The Real Deal December 2014 by The Real Deal

Developers giving more concessions

Listing sites vie for U.S. dominance

Is Urban Compass really the future?

N ew York R eal E state N ews

www.TheRealDeal.com

Cashing in on Bed-Stuy

136

From real estate to Shakespeare

Vol. 12 No. 12 December 2014 $3.00

Lorem isum dolorsi. A look at the cracks appearing in Manhattan’s high-end residential sector p46

Broker poaching: Who nabbed who

A look at the biggest names and most surprising moves between NYC residential brokerages in the past year p44

Spitzer takes the reins

The former governor, now in charge at his family’s firm, seems poised for a big move into development p36

Big retail buyers rack up storefronts

From Upper Fifth Avenue to Soho, who’s bought the most and what they’re paying p58 ILLUSTRATION BY D. STUDIO

PA RT RUS H , PA RT REC H A RG E. A L L Y EAR , ALL YOU R S.

WHOLE OWNERSHIP STARTING AT: STUDIOS $279,000 • ONE BEDROOMS $381,000 • TWO BEDROOMS $782,000 • THREE BEDROOMS $1,633,000 • FOUR BEDROOMS: SOLD OUT

TRY BEFORE YOU BUY: VICEROY SNOWMASS RENTAL RESERVATIONS 877.235.7577

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The Residences at the Viceroy Snowmass are not being sold by Viceroy Hotels, LLC, the Viceroy Hotel Group and/or any of their affiliates (“Viceroy”). Developer’s use of the VICEROY and REMEMBER TO LIVE marks in connection with the development, operation, marketing and sale of the project is pursuant to a private agreement with Viceroy, which may expire or terminate without being renewed. This advertisement is not an offering. It is a solicitation of interest in the advertised property. No offers to purchase will be accepted from any person who resides in a state where the offering has not been registered or is not exempt from applicable registration requirements. This advertisement is made in accordance with Cooperative Policy Statement No. 1, issued by the New York State Department of Law. File No. CP12-0049. Developer is Snowmass Acquisition Company LLC, c/o The Related Companies L.P. 60 Columbus Circle, NY, NY 10023.

Happy Holidays

Ashkenazy Acquisition Would Like to Thank

The Real Estate & Brokerage Communities For a Successful 2014 Miami Design District Miami, Florida

The Miami Design District is an 18-square-block creative neighborhood and shopping destination dedicated to innovative fashion, design, art, architecture and dining, and boasts retailers such as Prada, Celine, Dior & Cartier

115 Seventh Avenue New York, New York

522 Fifth Avenue New York, New York

The Chrystie New York, New York

Beverly Connection Los Angeles, California

±40,000 SF directly adjacent to Barney’s New York’s Chelsea Flagship Store

Many Thanks 2014 Highlighted Acquisitions

A mixed-use building containing 261 luxury apartments and 72,330 SF of retail space currently occupied by Whole Foods

±27,000 SF of prime retail space on iconic Fifth Avenue

335,500 SF open-air shopping center in the heart of Los Angeles, current tenants include Target, Nordstrom Rack and Marshalls

For Leasing Information, Please Contact: A.J. Levine | 646.214.0245 | alevine@aacrealty.com For National Acquisitions Information, Please Contact: Conor Soden | 646.214.0228 | csoden@aacrealty.com For New York Area Acquisitions Information, Please Contact: Daniel Levy | 646.214.0232 | dlevy@aacrealty.com

ASHKENAZY

ACQUISITION

Happy Holidays

Ashkenazy Acquisition Would Like to Thank

The Real Estate & Brokerage Communities For a Successful 2014 Miami Design District Miami, Florida

115 Seventh Avenue New York, New York

522 Fifth Avenue New York, New York

The Chrystie New York, New York

Beverly Connection Los Angeles, California

±40,000 SF directly adjacent to Barney’s New York’s Chelsea Flagship Store

Many Thanks 2014 Highlighted Acquisitions

A mixed-use building containing 261 luxury apartments and 72,330 SF of retail space currently occupied by Whole Foods

±27,000 SF of prime retail space on iconic Fifth Avenue

335,500 SF open-air shopping center in the heart of Los Angeles, current tenants include Target, Nordstrom Rack and Marshalls

ASHKENAZY

ACQUISITION

Contents D E C E M B E R 2 0 1 4

What rates may come

Jumpstarting sales

By the Numbers: Hudson Yards

Concern over rising interest rates have some buyers diving in now.

At some projects, developers add incentives rather than cut prices. A check-in on the construction work that is creating NYC’s largest project.

Hudson Yards is starting to take shape.

At the Desk of Jay Valgora The Studio V principal on his childhood inspiration, his secret fishing spot and his new projects including the massive Astoria Cove development. Architect Jay Valgora, principal of Studio V.

In their words...

Easing condo lending

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

Federal government may reduce barriers for first-time buyers, seniors.

Spitzer doubles down in Hudson Yards area Former governor secures second development site, expanding potential for building plan on Far West Side.

Eliot Spitzer

up sight unseen 38 Snapped New York City luxury purchases based on floorplans account for 45 percent of contracts signed since September 1.

Sixth Avenue takes off 40 Lower Where Soho and Hudson Square meet, A look at the area’s notable projects.

a once overlooked slice of the city is finally getting some attention.

Brokers’ winding paths A look at the biggest names to make jumps between NYC residential brokerages in the past year.

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

www.TheRealDeal.com March 2012 00

Contents continued 50

The big issues to watch in 2015 The spotlight is on “efficient” luxury buildings, foreign buyers, the mayor’s affordable housing agenda and more for next year.

Manhattan’s biggest retail buyers

As the shopping season kicks off, TRD tallies the sales of storefronts.

Neighborhood dive: The Lower East Side Our new feature takes a close look at the sales, developments and more in the fast-growing area.

Residential Market Report

Atlantic City’s crap shoot With large-scale gambling on the decline, the seaside city looks to its past as inspiration for its future.

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.

Meet the landlord Tahl Propp Equities’ Joseph Tahl on the firm’s singular focus on Harlem, and what’s next.

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

114

Development Updates

A touch of glass on Lex

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

C3D Architecture’s design for 229 Lex brings a bit of openness to a bland strip.

116

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

134

Comings & Goings

88 Record growth for the Brooklyn nabe Will Bed-Stuy’s boom last?

isn’t over yet, according to brokers.

Real estate industry moves

136

We Heard A lighter look at industry buzz.

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

www.TheRealDeal.com March 2012 00

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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

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*As published in The Real Deal.

Intern Juan Zielaskowski Photographer Marc Scrivo

We are pleased to announce the following results for the year-to-date November 25th 2014, Rosewood has completed total sales of

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Manhattan: Aggregate sales of

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

$301,606,000

56 Buildings / 2,680 Residential Units / 69 Commercial Units Queens: Aggregate sales of

$478,805,000

14 December 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.

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Which direction does the Compass point?

hese days, every conversation about real estate seems to wind up on the same topic: “What do you make of Urban Compass? I don’t get the whole thing. What’s the business model there?” The brokerage startup has famously raised more than $70 million, with investors including New York real estate names like Bill Rudin and Jared Kushner. It’s now valued at $360 million. It has lured big brokers, including Leonard Steinberg and most recently, Brown Harris Stevens’ Kyle Blackmon. The company is all about its competitive advantage through groundbreaking technology, both for the consumer and the broker. But what exactly that technology looks like has everyone in the industry scratching their heads — a mystery akin to the existence of the Loch Ness monster or the disappearance of Malaysia Airlines Flight 370. I think I know what they have in store. The new way in which a person will buy a home in Manhattan just 12 months from now is quite staggering: Think “1984.” First, you arrive at Urban Compass’ office, and once seated in a reclining chair, a Google Glass-type apparatus is affixed to your forehead. You log into your email and Urban Compass downloads and sorts all real estate information from your messages. Using a complex algorithm, it forms a preliminary picture of your hopes, dreams and desires, and how that translates into where you might want to plunk down a $200,000 downpayment. Next, you type answers to seemingly random questions into proprietary software. You are done! Urban Compass now knows where you want to live and how much you’d like to

Think “1984”: Urban Compass downloads and sorts all your past email messages, and, using a complex algorithm, forms a preliminary picture of your hopes, dreams and desires, and how that translates into where you might want to plunk down a $200,000 downpayment. pay, and using real-time marketplace software, makes sure there are no competing bids or offers. A driverless car awaits to whisk you to that address (already programmed into the car’s GPS.) When you arrive, you whip out your iPhone, swipe it (using Apple Pay) and, assuming you are good with the price (your only decision), the place is yours. Another Urban Compass team has already arrived at your old apartment, ready to put it on the market, taking listings photos and packing up personal items. All this saves the agents’ time and makes them more productive, the stated goal of Urban Compass’ business model. The average NYC broker spends a staggering 89 percent of their time performing administrative tasks, says CEO Robert Reffkin. If this doesn’t work out, there’s a backup business plan: Urban Compass will use a traditional brokerage model, but each client will get a free iPhone 6 with a complimentary download of the latest version of Angry Birds and the Kim Kardashian app. Of course, this is all in beta-testing — in my mind. But if it any of it works out, I want an equity stake. Given the track record of Urban Compass’ principals and their level of sophistication when it comes to tech, it won’t be surprising if whatever lies ahead is, in fact, a billiondollar success. (Reffkin’s CV includes Goldman Sachs, McKinsey and Lazard, and executive chairman Ori Allon sold his last two companies to Google and Twitter.) Check out E.B. Solomont’s story on the puzzle that is Urban Compass on page 68. (We also have Reffkin talking about the latest book he is wading through — it’s about business development — in our monthly feature on what industry pros are reading, on page 78.) Elsewhere, we examine the biggest real estate issues ahead in 2015 in our cover story this month. The coming year is poised to see the number of new development launches double from this year, which should make things interesting. Will prices continue their rise or stall out? What effect will likely rising interest rates have? Is Queens the new Brooklyn, Brooklyn the new Manhattan and Manhattan the new… London, thanks to international interest? Read on to find out. Finally, check out our pieces on the biggest residential broker moves of the year on page 44, the largest retail storefront buyers on page 58 and a preview of the big ICSC retail conference this month on page 60, just in time for holiday shopping season. Enjoy the issue, the holidays and the New Year.

*Another firm was involved in this transaction as well.

Stuart Elliott 16 December 2014 www.TheRealDeal.com

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Fear of rising interest rates is pushing more buyers into the NYC market By E.B. Solomont A fear of rising interest rates in the months ahead is prompting some homebuyers to jump into the sales market — putting pressure on brokers to turn deals around quickly while low rates are locked in. Although it’s anyone’s guess when — and if — rates will increase (see story on page 50), many buyers don’t want to chance it, agents said. Citi Habitats agent Corlie Ohl said she has several first-time buyers who are on the fence, but want to strike while the iron is hot. “Any interest-rate hikes might cause them to stay renters,” she said. One of Ohl’s clients, whose lease is up in March, is prequalified to spend $850,000. “If she doesn’t purchase by July, or whenever the interest rates go up, she’s just go-

can call to get a building approved within 24 hours is more valuable than anything,” he said. A potential interest rate hike isn’t just impacting buyers. “If you already own, you need to refinance now if you’re going to,” said Ohl. Wendy Maitland, president of sales at Town Residential, said some owners are looking to sell in anticipation of interest rate hikes. “They are making the decision to move now, not because they need to, but because they’re thinking rising rates may fuel buyers to purchase now,” she said. She said she’s seeing the trend mostly in the luxury market, where certain savvy sellers “understand that any impact in the market will potentially impact the value of the property.” And, she said, the sellers may

“People are trying to close while they still have that rate locked in.” Jeff Schleider, Miron Properties ing to rent,” Ohl said. For the last several years, low interest rates made real estate an attractive option for investors, but cash buyers dominated the market — locking out many first-time buyers seeking mortgages on properties in the $2 million and under category, in particular. Jeff Schleider, CEO of Miron Properties, said that within the past year, however, he’s seen a slight shift in favor of buyers seeking mortgages. He said that a year ago, less than 10 percent of deals had mortgage contingencies; now the number is closer to 35 percent or 40 percent. “We don’t see people jumping into deals because of where rates are, but people are trying to close while they still have that rate locked in,” he said. Agents who have strong relationships with attorneys and mortgage lenders are able to turn deals around quickly, he said, citing a recent transaction in which a Miron agent represented the buyer of a two-bedroom cond-op on West 23rd Street. Schleider said the seller had two offers for just under the asking price of $1.6 million and chose Miron’s client because the mortgage approval was already in place. “Having an attorney and banker you

want to invest outside of real estate. To that end, the interest-rate question is also impacting pricing. During the third quarter, the median sales price increased to $908,242, up 4.2 percent year over year, according to real estate appraisal firm Miller Samuel. “Sharp gains in New York City employment, the continued influx of international investors and low mortgage rates have kept the market tight,” the report stated. While “a product of five years of pent-up demand [and] the fear of rising mortgage rates, sales volume fell short of prior year records.” “Buyers are concerned about purchasing before interest rates go up,” agreed Rebecca Knaster, an agent with William Raveis NYC. But despite having motivated clients, Knaster said low inventory has been a problem. She recently represented the seller of a three-bedroom co-op on East 54th Street, who walked away from offers close to $2 million — above the $1.76 million asking price — because the seller couldn’t find anything to buy himself. Shirley Hackel, an agent at Warbug Realty, echoed concern about a lack of inventory. “Buyers anxious to take advantage of favorable lending conditions,” she said, “are discouraged by a lack of wellpriced, quality products.” TRD

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Spurring slow-season sales As new development deals cool off, marketers are throwing in add-ons

By Mark Maurer to provide value,” Kim said. “It’s about espite the gusto exhibited by the giving the buyer a lot in terms of amenities New York City residential market and finishes, rather than a monetary in recent years, developers are now concession.” Still, not all projects in the city are seemore likely to throw in add-ons to sway prospective buyers of new development projects. For developers, these incentives serve as an alternative to lowering the prices of their condominium units. Banks prefer that developers do not reduce prices at all; price-chopping can also jeopardize units that are already in contract, because some of those buyers may request a discount as well. Common incentives include footing the bill for a transfer tax, or offering storage lockers or additional reserved parking spots, according to residential real estate insiders. “If you’re the buyer at a new development and a listing you like has been just sitting there, that’s a clear indication you can ask for these things,” said Julia At Flank’s 224 Mulberry, one parking spot is included with each unit. Boland, director of new devel- The developer is throwing in a second spot to sweeten some deals. opment at William Raveis NYC. Developers may also cover the city’s ing immediate success from the many bells mansion tax in a soft market. A buyer of and whistles. a home at a new development at or above For example, sales have been hovering $983,000 will incur the city’s mansion tax, at about 55 percent at Toll Brothers’ 108which exists for homes selling for $1 million unit townhouse-style condominium projand up. (The tax starts below $1 million ect, Pierhouse at Brooklyn Bridge Park in because the government adds the trans- Brooklyn Heights. An average of five con-

Common incentives include footing the bill for a transfer tax, or offering storage lockers or additional reserved parking spots.

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fer tax of 1.825 percent onto the purchase price, and then considers that sum to be the total price.) It is far more common for a developer to pay for transfer taxes, though, Boland said. Meanwhile, at Flank’s eight-story Nolita condo development at 224 Mulberry Street, all units come with at least one parking space. For some of the apartments, Flank is throwing in a second parking spot. Two units are currently under contract for a near-record per-square-foot price of over $3,300 in Nolita. One of the most prevalent add-ons is the inclusion of one or two storage units, said Roy Kim, head of new development at Urban Compass. Kim said these concessions are a valuable negotiation tool, but they are still largely occurring at the low-to-middle luxury range of the market, because buyers at the top end rarely have concerns about the transfer tax, for example. “Developers recognize they really need

dos entered contract per month between the launch of sales in February and August. Over the past three months, though, the average dropped to two units in contract per month. Meanwhile, for months, the priciest single-family listing in Brooklyn has been a Pierhouse unit asking $32 million, according to PropertyShark. “There’s a lot of product for people to choose from and people are moving a bit slower,” said Todd Dumaresq, marketing manager for Toll’s City Living division. Toll Brothers is considering chopping asking prices, as opposed to offering addons, Dumaresq said. Boland said she sees the offering of addons as not necessarily a trend at this time, but something to keep an eye on. By the spring, pent-up demand for condominiums will likely give way to people buying again, Kim said. “Sales are sluggish generally because people are cautiously waiting to see what the market will do,” Kim said. TRD www.TheRealDeal.com March 2010

the

Numbers

68,000 Estimated number of visitors who

will pass through the 17 millionsquare-foot complex each day. Plans call for nearly 40,000 workers and residents.

5 Number of retail tenants that have

Measuring NYC’s largest project Checking in on the massive construction effort at Hudson Yards

he Related Companies $20 billion Hudson Yards project has been called the biggest private real estate development in the nation’s history. The multi-tower office, residential and retail complex stretches from 10th to 12th Avenues and from West 30th to West 34th streets. Because the area is home to the Long Island Rail Road’s active rail yards, Hudson Yards is being built primarily on two massive platforms constructed over the rail yards and bisected by 11th Avenue. Construction on the eastern platform began in March. Sixteen buildings will eventually rise at Hudson Yards. Only one of them will be built on terra firma — 10 Hudson Yards, where ground was broken on Dec. 4, 2012. The building will, however, straddle part of the High Line, the final section of which wraps around Hudson Yards’ southern and western portions. Related’s plans call for four office towers, and there are also plans for up to nine residential buildings, along with 6 acres of public space. This month, The Real Deal looked at some of the data on construction at the project. By Brendan O’Connor

New Listing By The Numbers

161 Number of caissons — long, steel

tubes 4-5 feet in diameter that are lowered into holes, then filled with concrete — that have been placed since drilling began March to support Hudson Yards’ eastern platform. In all, 300 caissons are planned.

signed on at Hudson Yards. The largest, Dallas-based Neiman Marcus’s first NYC store, will span 250,000 square feet: three floors of the retail complex, which will comprise more than 1 million square feet in total.

1 $75 million Number of cranes in New York that Amount Related Chairman Stephen are strong enough to lift the caissons Ross says he would pay for the public artwork commissioned from British artist Thomas Heatherwick, who designed London’s 2012 Olympic cauldron. By comparison, Chicago’s “Cloud Gate” cost $23 million.

sunk into the ground to support the platform. There are only six such cranes in North America; the workers call the crane “Joanie.” Her heaviest lift to date took place on Oct. 30: a 244,000-pound steel column.

4 Number of train tunnels that lie

38% Percentage of the rail yard that can

be used to build support structures for the platform. A 100-foot truss will support the weight of the buildings where columns won’t fit because train tracks are too close together for supports to fit in between.

beneath Hudson Yards: the Empire Line Tunnel, the Gateway Tunnel (under construction), and the North River Tunnels — a pair of passages through which 445 Amtrak and New Jersey Transit trains and 600,000 passengers pass every day.

5,000 Number of cubic tons of concrete

24,000 Tons of steel ordered for the first

that have been poured so far to construct the eastern platform. About 90,000 cubic yards have been poured for 10 Hudson Yards, and 22,000 for Amtrak’s Gateway Tunnel.

platform, which will also include 14,000 cubic yards of concrete. It will weigh more than 35,000 tons.

$1.3 billion Amount developer Related is

spending on the platforms for both yards; the entire project is projected to cost $20 billion.

4 acres Portion of the project that will be

devoted to public space. Hudson Yards overall is 28 acres.

Full Floor Trophy Penthouse

40 Number of feet above sea level

that Hudson Yards’ onsite electric grid will be located to protect from flooding. The grid will be powered by a 13.2 megawatt natural gas cogeneration plant and four diesel generators. Sources: Commercial Observer, Fast Company, Fortune, the New York Times, the Wall Street Journal,

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www.TheRealDeal.com December 2014 23

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D e h t t

Jay Valgora

ay Valgora — the architect behind the massive Astoria Cove redevelopment and Empire Stores in Dumbo, among numerous other noteworthy projects in the city — does most of his work at a long, communal table at the East 32nd Street office of his firm Studio V. The table, which is littered with models, books and materials, is set in front of an expansive architectural library, as well as a wall that displays the firm’s different projects. The architect prefers to stay out of the limelight. “We intentionally keep ourselves mysterious,” Valgora said. He barely ever posts renderings online and gets most of his assignments by word of mouth, he said. Valgora grew up in Upstate New York, lived in London from 1988 to 1991, including one year as a Fulbright fellow, and earned a master’s degree from Harvard’s Graduate School of Architecture. He recently took The Real Deal on a tour of his office.

By Claire Moses

Theater When Valgora is not thinking about architecture, he likes to attend the theater. He and his wife, Kathy, see about 40 productions each year. His wife picks the performances,

Mobi This mock-up is actually “a project in need of a home.” Valgora designed the structure — made from recycled wood from old water towers —on a pro bono basis. The design would fit in a park, Valgora said.

which are almost always small, offBroadway shows. Recently, Valgora saw — and was enamored by — “The Money Shot.”

Atlante di Storia Dell’ Urbanistica “There’s no book like this in the

Guitar

Wine

Valgora’s sons Tyler, 16, and Julian, 13,

The Studio V office is never without a stash of red

often stop by the office. Valgora and his

wine. Valgora likes to bring back wine from places

family live only a few blocks away. This

he travels to. But, to make sure that there’s always

guitar — a cheap six-string that was

enough wine in the office, he also orders bottles

customized by Tyler — sits against

online, mostly because he gets a better deal if he buys

the book shelves in the office.

them on the Internet. They get consumed fast. “Wine

Valgora himself plays as well.

is for drinking,” he said.

world,” Valgora said about the Italian-language edition on his desk. He bought the book, which is an atlas that outlines

New York Design Award

the history of urbanism, when

An award proudly stands in Valgora’s

he lived in London. (It’s now

window sill, next to two bottles of

for sale on Amazon for $560.)

wine. The firm won it earlier this year

It’s one of the books that clearly

for a commercial project it did in

show “great urban conditions.”

Yonkers, New York. Valgora said he

Valgora said he uses it often as a reference point .

was “pleased and surprised” to win.

Drawing The picture wall in the office serves as the firm’s living brochure of ongoing projects.

Studio

V doesn’t print a

Fishing Once a year, Valgora goes fishing with a small group of friends, his father and —more recently — his sons, in a remote region off the coast of Ontario. The men drive two days to the location, before they take a six-hour boat ride to the secret, untouched island in Lake Superior. For two weeks, Valgora is off the grid: There’s no electricity and no cell phone service on the island.

3D model Valgora’s desk houses multiple mock-ups of current projects.

Grain elevators

This particular model, made with a 3D printer, is currently under

These structures are

construction. It involves what he called “the longest continuous

the reason Valgora

bar in the world,” but Valgora wouldn’t divulge any more details,

became an architect.

including where it

He will soon travel to

is located.

Hamburg, New York,

brochure, so the wall

the small town near

is how Valgora and

Buffalo where he grew

his team displays their work to clients. The pictures change on

up, to work on turning

a regular basis, but one item is constant: this black-and-white

the grain elevators there into a cultural, creative community space.

drawing by Valgora’s younger son, Julian.

In high school, Valgora used to paint and draw the structures.

26 December 2014 www.TheRealDeal.com

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Commercial Ma r k e t

Stodgy firms are hot again in 2014

Law and financial firms rise back to the top of the list for big Midtown leases

By Adam Pincus idtown’s old standby finance and legal tenants are back on top after being displaced last year by the “hotter” firms in the technology, advertising, media and information sector. Seven of the top 10 leases in Manhattan’s largest office mar-

ket so far this year were inked by financial services and legal firms. That compares with 2013, when those traditional types of tenants accounted for just three of the top 10 deals, research from commercial brokerage JLL showed last month. In addition, the TAMI sector, which accounted for three of the

largest Midtown deals last year, represented only one so far this year. However, TAMI tenants continue to grow their share in Manhattan leasing among smaller deals, the JLL survey found. Much of the increase in large deals by law firms and financial firms was driven by relocations. For example White & Case, the

international law firm with upwards of 400 attorneys in New York alone, signed a lease in April to take more than 440,000 square feet at 1221 Sixth Avenue, data from CoStar Group shows. The firm will be relocating from 1155 Sixth Avenue. Insiders said relocations have become relatively more affordable with the sharp rise in construction costs. That’s because when a company compares the cost of renovating its often inefficient old space to that of moving to a new building, the relocation is a better option. “We look at the two capital pieces and there is not much dif-

Manhattan office stats AVAILABILITY AVG. ASKING RATE RENT

Manhattan Nov ’14 10.1% $66.25 Oct ’14 10.2% $66.22 Midtown Nov ’14 10.6% $74.96 Oct ’14 10.7% $75.73 Midtown South Nov ’14 8.0% $59.51 Oct ’14 8.2% $58.54 Downtown Nov ’14 12.1% $52.00 Oct ’14 12.3% $51.91 Source: Colliers International

EL EV ATE YOU R

CAR EER

ference,” said John Ryan, a principal with Avison Young. He was not involved in the White & Case deal, but said many tenants are looking at costs in a similar way. Leasing volume in Manhattan overall bounced back from a slow October, but remained below November one year ago. Tenants inked 2.4 million square feet of leases last month, up from 1.8 million in October, but down from 3.4 million in November 2013, data from Colliers International showed. Last month, the average asking rent for Manhattan rose by 3 cents to $66.25 per square foot, while the availability rate, which measures space vacant or that will become available in the next 12 months, tightened by 0.1 point to 10.1 percent, the Colliers data revealed.

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A growing catalog and online shopping firm is expected to move out of its multi-floor offices at 463 Seventh Avenue in the Penn Plaza submarket, leaving a large block of space available for occupancy late next year. The company, the OSP Group, focuses on plus-sized women’s fashions, and will likely vacate its space on floors 15 through 21 in the fall of 2015. The company will leave behind just over 120,000 square feet. The firm did not immediately respond to a message asking to confirm the move or if it located a new space. The block of space at 463 Seventh Avenue, a 22-story building located on the corner of 35th Street, will likely be leased to two or three tenants, said David Levy, a principal with Adams & Company Real Estate, which manages the building. “The market is extremely Continued on page 126

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In their words...

The funniest and most insightful comments on real estate

“When deep-pocketed firms go on a talent tear, they may buy a few Babe Ruths, but are just as likely to end up with a few duds.” CPEX’s Timothy King, on the hiring spree expected after TPG’s acquisition of brokerage DTZ

“It’s far more sophisticated to do something like a mobile phone than it is to do an average building.”

“In many ways, fantasy is better than reality.” Savanna’s Chris Schlank, on Billy Macklowe’s lofty expectations for rents at 386 Park Avenue South.

“Don’t shy away from density.” Urban planner Dr. Sujata Govada, on how NYC can learn from Hong Kong when it comes to providing affordable housing.

“He said it like this was a positive thing.” State Sen. Liz Krueger (D), on how a developer in her district told her that most of his buyers would rarely be in the city.

It “puts a stiletto in the heart of the outdated notion that Lower Manhattan is stuffy and gray.”

“I don’t know how much Alliance for Downtown New York’s Jessica Lappin, on the Brown [University] significance of Condé Nast’s move to One World Trade Center. contributed to my success, but the ability to B.S. and maneuver in situations did. “Someday, someone I was a psychology major.” will really want it and Doug Harmon of Eastdil Secured they’ll let me know.” “Does this building duck? What are they thinking?” Comedian Chris Rock, on steering clear of One World Trade Center.

30 December 2014 www.TheRealDeal.com

Hedge fund billionaire Bill Ackman, on buying a $90 million pad at One57 so that he can flip it.

“We looked at Williamsburg and Dumbo. It seemed a little 2012.” Andrew Essex, vice-chairman of hip advertising firm Droga5, on opting to make a move to Lower Manhattan.

Starchitect Karim Rashid, on the relative simplicity of most architecture.

“It could be similar to the voter ID case in Texas.”

Attorney Peter Faber, comparing the questionable legality of a tax specifically aimed at pied-à-terre owners to a contentious Texas law that was upheld by the Supreme Court.

“He’s the ghost of Gardiner.”

Hudson Valley local John Habersberger, on absentee landowner and Hollywood superstar Robert De Niro.

“There’s an element of risk even if you do nothing.” Trinity Real Estate CEO John Pizer, on why the church has decided to enter the residential development arena for the first time. Sources: New York Times, Wall Street Journal, Saturday Night Live and TRD reporting.

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

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Easing condo lending Helping millennials and seniors access the red-hot market By Kenneth Harney all it the condo conundrum: In many urban areas nationwide, demand for condominium units is rising, according to new real estate industry estimates, yet mortgage financing for entry-level condo buyers is getting squeezed by a key federal agency. It’s a little schizophrenic. List prices for condos in major markets are rising faster than those for single-family detached homes in the same areas. Nationwide, condo sales are steadily taking away market share from traditional homes as suburban boomers downsize, and other owners want to live closer to urban workplaces and center city attractions. But here’s the troublesome flip side: Significant financing barriers erected by the federal government are making purchases of entry-level condos by millennials and other first-time buyers more difficult. Despite indications from the White House (as recently as October) that the government wants to loosen up on mortgage credit availability for middle-income Americans, the Federal Housing Administration continues to severely restrict the

for about 27 percent of home resales. In Miami, they were 45 percent. The main problem in the otherwise surging condo sector, many housing experts say, is the unnecessary blockage of entry points at the lower range of the price spectrum. The FHA, which for decades was the go-to source of mortgage money for first-time buyers, currently will only consider insuring mortgages in less than 7 percent of the country’s estimated 150,000-plus condominium developments. The agency has stopped approving so-called “spot” loans in condo projects that have not applied for and received special “certification” — a process that many condo homeowner association boards consider burdensome and frequently leads to rejection. David Stevens, who was FHA commissioner in 2010 when the agency banned spot loans, and now heads the Mortgage Bankers Association, says it’s time to bring them back, with reasonable restrictions, because for many young first-time purchasers, “FHA is the sole source” of low-down-payment

The FHA severely restricts the number of condo projects where it will make its low-down-payment mortgages available. But change may be coming. number of condo projects where it will make its low-down-payment insured mortgages available. The same restrictions make it impossible for large numbers of seniors who own condo units to obtain reverse mortgages — an important home-loan niche that the FHA dominates. Despite these problems, condos on the whole are doing well. The real estate site Trulia reports that increases in asking prices in the 20 largest condo markets are outpacing increases in single-family asking prices. In Miami, list prices for condos in September were 17 percent higher than the year before, while single-family list prices jumped 11.7 percent. In Boston, condo list prices increased at a rate four times as fast as single-family homes. In the Washington, D.C., area and San Diego, condo list prices rose by nearly double the rate of single-family homes. Nonetheless, selling prices for condos remain significantly below those for detached homes on average nationwide, making them more affordable. This points to rising popularity and market share for condos. Lawrence Yun, chief economist for the National Association of Realtors, estimates that condos recently have grown to between 11 percent and 12 percent market share, from roughly an 8 percent. But in some urban markets, the condo share is considerably higher. During September in Los Angeles, according to CoreLogic, condos accounted 34 December 2014 www.TheRealDeal.com

financing. Though the agency confronted significant condo foreclosure problems stemming from the housing bust, Stevens told me in an interview that this doesn’t mean you keep such restrictions in place when the crisis has abated, as at present. Eric Boucher, chief operating officer of ReadySetLoan, a national condo consulting firm based in South Windsor, Connecticut, says the current spot loan ban can have crushing impacts on seniors who need reverse mortgages to supplement their incomes. He says he attended a condo association meeting recently where unit owners in their 80s described their inability to obtain a reverse mortgage, solely because of the FHA’s policy. So are there any fresh signs of a change of heart at the FHA — any reason to hope for an improvement? Maybe. The agency declined to comment on whether it might loosen its certification restrictions and allow spot loans to buyers and owners in uncertified developments that can qualify under financial stability criteria. But industry and other sources say the agency is feeling the political heat — from real estate and mortgage lobbies, as well as from Capitol Hill for entry-level condo buyers — and is drafting a major condo proposal for 2015 that could bring back FHA financing to greater numbers of buyers and existing unit owners. Kenneth Harney is a syndicated columnist.

GOVERNMENT BRIEFS Fulton Center subway hub reopens Lower Manhattan’s Fulton Center, where nine subway lines converge, reopened last month, more than a decade after the Sept. 11, 2001, terrorist attacks destroyed part of it. As many as 300,000 passengers a day are expected to The retail center at the Fulton Street hub. pass through the station, the New York Times reported. The center features more than 60,000 square feet of commercial space, two-thirds of which is reserved for retail. Australian developer Westfield Group was tapped by the Metropolitan Transit Authority last year to handle the leasing. It is also handling leasing at the World Trade Center transit hub nearby. The Fulton Street hub was originally supposed to be completed in 2007, and cost $750 million; it took another seven years and cost $1.4 billion. In additional signs of the area’s rebirth, tenants began to move into One World Trade Center last month, and redevelopment is beginning just down the block at the South Street Seaport.

FEMA to audit city flood zones The Federal Emergency Management Agency will perform an audit on the storm-proofing of 70,000 New York City properties, gauging their compliance with the National Flood Insurance Program. The review, Crain’s reported, was triggered in part by a request from the city Buildings Department to explore joining a FEMA program called the Community Rating Brooklyn’s Red Hook, inundated by System, which grants discounts Sandy, is among the neighborhoods with many buildings in flood zones. on flood insurance premiums to municipalities that exceed the minimum federal resiliency requirements. An analysis released by Comptroller Scott Stringer found that more than 84,000 city buildings, worth over $129 billion, lie in flood zones. In Brooklyn, the value of the buildings in those zones rose to $36 billion this year, from $12 billion in 2010.

Feds may probe Waldorf sale to Chinese Potential security risks arising from Blackstone Group’s $1.95 billion sale of the Waldorf-Astoria to a Chinese company may get a federal government review. The Stephen Schwarzman-led buyout house is even mulling asking the government to go ahead with an investigation, to speed up the sale, the New York Post reported. Blackstoneowned Hilton Worldwide Holdings said on Oct. 6 it will sell the Waldorf to Beijing-based Anbang Insurance Group in the most expensive single hotel deal ever. The deal is supposed to close Dec. 31. The Committee on Foreign Investment in the United States is split over whether the luxury hotel, home to the US ambassador to the United Nations and one of two NYC hotels considered The Waldorf-Astoria safe enough for top-level officials like President Obama, poses any potential spying threat, the Post reported. The concern is that spies will have access to a location where world leaders hold top-secret discussions and much UN business is done.

City targets illegal apartments The Buildings Department is cracking down on illegal apartment conversions, particularly in Queens, where half of all complaints originate. During the last fiscal year, 272 of the 278 warrants the city filed to force homeowners to provide access to their homes — after inspectors repeatedly couldn’t gain entry — were in Queens, DNAinfo reported. Homeowners may be slapped with penalties up to $25,000 for creating illegal basement apartments, creating a home in an area zoned for manufacturing or industrial uses, or dividing an apartment into single-room-occupancy units.

Compiled by Brendan O’Connor

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Spitzer takes reins following father’s death Former governor secures second development site on Far West Side and has hand in distressed Williamsburg plot as firm ramps up activity

By Rich Bockmann ow more than ever, the “Spitzer” in Spitzer Engineering refers to son Eliot, the fallen governor who continues his efforts to reinvent himself as a real estate mogul. Bernard Spitzer, founder of the real estate company that supported his son’s now-sullied political career, died last month from Parkinson’s disease. His will named his youngest son, Eliot, as his successor at the helm of the family firm. For a company that eschews formal titles, the move symbolically confirms what the industry has known for some time: that Eliot Spitzer has been playing an ever-larger role in running the company since he returned to its office at 730 Fifth Avenue following his resignation as governor in 2008, after he left Albany as a result of a prostitution scandal. And now that it’s “The Eliot Show,” the company is getting back into large-scale development, a business it hasn’t been in for 25 years. “We’ve yet to see him really get his hands dirty and build a building,” said Peter Hauspurg, Eastern Consolidated CEO, who met with Spitzer last year to discuss finding high-profile assets to invest in. “I guess that’s what he’s about to do now.”

Former Gov. Eliot Spitzer is moving his family’s firm back into development.

Reinventing himself

Second bet on Far West Side Spitzer recently made a second move on his most visible project, which is planned for the Hudson Yards area, The Real Deal has learned. A year ago, he paid $88 million to buy a development site at 511 West 35th Street. Then several months ago, he quietly acquired control of a land lease on a plot adjacent to the development site, a move that doubles the project’s development potential. The second plot, at the northwest corner of 35th Street and 10th Avenue, allows for 172,000 square feet of buildable space as of right. Through a pair of building bonuses available to projects in the neighborhood, that total can be increased to 414,600 square feet. Spitzer plans to build a hotel with retail and possibly a residential component on the site he owns next door, which holds 414,744 buildable square feet. If combined, the two sites could allow for a large building holding nearly 830,000 square feet — a project that would plant the Spitzer name in one of the city’s hottest new neighborhoods. An active developer in the area, Jorge Madruga of Maddd Equities, purchased a 99-year-lease on the corner property earlier this year for $62 million. Neither Spitzer nor Madruga would comment, but a source unconnected to either said Spitzer now controls the site. Spitzer also hired the law firm Sheldon Lobel, which specializes in land-use and 36 December 2014 www.TheRealDeal.com

man who served as Bernard Spitzer’s righthand man for more than 25 years, and Jeffrey Moerdler, an attorney at the firm Mintz Levin who has advised Spitzer Engineering for a similar period of time. He’s also working with Bob Knakal, the Massey Knakal chairman who brought Spitzer the deal for 511 West 35th Street. Knakal said he’s “always looking for sites for Eliot.” “He’s clearly a very smart guy,” said Tim King, managing partner of the Brooklyn-based commercial brokerage CPEX. “All the smart people I know typically surround themselves with the kinds of people who can make whatever needs to happen, happen.” Spitzer also went into contract earlier this year to buy a large development site on the Williamsburg waterfront, a longstalled project with an affordable-housing component that comes with a different set of potential stumbling blocks. “Anything involving waterfront has its own challenges,” King said. “But if there are challenges, then there are benefits. From what I’ve seen so far, I think they’ll do very well.”

Bernard Spitzer

Dick Morris

“I think he’s put his political ambitions to the side — at least for a while. He’s got enough money to be able to run for anything. Money’s not the objective. I think he decided it’s time to move on.” Dick Morris, political adviser

Bob Knakal

zoning matters, to lobby the Department of City Planning regarding the portion of the site he owns outright. The project is a complicated one with lots of moving parts, and something that

Tim King

may be difficult for a first-time developer, but observers say Spitzer has surrounded himself with industry professionals who can pull these kinds of deals off. Those people include Charles Morisi, the

Since leaving Albany, Spitzer has tried his hand at several endeavors. He began penning columns for the online magazine Slate and served as an adjunct professor from 2009 to 2012 at City College, his father’s alma mater, teaching political science courses. Spitzer also had unsuccessful stints hosting shows on CNN and the former Current TV, and briefly threw his hat back into the political arena with failed bid for New York City comptroller last year. But now, with a pair of large development projects in the works, Spitzer appears set on making his name in real estate, an industry that he has eschewed for most of his life. “I get the impression it’s sort of an afterlife,” said political adviser Dick Morris, who worked with Spitzer for more than 10 years and ran his two successful campaigns for attorney general. “I think he’s put his political ambitions to the side — at least for a while. He’s got enough money to be able to run for anything. Money’s not the objective. I think he decided it’s time to move on.” Morris, whose father Eugene was an attorney who counted the likes of Donald Trump, Sam LeFrak and Bernard Spitzer as his clients, said the son inherited a few of his father’s character traits, including his driven personality. “They’re both very disciplined and very goal-oriented, and they can be somewhat harsh to those close to them in pursuit of their objectives,” Morris said. “Neither has a soft touch.” TRD www.TheRealDeal.com January 2014 35

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By E.B. Solomont he ravenous appetite for New York City new development product has a growing number of wealthy buyers scooping up luxury homes sight unseen. From Sept. 1 though early last month, a whopping 45 percent of contracts signed on units above $4 million were made off of floorplans, according to Olshan Realty’s luxury market report. “It’s the highest I’ve seen,” the firm’s founder Donna Olshan told The Real Deal. The data indicates an upward trend. Since Jan. 1 to Sept. 1, 37 percent of contracts signed at $4 million or more were off of floorplans, compared to 34 percent for the same period last year. A $19.75 million penthouse at Rudin Management’s Greenwich Lane, for example, which went into contract the week of Oct. 6, was sold off floorplans. The 3,977-square-foot unit is located at 140 West 12th Street. A week earlier, a buyer signed a con-

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NOT TO SCALE A LL DI MEN SI ON S, A REA S, A N D SQUA RE FEET /MET ERS A RE A PPROX I MAT E A N D SU BJEC T TO N ORMA L C ON ST RU C T I ON VA RI A N C ES A N D TOLERA N C ES. SQUA RE FOOTAGE EXC EEDS T H E U SA BLE FLOOR A REA A N D I N C LU DES C OLU MN S, MEC H A N I C A L PI PE SH A FT, SH A FT WAYS, C H A SEWAYS A N D C ON DU I T S A N D OT HER C OMMON ELEMEN T S. SPO NS O R R E S E RV E S THE R IG H T TO M A K E C H A N GES I N AC C ORDA N C E W I T H T H E T ERMS OF T HE OFFERI N G PLA N . PLA N S A N D DI MEN SI ON MAY C ON TA I N MI N OR VA RI AT I ON FROM FLOOR TO FLOOR. ROOM DI MEN SI ON S A RE MEA SU RED ON T H E A PPROX I MAT E C EN T ERLI N E OF EAC H ROOM. GI VEN T H E C U RVED N AT U RE OF T H E BU I LDI N G, WA LL-TO- WA LL MEA SU REMEN T S W I T HI N A ROOM W ILL D IF F E R D E P E ND ING O N WH E R E THE MEA SU REMEN T I S TA KEN . MORE DETA I LED FLOOR PLA N S A RE C ON TA I N ED I N T H E OFFERI N G PLA N AVA I LA BLE FROM SPON SOR. T H E C OMPLET E OFFERI N G T ERMS A RE I N A N OFFERI N G PLA N AVA I LA BLE FROM SPON SOR.

Left, Time Equities’ 50 West, a luxury tower Downtown, that has sold 40 percent of its units off floorplans like the one on the top right, which features a three-bedroom apartment. Bottom right, the landscaped courtyard garden at Rudin Management’s Greenwich Lane, where the $19.75 million penthouse was sold off floorplans.

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Neighborhoods

A stretch of Soho

comes into its own

Lower Sixth Avenue sees new building as neighborhood expands

By C. J. Hughes he southernmost leg of Sixth Avenue has been more of a place to pass through than to visit since the 1920s, when the city blasted subway lines through parts of MacDougal and Sullivan streets, then covered the tracks with a new roadway. And developers may have been dissuaded from doing anything about that. The massive infrastructure project left the road, formally known as the Avenue of the Americas, lined with castaway lots whose odd shapes discouraged construction. But as Soho’s retail hub balloons, and Hudson Square becomes a viable office district, the avenue is getting squeezed from both sides, and developers are giving the skinny stretch a second look. A shortage of buildable land downtown is also playing a part in the area’s growing popularity, observers say. Several major condo and office projects are now underway on the strip, which is hung with rusted medallions from the Latin American countries that gave the thoroughfare its official name. To be sure, the area is still something of a bargain for the neighborhood. Retail rents on West Broadway, where most stores are located, are about $400 a square foot, brokers say. That’s less than half of the cost on prime Soho blocks closer to Broadway, where the going rate is nearly $1,000 a foot. Then again, 1 Soho Square, a stylishly revamped former factory complex that will ask $80 per foot for office rents, is mounting credible competition to the top of the market in Hudson Square which contains the bulk of the neighborhood’s offices. Still, with the infusion of new residents, office workers and shops, it may not be long until the western edge of Soho and Hudson Square are virtually indistinguishable, said Margie Sarway, the director of Sinvin Real Estate, a retailfocused brokerage on nearby Varick Street. “Hudson Square used to be considered Soho,” Sarway said, referring to a decade ago, before the neighborhood had its own moniker. But re-unification could be imminent, she added: “If they keep spreading, eventually they’re going to meet.” Below, The Real Deal looks at the area’s most notable projects. 1. 10 Sullivan Street Among the splashy new condos rising here is this flatiron-shaped version on a trapezoidal lot at Broome Street, developed by the team of Madison Equities and Property Markets Group. With 19 units in 16 stories, plus 4 adjacent townhouses, this project is on the site of a former car wash and required a zoning change, as its block had been designated for industrial use. On a recent afternoon, five floors were out of the ground in the tower, which will be tawny brick and have a rounded

40 December 2014 www.TheRealDeal.com

The view from One Vandam, one of the buildings going up on the western edge of Soho.

point, facing Downtown. The project is supposed to be completed next year. A message left with their sales office was not returned.

At $26 million, the bigger, gray-toned headquarters will not come cheap. But Michael Kors, the fashion designer, kicked in $5 million, which earned him naming rights; the

But 10 of the 14 units that have hit the market since summer have sold, according to StreetEasy, the real estate website. The least expensive, a two-bedroom with two baths and

city contributed $8 million. In a controversial move, God’s Love also sold $4 million in unused development rights, or air rights, to One

“I think the area is poised for rent growth now, but in the next 5 to 10 years, it will be a completely different market.” Matt Ogle, SRS Real Estate Partners 1,200 square feet, was about $3 million. Retail will take up 10 Sullivan’s base, brokers say, but details about its size and configuration were unavailable. Despite the arrival of boutiques, the neighborhood sorely needs a well-stocked grocery store, especially considering its new residential cast, Sarway said. “It’s really just bodegas now.” 2. 166 Avenue of the Americas At this corner, at Spring Street, the not-for-profit God’s Love We Deliver, which serves meals to people who are ill at home, is expanding its existing headquarters while also capitalizing on newfound interest in the area. The charity moved to the site after buying a red-brick two-story, 18,000-square-foot building for $570,000 at a city auction in 1993. Now, it’s enlarging that building to five stories and 48,000 square feet which will include a kitchen that, at 5,800 square feet, will no longer be in a basement but on the window-lined second floor. The charity serves about 1 million meals a year but is expected to serve 2 million with the new facility.

Vandam, the 14-story condo next door (see “180 Avenue of the Americas,” below.) Even though the site has a deed restriction on it, meaning it can only be sold to a not-forprofit, the air rights had no such limit in place. Still, to fulfill requirements triggered because of One Vandam’s larger-than-typical size, the condo had to have some public space outside the footprint of its building. The city-approved solution is to give residents access to the 3,400-square-foot multi-level garden on God’s Love’s roof, which was covered in that purchase of air rights. The outdoor space, which will have an herb garden, will also be used by the charity’s workers. 3. 186 Spring Street This corner parcel, which once contained a deli, as well as a townhouse belonging to Adam Horovitz of the rap group the Beastie Boys, is now being marketed for a 12,500-squarefoot store by owner Waterbridge Capital, which would presumably build a space once it secured a tenant. The site, which has changed hands a couple times in recent years, is not being targeted for any condos,

Neighborhoods 54 MacDougal Street

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however, according to a woman who answered the phone at Waterbridge, but declined to provide any more information. Asking rents were similarly not available. Previously, developer Stephane Boivin assembled the site, paying $10 million for the corner parcel and about $6 million for Horovitz’s building, which was razed. The plan during that go-around was to put up a mixed-use condoretail complex, according to news reports. In general, trendy streets like Broadway and Greene are among those in Soho that can fetch more than $1,000 a foot for their stores, which is what Prada paid in 2013 to renew its lease at 575 Broadway, at Prince Street. But rents drop off considerably just a few blocks west, with about $400 a foot charged on West Broadway as mentioned, and $350 on side streets like Prince and Spring nearby, brokers say. Redevelopment interest in Soho’s western flank comes amid major turnover. For instance, diagonally opposite No. 186 is Metropolitan Lumber and Hardware, whose entryway at 175 Spring, with a tall stone arch, has been

a familiar sight in the area for over a century. That 10,400-square-foot site, which is not landmarked, is now also on the market for lease. 4. 180 Avenue of the Americas This 14-story limestone-and-glass condo, which is being marketed as One Vandam, includes 25 one- to fivebedrooms, including penthouses. Developed by Quinlan Development Group and Tavros Development Partners, the wedge-shaped building is about 70 percent sold after a year, said Sean Murphy Turner, the Stribling & Associates agent handling sales. And with bleached walnut cabinets and Celador counters, the apartments have sold for prices that start at about $2,000 a square foot, according to StreetEasy. The building, which purchased air rights from the adjacent God’s Love We Deliver charity (see “166 Avenue of the Americas,” above) to add extra stories in a low-slung area, will be connected to the roof garden of that building by short stairway as part of a zoning agreement, Turner

186 Spring Street

said. But, she added, One Vandam’s residents will most likely instead use a 6,400-square-foot wraparound terrace in their own building, which God’s Love employees will not be able to access. One Vandam will also have a 14,000-square-foot storefront, which will probably be divided into two berths, Turner said. A resident of Tribeca for years, Turner added that it barely surprises her any more that these types of once-unremarkable places are now getting attention. “You build an amazing building, and all of sudden, you’ve put a stamp on an area,” she said. 5. 233 Spring Street/161 Avenue of the Americas Channeling the buzz in Hudson Square, which has seen its printing plants converted to offices for tech and media tenants in recent years, these adjacent buildings are remaking themselves as 1 Soho Square, a luxury office complex. Named for a modest park across the street (a space that the local business improvement district group has plans to Continued on page 120

www.TheRealDeal.com December 2014 41

New condo projects pack more into smaller spaces

“Efficiency” the buzzword in the luxury sector, as land prices and building costs rise By E.B. Solomont orget studio apartments. A new batch of efficiency units can be found in luxury buildings, as developers seek ways to add value for high-end buyers while keeping a lid on their owns costs. Unlike the sprawling trophy apartments hitting the market in the past few years, tighter-cut units at buildings like 15 Leonard Street, the Charles at 1355 First Avenue, the Rudin family’s Greenwich Lane and others offer more value per square foot for buyers, brokers said. “You could have a 4,000-square-foot three-bedroom or you could have a 2,000-square-foot three-bedroom and with the right layout, really have every square inch be usable square footage,” said Wendy Maitland, director of sales at Town Residential. Town recently put four full-floor condos under contract at 15 Leonard Street, a project being developed by Steve and Sherri Schnall’s Tribeca Development Partners and Gold Development. The building’s four-bedroom condo units measure 2,621 square feet — and are under contract for prices ranging from $6.4 million to $7.5 million, or $2,441 per square foot to $2,861 per square foot.

The average sale price in the luxury market in the third quarter of the year was $7.25 million, and the median sale price was $5 million, according to real estate appraisal firm Miller Samuel. The average price per square foot was $2,617 during the quarter, up from $2,055 per square foot a year earlier. “The average price per square foot is getting high, so in order to assuage that, given the fact that land is so expensive and the cost of construction is expensive, we’re advising our clients to make more efficient apartments,” said Stephen Kliegerman, president of Halstead Property Development Marketing. He noted that the move toward efficiency is gaining the most traction in the middle of the market and in the $1 million to $5 million segment. “There’s a lack of inventory in those price points,” Kliegerman said. “You want to build those units more economically to meet those price points.” At developer Christopher Okada’s 432 West 52nd Street, a 918-square-foot two-bedroom unit recently went into contract for $1.325 million, or $1,443 per square foot. But Maitland said even at the higher price points, the luxury market is changing.

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Town is marketing a four-bed, four-bath condo at the Charles that measures 3,451 square feet. The 20th floor unit, which has a dining room, living room and library, has an asking price of $8.87 million, or $2,750 per square foot. “The ultra high end of the market — which would have been maybe slightly under $10 million and up — used to be trophy buyers,” Maitland said. “Now it’s people who are actually living and working in New York City.” TRD www.TheRealDeal.com January 2012 00

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Residential Brokerage

Brokers’ winding paths

Talent twists and turns as NYC residential firms poach from each other

By Rich Bockmann

rokers aren’t the kind of people who sit still. Whether they’re showing properties, meeting with developers or “networking” at a boozy industry event, brokers are constantly on the go. And that often means switching companies. While it’s true that the employment pool is a naturally fluid one — as independent contractors, brokers aren’t tied to their jobs the way W2-employees are — there are times when it seems like one could make a tidy sum printing up new business cards. Under certain conditions, one firm can be the hot place to be, drawing in top talent from competitors across the city. Other circumstances can make a brokerage seem more like a sinking ship. The startup, tech-centric Urban Compass, for example, made the push into the sales side of the business late last year, and since poached talent like Douglas Elliman star-broker Leonard Steinberg and Brown Harris Stevens’ Kyle Blackmon. Other attention-grabbing moves included longtime Elliman pro Avi Voda, who left the company after 18 years to co-found his own firm, Voda Bauer Real Estate. Voda, like other leaders of newly started firms in the city, has been knee-deep in recruiting efforts, bringing his firm to nearly 40 strong since launching in April.

44 December 2014 www.TheRealDeal.com

He said he’s hiring brokers who are looking for a place where they can grow. “It’s my job to help them and show them how to get to the next level,” he said. Elliman itself has been recruiting heavily, particularly from rival Town Residential, which started bleeding brokers amid a power struggle earlier this year between co-founders Andrew Heiberger and Joseph Sitt. “They’re trying to get the rainmakers,” Voda said of Elliman’s recruiting efforts. “They’re trying to get the top talent.” Heiberger said the “Town in turmoil” narrative was a convenient tool used by his competitors, but discredited the idea it was the reason brokers decided to leave. “While it is no secret that there was a six-week dispute between the principals of Town, the handful of agents that chose to leave did not cite that as a reason,” he claimed in an email. Heiberger and Sitt eventually buried the hatchet, and Town is back in expansion mode. And then there’s the case of Corcoran which, for reasons that aren’t entirely clear, has lost a number of high-profile brokers over the past several months. Below, in alphabetical order, The Real Deal takes a look at 25 of the most noteworthy broker moves in the past year. TRD

Residential Brokerage

Paul Anand – from Corcoran Brown Harris Stevens (October)

Anand was a top broker at Corcoran who once held the exclusive for the city’s priciest townhouse, a $114 million home at 12 East 69th Street he co-listed with Corcoran’s Gabriella Dufwa. Anand has a list of clients including athletes and celebrities. He brought with him to BHS members of his team, including Agnes Beaugendre, Sharon Elbaz, Ashley Fitterer and Timea Greenberg. Anand ranked 31st on TRD’s list of the top 75 Manhattan brokers this year.

Kyle Blackmon – from Brown Harris Stevens Urban Compass (November)

Blackmon holds the distinction of selling New York City’s priciest apartment: Citigroup chairman Sandy Weill’s penthouse at 15 Central Park West, which Russian oligarch Dmitry Rybolovlev bought for $88 million in 2012. Blackmon’s departure was one of the biggest from BHS in a decade, prompting President Hall Wilkie to declare “the equity proposition offered to him trumps a singular focus on brokerage.” Blackmon ranked 24th on TRD’s top-broker list this year.

Bill Cunningham – from Corcoran Trump International Realty (May)

After joining Corcoran as an agent in 2001, Cunningham rose to become manager of the firm’s busiest office, 660 Madison Avenue, where he oversaw nearly 400 brokers. He joined the Trump Organization as president of its brokerage arm, overseeing offices in NYC, Westchester, Chicago, Miami and Charlotte, North Carolina.

Jay Glazer – from Warburg Realty Urban Compass (June)

Glazer, who was named one of Warburg’s top brokers in 2013, cited Steinberg’s move to Urban Compass as one of the factors that drew him from Warburg. “He’s incredibly well respected in the industry, so it definitely added an appeal. It brought a gravitas that was very compelling,” Glazer told TRD.

Douglas Heddings – from Heddings Property Group Core (July)

Heddings founded his own residential brokerage in 2010 after leaving Rutenberg Realty. The company had around 40 agents at its peak, but went through a period of downsizing last year. Core absorbed HPG when it hired Heddings over the summer.

Debra LaChance – from Corcoran Urban Compass (September)

LaChance and her team — Denise LaChance, Ariel Brenner, Betsey Kane Margolies and Kimberlee Knecht — ran a boutique division within Corcoran specializing in new developments. The team was named number 43 out of the top 250 in the country by the Wall Street Journal and Real Trends in 2012, with $102.9 million worth of closed transactions.

Fabienne Lecole – from Corcoran William Raveis (September)

Lecole won a number of accolades during her 13 years at Corcoran. She was named to the 2014 President’s Council, which recognizes the firm’s top 2 percent of producers, and won the 2009 and 2012 salesperson of the year awards for Corcoran’s Carnegie Hill office.

Frank Arends and Daniela Zakarya – from Town Residential Douglas Elliman (March)

Partners Arends and Zakarya were top producers at Town when they returned to their former firm, Elliman. The move came shortly after Town owners Heiberger and Sitt settled their legal spat, which Arends called “toxic.”

Julia Boland – from Halstead Property William Raveis (September)

Boland spent seven years at Halstead, where her team was named the company’s top new development marketing broker for 2012. She joined William Raveis in September about six months after the firm set up shop in Manhattan, to launch its new development division. She also came in at the No. 57 spot of TRD’s ranking of the top Manhattan agents.

Mary Anne Fusco – from Douglas Elliman Town Residential (January)

Fusco was a top producer at Elliman, and was an executive vice president when she left the company after eight years. Over the course of her career, which started at Coldwell Banker Hunt Kennedy, she has logged more than 1,000 transactions totaling more than $400 million in sales.

Michael Guerra – from Douglas Elliman Warburg Realty (April)

Guerra joined Warburg as a sales director to lead the firm’s expansion into Brooklyn. He had previously served as a managing director and executive vice president at Elliman, where he grew the Brooklyn division from one to five offices.

Roy Kim – from Extell Development Urban Compass (July)

As Extell’s design chief, Kim worked on projects such as One57 and the Carlton House before heading to Urban Compass to build its new development marketing arm. Prior to his eight years at Extell, Kim was the director of pre-development at Corcoran Sunshine and worked on design teams for starchitects including Rem Koolhaas and Zaha Hadid.

Patty LaRocco – from Town Residential Douglas Elliman (February)

LaRocco brought her five-person team back to Elliman, where she had previously spent eight years before moving to Town in 2012. Before the move, her StreetEasy profile labeled her Town’s No. 1 Downtown broker.

Eugene Litvak – from Citi Habitats Urban Compass (September)

Litvak’s team was Citi Habitats’ team of the year for overall production and rentals for 2013. Urban Compass in September hired the 10-person team to spearhead opening a Brooklyn office within six months. The move came amid a legal dispute in which Citi Habitats accused Urban Compass of accessing its proprietary listings database and possibly using the data to poach top agents.

www.TheRealDeal.com December 2014 45

Residential Brokerage

Elaine Mayers – from Citi Habitats Town Residential (August)

Mayers won numerous awards during her eight years at Citi Habitats including Top Sales Agent and Top Listings Agent for several years. She said “it’s time to make a change,” when she announced the move to Town. Team members Carol Nemeroff, Talia Schor and Joe Snyder moved along with her.

Lauren Muss – from Corcoran Douglas Elliman (September)

Muss was named Corcoran’s Individual Salesperson of the Year in 2010 and 2013. “It was a very hard decision,” she said of the choice to leave for Elliman. “I was the poster girl for Corcoran.”

Jarrod Guy Randolph – from JGR Property Group Town Residential (September)

Named one of the industry’s fastest-rising stars under the age of 35 by TRD earlier this year, Randolph was a top producer at Core when he struck out on his own in June to start JGR Property Group. That experiment was short-lived, and he shut down the fledgling shop fewer than four months later to join Town, as an agent in the firm’s Flatiron office.

“While it is no secret that there was a sixweek dispute between the principals of Town, the handful of agents that chose to leave did not cite that as a reason.”

Brett Miles – from Town Elliman (September)

Douglas

Miles’ move to Elliman comes after he went over to Town in 2010 from Brown Harris Stevens with partner Susan Green. Green decided to stay put when he left for Elliman. The duo ranked No. 48 on TRD’s list of top brokers earlier this year, with more than $95 million in exclusive listings.

Richard Nassimi – from Corcoran the Nassimi Group (April)

Nassimi brought two members of his team from Corcoran, Maria Ienna and Silvia Reyero, when he left to start his own eponymous firm. He had previously been the head of sales at the W Downtown, where he was replaced last year by the Marketing Directors. His company’s website has a number of resale listings in the building.

Shlomi Reuveni – from Brown Harris Stevens Town Residential (April)

Reuveni left his job as head of BHS’ new development marketing team to take the reins as Town’s managing director of new development. Reuveni was the first big hire for Town following a wave of defectors in the wake of the legal dispute between Sitt and Heiberger.

Michael Signet – from Bond New York Douglas Elliman (July)

Signet had been the sales director overseeing all of Bond’s offices since he joined the company in 2005. He joined Elliman as head of its 774 Broadway office, managing about 80 agents.

Andrew Heiberger, Town

Leonard Steinberg and Hervé Senequier – Douglas Elliman Urban Compass (June)

The partners’ Luxury Loft Team was a perennial powerhouse at Elliman, coming in at the No. 6 spot in TRD’s ranking of top brokers this year with $332 million in exclusive listings. In a blog post, Steinberg said he saw “the future” in Urban Compass, where he is now president of the tech-centric firm. Senequier is the company’s vice president of strategic development.

Janet Wilkinson – from Corcoran Keller Williams NYC (February)

Wilkinson spent 17 years on Wall Street before joining Corcoran, where she was named 2010’s Rookie of the Year. She made the jump between firms with her partner, Susan LeFevre.

Avi Voda – from Douglas Elliman Voda Bauer Real Estate (April)

Voda stepped down as an executive vice president at Elliman after 18 years with the company to launch his own firm with co-founder Jason Bauer (who was also a founder of Crumbs Bake Shop). The company was tapped as WeWork’s official residential real estate partner, giving the firm first crack at thousands of potential tenants who may be new to the city and looking for a place to live.

Takeshi “Takk” Yamaguchi – from Town Residential Urban Compass (February)

Yamaguchi was another Town departure amid the company’s internal power struggle. He had exclusively represented more than $100 million worth of listings when he left for Urban Compass, taking on management of the sponsor units at the Corinthian, the white-glove condominium tower at 330 East 38th Street in Murray Hill.

Not everyone in real estate is selling it, but their contributions help move properties nonetheless. Here are two big behind-the-scenes hires that caught attention this year:

Nicole Oge – from Town Residential Douglas Elliman (April/June)

Oge, a former marketing executive for Mercedes-Benz, spent three years at Town before leaving the company in April. In June, she joined Elliman, and Town sued her for violating her non-compete clause, and in August the judge on the case ruled the marketing director could not perform real estate marketing services for Elliman in Manhattan for two years. The judge denied an injunction Town had sought preventing Oge from sharing trade secrets she had gleaned during her time at the company.

46 December 2014 www.TheRealDeal.com

Sofia Song – from StreetEasy Urban Compass (February)

Song, the former head of research and communications for StreetEasy, left the company after more than six years amid significant turnover after its purchase by Zillow. She joined Urban Compass to create consumer- and industry-facing reports in the newly created position of head of research and external affairs.

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The Year Ahead

h c t a w in

o t t a h W

From sky-high prices to REBNY’s executive search, the issues to watch in the year ahead

By E.B. Solomont fter the frenzied sales of 2013, New York City’s real estate market didn’t miss a beat in 2014 — though its pace showed signs of stabilizing, even as prices reached new heights. Despite the overall market’s widely-described return to “normal,” the co-op market saw its record for the priciest residential sale toppled three times: In September, hedge-fund manager Israel Englander paid $71.3 million for a duplex co-op at 740 Park Avenue, on the heels of the $70 million sale of the late Edgar Bronfman’s penthouse at 960 Fifth Avenue to Egyptian billionaire Nassef Sawiris. They were both outdone less than a

50 December 2014 www.TheRealDeal.com

month later, when billionaire Leonard Blavatnik dropped $80 million for the unit at 834 Fifth Avenue owned by New York Jets owner Woody Johnson. It’s no surprise then that there’s more luxury housing coming, as developers race to complete condo towers for the super elite on 57th Street, which has come to be knownas “Billionarie’s Row,” while other developments both in Midtown and Downtown reach for the sky, in both price and height. And there are several mega-developments on the rise, from Hudson Yards to South Street Seaport to Astoria Cove. But what else can the industry expect in 2015? In this last issue of the year, The Real Deal takes a look at key topics and trends that will shape the market in the next.

illustration for the real deal by D.studio

ALL BUILDING REPRESENTATIONS ARE ARTIST RENDERINGS. PROSPECTIVE PURCHASERS SHOULD NOT RELY UPON THESE DEPICTIONS AND ARE ADVISED TO REVIEW THE COMPLETE TERMS OF THE OFFERING PLAN FOR FURTHER DETAIL AS TO TYPE, QUALITY AND QUANTITY OF MATERIALS, APPLIANCES, EQUIPMENT, AND FIXTURES TO BE INCLUDED IN THE UNITS, AMENITY AREAS AND COMMON AREAS OF THE CONDOMINIUM. // THIS ADVERTISEMENT IS NOT AN OFFERING. IT IS A SOLICITATION OF INTEREST IN THE ADVERTISED PROPERTY. NO OFFERING OF THE ADVERTISED UNITS CAN BE MADE AND NO DEPOSITS CAN BE ACCEPTED, OR RESERVATIONS, BINDING OR NON-BINDING, CAN BE MADE UNTIL AN OFFERING PLAN IS FILED WITH THE NEW YORK STATE DEPARTMENT OF LAW. THIS ADVERTISEMENT IS MADE PURSUANT TO COOPERATIVE POLICY STATEMENT NO. 1, ISSUED BY THE NEW YORK STATE DEPARTMENT OF LAW, UNDER REGISTRATION NUMBER (15 HUBERT: CP14-0076, SPONSOR: TRIBECA M CORP., 97-77 QUEENS BOULEVARD, REGO PARK, NY 10013; 200 WATER: CP140061, SPONSOR: 200 WATER PROPERTY OWNER , L.L.C., 60 EAST 42ND STREET, NEW YORK, NY 10017.) // THE COMPLETE OFFERING TERMS ARE IN AN OFFERING PLANS AVAILABLE FROM SPONSOR. 51 JAY: CD14-0159, SPONSOR: 201 WATER STREET LLC, 850 THIRD AVENUE, SUITE 16B, NEW YORK, NY 10022 // 388 BRIDGE STREET: FILE NO. CD13-0272 SPONSOR: 384 BRIDGE STREET, LLC, 277 PARK AVENUE, NEW YORK NY 10172 // 429 KENT AVENUE: FILE NO. CD13-0264 SPONSOR: 421 KENT DEVELOPMENT LLC, 150 EAST 52ND STREET, NEW YORK NY 10022. // 19 PARK PLACE: FILE NO. CD130284 SPONSOR: ABN REALTY LLC, 420 MADISON AVENUE, 8TH FL, NEW YORK, NY 10017 // 498 WEST END AVENUE: FILE NO. CD130041 SPONSOR: 498 WEST END AVENUE LLC, C/O SAMSON MANAGEMENT LLC-97-77 QUEENS BLVD, REGO PARK, NY 11374 // 100 WEST 93RD STREET: FILE NO. CD040247 SPONSOR: LEADER HOUSE ASSOCIATES, L.P., 70 EAST 55TH STREET, 7TH FLOOR, NEW YORK, NY 10022 // 540 WEST 49TH STREET: FILE NO. CD130077 SPONSOR: FPG CLINTON ACQUISITION, LLC, 45 MAIN STREET, SUITE 800, BROOKLYN, NY 11201 // 23 WEST 116TH STREET: FILE NO. CD130101 SPONSOR: WEST 116 OWNERS LLC, 1865 PALMER AVENUE, STE. #203, LARCHMONT, NY 10538 // 21 WEST WATER STREET: FILE NO. CD140057 SPONSOR: WATER STREET DEVELOPMENT AT SAG HARBOR LLC, 275 SEVENTH AVENUE, 9TH FLOOR, NEW YORK, NY 10001 // APERTURE 538: FILE NO. CD140110 SPONSOR: 538 WASHINGTON HOLDINGS LLC, 44 WALL STREET, NEW YORK, NY 10005. EQUAL HOUSING OPPORTUNITY. // ALL INFORMATION IS FROM SOURCES DEEMED RELIABLE BUT IS SUBJECT TO ERRORS, OMISSIONS, CHANGES IN PRICE, PRIOR SALE OR WITHDRAWAL WITHOUT NOTICE. NO REPRESENTATION IS MADE AS TO THE ACCURACY OF ANY DESCRIPTION. ALL RIGHTS TO CONTENT, PHOTOGRAPHS AND GRAPHICS RESERVED TO HALSTEAD PROPERTY DEVELOPMENT MARKETING (HPDM).

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With over 40 projects representing 2,250 units, Halstead Property Development Marketing ranked second among top new development marketing firms, according to The Real Deal

The Year Ahead

Year of the premiere With construction underway citywide, and particularly in neighborhoods like Downtown and the 57th Street corridor, 2015 is poised to see double the amount of new development launches, compared with 2014. There are 6,287 condos set to launch in 2015, compared with 3,112 in 2014, according to data obtained from Corcoran Sunshine. Because of the high cost of land and rising construction prices, the luxury sector is poised to see the lion’s share of the attention, though demand for one- and two-bedroom units is higher than ever. “The next step is trying to navigate and deliver something that’s not super luxury,” said Jonathan Miller, president of real estate appraisal firm Miller Samuel. “I think you’ll see more expansion into the lower-upper [end of the market] than what we’ve seen. The demand is extremely high, it’s just hard for the product to be created because of the cost of development.” In recent months, concerns about a potential glut of inventory at the top of the market have gained more followers. But not everyone agrees. “I still feel very bullish on the market,” said Susan De França, president and CEO of Douglas Elliman New Development Marketing. Through its partnership with London-based Knight Frank, she said Elliman has its finger on the pulse of the international market. “We still see a real, real strong, deep-rooted demand internationally to purchase in New York City.”

Soo Chan’s 515 West 29th Street is one of the boutique condos opening in 2015.

Susan De França, CEO of Douglas Elliman New Development Marketing.

Boutique boom

buck —such as 15 Leonard. There, four-bedroom units measuring 2,621 square feet went into contract for prices ranging from $6.5 million to $7 million, according to Wendy Maitland, director of sales at Town Residential, which marketed the property. The Karl Fischer-designed condos at 432 West 52nd Street also have efficient units, including a 436-squarefoot studio for $610,000, or $1,399 per square foot; a 640-square-foot one-bedroom for $995,000, or $1,554 per square foot; and a 1,189-square-foot two-bedroom for $1.6 million, or $1,345 per square foot. “It’s important that you have a myriad of product in New York, because there are a myriad of people,” said Elizabeth Ann Stribling-Kivlan, president of luxury brokerage Stribling & Associates. To be sure, the new development market is still seeing larger residences than are typically available in the resale market. During the third quarter, the average size of a resale unit was 2,675 square feet, compared with an average size of 4,364 square feet among new developments. “Everything is cyclical. Three to five years ago, there was a dearth of grand-proportioned product,” said Maitland. “Now that the market is being much better served, there’s a tremendous opportunity in building more efficiently.” And then there are bespoke residences. At Bruce Eichner’s and Continuum Company’s 45 East 22nd Street, for instance, would-be buyers of the 83 condo units can choose from three wood finishes for the kitchen flooring and cabinetry. “Choice in the past has been a complete no-no,” said Leonard Steinberg, president of tech-focused brokerage Urban Compass. “People like the idea of having their own personal choices.” Others see the market leaning toward “beautiful structures with really functional layouts,” said Stephen Kliegerman, president of Halstead Property Development Marketing. “I see a more competitive market in the $10 million and up” category, said Town’s Maitland. “There’s going to be a lot of attention paid to the architecture and design and the quality, more than ever.”

“Right now, we’re at a point in pricing where it’s going to level off. New development condo prices have risen 60 percent in the last two years. You can’t sustain those kind of price increases without leveling off.”

Condo developers are bringing a crop of boutique buildings to the market, each crafted with a level of attention and care aimed at drawing discerning buyers. The trend has already started to take hold. In November, for example, Rome-based Sorgente Group’s 60 White Street launched in Tribeca with eight units, including a 3,078-squarefoot penthouse that’s asking $9.265 million. And in September, architecture and development firm Flank launched sales at the six-unit 224 Mulberry Street, selling two condos for upwards of $3,330 per square foot within weeks. A 3,167-square-foot condo asking $10.75 million and a 3,392-square-foot condo asking $11.25 million were put under contract in mid-November. Then there’s developer Edward Minskoff ’s conversion at 37 East 12 Street in Greenwich Village, which launched in November, where the six units are priced from $9 million to $32 million. According to Corcoran Sunshine Marketing Group, 91 properties were set to hit the Manhattan market in 2014, with an average of 37 units each. That compares with 18 properties launched in 2010, with an average of 84 units per property. In 2015, several more boutique buildings are set to launch, including Bauhouse Group’s 12-unit building at 515 West 29th Street designed by Soo Chan and an eight-unit building at 559 West 23rd Street that’s being developed by NY8 Properties LLC. “I think the new luxury is boutique buildings,” said Douglas Elliman’s Frances Katzen, the exclusive broker for 60 White Street. Even as smaller buildings proliferate, some developers are coming up with more “efficient” luxury condos — meaning tight-cut units that offer more bang for the 52 December 2014 www.TheRealDeal.com

Diane Ramirez, Halstead Property Edward Minskoff’s conversion of 37 East 12th Street in Greenwich Village is another example of the boutique condo trend.

Price pop?

Elizabeth Ann Stribling-Kivlan, president of Stribling & Associates.

The average sale price in Manhattan for all kinds of residential properties jumped 18 percent from last year during the third quarter, to $1.68 million. Price appreciation in the luxury market was even steeper: The average sale price in the that segment increased 34 percent, to $7.25 million during the third quarter, according to data from Miller Samuel. Whether price appreciation will continue at the same clip is a source of debate. Diane Ramirez, president of Halstead Property, said at a recent REBNY luncheon that the 18 percent increase was “hard for buyers to absorb. “Right now, we’re at a point in pricing where it’s going to level off,” she said. “New development condo prices have risen 60 percent in the last two years. You can’t sustain those kind of price increases without leveling off.” Beyond sticker shock, others noted that increased inventory levels have prompted the market to stabilize. “Now that developers, as well as brokers and customers alike, see there’s more in the pipeline, I believe there’s

The Year Ahead less of a fervor of price appreciation,” said Elliman’s De França. During the third quarter, the listing inventory in Manhattan jumped 27.6 percent year over year to 5,828, according to Miller Samuel. Meanwhile, the number of sales dropped 13.3 percent to 3,328. Miller said he thinks prices will continue to rise — a function of fewer sales than the frenzy of 2013 and stilllow inventory levels. “We’re going to see some continued rise in inventory, but still far short of equilibrium,” he said. “There’s just been very little new product to date that has been outside of the high-end market.” Maitland said she expects prices in the luxury market to continue their upward trajectory, because “there’s a larger demographic of buyers who are looking in that range and spending in that range than ever before.” (The “luxury” market is generally defined as the top 10 percent of the market in terms of price.) Kathy Braddock, managing director of brokerage William Raveis NYC, noted that buyers from Russia, China and Brazil are still looking to move their money out of those countries. Among those buyers, there’s a continued appetite for trophy apartments. “There’s an underlying reason why these trophy apartments will sell,” she said. Investors “are trying to diversify their assets because of the global picture.”

Developer Edward Minskoff

Halstead’s Diane Ramirez

Affordable housing

Condo buyers will have more choices on finishes for flooring and cabinetry at some new projects, including Bruce Eichner’s and Continuum Company’s 45 East 22nd.

Interest rate increase Interest rates are still at record lows, but it’s widely believed a rate increase is coming in 2015. And while Federal Reserve Chairwoman Janet Yellen hasn’t indicated when, economists point to sometime in midJune. That prediction means the next six months are likely to be busy. “People are doing deals now as opposed to six months from now, because there’s more certainty,” said Jay Neveloff, a partner at the law firm Kramer Levin Naftalis & Frankel. “No one has a crystal ball,” he said, but everyone realizes rates are at record lows. Among residential buyers, De França said an interest rate change would mainly impact first-time buyers, rather than the luxury market. That’s because in New York City, many luxury sales are all-cash, or a significant amount of cash. Many of those all-cash sales involve foreign investors, who are expected to continue parking their money in New York real estate. “The financial-crisis hangover is still with us,” said Miller. “Investors are wary of financial market investing. They’ve shifted to hard assets.” He said investors snapping up New York City real estate aren’t necessarily looking to make money. “The primary goal is safety, capital preservation. We’re building the world’s most expensive bank safety deposit box. That’s what some of these buildings will end up being.” Another group that would likely be hard-hit by rate hikes are developers themselves. “It’s going to scare some [developers] away, because of the amount of equity that needs to go into these deals,” said Richard Wood, president and CEO of Plaza Construction. He said higher interest rates would prompt developers to set tighter schedules for contractors, in order to maintain profitability. “Developers or investors are now going to have a lot more risk of losing their investment, because a higher interest rate could suck

trips the market — maybe interest rates — developers will be holding the bag on a huge equity slug that could end up being lost, or they will have to try to wait it out.”

Mayor Bill de Blasio took office in 2014 promising to address New York City’s lack of affordable housing. While details are still sketchy, 2015 could see some of the administration’s proposals implemented, in an attempt to move toward its stated goal of creating or preserving 200,000 affordable units in the next decade. The mayor has had a few victories so far, including an agreement with Two Trees Development to increase the number of affordable units at the Domino Sugar factory site in Brooklyn, to 700 out of 2,300 units overall. In November, the city claimed another victory related to the 1,700-unit Astoria Cove project after reaching a deal with developer Alma Realty to make 27 percent of the units affordable. To date, the mayor’s office has floated several concepts to ramp up the affordable housing agenda, including new mandatory inclusionary policies in new development and a possible expansion of the existing mansion tax, a 1 percent tax on sales over $1 million that generated $259 million in fiscal 2013. If 0.5 percent was added to transactions over $5 million, the tax would generate another $34 million in 2015 that could be directed to affordable housing. Air rights may be in play to boost affordable housing, as well, after the Economic Development Corporation issued a request for proposals that offers free development rights on three city-owned lots in Long Island City, in exchange for permanently affordable housing. “I think the city will continue to use every opportunity to support and expand affordable housing,” Neveloff said. “The mayor has made it clear it’s a priority in his administration [and] in their dealings, they are making that clear to the market.” Developers are factoring it in, he said. “It’s the new reality.” Winston Fisher, a principal at Fisher Brothers, said that like every other operator and developer, his family’s company is watching to see what affordable housing policies take root. “You want affordable housing, and you want something that’s thoughtful and reasonable that doesn’t stifle growth, doesn’t stifle the market. The ripple effect can be profound.”

“If something trips the market — maybe interest rates — developers will be holding the bag on a huge equity slug that could end up being lost, or they will have to try to wait it out.”

54 December 2014 www.TheRealDeal.com

Richard Wood, Plaza Construction

Plaza Construction’s Richard Wood

Federal Reserve Chariwoman Janet Yellen

the profitability out of a job if it’s not kept on schedule.” While rising interest rates won’t impact the super high-end buyers or foreign investment, they are likely to slow mid-range condo sales, Wood said. “If something

Will it be Queens’ turn?

As developers pushed farther into Brooklyn over the past decade, Queens has similarly seen some development in Long Island City and Astoria. But large swaths of the borough remain untapped. At least until now. Some in the industry think Queens will grab the spotlight in 2015. Even white-glove Manhattan brokerage firms are taking note. “There’s only so far you can go into Brooklyn. I think Queens is next,” said Stribling-Kivlan of Stribling & Associates. “You want the best Chinese food in New York? Get out to Flushing. There are some really cool neighborhoods, not just Long Island City and Astoria.” Increasingly, Kivlan said, she has buyers asking for Queens. “Queens is an incredibly established borough, but I think we’re going to start seeing some new stuff come out there,” she said, particularly since the commute to Midtown from some areas is just 15 minutes. “Queens reminds me of Manhattan 25 or 30 years ago, where you

The Year Ahead Winston Fisher of Fisher Brothers

Jay Neveloff, a partner at Kramer Levin Naftalis & Frankel.

Astoria Cove is one of the developments where Mayor Bill de Blasio has marked a victory in his efforts to expand affordable housing in NYC.

see an incredible amount of diversity and you get a lot of space out there,” she said. To be sure, Queens’ development historically has been a step behind Brooklyn. “It’s always been ‘Queens next,’” said Fisher, who noted the waterfront has seen a huge amount of development. “Is there organized development that can occur inland from that?” he pondered. “Good question.” Braddock, meanwhile, described a “seismic shift” in where buyers are searching for homes. “Their first choice is not the island of Manhattan.” She said by shifting to the outer boroughs, average New Yorkers are able to find more affordable housing. In fact, high prices in Manhattan are already spurring more rental developments in the “outer outer boroughs,” according to a report from marketing firm Nancy Packes Inc. For example, Brooklyn has roughly 21,500 rental units in the development pipeline, including 13,025 units in neighborhoods outside the “core” areas of Brooklyn Heights, Downtown Brooklyn, Williamsburg and Dumbo. In Queens, there are 11,980 units in the pipeline in “core” neighborhoods, which include Hunters Point, Long Island City and Astoria, plus another 3,281 units in the pipeline in other communities in the borough.

“You want affordable housing, and you want something that’s thoughtful and reasonable that doesn’t stifle growth, doesn’t stifle the market. The ripple effect can be profound.” Winston Fisher, Fisher Brothers

Brokerage scene Following a year that saw top brokers Leonard Steinberg and Kyle Blackmon join startup firm Urban Compass (see related story, page 44), 2015 is poised to see even more fallout among firms as new companies join the fray. In 2014, industry veterans Braddock and Paul Purcell launched a New York City office for Connecticut-based brokerage William Raveis. “The landscape looks different,” Braddock said. “I think that companies like ours and all the others are making the brokers in more of the established firms look at themselves and say, ‘Gee, could I be doing my business differently?’” According to Braddock, buyers check StreetEasy before logging onto any of the firms’ websites. “The biggest mousetrap is StreetEasy. You can be your own broker today, and have the same power, to some extent, that a Corcoran or Douglas Elliman has.” Consolidation among brokerage houses also has changed the landscape, she noted. Publicly-traded Realogy owns Corcoran Group, Citi Habitats and Sotheby’s International, while Vector Group owns Douglas Elliman, and Terra Holdings is the parent company of Brown Harris Stevens and Halstead Property. At public companies, Braddock noted, “You have to make a profit. People expect to see certain things. As a private company, you have more flexibility.” Julia Hoagland, an agent who joined Urban Compass from Brown Harris Stevens in November, said her decision was shaped by a desire to help build a new kind of brokerage. 56 December 2014 www.TheRealDeal.com

The Domino Sugar site was an early win on affordable housing for de Blasio.

“I really believe in the vision that Urban Compass has, and that they’re going to change the way New York City real estate works by leveraging technology,” she said.

Rob Speyer leads the REBNY search team.

REBNY’s executive search Although Steven Spinola, president of the Real Estate Board of New York, doesn’t plan to step down until the end of 2015, the search is on for his successor, who will be named in the next few months. Spinola’s intention to retire from REBNY’s top post, a job he’s held since 1986, was first disclosed in June. A search committee led by REBNY Chairman Rob Speyer is leading the charge to find a replacement — no small feat considering Spinola’s name has been synonymous with REBNY’s for nearly three decades. The real estate industry is also facing a particularly uncertain political climate, given that the de Blasio administration is perceived by some as less business- and developer-friendly than the Bloomberg administration was. The trade group is one of the state’s biggest lobbying groups and Spinola’s successor is likely to be someone skilled at working with city officials and simultaneously representing the interests of the real estate sector.

REBNY’s Steven Spinola will retire in 2015.

This fall, several names were floated as potential candidates for the post, including John Banks, vice president of government relations at Consolidated Edison, who is reportedly the front-runner for the job. “We will make an announcement when the search process has concluded,” REBNY spokesman Jamie McShane said in a statement. Other contenders are Jim Whelan, senior vice president of public affairs at REBNY who has helped lead REBNY’s lobbying efforts for the past four years, and Ramon Martinez, deputy chief of staff for Melissa Mark-Viverito, City Council speaker. TRD

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11/25/14 4:08 PM

Retail

Ranking Manhattan’s biggest retail buyers As the busiest shopping season unfolds, a look at who’s acquired the most retail space

seeing more space available as they analyze the neighborhood.

By Adam Pincus

ith Upper Fifth Avenue snatching back from Hong Kong’s Causeway Bay the title as the world’s most expensive retail district, aggressive

“Soho has more availabilities than I have ever seen in the past,” said retail broker Patrick Breslin, an executive managing director at Colliers International.

bets made in Manhattan by local investors seem to be on solid ground.

These changes could be natural fluctuations in the market, or could spell trouble for

Yet a closer look at leasing numbers and conversations with brokers

owners, who need to pencil in the most optimistic revenue figures when calculating their

indicate there is a plateau at the very high end of the market in Manhattan.

offering prices.

“We are seeing a little more vacancy in the market. For those of us close to it ev-

Nevertheless, owners who are aggressive in finding tenants can make “outsized re-

ery day, we are not seeing asking rents increase any more, and we are seeing the

turns” from the right retail projects, Marc Holliday, CEO of SL Green Realty, said on the

delta between asking and taking rents decrease,” said Chase Welles, executive vice

firm’s most recent earnings call. Despite the fact that “there is nothing reasonable” in

president at SCG Retail, a store leasing brokerage. He represents major tenants

terms of today’s purchase prices, Holliday told investors that “pound for pound,” prime

like Whole Foods.

retail properties are potentially more lucrative than office buildings.

Cushman & Wakefield reported in its annual global retail survey last month that

To get a sense of who has made the biggest bets on Manhattan’s retail during the

Upper Fifth Avenue rents had jumped by more than 13 percent in the past year to

frothy pricing rise of the last three years, The Real Deal reviewed hundreds of deals in-

a record $3,500 per foot, surpassing Causeway Bay, which had been the most ex-

volving street-level retail of $10 million or more in the databases of CoStar Group and

pensive district for the past two years. But other surveys have shown a flattening.

Real Capital Analytics from January 2012 through last month.

The Real Estate Board of New York reported in late October that asking rents

The review found that the most active buyers in that period, including Crown Ac-

on Upper Fifth Avenue and the core of Times Square had declined slightly since its

quisitions, Vornado Realty Trust and Jeff Sutton, acquired just under 100 properties

previous report in May, by 4 percent. That follows a five-year stretch in which asking

valued at a total of more than $9 billion.

rents more than doubled in both of those areas.

The results underscore the continued concentration of retail ownership within a

Other areas are seeing greater availabilities. The amount of available space in Soho crept up earlier this year, data from a Cushman report in July showed. And brokers are

Crown Acquisitions ($2.6B) Submarkets

Properties

Total value

Fifth Avenue

530, 645, 647, 651-653, 697 Fifth Avenue, 2 East 55th Street

$1.589B

Madison Avenue

650 Madison Avenue

$517.6M

34th Street

150 West 34th Street $252M

Others

450 Park Avenue, 120 Prince Street

$237.9M

Source: The Real Deal analysis of data from CoStar Group, Real Capital Analytics and other sources. Covers Jan. 2012 to Nov. 2014.

he firm, led by Stanley Chera and his sons Haim, Isaac and Richard, has moved firmly into the upper reaches of institutional finance, including relocating its offices to one of the premier addresses of the city, the General Motors Building, from a modest space across from the Empire State Building. In the last three years, the firm partnered with the publicly traded real estate investment trust Vornado Realty Trust, Barry Sternlicht’s private investment firm Starwood Capital and the Canadian pension fund Oxford Property Group to snap up retail assets worth approximately $2.6 billion. (Several of the acquisitions Stanley Chera of Crown Acquisitions were for mixed-use properties, and in those instances TRD pro-rated the estimated value of the retail portion.) Most of the properties it nabbed stakes in are around Upper Fifth Avenue and East 57th Street. The priciest was the store space at the base of the St. Regis, a luxury hotel at 55th Street and Fifth Avenue, where Crown partnered with Vornado to pay $700 million. Farther south down the street, it bought a portion of the retail in the Olympic Tower at 645 through 653 Fifth Avenue. A block east and a few blocks uptown, it partnered with Vornado and others to buy the office and retail building 650 Madison Avenue

58 December 2014 www.TheRealDeal.com

handful of companies, both public and private. It also shows the frequent partnering among the borough’s most powerful owners.

between 60th and 61st streets, along with 450 Park Avenue at 57th Street. The company’s moves indicate it is focusing on the city’s prime retail corridors, although the purchase of 450 Park Avenue represents a bet that higher-priced retail will move farther east along 57th Street, drawn by the super-luxury towers rising there, including Macklowe Properties and CIM Group’s 432 Park Avenue. At the same time, Crown stepped back from smaller deals in Manhattan, with no acquisitions in emerging neighborhoods. Overall, it has made fewer, but larger, investments in the last few years than its dealmaking rivals such as Ashkenazy Acquisition, Thor Equities and Jeff Sutton’s Wharton Properties.

Vornado Realty Trust ($2.57B) Submarkets

Properties

Total value

Fifth Avenue

608, 655, 666 and 687 Fifth Avenue and 22 East 55th Street

$1.719B

Madison Avenue

650 Madison Avenue

$517.6M

Times Square

1535 Broadway

$213.2M

Others

715 Lexington Avenue, 966 Third Avenue, 501 Broadway and 304306 Canal Street

$122.9M

Source: The Real Deal analysis of data from CoStar Group, Real Capital Analytics and other sources. Covers Jan. 2012 to Nov. 2014.

ornado, the large REIT led by CEO Steven Roth, acquired retail properties valued at $2.57 billion over the last three years. The company focused on expanding its holdings along Fifth Avenue, where it was already a major landlord. To start, it paid $707 million in December 2012 for the retail at 666 Fifth Avenue, and later laid out another $1 billion for the St. Regis, 655 Fifth Avenue and 608 Fifth Avenue. Roth sought to buy those properties, despite awareness that there is competition on the street.

Steven Roth, CEO of Vornado Reality Trust

“We compete with everybody … tenants almost always have multiple choices,” Roth said on the firm’s most recent earnings call. “So generally, there’s two or three spots on the street that are available, and so we enjoy competition all the time, but there’s enough for everybody.” Insiders suspect that because it is a public company, Vornado is a bit more risk-averse than a private firm like Thor. However, the REIT has made a couple of moves that are more daring. “No one is buying an asset to remain flat,” SCG Retail’s Welles said. He noted that firms are waiting for a vacancy or creating a vacancy. “They are not doing this to park money and get a 5 percent return.” For instance, Vornado purchased two small vacant properties on Canal Street, including last month’s $16.4 million buy of the Pearl Paint building at 334 Canal Street, which it will redevelop, according to the REIT’s quarterly filings. Some in the industry expect the gritty stretch of Canal to pop in the next few years. “It used to be that the bottom of Broome [Street] marked the southernmost boundary but that pushed to Canal,” Jason Pruger, an executive managing director for retail leasing at Newmark Grubb Knight Frank, said, referring to the southern extension of Soho. He has been active on Canal Street, including last year representing the owner of the Sheraton Tribeca New York Hotel at 370 Canal Street in a lease with Planet Fitness on the lower level. “Buyers realize that over time Canal will increase in value,” Pruger said. More typical investments for Vornado, though, are in tourist-heavy areas like 34th Street, Times Square and Fifth Avenue. The largest available retail Vornado is marketing is at www.TheRealDeal.com December 2014 59

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Retail the base of Marriott Marquis, at 1535 Broadway in Times Square, where the firm is constructing a major retail location with 45,000 square feet available. The firm purchased the site in July 2012 for $213 million. “We expect to have very high single-digit returns on our capital investment in this asset, which means we expect to make a fair amount of money,” Roth said on the company’s latest earnings call.

ICSC unites at Javits

Mall giants Westfield, GGP, rejoin retail show after hiatus

he second-most important show for New York’s retail dealmakers is moving from a disjointed layout spread among several hotels in Midtown to a single location at the giant Jacob K. Javits Convention Center on the West Side.

The International Council of Shopping Centers is relocating the New York National Conference show, held in prior years

at the New York Hilton Midtown and the Sheraton New York Times Square Hotel. The new location is expected to make the show, set for Dec. 8 and 9, more closely resemble the world’s largest retail

Wharton Properties ($1.88B)

conference, RECon, held each May in Las Vegas. Concentrating the show in a single location is expected to be

Submarkets

Properties

Total value

more conducive to dealmaking among brokers and exchanging

Fifth Avenue

509, 650, 717 and 724 Fifth Avenue

$956M

information. Talk on the show floor is likely whether the market

529, 530-536 and 560 Broadway, 121 and 136 Greene Street

$527M

34th Street

21-25 and 27-29 West 34th Street

$185M

Others

1565 Broadway, 747 Madison Avenue, 21 East 62nd Street

$207.5M

Soho

is headed for a correction and what is in store for broker moves.

eff Sutton, through his privately held Wharton Properties, acquired a stake in 14 properties with a total value of $1.88 billion since 2012. Several of those deals were done in partnership with other players on this list, including Sitt, Aurora Capital Associates and SL Green Realty. The partnering shows the close relationship the owners have with each other, even as they vie for deals and seek out capital to “take them down,” and bringing in a rival is one way to do that. Sutton typically purchases properties with a tenant in mind. The only store on the list of his acquisitions that is both vacant and without a lease is 650 Fifth Avenue, where he and partner SL Green bought out Juicy Couture for what city records show was $52.4 million, and has a lease being finalized with an unidentified tenant. A source close to the deal said terminating the Juicy lease, “was super accretive,” using industry jargon to say it will increase the value of the deal. Sutton has invested in a wider range of properties than Vornado and Crown. He has purchased or expanded his stakes in five properties in Soho for a total value of at least $527 million, including 529, 530 and 560 Broadway and 121 Greene Street, and has contracts out to buy two more, at 101 Wooster Street and 130 Greene Street. Sutton partnered with SL Green Realty Corp. on the 121 Greene Street deal. He also acquired 136 Greene Street with an unidentified partner in July. Several of his deals were buying out a portion or all of SL Green’s stake, including at 717 Fifth AveJeff Sutton, head of Wharton Properties nue for $618 million. Finally, he is a partner on a major deal to demolish, then rebuild, 529 Broadway within the landmarked district in Soho. That two-story building, acquired for $146.9 million, is now partially vacant, but the owners, which include Sitt, Aurora Capital Associates and the Adjmi family, are working on plans to demolish it and replace it with a 44,000-square-foot building that will be leased to a major athletic tenant, according to sources familiar with the matter. While Sutton typically does not do ground-up construction, Adjmi and Aurora have long track records building new spaces. 60 December 2014 www.TheRealDeal.com

that had previously taken space in Midtown hotels away from the official ICSC locations — Westfield and General Growth Proper-

Source: The Real Deal analysis of data from CoStar Group, Real Capital Analytics and other sources. Covers Jan. 2012 to Nov. 2014.

In addition, for the first time in years, two of the mall giants

ties — will be exhibiting at the show. A Westfield representative said because of “space considerations” the mall company had taken space at the London Hotel last year. “Our team of 40 attending the conference looks forward to sharing our newest initiatives,” the company said in a statement.

The ICSC conference is moving to the Javits Center this month.

“The big change, and it is directly related to going to Javits, is having all the exhibitors in one place and under one roof,” said David Firestein, a partner at SCG Retail. “When we were at the Hilton, many people never made it over to the Sheraton.” Some see the Javits’ somewhat remote location as a plus. “In some ways, it will force people to stay the whole day,” said Joanne Podell, a vice chairman at Cushman & Wakefield. Attendance at the show is expected to rise substantially this year, ICSC said in a statement, in contrast to RECon. There attendance has remained nearly flat in recent years, rising less than 3 percent to 33,500 in 2014 from 32,600 in 2012. Here in New York City, attendance is expected to jump by about 12 percent, to an estimated 8,500 this month, from 7,600 last year. That growth could be part of a larger trend, said Chase Welles, an executive vice president at SCG Retail. “The regional shows, as opposed to the national show, are getting more important.” Some see the move as even broader. “The New York City show is growing as it becomes more global, getting brokers, tenants and developers with projects from all over the world,” Robin Abrams, an executive vice president at Lansco, said. Of course the city itself attracts investors, with its generally rising rents and stable tourism base. “New York is the go-to city of choice for foreign investment — both individual and institutional — which continues to have a positive ripple effect on the larger market as a whole. It represents stability,” said Ike Chehebar, CEO of the retail-focused investment firm the Jackson Group. The move to the larger venue will have an impact, by itself. “I think it will change the feel of the show a little bit,” Welles said. “People can’t wander in and take meetings at an Irish pub.” But the talk on the floor and at the after-show parties is expected to revolve around whether rents have hit a peak, and about brokers moving and firms consolidating. For instance, Massey Knakal Realty Services is on the market for a full or partial sale, and sources said RKF was quietly being shopped, although the firm denied it last month. “It is the talk. Companies are looking [to buy firms] and brokers are all talking about it,” Patrick Breslin, an executive managing director at Colliers International, said. But changes are afloat with individuals as well. “There are a lot of shifts and change [among] individual brokers too. It is an interesting time in the brokerage business.” By Adam Pincus

Thor Equities ($1.47B) Submarkets

Properties

Total value

Fifth Ave.

164, 520 and 530 Fifth Avenue

$750M

Madison Ave.

680, 1006 and 1122 Madison Avenue

$302.7M

Soho

529 and 560 Broadway, 151 Wooster Street, 57-63 and 138 Greene Street and 25-27, 115 and 155 Mercer Street

$271.6M

Others

725 Eighth Avenue, 88 Greenwich Street, 70 Eighth Avenue and 38 Park Row

$144.4

Source: The Real Deal analysis of data from CoStar Group, Real Capital Analytics and other sources. Covers Jan. 2012 to Nov. 2014.

hor Equities, led by CEO Joseph Sitt, topped the list as the most active buyer of Manhattan retail real estate over the past three years, snapping up stakes in at least 20 properties worth at least $1.47 billion. While that was not the most

money spent, it was the most individual assets. Like many on this list, Thor funded a good portion of its acquisitions using outside investor money. Thor has two funds worth more than $1 billion and this year it also partnered for the first time with the publicly traded General Growth Partners to buy on Fifth Avenue. That firm, mainly known for operating malls, is led by Vornado alumnus Sandeep Mathrani. All told, Thor’s recent purchases total several hundred thousand square feet, and about a quarter of that, The Real Deal estimates, is vacant or available for lease. That leaves it with far more available retail space than any other company on this list. Thor also has the most high-profile vacancies among the city’s top investors, insiders said. Some of the most visible are on a several-block stretch of lower Fifth Avenue south of 49th Street. While that section of Fifth isn’t yet commanding the record-shattering prices seen north of that dividing line in recent years, asking rents there have surged above $1,000 per square foot, figures from the Real Estate Board of New York show. Among the vacant spaces Thor owns is 520 Fifth AveContinued on page 128

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Neighborhood Dive

Lowdown ON ThE Lower East Side With a new development selling at $4,000 a square foot, the area has come a long way from pushcarts

By Kerry Murtha t’s not your Nana’s Lower East Side. From tenements to trendy glass buildings, investment has transformed the once old-world neighborhood into a downtown hotspot for 20- and 30-somethings. The clash between old and new is visible on nearly every street. Prewar walkups (some renovated) now rub elbows with luxury condominiums, sleek modern rentals and boutique hotels. Quaint pickle stores reside next to hip restaurants like Dirty French and Schapiro’s, which serves traditional Jewish cuisine with an Asian

twist. Art galleries offer up culture that is equal parts surprise and shock. No surprise that upscale changes translate into rising prices. The newest high-end condos are fetching $1 million to start, and average residential rents here have increased more over the past year than in any other neighborhood in Manhattan, according to MNS Real Estate. Meanwhile, retail rents have shifted north up to $150 per square foot as cheeky businesses and stylish cafés chase the day crowd. The Lower East Side stretches east from the Bowery to the East River Park. It is bordered on the north by Houston Street and the south by Canal Street and East Broadway.

Top 5 Developments

179 Ludlow Street

The last remaining community synagogue on the Lower East Side, at 415 East 6th Street, will soon sport three floors of luxury condominiums above it. East River Partners is building the addition on top of the 100-year-old Anshei Meseritz Congregation. The greatest selling point? “Buyers will be close to God,” quips East River Partners co-founder Jody Kriss. Stribling and Associates is handling the sales. When complete, 50 Clinton Street will have 37 high-end condo units that will range from one- to three-bedrooms, and start at $1 million. DHA Capital LLC purchased the property for $28 million in October. The Eklund Gomes Team at Douglas Elliman will be leading sales. 215 Chrystie Street — being developed by Ian Schrager and the Witkoff Group — is setting pricing records at $4,000 per square foot. The 25-unit building, designed by architecture

Ian Schrager Jody Kriss

Retail Scene

148 Madison Street

Restaurants dominate area retail. The vacancy rate is 5%; rents range from $80 to $150 a foot.

Price Trends

Demographics

$3,479

Population: 99,844 people, up 12.3% from 2010 and down 0.8% from 2000. Median Income: $48,374, up around 3% from 2010. Percentage of white-collar workers: 63.2% Percentage of blue-collar workers: 36.8% Median age: 36.1

Average rent in the neighborhood.

4.1%

Average rent increase last year, the biggest hike in any Manhattan neighborhood.

$940,000

Most expensive recent sales: 18 Orchard Street, #5: 2,306-square-foot condo, $3.9 million 40 Delancy Street, #9B: 1,000 square foot condo, $1.65 million 71 Ludlow Street: 1,648-square-foot space, $1.2 million 18 Orchard Street

Least expensive recent sales: 165 Henry Street, #302: 565-square feet, $315,000. 148 Madison Street, #7F: 520 square feet,$400,000 148 Madison Street, #6A: 485-square feet, $423,000 215 Chrystie Street

On the Market 215 Chrystie Street, PH 3: 4,236-square-foot penthouse, 4 beds, 4 baths at $18.75 million.

Essex Crossing

Median sales price, up from $900,000 a year ago.

A Commercial Broker’s Take “The most worrisome trend for the retail market right now is the slow and unreliant foot traffic during the week, which is putting pressure on property leasing values.” Louis Puopolo, Douglas Elliman

A Residential Broker’s Take

62 December 2014 www.TheRealDeal.com

firm Beyer Blinder Belle, touts sprawling penthouses of more than 4,700 square feet on the top three floors. Work has resumed at 179 Ludlow Street, which ran aground after its kick off in 2006. After changing hands several times, developer Michael Goldberg now plans to complete the project this year. The property will have 1,650 square feet of commercial space on the ground floor, and six stories of floor-through units at a cost of $1.6 to $2.4 million each. Sales will be headed by Douglas Elliman. A new residential building of seven stories and 36 units is planned for 155 Attorney Street, the former Plantains Wholesale Beer warehouse. Developed by Midtown Equities, the property sold for $15 million and will have a total of 30,000 square feet of residential space, including a storage room, bicycle room and recreation room.

“From a condo standpoint, the Lower East Side is still affordable and is beginning to attract younger families getting priced out of Tribeca and the Upper East Side.” Andrew Barrocas, MNS Real Estate

Watch For... Essex Crossing, a development comprised of 1.9-million-square-feet of residential, commercial and community space to be built on sites stretching across the Seward Park area along Broome Street between Clinton and Suffolk streets. Mostly vacant since 1967, when construction begins in the spring it will commence one of the largest urban renewal projects in the city’s history. Completion is scheduled for 2023. TRD

Real Estate Tech

Listing sites battle to control national market

In a blockbuster deal, Zillow announced it would pay $3.5 billion for Trulia

The fight is on to gain market share with billion dollar acquisitions; a look at the impact on NYC and StreetEasy

By Janna Herron oth veteran real estate companies and wellfunded newcomers are scuffling over listings websites, each aiming for an acquisition that will provide new streams of revenue, as well as access to more comprehensive data. Rupert Murdoch’s News Corp made the latest strategic offensive by acquiring the company Move Inc., owner of Moving.com and Realtor.com, which is backed by the National Association of Realtors. The deal followed CoStar snagging rental listings site Apartments.com in April, and Zillow announcing in July its plan to buy Trulia in a $3.5 billion blockbuster deal that would make it the largest operator of real estate for-sale listings, just a year after buying New York-focused StreetEasy.com for $50 million. In August, Realogy, which owns the brokerages

64 December 2014 www.TheRealDeal.com

Coldwell Banker Real Estate, Sotheby’s International Realty and ERA Real Estate, along with Big Applecentric Citi Habitats and the Corcoran Group, announced that it will launch two listings portals to cut down on its dependence on leads from Zillow, Trulia and Realtor.com. While the listings site battle is mostly unfolding on the national stage, there have been some signs of change in the New York listings market, largely stemming from the acquisition of StreetEasy. The site is capitalizing on its new ownership by targeting a consumer audience, increasing accessibility and developing its mobile functionality. And consequently, Zillow has gained important access to the rental market through its new subsidiary.

The New York effect At the time of its acquisition, StreetEasy.com was drawing

1.2 million unique users each month and had replaced the New York Times, Craigslist and other sites as the goto real estate listing website in the Big Apple. “StreetEasy really cracked the code in New York City,” said Susan Daimler, general manager of StreetEasy and vice president of Zillow New York. “We want to continue to build out our comprehensive database to have more data to give consumers a better idea what it is to rent, buy and sell properties in New York City. One of the main ways we do this is to focus on mobile.” Prior to the acquisition, StreetEasy’s mobile offerings were sparse. Since then, it did away with its insider subscription and now allows free access to drive more traffic and offer more “featured listings.” It has seen page views leap 150 percent in the year since mobile launched, Daimler said. And its mobile platforms —

www.TheRealDeal.com July 2014 53

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Real Estate Tech there are five of them, for different devices — have driven agent contacts up 170 percent this year , she said. “I don’t see buyers using anything other than StreetEasy,” said Brian Morgan, an agent with Citi Habitats. “But most brokers still are getting properties from their proprietary systems, which is fed from the RLS.” As big as the deals are involving Trulia and Zillow, or News Corp. and Move, neither mean much yet for New York’s brokerage community, mostly because those sites have a limited presence in the market. “Anything that has to do with Realtor.com doesn’t affect us, because we use REBNY,” said Karla Saladino, founder and managing partner at Mirador Real Estate and a board member of Nestio, a third-party database that feeds into the RLS, the REBNY-backed platform that feeds most brokers’ databases. “We find national sites don’t account for much traffic.” However, Zillow’s takeover of StreetEasy did seem to cause one marked change in New York’s RLS. During the summer, REBNY announced it will adopt the Internet Data Exchange, or IDX, so potential renters and buyers no longer have to register to access listings through its RLS data platform, a process that brokers said often turned off consumers. Many in the industry believe the move is a direct result of Zillow’s acquisition of StreetEasy, a much more consumer-friendly site, though REBNY said the change was part of its continuing efforts to provide the latest technology. Either way, “REBNY is catching up,” said Saladino.

Rentals: the Holy Grail? The StreetEasy acquisition also allowed Zillow to get a foothold in New York rentals, which house two-thirds of the city’s residents. Daimler emphasized that rentals continue to be a focus as the company works on building its rental audience and improving the quality and quantity of rental listings. For example, there have been instances of smaller brokers falsely listing an exclusive rental as their own, said Andrew Sacks, an agent with Citi Habitats. StreetEasy only accepts exclusive listings. “It’s hard to regulate every listing on there to validate whether it’s an agent-exclusive listing or a fake ad to lure people in,” he said. Some rental brokers don’t necessarily depend on StreetEasy to find potential apartments for their clients, often preferring their own in-house databases fueled by the RLS, but they don’t ignore the site, either, and use it as a backstop. For others, the site is a big rental moneymaker. Saladino said that 40 percent of her brokerage’s deals come through StreetEasy. Her firm represents 20 building owners. This is important for Zillow, which has made strides in the last year in growing its listings of single-family homes for rent nationwide, even though landlords are typically hesitant to spend large amounts of money on marketing, especially in low-vacancy markets like New York, according to Bradley Safalow, founder and CEO of PAA Research, an investment research firm. That hasn’t dissuaded Zillow, yet. In June, it released its Zillow Rent Connect platform, which helps marketers of multi-family properties find renters. The next month, Zillow announced its partnership with RealPage, a property management software provider, to connect multi-family owners with potential residents. It faces a new competitor in the space from the commercial real estate database CoStar, which bought the consumer-facing site Apartments.com in March for $585 million. It hopes to leverage its existing relationships with multi-family owners to make a meaningful play in

66 December 2014 www.TheRealDeal.com

the rental listings market. All have to contend with wellestablished Internet listing services, along with potential new players in the rental space, like News Corp. and Move, for a market that is considerably smaller than the for-sale one. New York is just one piece of that. “It’s a really interesting time. The space is growing, so companies are looking for opportunities within that space,” said Daimler. “Companies are filling in gaps that they don’t have, which is what happened with StreetEasy.”

Advertising fees Nationally, real estate brokers and their companies voiced concerns that advertising fees will increase if the Zillow-Trulia merger goes through, which makes News Corp’s deal and Realogy’s new venture more attractive, because they are backed by the NAR and brokerage firms themselves. Again, locally, the biggest changes come from Zillow’s StreetEasy, which has moved toward advertising and marketing as its source of revenue instead of subscription-based revenue. There are millions of consumers looking to buy a home and millions more in the rental market, Safalow noted. “What I expect to see is a heavy emphasis on grabbing consumer mind share.”

Behemoth vs. behemoth News Corp’s $950 million acquisition of Move — representing a 37-percent premium over the closing price of Move’s stock on Sept. 29, the day before the deal was announced — provides the publisher with more advertising revenue thanks to Moving.com’s and Realtor.com’s access to more than 800 multiple listing sites across the U.S. This will be a boost to New York-based News Corp., which was split off from 21st Century Fox last year. This is not new territory for News Corp, either. The company owns a majority stake in REA Group, which owns and operates the largest real estate and commercial listing sites in Australia, along with other international property advertising websites. That deal puts even more pressure on the $3.5 billion deal between Trulia and Zillow to close. The Federal Trade Commission is reviewing how the merger could affect competition. Trulia and Zillow, which in June lured nearly three-quarters of all unique visitors to its network of real estate sites, which include Yahoo Homes, AOL Real Estate, HGTV’s FrontDoor, HotPads and MSN Real Estate, were basically forced to the altar by shareholders who were sick of the two companies spending exorbitant amounts of money on marketing, Safalow said. But slower growth may be ahead. In fact, despite record revenue in the third quarter, Zillow issued a fourth-quarter revenue forecast last month that fell short of what analysts were expecting. Safalow noted that the volume of new traffic from homebuyers that Zillow and Trulia could attract is minimal because of the pair’s near-dominance in that market. Additionally, Zillow’s available advertising inventory is shrinking, largely due to the deals it has made with large brokerages, such as the featured listings marketing deal made with Douglas Elliman Real Estate in June. Then, there’s the stronger threat from Realtor.com and Moving.com, which may force Zillow, with or without Trulia, to continue its costly marketing spree. “The perception is that Zillow is running over the brokers,” Safalow said. “But at this point, the brokers have negotiated terms with Zillow that are really attractive.” TRD

www.TheRealDeal.com February 2013 45

Is Urban Compass really the future? Latest broker move stirs criticism of startup’s technology and business model

August, brokers were using popular listing databases like StreetEasy, On-Line Residential and Realty MX in lieu of the company’s own search engine. Adam Fleming, who was Urban Compass’ head of engineering until he moved to real estate startup Honest Buildings in June, said that big firms are “graveyards of half-baked technology” products, and most can’t execute on the technology side. Urban Compass’ “thesis,” he said, “is empowering customers and agents to find each other in

By E.B. Solomont rown Harris Stevens’ handle on Twitter, @established1873, signals the weight the brokerage places on its distinguished lineage, and the firm generally manages to keep its white-gloved hands out of industry drama. But when real estate startup Urban Compass poached elite broker Kyle Blackmon last month, BHS president Hall Willkie decided it was time for those gloves to come off. “Kyle has made the decision that the equity proposition offered to him trumps a singular focus on brokerage,” Willkie said in a statement to The Real Deal. He questioned the wisdom of that decision in an internal BHS memo that stated: “The value of Kyle’s or anyone’s equity will be dependent on the success of Urban Compass’ founders implementing their vision of selling their company for substantially more than many industry experts believe is possible.” Willkie’s comments echoed what many in the industry have whispered — or shouted under the cloak of anonymity — for months. Urban Compass, these sources say, is merely an idea, albeit a well-choreographed, Ivy League and McKinsey-branded one. It is not, they say, despite a $360 million valuation, a business.

said a former broker. And as the startup continued its phenomenal fundraising run, the appeal of that equity stake kept rising. Reffkin confirmed to TRD that the firm has offered equity to top brokers. “Every advisory business I know gives equity to the people that help build it,” he said. “A real estate brokerage should do the same. Some of these agents have built their companies with the brand they [help to] create.” The head of a rival brokerage cited the equity as Urban Compass’ main draw.

Kyle Blackmon

Urban Compass’ iPhone app

Robert Reffkin

Technology Urban Compass has maintained since its founding that its competitive advantage is superior technology, both for the consumer and the broker. “Just the way Apple made buying and listening to music significantly different, I think this company can have the same effect on real estate,” Urban Compass president and top-ranked broker Leonard Steinberg told TRD in June. But it’s still unclear to many in the industry, including former employees, what exactly that advantage is. “Urban Compass likes to think that from Day One their technology was really differentiated,” said a former broker who left the company earlier this month. “The reality is their technology … was actually behind and they were piecing it together from scratch.” “It wasn’t a gamechanger by any means,” the agent added. CEO and co-founder Robert Reffkin acknowledged the difficulty Urban Compass has faced in creating believers out of those who hadn’t seen the technology first-hand. “It’s hard,” he said during an interview at the startup’s Union Square headquarters. “How would you explain why the iPhone is better than the Samsung? Your users have to 68 December 2014 www.TheRealDeal.com

Julia Hoagland Hall Willkie

feel it and see it.” While the existence of the technology itself isn’t novel, the intuitiveness of its design is. An agent using the mobile app who wants to send feedback to the firm’s engineers, for example, simply has to shake her mobile phone and a portal will pop up. Also via the app, clients who receive a listing from an agent can click to see a street view of the property, courtesy of Urban Compass’ own mapping technology, which is similar to Google Street View. Saving time is at the crux of Reffkin’s agenda. The average New York City agent spends 89 percent of their time performing administrative tasks, he said, citing the firm’s data. He wants his agents to have more time to spend with clients. Sources said Urban Compass agents purchased up to 15 licenses to Real Plus’s electronic listing exchange. As recently as

the right way and right time.” Fleming, who declined to say why he left Urban Compass, said that the firm had a “pretty nice algorithm” that matches customers with appropriate agents. “Agents receive tremendous support inside Urban Compass that they don’t get anywhere else,” he said.

Poaching Blackmon is the latest in a long line of big names to join the firm since ex-Elliman stalwart Steinberg came over in June. These include Julia Hoagland from BHS, Timothy Rothman and Howard Spiegelman from the Corcoran Group, Eugene Litvak from Citi Habitats, Roy Kim from Extell Development and Jay Glazer from Warburg Realty. (see related story, page 44) Without a concrete advantage early on, Urban Compass offered equity to lure top producers to its ranks. “The only differentiating factor they could offer was equity,”

“Aside from the ones they [Urban Compass] bought — Julia Hoagland, Kyle Blackmon, Leonard Steinberg — they haven’t attracted any top brokers,” the brokerage head said. Another former agent who was among Urban Compass’ first hires said that when she left the firm after 18 months, she walked away from an equity stake. “I didn’t believe it was worth anything at the end of the day,” she said. “The idea was that they were going to be different from other brokerages. Then every time we executed one of the ideas that they had, they realized it didn’t work.” In May, for example, the startup shifted from a neighborhood specialist-driven model to one more in line with a traditional brokerage, and pivoted from rentals to sales, which also put the firm on a mission to recruit top agents. Beyond the commissions that these top agents bring, Urban Compass relies on them Continued on page 122

www.TheRealDeal.com January 2014 35

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New Jersey

Atlantic City’s crap shoot With gambling on the decline, seaside city looks to roll the dice on life after large casinos

By Tom Acitelli tlantic City is looking back to its heyday for a map to the future. But the city’s collective eyes are focused, not on its height as the East Coast’s gambling mecca, but further back, to its historical role as a seaside resort. “Atlantic needs to be put back into Atlantic City’s appeal as [the] city pivots away from reliance on the gaming industry,” stated a report from the summit of elected officials and gambling industry leaders on what to do for the beleaguered city, a gathering convened by New Jersey Gov. Chris Christie last month. It’s notable that none of the four large casinos that closed earlier this year were expected to reopen for gambling as of late November. Brookfield Asset Management had won an auction to buy the Revel, the newest of the city’s once-dozen gaming houses, for a fire sale price of $110 million in early October and had planned to restart operations after a renovation. Those plans collapsed, however, just before Thanksgiving, reportedly because of a dispute over electricity payments. Only one other plan is concrete, though still lacking in details: The conversion of the former Showboat Casino into a satellite campus for Richard Stockton College, a public university about 13 miles northwest of Atlantic City. The other two redevelopments are more speculative — and all come amid a tense backdrop of financial decline and government intervention. In fact, among the proposals that came out of Christie’s summit was one to appoint an emergency fiscal manager (the report suggested giving the position “extraordinary supervisory powers”) for the seaside community, home to roughly 40,000 residents. Another suggestion was a publicprivate partnership to redevelop some of the other casinos, a recommendation that Christie said is designed to “stop the bleeding.” What is clear is that there is no talk of returning Atlantic City to its large-scale gambling prime. Instead, if new gambling is in the city’s future, it would be there through smaller, boutique casinos with fewer slot machines and more table games. Condos, rental apartments and other uses are also being considered for the shuttered casinos — as is demolition of one. It’s a promising sign that talk of such divergent repurposing is even happening, and

74 December 2014 www.TheRealDeal.com

Atlantic City leaders are looking to its heyday as a seaside resort for a path to its future.

the prevailing sentiment could portend big real estate changes along the famed Atlantic City Boardwalk, with reverberations up the coastline to brokers and buyers in New York. “People are finally talking about things that were long-held taboo subjects,” said Curtis Bashaw, co-managing director of development and investment firm Cape Advisors, and a former executive director of the New Jersey Casino Redevelopment Authority. He was also one of the developers of the Chelsea Hotel, a non-casino boutique property that opened on the Boardwalk in 2008. “The gloves are off; there is a real concerted effort about rebuilding the town.”

The house loses

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The Atlantic Club casino closed in January. Below, the Showboat Casino was shuttered in August.

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Atlantic City reached this point of no return due to a sharp decline in gambling revenue. The casinos raked in what turned out to be a record $5.2 billion in 2006, only to see it drop by more than half to a projected $2.5 billion in 2014 — chipped away by competition as a wave of gambling opportunities sprouted up in Delaware, Pennsylvania, New York and Connecticut, as well as online. The decline’s effects hit home in 2014. As of mid-November, four casinos had closed this year: the Revel, the Atlantic Club, Trump Plaza and the Showboat. A fifth, the Trump Taj Mahal, may close by the end of the year due to revenue declines, as well as disputes with labor units. Eight, including the Taj Mahal, remained open as of mid-November. Almost 8,000 casino workers lost their jobs this year as the casinos shut down; if the Taj Mahal closes, it could throw another 3,100 employees out of work. The losses only add to the woes of Atlantic City as a municipality. Total assessed property values have fallen 45 percent since 2008, according to an advisory commission Christie set up. At the same time, the municipal tax rate has jumped 101 percent, making Atlantic City a decidedly unappealing place for property investment — and spurring those calls for an emergency manager. The history of the Sands casino illustrates Atlantic City’s decline as a desirable investment. Once a venue for headline entertainment like Frank Sinatra, Liza Minnelli and Whitney Houston, it closed in 2006. It was sold for $270 million and demolished by its new owner, casino operator Pinnacle Entertainment, which had plans to build a new, $2 billion resort. Instead, Pinnacle let the 20-acre site languish for years, then sold it this past spring to an investment group called Boardwalk Piers — for barely $30 million, or a fraction of the purchase price. As if to put an exclamation point on the city’s decline as a destination, either for slotwww.TheRealDeal.com January 2014 35

New Jersey cranking tourists or real estate investors, United Airlines announced last month it was stopping direct flights to Atlantic City International Airport on Dec. 3.

Bets are off The Revel offers a cautionary tale similar to the Sands, although with a potentially happier ending. The 1,399-room Revel cost $2.4 billion to build on 20 acres at the northern end of the Boardwalk in 2012. It never turned a profit, went bankrupt twice, then shut down and was sold at auction in early October for $110 million to Brookfield Asset Management and Brookfield Capital Partners, the property and private-equity wings, respectively, of Brookfield Asset Management. The firm said in October that it would reopen the Revel as a casino and hotel following around $200 million in renovations. Then, in a brief statement issued Nov. 19, Brookfield announced that it had “terminated the Revel acquisition.” A Brookfield spokeswoman told the Press of Atlantic City that the decision stemmed from a disagreement with bondholders controlling debt related to the casino’s power plant. It was not clear at press time if a deal with Brookfield, which also owns other casinos, including the Hard Rock Hotel & Café in Las Vegas and the casino resort Atlantis Paradise Island in the Bahamas, could be resurrected. Also on the Boardwalk’s northern end, the 1,331-room, 17-year-old Showboat is now the only shuttered casino with a concrete future: conversion into a satellite campus for Stockton College. Details of the deal announced in late November between the school and owner Caesars Entertainment have not been disclosed. “Our intent is to engage in a project that enhances Stockton’s educational growth, offerings and cost-containment, while at the same time bringing new educational opportunities to Atlantic City,” Stockton College President Herman Saatkamp said in a statement on the school’s website. The statement called it “premature” to release more details because the deal was not yet finalized. However, the report from Christie’s summit mentioned a “New University Park” — to be anchored by Stockton as well as a “medical district” at the casino site. Stockton and Caesars did not respond to requests for comment; the New Jersey Casino Reinvestment Development Authority, a state agency, directed TRD to the summit report. Whatever the former Showboat’s ultimate academic use, Caesars Entertainment CEO Gary Loveman suggested in a statement that he thought the trade would help the fortunes of an Atlantic City reeling from gamblingrevenue declines. “I believe the construction of a Stockton campus there will help to diversify the economy of the city, which is critical to its future well-being,” Loveman said.

Longer odds As for the other shuttered casinos — the Atlantic Club and the Trump Plaza — their futures are various shades of murky. The Atlantic Club is the ripest for redevelopment — but not as a new casino. Caesars Entertainment bought the 801-room resort 000 May 2008 www.TheRealDeal.com

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The $2 billion Revel shut down in September.

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The Trump Plaza, which closed in September, may be demolished.

“The gloves are off; there is a real concerted effort about rebuilding the town.” Cu rt is Bashaw, Cape Advisors The Trump Taj Mahal may be the next casino to cease operations.

at the Boardwalk’s southern end with Tropicana in late 2013, after it slid into bankruptcy. The new owners closed its doors in January, and divvied up its gambling equipment and customer data. Caesars, which also owns Caesars Atlantic City, Bally’s Atlantic City and Harrah’s Resort Atlantic City, placed a clause in the property’s deed that it not be reopened as a casino, thereby ensuring any new owner would have to come up with another use. Some on the ground said they think the Atlantic Club could come back as condos or apartments, or as an assisted-living center for the elderly. The redevelopment costs — one analyst estimated it would cost $100 a square foot to convert the property into condos — could prove a challenge, especially given Atlantic City’s high property taxes. In short, drawing investors or individual buyers to the struggling municipality may prove a challenge. Trump Plaza may not even remain. Christie’s summit report said that “demolition of certain failed casinos to create greenscapes providing entertainment access to the Boardwalk and ocean by non-gambling visitors could help re-orient the ‘new’ Atlantic City.” Many, including Atlantic City Mayor Don Guardian, have identified the 906-room, 20-acre resort as the best candidate for demolition, given its location in the middle of the Boardwalk. The demolition would allow a shopping plaza known as the Walk to connect directly with the Boardwalk, thereby broadening Atlantic City’s appeal beyond large-scale gambling. Guardian did not respond to requests for comment. As for large-scale gambling, it seems to be in Atlantic City’s rear-view mirror, especially when it comes to redevelopment and development options. Instead, small-scale gambling could be the new normal. In January 2011, Christie signed legislation allowing new casino-resorts with fewer than 500 rooms, an old threshold that state legislation set in 1976. The new 200-room minimum was designed to foster so-called “boutique casinos,” ones with more table games and fewer slot machines. These gambling houses, observers say, might appeal to younger visitors not wishing to spend hours feeding the slots and help to shake off the city’s dusty reputation. Notably, however, no new boutique casinos have been constructed since the 2011 law took effect. Hard Rock International planned to build a 200-room casino on the Boardwalk, at Albany Avenue, but the firm abandoned plans in late 2012, after the poor initial showing of the then-new Revel. More boutiques may yet be in Atlantic City’s future, as may condos and other real estate attractions that don’t involve hundreds of hotel rooms situated around acres of slots. If they are, then the closings of 2014 will be seen as the turning point. The idea of a redeveloped Atlantic City, not reliant on large-scale casinos, is not so far-fetched to some. “If you went to Miami Beach in 1982 or 1979,” Bashaw of Cape Advisors said, “all those fabulous deco hotels had white fluorescent lights and little old ladies sitting out front in those aluminum chairs. It was written off.” TRD www.TheRealDeal.com December 2014 75

By Claire Moses he “cool” spots in New York are losing their trendy vibes. Williamsburg and Bushwick — once the ultimate strongholds of hipsterdom — have opened to young professionals who are settling down with their children and pets. In Queens, luxury towers are sprouting up in Long Island City neighborhoods that were once filled with warehouses and artist hangouts. And now: Red Hook. While still maintaining a fair share of its native coolness — due in part to a lack of public transportation and zoning that’s geared mostly for industrial use — Red Hook is beginning to transform as well. Est4te Four, a Los Angeles-based developer with roots in Italy, is the pioneer in the area. The developer bought four waterfront properties this year for more than $30 million, adding Red Hook is bordered by New York to land it purchased in Harbor, the Gowanus Canal and the 2012, some of which Gowanus Expressway. it will combine into a massive, 1.1 million-square-foot project. The complex will encompass the space from Coffey and Wolcott streets, and Ferris Street and New York Harbor. Est4te Four also launched sales at 160 Imlay Street, a former warehouse converted to condos, earlier this year. “We want to create an innovation district,” said Massimiliano Senise, a partner at Est4te Four. He said the firm is currently working on developing the master plan for its office project, which aims to be a “Silicon Valley” style campus for high-tech and fashion companies. At 160 Imlay, 52 of the 70 units are currently in contract, said the building’s broker, Douglas Elliman’s Patty LaRocco. As a broker in the area — and a recent resident of the Brooklyn community after living for decades in Manhattan — LaRocco said interest in the neighborhood is booming. “I can’t return phone calls fast enough,” she said. LaRocco added the units “sold very quickly.” Est4te Four’s Senise said he was attracted to the area’s maritime history, the available warehouses, the artsy scene and the million dollar view of Manhattan — in an atmosphere vastly different from the rest of the city. “It looks like a canvas,” he said. “The only reason you know you’re in New York is because you can see the Statue of Liberty.”

The renaissance in Red Hook A look at the new condos and offices livening up the remote Brooklyn nabe

A rendering of 160 Imlay Street, which is more than 70 percent sold out.

A rendering of Est4te Four’s 1.1 million square-foot project in Red Hook.

Left, Elliman’s Patty LaRocco; right, Aleksandra Scepanovic of Ideal Properties Group.

Red Hook’s commercial and retail development is doing quite well, said Aleksandra Scepanovic, managing director of the Ideal Properties Group, a Brooklyn-based firm. While she expressed some worry about the lasting impact of Superstorm Sandy on the residential component of the neighborhood, she said that retail is “rebounding much better.” “If there’s no repeat of Sandy,” she noted, “Red Hook will continue on that trajectory.” Another noteworthy residential development is coming to the area in the form of 22 townhouses on King Street. Sales will launch in the spring. Williamsburg-based 76 December 2014 www.TheRealDeal.com

Shared Brooklyn opened a 3,000-square-foot communal office space at 185 Van Dyke Street last month, aimed at drawing creative and freelance professionals.

Sanba Partners plans to break ground at the end of the year on the homes, which will be located between Van Brunt and Richards streets. The 22 new homes, LaRocco said, will be “architecturally significant.” The project will have five different facades that include wood, brick and steel. The townhouses are being built to minimize damage from another hurricane. The homes, for example, will not have basements. And none of the mechanics will be located on the ground floor, LaRocco

said. Construction is expected to be complete in 2016. Meanwhile, at 185 Van Dyke Street, a 3,000-square-foot communal office space opened earlier in the month that’s aimed toward “creative and freelance professionals,” according to an announcement from Shared Brooklyn, a shared office space provider. “It’s just a beautiful community and that’s very hard to find in New York these days,” LaRocco said of Red Hook. “It’s just really funky quaint.” TRD www.TheRealDeal.com January 2012 00

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Partner and chairman of real estate Fried, Frank, Harris, Shriver & Jacobson What are you reading right now or what did you finish most recently? “Liar’s Ball,” by Vicky Ward. I thought it was fabulous. It’s the story of the GM building, from the beginning to [near] the end: from the initial assemblage of the site to the sale of the building by Conseco to Harry Macklowe. We represented Harry buying the building from Conseco, and selling some years later — it went through a number of iterations. Ultimately, he ended up selling the building in a contested situation, and we kind of lived through the whole thing. What spurred you to read that book? It was near and dear to me, because it was a personal, unbelievably accurate story about people, places, and history, using as its focus one building, an iconic building — the General Motors building. Has anything you read in it stuck with you? Would you recommend it to others? It’s the story of New York City real estate — so vivid and so real. The woman who wrote it, it’s like she was there. I think I would have noticed her! She has an English accent; I think I’d have remembered. Anybody involved in New York real estate who doesn’t love this book, well, they’re not working in the same industry as me.

Has anything in it stuck with you? Two themes really stuck with me: making the tough, right choice and not quitting. Horowitz says it best, “In life, everybody faces choices between doing what’s popular, easy, and wrong versus what’s lonely, difficult, and right.” I’ve found that the path of least resistance leads to mediocrity, and that there are many easy paths to mediocrity but very few tough paths to greatness. ... Horowitz’s assessment that perseverance is the common denominator of success really rang true for me, and is intrinsically linked to never lowering expectations of performance standards. Horowitz says, “When you are building a company, you must believe there is an answer and you cannot pay attention to your odds of finding it. You have to find it. It matters not whether your chances are nine in 10 or one in 1,000; your task is the same.” What we deliver has to be great to compete, and you can only get to that performance level by sticking at it and making tough choices.

Jennifer Roberts

Robert Reffkin

Co-founder, J/R Luxe, Coldwell Banker Previews International What are you reading right now or what did you finish most recently? I just finished reading “Contagious: Why Things Catch On.” It’s a fascinating case study about what factors make things go “viral.” It’s grounded in hard facts and also sociology. It really makes you view our world differently.

Founder and CEO, Urban Compass What are you reading right now or what did you finish most recently? “The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers,” by Ben Horowitz.

What spurred you to read that book? I heard the author, Jonah Berger, speak at a University of Pennsylvania (my alma mater) function last year, and again last month at Coldwell Banker’s annual conference in L.A. He was incredibly motivating.

What spurred you to read that book? Ben Horowitz has a reputation for being a substance-over-style guy, and I had heard a lot about his definitive stance in this book on what qualifies as a “good company,” so getting to dive deep into his perspective on this question was a nobrainer.

What stuck with you most? “Contagious” is an interesting read on why things spread, and it gives you examples with analysis outlining six factors that make ideas or products “contagious.” I would definitely recommend it. I walked away with a slew of ideas that I have incorporated into my business. Compiled by Brendan O’Connor www.TheRealDeal.com March 2010

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*1 month OP and 1 month free offer is valid on newly renovated unit inventory only and valid for a limited time only, see leasing agent for details. OP will be paid to Brokers, if and only if, the following terms are met: (1)Broker/Agent must accompany prospect on their first visit to the property/leasing office. (2) Broker/Agent refers a prospect to the property and the prospect lists the Broker/Agent as the referral source on the property guest card. (3) Prospect enters into a new lease meeting minimum lease term requirements, see leasing agent for details. (4) Prospect moves into the property. Crescent Heights® is a service mark used by a group of limited liability companies and partnerships. The Paris, New York is being operated by 752 UWS, LLC, which is a separate, single purpose

entity that is solely responsible for its operation, obligations and liabilities. 752 UWS, LLC reserves the right to change features and amenities without notice. Renderings, photographs, floor plans, amenities, upgrades and other information described are representational only, and all features and amenities are subject to change at the owner’s sole discretion, without notice. We are pledged to the letter and spirit of U.S. policy for the achievement of Equal Housing Opportunity throughout the Nation. We encourage and support an affirmative advertising and marketing program in which there are no barriers to obtaining housing because of race, color, religion, sex, handicap, familial status or national origin.

GRACIOUSLY PROPORTIONED and beautifully finished

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TH I S M O N T H I N

R EAL E STATE H ISTORY Aomura look back at some of New York City’s 1986: N pays $50M for half of Eastdil Realty

biggest real estate stories

he world’s largest financial brokerage, Japanese bank Nomura Securities, paid $50 million to buy half of Midtown-based real estate investment firm Eastdil Realty, 28 years ago this month. Nomura purchased the stake in Eastdil to gain access to the booming American real estate market and to catch up with other large investment banks, including Goldman Sachs and Salomon Brothers, that already had real estate divisions. It was Nomura’s second American real estate company purchase that year: Months earlier it acquired mortgage brokerage Babcock & Brown Real Estate. Eastdil, founded by Benjamin Lambert in 1967, was Benjamin Lambert credited with bringing a more sophisticated marketing process to major property sales. Lambert said the Nomura deal would allow the firm, which did about $3 billion a year in transactions, to access capital while staying independent. Ultimately the purchase did not hold, and Eastdil bought back its interest in 1994. Five years later, it sold itself to the San Francisco-based bank Wells Fargo. In 2006, Wells Fargo purchased Secured Capital, and the two firms were merged and renamed Eastdil Secured, which operates as a stand-alone division.

THE PORT AUTHORITY OF NY & NJ REQUEST FOR PROPOSALS FOR SALE OF LAND AND DEVELOPMENT RIGHTS ON DYER AVENUE AND 33RD STREET (RFP #40540) The Port Authority of New York and New Jersey is seeking to identify firms interested in responding to a Request for Proposals (RFP) for the sale of land and development rights on Dyer Avenue and 33rd Street. RFP #40540 is available on-line at: http://www.panynj.gov/businessopportunities/bid-proposal-advertisements.html. Addenda to the RFP, if any, will be posted at this site. Monitor the advertisement on the web site to ensure your awareness of any changes. If you have any technical problems accessing the documents online, email us at askforbids@panynj.gov or call (201) 395-3405 for assistance. Your e-mail should include the RFP number, your firm name, email address, contact person, mailing address, and telephone number. Joint Ventures/teams are acceptable. It is currently anticipated that proposals shall be due by 2:00 PM on December 16, 2014 or as otherwise indicated in the RFP documents. Proposals must have the RFP Number and full legal firm name clearly indicated on the outside of the package. Send Proposals(s) to: The Port Authority of NY & NJ, Attn: RFP Custodian, Procurement Department, 2 Montgomery Street, 3rd Floor, Jersey City, NJ 07302. A VALID PHOTO ID IS REQUIRED TO GAIN ACCESS INTO THE BUILDING, IF YOU ARE HAND DELIVERING YOUR PROPOSAL.

82 December 2014 www.TheRealDeal.com

1961: Transformative zoning law takes effect

he first comprehensive overhaul of the city’s zoning laws since they were established in 1916 took effect 53 years ago this month. The 1961 resolution established the “tower-in-the-park” skyscraper model, providing incentives that let developers erect buildings that were larger than in-place regulations in exchange for public plazas, and it reduced zoning in residential areas, especially the outer boroughs. The city adopted the regulations to update the height, setback and bulk regulations formulated at the turn of the century to control skyscraper development and to establish residential areas free of incompatibleJob uses. 55843 PAUTH The new rules were meant to clarify uses, and to Built in 1965, 1330 Sixth Avenue used Real Deal manage the city’s explosive post-war growth in both a “tower-in-the-park” style permitted 1/4 pg under the 1961 code, with a street wall residential and commercial 4.625” x 6.375”development. While the11.21.14 resolution had broad support, it was set back from the sidewalk. p2 not universal. The Queens Chamber of Commerce criticized the new document for “specific cases of improper zoning,” the New York Times reported as the law took effect. Today, some features of the 1961 law are seen as outdated, such as the tower-in-thepark structure, which isolates the building from pedestrians.

1924: Shriners dedicate temple that became City Center

he fraternal society the Ancient Arabic Order of Nobles of the Ancient Shrine, better known as the Shriners, dedicated the hulking $2.5 million Moorish-inspired auditorium Mecca Temple in Midtown 90 years ago this month. The building includes what is considered the largest piece of steel ever used in a New York City building, according to a report from the Landmarks Preservation Commission, which designated the building a landmark in 1983. The beam was more than 92 feet long, 13 feet wide, and weighed in at 65 tons. The Shriners, founded in Manhattan in the 19th century as an entertainment and charity-oriented offshoot of the Order of Freemasons, built the 12-story structure at 131 West 55th Street, between Sixth and Seventh avenues, to accommodate its growing membership. The society purchased the land in 1922 from Yale University for $400,000. The building was funded with bonds and debt, which were to be supported in part by renting out the venue for other uses. At the time, it was thought the theaters of The 1924 Mecca Temple became City Center in 1943. Broadway might continue to migrate as far north as 55th Street, and those crowds could fill the nearly 3,000-seat theater. But the Great Depression hit the bottom line hard, and in 1937 the lender foreclosed. After another business venture failed, the city took over the property because of delinquent taxes. The 12-story structure was reborn in 1943 through the backing of Mayor Fiorello La Guardia as a public performing arts venue called the City Center of Music and Drama, which continues to operate today as the New York City Center. Compiled by Adam Pincus

PHOTOGRAPH OF LAMBERT BY CHRIS MARTIN

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MEET the Landlord

Vital Stats Name: Joseph Tahl Company: Tahl Propp Equities Title: President and co-founder Age: 52 Hometown: Westbury, Long Island Currently living in: Harlem Gladys Hampton Houses in Harlem

How many apartments do you own, and are all of them in Harlem? They are. We started buying buildings in Harlem in 1998. We were one of the first of all the major real estate firms to come into that market. We own, manage and are developing a total of 3,200 units in East and West Harlem. More than 95 percent of our apartments are affordable housing. We enter into longterm, 30-year-plus affordability agreements with housing agencies such as HUD, HPD and DHCR to ensure that our apartments are set aside for lowand moderate-income tenants.

Did you decide at the start that affordable housing would be your focus? We were still learning the Harlem market then. As we’ve been in Harlem for many years now and have been very supportive of community, tenant and housing organizations, we realized that affordable housing is not only what New York City needs, but what Harlem needs. Today, we think it’s terribly important that all this newfound prosperity in Harlem benefits everyone, especially folks who’ve been there the longest and have a tendency to be left out or left behind.

How does Mayor de Blasio’s housing push affect your operation? We’re actively involved in the mayor’s plan in Harlem. We are in the middle of a several-year effort to preserve about 1,500 units of mostly low-income housing [through regulatory agreements with agencies]. We’re also working with the agencies to develop up to 1,100 units of new affordable housing on two large parking lot sites that we own. One is an entire square block, and the other is almost two entire square blocks.

How did you get involved in real estate? I started out as a real estate lawyer at Dreyer and Traub, a New York City law firm representing developers. The developer that I worked primarily for when I began in the late 1980s was Donald Trump. At the time, he was building Trump Palace and the Trump Taj Mahal, and selling the St. Moritz Hotel. I worked in a group of nine lawyers at the firm that represented Mr. Trump on his real estate development matters. I left there after three years because Mr. Trump made me an offer to come on as associate general counsel of the Trump Organization, his real estate firm. I jumped at the offer. You can learn from him just listening to him order lunch. I learned a lot about real estate in my five years there, and I left because I wanted to become a developer. I wanted to see if I could just start buying apartment buildings. In 1998, I teamed up with Rodney Propp to form Tahl Propp Equities.

How did you meet Rodney? We met through mutual friends in the early 1990s. Rodney and I often joke that our business partnership and friendship have outlasted both of our first marriages combined. He’s more actively involved in investor relations and capital formation than I am. I spend my days sweating my ass off in Harlem, but what Rodney does from Midtown on the capital side is equally important to the sweat equity I put in. 84 December 2014 www.TheRealDeal.com

Are you buying less than you used to? Yes, we’re looking at other acquisition and development opportunities in Harlem. We have [also] looked at the outer boroughs and done a couple things outside the city. This is a market we certainly know; we couldn’t duplicate that presence, market vision and capability in any other market.

Why have you moved away from buying? The prices that we paid for any kind of sizable buildings between 2000 and 2004 are such a small fraction of what the buildings are worth today. I’d be reluctant to sell anything because I don’t know how you could buy it back. Given market prices, I can’t imagine assembling a portfolio like that today.

How extensively have you had to renovate some of these properties? Some of the buildings we bought are 100 years old. When we bought them, they hadn’t been properly maintained for 50 years or more. I remember replacing the elevators in two buildings that were built in 1905. When the elevator contracting company took apart an elevator, a worker called me over. He said the elevator was so old that the rails in the elevator shaft that the car was riding on were made of wood, not steel. That’s the way elevators were first made, I guess. I thought, “Wow, it really is time for a new elevator.” I’m proud that in all of the capital improvements we’ve done on our buildings, we have never charged tenants an MCI [major capital improvement] rent increase. We’ve always exempted tenants from those increases because we didn’t want to be viewed as a landlord that was trying to push people’s rents up for the purpose of displacing them.

How many condos are in your portfolio? No more than 150 units are condos [in West Harlem]. That’s a small part of our business, but there are developers in Harlem building condos. That would be a bad thing if that’s all you were seeing. Most of what you’re seeing there is affordable development, which is what you should see. We also have 50some retail stores at the apartment houses. I live in one of our buildings on Adam Clayton Powell Boulevard in Central Harlem.

What are the biggest buildings you own? The biggest building that we own is called 1775 Houses, which holds 255 low-income affordable units. The second biggest building is also low-income affordable, called Gladys Hampton Houses, which has 205 units.

In the coming years, do you see your approach changing? Now that Mayor de Blasio has put forth a positive affordable housing plan, that’s where most of our growth and new business will be. But we are open to other types of investment in Harlem, whether it is schools or commercial facilities. As Harlem develops, the community will speak to what types of projects it needs, and we hope to be an active part of that. By Mark Maurer PHOTOGRAPH FOR THE REAL DEAL BY Tobias Truvillion

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11/25/14 4:30 PM

Architecture Review

Ja m e s G a r d n e r

A touch of glass on Lex

C3D Architecture’s new residential design brings a handsomeness to an undistinguished strip

he relatively small, but steadily growing, firm of C3D Architecture has a new building in the works whose renderings are promising enough to merit your attention. Whether or not it will live up to those renderings, however, is something that remains very much to be seen. Located between 33rd and 34th streets, 229 Lexington Avenue will rise over the demolished remains of two buildings in place for many years, one of which housed Da Ciro, an estimable Italian restaurant that is now looking for new premises. Developed by Albert Shirian of the NY Lions Group, this latest project is expected to rise 14 stories and contain 40 residential units, together with street-level retail spaces. It will be built in a part of Manhattan that is already seeing a good deal of development, in such projects as 160 Madison Avenue and 172 Madison Avenue, both of which display the mainstream Modernist idiom. To date, C3D Architecture, a decidedly young firm, has been relatively pluralistic in its choice of design idioms. The overriding slant of its atelier has been that of neo-Modernism, as can be seen in such projects as 27 East 61st Street and 308 East 59th Street. At the same time, there is a restrained Historicism, or at least a contextualism, in its design for 227 East 67th Street, with its elegant limestone façade, its demure cornice and its coursing line separating the street-level entrance from the upper floors. For the most part, however, this firm has favored a restrained compromise between neo-Modernism and Deconstructivism. That is to say that there is little, if any, volumetric boldness to the buildings’ conception, let alone any sense that they and the world around them are on the verge of implosion, explosion or collapse. Instead, C3D Architecture design tends scrupulously to respect the boundaries of its lot, and mainly rearranges or tactically intervenes in the placement of windows along its planar facades. One sees this in such projects as 237 East 34th Street and 19 Beekman Street, both of which feature largely curtain-walled surfaces, disrupted at several points by projecting or receding (but in any case, asymmetrical) window-work. At the same time, the firm occasionally opts for somewhat bolder treatments of the façade, as evidenced by the residential development at 145 East 47th Street, where, somewhere around the sixth or seventh floor, the building recedes in a sharp, staggered setback. That feature, as well as a similar treatment at the Gotham Hotel on 46th Street between Fifth and Madison avenues, appears to be inspired

86 December 2014 www.TheRealDeal.com

by the nearby Austrian Cultural Forum, designed by Raimund Abraham. But such works as these are the exception for C3D Architecture, and their newest project at 229 Lexington Avenue is more typical for the firm in its re-

windows are somewhat narrowed, and the dark metal partitions, each rising through two stories, are decidedly more pronounced. The style is strengthened futher by the visibility of the floor divisions at the mid-point of each level of the facade. Up to the eleventh

A rendering of 229 Lexington Avenue. Inset, Damir Dan Sehic, principal at C3D

The new building promises a sense of openness in its expanse of glass at street level. strained compromise between neo-Modernism and a pared-down Deconstructivism. This new mid-block building fits in well enough with its neighbors north and south, even though it is cast in a decidedly different idiom. To the north is a lower-lying pre-war structure with BeauxArts details, while its southern neighbor is a post-war rationalist building, clad in bare and unadorned red brick over a limestone base. The new building promises a sense of openness in its expanse of glass at street level. Above it, starting at the second floor, the

floor, these two-story divisions have been arranged on an irregular axis that confers a sense of movement and restrained asymmetry to the façade as a whole. At the summit of the building, however, a three-story segment completes the project with the resumption of the expansive glass passages seen at ground level. In traditional terms, perhaps the most daring part of the façade — though in truth, it is not all that daring at this late date — is the recession, a few feet into the building, of the last three windows to the south. The result is a design that is handsome,

elegant and restrained, even though it has to be said that the recession to which I have referred does not seem to have any more pressing justification than the desire to avoid the monotony — as presumably the architects see it — of what would otherwise be a flat, planar surface throughout the façade. Seen from the perspective of the real estate market, this inflection — which permits a partial view south along Lexington Avenue — does not really seem worth the trouble. The rendering, which is all we have to go on at this early stage in the development, is certainly handsome, but one must assert that only provisionally at this point. With all buildings, but especially with the neo-Modernist designs preferred by this firm, so much depends on how well the building is actually made. The specter of value engineering, of cut corners and inferior materials imperfectly applied, haunts so much of the recent architectural fare of Manhattan, and it must be said that several of the projects that have come out of the studios of C3D Architecture have suffered from this fault as well. Consider such buildings as 232 Seventh Avenue, 949 Park Avenue and the Gotham Hotel. In each case, the final product, structurally and stylistically, follows the rendering quite closely, but in each case the fulfillment is somewhat less inspired than the promise implicit in the rendering. Why is that? Quite aside from the power of renderings to choose angles and atmospherics that show off the development to best advantage, one senses that a certain economizing with materials, a flimsier grade of glass, an inferior quality of stone or steel, and a more perfunctory skill in the fabricating of the building through the use of these materials, all collude to create a sense of dreary adequacy in the finished result, despite the best intentions of the designers. It is true that the ultimate responsibility for such deficiencies lies not really with the architects, but with the developers, whose ambitions are often more bottom-line in nature than they are concerned with the creation of something that will truly do honor to the streetscape of Manhattan. With that in mind, we can say that if 229 Lexington Avenue does succeed in realizing the promise of its renderings, it will be a worthy addition to an avenue that is hardly distinguished by its architecture. If it instead suffers from the deficiencies of several other realized designs by this firm, then it will share with so many recent buildings in the five boroughs the sense of being “good enough,” but not much more than that. TRD

Q&A

Betting on the Bed-Stuy boom

Climbing prices and new developments are signs that record growth could continue noted that Bed-Stuy’s million-dollar condos are large, so their prices are only

By Brendan O’Connor

he recent popularity of Bedford-Stuyvesant is in many ways a mirror of

running around $500 a square foot (she said that the average for condos

much of Brooklyn; record prices — in Bed-Stuy’s case, condos that top

of all sizes is now more than $700 per square foot.) “The condo market

$1 million — and an increasing volume of deals, as renters, investors,

will flourish for years to come in Bed-Stuy,” added Ban Leow of Halstead

and homeowners glom on to the neighborhood’s still-affordable charms. However, Bed-Stuy is a special case, too, in that many of the newcomers are drawn in by the existing community and its sensibilities, and are not looking to raze the area’s historic architecture, which includes a wealth of highly detailed

Property, who pointed out that there are new developments priced at more than $1,000 a square foot. “The developers of today get it and are offering high-end luxury condos to match the asking price.” What does that mean for renters? While prices have moved up to around

brownstone and limestone row houses. TRD spoke with residential brokers

$2,400 a month for two-bedrooms — a significant jump over just the past few

with expertise in Bed-Stuy to understand the area’s formerly edgy reputation,

years — inventory is healthy and new luxury product represents an additional

its recent price movements, and whether neighborhood real estate has more

choice for tenants. Raymond Ruiz, who opened a Rapid Realty franchise in the

room to run.

neighborhood four years ago, said that at the time, “people told me I was out of

In the condominium segment, certainly, our roundtable thought that

my mind.” But with the area’s recent flourishing, “I love that so many other peo-

the peak has not yet been reached. Douglas Elliman’s Stephanie O’Brien

ple are learning to see Bed-Stuy for what it really is, and not what it once was.”

Raymond Ruiz

Alain da Sylveira

Owner/Broker Rapid Realty Bedford-Stuyvesant How much is sales activity in Bedford-Stuyvesant up or down compared to a year or two ago? Sales are on the rise in Bed-Stuy. The sales market is still slow compared to where we’d love for it to be, but it’s on its way up. Bed-Stuy is getting more attention from buyers with each passing year. But like buyers anywhere, buyers in Bed-Stuy are being limited by tight lending practices. What price ranges are seeing the most activity today for residential sales, and how does that compare to the recent past? The extreme ends of the price spectrum seem to be getting the most attention. Investors are excited to scoop up any available property that comes on the market at the low end, something in the $600,000-$700,000 range, because they know they can flip it for a major profit with very little turnaround time. And the condos that are going for $1 million or more may sound pricey, but they’re a steal for someone who was otherwise going to have to drop $3 million on an identical condo in Williamsburg. There’s been a surge in multifamily building sales in Brooklyn in the past year, and Bed-Stuy in particular has reportedly seen some of the fastest growth. How is that influencing the residential market? Multi-family buildings are playing a gigantic role in Bed-Stuy. These buildings may have been designed as condos, but 88 December 2014 www.TheRealDeal.com

investors are finding the fastest route to success are by converting them into rentals. That’s something we deal with on a daily basis at Rapid Realty. The rental demand is creating a huge market for these multifamily properties, which is really helping Bed-Stuy grow as an active participant in the Brooklyn boom. There are a number of new residential projects underway throughout BedStuy, including some unique conversions. Which upcoming projects are you most excited about and which projects, if any, do you expect to be market gamechangers? I’m particularly interested by the work that Brookland Capital is doing right now. They’re based in the neighborhood; they’re not some investment firm coming in and throwing up a high-rise because they think it’s easy money. They have a real interest in the area, and they’ve got some very attractive projects in the works right now, including 691 Marcy Avenue. What are the biggest challenges to marketing residential properties in BedStuy right now and what concerns do you have about the market there? Bed-Stuy has a reputation to overcome. … In 2010, when I opened my Rapid Realty franchise in Bed-Stuy, people told me I was out of my mind. They only knew the area by its reputation, and they thought I’d never be able to grow a business here. But when I explored the neighborhood, I could see that it was a market that was right on the cusp of flourishing. I wanted to be a part of making that happen, and I’m very proud that I’ve been able to do that. I love that so many other people are learning to see Bed-Stuy for what it really is, and not what it once was.

Salesperson, Fillmore Real Estate What price ranges are seeing the most activity today for residential sales, and how does that compare to the recent past? Our most immediate territory — Stuyvesant Heights — is showing some very strong numbers in the $1.7 million range. Compared to two years ago, we have reached a point where consumer confidence is back.

Macon Street, with almost full-service amenities. More demanding renters are ready to pay above the norm for a more upscale living experience. What is residential inventory like on the sales side in Bed-Stuy? Has it gone up or down compared to a year or two years ago? We are still under-stocked on the sales side, and the proximity to Manhattan is turning any listing properly priced coming onto the market into a bargain. A few more rental properties have come at the same time. Some higher expectations

Property owners that have lived here for many, many years are cashing in. Ban Leow, Halstead Property Are there certain parts of Bed-Stuy that are performing better than others? Which are the best- and worstperforming sections, and why? Stuyvesant Heights is surpassing our expectations and the opening of our new office in the heart of the landmark district clearly indicates our commitment to Bedford-Stuyvesant in general. We can, however, identify areas with more mixed-use property, like Bedford Avenue, Tompkins Avenue and Lewis Avenue, as the areas with record growth.

from landlords keep these new rentals on the market longer, so we may see consensus building around better incentives.

What about the rental market? Bed-Stuy was listed among the neighborhoods with the steepest rent increases since 2010 in one recent report. Does that jibe with your experience? Affordable units are in high demand, and we are clearly seeing a decrease in availability in that market segment. … The market has [also] welcomed the introduction of luxury rentals like 196

There are a number of new residential projects underway throughout Bed-Stuy, including some unique conversions. Which upcoming projects are you most excited about and which projects, if any, do you expect to be market gamechangers? The recent sale of the Cascade Development site on Marcy Avenue, with over 400,000 square feet of residential

There’s been a surge in multifamily building sales in Bed-Stuy; how is that influencing the residential market? The most desirable products on the market are brownstones and limestone buildings with two to four units. There are very few available, and this lack of inventory tends to inflate the price in most of Bedford-Stuyvesant.

www.TheRealDeal.com September 2014 83

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Q&A space projected, is the gamechanger that will bring a new scale of project in Bedford-Stuyvesant. Some conversations about passive houses coming to Bedford-Stuyvesant will bring more buyers that are seeking innovation, design and sustainability. What are the most surprising trends you see in the Bed-Stuy residential market today? The high quality of renovation seen in recent months by short-term investors has reversed completely the idea that quality could not be part of a successful flip. Exceptional products and great design are being offered to buyers.

Ban Leow

Salesperson, Halstead Property What price ranges are seeing the most activity today for residential sales and how does that compare to the recent past? From $1 million and below $1.5 million. Three years ago, prices were in the $900,000 range. Do you expect condo prices to continue rising in the neighborhood, or do you think there’s a limit on how high they can go? The condo market will flourish in the years to come in Bed-Stuy. More and more are being built around the northwest side of Bed-Stuy. Bedford Avenue is already a commanding area for new condo conversions or developments, with priceper-square-foot going above the $1,000 mark. The developers of today get it and are offering high-end luxury condos to match the asking price. Are there certain parts of Bed-Stuy that are performing better than others? Which are the best- and worstperforming sections, and why? Stuyvesant Heights, Stuyvesant West and some parts of Stuyvesant East are performing very well. Anything that is close to the A express trains is desirable. The J trains are also getting very popular, with the influx of new property owners east of Stuyvesant Heights. During the summer, TRD reported on a brownstone that was flipped for a 75 percent profit in just four months. Does that deal accurately reflect what’s going on with the brownstone market right now, or is it an outlier? That was my listing, and it indeed created a market frenzy with such an aggressive flip. The deal accurately reflects what’s going on with brownstones in Bed-Stuy, if they are trophy properties in a great location. 90 December 2014 www.TheRealDeal.com

What about the rental market? Bed-Stuy was listed among the neighborhoods with the steepest rent increases since 2010 in one recent report. Does that jibe with your experience, or are there still parts of the neighborhood where a renter can find a bargain? The rental market is very active in BedStuy. Bed-Stuy was never an expensive place to rent to begin with. For $1,900, one can rent an apartment offering almost 900 square feet of living space. What is residential inventory like on the rental and sales side? Healthy inventory on the rental side. Trophy properties in prime Bed-Stuy areas are low, but as prices inch up, more and more properties will come on the market. Property owners that have lived here for many, many years are cashing in. What do you think the neighborhood still needs in terms drawing residents from other parts of the city? Better grocery stores, more restaurants, bars, art galleries and clothing boutiques on the commercial strip of Bedford Avenue, Lewis Avenue and Malcolm X Boulevard. What are the most surprising trends you see in the Bed-Stuy residential market today? Bed-Stuy has always kept its cool and remained true to its close, community feel. The new wave of homeowners wants to be a part of this neighborhood. They understand the dynamics of the community, and contribute to the art, craft, fashion, food and fun of this very vibrant neighborhood.

Brooke Safford

Associate broker, Corcoran Group How much is sales activity up or down? With regards to the luxury market, the interest is excellent and people typically get their asking prices, even at the highest end of the market. I’m currently working on a deal that will break price records in the neighborhood, which speaks to the strength and power of the high-end market. What price ranges are seeing the most activity today for residential sales and how does that compare to the recent past? The high end of the market is really building — it seems like every week a new pristine, high-end property hits the market. Are there certain parts of Bed-Stuy that are performing better than others?

Tompkins Avenue is turning out to be a hot spot for retail, with the recent opening of high-end boutique and coffee counter Sincerely Tommy, and soon-to-open Eugene & Co., a farm-to-table eatery. In turn, the homes in the area have stayed in high demand with a lot of buyers now requesting this location. What about the rental market? I’ve been seeing a lot of activity with rentals that are updated with modern appliances and finishes, but still maintain original details and a classic brownstone feel. How long are residential condos staying on the market these days? I listed a two-bedroom condo priced at $499,000 and immediately got four offers, many over ask. It just goes to show that affordability is key in the market for those looking under $1 million. What’s the retail situation like in Bed-Stuy? My business doesn’t really involve retail, but it’s clearly following the residential activity. Every day there is a new café, restaurant or market — I especially love a new restaurant called Brunswick Café that just opened on the corner of Decatur Street and Marcus Garvey Boulevard. What are the most surprising trends you see in the Bed-Stuy residential market today? I’m seeing great interest in the opposite ends of the spectrum. On one hand, there is the strength of the high-end market and buyers seeking a luxury, finished product. On the other end, there are buyers seeking affordability under the $1 million mark. This is where the need for condos comes into play.

Stephanie O’Brien

Associate broker, Douglas Elliman How much is sales activity in Bed-Stuy up or down compared to a year or two ago? The number of sales of multifamily homes have increased nearly 30 percent compared to last year. The number of condos is about the same, because much of the multifamily properties and land that was purchased is still being renovated and converted into condos. I think the number of condo sales will increase dramatically by this time next year. Do you expect condo prices to continue rising in the neighborhood, or do you think there’s a limit on how high they can go? We are currently seeing a slightly more sluggish attendance at open houses,

which could indicate an adjustment to the price increases; however, the average price for condos is reaching over $700 per square foot. In regards to the prices going over $1 million, these are on units that are closer to 2,000 square feet, which is $500 per square foot. During the summer, TRD reported on a brownstone that was flipped for a 75 percent profit in just four months. Does that deal accurately reflect what’s going on with the brownstone market right now? There are a few developers that have the ability to buy distressed and foreclosed properties very inexpensively, spend several hundred thousand renovating them and still achieve 75 percent profit. I wouldn’t say that this is the norm, but it is happening. Bed-Stuy was listed among the neighborhoods with the steepest rent increases since 2010 in one recent report. Are there still parts of the neighborhood where a renter can find a bargain? This is correct. It depends on what you consider inexpensive: two-bedroom units in an average building are closer to $2,400, whereas four years ago they were only around $1,700. Bed-Stuy rental prices are the same as East Williamsburg now. I think the bargains would have to be found further out in Crown Heights or Prospect Lefferts Gardens. Is residential inventory up or down compared to a year or two ago? More inventory. However, it stays on the market over a much shorter period, so ultimately it appears the same. How long are residential condos staying on the market in Bed-Stuy these days and how does that compare to the last few years? Around 30 days, compared to 60-90 a few years ago. Which upcoming residential projects are you most excited about? Which projects, if any, do you expect to be market gamechangers? 178 Monroe, which are townhouse-style condo duplexes, and 620 Lafayette, which combines elements of the classic BedStuy townhouses by giving outdoor space and exposed brick, with all the comforts of modern finishes. What are the biggest challenges to marketing residential properties in BedStuy right now and what concerns do you have about the market there? Access to transportation is a bit of a challenge in some areas, and my only other real concern is that the prices went so high, so fast, that it will have to potentially level out a bit, or the quality of product will have to catch up to the level of the price per square foot. TRD www.TheRealDeal.com July 2013 65

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SOUTH FLORIDA

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

REPORT

Miami Beach’s wrecking ball With waterfront residential land in Miami Beach at a premium, some members of the wealthy elite are razing historic homes in the city to make way for new mansions. Local preservationists have been unable to stop the wave of historic house demolitions. The latest property owner to get a goahead for the wrecking ball is a company tied to Jeffrey Altman’s New York-based hedge fund Owl

Demolition on North Bay Road

Creek Asset Management. The company is replacing an 89-yearold home at 2156 North Bay Road with a contemporary-style house and tennis court. It is already razing a nearby 1925-era residence, and

replacing it with a 10,000-squarefoot mansion designed by Coconut Grove-based architect Max Strang. Another financial exec, Lion Financial managing partner Michael Simkins, is replacing a 1920s-era Mediterranean Revival mansion at 5869 Pinetree Drive with an exact replica of the original structure. And Stuart Miller, the CEO of homebuilder Lennar, is planning to demolish an 83-year-old Star Island residence that was once home to Miami pioneer Carl Fisher.

Fisher Island gets condos Carl Fisher’s former Miami Beach home might be in peril, but the Miami island that he developed nearly a century ago is experiencing its first condo construction activity in seven years. A developer is moving forward

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

Hudson Yards We advised Sherwood Equities in the $200 million sale of almost half a block 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.

Requests to raze pre-1942 homes in Miami Beach have surged to 35 in 2014 from three in 2011, according to the Miami Design Preservation League.

NoMad We helped Meliá Hotels lease space in a new 20-story tower going up just north of Madison Square.

Meatpacking District We advised the owners in a ground lease and JV agreement with the Rockpoint Group to develop a 150,000-square-foot boutique hotel.

with a pair of 10-story projects on Fisher Island dubbed Palazzo Del Sol and Palazzo Della Luna. Work on the first, the 47-unit Palazzo Del Sol, is underway. The condos are being marketed at prices ranging from $5 million to $32.5 million. Construction could wrap up by January 2016. Sister project Palazzo Della Luna is slated for initial foundation work next year and an early 2018 completion.

A rendering of Palazzo Del Sol

The projects were held up by a lengthy interfamily legal battle between the heirs of late Georgian billionaire Arkady “Badri” Patarkatsishvili and Joseph Kay, a cousin and former business partner of Patarkatsishvili. Kay unsuccessfully attempted to seize control of Patarkatsishvili’s assets, including the Palazzo sites, in courts around the world over the last three years.

Big bets on Design District The partnership behind the $1 billion transformation of Miami’s Design District into a luxury retail destination recently scored a huge investment from two industry giants. General Growth Properties and Ashkenazy Acquisition Corp. teamed up to acquire a 20 percent stake in the redevelopment of the 18-square-block neighborhood north of downtown Miami in a $280 million deal. The project includes 1.2 million square feet

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92 December 2014 www.TheRealDeal.com

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South Street Seaport We advised in the acquisition of what will soon be the Jade Hotel, designed to reflect Seaport history and Colonial Williamsburg.

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of mostly retail space to be owned and operated by a venture between Craig Robins-led Dacra and private equity fund L Real Estate, along with a boutique hotel and condo building. The partnership is mulling a future expansion of up to 2 million square feet. Since the Dacra and L Real Estate venture launched the redevelopment last year, A-list retailers like Cartier, Fendi, Hermès and Louis Vuitton have opened stores in the district. By Eric Kalis

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Commercial and

Snapshots of real estate residential real estate news briefs news from from around the U.S. around the U.S. Telluride, Colorado Tom Cruise listed his 10,000 square-foot home for $59 million. The 298-acre gated estate also holds a 1,600 square-foot guest house and private trail system. The listing says the actor spent several years designing and building the stone and cedar house.

New rental developments like DSF Group’s Halstead Square in Vienna, Virginia, aim to draw tenants with luxe amenities like pool rooms and common areas filled with high-tech equipment.

VIENNA, VIRGINIA

he recession added 875,000 more U.S. households to the ranks of renters, the website Trulia found. Developers have been adjusting: Construction of multifamily units is now at its highest rate in 25 years, while single-family home construction has barely reached pre-recession levels, the New York Times reported. Developers like the DSF Group are building rentals in suburbs near mass-transit hubs, where cheaper land

LOS ANGELES LA aims to allow building homes in backyards to ease its housing crunch and control sprawl. UCLA’s Architecture and Urban Design department offered this design as one potential backyard home.

Los Angeles Mayor Eric Garcetti set a goal of adding 100,000 new homes by 2021, a massive effort to relieve one of the country’s worst housing crunches. According to the California Finance Department, LA has averaged a net gain of just 5,500 units a year since 1991, the Los Angeles Times reported. To reach 100,000 in seven years, the city will need a variety of strategies, including revising the city’s permitting process (a project that is already underway) to build smaller homes in existing backyards. Garcetti set a benchmark that 30 percent of units built on land owned by the Metropolitan Transportation Authority be affordable housing. The mayor also said that he would work with the state legislature to restore housing funding to offset the cost of the affordable-housing allocation.

affords the opportunity to offer more luxurious amenities. One report found apartment construction in some markets, including Austin, Texas, Washington, D.C., and San Jose, California, excedes pre-recession peaks; DSF has buildings going up outside New York, Boston, and Washington, in Vienna, Virginia. The complexes feature outdoor fire pits, high-tech entertainment systems, and even a residents-only bowling alley.

partnership with Isles Ranch Partners and Castlelake LP, will pay around $200 million for the 184-acre Wallis Ranch near Dublin, California, the Wall Street Journal reported. The price reflects the scarcity of developable residential lots in the area. Trumark will develop the land into 806 lots, which it will then market to homebuilders. The company expects prices for the homes built there to range from $700,000 for townhomes to $1.5 million and more for larger, detached dwellings. Zelman & Associates, a housing research firm, found in its quarterly survey that land prices across the country rose by an average of 13 percent in the third quarter, slowing modestly from a jump of 14 percent in the second quarter and 17 percent in the first. The Journal reported expectations that land price increases will slow further over the next year.

DALLAS The investment group that plans to build an indoor ski slope and Hard Rock hotel complex near Dallas raised $100 million through the State Department’s EB-5 program.

The $200 million price tag for the 184-acre Wallis Ranch reflects rising prices due to the scarcity of developable land in the Bay Area.

94 December 2014 www.TheRealDeal.com

Terry Bradshaw put his 740-acre ranch, where he raises horses, cattle and pigs, on the market for $10.8 million. The NFL Hall of Famer’s 8,600 square-foot house has a 1,000-square-foot outdoor patio with a kitchen, bar, fire pit, and TV for watching football. The ranch also has a two-story doghouse with its own pool.

Paradise Valley, Arizona Steve Nash, the eight-time all-star guard for the Lakers, has put his Tuscan-style home in Arizona up for sale for $4.15 million. The 6,500-square-foot house is divided across three wings. There is a library, game room, wine cellar, and an outside sports court.

Stinson Beach, California

SAN FRANCISCO

A venture led by developer Trumark Homes is paying roughly $1.1 million per acre for a ranch about 35 miles outside of San Francisco, a price that represents a 30 percent increase in land prices in the area since 2010, according to Meyers Research. Trumark, in

Thackerville, Oklahoma

Investors in The Grand Alps Resort DFW plan to build a $398 million, 1,900-foot-long indoor ski slope on 58 acres in the Dallas suburb of Grand Prairie by 2018. The investment group has raised $100 million through the State Department’s EB-5 program, through which qualified investors can receive visas for investing in projects that create jobs in the U.S. The project received $68 million from private-equity investors and another $35 million from Grand Alps itself, which is also building indoor ski resorts in Brazil, Malaysia, and China. Compiled by Brendan O’Connor

Jerry Garcia’s 1.1-acre compound at the base of the Willow Camp trail, overlooking the Pacific Ocean, was listed for just under $4 million. “San Souci” has three buildings, including a onebathroom, 2,652 square-foot studio where Garcia recorded while living there in the 1970s.

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31088_ACQ-RealDeal_PR.indd 1

11/12/14 9:25 AM

Deal Sheet summary

The Deal Sheet, on pages 98 to 112, covers transactions from 10/11/14 through 11/10/14. Please submit future deals to deals@therealdeal.com.

Overview Property sales

Financing

Leases (# of deals)

Leases (square feet)

Deals

Transactions

Office

951,610

Dollars

$2,156,100,000

Aggregate value

$2,128,710,000

Retail

1,190,079

Total

111

Total

2,141,689

Sales

By dollar volume (in millions)

By type

Multi-family

Development site

Mixed-use Industrial

Development site Mixed-use

Industrial

Retail

Hotel

33.5

Multi-family

Retail

298.5

Commercial

1115.8

135

Office leases Office leases by industry

Office leases sf, by industry

Industry

Number of deals

Industry

Top tenant reps for office leasing, by sf Leased square feet

Broker

Leased square feet

Design 2

Design 5,258

Cushman & Wakefield 412,733

Education 3

Education 33,673

Newmark Grubb Knight Frank

Fashion* 11

Fashion* 46,262

JLL 82,597

Financial 7

Financial 313,124

Savills Studley 38,880

Health & Beauty

Health & Beauty 2,900

Cassidy Turley 21,342

Media 2

Media 20,052

Sinvin 16,589

Other 11

Other 119,548

EVO Real Estate Group

13,878

Real Estate

Adams & Co.

11,141

Technology 5

5,500

Technology 855,293

145,206

CBRE 8,042

Retail leases Food & Beverage Health & Beauty

The Dartmouth Company

Financial

69,566

Ripco 68,248 Sinvin 56,244

Other

Winick Realty Group 43,559

Home Improvement

Newmark Grubb Knight Frank

Arts & Culture

25,683

RKF 11,905 Crown Retail Services 7,700 SRS Real Estate Partners

96 December 2014 www.TheRealDeal.com

5,900

Auto Design

Food & Beverage

1 1

Health & Beauty Financial

Home Improvement Wireless Provider Arts & Culture Auto Design

Fashion

Wireless Provider

Other

,60

803

7,360

26,407 6,030

5 9,

,67

9,319

Open Realty Advisors 70,000

750,000

Retail leases sf by industry

58,37 6 7

Stroock & Stroock & Lavan LLP

Retail leases by industry

5,4 3

Leased square feet

45,

Top tenant reps for retail, by sf Broker

(*includes showroom space)

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Fa s t e s tAl e r t s Compl i a n c ePr ot e c t i on

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

Te n a n tMa n a ge me n t

Wo r kOr de r s

Ca l l Ce n t e r

An n u a l Ma i l i n gs

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

Office leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

1221 Sixth Ave

209,700

MUFG Union Bank / Omar Farooq and Fred Smith, Cushman & Wakefield

Rockefeller Group / Ed Guiltinan, Rockefeller Group, John Cefaly, Cushman & Wakefield

The bank signed a lease for the bottom three floors.

85 10th Ave

180,000

Google / n/a

Vornado Realty Trust and the Related Companies / n/a

The technology company signed a lease.

17 State St

98,000

IPsoft / Rob Lowe, Cushman & Wakefield

RFR Realty / Steve Morrows, AJ Camhi, Ryan Silverman, RFR Realty

The artificial intelligence software company signed a lease.

430 West 15th St

77,293

Palantir Technologies / Michael Morris and Paul Ippolito, Newmark Grubb Knight Frank

Atlas Capital Group and Rockpoint Group / Paul Amrich, Neil King, Ross Zimbalist, Steve Siegel, CBRE

The data analytics company signed a 15-year lease to occupy the second through seventh floors, and parts of the ground floor and lower level. The reported asking rent was between $90 and $100 per square foot.

777 Third Ave

50,000

Epiq System / Mark Weiss, Newmark Grubb Knight Frank

William Kaufman Organization / n/a

The technology company signed an 11-year sublease.

1251 Sixth Ave

46,000

Sumitomo Mitsui Trust Group / Josh Kuriloff and Fred Smith, Cushman & Wakefield

Mitsui Fudosan / Chris Perez, Mitsui Fudosan, David Falk, Peter Shimkin, Newmark Grubb Knight Frank

The tenant signed a lease and is relocating from 527 Madison Avenue.

55 Water St

37,000

Hunter Roberts Construction Group / Ross Eisenberg and Stuart Romanoff, Cushman & Wakefield

Retirement Systems of Alabama / n/a

The construction services firm signed a sublease to occupy the 51st floor. The company is relocating from 225 Liberty Street.

685 Third Ave

27,235

The Foundation for the Global Compact / Daniel Horowitz, Joseph Messina, Jeffrey Peck, Christopher Foerch, Savills Studley

TIAA-CREF / Zachary Freeman and Paul Amrich, CBRE

The United Nations non-profit signed a lease to occupy the 12th floor.

95 Morton St

25,123

Integral Ad Science Inc. / Alexander Chudnoff, Michael Higgins, Conor Gill, JLL

Brickman Associates / Alexander Chudnoff, Michael Higgins, Conor Gill, JLL

The tenant signed a 10-year lease to occupy the eighth floor. The company is relocating from 37 East 18th Street, and will occupy the former office of Fab.com.

3 Columbus Cir

21,342

Versace USA / Jonathan Schindler and David Mainthow, Cassidy Turley

SL Green Realty and the Moinian Group / n/a

The fashion brand signed a lease to occupy the 20th floor.

800 Third Ave

20,010

Road Runner Capital Partners LLC / Alexander Chudnoff and Randy Abend, JLL

800 Third Avenue Associates / Richard Brickell, Joseph P. Day Corporation

The investment company signed a seven-year lease to occupy the 10th floor.

488 Madison Ave

18,555

LagardĂ¨re Unlimited Americas / David Stockel, John Picco, Peter Van Duyne, Cushman & Wakefield

Feil Organization / n/a

The French media company signed an expansion lease.

142 West 57th St

15,586

OZ Management LP / Alexander Chudnoff and Steven Rotter, JLL

Met Tower Diamond Owner LLC / Paul Milinec, CBRE, David Berkey, L&L

The hedge fund manager signed a 15-year lease to occupy the 9th floor.

100-104 Fifth Ave

14,700

Knewton / Jim Wenk, JLL

Clarion Partners / Grant Greenspan, The Kaufman Organization

The educational technology company signed an expansion lease to occupy the seventh, eighth and 20th floors.

90 Park Ave

13,878

The John Simon Guggenheim Memorial Foundation / Arnold Gamberg, EVO Real Estate Group

n/a / n/a

The tenant signed a lease to occupy the 33rd floor.

1177 Avenue of the Americas

11,645

Aviva Investors Americas / Jason Perla and Greg Taubin, Savills Studley

Silverstein Properties / Roger Silverstein and Joseph Artusa, Silverstein Properties, Frank Doyle and Benjamin Bass, JLL

The tenant signed a 10-year lease to occupy the 44th floor.

6 Harrison St

7,539

Steven Alan / Roxanne Betesh, Sinvin

James Thomas Realty, LLC / Alex Furst and Louis Puopolo, Douglas Elliman

The fashion company signed a seven-year lease.

350 Madison Ave

7,178

Beacon Light Capital LLC / Alexander Chudnoff and David Okin, JLL

350 Madison Acquisition LLC / Evan Haskell, CBRE, Oliver Katcher, RFR Realty

The tenant signed a seven-year lease.

8 West 40th 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.

256 West 38th St

6,151

Neoscape / Jamie Jacobs and David Falk, Newmark Grubb Knight Frank

n/a / Michael Frantz and Paul Davidson, Newmark Grubb Knight Frank

The creative agency signed a lease and is relocating from 18 East 17th Street.

340 St Nicholas Ave

5,095

Say Yes to Education / Arthur Draznin and Gary Linder, Newmark Grubb Knight Frank

The Richman Group / Mark Tergesen and Robert Kempner, ABS Partners Real Estate

The education non-profit signed a lease for the ground floor and basement.

9 West 57th St

5,000

Sportswear Holdings Ltd. / n/a

Sheldon Solow / JLL

The private equity firm signed a lease to occupy the 50th floor. The reported asking price was $200 per square foot.

120 Wooster St

5,000

Michael Herman New York and Brilliant Luxury / Barry Finkelman, CBRE

120 Wooster LLC / James Cotello, Sinvin

The jewelry company signed a lease.

18 West 21st St

5,000

Warburg Realty / James Costello and Max Talpalar, Sinvin

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

The real estate agency signed a lease.

One Grand Central Pl

3,478

Jumeirah Hospitality & Leisure (USA) Inc. / Sebastian Infante and David Rosenbloom, Cushman & Wakefield

Empire State Realty Trust / Mark Tergesen and Robert Kempner, ABS Partners Real Estate

The hotel management service signed a lease.

273 Lenox Ave

3,100

n/a / Mark Tergesen and Robert Kempner, ABS Partners

The culinary group signed a lease to occupy the ground floor, second floor and basement.

210 Eleventh Ave

3,042

Karla Otto, Inc. / Stuart Siegel, CBRE

n/a / Audrey Novoa and Joseph LaRosa, ABS Partners

The public relations agency signed a five-year lease.

98 December 2014 www.TheRealDeal.com

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Office leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

350 Fifth Ave

3,005

Trade Informatics LLC / n/a

Empire State Realty Trust / Fred Posniak, ESRT, William Cohen, Jonathan Tootell, Shanae Ursini, Newmark Grubb Knight Frank

The financial services company signed a lease.

110 Greene St

2,850

CIOT / James Costello and Daniela Dimaggio, Sinvin

Big Greene, LLC / n/a

The design company signed a lease.

10 West 33rd St

2,603

Patricia Nash Designs, Inc. / David Levy, Adams & Co.

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

The tenant signed a lease. The reported asking rent was $48 per square foot.

20 West 26th St

2,408

O’Neil Langan Architects PC / Alan Bonett and Bradley Cohn, Adams & Co.

State Court Enterprise / Michael Moorin and Allen Gurevich, Newmark Grubb Knight Frank

The architecture services company signed a lease.

10 West 33rd St

2,024

Riviera Home Inc. & Regence Home LLC / David Levy, Adams & Co.

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

The tenant signed a lease. The reported asking rent was $44 per square foot.

10 West 33rd St

2,001

Silver Rock Capital LLC / David Levy, Adams & Co.

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

The tenant signed a lease. The reported asking rent was $48 per square foot.

10 West 33rd St

1,627

B.R.E Industries, Inc. / David Levy, Adams & Co.

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

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

210 Eleventh Ave

1,552

Edition Schellmann, Inc. / Tungsten Property

n/a / Audrey Novoa and Joseph LaRosa, ABS Partners

The publisher signed a two-year lease.

244 East 32nd St

1,500

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

Two Four Four LLC / Tom Brady, Rory Nichols, Sal Falcone, Town

The tenant signed a ground floor, five-year lease.

210 Eleventh Ave

1,497

VProud, LLC / Tungsten Property

n/a / Audrey Novoa and Joseph LaRosa, ABS Partners

The video social network signed a lease.

250 West 57th St

1,240

Charles Tyrwhitt, Inc. / Mitchell Grossman, Corporate Realty Solutions

Empire State Realty Trust / Keith Cody, Empire State Realty Trust, Harry Blair, Sean Kearns, Cushman & Wakefield

The menswear company signed a lease.

10 West 33rd St

1,206

Intercontinental Leathern Industries, Inc. / David Levy, Adams & Co.

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

The tenant signed a lease. The reported asking rent was $48 per square foot.

239 Bleecker St

1,200

Stranger & Stranger / James Costello, Sinvin

239 Bleecker Partners LLC / n/a

The branding company signed a lease.

780 Madison Ave

1,000

Vivo Per-Lei Inc. / Alexander Robles, Prime Manhattan Realty

780 Madison Realty LLC / Jacob Eisenstein, David Eisenstein Realty Corp.

The tenant signed an eight-year lease.

10 West 33rd St

962

VF Concepts, LLC. / David Levy, Adams & Co.

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

The tenant signed a lease. The reported asking rent was $48 per square foot.

10 West 33rd St

718

YB International, Ltd. / David Levy, Adams & Co.

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

The tenant signed a lease. The reported asking rent was $48 per square foot.

36 East 28th St

500

Century 21 Metropolitan / n/a

n/a / n/a

The real estate agency signed a lease.

1239 Broadway

400

Core Energetic /Manny Kabiri and Warren Stein, Manhattan Commercial Realty Corp.

n/a / David Justin, Justin Management

The tenant signed a five-year lease. The reported asking price was $1,466 per month.

Retail leases Address

Size

Tenant / Representative

Landlord / Representative

Notes

29 West Kingsbridge Rd (Bronx)

750,000

Kingsbridge National Ice Center / Stroock & Stroock & Lavan LLP

New York City Economic Development Corp. / n/a

The skating rink signed a 99-year lease.

9-19 Ninth Ave

70,000

Restoration Hardware Store / Mark Masinter, Open Realty Advisors

Aurora Capital Associates and William Gottlieb Real Estate / Bobby Cayre and Jared Epstein, Aurora Capital Associates

The home furnishings store signed a 15-year lease.

635-641 Sixth Ave

36,166

Lowe’s Home Improvement / Joe Mastromonaco, David Smookler, Ted Gildea, Fritz Kemerling, The Dartmouth Company

SL Green / Aurora Capital Associates and William Gottlieb Real Estate

The home improvement store signed a lease.

57 Mercer St

35,000

Crown Acquisitions, Inc. / Michael Glanzberg, Sinvin

International Olive Co. / Michael Glanzberg, Sinvin

The tenant signed a 49-year lease.

2008 Broadway

33,400

Lowe’s Home Improvement / Joe Mastromonaco, David Smookler, Ted Gildea, Fritz Kemerling, The Dartmouth Company

Madison Capital / Jeff Winick and Darrell Rubens, Winick Realty

The home improvement store signed a lease.

252 Atlantic Ave (Brooklyn)

26,407

Michael’s / Jeremy Isaacs, Ripco

Renaissance Realty Group / Barry Fishbach, RKF

The arts and crafts supply store signed a lease.

8000 Cooper Ave (Queens)

23,206

TJ Maxx/ Jeremy Isaacs and Esther Bukai, Ripco / n/a

WMAP, LLC. / Jeremy Isaacs and Esther Bukai, Ripco

The department store chain signed a 10-year lease.

910 Manhattan Ave

15,200

New York Sports Clubs / Diana D. Boutross, Winick Realty Group

B. Mangreen Properties / Diana D. Boutross, Winick Realty Group

The health club signed a lease.

1000 Dean Street (Brooklyn)

11,600

Crow Hill Crossfit / n/a

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

The fitness retailer is relocating and expanding.

132 Mulberry St

10,000

La Nonna, Paesano, Umberto’s Clam House and Pellegrino / n/a

n/a / Rob Frischman and Brett Weiss, EVO Real Estate Group

The four restaurants signed five-year leases.

4211 Broadway

10,000

Gap Factory Store / Ariel Schuster, RKF

n/a / n/a

The clothing company signed a lease.

1029 Third Ave

9,185

S&C Future aka Learning Express Toys / Charles Rapuano, Winick Realty Group

3rd & 60th Associates / Charles Rapuano, Winick Realty Group

The toy store signed a lease.

513 Broadway

9,100

True Religion / Brenda Wurtz, BW Retail Real Estate, Jason Pruger and Aaron Cukier, Newmark Grubb Knight Frank

513 Broadway LLC / Ariel Schuster, RKF

The fashion manufacturer is relocating from 132 Prince Street.

100 December 2014 www.TheRealDeal.com

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Retail leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

270 Madison Ave

7,900

Park Avenue Liquor / Paul Davidson and Gregg Gropper, Newmark Grubb Knight Frank

270 Madison Ave. Associates / John Brod and Mark Tergesen, ABS Partners

The liquor store signed a 15-year lease.

3 West 57th St

7,700

Kering Americas / Chris DeCrosta and Hank Oâ&#x20AC;&#x2122;Donnell, Crown Retail Services

El-Kam Realty Co. / Kelly Gedinsky, Winick Realty Group

The apparel company signed a lease.

100 Fifth Ave

7,400

Eddie Bauer / n/a

n/a / Ariel Schuster, RKF

The clothing company signed a lease.

740 Linden Blvd (Queens)

7,360

AutoZone / Richard Senior, Jeffrey Howard, Esther Bukai, Ripco

SB Realty No. 2, LLC / Richard Senior, Jeffrey Howard, Esther Bukai, Ripco

The auto service company signed a 10-year lease.

1536 Third Ave

7,075

Hu Kitchen / Jason Pennington and Zach Nathan, Ripco

Capital One, 1536 Third Avenue, LLC / Thomas Citron and Noah Birnbaum, Newmark Grubb Knight Frank

The restaurant signed a 15-year lease.

368 Bleecker St

7,000

James Perse / Christopher Owles and Sarah Shannon, Sinvin

Tamara Properties, Inc. and Gomidas Holding Corp. / Christopher Owles and Sarah Shannon, Sinvin

The fashion company signed a 10-year lease.

408 West 14th St

5,900

Boardriders / Corey Zilcinski and Patrick Smith, SRS Real Estate Partners

The Winter Organization / Ariel Schuster, Jackie Totolo, Benjamin Zack, RKF

The tenant signed a lease. It will be the Quicksilver concept storeâ&#x20AC;&#x2122;s first Manhattan location.

57 Greene St

5,650

n/a / n/a

n/a / Christopher Owles, Sinvin

The fashion company signed a lease.

10-12 Crosby St

5,400

Henrybuilt / Sarah Shannon, Sinvin

Madison Capital / Marc Simon and Josh Lewin, Isaacs & Company

The home furnishing store signed a 10-year lease.

21 West 38th St

4,465

Lucky Zone Design, LLC / Christine Traina, Douglas Elliman Real Estate

Brause Realty Inc. / Ron Zimmerman, Andy Udis, Ian Weiss, ABS Partners Real Estate

The fashion manufacturer signed a lease to occupy the 10th floor.

18 West 8th St

4,200

305 Fitness / Aaron Cukier and Tyler Scalzo, Newmark Grubb Knight Frank

Friedland Properties / n/a

The fitness center signed a lease.

101 Greene St

4,144

n/a / Michael Glanzberg, Sinvin

n/a / Christopher Owles, Max Talpalar, Sarah Shannon, Sinvin

The tenant signed a lease.

379 Fifth Ave

3,935

Mika Collections / Patty Holmstrom, Winick Realty Group

379 Fifth Avenue / Patty Holmstrom, Winick Realty Group

The apparel company signed a lease.

50 Laight St

3,919

50 Laight Street LLC, Mark Mohrmann / John Harrison, CORE

Laurel Capital / Roxanne Betesh, Sinvin

The architecture company signed a lease.

58 East 8th St

3,869

Fresh & Co. / Steven E. Baker, Winick Realty Group

Three Streets LLC / James Goldstick, Mark Greenberg Real Estate

The restaurant signed a lease.

501 Gateway Dr (Brooklyn)

3,500

AT&T / Steven E. Baker, Winick Realty Group

Related Companies / Steven E. Baker, Winick Realty Group

The wireless company signed a lease.

(718) 626-4400 | info@metpacproperties.com 102 December 2014 www.TheRealDeal.com

Retail leases continued Address

Size

Tenant / Representative

Landlord / Representative

Notes

76 Madison Ave

3,000

Exki / Alex Turboff and James Race, BCD

Centaur Properties / Alan Shmaruk and Michael Sherman, The Manhattes Group

The fast casual restaurant signed a lease for the ground floor and lower level. This will be the tenant’s second location in Manhattan.

204 East 38th St

2,900

Sons of Thunder / Rachel Kim, SGC Retail

204 East 38th Property LLC / Steve Rappaport and Margie Sarway, Sinvin

The restaurant signed a 10-year lease.

1140 Second Ave

2,800

Subway Inn / Ben Birnbaum and Mark Utreras, Newmark Grubb Knight Frank

301 East 60th Street, LLC / Jay Gilbert and Jansen Hafen, Newmark Grubb Knight Frank

The dive bar moved to a new location.

131 Thompson St

2,575

Hair Lounge / Polly Chang, Douglas Elliman

Village Rose LLC / Steve Rappaport and Margie Sarway, Sinvin

The hair salon signed a 10-year lease.

20 Pine St

2,500

Café Gallery LLC / Elliot Rackman, Rackman Realty

20 Pine Street Inc. / Darrell Rubens, Winick Realty Group

The bakery signed a lease.

234 Spring St

2,414

Estela / Casal Sanandres, Buckley Organization

Trinity Hudson Holdings LLC / Christopher Owles, Randy Kornblatt, Jonathan Isbitt, Sinvin

The salon and cosmetology school signed a 15-year lease.

300 Lenox Ave

2,400

Checkers / Matthew Schuss, Winick Realty Group

Fata Realty LLC / Matthew Schuss, Winick Realty Group

The restaurant signed a lease.

45 Eighth Ave

2,400

Soho Laundry and Cleaners, Inc. / Steve Rappaport, Sinvin

45-47-49 Eighth Avenue LLC / Steve Rappaport, Sinvin

The laundry company signed a 10-year lease.

41 West 24th St

2,325

Chop Shop Flatiron / n/a

n/a / Michael A. Azarian, Massey Knakal

The restaurant signed a lease.

256 West 116th St

2,300

7-Eleven / Elizabeth Martin, E.L. Martin Partners, LLC

Sugar Hill Capital Partners, LLC / Joshua Kaufman, Matthew Gorman, Joshua Gettler, New Street Realty Advisors

The convenience store signed a lease.

41 West 24th St

2,300

Chop Shop Flatiron / Steve Rappaport, Sinvin

Madison Park 24 LLC, c/o GJR, LLC / Michael Azarian, Massey Knakal

The restaurant signed a 15-year lease.

2519 Broadway

2,278

Capital One Bank / Tom Citron and Bob Gibson, Cushman & Wakefield

250 Tenants Corp. / Stu Morden and Ross Kaplan, Newmark Grubb Knight Frank

The bank signed a lease.

25 Central Park West

2,267

Valery Joseph Salon / Lori Shabtai, LHWS LLC

CPW Retail LLC / Steven E. Baker, Charles Rapuano, Winick Realty Group

The salon signed a lease.

317 West 13th St

2,200

Drybar Holdings LLC / Kim Walton, Ripco

317 West 13th Street LLC / Christopher Owles, Sinvin, Sarah Shannon, Cushman & Wakefield

The hair salon signed a 10-year lease.

2 Park Ave

2,150

Irmat Pharmacy / Arnold Gamberg, EVO Real Estate Group

n/a / Alisa Amsterdam, Cushman & Wakefield

The independently owned pharmacy signed a 16-year renewal lease.

1607 Westchester Ave (Bronx)

2,000

Burger King / Richard Senior and Isaac Shabot, Ripco

West Morrison Realty LLC / Richard Senior and Isaac Shabot, Ripco

The fast food chain signed a lease.

110 West 40th St

1,983

Vinci Suits / David Levy and Brett Maslin, Adams & Co.

One Ten West Fortieth Associated / David Levy and Brett Maslin, Adams & Co.

The men’s apparel company signed a five-year renewal lease.

455 Park Ave South

1,905

Mirage Kitchen / Yanni Marmarou, RKF

Pan Am Equities Inc. / Joshua Strauss and David Abrams, RKF

This restaurant signed a lease for its second location.

395 Flatbush Ave (Brooklyn)

1,831

H&R Block Eastern / Bill O’Brien, M. C. O’Brien, Inc.

Fulton Dekalb Associates / Zach Mishaan, Darrell Rubens, Matthew Schuss, Winick Realty Group

The financial services company signed a lease.

624 Madison Ave

1,742

Frey Wille / Robin Zendell LLC

Porsche Design / Michael Glanzberg and Sarah Shannon, Sinvin

The jewelry tenant signed a lease.

101 Maiden Ln

1,683

Juice Generation / Benjamin Birnbaum, Newmark Grubb Knight Frank

TF Cornerstone / Steven E. Baker, Aaron S. Fishbein, Winick Realty Group

The juice bar signed a lease.

4071 Broadway

1,550

Twin Pharmacy / Zach Diamond and Hal Shapiro, Winick Realty Group

Sunshine Capital / Zach Diamond, Hal Shapiro, Winick Realty Group

The pharmacy signed a lease.

1276 Lexington Ave

1,325

TD Bank / Joanne Podell, Cushman & Wakefield

1276 Lex Owner, LLC / Lee Block, Kelly Gedinsky, Winick Realty Group

The bank signed a lease.

3929 Broadway

1,200

S Wireless / Noel Caban and Steven E. Baker, Winick Realty Group

Royal Charter Pro / Brian Shadood, Halstead Properties

The wireless company signed a lease.

1701 Broadway

1,200

HBO / Joshua Siegelman, Winick Realty Group

Britannia 54th Ho / Joshua Siegelman, Winick Realty Group

The tenant signed a lease.

800 Second Ave

1,150

Chelsea Bagel / Matthew Schuss, Winick Realty Group

Philips International / Hal Shapiro, Winick Realty Group

The bagel bakery signed a lease for its second Manhattan location.

471 86th St (Brooklyn)

1,000

Cricket Wireless / n/a

n/a / Mitzi Flexer, Massey Knakal

The wireless company signed a lease.

177 Lafayette St

1,000

Dusica Dusica / P. Carrillo and R. Buckley, Keller Williams NYC

n/a / Brandon Singer and Joanne Podell, Cushman & Wakefield

The clothing and shoe designer signed a lease and is relocating.

1616 Amsterdam Ave

1,000

Nino’s y Oso / n/a

Sugar Hill Capital Partners, LLC / Joshua Kaufman, Matthew Gorman, Joshua Gettler, New Street Realty Advisors

The restaurant signed a lease.

505 Broome St

900

Michele Negri / Shaun Moamem, Plaza Real Estate Group

366 West Broadway LLC / Christopher Owles and Sarah Shannon, Sinvin

The fashion company signed a 10-year lease.

172 East 85th St

800

KeratinBar, Inc. / Jeffrey Sherpa, NYC Restaurant Realty Corp.

160-172 East 85th Street LLC / Steve Rappaport and Margie Sarway, Sinvin

The hair salon signed a 10-year lease.

101 Ludlow St

670

Hakki Deniz / David Haley, Misrahi Realty

101 Ludlow LLC / Steve Rappaport and Margie Sarway, Sinvin

The restaurant signed a 10-year lease.

206 Rivington St

600

Le Gourmet Parisien / Yesim Ak, Misrahi Realty

Lo-Ho LLC / Daniel Barcelowsky, Misrahi Realty

The pastry shop signed a lease.

186 Fifth Ave

370

Outlette Inc. / Melinda Miller, Winick Realty Group

186 Fifth LLC / Melinda Miller, Winick Realty Group

The apparel company signed a lease.

533 Third Ave

350

Voyage Salon / Steven Evans, Platinum Properties

Third Chris L.P. / Steve Rappaport and Margie Sarway, Sinvin

The salon signed a 10-year lease.

104 December 2014 www.TheRealDeal.com

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Retail leases continued Address

Size

Buyer / Representative

Seller / Representative

Notes

206 East 6th St

330

Yin Zuo Spa Inc. / Thomas Li, Suzuki Capital LLC

n/a / Dean Valentino, ABS Partners Real Estate

The spa signed a lease.

119 East 18th St

n/a

Javelina Tex-Mex LLC / n/a

Life Restaurant Group / Joshua D. Kaufman, New Street Realty Advisors

The restaurant signed a lease.

Buys Address

Size

Buyer / Representative

Seller / Representative

Notes

1740 Broadway

26-story, 601,000 sf

Blackstone Group / Darcy Stacom and Bill Shanahan, CBRE Group

Vornado Realty Trust / n/a

The property sold for $605 million, or $1,000 per square foot.

402-408 Lafayette St

151,000 sf

New York University / n/a

Ed Scheetz / n/a

The commercial building sold for $157 million.

345-353 West 38th St

256,250 buildable sf

McSam Hotel Group / n/a/

n/a / Bob Knakal, Jonathan Hageman, David Kalish, Massey Knakal

The development site sold for $112 million, or $400 per buildable square foot.

231 East 43th St

20-story hotel, 148-units

n/a / n/a

Magna Hospitality Group / n/a

The hotel sold for $71.9 million.

60 West 36th St

18-story hotel, 135-units

n/a / n/a

Magna Hospitality Group / n/a

The hotel sold for $63.3 million.

465-476 84th St, 2566 Ocean Ave, 1745 East 12th St, 1811 Quentin Road (Brooklyn)

4 apt bldg portfolio, 240,000 sf total

Landau Real Estate / Daniel Shragaei and Yosef Katz, GFI Realty

J. Halpern and Son / Daniel Shragaei and Yosef Katz, GFI Realty

The portfolio sold for $60.3 million.

11-12 30th Dr (Queens)

460,000 buildable sf development site

Criterion Group / n/a

Vernon Realty Associates / Adam Spies and Doug Harmon, Eastdil Secured

The property sold for $57 million.

110-112 Greenwich St

14-story, 6,6500 sf

The Torkian Group / Peter Hauspurg, David Schechtman, Lipa Lieberman, Abie Kassin, Eastern Consolidated, Mark Jaccom, Elyse SchindlerCandella, Cresa

110 Greenwich Street Associates / Peter Hauspurg, David Schechtman, Lipa Lieberman, Abie Kassin, Eastern Consolidated, Mark Jaccom, Elyse Schindler-Candella, Cresa

The property sold for $53 million.

555 West End Ave

7-story, 42,000 sf

n/a / Stan Putko, Orenda Estates

n/a / Bob Knakal and Hall Oster, Massey Knakal

The property sold for $50 million, or $1,190 per square foot.

27 East 61st St, 17 East 71st St

10,000 sf total

Acadia Realty Trust / n/a

n/a / Reba Miller, RP Miller Realty Group

The two properties sold for $47.3 million.

134-142 Bowery

5-bldg development site

n/a / Jan Sasson, E Property Group

n/a / n/a

The five properties sold for $45.3 million.

11-30 45th Rd, 45-35 11th St (Queens)

Development site

GDC Properties / Aaron Grumet, DY Realty

Eunhasu Corporation / Aaron Grumet, DY Realty

The two properties sold for $44 million.

601-607, 609-611 Eighth Ave

34,000 sf total

Ashkenazy Acquisition Corporation / n/a

Centurion Realty / n/a

The two properties sold for $40 million.

273-275 Fifth Ave

4-story and 5-story comm. bldgs

Victor Homes / n/a

Jackson Group and Rinel Realty / n/a

The properties sold for $35 million.

445 Fifth Ave

74,000 sf

New York Public Library / n/a

Church Pension Group / n/a

The property sold for $34.5 million.

102 Greene St

9,200 sf

SL Green Realty / n/a

BLDG Management / Jeffrey Fishman and Ross Berkowitz, RFK

The property sold for $32.2 million.

100 West 57th St

3-story comm. bldg

Time Equities and Hamlin Ventures / n/a

n/a / CORE

The property sold for $30.7 million.

139 North 10th St (Brooklyn)

38-unit apt.bldg

Clarion Partners / n/a

Greystone / Jeff Julien, Rob Hinckley, Andrew Scandalios, HFF

The property sold for $30.5 million.

66 Pearl St

6-story, 44,000 sf

Northwind Group / n/a/

n/a / Massey Knakal

The property sold for $30.1 million.

633 Third Ave

44,779 sf

The Community Service Society of New York / Geoffrey Newman, Newmark Grubb Knight Frank

Mount Sinai / Barry Zeller, Josh Kuriloff, John Serko, Cushman & Wakefield

The 10th floor of Time Equities building sold for $27.5 million.

609-615 Second Ave

4 mixed-use bldgs

Leser Group / n/a

Ely Sakhai / n/a

The four properties sold for $26.5 million.

2307 Broadway

12,000 sf

Waterbridge Capital / Doug Kleiman and Lee Spiegelman, Ripco Real Estate

2307 Broadway, LLC / Lee Spiegelman and Doug Kleiman, Ripco Real Estate

The property sold for $26 million, or $2,100 per square foot.

108 Charlton St

6-story, 37,000 buildable sf

n/a / n/a

Yuet Tom Lam Kong / n/a

The property sold for $26 million.

256 East 37th St, 2902 Cortelyou Rd, 3613 Avenue D, 414 East 34th St, 414 East 34th St (Brooklyn)

170 units total

n/a / David Berger, Rosewood Realty Group

n/a / Aaron Jungreis, Rosewood Realty Group

The properties sold for $24.1 million.

551 Waverly Ave

110,000 buildable sf

Madison Realty Capital / n/a

Broadway Equities R.E. LLC / n/a

The property sold for $23.5 million.

39 East 67th St

9,400 sf

Oliver Blevins Jr. / n/a

n/a / Anne Hargraves Hall and Matteo Mechelli, Stribling

The Scribner Mansion sold for $22.5 million.

163-05 Archer Ave (Queens)

720,000 buildable sf development site

Jamaica Tower LLC / n/a

Gertz Plaza Acquisition / n/a

The property sold for $22 million.

85 South St

8-story, 54,000 sf

Howard Hughes Corporation / n/a

Centurion Realty / n/a

The property sold for $20 million.

928-930 Second Ave

2 mixed-use bldgs, 50,000 buildable sf

Gould Investors / n/a

BLDG Management, City Urban Realty, Twin Oaks Equity / n/a

The two properties sold for $18 million.

249-253 East 50th St

12,288 sf total

Daw Khin Su Limited Partnership / Lynda Blumberg and Amit Doshi, Besen & Associates

E 50th Street Realty LLC / Hilly Soleiman, Besen & Associates

The three properties sold for $17 million.

304-306 Canal St

5-story, 14,000 sf

Vornado Realty Trust / n/a

Tae 304, LLC / n/a

The property sold for $16.4 million.

3224 Grand Concourse (Bronx)

5-story, 116-units total

n/a / Aaron Jungreis, Rosewood Realty Group

n/a / David Berger, Rosewood Realty Group

The property sold for $16.3 million.

672 Saint Nicholas Ave

6-story, 48-units

Shamah Properties / Peter Vanderpool and Lazer Sternhell, Cignature Realty

672 Saint Nicholas Ave. LP / Peter Vanderpool and Lazer Sternhell, Cignature Realty

The property sold for $13.5 million.

88 Schermerhorn St (Brooklyn)

33,330 buildable sf

Heights Realty Advisors and Rockwood Capital / n/a

88 Schermerhorn, LLC / Sean Kelly, CPEX

The property sold for $11 million, or $330 per buildable square foot.

1030 Carroll St (Brooklyn)

6-story, 47-units

n/a / David Scheer, Rosewood Realty Group

n/a / Aaron Jungreis, Rosewood Realty Group

The property sold for $10.7 million.

2454 & 2500 Webb Ave (Bronx)

2 5-story apt. bldgs, 93-units

n/a / Aaron Jungreis, Rosewood Realty Group

n/a / David Berger, Rosewood Realty Group

The two properties sold for $10.5 million.

106 December 2014 www.TheRealDeal.com

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Buys continued Address

Size

Buyer / Representative

Seller / Representative

Notes

432-434 West 163rd St, 612-618 West 182nd St

3 bldg portfolio, 45,543 sf

n/a / Victor Sozio, Shimon Shkury, Michael A. Tortorici, Josh Berkowitz, Marko Agbaba, Ariel Property Advisors

n/a / n/a

The portfolio sold for $10 million.

417-419 East 74th St

6-story mixed-use bldg, 12,612 sf

n/a / Peter Von Der Ahe, Scott Edelstein, Joseph Koicim, Seth Glasser, David Lloyd, Daniel Handweiler, Marcus & Millichap

The property sold for $9.4 million.

8806 Parsons Blvd (Queens)

4-story, 60-units

n/a / Aaron Jungreis, Rosewood Realty Group

The property sold for $9.4 million.

720 West 172nd St

6-story, 32-units, 36,125 sf

Barberry Rose Management / n/a

David Tseng / Matthew Sparks and Abram G. Bernstein, Eastern Consolidated

The property sold for $8.5 million.

42-54 Judge St (Queens)

6-story, 32,550 sf, 41-units

Margules Properties / Shoy McKen, Besen & Associates

Almoros Realty Corporation / Steven Westreich, C3 Realty, Shoy McKen, Besen & Associates

The property sold for $7.8 million, a 4.35 percent capitalization rate, and $241 per square foot.

242, 244, 246, 248 Bainbridge St (Brooklyn)

4 apt. bldgs, 32-units

n/a / Michael Guttman, Rosewood Realty Group

n/a / Michael Guttman and Aaron Jungreis, Rosewood Realty Group

The four properties sold for $7.8 million.

151-153 West 133rd St

32 units

n/a / Aaron Jungreis, Rosewood Realty Group

The property sold for $7.6 million.

74 Kent St (Brooklyn)

3-story warehouse, 17,845 sf

Leeds United Construction Group LLC / n/a

n/a / Jacob Tzfanya and Christopher Burti, CPEX

The property sold for $7.5 million, or $420 per square foot.

244 Front St

6-story, 15,765 sf

n/a / n/a

n/a / Will Suarez, James Nelson, Mitchell Levine, Massey Knakal

The property sold for $7.2 million.

9-11, 25-27 Vermilyea Ave

50 units

n/a / Aaron Jungreis, Rosewood Realty Group

The two properties sold for $7 million.

46 Old Fulton St

4-story, 17,864 sf

n/a / Ofer Cohen, Melissa Warren, Dan Marks, Peter Matheos, Michael Hernandez, Joey Terzi, TerraCRG

The property sold for $6.7 million, or $375 per square foot.

184-190 Nagle Ave

5-story, 48-units

n/a / David Berger, Rosewood Realty Group

n/a / Aaron Jungreis, Rosewood Realty Group

The property sold for $6.7 million.

307 East 85th St

5-story, 9,6235 sf

n/a / Peter Von Der Ahe, Joseph Koicim, David Lloyd, Daniel Handweiler, Marcus & Millichap

The property sold for $6.4 million.

250 East 91st St

5-story, 20-units

n/a / David Moshe, Rosewood Realty Group

n/a / Sam Zagoren, Rosewood Realty Group

The property sold for $6.1 million.

313 East 92nd St

5-story, 8,540 sf, 10-units

n/a / Glenn Raff, Alpha Realty

Ropa Realty LLC / Amit Doshi and Ishan Chhabra, Besen & Associates

The property sold for $6 million, a 2.17 percent capitalization rate, and $703 per square foot.

43-19-23 Bell Blvd (Queens)

22,000 buildable sf

n/a / n/a

n/a / Stephen R. Preuss, Massey Knakal

The property sold for $5.5 million, or $252 per buildable square foot.

113 Stanton St

5-story, 5-units total

n/a / Ryan Perkoski, Rosewood Realty Group

n/a / Samuel Zagoren, Rosewood Realty Group

The property sold for $5.2 million.

2075-2081 Wallace Avenue

77 units

n/a / Aaron Jungreis, Rosewood Realty Group

The property sold for $5.2 million.

268 Water St

3-story, 2-units, 5,544 sf

n/a / n/a

n/a / Michael DeCheser, Massey Knakal

The property sold for $5 million.

491 West 22nd St

5-story, 4,150 sf

n/a / n/a

n/a / Brock Emmetsberger, Massey Knakal

The property sold for $4.9 million, or $1,178 per square foot.

225 East 30th St

4-story, 6-units, 4,396 sf

n/a / John F. Ciraulo and Hunter Moss, Massey Knakal

The property for $4.8 million, or $1,084 per square foot.

1917 Avenue O (Brooklyn)

28-unit apt. bldg

n/a / Derek Bestreich, Lucien Sproviero, Erik Rodriguez, Marcus & Millichap

The property sold for $4.8 million.

703 Carroll St

8-units, 8,800 sf

Berkeley Carroll School / n/a

Mosad and Yahya Almontaser / Brian Leary and Stephen Safina, CPEX

The property sold for $4.6 million.

61-65 Adrian Ave

6-story, 32-units

n/a / Aaron Jungreis, Rosewood Realty Group

The property sold for $4.5 million.

1231 Sheridan Ave (Bronx)

5-story, 54-units

n/a / David Berger, Rosewood Realty Group

n/a / Aaron Jungreis, Rosewood Realty Group

The property sold for $4.5 million.

680-681 Melrose Ave (Bronx)

2 5-story, 27-units total

n/a / Aaron Jungreis, Rosewood Realty Group

The two properties sold for $4.5 million.

195 Bowery

1,600 sf

Thor Equities / Tom Brady, Town

Bowery B LLC / Robert Allyn, Town

The property sold for $4 million.

128 West 23rd St

4-story, 5,520 sf

n/a / n/a

n/a / Brock Emmetsberger and Paul Smadbeck, Massey Knakal

The property sold for $4 million, or $734 per square foot.

1730-1736, 1738 Sheepshead Bay Rd (Brooklyn)

5-units total

n/a / Aaron Jungreis, Rosewood Realty Group

The two properties sold for $4 million.

1516-1532 Park Ave

35,419 buildable sf development site

n/a / Michael A. Tortorici, Victor Sozio, Shimon Shkury, Marko Agbaba, Ariel Property Advisors

The property sold for $3.8 million.

422 St. Nicholas Ave

5-story, 10-units, 11,105 sf

n/a / Victor Sozio, Michael A. Tortorici, Shimon Shkury, Ariel Property Advisors

The property sold for $3.3 million.

801 Manhattan Ave (Brooklyn)

3-story, 3,850 sf

n/a / Mark L. Lively and Brendan T. Maddigan, Massey Knakal

The property sold for $2.7 million, or $701 per square foot.

157 Daniel Low Ter (Staten Island)

4-story, 38-units

n/a / Marcel Fridman, Barcel Group

The property sold for $2.7 million.

208 West Fordham Rd, 2443 Cambreleng Ave (Bronx)

4-story, 18,184 total, 28-units

n/a / Amit Doshi, Besen & Associates

208 Fordham Associates LLC & Queens Holdings 2009 LLC / Amit Doshi, Besen & Associates

The two properties sold for $2.2 million, or a 7.0 gross rent multiplier, a 2.75 percent capitalization rate, and $121 per square foot.

39-26 Bell Blvd (Queens)

2-story, 2,800 sf

n/a / n/a

n/a / Stephen R. Preuss, Massey Knakal

The property sold for $1.9 million or $450 per buildable square foot.

108 December 2014 www.TheRealDeal.com

Buys continued Address

Size

Buyer / Representative

Seller / Representative

Notes

359 7th St (Brooklyn)

4,100 buildable sf development site

n/a / n/a

n/a / Mark Spinelli, Michael A. Tortorici, Daniel Tropp, Jonathan Berman, Ariel Property Advisors

The property sold for $1.9 million.

87 Montrose Ave (Brooklyn)

5-unit apt. bldg

n/a / Shaun Riney, James Saros, Michael Salvatico, Aryaan Azarbarzin, Marcus & Millichap

The property sold for $1.9 million.

731 Meeker Ave (Brooklyn)

8,800 sf

n/a / Shaun Riney, Michael Salvatico, James Saros, Marcus & Millichap

The property sold for $1.8 million.

208 Hoyt St (Brooklyn)

3,500 sf

n/a / Jason Silverstein and David Shorenstein, Silvershore Properties

The property sold for $1.7 million.

70 New York Ave (Brooklyn)

8-unit apt. bldg

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

The property sold for $1.7 million.

377 Manhattan Ave (Brooklyn)

6-unit apt. bldg

n/a / Shaun Riney, Michael Salvatico, James Saros, Marcus & Millichap

The property sold for $1.6 million.

949 Pacific St (Brooklyn)

Development site

n/a / n/a

n/a / TerraCRG

The property sold for $1.6 million.

55 Maspeth Ave (Brooklyn)

6,402 buildable sf development site

n/a / Mark L. Lively and Brendan T. Maddigan, Massey Knakal

The property sold for $1.5 million, or $230 per buildable square foot.

590 Bushwick Ave (Brooklyn)

5,500 sf

n/a / Jason Silverstein and David Shorenstein, Silvershore Properties

The property sold for $1.3 million.

166 35th St (Brooklyn)

4-unit apt. bldg

n/a / Jakub Nowak and Mark Lu, Marcus & Millichap

The property sold for $1.3 million.

50 St. Nicholas Ave

3-stort, 6-units

n/a / David Scheer and Mike Kerwin, Rosewood Realty Group

n/a / Bedford 6

The property sold for $1.3 million.

121 Irving Ave (Brooklyn)

6-unit apt. bldg

n/a / Bart Zimmerman, Bracel Group

n/a / Marcel Fridman, Barcel Group

The property sold for $1.2 million.

188 Suydam St (Brooklyn)

6-unit apt. bldg

n/a / Marcel Fridman, Barcel Group

The property sold for $1.2 million.

232 Stanhope St (Brooklyn)

6-unit apt. bldg

n/a / Marcel Fridman, Barcel Group

The property sold for $1.2 million.

930 Hart St (Brooklyn)

6-unit apt. bldg

n/a / Shaun Riney Thomas, Shihadeh, Dan Greenblatt, Marcus & Millichap

n/a / Shaun Riney, Thomas Shihadeh, Dan Greenblatt, Marcus & Millichap

The property sold for $1.2 million.

209 East 111th St

4-story, 3,036 sf

n/a / n/a

n/a / Lev Kimyagarov, Massey Knakal

The property sold for $1.2 million, or $412 per square foot.

188 8th St (Brooklyn)

4-story, 4-units

n/a / Michael Guttman, Rosewood Realty Group

The property sold for $1.2 million.

690 East New York Ave (Brooklyn)

2-story, 6-units total

n/a / Yehuda Wolfset and Michael Guttman, Rosewood Realty Group

n/a / Michael Guttman, Rosewood Realty Group

The property sold for $1.2 million.

646 46th St (Brooklyn)

6-unit apt. bldg

n/a / John Brennan, Marcus & Millichap

The property sold for $1.1 million.

17-34 Menahan St (Queens)

5-unit apt. bldg

n/a / Marcel Fridman, Barcel Group

The property sold for $1.1 million.

68 Washington Ave (Brooklyn)

7-units

Thor Equities / n/a

n/a / Andre Sigourney and Harrison Balisky, CPEX

The property sold for $900,000, or $493 per square foot.

Financing Address

Size

Borrower / Representative

Lender / Representative

Notes

520 Park Ave

51-story condo

Zeckendorf Development / JLL

Childrenâ&#x20AC;&#x2122;s Investment Fund Management / n/a

A $450 million construction loan was arranged for the building.

625 West 75th St

43-story, 750-units

The Durst Organization / n/a

Bank of New York Mellon and Wells Fargo / n/a

A $411.5 million mortgage with a four-year term and one-year extension option was arranged for the building.

606 West 57th St

42-story, 992,938 sf

TF Cornerstone / n/a

Wells Fargo, M&T Bank, Helaba / n/a

A $384 million mortgage with a four-year term and option to extend was arranged for the building.

389 East 89th St, 385 First Ave

2 hotels

Magnum Real Estate / JLL

RCG Longview / n/a

Two mortgages totaling $270 million were arranged for the hotels.

160 West 62nd St

54-story, 339-units

Glenwood Management / n/a

New York State Housing Finance / n/a

A $260 million mortgage was arranged for the building.

363-365 Bond St (Brooklyn)

12-story, 424-units

The Lightstone Group / Drew Anderman, Meridian Capital Group

Canyon Capital Realty Advisors / n/a

A $120 million, 30-month construction loan was arranged for the building.

55 Water St (Brooklyn)

400,000 sf

Midtown Equities / n/a

M&T Bank Corporation / n/a

A $95 million construction loan was arranged for the building.

2 Gansevoort St

6-units

The William Kaufman Organization / Andrew J. Singer, The Singer & Bassuk Organization LLC

M&T Bank Corporation / n/a

A $50 million first mortgage was arranged for the building.

25 Greenwich St

77-story, 128-units, 10,600 sf

Shvo and Bizzi & Partners / Carlton Group

Dilip Shanghvi / n/a

A $40 million investment was arranged for the building.

333 Greene St (Brooklyn)

12-story, 56-units

Bonjour Capital / Shaya Sonnenschein, Eastern Union Funding

Mercantile Bank / n/a

A $26 million long-term mortgage was arranged for the building.

200 East 16th St

182-unit co-op

200 East Street Housing Corp. / n/a

NCB / n/a

An $11.6 million first mortgage and a $1 million line of credit were arranged for the cooperative.

411 West End Ave

100-unit co-op

411 West End Avenue Owners Corp. / n/a

NCB / n/a

A $6.8 million first mortgage and a $1 million line of credit were arranged for the cooperative.

1100 Grand Concourse (Bronx)

70-unit co-op

1100 Concourse Tenants Corp. / n/a

NCB / n/a

A $1.4 million line of credit was arranged for the cooperative.

227 East 12th St

16-unit co-op

227 East 12th Street Owners Inc. / n/a

NCB / n/a

A $450,000 first mortgage and a $300,000 line of credit were arranged for the cooperative.

613 East 6th St

13-unit co-op

613 East 6th Street Owners Corp. / n/a

NCB / n/a

A $285,000 first mortgage and a $100,000 line of credit were arranged for the cooperative.

140 East Second St (Brooklyn)

113-unit co-op

Lincoln Park Manor Tenants / n/a

NCB / n/a

A $275,000 line of credit was arranged for the cooperative.

110 December 2014 www.TheRealDeal.com

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6/27/14 10:30 AM

Other Deals High 5 Games takes 88,000 sf at One WTC

One World Trade Center

High 5 Games is moving into One World Trade Center. The game developer and operator of the biggest social casino on Facebook signed a 15-year lease for 87,663 square feet on the 58th and 59th floors of the tower. The company, currently located at Vornado’s 770 Broadway, is expected to move during the second quarter of 2015, according to the Wall Street Journal. The creator of hit games “Golden Goddess” and “Black Widow” had a short-term lease at the Vornado property in the space that is now occupied by Facebook. One World Trade anchor tenant Condé Nast started its move to the building earlier this month and has garnered new interest from prospective tenants. The building, co-owned by the Durst Organization and the Port Authority of New York and New Jersey, is now 61 percent leased, the newspaper reported. (The deal was announced after the deadline for the Deal Sheet.)

Ashkenazy, Centurion snag retail in Nolita for $40M Ben Ashkenazy’s Ashkenazy Acquisition Corporation and Ralph Tawil’s Centurion Realty jointly paid $40 million for a three-level retail condominium at the base of a nine-story apartment building in Nolita, The Real Deal has learned. The 30,000-square-foot retail component at 285 Lafayette Street — near Jersey Street and just south of Jared Kushner’s Puck Building — is home to seven tenants. The New York Public Library’s Mulberry Street branch occupies 16,100 square feet across three floors, under a lease deal expiring in 2021. Other tenants include cosmetics retailer Santa Maria Novella and clothier American Ben Ashkenazy Apparel, which is due to vacate its 7,000-square-foot space by early next year. Matthew Marshall of Marshall Real Estate represented both the buyers and the seller, veteran developer Richard Hadar of Richard Hadar Funding. Ashkenazy is planning a long-term hold on the retail spaces, Daniel Levy, partner at the development firm, told TRD. (The deal was announced after the deadline for the Deal Sheet.)

NBA to open store in Joseph Moinian’s 545 Fifth Avenue The National Basketball Association is moving into a sprawling new space at 545 Fifth Avenue. The first floor of the nearly 24,000-square-foot space in the Moinian Groupowned building has 76 feet of frontage along Fifth Avenue, as well as 80 feet on East 45th Street, according to the New York Post. The second floor has 149 feet of frontage on East 45th, which is a commuter side street that leads to Grand Central Terminal. A Starbucks that is currently located on 545 Fifth Avenue the Fifth Avenue side of the building will have to be moved to East 45th Street, the newspaper reported. Newmark Grubb Knight Frank reportedly represented the NBA. The NBA store has been located at 590 Fifth Avenue since 2011. The move there came after the league scored a $15.2 million payout for its former location at 666 Fifth Avenue. (The deal was announced after the deadline for the Deal Sheet.)

In at $8M, out at $46M — just three years later

29-37 41st

Avenue A Queens-based developer who bought a prime Long Island City site for $8 million three years ago flipped the property for nearly six times that amount. Developer Steve Cheung closed last month on the $46.3 million sale of the site at 29-37 41st Avenue in the Queens Plaza section of Long Island City. The buyer is an unidentified institutional investor. The site has a buildable square footage of roughly 205,000 square feet and comes with approvals for a 30-story residential tower with 242 units. Cheung was represented by Joseph Stern of Jay Street Advisors, who said rising land prices in Long Island City made the decision to sell a no-brainer. (The deal was announced after the deadline for the Deal Sheet.)

SELECT LISTINGS

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112 December 2014 www.TheRealDeal.com

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Development updates

SELECT LISTINGS Sales updates

Flatiron

21 West 20th Street

space including a covered patio and private elevator. Storage is available in the building, which has a virtual doorman. Contact: www.53greene.com.

Carroll Gardens 345 Carroll Street

Initial sales are complete at the 13-unit 21W20, developed by Gale International. Prices for the nine two-bedroom, 1,302-square-foot residences ranged from $2.5 million to more than $3.1 million. These floor-through units are directly accessible by elevator and feature openplan living and dining room areas. The four penthouse homes are expected to go on the market in early 2015; these units will range in price from $12 million to $23 million. Each apartment includes floorto-ceiling south-facing windows and glass terrace doors. The building’s amenities include a 24-hour doorman, outdoor garden, grocery delivery and bicycle storage. Halstead is handling marketing. Contact: www.21w20.com.

Midtown 325 Lexington Avenue

The 31-story luxury condominium tower 325 Lex is over 25 percent sold, including one of its two full-floor penthouses. The building also features studio, one- and twobedroom residences. Available studios start at $805,000; the remaining 3-bedroom penthouse is $8.25 million. Building amenities include a 24-hour doorman, resident center, private roof deck and a 421a tax abatement. Closings will begin in the first quarter of 2015. Corcoran is handling sales. Contact: www.325lex.com.

The luxury condominium building at 345 Carroll Street in Brooklyn’s Carroll Gardens is over 40 percent sold. Eighteen of the 32 homes have private outdoor space; units are a mix of two- to four-bedroom apartments and range in size from 1,200 square feet to 3,000 square feet. Prices start at $1.69 million and rise to nearly $4 million for the penthouses. Building amenities include a doorman, superintendent and porter services, playroom, roof terrace, fitness center, and a 5,300-square-foot garden. Contact: www.345carroll.com.

Elmhurst 87-10 51st Avenue Seventy-nine newly redeveloped homes have debuted in the 153unit cooperative Continental Park building. The units include studios as well as one-, two-, and three-bedroom homes. The studios, at approximately 500 square feet, start at $185,000; the three-bedrooms, approximately 1,200 square feet, start at $509,000. The Continental Park features a gated entry and a private, landscaped interior. The developers have added a playground, fitness center and residents’ lounge. Contact: www.thecontinentalpark.com. Leasing updates

Chelsea

245 West 25th Street

Soho 53 Greene Street

Three of the five units at the six-story 53 Greene, developed by AORE Holdings, have sold. Units are a mix of two- and threebedroom apartments, ranging from 2,771 square feet to 3,510 square feet. Prices started at $6.34 million. The second floor has not been released. Recently relaunched was the $14.05 million, three-bedroom penthouse, with 2,067 square feet of outdoor 114 December 2014 www.TheRealDeal.com

Leasing has launched at the Arthur, a six-story pre-war building converted by Studio V Architecture. The classic Art Deco building features 68 one- and twobedroom apartments ranging from $4,200 to $4,950. Units feature 9-foot ceilings and hardwood floors. The building features a 24hour doorman, fitness center and rooftop lounge. It is pet-friendly and provides bicycle storage. Naftali Group is handling leasing. Contact: www.thearthurnyc.com. Compiled by Brendan O’Connor

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“I worked on this with my brother Eric. It’s nice that we were able to work together. Oddly enough, this came through a referral from one of my old roommates. This woman, we had actually met with her over a year ago, she wanted to sell her home, a small little space. I said, ‘Well, if it were up to me, let’s bring it up to the top selling condition.’ I made some recommendations — kitchen, bathroom. My brother makes fun of me, he says I never see an apartment without wanting to blow out a wall. She did that with the kitchen. She took into account the recommendations we made, got back in touch a few months later and told us she was ready to sell. We knew we were competing with other, similar homes, but nothing was ready to go. The work she had done generated interest from people who didn’t want to do work themselves. Any place that I go into — unless it’s an über-high-end, sealed-off kitchen — I like the kitchen to be open. I like there to be a little breakfast bar. A lot of those recommendations, she said, she wish she’d done earlier, and she’s applying them to the new place that she bought.” Jason Penner

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116 December 2014 www.TheRealDeal.com

Two-bedroom, two-bathroom, 1,200square-foot, fully-renovated co-op in the John Murray House. Apartment features custom molding and hardwood herringbone floors. Built in 1940. 24hour doorman. Maintenance: $2,403

per month, 62 percent tax deductible. Asking price: $1,395,000. 14 weeks on the market. (Broker: Peggy Dahan, the Siderow Residential Group.) “The apartment was completely renovated. It’s magnificent. There is a wireless speaker system and windows in the bathroom, kitchen, and closets. This was the easiest deal I ever closed — the buyer came to the open house, and his wife came the next day. I was the broker on both sides. I wish all my deals were this easy.” Peggy Dahan

Battery Park City $3,650,000 10 West Street, #23A

Three-bedroom, three-and-a-half bathroom, 1,944-square-foot condo in the Residences at the Ritz Carlton. Unobstructed views of New York Harbor, the Statue of Liberty and Hudson River. Brazilian cherry herringbone flooring. Amenities include private chef ’s in-home dining, daily housekeeping and in-home massage. Built in 2001. Full-time doorman and concierge. Asking price: $3.65 million. Maintenance: $2,383 per month. Taxes: $2,008 per month. 4 weeks on the market. (Brokers: Jackie Chan-Brown, Citi Habitats; Michael Mei, Block and Lot Realty.) “The view is what sold this place. The buyer came on the second showing. At the first showing, we had two customers; at the second, three people came to see it. One of the customers at the second showing, right there and then in the apartment, gave an offer — cash. I told them we were holding off for full price. Back and forth, back and forth, for a half an hour. The whole family was there, in the dining room, looking out at Lady Liberty and the Hudson River. After almost an hour, they gave us the full offer. We actually, later, got a higher offer, a much higher offer. The tenants are very moral people — I told them about the higher offer, but they honored the deal with the first buyer. They wanted to be fair. And also the buyer offered cash. We closed in record time, and had it approved in record time. The first buyer was purchasing for primary residence: they wanted to live in it. The second buyer was an investor. He knew that there was a contract out, he knew he had to come in higher, and he did, but we honored the first one.” Jackie Chan-Brown Compiled by Brendan O’Connor

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RE:CAP

A roundup of real estate-related happenings last month COMPILED BY ANN IMPERATORE

LUXE Developer Ofer Yardeni warns: the residential market is in a bubble that is about to pop! Also, called the High Line “completely overrated.”

Spotted in an UES Gristedes: Real estate developer/billionaire John Catsimatidis’ promotional bottled water from his 2013 NYC Mayoral run, being pulled out as an out-of-date product. We thought Trump had the RE-water market nailed.

This garden’s no party: Massive opposition to Frick expansion — due to proposed destruction of the Russell Page-designed Viewing Garden and the Reception Hall Pavilion, as well as the added construction of a 106-foot-high addition, equivalent to an 11-story building, in its place ... Guess the grass might remain greener on the other side.

Real Estate Marketing Blog (RealEstateMarketingBlog.org) suggests agents allow potential buyers to “try before they buy” a property, by making it an Airbnbtype situation, allowing prospective buyers to indulge in a slumber party at the listing.

Many of NYC’s biggest real estate players honored beloved Cushman & Wakefield broker Glenn Markman — a leading advocate for Brooklyn’s growth — upon his untimely passing, at his recent funeral.

Billions near Bryant Park — Ivanhoe Cambridge to buy Blackstone’s 1095 Sixth Avenue for $2.25B — the priciest sale of a single building since the GM building traded in 2008 for $2.8B.

Two paws up! The launch party for the firstever onsite 9,000-square-foot pet services amenity, known as The SPOT Experience (see what they did right there?) at Silver Towers at 620 West 42nd Street had everything. This BYOD event (Bring Your Own Dog) included: attendance by 102 people and 26 dogs, treats, prizes & animals up for adoption...

Pier 55 gets $130M bid to create a Fantasy Island, which will feature entertainment “programmed” by top showbiz talent led by Oscar-winning producer Scott Rudin.

Speaking of voyeurs and “private acts in bathrooms,” pay $8,000 a month to live at 14 E. 4th Street with a transparentwalled bathroom. Agent Natasha Zhuravsky of Citi Habitats: “The view is stunning!! … And available for private viewings.” We bet it is … on both counts. Ryan Serhant launches Upper East Side’s newest boutique condominium, 554 East 82nd Street, anchored by Carl Schurz Park and Gracie Mansion, on a MDLNY taping, with the maisonette already in contract!

WIN

FAIL

Idea #1: Let Them Try Before They Buy

Even though we are pretty sure “quant” can’t be used as a verb.

Little-known NYC cult, Congregation for the Light — dubbed the “Cult Next Door” — exposed at 160 E. 35th St. Worst part? Multi-million-dollar property is totally tax-exempt! Talk about selling one’s soul to the devil, deluxe real estateedition!

Can’t keep our eyes off this nerdy, yet fascinating Tumblr called “I Quant NY” at iquantny.tumblr.com. Says the site: “Every data set that the city releases tells a story. This blog is all about telling those stories, one data set at a time.”

Landlord installs cam to spy on tenant. Michel Kadoe — one of the two defendants named in the suit — denied the allegations, which included gathering at least 70 videos with hidden cameras of the young tenant involved in private acts in her bedroom and bathroom.

...and an appearance from Benjy Bronk (a SPOT client) and Elisa Jordana, both from the Howard Stern Show.

But the racy agent head shot by Zhuravsky (former Rookie of the Year) though!

In other “animals gone wild” news, pets continue to photobomb listings … and we love it. Everyday is #caturday in this lovely 135 Hicks Street library pic from Urban Compass.

Tenant rents 1,600 square foot 2-bedroom duplex WITH A BACKYARD in the West Village for only $10/mo … and is now accused in a suit of tricking his dementia-addled landlord at 12 Minetta St. into a 50-year lease.

TRD launches Instagram page

Record 500+ pack MSG Theatre for “Real Estate Fight Night” — a mixed martial arts event hosted by Kensington Vanguard, Sahara Group and Alto Investments — to cheer on real estate pro and amateur Muay Thai master Chris Kwiatkowski of J.D. Carlisle.

These literal low-rent signs on poles throughout York Avenue from Keller Williams. These Rapid Realty-inspired tattoos.

Preet Bharara saves woman and her pit bull from eviction: The East River Housing management company had hoped to boot the mentally ill Grand Street resident and her service animal, but apparently they had barked up the wrong tree.

LOW RENT 118 December 2014 www.TheRealDeal.com

L+M Development, Bell Urban, HPD, HDC and partners celebrate the opening of Utica Place — 100 percent affordable housing for veterans and families in Crown Heights; the $26.5 million development will provide 87 new homes for low-income families, including 26 units for U.S. vets.

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Western Soho

from page 41

fix up), 1 Soho Square, whose landlord is the team of Stellar Management and Rockpoint Group, has several components. The first is No. 161, a 13-story brick Beaux-Arts building known as the Butterick Building, where dressmaking patterns were once printed. In more recent years, it was known for its ground-floor tenant, a large Janovic paint store. Completed in 1903, the building is being upgraded as part of the development plan, and an additional retail tenant will be added on the north side, though Janovic will stay put. The other main section is No. 233, an industrial 1926 building that’s also getting revamped with the addition of three penthouse levels, for a total of 13 stories. The building will also feature 10 terraces, reachable directly from offices through tall glass doors. Aveda, the beauty products company, will relocate from the ground level to 20,000 square feet on the second floor, which will allow the complex to boost its retail offerings. A half-acre of shared outdoor space will also be installed on the roof. Going up between the two main buildings, in a former loading dock area, is a 19-story glass tower that will contain elevators; existing elevator space will be converted to offices. The sandwiched-in structure will also contain a new, two-story lobby. All told, there will be 768,000 square feet of office in the two revamped buildings, said Jodi Roberts, a director at Cushman & Wakefield in charge of leasing. About half of that is leased, including several existing tenants that are remaining. New tenants include the eyeglass company Warby Parker, which will move from the Puck Building in Soho to a three-floor, 80,000-square-foot space at No. 161 and is already partly in place. Asking rents at 1 Soho Square, which will be completed in January 2016, are about $70 a foot for offices without a terrace, and $80 a foot for space for those with a terrace, Roberts said. In contrast, Trinity Real Estate, the arm of downtown’s Trinity Church that owns most of Hudson Square, was asking $75 a foot at 1 Hudson Square at 75 Varick Street — Trinity’s priciest tower — in mid-November. Yet tech, fashion and hedge-fund tenants will likely fork over extra for 1 Soho Square’s amenities, Roberts said. “I think outdoor space is just incredibly in demand these days,” she said. “It’s all part of trying to make the workplace more fun.”

6. 452 West Broadway Thor Equities, a major Soho landlord with several properties along Broadway and Greene streets, is also getting into the action to the west. Earlier this year, Thor, whose chief executive is Joe Sitt, paid $6 million for this 2,200-square-foot building near Prince Street. The narrow three-level building, which has huge windows, is now for lease for about $370 a square foot. Since the 1990s, it contained a boutique called Philosophy, which offered lower-cost fashion from designer Alberta Ferretti. The retail mix is changing on West Broadway, which was also known for being a slightly down-market cousin to Soho’s eastern blocks, said Grace Yang, a Thor leasing agent. Moleskine, the stationery company, has an outpost; as does Leica, the German camera-maker. Ladurée, a pastry shop, opened a few months ago, at No. 398, where Barolo Ristorante had been before. “It’s not quite as commercialized with national chains like Broadway,” said Yang, who added that the condos and offices would help generate customers. “Any time you add new bodies to the neighborhood, it’s good.” 7. 402 West Broadway A recent deal at this space may let the air out of West Broadway’s claims to affordability. DSquared2, a cutting-edge fashion company owned by twin brothers Dean and Dan Caten, inked a lease at this well-kept corner brick building for $750 a square foot, a neighborhood high, brokers say. The space, which has yet to open, spans three levels and 2,200 square feet. Sarway, of Sinvin, which represented the building, said it’s not like West Broadway lacks chains — DSquared2 has many stores around the world. However, she said, “they are higher-end and more international.” 8. 54 MacDougal Street Most of Soho is protected by a historic district; another, the Charlton-King-Vandam district, covering the western side of Avenue of the Americas, keeps other blocks offlimits to development. It may be expected, then, that developers have zeroed in on the few parcels in between the two districts where structures can be torn down. One, at No. 54, had for years contained a three-story brick building; it was also staged to look like a jewelry store in the movie “Men in Black.”

In 2013, it met the wrecking ball. Ajax Investment Partners, the site’s owner, plan to put up a five-story apartment building, with four units and no retail, according to a filing with the Buildings Department. With permits in place, it’s to break ground this winter, according to a source close to the project. An effort in recent years to landmark nearby blocks to stave off demolitions has been successful; the City Council approved two of three phases of the South Village landmark district. The third, which might have included No. 54, is now before the chair of the Landmarks Preservation Commission, according to Andrew Berman, the executive director of the Greenwich Village Society for Historic Preservation, which has pushed for the designations. 9. 101 Avenue of the Americas An early bet by Edward J. Minskoff Equities that Sixth is more than just connective tissue between other, better neighborhoods may be paying off at this 23-story tower near Canal Street. In 1991, Minskoff and partners constructed the building, which for decades had a single tenant, Local 32BJ of the Service Employees International Union. That union, though, moved out in 2011, around the time Minskoff bought out his partner, the Andalex Group, to take sole ownership of the building, which then underwent a $35 million renovation. Today, the 425,000-square-foot high-rise, which is about 95 percent leased, according to news reports, has tenants like Regus, the office suite provider, as well as Two Sigma Investments, a hedge fund, according to reports. Huntsworth Health, a public relations firm, is on the 13th floor. And this summer, cloud-computing firm DigitalOcean took 23,500 square feet at $75 a foot, The Real Deal reported. Still empty, though, is the 2,000-square-foot groundlevel retail space, which has 24-foot ceilings. Asking rents are $175 a foot, said Matt Ogle, a vice president of SRS Real Estate Partners, the brokerage marketing it. Since this summer, a restaurant has looked at it, as has a children’s play space, Ogle said, who added that he’s “close to a deal.” “With the high prices in Soho, there are tenants on the move,” he added. “I think the area is poised for rent growth now, but in the next 5 to 10 years, it will be a completely different market.” TRD

CORRECTIONS A N D C L A R I F I C AT I O N S In the November magazine story, “Residential firms with all the

In the October magazine story, “NYC’s Construction Craze,” Tish-

mischaracterized. Only the building’s 46th-floor entertainment

perks,” Keller Williams NYC’s profit sharing arrangements were

man Construction’s union policy was mischaracterized. The firm

lounge is reserved for condo owners. All other amenities are

mischaracterized. Everyone at the company who refers a new

does not manage any non-union projects.

shared by owners and renters.

***

commission structure was misidentified. The firm allows its agents

In the October magazine story “NYC’s new hybrid revival,” the

In the October magazine story, “Behind Elliman’s new partner-

to keep 100 percent of their commissions.

shared access to amenities at 388 Bridge in Brooklyn was

ship,” the name of Stephen Kotler, the firm’s COO, was misspelled.

agent gets a cut of the company’s profits. Also, Rutenberg Realty’s

TRD

Follow @TRDNY on Twitter & Like us on Facebook. 120 December 2014 www.TheRealDeal.com

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Urban Compass

from page 68

to provide feedback and help it build cutting-edge products that can upend the industry. And brokers who’ve left bigger firms for Urban Compass said they’re eager to be part of a brokerage with an empathetic ear. “I didn’t want to leave Brown Harris but I did want to come to Urban Compass and one or the other had to win,” said Hoagland, “You have to take some risks and hopefully they’re very calculated. It’s a leap of faith at the end of the day.”

Investors come knockin’ To say Urban Compass had a meteoric rise is almost an understatement. To date, the startup has raised more than $70 million, including a $40 million Series B round in July that doubled its valuation to more than $360 million — a staggering amount, according to tech industry sources. Among its investors are Founders Fund, Goldman Sachs, Joshua Kushner’s Thrive Capital, Condé Nast parent Advance Publications, Marc Benioff, and elite New York real estate names like Bill Rudin and the LeFrak Organization. Flush with funding, Urban Compass has been able to act on its ambitions. In March, it took 9,000 square feet of space at 19 Union Square West, paying rents in the mid-$60s per square foot, according to CompStak data. It then doubled its space at Aby Rosen’s 90 Fifth Avenue to 50,000 square feet, paying rents in the mid-$70s per square foot, CompStak data show. And in September, it expanded to Rosen’s trophy Lever House at 390 Park Avenue, signing a lease for 10,700 square feet. And its resources are being used not only on agents, but on engineers, too — it now has 21 of them working full time. “You were really working at the speed of thought,” Fleming, the former head engineer, said. “If there was operational appetite to execute it, there were not any other barriers.” “They’re sprinting a marathon, but so far it seems to be working,” said Dan Miller, president and co-founder of real estate crowd-funding platform Fundrise. Miller, whose firm also raised a healthy chunk of change recently, said Urban Compass’ founders attracted high-caliber backers, and are simultaneously benefitting from broader investor excitement about real estate tech. “I wouldn’t bet against their founding team,” he said. (Executive chairman Ori Allon sold his last two companies to Google and Twitter, and Reffkin’s pedigree includes Goldman Sachs, McKinsey & Company and financial services firm Lazard.)

Miller pointed out that Urban Compass is under pressure to sustain its pace. If it does, the company could go public in two years and make a killing, but a key question is whether the company can deploy its technology in new markets and scale quickly enough. “I’m not yet convinced their platform is not just a brokerage business that uses a better technology,” Miller said. “That’s the thing with tech companies. It’s hard to know what’s smoke, what’s reality and who’s having really explosive growth or who’s buying growth.”

Selling New York As Urban Compass’ roster of A-list agents has swelled, so have its listings. As of November 24, the firm had $494.9 million in listings, according to data provided by On-Line Residential — a figure that makes it the ninth-largest brokerage in the city by dollar volume of listings. That’s remarkable for a company that hasn’t yet turned two. By comparison, Halstead Property had $674.3 million in listings as of the same date, OLR data show. Town Residential had $457.9 million and Nest Seekers International had $415.5 million. The Corcoran Group had $4.1 billion in listings, the most in the city, followed by Elliman with $4 billion and BHS with $2.5 billion. Urban Compass’ number is likely to jump when Blackmon’s listings are reflected. What’s less clear, however, are how many sales Urban Compass has closed this year. Steinberg, for example, is marketing several trophy listings, including a $37.5 million penthouse at 158 Mercer Street that’s been on the market 160 days, according to StreetEasy. But the site’s data show that his recent closings are for apartments with much more modest price tags. Reffkin declined to comment about sales. He did say the firm has about $2 billion in its new development pipeline. Critics noted that several of Urban Compass’ investors, including the Rudin family and Jared Kushner, don’t use it to market their properties. Corcoran Sunshine Marketing Group is handling sales for Rudin’s Greenwich Lane project, and Sotheby’s International Realty is handling Kushner’s Puck penthouses. Reffkin countered that most of this was being marketed before Urban Compass came into being.

So sue me The startup’s ascent hasn’t come without legal challenges. In July, tech entrepreneur Avi Dorfman accused Reffkin of using

his product and business model to build Urban Compass, and then cut him out of the action. “This is a company that thinks it can take from people without compensating them,” Dorfman’s attorney Adam Ford told TRD. A month later, rival brokerage Citi Habitats sued the startup, alleging that Urban Compass breached its proprietary listing database. Gary Malin, Citi Habitats president, alleged the firm was using information from Citi’s LEAR database to lure agents to Urban Compass. But in an October 1 letter to Judge Jeffrey Oing, attorney Eric Leon described Citi Habitats’ accusations this way: “Despite Citi Habitats’ alarmist rhetoric, this case involves, at most, a garden variety claim for trade secret misappropriation spanning a few months in 2014, and even that claim seems to suffer some serious defects.”

Urban Legend If there’s something Urban Compass does unequivocally well, it is tell their story. The company has skillfully shaped its own brand, starting with a press conference to launch the company in May 2013 headlined by former Mayor Michael Bloomberg. This savvy has extended to damage control, too — when Citi Habitats sued Urban Compass, Urban Compass sponsored a Facebook ad to combat the negative press. The startup has carved a niche for itself as a thought leader in the real estate technology space. In July, the firm hosted a standing-room-only “Future of Real Estate” conference. There’s even an Urban Compass University channel on YouTube. This fall, it rolled out an elegant market report chock-full of data and analysis presented in a fresh way. Even skeptics gave its technology credit for aesthetics and ease of use. The firm’s offices have all the trappings of a tech startup — pool tables, free catered lunches and other perks such as rooftop yoga. Reffkin, a longtime marathoner, leads a running club. “We have the luxury to build a great culture,” he said. Being at the helm of the industry’s most hyped startup — in a city where real estate rules the roost — means that Reffkin is subjected to a harsh spotlight. A quote from Gandhi that he shared soon after Willkie’s comments may reveal how he feels about his perch. “First they ignore you,” he tweeted, “then they laugh at you, then they fight you, then you win.” TRD

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Potential Massey Knakal sale faces headwinds

Industry insiders see challenges for full or partial buyout, yet serious interest remains

By Adam Pincus he potential sale of Massey Knakal Realty Services, one of New York City’s most active investment sales firms, is the talk of the local industry, with insiders weighing the pros and cons of either a full or partial sale. The catch, however, is that there are major impediments to a large firm buying a full or even minority stake in the firm, insiders said. And that could reduce the company’s sale price to a private investor. There are four possible scenarios, broadly speaking, for a potential sale: a large brokerage such as CBRE or DTZ buying either a full or a minority stake, or an equity investor buying a full or a minority stake. Founders Paul Massey and Robert Knakal prefer to retain full control of the firm and sell only a 49 percent stake, industry sources said, but putting up the entire company for sale helps to set a benchmark price for a partial interest stake. Furthermore, if for any reason the principals do agree to a full sale, they did not want to blindside their employees. But the reluctance to sell the whole company could create roadblocks. For instance, large buyers would likely look to fold Massey Knakal’s operations into their own — a challenge when the larger company only owns a partial stake, industry professionals not connected to the potential sale said. “One should not underestimate the difficulties inherent in merging disparate operations with different cultures,” said Joseph Harbert, president of the Eastern Region for Colliers International. “Integration is all about the people and those

Paul Massey, left, and Bob Knakal.

people often vote with their feet.” Another challenge for a larger firm could be coming to terms with Massey Knakal’s unique territory system. While some larger firms have territories, they are typically huge, like all of New York City or Manhattan. Instead, Massey Knakal has carved the city into regions and brokers focus on those. (The system has been tweaked as the firm moved into new areas, such as New Jersey, but overall it remains in place.) The main challenge for a large firm would be to allow Massey Knakal to operate under a different platform, or con-

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versely to integrate the brokers into a more typical platform. Nevertheless, Massey Knakal is a choice target, brokers say. It was the third most active brokerage in New York City last year, with total sales volume of $2.5 billion, which is expected to rise dramatically this year. The Real Deal estimated that 2013 sales activity generated revenue between $50 million to $55 million, and insiders reckon the company could fetch as much as $100 million. Representatives for the firm declined to comment for this story other than to issue a statement saying that it is “exploring growth initiatives.” It hired Perella Weinberg to manage a potential sale. Another option is for an equity investor to buy a controlling or minority stake. Since the preferred option is an investor buying a minority stake, real estate pros expect this to be the most likely scenario if a sale takes place. The money is sought to help the firm’s expansion into new cities, such as Boston, Chicago and Washington, D.C., a person familiar with the company said. This is not the first time the company considered selling a stake through an equity raise. In late 2008, the principals entertained the idea, but never took it as far as reviewing offers, sources said. Subsequently, the market recovered and the funds were no longer needed. Despite the hiccups that come with a partial stake sale, global firms such as CBRE, Colliers International and DTZ have taken a look at the company, as have smaller investors, industry sources said. And there are precedents for a larger brokerage buying a minority or majority stake. Both examples are from the city’s leading investment banking firm, Eastdil Secured, home to top investment sales brokers Doug Harmon and Adam Spies. In 1986, in the midst of another real estate boom, the company then known as Eastdil Realty sold a 50 percent stake to what was at the time the largest investment bank in the world, the Tokyo-headquartered Nomura Securities, for $50 million. “It’s interesting you mention 1986,” Joel Herskowitz, COO of commercial brokerage Lee & Associates NYC, said, noting that year there was an investment sales boom fueled in part by a looming tax change that repealed a number of commercial real estate incentives. Eastdil continued to operate independently. So much so that in 1994, it bought back the minority stake. Then in 1999, California-based Wells Fargo purchased the entire company, Despite that full acquisition, the company today remains a largely independent subsidiary. “Companies time their business cycles,” Herskowitz said. “Everybody wants to take advantage of a market if they are inclined to sell.” TRD www.TheRealDeal.com January 2012 00

Commercial market

from page 28

strong [as far as] the velocity of offers, proposals and lease signings,” Levy said, in part because amenities such as restaurants and rooftop bars have expanded in the neighborhood. “We are getting a lot of overflow from those looking for buildings that are cool and interesting, but at a much lower price.” The asking rent for the Seventh Avenue space in the low $40s was far below the asking rent for Midtown, which was $74.96 per square foot, Colliers research showed. That was down 77 cents per foot from October. At the same time, the availability rate declined by 0.1 points to 10.6 percent.

Midtown South A Midtown South-based tech startup signed a lease for 5,162 square feet on the second floor of SL Green Realty’s 304 Park Avenue South, a 215,000-square-foot building at 23rd Street. The two-year-old firm, Kinnek, runs an online B2B marketplace that helps small businesses find suppliers and manage purchasing, and announced in September it received $10 million in series A funding from investors. It relocated from 261 Madison Avenue, at the corner of 39th Street. “We moved here from Midtown, and we’re glad to be in the heart of New York’s ‘Silicon Alley’ tech scene now,” company CEO Karthik Sridharan told The Real Deal. “Our new space gives us the flexibility to handle the breakneck

growth we’re experiencing.” The average asking rent in Midtown South rose sharply last month to $59.51 per square foot, from $58.54 per foot, the Colliers information showed. Meanwhile, the availability rate declined by 0.2 points from 8.2 percent in October to 8 percent last month.

Downtown A large lower level space is being reintroduced to the market across the street from 1 World Trade Center. Cushman & Wakefield’s David Tricarico is marketing concourse space at 140 West Street, between Barclay and Vesey streets. The three levels of space below grade are likely to go retail or lease to a school or medical use, Tricarico said. But he was entertaining office uses as well. Part of the approximately 82,000 square feet on three lower levels had been a call center in the past. The recent interest “has primarily been schools and medical, with some production people calling,” Tricarico said. “Back office, not yet. But I am assuming we will get some of those calls because of the location.” In addition, on the east side of Lower Manhattan, Hugo Boss signed a lease last month to relocate from Chelsea, making it the first “high fashion” brand to take space in the city’s least expensive market. Other apparel firms are moving to the west side, like Saks Fifth Avenue owner Hudson’s Bay, which announced in September a deal to take 400,000 square feet of office space in Brookfield Place.

While brokers had long said that high fashion tenants would make the move, this was the first large one to relocate to the area, insiders said. Brokers said the move was likely tied to the Condé Nast move to 1 World Trade Center, because fashion needs both buyers and media to survive. One broker, who has placed fashion tenants in Chelsea, Tribeca and the Meatpacking District, said she would now throw Lower Manhattan in the mix. Previously she did not consider it. “But now it is an option. If someone has a showroom [requirement] and is price sensitive, I would not have done it before, but now I would definitely consider it,” said Lisa Rosenthal, managing director with the brokerage Lansco. Hugo Boss is relocating from the Starrett-Lehigh Building at 601 West 26th Street to 55 Water Street. The firm will take 73,690 square feet at the 3.9 million square foot 55 Water Street, according to a statement from the brokerage CBRE, which represented the landlord. The tenant was represented by Greg Taubin of Savills Studley. CoStar estimated the Hugo Boss starting rent at $54 per foot. That is slightly above the average asking rent for Downtown, which rose by 9 cents last month, to $52 per foot, from $51.91 per foot in October, while the availability rate fell from 12.3 percent to 12.1 percent during the same time period, the Colliers data revealed. TRD

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Top retail buyers

from page 60

nue, purchased in March 2012 for $120 million as a development site. Thor demolished the two pre-war structures at the corner of 43rd Street, and is now building a six-story, 77,000-square-foot building with 85 feet of frontage on the avenue. Thor is marketing the project as a flagship retail store; no tenants have yet been announced. Thor is also marketing the retail at 530 Fifth Avenue, a 1950s mixed-use property between 44th and 45th streets, which it bought in October for $595 million, along with General Growth Properties and Scott Rechler’s RXR Realty. In Soho, Sitt has made a splash with a stake in eight properties over three years. While critics point to the risks for his investors in holding more sites vacant for longer than his rivals will typically bear, Sitt was successful in several high-profile bets over the past year. Those include the Takashimaya building at 693 Fifth Avenue, which was leased last year to Valentino for a reported annual rent of $16 million per year. In addition, he leased up the newly constructed 837 Washington Street in the Meatpacking District, a 55,000-square foot, six-story glass building between Little West 12th and 13th streets overlooking the High Line. The building, which includes 17,500 square feet of retail, was leased to Samsung in the summer, according to CoStar. Both of those properties were acquired before 2012. “The key players are acquiring a lot of retail real estate. They are willing to buy and hold and wait for the right tenant, who is going to pay what they consider to be the right rent,” said Robin Abrams, an executive vice president at the brokerage Lancso. “Using that methodology, if you look at the tenants they secured and the rents they have achieved over the past year, it has been pretty meaningful.” Behind its strategy of redeveloping prime retail sites, Thor, like many funds, makes a hefty management fee for handling properties it holds stakes in. For example, while Thor received 1.5 percent of net investments in the $675 million Thor Urban Fund II — whose investors include the University of Notre Dame and the John D. and Catherine T. MacArthur Foundation — it also receives 4 percent of gross revenues and an additional 4 percent of total rent payments, according to a filing with the Securities and Exchange Commission from 2007, when the fund was formed.

Ashkenazy Acquisition ($1.3B) Submarkets

Properties

Total value

Madison Avenue

625 Madison Avenue, 711 Madison Avenue, 21 East 62nd Street

$466.5M

East Village

229 Chrystie Street

$365M

Fifth Avenue

522 Fifth Avenue (condo)

$165M

Others

2067, 3560 and 4168 Broadway, 285 Lafayette Street, 601-611 Eighth Avenue, and six others

$311M

Source: The Real Deal analysis of data from CoStar Group, Real Capital Analytics and other sources. Covers Jan. 2012 to Nov. 2014.

he most varied buyer on the list was Ashkenazy Acquisition. The firm, led by CEO Ben Ashkenazy and President Michael Alpert, bought 16 properties worth just over $1.3 billion. But the acquisitions were all over Manhattan: two in Soho, two in Midtown, and others along Madison Avenue, the Upper East Side and Lincoln Square. The firm partnered with investors including Sutton in the $17.5 million purchase of 21 East 62nd Street, and later with General Growth Properties and Deka Immobilien In-

128 December 2014 www.TheRealDeal.com

vestment to buy a retail condo at 522 Fifth Avenue, at 44th Street, for $165 million. GGP’s Mathrani said the current tenants at 522 Fifth, Camper and Orvis, are on the way out. They “will soon vacate the property and we’ll begin renovating and redeveloping the space in order to market it as a flagship location offering 7,600 square feet on the ground and 16,000 square feet on the second level,” Mathrani said in the firm’s October earnings call. In addition, Ashkenazy snapped up a handful of assets less than $10 million that were not included on the TRD survey. While most of the investors on this list do not bother with smaller deals, Ashkenazy has shown a big appetite for them. The company has also not shied away from deals that require patience. It bought the land under 625 Madison Avenue for $400 million. The building is owned by SL Green, which has a lease that runs until 2054 with the first reset in 2022. At that time, the rent could rise significantly, to $50 million, according to published reports.

he firm, led by Bobby Cayre, which often partners with Alex Adjmi in the city, acquired properties valued at $456 million over the past three years, one of them in partnership with Vornado. The company has for years had a strong presence in Soho, the Meatpacking District and Harlem, and broadened its presence in all three. The largest purchase was the partnership with Sutton, Adjmi and Sitt for 529 Broadway in Soho. But nearby, it also paid $42 million for the retail condo at 114 Prince Street. After a successful redevelopment of 9 Ninth Avenue, Aurora partnered with Vornado to pay about $140 million for a ground lease at 61 Ninth Avenue at 15th Street, where they plan to build an office and retail tower.

Acadia Realty Trust ($259M) Submarkets

Properties

Total value

Soho, Noho

120 West Broadway, 131-135 Prince Street, 83 Spring Street, 152 Spring Street, 654 Broadway, 640 Broadway

$179.7M

Madison Avenue

27 East 61st Street, 17 East 71st Street

$47.3M

SL Green Realty Corp. ($1.01B) Submarkets

Properties

Total value

Madison Avenue 635 and 760 Madison Avenue, 21 East 66th Street

$461.2M

$18M

650 Fifth Avenue

$256.7M

Upper East Side

1151 Third Avenue

Fifth Avenue Soho

115 and 131-137 Spring Street, 102 and 121 Greene Street

$233.8M

Flatiron

868 Broadway, 1151 Third Avenue

$13.5M

Others

Source: The Real Deal analysis of data from CoStar Group, Real Capital Analytics and other sources. Covers Jan. 2012 to Nov. 2014.

719 Seventh Avenue, $59.1M 985-987 Third Avenue

Source: The Real Deal analysis of data from CoStar Group, Real Capital Analytics and other sources. Covers Jan. 2012 to Nov. 2014.

L Green, like Vornado, is a publicly-traded firm. Originally more focused on office assets, it has steadily moved toward retail properties as the returns have increased. In the past three years is has acquired 10 properties in Manhattan for a total of $1.01 billion. “[With] retail rents you can generally measure a 100 percent or more mark-to-market,” Holliday said on an earnings call. “So those are probably, on average, the highest-return deals that we’re buying today.” However, SL Green has been less aggressive in retail over the past three years than Vornado. In addition, in past years, it frequently partnered with Sutton. Recently it has moved to buy assets on its own on a deal-by-deal basis. SL Green is also taking a strong interest in Soho, investing in three retail buildings this year to add to one it already acquired last year. It purchased those four properties for a total of nearly $234 million since 2012. Three of the four Soho deals were done without Sutton, although they partnered in September with him on the $27 million purchase of 121 Greene Street. They also acquired together the ground lease at 650 Fifth Avenue, which SL Green valued, in its third-quarter filings, at $256.7 million.

Aurora Capital Associates ($456M) Submarkets

Properties

Total value

Meatpacking District

61 Ninth Avenue, 9-19 Ninth Avenue

$240M

Soho

114 Prince Street, 529 Broadway

$188.9M

Harlem

5-15 West 125th Street

$27.1M

Source: The Real Deal analysis of data from CoStar Group, Real Capital Analytics and other sources. Covers Jan. 2012 to Nov. 2014.

he publicly traded Acadia Realty Trust has been another active buyer in the city, closing on $259 million of properties since 2012 with a focus in Soho. None of the properties are vacant. Many REITs are less aggressive than Vornado and SL Green, and seek to get predictable returns on long-leased assets. Acadia tends to follow that pattern. The firm purchased two locations just off the most expensive stretch of Madison Avenue, at 27 East 61st Street and at 17 East 71st Street for a total of $47.3 million. “The two completed acquisitions … are part of our off-Madison strategy,” company CEO Ken Bernstein said during the firm’s third quarter earnings call in October. “Today rents on Madison Avenue are generally north of a $1,000 [per] square foot, with certain front spaces commanding nearly double that. Both of our recently acquired properties are located approximately 100 feet off of Madison Avenue, providing retailers with high visibility and solid co-tenancy.”

Sitt Asset Management ($245M) Submarkets

Properties

Soho

$197.2M 90 and 161 Prince Street, 113, 138 and 145 Spring Street and 450 Broadway

Madison Avenue 711 Madison Avenue

Total value

$48M

Source: The Real Deal analysis of data from CoStar Group, Real Capital Analytics and other sources. Covers Jan. 2012 to Nov. 2014.

he firm, headed by brothers Eddie, Ralph and David Sitt, snapped up seven properties greater than $10 million over the past three years, with a total value of $245.2 million. The assets are concentrated in Soho: 90 and 161 Prince Street, and 113, 138 and 145 Spring Street. In addition, the company has a contract to pay about $22.5 million for 8, 10, 12 and 14 Prince Street. TRD

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The American Society of Interior Designers New York Metro Chapter presents its holiday house tour. The morning session will feature a panel of color experts from Farrow & Ball. The evening will feature an Author’s Night, with networking opportunities with industry leaders. Admission $25 ASID members, $35 non-members, $20 students. At 2 East 63rd Street. 11 a.m. to 8 p.m. Information and registration: asidnymetro.org.

C A L E ND A R 1 2 3 4 5

The New York State Society of CPAs hosts a conference to explore key trends in real estate and issues related to the industry and taxes. Speakers include Robert Knakal, chairman of Massey Knakal; Thomas Fink, senior vice president and managing director at Trepp, and Glenn Newman, president of the NYC Tax Commission. At the New York City Bar Association, 42 West 44th Street. 8:30 a.m. to 5 p.m. Fees: $385 for members; $510 for non-members. Information and registration: www.nysscpa.org.

6 7 8 9 10 11

The New York chapter of the National Association of Professional Women in Construction (PWC) celebrates its 35th anniversary with its annual Black Tie Holiday Dinner Dance. Jeannie Kwon, chief of staff at MTA Capital Construction and Caroline Weiss of Weidlinger Associates are the guests of honor, and Michael Horodniceanu, president of MTA Capital Construction, is a special guest. At the Yale Club, 50 Vanderbilt Avenue. 7 p.m. to midnight. Tickets: $385 for PWC members; $425 for non-members. Information and registration: www. pwcusa.org.

12 13 14 15 16 17

7-9

The International Council of Shopping Centers presents its New York National Deal Making Conference. The event will include panel discussions, trade exhibitions and more. Among the featured speakers will be Christopher Curry, senior executive vice president of development at the Howard Hughes Corp.; Kenneth Bernstein, CEO of Acadia Realty Trust; David Simon, CEO of Simon Property Trust; Marc Shapiro and Jill Block, both partners in Mayer Brown; and Mark Decker, vice chair at BMO Capital Markets. At the Jacob K. Javits Convention Center, 655 West 34th Street. Dec. 7: 7:30 a.m. to 7:30 p.m.; Dec. 8: 7:30 a.m. to 7 p.m.; Dec. 9: 8 a.m. to 5 p.m. Tickets: $775 for non-members and $575 for members before Dec. 2; $835 and $635, respectively, after Dec. 2. Information and registration: www.icsc.org.

18 19 20 21 22 23 24 25 26

The American Institute of Architects presents David Halle and Elisabeth Tiso discussing their book, “New York’s New Edge: Contemporary Art, the High Line, and Urban Megaprojects on the Far West Side.” The talk will be followed by a panel discussion about the Far West Side. 6 p.m. to 8 p.m. At the Center for Architecture, 536 LaGuardia Place. Price: Free for AIA members and students with valid student ID; $10 for non-members. Information: cfa.aiany.org.

130 December 2014 www.TheRealDeal.com

27 28 29 30 31

Crain’s New York presents its Business Breakfast Forum with Rick Chandler, commissioner of the New York City Department of Buildings, who will discuss the agency’s role in the city’s construction boom and the mayor’s affordable housing and upzoning plans. At the Yale Club, 50 Vanderbilt Avenue. 8 a.m. to 9:30 a.m. Fees: $125 for an individual ticket; $1,250 for a table of 10. Information and registration: www.crainsnewyork.com.

New York Commercial Real Estate Women hosts its Annual Gala & Vanguard Awards, a “Strictly Social” event. At the Columbus Citizens Foundation Townhouse, 8 East 69th Street. 6 p.m. to 8:30 p.m. Tickets: $95 for NYCREW members; $125 for CREW members and non-members who register in advance; $150 for walk-ins. Information: www.nycrew.org.

The B’nai B’rith New York City Real Estate Unit presents a luncheon featuring speaker Carl Weisbrod, director of the Department of City Planning and chairman of the City Planning Commission. At the Cornell Club, 6 East 44th Street. 12 p.m. to 2 p.m. Fees: $70 up to two days in advance; $80 at the door. Information and registration: www.bbre-ny.org.

The Mortgage Bankers Association of New York hosts a luncheon panel on “Financing Energy Efficiency: Property Assessed Clean Energy,” a method of financing energy upgrades through monetization of cost savings. At the New York City Bar Association, 42 West 44th Street. 12 p.m. to 2 p.m. Price is $75 for members, $115 for nonmembers. R.S.V.P. by Dec. 10. Information and registration: www.mbany.org/events.asp.

The Paul Milstein Center for Real Estate at Columbia University presents its 2014 Real Estate Symposium. Speakers will include Marty Burger of Silverstein Properties; Patrick Foye of the Port Authority of New York and New Jersey; A.J. Agarwal of Blackstone, Jay Cross of the Related Companies, Erik Horvat of Fosun Property Holdings and more. Mort Zuckerman, co-founder and executive chairman of Boston Properties, will deliver the keynote address. At the Columbia University Club of New York, 15 West 43rd Street. Noon to 5 p.m. No registration required. Information and agenda: www8.gsb.columbia.edu/realestate.

The Real Estate Lenders Association presents a breakfast meeting featuring a discussion with Michael Maturo, president of RXR Realty, and Michael Stoler, managing director at Madison Realty, on the New York real estate market. At the Yale Club, 50 Vanderbilt Avenue. 8 a.m. to 9:30 a.m. Tickets: free for members; $50 for non-members. Information and registration: www.rela.org.

The Real Estate Board of New York’s commercial brokerage division hosts its Holiday Luncheon, featuring guest speaker Mort Zuckerman of Boston Properties. At the Waldorf Astoria, 301 Park Avenue. 12 p.m. to 2 p.m. Tickets: $95 per person; tables available upon request. Information and registration: www.rebny.com.

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Scene

Industry honorsTRD publisher

Korangy feted with Child’s Champion Award by Ronald McDonald House By Hiten Samtani he industry’s leading lights came together last month to honor The Real Deal’s Amir Korangy for his commitment to supporting families of seriously ill children. Korangy received the Child’s Champion Award from the Ronald McDonald House, which provides housing and support services for pediatric cancer patients and their families. Korangy’s goal was to raise $100,000 for the foundation — a figure he well exceeded thanks to the support of industry players such as the Peebles Corporation’s Don Peebles, Red Apple Group’s John Catsimatidis, Douglas Elliman’s Howard Lorber, Joseph Moinian of the Moinian Group, Cushman & Wakefield’s Bruce Mosler, HFF’s Eric Anton, Renovated Homes’ Lee Stahl, Rapid Realty’s Anthony Lolli, JLL’s Mitch Konsker, Eastern Consolidated’s Daun Paris, Ackman-Ziff ’s Simon Ziff, Kramer Levin’s Jay Neveloff, Town Residential’s Andrew Heiberger, Sharif El Gamal, JDS’ Michael Stern and many others. “I was really nervous about picking up the phone and asking people for money,” Korangy said upon receiving his accolade. “But I soon learned I was pretty good at it.” What made the fundraising task easier, he said, was his belief in the cause. Through the donations, the Ronald McDonald House helps provide psychological care, wellness programs, music, art, transportation and many other activities for children struggling with their cancer diagnosis, and serves as a resource for their parents as well. “Hearing the kids’ stories and what the Ronald McDonald house does for them touched me,” Korangy said. “And I’m not easily touched.” TRD

From left: TRD’s Amir Korangy, Richard Martin and William Sullivan of Ronald McDonald House From left: Kim Mogull of Mogull Realty, Bruce Mosler of Cushman & Wakefield and Holly Marie Hutter From left: TRD’s Amir Korangy, Joe Moinian of the Moinian Group, and Bruce Mosler of Cushman & Wakefield

John Catsimatidis of Gristedes Foods, left and Eric Anton of HFF

Laura Gabrielson and Rena Kilot

Julia Hoagland and Gordon Golub of Urban Compass From left: Eric Anton of HFF, TRD’s Amir Korangy and Bruce Mosler of Cushman & Wakefield

Howard Lorber and Jennine Gourin of Elliman Jay Neveloff of Kramer Levin, TRD’s Amir Korangy and David Zar of Zar Property NY

Joe McMillan of DDG Partners

TRD’s Amir Korangy and Asher Alcobi of Peter Ashe Realty

TRD’s Amir Korangy and Justin Elghanayan of Rockrose Development

TRD’s Amir Korangy with event honoree Miles Lima, and his mother, Hewanya Lima

From left TRD’s Amir Korangy, Bruce Mosler of Cushman & Wakefield and Eric Anton of HFF

TRD’s Amir Korangy and Felix Sater

Roberta and Mitchell Newman of Mitchell’s NY

From left: Don Peebles of The Peebles Corporation, Kim Mogull of Mogull Realty and Donahue Peebles Peebles.Jr.

Edward Mermelstein of Rheem, Bell & Mermelstein, TRD’s Amir Korangy and Gennady Perepada of One & Only Realty

Jennifer Long, Sarah Dalidowitz and Laura Gabrielson

TRD’s Amir Korangy

132 December 2014 www.TheRealDeal.com

From Left: Geoffrey Potter, Jill Sloane, Heather Stein and Raj Bhatia

Angela Trostle of AMWPR and Alicia Gorman

Photos by Benno Klandt

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COMINGS & GOINGS Rutenberg NYC names Markowitz president

Movers and shakers

tefani Markowitz, the granddaughter of Rutenberg Realty New York majority owner Richie Friedman, was named the new president of the firm. The new role for Markowitz, who graduated from the University of Michigan in 2009 and joined Rutenberg in July, was announced in mid-November. Prior to Rutenberg, Markowitz worked for the Heddings Property Group and the Modlin Group. Markowitz plans to increase the firm’s head count — currently at 525 agents — and expand the firm’s concierge service. That offering helps agents with the services they’d get at other firms, such as newsletters and business cards. The firm also plans to relaunch its website on December 1. Richie Friedman, left, and Stefani Markowitz In 2006, Friedman founded Rutenberg’s New York branch, which was managed by veteran local real estate executives Kathy Braddock and Paul Purcell, now at William Raveis New York City. According to The Real Deal’s most recent ranking, Rutenberg is the sixth-largest brokerage in Manhattan by agent count. Nationally, the firm has about 5,500 brokers. Brokers pay $99 a month to join the firm and work on a 100 percent commission-based model, minus a flat transaction fee. Markowitz said she is looking forward to having an “open-door policy.” She added that she hopes to create a “happy home” for the company’s agents. Rutenberg has two locations in the city, a WeWork space at 379 West Broadway and a corporate office at 127 East 56th Street where Markowitz will be based. By Claire Moses

Karin Rathje-Posthuma was named

director of sales operations at Town New Development, Town Residential’s marketing, sales and leasing division focused on development properties in New York City. Rathje-Posthuma, a 20-year veteran of the industry, joined Town New Development from Brown Harris Stevens Select. John Murray joined Helmsley Spear as director of hospitality capital markets. Murray will be responsible for all capital transactions for the firm’s hospitality division. Prior to his move to Helmsley Spear, Murray was the managing member at the Oak Park Group. Evan Lorch was appointed chief financial officer at B2R Finance. Lorch, who previously oversaw all financial and accounting functions as CFO at CoreOne Technologies, will report directly to B2R Finance President John Beacham. Lorch Evan Lorch

Cushman’s Glenn Markman dies at 52

lenn Markman, a Cushman & Wakefield commercial broker who negotiated leases on behalf of Spike Lee and the Brooklyn Nets and became one of the industry’s leading advocates for Brooklyn’s growth, died Nov. 4. He was 52. The cause of death was cancer, according to a statement from Cushman & Wakefield, where Markman spent the last 12 years of his 28-year career in brokerage. “Glenn distinguished himself through his work ethic, integrity and passion. We’re all very proud that he was part of our team and our deepest sympathies go out to his family and loved ones,” Cushman & Wakefield CEO Ed Forst said in a statement. The Brooklyn native was a heavyweight dealmaker throughout that borough. He helped relocate the Brooklyn Nets’ offices to 15 Metro Tech Center in Downtown Brooklyn, and negotiated the creation of a new, $45 million Nets training center in Sunset Park’s Industry City. In Manhattan, one of his most notable deals was the NBA’s Glenn Markman 35,000-square-foot lease for a store at 666 Fifth Avenue. Bruce Ratner, chairman of Forest City Ratner Companies, said the two connected 25 years ago through a shared vision of Brooklyn. “Most people had written the borough off, but Glenn, who was born and raised on its streets, was that rare and passionate believer who felt drawn to act,” Ratner said in a statement. He is survived by his wife, Jan Testori-Markman, his son Clio and his daughter Edie Ray, as well as his parents Marty and Karen Markman and his brother Greg Markman. By E.B. Solomont

Karin Rathje-Posthuma

is a certified public accountant. Architectural and

design firm Montroy Andersen DeMarco promoted Ajay Waghmare to project manager from senior job captain. Waghmare’s current projects include the One World Trade Center Observation Deck retail and entertainment center and the Jordache Enterprises Headquarters at 1400 Broadway. Previously he worked on the renovation of the Rainbow Room at 30 Rock.

Ajay Waghmare

Bram Lefevere was promoted to executive director of Miron Properties’ office in Greenpoint, Brooklyn. The office was overseen by firm founder Jeffrey Schleider; Lefevere will direct the expansion of Miron’s operations in Brooklyn. Bram Lefevere

Plaza Construction named Ark Latt senior vice president. Latt will manage

the organization’s growth and leadership development. Previously, Latt was vice president of construction at Brookfield Office Properties. Stalco Construction hired AnaTracey Hawkins as vice president of marketing. Hawkins will serve as Stalco’s business development executive. Previously, she worked as a personal branding consultant,

Victor Elmaleh, founder of World Wide Group, dies at 95

ictor Elmaleh, the chairman and founding partner of World Wide Group, died last month. He was 95. The Moroccan-born entrepreneur, along with his partners, developed more than $7 billion of real estate, including Worldwide Plaza on Manhattan’s West Side, City Lights in Long Island City, 71 Broadway, 255 East 74th Street and 300 East 55th Street. Elmaleh was brought to the United States at the age of six. He graduated from the Architectural School at the University of Virginia, and worked as an architect until the 1940s. World Wide was launched in 1954 as a distributor of Volkswagen, Porsche and Audi automobiles, and later branched into real estate. He was also a prolific painter, with 35 art exhibitions, and an accomplished athlete with national titles in both handball and squash. A board member of the Orchestra of St. Luke’s, he also served Victor Elmaleh on the board of the Concert Artists Guild, which established an annual competition in his name and produced recordings for young pianists under the label the Victor Elmaleh Collection. He is survived by his wife of 71 years, Sono Osato, a former ballet dancer, and sons Niko Elmaleh, executive vice president of World Wide, and Antonio Elmaleh, an author. By E.B. Solomont

134 December 2014 www.TheRealDeal.com

a facilitator for luxury brands, and sales executive for Mondrian Residences/Morgan Hotel Group. Jonathan Cagnazzo joined Brown Harris Stevens as senior property manager. Previously Cagnazzo was a property manager at Argo Real Estate, where he managed capital improvement projects. Before that he was assistant to the senior vice president of operations at National Retail Systems.

Also on the move Edward (Eddie) Setton joined TerraCRG as Multifamily and Mixed Use Associate … Lawrence Lee was promoted to team leader at Bracha New York … Matt Spangler joined Urban Compass as head of marketing & creative … Lucy Carter joined JLL as senior vice president in its Project and Development Services Group.

Announcements Eric Trump married CBS producer Lara Yunaska last month at a ceremony in Palm Beach, Florida.

From sales to Shakespeare WE H E A RD

Avison Young exec switches gears to help “Lear”

▼

he fate of a project yet again rests in the hands of Avison Young’s Jason Meister. This time, however, it’s not a Downtown office building, but a film from veteran actor Paul Sorvino. The vice president of the commercial brokerage’s capital markets group is moonlighting as an executive producer for “Lear,” a planned feature-length version of William Shakespeare’s tragic masterpiece, “King Lear.” Sorvino — best known for his role as Paulie in Martin Scorsese’s 1990 “Goodfellas” and a recurring role on “Law & Order” — has written the screenplay and is slated to direct as well as star in the title role. The film, a period piece, is expected to cost about $24 million, Meister said. “My focus is always on my real estate clients, but this was an interesting opportunity that came to me,” Meister, 32, said. “My role is to tap into some of my unique relationships, particularly with overseas capital, to consult on a very exciting project.”

Actor Paul Sorvino, left, with Avison Young’s Jason Meister.

Meister, Sorvino and others have been meeting largely with Chinese investors, many of them based in the city. After agreeing to the consulting stint, Meister partnered with lawyer Elaine Rogers, who specializes in media and entertainment at the firm Meister Seeling & Fein (where Meister’s father, Stephen, is a partner). Rogers’ clients include several investors in the film industry.

Ringing out the year in style

Real estate firms ready to celebrate 2014 with lavish holiday parties

is the season of eggnog, shopping, and — of course — lavish holiday parties. And true to New York real estate, industry holiday parties are all about location, location, location. The scene is, clearly, quite different from a few years ago. In 2008, in the middle of the financial crisis, many of the most popular and well-attended annual parties were canceled. And much like the state of the economy and the housing market, recovery was slow. In 2011, for example, brokerages were still feeling the impact of the crash, and opted for more modest activities — bowling, the circus — and less fancy digs to celebrate to holidays. But this year, sources say, the holiday party is officially back. The booze should be free-flowing, and the city’s most exclusive doors are about to open.

Town Residential’s holiday party will return to Tao Downtown for a second year.

Michael Stern’s JDS Development, as well as Josh Zegen’s Madison Realty Capital, are hosting their annual parties on the top of the Standard Hotel. TerraCRG, meanwhile, is celebrating at the Brooklyn Winery in Williamsburg, and is offering its guests kosher and

Who’s got the best tech office space?

Facebook unveils splashy new digs, but Google was the cool kid first ees, but also as a recruiting tool to attract those looking to take a bite out of the Big Apple’s growing tech scene. Though Facebook relocated its office from 335 Madison Avenue to a much hipper Astor Place, it’s not like the employees need to venture outside to get what they need. The Frank GehryFacebook’s new offices include a game room. designed office features an open floor plan with exposed ceilings hile most 9-to-5 employees count on coffeemakers and an assortment of custom-made art or watercoolers as basic workplace amenities, two Downtown tech titans are taking perks to a whole new level. installations. Employees and engineers Frank Gehry Last month, Facebook finally unveiled its latest digs can blow off some steam on one of the at 770 Broadway. The 185,000-square-foot space, which company’s many gaming tables. is owned by Vornado Realty Trust, will be used not just as a The office also includes a full-service cafeteria with home base for the social-media giant’s N.Y.-based employ- locally-sourced food and international cuisine, as well

136 December 2014 www.TheRealDeal.com

Sorvino, along with James Earl Jones, performed “King Lear” at Shakespeare in the Park in 1973. Back then, he played the Earl of Gloucester. “This will be a very different Lear,” Sorvino said in materials sent to potential investors. “The language will not be British but rather general American. … The adaptations I have made to the text are the result of copious research and lengthy cogitation.” Sorvino’s daughter, Academy Award-winning actress Mira Sorvino, is attached to costar as Cordelia. At least two other A-list actors are also in talks to join the cast. If the “Lear” budget is fully funded, Meister (who said that he met Sorvino behind-the-scenes on the TV news circuit) and Rogers would each receive an executive producer credit. Sorvino is aiming to begin production in the spring, and will seek film distribution in Europe as well as in the U.S., Meister said. The film and real estate industries are known to occasionally overlap, especially in New York City. Charles Cohen, CEO of Cohen Brothers Realty Corporation, owns several movie theaters, including the Quad Cinema in Greenwich Village, and recently produced the Kevin Kline dramedy “My Old Lady.” Meanwhile, developer and Steiner Studios chair Doug Steiner plans to expand his 26-acre facility early next year. By Mark Maurer non-kosher food and drink options. Town, the brokerage headed by CEO Andrew Heiberger that also celebrates the anniversary of its founding around the holidays, will host its annual celebration at Tao Downtown for the Josh Zegen second straight year. Rutenberg Realty’s New York City office, for its part, will be hosting its biggest party yet, according to the firm’s newly appointed president Stefani Markowitz (see related story, page 134.) Michael Stern The party will be hosted at the Chester, a swanky nightclub in the Meatpacking District. The fête should be a mix of a celebration of the market, the brokers, and the rebranding the company has recently gone through. By Claire Moses Andrew Heiberger

as a library where employees can work on the site’s latest products in peace. Long before Facebook made its push into Midtown South, of course, another Internet company cemented its place as one of the coolest kids on the block. Google expanded its New York City headquarters in 2010 after reportedly paying nearly $1.9 billion for 111 Eighth Avenue, where it had previously leased space. Not only is it one of the city’s largest buildings in terms of square footage, but is one of the largest technology-owned buildings in the world, as well. Like Facebook, the search giant offers free food to its employees via several cafés located throughout the building. Engineers can work off a big lunch courtesy of free yoga and Pilates classes. New York City-themed conference rooms with names like “Astroland” and “Bryant Park,” compliment custommade workspaces, where Google staff design and build their own desks. The building is so big, staffers use “hallway scooters” to zip around. And when they need to catch a break, employees can head over to a two-story lounge that’s connected by a slide. By Kerry Barger

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THE CLOSING

Leonard

Boxer From the LeFrak Organization to Donald Trump, most major real estate developers in New York have called upon attorney Leonard Boxer at some point over the last five decades. Boxer cut his teeth in real estate law under the tutelage of the late developer Robert Olnick, whose credits included Starrett City. Today, Boxer heads Stroock & Stroock & Lavan’s real estate practices, where his notable deals have included helping Larry Silverstein raise the equity to acquire the long-term lease of the World Trade Center in 2001, just weeks before the Sept. 11 attacks. Boxer still carries a worn billfold containing his ID for 1 World Trade Center. “It was a great accomplishment when we did it,” he said, “But look what happened after that.” Name: Leonard Boxer Born: February 11, 1939 Hometown: Brooklyn Marital status: Married 49 years Children: 3 sons Tell me about growing up in East Flatbush. I lost my father when I was a year old and my mother went to work [as an executive secretary]. We lived with my mother’s parents. When I graduated Erasmus Hall High School, my grandfather, who was paying for my education, said, “You can go to any school that you get into, but you’ve got to come home at night.” I ended up going to New York University. What did you study? I got my original degree in accounting and worked as an accountant through undergraduate school. When I graduated, I decided I wanted to be a lawyer, and went to NYU Law School. Did you work through law school, too? When I was in law school, flights to Kennedy Airport were inundating the immigration service. They came to NYU Law School and selected three of us to become immigration officers during the summer, which was a great job. It paid very well and here I was, single, with all these stewardesses. What did you do next? When I graduated law school [in 1963] it was the height of the Vietnam War. There was an opening in the Army Security Agency’s school in Fort Devens, Massachusetts. At the time, it was a top-secret facility where they taught us to break codes. Now you have computers that do it. Was real estate the end goal? Absolutely not. I had no clue. My original objective was to become a tax lawyer. You know, all the best laid plans. … It was just fortuitous that I ended up meeting Robert Olnick. How did you meet him? After the service, I got what was considered a coup, a job at a surrogate’s firm in Brooklyn, specializing in trusts and estates. After a year and a half, I ran into a law school classmate, who’d been offered a job with Robert Olnick. He decided he had a better offer and said, “Why don’t you 138 December 2014 www.TheRealDeal.com

meet Mr. Olnick?” I told Mr. Olnick I had no experience in real estate. He said, “Don’t worry, in six months we’ll find out if you can be a real estate lawyer.” You make it seem like great timing, luck. It was great timing. The city had problems. We were on the forefront of all the major issues that we’re facing today, like [a lack of] low- and middle-income housing. We became very intimately involved in crafting programs that created housing. You’ve worked on more than 1,000 deals, correct? I have represented most of the major real estate people in New York. ... People know they can trust me. If there’s a unique skill that I have, it’s a people skill. Is there a project you’re most proud of? Well, I walk down the street and most of the buildings, I’ve had something to do with. I guess the one transaction that’s kind of bittersweet for me is I represented Larry Silverstein in his acquisition of the World Trade Center. He was the dark horse. Every major developer in the country was after that transaction. Who’s a tougher client, Mr. Silverstein or Mr. Trump? [Laughs.] It’s not so much tougher. They both have their own idiosyncrasies. They’re both very successful, they’re both very driven. At the end of the day, I’ve gained their friendship and that, to me, is very important. How has your role evolved? In the old days, I did every aspect of a transaction. Now I quarterback the transaction. How do you relax? Golf is a great catharsis. You spend a couple of hours worrying about different things on the golf course. It takes your mind off what your real issues are. Where do you live? 78th and Park Avenue. We’ve lived there for about 12 years.

I have a summer place in Westchester, down the road from the Golf Club of Purchase. Do you think you’ll retire anytime soon? As long as I continue to be healthy, I wouldn’t want to retire. I relish what I do. A good part of what I’m involved with are charities. I believe in giving back. What’s a word or two you’d use to describe yourself? Listen, I don’t have an ego. I think I’m a nice person who has created a reputation of being trustworthy and honest, and having the ability to get things done. What’s the best piece of advice you’ve gotten? Respect for people, whoever they are. When I merged my firm into Stroock, I made sure every person — not only the lawyers — but every person in our mailroom was also taken care of. I didn’t forget where I came from and who helped me get there. How many contacts are there in your address book? I must have 10,000. They’re trying to transition [them] to my iPhone and it’s almost out of space. Who is on your speed dial? Basically my wife and my three boys. How have you used your connections to help someone? [NYU President] John Sexton is one of my close friends. We were neighbors in Belle Harbor, [Queens]. I helped him become dean of the law school. I was representing Larry Silverstein, who was close with Larry Tisch and Billy and Jack Rudin. They picked John as a long-shot candidate and the rest is history. Thanks so much for doing this, Mr. Boxer. Call me Lenny. I’m not a fancy guy. I’m a heimesche guy, that’s the bottom line. By E.B. Solomont PHOTOGRAPH FOR THE REAL DEAL BY studio scrivo www.TheRealDeal.com July 2006 00

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Finishing 2014 with Strength

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