The Real Deal October 2013 by The Real Deal

Pomeranc starts over

When will the NYC inventory crunch end?

Pomeranc starts over

FiDi investors change tune

Manhattan builders heading to Queens

122

Jeff Greene on being mean

THEREALDEAL Vol. 11 No. 10 October 2013 $3.00

www.TheRealDeal.com

The industry’s most innovative entrepreneurs

’ YC S

Candy Land

N e t a t s e l rea st ies a n y d Supersized uch

Real estate’s hot startups are changing the way NYC business is done. p40

developments The largest U.S. buildings constructed since the crunch — from flashy casinos to soaring office towers. p34

How m wn o y e h t do today?

The famed British developers may have finally found their NYC sweet spot. p28

The Council’s new class

The City Council races that are must-wins for the real estate industry. p66

STARRING

ARNOLD FISHER

BILL RUDIN

JERRY SPEYER

DOUGLAS DURST

RICHARD LEFRAK

HOWARD MILSTEIN ILLUSTRATION BY NOAH MCDONOUGH

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Highlights O C T O B E R

REFLECTING PRESENCE

Mortgage mania

Ending the inventory crisis

Going to Gracie-land

2 0 1 3

Manhattan sales and rentals see price drop as interest rates rise.

Despite an uptick in construction, insiders say relief is two years out. The official mayoral residence versus the candidates’ current homes.

Gracie Mansion was built in 1799.

Spector’s space Architect Scott Spector says his University of Michigan football mementos — including helmets and a wall-sized photo of a famous former Michigan alum — get his eponymous firm more business.

Architect Scott Spector

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

for reflection on the past while looking to the future.

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

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

In their words...

Candy Land Have the British developers finally found their New York City sweet spot? Developers Nick (left) and Christian Candy

Transforming design into reality

JFK’s not-so-‘standard’ redesign

Supersized U.S. developments

A $14 billion bet in Saratoga

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

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Andre Balazs has been tapped to redesign the airport’s TWA terminal under his signature Standard name.

The largest buildings constructed since the credit crunch — from flashy casinos to soaring office towers.

In New York State’s biggest project outside the city, a tech manufacturer is one to bet on in this horse-racing county.

The Palazzo Resort Hotel Casino in Las Vegas

38 Pomeranc leaves the ‘Commune’ After splitting with Commune Hospitality partner and Hyatt heir John Pritzker, Jason Pomeranc gets ready to roll out his new hotel brand.

Architect: Snøhetta Photo: Snøhetta

Jason Pomeranc in his flagship hotel 60 Thompson

8 October October2013 2012 www.TheRealDeal.com www.TheRealDeal.com

www.TheRealDeal.com March 2012 00

All images are artist renderings. All dimensions are approximate and subject to normal construction variances and tolerances. Square footage exceeds the usable floor area. Sponsor reserves the right to make changes in accordance with the terms of the offering plan. Plans and dimensions may contain minor variations from floor to floor. 82nd Street Associates LLC c/o Naftali Group LLC, 1700 Broadway, 16th Floor, New York, NY 10019. This is not an offering. The complete offering terms are in an offering plan available from sponsor. File CD13-0075.

Highlights continued

SLANT ROUTES

Real estate’s new innovators

FiDi investors change tune

The start-ups to watch and how they’re changing the industry.

Building buyers try new strategy, sticking with commercial instead of converting to apartments.

A 3D office model by start-up Floored

brokers sell the world 48 NYC As the market tightens, NYC

agents take more global listings.

NYC’s real estate dynasties TRD’s exclusive look at how much they own and what their buildings rake in.

gets royal treatment 60 Queens The borough will see some 60 large new residential projects in the next few years.

A look at the city’s 10 biggest family dynasties

66 Columbia University’s new field house, the Campbell Sports Center by Steven Holl Architects, is designed to be a team player with facilities that foster balance between the minds and bodies of student athletes in a range of sports. Inspired by the slanting lines of field-play diagrams, the building’s design relies on point foundations and a lightweight steel structure to achieve its diverse program on a sloped site. The university’s first new athletics building since the mid-1970s, Campbell forms a gateway to the revitalized Baker Athletics Complex, and a new game plan for sports at Columbia.

The Council’s new class

A look at the City Council races where real estate issues are taking center stage.

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

Medieval meets modern

Commercial Market Report

Manhattan West, SOM’s newest office behemoth, recalls the famed Two Towers of Bologna, critic James Gardner says.

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

A rendering of Manhattan West

Government Briefs How the federal, state and local government impact real estate.

Structural Steel Right for any application

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

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

120

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

Courtside at the U.S. Open

Rafael Nadal, the winner of this year’s U.S. Open

122 Architect: Steven Holl Architects Structural Engineer: Robert Silman Associates Photo: Iwan Baan

10 October 2012 2013 www.TheRealDeal.com

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

The mens’ final brought out real estate bigwigs like Joe Sitt, Marc Holliday, Jeff Sutton and Jon Mechanic.

‘Mean’ Jeff Greene opens up... About his $800 million winning bet, his buddy Mike Tyson and his Elmo-themed parties.

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

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

120

We Heard A lighter look at industry buzz.

www.TheRealDeal.com March 2012 00

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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

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53 Buildings / 2,093 Residential Units / 28 Commercial Units Bronx: Aggregate sales of

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Advertising Sales Eran Evron, Abi Laoshe, Nick Mascaro, Robert Stearns, Jennie Durkovic, Nicki Chadi DIGITAL TRAFFic MANAGER Junaid Zahid Webmaster Nima Negahban Finance director Kenneth Cyrus Administrative Assistant Virginia Durso Circulation Paul Destanko Distribution Mitchell Newman, Michael Presto ATTORNEY Barry J. Friedberg Trachtenberg Rodes & Friedberg LLP Accountants William T. McCallum, CPA, P.C., Christine Wang

Queens: Aggregate sales of

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12 October 2013 www.TheRealDeal.com

The Real Deal is a registered trademark of Korangy Publishing Inc. Copyright © 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.

EDITOR’S NOTE

Life under Mayor Bill

alk about a real estate upgrade. When Bill de Blasio is handed the keys to Gracie Mansion — which seems likely given the latest polls — it will be a major step up from his Park Slope home, where he shares a single bathroom with his family (see page 20). But let’s face it, it will also mean a less friendly tenant in City Hall for New York’s real estate industry. When it comes to taxes, zoning, landmarking and other key issues, Mayor Bill will differ a lot from Mayor Mike. If de Blasio is elected, it may make the city more progressive, or it may move the city backwards, erasing the legacies of Mayors Giuliani and Bloomberg, and leaving us in some David Dinkins–era purgatory. Time will tell. Hopefully a de Blasio administration will strike the right balance of moving the city forward in some key social areas, but not abandoning the economic progress made during the last two decades. The race, in which de Blasio is facing off against Republican Joe Lhota, a former deputy mayor to Giuliani, raises some big political questions. Should New York be a place where the wealthy are entitled to an outsized piece of the spoils in exchange for fueling the city’s economic engine? Or should things be divided up more equally (with the wealthy paying higher taxes to subsidize more new programs)? Or rather — what I think is the case — is the de Blasio premise of a “tale of two cities” itself a false dichotomy? Surely, from Brownsville to Beekman Place, life is better across the board here than it was 20 years ago. De Blasio wouldn’t be the first politician to hone in on (or exploit) socioeconomic differences to get elected. Yes, the election serves as a necessary and useful debate about the state of the city. And yes, the city is expensive, as it’s always been. But did Bloomberg really open up the kind of fissures that de Blasio claims he did?

Jacky’s

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It’s important for de Blasio, who has been focused on the worst landlords, to recognize the real estate players who are helping the city grow. On the real estate front, de Blasio — who as public advocate created a “Worst Landlord Watch List” — has been critical of market-rate development, telling The Real Deal that “towering, glitzy buildings marketed to the global elite is not the type of development New Yorkers are looking for.” But that comment misses the mark. One just needs to read this issue to get that. On page 60, we look at the rise in new residential development in Queens. Many Manhattan builders are now erecting their first Queens projects, taking advantage of the cheaper land prices there than in Manhattan and Brooklyn. The units, too, will also be less expensive, and will serve, for example, college graduates that are priced out of the other boroughs. Isn’t that how it’s supposed to work with supply and demand? In another story, we look at the biggest U.S. development projects, a list that’s topped by the World Trade Center site (see page 34). De Blasio has criticized public-private partnerships as too often giving away the store, but it’s hard to see the negatives here. And isn’t it a positive that London’s most successful developers, the Candy brothers (who we cover on page 28), are looking to build here? If the Candys develop a high-end project that attracts more foreign money, isn’t that good for everyone? Building pricey projects isn’t mutually exclusive from pursuing big affordable housing initiatives (like those undertaken by the Bloomberg administration). Furthermore, there are the entrepreneurs who are transforming the real estate industry too, bringing transparency to how property is bought and sold (see page 40). And some of New York’s real estate dynasties are shining examples of what private developers can do. In our cover story, we look at what they own and what they’re developing today (see page 55). The Dursts, for example, led the charge in redeveloping Times Square, are co-developing One World Trade Center and lured Condé Nast Downtown. They’re also at the forefront of green building. While there are absentee landlords and real estate players who don’t take care of their buildings — those “worst landlords” that de Blasio has singled out — most developers are about investing in the city and creating value, which is a positive for everyone. It’s important for de Blasio — who seems to miss the fact that overall growth in the city will help everyone — to understand the distinction if he’s elected as the next mayor.

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© Douglas Elliman Real Estate. Equal Housing Opportunity. 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. If your property is currently listed with another real estate broker, please disregard this offer. It is not our intention to solicit the offerings of other real estate brokers. We cooperate with them fully.

Stuart Elliott www.TheRealDeal.com October 2013 13

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

By Hayley Kaplan ew York City real estate reached a new high last month: A unit at the exclusive Midtown co-op River House hit the market for a whopping $130 million, becoming Manhattan’s priciest-ever residential listing. Meanwhile, Manhattan sales activity is through the roof: the borough saw 3,837 closed sales in the third quarter, a dramatic 30 percent increase from 2,952 in the same period of last year, according to a market report released by the brokerage Douglas Elliman. So why are overall sales and rental prices declining? The average price of a Manhattan apartment in the third quarter was $1.43 million, a 0.7 percent decline from $1.44 million in the same quarter of last year, according to Elliman’s report. The median price, meanwhile, dropped 2 percent year-over-year to $872,000, down from $890,000. Miller Samuel’s Jonathan Miller, who prepared the Elliman report, cited mortgage rates as the explanation for these seemingly incongruent trends.

Mortgage madness

Thanks to rising interest rates, activity is up but prices are down

Mortgage rates have been steadily rising since May, which Miller said has pushed previously undecided homebuyers off the fence as they rush to take advantage of low rates. Most of these buyers, for whom interest rates can make a big difference in the affordability of a new home, are at the low end of the market, he said. As a result, apartments that traded in the third quarter tended to be smaller than those that sold in the same period of

while, the vacancy rate for rental apartments climbed to 1.31 percent in August, up from 1.19 in the same month of last year. One reason rents have finally started to decline, said Elliman broker Ariel Cohen, is that tenants have finally had enough of the stubbornly high rents and fast-paced market, and are buying apartments instead. But the sales market is also tight, with listing inventory still on the decline. In

Manhattan saw 3,837 closed sales in the third quarter, a dramatic 30 percent increase from 2,952 in the same period of last year. last year — hence the drop in overall prices. Rents are also on the decline, meanwhile, after months of rapid increases. The average monthly rent for a Manhattan apartment reached an all-time high of $3,461 in August of last year, but had dropped to $3,434 in August of this year, according to a report from Citi Habitats, the largest rental brokerage in the city. Mean-

the third quarter, the number of available sales listings dropped 21.9 percent to 4,567, down from 5,847 at this time last year. That, combined with the recent uptick in activity, means competition for apartments is intense, Miller said. “The inventory shortage is not easing, and it’s made it more challenging because we’ve had this sharp increase in sales in 2013,”

Miller explained. “You’re taking inventory that was already low and you’re confronting it with a much heavier sales volume, which is making the market move even faster.” Cohen agreed. “This whole year has been characterized by high demand and low inventory,” he said, “and that’s only going to continue.” But that doesn’t mean the palatial River House listing is going to fetch its asking price. The property joins three other Manhattan homes currently on the market with nine-figure prices: the $125 million penthouse at the Pierre, the $115 million penthouse at the One Beacon Court on 58th Street, and the $100 million CitySpire penthouse. Miller said these eye-popping prices are calculated to make headlines rather than reflect the units’ true market value. “Now that you’ve got four properties [priced at] $100 million or over, the gimmick to attract eyeballs in this realm has been overplayed,” he said. “These properties have been languishing for a long time, so it’s not clear whether this $100 million threshold has been supported by the market.” TRD

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16 October 2013 www.TheRealDeal.com

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Ending the inventory crisis Insiders say no relief in sight — for two to three years, at least

By Hayley Kaplan ecent years have seen some of Manhattan’s buzziest and most luxurious new developments — 432 Park Avenue and One57 among them. But these pricey new condo buildings are doing little to reverse the current Manhattan inventory shortage, experts told The Real Deal. The number of new development units currently in the pipe-

line is too small to address the inventory shortage, experts said. Resales also remain in short supply; with credit tight and the economy still uncertain, many homeowners can’t afford a new, larger home, so they’re delaying putting their units up for sale. Due to these factors, experts agree that it will likely be several years before the city sees a noticeable uptick in the number of homes on the market.

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In the meantime, many homeseekers may be out of luck, especially since most of the new

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construction units hitting the market are priced at or above $3 million, which makes them accessible to only the upper 10 percent of Manhattan buyers, he said. “The new supply coming on is targeting the luxury market,” Miller said. “But what about the other 90 percent?”

Crunching the numbers The current inventory crunch has its roots in the recession and credit crisis, which halted many underconstruction residential projects and scuttled plans for new ones. As a result, the “pipeline [for new projects] ran dry by 2009,” Miller said. At the same time, tight credit, job losses and reduced incomes have prevented many homeowners from putting their homes on the market, since they can’t afford to upgrade to bigger units. “You have a lot of people [who] can’t trade up or make a lateral move because they no longer qualify for credit,” Miller said. “If you don’t qualify for credit, you’re not going to sell.” As a result of these factors, inventory is at records lows: In mid-September, there were 4,342 Manhattan homes on the market, down 25.7 percent from 5,847 in the third quarter of 2012, according to data from Miller Samuel. By comparison, when inventory was at its height in the first quarter of 2009, 10,648 units were on the market. New construction has recovered somewhat from the depths of the recession, but there are only about 6,200 new construction condo units due to hit the market over the next few years, according to data compiled for TRD by the brokerage the Marketing Directors. That’s up from 5,580 in the pipeline at this time last year, but it’s still not enough to meet the demand for New York City homes: The Marketing Directors estimated that some 5,300 new construction and resale condo were purchased in Manhattan last year alone. The absorption rate — the amount of time it would take for all units on the market to sell at the current pace — in Manhattan in the second quarter was just 4.6 months, Miller Samuel’s data shows, down 41.8 percent yearover-year from 7.9 months. In addition to the overall lack Continued on page 100

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By the Numbers

Going to Gracie-land A

fter the final ballot has been counted in next month’s election, New York City will have a new mayor for the first time since 2002. Whoever wins will get the keys to the city and to one of the most valuable homes in New York — Gracie Mansion, the official mayor’s residence at East End Avenue and 88th Street. Republican nominee Joe Lhota told the Daily News that he’d make Gracie his weeknight home, but might spend his weekends at his current abode in Brooklyn Heights, while Democratic nominee Bill de Blasio said the extra space would be tempting, but that he’d wait until elected to decide where to live. “We fight over the bathroom all the time … Gracie obviously has a little more space,” he told the paper. Here’s a look at the storied Upper East Side residence that one of the candidates will be inheriting. Compiled by Evan Bleier and Candace Taylor

$5,625

Archibald Gracie

The amount of money Archibald Gracie paid for the property that he built Gracie Mansion on in 1799.

Number of en-suite bathrooms on the second floor of Gracie Mansion. Bloomberg’s townhouse on 79th Street

Number of bathrooms in de Blasio’s house, which he shares with his wife and family.

$30 million

Estimated market value of Mayor Michael Bloomberg’s five-story townhouse at 17 East 79th Street, where he’s chosen to live instead of Gracie.

$3.5 million

$450,000

Bill de Blasio and family outside their Park Slope home

The price de Blasio paid for his house in 2000.

$200 million

Estimated market value of Gracie Mansion, if it were to sell on the open market today.

Gracie Mansion, which was built in 1799, is the city’s official mayoral residence.

11 Joe Lhota

Estimated value of Joe Lhota’s three-bedroom co-op in Brooklyn Heights.

$1.1 million

Estimated value of Bill de Blasio’s Park Slope row house.

$6,950

Average home price in the U.S. in 1942, the year that Gracie Mansion became the official residence of the mayor of New York City.

$1.42 million

Number of acres Gracie Mansion sits on.

Average sales price of a home in Manhattan in the second quarter of 2013.

Acreage of the Southampton home, known as the Ballyshear Estate, that Bloomberg bought for $20 million in 2011.

Number of mayors who have lived at Gracie since 1942. (Bloomberg is the only one who’s opted not to.)

Sources: Town Residential, NYC.gov, New York Daily News, The New York Times, Bureau of Labor Statistics, Miller Samuel, Wall Street Journal and New York Post

Homes owned by Bloomberg around the world.

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Compiled by Yaffi Spodek

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20 October 2013 www.TheRealDeal.com

9/27/2013 3:45:00 PM

the

Desk

of:

cott Spector’s 34th Street office overlooks the bustling intersection at Madison Avenue. And that seems appropriate, because the 45-person architecture firm he leads is bustling now, too. The firm — which was founded by his father and bears his name — is the executive architect on the $250 million Pelli Clarke Pelli redesign of the World Financial Center’s retail pavilion. The glass structure will include 177,000 square feet of retail, and will link to the World

Scott Spector Trade Center transit hub. Meanwhile, the firm also just completed an interior build-out for high-end French liqueur purveyor Pernod Ricard at 250 Park Avenue, and in 2010, it wrapped up a massive archival storage space for Christie’s, the auction house. Among the 40 to 60 projects that Spector says his firm currently has underway is a new Volkswagen/Audi dealership on 11th Avenue. This month, Spector gave The Real Deal a tour of his own digs. B y G uelda V oien

This decorative wrought iron railing speaks to the history of the building, 183 Madison Avenue. Before it was converted to an office, this second floor space was a lingerie shop, and the railings framed the lacy displays. “We love them,” Spector says.

10 This brick was a thank-

you from Volkswagen. It was a challenge to design a dealership that would sell both Volkswagen and Audi brand cars, he says — the two spaces “share many functions,” but he wanted to give them “separate identities.”

3 6

8 7

4 1

This photograph of a New York City subway car was taken by

Michigan wide receiver Desmond Howard takes up an entire wall in

Belgian artist Luc Dratwa and was a gift from Spector’s wife. While

the firm’s conference room. “I can’t tell you how many projects we’ve

the couple lives on Long Island, Spector avoids taxis when he’s in

been considered for,” because of his Michigan affiliation, Spector

the city. “I live on the subway,” he says.

says. For example, the firm designed the Fifth Avenue headquarters

for Wellcare, a nursing home whose head of real estate attended This espresso machine is invaluable for meetings with European

the school. Alas, Spector has not worked with Michigan’s highest-

companies, whose employees often eschew drip coffee, Spector says.

profile real estate alums — the Related Companies’ Jeff Blau and

The Spector Group designed a massive showroom for Mercedes,

Stephen Ross — but “would love the opportunity.”

below the Mercedes House luxury rentals on Manhattan’s West Side, and designed the Manhattan dealerships for fellow German auto

manufacturers Volkswagen and Audi that are currently being built.

named Quirky. The firm crowdsources ideas for innovative items,

This unusual pen container was made by a company fittingly

and then manufactures them on a large scale. The Spector Group

Spector attended the University of Michigan, as did his brother,

sister, wife, daughter and many of his employees. The die-hard

designed the company’s 606 West 28th Street space, which included

an industrial-grade “testing kitchen” for new products.

Wolverine is an especially big fan of Michigan football. He prefers college sports to the NFL, but says he does admire New England

Patriots quarterback Tom Brady (also a Michigan alum).

Takajo, which he attended as a child. His two sons now attend the

This was the last baseball Spector hit over the fence at Camp

all-boys camp in Maine.

Spector has done a number of projects for NASDAQ, including

the 2010 renovation of the stock exchange’s corporate headquarters

at 1 Liberty Plaza, as well as work for its offices in Washington, D.C.,

business professor at Northwestern University who is known as a

Beijing, and London.

negotiations expert. Spector says he uses her advice regularly. He’s

These self-help materials were written by Victoria Medvec, a

even started imparting his wisdom in a monthly column for the This 20-foot-by-20-foot photograph of former NFL and

22 October 2013 www.TheRealDeal.com

Commercial Observer. PHOTOGRAPH FOR THE REAL DEAL BY chris martin

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.

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Manhattan office stats

Commercial Ma r k e t

AVAILABILITY AVG. ASKING RATE RENT

Small deals thrive as pricey space sits

Manhattan asking rents rise as expensive office listings languish By Adam Pincus trong activity in smaller and mid-sized Manhattan office deals, combined with little new supply, helped firm up the Manhattan commercial leasing market during the third quarter. In addition to the improved leasing activity, asking rents rose 4 percent for Manhattan overall — to $59.14 per foot last month (at the end of the third quarter) from $56.61 per foot in June (at the end of the second quarter), according to data from commercial firm Colliers International. Meanwhile, the overall availability rate, which measures space available now or over the next year, fell by 0.6 points, to 11.5 percent. But those increased asking rents are a little deceiving. Colliers’ Chief Economist Peter Kozel attributed the rise to the fact that moderately priced office space has been getting snapped

up, while more expensive listings have not. Market statistics reflect these higher asking rents. “We have had a lot of inexpensive space leased in the last two quarters … at very competitive rents,” Kozel said. “The market is getting more expensive because of the space that is remaining.” Data from CoStar Group backs that up. It shows some of the most expensive buildings in the city with large blocks of space available. For example, Solow Realty & Development’s 9 West 57th Street has more than 500,000 square feet listed as available — about 41 percent of the Plaza District building.

Midtown

A small block of pricey Midtown space hit the market last month in another Plaza District tower, 527 Madison Avenue, helping to drive up asking rents.

The average asking rent for Midtown last month was $69.36 per square foot, up a significant $3.27 per foot over the June figure, the Colliers figures show. At the same time, the availability rate was down by 0.7 points, to 11.6 percent. The financial firm W.P. Stewart & Company — which is relocating to an undisclosed location within Midtown — put floors 12, 20, 21 and 24 at their current building, 527 Madison, on the sublease market. (The 20th and 21st floors feature a connecting spiral stairway.) While the asking rent was not given, CoStar shows that in 2010 one tenant there was paying $85 a square foot. Given the improved market conditions, rents are likely higher there now. The roughly 29,000 square feet of space at the 237,000-square-foot building, which is owned by Japanese firm Mitsui Fudosan America, was

listed by Transwestern. Lindsay Ornstein, a principal in Transwestern’s New York office, said late last month that she had a tenant looking to take two floors. “We have had a lot of interest from financial services firms and real estate investment firms,” she said. The lease runs through December 2017.

Midtown South Technology firms have been driving rents higher in Midtown South for a while now, but a new medical research facility can now take some of the credit, too. Indeed, 217,000 square feet was listed last month at the West Tower of the Alexandria Center for Life Sciences, a 421,000-squarefoot, under-construction research building on 29th Street between First Avenue and the East River, according to CoStar. The asking rent was not available. Alexandria Real Estate Equities, the real estate investment trust that’s building the tower, tapped Cushman & Wakefield’s William Hartman and Matthias Li to handle the listing. The Cushman brokers forwarded questions to Alexandria, which did not respond by press time. The drug maker Roche announced last year that it would take 91,000 square feet in the building, which is scheduled to be completed by the end of the year. The tower is the second in Alexandria’s life science center. The adjacent East Tower opened in 2010. Marisa Manley, president of the Midtown brokerage Healthcare Real Estate Advisors, said these types of medical research buildings are typically extremely specialized and don’t compete with normal office space. But demand for medical space is on the rise, which is impacting the overall market, she said. “We are seeing more of the plain vanilla conversion of office

Manhattan Sep ’13 11.5% $59.14 Jun ’13 12.1% $56.61 Midtown Sep ’13 11.6% $69.36 Jun ’13 12.3% $66.09 Midtown South Sep ’13 9.1% $53.08 Jun ’13 9.2% $51.52 Downtown Sep ’13 14.7% $47.48 Jun ’13 15.9% $46.20 Source: Colliers International

space into medical space,” to the north of the Alexandria towers, said Manley, who is not involved in the project. Asking rents in Midtown South (for all varieties of office space) rose $1.56 per square foot to $53.08 between the end of the second and third quarters, according to the Colliers statistics. The availability rate during that period declined by 0.1 point, to 9.1 percent.

Downtown The Downtown office market tightened substantially last month. One firm that added to that tightening was the nonprofit Village Care of New York, which assists the elderly and people living with HIV. The organization — which was previously headquartered in Midtown South — signed a 15-year lease last quarter with Silverstein Properties for space on the 28th floor at 120 Broadway, according to information from commercial leasing data firm CompStak. William Montana, a managing director at Studley, represented the tenant. Neither Montana nor Village Care responded to requests for comment by press time. Downtown’s overall availability rate fell substantially between the second and third quarters, tightening by 1.2 points, to 14.7 percent, the Colliers figures showed. At the same time, the average asking rent rose by $1.28 per foot, to $47.48 per foot. TRD

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In their words...

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

“I’d like to talk to you about how great the properties are … but now is not the time. I’ve got a lot of shit going on right now, and I’m not going to talk about it with a reporter.” Robert Durst, an estranged member of the Durst real estate clan, when asked about his growing Brooklyn portfolio. (DNAinfo)

“If there’s even a 1 percent risk that someone won’t like it, then why would you do it?” Property Markets Group’s Kevin Maloney, on developers’ tendency to skip the 13th floor in their building projects. (Wall Street Journal)

“Yes, it’s a crazy amount of money for a room, but demand is crazy, too. When your entire business model is based on 15 weekends a year, you need to charge high rates to make your investment back.” Jayma Cardoso, co-owner of the Surf Lodge hotel in Montauk, on charging $2,000 per night for a two-bedroom suite.

“I never thought I would build this whole project. I would have to be an insane mad man to think I am building all of these buildings.” Architect Daniel Libeskind, master planner of the five-skyscraper World Trade Center site, on changes to his original design for the Freedom Tower. (The New Yorker)

“The binding of the book became loose when my father died. The pages fell out after my mother died.” The Feil Organization’s Jeffrey Feil, on tensions with his siblings over the family business. (Wall Street Journal)

26 October 2013 www.TheRealDeal.com

“Retail is all about branding. When you look at the street — Zara, Levi’s, Aeropostale, Forever 21, Geox — there is a reason none of them are in the Empire State Building.” Robert Futterman, CEO of the brokerage RKF, on how signage restrictions at the landmarked tower keep high-profile tenants away.

“This sculpture will be the greatest tourist attraction in New York. It will be more than the Christmas tree in Rockefeller Center, [and for] 365 days a year. It will be to this city what the Eiffel Tower is to Paris.” Related Companies founder Stephen Ross, on plans for a sculpture in a public plaza at Hudson Yards. (Fortune)

“Clearly, retail has not been our strong suit.” William Ackman, head of Pershing Square Capital Management, in a letter to investors regarding his failed campaign to overhaul J.C. Penney. Ackman in August sold his entire stake in the retailer. (New York Post)

“Ross is not cool.” A note from David Schwimmer’s neighbors in the East Village, lambasting the “Friends” star for razing a historic townhouse to build a new mansion. (New York Post)

“You didn’t walk on that side of the street.” Republican mayoral nominee Joe Lhota, on living across the street from a “crack den” on the Upper West Side 30 years ago. (The New York Times) www.TheRealDeal.com August 2006 00

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Candy Land

Have the British developers finally found their NYC sweet spot?

By Guelda Voien ritish developers Nick and Christian Candy are famous for their über-luxury condo One Hyde Park in London, the priciest residential project in the world. But when it comes to Manhattan real estate, the brothers searched for years for a sweet spot. Now it looks like they may finally have found it. With the August purchase of an Upper East Side townhouse, the brothers are taking on their first New York City redevelopment project — albeit a small one. The Candys first made headlines in New York last March, when Christian bought the final sponsor unit at the Plaza, a $25.9 million penthouse. (The unit, which the Candy’s interior design firm reportedly renovated, is now listed with Brown Harris Stevens’ Kyle Blackmon for an eye-popping $59 million.) And the brothers — 40-year-old Nick, the alleged “party boy,” and former derivatives trader Christian, 39, the numbers guy — have made no secret of their hunt for more U.S. real estate, since the British government last year announced increased taxes on high-end home sales. Indeed, in an interview with Bloomberg News last year, Nick said New York could “overtake” London on the real estate front if its leaders continue to make “disgraceful decisions” on taxes. Then, this summer, Christian bought 19 East 70th Street, an Italian Renaissance-style mansion between Fifth and Madison avenues, for $35 million. The Candys declined to be interviewed for this article, but a representative for their design firm, Candy & Candy, confirmed that they will convert the 17,000-square-foot house to residential use. The eight-bedroom home was last used as an art gallery, and the Candys will reportedly turn it into a single-family mansion. The spokesperson also told TRD that they do not plan to live in the home, suggesting that they are likely to sell it once renovations are complete. Broker Adam Modlin, who’d listed the property for $38 million, did not respond to requests for comment. Possibilities for the 30-foot-wide home are numerous, said Jed Garfield, managing partner with brokerage Leslie J. Garfield, which sold the home next door. He noted that the townhouse has a massive basement that could accommodate a pool. When the project is complete, Garfield said, “I am sure it will be both successful and shockingly expensive.” A revamped single-family home in that location would Continued on page 106

28 October 2013 www.TheRealDeal.com

Nick and Christian Candy

Getting financing for a New York City project is especially difficult for out-of-towners, sources said — even if those out-of-towners are internationally known developers.

Left: The 86-unit, $1.8 billion One Hyde Park is the priciest residential development ever built. Middle: At One Hyde Park, the Candys teamed up with the Prime Minister of Qatar. Right: Christian Candy is redeveloping 19 East 70th Street.

www.TheRealDeal.com January 2011 25

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STEPS FROM GRAND CENTRAL 46th St btwn. Fifth & Madison Aves Size: 2,528 to 5,364 SF+/- for lease

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TOWNHOUSE MEDICAL SPACE 69th btwn. Park & Lexington Aves Size: Size: 1,800 SF+/- for lease

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REGULATING REAL ESTATE

Reverse mortgages tightening up Change will reduce the amount seniors can draw down on their homes By Kenneth Harney or homeowners who were looking to the federal government’s reverse mortgage program to supply lots of cash for their retirement years, here’s a heads-up: The pipeline just got narrower. Pressed by Congress to slash losses, the Federal Housing Administration last month outlined a series of steps designed to limit the maximum amounts that seniors can draw down on their homes and to make qualifying for a reverse mortgage tougher. Starting in January, applicants for FHA-backed reverse mortgages will for the first time have to qualify under comprehensive new “financial assessments” — covering credit history, household cash flow and debt levels — to make sure they have the “capacity and willingness” to meet their financial obligations under the terms of the loan. At the same time, they may also be required to set aside sizable portions of their drawdowns to handle property taxes and hazard insurance for years to come. As early as next month,

obtain will be reduced by about 15 percent, compared with the popular “standard” version of the program that has now been phased out. Borrowers who take more than 60 percent of the maximum amounts available to them upfront will also pay substantially higher insurance premiums. The changes are likely to reduce the attractiveness of reverse mortgages to large numbers of seniors, according to some industry specialists. Matt Neumeyer, owner of Premier Reverse Mortgage LLC in Atlanta, estimates that as many as 40 percent of previously eligible borrowers will look at the reduced limits, the new financial assessments and higher fees and say: no thanks. “You’re offering me less on my house for a whole lot more hassle” — that’s how clients will see it, Neumeyer said in an interview. “A lot of people are going to balk.” He offered this example of how the reductions would work. For a 70-year-old owner with a $200,000 house, the standard version of

The FHA last month outlined steps to make qualifying for a reverse mortgage tougher. some applicants will also be required to pay substantially higher FHA insurance premiums if they pull out hefty amounts of funds upfront at closing. Reverse mortgages are limited to homeowners 62 and older, and allow them to use the equity in their properties to provide funds for their retirement years. Borrowers need not repay their principal balances — plus compounded interest charges — until they move from the home, sell it or die. FHA’s insured reverse-mortgage program, which is hawked aggressively by TV pitchmen including former Tennessee senator Fred Thompson, Henry “the Fonz” Winkler and Robert Wagner, dominates the field. But losses to FHA’s insurance funds caused by reverse mortgages have mounted in recent years, and could trigger a nearly $1 billion bailout by the Treasury. FHA hopes to avoid that, however. The newly imposed eligibility and drawdown rules are intended to cut losses and help achieve greater financial stability for the program, according to Carol Galante, FHA’s commissioner. Limits on the amounts that seniors can draw down, higher mortgage insurance fees and rigorous financial vetting of applicants are worrying some lenders and brokers active in the program. They estimate that the maximum drawdowns seniors can

30 October 2013 www.TheRealDeal.com

the program would have offered a total “principal limit” — the amount available to the borrower — of $132,600. Under the revised program, that will be cut by nearly $20,000 to $112,800, provided the applicant can make it through the financial assessment hoops. And if the borrower wants to pull down more than 60 percent of what’s available, he or she will get hit by higher mortgage insurance premiums. Add in the set-asides for future property taxes and hazard insurance that may be subtracted from the initial drawdown of funds, said Neumeyer, and many borrowers will look at either selling their home or obtaining a home equity line. Deborah Nance, a reverse mortgage specialist with iReverse Home Loans LLC in the Los Angeles-Riverside market area, agrees that fewer seniors will qualify, and that those who don’t will be predominantly borrowers with lower incomes, higher household debt loads and more marginal credit histories — “the needy people” who previously would have taken the maximum lump-sum drawdown to pay off mortgages and other obligations but now will be prevented. Nonetheless, she said in an interview, “We’ll still be able to help a lot of people.” Ken Harney is a syndicated columnist.

GOVERNMENT BRIEFS Aqueduct Race Track faces closure The New York Racing Association is considering shutting down the financially troubled Aqueduct Race Track in Queens, an action that could also lead to the closure of the successful casino next door, Crain’s reported. During the first six months of this year, the NYRA had a $10.3 million operating loss, more than double the loss of the same period in Aqueduct Race Track 2012, the Albany Times Union reported. Once revenue from video lottery terminals at the adjacent Resorts World Casino at Aqueduct was added, however, the group reported a net income of $8.1 million. Gaming industry experts said it would be difficult not only for Aqueduct but for race tracks operated by NYRA at Belmont and Saratoga to make a profit on their own; the horse racing industry, with its aging fan base, is on the decline nationwide. By contrast, Resorts World at Aqueduct, which opened in 2011, touted record revenue in March of $71.2 million. But state law requires establishments with video lottery terminals to be tethered to a race track, so keeping the casino open without the track would require a change in state law.

Home loan limits to be reduced for Fannie, Freddie The Federal Housing Finance Agency is preparing to shrink the maximum size of home mortgages eligible for backing by Fannie Mae and Freddie Mac, the Wall Street Journal reported last month. The aim is to reduce the role of government in the mortgage market and make room for more private lenders, but critics say the plan could decrease the number of eligible home-buyers and slow the nation’s housing recovery. Currently, Fannie and Freddie can back mortgages with balances as high as $417,000 in most parts of the country and up to $625,500 in expensive housing markets such as New York City. Federal officials haven’t yet announced the new loan limits, which would take effect Jan. 1, 2014.

Balazs to redevelop JFK’s TWA terminal The Port Authority of New York & New Jersey has tapped hotelier Andre Balazs to redevelop the iconic TWA terminal at John F. Kennedy International Airport, the New York Post reported. Balazs will transform the building into a hotel and conference The TWA terminal center to be called the Standard, Flight Center. The project will also include food and beverage options, retail space, a spa and fitness center, meeting rooms and a flight museum. Designed by architect Eero Saarinen, the TWA terminal opened in 1962 and was designated a historic landmark by the city in 1994. “It is a great honor to be entrusted with the preservation and revitalization of this masterpiece by my personal architectural hero,” Balazs told the Post. The final design would need to be approved by the Port Authority. Compiled by Sanna Chu

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new development

Tallying the biggest new buildings in the U.S. A look at the largest projects constructed since the credit crunch

W By Tom Acitelli

ith all of New York City’s megadevelopments — from the Hudson Yards site to the World Trade Center complex — it’s easy to forget that there are also giant real estate projects being built elsewhere in the country. The Real Deal attempted to remedy that this month by taking stock of the most significant projects across the U.S. since the credit crunch ended the mid-2000s real estate boom. Using data from the commercial brokerage Marcus & Millichap and research firm CoStar Group, we ranked the biggest projects under construction or completed between 2008 and now. Some of those projects are indeed located in the Big Apple, where the economic recovery was faster than it was elsewhere in the country. But South Florida and Las Vegas — which

World Trade Center Towers Location: New York, N.Y. Size: 8.7 million square feet (total)

he 16-acre World Trade Center site in Lower Manhattan is one of the most significant projects in the country — and the most well-known. The three towers underway at the site — Towers 1, 3, and 4 — each made the top 20 list and were tallied together by TRD. They’ve been in various stages of planning and construction since at least 2006, five years after terrorists crashed two planes into the original World Trade Center towers and destroyed them. The 1,776-foot, 3 million-square-foot One World Trade Center, which is 104 floors, is the tallest tower in North America. After topping out earlier this year, it is expected to open by spring 2014. The tower cost co-developers the Durst Organization and the Port Authority of New York & New Jersey between $3.8 and $3.9 billion to build. And as virtually everyone in the New York real estate industry knows, it will The World Trade Center site,where Towers 1, 3, and 4 are all underway. WTC developer Larry Silverstein, inset.

are of course both popular among tourists and as second-home destinations — have also seen a number of major projects. The buildings on the top 20 list — which were ranked by developable square feet — include hotels, condos, resorts, casinos, office towers, apartment complexes, and megamalls. They range in size from the 1.9 million-square-foot Phoenix West II Hotel in Alabama to the 7.4 million-square-foot Palazzo Resort Hotel Casino in Nevada. The New York projects that made the cut were three World Trade Center site buildings, the Bank of America tower at 1 Bryant Park and Goldman Sachs’ headquarters. (Only single buildings were included, not multibuilding projects like Hudson Yards.) Below is a look at the biggest new-construction projects of the past five years.

and is expected to be completed in 2015, after delays over financing and securing tenants halted work. The Silverstein Properties–developed tower is expected to be 1,170 feet high and include 2.86 million square feet of office space. Financing for the tower has purportedly hit $2.8 billion. (Silverstein and the Port Authority have, however, been quoted placing costs more in the $1.3 to $1.5 billion range.) Meanwhile, construction on the 978-foot, 2.84 millionsquare-foot 4 World Trade Center started in 2008 and is scheduled to be completed this fall. Silverstein has spent $1.67 billion in state bond money and insurance on the tower, which will be anchored by the Port Authority’s roughly 600,000-square-foot headquarters.

The Palazzo Resort Hotel Casino Location: Las Vegas, Nev. Size: 7.4 million square feet

hen it officially opened in January 2008, this 7.4 million-square-foot, $1.8 billion casino-resort complex displaced the Pentagon in Washington, D.C., as the largest building in the U.S. It’s also about 700,000 square feet larger than the world’s next biggest casino-resort, the Marina Bay Sands in Singapore, which was built by the same developer, Las Vegas Sands Corp. And when the Palazzo first opened, billionaire Sheldon Adelson, the CEO of Las Vegas Sands, had no qualms about the investment he made. “We will cannibalize” the resort’s competitors, Adelson told USA Today. “We’re going to take customers from other hotels.”

When it opened in 2008, the 7.4 million-square-foot, $1.8 billion Palazzo Resort Hotel Casino in Las Vegas displaced the Pentagon in Washington, D.C., as the U.S.’s largest building. be anchored by publishing giant Condé Nast, which signed a more than 1 million-square-foot lease in 2010. (The building’s 120-foot concrete base, added for security reasons, is off-limits to commercial tenants.) Construction of 3 World Trade Center started in 2012, 34 October 2013 www.TheRealDeal.com

million to TIAA-CREF. It also noted that the combined retail at the Grand Canal Shoppes is 99 percent leased up and generates more than $1,000 a square foot in sales. One source said rents there likely vary widely and that smaller retailers probably pay between $150 and $225 per square, including taxes and other expenses. The mall is anchored by an 85,000-square-foot Barneys New York and includes a Lamborghini dealership. It also includes restaurants from celebrity chefs like Mario Batali, Wolfgang Puck and Emeril Lagasse as well as the world’s largest Canyon Ranch Spa Club. Suites at the Palazzo start at $149 and go up to more than $800.

With 3,068 hotel suites, a 105,000-square-foot casino and a 450,000-square-foot shopping center, the project is connected to the famed Venetian, which Las Vegas Sands also built. In May, the megamall company General Growth Properties announced that it sold a 49 percent stake in the so-called Grand Canal Shoppes at the Palazzo and Venetian for $410

The Palazzo Resort Hotel Casino in Las Vegas is the largest building in the U.S. billionaire developer Sheldon Adelson, inset.

Westin Resort at Tarpon Point Marina Location: Cape Coral, Fla. Size: 4.2 million square feet

eveloper Bob Hensley spent between $150 and $160 million to create more than eight acres of marinas, pools, restaurants and spas as well as a pair of condo buildings and a condo-hotel with fully furnished rooms. The waterfront complex opened in 2009 as the Resort at Marina Village. But Hensley’s now-defunct Florida firm, Grosse Point Development, lost control of the resort due to financial troubles shortly after it opened, when a European lender called in loans that the firm couldn’t repay. Starwood Hotels & Resorts Worldwide took control of the 531,000-squarefoot hotel-condo, reopening it as the Westin Resort at Tarpon Point Marina in 2012. Other elements of the resort, including

new development

The biggest U.S. projects in the last five years Rank / Building Name / City

Building status

Property type

Developable area (in sq. ft.)

1 World Trade Center (Towers 1, 3, 4), New York

8.7 million

2 The Palazzo Resort Hotel Casino, Las Vegas

7.4 millon

3 Westin Resort at Tarpon Point Marina, Cape Coral, Fla.

4.2 million

4 American Dream Meadowlands, East Rutherford, N.J.

2.8 million

5 Trump International Hotel & Tower, Chicago (tie) 6

(tie) 8

2.69 million

EnV Brickell Apartments, Miami

2.65 million

(tie) 6

2.65 million

Paramount Bay, Miami

2.5 million

Volkswagen Group of America, Chattanooga (tie) 8

Parkland Hospital, Dallas

2.5 milion

10 Seton Medical Center Hays, Kyle, Tex.

2.4 million

11 Gaylord Nat. Resort & Convention Cntr., Nat. Harbor, Md.

2.3 million

(tie) 12

Aliante Station, North Las Vegas

2.2 million

(tie) 12 1200 Haley Drive, Cherokee, Ala.

2.2 million

(tie) 14

One Bryant Park, New York

2.1 million

World Market Center, Building C, Las Vegas

2.1 million

Kamakana Villages at Keahuolu, Kailua Kona, Hawaii

2.1 million

(tie) 14 (tie) 14

17 200 West Street, New York

Office

1.9 million

Trump International Hotel & Tower

Underway Hospitality

A rendering of the American Dream Meadowlands, which has gotten state funding. N.J. Gov. Chris Christie, inset.

2 million

18 Phoenix West II, Orange Beach, Ala. Existing

for the development, on top of the nearly $2 billion already spent since 2003. Jeff Gural, chairman of the neighboring New Meadowlands Racetrack and of commercial firm Newmark Knight Grubb Frank, said Triple Five has “a terrific track record, both in Minnesota and in Canada.” “They have the benefit [of the fact] that a couple of billion dollars have been lost already,” he said. “You’re building a $3 billion project, but it’s only costing you a billion.” (The basketball arena for the former New Jersey Nets is also in the area as is the NFL stadium for the Jets and Giants). Triple Five will announce a new construction timeline as well as fresh details for the megaproject (the ski slope is, for now, expected to remain) before the end of the year, as soon as financing arrangements are locked in, according to spokesperson Alan Marcus. Triple Five plans to put up $200 million of its own money, Marcus added.

Retail

Residential

Industrial

Health Care

Source note: Data from Marcus & Millichap Research Services and CoStar Group. Includes development projects underway or completed in 2008 or after. Chart covers construction of single projects. As a result, Brooklyn’s Atlantic Yards and Manhattan’s Hudson Yards were not included nor was a project in Saratoga Springs, N.Y., featured in a story on page 36. TRD added the square footage at the World Trade Center towers together.

the condos, are either owned by individual homeowners or controlled by other investors. Westin declined to reveal the terms of its takeover. The average daily rate for the 260-plus hotel rooms is $139 a night, according to CoStar (though rates can run to more than $700 a night). Condos, even waterfront ones, have sold in the low six figures. Many were snapped up by snowbirds from the Northeast and Midwest. “Second-home sales are kind of our business, so to speak,” said Tamara Pigott, executive director of the Lee County Visitor & Convention Bureau. “If you’ve ever been on the east coast of Florida, you’ll understand why they want to come here. It’s a lot more laid-back pace here on the west coast.”

The Westin Resort in Cape Coral, Fla., was taken over by Starwood Hotel & Resorts shortly after it opened in 2009. Starwood Capital’s Barry Sternlicht, inset.

American Dream Meadowlands (Meadowlands Sports Complex) Location: East Rutherford, N.J. Size: 2.8 million square feet

Location: Chicago, Ill. Size: 2.7 million square feet

Flex

his retail behemoth — which sits on 104 acres of former swampland in northern New Jersey — has been reimagined multiple times in the last decade. It was originally conceived as the Meadowlands Xanadu — a joint venture between Mack-Cali Realty, the Mills Corporation and the New Jersey Sports and Exposition Authority — with a mall anchored by outdoors equipment retailer Cabela’s and an indoor ski slope. But construction stalled in 2004 when Mills went bankrupt. Construction was restarted four years later by a group of lenders who took over after the Mills bankruptcy, but it stopped again in early 2009, when the Lehman Brothers’ bankruptcy dried up financing for the project. In 2010, the Related Companies proposed taking over the stalled project and renaming it, simply, the Meadowlands. The next year, however, New Jersey Gov. Chris Christie stepped in on behalf of the state, which had provided millions in grants and wanted to fix what the governor considered “an eyesore.” He picked Canadian mall operator Triple Five as the developer. The firm, controlled by the Ghermezian family, renamed the project the American Dream Meadowlands, and has said it will model it after another of its projects: the Mall of America in Minnesota, the nation’s largest mall. Triple Five has put up $1.7 billion

hicago’s second-tallest building after the Willis Tower opened in January 2008, just in time to give principal developer Donald Trump a financial headache. Later that year, Deutsche Bank — the primary lender on the approximately $875 million, 1,389-foot condo-hotel — called in a $40 million loan, which Trump had personally guaranteed. Continued on page 102 Trump International Hotel & Tower. Developer Donald Trump, inset.

www.TheRealDeal.com October 2013 35

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A $14 billion bet — and not on the horses

In the biggest New York State project outside the city, a tech firm is transforming horse-racing Saratoga County By Tom Acitelli his spring, Eastview Development started construction on the Esplanade, a 294-unit apartment rental complex in Upstate New York just outside Saratoga Springs. The demand for the new complex is being driven by a single factor: a massive new development just down the road. GlobalFoundries — a Santa Clara, Calif.–based semiconductor manufacturer owned by the government of Abu Dhabi — already has thousands of employees working on its existing 2.4-million-square-foot facility — called Fab (as in fabrication) 8.1. But last month it won zoning approvals to build a second facility, this one 2.3 million square feet, called Fab 8.2. It reportedly plans to spend a colossal $14.7 billion on the

To date, Fab 8.1 has produced more than 17,000 area jobs (both on its campus as well as servicing the new population of employees and residents). Paul Sausville, supervisor of Malta, the town of approximately 15,000 where GlobalFoundries is located, said GlobalFoundries has helped Saratoga County achieve one of the lowest unemployment rates in the state. “It’s 5.7 percent, which is pretty good in this economy,” he said. The project is also having a major ripple effect for development and real estate in the area. More than 600 apartments have been approved for construction in Malta, with an additional 5,000 single-family homes in the county, according to the Saratoga Economic Development Corporation. Almost 3,500 new homes and 1,000 apartments are going

An aerial shot of GlobalFoundries’ 2.4-million-square-foot facility in Upstate New York

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Manufacturer GlobalFoundries is reportedly in talks with Apple to manufacture the chips it needs to make its laptops, iPhones and iPads run. site, including construction, surrounding infrastructure and technology investments. The approval comes on the heels of reports that GlobalFoundries is in talks with Apple to manufacture the chips it needs to make its laptops, iPhones and iPads run. While the company declined to comment on the rumors about Apple, snagging the computer company as a client would be a game-changer — for both the company and the region. A spokesperson said Fab 8.2, which would be adjacent to Fab 8.1, is still pending, and published reports note that the construction timeline may depend on whether Apple and other technology companies sign on as clients. Although there is no public database that tracks all planned projects, Fab 8.2 appears to be New York State’s biggest development outside of New York City. (See page 34 for an accompanying story on the biggest developments in the country.) The project has already turned this once-sleepy area, principally known for its horse-racing tracks and mineral springs, into a destination for engineers, business executives and other tech talent. And sources say that will only continue once the new campus gets underway.

up in in the nearby town of Halfmoon alone. Local officials said they expect the current pace of development to keep up with the job growth spurred on by GlobalFoundries. For now, the current housing stock is absorbing the newcomers. “There’s some hope that we’ll kind of come into balance,” once the new housing construction is complete, Sausville said, “and, over the long haul, as we have more and more jobs, there will be a greater balance between the housing that’s available and the jobs that are here.”

If you build it The presence of GlobalFoundries in Saratoga County isn’t an accident. It’s the result of careful planning by local and state officials ever since the tech company Samsung considered setting up a chip-manufacturing plant in New York State in the late 1990s, but decided against it. (Ironically, the reason GlobalFoundries might have a chance in clinching Apple as a client is because the computer company is reportedly considering dropping Samsung, its current chip manufacturer.) Local and state officials vowed such a Continued on page 112

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Pr o f i l e

Leaving the Commune

After an abrupt split, Jason Pomeranc prepares to regrow his boutique hotel business

Jason Pomeranc in the lobby of his flagship hotel, 60 Thompson, in Soho

By David Jones n 2011, Jason Pomeranc had everything a young hotelier could want. After turning his family’s real estate company, the Pomeranc Group, into one of the hottest hospitality brands in the country, the suave world traveler had a bevy of celebrity friends. He also had a newly formed partnership deal with Hyatt heir John Pritzker, which gave him what he’d long coveted: access to hundreds of millions of dollars in capital and a pathway to global expansion, which would hopefully grow his Thompson Hotels brand into a powerhouse that could compete with industry icons like Ian Schrager. The new, joint company would be called Commune Hotels & Resorts. But in August, without much warning, the partnership fell apart. Pomeranc agreed to sell off his family’s stake in Commune, along with all but five of their hotels. He also agreed to give up his Thompson and Tommie brand names. Now Pomeranc, 42, is reassembling his original team to launch a new hotel brand, in a bid to regain the magic he once had. In an interview last month in the lobby of one of his remaining hotels, his flagship 60 Thompson, Pomeranc told The Real Deal that he expects to announce the

38 October 2013 www.TheRealDeal.com

“When you put that group of volatile personalities together, if it all works out, greatness happens. But if not, there’s conflict.” Jason Pomeranc name of his new brand this month. He said he may tap new capital partners and expand to 12 cities worldwide, and spend millions adding new touches to existing properties. “We’re going back to our core, tightly held principles,” he said. Pomeranc was reluctant to divulge the details of his split with Pritzker. But he did note that the fast-growing lifestyle-hospitality sector is undergoing a tumultuous period. Also in August, the Chetrit Group and King & Grove dissolved their partnership. And last month, hotelier André Balazs sold a stake in his hotel brand, the Standard, and put his Meatpacking District hotel of the same name on the auction block. “There’s a lot of intensity in the lifestyle hotel market,” Pomeranc said. “One [reason] is because it’s a growing market. If you look at the percentage of lifestyle or boutique hotels in relation to the rest of the industry, it’s still a tiny segment. Therefore you have a convergence of capital and strong personalities. When you put that group of volatile personalities

together, if it all works out, greatness happens. But if not, there’s conflict.” Pomeranc’s supporters are confident that he’ll emerge from the split with Pritzker even stronger than before. His friend and advisor Jeffrey Davis, a managing director at Jones Lang LaSalle, called Pomeranc a “visionary” who knows how to establish a truly forward-thinking brand. “You can take any hotel building and put [in] interesting interior design and slap some paint on it and call it a lifestyle hotel,” said Davis. “Most of these fall short. A lifestyle hotel needs a visionary and impresario.”

The reinvention act Pomeranc said his new venture will develop ground-up hotels in New York and other major cities. He noted that it may also renovate and rebrand the boutique hotels the Pomeranc Group still controls: 60 Thompson, Thompson LES and 6 Columbus in New York, and the Thompson Beverly Hills in California. (As part of the agreement with Pritzker, Thompson LES

and Thompson Beverly Hills will change their names, Bloomberg News reported.) It was initially reported that Pomeranc would also retain control of Miami Beach’s art deco Hotel Victor, where Commune announced a management deal in 2012. But Pomeranc told TRD last month that he is no longer involved in the hotel, where owner Nakash Holdings recently completed a major renovation and changed the name to Thompson Ocean Drive. Nakash said last month it is considering combining the hotel with the adjacent Versace Mansion. “Due to the adding of the former Versace mansion to the project, we have mutually decided with the Nakash family not to participate in the project,” Pomeranc said through a spokesperson. But Pomeranc said he’s in the process of negotiating two New York hotel deals, which he expects to close in the next few months. He added that the company will expand through third-party management deals and may bring in new capital partners. To help him do all this, he’s recruited www.TheRealDeal.com 2011 25 PHOTOGRAPH FOR THE REAL DEALJanuary BY JEREMY WILLIAMS

Pr o f i l e longtime colleague Stephen Brandman, the former co-owner and CEO of Thompson and CEO of Commune. As for the new brand name, the blog Hotel Chatter reported that Civilian Hotels has been trademarked by an entity with an address next door to 60 Thompson. Pomeranc confirmed that his company trademarked the name, but denied that “Civilian” is the new brand name. Still, he said the soon-to-be-announced brand will combine “comfort and luxury [with] a little bit of a rougher edge in some of the fixtures and architecture.” Luckily, Pomeranc has experience building a brand from the ground up. His father, a Polish immigrant, launched the Pomeranc Group in the 1950s. The company developed affordable housing and airport hotels, including the Marriott Hotel at Newark International Airport and the Ramada Hotel at LaGuardia Airport. But in the late 1990s, Jason and his two older brothers, Michael and Larry, took the company in a different direction, eventually growing it into one of the more cutting-edge hospitality players. Jason, a lawyer, joined the family business in 1997, after traveling extensively in Europe and following a stint at the real estate firm Rosenberg & Estis. After joining the company, he spearheaded a move away from big-box airport hotels and towards boutique projects in Manhattan. He and his brothers brought in Brandman, tasking him with helping expand the company into independent hotel ownership and property management under partnerships with other developers. Jason said he and his brothers stumbled onto the 60 Thompson site when they saw a “for sale” sign in front of a former garage. They proceeded to assemble a series of parcels in the mostly residential area, buying the air rights of six different properties. “There were a lot of people that questioned the wisdom of building a pure hotel in a Downtown unproven location,” Pomeranc recalled. But the family hired interior designer Thomas O’Brien to convert the building into a 97-room hotel, which launched in 2001. A few years later, they added Kittichai, a high-end Thai restaurant led by chef Ian Kittichai of the famed Spice Market. Sources said a crucial factor in the success of boutique hotels is a trendy restaurant and bar scene. And within a few years, 60 Thompson had managed to become a go-to hideaway for New York’s celebrity set. Meanwhile, the Pomeranc Group grew its new Thompson Hotels brand, as Jason cultivated a circle of friends in the entertainment and fashion worlds. In 2000, the company acquired the old West Park Hotel at 6 Columbus Circle. In a venture with Rosen Partners, the firm renovated the 88-room property, which reopened under the name 6 Columbus. The Pomer28 March 2012 www.TheRealDeal.com

ancs also partnered with LaSalle Hotel Properties to convert a former Holiday Inn at 15 Gold Street in the Financial District into the Gild Hall hotel. But not every property was a runaway success. Pomeranc partnered with Tribeca Associates on Smyth Hotel & Residences at 85 West Broadway, the first Thompson property with condo units. The 15 condos were listed just before the real estate downturn, and were taken off the market only to return at discounted prices. Meanwhile the hotel’s restaurant, Plein Sud, was panned by critics, and a legal dispute arose in 2012, when Tribeca

Tribeca Citizen reported. An eatery called the Restaurant at Smyth is now operating in the space. In addition to these wrinkles, Thompson needed more capital to grow. That’s where Pritzker came in.

A new partner Pritzker, son of the late Hyatt Hotels billionaire Jay Pritzker, left the family business in 1988 to strike out on his own. Pritzker and his childhood friend Tom Gottlieb co-founded Mandara Spa, growing it into the world’s largest spa operator before selling it off in 2001. The two then launched the San Francisco-based Geolo Capital, which invested

The Hotel Victor in Miami Beach, where Pomeranc is no longer involved

ested in, and [he] wanted to get into the California market,” Pritzker told TRD. Pritzker and Pomeranc in 2011 announced a joint venture with 45 properties under the Joie de Vivre and Thompson names, and combined revenues of about $500 million. The partnership was “organic,” recalled Pomeranc. “It was a good collaboration at the time.” They installed Brandman as CEO and changed the name to Commune Hotels & Resorts. Then they set out to quickly expand. In 2012, Commune announced management deals with the Hotel Victor and the 353-room Hotel Sax in Chicago. In New York, Thompson was tapped to take over management of a new hotel project at 5 Beekman Street, where the landmark Temple Court office building was being converted into a 297-room hotel with 90 condos by Allen Gross’ GB Lodging. (Since the break-up with Commune, Pomeranc is no longer involved in the project. But sources who know Gross say he tapped Thompson because he wanted the relationship with Pomeranc, so it’s unclear what impact the split will have on the project.) And in May of this year, Commune launched the value brand Tommie, which is slated to open its first two properties: a 250-room hotel on 31st Street in Manhattan, and 329-room hotel in West Soho.

Problems in paradise

Left: The Smyth Hotel & Residences at 85 West Broadway, the first Thompson property with condo units. Right, top: Hyatt heir John Pritzker, who dissolved his partnership with Pomeranc this summer. Right, bottom: Stephen Brandman, the former CEO of Commune who is working with Pomeranc on his soon-to-be-unveiled new brand.

Associates filed suit against the Pishyar family, the restaurant’s financial backers. According to the suit, the Pishyars fired restaurateur Frederick Lesort and installed a member of the Pishyar family in his place. From then on the quality of service “declined severely, and management of the restaurant became increasingly chaotic,” said William Brodsky, managing member of Tribeca Associates, in an affidavit. Brodsky and lawyers for the Pishyars declined to comment. The case was settled last month. Plein Sud closed in August along with the hotel’s Toro Lounge bar, the website

in entertainment and hospitality ventures, such as the Carmel Valley Ranch in California. Looking to expand his hotel investment portfolio, he bought a majority stake in San Francisco-based Joie de Vivre, at the time the nation’s second-largest boutique hotel firm. His plan was to acquire between $300 and $500 million in hotel assets over five years, and grow Joie de Vivre from 33 hotels in California to about 60 nationwide. He tapped Pomeranc to help him expand to the East Coast. “Pomeranc had 10 hotels and gave us the East Coast presence we were inter-

But by late 2012, signs of internal strife had begun to appear at Commune. Sources familiar with the company said the Pomerancs, used to operating as a small, nimble family business, clashed with the Pritzker team’s more corporate mentality. Meanwhile, the institutional investors behind Geolo Capital were growing impatient for returns. “Pritzker comes out of a family business that ran a very large chain of hotels,” said Nakash Holdings Director of Real Estate Jon Bennett, who worked with Commune at Hotel Victor. “If you look at Jason and the kind of business they’ve run, it’s more focused on what you get if you run a smaller kind of boutique operation.” One flare-up came about when Pritzker brought in former Kimpton Hotels president Niki Leondakis as Commune’s new CEO, effectively forcing Brandman out of the role, sources said. Brandman did not return repeated calls for comment. After the split was announced, Pritzker told Bloomberg News that the breakup would create “better alignment between management and money.” “It allows us to use our own capital, to grow our three brands in the way we want to, to have a single, focused management,” he said. “We won’t have two different points of view.” TRD www.TheRealDeal.com October 2013 39

Movers

and

Shakers

The industry’s hot new entrepreneurs The tech startups to watch, and how they’re changing real estate in NYC

By Hiten Samtani ompared to other major New York City industries, real estate is notoriously slow to innovate. A conservative business dominated for decades by the same handful of families, real estate hasn’t developed the equivalent of high-frequency trading, which rocked the securities industry, or BuzzFeed, the news-and-entertainment website that’s shaking up media advertising. There are, however, some new kids on the block who are successfully challenging the way the real estate business is done. Manhattan-based company Floored, for example, is using advanced vision science to give brokers and developers a new way to showcase their listings, while the crowdfunding company Fundrise has built an online platform to help developers gain support from both investors and their communities. And the much-hyped startup Urban Compass is aiming to make the hectic world of Manhattan residential rentals less painful for consumers. This month, The Real Deal looked at some of the most promising and innovative industry startups launched in the past three years, and examined how they are changing New York real estate.

LinkedIn for real estate: Honest Buildings Manhattan-based Honest Buildings is an online network that connects developers and landlords with engineers, architects, designers and other vendors. Essentially, it’s “LinkedIn for the real estate industry,” explained founder Riggs Kubiak, who was the global head of sustainability at development giant Tishman Speyer before leaving in 2011 to start his own venture. Kubiak got the idea for Honest Buildings, he said, because he was frustrated with how inefficiently real estate players go about finding vendors for their projects. “Hiring decisions [in real estate] for the last 2,000 years have been based on ‘who does my friend Jim know down 40 October 2013 www.TheRealDeal.com

the street?’ ” Kubiak said. “It just blew my mind that every other industry uses tech to catalyze transactions and make better decisions.” With Honest Buildings, he set out to create a more systematic way for commercial and residential developers to find the best vendors for their projects, he said. Here’s how it works. A developer or landlord submits their project details into the “HB Match” online platform, along with criteria for what they’re looking for in a vendor, such as years of experience or expertise with specific materials. The site then searches for matches based on those criteria, and comes up with the short list of vendors appropriate for the project. Analysts check the references of the vendors on the list, then introduce them to the client to kick off the bidding process. “We use our technology to get them most of the way,” Kubiak said, “and then our team does the rest.” Rather than charging clients, Honest takes a commission — typically between 3 and 5 percent — from vendors if they are hired through the network. Honest Buildings launched in March 2012, and has since built a network of 5,000 to 10,000 New York City vendors, Kubiak said. Clients include Vornado Realty Trust, Sitt Asset

Management, and Cushman and Wakefield’s property and asset management group, which used Honest Buildings to find engineers to work on 119 West 40th Street, a 355,000-squarefoot Midtown tower it manages. Abe Hedaya, director of operations at Sitt Asset Management, said the firm used Honest to find a contractor experienced in cast-iron facades to work on Sitt’s 450 Broadway in Soho. So far, Kubiak claims Honest Buildings has originated $42 million in business through HB Match. Given that amount, TRD estimates the company’s 2013 year-to-date revenue to be between $1.3 and $2.1 million. Kubiak declined to disclose current revenues, but said the company’s objective is “to be profitable in the near term. Based on our trajectory, we definitely think it’s possible.” Meanwhile, the 15-employee company has secured $5.5 million in Series A funding (the first round of significant startup capital) from investors such as RockPort Capital and the Wesley Group, and has raised $7.5 million overall, Kubiak said. In September, Honest moved into a 3,000-square-foot office at the iconic Woolworth Building at 233 Broadway.

“It just blew my mind that every other industry uses tech to catalyze transactions and make better decisions.”

As real estate professionals know well, one of the biggest challenges to marketing an under-construction building is that potential purchasers or tenants can’t actually see the space. Floored, a Manhattan-based company that launched in January, is trying to change that. Floored’s proprietary technology can take high-resolution, 3D scans of any interior or exterior space, said firm co-founder David Eisenberg. The result is a hyper-realistic virtual tour — somewhat akin to a video game — that lets users experience the depth, lighting and layout of the space. The technology is also interactive, so it lets users see what the space would look like if they were to move the furniture around.

Riggs Kubiak, Honest Buildings

Marketing with virtual reality: Floored

Movers

and

Shakers

From left: Floored founders David Eisenberg, Dustin Byrne and Judy He

who was selling her apartment, but didn’t want any of her personal items or family photos visible on the listing broker’s website. So “we scanned the apartment and stripped out all the furniture,” Eisenberg said. Floored, which is a vendor on the Honest Buildings network, is “the sexiest thing in the industry right now,” Kubiak said admiringly. “The way that these guys are taking a software approach [to real estate] is legitimately game-changing.”

Sharing market stats: CompStak

A 3D model by Floored

Floored’s product is far more realistic than most virtual tours, which are simply two-dimensional panoramic photos, Eisenberg said. “We want to give people full digital control over what it’s like to be inside the space,” said Eisenberg, a Harvard graduate who heads an 11-person army of software wonks. He wants Floored to become the industry standard in real estate marketing. “Our hope is that this can replace the photograph,” he said. Floored has nabbed a number of high-profile office and retail clients, among them Vornado, Cushman, CBRE Group, the developer Hines and Taconic Investment Partners. Colleen Wenke, a vice-president on the construction team at Taconic, used Floored’s technology in lieu of renderings to lease up 619 West 54th Street, a 330,000-square-foot office building. Taconic also plans to integrate Floored technology to showcase spaces on its main corporate website. “[It] helps to bridge the gap of experiencing the space — of putting furniture in, understanding how many offices could go in the perimeter, how many bodies can I put in,” Wenke said. “A video won’t tell you that.” Meanwhile, Hines is using Floored to lease up 7 Bryant Park, a 470,000-square-foot office building slated for completion in 2015, according to Dan Doty, a managing director at the firm. “People really want to be on the floor and walk the space to experience it,” he said. When that’s not possible, “this is a great way to fill that void.” Floored has raised about $1 million in funding to date, from investors such as Thomas Lehrman of the consulting and research firm Gerson Lehrman Group and David Vivero, the founder of the online rental management company RentJuice, which the real estate website Zillow purchased last year for $40 million. Floored’s revenue — calculated on a rolling basis — for 2013 is in the single-digit millions, Eisenberg said, and has grown steadily quarter-over-quarter. Plaudits for the product have come in from all corners. Architectural Digest magazine featured the company as one of its innovators of the year. And in June, Floored took the top prize in brokerage giant Realogy’s 100-company technology competition. In addition to commercial clients, Floored works with residential companies such as Better Homes and Gardens Real Estate, Sotheby’s International Realty and Stonehenge Partners.

“Our hope is that this can replace the photograph.” David Eisenberg, Floored Stonehenge used Floored to market its 101 West 15th Street rental project in Chelsea, for example, posting 3D scans of apartments on the website for renters to peruse, said Jonathan Fishman, who helps oversee Stonehenge’s retail and rental divisions. And Stonehenge intends to use Floored at 501 West 113th Street, a 100-unit rental project near Columbia University, he added. The technology would allow international clients — common near the university — to check out spaces without flying to New York, Fishman said. The technology can also cater to the whims of New York City’s elite. Eisenberg recently worked with an apartment owner in the Zeckendorfs’ legendary 15 Central Park West

“Comps” — details about pricing and other deal terms — are the secret sauce of office leasing. Historically, brokers shared comps in whispered conversations with their colleagues or dug them up from research reports, but were loath to discuss them openly. But CompStak, an online database of leasing comps launched in January 2012, has given them an incentive to do just that. Founded by former Grubb & Ellis broker Michael Mandel and programmer Vadim Belobravka, CompStak claims to have data on nearly all of the Manhattan commercial office deals completed in the past year. CompStak accomplished that by taking a novel approach to crowdsourcing: The site is free for brokers, but when they want access to a comp, they have to provide information about their own deals. By contrast, CompStak’s main competitor, Washington, D.C.–based CoStar Group, gets its data directly from brokerages, but charges brokers for information. And because it’s crowdsourced, CompStak sometimes has data that CoStar can’t get from firms, such as effective rent. Since CompStak is free for agents, it makes its money by selling information to institutional investors, real estate investment trusts, hedge funds and private equity firms who analyze comps to make investment decisions. Clients include Boston REIT Beacon Capital Partners, Malkin Holdings and Wells Fargo, according to CompStak’s website. The company declined to say how much it charges for these services, but this spring, Mandel predicted the firm’s revenue would reach $1 million for 2013. So far, the 30-employee startup has raised about $5.6 million from investors, and Mandel said the firm is focused on growing its national operations — CompStak currently operates in six markets, including San Francisco, Chicago and Washington, D.C. Mandel estimated that CompStak’s user base has grown an average of 160 percent per month over the past six months. The company is also launching new features such as CompStak Team, which allows brokerage teams to manage and share their comps with their colleagues in the same office — right now, CompStak only allows individual profiles. Andrew Phillips, a managing director in the capital markets group at Newmark Grubb Knight Frank, said CompStak

From left: Fundrise founders Benjamin and Daniel Miller, and Fundrise director of operations Max Kirschenbaum, with Benjamin’s dog, Zappa

www.TheRealDeal.com October 2013 41

Movers

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has proved useful for investment sales brokers trying to gauge what a building is worth. “The first thing you do when you value a building is look at the lease comps,” he said. “Michael’s is a pretty amazing story, considering this was a guy who was a leasing broker in the worst market on record,” said Phillips, who knows Mandel from his time at Grubb & Ellis. Indeed, Mandel said his time as a commercial leasing broker is what sparked the idea for CompStak. During office meetings, “most of the deals that were being talked about were big flashy deals at 9 West 57th Street, 375 Park, 510 Madison,” he recalled. “Unfortunately for me, I wasn’t doing deals in the Plaza District. On occasion, a deal would be mentioned that was relevant to me, but the process was horribly inefficient.”

Ori Allon, co-founder of Urban Compass

Crowdfunding for developers: Fundrise What if a community could actively shape a developer’s vision for new projects in their neighborhood — and benefit financially in the process? That’s the lofty goal of Fundrise, a Washington, D.C.–based crowdfunding company launched in 2012 by brothers Benjamin and Daniel Miller. “We’re looking to democratize investment,” said Benjamin, a stocky, bearded 37-year-old. He and 26-year-old Daniel are the sons of Herbert Miller, a major Washington, D.C., developer who is behind mixeduse projects such as Georgetown Park, Market Square and Washington Harbor. After working with their father in various capacities and at outside firms, the brothers spun off their own development company, WestMill Capital Partners, which has developed about $50 million worth of projects in the Washington area. But the brothers wanted to change developers’ current dependence on private equity money. “It doesn’t make sense for capital to come from absentee owners,” Benjamin said. They started looking for ways to raise capital from community-based investors, but they discovered that most real estate crowdfunding websites, such as Realty Mogul, only work with accredited investors — those with a net worth of $1 million or more who are permitted by the SEC to invest in private firms. Fundrise, however, takes on the cumbersome and expensive task of registering each development project with the SEC and taking it public, which allows unaccredited investors to get involved. The Miller brothers started by taking their own buildings public, then raising capital for them from the community. But the business has now evolved into a software platform that lets other developers do the same thing. On the Fundrise website, building owners create a profile describing the project they need funding for. Potential investors who log onto the site can then search for various projects, and even communicate with developers about what type of projects they would like to see in their neighborhood. If they decide to invest, they can do so directly through Fundrise. Fundrise, which has nine employees, makes its money through a combination of subscription fees from developers and a roughly 3 percent transaction fee for all funds collected. The brothers — who invested $3 million of the money they made from WestMill and their savings into the business — declined to disclose revenues figures, saying it was too early. Benjamin said he wants Fundrise to help change the adversarial dynamic between developers and the communities they work in. When community members are financially invested in a project, he said, they’re more likely to go to bat for a developer on a host of issues, such as zoning. For example, at a popular retail project the Millers did at 1351 H Street NE in Washington, Benjamin said, “When I had permits that were bogged down, I had hundreds of people emailing the permit officer.” In Washington, Fundrise has worked with developers such as Forest City Enterprises, the parent company of Forest City Ratner. And the firm recently started working with several 42 October 2013 www.TheRealDeal.com

MLS mavens: RetailMLS and Buyer MLS

Riggs Kubiak, founder of Honest Buildings

New York City developers, including Twining Properties, Jason Goodman of 3rd Ward, and David Belt’s DBI and Macro Sea. Belt — whose Macro Sea is developing the 84,000-squarefoot design incubator New Lab at the Brooklyn Navy Yard — said Fundrise “gives me the opportunity to have many more investors.” That’s helpful, he said, because lenders are sometimes unwilling to bankroll his non-traditional projects. He added that the Millers’ experience made the venture appealing to him. “If it was just some Internet kid who had the idea, I would never really get involved in it,” Belt said. “Dan’s really young, but he understands commercial real estate and financing, and he understands how people interact with investments. He’s 26 years old, with 20 years’ experience.” While Fundrise’s current model is to register a building with the SEC and take it public — a process that can take months and cost up to $50,000 — a proposed change through the federal JOBS Act would allow unaccredited investors to invest a portion of their investment in private firms, eliminating the need to take projects public at all, said Daniel. And the company expects to get a boost now that the SEC has lifted a decades-old ban on private companies advertising investments that aren’t registered with the SEC. CompStak founders Michael Mandel (left) and Vadim Belobravka

Much like office-leasing comps, there’s little publicly available information about retail spaces in New York City. RetailMLS, the first multiple-listing service dedicated purely to the retail industry, is attempting to fix that. RetailMLS was created by Benjamin Zises, a former retail broker at Mogull Realty who, like CompStak’s Mandel, was frustrated by of the lack of information. Commercial MLS platforms, such as San Francisco–based LoopNet and Washington–based CIMLS, have retail listings, but the information on them tends to be “inaccurate and not specific enough to trust,” Zises said. Retail real estate in New York City and elsewhere “is very behind from a tech standpoint.” On the RetailMLS website, by contrast, brokers can search listings using detailed, retail-specific criteria such as indoor and outdoor seating requirements, and whether the space is vented or has a built-in kitchen for a restaurant tenant. Those are the kinds of granular details that tend to get lost on sites that group retail with other commercial listings, according to Zises. The company launched its beta version in May 2012, and as of last month had over 18,500 listings, with slightly over 2,500 in New York City. Companies that have been listed on the site include Vornado, CBRE, Cushman, NGKF, Winick Realty Group and RKF. Basic search and listing is free, but RetailMLS charges a monthly subscription fee of $125 for premium features, such as the ability to save searches. Zises declined to disclose revenue, saying the goal at the moment is to “build a marketplace.” He did say, however, that RetailMLS has raised $2 million in seed funding from investors like Zillow CEO Spencer Rascoff and Ryan Slack, co-founder of PropertyShark. The company will soon go through its Series A fundraising round, Zises said. Another startup looking to tackle the MLS market, but on the residential side, is Buyer MLS, a Philadelphia-based company that launched in 2011. Buyer MLS aims to create the industry’s first database of potential homebuyers, according to chief marketing officer John Heithaus, who previously worked at Coldwell Banker and the MLS Metropolitan Regional Information Systems. One of the project’s backers is Manhattan real estate appraiser Jonathan Miller, CEO of Miller Samuel, who also serves as director of market insights at Buyer MLS. The idea, Heithaus said, is to keep track of homeseekers who aren’t quite ready to make a purchase — information that often slips through the cracks at brokerage firms. “The whole idea is to manage the process, because right now, [buyer information] is a perishable product,” Miller said. Continued on page 112

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FiDi investors change their tune

Buyers try new strategy, sticking with commercial instead of converting to apartments

By Katherine Clarke rue to its name, the Financial District was historically the center of business in New York City. But when it comes to commercial real estate, the area has taken a backseat to other Manhattan neighborhoods in recent years — especially since the 9/11 terrorist attacks. Indeed, most of the investors who snapped up office buildings in FiDi converted them into high-end residential condos or rentals. That’s now beginning to change, however. As several long-awaited megaprojects debut in the neighborhood — including One World Trade Center, the new Fulton Transit Center, and a new retail atrium at Brookfield Place (the former World Financial Center) — demand for FiDi commercial buildings is growing. And unlike in the past, investors are planning to maintain the buildings as office towers. Todd Korren, an executive managing director at investment sales firm Massey Knakal Realty Services, said he’s seeing “heated interest” from investors looking for Lower Manhattan office buildings as rents rise. “Investors think the office market will continue to tighten as tenants [who] have historically gone to Midtown South, Hudson Square and Meatpacking move to FiDi,” he said. The neighborhood “is definitely the value proposition.”

An active market Overall building sales are up significantly in FiDi. Indeed, five major office buildings below Canal Street traded hands in the third quarter. That’s up from just one each in the first and second quarters, according to data provided to The Real Deal by data company Real Capital Analytics. It’s

FiDi’s big building sales Address

Price

1 North End Avenue $200 million 180 Water Street

$154 million

100 Broadway

$150 million

123 William Street

$133 million

5 Hanover Square

$105 million

Source: Real Capital Analytics. Sales are from the third quarter.

also a significant increase from the third quarter of last year, when there were only two FiDi office building trades, RCA’s data shows. In August, Northwood Investors paid $150 million to buy the 380,000-square-foot office building at 100 Broadway from Meadow Partners and Madison Capital. Also this summer, California-based private equity firm CIM Group

acquired 335,000-square-foot 5 Hanover Square from institutional real estate private equity firm Savanna, while the investment advisory firm Emmes Asset Management agreed to pay $154 million for Melohn Properties’ 180 Water Street, a 509,000-square-foot tower. Meanwhile, East End Capital and GreenOak Real agreed to buy the 500,000-square-foot 123 William Street from the Chetrit Group for $133 million. And Brookfield Office Properties last month reportedly inked a contract to buy the 16-story, 560,000-square-foot 1 North End Avenue in Battery Park City for $200 million. And there are more potential sales coming down the pike. One of the next Financial District office buildings to trade may be 110 William Street, a 900,000-square-foot office property owned by landlord Kent Swig. Doug Harmon and Adam Spies of Eastdil Secured are marketing the property, which does not have a publicly available asking price. And the landmarked, 60-story 1 Chase Manhattan Plaza is also on the block. The 2.2 million-square-foot building, owned by JPMorgan Chase, hit the market in August with CBRE’s Darcy Stacom and Bill Shanahan, and is expected to fetch up to $1 billion. “It’s uncanny how sale prices and leasing activity have picked up in Lower Manhattan as the government has turned a corner on major infrastructure incentives,” said Mark Weiss, a vice chairman at commercial brokerage

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Newmark Grubb Knight Frank, referring to projects with government funding like the World Trade Center. “The more progress government makes, the more activity we’ll see in Lower Manhattan.” Of course, some of the developers buying up these properties will stick with the tried-and-true strategy of residential conversions. For instance, the Lightstone Group earlier this year paid nearly $1,200 per square foot for an office building at 114 Fulton Street, with plans to raze it to make way for a 463-unit residential tower. And in September 2012, Fisher Brothers and the Witkoff Group reportedly paid $943 per square foot for the American Stock Exchange Building at 22 Thames Street, where they plan to build a 428-unit residential property. And Emmes’ 180 Water 1

And indeed, homes prices in the neighborhood still outpace office rents, brokers said. The median monthly rental listing price for a Financial District apartment is $57 per square foot, according to the real estate website StreetEasy, while the median price per square foot for a condo in the neighborhood is $1,175. By contrast, the average asking rent for Downtown office space was $47.13 per square foot in the second quarter, according to commercial brokerage CBRE. But other investors have a new strategy for FiDi: buying office buildings and hanging on to them in anticipation of rents rising. In some cases, investors plan to complete capital improvement programs at these buildings, updating systems and renovating lobbies, to further 3

property is likely to remain commercial. And Scott Rechler of RXR Realty told TRD last month that his firm is considering acquiring 1 Chase Manhattan Plaza, and would maintain it as a commercial office tower, despite speculation that it could be turned into apartments or a hotel. A residential conversion would be problematic given the building’s landmark status, Rechler noted.

Rising rents RXR, like other investors, is confident that office rents in Lower Manhattan will tick up over the new few years, Rechler said at an industry panel event last month. When FiDi “get[s] through that awkward phase, it’s going to be an incredible place,” Rechler said. “If you have 5

1. Jared Kushner, who partnered with CIM Group to buy 2 Rector Street for $140 million, or $270 per square foot. 2. Kent Swig, owner of the 900,000-square-foot office property 110 William Street, which is on the market with Doug Harmon and Adam Spies of Eastdil Secured.

3. The 2.2 million-square-foot 1 Chase Manhattan Plaza hit the market in August with CBRE’s Darcy Stacom and Bill Shanahan. 4. CIM Group bought 5 Hanover Square from Savanna for $105 million.

5. In August, Northwood Investors paid $150 million to buy 100 Broadway from Meadow Partners and Madison Capital. 6. Emmes Asset Management agreed to pay $154 million for Melohn Properties’ 180 Water Street.

Street buy is also seen as a potential residential conversion, since its leases expire in 2015, but sources said it could also remain commercial.

maximize rents. While Brookfield Office Properties declined to comment on its plans for 1 North End Avenue, sources said the

patience, you’re going to be successful.” Financial District office rents and activity have already Continued on page 102

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

Establishing trust by delivering on our promises T R U S T. S E R V I C E . I N T E G R I T Y.

he owners of the Empire State Building publicly indicated that they were considering adding 11 floors to the 102-story tower 41 years ago this month. The declaration came after the iconic tower was eclipsed as the tallest building in the world by the World Trade Center in Lower Manhattan. Peter Malkin — an investor and manager of the building — said the owners were exploring the idea of demolishing the 16-story antennae tower at the top of the building as well as six of the top floors. They would then construct a new 33-story structure to top off the building. The new design would bring the building’s height to 1,494 feet, from 1,250 feet, and increase it to 113 stories. Empire State Building investor Peter Malkin “It is physically and financially feasible to do this, but we don’t yet have any definite decision,” Malkin told the New York Times. The building, which was completed in 1931, was the tallest building in the world for nearly 40 years. But in 1971, the 110-story Twin Towers, at 1,368 feet, took the title, and the Sears Tower in Chicago was set to beat that within a few years. The plan to increase the height of the Empire State Building, however, was never implemented.

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1972: E mpire S tate B uilding addition mulled

1952: Third Lincoln tube ousts 900 families

overnment officials announced 61 years ago this month that more than 900 families would be displaced from Manhattan’s West Side to make way for the Lincoln Tunnel’s third tube. The Port of New York Authority — today called the Port Authority of New York and New Jersey — said it would purchase about 90 buildings that housed thousands of low-and middle-income residents and commercial tenants to make way for entrances and exits for the new $90 million tube. The buildings were between Ninth and 10th avenues and 30th and 41st streets. The demolition began in 1953. The authority pledged to pay the families $100 each as well as up to $100 in brokers’ fees for relocation expenses. The 100 commercial tenants in the area re- 10th Avenue in the early ’50s ceived no assistance. “We’ll never get rooms like we have here,” Marie Muller told the New York Times. A Port Authority official later said more than 5,000 people were relocated because of the construction of the third tube. The tunnel’s first and second tubes opened in 1937 and 1945, respectively. The third tube, also known as the South Tube, opened in May 1957.

1907: T he P laza H otel opens

he famed Plaza Hotel — located at 59th Street and Central Park South — opened its doors 106 years ago this month. Financier Bernhard Beinecke, hotelier Frederic Sterry and builder Harry Black constructed the 19-story hotel for $12.5 million. The hotel — which was built in the style of a French Renaissance chateau — not only provided rooms for overnight guests, but was home to many of the city’s wealthiest residents. (In those days it was common to live in hotels the way people live in apartments today.) Alfred Vanderbilt, an heir to the wealthy family fortune, was the first guest to sign the hotel’s registry. Shortly before the Plaza opened, the New York Times reported that more than 50 percent of the rooms were spoken for by similar permanent residents, such as John Gates, an investor in the building who made a fortune from a barbed wire patent, and financier George Gould. The Plaza Hotel opened in 1907. The Metropolitan Life Insurance Company’s $5 million loan on the building was believed to be the highest ever for a hotel. The Plaza’s exterior was designated a city landmark in 1969, while portions of its interior were landmarked in 2005. Today the Plaza includes both a hotel — owned by the India-based Sahara Group and the Saudi Arabian firm Kingdom Holdings — and residential condos. Compiled by Adam Pincus

TEL: 212.219.0910 EXT.4004

NYC brokers sell the world

As the market tightens, Manhattan agents take on more listings in other countries

By Hayley Kaplan ast spring, Manhattan real estate broker John Barbato got a call from Spain. The owner of an 11room condo in Barcelona wanted to know if he would list the property. The seller had heard about a $60,000-per-

The seller, a high-profile figure in his native country, told Barbato he wanted an overseas broker to help maintain his privacy during the sales process. “There are people of a certain stature who don’t want everybody to know they’re selling their home,” said Barbato, who is now

crisis is still impacting many corners of the globe, but über-wealthy jet-setters largely immune to the economic turmoil are using it as an opportunity to snap up real estate. And international sellers are increasingly reaching out to New York brokers in hopes of getting more publicity — and wealthy

A Tuscan villa, listed by agents at Keller Williams NYC for $45.18 million

that marketing overseas properties offers an increasingly helpful way to earn extra revenue and make contacts in a tight market. Indeed, Manhattan brokers, faced with a shortage of available inventory at home, are more motivated than ever to market properties in other countries. That’s especially true since listing properties abroad can help them network with international clients who may be interested in buying in New York. “It happens pretty rarely that I find a buyer for [one of my] French [listings],” said Joelle Larroche, a broker at Douglas Elliman in Manhattan who is currently listing several properties in her native France. “But to do this creates contacts [with] people buying in Manhattan.”

American money

Priciest international properties listed by New York City brokers Listing price

Location

listing broker

$86.85 million

Tuscany, Italy

Frances Katzen, Elliman

$53 million

Tuscany, Italy

Richard Tayar, Keller Williams

$45.18 million

Tuscany, Italy

Richard Tayar, Tamara Kaplan, Jacquelyn Cuccaro, Keller Williams

$43 million

Anguilla, West Indies

Lisa Simonsen, Victoria Shtainer and Neal Sroka, Elliman

$30 million

Costa Rica

Jamie Reimer and Lyon Porter, TOWN

$29 million

St. Tropez, France

Sofia Falleroni, TOWN

$28.66 million

Paris, France

Laurence Nancy Asseraf and Joel Asseraf, Stribling

$27.29 million

London, England

Christopher Young, Stribling

$25.07 million

Cannes, France

Christopher Young, Stribling

$25 million

Tel Aviv, Israel

Michal Mizrahi, Elliman

$25 million

Florence, Italy

Matteo Mechelli, Stribling

$25 million

Fiji Island, Fiji

Antonio Cosentino, Corcoran

Source: The Real Deal survey of Manhattan brokerage websites.

month rental deal Barbato had done at Olympic Tower at 641 Fifth Avenue in Manhattan, and called the Stribling & Associates broker directly to ask if he would market the condo, plus another property in Ibiza, Spain. 48 October 2013 www.TheRealDeal.com

listing 18 Turo Park in Barcelona for $9.39 million and a four-bedroom Ibiza villa for $1.75 million. And he isn’t the only New York broker marketing overseas properties. The financial

buyers — for their listings. Although international listings tend to make up only a small part of brokers’ overall annual business — around 5 percent, agents estimated — industry insiders said

New York City brokers — especially those who originally hail from overseas — have always had a smattering of international properties. But recent market conditions have led more brokers to list homes abroad. In addition, the luxury real estate market is now more global than in the past. That means if high-end sellers want the best price for their homes, they have to market their properties outside their home country, explained Yolande Barnes, the director of residential research at London-based brokerage Savills. “Real estate has become a global investment commodity,” Barnes said. To that end, many overseas sellers look to New York brokers. Because Manhattan real estate is popular with buyers from all over the world, brokerage websites here are among the most-trafficked real estate sites in the world. Marie-Claire Gladstone, a Manhattan-based broker at the Corcoran Group, is a beneficiary of that higher web traffic. Gladstone is currently listing a $16.75 million château in St. Tropez, France, and recently got an inquiry about the property from a potential buyer in Australia, who had stumbled across the listing on Corcoran’s website. That buyer ended up making an offer on the home, Gladstone said, though the deal ultimately fell through. And, of course, many international sellers are hoping that enlisting a New York broker will help attract wealthy American buyers. “[Sellers are] definitely looking for the American money,” said Manhattan Douglas Elliman broker Frances Katzen, who is currently listing eight overseas properties, including an $86.85 million villa in Italy and a five-bedroom apartment in Sydney priced at $17.5 million. “It’s a way for the Italians and the Turkish and Middle Easterners to feel that they have the Western option or the American option.” In particular, marketing to Americans has increased in countries that have been Continued on page 108

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Vital Stats NameS : Alan Abramson,

67, and son, Adam, 33 Title and company:

Partners at Abramson Brothers BUILDING BLOCKS How many Manhattan buildings does Abramson Brothers currently own? Alan: Seven, but one is on a net lease. I’m going to guess it’s

a call that one tenant came down to the build-

a little better than 1 million square feet in total. [The largest

ing lobby in his [underwear] waving around a

building is] 501 Fifth Avenue, and it’s 156,900 square

Glock. It’s hard to trump that.

feet. [The smallest is] 71 West 47th Street, and it’s 91,500 square feet. The buildings in our portfolio are generally Class B buildings in Class A locations.

Alan, what’s it like working with your son? Alan: I lost my father in ‘83. So for 30 years I was here as a one-

How did you get into real estate?

man-band. But a CEO’s single

Alan: Abramson Brothers was start-

most important piece of busi-

ed in 1957 by my late father, Manville

ness is to provide for succes-

Abramson, and my late uncle, Junius

sion. I’ve hit a grand slam in

Abramson. On the way to working here

that regard. I go to sleep at

full-time, I [worked] at Helmsley Spear,

night knowing that this busi-

which at the time was the great power-

ness will be in immensely tal-

house. I had the privilege of being men-

ented, competent hands.

tored by some very great men, among them the late Harry Helmsley.

BOTTOM LINE You’re in the process of com-

Adam: I joined the firm a little over a year

pleting a $10 million resto-

ago. Before that I did equity research at

ration of your company’s head-

Lehman Brothers, got an M.B.A. at Whar-

quarters at 501 Fifth Avenue,

ton [School of the University of Pennsylva-

the historic Astor Trust building.

nia], then worked at the asset management

What made you embark on that

company Avenue Capital Group. I had always

project now?

expected to go into real estate, but it was important to me not just to go straight here but to develop skills and expertise so I would bring something different when I joined the firm.

Alan: I had thought about it [before], but hadn’t really put focused energy into it until I looked across the street [at the New York Public Library’s restoration, which was completed in 2011].

Are you looking to buy more buildings? Adam: [Our last acquisition] was about 20 years ago. [But]

Will rents increase as a result of the project?

one of the drivers of me joining the firm was to opportunisti-

Alan: What I’m fond of saying is that as at-

cally grow the business by adding buildings to our portfolio.

tached as we are to the aesthetics of this, it’s not

So we’re looking at pretty much every deal that’s out there,

an arts and crafts project. There’s a financial

and a lot of deals that aren’t yet.

motivation to make the asset more valuable.

Alan: It’s something that we want to do very much. But we

How did the recession impact your business?

don’t have to, so we’re not going to do anything stupid.

Alan: Profoundly. Times are better now. Our

LANDLORD LIFE

low $50s [per square foot] — they’re not quite

Do you have a tenant horror story?

where they were before the meltdown, but we’re

Alan: We’ve got a million of them. I think I have to go

almost back there. By Hayley Kaplan

rents currently range from the mid $40s to

with naked guy in the lobby — some time back, we got

50 October 2013 www.TheRealDeal.com

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Commercial

s ’ C

e Y t N esta s l e a i t re n a s y d ow much n H ey ow h t do day? to

By Adam Pincus eymour Durst and his brothers built six Manhattan buildings in a 12-year run. Paul and Seymour Milstein built 10 in about the same amount of time. And Lew and Jack Rudin built 11 in two decades. The breakneck pace of development — which was largely clustered in the 1960s and the 1980s — by those three families, and a slew of others, laid the foundation for many of New York City’s most established real estate dynasties. (Think Tishman, Fisher, Malkin, Resnick, LeFrak, Rose, and Zeckendorf.) Indeed, after passing down their real estate portfolios from one generation to the next, many of those families are sitting on bricks-and-mortar fortunes today. This month, The Real Deal looked at New York City’s top 10 real estate dynasties — those that stretch back a minimum of three generations and are still active. Then we ranked them by how much they own, and how much net operating income, or NOI, their New York City properties throw off each year — an estimate done by analyzing tax figures from the city’s Department of Finance. (We did not include additional business, such as property management, brokerage, banking, and condo development.) Each of the 10 families has taken slightly different paths, but all have remained significant Manhattan landlords or developers — even as aggressive real estate investment trusts like SL Green Realty and private firms like Related Companies have muscled into the business and soaked up a lot of the recent limelight. And they’ve faced big decisions along the way. Each family has to decide how much

00 January 2013 www.TheRealDeal.com

of its income to direct toward new — and by definition, risky — projects, and how much to pay out each year to family members. Douglas Durst, chairman of the Durst Organization, said the income from his firm’s buildings is directed into individual corporations, which then distribute the funds to shareholders. “The shares of the corporations are owned by the [family members’] trusts,” Durst said. “The corporations run the buildings. And they decide how much money has to go into the buildings or new ventures [and how much gets] distributed to the trusts.” These dynasties have created several billionaires, but not without drama through

“You’ve got to like each other. You spend a lot of time together, with a lot of friction.” Thomas Elghanayan, TF Cornerstone the years. The second generation of Milsteins split the family fortune into two companies; the Fishers lost a senior partner in a tragic plane crash, and the Dursts are estranged from one family member, who was tried (and acquitted) of murder. “All these are families that have shown they can stand the test of time,” said Bill Rudin, CEO of Rudin Management. “[Although] everybody has little bumps along the way, all are committed to New York.”

www.TheRealDeal.com October 2013 55

Commercial

B eyond

ego

While owning big buildings can be an ego boost, square footage is not the sole factor in how much money family businesses make. The leverage on the building, the rents, and the building’s expenses can be far more important in determining a property’s success. Tishman Speyer — which was founded in 1978 — knows about that success. The company placed No. 1 on TRD’s ranking with an estimated $568 million in NOI. It was followed by Rudin, which had an NOI of $315 million. The top five was rounded out by Durst ($287 million), Malkin ($179 million) and Fisher Brothers ($162 million). While some of the firms commented for the article, none of them confirmed or commented on the NOI figures. Each family has its own strategy for directing its income. For example, the Dursts tend to hold onto their properties’ cash flow, while the Speyers distribute much of theirs to partners. Of course, for a family to increase its real estate holdings means having to decide whether to diversify with equity and debt investments, own brokerage companies, or stick with the more-straightforward strategy of developing and owning real estate. Richard Anderson, president of the New York Building Congress, the construction trade organization, said all of these families have been successful because they’re generally cautious. “They invest strategically after careful consideration,” said Anderson. While most of the firms ranked by TRD appear to derive the bulk of their New York City income from existing buildings, two firms do not: Rose Associates and Zeckendorf Realty. Those two firms were difficult to assess because they rely more on brokerage and development than on traditional own-and-hold revenue-producing properties.

Tishman Speyer

Founded: 1978 Total NYC square footage: 16.4 million Annual NYC property NOI: $568 million

lthough Tishman Speyer’s New York City real estate portfolio has the highest total NOI at $568 million among the 10 family firms, the company keeps 1

1. Jerry Speyer 2. Rob Speyer 3. Robert Tishman 4. The Hearst Tower, which was completed in 2006, is the last building Tishman Speyer constructed in New York.

just a fraction of that money. That’s because the firm shares a greater amount of its profits with equity partners than any of the other dynasties. The company’s openness to outside capital has allowed it to grow globally well beyond its peers, with some 80 million square feet of space in nine countries, including China, India and Brazil. “Tishman is a significant player in the third-party funds business,” said Dan Fasulo, managing director at data firm Real Capital Analytics. The company has not attempted to acquire or develop any new property in New York since it defaulted on, and lost, Stuyvesant Town, the 11,200-unit apartment complex it purchased with partner BlackRock in 2006 for $5.4 billion. The firm — which is jointly run by Jerry Speyer and his son Robert — declined to comment for this article. But the last building it constructed in New York was the high-profile 856,000-square-foot Hearst Tower at 300 56 October 2013 www.TheRealDeal.com

Unlike the other families ranked here, both firms also work in the third-party brokerage business. Few of the firms on this list have maintained the furious pace of the development that their founding generations jump-started their businesses with, but some of them are incredibly busy today. Durst has been among the most active, having completed five buildings since 1999, with three major projects underway. Meanwhile, other firms have long been operating under-the-radar with few new projects, but are now reentering the development game. For example, Fisher Brothers — which has attempted several projects in the last decade to no avail — now has six projects moving ahead.

Family

friction

Of course, making a family business work requires families to get along. Thomas Elghanayan, one of three brothers who started the large residential rental firm Rockrose, knows that all too well. Rockrose split up in 2009, with Thomas and his brother Frederick creating an offshoot company called TF Cornerstone and his brother Henry keeping the Rockrose name with his own son, Justin. “You’ve got to like each other. You spend a lot of time together, with a lot of friction. And you’ve got to be able to compromise and not feel like you always got to have your way, and not feel bad about that,” said Elghanayan, TF Cornerstone’s chairman. Indeed, many of the companies that TRD ranked have also seen their own splits. Below is a look at the finances, the strategies and the dramas behind New York’s biggest real estate dynasties.

West 57th Street, which was completed NYC’s top dynasty families: in 2006. (The building is now owned by publishing giant Hearst.) While it hasn’t pursued new deals Rank Landlord Total Sq. Ft. NOI Total here recently, Tishman Speyer is incred1 Tishman Speyer $568 million 16.4 million ibly active elsewhere. In fact, a review of deals from RCA found that of the 10 2 Rudin Management $315 million 13.9 million families, it’s been the most active nation3 Durst Organization $287 million 9.5 million ally over the past year when it comes to large building trades. The firm is in con4 Malkin Holdings $179 million 6.7 million tract to buy a Chicago office building for 5 Fisher Brothers $162 million 5.6 million $211 million. And, in August it sold an office building in Washington, D.C., for 6 LeFrak Organization $116 million 9.5 million $183 million, according to RCA. 7 Jack Resnick & Sons $113 million 5.7 million It is also building San Francisco’s first speculative office tower since the finan8 Milstein Properties $111 million 5.8 million cial crisis, which it’s developing with JP 9 Rose Associates $29 million 1.4 million Morgan Chase Asset Management. Tishman Speyer was founded in 1978, 10 Zeckendorf Realty n/a n/a but its roots in New York date back to the Source: TRD used tax records from the city’s Department of Finance for 2013–2014. TRD late 1890s, when Julius Tishman foundsubtracted each building’s latest tax bill from the city’s net income estimates to determine ed Julius Tishman & Sons. That compathe actual NOI. In some cases, it was not possible to tally a firm’s complete portfolio because ny was taken public in the 1920s, creating the properties didn’t appear in public records or on a company’s website. Tishman Realty & Construction, which was last run by Julius’ grandson, Robert Tishman. (Jerry Speyer the 1970s as a glut of office space sat on the market. is Robert Tishman’s former son-in-law.) The firm was split into The last office building Rudin built was the two separate companies — Tishman Speyer and Tishman Con- 855,000-square-foot 3 Times Square, which was comstruction — in 1978 after the high-profile foreclosure of 1166 pleted in 2001. But it’s recently ramped up its residential Sixth Avenue, which it had built. 1 2

Whose buildings make the most?

Rudin Management

Founded: 1924 Total NYC square footage: 13.9 million Annual NYC property NOI: $315 million fter years of maintaining its vast portfolio of Manhattan buildings, Rudin Management has recently started ramping up its new development activity. Like the Dursts, the Rudins have maintained a laser-like focus on Manhattan. The company’s 33 Manhattan buildings — 10.2 million square feet of office space and 3.7 million of residential — bring in a combined $315 million in NOI each year. The company — which was founded by brothers Sam, Henry, Nathan and Edward Rudin in the 1920s — rose to become one of the most active builders of Manhattan towers during the 1950s, and hit its stride in the 1960s, when it was opening an average of one building a year. While it continued building after that, its pace slowed in

1. Louis Rudin 2. Bill Rudin 3. Rudin Management’s under-construction Greenwich Lane

www.TheRealDeal.com October 2013 65

Commercial development with several high-profile (and controversial) projects in Greenwich Village on the former St. Vincent’s Hospital site, which put it squarely in the spotlight. CEO Bill Rudin acknowledged that the firm backed away from new development for a period, in part because of the impact of the terrorist attacks in 2001. “Our city took a huge hit, so there was no real opportunity that we saw fit our level of return and what capital we would need to invest,” he said. “We focused on our existing portfolio.” But in 2012, Rudin opened a 42-unit condo conversion at 130 West 12th Street adjacent to the defunct hospital. The project sold out in eight months, with prices ranging from $1.42 to $12.85 million, and celebrity buyers like Rosie O’Donnell to boot. Now the firm is constructing Greenwich Lane — a collection of five buildings (with 200

Of all the families on TRD’s list, sources say the Dursts and the Rudins are closest to what most would think of as the classic real estate dynasty. condos) and five townhouses also in the St. Vincent’s footprint — in partnership with Eyal Ofer’s Global Holdings. Rudin said he partnered with Global Holdings because of the enormous capital needed to build in the city today. “The complexity and the risk factors to do a development are significant. My generation … [has] been very conservative about how we underwrite deals,” he said. Unlike some of New York’s other dynasties, Rudin employs a number of extended family members. Today eight of them work at the firm, including Bill’s children Samantha and Michael, Bill’s sister Beth, and Bill’s cousin Eric.

Durst Organization

Founded: 1915 Total NYC square footage: 9.5 million Annual NYC property NOI: $287 million hile conservative with its equity, the Durst Organization is actively building and expanding its portfolio. “There are 11 members of my generation, and there are 24 members of the next generation. And if we want to keep distributing [annual payments] to the family, we have to continue to grow,” said Douglas Durst, when asked why the company doesn’t just sit on its vast portfolio. The company has 12 New York City buildings and an annual NOI of $287 million. (The portfolio includes 10 office buildings, two residential buildings and three developments — the 711-unit Bjarke Ingels-designed residential building at 625 West 57th Street, a 570,000-square-foot, mixed-use tower at 855 Sixth Avenue, and the 3 million-square-foot 1 World Trade Center, where its partnering with the Port Authority of New York and New Jersey.) In 2009, it completed one of its most high-profile buildings, the 2.1 million-square-foot 1 Bryant Park, an office tower at Sixth Avenue and 42nd Street. That came 10 years after it finished the nearby 1.8 million-squarefoot 4 Times Square, the first speculative office building constructed in New York in nearly a decade. It, of course, snagged publisher Condé Nast as an anchor tenant. Of all the families on TRD’s list, sources say the Dursts and the Rudins are closest to what most would think of as the classic real estate dynasty. For the Dursts, that’s partly because the fourth-generation firm, which was founded in 1915 by Joseph Durst (grandfather to Douglas and Jody, the company’s president), has not deviated much from its initial mission of actively developing and

56 October 2013 www.TheRealDeal.com

While it’s not constructing any new buildings in New York, the firm is in the midst of a $500 million rehabilitation of the Empire State Building. Malkin Holdings has been in the news a lot lately because of Malkin’s proposal to take the iconic tower (along with 17 other properties) public. The firm has a unique business model that differentiates it from the other families on the list. That’s because company founder, legendary investor Lawrence Wien — Anthony’s grandfather — specialized in syndicating building ownership. Indeed, the Empire State Building and two other marquee buildings he purchased years ago — the 1.3 million-square-foot 60 East 42nd Street and the 543,000-square-foot 250 West 57th Street — remain syndicates today. The firm controls those buildings through minority stakes. Wien first started dabbling in real estate in 1934, but the company rose to fame in the 1960s when he and his son-in-law, Peter (Anthony’s father), partnered with Harry Helmsley to bring in the thousands of investors needed to buy shares at the three syndicated towers. Today, at least two dozen members of the extended Malkin and Wien families own shares in Empire State Building Associates, the company that owns the tower. Still, Peter, who is the company chairman, and Anthony are the only family members who work at the firm. 1

1. Joseph Durst 2. Seymour Durst 3. The Durst Organization’s One Bryant Park, which was completed in 2009 4. Douglas and Jody Durst

managing its buildings. The family, Douglas said, takes a conservative approach to securing equity. Rather than financing projects with outside money, it nearly always uses its own equity and often develops on its own. Its so-called board of managers is composed of the 11 family members who are beneficiaries of the family trusts and decide how the company’s cash flow will be allocated. (The family pays out millions each year to family members.) Douglas said the trusts are “generation skipping,” meaning that each generation has a limited say over the properties that directly benefit it. “We think we have created a very viable platform for a family business that is able to keep growing,” said Douglas, who added that the company works off a five-year budget. The dynasty does, however, come with the prerequisite family drama. Douglas’ older brother Robert, who is estranged from the family, has been connected to a series of mysterious deaths. He was acquitted of murder in Texas in 2002, though he admitted to dismembering his neighbor’s body — he claimed that the neighbor was accidentally killed while the two were struggling and a gun discharged. He was bought out of the family empire in 2006 for $65 million.

Malkin Holdings

Founded: 1934 Total NYC square footage: 6.7 million Annual NYC property NOI: $179 million ot surprisingly, the extended Malkin family derives much of its wealth from the company’s highest-profile and most-valuable asset — the Empire State Building. Malkin Holdings, which today is headed by Anthony Malkin, controls seven New York City office buildings and four retail properties, which reap a total NOI of $179 million annually — nearly half of which comes directly from the Empire State Building. (The company also owns seven other properties in the metro area.)

3 1. Peter Malkin 2. Anthony Malkin 3. Lawrence Wien 4. Malkin Holdings’ most famous (and valuable) property: the Empire State Building

Fisher Brothers

Founded: 1915 Total NYC square footage: 5.6 million Annual NYC property NOI: $162 million fter a long hibernation from development in New York, Fisher Brothers is now roaring back — but with a twist. While the firm constructed more than a dozen apartment buildings in the 1950s in the city’s outer boroughs, its heyday was in the 1960s, when it went on a Manhattan office tower building spree. By 1980 it had erected eight office buildings, totaling 6 million square feet. But now it’s going back to its residential roots, with more than 900 units in the works in six developments. Today its most high-profile construction project is

www.TheRealDeal.com October 2013 57

Commercial 2

4 1. Arnold Fisher 2. Kenneth Fisher 3. Fisher Brothers is partnering with the Witkoff Group on the 440-unit, Rafael Viñoly– designed 22 Thames. 4. Steven Fisher

the nearly 440-unit, Rafael Viñoly-designed residential tower at 22 Thames Street, where it’s partnering with the Witkoff Group to build what will likely be rentals. In addition, Fisher Brothers, Witkoff and Howard Lorber’s Vector Group plan to demolish 101 Murray Street in Tribeca and replace it with about 200 residential condos. Witkoff — who had never partnered with Fisher Brothers before these two deals — said he meets frequently with company head Arnold, Arnold’s sons Steven and Kenneth, and Winston, company founder Martin Fisher’s grandson. At one such meeting in the spring, they nailed down their terms for the Murray Street building bid in only 20 minutes. “Those are massive decisions that can take weeks or months, and we got it done in 20 minutes,” Witkoff said. He credited the speed to a strong relationship between the generations. And those aren’t Fisher Brothers’ only in-progress deals. Last December, it teamed up with developer Larry Silverstein and Capstone Equities to redevelop 3 Mitchell Place, which they plan to convert into an extended-stay hotel. In addition, the firm is converting the 72-unit apartment building 101 West 87th Street into condos, in partnership with private equity firm Blackrock. (Fisher told TRD the project is already sold out.) Those new projects follow on the heels of a smaller project, the 18-unit Warren Lofts, at 37 Warren Street, which had an initial sell-out price of $60 million. While developer Sonny Bazbaz — a former Fisher Brothers employee — was the public face of that project, the site is owned by Fisher. And Fisher has another rental in the works on 40th Street between Second and Third avenues, the company said. “The next several years will be an intense and exhilarating time,” Winston said. Today, Fisher Brothers owns 5.6 million square feet of office space in New York in four large buildings and rakes in a NOI of $162 million. After debt payments, the company gives about half of its income to partners. That’s because each of its buildings has a joint-venture partner who owns a 49 percent stake. For example, the company is partnered with Chinese real estate tycoon Zhang Xin at the 1.1 millionsquare-foot Park Avenue Plaza, data from RCA showed. 58 October 2013 www.TheRealDeal.com

Over the years, the family has seen its share of tragedy. In 2003, Anthony Fisher, a senior partner at the company, and his wife were killed in a plane crash. But its break from development began far earlier than that, in the 1980s. And before its latest wave of development, it created the City Investment Fund, which bought into Urban American’s $940 million Harlem portfolio in 2007. Its lack of development activity was not for lack of trying. It became bogged down in one of the city’s most ambitious private projects: In April 2005, the company teamed up with the famously mercurial Sheldon Solow to pay Con Edison about $600 million for a 9.2-acre site on the East Side along the FDR. The project stalled and devolved into a legal battle between the two parties, with Solow eventually buying Fisher out. The history of the firm: Martin founded a construction company, which his brothers, Larry (Arnold’s father) and Zachary, joined and renamed Fisher Brothers.

LeFrak Organization

Founded: 1901 Total NYC square footage: 9.5 million Annual NYC property NOI: $116 million he LeFrak Organization has a $116 million NOI in New York City, but that number may be a little deceiving because it has a giant New Jersey presence and thousands of additional outer borough units that it’s not publicly identified with. Also, company CEO Richard LeFrak has a fortune val-

While the company still owns LeFrak City, it’s sold many of its other New York holdings over the years. In 2007, for example, it unloaded 22 Brooklyn and Queens’ buildings for $251 million to Urban American. However, the company said it still owns thousands of units in the outer boroughs, many of which are not publicly identified with the firm and were therefore not included in TRD’s tally. Last year, however, it converted an office building in Rego Park into 108 residential units. The project, called Contour, was the firm’s first in Queens in 38 years, a company spokesperson said. Richard LeFrak told TRD that he and his two sons, Harrison and James, are the only family members who work at the firm. Today, he said, the only other people with ownership stakes in the company are his three sisters, who have “a small interest.” (He said his father bought out his own two sisters year ago.) Having few family members working at the firm is a plus, Richard said. “The luxury is not having to satisfy a lot of people who don’t actually work.” While the company has been quiet as a ground-up developer in New York lately, LeFrak said he’s attempting to assemble a large development site in Manhattan, though he stressed that he did not know when it would be ready. “It could be tomorrow, it could be in two years,” he said. He also said he was not interested in developing condos in New York, noting that more than 50 percent of the potential profit goes to taxes. “Condos are highly tax-inefficient,” in New York City, he said. “You are working for the government.” In the last few years, however, the firm has bought 11,000 condo units from distressed buyers outside the city, mostly in Florida and California.

Jack Resnick & Sons

Founded: 1928 Total NYC square footage: 5.7 million Annual NYC property NOI: $113 million fter building the 194-unit condominium 200 Chambers Street in 2007, the Resnick family halted ground-up construction. And today it doesn’t have any new projects on the drawing board. But the company — which was founded by Jack Resnick in 1928 and is run by his son Burton — operates more than 5 million square feet of office space and about 1,000 apartments. It has a NOI of about $113

1. Richard LeFrak 2. Samuel J. LeFrak 3. The 5,000 apartments at Lefrak City in queens bring in a NOI of $35 million, according to a TRD estimate.

ued at a stunning $5.6 billion, according to Forbes’ most recent ranking of the 400 richest Americans, which was released last month. That outranked Jerry Speyer, along with other high-profile developers like Sheldon Solow, Stephen Ross and Donald Trump. The company built a massive, multibillion-dollar, 600acre mixed-use community in Jersey City called Newport, which currently includes 14 apartment buildings (both rental and condo), a mall, a hotel, and eight office buildings. The firm has an extremely broad business model. It does everything from development to lending to investing in oil and gas. The company — which was started by Richard’s grandfather, Harry Lefrak, in 1901— grew substantially under Richard’s father Samuel. Samuel, who died in 2003, oversaw the development of tens of thousands of apartments in the 1960s, including the company’s most famous New York property, the affordably priced 5,000-unit LeFrak City in Queens. TRD’s analysis found that the complex has an estimated NOI of $35 million, a figure the firm disputed by did not correct.

1. The Resnicks 2. Jonathan Resnick 3. 200 Chambers Street, completed in 2007, was Jack Resnick & Sons’ last new development in New York. Continued on page 110

www.TheRealDeal.com October 2013 65

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new development

Development kings head for Queens Sixty large new residential projects — many clustered in Long Island City — are on tap as major Manhattan developers venture into the borough

By Katherine Clarke ew York City’s new development activity has long been focused on popular neighborhoods in Manhattan and Brooklyn. But with home prices on the rise in Queens, some major Manhattan developers are now venturing into the borough for the first time. Builders like the World-Wide Group, the Lightstone Group, L+M Development and Property Markets Group are building massive rental towers in Queens, most of them in rapidly developing Long Island City. Statistics on Queens’ new development are hard to come by, since the city’s largest brokerage firms don’t track transactions in the borough. But over the next three years, Queens is slated to see the construction of more than 8,000 units of new residential housing, according to estimates from the brokerage Aptsandlofts.com. That figure is a big increase from the immediate aftermath of the recession, brokers said, and it’s roughly on par with the pace of building in Manhattan, where approximately 5,350 new rental and condo units are expected to come online in the next 24 months, according to data from new development marketing firm Corcoran Sunshine. This month, using records from the city’s Department of Buildings as well as news reports and information from sources, The Real Deal identified more than 60 new apartment buildings with at least 10 units in the pipeline for Queens. While most are in Long Island City, neighborhoods like Astoria, Ridgewood and Flushing are also seeing residential construction. Developers are increasingly drawn to Queens — and especially Long Island City — because large development sites are still available there. Plus, home prices are rising as new restaurants and stores appear, said Mitchell Hochberg, president of Lightstone, which is currently leasing its 12-story, 199unit Gantry Park Landing project in Long Island City. The building is Lightstone’s first ever in Queens, and the company has plans for two more large Long Island City rental projects in the next few years, he said. “Long Island City in particular has matured to a point where it has both the infrastructure and the scale to be a real neighborhood that people want to live in,” Hochberg said. “Add in the easy commute [to Midtown] and the affordability factor, and you have a very exciting alternative to Manhattan.”

60 October 2013 www.TheRealDeal.com

The Lightstone Group’s Mitchell Hochberg at Gantry Park Landing in Long Island City, the firm’s first-ever project in Queens

Queens new development pipeline Address

Neighborhood

No. of units

Developer

45-46 Davis St.

Long Island City

1,000

The Wolkoff Family

43-25 Hunter St.

Long Island City

975

Rockrose Development

43-10 Crescent St.

Long Island City

709

Rockrose Development

43-22 Queens St.

Long Island City

700

Rockrose Development

1-50 50th Ave.

Long Island City

620

The Related Companies, Phipps Houses and Monadnock Construction Rockefeller Group and TDC Development & Construction

Flushing Commons

Flushing

620

46-10 Center Boulevard

Long Island City

585

TF Cornerstone

41-50 24th St.

Long Island City

421

World-Wide Group

23-10 Queens Plaza South

Long Island City

400

Property Markets Group

61-35 Junction Blvd.

Rego Park

314

Vornado Realty Trust

1-55 Borden Avenue

Long Island City

306

The Related Companies, Phipps Houses and Monadnock Construction

44-30 Purves St.

Long Island City

300

Brause Realty

29-37 41st Ave.

Long Island City

242

Steve Cheung

34-36 Vernon Blvd.

Long Island City

232

Alma Realty

50-01 2nd St.

Long Island City

199

Lightstone Group

22-22 Jackson Ave.

Long Island City

182

Jeffrey Gershon

44-35 Purves St.

Long Island City

151

Criterion Group

42-25 27th St.

Long Island City

145

Heatherwood Communities

41-21 28th St.

Long Island City

139

Joe Goodman

29-07 Queens Plaza North

Long Island City

135

Granite Queens Plaza Elmhurst Plaza Corp.

45-16 83rd St.

Elmhurst

121

44-51 Purves St.

Long Island City

119

Criterion Group

51-35 Reeder St.

Elmhurst

115

85-15 Queens Blvd. Realty

44-72 11th St.

Long Island City

105

Ekstein Development

90-14 161st St.

Jamaica

101

NYC Partnership Housing Dev. Fund

43-05 43rd Ave.

Long Island City

100

Rockrose Development

26-14 Jackson Ave.

Long Island City

Ekstein Development and L+M Development

45-46 Pearson St.

Long Island City

L+M Development

92-61 165th St.

Jamaica

Silverstone Property Group

70-26 Queens Blvd.

Elmhurst

Steve Cheung

PHOTOGRAPH FOR THE REAL DEAL BY JEREMY WILLIAMS

new development

Moving to Queens Over the past decade, Long Island City’s dramatic transformation has been well-documented by TRD and other news outlets. The changes date back to a 2001 rezoning, which allowed substantial mixed-use developments to be built on 37 blocks in the neighborhood’s central business district. Large new residential projects slated for Long Island City include a 98-unit project at 45-46 Pearson Street developed by L+M, and World-Wide’s 421-unit, 40-story rental tower near Queens Plaza. Property Markets Group, meanwhile, is in the design phase for a 400-unit apartment complex in Court Square, also in Long Island City. For World-Wide, headed by Victor Elmaleh, this is the first Queens project in decades. David Lowenfeld, executive vice president at World-Wide, told TRD that the neighborhood is at a tipping point, similar to Lower Manhattan in the late 1990s, when the firm developed the new condo 88 Greenwich Street. Building in Long Island City now is “an opportunity to provide a product at a compelling price point, in an emerging residential neighborhood attractive to people looking for ‘the cool,’ ” Lowenfeld said. World-Wide and other newcomers are competing with neighborhood stalwarts such as the longtime Long Island City developer Rockrose, which has been developing in the neighborhood since the 1980s and just started leasing its 709-unit rental building Linc LIC. Rockrose has plans for several other large new rental projects in the neighborhood, including a 975-unit tower at 43-25 Hunter Street, and a 700unit rental conversion of a building once owned by Eagle Electric Manufacturing, at 43-22 Queens Street. Outside of Long Island City, fewer big-name developers are active. One exception is Manhattan-based Silverstone Property Group, which is constructing a 14-story, 89-unit rental building at 92-61 165th Street in Jamaica. In addition, the Rockefeller Group and TDC Development and Construction are planning an $850 million mixed-used project in Downtown Flushing. The project, dubbed Flushing Commons, will include 620 residential units, 275,000 square feet of retail and 234,000 square feet of office or hotel space, according to the developers. The project, which was announced almost 10 years ago, is finally slated to begin construction this fall, according to news reports. The availability of sizable development sites zoned for large-scale development is key to the increased construction activity. In established Manhattan and Brooklyn neighborhoods, there are few large development sites left, industry experts said. “If you want to build a 300-unit building, it’s tough to do that in a place like Williamsburg today,” said Josh Zegen, a co-founder of the commercial real estate investment firm Madison Realty Capital, which has financed several new developments in Queens in recent months. “In Long Island City, you can do that because you don’t have the same height restrictions.”

Queens new development pipeline Long Island City

Flushing

Rego Park

Elmhurst

Jamaica

Astoria

Far Rockaway

Ridgewood

Woodside

Willets Point

Forest Hills

Address

Neighborhood

No. of units

Developer

148-15 90th Ave.

Jamaica

The Arker Companies

30-40 21st St.

Astoria

87-87 LLC

128 Beach 9th St.

Far Rockaway

Beachfront Developers LLC

136-21 Latimer Pl.

Flushing

Park Place Estate LLC

169-30 Baisley Blvd.

Jamaica

The D&F Group

41-07 Crescent St.

Long Island City

Ranger Properties

44-15 Purves St.

Long Island City

Emmy Homes and Lions Group NY

153-33 89th Ave.

Jamaica

Jia Meng USA LLC

62-41 Forest Ave.

Ridgewood

Sean Lavin

27-05 41st Ave.

Long Island City

River Bridge Tower LLC

42-60 Crescent St.

Long Island City

Rising Developers Group

11-35 45th Ave.

Long Island City

Murray Park North LLC

87-22 51st Ave.

Elmhurst

Elmhurst Development LLC

23-15 Astoria Blvd.

Astoria

George Miltiadou

27-51 Jackson Ave.

Long Island City

Jackson Bounty LLC

86-55 126th St.

Kew Gardens

Webb Enterprise

63-99 Austin St.

Rego Park

Yue Jiqing Charalabos Bakalis

28-18 Astoria Blvd.

Astoria

64-01 Woodside Ave.

Woodside

Bo Jin Zhu

132-15 41st Ave.

Flushing

Flushing Manor Realty LLC

41-42 College Point Blvd.

Flushing

CX Tower LLC

75-48 Parsons Blvd.

Kew Gardens

Cherry Blossom Realty

26-25 28th St.

Astoria

Emanuel Kaliontzakis

143-28 41st Ave.

Flushing

Stern 88 Holdings LLC Kings Empire Group LLC

39-14 114th St.

Willets Point

114-69 Barclay Ave.

Flushing

RLCH Inc.

94-11 65th Rd.

Rego Park

Xin Ye Development Corp.

132-08 Pople Ave.

Flushing

1328 Pople Realty LLC

25-16 37th Ave.

Long Island City

NY Management Builders Corp.

47-05 5th St.

Long Island City

Paramount Realty Management

97-40 64th Ave.

Rego Park

Great Stone Development LLC

112-45 39th Ave.

Forest Hills

Tianfu Inc.

Kew Gardens

Source: Department of Buildings and TRD research. List includes only projects of 20,000 square feet or larger and launching in 2013 or later. Longtime Long Island City developer Rockrose just started leasing the 709-unit rental building Linc LIC.

The 5Pointz graffiti building in Long Island City, which will be replaced with two residential towers

Victor Elmaleh, head of the World-Wide Group

Meanwhile, at 23-15 Astoria Boulevard, a 37-unit project is being developed by George Miltiadou, and a 24-unit residential property by entrepreneur Emanuel Kaliontzakis is slated for 26-25 28th Street. The developers did not respond to requests for comment.

Relying on rentals

Lightstone’s Hochberg said Queens offered his firm the chance to make just one large acquisition rather than assembling a site, which can take years in Manhattan and trendy areas of Brooklyn. And because the sites are larger, he said, construction in Queens is also easier. But there are limitations to development in Queens. For example, a 2010 rezoning of 238 blocks in Astoria prevents developers

from building large projects on some of the neighborhood’s most desirable, tree-lined blocks. As a result, most of the new projects coming to Astoria are smaller than those on tap for Long Island City. They are also being spearheaded by individual developers rather than megafirms. A 28-unit rental building by local developer Charalabos Bakalis is, for instance, coming to 28-18 Astoria Boulevard, according to records filed with the city.

Most of the major new developments in Queens right now are rentals, which developers see as the best fit for the neighborhood’s somewhat-transient population of young professionals, Hochberg said. But it’s also due to the recent increase in rents in the area. For example, the median monthly rent for a one-bedroom apartment in a doorman building in Long Island City increased from $2,825 in 2011 to $2,890 in 2012, according to data from marketing firm Nancy Packes. Continued on page 104

www.TheRealDeal.com October 2013 61

200 EAST 69TH STREET - PH 4 BR, 4.5 BATH

WEB ID: 530801

$16.5 M

120 WEST 21ST STREET

5 BR, 4.5 BATH

WEB ID: 964624

$20,000 MONTH

We define our neighborhoods as much as they define us. 445 LAFAYETTE STREET - PH 3 BR, 3.5 BATH

110 Fifth Avenue 212.633.1000

26 Astor Place 212.584.6100

730 Fifth Avenue 212.242.9900

239 East 79th Street 212.929.1400

337 West Broadway 212.924.4200

530 LaGuardia Place 212.557.5300

88 Greenwich Street 212.269.8888

446 West 14th Street 212.604.0300

33 Irving Place 212.557.6500

TOWN Residential, LLC is a licensed real estate broker and proud member of REBNY. TOWN Residential, LLC is a partnership of Buttonwood Residential Brokerage, LLC and Thor Equities, LLC.

WEB ID: 451672

$15.25 M

44 LAIGHT STREET

3 BR, 2.5 BATH

WEB ID: 125241

$6.575 M

310 WEST 97TH STREET - PH

3 BR, 2 BATH

WEB ID: 289651

$14,700 MONTH

64 GRAND STREET - PH

2 BR, 2 BATH

WEB ID: 562606

$12,000 MONTH

200 EAST 69TH STREET - PH 4 BR, 4.5 BATH

WEB ID: 530801

$16.5 M

120 WEST 21ST STREET

5 BR, 4.5 BATH

WEB ID: 964624

$20,000 MONTH

We define our neighborhoods as much as they define us. 445 LAFAYETTE STREET - PH 3 BR, 3.5 BATH

110 Fifth Avenue 212.633.1000

26 Astor Place 212.584.6100

730 Fifth Avenue 212.242.9900

239 East 79th Street 212.929.1400

337 West Broadway 212.924.4200

530 LaGuardia Place 212.557.5300

88 Greenwich Street 212.269.8888

446 West 14th Street 212.604.0300

33 Irving Place 212.557.6500

TOWN Residential, LLC is a licensed real estate broker and proud member of REBNY. TOWN Residential, LLC is a partnership of Buttonwood Residential Brokerage, LLC and Thor Equities, LLC.

WEB ID: 451672

$15.25 M

44 LAIGHT STREET

3 BR, 2.5 BATH

WEB ID: 125241

$6.575 M

310 WEST 97TH STREET - PH

3 BR, 2 BATH

WEB ID: 289651

$14,700 MONTH

64 GRAND STREET - PH

2 BR, 2 BATH

WEB ID: 562606

$12,000 MONTH

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Elections

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City Hall exodus to real estate As the Bloomberg era winds down, a look at the final wave of mayoral aides likely to go to work in the industry

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By C. J. Hughes or 11 years, it’s been one of the more popular and reliable career paths after a stint with Mayor Michael Bloomberg: a job in the real estate industry. Indeed, many of Bloomberg’s most long-time and influential foot soldiers have moved on to jobs with development companies, architecture firms, conservation in-

Now as the clock ticks down on the Bloomberg era, many observers are wondering where the last administration staffers will go, and which of them will be courted by developers and other real estate players. Cas Holloway, the current deputy mayor for operations — a Harvard-educated attorney who raised his profile during the Hurricane Sandy recovery efforts — would

Richard Anderson, the president of the New York Building Congress, the construction industry group, said of Holloway: “The world is really his oyster, whether he goes to the private sector, or even stays in politics.” Some sources said Holloway is indeed eying political office.

Veteran staffers The Commissioner of the city’s Depart-

City Hall has churned out a number of top real estate executives since Bloomberg took office.

Left to right: Deputy Mayor Cas Holloway and DOB Commissioner Robert LiMandri are seen as valuable hires for the industry. Some expect David Burney, the commissioner of the Department of Design and Construction, to go to a major architecture firm. City Planning Chairwoman Amanda Burden and Transportation Commissioner Janette Sadik-Khan are reportedly in talks to form an urban planning institute.

struction industry. “He’s a very bright guy.” Sources said LiMandri might wait to jump to a new position until after January because he could be tapped by the next mayor — regardless of who wins — to stay on for a few months to help with the transition to the next administration. Analyst Fred Siegel, a political writer and senior fellow at the Manhattan Institute who advised Rudolph Giuliani’s 1993 mayoral campaign, said he expected several of Bloomberg’s top aides and commissioner to go that route. Meanwhile, David Burney, the commissioner of the Department of Design and Construction, who oversees a staff of 1,200, worked for the architectural firm Davis Brody Bond before moving into the public sector. Some sources expect him to return to a major architecture firm like Perkins Eastman or Skidmore, Owings and Merrill or to move to a megacompany like AECOM, an engineering and architecture firm whose portfolio includes global design, development and project planning. On the press front, Marc La Vorgna and Julie Wood — both Bloomberg spokespeople who worked at the Port Authority of New York and New Jersey, and the EDC, respectively, before joining the mayor in City Hall — are likely to be courted by developers who have business before the city. Neither of them responded to requests for comment about their future plans or the plans of the mayor’s top aides. Meanwhile, staffers at the EDC are now aggressively networking to find new jobs, a rush that intensified after last month’s primary, sources said. Had City Council Speaker Christine Quinn, Bloomberg’s preferred successor, won, those staff members might feel more secure. But with Bill de Blasio as the Democratic nominee and leading in the general election polls, they are more likely to be out of work, sources said.

HHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH

Heavyweight hiring

stitutes and affordable-housing builders, among others. Most recently, Seth Pinsky, the president of the city’s Economic Development Corp., took a job at RXR Realty, where he’s heading a new division focusing on emerging New York markets. In addition, Matthew Wambua, who headed the city’s Department of Housing Preservation and Development, left his post for mortgage lender RHR Funding, where he was tapped as president.

The biggest factor in where these Bloomberg staffers end up depends, of course, on which big real estate firms or organizations are hiring. Heavyweight firms like Forest City Ratner, Muss Development and the Durst Organization already have former Bloomberg officials on their payrolls, and have not put out feelers to hire more yet, sources said. Same goes for REBNY. But overall, these jobs may be scarcer

32 January 2013 www.TheRealDeal.com

be a natural fit in the real estate industry, several sources said. Indeed, his oversight of the city’s Rapid Repairs program, which fixed up 20,000 storm-damaged homes, is seen as ideal experience for overseeing a major development project, they said. Plus, “he had a good reputation in the operations role, which is a unique kind of skill set,” said one former city government employee who now works for a development firm. “You need to be very decisive.”

ment of Buildings, Robert LiMandri — who worked for Jones Lang LaSalle as a consultant to banks between 1997 and 2000 — could also be a valuable pickup for a real-estate firm. That’s largely because he knows his way around the city’s Byzantine permitting process to a greater degree than just about anyone, sources noted. “He would have enormous value at either a development firm or construction company,” said one source in the con-

Continued on page 108

www.TheRealDeal.com October 2013 65

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Elections

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The City Council’s new class A look at six key races where real estate issues are center stage

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By Guelda Voien s the saying goes, all politics is local. And in New York City, local politics matters as much as it does anywhere else — especially when it comes to real estate. Indeed, developers must often win approval for their projects from community boards, the borough president and, of course, the City Council. Not only do council members vote on major development projects, they often hold sway over their colleagues when the project is in their own district. City Council members have such influence over whether a development gets a green (or red) light that the city’s leading industry trade organization, the Real Estate Board of New York, poured more than $4 million into a political action committee called Jobs for New York to get its chosen candidates in office, as The Real Deal has reported.

And, according to a TRD analysis after last month’s primary election, 17 of the PAC’s 22 candidates claimed victory. (Four of the candidates were defeated and one is still facing a run-off election.) Political consultant Hank Sheinkopf said the PAC was strategic about where it spent its money — and didn’t just target the obvious races where real estate issues were of top concern. “[Jobs for New York] supported incumbents who would win … even when they were not in areas where real estate interests were important,” he said. The strategy was designed, he said, to accumulate as many allies as possible in the council. The PAC’s victors must go on to win in next month’s general election, but in most cases the real battle was in the primary, and they’re expected to sweep into office. Below is an in-depth look at five races where real estate is center stage.

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Soho/Chinatown This vast district — which covers Soho, Tribeca, the Financial District and Chinatown — is one of the most crucial in the city when it comes to real estate development. That’s because the area includes an array of projects from the Seward Park Urban Renewal Area to the World Trade Center towers to countless residential projects like the Elad Group’s 53-unit condo Franklin Place, and Bizzi & Partners’ 66-unit condo 101 Leonard Street. And much to the real estate community’s delight, the voters reelected City Council Member Margaret Chin, who beat out fellow Democrat Jennifer Rajkumar, a civil rights attorney, in the primary. Jobs for New York spent $230,968 on Chin, and another $50,736 to attack Rajkumar, according to TRD’s post-primary analysis. The PAC targeted Rajkumar with mailers alleging that she was a “fraud,” who ran a nonprofit that has “never done anything.” “[Jobs For New York is] targeting me because Lower Manhattan is prime real estate. The current Council member, Margaret Chin, has been a great friend to the real estate developers,” Rajkumar told TRD shortly before the primary. For her part, Chin was one of several winning candidates who gathered right after the primary to denounce the PAC’s outsized spending. However, a representative for Jobs for New York told the Villager newspaper that it supported Chin because of her “balanced” approaches to affordable housing and development. Chin pushed for the Seward Park Urban Renewal Area — a six-acre vacant swath on the Lower East Side where the Bloomberg administration is spearheading a massive development that will include 1,000 apartments, office space, retail, and a museum — to include all affordable housing. The city — which announced last month that L&M Development Partners, BFC Partners, Taconic Investment Partners and Grand Street Settlement 66 October 2013 www.TheRealDeal.com

Jennifer Rajkumar

Carlos Menchaca

Corey Johnson

Margaret Chin

Paul Vallone

Ede Fox

Not only do council members vote on major development projects, they often hold sway over their colleagues when the project is in their own district. will handle the long-contested development — ultimately settled on a ratio of half market rate and half affordable. (That still includes a higher percentage of affordable units than standard 80-20 developments do.) With no Republican opponent, Chin should sail to a second term.

Upper West Side In a closely followed race on the Upper West Side, Helen Rosenthal narrowly bested Community Board 7 member Mel Wymore — a transgender candidate who was endorsed by the New York Times — to win the Democratic nomination. Though Rosenthal must still beat Republican

Harry DeMell and Green Party candidate Tom Siracuse in the general election, she is expected to handily take the seat in the heavily Democratic district and replace Gale Brewer, who is being termed out of office. (Brewer, for her part, nabbed the party’s nomination for Manhattan Borough President.) Rosenthal — who worked in the city budget office under former mayors David Dinkins and Rudolph Giuliani, and now runs a nonprofit focused on job placement — has touted the fact that she is not cozy with the real estate industry. On the campaign trail, Rosenthal sided against the real estate industry on several key issues and projects. For example, she has called for abolishing the 421a and J-51 tax abatement programs, arguing that the funds should be allocated towards affordable housing and rent subsidies instead. She has also voiced support for a moratorium on all rezonings and for down-zoning a swath south of 86th Street, a move that would scale back development. Jobs for New York stayed out of the race, despite backing a number of other likely winners who were not viewed as highly pro-development. The PAC did not respond to a request for comment. Jason Haber, head of Rubicon Properties and a resident of the Upper West Side, speculated that the PAC likely stayed out of the race because the area has such a welloiled advocacy machine. “[Their endorsement] would only have hurt their endorsed candidate,” he said.“[The area] has a legendary and well-organized network of people who oppose large-scale new developments.” Haber said he expected Rosenthal to focus “more on affordable housing opportunities [than market-rate development]” and “be a bulwark against overdevelopment.” Rosenthal insisted that she is not against new buildings, and just wants the community more engaged on land-use issues. “I think we need more community participation in reviewing new residential and commercial buildings,” she said. “The

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community is … hungry for apartments, but they are looking for affordable apartments.”

Chelsea/Meatpacking In the race to replace City Council Speaker Christine Quinn in Chelsea, Corey Johnson won the Democratic primary, and is one of the lucky candidates with an uncontested general election. At first blush, Johnson — who worked as director of government relations and community affairs for Ace Hotel developer GFI Development from 2008 to 2010 — would appear to be a friend to the industry. But Johnson ran on the strength of his personal narrative (he revealed before the primary that he is HIV positive) and downplayed his real estate connections while on the stump. The district is, of course, home to controversial real estate projects like the 200-unit condo dubbed Greenwich Lane that Rudin Management is building on the former site of St. Vincent’s Hospital, and the expansion of the Chelsea Market. Johnson — who previously chaired Community Board 4 — has opposed developments in his district, but not nearly as vigorously as his opponent, Yetta Kurland, a civil rights lawyer who spoke out against Greenwich Lane. According to published reports, Johnson voted against the Chelsea Market expansion when it came through the community board, but did not speak publicly against it until the final vote. Johnson has said that his top priorities are to expand affordable housing and attract a new hospital. Meanwhile, at Hotel Chelsea he took a position against the industry, allying himself with tenants in their battle with former owners Joseph Chetrit and David Bistricer. With developments sprouting up in the Meatpacking District and along the High Line, the real estate community wants an ally in the area. It’s unclear whether Johnson will be that person. He has previously said: “New York lacks general land-use policies that protect residents” (from over-development) and that “certain neighborhoods have fallen victim to the resulting unbalanced growth.” Jobs for New York stayed out of the Chelsea race. Eastern Consolidated’s David Schechtman, who represents buildings in the area, said the industry is not deeply concerned about Johnson. “De Blasio is more of a concern,” he said, noting that the mayoral candidate opposes the Midtown East rezoning among other industry-favored projects. In a move suggesting that his distance from the industry is a positive with voters in his district, Johnson told Decide NYC, a nonprofit that tracks candidates’ campaign positions, that publicizing his connection to GFI was “political” on his opponent’s part. At a debate in August, Johnson also said that he makes $52,000 a year, which would make him “the poorest real estate executive this side of the Mississippi.” Neither Johnson’s campaign nor GFI re-

Elections

sponded to a request for comment.

Sunset Park/Red Hook In Brooklyn’s 38th district — which covers Sunset Park, Windsor Terrace and Red Hook — Carlos Menchaca is poised to become the city’s first Mexican-American member of the City Council. And if that weren’t momentous enough, he was also the only candidate to oust an incumbent — in this case, Sara Gonzalez, who was backed by Jobs for New York. Jobs for New York spent nearly $295,000 to boost Gonzalez and another $52,000 on negative literature against Menchaca, according to TRD’s analysis. But the PAC couldn’t blunt Menchaca, a former staffer for failed mayoral hopeful Quinn who grew up in public housing. “The strength and power of the coalition we built enabled us to defeat the real estate forces that spent heavily on my opponent,” Menchaca told TRD for

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will need the city’s Economic Development Corp. to make good on its pledge to invest in the surrounding area to ensure the complex’s success. “The real estate community likes stability, likes to know who they are dealing with,” the source said. The region is a burgeoning area for new development, especially when it comes to converting industrial sites into residential, which often requires a sign-off from the council. Menchaca supports expanding affordable housing programs, and has said he will fight proposals to allow more private interests in public settings — like the city’s recent proposal to lease land owned by the New York City Housing Authority to private developers. Menchaca will run unopposed in the general election. His campaign did not respond to a request for comment. Laurie Cumbo

Helen Rosenthal

porter of small businesses in the area, said Brian Leary, co-founder of Brooklyn-based commercial brokerage CPEX. “I would bet that she won because of her willingness to support small business,” he said. “I think there needs to be more financing for these types of folks.” In addition, sources said, Cumbo’s opponent was more closely aligned with unions, which have sparred with real estate interests at projects like City Point in Downtown Brooklyn. On her website, Cumbo said she hopes to strengthen rent regulation and push for more so-called 80/20 projects, which reserve 20 percent of a building for affordable housing. “We also have to work to change the definitions of ‘affordable’ by [the] city’s standards,” she said. She is also supportive of the Brooklyn Tech Triangle, an initiative by the Bloomberg administration to boost Brooklyn’s appeal to technology companies.

Whitestone/ Bayside

Sara Gonzalez

an online story last month. He also said the PAC’s negative campaigning “made people really sick to their stomachs.” “They wanted a rubber stamp [candidate], and that wasn’t me,” he said. So what does his presence in the council mean for the industry? Greg Atkins, a project manager with hotel developer Second Development Services, said he expected Menchaca to take a measured approach to real estate, noting that the two worked together in Borough President Marty Markowitz’s office, where Menchaca focused on economic development issues. “I assume he will be happy with sit down with the real estate community and figure out ways we can work together,” said Atkins, who was Markowitz’s former chief of staff. Another source with knowledge of the race said the money Jobs for New York pumped toward Gonzalez’s campaign was likely a precaution to ensure that the 10-year-renovation of Industry City — the 6-million- square-foot commercial complex in Sunset Park — moves forward smoothly. One source said that Industry City’s owners

Mel Wymore

Fort Greene With the backing of REBNY’s PAC, Laurie Cumbo won the democratic nomination in the area that encompasses Fort Greene and Clinton Hill. She is running unopposed in the general election. But Cumbo — the founder of the Museum of Contemporary African Diasporan Arts — asked the PAC to stop supporting her, telling the website DNAinfo during the race, “whatever they’re trying to buy, they’re not going to get from me.” (She made the statement however, after Jobs for New York had already spent more than $80,000 campaigning for her, according to records filed with the city’s Campaign Finance Board.) A rep for Cumbo said the campaign had no contact with Jobs for New York and didn’t know why the PAC backed her. The PAC also spent more than $13,000 opposing Cumbo’s main opponent: Ede Fox, a former staffer for Brooklyn City Council Member Jumaane Williams, who has worked for the mega-health-care workers union 1199 SEIU. Cumbo likely appealed to the real estate community because she was a vocal sup-

The Vallone political dynasty seems poised to continue in Queens. Attorney Paul Vallone — the son of former Council Speaker Peter Vallone and the brother of outgoing Council Member Peter Vallone Jr. — is the favorite to take the council seat in this district. He bested Austin Shafran, a former staffer to Governor Andrew Cuomo, in the Democratic primary, and is favored to beat Republican Dennis Saffran on November 5. The generous swath of Queens — which is a few neighborhoods away from where his brother served — abuts the 23-acre Willets Point redevelopment, which is in its first phase and was spearheaded by the city’s EDC. It also includes a small part of Flushing, where residential sales have begun to boom lately. Perhaps more important than that, however, is the fact that Queens has historically been a political rainmaker in the City Council. Sheinkopf, the political strategist, explained that the county’s Democrat Party has maintained its power and “actually has some control over what their elected officials do.” Indeed, the party machine has historically succeeded in getting its council members to cast their votes to elect a speaker for the body in one big bloc, Sheinkopf said. That’s helped the caucus win and retain the chairmanship of the body’s powerful Land Use Committee for the last 16 years. The committee’s current chairman, Leroy Comrie, faces term limits, and a new speaker will be elected to replace Quinn, so that position will be up for grabs again. Jobs for New York poured about $325,000 towards Vallone’s win — the most the PAC gave to any candidate. The PAC’s support in this race was more strategic than getting backing for any one project, Sheinkopf said. That’s especially true because of Queens’ history of keeping its council members in line behind its favored causes. The PAC’s campaign spending is designed to send a message. “You better conform,” Sheinkopf said. TRD www.TheRealDeal.com October 2013 67

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Elections

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The other council races

A cheat sheet on the 15 remaining up-for-grabs seats — and who has the industry’s support By Guelda Voien

he mayoral race has, not surprisingly, received the majority of the political news coverage lately. But with 21 City Council seats up for grabs, the real estate industry also has a lot at stake in the legislative body in the general election. While TRD took an in-depth look at six of the races in

this spread (see page 66), we didn’t want to leave out the other 15. Below is a look at the candidates in those races and where they stand vis-à-vis the real estate industry. We also looked at who was supported by the REBNY-backed political action committee Jobs for New York.

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Manhattan

East New York and New Lots (District 42)

Upper East Side (District 5) Benjamin Kallos, former chief of staff to state assembly member Jonathan Bing, won last month’s Democratic primary and is expected to easily win the Upper East Side seat next month. Kallos defeated state assembly member Micah Kellner, who’s at the center of a state investigation over sexual harassment allegations. Jobs for New York supported Kellner, but spent only $1,219 doing so. Kallos told the website Democracy for New York City that he helped draft legislation that would reform rent regulation, tying it to market forces, as well as drafted legislation to make discriminating against prospective tenants because of prior lawsuits with landlords illegal. In the general election, he’ll face Republican David Garland, a long-shot who has largely focused on shooting down the neighborhood’s proposed waste transfer station.

Andrew Cohen

Chaim Deutsch

Antonio Reynoso

Clyde Vanel

Ben Kallos

Inez Barron

Hamilton Heights, Morningside Heights (District 7) Mark Levine, a former public school teacher who headed up an education-related nonprofit, handily won the 10-person Democratic primary. A former district leader in Upper Manhattan, Levine is an avid supporter of strengthening rent regulation, but nonetheless Jobs for New York spent $294,164 supporting his candidacy. He is running unopposed in the general election.

Kirsten John Foy

Marc Landis

Mark Levine

Democrat Antonio Reynoso — outgoing Council Member Diana Reyna’s former chief of staff — bested Vito Lopez, the onetime powerful assemblyman, who was recently ousted from that body over sexual harassment allegations. According to published reports, Reynoso, who grew up in South Williamsburg, has been vocal about protecting that quickly changing community from overdevelopment. He is running unopposed in the general election. Jobs for New York stayed out of the race.

Mark Trayger

Micah Kellner

Rafael Espinal

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Voters will have to choose between Democrat Alan Maisel and Republican Anthony Testaverde next month. Maisel was backed by Jobs for New York in the primary, but called the PAC out for going negative on his opponent, John Lisyanskiy. “I will not condone negative attacks,” he told the blog Sheepshead Bites. Testaverde told the Brooklyn Daily that he will push to lower property taxes if elected. Maisel is “virtually assured” the win in the heavily democratic district, pundits said.

Democrat Mark Treyger managed to secure the backing of Jobs for New York despite his support of mandatory affordable housing in all new developments. He will face Republican Andrew Sullivan, a Tea Party supporter, who reportedly moved from Bay Ridge to Coney Island in order to run for this seat.

Sheepshead Bay and Brighton Beach (District 48)

Ritchie Torres

Robert Cornegy Jr.

Rory Lancman

Steven Matteo

Vanessa Gibson

Vito Lopez

Bedford- Stuyvesant (District 36) This month’s runoff will determine the Democratic nominee in this district. Robert Cornegy Jr., a district leader, will face Jobs for New York-backed Kirsten John Foy. Both candidates are favored to beat Republican Veronica Thompson.

Canarsie and Marine Park (District 46)

Bensonhurst and Coney Island (District 47)

Brooklyn

East Williamsburg and Bushwick (District 34)

Democrat Inez Barron — a state assembly member and the wife of longtime City Council Member Charles Barron — is running unopposed in the general election to take her husband’s seat. Inez Barron is expected to continue her husband’s firebrand style of politics. On the real estate front, her husband aggressively (and successfully) fought to keep Walmart from opening in the district and voted against New York University’s expansion in Greenwich Village. Barron easily defeated her closest primary opponent. Jobs for New York did not get involved in the race.

In the one race with a real estate executive on the ballot, Democrat Chaim Deutsch, the president of Chasa Management, a small Brooklyn-based real estate management company, is facing Republican David Storobin. The race is one of the few where the general election is expected to be tight. Storobin, a former state senator, ran on a campaign to speed up Federal Emergency Management Agency funds for victims of Hurricane Sandy. Jobs for New York was mum on the contest, despite the presence of one of their own in the race. Continued on page 102

Architecture Review

Ja m e s G a r d n e r

Medieval meets modern

Manhattan West, SOM’s newest office behemoth, recalls the famed Two Towers of Bologna

ecent architecture in New York City has tended to vacillate between the staid and the iconic. Half of the buildings of note in Manhattan aspire to be the sort of tame comfort fare that New Yorkers have been steadily served since the dawn of the post-war era. (With all the requisite updates, of course.) The other half seek, and sometimes find, a gimmick that sets them apart. Examples of both are provided by Skidmore, Owings and Merrill, the venerable and dependable firm that once defined the cutting edge of the Modernist movement, and that was responsible for seemingly half of everything built in Manhattan from around 1950 to 1975. SOM’s design of Manhattan West — a 5.4 million-square-foot office, residential and hotel development planned for Ninth Avenue between 31st and 33rd streets — is an example of the latter, given the idiosyncratic way in which the project’s two structures interact. Here, the developers have been given leave to revise the Manhattan grid to their liking: with the Related Companies’ Hudson Yards development also in the works, the mile from the eastern edge of Madison Square Garden all the way to the Hudson River will ultimately constitute a sequence of superblocks. For most of its existence, this part of Manhattan has been a throwaway zone, into which few locals (and fewer tourists) ventured. The two new buildings — the 2.2-million-square-foot North Tower and the 3.2-million-square-foot South Tower — that will make up Manhattan West are intended to face the western façade of the Farley Post Office Building and will be separated by Dyer Avenue from 450 West 33rd Street, that blunted Brutalist pyramid, designed in 1970, which until recently housed the Daily News. The massive new development, which will provide a foretaste of the development of Hudson Yards, is being undertaken by Brookfield Office Properties. The firm has just begun construction of a 120,000-square-foot deck that will be situated over the Amtrak rail yards and will serve as the foundation for the towers that will rise above it. That deck is due to be complete in 2014. (Brookfield has said it will not start construction on the towers until it locks in an anchor tenant.) At more than 60 stories each, the North and South Towers — which will be separated by an outdoor landscaped plaza — will be very similar (though not identical) in shape, size and function. Each of the two office towers will be covered in floor-to-ceiling glass.

70 October 2013 www.TheRealDeal.com

Bruce Mosler, chairman of global brokerage at Cushman & Wakefield, which is marketing the space for Brookfield, had previously told The Real Deal that his

those medieval towers, their more contemporary counterparts promise to exert an equally powerful sense of personality, conveyed by the genial and ingenious

A rendering of Brookfield Office Properties’ Manhattan West. Inset: David Childs, the lead architect at Skidmore, Owings and Merrill.

The towers that are planned for Manhattan West have a self-effacing humility to them, and each subtly promises to project its unique personality. firm has largely finalized the design of the North Tower, but that the order in which the towers would be built would depend on the needs of the anchor tenants. The towers themselves resemble nothing so much as the famous Two Towers of Bologna — the Torre degli Asinelli and the Torre Garisenda. And like

trick of seeming to sheer off, at irregular angles, a few feet from the sides of the towers. The irregularity of the buildings’ resulting shapes is, of course, a response to the Deconstructivist style of recent years. A similar irregularity occurs in the trapezoidal footprint of 7 World Trade Center,

which was also designed by SOM, and which is similarly conceived as a pale, curtain-walled tower. But the feel of the two projects could not be more different. Seven World Trade Center reads as the rationalist, symmetrical structure that one usually associates with SOM, and especially with its principal architect, David Childs. (One thinks of the Freedom Tower or the Worldwide Plaza.) By contrast, the towers that are planned for Manhattan West have a self-effacing humility to them, and each subtly promises to project its unique personality. The interaction between the two suggests that of Vladimir and Estragon in Samuel Beckett’s “Waiting for Godot.” They seem alternately to shuffle along or to stand loitering, as though with their hands in their pockets, given the wayward massing of the curtain walls. If 7 World Trade Center is an instance of heroic neo-Modernism, the two towers of Manhattan West imply a very different and welcome anti-heroism. The entire project looks very promising, invoking the Deconstructivist idiom responsibly to achieve a unique identity, but not at the cost of harmony or functionality. The renderings suggest the buildings will have a clear, slight bluish hue. More detailed renderings of the base, however, suggest that the curtain-walled skin of the buildings will be clearer and more traditional. The floor plates promise to provide a staggered ascent along a horizontal axis throughout the building, relieved by steel girders, which draw the eye vertically. The base of the building will reveal a central core, flanked by a series of pillars around the edges in a way that recalls the conservative office tower typology with which SOM is most often associated, and that derives ultimately from the famed Seagram Building. The design is comparable, with its two dominant towers, to SOM’s Time Warner Center, except that it’s more syncopated and less symmetrical than the Columbus Circle complex. In addition, its two towers will exert a greater autonomy from one another and from their common base. With the ever accelerating pace of development in this part of the borough, we must wonder how much of Manhattan West will be visible from the rest of the city, especially when Hudson Yards is completed. Still, if the buildings live up to the promise of the renderings, the city will be better off. TRD

PHOTOGRAPH OF CHILDS FOR THE REAL DEAL BY MARK SCRIVO

Q&A

Is Westchester’s ‘hipsturbia’ hype real? Brokers say the increased buzz over the river towns is bringing even more Brooklyn buyers

By Melissa Dehncke McGill re hipsters still hipsters in the suburbs? That’s a riddle many are trying to solve as more and more Brooklynites relocate to the so-called river towns just north of the city in Westchester. The towns — which include Hastings-on-Hudson, Dobbs Ferry, Tarrytown, Sleepy Hollow and Irvington — have long been popular among city buyers looking to move to greener pastures. But a recent wave of attention — including a New York Times piece headlined “Creating hipsturbia” earlier this year — has generated even more interest in these communities. In this month’s Q&A, the brokers who work in these towns on the Hudson River told The Real Deal that residential activity is up almost 25 percent over the same time last year. And one broker noted that “Brooklynites have been the fastest growing group” of buyers. Attracted to the easy commute into the city (the towns are located on the Metro-North

Chris Meyers

managing principal, Houlihan Lawrence Westchester’s river towns — Hastings-on-Hudson, Dobbs Ferry, Tarrytown, Irvington, etc. — have been gaining popularity with Brooklynites and other New Yorkers looking to relocate out of the city. Are you seeing those groups drive a lot of the activity in the market? New York City is an important feeder market for all of Westchester County. The hipsters came to the river towns long before the New York Times referred to it as “hipsturbia” this spring. Nonetheless, that label created even more interest and curiosity. The media attention has certainly provided increased exposure to a wider swath of buyers. Generally, what sort of residential buying and renting activity are you seeing in the river towns and how does that compare to the last few years? The market in the river towns is red hot. Year-to-date, the number of homes sold has increased by 24 percent when compared to the same period last year. A significant portion of the increase is in the $1 to $2.99 million price range, where there has been a 75 percent increase year-todate. Interestingly, many of the Brooklyn Heights and Park Slope buyers are not looking for starter homes. These buyers have established careers and the financial means to trade up. Oftentimes, their homes in Brooklyn have risen in value, giving them the wherewithal to enter the river towns in the $1 million-plus price range. Which of the river towns are performing best right now and which are struggling most?

Irvington has seen a 106 percent increase in homes sold in the $1 to $2.99 million price range. Hastings, where the majority of sales are under $1 million, has also had a tremendous year. What sort of new housing developments exist in the river towns or are coming down the pike, and are developers becoming more interested in the area? The available parcels of land are being developed primarily as luxury homes starting at $2 million and up, and are concentrated in Irvington and Tarrytown. There could be as many as 30 to 40 new construction luxury homes in the pipeline. Why are Brooklyn transplants more attracted to these river towns than other (perhaps wealthier) towns in Westchester? There’s an eclecticism that’s distinguished the river towns from neighboring Westchester County communities. Though prices are increasing, the river towns still offer homes in most price ranges, and buyers are not priced out of the area.

Pamela Eskind

associate broker, Coldwell Banker Residential Brokerage, Dobbs Ferry Westchester’s river towns have been gaining popularity with Brooklynites and other New Yorkers. Are you seeing those groups drive a lot of the activity in the market? The river towns have always been a strong draw for Brooklynites and New Yorkers. They were somewhat of a hidden gem but now they’ve become more popular. What are you seeing in terms of prices for both for-sale homes and rentals in

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line) and the fact that they can often afford bigger homes than they can in the city, these buyers are also prompting subtle changes. Indeed, in addition to the Zagat-rated restaurants like Harvest-on-Hudson in Hastings, theater at places like Tarrytown Music Hall, and antique stores that enticed buyers in the first place, there are gluten-free bakeries, yoga studios, farm-to-table restaurants, organic markets and trendy boutiques that now also abound. And not all of the new Manhattan and Brooklyn buyers are starting at the lowest pricerung. Many are entering the market in the $1 million-plus price range, sources say. But there are, of course, challenges. Brokers say high property taxes and low inventory are the biggest obstacles today. And they noted that some of the urbanites who have heard the buzz about the river towns and come to look at real estate are disappointed when the towns are, well, not as urban as they expected. For more on which towns are doing best, where developers are building more homes and which areas buyers are most attracted to, we turn to our panel of experts.

Westchester’s river towns and how does that compare to the last few years? Selling prices have been rising steadily. During the downturn, our home prices remained fairly steady and did not experience the severe drop that many other areas did. The average selling price for a single-family home is up about 10 percent compared to a year earlier and roughly 15 percent higher than 2009. What are the biggest challenges facing the Westchester river towns in terms of getting people to buy and rent there? Right now, the biggest challenge is the limited inventory of for-sale properties. Just a few weeks ago, I listed a single-family home priced over $1 million, and within a week I received four offers over the asking price. When a house comes on the market and is priced correctly, it sells quickly. We have had many multiple-offer situations this year. Which sector of the market (one-family homes, condos, luxury apartments, etc.) are doing best right now in the river towns? This year we have witnessed incredible strength in the high-end market as well as the condo market. Which sector is struggling most? The co-op market has traditionally been more challenging, but I wouldn’t label it as struggling. Why are Brooklyn transplants more attracted to these river towns than other (perhaps wealthier) towns in Westchester? The communities are unpretentious and offer great value. The river towns are not status or class conscious. There is a tremendous sense of community. They also have an easy commute to the city and a small-town feel.

Alison Bernstein

president, the Suburban Jungle Realty Group Which of the river towns are performing best right now and which are struggling most? They are all hot. The reason is that there are only so many towns that exist within commuting distance to the city. [However], if you examine all of the river towns, Irvington and Hastings are the most popular — Irvington [gets] the most activity and Dobbs Ferry tends to lag a bit behind, just a tiny bit. How does the performance of these towns compare to the rest of southern Westchester? And how does the real estate market in Westchester in general compare to other NYC suburban markets? They are equally as hot as Larchmont, Scarsdale, Rye and Pelham [when adjusted for size] in terms of inventory and demand. In addition, Westchester is the hottest market out of New Jersey, Long Island and Connecticut. As a result, the pricing has increased, and also transformed areas that were once under the radar into hotter spots. What are the biggest challenges facing the Westchester river towns in terms of getting people to buy and rent there? People hear the hype, but when they get there, they realize that it is, in fact, a suburb. Our city buyers are very focused on having a great “Downtown.” So when our families go out and tour the river towns, they feel a bit disappointed with the Downtown. They always like the idea of a more robust town center — that is the biggest sticking point. We always try to get our buyers away from that. We explain

Q&A that regardless of how great your Downtown is, you will be physically all over with kids’ activities, errands, etc. The [second challenge] is the home valuations. You just don’t get a lot of land or house. Finally, the topography of the land can be tricky in certain areas because you’re on the river — buyers tend to like flatter backyards, and those are more difficult to come across in certain locations. How important is the influx of hipster transplants to the market in the river towns — if at all? Are hipsters still hipsters in the suburbs? We believe [the influx of these new residents] is an indicator of the Manhattan and Brooklyn markets pushing out those who would have stayed because they’re too hot. The personality of the town is key and [these buyers] do impact the personality of the town. I wouldn’t say that it’s the hipsters that are necessarily transforming the towns, but it’s the personality of the family that wants a more “laid back” suburban experience — no pressure cookers, not as much competition. In fact, most of these “hipsters” grew up in highly competitive, well-to-do towns in the Tri-State Area and are doing well themselves, however do not want to raise their kids in a similar way. One of the important questions on our questionnaire is “Where did you grow up and what did you like/not like about it.” What sort of new housing developments exist in the river towns or are coming down the pike, and are developers becoming more interested in the area? Yes, developers are always interested. There are a handful of new developments in the works, but there is limited land. Developer Andy Todd is putting up 20 new homes ranging in price from $2 to $10 million.

Fatin Beiner

associate broker, BHG Rand Realty Are you seeing Brooklynites and other New Yorkers drive a lot of the activity in the river towns? I do see a lot of buyers coming from Brooklyn, Manhattan, Long Island and Queens coming to the river towns. Groups that are active include: The first-time buyers with no children, and also those who have one child and have lived in a small apartment in the city, and can’t take the small, compact space. Which towns are performing best and which are struggling most? For single-family homes, Hastings takes the lead. The number of closed sales there increased 49 percent compared to last year’s closed sales. In the other three villages, increases ranged from 10 to 14 per-

cent. In comparing average selling price, Ardsley took the lead, up 16 percent from last year, Irvington and Hastings were both up 6 percent, and Dobbs went down 4 percent. What are the biggest challenges facing the river towns in terms of getting people to buy and rent there? [The top challenge is] the high property taxes, for people who are interested in purchasing. What is inventory like in the river towns, and how does that compare to the last few years? Inventory has dropped; it’s the lowest it’s been since the crash of the real estate market. This spring, homes flew out of the market in less than 30 days. If the home was priced correctly, it went into a bidding situation — or at least sold at the asking price. There’s been a lot written about NYC transplants opening hipster-type retail, whether it’s gluten-free restaurants or yoga studios, in the river towns. What sorts of new retail is coming in and how is that influencing the residential market? The overflow of these sorts of hipster-type retail is popping up in all towns and not just the river towns — from yoga studios to gluten-free bakeries and organic items sold in the supermarket. What sort of new housing developments exist in the river towns or are coming down the pike? Due to the popularity of the river towns and the close proximity to the city, developers will always be interested in the area. … A small project popping up now is the conversion of a rental building on Broadway in Hastings into condos, which will do well.

Marcene Hedayati

broker owner/manager, William Raveis Legends Realty Group Are you seeing Brooklynites and other New Yorkers drive a lot of the activity in the river towns? The influx of the Brooklynites has played a considerable role in our increase in sales. Brooklynites have been the fastest growing group. In addition [to being attracted to this area], they are being priced out of their current locations, and they find that the river towns offer a lifestyle similar to Brooklyn. They can get the home with the backyard in a small-town community setting. Generally, what sort of rental activity are you seeing in the river towns and

how does that compare to the last few years? The rental market, although still strong, has stayed somewhat steady. This might be due to the fact that the sellers of single-family homes who rented out their residences, while they waited for the market to pick up, finally felt the market had made enough of a change for them to opt out of the rental market and put their homes on the market for sale. [Also], the construction of the new Tappan Zee Bridge will have a major effect on housing in the river towns, I suspect, particularly with rentals. Which of the river towns are performing best and which are struggling most? Hastings [saw] the greatest increase in activity from January through August this year — with 90 units sold versus 54 last year. Hastings is more of an eclectic town that attracts a creative crowd ... more hipster if you will. Tarrytown has also seen a considerable increase with 85 units sold this year versus 61 in 2012. Tarrytown has increasingly become a destination village. It’s larger than the rest of the towns, with more restaurants, retail and historical sites. It’s become a central hub and has seen more new developments than any of the others. How does the performance of these towns compare to the rest of southern Westchester? There has been an increase in activity across the board in southern Westchester. However, the prices have not yet caught up. I suspect that we will see that increase in the third-quarter stats. What are the biggest challenges facing the river towns? In terms of buying, it would have to be the property taxes. In regard to renting, since the landlord needs to cover his or her costs, those high taxes are reflected in the rent and so our monthly rents are higher than other areas as well. What sorts of new retail is coming in and how is that influencing the residential market? I believe that the residential and retail markets are feeding off one another. As our buyers become trendier … so do the stores that serve them. We are seeing many more hipster-type retail operations. The river towns have become more of a destination with these new boutiques, antique stores and restaurants, and that’s attracting more buyers. What sort of new housing developments exist in the river towns or are coming down the pike? Hudson Harbor and Westchester Estates in Tarrytown have played a significant role in the increase in sales for that village. Gracemere at Emerald Woods and

some new housing developments about to hit the market in Irvington will certainly boost the sales there.

Patricia Neuwirth

owner/broker, Hudson Homes Sotheby’s International There’s been a lot written about NYC transplants opening hipster-type retail in the river towns. What sorts of new retail is coming in? The shops that are opening are catering to the needs of the people moving into these markets. I think the other side of the county is probably seeing more of that than we are. People are looking for a healthier lifestyle, but it’s not dramatic. Which sector of the market is doing best right now in the area? In some villages it’s the middle market, which is $500,000 to $700,000, that’s doing very well. That is probably the strongest market. Irvington has more high-end houses in the million-dollar range. Generally, the top of the market in these towns is up to $3 million, except for a few isolated properties. We are representing a property in Briarcliff that is $10.9 million, but it’s an estate. Between $500,000 and $1 million is the very active market. What sort of new housing developments exist in the river towns or are coming down the pike? We are a little landlocked. We have the Hudson River on one side and a major network of highways on the other. There are not lots of big tracts of land left, but there are two that are being developed right now. One is on the border of Tarrytown and Irvington. Those are going to be very expensive homes in the neighborhood of $4 to $5 million. In Tarrytown, there is a development of 14 homes priced in the $1.5 to $2.5 million range. Townhouses in Tarrytown with river views can be $2 million easily or a little more. The General Motors plant, which used to be in Sleepy Hollow, has been gone for many years. The tract of almost 100 acres will get developed with mixed use. There will be townhouses and mid-rises, but I can’t tell you when that will start. Why are Brooklyn transplants more attracted to these towns than other towns in Westchester? They are as different as Brooklyn is. Brooklyn is kind of funky. You don’t know what you are going to find when you come around a corner. That’s what these villages are like. There is nothing cookie-cutter about them. TRD www.TheRealDeal.com October 2013 73

Real estate news in the Sunshine State TheRealDeal.com/miami

SOUTH FLORIDA REPORT

Oui, Oui: French are invading SF market First, it was the Brazilians and the Venezuelans. Now, it’s the French and Canadians who are snapping up South Florida’s real estate. The French took the top spot after they went on a buying spree this spring, according to Lanham and Associates, citing a report from the Miami Association of Realtors. Lanham attributes the keen interest in the Sunshine State to taxes — Florida doesn’t tax personal in-

come, and France and Canada both have steep rates — as well as the region’s year-round warm weather and solid rental market.

Nearly all foreign buyers, regardless of what country they are from, are doing all-cash deals. Twothirds of all home sales in Miami close without financing from a

lender; six years ago, only a fifth of sales were all-cash.

well as Clear Title LLC and Titan Capital Florida LLC. He began his legal career in the real estate department of Miami law firm Gunster Yoakley and spent a year in New York City as general counsel of LandTel Communications.

Elliman taps real estate lawyer to head Florida operations The new head of Douglas Elliman’s Florida operations is an attorney who started both a title company and a lending firm. Jay Parker replaces Vanessa Grout, 34, who has returned to the brokerage’s parent company, New Valley LLC, as senior vice president

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South American drug lords have found an easy way to launder their dirty profits — all-cash real estate deals — and the flow of illegal money is driving up home prices and spurring residential development in Miami. The federal government is seeking to seize 77 properties in Miami-Dade County over criminal prosecutions with three months left in the year, compared with 59 in calendar 2012 and 41 in all of 2011. Real estate, according to the South Florida Business Journal, is one of the easiest ways for cocaine traffickers to hide their dealings: They wire the funds to a foreign bank and then form a limited liability corporation to buy property; the LLC supplies a wire transfer or a cashier’s check for an all-cash closing. Federal regulators are pressuring banks and mortgage brokers to spot money laundering, but looser rules for all-cash sales make it an easy way to cover up illicit funds. By Emily Schmall

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

NATIONAL MARKET REPORT

Las Vegas

Downtown Los Angeles

Wayne Newton

Los Angeles

With its purchase of MPG Office Trust for $2.1 billion, Brookfield Office Properties is set to become the biggest office landlord in downtown Los Angeles, an area that is being revitalized with new apartments, hotels and restaurants, the Wall Street Journal reported. MPG, formerly Maguire Properties, owns four downtown L.A. buildings, including the KPMG Tower and the Wells Fargo Tower. With the purchase, Brookfield is betting that the city’s long-struggling downtown office market will turn around along with the larger evolution of the area, which has added more than 23,000 residents in the past few years and new attractions such as the L.A. Live entertainment center. Office vacancy in downtown L.A. was 17.9 percent in the second quarter, up from 14.7 percent three years earlier. In the same period, the city’s overall vacancy rate fell to 17.4 percent from 18.4 percent.

Orlando In a sign that Orlando is attracting more major hospitality brands, the Peabody Orlando hotel — famous for its daily parade of ducks to the lobby fountain — is being sold to Hyatt Hotels Corp. for $717 million, the Orlando Sentinel reported. Built The Peabody Orlando in 1986, the hotel will be rebranded as the Hyatt Regency Orlando Convention Center, becoming the sixth Hyatt-brand hotel in the area. The Peabody deal comes less than a year after the sale of Orlando’s Gaylord Palms hotel to Marriott International. While the sales show that Orlando is attracting more big brands besides Disney, the Sentinel said, it also indicates that smaller, independent hotel companies can’t compete with big corporations. Still, the larger corporations have the potential to fill more rooms and allow Orlando hotels to raise prices, both of which would be good for the local hospitality industry and the region’s economy, the paper said.

Washington D.C. The Trump Organization last month announced plans to invest $200 million in turning the historic Old Post Office Pavilion in Washington, D.C., into a luxury 270-room hotel, USA Today reported. The Trump International Hotel, Washington D.C. is slated for completion in 2015. The site is located on Pennsylvania Avenue between the U.S. Capitol and the White House, an area with a shortage of hotels despite its bevy of tourist attractions. D.C. Mayor Vincent Gray said the new Trump hotel will help define “what the hospitality industry will be on this side of Pennsylvania Avenue.” Built in 1899, the former post office currently houses a few A rendering of the Trump International Hotel, Washington, D.C. shops and some fast food 76 October 2013 www.TheRealDeal.com

Singer Wayne Newton’s 36-acre Las Vegas estate hit the market last month for $70 million, Curbed.com reported. The estate, known as “Casa de Shenandoah,” has been the subject of much legal wrangling since Newton declared bankruptcy in 2010. The property contains eight separate homes.

Pennsylvania Taylor Swift

restaurants. Trump is leasing the property from the federal government for 60 years with the possibility of two 20-year extensions at a monthly rent of $250,000.

Boston Mayor Thomas Menino last month unveiled the details of his plan to build 30,000 housing units in Boston by 2020, the Boston Globe reported. The initiative calls for six new housing projects to be built across the city. One project near Christian Science Plaza the Christian Science Plaza, by Carpenter and Co. and the Pritzker Realty Group, will include a 691-foot tower with a hotel and 170 condos, and a 285-foot building with 255 apartments, along with stores and restaurants. Menino’s initiative, which would require $16.5 billion in public and private investment, also calls for subsidies to make more units affordable to middle-class buyers, and an increase in the fee developers are required to pay to fund affordable housing.

The childhood home of singer Taylor Swift sold last month for $700,000, $99,500 under the asking price, the RedFin Blog reported. Swift moved out of the six-bedroom, 5,000-squarefoot home in Wyomissing, Penn., in 2004, before moving to Tennessee to pursue her singing career, the Philadelphia Inquirer reported.

Newport Beach

Seattle Seattle’s growing technology sector has sparked developers to break ground on new projects amid anticipated increases in the demand for office space, the Wall Street Journal reported. More than 3 million square feet of office space is already under construction in the Seattle region, the paper said. Developer Wright Runstad & Co. last month started work on the Spring District, a 36acre office and apartThe Spring District ment development a short drive from downtown Seattle. The former grocery distribution center will be turned into a complex of office buildings, stores and apartments. The first structures to be built there will be two office buildings with 490,000 square feet of space. Compiled by Evan Bleier

John Wayne

The former home of actor John Wayne is on the market for $3.95 million, the Wall Street Journal reported. Wayne owned the three-bedroom house, located on the Big Canyon Golf Course, in the 1970s. The home’s current owners purchased it in 2011 for $1.77 million.

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ON THE MARKET East Williamsburg multi-family package on the block Three apartment buildings at 64-68 and 65 Maspeth Avenue and 484 Humboldt Street are on the market in East Williamsburg with an asking price of $42 million, ac484 Humboldt Street cording to the real estate data website PropertyShark. The 17,670-square-foot property at 64-68 Maspeth Avenue contains 24 units, the 18,033-square-foot 65 Maspeth Avenue has 25 units, and the 13,175-square-foot 484 Humboldt Street includes 21 units. The owner will consider selling the properties, which are located within a five-block radius of each other, as a package or individually. Robert Knakal, Mark Lively, Brendan Maddigan, Stephen Palmese and Winfield Clifford, all of Massey Knakal Realty Services, are marketing the portfolio.

West Village residential building for sale

632 Hudson Street

A four-story apartment building at 632 Hudson Street is for sale with an asking price of $22 million, the New York Post reported. Located between Jane and Horatio streets, the 8,000-square-foot

Commercial properties recently placed on the market

property includes a residential triplex on the top three floors, and the ground floor features a commercial space that can be used for private events. There is a bar area below grade that has a working kitchen and two bathrooms. Abigail Agranat and Jan Hashey of Douglas Elliman are handling the sale.

East Williamsburg lot asking $18M

Two Midtown East apt. buildings for sale A pair of five-story multi-family buildings in Midtown East is on the market with an asking price of $12.65 million. The 6,915-squarefoot building at 220 East 49th Street, located between Second and Third avenues, is comprised of 10 apartments, two of which are owner occupied. The 7,200-square-foot 220 East 49th Street property at 313 East 53rd Street, located between First and Second avenues, has eight apartments, six of which can be delivered vacant. Eastern Consolidated’s Adelaide Polsinelli, Gary Meese and Michele Nicoletta are handling the assignment.

Mixed-use West Village townhouse drops asking price 120 Union Avenue

A block-through development site in East Williamsburg is hitting the market with an $18 million price tag, according to exclusive listing agent TerraCRG. The 26,000-squarefoot lot, at 120 Union Avenue, could support a residential development of up to 101,282 square feet. While much of the surrounding area is excluded from the city’s 421a tax abatement program, the Union Avenue site qualifies for it. TerraCRG’s Ofer Cohen, Melissa DiBella, Dan Marks, Peter Matheos and Michael Hernandez are marketing the site.

The seller of a West Village townhouse has reduced the asking price of $11.6 million to $10.6 million, Curbed reported. The cost of the 430 Hudson Street digs is offset 430 Hudson Street by the $180,000 per year in rent from the future ground-floor occupant, who already holds a 10-year lease on the vacant space. The residential portion can be delivered vacant, or rented out to an occupant for $30,000 per month. Yanni Marmarou of RKF is handling the sale. Compiled by Linden Lim

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Deal Sheet summary

The Deal Sheet, on pages 82 to 94, covers transactions from 8/11/13 through 9/10/13. Please submit future deals to deals@therealdeal.com.

Sales

Overview

By type

Property sales

Development

Deals Dollars

$1,181,560,00

Financing 8 8

Buildings Aggregate value

Development

10 0

Hotel

Industrial

Mixed-use

Hotel

Multi-family

Transactions

By dollar volume (in millions)

Office Retail

452.55 0 26.35 55.78

Multi-family

197.45

Office

430.30

Retail

19.13

$494,700,000

Leases Office

Retail

Total

Leases square feet Office

514,809

Retail

405,145

Total

919,954

Office leases Office leases by industry Industry

Leases

Office leases sf by industry

Top tenant reps for office leasing by sf

Industry

Tenant representative

Square feet leased 53,813

Square feet leased

Advertising & Marketing

Architecture & Design

5,420

Colliers International

59,000

Construction

6,500

Adams & Co.

40,091

Entertainment

5,594

Newmark Grubb Knight Frank

33,955

Fashion*

89,500

Studley

27,000

Financial

12,380

Cassidy Turley

23,356

Government

94,255

Mohr Partners

22,722

Health & Beauty

Home Furnishings

23,538

Cushman & Wakefield

11,695

Human Resources

22,722

Partners National

11,000

Legal

9,745

RedRock NYC

10,085

Medical

1,397

NYCRS

9,150

NGO

Handler Real Estate

8,500

Other

5,760

49,000

87,545

CBRE Group

Lee & Associates

19,111

Other

32,871

Vicus Partners

7,200

Real Estate

34,671

Fountain Realty Group

5,594

Science & Technology

67,643

Retail leases Top tenant reps for leasing by sf

Retail leases by industry

Broker

Discount

32,500

Fashion

95,850

Square feet leased

Retail leases sf by industry

Cushman & Wakefield

63,000

Fashion

Ripco Real Estate

35,850

Food & Beverage

20,851

Kassin Sabbagh Realty

19,100

Health & Beauty

20,096

Crown Retail Services

15,700

Home Furnishings

Other

Lansco Corp.

7,600

Kalmon Dolgin Affiliates

7,500

NYCRS

4,600

Princeton Realty Group

2,500

RedRock NYC

2,500

Winick Realty

1,875

Besen Retail

1,200

Newmark Grubb Knight Frank

1,100

Midtown Commercial Real Estate (*includes showroom space)

150,000 85,848

571 www.www.TheRealDeal.com October 2013 81

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 8/11/13 to 9/10/13. Please submit future deals to deals@therealdeal.com.

Office leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

440 Ninth Ave

72,000

E.S. Originals / n/a

Sherwood Equities; Paramount Group / Newmark Grubb Knight Frank

The fashion importer signed a lease for floors six through eight.

469 Seventh Ave

66,800

City of New York / K. Cody, J. Morrill, D. Holowink, CBRE

Foremost Real Estate / E. Meyer, M. Meyer, Colliers International

The New York City Police Department’s Manhattan South Traffic Enforcement division signed a 15-year lease for parts of the ground and sixth floors and the entire second, third and fourth floors.

120 Wall St

41,000

AFS-USA / Alan Desino, Colliers International

Silverstein Properties / Represented in-house

The nonprofit signed a 15-year lease to consolidate and relocate its four existing offices throughout the United States.

199 Water St

34,792

Epsilon Data Management / n/a

Jack Resnick & Sons / Cassidy Turley

The data management firm signed a new lease.

1115 Broadway

34,671

Select Office Suites / James Buslik, Adams & Co.

Eleven Fifteen Associates / James Buslik, Adams & Co.

The office space provider signed a 13-year lease. The tenant expanded by 13,005 square feet and renewed its existing lease for 47,676 square feet. The reported asking rent was $48 per square foot.

21 Penn Plaza

27,455

New York State Department of Motor Vehicles / Jeffrey Rosenblatt, Newmark Grubb Knight Frank

Feil Organization; Savanna / Represented in-house

The DMV signed a 10-year lease. The space consists of 1,385 square feet of retail on the ground floor, which will serve as a private entrance for the tenant’s 26,070-square-foot customer service facility on the second level.

2 Park Ave

27,000

Bookspan / G. Marans, K. Ruderman, Studley

Bonnier Corp. / P. Walker, A. Smolyansky, CBRE

The book marketer signed a seven-year sublease on the 10th floor.

437 West 16th St

23,538

Restoration Hardware Holdings Inc. / n/a

Kleinberg family / G. Schwartzman, G. Graf, K. Zakin, C. Ann Flint, Newmark Grubb Knight Frank

The luxury home furnishings company signed a long-term lease to open its first art gallery, the Wall Street Journal reported. The company leased the entire five-story office building.

230 Park Ave

22,722

Lee Hecht Harrison / Lewis Cohen, Mohr Partners

Invesco; Monday Properties / n/a

The talent mobility firm signed a long-term lease for part of the sixth floor.

232 Madison Ave

12,611

NEP Studios / H. Rosen, J. Cannon, Lee & Associates

Princeton Properties / Represented in-house

The production company signed a five-year lease on the seventh and 10th floors/

550 Seventh Ave

11,695

Simpson, Gumpertz & Heger / Jamie Katcher, C&W

n/a / M. Heaner, G. Greenspan, Kaufman Organization

The engineering firm signed a seven-year lease for a full floor. The reported asking rent was $48 per square foot.

292 Madison Ave

11,113

Exponential Interactive / N. Heryet, S. Bellwood, Cassidy Turley

Marciano Investment Group / W. Cohen, R. Kass, Newmark Grubb Knight Frank

The advertising intelligence company signed a lease for the entire 11th floor, the New York Observer reported. The tenant is relocating from 1359 Broadway.

333 Seventh Ave

11,000

Jed Root Inc. / S. Siegel, M. Bergey, D. Bodner, CBRE

Samco Properties / Represented inhouse

The fashion agency signed a 10-year lease for part of the ninth floor. The reported asking rent was $40 per square foot.

375 Pearl St

11,000

Windstream Corp. / Michael Rareshide, Partners National

Sabey Corp. / Michael Morris, Newmark Grubb Knight Frank

The data center company signed a 15-year lease, Crain’s reported. The asking rent was in the $50s per square foot, according to the publication.

340 Madison Ave

10,000

PNC Bank / R. Tunis, S. Hecht, Colliers International

RXR Realty / Represented in-house

The bank signed an expansion lease on the 10th floor, Crain’s reported. The tenant is adding to the 45,000 square feet it already occupies in the building.

1350 Broadway

9,745

Tarter Krinsky & Drogin LLP / P. Amrich, N. King, CBRE

W&H Properties / W. Cohen, R. Kass, N. Rubin, A. Weisz, Newmark Grubb Knight Frank

The law firm signed an expansion lease. It now occupies 37,609 square feet in the building.

30 Irving Pl

8,500

Joester Loria Group / P. Newman, D. Siegel, Handler Real Estate

n/a / Jeffrey Smith, Samco Management

The brand licensing agency signed a 10-year lease to relocate its offices. The tenant is moving from 860 Broadway.

145 East 32nd St

8,000

Albert Ellis Institute / Steve Chasanoff, Colliers International

Ameripath / n/a

The nonprofit signed a sublease for the entire ninth floor.

76 Greene St

7,200

Assembled Brands Group / Bert Rosenblatt, Vicus Partners

72-76 Greene Street LLC / Dennis Someck, Lee & Associates

The branding and marketing company signed a lease for two floors. The reported asking rent was $70 per square foot.

20 West 37th St

6,500

Gorton & Partners / Dennis Someck, Lee & Associates

Neuss family of Argentina / Paul Walker, CBRE

The construction project management firm signed a 10-year lease for the entire 11th floor. The reported asking rent was $38 per square foot.

20 West 37th St

6,500

NedGraphics / Ken Kronstadt, Newmark Grubb Knight Frank

Neuss family of Argentina / Paul Walker, CBRE

The software developer signed a lease for the entire fourth floor.

20 West 37th St

6,500

HYP / Brian Weld, Cassidy Turley

Neuss family of Argentina / Paul Walker, CBRE

The apparel company signed a lease for the entire fifth floor.

133 East 58th St

5,760

Definitions Personal Fitness / n/a

Jack Resnick & Sons / n/a

The fitness company renewed its lease for office space.

485 Madison Ave

5,743

Olympus U.S. Management / C&W

Jack Resnick & Sons / n/a

The office tenant signed a lease renewal.

49 West 23rd St

5,594

Riot Games Inc. / Fountain Realty Group

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

The video game company signed a new lease. The reported asking rent was $45 per square foot.

455-457 Broadway

5,500

n/a / L. Joseph Posner, NYCRS

n/a / Kim Skarvelis, Cast Iron Real Estate

The tenant signed a five-year office lease.

11 East 26th St

5,420

Anbau Enterprise / Jeffrey Buslik, Adams & Co.

East Twenty Sixth Associates / James Buslik, Adams & Co.

The architecture firm signed a new lease. The reported asking rent was $55 per square foot.

11 Hanover Sq

3,650

n/a / L. Joseph Posner, NYCRS

n/a / John Cryan, Mt. Pleasant Management Corp.

The tenant signed a lease for the entire 15th floor.

65 Broadway

2,380

Innovative Accounting Solutions / Taso Hatzimichael, RedRock NYC

Am Properties / n/a

The financial firm signed a seven-year lease. The reported asking rent was $37 per square foot.

75 Maiden Lane

2,016

Muratek Tech Group / T. Hatzimichael, D. Likas, RedRock NYC

n/a / n/a

The tech firm signed a seven-year lease. The reported asking rent was $35 per square foot.

3210 Broadway (Queens)

1,899

A&C Air / T. Hatzimichael, D. Likas, RedRock NYC

n/a / Taso Hatzimichael, RedRock NYC

The creative firm signed a 10-year lease. The reported asking rent was $43 per square foot.

125 Maiden Lane

1,000

Energy Investments / T. Hatzimichael, D. Likas, RedRock NYC

n/a / Nadja Galloway, Time Equities

The company signed a five-year office lease. The reported asking rent was $35 per square foot.

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Office leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

75 Maiden Lane

875

GRMS IT Consulting / T. Hatzimichael, D. Likas, RedRock NYC

Am Properties / n/a

The IT firm signed a five-year lease. The reported asking rent was $35 per square foot.

110 William St

765

MRT Trading LLC / Taso Hatzimichael, RedRock NYC

n/a / n/a

The IT firm signed a lease. The reported asking rent was $40 per square foot.

133 East 58th St

727

Martin Kent, DDS / n/a

Jack Resnick & Sons / n/a

The dental office signed a lease renewal.

401 East 80th St

700

Parkstar Clean Corp. / n/a

Jack Resnick & Sons / n/a

The tenant signed a lease renewal.

133 East 58th St

670

Dr. Carl Meese / n/a

Jack Resnick & Sons / n/a

The medical office signed a lease.

139 Fulton St

650

Love to Talk / Dino Likas, RedRock NYC

U.N.Y.P.O. / n/a

The creative firm signed a three-year lease. The reported asking rent was $60 per square foot.

401 East 80th St

618

Sun Hwan Ban / n/a

Jack Resnick & Sons / n/a

The tenant signed a lease renewal.

75 Maiden Lane

500

Guge Productions / Taso Hatzimichael, RedRock NYC

Am Properties / n/a

The creative firm signed a five-year lease. The reported asking rent was $35 per square foot.

Retail leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

55 Water St (Brooklyn)

150,000

West Elm / n/a

Midtown Equities; Rockwood Capital; HK Organization / n/a

The home furnishings retailer signed a 20-year lease to relocate its West Elm store, West Elm market store and its company headquarters to the Empire Stores complex, where construction is slated to begin early next year, Crain’s reported. The tenant is consolidating its office and retail locations from 75 Front Street, 50 Washington Street and 45 Main Street.

34th St and Broadway

63,000

H&M / Robert Gibson, C&W

JEMB Realty / Susan Kurland, CBRE

The fashion retailer signed a 25-year lease for a new location at Herald Center.

575 Degraw St (Brooklyn)

40,000

New York Dialysis Services; New York Daily News; Brooklyn Boulders / n/a

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

The tenants leased retail space.

401 East 80th St

32,005

Quick Park Garage / n/a

Jack Resnick & Sons / n/a

The parking garage operator signed a lease renewal.

370 Canal St

15,700

Planet Fitness / R. Chera, J. Barker, Crown Retail Services

Magna Hospitality Group / K. Ota, J. Pruger, A. Cukier, Newmark Grubb Knight Frank

The fitness chain signed a lease for a new location.

675 Sixth Ave

10,000

Harmon Face Values / R. Skulnik, A. Mandell, P. Ripka, Ripco Real Estate

675 Avenue of the Americas LLC / R. Skulnik, A. Mandell, P. Ripka, Ripco Real Estate

The discount beauty products retailer signed a 10-year lease.

1726 McDonald Ave (Brooklyn)

10,000

Deal$ by Dollar Tree / R. Senior, E. Bukai, M. Mahony, Ripco Real Estate

FRS Realty / R. Senior, E. Bukai, M. Mahony, Ripco Real Estate

The discount chain signed a seven-year lease for a new location.

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Retail leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

2244 Church Ave (Brooklyn)

10,000

Deal$ by Dollar Tree / M. Mahony, R. Senior, E. Bukai, Ripco Real Estate

The Babaev Group / M. Mahony, R. Senior, E. Bukai, Ripco Real Estate

The discount chain signed a lease for a new location.

547 Broadway and 118 Mercer St

7,600

Clark’s / M. Cohen, A. Victor, Lansco Corp.

n/a / M. Tergesen, J. Brod, R. Kempner, ABS

The shoe company signed a lease for its first Soho store, the New York Post reported.

74 Guernsey St (Brooklyn)

7,500

Beacon’s Closet / Heather Rae Hatton, Kalmon Dolgin Affiliates

n/a / N. Dolgin, G. Dolgin, Kalmon Dolgin Affiliates

The clothing retailer signed a lease.

33 West Tremont Ave (The Bronx)

7,272

Brightside Academy / n/a

Atlantic Development / Kathy Zamechansky, KZA Realty Group

The childcare center signed a 10-year retail lease.

440 East Fordham Rd (The Bronx)

5,850

Famous Footwear / P. Ripka, M. Mahony, T. Rettaliata, B. Schuster, Ripco Real Estate

One Fordham Plaza / P. Ripka, M. Mahony, T. Rettaliata, B. Schuster, Ripco Real Estate

The shoe retailer signed a 10-year lease for a new location.

151 East Burnside Ave (The Bronx)

5,000

Apparel 4 Burnside / M. Sitt, A. Manopla, Kassin Sabbagh Realty

Marchaz Realty / Marc Sitt, Kassin Sabbagh Realty

The apparel rertailer signed a 10-year lease.

805 Pennsylvania Ave (Brooklyn)

3,050

Denny’s / n/a

Renaissance Realty Group / n/a

The restaurant chain signed a lease for a new location.

100 Reade St

2,600

Rogers Marvel Architects / n/a

n/a / Will Suarez, Massey Knakal

The architecture firm leased retail space.

178 Stanton St

2,500

Creative Restaurant Concepts / Jonathan DiGiovanni, Princeton Realty Group

178 Stanton Street LLC / n/a

The restaurant signed a new lease.

4804 Broadway

2,500

Dollar Plus / Taso Hatzimichael, RedRock NYC

n/a / Taso Hatzimichael, RedRock NYC

The discount chain signed a 10-year lease for a new location. The reported asking rent was $60 per square foot.

138 West Houston St

2,400

Blini Bar and Restaurant / M. Fernandez, K. Brandman, NYCRS

n/a / Henry Galasso, East Coast Stores LLC

The restaurant signed a seven-year lease.

78-14 Roosevelt Ave (Queens)

2,300

Glory Shoes / Albert Manopla, Kassin Sabbagh Realty

Com Jem / Albert Manopla, Kassin Sabbagh Realty

The shoe retailer signed a 10-year lease for a new location. The reported asking rent was $70 per square foot.

151 Grand St

2,200

Flud Watches / J. Famularo, R. Idnani, NYCRS

Time Equities / n/a

The watch retailer signed a 10-year lease. The reported asking rent was $125 per square foot.

37 Graham Ave (Brooklyn)

2,000

Glory Shoes / Albert Manopla, Kassin Sabbagh Realty

S & J Trust / n/a

The shoe retailer signed a lease for a new location.

Columbus Ave and 100th St

1,875

Bareburger / J. Isa, B. Tregerman, Winick Realty

n/a / K. Gedinsky, L. Shabtai, Winick Realty

The burger chain signed a 15-year lease at the Columbus Square apartment building.

928 Amsterdam Ave

1,800

n/a / n/a

n/a / David Chkheidze, Massey Knakal

A Chinese restaurant signed a lease.

80 Bowery

1,800

Apex Family Dental / Albert Manopla, Kassin Sabbagh Realty

New Wave Realty Inc. / Albert Manopla, Kassin Sabbagh Realty

The dental office signed a 10-year retail lease. The reported asking rent was $50 per square foot.

415 Greenwich St

1,576

Juice Press / n/a

Flywheel Sports / P. Whitenack, C. Johnson, RKF

The juice bar signed a lease.

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TL_RealDeal MAG 9.29.13.indd 1

9/30/13 4:50 PM

Retail leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

401 East 80th St

1,396

Escape Nail Spa Inc. / n/a

Jack Resnick & Sons / n/a

The nail salon signed a lease renewal.

58 East 34th St

1,200

Pink Rose Body Work / Albert Manopla, Kassin Sabbagh Realty

J&TSAI Inc. / Albert Manopla, Kassin Sabbagh Realty

The tenant signed a 10-year retail lease. The reported asking rent was $85 per square foot.

80 Broad St

1,100

Gregory’s Coffee / n/a

Savanna / A. Zhen, M. Frankel, Newmark Grubb Knight Frank

The coffee chain signed a 15-year lease for a new location.

100 Wall St

1,100

Gregory’s Coffee / Benjamin Birnbaum, Newmark Grubb Knight Frank

Savanna / A. Zhen, M. Frankel, Newmark Grubb Knight Frank

The coffee chain signed a 15-year lease for a new location.

208 East 14th St

1,100

Dunkin’ Donuts / Bunny Escava, Kassin Sabbagh Realty

Shnay Development / Marc Leber, Newmark Grubb Knight Frank

The donut chain signed a 15-year lease for a new location. The reported asking rent was $200 per square foot.

71 Nassau St

1,000

Elixir Juice Bar / M. Sabbagh, A. Manopla, Kassin Sabbagh Realty

71 Nassau Street LLC / M. Sabbagh, A. Manopla, Kassin Sabbagh Realty

The juice bar signed a 10-year lease for a new location. The reported asking rent was $200 per square foot.

90 Broad St

1,000

Dunkin’ Donuts / Bunny Escava, Kassin Sabbagh Realty

90 Broad Owner LLC / Edward Ditolla

The donut chain signed a 15-year lease for a new location. The reported asking rent was $175 per square foot.

18 Hillel Pl (Brooklyn)

1,000

Perfect Brows / Albert Manopla, Kassin Sabbagh Realty

McDonald’s / n/a

The threading salon signed a lease for a new location. The reported asking rent was $80 per square foot.

2460 Grand Concourse (The Bronx)

800

Perfect Brows / Albert Manopla, Kassin Sabbagh Realty

Sol Goldman Investments / n/a

The threading salon signed a 10-year lease. The reported asking rent was $120 per square foot.

164 West 225th St

800

n/a / Kristy Schunk, Besen Retail

A deli and grocery store signed a lease.

139 Fulton St

800

E.L.F. Cosmetics / M. Sabbagh, B. Escava, Kassin Sabbagh Realty

UNYPO LLC / n/a

The cosmetics retailer signed a 10-year lease. The reported asking rent was $200 per square foot.

63 West 8th St

700

Vivi Bubble Tea / Albert Manopla, Kassin Sabbagh Realty

Sol Goldman Investments / n/a

The bubble tea chain signed a 10-year lease for a new location. The reported asking rent was $300 per square foot.

205 West 57th St

571

An American Craftsman Inc. / Midtown Commercial Real Estate

Jack Resnick & Sons / n/a

The tenant signed a retail lease.

1516 First Ave

450

First Avenue Liquors Inc. / Shanon McAlister, SLMC Corp.

Jack Resnick & Sons / n/a

The liquor store signed a new lease.

403 Broome St

400

Pink Clouds for Grey Days / Greg Kim, Veracity Real Estate

n/a / Greg Kim, Veracity Real Estate

The online fashion retailer signed a lease for its first brick-and-mortar store.

40 Water St

400

Perfect Brows / Albert Manopla, Kassin Sabbagh Realty

40 Water Street LLC / n/a

The threading salon signed a 10-year lease for a new location. The reported asking rent was $250 per square foot.

123 East 7th St

400

Shunan Teng / Kristy Schunk, Besen Retail

n/a / M. Mager, K. Schunk, Besen Retail

The tenant signed a lease.

125 East 7th St

400

Oaxaca Taqueria / Daniel Satterwhite, Buchbinder & Warren

n/a / M. Mager, K. Schunk, Besen Retail

The Mexican restaurant signed a lease.

Buys Address

Size

Buyer / Representative

Seller / Representative

Notes

333 West 34th St

10-story, 347,000 sf office bldg

American Realty Capital New York Recovery REIT / n/a

SL Green / n/a

The property sold for $220.3 million. The building is 100 percent leased to four tenants: the Segal Company, the Metropolitan Transportation Authority, Godiva Chocolatier and Sam Ash New York Megastores.

600 Madison Ave

25-story, 315,918 sf office bldg

n/a / n/a

n/a / P. Massey, C. Olsen, Massey Knakal

The building’s fee position sold subject to a long-term ground lease for $210 million. The property has 280 feet of frontage.

10th Ave and West 30th St

Development site

McCourt Partners / n/a

Sherwood Equities; Long Wharf Real Estate Partners / n/a

The property sold for $167 milion, the Wall Street Journal reported. The developer plans to build a 730,000-square-foot mixed-use tower on the site.

301 and 305 East 50th St

Development site

CB Developers / n/a

Fishman Holdings / n/a

The property sold for $69 million. Permits are in place for a 29-story, 57-unit residential building on the site.

113-117 West 24th St

270,000 buildable sf development site

n/a / n/a

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

The property sold for $67.5 million, or $251 per buildable square foot.

151-161 Maiden Lane

Development site

Fortis Property Group / n/a

Kay Development Group / H. Hwang, N. Rockett, S. Kohn, J. Kelso, J. LiGreci, B. Mosler, C&W

The property sold for $64 million. The 11,539-square-foot lot offers nearly 250,000 square feet of buildable space.

202 8th St (Brooklyn)

12-story, 50,000 sf apt. bldg, 51 units total

Werber Management / n/a

JDS Development; Property Markets Group / B. Knakal, E. Berlin, Massey Knakal

The property sold for $37.75 million.

Bronx portfolio

Six 5-story apt. bldgs, 300 units total

Chestnut Holdings / n/a

Gore Creek LLC / n/a

The multi-family buildings sold for $29 million. The properties are located at 1565, 1575, 2080-2090, 2095 and 2894 Grand Concourse and 2077 Anthony Avenue.

195 and 231 Steuben St (Staten Island)

Two 7-story apt. bldgs, 198 units total

The Arker Companies / Dane Professional Consulting Group

DelShah Capital / Dane Professional Consulting Group

The properties sold for $27 million.

29 Ryerson St and 256 Flushing Ave (Brooklyn)

2 industrial bldgs and parking lot

11-45 Ryerson Holdings LLC / A. Shmaruk, M. Sherman, Manhattes Group

29 Ryerson Street LLC / A. Shmaruk, M. Sherman, Manhattes Group

The properties sold for $26.35 million.

34-64 Hillside Ave

6-story, 161,281 sf apt. bldg

34 Hillside Avenue / n/a

Vantage Properties / n/a

The property sold for $26 million.

232 West 58th St

Development site

Extell Development Company / n/a

n/a / Ronen Korin, Manhattan Connection

The property sold for $25 million.

239 10th Ave

Development site

n/a / n/a

n/a / B. Emmetsberger, J. Nelson, Massey Knakal

The property sold for $23.5 million.

149-151 East 78th St

9,995 sf comm. bldg

n/a / Brian Ezratty, Eastern Consolidated

n/a / B. Tapper, M. Jones, Eastern Consolidated

The property sold for $18.25 million. The site has additional air rights for future development and a total buildabe square footage of 23,661 square feet.

To view more deals visit our website: www.TheRealDeal.com 88 October 2013 www.TheRealDeal.com

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Buys continued Address

Size

Buyer/ Representative

Seller / Representative

859-861 Ninth Ave

6-story, 28,782 sf mixed-use bldg

n/a / n/a

n/a / P. Smadbeck, C. Brodhead, Massey Knakal

The property sold for $17 million, or about $591 per square foot.

275 Fourth Ave (Brooklyn)

60,200 buildable sf development site

275 4th Ave Investors LLC / n/a

Heron Real Estate Corp. / TerraCRG

The property sold for $14.8 million, or $246 per buildable square foot.

27 East 11th St

5-story, 7,050 sf townhouse

n/a / n/a

n/a / James Nelson, Massey Knakal

The property sold for $11.8 million, or about $1,674 per square foot.

27-37 27th St (Queens)

4-story apt. bldg, 40 units total

n/a / n/a

n/a / E. Daniel, J. Nelson, Massey Knakal

The property sold for $11.5 million, or about $376 per square foot.

818 10th Ave

5-story apt. bldg, 12 units total

818 10th Avenue NYC LLC / Amit Doshi, Besen & Associates

818 Tenth Realty LLC / Glenn Raff, Besen & Associates

The walk-up sold for $8.5 million.

50 Spring St

5,242 sf mixed-use bldg

Crosby Street Partners / n/a

Arnold Industries LLC / Donna Padula, Azad Property Group

The property sold for $7.5 million, or $1,430 per square foot.

29 West 84th St

5-story apt. bldg, 17 units total

n/a / Cathy Connolly, Vandenberg Inc.

Carlton Management / David Bess, Besen & Associates

The walk-up sold for $7 million. The price represents a capitalization rate of 3.3 percent and a gross rent multiple of 17.9.

One Wall Street Court

7,100 sf retail condo

Red Pine Capital Partners / Lorico Real Estate Investment Services

n/a / J. Ventura, G. Kunofsky, Marcus & Millichap

The property sold for $7 million.

8 Centre Market Pl

5-story mixed-use bldg

8 Centre Market Place NYC LP / Glenn Raff, Besen & Associates

8 Center Realty LLC / Amit Doshi, Besen & Associates

The property sold for $6.95 million.

150 Myrtle Ave (Brooklyn)

10,976 sf retail condo

Michael C. Salzhauer Ltd. / n/a

Myrtle Owner LLC / TerraCRG

The retail condo sold for $6.75 million.

69 Gansevoort St

2,950 sf mixed-use bldg

DelShah Capital / n/a

n/a / n/a

The property sold for $6.5 million. There are an additional 7,160 square feet of air rights for future development.

526-528 and 514 86th St (Brooklyn)

Two mixed-use bldgs

n/a / n/a

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

The property sold for $6 million, or about $371 per square foot.

63 Montague St (Brooklyn)

10,000 sf apt. bldg

Benchmark 63 LLC / n/a

n/a / n/a

The property sold for $5.65 million. The price represents a capitalization rate of 6 percent.

423 Lenox Ave, 439 Lenox Ave, 134 West 133rd St., 14042 West 133rd St

4 apt. bldgs, 46,368 sf total

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

The properties sold for $5.25 million.

458-468 East 51st St (Brooklyn)

6-story apt. bldg, 53 units total

Rockaway Capital / Aaron Jungreis, Rosewood Realty

458 Realty LLC / Aaron Jungreis, Rosewood Realty

The property sold for $4.9 million.

316 Lexington Ave

5-story mixed-use bldg

n/a / n/a

n/a / John Ciraulo, Massey Knakal

The property sold for $4.33 million, or $723 per square foot.

241 East 24th St

5-story mixed-use bldg

n/a / O. Babo, Y. Simantov, GFI Realty

The property sold for $4 million.

Notes

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Buys continued Address

Size

Buyer / Representative

Seller / Representative

Notes

1657 Eighth Ave

10,596 sf mixed-use bldg

n/a / Shlomo Antebi, GFI Realty

n/a / Roni Abudi, GFI Realty

The property sold for $3.5 million.

237 Henry St

5-story apt. bldg

n/a / n/a

n/a / M. DeCheser, M. Wong, Massey Knakal

The property sold for $3.35 million, or $409 per square foot.

407 East 58th St

4-story, 3,315 sf multi-family townhouse

n/a / n/a

n/a / Clint Olsen, Massey Knakal

The property sold for $3.3 million, or about $995 per square foot.

45-35 Parsons Blvd (Queens)

4-story apt. bldg, 20 units total

Solo Capital LLC / G. Corbin, J. Himmelstein, Besen & Associates

George Skondras / G. Corbin, J. Himmelstein, Besen & Associates

The walk-up sold for $3.24 million.

629-631 West 138th St

5-story apt. bldg, 21 units total

n/a / n/a

n/a / D. Simone, R. Shapiro, Massey Knakal

The property sold for $2.5 million, or about $143 per square foot.

150 Myrtle Ave (Brooklyn)

97-space parking garage condo

JBS Realty LLC / n/a

Myrtle Owner LLC / TerraCRG

The parking garage sold at the Toren condo for $2.25 million, or $103 per square foot.

1231 St. Lawrence Ave (The Bronx)

5-story apt. bldg, 28 units total

Liberty Community Management; Beno Group / Amit Doshi, Besen & Associates

n/a / R. Torres, P. DeGennaro, Besen & Associates

The walk-up sold for $2.12 million.

699-723 Morris Park Ave (The Bronx)

21,850 sf retail bldg

699 MP Realty LLC / n/a

699 Morris Park Avenue Corp. / Kathy Zamechansky, KZA Realty Group

The property sold for $2.05 million.

61-03 and 61-20 Metropolitan Ave (Queens)

Development site

n/a / Joe Ibrahim, Right Time Realty

The properties sold to two individual purchasers for a combined $2 million.

83-85 Eagle St (Brooklyn)

3-story apt. bldg, 8 units total

Eric Orlofsky / n/a

Esther Correa / TerraCRG

The property sold for $2 million.

2883 Atlantic Ave (Brooklyn)

4-story apt. bldg, 13 units total

Gershon Eichorn / Lev Mavashev, Besen & Associates

Madison Realty Capital / Lev Mavashev, Besen & Associates

The property sold for $1.84 million.

141 Meserole Ave (Brooklyn)

4-story, 7,500 sf apt. bldg, 8 units total

Silvershore Properties / n/a

n/a / n/a

The property sold for $1.8 million.

1282 Shakespeare Ave (The Bronx)

43,544 buildable sf development site

n/a / n/a

n/a / David Simone, Massey Knakal

The property sold for $1.5 million, or $34 per buildable square foot.

115 Powers St (Brooklyn)

6-unit apt. bldg

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

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

The property sold for $1.5 million, or about $363 per square foot.

142 Fourth Ave (Brooklyn)

4-unit apt. bldg

n/a / Matthew Fotis, Marcus & Millichap

The property sold for $1.45 million.

243-06/10 Merrick Blvd (Queens)

1-story retail bldg

n/a / n/a

n/a / B. Sarath, S. Preuss, Massey Knakal

The property sold for $1.08 million, or about $239 per square foot.

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554 FIFTH AVENUE , NEW YORK, NY Retail Space For Lease Multi Level Flagship Retail between 45th - 46th Street

3,600 -14 -14,600 SQ. FT. in the worldâ&#x20AC;&#x2122;s most cov coveted retail location

FIFTH AVENUE, NEW YORK CITY F

Ground Floor 1800 Sq Ft

Second Floor 1860 Sq Ft

Dermer Real Estate daniel@dermerrealestate.com

Daniel Dermer 917-202-2337

Financing Address

Size

Borrower / Representative

Lender / Representative

Notes

50 West St

63-story apt. bldg

Time Equities / n/a

PNC Bank; Wells Fargo; Elliott Management / n/a

A $400 million construction loan was provided for the development. The debt financing came from PNC Bank, which led a $288 million loan syndication that also includes Wells Fargo and other major banks. Time Equities also secured $110 million in equity financing from hedge fund management firm Elliott Management for the tower.

522 West 29th St

27-unit apt. bldg

Blackhouse Development / n/a

East West Bank / n/a

A $70 million loan was provided for the new development.

534 West 29th St

10-story apt. bldg

Blackhouse Development / n/a

Valley National Bank / n/a

A $12 million loan was provided for the new development.

629 Kappock St (The Bronx)

98-unit apt. bldg

Bonnie Crest Owners Inc. / n/a

NCB / n/a

A $3 million first mortgage and a $500,000 line of credit were arranged for the building.

50 Park Terrace East

73-unit apt. bldg

Park Terrace Owners Corp. / n/a

NCB / n/a

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

136 East 76th St

87-unit apt. bldg

East 76th Street Realty Co. Inc. / n/a

NCB / n/a

A $1.6 million first mortgage and a $1 million of credit were arranged for the building.

32 West 20th St

18-unit apt. bldg

Thirty-Two West 20th Street Inc. / n/a

NCB / n/a

A $1.6 million first mortgage and a $500,000 line of credit were arranged for the building.

133-137 Greene St

14-unit apt. bldg

Big Deal Realty on Greene Street Inc. / n/a

NCB / n/a

A $1.3 million first mortgage and a $200,000 line of credit were arranged for the building.

Other Deals Sony moving to Sapir’s 11 Madison Ave. Electronics giant Sony, fresh off the sale of its $1.1 billion headquarters at 550 Madison Avenue to the Chetrit Group, is moving to the Sapir Organization’s 11 Madison Avenue. Sony will take 500,000 square feet at the very top of the 2.3 million-square-foot, 30-story tower between East 24th Street and 25th Street that overlooks Madison Square Park, sources told the New York Post. While no lease has been inked, Sony does have a term sheet, the sources added. The Sapir Organization’s Alex Sapir and Rotem Rosen along with CIM Group — which has a 49 percent stake in the building — cut a deal with current tenant Credit Suisse in order to lure Sony in. (The deal was announced after the deadline for the Deal Sheet.)

New Jersey–based Orbach Group pays $246 million for UWS portfolio The New Jersey-based real estate investment company the Orbach Group purchased a 33-building residential apartment package on the Upper West Side for $246 million last month from a joint venture of Heritage Real Estate Partners and Dune Real Estate Partners, the buyer told The Real Deal. The portfolio includes 1,031 apartment units and one store in properties such as the 20-unit 65 West 107th Street and the 10-unit 125 West 106th Street. The sale is a boon for Heritage and Dune. The companies picked up the portfolio after buying the defaulted note in November 2011 for approximately $120 million, insiders close to the deal said. (The deal was announced after the deadline for the Deal Sheet.)

GM sublets 38K sf at namesake office tower General Motors Company, which lends its name to the most valuable office property in America, has found a tenant for one of its three remaining floors at the Boston Properties-owned tower at 767 Fifth Avenue, The Real Deal has learned from CompStak. GM will sublet 38,100 square feet on the entire sixteenth floor of the 50-story, 2 million-square-foot property to investment firm Reservoir Capital, the CompStak data show. GM is currently paying per-square-foot rents in the high $80s for the space, and Reservoir will get a slight discount, paying rents starting in the low $80s. (The deal was announced after the deadline for the Deal Sheet.)

learned. The Papaionnou family intends to transform 411 Ninth Avenue into 26 rental apartments, five of which will be intended for low- to moderate-income tenants, with two retail spaces on the ground floor. Each floor of the residential portion will have one two-bedroom unit and one studio, George Papaionnou said.

Lloyd Goldman-led partnership to buy historic Midway Theater A group of local New York City real estate investors including BLDG Management’s Lloyd Goldman, Eric Roth of Brick Capital and Eastern Consolidated’s Brian Ezratty have purchased the famed Midway Theater retail building in Forest Hills for $20.5 million, Roth told The Real Deal last month. The two-story, 48,400-square-foot property, at 108-22 Queens Boulevard and 71st Road, is currently home to the United Artists Regal Cinema multi-screen movie theater. (The deal was announced after the deadline for the Deal Sheet.)

Magnum buys top 21 floors of Verizon building Verizon has sold the top 21 floors of its 140 West Street headquarters to Ben Shaoul’s Magnum Real Estate, which will convert the space into residential condominiums. A total of roughly 1.8 million square feet in the upper portion of the 31-story Financial District building would be affected. Verizon, meanwhile, will hang on to the lower 10 floors of the building. The company said in May it was looking to sell or rent the square footage. The price of the sale, which will require the relocation of around 1,100 Verizon employees, was not disclosed to Crain’s. (The deal was announced after the deadline for the Deal Sheet.)

RFR pulls in $100M refinancing for 160 Fifth Aby Rosen’s RFR Holdings has secured $100 million in financing for 160 Fifth Avenue. The move will enable RFR to retire $65 million in existing debt on the boutique office property, which it acquired in 2005. “We continue to pursue our portfolio-wide strategy to limit rate exposure through refinancing,” Mark Weiss, chief investment officer at RFR, said in a statement. “RFR has 100 percent leased the property and completed a major renovation and restoration program that substantially enhanced the value of the asset.” (The deal was announced after the deadline for the Deal Sheet.)

Ex-Cheyenne Diner site slated for rental, retail development

Three financial firms sign leases at 527 Madison

A restaurant-owning family plans to turn a Midtown West lot that held a star-studded diner for nearly 70 years into a 13-story mixed-use building, The Real Deal has

Three financial firms have signed leases at Midtown trophy 527 Madison Avenue, The Real Deal has learned. New York City-based hedge fund Long Pond Capital

80 2009 www.TheRealDeal.com 94 July October 2013 www.TheRealDeal.com

signed a four-year, 8,200-square-foot lease for the 15th floor of the tower, at 54th street, while fixed-income brokerage and financial advisory firm Wunderlich Securities took the 10th floor’s 8,600 square feet for five years. A second hedge fund, Meru Capital, also signed an approximately 8,000-square-foot lease, renewing its 17th-floor space for six years. (The deal was announced after the deadline for the Deal Sheet.)

Rival developer’s nearby buy halts Washington Heights project Quadriad Realty’s controversial plan to build up to three skyscrapers near 192nd Street in Washington Heights is uncertain now that a rival developer has purchased two of the buildings on the proposed site. HAP Investment Developers’ acquisition of 4452 and 4454 Broadway, the city said, put Quadriad’s plan to secure zoning changes and build the three towers on hold. Until or unless the two developers reach an agreement, the project cannot proceed. “This is on hold right now, and it has been on hold since June,” Edwin Marshall, Department of City Planning spokesman, told Community Board 12’s land use committee. “You can’t rezone property you don’t own.”

Planet Fitness joins three other gyms in jock-friendly Jamaica Downtown Jamaica in Queens is now officially a destination for gym rats: Planet Fitness has inked a lease in a new 36,000-square-foot retail center, making it the fourth health club in the neighborhood. Planet Fitness will set up shop at 168-50 Jamaica Avenue, not far from Bally Total Fitness, Lucille Roberts and Blink Fitness. The strip mall is slated to open in about nine months, according to DNAinfo, which did not report the square footage of the deal. Metropolitan Skyline is marketing the project for developer ACHS Management. (The deal was announced after the deadline for the Deal Sheet.)

Kaufman signs two office leases in Midtown The Kaufman Organization recently brokered two deals totaling 14,500 square feet of office space in Midtown. Icon Trading inked a nine-year lease for 10,000 square feet of showroom, e-commerce and warehouse space at 230 West 38th Street. Elliot Warren of Kaufman represented the tenant while Jay Caseley and Andy Udis of ABS Partners Real Estate represented the landlord. The asking rent was $28 per square foot. In another Kaufman-brokered deal, Selerity, a financial data and media company, signed on for 4,500 square feet. (The deal was announced after the deadline for the Deal Sheet.) TRD

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Development updates LEASING UPDATES

Brooklyn Heights 184 Joralemon Street The 24-unit, 12-story rental building, developed by United American Land, is now 50 percent leased. Monthly rents for the 900 to 1,000-square-foot two-bedroom units range from $4,250 to $5,650. Amenities include in-unit washer/dryers. Ideal Properties Group is the agent. Contact: 184joralemon.idealpropertiesgroup.com.

Long Island City The Maximilian 5-11 47th Avenue Leasing has started at the 188-unit rental building, developed by Rose Associates and O’Connor Capital Partners. The studio, one- and two-bedroom units range from 589 to 1,022 square feet. Monthly rents start at $1,975 for studios, $2,495 for one-bedrooms and $3,395 for two-bedrooms. Building amenities include concierge service, roof deck, residents’ lounge with billiards room, fitness center and bicycle storage. Rose Associates is the agent. Contact: www.themaximilianlic.com.

Noho 37 Great Jones Street

leased. Available units include one-bedrooms renting from $2,704 per month and two-bedrooms starting at $4,216 per month. Building amenities include parttime doorman, fitness center, gaming room and roof deck. Aptsandlofts.com is the agent. Contact: www.53broadway.com. SALES UPDATES

Brooklyn Heights Love Lane Mews 9 College Place The 38-unit, 5-story condo conversion, developed by Manhattan Skyline Management Corp, is now 100 percent sold. The one-, two-, three- and four-bedroom residences range in size from 988 to 3,442 square-feet and in price from $895,000 to $4.57 million. Building amenities include bicycle storage, fitness center, doorman/ concierge service and parking. Contact: www.manhattanskyline.com.

Gramercy Park

would like to welcome

The Chen Sisters Li & Juan

who have worked to expand Siderow’s global reach to Chinese buyers & investors We’d also like to congratulate Mrs. Peggy Dahan On her completion of over $15m in Sales this Summer And her promotion to Associate Broker NOW LEASING New Siderow Associates 1100 Madison Avenue Sean Sears Alphonse Conner Prewar UES Rentals Aaron Pagan Nicole Dahan Prime Retail Opportunities: 55th & Lexington 70’s & Third Avenue For More Information Thomas Smythe Kips Bay Contact Our Commercial 212-601-9747 Upper Manhattam Leasing Department tsmythe@siderow.com

The Siderow Organization offers brokerage services for commercial and residential real estate, sales and leasing. We exclusively represent 4,000 units in NYC as well as multiple office, retail and medical properties too. To Join Our Expanding Firm Please contact hr@siderow.com For more information regarding Commercial & Residential agent positions 315 Madison Avenue, Suite 801 - www.siderow.com - 212-601-9728 96 October 2013 www.TheRealDeal.com

The four-unit, five-story rental project has started leasing, with occupancy slated for January 2014. Developed by Dib Management, the building offers two-bedroom, 2,165-square-foot units with rents ranging from $10,000 to $12,000 per month, while the 3,602-square-foot, three-bedroom penthouse will rent for $25,000 per month. Building amenities include a virtual doorman, private storage, keyed elevator access and 24-hour security surveillance. Daizy Realty is the agent. Contact: www.37greatjones.com.

Williamsburg 101 Bedford Avenue The first two buildings in this 351-unit rental complex, developed by Halcyon Management Group, are now 70 percent leased. The studio, one- and two-bedroom units range in size from 459 to 812 square feet, and rents range from $2,500 to $6,000 per month. Building amenities include a doorman, concierge, fitness center, indoor pool with hot tub and sauna, wine vault, party room, screening room, recording and photography studio and on-site parking. Contact: www.101bedford.com. 53 Broadway The 75-unit rental project, developed by Adam America Real Estate in conjunction with the Horizon Group, is now 65 percent

Rutherford Place at Stuyvesant Square 305 Second Avenue Sales have launched at the 78-unit, 10-story condominium, developed by Rutherford Palace LLC. The building offers one-, twoand three-bedroom apartments, ranging in size from 600 to 2,000 square feet and in price from $600,000 to $2.5 million. Building amenities include a doorman, bicycle room, gym and roof deck. Cantor-Pecorella is the agent. Contact: www. rutherfordnyc.com.

Park Slope 371 Sixth Avenue Sales have launched at the four-unit, four-story condominium, developed by East River Partners. The two-bedroom apartments range in price from $1.15 to $2.095 million and in size from 1,047 to 2,069 square feet. Contact: www.371sixth. com.

Upper East Side 515 East 72nd Street The 326-unit, 41-story condominium is now over 90 percent sold. Available homes include studio, two-, three- and four-bedroom units, and a five-bedroom penthouse. The homes range in size from 529 to 4,200 square-feet and in price from $775,000 to over $4 million. Building amenities include a spa, fitness center, indoor pool, basketball/ squash court, rock climbing wall, 24-hour concierge and doorman and on-site parking. Corcoran Sunshine Marketing is the agent. Contact: www.515e72.com.

Compiled by Andrea Cetra

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“I have sold numerous times in this building, and one of my [previous] clients recommended me to the seller, who wanted to live closer to his children. The building is an Art Deco prewar building, [but] the combination units have undergone incredible renovations, so you feel like you are in a Soho loft. We were swamped with interested buyers for this property. We had multiple fullprice offers and actually had an offer higher than the one [we] accepted, but the buyers we chose were the most qualified.”

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635-square-foot studio in a condo, Worldwide Plaza; unit has sleeping alcove, washer/dryer and private street entrance; building has concierge, pool, fitness center, courtyard and sun deck; common charges $792 per month; taxes $572 per month; asking price $650,000; 15 days on the market. (Brokers: Gabriel Bedoya, the Corcoran Group; Mark Ski, Bond New York) “The buyers were looking for a pied-à-terre in the city. This unit has its own entrance so visitors can come directly to their unit without going through a doorman or concierge. The private entrance made it attractive to them. [Our first offer] was a bit below asking price, but we were told by the listing broker that his seller was going to hold out for full asking price. My buyers didn’t want to lose this unit — they lost two others by not acting quickly enough — so I got them to come up. Both the buyer and seller signed the contract. Our attorney returned the contract for comments, but didn’t hear from the seller’s attorney for two days. [I found out] the seller was more interested in another buyer who did not [need] financing. So my buyers removed the ‘may seek financing’ [clause] from the contract and offered all cash with a quick close. That moved us back into the driver’s seat and back on course.” Mark Ski, Bond NY (now at Town Residential)

Murray Hill $1.07 million 135 East 39th Street, Apt. 4E-D

Two-bedroom, two-bath, 1,500-squarefoot co-op unit in a prewar building; apartment has dishwasher, hand-plastered moldings and private garden; building has live-in super, laundry; maintenance $2,730 per month, asking price $1.04 million; six weeks on the market. (Brokers: 98 October 2013 www.TheRealDeal.com

Dan Geller, Keller Williams NYC; Adam Cronheim, Corcoran)

Dan Geller, Keller Williams NYC

Tribeca $8.2 million 250 West Street, Apt. 7A

Four-bedroom, four-and-a-half bath, 4,105-square-foot unit in a new condo conversion; apartment has rain shower, deep-soaking tub, central air conditioning, laundry room and storage space; building has a 24-hour doorman, fitness center, pool, children’s playroom and rooftop garden; common charges $2,610 per month; taxes $4,417 per month; asking price $8.75 million; seven weeks on the market. (Brokers: Richard Orenstein, Halstead Property; Johnny Lal, Citi Habitats) “My clients were a couple with a child and two small dogs, and they had very specific requirements as to what they wanted in a home. They had been renting in Tribeca and really wanted to stay in the neighborhood. They needed a four-bedroom property with views, and that isn’t always so easy to find. I worked with them for three years before we found this property. The place was a resale, but it was brand new because the person who bought it initially from the sponsor never moved in. My clients were really impressed with the views, which added a ‘wow’ factor that was missing in many of the other apartments we toured. They also really appreciated the high ceilings. The negotiations were intense. The initial list price was $8.75 million, and my clients’ initial offer was $7.75 million. It took about 10 days of back and forth to reach the agreed-upon closing price. My clients did not want to spend above $7.5 million, and it took showing them the property four times before they were convinced it was a good value at $8.2 million. It was an all-cash deal.” Johnny Lal, Citi Habitats Compiled by Evan Bleier

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Inventory

from page 18

of available apartments, many of the new projects being built now do little to ameliorate the inventory shortage because they are targeted towards wealthy jet-setters rather than average New Yorkers. One57 and 432 Park, for example, have both made headlines for $90 million-plus contracts, and a penthouse at the new condo 56 Leonard Street is reportedly in contract for $47 million. In the second quarter of this year, the median sales price for a new development unit in Manhattan was $1.4 million, according to

Miller Samuel, while the median sales price for all Manhattan apartments was substantially lower, at $865,000. Despite the demand for midpriced units, experts said, Manhattan’s sky-high land costs have made it increasingly difficult for developers to justify building condos that aren’t über-expensive. “Once land hits a certain price point, it only makes sense to build with nicer finishes and higher-grade appliances, and all of a sudden you’re gearing yourself up for the higher-end condomini-

um, and that’s the only product that is going to make it a viable product for you,” explained Neil Helman, an investment sales broker at the commercial firm Avison Young. David Kramer, CEO of developer the Hudson Companies, agreed that “land costs are going up, which makes it very hard to do middle-class housing.” Of course, the appetite for high-end product isn’t infinite, even in Manhattan. Eventually, Helman said, buyers will refuse to pay such high prices for new condos. “There’s going to come some

point in time where people can’t afford to spend $2,300, $2,400, $2,500 a square foot for what was once $1,400 or $1,500,” he said. That, in turn, could slow rising land costs. “Land prices can’t go up at an astronomical rate forever,” Miller said. “At a point when it hits the ceiling, developers [will] start to cool on the prices being asked.” But, Miller noted, the Manhattan market is currently early on in that cycle, and it will take some time before the demand for luxury product cools.

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In the meantime, the few available mid-priced units in the city are seeing a frenzy of demand. Andrew Gerringer, managing director of new business development at the brokerage the Marketing Directors, noted that the Jefferson, an 83-unit new condominium at 211 East 13th Street marketed by his firm, sold out in just a few months. He attributed that to the fact that the units were priced around $2,000 per square foot, as opposed to the more typical $3,000 per square foot.

Easing the pain But now that the recession has passed, developers are working overtime to get new projects in the ground in hopes of tapping into the current demand for new product. Sometimes that means taking on projects in areas of the city they never would have considered in the past. Gerringer said the Marketing Directors is now working on its second project in Staten Island: the Pointe at 155 Bay Street, a condo developed by Manhattan-based Meadow Partners. “Five years ago, fewer people would have thought of Staten Island as an area they would build [condos] in,” Gerringer said. Hudson, for its part, is currently developing Gowanus Green, a mixed-used rental and condo project in Brooklyn, and the condo conversion Cobble Hill Towers at 431 Hicks Street. “We’re much busier than we were,” Kramer said. “It’s because of the economy and lenders getting back into the game of being construction lenders. It was very hard to do this three years ago.” In order for more resales to hit the market, meanwhile, the economy needs to continue improving, Miller said. If salaries and home prices continue their gradual increase, he said, homeowners will start to put their apartments on the market in greater numbers. But another crucial factor is the availability of mortgages for buyers, Miller said. Luckily, with interest rates now on the rise after several years of record lows, he said, banks have started loosening their lending guidelines. All in all, Kramer predicted that it will take about two years for inventory to return to a normal level. “Two years from now,” he said, “I don’t think people will be saying there’s an inventory crunch.” TRD

New York State Surplus Real Property

Public Auctions

Pyramid Reception Center 470 East 161st Street, Bronx Public Auction October 16 $3.9 Million Min Bid

Camp Gabriels, Adirondacks Franklin County Sealed Bid Auction October 29 $90,000 Min Bid

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1610 Givan Avenue, Bronx Public Auction October 16 $270,000 Min Bid

318 Spring Street, Ossining Public Auction October 17 $245,000 Min Bid

3.2 Acres Vacant Land Town of Kent, Putnam Cty Public Auction October 17 $30,000 Min Bid

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from page 35

In 2010, after two years of legal maneuvering, the two sides reached a settlement that included a five-year extension on a roughly $600 million construction loan. All financing for the tower has now been paid off, Donald Trump Jr. told TRD. The tower — which has 486 condos and 339 hotel rooms — also includes 110,000 square feet of retail, a restaurant named Sixteen (for the floor it’s on) and a spa. But the financial crisis coupled with the Trump-Deutsche feud slowed the pace of condo deals. According to published reports, nearly

FiDi

one-third of the condos were unsold in 2012. Now the condos are 94 percent sold, according to Trump Jr., with current asking prices ranging from $570,000 for studios to $32 million for a penthouse. Trump Jr. declined to say how much he expected the property to sell out for in total, but his father said publicly in 2012 it might be five years before the Trump Organization makes any money off the deal. “I’ve had better,” the elder Trump told Crain’s Chicago of his investment in the 92-story hotel and condo. “It was very

expensive to build. I’m very proud of the building itself, but as an investment, I have done much, much better on other things.” Still, the tower holds an exalted place in the Windy City’s luxury market. “It’s at the top — it’s [an] A+,” said Teresa Costantini, a broker with brokerage Koenig & Strey, who has a listing for a one-bedroom condo in the tower for $579,000, with a $55,000 deeded parking space available, too. The seller, she added, is an investor from the East Coast, one of the project’s many buyers from outside Chicago. “There are probably 10 A+ buildings in downtown Chicago. It’s really got cachet.” TRD

from page 45

been on the rise for some time. The average asking rent for Downtown office space in the second quarter was up 20 percent year-over-year, according to CBRE. The second quarter was also the ninth consecutive quarter that Downtown Manhattan logged above-average leasing activity, with 2.46 million square feet of space leased, up 22 percent from the same period in 2012. Still, there remains a major discrepancy between office rents in FiDi, where low floors in Class A buildings might command $30 per square foot, and in Midtown, where comparable space rents for more than $60 per square foot, said Eric Anton, a principal at commercial brokerage Brookfield Financial. To investors, that means there’s still plenty of room for growth before the FiDi catches up with Midtown. One reason FiDi office space is cheaper is that many of the buildings in the area are older. Office product in the

Council

neighborhood tends to be somewhat “antiquated,” with smaller floor plates on buildings’ upper floors, said Richard Lechman, director of the Eastern region at Marcus & Millichap. A second-quarter office market report by brokerage Newmark Grubb Knight Frank showed that around City Hall, where buildings tend to be older, the average asking office rent was $36.78 per square foot, while rents in the newly renovated World Financial Center and World Trade Center came in at an average of $61 per square foot. But even in older buildings, investors are hoping that office rents will rise substantially as new-construction projects like the World Trade Center come online, pushing FiDi rates closer to Midtown levels. “I expect the differential to shrink as [the neighborhood] begins to take shape,” said commercial broker Raymond Cecora of CIA Group, which represented Jared

Kushner and CIM in their recent purchase of 2 Rector Street. The buyers paid $140 million, or $270 per square foot, to buy the 26-story office tower from Savanna and Stellar Management’s Laurence Gluck. Kushner told TRD that the partners plan to rehab some of the office space, and may also convert some of the space into rental apartments, but no final decision has been made. He said with commercial rents on the rise in the FiDi, the decision to convert an office building to residential is no longer a no-brainer. That’s especially true since the common spaces in residential buildings, including hallways, are not calculated into the building’s leasable space, eating into a landlord’s earnings. “Right now, if office rents pick up another $5 [per square foot], you’re pretty close to what you can achieve in residential on a cost adjusted basis,” Kushner said. TRD

from page 68

Cypress Hills and Highland Park (District 37)

ty crisis. That’s because the candidates are competing to replace Council Member Joel Rivera, who is not related to the candidate with the same name. To make matters more complicated, candidate Rivera also ran on the GOP line, and, even though he lost the Democratic primary, is now facing Torres in the general. While the race could still heat up, Republicans comprise a mere 9 percent of voters in the Bronx.

Democrat Rafael Espinal, who has been labeled Vito Lopez’s protégé, warmly welcomed the support he received from Jobs for New York, which spent $217,537 championing his campaign, according to records filed with the city’s Campaign Finance Board. He said he will lobby to lower property taxes. He’s running unopposed in the general election.

Queens

Astoria (District 22) Democrat Costa Constantinides and Republican Daniel Peterson will go head-to-head next month. While Constantinides is favored to win handily, either would be the first person outside the Vallone political dynasty to hold this seat since 1974. Jobs for New York spent $199,961 on Constantinides’ campaign.

Jamaica (District 24) Democrat Rory Lancman faces Republican Alexander Blishteyn next month. Lancman, a state assembly member, is backed by Jobs for New York and is expected to take the seat. On the real estate front, he authored a law to help homeowners recoup attorneys’ fees if they are improperly foreclosed on. He also supports continuing the city’s 421a tax abatement, a favorite of the development community. In addition, he has said he would expand rent regulation and affordable housing. Blishteyn, an attorney who has never run for public office, has spoken out for reducing property taxes.

Concourse and High Bridge (District 16)

City Council chambers inside City Hall

“handpicked” by term-limited Council Member Leroy Comrie, who heads the council’s powerful Land Use Committee.

The Bronx

Riverdale (District 11) With City Council Member Oliver Koppell termed out of office, this Bronx seat is up for grabs. Facing off are Democrat Andrew Cohen, who easily won a heated primary, and Republican Patricia Brink. Cohen, an attorney, won endorsements from a disparate mix of sources, including Jobs for New York, which, according to the Riverdale Press, spent $175,412 to boost his campaign. Cohen is expected to easily win.

Cambria Heights (District 27) This Queens district is headed for a run-off. Indeed, Daneek Miller, president of Amalgamated Transit Union Local 1056, and Clyde Vanel, an attorney, will face off again this month. No Republican is running. Jobs for New York spent $261,533 backing Manuel Caughman, who placed fourth in the primary. According to the Queens Times Ledger, Miller was 102 October 2013 www.TheRealDeal.com

Belmont and Fordham (District 15) Democrat Ritchie Torres, who was endorsed by Jobs for New York along with a slew of unions, sailed to victory in the primary. He bested a number of candidates, including Joel R. Rivera, who works for Comptroller John Liu. But as one newspaper put it, this race had something of an identi-

Democrat Vanessa Gibson, a state assembly member, and little-known Republican Banjamin Eggleston will be facing off next month. Gibson, who was backed by Jobs for New York in the primary, has pushed for services to help homeowners who are in danger of having their homes foreclosed on and authored a bill that gives tenants more time to appeal rent hikes when landlords upgrade their buildings. Gibson is favored to win.

Staten Island

Staten Island: Mid-Island (District 50) It’s the battle of the chiefs of staff in this heavily Republican Mid-Island district. Democrat John Mancuso, former chief of staff to outgoing Brooklyn Council Member Vincent Gentile, and Republican Steven Matteo, former chief of staff to outgoing Council Member James Oddo, are fighting to take Oddo’s seat. Jobs for New York is siding with Matteo; it spent $137,654 in the primary to support him and another $34,219 to oppose his primary opponent Lisa Giovinazzo. Giovinazzo has sued Jobs for New York, alleging that its campaign literature incorrectly stated she would lower the drinking age to 17. The general election is expected to be close. TRD www.TheRealDeal.com January 2012 00

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Queens developers

from page 61

Other new rental projects in the pipeline include the wellknown 5Pointz graffiti building at 45-46 Davis Street in Long Island City, where owners Jerry and David Wolkoff have controversial plans to demolish the iconic structure to make way for some 1,000 rental units in two towers. The proposal was approved by the City Planning Commission in late August, and is now seeking City Council approval. The Wolkoffs could not be reached for comment. Vornado Realty Trust also has plans for a 314-unit residential building above its Rego Park shopping mall near the Long Island Expressway. Vornado declined to comment, but sources said the 24-story, 287,113-square-foot addition, designed by SLCE Architects, will house rental apartments. Another reason there are more rentals than condos in the Queens new construction pipeline is because banks have been reluctant to finance condos in the borough, experts said. Two years ago — when many of the projects now hitting the market were starting construction — “the market was just starting to stabilize in New York and the safe bet was rentals,” said Harold Valestin, a vice president at the residential brokerage MNS. Mainstream banks are only now beginning to warm up to the idea of construction loans for condo projects in Queens — and only for established developers with long track records of success. Moreover, in recent years, certain areas of Queens, including large chunks of Long Island City, have been added to the city’s list of “geographic exclusion” areas for the 421a program, which means that the valuable tax abatement is not available to developers in those areas unless they make 20 percent of their units affordable, an unappealing prospect for many condo developers.

104 October 2013 www.TheRealDeal.com

Sources also noted that Queens is one of the few remaining areas of the city where building rentals is still economically viable. In popular areas of Manhattan and Brooklyn, land prices have climbed so high that building luxury condos is the only strategy that makes financial sense, sources said. Plus, many longtime, family-run Long Island City-focused companies, such as Rockrose, TF Cornerstone, Brause Realty and Heatherwood Communities, prefer rentals because they can hold onto them and keep them for future generations. Heatherwood, for example, is currently planning a 145-unit rental at 42-25 27th Street, while Brause is building a 270,000-square-foot rental building at 44-30 Purves Street, also in Long Island City. “We don’t like condos because it means building and selling,” said David Brause, president of the eponymous firm, which owns the MetLife Plaza office tower in Long Island City. “We like building and holding for the long term.”

Turning to condos Queens’ developers may change this “build and hold” strategy in the next few years, however, if condo prices continue to skyrocket. And some fear that the oncoming surge of new rental units could create a glut, causing rents to plateau or drop. In fact, that could already be starting to happen. The average rental rate for a Long Island City luxury apartment was $53 per square foot in the second quarter, roughly the same as the previous quarter, according to data from Long Island City-based brokerage Modern Spaces. But the median sales price for an apartment in a Queens new development was $570,156 in the second quarter, a 25.8 percent jump from the same period in 2012, according

to data from the brokerage Douglas Elliman. Some developers have already turned to condo development, especially in Long Island City, where some high-end condos sell for more than $1,000 per square foot. Rising Developers Group has plans for a 10-story mixed-use project at 42-60 Crescent Street in Hunters Point South. And in Flushing, Madison Realty Capital recently closed on a deal to recapitalize Victoria Towers, a 99-unit condominium currently under construction at 133-38 Sanford Avenue. Madison’s Zegen said condo sales prices in Flushing range from $600 to $800 per square foot. “No one could have predicted the market we’re in right now, so they all went full steam ahead with their rental projects,” said Rick Rosa, an associate broker and the manager of Douglas Elliman’s Long Island City office.”Now, you have all these renters who want to buy, so people are shifting their gears.” Even Rockrose, which has long preferred rentals, is entertaining the notion of building condos down the road. “The problem [with building condos] is I can’t bear to give up the value,” said Justin Elghanayan, president of Rockrose. He added that selling units rather than hanging on to them “seems like too much of a shame.” But if pricing keeps going up, he said, Rockrose may consider building a condominium on a triangular parcel it owns opposite the Linc site. But selling new condos in Queens without the 421a abatement will be a challenge, noted Eric Benaim, CEO of Modern Spaces, which will be handling sales at several new condo projects next year. “We might have more incentives, and the price tag might be a little bit lower” than in the past, he said. “It will be a real test of the market to see how those are absorbed.” TRD

www.TheRealDeal.com January 2012 00

Candy

from page 28

go for around $50 million, he said, adding: “$4,000 a square foot is not a fantasy number.” But their choice to start with this project underscores the challenges the Candys face when developing in the Big Apple. A New York project requires not only financing, but a Rolodex full of expeditors, attorneys, appraisers and construction executives, industry experts said. “The building code in New York City is … an acquired taste,” said Jay Neveloff, a partner at Manhattan real estate law firm Kramer Levin, who looked at a deal with the Candys in London but didn’t end up working with them. “You need to know who to call.”

Hard Candy The townhouse project is far smaller than the Candys’ other ventures. The 86-unit, $1.8 billion One Hyde Park, for example, is the most expensive residential development ever built, with prices ranging from $32 million to the $327 million a Ukrainian billionaire paid to combine two units. (Dollar values were converted from pounds using last month’s exchange rates.) The project, where the Candys teamed up with thenPrime Minister of Qatar, Sheikh Hamad bin Jassim bin Jaber Al-Thani, started sales in 2007. (The Candys’ spokesperson said One Hyde Park was actually a joint venture between Christian Candy’s CPC Group and Waterknights, a company owned by Al-Thani, despite reports calling the brothers the developers.) She also said there are only two sponsor units left. But not all of the Candys’ ventures have seen the same level of success, and the brothers appear to be exercising caution lately. Another London project called NoHo Square, which was planned as 180 luxury apartments, collapsed when financing from a failed Icelandic bank disintegrated. (The Candys sold their share of the project in 2008, according to reports). CPC also partnered with Qatari Investment Authority on Chelsea Barracks, a London luxury residential development located at a former military site. But the project was scrapped during the economic downturn, leading CPC to sue the investment authority. The litigation has since been settled. And 9900 Wilshire, a nine-acre condo project the Candys had planned in Beverly Hills, was foreclosed on by its lenders and sold in 2010 to a Hong Kong–based private equity group. In 2009, Nick told the Wall Street Journal that his company had some $300 million in cash, but just two years later a British paper reported that the firm was in the red to the tune of at least $7 million. The Candys’ spokesperson told TRD last month that there was a “very small operating loss” between June 2011 to 2012, but that the company is on track to be in the black this year. Nick also acknowledged to the Journal that construction financing is more difficult to obtain than it was when the pair finished One Hyde Park. At that project, the joint venture received almost all of their roughly $1.8 billion in construction funding from a German bank. Getting financing for New York City projects is especially difficult for out-of-towners, sources said — even if those out-of-towners are internationally known developers. “The only people who seem to be able to raise money [now] are people who have developed here before,” said Jonathan Miller, founder of real estate analytics company Miller Samuel. “It’s a very specific subgroup” of people for whom financing is available. That may be one reason why the Candys are starting out with a single-family townhouse rather than a condominium project. “They might have said ‘let’s see what we can do on a small scale,’ ” Miller said. 106 October 2013 www.TheRealDeal.com

Or they may simply be daunted by New York prices, sources said. “They may be looking for undervalued development sites in New York,” said Stuart Saft, chair of real estate at law firm Holland & Knight. “But it is late in the game for that.” The spokesperson retorted that “both Christian and Nick Candy have very strong global banking relationships with international banks.” Partnering with an established New York developer would most certainly help the Candys establish a foothold here, sources said. “You can’t come to New York and just build a building; you need to have some kind of local partner,” said Jordan Barowitz, director of external affairs for the Durst Organization, who was speaking generally and is not in contact with the Candys.

Christian Candy bought the final sponsor unit at the Plaza for $25.9 million. It’s now listed for $59 million.

Other sources agreed, citing the idiosyncratic building code and strong unions as potential minefields for a developer without New York experience. It’s difficult to convince New York developers to join forces on new construction projects, however, because a partnership could result in “diluting the deal,” explained real estate attorney Ed Mermelstein. “Developers in New York [have] just as big an ego as any Candy brother, or any other developer around the world,” he said. Another obstacle for the Candys, multiple sources said, is that the brothers have already burned some bridges within the real estate community here. For example, last year, Nick butted heads with top New York developer Gary Barnett of Extell Development. After scoping out units in Barnett’s posh condo tower One57, Nick told a New York Times reporter that the building did not have enough elevators. Barnett — who declined to comment for this story beyond saying that Extell is not working with the Candys — told the Times that the critique was a “cheap shot,” and revealed emails to the paper that showed Nick opted not to buy at the tower because Barnett did not want him flipping units. Another source said the pair has rubbed some brokers the wrong way by demanding discounts on apartment prices, citing the publicity they would bring to the building. The spokesperson denied this, saying the Candys are “not about requesting discounts, [but] about paying the true value for a property investment.” “If the properties are overpriced, it is normal to request a discount whether your name is Candy or any other name,” she said, Nonetheless, the Candys have continued their search for New York properties. This year, they’ve reportedly checked out the new luxury condo 432 Park Avenue; the famed $100 million penthouse at CitySpire in Midtown; and the $125 million triplex penthouse at the Pierre. They

even reportedly bid on a six-bedroom, $60 million unit at Alexico Group’s the Mark on 77th Street, but backed out at the last minute. A call to listing broker Leighton Candler at the Corcoran Group was not returned. It’s not clear if they are browsing for new digs for themselves — in the past they have maintained a home in Monaco and some reports say Christian owns a unit at One Hyde Park —or are looking for units to flip, as they’d apparently planned to at One57. Their spokesperson said that in addition to New York, Christian is interested in investing in more projects in Miami and Los Angeles.

Stepping stones While the Candys are known for their flash today — they are not shy about buying Rolls Royces, and have owned a speedboat dubbed “Catch Me If you Candy,” and a yacht named “Candyscape II,” at various points — they come from middle-class beginnings. They both attended Epsom College in Surrey, and in 1999 they launched Candy & Candy, which in addition to interior design, also redeveloped and flipped properties. The firm quickly garnered a reputation for stellar design and savvy buys, as well as an uncanny knack for marketing. The Candys got their start renovating a one-bedroom flat in Earl’s Court, London, in 1995, with a $9,300 loan from their grandmother, according to a Vanity Fair report. After opening Candy & Candy, the two expanded their designs to include interiors of yachts and private aircraft, honing in on all things luxury. Part of the brothers’ success comes from their confidence and ability to cultivate an “aura of mystery,” Garfield said. Experts said it’s only natural that the Candys would look to conquer New York next. “They were one of the first to develop a trophy property,” Miller said. “It makes sense, since the clients are global, [to develop in New York].” But for now, the 70th Street townhouse may be the stepping stone they need to establish a track record here. “Now is the right time and theirs is the right product,” Mermelstein said. But “their reputation precedes them,” he added. “And that can be a hindrance.” TRD

CORRECTIONS A N D C L A R I F I C AT I O N S In the “Development Updates” section of the September magazine, TRD misstated the range of monthly rents at the Larstrand at 227 West 77th Street. The correct range is $3,100 to $25,000 per month. In the September feature “At the Desk” with developer Mike Namer, TRD incorrectly stated the height of 199 Mott Street and the type of building it is. The building is an eight-story condo. TRD also incorrectly stated the number of units planned for Village Green West. It will include 27 units. In the September story "Empire State Building: a buyer’s manual," TRD incorrectly stated the way in which the Empire State Building Company controls the Empire State Building. It does so through a sublease. In the September story "Real estate's new ruling class," TRD incorrectly stated the name of the restaurant taking space across from Rockrose's Linc rental building in Long Island City. The correct name is M. Wells Steakhouse. The story also mistakenly stated Jason Muss’s position within Muss Development — he is a principal at the firm. www.TheRealDeal.com January 2012 00

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International brokers

from page 48

hit hard by the global financial crisis, such as Italy and Greece. “It’s a good time for Americans to buy in Italy now because the [Italian] market is suffering,” said Keller Williams NYC broker Richard Tayar, who is originally from Florence. He is currently listing two estates in Tuscany — one for $53 million and one for $45.18 million — and said he has received inquiries about them from New Yorkers looking for vacation homes. Larroche — who is currently listing Château de Sannes in Provence for $13.7 million, and a three-bedroom apartment in Paris for $2.6 million — said having even a few international listings can be crucial to finding foreign buyers interested in purchasing properties in New York City. “My main objective is to sell apartments in Manhattan,” she said, “and this is a way to find buyers.” And international listings can sometimes amount to easy money for New York brokers. Brokers are occasionally offered a fee — sometimes thousands of dollars per month — just for putting an international listing on their website. “Some [owners] just pay you because you had it on [your] website,” Katzen said. “You’re doing the courtesy to house it, so you get paid something.” Other times American brokers receive a referral fee, or part of the commission. Elliman broker Neal Sroka said he often acts as the marketing consultant for Viceroy Hotels and Resorts, selling homes at Caribbean properties such as the Viceroy Anguilla and the Sugar Beach resort in St. Lucia. For those projects, Sroka said he sends one of his team members to the development to assist in marketing. He then receives a monthly fee from Viceroy to advertise the listings on his site. (He declined to say how much that fee is.) New York City brokers are not legally allowed to list properties in cities where they don’t have a real estate license, so most of the overseas properties listed by New York brokers are co-listed with a broker based in the seller’s home country. That broker usually takes care of things like showing the listing to potential buyers. Barbato, for example, said after the Spanish seller contacted him, he did research to find a local brokerage — Isabel Vert — to co-list the Barcelona property with him. He’s sharing the Ibiza listing with Savills, which has an office there. Tayar’s Tuscan listings, too, are co-listed with a local Italian brokerage, since he does not have a real estate license in Italy.

The interior of a Tuscan villa listed by Keller Williams NYC’s Richard Tayar

An apartment at 18 Turo Park in Barcelona, listed for $9.39 million by John Barbato of Stribling

A five-bedroom apartment in Sydney, Australia, listed for $17.5 million by Frances Katzen of Douglas Elliman

Still, New York brokers do sometimes travel internationally to service overseas listings. Barbato flew to Barcelona to meet his Spanish client, for example, and Tayar makes several trips to Europe each year. Katzen said she also frequently travels to Europe and Australia, doing networking to get listings.

And many New York–based firms have relationships with firms overseas, which they can tap to help sell new listings. For example, Stribling has a partnership agreement with the high-end London brokerage Savills, while Elliman has a similar arrangement with London-based brokerage Knight Frank. Meanwhile, Brown Harris Stevens is an affiliate of Christie’s International Real Estate. And in April, with the help of Tayar, Keller Williams NYC formed a partnership with Lionard, a boutique brokerage in Tuscany. Of course, there are challenges to listing international properties. When the seller of a Tuscan villa asked Katzen to list the property, Katzen first wanted to verify its existence and determine the condition of the property. So she reached out to Knight Frank, which sent a broker to visit the Italian property and report back. Katzen is now co-listing the property with Knight Frank. Another challenge is that commissions are usually lower overseas than they are in New York, where the standard 6 percent is “probably the highest commission in the world,” Barbato said. In London, for example, the standard commission is 2 percent, Barnes said, though sellers there pay for marketing expenses, unlike in New York, where the broker is expected to foot the bill. How much a New York broker makes on an international listing varies depending on each country’s rules, and negotiations with the seller. If Barbato finds the buyer for his Barcelona and Ibiza listings, he will get the entire commission, which in Spain is about 4 percent. However, if the local brokers he’s working with in Spain find the buyers, Barbato’s agreement states that he receives only a referral fee. Depending on their agreement with their local counterpart, a New York broker may get nothing at all if they don’t find the buyer. Elliman’s Larroche said even if she finds a buyer for her French listings, she usually earns only a referral fee, which is typically about 20 to 30 percent of the overall commission. There are a bevy of other challenges, too, from different time zones and language barriers to local customs. Keller Williams’ Tayar said he’s had a hard time getting Italian brokers — who are used to focusing on local buyers — to consider marketing their properties internationally. Many Italian firms “don’t want to hear about” it, he said. “So it’s been hard to find the right partners.” TRD

City Hall from page 65 than some people realize. “Scoring a job with one of these firms is like winning the lottery,” said one former Bloomberg aide who’s now in the private sector. “They don’t come around a lot.” On the other hand, the Related Companies, which won a number of city projects under Bloomberg, may opt to add to its ranks now that the city will soon be under new management, sources said. Also, commercial firm Cassidy Turley is in search of a sustainability director, and is interested in ex-Bloombergians, sources said. And a search committee is looking around City Hall to find someone to run the Downtown Alliance, the influential Business Improvement District, after Liz Berger, its longtime president, died earlier this year. In addition, sources say companies ramping up their New York presence are likely to scout for talent with city government experience. The McCourt Group, which in September paid $167 million for a 26,000-square-foot site in the Hudson Yards from Sherwood Equities and Long Wharf Real Estate Partners, 108 October 2013 www.TheRealDeal.com

is currently looking for a spokesperson and is interested in a City Hall veteran, according to a source familiar with the firm’s search. The Los Angeles-based company, which once owned the Los Angeles Dodgers, can build a 296,000-square-foot structure on the site as-of-right, but has the option to buy another 436,000 square feet from the city, which a former city official could help with, the source said. McCourt officials did not respond to requests for comment. The Australia-based Westfield Group, which controls all 460,000 square feet of retail space coming online at the new World Trade Center complex, is also expected to beef up its New York presence. Sources speculated that the company could hire a Bloomberg alum.

Less-traveled paths Some of the top officials in the administration who deal with real estate–related issues are veering off the traditional path. City Planning Chairman Amanda Burden and Trans-

portation Commission Janette Sadik-Khan are in talks to team up and form an urban planning institute, Crain’s New York reported. Clients might include overseas city governments looking to add bike lanes, perhaps, or redevelop industrial areas. Under Burden’s 11-plus years in the administration, the city has passed 120 rezonings; while under Sadik-Khan’s tenure, it’s added 285 miles of bike lanes. One insider denied the report, however, saying that Burden, who is independently wealthy, would more likely retire. Meanwhile, Deputy Mayor Robert Steel, who currently oversees economic development, and who was a trustee at Duke for more than a decade, is expected to go into education, said one former aide. Finally, Bloomberg may very well take key aides — including First Deputy Mayor Patty Harris and scheduler Shea Fink — with him as he gears up his foundation, sources predicted. And he may remember those who stuck around until the end. “He’s got his hands in numerous pies, and he will remember who was loyal to him, and who wasn’t,” Siegel said. TRD www.TheRealDeal.com January 2012 00

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NMLS ID: 49302 LO ID#: CA - CA-DOC49302 - 413 0699, CT - LO-49302 - 17196, FL - LO6312 - MC2611, NJ - 0515276 - Licensed, NY - NY-49302-006438 - B500887, VI - 1060. NMLS (Nationwide Mortgage Licensing System) ID 2611 • AL - Lic# 21566 • AK - Lic#AK2611 • AR - Lic#103947 - Guaranteed Rate, Inc. 3940 N Ravenswood, Chicago IL 60613 866-934-7283 • AZ - Guaranteed Rate, Inc. - 14811 N. Kierland Blvd., Ste. 100, Scottsdale, AZ, 85254 Mortgage Banker License # BK-0907078 • CA - Licensed by the Department of Business Oversight, Division of Corporations under the California Residential Mortgage Lending Act Lic #413-0699 • CO - Guaranteed Rate, Inc. Regulated by the Division of Real Estate, 773-290-0505 • CT - Lic #17196 • DE - Lic # 9436 • DC - Lic #MLB 2611 • FL - Lic# MLD618 • GA - Residential Mortgage Licensee #20973 - 3940 N. Ravenswood Ave., Chicago, IL 60613 • HI - Lic#HI-2611 • ID - Guaranteed Rate, Inc. Lic #MBL-5827 • IL - Residential Mortgage Licensee - IDFPR, 122 South Michigan Avenue, Suite 1900, Chicago, Illinois, 60603, 312-793-3000, 3940 N. Ravenswood Ave., Chicago, IL 60613 #MB.0005932 • IN - Lic #11060 & #10332 • IA - Lic #MBK-2005-0132 • KS - Licensed Mortgage Company - Guaranteed Rate, Inc. - License #MC.0001530 • KY - Mortgage Company Lic #MC20335 • LA - Lic #RML2866 • ME - Lic #SLM1302 • MD - Lic #13181 • MA - Guaranteed Rate, Inc. - Mortgage Lender & Mortgage Broker License MC 2611 • MI - Lic #FR0018846 & SR0018847 • MN - Lic #MO 20526478 • MS - Guaranteed Rate, Inc. 3940 N. Ravenswood Ave., Chicago, IL 60613 - Mississippi Licensed Mortgage Company, Lic # 2611 • MO - Guaranteed Rate Lic # 10-1744 • MT - Lic# 2611 • Licensed in NJ: Licensed Mortgage Banker - NJ Department of Banking & Insurance • NE - Lic #1811 • NV - Lic #3162 & 3161 • NH - Guaranteed Rate, Inc. dba Guaranteed Rate of Delaware, licensed by the New Hampshire Banking Department - Lic # 13931-MB • NM - Lic #01995 • NY - Licensed Mortgage Banker - NYS Department of Financial Services- 3940 N Ravenswood, Chicago, IL 60613 Lic # B500887• NC - Lic #L-109803 • ND - Lic #MB101818 • OH - Lic #MBMB.850069.000 & Lic #SM.501367.000 - 3940 N. Ravenswood Ave., Chicago, IL 60613 • OK - Lic # MB001713 • OR - Lic #ML-3836 - 3940 N. Ravenswood Ave., Chicago, IL 60613 • PA - Licensed by the Pennsylvania Department of Banking and Securities Lic #20371 • RI - Rhode Island Licensed Lender Lic # 20102682LL, RI - Rhode Island Licensed Loan Broker Lic # 20102681LB • SC - Lic #-2611 • SD - Lic# ML.04997 • TN - Lic #109179 • TX - Lic # 50426 & Lic # 47207 • UT - Lic #7495184 • VT - Lic #LL6100 & MB930 • VA - Guaranteed Rate, Inc. - Licensed by Virginia State Corporation Commission, License # MC-3769 • WA - Lic #CL-2611 • WI - Lic #27394BA & 2611BR • WV - Lic #ML-30469 & MB-30098 • WY - Lic#2247

Dynasties from page 58 million, not including condo sales from 200 Chambers. Jonathan Resnick, Burt’s son and the company president, said the firm is “waiting for things to loosen up a bit” before it starts another construction project. “We have a lot of dry powder, to use a cliché,” he said. “It is a very competitive market in terms of land prices and development costs.” He said capitalization rates (which measure returns on existing properties) are low and land prices are high, so the firm is sticking with the returns it already has coming in rather than directing its cash flow to new projects. “There is too much risk. There is not a great enough return to put [up] the amount of equity required,” he said. Like many of the other dynasties, the company built up much of its portfolio during the 1960s. Jonathan told TRD that Resnick family members are the majority owners at most of the company’s buildings, though he said that they have minority partners. “When my grandfather [Jack] built and assembled properties, there were friends and family, lots of different investors,” he said. “[As a result], different buildings have different partners.” Today he and his father are the only family members at the 200-employee company, which handles most of its leasing and management in-house. Jonathan’s brother, Scott Resnick, who spearheaded the development of 200 Chambers, set out on his own in 2007 after 18 years with the firm. Scott told TRD that he wanted a separation between family and work. “I wanted my father to be my father, and not my senior partner,” Scott said. He said he has a good relationship with his brother and father and still owns an undiluted equity interest in the family’s portfolio. With his new firm SR Capital, Scott is now developing a 44unit condo at 551 West 21st Street, adjacent to the High Line.

Milstein Properties Founded: Late 1950s Total NYC square footage: 5.8 million Annual NYC property NOI: $111 million he Milsteins’ first family enterprise was not a real estate business — it was a flooring company. That company was founded by Morris Milstein in 1919 and eventually became a powerhouse in the industry, installing floors at Rockefeller Center and Madison Square Garden, among other high-profile venues. That business introduced Morris’ sons, Paul and Seymour, to major real estate players. And by the 1960s, the two were developing properties of their own, including the 683-unit Dorchester Towers on the Upper West Side — their first major apartment project. Today the company — which is run by Paul’s son Howard — owns 14 buildings in New York City, with a total of 5.8 million square feet and an annual NOI of $111 million. The firm took a break from new development after its

ment and management firm Starrett Corporation, and Douglas Elliman-Gibbons & Ives (which is now Douglas Elliman). After turning around the floundering management arm of Douglas Elliman-Gibbons & Ives, the Milsteins sold it in 1995 for an undisclosed amount. The company followed that by the sale of the brokerage arm in 1999 to Andrew Farkas’ Insignia Financial Group for $65 million in cash — with the possibility of $10 million more depending on future performance. But in the 1990s, Paul and Seymour had a falling out over how, or if, the company would be handed off to the next generation. During that period the firm didn’t construct new projects. In 2003, two years after Seymour’s death, the company split its holdings. Paul, along with his two sons Howard and Edward, took control of Milstein Properties (Paul died in 2010), while Seymour’s children Philip and Connie formed Ogden CAP Properties. In the division of properties, Ogden took five of the company’s major residential buildings, including the Dorchester Towers and the massive 1,477-unit Normandie Court on East 96th Street. Following the split, Howard once again began to develop. In 2011, he opened rental buildings Liberty Green and Liberty Luxe in Battery Park City. In addition, the firm owns an estimated 600 unsold units in the four Battery Park City condo towers it built in the 1980s — Liberty Terrace, Liberty View, Liberty House and Liberty Court. The company declined to comment.

Rose Associates Founded: 1928 Total NYC square footage: 1.4 million Annual NYC property NOI: $29 million rothers David and Samuel Rose started Rose Associates during the city’s pre-Depression real estate boom, in 1928. David had no children, so the firm was handed down to Sam’s children — Frederick, Elihu and Daniel. Today, the firm is led by Elihu’s daughter Amy and Frederick’s son Adam.

1. Paul Milstein 2. Howard Milstein

extraordinary run in the 1980s, when it built megatowers like the 1.2 million-square-foot office building 335 Madison Avenue and a slew of residential buildings. The brothers also began branching out during that decade, buying Emigrant Savings Bank, real estate develop110 October 2013 www.TheRealDeal.com

1. Elihu Rose 2. Amy and Adam Rose

The cousins, who are co-presidents, operate in a wide range of New York real estate. Their company develops properties, but also manages those properties for itself and third-party owners. The firms says it manages more than 26,000 apartments for clients such as BlackRock and JPMorgan Asset Management. The company has ownership interests in at least four Manhattan buildings — including the 293-unit Le Rivage at 21 West Street and the 192-unit Chelsea Landmark at 55 West 25th Street — and one in Long Island City. Its holdings bring in an estimated $29 million in NOI. However, it manages dozens of others, which bring in millions more in revenue. The firm is currently converting the former office building 70 Pine Street in Lower Manhattan into 777 rental apartments. It’s also an equity investor in a 270-unit, apartment project with a mix of rentals and condos, which is being led by World-Wide Group on Second Avenue in the 50s. Its management arm took a hit when its contract to operate Manhattan’s largest residential rental portfolio, Stuyvesant Town and Peter Cooper Village, ended in 2012. The management fee at the 11,200-unit housing development was $4 million in 2010, data from debt analysis firm Trepp showed. The property’s special servicer, CWCapital, hired its own management firm to operate the complex. Like their peers the Rudnicks, members of the Rose family

have split off and formed their own firms. In 1989, Adam’s brother Jonathan started Jonathan Rose Companies, which focuses on green development.

Zeckendorf Realty Founded: 1992 Total NYC square footage: Unknown Annual NYC property NOI: Unknown eckendorf Realty, headed by brothers and co-founders William Lie Zeckendorf and Arthur Zeckendorf, is the youngest of the 10 family firms, and does not fit neatly into the bunch. Its roots stretch back two generations to their grandfather, legendary dealmaker William Zeckendorf Sr., who famously built up (and then lost) a New York real estate empire. His son William Jr. — known as Bill — launched his own

2 1. William Zeckendorf, left, and Arthur Zeckendorf 2. William Zeckendorf Sr.

firm in 1983 called Zeckendorf Company. Then in 1992, Bill’s sons William Lie, who goes by Will, and Arthur, formed Zeckendorf Realty. Will said his firm is different from the others because there have been three separate family companies along the way. “We are very different. We are a family of three generations that are self-starting and self-made,” Will told TRD. “We are much more akin to Extell [Development], Related and Witkoff,” which are principal developers. The firm does own significant assets in New York through partnerships with other companies, Will said. He declined to provide addresses, and because his company is not the identified owner in many public records, its stake can remain private. The current Zeckendorf firm has developed a slew of condos, including one of the city’s most high-profile: 15 Central Park West. It also built 515 Park Avenue and recently converted 18 Gramercy Park South into luxury condos. William Sr. began his real estate career as a broker, but rose through the ranks and eventually gained control of the real estate firm Webb & Knapp, which he built up to own properties such as the Chrysler Building and Graybar Building. But in 1965, the overleveraged firm collapsed. His son Bill continued as a developer, and went on as the lead builder of Worldwide Plaza, along with a string of major apartment buildings. (Bill is now retired and living in New Mexico.) At 15 CPW, the Zeckendorf brothers firm tapped institutional equity, including money from Goldman Sachs’ Whitehall Street Real Estate Fund and investor Eyal Ofer’s Global Holdings, which is also backing Rudin’s new project. In addition to their development, the Zeckendorfs moved into the brokerage business with the 1995 purchase — along with Kent Swig and David Burris — of the residential firm Brown Harris Stevens. A few years later, the group acquired Halstead Realty. They operate the two under the umbrella of Terra Holdings, which is one of the largest residential property managers in the city, and has 2,000 brokers in four states. TRD www.TheRealDeal.com January 2012 00

REWARD YOUR CLIENTS AND REWARD YOURSELF

When your customers purchase a new home, you can help them get a jump on their TV, Internet and Phone services. The Time Warner Cable “Lead the Way” program lets real estate professionals refer customers to sign up for discounted concierge services in their new home. Your clients will be happy because you’re saving them time and money, and you’ll stand out from your competition. What’s more, you’ll also earn reward points for every customer referral who signs up for Time Warner Cable service. Call 212-420-5530 and mention code 5-B to learn how to enroll. Once you enroll, you can begin submitting customer leads right away…and watch the rewards roll in.

Compensation paid quarterly. Marketing Agent Program is available in limited Time Warner Cable service areas. Owners of buildings with 50 or more units may 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_10.1_MDU_leadtheway_10.5x14.5

THE PORT AUTHORITY OF NY & NJ REQUEST FOR PROPOSALS FOR PERFORMANCE OF EXPERT PROFESSIONAL BROKERAGE SERVICES FOR THE SUBLEASE OF SPACE WITHIN 4 WORLD TRADE CENTER ON AN “AS-NEEDED” BASIS DURING 2013 - 2016 The Port Authority of New York and New Jersey is seeking to identify firms interested in responding to a Request for Proposals (RFP) for the Performance of Expert Professional Brokerage Services for the Sublease of Space within 4 World Trade Center on an “as-needed” basis during 2013-2016. RFP #34946 may be obtained online at http://www.panynj.gov/businessopportunities/bid-proposal-advertisements.html?tabnum=6. Addenda to the RFP, if any, will be posted at this site. Monitor the advertisement on the web site to ensure your awareness of any changes. If you have any technical problems accessing the documents online, email us at askforbids@panynj.gov or call us at (201) 395-5229 for assistance. Your email should include the RFP number, your firm name, email address, contact person, mailing address, and phone number. It is currently anticipated that proposals shall be due by 2:00 PM on October 22, 2013 or as otherwise indicated in the document. Proposals must have the RFP Number and full legal firm name clearly indicated on the outside package. Send Proposal(s) to: The Port Authority of NY & NJ, Attn: RFP Custodian, Procurement Department, 2 Montgomery Street, 3rd Floor, Jersey City, NJ 07302.

Job 54948 PAUTH Real Deal from page 36 1/4 pg 4.625” x 6.375” 9.27.13 P5

Saratoga

rejection would never happen again: With $9 million in state funding, they created the roughly 1,400-acre Luther Forest Technology Campus, a technology and business park. They also secured pre-approvals for chip-manufacturing to woo another giant engineering or tech company. The company that ulAn aerial view of GlobalFoundries’ timately signed on was Upstate New York facility GlobalFoundries, which struck a deal in 2006 to become the first tenant at the campus. New York State provided GlobalFoundries with $1.4 billion in incentives to seal the deal, and GlobalFoundries commenced construction on Fab 8.1 in July 2009. Once GlobalFoundries started production there in 2011, new housing developments, such as Eastview’s Esplanade, a rental, started springing up nearby. Robert Kohn, a partner at the Florida-based Eastview Development, said the influx of GlobalFoundries’ employees has increased the demand for housing. He said it “certainly” impacted the company’s decision to build there. (Currently many GlobalFoundries employees commute from the Albany area, which is about 20 miles south, Kohn said.) Monthly rents at the Esplanade are expected to range from $1,200 to $2,200; pre-leasing is expected to start this fall. According to the real estate website Zillow, in August, the median sales price for a home was $347,400 in Saratoga Springs and $238,500 in Malta. The rental median in Saratoga Springs ranges from $1,900 to $2,300. Entire houses in Malta, meanwhile, can rent for less than $2,000 a month. The zoning changes Malta approved in August leave the ball very much in GlobalFoundries’ court as far as seeing the massive expansion through. The company has already spent nearly a year complying with environmental reviews and other red tape. “My guess is they wouldn’t go through all this effort if they didn’t want to do something,” Sausville said. TRD

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Entrepreneurs

from page 42

In July, Buyer MLS was named a finalist in Inman News’ Innovator Awards. It was also a finalist in Realogy’s 2013 innovation summit. So far, however, New York City remains an elusive target, primarily because there’s no comprehensive MLS in the city. “We almost have to approach it as if it’s three or four separate markets,” Heithaus said.

Making rentals easier: Urban Compass One of the New York real estate startups that’s gotten the most attention recently is the residential rental listings website Urban Compass, which launched in May of this year. The Manhattan-based company, which TRD profiled this spring, snagged $20 million in a fundraising round last month, in addition to its initial seed funding of $8 million. The company is now valued at roughly $150 million, according to the blog TechCrunch. In a bid to make it easier and cheaper for consumers to find New York City apartments, Urban Compass combines a listings website with a team of in-house “neighborhood specialists,” who function much like real estate brokers. Users search rental listings online, then schedule appointments to see them with neighborhood specialists. Once the user decides on an apartment, the specialist alerts the company’s closing department, which executes the lease online directly with the landlord. Clients pay Urban Compass a commission of 7.5 percent of a year’s rent, half the standard New York City broker’s fee of up to 15 percent. The model has proven successful so far, with monthly revenues expected to reach the $1 million mark in October, co-founder and chairman Ori Allon told TechCrunch. Allon is an Israeli-born serial entrepreneur whose two former ventures were acquired by Google and Twitter. The company has also snagged some residential heavy hitters to join its ranks, including Gordon Golub, the former second-in-command at Citi Habitats, and Jason Saft, a veteran Citi Habitats broker who jumped to Urban Compass this summer. Urban Compass said it now has some 7,000 rental listings in Manhattan, Brooklyn and Queens on its site, and may expand to sales in the future. For now, the company said it will use the new funding to meet increasing customer demand, scale up business, and provide new products and services. TRD www.TheRealDeal.com March 2012 00

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COMINGS & GOINGS CORE goes on hiring spree

fter losing several top agents, the boutique brokerage CORE went on a hiring binge last month, adding more than 10 new agents, including one of the Corcoran’s Group largest teams. Coldwell Banker Hunt Kennedy alumni Patrick Lilly and seven of his team members last month left Corcoran, one of the city’s largest firms, for the much smaller CORE. The agents who joined Lilly at Core include Adie Kriegstein, Martin Eiden, Andres Soto, Latoya Anderson, Eric Purcell, Cassie D’Agata and Jasmin Abrol. Also last month, Core hired broker Deirdre DeRisi from Douglas Elliman, and Sidney Whelan and Reggie Grayson from Halstead Property. The firm also hired real estate newcomer Marsi Gardiner, who previously worked in marketing and theater production. CORE has recently seen the departure of top producers Michael Graves, who left for Elliman, and Vickey Barron, who took with her the exclusive marketing Patrick Lilly assignment for the high-profile Walker Tower condo at 212 West 18th Street. When asked if the new hires are an explicit attempt to make up for the loss of Graves and Barron, CORE CEO Shaun Osher said through a spokesperson: “We are continuing to follow our original business model, which is to attract like-minded agents who are interested in building their business in a transparent environment that embraces the evolution of our industry and the art of marketing and selling real estate.” Lilly joined Corcoran in 2009, after 13 years at the now-defunct Coldwell Banker Hunt Kennedy. He said he decided to hop to CORE because of the way the industry is changing. With most buyers and sellers now going to sites like StreetEasy for information, he said, the reach of a large firm is “not as necessary as it was.” The addition of these 11 new brokers represents a substantial increase in size for CORE, which had 55 agents as of mid-March, according to a TRD ranking. By Hayley Kaplan

Brokering during the day, gigs at night

n increasing number of musicians are singing a different tune these days: real estate. Industry insiders said they’re seeing more and more musicians becoming residential brokers. “We should have a talent show for our agents,” said Jeffrey Schleider, owner and founder of the brokerage Miron Properties. “Many people have had record deals or have been on MTV. It’s amazing.” Singer-songwriter Kelly Waters joined Miron four months ago, for example, while DJ David Gaidowski joined the firm a year ago. Ari Goldstein, an MNS broker who focuses on sales in Williamsburg and Greenpoint, performs with a hip hop group called Defunk, while his MNS colleague Eric Volpe is the guitarist in the rock band Race to Dawn. The reason for the uptick, industry insiders said, is that real estate offers a flexible schedule that allows musicians to continue performing while supplementing their income. The trend is most prevalent in neighborhoods like Williamsburg and Soho — established hubs of art and music that also happen to be some of the city’s most desirable residential neighborhoods. And the skills required in the music industry also come in handy as a real Singer-songwriter and Miron Properties agent Kelly Waters estate agent. “Both industries are so largely built upon networking and great relationships,” said Douglas Elliman’s Matt Jacob Meyer, a blues-rock musician and composer who began his real estate career with Ideal Properties Group five years ago. As a real estate broker, “you have to perform,” Waters added. “In the music industry, even if you’ve had a bad day, you have to bring it. That’s the same as real estate.” Schleider agreed that “anyone capable of managing a band is more than capable of handling a real estate transaction.” In fact, “bands are notoriously difficult,” he added. “By comparison, a real estate transaction is easy.” By Julie Strickland

REBNY launches new listing system

fter months of false starts, the Real Estate Board of New York’s highly anticipated new listings system — widely called the RLS — launched last month. The transition to the new RLS — the electronic portal through which all REBNY members can view and share listings, enabling them to co-broke — has been years in the planning. The new system replaces R.O.L.E.X., an older transmission system maintained by RealPlus. RLS was originally slated to be rolled out Jan. 1 but was beset by vendor conflicts. REBNY subsequently missed a self-imposed launch deadline of Aug. 1. Steven Goldschmidt, a broker with Warburg Realty and REBNY’s RLS board co-chair, said last month that the switchover was complete and that “reports from the field have been good.” Developed by Katonah, N.Y.-based Stratus Data Systems, the new system conforms to a nationwide industry standard called the Real Estate Transaction Standard, or RETS. Brokers have awaited a RETScompliant system for years, decrying the fact that New York City has been technologically behind every other metropolitan area in the nation. Steven Spinola, president of REBNY Still, many in the industry had worried the changeover, which Goldschmidt once compared to the change between running Windows or an Apple operating system, would be fraught. The new system will be accessible via mobile apps and will offer more options for listings, such as different fields for “terrace” and “balcony.” By Guelda Voien 118 October 2013 www.TheRealDeal.com

Movers and shakers Carlton Group Chairman Howard Michaels last month announced the formation of a new international investment sales team, focusing on assignments of $100 million or more in Manhattan and other major U.S. and European cities. Other team leaders will include Carlton Hospitality President John Bralower and Howard Michaels

senior investment banker Javier

Beltran, who runs Carlton’s Iberian franchise. Philippe Visser has joined Related Companies as senior vice president of development at Hudson Yards. He will lead the development of the 80-story, 2.5 millionsquare-foot North Tower as well as other Hudson Yards commercial projects. He previously served as the director of World Trade Center Redevelopment for the Port Authority of New York & New Jersey. Matthew Van Damm, Town Residential’s director of operations and one of the firm’s first employees, has taken an indefinite leave of absence from the company for personal reasons.

Philippe Visser

Also on the move Jones Lang LaSalle hired Michael Berman as a managing director. He was previously senior vice president and head of asset management for Silverstein Properties. … Coldwell Banker Commercial Alliance has acquired New York City–based commercial brokerage Kenneth Zund Realty. Top Zund executives, including co-founder Jeffrey Zund, will join Coldwell Banker. … Barry Brandt has joined Argo Residential as director of sales for the company’s brokerage division. He was previously director of leasing for Stonehenge Management. … Citi Habitats hired Joe Azar from Town Residential as the senior managing director of the East Village office. Massey Knakal Realty Services promoted Winfield Clifford to director of sales in Brooklyn. He joined the firm in 2010 as an associate. … Christine Spletzer and Bola Oloko joined the real estate practice in the New York office of law firm Winston & Strawn. Spletzer joined the firm as a partner from Paul Hastings, and Oloko was hired as of counsel from Duval & Stachenfeld.

Announcements Alex Cho, senior managing director for Citi Habitats Corporate Relocation, will wed Caroline Perrello, a former marketing manager for the brokerage MNS. She is now working as a social media marketing consultant for non-profit organizations. The two will be married Oct. 5th in Perrello’s hometown of Buffalo, N.Y. Caroline Perrello and Alex Cho

Compiled by Sanna Chu and Candace Taylor

PHOTOGRAPH OF MICHAELS FOR THE REAL DEAL BY HUGH HARTSHORNE

Courtside at the U.S. Open

WE HE AR D

▼

ew York City’s real estate elite rubbed shoulders with the tennis elite at the U.S. Open men’s finals last month. On hand to watch Rafael Nadal beat Novak Djokovic were top retail investor Jeff Sutton, Thor Equities’ Joseph Sitt, developer Joseph Moinian and son Matthew, SL Green Realty CEO Marc Holliday, and real estate power lawyer Jonathan Mechanic. Earlier that day Sitt had upped his offer to buy the Empire State Building fee position for $1.4 billion. When The Real Deal asked him about the bid, he smiled knowingly but de-

a $1 billion IPO plan, having rejected all bids to buy the tower.) During the third set, TRD spotted Holliday and Mechanic — the chairman of the real estate department at Fried, Frank, Harris, Shriver & Jacobson — chatting at one of the stadium’s watering holes. A few feet away, Moinian and his son were grabbing a beer before the final stretch of the match. It’s a good thing they did, since it ended up going five sets. By Adam Pincus

Rafael Nadal

clined to comment, making a zipper motion to indicate that his lips were sealed. (As of press-time, Empire State Building co-owner Malkin Holdings said it was moving forward with

Fisher and Lazenby: real estate’s new power couple

Douglas Elliman’s Melanie Lazenby and developer Winston Fisher at a Details magazine party at the Whitman condominium

eal estate heir Winston Fisher, a partner at development company Fisher Brothers, escorted top Douglas Elliman broker Melanie Lazenby to a Details magazine bash last month at the Whitman condominium on Madison Square Park. Lazenby — the listing broker for the $25 million, 6,500-square-foot penthouse where the party was held — confirmed that she and Fisher have been dating since May. The couple recently celebrated her 40th birthday with dinner at the Four Seasons. And last month she cheered on Fisher — who was previously married to Jessica Eckle Fisher — in the MightyMan Half Iron Distance Triathlon in Montauk. Lazenby was featured in a Details’ profile last month on “the new rock stars of real estate,” along with Elliman brokers Marcos Cohen and Fredrik Eklund, brothers Oren and Tal Alexander, the Corcoran Group’s Noble Black, Town Residential newcomer Clayton Orrigo and author Michael Gross. By Katherine Clarke

Touring the world’s most expensive new condo

lliman super-broker Leonard Steinberg told TRD that he just returned from a trip to the French Riveria where he visited Tour Odeon, one of the most expensive new condo developments in the world. Tour Odeon is the first high-rise to be built in Monaco — the tiny seaside principality bordered on three sides by France — since the 1980s. When completed in 2014, it is expected to surpass London’s One Hyde Park as the most expensive condo development in the world. Steinberg said a 2,800-square-foot unit in the building that’s “far from the top floor” is asking $28 million, making “New York pricing look relatively cheap.” The building’s 35,500-square-foot penthouse is reportedly on the market for £250 million, or roughly $391 million. The building’s top floors have “outrageously good” views,

Tour Odeon

Steinberg quipped, making them “the perfect perch to view [Russian businessman] Roman Abramovich’s mega-yacht dwarf all other mega-yachts in the harbor, making grown billionaires weep in shame.” In fact, Steinberg said he noticed an abundance of Russian-speakers vacationing in the French Riviera this year, evidence that the Eastern European billionaires snapping up trophy New York City apartments are also spending their rubles elsewhere. While relaxing by the pool at the posh Hotel du CapEden-Roc at Cap d’Antibes, Steinberg said, he decided to dub the area “Moscow South.” “There’s an incredible volume of Russian wealth on the Riviera this summer,” he said. “More so than ever before.” By Candace Taylor

Heard around town Bistricer in Canada David Bistricer, head of the family firm Clipper Equity, took a sojourn to Toronto over Labor Day weekend. While it was unclear why the Brooklyn-based developer visited Canada’s financial capital, he may have spent more time there than he intended. TRD’s Leigh Kamping-Carder spotted the Sony building developer at the Billy Bishop Toronto City Airport, killing a couDavid Bistricer ple of hours before a delayed flight. Bistricer, clad in a dark suit and yarmulke, sat at a table chatting with a similarly attired companion. Luckily he had plenty of real estate eye candy to provide inspiration: the tiny airport offers an expansive view of the Toronto waterfront, where a string of glitzy condominium towers have unfurled in recent years.

‘Beare’ hugs CORE broker Emily Beare and husband Brian Beare celebrated their 30th wedding anniversary last month at the 120 October 2013 www.TheRealDeal.com

Emily Beare

Natirar estate in New Jersey, home of the Ninety Acres Culinary Center, a critically acclaimed farm-totable restaurant and cooking school. Their children Elizabeth and Brian — both Core agents — were also on hand for the celebratory feast.

Sweating in Sag Winston FishContestants at the Mighty Hamptons Triathlon er (see story above) isn’t the only triathlete in the real estate business. The Related Companies’ Jennifer McCool and Newmark Grubb Knight Frank’s Mark Weiss competed in the Mighty Hamptons Triathlon last month in Sag Harbor. McCool — who was cheered on by her husband Glenn Isaacson, an executive vice president at CBRE Group — told TRD that it was her first triathlon.

Also in Sag Harbor, CBRE Chairman of Global Brokerage Stephen Siegel was spotted having an outdoor lunch at the bistro Madison & Main with his friend Andrew Goldberg, a retail broker at CBRE.

Party circuit Stribling’s Kirk Henckels was spotted chatting with famed hair stylist Frédéric Fekkai at the Boys’ Club of New York’s annual fall gala at the Pierre Hotel. Also in attendance at the elegant dinner dance was Karen LeFrak, wife of real estate mogul Richard LeFrak. The LeFraks, along with developer Larry Silverstein and his wife Klara, also attended the New York Philharmonic’s Opening Gala, which featured a performance by famed cellist Yo-Yo Ma. Also last month, Condé Nast Traveler hosted a star-studded party at the Marquand condominium in Lenox Hill. Guests included architect Shigeru Ban, hotelier Sean MacPherson, Loews Corporation Co-Chairman Jonathan Tisch and HFZ Capital Group’s Ziel Feldman. Feldman is the developer of the Marquand, a 14-story condo at 11 East 68th Street. Compiled by The Real Deal staff www.TheRealDeal.com November 2012 105

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Exactly Right. T

9/19/13 2:09 PM

THE CLOSING

WITH JEFF

GREENE Billionaire investor Jeff Greene is best known for making hundreds of millions of dollars shorting subprime mortgage-backed securities before the 2008 financial crisis. But he’s also a developer and property owner, with a portfolio of 3,000 residential units in Los Angeles. He’s currently developing two New York City condo projects: a 140,000-squarefoot property at 100 Vandam Street, and a six-story building at 576 Broome Street. He’s also tried his hand at politics. In 2010, Greene made an unsuccessful bid for a U.S. Senate seat in Florida, losing in the Democratic primary.

What is your full name? Jeffrey Bennett Greene. What is your date of birth? December 10, 1954. Where do you live? We’re in Palm Beach about eight months of the year. We’re in the Hamptons two to three months a year, and we also have places in Beverly Hills and Malibu. How did you meet you wife, Mei Sze? We first met at a charity dinner and then we became reacquainted seven years ago in Sag Harbor, at a birthday party for Mike Tyson on my boat. We have two boys and a third on the way. Mike Tyson was also the best man at your wedding. How do you know each other? We met in Malibu 20 years ago. I know a lot of very colorful people from living in L.A. I consider him one of my best friends. Sounds like you had a pretty crazy social life before getting married. It’s described by some people as crazier than it really was. I’d have a few big parties and they’d sometimes be a little crazy, and so people would assume that’s what I did all the time. I wasn’t going to parties every day — I was a serious adult, with a business career. I’d go to St. Bart’s over New Year’s in my boat and have one big party, and the next party I would have would be Memorial Day weekend. Do you still throw big parties? Yeah, but now the average age [of the guests] is two. It’s all Elmo and Ferris wheels. Where did you grow up? Worcester, Massachusetts. My dad had a textile machinery business, [but] he lost his livelihood in the late 1960s because the textile industry moved to the South. My mother, who had been a stay-at-home mom, ended up having to work as a waitress to make ends meet. In my junior year of high school, [they] moved to West Palm Beach and bought a company that made rubber stamps. I stayed in Massachusetts with a great-aunt to finish up school. Did you make trouble for your aunt? No. I was really nerdy and played trumpet in the high

122 October 2013 www.TheRealDeal.com

school band. I thought the cool thing was getting into a good college. Where did you go to college? John Hopkins University. I finished a four-year degree in two-and-a-half years. I was working three jobs, teaching Hebrew school and working as a busboy and a waiter. What did you do when you graduated? I lived on the road for almost three years selling circus tickets. I had a Pontiac Grand Am with a bar across the back seat with my clothes hanging on it. I’d pull into, like, Bluefield, West Virginia, or Dubuque, Iowa, check in to the local Motel 6 or Econo Lodge, and be there for a week or two running these telemarketing operations. It was a very lonely life. But I saved up to $100,000, which was a lot in the mid-1970s. How did you get into real estate? I decided to go to Harvard Business School, and I wasn’t sure where to live, so I took all this cash I’d saved and bought a three-unit building, in Somerville, Massachusetts. The idea [was] that I would live in one unit and rent the other two to cover the costs. It worked out so well that I started buying more. By the time I got my MBA, I had 18 properties and my $100,000 was worth over $1 million. I was running around showing the apartments and collecting the rents. After business school, you moved to California and got into real estate there. Around 1983, I bought [an] eight-unit building in

Brentwood for $510,000. … By 1991, I had about a $110 million portfolio, and my net worth was probably $35 or $40 million. I was feeling pretty pleased with myself. I was 36 years old and I had a house up in Bel Air and one in Malibu, on the beach. I was a single bachelor with a Mercedes and a Ferrari in the garage. Then, all of a sudden, the market crashed. I spent the next three years trying to dig out from under the mess. What made you start investing in mortgage-backed securities in the mid-2000s? I was sitting on a billion-dollar real estate portfolio and thinking, What if the market dips again? I really felt like these prices couldn’t go on forever, and I thought, There’s got to be something I can do to protect myself in the event of another slowdown. How much did you actually make from those trades? In the $800 million range. You’re known as a very tough boss, and you’ve been nicknamed “Mean Jeff Greene.” Is that an accurate characterization? I don’t think I’m mean. I put a lot of pressure on myself to do well, and I put the same pressure on the people around me. For the most part, people who have worked for me tell me they didn’t like me much, but they learned a lot. I’m very proud of that. It would be worse if they said, ‘Boy, he was a sweet guy, but I learned nothing.’

By Katherine Clarke

PHOTOGRAPH FOR THE REAL DEAL BY CHANCE www.TheRealDeal.com July 2006YEH00

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