The Real Deal November 2014 by The Real Deal

Will the luxury ‘bubble’ pop?

www.TheRealDeal.com

Real estate of the far future

1 Word Trade tenant roster

Selling foreigners on the outer boroughs

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

128

Laughing along with Bob & Larry

Vol. 12 No. 11 November 2014 $3.00

INSIDE THE

p55

Lorber doubles up on development

Elliman chief increases his investments in new condos, grows brand globally p36

‘Billionaire’s Row’ retail gets a lift

Brokerages with all the perks

Where city’s tallest towers are rising on 57th Street, dowdy strip goes upscale p60

TRD surveys firms on tech, training, benefits and more p48 ILLUSTRATION BY Robert Pizzo

STUNNING. SOPHISTICATED. SANTA MONICA. Record s al es at O cean Avenue’s onl y new oce an side re side n ce s, T h e Wave rly, se t a n ew b enchm ar k f or l ux ur y cond om i ni um s , conf i r m i ng t h e de man d for Sou t h e rn Californ ia coastal l i vi ng . O f f er i ng the ul ti m ate ur b an b each l i f es tyl e , t h e Marmol Radzin e r-de sign e d re side n ce s at The Waver l y are f i ni s hed w i th exq ui s i tel y r i ch, natu ral mat e rials an d of fe r bre at h tak in g oce an and p ar k v i ews . The b eau ti f ul l y ap p oi nted am eni t ie s in clu de an at t e n de d lobby, a fu lly e qu ippe d f i tness center and the S kyb r i d g e L oung e, f eaturin g a viewin g de ck an d barbe cu e are a t h at over l ook the l us h treetop s of Tong va Par k and the spark lin g Pacific Oce an .

C L O S I N G S N O W I N P R O G R E S S . 5 0 % S O L D. P E N T H O U S E C O L L E C T I O N S O L D O U T. JUST RELEASED: TOWNHOUSE COLLECTION - TOUR THE NEW MODEL WITH FURNISHINGS BY JONATHAN ADLER One, Two and Three Bedroom Residences from $995,000 • Sunday open house - 11am - 5pm (no appointment necessary) Sales Gallery open by appointment only Monday - Saturday 10 - 6pm • 1755 Ocean Avenue, Santa Monica, CA 90401 310.394.1100 • WaverlySantaMonica.com The developer reserves the right to make modifications to the floor plans, pricing and unit dimensions of residences or other areas at any time. This is neither an offer to sell nor a solicitation to buy in any state where prohibited by law or where prior registration is required. Developer shall have no obligation to sell any residence unless the purchaser executes a sale agreement and other documents required by the developer and such documents are executed and accepted by the developer. The development will be subject to the jurisdiction of a homeowners association and owners will be obligated to pay assessments to the association for maintenance of common facilities. Please review the association budget and Final Subdivision Public Report issued for the development by the California Department of Real Estate for more information. CA BRE #01005145.

ASHKENAZY

ACQUISITION

Premier Manhattan

3560 Broadway @ 146th Street

Upper Manhattan

±86,000 SF BUILD TO SUIT

LOCATION Northeast Corner of Broadway & West 146th Street FRONTAGE ±100’ on Broadway ±151’ on W 146th Street

SUBWAY PROXIMITY within 1 block within 2 blocks

SIZE Ground: Second Level: Third Level: Fourth Level: Lower Level: Total:

CEILING HEIGHTS 15’-7” Ground Floor 12’-7” 2nd floor 20’-1” / 9’-2” 3rd floor 9’-4” Mezzanine

±21,163 SF ±21,164 SF ±21,164 SF ±15,155 SF ±7,386 SF ±86,032 SF

INFORMATION • Ideal for Medical, School/University, Community Use •±86,032 SF Build to Suit • Within walking distance of the Columbia University Manhattanville Campus, a 17 acre development with 6.8 Million SF of housing and facilities

249 Church Street

TriBeCa LOCATION Northeast Corner of Church & Leonard Streets

SIZE Ground: Cellar: Sub Cellar: Total:

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

FRONTAGE Over 85’ of wrap around frontage

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

145 Greene Street

SoHo LOCATION Corner of Greene Street & Houston Street

101’

SIZE Ground: ±1,936 SF Lower Level: ±811 SF Total: ±2,747 SF

FRONTAGE Over 124’ of frontage along Houston & Greene Streets

INFORMATION • Extraordinary frontage in SoHo • Neighboring retail includes: Chanel, Louis Vuitton, Club Monaco, Ralph Lauren, Burberry, Dior • At the cross-roads of SoHo, NYU, Greenwich Village, and NoHo

For Leasing Information Please Contact:

A.J. Levine • alevine@aacrealty.com • 646.214.0245 Daniel Iwanicki • diwanicki@aacrealty.com • 646.214.0251

4250 Broadway @ 181st Street

ACQUISITION Washington Heights

NEW TO OUR PORTFOLIO

LOCATION Spans the entire city block between Wadsworth Avenue & Broadway on the South side of W. 181st St. SUBWAY PROXIMITY FRONTAGE within 1 block ±150’ on 181st St. within 4 blocks ±100’ on both Broadway & Wadsworth Ave. INFORMATION • Neighboring retail includes: Capital One,Duane Reade, McDonald’s, Foot Locker, Citi Bank, The Vitamin Shoppe • Located 1 block North of the GW Bridge Bus Terminal which serves over 4 Million passengers annually and is undergoing a $183.2 million renovation with an array of first class retail and will quadruple in size to 120,000 SF

241 Church Street (66 Leonard Street) LOCATION Southeast Corner of Church Street & Leonard Street

FRONTAGE ±125’ on Church Street ±40’ on Leonard Street

SIZE Ground: Cellar: Sub-Cellar: Total:

TriBeCa

±7,080 SF ±8,155 SF ±13,236 SF ±28,471 SF

INFORMATION • 1 block away from newly signed James Perse • Located at the base of the premier residential building in TriBeCa and directly across the street from 56 Leonard, the largest residential development in TriBeCa (145 units over 60 stories) • Central, highly accessible location situated between Wall Street and the Financial District to the South and the West Village and SoHo to the North

Philip House (1311-1337 Lexington Avenue) LOCATION Located on Lexington Avenue between 88th & 89th Streets

SIZE Up to ±4,000 SF

Upper East Side

SUBWAY PROXIMITY within 2 blocks

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

INFORMATION • 1 block away from newly signed James Perse • Excellent access to transportation in a central, highly accessible location • Directly opposite 56 Leonard, the largest residential development in TriBeCa • Over 15’-9” ceiling heights with two additional below grade levels

1991 Broadway

Retail Opportunities

ASHKENAZY

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

FRONTAGE Over 100’ of frontage along Delancey Street

Lower East Side

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

SUBWAY PROXIMITY within 1 block

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

1400 Fifth Avenue @ 116th Street LOCATION Southwest Corner of 5th Avenue & 116th St. FRONTAGE ±45’ on Fifth Avenue; ±119’ on 116th St.

SUBWAY PROXIMITY within 1 block within 3 blocks within 4 blocks

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

Join our Leasing Team:

careers@aacrealty.com

Upper Manhattan

ASHKENAZY

ACQUISITION

Premier Manhattan

3560 Broadway @ 146th Street

Upper Manhattan

±86,000 SF BUILD TO SUIT

LOCATION Northeast Corner of Broadway & West 146th Street FRONTAGE ±100’ on Broadway ±151’ on W 146th Street

SUBWAY PROXIMITY within 1 block within 2 blocks

SIZE Ground: Second Level: Third Level: Fourth Level: Lower Level: Total:

CEILING HEIGHTS 15’-7” Ground Floor 12’-7” 2nd floor 20’-1” / 9’-2” 3rd floor 9’-4” Mezzanine

±21,163 SF ±21,164 SF ±21,164 SF ±15,155 SF ±7,386 SF ±86,032 SF

249 Church Street

TriBeCa LOCATION Northeast Corner of Church & Leonard Streets

SIZE Ground: Cellar: Sub Cellar: Total:

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

FRONTAGE Over 85’ of wrap around frontage

145 Greene Street

SoHo LOCATION Corner of Greene Street & Houston Street

101’

SIZE Ground: ±1,936 SF Lower Level: ±811 SF Total: ±2,747 SF

FRONTAGE Over 124’ of frontage along Houston & Greene Streets

For Leasing Information Please Contact:

A.J. Levine • alevine@aacrealty.com • 646.214.0245 Daniel Iwanicki • diwanicki@aacrealty.com • 646.214.0251

4250 Broadway @ 181st Street

ACQUISITION Washington Heights

NEW TO OUR PORTFOLIO

241 Church Street (66 Leonard Street) LOCATION Southeast Corner of Church Street & Leonard Street

FRONTAGE ±125’ on Church Street ±40’ on Leonard Street

SIZE Ground: Cellar: Sub-Cellar: Total:

TriBeCa

±7,080 SF ±8,155 SF ±13,236 SF ±28,471 SF

Philip House (1311-1337 Lexington Avenue) LOCATION Located on Lexington Avenue between 88th & 89th Streets

SIZE Up to ±4,000 SF

Upper East Side

SUBWAY PROXIMITY within 2 blocks

1991 Broadway

Retail Opportunities

ASHKENAZY

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

FRONTAGE Over 100’ of frontage along Delancey Street

Lower East Side

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

SUBWAY PROXIMITY within 1 block

1400 Fifth Avenue @ 116th Street LOCATION Southwest Corner of 5th Avenue & 116th St. FRONTAGE ±45’ on Fifth Avenue; ±119’ on 116th St.

SUBWAY PROXIMITY within 1 block within 3 blocks within 4 blocks

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

Join our Leasing Team:

careers@aacrealty.com

Upper Manhattan

HAYES DAVIDSON

4 43 G R E E N W I C H S TR E E T A TRIBEC A L ANDMARK. REIMAG INED.

4 43GREENWICH.CO M

E xc l u s i v e S a l e s A g e n t

212.87 7.4 4 3 3

C A N TO R- P EC O R E L L A

Architec ture & Interiors

Developer M E T RO LO F T D E V E LO P E R S , L LC

2 TO 5 BEDRO O M RE SIDEN CE S Sponsor: SGN 443 GREENWICH STREET OWNER LLC, c/o Metro Loft Management LLC,5 Hanover Square, 3rd Floor, New York, New York 10004. THE COMPLETE OFFERING TERMS ARE IN AN OFFERING PLAN AVAILABLE FROM SPONSOR. FILE NO. CD140063.

HAYES DAVIDSON

4 43 G R E E N W I C H S TR E E T A TRIBEC A L ANDMARK. REIMAG INED.

4 43GREENWICH.CO M

E xc l u s i v e S a l e s A g e n t

212.87 7.4 4 3 3

C A N TO R- P EC O R E L L A

Architec ture & Interiors

Developer M E T RO LO F T D E V E LO P E R S , L LC

Contents N O V E M B E R 2 0 1 4

away from tenants 22 Turning Rental-to-condo conversions on rise

as developers chase hot condo market.

the desk of: Wendy Maitland 26 AtTown’s head of sales has an open door policy helped by glass walls, free candy.

words ... 30 InThetheir month’s funniest and most insightful real estate comments.

Town Residential’s Wendy Maitland

Howard Lorber and the art of brand management Douglas Elliman chairman expands brokerage globally while growing his role in NYC new development. Douglas Elliman Chairman Howard Lorber

Celebrating Lower Manhattan As One World Trade Center makes its grand debut, a look at the office space left to fill in the neighborhood.

48 Brokerage firms, with extras included From perks to pay, here’s our look at standout firms. Some companies offer their brokers chauffeur services.

of new condos boosts fortunes 55 Flood of new development marketing firms Corcoran rides construction wave to retake top spot in TRD ranking.

Durst’s “Pyramid” at 625 57th Street

Rising towers help 57th Street retail New restaurants, stores set to transform dowdy stretch of famed shopping street.

Selling the outer boroughs A growing number of foreign investors are buying in a host of neighborhoods they wouldn’t have looked at before.

80 A day in the life of: Adam Modlin

Adam Modlin, founder of the Modlin Group

The broker to the stars talks about his passion for ‘mentor meetings’ and his penchant for dining at hip restaurants after hours.

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

www.TheRealDeal.com March 2012 00

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Loan Origination Multifamily Development Northvale, NJ September 2014

Mezz Loan Origination Multifamily Brooklyn, NY September 2014

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Loan Origination Multifamily Manhattan, NY August 2014

Loan Origination Multifamily Manhattan, NY July 2014

825 Third Avenue 37th Floor New York, NY 10022

(646) 472-1900

www.madisonrealtycapital.com

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

Contents

new condo makes mark 82 Eichner’s Madison Square-area tower is irregular, but in a good way, TRD critic says.

Is the soaring rental market changing long-held patterns? Beliefs about Manhattan vs. Brooklyn get turned around. A cantilevered tower is set for 45 East 22nd Street LeBron James

South Florida market report No gawkers allowed at LeBron James’s Miami mansion listing.

LeBron James’s home is listed for $17 million.

Anatomy of a deal: Inside Durst’s Hallets Point play Firm that assembled massive Queens site spent $1.7M on lobbying.

they’re reading now 122 What Real estate pros offer their book lists for business and pleasure.

124 RE:CAP Introducing TRD’s name-dropping take on a month of real estate happenings around the city.

128

Buddies take act on the road A major NYC developer and a starchitect have enjoyed bantering around in spotlight together.

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

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

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

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

106

Larry Silverstein and Robert A.M. Stern

130

Tony Malkin prefers the winding road The Empire State Realty Trust chairman talks about his greatest challenges. Tony Malkin

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

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

108

Residential Deals An inside look at how home sales really happen.

126

Comings & Goings Real estate industry moves

128

We Heard A lighter look at industry buzz.

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Manhattan

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

10-29 48th Ave. Long Island City, NY 11101

(646) 568-3600

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Melville

560 Broadhollow Road Mellville, NY 11747

(516) 430-5555

The Real Deal N e w Yo r k R e a l E s tat e N e w s

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

You need Rosewood Realty Group

Publisher Amir Korangy Editor-IN-CHIEF Stuart W. Elliott Managing Editor Jill Noonan DEPUTY Managing Editor Eileen AJ Connelly EDITORIAL DEVELOPMENT DIRECTOR Heather Grossmann MANAGING WEB EDITOR Hiten Samtani SENIOR Web Editor John Goff Art Directors Ronald Gross, Keziah Makoundou Senior Reporter Adam Pincus

212.359.9900

www.rosewoodrealtygroup.com

Rosewood Ranked #1 Investment Sales Firm In Outer Boroughs for 2013.

ReporterS Rich Bockmann, E.B. Solomont SOUTH FLORIDA BUREAU CHIEF Eric Kalis Contributors C. J. Hughes, David Jones, Jennifer White Karp ASSOCIATE WEB EDITOR Mark Maurer Web Producers/WEB REPORTERS Zachary Kussin, Claire Moses SOCIAL MEDIA COORDINATOR Kerry Barger PRODUCTION COORDINATOR Victoria Tuturice RESEARCH ASSISTANT Kyna Doles EDITORIAL ASSISTANT Brendan O’Connor

*As published in The Real Deal.

Interns Juan Zielaskowski, Maurice Mayfield Photographer Marc Scrivo

We are pleased to announce the following results for the year-to-date October 28th 2014, Rosewood has completed total sales of

$1,707,219,000 which include:

Manhattan: Aggregate sales of

$584,143,000

61 Buildings / 1,572 Residential Units / 91 Commercial Units Brooklyn: Aggregate sales of

$367,415,000

62 Buildings / 2,207 Residential Units / 25 Commercial Units Bronx: Aggregate sales of

$276,856,000

54 Buildings / 2,523 Residential Units / 71 Commercial Units Queens: Aggregate sales of

$478,805,000

14 November 2014 www.TheRealDeal.com

Director of mARKETING OPERATIONS Yoav Barilan NATIONAL SALES DIRECTOR Ross Fox Advertising Sales Eran Evron, Nick Mascaro, Robert Stearns, Nicki Chadi, Sigalit Levi, Marcus Guest, Chris Cuomo, Barry Holland, Frankie Grima DIGITAL TRAFFic MANAGER Junaid Zahid WebmasterS Nima Negahban, Andrew LoCascio ASSOCIATE WEB DEVELOPER Amir Ghaheri Finance director Kenneth Cyrus OFFICE MANAGER Virginia Durso Circulation Paul Destanko Distribution Mitchell Newman, Patricia Hofmann, Forero Express ATTORNEY Barry J. Friedberg Trachtenberg Rodes & Friedberg LLP Accountants William T. McCallum, CPA, P.C., Christine Wang The Real Deal is a registered trademark of Korangy Publishing Inc. Copyright © 2014. Call 212-2601332 or e-mail news@therealdeal.com. Warning: It is illegal to photocopy or reproduce any part of The Real Deal without express written consent. For reprints and duplication rights, call 212-260-1332. Principal office: 158 West 29th St., New York, NY 10001. The Real Deal is published monthly. Annual subscriptions cost $95. Send check or money order to 158 West 29th St., New York, NY 10001.

For Sale

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16 November 2014 www.TheRealDeal.com

ome readers are telling us there is a bubble in the luxury market. We got this note last month that the three signs are: 1. A daily dose of superbroker Dolly Lenz appearing on CNBC 2. A Red Hook condo selling for $1,250 per square foot 3. Michael Shvo on the latest cover of TRD To address that last one: It’s true, the bad-boy broker was on our cover in August 2006, in the midst of that historically hot market, before appearing there again last month, reborn as a developer with plans for soaring towers. Whether that is a sign of an exuberant market, or irrational exuberance (remember that term?), remains to be seen. Another sign of the hot market was The Real Deal’s Real Estate Forum & Showcase last month in Miami. The event drew more than 4,000 real estate professionals, there to see three star-studded panels featuring the likes of billionaire Richard LeFrak and developer Don Peebles, as well as dozens of exhibitor booths for new condo projects (see page 68). If you don’t know by now, real estate in Miami is booming (it is a city that does boom and bust pretty well), with more than 280 towers planned and price records being topped regularly. It was the biggest event that The Real Deal has ever hosted, bigger than our events at Lincoln Center in New York during the last boom market. So the market is clearly going full throttle. Perhaps the time to get worried is when, like during the last cycle, people on panels say, “I think prices will only keep going up,” and otherwise assume the cyclical nature of the market is no longer a reality, which I haven’t seen them saying quite yet. But as our reporter E.B. Solomont points out in her story “Will the luxury ‘bubble’ pop?” on page 20, concerns about overbuilding in that segment of the market are not merely being whispered anymore.

Perhaps the time to get worried is when people on panels say, “I think prices will only keep going up,” and otherwise assume the cyclical nature of the market is no longer a reality. “I tend to think we’re kind of at the top of what really should be produced now,” acknowledged Related Companies’ Bruce Beal during a recent ULI panel in New York. All this building has meant good times for the city’s new development marketing firms and divisions, which are tasked with selling out new condo projects and leasing out new rental buildings coming to market. In our cover story, we rank the biggest new development marketers in the city. The numbers are a far cry from our last survey in 2011, in the middle of the downturn, when there were far fewer units and rentals dominated the scene. Corcoran led the pack this time around, with more than 61 projects coming to market since 2013. Halstead and Douglas Elliman followed in second and third place, respectively. All told, the top 15 firms brought to market nearly 16,000 units throughout the city during the period we surveyed. Check out the story by Rich Bockmann on page 55. Elsewhere in the issue, we take a look at some of the residential and commercial brokerage firms in the city that offer the best perks, from technology to training to benefits. See page 48. We also go inside the world of Elliman honcho Howard Lorber in a profile starting on page 36. Arguably the most powerful player on the New York City residential brokerage scene, Lorber is doubling down on real estate, investing in around a dozen new development projects his firm is also brokering (he is getting a first look at projects throughout the city as a result of heading a brokerage firm, taking advantage of his unique position). And he has been expanding New York’s biggest brokerage both nationally and internationally in recent months. Finally, check out our new tongue-in-cheek take on the winners and losers in New York real estate last month on page 124, and read our examination of how leasing at One World Trade Center is shaping up, as the historic tower opens this month and Condé Nast starts to move in. It’s a milestone in the transformation of Lower Manhattan that will transcend any boom or bust cycle, and it’s tremendously exciting. See page 44. Enjoy the issue. Stuart Elliott

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residential market

Will the luxury ‘bubble’ pop?

Insiders are urging caution as inventory rises

EXPERIENCE T H E R AV E I S DIFFERENCE Raveis Marketing Group (RMG) has named Julia Boland the Director of New Development for William Raveis New York City. In its 30 year history, RMG has sold over 10,000 units of new construction. Together, Julia and the RMG team will bring a unique menu of products not currently offered by any other development marketing firm to New York City.

For more information

contact Julia Boland.

By E.B. Solomont hen Zeckendorf Development’s triplex penthouse at 520 Park Avenue hits the market for a record-seeking price of $130 million next year, insiders will be watching closely, trying to glean insight about luxury real estate. For good reason. Concern about a luxury real estate bubble, once whispered, is now being voiced at full volume. At the Urban Land Institute’s recent conference in New York, top developers hinted that the luxury bubble may be getting ready to pop. “I tend to think we’re kind of at the top of what really should be produced now,” said Bruce Beal, president and general partner of the Related Companies, speaking about luxury development in the 57th Street corridor. “It seems like we hit the goalpost last year,” added Robert Toll, executive chairman of national homebuilder Toll Brothers. To be sure, the luxury market is currently going strong. Olshan Realty’s luxury market report

The entry point for the luxury market, which is defined as the top 10 percent of all sales, was $3.25 million in the period ended Sept. 30, up from $2.95 million a year earlier, according to the report. In part, that was thanks to new developments, which accounted for 7.2 percent of sales. The median sale price in new development projects was $1.63 million during the third quarter, compared with $1.44 million a year earlier. But Jonathan Miller, president of Miller Samuel, predicted that “a lot of the product coming through — or product that will be coming through over the next year — is going to be smaller or somewhat smaller than what we’ve been seeing.” “You’re not reading about new super-luxury projects being announced on ‘Billionaire’s Row,’” he noted. Miller said that rising inventory and prices in the luxury segment have slowed the pace of sales. Further, new projects “coming through the pipeline seem to be less expensive [in addition to smaller] than what we’ve been seeing lately,” said Miller,

New projects “coming through the pipeline seem to be less expensive than what we’ve been seeing lately.” Jonathan Miller, Miller Samuel

THE BOLAND TEAM Julia Boland

Director of New Development Licensed Associate Real Estate Broker Chairman’s Elite Club

julia.boland@raveis.com O. 646.684.4599 M. 917.690.4861

126 East 56th Street, Suite 1510 646.684.4599

New York, NY 10022

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for the week ended Sept. 30 logged 30 contracts signed at $4 million and up, “closing out a record September, as well as a record third quarter.” More recently, 20 contracts for $4 million and up were signed during the week ended Oct. 26, with new Downtown condos outselling the rest of the market. Still, there are signs that things are slowing. For example, only two units at Extell Development’s One57 went into contract during the first half of the year, following no sales during the last three months of 2013. According to real estate appraisal firm Miller Samuel, the luxury market’s inventory level rose 47 percent in the third quarter to 1,626 listings, up from 1,107 last year. Meanwhile, the absorption rate — meaning the number of months it would take the market to absorb all the for-sale product, at current sales rates — nearly doubled to 14.7 months, from 8.7 months. In the third quarter, the average luxury sale price was $7.25 million, up from $5.4 million a year earlier. And Miller Samuel data shows that prices aren’t just getting higher at the top.

whose company also consults with developers. In particular, new development prices are offering a wider price range. “Going forward, I think there will be a realization — and it’s happening already — that you can’t build the same thing for the same customer,” said Leonard Steinberg, president of Urban Compass. “Not everybody wants to buy a $15 million, four-bedroom apartment. A lot of people can’t afford that.” Steinberg said that well-heeled buyers are watching the market’s direction closely. He believes that developers, aware that the high-end segment is “getting too much of the same thing,” will try to break from the pack with great design and prices that are more down to earth. “Quality doesn’t have to include the most expensive of everything,” Steinberg said, adding, “I think you’ll see a variety of price points going forward.” He predicted a batch of properties under $5 million, compared with the “proliferation of crazy expensive” properties priced at $10, $20, $30 and $40 million. “It’s called luxury affordable housing,” he said. “It’s on the horizon.” TRD

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Turning away from tenants Rental-to-condo conversions increase as developers chase hot condo market By E.B. Solomont ith fewer development sites than ever to choose from, especially in Manhattan, developers are returning to a strategy that served them well before the real estate bust: rental-to-condo conversions.

Well-known converters are, of course, a big part of the trend. This summer, for instance, developer Ben Shaoul paid $270 million to Post Properties for two properties that will be relaunched as condos: Post Luminaria at 385 First Avenue and Post Tuscana at 389 East 89th Street. In September, meanwhile, Related Companies filed plans with the Attorney General’s office to convert the 339-unit rental building at 200 East 94th Street, known as Carnegie Park. Related also put its rental building at 400 Chambers Street on the market as a potential conversion. Ziel Feldman’s HFZ Capital currently has 10 conversions in the works, including the Metro, a 264-unit building at 301 West 53rd Street; the Astor, a 212-unit prewar building at 235 West 75th Street, and Lexington Lofts, a 107-unit building at 90 Lexington Avenue — along with the adjacent 177-unit building at 88 Lexington.

“You want to get into the market when the market is strong. You can do that quicker with a conversion.” Justin D’Adamo, Corcoran Sunshine

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HZF Capital, headed by Zeil Feldman, above, has 10 rental-to-condo conversions in the works, including The Metro, a 264-unit building at 301 West 53rd Street, above.

Just as in previous cycles, rising land prices and a shortage of buildable land are key motivators for the increased focus on conversions amid a hot condo market. With condo conversions, which can take less than two years, they’re able to get to market quicker than with ground-up construction, which typically requires three years or more. In all, 25 rental buildings will relaunch as condos this year, according to Halstead Property Development Marketing. And through the first half of the year, developers filed plans with the Attorney General’s office for eight more rental-to-condo conversions in Manhattan. Last year, there were 21 conversions in the borough, up from just 10 in 2012.

“It’s a function of where the opportunity is,” said Feldman, who is working on an equal number of ground-up developments. He said that over the last 18 months, longtime building owners have been cashing out, and there’s been a “constant stream of rental properties that are being offered to the converters of the world.” Developers are snapping up those buildings, given the lack of other development sites. “There’s less land available [and] most of it is picked through,” said. In addition to HFZ’s projects, the AG’s office currently has plans for conversions in Manhattan at 360 West 119th Street; 165 East 66th Street; 1810 Third Avenue; 200 East 62nd Street; 270 Riverside Drive; 18 Abingdon Square and 275 West 10th Street. Between 2009 and 2012, a total of 117 rental buildings in Manhattan and Brooklyn were converted to co-op or condo. The current batch of conversion projects will have bigger units and higher prices than the previous wave, marketers noted. “The level of luxury and price point is unique,” in part to compete with new construction, said Stephen Kliegerman, president of Halstead Property Development Marketing. Developers also are converting larger buildings than they did before. The number of units being converted this year is nearly Continued on page 110

www.TheRealDeal.com March 2010

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the

Numbers

$4,061 Elliman’s figure for average

All the data that’s fit to disseminate

Market reports proliferate, but how reliable are their numbers?

eed market data? You’re in luck. The already-crowded field of real estate market reports is seeing even more competition these days, as firms that previously sat out of the market-report game get in on the action. William Raveis NYC became the latest brokerage to issue a monthly market report on Oct. 30, joining Douglas Elliman, the Corcoran Group, Citi Habitats and many, many more. A point of distinction for Raveis’s report? It will provide computer-generated predictions for the market’s behavior. For years, major firms have issued monthly or quarterly market reports covering rental and sales. During the downturn, the number of reports soared, as brokers and clients clamored for data. In today’s tight market, the reports are a handy marketing tool, as firms tout their reports as offering unique market insight and analysis. Reports today are far more scientific than when Barbara Corcoran crafted her first, based on a handful of sales, 30-plus years ago, but consistent data is hard to come by. This month, The Real Deal looked at some recent reports from brokerages across the city to see how the numbers stacked up. By E.B. Solomont and Eileen AJ Connelly

Manhattan rent as of Sept. 30, up 5.2 percent compared to the same period last year. MNS pegged the average at $3,755, a 3.5 percent drop. Citi Habitats pointed even lower, at $3,448, virtually unchanged year over year.

$804,295 Average sales price in the third

quarter for a Brooklyn condo, per the Elliman Report. Corcoran pegged the figure at $679,000, while REBNY said $757,000.

$960 Average price per square foot for a

new development condo in Brooklyn, according to Corcoran. Elliman had the figure at $871.

11 Number of sales

over six months Barbara Corcoran used to calculate the first-ever “Corcoran Report” in 1981. Jonathan Miller of Miller Samuel, who prepares the Elliman Report, examined 3,328 Manhattan sales in the third quarter of 2014. The brokerage MNS says it uses data from 10,000 listings for its rental market reports.

$179,000 Difference between REBNY’s average sales price for a Manhattan condo in the third quarter, which pegged the figure at $2.16 million, and Elliman, which said $1.98 million.

80 Median number of days on the market for third-quarter sales in Manhattan, according to Town Residential. Elliman had the figure at 92 days.

13.3% The drop in Manhattan co-op and condo sales volume in the third quarter, according to the Elliman Report. REBNY put the fall at 20 percent.

$951,000 Average price for a condominium in Williamsburg, according to REBNY, up 14 percent since last year. Elliman had the figure at $1.05 million, up 15.3 percent, while Corcoran said it rose 4 percent to $950,000.

15% The increase in average sales price

for Brooklyn new development in the third quarter, according to Corcoran. Elliman’s report said the same metric dropped 3.8 percent.

49% Portion of the Manhattan sales

market comprised of resale co-ops in the latest quarter, according to Corcoran. Town Residential put coop’s portion at 41 percent.

$2,302 Average monthly rental price for

studios in northwest Queens in the third quarter, up 1.5 percent from last year, according to Elliman. MNS pegged average studio rents at $2,293 in Long Island City, down 3.4 percent.

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Wendy Maitland

endy Maitland, Town Residential’s president of sales, has settled into her well-lit office at the 39th Street corporate headquarters the brokerage moved to in August. While she sticks to an open door policy, and waves at most passersby through her glass walls, she reserves about 20 minutes alone every day to meditate. “It’s like a 20-minute vacation every day,” she said. Maitland joined Town at its inception in December 2010 from Brown Harris Stevens, where she was a senior vice president. Prior to that, Maitland worked at the Corcoran Group. Real estate, however, is not Maitland’s first career. She worked as a psychotherapist for 10 years before catching “the real estate bug.” As a mother of two, she said, she was always growing out of her apartment and looking for more space. “I started buying, selling and renovating my own places,” she said. “I found that I loved the process.” Last month, Maitland showed The Real Deal around her office.

By Claire Moses

GoldenbErg’s Peanut Chews

Hermès tea set

This print of the shot used for the poster of the

“Manhattan” photO

Maitland is never without a stash of Goldenberg’s

Maitland purchased this six-piece tea set for the launch of The

movie “Manhattan” was a gift for the opening

Peanut Chews, her favorite candy. “They’re made

Charles in Tribeca in October 2008. Since it was “not such a

of Town in January 2011 from Brian Hamill, a

in New York and the chocolate is dark,” she said.

wonderful time” to be selling high-end condos, Maitland decided

friend who was Woody Allen’s photographer

“They can almost substitute as a meal in leaner

the sales office needed something nice. “Ownership said they

for 30 years. “He’s one of my big influences,”

times, when I am working so hard that I don’t

thought I was crazy,” Maitland said, so she paid for it herself.

Maitland said, “especially when it comes to

have time to get out for lunch.” When people stop

Until recently it remained in the Charles, which is now 75 percent

all things New York City.” Hamill introduced

by her office for a piece of candy, “we end up

her to a particular culture of Brooklyn writers, photojournalists,

talking business and life and all sorts

firefighters and cops. Coincidentally, Allen is a client of Maitland’s.

of things. You never know what’s

As a broker, she found the famed director his house in 2006.

sold. Today, it has a permanent place in Maitland’s office.

going to come up over a couple of peanut chews.”

Muhammad Ali A black-and-white shot of the boxing

Statue of Liberty

champ, also taken by Hamill, serves

Maitland’s favorite structure in

as inspiration. As a child, Maitland

the city (tied with the Woolworth

was steeped in the boxing world after

Building) is

her family moved to Rhinebeck,

LeBron James jersey

New York, and her father struck up a

the Statute of

On the wall above the couch hangs a framed Cleveland Cavaliers

friendship with legendary trainer Cus

Liberty. “Because

jersey signed by LeBron James. CEO Andrew Heiberger presented

D’Amato. For her 16th birthday,

she’s strong and she’s beautiful

it as a result of an inside joke stemming

her father, who died when Maitland

and she inspires people,” she

from the negotiations for Maitland’s

was 27, took her to a heavyweight

said. In Maitland’s office, Lady

Town contract, which took place

championship fight. In September,

Liberty is represented in the

around the time that the basketball

Maitland continued the tradition

form of a portrait made out of

superstar famously announced he

with her son and took him to

old MetroCards. The piece of

was “bringing his talents” to Miami.

the Floyd Mayweather-Marcos

art was a present from one of her

The plaque on the frame reads, “To

Maidana match in Las Vegas. “It

agents, who commissioned it for

the queen of the court, you’re the best.

Maitland.

With respect, LeBron.”

was electric,” she said.

Jazz Fest

Kids’ pictures

Maitland says she loves live

Above Maitland’s desk, held up by one

music and spends a weekend

simple pin, hangs a collage of pictures

each year at the New Orleans

of her children given to her for Mother’s

Jazz and Heritage Festival,

Day. Not framed, just “something my

better known as JazzFest.

kids threw together.” Maitland’s son

Trombone Shorty is her favorite

is a student at Dickinson College in

Big Easy performer.

Pennsylvania, and her daughter recently closed a $1.9 million deal as a broker.

26 November 2014 www.TheRealDeal.com

PHOTOGRAPH OF Wendy Maitland FOR THE REAL DEAL BY max dworkin

Manhattan office stats

Commercial Ma r k e t

AVAILABILITY AVG. ASKING RENT RATE

Office rent spreads jump as high end runs away

Midtown’s gap between top-tier leases and average asking rents far higher than in 2007 By Adam Pincus he top end of the market is leaving more modest buildings in the dust, and nowhere is that more evident than in Midtown, a new analysis by Newmark Grubb Knight Frank reveals. The taking rents — the actual rents paid at the start of the lease — for the very top deals are at an

all-time high in Midtown and Midtown South, and are approaching former highs in Lower Manhattan. What’s more, the spread between those top deals and average asking rents has increased since the prior peak of the market about seven years ago. In Midtown, the city’s premier office market, the average taking

rent of the top 20 leases inked with landlords in the third quarter was $158.29 per square foot, Newmark figures revealed. That is more than twice the average asking rent for the market. At the previous peak of the market in 2007, the average of those top-tier deals was only about 60 percent above the Midtown aver-

age asking rent. “Taking rents are increasing as the high end of the market improves, drawing the overall averages upward,” said Stephanie Jennings, director of tri-state research for Newmark. She noted that the summits were being reached typically in the newest, Class A office buildings.

Manhattan Oct ’14 10.2% $66.22 Sep ’14 10.2% $65.97 Midtown Oct ’14 10.7% $75.73 Sep ’14 10.6% $75.74 Midtown South Oct ’14 8.2% $58.54 Sep ’14 8.5% $58.19 Downtown Oct ’14 12.3% $51.91 Sep ’14 12.2% $51.70 Source: Colliers International

But in older buildings in some areas, Jennings said, rents have stalled. “Grand Central and the East Side, those are flat year-overyear. Grand Central [for example] tends to be a value play,” she said. Although the difference between the top-tier deals and the average asking rent was less striking in Midtown South, it was significant. There, the top-tier taking rent was $86.13 per foot last quarter, about 50 percent higher than the average rent. And in Lower Manhattan, the top-tier figure was $58.77 per foot, or about 15 percent higher. Even as pricey deals get signed, there are additional indications of caution in the wider market. Last month, there was a slight tick downward in leasing activity, though it followed a strong third quarter. The total volume of leasing in Manhattan declined last month from September, and also from the same time a year ago, to 1.8 million square feet, preliminary information from commercial firm Colliers International shows. That is down from the 2.3 million square feet leased in October 2013, and the 2 million square feet taken last month, Colliers research shows. Yet Manhattan’s average asking rent in October was up by 25 cents from September, at $66.22 per square foot, Colliers data showed. The availability rate was flat for the month at 10.2 percent, after falling for several months in a row. The availability rate tracks space that is vacant now or will be available in approximately the next 12 months.

Midtown After 20 years at 711 Third Avenue, the 73-year-old weekly insert Parade magazine is relocating operContinued on page 110

28 November 2014 www.TheRealDeal.com

In their words...

The funniest and most insightful comments on real estate

“A slick advertising campaign doesn’t change the fact that this is illegal activity.” Attorney General Eric Schneiderman, on Airbnb operators who violate city and state laws regulating hotels.

“I get to play landlord, but I don’t have to be a landlord.” CBRE’s Peter Turchin, on the joys of being a landlord rep.

“My campaign complied with the current law.”

Queens state Sen. Tony Avella, a longstanding critic of overbuilding and the real estate industry’s influence on elected officials, on accepting funds from a REBNYbacked PAC.

“I’m still getting telephone “Secretly, they’re happy with calls each week from someone else who the law, but many of them wants to sit and talk are getting votes for being with me.” unhappy.” Charles Urstadt, on politicans calling for the repeal of the rent-regulation law that bears his name, while privately believing it works well.

“It was a very hard decision. I was the poster girl for Corcoran.” Broker Lauren Muss, on decamping for Douglas Elliman. 30 November 2014 www.TheRealDeal.com

Halstead’s John Wollberg, on geting contacted by agents from Coldwell Banker Bellmarc Group after hiring 15 agents at once from the troubled firm last month.

“They were [traditionally] seen as a class below the classic townhouse or co-op in New York.” Engel & Völkers president Stuart Siegel, on how condos are now the properties of choice for foreign buyers.

“It’s almost like the Mona Lisa.” Harry Macklowe, not subtle at all about his 432 Park Avenue.

“Andrew Heiberger is to Town what Caesar was to Rome.” Town Residential broker Tom Brady, on the return of the firm’s founder as CEO.

“It’s really not my intent to shame landlords.” Public Advocate Letitia James, on publishing the “worst-landlords” list. Sources: Capital New York, the New York Times, Crain’s, the Wall Street Journal and The Real Deal reporting.

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REGULATING REAL ESTATE

Too retired to borrow?

Like former Federal Reserve Chairman Bernanke, many nonstandard applicants can’t get financing By Kenneth Harney d Fine’s recent rejection for a refinancing of his home loan wasn’t exactly like former Federal Reserve Chairman Ben Bernanke’s. But there are enough similarities to raise questions about current tight mortgage-market standards and how lenders scrutinize applicants’ incomes. At the very least, there are lessons for anybody who can’t document months of steady, predictable income, whether from salary, regular retirement fund drawdowns, or other sources. Bernanke’s refi blow-up was widely publicized. He didn’t specify why he was turned down or by whom, but mortgage industry experts say most likely it was because he experienced a disruption in his regular employment income stream when he left the Fed at the end of January. Though reportedly he has since made $250,000 for a single speech, has a book contract and is now a resident fellow at the Brookings Institution, his income pattern may not have fit the standard mold in an era of computer-driven underwriting.

qualify, there must be “verification of regular receipt of [drawdown] income for two months, and verification that the payments will continue for three years.” Other lenders would require similar verifications, the Quicken official noted, and indeed, Bank of America’s letter to the Fines said their “validated income” was not sufficient to “support the level of your monthly debt.” Rules like this, Fine said in an interview, create unreasonable barriers for seniors and retirees who may have significant wealth tied up in stocks and bonds in IRAs that they prefer to tap into only when necessary. “They [the lenders] don’t trust us to manage our own finances,” he said, despite excellent credit histories and prudent financial management over a lifetime. Fine calls it a new form of age discrimination — one with far-reaching implications as growing waves of homeowning baby boomers surge into retirement and look to their IRAs and 401(k) plans for income.

Homeowners who are in or heading for retirement and may need mortgage money should be aware of the industry’s rules. Fine, 72, isn’t coy about why he got turned down by two major lenders — it was an irregular income pattern — and he’s steamed about it. The retired defense contractor lives with his wife in a house they own in Shalimar, Florida. The Fines also own a rental house in Northern Virginia and a rental condo in Shalimar. The couple’s regular monthly income of around $3,500 consists of Social Security and pension fund payments and rental income. They supplement that when needed by making withdrawals from their IRA, which currently exceeds $250,000. With high FICO credit scores and no delinquencies “ever,” Fine says, “we are not hurting financially.” But, like Bernanke, the Fines couldn’t get through the refi hoops, even though their lender, Quicken Loans, solicited them to apply. Ditto for a term extension on their home equity credit line from Bank of America, which also solicited their application. The rationale for rejection from both lenders: The Fines’ sporadic drawdowns from their IRA could not be added to calculations of their qualifying monthly income. As a Quicken Loans official said in a letter to them following their complaint to the federal Consumer Financial Protection Bureau, the couple could not show “consistent monthly draws from the [IRA] account.” This creates debtto-income ratio problems, the Quicken letter said, because for income from retirement accounts to

34 November 2014 www.TheRealDeal.com

Lenders such as Quicken and Bank of America reject the discrimination charge outright. “We want to make loans,” said Mike Lyon, vice president of operations at Quicken, but he said there are industry rules that must be followed. He pointed to guidelines from giant mortgage investor Fannie Mae that require lenders to look for “regular and continued receipt” of income from retirement funds, and to “determine whether the income is expected to continue for at least three years” after application. Lenders have some wiggle room on granting credit when an applicant has lots of money invested in stocks and bonds and doesn’t want to liquidate them on a regular basis. For example, Freddie Mac allows lenders to “annuitize” applicants’ retirement fund assets, turning untapped IRA and 401(k) wealth into “income” that helps them qualify for a mortgage. Bottom line: Homeowners who are in or heading for retirement and may need mortgage money at some point should be aware of the industry’s rules on recurrent income flows. Lenders will not, as Fine found out, trust homeowners to make intermittent drawdowns of funds when needed to pay the bills. Potential borrowers have got to do it consistently and ideally, well in advance of any mortgage application. Kenneth Harney is a syndicated columnist.

GOVERNMENT BRIEFS State approves $1.8B in bonds for 3WTC New York’s Liberty Development Corp., a subsidiary of the state’s economic-development agency, approved the sale of up to $1.8 billion in bonds to fund the continued development of the 80-story tower at 3 World Trade Center. The sale of the bonds will be managed by Goldman Sachs, which previously sold more than $1.6 billion in Liberty Bonds to finance the construction of its own new downtown headquarters, Bloomberg News reported. The bonds will be issued in three classes, and will be secured by a mortgage on the building, tenant leases, and rents; the building’s main tenant is advertising firm GroupM. Development will also be financed by $55 million of equity from develA rendering of 3 World oper Larry Silverstein, $210 million from Trade Center the Port Authority, and contributions from the state and city. The bond deal had previously been delayed for over a year when the Port Authority hesitated to guarantee the debt.

Pols tout contest to overhaul NYC airports Vice President Joseph Biden joined Gov. Andrew Cuomo last month to announce a contest aimed at fixing New York City’s airports. Biden famously said earlier this year that arriving at LaGuardia could easily be confused with landing in a “third world country.” Cuomo aims to counter that complaint by modernizing LaGuardia and Kennedy International Airport. The governor said he would open competitions for the best designs for the airports, seeking master plans for making them more attractive and efficient. At LaGuardia, he said those plans could include linking the airport to Manhattan with ferries and a spur of the Long Island Rail Road. At Kennedy, he indicated, they could include a hotel and better access to existing transit lines. To Biden, a fellow Democrat, the governor said, “We’ve heard your message and we’re acting on it.” Other critics of the city’s airports wondered what took Cuomo so long, the New York LaGuardia Airport Times reported. And developer Joseph Sitt, who is chairman of Global Gateway Alliance, a group that has called for improvements to the airports, questioned whether the announcement was mere election-year hyperbole. He said that a couple of years ago, “the governor was practically laughing at” his group’s demands. Sitt said he had hoped to hear a financial commitment and a schedule for getting the work done because “without dollars and cents, it could just be government rhetoric.” He also expressed concern that the governor’s call for ideas would delay the impending decision by the Port Authority of New York and New Jersey on a winning bid for the construction of a new main terminal at LaGuardia.

Brookfield, TF Cornerstone give big election boost to REBNY-backed PAC New York City’s biggest real estate developers made a big splash in the political arena last month just before the election, forking out more than $2.5 million to Jobs for New York, a pro-industry political action committee backed by the Real Estate Board of New York. The developers are bankrolling a PAC that is spending lavishly to unseat several Democrats at the poll November 4, and to back Republican candidates in several open races, a review of campaign filings showed. The top donor over the past month to the PAC was Brookfield Property Partners, led by CEO Ric Clark, which contributed $170,800. Next was TF Cornerstone, led by Thomas and Fred Elghanayan, with $170,600. By Brendan O’Connor

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Profile

Brand m a n a g e m e n t With an eye for a solid pedigree and a good deal, Douglas Elliman’s Howard Lorber expands brokerage globally, while growing his own role in NYC new development

By Rich Bockmann rom his 52nd-floor office at the corner of Fifth Avenue and 56th Street, Howard Lorber can look a few blocks north to his home at the classically styled Sherry-Netherland Hotel, then turn east to view his future apartment in the sky-piercing 432 Park Avenue. For a man who believes in the indefatigable value of a strong brand, the two addresses provide a fitting metaphor for Lorber’s career trajectory. The former is where the Douglas Elliman chairman met his mentor, Bennett LeBow, the man who guided Lorber through the deals that led him to the top of the city’s largest residential brokerage. The latter is the tallest condo building in New York, and arguably the most prominent on the real estate scene today; an address befitting a man who is shaping his brand into one identified with an array of

new development projects across the city. The Real Deal visited Lorber in his office to talk about his growing hand in crafting the New York skyline, and how he climbed to this height in his career.

A brain for business “Good at math” is how Lorber describes his 21-year-old self, who graduated from Long Island University in 1970 with a degree in sociology. The son of an electrical engineer

was as a stockbroker and his second was in the insurance business. “And then I sold real estate,” recalls Lorber, “so all sales-oriented businesses.” By the early 1980s, the mogul was already seasoned at buying and selling companies. But during a chance encounter in 1983 at the bar at the Sherry-Netherland — a luxury hotel that was an icon of old, grand New York — lightning struck, when Lorber met Bennett LeBow, a corporate raider who was to make his fortune taking Western Union through bankruptcy. Lorber started setting up pension plans and handling insurance for the financier, who saw the promise in a 140-year-old telegraph company that seemed at first glance obsolete and mossed over with debt. To avoid dragging the storied Western Union name through the mud — in Lorber’s words, to protect the brand — the company changed its name to

“‘I don’t really care what you buy the building for. Do whatever you want. I’m fishing,’ Lorber told his partner. ‘Call me back when you got it.’”

36 November 2014 www.TheRealDeal.com

Howard Lorber who succeeded in the post-war building boom, the Bronxborn Lorber had no business background, but his first job

Photograph OF LORBER for the Real deal by max Dworkin

LONG ISLAND CITY

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Profile New Valley and declared bankruptcy in 1991. “Basically, what we were left with was a company with a lot of money and no business,” Lorber said. In 1994, reborn with a new focus on money transfers, the old Western Union was sold, making LeBow a killing of some $400 million. New Valley LLC became Lorber’s base of operations — the company today owns 70.6 percent of Elliman, in addition to a series of real estate investments. Not bad for “good at math.” But ask almost anyone who knows him well and they’ll likely tell you that Lorber — a man who spends his time in his office glued to his Bloomberg terminal — has one of the sharpest business minds out there. “The best explanation I can give you is, he is a quick study,” said attorney Brian Ziegler, who brought Lorber the deal to buy his first brokerage stake in 2000. “He’ll take a look at a situation or a financial statement, or look at a business plan, and he really digs down below the surface on a very rapid basis. He gets what’s going on and understands where the trouble is, and understands how to correct it.”

Gone fishing Lorber’s incisiveness extends not only to business, but to his own strengths and weaknesses. For example, Lorber’s first deal with prominent developer Steve Witkoff came in 2011, when the partners purchased one of the International Toy Center buildings at Madison Square Park, which they’ve since converted into 125 luxury apartments. The two had known each other for decades; early in his career, Witkoff practiced law and worked on some of Lorber’s first real estate deals in the mid-1980s. The way they tell the story, Witkoff came to Lorber with a proposition to buy the Toy Center out of bankruptcy. The latter agreed to come on board, but declined to go bid on the building.

“I didn’t go to the auction, because I know I’m not that good at auctions,” Lorber said. “The ego gets involved and you keep bidding higher and higher.” Instead, Lorber went fishing. Witkoff, meanwhile, was joined by his 17-year-old son and his business partner, Scott Alper, at the Midtown law office of Schulte Roth & Zabel, which represented the seller, Lehman Brothers. Witkoff & Co. were up against several industry heavyweights: Harry Macklowe, the CIM Group, SL

Lorber runs in circles with some of the wealthiest people in town, a boon for a guy who sells real estate. Green and L&L Holdings. “We look like the sad sister act compared to these guys,” recalled Witkoff. “Everyone’s there with institutional capital. We’re there alone.” Bidding started at $180 million, and when it went up to $185 million, Wikoff called Lorber to see what he thought of the price. “He said, ‘If you like it, I like it,’” Witkoff recounted. The price went up again, this time to $187 million. Another phone call, a few more words of encouragement. Up to $189 million, another call. “I don’t really care what you buy the building for. Do whatever you want. I’m fishing,” Lorber told his partner. “Call me back when you got it.” Witkoff finally won the property for $190.8 million and

called Lorber to tell him the news. “Good, you would have been a shmuck if you didn’t,” Witkoff remembered his partner telling him. With all but three of the building’s 125 condos sold, the two are more than satisfied. As originally penciled out, Lorber and Witkoff thought the purchase would be a good deal if they could sell the units at $1,750 per square foot. Lorber said the properties have been selling at an average of $3,000 a foot. “So it was a pretty good deal at $1,750 a foot,” he said. “Now it’s an unbelievable deal.”

The value of a brand In some ways, Lorber seems out of place among the outsized personalities at Elliman. After all, the stable at the city’s largest brokerage includes “Million Dollar Listing” stars Fredrik Eklund and Luis Ortiz, and has seen the likes of maverick powerbroker Dolly Lenz and self-promoter Michael Shvo pass through. By contrast, Lorber is a boardroom executive, and while best known in the industry as the chairman of Elliman, he has led several surprisingly diverse businesses, from the Brooklyn-born hot-dog stalwart Nathan’s Famous to tobacco company Liggett Group. The executive chairman and largest individual shareholder of Nathan’s, Lorber said that the company taught him a valuable lesson in business. “Nathan’s was an interesting one, because it was a very good lesson about the value of a brand,” he said. “Nathan’s was a great name with not very good management. The brand name was much bigger than the actual company was.” Lorber said he turned the company around primarily by installing stronger managers — a tactic he later employed with Elliman. “If you have a great brand name it’s almost impossible to Continued on page 112

A look at the most notable deals in Lorber’s portfolio Lorber is still executive chairman of Nathan’s

New Valley has invested $131 million in real estate since 2011 worldwide The Liggett Group is the biggest earner for Vector

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HOWARD LORBER

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Looking (Far) Ahead

NYC industry and tech insiders envision what’s coming next

By Christopher Cameron hen the futurists of the early 20th century imagined the New York City of tomorrow, they thought big. Renderings from the 1920s and 30s depicted massive infrastructure projects: roadways that carved deep canyons between skyscrapers, dirigible docks atop Midtown towers and skywalks between buildings. Nearly 100 years later, those reimagining the city are thinking green and smart. They emphasize streamlining existing infrastructure, empowering small tenants, shrinking carbon footprints and building highly efficient information networks focused on micro-markets and individuals. Last month, The Real Deal spoke with real estate tech insiders, CEOs and industry mavens to glimpse their vision of the New York City of the future. Read on to learn what they see in their crystal balls.

The ultimate goal is to cut greenhouse gas emissions 80 percent by 2050 and make a “complete transition away from fossil fuels,” according to a report on the proposals. That vision may well be within reach. Experts predict that the city will become incredibly sustainable in the coming decades. Buildings, they said, will become extremely energy-efficient and managed remotely by tablet on the individual, portfolio or even city level. Green features that are on the cutting edge now, such as living roofs and

He added that the way the city conceives of parks and green space is set to radically change. “Vertical parks on commercial and residential buildings will interface with horizontal parks. Innovation in green design is going to intermingle with technology to create a more responsive environment.” When it comes to the environment, modern-day visionaries haven’t completely lost their taste for behemoth infrastructure projects. Some new concepts were inspired, in part, by the havoc wreaked by Superstorm Sandy. In one such response, the city has partnered with the starchitect Bjarke Ingels to design the “Big U,” an eightmile buttress — running along the waterfront from West 57th

“I think coming around the corner are stereoscopic presentations in people’s homes. People will be able to pull up your property development in their living room and show all their friends.”

A greener city In September, the de Blasio administration pledged $1 billion toward “greening” city-owned buildings, and rolled out incentives to nudge private landlords toward doing the same. Over the next decade, the city plans to take myriad steps, from upgrading lighting and boilers in public housing and offices to installing solar power at schools and possibly even City Hall. 40 November 2014 www.TheRealDeal.com

Steve Bell, Archiform 3D wind turbines, may well become the norm. And that’s just the beginning, according to Jack Nyman, the executive director of the Steven L. Newman Real Estate Institute at Baruch College, who recently organized Baruch’s Next-Gen Buildings and Cities Conference. “You are going to see super-advanced technology platforms that are going to control air quality, temperature, traffic demands and energy consumption,” Nyman said. “You are going to see pedestrian flows and experiences change through design and urban innovation. Neighborhoods are going to become more ‘environmentally attuned.’”

Street down to the Financial District and then back up to East 42nd Street — aimed at protecting Lower Manhattan from flooding. The project is a rethinking of how city dwellers interact with infrastructure. Instead of crudely cutting off Manhattanites from their coastline, the way many mid-20th century highways did, the Big U aims to serve each neighborhood it touches in unique ways, and on that community’s terms, through interactive design. For instance, between the Manhattan Bridge and Montgomery Street, plans call for deployable flood walls that can be flipped down under the FDR Drive. And rather than acting as mere infrastructure, they will sport artwork by local artists. illustration for the real deal by noah McDonough

Looking (Far) Ahead The green roof being installed at the Barclays Center in Brooklyn will be just one of many in years to come.

“Architecture turns fiction into fact,” Ingels said. Building a storm barrier around Manhattan may sound far-fetched, but can become reality, he noted. “When you come up with something like this, it sounds like science fiction. But in just a few years, it becomes a fact.”

A mixed-use city

Related’s Hudson Yards is one of the first major developments to deploy big data, but in the future such technology will be common.

Recent zoning changes, combined with soaring land prices, make developing mixed-use and multi-use complexes especially attractive to builders eager to both hedge their bets and earn top dollar. And experts say that trend is here to stay. “I think you are going to see more mixed-use developments throughout Manhattan,” said Michael Mandel, the co-founder of Compstak, an online database of commercial real estate information based in New York. Residential buyers are already flocking to commercial neighborhoods like Midtown and the Financial District, while so-called “creative firms” are jumping ship for more residential areas like Chelsea and the East Village. “We’ve already seen successful commercial development in areas like the Meatpacking District and in the East Village with 51 Astor Place,” said Mandel. “Those projects have proven that developing office space in primarily residential areas is appealing to companies and their employees.” Advances in how real estate data is accessed and used by residential buyers has the power to reshape neighborhoods, Nyman said.

larger space users look to become more efficient by filling every nook and cranny of unused office space. “I think the group that will benefit the most from innovation will be small tenants,” Mandel said. “Right now, if I’m a 1,000-square-foot tenant, no broker wants to work with me, because the commission is too small. But I think more online tools are coming that will allow small tenants to educate themselves on what space is out there and what they should pay.” And as landlords cater to the needs of small and dynamic tenants, leases are going to become shorter, according to David Mandell, the co-founder and CEO of PivotDesk, a platform that matches up small tenants with larger firms that have extra space within their leases. “Don’t think ‘short-term,’ think ‘flexible,’” Mandell said. “If you have extra space and are hosting another company and all of a sudden you start growing, you can get your space back, because you aren’t locked into a sublease.” “And if you are the guest company, and you start growing rapidly, you don’t have to liquidate your office space,” he said. The same goes for retail, which has embraced the branding value of operating small brick-and-mortar shops in the e-commerce era, according to Namek Zu’bi, co-founder of Silicon Badia, an early-stage venture capital firm with numerous real estate tech investments including Compstak and Honest Buildings. Zu’bi envisions more small pop-up stores and super-

Building a storm barrier around Manhattan may sound far-fetched, but can become reality. “Architecture turns fiction into fact. When you come up with something like this, it sounds like science fiction. But in just a few years, it becomes a fact.” Bjarke Ingels

London-based designers Jeffrey Lee, Rui Liu and Tina Qiu envisioned a “Vertical Central Park,” along the lines of what some futurists predict will be created to bring more green space to urban dwellers.

“We’re talking interconnected micro-grids on the neighborhood, and even city level, with layers of wired and wireless technology, providing massive amounts of info,” Nyman said. Those layers of technology will give buyers the ability and knowledge to go where they have never gone before en masse, while the neighborhoods themselves will acclimate to that influx on an unprecedented timescale. And armed with better data, developers will be able to produce projects that are more closely aligned with demand, leading to higher occupancy rates and less speculative development. “There will be less development, but what is developed will be leased up quicker,” Compstak’s Mandel said. In the rapidly growing outer boroughs, that means highly tailored developments that are flexible and integrated with the needs of individual communities, he added.

Small tenants, shorter leases In recent decades, a small and growing company would often struggle to find space in Manhattan, either because it could not afford to sign a large lease that it might not grow into, or because it could not find a broker willing to take a miniscule commission for a small deal. Now, the birth of shared workspaces is giving start-up firms access to flexible workspaces that can be adapted to fit their specific needs. But in the future, experts say, there will be even more emphasis on catering to small tenants, as

short leases from big and small retailers, along with more new technologies and brokerages that facilitate matching up store owners with flexible spaces.

Changing spaces In the future, build-out trends that are already popular with start-up tenants will go mainstream, more thoroughly penetrating New York’s entire office stock. The emphasis will be on flexible-use spaces and less on Class A aesthetics like floor-to-ceiling windows or marble finishes. To produce these sleek functional spaces, Angela Castleton, the national workplace leader and principal of DLR Group, is drawing upon biology and nature. “Being around things that are natural is proven to make you work and feel better,” said Castleton, who led DLR in the design of the Magnate, a cutting-edge office environment that recently won NAIOP’s 2014 Build-Out/ Interior Design Competition. “Offices will be tactile and varied with natural finishes. There will be living walls filtering the air and lighting that mimics the sun.” She added that she expects to see offices that function more like a beehive than a traditional workspace. She calls it “the hive principle.” Expect to see efficient octagonal shapes, workers that come and go as they please, and a mixture of private and shared spaces that break down hierarchies and facilitate casual and accidental interactions.

Devices play new roles Mobile technology gives the real estate industry and www.TheRealDeal.com November 2014 41

Looking (Far) Ahead The more energy-efficient city of the future may see more buildings sport features like wind turbines.

its customers on-the-fly access to an overabundance of information about virtually any property. Now devices like Google Glass, Apple Watch and Oculus Rift are also poised to once again allow tech-savvy realtors, developers and designers to rethink how people interact with spaces. “I don’t think new devices are going to be gamechanging, but I do see devices as a means of enabling something else,” Mandel said. “The laptop isn’t gamechanging to real estate, it is the products people build on top of it. So we have been thinking about what kinds of applications we can build for new devices, like the Apple Watch.” Some of the apps coming to these devices could allow building comps or residential listings to pop up on consumers’ wrists, or their phones, as they stroll by. Devices like Google Glass and Oculus Rift also offer opportunities for 3D walkthroughs of a space — the ability to walk through a rendering and feel like you are really inside of it. “The perfect tool to sell properties prior to construction would be the “Star Trek: The Next Generation” holodeck, where buyers could walk in and interact with and change a space as you pleased,” said Steve Bell, the founder of Archiform 3D, a 3D and virtual-reality rendering service.

need information, knowledge and intelligence that goes beyond the average consumer” to stay in business. In fact, he envisions brokers acting as data filters for buyers and sellers overwhelmed by the information available to them. In the commercial realm, where cutting-edge tech tools like big-data portals and remotely accessed building management systems have thus far largely benefitted landlords, expect more technologies that resemble residential listing sites, apps and databases to empower tenants, said Ashkán Zandieh, founder of RE:Tech, a national real estate tech coalition. “I think commercial is going to go the way of residential, and I think all the listings are going to be online,” agreed Mandel of Compstak. “More transparency in comps will lead to more fairness in pricing,” he added. “What you are going to see is a much more efficient market. You are going to see a smaller gap between asking and taking rents. And you are going to see deals get done much more quickly.”

Divergent outlooks for brokers Real estate tech and industry visionaries are divided on the future of brokers. Some expect to see the cutting out of the middleman and elimination, or at least vast reduction, of his

“You are going to see super-advanced technology platforms that are going to control air quality, temperature, traffic demands and energy consumption.” Bjarke Ingels’ “Big U” is designed to protect Manhattan from future storms.

Jack Nyman, Steven L. Newman Real Estate Institute at Baruch College

“Living walls” like this one envisioned by Angela Castleton, of DLR Group, may help clean the air in offices of the future.

That technology probably isn’t coming in his lifetime, he admitted. But what already exists are virtual reality, 3D and real-time technologies that are only going to improve in the coming years. “I think coming around the corner are stereoscopic presentations in people’s homes,” he said. “People will be able to pull up your property development in their living room and show all their friends.” But when it comes to the much-speculated-about use of drones, which are already being used to showcase properties in suburban markets, industry honchos were more skeptical about their future in super-dense Manhattan. “I don’t think drone use will ever be particularly important in Manhattan, but it could be very impactful in other markets. People in the past paid tens of thousands of dollars to have helicopters photograph their properties,” Mandel said.

Solar panels are another energy source that futurists predict will become common on top of New York City buildings.

A transparent market

42 November 2014 www.TheRealDeal.com

One of the major obstacles both residential and commercial tenants currently face is knowledge … or lack thereof. Even to longtime New Yorkers, knowing how much to pay to live or work in different neighborhoods can be perplexing. As real estate listings have migrated online and to apps, the amount of information and resources available has grown exponentially in recent years. But future tenants and buyers will have access to an even greater wealth of specialized data, with details like building air quality, efficiency and quality of life factors, leading to hyper-educated, hyper-demanding consumers, real estate pros say. “This consumer is becoming much, much, much more demanding,” said Leonard Steinberg, Urban Compass president. To keep up with this increasingly sophisticated public, Steinberg added, “The broker of the future is going to

or her role. Others maintain brokers will stay in the game in some form, while yet a third camp believes that industry changes will elevate brokers into the ultimate insiders. Steinberg sees a role for the “human touch,” he said, “But the human touch needs information and technology to make sure it can provide outstanding service. Brokers will be fueled by technology, but not replaced by it.” Brokers who thrive in the future, he predicted, will be those who can master the macro and the micro, meaning those who can unite endless amounts of information with emotional intelligence. Because public understanding of real estate is becoming so sophisticated, he added, “There is going to be a day of reckoning for the brokers who in the past have been lucky or relied on razzmatazz to make a deal.” Others, like Zandieh, expect a modified role for brokers. “It is changing as we speak,” Zandieh said. “Real estate is becoming hyper-local, and brokers are going to become much more specialized in dealing with specific neighborhoods, because a transaction in Greenpoint is completely different from a transaction in Bushwick.” Compstak’s Mandel predicted that “commercial tenants, buyers and sellers are still going to rely on brokers” 10 years from now, “but they are going to come prepared with their own research,” making the transaction faster. And that will be good for the broker, as well as the tenant. “Any broker will tell you the same thing: they would rather get a deal done quick than get a few bucks more in commission,” he said. Zu’bi of Silicon Badia predicted the death of the exclusive listing, but not necessarily the broker, in the coming decades. “In a more transparent, more efficient market, the information arbitrage will no longer be in the favor of the middleman,” Zu’bi said. “Still, I think we will always need an intermediary to make sure that stuff gets done.” TRD

Downtown Revival

Celebration and competition Downtown as One World Trade Center opens As the centerpiece of post-9/11 recovery debuts to fanfare, there’s still plenty of empty office space in Lower Manhattan

By Rich Bockmann ondé Nast’s arrival at One World Trade Center this month gives the Durst Organization and the Port Authority reason to celebrate. In much the same way that the publishing giant’s move to Times Square in 1999 signaled a new era there, Condé’s move-in as the anchor tenant for the most high-profile office building in the country symbolically puts Downtown’s darkest days behind it. And “anchor tenant” is exactly the role Condé is playing. Since the Port Authority of New York and New Jersey announced three years ago it landed the brand behind Vogue and Vanity Fair, more than 30 companies signed leases for 100,000 square feet or more in Downtown office buildings. Add to that the retail complex incorporated into the Santiago Calatravadesigned transit hub, the Fulton Center Mall, the South Street Seaport redevelopment, an influx of retail along Fulton Street and a profusion of new residential developments, and Lower Manhattan has over the 13 years since the 9/11 terrorist attacks become one of the city’s most buzzworthy neighborhoods. “Alltogether it’s changing, and again you get that vibrancy and energy and that wanna-be-Downtown syndrome,” said Tara Stacom executive vicechairman of brokerage at Cushman & Wakefield, which is not only directing leasing at One World Trade, but also is one of the building’s tenants. “It’s once again going to put the full spotlight Downtown.” At the end of the second quarter, Downtown leasing was up 34 percent year over year, the best surge the market has seen in 13 years, according to the Alliance for Downtown New York. It’s taken some time to get to this point. One World Trade was mired in delays due to legal woes between the PA and the original developer, Larry Silverstein. After shovels were in the ground, the PA took over development duties and in 2010, brought Durst on as a partner. Leasing was slow, however, and Durst had to reduce rents on the building’s middle floors earlier this year. But with a flurry of deals this year, roughly 60 percent of the building’s 3 million square feet is leased. Last month, Cushman & Wakefield released an in-house study that showed One World Trade had a larger percentage of space leased up at opening than six out of the last seven speculative office towers opened since 2006, including

Silverstein’s 4 and 7 World Trade, and Boston Properties’ 250 West 55th Street. Stacom attributed it to the property’s cache. “It’s a recognized building and a recognized address that provides something more than just the real estate fundamentals,” she said. But the tallest tower in the Western hemisphere may prove to be a double-edged sword. While it provided a spark that helped ignite Downtown, it’s also a 3-million-square-foot competitor to a host of other new and refurbished office buildings in the neighborhood. In fact, five other buildings within a few blocks have more than 1.4 million square feet of vacant space combined. Silverstein’s 4 World Trade is the emptiest, with more than 900,000 square feet. “Office space is about jobs. That’s what it’s all about,” said Marisa Manley, president of Commercial Tenant Real Estate Representation. Citing state labor statistics, Manley said the sectors seeing the largest growth — healthcare, education and hospitality — aren’t the types that lease large blocks of Class A office space. The 15,600 professional-service jobs the city added last year, she said, would only support about 2.3 million square feet of office space across the city. And, she noted, One World Trade is still 40 percent vacant. In a 3-million-square-foot office tower, that’s another skyscraper’s worth of empty space. Last month, The Real Deal took a look at what’s leased and what’s not in the area surrounding One World Trade.

Brookfield Place (Brookfield Office Properties) 7.05 million square feet across four buildings Vacant: 390,650 square feet Signed Time Inc. to more than 700,000 square feet at 225 Liberty Street in May. Major tenants include Bank of America Merrill Lynch, Oppenheimer Funds, The Bank of New York Mellon and Cadwalader, Wickersham & Taft.

44 November 2014 www.TheRealDeal.com

PHOTOGRAPH OF world trade center FOR THE REAL DEAL BY Michael Mahesh

Downtown Revival

One World Trade Center tenants Floors 100-102 Public observation desk

reportedly looking to reduce its footprint after Durst reduced rents at the tower. The company currently leases at Silverstein’s 7 World Trade Center.

Floor: 87 KiDS Creative The advertising agency reportedly paid the highest price for office space Downtown when it signed a 34,775 square foot lease in May for more than $90 per square foot. At the time, it was the first deal done in the building in more than three years. KiDS’ clients include companies such as Balenciaga, Alexander McQueen, Alexander Wang, Lancôme and RCA.

Floors: 50-55 U.S. General Services Administration The agency in charge of managing government assets and supporting federal employees is consolidating several offices to take 273,004 square feet for 20 years. Asking rent was reportedly $75 per square foot. The federal government, which had occupied significant space in the original World Trade Center, had long pledged to lease space when the new building was built. The GSA will share its six floors with the district headquarters of the U.S. Army Corps of Engineers and the U.S. Customs and Border Protection’s field office.

Floor: 85 Servcorp The business-services provider will open its 34,775 square foot space to clients in March 2015. The Australian company signed a 15-year lease in August for a full floor in an area of the building where asking rents range from $85 to $100 per foot. The company, which provides clients with executive suites, meeting rooms and virtual office space, has three other locations in the city, at RXR Realty’s 1330 Sixth Avenue, RFR Holding’s Seagram Building and 17 State Street. Floors : 64 (partial) -69 Vantone China Center New York China Center, which looks to give Chinese companies a toehold in New York by providing office and events space, was the first non-government tenant to take space in the building when it signed a 196,041 square foot lease in 2009. According to the Port Authority, rents on the 20-year, nine-month lease start at $80 and escalate over time. Earlier this year, China Center was

Floor: 46 (partial) BMB Group The Cayman Islands-based investment advisory firm, which caters to ultra-high net worth individuals and Forbes 500 companies, signed a deal in June to take 2,191 square feet at a reported asking rent of $75 a foot. The company, founded by financier and entrepreneur Rayo Withanage and Prince Abdul Ali Yil Kabier of Brunei, is relocating from Silverstein’s 7 World Trade Center. Floor: 45 (partial) Legends Hospitality The operator of 1WTC’s 120,000 square foot observatory, set to open next year, will relocate from its office at Third Avenue and East 50th Street. Legends, which was formed in 2008 by the New York Yankees and the Dallas Cowboys, has branched out to operate concessions for the likes of Manchester FC and New

York’s own Circle Line Cruises, as well as entering into sales and planning partnerships with a number of entertainment clients. The company signed a lease in June for 4,799 square feet of pre-built space with a reported asking rent of $75. Floor: 45 (partial) Cushman & Wakefield The global commercial brokerage, which is handling leasing at One World Trade along with the Durst Organization, is moving its Downtown office from 100 Wall Street. Cushman signed a 10-year lease in early September for 10,222 square feet on one of the prebuilt Condé Nast growth floors. The asking rent on the floor was reportedly $69 per square foot. Floors: 20-44 and a 10-year option on floors 45-49 Condé Nast By early next year, some 2,300 publishing employees will move into 1.2 million square feet of space. The company is making the move in phases, with corporate executives arriving first, in early November, to be joined by thousands more by February. Condé inked the deal in 2011, paying slightly more than $60 per square foot, according to reports. The company has an option on five growth floors. Much like its move to 4 Times Square more than a decade ago, the media behemoth’s decision to make a new home downtown was the first domino to fall in a line of office tenants heading to a rejuvenated neighborhood. Floors 1-20 Contain the lobby, mechanical equipment and other building services.

Nearby buildings 7 World Trade Center (Silverstein Properties) 1.7 million square feet of office space 100 percent leased. Major tenants include Moody’s Investors Service, the WilmerHale law firm, and asset manager MSCI. 3 World Trade Center (Silverstein Properties) 2.5 million square feet of office space Vacant: 1.97 million square feet The building signed its only tenant to date, media-investment managing firm GroupM, to a 515,000 square-foot lease in December. The building is due for completion in 2018. 4 World Trade Center (Silverstein Properties) 2.3 million square feet of office space Vacant: 901,838 square feet Major tenants include the Port Authority and the City of New York. The leasing team signed the marketing firm MediaMath to 106,000 square feet in July and investment-research company Morningstar to 30,000 square feet in September. One Liberty Plaza (Brookfield Office Properties) 2.25 million square feet of office space Vacant: 189,906 square feet Major tenants include the law firm Cleary Gottlieb Steen & Hamilton, since 1990.

www.TheRealDeal.com November 2014 45

Bellmarc agents flee firm as legal woes mount

Neil Binder hit with $2M suit filed by partners; may endanger Coldwell Banker franchise deal By E.B. Solomont ore than 25 agents from Coldwell Banker Bellmarc Group have decamped to other firms amid fallout from allegations that co-founder Neil Binder embezzled money from the brokerage. The majority of the agents who migrated to other brokerages came from Bellmarc’s office at 681 Lexington Avenue, after Bellmarc was evicted in August for non-payment of rent, The Real Deal has learned. By last month, 15 agents had joined Halstead Property’s Park Avenue office, including top producer Geri Epstein and a team lead by Leslie Penny and Harriet Botwinick. Another 10 agents moved to David Schlamm’s City Connections Realty, including husband-and-wife team Hy and Myrna Rosen. The shakeup came just two months after Binder was sued by his business partners, Larry Friedman and Anthony DeGrotta, who accused him of embezzling hundreds of thousands of dollars from the brokerage. On Aug. 26, the firm, which is a franchisee of national brokerage Coldwell Banker, was evicted from its Lexington Avenue office, according to court documents. Soon after, Coldwell Banker — which claims it is owed

marc Group became a Coldwell Banker franchise last summer. As of May, the firm had 519 agents, up slightly from 511 in 2013, according to The Real Deal’s annual brokerage ranking. In an affidavit, Binder said the brokerage had run into a “serious negative-cash position.” In fact, during a February 2014 meeting with the president of Coldwell Banker, Binder expressed his intention to sell the business. Binder did not respond to a request for comment. However, in his affidavit, Binder characterized the suit by Friedman and DeIn happier days: Anthony DeGrotta, left, Neil Binder and Larry Friedman Grotta as a “premedannounced the combination of A.C. Lawrence and the Bellmarc Group as a itated action and ‘slap’ Coldwell Banker franchise last year. style suit” designed to was struggling to pay its franchise dues. In give his partners control of A.C. Lawrence. their suit, Friedman and DeGrotta alleged “This lawsuit is also an attempt to cover up Binder used the company as his “personal their own malfeasance and improper actions,” piggy bank.” he said, including “suspicious or unauthoBellmarc, co-founded by Binder in 1979, rized” payments by Friedman and DeGrotta. Meanwhile, on Sept. 10, Coldwell Banker acquired A.C. Lawrence from Friedman and DeGrotta in 2012. The combined Bell- asked Judge Saliann Scarpulla to appoint more than $270,000 — asked the judge in the case to appoint a temporary receiver to oversee Coldwell Banker Bellmarc Group’s operations, pending the outcome of the litigation. According to court documents, the dispute between Binder, Friedman and DeGrotta gained steam last winter, as the brokerage

a temporary receiver to oversee the New York City business “so as to preserve [its] value while this litigation is pending.” In court documents, the company said that the Bellmarc Group owed $276,545 in franchise payments as of Aug. 26. A lawyer for Coldwell Banker didn’t immediately return a call seeking comment. William Hummell, an attorney for Friedman and DeGrotta, said that as far as he knows, Coldwell Banker has not terminated the franchise agreement. “The parties are discussing possible settlement among themselves,” he added. The new City Connections group includes the Rosens, as well as Adolfo Brenes, Nicolas Bustamante, Janis Cooke, Susie Gomez, Richard Mulholland, Tama Robertson, Eva Posner and Vanessa Palka. The Halstead group includes Epstein, Penny and Botwinick, along with Marcia Gershon, Neil Gallo, Richard Topp, Leslie Bettison, Greta Elias, Seth Price, James Lake, Kim Cowal, Joe Irving and Arnie Roiutman. John Wollberg, who heads up Halstead’s Park Avenue office, said it was “highly unusual” to hire such a large group in “one fell swoop.” But, he said, “This was a unique opportunity. We seized it.” TRD

We Are Pleased To Welcome

PAUL ANAND And His Team To Our Firm Agnes M. Beaugendre, Sharon Elbaz, Ashley C. Fitterer, Timea Ferber Greenberg

Paul Anand Licensed Associate Real Estate Broker 445 Park Avenue, New York, NY 10022 panand@bhsusa.com t: 212-452-6275

c: 917-207-7847

All information is from sources deemed reliable but is subject to errors, omissions, changes in price, prior sale or withdrawal without notice. All rights to content, photographs and graphics reserved to Broker. Equal Housing Opportunity Broker.

46 November 2014 www.TheRealDeal.com

www.TheRealDeal.com March 2012 00

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Residential firms with all the perks

TRD’s survey of standout NYC brokerages, including young firms trying to lure talent

By E.B. Solomont n New York’s hyper-competitive real estate world, jumping from brokerage to brokerage is a blood sport for agents. And to attract top brokers, firms are known to offer huge signing bonuses, high commission splits and a bevy of perks. Even for the average agent, benefits can range from insurance coverage to car service to use of the company’s American Express black card.

The Real Deal surveyed brokers across the city to identify stand-out amenities at firms both big and small. Several

large firms declined to participate, but we reached out to individual brokers to get the scoop on what their firms offer. Given that the majority of brokers are independent contractors, most hammered home the importance of training programs, marketing support, technology and a robust listings database. The following are some of the most notable amenities offered by New York City’s residential brokerages:

Technology

f selling real estate is about relationships, technology is a modern-day cupid; right now, most brokerages have — or are developing — mobile tools to help agents complete deals on the go, including cloudbased access to the firm’s listings. For startup brokerage Urban Compass, led by CEO Robert Reffkin, tech is the backbone of the company. In addition to a proprietary mobile app for agents, through which agents can access paperwork, update listings or conduct searches, Urban Compass uses targeted advertising online and in print. In terms of lead generation, the “contact agent” button on Urban Compass’ website matches up clients with agents based on transaction history, neighborhood and product expertise. Data is also a big part of Urban Compass’ technology focus, and to that end, the firm’s engineers have looked at consumer searches to make non-obvious correlations. That’s enabled agents to steer clients toward expanded searches, a key strategy given the market’s tight inventory. “A lot of people say, if you’re looking at the West Village, you should look in Greenwich Village, they’re neighboring,” said Alex Stern, Urban Compass’ head of product, citing one common way of expanding a search. But he said Urban Compass’ technology connects neighborhoods based on other factors, such as similar building makeup and neighborhood amenities, so therefore someone looking on the Upper West Side may also be inclined to buy an apartment on the Upper East Side or in Park Slope — a less obvious alternative than, say, Lincoln Square or Morningside Heights. Other firms use cloud-based technology to facilitate communication between agents and clients. EXR Group — a 20-agent firm in Brooklyn — offers EXR Hive, a cloud-based software that acts as a personal assistant, coordinates data

48 November 2014 www.TheRealDeal.com

Some firms offer chauffeur service to their brokers. The American Express Centurion Card, known as the black card, is a popular perk at Platinum Properties.

port, and DJK also has a full-time web content specialist who helps agents create graphics or online content. In the past year, another firm, DSA, has encouraged clients to use Zufog.com, a site that lets them leave anonymous reviews of their experience with the 50-person firm.

Training

ven brokers at firms with top technology underscored the importance of training. Bold New York, with 35 agents, has a 10-day new agent training program that’s split between the field and classroom. The firm also has a monthly sales seminar. At Keller Williams NYC, led by CEO Eric Barron, about half of agents participate in frequently-offered courses, including Ignite, a training program, as well as a prospecting class, business planning clinic and class in global property specialization. “I have worked at a couple of other brokerages,” said one agent. “The training is unmatched. I am truly an independent business owner.” While David Schlamm’s City Connections doesn’t offer formal training, the firm does give out $1,000 scholarships for agents who want to take classes or get coaching. In a similar vein, DJK Residential — which has an in-house training program — pays for its agents to attend Broker Heaven courses. William Raveis, which recently opened an office in New York City, offers online and live classes at various locations on an ongoing basis. “Whatever the agent needs to be educated they receive,” the firm said in its submitted survey. “Education is first and foremost.”

Listing database

W Platinum Properties agents were recently treated to a trip to Dubai, above.

City Connections holds parties on 115-foot yachts for its team.

Douglas Elliman organizes a four-day retreat for brokers in Atlantic City, above. Blu Realty Group rewards agents with sessions with a personal trainer and gym memberships. Monthly wine tastings are another perk at the growing firm.

points and offers real-time data. Keller Williams NYC started using Contactually, an app that helps agents manage communications with clients by reminding

them to send follow up messages, among other features. With its tech offerings, DJK Residential and Spire Group have 24/7 tech sup-

ith no central Multiple Listing Service, New York firms have built their own databases, in addition to having agents rely on Online Residential (OLR), Zillow, StreetEasy, PropertyShark and the Real Estate Board of New York’s listing service (RLS). For example, Town agents have access to “Townhouse,” the firm’s in-house proprietary database, as well as PropertyShark, OLR and another listings database, Jaguar. In fact, by offering both OLR and Jaguar, generally competitors, Town said it offers agents a “competitive advantage.” Nest Seekers International agents have access to OLR, PropertyShark, Nestio — another residential listings database — and the firm’s proprietary database, which shows “almost real-time vacancies.” The city’s two largest brokerages, Douglas Elliman and Corcoran, both of which declined to fill out the survey, also have their own databases. Corcoran, led by Pam Liebman, has a database called Taxi, which has been

www.TheRealDeal.com July 2014 53

Inside praised for being “easy to use, very user-friendly” and with more listings than OLR. Elliman’s database, called Limo, offers agents a leg up by virtue of the size of the firm (and by extension, the database). One Elliman agent said she has access to 5,500 other Elliman agents’ listings via the company database, before those listings make their way to StreetEasy and other brokerages. Earlier this year, Citi Habitats rolled out the first phase of a new listings database in conjunction with Corcoran. (Both are subsidiaries of publicly-traded Realogy.) “Our agents can access a myriad of resources, including lease templates, customizable marketing materials and sales and rental market data,” said President Gary Malin. Relationships with landlords and management firms also help. For example, agents at DSA benefit from the firm owning, and being the exclusive broker for, some 160 buildings in the city. EXR’s database marries old-fashioned vacancy info with technology: Its listings tool contains basic information on apartments, and also pulls data from PropertyShark and Yelp to automatically give agents information on things like subway stations and popular restaurants near an apartment. “The best way to move an apartment is to not simply say, ‘Oh, here it is, hope you like it,’ but to be [knowledgeable] on the neighborhood and area,” said managing partner John Le Vine. “So if you walk into an apartment, you can say, ‘There are these big beautiful windows and there’s a great Vietnamese restaurant a block away.’ You’re selling them a home, not an apartment.”

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Robert Reffkin, Urban Compass CEO

Eric Barron, Keller Williams CEO

Citi Habitats President Gary Malin

City Connections’ David Schlamm

Benefits

Commission splits

t’s common practice for agents to jump from one firm to the next for a higher split. For example, Town starts agents at a 50 percent split, and they are bumped up to 55 percent when they have gross commission income of $160,000 to $190,000. The split increases in 5 percent increments until $650,000, when the agent gets a 75 percent split. At Douglas Elliman and Corcoran, meanwhile, agents get a 55 percent split if they have commissions of $135,000 (at Elliman) or $160,000 (at Corcoran). Elliman agents are bumped up to 60 percent at $155,000, 65 percent at $210,000 and 70 percent at $340,000. Corcoran increases the split to 60 percent at $195,000, 65 percent at $250,000 and 70 percent at $395,000. Meanwhile, Miron Properties offers a lower threshold for agents seeking a higher split: Agents with commissions of $350,000 or more get a 70 percent split. A number of firms hit the scene over the past few years offering high splits, aimed at attracting agents. At Rutenberg Realty and City Connections, for example,

all-expenses paid vacation. Blu Realty Group knows real estate can also be stressful, and it rewards agents with three paid sessions with a personal trainer after they’ve been with the company for eight months, and completed at least one sale. The firm also holds twice-monthly wine tastings and weekly breakfasts and lunches. Blu agents with listings over $1.5 million also have use of a private driver. While other firms offer chauffeur service (Keller Williams New York City offers a driver to agents with listings over $2 million), Miron Properties has a corporate membership to the Classic Car Club, and agents have won use of classic cars for the day. Platinum Properties, with 30 agents, offers agents use of the concierge service offered through its American Express Centurion Card, known as the black card. Recently the firm also treated agents to a trip to Dubai. Similarly, Bold agents recently won an all-expense paid trip to Barbados as part of a promotion to increase performance. Keller Williams NYC agents said that a key perk — profit sharing — is a top benefit. Everyone who refers an agent gets a cut of that agent’s profits.

Pam Liebman, Corcoran CEO

DJK Residential managing director Phyllis Pezenik

agents start at a 70 percent split. At Spire, agents pay $495 monthly and get 100 percent of the commission they earn. Keller Williams, for its part, starts agents at 70 percent, and bumps them up to 100 percent when they reach $50,000 in gross commissions. A new firm, Suitey, pays agents a monthly salary and offers deal-based bonuses.

ness growth and plans to scale. “We’re into career building,” said Nina LaBarre, an agent at Bold. At Douglas Elliman, brokers see the massive brand as a powerful tool in itself, of course. “Douglas Elliman is a powerhouse, and [the firm] allows agents to leverage that,” said one Elliman broker. “We team up with [appraisal firm] Miller Samuel, so we have our own market report. So we have first dibs on that.” Melding technology and marketing, Blu Realty Group creates video profiles for its agents to market them to a global audience. Platinum Properties also makes video profiles, and also provides agents with a personalized, monthly newsletter.

Marketing/ advertising support

o help agents grow their businesses, brokerages provide advertising and marketing support to varying degrees. William Raveis takes a personal approach — its marketing department includes a design team that creates brands, logos and messaging for agents. Similarly, Nest Seekers International offers individualized coaching and marketing plans. At Bold, agents meet with someone from the creative department and management once a quarter to discuss busi-

Extra incentives

ince most agents are independent contractors, many firms entice agents with perks — be it offering use of the company credit card or dangling an

ealth insurance, 401(k) plans and paid vacation time are the kind of benefits that can draw and keep agents. Coldwell Banker The Bellmarc Group is among the brokerages that provide health insurance, once an agent has been with the firm for 90 days. Other firms have corporate wellness programs. Keller Williams, for instance, offers individual plans for health coverage. Town, for its part, reimburses agents for their health insurance and for gym memberships. DJK Residential, which offers partial gym reimbursements, also has a “Vitality Program,” where agents earn points for being healthy and exercising, redeemable for free merchandise or lower insurance rates.

Fees Who likes fees? Not agents. While some of the larger brokerages tack on desk or technology fees in exchange for marketing support, smaller firms may have the edge with their “no fee” policies. “It costs $0 to work at DJK,” the firm said in its survey. Still, fees do serve a purpose. City Connections charges brokers a desk fee, ranging from $200 to $250 monthly, if agents want a permanent desk in the firm’s new office. Located at the Masonic Hall building, the brokerage has 33 windowed work cubicles and eight private offices, conference rooms and lounge. Continued on page 114

www.TheRealDeal.com November 2014 49

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Commercial firms, extras F included

has a so-called “corner office.” Those spots are reserved for conference rooms.

From work culture to splits, attractive companies for ambitious brokers

By Hiten Samtani and E.B. Solomont

ommercial brokers are quite different from their residential counterparts. It takes them longer to crack into the market, they tend to stay at firms longer, and their world is arguably less glamorous — their jobs are less about understanding design, aesthetics and the lifestyles of the 1 percent than about being clued in on market information, deal structuring and a property’s income potential.

Another thing that separates them from their residential peers is, of course, money. At the top of the food chain,

top investment sales brokers such as Eastdil Secured’s Adam Spies and Doug Harmon and CBRE’s Darcy Stacom and Bill Shanahan can make many multiples of the income of their residential counterparts. The same goes for office leasing; though the average New Yorker may never have heard of them, CBRE’s Mary Ann Tighe and JLL’s Scott Panzer are among the most influential and well-paid people in the industry. Commercial brokers also tend to place great weight on which firm can keep them ahead of the curve. Market information and access to technology remain key motivations to choose one firm over another — having a 24-hour lead on a property that is coming to market could mean the difference between a fat commission and walking home empty-handed. Last month, The Real Deal reached out to brokers and representatives of the city’s commercial firms to get insight on one question: What separates one brokerage from another? To do that, we asked more than two dozen major New York City commercial brokerages to complete a survey detailing the perks, benefits, tools and work culture their firms offer. Not all who were contacted responded, but TRD supplemented its survey by asking both market-leading brokers and current and former employees of these firms what they thought. Read on for some of the highlights:

Office facilities

hen GFI Realty Services moved its headquarters to 140 Broadway this spring, the firm snagged office space with panoramic, 360-degree views of the city’s skyline. While not every brokerage can say the same, GFI’s set up — with workstations for 30 brokers and phone booths for private conversations — is in line with the “open floor plan” style a number of brokerages currently employ, including firms like Massey Knakal. Besides open workspaces, a number of companies have dedicated lounge or common areas. Eastern Consolidated’s hybrid layout features a combination of private offices, open areas with desks and multiple conference rooms. Meanwhile, national brokerage Lee & Associates, which also has a mix of offices and cubicles for its 43 agents, has a lounge dubbed the “Living Room,” where long tables and comfortable seating are “meant to encourage informal meetings, brainstorming and collaboration,” the firm wrote in its survey. To give its agents common space, Cushman & Wakefield, with 180 brokers in its Midtown and Downtown offices, has a large “reception hub” that serves as a meeting place for clients and visitors, and the firm’s office at 1290 Avenue of the Americas has two large terraces for events. At Cushman, it’s notable that while senior brokers get their own offices and junior brokers sit at workstations, no one

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Office yoga is among the perks at Lee & Associates.

Skydiving is an annual event for brokers at CPEX. Eastern Consolidated sponsors an annual rafting trip.

Technology or commercial brokers, technology serves as a powerful conduit in dealmaking. “We’re in an information business,” said Eastern Consolidated co-founder and president Daun Paris. “The more efficient [an agent] can be in getting information collaboratively out to one’s colleagues, the more it benefits each broker.” The firm, which gives each broker a computer with two 22-inch monitors, employs a full-time, in-house tech manager. Brokers also have remote access to the firm’s technology, which includes ESRI mapping and a custom-designed customer relationship manager (CRM). At Massey Knakal, headed by Bob Knakal and Paul Massey, a custom sales system called MKSS acts as both CRM and transaction manager — it gives agents direct access to the firm’s research database, which includes 140,000 buildings, 14,000 transactions and $155 billion in sales since 2009. Massey Knakal also offers brokers access to a Bloomberg Terminal, plus sites like PropertyShark, CoStar, LoopNet, and others. A handful of firms have the distinction of offering Salesforce integration; Marcus & Millichap became one of them this past year. On top of Salesforce, agents there have the firm’s own technology at their disposal, including: a property database; iMpact, an automated marketing and proposal tool; and MarketPlace, which provides automated electronic marketing of listings. Cushman & Wakefield, which also uses Salesforce, pairs that with another cloudbased tool, Workday, a proprietary mobile app for human resources and financial management. At HFF, agents have either a laptop or desktop, but if, in addition, they want to bring in their own devices such as phones and tablets, service is covered by the company.

Training

Technology, particularly proprietary apps, is key for commercial brokers. Cresa NY offers free shoe shines.

ommercial brokerages deploy a range of programs — from online classes to mentorships to weekly training meetings — to groom new brokers. At Eastern Consolidated, new agents take a free one-year training program that teaches real estate analysis and research skills, sales and marketing processes and technology. “People are working on commission,” said Paris. “We’re committed to training them in a way to let them most effectively use our platform.” Meanwhile, both GFI and Massey Knakal pair courses with mentoring programs. GFI’s 90-day training class is offered each quarter to new brokers, and new recruits are paired with senior brokers, who also have access to ongoing training.

www.TheRealDeal.com July 2014 53

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Inside RKF takes a slightly different approach to training new brokers: The firm hires new agents as “canvassers” who generate listings, conduct market research and learn about market analysis. “This then helps them transition into junior broker roles,” the firm stated in its survey. RKF also offers a summer internship program for college students that often transitions into a job as a canvasser after graduation. One agent at Newmark Grubb Knight Frank, which did not participate in the survey, said the firm actively mentors new agents. “There is more strategy in hiring junior [associates] and methodically working with them and developing them and exposing them to business and meetings,” than at other firms, said the agent, who previously worked at Cushman & Wakefield. Many firms address training at various stages of the agent’s career: For example, Cushman & Wakefield agents have 300 online courses at their disposal, and specific programs for new and inexperienced brokers. For brokers with less than one year of experience, its “Launch” program covers real estate fundamentals and client-facing skills, and goes over the firm’s services via a combination of instructor-led programs, webinars, online learning and self-directed activities. Meanwhile, the “Emerging Broker Training Program” covers topics like business development, persuasive selling, presentation skills, collaboration, negotiation and team-building. Ariel Property Advisors’ “Master Class” series invites industry professionals to share their experiences, and the firm has weekly training meetings to review best practices with agents.

the

named SiteSolutions. The firm also employs 11 full-time research employees, who update the database’s information each month.

Commission splits

Daun Paris, Eastern Consolidated co-founder

ith a proliferation of proprietary databases, the most powerful ones contain far more than listings. For example, Marcus & Millichap’s MNet is a proprietary inventory- and buyer-tracking system. One member of a team that joined the firm this year said he was “blown away” by the firm’s deal volume and credited agents’ “ability to tap into that resource in real-time in order to find inventory for our clients [and] gain exposure for our properties.” HFF’s database tracks $60 billion worth of transactions, as well as the investment objectives of the largest (and most active) domestic and foreign capital providers. HFF’s nearly 700 employees contribute to the database daily with deal and capital market data. The database’s information includes 25 years of capital markets experience, the firm said in its survey. Massey Knakal’s MKSS houses agents’ databases of properties and owners, and a shared list of investors, banks and tenants. “Agents share notes and data

52 November 2014 www.TheRealDeal.com

hen it comes to commission, top commercial brokers have greater earning potential than their residential counterparts — but commission splits are still key to unlocking that door. Eastern Consolidated agents start at a 50 percent commission split, and they have the opportunity to reach 70 percent before the split is reset at the end of the year. Massey Knakal’s splits range from 50 percent to 65 percent, based on production, and splits also reset at the beginning of the year. Lee & Associates, headed by James Wacht, starts junior associates at 50 percent, while high-producing brokers can achieve a 75 percent split. “Production, mentoring and technical skills” can qualify a broker for a higher split, the firm stated in its submitted survey.

Perks

S James Wacht, president of Lee & Associates

Listings database

Workplace

Paul Massey, CEO of Massey Knakal

Newmark Grubb Knight Frank president Jimmy Kuhn

about owners and properties and have the ability to perform sales and marketing tasks such as the production of comparable sales, cold calls and marketing reports,” according to the firm’s submitted survey. For its part, Cushman & Wakefield has 1,400 buildings in its proprietary database,

kydiving, yoga and cell phones are among the perks offered by some of the city’s top commercial brokerages. And that’s not even the half of it. Massey Knakal offers top producers all-expenses-paid annual vacations — with recent destinations including Puerto Rico and Mexico. For everyone else, the firm regularly gives away free tickets to sporting events and hosts catered lunches for Halloween and Thanksgiving. As for the skydiving? That’s an annual event at CPEX. Rafting? An annual expedition at Eastern Consolidated. Eastern also offers media training, corporate team-building functions, free tickets to industry events and conferences, yoga, golf outings and participation on company-sponsored sports teams. Ariel Property offers catered breakfast twice a week, while Cresa NY offers free shoe shines. Lee & Associates has office yoga, expense accounts to encourage networking and entertaining clients, and office excursions like rock climbing, skiing and poker. One Lee broker said mobile technology, and the ability to work from home or in the field, is a key perk. Once a month, the firm hosts an evening cocktail hour at the office, which is open to all.

Marketing/ advertising support

hile none of the firms surveyed disclosed their ad budgets outright, firms that got high marks all helped agents take a targeted approach to marketing their listings. For example, Marcus & Millichap helps agents market listings via the proprietary MNet listings database, which

matches for-sale properties with specific buyers whose criteria match the listing. Only qualified buyers are targeted with direct marketing campaigns. “For big time presentations, the marketing team does graphic design work the average Joe can’t do to tell a story,” said one Newmark agent. Cresa New York, a 26-agent firm open since 2001, also has an in-house marketing and graphics team that works with each broker. “Each presentation is tailored to the specific situation — we have no ‘cookie-cutter’ presentations,” the firm stated in its survey. It should also be noted that reaching a broader audience isn’t a bad thing. Massey Knakal sends multiple weekly listing e-blasts and markets listings via CoStar and LoopNet, and Eastern Consolidated has a company newsletter, “Streetpulse,” which reaches over 25,000 investors, the firm said. Its “Word of Mouth” blog contains articles written by brokers.

Benefits

n an industry full of independent contractors, several commercial firms stand out with robust benefits packages. Case in point: Cushman & Wakefield’s array of benefits ranging from health to retirement savings. At Cushman, medical benefits are “salary banded,” meaning the firm will provide a greater subsidy for associates in lower brackets. The brokerage also gives agents $500 each year toward a health savings account. Cushman’s vision plan covers new frames every year, while the dental offering includes a plan that’s highly affordable by not providing coverage for major and orthodontic services. The company also offers a 401(k) plan, flex spending, supplemental life insurance, supplemental long-term disability and a legal plan. At ERG Property Advisors, a small firm with 15 agents, the brokerage offers health, dental and vision insurance “by broker option,” the firm stated in its survey. Meanwhile, Massey Knakal covers 50 percent of the cost for agents’ health and dental coverage. HFF offers health, dental, vision and a 401(k) matching plan — and it throws in two weeks’ paid vacation to employees.

Agent retention

sure sign of broker satisfaction can be found in how long employees stay at their jobs. HFF said 75 percent of the senior brokers in its New York office have been with the company for more than a decade. Some 16 percent of the agents joined the firm in the past year. By comparison, 13 percent of RKF’s agents joined in the last year, with 20 out of 54 agents in New York having been with the firm for more than five years. At Eastern Consolidated, some agents have been with the company for 30 years, Continued on page 116

www.TheRealDeal.com February 2013 45

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New Development Brokerage

Flood of new projects shifts fortunes of marketing firms

Corcoran rides wave of residential construction in NYC to retake top spot in ranking

By Rich Bockmann he wave of new developments hitting the market is changing more than just the skyline. It’s also shifting the fortunes of the firms that specialize in planning and selling those projects. This month, TRD surveyed more than a dozen new development firms and compiled a ranking based on the condo and rental projects they launched since the beginning of 2013, as well as those set to come to market through the end of this year. A few years ago, as supply withered following the downturn that put many projects on hold and tanked others altogether, new development marketers found themselves squeezed for business. Some even had to lay off staff. But things began picking up last year. In 2013, there were 2,384 condos launched in Manhattan — just seven units shy of the numbers from the three previous years combined, according to figures compiled by the Corcoran Group. Corcoran projects 2014 will end with about 3,100 units launched in the borough. The company expects that figure to double next year, and it is one of the firms seeing the biggest gains as a result. Yet the wide availability can be a double-edged sword: More business is enabling established firms to expand their portfolios, but it’s also luring new ones into the game. It also means more choices for buyers, making it more challenging to seal deals. “The landscape for new development has certainly changed a bit,” Halstead Property President Stephen Kliegerman said. “There are more jobs than there were back in 2011. There are new players in the field.” Among the firms nipping at the heels of more established players are upstart brokerage Urban Compass, which launched a new development arm this year, according to a ranking of new development marketers conducted by The Real Deal. But with such a large amount of supply on the market, buyers have more options, and the firms are finding the environment increasingly competitive. “For the first time in a long time, there are a lot of opportunities out there for buyers,” said Corcoran Sunshine President Kelly Kennedy Mack, adding the competition for buyers means firms have to up their game. “You have to fight a little

The leaders of established firms, and the ones nipping at their heels, from left to right: Kelly Kennedy of Corcoran Sunshine, Nancy Packes of Nancy Packes Inc., Roy Kim of Urban Compass and Shlomi Reuveni of Town Residential.

Top new development marketing firms Rank

Firm

# of Projects

# of units

Corcoran + Corcoran Sunshine

2,722

Halstead Property Development Marketing

2,241

2,121

Douglas Elliman Development Marketing Nancy Packes Inc.

Aptsandlofts.com

1,753 1,749

Town Residential

1,590

The Marketing Directors

897

MNS

866

Stribling Marketing Associates

366

Rose Associates

329

Modern Spaces

307

Citi Habitats

297

CORE Group Marketing

285

Cantor-Pecorella

242

Nest Seekers Development Marketing

156

Source: Firms and The Real Deal research. The analysis examined units marketed in NYC new residential developments that commenced sales or leasing between January 2013 and November 2014, and those scheduled to come to market before the end of 2014. The data does not include new developments marketed in-house by developers. Primary rankings are based on number of units; firms were then ranked by number of projects.

With such a large amount of supply on the market, firms are finding the environment increasingly competitive. bit harder to get the message out there.”

The leaders The historically dominant Corcoran Group, along with its new development arm Corcoran Sunshine, came out the clear winner in the rankings, with 2,722 units across 61 projects, including banner developments such as Extell’s One Riverside Park and the Rudin Family’s Greenwich Lane.

Corcoran regained its top ranking after slipping to second place in number of units in TRD’s last ranking in 2011, when it was edged out by sister company, Citi Habitats. The boom at Corcoran Sunshine is a far cry from five years ago, when the company had to cut about 100 employees due to a lack of work. Last year, the firm struck a huge deal with the Related Companies to market condos in the developer’s pipeline, and

with projects such as Hudson Yards and the Zaha Hadid-designed 520 West 28th Street overlooking the High Line on the horizon, Corcoran is gearing up to take on the workload. “We’re in a place now where we are hiring. We are expanding to meet the needs of our expanding portfolio,” Mack said. “Still, we’re doing so slowly, intelligently. We certainly don’t want to ever be in the place we were in 2009.”

www.TheRealDeal.com November 2014 55

New Development Brokerage Coming in second place behind Corcoran is Halstead Property Development Marketing, with 2,241 units at 40 projects. That’s up from the No. 6 spot in 2011. Halstead was buoyed by large projects including the 554-unit rental Gotham West in Hell’s Kitchen and 388 Bridge Street, the Stahl Organization’s 53-story tower that is Brooklyn’s tallest residential building. Kliegerman said the firm hired three new project managers to keep up with demand and is pumping resources into its research department. One of the challenges in a rising market, he said, is tempering his clients’ wide eyes. “Clients have higher expectations and usually want to raise prices,” he explained. “Managing a client’s expectations in a bull market can be very difficult.” Douglas Elliman Development Marketing took third place, on the backs of developments such as Macklowe Properties’ 432 Park Avenue, the personal-pool equipped Soori High Line at 522 West 29th Street, and Stella Tower, the follow-up by JDS Development Group and Property Markets Group’s Walker Tower in Chelsea. The company has 2,121 units across 35 projects.

Greenwich, Richard Cantor of Cantor-Pecorella, No. 14 on TRD’s list, said he turned the sales gallery into a museum showcasing the Tribeca neighborhood’s history. “That has proved to be quite important when marketing such a high-end property,” he said. Prices in the building range from $7.5 million to $20.5 million.

Losing ground Douglas Elliman Development Marketing is promoting Macklowe Properties’ 432 Park Avenue.

Extell’s One Riverside Park, left, and Zaha Hadid’s 520 West 28th Street, right, both marketed by Corcoran.

Standing out from the pack “I’d say what we’re seeing now is more inventory,” said Steve Rutter, director of Stribling Marketing Associates. “Buyers have more to choose from.” With so much more product on the market, marketers said it takes extra effort to distinguish their projects. That effort can start in the early stages of development, like making the decision to bring a pioneering project to a neighborhood or attaching a high-profile name to a building. In the case of 234 East 23rd Street, Rutter said, the team at Stribling suggested the Naftali Group hire architect Peter Pennoyer, a name more associated with uptown townhouses. The move was “something to differentiate themselves from the pack,” he said. Stribling came in ninth place with 366 units across 11 projects, including Cary Tamarkin’s concrete box at 508 West 24th Street and the 65-story sculpted glass tower designed by Skidmore, Owings and Merrill at 252 East 57th Street. Corcoran Sunshine’s Mack said some of the ways a marketer can push a stalled sales effort include hosting more events and pumping bigger bucks into publicity and advertising campaigns. “When you’re the only sort of game in town, people don’t have options,” Mack said. She added that in a more crowded market, “Sometimes you have to take a more aggressive stance in terms of promoting yourself and your message and explain what you have to offer.” At the Cetra-Ruddy designed 443

56 November 2014 www.TheRealDeal.com

The Strata at Mercedes House, a Nancy Packes Inc. project, left. Stribling’s 234 East 23rd Street, right.

“Managing a client’s [high] expectations in a bull market can be very difficult.” Stephen Kliegerman, Halstead Property

Elliman’s Soori High Line at 522 West 29th Street, left. Halstead’s 388 Bridge Street in Brooklyn, right.

Corcoran Sunshine dominated the list with projects like The Greenwich Lane, above.

When TRD last did its ranking three years ago, Corcoran Sunshine’s usual preeminence had been edged out by sister company Citi Habitats, which capitalized on a market favoring firms that specialized in rentals. But Citi Habitat’s fortunes soon turned, when the head of its new development department, Cliff Finn, decamped for Douglas Elliman and took a team of leaders with him. “We didn’t have a new development team for a year,” said Jodi Stasse, who came on as Finn’s replacement last year. Citi Habitats tumbled to the 12th spot on the list this year with just two projects: Sheldon Solow’s 209-unit Two Sutton Place North and the 88-unit No. 3 Packard Square in Long Island City. After Finn left, Citi Habitats partnered with Corcoran Sunshine on its remaining projects, and the two companies are still sharing resources in their research and planning departments. Brown Harris Stevens also went through a shake-up, when senior managing director Shlomi Reuveni, head of the company’s new development marketing arm, decamped for Town Residential in April. A spokesperson for BHS said the company was in the process of selling out the few remaining homes launched under Reuveni. In February, the company launched SR Capital’s Norman Foster-designed 551 West 21st Street, where the three-bedroom penthouse equipped with a 61-foot rooftop swimming pool is listed for $50 million. That one 44-unit project had BHS ranked 17th this year. Reuveni’s move to Town helped that firm, founded in 2010, debut at sixth on this year’s list, with 1,590 units spread across nine projects. Town handled leasing on three large Financial District rental properties developed by DTH Capital and the late Ronny Bruckner, with another 200 units set to launch early next year at 20 Exchange Place. Town’s condo projects include the Ismael Leyva-designed The Charles on the Upper East Side, where the three penthouses are listed as in-contract on StreetEasy for a combined $96.6 million. Rose Associates is another company that slipped, as the benefits of the saturation of rental properties a few years ago waned. The marketing arm of the storied development family has just two Continued on page 116

www.TheRealDeal.com November 2014 37

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JDS Development and Property Markets Group are building a tall, thin tower at 111 West 57th Street, with 50,000 square feet of retail at street level.

Extell Development has yet to lease the 5,300 square feet of retail at the base of One57.

Where SUPERtowers riSE, retail also getting a lift Buzzed-about restaurants, stores joining dowdy strip as 57th Street goes upscale

Durst’s “Pyramid” at 625 57th Street will bring 55,000 square feet of retail to the now underutilized western end of the street.

W By C. J. Hughes

ith developers seemingly locked in a contest to build the tallest condo tower on 57th Street, many eyes have focused upward. But the busy 15-block stretch of Midtown, which for much of the 20th century was known for art galleries, is experiencing notable changes on the sidewalk level, too. In the street’s core retail district, from Lexington to Eighth Avenues, developers have snapped up retail spaces for record prices, chefs have created a trendy restaurant row and storefronts are turning over for the first time in decades. What’s more, blocks outside the core may also become shopping destinations soon. The glass pyramid being built by the Durst Organization at No. 625, at the street’s relatively desolate western end, is slated to have 55,000 square feet of retail wrapping much of the base of the 709unit rental tower. No commercial leases are yet signed in the building, which opens in January 2016, a Durst spokesman said. The brokerage firm Lee and Associates is marketing the space. Also yet to find tenants are the retail spaces at One57, the 90-story condo that’s drawn recent attention to the thoroughfare with its near-$100 million apartments, and helped earn it the nickname “Billionaire’s Row.” Extell

60 November 2014 www.TheRealDeal.com

Macklowe Properties purchased the three retail condo units at 432 Park Avenue during the summer.

Development is incorporating about 5,300 square feet of retail into the tower’s base, where a 25-story, 210-room Park Hyatt hotel opened in August. Isaacs and Company, which is handling leasing, did not return a call for comment. To be sure, parts of 57th Street can still seem downscale, if not downright shabby. No. 45, near Avenue of the Americas, is home to a Sleepy’s mattress store. A gift shop selling T-shirts is near Seventh. And the same chain stores that dot corners throughout the city — pharmacies and banks — are prevalent, along with the handful of galleries that haven’t yet decamped for West Chelsea. Meanwhile, average asking rents on the strip, about $500 a square foot, aren’t close to the $3,000 being listed on nearby Fifth Avenue, brokers say. But some spaces are now being marketed for $2,000 a foot. And sources suggest that when luxury department store Nordstrom opens in 2018 (in another new high-rise at No. 225), it’s not inconceivable that parts of 57th could reach parity with posh Fifth. “I don’t see change happening overnight,” said Robin Abrams, an executive vice president at the Lansco Corp., who focuses on retail leasing but currently is not marketing any spaces on 57th Street. But, she continued, “that whole corridor will be more upscale, as fashion-oriented tenancies consider sites they never had before.” Below, The Real Deal examines the most notable changes on a transitional street, from east to west:

123-135 East 57th Street For 57th Street to become less disjointed, a row of empty retail spaces along the north side of the street, between Lexington and Park Avenues, should be filled with tenants, brokers say. If upscale stores can be installed there, they add, shoppers might funnel from nearby Bloomingdale’s department store, on Lexington, to points west. Many of the spaces are owned by Cohen Brothers Realty Corp., including five berths — with the addresses 123, 125, 127, 131 and 135 — at the base of 135 East 57th Street, a granite-clad office high-rise with a circular plaza. All told, the spaces encompass 72,000 square feet, across multiple levels, and are also being marketed as a single store “in the heart of the Bloomingdale’s trade area,” according to the listing. A luxury retailer leasing there would be a sign of upscaling. That’s because Daffy’s, the now defunct discount clothing store, had most of the space from 1994 to 2012, and was paying about $40 a foot, or $2 million a year, according to a TRD report. Cohen and Daffy’s tangled in court, about what Daffy’s said were strong-arm tactics to evict it, before the retailer filed for bankruptcy in 2012 and closed. It’s unclear what the space would lease for today. The asking rent was unavailable in the public listing, and Alan Schmerzler, a Cushman & Wakefield agent who is marketing the space, did not return a call seeking comment. Charles Cohen, the chief executive of his firm, also did not return our call.

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57th Street Transformation But the rents would presumably be far higher than the $80 a square foot that it supposedly could fetch in 2010, according to court documents. Another chunk on the block controlled by Cohen is the 43,000 square feet of retail space at 465 Park Avenue, the prewar 1926 residential co-op known as the Ritz Tower. It used to contain a Borders bookstore. Cohen bought the 39,000-square-foot space from Shorenstein Properties in 2009 for $22 million. Leasing this space has been somewhat contentious, too. A surgery group was supposed to rent 13,300 square feet at $1 million a year, but then backed out, prompting Cohen to sue it for $25 million last winter, according to news reports. The space, which also has the address 111 East 57th, is still empty, but building permits line a window there. 432 Park Avenue Another property that brokers say could connect the hohum east side of 57th Street with its ritzier western half is the commercial space at this neck-craning 104-unit condo, which at 1,396 feet and 96 stories topped out last month as the tallest residential building in the Western Hemisphere. The 75,000 square feet of retail at the building, which is being developed by Macklowe Properties and the CIM Group, will include more than 80 feet along 57th. Macklowe owns the space, which is made up of three condo units; he purchased it for about $6,000 a square foot during the summer. Macklowe may have bigger plans for stores, too. A 33-story tower next door, 450 Park Avenue, that Oxford Properties Group and Crown Acquisitions bought in the spring for $546 million, has 35,000 square feet of sidewalklevel retail of its own. As TRD reported in May, Macklowe has had talks with those landlords about buying their retail space, to create a larger berth. A message left with the project’s marketing team was not returned. CIM declined to comment. Abrams, the Lansco broker, believes that $1,500 a square foot would not be impossible at the site: She noted that a corner berth at 575 Madison, at East 57th, a slightly higher traffic area, is now being marketed for $1,900 a foot. Its current tenant is Geox, an Italian shoe chain. “I think it’s challenging because it’s a great retail corridor, but it’s not quite there yet,” she said. 6 East 57th Street Among the large blocks of space that are turning over on the street is this one: Niketown, the sneaker and sportswear purveyor that has been in place there since the 1980s. Though Nike’s lease with landlord the Trump Organization is not up until 2017 (and it could extend that lease for three five-year increments), the company has been looking at other storefronts, brokers say. Connected to the shopping mall portion of Trump Tower, as well as the bamboo-lined atrium at adjacent 590 Madison Avenue, Niketown, with 25,000 square feet across five floors, was packed on a recent afternoon. But brokers say that the company wants to be in an even more tourist-friendly part of Midtown, which is why last winter it was exploring a 41,000-square-foot berth at 640 Fifth Avenue, a Vornado Realty Trust building where clothing retailer H&M is today. A spokeswoman for the Trump Organization declined to comment. 16 West 57th Street Sensing the street’s turnaround, more developers seem to be starting to flock in. In August, Extell sold this empty lot to an LLC that city records identify as SM Consultant. 62 November 2014 www.TheRealDeal.com

The price was a hefty $95 million. The Daily News identified the buyer as the Fasano family of Brazil, which owns hotels and restaurants; the 100,000-square-foot tower that can be built there will likely be a hotel-condo, presumably with a retail or restaurant component. The previous building on the site was demolished in 2012. As of mid-October, no new building permits had been filed. A message left for Sergio Millerman of the BrazilianAmerican Chamber of Commerce in New York, who has spoken for the family in the past, was not returned. Brokers, meanwhile, say the street could in a few years command more than $1,000 a foot.

The retail spaces at 123-135 East 57th Street are largely empty right now.

41 West 57th Street On a thoroughfare whose best-known restaurant for years might have been the Russian Tea Room (No. 150), a handful of buzzy restaurants opened recently. The best-known may be Betony, which debuted at 41 West 57th in spring 2013. The airy 7,200-square-foot two-level space, which seats 120, serves lobster, dry-aged beef, foie gras and kale — and critics have swooned. In many ways, the arrival of its short-lived predecessor, Brasserie Pushkin, in 2012 helped usher the street’s transformation from dowdy to more fancy. But Steve Rappaport, a broker with Sinvin Real Estate who brought Pushkin to the building, said owner Andrey Dellos has a 15-year lease at “less than $500 a foot.” He did say, though, that the makeover of the area is not surprising. “If there is a certain clientele living there, retail will eventually service it,” he said. “That’s what is happening now.” Along those lines, the retail space containing a branch of Strawberry, the apparel chain, is now on the market, as another longtime presence turns over. Set back in a four-story low-rise at No. 49, the groundfloor Strawberry slot is now on the market for $325 a square foot for a 7-year term, brokers say. A call left with Andy Ackerman, a listing agent for owner Vornado Realty Trust, was not returned.

The Niketown at 6 East 57th Street is expected to move.

Developer Joe Sitt reached a deal to purchase 220 West 57th Street last year.

Betony at 41 West 57th Street is among a new crop of restaurants.

The Quin Hotel opened last fall at 101 West 57th Street.

101 West 57th Street This bustling corner, at the Avenue of the Americas, perhaps best epitomizes 57th’s new look. For decades, the plain-jane brick 1929 building on the northwestern corner was home to the Buckingham Hotel. Popular with artists, its guests over the years reportedly included Georgia O’Keeffe, and opera stars Giuseppe De Luca and Giovanni Martinelli. But in 2010, a partnership including Danny Errico, the founder of Equinox gyms, sold the aged 100-room property to UBS Realty Investors of Hartford, Connecticut, for $60 million, according to city records. After a two-year renovation, the property was then converted to the trendy 208-room Quin Hotel New York, which opened last fall. On nightstands, touch-screen tablets control music, lights and air-conditioning. A similarly striking transformation took place downstairs. The high-ceilinged 16,000-square-foot retail space there housed Wolf ’s Deli for 25 years, until 1996, when the deli left after a rent dispute, according to news reports. Short-term pop-up shops followed. As of last winter, though, the space has boasted the Wayfarer, a splashy new food purveyor with tufted banquettes where an entrée of Maine scallops is $35. Not to be outdone, Quality Italian, an offshoot of the local steakhouse Quality Meats, has taken a two-floor, 11,300-square-foot window-lined berth across the street, at 57 West 57th Street, a 20-story prewar office building Continued on page 118

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10/27/14 4:23 PM

High-profile pros explain why they left Corcoran Top producers decamp for other firms, seeking opportunities to branch out in new directions By E.B. Solomont mid increasing competition among brokerages, the Corcoran Group lost a number of high-profile agents to rival firms in recent months. Among the most notable departures, Fabienne Lecole jumped to William Raveis’ new office in New York City, which is headed by real estate veterans Kathy Braddock and Paul Purcell. In September, the five-person LaChance Team left Corcoran for Urban

Compass, while top broker Lauren Muss decamped to Douglas Elliman. “It was a very hard decision. I was the poster girl for Corcoran,” said Muss, who closed over $1 billion in sales in her career. She said she was eager to work on new development marketing, which at Corcoran is mostly handled by the Corcoran Sunshine Marketing Group. Corcoran did not respond to a request for comment.

The firm remains the second-largest brokerage in the city, with nearly 1,190 agents in Man-

among the firm’s top 2 percent of producers in 2013, said she was acutely aware of her independent

“Every day I had a reminder that my business comes from myself.” Fabienne Lecole hattan, up 9 percent from last year, according to The Real Deal’s annual ranking of top brokerages. Nonetheless, Lecole, who joined Corcoran in 2001 and was

contractor status. “Every day I had a reminder that my business comes from myself,” she said. At William Raveis, Lecole said she will have a team so that

she can focus on pitching clients — something she did not have at Corcoran. She’ll also have mentors in Braddock and Purcell, who already helped her develop a long-term marketing strategy. “As much as I love Corcoran, we are about 1,800 brokers,” Lecole said. “It’s not the same equation.” Debra LaChance said Urban Compass offered her and her team the chance to advance their careers. “This was the opportunity for me to take a next step,” said LaChance, who will be managing director of boutique develop-

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ment at Urban Compass. Other high-profile departures this year include Corcoran veteran Bill Cunningham, an executive manager director at the firm, who was tapped in May to head Trump International Realty. In addition, Brennan Zahler left Corcoran to run leasing at Town Residential’s Fifth Avenue office. And in April, Richard Nassimi, a former head of sales at the W Downtown and at the Cipriani Club Residences at 55 Wall Street, exited Corcoran to start his own firm, The Nassimi Group. Changes in the market have also prompted some of the defections. Lecole noted that the inventory crunch has intensified competition to get deals done. TRD

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South Florida

South Florida’s sizzling real estate market, and its moguls, shine as more than 4,000 turn out for TRD showcase Forum panelists discuss topics ranging from the impact of rising constructions costs on new development to Miami’s growing global influence on design

Speaking on the developers panel about the continuing rise of Miami’s real estate prices, The Peebles Corporation CEO Don Peebles said “the buyers setting the prices are New Yorkers…They are not bargain shoppers.” From left: Richard LeFrak, chairman of the LeFrak Organization; Peebles; Ron Krongold, CEO of Gold Krown Financial; Edgardo Defortuna, president of Fortune International Group; Nitin Motwani, managing director at Miami Worldcenter Group; and Stephen Owens, president of Swire Properties.

The Moore Building in Miami’s Design District was packed from top to bottom for TRD’s showcase.

By Heather Grossmann oday’s titans of real estate joined a crowd of more than 4,000 industry professionals at The Real Deal’s annual South Florida Real Estate Forum & Showcase last month at the Moore Building in Miami’s Design District. Luminaries including Richard LeFrak, whom fellow panelist

Don Peebles described as the “Warren Buffett of real estate,” spoke to the standing-room-only crowd about the most pressing issues facing the market in a series of panels during the all-day event. The heavy-hitters touched on topics ranging from the impact of rising constructions costs on new development to Miami’s growing global

Jack Paget and Micheal Newman

influence on design. The networking flowed throughout the packed four-story space as attendees took in the 30-plus new developments on display. LeFrak joked that the huge turnout would have made it impossible for him to find parking, had he not owned a nearby property. In the evening, a select group of VIPs came to the Moore Building for a post-event reception. Guests included One Sotheby’s International Realty sports and entertainment division managing director Ben Moss and tennis star and

Eric Kalis, TRD South Florida bureau chief

V Starr Interiors owner Venus Williams. From left: Ryan Shear, principal at Property Markets Group; Veronica Escobedo, director of marketing at International Sales Group; and Philip Spiegelman, principal at International Sales Group. Peter Zalewski, TRD columnist and Condo Vultures founder.

On the SOUTH FLORIDA MARKET:

“What woke me up is when I saw the aggressive behavior of foreign buyers in Miami... I saw an opportunity to pick up additional assets.” Richard Lefrak, Lefrak organization

68 November 2014 www.TheRealDeal.com

Amir Korangy, TRD publisher

PHOTOGRAPHY FOR THE REAL DEAL BY JOSE LARROTTA

South Florida A hot topic of discussion at the brokers panel was the exit of Russian buyers from the market and the subsequent influx of New Yorkers and Californians looking to buy luxury homes. “Right around the time the United States imposed economic sanctions on Russia over its actions in the Ukraine, Russian sales dropped off the cliff,” Craig Studnicky, principal at International Sales Group said. From left: Jay Parker, CEO of Douglas Elliman Florida; Nelson Gonzalez, senior vice president at EWM Realtors; Tony Cho, president and CEO of Metro 1; Alicia Cervera, managing partner at Cervera Real Estate; Jill Eber, broker at The Jills, Coldwell Banker; and Studnicky.

TRD’s Chris Cuomo (right) and guest

From left: Ivana Rashid, group leader at L’Oréal; Karim Rashid, founder of Karim Rashid Inc.; Sonia Figueroa, senior vice president at The Related Group

On FOREIGN INVESTMENT IN MIAMI:

“There is significant interest from China to get into Miami... Once it starts, it will be quite robust and opportunistic.” JAY PARKER, DOUGLAS ELLIMAN FLORIDA

Chad Oppenheim, principal of Oppenheim Architecture + Design

From left: Selene Arvesu; Michelle Minagorri; and Christian Tupper

From left: TRD’s Yoav Barilan; tennis star Venus Williams; One Sotheby’s Ben Moss ; and TRD’s Ross Fox.

From left: Isabelle Leon; Vanessa Ballestas and Irina Tretiakova

From left: Daniel De La Vega; Jennifer Santana; Kayla Verera; and Reginald Fairchild

Steven Gurowitz, CEO of Interiors by Steven G. It was a full house as real estate’s power players flocked to the panel discussions.

The designer and developers behind Metropica. From left: John Hitchcox, co-founder of Yoo; Scott L. Leventhal, co-founder of The Trillist Companies; Joseph Kavana, co-founder of The Trillist Companies; Jordan Kavana, chief operating officer of K Group Holdings; and Michel Besso, financial director of K Group Holdings.

On Miami as the new trendsetter:

“Miami is at the forefront of design… We just did our first project in Asbury Park, N.J. The client asked us to give them something from Miami.” Chad Oppenheim, Oppenheim Architecture + Design

70 November 2014 www.TheRealDeal.com

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t: 212.381.3279 gepstein@halstead.com

t: 212.381.3287 lpenny@halstead.com

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To confidentially inquire about a career at Halstead Property email careers@halstead.com

Investment Properties

$elling the outer boroughs A growing block of foreign investors are buying where they wouldn’t look before

By Chris Cameron ews about billionaires from Russia, China, Brazil and other lands dropping tens of millions on Midtown trophy homes may generate yawns these days. But the industry is waking up to the massive sums from overseas pouring into New York City real estate on the building and portfolio level. Much of that money is finding a home in what just a few years ago was considered the far reaches of the city: Brooklyn and Queens. Foreigners invested more than $600 million in outer-borough real estate through the first half of the year, the most ever, according to data from Real Capital Analytics. Brooklyn received the vast majority of that speculation. That figure represents a significant turnaround. New York City newcomers have been slower to back residential and commercial developments in the outer boroughs than they have been to embrace the central city. And for good rea-

72 November 2014 www.TheRealDeal.com

son, some industry bigwigs said. In a recent interview with The Real Deal, Sean Ludwick, the BlackHouse Development co-founder and principal, said that on an almost daily basis he lunches with Asian investors hungry to bite off a piece of Manhattan. But when it comes to the boroughs, those investors often pass. “It’s easy to find investors abroad for Manhattan, less so for Brooklyn, the Bronx and Queens. But those areas have great fundamentals,” Ludwick said. Expanding on his comment, Ludwick said that Manhattan is simply a safer bet, economically and culturally, for foreigners, especially now that price differentials between Manhattan, and Brooklyn and Queens have narrowed. “Manhattan is simply the best-quality product for foreigners,” Ludwick said. He argued that wealthy foreigners would rather spend more “to live in the nexus of the city,” and said that they are attracted to the scarcity of the Manhattan market, which keeps prices stable or growing.

Moreover, Brooklyn and Queens tend to be inwardly oriented, “which is often lost on a foreigner.” And despite both boroughs’ rapid growth, those basic facts are not likely to change, he contended. “Williamsburg now has some of the best restaurants in the city, but that is lost on someone who is looking at Google Maps from Shanghai, or Luxembourg,” Ludwick said. Not everyone in the industry agrees, however. With that in mind, TRD took a look at where the foreign money is flowing in Brooklyn and Queens, and what challenges those rapidly changing boroughs still face in the global marketplace.

Appeal grows in Brooklyn These days, average rents in Brooklyn are basically at Manhattan levels, and there seems to be no ceiling in sight for Brooklyn home prices. Moreover, so-called creative firms have smiled on the borough, moving their laid-back offices to super-trendy neighborhoods like Dumbo,

Williamsburg and Greenpoint. The world’s hipsters wear Nets T-shirts, dine at Williamsburg-themed restaurants, and even smoke Brooklyn-brand cigarettes, at least in Western Europe. No question, Brooklyn is an international brand with clout, and some foreign property investors have taken notice. Most notably, the Shanghai-based, government-backed Greenland Group bought a 70 percent stake in the residential portion of Forest City Ratner’s Atlantic Yards project — now rebranded Pacific Park Brooklyn — for $200 million in December. Perhaps a sign of just how established the borough has become in the minds of some world investors, Greenland passed up Manhattan, making the buy its first New York City venture. However, it certainly won’t be the firm’s last, with the recent announcement that it plans to pump as much as $8 billion into new projects overseas this year — largely projects in the U.S.

www.TheRealDeal.com February 2013 45

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Investment Properties “These days, I don’t really have a problem attracting foreign investors to Brooklyn,” maintained Adam Hess, a partner and senior vice president in charge of TerraCRG’s Multifamily Investment Sales Division. He recently sold a six-unit building at 401 12th Street in Park Slope to a private Japanese investor for $4 million. “Foreign investors are coming to us unprompted,” he added. To the north, the formerly bohemian enclave of Williamsburg has gone the way of Paris’ Sixth Arrondissement, and has become the epicenter of outer-borough investment for foreign interests. The lure of the much-touted neighborhood seems almost irresistible for some wealthy Australian, Canadian, Chinese, European, and South American second- or third-homebuyers, brokers said. Warner Lewis, a Halstead broker, said that just a few years ago, it was significantly harder to attract affluent foreigners to Brooklyn. “I moved to the Edge [a waterfront condo tower in Williamsburg] in 2011,” Lewis said. “About six months later, I remember that an Italian investor came over with his broker and he said, ‘I looked up Williamsburg. It’s in Virginia. What am I doing here?’” But, Lewis continued, “Just 12 months after my encounter with the Italian, I never heard anyone question what Williamsburg was again.” Still, to some true outsiders, the pitch to invest — including buying a pied-aterre — outside the TV-show Manhattan of “Friends” and “Sex and the City” is a hard sell. “A lot of the deals that we have seen in Brooklyn from foreign investors are from those who already have a cousin, friend, son or daughter living there,” Lewis said. “They tell their families how great it is, and that becomes their entrée into the market.” Another disadvantage the borough faces is its housing stock, which largely consists of single-family rowhouses and rentals. In general, investors prefer to live in condo buildings, because of the luxury amenities and the ease with which they can be rented out or resold, brokers said. But that is a problem that developers, including sophisticated international firms, are tackling. Among the spate of condo projects underway, the Oosten, for example, a Chinese-backed 216-unit residential development at 429 Kent Avenue, between South Eighth and South Ninth Streets, is scheduled to open in 2016. The project is Xin Development Group International’s American debut — at least for ground-up development. The firm and its partners invested some $250 million into the complex, which will feature a mix of apartments and townhouses.

74 November 2014 www.TheRealDeal.com

“These days Williamsburg is looking like as safe of a place to store your money as Manhattan is,” Lewis said. “Plus, room for growth means good upside potential.” Yet even they admit that, “if it is 2,000 square feet in the West Village, versus 2,000 square feet in Williamsburg, or an equivalent product, people are going to choose the West Village.”

Queens: the new Brooklyn Even moreso than in Brooklyn, Queens, with its vast immigrant communities, attracts foreign investors through over-

Island City. At the time, it was the most ever paid for a condo in Queens. Experts say that they expect to see many more similar deals with internationals in that area, because of its improving housing stock and proximity to Manhattan. In the third quarter of the year, the average price of a luxury home in Queens leapt more than 18 percent from last year, to $1.11 million, according to a report from Douglas Elliman. However, with prices at record levels in Manhattan and Brooklyn, many in

“Queens neighborhoods are still less notable, and buyers just aren’t as familiar with the area as they are with Manhattan and Brooklyn,” Kliegerman said. What Queens does have going for it is affordability, with average home prices at roughly half those of Manhattan. However, soaring land prices may soon hamper new development from foreign interests, according to Ludwick. “The other day someone quoted me $300 a square foot for a piece of land in Long Island City,” Ludwick said. “But you can go over and buy land in Manhattan for $500 a square foot. Why wouldn’t you spend a little more and build in Manhattan?”

Manhattan is still king At least for now, Manhattan remains the hub of international commercial and residential investment, of course. Overseas investors of all nationalities invested some $5.5 billion into Manhattan office towers in 2013, according to a report from Colliers International. And although fair-housing laws make it difficult to say exactly how much money forLeft: Outer borough investments are accelerating, but Manhattan is still king for projects like 610 Lexington Avenue, eign investors have dropped a 61-story condo-hotel tower being built by China Vanke, China’s largest residential developer, with Aby Rosen’s RFR on residential properties in Holding. Right: A private Japanese investor recently purchased the six-unit 401 12th Street in Park Slope. the city this year, the number falls easily into the tens of billions, sources said. Of late, Chinese developers in particular have embraced Manhattan, with high-profile projects in the works, like 610 Lexington Avenue, a 61-story condo being developed by China Vanke, China’s largest residential developer, in partnership with Aby Rosen’s RFR Holding. And last year, the Chinese The Oosten, a 216-unit residential development at 429 Kent Avenue in Williamsburg, is the American debut for China’s Xin invested billions into ManDevelopment Group International. hattan commercial real esseas networks of family and friends, often the industry are speculating that the bor- tate, with Fosun International’s notable crowd-funding their buys. ough will soon see more foreign interest. $725 million purchase of 1 Chase Man“It’s very likely that the vast majority “Flushing particularly is starting to hattan Plaza as well as the purchase by of foreign buyers who are coming to become very notable,” Kliegerman said. Zhang Xin, a Chinese real estate mogul Queens already have family there,” “I think we are about to see a lot more de- who is head of Beijing-based developer said Stephen Kliegerman, president velopment in that area targeting foreign Soho China, of a roughly $700 million of Halstead Property Development stake in the GM Building. [investors].” Marketing. He added, “Queens has Nevertheless, even Ludwick agrees Although there aren’t precise numa different international buyer than bers, brokers working in the area report that luxury developments in prime Brooklyn.” selling roughly half of all homes in Flush- outer borough neighborhoods are (or Still, the recent explosion of developing to Chinese immigrants reflecting a are becoming) basically as safe of a bet ment in Long Island City — some 500 conshift away from a largely rental culture as anywhere in the city. do units and 10,000 rental units are in the “If you are looking at waterfront since the ethnic makeup of the neighborneighborhoods in Brooklyn, Queens pipeline — promises to place the borough hood began to change in the late 1980s. more prominently on the world map. But for now, Queens still features a or Hoboken, those areas are effectively In fact, last year TRD reported that largely working-class culture and a lack Manhattan,” Ludwick said. “It might just of the luxury housing popular with mul- take finding a more sophisticated buyer an Australian buyer paid $3.1 million in tinational buyers. or developer to sell them.” TRD cash for a penthouse at The View in Long

www.TheRealDeal.com February 2013 45

Artist Rendering

A STORY OF EXCEPTIONALISM THREE, FOUR & FIVE BEDROOM PRE-WAR CONDOMINIUMS PRICED FROM $3MM TO OVER $9MM 4 9 8 W E A .C O M

S A M S O N M A N AG E M E N T C E T R A R U D DY A R C H I T E CT S

E XC LU S I V E M A R K E T I N G & S A L E S : LO U I S E P H I L L I P S F O R B E S H A L ST E AD P R O P E R T Y D E V E LO P M E N T M A R K E T I N G

The complete offering terms are in an offering plan available from sponsor. File No. CD13-0041. All rights to content, photographs, and graphics reserved to: 498 West End Avenue, LLC. Sponsor: 498 West End Avenue LLC, 97-77 Queens Boulevard, Rego Park, NY 11374. Equal Housing Opportunity.

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76 November 2014 www.TheRealDeal.com

Why Chinese insurers could be the next big NYC buyers Anbang’s $1.95 billion Waldorf-Astoria buy is only the beginning, experts say By Tom DiChristopher hen the Chinese government allowed the country’s insurers to invest more money in foreign real estate in 2012, China hands predicted a surge in investments in overseas commercial property. The boom never fully materialized: Only a few blockbuster deals in London were done. But the first major New York City property purchase by a Chinese insurer could signal the race is on. Last month, Anbang Insurance Group reached a deal to purchase the Waldorf-Astoria from Hilton Worldwide Holdings for $1.95 billion, in what could wind up as the city’s largest single-asset transaction this year. Anbang reportedly beat out at least two other bidders ahead of a planned campaign to market the hotel. Chinese institutional investors “are studying the market,” said James Murphy, executive managing director of the investment sales group at Colliers International. “And when they find something they can compete on, they’ve obviously shown that they have the ability to close.” Market insiders recently told The Real Deal that Chinese insurance giants have been seeking opportunities to purchase properties in New York City, even making trips to inspect the sites. Until Anbang’s Waldorf buy, however, none pulled the trigger. Part of that stems from insurers’ typically conservative approach to spending. The nearly $2 billion purchase price for the iconic hotel trumps the $1.5 billion that David Werner and a group of investors paid for 5 Times Square in June, said Adrian Mercado, vice president of research at Massey Knakal Realty Services. It also tops the $660 million sale of the Helmsley Park Lane Hotel last year, making it New York’s priciest hospitality purchase, he added. The deal comes amid a huge ramp up in investment by Chinese buyers in New York real estate. In 2013, China surpassed Canadian buyers as the top purchasers of New York City office property, with two deals worth a combined $1.4 billion. Chinese property developer Fosun International acquired One Chase Manhattan Plaza for $725 million, while Zhang Xin, co-founder of developer Soho China, partnered with a Brazilian investor on a $700 million stake in the GM Building. Those deals were done by individuals and companies that tend to be more aggressive than big Chinese insurance companies, experts said. Further, most Chinese companies are still studying the U.S. market, explained Murphy, and do not have the infrastructure to make timely acquisition deals. “They still have multi-level decision-making processes which require se-

nior-level approval at the home office,” said Murphy. “They have more success pursuing off-market transactions, but not properties offered via the brokerage community, which require timely decisions.” But insurers and developers in the People’s Republic are sophisticated, and capable of tackling a number of barriers to competing with domestic buyers, said Dan Cashdan, senior managing director at HFF Securities. “Chinese insurance companies will be entering the market,” Cashdan told TRD. “They just need to find out what the strategy is going to be and who the right partners are.”

Hilton Worldwide Holdings reached a deal last month to sell the Waldorf Astoria for $1.95 billion to Chinese insurer Anbang. Inset, Anbang Chairman Wu Xiaohui.

The Waldorf-Astoria deal calls for Hilton to continue operating the hotel for the next 100 years. Through a strategic partnership, the hotel will undergo a major renovation. Anbang Insurance Group is one of China’s largest insurance companies, with 700 billion yuan ($114 billion) in assets under management, according to the company. It has expanded rapidly under Chairman Wu Xiaohui since he founded the company in 2004, acquiring holdings in a number of Chinese banks, as well as a potentially lucrative development site near Beijing’s CCTV building, Chinese newspaper Caixin reported in a recent profile of the company. New York is not the only U.S. market that Chinese institutional investors are exploring. The big insurance groups are also looking at properties in Chicago, San Francisco and Los Angeles, as well as tertiary markets, such as Seattle, Brendon Frye, senior manager at Colliers International in Hong Kong, told TRD. Investments in smaller markets could be further off, though. “I don’t see them pulling the trigger on a Seattle office building tomorrow,” said Frye. TRD www.TheRealDeal.com March 2010

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1974: Cityback , stateattout $6B arlem housing A look some ofHNew York City’splan

ew York City and state officials said they would spend $6.6 billion over 10 years to build or rehabilitate 51,200 apartment units in Harlem, which amounted to nearly a quarter of the entire housing stock in the neighborhood, 40 years ago this month. The ambitious plan was the latest in a series of initiatives intended to clean up the once vibrant area, which had fallen into a steep decline. Previous revitalization ideas were advanced after riots in 1935 and 1943. In 1965, Columbia University’s School of Architecture, in concert with District Planning Board 10, suggested new plans, and then another set of proposals was part of the 1969 citywide master plan. The 1974 plan was put forth by Edward Logue, the president of the state’s Urban Development Corp., and Mayor Abraham Beame, who formed a new Mayoral Office of Upper Manhattan Community Planning and Development to advance the proposal. It called for 33,400 new housing units over the next decade, at a cost of $1.5 billion, and rehabilitation of 17,800 units, at a cost of $445 million. The plan also envisioned community Mayor Abraham Beame facilities, as well as commercial and industrial development. The program never reached those lofty goals. In fact, by 1978, the situation had deteriorated. Harlem leaders at the time said the neighborhood was in worse condition than ever. Some 3,000 housing units were lost each year since the plan was announced to decay, arson or abandonment. And because of heavy federal cutbacks in 1974, none were being replaced.

biggest real estate stories

1945: REBNY opposes WWII vets’ temporary housing

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he city’s leading real estate industry association criticized a plan backed by the popular wartime mayor, Fiorello La Guardia, to build temporary housing for returning World War II veterans, 69 years ago this month. A top executive from the trade group the Real Estate Board of New York said the plan for non-permanent emergency structures would lead to more poverty-stricken neighborhoods. However, the city and the federal government joined to develop eight temporary housing complexes with space for 8,300 fam- Quonset hut–style temporary housing built for ilies, built in barracks-style structures called returning WWII vets in Jamaica Beach, Queens. Quonset huts, as well as prefabricated homes. The rents were about $31 per month. The city provided the locations, and the federal government built the structures. The projects included locations that became the Bruckner and Castle Hill houses in the Bronx; the Juniper Valley, Northern Boulevard and Rego Park houses in Queens, and the Jamaica Bay, Ulmer Park and Linden houses in Brooklyn. The bulk of the homes were demolished in the 1950s as permanent housing was developed.

1922: Publisher heads to Midtown after 105 years

he large book publisher Harper & Brothers announced it would leave Lower Manhattan for Midtown 92 years ago this month, part of a long-running uptown migration of the media from the cramped confines at the southern tip of Manhattan. The firm was leaving its well-known two-building complex at 331 Pearl Street on Franklin Square near the Brooklyn Bridge, and heading to a new six-story structure at 49 East 33rd Street, between Park and Madison avenues. Siblings James and John Harper founded the company as J. & J. Harper in 1817, at first located in a small building near the waterfront on Dover Harper’s Cliff Street offices Street. The printers moved a few blocks north to 82 Cliff Street. Then two more siblings joined in 1833, and the firm was renamed Harper & Brothers. In 1850 they added to the Cliff Street address with the construction of the five-story 331 Pearl Street, which became the main office for the publisher for 72 years. The property is now occupied by a large apartment complex. Harper & Brothers, following several mergers, is now known as HarperCollins Publishers and is a division of Rupert Murdoch’s News Corp. Earlier this year, the publisher left Midtown and returned to Lower Manhattan. Now located in the skyscraper 195 Broadway, between Fulton and Dey streets, it was, ironically, part of a new migration of media businesses south from Midtown. Compiled by Adam Pincus

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10/28/14 12:06 PM

DAY IN THE LIFE OF:

Adam Modlin

The broker to the stars talks about his passion for running, his “mentor meetings,” and VIP treatment at favorite restaurants

Adam Modlin, 41, started the Modlin Group with his brother, Avery, with no previous experience in the industry.

dam Modlin is president and founder of the Modlin Group and a top broker to A-list celebrities like Justin Timberlake and Alex Rodriguez. The 41-year-old lives on the Upper East Side with his wife and two daughters. Modlin launched his firm with his older brother, Avery, in 1999, with no prior industry experience. His total listing volume of $125 million over the first five months of the year was a year-over-year jump from $110.5 million, according to The Real Deal’s annual ranking of Manhattan’s residential listing agents. He had the listings for Kelly Ripa’s duplex penthouse condo at 76 Crosby Street — with Douglas Elliman’s Raphael De Niro — and a penthouse co-op at 383 West Broadway. Those Soho apartments recently closed for $20 million and $26.6 million, respectively.

6 a.m.

The moment I wake up, I look at my phone and monitor my emails and text messages. It’s a good opportunity to communicate with clients of mine who are overseas or are in private equity or finance.

6:15 a.m. I go for a 3-mile run on the reservoir. Central Park is my backyard. I find there’s no better way to clear your mind and get your adrenaline racing than to take a run. On days when I don’t run or take my kids to school on the Upper East Side, I attend spin class.

6:45 a.m. I’m home, preparing breakfast – something healthy, like oatmeal and fruit – for my daughters, who are 11 and 14 years old. After I work out, I have coconut water, which is filled with potassium. I look through my closet for the perfect game-day power suit.

7:30 a.m. I take my kids to school, either on foot or by car. Then, I walk with my wife, who works in private equity, to our respective jobs.

8 a.m. My wife and I stop at Sant Ambroeus for coffee. [One] highlight of the walk is the view of 432 Park Avenue, where I’ve sold a handful of apartments. 80 November 2014 www.TheRealDeal.com

9 a.m. I’m at my office at West 57th Street and Seventh Avenue. The first meeting of the day is what I call a “mentor meeting.” I talk with young people looking for guidance or who are interested in getting into the residential real estate industry .... I also participate in a year-long academic program where I mentor students at Baruch College, the school I went to. I prefer to start my workday with this meeting, because young people have so much passion – they want to take over the world. I find that inspiring and I learn something from them.

up looking at properties spontaneously. I maintain a kosher diet and almost always, I’m eating fish. My favorite is branzino.

3 p.m. Periodically over the course of the day, I’m in the office. I huddle up with my team, research properties to show to a client, review exclusive listings and think about how to reach out to new people. Modlin enjoys running at the Central Park reservoir.

10 a.m. I have a couple active negotiations, so I’m on the phone with my sellers and buyers. I call brokers to make sure they’re familiar with our listings. 11 a.m. Recently, I had clients who flew in from Moscow to shop for a trophy townhouse on the Upper East Side. The most discerning buyers for this type of property will only consider property that’s of a certain width. To be designated as a mansion, it would have to be at least 25 feet wide. Today’s client wants a mansion 30 or 40 feet wide. They require it to resemble their other homes around the world. There are probably only two on the market of that type on a Central Park block [between Madison and Fifth avenues]. We see two houses, and my buyer decides to bid on one.

12 p.m. My next meeting is to show an exclusive, a spectacular penthouse in Soho. When I need to get from point A to point B quickly, I jump on the subway.

1 p.m. I head over to Morandi in the West Village to get an outdoor table and catch up on calls and emails. It’s a luxury in our business to have a proper lunch, so if you’re going to do it, you want to do it right. I don’t often make lunch plans because people get upset when I have to cancel them. I could eat alone and the next thing I know, I get invited into somebody else’s table and two hours go by and we end

Modlin represented embattled Yankees star Alex Rodriguez in the $6.6 million sale of his condo at the Rushmore in 2012.

5:30 p.m. I meet another colleague for a drink at Harlow. That’s something I often do – to discuss the state of the market, inventory, deals, strategies. My friend Richie Notar owns Harlow, so I tend to have a drink or meeting there in the late afternoon, while it’s closed. The key to good friends is getting to go to places when they’re closed. 6:30 p.m. The other night, I dined at Estiatorio Milos with friends who are developers. I eat dinner at home frequently, though. 7:30 p.m. I love to support my clients’ philanthropic endeavors. A friend, for example, launches his or her own charity with an event, and I bring others to show support.

10 p.m. On the way home, I check in with clients on the West Coast. 10:30 p.m. I get home in time to see my Drinks with friends or customers are often at Harlow.

kids before they go to sleep. I ask them how their day was and give them a hug and a kiss.

11 p.m. I read three or four books at the same time. Most recently, I read [New York Knicks president] Phil Jackson’s new book, “Eleven Rings: The Soul of Success.” I don’t enjoy watching TV. I think it’s a waste of time.

Phil Jackson’s book was a recent read.

12 a.m. I wind down and start thinking about tomorrow. While I’m exhausted, I reflect back and feel grateful about the amazing day I just had. By Mark Maurer PHOTOGRAPH OF Adam Modlin FOR THE REAL DEAL BY max dworkin

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10/27/14 9:50 AM

Architecture Review

Ja m e s G a r d n e r

KPF-designed tower will make a mark New Madison Square-area condo building is irregular—in a good way

adison Square has long been distinguished by its building stock, starting with the late, lamented Madison Square Garden, designed in 1890 by McKim, Meade & White, and demolished in 1925. By 1909, there emerged the Metropolitan Life Building, at the time the tallest building in the world. It would be nearly a century, however, before the arrival of the next important installment, One Madison, that distinguished (and unfairly maligned) structure conceived by CetraRuddy. And now a new building, 45 East 22nd Street, is set to rise, not exactly on Madison Square Park, but close enough that it will be, in essence, an important player on the square. This newest structure was conceived by Kohn Pedersen Fox, which has designed prolifically in New York over the past generation. And even if the firm has not been quite as prolific as, say, Skidmore, Owings & Merrill or Costas Kondylis, it has probably done more than any other firm to improve and dignify the building stock of the five boroughs. Indeed, it deserves to be said in passing that a good building, a building that is well-designed, and, even more importantly, that is well-made, not only serves as a worthy achievement in itself, but also casts a glow of refinement over everything else within the radius of at least a city block. Such, invariably, has been the case with the projects completed by Kohn Pedersen Fox. At 777 feet, its newest project, a 65-story condominium tower, will be 150 feet taller than One Madison, whose arrival some six years ago was controversial. Developed by Ian Bruce Eichner of the Continuum Company, 45 East 22nd Street will contain 83 units, ranging in size from a 1,072-square-foot one-bedroom offered for $2.5 million to a 7,000-square-foot duplex on the 64th and 65th floors, priced at $42.5 million. The residential section of the building will begin on the ninth floor, with no more than two units per floor. From the 55th floor through to the 63rd, however, there will be only one unit per floor, culminating in that sizable duplex at the top. The building will also have a private dining area on the 54th floor, which, in a sign of the times, is to be called the “Upper Club.” In addition to the usual fitness center and children’s playroom, other amenities will include a golf simulator, a half-court basketball court, and a yoga studio. The interiors are being designed by Martin Brudnizki Design Studio. As of now, move-in is scheduled for December 2016. In contrast to the studious rectilinearity of One Madison, with its distinctive composite of inlaid passages, each six stories tall, and its generally modernist modules, 45 East 22nd Street offers us a Deconstructivist design, in the sense that it courts asymmetry and syncopated irregularities. Paul Katz, a principal at Kohn Pedersen Fox Associates, and one of the architects most involved in the design of the new build-

The cantilevered tower at 45 East 22nd Street will rise 65 stories. Insets: Top, KPF’s Hugh Trumbull, design principal; bottom, KPF’s Robert Whitlock, managing principal.

the rest of the building. To judge from the rendering — which concentrates more on the tower itself — this will be a resolutely cubic affair, a solid masonry presence of limestone or granite up to the springing of the shaft, with a passage of curtain wall in its center. Good neighbor that

The building will also have a private dining area on the 54th floor, which, in a sign of the times, is to be called the Upper Club. ing, described it in the New York Times as “a flaring, Brancusi-esque sculptural form.” And just as Brancusi was as interested in the pedestal as he was in the sculpture itself, so the shaft rises over a five-story base that is very different in spirit from 82 November 2014 www.TheRealDeal.com

it is, this base will preserve the low-lying roof line of the brick buildings immediately to the west of it. From this point, the shaft, created by assembling a composite of air rights purchased from nearby buildings, rises up from a relatively narrow 72-foot base that

cantilevers over the low-lying buildings immediately to the west. Widening in an eccentric and irregular fashion as it rises all the way to the top, it suddenly attains, once there, a width of 125 feet. We must hope that the architects know what they are doing. As though in contrast to the lithic massiveness at street level, the tower itself is all curtain wall, that sheer, well-made curtain wall that has become something of a signature for the firm, as is evident at its office tower at 505 Fifth Avenue. Although the southern façade seems fairly flat and uniform, the curtain wall bulges to the north, while the almost non-existent western exposure is little more than a chamfered facet, several windows wide at the top, but narrowing to a needle-like point when, finally, it makes contact with the base. For most of its existence, the firm of Kohn Pedersen Fox Associates has been renowned for its corporate or institutional projects, especially in New York City. These have included the Baruch College Vertical Campus on Lexington and 25th Street, as well as Two Court Square in Long Island City and the various phases of the ABC headquarters on 67th Street, between Columbus Avenue and Central Park West. This last, together with NYU’s Furman Hall, was conceived in a restrained language of postmodern contextualism that is very different from the glossy, glassy language that is employed at 45 East 22nd Street. (Another project that deserves our full attention is 55 Hudson Yards, whose renderings, at least, promise a building that will be among the firm’s most distinguished projects.) But in fact, the firm has also been active in residential developments all along. This is most evident in One Jackson Square, on 13th Street and Ninth Avenue, one of the more distinguished buildings in Manhattan in recent years, as well as the surprisingly successful 1055 Park Avenue, a slip of a building whose curtain-walled surface has been improbably tucked into the southeast corner of 87th Street and Park Avenue. And yet, for all the distinction that this firm has achieved, a distinction that will surely be borne out at 45 East 22nd Street, one has the powerful impression that the firm has been playing it safe in New York City. Like so many other firms, it seems to experience a rush of liberation the moment it steps outside the five boroughs. Its forms become freer and more prepossessing, more agile and striking. “Iconicity” is perhaps an overused concept when applied to buildings in Manhattan, but it is precisely what is generally lacking in the borough, surely due to all the municipal constraints placed on architectural creativity. And that observation holds true for Kohn Pedersen Fox Associates, as much as for any other firm. Nothing the firm has created in Manhattan has the definitive charm or music that one finds, for instance, in their Shanghai World Financial Center. For all the clamorous talk of celebrity architects in our midst in recent years, even our best architects — among whom Kohn Pedersen Fox Associates surely deserve to be included — are not immune to a certain cultural timidity that has defined our developments for much of the past half-century. TRD

TheRealDeal_Final.indd 1

12/24/13 11:22 AM

Q&A

Is the soaring rental market changing patterns?

Long-held beliefs about Manhattan vs. Brooklyn markets get turned around By Brendan O’Connor ressure from New York City’s highly competitive condo arena is spilling over into the rental scene, and as a result, some long-held assumptions about the Manhattan versus Brooklyn markets are being turned on their head. This month, The Real Deal talked to residential brokers with expertise in the Manhattan and Brooklyn rental markets to understand the impact of an influx of newcomers — would-be condo buyers priced out of the market by international buyers — on the rental market. The most troublesome result for renters: A lack of inventory is contributing to an exponential increase in prices, said Oliver Brown, a broker with CORE. Sources report that pressure on the rental market is being released in several ways. In some cases, renters are shedding their Manhattan-centric perspective. “Clients have become a lot more flexible in terms of where they will live. People have adapted more of a pioneering attitude. Areas that were considered ‘off-limits’ are now first-choice

Oliver Brown

Williamsburg continue to grow in popularity on both the sales and rental fronts.

What are you seeing in terms of prices for rentals in Manhattan and Brooklyn? Are you seeing the market heading up, down or sideways? I think prices will continue to rise, especially for units located in popular neighborhoods and newer buildings. The lack of inventory throughout the market allows landlords to command higher prices.

Which Manhattan or Brooklyn neighborhoods have been the weakest in the recent run-up? I think the Upper East Side is experiencing a slump in rental activity. Its northern proximity and sometimes longer commute compared to other areas may be viewed as negative attributes among renters.

Broker, CORE

What are you seeing in terms of inventory compared to six months ago, a year ago and two years ago? We have much less inventory, contributing to the exponential rise in rental prices. What differences are you seeing between the higher and lower ends of the rental markets? Low-end rentals are immediately becoming occupied and have a short-term shelf life on the market. Proper pricing strategy is imperative in regards to the high-end rental market, as overpriced properties tend to linger. The Real Deal and others have reported that some would-be buyers have been pushed into the rental market because sales inventory is so low. What are you seeing on that front, and how is that impacting your firm? Managing both sales and rental transactions, I have not noticed a major influx of prospective buyers turning to the rental market. Which Manhattan or Brooklyn neighborhoods are you seeing emerge right now? West Chelsea, Brooklyn Heights and 84 November 2014 www.TheRealDeal.com

With the rental market so strong, are you seeing any concessions in the rental market? If so, in what types of buildings? Owners of older buildings that are considered less desirable are paying brokers a one-month fee or offering tenants one month of rent free as a courtesy to entice potential tenants. What are the biggest challenges to renting apartments in the current market? Needing good credit and meeting all the qualifying factors of approval have been a hindrance for many renters, especially for young adults. The Real Deal has reported that some renters are opting out of the soaring Brooklyn market and are looking for Manhattan rentals instead. What are you seeing on that front? Brooklyn is certainly outpacing Manhattan in regards to rental prices. The Upper East Side is a cheaper alternative. What are the most positive trends you’re seeing in the Manhattan/Brooklyn rental market today? Beautiful finishes and amenities are becoming a more regular feature in new developments and recently converted properties. Landlords who spend or renovate using high-end finishes and materials see a greater return than those who don’t. The consumer is very well educated and expects a certain level of refinement.

destinations for many people,” said Eric Hamm, senior managing director at Citi Habitats. In another about-face, brokers report that Brooklyn is outpacing Manhattan in regards to rental prices; in some cases the Upper East Side is actually a cheaper option. “Renters looking to Brooklyn for more space and a better deal are turning around and coming back to Manhattan. The notion of moving to Brooklyn to save money has ended, and price-shocked renters are finding better deals on the Upper West/East Side and Upper Manhattan than in many of the ‘prime’ Brooklyn neighborhoods,” Hamm said. Brokers appear to agree that lower-priced rentals are moving fast as renters jump on deals quickly. Still, at least one broker expressed concern that rising rents may have a profound impact on the city for some people. Lancelot Watson-Taffe, a salesperson at Bond New York, said, “I’m afraid if rents keep escalating, there will be no more affordable homes for regular people who are not so wealthy but still wish to experience the city as their home.”

Alex Saltalamacchia Director of leasing, aptsandlofts.com Are you seeing would-be buyers get pushed into the rental market? That’s absolutely the case. Many buyers have been able to use this to their advantage, signing a one-year lease and “testing” the market, which may be very new to them. The trend we have seen is about 50 percent or so of our renters are coming directly from Manhattan, wanting to be a part of the Brooklyn scene. Which Manhattan or Brooklyn neighborhoods are you seeing emerge right now? Crown Heights and Prospect Heights have been on folks’ radar this year, but Prospect Lefferts is just now beginning to take off with new developments like 123 Parkside and 33 Caton Place. Which are the most buzzworthy rental buildings coming to the market? Two Trees’ Domino Project. Incredibly forward thinking design and development, ultimately connecting the north and south sides of Williamsburg. Are you seeing any concessions in the rental market? I’m seeing concessions only given during the initial lease up of a new development, to increase absorption. What are the biggest challenges to renting apartments in the current market? It’s always been and continues to be qualifying. Many say it’s harder to rent an apartment than it is to purchase one. What are the most surprising trends you’re seeing in rental market today? The increase of renters coming directly

from out of state to the boroughs — excluding the tri-state area — accounts for roughly 13 to 15 percent of our business.

Lauren Weiner

Managing principal, Siderow Residential What are you seeing in terms of prices for rentals? In the short term, in both markets we are seeing the normal cyclical lowering of prices during the winter months. Many people are renting and waiting to buy because they simply can’t find what they’re looking for. What are you seeing in terms of inventory? Vacancy rates are pretty consistent with where they were two years ago. Rental inventory is slowly increasing. What differences are you seeing between the higher and lower ends of the rental markets? It’s a tale of two cities, with the higher-end units staying on the market longer and the more economical options moving very quickly. Most of the new construction has been extremely high-end, high-priced condominiums. With the exception of a few new buildings, there has not been any significant contribution to the number of luxury rentals in Manhattan. Given the limited inventory of high-end rentals, landlords are ... willing to wait for rents that meet their expectations. Which Manhattan or Brooklyn neighborhoods are you seeing emerge right now? In Brooklyn, as Williamsburg and Downtown Brooklyn become more expensive, developers are seeking opportunities in Bushwick, Bed-Stuy and Crown Heights. In Manhattan, the Upper East Side has

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Q&A suddenly become the more affordable option for lots of people. The Lower East Side and lots of Downtown neighborhoods are as hot today as they were cold 10 years ago. In addition, there are massive developments going on, like the Seward Park [Urban Renewal Area]. And Hudson Yards will change the West Side waterfront dramatically in the long run. Which are the most buzzworthy rental buildings you are most excited about? We are very excited about Durst’s 625 West 57th Street, which has a tetrahedron shape that allows the building to take advantage of stunning views of the Hudson. It is located in an area that was not too long ago mostly industrial, with little residential and no luxury housing. The construction of this new building, along with the new luxury buildings built along Riverside Drive, and the success of Mercedes House nearby, demonstrates real estate developers’ belief in the future of the Far West 50s-60s. Additionally, the fact that Durst chose to build rentals and not condos signals they also believe in the long-term strength of the area. Are you seeing renters opt out of the soaring Brooklyn market and look for Manhattan rentals instead? We have a lot of clients moving from Brooklyn to the Upper East Side. What are the most surprising trends you’re seeing? Our firm is doing tons of deals for foreign investors. People talk about how many people are coming from China and other places to buy here, but to see the influx and number of deals we are doing first hand is really surprising. What are the most positive trends? In Manhattan, 6,000 new units are planned to come on the market in 2016. In addition, the conversion of multiple rental buildings, from the Upper East Side to Battery Park and Midtown, to condos. These units will provide new sales inventory for the 1,700- to 2,400-square-foot client who has been priced out of the market or simply can’t find inventory.

Eric Hamm

Senior managing director, Citi Habitats What are you seeing in terms of prices for rentals? The Manhattan and Brooklyn rental market remains strong, but recently we have seen a few cracks in the facade. The good news for apartment seekers is that we will likely see further, albeit small, asking rent reductions as we head into the holiday season, as landlords scramble to fill their vacan86 November 2014 www.TheRealDeal.com

cies before Thanksgiving. What about inventory? There are considerably more vacant apartments on the market now than before the summer season. In comparison to a year or even two years ago, we have at least twice the amount of rental inventory available in some neighborhoods, which is giving prospective renters a lot of options in their housing search. The fourth quarter is generally a great time to be in the market for rental housing and this year, even more so. What differences are you seeing between the higher and lower ends of the markets? Lower-priced apartments continue to move fast. Tenants looking to save money are jumping on deals. In contrast, we have seen a slowdown in the higher end of the market. Tenants spending over $10,000 a month are actively trying to enter the sales arena now that the market has rebounded. In some cases, landlords are responding by offering concessions of one to two months to attract these high-end renters back. Are you seeing would-be buyers get pushed into the rental market? The condo market is highly competitive, with international buyers driving up the prices in some cases. Buyers who get priced out are finding themselves purchasing coops or going back to their current landlords and renegotiating a new lease term until the market cools down. My brokers are making sure they have a “Plan B” in case their buyers get outbid and need to find a rental in the meantime. Which Manhattan or Brooklyn neighborhoods are emerging right now? In Manhattan, Morningside Heights and the West 120s are seeing big price increases with the expansion of Columbia University and the constant shortage of housing in the area. In Brooklyn, Bedford Stuyvesant is just starting to see condo pricing above $1 million and the eastern end of Bushwick is really starting to take off. Which Manhattan or Brooklyn neighborhoods have been the weakest? The Upper East Side, especially east of Second Avenue, has typically offered great values for people. There is simply a lot of inventory in the neighborhood, so there always seem to be more vacancies there, especially when compared to many of the Downtown neighborhoods. Surprisingly, we have also seen vacancy rates increase in the East and West Villages. Landlords have begun to push rents in these communities to a level where people are beginning to decide they can find better values elsewhere. Are you seeing any concessions in the rental market? Lately we have seen an increase in concessions, with landlords offering them ear-

lier than usual this year. Some newer developments have already increased their concessions to over a month-and-a-half broker fee and some type of free rent for the tenant. Are you seeing renters opt out of the Brooklyn market and look for Manhattan rentals instead? Renters looking to Brooklyn for more space and a better deal are turning around and coming back to Manhattan. The notion of moving to Brooklyn to save money has ended and priceshocked renters are finding better deals on the Upper West/East Side and Upper Manhattan than in many of the “prime” Brooklyn neighborhoods. What are the most surprising trends you’re seeing? Clients have become a lot more flexible in terms of where they will live. People have adapted more of a pioneering attitude. Areas that were considered “off-limits” are now first-choice destinations for many people. Overall, the New York City rental market has become less Manhattan-centric.

Lancelot Watson-Taffe Salesperson, Bond New York What are you seeing in terms of prices for rentals? Manhattan and Brooklyn both witnessed extremely strong summers characterized by the typical bidding wars, multiple applications, renter hostility and even a few tears shed because a renter missed out on that “dream apartment.” As we approach the winter, prices haven’t quite decreased but there seems to be a bit more room for negotiation on asking rents. I’m seeing more of a lateral move in asking rents staying pretty consistent. What about inventory? Six months ago, we saw more and more inventory progressively turning over, as April marked the start of our busy season. A year ago, things were somewhat similar to current market conditions. However, this October seems to be a bit more active with renters and high demand. What differences are you seeing between the higher and lower ends of the rental markets? The higher end of the rental market has been pretty hot. Although the highend rental market is for a distinct clientele, they seem to be pretty active this year snagging the apartments with the five-digit price tags. But since many people in the city are looking for more affordable rental homes, the apartments on the

lower end definitely rent much faster. Are you seeing would-be buyers get pushed into the rental market? Many would-be buyers have moved to renting because of low sales inventory, being out-bid, and because they’re not finding what they think is worth an investment of hundreds of thousands of dollars. Which Manhattan or Brooklyn neighborhoods are you seeing emerge right now? Hamilton Heights, Washington Heights and Inwood are emerging neighborhoods in northern Manhattan that are hot on the map. These are great neighborhoods for the budget conscious, with great eats and phenomenal culture. Which are the most buzzworthy rental buildings coming to the market? The Nathaniel, located at 138 East 12th Street, came to the market this fall, one of the few luxury buildings in the East Village, which is awesome for the clientele that want to live in the East Village neighborhood without living with East Village un-renovated walk-up grunge. Which Manhattan or Brooklyn neighborhoods have been the weakest? I’m not sure there are any weak neighborhoods in Manhattan. There’s demand for every inch of Manhattan, if you ask me. Are you seeing concessions in rentals? Concessions are returning now in about 15 percent of the inventory, not because the market isn’t strong, but as a technique for landlords to keep rent rolls high even when there are fewer prospective renters. Smart landlords know it’s more effective to lose a month’s rent than to roll back prices that have taken years to get to current levels. What are the biggest challenges to renting apartments? The biggest challenge is getting people to understand prices are pretty firm. Paying a year upfront does not make a landlord want to drop the rent by hundreds of dollars per month. What are the most positive trends? The most positive trend I’m seeing in Manhattan is the fact that people are exploring and moving to different neighborhoods such as East Harlem, Hamilton Heights, Washington Heights, and Inwood. We’re seeing the emergence of a lot more businesses and attractions in these neighborhoods. What are the most troubling trends? The climbing rents are beginning to scare me. I’m afraid if rents keep escalating, there will be no more affordable homes for regular people who are not so wealthy, but who still wish to experience the city as their home. TRD www.TheRealDeal.com July 2013 65

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No gawkers allowed at LeBron’s listing To get a peek at the Miami mansion LeBron James put on the market last month, prospective buyers will have to be serious. Opulence International Realty senior vice president Tomi Rose, who has the listing, has no plans for the sort of lavish open house that some brokers might be tempted to stage at the six-bedroom Coconut Grove home, which has an asking price of $17 million.

ing to play in his hometown of Cleveland this season, paid $9 million for the waterfront spread four years ago. The nearly 17,000-square-foot manLeBron James sion includes a wine cellar, custom theater, guest home and rooftop sun deck. The property also has LeBron James’s Miami home is on the market. enough dockage to accomThe basketball superstar, modate two 60-foot yachts. Rose is also marketing a 49thwho led the Miami Heat to two championships before return- floor condo at downtown Miami’s

Real estate news in the Sunshine State TheRealDeal.com /miami Marquis Residences for James’ former teammate Mario Chalmers, who purchased the duplex unit for $2.4 million from hip-hop star Drake. Chalmers wants $4 million for the five-bedroom condo.

Chetrit’s huge river bet An offshoot of New York’s Chetrit Group is moving forward with plans for “Miami River,” a new neighborhood between Downtown and the financial district. Developers Joseph and Meyer

Chetrit and their Miami partner Ari Pearl spent nearly $100 million to assemble 6.5 riverside acres. They received $55 million in short-term financing from UBS Real Estate Securities, coming due in August, for use while working to get the project approved. The firm wants to build four 60-story towers with offices, retail space and more than 1,600 residences in five phases. A marina and 300-room hotel is also planned. Current zoning allows for only about 800 units, so they’ll have to obtain a Special Area Plan desig-

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88 November 2014 www.TheRealDeal.com

ONE Joseph Chetrit

ONE Sotheby’s International Realty is comprised of 400 real estate agents with a network spanning 750 offices in 55 countries and territories worldwide. We are more than realtors: we are industry experts, ready to guide a global audience through the local market.

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A rendering of the Miami River project.

nation to build as proposed. In a move that should help its chances, the firm partnered with the city to incorporate an adjacent park into the project and pledged $22 million in public improvements or cash.

Big mall, bargain price Discount property acquisitions are scarce in South Florida these days, but a San Diego investor was able to get a large Palm Beach Gardens mall for nearly $60 million less than what the site traded for in 2007. Excel Trust paid $141.5 million last month for Downtown at the Gardens, which hosts The Cheesecake Factory, cinema chain Cobb

The Downtown at the Gardens mall.

Theaters and Whole Foods Market. The 340,000-square-foot mall off PGA Boulevard changed hands for more than $200 million in 2007. The mall, which is 90 percent occupied, was built by Menin Development of Palm Beach in 2005. A REIT, Excel, raised $168 million in June to purchase numerous properties; it used most of that for this acquisition. By Eric Kalis

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Snapshots of real estate residential real estate news briefs news from from around the U.S. around the U.S.

REPORT

At car condos like AutoMotorPlex in Minneapolis, enthusiasts can buy a home for their beloved wheels.

MINNEAPOLIS

all it the mid-life crisis market. Developers across the country are marketing so-called “car condos” to Baby Boomers with cash to spend. The souped-up storage garages at Minneapolis’s AutoMotorPlex cost $300,000; units at the Thermal Club, under construction in Thermal, Calif., where membership includes access to a 4.5-mile racecourse, cost up to $800,000. Demand for the 84 units at GarageTown, in Denver’s Highlands Ranch

PHOENIX Home construction is rising in exurban locations like Toll Brothers’ Verrado development in Buckeye, Arizona, outside Phoenix.

The housing market’s recovery may be starting to spread beyond American cities, as areas on the edges of metropolitan areas — frequently referred to as the “exurbs” — are seeing more building and more sales. For example, median resale prices in Arizona’s Maricopa County — which includes Phoenix and is the nation’s fourthmost populous county — have rebounded to $205,000, the Wall Street Journal reported, up 82 percent from their lowest point in 2011. Median resale prices in exurban Pinal County, Arizona, meanwhile, are still around $144,000, up only 65.5 percent from their trough, making the area more attractive for buyers looking for lower prices. In cities like Phoenix, Miami and Austin, home prices are at or near pre-recession levels. With land prices high in the urban centers, builders are moving to the outskirts to lower costs. The revival in these areas reflects a larger market recovery: Builders began construction on 437,100 single-family homes in the first eight months of 2014, up nearly 3.1 percent from the same time last year.

VIRGINIA A home for sale in Arlington, Virginia, where the local credit union has increased its market share for mortgage lending.

Over the past decade, credit unions have increased their share of the overall mortgage market from 3 percent to 90 November 2014 www.TheRealDeal.com

suburb, has been so high that the developers are opening a second location. Another developer is planning a 270-unit garage at a former GM plant near Detroit. In addition to providing space for vehicle collections, Bloomberg reported, these properties serve as club houses and sites for car shows. It’s a strong enough trend that Hagerty Insurance, the world’s largest classic-car insurer, is now offering policies to cover car condos and their contents.

10 percent, the Wall Street Journal reported. Many credit unions have made themselves appealing to smaller borrowers by waiving down payments and mortgage-insurance requirements: Vienna, Virginia’s Navy Federal Credit Union requires no down payment and offers loans up to $1 million with 15-year or 30-year fixed rates; Arlington’s Pentagon Federal Credit Union, meanwhile, recently launched a 15-year adjustable-rate mortgage. Credit unions’ increasing market share, however, is still largely driven by smaller borrowers: less than 12 percent of Navy Federal Credit Union’s mortgage-dollar volume comes from so-called “jumbo” loans.

SAN FRANCISCO Apartment search company Zumper says median rent in San Francisco has topped that in New York City.

Median rent in San Francisco has surpassed median rent in New York City for the first time, according to apartment search company Zumper. The median rent for a one-bedroom in the city is now $3,100 a month, reported the San Francisco Business Journal, as opposed to $2,995 a month in NYC. Rising rents are influenced, in large part, by the ongoing tech boom — Cushman & Wakefield found that 7.6 million square feet of office space in San Francisco was leased through the third quarter of this year, compared with 7.4 million rented through all of 1999. Despite the Bay Area’s rising costs, however, New York City’s most expensive areas for renting — Tribeca and Dumbo — are still the most expensive in the country. Compiled by Brendan O’Connor

Dallas Golf Hall of Famer Lee Trevino listed his 10,000-square-foot French-style estate in Dallas’s affluent Preston Hollow neighborhood for $13 million. The house was built in the 1950s and renovated in 1998; Trevino and his wife, Claudia, bought the house in 1996 for $3.5 million. Trevino is a twotime U.S. Open Champion; the house comes with sand bunkers and two putting greens.

South Bend, Indiana The Tudor-style, East Wayne Street historic district home where Notre Dame legend Knute Rockne lived when he died in a plane crash in Kansas was listed at $500,000. The two-floor, 4,200-square-foot residence was completed in 1929, two years before Rockne’s death; he commissioned the home himself. Many original details remain, such as leaded glass windows, a limestone fireplace and wrought-iron fixtures.

Calabasas, California Mötley Crüe bassist Nikki Sixx sold his 4,500-squarefoot house in a gated Calabasas community for $2.41 million. The one-thirdacre property, which Sixx bought in 2011 for $1.89 million, also includes a swimming pool and spa.

Hawaii Pacific Business News reported that Facebook founder Mark Zuckerberg is the likely buyer of the 357-acre, beachfront Kahuaina Plantation on the island of Kauai. PBN reported the estimated sale price is $66 million; the property was listed in August at $70 million.

BYRON ANDERSON AND DAN KESSLER

JULIA HOAGLAND AND KATIE SPENCER

Welcome Julia Hoagland & MLLP and The Anderson Kessler Team “The creativity and entrepreneurial drive that these teams bring to their work is reflected in their tremendous success to date, and makes them a natural fit with Urban Compass. Julia Hoagland’s team’s aptitude for deep analysis, and Dan and Byron’s integration of technology in their practice, paired with the Urban Compass platform, will drive exciting changes in the uptown real estate market. I am thrilled to have them both join us at our Lever House location as we continue to grow our presence uptown.” — Robert Reffkin, Urban Compass Founder & CEO

2 1 2 . 9 1 3 . 9 0 5 8 W W W.U R B A N C O M PA S S . C O M F O L LOW U S @ U R B A N C O M PA S S

Anatomy of a deal: Inside Durst’s Hallets Point play Firm that assembled Queens site spent $1.7M in lobbying expenses since 2012 By Adam Pincus he Durst Organization is projected to spend about $130 million to acquire three parcels where it plans to build a massive $1.5 billion development known as Hallets Point in Western Queens, several sources told The Real Deal. The purchase of the parcels is expected to cost about $100 million, one insider said, with the additional expenses coming in the form of soft costs related to the long-term, complex assemblage the New Jersey–based firm Lincoln Equities Group orchestrated over eight years. The project is expected to be part of Durst’s complete transformation of the bulb-shaped peninsula that juts out into the East River near Roosevelt Island. The firm, led by Douglas Durst, plans a 2.5 million-square-foot project that includes 2,400 affordable and market-rate units, retail space, a supermarket and a school. It intends to develop the project in partnership with Lincoln, which retains a 10 percent stake in the deal. Nearby, Alma Realty is building the 1,700-apartment Astoria Cove project.

A review of court filings and property records reveals the labyrinthine process through which Lincoln, headed by Joel Bergstein and David Weinstein, assembled

the site. Court records also suggest that Lincoln never planned to be the lead developer, but always saw itself as the assembler instead.

A rendering of the Hallets Point project used by Lincoln during the rezoning process. Inset, Douglas Durst.

Durst plans a 2.5 million-square-foot project that includes 2,400 affordable and market-rate units, retail space, a supermarket and a school.

Eight-year time line The first contract associated with the assemblage available in public records was signed in May 2006, the peak of the last real estate boom, for three parcels along a block-and-ahalf of East River waterfront: 26-02 to 26-40 and 27-02 First Street. The land was owned by an entity called Famitech, which was controlled by jeweler David Bassalali. This was the largest of the three blocks of land Lincoln ultimately controlled through contracts. The final sale price was $58 million. The next parcel locked in, 27-50 First Street, was just south of those parcels. In March 2007, real estate investor Michael Gindi went into contract to buy it from Aristidis Zaharopoulos, who owned the land through his firm Zavas Realty. Three months later, a person named Mordechai Rumpler signed a contract with Isaac Deutsch’s Astoria Equities 2000 for the third parcel, a contract that was later assigned to Lincoln. Continued on page 110

(718) 626-4400 | info@metpacproperties.com 92 November 2014 www.TheRealDeal.com

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Deal Sheet summary

The Deal Sheet, on pages 102 to 110, covers transactions from 9/11/14 through 10/10/14. Please submit future deals to deals@therealdeal.com.

Overview Property sales

Financing

Leases (# of deals)

Leases (square feet)

Deals

Transactions

Office

203,990

Dollars

$2,254,900,000

Aggregate value

$752,700,000

Retail

977,880

Total

1,181,870

Sales

By dollar volume (in millions)

By type Multi-family

114 88.7 84.7

Retail

Other commercial Development site Hotel

Mixed-use

Retail Development site Hotel Industrial Mixed-use

Other commercial

6.7

422.2

Industrial

Office

56 6. 6

Multi-family

Office

Office leases Office leases by industry

Office leases sf by industry

Industry

Number of deals

Industry

Top tenant reps for office leasing by sf Leases square feet

Broker

Leases square feet

Advertising & Marketing

52,091

CBRE Group 499,585

Arts & Culture 2

Arts & Culture

52,773

Newmark Grupp Knight Frank

Fashion 9

Fashion 55,985

JLL 82,018

Financial 4

Financial 116,581

Savills Studley 68,568

Legal 2

Legal 405,850

Savitt Partners 39,873

Media 2

Media 36,872

EVO Real Estate Group

25,125

Medical 4

Medical 22,779

Cassidy Turley

20,768

Other 8

Other 119,307

ABS Partners Real Estate Group

14,681

Real Estate 2

Real Estate 47,685

Kalmon Dolgin Affiliates

10,000

Technology 3

Technology 67,957

Intrepid Real Estate Group

6,400

Advertising & Marketing

94,033

Retail leases Top tenant reps for retail leasing by sf

Retail leases sf by industry

Roberta Panos Inc. 25,204

Health & Beauty

Task Realty 24,162

Arts & Culture

JLL 22,000

Electronics

Avison Young 15,000

Fashion

Kalmon Dolgin Affiliates

13,000

Food & Beverage

Newmark Grubb Knight Frank

11,254

Other

In Line Realty 9,000 PD Properties 8,596

Electronics

Fashion

2,8

, 40

Food & Beverage Other

50 ,2

Winick Realty Group 15,009

58 ,3 54

Leases square feet

17,700

Retail leases by industry

Broker

,51

CBRE Group 8,265

94 November 2014 www.TheRealDeal.com

(*includes showroom space)

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Ut i l i t yTr a c k i n g

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EMPOWERi spr ou dt obea ni n t e gr a l pa r tof ope r a t i on sa tt h e bi gge s tn a me si nc omme r c i a l a n dr e s i de n t i a l ma n a ge me n t . For mor ei n f or ma t i onor t os c h e du l eape r s on a l de mo , v i s i t www. e mpowe r n y . c om

Deal Sheet

Commercial deals in New York City Deals are listed from largest to smallest in square feet leased or bought. The Deal Sheet covers transactions from 9/11/14 to 10/10/14. Please submit future deals to deals@therealdeal.com.

Office leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

767 Fifth Avenue

400,000

Weil, Gotshal & Manges LLP / Lewis Miller, Robert Flippin, Robert Alexander, Greg Maurer-Hollaender, Ryan Alexander, CBRE Group

Boston Properties / n/a

The law firm signed a 15-year-lease renewal to occupy 10 floors at the General Motors Building.

199 Water St

71,990

BGC Brokerage US Inc. / Hal Stein and Michael Ippolito, Newmark Grupp Knight Frank

n/a / John Cefaly and Robert Constable, Cushman & Wakefield

The tenant signed a 15-year lease to occupy the 18th and 19th floors.

One Liberty Plaza

57,018

AKF Group / Michael Shenot, Paul Mas, Ruby Hwang, Roxanne Tehranian, JLL

Brookfield / Jeremiah Larkin and Duncan McCuaig, Brookfield, David Falk, Peter Shimkin, Hal Stein, Nick Berger, Newmark Grubb Knight Frank

The engineering firm signed a 15-year lease to occupy the 22nd and 23rd floors.

315 Hudson St

51,786

Lower Manhattan Cultural Council / n/a

n/a / n/a

The tenant signed a lease to occupy the eighth floor.

882 Third Ave (Brooklyn)

38,000

David Stark Design and Production / n/a

n/a / Jamestown Properties, Angelo Gordon & Company, Belvedere Capital

The event production firm signed a lease.

199 Water St

36,985

The Howard Hughes Corporation / Gerry Miovski, CBRE Group Group

n/a / John Cefaly and Robert Constable, Cushman & Wakefield

The tenant signed a 10-year lease to occupy the 28th floor.

1 Worldwide Plaza

32,600

CBS TV / Rocco Laginestra, Andrew Sussman, Michael Wellen, Michael Laginestra, Scott Gottlieb, CBRE Group

New York REIT, DRA Advisors, George Comfort & Sons, RCG Longview / Matt Coudert and Peter Duncan, George Comfort & Sons

The media company signed a lease to occupy the 30th floor. The reported asking rent was $70 per square foot.

4 World Trade Center

30,000

Morningstar / Michael Liss, CBRE Group

Silverstein Properties / Jeremy Moss, Silverstein Properties, Mary Ann Tighe, Evan Haskell, Steve Siegel, Adam Foster, CBRE Group

The investment research firm signed a 10-year lease to occupy the 48th floor.

45 Main St (Brooklyn)

25,000

Huge Inc. / Shannon Rzeznikiewicz, JLL

Two Trees Management / Dan Conlon, Two Trees Management

The digital marketing firm signed a five-year expansion lease.

883 Avenue of the Americas

23,134

The Yard / Evan Margolin and Lance Leighton, Savills Studley

n/a / n/a

The tenant signed a 16-year lease to occupy the second floor.

885 Sixth Ave

23,134

The Yard / Lance Leighton, Evan Margolin, Savills Studley

Tower 111 LLC / Barry Goodman, Newmark Grubb Knight Frank

The shared workspace provider signed a 16-year lease to occupy the second floor.

115 Broadway

22,300

Gyro / Keith Ellis, Savills Studley

Capital Properties / Adam Foster, Michael Rizzo, Sam Spillane, Brad Gerla, Capital Properties

The advertising agency signed a lease to occupy the 14th floor. The tenant is relocating its headquarters at 31 West 27 St.

58 West 40 St

15,000

Rachel Roy / Marc Schoen, Brian Neugeboren, Michael Schoen,Savitt Partners

n/a / John Belt and Laura Belt

The fashion designer signed a 10-year lease for showroom and office space.

485 Madison Ave

14,101

Janover, LLC / Harry Krausman, Steve Braun, Daniel Thompson, Cassidy Turley

n/a / n/a

The tenant signed a lease to occupy the ninth floor.

114 First Ave

11,104

Memorial Sloan-Kettering Cancer Center / Robert Eisenberg and Mark Weiss, Newmark Grubb Knight Frank

Himmel + Meringoff / Jason Vacker and Mark Stein, Himmel + Meringoff

The hospital signed a nine-year expansion lease.

390 Park Ave

10,700

Urban Compass / n/a

RFR Realty / n/a

The tenant signed a lease to occupy the 14th floor.

91-20 130 St (Queens)

10,000

KPA Studio / Dmitri Gourianov, Kalmon Dolgin Affiliates

n/a / Dmitri Gourianov, Kalmon Dolgin Affiliates

The tenant signed a lease.

310 Lenox Ave

8,449

YAI Network / Andrew Udis and Eileen Eck, ABS Partners Real Estate Group

Success Academy Charter Schools / Kenneth Salzman, Lee Associates

The tenant signed a sublease. The reported asking price was $40 per square foot.

132 West 36 St

8,363

Catherine Malandrino Collection / Marc Schoen, Savitt Partners

William Kaufman Organization / n/a

The fashion design company signed a 10-year lease.

132 West 36 St

8,272

Sachin & Babi / Marc Schoen, Savitt Partners

William Kaufman Organization / n/a

The fashion design company signed a seven-year lease.

132 West 36 St

8,238

Carmen Marc Valco / Marc Schoen, Savitt Partners

William Kaufman Organization / n/a

The fashion design company signed a five-year lease.

8 West 40 St

6,667

Netsuite, Inc. / Jonathan Schindler, Kevin Waldman, Aron Schreier, Matthew Etlinger, Cassidy Turley

n/a / n/a

The tenant signed a lease to occupy the sixth floor.

8 West 40 St

6,667

Altman Foundation / Noel Flagg, Newmark Grubb Knight Frank

n/a / n/a

The tenant signed a lease to occupy the 19th floor.

141 West 36 St

6,400

Club House Creations Inc. / David Menaged, Intrepid Real Estate Group

Brause Realty Inc. / Barry Bernstein, Mitchell Cooperstock, Sean Hoffman, EVO Real Estate Group

The apparel company signed a lease for the 19th floor.

80 Maiden Ln

6,350

PC Tech USA / Manny Syskrot and Diana Rau Siegel, EVO Real Estate Group

AM Property Holding II Corp / Paul Wasserman and Nathan Wasserman

The school signed a lease.

535 Eighth Ave

6,232

PeopleDoc Inc. / Audrey Novoa, ABS Partners Real Estate Group Real Estate

Adelhardt / Robin Fisher, Newmark Grubb Knight Frank

The digital HR solutions company signed a five-year lease to occupy the 18th floor. The reported asking rent was $40 per square foot.

33 East 33 St

5,850

Jerry M. Feeney Attorney at Law / Alan Bonett and Bradley Cohn, Adams & Co.

ELK 33 East 33 LLC / Ian Weiss, Ron Zimmerman, Andrew Udis, ABS Partners Real Estate Group

The law firm signed a five-year sublease. The reported asking price was $48 per square foot.

80 Broad St

5,790

One Acre Fund / Amy Lawrence, Denham Wolf

Educational Networks, Inc. / 80 Broad Street Properties Investors II LLC

The tenant signed a sublease.

211 East 43 St

4,791

Jonesworks / Jared Anderson, EVO Real Estate Group

n/a / David Emden, Newmark Grubb Knight Frank

The PR firm signed a lease.

96 November 2014 www.TheRealDeal.com

Office leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

276 Fifth Ave

4,272

Funny Or Die Inc. / Jordan Gosin, Newmark Grubb Knight Frank

The Kash Group / Elliot Klein, EVO Estate Group

The comedy website signed a lease. The tenant is relocating from a 1,550 square foot space at 584 Broadway.

276 Fifth Ave

4,272

Accela Inc. / Elliot Klein, EVO Real Estate Group

n/a / Robert Gallucci, Cushman & Wakefield

The government software provider signed a lease.

1450 Broadway

4,139

Raj Manufacturing LLC / Dana Moskowitz, EVO Real Estate Group

n/a / Ben Bass and Jonathan Fanuzzi, JLL

The swimwear manufacturer signed a lease.

141 West 36 St

3,200

Azzure Home Inc. / Barry Bernstein, Mitchell Cooperstock, Sean Hoffman, EVO Real Estate Group

Brause Realty Inc. / Barry Bernstein, Mitchell Cooperstock, Sean Hoffman, EVO Real Estate Group

The home decor firm signed an expansion lease.

133 East 58 St

1,726

Kristos Togias, M.D. / n/a

n/a / n/a

The tenant signed a lease renewal.

244 East 32 St

1,500

New York College of Health Professions / Tom Brady, Rory Nichols, Sal Falcone, Town Residential

Two Four Four LLC / n/a

The tenant signed a five-year lease.

241 West 37 St

1,395

The Feldman Company / Manny Syskrot, EVO Real Estate Group

241/37 Realty Group LLC / Mordechai Koepel, 241/37 Realty Group LLC

The fabric importer signed a lease.

133 East 58 St

987

Save Venice, Inc. / Nicholas T. Judson and Stuart S. Ellman, Judson Realty, LLC

n/a / n/a

The tenant signed a lease.

16 West 36 St

978

Nomination USA Inc. / Howard Epstein, EVO Real Estate Group

n/a / Howard Epstein, EVO Real Estate Group

The accessory firm signed a lease renewal.

421 Seventh Ave

490

Nufami Inc. / Manny Kabiri and Warren Stein, Manhattan Commercial Realty Corp.

Manhattan Commercial Realty Corp. / Evan Cooper, AAG Management

The tenant signed a five-year lease.

Retail leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

90 Fifth Ave

25,204

Peak Performance / Frank LaRuffa and Gui Tepedino, Roberta Panos Inc.

RFR Realty / AJ Camhi and Oliver Katcher, RFR Realty

The physical therapy center and gym signed a lease to occupy the 10th and 11th floors for its flagship location.

3 Columbus Circle

24,162

Spirit Halloween / Adam Stupak, Task Realty

3 Columbus Circle / Kelly Gedinsky, Michael Gleicher, Patty Holmstrom, Winick Realty Group

The halloween retailer signed a lease.

5510 Broadway (Bronx)

15,000

Blink Fitness / n/a

Equity One / n/a

The fitness and health center signed a lease.

9029 Flatlands Ave (Brooklyn)

15,000

Blink Fitness / n/a

n/a / n/a

The fitness and health center signed a lease.

123 West 18 St

15,000

Samsung / Michael Leff and David Cohen, Avison Young

Wasserstein Enterprises / Andy Udis, ABS Partners Real Estate Group

The electronics company signed a lease to occupy the seventh floor. The reported asking rent was $58 per square foot.

616 Scholes St (Brooklyn)

13,000

Milestone Auto Parts / Howard Darsi and Weising (Bill) Chan, Kalmon Dolgin Affiliates

n/a / Joseph Nicholas, Kalmon Dolgin Affiliates

The parts supplier signed a lease.

34 West 36th St

12,000

Dynamex / Michael Gochman,Transwestern, Jonathan Schifrin, JLL

Haddad International / Jordan Kaplan, Kenneth Hochhauser, Zach Diamond, Winick Realty Group

The retailer signed a lease

31-00 47 Ave (Queens)

11,254

Doughnut Plant / Dan Gronich and George Graf, Newmark Grubb Knight Frank

n/a / Dave Tricarico, Cushman & Wakefield

The doughnut shop signed a 10-year lease.

366 Broadway

10,000

Gourmet Garage / Chase Welles, The Shopping Center Group, Jonathan Clott, Vision Property

Collect Pond House / Darrell Rubens and Lee Block, Winick Realty Group

The supermarket signed a lease.

315 East 62 St

8,596

City Tots LLC / Francesco Bardazzi, PD Properties

Olmstead Properties, Inc / n/a

The kids center signed a lease.

677 Fifth Ave

5,000

Microsoft Corporation / Richard Hodos, CBRE Group

677 Fifth Avenue Corporation / Andrew Kahn, Jonathan Scibilia, Jesse Hutcher, Cushman & Wakefield

The computer software and electronics company signed a lease to occupy the ground through fourth floors of its flagship location.

1663 Linden Blvd (Brooklyn)

3,600

Burger King / Richard Senior and Isaac Shabot, Ripco Real Estate Corp.

Linden Plaza Development LLC / Richard Senior and Isaac Shabot, Ripco Real Estate Corp.

The fast food chain signed a 20-year lease.

50-09 Second St (Queens)

3,459

Brighter Babies / Hal Shapiro, Winick Realty Group

V Partners, LLC / Hal Shapiro, Winick Realty Group

The retailer signed a lease.

33 Union Square West

3,300

Dylan’s Candy Bar / Peter Whitenack and Robert Cohen, RFK

n/a / Cara Rosenbloom and Steve Ash, City Connections Realty

The retailer signed a lease. The reported asking rent was $1.8 million, or $545 per square foot.

1333 Broadway

3,265

Shake Shack / Andrew Goldberg and Matt Chmielecki, CBRE Group

Empire State Realty Trust, Inc. / Fred Posniak, Empire State Realty Trust, Inc.

The fast-casual restaurant signed a lease.

556 West 181 St

3,000

Payless Shoes / In Line Realty

n/a / Josh Augenbaum, Augenbaum Realty Corp

The footwear retailer signed a lease.

4416 13 Ave (Brooklyn)

3,000

Payless Shoes / In Line Realty

n/a / Josh Augenbaum, Augenbaum Realty Corp

The footwear retailer signed a lease.

2826 Church Ave (Brooklyn)

3,000

Payless Shoes / In Line Realty

n/a / Josh Augenbaum, Augenbaum Realty Corp

The footwear retailer signed a lease.

2056 Broadway

2,700

Just Salad / Charles Rapuano, Winick Realty Group

The Brodsky Organization / Steven E. Baker, Winick Realty Group

The salad restaurant signed a lease.

125 Prince St

2,400

Lululemon Athletica / Jeremy Ezra, RFK

125 Prince Street, Inc. / n/a

The clothing retailer signed a five-year sublease for a woman’s store.

1476 Lexington Ave

2,000

Dog Room Club LLC / Richard Smith, Winick Realty Group

East 96th Street / Joshua Siegelman and Steven Baker, Winick Realty Group

The dog space signed a lease for a new location.

37 St Marks Pl

1,900

Peng’s Body Work / Melinda Miller and Lee Block, Winick Realty Group

133 Second Avenue / Melinda Miller and Lee Block, Winick Realty Group

The retailer signed a lease.

127 Prince St

1,800

Lululemon Athletica / Jeremy Ezra, RFK

n/a / Stephen Tarter, Coldwell Banker Commercial Alliance

The clothing retailer signed a five-year lease for a men’s store.

98 November 2014 www.TheRealDeal.com

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Retail leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

180 Ninth Ave

1,750

FIKA / Andrew Hawkins & Kyle Williams, Transwestern

n/a / William Abramson & Elba Diaz, Buchbinder & Warren Realty Group, LLC

The Swedish café chain signed a lease.

144 West 37 St

1,500

NatureWorks Restaurants / Manny Kabiri and Warren Stein, Manhattan Commercial Realty Corp.

n/a / Manny Kabiri and Warren Stein, Manhattan Commercial Realty Corp.

The restaurant signed a five-year lease.

687 Broadway

1,450

Soho Leather Company / Matthew Schuss, Winick Realty Group

Mercer Square LLC / Michael Gleicher and Danielle Weissberg, Winick Realty Group

The retailer signed a lease.

530 Seventh Ave

1,400

Anthony L & S / Marc Kritzer, Millennium Realty

n/a / Nicole Goetz and Brian Neugeboren, Savitt Partners

The footwear retailer signed a lease.

92 Laight St

1,400

Reines Gallery / Aaron S. Fishbein, Winick Realty Group

AA Olympic LLC, / Roxanne Betesh and James Costello, Sinvin

The retailer signed a lease.

59th St Columbus Circle

1,250

Specs New York / Robin Abrams, Lansco Corp.

Oases RE / Robin Abrams, Lansco Corp.

The eyewear retailer signed a 10-year lease.

59th St Columbus Circle

1,250

Bluwire / Robin Abrams, Lansco Corp.

Oases RE / Robin Abrams, Lansco Corp.

The tech and travel gear retailer signed a 10-year lease.

59th St Columbus Circle

1,250

Studio Manhattan / Robin Abrams, Lansco Corp.

Oases RE / Robin Abrams, Lansco Corp.

The accessory retailer signed a 10-year lease.

800 Second Ave

1,150

Chelsea Bagel / Matthew Schuss, Winick Realty Group

n/a / Hal Shapiro, Winick Realty Group

The café signed a lease.

One Brooklyn Bridge (Brooklyn)

900

Vendome Macaron / n/a

n/a / Ryan Condren, Kristina Triglia, George Danut, CPEX

The food vendor signed a lease for a new location.

128 East Fourth St

700

Fantastic Tea Shop / AC Lawrence Commercial

Eight Cooper Equities LLC / Bensen Retail LLC

The tea shop signed a seven-year lease.

22 Spring St

700

Paint Box Art / Matthew Ball, Winick Realty Group

22 Spring SM LLC / Lee Block, Darrell Rubens, Matthew Ball, Winick Realty Group

The retailer signed a lease.

22 Spring St

700

The Clay Pot / Andrew Mandel and Lindsay Charles, Ripco Real Estate Corp.

22 Spring SM LLC / Lee Block, Darrell Rubens, Matthew Ball, Winick Realty Group

The retailer signed a lease.

63 Flushing Ave (Brooklyn)

400

E. Vogel Custom Boots and Shoes / Richard Gnouma, Bertwood Realty LLC

n/a / n/a

The footwear retailer signed a five-year lease.

65 Church Street

300

Dutch Petals / Abe Bichoupan, Bertwood Realty LLC

Transworld Equities / n/a

The wholesale flower retailer signed a six-year lease for its first Manhattan retail store.

1031 Lexington Ave

250

Filicori Zecchini / Richard Smith, Winick Realty Group

1031 Realty Company / Joshua Siegelman, Winick Realty Group

The café signed a lease.

221 East 86 St

n/a

InVite Health / Patty Holmstrom, Winick Realty Group

York Associates / Rafe Evans, Walker Malloy

The health store signed a lease for a new location.

Buys Address

Size

Buyer / Representative

Seller / Representative

Notes

45 West 44 St

398-room hotel

Keck Seng Investments / Eastdil Secured

Accor Group, Goldman Sachs Group, GEM Realty Capital / n/a

The hotel sold for $272 million.

150-18 72nd Dr (Queens) 72, 73, 75, 150, 153 Rd (Queens)

12 parcels, 53 apt. bldgs, 1,270-units

A&E Real Estate / n/a

Hudson Realty / n/a

The protfolio consisting of twelve parcels sold for $216 million.

183 Madison Ave

19-story mixed-use, 20,000 sf

Tishman Speyer Properties / n/a

IRSA / n/a

The property sold for $185 million.

112-118 Fulton St

Development site

Caramel Partners / n/a

Lightstone Group / n/a

The development site sold for $171 million.

522 Fifth Avenue

2 retail bldgs

Ashkenazy Acquisition and Deka Immobilien Investment / n/a

Morgan Stanley / n/a

The two properties sold for $170 million, or $6,400 per square foot.

27 East 62 St

9-story mixed-use bldg, 57,000 sf

MacAndrews and Forbes Holdings / n/a

FirstService Residential Management / n/a

The property sold for $120 million.

890 Garrison Ave (Bronx)

400,000 sf office bldg

Perella Weinberg Partners and Madison Marquette / n/a

Taconic Investment Partners / n/a

The office building sold for $114 million in a joint acquisition.

325 West 33 St

22-story, 239-room hotel

Shidler Group / n/a

OTO Development / n/a

The hotel sold for $70 million.

204-206 West 133 St, 2247 Seventh Ave, 2484 Seventh Ave

21 mixed-use bldgs, 215,000 sf

n/a / n/a

AMICO / Steven Vegh, Westwood Realty Associates

The protfolio consisting of 21 buildings sold for $67 million.

131-01 39 Ave (Queens)

100,000 sf retail bldg

King’s USA Group / n/a

Rhee Brothers / n/a

The property sold for $55 million.

Bushwick Ave (Brooklyn)

Development site

Rabsky Management / n/a

Read Property Group and Princeton Holdings / n/a

The development site sold for $53 million.

553-559 West End Ave

6-story comm. bldg

Tamarkin Co. / n/a

St. Joseph’s Seminary and College / n/a

The property sold for $50 million.

42 West 35 St

13-story, 132-room hotel

Meadow Partners / n/a

Jeport Hotel / n/a

The hotel sold for $50 million.

153 East 32 St

16-story apt. bldg, 67-units, 62,188 sf

153 East 32 Street LLC / Aaron Jungreis, Rosewood Realty Group

Superior Condominiums / Aaron Jungreis, Rosewood Realty Group

The property sold for $43.7 million.

50 West 82 St

10-story apt. bldg, 59-units, 49,000 sf

n/a / n/a

Mann Realty / Ami Efrati, Entrepreneur Properties

The property sold for $41.5 million

144-10 135 Ave (Queens)

13-story hotel, 216-room, 115,000 sf

Magna Hospitality Group / n/a

Field Hotel Associates / n/a

The hotel sold for $41.4 million.

8-51, 8-01, 4-55, 4-57 26 Ave (Queens)

Development site

2030 Astoria Developers LLC / n/a

Superior Steel Studs Inc. / n/a

The four properties sold for $40 million.

510 Driggs Ave (Brooklyn)

70,000 buildable sf developnent site

Alliance Private Capital Group / n/a

n/a / n/a

The apartment building sold for $35 million.

64-82 Ferris St, 242 Coffey St, 300 Coffet St (Brooklyn)

4 warehouses

Est4te Four / n/a

n/a / n/a

The four warehouses were sold for $33 million.

3489-3499 Broadway

100,000 sf mixed-use bldg

Acuity Capital Partners / n/a

Heritage Real Estate Partners / n/a

The mixed-use building sold for $32.5 million.

100 November 2014 www.TheRealDeal.com

289

PARSONAGE

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J B I AL S KY DE SIG NE D

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New Construction Under 1 Mile to Ocean Ocean access via common path through reserve

10,000 SF+/2 Acres Adjacent Reserve Pool Tennis Gym Theatre Wine Cellar

$25,995,000 Exclusive. WEB#42074

ZACHARY VICHINSKY Lic. Real Estate Broker C: 631.766.0945

O: 631.500.9030 zachary@bespokerealestate.com

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O: 631.500.9030 cody@bespokerealestate.com

R E A L

E S T A T E

TAILORED FOR $10M AND ABOVE @BESPOKE.REALESTATE

B E SP O K E R E A L E STAT E . C O M All information is from sources deemed reliable but is subject to errors, omissions, changes in price, prior sale or withdrawal without notice. All rights to content, photographs and graphics reserved to broker. Equal Housing Opportunity Broker. Real estate agents affiliated with Bespoke Real Estate are independent contractor sales associates and are not employees of Bespoke Real Estate. Bespoke Real Estate LLC is a licensed Real Estate Broker. 903 Montauk Highway, Watermill NY 11976

Buys continued Address

Size

Buyer / Representative

Seller / Representative

Notes

24 Second Ave

Development site

n/a / AORE Capital

24 Second Ave Corp / Trever Gallina, Newmark Grubb Knight Frank

The property was sold for $32 million.

159 and 161 Prince St

2 apt. bldgs, 22,000 sf

Sitt Asset Management / n/a

Bapple Real Estate / Nick Spanos

The two mixed-used properties sold for more than $30 million.

312-314 West 58 St

4-story mixed-use, 44,000 buildable sf

Gorjian Real Estate Group / n/a

Andrew Mohr / n/a

The property sold for $25.5 million.

312-314 W 58 St

4-story mixed-use bldg, 12 units total, 41,000 buildable sf

n/a / Ivan Hakimian, Hakimian Properties

n/a / Kevin Esh, Hakimian Properties

The property sold for $25 million.

540 West 26 St

Comm. bldg

Savanna / n/a

293 Tenth Avenue / n/a

The property sold for $24.7 million.

565 West 139 St, 27-29 Audubon Ave, 79 Audubon Ave, 516 West 169 St, 507 West 170 St

151-units total mixed-use bldg, 86,289 sf

Adam Mermelstein, Treetop Development / Lazer Sternhell and Peter Vanderpool,Cignature Realty

n/a / Lazer Sternhell and Peter Vanderpool, Cignature Realty

The six properties sold for $24.5 million.

61 Grove St

5-story mixed-use bldg, 15 units total, 14,295 sf

61 Grove St LLC / Joseph Arnold Smith, Friedman-Roth Realty Services

Roslyn and Norton Nesis / Joseph Arnold Smith, Friedman-Roth Realty Services

The property sold for $24 million, or $1,700 per square foot.

105-115 Greenpoint Ave (Brooklyn)

3 apt bldgs, 52-units total

Red Brick Properties / n/a

Christopher Mauro / n/a

The three properties sold for $24 million.

68 Richardson St (Brooklyn)

6-story mixed-use, 24-units, 32,500 sf

MKRO I LLC / Michael Salvatico, Shaun Riney, James Saros, Marcus & Millichap

Dabby Investments / Matthew Fotis, Michael Salvatico, Shaun Riney, James Saros, Marcus & Millichap

The apartment building sold for $17.5 million.

532-540 West 48 St

11-story, 177-room hotel

Sam Chang / n/a

UFCW Local 174 / n/a

The ground lease for the property sold for $16.5 million.

61-63 West 106 St

6-story apt. bldg, 24-units, 30,336 sf

n/a / George Niblock, Friedman-Roth Realty Services

n/a / Eric Lupo, Friedman-Roth Realty Services

The property sold for $15 million.

28-30 East 38 St

5-story apt. bldg, 23-units, 20,101 sf

n/a / Amit Doshi, Besen & Associates

Central Living Inc. / Amit Doshi, Besen & Associates

The apartment building sold for $13.5 million, or $674 per square foot.

450-482 Union St (Brooklyn)

28,500 sf develoment site

n/a / n/a

The property sold for $12.3 million, or $216 per square foot.

1197 Grand Concourse (Bronx)

5-story, 56-units, 59,075 sf

n/a / Shallini Mehra, Besen & Associates

1197 Grand Concourse LLC / Amit Doshi, Besen & Associates

The apartment building sold for $8.1 million, or $137 per square foot.

1286-1288 Washington Ave, 1290 -1292 Washington Ave (Bronx)

6-story mixed-use bldg, 67-units total, 49,171 sf

1288 LLC / Aaron Jungreis, Rosewood Realty Group

BxWashington LLC / Aaron Jungreis, Rosewood Realty Group

The two contiguous properties sold for $7.9 million.

82-84 Wadsworth Ave

2 apt. bldgs, 47-units total

n/a / Shallini Mehra, Besen & Associates

82-84 Wadsworth Avenue L P / Amit Doshi, Besen & Associates

The apartment building sold for $7.8 million, or $203 per square foot.

1405 Rowland St, 2220 Adams Pl, 2327 Walton Pl

3 apt. bldgs, 60 units

n/a / Andrew Lichtenstein, LichtensteinRE

LichtensteinRE / Andrew Lichtenstein, LichtensteinRE

The three properties sold for $7.7 million, or $144 per square foot.

184 St (Queens)

3 apt. bldgs, 74-units total and garage

n/a / Lev Mavashev, Besen & Associates

n/a / Charles Chang and Michael Ferrara, Highcap Group

The three properties sold for $7.2 million.

3425 Gates Place (Bronx)

6-story, 61-unit apt. bldg

3425 Gates LLC / Aaron Jungreis, Rosewood Realty Group

3425 Gates Place LLC / Michael Guttman, Rosewood Realty Group

The apartment building sold for $6.9 million.

2160 Anthony Ave (Bronx)

6-story apt. bldg, 38-units, 45,320 sf

n/a / Amit Doshi and Ronnie Shaban, Besen & Associates

2160 LLC / Amit Doshi and Ronnie Shaban, Besen & Associates

The apartment building sold for $5.8 million, or $129 per square foot.

121 East 30 St

5,899 sf comm.bldg

SBG.USA. Corp. / Yoko Evans, Furumoto Realty

Henry George School of Social Science / George Van Der Ploeg and Mary Moran, Douglas Elliman

The property sold for $5.5 million.

448-450-452 East 149 St (Bronx)

4-story retail bldg

Chestnut Holdings / Sharone S. Baradarian, Red Real Estate

Horizon Realty Management / Sharone S. Baradarian, Red Real Estate

The property sold for $5 million.

3335 Decatur Ave (Bronx)

5-story apt bldg, 48-units, 49,000 sf

n/a / Jackie Himmelstein, Besen & Associates

3335 Decatur Avenue Corp. / Lynda Blumberg and Amit Doshi, Besen & Associates

The apartment building sold for $4.8 million, or $99 per square foot.

70 West 36 St

6,636 sf comm. bldg

The Makeup Artists & Hair Stylists Local 798 / Andrew Foley, Denham Wolf

Unity Church of New York / Corcoran Group Real Estate

The property sold for $4.5 million.

195 Bowery

2,000 sf retail bldg

Bowery B LLC / n/a

Thor Equities / Tom Brady, Town Commercial

The property sold for $4 million.

71-02 80 St (Queens)

18,400 sf warehouse

71-02 80th Street LL / Jeffrey Unger, Kalmon Dolgin Affiliates

71-02 80th Street Properties, Inc. / Gina Palone, National Brokerage

The property sold for $3.8 million.

537 Lenox Ave

9-units total mixed-use bldg, 8,331 sf

n/a / Michael Guttman, Rosewood Realty Group

The property sold for $3.5 million.

2538 Valentine Ave (Bronx)

6-story apt. bldg, 39-units, 29,250 sf

n/a / Joseph Friedman, Besen & Associates

Valentine & Fordham LLC / Amit Doshi, Besen & Associates

The apartment building sold for $3.4 million, or $115 per square foot.

4-34 26 Ave (Queens)

Development site

Ryan Realty Corp. / n/a

Superior Steel Studs Inc. / n/a

The property sold for $3.4 million.

181 12 St (Brooklyn)

4-story apt.bldg, 8-units, 5,880 sf

TerraCRG / n/a

n/a / n/a

The property sold for $3.1 million, or $527 per square foot.

1985 3rd Ave

4-story mixed-use bldg, 11 units total

1991 Emmut Properties / Richard T. Guarino, Friedman-Roth

1985 Third Ave LLC / Matthew Sparks, Eastern Consolidated

The property sold for $2.2 million.

208 W Fordham Rd (Bronx)

2 apt. bldgs, 28-units total

n/a / Amit Doshi, Besen & Associates

Queens Holdings 2009 LLC / Amit Doshi, Besen & Associates

The apartment building sold for $2.2 million, or $121 per square foot.

2390 Creston Ave (Bronx)

5-story apt. bldg, 21-units, 17,290 sf

n/a / Lev Mavashev, Besen & Associates

2390 Creston LLC / Richard Torres, Besen & Associates

The apartment building sold for $2.2 million, or $127 per square foot.

328 Marcus Garvey Blvd (Brooklyn)

4-story mixed-use bldg, 5-units total

n/a / n/a

n/a / Matthew Cosentino, Eric Satanovsky, R. McDonald, TerraCRG

The mixed-use property sold for $2 million, or $360 per square foot.

759 Seneca Ave (Brooklyn)

5-unit apt bldg

n/a / Derek Bestreich, Lucien Sproviero, Steve Reynolds, Marcus & Millichap

The apartment building sold for $2 million.

72 Herkimer Street (Brooklyn)

8-unit apt. bldg

n/a / Shaun Riney and Derek Bestreich, Marcus & Millichap

The property sold for $1.8 million, or $281 per square foot.

1320-1322 Sage St (Queens)

2 apt. bldgs, 12-units total

Pro Building Management LLC / Richard Torres, Besen & Associates

1320-1322 Inc. / Ivelin Spasov, Besen & Associates

The apartment building sold for $1.6 million, or $147 per square foot.

102 November 2014 www.TheRealDeal.com

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Buys continued Address

Size

Buyer / Representative

Seller / Representative

Notes

205 24 St (Brooklyn)

6-unit apt. bldg

n/a / Seth Schiffman, Erik Rodriguez, Derek Bestreich, Marcus & Millichap

The apartment building sold for $1.4 million.

200 28th St (Brooklyn)

3-story apt. bldg, 9-units, 6,000 sf

n/a / Ronnie Shaban, Besen & Associates

28th Street LLC / Lev Mavashev, Besen & Associates

The apartment building sold for $1.4 million, or $232 per square foot.

193-197 Chestnut St (Brooklyn)

2 apt. bldgs

n/a / n/a

n/a / Stephen P. Palmese and Winfield Clifford, Massey Knakal

The two properties sold for $1.1 million or $122 per square foot.

204 West 55 St

7,000 sf commercial space

Michael McNamee and Patrick McNamee / Matthew Strombelline, SKH Realty

Hampshire Hotels & Resorts / Shane Davis and Karma McDermott, SKH Realty

The former restaurant and nightclub sold for an undisclosed amount.

529-533 Myrtle Ave (Brooklyn), 100-102 Steuben St (Brooklyn)

Development site

Greystone / n/a

Rabsky Group / n/a

The two development propereties sold for an undiclosed amount.

Financing Address

Size

Borrower / Representative

Lender / Representative

Notes

45 East 22 St

60-story, 83-units, 372,000 sf

Ian Bruce Eichner / n/a

Goldman Sachs, Dune Real Estate Partners, Fortress Investment Group / n/a

A $420 million deal was arranged.

215, 245, 253 Lexington Ave, 2495, 2520 Amsterdam Ave

5 comm. bldgs

Yeshiva University / n/a

UMB Bank / n/a

A $175 million loan was provided.

461 West 34 St

399-unit hotel

Marx Development / n/a

Related Companies and Highbridge Principal Strategies / n/a

A $60 million bridge loan was arranged for the hotel.

99 Wall St

Conversion

The Claremont Group / Mark Fisher, CBRE Group

Cornerstone Real Estate Advisers / n/a

A $52 million loan was provided for the conversion.

90-02 Queens Blvd (Queens)

Conversion

Steven Wu / n/a

Madison Realty Capital / n/a

A $32 million loan was provided for the conversion. Formerly the St. Johns Hospital, the property will have rental housing, medical offices, and groundfloor retail space.

10 East 70 St

47-unit apt. bldg

10 East 70 Street Inc. / n/a

NCB / n/a

A $5.2 million mortgage and a $1 million line of credit were arranged for the cooperative.

444 East 87 St

40-unit apt. bldg

444 East 87th Street Owners Corp. / n/a

NCB / n/a

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

700 Park Ave

52-unit apt. bldg

700 Park Corp. / n/a

NCB / n/a

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

244 Madison Avenue

180-unit apt. bldg

244 Madison Realty Corp. / n/a

NCB / n/a

A $1.5 million line of credit was arranged for the cooperative.

20 Plaza St

97-unit apt. bldg

20 Plaza Housing Corp. / n/a

NCB / n/a

A $1 million line of credit was arranged for the cooperative.

11 East 87 St

74-unit apt. bldg

11 East 87 Tenants Corp. / n/a

NCB / n/a

A $500,000 line of credit was arranged for the cooperative.

107-109-111 North Ninth St (Brooklyn)

14-unit apt. bldg

107-109-111 North Ninth Street Owners Corp. / n/a

NCB / n/a

A $300,000 line of credit was arranged for the cooperative.

Other Deals Home-furnishings retailer inks $250M lease in Meatpacking District

9-19 Ninth Avenue

High-end retailer Restoration Hardware is coming to the Meatpacking District. The home-furnishings store signed a 15-year lease for roughly $250 million at Aurora Capital Associates and William Gottlieb Real Estate’s 9-19 Ninth Avenue. Restoration Hardware will move into a building that has been used for stables, French bistro Pastis, a parking garage and a market, according to the Wall Street Journal. The building owners are planning to add three floors to the building, which will create roughly 70,000 square feet of available space. After the renovation, the building will have an outdoor space on the third floor as well as a wraparound terrace on the third floor. Open Realty Advisors’ Mark Masinter represented Restoration Hardware, while the landlords were represented by Aurora’s Bobby Cayre and Jared Epstein. (The deal was announced after the deadline for the Deal Sheet.)

Ben Shaoul gets $270M in loans for East Side condo conversions Ben Shaoul now has the funds he needs to close on the purchase of two apartment buildings along Manhattan’s East Side and convert them into condos. The developer and founder of Magnum Real Estate Group received two loans totaling $270 million for the Post Toscana at 389 East 89th Street and the Post Luminaria at 385 Ben Shaoul First Avenue, between 22nd and 23rd streets. Shaoul received the loans from RCG Longview and a JPMorgan Chase affiliate, according to the New York Observer. The Post Luminaria, which is listed in city records as selling for $158.5 million, contains 138 apartments plus retail. The Post Toscana had a purchase price of $111.5 million and includes 199 units plus retail. The cost of the projects totals $350 million, which means the loans will only cover the purchase of both buildings, their pre-development phases and some of the early-stage construction. (The deal was announced after the deadline for the Deal Sheet.) 104 November 2014 www.TheRealDeal.com

California developer snags $118M stake in DoBro office tower

350 Jay Street

A California-based developer has picked up an ownership stake valued at $118 million in an office tower in the heart of Downtown Brooklyn, property records show. The HomeFed Corporation, which develops residential projects in California and Virginia, issued common stock earlier this year valued at $118 million in exchange for a 49 percent ownership stake in the 800,000-square-foot Brooklyn Renaissance Plaza at 350 Jay Street, records filed with the city show. The deal was part of a larger transfer of real estate assets owned by the insurance and real estate holdings firm Leucadia National Corporation to HomeFed in exchange for a larger investment stake in the California company. According to Leucadia’s second-quarter financial report, the insurance and real-estate holding company now owns 65 percent of HomeFed’s outstanding common stock, but has limited its voting rights so that it does not represent a majority voting bloc. (The deal was announced after the deadline for the Deal Sheet.)

Midtown Equities gets $95 million loan for Empire Stores project in Dumbo

55 Water Street

Midtown Equities received a $95 million construction loan to proceed with its $150 million Dumbo warehouse conversion project known as Empire Stores. M&T Bank Corporation provided financing to the Cayre family–led real estate investment firm, in partnership with White Plains–based real estate investment firm Rockwood Capital and Brooklyn-based developer HK Organization. The four- and five-story former coffee warehouse at 55 Water Street, fronting the East River, is slated to offer 400,000 square feet of space for retail, restaurants and offices. (The deal was announced after the deadline for the Deal Sheet.)

Development updates Sales updates

Gramercy Park

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160 East 23rd Street Condo sales have launched at Gramercy 23, a new 11-story, 18-unit condo building designed by architect Michael Kang and developed by 160 Realty Development. The building includes 16 one-bedroom units and two full-floor two-bedroom units. Each one-bedroom condo includes a home office, and each two-bedroom condo includes a balcony. One-bedrooms start at $1.05 million; two-bedrooms start at $2.8 million. Building amenities include a roof deck. Bond New York is handling sales. Contact: mchen@ bondnewyork.com.

Lower East Side 100 Norfolk Street Sales have launched in the 38-unit building in the heart of the Lower East Side. Construction is scheduled to be completed in late 2015; the building, designed by Eran Chen of ODA, will be comprised of studios through three-bedroom residences, including three penthouses. Prices range from approximately $675,000 to over $3.26 million. The building hopes to offer a 421-a tax abatement. Amenities will include a 24hour concierge, yoga studio and gym. Ariel Tirosh of Douglas Elliman is handling sales. Contact: www.100Norfolk.com. Leasing updates

Williamsburg

250 North 10th Street

Crown Heights 341 Eastern Parkway

341EPW, an 8-story, 63-unit building developed by BlueJay Management, is 65 percent leased. Originally planned as a condominium, the building stands at the corner of Eastern Parkway and Franklin Avenue. For remaining units, rent begins at $2,200 for a studio, $2,700 for a one-bedroom and $3,400 for a two-bedroom. Penthouses begin at $3,800. Building amenities include a lobby lounge, fitness center and landscaped roof deck; the building’s retail space is occupied by Capital One and Starbucks. 341EPW also offers parking and a pedestrian sidewalk plaza. Aptsandlofts.com is the agent. Contact: www.341epw.com.

Crown Heights 500 Sterling Place

The seven-story, 77-unit luxury rental building on the border of Crown Heights and Prospect Heights is 75 percent leased. The building is comprised of studios, one-bedrooms, and two-bedrooms, though only studios and two-bedrooms remain; rents start at $2,115 and $3,194 a month, respectively. The rooftop lounge includes an outdoor movie projector. Building amenities include private and bicycle storage; residents can reserve custom 500 Sterling bicycles. AARE is handling leasing. Contact: www.500sterling.com.

Bedford-Stuyvesant 333 Greene Avenue

LCOR’s 250N10 is 100 percent leased. The building’s 234 units include studios and one-bedroom and two-bedroom apartments. Rent for one of the last units to be signed — a two-bedroom, two-bathroom — was $6,625 per month. The building features the work of two artists: an exterior mural by the street artist Mr. Brainwash, and new work from Chilean artist Sebastian Vargas in the elevator banks on each floor. There are 12 unique pieces in total. Other building amenities include a furnished roof deck, fitness center, café-lounge and 24-hour concierge services. Leasing was handled by the Marketing Directors. Contact: www.250N10.com. 106 November 2014 www.TheRealDeal.com

Developed by Bonjour Capital, the 56-unit, 12-story rental building is 100 percent leased. The building features one-, twoand three-bedroom apartments. Each unit includes a private balcony, terrace or dedicated roof deck space. Prices ranged from $2,175 to $4,582 a month. Building amenities include a fitness center and indoor and outdoor resident lounges. Storage and parking can be had for an additional monthly fee. Aptsandlofts.com was the agent. Contact: aptsandlofts.com. Compiled by Brendan O’Connor

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One-bedroom, two-bathroom, 956-squarefoot interior, 800-square-foot exterior condo, at the Fitzgerald. Apartment was recently renovated and features a wraparound terrace facing south and east toward Central Park. Built in 1920, the building features a full-time doorman and concierge. Maintenance: $1,423 per month; taxes: $708 per month. Asking price: $1,995,000; one day on market. (Brokers: Tami Wasserman, Citi Habitats; Greg Kammerer, Corcoran) “With this deal, I didn’t even have one open house. I put the listing up and was having a photographer in a couple days later to take some pictures. I got a call from a broker I know at Corcoran who was working with a buyer who’d put a bid in on the penthouse next door and missed out a few years ago. They wanted to know if they could see the apartment before the open house. So I said sure, come over after the photographer is gone and I’m done cleaning up. They did, and we went into contract three days later.” Tami Wasserman, Citi Habitats

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foot ceilings, Brazilian sodalite marble in the kitchen and statuary white marble in the bathroom. Prewar building built in 1909. Maintenance: $2,300 per month. Asking price: $4.75 million; 28 weeks on market. (Brokers: Robert Dankner, Prime Manhattan Residential; Leonard Steinberg, Urban Compass) “This building is one of Soho’s Artist-in-Residence co-ops. Tenants have to sign something called a Soho letter, and register with the Department of Cultural Affairs as a work-

ing artist. The letter says that the tenant, if they are not an artist, would be the sole bearer of responsibility of any fees or fines issued as a result. The buyer in this deal was to be the first non-artist owner in the building, although I don’t know if all of the other tenants are registered, because it’s a somewhat secret, onerous process. Making money off your art doesn’t necessarily qualify you. This was a wonderful buyer, really nice guy. He went through the traditional process, had a board interview. One owner in particular, though, wanted to keep the building strictly artists. The buyer is a surgeon, he’s really passionate about his work. He told the other tenants, ‘I create art with a scalpel rather than with a brush.’ And you know, he didn’t want to rip the place apart. The classic, bohemian Soho vibe is what he liked about it. He went through three interviews. I’ve never seen a process quite this laborious. They were just afraid of some hedge-fund guy who was going to turn the place into a glass palace.” Robert Dankner, Prime Manhattan Residential

Midtown $795,000 350 West 50th Street, #11H

One-bedroom, one-bathroom, 585-squarefoot unit in a condominium building, Two Worldwide Plaza. Apartment faces northeast; building features a sundeck, laundry room, gym, garage, and 24-hour concierge and doorman. Maintenance: $730 per month; taxes: $639 per month. Asking price: $815,000; nine weeks on market. (Brokers: Sarah Son and Hilda Peled, Bracha New York at Keller Williams NYC; Sam Ahn, Newstar Realty) “This building is very popular with investors. It’s very easy to rent or re-sell here. The tenant was on a month-to-month lease. He works in a famous restaurant. The investor came in and decided to purchase the apartment, and he kept the tenant as well. The sale was all-cash. You know, there’s not a lot of inventory in this part of Manhattan under $1 million. This unit is on the 11th floor, facing north — we were very lucky to get what we sold for, especially it not being renovated. People would come in to look at the place and tell us we were crazy for asking what we were asking. But you only need one buyer! And everything really is just about the location.” Sarah Son, Bracha New York

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Rental to condo

from page 22

double the number in 2013, according to data from Corcoran Sunshine Marketing Group, which tracked a total of 1,051 conversion units that hit the market in 2012 and 2013. The firm projected just over 2,000 in 2014 and 2015. Justin D’Adamo, a managing director at Corcoran Sunshine, said developers are looking to tap into the strong market, and they want to strike while the iron is hot. “You want to get into the market when the market is strong. You can do that quicker with a conversion,” he said. Another advantage for developers, he said, is the ability to bring new inventory to established neighborhoods which have little, if any, buildable land, like Battery Park City and the Upper East Side. “If a developer has a portfolio of rental buildings, they can convert without having to pay for the land,” he said. For example, Corcoran Sunshine is marketing 22 River Terrace in Battery Park City, where

Centurion Partners is converting existing studio, oneand two-bedroom rentals into condos with two, three-, four- and five-bedroom units. “The only way to bring new inventory to Battery Park City is to convert a rental building,” D’Adamo said. Rental-to-condo projects also provide a way for developers to compete with ultra-luxury new developments — another byproduct of high land prices, said Danny Fishman, managing partner of Gaia Real Estate, which is converting 144 rental units in the Corinthian in Murray Hill into condos. “Land prices jumped so much, it basically means no one can build to compete with the middle market,” he said. “That pushes new development to [the] high end, so conversions are competing on a step below.” “It’s a price range that’s coming below the new development [prices], but you still get a luxury building with

all the amenities,” Fishman said. “Even if you have a lot of money, it doesn’t mean you need to spend ridiculous prices for a unit. If someone wants it for an investment, he needs a little bit of a return.” Gaia purchased the rentals from former Gov. Eliot Spitzer’s family company for $147 million. It is converting to condos that will be priced around $1.5 million for a one-bedroom, $2 million for a two-bedroom and $2.5 million for a three-bedroom. The relative speed to market also makes conversions less risky than a ground-up development — something that’s seen as an asset since the market crashed in 2009. “It’s a shorter period from A to Z,” Fishman said. “Let’s say the market changes. In development, you have to continue building it. In conversions, you can always say, ‘OK, I’m taking the inventory not sold and I’m renting it,’ so at least you have cash flow.” TRD

Durst for $18.9 million, and two days later, Famitech closed its sale to Durst for $58 million. The Deutsch parcel was set to close by Sept.15, but had not at press time. Now, Deutsch and Lincoln are trading lawsuits in Queens County related to how much control Durst has over the project, a battle that could cause lengthy delays.

developing the project,” said Stephen Meister, a partner with the law firm Meister, Seelig & Fein, which is representing Lincoln. Deutsch’s attorney sees it far differently, arguing that his client is being shooed from a great deal. “They have shamefully portrayed Astoria Equities as just a land owner which is refusing to close to ‘extort money,’” said David Tannenbaum, a partner with Stern Tannenbaum & Bell. “Lincoln had an obligation to protect Astoria Equities’ interests but … instead secretly negotiated an unlawful deal to sell the development property in which Lincoln retains an interest.” Attorneys representing both sides agreed that there would be no sale of the property pending a hearing that was set for Oct. 31. TRD

Hallets Point from page 92 In August 2008, Gindi assigned his contract to Lincoln, shortly after which Lincoln went public with its plans to seek a rezoning of the area and build 2,400 apartment units in several high-rise towers. Over the next several years, Lincoln quietly pursued its goals, filing plans with the City Planning Department in 2009 and the public review process kicking off in 2011. In the last three years, Lincoln spent more than $1.7 million in lobbying and other expenses to move the project forward, city records show. In mid-to-late 2013, Durst entered the picture. Insiders said — and operating agreements indicate — that Lincoln was always looking to sell its controlling stake to a larger developer. The City Council approved Lincoln’s plan in October 2013. Nearly a year later, on Sept. 22, Zavas Realty sold its parcel to

Legal wrangling Lincoln accused Deutsch of being unhappy with the planned compensation, saying this was why Deutsch balked at the sale and disputed the terms of the deal. Deutsch claims it has a right to retain a role in the development under its contract. “Deutsch knows full well that Lincoln did in fact sell — that is, caused Hallets A Development Company to sell — the project site to Durst, and that Durst controls and will be

Commercial market from page 28 ations to Nashville, following its purchase by Athlon Media from the Condé Nast division Advance Publications. The move opens up just under 80,000 square feet on a floor-and-a-half of sublet space at SL Green Realty’s 560,000-square-foot office tower located between 44th and 45th streets. The lease runs until 2020. Leasing agents Peter Gross, Louis Puopolo and Alexander Furst from Douglas Elliman Commercial listed the space on CoStar, although without an asking rent. Athlon and the brokers did not respond to a request for comment. The average asking rent in Midtown was down slightly last month by 1 cent, to $75.73 per foot compared to $75.74 per foot in September, the Colliers figures showed. The availability rate in Midtown rose by 0.1 point, to 10.7 percent, during the same time. “The availability rate is up slightly in Midtown due to large new availabilities along the Third Avenue and Park Avenue corridors,” said Joseph Harbert, president of the eastern region of Colliers.

Midtown South The investigative journalism publisher ProPublica inked a 10-year deal in Trinity Real Estate’s 155 Sixth Avenue, paying about $60 per square foot, information from leasing database CompStak showed. The nonprofit news service signed a deal in September for 14,709 square feet, taking the entire 13th floor of the 226,376-square-foot building located between Spring and Dominick streets, data from CoStar Group shows. An agent for the landlord did not immediately respond to a request for comment. 110 November 2014 www.TheRealDeal.com

“I can indeed confirm that we have a deal for that location,” a spokesperson for ProPublica said in an email, but did not elaborate beyond identifying CBRE’s Gerry Miovski, based in the firm’s Downtown office, as the publisher’s broker in the deal. ProPublica is currently located on the 23rd floor of the 358,637-square-foot office building at 55 Broadway in Lower Manhattan. ProPublica’s rent was slightly higher than the average asking rent for Midtown South last month, which rose to $58.54 per foot. That was up 35 cents from September, Colliers figures showed. Although higher, that is far below the market’s highend taking rent, which rose dramatically over the past year to $86.13 per square foot from $70.79 per square foot in October 2013, the Newmark figures revealed. “We’re seeing rents in Midtown South in the $80s and $90s [per square foot], and some over $100 per square foot,” Jennings said. She added that $100 per foot “is about double what the high end of that market was getting about 10 years ago.” In October, the availability rate in Midtown South tightened by 0.3 points to 8.2 percent, compared to September, the Colliers data revealed.

Downtown The bold headlines trumpeting a resurgence of Downtown tend to focus on leasing west of Broadway, but an agent for an older building east of the famous street hopes to change that. A team of Newmark brokers including Vice Chairman Brian Waterman last month began marketing two large blocks of space with a total of nearly 300,000 square feet in 1 State Street, a 975,000-square-foot building between Water

and Pearl streets. The 35-story building, built in 1969, is home to tenants including the New York State Banking Department. Newmark listed floors 15 through 18 with a total of 106,320 square feet, and 28 through 35 with 188,213 square feet. The smaller space, which CoStar shows is being vacated by Ambac Financial Group, will be available in January 2016. The larger block is leased to financial ratings firm Fitch, which is consolidating space at 33 Whitehall Street, and will be available in January 2015. Waterman declined to comment on what tenants were in the building. The asking rent for the lower block was in the “mid-$50s” and the upper block a few dollars more, Waterman said. Landlord Acta Realty is refurbishing the building, including the lobby and elevators, Waterman said. Despite being older than the more modern towers of the World Trade Center or Brookfield Place, Waterman said it is a Class A tower with large floor plates and sweeping harbor views. “We are not that $75 [per square foot] building,” Waterman said, referring to the more expensive recent construction towers to the west. “Ownership is looking to make deals where the market is.” The average asking rent Downtown rose by 21 cents per foot last month to $51.91 per foot, while the availability rate ticked up slightly, rising to 12.3 percent from 12.2 percent in September, figures from Colliers said. Downtown is the one market where the high-end taking rents have not surpassed their previous highs, the Newmark data revealed. Although generally on the rise since 2010, the average taking rent for top-tier transactions was $58.77 per foot, below the market’s peak in 2007, when it hit $61.30 per foot. TRD www.TheRealDeal.com January 2012 00

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from page 38

kill,” he said. “So I love buying great brand names that have One of the investors in the project is New Valley. not such good management, because if the management New Valley is itself owned outright by the publicly was great, how much can I add to the equation?” traded holding company Vector Group, the company The story of how Lorber came to Elliman begins founded by LeBow, which Lorber heads as with the aforementioned attorney Ziegler, president and CEO. LeBow remains chairman. managing partner at the Long Island-based As of Sept. 30, Lorber held a 4.8 percent corporate law firm Certilman Balin. Ziegler stake in Vector — around $108 million worth had represented Lorber in the 1980s, when he of a stock that has jumped nearly 34 percent was putting together real estate syndications to over the past year alone. buy rental properties to convert them to co-ops. With sales of $546 million in 2013, New Another client of Ziegler’s was Dottie Valley accounts for just 35 percent of revenue Herman, who was running the struggling in Vector, which generates most of its Prudential Long Island Realty, and had cash through its majority ownership of asked the attorney to find someone to Liggett Group, a manufacturer of low buy part of the company. cost, generic cigarettes. Vector Group Chairman Bennett LeBow “I saw the landscape,” said Herman, whose company at the time sold homes from the New Valley has an 18.4 percent stake in an Schrager’s 215 Chrystie Street Hamptons to Queens. “Public companies were coming into the business and you couldn’t compete with them.” Ziegler said he took the deal to a few people he knew. One who passed on it was Sterling Equities Chairman Fred Wilpon, most known these days as the principal owner of the New York Mets. Lorber purchased about a third of the company in 1997 for $1.7 million and eyed an expansion into Manhattan. Around 2002, Lorber approached an associate he knew named Andrew Farkas, who at the time was the CEO of Insignia Financial Group, which owned the Manhattanbased white-shoe residential firm Elliman and the commercial brokerage Edward S. Gordon, and pitched a deal to buy the residential side. Lorber said he was rebuffed, until a chance meeting about a year later in his 56th Street office building. The two men got on the elevator and Lorber watched as Farkas got off on a lower floor. Lorber asked the building’s receptionist who was on that floor, and learned it was the office of Blum Capital Partners, which then controlled the majority of the commercial brokerage CB Richard Ellis. “And so I said, ‘Ah, Andrew must be selling Edward S. Gordon to CB Richard Ellis, but they’re not going to want their residential business,’” Lorber recalled. “So I called his office phone, knowing he wasn’t back yet, and I left a message that said, ‘Andrew, I know what you’re doing. I want to buy the residential business. Call me.’” Herman said that while all she initially sought was a partner with deep pockets, she ended up with one who helped her realize her dream of expanding to the city. “Frankly it was a good thing, because Howard’s very bright,” she said.

New Valley’s skin in the game varies from project to project, and can range from as much as $23 million to as little as a few hundred thousand dollars. Andrew Heiberger, founder and CEO of rival brokerage Town Residential, said Lorber’s appeal as an investor may go beyond the size of the check he’s cutting. “The concept is that if Howard Lorber would invest in the project, then the Douglas Elliman sales team would support it,” he said. “I don’t think in most scenarios that the joint venture is so attracted to his equity investment,” he added, pointing out that in many cases New Valley isn’t investing huge sums of money. “I don’t think the reason is they need his $6 million.” If Lorber seems busy, it may be because he has plenty of opportunity. “He’s incredibly active. I mean, he’s partners with a lot of guys and sees a lot of deals in New York,” said hotelier Ian Schrager, who is working with Lorber on three different developments. “I think being in Elliman gives him an early look. He gets to see a lot of deals and he gets to see them early on.” Perhaps most prominent among New Valley’s investments is the one at 701 Seventh Avenue, also known as 20 Times Square, the 39-story mixed-use tower that will be anchored by Schrager’s 452-room Marriott Edition, which is slated to open in 2017. It will also include 40,000 square feet of entertainment space, several restaurant floors and 76,000 square feet of retail. The building will be wrapped in a 20,000-square-foot LED billboard, the largest in Times Square. All told, the retail and billboard combination could bring in revenue upwards of $50 million a year. New Valley put up $11.3 million for an 11.5-percent stake in the project. Among his most interesting ventures is his deal with Shvo. The mercurial broker-turneddeveloper, who was a top producer at Elliman — he logged $300 million in sales in 2003 after only four years in the business — but made a very public exit in 2004, is building a soaring condominium at 125 Greenwich Street that will nearly rival the height of One World Trade Center. New Valley put in $10 million, one of an array of investors that provided equity for the project. Lorber’s involvement in the project surprised some observers, but Shvo recently told TRD they always had a “great” relationship. “We see each other almost daily at Cipriani, and Howard likes the project,” Shvo said. “He believes in the project. I think he believed in the vision, which I think is the most important thing.” Lorber also runs in circles with some of the wealthiest people in town, a boon for a guy who sells real estate. “The world calls Howard Lorber,” said longtime Elliman broker Leonard Steinberg, who moved to Urban Compass in June. “He’s very connected to a lot of opportunities. He gives out great listings to brokers.” The chairman is known as something of a kingmaker for handing out those choice assignments to Elliman agents. Lorber maintained he has a hands-off management style, but can nurture talent where he sees it. “I am very involved with a lot of brokers,” he said. “I find that I’m very good at taking a good broker and making them a superstar. I’m not that great at taking a brand-new broker and making them good.” TRD

“Ultimately, Howard’s got money in deals and he’s an investor. I’m never just talking to a broker. He’s a man with broker sensibilities.”

Bankrolling building In mid-September, Lorber mingled with guests at the sales launch for 11 Beach Street —the residential conversion in Tribeca built by prolific developer Ziel Feldman — and he brought Elliman firepower with him. In attendance were celebrity broker Eklund and his partner, John Gomes, who are marketing the 27 condos and townhouses along with top producers Melanie Lazenby and Dina Lewis. But if the asking price for the first three apartments of roughly $2,000 per square foot wasn’t wholly remarkable, the launch was unique in one aspect. 112 November 2014 www.TheRealDeal.com

Steve Witkoff, the witkoff group But Vector is pretty liquid — it’s got about $380 million in cash on hand and $370 million in marketable securities — and is looking to pump more money into development projects. In fact, since 2011, New Valley has poured more than $131 million into projects, including residential developments in New York City and Miami Beach. The portfolio also includes approximately 5,500 apartments in and around Baltimore County, Maryland; hotels in Manhattan, St. Barts and Bermuda; and hundreds of acres of land in Palm Springs, California, and Italy. There may be no other investor in the city who brings to the table the same attributes as does Lorber, who, as the head of a firm with more than 4,000 brokers, has an unparalleled view on the market. “He’s one very sophisticated guy, with his finger on pulse of the market,” Witkoff said. “I don’t think you can be in the real estate business today anymore without having your finger on the pulse. It’s just too complex and comprehensive a business to just throw a dart at the map.” Witkoff continued, “Ultimately, Howard’s got money in deals and he’s an investor. I’m never just talking to a broker. He’s a man with broker sensibilities.”

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Residential firms from page 49 And Keller Williams agents pay about $150 in monthly fees, which covers errors and omissions insurance, access to several listings databases and analytic tools, as well as marketing and tech support.

Management As a smaller firm, with just 30 agents, Platinum has a manager for every three agents, one of the lowest ratios out there, it claims. Town, which had 630 agents and staff members as of Sept. 30, has a five-to-one agent-to-staff ratio, giving agents “access for assistance on all topics from transactional to professional development,” the firm said in its survey. At some firms, managers don’t handle sales personally, leaving the business to agents whose pay is tied to commissions. “No manager or person on salary is permitted to take out clients, take exclusives or do deals for compensation,” said DJK Residential managing director Phyllis Pezenik. It wouldn’t be ethical, she said, “as it essentially puts them in competition with the very people they are managing, and results in a conflict of interest.”

Bold New York agents recently won an all-expense paid trip to Barbados.

Work culture A growing number of firms have embraced an office culture that aims to disprove the image of the cutthroat, competitive brokerage world. Miron Properties, with 102 agents, runs periodic anonymous agent surveys to stay on top of what agents are thinking. “We have a ton of team-building activities,” said founder and director Jeff Schleider, who also cited things like Miron’s bullpen-style office, casual dress code and

114 November 2014 www.TheRealDeal.com

Miron Properties rewards brokers with use of its membership in the Classic Car Club of Manhattan.

office foosball table as reflections of the company’s culture. The Brooklyn office also has a backyard and barbecue. Urban Compass agents (and staffers) say collaboration is a hallmark of the nascent brokerage. “In an industry full of independent contractors, Urban Compass is a place where, yes, there’s that desire to make a transaction happen on the agent level, but everyone has a connection and desire to collaborate and build a brand and experience that’s bigger than the individual deal,” said Stern. Douglas Elliman organizes a four-day retreat in Atlantic City for brokers, with training, motivational speakers and networking, according to one broker. It’s a great way to boost agents’ “network within a network,” the broker said. At some smaller brokerages, the firms’ principals take a personal approach, too. “I still take whoever wants to go to see my favorite Grateful Dead cover band,” Dark Star Orchestra, said City Connections’ Schlamm, who says he has also thrown work parties on 115-foot yachts. TRD

Hudson Yards We advised Sherwood Equities in the most eagerly anticipated development in years—the $200 million sale of almost half a block on 10th Avenue between 34th and 35th Streets—to Tishman Speyer.

Chelsea We guided a group of syndicated lenders through a $165 million credit facility secured largely by over $80 million in artwork. Meatpacking District When a 150,000-squarefoot boutique hotel goes up on a vacant lot in this vibrant neighborhood, it will be partly due to our efforts— we represented the owners in the ground lease and in their JV agreement with the Rockpoint Group.

Midtown We represented a major high-end retailer in the 20-year lease extension and major expansion at the Peninsula Hotel on Fifth Avenue.

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HOT DEALS IN HOT NEIGHBORHOODS Think Lower Manhattan. Think Far West Side. Think about the neighborhoods people are talking about. Our New York real estate lawyers are making deals where they count—NoMad, Hudson Yards, Chelsea, Midtown, the Meatpacking District, South Street Seaport. Backed by nearly 900 attorneys in 14 offices nationwide, BakerHostetler is the right firm in the right place at the right time.

South Street Seaport The seven-story Jade Hotel Seaport at 33 Peck Slip will draw upon the heritage of both the historic seaport area and Colonial Williamsburg. We advised Gemini Real Estate Advisors in the acquisition of the property.

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according to Paris. Eastern has a five-person management team that doesn’t handle transactions, but is available for daily, weekly and monthly coaching. “The philosophy of Eastern is not about having a few big names,” said Paris. To that end, 63 percent of the firm’s 60 agents have been there more than five years. Eastern also employs five full-time analysts to put together materials on exclusives and analysis for potential clients, freeing up brokers’ time. “By committing resources to staffing and to appropriate research and information, that frees brokers to do what only they can do,” she said. The firm doesn’t operate from the top down, either. “We encourage brokers not only to make a name for themselves at Eastern, but also in the industry,” said Paris.

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ommercial brokerages are deal-focused by nature, but that doesn’t mean they’re not collaborative. At Marcus & Millichap, for example, brokers are encouraged to share information, research and market intelligence. “We do not want our brokers working in silos,” Lee & Associates also noted in its submitted survey. “In fact, our recruiting efforts are geared toward ensuring that we have brokers who are not competing for the same clients.” Brokers are expected to become experts in either an industry or a geographical area. “While this limits our growth, it creates a strong collaborative office culture,” the survey said. Likewise, at HFF, one broker described the work culture as “very entrepreneurial, allowing agents autonomy” while offering support when it is needed. Not that it’s only work without play, as one agent from CPEX said. “You can never be too sure when a Nerf gun battle will suddenly break out,” Christopher Burti, an associate in industrial sales and leasing, wrote in his survey. “You always have to be armed and ready.” TRD

New development marketing from page 56 projects representing 329 units, dropping to 10th this year. That’s down from fourth in TRD’s last ranking, when it had more than 1,200 units. A spokesman for Rose said it came down to “pipeline and timing,” and pointed out the company is set to launch the 612-unit rental conversion of 70 Pine Street next year.

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Earlier this year, Urban Compass launched its new development wing, and in July brought in former Extell design chief Roy Kim, who worked on buildings such as One57 and the Carlton House, to lead it. Kim, who earlier in his career worked at Corcoran Sunshine, has built a team of seven, including new development director LaVon Napoli, who previously worked as head of residential marketing for Rose Associates. The company started with a rental project, Naftali Group’s 245 West 25th Street, and has helped launched three condo developments so far. The four projects have a total 94 units, bringing Urban Compass in at 16th in the ranking. “We started out with rentals because it’s an easy way to break in. About six months ago we went into sales,” Kim said. “It’s really the sign of a healthy brokerage — not just doing resales but also taking on new projects.” Leasing guru Nancy Packes began ramping up her eponymous firm in 2009 with the termination of her non-compete clause with BHS, where she worked as head of the company’s project marketing division. Packes ranked in the middle of the 2011 list with more than 600 units and, sticking with rentals, her firm shot up to the fourth spot with 1,753 units this year. Her projects include the Strata at Mercedes House, Invesco Real Estate’s portion of Two Trees Management’s zig-zag building in Hell’s Kitchen, and the sister building on 29th Street. Packes said she sees a cooler market ahead and smaller apartments at lower price points, a turn she thinks provides more opportunities to boutique marketing groups. “As prices come down,” she said, “the field opens up tremendously for other firms to participate.” Another company making inroads is the Long Island City-based Modern Spaces, which made its name in the downturn taking over condo-turned-rental projects in Queens. The firm, 9th in the ranking, is expanding deeper in that borough and this year launched its first project in Manhattan, the 117-unit rental School House at 371 Madison Street. “During the last few years when everybody was doing rentals, rentals, rentals, I mentally prepared myself to be a rental company,” Modern Spaces founder, president and CEO Eric Benaim said. And as condo developments have become more prevalent in LIC, they have made up more and more of Modern Spaces’ business, accounting for half of the company’s projects over the past two years, he added. “More and more people are getting into condos, which we’re happy about.” All told, the top 15 firms TRD surveyed brought to market nearly 16,000 condo and rental units throughout the city during the period surveyed, from 2013 to 2014. TRD

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These 6 e-tailers are going brick-and-mortar in NYC Companies that made their names online are supplementing business with physical locations By Kerry Barger etailers that once solely depended on clicks to drive sales are increasingly building up bricks as a supplement to their online business. Gap subsidiary Piperlime opened its first storefront at Soho’s 121 Wooster Street in 2012 after launching a successful pop-up shop for Fashion’s Night Out two years earlier. Bonobos Guideshop, an online menswear outlet, has opened 10 locations since experimenting with fitting rooms in the lobby of its 45 West 25th Street headquarters back in 2011. Here’s a look at six more e-tailers going brick-andmortar in New York City:

The drone-touting online megastore is preparing to deliver its first retail outlet to Midtown, though the store’s size, lease agreement and inventory remain unknown. The space, which will be located across from the Empire State Building at 7 West 34th Street, will serve as a mini-warehouse for same-day delivery inventory, product returns and exchanges as well as in-store pickup for online orders. Sources told the Wall Street Journal the storefront could double as a showroom for Amazon-branded products, but also warned that the store could be shuttered if company management deems it a failure. Trunk Club aficionados who are too antsy to wait for their hand-

57th Street

picked styles to arrive in the mail can breathe a sigh of relief. The Nordstrom-owned company is opening its first showroom in New York City. The menswear and styling outfit will take a spot at the Villard Houses at 455 Madison Avenue, between East 50th and East 51st streets. Trunk Club will occupy 26,190 feet at the six-story Renaissance revival mansion. Though this is the company’s first foray into New York, Trunk Club operates locations in Dallas, Los Angeles and its home base of Chicago. Warby Parker co-founders David Gilboa and Neil Blumenthal had their sights set on Soho’s 121 Greene Street for its first permanent retail outlet, which opened in April 2013. Since then, the trendy eyewear purveyor has opened two other New York locations. One storefront opened at 819 Washington Street in the Meatpacking District. The store’s most recent location, at 1209 Lexington Avenue on the Upper East Side, opened in April. An influx of skinny-jean-wearing hipsters sporting thick-framed glasses at the company’s latest outpost could boost Lexington Avenue in the 80s, a neighborhood where retail largely consists of mom-and-pop shops. The beauty and grooming e-tailer opened its first-ever brick-and-

mortar location at 433 West Broadway in Soho. The store is designed to help consumers interact with its website. Shoppers can build their own “Birchbox” and browse products based on facial features, like cheek, brow or lip. Online jewelry retailer BaubleBar opened a small showroom at 230 Fifth Avenue in October 2012. BaubleBar Although it sells its jewelry in Nordstroms and Anthropologies across the country, the Fifth Avenue location is the e-tailer’s first brick-andmortar store exclusively branded to BaubleBar. There, shoppers can browse bling-like necklaces, earrings and rings in-person. The ecommerce site is moving its headquarters to a 52,600 square-foot warehouse space in Sunset Park’s Industry City, but will retain its first location in the Flatiron District. Fashionistas with absolutely nothing to wear can take a trip down to Rent The Runway’s freestanding store in the Flatiron District, which opened its doors to thrifty shoppers in September. The service, which rents designer dresses to those on tight budgets, opened its first brick-and-mortar location at 16 West 18th Street. Shoppers book appointments online before visiting the store to consult with a style expert. TRD

from page 62

with gold details and 162,000 square feet. That restaurant, reached from Sixth Avenue, opened in 2013. A message left with Michael Joseph, a Colliers International agent handling leasing at No. 57, was not returned. 111 West 57th Street JDS Development Group and the Property Markets Group, the development team behind Walker Tower, is planning to put up a slender 1,350-foot tower at this site, which includes two parcels: an empty lot, and the landmarked Steinway Hall building from Warren & Wetmore, the architectural firm that worked on Grand Central Terminal. The 1925 building will be incorporated into the tower’s design. In summer 2013, the developers shelled out $178 million for the site, which included transactions for the land as well as the building that leases it, according to city records. Designed by SHoP Architects, the spear-like building will contain about 50,000 square feet of retail, including both the Steinway building and a new modern section to the east of it, according to sources close to the project. The retail space is not yet being marketed, and no brokers have been selected. The entire complex is supposed to open in 2016. It was an active construction site on a recent afternoon. 124 West 57th Street Another hotel-restaurant combo to make waves is the onetwo punch of the Viceroy, a ground-up 240-room hotel that debuted last year, along with its street-side dining offering, Kingside Restaurant. In mid-October, it hosted a party for the premiere of the Brad Pitt movie, “Fury.” And in a telltale sign for the strength of the market, the 118 November 2014 www.TheRealDeal.com

29-story building was sold before it really fully opened. In September 2013, American Realty Capital New York Recovery, a real estate investment trust, bought the building for $149 million — or more than $600,000 per room — from developer ARK Partners. Rates for rooms at the hotel (half of which face Central Park) started at about $400 a night for an October weekend. That per-room sales figure “is a great number, but not outrageous,” said Michael Azarian, an agent with Massey Knakal Realty Services and a retail specialist. However, in a once passed-over neighborhood, “I think the deal just speaks to the general demand for the area,” he said. 227 West 57th Street The biggest spark for 57th Street’s reinvention, many brokers say, will be the arrival of a 1,775-foot tower here whose base will contain the first New York outpost of Nordstrom, the West Coast-based high-end department store. Developed by Extell, the store portion will encompass 285,000 square feet across seven stories, according to a Nordstrom spokeswoman; its flagship Seattle store has five floors. Currently a hole in the ground, the project is being built on the site of the first New York location of the Hard Rock Café, which moved to Times Square in 2005. It’s forecast to be completed in 2018, the spokeswoman said. While shoppers will undoubtedly descend on the department store, a far-reaching revival of the street’s fortunes will hinge on whether other luxury retailers’ stores open around Nordstrom’s. Otherwise, “people will just get in cabs and go home,” said Lansco’s Abrams.

What has held back the street in general is the dearth of spacious retail berths that are common elsewhere, Azarian said. “This has been a transitional challenge,” he noted, adding that the Nordstrom project has changed the overall calculus in a big way. 220 West 57th Street One developer who seems to be pinning its hopes on the Nordstrom effect is Thor Equities, which is in contract to buy a four-story retail building across the street from the site. That building, a four-story 1897 Gothic landmark originally built for the American Society of Civil Engineers, is today home to Lee’s Art Shop, a surviving trace, in a sense, of the area’s once-strong artistic heritage. Joseph Sitt, Thor’s chief executive, who has aggressively snapped up retail properties in fashionable neighborhoods like Soho in recent years, agreed to purchase the site last summer, TRD reported; a price for the 22,000-square-foot structure was not disclosed. The sale had not been finalized by mid-October, property records indicate. A spokesman for Thor did not respond to a request for comment by press time. “It’s a smart buy on a street that is undervalued for retail,” Joanne Podell, a vice chairman at the brokerage Cushman & Wakefield, told TRD last summer. Sitt seemed to sum up the thinking of many in a statement when the deal came to light: “With a series of luxury condos and hotels joining an already robust commercial market, and landmarks like Carnegie Hall, West 57th is primed to become one of the hottest streets on the entire island of Manhattan.” TRD www.TheRealDeal.com January 2012 00

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WH AT Th e y ’ r e Reading Now

Real estate pros share their pick of books for business and fun Where do you look for inspiration and insight? This month, The Real Deal polled leaders in the industry to find out what they’re reading, how the book was recommended to them and what they’ve found most compelling about it.

Maryanne Gilmartin President and chief executive officer, Forest City Ratner Companies What are you reading right now or what did you finish most recently? “The New York Nobody Knows,” by William B. Helmreich. About a New Yorker who walks 6,000 miles of city terrain to really try and understand New York; the author spends four years and took himself to every corner of the city. So far it is a captivating and human picture of the city’s true essence. It takes me much longer to get through fun reading these days, but this is an easy one

to keep me awake past bedtime. What spurred you to read that book? It is a book about the life of our city, which I am passionate about. [I found it at] Rough Trade in Williamsburg, which is not only an amazing record store for LPs but a great book store for special reads. Would you recommend it to others? I think anyone who loves New York would find this book a treat.

Mickey Conlon Broker, CORE What are you reading right now or what did you finish most recently? Right now I am hurtling through “New York 1900,” which, chronologically, is the second installment of Robert A. M.

Stern’s masterful five-volume account of the evolution of New York City. I recently finished “New York 1880” and found myself unable to pause between volumes. It’s catnip for history buffs. What spurred you to read that book? The entire series has long held a place of honor on the bookshelf, but it would only make its way down occasionally to be used as a reference — usually to settle bets about the history of a particular building. It was only last year that a particular passage had so captured my imagination that I decided to begin reading the entire series. At first it seemed like a herculean feat — I mean, these books are heavy — but I quickly found myself irrevocably captivated, and a little bit more muscular. These books are trainer-approved. Has anything you read in it stuck with you? Would you recommend it to others? For those of us who ponder the wonders of the New York skyline, it’s easy to marvel at architectural innovations simply as feats of engineering, but there’s so much more. We take for granted the simple conveniences that the telephone and the elevator afford

us, but post-Civil War New Yorkers could never have imagined how these new inventions would propagate the city’s rapid growth toward the sky. I wholeheartedly recommend this series to anyone interested in architecture, the history of New York, or even sociology. The whole set contains more than 5,000 pages, which may seem daunting, but it’s worth the commitment. When devouring an entire city, it’s best to take it one bite at a time.

Bob Knakal Chairman, Massey Knakal What are you reading right now or what did you finish most recently? “The Art of Woo.” What spurred you to read that book? The author is a Wharton professor (my alma mater), Richard Shell. Has anything you read in it stuck with you? Would you recommend it to others? It is a great book for salespeople. It looks at the art of persuasion, which is a critical skill for anyone who deals with people professionally. Compiled by Brendan O’Connor

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6/27/14 10:30 AM

RE:CAP

A roundup of real estate-related happenings last month Compiled by Ann Imperatore

LUXE These Elliman #humblebrags all over social media: “Our ad in today’s “#courtside at NY Post is so big, the Knicks! Loved I can’t capture seeing that Elliman it on camera blue at MSG. “ #EllimanGlobal” — Dottie Herman — Ashley Murphy

“Introducing Douglas Elliman Celebrity Row at MSG #goknicks.” — Nicole Oge

Despite six price increases, 56 Leonard’s PH has been on the market for 582+ days. Pricing: You are doing it wrong.

Herzog & de Meuron’s 56 Leonard looks like a bizarro game of Jenga … in a good way.

Because, hey, at least it has windows, unlike 33 Thomas Street .

Elie Tahari purchases a $25M “twin set” — two units — at 15 CPW. Just in time for sweater weather.

ONLY IN NY: Urban Compass’ Leonard Steinberg has a dozen 20-foot trees hauled up to 7 Harrison Street’s PH to create a “forest” with a whopping multi-million dollar price tag. The terrace had to be reinforced to support the weight, and the roofline adjusted by three feet, in order to create a big enough gap for the trees to be planted, and to make the penthouse and terrace floors level with each other. Clearly this is all for the birds.

The Empire State Building tries to class the joint up with the grand opening of a 2,800 sq. ft. street-level upscale eatery — the STATE Grill and Bar — but loses us at calling the building’s recent transformation an “Urban Campus environment.”

Luxury bubble ready to burst? Industry heavyweights lean toward “yes.” Honchos Bruce Beal of Related Companies and Robert Toll of Toll Brothers spoke at the Urban Land Institute’s fall conference, likely to set off imminent partying like its 2008.

MDNLY’s Luis Ortiz charges guests $135 to attend his “Boom Your Business” cocktail event. For those who wanted to sit in the first row — and share “boom” private time with Ortiz — a table ran $3,000.

…and his first point of business is to terminate the firm’s president and COO Jeff Appel, whose hiring Heigberger had formerly described as a “once-in-a-decade opportunity.” Apparently so was his firing.

Town’s Andrew Heiberger is back in the saddle, heading up Town as CEO after much legal conflict with Joe Sitt…

Or you could just move to the 46-story Atelier tower, on W. 42nd St. between 11th and 12th Aves., which plans to install a skating rink on the terrace.

KWNYC’s Catherine Andrusenko just rented 100 UN Plaza’s Unit 3G — a unique rental with a private pool in the unit for $8k/mo … just in time for winter ice skating parties, when it freezes over.

They’re baaaack … Just in time for Halloween, Century 21 announces its third iteration and fourth name (Michael Myers much?) by re-establishing itself (with different owners) in NYC after the franchise shuttered its doors in 2011. They quietly launched early this year, and will soon open their second office. Karim Rashid’s East Harlem HAP building gets a new color scheme after much opposition. No word on if Rainbow Brite will buy the first unit.

WIN

FAIL

There’s nothing luxury real estate big wigs love more than a dancing gorilla ... except booze. And when it stopped flowing during REBNY’s Annual Deal of the Year awards ceremony, some attendees were beating their chests (somewhat like the King Kong that made an appearance at the party) griping about being thirsty as well as hungry … feeling dinner should have been served prior to the presentations.

Because math is hard and rezoning is a developer’s BFF, Lalezarian Properties puts 100-102 Charlton Street on the market for a combined $50 million, roughly four years after paying a mere $4 million for them.

Elsewhere on Charlton Street, Gary Barnett’s Extell Development is planning to construct a 22-story rental building at 68 Charlton Street, giving the neighborhood its first affordable housing.

Cushman’s Bruce Mosler uses “AmEx points to acquire a Canon camera and to buy a telephoto lens,” eventually creating recently published “My Montauk,” his pictorial homage to the area, for charity.

NYU School of Professional Studies Schack Institute of RE held its 21st “Evening of Monopoly” to raise money to support scholarships and career development and academic programs. No word on who got to be the thimble.

We were confused whether Tom Ferry’s recent BluePrint real estate event was a three-day juice cleanse or three-day sales seminar. TurnStyle — but that name though! — will open at the Columbus Circle subway station in late 2015. It will include a Magnolia Bakery, Ignazio’s Pizza, Gelato Ti Amo, Vegan Divas and Dylan’s Candy Store, and is expected to attract 80,000 daily visitors.

The Donald — his manties in a twist over Vicki Ward’s new book called “The Liar’s Ball,” about Fifth Avenue’s famed General Motors Building — keeps his Twitter fingers strong, taking to the site to air his grievances, saying it was “poorly written & very boring.”

LOW RENT 124 November 2014 www.TheRealDeal.com

100 real estate folks sleep on the street in Times Square to raise money for Covenant House to support homeless youth, collecting $220,000.

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COMINGS & GOINGS Town’s would-be London boss jumps to Elliman

indsey Owen, who was tapped to head Town Residential’s first overseas office in London, instead jumped ship to Douglas Elliman last month. Owen joined Elliman as a member of broker Jared Seligman’s team at the firm’s 575 Madison Avenue office. She will be involved in expanding Elliman’s global reach, traveling to London and other cities in Europe. A spokesperson for Town said Owen’s exit will not impact its plans for expanding internationally, but did not say who would replace her. Town said in September it would open its first international location in Central London. “During Lindsey’s three years in the business and at Town, she enjoyed great Lindsey Owen success and we wish her all the best,” the Town spokesperson said. “We look forward to collaborating with Lindsey back and forth across the pond.” Owen declined to comment on the move. Elliman has partnered with London-based international brokerage Knight Frank Residential to develop a branding campaign in select Knight Frank locations around the world, including Hong Kong and Russia. “[Owen], like many other Elliman agents, will exponentially grow their business here at home and abroad. We’ve already seen tremendous results and we expect the momentum to keep skyrocketing,” Howard Lorber, chair at Elliman, said in a statement. By Mark Maurer and Rich Bockmann

Movers and shakers Newmark Grubb Knight Frank Capital

Markets

TenSource aims to be a “CoStar in reverse”

commercial real estate technology start-up is looking to turn the landlord-tenant matchmaking business on its head. TenSource, founded by Al Baumol and Sufyan Sigg, is an online database for leasing brokers created to list and search for tenant requirements. The site enables a tenant representative to post clients’ requirements in the form of a tenant listing. Landlord representatives can scour those listings and connect with the tenant reps if they’ve got something that will fit. Typically, tenant brokers email several dozen brokers each time they have a client that needs space, Sigg said. The program allows them to put the word out and have landlord representatives come to them. Tenant brokers don’t share identifying details, but rather indicate the Sufyan Sigg, left, and Al Baumol. type of tenant — such as digital media or financial services — and provide a range for how much space is needed. Tenant brokers said the service was a way to get the first crack at off-market space. “There’s a lot of shadow space out there,” said JLL’s Paul Ferraro. This allows reps to go after spaces that aren’t yet on listing sites. Baumol said a savvy landlord rep can also take advantage of the platform. “You can find tenants that work for your space, and reach out to their brokers one at a time.” Sigg and Baumol, both alums of commercial brokerage Sinvin Real Estate, estimate that 25 percent of office leasing and retail brokers in Manhattan have used their service. But while brokers described it as “a CoStar in reverse,” the fledgling firm faces a number of challenges. It’s unclear how many users returned, and how many lease transactions have actually originated through TenSource. And not all who’ve used it are believers. Two tenant brokers told TRD that they got very little traction from the service, and gave it up shortly after trying it out. By Hiten Samtani 126 November 2014 www.TheRealDeal.com

Jordan

director and Daniel Fromm as managing director in its New York office. Roeschlaub and Fromm joined NGKF from Chesterfield Faring. The two will boost the firm’s debt and structured finance team, raising and structuring capital for all asset classes on behalf of

Jordan Roeschlaub

both institutional and private investors. Tishman Construction hired Greg Gouldin as vice president of business development for the firm’s Mid-Atlantic region. Gouldin joins Tishman from Foulger-Pratt Contracting, where he was director of business development. He is an active member of the Urban Land Institute

Century 21 Metropolitan adds another office

fter quietly launching earlier this year, Century 21 Metropolitan is expanding to a second office. The franchise brokerage opened in January in Lenox Hill with 21 agents. Principal and co-owner Ryan Sherman said that he and partner Doug Magid preferred to keep the firm under the radar until it was firmly established. But now, Century 21 Metropolitan has grown to 50 agents, growth that convinced the pair to add another office to the brokerage. The partners inked a lease last month, and in December, will open a 500-square-foot storefront at 36 East 28th Street. With 12 shareable desks, they expect 30 agents by spring and 100 agents throughout the firm by next summer. This is the third shot at Manhattan for Century 21, which, like other national brokerages, has had a tough time in the New York City market. Magid held the title of CEO for a franchise called Century 21 William B. May, which opened in 2004, created by a merger of the venerable residential boutique firm’s Midtown office and Century 21. Headed by Kevin Brown as chairman, the company changed its name to Century 21 Kevin B. Brown and Associates in 2005 following a legal dispute over Rick Davidson, CEO of Century 21, left, the May name. and Century 21 Metropolitan co-founders Ryan Sherman and Doug Magid Sherman was sales director of that firm. Brown sought additional financial backing in 2006, bringing in Bob Cohen and Mike Simon and becoming a minority partner. Sherman said they were asked to remain part of the management team but declined. The firm acquired Dwelling Quest and relaunched in 2006 as Century 21 NY Metro. In 2008, then-President and CEO Simon was replaced by Marc Lewis. But despite a few management shuffles, by 2011 the firm was shuttered. Meanwhile, Sherman and Magid formed an independent shop, Metropolitan Residential. After Century 21 NY Metro closed, Sherman said they decided to revisit the franchise opportunity. By Ann Imperatore

hired

Roeschlaub as senior managing

and the U.S. Green Building Council. RLTY NYC, a new brokerage and

Greg Gouldin

property manager, launched operations

in New York City. Led by co-founders and principals Emir Bahadir and Benjamin Benalloul, the firm is hiring with an eye toward working with

Emir Bahadir and Benjamin Benalloul

international investors, especially from Europe and the Middle East. Tanya Mahmood, most recently a co-founder of Team Gotham, and previously with Keller Williams, was brought on as chief operating officer. Mancini

Duffy

appointed

Christian D. Giordano president of the architectural and interiors firm. Giordano was previously a principal and director of architecture. The most recent president, Theodore Hammer, took the roles of chief operating officer and co-chairman. Goldstein, Hill & West Architects Christian D. Giordano

tapped Alkis Klimathianos as a senior associate in its design department.

Klimathianos has 15 years of experience designing residential towers and hotels; the firm’s architects have worked on a total of more than 35,000 residential units in over 100 Manhattan buildings. Brown Harris Stevens’ residential management division hired Jay Fingerman and Michael Donuk as vice presidents and managing directors and Christopher S. Eisler as a senior account

executive.

Alkis Klimathianos

Fingerman

was previously senior residential manager and a team leader at FirstService Residential, and on-site general manager at Douglas Elliman Property Management. Donuk most recently worked as portfolio director at Rose Associates. Eisler was previously an account manager at Douglas Elliman.

Also on the move Transwestern New Jersey office hired Jeffrey Furey as managing director and Matthew Dolly as director of research … Brian Becker joined REMCO as senior operations manager … and Peter Von Der Ahe was promoted to senior vice president of investments at Marcus & Millichap.

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Welcome to the “Bob and Larry Show” WE H E A RD

Starchitect, developer share moment in spotlight with 30 Park Place debut

▼

eparately, they’ve designed and developed some of the world’s most famous buildings, and racked up nearly every award their sides of

the industry have to offer. Together, they could win for “best comedy.” The obvious bond that has developed between architect Robert A.M. Stern and developer Larry Silverstein is evident in a rib-tickling promotional video for their new luxury condo tower, 30 Park Place. It begins with the two gazing across the East River. “Look at what we’re going to have, Larry!” Bob remarks. The narrator intones that the ultraluxury tower was crafted by “two boys from Brooklyn, New York, with the humblest beginnings,” and as their limo takes them over the Brooklyn Bridge, the kibitzing begins. “I lived on the seventh floor of a six-story walk up,” Larry jabs. Bob adds, “I lived on the F train, and it was always thrilling when the train came up out of the tunnel and you saw

this amazing view of the skyline. That was like Oz.” Listing the amenities of their luxe skyscraper, the narrator mentions the restaurants, the pool and the 250-person capacity ballroom. “Worthy of Fred Astaire,” says Bob, slip-

Larry Silverstein, left, and Robert A.M. Stern in a scene from the promotional video for 30 Park Place.

ping in a mention of the dancing virtuoso who inspired him to wear yellow socks each day. The shtick is not limited to the four-plus minutes on the screen. It was also on display at last month’s opening of the sales center for 30 Park Place, where the two men joked and

ribbed each other in front of brokers and the press. In person, it’s obviously not an act. While some starchitects and developers have notoriously bristly relationships, the rapport between Stern and Silverstein is clearly genuine. Despite decades in the business, Stern, 75, and Silverstein, 83, said they never worked together before. After getting started on the tower in 2008, the economy’s crash put the construction on hold, but clearly not their relationship. They spent the ensuing years honing the finer points of the building, and to a casual observer, it’s obvious they’ve enjoyed not only the “labor of love,” as Stern calls the residential hotel, but also the time they’ve shared on the project. Corcoran Sunshine’s Kelly Kennedy Mack, who’s directing sales at the tower, commented on the relationship. “The charm between Bob and Larry is palpable,” she said. “For seven or eight years, they’ve had a warm and playful relationship.” As the video winds down, the boys are back in Brooklyn, providing what amounts to the punch line. “What can you say?” Bob asks. “It leaves you speechless, doesn’t it?” By Eileen AJ Connelly

Real-life “Wolf of Wall Street” character goes lone wolf Alan Wilzig trying to sell Tribeca condo for $43M without a broker; paid $4.5M for property

Alan Wilzig, who inspired one of the characters in “The Wolf of Wall Street,” is trying to sell his 3 Hubert Street condo without a broker.

urns out the real-life inspiration for a minor character in Martin Scorsese’s “The Wolf of Wall Street” isn’t afraid to break away from the pack. Entrepreneur and semi-professional race car driver Alan Wilzig, who was depicted in the 2013 movie introducing Leonardo DiCaprio’s character to his future wife, is shopping his tricked-out Tribeca townhouse without the assistance of a broker. The for-sale-by-owner listing on Zillow asks $43.5 million for the two-story maisonette at 3 Hubert Street.

“Feel free to share this with your luxury real estate friends for anyone interested in a Manhattan super-residence,” Wilzig posted on his Facebook account. “All brokers protected. I have no problem paying or sharing in paying a commission(s) — but I’m not willing at the present time to grant an exclusive with any one broker or firm. (Especially since a dozen of my good friends are all NYC brokers.)” Wilzig famously took to Facebook last year to rail against his “nerdy” portrayal in the movie and griped that Scorsese left his red Ferrari Testarossa out of the pool party scene. The 7,500-square-foot Tribeca home is decked out with motorcycles and racing memorabilia and includes a 2,500-square-foot roof deck, private backyard, six bedrooms, five-and-a-half baths and an attached garage. But those are just the standard features. Inside, the finishing touches include an eight-person hot tub, alligator-wrapped hand rails, a lighting system that bathes the home in different-colored hues, tanning bed, 550-gallon fish tank and bulletproof glass. Those embellishments, however, may not fit every buyer’s fancy.

Everybody out of the Pool Room?

Gawking over lunch at the Four Seasons before the fun gets drained

he famed Four Seasons Restaurant has taken some punches of late. But Philip Johnson’s masterfully designed mid-century Pool Room and Chef Pecko’s expertly crafted menu still hold a nearly irresistible cachet for the city’s power brokers — real estate executives included. Industry regulars include Blackstone co-founder Pete Peterson and CEO Steve Schwarzman, Thor Equities’ Joe Sitt, one-time mogul Kent Swig and 432 Park developer Harry Macklowe. Recently, The Real Deal spotted another habitual patron: Douglas Elliman’s Faith Hope Consolo. “Everyone has a favorite restaurant, a neighborhood place ‘where everyone knows your name.’ My neighborhood place just happens to be in the Four Seasons,” said Consolo, who lives and works nearby. “I’m there at least once a week.... I have a set table under this stunning, gigantic tree. I’m there so often, and the staff knows me so well, that I never read the menu — the chef knows my order!”

128 November 2014 www.TheRealDeal.com

On another visit, TRD spied One World Trade Center developer Larry Silverstein having a roundtable lunch, complete The Pool Room at the Four Seasons remains a popular spot for a power lunch. Inset: Julian Niccolini.

with stacks of paperwork and eight or so men and women. It was an unusual sighting, since Silverstein rarely lunches outside his office.

Douglas Elliman broker Toni Haber said that at $5,800 per square foot, she thinks Wilzig’s pricing is “optimistic,” considering the décor may not have universal appeal. She also, maybe expectedly, advised Wilzig to enlist the services of a professional. Wilzig, who ran his father’s New Jersey bank that was bought out in 2004, was co-owner of the former Kutsher’s Tribeca restaurant, just a few blocks away from the condo. The husband and father of two owns a second home in the town of Taghkanic in the Hudson River Valley, where he upset neighbors by building a race track. The family plans to move north and find a rental in the Soho area after selling. Wilzig bought his Tribeca home for $4.53 million back in 2005, and explained on Facebook that he’s ready to sell in part because “Tribeca has become so ‘fancy’ that it feels a lot more like the Upper East Side than 2000 when we moved down here.” He added: “It’s time to let some hedge-fund guy who makes $40M every 6 months have it … or some Russian billionaire.” By Rich Bockmann

He hardly touched his food, but the entire dining room found a moment to pause and gape as a waiter carefully carried the restaurant’s signature foot-tall pink cotton candy dessert to their poolside table. But the revelry may be short-lived. In the half-empty lunchroom, business people endure the presence of “selfie”-taking tourists, who photograph even the menu — a sure sign that the Pool Room is edging toward cliché. And in September, the restaurant suffered an epic blow when Seagram’s building owner Aby Rosen plucked the iconic Picasso tapestry “Le Tricorne” from the restaurant’s entryway. Moreover, Rosen has hinted at booting the restaurant when its lease expires in July 2016, or tripling the rent to roughly $3 million a year, plus a cut of the revenue. Social media was buzzing last month when restaurant owner Julian Niccolini briefly posted on Facebook (the post was soon removed) that he had “booked rock ’n’ roll royalty for a blow-out celebration of New York on 7/31/16,” promising “a party so delicious, it’ll take 21 months to prepare.” The question is, will it be the last? By Christopher Cameron

THE CLOSING

WITH TONY

MALKIN

Tony Malkin is chairman, president and CEO of Empire State Realty Trust, the real estate investment trust that owns the Empire State Building, as well as 18 other properties in New York City. The grandson of company founder Lawrence Wien, Malkin led the charge to consolidate his family’s portfolio, formerly known as Malkin Holdings, into a publicly traded REIT. After fielding unsolicited bids to buy the Empire State Building and facing lawsuits from dissenting shareholders, the company raised $929.5 million in its 2013 IPO. Today, it controls 6.7 million square feet of New York City real estate, including 2.9 million square feet at the namesake tower, which is undergoing a $500 million rehabilitation. Name: Anthony Edward Malkin Born: 06/01/62 Hometown: Born in New York City Marital status: Married 27 years Children: 2 sons What were you like as a kid? Always breaking things: In the process of trying to figure out how things worked, I broke a lot of things. I probably put [back] together about 60 percent of the things that I broke in a functional fashion. Growing up, did you spend a lot of time with your father, Peter, and grandfather looking at buildings? I spent a lot of time with my grandfather… and my father. I would hear about real estate when I was a kid at the table. What are some things your grandfather taught you? He would say, each of us has a bank of 86,400 seconds every day of our lives, and we can use those seconds in any way we want. I recommend to you that you use your bank of seconds selfishly. Use them to give you the greatest happiness that you can create for yourself, and I submit that intelligent selfishness will make you participate in helping your sisters and brothers through the world. Did you consider a career outside real estate? I actually started out in the private equity business, specifically because I wanted to learn something other than real estate. My mother turned to me one day and said, “Your brother [Scott] is older and he’s going to be in charge and you’re just going to have to figure it out.” To which I said, “OK, I’ll do something else.” What did you study in college? I was an English major and concentrated in theatrical literature. I love Shakespeare. I like Russian novels. Every now and then, I’ll reread “War and Peace.” Have you ever acted? I actually graduated with honors from high school [Choate Rosemary Hall] in theater arts. Having that stage presence is something incredibly helpful in life. What was your best role? The snake in the “Diary of Adam and Eve.” I sang a song about convincing Adam and Eve to eat the apple. I wore 130 November 2014 www.TheRealDeal.com

leather pants and a leather vest, which was actually made from Naugahyde, so it was an early form of advanced perspiration. I slithered around a tree. It was pretty funny. Is that one of your proudest moments? I don’t believe in pride. I believe in trying to stay centered in the moment. I try to be grateful and feel gratitude. You took an 18-month leave from Harvard after your freshman year. What were you doing? I worked for a genetics research company in Palo Alto, California, which, as an English major, meant I was a stock clerk. Then I worked on a ranch in Texas for six months, and then I took some classes in London. What did you do on the ranch? Putting it delicately, I cleaned out stalls. I washed down horses.... The ranch foreman did not really like the concept of a kid from Harvard working at his ranch. Why did you do it? Shouldn’t every kid from Connecticut, from a real estate family in New York, who goes to Harvard, work for minimum wage and live in a bunkhouse? I was reading [James] Michener at night, getting up at five in the morning and working six days a week. It was frickin’ awesome. What did your parents think at the time? My mother couldn’t believe it. She said, “’You dropped out of school?’ I said, “No, I took a leave of absence. I’m going back.” My father’s disbelief was expressed more quietly. How did you meet your wife? I was set up by my father. He met her at a condolence call. He thought she was a conservative kid who was going to Princeton. Fortunately, she wasn’t all that conservative. Our first date was at Studio 54. How long were you in private equity? I started in January ’86. My grandfather passed away in December ’88, and my brother moved to London. I was asked by my dad to join up with him, and I signed up for

a three-year stint [at the company, then called Wien & Malkin]. How did three years turn into 17? The work wasn’t entirely done, number one. I took some time off in 1993 and told my father I’d return if we diversify out of real estate and make it an institutional-type company, and not a family business. I’ve really only just finished the work that I stared back in ’89, with the consolidation and IPO. I basically did workouts for a quarter of a century. What was the IPO process like? Fantastic. It was the greatest intellectual, physical [and] personal challenge that I’ve ever had in my life. I have ADHD and I’m slightly dyslexic. My brain is wired differently. So to me, figuring out complicated things is incredibly intriguing. When were you diagnosed? In my 30s, I started working with a corporate coach who said, “You know, Tony, you are full-on ADHD. Would you like to try medication?” I said, “If I’ve gotten this far without it, the answer is no.” When I was a kid, I signed my name backwards. No one picked up on it. They thought it was cute. School was hard. I bulled my way through it. I just figured it was that difficult for everybody. How do you deal with it now? I have a lot of systems and processes and routines. And I have a lot of support from a lot of great people. It’s given me an alternate approach to things, which has enabled me to really figure out complicated stuff. That’s the greatest gift of it, frankly. What are your hobbies? I like to keep myself physically and mentally fit. I bicycle, swim, play tennis and golf and ride motorcycles. I like to go for multiday rides on any road that’s not straight. In 20 years, what do you hope people say about you? Is he still alive? Where is he? By E.B. Solomont PHOTOGRAPH FOR THE REAL DEAL BY max dworkin www.TheRealDeal.com July 2006 00

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