Rogers Partners. Right, Jonathan Marvel, head of the newly Before the breakup, Rogers Marvel formed Marvel Architects. of the location and the had been active in New York in recent view should counterbalyears. The firm designed the Studio Mu- are too busy, and not in the ruckus-rodeo ance the mediocrity of the design. The deseum in Harlem, the elevated park at 55 sense of much Deconstructivist architecvelopment will offer commanding views of Brooklyn Bridge Park, with its swirlWater Street in Lower Manhattan and, ture, to which style the present design most recently, the remodeling of the Mo- owes its allegiance in a general way. The ing, lozenge-shaped fields, and beyond ses-era McCarren Park Pool and bath- various parts do not coalesce into either that, the great skyline of Manhattan. house in Greenpoint, Brooklyn. a harmonious whole or a charming dissoYet the general drabness of Rogers Rogers Marvel’s winning design nance. The facade of the hotel is a series Marvel’s design is especially regrettable for Brooklyn Bridge Park includes a of rectangular modules fashioned from given that some of the other developfive-story residential section, to be glass and steel and stacked into 10-stoers offered more interesting proposals. called Pierhouse, which will contain ry bays defined by pale stone partitions. The Dermot proposal, designed by FX120 “townhouse-style” condominiums, These bays, which protrude from the faFOWLE Architects, was Deconstrucseveral restaurants, a fitness center and cade and roof like flanges, appear to be tivist in style, like most everything else a garage. The 10-story 1 Hotel, mean- fragile and extraneous. The sense of clutthese days, but its massing had a cer-
68 November 2013 www.TheRealDeal.com
tain volumetric drama and a muscularity to it that do not appear to be in the offing with the Rogers Marvel design. Perhaps the best of the proposals was the one submitted, ironically, by Toll Brothers’ new partner, Starwood. A collaboration of three firms — Bernheimer Architecture, Alloy Development and nArchitects — created a pure, rectangular structure clad in a glass-and-steel curtain wall, one that recalls the Sea-
gram Building and the best years of the International Style. With regard to both the hotel and the lower-lying residential section, the initial designs that Rogers Marvel submitted seem a bit cleaner and more austere than the latest ones. The earlier versions, lacking the halfhearted Deconstructivist bells and whistles of the present designs, were more strictly rectilinear, and what they lost in drama, they made up for in clarity and, for lack of a better word, presentability. True, their surface revealed a more dominant presence of stonework in the window surrounds, which were arranged in the syncopated rhythms that many recent New York projects have favored (one thinks of Jean Nouvel’s 100 11th Avenue or Skidmore, Owings & Merrill’s 101 Warren Street). But there was a general neatness to the design that I think is absent in the one that will ultimately be built. TRD
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140 CHARLES STREET - PH
4 BR, 4.5 BATH
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200 CHAMBERS STREET
4 BR, 4 BATH
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$5.55 M
We define our neighborhoods as much as they define us.
42-50 WOOSTER STREET
3 BR, 2.5 BATH
WEB ID: 289871
$4.295 M
288 WEST STREET
2 BR, 1 BATH
WEB ID: 588534
$2.7 M
33 Irving Place 212.557.6500
110 Fifth Avenue 212.633.1000
26 Astor Place 212.584.6100
730 Fifth Avenue 212.242.9900
239 East 79th Street 212.929.1400
337 West Broadway 212.924.4200
530 LaGuardia Place 212.557.5300
88 Greenwich Street 212.269.8888
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33 Irving Place 212.557.6500
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Luxury Listings NYC hosts “Million Dollar Listing New York” soirée
Stars of the small screen mingle with brokers at debut party for TRD’s sister magazine
T
By Zachary Kussin he stars of Bravo TV’s “Million Dollar Listing New York” mingled with real estate’s movers and shakers last month at the debut party for Luxury Listings NYC. The publication, which launched this year, is The Real Deal’s consumer-focused sister magazine. The party honored Ryan Serhant, Fredrik Eklund and Luis D. Ortiz, the Manhattan brokers featured on “MDLNY.” The setting was the sleek Soho showroom of interior-design giant Tui Lifestyle, at 136 Greene Street. From left: Jessica Leonard, Ryan Serhant and Kelly Fissell
Tamara Eaton and David Perlman
LLNYC and The Real Deal publisher Amir Korangy (left) with Luis D. Ortiz
From left: Etan Hakimi, Fredrik Eklund, Daniel Lolai, Ryan Bergman and David Zar
THE EYE OF ACCOMPLISHED DESIGNERS, THE HANDS OF A RENOWNED BUILDER, THE LUXURY OF UPPER EAST SIDE LIVING AT AZURE.
Penthouse B designed by Bjorn Bjornsson
72 November 2013 www.TheRealDeal.com
PHOTOGRAPHS FOR THE REAL DEAL BY Guest of a Guest
On
the
Town
Keziah Makoundou and Nick Mascaro of The Real Deal
Tui Lifestyle director of design Erik Galiana (right) with party guests
‘MDLNY’ stars (from left): Fredrik Eklund, Luis D. Ortiz and Ryan Serhant
LLNYC and The Real Deal editor-in-chief Stuart Elliott and Luis Ortiz
From left: Daniel Rizza, Ross Fox of The Real Deal and LLNYC partner Mitchell Newman
Douglas Elliman’s Gilad Azaria (left) and Bond New York’s Bruno Ricciotti browsing through an issue of LLNYC
Guests at the Tui Lifestyle showroom in Soho
From left: Jennie Durkovic and Yoav Barilan of The Real Deal, Gilad Azaria and guests
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Real Dea 11-13 Brokerage.indd 1
10/30/2013 4:25:48 PM
Top Firms
Who has the tightest grip on NYC? A firm-by-firm breakdown of which residential brokerages dominate in which neighborhoods
F
By Katherine Clarke or New York City’s biggest real estate brokerages, competing for residential listings is something of a blood sport. And it’s only grown fiercer in the last year, as the number of listings has shrunk amid a market-wide inventory shortage. To find out which firms reign supreme in which areas of the city, The Real Deal poured over nearly 6,400 for-sale listings in 50 different neighborhoods across Manhattan and Brooklyn, using data from listings aggregator StreetEasy. Not surprisingly, the city’s two largest firms — the Corcoran Group and Douglas Elliman, which have more than 1,000 agents each — have by far the most listings in almost every Manhattan neighborhood, and in some areas of Brooklyn. Indeed, Elliman had 1,165 listings worth some $3.3 billion, encompassing roughly 18 percent of the properties surveyed by TRD last month. Corcoran, meanwhile, had 1,052 listings totaling about $3.16 billion — or about 16 percent of the total. Halstead Property had 7 percent of all of the listings, which was slightly more than its sister company, Brown Harris Stevens. But the dollar volume of BHS’ listings came to $1.6 billion, far more than Halstead’s $705.3 million. New firms like Town Residential are also beginning to grab market share. Founded in 2010, Town had roughly 2.5 percent of the listings in the areas examined by TRD, many of them clustered on the Upper East Side and in Tribeca. And while major Manhattan firms have, of course, made major inroads in some Brooklyn neighborhoods, still-gentrifying Brooklyn areas like Greenpoint remain largely dominated by local firms. In addition, in Southern Brooklyn, areas like Bay Ridge remain largely the turf of local brokerages. (In Brooklyn, TRD focused on select areas that illustrate key market dynamics.) Only active listings on StreetEasy as of early last month were included in TRD’s data, so properties in contract or not officially on the market were not counted. That means that some major new developments, such as One57, which have not publicly listed their units, were not tallied. Read on to find out where each firm’s grip is strongest.
ILLUSTRATION BY D.STUDIO
www.TheRealDeal.com November 2013 75
Top Firms
Neighborhood leaders While many of New York’s priciest markets are seeing a slew of firms going head-to-head, there are a few neighborhoods where one brokerage has managed to grab the lion’s share of the listings. Not long ago, brownstone Brooklyn was largely the domain of mom-and-pop brokerages. But over the last decade, major Manhattan firms have muscled their way in, either by buying up smaller companies or by pouring in money to chip away at their rivals’ market share. So far, one major firm has done that more successfully than any other: Corcoran. In 1998, Corcoran became the first large Manhattan brokerage to open a Brooklyn office, acquiring a 50 percent share of Brooklyn Landmark Realty. Elliman, meanwhile, didn’t plant a flag in Brooklyn until 2004, although each firm now has five offices in the borough. Barbara Corcoran — who founded Corcoran but sold it in 2001 — told TRD she decided to set up shop in Brooklyn after hearing her stepdaughter’s friends talking about living there. “I said to myself, ‘something’s changing here,’” recalled Corcoran. “Then, of course, it blew up in value and also, very importantly, in status. It has outpaced Manhattan in appreciation over the last 10 years, in both
Two of Corcoran’s pricey Park Slope listings — a 19th-century farmhouse property at 413 Dean Street listed for $2.5 million, and a townhouse at 535 3rd Street on the market for $3.4 million — both went into contract last month, according to StreetEasy. The aggressive push into the stroller-filled area by Corcoran and other Manhattan firms has eaten away at the business of firms like 26-year-old, Park Slope–based Warren Lewis Realty, which had less than 4 percent of the listings in its own backyard. It may be poised to regain its foothold, however. Last year, it affiliated with a major firm and became Warren Lewis Sotheby’s International Realty. In Boerum Hill, Corcoran had 15 listings, or 50 percent of the 30 properties on the market. Its closest competitor was D’Andrea Craig Realty, whose principal, Toni D’Andrea, has been active in the neighborhood for more than 30 years. D’Andrea Craig had just three listings in the neighborhood as of last month. D’Andrea told TRD that her firm has seen a “dramatic downturn” in its income and a significant drop in walk-in clients since the big Manhattan firms began opening Brooklyn offices. She said her company has just enough business to sustain itself through rentals, thanks to longstanding relationships with landlords
“I said to myself, ‘something’s changing [in Brooklyn.]’ Then, of course, it blew up in value and also, very importantly, in status.” Barbara Corcoran, founder of the Corcoran Group good times and bad, because it’s gotten cooler.” The move paid off for the firm. As of last month, Corcoran had 213 Brooklyn listings worth some $350.2 million, according to TRD’s research. Elliman, by contrast, had 122 Brooklyn listings worth about $194.7 million. Halstead and BHS followed with $119.2 million and $68.2 million, respectively. Halstead may soon see a boost in listings, though. Earlier this year, it bought Carroll Gardens–based Aguayo Real Estate Group, giving it five total Brooklyn offices. And it’s not the only Manhattan firm expanding in the borough. Warburg Realty head Fred Peters told TRD last month that he plans to open a location in Brooklyn by the first quarter of 2014. Still, in Park Slope, where Corcoran, Elliman and BHS all have offices dotting Seventh Avenue, Corcoran had 44 of the neighborhood’s 147 listings, totaling $56.8 million, as of early last month. Its closest competitors, BHS and Halstead, each had just 13 listings in the neighborhood, while Elliman had 12.
of multifamily brownstones. But the firm has been feeling the pinch on the sales side of the business, she said. “There’s tons more competition than there was five or 10 years ago,” she said. “There were more little mom-and-pop firms then, but a lot of those have been squeezed out or acquired.” Corcoran also dominates in ultra-trendy Williamsburg, where the firm had a full 29 percent of the total listings on the market in the area last month — far more than Elliman’s 18 percent. Corcoran also bested Elliman and other firms in Prospect Heights, Crown Heights, Cobble Hill and Carroll Gardens. Sarah Burke, executive vice president and director of sales for Elliman in Brooklyn, said the firm views Williamsburg as an area where it can catch up to Corcoran. “Williamsburg is a newer market than those in brownstone Brooklyn,” she said. “Corcoran hasn’t been in Williamsburg that much longer than us.” Burke added that Elliman has recently
Chelsea sales listings Firm
Number of listings
Market share
Douglas Elliman
76
32%
The Corcoran Group
43
18%
Halstead Property
14
6%
Other firms
102
43%
Source: StreetEasy data as of early October
76 November 2013 www.TheRealDeal.com
A co-op unit at 765 Park Avenue on the Upper East Side, listed by Brown Harris Stevens for $25 million
Upper East Side sales listings Firm
Number of listings
Market share
The Corcoran Group
87
22%
Douglas Elliman
65
17%
Brown Harris Stevens
40
10%
Halstead Property
33
8%
Town Residential
28
7%
Sotheby’s International Realty
27
7%
Stribling & Associates
21
5%
Warburg Realty Partnership
11
3%
Other firms
79
20%
Source: StreetEasy data as of early October
recruited a number of agents who were working in Williamsburg during the first wave of new development sell-outs. Corcoran may have the upper hand in Brooklyn, but Elliman has the leg up in Lower Manhattan. Early last month, Elliman had 62 sales listings in the Financial District, or 36 percent of the total inventory in the neighborhood. By contrast, Corcoran had only 27 exclusives in the neighborhood, followed by the new development firm the Marketing Directors, which had 12 listings largely clustered in the W Downtown, where it was recently tapped to sell the remaining sponsor units. Slightly outside of the Financial District in the Fulton Street/South Street Seaport area, NestSeekers International has a significant presence, thanks to a large number of exclusive listings at TF Cornerstone’s 99 John Street and at a condominium property at 138 Fulton Street. In Battery Park City, meanwhile, Elliman had 16 sales exclusives last month — more than 22 percent of the listings in the neighborhood. Its closest neighborhood competitor is the local shop Battery Park Realty, which had nine exclusives. Halstead, BHS and Corcoran each have only one or two listings there. Elliman’s Ariel Cohen — who lives at 15 Broad Street and is one of the most active brokers in FiDi — attributed his firm’s success in Lower Manhattan to the new development projects the company has represented there, including 15 Broad Street and 75 Wall Street. Town CEO Andrew Heiberger noted that exclusive agreements to sell sponsor units in a few select buildings are an easy way to rack up a large number of listings in FiDi. “Two or three buildings have all the
listings,” he said. “You get a large share of the listings by being in a few 300-or-400unit buildings.”
Battleground neighborhoods In the competition for exclusives, several Manhattan and Brooklyn neighborhoods are like Ohio and Florida in presidential elections — the most intense battlegrounds. These neighborhoods are generally the most sought-after in the city, with pricier listings that translate into hefty commissions. Not surprisingly, among the most heated of these areas are Chelsea, Tribeca and the Upper East and Upper West Sides. Indeed, all of Manhattan’s 10 largest brokerages are heavily active on both sides of Central Park. While Elliman and Corcoran have more listings in each neighborhood than any other firm, BHS and Halstead are breathing down their necks. On the Upper West Side, Corcoran had the largest market share last month with 81 listings, about 18 percent of the total 454 sales listings in the area. Elliman ranked second with 63 listings, or 14 percent of the inventory, according to TRD’s research. Halstead trailed with 11 percent, while BHS rounded out the top bunch with 8 percent. But when it comes to the high-end market in the area, Elliman, Corcoran and BHS were essentially in a dead heat: For Upper West Side listings priced at $5 million or above, each firm had about 14 percent of the market share. Corcoran also has an edge over other firms on the Upper East Side. There, Corcoran landed the top spot with 22 percent of the neighborhood’s listings and Elliman snagged 17 percent. Next on the list were
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Top Firms BHS and Halstead. Sotheby’s — which only had 7 percent of all the listings on the Upper East Side — had the largest chunk of the luxury market there, with 17 percent of listings priced at $5 million or above. BHS had nearly 16 percent. Warburg and Stribling, both mid-sized firms, had a far smaller percentage of the total listings in the area, but still do the majority of their business in Lenox Hill and on the Upper East Side, according to TRD’s findings. Meanwhile, Town is also making inroads on the Upper East Side, especially since it secured an exclusive to market Bluerock Real Estate’s the Charles, a new 30-unit luxury condominium at 1355 First Avenue. As of last month, Town had 7 percent of the listings on the Upper East Side. Town has done especially well from 57th to 96th streets east of Fifth Avenue, said Heiberger, who noted that the firm has focused its attention there “because that area has a very high density” of luxury properties. “Down the road,” he added, “you can expect Town to have at least one additional [office] location on the East Side.” In Harlem, Elliman has a significant stronghold, but Halstead Property is gaining ground. According to StreetEasy’s data, Elliman had the biggest share of the pie in Central Harlem last month with 19 percent of listings, including a $4.2 million townhouse at 235237 West 120th Street, but Halstead was hot on its tail with 13 percent. Echoing a common refrain among firm heads, Halstead CEO Diane Ramirez cited new development sales as a way to gain market share in previously untapped neighborhoods. In Central Harlem, for example, she attributed the firm’s strong presence to the fact that it has marketed several new developments there starting years ago, including Fifth On The Park, a 160-unit condo by Uptown Partners, and 88 Morningside, a 73-unit condo. “We are one of the few firms that believed in Harlem early on,” she said. “We became strong in new development marketing and now we’re seeing lots of resale [activity] from things we previously sold. Business begets business.” Halstead is also gaining strength across the river in Dumbo, where it is marketing the new Kirkman Lofts condominium at 37 Bridge Street. Sotheby’s has a reputation for dominating Dumbo, thanks to veteran agent Karen Heyman, who has been selling lofts there since the 1990s. Currently, Heyman has several listings at Two Trees’ pricey new development 1 Main Street, as well as a contemporary townhouse at 175 Water Street asking $4.95 million. As of last month, Sotheby’s had 23 percent of the overall listings inventory in Dumbo, but Halstead was a close second with 21 percent.
Uncharted territory There are some up-and-coming areas of the city — Bushwick and Greenpoint for example — where Manhattan’s largest firms have yet to gain much market share. David Maundrell, president of Williamsburg-based AptsandLofts.com, said he focuses on still-gentrifying neighborhoods in
78 November 2013 www.TheRealDeal.com
Park Slope sales listings Firm
Number of listings
Market share
The Corcoran Group
44
32%
Brown Harris Stevens
13
9%
Halstead Property
13
9%
Douglas Elliman
12
9%
Other firms
56
41%
Tribeca sales listings Firm
Number of listings
Market share
The Corcoran Group
35
27%
Douglas Elliman
34
26%
Town Residential
13
10%
Other firms
50
37%
Source: StreetEasy data as of early October
“We are one of the few firms that believed in Harlem early on.” Diane Ramirez, Halstead Property Sarah Burke
Diane Ramirez
“Corcoran hasn’t been in Williamsburg that much longer than us.” Sarah Burke, Douglas Elliman A penthouse at new condo 75 Wall Street, listed with Elliman’s Ariel Cohen for $8.2 million
Financial District sales listings Firm
Number of listings
Market share
Douglas Elliman
62
36%
The Corcoran Group
27
16%
The Marketing Directors
12
7%
Other firms
72
41%
Source: StreetEasy data as of early October
Brooklyn where the city’s largest firms haven’t made an aggressive effort to grab listings because prices are still relatively low. “Do [these areas of Brooklyn] mean as much to those companies as Manhattan does? No, because the revenue is not there,” Maundrell
said. “That’s where you can beat them.” In Greenpoint, the top two players by number of listings are AptsandLofts.com and Greenpoint Properties, a one-office firm based on Manhattan Avenue. Those brokerages each had about 14 percent of the listings on
the market last month, according to TRD’s research. While Elliman, Corcoran and Halstead are active in Greenpoint, they fall behind both of those firms. Elliman had just six of Greenpoint’s 49 total listings last month, while Corcoran had three and Halstead had one. Maundrell, too, said marketing new construction condos has helped his firm establish a foothold in these neighborhoods. For example, the firm handled sales for the 10unit condo 145 McGuinness Boulevard, where most of the apartments are now in contract. But in rapidly gentrifying Bushwick, Elliman is more of a competitor for AptsandLofts.com. The two firms each had just four sales listings out of a total 45 in the neighborhood as of last month, as did Fillmore Real Estate, a family-run brokerage that for years dominated the lower-priced Southern Brooklyn market. The remaining 33 listings were split between 24 other firms. That, of course, doesn’t include rentals, where Maundrell claims AptsandLofts. com dominates. Meanwhile, Fillmore, formerly one of Brooklyn’s largest firms, has lost ground to Corcoran and Elliman when it comes to listings in more prime areas, but it seems to be holding on in some of the less-gentrified Brooklyn neighborhoods. The firm had just 26 total listings in the specific Brooklyn neighborhoods surveyed by TRD — or 2.4 percent of the Brooklyn pie. Ramirez said that while the big Manhattan firms are increasing their business in areas like Greenpoint, Bushwick and Bay Ridge, it’s still too early to open offices in those areas. “We don’t necessarily think we need bricksand-mortar in each of those areas yet,” she said. “We want to make sure we have the capacity and the agent level first.” Elliman’s Burke agreed: “Bricks-andmortar becomes important when you have enough agents doing a considerable amount of business there.” Bay Ridge — where Staten Island–based RE/MAX Metro has more listings than any other firm — is, in fact, largely ignored by the big Manhattan-based firms. Last month, RE/ MAX had exclusives on 24 percent of the 116 sales listings in the neighborhood. Bay Ridge– based Coldwell Banker Reliable and HouseN-Key Realty, a 21-agent firm, followed in second and third place. RE/MAX was previously Century 21 Calabrese Realty, but rebranded to RE/MAX Metro six years ago. Since then, it’s also grown from six or seven agents to 30, said Larry Cricchio, the general manager of the firm. None of Manhattan’s biggest firms have any significant presence in Bay Ridge, but a number of other firms are active in the neighborhood, including All Points Real Estate, Awaye Realty and Ideal Properties Group. Indeed, there are 36 residential brokerages with active listings in the area, making Bay Ridge one of the most diverse neighborhoods in the city. And sometimes Corcoran, BHS and Elliman get listings in the area, said Cricchio. “But they don’t see the same results we do,” he added. TRD
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Q&A
Jersey City’s jump start
The Garden State’s second-largest city is seeing a new influx of buyers, renters, developers and retailers By Melissa Dehncke-McGill ersey City — once considered by many in New York to be a pop-up city that primarily offered cheaper office and residential rents directly across the river — is evolving into something more. For example, the influx of trendy New York City retailers and services — including the Williamsburg arcade-bar Barcade; the restaurant Thirty Acres, and the well-known doctors’ practice Tribeca Pediatrics — is just part of the story. Residential real estate there is also booming, and not just in the high-profile high-rise towers along the waterfront. In this month’s Q&A, The Real Deal talked to residential brokers who work in New Jersey’s second-largest city. They said both prices and activity for sales and rentals are up significantly since last year in almost all housing sectors. Plus, they said they’ve seen a serious increase in New Yorkers (and especially Brooklynites) looking to relocate there. One broker said that while prices are on the rise in Jersey City, they are still 10 to 12 percent less than they would be in, say, Brooklyn Heights or Cobble Hill.
J
Eugene Cordano
executive director of sales, New Jersey, Halstead Property It’s been reported that there’s a new wave of New York City residents relocating to Jersey City. Are you noticing New York transplants driving a lot of the activity there? Absolutely. A lot of New York City transplants and out-of-staters are seeking out Jersey City. It’s really established itself, much like Hoboken, as a real destination. It’s not as strong as Hoboken just yet, but it is a strong second. Who are the most active buyers in Jersey City now, and how does that differ from the past? Condo buyers are probably the most active. But single-family and two- to four-family homes, with rental income coming from the basement unit, is a very strong subset of that market. The demographic of people buying condos is still those working in Jersey City or Manhattan. On the single-family side, it’s young families and families who need more space. They have the ability to get that space here, versus Brooklyn or other parts of the tri-state area, at a cheaper price. How quickly are properties selling in Jersey City these days? The time properties are spending on market is at an all-time low. It’s roughly 40 days [on average] between the time a property comes to market and the time it’s closed on the books. In 2008, when Lehman collapsed, days on the market were double and triple that.
64 July 2013 www.TheRealDeal.com
How are residential sales and rental prices in Jersey City these days? How much are prices up or down by compared to a year ago, two years ago and during the boom? Prices are up significantly year-over-year. Single-family homes in downtown Jersey City average about $825,000, which is up 27 percent since 2012. The average price for a two- to four-family in Jersey City is $919,000, which is up 15 percent from 2012. Condos, which average $520,000, are up 11 percent from 2012. Which price ranges and housing types are struggling the most now in Jersey City? In the downtown waterfront neighborhood, there really isn’t a price point or type that’s struggling. There is no vacant land to speak of, though there are some projects that are stalled. The entry-level market outside of downtown is slow. Journal Square is right next to the downtown area and is only up 3 percent year-overyear, with an average price of $255,000 for a single-family row house. That market is still down 19 percent since 2010. It’s farther away from the PATH, about a 15- to 20-minute walk, and doesn’t have a waterfront. Jersey City has a number of new projects underway, such as Toll Brothers’ 420unit Provost Square, and a 1.2 millionsquare-foot hotel and rental project at 70 and 90 Columbus Street. Which upcoming projects do you think are going to have the biggest impact on the market? I think Provost is the most intriguing and will do the most. It has the most potential to be the catalyst to get [activity] going in the Powerhouse Arts District. What’s the residential inventory like in Jersey City these days, and how does
In addition, they noted that those who once lived in Jersey City condos and moved deeper into the Garden State once they had children are now upgrading to brownstones and row houses in Jersey City itself. And, investors are also snapping up properties. All of this coincides with a major push by Jersey City’s new mayor, Steve Fulop, to incentivize developers, who have already constructed a slew of towers along the waterfront, to do the same further inland. The goal is to transform neighborhoods like Journal Square and Bergen-Lafayette that have good public transportation access to Manhattan. And the city is already well on its way. “Looking at pictures [of Jersey City] from 1980, every building looks bombed out, with bars on the windows,” said Phil Rivo of Armagno Realty. “Now the biggest problem is getting hit by a Bugaboo stroller.” The biggest challenges at the moment are low inventory and dealing with increases in flood insurance rates, spurred on by Hurricane Sandy. For more on which projects are coming on the market, which buyers are most active and which areas investors are targeting, we turn to our panel of experts. that compare to a year ago, two years ago and during the boom? There are roughly 336 active listings in all of downtown Jersey City, primarily the waterfront. That’s an all-time low. There are 144 condos on the market. [During the] doldrums, the average was 300 to 400. Are you seeing more Brooklyn transplants priced out of that borough looking to relocate to Jersey City? Yes, and we are actually seeing transplants with a bit of sticker shock as to pricing in Jersey City. Having said that, our pricing is still on average 10 to 12 percent below what a comparable apartment would be in Brooklyn Heights or Cobble Hill right now. What are the biggest challenges to selling and renting homes in Jersey City to-
can smoke a cigar, have Chinese, Indian, Italian food — whatever you want.
James Tortorelli
branch vice president, Coldwell Banker How is overall residential sales volume and rental activity in Jersey City these days? According to data from the Multiple Listings Service, sales volume is up 21 percent from the same time a year ago, while rental activity is up 49 percent over the last two years. Which price ranges and housing types are performing best right now in Jersey City? Two-bedroom waterfront condos priced between $450,000 and $650,000 tend to be
“We are actually seeing transplants with a bit of sticker shock as to pricing in Jersey City. Having said that, our pricing is still on average 10 to 12 percent below what a comparable apartment would be in Brooklyn Heights or Cobble Hill.” Eugene Cordano, Halstead Property day, and how do those challenges differ from what you’ve seen in the last few years? Post-October 1, the new FEMA flood zone maps and pricing took effect. Right now the waterfront in general is all within the flood zone. It’s the most pertinent challenge we have to selling. As [insurance] policies renew, buildings will have to have elevation certifications redone, and pricing is probably going up on all of these policies. Previously it was lack of lifestyle and things to do after 5 or 6 p.m. Now there are nightlife and music venues. You
the best performers in our market right now. Most of the new residential development in Jersey City has been along the waterfront. What do you think of Mayor Steve Fulop’s recently announced plan to give more incentives to developers who build in other neighborhoods, and how do you think it will impact the overall real estate market in Jersey City? It will offer more alternatives to people priced out of the downtown/waterfront area. It can only help Jersey City by providing additional options for potential buyers. www.TheRealDeal.com November 2013 81
Q&A What’s the residential inventory like in Jersey City these days, and how does that compare to a year ago, two years ago and during the boom? Residential inventory in Jersey City continued to fall in 2013, down 19 percent yearover-year, and down 49 percent since the end of 2010, according to MLS data. Other than the waterfront, which residential neighborhoods in Jersey City are seeing the most change right now? The other up-and-coming neighborhoods and projects include the renovated Hamilton Park area, a development plan for a new arts site at White Eagle Hall, and the new development plan for the Journal Square PATH Station Plaza.
Joseph Covello
broker/owner, Liberty Realty LLC How are residential sales and rental prices in Jersey City these days? Prices are up about 10 percent from one year ago, depending on type and location. We are now mirroring 2006 pricing. Which price ranges and housing types are performing best in Jersey City? No doubt, the waterfront three-bedroom market and the brownstone market have shown the largest percentage increase. Which price ranges and housing types are struggling the most now? Certain sectors have still not totally recovered from the financial crash. The more commuter-friendly the neighborhood, the better and faster the transformation. How long are properties staying on the market in Jersey City these days? The average is 30 to 40 days — half of what it was a year ago, and equal to 2006. How much of a discount exists in Jersey City compared to Brooklyn? Approximately twice the square [footage goes] for about half to two-thirds of the cost, but there are many variables factored into this equation.
Phil Rivo
sales agent, Armagno Agency Are you noticing New York transplants driving the activity in Jersey City? There have always been a lot of New Yorkers looking to relocate to Jersey City because of the proximity, but it has always been as a second choice. Now it’s a destination.
82 November 2013 www.TheRealDeal.com
In general, who are the most active buyers in Jersey City now, and how does that differ from the past? In the past there were a lot of renters. Now people are buying condos or, if they owned condos, they are buying townhouses. The downtown market was thought of as Hoboken, and if you couldn’t afford Hoboken you’d settle for Jersey City. Post-Sandy, people really discovered Jersey City. Sandy has brought people from Hoboken in addition to the people from Jersey City and New York who were always coming. We are also getting a lot of empty nesters. I have had clients this year from Basking Ridge, Summit, Westfield and Short Hills; empty nesters that are moving back here to be closer to the city. People with children used to plan their exits to towns like Summit, Montclair and Maplewood, as well as Westchester. Now they’re staying and others are moving back here. I sell a lot of brownstones, and this year, for every house that I listed, there were three or four offers, if not more, and usually over ask. How is overall residential sales volume and rental activity in Jersey City? When people talk about the boom, they are usually talking about six or seven years ago. [But there is a] boom now in Jersey City. There is a lot more housing now than there was then. And there are a lot more buyers looking for property. What do you think of the mayor’s proposal to give more incentives to developers who build in inland neighborhoods? Full disclosure, I was on Mayor Fulop’s transition team focusing on real estate development. He really wants to focus on the neglected areas. Bergen Lafayette has had its problems in the past, but in reality, some parts are less than a mile from downtown. He’s trying to be fair with abatements and give incentives to developers. He knows the waterfront will sell, but where will the city be in 15 to 20 years? As this area continues to blossom, it’s natural that areas that are two miles away will be developed, so the abatement policy is focusing on those areas. Which upcoming projects do you think are going to have the biggest impact on the Jersey City market? I am very excited about what is happening in Journal Square. That was once the hub of the city … and there are thousands of units being built there. It’s a great diverse community. It has a larger Indian town than 6th Street in Manhattan. That’s being redeveloped as a tourist area. There is MANA Contemporary, an art and storage space that was just completed. It was developed by Moishe’s moving company originally as art storage, and now has artist work space. What’s your outlook for Jersey City? I see Jersey City doubling in size — as long as we take care of the infrastructure and the PATH is improved. The only thing
you pay for here is property tax. There is no city income tax, and everything from babysitters to food shopping to restaurants is 20 percent cheaper. The schools are also getting better because people stay and become invested in the community. What are the most surprising trends you’re seeing in the Jersey City market? People are buying multifamily buildings that aren’t covering the rent because they believe in Jersey City that much. They think that rents will continue to go up. For years people have snickered at Jersey City, and now the same brownstone that’s been here since 1845, that nobody would consider, is the [hot] ticket. Can you give us a sense of how much of a discount exists in Jersey City compared to Brooklyn, for both rentals and sales? For rentals, I think the prices are about 20 percent lower than they are in Brooklyn. For sales in the high-end condo market, I think it’s about equal when you factor in the usually lower maintenance and the higher taxes. For a few years, banks weren’t allowing developers to build condos; they were only building rentals. So now we have a shortage [of condos.] For houses, I think it’s also about equal per square foot. Other than the waterfront, which residential neighborhoods in Jersey City are seeing the most change? In Hamilton Park, there is new development [Jersey City-based developer] Silverman did a good job with. There’s also a warehouse in Hamilton Park that’s been converted to 150 residential units by Shuster. LeFrak owns property and can wait until the market is stronger to build it. You might not recognize Jersey City in 10 years. Looking at pictures from 1980, every building looks bombed out, with bars on the windows. Now the biggest problem is getting hit by a Bugaboo stroller.
Jacqueline Urgo
president, the Marketing Directors Are you noticing New York transplants driving a lot of the activity in Jersey City? Yes, we are seeing a larger group of New Yorkers. Today, 50 percent of our buyers are coming out of New York, where in the past those buyers only made up about 20 percent of the market. How are residential sales and rental prices in Jersey City these days? Sale prices are higher than at any point in history. We are slightly above the boom prices — 25 percent above values two years ago. Rental pricing is steady and up about 5 to 10 percent.
Which price ranges and housing types are performing best right now in Jersey City? The higher-end luxury market is performing the best. At the beginning of the turnaround, one-bedrooms were the highest demand. Today, larger condos and townhomes are the most sought after. Which upcoming projects do you think are going to have the biggest impact on the Jersey City market? Eighteen Park, which will open this spring, is the first architecturally significant building to enter the Jersey City marketplace. Seventy Columbus will be a great addition to downtown Jersey City. And KRE’s J Squared will transform Journal Square. [The Marketing Directors is representing all three buildings.] What are the most surprising trends you’re seeing in the Jersey City market? People are comparing Jersey City to Brooklyn. That never happened years ago. How much of a discount exists in Jersey City compared to Brooklyn? Both condos and rentals average 25 to 30 percent cheaper in Jersey City than in Brooklyn.
Tom Pichi
broker, Metropolitan & Waterfront Residential Brokerage How is overall residential sales volume and rental activity in Jersey City these days? Sales volume is up by over 20 percent year-over-year. Currently demand is outstripping supply by a wide margin. Bidding wars are quite common, and new listings are snapped up quickly. How are rental prices in Jersey City? Rental prices have remained somewhat flat year-over-year. Which price ranges and housing types are performing best right now? There is a huge demand for apartments in the $500,000-to-$700,000 range. At these levels, the rent-versus-own equation favors buyers. K. Hovnanian Homes recently announced that it sold one of its penthouses at 77 Hudson for a record-setting price in Jersey City of $2.8 million. What does that deal say about Jersey City? Our firm represented the buyer in the transaction. One of our agents, Sujay Shah, worked with this buyer for over a year. The sale indicates how the Jersey City waterfront has matured and the increasing affluence of its residents. TRD www.TheRealDeal.com July 2013 65
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Real estate news in the Sunshine State TheRealDeal.com/miami
REPORT
New Florida rail to bring $320M in real estate The company planning to connect Miami and Orlando by Florida’s first privately owned intercity passenger line is putting the project’s cost at $2.4 billion, including $320 million to develop real estate along the track. The development will include office parks, shopping malls, entertainment venues and residential towers. All Aboard Florida will run its
All Aboard Florida
trains on 235 miles of track, virtually all of it owned by sister commodities line Florida East Coast Railway. Slated to open in mid-
2015, the passenger line will stop in Miami, Fort Lauderdale, West Palm Beach and at Orlando International Airport, according to the South Florida Business Journal. The Miami station is what All Aboard Florida has characterized as Florida’s version of Grand Central Terminal; the company puts the construction costs for the 1 millionsquare-foot depot at $325 million
and projects annual rent at $35 million.
Porsche Design Tower
Porsche condo gets largest loan since crisis Developer Gil Dezer has landed a $214 million construction loan for his Porsche Design Tower, a 60-story condominium going up in Sunny Isles Beach. The loan, from Wells Fargo & Co., is the biggest for a new condo project since the South Florida real estate market collapsed six years ago.
The skyscraper won’t be completed until early 2016, but 98 of its 132 units — 75 percent — are under contract. Dezer has already netted $550 million in sales; the development has a total sellout value of $850 million. The residences range in size from 4,800 to 17,000 square feet; the tower’s amenities include an automobile elevator and a fulltime “car concierge” who will oversee detailing, tire rotation and other maintenance for tenants’ vehicles.
Boca Raton penthouse sets new record A penthouse in Boca Raton is on the market for $13.95 million, the highest asking price for a condo in Palm Beach County. The home has 10,819 square feet, including a 4,000-square-foot terrace with a
Boca Raton penthouse
private pool and a spa. The interior space includes four bedrooms, four baths and a half-bath. Features include oak-and-slate floors, floorto-ceiling windows and access to the Boca Raton Resort & Club, which offers 24-hour room service and other spa amenities. Douglas Elliman broker Senada Adzem has the listing.
Related plans twin condo towers in Miami’s Brickell area
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Related Group, led by CEO Jorge Perez, wants to build two 49-story condo towers side by side in Miami’s Brickell neighborhood, an area seeing much new development these days. The skyscrapers, called Brickell Heights, are being designed by Arquitectonica; they will have 690 units combined and 85,000 square feet of retail space, exMiami reported. Compiled by Melanie Gray
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Commercial and residential real estate news briefs from around the U.S.
NATIONAL MARKET REPORT
Chicago Billy Corgan
Anton Menlo, the residential development Facebook is building near its headquarters
Silicon Valley The social media giant Facebook said last month it is working with developer St. Anton Partners to build a $120 million, 394-unit housing community near its headquarters in Menlo Park, Calif., the Wall Street Journal reported. Called Anton Menlo, the 630,000-squarefoot rental project will be within walking distance of Facebook’s offices and come with amenities like a sports bar and doggy day care. The move comes after Facebook employees had inquired about
Atlanta As metro Atlanta An Atlanta home for sale emerges from a severe housing downturn, investment firms are on a buying spree there, the Atlanta Journal Constitution reported. Taking advantage of an unprecedented supply of low-priced homes, investors have purchased almost 40,000 houses in the area in the past 18 months. That accounts for one in four purchases in the Atlanta area in the first quarter, up from one in 10 a year ago. While the long-term effect on the region’s housing market is unclear, the paper said, these investor purchases are giving a boost to neighborhoods stricken by foreclosures, and have helped increase home prices. Atlanta prices rose 20.8 percent in April from a year earlier, according to the Case-Shiller Home Price Index — the largest jump in the index’s history. Year-over-year growth was 18.5 percent in July. Investors are making up a growing percentage of total home ownership nationwide, and particularly in Georgia. In some counties in the state, institutional investors bought as many as half of all houses sold in July, the paper said.
Chicago In a sign of the continuing flow of real estate capital from Canada, a Montreal-based investment firm is set to buy a pair of riverfront office buildings in the 10 and 120 South Windy City for about Riverside Plaza $367 million, Chicago Real Estate Daily reported last month. Quebec’s Ivanhoe Cambridge will pay some $260 per square foot for 10 and 120 South Riverside Plaza, located on the banks of the Chicago River. That deal comes on the heels of the $300 million 86 November 2013 www.TheRealDeal.com
places to live near the headquarters, amid a housing shortage and rising real estate prices in Menlo Park, the Journal said. According to the real estate listings website Zillow, the median home sale price in Menlo Park in August was $ 1.35 million, up 11.1 percent from the same month of last year. Zillow’s rent index for the area was $ 4,459 in August, up 4.7 percent year-on-year. At Anton Menlo, apartments will go for market rates, with a handful set aside for low-income residents. All but 15 units will be available to non-Facebook employees. Ivanhoe Cambridge pledged to finance River Point, a 45-story office development at 444 West Lake Street — Chicago’s first on-spec office tower since 1998. In December, Ivanhoe Cambridge announced a strategic partnership with Chicago-based Callahan Capital Partners to expand its U.S. office portfolio. The venture has already invested some $1.6 billion in New York and Seattle.
San Francisco Jamestown, the owner of New York’s Chelsea Market, has purchased the retail portion of San Francisco’s embattled Ghirardelli Square and plans to spend $15 million to revive it, the San Francisco Business Times reported. Jamestown paid around $56 million for the 100,394-square-foot, 12-building retail center, a converted chocolate factory. The firm said it plans to upgrade storefronts and signage in the hope of attracting restaurateurs to the area, which is located near Fisherman’s Ghirardelli Square Wharf. Nearly half the rentable property in the square is currently vacant, but Jamestown is hoping to return the area to its 1990s heyday. Jamestown CEO Michael Phillips told the Times that his goal is to make the property attractive enough to draw locals and tourists alike. “If you make it cool enough for the locals, then of course tourists will follow,” he said. “In the Marina and Russian Hill we certainly have great residential neighborhoods within walking distance.” This is only the most recent in a string of California acquisitions for Jamestown, Bloomberg News reported. Since 2011, the company has spent about $900 million on California retail and office properties, including 799 Market Street in San Francisco, South Shore Center in Alameda, and Spenger’s restaurant in Berkeley. “We’re committed to the West Coast and the Bay Area,” Phillips said. Why? San Francisco’s economy is in the fourth year of job gains, fueled by expanding technology and health-care companies, tourism and construction. The jobless rate is 5.6 percent, compared to 7.3 percent nationwide and 8.9 percent throughout California. Compiled by Evan Bleier
Smashing Pumpkins singer Billy Corgan is expanding his lakefront spread in Highland Park, paying $1.25 million for a 4,646-square-foot house adjacent to his property, the Chicago Tribune reported. The home was originally built as the coach house to Corgan’s 18-room, 9,606-square-foot mansion, which he bought for $6.8 million in 2003.
Los Angeles
Wolfgang Puck’s new home
Celebrity chef Wolfgang Puck paid $14 million for an eight-bedroom villa in Bel Air, Curbed.com reported last month. Originally listed for $21.99 million over a year ago, the home’s asking price had been dropped to $16.5 million.
Deer Valley
Mitt Romney
Mitt Romney, the 2012 presidential candidate and former Massachusetts governor, has purchased a ski house in Utah, the Park Record reported. The six-bedroom, 8,730-square-foot house, on Silver Lake Drive in Deer Valley, had been listed for $8.9 million. Romney, who helped organize the 2002 Winter Olympics in Park City, sold his mansion in the area four years ago.
ON THE MARKET Atlantic Foundation looks to cash in on Chelsea sale The nonprofit Atlantic Foundation has put its Chelsea digs — a site that could be worth as much as $45 million — up for sale. The High Line-adjacent site at 540 West 21st Street 540 West 21st Street has about 70,000 square feet of buildable space, but a buyer could add roughly 20,000 square feet by purchasing air rights from nearby sites. “A developer could build a 250-foot-tall, 23-story building here, which is taller and bigger than many other development sites in the neighborhood,” Stephen Powers, a broker with Denham Wolf, which is marketing the property, told Crain’s. The area’s current zoning requires that one-third of the space in any development be commercial. Powers suggested that a buyer consider a commercial condominium in the base of a residential tower and sell it to art-gallery tenants.
Flushing hotel and development portfolio for sale
31-02/04/06 Linden Place
A package of four development sites in the Flushing section of Queens, some of which are positioned to become hotels, is on the market with a combined
Commercial properties recently placed on the market
asking price of $24.95 million. The properties can also be purchased individually. The site at 31-02/04/06 Linden Place, which is asking $5 million, is awaiting approval from the city Department of Buildings for a proposed 40-room hotel. Meanwhile, the lot at 31-16 Linden Place, which is asking $9.2 million, has approval for the construction of a 30-room hotel. The parcel at 34-36 Linden Place, which is asking $5.8 million, has approved plans for a 40-room hotel. And finally, the commercial property at 35-22 Linden Place, which has 15,188 buildable square feet, will be delivered vacant. It is asking $4.95 million. Stephen Preuss of Massey Knakal Realty Services is handling the assignment.
Union Square mixed-use building on the market for $24M A four-story walk-up building anchored by international footwear retailer GEOX in Union Square is on the market with an asking price of $24 million. The 862 Broadway 7,000-square-foot property, located at 862 Broadway between East 17th and 18th streets, comes with 11,200 square feet of unused air rights for future development. The second floor of the building is tenanted by yoga studio Prana Yoga, and the upper two floors consist of loft apartments. Adelaide Polsinelli of Eastern Consolidated is marketing the property.
Landowners look to double their money in LIC In a sign of the increasing demand for Long Island City development sites, a large parcel in the Court Square area hit the market last month with a $23.5 mil27-21 44th Drive lion price tag, according to Brookfield Financial, the brokerage tapped to sell the property. The owner of the site, at 27-21 44th Drive at the corner of Purves Street, paid less than $10 million to assemble it, according to public records. The parcel, which is currently vacant, is comprised of three adjoining lots and could support a residential project of up to 114,000 square feet, said Brookfield’s Ron Solarz, who is listing the property along with colleagues Eric Anton and Eric Weinberg.
Tribeca multifamily building asking $15M A five-story apartment building at 190A Duane Street is on the market with an asking price of $15 million. The corner property, which has an alternate address of 323A Greenwich Street, contains four tenanted, free-market apartments and a commercial space on the ground floor, which is occupied by Italian eatery Roc Restaurant. The 10,065-square foot building — which includes a 2,300-square-foot basement — also has an unused elevator shaft, where an elevator can be installed to convert the property from a walk-up. Douglas Elliman’s Leonard Bromberg and Anna Vinogradskala are handling the assignment. Compiled by Linden Lim
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Deal Sheet summary
The Deal Sheet, on pages 92 to 108, covers transactions from 9/11/13 through 10/10/13. Please submit future deals to deals@therealdeal.com.
Sales
Overview
By type
Property sales 61
Deals Dollars
$1,077,690,000
Financing 11 11
Buildings Aggregate value
Development
7
Development
Hotel
0
Hotel
0.00
Industrial
6
Industrial
19.57
Mixed-use
7
Mixed-use
Multi-family
Transactions
By dollar volume (in millions)
Office Retail
87.43
64.89
Multi-family
249.45
7
Office
560.85
9
Retail
95.50
25
$281,100,000
Leases Office
86
Retail
70
Total
156
Leases square feet Office
1,281,432
Retail
392,277
Total
1,673,709
Office leases Office leases by industry Industry
Leases
Office leases sf by industry
Top tenant reps for office leasing by sf
Industry
Tenant representative
Advertising & Marketing
4
Advertising & Marketing
Architecture & Design
5
Architecture & Design
Construction
2
Consulting
4
Square feet leased 68,409
Square feet leased
Newmark Grubb Knight Frank
261,847
17,073
CBRE Group
220,350
Construction
24,537
Jones Lang LaSalle
173,375
Consulting
26,862
Cushman & Wakefield
86,592 56,764
Fashion*
10
Fashion*
73,380
Avison Young
Financial
12
Financial
107,766
Sinvin Real Estate
45,343
Food & Beverage
2
Food & Beverage
13,620
Tarter Stats O'Toole
26,560
Government
1
Government
48,163
Adams & Co.
23,911
Health & Beauty
2
Health & Beauty
20,439
Studley
22,861
Legal
4
Legal
500,411
Hidrock Realty
15,439
Media
3
Media
Capstone Realty
14,500
Medical
3
Cassidy Turley
12,199
18
Other
Medical
15,954 113,254
Other
87,938
New York Realty Group
6,029
Real Estate
5
Real Estate
111,178
Metro Manhattan Office Space
6,000
Science & Technology
9
Science & Technology
48,798
Sanchez Bodden Lerner
5,000
Travel
2
Travel
Cresa New York
4,725
3,650
Retail leases Top tenant reps for leasing by sf
Retail leases by industry
Broker
Education
Square feet leased
Retail leases sf by industry 2
Education
53,772
Fashion
15
Fashion
39,728
Newmark Grubb Knight Frank
53,958
Food & Beverage
29
Food & Beverage
116,163
Welco Realty
52,252
Health & Beauty
6
Health & Beauty
39,826
RKF
27,872
Home Furnishings
3
Home Furnishings
71,000
Sinvin Real Estate
24,604
Other
Other
71,788
Crown Retail Services
22,500
Cushman & Wakefield
19,778
CBRE Group
100,000
The Dartmouth Co.
15,200
Estreich & Company
10,000
Ripco Real Estate
10,000
M.C. O'Brien
9,350
Exit Realty Landmark
6,000
PD Properties
6,000
(*includes showroom space)
15
www.www.TheRealDeal.com November 2013 91
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 9/11/13 to 10/10/13. Please submit future deals to deals@therealdeal.com.
Office leases Address
Size
Tenant / Representative
Landlord / Representative
Notes
1 Battery Park Plaza
226,416
Hughes, Hubbard & Reed / N. Goldmacher, C. Mongeluzo, M. Weiss, Newmark Grubb Knight Frank
Rudin Management / Represented in-house
The law firm signed a 20-year lease renewal for the entire 10th through 18th floors and parts of the seventh floor and basement.
1221 Sixth Ave
190,000
Mayer Brown / R. Flippin, A. Sussman, A. Dattoma, L. Crowley, CBRE
The Rockefeller Group / n/a
The global law firm signed a long-term lease. The tenant plans to build out the new space by the end of 2014.
111 Eighth Ave
98,913
Beth Israel Medical Center / R. Martin, B. Winter, Jones Lang LaSalle
Google / M. Weir, Taconic Investment Partners; K. Rapp, D. Hollander, D. Lehman, CBRE
The hospital signed a 15-year lease extension for an outpatient cancer care facility.
25 Broadway
86,000
WeWork / Derrick Ades, WeWork
n/a / R. Levine, G. Kamenetsky, B. Surry, S. Siegel, CBRE
The collaborative workspace provider signed a 20-year lease on the entire ninth and 10th floors.
125 Park Ave
56,764
Meister Seelig & Fein LLP / Jason Meister, Avison Young
SL Green / D. Falk, B. Waterman, P. Shimkin, D. Levine, J. Tootell, Newmark Grubb Knight Frank
The law firm signed a new, 15-year lease to occupy the buildingâ&#x20AC;&#x2122;s seventh and eighth floors.
11 West 19th St
52,000
Tory Burch / C&W
Epsilon Interactive / S. Bellwood, J. Boyle, Cassidy Turley
The fashion company signed a sublease and a direct lease with the landlord, 11 West 19th Associates, bringing its total occupancy in the building to 130,000 square feet. Bob Savitt of Savitt Partners represented the landlord in the direct lease.
315 Hudson St
48,163
U.S. General Services Administration / n/a
Jack Resnick & Sons / n/a
The federal agency signed a lease renewal for office space.
767 Fifth Ave
38,100
Reservoir Capital / n/a
General Motors Company / L. Desatnick, P. Riguardi, C. Wasserberger, A. Tener, Jones Lang LaSalle
The investment firm subleased the entire 16th floor of the Boston Propertiesowned General Motors Building.
32 Sixth Ave
36,845
Dentsu Holdings USA / A. Chudnoff, S. Vinett, Jones Lang LaSalle
n/a / Robert Steinman, Rudin Management
The Japanese advertising and public relations company signed an expansion lease for the entire 20th floor. The tenant now occupies about 220,000 square feet at the building.
1185 Sixth Ave
27,231
Murphy & McGonigle / D. Levine, D. Falk, Newmark Grubb Knight Frank
SL Green / G. Rosen, H. Tenenbaum, SL Green
The law firm signed a 10-year lease.
810 Seventh Ave
22,437
Dragados USA / Marc Miller, Murray Hill Properties
n/a / Barry Zeller, C&W
The contractor signed a 15-year lease on the ninth floor.
685 Third Ave
22,372
Integrated Corporate Relations / Kevin Daly, C&W
TIAA-CREF / Z. Freeman, A. Dattoma, H. Fiddle, P. Amrich, CBRE
The financial communications consultancy signed a 10-year lease for the entire second floor, the New York Observer reported.
1375 Broadway
15,439
Tarte Cosmetics / Robert Kaplan, Hidrock Realty
n/a / E. Meyer, M. Meyer, M. Thomas, Colliers International
The cosmetics company signed a lease on the eighth floor.
1407 Broadway
13,701
Gogotech II LLC / Joseph Friedman, Murray Hill Properties
n/a / Jessica Kosaric, Kaufman Leasing Company
The tenant signed a 10-year lease on the fourth floor.
330 Fifth Ave
13,586
Brightroll Inc. / Paul Ferraro, Jones Lang LaSalle
Shulsky Properties / Alan Bonett, Adams & Co.
The digital video advertising company signed a new, 10-year lease. The reported asking rent was $43 per square foot.
330 Fifth Ave
13,586
NiCE, Nicosia Creative Expresso / C. Lemle, N. Zarnin, Studley
Shulsky Properties / Alan Bonett, Adams & Co.
The creative agency signed a new, 11-year lease. The reported asking rent was $43 per square foot.
202 Canal St
13,276
Industrial and Commercial Bank of China USA / n/a
Keystone Equities / n/a
The bank leased office space.
1140 Sixth Ave
12,750
Starwood Property Trust / R. Martin, G. Ohls, M. Felice, Jones Lang LaSalle
Blackstone Group LP / D. Neye, D. Wassel, Jones Lang LaSalle; J. Kanfer, Equity Office Properties
The commercial mortgage REIT signed a lease for the entire fifth floor.
1140 Sixth Ave
12,750
CityMD / S. Li, S. Seiler, CBRE
Blackstone Group LP / D. Neye, D. Wassel, Jones Lang LaSalle; J. Kanfer, Equity Office Properties
The urgent care provider signed a lease for the entire 11th floor, which will house its New York headquarters.
757 Third Ave
12,199
MPA â&#x20AC;&#x201C; The Association of Magazine Media / Nicola Heryet, Cassidy Turley
n/a / A. Chudnoff, M. Konsker, Jones Lang LaSalle
The trade organization signed a lease for part of the 11th floor.
628 Broadway
11,000
Chobani / C. Owles, T. Etienne, Sinvin Real Estate
628 Broadway LLC / C. Owles, T. Etienne, Sinvin Real Estate
The yogurt company signed a 1.5-year lease on the 11th floor. The reported asking rent was $53 per square foot.
516-530 West 25th St
10,104
Highline / Pamela Title, Murray Hill Properties
n/a / Pamela Title, Murray Hill Properties
The tenant signed a five-year lease on the third, seventh and penthouse floors.
230 West 38th St
10,000
Icon Trading / Elliot Warren, Kaufman Organization
n/a / K. Caseley, A. Udis, ABS Partners
The e-commerce company signed a nine-year lease. The reported asking rent was $28 per square foot.
52 Vanderbilt Ave
9,275
Shazam Media Services / E. Margolin, L. Leighton, G. Marans, Studley
Brause Realty / L. Desatnick, F. Doyle, A. Tener Petrus, Jones Lang LaSalle; M. Rackoff, D. Brause, Brause Realty
The media engagement tech company signed a lease for the entire 19th floor.
152 West 57th St
9,000
Parkview International / Silvio Petriello, CBRE
n/a / M. Leon, Newmark Grubb Knight Frank; P. Sealy, TF Cornerstone
The tenant signed a lease renewal for the entire 58th floor, the New York Observer reported. The asking rent was $120 per square foot, according to the publication.
527 Madison Ave
8,600
Wunderlich Securities / Brian Hay, CBRE
n/a / J. Frederick, P. Occhi, Cassidy Turley
The fixed-income brokerage and financial advisory firm signed a five-year lease on the 10th floor.
1140 Sixth Ave
8,500
Dabroes Management / n/a
Blackstone Group LP / D. Neye, D. Wassel, Jones Lang LaSalle; J. Kanfer, Equity Office Properties
The hedge fund signed a lease for the entire 20th floor. The tenant is relocating from elsewhere in the Bryant Park area.
3 Park Ave
8,424
Cintra Software & Service Inc. / A. Bonett, B. Cohn, Adams & Co.
Cohen Brothers Realty / Represented in-house
The software company signed a new, 10-year lease. The reported asking rent was $55 per square foot.
To view more deals visit our website: www.TheRealDeal.com 92 November 2013 www.TheRealDeal.com
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Office leases continued Address
Size
Tenant / Representative
Landlord / Representative
Notes
527 Madison Ave
8,200
Long Pond Capital / Daniel Madison, Newmark Grubb Knight Frank
n/a / J. Frederick, P. Occhi, Cassidy Turley
The hedge fund signed a four-year lease on the 15th floor. The tenant is relocating from 410 Park Avenue.
170 West 23rd St
8,000
Coskun Brothers/Garden of Eden / n/a
Jack Resnick & Sons / n/a
The tenant signed a lease renewal.
527 Madison Ave
8,000
Meru Capital / n/a
n/a / J. Frederick, P. Occhi, Cassidy Turley
The hedge fund signed a six-year lease renewal on the 17th floor.
134 West 26th St
7,200
Technisphere / J. McLaughlin, T. Murtha, Capstone Realty
Dezer Properties / n/a
The broadcast television and A/V equipment supplier signed a lease.
757 Third Ave
6,961
Train, Babcock Advisors LLC / J. Heller, G. Skaler, C&W
n/a / A. Chudnoff, M. Konsker, Jones Lang LaSalle
The investment adviser signed a 10-year, seven-month lease for the entire 27th floor.
263 West 38th St
6,500
AppBoy Inc. / Daniel Lolai, Murray Hill Properties
n/a / S. Galin, P. Newman, Handler Real Estate
The tenant signed a five-year lease for the entire 16th floor.
302 Fifth Ave
6,044
Social Code LLC / Simone Lillian, Sinvin Real Estate
302 Fifth LLC / Dan Breiman, Olmstead Properties
The Internet company signed a seven-year lease on the fourth floor. The reported asking rent was $44 per square foot.
19 West 44th St
6,029
Communications Media / A. Duryea, T. Duryea, New York Realty Group
Deka Immobilien GmbH / B. Winter, B. Korchak, Jones Lang LaSalle
The pharmaceutical media services firm signed a five-year lease for part of the eighth floor.
485 Seventh Ave
6,000
Rosenwasser/Grossman Consulting Engineers / Alan Rosinsky, Metro Manhattan Office Space
n/a / C. O’Toole, J. Mines, Tarter Stats O’Toole
The consulting engineering firm signed a new lease.
28 West 25th St
5,500
Suspect Inc. / Michelle Stone, Sinvin Real Estate
24 West 25 Street Owner LLC / Paul Kotcher, Brickman Associates
The post-production company signed a 10-year lease on the ninth floor. The reported asking rent was $55 per square foot.
1140 Sixth Ave
5,284
King & Grove Hotels / R. Martin, B. Lane, M. Felice, Jones Lang LaSalle
Blackstone Group LP / D. Neye, D. Wassel, Jones Lang LaSalle; J. Kanfer, Equity Office Properties
The hotel company signed a lease for part of the 15th floor.
1140 Sixth Ave
5,284
Bow Street / n/a
Blackstone Group LP / D. Neye, D. Wassel, Jones Lang LaSalle; J. Kanfer, Equity Office Properties
The hedge fund signed a lease for part of the 16th floor.
252 West 37th St
5,259
Construction Risk Partners / John Fitzsimons, C&W
n/a / C. O’Toole, J. Mines, Tarter Stats O’Toole
The construction insurance brokerage firm signed a new lease.
589 Eighth Ave
5,200
AI Media Group / D. O’Donnell, J. Winter, Capstone Realty
n/a / N. Joffee, A. Steinberg, Newmark Grubb Knight Frank
The media company inked a lease for the entire 17th floor.
72 Madison Ave
5,000
Wedding Atelier / Steve Bodden, Sanchez Bodden Lerner
Moinian Group / Represented inhouse
The wedding salon signed a new lease for executive offices and a private showroom.
19 West 44th St
4,725
Science Friday / Michael Plavin, Cresa New York
Deka Immobilien GmbH / B. Winter, B. Korchak, Jones Lang LaSalle
The science public radio talk show signed a seven-year lease for part of the fourth floor.
32 West 39th St
4,650
Rio Apparel Inc. / Sinoer USA Inc. / Brett Maslin, Adams & Co.
32 West 39th Street Associates / Michael Berger, Colliers International
The apparel company signed a new, 10-year lease. The reported asking rent was $35 per square foot.
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Office leases continued Address
Size
Tenant / Representative
Landlord / Representative
Notes
6 East 39th St
4,500
Frank de Biasi Interiors LLC / James Costello, Sinvin Real Estate
6 East 39th St Holdings LLC / Elissa Patterson, EJMB Commercial LLC
The interior design company signed a 10-year, two-month lease on the 10th floor. The reported asking rent was $45 per square foot.
584 Broadway
4,392
Beardwood & Co. Inc. / Michelle Stone, Sinvin Real Estate
584 Broadway LLC / Steve Marvin, Olmstead Properties
The branding firm signed a seven-year lease on the eighth floor. The reported asking rent was $59 per square foot.
757 Third Ave
4,344
Laura Pomerantz Real Estate / Laura Pomerantz, Laura Pomerantz Real Estate
n/a / A. Chudnoff, M. Konsker, Jones Lang LaSalle
The commercial real estate firm signed a five-year, three-month lease for part of the 24th floor.
225 West 37th St
4,250
I. Spiewak & Sons / G. Gang, A. Waldman, Tarter Stats O’Toole
n/a / A. Udis, J. Casseley, ABS Partners
The apparel company signed a new office lease.
19 West 44th St
3,964
Forst Consulting and Architecture PLLC / Charles Lawrence, Lawrence Real Estate Enterprises
Deka Immobilien GmbH / B. Winter, B. Korchak, Jones Lang LaSalle
The architectural firm signed a 10-year lease for part of the sixth floor.
250 West 39th St
3,367
Roland Nivelais / A. Waldman, G. Gang, Tarter Stats O’Toole
n/a / C. O’Toole, J. Mines, Tarter Stats O’Toole
The fashion company signed a new long-term lease.
568 Broadway
3,302
Downtown Records LLC / James Costello, Sinvin Real Estate
568 Broadway Property LLC / Bonnie Shapiro, Allied Partners Management
The music company signed a five-year, three-month lease on the seventh floor. The reported asking rent was $60 per square foot.
632 Broadway
3,170
Voxy / Nora Stats, Tarter Stats O’Toole
n/a / Nora Stats, Tarter Stats O’Toole
The tech company renewed its lease.
145 Hudson St
3,000
Indiegogo Inc. / P. Ferraro, D. van der Hayden, Jones Lang LaSalle
Hudson 1928 LLC / Michelle Stone, Sinvin Real Estate
The Internet company signed a three-year lease. The reported asking rent was $60 per square foot.
5 White St
3,000
Raad Studios LLC / n/a
Nur Ashki Jerrahi Community / Steve Rappaport, Sinvin Real Estate
The architectural firm signed a five-year lease on the fourth floor. The reported asking rent was $55 per square foot.
530 Broadway
2,997
Karl Fischer Architects / Michael Higgins, Jones Lang LaSalle
Thor Equities / n/a
The architectural firm signed a lease for the entire ninth floor.
160 Mercer St
2,800
Dallimore & Co. / Simone Lillian, Sinvin Real Estate
Benjamin Partners LLC / Represented in-house
The retail real estate consultants signed a five-year lease with a five-year option. The reported asking rent was $69 per square foot.
13-17 Laight St
2,757
Tribeca Venture Partners / R. Kornblatt, T. Etienne, Sinvin Real Estate
WhiteStar Management Services / Jack Cohen, Colliers International
The venture capital firm signed a three-year lease on the sixth floor. The reported asking rent was $52 per square foot.
537 Eighth Ave
2,700
Hipercept / Helen Demetrious, NYCRS
n/a / Joe McLaughlin, Capstone Realty Advisors
The technology advisory and consulting firm signed a lease for the entire sixth floor.
424 West 33rd St
2,620
Myx Beverage / J. Slade, S. Moore, Tarter Stats O’Toole
n/a / E. Cutler, Newmark Grubb Knight Frank
The beverage company signed a new lease.
227 West 29th St
2,612
Martin Brudnizki Design Studio / Simone Lillian, Sinvin Real Estate
Kew Management / Simone Lillian, Sinvin Real Estate
The design firm signed a three-year lease on the 13th floor. The reported asking rent was $38 per square foot.
511 West 25th St
2,436
Dax Gabler Inc. / James Costello, Sinvin Real Estate
RRERF 25th Street LLC / R. Zimbalist, Co. Murray, CBRE
The fashion firm signed a three-year lease on the sixth floor. The reported asking rent was $52 per square foot.
13 East 37th St
2,400
BLS International USA LLC / Brett Maslin, Adams & Co.
AZN Realty / Michael Nahamias, AZN Realty
The travel company signed a new, five-year lease. The reported asking rent was $40 per square foot.
370 Lexington Ave
2,244
Council for American Culture and Education / Brett Maslin, Adams & Co.
Sherwood 370 Management LLC / Adam Weissleder, Sherwood Properties
The nonprofit signed a new, five-year lease. The reported asking rent was $54 per square foot.
485 Seventh Ave
2,226
NTL Naigai Trans Line (USA) Inc. / C. O’Toole, J. Mines, Tarter Stats O’Toole
n/a / C. O’Toole, J. Mines, Tarter Stats O’Toole
The shipping company signed a lease renewal.
90 John St
2,100
MFM Contracting / Jane Slade, Tarter Stats O’Toole
n/a / Travis Wilson, Newmark Grubb Knight Frank
The contractor signed a new lease.
1430 Broadway
2,100
Mark S. Gottlieb CPA PC / P. Gordon, D. O’Donnell, Capstone Realty
n/a / R. Kramer, K. Kronstadt, Newmark Grubb Knight Frank
The accounting firm signed a lease for part of the ninth floor.
237 West 37th St
1,979
Raman and Oundjian Engineering & Inspection / Brett Maslin, Adams & Co.
MTS Real Estate Owner LLC / Chedvah Rabinovich, MTS Real Estate Owner LLC
The engineering firm signed a new, five-year lease. The reported asking rent was $38 per square foot.
111 West 17th St
1,800
Martone Agency / Stephan Skorecky, AC Lawrence
Pajoet and Otter LLC / Justin McCarthy, Smart City Real Estate
The public relations firm signed a lease. The reported asking rent was $48 per square foot.
250 West 39th St
1,696
Affliction / C. O’Toole, J. Mines, Tarter Stats O’Toole
n/a / C. O’Toole, J. Mines, Tarter Stats O’Toole
The fashion company signed a lease renewal and expanded.
358 Fifth Ave
1,591
Dr. Nicky Bhatia / Brett Maslin, Adams & Co.
BLDG / Joseph Mangiacotti, CBRE
The medical practice signed a new, 10-year lease. The reported asking rent was $49 per square foot.
19 West 44th St
1,540
Benefits Concepts Systems / Represented in-house
Deka Immobilien GmbH / B. Winter, B. Korchak, Jones Lang LaSalle
The benefits consulting firm signed a one-year lease renewal for part of the fourth floor.
250 West 39th St
1,432
East 8th Group LLC / C. O’Toole, J. Mines, Tarter Stats O’Toole
n/a / C. O’Toole, J. Mines, Tarter Stats O’Toole
The apparel company renewed its lease.
73 Spring St
1,400
Dogs Bollocks / Jane Slade, Tarter Stats O’Toole
n/a / Miyad Realty
The research and branding firm signed a new lease.
202 West 40th St
1,350
3rd Avenue Fashion Studio / Brett Maslin, Adams & Co.
n/a / n/a
The fashion company signed a new, five-year lease. The reported asking rent was $35 per square foot.
264 West 40th St
1,350
Robert Graham / Nora Stats, Tarter Stats O’Toole
n/a / Nora Stats, Tarter Stats O’Toole
The apparel company signed an expansion lease.
115 West 30th St
1,250
Skift Inc. / P. Carrillo, R. Buckley, SBC Associates
Justin Management / n/a
The travel media and data company signed a lease.
225 West 35th St
1,210
Reading Partners / Gregory Gang, Tarter Stats O’Toole
n/a / Jeff Nissani, JSN Properties
The nonprofit signed a three-year sublease.
561 Seventh Ave
1,023
LAJ Trading LLC / B. Maslin, B. Cohen, Adams & Co.
n/a / Darell Handler, Handler Real Estate Organization
The tenant signed a new lease. The reported asking rent was $45 per square foot.
133 East 58th St
906
Cubit Corporation / n/a
Jack Resnick & Sons / n/a
The military defense equipment company signed a lease renewal.
To view more deals visit our website: www.TheRealDeal.com 96 November 2013 www.TheRealDeal.com
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Office leases continued Address
Size
Tenant / Representative
Landlord / Representative
Notes
264 West 40th St
890
La Moda / Nora Stats, Tarter Stats O’Toole
n/a / Nora Stats, Tarter Stats O’Toole
The tenant signed a new office lease.
250 West 39th St
849
Psycho Bunny / C. O’Toole, J. Mines, Tarter Stats O’Toole
n/a / C. O’Toole, J. Mines, Tarter Stats O’Toole
The apparel company signed a new lease.
19 West 44th St
820
Joan Boyce / Represented in-house
Deka Immobilien GmbH / B. Winter, B. Korchak, Jones Lang LaSalle
The jeweler signed a three-year lease renewal on the fourth floor.
434 East 72nd St
819
436 Melbra Inc. / n/a
Jack Resnick & Sons / n/a
The tenant signed an office lease.
19 West 44th St
729
Kyobo Life Insurance Co. / Alexander Schwartz, First New York Realty Brokers
Deka Immobilien GmbH / B. Winter, B. Korchak, Jones Lang LaSalle
The life insurance company signed a three-year lease for part of the fifth floor.
118 East 28th St
250
Crossover Consulting Group / Brett Maslin, Adams & Co.
Windsor Management / Matthew Kiamie, Windsor Management
The consulting firm signed a new lease. The reported asking rent was $48 per square foot.
Retail leases Address
Size
Tenant / Representative
Landlord / Representative
Notes
249 West 17th St
60,000
Room & Board / R. Hodos, G. Prager, D. Alesandro, CBRE; N. Kampler, Kampler Advisory Group; T. Hauschild, Tegra Group
Savanna / William Stempel, McDermott Will & Emery
The home furnishings retailer signed a lease for the entire ground, second and third floors.
255 Greenwich St
52,252
Fairway Market / J. Pruger, Newmark Grubb Knight Frank; A. Cooperman, Welco Realty
Jack Resnick & Sons / n/a
The supermarket chain signed a lease for a new location. The space consists of 10,000 square feet on the ground floor and 40,000 square feet on the lower level. The reported asking rent was $300 per square foot on the ground and $75 per square foot on the lower level.
118-35 Queens Blvd (Queens)
40,000
Plaza College / Roy Chipkin, CBRE
Muss Development / K. Siegel, B. Korchak, K. Crennan, Jones Lang LaSalle
The school signed a long-term lease for part of the ground floor and the entire second floor of Forest Hills Tower, an office building.
1245 Fulton St
22,500
Planet Fitness / Richard Chera, Crown Retail
Infinity Real Estate LLC / Zach Mishaan, Winick Realty
The fitness chain net leased a free-standing building. The space consists of 7,500 square feet each on the ground floor, second floor and basement.
202 Canal St
16,797
Industrial and Commercial Bank of China USA / n/a
Keystone Equities / n/a
The bank signed a new 15-year retail lease.
445 Fifth Ave
15,500
Charming Charlie / J. Ezra, G. Covey, J. Lapat, RKF
Thor Equities / Represented in-house
The fashion accessories retailer signed a lease for its first Manhattan store.
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Retail leases continued Address
Size
Tenant / Representative
Landlord / Representative
Notes
585 Hudson St
15,200
Mrs. Greens Natural Market / J. Mastromonaco, F. Kemerling, The Dartmouth Co.
Left Bank Apt. Corp. / S. Teplitz, R. Abrams, D. Mandel, P. Weisman, Lansco Corp.
The food market signed a lease.
100 Church St
13,772
Trinity Parish Preschool / Carri Lyon, C&W
SL Green / RKF
The preschool signed a lease. The tenant will relocate from 68 Trinity Place.
450 East Fordham Rd (The Bronx)
10,000
Party City / Len Novick, Estreich & Company
Chase Enterprises / P. Ripka, M. Mahony, Ripco Real Estate
The party goods chain signed a 10-year lease for a new location.
612 Westchester Ave (The Bronx)
10,000
Deal$ by Dollar Tree / M. Mahony, R. Senior, E. Bukai, Ripco Real Estate
Bergen Hub LLC / M. Mahony, R. Senior, E. Bukai, Ripco Real Estate
The discount chain signed a 10-year lease for a new location.
232 West 25th St
10,000
Michael Dawkins Home / Sarah Shannon, Sinvin Real Estate
Fine Arts NY LLC / M. Thomas, M. Joseph, Colliers International
The home furnishings retailer signed a 15-year lease. The reported asking rent was $165 per square foot.
177 Livingston St (Brooklyn)
7,000
Hanson Place Dental Associates / M.C. O’Brien
Treeline Properties / n/a
The dental practice signed a retail lease.
270 Madison Ave
6,000
Bulee Café / Tony Park, PD Properties
ABS Partners / Hal Shapiro, Winick Realty
The café signed a lease.
20 East 38th St
6,000
Team Coban Muay Thai Studio / H. Urizar, W. Dutton, Exit Realty Landmark
n/a / Gary Dana, Douglas Elliman
The boxing gym signed a 15-year lease with a 10-year option for lower-level retail space. The reported asking rent was $25 per square foot.
210 Joralemon St (Brooklyn)
5,800
YogaWorks / L. Shabtai, M. Kass, Winick Realty
n/a / n/a
The yoga studio signed a lease at the under-construction Brooklyn Heights Plaza for its first Brooklyn location. The new space is set to open in spring 2014.
250 West 39th St
5,718
Café Kabila / C. O’Toole, J. Mines, Tarter Stats O’Toole
n/a / C. O’Toole, J. Mines, Tarter Stats O’Toole
The restaurant signed a lease extension.
2960 Victory Blvd (Staten Island)
4,857
Circle Urgent Care / n/a
n/a / M. Schneider, P. Massey, Massey Knakal
The urgent-care facility signed a lease.
111 Fourth Ave
4,452
Jerry’s Artarama / Steve Rappaport, Sinvin Real Estate
Fourth Avenue Owners Corp. / G. Gang, C. O’Toole, Tarter Stats O’Toole
The art supplies retailer signed a 10-year lease. The reported asking rent was $110 per square foot.
420 86th St (Brooklyn)
4,000
Wendy’s / n/a
n/a / H. Dweck, M. Utreras, Newmark Grubb Knight Frank
The fast-food chain signed a lease for a new location. The space consists of 2,000 square feet on the ground floor and 2,000 square feet on the second level.
279 Church St
4,000
Baked / Alex Turboff, BCD
n/a / J. Famularo, R. Idnani, NYCRS
The bakery signed a 10-year lease.
2689 Broadway
3,929
Bellmarc Realty / n/a
n/a / J. Gilbert, J. Hafen, J. Lack, Newmark Grubb Knight Frank
The real estate brokerage signed a retail lease.
35 East 21st St
3,700
Mexican Hospitality Operator LLC / C. Owles, M. Talpalar, Sinvin Real Estate
LF Gramercy Property Co. LLC / C. Owles, M. Talpalar, Sinvin Real Estate
The restaurant signed a 15-year lease. The reported asking rent was $135 per square foot.
245 West 17th St
3,656
Flywheel Sports / Peter Whitenack, RKF
Savanna / A. Zhen, J. Roseman, Newmark Grubb Knight Frank
The cycling studio signed an 11-year lease.
166 Chambers St
3,436
TD Bank / J. Podell, C. Stanton, I. Lerner, C&W
Greenwich Pooh LLC / Christopher Owles, Sinvin Real Estate
The bank signed a 20-year lease with two five-year options. The reported asking rent was $200 per square foot.
286-288 Lenox Ave
3,285
Notar Jazz Club / n/a
n/a / J. Gilbert, C. Greene, Newmark Grubb Knight Frank
The jazz club signed a retail lease.
1131 Third Ave
3,160
Carlo Pazolini / K. Bellantoni, B. Rosen, RKF
Vornado / Represented in-house
The European shoe and accessories brand signed a long-term lease for a new location.
104 Fifth Ave
3,150
Intimacy / Stacey Kelz, Stacey-Robins Realty Corp.
n/a / F. Consolo, J. Aquino, Douglas Elliman
The lingerie shop signed a 10-year lease for multi-level space.
555 Madison Ave
3,056
Carlo Pazolini / K. Bellantoni, B. Rosen, RKF
Rodney Corporation / S. Soutendijk, A. Schmerzler, C&W
The European shoe and accessories brand signed a long-term lease for a new location.
265 Madison Ave
2,615
Pret-A-Manger / n/a
n/a / G. Gropper, J. Roseman, Newmark Grubb Knight Frank
The sandwich chain signed a lease for a new location. The reported asking rent was $250 per square foot.
410 West 14th St
2,500
Carlo Pazolini / K. Bellantoni, B. Rosen, RKF
Amcojor Realty Corp. / K. Bellantoni, R. Futterman, RKF
The European shoe and accessories brand signed a long-term lease for a new location.
485 Seventh Ave
2,450
Caffe Bene / n/a
Eretz Group / J. Podell, B. Singer, C&W
The café signed a 10-year lease for a new location.
344-346 West 14th St
2,315
Super Runners Shop / n/a
n/a / Jay Gilbert, Newmark Grubb Knight Frank
The sportswear retailer signed a lease.
480 Broome St
2,250
Sass & Bide / M. Glanzberg, S. Shannon, Sinvin Real Estate
Listing Realty Associates / C. Owles, S. Lillian, Sinvin Real Estate
The fashion retailer signed a seven-year lease. The reported asking rent was $160 per square foot.
458 Broome St
2,200
Other Criteria LTD / Margie Sarway, Sinvin Real Estate
Terra Broome Street LLC / Jane McVerry, Atria Properties
The art dealer signed a 10-year lease with a 10-year option. The reported asking rent was $250 per square foot.
111 Fulton St
2,120
Bareburger / n/a
n/a / Ross Kaplan, Newmark Grubb Knight Frank
The burger chain signed a lease for a new location. The reported asking rent was $125 per square foot.
412 West 13th St
2,007
Doyle & Doyle / John Cinosky, ATCO Brokerage Services
Epic W12 LLC / C. Owles, S. Shannon, Sinvin Real Estate
The jeweler signed a 10-year, four-month lease. The reported asking rent was $262 per square foot.
175 Orchard St
2,000
Whynot Coffee / J. Maksimova, M. Watts, Keller Williams NYC
SAS Management Inc. / J. Maksimova, M. Watts, Keller Williams NYC
The coffee shop signed a lease.
38-42 East 8th St
1,650
Soho Tiffin / Maria Fernandez, NYCRS
n/a / I. Donath, H. Demetrious, NYCRS
The restaurant signed an eight-year lease.
257 Park Ave South
1,500
EXKi / S. Soutendijk, N. Beausillon, C&W
n/a / Randall Briskin, Jeffrey Management Corp.
The restaurant signed a long-term lease.
1089 Madison Ave
1,450
n/a / n/a
n/a / Jill Lovatt, Massey Knakal
A shoe store leased retail space.
1732 Sheepshead Bay Rd (Brooklyn)
1,400
Cellular Holdings Group Inc. / APE Realty
Lane Properties / M.C. O’Brien
The computer and mobile device repair company signed a lease.
1730 Sheepshead Bay Rd (Brooklyn)
1,350
Woman’s Fantasy / M.C. O’Brien
Lane Properties / M.C. O’Brien
The lingerie shop signed a lease.
266 West 23rd St
1,300
Red Mango / n/a
n/a / M. Frankel, M. Utreras, Newmark Grubb Knight Frank
The frozen yogurt chain signed a lease for a new location. The reported asking rent was $150 per square foot.
1565 Second Ave
1,200
Agora / n/a
n/a / J. Gilbert, J. Hafen, Newmark Grubb Knight Frank
The restaurant signed a lease.
570 West 235th St (The Bronx)
1,200
Dunkin’ Donuts / Kristy Schunk, Besen Retail
n/a / M. Mager, K. Schunk, Besen Retail
The coffee chain signed a 10-year lease for a new location.
2623 Atlantic Ave (Brooklyn)
1,200
Walter Bayne / n/a
Miguel Coll / M.C. O’Brien
The deli signed a lease.
100 November 2013 www.TheRealDeal.com
Retail leases continued Address
Size
Tenant / Representative
Landlord / Representative
Notes
112 Wooster St
1,152
LXR Co. / M. Kapnick, B. Stiegler, SRS Real Estate Partners
108-114 Wooster Street Corp. / M. Kapnick, B. Stiegler, SRS Real Estate Partners
The fashion accessories reseller signed a lease for a pop-up store.
217 Columbus Ave
1,100
Maje / n/a
n/a / Elliot Resnick, Newmark Grubb Knight Frank
The fashion retailer signed a lease. The reported asking rent was $400 per square foot.
19 West 44th St
1,070
Chris Hair Cutters / Josh Goldman, C&W
Deka Immobilien GmbH / B. Winter, B. Korchak, Jones Lang LaSalle
The barbershop signed a one-year lease renewal for part of the ground floor.
493 Sixth Ave
1,025
Kikkerland / n/a
n/a / J. Gilbert, J. Hafen, Newmark Grubb Knight Frank
The gadget retailer signed a lease.
2366 Flatbush Ave (Brooklyn)
1,000
Homestyle Furniture / M.C. O’Brien
TGTM Realty / M.C. O’Brien
The furniture shop signed a lease.
10 Columbia Pl (Brooklyn)
1,000
Vinegar Hill Veterinary / Raymond Harari, CPEX Real Estate
Joralemon Realty NY LLC / n/a
The veterinary office leased retail space.
101 Metropolitan Ave (Brooklyn)
945
n/a / n/a
n/a / Andrew Clemens, Massey Knakal
An apparel store signed a lease.
210 Bedford Ave (Brooklyn)
880
Juice Generation / B. Birnbaum, M. Cohen, Newmark Grubb Knight Frank
Savanna / G. Horovits, H. Dweck, A. Zhen, Newmark Grubb Knight Frank
The juice bar signed a lease. The reported asking rent was $275 per square foot.
141 Eighth Ave
826
Boom Sushi / B. Birnbaum, J. Roseman, M. Utreras, Newmark Grubb Knight Frank
n/a / n/a
The sushi restaurant signed a lease. The reported asking rent was $225 per square foot.
181 Columbus Ave
800
Sandro / n/a
n/a / Elliot Resnick, Newmark Grubb Knight Frank
The fashion retailer signed a lease. The reported asking rent was $600 per square foot.
357 Atlantic Ave (Brooklyn)
800
Atelier Cologne / n/a
n/a / G. Horovits, H. Dweck, J. Pruger, Newmark Grubb Knight Frank
The cologne shop signed a lease. The reported asking rent was $120 per square foot.
64 Seventh Ave
750
UmaNY1 LLC / Steve Rappaport, Sinvin Real Estate
Mardan Realty Co. LLC / Steve Rappaport, Sinvin Real Estate
The restaurant signed a 12-year lease. The reported asking rent was $224 per square foot.
141 Eighth Ave
735
Subway / n/a
n/a / B. Birnbaum, J. Roseman, M. Utreras, Newmark Grubb Knight Frank
The sandwich chain signed a lease. The reported asking rent was $225 per square foot.
261-271 11th Ave
715
Haute So Sweet / Deborah Stewart, NYCRS
n/a / P. Pachios, C. Flag, Waterfront New York Realty Corp.
The bakery signed a lease.
2175 Broadway
700
Mille Feuille Bakery / T. Vieuille, F. Peyrot, City Square Group
n/a / Z. Winkler, D. Abrams, RKF
The bakery signed a lease.
1030 Amsterdam Ave
700
Insomnia Cookies / n/a
n/a / J. Gilbert, J. Hafen, Newmark Grubb Knight Frank
The bakery signed a lease.
225 Liberty St
652
Olive’s / Christopher Owles, Sinvin Real Estate
WFP Retail Co. LP / Stephen Plourde, McDevitt Company
The restaurant signed a 10-year lease at Brookfield Place.
235 West 12th St
600
Mother’s Ruin / Max Talpalar, Sinvin Real Estate
n/a / T. Vieuille, F. Peyrot, City Square Group
The bar signed a lease.
655 Madison Ave
600
Kara Ross / Laura Pomerantz, Pomerantz Real Estate
Plaza Associates LLC / A. Roos, M. Cohen, Colliers International
The women’s handbag and accessories retailer signed a long-term lease.
100 Wall St
600
Gregory’s Coffee / n/a
Savanna / Steven Baker, Winick Realty
The coffee shop signed a lease.
237 East 53rd St
500
Insomnia Cookies / n/a
n/a / J. Gilbert, J. Hafen, Newmark Grubb Knight Frank
The bakery signed a lease.
116 Macdougal St
400
Insomnia Cookies / n/a
n/a / J. Gilbert, J. Hafen, Newmark Grubb Knight Frank
The bakery signed a lease.
436 Broadway
400
Moleskine America Inc. / Richard Seligman, Retail Advisors Inc.
436 Realty LLC / C. Owles, S. Shannon, Sinvin Real Estate
The notebook retailer signed an eight-year lease. The reported asking rent was $650 per square foot.
355 Atlantic Ave (Brooklyn)
400
Joy Gryson Handbags / n/a
n/a / G. Horovits, H. Dweck, J. Pruger, Newmark Grubb Knight Frank
The fashion accessories retailer signed a lease. The reported asking rent was $120 per square foot.
Buys Address
Size
Buyer / Representative
Seller / Representative
Notes
140 West St
Top 21 floors of office bldg
Magnum Real Estate Group / n/a
Verizon / n/a
The upper portion of the building sold for $274 million, Crain’s reported. The buyer plans to convert those floors to residential condos, according to the publication. Verizon will retain the bottom 10 floors.
295 Madison Ave
46-story, 330,000 sf office bldg
Eretz Group / D. Greene, N. Sturner, Murray Hill Properties
Westbrook Partners / Adam Spies, Eastdil Secured
The property sold for $213 million.
Kips Bay portfolio
7 apt. bldgs, 146 units total
n/a / Yosef Katz, GFI Realty
n/a / Barak Jacobov, GFI Realty
The package of contiguous apartment buildings sold for $71.5 million. The properties are located at 489, 493 and 495 Third Avenue, and 203, 205, 207 and 211 East 33rd Street. In addition to the residential units, the buildings have a combined eight stores.
202 Canal St
9-story, 47,551 sf office bldg
Keystone Equities / Represented in-house
Bank of East Asia / H. Hwang, N. Rockett, C&W
The property sold for $41.25 million.
202 8th St
12-story apt. bldg, 51 units total
n/a / n/a
n/a / Bob Knakal, Massey Knakal
The property sold for $37.75 million, or $915 per square foot.
448-452 11th Ave
Development site
David Marx / n/a
Lehman Brothers Holdings / A. Scandalios, J. Cruz, J. Julien, K. O’Hearn, HFF
The development site sold for $35 million.
351-353 Canal St
5-story mixed-use bldg
351 Canal LLC / P. Carillo, A. Erdos, P. Nigido, Eastern Consolidated
Tunnel Holdings LLC / P. Carillo, A. Erdos, P. Nigido, Eastern Consolidated
The property sold for $24.75 million.
To view more deals visit our website: www.TheRealDeal.com 102 November 2013 www.TheRealDeal.com
WELCOMEELLIMAN © 2013. Douglas Elliman Real Estate.
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Douglas Elliman is proud to welcome
maria babaev
From Long Island’s Gold Coast to Manhattan’s Wall Street, Maria Babaev is widely recognized as a leading expert on global market trends. Through her strong international portfolio of buyers and sellers and her unique ability to navigate the complex global market, Maria emerged as one of the top producers in the region. Now with offices in both New York and the North Shore, she’s putting the power of Elliman to work for her, and for you.
Buys continued Address
Size
Buyer / Representative
515 West 29th St
32,000 sf comm. bldg
Antares / n/a
Continental Worsteds / Nathaniel Christian, Nathaniel Christian Group
The property sold for $24.35 million. There are approved plans attached to the building for conversion to residential use on the second to sixth floors.
351-357 West 45th St
88-unit apt. bldg
n/a / n/a
Dalan Management; Standard Property Company / Aaron Jungreis, Rosewood Realty
The property sold for $22 million.
2400 Broadway
8,918 sf retail condo
Samson Management / Represented in-house
Madison Capital / Y. Oelsner, G. Tolchin, R. Baxter, Jones Lang LaSalle
The retail condo sold for $21 million. The unit is located on the ground floor of the Merrion, a luxury residential condo.
108-22 Queens Blvd (Queens)
2-story, 48,400 sf retail bldg
Lloyd Goldman; Eric Roth; Brian Ezratty / n/a
Federal Realty Investment Trust / David Robinov, Ackman-Ziff
The Midway Theater retail property sold for $20.5 million.
455 Hudson St
26,400 sf mixed-use bldg
Benchmark Real Estate Group / n/a
n/a / n/a
The property sold for $20 million, or $758 per square foot. The price represents a capitalization rate of 4.5 percent.
902-908 Bedford Ave (Brooklyn)
44-unit apt. bldg
Springhouse Partners / n/a
DelShah Capital / n/a
The property sold for $18.2 million. DelShah purchased the building in 2007 for $15.41 million.
2012-2018 Broadway
6,700 sf retail and medical office space
Madison Realty Management / A. Polsinelli, Eastern Consolidated; R. Khodadadian, Skyline Properties
Lincoln Spencer Apts. Inc. / A. Polsinelli, Eastern Consolidated; R. Khodadadian, Skyline Properties
A 72-year leasehold interest in the retail and medical suites sold in a transaction valued at over $17 million.
4 East 46th St
6-story, 16,000 sf office bldg
UD46 LLC / Tony Park, PD Properties
DJM / D. Schechtman, S. Zimmerman, P. Nigido, Eastern Consolidated
The property sold for $16.4 million, or $1,025 per square foot, to a private Korean-American investor. The buyer plans to utilize the property for personal use.
809-873 Neptune Ave (Brooklyn)
226,814 buildable sf development site
n/a / n/a
n/a / Stephen Palmese, Massey Knakal
The property sold for $15 million.
54-66 Livingston St (Brooklyn)
5 apt. bldgs, 49 units total
n/a / n/a
n/a / S. Palmese, M. Lively, B. Maddigan, Massey Knakal
The properties sold for $13.25 million, or $413 per square foot.
265-273 West 146th St
Five 5-story apt. bldgs, 100 units total
n/a / n/a
n/a / S. Shkury, V. Sozio, M. Tortorici, J. Deutch, M. Agbaba, Ariel Property Advisors
The properties sold for $11.1 million.
353-355 West 48th St
23,219 sf storage bldg
n/a / M. Rose Yawitz, B. Tapper, Eastern Consolidated
n/a / A. Polsinelli, M. Avital, Eastern Consolidated
The property sold for $11 million.
123 Lafayette St
6-story office bldg
Stellar Mgmt / HPNY
n/a / Marcus & Millichap
The elevator loft building sold for $10.85 million.
315 Seventh Ave
3,500 sf retail condo
n/a / HPNY
n/a / HPNY
The property sold for $9.3 million.
127 Seventh Ave
3,513 sf retail condo
127 Seventh Avenue Associates LLC / J. Fishman, J. Butwin, R. Goldman, A. Jacobs, RKF
The property sold for $8.7 million.
hr15890_RELaw_9.5x6.75.pdf
2/26/13
127 Seventh Holdings LLC / J. Fishman, J. Butwin, R. Goldman, A. 10:45:52 Jacobs,AM RKF
Seller / Representative
Notes
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Buys continued Address
Size
Buyer / Representative
770 and 780 Garden St (The Bronx)
Two 6-story apt. bldgs, 113 units total
n/a / n/a
n/a / K. Brumback, B. Knakal, D. Simone, Massey Knakal
The contiguous properties sold for $8.7 million, or $90 per square foot.
529 Third Ave
Development site
304 LLC / Robert Klein, Kalmon Dolgin Affiliates
n/a / Robert Klein, Kalmon Dolgin Affiliates
The assemblage of six interconnected buildings sold for $7.25 million. The buyer plans to develop the space into more than 60,000 square feet of office and retail space.
475 Ocean Ave (Brooklyn)
6-story, 54,854 sf apt. bldg, 47 units total
n/a / Josh Orlander, GFI Realty
n/a / Josh Orlander, GFI Realty
The property sold for $7.05 million. The price represents a gross rent multiple of 12.
781 Eighth Ave
4-story, 9,000 sf mixed-use bldg
781 Eighth Avenue Owner LLC / Brandon Eisenman, RKF
City Knickerbocker Lighting / J. Krivine, D. Karr, Newmark Grubb Knight Frank; L. Kerman, LK Allen Inc.
The property sold for $6.85 million, or about $760 per square foot.
159-161 West 85th St
20-unit apt. bldg
Infinity Group / Matthew Garcia, Besen & Associates
Folk Partners / Matthew Garcia, Besen & Associates
The property sold for $6.75 million.
150 Myrtle Ave (Brooklyn)
11,000 sf retail condo
n/a / O. Cohen, M. Dibella, G. Bailey, TerraCRG
n/a / O. Cohen, M. Dibella, G. Bailey, TerraCRG
The ground-floor retail condo sold for $6.75 million, or $614 per square foot. The space is occupied by supermarket Metropolitan City Market.
93-97 Waverly Ave (Brooklyn)
Two 5-story apt. bldgs, 17 units total
n/a / n/a
n/a / Stephen Palmese, Massey Knakal
The walk-up buildings sold for $6.5 million, or $543 per square foot.
110 East 42nd St
10,400 sf garage condo
n/a / n/a
n/a / B. Knakal, J. Ciraulo, Massey Knakal
The property sold for $5.6 million, or $538 per square foot. The price represents a capitalization rate of 5.5 percent.
216 and 218 East 36th St
3 apt. bldgs, 20 units total
n/a / n/a
Zareno Limited Partnership / A. Polsinelli, P. Nigido, Eastern Consolidated
The properties sold for $5.6 million.
228 Thompson St
4-story, 10,000 sf mixed-use bldg
n/a / HPNY
n/a / HPNY
The property sold for $5.5 million.
950 Columbus Ave
5-story apt. bldg, 14 units total
n/a / Jeffrey Tanenbaum, Halstead
n/a / S. Shkury, V. Sozio, M. Tortorici, J. Deutch, M. Agbaba, Ariel Property Advisors
The property sold for $5.1 million.
88 East 111th St
6-story apt. bldg, 28 units total
n/a / n/a
n/a / S. Shkury, V. Sozio, M. Tortorici, J. Deutch, M. Agbaba, Ariel Property Advisors
The property sold for $5 million.
1661 Park Ave
6-story apt. bldg, 34 units total
n/a / n/a
n/a / S. Shkury, V. Sozio, M. Tortorici, J. Deutch, M. Agbaba, Ariel Property Advisors
The property sold for $4.8 million.
524 East 119th St
6-story apt. bldg, 35 units total
n/a / n/a
n/a / S. Shkury, V. Sozio, M. Tortorici, J. Deutch, M. Agbaba, Ariel Property Advisors
The property sold for $4.5 million.
41 Mercer St
1-story comm. bldg
Waterbridge Capital / n/a
n/a / n/a
The retail building sold for $4.4 million.
612 West 180th St
12,631 sf church bldg
Universal Church / Cesar Portilla, Keller Williams
n/a / V. Sozio, M. Tortorici, J. Deutch, M. Agbaba, Ariel Property Advisors
The property sold for $3.7 million. The property has 25,800 buildable square feet as of right.
87-15 Britton Ave (Queens)
4-story apt. bldg, 16 units total
8715 Britton Avenue LLC / Tamir Daniel,Daniel T Enterprises
Chick-Teri Corp. / Tamir Daniel,Daniel T Enterprises
The property sold for $3.58 million, or $221 per square foot.
148 West 24th St
4,500 sf comm. coop unit
n/a / A. Shmaruk, M. Sherman, Manhattes Group
n/a / B. Emmetsberger, A. Essick, Massey Knakal
The commercial co-op unit sold for $3 million.
41 Henry St
6-story apt. bldg, 20 units total
Silvershore Properties / n/a
41 Henry Realty Inc. / n/a
The property sold for $3 million.
89 East 116th St
5-story apt. bldg, 13 units total
n/a / Ron Cohen, Besen & Associates
89 E116th Street Associates LLC / Ron Cohen, Besen & Associates
The property sold for $2.8 million.
108 South St
4-story mixed-use bldg
n/a / n/a
Silvershore Properties / Nick Petkoff, Massey Knakal
The vacant property sold for $2.78 million, or about $571 per square foot.
632-644 Parkside Ave (Brooklyn)
18,000 sf industrial bldg
n/a / n/a
n/a / Dan Marks, TerraCRG
The property sold for $2.7 million, or $150 per square foot.
134 East 28th St
4-story apt. bldg
n/a / n/a
n/a / John Ciraulo, Massey Knakal
The property sold for $2.6 million, or $756 per square foot.
25-01 36th Ave (Brooklyn)
8,000 sf comm. bldg
n/a / M.C. Oâ&#x20AC;&#x2122;Brien
n/a / M.C. Oâ&#x20AC;&#x2122;Brien
The property sold for $2.35 million.
294-296 East 162nd St (The Bronx)
87,600 buildable sf development site
n/a / n/a
n/a / K. Brumback, D. Simone, Massey Knakal
The property sold for $2.3 million, or $26 per buildable square foot.
150 Myrtle Ave (Brooklyn)
21,780 sf parking garage
n/a / O. Cohen, M. Dibella, G. Bailey, TerraCRG
n/a / O. Cohen, M. Dibella, G. Bailey, TerraCRG
The parking garage at the Toren condo sold for $2.25 million, or $23,000 per parking spot.
58-07/09/11 32nd Ave (Queens)
3 apt. bldgs, 8 units total
n/a / n/a
n/a / T. Donovan, J. Nelson, Massey Knakal
The properties sold for $2.25 million, or about $207 per square foot.
330-334 St. Marks Ave (Brooklyn)
10,000 buildable sf development site
n/a / n/a
n/a / Stephen Palmese, Massey Knakal
The property sold for $2.2 million, or $220 per buildable square foot.
635-639 Classon Ave (Brooklyn)
7,574 sf industrial bldg
n/a / J. Berman, S. Shkury, M. Tortorici, V. Sozio, Ariel Property Advisors
n/a / J. Berman, S. Shkury, M. Tortorici, V. Sozio, Ariel Property Advisors
The property sold for $1.97 million.
890 and 911 Jefferson Ave (Brooklyn)
Two 3-story apt. bldgs
n/a / Joseph Friedman, Besen & Associates
n/a / Jacob Aronov, Besen & Associates
The property sold for $1.75 million.
315 West 112th St
4-story, 3,332 sf vacant apt. bldg
n/a / J. Deutch, V. Sozio, M. Tortorici, Ariel Property Advisors
n/a / J. Deutch, V. Sozio, M. Tortorici, Ariel Property Advisors
The property sold for $1.68 million.
5605 Fourth Ave (Brooklyn)
16-unit apt. bldg
n/a / J. Brennan, E. Lundberg, Marcus & Millichap
n/a / E. Lundberg, J. Brennan, Marcus & Millichap
The property sold for $1.45 million, or about $166 per square foot.
2299 Adam Clayton Powell Jr. Blvd
5-story, 8,585 sf apt. bldg
n/a / V. Sozio, S. Shkury, M. Tortorici, J. Deutch, D. Tropp, Ariel Property Advisors
n/a / V. Sozio, S. Shkury, M. Tortorici, J. Deutch, D. Tropp, Ariel Property Advisors
The property sold for $1.41 million.
148 Hinsdale St (Brooklyn)
15,784 sf industrial bldg
n/a / n/a
n/a / Dan Marks, TerraCRG
The property sold for $1.35 million, or $85 per square foot.
8 East 132nd St
13,988 buildable sf development site
n/a / n/a
n/a / R. Shapiro, L. Kimayagarov, Massey Knakal
The property sold for $1.33 million, or about $95 per buildable square foot.
80 2009 www.TheRealDeal.com 106July November 2013 www.TheRealDeal.com
Seller / Representative
Notes
Sam’s been busy getting deals done.
Give him a call at: 212-409-1259
We’re with you.
Now open in NY | www.bankunited.com BankUnited, N.A. Member FDIC
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Buys continued Address
Size
Buyer / Representative
Seller / Representative
Notes
105 Ralph Ave (Brooklyn)
3-story mixed-use bldg
n/a / n/a
n/a / Michael Amirkhanian, Massey Knakal
The property sold for $1.31 million, or about $397 per square foot. The price represents a capitalization rate of 6.9 percent.
479 Baltic St (Brooklyn)
5,000 sf industrial bldg
n/a / Dan Marks, TerraCRG
n/a / Dan Marks, TerraCRG
The property sold for $1.3 million, or $260 per square foot.
893 Bergen St (Brooklyn)
7,021 sf industrial bldg
n/a / M. DiBella, D. Marks, P. Matheos, M. Hernandez, TerraCRG
n/a / M. DiBella, D. Marks, P. Matheos, M. Hernandez, TerraCRG
The property sold for $1.25 million, or $178 per square foot.
426 Bleecker St (Brooklyn)
4-story apt. bldg, 6 units total
n/a / n/a
n/a / Michael Amirkhanian, Massey Knakal
The property sold for $1.13 million, or about $202 per square foot.
Financing Address
Size
Borrower / Representative
Lender / Representative
Notes
400 Fifth Ave
214-room hotel
Great Eagle Holdings / T. McConnell, J. Kelso, C&W
n/a / n/a
A $125 million acquisition loan was provided for the Langham Place Fifth Avenue Hotel. The floating-rate loan was provided by a Singapore-based bank.
160 Fifth Ave
107,000 sf office bldg
RFR Holding LLC / n/a
Citibank / n/a
A $100 million loan was completed to refinance the property, GlobeSt.com reported.
33 Lincoln Rd (Brooklyn)
133-unit apt. bldg
n/a / Preston Flammang, Massey Knakal
n/a / n/a
A $32.1 million construction loan was arranged for the new development.
348-352 West 118th St
6-story apt. bldg, 44 units total
n/a / Angela Ortiz, Besen Capital
n/a / n/a
A $5.5 million loan was arranged to refinance the property.
2714-2718 Bainbridge Ave (The Bronx)
5-story bldg, 54 units total
n/a / Angela Ortiz, Besen Capital
n/a / n/a
A $3.5 million loan was arranged to refinance the property.
325-327 East 206th St
5-story bldg, 47 units total
n/a / Angela Ortiz, Besen Capital
n/a / n/a
A $3.5 million loan was arranged to refinance the property.
300 East 85th St
198-unit apt. bldg
300 E. 85th Housing Corp. / n/a
NCB / n/a
A $3.5 million third mortgage was arranged for the building.
83-84 116th St (Queens)
57-unit apt. bldg
83-84 116th Owners Corp. / n/a
NCB / n/a
A $2.5 million first mortgage was arranged for the building.
600 West End Ave
62-unit apt. bldg
600 West End Avenue Owners Corp. / n/a
NCB / n/a
A $2.1 million third mortgage was arranged for the building.
532 West 111th St
40-unit apt. bldg
532 West Owners Corp. / n/a
NCB / n/a
A $1.4 million first mortgage and a $500,000 line of credit were arranged for the building.
195 James St (Brooklyn)
3-unit brownstone
n/a / Ed Graf, Houlihan-Parnes Realtors
n/a / n/a
A $1.5 million first mortgage was arranged for the newly constructed building.
Other Deals Chinese developer to acquire 70 percent of Atlantic Yards project Forest City Ratner has sold 70 percent of the Atlantic Yards megaproject in Brooklyn, to Shanghai-based developer Greenland Group, Forest City announced last month. The agreement covers both phases of the project but excludes both the Barclays Center and the first residential tower, B2, the statement said. Forest City will manage the day-to-day project activities on behalf of the joint venture. Pricing in the transaction was not disclosed, but in August analysts predicted that the sale of a 50 to 80 percent interest in the project could net Forest City nearly $800 million. (The deal was announced after the deadline for the Deal Sheet.)
Sumitomo expands at 277 Park Avenue in nine-year deal Tokyo-based Sumitomo Mitsui Banking Corporation has inked a deal to add 38,249 square feet to its current sublease from the Hartford, an insurance company, at 277 Park Avenue. Sumitomo, which also recently picked up a space in Brookfield’s 300 Madison Avenue, will pay rent starting at roughly $50 per square foot in a deal through January 2021 for the 15th-floor space, according to CompStak data cited by the New York Observer. The space is part of the Hartford’s 94,331-square-foot sublease from JPMorgan Chase, the Stahl-owned property’s largest tenant, for which it pays in the mid-$60s. (The deal was announced after the deadline for the Deal Sheet.)
Jared Kushner plots $100 million “campuslike” hub in Dumbo Jared Kushner, RFR Realty and LIVWRK Holdings’ plans for the six-property cluster of Dumbo buildings once owned by the Jehovah’s Witnesses will revamp at 80 2009 www.TheRealDeal.com 108July November 2013 www.TheRealDeal.com
least 50 percent of the 1.2 million-square-foot complex into office space. The partners plan to spend $100 million renovating the buildings, making way for 150,000 square feet of retail space, room for up to 5,000 bikes, an outdoor roof space and state-of-the-art internet connectivity. “We saw these buildings as an opportunity to really create a great campuslike environment,” Kushner told the Wall Street Journal last month. Rents at the nouveau tech campus will run in the mid $50s per square foot, people familiar with the matter told the Journal.
Thor Equities grabs more retail along once-seedy Eighth Avenue stretch Thor Equities has made another grab along Eighth Avenue, paying more than $12 million for a retail condominium between 45th and 46th streets. The twostory, 7,000-square-foot retail property at 725 Eighth Avenue includes a basement, ground floor, second level and two mezzanines. The seller, 725 Eighth Avenue Realty, owned the building for more than a decade before putting it on the market for $13 million. The building’s current tenant DVD Depot, which has sold adult films from the spot for more than 10 years but is not expected to remain there, signifies the area’s changing face. Seedy video show and fast food outlets around the neighborhood are increasingly giving way to trendy, upscale tenants. (The deal was announced after the deadline for the Deal Sheet.)
Bloomingdale’s expands Midtown offices at SL Green building Bloomingdale’s is expanding its office presence at SL Green Realty’s 919 Third Avenue with a new 47,000-square-foot-plus lease for the entire sixth floor. The deal will bring the department store giant’s total space
at the building to 204,442 square feet. The asking rent was $65 per square foot, according to SL Green’s director of leasing Steven Durels, who represented the landlord. CBRE Group’s Scott Gottlieb and Michael Laginestra represented Bloomingdale’s. Bloomingdale’s expansion at the building was driven “by the growth of their online business,” Durels told the New York Post. (The deal was announced after the deadline for the Deal Sheet.)
Ashkenazy nabs Soho retail condo for $10M Ashkenazy Acquisition, the Midtown-based real estate firm headed by young mogul Ben Ashkenazy, snapped up a prime Soho retail condominium, a broker involved with the deal told The Real Deal last month. Pittsburghbased landlord and developer Costa Land sold the corner property, the ground floor of 145 Greene Street, at Houston Street, for $9.75 million in an off-market transaction, according to broker David Schechtman. Schechtman and his Eastern Consolidated colleagues Lipa Lieberman and Abie Kassin represented both sides in the deal. (The deal was announced after the deadline for the Deal Sheet.)
Silverstein gets OK for combo hotel condo at 30 Park Place Larry Silverstein’s long-stalled hotel and condominium project at 30 Park Place is set to finally kick off construction, after the developer received new building permits for the site. The 67-story Robert A.M. Sterndesigned tower will rise to 937 feet, making it the architect’s tallest project in the city. A 149-room Four Seasons Hotel will fill the bottom floors and 161 condominiums will start at the 23rd floor, according to the permits spotted by New York YIMBY. There will be several duplex apartments, the permits show, including two half-floor duplexes on floors 62 and 63. TRD
Congratulates The Following DeAl oF The YeAr AwArDS reciPienTS
Rookie of the YeaR Vincent Smith
Rental Deal of the YeaR Don correia & Judy oston
Village Office
West Side Office
w e a re p ro u d to B e t h e F i r m t h at h a s
Won The MosT Deal of The Year aWarDs Ove r t he Last t en Ye ars
See All our Past Awards at halstead.com/awards
Development updates SALES UPDATES
Cobble Hill
The Townhouses of Cobble Hill 118 Congress Street Two of the nine townhouses, developed by JMH Development and Madison Estates & Properties, have been sold. The remaining three-, four- and five-bedroom homes range in size from 3,318 to 4,122 square feet and in price from $3.65 million to $4 million. Amenities include gas fireplaces, roof terraces, private gardens and steam showers. Contact: www.thetownhousesofcobblehill.com.
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Gramercy Park 160 East 22nd Street The 21-story, 81-unit condominium project, developed by Toll Brothers City Living, is 70 percent sold. The studio to three-bedroom units range in size from 550 to 1,535 square feet and in price from $986,990 to $5 million. Building amenities include a childrenâ&#x20AC;&#x2122;s playroom, doorman, fitness center and roof deck. Contact: www.160E22.com.
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Lenox Hill
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The 69-unit condominium, developed by Extell Development and Angelo, Gordon & Co., is now 60 percent sold. The 16:23 buildingâ&#x20AC;&#x2122;s twoto six-bedroom The Carlton House apartments range in size from 1,428 to 5,000 square feet, with a duplex penthouse measuring 9,000 square feet. Prices range from $4.55 million to $65 million. Amenities include a 24-hour doorman, concierge, fitness center with indoor pool, game room, bicycle storage, and refrigerated lobby storage. Contact: www .thecarltonhouse.com.
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The Carlton House 21 East 61st Street
16.10.13
22 Renwick Street Renwick Modern
Renwick Modern
The 12-story, 18-unit condominium is now 80 percent sold. The project was developed by DelShah Capital and On the Level Enterprises, and designed by Philip Johnson Alan Ritchie Architects. Remaining units range in size from 1,388 to 2,702 square feet, and in price from $2.59 to $6.5 million. Amenities include a doorman, bicycle storage and in-unit washer/dryers. Brown Harris Stevens Select is the listing agent. Contact: www.renwickmodern.com.
Turtle Bay 50 United Nations Plaza Sales have launched at the 88-unit condominium, developed by Zeckendorf Development and Global Holdings. Designed by Foster+Partners, the residences range in size from 1,147-squarefoot one-bedroom units to five-bedroom, 5,893-square-foot penthouses. A triplex penthouse measures 50 United Nations Plaza 15,597 square feet. Amenities include a 24-hour doorman, concierge, garden and residents-only garage. Contact: www.50unp.com.
Tribeca Franklin Place 5 Franklin Place The 20-story, 53-unit condominium residence, developed by the El Ad Group, is now 95 percent sold. The remaining threeand four-bedroom apartments range in size from 1,967 to 2,924 square feet and in price from $3.5 to $7.5 million. Building amenities include a 24-hour concierge, roof deck with pool, fitness center, childrenâ&#x20AC;&#x2122;s playroom and on-site parking. Cantor Pecorella is the listing agent. Contact: www.tribecafranklinpl.com.
Upper East Side 230 East 63rd Street 230 East 63rd Street
Sales have launched at the six-unit boutique condominium, developed by 230 East 63rd Street Associates. The projectâ&#x20AC;&#x2122;s two-bedroom units range in size from 1,743 to 2,343 square feet and in price from $3.14 to $4.01 million. Amenities include gas and wood-burning fireplaces, radiant heating, in-unit washer/dryer units and a fitness center. Warburg Realty is the agent. Contact: www.warburgrealty.com. The Charles 1355 First Avenue The 32-story, 27-unit condominium, developed by Bluerock Real Estate, launched sales last month. The full-floor residences range in size from 3,135 to 3,637 square feet, and in price from $5.82 to $10.81 million. The 4,541-square-foot duplex penthouse unit is listed at $16.5 million. Building amenities include a residentsâ&#x20AC;&#x2122; lounge, private storage, fitness center, childrenâ&#x20AC;&#x2122;s playroom, 24-hour doorman and concierge. Town New Development Marketing and Sales is the listing agent. Contact: www.charlesnyc.com. TRD
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This advertisement is not an offering. It is a solicitation of interest in the advertised property. No offering of the advertised units can be made and no deposits can be accepted, or reservations, binding or non-binding, can be made until an offering plan is filed with the New York State Department of Law. This advertisement is made pursuant to Cooperative Policy Statement No. 1, issued by the New York State Department of Law. Sponsor: Brooklyn Pier 1 Residential Owner, L.P. 99 Wall Street, 11th Floor, New York, New York 10005. CPS-1 File No. CP113-0019
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Two-bedroom, two-bath, 1,122-squarefoot unit in condo conversion, the Greenwich Club; apartment has stainless-steel appliances and marble bath; building has 24-hour doorman and concierge, package room, cold storage, roof deck and bike room; common charges $1,215 per month; taxes $1,020 per month; asking price $1.33 million; five months on the market. (Brokers: Katherine Rosbottom, Town Residential; Ashlei Sothard, Prodigy Network) “My clients [the sellers] moved to upstate New York about a year ago to have more space. We were concerned that Hurricane Sandy would deter people from coming to the building, since the gym [was damaged during the storm] and was under construction for a long period of time. We decided to offer a five-year complimentary membership to fitness club Drive495 to eliminate the problem. The buyer chose Apt. 609 because of the layout, the sunlight and the views. Things went very smoothly fulfilling the mortgage, but it did take longer than usual, as we had to wait to get the building’s updated flood insurance policy after Hurricane Sandy.” Katherine Rosbottom, Town
Contact Paul 112 November 2013 www.TheRealDeal.com
646—696—5556
Stephen Love, DSA
Yorkville $3.4 million 1 Gracie Square, Apt. 8W
Greenwich Village $2.52 million 100 West Houston Street, 4th floor
One-bath, 2,200-square-foot loft in a prewar co-op building; unit is a full floor with a private elevator; maintenance $1,448 per month, asking price $2.39 million, 10 weeks on the market. (Brokers: Stephen Love and Michael Gongora, DSA Realty; Rachel Glazer, Brown Harris Stevens)
Big Jobs, Small Jobs, It’s My Job!
renovation] but I was bullish about price — apparently the other brokers undervalued the property because of the renovation cost. As it turned out, the closing price was higher than the asking price. Buyers want to carry out complete renovations and create their own special home, rather than paying for someone else’s taste. I stressed that in all of our marketing, as well as the fact that the ground-floor tenant, a popular restaurant, pays the lion’s share of the building’s expenses, hence the low maintenance. Interest was keen, and we were in a best-and-final situation with four bidders within 10 days of listing the property. Rachel’s clients were extremely motivated. But the contract phase took a long time — we had negotiated an ‘as-is’ deal [where the purchaser agrees to take the apartment in its current state], but the buyers’ attorney slipped in a renovation contingency that threw us for a loop. But we worked everything out. This is a small co-op with only five shareholders, and this transaction was the co-op’s first arm’slength resale since it was formed [in 1987]. The sale brought up certain issues, especially concerning the renovations that the buyers wanted to do, that the board was unprepared to consider. Our client’s daughter was instrumental in getting the board, who had watched her grow up, to address certain issues.”
“The seller’s ex-husband was a music director for the original Saturday Night Live. This loft was the location of numerous cast parties, and the late [comedian] John Belushi was the godfather of the client’s daughter. We had to win the listing in competition with three other firms. [The unit needed a gut
Three-bedroom, two-bath, 3,450-squarefoot unit in prewar co-op building, 1 Gracie Square; apartment has wood-burning fireplace, central air-conditioning and laundry room; building has 24-hour doorman; maintenance $6,686 per month; asking price $3.35 million; 34 weeks on the market. (Brokers: Frances Katzen and Stephanie Hinton, Douglas Elliman; Jonathan Conlon and Patricia Cliff, the Corcoran Group) “Negotiations were stressful. We had multiple bids from two parties happening in a span of 45 minutes, coupled with an owner who was working with an attorney we do not usually deal with. Apparently [the buyers] had missed out on another property by getting outbid. They were anxious to secure this sale, as they really felt this was a good match for their needs and didn’t want to muck about. This was an all-cash deal.” Frances Katzen, Douglas Elliman
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Shvo’s sheep get VIP treatment
The broker-turned-developer curates exhibit of sheep and other whimsical sculptures at Sotheby’s
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ewly anointed real estate developer Michael Shvo welcomed bespectacled art aficionados and stiletto-wearing scenesters late last month to an exhibit at Sotheby’s auction house. The theme of the exhibit? You guessed it — sheep. Shvo’s penchant for the work of the French artist Claude Lalanne — whose epoxy and bronze sheep sculptures also form an ongoing exhibition at his development site at 239 10th Avenue in Chelsea — was evident from the pieces on show. Plenty more sheep were on display, as were bear, rabbit and apple sculptures. The exhibit, dubbed “Les Lalanne: The Poetry of Sculpture,” was co-curated by Shvo and the artist’s New York City dealer Paul Kasmin. Shvo — who with his wife, Seren, has one of the largest collections of Lalanne’s
Michael Shvo and Yuval Greenblatt of Douglas Elliman at last month’s Sotheby’s exhibit. Right, two of the sculptures on display at the exhibit last month.
work in the world with over 100 sculptures — was heard saying that the sheep are worth more than $750,000 apiece. Shvo is planning to develop his Chelsea High Line site in partnership with development company Victor Homes into art-themed condos. Above are some of the photos from the Sotheby’s exhibit. TRD
New bill would compel steep disclosures on developments that get tax breaks City council member wants to tighten regulations after 421a controversy By Guelda Voien ith the city still smarting from the revelation that five developers received tax breaks to build in sought-after neighborhoods under a program meant for underdeveloped areas, City Council member Diana Reyna has proposed a bill to tighten personnel and construction regulations on developers who get similar deals. Reyna, who represents the 34th district (covering Williamsburg, Bushwick and Ridgewood, Queens), introduced the so-called Safe Jobs Act last month. The bill would require developers who receive more than $1 million in public funding on a project or operate buildings over 100,000 square feet to disclose a wealth of information about the company, its construction employees and the property itself, and to participate in state-approved training and apprenticeship programs. The legislation is part a push to fuel responsible economic development in New York City and “build up a pool of qualified, skilled, safe workers in the city,” Reyna told The Real Deal. The city doles out roughly $2 billion in subsidies for real estate development each year, representatives from her office said. Specifically, the measure would compel those developers to disclose the type and amount of tax break or subsidy they received, the names and addresses of contractors they employ, a list of jobs the project created, and a list of any legal violations in either their or
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their contractors’ history. The disclosures would be reported to the City Council, the mayor’s office and the city’s Economic Development Corporation, Reyna’s chief of staff, Malcolm Sanborn-Hum, told TRD. But real estate developers who spoke with The Real Deal are not happy about the measure adding to what they see as an already burdensome thicket of red tape. Million-dollar subsidies go to “basically every high-rise that gets any tax abatement,” said one prominent developer who asked not to be named. That would include, for
intended to spur construction, especially in underserved areas). A top-floor penthouse is reportedly in contract there to an investor group for over $90 million. “The question is: just how many Extells are there?” Reyna said. The mega developer declined to comment for this story. The bill would also tackle the issue of construction workers’ education, which Reyna said was key to creating jobs. The employees of “operations, maintenance and security” companies that fall under the statute would receive free access to continuing education classes under the law.
sight and we feel the best way of doing that is to go through the state,” he said, denying that the bill would play into the hands of unions. The Real Estate Board of New York said it was reviewing the legislation to see if it would affect members and “will offer our input to legislators and industry partners in due course,” a spokesperson said, declining to comment further. A representative for the Building Trades Employers’ Association, which represents about 2,000 union construction managers, general contractors and subcontractors in New York City, said the group supports the
“The question is: just how many Extells are there?” Diana Reyna, City Council example, every project under the popular 80/20 and 421a tax abatement programs, the source said. “It will become just another paper that they have to fill out,” the source said. “I don’t think any of this reporting translates [to higher safety], even if it is well-intentioned.” But Reyna underscored that developers who receive subsidies should be held to high standards. “I’d imagine that Extell [Development] is just one example of many out there,” she said. The developer made headlines recently after a state corruption task force found Albany had approved 421a tax abatements for One57, even after Extell had started construction on the tower (the subsidies are
Construction employers will have to participate in apprenticeship and training programs certified by the state Department of Labor, Sanborn-Hum said. However, the developer source contended that these requirements would effectively restrict construction work from flowing to non-unionized sites because they would have a hard time “navigating the bureaucratic hurdles.” While unions could help subcontractors deal with the red tape, smaller companies might be unable to handle the additional administrative costs, the source said. However, many of the approved apprenticeship programs are not run through unions, Sanborn-Hum noted. “We are just mandating that there be over-
thinking behind the bill. “Projects which are granted public financial assistance should be required to build to the safest standards in the industry,” the spokesperson said in a statement. “BTEA contractors sometimes face a competitive disadvantage because its costs include the millions of dollars that we spend and invest in training our workforce in safety and skill development through apprenticeship programs training that our competition does not.” Reyna said she would not be deterred by any pushback from the real estate community, which developers predicted could be strong. “I haven’t heard anything [about backlash] yet, but I am up for the challenge,” she said. TRD www.TheRealDeal.com January 2013 67
Chetrit files suit after losing out on Ring deal
Developer says a partner embarked on a “secret scheme” to flip coveted $65 million contract By Adam Pincus t seems that developer Joseph Chetrit has been quietly stewing since losing out on an opportunity to buy a stake in the famed Ring family portfolio. Chetrit claims he was an equal partner in a joint venture with Joseph Tabak’s Princeton Holdings to acquire a 50 percent stake in the 14-building portfolio once owned by brothers Michael and Frank Ring. But before the complex $112.5 million deal closed, Tabak flipped the contract to Gary Barnett’s Extell Development for $65 million, giving Barnett the chance to purchase Michael’s share. Tabak “secretly embark[ed] on a scheme to sell” the contract, Chetrit alleged in a complaint filed last month in New York State Supreme Court, and asserted that he would have bested Extell’s offer. For years, real estate investors have vied to purchase the portfolio or partner with the brothers, who are widely considered difficult negotiators. Tabak seemed to have broken the spell when in February 2011 he inked a deal to buy control of Michael’s stake for $112.5 million. But ultimately it was Extell that prevailed, not only closing on Michael’s stake but also acquiring Frank’s interest this month for an undisclosed amount. The notorious package of buildings, pulled together by the Rings’ father over decades, is valued at between $600 and $800 million and includes buildings such as 212 Fifth Avenue and 251 Park Avenue South. The majority of the buildings are vacant. Chetrit accused Tabak of breach of contract, breach of fiduciary duty and fraud, among other claims. Chetrit’s attorney, David Feuerstein, a partner at the law firm Herrick, Feinstein, declined to comment.
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Janice Mac Avoy, a partner with Fried, Frank, Harris, Shriver & Jacobson, representing Tabak, called the lawsuit “frivolous and inaccurate.” “Mr. Chetrit was only entitled to the return of his deposit. However, out of a sense of fairness, Princeton paid Mr. Chetrit what he would have gotten had the deal with Ring closed and then the interest was sold to Extell,” Mac Avoy said in a statement to The Real Deal. “Princeton and Joseph Tabak’s skillful management of this complex transaction netted Mr. Chetrit a very handsome return on his short-term investment,” she said. According to the suit, Tabak received about $65 million from the sale to Extell. Left, Gary Barnett of Extell; right, 251 Park Avenue South Out of that, he paid Chetrit $8.4 million, and Tabak and Princeton kept and thus would have paid quite a bit more the remaining approximately $54 million. than Extell’s $65 million to own the right to The joint venture also recovered its deposit, buy the entire interest. The partnership dates back to early 2012, the suit says. But Chetrit alleged that he was due far when Chetrit approached Tabak with an ofmore: $32.5 million, or half the contract fer to split the purchase of Michael’s share sale price, as well as the return of the $12.5 and operate the stake together, according million he had put in as a deposit. to the suit. Chetrit was expecting to fund “In blatant violation of its contractual fi- the acquisition through a so-called 1031 exduciary obligations to [Chetrit], defendant change, so the timing was more constrained Princeton surreptitiously sold [the contract than in a typical transaction. But by August to Extell] and then stole most of the sales 2012, the parties had hammered out a deal, proceeds for itself and Tabak,” the suit said. the suit says. Chetrit pointed out that he had agreed As part of the agreement, Chetrit pledged to pay $46 million to own 25 percent of the to give Tabak $46 million in a one-time “profportfolio — that is, half of Michael’s stake — it payment” once the venture had closed on
the purchase of Michael’s share. Crucially, Princeton maintained the power to engage in negotiations, the complaint says. Tabak had initially put down a $10 million deposit, which was in escrow, according to the complaint. But later Chetrit wired Tabak $12.5 million to cover the deposit, freeing up capital, and Tabak then assigned Chetrit the rights to the funds that were in escrow, according to the suit. In addition, Chetrit contributed another $1 million to cover expenses. At the end of the day, Tabak effectively had no money exposed in the deal, the suit claims, leaving Chetrit wondering why he sold to Extell and did not offer to sell to Chetrit. TRD
DDG pays Muss $70M for development site
Prime Upper East Side parcel has room for 130,000-square-foot project By Katherine Clarke he real estate investment and development company DDG has inked a deal to buy a 130,000-square-foot mixed-use development site from major outer-borough landlord Muss Development, The Real Deal has learned. The company will pay close to $70 million for the site, at 1558-1560 Third Avenue on the corner of East 88th Street in Manhattan. It was marketed by Helen Hwang and Nat Rockett of commercial brokerage Cushman & Wakefield. DDG, which is helmed by CEO Joe McMillan, declined to comment, as did Rockett. The site, which currently houses two
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Left, Jason Muss; right, Joe McMillan
66 May 2013 www.TheRealDeal.com PHOTOGRAPH OF MCMILLAN FOR THE REAL DEAL BY MAX DWORKIN; PHOTOGRAPH OF 251 PAS BY DEREK ZAHEDI
vacant five-story apartment buildings on interconnecting lots, is primed for a new development containing 117,000 square feet of residential units and 13,000 feet of commercial or retail space. The site comes with height limitations of 365 feet — taller than other recent buildings developed in the area. The site came on the market in July. The sale comes despite recent comments by Muss Development’s Jason Muss about his intention to move away from his family’s historic focus on the outer boroughs, and look towards constructing and acquiring residential and commercial buildings in Manhattan. Muss did not return a request for comment. TRD
www.TheRealDeal.com November 2013 115
EB-5
from page 56
Both Silverstein and Related are also currently in the process of setting up their own regional centers, according to Crain’s New York. Silverstein will use the funds for 30 Park Place, a $1 billion condo-and-hotel tower underway in Lower Manhattan; Related will source funds for its massive mixed-use Hudson Yards project, on the Far West Side. Developers must apply to the USCIS to get the green light on setting up a center. That process, sources said, generally involves developing a business plan for the project, detailing how the project will contribute jobs, and drafting project offering documents and immigration paperwork for the investors. Marketing materials for the project must also be underway before a developer can apply to establish a regional center. Nationwide, 453 of these centers exist, according to USCIS’ website, though many are used for non-real estate-specific investments. Greenberg Traurig’s Kalmykov estimated that only 30 to 40 of the 450-plus centers are active because many developers use them for only one or two projects. Mona Shah, a partner at Manhattan-based law firm Mona Shah & Associates, said she knows of 38 active regional centers in New York City. Most of them, she said, opened in the last year. But forming a regional center is “a time-consuming and long-term investment,” said Kalmykov. “The regional center processing times are currently between nine and 12 months, and startup costs begin in the $200,000 range,” she told TRD. Nonetheless, with traditional financing still nowhere near as easy to secure as it was pre-recession and mezzanine finance so pricey, making the investment can be a win-win for big developers. Plus, EB-5 financing is legally less entangling than working with a joint-venture partner or finding equity in any other traditional way, sources said.
Market reports
Kalmykov explained that for developers with consistent capital needs, paying out the start-up costs is a smart decision because once the center is in place, they can use it to raise funds for other projects.
Renting a center For developers who can’t afford to establish a regional center of their own (or don’t want to deal with the hassle), there’s another avenue: Renting a center. Indeed, centers that are not being actively used by their owners can be rented out by other developers. And some centers only exist to source capital to third parties (often developers) for a fee. For example, the New York City Regional Center — which is run by Manhattan-based real estate attorney George Olsen and Paul Levinsohn, former chief counsel to New Jersey Governor Jim McGreevey — raised $249 million for the Atlantic Yards project, while the Empire State EB-5 Regional Center sourced funds for a hotel in the Catskills and a medical facility in Philadelphia. Generally, the center finds investors and handles much of the legal legwork for the developer “renting” the center. While the initial costs for a developer are lower than establishing a center outright, renting a center can come at a hefty price. That’s because whoever owns the center generally charges 5 or 6 percent of the capital collected from international sources, said Shah. That can nearly double the cost of capital for a project, sources said. Durst rented a Florida-based regional center, called U.S. Immigration Fund LLC, to raise $80 million from Chinese investors for the 41-story glass, mixed-use tower it’s building at 855 Sixth Avenue, Barowitz said. He declined to comment on how much Durst was charged. (He said the company considered setting up its own regional center but opted against it because “it’s a major headache.”)
There are some other disadvantages to renting, however. For starters, sources said, international investors prefer to deal with developers directly, rather than intermediaries at regional centers, for legal reasons. In addition, some regional centers have a bad reputation that often comes from being affiliated with projects that have failed — even if it wasn’t the centers’ fault, sources said. “[A bad rep] can really hurt you,” Shah said, explaining that it could become difficult to attract foreign investors, who may fear losing their capital.
Buying a center The third (and final) option for a developer looking to tap into EB-5 financing is to buy a regional center. A developer in a hurry to get his project underway would consider buying, said Michael Harris, a Florida-based attorney who’s worked with EB-5-funded projects. But he noted that there is one major hurdle: Few owners want to sell. He said his clients have generally offered to pay “a couple hundred grand” to buy centers. “But it is pretty rare because people are reluctant to let go of them,” he added. The transactions are structured like any other asset trade, with buyers often setting up LLCs to mitigate risk. However, it’s the least common of the three options, experts said, noting that while the USCIS technically permits the sale of regional centers, it doesn’t encourage the practice. The USCIS New York City office could not be reached for comment. Meanwhile, there are some risks to buying a center. Harris said a center may be subject to problems with previously built or already-in-the-works projects. Plus, he explained, “there are immigration risks” for the buyer. He said if the new owner doesn’t do his due diligence, he might be on the hook for improper conduct that took place before he came in. TRD
from page 62
ly attributing the uptick in office leasing to a boom in activity by hedge funds and private equity firms (see related story on page 30). “We try to get above talking points,” said Colliers’ chief operating officer, Peter Kozel. “We’re trying to give a narrative.” But one broker dismissed the company’s approach as an attempt to grab attention. “They take stronger positions just to get noticed,” he said. Kozel denied that: “That’s not the intent. We are trying to give people some reasons to think about what they are doing. We’ve never said anything crazy or incendiary.” Larger firms, industry insiders said, tend to avoid interpretive characterizations because they have a broader base of clients that might take issue with highlighting a negative market reality.
Standouts Despite the pitfalls, some brokerages are known for doing a better job in specific areas than others. For instance, Massey Knakal produces reliable numbers for cap rates in the outer boroughs and for turnover rate, a statistic not many firms produce, one well-known broker at a rival firm said. “I know he gets those numbers from city tax rolls, so I don’t mind relying on Bob [Knakal],” the broker said. Others point to Jones Lang LaSalle’s Hotel Investor Sentiment Survey and Colliers’ “Government Solutions” report as standouts. Meanwhile, Ariel Property Advisors also generates accurate data on multifamily trades in Upper Manhattan, brokers said. And one-man upstart Michael Rudder of Rudder Property Group has emerged as trustworthy on commercial condominium sales, said Schechtman, who also sells office condos. “I don’t mind relying on his quarterly market reports and 116 November 2013 www.TheRealDeal.com
using them in my own work,” Schechtman said. Still, all the reports must deal with certain challenges. How brokerages measure loss factor — which looks at how much space a tenant gives up for building necessities like elevators — and how they define “availability” are perennial problems. “What’s [the definition of] ‘rentable’?” said Cushman’s Rockett. Some say, “space that’s being marketed,” while others argue that it’s “empty space, which can be occupied.” There is also the question of what price points or geographic areas to include. At Cushman, deals under $10 million are not part of the capital markets report, a cutoff one insider said was chosen in 1999 and is now dated. However, each time there’s a push to change the number, the firm must contend with how to deal with the domino effect it would have on quarterly and annual comparisons. Cushman officials did not respond to a request for comment. And then some stats — like vacancy rate — are almost always minimized in bad markets, one prominent broker said. “Higher vacancy rates are bad for you on both sides — tenant or landlord,” the broker noted.
Data dump Many brokerages are expanding their coverage — for better or for worse. In the coming months, Massey Knakal will premiere monthly white papers on topics that surface while it culls data, Adrian Mercado, director of research at Massey, told TRD. The first such paper will look at what’s driving industrial sales in Queens. For its part, CBRE is looking to add Harlem retail to its reports — perhaps spurred by the massive retail project that investor Jeff Sutton is planning in the area. (Sutton has al-
ready signed national tenants like Burlington Coat Factory, American Eagle Outfitters and Whole Foods, but those deals currently fall outside the purview of CBRE’s reports.) At the end of the day, all data should be taken with a grain of salt, sources said. “The data is only as good as the specific people compiling it, and the underlying data on which they are relying,” Schechtman said. TRD CORRECTIONS A N D C L A R I F I C AT I O N S In the October magazine story “Development kings head for Queens,” TRD misstated the number of units at the new development project 45-46 Pearson Street. The project in fact has 197 units. October’s “Heard around town” misidentified the son of Core broker Emily Beare. Her son, also a Core broker, is named David Beare. In the October story “The other council races,” TRD mistakenly excluded the fact that the council primary in District 36 in Bedford-Stuyvesant required a vote recount. In addition, Kirsten John Foy conceded the race on Oct. 1. An October story entitled “Real estate’s hot new entrepreneurs” incorrectly identified Zillow CEO Spencer Rascoff's association with RetailMLS. Rascoff is an advisor to the company. The story also incorrectly identified Floored's association with 15 Central Park West. Floored is in talks with brokers at the building to use its technology. An October story entitled “NYC real estate dynasties” incorrectly published a photo labeled as Joseph Durst, which was someone else. www.TheRealDeal.com January 2012 00
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Titles
from page 20
mal certification or designation program, but he’s now looking into one in the wake of the DOS rule change. Another designation is available to Manhattan brokers through REBNY competitor the Manhattan Association of Realtors, a local chapter of the National Association of Realtors. The trade organization currently has only about 400 Manhattan members, compared to REBNY’s 11,000 members. Robert Pair, the president of MANAR and of the boutique brokerage Harlem Lofts, told TRD that brokers can receive a “realtor” designation by becoming a member of MANAR. In addition, NAR offers 22 other designations through educational courses, such as “certified international property specialist,” according to its website. Pair said he has seen a “renewed” interested in MANAR recently, although he declined to say specifically how many more brokers have joined the organization in recent months.
“Now that someone can’t use the artificial vice president title,” he said, “to join an organization and pay some dues really makes sense to me.” Brokerages, too, have come up with their own new, noncorporate titles. At Sotheby’s International Realty, for example, every broker is a now “global real estate advisor,” a title the firm started using immediately following the DOS ruling. Sotheby’s executives did not immediately respond to requests for comment.
Confused consumers Many brokers don’t view these new titles as suitable substitutes for the ones they lost, however. Diane Wildowsky, a Sotheby’s broker who was previously a vice president, said of her new global real estate advisor title: “We were all forced to do it, and we’re all learning to live with it.”
Steinberg said he hasn’t looked into finding a new certification or title. “Even ‘specialist’ or ‘expert’ sounds sort of weird,” Steinberg said. “What does that mean?” The rule change is somewhat ironic, he said, since its intent was to keep consumers from being duped or confused by the corporate titles. “With all the different designations, if a client wants to compare apples to apples, they really can’t do that anymore,” Steinberg said. But not all agents dislike the title change. Howard Margolis, a top producer at Douglas Elliman, said he doesn’t mind having lost his title of managing director, and, in fact, notes that he’s opposed to doing anything to replace it. “[Real estate is] about being comfortable with who you are, and standing on the merits of what you’ve done,” he said. TRD
Dolly Lenz from page 35 has never heard of, and has not been notified of, any alleged complaint. She knows nothing about it. Throughout her career, she has successfully handled multibillion-dollar condominium projects and has never managed a single project that failed.” Meanwhile, Lenz’s star power dimmed somewhat during the downturn, when several large condos projects she was representing faced difficulty. In 2009, Lenz was fired from her position heading up sales at Manhattan House at 200 East 66th Street, when only 25 percent of the building’s 583 apartments had been sold. The next year, a dispute between Lenz and the managers of the high-profile Apthorp condo conversion at 2211 Broadway led to her departure and the hiring of Elliman rival Corcoran Sunshine. In recent years, Lenz had also fallen out of favor with the Elliman leadership, sources said. The firm’s principals were displeased with Lenz’s close association with Delos, the Manhattan-based “wellness real estate” company developing 66 East 11th Street, sources said. In addition to marketing the property, Lenz is also on the company’s board of advisors alongside her former client, spiritual guru Deepak Chopra. Sources said Elliman higher-ups were unhappy that Lenz established the association with Delos without their knowledge or consent. Delos’ founders — former financial executives Paul Scialla, Peter Scialla and Renato Termale, and real estate developer Morad Fareed, who previously worked for Starwood Hotels & Resorts Worldwide — declined to comment for this story. Other than designing the interiors of a private residence in the Meatpacking District, the 11th Street project is the company’s first in New York, according to its website. Another possible motivation for Lenz to leave Elliman was her title. A DOS ruling earlier this year stipulated that
brokers can now only use titles that correspond to their licenses — such as broker, associate broker or salesperson — and not the corporate titles that firms often bestow on their high-producing agents. That rule likely meant that Lenz’s rarified title of vice chairman was in jeopardy, industry sources said. And while Lenz was a megawatt star for Elliman, sources said the firm was likely making little money off her, despite her big-ticket listings, because she had negotiated such a generous commission split. Whatever the reasons for Lenz’s departure, the circumstances surrounding it suggest that the change was more abrupt than she would have liked, industry insiders said. If Lenz had been planning to announce a new firm, “it wouldn’t have been done the way it was done,” said one firm head who wished to remain anonymous. “There would have been some kind of unveiling. It would have been on CNBC.” Once it was decided that Lenz would leave Elliman, sources said, her lack of close ties with fellow brokers likely made it difficult for her to move to another major firm, leaving her with no option but to go out on her own.
That same reputation may also make it difficult for her to attract fellow top brokers to her fledgling firm. Lenz’s strengths do not lie in working with other agents, said one Elliman executive, who noted that Lenz “is just not trusting of people.” When asked why Lenz did not have a broker team at Elliman, Shvo was quoted in Gaines’ book as saying: “She has no group because Dolly cannot give out power. … She cannot just let go.” But as she sets out to build her new firm, Lenz has a num-
ber of factors working in her favor. First, there’s the power of the brand she’s cultivated for years, most recently as a celebrity spokesperson for the technology firm BlackBerry. Lenz’s name is “synonymous with luxury residential real estate,” said industry veteran Barbara Fox, CEO of brokerage Fox Residential. And Lenz may not want to build a huge company. Her mega-listings alone are lucrative enough to keep a boutique firm afloat, sources said. Longtime broker Laurence Kaiser, founder of the high-end boutique firm Key Ventures, said Lenz has the chops to attract high-profile properties without a big firm behind her, making the small-firm model ideal. “Dolly’s not a novice,” he said. “She’s highly professional and she has wonderful clientele. She knows how to polish the silver without the help of a big firm.” There are overhead costs associated with running a brokerage, of course, but Kaiser said those expenses will be minor compared with the commissions Lenz can rake in. “There will certainly be costs she’ll have to assume, but by the same token, she’ll not have to give [Elliman] a percentage of her commission,” he said. And keeping the firm small would help reduce those expenses, as well as the administrative tasks required to run a brokerage — tasks Lenz likely has little experience with, since she’s always focused on doing deals. “She’ll have to be a manager of infrastructure,” Steinberg said. “That could be a distraction.” Whatever she does, Steinberg said, Lenz would likely benefit from cooperating more with her fellow brokers. “My message to Dolly,” he said, “would be [that] she could be as successful and happier if she did her business in just a slightly different way.” TRD
leasing in September, has over 15,000 square feet of amenity space, including two lounges, an indoor basketball court and a bocce court. Monthly rents at the building start at $2,600 for a studio and climb to $7,000 for a two-bedroom penthouse, according to Maundrell. Because developers are squeezing in as many units as they can, the units themselves are often smaller, with “narrower room dimensions,” Packes noted. In Manhattan, for example, “the one-bedroom used to be a creature of 650 square feet to 850 square feet,” Packes said. “That unit now is being built at 650 square feet.” Many of the city’s supersized rental projects are in Brooklyn, where large parcels of land are more abundant than in Manhattan. As a result, Manhattan-based developers have
recently started pursuing projects there. (Land prices in Brooklyn are also on the rise, but as of last year were still about 51 percent lower than in Manhattan.) For example, Manhattan-based Gotham is currently developing a 600unit rental near Fort Greene’s Brooklyn Academy of Music, while the Chetrit Group is developing a rental/hotel project at 500 Metropolitan Avenue in Greenpoint. So far, at least, high rents and waiting lists don’t seem to be deterring tenants. At 50 North 5th Street, for example, 30 of the project’s 229 units were leased in the first week and a half of marketing, Maundrell said. Renters have “an appetite for luxurious rentals, condo-like amenities, condo-like finishes, condo-like buildings,” Barrocas said. “You’ll see people paying for it.” TRD
A new model
Rentals from page 40 between $70 and $80 per square foot in order to turn a profit, sources said. That’s up from around $60 a square foot during the last real estate boom in the mid-2000s. And Brooklyn projects now charge between $55 and $65 per square foot. To make a Manhattan rental work, “you would have to build in a location now that will yield an $80-per-square-foot rent,” said developer Ben Shaoul of Magnum Real Estate Group. Shaoul just finished the lease-up of Williamsburg Social, a 72-unit project at 250 Bedford Avenue, where prices started at $2,600 for a 436-square-foot studio. The building has over 7,500 square feet of amenity space, including a landscaped courtyard, roof deck with wireless internet access, residents’ lounge and bike storage. Fifty North 5th Street in Williamsburg, which began 118 November 2013 www.TheRealDeal.com
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De Blasio
from page 64
primary, the real estate community was caught off guard. “When he emerged, there was a lot of concern and surprise,” said Kathryn Wylde, CEO of the Partnership for New York City, a pro-business group. Hank Sheinkopf, a veteran political strategist, said anyone who thinks they can predict what the city would look like under de Blasio “really need[s] to be hospitalized.” “It’s like Forrest Gump and the box of chocolates,” he said. As de Blasio’s policy agenda has come into sharper focus, one of the more worrying changes that he’s pushing for — at least from the perspective of many developers — is mandatory inclusionary zoning, which would require developers who build residential projects that benefit from rezonings to set aside a percentage of their units as affordable housing. (The Bloomberg administration’s current policy is voluntary inclusionary zoning, which incentivizes developers, rather than forces them to build affordable housing.) Meanwhile, de Blasio argued in his ABNY speech that Bloomberg’s $7.5 billion plan to build or preserve 165,000 units of affordable housing by 2014 does not go far enough. He’s called for building or preserving 200,000 units of affordable housing in the next 10 years, and has also said he would invest $125 million annually from the city’s $140 billion pension funds to do so. David Belt — founder of development firms Macro Sea and DBI, who has bundled funds for de Blasio — said that the candidate would have to find a way to make mandatory inclusionary zoning financially viable for developers. “If no one wants to build because the rules are too harsh, then it won’t work,” said Belt, who met with the candidate in September to discuss developers’ concerns. De Blasio told TRD his plan is feasible if coupled with upzonings and increases in as-of-right density. “This should expand the city’s stock of affordable housing while also easing price pressure in the market-rate rental market,” he said through his campaign manager last month. The candidate has also called for a change in the tax treatment of vacant land. In August, he told TRD that he would consider taxing vacant land at commercial property rates rather than at the far lower residential rates as a way to “discourage long-term speculation that leaves lots vacant in our neighborhoods,” and to spur the construction of more affordable units. These positions — along with his pledge to support labor unions — have earned the candidate the support of powerful pro-labor groups, such as the 100,000-member Building and Construction Trades Council of Greater New York and the Building Trades Employers’ Association, which represents 1,700 construction managers and contractors in the city. “Our sense is that he truly believes in the idea of responsible development,” said Gary LaBarbera, president of the Building and Construction Trades Council, which endorsed the candidate last month. Assuming de Blasio wins, Sheinkopf said, he would have the support of a “left-leaning” City Council. In particular, newly elected council members are likely “less concerned with what the real estate industry wants to do and more concerned with what the mayor will want,” Sheinkopf said. “So he will have allies.”
A closer look Some industry insiders agreed that de Blasio may be more pro-development than he appears on first blush. For starters, sources said, whoever becomes mayor will have no choice but to play ball with the real estate industry. After all, property tax is the single biggest contributor to the city’s coffers, accounting for 27 percent of the city’s estimated revenue in 2013, according to a June Independent Budget Office report. In addition, growing the economy is, of course, consid-
120 November 2013 www.TheRealDeal.com
ered a key marker of success for anyone at the helm of City Hall. If de Blasio wins Gracie Mansion, “you may be surprised by the relationship that he has with the real estate community, simply because we need each other,” said Bob Knakal, chairman of the commercial real estate brokerage Massey Knakal Realty Services. (Knakal has previously been on the record saying that a Republican would be better for the industry.) De Blasio has met with several top developers and
The Partnership for New York City’s Kathryn Wylde (left) said de Blasio has met with several top developers and business leaders in recent months. Silverstein Properties’ Janno Lieber (right) and Related Companies’ Jay Kriegel (below) have both fund-raised for de Blasio.
De Blasio backed Forest City Ratner’s Atlantic Yards project in 2006, saying it would bring the borough a much-needed infusion of affordable housing.
business leaders in recent months, according to Spinola and Wylde. “There’s some concern about a few of his policies,” Wylde said, “but he’s come across as a reasonable, smart guy.” Billionaire real estate mogul and former Republican mayoral candidate John Catsimatidis told TRD that de Blasio has to realize that “we’ve got to give [developers] the incentive to invest it in New York City” because they could easily take their money elsewhere. While de Blasio hasn’t dialed down his rhetoric against the industry — sources point out that it’s working well in the polls — he has accepted its money. As of September, the candidate had raised about $460,000 from real estate interests, according to an analysis of campaign finance records by the Wall Street Journal. Among those listed as “intermediaries,” or fund-raising bundlers for the candidate, are Silverstein Properties’ Janno Lieber, Related Companies’ Jay Kriegel, Forest City Ratner’s Robert Sanna and Toll Brothers’ David
Von Spreckelsen, a TRD analysis shows. Brookfield Office Properties’ John Zuccotti, Midtown Equities’ Jack Cayre and prominent real estate lawyer Edward Mermelstein are also donors. Meanwhile, early last month, de Blasio pulled in $275,000 in a single night at a Chelsea fund-raiser, according to Crain’s. Von Spreckelsen, who in 2009 was looking to develop a 450-unit residential complex along the Gowanus Canal, told TRD that de Blasio — then a City Council member — was a key ally. De Blasio did ask for certain concessions, including a greater number of affordable units and a move to unionized labor, Von Spreckelsen said. But he stayed steadfast in his support, even after the U.S. Environmental Protection Agency wanted to declare the Gowanus Canal a federal Superfund cleanup site. The EPA did eventually get its way in 2010, which prompted Toll Brothers to kill the project. “He didn’t win a popularity contest for supporting us,” Von Spreckelsen said of the candidate. “I have to give him a lot of credit for it.” De Blasio took several other pro-development stances in the council. Though he had initially demanded an affordable housing requirement for the 2003 rezoning of Brooklyn’s Fourth Avenue, he ultimately voted in favor of a proposal that didn’t include the requirement. And perhaps most controversially, he backed Forest City Ratner’s Atlantic Yards mega-project in 2006, saying it would bring the borough a much-needed infusion of over 2,000 units of affordable housing. Forest City Ratner has yet to make good on delivering the affordable units, but as recently as June 2011, Bruce Ratner, the chairman of the firm, hosted a fund-raiser for de Blasio at the Waldorf-Astoria. Other co-chairs of the event included the Durst Organization’s Jordan Barowitz and Pat Purcell of the UCFW Local 1500 grocery workers’ union. Forest City Ratner declined to comment for this story. De Blasio has been brainstorming ways to make life easier for developers and to push major projects forward, according to Wylde, noting that he’s called out the Department of Buildings for excessive red tape and not being efficient enough with processing permits, project approvals and inspections. “Our goal should be providing developers certainty that they will receive responses within 30 to 60 days” for the various permits and other aspects of their plans, de Blasio told TRD. In addition, the candidate has proposed relaxing restrictions on air rights transfers, saying in a recent position paper that when more expansive transfers have been permitted in areas such as Hudson Yards and West Chelsea, the process “has enabled greater flexibility to promote development and affordable housing.” Von Spreckelsen said that as Public Advocate, de Blasio reached out to talk about improving the way city agencies work with developers. The two discussed potential DOB improvements, as well as ways to shorten the pre-certification process for the city’s Uniform Land Use Review Procedure — traditionally a headache for developers. And unlike Lhota, who told TRD in August that the city should slow down future rezonings until results of previous rezonings are in, de Blasio has said that they are an “economic and environmental imperative.” Von Spreckelsen said de Blasio’s campaign rhetoric is likely more anti-development than his actual policies would be as mayor. In the primary, de Blasio took “a rather liberal position, because it was a crowded field and he wanted to distinguish himself,” Von Spreckelsen said. Certainly, Von Spreckelsen added, “he would like to leverage his position to get more of what he wants in the city. But I’m not feeling too bad.” TRD
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Lhota
from page 65
units and require a $365 million annual increase over the city’s current spending projections. De Blasio, by comparison, has pledged to build or preserve 200,000 affordable units over the next 10 years. Further, Lhota has advocated for the extension of the 421a tax abatement, which has been historically used to encourage construction in less-favored neighborhoods. The GOP candidate has also backed a controversial Bloomberg proposal to lease New York City Housing Authority land to private developers for market-rate housing, and has said he would look to bring supermarkets and other private retailers to the complexes. “This will provide NYCHA with much-needed revenue to repair and upgrade its existing housing stock,” he said in a recent policy paper, and “will improve the quality of life for NYCHA residents by creating a real community atmosphere.” In one of his strongest attacks, Lhota has seized on de Blasio for opposing Bloomberg’s controversial stop-andfrisk program, saying that doing away with the program was “another step closer to making New York City like Detroit.” Notably, the policing issue might have real estate consequences. Indeed, Steven Spinola, the head of the Real Estate Board of New York, the industry’s leading trade group, recently told TRD that one of the industry’s biggest concerns this election season is crime, noting that it can create uncertainty that may hurt investor and builder confidence. Spinola, who under Mayor Ed Koch served as head of the agency that later became the city’s Economic Development Corporation, recalled city safety coming into play when the city was trying to lease up the MetroTech Center in Downtown Brooklyn to office tenants. He said that when the developer of the Brooklyn complex, Forest City Ratner, brought in a potential tenant, “the tenant got scared off because a couple of people came up to us and panhandled.” He added, “It does not give a good impression.” But Lhota has broken with Bloomberg on at least one issue that has been a fundamental component of the mayor’s real estate policy platform: rezonings. Indeed, Bloomberg rezoned over a third of the city during his 12-year reign, spurring development in places like Manhattan’s Far West Side, Williamsburg and Long Island City, with developers adding an astounding 40,000 new buildings. Though Lhota supports the mayor’s Midtown East rezoning proposal, he told TRD in August that “we’ve saturated the market” with rezonings, and that “we should naturally slow it down until we start seeing results from the rezonings we’ve recently accomplished.” Still, developers take comfort in Lhota’s pledge to overhaul the property tax system, which Spinola described as “broken.” Lhota said in the policy paper that the current system leaves many landlords with “the distinct feeling that
assessments are being increased irrespective of a property’s worth on the market,” and that the system disproportionately taxes income-producing properties. Nonetheless, and perhaps as a testament to de Blasio’s strong showing, Spinola said there is “no question that either candidate understands development.” He added: “Each has a different philosophy on how to make it happen.”
with whom he has a 22-year-old daughter, and he has risen a long way from those humble beginnings. His net worth is about $13 million, campaign finance disclosure documents show, and his assets include a $2.7 million home in Nantucket as well as a $3.5 million duplex penthouse in Brooklyn Heights. After college, Lhota went to Harvard Business School, and then had a successful investment banking career at First Boston and Paine Webber, where he specialized in public finance before joining Giuliani’s administration as the city’s finance commissioner. Lhota rose through the ranks of the Giuliani administration, eventually becoming the deputy mayor of operations. In his time at City Hall, he developed a reputation for being a tough negotiator, especially with the municipal unions, according to the New York Times. In 1999, with the city facing the threat of a transit strike, Lhota reportedly posted a sign outside his office that quoted President Calvin Coolidge: “There is no right to strike against the public safety by anybody, anywhere, anytime.” After Giuliani’s two terms ended in 2001, Lhota rejoined
the private sector as a top executive at Cablevision and at telecommunications firm Lightpath. Then, in 2010, he jumped over to the Madison Square Garden Company, which was part of Cablevision until that year. In 2011, Gov. Andrew Cuomo nominated Lhota to become chairman of the Metropolitan Transportation Authority, saying at the time that Lhota “brings one-of-a-kind managerial, government and private-sector experience to the job.” Though Cuomo has endorsed de Blasio, whom he worked with at the U.S. Department of Housing and Urban Development during the Clinton administration, he’s largely stayed out of the mayoral race. “Governors enter New York City mayoral elections at their peril,” said Cunningham, the political strategist. By many accounts, Lhota had a mixed tenure at the MTA. Although he was hailed for the rapid restoration of subway service after Hurricane Sandy and managed to slash hundreds of millions of dollars from the MTA’s budget, he was criticized for his testy relationships with MTA workers, alleged micromanagement and proposed fare hikes. “Being at the [helm of the] MTA is like asking to get smacked in the jaw every day,” Sheinkopf said. “People who take that job should be highly regarded for wanting to take that risk.” Lhota remains close to Giuliani — both men share a penchant for reciting lines from “The Godfather” — who went to bat for him last month at an event organized by the pro-Lhota PAC New Yorkers for Proven Leadership, which is being bankrolled by billionaire GOP political activist David Koch. Giuliani warned attendees that if de Blasio wins, New York would become a pawn of special-interest groups, according to the New York Daily News. But de Blasio has used Lhota’s ties to Giuliani against him, saying repeatedly that a Lhota administration would usher in an era of fearmongering that was characteristic of Giuliani. And while de Blasio has fired up the masses with his “Tale of Two Cities” narrative, Lhota hasn’t crafted an equally compelling narrative, even those who have endorsed Lhota said. “He’s not exactly inspirational, which would be a nice quality for a mayor, though not essential,” Crain’s New York said in its endorsement of the Republican. Cunningham said Lhota has “perhaps the best background of anyone who’s run to lead the city.” But, he added: “There’s also a dynamic out there that you can’t correct just because you have a very good résumé.” TRD
development of Willets Point by the Related Companies and Sterling Equities, was championed by Bloomberg’s Economic Development Corporation. But the approval wasn’t granted until the developers agreed to a handful of community demands, including accelerating the delivery of affordable housing and topping the mall with a rooftop farm. Now the project is “on autopilot,” a Related spokesperson said. One project that may not make it through the ULURP process before Bloomberg’s departure is the Childs Building, a former restaurant in Coney Island that Borough President Marty Markowitz and owner iStar Financial want turned into an amphitheater. Community Board 13 voted against the project, which has Coney Island residents concerned about traffic and noise. But the board’s ruling is only advisory, and the proj-
ect is expected to be approved by the city. The project went in front of the City Planning Commission last month, but has yet to go up for a vote. Meanwhile, to move their projects through the process as quickly as possible, there are some steps developers can take. “You try to get in line as early as possible with what you’ve got, hire all the right people, and you do everything you can with government relations people, your consultants and your lawyers, and try to push,” Von Spreckelsen said. It’s crucial to hire architects who intimately understand ULURP and know how to align a proposal with the mayor’s priorities, industry insiders said. “You need to understand what the public sector wants,” Lefkowitz said. “You have to understand from their point of view, since they control the levers.” TRD
Lhota’s village Lhota, a Czech name that means “small village,” was born in the Bronx to a retired city police officer and a household goods saleswoman. At Georgetown University, Lhota, the first in his family to go to college, said he stole newspapers — which he promptly returned after reading —from his neighbors. Now 59, Lhota is married to a former Giuliani fund-raiser
From left: Ben Shaoul, Edward Minskoff and Rudy Giuliani
Developers rush from page 66 many constituencies that it is usually smaller than originally planned, more community-focused. And so it just sails right through.” Wolkoff, for example, said he was happy to get council approval last month for his controversial project, which would convert 5Pointz into two residential towers with retail space. The City Council’s approval of a zoning variance for the project means “we’re literally at the go line — we are 99.99 percent there,” he said. That’s despite the fact that a federal judge issued a 10-day restraining order last month freezing demolition preparations at the site, after 16 graffiti artists filed a lawsuit in an attempt to save the art they painted there. Also last month, a proposed megamall near Citi Field won council approval. The project, part of the $3 billion re122 November 2013 www.TheRealDeal.com
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Commercial market
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According to news reports, Moore moved into the Rockefeller Center space in 1993. The hedge fund declined to comment, but a source close to the firm said it has not decided whether it will stay or go. It’s unclear whether the firm is in negotiations over its rent. CoStar did not list the asking rent for the space. However, the average asking rent for Midtown remained flat last month, rising by a penny per square foot to $69.37, while the availability rate rose by 0.1 point to 11.7 percent, according to the Colliers data.
Midtown South The sharp rise in asking rents in Midtown South over the past several quarters has led some landlords to reconfigure old space and put it on the market at prices that would have been unheard of in the past. Landlord Buchbinder & Warren listed the entire 6,935-square-foot sixth floor last month at 1 Union Square West, a Class B building completed in 1890 and designated a city landmark in 1985. The asking is $65 per square foot. It is the first time a full floor in the nine-story structure at the corner of 14th Street has been brought to market since the owner bought it in the 1970s, said Eugene Warren, a founding partner of the firm. “We never offered a full floor before, it was always multiple tenants,” he said. He added that the company is testing the market with this floor, and that if it goes well, it may try offer other full floors in the future.
The building’s $65-per-square-foot asking rent is far above the average asking rent for the Midtown South market, which last month shot up by $1.48 per square foot to $54.56 per foot, the Colliers figures showed. The availability rate for Midtown South was flat at 9.1 percent, the firm reported.
Downtown The variety of tenants Downtown has been expanding for several years, most notably with the surge in publishing firms such as Condé Nast at 1 World Trade Center and the Daily News at 4 New York Plaza. But brokers have their eyes on apparel as the next big industry to sign large leases in Lower Manhattan, said Robert Constable, an executive vice president at Cushman & Wakefield who focuses on Downtown. That industry has steered clear of the area, but like other industries is now being drawn in by the relatively affordable rents. “Of the six major fashion companies in the market right now [looking for space in Manhattan], all have looked at Downtown options,” he said, adding that some have even made offers. “If two of the six come Downtown, that would be groundbreaking,” he said. He declined to name those fashion companies, but sources say firms such as J. Crew and Polo are on the hunt for space. In addition, the non-profit sector has been actively leasing space in Lower Manhattan. The Institute for Career Development, a work-force development company for veterans and people with dis-
abilities, inked a 10-year lease for 25,000 square feet last month on the fifth floor of 123 William Street with the building’s new owners. Last month, property investment firms East End Capital Partners and GreekOak Real Estate purchased the building, which is approximately 50 percent vacant, for $133 million. A leasing team led by CBRE Group’s Bradley Gerla that includes Jonathan Cope and Howard Fiddle, is representing the building. The asking rent for the space (and all lower floors) in the building is $36 per foot. Space on the higher floors of the 27-story building is $48 per foot. Gerla said the building had significant vacancies because the prior owner considered converting it to a residential apartment building, but instead sold it. “A lot of not-for-profits are looking at [the building], as well as a couple social media and some insurance firms,” Gerla said, adding that there are leases out for floors six and seven, in addition to another tenant considering a large block. John Wheeler, a managing director at JLL, who was not involved in marketing at the building, said the location is a draw, in addition to the building’s pricing. “The center of Downtown is moving north and west,” Wheeler said, adding that it’s being driven by developments such as the Fulton Center transit hub. The availability rate in Lower Manhattan remained flat at 14.7 percent last month, but the average asking rent declined slightly, by $0.11 per foot to $47.37 per foot, the Colliers figures showed. TRD
StreetEasy from page 43 mit their listings to be syndicated on Zillow. Brokers who dislike the site said that was due to a combination of reasons, including the fact that the company’s “Zestimates,” or market value estimates on properties, are often inaccurate. In D.C., for example, David Charron, CEO of Metropolitan Regional Information Systems, the company that handles the MLS feeds for the Realtor associations in several states and in D.C., told TRD that Zillow has about 80 percent of D.C.’s listings (up from about 70 percent in recent years.) But, he said, StreetEasy had closer to 100 percent at the time it was shuttered, which was after it had signed a contract to get data from MRIS directly this past February, he said. Charron declined to say how much StreetEasy paid for information from MRIS, but other sources said it was in the thousands of dollars, rather than hundreds of thousands. “If StreetEasy had enough time and money, it could have given Zillow a run for its money in the urban areas,” Charron said. Meanwhile, the head of the powerful Miami Association of Realtors, the largest local Realtor group in the nation, had sharper words for Zillow. Teresa Kinney, the organization’s CEO, told TRD that just before Zillow’s acquisition of StreetEasy was announced, she had inked a deal with StreetEasy to provide it with a direct feed, essentially giving it 100 percent market coverage. By contrast, Zillow — while the dominant firm — had less than 80 percent of the market’s listings, insiders said. After news of the sale, Kinney asked StreetEasy to guarantee that it would not share information with Zillow. Then the Florida StreetEasy site was shut down, so the request was moot. She said she won’t extend the same offer to Zillow. “Of all the major, national websites out there, Zillow is the most inaccurate,” Kinney said.
124 November 2013 www.TheRealDeal.com
Brand battles While Zillow may get knocked in New York, it does have its fans here. Companies including the Corcoran Group, Town Residential, Keller Williams NYC, Halstead Property and Brown Harris Stevens have been sending their listings to Zillow (and advertising on the site) for years. “They are a great partner,” said Zhann Jochinke, the chief operating officer of Keller Williams NYC. “We have a strong relationship with [Zillow] being [that we are] a
they sold to Barton’s Expedia in 2007. Then in 2009, the duo founded BuyFolio, which connects brokers and agents with their clients. Zillow purchased BuyFolio late last year for an undisclosed sum, then renamed it AgentFolio and kept the pair on. Today it is used by several of the city’s brokerages, including Keller Williams. Still, Peters is one of many in the residential industry who anticipate that the StreetEasy brand will be dropped
national franchise.” In addition, many brokerage insiders said StreetEasy’s new brain trust, the Daimlers, should not be underestimated. Frederick Peters, president of Warburg Realty, had kind words to say about both Smith and Susan Daimler. “I think both Michael and Susan are very smart, very creative, hard-nose business people,” he said, adding, “I was sorry to see that Michael was leaving.” The Daimlers do have tech chops. They founded a website for airline passengers called SeatGuru in 2001, which
at some point and replaced with the Zillow logo. “I think sooner or later in some way or other this will be the wedge that gets Zillow into New York,” said Peters, noting that it would be hard to keep the two brands going simultaneously. The company, however, said StreetEasy will continue to be operated as an independent brand — a fact that should provide New York brokers with some comfort. “Probably we all would have preferred that it remained an independent entity, but that is not what happened,” Peters said. TRD
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For more information call (305) 284-3731 or visit miami.edu/urbanism. www.TheRealDeal.com May 2013 1 www.TheRealDeal.co7 November 20131125
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to a satisfying steakhouse. Wolfgang’s Steakhouse brings to Miami what it has perfected in New York City, Beverly Hills, and Waikiki. The restaurant’s atmosphere provides comfort and elegance; skilled servers are trained to deliver the most pleasant experience for guests. An impressively extensive first class wine list complements every dish. Exquisite dishes include seafood towers, salads and irresistible sides, to indulge in. We welcome you to come in and taste perfection with a serene view of the Miami River.
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N O V E MBER 4
As part of its Landscape Design Portfolio Lecture Series 2013, the New York Botanic Garden presents a lecture by Hargreaves Associates president Mary Margaret Jones entitled “Queen Elizabeth Olympic Park — Sustainable Renewal for the 21st Century.” Jones will discuss her firm’s work on the 2012 Olympic Park, which transformed a neglected post–industrial district in London’s East End into one of Europe’s largest urban parks. 6:30 to 7:30 p.m., the Botanic Garden’s Midtown Education Center, 20 West 44th Street. Fee: $25. Members only. Information and registration: www.nybg.org.
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The China-U.S. Chamber of Commerce presents a “U.S. Real Estate Market and Investment Dinner Forum,” with presentations by Dolly Lenz of Dolly Lenz Real Estate and Janice Stanton of Cushman & Wakefield. 6:30 to 9:30 p.m., the Yale Club of New York City, 50 Vanderbilt Avenue. Fee: $50 for members, $110 for nonmembers. RSVP required. Information and registration: cuscc.eventbrite.com.
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The Real Estate Board of New York hosts a “Residential Brooklyn Seminar: Top Strategies for Winning in 2014,” moderated by Trish Martin, director of Brooklyn sales for Halstead Property. Panelists will include Ellen Gottlieb of Brooklyn Bridge Realty; Beth Kugel of Halstead; Anthony Morris and Deborah Rieders of the Corcoran Group; and Libby Ryan of Brown Harris Stevens. 9 to 11:30 a.m., St. Francis College, 182 Remsen Street, Brooklyn. Fee: Free for members, $15 for nonmembers. Information and registration: www.rebny.com.
C A L E ND A R 1
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The New York Chapter of the American Institute of Architects hosts a conversation with Daniel Zarrilli, director of resiliency at New York City’s Office of LongTerm Planning and Sustainability. Zarrilli will conduct a presentation on the current outlook of New York’s resiliency trends past, present and future, then engage in an informal conversation on policy and planning recommendations considered for the future of New York City in the aftermath of Superstorm Sandy. 5 to 7 p.m., the Center for Architecture, 536 LaGuardia Place. Fee: Free for AIA members and students, $10 for nonmembers. Information and registration: cfa.aiany.org.
12
The Brooklyn Real Estate Roundtable Series hosts its November luncheon. Featured speakers will include Darryl Towns, New York State Commissioner of Housing and Community Renewal; developer Greg O’Connell, Jr., of the O’Connell Organization; and Toby Moskovits of Heritage Equity Partners. Noon, Brooklyn Historical Society, 128 Pierrepont Street, Brooklyn. Fee: $300 for the luncheon series. Information and registration: novreroundtable.eventbrite.com.
128 November 2013 www.TheRealDeal.com
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The Institute of Real Estate Management presents a luncheon meeting entitled “Disaster Boot Camp.” Experts in insurance, engineering and restoration will discuss how to prepare for the next natural disaster. 11:30 a.m. to 1:30 p.m., the Union League Club, 38 East 37th Street. Fee: $85 for members, $125 for nonmembers. Information and registration: www.iremnyc.org.
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The New York Chapter of the American Institute of Architects hosts “Cocktails & Conversations” with William Pedersen, a partner at Kohn Pedersen Fox Associates, and Carol Willis, director of the Skyscraper Museum. Bartender Tony Cecchini, author of “Cosmopolitan: A Bartender’s Life,” will create a custom cocktail for the occasion inspired by the architect’s work. 6:30 to 8:30 p.m., the Center for Architecture, 536 LaGuardia Place. Fee: $12.50 for members, $15 for nonmembers. Information and registration: www.aiany.org.
17
The Council of New York Cooperatives & Condominiums presents its third annual Housing Conference, with 72 classes on operating co-operatives and condominiums in New York, including legal, financial and “people” issues. Registrants can attend three or four classes and visit the Exhibit Hall, where vendors and city agencies will display products and services. 8 a.m. to 5:15 p.m., Baruch College, Newman Vertical Campus, 55 Lexington Avenue. Fee: $75 to $275. Advance registration is required for attendance at all classes. Information and registration: www.cnyc.com.
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The Real Estate Board of New York presents a “Trends & Observations” members’ luncheon with panelists Robert Futterman, president and founder of RFK; Neil Goldmacher, senior managing director at Newmark Grubb Knight Frank; Woody Heller, executive managing director at Studley; and Simon Ziff, president of Ackman-Ziff Real Estate Group. CBRE’s Mary Ann Tighe will moderate. Panelists will discuss how 2013 is ending and expectations for 2014 in the sales, leasing, financing and retail markets. 11:45 a.m. to 2 p.m., the Roosevelt Hotel, 45 East 45th Street. Fee: $90. Information and registration: www.rebny.com.
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20 & 21
Massey Knakal presents its “Multifamily Summit” conference. Speakers will include Richard Mack of the Mack Real Estate Group, Harry Macklowe of Macklowe Properties, Steven Witkoff of the Witkoff Group, Richard LeFrak, chairman and CEO of the LeFrak Organization, and Stuart Saft, chair of the Real Estate Group at law firm Holland & Knight. Panel topics will include condo and townhouse development; multifamily debt financing; multifamily development beyond Manhattan; tax incentives and affordable housing; and repositioning properties. 7:30 a.m. to 4:30 p.m., McGraw Hill Conference Center, 1221 Sixth Avenue. Fee: $179 to $599. Information and registration: www.mkmultifamilysummit.com.
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By Adam Pincus The Cathedral Church of Saint John the Divine is working with the Brodsky Organization to build hundreds of rental apartments on its Upper West Side property. An application filed with the city’s Department of Buildings last month calls for a 330,995-square-foot development with 428 residential apartments at Amsterdam Avenue and 113th Street. The project would rise as high as 15 stories, or 149 feet. The two-building project was undertaken to support the cathedral financially, church spokesperson Stephen Facey told The Real Deal. The church signed an agreement this fall with Brodsky to lease the parcel for 99 years. Brodsky will pay rent for the land, but the religious organization is not co-developing the site nor will it profit Grand Central directly from the apartment building, Facey said. “This is really about stabilizing the cathedral’s Saint John the Divine finances,” he said.
Most popular stories
Top deals of the month
Agent
Firm
Price
Address
Adam Modlin, Marisa Sargent
The Modlin Group
$35 million
19 East 70th Street
Nora Ariffin, Christopher Kromer
Halstead Property
$25 million
15 Central Park West, #7C
Carrie Chiang and Richard Phan
The Corcoran Group
$17.5 million
249 Central Park West
Oren Alexander and Tal Alexander
Douglas Elliman
$16.5 million
721 Fifth Avenue, #38F
Melanie Lazenby and Dina Lewis
Douglas Elliman
$11.5 million
260 West Broadway, #11A
Source: StreetEasy.com and The Real Deal. Data is for closed deals filed with the city between Oct. 1 and Oct. 25, where both a broker and an address can be identified. Chart includes only listing brokers.
Most popular stories
By Mark Maurer American Realty Capital’s New York Recovery REIT is in contract to buy the 756,000-squarefoot office tower at 1440 Broadway from investment firms Monday Properties and the Rockpoint Group for $528.6 million, an executive with the company told The Real Deal. Rockpoint owns an 80 percent stake in the 25-story building, which it acquired 1440 Broadway for $282.4 million in December. Monday owns the remaining 20 percent of the building. The deal for the tower occurred swiftly over 10 days, according to Michael Happel, chief investment officer for New York Recovery REIT. “We have a good relationship with the sellers, so we were able to execute it quickly,” Happel said. “It’s certainly an advantage in the New York market to have capital and move fast.” Adam Spies and Doug Harmon of Eastdil Secured represented the sellers in the deal.
1) Ranking NYC’s real estate dynasties
Warhol muse sues Jungreis over “secret” deal for LES portfolio
10) After abrupt split, Jason Pomeranc moves to rebuild boutique hotel biz
By Guelda Voien Whatever happened to Baby Jane’s real estate portfolio? Well, one four-building package was sold in a sweetheart deal deceptively arranged by prolific broker Aaron Jungreis — or at least that’s what Jane Holzer, the real estate developer who starred in scads of Andy Warhol films (often referred to as “Baby Jane”), claims in a new lawsuit. Holzer hired Jungreis to sell four rental apartment Aaron Jungreis of Rosewood buildings on the Lower East Side and in the East Village. Realty He brokered a $40.1 million deal with Manhattan landlord Croman Real Estate, which closed this past December. But Jungreis failed to shop the portfolio “as promised, to a wide net of local players with potential interest in the property,” and instead “steered” Holzer toward Croman, with whom he had an existing relationship and a “secret” deal to get financial compensation, she claimed in a suit filed last month. “I adamantly deny the allegations,” Jungreis told The Real Deal via email.
130 November 2013 www.TheRealDeal.com
2) Real estate’s hot new entrepreneurs: the tech startups to watch 3) Tour Odeon’s $391M condo makes NYC look cheap 4) Candy Land: Britain’s bad boy developers take on Manhattan 5) Gil Dezer lives life in the fast lane 6) Miami’s 20,000 new condo units try for Manhattan prices 7) Is Westchester’s ‘hipsturbia’ hype real? 8) Dirty cash is fueling condo recovery: ex-prosecutor 9) Inside Silverstein’s 4 World Trade Center
Reader comments Preservationists lambast REBNY affordable housing data: “These guys want more affordable housing and more landmarking? Are these units going to appear from out of a hat or something? … Landmarking makes less housing supply.” Banksy decries 1 WTC as “104 floors of compromise”: “I’m not a follower of Banksy, but you don’t need a lesson in civics or cities to note that 1 WTC is a product of design by committee. … It’s an emasculated creation, and now it won’t even have the dignity of a finished spire, making a mockery of the ‘1776’-foot-tall aspirations that were so arbitrary in the first place.”
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Lower the cost of keeping your residents connected – with bulk-rate discounts on TV, Internet and Phone service. Time Warner Cable is pleased to offer select buildings these discounted rates through our shared savings plan. We will work with you to identify the right mix of services for your residents, and set up turnkey billing and customer service. To find out more about our shared savings plan, call 212-420-5530 and mention code 5-C.
Shared Savings Plan is available to qualifying residential buildings in Time Warner Cable of New York and New Jersey service areas. Savings is applied to regular retail rates for services included in the Shared Savings Plan. Additional restrictions may apply. Contact Time Warner Cable’s New Market Development/MDU Department to discuss eligibility and program requirements. Some restrictions apply. Time Warner Cable and the eye/ear logo are trademarks of Time Warner Inc. © 2013 All rights reserved. RealDeal_11.1_mdu_shared2_10.5x14.5
T h e R e a l D e a l C r o s s w o rd
Bridge Financing Done Right.
Billionaires, bubbles and more By Myles Mellor
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QUESTIONS OR DEALS, CONTACT ARNOLD SPIEGEL ESQ. AT
chip
®
The Community Housing Improvement Program Cordially Invites You To
CHIP’S ANNUAL COCKTAIL PARTY WHEN Thursday, November 14, 2013 6:00 p.m. – 9:00 p.m. WHERE The Morgan Library & Museum The Gilbert Court 225 Madison Avenue, Between 36th and 37th Streets RSVP By November 8, 2013 212.838.7442 or RSVP@chipnyc.org PAYMENT Mail check for $150 per person to CHIP 5 Hanover Square, Suite 1605 New York, New York 10004 Checks due by November 11, 2013 NON-MEMBERS Join CHIP before or at the party to receive a $150 credit towards 2014 membership and complimentary membership for the remainder of 2013
Fashion retailer with a flagship location at 725 Fifth Avenue Down 26. Mortgage ___ are up on the latest rentals government lending 3. 1.New York-based construction company Mega real estate family who developed 70 Pine St.requirements in 1. More of a ga 28. Family who just took the Empire State that was sold to AECOM Lower Manhattan 2. Golden glitte Building public 8. Residential brokers tout the number of 29. The response most buyers are looking these rooms in their listings 3. Global real estate dynasty, founded 1978 (goes with 3. Leasing perio for on their offers 10. Real estate billionaire Jerry 10 across) 31. Big investor who’s buying two Fifth 11. Mega real estate transaction (2 words) 4. It has to be p Avenue buildings for $105 million 13.8.Often used to describe California King,similar for one 36. Co-developer at One World Trade characteristics in architecture 5. Center Non-profit ho Seearchitecture 3 acrossstyle 38. The key factor in determining city flood 15.10. Greek those without zones 18. Total mortgage and tax expenses, 11.informally Important real estate transaction words) 39. (2The firm behind 18 Gramercy Park 6. Summer mon 42. To ___ the spotlight 19.13. British Japanese chain that opened in Recurring theme in architecture 7. Real estate fa 43. Fannie Times Square 44. The companyof building the Greenwich 21.15. AnGreek upgrade to an older building, style used in the American Museum Liberty Luxe Lane condo project on the former _____fit Natural History's columns 8. Have life St. Vincent’s Hospital site 23. It has become increasingly common for 45. Tenants would prefer no annual rent ___ real estate players to own or rent a 18. Total expenses, informally 9. Family that 46. One of the Donald’s kids private one Real estate firm converting Lower
24.
Manhattan’s 70 Pine Street into luxury Across
19. Selection at Sasabune 21. Vintage
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Opportunity funds often look for 23. Jacuzzi feature
19. Manhattan ___, the massive mixed-use 16. There's a st project being developed by Brookfield ___ investments than other real 24.estate Fashion real estate mark Properties players icon at 725 5th Ave. 20. Financial optimist 2. Towers like One57 and 432 Park have 26.a new Mavens 17. Pop Lady r 22. The Upper East Side to Chelsea, on building ___ a compass 3. 28. Leasing periodthat owns the Empire State 19. Manhattan Family Building 23. Make a note, ___ down 4. Visitors in most major NYC office developed by B buildings show one on of these 29. Sweetmust response an offer 25. Roman numeral for 109 27. To get ___ of a bad development partner 5. NYC is a natural ___ for high-octane 20. Financial o 31. two Fifth Ave. buildings for $105 30. Stagers have ____ up many NYC homes realHe's estatebuying deals before sellers list them 6. million, Summer month, for short Joe ___ 22. De Witt Cl 32. Firm first started by Harry and now run 7. Real estate family who constructed 36. RealPark estate dynasty that 23. Make a not by Richard Battery City’s Liberty Green and owns 33 Manhattan 33. ___ breaks often serve as incentives for Liberty Luxe buildings 25. Roman 109 big development 8. Brooklyn new residential building 38.___@Schermerhorn Architectural drawing 34. This firm has recently ramped up activity 27. Fix, in a wa with projects like 22 Thames Street 9. Family who built 200 Chambers Street 39. Co-owners of Brown Harris Stevens and Halstead 35. ___ Harbor Culture Center on 30. Smartened, 12. Conservative investors are prepared Realty Staten Island ___ a real estate bubble bursts 32. site Real estate 36. Heavy equipment on a construction 14. Goes with off 42. Monopolize 37. Combine with (2 words) 16. They make up the highest percentage of after it 40. __god! for-sale apartments in Manhattan 43. West from Hollywood 33. Condos and 41. Broker’s commission 17. The “lady” renting at 40 Central South 44.Park 100 year old real estate developers and management 1.
company
132 November 2013 www.TheRealDeal.com
46
Across 1.
424 MADISON AVENUE, NEW YORK, NEW YORK 10017 T: (212) 750-2244 // E: ESQFUNDING@GMAIL.COM
45
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To see the solution, visit www.TheRealDeal.com.
45. Raise the price 46. CBRE's ____ Gelber, did a 164-mile run to raise
35. Compact
Featured In Our February 2013 Issue
F O R A D R E S E RVAT I O N S P L E A S E C A L L 212-260-1332 O R E MAIL D ATA B OOK @ T H EREA L D EAL. C O M
COMINGS & GOINGS Don Peebles enters NYC market with public-private partnerships
Movers and shakers Camilla Papale, previously Douglas Elliman’s chief marketing officer,
T
he Peebles Corporation, one of the nation’s largest African-American-owned development firms, is using public-private real estate development partnerships to get its feet wet in the New York City market, founder CEO Don Peebles told The Real Deal last month. Partnering with city- or state-run agencies to develop new properties on government-owned land allows the company to compete for big development parcels, he said. “The public-private deals allow you to enter a market,” Peebles said, noting that a developer can quickly get to know New York City political players and zoning and land use procedures through collaborations with government agencies. Once a developer has made it through a public-private project, it’s much easier to approach a private development, he said. Earlier this year, the city selected Peebles to reposition a landmarked 400,000-square-foot building at 346 Broadway in Tribeca. After a yearlong application and proposal process, the company is gearing up to officially take title to the property for $160 million, with plans to transform the building into condos and a hotel. Peebles is also waiting to hear if he has been selected to redevelop a BP gas station site on 110th Street and Frederick Douglass Boulevard in Upper Manhattan. The New York City Economic Development Corporation sought proposals in 2012 to build on the 13,500-square-foot space at 2040 Frederick Douglass Boulevard. If Peebles wins the assignment, the company would develop an 80,000-square-foot residential condominium property with large residences ranging from 3,000 to 6,000 square feet. Peebles is also bidding on two other city-owned sites in the five boroughs, one of which is close to 346 Broadway, he told The Real Deal. Peebles is not the only developer teaming up with the city. Mammoth new projects like the Related Companies’ Hudson Yards and Forest City Ratner’s Don Peebles Atlantic Yards projects are both public-private partnerships. “The transformational projects are all public-private,” Peebles said. “That’s where the land is.” By Katherine Clarke
has left the company and relocated to San Francisco, where she’s launching an eponymous branding, design and marketing consultancy firm. Petula Lucey, formerly a senior director at Tishman Speyer, joined Massey Knakal Realty Services as Camilla Papale
chief marketing officer. Other recent hires to the firm’s management team include COO Neil Heilberg, executive managing director Todd Korren, executive managing director of New Jersey David Simon, and Michael Lederman, vice president of IT. Kristin Thomas joined Town Residential as sales director of the newly
Kristin Thomas
opened Town West Village. In taking this position, Thomas closed the bou-
tique sales firm she cofounded in 2010, Thomas & Ingram Real Estate, where she served as CEO. Pennsylvania-based World Wide Land Transfers acquired New York City’s Landmarc National Title Agency. Landmarc’s founders, Marc Lawrence and Jeffrey Lender, will now oversee World Wide’s New York City operations.
Also on the move Robert Nelson joined the Southampton office of Brown Harris
Thor to launch residential division
Stevens. For the past 30 years, he has owned a boutique real
oseph Sitt’s commercial real estate powerhouse, Thor Equities, announced last month that it is launching a new residential division, Crain’s reported. The division will focus on acquisitions and development of residential properties, with a focus on Manhattan rental buildings. To launch the new division, Sitt is partnering with Alan Klein and Jonathan Fishman, both formerly of Stonehenge Partners, which owns and manages some 3,000 residential apartment units. “Residential real estate is booming in many American cities, presenting Thor with a one-of-a-kind opportunity to enter this expanding market,” Sitt said in a statement. “Utilizing the same strategy that we have successfully implemented in the commercial sector, this new sector will help round out our portfolio and present additional opportunities in the marketplace.” Midtown-based Thor, which owns a portfolio of more than 15 million Joseph Sitt square feet of space around the world, has traditionally specialized in commercial and retail real estate, with projects such as the renovation and leasing of the Takashimaya building at 693 Fifth Avenue. Thor currently owns a stake in brokerage TOWN Residential, but the new venture otherwise marks a first for the firm.
joined the New York office of Gibson, Dunn & Crutcher as
J
estate firm in New York City. … Real estate lawyer Steven Klein partner. He was previously a partner at Willkie Farr & Gallagher. … Brian McFarland joined VOA Architecture as a principal. He was previously was an associate principal at Cetra Ruddy. … Associate real estate broker Doug Eichman moved to CORE from the Corcoran Group. … Besen Special Assets hired Daniel Kole, previously of Santander Investment Services, as managing director of the firm’s residential whole loan desk.
Announcements Real estate power couple Ivanka Trump and Jared Kushner last month welcomed their second child, a son named Joseph Frederick Kushner. In a Tumblr post announcing the birth, Trump explained that the boy is named for his parents’ paternal grandfathers, developers Joseph Kushner and Frederick Trump, whom she called “master builders of their generation.”
Robert Shiller wins Nobel prize
Real estate attorney Adam Leitman Bailey will tie the knot with fiancée Jen-
A
merican economist Robert Shiller, cofounder of the closely watched S&P/Case-Shiller Home Price index, last month won the Nobel Memorial Prize in Economic Science. Shiller, a Yale University professor known for warning against bubbles in technology stocks and housing, joined fellow economists Eugene Fama and Lars Peter Hansen in winning the Royal Swedish Academy of Sciences’ famous prize. “A lot of people have told me they hoped I would win it, but I’m aware there are so many other worthy people that I had discounted it, so I would say no, I did not expect it,” he told the Telegraph. The trio won for collectively advancing the current understanding of asset prices, which the academy said is key to making decisions on savings, house buying and national economic policy. Fama, regarded as the father of the efficient market hypothesis, showed the difficulty of predicting stock prices in the short run starting in the 1960s. Twenty years later, Shiller showed that there is more predictability in the long run in stock and bond markets, while Hansen devised a statistical method to test asset pricing theories. Robert Shiller
134 November 2013 www.TheRealDeal.com
nifer Rosenthal on November 9 at Daniel restaurant on the Upper East Side. The intimate affair will be family-only. “I told my clients that if they Adam Leitman Bailey and fiancée Jennifer Rosenthal
wanted to come,
they needed to marry my future sister-in-law,” said Bailey, who proposed to Rosenthal this summer with a helicopter ride in California’s Napa Valley. Compiled by Sanna Chu and Julie Strickland
What if New York City real estate brokers ran a bodega?
T
he Real Deal got a kick out of Broker Bodega, a new Tumblr, which recently started publishing photos of regular corner-store products with mock advertisements in the broker-speak regularly used on Craigslist. Below is a look at some of our favorites.
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f it all came down to name recognition, long-shot mayoral candidate Jack D. Hidary might have a better shot in the upcoming election. Hidary, a tech entrepreneur, has three first cousins — all successful business execs in the city — who share his name. The mayoral candidate’s first cousin is Jack A. Hidary, principal of Hidrock Realty, a Manhattan-based company that has owned, developed or operated some $1 billion in real estate. Then there’s Jack I. Hidary, who owns a sports clothing company, and Jack M. Hidary, also in the apparel business. The cousins grew up on Ocean Parkway in Brooklyn
Halloween: The new hot ticket?
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he brokerage Halloween Party may be replacing the holiday party as the new hot ticket. Last month, both Douglas Elliman and Nest Seekers International hosted extravagant masquerade bashes. Douglas Elliman agents donned 1920s attire and flooded into Atlantic City for a firm-wide “Great Gatsby”–themed masquerade ball. The ball marked the conclusion of the company’s fourth annual “ReInvent” convention — a networking and education event which drew 1,000 Elliman pros — held this year at the Borgata Casino and Spa. Actor Kevin Spacey — whose classic 1992 movie “Glengarry Glen Ross” depicts four real estate salesmen — made a special appearance at the ball. He addressed the crowd, saying he, too, had thought about “reinvention” in his own career, having starred in the Netflix-only show “House of Cards.” Spacey, whose film played on a constant loop throughout the three-day event, also singled out Elliman super-broker Raphael De Niro, son of actor Robert De Niro, in his speech, joking that if De Niro’s team had convinced “Goodfellas” actor Joe Pesci to join their group, Spacey “would definitely buy a fucking apartment.” As if that weren’t enough, Elliman CEO Dottie Herman and Chairman Howard Lorber took the “masquerade” part
Elliman CEO Dottie Herman and Chairman Howard Lorber at Elliman’s Gatsby party
Left, Nest Seekers’ Andrew Schrob as He-Man. Below, Nest Seekers’ Celis Murillo as “General Punishment” and Elio Gerbi as a zombie.
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and are named after their grandfather in accordance with Sephardic Jewish tradition, explained 45-year-old Jack D., the youngest of the foursome. The Jacks have gotten used to people mixing them up. But since Jack D. launched his mayoral campaign, the mixups have grown more frequent. The other Jacks “have received calls from supporters wanting to get a job on the campaign,” Jack D. said. Now as the campaign heads into the homestretch, Jack D. joked that it may be helpful to have doppelgangers out there. “I guess I could use them to stand in for me at an event,” he quipped. By Hiten Samtani
of the ball seriously. Herman wore a white tasseled gown, feather boa and red wig, while Lorber donned a pinstriped suit and fedora. “It was very exciting to see Howard Lorber dressed up as a gangster with an automatic weapon in his hand,” said Elliman agent and “Million Dollar Listing New York” star Luis D. Ortiz. The Nest Seekers bash, at the Finale nightclub at 199 Bowery, also drew a handful of flappers, gangsters and jazz fiends paying homage to Gatsby. But there were also a host of other costumes including a boa-clad Muammar Gaddafi, Alice in Wonderland, a bumble bee, Peter Pan, and Madonna. CEO Eddie Shapiro, dressed in a ruffled shirt and rhinestone-studded loafers, said he threw the bash to avoid competing with the inevitable crush of holiday parties later in the year. And the event was no staid corporate affair: Performers in “Black Swan” costumes pirouetted on the dance floor and a Spandex-clad contortionist twisted on a raised platform. But one guest was conspicuously absent. “Million Dollar Listing New York” star and Nest Seekers top producer Ryan Serhant didn’t show: he was busy filming his part in Noah Baumbach’s next movie, “While We’re Young.” By Katherine Clarke and Leigh Kamping-Carder
Heard around town Walker stalker Developer Michael Stern was escorted by his nine-year-old daughter, Gabrielle, to the opening night gala of Hearst’s annual Designer Visions open house at Walker Tower last month. The two greeted guests in the Art Deco–style lobby of the newly completed condo conversion, developed by Stern’s JDS Development Group and Property Markets Group. “This is my boss,” Stern said of his daughter. He noted that the building’s 47 apartments are now virtually sold out, though there are some units remaining. The restoration of the 1920s-era building, formerly owned by Verizon, required a gut renovation. “We took it back down to slabs and concrete,” Stern said. 136 November 2013 www.TheRealDeal.com
Stern will now turn his attention to another former Verizon tower designed by Ralph Walker at 425 West 50th Street, which he’s converting to condos. He’s also planning a 1,350-foot residential skyscraper on West 57th Street. The Designer Visions event evidently helped sales: A few days later, Walker Tower’s five-bedroom penthouse reportedly went into contract for over $50 million.
Back to the Big 10 Town Residential founder Andrew Heiberger told TRD last month that he had just returned from his annual “Dads Trip” to his alma mater, the University of Michigan, with six college friends and their kids. The group — which included Manhattan real estate attorney Daniel Roshco and Chris
Andrew Heiberger and college friends at a University of Michigan football game
Mongeluzo of Newmark Grubb Knight Frank — attended a Michigan football game. Also in Heiberger’s class at Michigan was Jeff Blau, now CEO of the Related Companies. By Candace Taylor www.TheRealDeal.com November 2012 105
POWER AND FORCE COMBINE FOR S P E C TA C U L A R R E S U LT S
The powerful “plunging” wave, known as the Perfect Curl, occurs only when the wave suddenly transitions from deep to shallow water, the ratio of wave height to wave length exceeds .17 and winds are strong.
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WeiserMazars LLP is an independent member firm of Mazars Group.
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THE CLOSING
LESLIE
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HIMMEL Leslie Wohlman Himmel is a managing partner at the real estate investment company Himmel + Meringoff Properties, which she founded with Stephen Meringoff in 1985. The firm operates a portfolio of some 2 million square feet of Manhattan commercial real estate, valued at more than $750 million. Its properties include the 480,000-squarefoot office building at 521 West 57th Street, and 401 Park Avenue South, a 12-story office and retail building. Earlier this year, Himmel + Meringoff sold 158 West 27th Street for $57.5 million, more than double the $25 million it paid for it in 2010. Before launching the firm, Himmel worked at the national real estate syndicator Integrated Resources.
What’s your full name? Leslie Ellen Wohlman Himmel. Wohlman is my maiden name and Himmel was my married name with my first husband. I got remarried five years ago to Alan Shuch, but I didn’t take his name. I just use it for making restaurant reservations. What’s your date of birth? March 6, 1954. dates, but Alan was by far the standout of the group. Where did you grow up? In White Plains. I went to a rough public high school, right around that Martin Luther King period. Every day, people were beaten up. I was in the minority as a Jewish Caucasian. I didn’t get hit because I was a cheerleader and everyone liked me. My older brother went to private school at Horace Mann. They gave me the choice to go there too, but I liked my friends and I wanted to be on the [White Plains] tennis team. I promised that if they let me stay in public school, I’d still end up at a top college. I went to the University of Pennsylvania and then Harvard Business School.
Where do you live? I live at 15 Central Park West. I used to see A-Rod in the gym but I couldn’t quite compete with his athletic prowess. Do you have any other homes? My husband has a home in Nantucket, so we go there on weekends. How many kids do you have? Two. Andrea is 27 and David is 25.
What did your father do? My dad had his own accounting firm and taught me from an early age the importance of numbers and entrepreneurship. There was a lot of math talk in my house.
What was your first job? When I was about eight, my brother and I used to go door-to-door selling seeds to grow vegetables and flowers. I was the salesperson, because I had a great smile.
When did you get married? I married Jeffrey Himmel in 1984. We were married for about 22 years and divorced in 2006. I married Alan in 2008. He’s a retired partner from Goldman Sachs.
How did you get into real estate? I didn’t know what I wanted. Before I went to Harvard, I worked for Mobil for six months. In my summers off from Harvard, I worked for an investment bank. After business school, I worked for Clairol. At that time, I was dating someone whose family owned a lot of real estate. He used to say, “It’s a waste of your talent to be selling hair color.” I wasn’t selling hair color — I was doing strategic marketing for Clairol — but that comment made me think about getting into real estate. I interviewed at Integrated Resources and they gave me the lowest-rung position there, running the appraisals and engineering studies for their acquisitions. I was eventually promoted to acquisitions.
How did you and Alan meet? We were fixed up. We went out to dinner to a restaurant called Fiamma. All of a sudden it was midnight and the tables around us were empty. We’d been there for four and a half hours. Did you go on a lot of bad dates before you met Alan? It was a period in my life where I went way too much on a carousel. When I got divorced, I said, ‘I’m not going to feel sorry for myself. I’m going to go out and have fun.’ And I did. It was quantity, not quality. I went on a lot of
138 November 2013 www.TheRealDeal.com
Why did you leave Integrated Resources?
I knew I wanted to have my own business one day. I met Steven Meringoff in a continuing-education real estate class at NYU. [The late mogul] Harry Helmsley was speaking in the class. He asked if anyone had any questions and I raised my hand. I said, “What’s your greatest accomplishment?” He paused, and then said, “What are you doing tonight?” That night, Steve introduced himself to me. He thought, “If Harry Helmsley is hitting on her, she must be someone worth knowing.” I ran into Steve again years later, when I went to his office on behalf of Integrated, trying to buy the tax position of his real estate. He looked at me and said, “Why are you there?” At that moment, we started talking about being partners. What is Harry Helmsley like, and did you ever meet his wife Leona, the notorious “Queen of Mean”? My first year working with Steve, I went away to Barbados. We were staying at Sandy Lane [a luxury resort], and went into the dining room for dinner and who was there? Harry and Leona. We ended up befriending them and having lunch and dinner with them the entire week. Harry told me stories of how he built his empire. I was never in Leona’s line of fire, so I never saw her fury. What are your hobbies? I’m addicted to exercise. Tennis, yoga, Rollerblading, skiing. I have a racing bike. I’m passionate about my friends. [CBRE’s] Mary Ann Tighe has been a close friend since 1988, when we bought 411 Lafayette Street and hired her as the exclusive leasing agent. Do you make as much money as you’d like to make? Every time I’ve reached the next bar, it seems like that bar is too low. By Katherine Clarke
PHOTOGRAPH FOR THE REAL DEAL BY MARC SCRIVO00 www.TheRealDeal.com July 2006
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Founded in 1991 by Kevin Maloney, Property Markets Group (“PMG”) has direct handson experience in the acquisition, renovation, financing, operation, and marketing of residential and commercial real estate. PMG has distinguished itself over the last decade through the development of luxury condominium developments in Florida, New York, South Carolina and Illinois. PMG recently launched the following highly anticipated projects:
• 10 Sullivan Street | Soho, NY • Walker Tower | Manhattan, NY • 42nd Road | New York City, NY • 435 West 50th Street | Manhattan, NY • Sage Beach | Hollywood Beach, FL • Echo Aventura | Aventura, FL • 95th on the Ocean | Surfside, FL
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Sales: 877 510 2266 | info@isgworld.com | www.isgworld.com 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.
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